Feds take Isenberg case

COEUR d’ALENE — Lori Isenberg’s embezzlement case is no longer in Kootenai County’s hands.

Prosecutor Barry McHugh confirmed Thursday that the case has been taken over by the U.S. Attorney’s Office in Coeur d’Alene.

“That’s because it involved federally insured funds,” McHugh told The Press. “That would be the more appropriate route to go.”

Isenberg, who was director of North Idaho Housing Coalition for almost a decade, is being held in Kootenai County Jail on a $500,000 bond after skipping town on a lower bond amount this summer. She turned herself in to local authorities on July 25 and has remained in jail since then.

In a separate matter, the Kootenai County Sheriff’s Office is investigating the suspicious disappearance and death of Isenberg’s 68-year-old husband, Larry, in February — an incident that Lori Isenberg reported on the same day The Press published a front-page story disclosing that Isenberg was no longer employed by the housing coalition and that an audit was being done. The Larry Isenberg investigation is ongoing and no charges have been filed.

The federal indictment against Lori Isenberg charges her with three counts of felony wire fraud and one count of federal program theft of grant funds from the U.S. Department of Housing and Urban Development.

The wire fraud indictments allege that between 2015 and 2018 Isenberg “devised a scheme and artifice to defraud the (North Idaho Housing) Coalition, the Idaho Housing and Finance Association, and the HUD … by means of materially false and fraudulent pretenses.” Specifically, Isenberg allegedly submitted false invoices for payments, directly depositing funds for her own and others’ benefit.

Isenberg “obtained and controlled at least $579,000 in unrecovered property,” the indictment says. The U.S. attorney “will seek forfeiture of substitute assets, ‘or any other property of the defendant.’”

According to the criminal information, wire fraud is punishable by up to 20 years in prison and $250,000 in fines. Federal program theft is punishable by up to 10 years imprisonment and $250,000 in fines.