Fraud Friday – Attorney who Stole Funds for St. Jude’s Children’s Hospital Pleads Guilty to PPP Fraud

September 1, 2023

Delaney Sexton
Contributing Editor

Fraud Friday – Attorney who Stole Funds for St. Jude’s Children’s Hospital Pleads Guilty to PPP Fraud

A disbarred attorney’s PPP and EIDL fraud was discovered by prosecutors after she lied to the court about her employment status in a separate case. The subsequent investigation revealed that Darlene Baker lied to the SBA to obtain pandemic relief loans. In this week’s plea agreement, she admitted that she tried to obtain an $80,000 PPP loan. She claimed that she would use the PPP loan appropriately to meet payroll expenses for her business in the application, but she used the proceeds for her personal expenses.

Further, her EIDL applications stated that her business was shut down due to COVID. The truth was that she worked as a bookkeeper for an investment firm earning as much as $145,000 during the relevant period. The SBA did not approve or pay out any funds to Darlene Baker based on the EIDL application.

Her recent plea bargain also divulged that she lied on financial disclosure statements that the court required in her previous criminal case. Baker said that she was out of work in the statements, but she was making substantial income as a bookkeeper for the investment firm. Although she was earning income, she made no effort to repay the victim in her wire fraud case and claimed she had no resources to pay restitution.

Taking advantage of the SBA relief programs was not her first rodeo with committing fraud as she was previously sentenced to a year and a half for fraud. She practiced law handling wills, trusts, and probate of estates. In 2011, she prepared a will for a client who left his entire estate to St. Jude’s Children’s Hospital. As executor of his estate, when the client passed in 2014 she stole half a million dollars and invested it in Paraguay. Then, when the hospital inquired about the funds, Baker stole more money from a friend to repay the hospital. The friend was told that the money was being invested in Paraguay. The victim’s money was for her retirement after she sold her home. She sued Baker and won, but Baker had not paid her former friend any money that was awarded through the litigation at the time of the sentencing.

In sentencing documents from the earlier case, prosecutors described how Baker continued to falsify her finances. She did not list homes she owns in Cabo San Lucas and property on the coast of Mexico as assets that could be liquidated to pay her victims. The Judge ordered her to sell the waterfront property within 6 months to compensate her victims.

Even before this, she gave up her law license and bar membership. The Washington State Bar Association sanctioned her for stealing $42,000 from two other clients.

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