A federal judge has accused Las Vegas U.S. Attorney office prosecutors of “pretty much” compelling a bit player in a large mortgage fraud scheme to plead guilty by posing the threat of a trial and possible prison sentence.
The judge, Roger L. Hunt, used that conclusion to deny the government’s attempt to require defendant Jenna Depue to forfeit more than $76,000 in salary she earned while working for her brother between 2005 and 2007. Hunt sentenced the brother, Brett Depue, to nearly 22 years in prison in June for masterminding a mortgage fraud conspiracy that brought him $13 million in illicit gains through the purchase of 102 homes using straw buyers who lied on mortgage applications about their income.
Jenna Depue was one of nine people who pleaded guilty in the conspiracy, admitting to one count of conspiracy to commit mail, wire and bank fraud. She was sentenced to time served and three years of supervised release. Hunt called her the “star witness” against her brother in two trials, the first of which ended in a mistrial.
Prosecutors said Jenna Depue helped her brother find properties, flip them, and acted as a straw buyer. She answered a special cell phone number given to her by her brother for an entitity called Mauzzy Management, which she knew was fictional and had no employees, the government said. She falsely told lenders’ representatives that straw buyers worked there in order to represent them as having the income necessary to qualify for loans, prosecutors said.
Hunt, however, said he believed Depue was more a victim than a perpetrator, intimidated by her brother into doing things she knew were “morally wrong” but didn’t realize were illegal.
His criticism is resonant of the debate about whether prosecutors use too much pressure to force defendants to accept plea agreements, embodied by the furor over the death of Internet activist Aaron Swartz. Swartz committed suicide this month while negotiating with Massachusetts U.S. Attorney Carmen Ortiz’s office over hacking charges.
Hunt wrote in an order dated Jan. 10: ”The United States is basing its forfeiture claim against [Depue] on these ‘admissions’ knowing that she was pretty much compelled to admit to them or face a trial and possible lengthy prison term. This for a person who has never been in trouble in her life” and who friends “almost considered a saint.”
Brett Depue defended himself at trial before Judge Hunt. At sentencing, he blew a kiss to family members in the audience and showed no remorse, according to the Las Vegas Review Journal, denouncing his conviction as a “travesty of justice” and vowing to expose to the media those who had “schemed” against him. He also claimed he had survived five poisoning attempts against him while in federal custody.
Prosecutors said in a court filing that Hunt’s analysis of Jenna Depue’s case was full of “significant factual and legal errors.”
After the forfeiture order against Jenna Depue was denied last year, the U.S. appealed to the Ninth Circuit Court of Appeals, which remanded the case to Hunt for further analysis under the Ninth Circuit’s 2011 decision in U.S. v. Newman.
The Newman decision concerned the definition of “proceeds” from a fradulently obtained loan. The appeals court left it up to district judges to decide whether a defendant’s stipulations in his or her plea agreement were sufficient to support the government’s definition of “proceeds” from a crime that must be criminally forfeited.
Hunt said Jenna Depue received no “proceeds” from her brother’s crimes but only a “meager salary” that the government should not ask her to give up after she cooperated extensively in their case.
“Other actual co-conspirators, who cooperated, but whose testimony was not used in the second trial because they made such terrible witnesses in the first trial, were treated better by the government than Jenna has been,” Hunt wrote in his Jan. 10 order.
“Their actions toward their star witness in this case is the most egregious miscarriage of justice I have experienced in more than twenty years on the bench. I refuse to be a party to it,” the judge wrote.
The Las Vegas U.S. Attorney’s office is led by Dan Bogden. The Assistant U.S. Attorney who signed Jenna Depue’s 2010 plea agreement was Brian Pugh. The office’s appellate chief Robert L. Ellman led the appeal.
The case number for U.S. v. Jenna Depue is 2:10-CR-109 in federal district court for the District of Nevada.