Fraud to learn her fate Friday

Karen Kiehl bilked scores by promising grants. She pleaded guilty in April.

Published May 29, 2007

VALRICO - They are school bus drivers, insurance analysts, migrant farmhands and Cracker Barrel restaurant workers.

They dreamed of fixing storm-damaged homes, opening a day care center, writing a romance novel or just getting out of debt. They ended up as fraud victims.

More than 120 people left their hopes - and money - in the hands of Karen Kiehl, who said she had contacts in government and knew how to get grants.

Kiehl (pronounced KEEL) ate dinner at their homes, went to movies and church with them. She held weekly Bible studies at her home.

But none of the grants ever came through, and authorities who seized Kiehl's computers found no evidence that she had applied for any.

Kiehl, 50, who faces up to 30 years in prison for fraud, pleaded guilty in April and will be sentenced Friday.

Investigators say that over about two years, Kiehl collected at least $150, 000 from people in five counties, including Pinellas and Pasco but mostly in Hillsborough and Hardee.

A divorced mother of three, she was tasteful and businesslike, a smiling, friendly woman who gave compliments freely and had a talent for empathizing with clients.

"She just asked them: 'What do you need money for?' " said Florida Department of Law Enforcement Detective Cal Cundiff, who spent hundreds of hours on the case. "And whatever their needs were, she said she could come up with the money for it in the form of a grant."

Victims saw Kiehl as a well-connected, behind-the-scenes grant fixer. Many of them admit they had only a vague understanding of how government grants work or whom they benefit - usually nonprofit groups, not individuals.

Invoking God

Kiehl's pitches frequently included references to religion.

"She came across as such a godly woman, " said Linda Anderson, 59, one of four Valrico Cracker Barrel employees who signed up for grants.

When she met Kiehl at the restaurant in June 2005, Anderson was living in a mobile home with a teenage grandson. Her husband, Daniel, was dying of cancer. She worked part time and shopped on credit cards.

Kiehl promised to get a $300, 000 grant for a house and motorized scooter. Daniel Anderson hoped to take Linda and hospice workers on a "last cruise" to the Virgin Islands.

That same month, Kiehl met with several Hillsborough school bus drivers on their lunch break. Kiehl invited the drivers to talk about their financial struggles and soon had the room in tears.

"She is just so real, " said driver Cynthia Fulwood, 46, of Ruskin.

"She hits on those things people have struggled with, and relates what she struggles with. And she makes you feel like she's one of you."

At least three women paid Kiehl an advance fee for grants they thought would subsidize the writing of a romance novel or work on an invention.

Kiehl was soon sitting at a kitchen table with Sandi Katvala, 64, who coordinates school bus routes, and two of her daughters. Between the opening and closing prayers, the three women wrote checks to Kiehl totaling $9, 000.

The money represented 1 percent of the grants Kiehl promised. The checks would come in 60 to 90 days, she said.

Before meeting with Kiehl, the family checked out her criminal background. It was clean. They told two other sisters, who kicked in $18, 000 more. One wanted to open a hunting lodge in Georgia. Another wanted to start a day care center.

Daniel Hartzog, 33, a Ruskin lawyer, wanted to expand his practice. Kiehl's knowledge and statistics she cited from federal databases impressed him.

"She's got some type of charisma that makes her believable, " Hartzog said. Despite reservations, he wrote her a check for $5, 000.

Excuses, but no grants

None of the checks came.

Kiehl had myriad excuses. Local storms and California mud slides had crashed computers. Hurricane Katrina had slowed down mail.

"Then she would pretend her cell phone was going dead, " said bus driver Mary Sims of Tampa. "I remember telling my husband, 'Something is not quite right with this.' "

Daniel Anderson, 79, held on to his dream of a final cruise. Four months after Linda Anderson signed on with Kiehl, she remembers him saying, "It's not going to come through, is it?"

In October 2005, the night before he died, Linda called the Hillsborough Sheriff's Office.

Investigators found no evidence on Kiehl's two computers that she had ever applied for a grant. Nor could they determine what she did with the money.

"We gave her every opportunity, " Cundiff said. "We said, 'Give us the name of the foundation so we can double check.' But there was no foundation."

Still, some people stood by Kiehl as the FDLE closed in. Never had Cundiff seen such unwavering faith in fraud victims.

"A lot of people flat out refused to believe me, " he said, "even after we explained, 'This is what we have.' "

Religion to the end

After her computers were seized, Kiehl called the Katvala family to her rented Valrico home. The sisters thought Kiehl was going to talk about the money. Instead, she called an impromptu Bible study.

Along with God, Kiehl was now talking about the devil.

"She said there was going to be a huge breakthrough, " said one of the sisters, Melissa Bedford, 45, "because the devil was really working on her right now and causing all kinds of havoc."

By then, Kiehl didn't want to talk about the transaction that had brought them together.

"When you asked her about the grants, " said Robin Amundsen, 42, another sister, "it was almost like she got offended that you were still worried about the grants when she was in all this trouble with the government."

Gary Foster, 41, a Cracker Barrel waiter, got suspicious when he saw Kiehl's two-car garage with almost no boxes or stored items. Three weeks after giving her $1, 200 for a grant to repair his mother's roof, he demanded a refund and got it.

Assistant Hillsborough County Public Defender John Skye declined to comment about Kiehl's case before the sentencing. Before changing her plea to guilty earlier this year, Kiehl commented briefly and could not be reached since then.

"I'm tired of the lies, " she said, and promised to present "a big case."

Andrew Meacham can be reached at ameacham@sptimes.com or (813) 661-2431.