Former South Lake planner gets probation for building-rights scam

SOUTH LAKE TAHOE - A former city planner pleaded no contest to grand theft and was sentenced to 90 days work release for her part in a building rights scam in the 1990s.

Mary Kay McLanahan also was placed on four years' probation in a plea deal that allows her to avoid prison time.

McLanahan was arrested in January 2004 after a two-year investigation led authorities to believe she forged building rights in South Lake Tahoe after a property owner discovered his right wasn't tied to his land.

"I feel very remorseful for it, and I ask the court to consider what I've done since then," McLanahan said when she entered the plea Friday in El Dorado County Superior Court.

C. David Eyster, McLanahan's attorney, said his client was addicted to cocaine when she participated in the scam, which leaked three highly sought developmental rights that are required for construction in the city to sellers sometime in the 1990s.

McLanahan found a supplier, a local real estate agent, who allegedly would purchase the rights with cocaine and sell them to legitimate buyers, Eyster said.

In a telling sign of the demand for the building rights, the three sold for a total of $105,000, authorities said.

Eyster referred to McLanahan as a pillar of every community she has lived in. Myriad letters from people supporting and defending McLanahan were sent to El Dorado County Superior Court Judge Jerald Lasarow in her support.

In referring to the civil case brought by the city of South Lake Tahoe and its redevelopment agency, Eyster said McLanahan has fulfilled her agreement to pay $55,000.

He said his client also helped Washington Mutual discover a fraudulent plan that would have robbed people from home finances.

Deputy District Attorney Lisa Serafini urged the judge to send a signal to others who would follow in McLanahan's footsteps.

"You can't steal from the city of this community, and if you do there's consequences," Serafini said.

City Attorney Catherine DiCamillo said many people continue to suffer as a result of McLanahan's actions.

"Many citizens who had building or planning projects approved by Mary Kay have called or come to the city offices questioning the propriety of their matters and requesting a review of their files and assurance that their projects were handled properly," DiCamillo said.

"All of the taxpayers of the city of South Lake Tahoe have been victimized by Ms. McLanahan's criminal conduct, which has redirected city personnel and resources from current issues to old files."