MARTIN REIDINGER, District Judge.
The material facts underlying this prosecution are contained in the Information [CR Doc. 1] and were recounted at Petitioner's plea hearing. [CR Doc. 49 at 6-12]. These facts are set forth in relevant part below.
Beginning in and around 2009 and continuing through to or about May 3, 2012, Petitioner and her boyfriend, Ronald Jeremy Knowles, and others agreed to defraud the United States Treasury Department by participating in a scheme to obtain false tax refunds. Federal income tax returns may be filed using paper Forms 1040 or electronically through tax preparation software such as Turbo Tax. Tax refunds are paid in multiple ways: a United States Treasury check may be mailed to an address listed on the tax return; the Treasury may make an electronic direct deposit into a bank account designated on the tax return; or a refund may be issued in the form of a pre-paid debit card that is mailed to the claimant. Participants in the scheme caused the Treasury to mail the false tax refund checks to various addresses throughout the Western District of North Carolina and elsewhere. The participants also received false tax refunds via direct deposit and pre-paid debit cards.
Petitioner and Knowles generally executed this tax fraud scheme by collecting stolen, purchased, or otherwise fraudulently obtained identification information from other persons. Typically this information would consist of the victims' names, dates of birth, and Social Security numbers (SSNs). Upon receipt of this identification information, Petitioner would prepare fraudulent federal (and sometimes state) tax returns using this personal identifying information to represent the purported filers of the tax returns. The information entered on these returns concerning matters material to the tax return (such as income and amount of federal tax withheld) was entirely fictitious. Petitioner created these figures in an effort to maximize the amount of the refund while also attempting to minimize the risk of detection.
Petitioner would file these fraudulent returns electronically using a variety of tax preparation software programs, including Turbo Tax. Turbo Tax gave Petitioner the option of receiving tax refunds by direct deposit or in the form of pre-paid debit cards issued by Green Dot Corporation. Green Dot was a provider of pre-paid debit cards that could be used anywhere that MasterCard or Visa debit cards were accepted. Green Dot also sold a product called "MoneyPak." Petitioner could (and did) purchase MoneyPak cards and then use such cards to re-load other debit cards or transfer funds to PayPal, an online payment system used for shopping on the internet.
After filing these false tax returns, Petitioner and Knowles would collect their fraudulently claimed tax refunds in a variety of ways. Sometimes Petitioner would request that the IRS send the Treasury checks to addresses listed on the bogus tax returns. Petitioner would use addresses that were nearby to locations that both she and Knowles would frequent so that they could intercept these checks from these mailboxes. At the time of this scheme, Petitioner and Knowles resided in a rental home in Mill Spring, North Carolina. Living in the Mill Spring home helped Petitioner and Knowles further the scheme because such home was on a lake in a neighborhood populated by vacation homes. Many of the owners of the homes in this neighborhood were seldom present, so Petitioner and Knowles were able to use these nearby addresses as repositories for Treasury checks that could be collected with little risk that the true owners of the mailboxes might recover the checks first. They also used addresses in or near Greenville and Greer, South Carolina. Knowles owned and operated a business entity called "Next Level Entertainment" located in Greenville. Knowles often traveled to Greenville and Greer because they were close to his business. Petitioner and other coconspirators would also make rounds to collect Treasury checks from various mailboxes in other areas.
Besides having Treasury checks delivered by mail, Petitioner would request that the Treasury directly deposit tax refunds into an account at the Bank of Traveler's Rest in Greenville, South Carolina. This account belonged to Knowles' business, Next Level Entertainment. Dozens of fraudulent tax refunds were deposited into this account. Petitioner also used her own bank account at the Woodforest Bank in Greenville, South Carolina. Petitioner opened this account in November 2009, and Knowles was listed as a beneficiary on this account. Several fraudulent tax refunds were deposited into this account.
Petitioner and Knowles also received tax refunds in the form of pre-paid debit cards. For example, when Petitioner used Turbo Tax to file false returns, sometimes she would request that her refund be paid by debit card. Intuit (the company that sells the Turbo Tax software) would then request that Green Dot issue a debit card to the person named on the return by mailing it to the address listed on the return. Petitioner, Knowles and multiple other persons would collect these debit cards and then take them to businesses (primarily Wal Mart) that accept Green Dot cards and then use them to purchase MoneyPak cards. MoneyPak cards do not have a name printed on them. By doing this, Petitioner and Knowles were able to transfer money from a Green Dot debit card bearing the name of a person whose identity had been stolen onto a nameless MoneyPak card which in turn could then be transferred back onto a debit card bearing the names of Petitioner, Knowles, or anyone else.
