Abdallah v. United States of America
Filing
24
MEMORANDUM AND OPINION. For the reasons set forth herein, the Court finds that petitioner has demonstrated no basis for relief under 28 U.S.C. § 2255. Therefore, the petition for a writ of habeas corpus is denied. SO ORDERED. Ordered by Judge Joseph F. Bianco on 11/24/2015. (Dolecki, Lauren) (Main Document 24 replaced on 11/24/2015) (Florio, Lisa).
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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C< ,,,<,OFFICE
U S Dii3 [RiCT COURT E D NY
14-CV-4037 (JFB)
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KAMAL ABDALLAH,
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LONG lf.L\ND OFFICE
Petitioner,
VERSUS
UNITED STATES OF AMERICA,
Respondent.
MEMORANDUM AND ORDER
November 24, 2015
I.
JOSEPH F. BIANCO, District Judge:
Kamal Abdallah ("petitioner") petitions
this Court pro se for a writ of habeas corpus
pursuant to 28 U.S.C. § 2255, challenging his
conviction entered on March 7, 2011, in the
Eastern District of New York for conspiring
to commit securities fraud and wire fraud, in
violation of 18 U .S.C. § 1349; securities
fraud, in violation of 18 U.S.C. § 1348; and
wire fraud, in violation of 18 U.S.C. § 1343.
Specifically, petitioner argues that (I) his
trial counsel was ineffective for failing to file
a motion to dismiss for a violation of the
Speedy Trial Act, (2) the Court improperly
failed to impose a three-level reduction on
petitioner's sentence for only partially
committing an offense, (3) the Court failed to
apportion liability jointly and severally for
restitution, and (4) the Court failed to make
an individualized inquiry into petitioner's
liability. For the reasons set forth below,
petitioner's motion is denied in its entirety.
BACKGROUND
A. Factual Background
Familiarity with the facts of this case is
presumed in light of the Court's earlier
opinion regarding this case. See United States
v. Abdallah, 840 F. Supp. 2d 584 (E.D.N.Y.
2012), aff'd, 528 F. App'x 79 (2d Cir. 2013).
However, the Court briefly summarizes
below the evidence related to the instant
motion.
Petitioner was convicted of conspiring to
commit securities fraud and wire fraud;
securities fraud; and wire fraud. He was
sentenced to a term of forty-two months'
imprisonment.
Petitioner was the CEO and Chairman of
the Board of UPDV, an oil and gas services
I
company. (Tr. 671, 1013-14.) 1 He was also
the Chairman of the Board at Continental
Fuels, an oil products-related company in
which UPDV owned a controlling interest.
(Tr. 677-78.) In April 2007, Sheridan Asset
Management,
LLC
("Sheridan"),
a
commercial
finance
and
investment
management company, lent UPDV about
$3.6 million. (Tr. 671-72.) In August 2007,
Sheridan extended an additional $3.25
million to UPDV. (Tr. 675-77.) In December
2007, Sheridan lent Continental $5.5 million
so that Continental could acquire Geer Tank
Trucks, Inc. ("Geer"). (Tr. 677-79.) Also in
Sheridan
extended
December 2007,
Continental a $3 million line of credit, which
680.)
UPDV
guaranteed.
(Tr.
issued and sent overseas as requested. (Gov't
Ex. 98.)
In December 2008, petitioner resigned
from UPDV, Continental, and all related
companies. At that point, UPDV owed
Sheridan more than $14 million. (Tr. 70406.)
On June I, 2009, petitioner and an
associate, Robert Kainth, began buying and
selling millions of UPDV shares between
them in order to artificially increase the
trading volume of the stock. (Tr. 877-882;
Gov't Exs. 213, 214.)
On June 18, 2009, petitioner first spoke to
Eric Seiden, who told petitioner that he had a
lot of relationships with people and could buy
a lot of stock. (Tr. 394-95; 398-99.) Petitioner
agreed to wire Seiden money if Seiden
successfully procured buy orders for UPDV
shares and to pay Seiden 25 percent of the
purchase price of any of the UPDV shares
that Seiden bought. !d. That same day, Seiden
bought a few million UPDV shares, and
petitioner wired him $3,500. !d.
In October 2008, UPDV stopped making
payments to Sheridan on the $3.6 and $3.25
million loans and went into default on both.
(Tr. 684-87.) That month, Continental
stopped producing collateral reports to
Sheridan. (Tr. 688.) Bank statements for
Continental and UPDV show that $4 million
was transferred on October 14, 2008, from
Geerto Continental, then to UPDV. (Tr. 69397.) On the same day, $3.5 million was
transferred from UPDV to petitioner's
personal bank account. (Tr. 699.) Petitioner
later acknowledged that he lost $3 million out
of the $3.5 million that was transferred to his
account by engaging in currency trading. (Tr.
699-700.) Because of petitioner's actions,
Geer was unable to pay its suppliers and
began to bounce checks. (Tr. 701--02.)
After June 18, 2009, Seiden continued to
place buy orders in UPDV stock on the
petitioner's behalf by calling brokerage firms
pretending to be various individuals from
institutional investors who had existing
accounts at the brokerage firms. (Tr. 407-08.)
