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ROSENFELD v. UNITED STATES

July 31, 1997

ROBERT E. ROSENFELD, Petitioner, against UNITED STATES OF AMERICA, Respondent.


The opinion of the court was delivered by: SPATT

 SPATT, District Judge.

 The petitioner pro se Robert E. Rosenfeld (the "petitioner" or "Rosenfeld") moves the Court for an Order vacating or correcting his sentence pursuant to 28 U.S.C. § 2255 ("Section 2255"), or in the alternative, granting an evidentiary hearing. In addition, the petitioner moves the Court for bail pending determination of his habeas petition. In support of his petition, Rosenfeld states that his guilty plea was not voluntarily nor knowingly made since his right to effective assistance of counsel under the Sixth Amendment was denied at the plea stage and at the sentencing stage.

 I. BACKGROUND

 On July 15, 1994, Rosenfeld pled guilty, pursuant to an agreement with the government, to one count of conspiracy to commit bank fraud, 18 U.S.C. § 371, pursuant to the indictment, CR 93-157-2, and to one count of mail fraud, 18 U.S.C. § 1341, pursuant to the information, CR 94-731-1. The charge of conspiracy to commit bank fraud arose from the "factoring" of credit card sales drafts for American Health Systems, a Florida telephone vitamin sales operation, from January 29, 1988 to June 24, 1988, through Jewels By Shalet, a subsidiary of Whitmark Corporation ("Whitmark"). "Factoring" is a process by which a company deposits credit card sales drafts of another company into its bank account, then returns the proceeds minus a commission. See Presentence Investigation Report ("PIR") P 2. The charge of mail fraud arose from the "multi-level marketing" of dental plans from December, 1991 to April, 1993 by United Dental Plan of America, another subsidiary of Whitmark. "Multi-level marketing" is a system of tiered retailing in which sellers receive a portion of the commission on sales of other sellers they recruited and trained. See PIR P 22.

 On April 7, 1995, Rosenfeld was sentenced to twenty-one (21) months of incarceration with the special condition that he receive required medical treatment at a minimum security facility of the United States Bureau of Prisons. The Court also recommended that Rosenfeld be incarcerated at a facility in the northeast region of the United States, closest to his home. Rosenfeld was to surrender on July 7, 1995. A Judgment dated April 19, 1995 recited the above sentence.

 Rosenfeld filed a Notice of Appeal on April 12, 1995 appealing the sentence orally imposed on April 7, 1995, contending that the Court misapprehended its authority to grant a downward departure based on his health or, in the alternative, that the Court based its discretionary refusal to grant a downward departure on a "demonstrable error of law" or an impermissible consideration. On June 27, 1995, the Court stayed execution of Rosenfeld's sentence until December 7, 1995, pending resolution of his appeal to the Court of Appeals for the Second Circuit ("Second Circuit"). However, in the event of an affirmance by the Second Circuit prior to December 7, 1995, Rosenfeld's sentence was to commence fourteen (14) days following the date of the order affirming this Court's decision.

 On November 8, 1995, the Second Circuit summarily affirmed the Court's judgment. See United States v. Rosenfeld, 89 F.3d 825 (2d Cir. 1995). When Rosenfeld failed to surrender on December 7, 1995, a new surrender date was scheduled for June 6, 1996. When Rosenfeld again failed to surrender on June 6, 1996, a bench warrant was issued. Rosenfeld surrendered on June 7, 1996.

 II. DISCUSSION

 A. Standard of review

 As stated by the Second Circuit, "because requests for habeas corpus relief are in tension with society's strong interest in the finality of criminal convictions, the courts have established rules that make it more difficult for a defendant to upset a conviction by collateral, as opposed to direct, attack." Ciak v. U.S., 59 F.3d 296, 301 (2d Cir. 1995) (citing United States v. Frady, 456 U.S. 152, 165, 71 L. Ed. 2d 816, 102 S. Ct. 1584 (1982)). As a result, prisoners seeking habeas corpus relief pursuant to Section 2255 must show both a violation of their constitutional rights and "substantial prejudice" or a "fundamental miscarriage of justice." Id. at 301.

 Further, in Section 2255 proceedings, the Supreme Court has recognized the rule of "procedural default: [that prisoners] cannot assert claims they failed to raise at trial or on direct appeal unless they can show 'cause' for the default and 'prejudice' resulting from it." Id. at 302 (citing Wainwright v. Sykes, 433 U.S. 72, 87, 53 L. Ed. 2d 594, 97 S. Ct. 2497 (1977)); see also Reed v. Farley, 512 U.S. 339, 114 S. Ct. 2291, 2300, 129 L. Ed. 2d 277 (1994) ("the general rule is that the writ of habeas corpus will not be allowed to do service for an appeal .... Where the petitioner -- whether a state or federal prisoner -- failed properly to raise his claim on direct review, the writ is available only if the petitioner establishes 'cause' for the waiver and shows 'actual prejudice from the alleged ... violation.'").

