“Former Ramapo Supervisor Christopher St. Lawrence’s sentencing on corruption-related charges has been delayed for an indefinite period as the judge weighs the extent of financial losses incurred by investors who bought the town’s municipal bonds.
U.S. Judge Cathy Seibel will begin taking testimony Wednesday morning from witnesses for the prosecution and defense on the estimated financial loss to investors. How the investors will be repaid and any St. Lawrence restitution remain separate issues for Seibel to decide.
The potential investor loss of $2.3 million allows the prosecution to recommend an enhanced sentence of 14 years in prison for St. Lawrence. Probation officials recommended 24 to 30 months, while St. Lawrence’s attorney is advocating probation.
A final prison term, if any, is up to Seibel, a former federal prosecutor who oversaw the trial from late April to May 19 jury conviction.
Seibel said Monday there’s no doubt St. Lawrence committed fraud but questioned whether investors knew about the risk they were taking when buying the town’s bonds and if that risk led to a loss of profit. She asked would the interest rate on the bonds have increased — and by how much — if the investors knew the true state of the town’s failing financial health.
Investors “can’t be deprived of information and that’s why (St. Lawrence) is guilty.” Seibel said. “I am questioning whether (investors) were deprived of cash. They were at a higher risk not to get paid and they didn’t know it. The risk never materialized. They did get paid.”
Lead federal prosecutor James McMahon argued the exact amount didn’t matter, because investors didn’t get what they expected. He argued they expected the highest possible interest rate and that rate was fraudulently lowered because St. Lawrence filed phony information on the town’s financial health.
“They were deprived of the true risk,” he said, adding the $2.3 million loss calculation is credible. The office originally set a $2.9 million loss, but updated its figure, leading St. Lawrence’s attorney, Michael Burke, to offer the court his expert on the issue who will testify Wednesday.
Burke agreed with the judge in questioning the prosecutor’s theory of how much investors were harmed.
He will get an opportunity on Wednesday to present an expert who analyzed the prosecution’s updated estimation of losses suffered by investors who bought Ramapo bonds based on false information from St. Lawrence. The U.S. Attorney’s Office opposed a delay, arguing the estimated loss has been properly calculated.”
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