“Calling Case Number 05-2015, United States versus Eric Lighter.”

The clerk in the courtroom of Judge Edward J. Davila called out the case, and the sentencing hearing for the Hawaii resident and convicted con artist convened at 10:28 a.m. in the U.S. District Court in San Jose, California, Northern District of California.

Following his conviction on all 17 counts of conspiracy, wire fraud, witness tampering, and blackmail, prosecutors had expected the 66-year old Lighter to spend a lengthy term as a guest in a federal prison.

The evidence established that Defendant conspired to defraud the United States by deceitful and dishonest means, including hiding assets for his clients and making false representations to the
IRS. The evidence further established that Defendant obtained more than one-half million dollars in wire transfers from his clients, and attempted to obtain millions of dollars in valuable real estate through false promises and fraudulent representations. When Defendant’s clients attempted to withdraw from his scheme, Defendant responded by threatening them. During the lawsuit filed against Defendant by Drs. Irwin and Susan Gootnick, Defendant conspired with his co-defendant, Samuel S. Fung, to commit blackmail and witness tampering. At sentencing, the government expects the evidence to show that Defendant attempted to defraud his clients of assets valued at more than $7 million.

Instead, the court confronted a unique and uncomfortable set of unique circumstances. It was, in Judge Davila’s words, “a case of first impression.”

And just 42 minutes after the hearing convened, it was over. Davila ordered Lighter be released and flown back to Hawaii at government expense. He was still a convicted felon. But “unique circumstances” made it impossible to pass sentence.

Here’s the story.

Lighter had been convicted by a jury in December 2011, and spent another four years in federal custody before he finally came up for sentencing. Over the course of those four years, he was first released pending sentencing, but ordered back into custody after almost immediately violating the conditions imposed on his release, then lying to the court about what he had done. He changed lawyers a couple of times, each time adding to the delay, and peppered the court with rambling, hand-written motions alleging government fraud and conspiracies against him, and underwent several reviews to determine whether he was mentally competent, the third time at the federal medical center in Butner, North Carolina.

There it was confirmed Lighter was suffering from “a mental disease or defect, was unable to understand the nature and consequences of the proceedings, and was unable to assist in his defense.” The several competency reviews were in agreement on this point.

That created a procedural barrier to sentencing Lighter to an extended term in prison.

“An incompetent individual cannot be sentenced,” Judge Davila explained. “That’s a violation of due process.”

Usually a person convicted of federal crimes but found to be mentally incompetent could be given a provisional sentence and committed for further treatment, with the hope their condition would improve enough with treatment that they could return later for sentencing.

However, that was not possible in Lighter’s case. The medical review determined Lighter suffers from Parkinson’s disease, and was unable to take the drugs that would be used to treat his mental condition because they would “put his life at risk given his Parkinson’s disease,” according to the hearing transcript.

Prosecutors tried to convince the judge Lighter should not simply be allowed to go free. They argued that while Lighter wasn’t believed to pose a physical threat to others, the doctors that examined him felt he did pose risk of financial harm to others “due to his intact cognitive function,” according to a transcript of his sentencing hearing. But Davila ruled that despite posing an economic risk, Lighter’s release “would not create a substantial risk of bodily injury to another person or serious damage to property of another as a result of mental disease or defect,” the criteria spelled out in the law governing commitment for treatment.

“The court, therefore, would order Mr. Lighter released from custody forthwith,” Davila announced, while making clear he was not dismissing the charges, nor setting aside the convictions.

Lighter’s lawyer, Jay Adam Rorty, told the court his client was at that time “not only indigent, he possesses no clothes, no identification, and no local relationships.”

He was flown back to Hawaii within days of the hearing.