Alleged Beauty Queen Fraudster Juliette Kimoto Speaks Out

"Dating is really difficult," says Juliette Kimoto, Mrs. Nevada 2006. "The minute I say 'Hi, I'm Julie. I have six kids, my ex-husband is in prison for 30 years and I'm flat broke, it's like 'Thanks, where's the check?'"

Kimoto, 35, made headlines this week when the Federal Trade Commission announced that it had settled a case against her for allegedly deceiving tens of thousands of consumers of millions of dollars. It's hard to understand how Kimoto, a former beauty queen, a devout Mormon and a mother of six children, ended up entangled with the FTC, which is why she agreed to break her years of silence to share her side of the story.

Kimoto admits no wrongdoing, and offers little explanation for her role in the alleged scam beyond ignorance of its workings. She manages to both defend and blame her ex-husband Kyle for her current situation, and for the actions that lead to his long prison sentence.

Indeed, any description of Kimoto's tale begins with Kyle. The two married after her junior year of high school, when she was 17. That same year, she gave birth to their first child, and though she completed school and eventually earned a degree in elementary education, she stayed at home raising the kids while Kyle worked in telemarketing.

"Do I know what he was doing every day? As a wife, I have six kids. I am going to soccer practice, nursing babies. Ask any woman with six kids what her husband does any given day at the office and most would say, 'Well, he has a legitimate office and employees and he's working. Beyond that, I don't know what the heck he's doing.'"

At least, that's how Kimoto says she saw it. Her husband provided a nice home, a good income, and a nurturing environment, and she had no reason to doubt how he was doing it. She says she believed Kyle "sold a variety of marketing products," to clients including AT&T.

Was Kyle Kimoto Committing Fraud or Just 'Marketing'?

The FTC tells a different story: According to them, Kyle Kimoto orchestrated a massive fraud targeted at consumers with poor credit histories, "offering credit cards that never materialized, while upselling various benefit packages through an incomprehensible, computer-generated 'verification' tape."

In April 2008, Kyle, 36, was convicted and sentenced to 29 years is prison, earning him the No. 6 spot on Forbes' list of longest white-collar prison sentences. Juliette was left to grapple with her mixed feelings towards her husband. "Do I believe he intentionally defrauded people? Intentionally? Absolutely not. Do I believe that the advertising, or the way they were selling it, was misleading? Yeah, probably. But there are misleading advertisements everywhere. It's called marketing."

At the same time she was processing her husband's conviction, she was confronting the new reality of her finances. Juliette had been out of the workforce for years, and with a family to care for, she needed money.

His Business, Her Name

"Before Kyle left for prison, he started a new Internet marketing business," she said. "Because of the civil settlement he'd signed, he opened it up in my name. Between soccer practice and coming home to get the kids one day, I signed the papers. The business was in my name.

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"I sat down with my accountant after Kyle was in prison and asked if it was OK to continue with this business," she continues. "I had four people sitting around me and saying 'You know what? We've got good people running it. It's fine.' The business was clean, as clean as possible, because everybody had seen what had happened to Kyle. But I was the owner. I did receive an income from the business."

So when the FTC alleged that the business "deceived consumers with misleading and unsubstantiated claims about bogus products and services, including one that supposedly would help them get free government grants," Juliette says, she was surprised. "I'd never stepped foot in the company. People working there wouldn't know who I was. I have six children. Anyone with kids knows I wouldn't have time to mastermind a scheme. I wasn't masterminding a scheme. I was not there conspiring. If you asked me what they did there, I don't even know. I've never worked for a company other than my dad's dry cleaner."

Juliette is especially adamant about her ignorance regarding the allegations that her company dealt in government grants. "I know that whole grant thing sounds really crazy, but if you look at companies and who owns them versus who works at them, often times the people who own them aren't there. You'll have an owner and a manager and they're different people and I just really honestly wasn't there. So this thing that I was selling grants, it probably was one of the projects they were working on, but those are things I don't have any knowledge of. There are other people in place doing those jobs."

Settling for the Sake of the Children

So if she's innocent, why did Juliette agree to settle out of court? "When the FTC comes in, they freeze all your assets and bank accounts." Now, she has to think about the kids: Kohl, 18, Kiana, 15, Keilani, 13, Kahlea, 10, Kru, 9, and Kaiya, 6.

"My son is 18 years old and has had his account frozen since he was 8," she says. "I wasn't able to get money out for him to go to college. Once they cut you off, how can you afford to get an attorney? How do you defend yourself? They've taken my cars so I can't get anywhere. I don't have health insurance. I can't get a job anywhere. I can't even get a job at a local gym because when you Google me, you see all these articles, and people say 'I can't hire you, but tell me [about] this interesting story.' I could not afford to go to trial. I had to settle."

Juliette says she's comfortable with that decision. As she points out, a settlement precludes any ruling on her innocence or guilt. But it does allow her to begin rebuilding her life as a divorced mother.

"I'm losing the house of course, because no one's made a payment on it in years. My kids are in regular old school and get free lunch. Right now, I'm planning to stay in Las Vegas, though I'm not sure where we're going to move. My church might have to help me. I might have to move in with my parents. Because of the heaviness of what's happened over the last several years with the economy, nobody has good finances anymore. I'm just going to have to do what a lot of families are doing and that's move in together, stick together and just help each other."

Looking Ahead

Juliette is also starting to earn money as a personal trainer, and is exploring the possibility of writing a book or doing some sort of reality television program. "If there's a will, there's a way, because my kids have to go to college. I will knock on a million doorsteps to get my kids to college. I mean, that's my responsibility."

So far, that's just what she's done. This fall, her oldest son, Kohl, enrolled in college with the help a mix of government grants and assistance from Juliette's church. "The FTC came and took our piano. Well, my son is a pianist, he's a piano major in college, and he has spent the last four years pouring his guts out on the piano and he says 'Mom, they're taking the one thing that means something.' I said 'You know what, let them take the piano. You've got the talent. It's in your head, your heart, your fingers, so you take that to school and you touch people's lives with it.' And that's what he's doing."

She pauses for a moment, then adds, "It's me and my kids. That's our team now. We're going to stay together. I'm the coach, that's my team, and we'll handle this stuff the best we can."

Loren Berlin is a reporter with the AOL Huffington Post Media Group. She can be reached at loren.berlin@teamaol.com, on Twitter at @LorenBerlin, and on Facebook.