FORT WAYNE – The courtroom was packed Friday to see what sentence Joseph Garretson would receive for running what state officials called one of the worst fraud cases they had seen.

Allen Superior Court Judge Fran Gull ordered the former title broker to spend 11 1/2 years in prison and to pay more than $3.4 million in restitution.

Friday’s sentence came more than five months after Garretson, 37, pleaded guilty – admitting to conversion or misappropriation of title insurance escrow funds, corrupt business influence and unlawful loan origination activities.

Garretson admitted to arranging mortgage refinancing loans for a number of area clients, many of whom were acquaintances, then not using the money to pay off the initial loans, causing mortgage holders to default. The total amount of the loss was estimated at $2.7 million. And when Garretson was making mortgage refinancing loans through his company, Fort Wayne Mortgage, he was barred from acting as a loan broker.

Evidence presented during Friday’s lengthy sentencing hearing indicated Garretson spent the majority of the money on what was characterized as “lifestyle enhancements” – a $700,000 house, a Cadillac Escalade and Mercedes-Benz, trips to Las Vegas, shopping sprees and tickets for Colts playoff games.

And in the course of such luxuries, Garretson’s income as stated on tax returns was $50,000, said David Maxwell, an enforcement investigator with the Indiana Secretary of State’s Office.

Maxwell called the fraud among the worst he’d seen.

Garretson was adamant he gave much of the money taken, about $1.8 million, to Todd Leary, former Indiana University basketball star and radio commentator, who faces 17 felony counts alleging his involvement in the title fund scheme. Leary was arrested in February, days after Garretson’s guilty plea and minutes before he was to call the IU-Purdue basketball game at Assembly Hall in Bloomington.

Leary had been employed by the IU Radio Network.

According to court documents, Garretson told prosecutors Leary pressured him for money, threatening to reveal the scam.

Maxwell and Allen County Deputy Prosecutor Tim McCaulay said the evidence revealed Garretson transferred only about $1.1 million to Leary.

Along with numerous letters from family and friends, Garretson’s sister, Jodi, and his grandmother-in-law spoke on Garretson’s behalf. Most, as well as Garretson himself, characterized his conduct as “poor business decisions,” made to keep up a certain lifestyle as the economy and mortgage industry tanked.

After casting a bit of blame on Leary and the media for portraying him too negatively, Garretson tearfully apologized, describing the hurt he has caused his family and how he is now having to work two jobs to provide for them in a downsized lifestyle.

But then Gull listened to victim after victim describe their anxiety over the possibility of losing their homes.

“He’s not only messing with my life now, but my future,” said Veronica Muskin, who described battling depression as she tries to climb out from underneath her first mortgage and the second one obtained through Garretson.

“Even though I sold my home, I still own it,” she said.

The Thomasma family, now living in Seymour, talked about a similar difficulty.

“It’s not over for us,” Alisha Thomasma said, adding that their house is in foreclosure. “We had to decide what mortgage to pay. Everyone says, ‘Get a lawyer and give us our money.’ ”

McCauley told Gull that Garretson’s crimes were among the most serious financial crimes in Indiana law, second only to laundering money for terrorists. Class B felony crimes – punishable by six to 20 years in prison – are most often crimes of violence – rape, manslaughter and child molesting.

“That is the class of crime to which he pleaded guilty,” McCaulay said.

So far, Garretson has paid less than $60 in restitution, which, if paid at that pace, would take more than 28,000 years to make the victims whole, McCaulay said.

While Gull said she believed Garretson was remorseful, she could not get past the mess he created.

“You wreaked havoc on any number of people for your own benefit,” Gull said. “You don’t get it. You violated the trust of any number of friends and family in an egregious fashion.

“You came crying to me today because your friends won’t speak to you,” she continued. “What did you expect, Mr. Garretson? Them to invite you to dinner, in the home you put at risk?”

She sentenced Garretson to 10 years on the charge of misappropriation of title funds, four years on the charge of corrupt business influence and 1 1/2 years on the charge of unlawful loan origination activities. Two of the sentences will be served at the same time and Gull suspended two years of the four-year sentence, which will be served on probation.

The $3.4 million in restitution will be divided among 15 victims, according to court documents.

Gull also ordered Garretson to transfer all money in any bank account affiliated with his companies – Fort Wayne Title or Fort Wayne Mortgage – to be used as restitution.

rgreen@jg.net