SHAPIRO v. UNITED STATES OF AMERICA

Filing 34

OPINION. Signed by Judge Susan D. Wigenton on 3/6/17. (DD, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
NEVIN KAREY SHAPIRO,

Civil Action No. 14-1316 (SDW)

Petitioner,
v.

OPINION

UNITED STATES OF AMERICA,
Respondent.

WIGENTON, District Judge:
Presently before the Court is the motion of Nevin Karey Shapiro (“Petitioner”) to vacate,
set aside, or correct his sentence brought pursuant to 28 U.S.C. § 2255. (ECF Nos. 1, 10).
Following this Court’s Order to Answer (ECF No. 11), the Government timely filed a response to
the motion. (ECF No. 12). Although Petitioner sought, and received, numerous extensions of
time, Petitioner failed to file a reply brief. (See ECF Nos. 13-16, 19, 21-25, 27-28, 30-33). For
the following reasons, this Court will deny Petitioner’s motion and deny him a certificate of
appealability.

I. BACKGROUND
As the Third Circuit explained in its opinion affirming Petitioner’s sentence on direct
appeal, Petitioner’s conviction arises out of a
Ponzi-type scheme between 2005 and 2009, in which he raised over
$930,000,000 from investors throughout the United States. As a
result [of Petitioner’s Ponzi scheme], over 60 investors lost more
than $82,000,000 in investments. [Petitioner], a compulsive
gambler, spent lavishly during this time and racked up $9,000,000
in gambling debts. To fund a life as a high-roller, [Petitioner] stole
more than $35,000,000 from the investments he solicited.

1

On July 14, 2010, [Petitioner] was indicted on two counts of
money laundering, two counts of wire fraud, one count of securities
fraud, and one count of conspiracy to commit securities and wire
fraud. Pursuant to a plea agreement, on September 15, 2010,
[Petitioner] pleaded guilty to one count of money laundering in
violation of 18 U.S.C. § 1957 and one count of securities fraud in
violation of 15 U.S.C. §§ 78j(b) and 78ff(a).
United States v. Shapiro, 505 F. App’x 131, 131 (2012).
Pursuant to the agreement, Petitioner agreed to plead guilty to these two charges in
exchange for the dismissal of the remaining counts of his indictment. (Docket No. 10-471 at ECF
No. 18 at 1). The plea agreement Petitioner signed explained that he was subject to a statutory
maximum sentence of 20 years for the securities fraud and 10 years for the money laundering
charge, accompanied by appropriate fines, and that his sentence would be “within the sole
discretion of the sentencing judge, subject to the provisions of the Sentencing Reform Act . . . and
the sentencing judge’s consideration of the United States Sentencing Guidelines . . . [which are]
advisory, not mandatory.” (Id. at 2). The agreement further provided that the Government made
no recommendation or representation as to what guideline range the sentencing judge would find
or as to what sentence Petitioner would ultimately receive. (Id.). Thus, although the parties agreed
to certain stipulations as to the Guidelines to which each would waive their right to challenge were
the Court to accept those stipulations, the agreement explicitly provided that the agreement “cannot
and does not bind the sentencing judge, who may make independent factual findings and may
reject any or all of the stipulations entered into by the parties.” (Id. at 3). Pursuant to these
guidelines stipulations, the parties agreed to waive their appellate and collateral challenge rights
in the event that the Court sentenced Petitioner to a sentence within the range applicable to a total
Guidelines offense level of 35. (Id. at 9).

2

This Court conducted Petitioner’s guilty plea hearing on September 15, 2010. (Docket No.
10-471 at ECF No. 19). During that hearing, this Court engaged with Petitioner in an extended
colloquy both as to his knowledge and understanding of the guilty plea he was choosing to enter,
and as to the factual basis for that plea. During that colloquy, Petitioner stated to the Court that he
had received at least some college education, that he was not under the influence of any substance
that would prevent him from understanding the plea he was entering, that he was fluent in English,
and that he had had a “complete opportunity” to speak with his attorney, with whose responses he
was satisfied. (Id. at 3-4). The Court thereafter informed Petitioner that he would not be permitted
to withdraw his plea once it was entered merely because he disputed his sentence, that his sentence
would be imposed pursuant to the Court’s discretion after consultation with the relevant sentencing
factors and the Sentencing Guidelines, and that the sentencing recommendation contained in the
plea agreement was not binding upon the Court at sentencing, all of which Petitioner stated he
understood. (Id. at 4-5). Petitioner further stated that he had discussed the Guidelines with his
attorney to his satisfaction. (Id. at 5-6). This Court thereafter informed Petitioner that, by virtue
of his guilty plea, that he was waiving his trial rights including to the presumption of innocence
and trial by jury, which Petitioner stated he understood. (Id. at 6). Petitioner then confirmed to
the Court that he and his attorney had discussed the plea agreement, that he had had the agreement
explained to him by his attorney, including having any questions answered, and that he had signed
and agreed to the plea following those discussions. (Id. at 7-8). Petitioner also stated that he
understood and agreed to the appellate waiver contained in that plea, through which he would have
been barred from pursuing an appeal or collateral attack had the Court sentenced him to a sentence
within the proposed Guidelines level of 35 contained in the plea agreement. (Id. at 8-9). Petitioner

