'You're a good man,' a judge said. Then he sentenced Modesto man to 10 months in prison

Modesto businessman Andrew Katakis, crying while apologizing to a courtroom filled with family and supporters, was sentenced Monday to 10 months in federal prison for rigging bids at foreclosure auctions.His attorney said he might appeal the sentence. Katakis had asked to spend only five months in custody, while prosecutors sought as much as five years.

“You’re basically an honest man. You’re a good man,” U.S. District Court Judge William Shubb said to Katakis, who spent more than three years fighting his 2014 conviction before losing a new-trial request in June.Katakis, 53, owns Modesto-based California Equity Management Group and is managing partner of Lenders Financial Group LLC, and has been out of custody pending sentencing. He was ordered to report to the U.S. Bureau of Prisons on Feb. 1, but that could change if he decides to appeal.

The judge didn’t buy authorities’ description of Katakis as ringleader of a conspiracy to freeze out honest bidders at public auctions of foreclosed homes in San Joaquin County in 2008 and 2009. But the judge didn’t accept Katakis’ contention that he was an innocent victim.

Eleven others were caught and convicted, some not aware that they’d been breaking the law, the judge said. Several cooperated with authorities, who focused on Katakis. All were sentenced to seven months or fewer.

Katakis’ attorney, Elliot Peters, argued that he should get less time behind bars because he was not as guilty as some of the others.

In a lengthy statement, an emotional Katakis said he was guilty of being a poor judge of character.“I’m not a menace to society,” he said. “I don’t cheat my friends and I don’t steal from other people.”Friends, family and business associates sent 82 letters in support of Katakis. Some wrote glowing memories of his youth in Turlock, the hard-working son of a no-nonsense auto wrecking-yard employee. Others gave numerous accounts of Katakis helping his church, various people in need and feral cats.“I do take responsibility for the poor judgment that led me here,” said Katakis, careful not to acknowledge criminal wrongdoing. “I regret the pain (caused) to people behind me.”Too many people came Monday, in a show of moral support, to fit in the gallery of Shubb’s courtroom, so the judge allowed some to sit in the otherwise empty jury box.

“Sometimes an honest man can commit a crime,” Shubb said. What some people consider smart business sense, Congress decided is white-collar crime if it takes unfair advantage of another, the judge said.Conspirators agreed not to bid against each other, allowing them to obtain homes lost in foreclosure for artificially low prices, authorities said.Just after learning that federal agents were onto the scheme, Katakis tried to cover his tracks by attempting to erase evidence in five computers, the judge noted.

He was stern in levying a $1 million criminal fine —the maximum allowed by law, in this case —even though prosecutors asked for only $888,000. Shubb said he would fine Katakis even more if he legally could.And, Katakis must pay victims —home lenders, in this case —$505,000. Also, he must serve 500 hours of community service. Katakis said he wants to start even before reporting to prison, and the judge called that “admirable.”

“I will spend the rest of my life trying to restore (my good name),” Katakis said.

This story was originally published November 6, 2017 at 4:25 PM with the headline "'You're a good man,' a judge said. Then he sentenced Modesto man to 10 months in prison."