7/18/2014
$4-million settlement reached in political embezzlement case
A California bank has agreed to pay $4 million to settle lawsuits arising from the embezzlement of political funds by prominent Democratic campaign treasurer Kinde Durkee, attorneys said Thursday.
First California Bank agreed to pay the politicians who said the bank abetted Durkee's fraud, said Wylie Aitken, the attorney representing Reps. Loretta Sanchez (D-Garden Grove), Linda T. Sanchez (D-Lakewood) and Susan A. Davis (D-San Diego), as well as state Sen. Lou Correa (D-Santa Ana).
"This the last chapter of this sad story of Kinde Durkee and her fall from grace," Aitken said.
Durkee pleaded guilty to fraud in March 2012; she is currently serving an eight-year prison sentence.
The settlement, which was reached Tuesday, covers the suit brought by Aitken's clients as well as previous complaints by Sen. Dianne Feinstein and others. In all, plaintiffs said they lost about $8 million in campaign funds. Funds from the $4-million settlement will be returned to the politicians' campaign committees.
Aitken said First California Bank should have alerted the account holders to the "red flags" of Durkee's actions, which included frequently shifting money between accounts and drawing checks on insufficient funds.
"There was enough clear improper conduct that the bank should’ve notified the depositors about very unusual and probably illegal activity," Aitken said. "Had they done so, they would’ve stopped the whole process much sooner."
Thomas Nolan, an attorney for the bank, rejected the claim that the bank aided Durkee's theft.
"The activities were solely done by Ms. Durkee," Nolan said. "Had plaintiffs exercised even reasonable care, they would've been able to determine for themselves their losses."
Nolan said the bank is not accepting responsibility for the lost money, but decided to settle to avoid a costly court battle.
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