Daniloo receives 7½ years

Banker stole as much as $7 million

By GARTH STAPLEY
gstapley@modbee.com

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SAN FRANCISCO — Modesto mortgage broker Tony Daniloo, who fleeced as much as $7 million from lenders and clients while posing as a wealthy philanthropist, will spend 7½ years in a minimum security federal prison, a judge ruled Wednesday afternoon.

Daniloo apologized profusely and pledged to try repaying victims after his release.

"I want to prove to everyone I have changed," said Daniloo, unshackled and wearing beige prison garb, wire-rimmed glasses and slip-on tennies. "I want to raise my son honestly and righteously."

1998-2002: Bay Area mortgage broker Tony Daniloo siphons money from elderly clients.
FALL 2002: The Alameda County district attorney's office and U.S. Secret Service begin investigating.
EARLY 2003: Former clients begin suing Daniloo and his wife, Nansi.
OCTOBER 2003: Using forged signatures, Tony Daniloo steals from an elderly Alzheimer's patient, according to a lawsuit.
DECEMBER 2003: Tony Daniloo opens DreamLife Financial, a Modesto lending firm that specializes in loans to people with poor credit. The company eventually opens seven branch offices.
FALL 2004: DreamLife draws public praise for pledging $4.5 million to Turlock's Emanuel Medical Center and $1 million to California State University, Stanislaus.
DECEMBER 2004: The Bee documents the Daniloos' bankruptcies, late tax payments, résumé forgeries and lawsuits. "I am not a bad person," Tony Daniloo tells The Bee. A title insurance company sues, saying the couple diverted millions from escrow accounts. A witness sees employees shredding documents in the DreamLife corporate office, authorities say. The company goes out of business. The Daniloos are arrested. Federal investigators raid the Daniloos' Turlock home and DreamLife's Modesto offices.
MAY 2006: Tony Daniloo settles for a six-year, eight-month state prison term and agrees to repay victims $1.34 million, pending federal charges. Nansi Daniloo agrees to repay $368,000 and perform volunteer work.
JUNE 2006: U.S. attorneys charge Tony Daniloo with one count of wire fraud, and he is transferred to federal custody.
AUG. 31, 2006: Federal criminal grand jurors return a 122-count felony indictment based mostly on transactions in and around Modesto.
DEC. 5, 2006: Tony Daniloo pleads guilty to all the charges.
WEDNESDAY: Tony Daniloo sentenced to 7½ years in federal prison.
SAN FRANCISCO — At sentencing Wednesday, it was almost as if the judge apologized for the inconvenience when he sent Tony Daniloo to federal prison for 7½ years.
U.S. District Court Judge William Alsup talked eloquently and sympathetically about Daniloo's "great mistake."
Sorry, but a mistake is an accounting error.
Stealing $7 million blatantly and boldly from unsophisticated and unsuspecting victims, living like a king off his thievery and destroying the lives of others in the process — as Daniloo admits he did — went beyond the borders of bad judgment. It was purely criminal, devious and intentional — make no mistake about it.
The 108-month federal prison sentence, less 18 months for time served while a state case proceeded in Alameda County, seems light when you consider the number of people Daniloo targeted to deceive, hurt and bilk.
One victim committed suicide.
Others lost everything.
The time Daniloo received Wednesday amounts to less than a year in prison for every $1 million he stole.
But the most amazing thing about this day was the tone of the judge — a man whom reporters who cover the federal courts say is generally very hard-nosed.
The building alone is an ominous place. Federal courthouses exude power and protocol and are seldom warm and fuzzy places. I mean, they even assign room numbers to the restrooms. How much more cold and calculated can they get?
Yet, instead of the dressing down I (and others) expected Alsup to give a confessed con artist on behalf of the law and the victims, he gave Daniloo a pep talk.
Cornered with overwhelming evidence, Daniloo had pleaded guilty to 122 counts in a deal cut by attorney Deborah Levine and federal prosecutor Michael Wang. Sentencing laws no doubt limited Alsup's options to two: Approve it or deny it. He approved it.
Still, he treated Daniloo with greater respect than he accorded either of the attorneys, chastising them for legal errors in concocting their plea deal and the accompanying documents.
He graciously thanked Daniloo's parents for attending, sympathizing with the pain they must feel seeing their son in beige prison issue.
While acknowledging Daniloo's crimes, Alsup predicted "good chapters" in Daniloo's future, calling him a man of "great potential" and a "good person who made a great mistake."
What about the chapters in the lives of those good people Daniloo ripped off — victims who endured financial ruin and humiliation? He'll get out of prison about the same time they're getting back on their feet and cleaning up their credit reports.
Because the proceedings were in San Francisco and midweek, and because the sentencing date was changed repeatedly, only a few victims attended. And those who did declined to address the court — to vent, to rail at Daniloo and to get in one parting shot while demanding a tougher sentence.
Thus the verbal lynching party that often comes before a sentence is pronounced never materialized. To the contrary, Alsup granted the defense's wish by recommending that the Bureau of Prisons send Daniloo to the minimum-security federal facility in Lompoc, rather than the prison in Atwater.
Nobody expected him to go to notorious Pelican Bay or communicate with Scott Peterson via Morse code at San Quentin — state prisons that house the worst of the worst.
Lompoc, by comparison, is a country club.
Daniloo deserves something in between.
His wimpy apology – "I'm sorry for everybody who was caught up in what I've done" — will carry about as much weight with his victims as his promise to "work hard to repay whatever I can" after his release in 2014.
Equally pathetic is that authorities were onto his shenanigans in 2002, but didn't arrest him until after The Bee exposed him in December 2004. He stole $4.5 million in 2004 alone.
A mistake? No. It was a crime, no matter how they spin it.
To comment, click on the link with this column at www.modbee.com. Jeff Jardine's column appears Sundays, Tuesdays and Thursdays. He can be reached at jjardine@modbee.com or 578-2383.

