United States District Court, W.D. North Carolina, Charlotte Division
J. Conrad, Jr. United States District Judge.
MATTER is before the Court on Petitioner's
Motion to Vacate, Set Aside or Correct Sentence under 28
U.S.C. § 2255, (Doc. No. 1).
was charged along with thirteen co-defendants in a fraudulent
sweepstakes call-center scheme run out of Costa Rica,
targeting United States citizens. Petitioner, a Canadian
citizen, was alleged to have owned and managed one or more of
the call centers. Petitioner was charged with one count of
conspiracy in violation of 18 U.S.C. §§ 371 and
2326(2)(A) and (B) (Count 1), and 22 counts of wire fraud in
violation of 18 U.S.C. §§ 1343, 2326(2)(A) &
(B) and (2) (Counts 2-23); (Crim. Case No. 3:06-cr-151-RJC,
Doc. No. 113: Superseding Indictment). The indictment
included a notice of forfeiture. (Id., Doc. No. 113
case proceeded to a four-day jury trial before the Honorable
Frank D. Whitney in January, 2008. The Government presented
evidence that the United States Postal Service engaged in a
large-scale sweepstakes fraud investigation with the
assistance of the Costa Rican Government. Costa Rican law
enforcement conducted surveillance of several individuals
including the Petitioner, and executed a search of sixteen
sites simultaneously on May 16, 2006, pursuant to Letters
Rogatory submitted by the U.S. Government. The search
locations included Tico Racer (an auto accessory store that
Petitioner owned with co-conspirator Herman Kankrini),
Petitioner's home, and several call centers from which
the sweepstakes fraud was being conducted. A Costa Rican law
enforcement agent testified that he arrested Petitioner
outside the Tico Racer store at around 8:30 AM and seized the
red and black thumb drive he was wearing around his neck.
Costa Rican agents also seized a number of computers, another
thumb drive from the call center a Rohmoser, and other
digital evidence during the search. They seized a computer,
records, and $238, 000 in cash from Petitioner's home.
Agents seized a number of documents from Kankrini's car
including handwritten notebooks full of his and
Petitioner's handwriting that document victims'
losses in the sweepstakes scheme. Costa Rican authorities
summarized the seized evidence in an “Acta” for
each location, and United States Postal Inspector Jose
Gonzalez personally transported the evidence to the United
States under secure conditions. Inspector Gonzalez testified
that a computer expert from his office, Dan Dorman, then
copied the digital information so that the originals would
not be damaged. The records, which were introduced at trial,
included scripts for defrauding victims, hundreds of
victims' personal information, notes regarding the
amounts in which the victims had been defrauded, details
about the money they victims wired or transmitted via bank
accounts, and plans to further defraud various victims.
Several fraud victims who were not specifically charged in
the indictment testified that they received phone calls
informing them of sweepstakes winnings and requiring payment
for items such as taxes, customs, courier fees and/or
insurance, which they paid, and for which they never received
any winnings. One victim, Frank Pytel, who is elderly and
infirm, lost more than $800, 000 in the scheme. Three of
Petitioner's co-conspirators, Victor Kustra, Herman
Kankrini, and Larry Cunningham, testified that Petitioner
owned various call centers over the years from which he
conducted the sweepstakes fraud, that he was actively engaged
in the fraud, that he personally profited from each of the
victims' losses, and that no legitimate business was
conducted from any of his call centers. Trent Nyffler, who
pled guilty to conspiracy, testified that he sold lists of
personal information for individuals that Petitioner
victimized in the sweepstakes scheme for three or four
testified at trial against counsel's advice. His decision
to testify prompted counsel to move to withdraw from the
representation, which the Court denied, and to request that
Petitioner be permitted to testify in the narrative, which
the Court granted. Petitioner testified that the
Government's witnesses were lying about the timing and
circumstances of his arrest, that the information gleaned
from his thumb drive and computer had been tampered with,
that he knew Kankrini was involved in something illegal that
Petitioner failed to report to authorities, that the $238,
000 found in his home was Kankrini's, that he paid for
his home and cars through unreported profits from Tico Racer
and its associated magazine, and that he was never engaged in
a sweepstakes fraud scheme.
