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United States v. Miller

United States District Court, District of Columbia

December 3, 2018


          MEMORANDUM OPINION (NOVEMBER 30, 2018) [DKT. ## 155, 180, 184]

          Richard J. Leon Judge.

         On November 20, 2007, after a nine-day trial, defendant Robert Frank Miller ("Miller" or "the defendant") was found guilty by a jury of nine counts of travel fraud and two counts of wire fraud. Miller appealed and raised a number of challenges to his conviction and sentence, including claims that his trial counsel was constitutionally deficient. Our Circuit Court affirmed Miller's conviction and sentence, but it remanded his ineffective-assistance-of-counsel ("IAC") claims for me to consider in the first instance. Following the remand, Miller filed a motion clarifying the specifics of his IAC claims, and, pursuant to an agreement with the Government, Miller supplemented the claims he had raised on appeal with new ones. After the initial round of briefing, I held three days of evidentiary hearings on September 12 and 13, and October 23, 2017, after which I accepted post-hearing briefing-in the form of proposed findings of fact and conclusions of law-and heard argument on Miller's IAC claims. I then accepted post-argument briefing that was ultimately completed on February 5, 2018.

         Having closely reviewed the evidence presented during the hearings and in the parties' extensive briefing. Miller's IAC claims are DENIED for the reasons set forth below.


         Over a less than ten-month period in late 2003 and early 2004, Miller, through his company American Funding and Investment Corporation ("AFIC"), defrauded dozens of investors and prospective home buyers out of more than $500, 000. See, e.g., 11/16/07 Trial Tr. 985-87 [Dkt. # 72]; Judgment 6-8 [Dkt. # 124]. He operated AFIC from July 2003 through his arrest on April 8, 2004, all the while purporting to offer both high-yield real estate investments and home-buying assistance for individuals with subprime credit. United States v. Miller, 799 F.3d 1097, 1100 (D.C. Cir. 2015). In its opinion affirming his conviction and sentence, our Circuit Court summarized Miller's fraudulent scheme as follows:

First, Miller obtained cash investments from individuals who thought AFIC would invest their money in pools of investment real estate. He told those investors that AFIC would use the invested capital to buy and refurbish foreclosure properties and then resell those properties, at a profit, to home buyers with poor credit. Second, Miller obtained cash "down payments" from prospective home buyers with poor credit. He told those home buyers he would help secure mortgages for them and then would use the down payment funds to buy homes they had preselected.

Id. The "mortgage side" of the scheme involved "find[ing] buyers for the properties that [Miller] would acquire from the monies that he collected from the investor side." 11/8/07 Trial Tr. 53-54 [Dkt. # 67]. Potential buyers were told they could purchase "regardless of their credit history and with little or no money down," because Miller would provide loans through his purported mortgage company. Id. at 48, 54-56.

         Upon securing the investments, however, Miller neither purchased real estate nor secured or funded any mortgages. Miller, 799 F.3d at 1100. Instead, he used the money to sustain and promote AFIC's purported business, taking out newspaper advertisements to attract additional investors, paying rent for AFIC's "extravagant" office space on Pennsylvania Avenue in downtown Washington, D.C., as well as for office equipment and payroll, and even making partial distributions to early investors who demanded recompense. Id.; 11/16/07 Trial Tr. 923. Miller also used AFIC investor funds to cover his own personal expenses at bars, restaurants, and hotels. Miller, 799 F.3d at 1100; 11/16/07 Trial Tr. 994-1002. The majority of AFIC's investors and prospective home buyers lost their entire investments. 11/16/07 Trial Tr. 980-85; Gov't Trial Ex. 27A.

         One of AFIC's early investors was Richard Chisholm, an unemployed real-estate agent. 11/8/07 Trial Tr. 44-45, 69-70. Miller described his real estate investment plan to Chisholm in September 2003, explaining that he would match investments of $5, 000, use the $10, 000 to "rehab" properties he purchased, sell the properties for at least a $25, 000 profit, and split the profits with his investors. Id. at 44-46. Chisholm agreed to join AFIC as an affiliate, and he worked there from September to November 2003. Id. at 42-43, 46-47, 57-58, 77-78. Chisholm also invested $5, 000 of his own money, for which Miller promised a "guaranteed" return of $12, 500 within 90 days. Id. at 71, 73-74. During the three months that Chisholm worked at AFIC, he did not see Miller purchase any homes. He saw no evidence that Miller even owned a mortgage company. Id. at 56, 78-79. Chisholm lost his $5, 000 investment. Id. at 77-80.

