Thursday, March 29, 2007

Psych report describes life out of control

Monica Blair Yates pleaded guilty to fraud Wednesday, and behind the plea is a story of misfortunes and missteps.

The Roanoke Times
By Mike Gangloff

She's been in the news as the maltreater of dogs and cats, and the swindler who bilked investment clients out of more than $1 million.

But Monica Blair Yates describes herself in terms easier to understand: as a mother desperate to help her daughter.

It's a side of the saga that received scant mention during the string of court appearances that began last year for the 40-year-old Daleville woman.

Nor was it evident in Roanoke federal court Wednesday. Head down, removing her glasses to wipe tears and jingling leg irons as she shuffled to the witness stand, Yates only murmured "Yes, sir" to settle fraud charges with an agreement that might bring her 40 years in prison and hundreds of thousands of dollars in fines.

Yates' side of the story is in a psychological evaluation conducted last month to determine if she was fit to stand trial. In it, she described growing up amid her parents' divorce and remarriages.

Married in 1989, she had a daughter in 1998 who was born with a condition that resulted in undersized, deformed hands and feet. Regardless, "my daughter was my world," Yates said.

But her husband "turned and ran out of the operating room and didn't come back for two days," Yates told the psychologist. "When we brought our daughter home, he moved into the basement and never came back upstairs." They divorced in 2005, she said.

Her daughter had a dozen operations before she was 6 to allow her to walk and hold objects, the court report said.

Most of the medical bills fell solely on her, Yates said. A legal secretary when her daughter was born, she'd become a junior investment adviser for SunTrust. But "I knew I couldn't afford the surgeries," Yates said.

She took a job as an investment adviser at CUNA Mutual Life Insurance Co. in Roanoke, and her grandfather helped with bills. But in 2004 he died, and a shell game began.

Yates tried to persuade clients to switch money away from CUNA annuities, saying she could invest it and earn higher returns. Instead, she spent it.

Yates rationalized it as a sort of loan -- she'd use the money, but invest enough to give her victims an 8 percent return, better than the 5 percent they'd had.

According to the plea agreement approved Wednesday, she prepared false financial statements to reassure clients about their supposed investments. Some people asked for their money back, and she'd pay with funds taken from new victims.

"Essentially she was running a Ponzi scheme," Assistant U.S. Attorney Patrick Hogeboom said.

But it wasn't working, and Yates' schemes turned wilder.

Her daughter "was still needing more surgery," Yates told the psychologist. "It didn't work, the medical bills were more than I thought, the money didn't go as far as I thought it would, the partner I thought was going to help me with the business didn't come through, the investments weren't doing well ... wasn't even getting back my 5 percent, let alone 8 percent."

She bought five houses and furniture for each, thinking she'd flip them.

"It was just crazy, out of control, absolutely out of control," Yates said.

She decided to become a veterinarian and open a kennel and dog-breeding operation.

Pressure mounted and in February 2006, "I went to my doctor and she wrote me a pile of prescriptions and I was basically a zombie for eight, nine months," Yates said.

"When I look back at that time frame and what I did, it's like watching somebody else, a completely different person."

Last year, Botetourt County authorities found more than two dozen sick or dead dogs and cats at her home. Yates pleaded guilty to three animal cruelty charges, to not properly caring for an animal and to contempt of court. She received 10 days in jail and a suspended prison sentence and was ordered to pay $2,519.

Then federal investigators brought fraud charges.

One of her investment victims, Roanoke County retiree John Snyder, watched from the courtroom benches Wednesday. Snyder said he'd blown the whistle on Yates.

"I wanted to trust her because she was the sister of a friend," Snyder said. But as the statements about the $106,000 his wife had invested began to look strange, Snyder decided to call CUNA.

As an investigation took shape, Yates jumped to Merrill Lynch, Pierce, Fenner & Smith Inc. Snyder called there, too.

Federal prosecutors said 18 CUNA customers and four Merrill Lynch customers lost about $1.3 million to Yates. Some repayment may be part of her sentencing, which is scheduled for June 18.

Snyder said his wife's money already is recovered.

Yates told the psychologist she never imagined being in court. "I thought I was smart enough to stay one step ahead of it," she said.

But on Wednesday, when Judge Samuel Wilson asked for her plea on one count of wire fraud and one count of money laundering, Yates' response was barely audible:


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