Police: Isenberg confessed to thefts

Police investigators in Coeur d’Alene say Lori Isenberg admitted to forging checks, opening companies to launder money, over-charging tenants, purchasing personal items using an unauthorized company credit card and opening accounts in her husband’s and daughters’ names.

Isenberg, the former director of the Coeur d’Alene-based nonprofit North Idaho Housing Coalition, was arrested Monday and charged with grand theft. The 64-year-old is accused of stealing at least a half-million dollars while employed by the NIHC.

“This matter is still under active investigation for potential additional criminal charges,” wrote Coeur d’Alene police Detective Steve Harris, in his report.

The North Idaho Housing Coalition buys foreclosed properties, hires companies to make needed renovations and sells the properties to low- to- moderate income buyers. NIHC has also purchased several properties it rents to low-income families.

The coalition receives federal grants to support its mission and has access to roughly $3.5 million in federal funding each year, wrote Harris.

Harris began looking into the case Feb. 21, after attending a multi-jurisdictional meeting with the Kootenai County Sheriff’s Office and FBI personnel.

At that time, the Sheriff’s Office was already searching for Isenberg’s husband, Larry.

Isenberg called 911 the morning of Feb. 13 — hours after The Press first reported she had been let go by the housing coalition and an internal financial audit was underway.

Isenberg told the dispatcher her 68-year-old husband had fallen from a boat into Lake Coeur d’Alene. A body believed to be Larry Isenberg’s was located Thursday afternoon in Sun-Up Bay near Worley.

In his report, Harris detailed his findings that led to Lori Isenberg’s arrest.

Isenberg, who ran NIHC’s day-to-day operations, was the North Idaho Housing Coalition’s only employee in 2009. Virginia Tate served as NIHC’s accountant.

“The NIHC operated from 2009 until approximately 2015 with no problem with reconciliation, according to Tate,” Harris wrote. “The budget was never more than a few dollars off at the end of every budget year. For example, the year of 2015 was only off by $78.”

Isenberg was responsible for taking in money from the grants to purchase homes.

“She would submit to the NIHC board requests for payments for contractors’ labor and materials,” Harris wrote.

Isenberg never had the authority to sign checks and all expenses required board approval.

Around 18 months ago, Isenberg suggested that she do the accounting “in-house” to save money, Harris said. The board agreed, with the caveat that Kevin Vedder, the board’s treasurer, would work more closely with Isenberg and be available to sign checks and approve spending. The accountant’s services would be reduced to monthly reviews.

Around that same time, Isenberg also suggested that as a cost-saving measure, she should serve as general contractor rather than the main contractor used in the past.

“By removing the general contractor and the accountant, Lori effectively removed all checks and balances giving her the freedom to run the NIHC independently,” Harris wrote.

Late last year, the board became aware Isenberg was resisting providing financial documentation to Tate, and it was subsequently discovered that Isenberg had been issuing NIHC checks by forging board members’ and Virginia Tate’s signatures.

The detective said he obtained copies of numerous forged checks from Tate.

The accountant informed Harris that Isenberg had opened several company credit cards without the board’s permission, including some credit cards in her husband’s name and her daughter, April’s.

“Tate estimated there was a total loss of $500,000 from NIHC,” Harris wrote.

NIHC currently owns 20 homes, Harris wrote, and an additional 18 rental homes. One residence, on Hattie Avenue, is rented to Isenberg’s daughter, April.

“Several months of rent payments have not been made,” Harris wrote. “Tate believes some homes were purchased with money Lori fraudulently used from NIHC.”

He said Tate showed investigators that one of the “ghost companies” was set up with Isenberg’s Bobcat Trail home as its address.

“Tate also pointed out a credit card transfer of $41,629.67 from NIHC to a Chase credit card account belonging to Larry Isenberg,” Harris wrote.

Harris obtained a search warrant, and on Feb. 23, with several other detectives, searched Isenberg’s home on Bobcat Trail in the Cougar Gulch area.

Harris wrote that after reading Isenberg her Miranda rights, he questioned her at her residence that day, with Isenberg’s sister, Jessica Devalt, by her side.

The detective said in his report that Isenberg told him she was suspended from employment from the housing coalition for “admitting what she was doing wrong.”

“I asked for examples,” Harris wrote.

He said her sister then interrupted and asked Isenberg if she was comfortable discussing this without her attorney present.

“Lori said, ‘I’m fine because I already put this in writing to the NIHC coalition,’” Harris wrote.

He noted that on Feb. 14, the day after Larry went missing and news of the coalition’s audit went public, Isenberg sent an email to members of the NIHC board.

“In this email Lori said she needs to be punished for what she did and said she would cooperate by telling the NIHC everything after Larry’s memorial service,” Harris wrote. “She also said she would pay restitution.”

He said Isenberg told him she set up dummy companies, one in her daughter April’s name. She told Harris April would bring the unopened company mail to her.

After Isenberg gained more financial control at NIHC, she hired an employee with the board’s approval to interview prospective tenants.

“However, NIHC was unaware it was Lori’s daughter, April Barnes,” Harris wrote.

Isenberg’s daughters, April E. Barnes and Traci M. Tesch, are listed as suspects on Harris’ report. During the Feb. 23 questioning, Isenberg told Harris she did not want her daughters to be implicated.

“Lori said her daughters had no knowledge of what she was doing,” Harris wrote.

She told Harris she set up the dummy companies to pay for her children’s medical expenses.

“She said she took the money but gave it to her children,” Harris wrote.

Although police charged Isenberg with 40 counts of forgery and one count of grand theft for allegedly embezzling a half million dollars, Magistrate Judge Timothy VanValin formally charged the defendant with just one count of felony grand theft and set her bond at $75,000.

She is no longer in custody at the Kootenai County Jail. A preliminary hearing is scheduled for March 9.