United States District Court, S.D. New York
MELISSA G. KING, Petitioner,
UNITED STATES OF AMERICA, Respondent.
MEMORANDUM OPINION AND ORDER
G. KOELTL, UNITED STATES DISTRICT JUDGE
petitioner, Melissa G. King, moves pro se pursuant
to 28 U.S.C. § 2255 to vacate and set aside her 72-month
sentence of imprisonment, which was entered following her
guilty plea to one count of embezzlement from employee
benefit plans, in violation of 18 U.S.C. §§ 664
& 2, and to one count of subscribing to false United
States individual tax returns, in violation of 26 U.S.C.
§ 7206(1). The petition and its supporting memorandum
(collectively, the “Petition”) --- which were
filed over a year after the statute of limitations expired
--- raise a host of claims: among others, that the guilty
plea was not knowing, intelligent, or voluntary; ineffective
assistance of counsel; prosecutorial misconduct; actual
innocence; and violation of the Cruel and Unusual Punishments
Clause of the Eighth Amendment.
response to the request of this Court, see Civ. Dkt.
26, the attorneys that represented the petitioner in the
underlying criminal proceedings have submitted declarations
and an affidavit to address the ineffective assistance of
counsel claims. See Civ. Dkt. 32 (Fontier
Declaration); Civ. Dkt. 33 (Schachter Affidavit); Civ. Dkt.
34 (Handwerker Declaration) (collectively, the
reasons explained below, the Petition is dismissed.
February 17, 2010, the petitioner was charged in an
Indictment with one count of embezzlement from employee
benefit plans, in violation of 18 U.S.C. §§ 664
& 2, and with eleven counts of money laundering, in
violation of 18 U.S.C. §§ 1957 & 2.
See Cr. Dkt. 12. The Indictment alleged that the
petitioner served as the third-party administrator for the
employee benefit plans of a union, the Compressed Air and
Free Air Foundations, Tunnels, Caissons, Subways, Cofferdams,
Sewer Construction Workers Local 147 of New York, New Jersey
States and Vicinity AFL-CIO (“Local 147”). The
Indictment alleged that the petitioner embezzled
approximately $40 million from three of Local 147's
employee benefit plans through King Care LLC (“King
Care”), a company the petitioner controlled, which
served as the fund manager for the funds pursuant to an
administrative agreement, and that the petitioner then
laundered the embezzled funds through a series of bank
accounts. See Cr. Dkt. 12 at 4-5. The petitioner
pleaded not guilty.
time the Indictment was filed, the petitioner was represented
by retained counsel, Peter William Till (“Till”)
of the Law Offices of Peter W. Till. See Cr. Dkt. 3. The
petitioner retained two additional lawyers, Michael
Handwerker (“Handwerker”) of Goldstein &
Handwerker, LLP, who appeared on behalf of the petitioner in
March 2010, and Ronald K. Smith (“Smith”), a solo
practitioner, who appeared on behalf of the petitioner in
June 2010. See Cr. Dkts. 21, 23, 25, 30. On June 15,
2010, Till moved to withdraw as the petitioner's
attorney. See Cr. Dkts. 28-29. The petitioner ---
citing “irreconcilable differences” and a
“breakdown in communications” with Till, as well
as her belief that Handwerker could adequately represent her
in the matter --- did not oppose Till's motion,
see Cr. Dkt. 32, which was granted on July, 2, 2010,
see Cr. Dkt. 34.
30, 2010, a Superseding Indictment was filed, adding one
count of mail fraud, in violation of 18 U.S.C. §§
1341 & 2, and four counts of tax evasion, in violation of
26 U.S.C. § 7201. See Cr. Dkt. 35. Over the
next year, in numerous filings, the Government and counsel
for the petitioner battled over a series of dispositive and
non-dispositive issues, ranging from the post-indictment
restraint and preservation of the petitioner's assets, to
the dismissal of the superseding indictment, to the
suppression of post-arrest statements. See United States
v. King, No. 10 CR. 122 (JGK), 2011 WL 1630676 (S.D.N.Y.
Apr. 27, 2011); United States v. King, No. 10 CR.
