Federal prosecutors say Ernie Pitt should not get $90,000 back

Winston-Salem Journal on October 17, 2012 released the following:

“By: MICHAEL HEWLETT

Federal prosecutors have told Ernie Pitt, the former chairman of the Housing Authority of Winston-Salem, that he should not get back the $90,000 he paid before his conviction on mail fraud charges was overturned in June.

Chris Clifton and Michael Grace, Pitt’s attorneys, filed a motion earlier this month in U.S. District Court asking that federal prosecutors return the $90,000 that Pitt paid in fines and restitutions related to his conviction on two counts of mail fraud in 2009. In June, the Fourth U.S. Circuit Court of Appeals in Richmond overturned that conviction.

But in court papers filed last Thursday, federal prosecutors said Pitt is not entitled to that money because it has already gone to the victim in the case – the Housing Authority of Winston-Salem – and the Crime Victims Fund. At most, the federal government could return $6,000 of the $90,000 as well as a $200 assessment that Pitt also paid.

However, the $84,000 that was paid to the Housing Authority of Winston-Salem is out of the question, federal prosecutors said.

“Granting Defendant’s request for return of the $84,000 would require the expenditure of $84,000 from the United States Treasury and would result in a monetary judgment against the United States,” Assistant U.S. Attorney Frank Chut Jr. said in response to Pitt’s motion.

Clifton declined to comment on the U.S. Attorney General’s response. He said that he and Grace will file a reply in U.S. District Court in about two weeks.

A federal judge will have the final say in the matter, but no hearing date has yet been set.

The dispute over the $90,000 comes as federal prosecutors seek to retry Pitt on the two mail fraud charges.

In their motion, Clifton and Grace argued that without the money, Pitt “is unable to retain counsel of his choice to represent him and that the government’s failure to return said funds is in violation of the defendant’s constitutional rights.”

Pitt, who is the publisher of the Winston-Salem Chronicle, was initially charged with one count of wire fraud, four counts of financial transactions in a criminally deprived property, and two counts of mail fraud. He was convicted of the mail fraud charges after the jury deadlocked on the other charges.

The charges were filed in connection with a land deal involving Pitt and two other men — Tom Trollinger and Reid Lawrence, the former executive director of the housing authority.

In 2003, Pitt and Trollinger were partners in East Pointe Developers. Federal prosecutors alleged that Pitt and Trollinger joined with Lawrence to arrange for East Pointe Developers to buy the Lansing Ridge development, off Carver School Road, at foreclosure for $285,100. The property was then sold to Forsyth Economic Ventures, the housing authority’s nonprofit wing, for $414,000.

Trollinger and Pitt wrote checks to help cover the purchase price of Lansing Ridge and later wrote each other checks for $84,000 with the proceeds from the sale to the housing authority, prosecutors alleged.

Federal prosecutors said Pitt broke the law when he failed to disclose a conflict of interest in the land deal.

Federal prosecutors have scheduled Pitt’s retrial to start Dec. 17, but a request to continue the trial is pending.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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