Woman committed welfare fraud from jail | PostIndependent.com

Woman committed welfare fraud from jail

Karen Iuele was serving a sentence in community corrections in Rifle when she committed welfare fraud through Eagle County. She was also convicted of fraud and theft in Pitkin and LaPlata counties.
Special to the Daily |

EAGLE — Karen Iuele was already in jail in Garfield County when she committed welfare fraud in Eagle County, she admitted.

For that, she’ll spend another six years in state prison — in addition to the five years she’s already serving — and has to repay $37,000. District Court Judge Paul Dunkelman handed down the sentence Wednesday afternoon.

“I know I can be productive. I have before. I think I have learned some coping skills that can help me do that,” Iuele told Dunkelman.

For Wednesday’s sentencing hearing, Iuele (pronounced You-Lee) had to make the trip from state prison, where she is already serving a sentence for stealing money from an Aspen insurance agency, theft and forgery in Garfield County, and two other convictions in LaPlata County, the area around Durango.

“It’s a little mind blowing for someone to think that while they’re incarcerated, it’s OK to defraud Eagle County.” Courtney Gilbert Eagle County Deputy District Attorney

In fact, the day Iuele pleaded guilty in the Pitkin County case, she renewed her application for food stamps and Medicaid through Eagle County’s human services department.

Welfare inmate

When Iuele was incarcerated in Rifle and applying for food stamps and Medicaid, she used her address in the Eagle County corner of the Roaring Fork Valley.

Iuele got caught when Eagle County’s Human Services department’s fraud unit received a tip that Iuele had income that she had not reported. The money trail led them to Iuele’s three years of welfare fraud, Woods said.

According to court documents, among other things, on those Feb. 10, 2014 welfare renewal application forms Iuele claimed:

• She was not married. She was, and court documents show that her husband’s income alone would have disqualified them from welfare benefits.

• Her daughter was living with her. She was not.

• She failed to list that she was a felony probation violator.

Trail of trouble started 2008

Deputy District Attorney Courtney Gilbert hit the highlights of Iuele’s long criminal record.

• In 2008, Iuele first landed in a courtroom on a La Plata County fraud and theft case.

• In 2008, Iuele pleaded guilty to theft in Pitkin County. Her sentence was deferred if she could stay out of trouble. She didn’t.

• In 2010, LaPlata County saw her convicted of identity theft and stealing more than $8,000 in three thefts. She was resentenced to three more years of probation.

• In 2012, Iuele was sentenced to community corrections for another Pitkin County theft. She pleaded guilty in Pitkin County District Court to forgery and theft from the Michael Sailor Insurance in Aspen, where she was working as an administrator. Iuele admitted she asked for and received more than $6,000 in cash and cashier’s checks from a Michael Sailor client between June 14 and Sept. 10, 2012. The money never made it to the insurance company, court records say.

• In 2012, the day she pleaded guilty to theft in Pitkin County, she applied for food stamps in Eagle County.

• In 2012, she started applying for benefits from Eagle County. She was married and receiving money from her husband. She forged a letter from the county’s human services department, and in 2013 she received recertification for her welfare and food stamp payments.

• In 2014, she picked up another case in Garfield County. She was sentenced to five years in Garfield County’s community corrections in Rifle, an alternative-sentencing program for non-violent offenders. Those five years were to be served concurrently with her four-year sentence in the two La Plata County cases.

• In 2015, while she was in community corrections in Garfield County, she was arrested and pleaded to stealing as much as $5,000 from an Office Depot.

That got Iuele kicked out of community corrections and into the state prison system.

“It’s a little mind blowing for someone to think that while they’re incarcerated, it’s OK to defraud Eagle County,” Gilbert said.

Iuele’s defense attorney, Thea Reiff, said Iuele became desperate for funds when she needed hand surgeries costing more than $20,000.

In addition, Iuele said she has a lump in her throat, pushing against an artery. It’s not yet known if it’s malignant, Reiff said.

Staff Writer Randy Wyrick can be reached at 970-748-2935 or rwyrick@vaildaily.com.

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