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Lindley v. United States

United States District Court, D. Massachusetts

May 16, 2018

J. DANIEL LINDLEY, Petitioner,
v.
UNITED STATES OF AMERICA, Respondent.

          MEMORANDUM AND ORDER ON FIRST AMENDED MOTION UNDER 28 U.S.C. § 2255 TO VACATE, SET ASIDE, OR CORRECT SENTENCE (DOC. NO. 1024)

          Leo T. Sorokin United States District Judge

         J. Daniel Lindley, an attorney convicted of crimes arising from his participation in a mortgage fraud scheme, filed a motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. Doc. No. 1024. He raised a litany of challenges to the performance of his trial counsel, attorney Robert Sheketoff.[1] The government opposed the motion. Doc. No. 1108. Lindley replied with a “Request for Findings and Rulings.” Doc. No. 1163. The Court held an evidentiary hearing on certain aspects of Lindley's motion on December 13, 2017.[2] Doc. No. 1236. Having considered all of the parties' relevant submissions, the evidence presented at the hearing, and the record of Lindley's 2010 trial, the Court DENIES Lindley's motion.

         I. BACKGROUND

         A. Factual and Procedural History

         On June 2, 2010, after a six-week jury trial, Lindley was convicted of conspiracy, thirty counts of wire fraud, and fifteen counts of money laundering in violation of federal law. United States v. Appolon, 695 F.3d 44, 52 (1st Cir. 2012). Four co-conspirators tried with Lindley also were convicted of various offenses. Id. at 51-52. Lindley was sentenced on November 10, 2010 to seventy-two months' incarceration, followed by a term of supervised release. Doc. No. 662. He has served his sentence.[3] Doc. No. 1166.

         The charges arose from a “mortgage fraud scheme” that Lindley and his co-conspirators “devised and executed . . . between May 2005 and June 2006.” Appolon, 695 F.3d at 51. The First Circuit described the general scheme as follows:

[Lindley and his] coconspirators arranged for straw buyers to purchase real property at the asking price, falsified mortgage loan applications for the straw buyers to obtain financing for an artificially-inflated purchase price, and pocketed the difference. The loans secured by each of the properties involved in [the] scheme eventually went into default, and most of the properties were forced into foreclosure at huge losses for the lenders.

Id. at 51-52. As to Lindley's involvement, the First Circuit recounted the following relevant facts “in the light most favorable to the jury's verdict”:

Levine, a real estate attorney who had been suspended from the practice of law, shared office space in Boston with Lindley, another attorney. During Levine's suspension, he transferred components of his real estate practice in early 2005 to Lindley, who thereafter handled all property closings for Levine. . . .
In mid-2005, appellants hatched their mortgage fraud scheme, which began with [certain co-defendants identifying properties, negotiating prices, and recruiting straw purchasers]. Next, aided by Lindsay MacPhee (Levine's administrative assistant), Levine, Lindley, [and two co-defendants] prepared and filed falsified mortgage loan applications, purchase-and-sale agreements, and HUD-1 settlement statements on behalf of the straw buyers, misrepresenting the straw buyers' eligibility for the loans and overstating the purchase prices of the properties. . . . Once the falsified applications were approved by unsuspecting mortgage lenders, the loan proceeds were wired to Lindley's Interest on Lawyers Trust Account (“IOLTA”), from which the actual purchase prices were paid to the sellers and the excess was disbursed to the conspirators, usually after passing through bank accounts held by Levine. The loans secured by the properties were then permitted to default. Most of the properties were forced into foreclosure, and one was burned for insurance money.
In all, twenty-one properties were involved in appellants' scheme. For each of these properties, two separate HUD-1 forms were created, with one form reflecting the actual purchase price and the other reflecting the artificially-inflated price listed on the falsified mortgage loan application. In addition, separate closings, presided over by Lindley, were held for many of the properties in order to distance the straw buyers from the sellers and keep secret the existence of the scheme. By June 2006, the conspirators had earned nearly $2 million in illegal profits, commissions, and fees.

