IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Criminal Action No. 11-cr-355-MSK-2

UNITED STATES OF AMERICA,

Plaintiff,

v.

1. WAUNITA WEINGART,

2. JOHN PHILLIP GALLEGOS,

3. ALOIS CRAIG WEINGART,

RESTRICTED - LEVEL 2

Defendants.

GOVERNMENT’S SENTENCING STATEMENT AND RESPONSE TO DEFENDANT

JOHN PHILLIP GALLEGOS’ SENTENCING STATEMENT AND MOTION FOR NONGUIDELINE STATUTORY SENTENCE

The United States of America, by and through United States Attorney John F. Walsh

and Assistant United States Attorneys Linda Kaufman and Martha Paluch, hereby

respectfully submits its Sentencing Statement and Response to the Defendant’s

Sentencing Statement and Motion for Non-Guideline Statutory Sentence (Doc. 266):

1. The government’s position, as stated in the Plea Agreement (Doc. 215 at 6-

7), is that by signing the applications described in the Stipulation of Facts for the

refinancing of his 2603 California Avenue property, the defendant acted with deliberate

ignorance. That is, he deliberately blinded himself to the fact that there was a high

probability that his applications contained false statements about his income and assets.

He chose not to read the applications or otherwise acquire knowledge of their specific

contents in order to avoid having actual knowledge of the falsehoods they contained. 

2. The deliberate ignorance theory applies in this case because at the time the

defendant obtained these loans, he knew that he did not have the assets or income that

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would enable him to make the monthly payments on the loans. He earned approximately

$2,000 per month, his annual income was only about $20,000 to $24,000, and he had no

other income. He owned three properties, 430 E. 6 Avenue, Denver, Colorado, 141 Lost th

Angel Road, Boulder, Colorado, and 7603 California Avenue, SW, Seattle, Washington.

Each of those properties was encumbered by at least one 100% or nearly 100% mortgage.

The defendant had worked in the mortgage brokerage and title insurance business for

years and had been licensed by the State of Colorado as a real estate title producer since

1999. He knew that the lenders would base their determination as to whether to approve

his loans on the information set forth in his signed applications. It is the government’s

position that he therefore chose not to read the information set forth on the applications so

that he could enjoy the benefit of the loans and later claim he had no idea that his

applications contained material falsehoods.

3. Predictably, the applications did contain numerous material falsehoods.

(See, Plea Agreement Doc. 213 at 5-11). The applications made it appear that the

defendant would be able to repay each of the four new loans, when in fact, he could not:

they substantially overstated his income (stating that he earned more each month than he

did in an entire year); they substantially overstated his bank balances; and they falsely

stated that he owned numerous other particular parcels of real estate which, in fact, he

never owned. (There were ten such parcels listed on the application which is the basis of

his count of conviction.) 

4. Although the Presentence Investigation Report states that “it does not

appear that the defendant has anything to show financially for his involvement in the

instant offense,” it is clear that he benefitted from each of the four loans described in the

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plea agreement, as follows: 

a. Approximately $352,000 of the proceeds of the April 2005 loan was

used to refinance the defendant’s outstanding mortgage on his

California Avenue property. 

b. $53,500 of the proceeds of the October 2007 loan were transferred

to the defendant’s personal accounts, and approximately $83,000 of

the proceeds were applied to payments associated with his training

as a pilot and the cost of the lease and operating expenses of the

aircraft he flew. 

c. $3,000 of the proceeds of the January 2008 loan was transferred to

the defendant’s personal account, and approximately $158,000 was

used to pay expenses related to the plane he piloted. 

d. The defendant drew the entire $100,000 line of credit, and deposited

it to his personal account, gave $50,000 to Waunita Weingart. See

Attachment 1, Affidavit of Dana Chamberlin.

The government does not dispute the fact that a large portion of the proceeds of the

above-described loans benefitted Waunita Weingart, that Craig Weingart also benefitted,

and that benefitted from the use of the plane as well. 

5. As a result of the defendant’s deliberate ignorance, the lenders lost over

$965,000.00.

