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United States v. Bowman

June 5, 2009



Movant, a federal prisoner represented by counsel, challenges his sentence under 28 U.S.C. § 2255. On January 29, 2002, movant was found guilty of fifteen counts of mail fraud. On December 20, 2002, he was sentenced to 108 months in prison. The instant motion to vacate, set aside, or correct his sentence was filed on February 20, 2004.

I. Factual and Procedural Background

Movant was indicted for mail fraud on May 1, 1998. The single count in the original indictment alleged that on or about March 3, 1998, movant caused an investment account application and related material to be sent by U.S. Mail from "National Finance Center, Inc." in Sausalito, California to an investor at "15 Lookout Ct., Sacramento, CA."

On December 18, 1998, the government filed a superseding indictment, alleging seventeen counts of mail fraud against movant under 18 U.S.C. § 1341.*fn1 The government alleged the time frame of the fraud was August 1996 to August 28, 1998. The alleged fraud consisted of movant's causing noteholders to place money in his company, the Kentfield Group (hereafter "TKG"), in return for which the noteholders would receive a secured note backed by an "insurance guarantee bond." The government alleged movant negotiated with "a person in Florida" who would, for a fee, provide documents purportedly showing that the TKG notes were guaranteed by insurance performance bonds, which were in turn "guaranteed by re-insurance through Lloyd's of London." The government further charged that movant then made fraudulent representations to individuals that he was able to sell them notes issued by TKG backed by insurance performance bonds that were guaranteed by re-insurance coverage from Lloyd's of London.

Counts 1, 2, and 3 charged movant with the mailing of literature and applications with respect to notes backed by bonds. Counts 4 through 17 charged movant with the mailing of a May 25, 1998 letter to fourteen specifically identified noteholders assuring the investors that despite the indictment of movant, their investment in TKG was safe. This letter was referred to during trial (and hereafter) as the May 25, 1998 "lulling letter." See, e.g., RT 19.

The first attorney retained by movant, Paul Meltzer, was allowed to withdraw his representation on March 10, 1999, and attorney Donald Schwartz was substituted as counsel on March 16, 1999. In April 1999, attorney Dwight Samuel was substituted for Donald Schwartz; Samuel represented movant through trial.

On January 29, 2002, following a seven-day trial, a jury found the movant guilty of fifteen counts of mail fraud; the jury was not able to reach a verdict on counts one or three. RT 1769-1774. The district judge sentenced the movant to 108 months in prison on December 20, 2002.

In the § 2255 motion before this court, movant sets out two grounds for relief: (1) ineffective assistance of trial counsel based on four specific alleged deficiencies; and (2) trial counsel's cumulative error resulting in denial of movant's Sixth Amendment right to effective assistance of counsel. To allow full development of the factual grounds for his motion, movant waived his attorney-client privilege and Samuel was deposed on December 17, 2004.

II. Analysis of Ground One: Ineffective Assistance of Counsel

Movant alleges he received ineffective assistance from trial counsel in four specific areas: (1) counsel's failure to oppose the government's introduction of the Capital Preservation Fund (hereafter "CPF") evidence; (2) counsel's failure to develop and present a good faith reliance on counsel defense relating to the May 25, 1998 lulling letter to TKG noteholders; (3) counsel's failure to develop and present evidence that movant attempted to secure a new guarantor for TKG notes; and (4) counsel's failure to adequately prepare and/or utilize defense witnesses.

In examining ineffective assistance of counsel claims, the court employs the familiar two-step Strickland analysis. Strickland v. Washington, 466 U.S. 668 (1984). With respect to the first step, a petitioner must carry the burden to demonstrate that his counsel's performance was so deficient that it "fell below an objective standard of reasonableness." Id. at 688. The assessment must be made "from the counsel's perspective at the time," so as "to eliminate the distorting effects of hindsight." Id. at 689. Further, there is a "strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance," and hence "[j]udicial scrutiny of counsel's performance must be highly deferential." Id.

If petitioner is able to establish his counsel's deficient performance, the court must decide whether that performance resulted in actual prejudice. Id. at 687. The question is whether "there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. A reasonable probability is probability sufficient to undermine confidence in the outcome." Id. at 694. A reviewing court "need not determine whether counsel's performance was deficient before examining the prejudice suffered by the movant as a result of the alleged deficiencies . . . If it is easier to dispose of an ineffectiveness claim on the ground of lack of sufficient prejudice . . . that course should be followed." Pizzuto v. Arave, 280 F.3d 949, 955 (9th Cir. 2002) (quoting Strickland, 466 U.S. at 697). While individual deficiencies may not by themselves meet the prejudice standard set out by Strickland, the Ninth Circuit has held that deficiencies may, when considered cumulatively, constitute sufficient prejudice to justify granting collateral relief. See Harris v. Wood, 64 F.3d 1432, 1438-39 (9th Cir. 1995).

A. Failure to Oppose the Introduction of CPF Evidence

On December 26, 2001, the government filed a motion seeking permission to introduce the CPF evidence at trial. In that motion, the government proffered the following facts to support the admission of the evidence:

(1) the TKG investment fraud scheme devised by defendant involved promissory notes, on their face paying between 10 and 12 percent interest annually;

(2) defendant represented to TKG investors that the principal and interest on the notes were guaranteed by an entity called Berkston Insurance, an entity said to be "wholly reinsured by Lloyd's of London as Surety;"

(3) in 1995 and 1996, immediately prior to incorporating TKG in early 1997, defendant managed CPF, which also solicited money from investors;

(4) defendant made representations, as with the TKG notes, that CPF investments were fully backed performance bonds or guarantees (including references to Berkston Insurance and Lloyd's of London);

(5) an early TKG investor received a letter from defendant welcoming her to "The Capital Preservation Fund;"

(6) TKG financial records would show that defendant used TKG investor funds to make payments to CPF investors and ...

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