DEBORAH M. FINE, Magistrate Judge.
This matter is on referral to the undersigned pursuant to Rules 72.1 and 72.2 of the Local Rules of Civil Procedure for further proceedings and a report and recommendation.
On November 22, 2016, Movant Guy Andrew Williams, who is represented by retained counsel, filed a Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence and an Affidavit in Support of the Motion. (Docs. 1, 2.) On January 13, 2017, the Court issued an Order requiring both parties to show cause why this action should not be stayed pending resolution of Movant's appeal in Williams v. United States, No. 16-10423 (9th Cir.). (Doc. 4.) On January 20, 2017, the parties filed a Joint Response to Order to Show Cause, in which they agreed with the Court's determination that this action should be stayed pending the resolution of Movant's appeal. (Doc. 5.) In an Order on May 17, 2017, the Court stayed this action accordingly. (Doc. 6.) The Court also directed Respondent to provide periodic status updates and notify the Court once the Ninth Circuit Court had issued a ruling. (Id.) On June 1, 2018, the Government filed a Status Report indicating that Movant's appeal was rejected and the mandate had issued. (Doc. 14.) The Court lifted the stay and set a briefing schedule. (Doc. 15.) The United States filed a timely response to Movant's § 2255 motion. (Doc. 16.) Movant requested an extension for filing a reply, which was granted. (Docs. 17, 18.) The time for filing a reply has passed, and no reply was filed. The matter is ripe for decision.
This case was about an investment fraud scheme. Investment fund Mathon Fund I was a hard money lending fund that the Government sought to prove was misrepresented by Movant and was operated as a Ponzi scheme, that is, paying older investors from the funds of new investors. Misrepresentations included the track record of the loans, the use of investor money, undisclosed self-dealing with the investment monies, and credentials of the investment team, particularly a disbarred lawyer being identified as general counsel. Another fund, Mathon Fund, was later established by Movant and Duane Slade, with Movant's father Brent Williams serving as the chief financial officer. Mathon Fund had the same business model as Mathon Fund I, but this time with additional misrepresentations pertaining to promises of a cash reserve, insurance, and annual audits. (Docs. 1403-1419 in CR-09-1492-02-PHX-ROS.)
The first jury trial resulted in a hung jury, a mistrial, due to "one wildcat juror," as described by the trial judge after post-trial juror interviews. (Doc. 1372 at 2 in CR-09-1492-02-PHX-ROS.)
Movant was retried. During the retrial, which resulted in the challenged convictions, the Government called twenty-two witnesses, sixteen of which were victim investors, four of which were former Mathon Fund and/or Mathon Fund I ("Mathon") employees, and two of which were law enforcement witnesses. The Government did not call any expert witnesses. (Docs. 1403-1419 in CR-09-1492-02-PHX-ROS.)
The four Mathon insider witnesses called by the Government were Tim Abraham, Scott Johnson, Russell Sewell, and Shelley DiGiacomo. All four testified that they had personally participated in, or become aware of, fraudulent conduct. Abraham admitted that he "knowingly participated" in a "fraudulent scheme" by working at Mathon. See RT 6/18 at 483-84 (Doc. 1404 at 84-85 in CR-09-1492-02-PHX-ROS.). Johnson explained that, almost immediately after joining Mathon and learning the true nature of its portfolio, he realized Movant and Slade had lied to him and other investors, developed "grave" concerns about Mathon's viability, and became "very uncomfortable" receiving payments. See RT 6/20 at 993-96 (Doc. 1406 at 41-44 in CR-09-1492-02-PHX-ROS.). Sewell admitted he pleaded guilty to committing crimes arising from his work at Mathon and had "lied to investors." See RT 6/21 at 1203 (Doc. 1416 at 93 in CR-09-1492-02-PHX-ROS.). Within weeks of being hired, DiGiacomo concluded that Mathon was making "misleading" representations that were "clear" violations of "the securities laws." See RT 6/24 at 1595-99 (Doc. 1417 at 67-71 in CR-09-1492-02-PHX-ROS.).
One of the two law enforcement officers called by the Government to testify was IRS-CI Special Agent Mike Fleischmann, through whom the Government introduced various documents and emails. Fleischman also summarized Brent's admissions during a post-arrest interview. See RT 6/19 at 822-46, 6/24 at 1645-82 (Docs. 1414 at 108-132, 1417 at 117-154 in CR-09-1492-02-PHX-ROS.). FBI forensic analyst Jason Saitta was the other law enforcement officer called by the Government to testify. Through Saitta, the Government admitted Rule 1006 summary charts that summarized the performance of Mathon's largest loans, the compensation of Mathon's insiders, and the many instances that money from new investors was used to repay old investors. See RT 6/25 at 1908-29, RT 6/26 at 1938-2007 (Docs. 1409 at 224-245, 1418 at 8-77 in CR-09-1492-02-PHX-ROS.).
