Dive Brief:

• The former finance chief for the Pacific States Marine Fisheries Commission Pamela Kahut was sentenced to an eight-month term in federal prison, and three years of supervised release, after pleading guilty to stealing money from the fisheries’ health benefit trust fund, according to a Sept. 3 press release from the U.S. Attorney's Office for the District of Oregon.
• In a period between October 2014 and September 2020, Kahut stole approximately $211,083 from the commission’s health benefit fund trust account — which was partially funded by federal grant money, the U.S. Attorney’s Office said. Kahut utilized the stolen funds to pay off her credit card debt, pension loans, and premiums for her spouse’s long-term care, according to the Sept. 3 release. She was charged with theft in connection with health care and pled guilty on June 6, according to a press release at the time.
• The former CFO was also ordered to pay $211,083 in restitution to the PSMFC, and to pay a $10,000 fine.  

Dive Insight:

Founded in 1947, the PSMFC is an interstate agency made up of six member states, focused on the conservation and management of fishery resources in the Pacific Ocean, according to its website. Its member states include Alaska, California, Hawaii, Idaho, Washington, and Oregon — where Kahut was based.

In her capacity as PSMFC’s CFO between 2014 and 2020, Kahut controlled the Commission’s health care benefit trust set up to pay benefits and fees for its employees under its self-funded health plan, according to a sentencing memorandum filed Aug. 22 with the U.S. District Court for the District of Oregon.

With that access, Kahut committed several instances of theft, including “knowingly and willfully” stealing approximately $2,812 on or about Sept. 21, 2020 — writing a check in that amount from the trust to pay for the annual premium for her spouse’s participation in the commission’s long-term care insurance program, according to the sentencing memorandum.

In a bid to conceal the theft, Kahut first wrote a check for the $2,812 amount from her personal bank account and logged the personal check in the PSFMC’s incoming check register, before taking the check and others to deposit it into the Commission’s main operating account. Prior to depositing the checks, however, Kahut “swapped the Personal Check with the Fraudulent Check so that the Fraudulent Check was cashed instead of the Personal Check,” according to the memorandum.

In a “sophisticated” scheme, Kahut employed the same tactic to pay off pension loans as well as personal credit card debt. The PSFMC allowed its employees to request a pension loan if the amount was under $50,000, and a payment schedule and promissory note would be provided to the commission’s CFO for approval. Employees could pay off their loans early — which Kahut did by utilizing the same fraudulent check scheme via funds drawn from its health care benefit trust, according to court documents.

She also utilized funds stolen from the trust to pay off more than $80,000 in credit card bills — including more than $15,445 to pay off a Discover card on April 11, 2017 and about $26,646 to pay off a Citicard on April 13 of that year.  

Of the more than $211,000 stolen between October 2014 and September 2020, approximately $17,788 was utilized to pay for Kahut’s spouse’s long-term care annual premiums; about $112,475 was used to pay off her pension loans; and about $80,819 was used to pay off the ex-CFO’s credit card bills, the memorandum states.

The U.S. Attorney’s Office declined to comment beyond the press release and sentencing memorandum. Suman Malempati, assistant federal public defender and attorney for Kahut, did not immediately respond to requests for comment.