San Francisco Investor Luke Brugnara Fails to Get Fraud Charges Dismissed
A federal judge rejected real estate investor Luke Brugnara's prosecutorial misconduct claims but scheduled a Dec. 2 hearing on his unreasonable delay argument.
Federal Judge Rejects Brugnara's Misconduct Claims, Sets Hearing on Delay
A federal judge in San Francisco denied former real estate investor Luke Brugnara's bid to have fraud charges thrown out on grounds of prosecutorial misconduct, Courthouse News Service reports. Senior U.S. District Judge Maxine M. Chesney did, however, set a December 2 court date to address a separate claim that prosecutors waited too long to bring the case.
Brugnara appeared in court Wednesday for the first time since being released from pretrial custody. Addressing the court at length, he argued that Assistant U.S. Attorney Maya Karwande had obstructed justice and deliberately misled a magistrate judge following Chesney's September 9 release order — which had been conditioned on Brugnara meeting specific requirements. He demanded Karwande be investigated and prosecuted.
Chesney was unmoved. "There may be a dispute to whatever the ultimate findings were at a hearing on bail that you may disagree with; either way, there is no crime she can be prosecuted for, so we are not dealing with that," she said, declining to refer Karwande to prosecutors.
Brugnara also held Karwande responsible for the additional days he spent in detention after San Mateo County issued an outstanding warrant on September 14 — the same day U.S. Magistrate Judge Lisa J. Cisneros had ordered his release from federal custody. Brugnara says he remained held for five more days because of that warrant. San Mateo County District Attorney Stephen Wagstaffe told Courthouse News at the time that the county charges stemmed from a potentially fraudulent property deed and had been under investigation for roughly eight months.
On the question of unreasonable delay, Chesney declined to strike Brugnara's motion outright. "What happened between the time he got the loan and the time someone said, 'Okay, we are going to say he committed a crime'?" she asked. "If there was a period of time where someone said, 'We should've filed this earlier,' one could look at that and see if it affected Mr. Brugnara's ability to defend against the charge." Chesney, a Bill Clinton appointee, scheduled argument on the matter for December 2.
The government had urged the court to discard Brugnara's dismissal motions on procedural grounds, noting he had filed them pro se despite being represented by attorney Matthew Dirkes of Illovsky Gates & Calia. Brugnara told the judge he had believed he was acting as his own counsel until the October 14 hearing. After repeated questioning from Chesney, he formally withdrew his pro se request, reinstating Dirkes as counsel of record.
Dirkes also asked the court to ease Brugnara's home confinement conditions, requesting permission for two-hour daily walks citing medical concerns. Chesney expressed skepticism. "The last time Mr. Brugnara was released, over serious objection, he then came in week after week after week chipping away at the conditions he originally agreed to," she said. She indicated she would allow both sides to submit written arguments before ruling.
Brugnara was indicted in May 2024 on nine counts of wire fraud and three counts of money laundering, connected to allegedly false loan applications filed under pandemic-era federal relief programs. Chesney had initially ordered his release in August 2024 under conditions that included no criminal activity and no firearm possession.
Prosecutors moved to revoke that bail in February after a January 21 incident in which Brugnara was arrested at Thornton State Beach in Daly City, California, accused of possessing a firearm and threatening to shoot two people he alleged were trespassing. He failed to appear at the February bond revocation hearing and was taken into custody by U.S. Marshals on July 30.
At an August 3 appearance before Cisneros, Brugnara denied knowing about the February date. Cisneros ordered him detained, citing insufficient confidence he would comply with release conditions or appear for future hearings. Chesney affirmed that detention order on August 11.
Over the following weeks, Brugnara proposed progressively larger bail packages across six hearings spanning more than five weeks. Chesney ultimately approved an offer of a $50,000 cashier's check and a $100,000 bail bond on September 9, directing both parties back to Cisneros to confirm all conditions before releasing him.
After the Wednesday hearing, Brugnara spoke to Courthouse News outside the courtroom and repeated his accusations against Karwande. Representatives for the government did not immediately respond to a request for comment.
Source: Courthouse News Service