Opinion
No. 2:08-cr-0114 TLN DAD P
10-30-2015
UNITED STATES OF AMERICA, Respondent, v. STEFAN A. WILSON, Movant.
FINDINGS AND RECOMMENDATIONS
Movant is a federal prisoner proceeding pro se with a motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. On September 15, 2009, following his entry of a plea of guilty pursuant to a plea agreement, movant was convicted of one count of wire fraud in violation of 18 U.S.C. § 1343 and one count of making and subscribing a false income tax return in violation of 26 U.S.C. § 7206(1). Movant now seeks post-conviction relief on the grounds that his trial counsel rendered him ineffective assistance. Upon careful consideration of the record, the evidence including that adduced at an evidentiary hearing and the applicable law, the undersigned recommends that movant's § 2255 motion be denied.
This motion was assigned, for statistical purposes, the following civil case number: No. 2:13-cv-2466 TLN DAD P.
I. Procedural Background
On March 13, 2008, an indictment was filed charging movant with multiple counts arising out of his operation of an alleged Ponzi scheme known as CIC Investment Fund. (ECF No. 10.) On March 17, 2009, movant pled guilty to one count of wire fraud (Count 14) and one count of making and subscribing a false income tax return (Count 31) pursuant to a written plea agreement. (ECF No. 63.) That plea agreement did not contain any agreement between the parties as to any appropriate sentencing range, but rather provided that "[s]entencing is a matter solely within the discretion of the Court and the Court is under no obligation to accept any recommendations made by the government, and the Court may in its discretion impose any sentence it deems appropriate up to and including the statutory maximum stated in this plea agreement." (Id. at 2.) On September 15, 2009, movant was sentenced to 236 months imprisonment in the custody of the U.S. Bureau of Prisons as to the wire fraud charge and 36 months imprisonment on the false tax return charge with those sentences to run concurrently, to be followed by a three year term of supervised release. (ECF Nos. 105 & 106.) In addition, imposition of a fine was waived due to movant's inability to pay a fine, the mandatory $200 special assessment was imposed, and movant was ordered to pay $12,514,623.35 in restitution to the victims of his offenses.
On September 17, 2009, movant filed a timely notice of appeal from the judgment. (ECF Nos. 104, 113.) In an unpublished opinion, the Ninth Circuit vacated petitioner's sentence and remanded for resentencing, explaining as follows:
The district court did not specifically rule on the Defendant's objections to three enhancements contained in the Presentence Investigation Report (PSR). Furthermore, the district court did not rule on the Defendant's objection to the Criminal History Category assigned in the PSR. The Court cannot properly review the sentence on appeal without rulings by the district court on these objections. See United States v. Carty, 520 F.3d 984, 991 (9th Cir. 1008) (en banc); Kimbrew, 406 F.3d at 1151. Thus, we must vacate and remand. See United States v. Denton, 611 F.3d 646, 651 (9th Cir. 2010).(ECF No. 113.)
The Defendant's remaining allegations of procedural error - that the district court failed to inquire whether the Defendant had read the PSR and that the district court did not adopt the PSR - can be resolved by the district court on remand.
On remand for resentencing, the then assigned District Judge made certain findings and re-imposed the same sentence that had originally been imposed upon movant, including the 236-month prison term. (ECF No. 128.) Movant again appealed. (ECF No. 129.) On June 15, 2012, the Ninth Circuit affirmed the district court's findings on remand, and affirmed movant's sentence. (ECF No. 149.) In relevant part, the Ninth Circuit found that upward adjustments based on movant's role in the offense, his employment of sophisticated means in committing his crimes, and his abuse of trust, as provided for in USSG §§ 3B1.1(c), 2B1.1(b), and 3B1.3, were properly applied by the trial judge to increase the sentencing guideline range applicable in movant's case. (Id. at 2-3.)
Movant filed his §2255 motion in this court on November 25, 2013. (ECF No. 188.) An evidentiary hearing was held on September 29-30, 2015 on movant's claim that his guilty plea was coerced by his trial counsel's promises regarding the sentence he would receive if he pled guilty to the charges in an "open plea." Movant filed a post-hearing brief on October 15, 2015. (ECF No. 254.) Respondent filed a post-hearing brief on October 22, 2015. (ECF No. 255.)
II. Applicable Law
A. Motions Brought Pursuant to 28 U.S.C. § 2255
A federal prisoner making a collateral attack against the validity of his or her conviction or sentence must do so by way of a motion to vacate, set aside or correct the sentence pursuant to 28 U.S.C. § 2255, filed in the court which imposed sentence. United States v. Monreal, 301 F.3d 1127, 1130 (9th Cir. 2002). Under § 2255, the federal sentencing court may grant relief if it concludes that a prisoner in custody was sentenced in violation of the Constitution or laws of the United States. Davis v. United States, 417 U.S. 333, 344-45 (1974); United States v. Barron, 172 F.3d 1153, 1157 (9th Cir. 1999). To warrant relief, a petitioner must demonstrate the existence of an error of constitutional magnitude which had a substantial and injurious effect or influence on the guilty plea or the jury's verdict. Brecht v. Abrahamson, 507 U.S. 619, 637 (1993); see also United States v. Montalvo, 331 F.3d 1052, 1058 (9th Cir. 2003) ("We hold now that Brecht's harmless error standard applies to habeas cases under section 2255, just as it does to those under section 2254.") Relief is warranted only where a petitioner has shown "a fundamental defect which inherently results in a complete miscarriage of justice." Davis, 417 U.S. at 346. See also United States v. Gianelli, 543 F.3d 1178, 1184 (9th Cir. 2008).
Under § 2255, "a district court must grant a hearing to determine the validity of a petition brought under that section, '[u]nless the motions and the files and records of the case conclusively show that the prisoner is entitled to no relief.'" United States v. Blaylock, 20 F.3d 1458, 1465 (9th Cir. 1994) (quoting 28 U.S.C. § 2255). The court may deny a hearing if the movant's allegations, viewed against the record, fail to state a claim for relief or "are so palpably incredible or patently frivolous as to warrant summary dismissal." United States v. McMullen, 98 F.3d 1155, 1159 (9th Cir. 1996) (internal quotation marks omitted). See also United States v. Withers, 638 F.3d 1055, 1062-63 (9th Cir. 2011); United States v. Leonti, 326 F.3d 1111, 1116 (9th Cir. 2003). To warrant a hearing, therefore, the movant must make specific factual allegations which, if true, would entitle him to relief. Withers, 638 F.3d at 1062; McMullen, 98 F.3d at 1159. Mere conclusory assertions in a § 2255 motion are insufficient, without more, to require a hearing. United States v. Hearst, 638 F.2d 1190, 1194 (9th Cir. 1980).
B. Ineffective Assistance of Counsel
The clearly established federal law for ineffective assistance of counsel claims is Strickland v. Washington, 466 U.S. 668 (1984). To succeed on a Strickland claim, a defendant must show that (1) his counsel's performance was deficient and that (2) the "deficient performance prejudiced the defense." Id. at 687. Counsel is constitutionally deficient if his or her representation "fell below an objective standard of reasonableness" such that it was outside "the range of competence demanded of attorneys in criminal cases." Id. at 687-88 (internal quotation marks omitted). "Counsel's errors must be 'so serious as to deprive the defendant of a fair trial, a trial whose result is reliable.'" Harrington v. Richter, 562 U.S. 86, 104 (quoting Strickland, 466 U.S. at 687).
The United States Supreme court has confirmed that the Sixth Amendment right to counsel "extends to the plea-bargaining process." Lafler v. Cooper, ___ U.S. ___, 132 S. Ct. 1376, 1384 (2012). To prevail on such a claim, a petitioner must demonstrate "'gross error on the part of counsel,'" Turner v. Calderon, 281 F.3d 851, 880 (9th Cir. 2002) (quoting McMann v. Richardson, 397 U.S. 759, 772 (1970)), and that the advice he received from his counsel was "so incorrect and so insufficient that it undermined his ability to make an intelligent decision about whether to accept the [plea] offer.'" Id. (quoting United States v. Day, 969 F.2d 39, 43 (3rd Cir. 1992) (noting that "that familiarity with the structure and basic content of the Guidelines . . . has become a necessity for counsel who seek to give effective representation")).
