A federal judge sentenced two people Tuesday to 30 months and 46 months in prison for their roles in a mortgage fraud scheme that involved seven properties in Honolulu and Kona — a case that prompted an FBI manhunt this summer for an East Honolulu woman who is the third defendant and is still facing sentencing.
Visiting U.S. District Senior Judge Charles R. Breyer sentenced Sakara Blackwell, the real estate broker formerly known as Dawn Sakaguchi, to the 30-month prison term. Blackwell handled the sales of the properties that still had mortgages on them to buyers who were unaware of the mortgages.
One of the unsuspecting buyers is an employee of the court’s Probation and Pretrial Services. Breyer, who is from the Northern California District, handled Tuesday’s sentencing because all of the Hawaii District judges had recused themselves.
He handed the 46-month term to Marc Melton, who drafted all of the bogus documents used to convince escrow companies that the properties were unencumbered by mortgages.
Breyer ordered Melton to forfeit to the government $129,307 that authorities seized from a bank account associated with him and ordered Melton to pay, along with his co-defendants, $881,755 in restitution.
The restitution amount is the difference between what the buyers paid for the seven properties and what the properties are worth.
Breyer ordered Blackwell to also pay restitution. How much of the $881,755 she will be responsible for will be determined at a later date, along with who will receive the restitution.
A third defendant, Jennifer Ann McTigue, 48, became a fugitive after she failed to show up for a mandatory pretrial meeting in July. She was later apprehended by FBI agents, U.S. marshals and Honolulu police officers in Kaimuki.
She pleaded guilty when she appeared in court on July 23, and said Melton created bogus satisfaction-of-mortgage documents on properties that still had mortgages due, and she recorded the documents at the Bureau of Conveyances. McTigue told the court that Blackwell “would sell the properties representing that they were free and clear of mortgages when they were not.”
The government says the trio did that with seven properties in Kakaako, Waikiki and Kona in 2011 and 2012.
Melton’s lawyer, Myles Breiner, said outside the court that the banks, escrow and mortgage companies didn’t lose any money through the scheme.
“They managed to get compensated by their insurance policies, they’re compensated by the defendants and they’re trying to get compensation from the victims,” Breiner said.
Kai Dodson, one of the unsuspecting buyers, told Breyer that a bank is threatening to sue him and his wife for the original unpaid mortgage on the luxury Kakaako condominium the couple purchased from Blackwell.
Melton and Blackwell each pleaded guilty to two conspiracy charges. One of the charges carries a maximum five-year prison term while the other carries a maximum 10 years.
Each of their sentences was less than what is recommended by federal court sentencing guidelines because each had cooperated with the government and agreed to testify against McTigue.
McTigue pleaded guilty to the same two conspiracy charges, plus wire fraud, mail fraud and money laundering. The wire and mail fraud charges each carry maximum 20-year prison terms.
Because McTigue was the last defendant to plead guilty, after her originally scheduled trial date, the government is not recommending any sentencing breaks for her as it did for Melton and Blackwell.