The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge
Monday, 27 February, 2012 04:41:53 PM
Clerk, U.S. District Court, ILCD
On July 20, 2011, Petitioner, Gary L. Knox, filed a pro se Motion to Vacate, Set Aside, or Correct Sentence Under 28 U.S.C. § 2255 (#1). Petitioner also filed supporting memoranda (#2, #3, #13), an affidavit in support (#7), and numerous other motions (#4, #5, #6, #8, #9, #10, #11, #12). On September 19, 2011, the Government filed its Response to Petitioner's Motion Pursuant to 28 U.S.C. § 2255 (#16). On November 14, 2011, Petitioner filed a Reply to the Government's Response (#18). Subsequently, Petitioner filed three additional memoranda (#19, #20, #21).
This court notes that Petitioner's many filings are lengthy, rambling, and difficult to decipher. It appears to this court that Petitioner believes that if he files enough paper, and says the same thing enough times, the court will conclude that there must be some merit to his arguments. However, after careful review of all of Petitioner's filings, this court agrees with the Government that Petitioner has presented nothing to establish that the indictment was insufficient, that he is "actually innocent" of any of the charges to which he knowingly pled guilty, or that his counsel was ineffective in any way.
Accordingly, this court rules as follows: (1) Petitioner's pro se Motion to Vacate, Set Aside, or Correct Sentence (#1) is DENIED; (2) because Petitioner's Motion under § 2255 is completely without merit, Petitioner's additional motions (#4, #5, #6, #8, #9, #10, #11, #12) are also DENIED; and (3) because Petitioner has not made a substantial showing of the denial of a constitutional right, a certificate of appealability is DENIED.
In Case No. 05-CR-20029, Petitioner was charged, along with his co-defendants Frank Kelly Ciota and Dennis Wiese, Jr., in a 42-page superseding indictment which alleged various counts of bank fraud, mail fraud, wire fraud and conspiracy to commit money laundering. Specifically, Petitioner was charged with three counts of bank fraud, in violation of 18 U.S.C. § 1344, one count of wire fraud, in violation of 18 U.S.C. § 1343, six counts of mail fraud, in violation of 18 U.S.C. § 1341, and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). The superseding indictment set out in a detailed and specific manner the actions of Petitioner, Ciota and Wiese in devising and executing a broad and long-lasting scheme to defraud various real estate lenders, including Central Illinois Bank, Champaign, Illinois, a federally-insured bank, real estate sellers, real estate buyers, and others. The superseding indictment stated that Petitioner and his co-defendants participated in more that 150 fraudulent real estate sale and financing transactions and "fraudulently obtained a total of more than $3,000,000 from the transactions, which they converted to their personal use and used to promote their ongoing fraudulent scheme."
The superseding indictment alleged that Petitioner and his co-defendants "reaped the benefits of the scheme by causing the payment of appraisal fees to Defendant WIESE and by Defendants KNOX and CIOTA converting the profits from the fraudulent transactions to their personal use and using such profits to promote the ongoing fraudulent scheme (emphasis added)." The superseding indictment alleged that Petitioner and Ciota conspired to launder the proceeds of the criminal scheme. The superseding indictment alleged that, as part of this conspiracy, Petitioner and Ciota engaged in numerous financial transactions which involved as much as $1,000,000 in bank cashier's checks and personal bank checks. The superseding indictment alleged that these transactions involved "the proceeds of their fraudulent scheme, with the intent to promote the carrying on of such scheme and with the intent to conceal and disguise the nature, location, source, ownership, and control of the proceeds of the scheme."
