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United States v. Blaney

United States District Court, E.D. Michigan, Southern Division

February 8, 2017

United States of America, Plaintiff,
v.
Gregg Blaney, Defendant.

          ORDER DENYING DEFENDANT'S PETITION TO REDUCE RESTITUTION AND PETITION TO STAY COLLECTION PROCEEDINGS

          Sean F. Cox United States District Court Judge

         In this criminal action, Defendant Gregg Blaney (“Blaney”) was charged in a three-count indictment, with one count of conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349 and two counts of bank fraud in violation of 18 U.S.C. § 1344.

         Blaney pleaded guilty, pursuant to a Rule 11 Plea Agreement, to one count of bank fraud in violation of 18 U.S.C. § 1344.

         This Court held a sentencing hearing on April 17, 2013. Blaney was represented by retained counsel at that sentencing hearing. Thereafter, on April 18, 2013, this Court issued a 29-page Memorandum Opinion (Docket Entry No. 93), setting forth its rulings as to relevant conduct and the amount of loss calculation and other issues. In that Memorandum Opinion, this Court rejected the following argument made by Blaney:

1. No Loss Because Loans Were Charged Off By Lenders
Blaney asserts that, as to nine of the twelve properties at issue, internal servicing notes indicate that the loan has been charged off, settled, or otherwise closed. Blaney argues that because the lenders consider themselves to have been “made whole” as to these loans, there can be no loss associated with these properties. (Def.'s Br. at 7-8). Blaney offers no legal authority in support of this argument.
The Court rejects this argument. The fact that a lender has charged off a loan, or otherwise closed the file on a given loan, does not alter the fact that the lender did not receive repayment of the funds loaned.

(Id. at Pg ID 969). The conclusion section of that Memorandum Opinion summarized:

For the reasons set forth above, the Court concludes that the relevant conduct includes all twelve of the real estate transactions included in the Presentence Report. The Court further concludes that the reasonably foreseeable pecuniary harm in this case is the amount of the mortgage loans, which total $856, 100.00. After applying appropriate credits for sales proceeds received from the defrauded vendors, and payments made on the mortgages, the adjusted total loss is $801, 634.48, which results in a 14-point increase under U.S.S.G. § 2B1.1(b)(1).
In addition, the Court agrees with the Government that the decision as to whether the Government wishes to file a motion for a downward departure, so that Blaney can obtain an additional one-point reduction for acceptance of responsibility, is a matter within the Government's discretion. Nevertheless, in determining an appropriate sentence for Blaney, this Court will consider all of the §3553 factors, including the need to avoid unwarranted sentencing disparities.

         This Court imposed a sentence of thirty-seven months. (See 4/30/13 Judgment, Docket Entry No. 96). This Court also imposed a fine of $400, 000.00 and ordered that Blaney pay restitution in the amount of $801, 634.48. (Id. at Pg ID 981).

         Blaney appealed, arguing that this Court erred in determining both the relevant conduct and the amount of loss for sentencing purposes. Blaney's challenges included the following:

Regarding the sentencing guidelines, the defendant raises these claims: (1) five of the transactions relied upon by the district court cannot be relevant conduct because the victim lender was not federally insured; (2) the amount of loss is overstated because for nine of the transactions the respective lender wrote off the loan as uncollectible so therefore there was no loss; (3) the court should have used the fair market value of the properties to compute losses, rather than the amount actually received by the lenders in foreclosure; (4) the loss is primarily due to the unforeseeable sharp downturn in real estate values; and (5) any losses experienced by the lenders resulted in a tax benefit, credit for which should be included in the loss computation.

United States v. Blaney, 570 F.App'x 536, 537 (6th Cir. 2014). Blaney also argued that this Court did not adequately consider the need to avoid unwarranted sentenced disparities, as ...


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