A former general contractor has been found guilty on grand theft charges with two Santa Barbara banks and a former friend and could face up to 12 years in state prison.
He was also found guilty of grand theft of more than $200,000 against conservative blogger and friend Mary Belle Snow, but the jury did not move forward with prosecutor Brian Cota's charge of elder abuse, because they couldn't agree that Snow appeared over 65 at the time.
"The additional element of the theft of elder is that (Lack) knew or should have known they were over 65, and Ms. Snow was 65 years and 8 months old when the crime occurred," Cota said.
The elder abuse charge would have added a year of prison time if found true.
The jury was hung on the last count of filing a false tax return.
Cota is also working on a new case against Lack with several other tax charges, such as failing to file tax returns and falsifying a return. That case is awaiting a preliminary hearing.
During the trial's opening statements, Cota stated that Lack used his reputation to gain trust, and in 2007 Lack had gone to the banks to gain unsecured lines of credit.
Lack's company made its home in a beautiful office building on Carrillo Street, adorned with photos of himself with top conservative leaders such as former Gov. Arnold Schwarzenegger and former New York Mayor Rudy Giuliani.
"He presented himself as someone that was well off and well-connected," Cota said.
Lack convinced the Bank of Santa Barbara to give him a $1.2 million line of credit and Mid-State Bank, now Rabobank, to provide a $250,000 line of credit.
Cota said Lack inflated his personal net worth, and wasn't forthcoming with loans or debts he owned.
Snow also testified that she was swindled out of $300,000 when he approached her about an investment opportunity and then used the money to pay bills, including payments to creditors.
Defense attorney Bob Sanger argued that when Lack was given the loans, he was a successful businessman with a 13-year track record as a general contractor in Santa Barbara before the economy began to crumble. Sanger made the argument that the banks didn't rely on the financial statements that Lack made in determining whether to grant him the loans.
"There was no witness from the banks that said that," Cota said, adding that the banks did rely on Lack's financial statements, which claimed he had $2 million in assets and no liabilities.
The reality was that Lack had failed to list $600,000 in liabilities, which the banks would have no way of tracing because they were private loans, Cota said.
"He grossly overstated his assets and understated his liabilities," he said.
At the same time, Lack was running in important political circles and "there was a certain level of comfort in believing what he stated," Cota said. "It was really a con from the very beginning."
Cota said that not only did Lack victimize banks, but he also gained an unfair advantage over competing companies "that were playing by the rules."
Lack will face restitution orders at sentencing, but the two banks already have civil judgments against him that haven't been paid.
Lack remains out of custody until his Sept. 4 sentencing.