Co-defendant's guilty plea to filing a false statement accepted by court
Photo for Headline Surfer® / James Sotolongo and Ramara Garrett and his longtime live-in girlfriend, Ramara Garrett, parents of a 9-month-old baby, are among four defendants accused of mortgage fraud involving seven homes in Volusia County valued at $13 million, according to a federal grand jury indictment. The other two accused are Christopher Mencis and Stephanie Musselwhite, shown in the inset.ORLANDO -- A federal judge rejected -- at least for the time being -- a guilty plea for James Fidel Sotolongo that would have capped his prison sentence at five years in a deal negotiated with the U.S. Attorney's Office that had him copping to only one of 13 counts in a grand jury indictment.
Count 1 of conspiracy would have tied him into admitting his role in scheming to defraud in all seven properties for which the government alleges loans from lending institutions for seven medium- to high-end properties were fraudulently obtained with mortgages totaling $13 million.
Earlier in the morning, co-defendant Christopher Mencis, a mortgage broker allegedly tied to the conspiracy to defraud, pleaded guilty to a single count of filing a false statement. A second conspiracy count was dropped.
Mencis conceivably could receive a sentence of up to 30 years in prison for the one count still hanging over his head, though sentencing guidelines call for a range of six to eight years.
U.S. District Judge Roy B. Dalton, Jr. accepted Mencis' plea, after which the accused went out of his way to shake hands with the prosecutor and her two assistants.
U.S. District Judge Roy B. Dalton, Jr. accepted Mencis' plea, after which the accused went out of his way to shake hands with the prosecutor and her two assistants.
Co-defendant Mencis overt in friendliness to government after guilty plea deal accepted by judge
There's a reason for Mencis' overt friendliness to to other side, even as he's looking at considerable time behind bars: As part of the plea agreement, Mencis must cooperate with the government as a "martial witness" meaning he'll be required to provide testimony that could lead to convictions for one or more of the three remaining defendants at trial -- Sotolongo, Sotolongo's live-in girlfriend and mother of their 9 month-old baby; and Stephanie Musselwhite.
And should the prosecution prevail against the remaining three, Mencis' testimony for the government, it could weigh in his favor when he is sentenced. His sentencing will not occur until the three remaining defendants have their day in court.
But when in came to Sotolongo's turn in the back-to-back hearings, the judge's stunning rejection of five years capped in exchange for a guilty plea, took both the government and the defense by surprise, which puts the entire case in another realm.
That's because first, the judge's decision could show bias against the defendant since he expressed contempt for the five-year cap as too lenient, considering the extent to which Sotolongo was described in the indictment as the alleged mastermind of the mortgage fraud scheme to defraud.
And second, it puts the government in a bind because the prosecutor is going to have a tough time convincing a jury that Sotolongo is as culpable since she as willing to cut him such a generous plea deal.
Judge concerned whether negotiated plea 'accurately covers' scope of allegations
The judge expressed concerns about the sanctity of the negotiated plea, questioning in part as to whether it "accurately captures" the extent of Sotolongo's alleged involvement in the mortgage fraud scheme as the government contends in the indictment that names him in 13 of the 14 counts.
Lead prosecutor Tonya Wilson told the judge she believes that by virtue of Sotolongo's willingness to plead out to count 1 -- the conspiracy charge -- that this would tie him to all the properties involved and make him culpable, including restitution which has yet to be defined by the government.
Though Judge Dalton rejected the plea, before leaving the bench he said he would reflect on it further and get back to the parties if he has a change of heart.
Otherwise, Sotolongo is scheduled to go to trial on March 17, and his initial "not guilty" plea remains in place, unless the judge signs off on the plea agreement negotiated between the two sides or a jury were to find him guilty at trial on one or more of the 13 indictment counts.
The only count to which Sotolongo is not named in the indictment is the one that Mencis agreed to plead guilty to and that was count 13, tied only to Mencis.
Each of the 14 counts carries up to 30 years, though one or more counts in a conviction would not mean a sentence of more than 30 years as multiple counts in this case would be considered "concurrent" as in running together and not "consecutive," which would have them stacked.
Sotolongo's 13 counts is the most in the indictment, followed by Stephanie Musselwhite, a title insurance specialist, named in 12 counts; Garrett in two counts and Mencis in two as well, though now he he's officially linked to a single count by virtue of the judge accepting his plea.
What may very well have been the basis for the judge's rejection of the Sotolongo plea -- at least for the time being -- was when he asked prosecutor Wilson if Sotolongo would be a material witness for the government against the other two defendants -- Garrett and Musselwhite.
"No," Wilson conceded.
Regardless, after the hearing, Sotolongo's Miami-based attorney, John Bergendahl, told Headline Surfer® that one of two things could happen:
1. The judge could accept the plea negotiated by the government and his representation of Sotolongo, which means a sentence of no more than five years in imprisonment;
2. Sotolongo goes to trial with the burden of proof squarely on the shoulders of the government while he maintains his innocence.
