Free Opposition (Other) - District Court of Colorado - Colorado

Case 1:04-cr-00153-LTB

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Filed 01/12/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Case No. 04-CR-153-06-B UNITED STATESOF AMERICA, Plaintiff,

v.
6.
CHAD E. HEINRICH,

Defendant.

.

PLEA AGREEMENT AND STATEMENT OF FACTS
RELEVANT TO SENTENCING

The United States,by and through Matthew T. Kirsch, Assistant United States Attorney for the District of Colorado, and the defendant, Chad E. Heinrich, personally

andby counselCharlesElliott, submit the following PleaAgreementand Statement of FactsRelevant Sentencing to pursuantto D.C.COLO.LCrR 11.1.

I. PLEA AGREEMENT
1. The defendant will plead guilty to Count 11 of the superseding indictment, charging him with wire fraud affecting a financialinstitution, in violation of TItle 18,
. .

United States Code,Section1343,andto the forfeiture allegationin Count22 of the superseding indictment. 2. The defendant agrees havehis sentence to determined the appJication by of

the Sentencing Guidelines. The defendant waivesany right to have factsthat determine

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his offenselevel underthe Guidelinesallegedin an indictmentandfoundby ajury. The
defendant agreesthat the facts that determine the offense level will be found by the Court, by a preponderanceof the evidence, and that the Court may consider any reliable

,

evidence, includinghearsay.
3. The defendant agreesto pay the $100 special monetary assessment

applicable to Count 11 at or before the time of sentencing.

4.

The defendant agrees give his completecooperation to duringthe

investigationandprosecutionof any charges, includingbut not limited to meetingwith government investigators prosecutors reasonable or at timesand.as often asthey deem necessary, appearing voluntarily andproviding truthful testimonyat anygrandjury or trial proceeding whenrequested, providing investigators with his currentaddress phone and numberuntil all defendants who might be charged sentenced, providing are and documents itemswithin his.possession controlwhenrequested. or or 5. The defendant agrees forfeit any ownership to rights he mayhavein any

propertyidentified in the superseding indictmentor in anyBills of Particulars subject as to forfeiture andagrees to contestthe f~rfeitureof any suchproperties. not 6. The United States Attorney'sOffice for the District of Colorado(the

government) agrees it will file no otherfederalcriminal charges that against defendant the basedon matterscurrentlyknown to the government offenses or baseduponinfonnanon providedby the defendant.
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7.

The government agrees that any informationandtestimonygivenby the

defendant pursuantto this agreement will not be usedagainst him, eitherdirectlyor indirectly, in any criminal caseexceptfor prosecutions peIjury, makinga false for statement, obstructionof justice, or for impeachment. or Information andte"stimony will not be usedagainstthe defendant pursuantto SectionIB1.8 of the Sentencing Guidelines. Any infonnanon andtestimonyrelating to the defendant's lvolvement in crimes of in' violence,basedon the commonlaw definition of that term, is excluded from this agreement. 8. The defendant agrees that if the government showthat he intentionally can

lied or attempted misleadthe governmentor law enforcement to authorities, if he or intentionallydoesnot fulfill the tenns of or doesnot completehis cooperation underthis agreement, then anyinfonnation or testimonywhich he hasgiven in connection with this

.

casecanbe usedin any prosecutionagainsthim, notwithstanding provisionsabove. the 9. Providedthat the defendant continues fully andfrothfully.cooperate to with

the government law enforcement arid authoritiesas described above,asdetennined the in governmentssole discretion,the government agrees it will file, beforeor at the time that of the defendant's sentencing, motion for downwarddeparture, a pursuant Section to SKI.l of the Sentencing GuidelinesandTitle 18,United StatesCode,Section3553(e), recommending the Court granta downwarddeparture 50% from the bottomof the that of applicableguidelinelevel. The defendant reserves right to ask for a further downward the
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departure. 10. The government agrees move for an additional I-level reductionfor to

acceptance responsibility,pursuantto Section3El.l(b) of the Sentencing of Guidelines, at sentencing. 11. The government agrees moveto dismissthe remainingcountsof the to

superseding indictmentagainstthe defendant the countsof the original indictment and chargingthe defendant sentencing. at 12. This plea agreement madepursuantto Rule 11(c)(1)(A) and(c)(1)(B) of is

the FederalRulesof Criminal Procedure. II. MAXIMUM STATUTORY PENALTIES 13. The maxi~um statutorypenaltyfor the offensein Count 11is: not more

thanthirty yearsof imprisonment, morethana $1,000,000 not fine, or both; not morethan
five years of supervisedrelease;testitution, and; a $100 ~pecia1 assessment fee. 14. The maximum statutory penalty for Count 22 is forfeiture of the property

listed in the superseding indictmentor anyBills of Particulars. 15. A prison sentence may be imposedfor violation of the supervised release.

