Parents of amputee ordered to repay money from donations

Sunday, July 30, 2000 | 4:31 a.m.

Hatfield's parents, Denise and Martin Rehm, now must return more than $130,000 from the fraud and conversion lawsuit filed against them in district court.

Hatfield, 18, sued her parents last year after she discovered money donated from various community fund-raisers had been drained from a special bank account.

Washoe District Judge Steven Kosach ordered her parents to pay back the donations plus interest, costs and attorney fees.

The costs include a fee for Richard Schlingheyde, an accountant with Kafoury, Armstrong & Co., who audited the bank account set up for Hatfield as well as medical bills from Hatfields medical providers.

"He was able to prove that none of the money from Jelena's medical fund was paid to her medical providers but was in fact taken from the account by her parents in cash," said Kelly Watson, Hatfield's lawyer.

In April 1998, Hatfield, then 16, contracted a rare form of bacterial meningitis. Doctors amputated her fingers and both legs below the knees in order to save her life. Numerous fundraisers were held throughout northern Nevada to help pay Hatfield's medical expenses.

In her lawsuit filed Nov. 2, 1999, Hatfield alleged that the Rehms committed fraud, oppression and malice when they used money from the account to buy a motor home, two cars and to make improvements to their home among other expenses. The suit also alleged the Rehms drained the account through ATM withdrawals and transactions at area casinos.

The Rehms said in November they were saddened and hurt by their daughter's allegations. They said all the money was spent on her needs. She no longer lives with her parents.

Although insurance covered much of the cost of Hatfield's medical expenses, Watson said her bill at Washoe Medical Center alone had reached $700,000.

The Rehms filed Chapter 13 bankruptcy on Feb. 11, just 30 minutes before they were scheduled to appear at a hearing to secure a default judgment.

The Rehms now must get a payment plan confirmed in bankruptcy court or they will have to repay the entire sum. Their attorney asked the judge on Wednesday to push back the plan so she could withdraw as counsel. A new bankruptcy hearing has not yet been scheduled.

"What this means is that if the bankruptcy plan is approved, Jelena will most likely never see a dime," Watson said.