By BRAD GASKINS / Staff Writer

A Shelby County woman will spend more than seven years in prison for her role in a scheme to collect expenses from a non-existent lawsuit.

Katherine Hope Lane, 27, pled guilty in August 2010 to wire fraud, aggravated identity theft and conspiracy to launder money in a four-year scheme that collected $425,000.

In sentencing her today to seven years and three months in prison, U.S. District Judge C. Lynwood Smith Jr. told Lane that her fraud case “borders on classic evil” and ordered her to pay $368,575 in restitution, in addition to forfeiting $406,5000 to the government as proceeds of the fraud.

“This was an outrageous and prolonged scheme that preyed on family friends and associates in another state who were duped into believing they were helping Ms. Lane pursue a lawsuit filed as the result of her suffering a brutal assault while at work,” U.S. Attorney Joyce White Vance said through a press release. “Ms. Lane was never assaulted and there was never a lawsuit. Thanks to thorough investigation, Ms. Lane’s deception was revealed and she is being held to account for her crimes.”

Lane conducted the fraud with her father, Paul H. Lane Jr., of Pelham, from 2004 through at least November 2008, court records show. Paul Lane was indicted in October 2009 on mail fraud, wire fraud and money laundering charges and is awaiting trial.

Federal authorities, in a press release citing court records, said the fraud was carried out as follows:

Friends and acquaintances in Michigan sent money to Alabama by mail, wire and personal delivery over four years. When the money was wired, it was wired through a Regions Bank account and removed for Katherine Lane’s benefit.

Katherine Lane actively participated in the scheme by assuming various identities, some genuine and some fictitious, under which she sent myriad emails to victims, authorities said. Through the emails, she either solicited more money or attempted to lull the victims into believing their money would be returned, and possibly increased upon successful completion of the lawsuit.

“Individuals who create elaborate schemes that have no purpose except to defraud others for their own personal profit run the risk of prosecution,” IRS Criminal Investigation Special Agent in Charge Reginael McDaniel said in the press release. “Schemes that target family friends and associates are especially egregious and today’s sentencing should serve as a deterrent to those who might contemplate similar fraudulent actions,” he said.