“My wife has dementia and has no short-term memory, and we have no idea what the future holds,” Wright said, reading the letter.
Schmidt, who pleaded “no contest” to more than 120 counts, also faces five years of “community control” or probation on release from prison and is expected to pay restitution of just over $34,000. He also faces a penalty of more than $1 million in a separate civil case pursued by the U.S. Securities and Exchange Commission in federal court last year.
Schmidt was charged with secretly shifting funds between client accounts, misleading customers for years as to their true financial status and betraying the trust of clients, many of whom were older and trusting of him.
In a sentencing memorandum, county prosecutors had recommended that Schmidt, 68, be sentenced to prison for at least a decade.
In the SEC civil case, U.S. District Judge Walter Rice ordered Schmidt to pay more than $1.1 million. According to the SEC, Schmidt misappropriated more than $1.16 million from accounts owned by seven customers, transferring their money to the accounts of at least 10 other customers — in effect, “robbing Peter to pay Paul,” as the SEC put it.
Judge Gregory Singer said he took into account Schmidt’s age, his “remorse even if convenient” and the fact that this was his first criminal conviction.
“Your honor, I feel terribly, terribly sorry that I single-handedly ruined the lives of people who were friends,” Schmidt told the judge, with Dayton attorney Steve Pierson at his side during the sentencing hearing.
“I feel constant guilt about the nightmare that I put these people through,” he added. “I was too much of a coward to tell people they were running out of money.”
More than a dozen of his victims and their relatives were in court Tuesday. Some voiced unhappiness with the sentence.
In the hall after the sentencing, Leo Kessler, whose aunt and uncle had been clients of Smith, told county Assistant Prosecuting Attorney Anthony Schoen that the issue was not that Wells Fargo had made restitution of about $3.7 million to Schmidt’s former clients.
Those clients can never be made truly whole, Kessler maintained.
“The issue was that he (Schmidt) broke the law, and he should have gotten 10 years,” he told Schoen.
Schoen told victims and relatives that Schmidt should serve the entire five-year prison sentence, with the exception of seven days’ credit for jail time already served and possible time off for “good behavior” in prison.
He also stressed that prison most likely will not be a pleasant experience for the defendant.
“At least for the next five years, he’s going to be eating bologna sandwiches, and you’re going to go to the Pine Club,” Schoen told families outside the court.
Pamela Greenwald, a Michigan resident, spoke to Singer in court on behalf of a relative who had been a client of Schmidt’s.
“Greg Schmidt is a despicable human being, preying on the weakest in society,” Greenwald said.
Schmidt did business under the Wells Fargo umbrella from a Paragon Road office. Wells Fargo fired him in 2017 after learning of the unauthorized financial transfers between clients’ accounts, prosecutors wrote in their sentencing memorandum.
A Wells Fargo representative declined to comment on the Schmidt case last year, beyond saying the company was cooperating with investigators.
Prosecutors and the SEC said that many of his former clients suffered from Alzheimer’s disease or dementia. The SEC also said that Schmidt continued to defraud one client even after that client’s death.
Afterwards, Pierson said the issue “is a very serious matter. I think that the judge considered all the relevant information.”
Asked if the sentence surprised him or Schmidt, Pierson said: “We talked about this being a possible sentence.”
About the Author