Id. at 52-53 (footnotes omitted).

         Lindley was represented at trial and sentencing by Sheketoff, an experienced criminal defense attorney. Doc. No. 1108-1 ¶ 6. His post-verdict motion for acquittal or a new trial was denied. Doc. No. 668. On direct appeal, represented by different counsel, Lindley challenged the sufficiency of evidence showing “he either had actual knowledge of or was willfully blind to the mortgage fraud scheme.”[4] Appolon, 695 F.3d at 55. On September 19, 2012, the Court of Appeals affirmed his convictions. Id. at 52.

         The Court of Appeals described evidence showing, inter alia: that Lindley had prepared conflicting documents with respect to one property, each stating that a different person would occupy the property; that Lindley had prepared an agreement providing he would hold certain funds in escrow to remedy building code violations on a property, but failed to disclose the agreement on the HUD-1 sent to the lender and ultimately transferred the funds to Levine's bank account instead of using them for repairs; that Lindley had paid a straw buyer from his IOLTA account without disclosing the payment on the HUD-1 sent to the lender; that Lindley had signed a check paying funds from his IOLTA account to a company controlled by Levine, under the guise of a “fictitious construction holdback”; and that Lindley had paid a seller who had discovered a difference in the purchase prices on HUD-1s provided to him and to the buyer, but had not disclosed the payment to the lender. Id. at 55-56. This, the First Circuit concluded, was “more than sufficient to prove his actual knowledge beyond a reasonable doubt.” Id. at 56-57.

         Alternatively, and “to emphasize the strength of the evidence against Lindley, ” the Court of Appeals summarized evidence regarding “a No. of warning signs or ‘red flags, ' that, uninvestigated, suggest Lindley's willful blindness.” Id. at 57. Examples of such “red flags” were: evidence that two sets of loan documents were prepared for all properties involved in the scheme, but not for other closings conducted by Lindley; and evidence that “Lindley conducted several closings involving repeat buyers, ” including buyers purporting to purchase multiple properties in a short period of time and signing occupancy affidavits for each of them. Id. From this evidence, the First Circuit found, a reasonable juror could have inferred Lindley “willfully blinded himself to the existence of appellants' scheme.” Id. at 57-58.

         As to both actual knowledge and willful blindness, the Court of Appeals noted the plausibility of Lindley's alternative explanations for the evidence-that each incident proved only his “inattentiveness and professional incompetence”-but concluded that the inferences Lindley urged were not the only ones jurors reasonably could have drawn, and that there was “unusually strong” “evidence of Lindley's knowing participation in appellants' scheme, ” or, alternatively, of his willful blindness to it. Id. at 56-58.

         Lindley filed a pro se § 2255 motion in September 2013. Doc. No. 913. He sought and obtained permission to amend his motion thereafter. Doc. Nos. 926, 1023. In his amended motion, Lindley levies a host of challenges to trial counsel's performance, faulting Sheketoff for:

1. Failing to communicate with Lindley;
2. Failing to move to sever Lindley's trial from that of his co-defendants;
3. Waiving Lindley's right to a speedy trial without Lindley's knowledge or consent;
4. Waiving a forfeiture trial without Lindley's knowledge or consent, and failing “to challenge the ex parte restraint of [Lindley's] wife's real estate”;
5. Failing to object to the admission of certain documents;
6. Failing to review all relevant evidence and conduct adequate investigation;
7. Failing to adequately cross-examine two key witnesses;
8. Requiring Lindley to supply him with paper and pens during trial and failing to order daily transcripts;
9. Failing to prepare an effective closing argument;
10. Waiving Lindley's right to a defense by resting without presenting any evidence;
11. Waiving Lindley's right to testify without Lindley's informed consent;
12. Failing to challenge the money laundering charges on grounds such as merger, sufficiency, and multiplicity;
13. Failing to move for special verdicts;
14. Having a conflict of interest stemming from demands for additional fees; and
15. Failing to prepare for and effectively argue at Lindley's sentencing.

