UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff, Case No: 2:15-cr-20382

-v- Hon. Victoria Roberts

D-1 PAUL NICOLETTI,

Defendant.

Craig Weier

United States Attorneys Office

Assistant United States Attorney

211 West Fort Street, Suite 2001

Detroit, Michigan 48226

(313) 226-9678

Craig.Weier@usdoj.gov

Paul J. Stablein

Paul Stablein, PLLC

Attorney for Defendant

380 North Old Woodward Ave 

Suite 320

Birmingham, Michigan 48009

(248) 540-1600

PaulStablein@StableinLaw.com

BRIEF IN SUPPORT OF THE DEFENDANT’S 

REPLY TO THE GOVERNMENT’S 

BRIEF IN OPPOSITION TO DEFENDANT’S 

MOTION FOR BOND PENDING APPEAL [R. 181]

The Government argues in its response, in part, that there is no “clear and 

convincing evidence that he is not a danger to the community.” (Doc. #181, Page 

ID 3078-9). The Government’s argument is 180 degrees contrary to the position it 

took earlier in this matter when Mr. Nicoletti sought the Government’s concurrence, 

while he was on bond, to allow him to fish with a bow and arrow. On December 21, 

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2017, the Government stipulated to the following: “He (Mr. Nicoletti) is not a danger 

to society nor he is (sic) a threat to public safety.” (Doc. #73, Page ID 627). Other 

than the fact that Mr. Nicoletti has vigorously defended this matter and exercised his 

right to a trial, nothing has changed. Mr. Nicoletti has demonstrated model behavior 

while on pretrial release for the five years this matter has been pending, and the 

Government’s current statement that this fact does not demonstrate “clear and 

convincing proof that he would not violate the law while his appeal is pending” (Doc. 

#181, Page ID 3079) is without merit. The 2017 order, to which the Government 

stipulated, and his actual conduct while on pretrial release, are the best predictors of 

his future conduct if given the opportunity to remain on bond while his appeal is 

pending. 

Moreover, his current employment also demonstrates the point: as of 2018, 

Mr. Nicoletti works as a driver of an “Authorized Emergency Vehicle” as the term 

is defined by the State of Michigan and is entitled to the same protections afforded 

other first responders pursuant to the Michigan Motor Vehicle Code. MCL 

257.2(1)(c) and MCL 257.653a. Clearly, Mr. Nicoletti has established that he is not

a threat to society.

The Government’s argument that Mr. Nicoletti will not prevail on appeal

simply reiterates the arguments the Government has been making throughout this

litigation. The Government admitted that its legal theory was altered shortly before 

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trial based upon the Banyan3 case, when it stated, “But Banyan is easily 

distinguishable, in part because the government was aware it was pending before 

trial and presented its case to avoid the issues it posed.” (Doc. #181, Page ID 3055). 

The Court of Appeals decided Banyan in 2019, four years after the Indictment in the 

present case. Until Banyan was decided, the Government proceeded on the false 

premise, as indicated in the wording of the indictment, that Fifth Third Bank was the 

lender and hence jurisdiction existed pursuant to 18 U.S.C. § 1344(1). It is now clear 

that Fifth Third Bank was not the lender, nor did Fifth Third Bank provide the loan 

funding as required in Banyan. In many ways, this factual distinction is where the 

rubber meets the road in this case. 

The Government argues that, unlike the prosecution of Banyan, it did not rely 

on the “wholly-owned subsidiary” status of the lender. However, despite

acknowledging that the wholly owned subsidiary argument was “nearly frivolous” 

as the Banyan court stated at 552, this position is belied by the fact that the 

Government’s questions on direct examination included the following: “Q; So by 

virtue of Fifth Third Bank Michigan’s ownership of 100 percent of Old Kent and 

one percent of Fifth Third Mortgage Michigan, is it fair to say that Fifth Third Bank 

Michigan owned Fifth Third Mortgage Michigan, essentially, in entirety? A: Yes.” 

(Doc. #136, Page ID 1293-4, emphasis supplied). Further, in order to gloss over the 

3 United States v Banyan, 933 F. 3d 548 (6th Cir. 2019)

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factual dispute, the Government then asked Cliffel, “Did Fifth Third Mortgage 

Michigan use accounts of Fifth Third Bank Michigan and Fifth Third Bank Ohio to 

fund the loan? A: They did.” Who funded the loan according to the Government? 

Fifth Third Mortgage Michigan did. However, to support the “custody or control” 

requirement of subsection 2, the Government now argues in its brief that Cliffel 

testified “all loan proceeds at issue were in the custody of either Fifth Third Bank 

Michigan or Fifth Third Bank Ohio when the proceeds were released to Continental 

Title.” (Doc. #181, Page ID 3059). Cliffel did not testify that the proceeds were 

bank property. Neither did the Government establish that the accounts from which 

the proceeds were acquired were accounts owned by, or in the custody of, Fifth Third 

Bank, or were rather, accounts owned and controlled by Fifth Third Mortgage and 

simply located at Fifth Third Bank. 

The Government never clarified this important factual distinction, yet it could 

have done so easily. The Government submitted the cashier’s checks drawn on the 

bank, containing the appropriate routing numbers, but never presented records to 

show from whose account the funds were purportedly drawn – whether Fifth Third 

Mortgage or Fifth Third Bank. The Government did not establish the point, other 

than to highlight one statement from one witness that was capable of two different 

meanings. No other evidence existed to establish this most important jurisdictional 

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point. Mr. Nicoletti has raised a substantial question for his appeal and this 

Honorable Court should grant his request for bond pending appeal. 

