Crime Pays

How the Feds let S&L swindler Clifford Sinclair get away with millions

At one point during the Lubbock trial, under cross-examination by defense attorney Fawer, Sinclair would provide only the sketchiest outline of his finances.

"Would we be in the ballpark if we suggested that right now, as you sit here, you are a millionaire?" Fawer asked. "Would that be a fair statement?"

"I would hope so," Sinclair responded.
Sinclair's professed ignorance concerning his own bank accounts rang hollow even with the prosecution.

"Believe me, it would have been a lot better from a prosecutorial standpoint if [Sinclair] had divested himself of everything, because we were beaten over the head pretty severely with that," Hart says. "If all this money going to the [defendants] was so bad, why did the government let Clifford Sinclair keep so much of his money? I don't really have an answer for that."

Why did the government let Sinclair keep so much money?
Collins says seeking restitution was not his office's "primary mission."
"We're lawyers, we're not accountants," Collins says. "As prosecutors, we probably have as little expertise as the man on the street at evaluating the financial accounting-type side of matters like this."

Collins says his goal was to put people in jail, and the 13-year sentence Sinclair received was pretty tough for an aging man.

"Our primary goal is not to chase money but to take hide off the defendants," he says. "As far as I'm concerned, when we have a high-level offender like Mr. Sinclair and he gets 13 years, I feel like we have done our primary job, which is to make the defendant pay back in years of his life for what he did."

Collins says he purposely left it to Sanders to assess Sinclair's finances and set restitution because prosecutors had no idea how much money the man had.

But when it became clear during the first trial in Lubbock that Sinclair had lied to Sanders, Collins says, his office did nothing to bring the matter to the judge's attention.

"If you're asking me whether or not in our opinion Mr. Sinclair was left with too much money, I guess my answer would be I think that's for others to judge," Collins says.

Mike Fawer, the attorney who defended Toler in the Lubbock trial and Faulkner in Midland, judges the government's deal with Sinclair harshly. If Sinclair would lie to prosecutors and a court to protect his money, Fawer says, what other lies was he willing to tell? For instance, how true was Sinclair's testimony that blamed Faulkner, Toler, and Blain for masterminding crimes Sinclair himself committed?

"There was no sense of an awareness of the ethical impropriety, the immorality, of treating Clifford Sinclair like they did," Fawer says. "They never made Sinclair come to terms with the lies. Why? They would have lost a witness. When they went to bed with Clifford Sinclair, they never looked back."

U.S. District Judge Lucius Bunton, who presided over the Midland trial, also seemed disturbed by the government's treatment of Sinclair. In January 1992, when he formally sentenced Faulkner and the other defendants, Bunton issued an unusually harsh statement from the bench, admonishing the government for allowing Sinclair to dupe them.

"The government is not without fault when it comes to what happened to Sinclair, who I thoroughly detest," Bunton said. "The government evidently thinks that 13 years was fair for him. Here is a guy that [is] living in a big house now in New Mexico. And I resent that."

Bunton continued: "As far as I know, the government has never done anything about what [Sinclair] lied to Judge Sanders [about] at the time of sentencing. There has been no move, so far as I can tell, on the part of the government...they sure haven't gone after the money."

Bunton sentenced Faulkner to 20 years and ordered him to pay $40 million in restitution, compared to Sinclair's $600,000. Toler and Blain received the same sentences, although the judge noted that former banker Blain had no money left to pay back.

The judge allowed the men to remain free pending appeals, which have proven unsuccessful.

Fawer argues that the harsher sentences for Faulkner and Toler are unfair, and that Sinclair has effectively been rewarded--both with money and freedom--for pointing the finger at others for his own crimes.

Tough, says former top prosecutor Collins.
"Clifford Sinclair got hard time and he did it," Collins says. "Now it is time for the top people in the scheme, the very top people, to do their time.

"They're looking back and saying 'Well, Clifford Sinclair was a big fish and he hid some assets and he's out enjoying the life of Riley, and we're about to go to the penitentiary.'

"What they leave unstated is of the benefits that a big white collar criminal gets when they go ahead and plead guilty and take their time is that they get it behind them."

Less than a month after Faulkner
andthe others were sentenced in 1992, Sinclair left prison. The man who promised to spend the rest of his years making amends for his crimes moved to his new house in New Mexico.

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