3

also stated that he understood and accepted the stipulations in his plea agreement requiring an
update to his tax returns. (Id. at 10).
Having established that Petitioner understood the terms of his plea agreement and the
nature of the plea he was entering, the Court then turned to the following factual basis:
THE COURT: . . . All right. During the period from in or about
January 2005, through on or about November the 30th, 2009, did you
live in Miami Beach, Florida?
[Petitioner:] Yes, I did.
The COURT: From in or about January, 2005, through on or about
November 30th, 2009, were you the owner and Chief Executive
Officer of Capital Investment, U.S.A., Inc.?
[Petitioner:] Yes, I was.
THE COURT: Did Capital have other employees, including a Chief
Financial Officer, and other personnel that worked on Capital’s
financial matter?
[Petitioner:] Yes.
THE COURT: From in or about January, 2005, through on or about
November 30th, 2009, did you, through Capital, fraudulently obtain
money from investors by falsely claiming that the money was going
to be used in Capital’s grocery diversion business when in fact the
money was used for your personal benefit and to pay early investors
from funds received from later investors?
[Petitioner:] Yes.
THE COURT: In fact, during this time, isn’t it true that Capital had
virtually no income generating business from in or about August,
2007, through on or about November 30th, 2009?
[Petitioner:] Yes.
THE COURT: To induce investors to send money to Capital, did
you or other Capital employees under your control provide
documents to investors, including promissory notes, joint venture
agreements, and other evidence of indebtedness which reflected the

4

amount the individual sent to Capital and falsely promised specific
returns?
[Petitioner:] Yes.
THE COURT: To further induce investors to send money to Capital,
did you direct other Capital employees to create and show investors
fraudulent documents which falsely touted the profitability of
Capital’s purported grocery diversion business?
[Petitioner:] Yes.
THE COURT: Did these documents include false tax returns and
financial statements, including profit and loss statements, which
falsely represented that Capital’s grocery diversion business was
generating tens of millions of dollars in sales?
[Petitioner:] Yes.
THE COURT: Did these documents also include fictitious invoices
which falsely reflected transactions purportedly entered into
between Capital and other companies in the grocery diversion
business to fraudulently show sources of product and income?
[Petitioner:] Yes.
....
THE COURT: Did these invoices falsely state that grocery or beauty
products were shipped to a warehouse in Florida when in fact the
products did not exist?
[Petitioner:] Yes.
THE COURT: After receiving funds sent to Capital from investors
to be used in the grocery diversion business, did you improperly use
those funds to make principle and interest payments to existing
investors?
[Petitioner:] Yes.
THE COURT: Did you misappropriate approximately 35 million
dollars of funds investors sent to Capital to be used in the grocery
diversion business for yourself?
[Petitioner:] Yes.
5

THE COURT: In particular, did you improperly use funds investors
sent to Capital to be used in the grocery diversion to: A, pay for at
least approximately five to eight million dollars in debts resulting
from gambling on sporting events?
[Petitioner:] Yes.
THE COURT: B, at least $200,000 you paid for floor seats to
professional basketball games in Miami, Florida?
[Petitioner:] Yes.
THE COURT: C, you paid approximately $26,000 per month for the
mortgage on your residence in Miami Beach . . . which was recently
valued at approximately 5 million dollars?
[Petitioner:] Yes.
THE COURT: D, you paid approximately $7,250 per month for the
payments on a 1.5 million dollar Riviera yacht?
[Petitioner:] Yes.
THE COURT: E, you paid approximately $4,700 per month for the
payments for the lease on a Mercedes Benz X65 AMG?
[Petitioner:] Yes.
THE COURT: F, you paid for a pair of diamond studded handcuffs
which you gifted to a prominent professional athlete?
[Petitioner:] Yes.
THE COURT: Did you also improperly used funds sent to Capital
to be used in the grocery diversion business to make donations to
the athletic program of a local university in the Miami, Florida area?
[Petitioner:] Yes.
THE COURT: Did you also improperly use funds sent to Capital to
be used in the grocery diversion business to make payments or give
gifts to dozens of student athletes who are attending the local
university to which you made significant donations?
[Petitioner:] Yes.
6