Doc. No. 1024 at 3-10.

         The government opposed Lindley's motion generally and responded specifically to a No. of Lindley's contentions. Doc. No. 1108. Along with its brief, the government submitted an affidavit prepared by Sheketoff presenting a “global, ” but not “exhaustive, ” response to Lindley's assertions. Doc. No. 1108-1. Sheketoff attached emails between himself and Lindley that are pertinent to some of Lindley's complaints. Id.

         In February 2016, this matter was reassigned to the undersigned.[5] Doc. No. 1138. Lindley responded to the government's brief in April 2016 with a “Request for Findings and Rulings, ” supported by exhibits related to two grievances filed against Sheketoff with the Massachusetts Board of Bar Overseers (“BBO”) and an affidavit by Lindley. Doc. Nos. 1163, 1164. The Court construes these submissions as a reply in further support of the claims set forth in his § 2255 motion.[6]

         In an Order issued in February 2017, the Court scheduled an evidentiary hearing as to the following issues: “Whether trial counsel informed Lindley of his right to testify in his own defense, whether Lindley was otherwise aware of that right, and whether Lindley knowingly waived that right”; “Whether trial counsel was informed of and/or investigated Lindley's assertions that he attempted to report the mortgage fraud scheme at some point before it was discovered, and that he aborted a No. of closings which he believed were suspicious”; and “Whether trial counsel and Lindley had a dispute about fees during the trial, and to what extent any such dispute impacted trial counsel's performance of his duties on behalf of Lindley.” Doc. No. 1219 at 2. The Court set the hearing for March 10, 2017. Id. at 2-3. The hearing date was continued four times thereafter, each time at Lindley's request. See Doc. No. 1236 (describing the series of continuance requests).

         B. Evidentiary Hearing

         On December 13, 2017, the evidentiary hearing finally proceeded. Doc. No. 1246. It lasted nearly three hours and featured testimony by Lindley and Sheketoff.[7] See generally Draft Tr. Mot. Hr'g, United States v. Lindley, No. 08-cr-10121-LTS-2 (D. Mass. Dec. 13, 2017) [hereinafter Draft Tr.].

         Lindley testified first. He became an attorney in 1993. Id. at 14. He described his practice as primarily civil, and said his involvement in the charged mortgage fraud scheme arose from his desire to take over Levine's real estate practice after Levine's law license was suspended. Id. at 15-17. Lindley was exposed to criminal law in a law school class, during an internship with the Suffolk County District Attorney's office, and through “a couple of . . . minor legal criminal things” thereafter. Id. at 17. He “never did a criminal trial.” Id. He had civil trial and general legal research experience, he was aware that a criminal defendant has a constitutional right to testify, and he knew that the decision whether he should exercise that right in his trial was his to make. Id. at 26, 108-09.

         Lindley explained his version of certain events that were the subject of his trial, including when he claims he began to suspect the existence of the charged scheme and efforts he says he made to expose it. Id. at 19-23. Although he admittedly saw Sheketoff daily throughout the trial and sat next to him at the defense table, Lindley described his relationship with Sheketoff as virtually devoid of communication. E.g., Id. at 25-27. According to Lindley, Sheketoff did not respond to calls and emails, refused to review summaries Lindley prepared regarding the relevant real estate transactions, declined to review notes Lindley took throughout the trial, kept Lindley “in the dark” about pretrial matters, and “stunned” Lindley by resting without presenting defense evidence. Id. at 25, 27, 32-33, 37-38. Lindley also testified that Sheketoff twice said he should have charged Lindley a higher fee. Id. at 52.

         The government's cross-examination of Lindley, in part, concerned subjects it would have explored during the trial, had Lindley taken the stand in his own defense. E.g., Id. at 59-74 (probing the circumstances of Lindley's purported efforts to report the scheme and whether the scheme actually involved more transactions than were charged).

