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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

UNITED STATES OF AMERICA, 

 Plaintiff, Case No: 15-20382 

 Honorable Victoria A. Roberts 

v. 

 

PAUL NICOLETTI, 

 Defendant. 

_____________________________/ 

ORDER: 

[1] DENYING NICOLETTI’S EMERGENCY MOTION FOR AN ORDER TO 

SHOW CAUSE AS TO WHY THE U.S. ATTORNEY SHOULD NOT BE 

HELD IN CONTEMPT FOR DELIBERATE VIOLATION OF 

DEFENDANT’S MOTION TO COMPEL [ECF No. 215]; 

[2] GRANTING THE GOVERNMENT’S MOTION FOR 

RECONSIDERATION OF THE ORDER GRANTING DEFENDANT’S 

MOTION FOR EMERGENCY RELIEF (213) [ECF No. 217]; 

[3] DENYING NICOLETTI’S MOTION TO COMPEL PRODUCTION OF 

VICTIM IMPACT STATEMENTS AND FOR AN ACCOUNTING AS TO 

RESTITUTION AMOUNT [ECF No. 223]; 

[4] GRANTING GOVERNMENT’S MOTION TO AMEND/CORRECT 

JUDGMENT [ECF No. 225]; and 

[5] DENYING NICOLETTI’S MOTION TO CORRECT AMENDED 

JUDGMENT BASED ON CLERICAL ERROR [ECF No. 227]

I. INTRODUCTION & BACKGROUND 

On June 23, 2015, the United States charged Paul Nicoletti in a fourcount indictment for his involvement in a bank fraud conspiracy — one count 

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

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

On May 5, 2019, a jury convicted Nicoletti on all four counts. The Court 

sentenced Nicoletti to 70 months imprisonment and ordered him to pay 

restitution in the amount of $5,478,751.88 to the financial institutions that he 

defrauded, due immediately. 

Post-judgment, the Court recognized Nicoletti’s decreased earnings 

and amended its judgment. [ECF No. 187]. The Court allowed Nicoletti to 

make monthly minimum restitution payments in lieu of a lump sum payment. 

Id. Due to error, the clerk did not docket the amended schedule of payments 

until recently. 

In April 2021, Nicoletti filed a pro se motion to compel the clerk of the 

court to prepare and file an amended judgment regarding installment 

payments. [ECF No. 210]. He argued that the government wrongfully 

garnished his and his wife’s joint tax return for $2,110.00. Nicoletti says that 

approximately 70% of the joint income tax return, or $1,477.00 belongs to 

his wife and should not have been applied to his restitution. 

On April 30, 2021, the Court granted Nicoletti’s motion and ordered the 

United States Attorney’s Office, Financial Litigation Unit to “release the 

wrongfully garnished Joint Tax Refund in the amount of $2,110.00.” [ECF 

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No. 213]. The Court also ordered the clerk to enter the amended schedule 

of payments on the docket. [ECF No. 214]. 

Before the Court are three pro se motions filed by Nicoletti: 

 Emergency motion for an order to show cause as to why the U.S. 

Attorney should not be held in contempt for violation of 

Defendant’s motion to compel [ECF No. 215]; 

 Motion to compel production of victim impact statements and for 

an accounting as to restitution amount [ECF No. 223]; and 

 Motion to correct the amended judgment based on a clerical error 

[ECF No. 227]. 

The government filed two motions: 

 For reconsideration of the order granting defendant’s motion for 

emergency relief (213) [ECF No. 217]; and 

 To alter/correct the amended judgment [ECF No. 225]. 

II. DISCUSSION 

A. Government’s Motion for Reconsideration of the Order 

Granting Defendant’s Motion for Emergency Relief (213) 

[ECF No. 217] 

The government asks the Court to set aside the portion of the April 30 

order that directs it to release Nicoletti’s joint tax return because he and his 

wife failed to exhaust administrative remedies. 

Local Rule 7.1(h)(3) provides the Court's standard of review for a 

motion for reconsideration: 

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Generally, and without restricting the court’s discretion, the court 

will not grant motions for ... reconsideration that merely present 

the same issues ruled upon by the court, either expressly or by 

reasonable implication. The movant must not only demonstrate 

a palpable defect by which the court and the parties and other 

persons entitled to be heard on the motion have been misled but 

also show that correcting the defect will result in a different 

disposition of the case. 

