Woman pleads not guilty in alleged fraud against R.I. nuns

Woman pleads not guilty in alleged fraud against R.I. nuns

 

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The Sisters of the Religious of Jesus and Mary wanted to buy a house for fellow nuns who work with poor women in California.

Linda Rose Gagnon, who had attended a boarding school run by the order, was visiting the sisters at a convent in Rhode Island in 2008 when she heard they were looking to buy property they had their eye on in San Diego.

Gagnon told the sisters she worked in real estate, and persuaded the order to wire $285,000 from its retirement account to her business.

But instead of purchasing the property, Gagnon spent the money on personal items such as lingerie, pet sitting, car payments, mortgage payments and visits to retail stores, according to a federal indictment filed last week in the U.S. Court of the Central District of California.

On Monday, Gagnon pleaded not guilty to three counts of wire fraud at a court in Santa Ana. Her lawyer, Michael Khouri, says Gagnon is innocent. According to the Associated Press, he says she intended to help the nuns, didn’t know the money had arrived, or how it was spent and suspects a company employee was involved.

If convicted, Gagnon could face a maximum sentence of 60 years in federal prison.

The Religious of Jesus and Mary, RJM, is an international apostolic congregation of 1,550 sisters. They serve in educational institutions, retreat houses, catechetical and social-service centers and pastoral ministries. According to the order’s website, there are three convents and a nursing home in Rhode Island — Dina Mission Center in Woonsocket; St. Timothy Mission Center in Warwick; Kateri Tekakwitha Catholic Mission in Exeter; and St. Antoine Residence in North Smithfield.

Gagnon told the sisters she was the founder and chief executive officer of Rose Enterprise Inc., a company with an office in Tustin, Calif., that helped clients with delinquent mortgages and other real estate transactions. But, according to the indictment, neither Gagnon nor Rose Enterprise ever held a California real estate license.

Gagnon said she was an expert in real estate transactions and foreclosure sales, according to the indictment, and offered to help the order buy the property. Around Nov. 21, 2008, she sent the nuns a letter of authorization she wanted the order to sign so she could act on their behalf. The letter, says the indictment, was printed on a fake letterhead that purported to be that of a licensed California lawyer.

On Dec. 1, 2008, Gagnon told the order that the property was going to be auctioned a week later, but that she had arranged to buy it directly from the bank, according to the indictment. She told the order to wire $285,000 from its retirement fund to Rose Enterprise’s account so she could purchase the property.

But Gagnon didn’t use the money to purchase the property, the indictment says. Instead, from Dec. 5, 2008, through February 2009, Gagnon used the money to make personal purchases.

She spent $2,450 on pet-sitting services, $217 in salon/nail services, $448 for lingerie, $1,523 in car payments and $32,575 in mortgage payments, says the indictment. She made $39,865 in cash withdrawals or cash equivalents and used tens of thousands of dollars to pay employees at Rose Enterprise. She made purchases at Nordstrom, Costco, the Orange County Pet Clinic and grocery stores. She used the money to pay credit cards, pharmaceuticals, life-insurance premiums and rehabilitative services.

The order began to ask for the money back as early as Dec. 18, 2008. Gagnon held the order at bay, says the indictment, and in March 2009 she tried to get another $285,000 by telling the order that she was trying to close the deal, but that the funds were not available because they were tied up in “ ‘double’ and ‘triple’ escrow.” 

Posted by Nikkei 225 at 09:57
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