Costsof supervision and/orincarceration may alsobe imposed. The convictionmay also causethe lossof certaincivil rights, suchasthe right to possess firearms,to vote, to hold electiveoffice, andto sit on ajury.

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III. STIPULATION OF FACTUAL BASIS AND FACTS RELEVANT TO SENTENCING 16. The partiesagreethat thereis DO disputeasto the materialelements which

establish a factual basis for the offenses of conviction. The defendantunderstandsthat in order to prove his guilt as to Count 11, the government must prove, beyond a reasonable

doubt,that: A. The defendant kno:winglyparticipated a scheme defraudor to obtain in to moneyor propertyby meansof materialfalseor fraudulentpretenses, representations, promisesasdetailedin Counts8-19of the indictment; or B. c~ The defendant so with the intent to defraud; did In advancing, furthering,or carryingout this scheme, defendant or the transmittedany writing, signal,or soundby meansof a wire, radio, or televisioncommunication interstate in commerce caused transmission or the of anywriting, signal,or soundof somekind by meansof a wire, radio,or televisioncommunication interstate foreign commerce; in or and D. 17. The scheme affecteda financialinstitution.1 Pertinentfactsare s~tout below in orderto provide a factualbasisof the

plea andto provide factswhich the partiesstipulatearerelevant,pursuant §l.Bl.3, for to computingthe appropriate guidelinerange.

.O'Malley, Grenig and Lee, Federal Jury Practice and Instructions, Fifth Ed., 2000, § 47.07; 18 U.S.C. § 1343.
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Thestatement factsherein of does preclude not either partyfrompresenting

and arguing,for sentencing purposes, additionalfactsor factorsnot includedherein which arc relevantto the guidelinecomputation(§lB1.3) or to sentencing general in (§lBl.4).. Nor is the Court or Probationprecludedfrom the consideration suchfacts. of In "detenniningthe factualbasisfor the sentence, Court will consider stipulation the the [of the parties],togetherwith the resultsof the presentence investigation, anyother and relevantinformation." (§6B1.4 Comm.) 19. .Thepartiesagreethat the government's evidence would showthat the date

on which conductrelevantto the offense(§lB1.3) beganis approximately February 26, 2003. 20.
)

The partiesagreethat the government's evidence would be:

The defendant, ChadE. Heinrich, participatedin a scheme defraudFlagstar to aank, FSB (Flagstar), financial institution, andIMPAC Warehouse a LendIDg Group (IMPAC) andto obtainmoneyandpropertyfrom Flagstarand IMPAC by means of materially falseandfraudulentpretenses, representations, promises.At co-defendant and GeraldSmall'srequestandproceeds previousfraudsprovidedby Small,Heinrich of purchased company a calledTwentiethCenturyMortgage,Inc. (TwentiethCentury). Heinrich then submitted false financial statement Flagstarin supportof an application a to for a $25million line of credit. Flagstarrelied on this false financial statement issued and the line of creditto TwentiethCentury.

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Prior to Heinrichjoinmg the scheme, co-defendants GeraldSmalland Charles Winnett wereperpetratingthe scheme submittingfalseand fraudulent by residential home mortgageapplications Flagstarand IMPAC on behalf of a company to Small controIled, Amerifunding. After Twentieth Centuryreceivedits line of credit,Heinrich assisted with the preparation submission false and fraudulentresidentialhomeloan applications and of to Flagstaron behalf of Twentieth Century. Heinrich alsoassisted with the preparation and submission other false and fraudulentresidentialhomeloan applications of to IMPACon behalf of Flagstar.The false and fraudulentloan applications were submitted either in the names peoplewho were in fact neitherapplyingfor loansnor purchasing of the homeslisted in the applicationsor in the Dames peoplewho did not exist. of The scheme perpetrated was throughseveralshell companies.Small,Winnett,and Heinrich submited Flagstarand IMPAC documents to indicatingthat a company called TDF MortgageFunding,Inc., would purchase manyof the loansafterFlagstarand IMPAC providedthe initial funding for the loans. In fact, TDF MortgageFunding,Inc. was a company controlledby Small andWinnett which did not purchase loansand any did no legitimatebusiness.FlagstarandIMPAC, basedon the false andfraudulent applications described above,wire transferred fundsto accounts the namesof in purportedindependent companies, title SecurityNationalTitle, Inc. andChicagoTitle Guarantee, LLC. (Both namesare very similar to large,well established title companies-Security Title and ChicagoTitle.) In fact, SecurityNationalTitle, Inc. and

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merely as conduits for funds received from Flagstar and IMP AC as part of the scheme.

