Federal judge in Daytona mortgage fraud case has bank ties with key gov't witness/unindicted co-conspirator

Legal sources: Clear cut conflict of interest for jurist who may be forced to recuse himself from presiding at trial that begins Tuesday

US District Judge Roy Dalton bio / Headline Surfer®US Disrict Judge Roty B. Dalton, Jr. / Headline Surfer®Ramara Garrett and James Sotolongo / Headline Surfer®Photos for Headline Surfer® /
The big question heading into the trial for Jim Sotolongo and Ramara Garret, shown in the inset, is whether U.S. District Judge Roy B. Dalton, Jr., shown at far left, will be presiding.
 

ORLANDO -- Before he was nominated by President Obama and his appointed ratified by the U.S. Senate in 2011 for a federal judgeship in the Middle District of Florida, Roy B. Dalton, Jr.,was a member of the board of trustees for the Orlando-based Seaside National Bank& Trust for four years before laving to assume his position on the bench.

Now it's Judge Dalton's past that could impact his present standing with less than a week before jury selection begins Tuesday in U.S.  District Court in Orlando in the high-profile mortgage fraud conspiracy trial for Daytona Beach-area resident James Fidel Sotolongo, his longtime companion, Ramara Garrett and mother of their 10-month-old baby; and business associate Stephanie Musselwhite.

And that's because one of the government's key witnesses against the trio is an unindicted co-conspirator by the name of Sidney Coton of Deltona.

Coton, who has already pleaded guilty to a single count in the fraud conspiracy case had financial issues tied to Dalton's bank while the future jurist held key posts there as director and financial chair on the credit police committee.

Headline Surfer® uncovered the connection during an exhaustive review of online public records searches during the past several weeks of the key players in the trial.

Whether Dalton was aware of a connection -- directly or indirectly -- with Coton, who has been hauled into court in Volusia County by nearly half a dozen lending institutions in property foreclosure lawsuits topping $2 million, is immaterial.

Sidney Caton is an unindicted co-conspirator / Headline Surfer®Photo for Headline Surfer® / Sidney Coton, shown here at left in a jail mug, pleaded guilty to a single count in the 14-count indictment handed up in federal court in the government's case against several people named in a mortgage fraud conspiracy case that allegedly shortchanged banks and lendingf institutions on seven residential properties totalling $13 million in the greater Daytona Beach area.
Coton is listed in the indictment as an unindicted co-conspirator and a key prosecution witness for the government after agreeing to plead guilty last November and have his sentence capped at no more than five years. Headline Surfer® discovered Caton has past ties with the bank that U.S. District Judge Roy Dalton, Jr., was a trustee for before he won U.S. Senate appointment to the bench after being nominated by President Obama in 2011.
 

That's the consensus of several prominent attorneys and other well-placed judiciary sources in Daytona Beach, DeLand and Sanford, who agreed to provide insight and analysis on the reporting uncovered by Headline Surfer® after receiving assurances their names and positions would never be publicly divulged under any circumstances for obvious reasons.

"This is a clear-cut conflict of interest for this judge who may be forced to recuse himself from presiding at the trial, even if he didn't have any direct prior knowledge or awareness of this government witness during his tenure as a trustee with this bank in Orlando," a source said.

Another source agreed, adding, "Whether he knew the guy or not -- it really doesn't matter, especially at this point and with the adverse coverage this will generate a week before beginning the pains taken process of picking a jury."

A third source said, " Even if the judge has a strong legal foundation, based on what you've already described with the interaction between this judge and the prosecutor and and the lead accused defendant, even the appearance of alleged impropriety is something no judge is going to want to be a part of. "

The source added, "Think of it like this: This is a conspiracy case involving millions of dollars in middle- to high-end properties and this judge had served as a bank trustee. You don't think the resentment is going to come through somehow?"

Headline Surfer® wrote to the judge in an email 3 p.m. Monday to give him a chance to respond to the internet newspaper's reporting, but it went unanswered. Here is what the email stated:

Dear Judge Dalton,  

I have obtained information through a combination of public records searches and sources, the latter of which is privileged. Nonetheless, what I have discovered leads me to believe there may be some conflicts of interest in your presiding over the upcoming trial, United States vs. James Fidel Sotolongo, Ramara Garrett and Stephanie Musselwhite, all of whom stand accused of conspiring in a mortgage fraud scheme involving lending institutions as outlined in the superseding grand jury indictment in place of the original FBI complaint.

