A Pulaski County woman who pleaded guilty in August to bank fraud and theft of government funds was sentenced to eight years in prison on Tuesday and ordered to pay a $100,000 fine by a federal judge who called her crimes "some of the worst conduct I've ever seen."
Kelli Suzanne Hogue, 59, of Sherwood, pleaded guilty to issuing herself 180 unauthorized checks over a seven year period from Runyan Sanitary Sewer District 211 in North Little Rock, totaling nearly $670,000, and to stealing $122,000 from the Social Security Administration by receiving disability payments she was not entitled to.
U.S. District Judge Lee Rudofsky said the brazen nature of her crimes called for an upward variance of 39 months in prison above the maximum sentencing guideline range of 57 months.
At the outset of the nearly two-and-a-half hour hearing, Hogue's attorney, Hubert Alexander of Jacksonville, objected to Assistant U.S. Attorney Patrick Harris' withdrawal of two points credit in exchange for Hogue's acceptance of responsibility. The credits were offered for her cooperation in sentencing with a third point at sentencing possible.
"She has not accepted responsibility," Harris said. "She has continued her conduct since her plea."
At issue was $669,000 in restitution that Hogue paid before her sentencing hearing, raising questions of where the money came from. Harris said Hogue told the court the money came from her brother, but the U.S. Probation Office said Hogue reported it came from gambling proceeds.
Rudofsky spent nearly an hour trying to get to the bottom of evidence indicating the money may have come from at least $4 million the government said Hogue received in tax refunds from five tax returns suspected to have been filed fraudulently. An investigation regarding those tax returns is ongoing, according to the U.S. attorney's office.
But Alexander maintained that the source of the money was not the business of the U.S. attorney's office.
"They didn't know she had all that money if she didn't put it down," he said. "So she pays it back and she comes in and they say you've got $2 million dollars here, where'd you get it? Why does she have to answer that question? If she says I got it from gambling or I got it from my brother or I got it from whoever, why does it matter where she got that money unless they think she's committed another crime?"
Turning to Rudofsky, Alexander said, "If you were her lawyer you'd have told her don't answer that question, they're going to charge you with something else if you don't give them the right answer."
Harris said where the money came from was a problem. He said part of the plea agreement required that Hogue provide financial documents to the U.S. attorney's office under penalty of perjury.
"She said she got it as an early inheritance ... Then probation called her in and she said I got it gambling," he said. "So she told two stories."
Finally, Rudofsky overruled Alexander's objections and moved to the sentencing phase of the hearing. Under federal statutes, Hogue could have been sentenced to a maximum prison term of 30 years on the bank fraud count and 10 years on the theft of government funds count and been fined $250,000 on each count.
Under sentencing guidelines, she faced a range of 46 to 57 months and a fine of $15,000 to $150,000.
After Alexander argued that Hogue's assets had been frozen, Harris pointed out that since her guilty plea seven months ago Hogue had purchased two homes for $300,000 cash and paid $67,000 cash for a Cadillac.
"There is still money out there we haven't been able to seize," Harris said, adding that the government knows of one bank account Hogue has that hasn't been frozen and contains at least $100,000.
Following a brief recess, Alexander argued that Hogue's health called for a more lenient sentence.
"Anything you give her is a substantial amount based on her health, her condition and how she is in life at this point," he said. "She basically has no money when it's all said and done but she has significant health issues."
Alexander addressed a number of letters sent to the court from supporters asking for leniency that it was discovered Hogue had written herself.
"Some of those letters we told you she wrote with other names are not necessarily untrue but just not true the way they came down," he said.
According to court documents, six letters were received asking for leniency for Hogue, including three purportedly from doctors pleading leniency for heath issues and one from a pastor outlining her church and charity work. When presented with the letters, the pastor denied writing a letter and the three medical facilities the physician letters were supposed to have come from denied all knowledge also.
It was on the strength of those forged letters that the U.S. attorney's office had Hogue's bond revoked earlier this year. She has been detained in the Pulaski County jail since February 10.
Then Alexander argued Hogue's mental state prevented her from staying within the confines of the law.
"You've heard of kleptomaniacs," he said. "Well, this is a big kleptomaniac ... How can she know right from wrong when she keeps doing it?"
Alexander insisted that had Hogue not paid restitution in advance none of this would have ever come to light.
But Rudofsky countered that the argument did not convince him a light sentence was appropriate.
"This is some of the worst conduct I've ever seen," Rudofsky told Hogue as he prepared to sentence her. "You were in a significant position of trust and you hurt many, many people ... This is the kind of conduct society cannot tolerate."
Rudofsky said Hogue's conduct, especially in the matter of the fake letters, indicated not just a lack of respect for the law but "contempt for the law."
"I've never seen anything like this before," he said. "If you don't have respect for the law now, you will after my sentence."
In addition to the eight year prison sentence and $100,000 fine, Hogue will be required to served three years supervised release following completion of her prison term.