Archive for Wednesday, July 7, 2004

Local woman faces sentence in fraud case

July 7, 2004

A woman who now lives in Tonganoxie faces sentencing in September on charges that she bilked her elderly mother-in-law out of $760,000.

According to federal officials, Susan Y. Martin, 52, formerly of Red Lodge, Mont., pled guilty last month in federal court to charges of wire fraud, forgery of U.S. treasury bonds and tax evasion. Those three charges were part of a 10-count federal indictment against Martin.

The case against Martin centers on the financial affairs of Julia Youngblood, a Montana woman who died in December 2003 at 82.

Martin, who was the widow of Youngblood's son, Terry, was granted power of attorney over the elderly woman's financial affairs shortly after the woman fell and moved to a nursing home in January 1997.

And during the next 3 1/2 years, Martin converted about $760,000 of Youngblood's assets to herself. Martin sold the elderly woman's house, took shares of stock and depleted checking accounts.

Within weeks of receiving power of attorney for Youngblood's finances, Martin wrote several large checks to herself; to her husband, Charles Martin, whom she married in 1995; and to her son. While the older woman was in the intensive care unit of a Billings, Mont., hospital, Martin wrote herself two checks from Youngblood's account totaling $50,000.

Six months later -- in October 1997 -- Martin sold the woman's home, paying herself $8,000 from the proceeds. That same day, she wrote a $20,000 check to herself and a $20,000 check to her husband, both on Youngblood's account. She also used proceeds from the house sale to purchase savings bonds in the names of Youngblood's grandchildren and great-grandchildren that Martin later cashed.

Martin also took shares of Sara Lee stock valued in excess of $150,000 that Youngblood had accumulated. Youngblood had earned the stock as a retirement benefit when she worked for the company.

By mid-2000, Youngblood's assets were gone.

"The woman finally had to go on Medicaid to get the nursing care that she needed," said John Harrison, public information officer for the Internal Revenue Service's Denver office.

In July 2000, Youngblood talked with a social worker at a hospital, complaining Martin was not providing her with an accounting of her financial affairs. Youngblood asked an adult protective services casework be assigned to help her.

On a list of Youngblood's expenses that Martin gave to the social worker was a payment to a Billings hospital for $100,000. But hospital records show about $760 was paid.

In addition, Martin filed gift tax returns in Youngblood's name, indicating large gifts to Youngblood's grandchildren and great-grandchildren. But they never received those gifts.

By early 2001, the caseworker helped Youngblood apply for Medicaid to pay for her nursing home care.

According to authorities, Martin isolated Youngblood from others by not allowing Youngblood to have a telephone in her room at the nursing home, directing the nursing home to divert all of Youngblood's mail to Martin and telling Youngblood's attorney that Youngblood no longer required the attorney's services.

Youngblood, with the help of the caseworker, did file a civil lawsuit against Martin. A settlement in that case provided that Martin return $290,000 of the money she had taken. In October 2003, a federal grand jury indicted Martin on 10 criminal charges -- two counts of wire fraud, one count of forgery involving U.S. treasury bonds, three counts of aiding or assisting in the preparation of a false tax return and four counts of tax evasion for the years 1997 through 2000.

Two months after the indictment, Youngblood died.

Martin will be sentenced Sept. 9 in U.S. District Court in Billings, Mont. At sentencing, Martin will face up to 20 years in prison and a $250,000 fine on the wire fraud charge; up to 10 years in prison and a $250,000 fine on the forgery charge; and up to five years in prison and a $100,000 fine on the tax evasion charge.

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