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Madison (Press Release) - On Wednesday, Deborah Atherton, 55, of Black River Falls, was sentenced by Chief U.S. District Judge William M. Conley to four years and two months in federal prison for her role in a loan fraud scheme and a separate bribery scheme involving contracts awarded by the Ho-Chunk Nation.
Atherton pleaded guilty on July 9, 2012, to conspiring to submit a loan application, and she stipulated to facts constituting the bribery offense.
Regarding the loan fraud conspiracy, the prosecution presented evidence that Atherton, with assistance from Timothy Whiteagle, obtained over $900,000 in loans by submitting false W-2s. One victim suffered a $500,000 loss when Atherton defaulted on the loans.
Regarding the bribery scheme, the prosecution submitted evidence that during the period from 2006 to 2008, Atherton and co-defendant Timothy Whiteagle acted as consultants for a company that received from the Ho-Chunk Nation's legislature a $250,000 contract to provide mortgages and housing for tribal members. The company then paid $57,000 to Atherton, who split the money with Whiteagle. Atherton and Whiteagle solicited the company to contribute toward a Pontiac Firebird to compensate a Ho-Chunk legislator, Clarence Pettibone, for helping the company do business with the Ho-Chunk Nation.
Co-defendants Whiteagle and Pettibone were separately convicted.
Pettibone pleaded guilty to a bribery offense based on his receipt of the Firebird, along with money and other valuables, and was sentenced to five years in federal prison on July 11,2012.
Whiteagle was convicted of bribery charges, tax offenses and obstruction following a jury trial in federal court in Madison. He is scheduled to be sentenced on October 24, 2012.
In a related case, Brian Johnson was sentenced to four months in prison for lying to federal agents during the course of the investigation.
Atherton asked the court for a sentence of probation. The prosecution asked the court to impose a substantial prison sentence, arguing that Atherton's loan fraud had caused a $500,000 loss and had ruined the victim's life. The prosecution also argued that Atherton was directly involved in Whiteagle's scheme to bribe Pettibone.
In sentencing Atherton to 50 months in federal prison, Judge Conley said that the sentence was based on the serious nature of Atherton's crimes. The Court expressed concern about the tragic effect of Atherton's loan fraud on the victim's life and noted the need to deter others who may be considering such crimes. The Court also stated that the members of the Ho-Chunk Nation deserve to have confidence in the integrity of their legislators.
United States Attorney Vaudreuil stated, "This office and the U.S. Department of Justice are committed to the vigorous investigation and prosecution of corruption in tribal governments."
The charges against Atherton, Whiteagle, Pettibone, and Johnson resulted from a joint investigation conducted by the Federal Bureau of Investigation and IRS Criminal Investigation, with assistance from the Ho-Chunk Nation; Wisconsin Department of Administration, Division of Gaming; and U.S. Department of Interior, Bureau of Indian Affairs, Office of Inspector General.
The prosecutions have been handled by Assistant U.S. Attorneys Stephen P. Sinnott and Laura Przybylinski Finn.
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