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Burbank accountant held in fraud case

Kinde Durkee, who served as treasurer for many Democratic Party campaigns, is charged with one count of mail fraud in connection with work she did on behalf of a member of the state Assembly.

September 05, 2011|By Abby Sewell, Los Angeles Times

A Burbank accountant who has served as treasurer on hundreds of political campaigns has been jailed on a federal fraud charge that centers on her work for a state Assembly member, authorities say.

Kinde Durkee was arrested Friday afternoon at the Burbank office of her firm, Durkee & Associates, and is charged with one count of mail fraud. Interviews with some of her clients suggest that the case may expand to include charges of embezzlement involving multiple victims.

The prosecution's complaint against her "focuses on transactions involving the account of a single member of the Assembly, but our investigation is continuing," said Lauren Horwood, a spokeswoman for the U.S. attorney's office in Sacramento. The complaint itself hasn't been released. Durkee is scheduled to appear in court for the first time Tuesday.

Horwood declined to identify the Assembly member whose account was involved or the period of time during which the conduct allegedly took place.

Representatives of Durkee & Associates could not be reached for comment Sunday. Durkee's husband, John Forgy, reached by telephone, said he did not know enough about the case to comment and was unsure whether his wife had an attorney.

Durkee counted many prominent Democratic politicians among her clients, including Sen. Dianne Feinstein (D-Calif.), Rep. Loretta Sanchez (D-Garden Grove), many state legislators and several L.A. City Council members. Longtime clients, who said they had come to her because of the strength of her professional reputation, expressed shock at the news of her arrest, which was first reported Sunday in the Orange County Register.

State Sen. Lou Correa (D-Santa Ana) said the FBI notified him of the arrest Friday evening and told him his campaign fund might have fallen prey to embezzlement of a "substantial amount" of funds, possibly in the hundreds of thousands of dollars.

Correa said the phone call Friday was his first indication of potential issues with Durkee, whose services he has used for more than 15 years. "At first I thought it was some kind of sick joke," he said.

Assemblyman Jose Solorio (D-Santa Ana) said he had also been notified by the FBI that Durkee might have embezzled from his campaign. He declined to comment on the details. In a statement, Solorio wrote, "I hired her because she was regarded as a highly respected professional, and for decades, the treasurer for the campaigns of many prominent elected officials in the state."

It was unclear how many other campaigns were part of the investigation. Longtime Feinstein campaign consultant Bill Carrick said he was notified Friday by the U.S. attorney's office that Durkee was going to be arrested on charges relating to a California state campaign but said he was unsure whether the senator was a potential victim.

L.A. City Councilman Dennis Zine, who had not been notified of Durkee's arrest, said he had contacted her a couple of months ago after finding an erroneous expenditure — about $1,000 in printing costs — on one of his campaign forms. Zine said Durkee immediately acknowledged the error, and that incident was the only time he had issues with her.

Durkee had come under scrutiny for professional practices before. In 2009, she and a client, gubernatorial candidate Steve Westly, were fined $104,500 by the Fair Political Practices Commission for failing to report sub-vendor payments, accrued expenses and expenditures paid to Durkee & Associates by Westly's campaign committee.

In 2008, the office of Durkee & Associates was searched by investigators with the L.A. County district attorney's Public Integrity Unit in connection with an investigation into a committee called Citizens for Dependable and Reliable Leadership. Investigators at the time were trying to determine whether the committee was controlled by state Sen. Alex Padilla (D-Pacoima) and City Councilman Tony Cardenas. State law bars elected officials from controlling independent expenditure committees.

Dave Demerjian, head of the Public Integrity Unit, said the district attorney's office closed that investigation and forwarded the information to another agency. The committee that had been under investigation was fined $2,000 by the city Ethics Commission for failing to submit copies of campaign mailers in a timely way for the public to review.

abby.sewell@latimes.com

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