During these phone calls, Seiden would place
buy orders into the accounts of the investors
that he was impersonating. Seiden placed
fake buy orders on June 22, June 25, June 26,
July 7, and July 8, 2009, at brokerage firms
such as Cantor Fitzgerald, Dinosaur
Securities, Roth Capital Partners, and Royal
Bank of Canada Capital Markets. (Tr. 41-43,
70-74, 119-125, 134-35, 155-56.)
On October 27, 2008, petitioner asked
UPDV's transfer agent to issue 600 million
UPDV shares in the name of Mohamed
AbdellatifYassine, with the stock certificates
sent overseas to AI Mawarid Financial
Services in Beirut, Lebanon. (Tr. 304-05;
Gov't Ex. 98.)2 The stock certificates were
2
1
Tr. refers to the trial transcript for United States v.
Abdallah, I :09-cr-00717-JFB.
Gov't Ex. refers to an exhibit introduced by the
government at trial.
2
Between June 19 and July 10, 2009,
petitioner and Seiden communicated several
times per day by phone and through text
404-05.)
In
these
messages.
(Tr.
communications, petitioner told Seiden how
many shares to buy, the price that UPDV
shares were selling for at the time, and the
price at which petitioner wanted to sell the
shares, which was "always above where the
market was trading." (Tr. 405, 407, 411.)
Both before and after Seiden's trip to
Texas on July 15, 2009, petitioner bought
Alphatrade shares in his personal brokerage
account, including the following: (a) on July
14, 2009, petitioner bought 420,000
Alphatrade shares at a cost of $11,385; and
(b) on July 16, 2009, petitioner bought
another 50,000 shares of Alphatrade in his
brokerage account at a cost of $1,555. (Tr.
903; Gov't Ex. 36.).
On days that Seiden successfully placed a
fake buy order, petitioner sold or attempted
to sell UPDV stock. (Gov't Ex. 216.) He also
made multiple phone calls or sent text
messages on those days and wired money to
Seiden on or around the days when he placed
the buy orders. (Gov't Ex. 211; Tr. 287-88,
425-28, 431.)
The FBI arrested Seiden on July21, 2009.
(Tr. 448.) On July 21, July 28, 3 and July 31,
2009, Seiden made consensually recorded
phone calls to petitioner, in which petitioner
requested that Seiden continue placing fake
buy orders for UPDV. (Gov't Exs. 4, 5, 6.) In
the July 21, 2009 call, petitioner told Seiden
to buy 25 to 50 million shares ofUPDV every
other day and to try to raise the price of
UPDV, and in exchange, offered to provide a
kickback to Seiden of25 percent of whatever
shares they were able to sell. (Gov't Ex. 4.)
On July 15, 2009, Seiden flew to San
Antonio, Texas, where petitioner resided, to
meet with him at petitioner's expense. (Tr.
436-37, 441, 998-99.) During the visit, the
two discussed putting in buy orders for
UPDV and another company in which
petitioner owned shares, Alphatrade. (Tr.
442-43, 445.) Seiden also told petitioner his
particular fraudulent technique for securing
the buy orders - informing brokerage firms
that he had accounts there, when in fact he
did not. (Tr. 446.) Seiden explained that some
buy orders failed because the firms figured
out that he did not have an account and
refused to place the buy order. !d.
In the July 28, 2009 call, during which
Seiden told the petitioner that he was "still in
New York," petitioner told Seiden to put in
buy orders for UPDV at up to $0.0045 per
share, even though UPDV was trading
between $0.0024 and $0.0028 per share. !d.
The petitioner again mentioned that he would
pay Seiden a kickback of 25 percent on all
shares that were sold. !d.
In calls on July 31, 2009, the petitioner
and Seiden again discussed the UPD V buy
orders. (Gov't Ex. 6-9.) Seiden said "you
know how I'm doing it" and agreed that if the
brokerage firms realized how Seiden was
buying the stock, petitioner would not tell
them that he knew Seiden. (Gov't Ex. 6.)
Seiden told petitioner that he had to be
"cautious because of what I do." (Gov't Ex.
On July 16,2009, petitioner asked Seiden
to buy more stock for him and agreed to
provide Seiden with additional names, when
Seiden said he was running out of firms to
call. (Tr. 448.)
3 Seiden was located in the Eastern District of New
York when he made the July 28, 2009 phone call.
(Gov't Ex. 5.)
3
8.) Seiden explained that he was talking
"outta my, my butt when I tell them who I am
and everything," and that he had to "pretend
who I am." (Gov't Ex. 2, 3.)
4, 2009, until October 9, 2009. (Order of
Excludable Delay, United States v. Abdallah,
1:09-cr-717-JFB, ECF No. 7.) Eleven days
after the excluded period ended, on October
20, 2009, a grand jury returned an indictment
against petitioner, charging him with
conspiracy to commit securities fraud under
18 U.S.C. § 1349, and substantive securities
and wire fraud under 18 U.S.C. § 1343 and
18 U.S.C. § 1348. (Indictment, United States
v. Abdallah, I :09-cr-717-JFB, ECF No. 8.)
In the two weeks or so after the July 31 ,
2009 phone calls, petitioner sent multiple text
messages to Seiden imploring him to contact
him so they could keep working together. (Tr.
214,215,219, 221; Gov't Ex. 10.)
B.
