Holmich v. United States of America
OPINION: The Court denies Petitioner Walter Holmich's Section 2255 motion on the merits. Petitioner's Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence by a Person in Federal Custody (d/e 1 ) is DENIED. Becau se Petitioner has not made a substantial showing of the denial of a constitutional right, the Court also denies a certificate of appealability under Rule 11(a) of the Rules Governing Section 2255 Proceedings. See 28 U.S.C. § 2253(c)(2). This case is closed. Entered by Judge Sue E. Myerscough on 9/22/2016. (ME, ilcd)
Thursday, 22 September, 2016 03:06:58 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
UNITED STATES OF AMERICA,
SUE E. MYERSCOUGH, U.S. District Judge.
Petitioner Walter Holmich has filed a Motion Under 28 U.S.C.
§ 2255 to Vacate, Set Aside, or Correct Sentence by a Person in
Federal Custody (d/e 1). Petitioner asserts that his trial counsel
provided ineffective assistance by failing to gather evidence of and
develop the argument that John Stanton, not Petitioner, owned the
companies that were engaged in the fraud and took the lion’s share
of the proceeds of the fraud. Petitioner asserts that, had counsel
done so, the Court would have likely sentenced him to a sentence
at the low end of the sentencing guideline range. Because
Petitioner cannot show that his sentence was affected by the
alleged deficient performance, Petitioner’s Motion is DENIED.
In June 2011, Petitioner and two co-defendants were charged
by indictment with four counts of wire fraud. See United States v.
Holmich, Central District Illinois Case No. 11-30028 (hereinafter,
Case No. 11-30028), Indictment (d/e 1). On May 3, 2012, the jury
was selected, and trial was set to begin on May 9, 2012.
On May 9, 2012, Petitioner entered an open plea of guilty to
all four counts of wire fraud. See Case No. 11-30028, May 9, 2012
Text Order; May 9, 2012 Tr. (d/e 101). The Government outlined
the evidence in the case in support of the factual basis.
Specifically, Petitioner devised a scheme using his companies,
including WH Logistics, Inc. and ISWS, Inc., to obtain government
contracts. May 2012 Tr. at 19. Petitioner’s companies were run
out of Tampa, Florida and operated as government procurement
Once Petitioner’s companies won the government contract,
Petitioner’s employees, co-defendants Ronnie Hawker and Lavada
Lyons, found subcontractors who would provide the product to the
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government. May 2012 Tr. at 19. After the products were
delivered, the governmental entities paid Petitioner’s companies
but Petitioner’s companies did not pay the subcontractors. See Id.
at 20-32. The Government detailed the evidence that would have
been presented at trial regarding ten specific victims. Id. at 20-33.
In all, Petitioner, Lyons, and Hawker caused a loss of more than
$2.5 million dollars through the scheme. Id. at 19. Petitioner
used the money to pay a more than $4,000-a-month mortgage and
to buy various automobiles. Id. Petitioner agreed that he did what
the Government said he did. Id. at 35.
The Probation Office prepared a Revised Presentence
Investigation Report (PSR). Case No. 11-30028 (d/e 87). The PSR
found that the amount of loss totaled over $4.5 million. PSR ¶ 33.
As is relevant to Petitioner’s claim, the PSR noted that
Petitioner became associated with John Stanton in the early
1990s. PSR ¶ 11. Stanton operated numerous companies in the
Tampa, Florida area and Petitioner began working for Stanton at
some unknown time. Id. During the course of Petitioner’s
association with Stanton, Petitioner began operating businesses,
although various individuals stated that Stanton “was the money
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and decision-maker behind the companies.” Id. According to the
PSR, Petitioner and Stanton incorporated ISWS, Inc. on May 3,
2002 and were listed as directors on the Articles of Incorporation.
Petitioner incorporated WH Logistics, Inc., on January 24,
2005 and listed Hawker as the registered agent, Petitioner as the
chief executive officer, and James F. Butterfield as the director. Id.
Butterfield was the company’s maintenance man, and he had no
knowledge he was listed as an officer of the company. Id.
Beginning no later than August 2005, Petitioner and codefendants Hawker and Lyons devised a scheme to defraud
subcontractors throughout the United States of money and
property by means of materially false and fraudulent pretenses,
representations, promises, and material omissions. PSR ¶ 12.
Petitioner, through the companies, obtained a government
contract, secured a subcontractor to fulfill the contract, and then
failed to pay the subcontractor. PSR ¶ 14. To elicit
subcontractors, Petitioner, Hawker, and Lyons provided false
references to the subcontractors. PSR ¶ 13.
