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United States v. Conti

November 5, 2010

UNITED STATES OF AMERICA,
v.
FRANCIS R. CONTI,



The opinion of the court was delivered by: Sean J. McLaughlin United States District Judge

Judge Sean J. McLaughlin

MEMORANDUM OPINION AND ORDER

This matter is before the Court upon Defendant Francis R. Conti's Motion to Vacate Judgment pursuant to 28 U.S.C. § 2255. In his motion, Conti alleges that his conviction and sentence should be vacated based on the United States Supreme Court's decision in United States v. Skilling, __ U.S. __, 130 S.Ct. 2896 (2010). For the reasons which follow, the motion will be dismissed.

I. BACKGROUND

On February 12, 2008, Conti was indicted by a grand jury on charges of participating in a mail, wire and bank fraud conspiracy between January 2003 and March 2006, in violation of 18 U.S.C. § 371.*fn1 Conti was also charged with nine substantive counts of mail fraud in violation of 18 U.S.C. § 1341.*fn2

In brief, Conti and his co-conspirators were accused of purchasing distressed homes in the city of Erie, performing superficial repairs and sham restorations to make the homes appear to be in significantly better shape than they were, and then selling the homes at drastically inflated prices to unsuspecting buyers. The indictment further alleged that the conspirators prepared loan applications on behalf of their buyers that overstated the financial health and assets of those buyers in order to secure mortgage loans. The indictment sets forth the following overt acts which Conti committed in furtherance of the conspiracy:

20. In and around November 2003, the defendant, FRANCIS R. CONTI, completed a mortgage loan application for T.Z. who was purchasing the property at 343 East 33rd Street, Erie, Pennsylvania. The defendant, FRANCIS R. CONTI, then submitted the loan application to Meritage Mortgage, in Lake Oswego, Oregen. The defendant, FRANCIS R. CONTI, indicated within T.Z.'s loan application that T.Z. maintained a checking account balance of $8,700, when the actual balance when the application was submitted was approximately $120.66.

23. On or about January 30, 2004, the defendant, FRANCIS R. CONTI, completed a mortgage loan application for C.A. who was purchasing the property at 1550 West 25th Street, Erie, Pennsylvania. The defendant, FRANCIS R. CONTI, then submitted the loan application to Principal Residential Mortgage, Inc. in Cincinnati, Ohio. Within the loan application, the defendant, FRANCIS R. CONTI, indicated that the down payment C.A. was providing was not borrowed when, in fact, the defendant, FRANCIS R. CONTI, knew that C.A. had borrowed the money for the down payment from the defendant, GREGORY M. FINNEY.

29. On or about September 27, 2004, the defendant, FRANCIS R. CONTI, accompanied by another unnamed co-conspirator, visited the St. Martin Center, 1701 Parade Street, Erie, Pennsylvania, an organization dedicated to assisting low income individuals, in furtherance of the defendant, FRANCIS R. CONTI's, effort to find and recruit potential home buyers.

(See Indictment, pp. 6-9).

On March 13, 2009, Conti entered a plea of guilt to the conspiracy charge (Count One) and to one of the substantive mail fraud charges (Count Three) pursuant to a written plea agreement. At the plea hearing, the Assistant United States Attorney summarized the nature of the scheme and Conti's involvement in it as follows:

[I]n general terms, this conspiracy really was about two different things. The first thing was the purchase of homes in relatively distressed areas of the city of Erie. Those home [sic] were then essentially flipped at dramatically increased values, which were not commensurate with their actual value. That was essentially accomplished by telling the borrowers, the home purchasers, that items had been improved or fixed up on these homes, which were not actually fixed up. And all that was actually done was some minor cosmetic changes made to the homes, many of which were actually falling apart, to look like that they were homes that were much nicer. Such that a borrower would want to take out a mortgage to purchase those homes. So what ended up happening with almost all of these properties where the values of the homes were dramatically increased in ways that were not -- in that they did not reflect the home's true value. The second part of the conspiracy was that those people who purchased those homes, their ability to get a mortgage was increased by the drafting of fraudulent mortgage loan applications, which did not reflect their true assets in any reasonable fashion. Oftentimes in this case what amounted to happening was the borrower's bank account balance and other assets were dramatically inflated to make it appear to the lending institution that they had assets which they did not have.This second part of the conspiracy is really the part that involves Mr. Conti. And Mr. Conti did not have -- had little to no involvement at all in the actual purchase and the flipping of the homes. His involvement was much more on the other end, the completion of fraudulent mortgage loan applications.

Change of Plea Hearing Transcript, March 13, 2009, pp. 17-18.

In his plea agreement, Conti "waive[d] the right to take a direct appeal from his conviction or sentence" and "waive[d] the right to file a motion to vacate sentence, under 28 U.S.C. ยง 2255, attacking his conviction or sentence, and the right to file any other collateral proceeding attacking his conviction or sentence." (Plea Agreement, p. 3). The agreement also contained a paragraph ...


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