GORDAN v. UNITED STATES OF AMERICA

Filing 27

MEMORANDUM OPINION FILED. Signed by Chief Judge Jerome B. Simandle on 5/30/14. (js)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

ROBERT P. GORDON

HON. JEROME B. SIMANDLE

Petitioner,

Civil No. 10-5065 (JBS)
Criminal No. 05-698 (JBS)

v.
UNITED STATES OF AMERICA,

MEMORANDUM OPINION

Respondent.

SIMANDLE, Chief Judge:
Petitioner Robert P. Gordon was convicted by a jury upon
both counts of a superseding indictment in 2007.

Count One

alleged that Gordon and four co-defendants conspired among
themselves and with others to manipulate the share price and
illegally convert restricted shares to free-trading shares of
stocks issued by Gordon's company, TeleServices Internet Group,
Inc. [TSIG] and its predecessors and related companies, in a
conspiracy to commit securities fraud and wire fraud in violation
of 18 U.S.C. § 371.

Count Two alleged that the defendants

conspired among themselves and with others to launder the money
that such fraudulent stock transactions produced, in an effort to
hide the fact that it had come from the underlying fraud, that
is, conspiracy to commit money laundering in violation of 18
U.S.C. § 1956(h).

The co-defendants entered pleas of guilty.

Gordon went to trial and was convicted by a jury.

Gordon was

sentenced to concurrent terms of imprisonment of 60 months and
240 months on Counts One and Two respectively, and he was ordered
to pay restitution of $11,620,179.90 to the numerous victims of
his stock fraud scheme.1
This matter is before the Court following an evidentiary
hearing regarding Petitioner Robert P. Gordon's application for
habeas corpus relief vacating his conviction and sentence under
28 U.S.C. § 2255.

Specifically, the court convened the

evidentiary hearing to determine whether Petitioner's trial and
appellate counsel were deficient and whether this deficiency
caused actual prejudice to Petitioner.

THE COURT FINDS AS

FOLLOWS:
1.

On December 19, 2011, the Court granted in part and

denied in part the Government’s motion to dismiss Mr. Gordon’s
Amended Petition to vacate his conviction and sentence pursuant
to 28 U.S.C. § 2255, and granted in part Petitioner’s motion for
an evidentiary hearing.

[Docket Items 16 & 17.]

The Court

granted the motion to dismiss as to Petitioner’s Grounds 2, 3 and
4 of the Amended Petition but denied the motion as to Grounds 1
and 5 of the Amended Petition; the Court concluded that Grounds 1
and 5 (involving claims of ineffective assistance of counsel)

1

The Court also found that Gordon had committed perjury in
his testimony at trial, which was an obstruction of justice for
sentencing purposes under U.S.S.G. § 3C1.1. His recommended
Sentencing Guideline range was determined by offense level 37 and
criminal history category II, or 235 to 293 months.
2

presented material disputes of fact regarding the conduct of
Petitioner’s trial and appellate attorneys.

The Court therefore

granted Petitioner’s motion for an evidentiary hearing as to
those two remaining grounds at which the Court would take
testimony of the Petitioner himself, Petitioner’s trial attorney,
Frank Louderback, Esq., and Petitioner’s sentencing and appellate
attorney, Richard F. Klineburger, III, Esq.
2.

In addition to the three witnesses identified by the

Court as necessary prior to the hearing (Louderback, Klineburger
and Petitioner Gordon), the Court also took testimony from two
additional witnesses, Burt Wiand, Esq., and James Gordon.

The

Court determined during the hearing that these witnesses would be
helpful in resolving the disputes of fact identified by the Court
in its December 19, 2011 Opinion and Order.
3.

The Court concludes, after hearing the testimony of

these five witnesses and reviewing the record of the underlying
convictions, that Petitioner has failed to satisfy the Strickland
test.

Therefore, Petitioner's claims for ineffective assistance

of counsel will be denied and the Court will consequently deny
Petitioner’s motion to vacate his conviction and sentence.
4. In Strickland v. Washington, 466 U.S. 668 (1984), the
Supreme Court established a two-part test for analyzing claims of
ineffective assistance of counsel.

First, a petitioner must show

that counsel’s performance “fell below an objective standard of

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reasonableness,” and, second, that counsel’s ineffectiveness was
prejudicial.

Id. at 688, 692.

In order to satisfy the

“prejudice” component of the Strickland test, a petitioner must
show that a reasonable probability exists that “but for counsel’s
unprofessional errors, the result of the proceeding would have
been different.”

