Federal judge stuns courtroom with probation sentences in $5M mortgage-fraud case
A federal judge stunned five defendants in a Sacramento, California, mortgage fraud case and their lawyers Tuesday by imposing probation sentences instead of the multiyear prison terms sought by the prosecution.
“Our jaws just dropped,” attorney Mark Reichel told the Sacramento Bee. Although defense counsel argued that the five were small fish in a scheme operated by others, “I was convinced they were all going to prison.”
The defendants, who are all members of a Russian immigrant family, were convicted of wire fraud charges in May after a jury trial. The government said Reichel’s client, flooring contractor Daniil Markevich, 38, falsified documents to purchase two homes he couldn’t afford. Lenders lost $573,500 after the homes went into foreclosure and were sold at a loss.
Prosecutors contended that defendants in the case were paid hundreds of thousands of dollars to participate in a mortgage fraud scheme as straw buyers, taking out some $5 million in loans, the newspaper reports.
Reichel said the defendants are “still in shock” at their sentences, and notes prosecutors seemed to be surprised, too. “I think there was shock among everyone because the government kept arguing that the judge was wrong and that they needed to go to prison.”
The U.S. Attorney’s office declined to comment when contacted by the Bee.
Attorney William Portanova, a former federal prosecutor who apparently did not represent any of the defendants being sentenced, called U.S. District Judge John Mendez an “independent thinker.”
Portanova told the Bee that the judge had sentenced defendants in a related case less than a month ago to prison terms of eight to 19 years concerning a $16 million mortgage fraud.
A news release by the U.S. Attorney’s office for the Eastern District of California provides sentencing details in what appears to be the case referred to by Portanova. It says the case involved 35 Sacramento area homes purchased in a straw buyer scheme with $26 million in loans. Lenders lost about $16 million, in what Mendez called a “significant fraud.”
In Tuesday’s sentencing, however, Mendez apparently had a different perspective. According to Reichel, “The judge walked out and said, ‘You know, the government’s going to disagree with me, I know that, but this is wrong and none of these people should be going to prison.’ ”
Ankle monitors will be required for at least some of the defendants on probation, the Bee reports.
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