Isenberg daughters must pay back thousands

The key on Traci Tesch’s necklace serves as a reminder.

Its intention is to admonish the 35-year-old mother of three that, from here out, she controls her future, and her actions will determine how she is viewed by the community whose trust she betrayed.

U.S. District Judge Edward Lodge on Wednesday ordered Tesch to wear the key-shaped pendant around her neck as a condition of her probation.

Tesch and her sister, April Barnes, both sentenced Wednesday for one count of federal program theft, were the two remaining daughters of Lori Isenberg to be sentenced in Coeur d’Alene’s federal court for stealing from the North Idaho Housing Coalition.

As the director of the housing coalition, Isenberg enrolled four of her daughters into what attorneys called a sophisticated and devious scheme to defraud a Coeur d’Alene nonprofit organization.

Isenberg was sentenced Tuesday to five years in prison for her role in embezzling more than $579,496 over three years from the coalition, whose purpose was to help low and moderate income families rent or buy homes.

Tesch was the front person for two phony companies that Isenberg paid for services that were not provided.

Instead Tesch was paid, she said Wednesday, “for work I didn’t do.”

Lodge sentenced Tesch to three years probation, 100 hours of community service, and ordered her to enroll in mental health and financial counseling.

The key she must wear on a necklace, Lodge said, may be construed to be a corny gesture, but its purpose is genuine.

“Every morning when you get up and see yourself in the mirror you’ll be reminded that you hold the key to your future,” Lodge said.

Tesch will also have to reimburse the coalition the $15,400 she stole, and pay a $100 special assessment.

Lodge ordered the same sentence for Barnes, except that Barnes will pay back $11,600 and must serve one month home detention, which will allow her to work at her two jobs. Lodge ordered the additional penalty because Barnes, 43, had a criminal history that includes petit theft convictions and drug abuse.

Barnes lived in one of the homes owned by the housing coalition. When she couldn’t pay rent, her mother paid it illegally with federal dollars or donations. When Barnes was evicted, she took the washer and dryer that belonged to the coalition, and the coalition had to refurbish the house to the tune of $10,000, U.S. prosecuting attorney Traci Whelan said, because the home’s condition was “deplorable.”

The state in which she left the property was indicative, Whelan said.

“That resonates,” she said.

Yet the federal prosecutor asked the court for a more lenient sentence because Barnes had, since being charged, taken on two jobs to pay back the restitution amount and she had enrolled in financial management and substance abuse classes.

In addition, Whelan said, both daughters will be strapped with felonies, which is a penalty on its own.

“It’s an incredible punishment,” Barnes’ attorney Colin Prince said. “She will serve that sentence the rest of her life.”

Two other daughters of Lori Isenberg, Amber Annette Hosking, 39, and Jessica Fay Barnes, 36, were sentenced earlier this year for helping their mother carry out the financial crimes. The women were sentenced to three years probation and 100 hours of community service and they must repay a combined $32,000.

Wednesday’s sentencings put to rest a case that began almost a year and a half ago when board members of the North Idaho Housing Coalition accused Isenberg of stealing more than a half million dollars.

Isenberg is still under investigation for murder in the death of her husband, Larry Isenberg, who died under suspicious circumstances while boating with Lori the day the story of her theft appeared in The Press.