Despite fraud, North Oaks woman could avoid prison

For five years, James and Cynthia Hood defrauded the Social Security Administration, receiving $332,000 in medical assistance payments for their seriously disabled children, despite a family net worth of $11 million.

Next Monday, however, U.S. District Judge Joan Ericksen will weigh a proposal to waive prison time for Cynthia Hood because of the critical role she plays in caring for her two disabled children. One is autistic and the other has spastic quadriplegic cerebral palsy.

The U.S. attorney's office stated in a document last week it "does not object to a non-incarcerative sentence for Cynthia Marsalis Hood, which includes home confinement, community service and a fine." She should normally receive a prison sentence of 27 to 33 months for her conduct, federal prosecutors said in a memorandum last month.

Prosecutors are recommending a 41- to 50-month sentence for her husband.

The Hoods' three children are 15-year-old triplets. Two of them are described by the prosecutors as "severely disabled."

Jeanne Cooney, a spokeswoman for the U.S. attorney's office, said Monday, "While this is an egregious crime, there are very unusual, extenuating circumstances that we, the government, must consider at sentencing."

One of the two children, identified as W.H., is autistic and is "nonverbal and prone to wandering at all hours of the day," according to papers filed by assistant U.S. Attorney Laura Provinzino.

Provinzino continued, "The intense physical and emotional role Hood plays in caring for the children has led to her unique ability to read their verbal and nonverbal cues to meet their needs and to keep them safe.

"While there can be no dispute that Hood has the resources to pay for the highest-quality care available for her children, the government cannot dispute that Hood plays a vital role in ensuring their safety."

The federal recommendation for a lighter sentence cites specific paragraphs from federal guidelines that indicate Cynthia Hood may have cooperated with the federal investigation. When they pleaded guilty in October, she and her husband paid the U.S. Marshals Service $484,312 as part of the plea agreement.

At their large rambler in North Oaks last week, Cynthia Hood came to the door, but told a reporter, "Our attorney has advised us not to say anything." Jean Brandl, the Hoods' attorney, also declined to comment.

The Hoods bought the North Oaks house in August 2006 for $865,000 in cash, but failed to disclose that, according to a memorandum prepared by Jane Lewis, a special agent with the Social Security Administration.

Social Security Income (SSI) benefits for a child require that a parent and child have no more than $2,000 in income and assets, excluding a house and vehicle. "SSI is meant to be a resource of last resort," prosecutors wrote.

However, in a benefits interview in February of 2006, Cynthia Hood lied, claiming her husband lived in Louisiana and she was the sole legal guardian of her children, authorities said. She also lied about her assets and said she only had $1,400 in the bank, they said.

She failed to disclose that she and her husband owned a house in Louisiana that they had listed for sale at $278,000, that she held at least 16 bank accounts while he had 68 bank accounts, and that their combined interest income in 2006 was $183,000, prosecutors said.

Her husband also owned a farm in Batavia, Iowa, that consisted of 180 acres of timber and farmland where corn and soybeans grew, with an income in 2005 of $187,910 that included $19,000 in state and federal agricultural payments.

The documents state that Cynthia Hood was purportedly unaware that for three years, they also received Medicaid payments from Louisiana for their children, thereby defrauding both Minnesota and Louisiana at the same time.

Joseph Daly, emeritus professor of law at Hamline University, said in an interview that he thinks Judge Ericksen will agree to no prison time for Cynthia Wood, "not because she doesn't deserve prison, but solely because of the children."