Through the use of this scheme, Petitioner and Knowles filed well in excess of 1,000 false tax returns using stolen, purchased, or otherwise fraudulently obtained identification information. They made tax refund claims against the United States government well in excess of $5,000,000 and actually received in excess of $3,500,000.
On October 23, 2012, Petitioner and Knowles were named in a three-count Information
Following Petitioner's plea hearing, the Probation Office prepared a draft Presentence Report (PSR) for the Court, and two revisions to the PSR thereafter. [CR Docs. 21; 22; 31]. The Petitioner's final PSR included a Guidelines sentence computation that set forth a Total Offense Level of 36. This Total Offense Level, when combined with Petitioner's Criminal History Category of VI, established her final Guidelines range to be 324 to 405 months. [CR Doc. 31 at 20]. The Court sentenced Petitioner to a total term of imprisonment of 324 months' imprisonment on April 24, 2014. [CR Doc. 41 at 2]. On April 29, 2014, Petitioner filed her notice of appeal. [CR Doc. 37].
On appeal, Petitioner raised two claims of ineffective assistance of counsel, asserting that her trial attorney was ineffective by: (1) conceding a "winning argument" concerning the Government's untimely objections to the PSR; and (2) failing to seek a continuance of the sentencing hearing once the trial court decided to consider the Government's untimely objections to the PSR. [Doc. 54 at 2]. Determining that there was no conclusive evidence of ineffective assistance of counsel on the face of the record, the court of appeals affirmed Petitioner's sentence. [
Pursuant to Rule 4(b) of the Rules Governing Section 2255 Proceedings, sentencing courts are directed to promptly examine motions to vacate, along with "any attached exhibits and the record of prior proceedings" in order to determine whether a petitioner is entitled to any relief. The Court has considered the record in this matter and applicable authority and concludes that this matter can be resolved without an evidentiary hearing.
Before reaching the merits of Petitioner's motion, the Court must address whether it was timely filed. Motions to vacate under § 2255 are subject to a one-year period of limitation, which generally begins to run on "the date on which the judgment of conviction becomes final." 28 U.S.C. § 2255(f). For federal criminal defendants who do not file a timely petition for certiorari on direct review, their conviction becomes final, and thus, the one-year limitation period begins to run, when the time for seeking such review expires.
The Sixth Amendment guarantees that in all criminal prosecutions, the accused shall have the right to the effective assistance of counsel for his defense. U.S. Const. amend. VI. In order to prevail on a claim of ineffective assistance of counsel, a petitioner must show that: (1) "counsel's representation fell below an objective standard of reasonableness," and (2) "the deficient performance prejudiced the defense."
Petitioner states in her motion three grounds for relief, which are premised on allegations that counsel was constitutionally ineffective in representing her: (1) at the pretrial stage; (2) at her sentencing hearing; and (3) on direct appeal. [CV Doc. 1 at 4; 5; and 7]. In support of each ground, Petitioner refers the Court to her memorandum accompanying her motion. [
The first claim raised by Petitioner is her assertion that trial counsel was ineffective in permitting her to plead guilty to access device fraud. This claim appears in the allegations contained on Pages 8 and 12 of her memorandum:
[CV Doc. 1-1 at 9 (grammatical and typographical errors in original)].
[
The nature of Petitioner's complaint is a claim of actual innocence: that her guilty plea to the charge of access device fraud under 18 U.S.C. § 1029(a)(5) was without factual support and thus an invalid basis for conviction. Accordingly, Petitioner asserts that trial counsel was ineffective in allowing her to tender a guilty plea to this offense. The facts of this matter, however, belie Petitioner's claim.
To be convicted of access device fraud under 18 U.S.C. § 1029(a)(5), the Government must prove the following essential elements: (1) an intent to defraud, (2) effecting transactions with one or more access devices issued to another person, (3) to receive payment(s) or thing(s) of value, (4) with a total value of $1,000 or more in a one-year period.
The basis for Petitioner's second claim is that her plea bargain, and that of her co-defendant Knowles, were devised and formulated to be some sort of "package deal," and a deal that Knowles pressured Petitioner to accept. Further, according to Petitioner, her trial counsel was ineffective in not revealing to the Court that this package deal contemplated that both Petitioner and Knowles would receive equal punishment at the time of sentencing (which ultimately did not occur). These allegations appear on Page 8 of her memorandum:
[CV Doc. 1-1 at 9 (grammatical and typographical errors in original)].
As with her first claim, this claim is without merit. During the plea hearing conducted pursuant to Rule 11 of the Federal Rules of Criminal Procedure, the Court established that Petitioner possessed the capacity to make a voluntary, intelligent, and informed decision and that she understood what she was then in the process of doing by entering a guilty plea. In response to questions from the Court, Petitioner stated under oath that she had obtained her high school diploma and completed two years of college, that she was not suffering from a physical or mental problem that would impair her ability to understand or participate fully in the proceeding, and that she was not under the influence of any drugs or intoxicants that would affect her reasoning, comprehension, or communication skills. [CR Doc. 49 at 21-23].