Saying that Daniloo is taking his punishment "in a very manly way" and predicting "good chapters" in the book of Daniloo's future life, U.S. District Court Judge William Alsup noted that the 32-year-old Turlock man has cooperated with authorities since his arrest in December 2004.

"I am certain that in the long run, something good is going to come out of this," Alsup said to Daniloo in fatherly tones. "You have a long life in front of you to make up for this. Good luck to you."

Although some people drove from Stanislaus County to witness the proceeding, none spoke when Alsup asked for victims' statements.

Anita Vitti of Patterson, whose twin sister, Theresa Lund, committed suicide after losing nearly $1 million in a family trust in dealings with Daniloo, said she was shaking too badly to rise when the time came to speak.

"I'm appalled at the leniency," Vitti said afterward. "When the judge talked about what a good person (Daniloo) is, it was very upsetting."

Daniloo's prison term is the product of a plea agreement reached in December. He pleaded guilty to 122 counts: 77 counts of money laundering, 41 counts of wire fraud and four counts of mail fraud.

Judge waived $12,200 fine

Attorneys for both sides failed to agree on how much restitution Daniloo should pay victims, so Alsup scheduled a May 1 hearing. He waived a $12,200 government fine, saying Daniloo had no means of paying.

After the hearing, Daniloo's attorney, Deborah Levine, said her client has turned over much of his property to authorities. She refused to say how much money is contemplated in the restitution dispute.

Although Atwater's federal prison is closer to Daniloo's loved ones in Turlock, family members requested he be sent to Lompoc Federal Correctional Complex because it specializes in substance abuse treatment. Alsup complied. Daniloo has been in custody in Alameda County.

A plea bargain in the state case suggested that he abused drugs before his December 2004 arrest.

Outside the courtroom, Vitti questioned why the judge put a premium on Daniloo's drug treatment and proximity to family.

"(Daniloo) didn't care what he did to other families," said Vitti, whose sister shot herself in 2004 after he arranged deed transfers and loans for her. Vitti said the money disappeared.

In December, Daniloo admitted to preying on the elderly, minorities and people with bad credit. His victims include his parents, his wife's parents, his friends and neighbors, and an Alzheimer's patient, according to lawsuits and a prosecution investigator.

But the judge had kind words for Daniloo and his family, some of whom attended Wednesday's sentencing. His parents, David and Susie Daniloo, sat the front row of the gallery and stood when recognized by Alsup.

"It means a lot to your son and to me to have you here," Alsup told them. "I know it hurts you to be here. This is probably the hardest thing you have had to do. It will mean a lot to your son in the long run if you support him in this."