 However, the traditional procedural default rule generally will not apply to ineffective assistance of counsel claims where a petitioner was represented by the same attorney at trial and on direct appeal and where such claims depend on matters outside the scope of the record on direct appeal. Billy-Eko v. United States, 8 F.3d 111, 114 (2d Cir. 1993). This rule is based on two policy considerations. First, in many instances, the accused is represented by the same counsel during trial and on appeal. As such, it would be unrealistic to expect counsel on appeal to vigorously pursue an ineffective assistance of counsel claim. Id. at 114. Second, the resolution of ineffective assistance of counsel claims often requires evidence outside the record on appeal because such claims are often based on alleged errors of omission which are difficult to perceive from the record. Id. Examples of such errors include the failure to call a witness, introduce certain evidence or a conflict of interest. Id.

 To establish ineffective assistance of counsel in the context of a guilty plea, a petitioner must demonstrate the following two elements:

 
(1) that his attorney's performance fell below an objective standard of reasonableness; and
 
(2) that there is a reasonable probability that, but for his counsel's errors, he would not have pled guilty and would have insisted on going to trial.

 Hill v. Lockhart, 474 U.S. 52, 57-59, 106 S. Ct. 366, 88 L. Ed. 2d 203 (1985); Strickland v. Washington, 466 U.S. 668, 687-694, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). In applying the above two-prong test, "judicial scrutiny of counsel's performance must be highly deferential" and "a court must indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance." Strickland, supra, 466 U.S. at 689, 104 S. Ct. at 2065. The inquiry focuses "on the fundamental fairness of the proceeding whose results are being challenged." Id. at 696, 104 S. Ct. at 2069. "The court's central concern is not with 'grading counsel's performance' but with discerning 'whether despite the strong presumption of reliability, the result of the particular proceeding is unreliable because of a breakdown in the adversarial process that our system counts on to produce just results.'" United States v. Aguirre, 912 F.2d 555, 560 (2d Cir. 1990) (quoting Strickland, 466 U.S. at 696-97, 104 S. Ct. at 2069). The burden is on the petitioner to "overcome the presumption that, under the circumstances, the challenged action 'might be considered sound trial strategy.'" Strickland, supra, 446 U.S. at 689, 104 S. Ct. at 1065 (citation omitted). Indeed, as the Supreme Court has noted, "there are countless ways to provide effective assistance in any given case. Even the best criminal defense attorneys would not defend a particular client in the same way." Id.

 Finally, the Court is mindful that the petitioner is proceeding pro se and that his submissions must be liberally construed in favor of the petitioner. See Douglas v. United States, 13 F.3d 43, 47 (2d Cir. 1993).

 B. Ineffective assistance of counsel

 Rosenfeld claims that the ineffective assistance of his counsel, on the following two grounds, resulted in a guilty plea that was not voluntarily nor knowingly made: (1) his counsel failed to advise him of the intent element of the crimes of mail fraud and conspiracy to commit bank fraud; and (2) his counsel misinformed him about "the true sentencing consequences of his plea." In addition, the petitioner claims that his counsel failed to object to the three-level sentencing enhancement for his alleged managerial/supervisory role in the crimes.

 Rosenfeld was represented by the same attorney, Melvyn K. Roth, Esq. ("Roth"), during his guilty plea, sentencing and appeal. Hence, under the standard enunciated in Billy-Eko, supra, the petitioner's failure to raise his claims of ineffective assistance of counsel in the direct appeal, is excused. These claims are now properly before the Court.

 1. Legal innocence

 Rosenfeld maintains that his attorney neglected to inform him of the intent element of the charges of mail fraud and conspiracy to commit bank fraud. Rosenfeld contends that his attorney advised him to plead guilty merely because his co-defendants were guilty of the crimes charged. The Court finds petitioner's assertion that his attorney advised him to plead guilty irrespective of the truth, to be unworthy of credence. The petitioner's present protestation of misunderstanding are belied by the record as a whole.

 Rosenfeld submits affidavits by: (1) co-defendant Albert Loring (the "Loring Affidavit"); (2) Carmen DiMaria, a part-time employee at Whitmark; (3) Albert Haft, Whitmark's accountant; (4) Stacy Rosenfeld, Rosenfeld's daughter and a part-time employee at Whitmark; and (5) Ruby Rosenfeld, Rosenfeld's wife and a part-time employee at Whitmark, in support of his assertion of innocence. The Loring Affidavit states in part as follows:

 
Mr. Mendelson was the sole interface with American Health Systems and neither Mr. Rosenfeld nor myself had any contact with anyone at American Health Systems.
 