122 (JGK), 2010 WL 4739791 (S.D.N.Y. Nov. 12,
part to the post-indictment freeze of the petitioner's
assets, the petitioner lost the ability to pay for Smith and
Handwerker. See Cr. Dkt. 128. On March 14, 2011, at
the request of the petitioner, Michael S. Schachter
(“Schachter”) of Willkie Farr & Gallagher LLP
(“WFG”) was appointed to represent the petitioner
pursuant to the Criminal Justice Act (the “CJA”),
18 U.S.C. § 3006A. See Cr. Dkt. 130. Because
the petitioner could no longer pay for retained counsel, on
March 23, 2011, Handwerker was temporarily appointed to the
CJA Panel so that Handwerker could continue representing the
petitioner pursuant to the CJA. Cr. Dkt. 136. The purpose of
the dual representation was to provide the petitioner with
the benefit of her choice of counsel, Handwerker, and the
experience of Schachter, along with the resources of a larger
firm, WFG, that could review the immense amount of discovery
in the case.
counsel for the petitioner, Handwerker and Schachter
continued to contest issues in the case, including by moving
in limine to exclude certain evidence. See,
e.g., Cr. Dkts. 192, 209. While preparing for the
possibility of a trial, the petitioner also negotiated with
the Government regarding the possibility of a disposition
short of trial.
October 21, 2011, the petitioner waived her right to be
indicted by a grand jury, and consented to being charged in a
Superseding Information S3 10 Cr. 122 (JGK) (the
“Information”). See Cr. Dkt. 218. The
Information charged the petitioner with one count of
embezzlement from employee benefit plans, in violation of 18
U.S.C. §§ 664 & 2 (“Count I”), and
with one count of subscribing to false United States
individual tax returns, in violation of 26 U.S.C. §
7206(1) (“Count II”).
same date, the petitioner appeared before this Court, and
pleaded guilty to both Counts in the Information pursuant to
a plea agreement dated October 20, 2011 (the “Plea
Agreement”) with the Government. The Plea Agreement
contained a waiver by the petitioner of any direct appeal or
collateral challenge of any sentence of or below the
Stipulated Guidelines Range of 96 months' imprisonment.
Plea Agr. at 8-9. The Plea Agreement also noted that, for the
purposes of calculating the Sentencing Guidelines offense
level, the petitioner and the Government disputed the loss
amount attributable to the petitioner's conduct: the
petitioner contended that the loss amount was between $7
million and $20 million, while the Government contended that
the loss amount was between $20 million and $50 million. Plea
Agr. at 7. This was a sentencing issue that did not affect
the petitioner's ability to plead guilty to Counts I and
II of the Information. Indeed, the Stipulated Guidelines
Range of 96 months' imprisonment was based on the
statutory maximum sentence for the two Counts of conviction.
Under both the Government's calculations and the
petitioner's calculations, the Guideline Sentencing Range
would have been higher if it were not capped by the statutory
petitioner's guilty plea, this Court conducted an
allocution in conformity with Rule 11 of the Federal Rules of
Criminal Procedure. The petitioner was placed under oath and
then answered a series of questions establishing that she was
competent to enter a guilty plea. Plea Tr. at 9-13. For
example, the petitioner explained that she was highly
educated: she had a master's degree, and had nearly
completed a Ph.D. Plea Tr. at 10.
petitioner also explained that she had had psychiatric
treatment for post-traumatic stress “a couple of years
ago” and that she was separately being treated for
several physical ailments --- namely, back problems and
“a chronic infection.” She swore that her past
psychiatric condition and treatment “[a]bsolutely [did]
not” affect her ability to understand the proceedings
and to consult with her lawyer. Plea Tr. at 10-12. She also
swore that her physical condition did not interfere with her
ability to understand the proceedings and to consult with her
lawyer. Plea Tr. at 12. The petitioner swore that her mind
was clear; that she wanted to proceed with the plea
allocution; and that she had not taken any drugs, medicine,
pills, or alcohol in the preceding 24 hours. Plea Tr. at
12-13. Counsel for the petitioner, and the petitioner
herself, confirmed that “nothing about [the
petitioner's] physical condition in any way impact[ed]
her ability to proceed with the guilty plea.” Plea Tr.