Movant called three trial witnesses in his defense. He called two former Mathon employees and an auditor who had provided the only Mathon audit. Movant did not testify. (Docs. 1403-1419 in CR-09-1492-02-PHX-ROS.)
At the conclusion of the retrial, the jury convicted Movant of one count of Conspiracy to Commit Mail Fraud and/or Wire Fraud, two counts of Mail Fraud, thirteen counts of Wire Fraud, and twenty-two counts of Transactional Money Laundering. (Docs. 1451, 1552 in CR-09-1492-02-PHX-ROS.) On July 11, 2013, through counsel, Movant filed a Motion for New Trial. (Doc. 1352.) The Motion for New Trial was based on vision problems of Movant's trial counsel. (Id.) The Motion was denied on July 19, 2013. (Doc. 1360.) New counsel was substituted for sentencing. (Doc. 1372.) On September 30, 2013, the Court sentenced Movant to two concurrent terms of imprisonment, the longer of which was 150 months, to be followed by three years of supervised release. (Doc. 1451.) On December 30, 2013, the Court ordered Movant to pay restitution "in the amount of $32,965,166.43, joint and several with his co-defendants." (Doc. 1547.)
On January 9, 2014, the Court entered an Amended Judgment incorporating the restitution Order. (Doc. 1552.) Movant sought review of the Amended Judgment, and on August 24, 2015, his conviction was affirmed by the Ninth Circuit Court of Appeals. (Doc. 47 in No. 13-10523 (9th Cir.).) Movant subsequently filed a second Motion for New Trial in this Court. (Doc. 1616 in CR-09-1492-02-PHX-ROS.) The motion argued that without an enforcement action from the Securities and Exchange Commission, the United States Attorney's Office prosecution of Movant was without authority or jurisdiction. (Id.) On August 9, 2016, the Court denied Movant's second Motion for New Trial. (Doc. 1623.) The Court of Appeals affirmed the August 9, 2016, ruling in a January 19, 2018, memorandum decision. (Doc. 34 in No. 16-10423 (9th Cir.).) On May 31, 2018, the Court of Appeals issued its mandate. (Doc. 40 in No. 16-10423 (9th Cir.).)
In his § 2255 Motion, Movant alleges that his trial counsel was ineffective because he failed to (1) advise Movant to testify in his own defense
A federal prisoner making a collateral attack against the validity of their 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 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, the prisoner must demonstrate the existence of an error of constitutional magnitude that 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 when 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).
Movant advances several claims alleging ineffective assistance of trial counsel. Pursuant to Strickland v. Washington, 466 U.S. 668, 687 (1984), a petitioner arguing ineffective assistance of counsel must establish that counsel's performance was (i) objectively deficient and (ii) prejudiced the petitioner. "Surmounting Strickland's high bar is never an easy task." Clark v. Arnold, 769 F.3d 711, 725 (9th Cir. 2014). The court need not consider both factors if the court determines that a defendant has failed to meet one factor. Strickland, 466 U.S. at 697 ("If it is easier to dispose of an ineffectiveness claim on the ground of lack of sufficient prejudice, which we expect will often be so, that course should be followed."); LaGrand v. Stewart, 133 F.3d 1253, 1270 (9th Cir. 1998) (a court need not look at both deficiency and prejudice if the habeas petitioner cannot establish one or the other).
To establish deficiency, the defendant must demonstrate that the counsel's representation fell below an objective standard of reasonableness. Strickland, 466 U.S. at 687-88. To establish prejudice, a defendant must show "that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceedings would have been different." Id. at 694. A "reasonable probability" is one "sufficient to undermine confidence in the outcome." Id. "Unless a defendant makes both showings, it cannot be said that the conviction ... resulted from a breakdown in the adversary process that renders the result unreliable." Id. at 687.
