Former Glenwood City Councilor, colleague admit to bid rigging, accept plea deals
Former Glenwood Springs City Councilor Todd Leahy and his real estate colleague both admitted rigging trustee foreclosure auctions on a few occasions, but took plea deals for lesser charges in a court hearing Thursday.
Leahy, 54, and James Gornick, 49, were each charged with bid rigging, a class 5 felony, through a grand jury indictment filed May 23.
Leahy, who finished his final term on City Council in April, and James Gornick, both pleaded guilty to second-degree perjury, a misdemeanor, and were sentenced in the same hearing to three years probation and 100 hours of community service.
They also paid restitution, in the form of payment to a Roaring Fork Valley charity, for what prosecutors called their “ill-gotten gains.”
As a stipulation of their plea deal, Leahy paid $16,000 and Gornick paid $7,278. Judge Denise Lynch did not impose any additional fines.
As part of the lesser perjury charge, Leahy and Gornick’s plea stipulated that they had intended to mislead in an official proceeding.
As a result of their pleas, both Leahy and Gornick are barred from serving in an elected office by the state constitution.
Robert Shapiro of the Colorado Attorney General’s Office argued that Leahy and Gornick deserved punitive sentences with jail time for violating the public trust.
The indictment details several cases of bid rigging that occurred in 2013 and 2017, but Shapiro told the court that he doesn’t believe that those were the only questionable auctions Gornick and Leahy were involved with.
“This was not a one-time incident,” Shapiro said.
Garfield County Treasurer Karla Longhurst (formerly Bagley), who runs the public trustee auctions for the county, spoke during the sentencing portion of the court hearing.
Leahy and Gornick “undermined the integrity of the foreclosure sale and system,” Longhurst said.
“It’s my opinion that the acts of the defendants were outrageous, and occurred over a period of four years or more,” she said.
Expressions of remorse
Both Leahy and Gornick, who have been partners for years and recently joined other realtors to form Integrated Mountain Properties, apologized for their actions and accepted responsibility for rigging the auctions.
After reflecting over past several months, Gornick said he has realized, “I’m the one that has caused undue stress to my family, business partners, and my real estate clients.”
“I can’t tell you how humiliating that is to me,” Leahy said. He then apologized to his family, friends and the greater community.
“Nobody deserved this humiliation except myself,” he said.
The maximum sentence for second-degree perjury is 18 months in jail and a $5,000 fine, but lawyers for both Gornick and Leahy pushed for sentences without jail time.
“We weren’t able to find, in the last 15 years, any prosecutions for bid rigging,” attorney Kevin McGreevy said.
The lawyers also stressed that neither man had a criminal record, and both had strong ties in the community.
Several community members, including an unnamed former mayor of Glenwood Springs, wrote letters attesting to Leahy and Gornick’s ties to the community.
“We understand and we agree, that interfering with the trustee (auction) process is problematic, and illegal,” said attorney Rick Kornfeld, representing Leahy.
Kornfeld asked that Judge Lynch consider the greater context of Leahy’s work for the community.
“Public service courses through his veins,” said Kornfeld of Leahy.
Both men also had been punished, though not officially, due to their loss of reputation, the defense lawyers said.
Judge Lynch declined to impose punitive jail time or additional fines, saying that serving their community was appropriate.
“You’re going to suffer some collateral consequences, I’m sure, and you already have,” Lynch said.
Both Leahy and Gornick are at risk of losing their state licenses to practice real estate.
“This has been a very public case, so I’m sure your reputation in the community has been damaged,” Lynch said.
She added that no one likes to be on the front page of the paper.
“I don’t even like it when they cover my courtroom,” Lynch said.
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Robert Shapiro was sentenced to the maximum 25 years in prison for running a $1.3 million real estate Ponzi scheme that claimed more than 7,000 victims.