UPDATE: Judge Carlton Tilley agreed to break Medaloni's $50,000 fine up into four equal installments to be paid over the next 12 months.
Medaloni did not speak to reporters after the sentencing.
Davis North, one of Medaloni's lawyers, said his client is ready to move on.
"Joey's been a great asset to Greensboro," North said. "He made an error in judgment and is going on with his life. Most people would say Greensboro is a much better place because of the things that Joey did to develop downtown. It's worse now when he's out of it. It was better off when he was running things."
During the hearing Clifton told the judge that Medaloni could lose his boat captain and piloting licenses as a result of the conviction. Afterward the lawyer told reporters that Medaloni has been living in Greensboro and working for family members since he was indicted. Medaloni operates a wine bar on Chapman Street called the Tasting Room that is owned by his brother, Matthew. He has also leant his name to a line of wines, and is trying to establish a winery.
Clifton called his client a "serial entrepreneur."
ORIGINAL POST: A federal judge has sentenced former Greensboro nightclub owner Joey Medaloni to four years of probation and imposed a $50,000 fine for falsifying income reports to obtain loans.
US District Court Judge Carlton Tilley credited Medaloni's contributions to the community, alluding to his role in revitalizing downtown Greensboro, and assistance to the federal government in the prosecution of staffing agency executive Greg Harrison in his remarks before handing down the sentence in federal court today in Greensboro.
Tilley said he received several character letters from Medaloni's supporters, but the defendant withdrew one of them after the judge complained that it contained conclusions that were not supported by facts in the pre-sentencing report and factual basis report that accompanied Medaloni's guilty plea. The judge did not reveal the identity of the author of the letter, explaining that he did not want to embarass the person.
Former Mayor Keith Holliday and Milton Kern, a prominent downtown developer, attended the sentencing. Holliday declined to comment after the court session.
Medaloni has worked as a boat captain and pilot since selling his Greensboro nightclubs the N Club and Much/Heaven in 2006 and 2007, respectively. His lawyer, Christopher Clifton, told Tilley that Medaloni is a talented pilot, adding that his client's relationship with Harrison came about because Medaloni piloted planes for Harrison.
Harrison is awaiting sentencing following conviction for 63 counts of impeding the Internal Revenue Service and failing to pay payroll taxes. Assistant US Attorney Frank Chut, who prosecuted Medaloni, is also the lead prosecutor in Harrison's case.
Tilley said he was torn by two conflicting sentiments.
"What you did was very wrong," the judge said. "You took positive steps to produce fraudulent documents in order to obtain loans for significant amounts. And at least three lending institutions did advance you substantial amounts of money."
Medaloni pleaded guilty to federal loan fraud.
The government said Medaloni “suffered substantial business losses” in his operation of the N Club, the Red Room, Much and Heaven in 2003 and 2004, but by submitting falsified IRS tax returns he obtained a loan in August 2005 for $996,000 from Truliant Federal Credit Union, which he used to retire $782,230 in debt to another lending institution and keep $206,233.
"You do seem to be sincere when you say you are sorry," the judge said. "The loans were repaid timely. You made contributions to the community as well as to yourself,
and to the government. For those reasons I think probation is appropriate in this case."
Medaloni expressed contrition before receiving his sentence.
"I'd like to tell you I'm absolutely embarrassed and I take full responsibility," he told the judge. "I'm truly sorry. If I could go back I would never do it again, and I'll never do it again."
The judge asked Medaloni to consider what conequences his action might have had were he unable to repay the loans.
"You did pay those loans in a timely fashion," Tilley said. "But that's because your businesses were successful. What position do you think the court would be in if the economy had bottomed out, as it did, leaving you unable to pay back those loans."
Medaloni said he wished he could give an answer, but he could not. The judge said that was probably the best response the defendant could have given.
Clifton asked the judge if Medaloni's fine could be broken up into two payment installments. The judge said he wants to discuss that further when the court reconvenes at 2 p.m. today.