Jerry Frear Jr. entered the U.S. Middle District Court here Monday supported by family, friends and members of his Wellsboro-area church. He left facing an 18-month federal prison sentence.
The city native currently is pastor of a Middlebury Center, Tioga County, church, and, according to comments in federal court, he retains the support of his congregation but faces the loss of his job and revocation of his license as a minister of the Christian and Missionary Alliance Church once he goes to jail.
The charge for which U.S. District Judge Malcolm Muir sentenced Frear was conspiracy to commit mail fraud and dated from 2002 when Frear was president and CEO of Neterprises Inc., an e-business and technology development company in Montoursville.
According to Assistant U.S. Attorney George Rocktashel, Frear convinced about 15 people to invest more than $600,000 in the enterprise, including investors he induced to risk more than $200,000 after he was aware in April 2002 the business was in trouble and unlikely to generate their promised returns or even refund their investments.
Frear faced a potential maximum sentence of up to five years in prison and a fine of more than $2 million, but his attorney, Robert Hoffa, asked for a probation sentence and called three character witnesses - a long-time family friend, a Delaware minister who described his relationship with Frear as that of mentor and Ralph Youmans, warden of the Tioga County Prison and a member of Frear's congregation at the Holliday Christian and Missionary Alliance Church.
According to the warden, Frear became pastor of the church shortly after his 2007 indictment. Youmans, a member of the church for 27 years, also described Frear as "the best pastor we've ever had."
Frear's attorney and the character witnesses described him as a good man, but one who "was wearing blinders and just did not see the consequences" as he desperately tried to save his company and the money of his investors.
Hoffa noted that two co-conspirators are free in Canada and will never be indicted because the statute of limitations has lapsed for them.
After the business failed, Frear reportedly suffered an emotional collapse but began rebuilding his life and was on the verge of beginning his career as a minister when indicted by a federal grand jury just before the statute of limitations would have lapsed for him.
Frear faces a lifetime of restitution payments, which - at least while incarcerated - are to be made in $50 monthly installments.
The judge noted that Frear has an "estimated net worth (of) negative $242,508" and is unable to pay a fine.
Muir waived a fine but would not waive prison time. In his statement of reasons for the sentence the judge said prison was warranted because of Frear's "blatant fraudulent behavior and the loss to the victims."
Hoffa said his client made "poor business decisions" and trusted business associates who did not keep their promises. "Mr. Frear is losing his house to foreclosure," he said. "There is nothing left. I don't see how society is going to benefit by incarceration."
"I failed them," Frear said of the investors. "I take full responsibility for the losses. I will work to repay that for as long as I live."
Rocktashel said witness impact statements recount family troubles and lost retirement dreams for several of those who believed what Frear promised and invested in his company.
"They trusted the defendant," he said. "The believed what he said."
Rocktashel said Frear kept seeking investors after knowing the company was doomed. "He could have stopped it sooner," he said, "but he continued ... He really should have known better."
There were gasps from supporters when Muir announced he would be imposing a prison term. The judge gave Frear until Oct. 22 to turn himself in and begin his prison sentence.