A federal judge today sentenced a Pelham man to three years and one
month in prison for laundering money in a scheme with his daughter that
collected more than $400,000 for expenses of a lawsuit that never
existed, announced U.S. Attorney Joyce White Vance, Alabama Securities
Commission Director Joseph P. Borg, IRS-Criminal Investigation Special
Agent in Charge Veronica Hyman-Pillot, and FBI Special Agent in Charge
Richard D. Schwein, Jr.
U.S. District Judge C. Lynwood Smith Jr. sentenced PAUL Haskell Lane,
Jr., 69, to prison and ordered him to pay $343,900 in restitution to 20
victims of the scam he perpetrated with his daughter, Katherine Hope
Lane, 28. The judge also ordered Paul Lane to forfeit $10,500 to the
government as proceeds of illegal activity. Paul Lane pleaded guilty to
the money laundering charge in August.
“The crime in this case was plotted and executed over more than three
years’ time. As part of that scheme, Lane peddled a false story about a
lawsuit for which his family ostensibly needed money,” the government
said in its sentencing memorandum to the court. “After Lane seeded the
ground, Katherine fertilized and watered it with myriad lies and stories
designed to engender additional sympathy and obtain more money from
Lane’s friends and associates. At critical times, Lane spoke to key
money sources [i.e., victims] to ensure that the funds continued to flow
to him and Katherine.”
Lane’s sentencing caps a six-year investigation and prosecution
effort by federal and state authorities. In late 2009, Lane and his
daughter were separately indicted for wire fraud, mail fraud, and money
laundering for their roles in a plan to get people in other states to
wire money to Lane’s bank account. Those who sent money were led to
believe it would go toward costs for a personal-injury lawsuit filed by
the Lane family after Katherine Lane suffered a brutal assault at work.
The Lanes represented that proceeds from the lawsuit would be used to
repay people who donated. Most who provided money also believed that
they would get back from the Lanes more money than they sent. Katherine
Lane, however, had not been assaulte,d and the Lanes had no lawsuit.
Over the course of several years, Lane took the money that was wired into his account and gave it to his daughter.
Katherine Lane pleaded guilty in 2010 to wire fraud, aggravated
identity theft, and money laundering. She was sentenced in 2011 to seven
years and three months in federal prison. Katherine Lane also pleaded
guilty to felony state securities fraud charges related to her actions.
Her sentence of seven years and three months on the state charges was
ordered to run concurrently with the federal sentence.
The Internal Revenue Service, the FBI, and the Alabama Securities
Commission investigated the case. Assistant U.S. Attorney Melissa K.
Atwood prosecuted the case.
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