A court's "[r]eview of counsel's performance is highly deferential and there is a strong presumption that counsel's conduct fell within the wide range of reasonable representation." United States v. Ferreira-Alameda, 815 F.2d 1251, 1253 (9th Cir. 1986) (citation omitted). Moreover, courts are reminded to make "every effort ... to eliminate the distorting effects of hindsight, to reconstruct the circumstances of counsel's challenged conduct, and to evaluate the conduct from counsel's perspective at the time." Strickland, 466 U.S. at 689. It is "all too tempting" to "second guess counsel's assistance after conviction or adverse sentence." Id. "The question is whether an attorney's representation amounted to incompetence under `prevailing professional norms,' not whether it deviated from best practices or most common custom." Harrington v. Richter, 562 U.S. 86, 105 (2011) (quoting Strickland, 466 U.S. at 690).
To establish prejudice, a petitioner must show 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. A "reasonable probability" is one "sufficient to undermine confidence in the outcome." Id.
"This does not require a showing that counsel's actions `more likely than not altered the outcome,' but the difference between Strickland's prejudice standard and a more-probable-than-not standard is slight and matters `only in the rarest case.'" Richter, 562 U.S. at 112 (quoting Strickland, 466 U.S. at 693). "The likelihood of a different result must be substantial, not just conceivable." Id. Moreover, it is clear that the failure to take futile action can never be deficient performance. See Rupe v. Wood, 93 F.3d 1434, 1445 (9th Cir. 1996); Sexton v. Cozner, 679 F.3d 1150, 1157 (9th Cir. 2012). "The failure to raise a meritless legal argument does not constitute ineffective assistance of counsel." Baumann v. United States, 692 F.2d 565, 572 (9th Cir. 1982).
In evaluating prejudice, the court must "compare the evidence that actually was presented to the jury with the evidence that might have been presented had counsel acted differently," Bonin v. Calderon, 59 F.3d 815, 834 (9th Cir. 1995), and evaluate whether the difference between what was presented and what could have been presented is sufficient to "undermine confidence in the outcome" of the proceeding, Strickland, 466 U.S. at 694. Prejudice is established if "there is a reasonable probability that at least one juror would have struck a different balance" between guilty and not guilty. Wiggins v. Smith, 539 U.S. 510, 537 (2003).
Each of Movant's ineffective assistance of counsel claims will be taken in turn, starting with the first which Movant states was the "most important" of trial counsel's errors. (Doc. 1 at 2.)
Movant did not testify at trial in his own defense and attributes such to his trial counsel, claiming that his trial counsel was ineffective. (Doc. 1 at 2-3, 9.) Movant argues that his trial attorney prevented him from testifying in his own defense at trial. (Doc. 1 at 9.) Movant clarifies in his motion that his trial attorney didn't literally preclude him from testifying; instead, Movant faults his attorney for not recommending that Movant testify. (Doc. 1 at 2, 9.) Movant's affidavit supports only the argument that he was advised not to testify in his own defense. (Doc. 2 at 1-2.)
To be clear, the record belies an assertion that Movant was prevented from testifying in his own defense at trial. Movant
See RT 6/27 at 2259-60 (Doc. 1410 in CR-09-1492-02-PHX-ROS) (emphases added).
Regarding Movant's assertion that his trial counsel wrongly advised him about whether to testify, "[a] tactical decision by counsel with which the defendant disagrees cannot form the basis of a claim of ineffective assistance of counsel." Guam v. Santos, 741 F.2d 1167, 1169 (9th Cir. 1984). Courts have repeatedly held that when a criminal defendant is aware of his right to testify, chooses to remain silent, and is then convicted, he can't later attack his conviction—as Movant wishes to do here—by complaining about his attorney's advice concerning whether to testify. "[T]he advice provided by a criminal defense lawyer on whether his client should testify is `a paradigm of the type of tactical decision that cannot be challenged as evidence of ineffective assistance.'" Carter v. Lee, 283 F.3d 240, 249 (4th Cir. 2002) (citation omitted). See also United States v. Edwards, 897 F.2d 445, 446-47 (9th Cir. 1990) ("[D]efendant's attorney made a tactical decision not to have his client testify. Neither the prosecution nor the court was given any reason to think the defendant desired to testify. In such circumstances, `[t]o hold that a defendant may abide by his lawyer's advice and not take the stand and then invalidate the trial because he so acted is not fair to the government.'" (citation omitted)).
