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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

UNITED STATES OF AMERICA, 

 

 Plaintiff, 

 Case No. 15-20382 

v. Honorable Victoria A. Roberts 

 

PAUL NICOLETTI, 

 Defendant. 

_________________________________/ 

ORDER DENYING DEFENDANT’S MOTION 

FOR JUDGMENT OF ACQUITTAL [ECF No.139] 

I. INTRODUCTION 

On June 23, 2015, the United States charged Paul Nicoletti (“Nicoletti”) in a four-count 

indictment — 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). On May 5, 2019, a jury convicted Nicoletti on all four counts. 

Nicoletti filed this timely Motion for Judgment of Acquittal pursuant to Rule 29 of the 

Federal Rules of Criminal Procedure. It is fully briefed. 

The court reviewed the evidence in the light most favorable to the Government. It finds 

there was sufficient evidence to support the jury’s verdict. 

The Court DENIES the Defendant’s motion. 

 
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II. BACKGROUND 

Nicoletti participated in obtaining loans to purchase homes in Oakland County. He 

was a licensed attorney in the State of Michigan and President of Continental Title 

Insurance Agency. Nicoletti recruited unqualified straw buyers to purchase high-end 

residential property using the proceeds of multi-million-dollar mortgage loans from Fifth 

Third Bank. This fraudulent scheme and conspiracy was designed to obtain financing to 

purchase real estate located at 3935 Quarton Road, Bloomfield Hills, Michigan; 3941 

Quarton Road, Bloomfield Hills, Michigan; and “Vacant Lone Pine Lot,” Bloomfield Hills, 

Michigan. Nicoletti acted as a title agent; coordinated and conducted the real estate 

closings; prepared false HUD-1 Settlement Statements; and disbursed the proceeds of 

the mortgage loans. 

During 6 days of trial, the government proved Nicoletti knowingly facilitated 

fraudulent real estate transactions. The evidence established Nicoletti submitted 

fraudulent loan applications to financial institutions – including Fifth Third Bank – that 

contained materially false information, including false identities of loan applicants, false 

income and assets of loan applicants, false sources of down payments, and false 

intentions on the part of the buyers to use the properties as principal residences. The 

evidence showed the loans were all funded by money in the custody of Fifth Third Bank, 

disbursed to Nicoletti’s title company’s bank account – also at Fifth Third Bank – and then 

distributed by Nicoletti to himself and others. 

 
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III. STANDARD OF REVIEW 

A Rule 29 motion challenges the sufficiency of the evidence to sustain a conviction. 

United States v. Jones, 102 F.3d 804, 807 (6th Cir. 1996). When addressing such a 

motion, whether made under 29(a) or (c), the trial court must consider whether, 

after viewing the evidence in the light most favorable to the prosecution, any rational 

trier of fact could have found the essential elements of the crime beyond a reasonable 

doubt. This familiar standard gives full play to the responsibility of the trier of fact 

fairly to resolve conflicts in the testimony, to weigh the evidence, and to draw 

reasonable inferences from basic facts to ultimate facts. 

Jackson v. Virginia, 443 U.S. 307, 319 (1979) (emphasis in original); Jones, 102 F.3d at 

807. The Court must, in performing this review, “refrain from independently judging the 

credibility of witnesses or weight of the evidence.” United States v. Price, 258 F.3d 539, 

544 (6th Cir. 2001) (quoting United States v. Welch, 97 F.3d 142, 148 (6th Cir. 1996)). 

The Court can reverse a jury’s verdict for insufficient evidence only if it is not supported 

by "‘substantial and competent evidence’" on the record as a whole and must "make all 

reasonable inferences and credibility choices in support of the jury’s verdict." Grubbs, 

506 F.3d at 438; United States v. Newsom, 452 F.3d 593, 608 (6th Cir. 2006) (quotation 

marks omitted). This standard is difficult to overcome; it places a heavy burden on the 

defendant. United States v. Webber, 208 F.3d 545, 553 (6th Cir. 2000) (citing United 

States v. Spearman, 186 F.3d 743, 746 (6th Cir. 1999)). 