With respect Count 11, on or aboutFebruary20, 2004,HeinrichcCiused aided to or and abetteda wire transferof $393,662from Flagstar,locatedin rroy, Michigan,to .Chicago Title Guarantee Account No. 000000478106535 Bank One,Denver,Colorado, at . . to fund a residentialmortgagesubmittedby TwentiethCenturyin the nameof Ronald Jeske. In fact, Mr. Jeske no intent to applyfor a loan and did not know that an had applicationhadbeensubmittedin his name. The defendants obtained had Mr. Jeske's identifying informationwhenhe completed job applicationat the Amerifundingoffice a andthenusedit to completethe fraudulentloan application. As a result of the scheme) Flagstaradvanced approximately $155million to Amerifunding andTwentiethCenturyon the basisof fraudulentloan applications and sufferedlosses approximately of $23.4million. IMPAC advanced approximately $99.1 million to Amerifundingon the basisof fraudulentloan applications sufferedlosses and of approximately $12.9million. IV. SENTENCING COMPUTATION 21. The partiesstipulatethat sentencing this casewill be detennined in by

applicationof the sentencing guidelines,issued pursuant Title 28, United States to Code,
Section 994(1)~and Title 18~United StatesCode, Section 3553.

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The baseguidelineis U.S.S.G.§2B1.1(a)(1), with a baseoffenselevel of7.
Applicable specific offense characteristicsinclude a 22-1evelincrease becausethe offense involved loss of more than $20,000,000,

§2Bl.1(b)(1)(L), and a 2-1evel increase because offenseinvolved the sophisticated means,§2B1.1(b )(8)(C).The defendant reserves right to the challenge sophisticated the meansenhancement.

c.

The gover.q.ment believesthat the defendant shouldreceivea 2-1evel decrease because wasa minor participantin the offense.§3Bl.2(b). The he defendant reserves right to seekan additionaldecrease the basedon a lesser

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role pursuantto this sameguideline.

D.
E.

The adjustedoffenselevel for Count4 would thereforebe 29. The defendant should receivea 3-1evel reductionfor acceptance of responsibility,pursuantto §3E1.1(a)and(b). The resultingoffenselevel would thereforebe 26.

F.

The partiesunderstand the defendant's that criminal history computation is tentativeand that the criminal history category determined the Court. is by The defendant appears haveno criminal history,which would placehim to in Criminal History Category1.

G. H.

The careeroffender/criminallivelihoodadjustments not apply. do The guidelinerangeresultingfrom the estimated offenselevel of (E) above, andthe tentativecriminal history categoryof (F) above)is 63-78months. However)in orderto be asaccurate possible) as with the criminal history category undetennined this time, the estimated at offenselevel of (E) above could conceivably result in a rangefrom 63 months(bottomof Category I) to 150months(top of Category VI).

1.

Pursuant §5E1.2,assuming estimated to the offenselevel of (E) above,the fine rangefor this offenseis $12,500to $1,000,000, plus applicable interest andpenalties.

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v. WHY
24.

S APPROPRIA

The partiesbelieve the sentencing rangeresultingfrom the proposed plea

agreement appropriate is because relevantconductis accounted all pertinent all fOft sentencing factorsare addressedt the resultingsentencing and rangeserves interests the of justice. 25. This documentstatesthe parties'entire agreement.Thereareno other

promisest agreements "side agreements"), (or tenns,conditions,understandings or assurances, express implied. In enteringthis agreement,. or neitherthe United States nor the defendant haverelied, or are relying, on any terms,promises, conditionsor assurances not expressly stated this agreement. in

J~~1.o ¥
Date

~2-C7
Chad E. Heinrich

.

Defendant

fA} '}dY Date

CharlesElliott Attorney for Defendant
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MatthewT. Kirsch AssistantU.S. Attorney

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