jury found Petitioner guilty of all twenty-three counts with
which he was charged, as well as forfeiture in the amount of
that $8, 381, 962 was derived from proceeds that Petitioner
obtained, directly or indirectly, as the result of the
conspiracy, and that $32, 761 was derived from proceeds that
Petitioner obtained, directly or indirectly, as a result of
the scheme to commit wire fraud. (Id., Doc. No.
calculated the base offense level as seven because the
offense involves a violation of 18 U.S.C. §§ 371,
1343, 1341, 2314 and 506(a)(2). (Id., Doc. No. 326
at ¶ 40). Thirty levels were added for the following
specific offense characteristics: known or reasonably
foreseeable loss amount over $7, 000, 000 (20 levels); more
than 250 victims (six levels); misrepresentation that the
Petitioner and others were acting on behalf of a government
agency (two levels); a substantial part of the scheme was
committed outside the United States (two levels).
(Id., Doc. No. 326 at ¶¶ 410-44). Two
levels were added because Petitioner knew or should have
known that the majority of the victims were elderly or
otherwise particularly susceptible to criminal conduct, four
levels were added because Petitioner was an organizer or
leader in a criminal activity involving at least five
participants. (Id., Doc. No. 326 at ¶¶
45-47). Another two levels were added for obstruction of
justice because Petitioner perjured himself at trial.
(Id., Doc. No. 326 at ¶¶ 30-35, 45). He
received no adjustment for acceptance of responsibility.
(Id., Doc. No. 326 at ¶ 50). The total offense
level was forty-three. (Id., Doc. No. 326 at ¶
51). Petitioner had no criminal history points and a criminal
history category of I. (Id., Doc. No. 326 at ¶
54). The resulting guideline range is life imprisonment, up
to five years of supervised release, fines between $25, 000
and $250, 000, and restitution. (Id., Doc. No. 326
at ¶¶ 71, 74, 79, 82).
Government moved to dismiss Count 18 at the sentencing
hearing, which was granted. (Id., Doc. No. 487 at
3). The Court sentenced Petitioner to a total of 600
months' imprisonment followed by three years of
supervised release, imposed $3, 952, 985 in restitution, and
entered a final Order of forfeiture in accordance with the
jury's verdict. (Id., Doc. No. 357, 424).
direct appeal, Petitioner argued that his sentence amounted
to a life sentence in violation of the United States'
extradition agreement with Costa Rica, and exceeded the
statutory maximum for each count, which constituted cruel and
unusual punishment. (4th Cir. Case No. 08-4237, Doc. No. 50
at 20). The Fourth Circuit agreed that the sentence was based
on clearly erroneous facts, thus making Petitioner's
600-month sentence procedurally unreasonable. It remanded for
resentencing before a different judge. United States v.
Pileggi, 361 Fed.Appx. 475 (4th Cir. 2010).
case was reassigned to the undersigned on remand, and
Petitioner was resentenced to a total of 300 months'
imprisonment (60 months as to Count 1 and 240 months each as
to Counts 2-17 and 19-23 running concurrently with each other
and consecutively to Count 1), and restitution in the amount
of $20, 726, 005.18. (Crim. Case No. 3:06-cr-151-RJC, Doc.
No. 595: Amended Judgment). On appeal, the Fourth Circuit
held that the Court was barred from reconsidering the amount
of restitution on remand and reinstated the previous
restitution order. United States v. Pileggi, 703
F.3d 675 (4th Cir. 2013); see (Crim. Case No.
3:06-cr-151-RJC, Doc, No. 626: Amended Judgment).
filed the instant motion to vacate pursuant to 28 U.S.C.
§ 2255 on March 31, 2014. (Doc. No. 1). He raises claims
of ineffective trial and appellate counsel, trial court
error, and prosecutorial misconduct. The Government has filed
a response and Petitioner has replied. The § 2255 motion
to vacate is ripe for disposition.
review is an extraordinary remedy and will not be allowed to
do service for an appeal.” Bousley v. United
States, 523 U.S. 614, 621 (1998) (internal citations
omitted); United States v. Sanders, 247 F.3d 139,
144 (4th Cir. 2001). In order to collaterally attack a
conviction or sentence based upon errors that could have been
but were not pursued on direct appeal, a petitioner must show
cause and actual prejudice resulting from the errors of which
he complains or he must demonstrate that a miscarriage of
justice would result from the refusal of the court to
entertain the collateral attack. See United States v.
