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Pamela Hediger (copy)

Pamela Hediger speaks to her attorney, Walter Todd, at the Benton County Courthouse earlier this year. Hediger pleaded guilty on Tuesday to federal tax evasion and money laundering charges but still faces state charges in connection with the theft of funds from her former Corvallis law firm.

Former Corvallis attorney Pamela Sue Hediger pleaded guilty Tuesday in U.S. District Court in Portland to federal tax evasion and money laundering charges in connection with allegations that she embezzled from her clients and defrauded investors to live beyond her means.

“Pamela Hediger used her position of trust to steal large sums of money from her business associates, clients and investors,” Billy J. Williams, the U.S. attorney for Oregon, said in a statement announcing the plea.

“Her lavish lifestyle and spending reflected her complete disregard for the interests of those she stole from,” he added. “Not only did Hediger steal from those she knew, she stole from the U.S. Treasury and her fellow citizens by shamelessly evading her tax obligations.”

More than $300,000 of Hediger’s ill-gotten gains went toward extensive improvements to her Corvallis home, according to court documents in the case. She also used embezzled funds to pay for lavish vacations, a time-share interest, plastic surgery, automobile expenses and a Hawaiian band hired to perform at a party, the documents state.

In August, Hediger was brought up on state charges in Benton County Circuit Court. The charges included five counts of aggravated first-degree theft, one count of aggravated identity theft, two counts of identity theft and two counts of state income tax evasion.

The federal charges were added in September.

In a plea agreement with federal prosecutors, Hediger admits that she pilfered more than $1.1 million from client and business accounts at her former law firm, Evashevski, Elliott, Cihak & Hediger, and duped two investors out of their money in a plan to build shopping centers in Astoria and Seaside.

She also acknowledges filing a false federal income tax return for 2011 and failing to file federal tax returns for the years 2012-17.

As part of the plea deal in the federal case, the U.S. Attorney’s Office agreed to recommend a sentence of 46 months – just shy of four years – in prison. The maximum potential term on the charges is 15 years.

The plea agreement also calls for Hediger to pay more than $1.1 million in restitution as well as $471,399 in back income taxes. As part of the deal, she agrees to forfeit her house at 7900 NE Hundred Oaks Drive in Corvallis.

Hediger is scheduled to be sentenced on Jan. 19 by U.S. District Judge Anna J. Brown.

Hediger’s attorney, Walter Todd of Salem, said she regrets her crimes.

“My client has, from the beginning, accepted full responsibility and is sincerely sorry for her actions,” he said.

The state charges against Hediger are still pending, with a status check hearing in Benton County Circuit Court scheduled for Jan. 24. Todd said he is working to reach a plea agreement in that case before it goes to trial.

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Reporter Bennett Hall can be reached at 541-758-9529 or bennett.hall@lee.net. Follow him on Twitter at @bennetthallgt.

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Special Projects Editor

Special Projects Editor, Corvallis Gazette-Times and Albany Democrat-Herald