IV. ANALYSIS 

 Nicoletti says the evidence was insufficient to prove both that he had the requisite 

criminal intent to obtain money within the custody of a financial institution and to establish 

that he submitted false information to financial institutions. 
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To support a conviction for bank fraud under 18 U.S.C. 1344(2), the government must 

prove that the defendant intended to: (1) obtain money in the custody or control of an 

insured financial institution; and (2) defraud financial institutions by “means of” false 

pretenses. 18 U.S.C. 1344(2). 

In relevant part, the bank fraud statute imposes liability on “[w]hoever knowingly 

executes, or attempts to execute, a scheme or artifice . . . to obtain any of the moneys, 

funds, credits, assets, securities, or other property owned by, or under the custody or 

control of, a financial institution, by means of false or fraudulent pretenses, 

representations, or promises.” 18 U.S.C. § 1344(2). “A scheme or artifice to defraud 

includes ‘any plan, pattern or cause of action, including false and fraudulent pretenses 

and misrepresentations, intended to deceive others in order to obtain something of value, 

such as money, from the institution to be deceived.’” United States v. Brandon, 17 F.3d 

409, 424 (1st Cir. 1994). “The scheme to defraud clause requires that the defendant 

engage in a pattern or course of conduct designed to deceive a federally chartered or 

insured financial institution into releasing property, with the intent to victimize the 

institution by exposing it to actual or potential loss.” Id.

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

that the Court should be persuaded to grant this motion. However, Banyan is 

distinguishable. No doubt there are factual similarities between the cases: recruitment of 

straw buyer purchasers, overstatement of buyer income, false intentions to use properties 

as permanent addresses. But, there are notable distinctions: the Government in this case 

did not rely solely on the lender’s status as a wholly owned subsidiary to prove the 

requisite elements; the Government proved that Fifth Third Bank funded the loan 
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proceeds; and Nicoletti made false statements not only to its subsidiary mortgage 

company, but to Fifth Third Bank as well. These false statements were central to 

Nicoletti’s fraudulent scheme. 

A. Evidence Showed Nicoletti Intended to Obtain Money in Custody of an 

Insured Financial Institution 

The Government did prove that Nicoletti and co-conspirators acquired the properties 

at issue in the name of third parties –straw buyers – with the intent to obtain money in the 

custody of Fifth Third Bank by offering evidence that: Fifth Third Bank funded the loans 

at issue; Nicoletti was aware of such funding; and he made false statements to Fifth Third 

Bank. Nicoletti argues these proofs are insufficient because his actions did not deceive a 

federally chartered or insured financial institution, but rather a mortgage company (Fifth 

Third Mortgage) that is wholly owned by an FDIC-insured bank. 

It is true that “the mere fact that a mortgage company is wholly owned by an FDIC 

insured parent bank is insufficient to show that the parent bank owned or controlled the 

funds, or any other assets, of its subsidiary.” See, e.g., United States v. Bouchard, 828 

F.3d 116, 126 (2d Cir. 2016); United States v. Alexander, 679 F.3d 721, 728 (8th Cir. 

2012); United States v. Bennett, 621 F.3d 1131, 1136 (9th Cir. 2010) (quoting Banyan, 

933 F.3d at 556). 

And, it is undisputed that "[a]n individual shareholder, by virtue of his ownership of 

shares, does not own the corporation's assets[.]" Dole Food Co. v. Patrickson, 538 U.S. 

468, 475 (2003); see also Rhode Island Hosp. Tr. Co. v. Doughton, 270 U.S. 69, 81 

(1926) ("owner of the shares of stock in a company is not the owner of the corporation's 
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property"); United States v. Bennett, 621 F.3d 1131, 1136 (9th Cir. 2010) (“a parent 

corporation does not own the assets of its wholly owned subsidiary by virtue of that 

relationship alone”). However, the relationship between Fifth Third Bank Michigan and 

Fifth Third Mortgage Michigan is more than a passive ownership of assets– Fifth Third 

Bank Michigan, an FDIC-insured bank, funded all the loans based upon the fraudulent 

mortgage applications submitted by Nicoletti. 

But, the proofs here went beyond mere reliance on ownership, and Nicoletti’s reliance 

on Banyan is misplaced. 