at 5-8. The guilty plea allocution occurred in the afternoon
at 4:35 p.m. The petitioner's counsel confirmed that the
petitioner had refrained from taking her medication so that
she could participate in the guilty plea allocution that
afternoon. Plea Tr. at 6.
petitioner also swore that she had “extensive
discussion” with her counsel regarding her case, and
the consequences of waiving indictment, proceeding by
information, and entering a guilty plea. Plea Tr. at 14. The
petitioner swore that she was satisfied with Schachter's
representation of her --- “very much so.” Plea
Tr. at 14.
basis of the petitioner's responses to this Court's
questions, and the Court's observations of her demeanor,
this Court found that the petitioner was “fully
competent to waive indictment, agree to proceed by
information, and enter an informed plea.” Plea Tr. at
petitioner acknowledged the various rights that she was
giving up by pleading guilty. Plea Tr. at 14-17. The
petitioner acknowledged that she consented to being charged
by information rather than indictment. Plea Tr. at 17-19. The
petitioner was advised of the nature of the charges to which
she was pleading guilty, Plea Tr. at 20-23, the maximum
penalties for those charges (including restitution), the
possibility of forfeiture, and the implications of any term
of supervised release. Plea Tr. at 21-28.
the Plea Agreement, the petitioner acknowledged that she
signed it, that she discussed it with her counsel before
signing it, and that she fully understood it before signing
it. Plea Tr. at 28-29. She affirmed under oath that no one
had offered her any inducements, or threatened her, or forced
her to plead guilty or to enter into the Plea Agreement. Plea
Tr. at 29. The Court discussed with the petitioner the
provision of the Plea Agreement in which the petitioner
agreed to waive her right to file an appeal or collateral
challenge of any sentence of or below the Stipulated
Guidelines Range. Plea Tr. at 29-30. The petitioner swore
that she understood the provision:
THE COURT: So, do you understand that if I sentence you to
any sentence of 96 months' imprisonment or less, you have
given up your right to appeal any such sentence or challenge
any such sentence in any proceeding including any habeas
corpus proceeding? Do you understand that?
THE DEFENDANT: I understand that.
Tr. at 30. The Court ensured that there was an adequate
factual basis for the petitioner's guilty plea, that the
petitioner was aware that her actions were illegal, and that
venue was proper. Plea Tr. at 32-38. Regarding Count I, the
petitioner explained that, between 2002 and 2008, she served
as a third-party administrator for three of Local 147's
employee benefit retirement funds. Plea Tr. at 32-33. The
petitioner swore that she “caused to be transferred a
substantial amount of money from the bank accounts for those
funds into King Care” and then “caused that money
to be transferred for [her] own use rather than for the
benefit of the funds for the participants of the
funds.” Plea Tr. at 33. The petitioner swore that she
“knew [she] was not entitled to the money and [she]
knew that [what] [she] was doing [was] wrong, unlawful, and
unauthorized, ” and that she “was aware that
those funds were governed by ERISA at the time.” Plea
Tr. at 33. She affirmed in response to a question by the
Court that she “knew that [she] [was] not entitled to
those funds . . . .” Plea Tr. at 33.
Count II, the petitioner swore:
I also willfully and knowingly subscribed and filed personal
tax returns between 2004 and 2007 that were false as to
material matters. I knew that the tax returns were false
because they did not report a substantial amount of income I
received from King Care. I verified the false tax returns by
written declaration that they were made under penalties of
Tr. at 33. The petitioner swore that she knew that what she
was doing was wrong and illegal. Plea Tr. at 34.
addition, the petitioner swore: “I accept full
responsibility for my actions which I deeply regret and I am
sorry for the harm that my actions caused to others,
especially to the participants of the funds.” Plea Tr.
