Crime & Safety

A Losing Case? She Allegedly Stole From Nuns

Nuns who wanted to retire in San Diego gave an Orange County woman nearly $285,000 to buy a home. She didn't.

By City News Service

An Orange County woman could go to prison—or maybe someplace a lot worse—if she is convicted by federal prosecutors of stealing from nuns.

The Tustin businesswoman persuaded a group of nuns to give her $285,000 so she could bid on a retirement home in San Diego for them, but instead of acquiring the property she spent the money on herself, a federal prosecutors told jurors Tuesday.

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Linda Rose Gagnon, 59, has been indicted on three counts of wire fraud stemming from an alleged scheme to defraud the U.S. Province of the Religious of Jesus and Mary Inc., a congregation of Roman Catholic nuns.

At the time of the alleged scheme, Gagnon was the president and chief executive of Tustin-based Rose Enterprise Inc., said Assistant U.S. Attorney Rob Keenan. She billed her company as one that helps clients handle distressed properties and other real estate deals, but she has never been licensed as a real estate agent or broker, Keenan said.

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"This case is about a scheme to defraud a group of Roman Catholic nuns out of more than $250,000," Keenan said.

Gagnon executed the scheme through her company and even doctored letterhead by using an attorney's name unwittingly, Keenan alleged.

When the nuns grew suspicious of the real estate acquisition, Gagnon stalled them with lies and by "withholding key facts," Keenan said.

While Gagnon was visiting friends in Rhode Island she heard about a group of four nuns, who were faced eviction from a home at 1318 Pequena St. a few miles from the border with Mexico, Keenan said.

The nuns, who had been living there for about a year, were told the property owner hadn't been paying the mortgage and the home was about to fall into foreclosure, Keenan said.

The nuns wanted to acquire the home for themselves and to provide a retirement destination for other sisters, Keenan said.

Gagnon said she could help them acquire the property and was an expert in short sales, Keenan said. She also claimed to have $1 million in her corporate account so she could front the nuns the money for the acquisition, Keenan said.

Before a Dec. 8, 2008, auction, Gagnon told the nuns she would need them to send her $285,000, despite her claim of having $1 million available, Keenan said.

When the nuns called on Dec. 8 to see how the auction went, Gagnon told them it was postponed, Keenan said. Gagnon added she could hold on to the money for when the auction comes up again, Keenan alleged.

"Immediately upon its receipt, Ms. Gagnon went on a spending spree with the retirement money of the (nuns)," Keenan said.

On Dec. 18, the nuns requested their money back "to be on the safe side," but Gagnon, "of course couldn't do it because almost $100,000 had been already spent," Keenan alleged.

"She blew through all of (the nuns') money -- by Feb. 5 it was all gone," Keenan said.

Gagnon collected about $76,000 in cash at the bank, Keenan said.

About $42,900 was used to pay back loans, Keenan said.

Some of it was spent on pet services and a trip to San Francisco, "where she had a good time in January" of 2009, Keenan said.

She paid off credit card bills and back-due wages of employees, Keenan said.

In the meantime, the home the nuns wanted to buy was sold for about $212,000, Keenan said.

When the nuns received another eviction notice they called Gagnon, who explained that it was nothing to worry about and that she would acquire the house from the winning bidder, Keenan said.

In the spring of 2009, Gagnon told the nuns that the money they sent her initially was "tied up in triple or double escrow," so she would need the sisters to send her another $280,000 so she could acquire the Pequena Street home, Keenan said.

When the nuns declined, an "undaunted" Gagnon approached a colleague to lend her the money to buy the property for the nuns, Keenan said.

"He wisely decided to pass," Keenan said.

The nuns instead turned to a lawyer and escrow officer, who acquired the property for $255,000, Keenan said.

When Gagnon "continued to stall, lie and conceal the true facts of what happened to the money," the nuns turned to the FBI, Keenan said.

Gagnon's attorney, Michael Khouri, deferred his opening statement to jurors when prosecutors finish with their case.   


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