Attorney Sentenced For $4 Million Fraud

For Further Information, Contact:
Assistant U.S. Attorney Eric J. Beste (619) 546-6695

SAN DIEGO – Attorney Gino Paul Pietro appeared in two federal courthouses this week, where he was collectively sentenced to serve 30 months in prison for participating in separate fraud schemes in Orange and San Diego counties.

On July 20, 2015, U.S. District Judge Andrew Guilford in Santa Ana ordered Pietro to serve 24 months in custody for a sophisticated loan fraud scam that used a “straw buyer” to conceal his client’s receipt of over $4 million in commercial loans that were backed by the federal government.

And on July 24, 2015, Pietro was sentenced by U.S. District Judge Dana M. Sabraw in San Diego to serve 10 months in custody for defrauding six different defendants being held in pretrial detention (and their families) out of $3,000 each by falsely representing that his investigator was a licensed attorney who could “globally” resolve their criminal and immigration cases. Six months of that sentence are to be served consecutive to the Orange County sentence; four months concurrently.

In imposing additional custodial time on Pietro, Judge Sabraw told the defendant his conduct had brought “dishonor and disgrace to the entire legal profession.”  And although his six victims had committed crimes by entering the country illegally, “they didn’t deserve this.”

Pietro was ordered to repay $18,000 in restitution to the victims of the San Diego fraud scheme, and is scheduled to appear in federal court in Santa Ana on October 26, 2015, to determine the amount of restitution he must pay to the victims of the loan fraud scheme.

Pietro was ordered to report to prison on November 27, 2015.

Pietro’s sentencing in federal court in Santa Ana concerned his role in defrauding Hana Bank out of two commercial loans that his client – Donald Goff – used to purchase lucrative gas stations in Anza and Imperial, California.  In order to facilitate these transactions and conceal Goff’s involvement, defendant Pietro created two shell companies (Rock Petroleum, Inc. and the Golden Oso Group, Inc.) and made it appear that a “straw buyer” was actually going to purchase the properties for over $6 million – using a $2.1 million down payment and $4.5 million in loans from Hana.  In truth, however, the purchase price was closer to $3.45 million, and the “down payment” was a total fabrication. And to secure favorable lending terms, the schemers fraudulently obtained guarantees from the U.S. Small Business Administration (“SBA”).

Soon after the fraudulent loan scheme was underway, Goff, his wife and stepdaughter were indicted in the Central District of California for executing similar loan fraud schemes. Instead of backing out of the Hana Bank scam, Pietro appeared in federal district court in Santa Ana and represented Goff in the criminal case – at the same time he was working with Goff to defraud Hana Bank. On December 7, 2012, the loans with Hana Bank closed, and over half a million dollars was diverted from these loan proceeds to pay the schemers – including $250,000 to defendant Pietro.  The loans ultimately went into default, resulting in Hana Bank suffering the substantial losses that will ultimately be borne by the SBA and taxpayers.

Don Goff was sentenced to 78 months in prison. His wife, Melanie Goff, was sentenced to eight months custody; stepdaughter Monty Brown was sentenced to 18 months custody.

The following year, after withdrawing from representing Goff in the criminal case, Pietro embarked on a second fraud scheme that targeted defendants held in federal custody on immigration charges in San Diego.  To obtain access to federal detainees facing criminal charges, Pietro arranged for an investigator to falsely represent to authorities that he was a licensed attorney.  The investigator used this fraudulent access to falsely claim to detainees that he and Pietro could “globally” resolve their criminal and immigration charges within a matter a matter of months if they retained them for between $6,000 and $10,000.  Between September 2013 and January 2014, Pietro and the investigator fraudulently induced six detainees and their family members to wire transfer $3,000 each to Pietro’s client trust account.  Pietro then appeared in federal court for these defendants, replacing their court-appointed counsel.  In the end, of course, Pietro was unable to execute a favorable “global” resolution of the criminal and immigration charges.  Soon after pleading guilty in Santa Ana for his role in the Hana Bank scam, Pietro withdrew from representing these San Diego clients.

“Because members of the bar are given special privileges, they are rightly held to a strict standard of honesty and fair dealing,” said U.S. Attorney Laura E. Duffy.  “Unfortunately, Pietro placed his own financial interests ahead of his obligations to his clients, to banks, and to the courts.  Attorneys who engage in fraudulent conduct should not be surprised to find themselves in federal court – but this time, as defendants.”

Because the United States Attorney for the Central District of California was recused from the prosecution of Pietro, the United States Attorney for the Southern District of California handled both of these prosecutions.

“Today’s sentence reflects the serious nature of the defendant’s breach of public trust through his fraud schemes,” said David L. Bowdich, Assistant Director in Charge of the FBI Los Angeles Field Office. “Mr. Pietro was entrusted to uphold the law but instead, gave in to greed and broke the law, while enabling others to do the same. This sentence should serve as a deterrent for anyone contemplating similar criminal activity.”

“Pietro’s sentence is a reminder that those who defraud the government will be brought to justice and held accountable for their actions,” said Inspector General Peggy E. Gustafson of the Small Business Administration.  “Lies by individuals that are afforded a degree of trust by virtue of their professions are particularly egregious. I want to thank the U.S. Attorney's Office for its dedicated leadership and professionalism in pursuit of justice in this case.”

DEFENDANT                                 
Gino Paul Pietro                                  Age: 54                       Newport Beach, CA

SUMMARY OF CHARGES
Case No. SA CR 14CR0019-AG (C.D.C.A.)
Wire Fraud – Title 18, U.S.C., Section 1343

Maximum penalty: Twenty years in prison; $250,000 fine, or twice the gross gain or loss caused by the offense; mandatory restitution; $100 special assessment.

Case No. 14CR1623-DMS (S.D.C.A.)
Wire Fraud – Title 18, U.S.C., Section 1343

Maximum penalty: Twenty years in prison; $250,000 fine, or twice the gross gain or loss caused by the offense; mandatory restitution; $100 special assessment.

AGENCIES
U.S. Small Business Administration, Office of Inspector General
Federal Bureau of Investigation