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Plaintiff in Iowa bias suit pleads guilty to theft

By Ryan J. Foley

Associated Press

Published: Wednesday, Dec. 28 2011 2:47 p.m. MST

Former Iowa Workforce Development employee Linda Pippen leaves the federal courthouse in Cedar Rapids, Iowa on Wednesday, Dec. 28, 2011 after pleading guilty to charges of embezzlement and identity theft. She later told reporters her high-profile claims of racial discrimination in Iowa hiring practices remained valid.

Ryan J. Foley, Associated Press

CEDAR RAPIDS, Iowa — A former state employee who is a lead plaintiff in a class-action lawsuit alleging that Iowa's hiring practices discriminate against blacks pleaded guilty to an embezzlement scheme Wednesday that will send her to prison. She continued to maintain, however, that she had been treated unfairly in her career.

Former Iowa Workforce Development adviser Linda Pippen, 41, of Fairfax, pleaded guilty in federal court in Cedar Rapids to embezzling federal funds and aggravated identity theft. When some unemployment recipients called her Cedar Rapids office to report that they had gotten jobs, Pippen did not cut off their benefits as required. Instead, she accessed their files in the agency's computer system to inaccurately show they remained eligible and altered bank accounts where money was deposited to ones she controlled.

Under a plea agreement released Wednesday, she acknowledged she abused a position of trust and stole $43,000 from the unemployment program in 2008 and 2009 that she used for her personal benefit.

Pippen, who had worked for the state since 1998, faces a minimum of 2 years in prison. Attorneys for both sides said she would face a recommended sentence of between 3 and 4½ years.

Pippen is one of the lead plaintiffs in a class-action lawsuit that covers up to 6,000 blacks who have been denied state jobs and promotions dating back to 2003. Their attorneys are seeking tens of millions of dollars in lost wages and policy changes in the case, which a judge is considering after sitting through a monthlong trial this fall. A ruling is expected as early as February or March.

Leaving the courthouse, Pippen said her crimes should not have an impact on those discrimination claims. Asked whether she apologized for the theft, she said, "The same apology the state needs to make to me for discriminating against me because of my color is the same apology I give."

Pippen claims she was unfairly passed over for promotions when she worked in IWD's Waterloo office in 1999 and in Cedar Rapids in 2001. The individual claims of Pippen and 28 other named plaintiffs will be heard at a separate trial, which has not been set.

But Magistrate Judge Jon Scoles, who accepted Pippen's guilty pleas, questioned why she was allowed to work for the state and was given access to financial information given her criminal history. Online court records show she pleaded guilty to third-degree theft in 2000 and felony identity theft in 2002 in cases in Waterloo, but avoided prison and kept her state job. The victims are listed as Sears and credit card companies, court records show.

"It's surprising to me that, with that kind of record, she would have been hired by the state and be put in a position where she would commit the acts that gave rise to these charges," Scoles said.

Iowa Workforce Development spokeswoman Kerry Koonce said Pippen was not required to report her convictions to the state after she was hired as an associate in 1998 or before she was later promoted as an adviser. She said state employees do not have to report criminal convictions that are not directly related to their jobs.

"There's no action that could have been taken against her under state policies," she said.

Koonce said Pippen's theft scheme was uncovered in May 2010 when internal auditors noticed an unusually large overpayment in benefits to one individual, and launched an investigation. She said four employees were put on leave during the probe after Pippen tried to implicate three others for the scheme. The others were exonerated and have returned to work while Pippen was fired in July 2010, Koonce said.

The effort to shift blame could mean a longer prison sentence. At Pippen's sentencing hearing, assistant U.S. Attorney Peter Deegan said he would push for an enhancement for obstruction of justice that could mean a recommended sentence of 54 months, or 4½ years, behind bars.

Koonce said IWD has changed its procedures for how information reported over the telephone by claims recipients is handled to close what she called a "spot in the system" that Pippen exploited.

"It's unfortunate when things like this happen, but it does show that internal measures for auditing work," she said. "It will be caught."

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