The money paid by the government under the contracts to
Petitioner’s companies was quickly transferred out of company
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accounts and moved to Petitioner’s bank account for Victoria
Carriages, an automobile dealership Petitioner operated. PSR
¶ 16. The money was spent on automobiles, mortgage payments,
and other items. Id. However, co-defendant Hawker believed that
Stanton controlled the purse strings of all of Petitioner’s
companies. Id. Petitioner issued company checks to Stanton or
Stanton’s various other companies on a regular basis, placing
Petitioner’s companies in financial distress. Id. This led to
Petitioner’s companies closing due to lack of money. Id. The
Probation Office calculated Petitioner’s advisory guideline range as
108 to 135 months’ imprisonment. PSR ¶ 99.
On November 26, 2012, this Court held the sentencing
hearing. Case No. 11-30028, November 26, 2012 Tr. (d/e 102).
Both co-defendants testified. Lyons testified that she worked for
Petitioner’s companies as a purchasing agent. Petitioner was her
boss “and then he was like [her] dad.” Nov. 2012 Tr. at 14. On
cross-examination by Petitioner’s attorney, Lyons testified that she
thought Petitioner and Stanton were partners. Id. at 20. Lyons
knew that Petitioner owned certain companies and she thought
Stanton owned the company named Valkyrie. Id. She did not
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know the “ins and outs of those companies” and all she knew was
that Petitioner was her boss and Stanton would “come and go as
he please[d].” Id.
Hawker also testified at the sentencing hearing. On crossexamination by Petitioner’s attorney, Hawker testified that at one
point he thought Stanton controlled the purse strings of all of
Petitioner’s companies. Nov. 2012 Tr. at 36. Petitioner told
Hawker that Stanton would turn on the computer, see $100,000,
and ask for a check for $50,000. Id. at 36-37. Hawker noted,
however, that when one looked at all of the contracts to see where
the money went, Hawker believed only $90,000 went to Stanton.
Id. at 37.
Nonetheless, Hawker agreed that he told investigators that
company checks were issued to Stanton or Stanton’s various
companies on a regular basis. When asked whether that put
Petitioner’s various companies in financial distress, Hawker
testified that was what Petitioner told him. Nov. 2012 Tr. at 37.
Two victims of the fraud also testified. Id. 40-44.
The Government asked the Court to sentence Petitioner to
130 months’ imprisonment. The Government argued that
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Petitioner stole from company after company and used the money
to build his Tampa, Florida house, which had a six-car garage, a
pool, and a Koi pond. Nov. 2012 Tr. at 45. Petitioner also drove
fancy cars. Id. at 46. In addition, Petitioner took advantage of
everyone around him, including Hawker and Lyons, and used
them to protect himself. Id. at 45. Finally, the Government
asserted that Petitioner’s actions caused significant harm to the
subcontractor companies that were never paid. Id. at 46.
Petitioner’s counsel argued that the ring leader in the case
was Stanton, not Petitioner. Nov. 2012 Tr. at 48. According to
defense counsel, Petitioner was either an idiot or the puppet of
Stanton because money would come into the business and Stanton
would advise Petitioner where the money would be sent. Defense
counsel argued that Petitioner built the Florida home referenced by
the Government prior to ever meeting Stanton. Id. at 49. Due to
Petitioner’s dealings with Stanton, however, Petitioner took
mortgages out on his own properties and put money into the
businesses, and Stanton then moved the money around. Id.
Defense counsel argued that the reason the subcontractors did not
get their money was not due solely to Petitioner but because
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Stanton was in charge of the purse strings. Id. at 50. According
to counsel, Petitioner was “the first and largest debtor to Mr.
Stanton in terms of the original victim of this case.” Id. at 51.
Defense counsel asked for a sentence of 120 months’
During his allocution, Petitioner stated that the reason he
was there was because of Stanton. Nov. 2012 Tr. at 53.
The Court sentenced Petitioner to 130 months’ imprisonment,
stressing the need for the sentence to reflect the seriousness of the
offense. Nov. 2012 Tr. at 54. The Court noted that the small
businesses that were victims of Petitioner’s crimes suffered greatly
as a result of Petitioner’s acts. The Court also stated:
Quite frankly, Mr. Holmich, I’m tempted to depart
upwards in this case. But you have cooperated. And
the government has not recommended that I do so. But
you operated these companies on the backs of your
employees who depended on you. You’ve heard how
they felt, how betrayed they have been.
In addition, I find that you actually continued on
your crime spree after you were released.
