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California campaign treasurer expected to plea in fraud case

By Greg Lucas

SACRAMENTO (Reuters) - A Democratic campaign treasurer accused of draining over $7 million from the coffers of her clients, including U.S. Senator Dianne Feinstein, was expected to enter a plea to fraud-related charges on Friday as part of possible deal with prosecutors.

Kinde Durkee, who is charged with five counts of mail fraud, is scheduled to appear in U.S. District Court in Sacramento to enter her plea.

Prosecutors said in court documents that Durkee used money that belonged to her political campaign clients to pay such expenses as the mortgage on her Long Beach condominium, visits to Disneyland, charges on her credit cards, medical bills and her own firm's business costs.

Aside from Feinstein, a Democratic senator from California, Durkee is accused of defrauding the campaigns of Representative Loretta Sanchez and her sister Representative Linda Sanchez as well as a number of other office holders, candidates and political groups.

Durkee was arrested in September and charged with one count of mail fraud on accusations that she had removed over $677,000 from the political account of California Assemblyman Jose Solorio, a Democrat.

On Tuesday, prosecutors brought an additional four charges of mail fraud against Durkee over accusations that she defrauded other politicians. Other elected officials, including Feinstein, had long been public in accusing Durkee of draining their campaign coffers going into the 2012 election.

The Los Angeles Times has reported that Durkee would plead guilty to mail fraud charges, citing people close to the case. An attorney for Durkee did not return phone calls.

A statement from the office of U.S. Attorney Benjamin Wagner said Durkee's scheme resulted in the loss of over $7 million from her clients. It also said she was expected to enter a plea on Friday, but gave no details on the terms of any deal.

"In finalizing a long sentence term, I'm hoping the FBI and courts send a message to treasurers, accountants and bookkeepers around the country that defrauding their clients is a serious matter," state Assemblyman Jose Solorio said in a statement.

The hearing on Friday had originally been scheduled as a preliminary hearing, and not an opportunity for Durkee to enter a possible plea to the charges.

Feinstein's campaign sued Durkee in a related case in October 2011 for fraud and breach of contract in a lawsuit that also accused First California Bank of aiding Durkee.

(Writing by Alex Dobuzinskis; Editing by Cynthia Johnston)

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