A judge's refusal to accept a plea bargain that would have guaranteed probation for Gary Alan Rickenbach led the former senior executive vice president at One Bank to negotiate a new agreement Friday that calls for an eventual sentence reduction in exchange for his cooperation with federal prosecutors.
The earlier agreement, which was conditioned on the judge agreeing to accept it, called for Rickenbach to receive two years' probation for pleading guilty to a charge of misprision of a felony, or knowing about a crime but failing to report it. He had earlier faced charges of conspiracy, bank fraud, aiding and abetting a false bank entry, and making a false statement, which were punishable by up to 20 years in prison if convicted.
U.S. District Judge Kristine Baker said in a hearing Friday that she entered a sealed order in which she explained her reasons for rejecting the plea. After consulting with attorneys in the courtroom, she said she would unseal the order, but it remained sealed late Friday afternoon. In court, Baker said one of her reasons was "the adequacy of the charge."
The new agreement, which Baker accepted, also called for Rickenbach to plead guilty to misprision in connection with false bank entries made to disguise from federal regulators a bad $1.5 million line of credit that Rickenbach approved in 2007 but that was never repaid. The misprision charge is punishable by up to three years in prison and a fine of up to $250,000. But unlike the first agreement, the new agreement doesn't require prosecutors to recommend a specific sentence.
The judge also agreed Friday to a two-week delay of the trial of Rickenbach's co-defendants, who are also former executives at the bank. The trial of Michael Francis Heald and Bradley Stephen Paul on charges of conspiracy and making false bank entries, in connection with the same bad loan, was scheduled to begin Monday but will now begin July 25.
A prosecutor revealed during a hearing Friday that Heald and Paul also had been offered an opportunity months ago to plead guilty to the greatly reduced charge of misprision but rejected the offer.
The case against all the men stems from when they worked under Layton "Scooter" Stuart, One Bank's chairman and chief executive officer who died in March 2013, shortly after he resigned under pressure from federal regulators. The government sued his estate after his death in an effort to seize nearly $18 million of his assets that they said constituted the "fruits and derivatives of criminal activity."
The case has been partially settled.
Rickenbach's plea agreement states that Stuart directed Rickenbach and others "to fix the bad loan problem" by disguising it and a related default judgment as having been sold to a "viable entity" which produced a "positive monetary return" to One Bank.
Alberto Solaroli, who received the $1.5 million line of credit that prosecutors said he used, in part, to buy two Porsches and to repay a $300,000 debt, is serving a year and a day in federal prison after pleading guilty to a money laundering charge in connection with a $120,000 wire transfer from One Bank to a Florida bank. Solaroli lived in Jacksonville, Fla., at the time.
Meanwhile, a motion for "much needed relief" filed Thursday by attorneys for Heald and Paul fizzled out during Friday's hearing when the judge said she wasn't sure exactly what they wanted, nor was she sure they had legal standing to raise objections to Rickenbach's plea negotiations. In the motion, attorneys Gary Corum, representing Heald, and Lloyd "Tre" Kitchens, representing Paul, complained of "mysterious" circumstances involving Rickenbach's earlier plea and "significant actions and events" that "have occurred secretly, under seal."
In response to the defense attorneys' concerns about conflicting indications of whether Rickenbach was cooperating with the government in return for the sentencing recommendation, Baker and Assistant U.S. Attorney Pat Harris pointed out that it has been no secret since Rickenbach first tendered a plea in November that he was expected to cooperate in return for the sentencing recommendation.
Harris said that, weeks ago, he gave each defendant's attorney a list of witnesses and exhibits the government plans to present at Heald's and Paul's trial, and that the witness list included Rickenbach. Harris said the attorneys also have been given a copy of Rickenbach's plea addendum, a document that is routinely sealed from public view because it deals strictly with cooperation agreements or the lack thereof.
In response to the defense attorneys' concerns that prosecutors "misrepresented" the specifics of Rickenbach's earlier plea agreement to the court, Harris said he believed the attorneys had misunderstood the wording in the addendum. He said that, while the document indicated Rickenbach wasn't asked to provide "substantial assistance," that "doesn't mean he's not going to cooperate."
Harris said the term "substantial assistance," when used in plea addenda, is reserved for a high degree of cooperation that warrants prosecutors asking a judge to impose a sentence far below the standard penalty range.
Because Rickenbach's new plea agreement was accepted by the court, it also resolves concerns raised about the ramifications of him testifying at his co-defendants' trial while technically still facing charges himself -- and as such, entitled to protection from self-incrimination.
Metro on 07/09/2016