Court rejects embezzler’s appeal

Local woman had pleaded guilty to embezzling more than $1 million.

A federal appellate court denied the appeal of a former Centerville bank manager who pleaded guilty to embezzling more than $1 million that came from elderly and vulnerable customers.

Diane Elizabeth Niehaus, 41, challenged both her sentence of five years and the restitution amount of nearly a half-million dollars. But the Sixth Circuit Court of Appeals affirmed the decision of U.S. District Court Judge Timothy Black.

Niehaus was convicted in May 2014 of embezzlement, money laundering and filing a false tax return in Dayton’s U.S. District Court after a years-long scheme of what prosecutors said was taking advantage of customers who were dying, sick and suffering from cognitive conditions like dementia.

Niehaus’ attorneys argued that her prison sentence — which she’s serving at Alderson (W.Va.) Federal Prison Camp with a release date of Dec. 5, 2018 — was “substantively unreasonable” and that the restitution order was “improper” because Union Savings Bank was an unindicted co-conspirator and not a victim entitled to restitution.

The May 1 decision was written by U.S. Circuit Court Judge Helene White, and the case also was heard by Circuit Court Judge Raymond Kethledge and District Court Judge Thomas Ludington.

Niehaus argued the sentence was too harsh because she has no prior criminal history, has a college degree, pleaded guilty, accepted responsibility and was the sole source of income for her husband and children.

The appellate court disagreed and cited some of Black’s comments during sentencing in which he said Niehaus was as “skillful and sophisticated a manipulator as this judge has seen in 20 years” and that her bank job put her in “perfect position to rape and pillage (the victims’) savings.”

Niehaus admitted to embezzling $1.1 million in funds from six bank customers from at least 2007 to 2010. The total amount stolen from Dorothy Cline and the late Jesse Cline was nearly $1 million, but the restitution was lowered by more than a half-million dollars because of a civil settlement.

Niehaus convinced Dorothy Cline, who was suffering from dementia, to draw up a new will and to turn against her own children. Prosecutors said Niehaus used the money to buy a $460,000 home and five cars.

The Clines’ plight was first reported after a civil lawsuit was filed against Niehaus and her husband, Paul, whom Black called “an unindicted co-conspirator.”

As for assertions that Union Savings Bank was a co-conspirator, White wrote, “The record does does not support Niehaus’ version of the facts.”

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