Judge Dalton, I write to you with the highest degree of respect as I've sat in your courtroom for some of the proceedings in this case and I've put a lot of effort into researching your background. With that said and with my opening concern regarding possible conflicts of interest, please allow me to elaborate:

-- My reporting indicates you were on the board of trustees for the Seaside National Bank, from 2006-2010, before your nomination to the bench by President Obama and your unanimous confirmation by the U.S. Senate, in 2011. This trial centers on scheming to defraud lending institutions, including banks.

With your tenure as a trustee with this Orlando-based bank, you undoubtedly have an understanding and appreciation from a bank's point of view in terms of protecting its assets from criminals and scoundrels. Is this possible grounds for recusal? And I am curious as to whether there is some kind of moral or ethical code in disclosing past potential conflicts being that this is a bank fraud case alleged by the government?

-- My second and more serious area of concern is the distinct possibility of a connection between a key government witness in the case against Sotolongo, Garrett and Musselwhite, and that is a Sidney Caton, an unindicted co-conspirator, who has already pleaded guilty to a single related count and could get up to five years in prison.

Caton was sued in circuit court in Volusia County by the Taylor Bean & Whitaker Mortgage Corp. in a foreclosure involving a $624,410.30 luxury condominium in coastal Ponce Inlet. Caton apparently has ties either directly or indirectly to your former bank. I'm still trying to sort out the details.

I wanted to reach out to you in the interest of fairness and as well as to the government and defense counsels, but I wanted my first communication to go to you. This is unchartered water for me, reaching out directly to a federal judge, but I am not certain of any other way.

Of course, I will exercise my First amendment right of freedom of the press in protecting privileged sources, but I do believe you have a right to know before I publish a story, and to respond, if you feel it is necessary or appropriate. I am planning to write my story at some point tonight, published by my media outlet, Headline Surfer®, and accessed via HeadlineSurfer.com.

Our editorial content is indexed automatically by Google News with placement in the search engines and news directories, typically within 5 to 15 minutes to a global audience.

This is an important story and out of respect for your position on the bench, I wanted to reach out to you in advance of publication. Again, you are welcomed to comment on what I've raised here, if you feel that is necessary or appropriate.

Sincerely,

Henry Frederick Publisher, Headline Surfer®
Award-winning 24/7 internet newspaper serving the Daytona Beach-Orlando metro area via HeadlineSurfer.com HenryFrederick@HeadlineSurfer.com or HenryFrederick3@yahoo.com
386-689-2830 
 

Assistant U.S. Attorney Tanya Wilson declined comment on the findings by Headline Surfer®, but she did ask for and received a copy off the internet newspaper's email to the judge late that night. Messages left for Sotolongo, Garrett, Musselwhite and their attorneys have gone unanswered as well.

Sotolongo was less than pleased after leaving Dalton's courtroom last month after the judge rejected a plea agreement reached between the government and Sotolongo's attorney that would have capped a sentence at five years in exchange for a guilty plea to two of the 13 counts leveled against him an a 14-count indictment handed up by a grand jury last year.

Asked then if he felt the judge had showed prejudice against him in rejecting the plea, Sotolongo said he couldn't comment on the advice of his attorney, but the look on his face spoke volumes.

Wilson, too, was taken aback, as shown on the expression on her face when Dalton told her he was not pleased with the plea agreement offered to Sotolongo, who faces a maximum of 30 years in federal prison if convicted.

“I have some concerns with the government dismissing the 30-year component” Dalton told the prosecutor. “My concern is that I'm accepting a plea that caps his sentence at five years.”

Henry Frederick Picture

Short Bio

Henry Frederick is publisher of Headline Surfer®, the award-winning 24/7 internet news covering the Daytona Beach-Sanford-Orlando metro area in Central Florida, via HeadlineSurfer.com. Specializing in breaking news & investigative reporting, Frederick is among the Sunshine State's most experienced reporters with dozens of journalism-industry awards in print & digital mediums. Frederick is enrolled online at Full Sail University in Winter Garden, FL, where he's pursuing a Master of Arts degree in New Media/Journalism (graduation in March 2018). Frederick earned his BA in Political Science/Public Admin. (concentration in Writing) from Central Connecticut State University, in 1984, where he recieved the President's Citation for "academic excellence & outstanding campus/community service." Prior to myriad duties as publisher/award-winning journalist of Headline Surfer, 2008-present; Frederick was city hall reporter for the Palatka (FL) Daily News, 2007-2008; city editor of the Taunton (MA) Daily Gazette, 2005-2006; cops & courts/legal affairs writer for the Daytona Beach News-Journal, 1996-2004; and cops & courts reporter for the Rockland (NY) Journal-News/Gannett Suburban Newspapers, 1989-1996.