Fraud Charges Add Jail Time for Ex-Official : Crime: Federal sentencing adds to the prison stay of Stephen Wagner. He had earlier pleaded guilty to state charges of embezzling $3.7 million from an Orange County school district.

A federal judge sentenced former school finance officer Stephen A. Wagner on Monday to 57 months in prison on federal mail and wire fraud charges, effectively adding about 13 months to the time he is expected to spend behind bars on state charges of embezzling $3.7 million from the Newport-Mesa Unified School District.

Under the terms of a plea bargain that Wagner’s attorney struck with prosecutors, his federal prison sentence will be served concurrently with the six-year prison sentence he received from a state judge.

But because of credits he can earn under both penal systems for good behavior and work in prison, he could be freed in January, 1997.

Citing the magnitude of his theft and the harm it had done to a school district that has suffered staffing and course cutbacks, federal prosecutors had argued for a nine-year prison term, which would have kept him behind bars much longer.

However, U.S. District Judge Linda H. McLaughlin agreed with a probation department recommendation that Wagner be sentenced to 57 months. In doing so, she imposed a term harsher than the usual sentence for Wagner’s crimes under federal guidelines, which call for a sentence in the range of 37 to 46 months in federal prison.

McLaughlin also ordered Wagner to pay restitution of $2.77 million, the balance of the embezzled money that the school district has not recovered.

“The amount of dollar loss does not capture the seriousness of the crimes,” McLaughlin told Wagner at sentencing. “The embezzlement of $3.7 million seriously jeopardized the school district and caused the public to lose confidence that the district could protect its money.”

The sentence, she said, was based on Wagner’s 6 1/2 years of criminal activity at the district and his “failure to restore the money or present a credible accounting of where the money went.”

Although she would have liked to have the 57-month sentence start after Wagner completes his state prison term, McLaughlin said there was nothing in the law that permitted her to require that the federal sentence be served consecutively, or after completion of the state sentence.

“This is just ridiculous,” said school board member Jim deBoom, who attended the hearing. “I can’t believe it.”

Ever since Wagner pleaded guilty to state embezzlement charges and was sentenced to what many considered a relatively light six-year prison term, federal authorities had contemplated charging Wagner with mail and wire fraud violations.

He was charged with three counts of wire fraud and one count of mail fraud that were linked to the embezzlement scheme.

Federal penalties for white-collar criminals are much more severe than those that can be imposed by the state. By filing federal charges, prosecutors exposed Wagner to a maximum 20-year prison term and up to $1 million in fines.

Outside court, Wagner’s attorney, Paul S. Meyer, praised McLaughlin’s sentence and her resistance to being influenced by a recent barrage of letters from school district officials, students and others who asked for the toughest sentence possible.

“The judge did a very, very fair job of sentencing, and she was able to stick to the facts rather than look at the emotional overlay of the case,” Meyer said. “I am absolutely satisfied that this was a fair sentence.”