Frady, 456 U.S. 152, 167-68 (1982); United States v.
Mikalajunas, 186 F.3d 490, 492-93 (4th Cir. 1999);
United States v. Maybeck, 23 F.3d 888, 891- 92 (4th
Cir. 1994). Actual prejudice is then shown by demonstrating
that the error worked to petitioner's “actual and
substantial disadvantage, ” rather than just creating a
possibility of prejudice. See Satcher v. Pruett, 126
F.3d 561, 572 (4th Cir. 1997) (quoting Murray v.
Carrier, 477 U.S. 478, 494 (1986)). To establish cause
based upon ineffective assistance of counsel, a petitioner
must show that the attorney's performance fell below an
objective standard of reasonableness and that he suffered
prejudice as a result. See Murray, 477 U.S. at 488;
Strickland v. Washington, 466 U.S. 668, 687 (1984).
In order to demonstrate that a miscarriage of justice would
result from the refusal of the court to entertain the
collateral attack, a petitioner must show actual innocence by
clear and convincing evidence. See Murray, 477 U.S.
SECTION 2255 STANDARD OF REVIEW
Sixth Amendment to the U.S. Constitution guarantees that in
all criminal prosecutions, the accused has the right to the
assistance of counsel for his defense. See U.S.
Const. Amend. VI. To show ineffective assistance of counsel,
Petitioner must first establish deficient performance by
counsel and, second, that the deficient performance
prejudiced him. See Strickland, 466 U.S. at 687-88.
The deficiency prong turns on whether “counsel's
representation fell below an objective standard of
reasonableness ... under prevailing professional
norms.” Id. at 688. A reviewing court
“must apply a ‘strong presumption' that
counsel's representation was within the ‘wide
range' of reasonable professional assistance.”
Harrington v. Richter, 562 U.S. 86, 104 (2011)
(quoting Strickland, 466 U.S. at 689). The
Strickland standard is difficult to satisfy in that
the “Sixth Amendment guarantees reasonable competence,
not perfect advocacy judged with the benefit of
hindsight.” See Yarborough v. Gentry, 540 U.S.
1, 8 (2003). The prejudice prong inquires into whether
counsel's deficiency affected the judgment. See
Strickland, 466 U.S. at 691. A petitioner must
demonstrate “a reasonable probability that, but for
counsel's unprofessional errors, the result of the
proceeding would have been different. A reasonable
probability is a probability sufficient to undermine
confidence in the outcome.” Id. at 694. In
considering the prejudice prong of the analysis, a court
cannot grant relief solely because the outcome would have
been different absent counsel's deficient performance,
but rather, it “can only grant relief under . . .
Strickland if the ‘result of the proceeding
was fundamentally unfair or unreliable.'”
Sexton v. French, 163 F.3d 874, 882 (4th Cir. 1998)
(quoting Lockhart v. Fretwell, 506 U.S. 364, 369
(1993)). Under these circumstances, the petitioner
“bears the burden of affirmatively proving
prejudice.” Bowie v. Branker, 512 F.3d 112,
120 (4th Cir. 2008). If the petitioner fails to meet this
burden, a “reviewing court need not even consider the
performance prong.” United States v. Rhynes,
196 F.3d 207, 232 (4th Cir. 1999), vacated on other
grounds, 218 F.3d 310 (4th Cir. 2000).
Sixth Amendment right to the assistance of counsel during
criminal proceedings extends to the plea-bargaining process.
See Missouri v. Frye, 566 U.S. 133 (2012). Thus,
criminal defendants are “entitled to the effective
assistance of competent counsel” during that process.
Lafler v. Cooper, 566 U.S. 156, 162 (2012) (internal
quotation marks omitted); Merzbacher v. Shearin, 706
F.3d 356, 363 (4th Cir. 2013). 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. Frye, 566 U.S. at 145.
To show prejudice from ineffective assistance of counsel
where a plea offer has lapsed or been rejected because of
counsel's deficient performance, defendants must
demonstrate a reasonable probability they would have accepted
the earlier plea offer had they been afforded effective
assistance of counsel, as well as a reasonable probability
the plea would have been entered without the prosecution
canceling it or the trial court refusing to accept it.
