Johnny E. “Jay” Grivette Jr., the man who went from Paradise to prison, was sentenced Tuesday in Sacramento federal court to 4 1/2 years behind bars for his role as a main player in the biggest financial scam in regional history.
Grivette, 39, who grew up in the central Butte County town of Paradise, managed a company for approximately two years that was part of the apparatus known as Loomis Wealth Solutions, a Roseville-based umbrella for an array of entities created and controlled by Lawrence Leland “Lee” Loomis.
Loomis, 57, is suspected by federal authorities of orchestrating massive thefts from investors in his enterprises, mortgage lenders and nominees who fronted for him as purchasers of residential property. Some have speculated that total losses to victims in six states may approach $100 million.
When he pleaded guilty in July 2012, Grivette admitted that Advantage Financial Partners of California LLC, the Loomis-controlled company Grivette ran in the mid-2000s from an office in Chico, was an integral part of the systemic fraud.
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Grivette was ordered to pay more than $4 million in restitution to a list of lending institutions.
The term imposed Tuesday by U.S. District Judge John A. Mendez was in accord with a plea bargain worked out among prosecutors, Grivette and his lawyer. It takes into account the substantial help Grivette has been to Assistant U. S. Attorney Paul Hemesath, other prosecutors, and FBI and IRS agents tasked with unraveling Loomis Wealth Solutions.
Grivette lawyer Mark Reichel said in court Tuesday his client began cooperating with the government in October 2008, 20 months before he was charged with anything.
All indications currently are that Loomis will go on trial Oct. 6, and, if that happens, Grivette is likely to be a government witness.
Loomis is charged in a 50-count grand jury indictment with mail and wire fraud. He has been in custody since his arrest on Sept. 14, 2012.
Grivette told Mendez on Tuesday that “ignorance and greed” brought him down. “I was under the illusion of Lee Loomis that it was for the benefit of the investors. There was a point I knew what was going on and didn’t know how to get out.”
In a long letter to the judge, Grivette’s wife, Ida, recounted how hard she and her husband had labored to realize legitimate financial success before Loomis entered their lives.
“At the point before he met Loomis we had 80 rental units, had built and sold a dozen spec homes and would build large commercial buildings for clients,” she wrote. “We had grown ourselves through hard work into a net worth of multimillions.
“Life was pretty good; we went to church, vacationed(,) had what ever we needed and most importantly we had a very close family and had a good life ahead of us.”
Reichel picked up the story from there in a hallway interview after the sentencing.
Grivette “was tricked by a career con man into investing all of his own money. Jay then made bad decisions, for which he will now pay with a part of his life.
“Since 2008, he has gone back to being the hard-working and moral Jay Grivette that he was before he met Lee Loomis.”