A Rusk County employee of 42 years has entered a plea agreement on two of 12 charges related to a 10 year long scheme of defrauding the county out of $702,351.
Sandra L. Stiner, 66, began as a receptionist in 1976 and retired in January 2019 as the Child Support Manager in the Health and Human Services Department.
The criminal complaint filed in the U.S. District Court alleges Stiner defrauded Rusk County out of $702,351 to pay for a variety of personal expenses. Stiner was charged with 10 felony charges of wire fraud and two felony counts of aggravated identity theft.
According to a U.S. Department of Justice plea agreement, Stiner agreed to plead guilty to two of her 12 charges. The penalties of these two charges carry a punishment of at least two years and up to 22 years incarceration or $500,200 in fines or four years of supervised release or a combination of those penalties. Stiner will also be required to enter into an appropriate restitution order.
In the plea agreement, Stiner agrees to pay restitution for all losses related to her offenses. Restitution of the loss amount is totaled at $702,351.
Forfeiture allegation will require Stiner to forfeit to the United States District Court any property constituting or that derived from the traceable proceeds that resulted from her wire scheme.
In the event the U.S. is unable to locate or retrieve the property Stiner purchased, the United States District Court will be entitled to the forfeiture of substitute property including her home, camper, monthly lifetime pension, furniture, jewelry, electronics, funds in any bank account owned by Stiner and vehicles. She will be required to surrender the cash value of her life insurance policies and any other property deemed of value to pay restitution.
The complaint alleges Stiner used the funds for various personal expenses including $263,631 in credit card payments, $200,153 in cash withdrawals, $50,009 in retail shopping charges, $20,118 in iTunes charges, $18,620 in car loan payments, $14,741 in utility payments, $41,899 in home mortgage payments and $3,992 for a French bulldog.
In addition to the maximum penalties, any violation of the supervised release term could lead to an additional term of imprisonment.
Prior to sentencing Stiner has agreed to complete a financial statement to determine net worth and cash flow. The United States’ agreement to the plea agreement, sentencing and submitted financial information will be based, in part, on Stiner’s full and truthful accounting and her efforts to make the agreed-upon immediate restitution payments.
According to the criminal complaint, around June 2010 and continuing until Stiner’s retirement on Jan. 15, 2019, it was discovered Stiner knowingly, and with intent to defraud, devised and participated in a scheme to defraud the Rusk County HHS department and obtained money and property by means of materially false and fraudulent pretenses, representations, promises and by the concealment of material facts.
A La Crosse home-based individualized therapy services company was founded in 2007 to provide service in western Wisconsin, including Rusk and Price counties. The therapy service company contacted Rusk County to provide services and initially billed the counties directly.
Later the billing went directly to the state of Wisconsin’s Health and Human Services Medicaid portal, called ForwardHealth. The therapy services company provided services for one child in Rusk County in 2009; however the services were discontinued after one week due to staffing issues.
The founding doctor communicated with clients, agencies and staff by email; however, following investigation it was determined the doctor did not communicate with a gmail email account. Investigation revealed Stiner had created a gmail email account in the doctor’s name to communicate with Rusk County.
The complaint alleges the company used a US Bank account and used a different logo and address on its invoices than was discovered during investigation.
Stiner misappropriated money from HHS by creating and submitting fictitious invoices from the therapy services company for non-existent intensive in-home autism services for twin boys in Price County.
It was determined Stiner bypassed the internal controls of HHS and the Rusk County Finance Department by engaging in a variety of fraudulent and misleading conduct.
The complaint alleges Stiner lied to the HHS director and Finance director when questioned about the payments made to the therapy services company. Stiner created a false story by telling her supervisors that because of a conflict of interest with Price County HHS paying for therapy services, Rusk County HHS was brought in to handle the payments to therapy services company. She also allegedly lied about being authorized to use the Youth Aids Allocation from the State of Wisconsin.
Stiner submitted the therapy services company invoices directly to the Rusk County Finance Director, instead of submitting them to the Rusk County HHS Finance Manager for approval and coding. Stiner also created fake initials on the invoices to make it appear as if someone in Price County HHS had approved the invoices. She then put her own initials on the invoices to show purported approval by the HHS finance department and wrote down the general ledger account to show the proper coding of the payment.
Stiner either hand-delivered or emailed the fake therapy services company invoices to the Rusk County finance director.
Stiner altered the monthly payment approval report prior to submitting to the Rusk County HHS executive director and the Rusk County HHS board. She allegedly altered reports by deleting the monthly expenditures to the therapy services company and received a true version of the report from the Rusk County finance department.
After receiving the true version of the report, she then altered it and sent it to the Rusk County HHS executive director who unknowingly presented the altered version to the Rusk County HHS board at the monthly board meetings. The board unknowingly approved the altered monthly HHS expenditures which included the payments to the therapy services company, totaling about $6,400 per month.
According to the complaint, Stiner used her work computer to create many of the fake documents and emails, concealing her criminal activity by deleting all of the electronic versions of the altered and fictitious documents and emails she created. Then she shredded all of the paper copies of the altered and fictitious document and emails in her office.
Stiner, in her defrauding scheme, used the identification of real people and real entities to create documents that seemed legitimate to cover her fraud scheme.
As part of her defrauding scheme, Stiner allegedly misused the name and taxpayer identification number of the therapy services company and its founder to create a nominee bank account, email account and fictitious invoices. She forged the signature of the therapy services company’s founder on various documents and IRS forms to make them appear legitimate to Rusk County.
Stiner also took the name of a LaCrosse CPA firm to create a fictitious letter and financial statements for the therapy services company.
Further, Stiner took the name and seal of the Wisconsin Department of Safety and Professional Services and a person in that office to create a fictitious letter for the therapy services company. She also took the names of two children and misused them to create fictitious Price County Circuit Court Consent Decree Orders.
Stiner’s scheme also included her creating a nominee bank account in the name of the therapy services company, but with her social security number to ensure she received the proper Form 1099-INT and not the company.
Stiner submitted a direct deposit authorization, with a forged signature of the company’s founder, for the therapy services company to Rusk County to direct deposit the invoiced payments to her bank account. She created two fictitious Price County Circuit Court Consent Decrees to fraudulently order the payment of in-home services for the two children. The false documents were submitted to Rusk County HHS to support the payments she was receiving.
W-9 IRS forms were submitted to Rusk County with false information.
Additionally, to conceal her fraud scheme, the complaint alleges Stiner created a fictitious letter from someone at the Wisconsin Department of Safety and Professional Services to quash suspicions of the founders professional license.
On Jan. 3, 2019, prior to her retirement, Stiner created a fictitious letter of financial statements from a CPA firm to falsely report the therapy services company was officially closed as of Dec. 31, 2018. The fake documents were submitted to the Rusk County finance director in a further effort to quash the filing of documents to the IRS. These steps were done to help conceal her fraud scheme, according to the complaint.
Other documents Stiner created included fake contracts, fake Memoranda of Understanding, IRS forms and invoices with some backdated and with inserted amendments.
On June 27, 2018 Stiner sent a fake email from the fictitious email account she created for the founder, to the Rusk County finance director stating that the therapy services company was terminating it’s contract with Price County and closing the business to move to the United Kingdom.
Stiner’s actions to defraud Rusk County caused the county to expend $702,351 to pay fictitious invoices she submitted. Investigation determined that prior to Stiner’s fraud scheme Rusk County paid the therapy services company by check, and not the direct deposit she created.
A combined plea and sentencing hearing will be scheduled