REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE Movant William Doug Mitchell, an inmate confined at F.C.I. Seagoville, proceeding pro se, brings this motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. The motion was referred for findings of fact, conclusions of law and recommendations for the disposition of the motion.
Procedural History of the Case On March 10, 2010, a grand jury returned an indictment charging Mitchell and thirty-nine others with various offenses arising from their participation in a mortgage fraud scheme. A jury found him guilty of one count of conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349, and two counts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 2. On March 27, 2012, Mitchell was sentenced to a total term of 120 months of imprisonment. The conviction was affirmed. United v. Mitchell, 533 F. App'x 387 (5th Cir. 2013).
The present motion was filed on March 4, 2014. Mitchell submitted a memorandum of law in support of the motion. The Government filed a response (docket entry #11) on October 8, 2014.
Factual Background of the Case The Fifth Circuit provided the following discussion of the factual background of this case:
The evidence adduced at trial showed that, between February 2004 and July 2007, forty individuals—among them real estate agents, mortgage brokers, escrow officers, title companyattorneys, property appraisers, and straw buyers—conspired to defraud numerous lending institutions of over $20 million by convincing them to approve mortgage loans for residential properties for which the appraised values had been fraudulently inflated. The scheme was orchestrated by John Barry, who controlled or directed the actions of each of the conspirators through a series of shell companies he owned. At Barry's direction, Mitchell, a certified and licensed real estate appraiser, allegedly inflated the appraised value of at least thirty-five properties, directly causing over $8 million in losses to lending institutions.
The fraud was perpetrated in one of two ways. The first method involved a single transaction in which straw purchasers recruited by Barry agreed to buy homes for significantly greater sums than the homes were worth, and for significantly higher prices than legitimate homeowners were seeking. Appraisers falsely inflated the appraised value of the targeted properties to convince lending institutions to finance the sales. With the assistance of real estate agents, mortgage brokers, and title company employees, straw purchasers obtained inflated mortgage loans based on false representations in loan applications regarding their income, assets, and intent to occupy the properties. The difference between a legitimate seller's asking price and the inflated loan amount—which largely was based on the false appraisal—provided the fraudulently-obtained proceeds to the conspirators.
In the second method, conspirators again purchased homes from legitimate sellers, but then "flipped" them by selling the properties in a second, often simultaneous, transaction to straw buyers who paid substantially inflated prices. As in the first scheme, lending institutions funded the purchases based on the fraudulent appraisals of the homes' values and the false representations provided by the straw buyers in loan applications. Because the original transactions often closed simultaneously with the second, "flipped" transactions, the latter purchases usually financed the former purchases. The difference between the original sale price and the second sale price provided the conspirators' fraudulent proceeds.
At trial, the government presented extensive evidence to advance its theory that Mitchell played a critical role in the conspiracy by artificially inflating the property valuations in his appraisals. The government also argued that Mitchell was instrumental in concealing the fraud, insofar as he used the mails or forms of wire communication to submit false or materially misleading documents to lending institutions. In return for his appraisals, Mitchell received approximately $52,000, either directly from Barry or from one of Barry's companies. Mitchell did not disclose these proceeds to the lending institutions, though he routinely certified to them that he had "no present or prospective personal interest or bias with respect to the participants in the transaction," and that his "compensation for performing ... [the] appraisals was not conditioned on any agreement or understanding, written or otherwise, that [he] would report or present analysis supporting a predetermined specific value."
At the conclusion of trial, a jury found Mitchell guilty of two counts of mail fraud and one count of conspiracy to commit mail and wire fraud. On March 27, 2012, the district court sentenced him to 120 months' imprisonment for each count, with the sentences to run concurrently. Mitchell also was ordered to pay restitution in the amount of $8,245,423.
Mitchell, 533 F. App'x at 388-89.
Mitchell presented the following grounds for relief in his memorandum:
1. Inadmissible hearsay evidence admitted at trial (ineffective assistance of counsel, failure to know the law).
2. IPSE DIXIT USPAP analysis was legally insufficient to establish or insinuate fraud. Jack McComb violated FRE 702 and 703 with his qualitative analysis and his tax appraisal testimony at trial (ineffective assistance of counsel for defense and appellate counsel).
