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California Democratic campaign treasurer gets eight years for fraud

By Mary Slosson

SACRAMENTO (Reuters) - A Democratic campaign treasurer accused of defrauding the campaign war chests of U.S. Senator Dianne Feinstein and other California politicians was sentenced to eight years in prison and ordered to pay $10.5 million in restitution on Wednesday.

Kinde Durkee, who controlled the funds of some 400 political candidates and groups, was arrested in September 2011 and charged with criminal mail fraud. She pleaded guilty in March as part of a deal with federal prosecutors.

Durkee, 59, appeared in the U.S. District Court for the Eastern District of California and was ordered by Judge Kimberly Mueller to spend 97 months in federal custody and pay $10,529,915.76 in restitution.

Mueller said the loss of campaign funds "certainly" affected the democratic process and shook the faith of citizens who had made campaign donations.

"I want to take this opportunity to apologize for my actions," Durkee said in court. "I take full and complete responsibility for what I have done."

The arrest of the longtime treasurer for Democratic politicians left the campaigns of a number of elected officials in disarray.

Prosecutors have said in court documents that Durkee used money siphoned from her clients to pay expenses such as the mortgage on her condominium, visits to Disneyland, charges on her credit cards, medical bills and her own firm's business costs.

Feinstein has said in documents filed with the Federal Election Commission that she lost at least $4.5 million to Durkee.

Mueller ordered Durkee to undergo mental health treatment while incarcerated, saying she would have to learn to "avoid behavior patterns that led to this situation."

Both the judge and Durkee's lawyer, Daniel Nixon, declined to elaborate on the nature of Durkee's mental health issues.

Durkee, dressed in a simple black outfit, began to cry during the discussion of her mental health and behavior.

"This was a very egregious offense. It was a deep violation of the trust of her clients, and had a profound impact," U.S. Attorney Benjamin Wagner of the Eastern District of California told reporters after the sentencing.

Under the terms of her plea agreement, to help make restitution to her former clients, Durkee must sell a property in Burbank, California, that had housed the offices of her now-defunct business, Durkee & Associates. She has already liquidated roughly $91,000 from her 401(k) savings account to make payment toward that restitution, her lawyer said in court.

"Unfortunately, like many fraud cases, this is a case in which most of the money that was taken was spent years ago," Wagner said. "There's really no winners in this situation."

Durkee must turn herself in to federal custody on January 2.

(Editing by Mohammad Zargham)

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