However, defense counsel is not "required to accurately predict what the jury or court might find." Turner, 281 F.3d at 881. See also McMann, 397 U.S. at 771 ("uncertainty is inherent in predicting court decisions."); United States v. Martini, 31 F.3d 781, 782 n.1 (9th Cir. 1994) ("Trials are difficult to predict, and advising a criminal defendant whether to accept or reject a plea offer can be a tricky proposition."). Nor is defense counsel required to "discuss in detail the significance of a plea agreement," give an "accurate prediction of the outcome of [the] case," or "strongly recommend" the acceptance or rejection of a plea offer. Turner, 281 F.3d at 881. Although counsel must fully advise the defendant of his options, he is not "constitutionally defective because he lacked a crystal ball." Id. Finally, counsel are strongly presumed to have engaged in conduct that falls within the wide range of reasonable professional assistance. See Strickland, 466 U.S. at 689; Hughes v. Borg, 898 F.2d 695, 702 (9th Cir. 1990).
A mere inaccurate prediction of a sentence, standing alone, does not constitute ineffective assistance of counsel. Iaea v. Sunn, 800 F.2d 861, 865 (9th Cir. 1986). However, "the gross mischaracterization of the likely outcome . . . , combined with the erroneous advice on the possible effects of going to trial, falls below the level of competence required of defense attorneys." Id. at 865 (citations omitted). See also United States v. Manzo, 675 F.3d 1204 (9th Cir. 2012) (trial counsel's advice to defendant about his possible sentence constitutionally deficient where the misadvice "had major impact on the calculation of the discretionary Sentencing Guidelines."). The relevant question is not whether "counsel's advice [was] right or wrong, but . . . whether that advice was within the range of competence demanded of attorneys in criminal cases." McMann, 397 U.S. at 771.
As a general rule, "defense counsel has the duty to communicate formal offers from the prosecution to accept a plea on terms and conditions that may be favorable to the accused." Missouri v. Frye, ___ U.S. ___, ___, 132 S. Ct. 1399, 1408 (2012). Trial counsel is also to "advise a client to enter a plea bargain when it is clearly in the client's best interest." United States v. Leonti, 326 F.3d 1111, 1117 (9th Cir. 2003). "[W]here the issue is whether to advise the client to plead or not 'the attorney has the duty to advise the defendant of the available options and possible consequences' and failure to do so constitutes ineffective assistance of counsel." United States v. Blaylock, 20 F.3d 1458, 1465 (9th Cir. 1994) (quoting Beckham v. Wainwright, 639 F.2d 262, 267 (5th Cir.1981)). In short, trial counsel must give the defendant sufficient information regarding a plea offer to enable him to make an intelligent decision of whether to accept or reject it. Id. at 881.
Prejudice is found where "there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Strickland, 466 U.S. at 694. Where a plea offer has lapsed or been rejected because of trial counsel's deficient performance and the defendant has later accepted another, less favorable plea offer,
defendants must demonstrate a reasonable probability they would have accepted the earlier plea offer had they been afforded effective assistance of counsel. Defendants must also demonstrate a reasonable probability the plea would have been entered without the prosecution canceling it or the trial court refusing to accept it, if they had the authority to exercise that discretion under state law. To establish prejudice in this instance, it is necessary to show a reasonable probability that the end result of the criminal process would have been more favorable by reason of a plea to a lesser charge or a sentence of less prison time.Frye, 132 S. Ct. at 1409. In order to demonstrate prejudice where a defendant claims that trial counsel's defective advice caused him to accept a plea offer instead of proceeding to trial, a defendant must demonstrate "a reasonable probability that, but for counsel's errors, he would not have pleaded guilty and would have insisted on going to trial." Hill v. Lockhart, 474 U.S. 52, 59 (1985).
III. Movant's Claims
A. Trial Counsel's Promises Regarding Movant's Sentence
1. Description of Claim
In his first ground for federal habeas relief, movant claims that his retained trial counsel rendered him "constitutionally ineffective assistance of counsel by coersing [sic] movant to plead guilty involuntarily and unintelligently in violation of the Sixth Amendment." (ECF No. 188 at 3.) Specifically, movant claims that his guilty plea was coerced by his trial counsel's promise to him that he would receive a sentence of no more than five years in prison if he pled guilty. (Id. at 3, 11-16, 18-30.) Movant states that his trial counsel made this promise to him and also to his family members. (Id. at 11, 12-13, 19.) Movant states that this promise by his counsel regarding the sentence he would receive if he pled guilty was accepted by his family "as an absolute truth" and that movant "was completely convinced." (Id. at 11, 13.) Movant states that he repeatedly questioned his counsel about his ability to guarantee a specific sentence, but his counsel did not retract his statements. (Id. at 12-14.) Movant contends that his retained trial counsel did not merely predict what his sentence might be if he pled guilty, but told him "what his sentence in fact would be." (emphasis in original). (Id. at 23.)
Movant further explains that he and his trial counsel discussed a plea offer from the government in which the government agreed to stipulate to a sentencing range of 151-188 months imprisonment under the United States Sentencing Guidelines (USSG) and to recommend to the sentencing judge that movant be sentenced to the "low end" of that range, 151 months. (Id. at 14.) Movant states that he expressed concern about accepting this offer because of "such a high Guidelines range and because he had not defrauded all the investors from the beginning, a point the government wanted concession." (Id.) According to movant, his trial counsel responded to the offer by telling him that the Sentencing Guidelines were "immaterial" and that the trial judge would sentence him to "three to five years" "regardless of how the guidelines are calculated." (Id.) Ultimately, according to movant, his counsel advised him to reject the government's plea offer and to enter a hybrid form of an "open plea" (i.e., movant would plead guilty to two counts with the governments agreeing to dismiss the remaining counts but without the benefit of a government stipulation as to the applicable guideline range or an agreed upon government recommendation regarding a sentence within that range) in order to "guarantee a sentence of no more than five (5) years." (Id. at 14-15.) As a result, the plea agreement that movant entered into contained no stipulation between the parties as to the applicable sentencing guideline range or any agreement as to what sentence the government would seek. (ECF No. 63.)
Movant also alleges that his trial counsel gave him "grossly incompetent" advice about the applicability of the Sentencing Guidelines to his case. According to movant, this incompetent advice included inaccurate representations to him by his counsel that: (1) the government would have to prove that movant was a registered investment advisor in order to upwardly adjust his offense level for "Abuse of Position of Trust or Use of Special Skill" under USSG § 3B1.3; (2) the increase in his offense level based upon "sophisticated means" set forth in USSG § 2B1.1(b) (10) would not apply to movant; (3) the upward adjustment in the offense level for being a "leader or organizer" under USSG § 3B1.1(c) was not applicable to movant unless other individuals were indicted with respect to the fraud; (4) movant would be sentenced "regardless of how the probation officer scores the guidelines" and "regardless of what the Sentencing Guidelines say;" and (5) movant would "come out as a criminal history [category] three," even though his criminal background actually "mandated a criminal history category IV." (ECF No. 188 at 14, 18.) Movant contends that his trial counsel's erroneous advice on these sentencing issues made it impossible for him to make an intelligent decision as to whether to enter an "open" plea of guilty, and instead caused him to reject the government's first, more favorable, plea offer and to plead "open with no protection." (ECF No. 200 at 10, 25.)
Movant also claims that his guilty plea was involuntary because, prior to his acceptance of the government's plea offer, his counsel demanded payment of additional attorney fees and threatened that if not paid, he would withdraw from movant's representation. (ECF No. 188 at 15.) Movant states that this "terrified" him; accordingly, the money was paid "in short order." (Id.) Movant also states that his counsel advised him not to mention to the trial court "any of the promises and guarantees with respect to a sentence term and the inapplicability of various sentencing enhancements that [counsel] had made to Movant or Movant's family." (Id.) Movant claims that trial counsel's threats that he would abandon the case if he did not receive additional fees, coupled with counsel's advisement that movant "had to disavow the existence of [counsel's] patently false sentencing promises and benefits to be received by entering an 'open' plea," rendered his guilty plea involuntary. (Id. at 30.)
