Convicted mortgage fraudster Angel Puentes thought he’d hit the motherlode when a judge cut more than half off the federal prison sentence he was serving and then unexpectedly ruled that Puentes no longer had to pay more than $4.4 million in restitution to his victims.
But Puentes is back on the hook for the money after an appeals court ruled this week that the judge didn’t have the authority to wipe out his debt to the victims.
The former North Palm Beach resident who now lives in Miami pleaded guilty to his role in a major mortgage fraud scheme involving properties in Broward and Miami-Dade counties during the property boom. He pleaded guilty to bank and wire fraud conspiracy.
In 2011, he was initially sentenced to a little more than eight years in federal prison for wire and bank fraud conspiracy and ordered, along with his co-defendants, to repay the banks victimized by the fraud.
While he was behind bars in the Federal Detention Center in Miami, Puentes helped authorities in the investigation of another inmate who was eventually convicted of smuggling nearly 840 pounds of cocaine, with a street value of about $10 million. The inmate, John Stirling, 61, is serving 7-1/2 years in federal prison.
Puentes testified in court that Stirling tried to get him to pass along a script of fraudulent testimony that he wanted other inmates to recite at his trial, said Puentes’ lawyer Paul Petruzzi.
In 2014, federal prosecutors went back to court and recommended Puentes should get about one-third cut off his prison term as a reward for his cooperation, a pretty common reward for convicts who help authorities bring others to justice. The prosecution recommended Puentes be re-sentenced to about five years and four months in prison.
Petruzzi, who handled Puentes’ re-sentencing, suggested Puentes deserved a bigger break for stopping a drug smuggler who was trying to corrupt the federal courts system in South Florida. Petruzzi proposed a 56 percent reduction.
Senior U.S. District Judge James Lawrence King agreed with the defense and reduced Puentes’ sentence to three years and six months in prison.
The judge said the case Puentes helped investigate “was a very, very serious case” and that Puentes’ assistance was “extraordinary and far beyond what we usually see.”
But then, without any prompting from either side, the judge said he was going to add “another reduction or reward” and ruled that Puentes would no longer have to pay the $4.4 million worth of restitution.
Puentes had only been required to pay about $25 a month from his prison commissary account while he was locked up so he had not made much of a dent in the debt, Petruzzi said.
Puentes’ co-defendants were still liable for the full debt. Co-defendants who are held equally responsible for a loss in federal cases generally all owe the full amount until it is paid off so that if one of them has an unexpected windfall, such as winning the lottery, that person could be required to pay off the full debt.
Puentes was released from federal prison in July 2014 but federal prosecutors in South Florida appealed the judge’s decision to wipe out Puentes’ debt.
In a decision issued Monday, a three-judge panel from the 11th U.S. Circuit Court of Appeals in Miami ruled the sentencing judge did not have the authority to eliminate Puentes’ restitution debt as a reward for his work on the drug case.
The Mandatory Victims Restitution Act makes restitution obligatory for certain serious crimes, including Puentes’ fraud, the judges ruled. It was the first time the federal appeals courts had considered this issue, the judges wrote.
Petruzzi said he and Puentes have not yet decided if they will ask the full appeals court to reconsider the decision.
If the ruling stands, Puentes will soon have to begin paying pay 10 percent of his monthly gross earnings to his victims: Bank of America, Ducat Insurance Group, Chase Bank, and Wells Fargo Bank.
Court records show Puentes moved here from Cuba in 1980 and became a U.S. citizen before his arrest. He listed his occupation as a publicist and nutritional supplement salesman when he was arrested but also ran his own real estate magazine, House King.
He is now living with his mother in Miami and working as a paralegal, his lawyer said.
“Mr. Puentes doesn’t have the ability to write a check for $4.4 million this week or any week,” Petruzzi said Tuesday.
Staff researcher Barbara Hijek contributed to this report.
pmcmahon@tribune.com, 954-356-4533 or Twitter @SentinelPaula