Government summarized the evidence against the petitioner
that would have been introduced at trial. The evidence would
have included “law enforcement and lay testimony, bank
records and other financial records, records of the
[petitioner's] purchases, records of Local 147 funds
including statements mailed to participants, board of
directors' minutes, forms filed with the Department of
Labor, tax returns and accounting records for the
[petitioner] including [the petitioner's] personal tax
returns.” Plea Tr. at 35. The Government explained that
the evidence would show that the petitioner was a third-party
administrator for three of Local 147's funds; “that
between 2002 and 2008 she took over $40 million from the
[funds'] account and placed it into her personal
account”; that “[s]he spent a substantial portion
of that [money] on many personal expenses including horses,
jewelry, travel and private jets, luxury hotels, her home in
Irvington, credit card bills for additional personal expenses
and two Park Avenue apartments in Manhattan”; and that
“[n]one of these expenses were justified by her
contracts, nor were those expenses authorized by the trustees
of the Local 147 funds.” Plea Tr. at 35-36. The
Government also explained that the evidence would show that,
for “the tax years 2004 through 2007[, ] [the
petitioner] filed tax returns . . . that were signed under
penalty of perjury[, ] [which] failed to declare her income
from the embezzlement[, ] understating her income by millions
of dollars” even though the petitioner knew “that
those returns contained material misstatements.” Plea
Tr. at 36. The Government stated that the evidence would
establish the elements of each of the crimes beyond a
reasonable doubt. Plea Tr. at 36.
petitioner pleaded guilty to both Counts I and II. Plea Tr.
at 36-37. The petitioner also noted that she disputed the $40
million loss amount proffered by the Government. Plea Tr. at
36-37. This Court noted that the disagreement over the loss
amount was reflected in the Plea Agreement, and that the
exact amount of money embezzled was not an element of any
offense. Plea Tr. at 37; see also Plea Agr. at 7. In
response, the petitioner twice affirmed that she was
knowingly and voluntarily pleading guilty to Count I even
though she would be disputing the ultimate loss amount for
sentencing purposes. Plea Tr. at 37, 39. The petitioner swore
that she was pleading guilty to both Counts because she was
in fact guilty, and that she was pleading guilty voluntarily
and of her own free will. Plea Tr. at 37. Neither counsel for
the petitioner nor the Government could offer a reason for
this Court not to accept the petitioner's guilty plea.
Plea Tr. at 37-38.
conclusion of the proceeding, the Court found that the
petitioner understood the rights that she was giving up by
pleading guilty and the consequences of her plea, and that
she did so knowingly and voluntarily. The Court further found
that the petitioner acknowledged her guilt, that the plea was
entered knowingly and voluntarily, and that the plea was
supported by an independent basis in fact containing each of
the essential elements of the offenses. Plea Tr. at 38. The
Court also entered a consent order of forfeiture. Plea Tr. at
41; see also Cr. Dkt. 216. The Court set February
17, 2012 as the date for sentencing. Plea Tr. at 40.
and Schachter began preparing for sentencing, including by
engaging experts to advocate a low loss amount to mitigate
the severity of the petitioner's conduct. During this
period, the relationship between the petitioner and Schachter
quickly frayed and splintered. While preparing for
sentencing, the petitioner came to the belief that Schachter
had given her incorrect legal advice by advising her to plead
guilty to charges for which (she believed) the Government
could not have proven her guilt at a trial. See
Petition at 263; Petition, Ex. 2H; Schachter Aff. ¶ 5;
Schachter Aff., Ex. 3.
November 31, 2011, the petitioner informed Schachter that she
would like to withdraw her guilty plea. Schachter Aff., Ex.
3. Schachter vehemently disagreed with the petitioner's
proposal because he did not believe that there was a
nonfrivolous basis for withdrawal. Schachter Aff. ¶ 29.
In an email to the petitioner dated December 1, 2011, an
associate of Schachter at WFG told the petitioner that,
“after hundreds of hours sifting through documents and
evidence and speaking to you, as well as your statement to us
that you were guilty and your statement under oath in Court
that you are guilty, we believe that you are guilty.”
Schachter Aff., Ex. 3. The e-mail informed the petitioner
that she should explore her options with Handwerker, and
recommended that she focus on sentencing, but also explained
that, if she insisted on filing a motion to withdraw the
guilty plea, Schachter would likely have to withdraw as
counsel. Schachter Aff., Ex. 3.
differences between the petitioner and Schachter had indeed
become irreconcilable. At a conference on February 2, 2012,
Schachter and the petitioner jointly asked this Court to
relieve Schachter as counsel. See Cr. Dkt. 244 at
2-3. On February 6, 2012, Schachter was terminated as counsel
for the petitioner, and Alice L. Fontier
(“Fontier”) of the Law Offices of Joshua L.