         Another investor, Yerusalem Woldeselassie, invested $5, 000 with Miller to help finance the purchase and sale of fifteen properties in Baltimore, which he represented were "presently being conveyed to" AFIC. Id. at 145, 155-58. Miller told Woldeselassie that within 90 days she would receive a $200, 000 profit, or at least a return of her principal. Id. at 146-47. In fact, he had not even offered to buy the fifteen Baltimore properties. 11/9/07 Trial Tr. 189-91, 193-95 [Dkt. # 68]. After 90 days, Woldeselassie wrote to Miller demanding repayment of her principal; Miller did not respond, and Woldeselassie lost her investment. 11/8/17 Trial Tr. 160-64.

         Jimmy Cheng invested in AFIC after reading a Washington Post advertisement promising a "guaranteed" fifteen percent return on a $5, 000 investment, "secured by real estate." 11/13/07 Trial Tr. 408-09 [Dkt. # 69]. Miller invited Cheng to AFIC's Pennsylvania Avenue offices in November 2003 and gave Cheng the "grand tour." Id. at 411-12. Miller introduced Cheng to employees he referred to as real-estate agents and loan officers, which reassured Cheng that AFIC was a legitimate business. Id. at 412-20. Cheng invested $25, 000 in AFIC on Miller's promise that Cheng would receive at least $25, 000 in profit within 90 days. Id. at 414, 421-24. Cheng never heard from Miller again, and he lost his entire investment. Id. at 432-35. The same fate befell AFIC investors Lawrence Haye, Brenda Alston, and Denise McQueen. 11/9/07 Trial Tr. 322- 24, 328-31; 11/13/07 Trial Tr. 447-55; 11/14/07 Trial Tr. 479-88, 449-50, 455-56, 489 [Dkt. # 70].

         On the mortgage side of AFIC's operation, Miller placed advertisements offering home-buying help for people with poor credit and secured down payments from individuals for whom he offered to purchase homes and obtain mortgages for the balances. 11/16/07 Trial Tr. 885-88, 890-93, 920-23, 926-29. Anthony Wilburn and Charlene Peters gave Miller down payments of $4, 500 and $7, 200, respectively. Id. at 890-91, 893-95, 925-26, 932-35. Both Wilburn and Peters lost their deposits, and neither got a home. Id. at 896, 937. When an AFIC employee informed Miller that Peters and her family were at risk of becoming homeless and asked that he return her down payment, Miller replied, "I can't save the world. They can go live with relatives." 11/15/07 Trial Tr. 795 [Dkt. #71].

         In late 2003, Cary Greene and Shawn Campbell met with Miller about Miller potentially purchasing their 65 rental properties in Baltimore, which were held by Queen Anne, LLC. 11/9/07 Trial Tr. 211-14. Greene provided Miller with a portfolio of photographs, descriptions, appraised values, and rent rolls for the properties, and offered to sell the properties to Miller for $2.2 million. Id. at 216-22. Miller declined to put down a deposit to buy the properties-and Greene and Campbell never heard from him again-but Miller kept the portfolio, which he then used to solicit and obtain investments from Anthony Stephen Roberts ($15, 000), Robert Debnam ($143, 000), and Haye ($25, 000) under the pretense that he already had acquired the properties. Id. at 224, 226, 261-64, 268-71, 276-77, 279-80, 332-45; 11/14/07 Trial Tr. 554-56; 564-66; 569. In the weeks following the investments, Miller became "harder and harder to reach." 11/9/07 Trial Tr. 289-91, 349-50; 11/14/07 Trial Tr. 561. Then, in late March 2004, Miller told Roberts, Debnam, and Haye that he would soon be closing on the properties and that on April 9, 2014, they would be paid "in full." 11/9/07 Trial Tr. 287-89, 353-56. Roberts and Haye lost their entire investment; Debnam lost all but $10, 000, which Miller paid-using funds obtained from another AFIC investor-after Debnam threatened to contact the local media to do an "expos[e]." Id. at 291-93, 359; 11/14/07 Trial Tr. 561-62; 11/19/07 Trial Tr. 1038 [Dkt. # 73].

         In February 2004, Miller spoke with Charles Wilson, the president of Foxworthy, Inc., which owned 22 rental properties in Georgia. 11/14/07 Trial Tr. 492-94. On March 12, 2004, Miller contracted to buy the Georgia properties from Wilson for $750, 000, and he made a $10, 000 deposit. Id. at 495-98, 496-99, 515-16. The deal was scheduled to close on May 12, 2004. Id. at 495-98, 515-16. On March 26, 2004. Miller enlisted an AFIC employee to send a form letter under the employee's signature to the tenants of the Georgia properties, which stated, among other things, that AFIC had "acquired the property you presently live in" and that the tenants should send rental payments from February through April 2004 to AFIC within 10 days or face "IMMEDIATE EVICTION PROCEEDINGS." Id. at 587-93, 545-46, 588-90, 633-34, 642; Gov't Trial Ex. 26L, Attachment C. The letter also offered to help the tenants obtain a mortgage through AFIC to purchase their present home and enclosed a mortgage application. Id.

