The Dayton Daily News first reported this story in September 2011, following an investigation of the Niehauses and their relationship to the Clines. Our reporters examined numerous records and interviewed various people, including Dorothy Maud Cline at her attorney’s office.
A former Union Savings Bank manager, accused of pilfering at least $675,000 from an elderly couple who were her clients, is under federal investigation for embezzlement concerning the accounts of at least three senior women, two of them with Alzheimer’s disease, the Dayton Daily News has learned.
There is probable cause to believe that Diane Elizabeth Niehaus, possibly with the help of her husband Paul, defrauded elderly customers of Union Savings Bank, as well as the bank itself, between 2008 and 2011, IRS Agent Laurel Vant wrote in an affidavit for a search warrant. Niehaus laundered the money through the purchase of a Beavercreek home and various cars and failed to report the income on her tax returns, Vant wrote.
Agents with the Internal Revenue Service searched 3492 Riva Court in Beavercreek, then the Niehauses’ home, on May 21. Court records show that the agents seized a computer, bank information, and various records. On April 27, agents with the FBI and IRS served the Niehauses with grand jury subpoenas for handwriting samples.
Craig Casserly, spokesman for the IRS, said Wednesday he could not comment on an active case.
The Niehauses were defendants in a lawsuit filed last year by Dorothy Maud Cline, which claimed they took at least $657,000 of her life savings. That lawsuit was dismissed July 25 after the two sides reached a settlement.
That lawsuit led to an investigation by the Dayton Daily News. Cline, who now lives in an Alzheimer’s care facility, told the Dayton Daily News she never intended to give six-figure gifts to the Niehauses, as they claimed.
Cline attorney Craig Matthews said Wednesday that he could not comment on the the settlement agreement, because all parties had to sign confidentiality agreements. Records show that the deed to the Riva Court house, which the Niehauses bought using $410,000 of Cline’s money, was transferred to Union Savings Bank on May 24.
Niehaus attorney Arthur Hollencamp could not be reached for comment Wednesday.
Cline and her husband Jesse, who died in March 2011 at age 86, were clients of the bank’s Centerville branch, where Niehaus was a manager. Niehaus befriended the Clines, and when they would come into the bank, she would take them aside, “offer them coffee, cookies and donuts, and privately discuss family and other personal matters with them,” according to the lawsuit.
Eventually, the Niehauses became regular visitors to the 720-square-foot Beavercreek home they built by hand on Van Oss Drive. Paul Neihaus would take Jesse Cline for his dialysis treatments, Hollencamp stated in court documents. In August 2010, the Clines gave Diane Niehaus power of attorney and money began getting transferred away from their accounts, according to documents filed by Matthews.
The affidavit filed by Vant reveals more details about the Cline case, as well as facts surrounding two other potential victims. It also shows that both Neihauses were fired by another bank and that a questionable loan was made in the name of Diane Niehaus’ father.
It states that the Neihauses both worked at Fifth Third Bank in Pckering, Ohio, when Diane “caused her husband to be rewarded for loans that he had not referred,” and both were fired on Jan. 6, 2004 for “self-dealing and embezzlement.”
In 2006, Fifth Third Bank received a call from James Hemwall, Diane Niehaus’ father, who was asking about a $32,000 automobile loan in his name for 2003 BMW 850 sedan. Hemwell told bank officials that he had never applied for this loan nor owned the car. Payments were being made by Diane Niehaus, but the laon went into default, according to the affidavit.
Hemwall told federal investigators that he paid $12,000 on that loan and that he helped the Niehauses when they were losing their home to foreclosure in 2006.
Late that year, Diane Niehaus started working at Union Savings Bank, but was using her middle name Elizabeth, in her official capacity as regional manager, the affidavit states.
The affidavit shows the details of the Clines’ situation, referring to them by initials. It states that the powers of attorney documents signed on Aug. 25, 2010 were notarized by bank employee Venus Jackson, who told federal agents that Jesse Cline “was not present during each of the times that she notarized documents for him,” the affidavit states.
Between February 2009 and November 2010, Paul Niehaus purchased five vehicles: two Ford Mustangs, two Pontiac GTOs and one Chevrolet Trailblazer, spending $96,000. All of those vehicles were still titled to him when the search warrant was filed and none had liens on them.
Diane Niehaus resigned from the bank on Sept. 22, three days before the Dayton Daily News published the details of the investigation and lawsuit.
The affidavit shows that there are two other possible victims in the case, both identified by their initials. G.C. is described as a woman who was placed in an Alzheimer’s care facility in September 2010. Her niece contacted bank officials after reading the Dayton Daily News story because Diane Niehaus had befriended G.C., the affidavit states.
In a December 2011 meeting at the bank, the niece told bank officials that signatures on withdrawals from her aunt’s account did not appear to be legitimate. In March, the niece provided bank officials with a summary detailing nearly $83,850 missing from two of her aunt’s accounts. The bank agreed to pay back the money but requested she sign a confidentiality agreement, the affidavit states.
The other victim, M.V., is a 90-year-old woman who handles her own finances. In March, she received notice that one of her certificates of deposit had come to term, but the “the balance appeared to be $49,000 less than she expected.” She went to Union Savings’ Centerville branch, and staff showed her a series of withdrawals, the largest for $4,700.
“M.V. was distraught about the withdrawals because she knew that she would never withdraw funds from a certificate of deposit and incur a penalty,” the affidavit states.
The affidavit does not reveal whether M.V. was acquainted with Diane Niehaus.
MV and her attorney were able to document at least $40,000 in unauthorized withdrawals, including a $34,000 withdrawal made in January 2011 by “ENiehaus,” the affidavit states. The bank agreed to replace the funds and did not require them to sign non-disclosure statements, the affidavit states.