Id. at 147. 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. Id.
also applies in the context of appellate representation. To
show prejudice in such cases, a petitioner must show a
“reasonable probability ... he would have prevailed on
his appeal” but for his counsel's unreasonable
failure to raise an issue. Smith v. Robbins, 528
U.S. 259, 285- 86 (2000); see also United States v.
Mannino, 212 F.3d 835, 845-46 (3d Cir. 2000) (“The
test for prejudice under Strickland is not whether
petitioners would likely prevail upon remand, but whether we
would have likely reversed and ordered a remand had the issue
been raised on direct appeal.”).
4(b) of the Rules Governing Section 2255 Proceedings provides
that courts are to promptly examine motions to vacate, along
with “any attached exhibits and the record of prior
proceedings . . .” in order to determine whether the
petitioner is entitled to any relief on the claims set forth
therein. After examining the record in this matter, the Court
finds that the arguments presented by Petitioner can be
resolved without an evidentiary hearing based on the record
and governing case law. See Raines v. United States,
423 F.2d 526, 529 (4th Cir. 1970).
Claims of Trial Court Error and Prosecutorial
Respondent asserts that many of Petitioner's claims are
procedurally defaulted from § 2255 review.
claims of prosecutorial misconduct and trial court error
could have been, but were not, raised on direct appeal.
Therefore these claims are procedurally defaulted from §
2255 review absent a showing of cause and prejudice or actual
innocence. Petitioner concedes in his § 2255 motion to
vacate that none of his claims had been raised previously
because “the grounds necessarily involve operative
facts unavailable at the time of direct appeal.” (Doc.
No. 1 at 10).
suggestion that his claims of prosecutorial misconduct and
trial court error could not have been raised earlier because
they are based on newly discovered facts is rejected.
Petitioner was present at the entire trial and sentencing
proceedings and was therefore well aware of the factual basis
of these claims. The fact that he might not have appreciated
their legal significance until later does not excuse his
failure to raise them in the district court and/or on direct
appeal. See Rose v. Lee, 252 F.3d 676, 687
(4th Cir. 2001) (“a petitioner cannot
establish cause when the facts underlying the claim were in
existence upon a reasonably diligent search.”);
United States v. Pettiford, 612 F.3d 270, 281
(4th Cir. 2010) (§ 2255 relief was
unavailable where the facts underlying petitioner's
challenges to his prior convictions were available at
Reply, Petitioner argues for the first time that his
procedurally defaulted claims are excused by ineffective
assistance of trial and appellate counsel, and because they
are violations of due process. (Doc. No. 13 at 15).
preliminary matter, there is no general procedural default
exception for claims of due process violations. See
generally Bousley, 523 U.S. at 621 (challenge to the
voluntariness of a guilty plea is procedurally defaulted if
it is not raised on direct appeal); Peveler v. United
States, 269 F.3d 693 (6th Cir. 2001) (due
process claim is procedurally defaulted if it is not raised
on direct appeal or excused by a showing of cause and
prejudice or actual innocence); Guyton v. United
States, 447 Fed.Appx. 136 (11th Cir. 2011)
(same); United States v. Aguilar-Ortiz, 86 Fed.Appx.
390 (10th Cir. 2004) (same).
using ineffective assistance of counsel to excuse procedural
default of another independent claim, counsel must have been
so wholly deficient as to violate Petitioner's Sixth
Amendment right. Edwards v. Carpenter, 529 U.S. 446,
451 (2000) (citing Murray, 477 U.S. at 488-89).
Thus, Petitioner must show that by failing to challenge these
issues, counsel's performance fell below an objective
standard of reasonableness, and that he was prejudiced by
such constitutionally deficient representation.
Strickland, 466 U.S. at 668. The Supreme Court has
explained that while ineffective assistance of counsel may
establish cause for a procedural default, “the mere
fact that counsel failed to recognize the factual or legal
basis for a claim, or failed to raise the claim despite
recognizing it, does not constitute cause for a procedural
default.” Murray, 477 U.S. at 486.
assertion that his procedurally defaulted claims were not
raised at trial or on appeal because of counsel's
deficient performance falls short of establishing
“cause” for his procedural default. See Fakih
v. United States, 2011 WL 4402763 at *2 (W.D. N.C. Sept.