In sum, movant claims that his retained counsel induced him to plead guilty with: (1) false promises and guarantees, both to him and to his family, that he would receive a prison sentence in the 3-5 year range; (2) threats to withdraw from the case if he was not paid additional fees; (3) a "threat" that movant should not mention any promises made by counsel about his sentence to the trial judge; and (4) erroneous legal advice about the Sentencing Guidelines and the applicability of certain guideline provisions, described above. (Id. at 16, 18-19.) Movant argues,
[b]ased on [counsel's] threat to quit my case, his faulty explanation of how the Sentencing Guidelines worked, his misguided legal advice that the enhancements (sophisticated means, abuse of trust, organizer) did not apply (openly misstating the law on particular enhancements), his mischaracterization of Judge Karlton and his view of the Sentencing Guidelines, his erroneous guidance of my criminal history category, and his directing me to reject the Government's plea offer . . . to sign an open plea in order to receive a sentence of three (3) to five (5) years, I was coerced, pressured, and deceived into relinquishing my trial rights, rejecting the government's plea offer, and entering an open plea.(ECF No. 200 at 26.)
Movant also states that absent "the threats" of his counsel he would not have pled guilty but would have insisted on going to trial. (ECF No. 188 at 29.) Movant claims that he insisted to his trial counsel from the inception of the case that he was innocent of the charges against him. On the other hand also implies that absent his trial counsel's guarantees with respect to sentencing, he would have accepted the government's earlier plea offer which included a stipulation regarding the applicable guideline sentencing range and a government recommendation of a sentence at the low end of that range.
At the evidentiary held in this action, petitioner appeared to emphasize that had he been properly advised by his counsel he would have accepted the government's earlier plea offer and not proceed to trial.
In support of these claims, movant has filed his own declaration under penalty of perjury and the declarations of his father, uncle, and brother. Movant's declaration essentially tracks his allegations as set forth above. (Id. at 80-88.) Movant's family members declare, essentially, that movant's trial counsel led them to believe through statements made at various meetings that if movant pled guilty he would receive a sentence of four years in prison and that they sincerely believed counsel's statements that this was the sentence movant would receive . (Id. at 65-76.)
Movant also filed partial transcripts of several purported telephone conversations, conducted over monitored jail telephones, between himself and his trial counsel in support of his claim that his guilty plea was induced by his counsel's guarantees with respect to the sentence he would receive and counsel's inaccurate predictions about the applicability of the Sentencing Guidelines to his case. (Id. at 111-48.) At the evidentiary hearing, movant testified that at one point he possessed the complete transcripts of these telephone conversations, but he threw out the transcripts that he didn't think were relevant to his claims for collateral relief. (ECF No. 250 at 69, 107-110.)
Accordingly, neither the audiotapes of these jail telephone conversations nor complete transcripts of them were filed with this court. Partial transcripts of some of these conversations were admitted into evidence at the evidentiary hearing, with the recognition that they were taken, at least partially, out of context. (Id. at 71.)
2. Evidentiary Hearing
On September 29 and 30, 2015, the undersigned held an evidentiary hearing on movant's claims. At the outset of that hearing, movant's counsel argued that movant's trial counsel rendered ineffective assistance in grossly miscalculating the applicability of various upward adjustments under the sentencing guidelines to movant's case, which led trial counsel to inaccurately predict the sentence which movant was likely to receive, and contributed to counsel's faulty advice to movant to reject the government's plea offer and enter the hybrid "open" pleas of guilty to two counts under which he was sentenced. (Id. at 5-7.)
Movant's father, mother, uncle, brother and former wife took the witness stand and testified consistently with the affidavits filed by movant's father, uncle and brother that, at various meetings, movant's trial counsel told them, or "guaranteed" as they interpreted it, that movant would receive a sentence of four years in prison, "five years or less," or "five to seven years" if he entered an "open" plea. (Id. at 31, 36, 47, 59, 146, 159, 170, 173, 180, 192.)
Movant also testified. In relevant part, he testified that based on his counsel's representations to him, he believed if he entered the "open" plea he would receive a prison sentence of "somewhere between three and five years." (Id. at 83-84, 94.) Movant claimed to believe this even after the government offered him a plea agreement which included a stipulation to an applicable sentencing guideline range of between 151 and 188 months in prison with a government recommendation of the imposition of a 151 month sentence. (Id. at 94, 103-04.) Movant testified that his trial counsel told him "the [sentence] enhancements don't apply . . . the guidelines aren't important . . . ." (Id. at 84.)
In his evidentiary hearing testimony movant repeated the allegation of his § 2255 motion that his trial counsel told him not to tell the trial judge at the plea colloquy about his conversations with counsel regarding "sentencing ranges" and the guidelines, but just to answer the judge's questions "yes or no." (Id.) Movant also testified, unconvincingly, that when the trial judge asked him whether anyone had made any promises to him other than those contained in the plea agreement to induce him to plead guilty he said "no" because he understood that question to be asking only whether anyone had offered him "money or you can get something" in exchange for his guilty plea. (Id. at 84-85, 132-34.) According to movant, he did not think the judge was asking him about his own counsel's assurances to him about what his sentence would be. (Id. at 85.)
Movant also testified at the hearing that his trial counsel told him the "sentencing enhancement" for having played a leadership role in the commission of the fraud would not apply to him unless someone else in his organization was indicted before he pled guilty. (Id. at 86.) Specifically, he testified that his counsel told him that "leadership does not apply in my case because nobody else was indicted." (Id. at 88.) Movant described the nature of his counsel's advice to him in this regard as follows:
He actually encouraged me it'd be good if I would hurry up and plea (sic) before anybody else might be indicted because he thought Dr. Barham was going to be indicted. And he said, you know, if
you get indicted and get sentenced - I'm not sure if he said sentenced, but if you plead out before that, that's good for you because then they can't say anybody else was involved. There's no leadership role here.(Id.) Movant also testified, however, that he had previously told his counsel that "Barham was out recruiting investors." (Id. at 87.) Movant also reviewed with his counsel the factual basis for his plea, including the paragraph of that factual basis which stated that "one of the primary promoters of the CIC Investment Fund was Dr. Stephen Barham, who recruited numerous investors." (Id. at 88; see also Defense Exhibit A-58.)
Movant testified that his trial counsel told him the upward adjustment for "abuse of position of trust" would typically not apply in cases such as his unless the defendant was a registered investment advisor. (ECF No. 250 at 90; see also Defense Exhibit C-17.) Movant testified he would have been willing to accept the government's original plea offer if he had known "the correct facts and law about the enhancements." (ECF No. 250 at 93.)
Movant acknowledged that he was advised at his arraignment on the indictment that the maximum possible penalty for wire fraud was up to 30 years in prison. (Id. at 96.) He further testified that after the presentence report was prepared by the probation officer and included the recommendation of a 236 month prison sentence, his trial counsel "downplayed" that recommendation and told him "the enhancements don't apply, it's going to be a lot lower" and that the presentence report had "no influence on the court." (Id. at 102.) Movant testified that he believed his trial counsel's advice that he "would get three to five years because Judge Karlton is lenient, not a heavy sentencer, and none of these enhancements apply . . . we have the best judge, Judge Karlton hates the guidelines." (Id. at 120.)
Movant testified that he directed his trial counsel to reject the government's plea offer with a stipulated guideline range of 151-188 months in prison and a government recommendation of a 151 month sentence. (Id. at 111-12.) He did so, movant testified, because his counsel told him that "the only way to get the three to five years [sentence] is to plead open." (Id. at 112.) However, as the sentencing hearing approached, his counsel began suggesting other possible sentences, such as seven or eight years in prison. (Id. at 134.) Movant testified that even after trial counsel suggested these higher possible sentences, he still believed he had made the right decision to "plead open" because of the "promises" previously made by his counsel. (Id. at 136-37.) Movant testified that his counsel told him "all along, from the first day he came and visited me" that he could get "a three to seven-year sentence from an open plea." (Id. at 81.)
Movant also testified that his trial counsel told him the trial judge "held him [counsel] in high regard and the judge knew him well," and that he was "close" with the prosecutor, but counsel did not explain how this would cause movant to receive a five year or any other sentence. Movant conceded at the evidentiary hearing that his counsel did not tell him that he had a "secret, underhanded deal" in movant's case (Id. at 137.)
A private investigator, a former federal probation officer, who worked with movant's counsel on this case, testified that during a jail visit he heard counsel tell movant that "there were no guarantees and that Mr. Wilson had to recognize that he could get up to a 20-year sentence under the plea agreement." (Id. at 205-06.) At that same meeting, movant asked the investigator whether he could receive a lower sentence and the investigator replied that "there were no guarantees and he could get the maximum sentence." (Id. at 206.)
Movant's counsel also testified at the evidentiary hearing. Counsel testified that although it occurred several years ago, he specifically remembered discussing the Sentencing Guidelines with movant as well as how they applied to the facts of his case. Specifically, counsel testified:
Movant's former counsel is an experienced criminal defense attorney with many years of additional experience as a criminal division Assistant United States Attorney. The undersigned found his testimony to be credible.
