A businesswoman who cheated a group of Otay Mesa nuns out of $285,000 in a real estate scheme was sentenced Friday to three years in federal prison.
Linda Rose Gagnon, 59, of Tustin was also ordered to pay at least $285,000 in restitution to the victims, said Assistant U.S. Attorney Rob Keenan.
Santa Ana-based U.S. District Judge Andrew Guilford may increase the restitution if more evidence is provided for related losses, the prosecutor said.
Gagnon, who was found guilty in November of three counts of wire fraud, was ordered to surrender to authorities to begin serving her 37-month sentence by June 13, Keenan said.
The prosecutor had sought a 57-month sentence, while the defendant’s attorney requested probation with 24 months of home detention, according to Keenan.
Gagnon persuaded the U.S. Province of the Religious of Jesus and Mary Inc. to give her $285,000 in 2008 to bid on a retirement home in San Diego for the congregation of Roman Catholic nuns.
Instead of acquiring the property, however, Gagnon spent the money on herself, Keenan told jurors.
She billed her company as one that helps clients handle distressed properties and other real estate deals, but has never been licensed as a real estate agent or broker, Keenan said.
Gagnon executed the scheme through her company and doctored letterhead by using an attorney’s name unwittingly, he said.
When the nuns grew suspicious, Gagnon stalled them with lies and by “withholding key facts,” Keenan said.
Gagnon was visiting friends in Rhode Island when she heard about four nuns facing eviction from a home at 1318 Pequena St., a few miles from the Mexican border, Keenan said.
The nuns, who had been living there for about a year, were told the home was about to fall into foreclosure, according to Keenan, who said they wanted to acquire it for themselves and to provide a retirement destination for other sisters.
Gagnon said she could help them acquire the property and described herself as an expert in short sales, Keenan said. She also claimed to have $1 million in her corporate account so she could front the nuns the money for the acquisition.
Before a Dec. 8, 2008, auction, Gagnon told the nuns she would need them to send her $285,000, despite her claim of having $1 million, Keenan said.
When the nuns called to see how the auction went, Gagnon told them it had been postponed and added that she could hold onto the money for when the auction happened, Keenan said.
“Immediately upon its receipt, Ms. Gagnon went on a spending spree with the retirement money of the (nuns),” the prosecutor said.
On Dec. 18, the nuns requested their money back “to be on the safe side,” but Gagnon “of course couldn’t do it because almost $100,000 had been already spent,” Keenan said. “She blew through all of (the nuns’) money — by February 5th it was all gone.”
Gagnon collected about $76,000 in cash at the bank, Keenan said. About $42,900 was used to pay back loans, he said.
Some of it was spent on pet services and a trip to San Francisco. She also paid off credit card bills and back-due wages of employees, Keenan said.
In the meantime, the home the nuns wanted to buy was purchased for about $212,000, Keenan said.
In the spring of 2009, Gagnon told the nuns that the money they had sent her initially was “tied up in triple or double escrow,” so she would need the sisters to send her another $280,000 so she could acquire the Pequena Street home, Keenan said.
When the nuns declined, an “undaunted” Gagnon approached a colleague to “lend” her the money to buy the property for the nuns. “He wisely decided to pass,” Keenan said.
The nuns instead turned to a lawyer and escrow officer, who acquired the property for $255,000, Keenan said.
When Gagnon “continued to stall, lie and conceal the true facts of what happened to the money,” the nuns turned to the FBI, he said.
– City News Service