Palemon Sanchez appealed from a guilty-plea conviction and sentence for conspiracy, wire fraud, aiding and abetting and making false statements to HUD. Sanchez was originally charged by information on March 26, 2001 in connection with his role in submitting fraudulent mortgage applications to various lending institutions and to HUD on behalf of low income buyers of his housing properties. The charges were initially filed by the office of the U.S. Attorney in Los Angeles, California. Sanchez was sentenced to forty-six months in prison, followed by three years supervised release and was ordered to pay restitution of 977,641.00.

In an unpublished decision, the Ninth Circuit Court of Appeals confirmed the conviction stating that it was not reasonably likely that Sanchez would have refrained from entering a guilty plea had the district court provided a more complete recitation of the charges. The Court vacated the sentencing as the findings of fact relating to Sanchez's leadership role, rendered when the U.S. Sentencing Guidelines were mandatory, violated Sanchez's rights under United States v. Booker, 543 U.S. 220 (2005).