Nearly eight years in prison apparently did little to change David McDowell Robinson.
Robinson, an Ivy League graduate whose sterling academic resume belied his penchant for financial schemes, pleaded guilty in federal court in Baltimore yesterday to devising a large Ponzi scheme that lured more than 850 investors, including victims of Hurricane Katrina.
Prosecutors said Robinson's scheme attracted get-rich-quick investors who lost more than $1.2 million. It was almost identical to the operation Robinson was convicted of running more than a decade ago, government lawyers said.
In an unusual legal move, the 57-year-old Baltimore man did not sign a plea agreement with prosecutors and entered a guilty plea to all 27 counts of mail and wire fraud listed in the indictment. On each count, he could be sentenced to up to 20 years behind bars.
Given his past conviction in the same courthouse for a similar crime, U.S. Judge Richard D. Bennett told Robinson, "a lengthy prison term is clearly going to be imposed by me." He added later, "I don't often tell defendants that."
Flanked by his two attorneys but without the visible support of family or friends, a subdued Robinson left the courthouse yesterday and declined to comment on his plea. He told the judge that he suffers from bipolar disorder and takes the prescription drug lithium.
The judge released Robinson back to home electronic monitoring but changed the terms of his release to bar him from returning to work. Bennett also instructed Robinson to surrender to federal custody Jan. 11 so that he can undergo a full mental health evaluation while incarcerated.
A date for his sentencing has not been set.
Robinson entered the surprise guilty pleas several hours after his jury trial was to have started in U.S. District Court in Baltimore yesterday morning. Sentencing guidelines are likely to call for a prison sentence of at least 10 years.
It was unclear why Robinson did not sign a plea agreement with prosecutors, a document that often guarantees certain benefits to defendants from government lawyers.
Robinson's attorneys, Ron Kurland and Gordon Tayback, said they would not comment on the case.
In 1989, Robinson served a year in a work-release program after being convicted of defrauding businesses of more than $70,000 while he was an official with the Maryland Department of Economic and Employment Development. In 1996, he was sentenced to eight years and 10 months in federal prison for embezzling more than $500,000 from investors, including a group of ministers.
The federal judge who sent Robinson away in 1995 called him "one of the most pernicious scam artists I've ever heard of."
Robinson, who has degrees from the Gilman School, Cornell University and the University of Maryland School of Law, could be given 11 to 14 years in prison if the sentencing guidelines are followed, federal prosecutors said.
Robinson's attorneys did not comment on their legal strategy, but prosecutors said they expect the former businessman to argue that his mental capacity was diminished by his illness. That could lead to a reduced sentence.
"The government anticipates that we will oppose that," Assistant U.S. Attorney Jefferson M. Gray said.
In his latest scheme, prosecutors said, Robinson was chief executive officer of Liberty Trade International Inc., a company purportedly set up to provide high-interest, short-term "bridge" loans. Prosecutors said Robinson lied to investors when he said the company would use only secured loans backed by sufficient reserves.
Instead, prosecutors said, investors received promissory notes that lacked insurance. From September 2004 to March 2006, prosecutors said, Liberty Trade made $3.6 million in payments to investors, all of which came from other investors in a pyramid-like setup.
Prosecutors said losses totaled at least $1.2 million for those who didn't pull out their funds before the business went into receivership.
"Restitution will be made," Gray said in court yesterday.
Related coverage at baltimoresun.com/katrina