         Two significant factors cause the Court to doubt the accuracy of Lindley's version of events. First, the record contradicts Lindley's stated recollection as to several relevant events. For example, Lindley's assertion that Sheketoff was called out of order (without notice to Lindley) and “rested before the other [defendants] put on their case[s], ” Id. at 37-38, 80-83, is directly refuted by the trial transcript. See Doc. No. 477 at 207 (reflecting Sheketoff's proposal on May 19, 2010 that he be permitted to rest the next day immediately after the government resting subject to an order that no co-defendant's evidence nor any government rebuttal evidence could be considered against Lindley); Doc. No. 478 at 11, 113, 157 (reflecting Sheketoff withdrew his proposal the next morning, the government rested later that day, co-defendant Levine presented a witness and rested, and only then did Sheketoff rest on Lindley's behalf). Likewise, Lindley's description of Sheketoff as having arrived “two hours late for sentencing” only to say “barely anything to the Court, ” Draft Tr. at 97, is at odds with the sentencing transcript. See Doc. No. 675 at 5-7, 15-18, 21, 35-39 (reflecting Sheketoff spoke at some length on various subjects during the sentencing hearing, which started only one hour late).

         Lindley's written submissions also allege facts that are refuted by the record. For example, his motion asserts that “in the midst of trial, ” Lindley “threatened to contact” the BBO because Sheketoff was not returning his calls. Doc. No. 1024 at 7. According to Lindley, Sheketoff responded by promising to “submit his resignation the next day.” Id. Emails produced by the government, however, reveal that the relevant exchange took place more than a month after the jury returned its verdict. Doc. No. 1108-1 at 17. This discrepancy is meaningful, as Lindley cites the threat to resign as the reason he “submitted to [Sheketoff] completely” “[f]rom that point on, ” fearing that “any trouble would result in [Sheketoff] deserting [Lindley] in the middle of the trial.” Doc. No. 1024 at 7. Given the actual timing of the interaction, it cannot explain or excuse Lindley's failure to voice the complaints he presents now to either Sheketoff or the trial judge at the time of his trial.

         Second, Lindley has admitted his memory of events occurring during and around the time of his trial is, understandably, imperfect. E.g., Draft Tr. at 32 (noting the passage of time since the relevant events and conceding he “believe[s]” a particular discussion occurred but “can't be certain”); Id. at 52 (stating he could not “remember what the context was” for the references Lindley said Sheketoff made to his fee); see also Id. at 47 (noting he “ha[d] the flu” and found it “hard . . . to focus on this”).

         These circumstances substantially undermine Lindley's credibility regarding the specific events giving rise to his claims. As explained in the discussion that follows, § III, infra, the Court rejects much of Lindley's testimony.

         Sheketoff took the stand after Lindley. According to the BBO's website, Sheketoff has been a member of the Massachusetts bar since 1976 and never has been publicly disciplined.[8] At the time of Lindley's trial, Sheketoff had more than thirty years of experience as a criminal defense attorney. Doc. No. 1108-1 ¶ 6. Sheketoff described his trial preparation, his theory of the case, investigation he undertook at Lindley's request, and the nature of his communications and interactions with Lindley. Draft Tr. at 116-30. Although he did not specifically recall his discussion with Lindley about whether Lindley should testify, he described his general practice in this respect, the reasons for his conclusion that Lindley should not testify, and his usual approach to counseling clients when he does not believe they should testify. Id. at 121, 126-27. Sheketoff also stated that his representation of Lindley was not limited by the fee he charged Lindley or by his representation of any other client. Id. at 130-31.

         The Court found Sheketoff to be candid and credible in all respects.

