Carl Cole sentenced in Bakersfield real estate fraud case

Carl Cole sentenced in Bakersfield real estate fraud case

FRESNO, Calif. (KBAK/KBFX) — Carl Cole, one of the two main targets in a long-running real estate fraud case, was immediately taken into custody Monday after a federal judge sentenced him to 17½ years in prison.

Cole's attorney had asked for a lighter sentence, due to his age and medical conditions. But the judge insisted on the longer one. Cole's attorney also asked that he be allowed to stay out of prison long enough to get to some medical appointments, but again the judge refused.

"This, without question, was an egregious, white collar heist," U.S. District Judge Lawrence O'Neil said Monday morning. "Beyond that, stealing in enormously big ways from the community. You brought in other people and ruined lives, including your son's."

Caleb Cole, 37, was also sentenced Monday, and received a sentence of six months.

The father, Carl Cole, admitted guilt to conspiracy to commit mail, wire and bank fraud in a deal with prosecutors in November.

Former Bakersfield real estate moguls Carl Cole and David Crisp scammed millions of dollars out of banks and mortgage companies between 2004 and 2007. They submitted fraudulent loan applications with material misrepresentations.

Crisp took a plea deal in December and is awaiting sentencing.

Caleb Cole's attorney said the father's case was linked in a "package offer," and the son hoped that would result in a lighter sentence for the elder Cole, and he was disappointed.

"It wasn't enough," Caleb Cole said, leaving the courthouse. "I guess it is what it is now."

"If Caleb did not plead, then the father couldn't take a plea agreement, and it would have gone to trial," defense attorney Jeff Hammerschmidt said. "Typically in federal cases, the sentence would be much higher if the case had gone to trial than it was today."

The judge called the son's part of the case a tragedy. He said Caleb Cole's actions are not "legally excusable," but on a human level, understandable.

"The charge that Caleb pled to here was a count involving - counts involving - homes that his father set up the purchase for, and Caleb was listed as the owner," attorney Hammerschmidt said.

Did the son know that was illegal?

"What he did know was the he wasn't going to, intending to immediately move into the home," the defense attorney responded. "Whether or not he knew that was illegal, it appears he did not necessarily."

The investigation included 15 total defendants. David Crisp's wife, who was among them, is slated to be sentenced at the same time as her husband in March.

One defendant, Julie Farmer, has not taken a plea deal. She was at the federal courthouse Monday but would not comment. Her trial's now set to start in April.

Judge O'Neil also had harsh words for Carl Cole in his role to bring employees into the scheme.

"People were trying to do a good job, and trusted you, and you betrayed them," the judge said. "The losses were enormous, resulting in a lavish lifestyle on other people's money, bringing down so many people in your wake."

"During the fraud scheme, Cole enlisted the help of office workers to falsify documents and others, even his own son, to lend their names as straw buyers," U.S. Attorney Benjamin Wagner said in a statement. "Today's sentence is fitting for someone who embodies the recklessness in the mortgage industry in the mid-2000s."

Prosecutors say the conspirators often resold properties to other straw buyers at ever-higher and inflated prices. From that, they'd skim the "equity," and eventually most of the properties were foreclosed on when the defendants couldn't make mortgage payments.

They said Carl Cole admitted in his plea agreement that he and the co-conspirators caused losses of almost $30 million.

Carl Cole's attorney declined to comment after the sentencing.

Cole had stood during the court hearing, in a grey suit, mostly looking at the floor. When he was ordered immediately taken into custody, he sat for a moment next to his lawyer, and then marshals put on handcuffs and Cole was led away.

Caleb Cole was allowed to turn himself in on April 21 to start serving his term. His attorney said that date, and the length of the sentence, will allow Caleb Cole to keep his job in the Kern County Agriculture Commissioner's office.

"With this sentence, he will serve approximately five months in prison," Hammerschmidt explained. "And will be able to return to his job."

Caleb Cole was also ordered to pay restitution of about $664,000.

Carl Cole must pay more than $28 million in restitution to lenders, according to the Department of Justice.

With his father's age of 66, Caleb Cole had hoped he would get a sentence of about 10 years. The attorney said the son's disappointed at the 17-year term.

"Had he gone to trial, the sentence for his father would likely have been 25 years or more," Hammerschmidt said. "Which would have made it almost a certainty that his father would not have been able to leave prison alive."