N.J. lawyer jailed in $1M scam

A suspended North Jersey lawyer, who masterminded a scheme to bilk the U.S. Small Business Administration of almost $1 million was sentenced yesterday to 30 months in a federal prison.

Gary Lesser, 66, of Rockaway, Morris County, had pleaded guilty in January to wire fraud and money laundering.

U.S. Senior District Judge John P. Fullam also ordered Lesser to make restitution of $993,000 in the case. He is to surrender to the Bureau of Prisons on July 14.

Defense attorney Peter Kratsa said Lesser suffered from a "mood disorder," which fed his client's "grandiose, self-defeating and reckless behavior."

He asked for a sentence of five years' probation, similar to that of another defendant in the case.

Assistant U.S. Attorney Derek Cohen requested a guideline-range sentence of 46 to 57 months, noting that Lesser, unlike defendant Eric Katz, "didn't immediately cooperate" and was the "architect" of the fraud.

Fullam said he would have given Lesser more jail time but for Katz's sentence.

Katz pleaded guilty to wire fraud and was sentenced in January by a different judge to three years' probation, with six months of house arrest. He was also ordered to make restitution of $993,000 to CIT Small Business Lending Corp., which made SBA loans.

Fullam said that Lesser had orchestrated the scheme "to earn a commission" and that a sentence of probation was "totally unacceptable."

Lesser told Fullam that his mental-health problems "overwhelmed" him but that he accepted "full responsibility" for his crimes and apologized to his family, victims and the feds.

Authorities said Lesser had submitted bogus information to obtain an SBA-guaranteed loan for Katz.

Katz was business manager of a Philadelphia-based supermarket company, Better Food Distributors, Inc.

Authorities said Lesser directed Katz to set up a company, New Better Food Distributors, to facilitate the scam.

New Better Food was ostensibly going to acquire Better Food.

The feds said Lesser told an accountant, Michael D'Elia, to prepare a bogus tax record for New Better Food that was submitted with the loan application.

Katz was supposed to invest $250,000 into New Better Food before any loan proceeds could be disbursed. Lesser and Katz submitted a phony affidavit and documents to CIT, making it appear Katz had invested the money.

The loan was approved in October 2004 and Katz received a check, minus closing costs, for $953,000. The feds said Lesser pocketed a $95,000 fee and laundered most of it through D'Elia. D'Elia pleaded guilty to money laundering and also cooperated with the feds. He's awaiting sentencing.

Lesser's license to practice law in New Jersey was suspended in 1993 because he had disbursed more than $250,000 from his trust account for personal expenses and his license was never reinstated, the feds said. *