Five defendants convicted in a multimillion-dollar mortgage fraud scheme last May walked into a federal courtroom in Sacramento on Tuesday morning expecting to be sentenced and packed off to years in prison.
With their families in tow, they gathered in the 14th-floor courtroom of U.S. District Judge John A. Mendez facing anywhere from three to 20 years in prison for their part in a scam that prosecutors say allowed them to obtain more than $5 million in home loans during the height of the housing boom that precipitated the economic collapse of 2008.
Instead, as their attorneys stood in shock, the judge declared that none would go to prison and sentenced them to probation and months of wearing electronic ankle monitors as they return to their daily lives.
“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,’ ” defense attorney Mark Reichel said afterward in an interview. “Our jaws just dropped. I was convinced they were all going to prison.”
The Sacramento region has been called “ground zero” for mortgage fraud crime, and prosecutors in the federal Eastern District of California based in Sacramento have made such cases a priority.
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One veteran Sacramento defense attorney – and former prosecutor in the U.S. attorney’s office – said the judge’s move was unusual, but not unheard of.
“That’s Mendez being Mendez; he’s an independent thinker,” said William Portanova, who said he witnessed a similar incident years ago in the judge’s courtroom when the government was pushing hard for a prison sentence to which the judge objected.
Portanova said federal sentencing guidelines have placed great power in the hands of prosecutors, who can convince judges to hand down sentences that would result in much less time in state prosecutions.
“The federal system has gotten out of control in terms of the sentences being handed down,” he said. “It attempts to result in a standardized system of justice as if justice itself were a McDonald’s cheeseburger.”
Portanova added that Tuesday’s decision by Mendez should not suggest the judge prefers light sentences. Two weeks ago, Mendez sentenced three defendants in a related $16 million mortgage fraud case to sentences of eight, 11 and 19 years, respectively.