         On April 6, 2004, having learned of Miller's letter to the tenants of his properties, Wilson sued Miller and AFIC. 11/14/07 Trial Tr. 500-01. Wilson's complaint noted that Foxworthy had been contacted by the Secret Service. Id. at 523, 597-98. On Thursday, April 8, 2004, Miller directed several AFIC employees to place 22 boxes of files and records in a Ford Explorer that Miller's secretary, Tonya Smith, had borrowed from her mother and parked in the building garage. 11/15/07 Trial Tr. 713-15; Stipulation of Facts ("Stipulation") 1 [Dkt. #20-1]. Miller told AFIC employees that he was leaving for the weekend to organize the files and that they should not come into work on Friday. 11/15/07 Trial Tr. 713-14.

         On April 8, 2004, Secret Service Special Agent Anthony Saler learned from an AFIC investor that Miller was in the process of moving files out of AFIC's offices and that he had told AFIC employees not to come to work the next day (when Miller was due to meet with an AFIC investor). Aff. of Anthony Saler in Supp. of Search Warrants ("Saler Aff") 7 [Dkt. # 19-1]. Agent Saler was concerned that Miller may be attempting to flee or destroy evidence. Id. At approximately 5:30 p.m. that evening, Agent Saler and other law enforcement officers arrested Miller at AFIC's offices on unrelated outstanding Maryland state arrest warrants. Id.; Stipulation 1. Agent Saler spoke to Smith, who agreed to drive the Ford Explorer containing the 22 boxes of records to the Secret Service Washington Field Office, where the files were turned over. Saler Aff. 7. On April 27, 2004, Agent Saler obtained a warrant to search the contents of the 22 boxes as well as AFIC's offices. Supp. App. at 433, Miller, 799 F.3d 1097 (No. 08-3116).

         On April 22, 2005, a grand jury indicted Miller on nine counts of travel fraud, 18 U.S.C. § 2314, and two counts of wire fraud, 18 U.S.C. § 1343. Indictment [Dkt. # 1]. Miller was found guilty as charged by a jury on all counts on November 20, 2007, following a nine-day trial. On December 10, 2008, 1 sentenced Miller to 204 months' imprisonment and ordered him to pay $495, 954.49 in restitution. Judgment 3, 6. From pretrial through sentencing, assistant federal public defender Jonathan Jeffress served as Miller's lead counsel. 9/13/17 Hr'g Tr. 183, 229 [Dkt. # 174]. Miller appealed his conviction and sentence, arguing that I erred in denying Miller's pretrial motion to suppress the 22 boxes seized from the Ford Explorer, that his trial counsel was ineffective in his handling of the suppression claim and in failing to move for dismissal of his indictment for violation of the Speedy Trial Act ("STA"), that I made certain evidentiary errors, that the Government made certain improper remarks during its closing argument, and that I erroneously ordered that Miller's federal sentence run consecutive to his Maryland state sentence for separate crimes. Our Circuit Court rejected Miller's challenges to his conviction and sentence but remanded his IAC claims for me to consider in the first instance. Miller, 799 F.3d at 1108.

         Following our Circuit's remand, I held a status hearing on March 2, 2016, and set a briefing schedule. On April 18, 2016, Miller filed a motion specifying and-pursuant to an agreement with the Government and in service of judicial economy- supplementing his IAC claims, which the Government opposed on May 18, 2006. [Dkt. ## 155, 157]. Miller then filed a reply brief followed by a supplemental brief on June 24, 2016. [Dkt. ## 158, 160]. I held three days of evidentiary hearings on September 12 and 13, and October 23, 2017, during which only Miller and Jeffress testified. The parties were allowed to file post-hearing proposed findings of fact and conclusions of law, which they submitted on December 15, 2017. [Dkt. ## 179, 180]. Three days later, on December 18, 2017, 1 heard argument on Miller's IAC claims, after which I permitted the parties to submit post-argument briefing to address any remaining issues. Those briefs were filed on February 5, 2018. [Dkt. ## 183, 184].


