PROVIDENCE, R.I. – A Pawtucket woman who, while working as office secretary to a local auto body business, devised a scheme to fraudulently obtain the proceeds of nearly 200 checks provided to customers by their insurance companies to pay for vehicle repairs, has been sentenced to two years in federal prison, announced United States Attorney Zachary A. Cunha.
Idalee Johnston, 48, pleaded guilty on October 13, 2021, to mail fraud.
According to charging documents, beginning in 2016, Johnston used two methods to obtain these funds: in some cases, she would not have customers sign direct payment forms that would have caused their insurance payments to be made directly to the auto body shop for repair work; in other cases, where customers did sign payment forms, she would not forward them to the insurance companies. As a result of her actions, insurance checks to pay for repairs were sent directly to customers who, in turn, at Johnston’s direction, provided the checks to her as a representative of the business.
Johnston previously admitted to the court that she deposited some of the checks into her bank account. In other instances, stolen checks were provided to family members to be deposited into their bank accounts, and later, at her direction, these family members provided her with most of the funds.
According to information presented to the court, the scheme continued for two years, resulting in a loss to the auto body business of more than $220,000.
At sentencing on Thursday, U.S. District Court Judge William E. Smith sentenced Johnston to 24 months in federal prison to be followed by 2 years of federal supervised release. Johnston was ordered to pay restitution totaling $220,083 to the owners of the auto body business that she defrauded.
The case was prosecuted by Assistant U.S. Attorneys Lee H. Vilker and Terrence P. Donnelly.
The matter was investigated by the FBI, with the assistance of the Cranston Police Department