Further, there is no prejudice to Movant. Among other things, Movant's affidavit of the testimony he would have provided characterizes the loan defaults not as "losses" for the hard money lending funds, and would have asserted that the fund principals were entitled to pay back fund investors with capital not derived from loan repayments. (Doc. 1 at 10-15.) Given the evidence presented at trial, including sixteen victim witnesses and four Mathon insider witnesses admitting wrongdoing by the funds, Movant has not shown that his proffered justifications would have been persuasive to the jury or held up under cross-examination. See generally Carpenter v. United States, 478 F.Supp.2d 205, 218-19 (D.R.I. 2007) ("The evidence of guilt presented at trial by the prosecution was overwhelming. If Petitioner had testified to rebut this evidence, he would have been thoroughly impeached.... Therefore, the Court concludes that any error that might have occurred when Petitioner was told by his counsel not to testify was harmless."); United States v. Rantz, 862 F.2d 808, 811 (10th Cir. 1988) ("Because of the amount of evidence against the petitioner, this court cannot conclude that there is a reasonable probability that the result of the case would have been different had counsel permitted petitioner to testify.... On the contrary, it is unlikely that any available evidence that could have been presented would have rebutted the evidence against the petitioner.").
Movant alleges his trial counsel was ineffective because he failed to engage an expert witness to rebut the government's accounting expert. (Doc. 1 at 2-3.)
In order to show ineffective assistance of counsel based on trial counsel's failure to call a witness, petitioner must show: (1) that the particular witness was willing to testify (see United States v. Harden, 846 F.2d 1229, 1231-32 (9th Cir. 1988); United States v. Murray, 751 F.2d 1528, 1535 (9th Cir. 1985)); (2) what the testimony of the witness would have been (see United States v. Berry, 814 F.2d 1406, 1409 (9th Cir. 1987)); and (3) that the testimony of the witness would have been sufficient to create a reasonable doubt as to guilt (see Hendricks v. Calderon, 70 F.3d 1032, 1042 (9th Cir. 1995)) ("Absent an account of what beneficial evidence investigation into any of these issues would have turned up, [petitioner] cannot meet the prejudice prong of the Strickland test."); Tinsley v. Borg, 895 F.2d 520, 532 (9th Cir. 1990).
Movant assigns error of the magnitude of ineffective assistance of counsel to his trial counsel for not engaging an expert accounting witness for trial, yet Movant has not provided the Court with the requisite information needed to sustain a claim based on failure to call an expert witness. Movant has not identified a specific willing expert witness who would have been available to testify at trial, nor has movant identified the particular content of the testimony, let alone show how the testimony of the witness would have been sufficient to create a reasonable doubt. In the absence of the Movant presenting a potential expert witness, the Court must presume that no expert would have testified on Movant's behalf.
In fact, the trial court record reflects that Movant's trial attorney made efforts to locate potential defense experts before trial. In one pretrial filing, Movant's trial attorney provided notice that he might call one or more defense experts, including one with accounting expertise. See Doc. 554 at 1-5 in CR-09-1492-02-PHX-ROS.
In Wildman v. Johnson, 261 F.3d 832, 839 (9th Cir. 2001), the Ninth Circuit rejected a similar claim of ineffective assistance based on counsel's failure to obtain an expert. The court explained that:
Wildman, 261 F.3d at 839.
Similar to Wildman, Movant's claim of ineffective assistance based on counsel's failure to retain a forensic accountant fails because Movant has neither identified a specific expert who would have testified at trial, nor described the testimony that the unidentified forensic accountant was willing to give and would have given at trial. Evans v. Cockrell, 285 F.3d 370, 377 (5th Cir. 2002) ("[C]omplaints of uncalled witnesses are not favored in federal habeas corpus review because allegations of what the witness would have testified are largely speculative.... In addition, for [petitioner] to demonstrate the requisite Strickland prejudice, [he] must show not only that [the] testimony would have been favorable, but also that the witness would have testified at trial.") (citations omitted); see also Grisby v. Blodgett, 130 F.3d 365, 373 (9th Cir. 1997) ("Speculation about what an expert could have said is not enough to establish prejudice [under Strickland]"). Thus, the ineffective assistance of counsel claim based on lack of a defense expert fails.
Further, the United States points out that the prosecution witness identified by Movant as requiring defense expert rebuttal (Doc. 1 at 26) did not even testify in expert capacity:
(Doc. 16 at 27.) This is another basis on which Movant's claim fails.
