The former Ridgefield School District employee who siphoned more than $800,000 into her personal bank account was sentenced Friday to two years in prison.
Peggy Kane, 57, was sentenced by Judge Robert J. Bryan in U.S. District Court in Tacoma. She pleaded guilty to one count of wire fraud, a felony, in May. The judge sentenced Kane according to the plea deal recommendations agreed upon by federal prosecutors and Kane’s attorney, Therese Lavallee.
In addition to the prison time, Kane will have three years of post-prison supervision and owes $806,645 in restitution to Travelers Indemnity Co., which reimbursed the district for its losses.
The sentence was less than the calculated guidelines of 33 to 41 months in prison. Lavallee said the judge has the discretion to lessen the sentence and elected to do so because Kane accepted responsibility for the crime and cooperated with the government in her prosecution. Kane’s personal characteristics, lack of a criminal history and unlikeliness to reoffend also contributed to the judge’s decision, Lavallee said.
Kane was emotional in court and asked Lavallee to read a prepared statement on her behalf, Lavallee said.
“She accepts full responsibility for all of her behavior and is remorseful for her conduct and apologized to the community of Ridgefield and her family and friends,” Lavallee said. “She accepts the court’s punishment and is motivated to repay her restitution.”
The Ridgefield resident forfeited her deferred compensation retirement fund, an IQ Credit Union account in her and her husband’s name, all jewelry she acquired in the past 10 years, a 2008 Chevrolet Tahoe and a 2004 Chevrolet SSR.
A pre-sentencing investigator estimated the value of those items to be about $159,000, Lavallee said. As part of the plea deal, the government will not seek forfeiture of her home or real property. Kane intends to hand over additional money and hopes to complete payment of the restitution once released from prison, Lavallee said.
The Bureau of Prisons will notify Kane when and where to surrender for her sentence. Lavallee expects that date to be in the next three to six weeks.
Assistant United States Attorney Norman Barbosa described how the theft affected Ridgefield students in a sentencing memo.
“Ms. Kane’s embezzlement deprived the children who attended schools within the district of resources that were intended to support their education,” Barbosa wrote. “While the district has since been reimbursed for its losses by an insurance policy, the children who attended school during the course of the theft will not recover those lost resources.”
Kane admitted in May to defrauding the school district of $806,645 over a 10-year span beginning around July 1999 to finance frequent vacations, purchase jewelry, create college funds for her grandchildren and purchase several cars. Kane, who worked as the district’s assistant business manager, manipulated the payroll system to inflate her monthly pay.
District officials noticed discrepancies in the district’s finances and Kane’s pay last May. Kane resigned from her position after 21 years with the school district when confronted by Superintendent Art Edgerly.
After learning of the theft, the district reorganized its finance department, implemented a new finance system with greater controls and provided extensive professional training for district office employees.
Last week, the Ridgefield School District received an insurance reimbursement from Travelers Indemnity. The money will be used to purchase programs or technology that can be used and sustained by the district, Edgerly said.
Marissa Harshman: 360-735-4546 or marissa.harshman@columbian.com.
