Tuesday, Sept. 23, 2003 | 11:16 a.m.
Former Assemblyman Harley L. Harmon was sentenced Monday to nearly five years in prison in connection with an investment scheme that cost victims millions of dollars.
Some said they wanted to see harsher penalties for the 55-year-old Republican.
"He lied to people from the get-go, and I don't think we'll ever get our money back," said Bob Rozario, a 70-year-old Las Vegas resident who lost $100,000 of a $350,000 investment with the now-defunct Harley L. Harmon Mortgage Co. "He took people's life's savings, and ruined the lives of people who trusted him."
U.S. District Judge Philip Pro sentenced Harmon to 57 months in prison. Harmon was also ordered to pay more than $2.74 million in restitution and to forfeit an additional $557,451.63 to the victims of the 34 counts of mail fraud that Harmon was found guilty of in February. Under federal regulations the soonest Harmon could be released from prison would be 2007.
Before sentencing Harmon, Pro told him that he had to face the consequences of "writing a check with your tongue that your conduct cannot honor."
Harmon was indicted in April 2001 after millions of dollars of investors' money was lost through his company's loans to developers of two housing projects -- a mobile home park and a storage center, between 1994 and December 1997.
U.S attorney Dan Schiess said that Harmon led investors to believe he was putting their money in safer first deeds of trust when they were actually in second, third and even worse positions on loans brokered by Harmon's mortgage company.
Money was also diverted from the investors' projects to projects that were in danger of being foreclosed. Interest payments and reports mailed to investors kept them in the dark about what Harmon was doing with their money, Schiess said.
Harmon had no comment after the sentencing, but his attorney, Frank Cremen, said that Pro's ruling would likely be appealed.
Cremen argued that there was no evidence that Harmon used investor money to "line his pockets."
Cremen asked Pro to take Harmon's motives into account and sentence his client to probation so that he could work to pay back investors.
Harmon also addressed Pro, saying his motives were always good.
"My intentions were always to save my investors and my projects," Harmon said. "I never took anything or enriched myself."
Schiess countered that Harmon was getting a deferred financial benefit from the fraud, because he was trying to save the reputation of his business by illegally diverting funds and lying to investors.
"He was trading on his family name, and the trust these investors had in it," Schiess said. "He was a part of, as I like to call it, the first family of Nevada."
Many of those who invested with Harmon said they had trusted him because of his background and the good reputation of his family. Harmon was speaker pro tem of the Assembly in 1977 and its majority leader in 1979.
His political lineage extends back to his grandfather, Harley A. Harmon, a former chairman of the Nevada Public Service Commission. Harmon's father, Harley E. Harmon, served in the Assembly and on the Clark County Commission.
"Harley (L.) Harmon was a real con man," said Thomas Hodges, a 76-year-old Las Vegas resident who lost a $10,000 investment.
Harmon's mortgage company, which operated at 1108 S. Eighth St., was handling 44 separate loans involving $23.9 million from 694 investors when the Nevada Financial Institutions Division stripped the company of its license in December 1997.
After Harley L. Harmon was stripped of his license in 1997 the Sun reported that many investors had given him money without knowing that he was under state investigation. That and other revelations reported by the Sun led the Nevada Legislature in 1999 to revise state mortgage broker laws aimed at giving investors more protection from potentially unscrupulous companies.
Harmon was originally charged with 71 fraud counts, but most were dropped because witnesses were unavailable.
"A lot of the investors were elderly and many have died," said Ellen Rozario, 70, who, along with her husband, had trusted Harmon with their money.
Harmon is scheduled to turn himself in to authorities Dec. 1 to start serving his sentence. After he is released from prison Harmon will have to serve three years of supervised release and cannot be employed in any business involving mortgage loans or investments without permission from federal authorities.
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