Walji v. USA

Filing 5

MEMORANDUM OPINION & ORDER #105642....Waljis November 19, 2014 petition is denied. In addition, a certificate of appealability shall be not granted. The petitioner has not made a substantial showing of a denial of a federal right and appellate review is, therefore, not warranted. Tankleff v. Senkowski, 135 F.3d 235, 241 (2d Cir. 1998); Rodriquez v. Scully, 905 F.2d 24, 24 (2d Cir. 1990). Pursuant to 28 U.S.C. 1915(a)(3), any appeal from this Opinion and Order would not be taken in good faith. Coppedge v. United States, 369 U.S. 438, 445 (1962). The Clerk of Court shall close the case. (Signed by Judge Denise L. Cote on 7/2/2015) (gr) Modified on 7/10/2015 (ca).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
ABDUL WALJI,
:
Movant,
:
:
-v:
:
:
UNITED STATES OF AMERICA,
Respondent.
:
:
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14cv9273(DLC)
13cr217 (DLC)
MEMORANDUM
OPINION & ORDER

DENISE COTE, District Judge:
On November 19, 2014, Abdul Walji filed a petition pursuant
to 28 U.S.C. § 2255 for a writ of habeas corpus.

He seeks to

vacate his conviction on the ground that his trial counsel was
ineffective.

Walji claims that he would have entered an earlier

plea of guilty if properly represented.

Walji also complains

that his attorney failed to object at his sentencing to an
improper loss calculation.

Walji contends that counsel’s errors

led to the imposition of a longer sentence.

For the following

reasons, the petition is denied.
BACKGROUND
Walji was charged in a complaint on December 10, 2012.

In

an indictment filed on March 21, 2013, he was charged with three
counts of wire fraud, and one count each of securities fraud,
commodities fraud, and conspiracy to commit securities and wire
fraud.

These charges related to the investment firm Arista LLC

(“Arista”) operated by Walji and co-defendant Reniero Francisco

(“Francisco”).

Through Arista, Walji and Francisco collected

approximately $10 million from 40 investors through
misrepresentations.

The defendants embezzled funds to which

they were not entitled and lost nearly the entirety of the
investor contributions.

Walji was arraigned on these charges on

March 27, and was represented by retained counsel (“Counsel”).
Beginning in May, agents of the FBI began interviewing
investors victimized by Walji in a second scheme known as the
Allied Benefits/Stone Lamm fraud (“Allied Benefits” fraud).
Through his company Calpension, Inc., Walji administered pension
and welfare plans.

Walji made false representations about the

nature of the investments he had made and would make with the
plan funds and diverted client funds from those plans by means
of a Ponzi scheme, causing losses to approximately 40 clients in
an aggregate amount exceeding $11 million.
After Walji participated in a proffer session with the
Government on June 14, the Government advised Counsel that it
would not offer Walji a cooperation agreement.

Walji then

waived indictment on July 2, and entered a plea of guilty
pursuant to a plea agreement with the Government (“Agreement”).
The superseding information contained three charges, two of
which stemmed from the Arista fraud, and one of which stemmed
from the Allied Benefits fraud.

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Although the Agreement included a stipulated loss amount
not exceeding $20 million and a guidelines range of 121 to 151
months’ imprisonment, the Presentence Report (“PSR”) found that
the loss amount exceeded $20 million and that the guidelines
range was 151 to 188 months’ imprisonment.

Alji’s sentencing

submission did not dispute the loss amount calculated in the
PSR, but did ask for a non-guidelines sentence pursuant to 18 §
U.S.C. § 3553(a).
On November 15, Walji was sentenced principally to a term
of imprisonment of 151 months.

The Court adopted the PSR

guidelines calculation and declined to impose a non-guidelines
sentence.

A sentence of 60 months and 120 months was entered on

the counts related to the Arista scheme.

A sentence of 151

months was entered on the count related to the Allied Benefits
fraud.

The sentences were imposed to run concurrently.

The judgment of conviction was entered on November 20,
2013.

Walji did not appeal his conviction.

Walji filed this petition on November 19, 2014.

The

Government has opposed the petition, and on April 10, 2015,
Walji submitted a reply in support of his petition.
DISCUSSION
The standard for an ineffective assistance of counsel claim
is well settled:

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In order to succeed on a claim of ineffective
assistance of counsel, a claimant must meet the twopronged test established by [Strickland v. Washington,
466 U.S. 668 (1984)]: (1) he must show that counsel's
performance was deficient, so deficient that, in light
of all the circumstances, the identified acts or
omissions were outside the wide range of
professionally competent assistance; and (2) he must
show that the deficient performance prejudiced the
defense, in the sense that there is a reasonable
probability that, but for counsel's unprofessional
errors, the result of the proceeding would have been
different.
Gonzalez v. United States, 722 F.3d 118, 130 (2d Cir. 2013)
(citation omitted). “The [ineffectiveness] claim must be
rejected if the defendant fails to meet either the performance
prong or the prejudice prong.”

