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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

UNITED STATES OF AMERICA, 

 Plaintiff, 

v. Case No: 15-20382 

 Honorable Victoria A. Roberts 

PAUL NICOLETTI, 

 Defendant. 

__________________________________. 

ORDER GRANTING DEFENDANT’S MOTION IN LIMINE TO PRECLUDE 

IMPROPER EVIDENCE AND ARGUMENT [Doc. 48] 

I. INTRODUCTION 

The United States charged Paul Nicoletti (“Nicoletti”) in a four-count indictment 

with conspiracy to commit bank fraud and aiding and abetting bank fraud. The United 

States filed a motion in limine to preclude Nicoletti from introducing evidence and 

argument which: (1) suggests that the victim financial institution invited or could have 

prevented the fraud; (2) suggests that the victim financial institution subjectively did not 

rely on his misrepresentations or omissions; and, (3) references the foreclosure crisis 

and the Government’s actions in seeking to resolve the crisis. 

Nicoletti says that he does not intend to raise the issue of reliance or refer 

to the foreclosure crisis at trial. Thus, the only issue in dispute is the relevancy of 

evidence or argument related to Fifth Third Bank’s own efforts to prevent fraud. 

The Court GRANTS the Government’s motion in limine, based on the 

evidence Nicoletti proffers in his Response to the Government’s motion. 
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II. BACKGROUND 

Nicoletti is an attorney licensed in the State of Michigan and President of 

Continental Title Insurance Agency, Inc. The United States indicted him on one count of 

conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349 and three counts of 

aiding and abetting bank fraud in violation of 18 U.S.C. §§ 1344 & 2. 

The Indictment alleges Nicoletti willfully conspired with and aided and abetted 

others to obtain multi-million dollar mortgage/construction loans from Fifth Third Bank 

under material false and fraudulent pretenses and representations. 

The Indictment also alleges that as part of the scheme and conspiracy, 

Nicoletti and others employed straw buyers to serve as mortgage loan applicants 

to purchase and develop real property. The Government says these straw buyers 

supplied false information concerning income and assets, the sources of down 

payments for the loans, and their intentions to use the properties as primary 

residences. 

According to the Indictment, Nicoletti’s role in the conspiracy was to knowingly 

facilitate the fraudulent real estate transactions by acting as title agent, coordinating 

and conducting real estate closings, preparing HUD-1 Settlement Statements, and 

disbursing proceeds of the mortgage loans. 

III. STANDARD OF REVIEW 

District courts have broad discretion over matters involving the 

admissibility of evidence at trial. U.S. v. Seago, 930 F.2d 482, 494 (6th Cir.1991). 

In determining the admissibility of evidence, the Court must first decide whether 

the evidence is relevant. Under the Federal Rules of Evidence, relevant evidence 
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is that which has “any tendency to make a fact more probable or less probable 

than it would be without the evidence; and the fact is of consequence in 

determining the action.” Fed. R. Evid. 401. 

Under Fed. R. Evid. 402, all relevant evidence is admissible, unless a 

statute or rule provides otherwise. Evidence that is not relevant is not admissible. 

Fed. R. Evid. 402. Further, “the Court may exclude relevant evidence if its 

probative value is substantially outweighed by the danger of...unfair prejudice, 

confusing the issues, misleading the jury, undue delay, wasting time, or needless 

presentation of cumulative evidence.” Fed. R. Evid. 403. 

IV. ELEMENTS OF BANK FRAUD 

To obtain a conviction for bank fraud under 1818 U.S.C. § 1344, the 

government must prove three elements: (1) the defendant knowingly executed or 

attempted to execute a scheme to defraud a financial institution; 

(2) the defendant did so with the intent to defraud; and, (3) the financial institution 

was insured by the FDIC.’” United States v. Warshak, 631 F.3d 266, 312 (6th Cir. 

2010). 

V. DISCUSSION 

The Government argues the Court should preclude Nicoletti from offering 

evidence to support a “blame the victim” defense. Generally, the Government seeks to 

preclude “any evidence and argument that suggest that Fifth Third Bank invited or could 

have prevented the fraud.” This could potentially cover a broad range of evidence. The 

Government does not tell the Court what specific evidence it seeks to exclude. 
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 In response, Nicoletti says the evidence he will present will show that his alleged 

representations were not material to the bank’s decision to approve the loan 

applications. 

 Nicoletti’s response outlines the specific evidence he seeks to admit, which he 

says is relevant to materiality. Specifically, Nicoletti seeks to introduce evidence that: 

1. His alleged representations in the HUD-1 statements were based on closing 

instructions from Fifth Third Bank; 

2. Fifth Third Bank made its lending decision before the time of closing; 

3. Fifth Third Bank employees manipulated the loan processing, including the 

underwriters who waived “red flags,” whom Nicoletti had no control over or 

contact with; 

4. Fifth Third Bank employee conduct demonstrates that the alleged 

misrepresentations were not material; and, 

5. Government witnesses have an incentive to protect themselves. 

The Government does not address Nicoletti’s specifics. Instead, it asserts a 

general argument that the Court should preclude Nicoletti from advancing a “blame the 

victim” defense because it is not relevant to materiality. 

The Court agrees with the Government that evidence not relevant to prove or 

disprove the elements of the crimes charged, should be excluded. 

