United States District Court, S.D. New York
OPINION & ORDER
HONORABLE PAUL A. CROTTY, United States District Judge
a three-week trial, a jury convicted Donna Levy on March 21,
2013 of all five counts charged against her in a securities
and mail fraud pump and dump scheme involving millions of
dollars. On February 19, 2014, the Court sentenced Mrs. Levy
to 66 months in prison. Mrs. Levy now petitions, pursuant to
28 U.S.C. § 2255, for a reduction in her sentence and
for her immediate release ("Petition"). She asserts
that her counsel was ineffective for failure to advise her
properly about a guilty plea or cooperation agreement. There
is no merit to her Petition; and for the reasons stated
below, the Court denies the Petition.
October 4, 2010, the government filed a complaint against
Mrs. Levy and ten other individuals. Dkt. 1. On January 19,
2011, the government filed an indictment naming Mrs. Levy and
six other individuals as defendants. Dkt. 86. On December 21,
2011, the government filed a third superseding indictment and
added Mrs. Levy's husband, David Levy, as a defendant.
Dkt. 134. On June 28, 2012, the government filed a fifth
superseding indictment against Mr. and Mrs. Levy and one
other defendant (the "'Indictment"). Dkt. 188.
The Indictment charged Mrs. Levy with two counts of
conspiracy to commit securities fraud and wire fraud, and
three counts of securities fraud. The charges in the
Indictment related to pump and dump schemes orchestrated by
Donna and David Levy.
total, 13 defendants have been charged in this matter. The
Levys are the only two defendants that have so far proceeded
to trial. By the time the Levys' trial started on March
5, 2013, 10 of the 13 defendants had pleaded guilty. All 10
of the defendants that pleaded guilty have since been
Five-Ricardo Fernandez, Stinson Bland, William Mackey, Thomas
Prezioso, and Bradley Susser-received sentences of between 6
and 18 months imprisonment ("Pleading Defendants"),
and the other five-Jeffrey Halbirt, Jeffrey Hurwitt, Michael
Steinberg, Michael Oiring, and Fotis Georgiadis-received 5K1
letters and sentences of time served ("Cooperating
March 21, 2013, the Levys were found guilty of all charges
against them. Following conviction, the Levys moved pursuant
to Fed. R. Crim. P. 29 for a judgment of acquittal, and in
the alternative, pursuant to Fed. R. Crim. P. 33 for a new
trial. On July 15, 2013, the Court denied the Levys'
motions. Mr. Levy was sentenced to 108 months in prison on
January 24, 2014, and Mrs. Levy was sentenced to 66 months in
prison on February 19, 2014.
Levys appealed their convictions. Mrs. Levy challenged (1)
the legal sufficiency of the trial evidence relating to
market manipulation; (2) the Court's jury instruction on
market manipulation; (3) the Court's decision not to
instruct the jury on puffery and the "bespeaks
caution" doctrine; (4) the legal sufficiency of the
trial evidence relating to material misrepresentations; and
(5) the Court's decision to not allow Mrs. Levy's
counsel to cross examine two adverse witnesses. She also
adopted the arguments raised in Mr. Levy's appeal that
the Court erred: (1) in its jury instruction on burden of
proof; (2) in refusing to suppress wiretap and derivative
evidence; (3) in admitting evidence seized pursuant to a
search warrant; (4) in finding a border search legal; and (5)
in its restitution orders. On November 17, 2015, the Second
Circuit entered its mandate affirming the Court's final
judgments. Dkt. 451.
thrust of Mrs. Levy's Petition is that her prior counsel
was ineffective because they failed to properly advise her of
the potential benefits of pleading guilty or cooperating with
the government. She asserts that the government made
overtures indicating amenability to offering a plea deal or
accepting her cooperation prior to trial, but that counsel
failed to advise her of, among other things, the
government's overtures, the strengths and weaknesses of
her case, and the possible sentencing ranges following trial,
a plea deal, or cooperation. She contends that if she had
been properly advised, she would have cooperated or pleaded
August 3, 2016, the Court directed Mrs. Levy's prior
counsel, Howard Srebnick, "to respond to allegations of
ineffective assistance of counsel" set forth in Mrs.
Levy's Petition. See Dkt. 474. On September 26,
2016, Mr. Srebnick submitted a letter responding to Mrs.
Levy's assertions in her Petition about his and Alex
Arteaga-Gomez's representation of Mrs. Levy
("Srebnick Letter"). Dkt. 483. Mrs. Levy submitted
an affidavit ("Levy Aff") with her Reply papers.
Ineffective Assistance of Counsel
federal prisoner may move the sentencing Court under 28
U.S.C. § 2255 to vacate, set aside, or correct an
illegally imposed sentence. See 28 U.S.C. §
2255(a). "The Sixth Amendment guarantees a defendant the
right to have counsel present at all 'critical'
stages of the criminal proceedings, " Missouri v.
Frye, 566 U.S. 133, 141 (2012), and a § 2255
petition may be brought on the basis of ineffective
assistance of counsel.
establish a claim of ineffective assistance of counsel, a
defendant must show that (1) "counsel's
representation fell below an objective standard of
reasonableness;" and (2) "there is a reasonable
probability that, but for counsel's unprofessional
errors, the result of the proceeding would have been
different." Strickland v. Wash., 466 U.S. 668,
688, 694 (1984). A defendant's failure to make the
required showing under either of the two Strickland
prongs is fatal to an ineffective assistance of counsel
claim. See Id. at 700.
the first prong, "a court must indulge a strong
presumption that counsel's conduct falls within the wide
range of reasonable professional assistance."
Id. at 689. With respect to plea deals,
"counsel must communicate to the defendant the terms of
the plea offer, and should usually inform the defendant of
the strengths and weaknesses of the case against him, as well
as the alternative sentences to which he will most likely be
exposed." Purdy v. United States, 208 F.3d 41,
45 (2d Cir. 2000) (citations omitted).
the second prong, a defendant asserting ineffective
assistance based on the rejection of a plea deal must show
that (1) "but for the ineffective advice of counsel
there is a reasonable probability that the plea offer would
have been presented to the court;" (2) "the court
would have accepted its terms;" and (3) "the
conviction or sentence, or both, under the offer's terms
would have been less severe than under the ...