The Government advised the Court that Stanton was awaiting a federal trial
in Tampa, Florida on income tax evasion charges. Tr. 52. Stanton has since
been convicted and sentenced to 10 years in prison. See Gov’t Resp. at 7 (d/e
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Nonetheless, you have no criminal history. You’ve
taken responsibility. You’re 68, married, and a Vietnam
veteran who suffers from PTSD, high blood pressure,
high cholesterol and Type II diabetes. Your medical
issues appear to be under control at this time and will
certainly be treated in Bureau of Prisons.
Nov. 2012 Tr. at 55. The Court did not mention the arguments
pertaining to Stanton’s role in the offense.
Petitioner appealed, but his appointed counsel on appeal—
who was not Petitioner’s trial counsel—asserted that any appeal
would be frivolous and moved to withdraw under Anders v.
California, 386 U.S. 738 (1967). See United States v. Holmich, 563
F. App’x 483 (7th Cir. 2014). One of the potential challenges
considered by the Seventh Circuit was whether Petitioner could
challenge the reasonableness of his sentence in light of the district
court’s failure to comment on Petitioner’s mitigating argument that
Stanton was the true mastermind behind the fraudulent scheme.
Id. at 485. The Seventh Circuit agreed with counsel, however, that
“any such challenge would be doomed” because the district court,
when discussing the sentencing factors, emphasized the
seriousness of the offense, Petitioner’s history and characteristics,
and the absence of any criminal history. Id. The Seventh Circuit
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found that Petitioner’s argument about his culpability relative to
Stanton’s was undeveloped, as counsel did not submit a
sentencing memorandum and counsel’s comments at the hearing
failed to specify how Petitioner was less culpable or why any lesser
culpability merited a more lenient sentence. Id. The Seventh
Circuit concluded that the district court “thoroughly explained the
sentence and meaningfully considered the § 3553(a) factors and so
the sentence is procedurally reasonable even though the court
passed over [Petitioner’s] undeveloped mitigating argument.” Id.
II. PETITIONER’S MOTION
Focusing on the language in the Seventh’s Circuit’s opinion,
Petitioner now claims that defense counsel was ineffective for
failing to develop the sentencing argument that Stanton was the
more culpable individual, that Stanton owned the companies
engaged in the fraud, and that Stanton took the lion’s share of the
money. Petitioner argues that had his attorney secured the
banking records, those records would have shown that, as soon as
a payment came in from the government, the vast majority of the
money was transferred to Stanton’s accounts, to which Petitioner
did not have access. Petitioner also asserts that his attorney
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should have submitted proof that Petitioner constructed his home
in 2002, later mortgaged his home, and deposited the proceeds of
the loan into the accounts of Stanton-operated companies.
Petitioner claims the bank statements, which were turned over to
the Government and never returned, would show the large
withdrawals or transfers from Stanton-owned companies to
unrelated entities controlled by Stanton.
Petitioner admits that he lied to the victims, took the
remaining money Stanton left in the company coffers, and
perpetuated the fraud orchestrated by Stanton. He argues,
however, that if the Court had known of Stanton’s role, the Court
would have sentenced Petitioner to the low end of the guideline
range. Petitioner requests some limited discovery to secure the
evidence he references. Petitioner also asks for an evidentiary
The Court finds that neither discovery nor an evidentiary
hearing are necessary. As discussed below, even if the documents
Petitioner seeks show what he purports them to show, Petitioner
cannot demonstrate any prejudice. Moreover, a hearing is not
required because “the motion, files, and records of the case
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conclusively show that the prisoner is entitled to no relief.”
Hutchings v. United States, 618 F.3d 693, 699-700 (7th Cir. 2010)
A person convicted of a federal crime may move to vacate, set
aside, or correct his sentence pursuant to 28 U.S.C. § 2255. Relief
under Section 2555 is an extraordinary remedy because a Section
2255 petitioner has already had “an opportunity for full process.”
Almonacid v. United States, 476 F.3d 518, 521 (7th Cir. 2007).
