Profitable Restaurant Helps Owner Get Free Lunch In Jail Time "Buy Down" In Mtg Scam; Court Guidelines Advise 41-Month Minimum, Judge Says 6 Is Enough

In Chicago, Illinois, The SouthstarStar reports:

• Attorney Michael Monico said the next six months will be difficult for his client James Garofalo, of Homewood. The former Homewood village trustee and local businessman was sentenced Monday to six months in prison for his role in a mortgage fraud scheme that included houses in several Southland communities.(1) [...] Garofalo, who runs The Egg & I restaurants in Chicago Heights and Tinley Park and whose family recently opened Grady's Grill in Homewood, pleaded guilty in 2009 to two counts of wire fraud.

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• Sentencing guidelines advised a minimum prison sentence of 3 years and 5 months for Garofalo, but [U.S. District Judge Wayne] Anderson said he sought a sentence that would send a message about the seriousness of Garofalo's crime but not cripple his ability to pay restitution to the lenders who were the victims of the scheme.

• "The (Egg & I) may disappear if I give you 41 months," Anderson said. "We want to see the business continue to operate and restitution to continue." Garofalo told the judge he has already paid about $250,000 in restitution - which included his recent income tax refund and his cashed-in IRA.

• Assistant U.S. Attorney Daniel May argued that Garofalo should not be allowed to "buy" his way out of jail. Anderson said a person should get points for paying back victims because it mitigates prior bad acts. The judge also credited Garofalo for cooperating in other cases involving the mortgage fraud scheme, and for contributing to needy causes through his restaurant business. "That's worth something," he said.

For the story, see Former Homewood trustee sentenced to six months.

(1) Reportedly, U.S. District Judge Wayne Anderson also gave Garofalo two years of probation, 300 hours of community service and ordered him to undergo alcohol treatment. According to the story, Garofalo, as co-owner of the now-defunct, Olympia Fields-based Madison Homes Partnership homebuilders, was charged with selling eight new and existing homes to straw buyers at inflated prices. Prosecutors reportedly said about $5.2 million was taken out in loans on the eight houses, but the straw buyers had no intention of living in the homes or paying back the mortgages, and that after the homes went into foreclosure and were resold, lenders wound up hosed for approximately $1.3 million.