 Motions in limine are to be specific, so the Court can know exactly what evidence 

a party seeks to include or exclude. The Court will not exclude broad categories of 

evidence. The Court will only address the specific evidence that Nicoletti seeks to 

introduce that he says is relevant to materiality. 
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a. Materiality 

The Government must prove that the alleged misrepresentations made by 

Nicoletti were material. United States v. Gordon, 493 F.App'x 617, 629 (6th Cir. 2012) 

(citing Neder v. United States, 527 U.S. 1, 22 (1999)). “In general, a false statement is 

material if it has a natural tendency to influence, or is capable of influencing, the decision 

of the decisionmaking body to which it was addressed.” Neder, 527 U.S. at 16 (citations 

and internal quotation marks omitted). 

The Court must apply an objective standard to determine materiality in fraud 

cases. See United States v. Bravata, 636 F.App’x 277, 283 (6th Cir. 2016) (“to satisfy the 

materiality requirement, the fraudulent scheme must ‘be credible enough to deceive 

persons of ordinary prudence and comprehension.’”) citing U.S. v. Jamieson, 427 F.3d 

394, 415 (6th Cir. 2005). 

Nicoletti explains that his evidence will negate the element of materiality because 

it indicates that any misrepresentations or omissions in the loan applications would not 

have had a tendency to influence the decision makers at Fifth Third Bank to approve or 

deny the loan applications. Nicoletti says that “[i]f the decision-makers at Fifth Third did 

not care whether representations in loan applications were accurate so long as the 

representations qualified the applicants for the loans that they were seeking, Fifth Third 

cannot have been defrauded, because any misrepresentations were not material to their 

decisions.” 

Other courts have rejected Nicoletti’s theory. For example, in United States v. 

McCloud, 10-20743, R. 28 (E.D. Mich., Aug. 22, 2012), the Defendant sought to 

introduce evidence that negated materiality. The government moved to exclude evidence 
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that would blame the victim or suggest that the bank did not rely on the defendant’s 

alleged misrepresentations. 

The McCloud Court instructed the jury that “whether or not the lenders actually 

relied on the false representations and omissions is...irrelevant...the negligence, 

carelessness, gullibility, or even complicity of others, is no defense to a charge of such 

fraud or false statement.” McCloud, 10-20743, R. 19 (E.D. Mich., Sept. 7, 2012). 

In United States v. Benchick, No. 13-cr-20453, 2014 WL 4181970 (ED. MI. Aug. 

21, 2015), the Defendant sought to introduce evidence that supported his theory that the 

alleged “inaccuracies in his loan application were not material because the loan 

applications were submitted when the lending culture at [the banks] was such that 

anyone could get a loan, regardless of the content of the loan application.” Benchick at 

*3. 

The Benchick court rejected the Defendant’s argument. It held that evidence 

relating to the lending practices of the subject banks is not relevant to the materiality of 

the defendant’s alleged misrepresentations or guilt. Id. at *6. 

Nicoletti makes an argument almost identical to Benchick’s. Nicoletti argues that 

his evidence will show that Fifth Third Bank systematically approved numerous mortgage 

loan applications regardless of the accuracy of the information or the borrower’s ability to 

pay, in an effort to generate profits and bonuses. 

As Benchick makes clear, even if Nicoletti’s contentions were true, it would bear 

only on whether Fifth Third Bank actually relied on the false statements. 
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 While Nicoletti says that he will not introduce evidence and argument that Fifth 

Third Bank did not rely on his misrepresentations or omissions to approve loan 

applications, his motion papers appear to argue reliance. 

Reliance and materiality are separate concepts, and reliance is not an element of 

bank fraud. See e.g. Benchick supra, (“the test for determining whether a 

misrepresentation is material is an objective standard; actual reliance is not required.”); 

see also United States v. Ovist, No. 3:11-CR-00076-BR, 2013 WL 119674, at *2 (D. Or. 

Jan. 9, 2013) (The court held that “the lender’s alleged misconduct regarding their loan 

underwriting [was] irrelevant when determining whether Defendant made the alleged 

false statements with the intent to influence the lender’s decision.”). 

To the extent Nicoletti intends to present evidence to demonstrate lack of 

reliance, it will be excluded. 

Furthermore, any negligence on the part of Fifth Third Bank in approving 

Nicoletti’s loan applications is not relevant to the materiality of Nicoletti’s alleged 

misrepresentations. Because Nicoletti’s alleged false statements could influence a 

bank’s decision whether to approve a loan, Nicoletti’s arguments concerning materiality 

and his “blame the victim” approach fail. 

VI. CONCLUSION 

 The Court GRANTS the Government’s motion in limine, to the extent Nicoletti 

intends to present evidence that Fifth Third Bank was to blame for what he allegedly did. 

Specifically, Nicoletti’s evidence that he proffers (and that is listed on pg. 4 of this 

Opinion), is excluded to prove: (1) Nicoletti’s materiality argument; (2) reliance; or, (3) 
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that Nicoletti’s alleged misrepresentations were immaterial to First Third Bank’s decision 

to approve the loan applications. 

IT IS ORDERED. 

 S/Victoria A. Roberts 

 Victoria A. Roberts 

 United States District Judge 

Dated: April 18, 2017 

The undersigned certifies that a copy of this 

document was served on the attorneys of 

record by electronic means or U.S. Mail on 

April 18, 2017. 

s/Linda Vertriest 

Deputy Clerk