In Banyan, the relationship between the mortgage company and parent bank proved 

to be nothing more than a passive parent-subsidiary relationship. The Government 

presented no evidence of the source of the funds obtained by fraud; there was no 

evidence that the defendants obtained loans funded by federally insured banks. The Sixth 

Circuit held that this was insufficient to show that a fraud scheme directed at the 

subsidiary mortgage company, really had the intention to obtain money in the custody of 

the parent bank. Banyan, 933 F.3d at 553.

In contrast to Banyan, the Government here showed that Fifth Third Bank Michigan 

funded all the loans with money in its custody and highlighted that the proceeds were in 

the custody of a federally insured bank. See United States v. Rabuffo, 716 Fed. App'x 

888, 898 (11th Cir. 2017) (unpublished, per curiam)(supporting conviction when the 

government presented evidence that the defendant knew that a bank "would be handling 

any draw requests on the loans.”); see also United States v. Chittenden, 848 F.3d 188, 

201 (4th Cir.), vacated on other grounds, 138 S.Ct. 447 (2017) (bank funded the loans 

through a line of credit to mortgage company); United States v. Edelkind, 467 F.3d 791, 
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797-98 (1st Cir. 2006) (bank approved the mortgage company's loans) (citing Banyan, 

933 F.3d at 556). 

Albert Cliffel, Corporate Tax Director for Fifth Third Bank, testified all loan proceeds at 

issue were in the custody of either Fifth Third Bank Michigan or Fifth Third Bank Ohio at 

the time they were released to Nicoletti’s Continental Title Account. This is a far cry from 

the utter lack of proof in Banyan that the parent bank funded the loans and that defendant 

was aware of the funding. 

Nicoletti knew that the money used to fund the loan proceeds was in the custody of a 

federally insured bank. The Government established Nicoletti received cashier’s checks 

issued and drawn from “Fifth Third Bank (Eastern Michigan)” totaling $1,824,156.05. He 

deposited these checks into his Continental Title account. “[C]hecks standing alone are 

not enough for a jury to find beyond a reasonable doubt that, when [defendant] submitted 

fraudulent loan applications to the mortgage companies, [he] intended to obtain funding 

from the banks.” Banyan, 933 F.3d at 553. However, the checks are a data point that are 

connected to the federally insured bank that funded the loan. Id. In conjunction with other 

evidence, these checks helped to prove that Nicoletti intended to obtain money in the 

custody of a secured financial institution. 

It is the Court’s hope that Nicoletti does not intend to intentionally mislead it by 

misstating the law with regard to his next argument. In overstating the Government’s 

burden, Nicoletti contends, “18 U.S.C. § 1344(2) states in pertinent part, the scheme must 

be “to obtain any of the moneys . . . owned by, or under the custody and control of, a 

financial institution...The statute does not say ‘custody or control’ of a financial institution.” 

Doc. 147: Defendant’s Reply at 12. Nicoletti argues the Government used a conjunctive 
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reading of the statute in a status conference hearing, but the statute clearly indicates it is 

in the disjunctive. § 1344(2) states, in part, “to obtain any of the moneys...owned by, or 

under the custody or control of, a financial institution, by means of false or fraudulent 

pretenses, representations, or promise.” 18 U.S.C. § 1344 (emphasis added). The 

Government satisfied its burden by proving that the loan proceeds were in the custody of 

Fifth Third Bank Michigan; it was not required to prove that the proceeds were under both 

its custody and control. 

A rational jury could conclude beyond a reasonable doubt that Nicoletti intended to 

obtain money in the custody of an insured financial institution before they were released 

to Nicoletti’s Continental Title account to fund the loans. 

B. Government Produced Sufficient Evidence Showing Nicoletti Intended to 

Defraud Financial Institutions “By Means Of” False Pretenses

Nicoletti argues the Government produced insufficient evidence that he intended to 

defraud the financial institutions “by means” of false pretenses. Nicoletti relies on specific 

language from Banyan where the Court held: “[there was] no evidence that any of the

misrepresentations on the subject loan applications ever reached the ears of anyone at 

the parent banks.” Banyan, 933 F.3d at 555. Nicoletti says the Government failed to show

that any of the misrepresentations on the loan applications ever “reached the ears” of 

anyone at the parent bank. Id. This is unavailing. The Government provided sufficient 

evidence to show Nicoletti sought to obtain bank property by means of misrepresentation 

intended to reach the bank. 18 U.S.C. § 1344(2). 
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The bank fraud statute limits the provision’s scope to “frauds in which a false 

statement will naturally reach [a federally insured] bank (or a custodian of the bank’s 

property).” Loughrin, 573 U.S. at 365 n.8, 134 S.Ct. 2384. 

