BALTIMORE, JUNE 15 -- The Maryland businesswoman known as "Robin HUD" kept most of the millions of dollars she stole from the government instead of giving it to charity as she claimed, federal prosecutors said today in arguing for an unusually stiff sentence.
Marilyn L. Harrell, who embezzled at least $5.7 million, spent all but $1.1 million on herself, her relatives and her businesses, prosecutors said.
Harrell used the money, skimmed from housing foreclosure sales for the Department of Housing and Urban Development from 1985 to 1988, for such things as starting a car repair shop for her son, buying cars, houses and motorcycles, and paying American Express bills, prosecutors said.
The first detailed government accounting of the money was contained in a memorandum filed in federal court in support of prosecutors' recommendation that Harrell be given a prison sentence of 46 months.
Harrell, 47, pleaded guilty in January to embezzlement and filing a false income tax return. She is scheduled to be sentenced June 22.
"There is no question that Mrs. Harrell devoted substantial efforts and funds to charity," the memo said. "While her estimates of charitable giving are exaggerated, she did spend over $1 million of the stolen money on charitable works. The key word, however, is 'stolen.' "
Federal guidelines call for Harrell to receive a sentence of 30 to 37 months, but prosecutors said the "prolonged and repetitive" nature of her thefts and the disruption they caused to government justify a heavier penalty.
Harrell's attorney, Assistant Federal Public Defender Anthony Gallagher, would not comment on the prosecutors' memorandum, except to dispute their allegation that she did little to help the poor. He said he will file a memo of his own early next week. Harrell, who has lived recently in Waldorf with her son John, could not be reached for comment.
"While it may be less distressing to know that over $1 million of lost government funds were used to help the needy and not to buy yachts and mansions," wrote First Assistant U.S. Attorney Gary P. Jordan, "the stark fact remains that, without any authority, Mrs. Harrell arrogated to herself the power to divert government funds to suit her own purposes."
Harrell displayed a "misplaced conviction that she knows better than anyone how government funds should be allocated," Jordan said.
Harrell, whose chatty manner and free acknowledgement of the thefts captured national attention during congressional hearings last summer, became a symbol of lax management at HUD during the Reagan administration.
As a closing agent on contracts with HUD, Harrell said she was supposed to complete settlements on government foreclosure sales and send the money to HUD. She quickly found that no one was checking her paperwork.
She said she started sending some but not all of the money from each settlement.
She acknowledged embezzling $5.7 million, but prosecutors said in today's memorandum that auditors documented $6.6 million she failed to remit on sales of 99 properties from November 1985 through December 1988.
Prosecutors said that, among other things, she diverted $819,056 to her personal accounts, $513,946 to real estate partnerships, $69,626 to help start her son's repair shop, $20,758 toward purchase of one of her houses, $183,895 to the Internal Revenue Service and more than $170,000 to assorted relatives.
The prosecutors' memo said money intended for HUD was used to pay rent, advertising, salaries, taxes, insurance, equipment, supplies and utilities at Harrell's businesses. Of the $6.6 million total in HUD foreclosure funds, the memo said, $1.1 million went to charities.