March 28, 2012 / 4:24 AM / in 7 years

California campaign treasurer charged in $7 million fraud

LOS ANGELES (Reuters) - The Department of Justice on Tuesday charged a top California Democratic campaign treasurer with five counts of mail fraud that caused a loss of over $7 million dollars to her clients, including Sen. Dianne Feinstein, court documents show.

Kinde Durkee, who controlled the funds of roughly 400 political candidates and groups, was arrested in September 2011 by federal agents and charged with criminal mail fraud.

There were at least 50 victims of Durkee’s fraudulent accounting, according to the additional charging documents filed with the U.S. District Court for the Eastern District of California late on Tuesday.

Durkee used money that belonged to her political campaign clients to pay her mortgage, pay off charges on her credit card from Disneyland and, and pay her own firm’s business expenses, according to the court documents.

The fraud investigation froze the coffers of dozens of Democratic politicians across the state of California during an election year, and left candidates scrambling to raise more money.

Senator Feinstein’s campaign sued Durkee in a related case in October for fraud and breach of contract in a lawsuit that also accused First California Bank of aiding that fraud.

U.S. Attorney’s office spokeswoman Lauren Horwood said her office had no comment on the case.

Durkee’s lawyer did not respond to inquiries for comment. She is expected to appear in court for a preliminary hearing on Friday.

Editing by Tim Gaynor

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