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Crime News Snapped

Woman Had Her Husband Killed On A Lake Before News Of Her Embezzlement Could Break

Lori Isenberg seemed like a respectable pillar of her community, but she was secretly embezzling hundreds of thousands of dollars from her job.

By Benjamin H. Smith

People thought Larry and Lori Isenberg had the perfect marriage. One of them, however, harbored a dark secret that would lead to murder. 

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The couple met in Coeur d’Alene, Idaho, a vacation destination thanks to the lake of the same name it sits on. The area is also home to generations of families that made a living working as loggers and mill workers. Local boy Larry Isenberg was born in 1950. After graduating from the University of Idaho with a degree in forestry, he began working in the lumber industry. 

“Hard work was his mantra. You worked hard for what you wanted and you worked hard to get what you got,” former Kootenai County Sheriff Ben Wolfinger told “Snapped,” airing Sundays at 6/5c on Oxygen.  

Larry married his first wife in 1974 and had two children with her, Jessica and Dean. They divorced once their kids grew up. Soon after, he met Laurcene “Lori” Barnes at the Coeur d’Alene Chamber of Commerce. 

“She was good to people. I think that people were drawn to her because of her smile because she has kind of a giddy laugh,” friend Nancy Lowery told producers.

Lori Isenberg Spd 3006

Born in 1953, Lori grew up in a sect of The Church of Jesus Christ of Latter-day Saints. Her early life was marked by poverty, with her family sometimes squatting in empty farmhouses. She married Steven Barnes when she was 19 in 1973. They would have six daughters together, but they divorced in 1996. Afterward she relocated to Coeur d’Alene to raise her daughters as a single mother. 

Larry and Lori married in 2004. Dean Isenberg described them as having a “model” relationship, according to a 2020 report from The Washington Post. They enjoyed hosting their large blended family at their home, a secluded cabin 20 minutes southwest of town, which they called “our paradise.” 

By 2009, the Isenbergs were pillars of Coeur d’Alene, actively trying to help their community. Larry had retired but was still active with various civic groups and Lori was the executive director of the North Idaho Housing Coalition, which renovated properties to sell or rent to families in need. 

But at 10:25 a.m. on Feb. 13, 2018, the Kootenai County Sheriff’s Office received a 911 call from Lori Isenberg. She said Larry had fallen into Lake Coeur d’Alene while they were out on their boat, according to the Coeur d'Alene Press newspaper.  

“I need help. I’m on the lake but I don’t know where. My husband has had a stroke and he fell over ... I tried to grab him, I tripped and I ... I can’t find him, he fell overboard,” Lori is heard crying on tapes of the 911 call, obtained by “Snapped.”

Sheriff’s deputies arrived on the scene within minutes and found Lori alone in the Isenbergs' boat. She had a bloody nose which she claimed happened while she was trying to save Larry. 

Rescue teams fanned out across the lake but they feared Larry had already perished. The water temperature that day was approximately 38 degrees.

At that temperature, “you’re going to succumb to hypothermia or drown or both,” Wolfinger told producers. 

Back on shore, Lori gave a statement to authorities. She said she and Larry had gone out for a sunrise cruise before planning to get breakfast at a local restaurant.  

“He said the motor didn’t sound right. He just stood up and he sort of looked back at me and he just had this sort of blank look on his face,” Lori is heard saying on her taped statement, which was obtained by “Snapped.” “I saw him sort of stumbling and I jumped up and ... I banged my head ... I tried to grab him.”

Lori claimed she drove around for an hour looking for Larry in the freezing waters before the motor went out. Two hours would pass before she called 911. She said this was because she left her phone on shore, East Idaho News reported in 2021. She claimed to have subsequently found Larry’s phone on board and called in the accident.

Lori was friends with members of the local law enforcement agencies, according to a 2018 report from the Coeur d'Alene Press, and despite discrepancies in her statement, they did not initially consider her a suspect in Larry’s disappearance.

