Spokane jury to weigh fraud sentences

By The Associated Press

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U.S. District Court Judge Robert Whaley took the unusual step of ordering the jury to remain impaneled after it convicted Dale D. "Sage" Gibbons and Sally L. Gibson of conspiracy and multiple counts of wire fraud Wednesday.

Gibbons was co-owner of the defunct Century Mortgage, and Gibson is a Spokane real-estate saleswoman who worked with him. They will remain free pending sentencing.

Gibbons was convicted of conspiracy and 15 counts of wire fraud. Gibson was convicted of conspiracy and 11 counts of wire fraud. Gibbons could be sentenced to eight years, but Assistant U.S. Attorney George Jacobs could ask the jury to increase that to more than 11 years. For Gibson, a possible seven-year sentence could be increased to nine years.

The scheme, which ran from July 1997 through November 2000, promised potential home buyers $100 if Century Mortgage couldn't qualify them to buy a home, according to testimony.

Behind that pitch there was an elaborate mortgage-fraud scheme that cost lenders $1.4 million, the jury was told.

The scheme put many first-time home buyers and others with bad credit in positions where they owed more for mortgages than their homes were worth.

Whaley told jurors he was asking them to determine whether lengthier sentences were merited in light of a June 24 U.S. Supreme Court ruling.

Ruling in a Washington state case involving accused kidnapper Ralph Howard Blakely Jr., the nation's highest court said only a jury can determine all facts legally essential to a defendant's sentence.

The jury that convicted Gibbons and Gibson will convene again Monday to review the number of participants in the conspiracy, the defendants' roles, the amount of money lost, vulnerability of the victims and other criteria.

Those deliberations previously were routinely reviewed by federal judges during sentencing hearings.
 
Gibbons, Gibson and three others — Ronald Lee Burger, Cathy M. Patrick and John T. Hansen — were indicted last August after a two-year investigation by FBI agents.

The FBI investigation alleged the defendants tricked mortgage lenders by drafting phony documents, including fraudulent "gifting letters" suggesting the buyers were either being given or inheriting funds.

The scheme also involved falsified documents and exaggerated appraisals of homes that misled out-of-state lenders.

Burger, Patrick and Hansen earlier reached plea agreements, and are awaiting sentencing.