A Texas couple reported to prison last week in the culmination of a lengthy and contentious legal battle that began over three years ago with their guilty plea to operating a $4 million Ponzi scheme using their family-owned art auctioneering business. Jerry and Wyonne Hart, former owners of Hart Galleries, began serving their fourteen-year sentence after losing a bid to have the United States Supreme Court order a new trial after alleged improprieties in the sentencing process by District Judge Randy Roll. The pair originally pled guilty in April 2009.
The Harts owned and operated Hart Galleries, which specialized in the sale of antiques and was once one of the most prestigious Houston art galleries. The business had been operated successfully for decades but, according to prosecutors, began using new customer money to pay expenses when debts started to pile up. Customers who enlisted Hart Galleries to assist in the sale of their property soon found themselves unable to collect proceeds of the sale, with the Harts offering various excuses relating to collectibility and, in one case, denying that the item had sold even though the customer attended the auction where the item successfully sold. After the Harts filed for bankruptcy, authorities opened an investigation and discovered that the couple had stolen more than $4 million from customers.
The Harts were charged with misapplication of fiduciary property, theft, and money laundering. When the Harts agreed to plead guilty to misapplication of fiduciary property, both sides agreed to leave the ultimate sentencing decision up to Judge Roll, with the Harts requesting a sentence of probation. Despite receiving more than 100 letters from Houston socialites and victims urging for leniency, Judge Roll labeled the pair "thieves" and sentenced them to serve fourteen years in prison.
Shortly after being sentenced, the Harts fired their trial lawyers and hired Robert Scardino and Ali Fazel (the same lawyers who served as trial counsel to R. Allan Stanford when he was recently sentenced to 110 years in federal prison for a $7 billion Ponzi scheme). The couple then moved for a new trial, citing evidence that Judge Roll had obtained sentencing advice from a fellow Judge who opined that he would "start at 15 [years]". After the motion for new trial was granted, the State of Texas appealed the decision to the Houston Court of Appeals, which reversed the trial court and reinstated the fourteen-year sentence. A last-ditch effort to petition the United States Supreme Court for a writ of certiorari was unsuccessful.
A copy of the Hart's brief to the U.S. Supreme Court is here.