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United States v. Williams

United States District Court, D. Arizona

March 5, 2019

United States of America, Plaintiff,
v.
Guy Andrew Williams, Defendant/Movant.

          REPORT AND RECOMMENDATION

          HONORABLE DEBORAH M. FINE, UNITED STATES MAGISTRATE JUDGE

         TO THE HONORABLE ROSLYN O. SILVER, SENIOR U.S. DISTRICT 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.[1]

         I. PROCEDURAL HISTORY

         A. The 2255 Motion

         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.

         B. The Trial and Appeals

         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.).)

         II. ISSUES RAISED IN THE § 2255 MOTION

         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[2], and (2) engage an expert witness to rebut the government's accounting expert. Movant alleges that both his trial and appellate counsel were ineffective for failing to argue in a Rule 29 or Rule 33 motion that (3) Movant's conviction was not supported by sufficient evidence and/or was contrary to the evidence, and that (4) comments made by the prosecutor during rebuttal closing argument violated Movant's Fifth Amendment rights. (Doc. 1 at 2-3.) Movant further asserts that trial counsel was ineffective for not taking other actions, such as objecting and moving for a mistrial, regarding the prosecutor's rebuttal closing. (Doc. 1 at 29.)[3]

         III. ANALYSIS

         A. § 2255 Legal Standard

         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).

         B. Ineffective Assistance Of Counsel

         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, ...


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