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United States v. Ferrera

February 24, 1997

UNITED STATES OF AMERICA,

PLAINTIFF-APPELLEE,

v.

ROBERTO FERRERA,

DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.

No. 93 CR 842 George M. Marovich, Judge.

Before POSNER, Chief Judge, HARLINGTON WOOD, JR., and CUDAHY, Circuit Judges.

HARLINGTON WOOD, JR., Circuit Judge.

ARGUED OCTOBER 22, 1996

DECIDED FEBRUARY 24, 1997

The single issue in this appeal of defendant's fraud convictions is whether the district court erred in applying U.S. Sentencing Commission Guideline sec. 2F1.1(b)(3)(A) to the conduct with which the defendant, Roberto Ferrera, was charged and to which he pled guilty. *fn1 That guideline application resulted in a sentence enhancement of two points.

Because of its unusual factual background, however, this is not just another routine appeal of a sentencing guideline issue. Judge Marovich, at sentencing, expressed the view that, "[T]here are aspects of this like the Over-the-Hill Gang," commenting further, "and what amazes me is that there are people out there that these guys can con." *fn2 We will sketch the unusual factual circumstances which prompted that assessment.

BACKGROUND

In his plea agreement Ferrera admitted his role in three related frauds. In the first of the three schemes, he and his co-defendant, Paul W. Graffia, fraudulently obtained $1.5 million in an advance fee scheme from a woman named Huei-Li-Chen. However, that fraud does not figure in this appeal. Instead, this appeal is the result of Ferrera's participation in two other frauds. We'll look at those two schemes, the facts of which are largely undisputed.

A. Scheme Number 1

In 1991 Graffia arranged for the printing of $11 billion (not million) in promissory notes purporting to be guaranteed by the Mexican government. Graffia delivered these false and counterfeit notes to Ferrera at Chicago's O'Hare International Airport. The notes were arranged in five series of $2.2 billion each. Each series purportedly was issued by one of five different Mexican banks. Ferrera took the notes to Mexico to have them signed by various Mexican officials to add a touch of authenticity to their falseness. For that obliging accommodation, those Mexican officials were later imprisoned.

Ferrera returned some of those series of notes to Graffia, but he also retained some for himself and stored them in Mexico City. Then both Ferrera and Graffia began preparing and planning other details of their frauds which they thought would appeal to unsuspecting investors.

Ferrera and Graffia agreed to use two corporations they owned, American Credit Corporation ("ACC") *fn3 and Union International Bank and Trust, Ltd. ("Union International"), to facilitate their frauds. Neither corporation had any physical facilities other than the residences of Ferrera and Graffia. Those involved fully appreciated that these two corporations were worthless. To remedy these deficiencies, the defendants disseminated false financial information representing that the corporations were worth untold millions. Union International, which they claimed to be a bank but was not, had been incorporated under the laws of Granada, an island which is a part of the Windward Islands, lying just off the coast of Venezuela. Ferrera and another co-defendant purchased this foreign shell corporation for just under $30,000 from a California corporation that specialized in off-shore corporations which pretended to be banks. The defendants used a letterhead showing Union International's headquarters as a location in Mexico City. In reality, that location was one of Ferrera's homes. Sometimes he also lived in Los Angeles.

Ferrera claimed the titles of Vice President and Chairman of the Board of ACC, and President and Chairman of the Board of Union International. Graffia, an Illinois resident, held some impressive titles in the two corporations as well. What other corporate ...


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