Two years after pleading guilty in a massive investment fraud scheme, former Roseville con artist Lee Loomis was sentenced Tuesday to 12 years in prison for what authorities have called one of the largest financial frauds in Sacramento history, one estimated to have caused $20 million to $50 million in losses.
With victims watching in court, Loomis insisted to U.S. District Judge John A. Mendez that he never intended to defraud anyone with his promises of safe investment plans that would earn them 12 percent returns every month.
“I’m not perfect, I made a lot of mistakes,” Loomis said as he represented himself in court. “But none of the mistakes were made with the intent to defraud anyone.”
Prosecutors saw the case in an entirely different light, saying 183 individual investors were harmed by the scheme and asking the judge to impose an 18-year sentence for the single count of wire fraud to which Loomis pleaded guilty.
“He is absolutely minimizing his responsibility by claiming that he didn’t wake up in the morning intending to defraud,” Assistant U.S. Attorney Paul Hemesath told the judge, adding, “This was about ego and empire.”
Mendez told Loomis that he could not understand why he appeared to be “unwilling to accept some responsibility,” and rejected Loomis’ request to be sentenced to the 5 1/2 years he already has spent in custody.
The judge conceded that he did not believe Loomis set out to defraud his investors, but that his business empire “went south” in the 2008 financial collapse and Loomis crossed the line from gross negligence to fraud.
One of his investors, San Jose Pastor D. Ronald Bailey, described his feelings after he learned his $250,000 investment, which he took out of his home equity, was gone.
“I found myself waking up every night in a cold sweat convinced I was going to be bankrupt, homeless and unable to provide for my family,” Bailey said.
Bailey added that he lost more after purchasing two homes in a Loomis investment program and having to dump both as short sales.
“I’m 71 now,” he said in an interview during a break in the lengthy court proceedings. “Doesn’t look like I’m going to be able to retire any time soon.”
The path to Loomis’ sentencing has been long and difficult for the former millionaire businessman.
As the head of a company called Loomis Wealth Solutions, he promised 12 percent returns to investors who were lured by personal pitches he would make at hotels and casinos.
Loomis touted his Christian values and work ethic, and lived a life that included a $400,000 annual income and a $1.9 million Granite Bay home.
Authorities say he actually was operating a pyramid scheme that collapsed after the 2008 financial crisis. Federal investigators spent three years investigating his varied business dealings before he was indicted in 2012 on 50 counts of wire fraud and mail fraud.
At one point, authorities estimated as much as $100 million in investor funds may have been lost in his schemes, although they later amended that.
He cut a deal with prosecutors to plead guilty in January 2016 to a single count of wire fraud, and prosecutors said they would ask for an 18-year term in the case, which affected investors in California, Arizona, Florida, Colorado, Nevada and Illinois.
Loomis signed the plea agreement, which called for restitution of nearly $500,000 seized from bank accounts, and agreed to cooperate with prosecutors. Seven months later he changed his mind, essentially firing his two attorneys and declaring that he wanted to represent himself in court and fight on.
“At the time I entered my plea, I did not believe I was guilty nor do I believe I am now,” he wrote in February 2017. “This was an act of capitulation, not one of confession.”
Mendez rejected Loomis’ effort to withdraw his plea, finding that he had done so with “competence and calm” and noting that Loomis had gone through four attorneys and was not entitled to have another appointed to serve as backup counsel.