THE COURT: Did these payments and gifts to student athletes
include cash payments of up to $10,000 and gifts such as jewelry
and entertainment expenses at various night clubs and restaurants in
Miami Beach, Florida?
[Petitioner:] Yes.
THE COURT: On or about May 16th, 2008, did you send or cause
to be sent a wire transfer of approximately $130,993.75 from
Capital’s account at Bank of America in Florida to Pershing LLC in
New Jersey for the benefit of . . . an individual with the initials JY?
[Petitioner:] Yes.
THE COURT: Was this [payment] derived from the scheme to
defraud the individuals who sent money to Capital for use in the
grocery diversion business?
[Petitioner:] Yes.
THE COURT: Through this fraudulent scheme, did you, through
Capital, raise approximately 880 million dollars from investors?
[Petitioner:] Yes.
THE COURT: Was the loss that resulted from the scheme between
50 million and 100 million dollars?
[Petitioner:] Yes.
THE COURT: Did your fraudulent activity result in more than 50
victims being harmed?
[Petitioner:] Yes.
THE COURT: Did you at all times act knowingly and willfully?
[Petitioner:] Yes.
THE COURT: And are you pleading guilty because you are in fact
guilty of [one count of money laundering in violation of 18 U.S.C.
§ 1957 and one count of securities fraud in violation of 15 U.S.C.
§§ 78j(b) and 78ff(a)]?
[Petitioner]: Yes.
7

(Docket No. 10-471 at ECF No. 19 at 11-16). Based on this factual basis, and the Government’s
statements that, had the matter proceeded to trial, the Government would have proven the use of
the means and instrumentalities of interstate commerce by Petitioner in committing money
laundering and securities fraud, this Court accepted Petitioner’s guilty plea. (Id. at 16-18).
Petitioner returned for sentencing on June 7, 2011. Shapiro, 505 F. App’x at 131. At
sentencing this Court “calculated an offense level of 35 and a criminal history category of I under
the . . . Guidelines with a recommended sentence of 168 to 210 months’ imprisonment.” Id.
Following argument and an analysis of the sentencing factors, however, this Court determined that
a two level upward variance was warranted in this matter based on Petitioner’s leadership in his
Ponzi scheme, the duration of that scheme, the magnitude of the loss involved, and Petitioner’s
continued “willingness to blame others and soil their reputations.” Id. at 132. This Court thereafter
sentenced Petitioner to a sentence of 240 months’ imprisonment. Id. at 131. Petitioner appealed
his sentence, and the Third Circuit affirmed, finding that the 240 month sentence was
“procedurally sound” and that the two level upward variance was reasonable given the severity
and nature of Petitioner’s criminal conduct. Id. at 132. Petitioner thereafter filed his motion to
vacate sentence. (ECF No. 1, 10).

II. DISCUSSION
A. Legal Standard
A prisoner in federal custody may file a motion pursuant to 28 U.S.C. § 2255 challenging
the validity of his or her sentence. Section 2255 provides, in relevant part, as follows:
A prisoner in custody under sentence of a court established by Act
of Congress claiming the right to be released upon the ground that
the sentence was imposed in violation of the Constitution or laws of
8

the United States, or that the court was without jurisdiction to
impose such a 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. Unless the moving party claims a jurisdictional defect or a constitutional
violation, to be entitled to relief the moving party must show that an error of law or fact constitutes
“a fundamental defect which inherently results in a complete miscarriage of justice, [or] an
omission inconsistent with the rudimentary demands of fair procedure.” United States v. Horsley,
599 F.2d 1265, 1268 (3d Cir. 1979) (quoting Hill v. United States, 368 U.S. 424, 429 (1962)), cert.
denied 444 U.S. 865 (1979); see also Morelli v. United States, 285 F. Supp. 2d 454, 458-59 (D.N.J.
2003).

B. An evidentiary hearing is not required in this matter
28 U.S.C. § 2255(b) requires an evidentiary hearing for all motions brought pursuant to the
statute “unless the motion and files and records of the case conclusively show that the prisoner is
entitled to no relief.” 28 U.S.C. § 2255(b); United States v. Booth, 432 F.3d 542, 545 (3d Cir.
2005); United States v. Day, 969 F.2d 39, 41-42 (3d Cir. 1992). “Where the record, supplemented
by the trial judge's personal knowledge, conclusively negates the factual predicates asserted by the
petitioner or indicate[s] that petitioner is not entitled to relief as a matter of law, no hearing is
required.” Judge v. United States, 119 F. Supp. 3d 270, 280 (D.N.J. 2015); see also Government
of Virgin Islands v. Nicholas, 759 F.2d 1073, 1075 (3d Cir. 1985); see also United States v. Tuyen
Quang Pham, 587 F. App’x 6, 8 (3d Cir. 2014); Booth, 432 F.3d at 546. For the reasons set forth
below, Petitioner’s claims are without merit based on the record before this Court, and no hearing
is required in this matter.