Dratel, P.C., was appointed as replacement counsel pursuant
to the CJA. Cr. Dkt. 236. Handwerker continued his
representation of the petitioner.
petitioner continued to raise the issue of withdrawing her
guilty plea with Fontier. See Fontier Decl. ¶
4. Like Schachter, Fontier believed that withdrawal would be
frivolous. Fontier Decl. ¶ 4. In e-mail and letter
correspondence, Fontier strongly advised the petitioner
against withdrawal, informing the petitioner that the
evidence in the case was sufficient for a reasonable jury to
convict her, and warning that an attempted withdrawal could
result in the original terms of the Plea Agreement being
imposed on the petitioner, while also exposing the petitioner
to far greater liability because the Government would pursue
a trial on the other 15 Counts. See Petition, Exs.
2H, 5; Fontier Decl. ¶ 4. Fontier told the petitioner
that she would not make the motion on the petitioner's
behalf; however, Fontier informed the petitioner of the
petitioner's right to represent herself. Petition, Ex. 5.
The petitioner did not move to withdraw the guilty plea.
Government and the petitioner each submitted extensive
sentencing submissions, which included expert reports and
documentary evidence. The petitioner's revised sentencing
memorandum relied on two expert reports, the
“EisnerAmper Report, ” Cr. Dkt. 284, and the
“Vasil Report, ” Cr. Dkt. 286. See Cr.
Dkt. 280 at 31-38, 49. In essence, the EisnerAmper and Vasil
Reports argued that the loss amount attributable to the
petitioner's conduct was far less even than the $7
million that the petitioner had conceded in the Plea
Agreement. The Reports even suggested that the loss amount
might be $0, meaning (if true) that there might be no factual
basis for the petitioner's guilty plea to Counts I and
II. The revised sentencing memorandum also tended to cast the
petitioner as the victim in the case while blaming others,
such as the trustees of the funds and the petitioner's
accountants. The revised sentencing memorandum suggested that
the petitioner was actually innocent of the crimes to which
she had pleaded guilty because the petitioner was legally
entitled to any money that she had received from the funds.
Far from underreporting her personal income in her tax
returns, the revised sentencing memorandum argued that the
petitioner had actually overreported her income, meaning that
she should be entitled to a tax refund. See Cr. Dkt.
280 at 23-31, 38-40.
Government disagreed with the methodologies and underlying
assumptions (and thus the conclusions) of the EisnerAmper and
Vasil Reports because both Reports were based on faulty
assumptions. Both Reports relied upon statements by the
petitioner to the exclusion of other, more credible evidence
from the documents and fact witnesses. See, e.g.,
Cr. Dkt. 277 at 7. For example, both Reports accepted the
petitioner's statement that she did not control King Care
because the petitioner's elderly parents were listed as
the members of the LLC in King Care's operating
agreement, see Cr. Dkt. 284 at 4; Cr. Dkt. 286 at 6,
even though there was substantial evidence that the
petitioner controlled King Care. The EisnerAmper Report
indicated that the loss amount with respect to Count I was
far less than that asserted by the Government, and might be
even less based on the petitioner's statements that
adequate documentation justifying all of the allegedly
embezzled monies existed (documentation that neither the
petitioner nor anyone else could produce or locate).
See Cr. Dkt. 277 at 2-3, 11 n.2; Cr. Dkt. 280 at
32-39; Cr. Dkt. 284 at 1-2, 19, 24; Schachter Aff. ¶ 11.
However, in her revised sentencing memorandum, the petitioner
accepted a loss amount of slightly more than $7 million. Cr.
Dkt. 280 at 38.
with respect to Count II, the Vasil Report concluded (among
other implausible things) that expenses for grooming the
petitioner's pets were properly considered business
expenses, rather than personal expenses, and that expenses
associated with the petitioner's horses were properly
considered deductible business expenses. See, e.g.,
Cr. Dkt. 277 at 22-24; Cr. Dkt. 277-10 ¶ 14; Cr. Dkt.
