Public Safety

Waterloo woman convicted of embezzling unemployment benefits may face more prison time

'It's troubling that she's engaging in activity and hiding it from probation'

A woman, who was the lead plaintiff in a class action discrimination lawsuit against the state before being convicted of embezzling over $43,000 in unemployment insurance benefits, is now at risk for more prison time.

A federal magistrate ruled Tuesday that Linda F. Pippen, 48, of Waterloo, will remain in jail pending a hearing Thursday to revoke her supervised release. Pippen pleaded guilty in 2011 to one count of embezzlement from a program receiving federal funds and one count of aggravated identity theft and was sentenced to four years in prison.

Pippen was discharged from prison in 2015 and is serving three years on supervised release.

Assistant U.S. Attorney Patrick Reinert, during Tuesday’s detention hearing, said Pippen had traveled to multiple places without permission from her probation officer while on supervised release. She then lied to the probation officer and they had to conduct a forensic analysis to document her travel activity.  

Reinert said Pippen also gave her probation officer a “dummy” laptop, which wasn’t her laptop, to conceal her activities. He said the fact that Pippen has two Social Security numbers also is also an issue. 

He asked U.S. Magistrate Kelly Mahoney to keep her in jail pending Thursday’s hearing because if she’s released on a “promise” to appear, he doesn’t think the court “can believe what she says.”

John Bishop, Pippen’s lawyer, said they will dispute the prosecution’s travel and “dummy” laptop evidence at Thursday’s hearing. Her phone may have traveled but she wasn’t with it, he added.

Bishop said Pippen hasn’t been involved in any criminal activity and she has prospects for employment.

Mahoney said Pippen was not a danger to the community in the traditional sense but there is risk of fraudulent activity on her part. She is concerned about the risk of her not showing up for court.

Pippen hasn’t followed the conditions of supervised release by opening lines of credit and not being employed. “It’s troubling that she’s engaging in activity and hiding it from probation.”     

Mahoney concluded that Pippen was unlikely to follow any conditions she could impose and ordered her to remain jail pending Thursday’s hearing.

Pippen admitted during her 2011 plea hearing that she embezzled funds from Iowa Workforce Development while she was employed as a workforce adviser from May 2008 to November 2009 in the Cedar Rapids office. She embezzled about $43,582 in unemployment insurance funds, according to court documents.

She altered the computerized accounts of individuals who had been receiving unemployment funds. Pippen didn’t close certain accounts for individuals who found employment, but instead, left those open and eligible to receive benefits, according to the plea agreement.  

She then altered the bank accounts and routing numbers associated with the accounts so those benefits could be directed to bank accounts under her control, court documents show. Pippen misused the identities of several people.

Pippen was also ordered to pay $43,582 in restitution to Iowa Workforce Development. There is nothing in court documents to show if she has paid any restitution. That information isn’t public record.

Pippen has prior convictions for embezzlement, third-degree theft and identity theft, according to court documents. She was hired at Iowa Workforce Development in 1998, and officials after her conviction said they didn't know about her criminal record. 

Pippen was also the lead plaintiff in the class action discrimination lawsuit for black workers suing the state. Lawyers filed a motion to drop her from the suit after she pleaded guilty but a judge denied it.

The lawsuit involved up to 6,000 black people turned down for state jobs and promotions dating back to 2003. Pippen claimed in the suit she was unfairly passed over for a promotion given to a less-qualified white woman. Lawyers were asking for millions in lost wages.

The class action failed but about 32 of those plaintiffs filed individual suits, most claiming racial bias by the state, according to court documents. Last year, the state agreed to pay over $10,000 to settle 10 of those related lawsuits. Others remain pending, were dismissed or withdrawn.

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