Id. at 694.

When applying this test the

Supreme Court noted that either the performance or the prejudice
prongs of Strickland may be addressed first.

In fact, the

Supreme Court recommends beginning the analysis with whichever
prong is easiest to satisfy or dispose of.

Id. 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.”

Id.

5. Petitioner's main argument supporting his ineffective
assistance of counsel claim is that his trial attorney failed to
subpoena witnesses, in particular, expert witnesses, to refute
the government's case.

Petitioner argues that if his attorney

retained an expert witness to testify about the regulations of
the Securities and Exchange Commission ("SEC"), the government
would not have been able to meet its burden of proof.

Petitioner

testified that he urged his trial counsel to contact his former
attorney from a civil matter, Burt Wiand, to serve as an expert
witness in the case and his trial counsel never followed up with
the contact.

Petitioner stated that he was unaware his trial

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counsel had failed to obtain Burt Wiand as an expert until trial.
6.

Mr. Louderback testified credibly that Mr. Gordon

determined that he would testify and that he would be the sole
witness for the defense, other than evidence obtained by crossexamination of the government's expert witness and the
cooperating witnesses at trial.
trial.

Indeed, this is what occurred at

Appellate attorney Klineburger confirmed in his testimony

that Gordon told him he felt confident at trial and didn’t need
to call witnesses.

Mr. Louderback also testified that he did not

perceive the need for an expert witness and that Petitioner
lacked the financial resources to obtain an expert witness.

Mr.

Louderback testified regarding Petitioner's professed inability
to pay his attorney fees;2 consequently, Mr. Louderback
determined that Petitioner did not have the financial resources
to pay for witness transportation or retention of an expert. Mr.
Louderback also testified that he did reach out to some of the
witnesses Petitioner suggested and that several witnesses refused
to speak with him (such as Paul Henry and his attorney) or were
cooperating with the government and would have been unhelpful.
One potential witness, Chen Feng, was in China and Defendant

2

Mr. Louderback agreed to represent Gordon under a retainer
agreement of $150,000 plus travel expenses and witness costs, of
which he initially paid Louderback only $20,000. The remainder
was to be paid within two to three months but was never paid.
Neither Gordon nor his family advanced the retainer fees and
Louderback traveled and stayed in New Jersey for the four week
trial without reimbursement, according to Louderback’s testimony.
5

didn't provide Louderback with any means to contact him or to
bring him to trial.
7.

Petitioner testified that his family was willing to

assist in paying the expenses related to witnesses and experts.
In particular, Burt Wiand, Petitioner's counsel from Tampa,
Florida, who defended Gordon in a prior civil case by one of the
victims of this criminal scheme, says he would have agreed to
serve as Petitioner's expert on SEC regulations free of charge.
Burt Wiand verified this statement during his own testimony where
he described reaching out to Mr. Louderback by leaving a phone
message on one occasion asking Louderback to call him and
receiving no response.

James Gordon, Petitioner's brother, also

testified to the family's alleged willingness to pay the expenses
associated with witness travel and lodging.3

There is no

evidence, however, that Mr. Wiand, Mr. Gordon's family, or Mr.

3

James Gordon had previously sued Robert Gordon for his
losses in the TSIG investments, as James was among the numerous
victims of that scheme. Although James denied being estranged
from Robert by the time of trial, he also never attended the
trial. James Gordon also gave a statement to the FBI that he
knew that Robert Gordon had manipulated stock at Phoenix
Information Systems, in which Robert made “millions” while James
lost his investment of $750,000 when the company went bankrupt.
(Gov’t Ex. C.) James Gordon’s statement to the FBI also alleged
that Robert Gordon and others were involved in illegal stock
deals at TSIG, in which James was also an investor, and that he
had called the FBI in Florida to report these TSIG manipulations.
Id. Contrary to Robert Gordon’s claims in this § 2255 motion, it
is inconceivable that James Gordon would have had testimony
helpful to Robert Gordon if he had been called to testify at his
trial.
6

Gordon himself raised any objection with Mr. Louderback during
trial regarding the decision not to retain an expert witness.
8.

Mr. Wiand never told Mr. Louderback that he would

testify as an expert in securities regulation for free, nor did
Wiand even speak to Louderback4 about the case; at most,
Louderback left one unreturned phone message for Louderback.
Indeed, there is a tension between Mr. Wiand's position that he
would have served as an expert in this trial a thousand miles
from his office for free but that his retainer fee as an attorney
to defend Respondent in this trial would have been $50,000 to
$100,000 for an "initial payment," according to Mr. Wiand's
testimony.