9

C. Petitioner’s Brady Claim
In his chief claim, Petitioner contends that the Government withheld evidence in his
criminal matter in violation of Brady v. Maryland, 373 U.S. 83 (1963), and that this Brady violation
rendered his guilty plea neither knowing nor voluntary. Under the Brady rule, the Government
violates a criminal defendant’s Due Process rights where it suppresses material evidence which is
favorable to the defendant. See, e.g., Kyles v. Whitley, 514 U.S. 419, 432-34 (1995); see also
United States v. Risha, 445 F.3d 298, 303 (3d Cir. 2006).

To establish a Brady violation, a

petitioner must therefore show that “(1) evidence was suppressed; (2) the evidence was favorable
to the defense; and (3) the evidence was material to guilt or punishment.” Risha, 445 F.3d at 303.
Evidence is considered material for Brady purposes where “there is a reasonable probability that
pre-trial disclosure would have produced a different [result]” and the suppression of the evidence
therefore “undermine[d] confidence in the outcome” of the petitioner’s prosecution. Id. at 303 n.
5; see also Kyles, 514 U.S. at 434-35.
It remains an open question in this circuit whether a petitioner who pled guilty was entitled
to Brady material before entering his plea, and the remaining circuits are split as to that question.
See, e.g., United States v. Brown, 250 F.3d 811, 816 n. 1 (3d Cir. 2001) (noting circuit split and
assuming “for the sake of argument, [without so holding], that Brady may require the government
to turn over exculpatory information prior to entry of a guilty plea”); United States v. Avellino, 136
F.3d 249, 255 (Brady applies to cases involving a guilty plea); Sanchez v. United States, 50 F.3d
1448, 1453 (9th Cir. 1995) (same); Matthew v. Johnson, 201 F.3d 353, 360-62 (5th Cir. 2000)
(explaining that the purpose of the Brady rule was to ensure fair consideration of guilt by a jury or
judge in a bench trial, and that a guilty plea likely waives any Brady violation as to the guilt phase);

10

United States v. Conroy, 567 F.3d 174, 178 (5th Cir. 2009) (guilty plea precludes Brady claim);
see also United States v. Ruiz, 526 U.S. 622, 633-34 (2002) (Thomas, J., concurring in the
judgment and suggesting that the “principle supporting Brady was avoidance of an unfair trial [for]
the accused [which is] not implicated at the plea stage”). While the Court has extended Brady to
include a requirement that material impeachment evidence be provided to a criminal defendant,
see Giglio v. United States, 405 U.S. 150, 154 (1972), the Supreme Court has explicitly held that
the Constitution does not require the “pre[-]guilty plea disclosure of impeachment information.”
Ruiz, 536 U.S. at 629. To the extent that Brady does apply in the guilty plea context, evidence in
that context would only be material if “but for the failure to disclose the Brady material, the
defendant would have refused to plead guilty and would have gone to trial.” Sanchez, 50 F.3d at
1454.
Even assuming for the sake of argument that a petitioner can maintain a Brady claim in the
pretrial guilty plea context, Petitioner’s claim fails. In his petition, Petitioner provides numerous
documents which show that one of the individuals he apparently defrauded, Robert Kallman,
personally and through counsel, sought to obtain the help of others involved in Petitioner’s
business affairs, specifically Craig Currie and his wife, to help him prove that Petitioner had
defrauded Kallman. While Petitioner contends that these documents indicate that Kallman was
attempting to frame him by inventing false charges against Petitioner, these documents show no
such thing. Instead, these documents indicate that Kallman sought to have others help him prove
Petitioner’s financial ill-deeds, and did so through various means. It does not follow from anything
other than Petitioner’s own denials that Kallman’s allegations are false simply because he sought
but could not obtain the help of Currie and his wife in bringing claims against Petitioner. Instead,
Kallman’s fervent attempts are entirely consistent with Kallman’s assertion that Petitioner had

11

stolen from him. That Currie and his wife eventually signed affidavits asserting that they had not
helped Petitioner steal from Kallman likewise does not make the documents Petitioner has
submitted show Kallman’s allegations to have been false. Even if this Court were to construe the
documents to suggest something untoward about Kallman, those documents at best would
therefore have gone to the reliability and credibility of Kallman as a witness. As explained above,
the Government is not required to turn over documents going only to the impeachment of a
potential witness prior to a guilty plea, and such potential impeachment information therefore
cannot form the basis of a Brady claim, especially in light of the fact that it is not entirely clear
that Kallman would have been a witness at trial. Ruiz, 526 U.S. at 629-34.
Petitioner’s Brady claim is likewise negatively impacted by the fact that Kallman was at
best a small part of the schemes with which Petitioner was charged and to which he pled guilty.
Indeed, in the original criminal complaint in this matter, Kallman was mentioned only to the extent
that he was one of the investors that Petitioner paid off using money misappropriated as part of
Petitioner’s Ponzi scheme. (Docket No. 10-471 at ECF No. 1). As the Government argues,
Petitioner’s dealings with Kallman were thus largely tangential to the massive securities fraud
scheme at the center of this case, and those interactions with Kallman at best were but a small part
of the crimes with which he was charged. 1 Given the tangential involvement of Kallman, the sheer
size of the scheme in which Petitioner was engaged, the significant amount of money Petitioner
lost or misappropriated from his investors, and the over sixty additional victims involved in
Petitioner’s Ponzi scheme, there is no reasonable probability that, but for his lack of possession of
documents showing that Kallman was attempting to recover from Petitioner’s “theft” of his

