Billings resident Angela Corson Smith admitted Thursday in U.S. District Court that she defrauded a bank and investors of about $150,000.
Appearing before U.S. District Judge Susan Watters, Smith, 33, pleaded guilty to bank fraud and to wire fraud during a hearing that lasted more than an hour.
A plea agreement calls for six other counts to be dismissed at sentencing.
The agreement also calls for Smith to pay $150,800 restitution, in amounts ranging from $2,000 to $45,000, to all of the victims, including those in counts to be dismissed.
Watters set sentencing for May 8 and continued Smith’s release. The bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine. Restitution is mandatory.
The hearing was the second time Smith has pleaded guilty in the case, which has a taken a few twists.
In a separate investigation, Smith is suspected of impersonating a nurse at Billings Clinic in April. Billings police investigated, but no state charges have been filed. Yellowstone County Attorney Scott Twito has said he is waiting for the federal case to end before deciding whether to file charges against Smith.
At Thursday’s hearing, Watters, who took over the case shortly after being sworn into office in December, told the parties that in reviewing the file, she learned that her husband, Billings Police Detective Ernie Watters, investigated allegations that Smith impersonated another individual.
“I was not aware he was investigating Ms. Smith,” the judge said.
Watters gave Smith and her attorney, Assistant Federal Defender Steve Babcock, time to consider whether they wanted to proceed with her as the judge. After meeting privately for a few minutes, Babcock and Smith returned to the courtroom.
“We are completely fine with proceeding,” Babcock said.
Responding to the judge’s questions about her work history, Smith said she is working full time as a driver for Transportation Services.
She previously had worked for EBMS, helping people with prescription claims, and for St. Vincent Healthcare as an emergency room technician. Smith said she does not have a nursing degree.
Prosecutors said that in the bank fraud, Smith forged her then-husband’s name on loan documents to get a $27,300 home equity loan from Altana Federal Credit Union in October 2009.
In the wire fraud charge, prosecutors said, Smith got people to invest in a new business called Medical Billing Advocates of Montana. Smith used her residence as the mailing address for the business, which never had a client, the prosecutors said.
The scheme ran from September 2010 to January 2013.
Smith used payments from some investors to pay earlier investors, gave investors checks that bounced and told investors she was “gravely ill, that her daughter was gravely ill and that she was experiencing marital difficulties,” the plea agreement said.
Smith deposited investors’ money into a bank account she opened in the name of MBAM and used the money to pay for her personal expenses, all of which were “wholly unrelated to the purported business venture,” prosecutors said.
Babcock told the judge that some of the investors’ money went to pay earlier investors, while some of the money ended up in a joint account Smith had with her ex-husband and was spent on personal expenses.
Smith admitted lying to get money from investors.
Smith initially pleaded guilty in July to one count of bank fraud but the judge, Senior U.S. District Judge Sam Haddon, rejected the plea deal when she was to be sentenced in October and allowed Smith to withdraw her plea.
Some restitution issues had not been fully addressed in the first plea agreement, Babcock said.
The prosecutors and the defense then reached a second agreement in which Smith would admit to two felonies and restitution was pegged at $150,800.
Smith was set to plead guilty on Dec. 16, but Haddon continued the hearing at Babcock’s request for medical reasons.
Smith had signed her second plea agreement on Dec. 11, then unexpectedly had emergency surgery late that night, Babcock said.
Babcock told the judge Smith had undergone an emergency appendectomy and had an ovarian cyst drained on Dec. 11 and was taking prescription pain medication.
The medication, he said, made her unable to make voluntary and knowing guilty pleas.
Babcock assured the judge that Smith would go through with the plea change.
Haddon ordered Babcock to file a report detailing Smith’s medical treatment and when Smith would be ready to plead guilty. Babcock filed the report, which was sealed.
At Thursday’s hearing, Smith said she was seeing a counselor for treatment of post-traumatic stress disorder, was not under a doctor’s care and was not taking any prescription medication.