Procedural History
At trial, petitioner testified on his own
behalf. (Tr. 998-1383.) During that
testimony, he testified in detail as to the
circumstances that led to his transactions
with Seiden and denied any knowledge that
Seiden was fraudulently inflating the price of
stocks. Id
A warrant for petitioner's arrest, charging
him with conspiracy to violate Title 18 of the
United States Code by scheming to defraud
in connection with the purchase and sale of
securities, was issued on August 7, 2009 in
the Eastern District of New York. (See
Warrant for Arrest, United States v.
Abdallah, 1:09-cr-717-JFB, ECF No. 2.)
Petitioner was arrested in the Western
District of Texas on August II, 2009, and he
appeared in court there on the day of arrest
and was made aware of the charges he faced.
(Ex. A to Gov't Mem., ECF No. 21.)
Petitioner originally requested a preliminary
hearing and identity hearing but on August
20, 2009, he waived both hearings and agreed
to pay bail so that he could travel on his own
to the Eastern District of New York and
resume court proceedings on August 27,
2009. (Ex. C to Gov't Mem.)
On March 7, 2011, petitioner was
convicted by a jury on counts one, two and
seven from the original indictment,
constituting conspiracy to commit securities
fraud and wire fraud, securities fraud, and
wire fraud, respectively. 4
However, petitioner did not appear in the
Eastern District of New York until a week
past that scheduled date, on September 4,
2009. (See Initial Appearance, United States
v. Abdallah, 1:09-cr-717-JFB, ECF No. 5.)
The record does not illuminate the cause of
petitioner's absence. When petitioner
appeared before Magistrate Judge Carter, he
consented to the exclusion of thirty-five days
from the speedy trial clock, from September
During sentencing, petitioner argued, as
he had at trial, that he was unaware of the
fraud that Eric Seiden was committing
between June 22 and July 8. (Ts. at 12-13.)5
However, the Court found that the evidence
brought forth at trial overwhelmingly proved
petitioner's knowledge that a fraudulent
scheme was occurring, in which Seiden
would place fake stock orders at an inflated
price, and petitioner would then dump his
stock at that increased value. Id at 13-18. The
Court calculated the loss amount from the
fraud to be $509,072.18, including
$224,072.18 in actual loss to brokerage
houses as a result of the scheme, and an
additional $285,000.00 of loss that would
have resulted had Eric Seiden followed
4 Counts 3-6 were dropped by the prosecution prior to
the trial. (Gov't Mem. at 2.)
5
Ts. refers to the transcript from the sentencing
hearing
4
petitioner's instructions to continue the
fraudulent scheme. Id at 17-18. The Court
also imposed a two-level sentence
enhancement for the obstruction of justice
because petitioner perjured himself at trial by
denying knowledge of Seiden's fraudulent
actions. !d. at 23-28. The Guidelines placed
the sentencing range at 5 I to 63 months;
however, the Court found that petitioner's
generosity and family values and the fact that
Seiden concocted the fraudulent scheme were
mitigating factors calling for a lower
sentence. !d. at 29, 37, 46-49. Petitioner was
ultimately sentenced below the Guidelines, to
42 months' incarceration, and ordered to pay
the full loss amount of $224,072.18 in
restitution to the defrauded brokerage houses.
!d. at 43, 52-53.
concerning Seiden's past contacts in
connection with fraud to petitioner before
trial;
(3)
evidence
of petitioner's
misappropriation of stock and failure to
disclose material information to shareholders
was properly admitted in order to rebut
statements made by petitioner during his
direct testimony and to show motive,
fraudulent intent, and knowledge; and (4) the
prosecutor did not substantially prejudice
petitioner's case in its summation. !d. at 611624.
On January 13, 2012, petitioner filed a
notice of appeal from the judgment with the
Second Circuit. United States v. Abdallah,
528 F. App'x 79 (2d Cir. 2013). On appeal,
petitioner only alleged that venue in the
Eastern District of New York was improper
for all counts of the indictment and that the
indictment was constructively amended at
trial. Id at 80-83. The Second Circuit
rejected both of petitioner's arguments and
affirmed the denial of petitioner's motion for
a judgment of acquittal and a new trial. Id at
84.
On July I, 2011, petitioner moved for a
judgment of acquittal pursuant to Rule 29 of
the Federal Rules of Civil Procedure and a
new trial pursuant to Rule 33(a). See
Abdallah, 840 F. Supp. 2d at 584. Petitioner's
motion was based on seven allegations of
error, all of which were ultimately rejected by
the Court. Petitioner first alleged that the
Eastern District of New York did not have
venue, but the Court found that petitioner's
call to a co-conspirator in the Eastern District
of New York was enough to establish venue
as to each count; further, the Court rejected
the argument for manufactured venue as to
each count. !d. at 601-08. The Court also
found that the evidence brought forth at trial
satisfied each element of wire fraud and, thus,
was sufficient to convict the petitioner of
wire fraud. !d. at 608-10. Next, the Court
determined that the motion for a new trial was
without merit because (I) there was no
constructive amendment of the original
indictment, nor was there prejudicial
variance to the superseding indictment; (2)
no Brady violation had occurred because the
government did not withhold any relevant
notes and disclosed two FBI reports
Petitioner now moves to have his
sentence vacated pursuant to 28 U.S.C. §
2255. Petitioner alleges that (1) his trial
counsel was ineffective for failing to file a
motion to dismiss the case under the Speedy
Trial Act when more than thirty days had
passed between arrest and indictment; (2) the
Court failed to impose a mandatory threelevel sentencing reduction under 18 U.S.C. §
2XI.l(a); (3) the Court should have imposed
joint and several liability on petitioner and
Seiden (rather than full liability on
petitioner); and (4) the Court failed to make
an individualized finding of petitioner's
liability before issuing his sentence.