E.D. Mich. LR 7.1(h)(3). Palpable defects are those which are “obvious, 

clear, unmistakable, manifest or plain.” Mich. Dep't of Treasury v. Michalec, 

181 F. Supp. 2d 731, 734 (E.D. Mich. 2002). 

The government argues that Nicoletti’s entire restitution was due at 

sentencing and the amended judgment that allowed installment payments 

did not change that. Because the government believed the entire debt was 

due and it says Nicoletti had not made any restitution payments since his 

sentencing, it enrolled him into the Treasury Offset Program (“TOP”). 

TOP collects past-due debts that people owe to state and federal 

agencies. United States v Campbell, 245 F. App’x 505, 507 (6th Cir. 2007); 

31 U.S.C. § 3716 and 31 C.F. R. § 285.5. TOP allows the “head of an 

executive, judicial, or legislative agency” to collect debts owed to the United 

States by ‘administrative offset’ after following certain procedures. 31 U.S.C. 

§ 3716(a). One of the procedures requires the government to give sixty days 

notice prior to offset. 31 U.S.C. § 3720A. Another involves giving the debtor 

“an opportunity to make a written agreement with the head of the agency to 

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repay the amount of the claim.” 31 U.S.C § 3716(a)(4). The offset statute 

allows debtors an opportunity for review of the offset within the agency that 

enrolled them. 31 US.C. § 3716(a)(3). 

Nicoletti maintains that he never received notice of his TOP enrollment. 

He also argues that no restitution is due because the victims have been 

overpaid. 

The creditor agency at issue is the United States Attorney’s Office on 

behalf of the Department of Justice. The United States Department of Justice 

mailed Nicoletti a notice of intent to his trial counsel, James Howarth, on 

February 19, 2020, before Nicoletti filed his motion to amend/correct the 

payment schedule for restitution. [ECF No. 174]. But, Howarth withdrew as 

counsel by the time the United States Attorney’s Office mailed the notice. 

Although the notice was not returned, Howarth’s office says it never received 

the notice. The local Financial Litigation Unit for the United States Attorney’s 

Office for the Eastern District of Michigan mailed Nicoletti’s new counsel, 

Paul Stablein, a demand for Nicoletti’s full restitution amount on March 13, 

2020. That letter was not returned. 

Prior to seeking judicial relief, a debtor must exhaust administrative 

remedies through agency review. See United States v. Mayer, No. 

04CR100-1-SM, 2010 WL 4916561 (D. N.H. Dec. 3, 2010); United States v. 

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Beulke, 892 F. Supp. 2d (D. S.D. Sep. 20, 2012).Although Nicoletti says that 

he did not receive notice of the intent to offset, “[t]he likelihood of actual 

receipt ... is not the relevant standard” to determine whether the government 

met the notice requirement. Kipple v. United States, 105 Fed. Cl. 651, 656 

(2012). Rather, relevant regulations provide that notification or a “reasonable 

attempt” to notify should be sent to the taxpayer. See 26 C.F.R. § 301.6402-

6(c)(4), (d)(1) (2007) (stating that the IRS's last address on file would be 

reasonable). The Court finds that the government’s notice to Paul Stablein 

was sufficient. 

The government presents a palpable defect. It provides evidence that 

Nicoletti received sufficient notice of his TOP enrollment and failed to 

respond or exhaust his administrative remedies. Nicoletti must exhaust 

administrative remedies before he seeks redress in Court. 

The Court GRANTS the government’s motion for reconsideration. 

B. Nicoletti’s Emergency Motion for An Order to Show Cause 

as to Why the U.S. Attorney Should Not Be Held in Contempt 

for Deliberate Violation of Defendant’s Motion to Compel 

[ECF No. 215] 

Nicoletti filed a motion to show cause as to why the U.S. Attorney 

should not be held in contempt for its deliberate violation of the Court’s order 

requiring the government to return his joint tax return. [ECF No. 215]. 

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After Nicoletti filed this motion, the Court held a telephone status 

conference. Based on the status conference, the Court allowed the 

government to file a combined motion for reconsideration of the April 30 

order and response to Nicoletti’s motion for an order to show cause. As 

discussed above, the Court grants the government’s motion for 

reconsideration. 

The Court DENIES Nicoletti’s motion. 

