Slugas enter guilty pleas in federal court
| Friday, Jan 08 2010 12:08 PM
Last Updated Friday, Jan 08 2010 06:37 PM
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Casey Christie / The Californian Kevin and Leslie Sluga walk into the Fresno Federal Courthouse Friday morning after being charged with wire fraud earlier in the week.
Casey Christie / The Californian Kevin and Leslie Sluga walk into the Fresno Federal Courthouse, Friday morning with their attorney, George Buehler, left. The Slugas pleaded guilty to wire fraud.
Casey Christie / The Californian Kirk Sherriff, assistant U.S. Attorney, is interviewed Friday after the hearing for Kevin and Leslie Sluga in front of the Fresno Federal Courthouse.
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FRESNO — Accountant Kevin Sluga and his wife, Leslie Sluga, the father- and mother-in-law of former Realtor David Crisp, entered guilty pleas to charges of felony wire fraud and aiding and abetting during an appearance in federal court Friday.
They are scheduled to be sentenced on July 12 for their crimes in the federal case related to operations of the former Crisp, Cole & Associates.
Their daughter Megan Balod, 31, who was named in documents outlining the plea agreements of her parents, is supposed to enter a plea Jan. 25, Assistant U.S. Attorney Sheila Oberto said in court.
After the hearing, Assistant U.S. Attorney Kirk Sherriff declined to comment on whether a plea agreement had been reached with Balod, but he pointed out that the plea deal for the Slugas is contingent on a guilty plea from Balod. He declined to describe what charges Balod faces, but Kevin Sluga has admitted use of fake CPA letters in support of loans taken out by Balod and his other daughter, Jennifer Crisp.
Neither Balod nor David and Jennifer Crisp attended Friday’s hearing.
The Slugas were unemotional as they answered Judge Oliver Wanger’s questions about whether they understood their rights and the terms of the deal. Leslie Sluga, 57, sat upright, looking straight ahead. Her husband, 60, leaned forward often, listening intently.
Wanger stressed that prosecution sentencing recommendations are merely advisory, and the couple would not have the right to change their plea if their sentence is not what they’re expecting.
He also reminded the Slugas that prosecutors have a right to pursue additional or more severe charges if they do not cooperate with investigators as they have promised.
The court briefly considered setting sentencing for March, but Oberto asked the judge to schedule it later in order to allow plenty of time to be sure the Slugas honor their commitments.
The Slugas’ attorney, George Buehler, asked for and received permission for his clients to travel between the Eastern District of U.S. District Court, which includes Bakersfield and Fresno, and the Central District, which contains Buehler’s Pasadena law office.
Outside the courtroom, Buehler declined to comment. Immediately after the hearing, the Slugas went into a private office and did not leave the courthouse for several hours.
The Slugas will likely be asked to testify against David Crisp and his former business partner, Carl Cole. The pair lost their real estate licenses in 2008 after the state determined they had engaged in mortgage fraud at their real estate firm, Crisp, Cole & Associates, better known locally as Crisp & Cole Real Estate.
FBI and IRS agents raided 13 local sites associated with the company, including the Slugas’ home, in 2007.
“The investigation is continuing and ongoing, and we intend to continue exploring with Mr. and Mrs. Sluga any information related to that investigation,” Sherriff said.
So far, Cole and the Crisps have not been charged criminally, but they face civil litigation from defrauded mortgage lenders.
If the Slugas fail to cooperate with authorities, they face up to 20 years in prison and fines up to $250,000. If they do cooperate, they might be placed on probation rather than serve prison time, but they’ll still likely be ordered to pay restitution of nearly $5 million.
Kevin Sluga, through his accounting firm California Business Solutions (later renamed Comprehensive Business Solutions), created fraudulent letters verifying employment in mortgage applications related to Crisp, Cole & Associates and its mortgage brokerage, Tower Lending. His fake CPA letters were used to buy more than $12.6 million worth of property that defrauded lenders of nearly $4 million, according to his guilty plea.
Leslie Sluga bought three homes totaling about $2.5 million, defrauding lenders of $912,000, after making false statements about her employer, income, other loans and whether the purchased properties would be owner-occupied and thus eligible for more favorable loan terms.
“The United States Attorney’s Office will vigorously pursue those responsible for mortgage fraud schemes in this district,” U.S. Attorney Benjamin Wagner said in a statement. “Schemes such as the ones committed in this case have contributed to the devastation in real estate and financial markets.”
