The Joplin Globe, Joplin, MO

Crime & Courts

June 19, 2012

Joplin woman accused of offering phony documents in fraud probe

— Among the evidence a federal prosecutor plans to present at the sentencing hearing of Joplin businesswoman Peggy Newton is a document that purports to be a granting of the power of attorney to Newton by her former partner but actually is a forgery, according to the government.

A sentencing memorandum filed by Assistant U.S. Attorney Steven Mohlenreich in federal court in Springfield alleges that Newton not only forged a power of attorney while her fraud case was under investigation in 2009 but also “spoofed” an email, supposedly sent to her by business partner Diane Pine, in an apparent attempt to blame Pine for the financial failings of their home-decor store, Evergreen & Amber.

The alleged phony documents are part of an argument the memorandum lays out for the prosecutor’s recommendation that Newton, 39, be required to serve 63 months in prison followed by three years of supervised release for a conviction on a single count of wire fraud.

The U.S. attorney’s office also is asking U.S. District Judge Richard Dorr to order that Newton pay $282,149.95 in restitution, with $276,560.26 of that figure owed to Pine and $5,589.69 to Advanta Bank Corp.

Newton’s sentencing hearing was postponed for a second time Monday, and no new date has been set.

Newton was indicted in February of last year on 21 counts of wire fraud and four counts of uttering forged or counterfeit securities. The charging documents alleged that she defrauded Pine while their store was operating for about three years at 424 S. Main St. by fraudulently writing checks on the store’s bank accounts, and by using Pine’s credit cards and the credit cards of the business to make purchases and obtain cash for her own use.

The store closed in 2009, and Pine, 65, first took her complaint to Joplin police in April of that year. Pine maintains that she lost her house, her savings and her credit because of Newton’s actions. Newton filed for bankruptcy in federal court before being indicted.

A pre-sentence investigation by the U.S. Probation Office recommends a sentencing range for Newton of 46 to 57 months. The prosecutor says she should serve more time than that because of the obstructive nature of her alleged conduct during the investigation of the case.

According to court filings, Newton and her attorney, John LeWright, believe she should serve no more than four to 10 months. They still dispute assertions that she signed Pine’s name on checks without her knowledge or permission, altered carbon copies of checks written on the store’s bank accounts or opened any credit card accounts in Pine’s name without her authority.

The prosecutor’s sentencing memorandum states that the government plans to present nine exhibits as evidence at the hearing, including records of eight alleged attempts to obtain credit cards in Pine’s name. Seven of those applications were made over the Internet, and one was handwritten, the memorandum states. Four were successful in obtaining cards.

The allegedly forged power of attorney was provided to the victim in May 2009 by Norman Rouse, a Jasper County assistant prosecutor who was acting as Newton’s private attorney at the time. The memorandum states that forensic analysis indicates that the signature on the document “may have been written in an attempt to simulate a genuine signature of Diane Pine” and that Pine maintains that it is a forgery.

Another exhibit the government plans to present consists of posts on Facebook by the defendant as well as email messages and other correspondence. The document calls special attention to a Facebook posting Newton purportedly wrote after pleading guilty in October: “This was a tough decision, trial or plea and I truly feel at ease with my decision. Scared but at ease. The trial is with 12 jurors and if the jury found me guilty on one count, I could serve 48 months, but as always there is that possibility that the jury could find me not guilty but I can’t take that chance.”

She went on to say that if she pleaded guilty to the single count, she would get a sentencing hearing before the judge and a chance to prove that the bulk of the accusations against her were “ridiculous.”

She further wrote: “The plea gives me a better chance to not serve any time since I have two children and one of them has special needs. I absolutely have battled my mind with this, but my children are the most important and I have to take the ‘safe route.’”

The email to her from Pine that Newton allegedly “spoofed” was provided to Pine’s attorney by Rouse, according to the memorandum. In “an apparent attempt to blame Ms. Pine,” the email contains the statement: “Kids have no idea what I have done and they will never forgive me. I can’t lose them too, please let’s come together and sort this out,” according to the prosecutor’s document.

Secret Service agent

THE U.S. ATTORNEY’S OFFICE plans to call a Secret Service agent to introduce various records and testify against Peggy Newton at her sentencing hearing.

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