3. Agent Velasquez's testimony was tantamount to a trial by charts in violation of FRE 1006 and FRE 701 (ineffective assistance of counsel - failure to research law and provide competent representation).
4. Important exculpatory evidence containing the identity and appraisal methods of unknown individuals (Confrontation Clause information) was intentionally and strategically not provided to the defense in violation of Brady v. Maryland, 373 U.S. 83, 87 (1963) and Crawford v. Washington, 541 U.S. 36, 53-54 (2004). A timely and comprehensive discovery request exhorting the prosecutor to show "transparency" and "disclosure" as advised under Cone v. Bell, 556 U.S. 449 (2009) advising "the prudent prosecutor will err on the side of transparency," was faxed and mailed to Mr. Shamoil Shipchandler on 18 January 2011.
5. The court-appointed trial attorney, Durden, and the court-appointed appellate attorney, Huggler, provided constitutionally-ineffective assistance of counsel as described in Strickland v. Washington, 466 U.S. 668 (1984), and United States v. Juarez, 672 F.3d 381, 390 (5th Cir. 2012).
6. The Government did not prove its case against Mitchell during the trial to support the jury's guilty verdict. To prove mortgage or appraisal fraud under 18 U.S .C. § 371, the Government must show and prove Mitchell engaged in a scheme to defraud by (1) "inflating" the subject property appraisals, (2) that the subject property appraisals involved federally-related mortgages under FIRREA, and (3) that he acted knowingly.
A § 2255 motion is "fundamentally different from a direct appeal." United States v. Drobny, 955 F.2d 990, 994 (5th Cir. 1992). The movant in a § 2255 proceeding may not bring a broad-based attack challenging the legality of the conviction. The range of claims that may be raised in a § 2255 proceeding is narrow. A "distinction must be drawn between constitutional or jurisdictional errors onthe one hand, and mere errors of law on the other." United States v. Pierce, 959 F.2d 1297, 1300-01 (5th Cir. 1992). A collateral attack is limited to alleging errors of "constitutional or jurisdictional magnitude." United States v. Shaid, 937 F.2d 228, 232 (5th Cir. 1991). The role of § 2255 has been defined by the Fifth Circuit as follows:
Section 2255 provides relief for a petitioner who can establish that either (1) his sentence was imposed in violation of the Constitution or laws of the United States, (2) the sentencing court was without jurisdiction to impose the sentence, (3) the sentence was in excess of the maximum authorized by law, or (4) the sentence is otherwise subject to collateral attack.
United States v. Seyfert, 67 F.3d 544, 546 (5th Cir. 1995) (citations omitted). "Section 2255 does not reach errors of constitutional or jurisdictional magnitude that could have been reached by a direct appeal." Id. Similarly, "issues raised and disposed of in a previous appeal from an original judgment of conviction are not considered in § 2255 motions." United States v. Kalish, 780 F.2d 506, 508 (5th Cir. 1986) (citing United States v. Jones, 614 F.2d 80, 82 (5th Cir. 1980)); United States v. Goudeau, 512 F. App'x 390, 393 (5th Cir. 2013).
Claim Number 1: Inadmissible hearsay evidence admitted at trial (ineffective assistance of counsel, failure to know the law).
Mitchell initially alleges that the trial court erred in admitting evidence and testimony that was clearly inadmissible hearsay. More specifically, the trial court purportedly erred in admitting tax assessment values of the Central Appraisal District. The evidence of the tax assessment values was presented to the jury in a summary chart as Government Trial Exhibit 127. Agent Richard Velasquez provided testimony summarizing the evidence. Velasquez testified that the tax value was a "kind of starting point of what value should be." ECF 1395, 2231. Mitchell counters the testimony by stressingthat the Fifth Circuit has noted that "under Texas law, tax valuations are legally insufficient evidence of fair market value." United States v. Curtis, 635 F.3d 704, 718 n.50 (5th Cir. 2011).
The Government correctly observed, in response, that this issue was fully discussed on appeal. The Fifth Circuit rejected Mitchell's claim on...