Petitioner also requests an evidentiary
hearing regarding his claims.
5
II.
STANDARD OF REVIEW
A.
States District Courts, Rule 4(b), 28 U.S.C.
foil. § 2255. On this issue, the Second Circuit
has made clear that "[t]o warrant a hearing on
an ineffective assistance of counsel claim, the
defendant need establish only that he has a
'plausible' claim of ineffective assistance of
counsel, not that 'he will necessarily succeed
on the claim."' Puglisi v. United States, 586
F.3d 209, 213 (2d Cir. 2009) (quoting
Armienti v. United States, 234 F.3d 820, 823
(2d Cir. 2000)). The Second Circuit has set
forth detailed guidance on how a district
court should determine whether a hearing is
necessary. See id at213-15. In particular, the
Court noted that, given the absence of premotion discovery in a § 2255 case, "a
petitioner may need only to identify available
sources of relevant evidence rather than
obtain it as in civil cases or seek a discovery
order from the court under Rule 6 of the
Rules Governing Section 2255 Proceedings."
Id at 213-14.
Section 2255 Petition
Pursuant to 28 U.S.C. § 2255, a prisoner
sentenced in federal court may "move the
court which imposed the sentence to vacate,
set aside or correct the sentence" when the
petitioner claims ''that the sentence was
imposed in violation of the Constitution or
laws of the United States, or that the court
was without jurisdiction to impose such
sentence, or that the sentence was in excess
of the maximum authorized by law, or is
otherwise subject to collateral attack." 28
U.S.C. § 2255(a). If a claim that petitioner
raises in a § 2255 motion has not been
previously raised on direct appeal, generally,
the claim is procedurally barred unless the
petitioner can show cause and prejudice or
actual innocence. See Massaro v. United
States, 538 U.S. 500, 504 (2003); Rosario v.
United States, 164 F.3d 729, 732 (2d Cir.
1998). However, this bar does not apply to
claims of ineffective assistance of counsel;
the Supreme Court has stated that "in most
cases a motion brought under § 2255 is
preferable to direct appeal for deciding
claims of ineffective assistance." Massaro,
538 U.S. at 504.
In the instant case, applying the above
referenced standard, this Court determines
that no evidentiary hearing is warranted
because petitioner's motion and the record in
this case conclusively demonstrate that he is
entitled to no relief under § 2255. With
respect to the ineffective assistance of
counsel claim for failure to move to dismiss
for a violation of the Speedy Trial Act,
petitioner has identified no documents
outside the record that could aid the court in
making a determination on this claim. As is
discussed below, the record clearly indicates
that no violation of the Speedy Trial Act took
place; thus, petitioner's argument fails to
meet Puglisi's plausibility standard. With
respect to the three sentencing claims,
petitioner again fails to point to any evidence
related to these claims that exists outside the
record as it stands today. The trial record and
pre-sentencing report contain all evidence
relevant to petitioner's scope of liability in
the crimes of conviction. As was reflected at
With respect to the issue of an evidentiary
hearing, § 2255 states that "[u]nless the
motion and the files and records of the case
conclusively show that the prisoner is entitled
to no relief, the court shall ... grant a prompt
hearing thereon, determine the issues and
make findings of fact and conclusions of law
with respect thereto." 28 U.S.C. § 2255(b).
Rule 4(b) of the Rules Governing Section
2255 Proceedings also provides that "[i]f it
plainly appears from the motion, any attached
exhibits, and the record of prior proceedings
that the moving party is not entitled to relief,
the judge must dismiss the motion.... "Rules
Governing§ 2255 Proceedings for the United
6
sentencing, that evidence was more than
sufficient to deny a reduction under 18
U.S.C. § 2X.l and apportion full liability to
petitioner. Thus, an evidentiary hearing on
any of petitioner's claims is unwarranted
pursuant to Rule 4(b).
typically the case, the lawyer has a
reasonable justification for the decision," and
"'strategic choices made after thorough
investigation of law and facts relevant to
plausible
options
are
virtually
unchallengeable."' DeLuca v. Lord, 77 F.3d
578, 588, 588 n.3 (2d Cir. 1996) (quoting
Strickland, 466 U.S. at 690-91). "However,
'strategic choices made after less than
complete investigation are reasonable
precisely to the extent that reasonable
professional
judgments
support
the
limitations on investigation."' !d. (quoting
Strickland, 466 U.S. at 690-91). When the
underlying claim petitioner complains of in a
§ 2255 motion is "meritless," counsel cannot
be found ineffective for failing to raise it.
Aparicio v. Artuz, 269 F .3d 78, 99 (2d Cir.
2001).
B. Ineffective Assistance of Counsel
Under the standard promulgated in
Strickland v. Washington, 466 U.S. 668
(1984), a defendant is required to
demonstrate two elements in order to state a
successful claim for ineffective assistance of
counsel: that (I) "counsel's representation
fell below an objective standard of
reasonableness," id. at 688, and (2) "there is
a reasonable probability that, but for
counsel's unprofessional errors, the result of
the proceeding would have been different."
