FORT MYERS — A federal jury on Friday convicted a Naples real estate flipper on charges he defrauded 14 investors out of $3.3 million in property deals, involving a $1.2 million beachfront Naples mansion and other Gulf Coast properties.
The eight-woman, four-man jury deliberated 6½ hours over two days before finding Alfredo J. Sararo, 42, a North Naples tennis pro, guilty of five counts of wire fraud involving phone calls and faxes to discuss land deals, and four counts of tax fraud for not reporting that income in 2004 and 2005. Jurors acquitted him of a wire fraud count involving a retired Pennsylvania judge that Sararo, a former probation officer, used to lure Pennsylvania investors.
Over the prosecutor's objections, U.S. District Judge John Steele released Sararo on an unsecured bond, allowing him to return home to his wife, Jane, and their three young children until sentencing Nov. 26.
"Mr. Sararo remains confident that the legal process will ultimately clear him of any wrongdoing," Miami defense attorney Robert Rosenblatt said after the verdict, calling the retired judge, who testified after being granted immunity, "the mastermind."
Assistant U.S. Attorney Brendan Conway of Pittsburgh, the prosecutor, declined to comment on the verdict.
The trial, which began July 26, involved fake deeds, forged signatures, falsified sales agreements and loan applications from 2004, when Florida's real estate market was booming, until 2007. Sararo was accused of pocketing millions, embezzling funds from the judge's bank account and falsifying his signature to transfer a property to himself.
The prosecution contended Sararo used the money to buy his own properties and live a lavish lifestyle that included traveling, a $1.4 million beach-front Naples condo, a Ferrari, Jaguar and Maserati. The victims include a judge who quickly retired during an FBI investigation into investor, wire and mortgage fraud; another judge; doctors; a millionaire florist and businessmen.
Robert Horgos, a retired judge who lost more than $500,000, spent 2½ days testifying last week. Horgos had sued Sararo, accusing him and others of defrauding him out of $500,000.
Horgos was among 34 government witnesses, several of whom received immunity. Rosenblatt, who laid blame on Horgos and others, called eight; Sararo didn't testify.
Six people sat in court to support Sararo during closing arguments Thursday, including his wife and 5-month-old daughter; his brother, Christopher; and former Pittsburgh Steelers running back Erric Pegram.
Sararo was indicted a year ago by a Pittsburgh grand jury and the case was transferred to Fort Myers.
Conway told jurors Sararo couldn't have made a mistake on his taxes.
"We're not talking about a few dollars that he somehow forgot on his tax return," Conway said. "We're talking about a tremendous amount of money. You just don't forget that amount ..."
Sararo didn't tell the IRS about many properties, Conway said, and claimed he earned $15,294 in 2004, but made $660,000, and the next year, when he made $706,000, he reported $7,504 in income.
Conway detailed the forgeries, fake deeds and inflated prices Sararo provided sellers. Noting that investors relied on the judge, who trusted Sararo, a friend for 20 years, Conway said the victims' lack of due diligence wasn't a defense.
"To believe that Judge Horgos came up with this scheme on his own would suggest that he defrauded his own friends, his colleagues, but also that he defrauded himself and his family," Conway argued. "He lost his shirt."
Rosenblatt argued jurors had to find that Sararo willfully and intentionally filed false tax documents and wasn't just careless. Noting Sararo is in the business of buying and selling real estate, he downplayed his profits.
He maintained Horgos didn't lose money, pointing out he renovated his house, paid his mortgage and $150,000 in credit card bills. He contended it was Horgos who recruited his friends and made misrepresentations about a pre-foreclosure purchase program.
"This is a person who is greedy, who wants money," he said, noting the judge was investigated by a judicial oversight committee and ordered to return $75,000 after he charged a friend $150,000 for being executor of an estate.
During closing arguments, Sararo's brother and the football player mumbled, calling witnesses "liars" who "should go to jail," and shaking their heads at the prosecutor. The judge halted the proceedings to warn them he'd throw them in jail if they continued.