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Lodi woman gets four-year prison sentence in scam

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Posted: Thursday, February 25, 2010 12:00 am

A Lodi woman was sentenced to four years in federal prison Wednesday for her role in a false insurance company that, among other things, refused to pay for medical bills because pain is part of "God's plan."

Donna Jean Rowe, 59, was convicted last summer of conspiracy, mail fraud and money laundering. Federal jurors also convicted James S. Kalfsbeek, 72, of Arbuckle, who had been an elected Colusa County supervisor in the early 1990s. He was sentenced Wednesday to 10 years in prison.

In 1994, Kalfsbeek founded a company named Puget's Sound Agricultural Society, Limited. Clients paid a one-time membership of $500 and an additional fee of $250 per vehicle. In exchange, the company agreed to pay accident claims.

The policies were nearly identical to those offered by insurance agents, except that PSASL used the phrase "financial responsibility" rather than "insurance." They issued "financial responsibility" cards to members, which looked exactly like those given out by AAA.

But most claims were not actually paid until members hired attorneys to go after Puget's Sound, and even then members were often denied repair claims to their own vehicles. Eventually 22 states and two Canadian provinces issued cease-and-desist orders.

In a Michigan case, a car crash killed one person and left another in a wheelchair. A judge ultimately ordered Puget's Sound to pay $20 million in damages, plus $5 million in accrued interest.

The company responded by sending the victims' families a document claiming to authorize payment out of the U.S. Treasury. That family never saw the money.

When the company finally closed in 2002, it had about 3,000 current members, according to court documents. Since 1994, it had collected millions of dollars in fees.

A number of victims testified at trial, including members whose driver's licenses were revoked due to lack of vehicle insurance, as required under state laws.

For instance, member Arthur Mishkoff testified that he asked Puget's Sound to help him fight to restore his driver's license. They merely sent him an "Affidavit of Truth," saying the court didn't have the venue to hear his case.

Prosecutors said in court files that countless victims ran into legal trouble with their driver's licenses, resulting in legal fees and higher insurance premiums.

Those involved in the company believed they were "sovereign citizens," and that federal and state governments are "alien corporations" with no authority over "organic, Christian people," U.S. attorneys have said in press releases.

"The defendants are part of a movement that believes that they are not subject to state or federal law — in other words, that they are sovereign. A significant sentence is warranted to discredit this philosophy and promote respect for the law," Assistant U.S. Attorney Steven Lapham wrote in a pre-sentence brief.

Ultimately, eight people were charged in July 2005. Several took plea deals, three were dismissed from the case, and Rowe and Kalfsbeek took the case to trial.

After their convictions, a probation officer recommended a 10-year sentence for Rowe, while her attorney argued for no more than two years.

In asking for a five-year sentence for Rowe, Lapham wrote that both defendants had refused to acknowledge wrongdoing and would be "highly likely to re-offend and, in the process, indoctrinate others in their bizarre view of the world."

Rowe's Davis attorney, Joseph Wiseman, argued that, "unlike other defendants in this case," she showed respect in court. Additionally, she expressed remorse for the victims, her attorney said in court papers.

Rowe was involved in Puget's Sound in 1994 for about a year. In early 2001, she returned to help get the company back to its "fundamental, religious roots and avoid the appearance of selling insurance," according to a pre-sentencing brief by her attorney.

After the company folded in 2002, Rowe — also known as Donna Willis — began working as a home health nurse for several years, according to her attorney. In arguing that she would not be a risk to society and would not re-offend, her attorney noted that she lives next door to her son on his Acampo property and that her estranged husband also lives nearby.

The government did agree that neither defendant appeared to gain much money in the process, but said that many others fell victim. Rowe and Kalfsbeek appeared to believe that they "are simply not subject to the law," Lapham wrote in court documents.

The five other people involved in the business have since resolved their cases:

  • Kurt Lakota, of Galt, was sentenced Nov. 3 to 21 months in prison. He had pleaded guilty May 14 to a charge of failing to report a crime. As vice-president of Puget's Sound, he reviewed accident claims.

Lakota agreed to be deported to Germany after finishing his prison sentence, according to court documents filed by prosecutors.

  • Amy Lynn Polnoff, formerly of Galt and Lathrop, pleaded guilty to mail fraud and was sentenced Oct. 6 to three years in prison, followed by three years of supervised release. A judge recommended that she participate in a substance abuse treatment program while in prison, court records show. Prosecutors said in a sentencing document that she also had mental health troubles.

She had taken over the business from her father, Sherwood Theodore Rodrigues, now in his 90s.

  • Rodrigues was dismissed from the case because he was 91 by the time trial neared and "appeared to be declining mentally," prosecutors said in court documents.

Prosecutors and attorneys for the other defendants accused Rodrigues of stealing $225,000 when he left Puget's Sound.

Rodrigues has sought payment from the government for the time his case was pending, seeking $1,086.98 per minute since July 2005, for a total more than $2 billion. In a September letter to the court, he listed the company's administrator as "Jesus Christ."

  • David Polnoff, of Galt, was dismissed from the case because he had a very minor, brief role in the business, according to the government. He and Amy Polnoff were involved in a bitter divorce, so prosecutors said they had no reason to believe that they were protecting one another when both said he had little to do with Puget's Sound.
  • Blanche Patricia Hassall was in her 80s and battling cancer and prosecutors dismissed her from the case on "humanitarian grounds."

Contact reporter Layla Bohm at layla@lodinews.com.

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  • posted at 12:32 pm on Thu, Feb 25, 2010.


    JD, you state that life is pain, not all of it I hope, if that were the case life wouldn`t be worth living. Pain comes in many different forms, there are people willing to sell you something that will make all the pain go away for awhile, booze and drugs for starters. Are you in pain as you typed this, I`m not since I have the best wife a man could ask for, a good home with few bills and good health, does that sound like pain to you. Life is what you make of it.

  • posted at 12:03 pm on Thu, Feb 25, 2010.


    Dogs4You:Life is pain. Anyone who says differently is selling something.

  • posted at 4:56 am on Thu, Feb 25, 2010.


    Throw a handball at her.

  • posted at 4:38 am on Thu, Feb 25, 2010.


    And one would think that nothing's happening in Galt.

  • posted at 4:09 am on Thu, Feb 25, 2010.


    I don`t believe for a minute that pain is part of God`s plan, pass the aspirin.

  • posted at 3:25 am on Thu, Feb 25, 2010.


    At least it wasn't the same old adage: the devil made me do it.

  • posted at 11:45 pm on Wed, Feb 24, 2010.


    Yea, god made me go it... that's rich..



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