Silberman Gets 46 Months in Federal Prison

Richard T. Silberman, one-time governor’s aide and wealthy financier, was sentenced Monday to 46 months in federal prison and said he was sorry that he laundered cash he believed was drug money.

In imposing sentence, U.S. District Judge J. Lawrence Irving said it was gratifying to hear Silberman express remorse for the first time in the complex case.

But it mattered more, Irving said, that Silberman, who “had achieved more than most men could ever have dreamed of,” had turned to crime, betraying himself, his wife--San Diego County Supervisor Susan Golding--and family and his community.

“It boggles my mind,” Irving said.

Irving chose precisely the prison sentence that prosecutors had recommended following a plea bargain struck last month in which Silberman pleaded guilty to a sole felony conspiracy count. Silberman was convicted in June after a two-month trial on another felony count--a technical currency violation--and could have drawn a total of 15 years in prison.

Prosecutors also had recommended a $75,000 fine. But Irving put off that decision, saying he needed the details of Silberman’s up-to-date financial status, adding he knew only that Silberman said he was ruined financially, with a negative net worth of $1.8 million.

Silberman, 61, who was a top aide to Edmund G. Brown Jr. when he was governor, had been charged originally with seven felony counts in an alleged scheme to launder $300,000 in cash that an undercover FBI agent had portrayed as Colombian drug profits. He stood impassively at a podium Monday as Irving imposed sentence.

Just before being sentenced, Silberman said that, in “this hour of my deep remorse,” he was “extremely sorry for the crime I have committed.”

Golding called the case a “tragedy of a very human nature. The only thing I can say is that when someone you love is in trouble, you do the best to stand by them.”

She confirmed that Silberman was nearly $2 million in debt. “I’m living on my salary,” she said. “Dick doesn’t have a salary.”

Golding also said, “My house has been on sale for a long time. That’s no secret.”

Four other men also have been charged in the complex case, two of whom already have pleaded guilty to a single felony count. The two others--including reputed mobster Chris Petti, 63, of San Diego--are due to stand trial Oct. 3.

Jack Norman Myers, a Malibu investment banker accused of being a courier in the alleged scheme, was also due to have been sentenced Monday. But Irving pushed that sentencing back to Nov. 19--presumably after the trial for Petti and Darryl Nakatsuka, 43, of Los Angeles, a security guard also accused of being a courier.

Prosecutors have indicated they don’t intend to call Silberman to testify against Petti or Nakatsuka.

Silberman had been a key player in statewide Democratic politics since the mid-1970s, serving as Brown’s chief of staff and, among other positions, as Brown’s secretary of the Business and Transportation Agency.

Silberman’s son, Craig, works for California Assembly Speaker Willie Brown (D-San Francisco) in San Diego.

Silberman also had achieved great wealth in business, particularly in banking and fast-food ventures. He was a general partner during early years of growth at the Jack in the Box restaurant chain.

However, his most recent venture, a San Diego-based gold-mining firm, Yuba Natural Resources, consistently had trouble paying its bills, prosecutors said.

Silberman was arrested April 7, 1989, at a Mission Bay hotel and, according to the FBI, he confessed to laundering the $300,000 and said he was searching for funds to save his financially troubled mining firm.

According to FBI notes of the alleged confession, Silberman also offered upon arrest to implicate California Assembly Speaker Willie Brown, Chula Vista Councilman David Malcolm and several prominent businessmen in wrongdoing.

Brown, Malcolm and the others have denied any wrongdoing.

Upon his arrest, prosecutors contended, Silberman already had done two laundering deals, using cash supplied by undercover FBI Agent Peter Ahearn--who was posing as Pete Carmassi, a front man for Colombian drug lords--and was negotiating with Ahearn to do a third.

He had been introduced to Ahearn after first contacting Petti, whom he knew from a barber shop both men frequented, prosecutors said.

The first deal was a November, 1988, exchange of $100,000 for stock in a subsidiary of Silberman’s Yuba Natural Resources. The second was a February, 1989, swap of $200,000 for U.S. Treasury bonds.

If convicted on all counts, Silberman could have drawn 75 years in prison.

But after the two-month trial, Silberman was convicted only of a technical charge of structuring a transaction to avoid the paperwork that federal law requires for any cash transaction over $10,000. He faced 10 years in prison on that count.

The jury deadlocked, heavily for conviction, on several other charges, including two counts of money laundering and a sole count of conspiring to launder money.

On Aug. 24, Silberman accepted a plea bargain and pleaded guilty to the conspiracy count, saying he had conspired to violate the same technical currency law. He could have drawn five years in prison for that charge.

Contradicting his trial testimony, Silberman admitted in the plea bargain that he believed he was laundering drug money. He said he had conspired to violate the currency law by structuring a deal so that thousands of dollars he believed to be drug proceeds were broken into smaller sums, then sent overseas to a bank account whose number he supplied.

As part of the plea bargain, Silberman also agreed to drop an appeal of the sole count on which he was convicted at the trial.

In exchange, prosecutors were spared the burden of a second trial, promised to dismiss four other charges against Silberman and agreed to recommend to Irving that Silberman serve a prison term of 41 to 51 months. Assistant U.S. Atty. Charles F. Gorder, the lead prosecutor in the case, also said he would urge no more than a 46-month term.

Federal investigators actually recommended more time in prison, up to 63 months, according to legal papers filed last week in the San Diego federal courthouse.

But Irving said Monday that 46 months was appropriate. He said that he at first had considered leniency because of Silberman’s many “contributions to the community.” But he said he dismissed that notion when considering the discrepancy between Silberman’s trial testimony and the plea bargain.

“The system expects and demands you be truthful,” Irving said. “You were not. The system can not tolerate people coming into court and being untruthful.”

Irving said he would recommend that Silberman be assigned to a minimum-level prison camp. He also said he would suggest to prison officials that Silberman be assigned to the facility at Nellis Air Force Base, near Las Vegas, since that would make it easier for visits by plane from San Diego.

The judge said he was likely to decide in the next few days whether to fine Silberman. But he said he was inclined simply to make Silberman pay the financial costs of incarceration, which he termed “substantial.”

Neither Gorder nor lead defense lawyer James J. Brosnahan of San Francisco knew Monday what those costs might total.

The plea bargain calls for Silberman to pay the government $5,500, the money prosecutors contend Silberman earned on the second of the two deals, the bond deal. In papers filed last week, Gorder contended that Silberman personally pocketed about $75,000 on the first deal, the stock deal, warranting a $75,000 fine.

Under new federal sentencing rules that abolished parole, convicted criminals must serve 85% of a sentence. Silberman will be free in just over 39 months from June 28, when he first went to jail, or October, 1993, Gorder said.

Irving made no mention at the sentencing hearing of Silberman’s suicide attempt.

Last February, fearing he could not get a fair trial before Irving, Silberman fled to a Las Vegas hotel and attempted suicide by taking an overdose of pills--including tablets that had been prescribed for a family dog, according to legal papers filed last week.