!d. at 694.
The second prong focuses on prejudice
to a petitioner. A petitioner is required to
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.
"Reasonable probability" means that the
errors were of a magnitude such that they
"'undermine[] confidence in the outcome."'
Pavel v. Hollins, 261 F.3d 210, 216 (2d Cir.
2001) (quoting Strickland, 466 U.S. at 694).
"' [T]he question to be asked in assessing the
prejudice from counsel's errors . . . is
whether there is a reasonable probability that,
absent the errors, the fact finder would have
had a reasonable doubt respecting guilt."'
Henry v. Poole, 409 F.3d 48, 63-{)4 (2d Cir.
2005) (quoting Strickland, 466 U.S. at 695).
"'An error by counsel, even if professionally
unreasonable, does not warrant setting aside
the judgment of a criminal proceeding if the
error had no effect on the judgment."'
Lindstadt v. Keane, 239 F.3d 191, 204 (2d
Cir. 2001) (quoting Strickland, 466 U.S. at
691). Moreover, "[u]nlike the determination
of trial counsel's performance under the first
The first prong requires a showing that
counsel's performance was deficient.
However,
"[c]onstitutionally
effective
counsel embraces a 'wide range of
professionally competent assistance,' and
'counsel is strongly presumed to have
rendered adequate assistance and made all
significant decisions in the exercise of
reasonable professional judgment."' Greiner
v. Wells, 417 F.3d 305, 319 (2d Cir. 2005)
(quoting Strickland, 466 U.S. at 690). The
performance
inquiry
examines
the
reasonableness of counsel's actions under all
circumstances, keeping in mind that a "'fair
assessment of attorney performance requires
that every effort be made to eliminate the
distorting effects of hindsight."' !d. (quoting
Rompilla v. Beard, 545 U.S. 374, 408
(2005)). In assessing performance, a court
''must apply a 'heavy measure of deference to
counsel's
judgments."'
!d.
(quoting
Strickland, 466 U.S. at 691). "A lawyer's
decision not to pursue a defense does not
constitute deficient performance if, as is
7
prong of Strickland, the determination of
prejudice may be made with the benefit of
hindsight." Hemstreet v. Greiner, 491 F.3d
84, 91 (2d Cir. 2007) (internal citation and
quotation marks omitted).
Assuming arguendo that these claims are
reviewable, they fail on the merits. Petitioner
is not entitled to a reduction under 18 U.S.C.
§ 2X 1.1 (a) because the circumstances
demonstrate that he was about to complete all
acts necessary for completion of the crime
but for Seiden's cooperation with the
government. The Court did not err in failing
to impose joint and several liability between
petitioner and Seiden because a court may not
apportion liability on a co-conspirator who is
not charged as a defendant in the same case.
The Court properly apportioned liability in
finding petitioner liable for the fraud's entire
resultant loss because a defendant may be
held liable for actions of others in jointly
undertaken criminal activity so long as the
acts were within the scope of the agreement
and could be reasonably foreseen by the
defendant.
This Court proceeds to examine
petitioner's claims, keeping in mind that the
habeas petitioner bears the burden of
establishing both deficient performance and
prejudice. United States v. Birkin, 366 F.3d
95, 100 (2d Cir. 2004).
Ill.
DISCUSSION
Petitioner moves to have his sentence
vacated on four grounds. First, petitioner
claims that his trial counsel was ineffective
for failing to file a motion to dismiss the case
under the Speedy Trial Act when more than
thirty days had passed between arrest and
indictment. Second, petitioner argues that the
Court failed to impose a three-level
sentencing reduction under 18 U.S.C. §
2Xl.l(a) for only partially committing the
offense. Third, petitioner alleges that the
Court should have imposed joint and several
liability on himself and Seiden for restitution
putposes, rather than full liability on
petitioner. Finally, petitioner claims that the
Court failed to make an individualized
inquiry into his liability before imposing his
sentence.
A.
Speedy Trial Act Violation
Petitioner argues that his counsel was
ineffective for failing to file a motion to
dismiss for violations of the Speedy Trial
Act. (Pet'r's Mem. at 2-6, ECF No. 1.)
However, as set forth below, this argument is
without merit. Trial counsel's failure to file a
motion to dismiss for a Speedy Trial Act
violation does not constitute ineffective
assistance of counsel because the motion
would have been meritless, and the
underlying circumstances suggest that any
dismissal would have been without prejudice.
As set forth below, the Court concludes
that petitioner's claim of ineffective
assistance of counsel is without merit
because a motion to dismiss for violation of
the Speedy Trial Act would have been
unsuccessful,
and
the
underlying
circumstances suggest that any dismissal
would have been without prejudice. The
Court further concludes that petitioner's
sentencing claims are without merit. Initially,
because these claims were not raised on
direct appeal, they are procedurally barred.
Chapter Eighteen of the United States
Code makes clear that, "[a]ny information or
indictment charging an individual with the
commission of an offense shall be filed
within thirty days from the date on which
such individual was arrested or served with a
summons in connection with such charges."
18 U.S.C. § 316l(b). Here, seventy days
expired between the arrest and indictment;
petitioner was arrested on August 11, 2009,
8
and was indicted on October 20, 2009.
