For the second time in less than two years, Michael Peppel will be sentenced for the same crimes.
The former chief executive of the defunct Kettering computer and electronics firm MCSi, Peppel was originally sentenced in October 2011 to seven days in jail for his role in misleading investors and taking part in a stock price manipulation scheme.
In February this year, a federal appeals court overturned that sentence, saying it was too short. According to the case docket last week, Peppel is scheduled to face U.S. District Judge Sandra Beckwith for resentencing at 9 a.m. The case could be continued until Wednesday, according to the docket.
The resentencing is the latest chapter in a saga that began in the early 2000s.
Peppel, a former Washington Twp. resident, pleaded guilty in 2010 to money laundering, conspiracy to commit securities fraud, and willful false certification of a financial report by a corporate officer. Prosecutors said he led a scheme to inflate MCSi’s financial results in order to prop up its stock price, even as the company lost money.
In 2011, at the first sentencing, Beckwith said she was impressed with the outpouring of support Peppel had from friends and family. She noted 113 letters sent to her on Peppel’s behalf.
Peppel’s sentence also included three years of supervised release, random drug testing, 30 hours of community service during each of those years, and a $5 million fine — as well as an agreement to never again work as a CEO or CFO and to disclose his conviction to all prospective employers.
Ira Stanley Jr., MCSi’s former chief financial officer, pleaded guilty to similar charges, and was sentenced to a day in prison, a $12,500 fine and three years of supervised release.
Those who had worked for Peppel and say they lost jobs or savings due to his actions were shocked at the brevity of the jail sentence.
Earlier this year, Vandalia resident John Ellis, 59, urged former MCSi workers to launch their own letter-writing campaign to Beckwith. Ellis said he was “infuriated by the court’s acceptance of Peppel’s $3,000-per-month payment plan for his $5 million fine.”
“I would hope that Judge Beckwith would give Mike Peppel a sentence in accordance with her original sentencing memo and the federal guidelines for his multiple felonies,” said Ellis, who worked for MCSi from June 1999 until October 2002.
The advisory sentencing range Beckwith calculated before the first sentence was 97 to 121 months, or just over a decade. The appeals court said she calculated that range correctly.
But Beckwith was never bound by that range, noted Dwight Keller, the assistant U.S. attorney who led the prosecution of Peppel.
It’s impossible to know what sentence Beckwith will impose Tuesday, Keller said. Federal judges have “incredible power” to impose the sentences they deem fit, he said.
“Peppel hurt many employees, stockholders, vendors and financial institutions,” Ellis told the Dayton Daily News.
Merry Plassenthal, 70, a Miami Twp. resident who once worked for Peppel, said the dissolution of MCSi forced her into “early Social Security retirement.” She wrote to Beckwith earlier this year.
“I certainly hope he is sentenced at least five years, at least five years,” Plassenthal said. “Not seven days. That’s ridiculous.”
Last week, Beckwith granted a defense motion to place under seal Peppel’s supplemental sentencing memorandum and responses to the “government’s letter-writing campaign … due to the sensitive and confidential nature of the materials discussed.”
Defense attorney Ralph Kohnen declined comment.
June 2003: MCSi Inc. files for bankruptcy protection. Ultimately, the company is liquidated, affecting more than 1,300 employees.
December 2006: Peppel is indicted.
August 2010: Peppel pleads guilty in federal court to willful false certification of a financial report by a corporate officer, money laundering and conspiracy to commit securities, mail and wire fraud.
June 2011: MCSi’s debts to bank lenders amounted to $88.5 million, a prosecution witness testified at a hearing to determine Peppel’s sentence.
October 2011: Judge Sandra Beckwith sentences Peppel to seven days in jail as well probation and a $5 million fine.
November 2011: Prosecutors filed a notice as a first step toward challenging the seven-day sentence.
February 2013: The U.S. Court of Appeals for the Sixth Circuit rules that the sentence is too short and that Peppel should be resentenced.
Staying with the story
The Dayton Daily News in the only local news outlet to have provided complete coverage of the rise and fall of MCSi Inc. and its former chief executive, Michael Peppel, over the past 13 years. We will continue to follow this story in federal court in Cincinnati.