286 at 5-6. The Vasil Report also accepted that the
petitioner's elderly parents owned the petitioner's
horses, and that they were thus responsible for any taxes on
those horses, see Cr. Dkt. 286 at 2-3, even though
this Court, after a hearing, concluded that the petitioner in
fact owned the horses. See King, 2010 WL 4739791, at
*4-5. With respect to the owner of the horses, this Court
rejected the very argument that the Vasil Report accepted:
that an entity purportedly controlled by the petitioner's
parents owned the horses, because there was no evidence to
support the claim. See id. at *4 & nn. 3-4.
rebut the petitioner's claims, the Government submitted
(among other things) the administrative agreement between
King Care and the funds, which was signed by the petitioner
on behalf of King Care, see Cr. Dkt. 277-1;
affidavits from fund trustees, investigative reports
(including notes of investigative interviews with King
Care's employees), and other materials that showed that
the petitioner controlled King Care and negated the assertion
that the petitioner was entitled to the additional monies
that she had received, see Cr. Dkts. 277-2, 277-4-8;
King Care invoices to show that the petitioner was
overbilling Local 147's funds for work-performed,
see Cr. Dkt. 277-9; and a declaration from an
Internal Revenue Service Grand Jury Revenue Agent who had
reviewed various tax and accounting documents, and concluded
that the petitioner had failed to report at least $12 million
in personal income during the relevant period, see
Cr. Dkt. 277-10 at 1-2.
several adjournments, the parties appeared before this Court
for sentencing on June 21, 2012. This Court noted that it had
reviewed the extensive submissions by the petitioner and the
Government, as well as victim impact statements. Sent. Tr. at
9-10. The parties agreed that, for purposes of sentencing,
this Court could consider $7 million and one cent as the loss
amount in the case, and thus defer the resolution of the
precise loss amount, because any Guideline Sentence based on
losses in excess of $7 million would already be in excess of
the maximum term of 96 months' imprisonment that the
Court could impose under the violated statutes. Sent. Tr. at
16, 35, 57.
for the petitioner argued that the petitioner should receive
a non-custodial sentence based on her age and poor health;
and the health of her family members; and the theory that
others who had not been charged with any crimes, such as the
trustees of Local 147's funds, were complicit in the
petitioner's embezzlement. Sent. Tr. at 26-27, 29-30, 32.
In arguing for a sentence of 96 months' imprisonment, the
Government again summarized the evidence against the
petitioner, including by cataloguing the petitioner's use
of employee retirement funds for personal expenses. Sent. Tr.
at 40-48. This Court also heard statements from victims:
union workers who had had their retirement savings diminished
or completely wiped out as a result of the petitioner's
conduct. Sent. Tr. at 49-56.
petitioner swore that she had reviewed and discussed with her
counsel the Pre-Sentence Report (the “PSR”), its
recommendation, and its addendum. Sent. Tr. at 33. The
petitioner raised several objections to the PSR that sought
to absolve or minimize the petitioner's responsibility
for the crimes to which she had pleaded guilty. Sent. Tr. at
12-13, 18-23. In particular, this Court overruled objections
to the effect that the petitioner had not attempted to
disguise the embezzlement; that the petitioner did not have
control over King Care; that King Care was legally entitled
to any monies received; and that the petitioner did not
knowingly pay for personal expenses using money from the
retirement funds; but sustained objections related to the
precise loss amount, which had yet to be established. Sent.
Tr. at 61-63.
Government also objected to affording the petitioner any
credit for acceptance of responsibility in light of her
sentencing submissions, an objection this Court overruled
because the petitioner had accepted responsibility at the
time of her guilty plea. Sent. Tr. at 35-36, 63-64. The Court
noted that whether she had since ceased accepting
responsibility was an issue that could be considered in
determining an appropriate sentence.
Court found that there could be no question that the
Guideline Sentence was the statutory maximum of 96
months' imprisonment because, under any formulation, the
sentence under the Guidelines based on the actual ...