Movant alleges that his trial counsel was ineffective because he failed to argue in a Rule 29 or Rule 33 motion that Movant's conviction was not supported by sufficient evidence and/or was contrary to the evidence. (Doc. 1 at 2-3, 26-27.) Movant contends there was insufficient evidence of criminal intent, and that a timely post-trial motion would have resulted in dismissal of the charges or the granting of a new trial. (Id.) On any post-trial sufficiency of the evidence motion, all inferences must be resolved in favor of the verdict. United States v. Begay, 673 F.3d 1038, 1043 (9th Cir. 2011); United States v. Nevils, 598 F.3d 1158, 1164 (9th Cir. 2010) (en banc). The court must determine "whether the evidence, so viewed, is adequate to allow `any rational trier of fact to find the essential elements of the crime beyond a reasonable doubt.'" United States v. Begay, 673 F. 3d at 1043 (quoting Nevils, 598 F.3d at 1164). In deciding a Rule 29 motion, "[t]he district court... must bear in mind that it is the jury's exclusive function to determine the credibility of witnesses, resolve evidentiary conflicts, and draw reasonable inferences from proven facts." United States v. Bernhardt, 840 F.2d 1441, 1448 (9th Cir. 1988). Federal Rule of Criminal Procedure 33 allows a court to "vacate any judgment and grant a new trial if the interest of justice so requires." Fed. R. Crim. P. 33(a), and the burden of justifying a new trial rests with the defendant. See United States v. Shaffer, 789 F.2d 682, 687 (9th Cir. 1986).
Failure to take futile action can never be deficient performance under Strickland. See Rupe v. Wood, 93 F.3d 1434, 1445 (9th Cir. 1996); Sexton v. Cozner, 679 F.3d 1150, 1157 (9th Cir. 2012). "The failure to raise a meritless legal argument does not constitute ineffective assistance of counsel." Baumann v. United States, 692 F.2d 565, 572 (9th Cir. 1982). The Court has reviewed the trial court record and finds Movant's claim that a failure to raise a Rule 29 or 33 motion post-trial was ineffective assistance of counsel lacks merit.
Movant alleges that his counsel was ineffective because counsel failed to object to or argue in a Rule 29 or Rule 33 motion that comments made by the prosecutor during rebuttal closing argument violated Movant's Fifth Amendment rights under Griffin v. California, 380 U.S. 609, 85 S.Ct. 1229, 14 L.Ed.2d 106 (1965). (Doc. 1 at 2-3, 27-29.) Even Movant acknowledges in his motion that closing argument statements are not Griffin violations when the statements in closing argument refer to defense counsel's arguments and do not call attention to the defendant not having testified. As the Ninth Circuit explained:
United States v. Tam, 240 F.3d 797, 805 (9th Cir. 2001). Here, like in Tam, Movant's "claim that the government committed Griffin violations is without merit." (Id.) The rebuttal argument statements about which Movant complains are clearly references to defense counsel's arguments, not references to Movant's lack of trial testimony.
The Court shall hold an evidentiary hearing on a Movant's Motion "[u]nless the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief[.]" 28 U.S.C. § 2255(b). The standard for holding an evidentiary hearing is whether the movant has made specific factual allegations that, if true, state a claim on which relief could be granted. United States v. Schaflander, 743 F.2d 714, 717 (9
Rule 11(a), Rules Governing Section 2255 Cases, requires that in such cases the "district court must issue or deny a certificate of appealability when it enters a final order adverse to the applicant." Such certificates are required in cases under 28 U.S.C. § 2255 attacking a federal criminal judgment or sentence, such as Movant's. 28 U.S.C. § 2253(c)(1). The recommendations herein, if accepted, will result in Movant's § 2255 Motion being resolved adversely to him.
The standard for issuing a certificate of appealability ("COA") is whether the applicant has "made a substantial showing of the denial of a constitutional right." 28 U.S.C. § 2253(c)(2). "Where a district court has rejected the constitutional claims on the merits, the showing required to satisfy § 2253(c) is straightforward: The petitioner must demonstrate that reasonable jurists would find the district court's assessment of the constitutional claims debatable or wrong." Slack v. McDaniel, 529 U.S. 473, 484 (2000). To meet the "threshold inquiry" on debatability, the Ninth Circuit instructs that:
Allen v. Ornoski, 435 F.3d 946, 951 (9th Cir. 2006).
The undersigned concludes that Movant has not demonstrated a substantial showing of the denial of a constitutional right, and that reasonable jurists would not debate that Movant's § 2255 Motion lacks merit.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1) of the Federal Rules of Appellate Procedure should not be filed until entry of the District Court's judgment. The parties shall have fourteen days from the date of service of a copy of this recommendation within which to file specific written objections with the Court. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6, 72. The parties shall have fourteen days within which to file responses to any objections. Failure to file timely objections to the Magistrate Judge's Report and Recommendation may result in the acceptance of the Report and Recommendation by the District Court without further review. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). Failure to file timely objections to any factual determination of the Magistrate Judge may be considered a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to the Magistrate Judge's recommendation. See Fed. R. Civ. P. 72.