Mr. Wiand testified that he was able to be an expert

because this was separate from the billing rate at his firm and
he could personally waive any fee associated with this service,
but his willingness to do so was not confirmed in any
contemporaneous writing.

In any event, in connection with his

appearance before this Court, Mr. Wiand did not attend for free.
Mr. Wiand was reimbursed for his expenses of testimony and
preparation for the § 2255 hearing.

This is also inconsistent

with his alleged offer to be an actual trial expert witness for

4

Indeed, it is not clear that Mr. Wiand even spoke to
Petitioner Gordon about being a trial resource. Wiand testified
he principally spoke with Respondent’s brother, James Gordon, and
that he didn’t know where Petitioner was. He assumed Robert
Gordon was embarrassed to speak to him, and he didn’t have
contact information for Gordon.
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free.

Petitioner Gordon testified that he understood Mr. Wiand's

fee for legal representation would come to $200,000 to $250,000,
which he said he could not afford even with family assistance.
9.

It is apparent that Mr. Louderback did not know of Mr.

Wiand’s alleged availability to testify for free as a securities
law expert.

Mr. Louderback testified credibly that Gordon never

suggested retaining an expert witness, nor did Gordon suggest
Burt Wiand to Louderback as an expert witness.

Gordon's

testimony that he told Louderback that the theory of defense for
this case would be found in Wiand's file from the Lemon v.
Kirchoff case is not credible - Gordon met frequently with
Louderback in pretrial preparations in St. Petersburg and could
easily have retrieved Wiand's file, also in the area in Florida,
if Gordon thought it would be so useful, but he did not do so.
10.

Gordon and Louderback discussed some possible witnesses

before trial, but Gordon's testimony that he gave a witness list
to attorney Louderback, which Louderback denies, is incredible.
Gordon testified he made a copy of the alleged witness list and
retained it, but he has never produced it and speculates it is in
storage in his brother's house.

His brother James Gordon

testified on cross-examination that he has never seen the alleged
list of names of potential witnesses.5

5

The best evidence of the

On cross-examination, Petitioner Gordon elaborated that
there were actually three lists of witnesses - an original list
of 15 witnesses that he expanded to 34 names and then to 54
8

contents of a writing is the document itself, and Gordon's
failure to produce his copy of the document - assuming it ever
existed - precludes his testifying as to its contents.
Petitioner also stated - falsely, in the Court's view - that he
spoke to Louderback only 6 or 7 times in the fourteen months
leading to trial.

Petitioner later acknowledged in cross-

examination, that he and Louderback met 5-6 times in just the
first two weeks and then once every second or third week for the
next fourteen months of trial preparation.

Moreover, Burt

Wiand’s potential to testify as a trial witness was not conveyed
or considered in a serious manner.6

Trial counsel is not

required to be clairvoyant.

names. None of these lists, whether original or copy, has
surfaced. The Court strongly doubts that any such written
witness list was provided by Robert Gordon to Louderback.
6

For several reasons, it appears that Mr. Wiand’s offer to
testify as a free trial expert was not taken seriously. Mr.
Wiand had not reviewed the charges in detail nor did he testify
he had reviewed the trial record, nor has he prepared a written
summary of what his expert testimony would have been. In his
testimony he first says he offered to be available as a
“resource,” and later he testified he offered to serve as an
expert witness, with no discussion of fees. He also stated that
he has in fact never served as an expert in a criminal defense.
It appears that, during the trial preparation phase, Mr. Wiand
told Gordon he was available as a free resource. It seems
implausible he was seriously offering to be a trial expert in
this multi-faceted case for free, but more likely, in the Court's
view, that he was available to consult with Mr. Louderback if
requested, based on his general knowledge of the Lemon v.
Kirchner case. He never conveyed his availability to Louderback
in person or in writing, nor did he supply his file to Gordon to
give to Louderback, nor did he send his file directly to
Louderback.
9

11.

Overall, after several dozen meetings between

Louderback and Defendant Gordon, the defense was in agreement
that the trial strategy would be to demonstrate that there was no
conspiracy, and that the alleged co-conspirators were acting
independently of one another and turned on each other.

The

strategy was further to establish that the many cooperating coconspirators were unworthy of belief because their hopes for
reduced sentences tainted their testimony.

Gordon would explain

to the jury, among other things, that his sale of the restricted
stock did not violate U.S. securities law.