         The Government contends that Miller's IAC claims are subject to the heightened standard set forth in 28 U.S.C § 2255, which governs collateral attacks raised by federal prisoners on their sentences. Gov't's Proposed Findings of Fact and Conclusions of Law ("Gov't's Br.") 4 [Dkt. # 179]; see United States v. Pollard, 959 F.2d 1011, 1020 (D.C. Cir. 1992) (defendant raising "a § 2255 collateral challenge" must "show a good deal more than would be sufficient on a direct appeal from his sentence"). Miller, however, is not collaterally attacking his federal sentence. Our Circuit remanded Miller's IAC claims after his direct appeal for this Court to consider them in the first instance. See Miller, 799 F.3d at 1103 (D.C. Circuit's "general practice" is to remand colorable IAC claims "raised for the first time on direct appeal"). Indeed, Miller and the Government agreed that Miller would raise "all of his potential collateral attack claims" at this stage precisely to avoid the burden of litigating the IAC issue a second time in the context of a § 2255 motion. 3/2/16 Hr'g Tr. 7 [Dkt. # 164] (emphasis added); see also 12/18/17 Hr'g Tr. 7 (Government counsel stating that "[e]ven though this is not technically a 2255, it does address claims of ineffective assistance of counsel" for purposes of efficiency); Def.'s Proposed Findings of Fact and Conclusions of Law ("Def.'s Br.") 1 [Dkt. # 180-1]. That agreement, however, did not convert Miller's remanded IAC claims into a collateral attack under § 2255.

         Miller's IAC claims are thus governed by the usual standard applicable to IAC claims raised on direct appeal. See Strickland v. Washington, 466 U.S. 668 (1984); United States v. Gr ay-Burr iss, 251 F.Supp.3d 13, 17 (D.D.C. 2017) (applying Strickland standard only following remand of IAC claims after direct appeal). I trust that the Government's mistake regarding the applicable legal standard was earnest.

         I. Ineffective Assistance of Counsel

         "To prove constitutionally defective representation, the defendant must show: (1) 'that counsel's performance was deficient,' and (2) 'that the deficient performance prejudiced the defense.'" United States v. Cassell, 530 F.3d 1009, 1011 (D.C. Cir. 2008) (quoting Strickland, 466 U.S. at 687). The defendant shoulders the burden of proof as to both elements. See, e.g., Knowles v. Mirzayance, 556 U.S. 111, 122 (2009) ("[A] defendant must show both deficient performance and prejudice in order to prove that he has received ineffective assistance of counsel[.]"). As such, the "[f]ailure to make the required showing of either deficient performance or sufficient prejudice defeats the ineffectiveness claim," and courts have discretion to dispose of the claim without "addressing] both components of the inquiry if the defendant makes an insufficient showing on one." Strickland, 466 U.S. at 697, 700; see also United States v. Gwyn, 481 F.3d 849, 854 (D.C. Cir. 2007) (because defendant "suffered no prejudice from trial counsel's [alleged deficiency], we need not decide whether counsel's performance in this respect was objectively unreasonable").

         Strickland's deficiency prong requires the Court to determine whether counsel acted "reasonabl[y] under prevailing professional norms . . . considering all the circumstances." Strickland, 466 U.S. at 688; see Padilla v. Kentucky, 559 U.S. 356, 366 (2010) (deficiency is "necessarily linked to the practice and expectations of the legal community"). As a general matter, "the standard for constitutionally effective representation is not overly rigorous." United States. Catlett, 97 F.3d 565, 570 (D.C. Cir. 1996); see also Hinton v. Alabama, 571 U.S. 263, 272 (2014) (attorney performance need only "meet[ ] . . . a minimal standard of competence"). The Court does not sit as an armchair quarterback, nitpicking counsel's gameday performance from the bench. To the contrary, "[judicial scrutiny of counsel's performance must be highly deferential," and courts must be vigilant against the "all too tempting" lure "to second-guess . . . counsel's defense after it has proved unsuccessful." Strickland, 466 U.S. at 689 (courts should make "every effort... to eliminate the distorting effects of hindsight"). There is a "wide range of reasonable professional assistance," and there are "countless ways to provide effective assistance in any given case." Id. These realities of legal representation give rise to a "presumption that, under the circumstances, the challenged action might be considered sound trial strategy." Id. Surmounting this presumption is, in the Supreme Court's words, "never an easy task." Padilla, 559 U.S. at 371; see Strickland; 466 U.S. at 690 ("[Strategic choices made after a thorough investigation of law and facts relevant to plausible options are virtually unchallengeable.").

         To establish prejudice under Strickland, a defendant must "affirmatively prove" that there exists "a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Strickland, 466 U.S. at 693-94. This is not to say that any likelihood of an alternative outcome will suffice. A "reasonable probability" in the Strickland context is one that is "sufficient to undermine confidence in the outcome." Id. at 694. The prospect of a different result must "be substantial, not just conceivable." Harrington v. Richter, 562 U.S. 86, 112 (2011). While not an exact analogue, the requisite showing approaches a "more-probable-than-not standard." Id. "At bottom, defense counsel's error must have been 'so serious as to deprive the defendant of a fair trial, a trial whose result is reliable.'" United States v. Brinson-Scott,714 F.3d 616, 623 (D.C. Cir. 2013) (quoting Strickland, 466 U.S. at 687). As such, our Circuit ...

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