TAMPA -- Philip Coon, the former Coast Bank executive who used borrowers’ construction loans in a fraud scheme that generated more than $1.5 million, will serve 18 months in a federal penitentiary, a federal judge ruled Thursday.
The sentence followed almost three hours of comments from three attorneys involved in the case: one representing Coon, one for the federal government, and a third representing about 200 borrowers. Coon, who had moved to upstate New York, also made his first comments in years. breaking down in tears as he promised the judge that he “will be the best person I can possibly be.”
“What I’ve done is inexcusable,” said Coon, who turns 58 today and at one point seemed on the verge of fainting. After the court proceeding, he personally thanked the FBI agent who had helped investigate Coon’s role in the scheme, which also involved former mortgage broker John Miller, who will be sentenced later this month.
Coon also apologized to the “court and the government.” When asked outside the courtroom if he had any words for the hundreds of borrowers who had unsuccessfully sought to share in the restitution Coon is paying to the federal government, he said he “prays for them every day.”
“I hope this gives them some satisfaction,” Coon said. “They seem to be a bunch of fine folks.” Finally, Coon praised Alan Tannenbaum, the Bradenton attorney who represents almost 200 of the nearly 600 borrowers nationwide that took out loans with Coast Bank from 2004 to 2006 for homes that were either never built or only partially built.
“He’s a good guy,” Coon said. “He’s just trying to do his job.”
Tannenbaum made one last, long effort Thursday to stand up for the borrowers, taking the full hour allowed him by federal Judge Elizabeth Kovachevich to repeat his assertions that Coon had conspired with a defunct construction company and failed to alert bank officials when he knew the company was unable to fulfill its obligations.
Tannenbaum contended Coon deserved the maximum sentence allowable under the plea agreement Coon had reached three years ago with the federal government. That maximum was 46 months.
His comments drew both impatience from Kovachevich, who pressed Tannenbaum to limit his comments only to what’s already in the case’s record, and repeated objections from Coon’s attorney, James Felman, who has frequently accused Tannenbaum of misrepresenting the facts of the case.
Felman also asked the judge to give Coon only a year of home detention in recognition of how the case has dragged on since Coon confessed in 2008. “Mr. Coon has had his life on hold for almost three years,” Felman said, describing his client’s situation as “probation with no ending.”
“That’s punishment, to live like that day after day, year after year,” he said. Felman also described Coon as a generous criminal who gave away almost all of the money he skimmed to other people including his church, a needy coworker, and immigrants.
Attorneys representing the federal government had asked Kovachevich to sentence Coon to 37 months.
The real estate scheme that enabled Coon to defraud Coast Bank centered around St. Petersburg’s Construction Compliance, Inc., a homebuilder that eventually became insolvent, leaving borrowers on the hook for loans of up to $90,000. Throughout the loan program’s two-year history, Coon and Miller conspired to add an extra point to the loans’ closing costs, generating the money that Coon pocketed and used to purchase gifts for his wife and friends and donate to a church.
Coast Bank began to fail in 2007 and was purchased by First Bank, which then pursued most of the borrowers for the loans they had taken out while Coon was Coast’s executive vice president.
Coon and Miller entered a plea agreement back in 2008 confessing to the crime and have already begun paying restitution, which goes to the federal government given Coast Bank’s collapse.
An ongoing effort by borrowers to receive part of that restitution delayed the two men’s sentences until this month. The borrowers represented by Tannenbaum had sought a total of about $300,000 in restitution, or about $1,000 to $2,000 apiece. Courts have repeatedly ruled that Coon’s fraudulent one-point addition was a cost to be borne by the defunct builder and not the borrowers.
Coon will report within a month to a federal penitentiary in either New York or Pensacola. His sentence also includes three years of probation, during which he cannot take out credit without the approval of his probation officer, and must undergo random drug testing. He also is required to forfeit all of his assets to the federal government and has already turned over the Bradenton home he used to own with his wife Melissa, also a former Coast Bank executive.
Christine Hawes, Herald Business writer, can be reached at (941) 745-7081.