This week, the case of a South Florida fraud defendant serves as a reminder of the need to consult carefully with experienced counsel at every step of a government investigation. Although the defendant tried to plead guilty to the government's charges and asked to remain free on bail until sentencing in February, the judge sent him to jail immediately. This decision involved a separate civil case against the same defendant.
The defendant faced securities fraud charges after the government alleged that he ran a phony investment scam. According to the government, the defendant solicited $11 million from investors in exchange for shares in prestigious companies like Facebook and Groupon. The shares did not actually exist and the defendant funneled the money through escrow accounts and into his personal bank accounts. The government charged him with conspiracy, wire fraud, securities fraud, and money laundering.
In a plea deal, the defendant tried to admit guilt to all four charges but the judge did not immediately accept his plea to money laundering. Although the defendant cooperated with the prosecution and made a plea deal, the judge took a harsher stance and refused to accept all of the pleas or allow the defendant to post bail.
Instead, the judge referred to the defendant's explanation for why he missed an earlier scheduled hearing as "pathetic" and ordered the defendant jailed until a February sentencing hearing. The judge apparently was concerned that the defendant did not obey orders from another court in a separate civil case. The defendant allegedly sold a car and transferred money to his mother. This motivated the judge's decision even though the violations involved a completely separate civil matter.
While the plea deal shows that the government and the defendant expected that his sentence would likely be around 10 to 12 years, the judge is not obligated to agree. Given the judge's reaction to the plea deal itself, it is very possible that the judge could impose a much harsher sentence.
Source: Bloomberg, "Florida Man Pleads Guilty to Phony Facebook Share Scam," Oct. 2, 2012