A Roseville psychologist who charged thousands of dollars to organize a client's closets, attend a funeral and visit a gravesite -- and accepted dozens of expensive gifts from the client -- was suspended indefinitely and fined $50,000 for her actions, according to a Minnesota Board of Psychology order made public this week.
Kathryne Sanders, 63, acknowledged in an interview that her professional relationship with the client went over the line, but said her career as a psychologist is likely over, so she won't have to pay the record fine due upon reinstatement.
State law requires psychologists to observe strict boundaries between professional and personal relationships, and Sanders said "there were definitely issues there. But I also think this is something that is extremely common. I just don't think it's deserving of the penalty that I received."
While she has accepted the board's discipline, Sanders' legal troubles continue over her 12-year treatment of Gina Paulucci of Wayzata.
Paulucci -- daughter of the late frozen food magnate Jeno Paulucci -- filed a lawsuit in March that accuses Sanders of malpractice, unjust enrichment and other wrongdoing, saying she paid Sanders more than $750,000 for "incompetent" treatment, court records show.
Not only did Sanders fail to deal with her client's "serious depression and anxiety symptoms," Paulucci developed an "unnatural and unhealthy dependency" on her psychologist, the lawsuit said. An attorney for Paulucci declined Wednesday to comment on the case.
Sanders began treating Paulucci in 1998. By 2003, she was treating her client more than five times a week, including Sundays, according to the psychology board. At times Paulucci would give Sanders blank, signed checks, court records show.
In February 2006, Sanders visited Paulucci's ailing boyfriend and charged her client $1,716 for 11 hours of service, the same day Sanders was scheduled to go to a 7 p.m. Timberwolves basketball game, according to an analysis by the board of Sanders' calendar entries.
Other entries show she charged $2,028 on the day the boyfriend died and $1,040 on the day of the funeral. Sanders wrote the eulogy and her husband was a pallbearer, the order said.
In 2008, Sanders and her husband were named beneficiaries in Paulucci's will, the order said.
The board order lists 85 items that Sanders, her husband and son accepted from her client during the years Sanders was providing therapy. The items included gold, platinum and diamond rings, precious-gemstone jewelry, Rolex watches, designer clothing, shoes, eyewear and accessories made by Louis Vuitton, Prada, Cole Haan, Chanel and others, an Apple iPod Touch, a case of wine and a $5,000 check.
In a birthday card to the client, Sanders wrote "... I bless the day that you were born -- you could not be more dear to me," according to the board.
In an interview, Sanders admitted accepting the gifts, but said "I didn't use these things, I wasn't interested in them, I didn't solicit them" and "the clinical reasons I had for accepting those gifts is not included [in the board's findings]."
Sanders said her "intention was to return them to the client when they were done with their therapy." Sanders said Wednesday that she has not returned the items. The court file includes photos of the gifts, which Paulucci's lawyers say are worth more than $150,000.
Sanders stopped treating Paulucci in February 2010. Sanders said it was at her client's request.
Court records show Sanders admitted she sold one of the Rolex watches in January 2006 for $14,000. She reported to the board that she also sold a gold and diamond mother of pearl watch.
In 2009, Sanders charged $3,318 to organize her client's personal documents and closets, according to the board's order, but court documents allege that a less-benign activity took place: "Under the pretense of helping Ms. Paulucci simplify her life, [Sanders] assisted Ms. Paulucci in destroying financial records that evidenced much of the gift giving."
Sanders told Paulucci's attorneys that she "helped shred financial records, including checks and credit card statements," court documents show.
The board's order says Sanders failed to document hundreds of counseling sessions. In a court document, Sanders explained that "gaps in [Paulucci's] treatment records resulted from [Paulucci's] specific request addressing concerns of illicit access to the records by her father."
Sanders was licensed in 1978. For engaging in unprofessional conduct, participating in a dual relationship and exploiting the client for "emotional, financial or personal advantage or benefit," the psychology board suspended Sanders indefinitely.
The $50,000 fine "was calculated so as to deprive [Sanders] of any economic advantage gained ... and to discourage repeated violations," the board's order said.
Among other conditions, Sanders must take a professional boundaries course, report on what she learned and accept the supervision of another psychologist if a petition to lift her suspension is granted at some point.
Jane Friedmann • 612-673-7852