Frank Rosenthal is sitting in prison for what was merely a failed business venture. The ardent Trump supporter was sentenced under the Biden administration to over 15 years for two counts of wire fraud — considered a “process crime” that is often used to convict people when you can’t get them on a real criminal charge. It just means someone used electronic communications, such as phone calls or emails, to allegedly wrongfully obtain money. If you can’t align a real crime with how the money was supposedly wrongfully obtained, you use wire fraud.
Harvard Law Professor Emeritus Alan Dershowitz has called the sentence excessive. U.S. District Judge Fernando L. Aenlle-Rocha in California, who was first appointed to the Los Angeles Superior Court by Democratic Governor Jerry Brown, exceeded both the prosecutors’ recommendation and the sentencing guidelines with his sentence.
The sentencing guideline range was 98-120 months, far less than 188 months. The sentence was significantly above the recommendation of 10 years from prosecutors, despite the fact that Rosenthal took a plea deal. This is very uncommon. Unfortunately, the Central District of California is considered one of the most aggressive courts in the country for going criminally after financial-related issues, Dershowitz told the family.
Rosenthal was accused of defrauding investors of $3.9 million. There are many cases where defendants defrauded others of far more money but received shorter sentences. Feeding Our Future-related defendants, who were convicted of defrauding investors of hundreds of millions of dollars, received mostly 4-5 year sentences or even probation. Feeding Our Future was a Minnesota-based nonprofit that participated in a federal child nutrition program. They submitted fraudulent claims for meals that were never served and vastly inflated the numbers. It is considered one of the largest COVID-19-relief fraud schemes in the U.S.
Nevin Shetty, former CFO of a tech startup, secretly transferred $35 million of company funds meant for conservative investments into high-risk cryptocurrency investments to prop up his own side startup business called HighTower Treasury. The judge sentenced him to only two years in prison.
U.S. Sentencing Commission data shows that for securities and investment fraud, the average sentence is fewer than five years. More than half the sentences are below the guideline range.
Rosenthal’s underlying transactions were legitimate loans involving agreed-upon interest and promissory notes. At most, it was a civil matter that should have been handled with lawsuits, not criminally prosecuted. The government mischaracterized a failed commercial venture as a criminal scheme.
The mainstream media never covered how Rosenthal’s business deals actually worked. Lenders provided loans to Rosenthal or his entities. In return, they received promissory notes — formal loan contracts — that promised repayment with interest. Each loan to invest in cellular ventures was expected to generate ongoing revenue. The agreements called for annual payments to the lenders of $50,000 or $100,000 per year for each interest over a period of 20 years. Lenders were given security interests in the cellular assets themselves as collateral.
One lender who provided $900,000 received two homes as additional collateral. There were also cash payments or liens of $150,000 used to further secure the loans.
These were structured as loans with interest, documented by contracts and promissory notes, not as equity investments or joint ventures in the cellular interests. The lenders were creditors expecting repayment plus interest, backed by collateral.
When the businesses failed, and Rosenthal was unable to pay back the loans, it should have been treated as a civil contract dispute.
He had no intent to defraud anyone. Wire fraud requires intent. Traditionally, in the law, if a financial arrangement is documented as a loan with interest and collateral, courts usually view non-repayment as a breach of contract, a civil matter.
The main “victim” had a longstanding personal friendship and business relationship with Rosenthal. The prosecutor’s narrative ignored this context and turned a messy but private financial disagreement into a fraud case.
Additionally, Rosenthal’s constitutional right to effective counsel was violated. Exculpatory key defensive evidence, such as the civil nature of the loan documents, was never properly raised.
Even if the prosecutors’ allegations are true, Rosenthal, who has been in prison since 2023, should have received a sentence proportionate to those of others in similar circumstances. This is not justice; this is prosecutorial overreach and a rogue judge. We all know that prosecutors are frequently motivated to obtain the harshest convictions. If they don’t, they are criticized for being “soft on crime.” The mainstream media attacks them.
The Washington Post published a hit piece a few days ago targeting prosecutor and former judge Jeanine Pirro for acquittals and mistrials as the U.S. Attorney for D.C. The reality is, facts can change as prosecutions progress; witnesses back out or perjure themselves, new evidence is discovered, juries (think O.J.) have biases, etc. Federal prosecutors can lose their appointments and elected prosecutors can lose their reelections if perceived as lacking a substantial conviction rate.
Since Rosenthal pleaded guilty, he cannot appeal the conviction, only narrow aspects under a habeas petition, such as ineffective assistance of counsel. He appealed the sentence, which was sadly upheld by a panel of the Ninth Circuit Court of Appeals. Two of the three judges on the panel have issued adverse decisions to the Trump administration. Judges Richard R. Clifton and Jay S. Bybee ruled against Trump’s travel ban.
Rosenthal is married with two young children who will grow up without him. He has serious health issues, even though he is only 51, including a heart attack that nearly cost him his life. He was ordered to pay more than $1.1 million in restitution.
A petition was launched requesting a pardon from President Donald Trump. Trump has said he is considering pardoning 250 individuals on America’s 250th anniversary this Independence Day. Dershowitz told Rosenthal about the charges: “You have been screwed by the system and it needs to be corrected by this administration."
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