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Judge scolds Butte counselor before sentencing her for Medicaid fraud

After loudly admonishing Butte mental health counselor Dana Trandahl on Tuesday for bilking tens of thousands of tax dollars and betraying her profession, a judge sent her to jail for 135 days and imposed a 10-year suspended sentence for Medicaid fraud.

District Judge Kurt Krueger also ordered Trandahl to pay $100,000 in restitution to Medicaid, and she must abide by numerous probation requirements and restrictions once she’s out of jail or face possible prison time.

The sentence brought a long legal saga to at least a resting point, but Krueger — in a stern and amplified voice — first scolded Trandahl for breaking the law and the trust of her clients.

Trandahl, 57, had pleaded guilty to two counts of Medicaid fraud in what prosecutors say was a long and extensive scheme of billing for counseling sessions she never provided and for people who were never patients.

“This is not a case about mistakes — accounting mistakes people make in billing errors, general mistakes,” Krueger said. “This is a case of fraud.”

Krueger said mental health counselors have professional and ethical obligations to help people and respect their dignity and trust, but said, “The person standing before you today is not one of those individuals — or professionals.”

“The defendant manipulated her clients not only for monetary reasons, but for her own personal means, exploiting their trust and developing personal relationships for her own personal benefit.”

Trandahl, wearing a COVID mask, was soon escorted out of the courtroom by a Butte police officer and taken to jail, where she is to stay for the next 135 days.

Each fraud count carried a maximum 10 years in prison but as part of a previous plea deal, prosecutors agreed to drop 13 additional felony charges alleging that Trandahl bilked Medicaid, the federal and state health care program for the needy, aged, blind and disabled.

From his forceful statements and demeanor, it seemed as if Krueger was going to impose a much harsher sentence. But he said prosecutors had worked hard on the case and the plea agreement, and Trandahl had no prior felony criminal history, so he generally accepted their recommendations.

The prosecutors — Ann Shea for Butte-Silver Bow and Michael Gee from the Montana Attorney General’s Office — asked for a 10-year suspended sentence on each Medicaid count to run concurrently, $100,000 in restitution and 45 days of jail time. Krueger went along with that except he ordered 135 days jail time.

Benjamin Darrow, Trandahl’s attorney, asked for no jail time and a 10-year deferred sentence, meaning its terms would not be imposed if Trandahl met probation obligations. He also asked for restitution to be set at $73,000 — the actual fraud amount prosecutors alleged in their charges.

Trandahl was a mother of four, Darrow said, had served as a professional counselor in her hometown of Butte since 2000, and had already suffered greatly.

“She’s certainly not a wolf in sheep’s clothing,” he said. “She’s lost everything over this — her licensing, her livelihood and her family.”

Although Trandahl pleaded guilty to the two counts of fraud in February 2020, she later sought to withdraw those pleas, saying her previous public defender was ineffective and bullied her into accepting the plea deal.

Krueger denied that request last month, rejecting those claims and saying Trandahl had tried the court’s patience by filing numerous continuances in the case.

Trandahl was initially charged in May 2018 with one count of Medicaid fraud, but prosecutors later added more than a dozen additional counts, most of them for fraud but also felony charges of identity theft and tampering with evidence.

Just before the initial fraud charge was filed, prosecutors dropped remaining charges against Trandahl for allegedly trying to get a client to plant meth and other drugs on her ex-husband, his wife, and the attorney representing him in a long-running child-custody dispute with Trandahl.

Those were dropped because the client, 33-year-old Aimee Hardesty, died in March 2017 after the case had been filed. That meant Trandahl could not exercise her constitutional right to confront and question her accuser. Regardless, Trandahl denied any wrongdoing.

The county coroner ruled Hardesty's death was caused by a seizure disorder. But Hardesty’s mother filed a civil lawsuit saying Trandahl caused her daughter severe emotional distress. It sought unspecified damages but has since been settled privately.

State Medicaid investigators began reviewing Trandahl’s billing practices based on Hardesty’s claims that instead of receiving any actual counseling, Trandahl spent their time talking about her own “family discord” and efforts to regain custody of her children.

Several sessions and contacts were fraudulently billed to the Medicaid insurance of a man who attended counseling sessions with Hardesty in 2016, prosecutors said.

Based on additional complaints, they say Trandahl was billing significant counseling sessions coded “without patient present” to several developmentally disabled consumers and child recipients, as well as other clients.

At Tuesday’s sentencing hearing, two of Hardesty’s sisters gave emotional victim-impact statements, saying Aimee would still be alive had Trandahl given her proper counseling.

“Today, I am unable to call or text my sister,” Jessica Hardesty said through tears.

“I am unable to know if she is receiving my messages about my life and recovery.

“I cannot hear her laugh or give me advice,” she said. “I do not feel the comfort of her presence when I am having a bad day. All of this is because she did not receive the appropriate mental health that was out there. Dana, I hope you think of that every day.”

During the hearing, two state Medicaid investigators testified that Trandahl’s fraudulent billing practices were extensive and dated back years. And Gee — the prosecutor for the AG’s office — suggested she bilked far more than $100,000.

“These are services for vulnerable people,” Gee told Krueger. “And what the defendant did was betray that trust and bill for services that never even happened. What’s worse is that she obtained information about patients’ children and billed Medicaid for their children for services that never took place.”

When asked to comment after the hearing, Gee said Krueger had said it all.

“I think that it speaks for itself,” he said. “The way Judge Krueger pronounced sentencing sums everything up that I want to say, for sure.”

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