A Cape Coral man has received 18 months in federal prison for charges connected to a $4.2 million mortgage fraud conspiracy that involved the police chief's son.
Steven Reese, 32, pleaded guilty in March to one count of conspiracy to commit bank fraud and wire fraud and one count of money laundering in a plea deal with federal prosecutors. On Monday, U.S. District Judge Charlene Honeywell sentenced Reese to 18 years for each count.
The sentences will run concurrently, according to the U.S. Clerks Office.
Reese received 24 months of supervised release for each count, and those will run concurrently as well. He also faces 50 hours of community service.
Reese must surrender to the U.S. Marshals Service within 30 days.
Attorney Lee Hollander, who represented Reese, explained that the sentencing was "substantially lower" than where the guideline scored his client. Reese is "very pleased" with his sentence because the guideline scored him at 37-46 months, Hollander said.
"I thought that the sentence was appropriate in light of what he did," he said. "He was never arrested before and he will probably never be arrested again."
Federal prosecutors took the lower than expected sentence in stride.
"We certainly respect the judge's order and we're looking at it," Karin Hoppmann, a spokeswoman for the U.S. Attorney's Office, said. "These crimes certainly have a catastrophic effect on our local and regional economy, and we will continue to press for sentences that reflect that."
According to Hollander, Honeywell "came up with a fair sentence" after considering everything, including Reese's "good works" in the community.
"He's done a lot with kids in Cape Coral who are underprivileged," he said. "He's done a lot to try and help them get straight and stay straight."
According to court documents, Reese took part in a "cash-out" mortgage fraud conspiracy in the Cape with a group of individuals that included Stephen Petrovich, 35, a former detective with the Cape police and the son of Police Chief Rob Petrovich. Former CCPD Sgt. James J. O'Brien was also charged.
The mortgage fraud scheme took place from 2007-08 and involved eight properties in the Cape, according to court documents. The group reported "inflated sales prices to lenders and falsified applications for loans based on the higher prices, then pocketed the excess loan proceeds at closing."
Petrovich, of Cape Coral, pleaded guilty with Reese to the same charges in a deal with federal prosecutors and was scheduled for sentencing on Monday. It was postponed until July 6, the U.S. Clerks Office reported. O'Brien, who was facing one count of loan and credit application fraud, pleaded guilty in May.
O'Brien's sentencing is scheduled for Aug. 9. The charge against him carries a maximum sentence of 30 years in prison and a fine of up to $1 million.
The others charged in connection to the mortgage fraud scheme are:
- Ryan O'Brien, 34, of Cape Coral
- Tyler Forrey, 28, of Cape Coral
- Troy Bossert, 32, of San Antonio, Texas
Each have pleaded guilty to one count of conspiracy to commit bank fraud and wire fraud and one count of money laundering in a plea deal with federal prosecutors. Ryan O'Brien's sentencing is scheduled for Monday and Forrey is scheduled for sentencing on July 26, according to the U.S. Clerks Office.
Bossert's sentencing is scheduled for July 19, but a motion to continue was filed on June 10. The judge had not ruled on the motion as of Tuesday.
According to court documents, the charges of one count of conspiracy to commit bank fraud and wire fraud and one count of money laundering carry a maximum sentence of 30 years in federal prison and fines up to $500,000.