“Language like ‘by means of’ is inherently elastic: It does not mean one thing as to all 

fact patterns—and certainly not in all statutes, given differences in context and 

purpose. All we say here is that the phrase, as used in § 1344(2), is best read, for the 

federalism-related reasons we have given, see supra, at 2391 – 2393, as drawing a 

line at frauds that have some real connection to a federally insured bank—namely, 

frauds in which a false statement will naturally reach such a bank (or a custodian of 

the bank's property). 

Id. Section 1344(2)'s “by means of” language is satisfied when, as here, the defendant's 

false statement – which reached the bank – is the mechanism naturally inducing a bank 

(or custodian of bank property) to part with money in its control. Id. at 363. 

The evidence established false statements central to the fraud scheme were made 

directly to a federally insured bank funding the loans when Nicoletti misstated: (1) the true 

buyers of the property; (2) income and assets of the buyers; (3) buyers intent to occupy 

the premises as their primary residence; and (4) buyers making sizable down payments 

toward the purchase of property. Nicoletti served as the title agent on the loans and 

submitted false HUD-1’s; his company, Continental Title, then obtained loan proceeds 

from money in the custody of Fifth Third Bank. This was the means by which Nicoletti and 

his co-conspirators obtained the money. 

Nicoletti argues that the mortgage fraud scheme had no connection to a federally 

insured bank, stating that funds flowed through Firth Third Mortgage Michigan. Nicoletti 

says that the mortgage company from which he obtained funds was not a “financial 

institution.” But the Government never sought to prove – nor did it have to – that Fifth 

Third Mortgage was a financial institution under § 1344(2). 
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Unlike Banyan, the Government does not argue that the Fifth Third Mortgage is a 

financial institution. Rather, the Government says that Nicoletti made several false 

statements that “reached the ears” of Fifth Third Bank. See Banyan, 933 F.3d at 555. 

Nicoletti falsely induced Fifth Third Bank to issue official checks by fabricating down 

payments from straw buyers and listing the straw buyers as purchasers or remitters. The 

straw buyers did not bring any money to closing, nor did they purchase the official checks. 

Instead, the checks were paid from Nicoletti’s Continental Title account – also at Fifth 

Third Bank – by the loan proceeds received from Fifth Third Bank Michigan and 

subsequently used to pay the straw buyers. 

Nicoletti made two distinct false statements to obtain money in the bank’s custody – 

(1) Nicoletti led Fifth Third Bank to believe that the straw buyers funded the checks and 

listed the buyers as purchasers or remitters of the properties; (2) Nicoletti falsely 

portrayed that the purchaser or remitter of the official check was the straw buyer. 

In Banyan, the Government presented no evidence that any of the misrepresentations 

on the loan applications ever reached the ears of anyone at the FDIC insured bank. See

Banyan, 933 F.3d at 555. 

Nicoletti next argues that the Government produced insufficient evidence that he 

intended to defraud a financial institution because there was no evidence of actual loss 

by the entity. However, “[a]ctual or potential loss to the bank is not an element of the crime 

of bank fraud but merely a description of the required criminal intent.” United States v. 

Rigas, 490 F.3d 208, 231 (2d Cir. 2007) (internal quotation marks omitted). 
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Viewed in the light most favorable to the government, there was sufficient evidence 

presented for the jury to infer that Fifth Third Bank was exposed to a risk of loss from 

Nicoletti’s conduct. Albert Cliffel, III, Corporate Tax Director of Fifth Third Bank, testified 

that Fifth Third Mortgage disbursed loans that were in the custody of Fifth Third Bank and 

almost $1.8 million was transferred from the Fifth Third Mortgage account (funded wholly 

by Fifth Third Bank) into accounts set up by Nicoletti and his co-conspirators. 

