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Palmieri v. Giurbino

December 7, 2006

CARMEN JOHN PALMIERI, PLAINTIFF,
v.
GEORGE GIURBINO, ACTING WARDEN DEFENDANT.



The opinion of the court was delivered by: Hon. Leo S. Papas U.S. Magistrate Judge

ORDER: (1) DENYING PETITION FOR WRIT OF HABEAS CORPUS (2) ISSUING A CERTIFICATE OF APPEALABILITY

Petitioner Carmen John Palmieri ("Petitioner"), a state prisoner represented with counsel, filed a Petition for Writ of Habeas Corpus pursuant to 28 U.S.C. § 2254, challenging his sentence in San Diego Superior Court case number D043617. Respondent George Giurbino ("Respondent") has filed an Answer to the Petition. Petitioner has filed a Traverse to Respondent's Opposition. On August 16, 2006, Petitioner and Respondent stipulated to the undersigned's jurisdiction for all issues raised in this case.

I. Factual History

On November 17, 2003, Petitioner plead no contest to fifty-eight counts of grand theft, fifty-eight counts of making false statements in connection with the sale of a security and twenty eight counts of theft over $400.00 from an elderly person or dependent adult. The parties stipulated that the factual basis for the Petitioner's plea would be derived from the preliminary hearing transcript and the prosecution's investigative reports. (Respondent's Lodgment No. 3, at 3). The following facts are taken from those documents.

From early 1999 to late 2001, Petitioner defrauded approximately 190 investors of nearly 13 million dollars by soliciting victims to invest in viatical contracts that were never obtained. Twenty-eight of the victims were over 65 years old.

In 1996, Petitioner obtained a license to sell viatical contracts*fn1 in California. Then, in San Diego, he established a viatical settlement company, National Medical Funding. National Medical Funding was incorporated and solely owned by Petitioner who was listed as the President of the Company. National Medical Funding advertised in gay and lesbian magazines hoping to attract those terminally ill suffering with AIDS. Petitioner's company also advertised in senior publications.

In addition to National Medical Funding, Petitioner also established Trust Management Services. Petitioner advertised Trust Management Services as an independent escrow company, which is a legal requirement for the sale of viaticals. However, Trust Management Services was comprised of only a mail drop at Mail Boxes Etc. in San Francisco, California. Petitioner was discovered to be the sole controller of Trust Management Services, an unlawful interest in the viatical settlement context.

Investors were told that to invest in viatical contracts, they should deposit their funds with Trust Management Services. Investors were led to believe that Trust Management Services was an independent escrow company, when it was, in fact, owned and operated by Petitioner. Investors then would receive letters from both Trust Management Services, confirming their deposit, and from National Medical Funding, identifying the name of a viator, the name of the viator's life insurance company, and confirming that the investor had been named the irrevocable beneficiary of the viator's life insurance policy. All correspondence was signed by Lawrence C. Reed, a former business associate of Petitioner. It was later discovered that Reed's signature had been forged and his name was used without his knowledge.

No viatical contracts were ever purchased on behalf of investors. Rather, the money procured from investors was withdrawn from Trust Management Services and paid to either the Petitioner personally or to his various other business interests. In total, Petitioner deposited approximately $32 million dollars into the Trust Management Services account between January 1999 and May 2002. Of the $32 million, $21.3 million came from investors.

Petitioner gave investors 12 to 14 month income projections concerning the maturity of their investments. When investors did not receive payment, they attempted to contact Reed (the name appearing on all correspondence from Trust Management Services). Most efforts were unsuccessful and investors were seldom able to speak to Petitioner. Most calls were forwarded to an answering service. Investors' efforts to obtain payment resulted in receipt of insufficient fund checks, partial payments, and deflection of payment inquiries with promises to roll investments into other viatical accounts.

Investors' complaints to the Department of Corporations eventually caused the execution of several search warrants in March 2002 at Petitioner's corporate office, several related businesses, storage facilities and his residence. The searches uncovered a script used to procure investors and a list of potential viators. On October 23, 2002, an arrest warrant was issued and Petitioner was apprehended by authorities.

II. Procedural History

On November 17, 2003, Petitioner plead no contest to fifty-eight counts of grand theft [California Penal Code § 487(a)], fifty-eight counts of making a false statement in connection with the sale of a security (California Corporations Code §§ 25401 and 25540), and twenty-eight counts of theft over $400.00 from an elderly or dependent adult [California Penal Code § 368(d)].*fn2 Petitioner is currently serving an aggregate term of 30 years in prison.

Petitioner's sentence was composed of an upper term of four years for the §368(d) theft alleged in Count 33, and consecutive one-year terms (one-third of the middle term) on 21 other counts alleging theft in violation of 368(d). The court also imposed a consecutive five-year upper term for the §186.11(a)(2) enhancement. The court imposed concurrent terms on 40 other ...


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