Stevens: I didn’t know alter ego was stealing
January 21, 2011 by Tom Witosky
Phyllis Stevens says she first learned she embezzled nearly $6 million from her employer on the day Aviva USA officials confronted her about it, court records say.
That claim is contained in a psychiatric report filed this week as defense lawyers asked U.S. District Judge Ronald Longstaff for leniency when he sentences Stevens and her spouse, Marla, today on charges related to embezzlement.
“I didn’t know about the computer fraud at all until I talked with Aviva,” Stevens told Dr. David Drake, a Des Moines psychiatrist, during six hours of interviews. “They told me I had been stealing money and ‘we know you did it.’ As the core person, I didn’t know that.”
Stevens faces a maximum prison term of 48 years and fines totaling $1.75 million after pleading guilty to six counts of wire fraud, computer fraud, aggravated identity theft, conspiracy to commit money laundering, money laundering concealment and filing false tax returns.
She says she has dissociative identity disorder, commonly known as multiple personalities – and hundreds of them.
Stevens told the psychiatrist that she first learned of the embezzlement during a meeting with Aviva officials.
“I figured it must be pretty close to the truth from what the Aviva folks were telling me from the reactions I was getting from the personalities.”
Stevens’ remarks to the psychiatrist, as disclosed in court records, represent the first time the 59-year-old former compensation specialist has provided her version of the embezzlement.
Lawyers for both Phyllis Stevens and Marla Stevens say their leniency pleas are rooted in the fact that both women were abused in their childhood and have mental disorders that contributed to the commitment of their crimes.
Meanwhile, Andrew Kahl, the federal prosecutor, has asked Longstaff in a filing to impose substantial prison time. He contended that both women knew precisely what they were doing as they spent large amounts of money on themselves, on hotel bills, on political contributions and on real estate purchases.
Court records show the couple charged nearly $2.8 million to their American Express cards, paid the U.S. Internal Revenue Service $950,000 and purchased two residential properties in Des Moines’ Sherman Hill district, which have been forfeited.
Campaign finance records also show the couple contributed more than $175,000 to state and federal candidates over the 2006 and 2008 election cycles. Most of the contributions went to Democratic candidates and organizations such as Moveon.org, but a few female Republican candidates in Iowa also received money.
“It is a tale of long-standing criminal conduct by both defendants, which showed no signs of letting up until the fraud was discovered,” Kahl wrote in a sentencing memorandum. “The thefts were of ever-increasing amounts and most of the money was used for the defendants’ personal benefit and aspirations.”
But defense lawyers disagree and contend neither is a threat to re-offend.
“Phyllis has no criminal history and, interestingly enough, her first 30 years as an employee for Aviva were unblemished,” William Kutmus, Phyllis’ lawyer, wrote in asking for leniency. “Clearly, Phyllis poses no threat to re-offending.”
Sentencing guidelines call for a prison term of six to seven years, court records state.
Documents filed by Kutmus included Drake’s diagnosis that Phyllis Stevens developed dissociative identity disorder as a result of severe sexual and emotional abuse “to the point of torture” by her adoptive parents throughout her childhood.
“These extreme circumstances were certainly fundamental and central to her illegal actions while employed with Aviva,” Drake concluded. “She lives with an internal world where different parts of her take over different functions and act in ways she is not even aware of.”
Drake’s report also includes Phyllis Stevens’ version of what prompted her to flee Des Moines in 2009 when she was confronted by Aviva officials. Stevens flew to Indianapolis, where she unsuccessfully attempted to withdraw hundreds of thousands of dollars from a bank account, and to Las Vegas to be with her spouse, who was staying at the Bellagio.
Stevens told Drake that as she talked with Aviva officials, one of her personalities, Robin, “was totally freaking out.”
Stevens explained to the psychiatrist: “Robin and some of the other personalities took money out of the bank. When I became aware again as the core personality, I was sitting in a Walmart with about $30,000 in my purse.”
Trevor Hook, Marla Stevens’ lawyer, requested leniency for his client, who is a direct descendant of Thomas Jefferson. Hook said Marla Stevens has a panic disorder, coupled with a fear of being in public places.
“Based on her lifestyle, Marla admits she willfully blinded herself to the fact that she should have known her spending was not justified by the income generated by Phyllis Stevens,” Hook wrote to the judge. “But Marla had no direct knowledge of the fraud and embezzlement perpetrated by Phyllis Stevens.”
Hook also asked that his client be placed on supervised release or given a short jail sentence because of medical problems she is now experiencing, including treatment for thyroid cancer, which required thyroid removal and radiation treatments last summer.
Kahl, the federal prosecutor, urged Longstaff to discount claims of mental disorder and focus on how the women embezzled and spent millions of dollars over five years.
Kahl said Phyllis Stevens “both maintained employment with Aviva and engaged in a calculated scheme to steal nearly $6 million – doing so without detection for many years.”
Of Marla Stevens’ conduct, Kahl said her explanations of mental disorders don’t mitigate her participation in the criminal activity.
“Her crime not only involved the expenditure of millions of dollars on personal items, but also involved the purchase of real estate in Des Moines,” Kahl wrote. “Marla Stevens cannot persuasively claim to have had only minimal knowledge of the ongoing criminal conduct from which she substantially benefited.”
