Malibu Man Gets a 16-Year Prison Sentence for Fraud : Courts: Michael Scherzer must also pay $2.6 million in restitution to E. F. Hutton, five thrifts and a bank.
A federal judge in Los Angeles Tuesday sentenced a Malibu man to 16 years in federal prison and ordered him to pay $2.6 million in restitution to six financial institutions he was convicted of defrauding.
U.S. District Judge Consuelo B. Marshall imposed the stiff sentence on Michael Saul Scherzer, 46.
“It is an appropriate sentence for one of the worst recidivists whom we’ve prosecuted in the bank fraud area,” said Terree A. Bowers, chief of the major frauds section of the U.S. Attorney’s Office, who prosecuted the case.
Last September, Scherzer was convicted of two separate schemes by a jury. In the first scheme, Scherzer obtained funding from E. F. Hutton by presenting a certificate of deposit as collateral and agreeing to pay interest for 10 years.
In fact, Scherzer did not own the certificate and he had submitted a fabricated, glowing financial statement on a company he owned that was, in fact, dormant and had no assets.
E. F. Hutton will receive $724,614 of the $2.6-million restitution Judge Marshall ordered.
Five small savings and loans located in Iowa, Kentucky, Missouri, Mississippi and South Carolina and a Boston bank also will be reimbursed for losses they suffered as a result of another Scherzer scam.
In this scheme, he also presented falsified financial reports and a phony corporate resolution showing that his board of directors had authorized him to obtain a $50-million loan.
Scherzer used the loan proceeds for his personal use rather than for real estate projects, as he had told the lenders. He used some of the money to buy a polo pony from Sylvester Stallone.
“This is one of the stiffest sentences we’ve obtained in the bank fraud area,” Bowers said.
“This sentence, combined with a 15-year sentence we got in another case Monday, is a strong indication that in the federal system if you are convicted of a fraud against a federally insured financial institution you could get a significant prison term,” he added.