WAILUKU - Saying he didn't believe a Kihei woman who said she was sorry after receiving more than $40,000 in welfare overpayments while running a shave ice business, a judge ordered her to spend four weekends in jail as part of five years' probation.
Julie Cosbey, 41, was ordered to pay $40,427 in restitution to the state Department of Human Services for the overpayments.
According to court records, she collected the benefits for herself and her three children from September 2008 to November 2010 while failing to report that her boyfriend, who is the father of two of her children, was living in her residence and receiving income.
In sentencing Cosbey on Friday, 2nd Circuit Judge Richard Bissen said he didn't believe that she would pay the money back, noting that she still hadn't paid off $2,468 she owed for overpayments from 2003.
"In eight years, she has paid back less than $1,000," Bissen said. "She still owes the state $1,586. So how can we expect her to pay any of the $40,000, however long we give her?"
Cosbey had pleaded no contest to a reduced charge of second-degree theft, as well as medical assistance fraud and welfare fraud. A plea agreement between the defense and prosecution recommended no jail for Cosbey.
In court, she said she was sorry.
"I don't think you are," Bissen told Cosbey.
"She continues to insist that no violation occurred, that the boyfriend was not really staying there during the time," Bissen said.
He said that Cosbey could have paid off the smaller amount she owed from 2003 to try to make a good impression for the court.
"But you stand there getting yet another interest-free loan from the state and you have not a care in the world," the judge told Cosbey. "You do not care that you stole this money because you're never going to pay it back. You learned something from the first time you did this - you don't pay it back and nobody makes a big deal.
"This is a big deal," Bissen said. "I don't think you feel bad at all."
He said Cosbey had been on welfare since 1999.
When she received the benefits from September 2008 to November 2010, her boyfriend had income and unemployment insurance benefits totaling more than $75,000 that wasn't reported, according to a state DHS investigation. The investigation also showed that Cosbey was running a shave ice stand earning $100 to $300 a day at Kihei Swap Meet, where she also sold snacks and souvenirs. The rent for the business was $2,000 a month, according to court records.
Some neighbors told a state investigator that Cosbey's boyfriend was living with her, although he would leave for a couple of days before inspections for a federal housing subsidy program, according to court records. The father of Cosbey's oldest child told an investigator the child stayed with her only on weekends.
"You own your own business, the business you say belongs to your boyfriend," Bissen told Cosbey. "But it's in your name. You say in this report you make no profit. You've learned that trick, too, over the years."
Saying he found the case "troubling," Bissen said he was sentencing Cosbey to jail "because you have not learned a single thing."
"The state made a mistake in their promise to you," he told Cosbey. "They didn't know this case well enough at the time they made that deal. I think you need to learn to accept responsibility for what you do and to not keep committing crimes.
"I predict you could very well do this again, so I am not following this plea agreement."
After hearing that she would be sentenced to jail, Cosbey said, "I've got three kids; I'm going to lose everything."
When Bissen asked why she hadn't thought about that earlier and paid back the money from eight years ago, Cosbey said, "I'm going to pay back every penny I can. I give as much as I can."
"I don't think so," Bissen said. "I don't think you will. I don't think you learned any lesson."
After Cosbey said she had to take care of her children, ages 12, 6 and 2, Bissen said she could begin the jail term next weekend so she would have time to make arrangements for them.
"Who I really feel bad about is your children," the judge said.
He ordered Cosbey to turn herself in Friday for the first of four consecutive weekends in jail.
* Lila Fujimoto can be reached at lfujimoto@mauinews.com.