6. The record, as it now stands, contains material inaccuracies about the

defendant’s personal history, which should be corrected. First, the defendant estimated

that he refinanced his California Avenue property twice. (Doc. 266-1 at 4). In fact, he

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purchased that property, 7603 California Ave SW, Seattle, Washington in July 2001

(Attachment 2 at 1-4) and refinanced it in December 2002 (Id. at 5-8), April 2005 (Id. at 9-

10), October 2007 (Id. at 11-14)and January 2008. (Id. at 15-18). Second, the record, as

it now stands, reflects that the defendant purchased his Boulder house in 2006.(Doc. 266-1

at 2 and 3). In fact, he and Waunita Weingart purchased that property, 141 Lost Angel

Road, in March 2002 (Attachment 3 at 1). The defendant refinanced it in his name alone

twice in March 2002 (Id. at 2-6), June 2002 (Id. at 7-8), February 2004 (Id. at 9-10), August

2005 (Id. at 11-12), December 2006 (Id. at 13-14), and April 2008 (Id. at 15-16). Third, the

record reflects that the defendant purchased a townhouse near 6 Avenue in 2004. (Doc. th

266-1 at 3, Report of Scott Humphreys, M.D.). In fact, the defendant purchased this

property, 430 6 Avenue, Denver, Colorado, a townhouse, in September 2000 (Attachment th

4 at 1-3), and refinanced it in his name alone in September 2000 (Id. at 4-5), June 2001

(Id. at 6-8), July 2001 (Id. at 9-11), November 2001 (Id. at 12-18), and December 2001. (Id.

at 19-20). 

7. The government does not dispute that the defendant has been diagnosed as

HIV-positive. His physical condition, however, is not extraordinary, and warrants neither a

downward departure nor the sentence of no incarceration advocated by the defendant. His

condition does not prevent him from being employed or traveling extensively. He does not

have an “inordinate number of potentially serious medical conditions” and is not at an age

where such conditions are likely to invariably get worse; nor is he in extremely poor health,

with complex needs for medical care such as kidney dialysis, an organ transplant, or a

colostomy bag, as in the cases upon which the defendant relies. See, e.g., United States

v. Willis, 322 F. Supp. 2d 76 (D. Mass 2004) and United States v. Rausch, 570 F. Supp.

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1295 (D.Colo 2008).

8. James Pelton, M.D., Medical Director for the Western Region of the Bureau

of Prisons, makes clear in his letter to the Court that the Bureau of Prisons is not only

capable of managing the defendant’s condition, but also that his condition is not unusual

or extraordinary among the inmate population. (Doc. 261).

9. Further, the government does not agree that the defendant would

be subjected to the abuses cited by Michael Martinez in his affidavit (Doc. 266-3 at 3-4).

Indeed, Mr. Martinez’ comments about conditions in the Federal Bureau of Prisons prior

to his 2000 retirement as a probation officer, and in particular, the distribution of inmates’

Presentence Investigation Reports among the inmate population are out of date. As Mr.

Chris Synsvoll, Supervisory Attorney for the Federal Bureau of Prisons, states in his letter

to the Court, the Bureau of Prisons changed its policy regarding the availability of

presentence reports among the inmate population in November 2002. Inmates are no

longer permitted to possess copies of their Presentence Reports due to concerns for their

safety. In addition, Mr. Synsvoll explains the intake screening measures in place to prevent

sexual abuse and to avoid segregated housing. (Attachment 5)

10. The government’s position is that a sentence to time served (less than a full

day in jail) would unduly minimize the seriousness of the defendant’s offense. But for his

criminal behavior, the lenders would not have lost more than $965,000.00.The government

does not believe that a sentence to time served would deter other white collar offenders

who may be motivated to claim ignorance to avoid the consequences of their criminal acts.

(See United States v. Kuhlman, 711 F.3d 1321, 1328 (11 Cir. 2013). (A sentence of th

probation for time served in a $3 Million health care fraud case failed “to achieve an

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important goal of sentencing in a white-collar crime prosecution: the need for general

deterrence.”).

13. Accordingly, the government recommends that the defendant be given a

sentence of incarceration within the applicable guidelines range, to be followed by a 5-year

term of supervised release.

Respectfully submitted this 29 day of April, 2013. th 

JOHN F. WALSH

United States Attorney

By: s/ Linda Kaufman 

Linda Kaufman

Assistant United States Attorney

1225 Seventeenth Street, Suite 700

Denver, Colorado 80202

Telephone: (303) 454-0100

Facsimile: (303) 454-0404

E-mail: Linda.Kaufman@usdoj.gov

By: s/ Martha Paluch 

Martha Paluch

Assistant United States Attorney

1225 Seventeenth Street, Suite 700

Denver, Colorado 80202

Telephone: (303) 454-0100

E-mail: Martha.Paluch@usdoj.gov

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