Monday, March 14, 2005 | 9:45 a.m.
A decision on whether former Assemblyman Harley L. Harmon's nearly five-year federal prison sentence will be shortened is in the hands of U.S. District Judge Philip Pro.
On Friday Pro heard from Harmon's attorney, Frank Cremen, who argued that his client's sentence should be reduced because the government did not present evidence of perjury or that victims lost $2.7 million as part of Harmon's mortgage investment scheme.
Pro said that he would issue a written order, because he wanted to go over recent Supreme Court decisions, including U.S. v. Booker and U.S. v. Fanfan, two cases that made federal sentencing guidelines advisory instead of mandatory.
Cremen argued that under recent Supreme Court rulings Pro should not have taken into account the government's contentions that Harmon willfully lied on the stand, so his sentence should be reduced. Cremen added that prosecutors only proved that about $500,000 was lost in the scheme during the February 2003 trial, and this should also result in a lesser sentence.
Harmon was originally sentenced in August 2003 to 57 months in prison, but Pro's sentence was appealed to the 9th U.S. Circuit Court of Appeals, and was remanded back to Pro for Friday's hearing. The appeals court found that Pro was not specific enough at the first sentencing as to whether or not he felt Harmon willfully gave false testimony when he testified at trial.
Cremen said that a sentence of 27-33 months would be more appropriate for Harmon, who has already served about 15 months of his sentence.
Harmon was convicted of 34 counts of mail fraud after being indicted in April 2001. Prosecutors alleged that millions of dollars of investors' money was lost through his company's loans to developers of two projects -- a mobile home park and a storage center, between 1994 and December 1997.
Assistant 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.
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