From the AP:

ALBUQUERQUE, N.M. — Wrapping up a criminal case that ruined lives from Washington state to New Jersey, a federal judge on Wednesday is scheduled to sentence a real estate executive who acknowledged running a Ponzi scheme that bilked 600 investors out of $75 million.

U.S. District Judge Bruce Black is expected to give Doug Vaughan no more than 12 years in custody under a plea agreement reached in December when Vaughan pleaded guilty to two felony charges.

It was unclear on Tuesday, however, if the Albuquerque man who turns 65 next month would be able to live out what could be his final years in a minimum-security federal prison camp for white-collar criminals or a traditional lockup with more hardened convicts.

Defense attorney Amy Sirignano said the U.S. attorney’s office reneged on a deal that would have landed him in the less-restrictive environment of a prison camp.

As part of the original plea agreement, prosecutors agreed to Vaughan’s request to voluntarily surrender and to be able to go to a prison treatment plan for alcohol issues, she said. Both actions would have reduced Vaughan’s score under the federal prison system that will determine which lockup he qualifies for.

But prosecutors in their presentencing report opposed those two points.

“The government went back on its word,” Sirignano said, “… and that’s outrageous conduct.”

Sirignano met with New Mexico U.S. Attorney Ken Gonzales Tuesday afternoon. A spokesman for Gonzales said she could not comment on the case but that a response would be filed before Vaughan’s sentencing on Wednesday at 2 p.m. in Santa Fe.

In her filings, Sirignano cites a Dec. 12, 2011, letter in which assistant U.S. attorney Gregory Fouratt said he would not oppose the treatment program or voluntary surrender, which means Vaughan would not be taken into custody in the courtroom after his sentencing.

But in his presentencing report to the court, Fouratt wrote that Vaughan has had plenty of time to get his affairs in order.

“Whatever benefit may accrue to Vaughan were he allowed to ‘voluntary surrender’ is dwarfed by the measure of justice the victims will derive from witnessing Vaughan finally begin his incarceration,” he wrote.

As for the defense’s request that Vaughan get treatment for alcohol issues, Fouratt wrote the defense was seeking that treatment “only to trim up to a year off his prison sentence.”

He said that while the defense maintains Vaughan drinks Chardonnay on a daily basis, so do millions of other people “and thousands of doctors recommend doing so.”

“Most importantly, there is no credible evidence that the long-term Ponzi scheme that Vaughan masterminded and operated was fueled by alcohol,” he wrote. “Greed, narcissism, an insatiable desire for the spotlight and the adoration of others, perhaps, but not alcohol.”

The scheme involved people loaning money to Vaughan in exchange for promissory notes that carried high interest rates and were issued through his now-defunct Vaughan Company Realtors. The loans were supposed to be used for real estate investments, but prosecutors said Vaughan used the money to support a lavish lifestyle and pay back earlier investors. The scheme collapsed in 2010.

Vaughan had victims in at least eight states, including New Mexico, Arizona, Texas, Colorado, Wyoming, New Jersey, Oregon and Washington.

PHOTO: Thus undated photo provided by Doug Aurand shows the 6,800-square-foot mansion where alleged Ponzi schemer Doug Vaughan lived alone in luxury from 2006 to earlier this year. Federal prosecutors have reneged on two key terms of a plea deal for Ponzi schemer Doug Vaughan, his defense attorney says, which could make the difference between whether the 65-year-old gets sentenced to a minimum security federal prison camp or a traditional lockup. (AP Photo/Courtesy Doug Aurand via The Albuquerque Journal)

This undated photo provided by Doug Aurand shows the 6,800-square-foot mansion where alleged Ponzi schemer Doug Vaughan lived alone in luxury from 2006 to earlier this year.  (AP Photo/Courtesy Doug Aurand via The Albuquerque Journal)

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