Deana Lynn Freauff

Deana Lynn Freauff

A former Diamond Heating employee’s 29-year prison sentence for stealing more than $214,000 from the Seaside business was cut in December to just over 20 years.

The reduction came after the Oregon Court of Appeals ruled in May that the original sentence didn’t account for changes to state sentencing guidelines.

Deana Lynn Freauff, 55, was found guilty in 2016 of first-degree theft, six counts of aggravated first-degree theft and seven counts of aggravated identity theft after serving as the company’s financial manager for nearly four years before abruptly quitting in 2014.

Several of the crimes took place before the effective date of state Measure 57, which increased prison sentences for some drug and property offenses. But the original sentence treated each count as if they took place after the law went into effect, leading to the appeals court decision.

On Thursday, Freauff returned to Clatsop County Circuit Court for a new sentencing hearing in front of Judge Dawn McIntosh. Citing numerous examples of case law, Thomas Freedman, Freauff’s Portland-based attorney, asked the judge for a sentence of between three and five years, while Deputy District Attorney Beau Peterson asked that the original sentence remain in place.

“Yes, it was an egregious situation, but it was just money,” Freedman said. “I know there’s this talk that she’s a serial predator and a horrible person. What we are really talking about here is an addiction.”

On these key points, McIntosh largely disagreed.

“I’ll admit, when I first saw this case, I thought, ‘Really? That long for stealing money?’” McIntosh said. “But I took a look at both sides of this, and it’s not just about stealing money.”

‘How could you not know?’

Dan Nelson, the owner of Diamond Heating, spoke at the often-emotional hearing, along with Freauff and five of her family and friends.

When Nelson hired Freauff, she was on probation after being convicted in 2009 for embezzling more than $300,000 from two title companies in the Portland area. Freauff, posing as Nelson, forged a letter to her probation officer claiming that he knew of her legal status and wanted to hire her anyway.

The probation officer never confirmed the letter’s author, and the company relied on references, rather than background checks, at the time, Nelson said.

“Do you know what a laughingstock I was when people have come up to me on the street and asked me, ‘How could you not know?’” Nelson asked Freauff. “I don’t want blood. I won’t get the money back. I just want to be an example, even though my pants were pulled down.”

Freauff started scamming the company immediately after her hiring.

During her employment, Freauff used the company’s ATM card to withdraw cash for clothing, food, her cable bill, her father’s car payments and furniture. She gambled with nearly $100,000 of the stolen money at Spirit Mountain Casino in Grand Ronde and Palace Casino in La Center, Washington.

An accountant who was updating the company’s financial records discovered her crimes after asking Freauff for passwords to the records. Freauff never shared them and quit days later.

Diamond Heating employs 21 people and has about a $1 million payroll, Nelson said. On top of the stolen money, the ordeal cost the company hundreds of thousands of dollars more for things like legal fees and back taxes owed to the Internal Revenue Service, nearly driving the company to bankruptcy.

“This is a pretty good-sized business that offers family-wage jobs, and she put it on the brink of bankruptcy,” Peterson said.

Nelson said he spent six months focusing only on tracing every transaction Freauff had made during her employment and will likely have to work well into his 70s to afford retirement.

“You gave me cancer!” Nelson yelled at Freauff, a reference to an earlier statement of her cancer treatment in prison. “I am financially dead. I have cancer — financial cancer.”

Freauff said a gambling addiction led her to steal from the company.

“I regret what I did. It was wrong,” Freauff said. “I was addicted. I am very good at hiding it.”

Nelson rejected the explanation.

“Remember the sheep that was really a wolf? That’s Deana Freauff. She is absolutely a predator,” Nelson said. “You just don’t have a gambling problem. You have a dark side.”

During their character statements, Freauff’s friends explained their longtime perceptions of her: welcoming, outgoing, compassionate, full of integrity, genuine, kind and intelligent.

“I have to say it was quite a shock,” said Matt Fitzner, a friend, about learning of Freauff’s crimes. “I think a lot of it happened after we drifted apart. The actions I heard today are not characteristic of the person I know.”

Melanie Culp, Freauff’s sister, said she is a good person who has had to overcome an addiction.

“I would never say that this was justifiable, but I would also say that prison is meant to be for the protection of the public at large, and Deana has been more than rehabilitated,” Culp said.

In her statement, Freauff also apologized to her family and friends.

“My family and friends are everything in the world to me,” Freauff said. “Yes, I am a thief. But that’s not all I am.”

‘A predator’

By the end, though, the character statements seemed to result in more harm than good for Freauff. McIntosh said she didn’t buy Freauff’s demeanor in front of loved ones. The judge added that, had he not been the victim of the crime, she could see Nelson, who was friends with Freauff when she worked for him, in her friends’ shoes.

“I think you have the ability to act like that, and I think you did that for much of your life,” McIntosh said. “It was proven not only by the state, but also because of the defense witnesses called.”

McIntosh pointed to a shift in Freauff’s demeanor when Nelson testified — eye rolls, leaning back in her chair — versus when the character witnesses spoke, when she cried into pieces of tissue.

“It seems, you know, diabolical,” McIntosh said. “I think that you are a predator. I think that if I have you out long enough, you will do it again.”

Freauff said she has held jobs while in prison and participated in a number of betterment groups.

“I’m at peace most of the time,” Freauff said. “Life will not be easy whether or not I get out of prison, but I will have a good life.”

Nelson, meanwhile, said it was sad that Freauff didn’t use her talent and intelligence for “great things.” He also forgave her.

“I’m extremely hurt, angered and misled, but I feel a little vindication that her friends were misled, too,” Nelson said. “At the end of the day, it is only money, but it’s about other people’s money. It’s about integrity.”

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