21, 2011) (petitioner's blanket conclusory assertion as
to his procedurally defaulted claims that such claims were
not raised on appeal because of “appeal counsel
deficient performance” falls short of establishing
“cause” for his procedural default). Neither
trial nor appellate counsel was objectively unreasonable for
failing to raise these claims because they are meritless for
the reasons that follow, and therefore, ineffective
assistance of counsel does not excuse his procedural default
of these claims and they are dismissed.
Petitioner claims that the Government engaged in misconduct
by: (a) knowingly presenting and failing to correct false
testimony at trial; (b) presenting improperly seized evidence
at trial; (c) presenting altered or adulterated computer data
while ensuring the computer expert was unavailable to
testify; (d) unfairly commenting on Petitioner's guilt;
and (e) commenting on Petitioner's silence.
First, Petitioner contends that the Government knowingly
presented false testimony by failing to correct co-defendant
Andreas Leimer's testimony which led to the search
warrant and indictment. Further, the Government presented
Inspector Gonzalez's testimony that the information
Leimer provided to the Government was always truthful,
whereas the Government knew that Leimer had been convicted of
making false statements, thus rendering Gonzalez's
State may not knowingly use false evidence, including false
testimony, to obtain a tainted conviction.” Napue
v. Illinois, 360 U.S. 264, 269 (1959). “This is
true regardless of whether the [g]overnment solicited
testimony it knew or should have known to be false or simply
allowed such testimony to pass uncorrected.” United
States v. Kelly, 35 F.3d 929, 933 (4th Cir. 1994). A new
trial is required when the government's knowing use of
false testimony could affect the judgment of the jury.
See Giglio v. United States, 405 U.S. 150, 154
(1972). However, a new trial is not automatically required
whenever a “combing of the prosecutors” files
after the trial has disclosed evidence possibly useful to the
defense but not likely to have changed the verdict.
Id. (quoting United States v. Keogh, 391
F.2d 138, 148 (2d Cir. 1968)); United States v.
Bartko, 728 F.3d 327, 335 (4th Cir. 2013).
extent that Petitioner claims that the Government knowingly
presented or failed to correct Leimer's testimony is
premised on an incorrect factual basis because Leimer did not
testify at trial. See Raines, 423 F.2d at 529
(“Where the files and records conclusively show that
the prisoner is entitled to no relief, summary dismissal is
claim that the Government knowingly presented Leimer's
false statements via Inspector Gonzalez's testimony, is
based on incorrect factual allegations and is meritless.
Gonzalez testified at trial that he interviewed Leimer
pursuant to a subpoena in November, 2005. The prosecutor
asked whether Gonzalez “obtain[e]d any information that
furthered [his] sweepstakes investigation from Mr. Leimer,
” and Gonzalez responded “[y]es, sir, I
did.” (Id., Doc. No. 402 at 33). Defense
counsel objected when the prosecutor asked Gonzalez to
summarize the information gained from Leimer, and the Court
ruled that the witness could explain why he took certain
steps in the investigation. (Id., Doc. No. 402 at
34). Gonzalez went on to testify that Leimer acknowledged he
owned two Vonage phone number boxes that were associated with
the sweepstakes fraud and installed them in Costa Rica.
(Id., Doc. No. 402 at 34).
cross-examination, Gonzalez testified that Leimer was charged
as a co-conspirator in this investigation and he is a
fugitive somewhere in Costa Rica or Central America.
(Id., Doc. No. 402 at 171). Gonzalez then testified
that Leimer initially cooperated with the investigation and
law enforcement was able to corroborate the information he
provided. (Id., Doc. No. 402 at 171-72). However,
Leimer was charged with making false statements after he
testified before the grand jury. (Id., Doc. No. 411
has failed to show that Gonzalez's testimony based on the
information Leimer initially provided during the
investigation, was false, or that the Government knew of its
falsity. Moreover, the issue of Leimer's credibility was
before the jury regarding his perjury charge, and therefore,
his veracity was before the jury for consideration.