Id. (citation omitted).

As clarified by his reply, Walfi contends in his first
claim that his Counsel was ineffective for failing to advise him
to promptly enter a plea of guilty to the Arista fraud charges
following his arrest on the complaint or his indictment.

Since

the Government did not begin its investigation of the Allied
Benefits fraud in earnest until May of 2013, Walji argues that
an entry of a plea before May would have resulted in a shorter
sentence being imposed since the sentence would have been based
solely on his plea of guilty to the charges stemming from the
Arista scheme.
The first claim fails because Walji has failed to
demonstrate prejudice.

Walji does not dispute that the

Government had learned of the Allied Benefits fraud in early
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2013.

Victims began to contact the Government as soon as they

learned of the Arista charges that had been filed against Walji.
Moreover, Walji does not dispute that the Government would have
compiled sufficient evidence to indict him for and convict him
of the Allied Benefits fraud even if he had already entered a
plea of guilty to the Arista fraud.

He also does not suggest

that he is innocent of any of the charges filed against him and
does not argue that he would have chosen to contest the Allied
Benefits charges by proceeding to trial instead of entering a
plea of guilty.

As a consequence, Walji would have been charged

with and sentenced for the Allied Benefits fraud even if he had
promptly entered a plea of guilty to the Arista fraud.
Moreover, Walji has not suggested that a sentence on the
Allied Benefits fraud, even if imposed in a separate, as opposed
to consolidated, sentencing proceeding, would have resulted in a
total sentence shorter than the one he is now serving.
Accordingly, Walji’s first claim for ineffective assistance of
counsel is denied for his failure to show that he was prejudiced
by his failure to enter a more expedited plea to the Arista
fraud charges alone.
Walji’s second claim is that his attorney should have
advised him not to enter a plea agreement with the Government so
that Walji could contest the Government’s calculation of a loss
amount.

Walji contends that the total loss amount for all of
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the fraudulent activity underlying his three counts of
conviction was $1.5 million because the loss amount is properly
calculated as the amount by which he was unjustly enriched.
Walji begins with the compensation he took and the funds he
improperly diverted for his personal use, which he calculates as
$4.4 million.

From this he subtracts fees of $900,000 that he

“properly” earned and $2 million in seized assets, resulting in
a net loss of $1.5 million.
This second claim fails as well, for at least two separate
reasons.

In making his second claim, Walji does not contest

that the investors in his schemes invested over $20 million, and
that those amounts are properly recorded in the PSR.

As

indicated in the PSR, twenty-two levels are added to an offense
level when the total loss from the frauds is more than $20
million.

Sentencing Guidelines 2B1.1(b)(1)(L).

As explained in

Application Note 3, loss is measured as the greater of actual
loss or intended loss from an offense.

It is only measured as

the gain from the offense when the loss cannot be reasonably
determined.

See United States v. Byors, 586 F.3d 222, 225-26

(2d Cir. 2009).

Accordingly, counsel did not err in this case

in failing to argue that the measure of loss should be Walji’s
unjust enrichment rather than the actual and intended loss
experienced by the investors.

Because of this result, it is

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unnecessary to discuss whether Walji has properly calculated his
gain from his offenses.
In addition, Walji has again failed to show that he was
prejudiced by his Counsel’s advice that he enter the Agreement
with the Government, which included a loss calculation higher
than he now advocates.

As it turned out, the PSR rejected the

loss calculation recited in the Agreement.

And, at the

sentencing, the Court adopted the PSR’s loss calculation.

As

part of the sentencing proceeding, the Court also ordered Walji
to pay restitution of over $21 million.
CONCLUSION
Walji’s November 19, 2014 petition is denied.
a certificate of appealability shall be not granted.

In addition,
The

petitioner has not made a substantial showing of a denial of a
federal right and appellate review is, therefore, not warranted.
Tankleff v. Senkowski, 135 F.3d 235, 241 (2d Cir. 1998);
Rodriquez v. Scully, 905 F.2d 24, 24 (2d Cir. 1990).

Pursuant

to 28 U.S.C. § 1915(a)(3), any appeal from this Opinion and
Order would not be taken in good faith.
States, 369 U.S. 438, 445 (1962).

Coppedge v. United

The Clerk of Court shall

close the case.
Dated:

New York, New York
July 2, 2015
__________________________________
DENISE COTE
United States District Judge
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