However, there are numerous justifications
for the exclusion of time between those
events. Only if the non-excluded time
between arrest and indictment exceeds thirty
days is there an actual violation ofthe Speedy
Trial Act. See 18 U.S.C. § 316l(h).
instance, the time between defendant's initial
appearance in the district of arrest and
defendant's initial appearance in the district
in which defendant is ultimately charged is
excluded from the speedy trial clock so long
as the delay is reasonable. See United States
v. Hernandez, 863 F.2d 239, 243-44 (2d Cir.
1988) (finding fourteen day delay between
defendant's arrest in Nevada and his initial
appearance in Vermont after he was released
on bail excludable from the speedy trial
clock); United States v. Edgecomb, 910 F.2d
1309, 1314-15 (6th Cir. 1990) (excluding
thirty-two days between defendant's arrest in
Florida and initial appearance in Ohio, where
the arrest warrant originated). Here,
petitioner was arrested in Texas on a warrant
that was issued in the Eastern District ofNew
York and, thus, required relocation to the
district where his charge originated. After his
last court appearance in Texas, on August 20,
2009, defendant was released on bail with
instructions to appear in court in New York
seven days later, on August 27. (See Ex. C to
Gov't Mem.) Seven days certainly falls into
the category of reasonable delay for
defendant's removal to the district of
charging pursuant to 18 U .S.C. §
316l(h)(I)(E). See Hernandez, 863 F.2d 243;
Edgecomb, 910 F.2d 1314-15. Accordingly,
these seven days should be excluded from the
speedy trial clock, bringing the time elapsed
between arrest and indictment to twentyeight days, consistent with the Speedy Trial
Act. 6
One ground for exclusion exists when the
court finds the ends of justice served by
excluding time from the speedy trial clock
exceed the interest of the defendant and the
public in having a speedy trial. 18 U.S.C. §
316J(h)(7)(A). As long as the court's reasons
for granting the delay are stated on the record,
are reasonable pursuant to 18 U.S.C. §§
316l(h)(7)(B)(i)- (iv), and are not due to the
mere congestion of the court calendar, 18
U.S.C. § 316l(h)(7)(C), then that time is not
counted towards the speedy trial clock. There
is no dispute in this case that at his August 27,
2009 appearance, petitioner consented to the
exclusion of thirty-five days from the speedy
trial clock (from September 4, 2009 to
October 9, 2009) in order to engage in plea
negotiations, which is a permissible and
reasonable reason for delay.
(See
Application & Order of Excludable Delay,
ECF No.7, United States v. Abdallah, 1:09cr-717 (JFB).) Thus, out of the seventy days
that expired, that leaves thirty-five days
remaining.
An additional ground for exclusion exists
for "[d]elay resulting from any proceeding
relating to the transfer of a case or the
removal of any defendant from another
district under the Federal Rules of Criminal
Procedure" and, thus, such time should not be
counted towards the thirty-day period. 18
U.S.C. § 316J(h)(l)(E). One such example of
this exclusion occurs when the defendant is
arrested in a district other than the one that
issued the warrant for his arrest. In such an
Even if the Speedy Trial Act's time limits
are exceeded, a petitioner cannot bring forth
a successful ineffective assistance of counsel
claim unless he can show that counsel's
failure to move to dismiss on those grounds
prejudiced the case. See Strickland, 466 U.S.
at 694. In other words, if the court would
have dismissed the case without prejudice
6
a week after his scheduled appearance. However, the
The Court notes that petitioner did not appear in the
Eastern District ofNew York until September 7, 2009,
record does not illuminate the cause of the delay.
9
upon counsel's motion to dismiss for
violation of the Speedy Trial Act, then a
petitioner's sentence cannot be vacated under
§ 2255. !d. The determination of whether to
dismiss a case with or without prejudice is up
to the discretion of the district court and will
only be overturned upon a finding of abuse of
discretion. United States v. Wilson, II F.3d
346, 352 (2d Cir. 1993). The factors that the
district court must consider when deciding
whether to dismiss a case with or without
prejudice due to a Speedy Trial Act violation
are (I) the seriousness of the offense, (2) the
facts and circumstances of case leading to
dismissal, and (3) the impact that
reprosecution would
have
on the
administration of the Speedy Trial Act and
justice. 18 U.S.C. § 3162(a)(2); see Wells,
893 F.2d at 538-40 (reversing lower court's
dismissal with prejudice because underlying
crime of impersonating an officer was
serious, defendant's failure to appear at his
preliminary examination was inexcusable
and likely contributed to delay, and the
burden was on the defendant to disclose his
whereabouts in his absence); Hernandez, 863
F.2d at 243-44 (finding an isolated violation
of the Speedy Trial Act, where offense was
serious, delay was short and there was no
evidence of bad faith or a pattern of neglect,
did not warrant dismissal with prejudice);
United States v. Giambrone, 920 F.2d 176,
180-82 (2d Cir. 1990) (affirming dismissal
with prejudice because government delayed
trial for months against defendant's
opposition, displaying lack of concern with
the Speedy Trial Act).
that warranted dismissal, this Court would
not have dismissed the case with prejudice.
Petitioner's crimes of conviction, substantive
securities fraud and wire fraud as well as
conspiracy to commit securities and wire
fraud, are serious offenses. Furthermore, the
underlying circumstances leading up to a
potential dismissal show no lackadaisical
attitude towards the Speedy Trial Act that can
be attributed to the prosecution, such that
dismissal with prejudice is warranted in order
to send a message to the prosecutor's office.