The Court then questioned Petitioner regarding her understanding of the terms of the plea agreement. The Court specifically inquired as to whether she was voluntarily pleading guilty:
[
Also during her plea hearing, the Court explained to Petitioner the sentencing process and the role of the advisory Sentencing Guidelines. In response, Petitioner acknowledged that the Court would not be bound by the Guidelines but nonetheless must consult the Guidelines and take them into account when sentencing. She further acknowledged that any sentence imposed would be within the statutory limits and within the Court's sound discretion and could be greater or lesser than the sentence provided for by the Guidelines. [
True to her word at the conclusion of her plea hearing, Petitioner made no statements or comments at all. In fact, at no time during the pendency of her criminal case, or during the direct appeal of the same, did Petitioner state that any promises or representations were made by the Government or her attorney requiring that her punishment be linked to that of her co-defendant or that her sentence would be equal in severity to his. On the contrary, the Petitioner's sworn testimony at her plea hearing discloses that she fully understood that her sentence would be the product of the Court's discretion after assessing the facts and circumstances of the case and considering the applicable advisory Guidelines. Petitioner never asserted, during her plea hearing or during her sentencing hearing, that her sentence must be tied in any way to the sentence imposed upon Knowles. The Petitioner's threadbare assertion that she did not receive the benefit of an alleged package deal is thus entirely undermined by her sworn testimony at her Rule 11 proceeding. If the solemnity, care, and personal attention required of a plea colloquy has any meaning at all, its binding force cannot be undone simply by the factually unsupported, post-hoc allegations of a disgruntled defendant.
The third claim raised by Petitioner is her assertion that trial counsel was ineffective in not challenging the amount of loss attributable to Petitioner for sentencing purposes. This claim appears in the allegations contained on Page 14 of her memorandum:
[CV Doc. 1-1 at 15 (grammatical and typographical errors in original)].
Petitioner asserts her trial counsel failed to challenge the loss amount calculated under the Guidelines. She correctly points out that any lawful tax services she provided that resulted in a legitimate tax refund generated by the Treasury should be deducted from such loss amount. Petitioner, however, has failed to set forth any facts indicating that she performed any lawful tax preparation services during the time in question. Petitioner's PSR indicates that for the tax years spanning from 2009 until 2012, she had no reportable earnings. [CR Doc. 31 at 19]. Preparation of any legitimate tax returns would have generated legitimate pay. More importantly, however, Petitioner has failed to identify any legitimate tax refunds that were included within the Guidelines loss amount. For these reasons, Petitioner's claim that trial counsel was ineffective in not challenging the amount of loss attributable to her for sentencing purposes is without merit.
While not the model of clarity, Petitioner's fourth claim appears to be based upon revisions to her PSR made as a result of the materials the Government included within its late-filed objections to the Draft PSR. Petitioner asserts that trial counsel was ineffective when he failed to persist in his objection to the untimeliness of the Government's filing of its sentencing materials. She argues that the information contained within those documents resulted in the revision of the Petitioner's PSR to her detriment. This claim appears in the allegations contained on Pages 14 and 15 of Petitioner's memorandum:
[CV Doc. 1-1 at 15-16 (grammatical and typographical errors in original)].
To place Petitioner's claim in context, the Court briefly recites the procedural history leading to her sentencing hearing. Petitioner's Draft PSR was filed on December 4, 2013. [CR Doc. 21]. The Guidelines calculation within the Draft PSR set forth no adjustment for Petitioner's role in the offense [
On January 30, 2014, the Government filed PSR objections clearly outside the prescribed period. [CR Doc. 26]. The Government asserted that a four-level increase was warranted in light of the Petitioner's role in the offense [
At the Petitioner's sentencing hearing, the Court provided the Petitioner an opportunity to renew her motion to strike the Government's untimely filings. [CR Doc. 48 at 8-9]. In response, defense counsel made known his dismay regarding the lateness with which the Government filed its PSR objections but stated that he understood the futility of pursuing Petitioner's motion to strike: "At this point in time, Your Honor, I believe, quite frankly, after doing the research, that it seems that these late filed objections that they have made — they have explained the reasons for them and apparently the law is relatively lenient with that regard." [
Distilling her arguments to their essence, Petitioner argues that her trial counsel was ineffective by: (1) conceding a "winning argument" concerning the Government's untimely objections to the PSR; (2) failing to seek a continuance of the sentencing hearing once the Court decided to consider the Government's untimely objections to the PSR; and (3) not challenging the four-level enhancement she received for her role in the offense. [CV Doc. 1-1 at 15-16]. Given the interwoven nature of the first two bases for this claim, the Court will address them together before proceeding to address Petitioner's third basis.
