- Associated Press - Friday, December 19, 2014

EUGENE, Ore. (AP) - A federal judge who had to remind an Oregon developer convicted in a fraud case to stand to hear his sentence and then chastised him for refusing to confess his crime gave the defendant an extra two years in prison.

Joe LaCoste, of Albany, had agreed to a plea bargain in which he would get three years in prison for pleading guilty to conspiracy to commit securities fraud in the collapse of a real estate enterprise, the Eugene Register-Guard reported.

But he got five years after U.S. District Judge Ann Aiken began the sentencing Thursday with a prompt.

“It’s customary to stand,” Aiken told LaCoste, who then rose.

LaCoste told the judge he “screwed up really badly,” but Aiken said that’s not the same as admitting as part of his guilty plea that he lied, cheated and stole from people.

Aiken mentioned LaCoste’s leadership in St. Mary’s Catholic Church in Albany.

“How can you confess there,” she said, “when you didn’t confess here?”

LaCoste, once a football player for Oregon State University, is a former Albany teacher and wrestling coach who built an Amway sales and recruiting business and then went into real estate.

Court documents say he and his partners took in $5.2 million from more than 50 investors over two years, in increments of $100,000.

The venture, Willamette Development Services, planned housing subdivisions, shopping centers and a six-story mixed-use building in Albany.

It launched 11 projects, and some were partly built, but the enterprise was in trouble from the start, said Robert McGaughey, who represented 20 investors in a civil suit.

“The only way they were paying old investors was to get money from new investors,” McGaughey said in an interview.

The business collapsed in 2008 with less than $10,000 in assets.

McGaughey and Portland attorney Michael Esler recovered some money for most of the WDS investors by filing a lawsuit against lawyers, financial planners and insurance companies associated with the company’s transactions.

Later, LaCoste’s lawyer, Robert Rainwater, told the Albany Democrat Herald that judges almost always accept the terms of such plea bargains.

“We’re not very happy about the sentence, and we plan to appeal,” he said.

The judge also ordered LaCoste to stay out of four Willamette Valley counties - Linn, Benton, Lane and Marion - once he’s out of prison. Rainwater called that provision unconstitutional.


Information from: The Register-Guard, https://www.registerguard.com

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