1

Indeed, the Government contends that neither Craig Currie nor Robert Kallman “are even alleged
to have been among Shapiro’s many victims.” (ECF No. 12 at 5).
12

moneys or to have Petitioner criminally charged Petitioner would not have pled guilty as these
documents do little to even challenge the credibility of Kallman, let alone provide any truly
exculpatory information. As such, these documents were neither exculpatory nor material, and
cannot form the basis of a Brady claim sufficient to show that Petitioner’s plea was rendered
involuntary or unknowing. Petitioner’s plea-related Brady claim must therefore be denied.
Petitioner also asserts, however, that the denial of documents as to Kallman and Currie also
amounts to a denial of requested Brady evidence in advance of his sentencing. In essence,
Petitioner’s claim is that, had he had these documents, he could show that he lost significant
amounts of money in his interactions with Currie. Petitioner’s argument thus essentially is that he
could have used this information as an offset to the loss amount with which he was attributed at
sentencing. The inherent problems with this argument, however, are that the Government never
disputed that Petitioner lost money in his dealings with Currie, and Petitioner has provided no legal
support for the assertion that he can offset the money his investors lost in his Ponzi scheme based
on money he and his business lost in separate dealings with Currie. What’s more, the only
documents Petitioner provides which actually support his current assertions are those created and
maintained by his company’s own attorneys prior to his criminal prosecution in this matter, which
suggests Petitioner had access to the information he claims he was denied. In any event, Petitioner
has provided no support for the assertion that he can offset his victims’ losses in his Ponzi scheme
with the losses he allegedly suffered in mis-dealings with Currie, and this Court is aware of no
such authority. Because Petitioner can therefore not establish that, but for his lack of the
documents he now contends are Brady material, he would have received a lesser sentence, he
cannot show that these documents were material to his sentencing, and his Brady claim on that
basis must also fail. Kyles, 514 U.S. at 434-35; Risha, 445 F.3d at 303. Because both of

13

Petitioner’s Brady claims are therefore without merit, Petitioner is not entitled to relief pursuant to
Brady and its progeny.

E. Petitioner’s remaining claims
While Petitioner’s original petition (ECF No. 1) contained only Petitioner’s Brady claims,
in his duplicate petition (ECF No. 10), Petitioner sought to add several other claims in which he
essentially asserts that his criminal prosecution is the result of some mass conspiracy brought on
by Guy Lewis, one of the attorneys hired to represent the interests of his company during the course
of the Ponzi scheme. The central contention in this alleged conspiracy is that Guy Lewis was
previously a United States Attorney, and was part of the team that brought criminal charges against
and convicted Petitioner’s step-father, and that Lewis therefore “recruited” Petitioner through his
law partner and hid allegedly exculpatory evidence which would have proven Petitioner’s
innocence, resulting in Petitioner’s conviction.

Petitioner contends that these actions were

undertaken out of some sense of revenge on the part of Lewis. The document Petitioner chiefly
contends was hidden from him was a short deposition in which Craig Currie’s estranged wife told
Petitioner’s company’s attorney, Lewis, that Currie had been involved with many people, had
“stolen” some amount of money from Petitioner at some unknown point, that Currie had done
dealings with Robert Kallman behind Petitioner’s back, and that Currie had on his staff a large,
threatening man he used to intimidate people. (Document 32 attached to ECF No. 1). This
interview, such as it is, in no way establishes Petitioner’s innocence, nor is it actually exculpatory
– at best it establishes a point which was not in contention during Petitioner’s plea and sentencing,
that Currie had cheated Petitioner out of some amount of money and had had some dealings with
Kallman.

