Crime

County District Attorney's Office challenges reduced charges in fraud case

A pair of North County lenders charged with defrauding clients of up to $8 million could avoid jail time under a plea deal struck during their jury trial. However, the San Luis Obispo County District Attorney’s Office announced Thursday that it plans to challenge a judge’s decision to reduce their convictions from felonies to misdemeanors.

“I can’t think of any scenario where a case with $8 million claimed in restitution could reasonably be considered misdemeanor conduct,” said District Attorney Dan Dow.

Rodney Virgil Jarmin, 75, and Tammy Marian Jordan, 53, were each charged in May 2011 with seven felony counts of selling securities by means of false statements or omissions, with five enhancements.

As attorneys were selecting a jury for their trial Wednesday afternoon, the defendants agreed to plead guilty to all seven charges, Dow said. Then, Superior Court Judge Donald Umhofer reduced the charges to misdemeanors and dismissed the enhancements.

Pierre Blahnik, Jordan’s attorney, could not be reached for comment Thursday. Robert Sanger, who represents Jarmin, said he could not comment on a pending case.

The prosecution did not object to the reduction at the time. 

However, the District Attorney’s Office met with Umhofer and the defense attorneys in the judge’s chambers to discuss the reduction Thursday. The prosecution is expected to formally file a motion challenging the decision Friday afternoon, said Assistant District Attorney Lee Cunningham.

Attorneys on both sides have ordered transcripts of the plea hearing to determine how the plea occurred.

The defendants were stakeholders in Real Property Lenders, a mortgage loan brokerage business that solicited lenders and borrowers for high-interest loans secured by real estate.

“Hard money” lenders provide money to borrowers more quickly than banks but at higher interest rates, typically about 12 percent to 14 percent. The lenders pool investor money into securities backed by real estate deeds and are considered a high-risk/high-return investment.

According to a circular filed with the Department of Corporations in 2007, Real Property Lenders had more than $55 million worth of real estate loans. 

In 2009, the state’s Department of Real Estate accused Jarmin and Jordan of misrepresenting facts, fraud and dishonest dealings.

After a local investigation, the San Luis Obispo District Attorney’s Office charged them with the seven criminal counts in May 2011. According to the prosecution, the pair acted illegally when they failed to disclose to investors that the builders they had worked with had defaulted on loans and that previous investors had not been paid dividends.

The defendants have also been targeted with multiple lawsuits with allegations that included misrepresentation, fraud and breach of contract. After they were arrested, their assets were frozen, according to civil court records, and have remained frozen pending criminal charges.

Under the plea, according to court records, Jordan would have to pay $7,500 in restitution. Jarmin would have to pay $107,200 in restitution. 

The District Attorney’s Office says restitution should be $8 million to roughly 100 victims.

Opening statements in the trial were expected to begin next week. The trial was expected to last until July or August.

  Comments