Woman commits welfare fraud while behind bars

Karen Iuele was serving a sentence in community corrections in Rifle when she committed welfare fraud through Eagle County. She was also convicted of fraud and theft in Pitkin and LaPlata counties.
Special to the Daily |

EAGLE — Karen Iuele admitted she committed welfare fraud in Eagle County while she was in custody in Garfield County for forgery and theft.

Iuele decided she didn’t need preliminary hearing Tuesday.

Instead, she pleaded guilty Wednesday morning and faces between six and 12 years behind bars, where she already resides for stealing money from an Aspen insurance agency, and two other convictions in La Plata County.

In fact, on the day Iuele (pronounced You-Lee) pleaded guilty in the Pitkin County case, she renewed her application for food stamps and Medicaid through Eagle County’s human services department.

Along with prison, District Court Judge Paul Dunkelman ordered Iuele to pay $31,128.35 in restitution, the amount of welfare payments she fraudulently received, according to court records.

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“We’re trying to be true to our fiduciary responsibility to our taxpayers, and bring that money back into the community where it can go to those eligible for benefits and services,” said Rita Woods, director of fiscal and operations for Eagle County’s Department of Human Services.

Welfare inmate

When Iuele was incarcerated in Rifle and applying for food stamps and Medicaid, she used her address in the Eagle County corner of the Roaring Fork Valley.

Iuele got caught when someone alerted authorities, Woods said.

Eagle County’s Human Services Department’s fraud unit received a tip that Iuele had income that she had not reported, and launched an investigation Nov. 9. The money trail led them to Iuele’s three years of welfare fraud between Oct. 1, 2012 and Oct. 1, 2015, Woods said,

According to court documents, among other things, on those Feb. 10, 2014, welfare renewal application forms Iuele claimed:

• She was not married. She was actually married, and court documents show that her husband’s income alone would have disqualified them from welfare benefits.

• Her daughter was living with her. She was not.

• She failed to list that she was a felony probation violator.

Trail of trouble started 2008

It was 2008 when Iuele first landed in a courtroom on felony charges, a La Plata County fraud and theft case. She stole up to $30,000 and received probation and a deferred prison sentence. That means if she stayed out of trouble, she’d avoid prison.

She didn’t.

In 2010, she was convicted of identity theft in La Plata County, and she was sentenced to three more years of probation.

She migrated to Pitkin County where, in 2012, she pleaded guilty in Pitkin County District Court to forgery and theft from Michael Sailor Insurance in Aspen, where she was working as an administrator.

Iuele admitted she asked for and received more than $6,000 in cash and cashier’s checks from a Michael Sailor client between June 14 and Sept. 10, 2012. The money never made it to the insurance company, court records state.

For that, she was sentenced to five years in Garfield County’s community corrections in Rifle, an alternative-sentencing program for non-violent offenders. Those five years were to be served concurrently as her four-year sentence in the two La Plata County cases.

Iuele’s history soon repeated itself.

While she was in community corrections in Garfield County, she was arrested and pleaded guilty to stealing as much as $5,000 from an Office Depot.

This got Iuele kicked out of community corrections and into the state prison system.

Along with her LaPlata and Pitkin county charges, in Eagle County she pleaded guilty to three felonies: theft, forgery and criminal impersonation.

She’s scheduled to be sentenced for the Eagle County welfare fraud at 1 p.m. on June 22 in Dunkelman’s court.

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