On April 19, 2006, Petitioner, who was represented by appointed counsel Robert Alvarado, pleaded guilty to all 11 counts of the superseding indictment. On that date, this court conducted a lengthy and thorough colloquy with Petitioner pursuant to Rule 11 of the Federal Rules of Criminal Procedure. At the hearing, Petitioner was administered an oath and was informed by this court "that means that the answers to my questions will subject you to the penalty of perjury for making a false statement," criminal offenses for which consecutive sentences of imprisonment could be imposed. Petitioner then stated that he was 60 years old, had completed high school and had attended Millikin University for four and one half years. He stated that he also received an accreditation from the Northwestern School of Mortgage Banking. Petitioner stated that he was satisfied with the representation of his attorney. He also stated that he had read the lengthy superseding indictment in this case "about 500 times" and indicated that he was fully conversant with it. Petitioner therefore waived reading the indictment at the hearing. This court then carefully and thoroughly explained to Petitioner all of the rights he was giving up by pleading guilty. This court also informed Petitioner that it would not accept his plea of guilty "unless I am satisfied that you're doing that because you are, in fact, guilty and that there is a factual basis to support that."
This court then discussed the sentences which could be imposed for Petitioner's convictions. When this court asked Mr. Alvarado regarding Petitioner's understanding of the potential guideline sentence he faced, Mr. Alvarado stated: "Mr. Knox is a very intelligent client. He's very knowledgeable about the federal sentencing guidelines. We've discussed many possible enhancements. Suffice it to say we have talked about long periods of imprisonment that could be imposed in this case." After this court was satisfied that Petitioner understood the possible sentences he faced and that no one had promised him that this court would impose a particular sentence, Petitioner agreed that his sentence was "an unknown and uncertainty" he was willing to accept as a risk.
The prosecutor, Timothy A. Bass, then set out the elements of the offenses Petitioner was pleading guilty to: bank fraud, wire fraud, mail fraud, and conspiracy to commit money laundering. Mr. Bass then proceeded to set out a lengthy factual basis for the guilty pleas as follows:
Your Honor, the government's evidence, in sum, would be that between 1999 and continuing into 2005, in the Central District of Illinois and elsewhere, the defendant and his co-defendants, Mr. Ciota and Mr. Wiese, devised and participated in a scheme to defraud various real estate lenders, including Central Illinois Bank of Champaign, a federally insured bank, real estate buyer - - real estate sellers, real estate buyers, and others to obtain their money and property by means of false and fraudulent pretenses, representations, and promises.
The object of the defendants' scheme to defraud was to engage in the practice of fraudulent real estate "flipping" whereby the defendants made false representations, including fraudulent real estate appraisals prepared by Defendant Wiese and used by Defendants Knox and Ciota, that caused real estate owners to sell, real estate buyers to purchase, and lending institutions to finance real estate properties that were sold at prices which the defendants caused to be fraudulently inflated to substantially higher than their reasonable value.
The defendants then reaped the benefits of the scheme by causing the payment of appraisal fees to Defendant Wiese and by Defendants Knox and Ciota converting the profits from their fraudulent transactions to their personal use and by using such profits to promote the ongoing scheme.
In seeking to achieve the objectives of their scheme the defendants devised and participated in, Mr. Knox in particular devised and participated in a total of more than 150 fraudulent real estate sale and financing transactions totaling more than $8 million. The defendants fraudulently obtained a total of more than $3 million from the transactions which they converted to their personal use and used to promote their ongoing fraudulent scheme.
As a result of the scheme, the defendants caused substantial losses to various mortgage lenders and real estate sellers and buyers and caused buyers to file or face bankruptcy.
Particulars of the scheme, Your Honor, are set forth in detail in pages 5 through 13 of the indictment. And in essence, what those pages set forth is that Mr. Knox and his co-defendant, Mr. Ciota, would go out and identify various owners of real estate, rental real estate to sell. Certain representations were made to various sellers whereby in most cases those sellers would agree to sell a piece of property at a particular price.
In one instance, though, however, regarding Count 1, Mr. Knox and Mr. Ciota sold a piece of real estate - - in two instances, Count 1 and Count 2, Mr. Knox and Mr. Ciota sold pieces of real estate without the approval of the owner of the real estate.
But in the remainder of the instances of these transactions, the seller would have agreed to sell a piece of property at a particular price. Mr. Knox and Mr. Ciota would then go out with Mr. Wiese, and those properties would be fraudulently inflated to a value much higher than their actual value. They then would locate or contact various real estate buyers to invest in this real estate and make fraudulent representations to those buyers, ...