Daughters of Lori Isenberg, Idaho woman suspected in husband’s death, plead guilty to conspiracy

The daughters of a Coeur d’Alene woman, who is facing federal wire fraud charges and is the suspect in the death of her husband, pleaded guilty to charges related to their mother’s case Tuesday in federal court.

Jessica Fay Barnes, 36, and Amber Annette Hosking, 39, each pleaded to one count of conspiracy to commit a federal program theft. They are charged with taking money that was provided by their mother, who was supposed to be using that money to help poor families find affordable housing.

Barnes and Hosking are the daughters of Laurcene “Lori” Isenberg, 64, who faces federal wire fraud charges related to the embezzlement of $500,000 from the North Idaho Housing Coalition, where she served as executive director.

From 2017 until February of this year, Hosking was paid for work she claimed to have performed for the North Idaho Housing Coalition. That organization received more than $4.5 million in federal grants in 2017 to assist low-income families find affordable housing. That money was funneled to the coalition by the Idaho Housing and Finance Association, which disperses the federal grants throughout the state.

While Lori Isenberg is not named in the charging documents against Hosking and Barnes, previously filed search warrants list several communications between Isenberg and her daughters about transferring them money from accounts controlled by Isenberg at the housing coalition.

“Hosking received and accepted a total of $16,500 in payments to which she was not entitled,” Assistant U.S. Attorney Traci Whelan wrote in court records. “Hosking agrees that this money was stolen, embezzled, obtained by fraud, knowingly converted, or intentionally misapplied by the co-conspirator.”

As for Barnes, court records say she founded a company called JB Services. This company then billed the housing coalition a total of $15,500 for yard work that it did not do at houses owned by the coalition, Whelan wrote.

“Barnes was issued a credit cart in the name of JB Services. This credit card was used to purchase items for Barnes, unrelated to any work for the Coalition,” Whelan wrote. “Her co-conspirator paid the credit card bills with money she received from the Coalition.”

The federal investigation into Barnes and Hosking was sealed until Tuesday afternoon in court, when they made their first appearances and then pleaded guilty before U.S. District Court Judge Edward Lodge.

Barnes and Hosking both face up to five years in prison and up to a $250,000 fine. However, given their lack of criminal history they could face as little as probation when they are sentenced Jan. 29, 2019. Attorneys for the women – Joseph Sullivan, who is representing Barnes, and Monica Flood Brennan, who is representing Hosking – declined comment after the court hearing.

The charging documents unsealed in court Tuesday made no mention of the ongoing investigation into the death of Isenberg’s late husband, 68-year-old Larry Isenberg.

Lori Isenberg told investigators that he fell out of their boat on Feb. 13 as the two were on a morning boat ride on Lake Coeur d’Alene, but an autopsy revealed that Larry Isenberg more likely died from an overdose of Benadryl than by drowning.

Deputies investigating the case noted that Lori Isenberg had a bloody nose when they responded to the call. She said her husband may have had a medical episode that caused him to fall into the lake and she was injured trying to pull him onto the boat, according to court records.

Lori Isenberg, turned herself into authorities on July 25 some two months after she failed to appear for a May 25 hearing on a charge of grand theft. That charge was dismissed earlier this month after Whelan filed the wire fraud charges in federal court.

According to court records, a friend of Larry’s said Lori was a “mama bear” who would give her six daughters from a previous marriage, including Hosking and Barnes, money and involve them in her business, court records state.

Isenberg is scheduled to appear in court 9 a.m. Wednesday in Coeur d’Alene on a list of federal charges related to the same fraud scheme that resulted in the guilty pleas on Tuesday.