Builder seeks to change guilty plea in Greylock conspiracy case
Despite his guilty plea 10 months ago, a Pittsfield builder never intended to defraud the Greylock Federal Credit Union, his attorney says in a new filing.
Pierce now seeks to withdraw his plea, a week after he was to be sentenced in connection with loans obtained from former Greylock executive Michael DiCenzo.
The move comes after U.S. District Court Judge Mark G. Mastroianni raised questions April 5 about Pierce's guilt at a sentencing hearing.
"Is he guilty?" Mastroianni asked Levinson, after hearing arguments that Pierce was an innocent manipulated by DiCenzo. "Why did he plead guilty?"
Instead of imposing sentence, Mastroianni stopped the proceeding and asked Pierce's attorney, Lori H. Levinson of Great Barrington, to file a motion in response to questions raised in court. She did that late Thursday.
"Defendant states that he has come to understand that he did not possess intent to defraud at the time he engaged in conduct that resulted in a fraud upon a federal credit union," Levinson writes in her motion, which seeks to rescind the plea her client entered last June. "And accordingly that there is a fair and just reason for requesting the withdrawal."
She concedes that the burden of proof is "heavy" to establish that Pierce has "a fair and just reason" to withdraw his plea.
The motion complicates what would have been the first sentencing in the Greylock fraud case, which was discovered by the institution nearly a decade ago and resulted in charges against DiCenzo in 2014. The U.S. Attorney's Office asserts the fraud was led by DiCenzo — who also pleaded guilty and awaits sentencing.
The government is expected to reply to Levinson's motion before April 29, the date of a resumed sentencing hearing for Pierce.
At last week's proceeding, Assistant U.S. Attorney Steven H. Breslow argued that the plea agreement should stand. "Mr. Pierce pled guilty because he was guilty. He agreed to every fact in this case," Breslow told Mastroianni.
In a court filing in late March ahead of sentencing, Levinson argued that her client should receive leniency in the case, which the government claims cost the credit union $3.55 million.
Breslow, in his sentencing memo, recommended that Pierce receive a jail term of 46 months, the low end of federal guidelines for the crimes involved. He argued that a penalty is needed "to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense."
The plea agreement also called for five years of supervised release and restitution of more than $3.77 million.
Levinson's motion to withdraw the guilty plea applies to the government's claim that Pierce engaged wittingly in a scheme to defraud Greylock. Technically, the charge is "Conspiracy to Commit Receipt of Money through Transactions of a Federal Credit Union with Intent to Defraud and to Commit False Statements to a Federal Credit Union."
Though Pierce accepted his responsibility for that charge last June, he now feels he misunderstood his relationship with DiCenzo. An independent forensic accounting firm hired by Greylock concluded that Pierce was not to blame for the fraud orchestrated by DiCenzo.
"We have concluded that DiCenzo exercised dominion and control over Pierce," reads a report by the firm, Sobel & Co. LLC. It found that DiCenzo had taken control of loans that Greylock issued to Pierce and to Pierce's businesses, "even handling monthly payments by taking draws against other lines of credit."
DiCenzo recruited Pierce as a borrower in 2006 and over time steered him into transactions designed to conceal the fraud, several inquiries concluded.
"Every loan made by DiCenzo to a Pierce entity after [Sept. 7, 2006] was designed to encumber Pierce to a level beyond any reasonable expectation of his being able to successfully repay," the Sobel report says. "Every loan modification made by DiCenzo on Pierce entity loans after that date was designed to make available to DiCenzo a vast pool of Pierce monies from which he could misappropriate."
Levinson does not dispute that once the fraud was detected, Pierce lied to the FBI about the nature of payments he made to a front company created by DiCenzo. But she notes that he quickly recanted his story, which DiCenzo had devised.
"In fact, the more research I did on the investigation into the activities of DiCenzo with respect to his role as the chief commercial lender at GFCU, the more convinced of Pierce's innocence I became," Levinson writes in her motion.
She says that Pierce believed at the time of his plea that he was guilty and that he declined what she describes as a plan for a "plausible defense." She writes in her motion that Pierce is naive about finance and also wanted, when he entered his plea, to put the matter behind him and also to avoid the uncertainty and cost of a long and complex trial.
Levinson cites federal court case law from 2002 and 2006 to argue that a judge can allow a motion to withdraw an earlier plea when "there is a serious claim of actual innocence."
Larry Parnass can be reached at firstname.lastname@example.org, at @larryparnass on Twitter and 413-496-6214.
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