Post-conviction relief under Section 2255 is therefore “appropriate
only for an error of law that is jurisdictional, constitutional, or
constitutes a fundamental defect which inherently results in a
complete miscarriage of justice.” Harris v. United States, 366 F.3d
593, 594 (7th Cir. 2004) (quotation omitted). In considering a
Section 2255 motion, the Court reviews the evidence and
inferences drawn from the evidence in the light most favorable to
the Government. Carnine v. United States, 974 F.3d 924, 928 (7th
To succeed on a claim of ineffective assistance, a Section
2255 petitioner must show: (1) that his attorney’s performance fell
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below an objective standard of reasonableness; and (2) that he
suffered prejudice as a result. Wyatt v. United States, 574 F.3d
455, 457-58 (7th Cir. 2009) (citing Strickland v. Washington, 466
U.S. 668, 687-88 (1984)). The first prong is known as the
“performance” prong, and the second is known as the “prejudice”
Failure to prove either prong is fatal to a claim of ineffective
assistance. Chichakly v. United States, 926 F.2d 624, 630 (7th
Cir. 1991); see also Strickland, 466 U.S. at 697 (“If it is easier to
dispose of an ineffectiveness claim on the ground of lack of
sufficient prejudice … that course should be followed.”). To satisfy
the prejudice prong, a petitioner must show “that there is a
reasonable probability that, but for counsel’s unprofessional
errors, the result of the proceeding would have been different.”
Strickland, 466 U.S. at 694; see also Gentry v. Sevier, 597 F.3d
838, 851 (7th Cir. 2010). A reasonable probability is a “probability
sufficient to undermine confidence in the outcome.” Strickland,
466 U.S. at 694.
Here, no reasonable probability exists that the result of
Petitioner’s sentencing would have been different had Petitioner’s
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counsel further developed the evidence regarding Stanton. As the
recitation of the facts cited above shows, the Court was apprised of
Petitioner’s contention that Stanton was the mastermind behind
the scheme. The PSR included such information about Stanton.
Both Lyons and Hawker testified about Stanton’s purported role in
the offense. Defense counsel argued that Stanton was the
mastermind and the one who benefited the most from the scheme.
Courts generally decline to find prejudice in a trial counsel’s
failure to argue certain evidence in mitigation when the evidence
was before the sentencing court. See, e.g., United States v. Smith,
No. 13 C 7709, 2014 WL 2459671, at *7 (N.D. Ill. 2014) (finding
the details of the defendant’s mental health history were included
in the PSR and, while the judge did not mention the defendant’s
mental health, she was clearly aware because she recommended to
BOP that the defendant receive mental health counseling). The
evidence was before the Court even though the Seventh Circuit
described defense counsel’s arguments as undeveloped.
Perhaps this Court should have commented on the mitigation
argument and specifically indicated the weight given thereto.
Nonetheless, as the sentencing transcript makes clear, the Court
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specifically considered imposing an above-guideline sentence but
chose to impose 130 months’ imprisonment based on the
seriousness of the offenses, the harm to the small businesses who
were victims of the crime, Petitioner’s betrayal of his employees,
and Petitioner’s continuation of the crime spree following his
pretrial release. The Court also took into consideration the
mitigating factors that Petitioner had no criminal history, took
responsible for his crimes, was 68 years old, was married, and was
a Vietnam veteran who suffered from PTSD. Tr. 54-55. No
reasonable probability exists that additional, specific evidence
regarding Stanton’s role in the offense would have resulted in a
reduced sentence in this case.
In fact, even if defense counsel had more fully developed the
argument that Stanton was the true mastermind and beneficiary of
the fraud, this Court would still have imposed the same sentence.
The evidence to which Petitioner refers does not alter the
evidentiary picture that was in front of this Court at sentencing
and does not undermine the fairness or integrity of Petitioner’s
sentence. See, e.g., Johnson v. United States, No. 11-CV-580NJR, 2016 WL 1394232, *10 (S.D. Ill. Apr. 4, 2016) (finding that
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the new evidence submitted during the habeas proceedings was
not significantly different from what was before the sentencing
judge and, given the sentencing judge’s comments at sentencing,
was unlikely to have “tipped the scales” in the petitioner’s favor
and resulted in a lesser sentence), appeal filed. The Court was
well-aware that Petitioner claimed that Stanton was purportedly
the mastermind, controlled the purse strings, and benefitted more
greatly from the fraud. The Court imposed the sentence it deemed
appropriate given all of the circumstances.
In sum, Petitioner does not satisfy the prejudice prong
required for the claim of ineffective assistance in his Section 2255
motion to proceed. The briefing and record conclusively establish
that Petitioner did not suffer prejudice from his attorney’s alleged
ineffectiveness, and no evidentiary hearing is warranted.
For the reasons above, the Court denies Petitioner Walter
Holmich’s Section 2255 motion on the merits. Petitioner’s Motion
Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence
by a Person in Federal Custody (d/e 1) is DENIED.
Because Petitioner has not made a substantial showing of the
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denial of a constitutional right, the Court also denies a certificate
of appealability under Rule 11(a) of the Rules Governing Section
2255 Proceedings. See 28 U.S.C. § 2253(c)(2).
This case is closed.
ENTER: September 22, 2016
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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