I spent a lot of time on the guidelines, both myself and with Mr. Wilson discussing the guidelines, going through them with him, you know, how - what the guideline is, how it typically applies, what arguments we might have to try and get around it. And so I spent a lot of time doing that in this particular case, as in all my cases.(ECF No. 251 at 10.) Counsel convincingly testified he certainly did not guarantee movant that he would receive a sentence of four years, or three to five years. (Id. at 11.)
In his testimony counsel described movant's plea as a "hybrid plea" because, while movant pled "open" to two counts of the indictment, there was a written plea agreement which called for the dismissal of the remaining charges brought against him. (Id. at 11-12.) Counsel testified that he explained the situation to movant as follows:
We had a plea offer, and if I recall, the range was 151 to 188. So I presented that to Mr. Wilson. I said, you know, this is not - it's not a terrible deal. It's not a great deal. It's a decent deal, but you're locked in to 151 to 188. The government, you know, will recommend 151, but they're not going to let you argue for less than that. So you have to agree to go to prison for 151 months if you want this deal, and he rejected that and wanted to argue for less.(Id. at 12-13.)
* * *
[H]e did not want to lock himself in to at least 151 months. He wanted the opportunity to get less than that. I said well, to do that, you've got to, you know, have an open sentence. In other words, the government can argue for whatever it wants and we argue for whatever we want and then we just can pick whatever we want to argue. And he and I discussed that many times, you know, should we argue for two to three, three to five, five to seven, whatever the - it was a moving target all the time.
Movant's original counsel also testified that he told movant he would be arguing against some of the upward adjustments that might apply under the sentencing guidelines to his case but that "there was still a chance they may be applied." (Id. at 13.) He testified that he specifically told movant "we are hoping for a lesser sentence, but you could get 20 years" and warned him that "there are no guarantees." (Id. at 13-14.) Indeed, counsel sent movant a letter in which he specifically advised movant as follows:
I wanted to put the government's plea offer in perspective for you. I know you have read the plea agreement. You should know that if all does not go well you could be facing 25-40 years in prison. I believe it is more likely that you will be sentenced to between 5 and 10 years but, as we have discussed, there are no guarantys [sic]. The statutory maximum for each count to which the government wants you to plead is 20 years so you are facing a maximum sentence of 40 years in prison. Judge Karlton does not typically sentence that high in fraud cases but you must understand it is a possibility, though somewhat slim.
I believe it is in you [sic] best interest to enter a plea and make your arguments to the judge at sentencing. If we go to trial and you are convicted, and I think you would be, it will only serve to highlight the evidence against you and anger the judge that you put the
government to the trouble of going to trial. This would not be best for you.(ECF No. 228-4 at 1, Government's Exhibit 11.)
Counsel's letter was sent to movant before the government extended the plea offer to movant which contained the stipulated sentencing guideline range of 151 to 188 months in prison with a government recommendation of a sentence of 151 months. (Id. at 15.) Not surprisingly given its specific warning, at the evidentiary hearing movant testified he did not recall receiving his counsel's letter. (ECF No. 250 at 106.)
Movant's counsel was clear in his testimony that movant refused to enter into a plea agreement which specified a possible prison sentence of 151 to 188 months in prison because he wanted to be able to "argue for less." (ECF No. 251 at 20.) Counsel explained that movant did his own research, compared his situation to other criminal cases that he found as a result, and determined for himself, based on his research and comparisons to other prosecutions, that "151 was too high." Because movant was adamant that he would not accept such a resolution of his case, his counsel set out to work on an agreement with the prosecutor in which "we can reach a plea deal where he pleads guilty and gets three points and bottom of the guidelines, but you know, we're free to argue - we won't set a guideline range in there." (Id. at 20-21.) Counsel explained that "the only plea deal [movant] was interested was one where he had a shot at the five-year range." (Id. at 21.)
This reference is to a three point downward adjustment in the guideline range calculation for acceptance of responsibility under USSG § 3E1.1.
Counsel explained that he tried to convince the prosecutor to drop his insistence on the upward adjustments for "abuse of trust" and "criminal history." (Id. at 15.) Counsel stated that he did not personally believe the crime committed by movant was "sophisticated" but that he understood that the "sophisticated means enhancement" under the sentencing guidelines could still be applied. (Id. at 16.) Counsel testified he "wanted to fight" the upward adjustments and he "thought there was room to fight them." (Id.) Counsel also believed that in general the sentencing judge "didn't like the guidelines;" therefore, counsel believed "that was a good area to target to reduce the guidelines." (Id.) Counsel testified that he explained all of this to movant. (Id.) Counsel recalled that he told movant the sentencing judge was not "wedded to the guidelines" and "if you could make a good argument, he would listen and you had a chance to not have the guidelines - the particular guideline enhancements apply if you could make an argument." (Id. at 17.)
Movant's counsel also testified he definitely did not tell movant he could guarantee a specific sentence based upon counsel's relationship with the sentencing judge. (Id. at 16-17.) Rather, according to movant's counsel he went over the plea agreement with movant and specifically told him "there are no guarantees" and he could "get the max." (Id. at 18.) Counsel agreed with movant that he would ask the trial judge to impose a five year sentence, but that it "might not work" and that movant could receive "the statutory max." (Id. at 22-23.) Counsel testified that he had "many" conversations with movant in which he warned movant that it was a "big risk" to reject the government's plea offer with an agreed upon guideline range of 151-188 months and a government recommendation of a sentence of 151 months in prison. (Id. at 24.) Counsel also credibly testified that he never told movant not to tell the trial judge at the plea colloquy about any "side agreement that might not be contained in this written plea agreement." Rather, counsel was adamant at the evidentiary hearing that there were no "side agreements" and that, "as an officer of the court and former federal prosecutor I would never tell a client to lie to the judge." (Id. at 25.)
On cross-examination, movant's counsel explained his opinion regarding the various potential upward adjustments under the sentencing guidelines and whether they applied in movant's case. First, he explained that he had conversations with his investigator about possible upward adjustments because:
they would make up the presentence report which would produce a number and the judge would look at that number, and you know, we would have to fight against that number. If we could get that down really low and get the plea agreement such that we could argue for a lower sentence, then it gave us a better chance to get that sentence.(Id. at 13.) With regard to the upward adjustment for playing a leadership role in the commission of the offense, counsel denied that he ever told movant in a telephone conversation that this upward adjustment would not apply if Dr. Barham was not indicted. (Id. at 36.) With regard to the upward adjust for abuse of a position of trust, counsel explained that he made the argument to the sentencing judge that this guideline provision did not apply to movant, given that he was not a registered investment advisor, because he had observed that same argument to be successful in the past before a different judge of this court. (Id. at 38.) With regard to the upward adjustment for the use of "sophisticated means" in the commission of a crime, counsel testified that he believed in movant's case that "the facts didn't fit the guideline section" and that "there was an argument there." (Id. at 46.) Counsel explained his strategy with respect to the potential upward adjustments in movant's case as follows:
I presented Mr. Wilson with the option of contesting loss or, you know, trying to focus our efforts on the other guideline enhancements which I thought we had a better chance at winning at. I told him in a jail meeting with Investigator Lucking, L-u-c-k-i-n-g, that this was a tactical decision and I wanted to get his input on it. I told him that I thought we would not win the loss issue and that that - arguing a loss issue would place the victims and all the terrible things that befell them financially squarely in front of Judge Karlton and we would run the risk of, you know, the judge just accepting the PSR and denying our other objections.(Id. at 50-51.)
I thought we had a better chance at objecting to the sentencing enhancements and the criminal history characterization, and he agreed with me and so that's what we did. I gave him the option, we talked about it and he said okay, let's go with that.
The other investigator employed by movant's counsel was a former FBI agent with extensive experience in financial fraud who also testified at the evidentiary hearing.
Movant's counsel further testified that he did not think his objections to the potential upward adjustments were "loser arguments." (Id. at 51.) Although counsel did not necessarily believe he would win these arguments, he made "the best argument I possibly can and I try to win every time." (Id.) Counsel also testified that he frequently specifically discussed with movant the risk of rejecting the government's plea offer which included a stipulated guideline range of 151-188 months imprisonment with a government recommendation of a sentence at the low end of the guidelines and "just arguing the enhancements because we could lose." (Id. at 57.) Counsel was clear that he never told movant that he was going to win his arguments with respect to the potential upward adjustments under the guidelines or that the adjustment for the abuse of a position of trust didn't apply in his case. (Id. at 59-60.) Rather, counsel testified that he told movant many times that:
there are no guarantees in this plea. We are going to argue these enhancements. We might win, we might lose. We're going to argue the 3553 factors, and with Judge Karlton we might get - we might be successful, we might not.(Id. at 61.)
