U.S. District Judge Jennifer Dorsey showed leniency Monday and sentenced a Henderson couple to one day behind bars and five years of supervised release in a $354,000 short-sales scheme.
Cynthia Hosbrook, 41, and Robert Hosbrook, 52, both former real estate agents, were ordered to serve six months of the sentence under electronically monitored home confinement and pay the $354,000 in restitution to the lending institutions. Both were ordered to serve 200 hours of community service.
Their day in federal custody amounted to several hours in the office of the U.S. Marshals Service at the courthouse after the sentencing.
Assistant U.S. Attorney Gregory Damm had sought 15-month prison sentences for the Hosbrooks, saying they were motivated by “greed.”
But after a two-hour hearing, Dorsey said she preferred to avoid prison terms for the Hosbrooks so they could continue to run their struggling sandwich shop and make restitution payments. The state took away their real estate licenses and fined them each $10,000.
The Hosbrooks, who already have paid back $125,000, apologized to Dorsey for their actions and made emotional pleas for their freedom. They said they spend most of their time at their Firehouse Subs near UNLV working with their 15 employees and would lose the business if they had to go to prison.
“My goal is the have the opportunity to make this right,” a tearful Cynthia Hosbrook said, acknowledging that the scheme ended up having a “devastating” impact on their lives. Robert Hosbrook echoed those words when he had a chance to address the judge.
Both pleaded guilty to one count of bank fraud in November. They admitted defrauding Wells Fargo Bank and Freddie Mac in the scheme between 2008 to 2010.
The Hosbrooks lied to the banks in the 2010 short sale of their house, claiming they were doing it because of a personal hardship, according to their plea agreements.
They promised the banks that they would not stay in the house after the sale and that they were selling it to someone who wasn’t family.
They ended up selling the house to Cynthia Hosbrook’s mother in a cash transaction and continued to live in it, causing a $170,000 loss to the lending institutions.
Damm alleged in court Monday that the Hosbrooks also bought a vacation home in Arizona after short selling the Las Vegas home. But Cynthia Hosbrook’s attorney William Terry argued that her mother bought the home and gifted it to the couple.
The Hosbrooks said in their plea agreements that they made two other fraudulent short sales of homes in Las Vegas and North Las Vegas in 2008 and 2009.