Victims not made whole

CEDAR RAPIDS - Janel Lutz thought Susan Hense was the 'answer to her prayers” as the lawyer helped her through a difficult divorce in 2011.

'She was smart and knowledgeable and compassionate,” Lutz, 42, of Cedar Rapids, said a few weeks ago. 'I'm a private person, so it was hard to pour out my heart and soul and share those intimate details.”

Lutz was shocked to find out in 2013 that Hense, 54, of Cedar Rapids, had stolen what was left of her divorce settlement - $83,000. This was her only means to support herself and her twins.

Lutz was diagnosed in 2009 with chronic myelogenous leukemia, an uncommon type of cancer of the blood cells, and wasn't able to work.

'I didn't know what God was trying to tell me. I was going through the divorce, the leukemia, having two kids and now this.”

Lutz said the only way she survived was through her faith and with the support of her family, friends and her extended family at Springs of Life Foursquare Church.

Lutz said at first she just felt 'like when you're punched in the stomach - like in shock.”

'She acted like she truly cared for me, and I would like to think she did,” Lutz said.

Lutz said by the time Hense was sentenced in January she had to forgive her so she could move on and get well for her six-year-old son and daughter. She has been sick since they were one and a half, and she felt as if she wasn't the mother she wanted to be because of her illness.

Lutz admits she didn't understand how lawyers use clients' trust accounts and how Hense was misusing them. She had never had an attorney before.

In all, Hense stole more than $800,000 from Lutz and 13 other clients to feed her gambling addiction, which she admitted to the Iowa Supreme Court in 2013. She told the clients she was holding their money in trust accounts on their behalf, according to the plea agreement.

From 2009 to 2012, she made unauthorized withdrawals from the accounts and then transferred the funds into her business and personal accounts.

Hense also used the clients' funds to pay other clients she owed.

The disbarred lawyer was convicted of wire fraud and ordered to pay more than $860,000 in victim restitution. She is now serving four years in federal prison.

‘I never felt pressured'

Lutz had told Hense she wasn't good with financial matters, and Hense said she would help 'budget and invest” her money. In hindsight, Lutz said she realizes it was a way Hense could hold onto her money after the divorce was settled.

During this time, Hense would give Lutz a set amount of her money each month for living expenses. Lutz took a portion of the money to buy a house for her and her children.

'She and her husband even came with me and looked at the house I was buying,” Lutz said. 'I wanted to put down more money on the house, but Susan didn't want me to. I guess now I know why. At the time, I never felt pressured by her.”

Hense was well aware that Lutz had cancer when they met in 2011. Lutz had to have a stem cell transplant in 2013 because her body wasn't responding to any chemotherapy drugs. Lutz's sister Shelly Kirchmann was her a donor - a perfect match.

A month after the transplant, she received a letter from Hense - a similar letter was sent to all Hense's clients - admitting what she had done. Lutz received the last payment from her about month before the letter.

'It (the letter) added more stress for me,” Lutz said. 'I had no other income at the time and I couldn't work. If it hadn't been for my family and church family, I couldn't have made it. They've helped me so much.

'I still have respiratory (problems) and get fatigued. It's takes about one or two years before you're fully recovered,” Lutz said.

Lutz's mother moved in for a while to help out, but now she and the children are on their own.

‘Every tool available'

Lutz said she knows she will never get her money back. She did receive $16,000 from the Iowa Client Security Commission.

The commission's client security fund provides reimbursement for losses caused to the public in cases in which lawyers betray their client's trust and misappropriate funds.

The maximum payment from the fund is $150,000 per attorney. That amount was split among Hense's 14 clients.

Though, according to the commission, this was the largest claim paid by the fund, Hense's clients received only a small portion of what was taken from them. The amounts stolen for each ranged from over $3,000 to more than $216,000.

Assistant U.S. Attorney Matt Cole said they have tools for collecting victim restitution, which is a priority, and aggressively try to recoup those funds. But it's not always possible.

Cole said it's difficult to track collections because, until a case is closed, it's not counted.

As an example, the Northern District collected $1.3 million in 145 closed cases for victims from 2012 to 2014. This amount doesn't include still-open cases, such as Russell Wasendorf Sr., former chief executive officer of Peregrine Financial Group in Cedar Falls, who was convicted in 2012 of embezzling more than $215 million from clients over a 20-year period.

Cole said most defendants, unlike in the Hense situation, have tangible items such as houses, cars - and even a plane, as in one drug case - that is forfeited to the government, sold and the proceeds are returned to the victims. If there's a tax return or another government payment such as Social Security owed to a defendant, the government can garnish it.

If a defendant receives an inheritance or a workers' compensation settlement while in prison, that, too, can be garnished.

'We have even found hidden money in secret accounts,” Cole said. 'We use every tool available to collect that money.”

Cole said while the defendants are in prison, they are required to make quarterly payments toward their restitution. If they are receiving money from family and friends, the government can garnish a portion of those.

If an inmate is paroled, his or her debt will monitored by a probation officer, and they can be taken back to court if they aren't paying.

Lutz said she realizes Hense doesn't have those tangible things because she likely used it for gambling. She can't bear to think if Hense didn't actually have an addiction and just deceived her and all the others without having an actual problem.

'I hope she finds God if she hasn't,” Lutz said. 'It doesn't do any good to be bitter and angry. I hope she gets the help she needs.”