Referring to the factors to be considered in imposing a sentence as set forth in 18 U.S.C. § 3553(a)
According to counsel, movant steadfastly refused to enter any plea under which he would be agreeing to a prison sentence in the 151-188 month range. Counsel explained:
He wanted to get five years or less; seven, five, three. This was - regardless of what I said to him, he was not going to take a 151 to 188.(Id. at 64-65.) Counsel explained that he told movant about the government's plea offer but movant said he didn't want to "do that much time." Accordingly, counsel told movant that in order to have any "shot" at "a lower sentence you're going to have to take the risk of pleading to essentially an open guideline range and arguing to the judge." (Id. at 65-66.) According to counsel, movant agreed to that approach. (Id.) Counsel also explained that the pursuit of this strategy was not based primarily on the applicability of specific provisions of the Sentencing Guidelines, but rather on the presentation of the case to the sentencing judge and trying to convince him to impose a low sentence based "upon the 3553 factors." (Id. at 72.)
* * *
He told me I am not pleading to 151 months. I want less time. I have to have a shot at less time. That was his whole goal, is to have a shot. As he put in Exhibit J or K to his 2255 motion, he wanted a glimmer of hope for five years.
Nonetheless, counsel was adamant that he never promised or guaranteed that movant would receive any particular sentence if he accepted the "open" plea agreement which was the one ultimately accepted. (Id. at 86-89.) Counsel explained:
All I said was we have these arguments. We have a good judge who will listen to us. If you don't want this 151 to 188, then let's - let's reject it and go for a better deal. We can argue for less.(Id. at 91.) Counsel stated that he "thought we had a shot at Judge Karlton saying criminal history is overstated, he was not an organizer or a leader, and he didn't abuse a position of trust." (Id. at 94.) He also testified that he "thought it was in [movant's] best interest to enter a plea and I gave him the offer and he rejected it." (Id. at 97.)
He was never going to accept anything that wasn't five years or less. That - that was his mantra.
On re-direct examination, movant testified that his counsel told him numerous times that "none of these enhancements will apply." (Id. at 106.) Movant denied telling counsel he would "never take an offer of 151 months." (Id. at 107.) Movant also claimed he did not ask his counsel for a sentence of five years, but rather counsel told him he could get such a sentence. (Id.)
3. Post-Hearing Briefing
After the evidentiary hearing was conducted, movant filed a post-hearing brief. (ECF No. 254.) Therein, movant argues that his trial counsel rendered ineffective assistance in making "clear errors in guideline calculations" which affected counsel's advice to movant as to the possible length of his sentence and whether he should accept the government's plea offer(s). (Id. at 3.) Movant also argues that these errors constituted ineffective assistance of counsel under the holdings in United States v. Day, 969 F.2d 39, 43 (3d Cir. 1992), Turner v. Calderon, 281 F.3d 851, 880 (9th Cir. 2002), and other cases involving trial counsel's advice to defendants regarding their possible sentencing exposure. (Id. at 2-3.)
Specifically, movant notes that trial counsel argued in objections to the presentence report/sentencing memorandum that the upward adjustment for having played a "leadership role" in the commission of the fraud, did not apply unless there was proof movant exercised some control over others involved in the commission of the crime. (Id. at 3; see also ECF No. 100 (sentencing memorandum) at 5.) Trial counsel argued that there was no evidence that movant exercised any control or organizational authority over others. (ECF No. 100 at 5.) Movant now contends that this argument was "frivolous" because his counsel knew that movant had admitted in the factual basis for his plea that he recruited an accomplice. (ECF No. 254 at 3.) Movant also now notes that the Ninth Circuit upheld the trial court's imposition of this upward adjustment. (Id. at 4.)
Movant also observes that the sentencing memorandum filed by his former counsel stated that movant "worked alone." (Id.; see also ECF No. 100 at 5.) Movant argues, however, that his counsel knew that Dr. Barham was also involved in the investment scheme. (ECF No. 254 at 4.) Movant notes that in several of the recorded telephone conversations between himself and his former counsel, counsel expressed the belief that Dr. Barham would be indicted. (See Defense Exhibit C-7.) Movant argues, however, that the applicability of the upward adjustment for a playing a leadership role in the offense did not depend on whether Dr. Barham would be indicted, and that his counsel's misunderstanding of this fact was below the level of competence required of criminal defense counsel. (ECF No. 254 at 4.)
Movant also points to his former counsel's sentencing memorandum argument that the upward adjustment for the "abuse of a position of trust" did not apply because movant was not a registered investment advisor. (Id.) Movant asserts that trial counsel suggested this same erroneous argument in one of the jail telephone conversations with movant. (Id.) Movant contends that his counsel's argument on this upward adjustment was "frivolous" because U.S.S.G. § 3B1.3, application note 3, states that this adjustment applies to a defendant even if he simply leads an investor to believe he is a "legitimate investment broker," and movant held himself out to his investors as a legitimate hedge fund manager and investment broker. (Id.) Thus, according to movant, this upward adjustment under the sentencing guidelines was clearly applicable to his case.
Movant further argues that his trial counsel's "third erroneous objection" to the presentence report was his argument that movant had not employed "sophisticated means" in the commission of his crime. (Id. at 5.) Movant notes that the Ninth Circuit upheld the trial court's imposition of this upward adjustment because his criminal conduct involved "fabricating accounting statements that appeared to have been audited by a fictitious accounting firm." United States v. Wilson, No. 11-10261, 2012 WL 2184559 at *3 (9th Cir. June 15, 2012). Movant states that trial counsel's sentencing memorandum "cited no authority to explain why this enhancement did not apply." (ECF No. 254 at 5.) He notes that trial counsel agreed at the evidentiary hearing that even the prosecutor believed this enhancement might not apply to movant. (Id.)
Movant argues that trial counsel's advice to him about the length of his possible sentence was based on counsel's negligence in concluding that movant's criminal history range would be determined to be a category III and not a category IV. (Id.) He also argues that, contrary to his counsel's statements to movant and his family, counsel "clearly knew the guidelines were important" to the sentencing judge, as evidenced by the amount of time counsel spent researching this issue, his hiring of a financial expert to verify the loss amount, and his hiring of a "former probation officer as his investigator." (Id.) Movant also argues that his trial counsel continued to tell him his loss level could be only be $2 million even after he received a report from his expert which verified the loss as over $ 7 million. (Id. at 5-6.)
Movant argues that his trial counsel never told him that "the open plea had only a remote chance of getting the five to seven years [he] was hoping for" and failed to warn him of the "strong probability" that his sentencing guideline calculation would "come out" as the prosecutor had predicted. (Id. at 6.) He argues that if his counsel "actually believed his erroneous opinions, his understanding of the guideline structure was so faulty that it is outside the standards demanded for attorneys practicing in federal court." (Id.)
Movant contends that the evidence presented shows there were two plea offers from the government made in this case. According to movant, the first such offer "required the prosecutor to dismiss the money laundering charge and to recommend the low end of whatever guideline the judge finally determines to be correct." This offer was found on the prosecutor's computer and discussed in jail conversations between movant and his trial counsel. (See Defense Exhibits at C10 and A.) According to movant, the second plea offer from the government was the offer containing a stipulated guideline range of 151 - 188 months with a government recommendation of a sentence of 151 months in prison. (ECF No. 254 at 7; see also Defense Exhibit A-16.) Movant calculates that the sentence he would have received if he had accepted these offers would have been lower than the sentence he ultimately received. (ECF No. 254 at 7.) Movant states that if he had been correctly advised by his counsel he would have accepted one of these two proposed plea offers and would have ended up receiving a far shorter sentence than the one imposed. (Id. at 6.)
Respondent also filed a post-evidentiary hearing brief. (ECF No. 255.) Therein, respondent argues that movant has abandoned all of his claims except his claim that his trial counsel rendered ineffective assistance in failing to accurately advise movant as to the application of the U.S. Sentencing Guidelines to his case. Respondent contends that movant's own testimony and the testimony of his family members at the evidentiary hearing was not credible and that movant's trial counsel did not render ineffective assistance in failing to convey accurate information to movant regarding the application of the Sentencing Guidelines to his case. (Id.) Respondent also argues that movant has failed to establish that he suffered any prejudice as a result of his failure to accept the government's earlier plea offer. (Id. at 8.)