Gordon, a veteran of

Wall Street and the financial markets throughout his career, saw
himself as knowledgeable about SEC regulations and applicable
filing requirements, according to his recent testimony on crossexamination.

Gordon’s testimony at trial reflected a failed

strategy that Gordon himself was a victim of fraud.

Gordon's

vivid testimony at trial also attempted to "sell" the jury on his
version of events and the jury evidently found Gordon incredible.
According to Louderback, whom this Court again finds credible,
"Gordon insisted upon this defense and it was the substance of
his testimony."

(Louderback Aff. ¶ 17.)

testified and his testimony is credible.

Mr. Louderback so
Such a strategy is

reasonable; that it did not succeed in raising reasonable doubt
does not render it incompetent.

Defendant simply could not

explain away his own many and varied incriminating acts in the

10

schemes charged in the indictment, nor could he undermine the
many witnesses who testified against him.

See Strickland, 466

U.S. at 689 ("It is all too tempting for a defendant to
second-guess counsel's assistance after conviction or adverse
sentence, and it is all too easy for a court, examining counsel's
defense after it has proved unsuccessful, to conclude that a
particular act or omission of counsel's was unreasonable . . . .
[A] court must indulge a strong presumption that counsel's
conduct falls within the wide range of reasonable professional
assistance; that is, the defendant must overcome the presumption
that, under the circumstances, the challenged action might be
considered sound trial strategy."); Marshall v. Cathel, 428 F.3d
452, 462-63 (3d Cir. 2005) ("Where an attorney's actions are the
result of 'strategic choices' this presumption of reasonableness
. . . is essentially irrebuttable.").
12.

Petitioner presented insufficient and implausible

testimony to support his argument on how Mr. Louderback was
deficient as trial counsel.

The Court finds that Mr.

Louderback’s trial strategy fell within the wide range of
reasonable professional assistance.
13.

Petitioner has also failed to satisfy his burden to

show that a reasonable probability exists that “but for counsel’s
unprofessional errors, the result of the proceeding would have
been different.”

Strickland, 466 U.S. at 694.

11

Plaintiff has

likewise failed to satisfy the second Strickland prong of
demonstrating that counsel’s ineffectiveness was prejudicial.
Id.
14.

In this case, the government's proofs against

Petitioner were exceptionally strong and did not solely rely on
expert testimony.

Rather, the government produced a multitude of

evidence showing Petitioner bribed co-conspirator stock brokers
to make unauthorized purchases of stock, concealed these
unauthorized purchases in off-shore shell corporations and
entered into multiple fraudulent consulting agreements with coconspirators to conceal his sales of restricted stock.
government proved four different schemes at trial.

The

Over the

course of four weeks of trial, the government presented roughly
500 exhibits and 18 witnesses of whom 6 were co-conspirators.
The government offered proof of multiple instances of stock fraud
and money laundering through off-shore corporations and the
testimony of eyewitnesses and documentary exhibits put Gordon
squarely into the middle of the scheme.

His accounts were

enriched by over $7 million dollars from sales of TSIG stock
while he and his co-conspirators caused over 100 victim investors
to lose over $11 million on their investments occasioned by the
fraud.

Gordon's own far-fetched and perjurious trial testimony

deserved little weight.

The government's damning testimony and

documentation came into evidence through cooperating witnesses

12

having first hand knowledge of Mr. Gordon's guilt.

Even with

Burt Wiand's testimony, the court cannot conclude that there is
any reasonable probability the result would have been different
because the government's proofs at trial were overwhelming.
15.

Rather than attempting to summarize the overwhelming

strength of the testimony and documentary evidence offered by the
government at this four-week trial, the Court will make reference
to the comprehensive closing statement amply addressing these
proofs on April 5, 2007.
150:7-158:13.)

(See Tr. 4/5/07 at 101:22-133:18 and

Petitioner has not demonstrated how the outcome

on either count would probably have been different but for the
alleged failings of his trial counsel.
16.
counsel,

Petitioner also argued in his motion that his appellate
Richard F. Klineburger, III, was ineffective for

failing to notify him of the decision of the Third Circuit panel
affirming his conviction.7

Petitioner alleged this caused him to

miss his deadline to file a petition for certiorari to the United
States Supreme Court.

Petitioner testified that he never

received notice of the denial from Mr. Klineburger.
17.

Mr. Klineburger testified at the hearing that he sent

the denial notice to Petitioner's brother-in-law, Bob Breakstone,
with Petitioner's permission.

