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Former Non-Profit Director Sentenced for embezzling $250,000 in government benefits

The United States Attorney for the District of Minnesota announced yesterday that Sue Linehan, a former Program Director of Rainbow, R.P. Inc., a non-profit agency that assisted vulnerable people in paying their bills and taxes, was sentenced to 45 months in prison for embezzling approximately $250,000 in government benefits from her clients.

According to court documents, as director of Rainbow R.P. Inc., Linehan was entrusted by the Social Security Administration (SSA) and the Veterans Administration (VA) to manage money for those who could not do this for themselves. Linehan was suppose to pay clients’s bills on time and provide the rest to them for spending money. As part of her duties as a fiduciary for the SSA and the VA, Linehan was allowed to keep an administrative fee, approximately $30 per beneficiary per month, for her services. However, from January of 2001, and continuing until December of 2003, Linehan stole SSA benefits and VA benefits belonging to clients for her personal benefit. She used the money to pay for vacations and help her family start a restaurant. In what the government contended was an attempt to conceal her embezzlement, Linehan moved government benefits she received into and out of 12 different bank accounts. When clients complained, she would over-pay that person in an attempt to keep them quiet.

Linehan’s clients, which included those who had suffered from strokes, those who were in nursing homes, and those who suffered from mental or chemical health issues, were severely impacted by her theft of government benefits. Some clients had prescriptions stopped, some had their telephone and cable services disconnected, at least one lost their home due to foreclosure, and another had their vehicle repossessed.

See the full release here.


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