Former Realtor David Crisp sobbed openly Monday morning as he begged for mercy from a Federal judge before he was sentenced as part of a huge Kern County mortgage scam. The judge sentenced him to 17 and a half years, the same term he gave to Crisp's co-defendant and former business partner, Carl Cole.
Crisp, 34, pleaded guilty in December to one count of mail, wire and bank fraud. In that plea bargain, he agreed to a term of at least 10 years, but was promised he wouldn't get more than 22 years.
The money, the fame, it all got to him, Crisp told U.S. District Court Judge Lawrence O'Neill Monday morning.
"It went to my head, your honor," Crisp said. "I want to get past this. If I have to go to prison for a long time, I will. I care about people, Your Honor, and if I can pay this debt back to the banks and the victims, I want to. I want to work. I am just a (restaurant) sever right now and I am happy to be a server."
"I ask for mercy for myself, for my wife and my co-workers," Crisp said. "If I can make it up to them, I will do anything I can do. This was bigger than me, Your Honor. I didn’t realize this would happen."
"I mowed lawns, I did everything to minimize the damage, Crisp continued. "I don’t have anything else but my family and I want to show them I can make this right."
O'Neill said he received 75 letters of reference, attesting to Crisp's good character and asking for leniency.
One letter was from Crisp's wife Jennifer, 31, who described him as a supportive husband and father to their children. That, she said, is why she stayed with him through his legal troubles.
Jennifer Crisp sat behind her husband, waiting to be sentenced next.
David Crisp's attorney, Assistant Federal Defender Eric Kersten, said Crisp misjudged the booming real estate market, and a got caught. He blamed Carl Cole, the senior partner in Crisp & Cole Real Estate.
"The market was booming," the attorney said. "It goes to your head." He said David Crisp "thought it would keep going. And it didn't."
Instead, he adopted the lifestyle Kern County saw on Crisp & Cole Real Estate television commercials – ultra-expensive sports cars, private jets and lavish jewelry.
"He was really a kid in an adult's world," Kersten said of Crisp.
Prosecutor Kirk Sherriff painted a completely different picture, characterizing Crisp as a shrewd con man who orchestrated a web of false documents that was, "in essence, a giant Ponzi scheme.
"There never was a means of exit there," the prosecutor said. "He had to know that all along, and he was living it up while he could."
O'Neill ordered Crisp immediately taken into custody to begin serving his sentence. He also was ordered to pay restitution.
The sentences were handed down eight years after FBI agents and federal prosecutors raided the homes and business offices of David Crisp and his partner Carl Cole.
Cole also was sentenced to 17-and-a-half years in prison last month.
Prosecutors say the scheme started around January 2004 with the purchase of a series of homes with fraudulent mortgages that required no money down.
The homes were purchased in the names of Crisp & Cole employees and their relatives.
Crisp enlisted his father-in-law, accountant Kevin Sluga, to draft letters falsely inflating the incomes of the buyers in order to qualify them for multiple home purchases.
The buyers included Jennifer Crisp; Cole's son, Caleb; and a host of employees at the real estate firm who sold the homes to each other at increasing prices, pocketing the equity profit. They would do this, prosecutors said, by offering kickbacks to home appraisers inflated their estimates of the homes' values.
When the straw buyers stopped making mortgage payments, the mortgage companies took the homes back, only to discover they were not worth what the mortgage company had lent the borrower just a few months earlier.
Appraiser Gary Crabtree, who was not involved but blew the whistle on the scheme to federal authorities, pegs the total loss to lenders on the loans at $32.5 million dollars.
Crisp & Cole owned Tower Lending, the company’s in-house mortgage broker business. Because Tower Lending helped execute and finance the transactions, prosecutors said Crisp and Cole were further enriched by commissions and fees on each transaction.
More insidious, Crabtree said, was that the falsely inflated home values were relied upon by regular homebuyers, contributing to the artificial run-up in home values that resulted in the real estate collapse in 2006.
At the peak of the market, David Crisp was accompanied in his business transactions in town by a set of bodyguards. He drove a half-million dollar Mercedes-Benz McLaren sports car.
Documents unsealed by federal prosecutors earlier in March further detail the lavish lifestyle. They included receipts at the Louis Vitton store in Las Vegas for more than $3,000 and tropical vacations to Cancun and Tahiti totaling more than $10,000. But the big shopping spree was done at the Chanel store in Las Vegas in 2005. A receipt charged to Jennifer Crisp showed $2,000 on a black Chanel handbag and a pair of watches totaling $44,000.
Fourteen defendants have pleaded guilty in connection with the scheme.
Former Crisp & Cole office manager Julie Farmer is the only person indicted in the fraud who has not accepted a plea deal. She is set to go to trial next month.