In its brief, the Government states, “Nicoletti served as the title agent on these 

loans. He prepared and submitted false HUD-1’s to Fifth Third Mortgage, 

Michigan, falsely showing sizable down payments by straw buyers, which, as title 

agent, he was charged with collecting at the closings.” (Doc. #181, Page ID 3065, 

emphasis supplied). At no time during the trial did the Government establish that 

Mr. Nicoletti communicated with anyone at the bank as opposed to the lender. As 

the Court in Banyan noted, “And the government again presented no evidence that 

any of the misrepresentations on the subject loan applications ever reached the ears 

of anyone at the parent banks.” Banyan, supra, at 555. Here, the Government makes 

an attempt to establish a misrepresentation to the bank, though its brief highlights 

the gaping hole in its proofs. “Thus, to obtain the official checks, someone told the 

issuing bank officer to list the straw buyers’ names as the purchasers of the checks, 

a lie to the bank to obtain official checks to document the false narrative of the 

scheme that the ‘buyers’ made substantial down payments.” (Doc. #181, Page ID 

3067, emphasis supplied). Even ignoring how vague that statement is, what the 

buyers are bringing to the closing is in the HUD-1 which is sent to the lender, not 

the bank. The Government presented no evidence that any member of the 

conspiracy, let alone Mr. Nicoletti, made any false statement to the bank. 

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Furthermore, the checks, regardless of who obtained them and how, cannot 

form the basis for a fraud perpetrated against a bank. Based on that legality, the 

United States Supreme Court reversed the defendant’s conviction of two counts of 

violating 18 U.S.C. § 10144 in Williams v. United States, 458 U.S. 279, 102 S. Ct. 

3088, 73 L. Ed. 2d 767 (1982). Williams was charged with committing a check 

kiting scheme against various banks. In reversing the convictions, the Court stated:

[T]echnically speaking, a check is not a factual assertion at all, and 

therefore cannot be characterized as “true” or “false.” Petitioner’s bank 

checks served only to direct the drawee banks to pay the face amounts 

to the bearer, while committing petitioner to make good the obligations 

if the banks dishonored the drafts.

Id. at 284.

Similarly, the Government here concedes that the no false statements were 

communicated to the bank and relies only on the words imprinted on the checks.

(Doc. #181, Page ID 3065, n. 3). However, the checks contain no false statement 

that is communicated to the bank. They are simply drafts directing the drawee bank 

to pay the indicated amount to the bearer. See e.g., United States v. Rodriguez, 140 

F.3d 163 (2d Cir. 1998) (Defendant’s act of presenting checks payable to defendant 

to bank for deposit and payment was not deceptive course of conduct as to bank and 

thus did not support bank fraud conviction, even if defendant knew checks had been 

4 18 U.S.C. § 1014 states in pertinent part, “Whoever knowingly makes any false statement or 

report,...for the purpose of influencing in any way the action of ...any institution the accounts of 

which are insured by the Federal Deposit Insurance Corporation,” shall be fined or imprisoned.

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issued without account holder’s authorization.) Even if one could conclude that the

checks imply some materially false statement (which they do not), it was never 

communicated to the bank, only the lender, via the HUD-1 closing statement.

The Government argues that the funding of the loan is critical. “The Banyan

court underscored that the government offered ‘no evidence, for example, that either 

of the parent banks funded the loans and that the defendants were aware of such 

funding.’ Banyan at 553.” (Doc. #181, Page ID 3058). The Government’s 

determination that the bank funded the loans is not born out by the evidence. The 

Funding Notification Sheets, which were attached to Mr. Nicoletti’s previously filed 

Motion to Dismiss (attached hereto as Exhibit A and previously submitted with Doc. 

#90, Exhibits 2 and 7), clearly show that Fifth Third Mortgage Company funded 

each of the loans in the present case. In addition, attached hereto as Exhibit B, are 

the closing instructions for each of the loans in question here.5 Each of them states 

the following: “The following requirements must be satisfied prior to the 

disbursement of loan proceeds. Any deviations from the requirements must be 

specifically approved by the Lender in writing prior to disbursement.” If the bank

were disbursing the funds, why indicate that the lender is responsible for doing so, 

5 The closing instructions were also attached as exhibits to Mr. Nicoletti’s previous motion (Doc. 

#90).

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provided the additional conditions are met at the time of closing? The lender is 

disbursing the funds, not the bank.

The Government’s Response also identifies the actors as being “a corrupted 

loan officer from Fifth Third Mortgage Michigan, a subsidiary of Fifth Third Bank 

Michigan.” (Doc. #181, Page ID 3064). The Government again wishes to highlight 

the fact that Fifth Third Mortgage Michigan is a wholly-owned subsidiary of Fifth 

Third Bank – while conceding that the fact is frivolous on this issue. As the 

Government states its theory of the case – “He (Mr. Nicoletti) prepared and 

submitted false HUD-1’s to Fifth Third Mortgage, Michigan, falsely showing sizable 

down payments by the straw buyers....” (Doc. #181, Page ID 3065). The evidence 

did establish that HUD-1’s containing false information were prepared, but the 

misrepresentations were communicated only to the lender. The Government’s 

statement that “Nicoletti fabricated the down payments by getting Fifth Third Bank 

Michigan to issue official checks...” (Id.), is clearly not supported by the evidence 

presented at Mr. Nicoletti’s trial. 

This Honorable Court should conclude the issues presented at least raise a 

close question and grant Mr. Nicoletti a bond pending his appeal.

Respectfully submitted,

/s/Paul Stablein

Paul J. Stablein

Paul Stablein, PLLC

DATED: May 11, 2020 Attorney for Mr. Nicoletti

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