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Ex-union boss won't serve time for embezzling

CHARLESTON, W.Va. -- A federal judge has allowed a former union boss to serve an out-of-prison sentence for embezzling thousands of dollars from the AFL-CIO Steelworkers Logan County chapter.

U.S. District Judge Thomas E. Johnston said Thursday that he did not believe former Logan AFL-CIO Local 14505 president Freda Hensley, 67, deserved prison time for cashing the organization's pre-signed blank checks in her own name and using the $38,539 to fuel a gambling addiction.

Instead, the judge ordered Hensley to spend five years on probation and repay the union nearly $36,500 -- in monthly installments of $100, a judgment that would take her more than 30 years to complete.

"Mrs. Hensley," Johnston said during Hensley's sentencing hearing, "stealing from your union is a serious offense, regardless of the reason."

He later added that he did not believe a prison sentence was necessary because of the amount of money stolen, Hensley's genuine remorse for the crime and her cooperation with federal authorities during her investigation.

Hensley was president of the AFL-CIO in Logan from April 2004 though June 2010, and had access to the union's checking account and authority to co-sign checks linked to that account, according to a federal plea agreement.

Hensley requested that others, whose signatures were required on the checks, pre-sign blank checks and give them to her, the plea states.

From August 2008 to May 2010, Hensley wrote and cashed 52 of the pre-signed blank checks and made them payable to herself. She made two payable to her mother, the plea states.

She pleaded guilty in October to embezzlement of union assets.

While heading the union, Hensley worked a second job in a nursing home. Between shifts, she played video poker at a bar across the street from her home, according to a sentencing memorandum authored by Hensley's lawyer, federal public defender Mary Lou Newberger.

"Unfortunately, Ms. Hensley became addicted to the machines," Newberger said in the memorandum, "and soon had a full blown gambling addiction, which ultimately resulted in her embezzling the union funds."

Hensley has since quit gambling and sought counseling, according to Newberger.

"I'm very sorry that I took that money," Hensley told the judge before he handed down the sentence. "I do not live my life that way. I wasn't raised that way."

Hensley said prison time would have forced her sister to quit her job to take care of their mother, who suffers from Alzheimer's. Hensley and her sister also share caregiver responsibilities for Hensley's disabled and widowed brother-in-law, who lives next door.

"I would appreciate if the courts would not make me serve time," Hensley, pausing several times to wipe tears from her eyes, told the judge.

Assistant U.S. Attorney Hunter Smith did not oppose a probation sentence because she showed "genuine remorse" to investigators when she admitted to the embezzlement scheme.

Johnston forbade Hensley from taking loans or opening a new line of credit. Newberger noted in her sentencing memorandum that Hensley was fired from her nursing home job when she was convicted. Hensley apparently has agreed to take care of her mother full time while her sister works, according to the memorandum.

Hensley's case was the second embezzlement sentence Johnston handed down this week. On Tuesday, the judge sentenced Yvetta Holstine, 56, to six months in federal prison for fraudulently extracting more than $115,000 from the credit cards belonging to a natural gas exploration company she worked for.

Reach Zac Taylor at Zachary.Taylor@wvgazette.com or 304-348-5189.


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