Darren Stumberger, the former portfolio manager and head of the bond trading section of defunct reverse mortgage lender Live Well Financial, was sentenced last Friday to time served on all counts for his role in the scheme. This was largely due to his cooperation with federal authorities before arrests were made in the case, which will allow him to avoid prison time.
This is according to court documents obtained by RMD, and transcript-sourced reporting from regional publication Richmond BizSense.
Sentencing documents reveal that while he gained a judgment of time served from presiding Judge Ronnie Abrams, each of the five counts against him will also carry “three years’ supervised release on each count to run currently to each other,” the documents said.
Stumberger will also be required to forfeit $1 million to the United States, which the prior reporting says stems from “bonuses that he earned as a result of the fraud.”
Leniency in the sentencing was derived from a similar place as the time-served sentencing previously handed down to Eric Rohr, the former CFO of Live Well: Stumberger cooperated with federal authorities very quickly, according to Assistant U.S. Attorney Scott Hartman and Judge Abrams.
“Mr. Stumberger, to his credit, without Mr. Hild knowing it, reached out directly to the [Securities and Exchange Commission (SEC)] and indicated a willingness to meet with them and cooperate,” Hartman said according to a transcript obtained by Richmond BizSense. “And I’ll note that was well before Live Well declared bankruptcy, well before the writing was on the wall, as it were, that Live Well was going to collapse.”
Hartman added that Stumberger’s testimony and subject matter expertise on the topic of reverse mortgage bonds proved critical to the government’s case, and in resulting explanations to the jury.
“I just want to say how sorry I am. I think about it every day,” Stumberger told Judge Abrams, according to the transcript. “I exercised poor judgment. I’m very sorry for putting my family through this. If I can go back and do things differently, I would. I just want to be a good example to my kids and just going to move on and find peace. That’s all.”
For her part, Judge Abrams explained that sentencing guidelines for crimes such as these would call for imprisonment of 8-10 years, but that the final determination rested with her.
“Sentencing is always hard […] but it’s hard in a case like this where I have before me a person who committed a serious crime for a lengthy period of time that caused real harm to real people, but he also did whatever he could to redeem himself,” Abrams said according to the prior reporting.
Abrams added that most people “cooperate after they’re arrested and not before,” and that while Stumberger was “clearly central to effecting the fraud,” he was “also critical to bringing that fraud to light and securing the conviction of others.”
Restitution from all the defendants remains likely, but that is a question that was recently moved to a magistrate judge after Hild’s most recent request for a new trial was denied. Hild was previously sentenced by Judge Abrams to 44 months in prison, but remains free pending an appeal.
