Gregg V. Wood was convicted in a scheme to defraud a local golf tournament out of more than $60,000 — nearly forcing the venture out of business — but he's now been released from prison and won't have to repay any of the money, following a federal court ruling.

A federal appeals court recently overturned Wood's conviction, throwing out a key bit of evidence against him — an electronic wire transfer of $5,000 that Wood had stolen from the tournament's bank account.

But the 9th U.S. Circuit Court of Appeals said the transfer was improperly used as evidence against Wood in the case that involved Sanford and Tina Mohr and their golf tournament business, Pro Tour Hawaii Inc.

"There is no doubt that Wood stole $5,000 of Pro Tour Hawaii's money and wired it," the court ruled.

But the act of wiring the money to a man on the Mainland was "in furtherance of a different scheme" and should not have been used in the Mohr case, the appeals court said.

Typically, theft of funds is pursued in state courts. But the electronic wire transfer was what made the case against Wood a federal offense.

So when the transfer was thrown out by the court, the rest of the case — a series of checks Wood paid to himself from Pro Tour's accounts — fell apart and was dismissed.

Wood was released from Lompoc federal prison last month and the court order that he repay the Mohrs $62,675 was dismissed.

"I just got the first payment from him in September," Sanford Mohr said from his Kona office. "It was $48."

The Mohrs say they've been victimized twice: first by a criminal and now by the criminal justice system.

Mohr hired Wood as chief financial officer of Pro Tour Hawaii in 2001.

Discovering the thefts, then going through the court case against Wood, "was like being skinned alive," Mohr said. "And it hasn't stopped."

Wood declined comment through his lawyer, federal public defender Peter Wolff, who also declined to discuss the case. Wolff represented Wood during the 2006 criminal trial and in the appeal to the 9th Circuit.

Attorney John Todd, who represents the Mohrs, said that the U.S. attorney's office here prosecuted the case because of the "interstate connection" of the $5,000 wire transfer.

He said the Mohrs believed that a "broader fraud" in the case could have been charged because numerous out-of-state golf professionals had paid entry fees to participate in a series of 10 golf tournaments that Pro Tour Hawaii planned to stage here in 2001.

Only two events were held before checks to vendors and golf courses began bouncing. The remaining events were canceled. Entry fees were lost and promised prize money for the canceled tournaments was never paid.

"If the broader fraud had been charged there were all sorts of interstate connections because players paid money from all over the country," said Todd.

The embezzlement of corporate funds also could have been prosecuted by local authorities but it's too late for that now, Todd said.

"I believe the statute of limitations has expired on those offenses," he said.

The statute of limitations for felony theft charges in state cases is three years after the theft has been discovered.

Elliot Enoki, first assistant U.S. attorney in Hawai'i, declined to comment on the case other than to say the office has decided not to ask the full 9th Circuit Court Court of Appeals to review the dismissal decision, which was handed down by a three-judge panel.

"We are not seeking review of that decision," Enoki said.

Federal Judge David Ezra, who presided over Wood's trial and sentenced him to 21 months in prison after the jury found him guilty, declined to talk about the reversal, other than to say, "I thought he (Wood) committed the crime and the 9th Circuit said he committed the crime."

At sentencing, Ezra said, "In my view, Mr. Wood engaged in a calculated, precisely executed scheme of deception and wrongdoing which resulted in the commission of a substantial wire fraud."

The judge said he wished the punishments available under federal law for white-collar crimes were more severe.

"I sincerely recognize that the $62,675 that has been ordered as restitution does not begin to compensate the Mohrs for the substantial loss that they have suffered, both retroactively and prospectively," Ezra said.

Tina Mohr said in a telephone interview Friday: "I think personally this has been a terrible miscarriage of justice. We're really at a loss to understand how a crime of this magnitude got whittled down to a single count of wire fraud."

The Mohrs said they still haven't calculated their losses in actual cash money and lost business, but noted that early estimates put the figure at more than $700,000.

Federal authorities still haven't returned some of the financial evidence seized during the investigation and prosecution of the case, they said.

"I kind of feel let down by the government," Sanford Mohr said. "To go all this way, over six years, and then to end this way, it's very difficult."

When Ezra sentenced Wood to prison Oct. 25, 2006, he didn't allow the defendant to remain free pending the outcome of an appeal of the conviction.

"I think that conviction will be upheld on appeal and since I think that he is a danger to the community and a flight risk, I am not going to let him into the community," the judge said.

Including pretrial incarceration, Wood served nearly all of his 21-month sentence before the 9th Circuit upheld his appeal and ordered his immediate release Dec. 11.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.