Lawyer gone bad again sent back to prison for Medicaid fraud

By all appearances, Stephen Rondestvedt appeared to be a contrite ex-con trying to redeem himself from past frauds.

But as the saying goes, appearances deceive. Sometimes, they deceive even hardened former federal prosecutors like Hank Shea.

On Tuesday, U.S. District Judge Susan Richard Nelson sentenced Rondestvedt to 15 months in prison for his newest crime, lamenting that a man blessed with gifts of intelligence, oratory, higher education and a loving, supportive family could feel compelled to defraud the public while on supervised release for another fraud.

Rondestvedt, a Hamline University Law School graduate, first came to the attention of Shea when Shea prosecuted him for defrauding law clients of more than $700,000. When Rondestvedt admitted to that crime in 2003, he told Shea he'd like to be part of his "Lessons Learned" program, run through the St. Thomas School of Law. Shea later left the U.S. attorney's office to run the program full time.

The program calls on offenders convicted of financial crimes to talk with students in an effort to prepare them for the pressures they may face after graduation and to dissuade them from ethical and legal breaches.

Shea called on Rondestvedt to speak even before he was released from his 46-month prison term. After Rondestvedt's release from prison in 2008, he and Shea appeared together for presentations at law schools across the country.

But within a year of Rondestvedt's release, he was already facilitating another fraud scheme that helped his former Golden Valley employer, Universal Home Health Care Agency Corp., steal more than $55,000 in Medicaid funds. The agency filed bogus bills for personal care attendants.

Nelson also ordered Rondestvedt to pay restitution of $55,802 while handing down the 15-month sentence.

Attorney Eric Newmark described his client as a 48-year-old father of three who deserved special consideration, even probation. Rondestvedt's previous convictions for theft by swindle and federal mail fraud stemmed from a period in 2002 and 2003 when he was undergoing severe financial stress, he said.

Rondestvedt didn't hatch the Medicaid fraud scheme and did not profit from it personally, Newmark said. Rondestvedt only went along with it to keep his job and support his family, he added.

David Genrich, an assistant U.S. attorney, asked for a sentence of at least 18 months, noting that Rondestvedt's crime took place over two years and while he was under court supervision.

"The pattern of conduct here is alarming," Genrich said.

Rondestvedt apologized for his actions.

"I didn't set out to try to defraud anybody. I was just trying to make my way," he said. "I'm not here to make excuses for my behavior. ... I let my desires of trying to keep a job and trying to go forward get in the way."

Nelson said she wanted to believe him. She noted that he didn't get any financial rewards for his crime, other than keeping his job, but said the law focuses on a loss to victims, not how criminals divide their loot.

"Your children and family understand your financial strain, and your financial strain is significant. They don't want you to do something illegal to rid yourself of that financial strain," she said. "That can't, any longer, be an excuse to engage in criminal conduct."