14

While Petitioner contends that this conspiracy amounts to claims of “excessive
federalism,” 2 ineffective assistance of counsel by a lawyer hired by his company who never
actually entered an appearance on his behalf in his criminal case, and show that he is actually
innocent, in making these claims Petitioner is essentially seeking to contradict his own solemn
declarations made in open court in which he admitted his guilt and admitted to the operation of a
Ponzi scheme resulting in tens of millions of dollars of losses for his over sixty victims. As the
Supreme Court has explained,
the representations of the defendant, his lawyer, and the prosecutor
at [a plea] hearing, as well as any findings made by the judge
accepting the plea, constitute a formidable barrier in any subsequent
collateral proceedings. Solemn declarations in open court carry a
strong presumption of verity. The subsequent presentation of
conclusory allegations unsupported by specifics is subject to
summary dismissal, as are contentions that in the face of the record
are wholly incredible. . . .
. . . [T]he barrier of the plea or sentencing proceeding record,
although imposing, is not invariably insurmountable [however]. In
administering the writ of habeas corpus and its § 2255 counterpart,
the federal courts cannot fairly adopt a per se rule excluding all
possibility that a defendant’s representations at the time his guilty
plea was accepted were so much the product of such factors as
misunderstanding, duress, or misrepresentation by others as to make
the guilty plea a constitutionally inadequate basis for imprisonment.
Blackledge v. Allison, 431 U.S. 63, 73-75 (1977); see also United States v. Erwin, 765 F.3d 219,
230 (3d Cir. 2014) (applying Blackledge); United States v. Dickler, 64 F.3d 818, 823 n. 7 (3d Cir.
1995) (“Sworn statements in a plea proceeding are conclusive unless the movant can demonstrate

2

Petitioner’s “excessive federalism” claim appears to be an attempt to restate both his Brady claim
and conspiracy allegations as a violation of the Tenth Amendment upon the part of the
Government. Petitioner does not explain how these claims violate the Tenth Amendment as
opposed to Due Process or the like, and thus the excessive federalism claim fails for the same
reasons that his Brady and conspiracy claims are without merit.
15

compelling reasons for questioning their truth”); United States v. Stewart, 977 F.2d 81, 84 (3d Cir.
1992) (“The ritual of the colloquy is but a means toward determining whether the plea was
voluntary and knowing. A transcript showing full compliance with the customary inquiries and
admonitions furnishes strong, although not necessarily conclusive, evidence that the accused
entered his plea without coercion and with an appreciation of its consequences”).
Thus, to the extent Petitioner is trying to negate his open admissions before this Court
during his plea, Petitioner faces a high hurdle indeed. In support of his claim that he was somehow
the subject of a revenge conspiracy on the part of Guy Lewis, who Petitioner portrays in his
allegations as the puppet master in control of at least two offices of United States Attorneys,
Petitioner offers little more than his own conclusory allegations that Lewis “recruited” Petitioner’s
business in dealing with Capital’s issues with Craig Currie, and used that “recruitment” to create
a vast conspiracy to have Petitioner imprisoned out of some misguided sense of revenge born of
Lewis’s previous prosecution of Petitioner’s step-father for a Ponzi scheme undertaken in the mid
to late 1990s. The documents Petitioner provides in his motion provide no support for the
contention that Petitioner’s prosecution was the result of some conspiracy, and instead indicate
that his lawyers attempted to help Petitioner decide whether or not to bring suit against Currie
following Petitioner’s failed dealings with Currie. These documents thus provide no support for
Petitioner’s allegations of conspiracy. Petitioner has thus provided nothing more than conclusory
allegations of a revenge scheme by Lewis supported only by vague contentions which are wholly
incredible based on the record before the Court, the combination of which are patently insufficient
to overcome the strong presumption that Petitioner’s admissions of guilt during his plea colloquy
were truthful. Petitioner’s claim that he was subject to a conspiracy and that he is innocent must

16

therefore be dismissed as they are precluded by Petitioner’s own admission of his guilt in his plea
hearing. Blackledge, 431 U.S. at 73-75; see also Dickler, 64 F.3d at 823 n. 7.
Even were this Court to construe this claim as a claim expressing Petitioner’s actual
innocence, which appears to be the only basis for Petitioner’s claim, Petitioner is still not entitled
to relief. Claims of actual innocence have classically served as gateway claims through which a
court may reach an otherwise barred or defaulted claim, rather than a stand-alone basis for relief.
See, e.g., McQuiggan v. Perkins, --- U.S. ---, ---, 133 S. Ct. 1924, 1934-46 (2013). Indeed, even
as a gateway claim, actual innocence will only be established where a petitioner shows “that it is
more likely than not that no reasonable juror would have convicted him” in light of some newly
raised evidence. Id. at 1935; see also Albrecht v. Horn, 485 F.3d 103, 126 (3d Cir. 2007). A
petitioner is not entitled to relief simply because he asserts his innocence, instead he must actually
show his innocence by way of “new reliable evidence – whether it be exculpatory scientific
evidence, trustworthy eyewitness accounts, or critical physical evidence – that was not presented”
prior to his conviction. Hubbard v. Pinchak, 378 F.3d 333, 339-50 (3d Cir. 2004). Because of the
high standard applicable to such a claim, claims of actual innocence have “in virtually every case
. . . been summarily rejected.” Hubbard, 378 F.3d at 341. While the Supreme Court has at times
accepted for the sake of argument that a “truly persuasive” actual innocence claim would warrant
relief even in the absence of a substantive constitutional violation, the Court has never explicitly
so held. See Herrera v. Collins, 506 U.S. 390, 400-417 (1993); see also District Att’y’s Office For
Third Judicial Dist. v. Osborne, 557 U.S. 52, 71-72 (2009). The Court has stated, however, that
if a stand-alone claim of actual innocence were viable, the level of proof required to make out such
a claim would be even greater than that required for a gateway innocence claim.

