Riolo v. United States
| Decision Date | 29 June 2022 |
| Docket Number | 20-12206 |
| Parties | Michael RIOLO, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Bryan E. DeMaggio, Matthew R. Kachergus, Camille Elizabeth Sheppard, William J. Sheppard, Elizabeth White, Jesse B. Wilkison, Sheppard White Kachergus & DeMaggio, PA Florida, Jacksonville, FL, for Petitioner-Appellant.
Brandy Brentari Galle, U.S. Attorney's Office, West Palm Beach, FL, Aileen Cannon, Emily M. Smachetti, U.S. Attorney Service - SFL, MIAMI, FL, for Respondent-Appellee.
Before Jordan, Jill Pryor, and Marcus, Circuit Judges.
Michael Riolo appeals the district court's denial of his 28 U.S.C. § 2255 motion to vacate his 293-month prison sentence and convictions.1 Riolo argued to the district court that his trial counsel, Theresa Van Vliet, provided ineffective assistance of counsel. Specifically, Riolo asserted that Van Vliet told him if he pled guilty to five counts of mail fraud, he would serve no more than 10 years in prison because she had a deal with the government that his sentencing range would be 97–121 months’ imprisonment under the Sentencing Guidelines. Based on Van Vliet's representations, Riolo maintained, he pled guilty when he otherwise would have proceeded to trial.
The district court held an evidentiary hearing on Riolo's § 2255 motion. After reviewing the evidence, the district court found that Van Vliet never represented to Riolo that she had a deal with the government about his guideline range. More than that, the district court found that before the change-of-plea hearing, Van Vliet thoroughly apprised Riolo of the federal sentencing process, explaining that the United States Probation Office would make a recommendation to the district court about his guideline range and that the district court would ultimately determine his guideline range for itself. Based on its factual findings, the district court denied Riolo's § 2255 motion.
On appeal, Riolo urges us to take another look at the evidence. If we do, he argues, we will find that several of the district court's factual findings are clearly erroneous. In the light of his version of the facts—that Van Vliet assured him she had a deal with the government about his guideline range—Riolo urges us to conclude that she provided ineffective assistance of counsel. Even leaving aside the disputed facts, he adds, Van Vliet underestimated his guideline range by more than 100 months. That alone, he argues, constitutes ineffective assistance.
After careful review, and with the benefit of oral argument, we find no clear error in the district court's factual findings. We therefore conclude that Van Vliet did not provide Riolo with ineffective assistance by telling him she had an agreement with the government about his guideline range. We also conclude that Van Vliet did not provide ineffective assistance by underestimating Riolo's guideline range. The district court's judgment is affirmed.
We begin by summarizing Riolo's offense conduct, Van Vliet's representation of him, the change-of-plea hearing, the sentencing hearing, and Riolo's direct appeal. Next, we review the events that followed Riolo's § 2255 motion, including two previous denials, appeals, and remands of his case, as well as the district court's final order and judgment on appeal.
From August 1999 to December 2008, Riolo convinced more than 80 people to invest money in two corporations for which he was the sole officer and employee: Sterling Wentworth Currency Group, Inc. ("Sterling") and LaSalle International Clearing Corporation ("LaSalle"). Riolo told investors that he would invest their money in foreign currency trading. Investors sent personal checks or wire transfers to the Sterling and LaSalle bank accounts.
But Riolo did not invest the funds he received. With signatory authority over the Sterling and LaSalle bank accounts, he withdrew investors’ funds and used their money for other purposes. He spent at least some of the money to pay for a home, multiple automobiles, a boat, jet skis, and other luxury items. If an investor wanted to withdraw funds, Riolo would send the money he received from other investors to cover the disbursement. Using this technique, he disbursed over $29.5 million to withdrawing investors, claiming they were receiving their principal investment and returns when most, if not all, of the payments were made with other investors’ funds. To perpetuate this Ponzi scheme, Riolo prepared sophisticated profit and loss statements for the investors—statements which falsely reflected that their money had been invested and was earning substantial returns. Over the nearly 10-year period, Riolo collected more than $44 million from investors.
