Embezzler accused of lying to judge during sentencing

Posted: November 07, 2012

On the day in February she was sentenced for embezzling $509,000 from a South Philadelphia bank, Katherine Harrell pleaded for mercy.

Harrell, a 31-year-old Delaware County resident, told U.S. District Judge Anita B. Brody that she was a single mother, with no one to care for her son or her brother, who was bedridden after a serious car accident.

If she were jailed, Harrell said, her son would end up in foster care and her brother in a nursing home. "What it comes down to is, I don't care about me," she said.

Brody gave Harrell a break: just a day in jail plus five years of supervised release.

Prosecutors now say Harrell made it up. Her brother wasn't hurt, they say, and her mother had agreed to care for her young son. On Tuesday, they unsealed an indictment accusing Harrell of obstruction for lying to the judge.

The case is unusual not just because of the allegation - a defendant caught in a bold lie to a sentencing judge - but because the judge learned about it and still decided to leave her sentence intact.

Six days after the hearing in February, the U.S. Attorney's Office notified Brody about Harrell's fabrications and asked her to vacate the punishment and sentence her again, records show.

The judge declined.

So prosecutors took the matter to a grand jury.

They "didn't get what they wanted, so now they're mad," was how Harrell's lawyer, Daine A. Grey, Jr., described the case after her arraignment Tuesday.

Grey said Harrell did make up the bit about her brother, but wasn't lying about caring for a sick relative. He said Harrell cares for her father.

The indictment against Harrell quoted her pleas to the judge and noted that Brody had promised to "take all those things into consideration" when fashioning a punishment.

Patty Hartman, spokeswoman for U.S. Attorney Zane David Memeger, said prosecutors were not pursuing the new charges because they had thought Harrell's sentence was too light.

"We were not disappointed in the sentence, given what the judge was told," Hartman said. "The point is that this defendant committed yet another crime - a fraud on the court - in order to reap benefits to which she was not entitled."

Led into court Tuesday in sweatpants and handcuffs, Harrell said little during her arraignment. U.S. Magistrate Judge Timothy Rice ordered her released on her own recognizance under $50,000 bail.

Assistant U.S. Attorney Karen L. Grigsby said Harrell faces from 15 to 21 months in prison under federal sentencing guidelines if she pleads guilty to the obstruction charge, and more if she goes to trial and is convicted.

Harrell pleaded guilty to embezzling $509,000 from individual accounts at United Bank, where she worked from 2000 to 2008. Three of her victims were customers over age 70, prosecutors said.

Brody did modify her sentence once this year. Last month, the judge ordered Harrell to serve 90 days of home confinement with electronic monitoring after probation officers reported that she failed to report for a drug test, skipped two mandated counseling sessions, and had not been making restitution payments.

Brody will not handle the obstruction case. It was assigned, randomly, to U.S. District Judge Eduardo Robreno.

Contact John P. Martin at 215-854-4774, at jmartin@phillynews.com or follow @JPMartinInky on Twitter.

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