4. Analysis
This court will address all of the claims contained in movant's § 2255 motion, regardless of the limited scope of his arguments advanced in his post-evidentiary hearing brief. As described above, in his § 2255 motion movant claims that he was induced to plead guilty by his trial counsel's: (1) false promises and guarantees that he would receive a sentence in the 3-5 year range; (2) threats to withdraw from the case if he was not paid additional fees; and (3) erroneous legal advice about the Sentencing Guidelines and the applicability of certain guideline provisions. Movant has also claimed that his trial counsel told him not to mention any of the promises made by counsel about the sentence he would receive to the trial judge at the time he entered his plea. At the September 29-20, 2015 evidentiary hearing, movant testified that his trial counsel told him the Sentencing Guidelines were not important to the trial judge, that many of the potential upward adjustments set forth in the guidelines didn't apply in his case in any event, and that counsel could essentially guarantee a sentence of between three and five years if movant entered an "open" plea. Movant further testified that he believed he would receive such a sentence even though he was also informed, through various means and at various times, that he could receive a sentence as high as the statutory maximum.
Movant's trial counsel, on the other hand, testified that when it became clear movant would not enter a plea agreement which contained a stipulated sentencing guideline range offered by the government, he suggested to movant that the only way for him to receive a lower sentence than that likely to be imposed under the government's proposed plea agreement was to instead enter an "open" guilty plea to a number of counts with the more limited government agreement that the remaining counts would be dismissed. Counsel testified that he told movant the trial judge was relatively receptive to arguments regarding the non-applicability of Sentencing Guidelines and that counsel had a good relationship with the prosecutor. Counsel explained to movant that he would argue against the upward adjustments for abuse of position of trust, use of sophisticated means, and playing a leadership role, among others. Counsel legitimately believed there was "room to fight" these upward adjustments to the guideline calculation and that he had an arguable chance of prevailing. Counsel also thought he might be able to "get [the judge] to come down from the [presentence report]," and that while he "might not go to five years, but he might go to seven," or "nine, he might go to ten." (ECF No. 251 at 92-93.) However, counsel also testified that he told movant there was no guarantee he would be successful in making these arguments. Moreover, the record before this court reflects that counsel wrote a letter to movant on December 8, 2008, wherein he stated that, although he believed it was "likely" that movant would be sentenced to between five and 10 years in prison, that there were "no guarantees" and that movant could receive the maximum sentence. (Government's Exhibit 11.) Trial counsel also wrote movant a letter on April 22, 2009, in which he stated that although the presentence report set forth a guideline calculation and recommendation of a prison sentence of almost 20 years, many of the upward adjustments listed in that report "do not apply" and that counsel intended to "argue against all of these and seek a much lower sentence." (Government Exhibit 6.)
A review of the partial transcripts of telephone conversations between the detained movant and his trial counsel reflect the following. In one of those conversations, movant told his trial counsel that he "definitely" did not want to accept the government's plea offer which included a stipulated guideline range of 151 to 188 months in prison. (ECF No. 188 at 112.) Trial counsel responded that "in order to make a run at something like in the five year range, three to seven year range, we're gonna have to go in with an open plea." (Id.) Movant stated at that time he was "willing to do that" and, tellingly, that he was "just putting my faith in God's hands." (Id.)
Counsel also told movant in one such telephone conversation that he expected his arguments would result in movant's sentence being "much lower" than that recommended in the pre-sentence report. (Id. at 123.) Counsel did say that "since we have Judge Karlton, the guidelines are really not all that important" and that "Karlton's gonna decide what he wants to do regardless of what the guidelines say." (Id. at 124.) Counsel also stated that the trial judge was "gonna make his decision based upon his feeling about the case regardless of how the probation officer scores the guidelines." (Id. at 129.) Trial counsel also told movant at one point that he would try to convince the prosecutor to drop certain upward adjustments in order to "get [the trial judge] to come down to the sentence we want." (Id. at 141.) He also stated that "typically you have an abuse of trust enhancement in a securities case, they have, the government would have to prove that you're a registered investment advisor," and that the upward adjustment for "sophisticated move [sic]" was, in counsel's opinion, "total bullshit." (Id. at 125.) However, counsel also specifically and clearly told movant that the sentencing judge could impose the sentence recommended in the pre-sentence report if he wished. (Id.)
In one telephone conversation, trial counsel and movant discussed other criminal cases where the defendants had received varying sentences for participating in Ponzi schemes, and discussed how movant's case compared to those. (Id. at 129-130.) Counsel told movant that, after looking at "comparable cases," he "should be getting three to five years, in that range." (Id. at 131.) He explained that he intended to argue to the trial judge, "look, okay, we have these losses, there were misrepresentations, they were fraud, there was fraud, okay, but it's not a 20 year sentence case." (Id. at 148.) Counsel told movant that "it's all gonna come down to a very simple, you know, how does [the trial judge] feel about the case," and he specifically warned movant that "it's also very dangerous because you just don't know what he's gonna think about it." (Id. at 130.)
Moreover, and perhaps most importantly, movant clearly expressed his understanding that "this is in Karlton's hands." (Id. at 143.) Movant also told his counsel that his review of low sentences imposed in other cases involving fraud convictions gave him "a little glimmer of hope." (Id.)
To the extent that these transcripts accurately record what movant and his trial counsel said to each other over the jail telephone, they reflect that trial counsel thought there was certainly a chance that movant could receive a sentence of three to five years in prison, but that counsel also knew there was certainly a chance that the sentencing judge could impose a much higher sentence. Counsel specifically conveyed these opinions to movant, who decided to pursue the hybrid "open plea" strategy in the hopes that his counsel would be able to persuade the trial judge to impose a three, four, five, seven or even ten year sentence. However, it is also clear that trial counsel told movant, and movant understood, that the sentencing judge might reject counsel's arguments. There is absolutely nothing in these telephone transcripts reflecting a guarantee by trial counsel that movant would receive a certain sentence or that movant understood that a sentence in the five year range was being guaranteed. Nor does the undersigned find at all credible movant's testimony at the evidentiary hearing that his counsel guaranteed him a specific sentence or that movant believed counsel's statements about the possible length of his sentence were the equivalent of a guarantee.
Perhaps movant made this election based on his own determination that 151 months in prison was simply unbearable to agree to and that he wished to preserve some glimmer of hope that he could do better or perhaps it was influenced by his perception of his counsel's optimism that he had a legitimate chance to convince the sentencing judge to reject upward adjustments in the guideline calculation or to sentence below the guideline range as determined or both. Why movant elected to proceed as he did is not critical. The question is whether he was adequately advised by his counsel of his options as well as of the possible ramifications of the choices he was required to make under the circumstances.
As trial counsel explained at the evidentiary hearing, when it became clear that movant would not accept the government's plea offer involving a stipulated sentencing guideline range, counsel's strategy turned to attempting to persuade the sentencing judge to reject upward adjustments in calculating the guideline range, or to disregard and depart from the Sentencing Guidelines and impose a modest sentence based on the factors set forth in 18 U.S.C. § 3553, or both. Counsel believed that he had a chance at convincing the judge to impose a lower sentence than the guidelines suggested. This belief was based on counsel's previous experience as a prosecutor and defense lawyer, a comparison of movant's case with the cases of other defendants who had been convicted of participating in Ponzi schemes, his knowledge of the sentencing practices of the trial judge, his analysis of the applicability of the Sentencing Guidelines and the § 3553 factors to the facts of movant's case, and his view as to the strength of the government's case.
Counsel also believed he had reasonable arguments that the upward adjustments based on movant's role in the offense, employment of sophisticated means, and abuse of position of trust did not apply to movant, and that movant's criminal history score was overstated. Counsel advanced those arguments in his sentencing memorandum, contending that: (1) the adjustment for movant's "role in the offense" did not apply because (a) there was insufficient evidence that movant exercised control or organizational authority over others, (b) Dr. Barham's only involvement was to "promote the fund part time while he worked full time as a chiropractor," and (c) movant did not "organize, lead, manage or supervise anyone;" (2) the adjustment for "abuse of trust" did not apply because (a) movant "did not hold a position of public or private trust," (b) movant was not a registered investment advisor and did not represent himself as one, (c) the investments were "arm's length transactions," and(d) movant "did not have a close personal relationship with his investors;" (3) the adjustment for use of "sophisticated means" in the commission of his crime did not apply because (a) the crime was not complex or intricate "either as to its execution or concealment," (b) movant's investment scheme was similar to all fraud schemes, and (c) movant did not create a phony accounting firm; and (4) movant's criminal history score was "overstated and greatly exaggerated by the three alcohol-related convictions which were caused by his drinking problem;" therefore, movant was more accurately placed in Criminal History Category III. (ECF No. 100 at 5-7.)