          II. LEGAL FRAMEWORK

         A prisoner sentenced by a federal court “may move the court which imposed the sentence to vacate, set aside or correct the sentence” if: 1) “the sentence was imposed in violation of the Constitution or laws of the United States”; 2) “the court was without jurisdiction to impose such sentence”; 3) “the sentence was in excess of the maximum authorized by law”; or 4) the sentence “is otherwise subject to collateral attack.” 28 U.S.C. § 2255(a). Post-conviction relief pursuant to § 2255 is an extraordinary remedy, available only to a defendant who makes “a sufficient showing of fundamental unfairness.” Singleton v. United States, 26 F.3d 233, 236 (1st Cir. 1994). “[D]efendants bear the burden of establishing by a preponderance of the evidence that they are entitled to relief.” United States v. DiCarlo, 575 F.2d 952, 954 (1st Cir. 1978). To assess whether a defendant has met this burden, a court generally must accept his factual averments as true, but “need not give weight to conclusory allegations, self-interested characterizations, discredited inventions, or opprobrious epithets.” United States v. McGill, 11 F.3d 223, 225 (1st Cir. 1993).

         Unlike most other claims of error, which must be raised at trial and on direct review, counsel-ineffectiveness claims may be presented for the first time in a § 2255 motion. Massaro v. United States, 538 U.S. 500, 504 (2003). “The benchmark for judging any claim of ineffectiveness must be whether counsel's conduct so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result.” Strickland v. Washington, 466 U.S. 668, 686 (1984). To establish that his counsel was constitutionally ineffective, a defendant must satisfy Strickland's well-known two-part test. “First, the defendant must show counsel's performance was deficient, ' which requires showing “counsel made errors so serious that counsel was not functioning as the ‘counsel' guaranteed . . . by the Sixth Amendment.” Id. at 687. “Second, the defendant must show the deficient performance prejudiced the defense.” Id. Both showings are required; a failure to establish either one will defeat a defendant's post-conviction claim. Id.; accord Knight v. Spencer, 447 F.3d 6, 15 (1st Cir. 2006).

         As the Supreme Court repeatedly has emphasized, “[s]urmounting Strickland's high bar is never an easy task.” Padilla v. Kentucky, 559 U.S. 356, 371 (2010); see Knight, 447 F.3d at 15 (establishing either of Strickland's prongs is a “highly demanding” and “heavy burden”). Counsel's performance is measured objectively, considering only what is “reasonable[] under prevailing professional norms.” Strickland, 466 U.S. at 687-88; accord Premo v. Moore, 562 U.S. 115, 122 (2011). The standard is “highly deferential, ” and courts must “indulge a strong presumption” that counsel's challenged actions might be considered sound strategy under the circumstances. Strickland, 466 U.S. at 689; accord Knowles v. Mirzayance, 556 U.S. 111, 124 (2009). “It is rare that constitutionally competent representation will require any one technique or approach.” Cullen v. Pinholster, 563 U.S. 170, 195 (2011) (quotation marks and alteration omitted). A strategic choice “made after thorough investigation of law and facts relevant to plausible options [is] virtually unchallengeable.” Strickland, 466 U.S. at 690. The relevant inquiry, then, is not whether counsel was “prudent or appropriate, ” United States v. Cronic, 466 U.S. 648, 665 n.38 (1984), but rather whether the proceedings resulting in the defendant's conviction and sentence were fair, see Strickland, 466 U.S. at 686.

         To establish prejudice, a defendant must demonstrate “a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. at 694; accord Knowles, 556 U.S. at 127; Sleeper v. Spencer, 510 F.3d 32, 39 (1st Cir. 2007). It is not sufficient “to show that the errors had some conceivable effect on the outcome of the proceeding.” Strickland, 466 U.S. at 693; accord Gonzalez-Soberal v. United States, 244 F.3d 273, 278 (1st Cir. 2001). Rather, the defendant must show that counsel's errors were “so serious as to deprive [him] of . . . a trial whose result is reliable.” Strickland, 466 U.S. at 687.

         Of specific relevance here, “given the paramount importance of the right to testify and the small amount of time that would be required to inform the defendant of that right, . . . failure to inform a defendant of his right to testify constitutes performance outside of an objective standard of reasonable competence, and . . . is constitutionally deficient.” Owens v. United States,483 F.3d 48, 58 (1st Cir. 2007). This failure “could be prejudicial.” Id. at 59. In particular, the First Circuit has held that if the defendant “was not informed by counsel of his right to testify in his own defense, was not otherwise informed of the right . . ., and ...


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