* * *
 
While Mr. Rosenfeld attended the initial meeting to decide whether to do the American Health Systems project, his further involvement was not required as he was only working on a part-time basis with Whitmark. During that period, his sole responsibility was with National Safety Associates which marketed water filtration products.
 
Mr. Mendelson attended a meeting with the Bank of New York which Mr. Rosenfeld was not involved in. Mr. Mendelson made certain representations which mislead the bank and eventually caused the investigation. By his own admission, Mr. Mendelson, immediately when questioned, admitted his guilt.... Mr. Rosenfeld had no knowledge of this meeting, its import or what transpired.

 Loring Affidavit at 1-2. However, Loring's affidavit contradicts his statements made during his plea allocution.

 Co-defendants Rosenfeld and Loring consented to a joint plea allocution. See Transcript of Pleading ("P.Tr.") at 5-6. During his plea allocution, Loring confirmed Rosenfeld's involvement as a co-conspirator in the fraudulent factoring scheme:

 
MR. WASSERMAN [the Assistant U.S. Attorney]: Your Honor, if I may I want to let the Court know some of the government's proof with respect to this. The government's proof would show that Whitmark Company was a holding company for several different companies, Jewels by Chalet. Jewels by Chalet had one asset which was a merchant account with the Bank of New York and the account was dormant. When Jewels by Chalet was taken over by Whitmark, Whitmark processed charge slips from a telemarketer in Florida which was precluded by the merchants agreement with Jewels by Chalet which you cannot use a merchant account, and the government would show, the evidence would show that Mr. Loring as the executive was involved as part of this conspiracy charge in agreement with Mr. Mendelsohn, Mr. Rosenfeld, as well as others in processing these slips and then taking a percentage for Jewels by Chalet and sending a percentage back down to Florida and that was the nature of the scheme and they defrauded the bank by not disclosing to the bank their true purpose. It was a material misrepresentation that resulted in the bank getting chargebacks from customers of the telemarketing company which resulted in a loss to the bank. That is the nature of the government's proof.
 
THE COURT: Did you hear what Mr. Wasserman just said, Mr. Loring?
 
DEFENDANT LORING: Yes.
 
THE COURT: Is that the truth?
 
DEFENDANT LORING: That's the truth.

 P.Tr. at 39-40 (emphasis added). Clearly, the Loring Affidavit contradicts Loring's sworn statements made during his plea allocution.

 The Loring Affidavit must be placed into context. Loring has already pled guilty and is currently serving his sentence. Although Loring and Rosenfeld pled guilty together, side by side, Loring has waited nearly three years to exculpate Rosenfeld. Neither Loring nor Rosenfeld provide the Court with any credible explanation for the inconsistencies between the Loring Affidavit and Loring's statements made during his plea allocution. Consequently, the Court affords the Loring Affidavit little evidentiary weight.

 In addition, Rosenfeld's statements made under oath during his plea allocution belie his protestation of innocence and that his plea was unknowing or involuntary. Rosenfeld's statements directly contradict the affidavits submitted by family members and part-time employees of Whitmark. The following exchange occurred during the plea allocution, when the Court asked Rosenfeld to describe the fraudulent factoring scheme and his participation therein:

 
THE COURT: Will you describe briefly in your own words what you did in connection with Count 1 of the indictment.
 
DEFENDANT ROBERT ROSENFELD: Well, I was the vice-president of the Whitmark Corporation at the time that occurred and essentially what Mr. Loring and Mr. Wasserman have said here is what happened.
 
THE COURT: Well, better tell me yourself.
 
DEFENDANT ROBERT ROSENFELD: Well, a representative of Whitmark went to the Bank of New York and made certain representations that were not truthful. I had knowledge of that and failed to do anything about it at the time.
 
THE COURT: What kind of representations were those.
 
DEFENDANT ROBERT ROSENFELD: He told the Bank of New York that we were in the business of selling jewelry from catalogue. While it was something we intended to do at a later date, at that time we were processing Visa and Mastercard slips for a company out of Florida.
 
THE COURT: And you weren't selling jewelry.
 
DEFENDANT ROBERT ROSENFELD: Not at the time, no.
 
THE COURT: When you made the statement, you said you were doing it at the time, selling jewelry at the time?
 
DEFENDANT ROBERT ROSENFELD: No. I'm sorry, not at that time. As a matter of fact, we never did.
 
THE COURT: But did you make the representation that you were.
 
DEFENDANT ROBERT ROSENFELD: Yes.
 
THE COURT: That was false, was ...

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