Alabama Woman Sentenced To 87 Months For Fraudulent Lawsuit Scheme

by Joel Hendon⁽¹⁷⁰⁾ Red Star

U.S. District Judge C. Lynwood Smith, Jr., in Birmingham federal court, sentenced Katherine Hope Lane, 27, to seven years and three months in prison according to a press release of April 22, 2011. Lane pleaded guilty to charges in August, 2010.

She was charged with fraudulently collecting $425,000 for expenses of a lawsuit which never existed. Specifically, the charges were for wire fraud, aggravated identity theft and conspiracy to launder money. Her participation in the scheme was a conspiracy involving also, her father Paul Haskell Lane, Jr., and Michael Pahl, a Jackson, Michigan resident.

In January 22, 2009, ASC investigators assisted the Jefferson County Sheriff’s office with the execution of an arrest warrant issued against Katherine Lane. She was taken into custody, transported to the Shelby County jail and later released after posting a $10,000 bond. Paul Lane turned himself in to Shelby County officials on January 23, 2009, was arrested and subsequently released from custody after posting an $80,000 bond. The Lanes are scheduled to be arraigned at a later date. On February 6, 2009, Michael Pahl was arrested by Jackson, Michigan authorities for his involvement in the Lane scheme. Pahl refused to waive extradition during his Michigan arraignment and was released from jail on a $2,500 surety bond. The ASC will pursue extradition against Pahl in order to expedite legal proceedings in Alabama. (Archived report ASC.gov February 18, 2009)

Judge Smith ordered Katherine Lane to pay restitution in the amount of $368,575 to the victims who thought they were helping her pay the expenses of a personal-injury lawsuit. He also ordered her to forfeit $406,500 to the government as proceeds of the fraud.

“This was an outrageous and prolonged scheme that preyed on family friends and associates in another state who were duped into believing they were helping Ms. Lane pursue a lawsuit filed as the result of her suffering a brutal assault while at work,” U.S. Attorney Joyce White Vance said. “Ms. Lane was never assaulted and there was never a lawsuit. Thanks to thorough investigation, Ms. Lane’s deception was revealed and she is being held to account for her crimes.” (FBI press release April 22, 2011)

According to court records, Lane conducted the fraud with her father, Paul H. Lane Jr., of Pelham, from 2004 through at least November 2008. Paul Lane was indicted in October 2009 on mail fraud, wire fraud, and money laundering charges. His trial was scheduled for March, but has been postponed. No new trial date has been set.

Article submitted Saturday, April 23, 2011 & read 56 times.

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» left by Anonymous (111 days 4 hours ago.)

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