United States v. Allen J. Pendergrass

CourtCourt of Appeals for the Eleventh Circuit
DecidedJanuary 13, 2025
Docket22-13018
StatusUnpublished

This text of United States v. Allen J. Pendergrass (United States v. Allen J. Pendergrass) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Allen J. Pendergrass, (11th Cir. 2025).

Opinion

USCA11 Case: 22-13018 Document: 51-1 Date Filed: 01/13/2025 Page: 1 of 27

[DO NOT PUBLISH] In the United States Court of Appeals For the Eleventh Circuit

____________________

No. 22-13018 ____________________

UNITED STATES OF AMERICA, Plaintiff-Appellee, versus ALLEN J. PENDERGRASS,

Defendant-Appellant.

Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:17-cr-00224-AT-CMS-1 ____________________ USCA11 Case: 22-13018 Document: 51-1 Date Filed: 01/13/2025 Page: 2 of 27

2 Opinion of the Court 22-13018

Before WILLIAM PRYOR, Chief Judge, and JILL PRYOR and BRASHER, Circuit Judges. PER CURIAM: Defendant Allen Pendergrass appeals his conviction for par- ticipating in a scheme to steal unclaimed property belonging to others. Pendergrass, along with co-defendant Terrell McQueen, contacted the City of Atlanta and other city and county govern- ments and requested lists of unclaimed funds being held by those entities. They then mailed fraudulent documents to the entities, falsely representing that they were acting on behalf of the owners to recover the funds. After a trial, a jury found Pendergrass guilty of aiding and abetting bank fraud, conspiracy to commit money laundering, and aiding and abetting identity theft. At the sentenc- ing hearing, the district court imposed a sentence of 46 months’ imprisonment. On appeal, Pendergrass challenges his convictions and sen- tence on multiple grounds. As to his convictions, he argues, among other things, that his Fifth and Sixth Amendment rights were vio- lated because of the government’s delay in indicting him and that there was insufficient evidence to support some of his convictions for aiding and abetting aggravated identity theft. As to his sentence, he says that the district court erred in applying an enhancement for fraud involving an authentication feature and in failing to give him an opportunity to allocute at sentencing. After careful review, and having heard oral argument, we affirm Pendergrass’s convictions because no Fifth or Sixth USCA11 Case: 22-13018 Document: 51-1 Date Filed: 01/13/2025 Page: 3 of 27

22-13018 Opinion of the Court 3

Amendment violation occurred and there was sufficient evidence to support his convictions for aggravated identity theft. As to his sentence, we conclude that the district court did not abuse its dis- cretion when it applied an enhancement for fraud. The district court did, however, commit plain error when it failed to afford Pendergrass an opportunity to allocute at the sentencing hearing. Accordingly, we affirm in part and vacate in part. We remand for resentencing after he has been given an opportunity to allocute. I. BACKGROUND A. Pendergrass’s Fraudulent Scheme and Initial Arrest Pendergrass’s fraudulent scheme began when he and McQueen discussed teaming up to run an asset recovery business in Atlanta. Pendergrass had submitted an open records request to the City of Atlanta and received a “holder’s list” identifying individ- uals and companies who had unclaimed funds that the city govern- ment was holding. He and McQueen planned to find contact infor- mation for the individuals or companies and try to convince them to hire the two of them to recover the funds. Pendergrass and McQueen would keep a percentage of the money recovered. The initial plan was legal. But when it proved unsuccessful, Pendergrass and McQueen turned to fraud. They submitted fraud- ulent documents to claim funds on behalf of the individuals and companies appearing on the holder’s list, even though they were not authorized to act on the holders’ behalf. The co-conspirators would keep the recovered funds for themselves. USCA11 Case: 22-13018 Document: 51-1 Date Filed: 01/13/2025 Page: 4 of 27

4 Opinion of the Court 22-13018

At first, they had trouble successfully implementing their fraudulent scheme. After they fooled the City of Atlanta into mail- ing them a $359,000 check made out to Holland & Knight “LLLP,” they managed to convince a PNC bank branch employee to open a checking account in McQueen’s name, “d/b/a Holland & Knight.” Doc. 264 at 95–96. 1 But the check never cleared. The next time—when a Texas county mailed them $160,000 in checks made out to the Lee Family Trust—they adjusted their approach by hir- ing an escrow agent to hold the funds instead of trying to deposit them directly. But the escrow agent got suspicious, figured out that Pendergrass and McQueen were not actually working for the Lee Family Trust, and contacted the Trust’s attorney. As they continued to refine their approach, they learned that the City of Atlanta would issue checks in the name of an asset re- covery company instead of the holder to whom the funds be- longed. And so, in early 2013 Pendergrass opened a bank account in the name of a nonexistent company, “Asset Financial Recovery Inc.,” and the fraudulent activities charged in this case began in ear- nest. Pendergrass and McQueen sent letters on Asset Financial let- terhead to the City of Atlanta requesting funds owed to Asset Fi- nancial’s purported clients. With each letter, they attached fraudu- lent power-of-attorney forms. The forms, which authorized Asset Financial to act on a purported client’s behalf, appeared to be signed by an employee of the client and notarized. But no client had signed the document, nor had it been notarized. Rather, the

1 “Doc.” refers to the district court’s docket entries. USCA11 Case: 22-13018 Document: 51-1 Date Filed: 01/13/2025 Page: 5 of 27

22-13018 Opinion of the Court 5

signature was forged, often by Pendergrass. The notary stamp on the document also was forged, often by Pendergrass’s subordinate, Eric Fitchpatric, who acted at Pendergrass’s direction. Pendergrass and McQueen directed their scheme mainly at victims who were owed money by the City of Atlanta, but they also sought funds from the City of Fort Collins, Colorado, on behalf of a purported client called Tousa Homes. Eventually, a representative of one of Pendergrass and McQueen’s purported clients learned that her signature had been forged and funds had been stolen. She reported the theft to the City of Atlanta. Atlanta police traced Asset Financial’s post office box to Pendergrass. Officers also obtained video showing Pendergrass cashing one of the checks he had received from the City of Atlanta. In late 2013, Atlanta police obtained warrants to search Asset Financial’s office and to arrest Pendergrass and McQueen on state charges. A team including Atlanta police officers and United States postal inspectors executed the warrants. The postal inspectors were involved because the United States Postal Inspection Service was investigating Pendergrass for another fraudulent scheme that involved the use of Asset Financial’s post office box. After the search warrant was executed, all computers, documents, and other evidence that had been seized were turned over to the United States Postal Inspection Service. After his arrest, Pendergrass initially was held in a local jail. After about two weeks, he was released on pretrial supervised re- lease. The supervision ended in early 2014 based on a standing USCA11 Case: 22-13018 Document: 51-1 Date Filed: 01/13/2025 Page: 6 of 27

6 Opinion of the Court 22-13018

Fulton County Superior Court order dictating that supervision ends after four months if no indictment is returned. After Pendergrass was released from the local jail, he was indicted in the Southern District of Ohio on charges of bank fraud arising from an unrelated scheme in which allegedly he cashed 51 treasury checks and stole over $500,000. And while that case was ongoing, he was arrested for theft in Fort Collins, Colorado, in con- nection with the Tousa Homes fraud. He pleaded guilty in both cases.

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United States v. Allen J. Pendergrass, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-allen-j-pendergrass-ca11-2025.