Isenberg says she's not guilty

Laurcene “Lori” Isenberg pleaded not guilty Wednesday in Coeur d’Alene federal court to four counts of stealing more than a half million dollars from a North Idaho nonprofit.

Isenberg, who is in federal custody, appeared Wednesday morning with her attorney, Jed Nixon, to answer to the counts. They include three federal wire fraud charges, which carry sentences of up to 20 years behind bars and a $250,000 fine, and one charge of theft from a federal program, which carries up to 10 years in prison and a $250,000 fine.

Seated beside her attorney, Isenberg, 64, wore a flowing top with a flower pattern and slacks. She answered clearly the questions of U.S. District Judge Ronald E. Bush, who oversaw the video hearing from Boise.

A motion filed by U.S. Attorney Bart Davis requests the court keep Isenberg locked up pending trial. Bush set a detention hearing Dec. 11 to address the matter.

Isenberg’s hearing came a day after her two daughters, Jessica F. Barnes, 36, and Amber A. Hosking, 39, each pleaded guilty to one count of conspiracy to commit a federal theft for taking money

Isenberg allegedly stole from a U.S. Housing and Urban Development program — administered through the Idaho Housing and Finance Association — earmarked for needy families. The charge carries a sentence of five years behind bars.

Isenberg is accused of stealing at least $579,000 in HUD grant money while working at the North Idaho Housing Coalition for almost a decade.

She transferred a portion of the cash between 2015 and February from a coalition bank account to her own phony business accounts, according to the indictment, and distributed some of the cash to family members.

“Isenberg devised a scheme and artifice to defraud the Coalition, IHFA and HUD and to obtain money and property by means of materially false and fraudulent pretenses,” according to the indictment.

Isenberg, who was originally charged in Coeur d’Alene’s First District Court earlier this year after a Coeur d’Alene Police Department investigation, skipped bail and was arrested in July.

Her case was taken over by federal prosecutors this month because the money she allegedly stole belonged to the federal government.

“It involved federally insured funds,” Kootenai County Prosecutor Barry McHugh said. “That would be the more appropriate route to go.”

Federal penalties are often greater than those outlined in state law.

The feds’ criminal forfeiture allegation requires Isenberg, if she’s convicted, to turn over any property derived from the stolen money.

A three-day trial date hasn’t been set.

Meanwhile, the Kootenai County Sheriff’s Office is investigating the disappearance and suspicious death of Isenberg’s husband, Larry Isenberg, earlier this year. Lori Isenberg claimed that her husband fell off the couple’s boat early in the morning in February and that he likely drowned in Lake Coeur d’Alene. However, in July, a coroner’s report showed that Larry Isenberg was killed by a massive overdose of an antihistamine that in small doses can cause drowsiness.