While it appeared the case would be winding down with only Garrett and Musselwhite remaining, should the judge not change his mind, Sotolongo would make for three co-defendants all on trial at the same time. But this may not end up being the case, even if the judge doesn't change his mind on Sotolongo's plea offer.
There's a distinct possibility for "severing" or splitting up the defendants into multiple trials. That's because there may be a conflict between Garrett's attorney and Musselwhite over a past unrelated investigation.
Neither Garrett nor Musselwhite have criminal records. Both have pleaded not guilty to the federal charges against them.
Neither Garrett nor Musselwhite have criminal records. Both have pleaded not guilty to the federal charges against them.
Multiple investigations ongoing, but only federal case has any teeth
Sotolongo and Garrett are principals in Waverly Media, a park bench company based in Port Orange that provides signage on the upper part of the benches for local businesses. Waverly Media shares a portion of the proceeds with several municipalities where the benches are located in Volusia County.
While the mortgage fraud scheme was investigated by the FBI, the State Attorney's Office in Daytona Beach began investigating Waverly Media last year over discrepancies in the extent of in-kins advertising on benches in the 2012 elections.
Photo for Headline Surfer® / Only one person has been convicted in the state case -- former Waverly principal Jim Brown, no longer with the company who was sentenced to five years of probation in pleading no contest to exceeding campaign contribution limits. Though the investigation remains open, no other parties are expected to be prosecuted and no subpoenas were ever issued to Sotolongo nor to Garrett.
It's expected the state and the FBI will closes their respective cases once the remaining cases in the alleged mortgage fraud scheme have concluded in the U.S. District Courthouse in Orlando.
There is yet another investigation, though this one is widely seen as political. The Volusia County Council in a 4-3 vote agreed to hire attorney Jonathan Kaney, Jr., and his attorney colleague Noah McKinnon to investigate the county's role in Waverly Media as it relates to the election and ongoing services until the contract was ended by the county last winter.
Though Kaney was given subpoena power, whether it will force anyone to answer his or McKinnon's questions remains unanswered. Neither the State Attorney's Office nor the FBI will cooperate in the County Council investigation. County Attorney Dan Eckert has gone on record with the County Council that he doesn't believe Kaney has the authority to force anyone to answer his questions. -- subpoena or not.
Though Kaney was given subpoena power, whether it will force anyone to answer his or McKinnon's questions remains unanswered. Neither the State Attorney's Office nor the FBI will cooperate in the County Council investigation. County Attorney Dan Eckert has gone on record with the County Council that he doesn't believe Kaney has the authority to force anyone to answer his questions. -- subpoena or not.
It was pushed by first-term Council member Doug Daniels who said it was necessary to "lance the boil" over potential questions of favoritism of politicians, a view not shared by Council at-large member Joyce Cusack, who termed the investigation a "witch hunt."
County Chair Jason Davis,, also on the losing end of voting against the investigation said it reeks, describing it as "duplicitous" with what the State Attorney's Office is already doing and because Kaney and Daniels are former law partners.
Daytona Beach News-Journal hasn't answered complaint by defense attorney alleging 'inflammatory and adverse articles'
Furthermore, Musselwhite's attorney, Richard Klugh, has filed a motion last Thursday with the clerk of the court that asks the judge to consider having prospective jurors questioned individually as to what they may know about the case rather than in groups or even a change of venue.
This is because of what defense counsel Klugh described as biased coverage by the Daytona Beach News-Journal, stating further that his client's right to a fair trial could be compromised by exposure to potential jurors of the daily newspaper's "inflammatory and adverse articles published in print and on the Internet."
This is because of what defense counsel Klugh described as biased coverage by the Daytona Beach News-Journal, stating further that his client's right to a fair trial could be compromised by exposure to potential jurors of the daily newspaper's "inflammatory and adverse articles published in print and on the Internet."
Headline Surfer® reported Klugh's memorandum in a story published just after 2 p.m. Monday. Messages left for News-Journal Editor Pat Rice and reporter Lyda Longa by the internet newspaper have gone unanswered.
The News-Journal did not respond to the internet newspaper's inquiries regarding the accusations made by Klugh. And though the News-Journal had a story for today's print and online readers announcing the back-to-back stories, the newspaper has not even acknowledged Klugh's motion.
As of 3:30 p.m,. today, the News-Journal hadn't yet even reported on today's proceedings from the U.S. District Court in Orlando.
Previous Related Coverage:
Attorney: Daytona paper's fed court reporting of mortgage fraud case crosses the line in putting client in bad light
Waverly Media benches eye catching in Daytona, Deltona, DeLand, Edgewater, Holly Hill, Port Orange & New Smyrna