Crime - Sacto 911

Judge rejects effort to withdraw guilty plea in massive Ponzi scheme

David and Debi Teja of Chico were financially devastated after investing with Lee Loomis.
David and Debi Teja of Chico were financially devastated after investing with Lee Loomis. Sacramento Bee

A federal judge in Sacramento on Tuesday rejected an effort by scam artist Lee Loomis to withdraw a guilty plea he entered a year ago – one that could send him to prison for 18 years.

After a 45-minute hearing, U.S. District Judge John A. Mendez told the former financial adviser that he saw no evidence to support Loomis’ claims that he was under duress at the time he accepted a plea agreement and pleaded guilty in January 2016 to a single count of wire fraud.

“In fact, Mr. Loomis’ demeanor was one of competence and calm ...” said Mendez, who presided when Loomis entered his guilty plea. “The fact is he pleaded guilty on Jan. 29, 2016, under oath and in open court.”

The finding moves Loomis, who has been in custody since September 2012 and is accused of bilking investors in six states out of as much as $100 million, one step closer to a federal prison sentence. Mendez set March 28 for sentencing, although Loomis, who is acting as his own attorney, suggested that date would not hold up because he plans to appeal.

“The appeal doesn’t stop sentencing,” Mendez told Loomis as part of his continuing legal education of the defendant, who has gone through four defense attorneys so far and asked Mendez to appoint a backup lawyer to help him prepare for sentencing.

Mendez denied that request.

“I’m disappointed that you didn’t keep your lawyers,” the judge said. “You’re not entitled to backup counsel. You fired your lawyers.”

Loomis, 59, appeared in court Tuesday in orange Sacramento County jail garb with his ankles shackled. He had faced sentencing once before, in July 2016, but abruptly fired his two attorneys, said he wanted to represent himself and asked to withdraw his guilty plea.

In documents he submitted to the court from jail, Loomis claimed he was under severe duress at the time he pleaded guilty and that he faced difficult conditions in the Sacramento County jail, where he said he was subjected to indignities that included “sewer flies buzzing about your head while showering standing in pools of slimy human bodily fluids.”

“At the time I entered my guilty plea, I did not believe I was guilty nor do I believe I am now,” he wrote in a filing in early February. “This was an act of capitulation, not one of confession.”

Prosecutors disagreed, noting that at the hearing in which he pleaded guilty the judge confirmed with him in open court that he understood the charges, had read the agreement he signed and was satisfied with his attorneys.

They also rejected his complaints about conditions in the jail.

“While jail may not be pleasant, Loomis cannot meet his burden to show that the jail, or anything in it, made him plead guilty,” Assistant U.S. Attorneys Paul Hemesath and Jared Dolan wrote in court filings.

Loomis is the once-wealthy former head of Loomis Wealth Solutions, a Roseville company that promised 12 percent returns to investors who attended two-day seminars at hotels and casinos. Some investors were lured into purchasing homes and condominiums in California, Arizona, Florida, Colorado, Nevada and Illinois, prosecutors say. Those investors were told Loomis would cover the mortgages, taxes and insurance and rent out the homes for them, then pay them monthly returns of $300, prosecutors said.

Instead, when the 2008 economic collapse came Loomis found himself short on cash and began using new investors to pay the old ones, prosecutors alleged.

The investigation lasted for years as officials unraveled Loomis’ dealings, and authorities estimated investor losses might have been as much as $100 million. The plea agreement he originally signed blamed him for taking in more than $10 million in investor funds.

Sam Stanton: 916-321-1091, @StantonSam

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