116 3rd St SE
Cedar Rapids, Iowa 52401
CEDAR RAPIDS - A Cedar Rapids disbarred attorney who stole more than $800,000 from clients pleaded guilty to one count of wire fraud Monday in U.S. District Court.
Susan Hense, 54, faces up to 20 years in federal prison and agreed in the plea deal to pay $837,011 in restitution to 15 former clients.
Some of those clients attended the hearing but declined to comment afterward. Some did say they might want to comment at a later time, after they had talked to Assistant U.S. Attorney Anthony Morfitt, who is prosecuting the case.
When she was disbarred last year, Hense said that she stole the money because she had a gambling addiction, according to an Iowa Supreme Court order.
Hense, tearing up during the hearing, admitted to devising a scheme to defraud clients by telling them their money would be held in a client trust account on their behalf. From December 2009 through Dec. 27, 2012, Hense also admitted that she intended to steal a portion of each client's money.
Over the course of the scheme, she admitted to making unauthorized withdrawals from the accounts, transferring those funds into her business and personal accounts. She also used clients' trust money to pay other clients she owed. She stole and misappropriated $837,011 in client funds, according to the plea.
Brad Huff, a former client who spoke with The Gazette last week, said he signed over $79,000 from his mother's estate to her law firm, but then Hense took the money and used it for her own benefit. He also paid her an advance $1,500, which she required, and charged him $3,000 for her fees on top of stealing the over $79,000 from him.
Hense made a 'confessions of judgment” filed in state court, which stated she stole money from 15 clients. The filing allowed the court to enter a judgment against her for the amounts owed so former clients can try to collect their money. The money taken ranged from a few thousand to more than $20,000 per client.
Huff and the other victims did receive reimbursement from the Iowa Client Security Commission, but it's just a percentage of what Hense stole - the maximum the commission pays, which is $150,000. The commission's client security fund provides reimbursement from the legal profession for losses caused to the public in cases where lawyers betray their clients' trust and misappropriate funds, said Steve Davis, Iowa Judicial Branch communications officer.
Morfitt told the judge the government was asking for Hense to be in custody pending her sentencing.
Scoles said she would order Hense to remain in custody under some additional special conditions: To undergo a mental health evaluation and any treatment; to avoid contact with any victims or witnesses in this case; to maintain or seek employment without holding any fiduciary position; and not being at or near a casino or participate in any other form of gambling, such as the lottery.
After being processed by U.S. Marshals for the federal case, Hense was going to be turned over to Tama County authorities for processing on an outstanding warrant, Scoles said.
Hense was charged last year in Tama County District Court with first-degree theft. She is accused of writing five checks between Oct. 3 and 5, 2013 to the Meskwaki Casino for cash, totaling $13,000, according to a criminal complaint. The checks were returned by the bank for insufficient funds.
According to documents filed Monday in Tama County, Hense was released back to federal pretrial conditions set Monday. No trial date is set for the state charge.
Federal sentencing will be set at a later date.