In January 2009, the Federal Bureau of Investigation ("FBI") served Riolo at his house with a subpoena for corporate records of Sterling and LaSalle. While the FBI was on his property, Riolo contacted his civil lawyer, Bart Houston. Houston, in turn, reached out to his law partner, Theresa Van Vliet, a highly experienced criminal attorney who had been in private practice for 18 or 19 years and was a former Assistant United States Attorney. Houston put Van Vliet on the phone with Riolo, who then put Van Vliet on the phone with the FBI. Van Vliet explained to the FBI agent that her law firm had the records responsive to the subpoena.
Riolo met Van Vliet in person shortly after the FBI's visit to his house. He told her that he had been running Sterling and LaSalle for approximately 10 years and that he had not made any trades in foreign currency during that time. He explained that he had taken in approximately $44 million from investors. He admitted that he had mailed investors fraudulent statements reflecting that their money had been invested when it had not been. Van Vliet advised that he could face several counts of mail and wire fraud.
Van Vliet continued to communicate regularly with Riolo over the following months. She received a proposed bill of information from the government and engaged in plea negotiations on his behalf. She told him that, given the overwhelming evidence against him, she could not mount a successful defense of his case. Riolo told her that the most important consideration for him was the length of any prison sentence he might receive. She explained that his sentence would depend in part on his guideline range under the Sentencing Guidelines. If he pled guilty, she advised, he would likely have the benefit of a three-point reduction under the "acceptance of responsibility" guideline. Civ. Doc. 74-5 at 3 ¶ 5 (internal quotation marks omitted).2 She told him that a further reduction could be possible if he cooperated with the authorities. If he wanted the lowest sentence possible, she advised, his best course of action was to plead guilty and offer his cooperation to the government. In May 2009, the government formally charged Riolo by information with five counts of mail fraud.
On May 7, 2009, Van Vliet met with Riolo to provide an estimate of his guideline range. Houston and Riolo's then-wife, Lori Ann Gary, also attended the meeting. Van Vliet told Riolo that based on her calculations, aided by the work of an associate at her law firm, the district court likely would find an offense level of 30, a criminal history category of I, and a resulting guideline range of 97–121 months’ imprisonment. She flagged for him, however, that a higher guideline range was possible if the district court imposed a four-point enhancement for violating commodities laws while being a commodities trading advisor. But it was Van Vliet's opinion that the commodities law enhancement would not apply. She reassured Riolo by telling him that the government had independently reached the same guideline-range calculation—that he would have an offense level of 30 and a criminal history category of I, with a resulting guideline range of 97–121 months’ imprisonment.
The parties offered conflicting evidence regarding the May 7, 2009 meeting at the evidentiary hearing in Riolo's § 2255 proceedings. Riolo, Gary, and Houston all testified that Van Vliet told those in attendance she had reached a binding "deal" or "agreement" with the government that Riolo's offense level would be 30, with a resulting guideline range of 97–121 months’ imprisonment. Gary testified that she specifically asked Van Vliet whether he could possibly "get more than 10 years" if he pled guilty. Civ. Doc. 83 at 8. Van Vliet reassured her by saying "no, ... this was the plea agreement that had been agreed upon with the prosecution and her." Id . at 7. Houston, a civil lawyer unfamiliar with criminal sentencing, came away with the impression that Van Vliet and the government had something akin to "a stipulation in [civil] practice" about Riolo's guideline range. Id . at 64. And according to Riolo, Van Vliet suggested that a guideline range of 97 to 121 months’ imprisonment "was locked in." Id. at 108.
Van Vliet testified adamantly to the contrary. She said that "[n]ever ... in [her] life" had she communicated to a client that she could reach a deal with the government about a defendant's guideline range. Id . at 237. She broadly denied ever telling Riolo that there was any sort of deal or agreement between her and the government about his sentence. She testified that she told Riolo, on multiple occasions, about "all of the nuances of the sentencing guidelines and his possible exposure." Civ. Doc. 74-5 at 6 ¶ 18. For one thing, she told him that the probation office would make an independent guideline calculation to aid the sentencing court. For another, she informed him that the sentencing court would not be bound by either of the parties’ estimates regarding his guideline range or ultimate sentence.
Riolo and Van Vliet...
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