In an unexpected move, a California state judge refused to accept a plea deal that would send a California man to prison for seven years for defrauding dozens of victims in a $1 million Ponzi scheme, and instead indicated that the accused could agree to a 12-year prison sentence or choose to stand trial. Dennis Long, who was accused of operating a Ponzi scheme that targeted some victims at Bible studies and children's sporting events, had entered into an agreement with prosecutors that called for him to receive a sentence not exceeding seven years. However, Superior Court Judge Michael Popkins was swayed by the stories of dozens of victims who testified at Long's sentencing hearing, calling Long's conduct "appalling" and likening him to a wolf in sheep's clothing. Judge Popkins indicated that Long had the choice of accepting a 12-year sentence - of which Long would serve approximately half - or to proceed to trial on the charges.
Long, a former store clerk at an Encinitas Target, told dozens of investors that he could deliver handsome returns though investments in his erectile-dysfunction business that was on the verge of being purchased by a larger company for $4 million. Long touted his company, CDCDA, to potential investors he encountered at a church Bible study, at his daughter's school and volleyball clubs, and to mutual friends. Investors were shown a letter on an attorney's letterhead to assure them of the scheme's legitimacy, and were required to sign confidentiality agreements to prevent them from discussing the investment with others. In total, Long raised over $1 million from several dozen investors over almost a decade.
However, there was no impending sale of CDCDA nor was there an attorney vouching for the company's legitimacy. CDCDA's license had been permanently revoked, and the attorney whose letterhead was used to legitimize the company has claimed that his signature was forged. Authorities alleged that Long used investor funds for a variety of unauthorized personal expenses, including private school, car payments, travel, and extensive shopping trips. Long was arrested in April 2014 on 69 counts of grand theft, burglary, fraud, and other charges.
The burglary charge appears to be favored by prosecutors due to the California Penal Code's definition of burglary as the entry into a structure with the intent to commit a felony - in this case, grand theft. While the theory is certainly a novel one, surprisingly it has been used several times in California. A California man faced burglary charges in March 2014 for operating an alleged ATM Ponzi scheme, while another California man faced 37 counts of residential burglary in 2009 in connection with what prosecutors alleged was a $200 million Ponzi scheme. The choice by California authorities to levy burglary charges in white collar crimes may also be partially due to its categorization as a serious "strike" crime under California's Three Strikes Law, which may allow for a stricter sentence.
A hearing has been scheduled for May 12 to allow Long to consult with his attorneys about the proposed plea deal.