Further, the jury could have inferred that to enable the Continental Title Agency to 

receive funds, Nicoletti presented the fraudulent documents that enabled him to gain 

access to funds fraudulently transferred from Fifth Third Bank. These inferences – 

reasonably drawn from this testimony – are sufficient to show that Fifth Third Bank was 

exposed to a risk of loss and distinguishes this case from those in which the bank is 

merely an instrumentality of a fraud perpetrated by means of misrepresentations to third 

parties. 

A rational jury could conclude beyond a reasonable doubt that Nicoletti engaged in a 

fraudulent course of conduct designed to deceive a federally chartered or insured 

financial institution to extend certain loans. 

C. The Government Does Not Argue – Nor Did The Jury Find – Nicoletti 

Violated 18 U.S.C. §1344(1) 

The Government never endeavored to prove that Nicoletti specifically “intended to 

‘defraud a financial institution.’” 18 U.S.C. § 1344(1). To prove fraud under § 1344(1), the 

Government would need to prove that Nicoletti intended to “cause[ ] a federally insured 

bank to transfer funds under its possession and control.” United States v. Everett, 270 
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F.3d 986, 991 (6th Cir. 2001). Instead, here, the Government proved that (1) Nicoletti 

“intend[ed] to obtain bank property” (2) “by means of false or fraudulent pretenses, 

representations, or promises.” The Government did not argue – and the jury did not find 

– that Nicoletti had specifically intended to defraud a financial institution. 

D. There Was No Material Variance Between the Indictment and Evidence 

Presented At Trial 

Finally, Nicoletti argues there was a discrepancy between the allegations in the 

indictment and evidence offered at trial. Specifically, Nicoletti contends that the indictment 

never referenced Fifth Third Mortgage, and this failure to name the entity constitutes a 

prejudicial variance. The Government says there was no prejudicial variance between the 

facts alleged in the indictment and evidence presented at trial and – even if there were a 

variance – it was not prejudicial. Nicoletti’s allegations are without merit. 

A variance “occurs when the charging terms [of the indictment] are unchanged, but 

the evidence at trial proves facts materially different from those alleged in the indictment.” 

United States v. Prince,214 F.3d 740, 757 (6th Cir.2000). A defendant’s substantial rights 

“are affected only when the defendant shows prejudice to his ability to defend himself at 

trial, to the general fairness of the trial, or to the indictment's sufficiency to bar subsequent 

prosecutions.” United States v. Barrow, 118 F.3d 482, 488–89 (6th Cir.1997). “A variance 

is not reversible error unless the defendant demonstrates prejudice.” United States v. 

Nance, 481 F.3d 882, 886 (6th Cir. 2007). “To obtain relief under that standard, a 

defendant must establish ‘(1) error, (2) that is plain, and (3) that affects substantial 

rights.’” Johnson v. United States, 520 U.S. 461, 466–67, 117 S.Ct. 1544, 137 L.Ed.2d 

718 (1997) (quoting United States v. Mize, 814 F.3d 401, 408 (6th Cir. 2016)). 
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Nicoletti’s rights were safeguarded; he knew precisely the nature of the charges 

and the evidence the Government intended to use to support those charges. The court 

noted the indictment “could have been more artfully drafted to refer specifically to the 

lending institution,” but it was “sufficient for the purposes of the bank fraud statute.” (Doc. 

97: Order Denying Defendant’s Motion to Dismiss at 4). 

Assuming there was variance, Nicoletti did not suffer prejudice. A variance is not 

per se prejudicial and will not always mandate a reversal. United States v. Budd, 496 F.3d 

517, 522 (6th Cir.2007). Nicoletti was aware of the evidence offered against him and was 

not “taken by surprise.” Further, the Court properly instructed the jury regarding the 

elements necessary to convict Nicoletti of bank fraud under § 1344(2). 

There was sufficient circumstantial evidence from which a reasonable jury could 

conclude that the trial evidence substantially matched the allegations in the Indictment. 

V. CONCLUSION 

Viewing the evidence in the light most favorable to the Government, the Court holds 

that the jury acted rationally and reasonably when it convicted Defendant on both counts 

against him. See Jackson, 443 U.S. at 319. Defendant's Motion for Judgment of Acquittal 

pursuant to Fed.R.Crim.P. 29 is DENIED. 

 IT IS ORDERED. 

s/ Victoria A. Roberts 

 Victoria A. Roberts 

 United States District Judge 

Dated: October 9, 2019