Texas Woman Sentenced to 5 Years for Fraud Scheme

MADISON, WIS. - Timothy M. O'Shea, United States Attorney for the Western District of Wisconsin, announced that Sarah Doherty, 35, Stephenville, Texas, was sentenced today by U.S. District Judge William M. Conley to 5 years in federal prison for wire fraud and tax evasion. Doherty pleaded guilty to these charges on April 9, 2024. As part of her sentence, Doherty was ordered to pay $1,025,064.74 in restitution to Victim-1.

Between 2016 and 2020, Doherty executed a scheme to defraud Victim-1, who owned a small business in central Wisconsin. Doherty became friends with Victim-1 and gained access to his personal finances. She then used this access to steal money from Victim-1 and used the stolen money to pay her personal expenses, including a down payment on a property in Colorado and a seven-horse trailer.

Doherty also created fictitious identities and controlled those identities to defraud and manipulate Victim-1 into sending her money that she spent personally. For example, Doherty created "Cindy Lou," a matchmaker who Victim-1 paid to set him up on dates with women. Cindy Lou set up Victim-1 with numerous fictitious women who would communicate with Victim-1 by email. In many instances, the fictitious women, who were in fact Doherty, would then request financial help from Victim-1 to assist with various fictitious tragedies. The money Victim-1 sent to these fictitious women was received and spent by Doherty. Doherty also created a fictitious travel agent and investment advisor and used these alter egos to obtain more money from Victim-1.

During 2019, Doherty also had direct access to a credit card for Victim-1's business and used funds from the credit card to pay her personal expenses. As part of her plea agreement, Doherty admitted that she failed to report the income she received from the credit card in 2019 on her 2020 federal tax return.

While Doherty was on release and awaiting trial in the case, she continued to engage in fraudulent conduct while under the supervision of the United States Pretrial Services. During a hearing on March 19, 2024, Magistrate Judge Stephen Crocker ordered Doherty into custody as a result of her multiple violations of pretrial release.

At the sentencing hearing, Judge Conley stated that Doherty's fraud scheme was a "web of misrepresentations" that had a devasting impact on Victim-1 and his business. Judge Conley stated that Doherty had consistently demonstrated a "pathological affinity for fraudulent conduct." Judge Conley also noted that he had never seen "a more dismal performance by a white-collar defendant on pretrial supervision."

The charges against Doherty were a result of an investigation conducted by IRS Criminal Investigation and the Federal Bureau of Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Aaron Wegner.