C. Nicoletti’s Motion to Compel Production of Victim Impact 

Statements and for an Accounting as to [the] Restitution 

Amount [ECF No. 223] 

Nicoletti filed a motion to compel production of victim impact 

statements and for an accounting of the restitution amount. He asked 

probation to give him victim impact statements from Fifth Third Bank, Chubb 

Insurance, and First American Title Recovery, as well as an accounting of 

the restitution amounts, including payments made by his co-defendants. 

Probation passed the request to the U.S. Attorney’s Office, which replied that 

it could not share that information. Nicoletti says that 18 U.S.C. § 3663 

entitles him to review the sentencing information and the restitution balance 

for accuracy. 

The government says Nicoletti is not entitled to victim impact 

statements because there were none from Fifth Third Bank or its insurers, 

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First American Title Recovery and Chubb; it says there were only a schedule 

of losses, recoveries from the sale of properties, and insurance payments. 

The government says it provided Nicoletti’s counsel with this information 

prior to sentencing. It also attaches the schedule of losses to its motion 

response. 

The Court cannot order the production of something that does not 

exist. Moreover, the government provided Nicoletti with several documents 

which confirm the restitution calculation and advises that Nicoletti can obtain 

an accounting of the restitution balance from the clerk’s office. 

The Court DENIES Nicoletti’s motion. 

D. Government’s Motion to Alter/Correct Amended Judgment 

[ECF No. 225] 

The government claims that the $5,478,751.58 figure listed in the 

amended judgment as the total restitution amount is inaccurate due to a 

mathematical error, and that the Court should make the correction pursuant 

to Fed. R. Crim. P. 36. It says the correct total restitution amount is 

$5,299,751.58. Nicoletti denies this amount without any conceivable 

justification. 

The Court reviewed the original loss suffered by Fifth Third Bank minus 

the profits received from the property sales, the money obtained through civil 

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litigation and the collection of judgments, and insurance payments. The 

Court agrees that the correct total restitution figure is $5,299,751.88. 

The Court GRANTS the motion. The Clerk of the Court will enter a 

second amended judgment. 

E. Nicoletti’s Motion to Correct Amended Judgment Based on 

Clerical Error [ECF No. 227] 

Nicoletti moves for an order to correct the amended judgment to 

eliminate restitution payments. He claims that the government and the Court 

made several clerical errors that affected the total restitution amount; 

Nicoletti argues that the victims have been paid in full. 

He also requests that the Court resentence him pursuant to Fed. R. 

Crim. P. 35 to correct the arithmetical, technical, or other clear errors. 

Nicoletti makes three claims: (1) the Court failed to apply the correct 

sentencing statute at sentencing; he says the Court mistakenly cited 18 

U.S.C. § 3663A, instead of 18 U.S.C. §3663(a); (2) the restitution amount 

failed to account for Tyrone Hogan’s settlement; and (3) the amended 

judgment failed to report the civil litigation recoveries from Hogan, Chubb, 

and First American Title Recovery. 

Fed. R. Crim. P. 35 addresses the bases on which district courts “may” 

correct or reduce a sentence. Under the rule, “[w]ithin 14 days after 

sentencing, the court may correct a sentence that resulted from arithmetical, 

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technical, or other clear error” or the Court may, upon motion of the 

government, reduce a sentence if the defendant provides “substantial 

assistance.” 

Nicoletti is well beyond fourteen days after his sentencing and the 

second section of Rule 35 requires a motion by the government based on 

substantial assistance. Neither section is applicable. Fed. R. Crim. P. 35. 

The Court DENIES Nicoletti’s motion. 

III. CONCLUSION 

The Court: 

 GRANTS the government’s motion for reconsideration of the order 

granting Defendant’s motion for emergency relief (ECF No. 213) 

[ECF No. 217]; 

 DENIES Nicoletti’s motion to show cause as to why the U.S. 

Attorney should not be held in contempt for deliberate violation of 

Defendant’s motion to compel [ECF No. 215]; 

 DENIES Nicoletti’s motion to compel victim impact statements and 

for an accounting as to restitution amount [ECF No. 223]; 

 GRANTS the government’s motion to correct clerical error in the 

amended judgment [ECF No. 225]; and 

 DENIES Nicoletti’s motion to correct the amended judgment based 

on clerical error [ECF No. 227]. 

ORDERED. 

 s/ Victoria A. Roberts 

 Victoria A. Roberts 

Dated: 8/5/2021 United States District Judge 

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