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Lecanto woman admits guilt in medical fraud

She'll testify against two others who prosecutors say scammed investors with promises of a cancer-curing machine.

By JIM ROSS
Published May 31, 2005

A Lecanto woman linked to a million-dollar medical scheme has agreed to testify against two codefendants and is allowing the federal government to seize her house, car and $847 in cash, court records showed.

A multicount federal indictment accuses the three of defrauding investors by claiming that one of them had invented a cancer-curing machine that a European manufacturing company was set to purchase, and a heart machine capable of stimulating regeneration of heart tissue damaged by heart attack.

Deborah A. Barnes, 53, has pleaded guilty to one count of conspiracy to commit wire fraud. A federal judge has not yet imposed sentence.

As part of a plea agreement with federal prosecutors, Barnes has agreed to cooperate as the government builds cases against codefendants Pamela Staake and Kevin Kripps, the records showed. That cooperation includes testifying against them at their trials, which are expected to begin later this year.

Barnes also agreed not to object as the government seizes her 1998 Ford Expedition, her home at 3325 W Southern St. in Lecanto and the cash. Under federal law, the government is allowed to seize assets that are derived from proceeds of unlawful activity. The seizure proceedings are under way now.

The government said the scheme lasted from August 1999 to June 2004. Barnes has admitted maintaining bank accounts, making false statements, and listing Staake's phone in her name so that investors wouldn't know Staake lived in Inverness, not London.

The government says Staake, 52, told investors that 90 cancer patients had been treated by her machine, and that all had achieved full or near remission, according to a case summary included in a written explanation of Barnes' plea agreement.

Staake said she was calling from a London laboratory but using a U.S. "switchbox," and thus the investors' telephones might indicate the call was coming from the United States.

Staake told investors she needed money to complete her research; she promised profits of 30 percent to 100 percent, the summary showed, and instructed investors to wire money to various bank accounts in Barnes' name.

Between September 1999 and August 2002, about $1.3-million was deposited into an account that Barnes helped maintain. Another $1-million was deposited in two other accounts between August 2002 and June 2004. The government said Barnes and Staake used the money for themselves.

In 2003, an undercover federal agent posing as an investor wired money to a bank account and sent money to a post office box in Lecanto, according to the summary. Barnes told the undercover agent that she had successfully invested in the project, and that Staake had produced excellent results with her electrotherapy research.

Law officers arrested Barnes and Staake in June 2004. Kripps' name didn't surface until later; he also is accused of making false statements to investors about Staake's alleged research work.

Barnes' plea agreement does not specify what punishment she will receive; it simply states what is expected of her and what recommendations prosecutors will make to the judge. The maximum penalty is five years in prison, a $250,000 fine and three years of "supervised release."

The government agreed to drop all other charges against Barnes and to recommend that the judge give her a sentencing break because of her cooperation.

Staake ran into trouble with the court earlier this year, records showed.

While awaiting trial, she was supposed to stay in this area; instead, she moved to Gonzales, La., where she lived in a mobile home near her niece and used the alias Mary Snow, the records showed. She was arrested in Louisiana in January, but the records don't say on what charge. Prosecutors successfully moved to have her bail revoked.

Kripps, 47, has indicated to prosecutors that he intends to call witnesses who will testify that he told them about the cancer research project and that he thought the cancer-curing machine existed, a court record showed. Prosecutors have asked the judge to disallow such testimony because it would be inadmissible hearsay. According to the government, Kripps admitted his role in the scheme, but also said he lied to investors because he believed in the cancer research project and loved Staake.

[Last modified May 31, 2005, 00:44:11]