Feds Say Steve Clary Not Entitled to Leniency

As faithful Whispers readers will recall, bankrupt real estate developer Steve Clary has asked for a lenient sentence for his admitted misuse of a bank loan.

Clary and his public defender, Lisa Peters, argued that the May 2008 incident, in which he diverted some $1.3 million from a loan for customizing buses to shore up other business interests, was a “misstep in judgment,” a “momentary lapse in judgment” and a “mishap.”

And their brief repeatedly pointed out to U.S. District Judge J. Leon Holmes that the size of the diversion was small compared with Clary’s net worth, which was estimated at $92 million less than six months earlier.

Now federal prosecutors are on record as opposing any leniency in Clary’s case, in which the federal sentencing guideline suggests 33 to 41 months in prison.

For one thing, Assistant U.S. Attorney Angela Jegley wrote, “Even if Clary’s previous net worth far exceeds the amount of the fraud in this case, that does not entitle him to a variance from the guideline range. Clary cites no case which supports that proposition.”

Clary might be entitled to leniency if the crime to which he pleaded guilty was “a single criminal occurrence … which did not involve significant planning” and “represented a marked deviation … from an otherwise law-abiding life.”

But, Jegley said, neither of those things is true.

The diversion of proceeds from the Bank of America Leasing Corp. loan involved numerous transactions over the course of at least 54 days. “On these facts and based upon the law, it cannot seriously be argued that there was a singular criminal occurrence or criminal transaction. Nor in these circumstances can it be seriously argued that the crime was committed without significant planning,” Jegley wrote.

What’s more, the federal prosecutor reminded the court, Clary is separately charged in a Georgia state court with “theft by taking” for similarly diverting part of another bank loan in July 2008.

“Thus, the facts of the [federal charge] before the Court cannot have been a marked deviation from an otherwise law-abiding life,” Jegley wrote.

The theft charge in Georgia, to which Clary pleaded not guilty three years ago, has been stalled in favor of the federal charge in Little Rock. Clary made a deal with the feds, pleading guilty in February to a single count of mail fraud. Four counts of wire fraud were dismissed.