Petitioner acknowledged that he

7

Mr. Klineburger also represented Petitioner Gordon at his
sentencing but there are no allegations he was ineffective at
sentencing.
13

knew of the denial of his appeal by October 9, 2009, at the
latest, as stated in his brother-in-law's email to Klineburger of
that date (Ex. E), and he admitted on cross-examination that the
time to seek certiorari to the Supreme Court did not expire until
October 26, 2009.

Petitioner did not present any further

evidence to support his ineffective assistance of counsel claim
against Mr. Klineburger.
18.

At the evidentiary hearing, Petitioner did not deny

that he instructed Mr. Klineburger to forward the documents
regarding the denial of his appeal to his brother-in-law nor did
Petitioner deny that he authorized his brother-in-law to receive
documents on his behalf.

Indeed, Petitioner conceded on cross-

examination that he authorized Klineburger to communicate on his
behalf with his brother-in-law, Bob Breakstone.

Petitioner also

presented no evidence showing his brother-in-law had not received
the requested documents.

The Court believes Mr. Klineburger.

The Court finds that Mr. Klineburger gave timely notification to
Petitioner's brother-in-law, Bob Breakstone, who was the person
designated by Petitioner to receive such communications on his
behalf.

Petitioner has not demonstrated that Klineburger's

performance as appellate counsel was deficient.

Petitioner quite

plainly has attempted to fabricate a claim of ineffectiveness
against Mr. Klineburger.
19.

Mr. Klineburger also testified to an attempt by

14

Petitioner Gordon to work a fraud upon the court.

He testified

that Gordon wanted Klineburger to obtain free transcripts under
the Criminal Justice Act by declaring himself to be in forma
pauperis.

Klineburger refused to make such an application for

free trial transcripts for purposes of appeal because he believed
it would be a fraud on the court, given Gordon’s access to
sufficient assets to afford transcripts.

(Such assets included a

retainer fee for sentencing and appeal paid to Klineburger in the
amount of approximately $50,000.)

Gordon’s willingness to lie to

the jury during trial and to propose to lie about his financial
assets post-trial are several reasons undermining Gordon’s
credibility in this § 2255 motion.
20.

However, even if Petitioner had shown Mr. Klineburger

did fail to notify him of his appeal's denial, this would not be
sufficient to support a claim for ineffective assistance of
appellate counsel.

Review by the Supreme Court is discretionary

and a defendant has no right to counsel to pursue discretionary
review.

Wainwright v. Toma, 455 U.S. 586, 587-88 (1982).

Consequently, "any alleged neglect on the part of defendant's
attorney in failing to notify defendant when his appeal to the
Third Circuit had been denied would not rise to the level of a
constitutional violation."

United States v. Ferrell, 730 F.

Supp. 1338, 1340 (E.D. Pa. 1989).

See also Darby v. U.S., No.

10-1437, 2010 WL 4387511, *9 (D.N.J. October 28, 2010)(holding

15

failure by appellate counsel to inform defendant of outcome of
appeal is not ineffective assistance of counsel because a
defendant has no constitutional right to counsel for purposes of
seeking Supreme Court review.)
21.

Under the teachings of Strickland, “the ultimate focus

of inquiry must be on the fundamental fairness of the proceeding
whose result is being challenged.”

Strickland, 466 U.S. at 696.

For the above reasons, this Court finds nothing in the record to
demonstrate that the result of the trial and the appeal in this
case was unreliable due to any alleged ineffectiveness of
counsel.
22.

Accordingly, Petitioner has failed to establish his

claims for ineffective assistance of trial counsel and appellate
counsel and his motion to vacate, alter or amend his sentence
will be denied.
23.

Pursuant to 28 U.S.C. § 2253(c)(1)(B), “[u]nless a

circuit justice or judge issues a certificate of appealability,
an appeal may not be taken to the court of appeals from the final
order in a proceeding under section 2255.”

A certificate of

appealability may issue “only if the applicant has made a
substantial showing of the denial of a constitutional right.” §
2253(c)(2).

To satisfy that standard, a petitioner must

demonstrate that “jurists of reason could disagree with the
district court’s resolution of his constitutional claims or that

16

jurists could conclude the issues presented are adequate to
deserve encouragement to proceed further.”
Cockrell, 537 U.S. 322, 327 (2003).

Miller-El v.

Here, jurists of reason

could not disagree with the Court’s resolution of Petitioner’s
constitutional claims. Under the standard recited above, the
Court will deny a certificate of appealability.
The accompanying Order will be entered.

May 30, 2014
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

17