Judge sentences O'Hara woman to 6 years in fraud where prosecutors asked for 24
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A federal judge today sentenced an O'Hara woman to six and a half years in prison for wire fraud conspiracy and money laundering, after criticizing the prosecution for seeking a 24-year sentence.
The sentence sparked a spirited debate between a judge and prosecutor that was unusual for the staid world of federal court.
Vasilia Berger and her estranged husband Jay Berger headed Blawnox-based Steel City Mortgage Services Inc. In Mr. Berger's case, prosecutors found that federal sentencing guidelines suggested a sentence in the range of six and a half to eight years.
Because he cooperated with their investigation, he was sentenced to just 15 months in prison.
Mrs. Berger did not cooperate, prosecutors said, and new information about the losses sustained by her victims and her role indicated a sentencing guideline of around 24 to 30 years in prison.
U.S. District Judge Joy Flowers Conti said she found it "very troubling" that some defendants in mortgage fraud cases would be "given such a big break by the government" while Mrs. Berger would face a potential decades-long sentence.
Federal judges are required to calculate sentencing guidelines, which in fraud cases are based largely on the amount of money the victims lost, the criminal history of the defendant and enhancements for things like the sophistication of the scheme and the leadership role of the defendant.
Prosecutors have some control over which enhancements judges consider.
The guidelines are not binding on judges, but if judges deviate from them, they must explain why.
The lengthy sentence the prosecution sought in Mrs. Berger's case was based in part on the loss by financial institutions of around $6.7 million due to Steel City Mortgage's use of inflated appraisals and other false information in justifying loans, many of which failed.
Assistant U.S. Attorney Brendan Conway argued that there were more than 250 victims of the scheme.
Judge Conti said the government bumped up Mrs. Berger's guidelines through the use of enhancements which weren't applied in Mr. Berger's case, even though his conduct was the same as hers.
In effect, the judge said, the prosecution gave Mr. Berger a variance from the guidelines without going through the court process by ignoring potential enhancements -- just because he cooperated.
"These factors that so dramatically increased the guideline range for Mrs. Vasilia Berger had to have been known to the government at the time Jay Berger was sentenced" in September, Judge Conti said. "In other words, the government engaged in conduct that was effectively the same as guaranteeing that certain downward [sentencing] variances would be granted" to Mr. Berger.
"I cannot countenance that," she said.
Mr. Conway said that he entered into a plea agreement with Mr. Berger in 2008 -- he was sentenced in 2012 -- but subsequently learned more about the scheme, including that the Bergers had earned more than $1 million through the fraudulent loans they arranged.
The existence of the plea agreement, he said, prevented prosecutors from seeking to add sentencing enhancements to Mr. Berger's case.
"You're assuming all of this almost bad conduct by the government when we really just didn't see" the potential enhancements at the time that Mr. Berger entered into a plea agreement, Mr. Conway told the judge.
He said that by imposing a sentence on Mrs. Berger about 18 years less than the guidelines called for, Judge Conti was granting "the largest variance [from the guidelines] I've ever heard about or seen in the history of the guidelines, since 1987."
It would discourage defendants from entering into plea agreements, he said.
"You can take this up on appeal, Mr. Conway," Judge Conti said.
Mrs. Berger's defense had focused largely on the challenges of finding an appropriate guardian for her six-year-old daughter. Mr. Berger will be released next year, but he has advanced cancer.
Judge Conti gave Mrs. Berger until April 30, 2014, to make arrangements for her daughter. Then she must report to prison.
Judge Conti also ordered Mrs. Berger to join other defendants and pay $871,669 in restitution to PNC Mortgage.
First Published March 5, 2013 12:53 am