FRESNO — Even as some of her loved ones came apart emotionally, the former office manager for the defunct Bakersfield real estate firm Crisp & Cole remained outwardly calm here in U.S. District Court as she listened to the jury's stunning verdict Tuesday.
Julie Farmer, the only one of 15 defendants who decided to fight federal fraud charges rather than accept a plea deal in the infamous real estate fraud case, shed no tears as the verdicts were read by Judge Lawrence J. O'Neill:
Guilty, conspiracy to commit mail fraud; guilty, conspiracy to commit wire fraud; guilty, conspiracy to commit bank fraud.
In all, the jury of seven women and five men handed down guilty verdicts on five counts. But the jury also found Farmer not guilty on several other counts, including mail fraud, wire fraud and conspiracy to launder money.
Just moments after the judge warned those in the gallery not to respond to the verdicts in overtly emotional ways, it happened anyway as soon as a guilty verdict was read for the first count.
Some gasped, others cried out and one young man stormed out of the courtroom, his outburst easily heard from the corridor.
O'Neill apologized to the jury.
"The person who screamed will be taken into custody," the judge told jurors. "And I will deal with him later."
Many in the group of friends and family who have accompanied Farmer to court over the length of the trial were overcome.
The weight of the outcome was indeed profound, as count 1 alone carries a maximum penalty of 30 years in prison and a fine of $1 million.
But after the hearing, Farmer's attorney, Anthony Capozzi, and Farmer's parents said they were confident the guilty verdicts would not stand.
"There just isn't enough evidence to convict Ms. Farmer," Capozzi said.
He and co-counsel will examine the transcripts of the trial and ask that the verdicts be overturned, he said.
"It's not over," said Farmer's father, David Reed. "We are confident when it is over, she will be free."
As one might imagine, federal prosecutors had a different take.
Not only was U.S. Attorney Kirk Sherriff pleased with the outcome, he argued that Farmer might be a flight risk and suggested she be remanded into custody or have her $100,000 bail amount adjusted upward.
Judge O'Neill declined.
Except for Farmer's sentencing, which was scheduled for July 14, the conviction "brings the Crisp & Cole saga to a close," Sherriff said.
"This was an elaborate scheme, carried out by David Crisp, Carl Cole, Julie Farmer and other individuals at this business," he said.
Not only that, but Sherriff told the court that he wants to clarify some of Farmer's testimony, post-trial.
"The government's position is the defendant perjured herself on the stand," he said.
During the trial, Sherriff and co-counsel Henry Carbajal argued Farmer helped orchestrate a mortgage fraud ring led by David Crisp and Carl Cole in which the conspirators used straw buyers to fraudulently secure home loans, flipped the properties multiple times at ever-higher prices and extracted the equity. The many foreclosures that resulted, prosecutors said, cost lenders nearly $30 million.
The prosecution had argued that Farmer was not only involved in the fraud — including bogus employment and bank deposit verifications used for the company's straw purchases — but that she signed falsified loan applications on two properties bought by her and her husband.
Two former loan officers at Tower Lending, Crisp & Cole's mortgage arm, testified last week.
One of them, Jerald Teixeira, was one of the earliest of the former employees to provide evidence to investigators. In his testimony, Teixeira told the court Farmer had been present at strategic meetings about straw purchases.
A second loan officer called to testify by the prosecution, Christopher Lance Stovall, told the court he talked with Farmer about his plans to leave the company because of all the fraud going on there, and that she had sympathized, suggesting she was aware of the unlawful activities.
Farmer has steadfastly maintained her innocence throughout, testifying on her own behalf that she was unaware of the fraudulent schemes and that she played no active part in them.
Character witnesses testified to their confidence in her integrity. Farmer was honest before she was employed by Crisp & Cole, and honest afterward. Any unlawful activity that took place during her years working with Crisp and Cole was certainly not in her character and not of her doing, the witnesses seemed to be saying.
Both the young company founder, David Crisp, and his older partner, Carl Cole, accepted deals with the U.S. Attorney's Office, pleading guilty to conspiracy to commit mail, wire and bank fraud. Both recently began serving 17-1/2 year federal prison sentences.
On Thursday, the second day of the defense's case, Farmer became flustered and emotional under Sherriff's cross-examination as she acknowledged providing false information on mortgage loan applications.
Farmer conceded at one point she had failed to disclose on a loan application that Crisp was a "silent partner" on a property purchased by her and her husband, Charles. She later testified she didn't see anything wrong with such an arrangement, a point Sherriff disputed.
She also acknowledged vastly inflating her income and her husband's on a loan agreement the couple signed, overstating her length of employment with the company as well as withholding the fact the couple was about to purchase another property, information that could have disqualified their loan application.
A property on Shaver Lake the couple agreed to buy on a 50-50 basis with Crisp in late 2005 was explored at length during both testimony and closing arguments. The loan agreement they signed contained inflated income statements and exaggerated how long Farmer had worked at the company.
The defense contended Stovall, the loan officer handling the deal, entered the incorrect information on his own, as he had in the case of another borrower, and that Farmer was hardly alone in failing to verify every statement in a final loan document. The vacation home ended up going into foreclosure after the Farmers sold it to another Crisp & Cole employee.
And all those witnesses who had already made deals with federal prosecutors?
Defense co-counsel Scott Howry told the jury their testimony was not credible because they admitted to fraud as part of their plea deals.
If Farmer is guilty of anything, Howry said, it was negligence. He asserted the government had failed to present evidence of any intent to defraud, and without intent, the government's case was a lost cause.
Howry cited instances where the defendant had gone out of her way to seek qualified advice before taking the steps the government says were part of her fraud. These included reaching out to a real estate consultant and a lawyer before buying the Shaver Lake property together with Crisp, and speaking with a loan officer at the company about whether it was OK to put a borrower on her personal savings account, as she maintains Crisp had asked her to do.
"Did she do things with an innocent mind or did she do things with a criminal mind?" Howry asked the jury. "That's what the case is about."
And that's what Farmer's parents believe the case is still about: a good woman trying to do the best job she could. Unfortunately, she was working for people who, they say, would do anything to make a buck.
The maximum penalty for conspiracy to commit wire fraud, conspiracy to commit mail fraud and conspiracy to commit bank fraud is 30 years in prison and a $1 million fine, said Lauren Horwood, a federal court spokeswoman. The maximum penalty for wire fraud and bank fraud is 20 years in prison and a $250,000 fine.
Most sentences are served concurrently, so even if she received the maximum, the most time she would do is 30 years, Horwood said. A judge will have the final say.
In some contexts, the court characterized one of the guilty counts — conspiracy to commit wire fraud, conspiracy to commit mail fraud and conspiracy to commit bank fraud — as three counts, leaving Farmer guilty of seven counts rather than five. The discrepancy could not be immediately reconciled.