Although counsel did not prevail on any of these arguments, the undersigned finds that none of them were frivolous. In any event, trial counsel knew that the Sentencing Guidelines were advisory. Thus, even if the upward adjustments were applicable to movant, as movant now argues, the sentencing judge could have exercised his discretion to impose a lower sentence. Indeed, it was counsel's strategy to attempt to achieve this result on behalf of movant, who sought to preserve a "glimmer of hope". Given this strategy, whether or not any particular upward adjustment applied to movant's case was not dispositive of the sentence movant could or would receive in the end.
The undersigned notes that movant's appellate counsel also chose to challenge these same upward adjustments in the sentencing guideline calculation, apparently believing the arguments against their imposition constituted valid, arguable claims. (ECF No. 149.)
It is certainly true that there is a wide gap between the sentence trial counsel at times predicted and ultimately argued for on movant's behalf, and the sentence movant ultimately received. However, this fact, standing alone, does not render trial counsel's performance constitutionally deficient. As discussed above, under the governing legal standards counsel is not required to accurately predict what the court might find, to give an accurate prediction of the outcome of the case, or to have "a crystal ball." Turner, 281 F.3d at 881, Iaea, 800 F.2d at 865. Here, after considering all relevant factors, including movant's clearly established refusal to accept any plea offer that included a stipulated guideline range of 151-188 months, trial counsel concluded that it was in movant's best interest to enter a hybrid "open" plea of guilty to two counts of the indictment in exchange for dismissal of the remaining counts and argue for the kind of sentence movant sought. Under the circumstances of this case, counsel's actions in this regard were not outside the range of reasonable professional assistance, and it did not fall below the level of competence required of defense attorneys.
The record fairly establishes that it was unclear precisely what sort of sentence movant believed was appropriate in his case or what government sentencing recommendation he would have agreed to as part of a plea agreement. During his evidentiary hearing testimony, movant's former counsel described movant as difficult, having strong personal opinions about his case and as presenting a moving target in terms of the sentence he would have accepted. Even in these collateral proceedings movant has been inconsistent regarding the "promise" or "guarantee" his counsel allegedly made to him, with the number varying between three, four, five, seven or less than ten years in prison. We do know that movant rejected a plea agreement that included a government recommendation of a 151 month prison sentence.
It is true that trial counsel minimized the applicability of the potential upward adjustments in his conversations with movant regarding the application of the sentencing guidelines. However, these statements were also consistent with counsel's strategy to urge the sentencing judge to disregard the guidelines and instead impose a lesser sentence based on the considerations set forth in 18 U.S.C. § 3553. As explained above, the undersigned finds that counsel's arguments with respect to those upward adjustments and movant's criminal history score were not at all frivolous. The sentencing judge could have accepted counsel's arguments regarding the potential upward adjustments or relied on the § 3553 factors, or a combination of both, and imposed a much lower sentence. He simply decided that it was no appropriate to do so. The undersigned does not find that trial counsel's failure to predict how the sentencing judge would rule constitutes deficient performance given the evidence in this case.
Moreover, the undersigned concludes that trial counsel's advice to movant was not "so incorrect and so insufficient" that it undermined movant's ability to make an intelligent decision about whether to accept the government's plea offer which included a stipulated guideline range of 151-188 months with a government recommendation of a sentence at the low end of that range. Turner, 281 F.3d at 880. Movant was advised by his counsel and others from the beginning of this case, and throughout the proceedings, that there was no guarantee with respect to the sentence he would receive and that he could be sentenced to the statutory maximum. As explained above, this consistent warning was reinforced for movant in several ways. First, the plea agreement, which movant signed, specifically stated on its face that "the defendant understands that neither the prosecutor, defense counsel, nor the Court can make a binding prediction or promise regarding the sentence he will receive." (ECF No. 63 (plea agreement) at 2.) At his change of plea hearing, movant was specifically advised by the trial judge that the maximum prison sentence he could receive was twenty-three years. (ECF No. 109 at 9.) Moreover, movant was advised that the U.S. Probation Office would provide the trial judge a presentence report which would include an assessment of the applicable Sentencing Guidelines, and that the sentence the judge would impose could be "higher, lower, or at the same level as the guidelines." (Id. at 10.) At the change of plea hearing, movant also affirmatively stated under oath that no threats had been made against him or any member of his family in order to induce him to plead guilty and that no promises were made to him that were not included in the written plea agreement. (Id. at 12.) Movant also admitted at that time that the factual basis for his guilty plea was true. (Id. at 14.) These statements under oath by movant carry great weight. See Blackledge v. Allison, 431 U.S. 63 (1977) (a defendant's representations at the time of his guilty plea concerning the voluntariness of the plea "constitute a formidable barrier in any subsequent collateral proceedings" and "carry a strong presumption of verity"); Marshall v. Lonberger, 459 U.S. 422, 437 (1983) (a guilty plea is presumed valid in habeas proceeding when the pleading defendant was represented by counsel).
It is clear to the undersigned after hearing testimony and receiving evidence at the evidentiary hearing that movant decided, after conducting his own research and being fully informed of the risks involved, to reject the government's plea offer and enter a hybrid "open" guilty plea because he wanted to pursue the chance that he might be able to obtain a sentence of less than 151 years in prison. The undersigned does not find that movant's decision to reject the government's earlier plea offer was coerced by his counsel's request for additional attorney fees in light of the time expended on movant's case, counsel's statements to him about the Sentencing Guidelines provisions or his criminal history score, counsel's estimate of the sentence movant would likely receive, or any other statements made or advice given by counsel. Further, the undersigned does not find at all credible movant's assertion that his trial counsel instructed him not to tell the trial judge about the guaranteed sentence counsel had promised or movant's testimony that he misunderstood what the trial judge was asking when he inquired while taking the plea whether any promises had been made to movant in order to induce him to plead guilty. In sum, movant has failed to demonstrate that his trial counsel's performance was deficient or that his guilty plea was coerced or involuntary. Accordingly, movant is not entitled to relief with respect to this claim for relief under § 2255.
In his post-hearing brief, claims for the first time that his counsel rendered ineffective assistance in misadvising him to reject a government plea offer allegedly extended prior to the offer containing the stipulated guideline range of 151-188 months in prison. (ECF No. 254 at 6.) Movant's exhibits at the evidentiary hearing included six proposed plea agreements but only proposal No. 5, the agreement that was ultimately signed, was admitted into evidence. (ECF No. 250 at 23-24.) The other draft plea agreements were admitted for the limited purpose of showing that they were in the prosecutor's file, not that they were ever offers extended to movant. (Id. at 24-25.) Movant testified that his counsel showed him an email from the prosecutor dated January 30, 2009 (Defense Exhibit A-15) discussing the prosecutor's view on the applicability of various sentencing guideline provisions and the calculation of movant's base offense level. (Id. at 72.) Movant testified that he rejected that "offer" because his trial counsel told him "the only way you can get three to five years is go open" and that "these enhancements don't apply to your case." (Id. at 81.) Movant also testified that during a meeting in November, 2008, he and counsel had general discussions about "a plea and they wanted me to plead to two counts of wire fraud and one count of tax evasion." (Id. at 73-74.) Movant understood that the prosecutor's January 30, 2009 email, and his counsel's statements during the earlier jail visit, constituted two separate plea "offers." (Id. at 75.) However, his counsel told movant that these exchanges were "just the beginning, we're just at the beginning stages and he alluded that it's going to morph, we're going to keep working at it and get the deal." (Id.) Movant testified he never told his counsel "to reject the first deal" and he was never told when it expired. (Id. at 76.) Movant also testified that he never rejected the first government plea offer (discussed during the meeting between counsel and movant at the jail) because his counsel "never really explained it to me." (Id. at 139.) This evidentiary hearing evidence is insufficient to establish the parameters of any alleged earlier proposed government plea agreement, the substance of counsel's advice to movant about whether to accept any of these alleged "offers," or even whether, and if so why, movant decided to reject them. Moreover, there is no evidence before the court that movant was willing to reject all plea offers and proceed to trial in this case. In short, movant has failed to meet his burden to substantiate any such claim and relief should therefore be denied. --------
B. Trial Counsel's Alleged Failure to Meaningfully Challenge the Loss Amount, the Number of Actual Victims and an Invalid Restitution Order
In his second ground for relief, movant claims that his trial counsel rendered ineffective assistance in not "meaningfully challenging the loss amount, the victim enhancement, and an invalid restitution order." (ECF No. 188 at 3.) Movant claims that his sentence was "improperly scored" because of his counsel's failure to adequately argue the applicability of these factors to his sentence. The court will address each of these claims in turn below.
