United States District Court, W.D. North Carolina, Charlotte Division
Cogburn 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). The Government has filed a
Response, (Doc. No. 3), and Petitioner has filed a Reply,
(Doc. No. 4).
was charged in the underlying criminal case in connection
with a Ponzi scheme with: Count (1), securities fraud; Count
(2), wire fraud; and Counts (3)-(7), transactional money
laundering. (3:13-cr-329, Doc. No. 1). Petitioner pled guilty
to Count (1) in exchange for the Government's dismissal
of Counts (2)-(7) pursuant to a written plea agreement.
(3:13-cr-329, Doc. No. 15). In the written agreement,
Petitioner acknowledges that the maximum sentence for the
securities fraud count is 20 years' imprisonment, $5,
000, 000 fine, or both, and up to three years of supervised
release. (3:13-cr-329, Doc. No. 15 at 1). He acknowledges
that the advisory guidelines will be considered in
determining the sentence, and that the Court will impose a
sentence within its discretion up to the statutory maximum.
(3:13-cr-329, Doc. No. 15 at 2). The parties agreed on a
non-binding loss amount of more than $2, 500, 000 but less
than $20, 000, 000, and retained the right to seek a variance
from the guideline range. (3:13-cr-329, Doc. No. 15 at 2).
Petitioner acknowledged the rights he was waiving by pleading
guilty. (3:13-cr-329, Doc. No. 15 at 5). He further expressly
waived the right to appeal or raise a post-conviction
collateral attack on his conviction or sentence except for
claims of ineffective assistance of counsel or prosecutorial
misconduct. (3:13-cr-329, Doc. No. 15 at 5).
written factual proffer, Petitioner admitted that,
“[f]rom in or about January 2007 through in or about
July 2013, the defendant, [Petitioner] executed what is
commonly known as a “Ponzi” scheme to defraud
investors by inducing victims in Charlotte, North Carolina,
and elsewhere, to invest with … entities …
controlled by [Petitioner].” (3:13-cr-329, Doc. No. 18
came before the Court on July 22, 2014, for a Rule 11
hearing. (3:13-cr-329, Doc. No. 19). He stated under oath
that his mind was clear and that he understood he was there
to enter a guilty plea which could not later be withdrawn.
(3:13-cr-329, Doc. No. 19 at 2). He reviewed and discussed
the Bill of Indictment with counsel and discussed the
decision to plead guilty. (3:13-cr-329, Doc. No. 19 at 3). He
understood the essential elements of the securities fraud
offense and the maximum possible penalty. (Id.).
Petitioner agreed that he understood the charges and his
sentencing exposure, each element of the offense charged,
that the Government would be required to prove each element
beyond a reasonable doubt were he to plead not guilty, and
that the Government would also have to prove that the
unlawful acts were committed knowingly, willfully,
intentionally, and unlawfully. (3:13-cr-329, Doc. No. 19 at
4). Petitioner acknowledged that he and counsel had discussed
the Sentencing Guidelines and how they may apply to his case,
that they are advisory, and that the Court could sentence him
within the statutory limits notwithstanding the guidelines,
and that he may receive a sentence higher or lower than that
called for by the guidelines. (3:13-cr-329, Doc. No. 19 at
5). He understood he has the right to plead not guilty, have
a speedy trial before a jury with the assistance of counsel,
summon witnesses to testify, and confront witnesses against
him. (3:13-cr-329, Doc. No. 19 at 6). He acknowledged that he
is, in fact, guilty of the count in the Bill of Indictment to
which he is pleading guilty, and that the guilty plea is not
the result of coercion, threats, or promises. (3:13-cr-329,
Doc. No. 19 at 7). Petitioner confirmed that he read the plea
agreement, counsel explained it to him, and he fully
understands the terms of the agreement, and he signed it.
(Id.). He agreed that there is a factual basis for
the plea and that it constitutes a factual basis for his
guilty plea. (3:13-cr-329, Doc. No. 19 at 8). His willingness
to plead guilty is the result of prior discussions between
Petitioner and counsel, he has had ample time to discuss any
possible defense with counsel and he has told counsel
everything that he wanted counsel to know about the case.
(Id.). Petitioner stated that he is entirely pleased
with counsel. (Id.). Petitioner confirmed that he
knows and understands what he is doing, heard and understood
all parts of the proceeding, and wants the Court to accept
his plea. (Id.). He did not have any questions,
statements, or comments. (3:13-cr-329, Doc. No. 19 at 8-9).
Court accepted Petitioner's knowing and voluntary guilty
plea, adjudicated him guilty of Count (1), and sentenced him
to 110 months' imprisonment followed by three years of
supervised release, and imposed restitution of $17, 915,
013.35. (3:13-cr-329, Doc. Nos. 19, 38).
filed the instant § 2255 motion to vacate on October 21,
2016, arguing (renumbered): (1) he is actually innocent of
violating securities laws; (2) counsel was ineffective for
misadvising Petitioner that the short-term notes he sold were
securities, which induced him to plead guilty. (Doc. No. 1).
Government filed a Response arguing that Petitioner's
claims fail as a matter of law because the acts to which he
pled guilty constitute securities fraud. (Doc. No. 3).
Reply filed on July 5, 2017, Petitioner argues that the
Government does not contest, and therefore concedes, that the
short-term instruments at issue are not securities, which
confirms that he is being incarcerated for an offense of
which he is actually innocent, and that counsel's
performance during plea negotiations was constitutionally
deficient because there was no factual basis for the plea.
(Doc. No. 4). He additionally argues for the first time that
counsel provided ineffective assistance at sentencing. (Doc.
No. 4 at 2-3).
SECTION 2255 STANDARD OF REVIEW
federal prisoner claiming that his “sentence was
imposed in violation of the Constitution or the laws of the
United States, or that the court was without jurisdiction to
impose such sentence, or that the sentence was in excess of
the maximum authorized by law, or is otherwise subject to
collateral attack, may move the court which imposed the
sentence to vacate, set aside or correct the sentence.”
28 U.S.C. § 2255(a).
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).
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 v. Washington, 466
U.S. 668, 687-88 (1984). 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).
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
(4thCir. 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. 134 (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). Where a defendant
enters his plea upon the advice of counsel, the voluntariness
of the plea depends on whether counsel's advice was
“within the range of competence demanded by attorneys
in criminal cases.” Hill v. Lockhart, 474 U.S.
52, 56 (1985) (quoting McMann v. Richardson, 397
U.S. 759, 771 (1970)). To satisfy Strickland's
prejudice prong, the defendant must show “there is a
reasonable probability that, but for counsel's errors, he
would not have pleaded guilty and would have insisted on
going to trial.” Hill, 474 U.S. at 59;
Meyer v. Branker, 506 F.3d 358, 369 (4th