A federal judge Tuesday sentenced a Cedar Rapids disbarred lawyer, who stole thousands from clients for gambling, to the most prison time allowed, saying it was “outrageous” that she hadn’t paid a “dime to restitution” pending this hearing.
U.S. District Chief Judge Linda Reade sentenced Susan Hense, 54, to over four years in prison but before pronouncing judgment she expressed her “extreme disappointment” and disbelief that Hense couldn’t have gotten some kind of job since being disbarred in 2012 and paid some restitution, as her attorney offered as an excuse.
“We have one of the lowest unemployment rates in the area…I can’t believe she couldn’t do something to pay a nickel for the restitution,” Reade said.
Hense pleaded in October to one count of wire fraud. During the plea hearing, she admitted to devising a scheme to defraud 14 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.
She admitted that over the course of the scheme she made unauthorized withdrawals from the accounts, then transferred those funds into her business and personal accounts. She also used clients’ trust money in a “Ponzi-type” scheme as she took money from some to pay other clients she owed. She stole over $710,396 in client funds, according to the plea.
When she was disbarred in 2013, Hense said that she stole the money because she had a gambling addiction, according to an Iowa Supreme Court order.
Reade ordered Hense to pay $860,396 in restitution, which includes $150,000 that was reimbursed to the victims by the Iowa Client Security Commission. The commission paid the maximum amount it normally pays, which was only a small percentage of what was stolen from Hense’s clients. The commission’s fund provides reimbursement from the legal profession for losses caused to the public in cases where lawyers betray their clients’ trust.
Hense said during the hearing she had “no words to describe how sorry I am. On a daily basis, I’m heartbrokenly sorry for my clients.”
Reade said no matter what sentence she could give “the victims will never be made whole.” None of the victims gave victim’s impact statements during the hearing but submitted written ones, which Reade said were particularly sad. She said some of the victims mentioned how their parents “scrimped and saved” to leave them something — which is now gone.
Reade said the 14 victims is a deceiving number because those involved estate work and each may have had several beneficiaries.
Brad Huff, a former client who spoke with The Gazette after her pleading said he signed over $79,000 from his mother’s estate to Hense, but then she took the money and used it for her own benefit.
The money taken from clients ranged from a few thousand to more than $20,000 per client.
Huff, who was out of town and couldn’t attend the hearing Tuesday, said in a phone interview that he knew four years was likely the maximum she would get in prison. He was more upset that there is no way for Hense to pay them back since she has been disbarred. He doesn’t understand why the Iowa Supreme Court doesn’t require lawyers to be bonded as in other professions to protect against this kind of fraud.
Hense still faces charges in Tama County District Court for first-degree theft. She is accused of writing five checks between Oct. 3 and 5, 2012 to the Meskwaki Casino for cash, totaling $13,000, according to a criminal complaint. The checks were returned by the bank for insufficient funds.
Reade also recommended that this federal sentence should run consecutively with a theft sentence if she is convicted.
Hense was ordered to self surrender Jan. 20 to the U.S. Marshals Office.