Bozeman woman admits using money management service to defraud court-appointed clients
MISSOULA – A Bozeman woman who ran a money management service for court-appointed clients unable to manage their own finances on Tuesday admitted embezzling funds from the clients and spending most of the money on gambling debts, U.S. Attorney Kurt Alme said.
Ellen Lorraine Van Ausdol, 77, pleaded guilty to wire fraud and to making and subscribing to a false income tax return. Van Ausdol faces a maximum 20 years in prison, a $250,000 fine and three years of supervised release.
U.S. Magistrate Judge Jeremiah C. Lynch presided. He will recommend Van Ausdol’s plea be accepted by Chief U.S. District Judge Dana L. Christensen, who is hearing the case. Sentencing was set for July 19. Van Ausdol was released.
Prosecution evidence showed that Van Ausdol operated a fiduciary business, called Fiduciary Consulting and Management. The business provided money management services for court-appointed clients, many of whom have mental deficiencies and lacked the ability to manage their own money.
An investigation found that Van Ausdol embezzled from her clients during a six-year period that started in about 2010 and ended in April 2016. Van Ausdol told law enforcement that she used the majority of the money to cover her gambling expenses.
In addition, Van Ausdol’s theft resulted in her owing the IRS additional income tax for the six-year period. In one of the tax counts, Van Ausdol signed a tax return for 2014, omitting the total amount of income from embezzled funds for that year.
The parties have not resolved the total fraud loss or tax loss and will address those issues at sentencing. The prosecution is alleging the fraud loss is $444,000 and the income tax loss is $52,894.
Assistant U.S. Attorney Ryan Weldon prosecuted the case, which was investigated by the IRS and FBI.