1. Loss Amount
Movant claims that his sentence would have been lower if his trial counsel had correctly "challenge[d] the loss calculations in any meaningful way." (Id. at 35.) Movant argues that his investment fund was not a typical Ponzi scheme and that his counsel could have challenged the loss amount urged by the prosecutor and adopted in the presentence report on this basis. (Id. at 25-35.) Movant describes several methods by which the loss amount caused by his crime could have been calculated at a lower figure. (Id. at 35-40.)
The record reflects that, in his sentencing memorandum, movant's counsel challenged the loss amount as determined in the presentence report. (ECF No. 100 at 6.) Counsel also argued, as movant does in the instant motion, that movant's investment fund "was not a Ponzi scheme at the outset," and was not set up in order to steal the funds of his investors. (Id. at 1-2.) Counsel made similar arguments on movant's behalf at his sentencing hearing. (ECF No. 110 at 6-8.) These arguments were part of counsel's overall strategy of mounting a broad challenge to the length of movant's sentence in light of the factors set forth in 18 U.S.C. § 3553.
Further, as noted by respondent, counsel specifically discussed this overall defense strategy with movant. In one of the telephone calls between movant and his trial counsel, the following exchange took place:
[Movant]: . . . I'm trying to think if I'm a judge or, and I haven't never been through this as much as you've dealt with all this kind of stuff so correct me if I'm wrong, but I just, I just get an uneasy feeling if I heard this guy never made money from day one, if it was a scam from the first time he took people's money. And that is just not true.
[Counsel]: Well no, but we argue that, we argue that this was not a scam from day one. You took people's money in, you legitimately invested it, and then, and then, and then when the market went down, you know, that's when you had problems.
[Movant]: Okay.
[Counsel]: That's how we're selling this to the judge. We're not gonna try and get involved in numbers.
[Movant]: Right.
[Counsel]: We were up this much or that much. We're gonna say look, what separates this from all other Ponzi schemes is the fact
that this was a legitimate investment fund. It started out that way, in the end it ended up in fraudulent activity. Or somewhere along the continuum.(ECF No. 188 at 153.)
[Movant]: Okay.
[Counsel]: It ended up, it did not start out that way. Now in response to that, the government's gonna say wait a minute, you know, the statements were fraudulent from day one.
[Movant]: Right, but even . . .
[Counsel]: So we have to be very careful how we, how we address that with the court.
In addition, as set forth above, at the evidentiary hearing movant's trial counsel testified as follows:
I presented Mr. Wilson with the option of contesting loss or, you know, trying to focus our efforts on the other guideline enhancements which I thought we had a better chance at winning at. I told him in a jail meeting with Investigator Lucking, L-u-c-k-i-n-g, that this was a tactical decision and I wanted to get his input on it. I told him that I thought we would not win the loss issue and that that - arguing a loss issue would place the victims and all the terrible things that befell them financially squarely in front of Judge Karlton and we would run the risk of, you know, the judge just accepting the PSR and denying our other objections.(ECF No. 251 at 50-51.)
I thought we had a better chance at objecting to the sentencing enhancements and the criminal history characterization, and he agreed with me and so that's what we did. I gave him the option, we talked about it and he said okay, let's go with that.
Movant's trial Counsel also testified that:
we were better off not arguing the loss numbers because we couldn't prove that the loss was less than the government's calculations and so therefore, as a tactical decision, we were better off arguing the guideline - other guideline enhancements because to argue the loss to the Court would have put into focus the victims and their problems, and that would - I thought that was a dangerous place to be, rather than accepting the responsibility for the loss and then argue where I thought we had the best chance to win, which was the enhancements.(Id. at 33-34.)
The undersigned concludes that movant's trial counsel's approach to the loss amount in the context of his overall defense strategy was not deficient. Under the circumstances of this case, it did not constitute ineffective assistance for trial counsel to proceed with the strategy he proposed to movant and was adopted by him with respect to the treatment of the loss amount calculation at sentencing.
Movant has also failed to demonstrate prejudice with respect to this aspect of his ineffective assistance of counsel claim. There is no evidence that the result of movant's proceedings would have been different if his counsel had made the arguments now suggested by movant with respect to challenging the loss amount caused by his fraud. Movant has failed to show a "reasonable probability" that any argument for a lower loss amount determination would have prevailed. Strickland, 466 U.S. at 694. Both the government and the probation officer in his presentence report calculated the loss caused by movant's crimes at $14.6 million and the government was prepared to support that figure. Nor does the undersigned find that movant was induced to plead guilty based on his counsel's statements or strategy regarding the applicable loss amount. Accordingly, movant is not entitled to relief on this aspect of his claim.
2. Determination of the Number of Victims
Movant also claims that his trial counsel rendered ineffective assistance in failing to specifically challenge the number of victims of his investment fund. (ECF No. 188 at 38-40.) He argues, essentially, that the presentence report erroneously included two investors in the total number of his fraud victims, and that the loss attributed to two other identified victims should have been decreased by the amount that they withdrew from their accounts with movant. (Id.) Movant argues that if these modifications to the loss calculation had been corrected in the presentence report and accepted by the sentencing judge, his sentence would have been reduced by "10.29 Years/19.6 Years." (Id. at 40.)
Movant has failed to demonstrate either deficient performance or prejudice with respect to this aspect of his ineffective assistance of counsel claim. As explained above, trial counsel's strategy was not to challenge the loss amount calculation where he perceived movant to be most vulnerable but to contest other upward adjustments to the sentencing guideline calculation while arguing for an even lower sentence based on the sentencing factors set forth in 18 U.S.C. § 3553(a). Declining to make an argument challenging the loss calculation that would have been inconsistent with that sound defense strategy does not constitute deficient performance. There is also absolutely no evidence before the court even suggesting that movant would actually have received a lower sentence if his counsel had challenged the number of his victims or the amount of loss caused by his crimes. Similarly, there is no evidence suggesting that movant entered into the plea agreement he accepted because of any statements by his trial counsel or strategies adopted by counsel with respect to whether and how to challenge the determination of the number of movant's victims or the loss amount attributable to his crimes. Accordingly, movant is not entitled to relief on this aspect of his ineffective assistance of counsel claim.
3. Invalid Restitution Order
In his final ground for relief, movant claims that the restitution order imposed by the sentencing judge was invalid. (Id. at 40-41.) Movant contends that the restitution amount imposed in the judgment was not based on the amount of loss actually caused by his criminal conduct. (Id.)
Movant's failure to raise this non-constitutional argument on appeal precludes its consideration in this habeas petition. See Stone v. Powell, 428 U.S. 465, n.10 (1976) ("nonconstitutional claims that could have been raised on appeal, but were not, may not be asserted in collateral proceedings"). Accordingly, relief as to this claim should also be denied.
IV. Conclusion
Accordingly, IT IS HEREBY RECOMMENDED that:
1. Movant's November 25, 2013 motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. §2255 be denied; and
2. The Clerk of Court be directed to close the companion civil case No. 2:13-cv-2466 TLN DAD P.
These findings and recommendations are submitted to the United States District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(l). Within fourteen days after being served with these findings and recommendations, any party may file written objections with the court and serve a copy on all parties. Such a document should be captioned "Objections to Magistrate Judge's Findings and Recommendations." Any reply to the objections shall be served and filed within fourteen days after service of the objections. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991). In his objections petitioner may address whether a certificate of appealability should issue in the event he files an appeal of the judgment in this case. See Rule 11, Federal Rules Governing Section 2254 Cases (the district court must issue or deny a certificate of appealability when it enters a final order adverse to the applicant). Dated: October 30, 2015
/s/_________
DALE A. DROZD
UNITED STATES MAGISTRATE JUDGE
DAD:8:
Wilson114.2255