In seeking leave to file its objections out of time, the Government set forth a number of reasons why its late filing was justified. Specifically, the Government noted that Petitioner's co-defendant Ronald Knowles had filed objections to his PSR on January 22, 2014, wherein he claimed that he was a minor or minimal participant in the conspiracy and that Petitioner was "clearly the mastermind of this operation." [CR Doc. 25 at 3]. The Government argued that this assertion made it necessary for the Government to address the relative roles of both Defendants in their respective PSRs. [CR Doc. 30 at 1-2]. Next, the Government noted that it had recently received an IRS memorandum of the interview of Petitioner's co-conspirator Yolanda Birt Kitson and that Kitson's statements cast significant doubt upon the veracity of Petitioner's statement to the Government. [
The Government had valid reasons for filing its objections out of time, and thus the Court properly granted the Government leave to do so. The objections having been properly filed, the Probation Office was fully justified in revising the PSR to reflect this new information.
Significantly, Petitioner suffered no prejudice by the filing of these objections past the original deadline or by the subsequent revisions to the PSR. At the time of the Government's filing, no sentencing date had yet been scheduled for Petitioner and in fact was not scheduled until April 24, 2014, nearly three months after the Government's objections were filed. Therefore, Petitioner's counsel had adequate time to respond to the objections and prepare for the sentencing hearing. In fact, Petitioner's counsel filed a response to the Government's objections on February 5, 2014. [CR Doc. 27]. While Petitioner was given the opportunity at sentencing to make further objections to the untimeliness of the Government's objections, counsel prudently conceded that there was no basis to claim prejudice based on the timing of the Government's filing and therefore withdrew the motion to strike. Further, without any discernable prejudice, counsel simply had no valid reason to seek a continuance of the sentencing hearing. Counsel's performance in this regard was not deficient, nor did it prejudice Petitioner. Accordingly, Petitioner's first and second bases for her fourth claim of ineffective assistance counsel are thus without merit.
Petitioner fares no better with regard to the third basis for her fourth claim — her attorney's alleged ineffectiveness in failing to challenge the four-level enhancement she received for her aggravating role in the offense. First, contrary to Petitioner's argument, counsel did challenge the four-level enhancement in the written objections to the PSR [Doc. 27 at 2], and he renewed that objection at sentencing. A review of the record reveals, however, that the enhancement was correctly applied. Section 3B1.1(a) of the Sentencing Guidelines provides: "If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels." As the Court noted at Petitioner's sentencing, Petitioner
[CR Doc. 48 at 15-16]. Based on these findings, the four-level enhancement was properly applied. This basis for Petitioner's fourth ineffective assistance claim is therefore without merit.
Petitioner's fifth and final claim is her assertion that appellate counsel was ineffective in not raising "the most appropriate arguments" on appeal. [CV Doc. 1-1 at 17]. This claim appears in the allegations contained on Page 16 of her memorandum:
[
The Court has already addressed the application of the aggravating role enhancement pursuant to U.S.S.G. § 3B1.1(a). For the same reasons the Court determined that adjustment to have been properly applied, the Court finds that Petitioner's appellate counsel was not ineffective in failing to challenge such enhancement on direct appeal. This leaves Petitioner's contention that the tax fraud conspiracy could not have started but for Ms. Kitson providing to her the personal identification information Kitson obtained from the veteran's hospital. The issue of who provided the personal identification information used by the conspiracy, however, is irrelevant to the determination of Petitioner's leadership role. A defendant need not be the source of the stolen identities in order to be deemed the leader or organizer of an identity theft conspiracy. Here, the factual basis established by the Government demonstrated that Petitioner was the one who prepared the returns and who brought to the conspiracy the knowledge and understanding of how to commit the offenses at issue. The fact that Petitioner commissioned someone else to procure the stolen identities does not alter her leadership status. Accordingly, Petitioner's appellate counsel was not ineffective in failing to raise Petitioner's contention in this regard on direct appeal.
Based on the foregoing, the Court finds that the claims in Petitioner's § 2255 motion all are without merit. Pursuant to Rule 11(a) of the Rules Governing Section 2255 Cases, the Court declines to issue a Certificate of Appealability as Petitioner has not made a substantial showing of a denial of a constitutional right. 28 U.S.C. § 2253(c)(2);
DECISION BY COURT. This action having come before the Court and a decision having been rendered;
IT IS ORDERED AND ADJUDGED that Judgment is hereby entered in accordance with the Court's January 13, 2017 Order.
