By Neale Gulley
BUFFALO, NY (Reuters) - A former foreclosure counselor who gambled away more than $300,000 she stole from her upstate New York clients was sentenced on Thursday to six years in federal prison.
Lori Macakanja pleaded guilty in October to felony mail fraud and theft of government money after being confronted by managers at her employer, HomeFront Inc. in Buffalo, New York.
"It appeared to be cold and calculated fraud against the poor victims who have suffered greatly as a result of what she did," U.S. District Court Judge Richard Arcara said at the sentencing.
Prosecutors said Macakanja, who suffers from bipolar disorder and other mental illnesses, visited casinos and gambled away her clients' money.
"It was nothing I thought I would ever be capable of doing." a tearful Macakanja said in court. "I really never thought that this would snowball into such a mess."
HomeFront, which is connected with the U.S. Department of Housing and Urban Development and works with homeowners to refinance mortgages or avoid foreclosure, did not become aware of the thefts until almost a year and a half after they started.
As a result, the company's insurance policy does not cover the losses to more than 130 victims.
Assistant U.S. Attorney Trini Ross said Macakanja bullied clients "at the highest moment of their need" into handing over large sums of cash or money orders for more than a year ending in October 2010.
Several victims said in court that Macakanja demanded their money, telling them it was necessary to avoid foreclosure, before depositing the funds into her private account.
Arcara also ordered Macakanja to repay the stolen funds.
"If it takes me more than three jobs, I will pay you back, every single penny," Macakanja said in court, where about a dozen victims were present.
Victim Pamela Hudson said Macakanja demanded she come up with $2,600 in two days to make a payment to a bank that held her mortgage. When Hudson said it would be difficult to come up with the money, she said Macakanja suggested she sell her mother's engagement ring.
"She told me where to go to sell it," Hudson said.
Another victim said she sought Macakanja's help for a loan modification but now may lose her home, as she had been told by Macakanja not to contact her lender or other banking officials.
"She told the victims things were fine, not to contact their mortgage holders to cover up what she was doing," the prosecutor said.
"She bullied them. She destroyed everything that we need in this life to get ahead," she said.
(Editing By Ellen Wulfhorst and Greg McCune)