However, that same morning, the Coeur d'Alene Press reported that Lori was “no longer employed” by the North Idaho Housing Coalition. And an internal audit had been ordered by the coalition due to accounting irregularities.

An investigation would reveal that over the previous years, Lori had embezzled $579,495.75 from the North Idaho Housing Coalition. She had access to their bank accounts, limited oversight of her activities, and had submitted bogus invoices from companies set up in her daughter’s names and with their knowledge, according to the United States Attorney's Office for the District of Idaho

On February 27, 2018, Lori Isenberg was arrested on 40 counts of forgery and one count of grand theft, according to the Coeur d'Alene Press. Her $75,000 bail was posted by one of her daughters the following day.

A few days later, on March 1, the body of 68-year-old Larry Isenberg was spotted floating in Sun Up Bay near Worley, Idaho, according to Spokane, Washington, CBS-affiliate KREM.  

In May 2018, after missing two court dates related to her fraud case, a $500,000 warrant was offered for Lori’s arrest, according to weekly newspaper The Pacific Northwest Inlander. Isenberg was “on the lam” with bounty hunters in pursuit. 

While Lori was in hiding, the Kootenai County Coroner’s Office released the results of Larry Isenberg’s autopsy. It revealed he died from diphenhydramine toxicity after overdosing on the antihistamine Benadryl, reported Coeur d'Alene Press

Diphenhydramine causes drowsiness even at normal dosage levels, which are typically between 100 and 1,000 nanograms per milliliter. A staggering 7,100 nanograms of diphenhydramine were found in Larry's body at his time of death. 

“That pretty much sent the case into a full-fledged homicide investigation,” former Kootenai County Sheriff’s investigator Brad Maskell told producers.

After months on the run, in July 2018, Lori turned herself in. 

Dean told investigators his father would have divorced Lori had he known about her criminal behavior. In the week’s before Larry’s death, Lori had canceled the couple’s Coeur d'Alene Press subscription, knowing they were about to publish an article on her misdeeds. 

An examination of Lori’s computer found online searches for water depths, drownings, boating rentals, and boating accidents.

Investigators also learned that in January 2018, Lori had made handwritten changes to Larry’s will, according to KHQ-TV. The changes left 80 percent of Larry’s estate to Lori’s six daughters, leaving only 20 percent to his own two children.

A day after Larry’s death, on February 13, 2018, Lori sent an email to the North Idaho Housing Coalition, according to court documents obtained by KHQ.

“As you know by now, Larry and I had an accident yesterday,” Lori’s letter begins before begging for forgiveness and pledging to return the stolen funds. “I can pay all of it back as soon as I can sell my home,” she says at one point.  

In January 2019, Lori Isenberg pleaded guilty to three counts of wire fraud and one count of theft from a federal program. She was sentenced to five years in prison and ordered to pay a $20,000 fine, according to the Coeur d'Alene Press.

After pleading guilty to federal theft charges, Isenberg’s daughters — Amber Hosking, Jessica Barnes, Tracy Tesch, and April Barnes -— would be sentenced to a combination of house arrest and probation, and ordered to pay over $50,000 in fines. 

In February 2020, Lori Isenberg was formally charged with first-degree murder in the death of her husband, Larrry Isenberg. A year later, in February 2021, she entered an Alford plea to second-degree murder, professing her innocence but acknowledging she would likely be convicted should she stand trial, according to KHQ-TV.

At her sentencing on May 25, 2021, Lori Isenberg claimed that on the morning of her husband’s murder, she had prepared a poison drink for herself in order to die by suicide but that Larry accidentally drank it while she was asleep on the boat. If it was a play for leniency, her judge was unmoved and sentenced the 67-year-old to life in prison, with 30 years fixed, according to the Coeur d'Alene Press.

For more on this case and others like it, watch "Snapped," airing Sundays at 6/5c on Oxygen or stream episodes here.

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