17

Here, Petitioner has not shown his innocence, but merely asserted it. Petitioner has
provided nothing in support of his innocence claims but his own allegations of a wild conspiracy
by his company’s own legal representation, and those innocence claims are directly contradicted
by his own admissions of guilt during his plea colloquy as explained above. He has thus clearly
not met even the lower bar to which gateway claims of actual innocence are subject as he has
provided no new evidence sufficient to lead this Court to question the validity of his plea, and has
certainly failed to show his entitlement to relief on a stand-alone innocence claim as a result.
Hubbard, 378 F.3d at 339-50. Petitioner has not overcome the presumption that his statements in
open court were true and accurate, and he has not shown his entitlement to relief under a theory of
actual innocence.
To the extent Petitioner attempts to raise a claim of ineffective assistance of counsel against
Guy Lewis, the Court first must note once again that Lewis was an attorney hired by Petitioner’s
company, Capital, and while his partner briefly represented Petitioner for about a month in
Petitioner’s criminal prosecution, it was Petitioner’s current attorney, rather than Lewis or his
partner, who represented Petitioner during the vast majority of his prosecution. The Strickland
“ineffective assistance of counsel [standard] applies only to criminal proceedings [b]ecause there
is no constitutional right to effective assistance of counsel in civil proceedings.” Chase v. City of
Philadelphia, 611 F. App’x 67, 68 (3d Cir. 2015). To the extent that Petitioner asserts ineffective
assistance of counsel prior to the entry of his current attorney’s entry of appearance approximately
a month after Petitioner was arrested in his criminal case, he must show both that his previous
attorney was both constitutionally defective and that he was prejudice as a result of counsel’s
deficient performance. Strickland v. Washington, 466 U.S 668, 687-694 (1984). To show
deficient performance, Petitioner must show that “counsel made errors so serious that counsel was

18

not functioning as the ‘counsel’ guaranteed by the Sixth Amendment.” Id. at 687; see also United
States v. Shedrick, 493 F.3d 292, 299 (3d Cir. 2007). Even if he can show deficient performance,
Petitioner must also show that his counsel’s deficient performance prejudiced his defense by
showing that “there is a reasonable probability, but for counsel’s unprofessional errors, the result
of the proceeding would have been different.” Strickland, 466 U.S. at 693-94. Where a “petition
contains no factual matter regarding Strickland’s prejudice prong, and [only provides] . . .
unadorned legal conclusion[s] . . . without supporting factual allegations,” that petition is
insufficient to warrant a hearing, and the petitioner has not shown his entitlement to habeas relief.
See Palmer v. Hendricks, 592 F.3d 386, 395 (3d Cir. 2010). “Because failure to satisfy either
prong defeats an ineffective assistance claim, and because it is preferable to avoid passing
judgment on counsel’s performance when possible, [Strickland, 466 U.S. at 697-98],” courts
should address the prejudice prong first where it is dispositive of a petitioner’s claims. United
States v. Cross, 308 F.3d 308, 315 (3d Cir. 2002).
Here, Petitioner’s claim of ineffective assistance arises solely out of his unsupported
allegation that Guy Lewis engaged in a conspiracy to recruit, betray, and prosecute Petitioner.
Lewis, however, never entered an appearance on Petitioner’s behalf in this matter, and his partner,
Michael Tien, represented Petitioner for less than a month, entering an appearance the day after
Petitioner’s arrest and being replaced by Petitioner’s current attorney less than a month later in
May 2010. (See Docket No. 10-471 at ECF Nos. 5, 11). Petitioner does not explain how Tien was
ineffective, nor does he assert that his current counsel was herself ineffective. It was Petitioner’s
current counsel who advised Petitioner throughout the plea and sentencing progress, and it was
current counsel who signed and agreed to the guilty plea. Thus, it is clear that Petitioner has failed
in any way to show that Lewis ever acted as his attorney in his criminal matter, and has likewise

