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MADISON, Wisc. – Two former employees of a Native American addiction and counseling center were sentenced Friday in Wisconsin federal court for embezzling more than 67% of funds intended for the program over a 10-year span.

Fredericka DeCoteau, 63, of Cloquet, Minn., was sentenced to 2 years in prison, and Edith Schmuck, 77, of Rice Lake, Wisc. received 1 year and 1 day in prison. The judge also ordered the defendants to jointly pay restitution of $777,283. Both defendants were ordered to report to the Bureau of Prisons on Dec, 29 to begin their sentences.

They worked at Ain Dah Ing which has operated as a non-profit halfway house in Spooner, Wisc. since 1971. DeCoteau worked as the Executive Director at ADI from 2002 to 2017. Schmuck worked as the bookkeeper from 1990 to 2017.

ADI offered mental health and alcohol and substance abuse services to Native Americans from Michigan, Minnesota and Wisconsin tribes. ADI’s services included a 90-day program at its 15-bed Community-Based Residential Facility in Spooner, Wisc. ADI’s funding came from a federal commercial contract with the U.S. Department of Health and Human Services, Public Health Service, Indian Health Services Division.

Both DeCoteau and Schmuck pleaded guilty over the summer to embezzling from ADI by paying themselves unauthorized bonuses via payroll checks that were signed using a rubber signature stamp of the ADI Treasurer. The embezzlement lasted from 2007 to 2017.

During Friday’s sentencing, the judge noted that DeCoteau and Schmuck stole more than 67% of the total funds intended for programming at ADI, and that they gambled away most of this money at local Indian casinos. 

The charges against DeCoteau and Schmuck were the result of an investigation conducted by the U.S. Department of Health and Human Services, Office of Inspector General, and the Spooner Police Department.  Assistant U.S. Attorney Daniel Graber handled the prosecution.