Next, Petitioner complains that the Government introduced at
trial evidence that was improperly shipped to the United
States before Petitioner was extradited. Further, items
seized from the Tico Racer call center were outside the ambit
of discovery, and a thumb drive was improperly seized.
preliminary matter, to the extent that Petitioner suggests
any evidence should have been suppressed under the Fourth
Amendment's exclusionary rule, this argument fails
because he is a Canadian citizen who was arrested, and whose
property was seized, in Costa Rica. The Fourth Amendment has
no application under these circumstances. See United
States v. Verdugo-Urquidez, 494 U.S. 259, 261 (1990).
Therefore, any restrictions on the search and seizure in
Costa Rica “must be imposed by the political branches
through diplomatic understanding, treaty, or
legislation.” Id. at 275.
extent Petitioner seeks relief in the instant case pursuant
to the United States' Extradition Treaty with Costa Rica,
and assuming that Petitioner has standing to raise the issue,
arguments that the search of the Tico Racer location somehow
exceeded the scope of the permissible search, and that a
thumb drive was improperly seized, are refuted by the record.
Inspector Gonzalez testified that he submitted Letters
Rogatory to the Costa Rican government requesting
intelligence information, surveillance, search warrants, bank
records, and business documents regarding several individuals
including Petitioner. (Id., Doc. No. 402 at 33). The
Costa Rican judiciary approved the Letters Rogatory and
assigned the matter to the fraud section of their Department
of Justice. (Id., Doc. No. 402 at 35-36). Costa
Rican law enforcement executed a search pursuant to the
Letters Rogatory on sixteen different sites on May 16, 2006,
including Petitioner's Tico Racer business, and a call
center at Rohmoser. (Id., Doc. No. 402 at 41-42).
Inspector Gonzalez further testified that items including
thumb drives were seized from the various sites on May 16,
2016, including a black and red thumb drive seized from
around Petitioner's at Tico Racer, (Id., Doc.
No. 402 at 46, 58-59), and another thumb drive from the call
center at Rohmoser, (Id., Doc. No. 402 at 83-84).
Inspector Gonzalez's testimony established that the Tico
Racer search was authorized by, and that the thumb drives
were properly seized pursuant to, Letters Rogatory that were
approved and executed by the Costa Rican Government.
Petitioner's present contentions to the contrary are
refuted by the record, are wholly unsupported by any
evidence, and are rejected.
claim that evidence was improperly transported to the United
States before he was extradited is facially insufficient.
Petitioner fails to state what specific provision precluded
the Government from transporting the evidence pursuant to the
Letters Rogatory, or how the trial outcome would have been
different had the evidence been maintained in Costa Rica up
until his extradition, rather than being transported
immediately to the United States by a postal inspector under
secure conditions. See (Id., Doc. No. 402
Petitioner contends that the Government introduced computer
data at trial that was altered or adulterated, ensured that
the computer expert was unavailable to testify, and thereby
allowed unreliable information to be presented to the jury.
Gonzalez testified at trial that a computer expert in his
office, Dan Dorman, produced actual duplicates of the digital
evidence that was seized in Costa Rica so that the originals
would not be damaged. (Id., Doc. No. 402 at 61).
Paper printouts of portions of these records were introduced
at trial without objection. (Id., Doc. No. 402 at
allegations that the evidence introduced at trial was
unreliable or inaccurate, that the Government purposefully
ensured that Dorman would be unavailable to testify at trial,
and that it purposefully introduced inaccurate evidence, are
wholly conclusory and unsupported. No basis for objection is
apparent in the record. For instance, Herman Kankrini, who
was intimately involved in the sweepstakes conspiracy,
testified that the seized records reflected the fraud in
which he and Petitioner were involved. See,
e.g., (Id., Doc. No. 410 at 38, et
Petitioner has failed to demonstrate prejudice in light of
the other strong evidence of his guilt, including non-digital
records such as Petitioner's handwritten notes in a
spiral notebook tracking victims' losses, the testimony
of Kankrini and Kustra who participated in the sweepstakes
conspiracy with Petitioner, the testimony of Nyffeler that
Petitioner purchased victim information from him for years,
the seizure of over $200, 000 in cash from Petitioner's
home, and ...