Because trial counsel's conduct did not
fall below an objective level of diligence for
failure to file a motion to dismiss upon a
meritless Speedy Trial Act claim, and there is
no probability that the case would have
arrived at a different outcome had counsel
made that motion (even assuming that the
motion was meritorious), petitioner's claim
of ineffective assistance of counsel must fail.
B.
Sentencing Claims
I. Procedural Bar
Failure to raise an issue on direct appeal
generally bars that issue from being heard on
a§ 2255 motion. Zhang v. United States, 506
F.3d I 62, 167 (2d Cir. 2007). Because
petitioner failed to allege on direct appeal that
(I) the court should have imposed a reduction
on his sentence, (2) the court should have
imposed joint and several liability, and (3)
the court should have made a more
individualized finding of petitioner's
liability, these claims are procedurally
barred. 7
Accordingly, assuming arguendo that
there was a violation of the Speedy Trial Act
With respect to claims of ineffective assistance of
appellate counsel, a criminal defendant has the right to
the effective assistance of counsel on the direct appeal
of his conviction. See Evitts v. Lucey, 469 U.S. 387,
397 (1985). In determining whether appellate counsel
has rendered constitutionally effective assistance,
courts apply the same standard established in
Even if the court were to generously construe
petitioner's pro se motion to consider these arguments
as ineffective appellate counsel claims, thus, bringing
them past the procedural bar, the claims would fail due
to their lack of merit because petitioner could not be
prejudiced by counsel's failure to bring forth meritless
claims on appeal.
7
10
Assuming arguendo that these claims are
reviewable, they are without merit, as set
forth below.
2.
defendant and, therefore, was sure to
apprehend the defendant before the crime
was completed. Id In Medina, the Court
declined to reduce the base level of
defendant's arrest for armed robbery of an
office building because the defendant had
obtained weapons, planned the date of the
robbery, possessed blueprints of the office,
arrived at the building with getaway car, and
approached the building with masks; thus, the
defendant would have completed the crime
but for police intervention. Id at 419; see
also Hernandez v. United States, No. 02 CV.
1663 (JGK), 2003 WL 223467, at *6
(S.D.N.Y. Jan. 31, 2003) (declining to issue
sentencing reduction when defendant was
arrested, money in hand, when about to
purchase cocaine from undercover informant,
because circumstances indicated that illegal
sale would have been completed but for
police intervention).
Merits Analysis
a. Three-Point Reduction
Section 2Xl.l(b)(1) of the United States
Sentencing Guidelines provides that if a
substantive crime is merely attempted, rather
than completed, the court must decrease the
base level of the offense by three unless (1)
"the defendant completed all the acts he
believed necessary for successful completion
of the substantive offense" or (2) "the
circumstances demonstrate that the defendant
was about to complete all such acts but for
apprehension or interruption by some similar
event beyond the defendant's control."
U.S.S.G. § 2Xl.lb(2); see United States v.
Medina, 74 F.3d 413, 418 (2d Cir. 1996).
Whether the reduction is granted depends
solely on the conduct of the defendant, not
whether the intervention of government
agents made it unlikely to succeed - many
preexisting circumstances doom a conspiracy
without making the defendants any less
culpable. Medina, 74 F.3d at 418. If an
individual was about to complete a crime, he
is not entitled to a sentencing reduction, even
if the government had been monitoring the
Petitioner alleges that because the final
fraudulent transaction, in which he planned to
defraud a brokerage firm out of$285,000 via
the same scheme he had been already using
to defraud brokerage firms, ultimately did not
go through due to Seiden's cooperation with
the government, he is entitled to the reduction
for partially completed offenses. (Pet'r Mem.
at 9.) However, petitioner finds himselfin the
same circumstances as the defendants in
Strickland for analyzing such claims as to trial
counsel. See, e.g., Mayo v. Henderson, 13 F.3d 528,
533 (2d Cir. 1994).. As noted supra, under the
Strickland standard, a petitioner alleging ineffective
assistance of appellate counsel must prove both: (I)
that appellate counsel was objectively unreasonable in
failing to raise a particular issue on appeal, and (2) that
54 (1983)). As the Supreme Court has noted, "[!)his
process of 'winnowing out weaker arguments on
appeal and focusing on' those more likely to prevail,
far from being evidence of incompetence, is the
hallmark of effective appellate advocacy." Smith v.
Murray, 477 U.S. 527, 536 (1986) (quoting Jones, 463
U.S. at 751-52).