19

failed to show any way in which Lewis or Tien were ineffective in the course of his criminal
prosecution, as opposed to while acting as his private, civil attorneys in his business dealings. Any
failings those attorneys may have had as Capital’s lawyers, while perhaps subject to civil suit, have
no bearing on the outcome of Petitioner’s current motion to vacate sentence, and Petitioner’s vague
allegations of conspiracy do not change this fact. Chase, 611 F. App’x at 68. Petitioner has failed
to establish ineffective assistance, and any claim on that basis must therefore be denied.
In his final claim, Petitioner contends that this Court was bound to the obligations of the
contract between the Government and Petitioner in the form of Petitioner’s plea agreement, and
that this Court therefore denied him his rights by sentencing Petitioner to a sentence greater than
that suggested by the stipulations contained in the plea agreement and its attached exhibits.
Petitioner’s argument is based on two faulty assumptions – that this Court was absolutely bound
by the plea agreement, and that the Court in any event “violated” any portion of the plea agreement
by giving him an upward variance at sentencing. As the Third Circuit reiterated when Petitioner
challenged his sentence on direct appeal, this Court “was under no obligation to follow the sentence
recommendation in the plea agreement[, and a] request to vacate [Petitioner’s] plea [on such a
basis] is wholly unsupported.” Shapiro, 505 F. App’x at 132 n. 2. This is because Rule 11 specifies
that a sentencing court is only bound by a sentencing recommendation in a plea agreement where
the Court has accepted that agreement and the parties in the agreement agreed “that a specific
sentence or sentencing range is the appropriate disposition of the case, or that a particular provision
of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply.”
Fed. R. Crim. P. 11(c)(1)(C). Other forms of recommendations or stipulations not to oppose
arguments in a plea agreement do not bind the Court. See Fed. R. Crim. P. 11(c)(1)(B); see also
United States v. Bernard, 373 F.3d 339, 343 n. 5 (3d Cir. 2004).

20

In this matter, Petitioner’s plea agreement specifically informed him that the sentence he
would receive under the agreement was “within the sole discretion of the sentencing judge” based
on the judge’s consideration of the relevant sentencing factors and the Guidelines, which are
advisory and not mandatory upon this Court. (Docket No. 10-471 at ECF No. 18 at 2). While the
plea agreement contained numerous stipulations that the parties made regarding the Guidelines,
the plea agreement also specifically stated that these stipulations did “not bind the sentencing
judge, who may make independent factual findings and may reject any or all of the stipulations
entered into by the parties.” (Id. at 3). Thus, the plea agreement Petitioner signed and entered into
did not purport to bind this Court, and as it provided only stipulated recommendations as to the
appropriate guidelines finding, recommendations which the agreement itself stated did not bind
the Court, Petitioner’s argument that the Court should have been bound by the agreement is, at
best, disingenuous. Because the agreement did not bind this Court, the Court did not err in
departing upward to provide Petitioner with a sentence greater than that recommended in the plea
agreement. Shapiro, 505 F. App’x at 132 n. 2. Likewise, because the agreement specifically stated
that the Court was not bound by anything in the stipulations or otherwise contained in the
agreement, the Court’s upward departure did not violate, interfere with, or otherwise prevent
Petitioner from receiving the benefit of the bargain that was his plea agreement. What occurred at
Petitioner’s sentencing was explicitly addressed in the agreement Petitioner signed – that this Court
could vary Petitioner’s sentence in its sole discretion and that the Court was not bound by
recommendations contained in the agreement – and Petitioner cannot now claim that his plea
agreement was violated when that exact occurrence came to pass at sentencing. Nothing this Court
did at sentencing “violated” Petitioner’s plea agreement “contract” with the Government, nor did
this Court err in giving Petitioner an upward variance at sentencing. Id. Petitioner’s contract claim

21

is therefore without merit. Because all of Petitioner’s claims are without merit, Petitioner’s motion
to vacate sentence is denied.

III. CERTIFICATE OF APPEALABILITY
Pursuant to 28 U.S.C. § 2253(c) the petitioner in a § 2255 proceeding may not appeal from
the final order in that proceeding unless he makes “a substantial showing of the denial of a
constitutional right.” “A petitioner satisfies this standard by demonstrating that jurists of reason
could disagree with the district court’s resolution of his constitutional claims or that jurists could
conclude that the issues presented here are adequate to deserve encouragement to proceed further.”
Miller-El v. Cockrell, 537 U.S. 322, 327 (2003). For the reasons expressed above, none of the
claims Petitioner raises in his motion to vacate are “adequate to deserve encouragement to proceed
further” as they are all without merit, and jurists of reason would not disagree with this Court’s
resolution of his claims. As such, Petitioner has failed to make a substantial showing of the denial
of a constitutional right, and a certificate of appealability is denied.

IV. CONCLUSION
For the reasons set forth above, Petitioner’s motion to vacate his sentence (ECF No. 1, 10)
is DENIED, and Petitioner is DENIED a certificate of appealability. An appropriate order follows.

Dated: March 6, 2017

s/ Susan D. Wigenton
Hon. Susan D. Wigenton,
United States District Judge

22