Kolodner is sentenced to 27 months in prison 'Fraud factory' operator blames passion for riches on love-starved childhood


A federal judge sentenced a noted Maryland con artist to 27 months in prison yesterday, describing her as a woman of "unnatural material craving" who bilked a fortune to buy jewels, Rolls Royces and a $1.5 million condominium.

Deborah S. Kolodner, 42, admitted in U.S. District Court in

Baltimore that her fascination with wealth reached such an extreme that she once bought 20 pairs of shoes in a day and 50 dress suits in a month.

"Material things appeared to bring attention and acceptance in a fantasy world," Kolodner said in a written statement to Judge Benson E. Legg. "I feel the acts I committed were outrageous to say the least. However, you must know they were not willfully done."

Kolodner, who blames her obsession with riches on a personality disorder, was sentenced for a $3 million insurance fraud scheme run out of her now-defunct Baltimore physical therapy clinic, Industrial Medical.

Prosecutors called it "a fraud factory" that overcharged huge amounts to insurance companies who believed they were paying for accident victims' therapy.

The therapy, however, often wasn't performed. The business was an intricate scheme to make a quick fortune -- much like other Kolodner schemes, prosecutors said.

During the last five years, Kolodner has bought four Bentleys, two Mercedes-Benzes, a Jaguar and a Rolls Royce, according to the IRS, which investigated the Industrial Medical case along with the U.S. Postal Inspection Service and the FBI.

Flash and cash

"She is impressed by flash and wants the cash to get flashy things," Assistant U.S. Attorney Virginia B. Evans told the judge. "She's had the opportunity to make choices throughout her life. And she has repeatedly chosen to steal."

Kolodner, who lives in Northwest Baltimore, ran another fraudulent enterprise in New Jersey in the early 1990s. She and her husband, Fred Kolodner, had set up a bogus medical clinic, which led to Deborah Kolodner's conviction for practicing medicine without a license.

Her attorney, William B. Purpura, argued yesterday that Deborah Kolodner's crimes were caused by a disorder stemming from the dysfunctional environment in which she was raised.

Purpura called on the testimony of a psychiatrist and a psychologist, who both testified that Kolodner's mother was a chronic paranoid schizophrenic who caused Kolodner to grow up in a distorted world.

As a child, Deborah Kolodner "led a very strange and partially isolated life. She was completely stranded and emotionally overwhelmed," said the psychologist, Jerome Rubin.

Legg said he didn't believe that the sophisticated criminal scheme at Industrial Medical could have been devised by someone with a debilitating personality disorder.

"What she did took a great deal of sophistication and financial know-how," Legg said. "What she has seems to be more of an unnatural material craving than a personality disorder."

Shirley Manor link

Prosecutors said the latest luxury cars that Kolodner has bought a Bentley Mulsanne S and a Mercedes-Benz -- were partly paid for with funds from what they say is her latest business, an assisted-living center in Northwest Baltimore. The center, Shirley Manor, has been home to between four and nine elderly or disabled residents.

State licensing officials, who began an investigation of the home after prosecutors questioned Kolodner's role there, said this week that Shirley Manor's permit holder, Rufus Smith, has told them he will voluntarily turn in the permit.

Smith is a close friend of Kolodner's who used to work for her at Industrial Medical.

Kolodner, who will begin serving the prison sentence within a month, told the judge in a rambling 11-page, single-spaced typewritten letter that she regretted what she had done.

"My horrible conduct was brought about from the need to strive to gain affection and love I was starved for," she wrote, adding, "I now realize my acts were truly horrible."

Pub Date: 5/09/98

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