Each of petitioner's claims regarding sentencing
are without merit for the reasons set forth below in
section 111.8.2. Because petitioner's § 2255 claims are
meritless, appellate counsel did not fall below an
objective standard of reasonableness in failing to raise
those same claims on appeal. Because petitioner
cannot prove this first prong of the Strickland
standard, an ineffective assistance of appellate counsel
claim would fail.
absent counsel's deficient performance, there was a
reasonable probability that the defendant's appeal
would have been successful. See Aparicio v. Artuz,
269 F.3d 78, 95 (2d Cir. 2001); Mayo, 13 F.3d at 533.
Appellate counsel "need not (and should not)
raise every non-frivolous claim, but rather may select
from among them in order to maximize the likelihood
of success on appeal." Smith v. Robbins, 528 U.S. 259,
288 (2000) (citingJonesv. Barnes, 463 U.S. 745,750-
11
Medina and Hernandez. Petitioner had
already taken each of the steps he had
previously taken when defrauding brokerage
firms with Seiden- petitioner had an inflated
stock price in mind and contacted his coconspirator to place a fake buy order for
petitioner's stock so that he could sell it at an
inflated price. (See Gov't Exs. 4-9.) Thus, the
substantive crime would have been
completed but for the government's
intervention. Accordingly, petitioner is not
entitled to a reduction under U.S.S.G. §
2XI.I(b).
b.
when a single district judge is dealing with
multiple defendants in a single case (or
indictment)").
The record from the sentencing hearing
makes clear that the evidence elicited at trial
sufficiently proved that petitioner was fully
aware of his co-conspirators' fraudulent
actions from the start of their collaboration.
(See Ts. at 10, 14, 16-18.) Accordingly, the
Court had justification for apportioning full
liability to petitioner. Further, the court could
not have imposed joint and several liability
on petitioner and his co-conspirator in any
event because Seiden was convicted in a
separate case and sentenced by a different
judge.
Apportionment of Liability
Petitioner argues that the Court should
have ordered his co-conspirator and him
jointly and severally liable for restitution,
rather than finding petitioner liable in full.
(Pet'r Mem. at 10-11.) Under 18 U.S.C. §
3664(h), "[i]f the court finds that more than I
defendant has contributed to the loss of a
victim, the court may make each defendant
liable for payment of the full amount of
restitution or may apportion liability among
the defendants to reflect the level of
contribution to the victim's loss and
economic circumstances of each defendant."
However, joint and several liability may be
imposed only when a single district judge is
dealing with multiple defendants in a single
case. A judge may not apportion liability
among individuals "not charged in the
indictment or tried with (the] defendant."
United States v. Lucien, 347 F.3d 45, 54 (2d
Cir. 2003) (finding that district court could
not make defendant's restitution obligation
joint and several with uncharged entities
upon whom court then lacked "authority" to
impose restitution order, despite the fact that
those out-of-court entities were benefactors
of defendant's health care fraud); United
States v. Aumais, 656 F.3d 147, 156 (2d Cir.
2011) (Section 3664(h) "implies that joint
and several liability may be imposed only
The second apportionment claim
petitioner makes is that the Court erred in
finding him liable for the fraud's entire
resultant loss. (Pet'r Mem. at 11-13.)
Petitioner argues that the Court erred in
attributing conduct to him that took place
before he joined the conspiracy. /d. The
Court disagrees.
When a court finds that a defendant has
participated in jointly undertaken criminal
activity, it may hold one defendant liable for
the actions of another as long as two specific
findings are made: (I) that the acts were
within the scope of the defendant's
agreement, and (2) that they were foreseeable
to the defendant. United States v. Johnson,
378 F.3d 230, 238 (2d Cir. 2004); see also
United States v. Eisner, 431 F. App'x 23,2627 (2d Cir. 2011) (holding one defendant
fully liable for the losses attributed to his
Ponzi scheme because he continued to
participate in and profit from it). This inquiry
into the scope of what a defendant actually
agreed to undertake and the specific conduct
and objectives embraced by the defendant's
agreement can be based upon either explicit
agreements or implicit agreements inferred
12
from conduct. United States v. Studley, 47
F.3d 569, 575 (2d Cir. 1995).
SctoRDE~D.
s/ Joseph F. Bianco
As previously discussed, the sentencing
record clearly states the grounds for finding
petitioner fully liable for restitution. The
Court determined that even if petitioner did
not know exactly how Seiden was defrauding
brokerage houses, he clearly understood that
fraudulent means were being used since the
beginning of their cooperation. (See Ts. at 1618.) Accordingly, the fact that others would
lose money if petitioner sold his stock at a
falsely inflated price was foreseeable to him.
!d. Moreover, the record demonstrates that
petitioner played a significant role in the
scheme's development and execution as just
one of two moving parts in the fraud,
supporting a finding of foreseeability of the
extent of the resultant loss and demonstrating
that the scope of petitioner's agreement with
Seiden encompassed those losses. Because
the record demonstrates that both prongs of
18 U.S.C. § 3664(h) are satisfied, petitioner
can be held liable for the losses Seiden caused
in connection with their scheme in addition to
the losses he, himself, caused.
.
Dated: November 24, 2015
Central Islip, New York
•••
Petitioner is proceeding pro se.
Respondent is represented by Robert L.
Capers, United States Attorney, Eastern
District of New York, by Justin David Lerer
and Tyler Joseph Smith, 271 Cadman Plaza
East, Brooklyn, NY 1120 I.
Because finding petitioner jointly and
severally liable for restitution would have
been improper, and the sentencing transcript
demonstrates
individualized
findings
pertaining to the scope of petitioner's
agreement with his co-conspirator and the
foreseeability of the full losses caused by the
scheme to defraud, both of petitioner's claims
related to the imposition of full liability must
fail on the merits.
IV.
IANCO~
CONCLUSION
For the foregoing reasons, the court finds
that petitioner has demonstrated no basis for
relief under 28 U.S.C. § 2255. Therefore, the
petition for a writ of habeas corpus is denied.
13
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