U.S. v. Hatch

• Decision Date: 09 May 2011
• Docket Number: CR. No. 05-098 S
• Parties: UNITED STATES OF AMERICA v. RICHARD HATCH
• Court: U.S. District Court — District of Rhode Island

UNITED STATES OF AMERICA

v.RICHARD HATCH

CR. No. 05-098 S

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

Date: May 9, 2011

MEMORANDUM AND ORDER

William E. Smith, United States District Judge.

Richard Hatch has filed a motion to vacate, set aside, or correct sentence pursuant to 28 U.S.C. § 2255. For the reasons stated below, that motion is denied.

I. Background and Travel¹

On September 8, 2005, Hatch was charged in a ten-count indictment with related tax and fraud offenses. Count 1 charged that Hatch willfully attempted to evade income taxes by signing and filing a false tax return for the tax year 2000, in violation of 26 U.S.C. § 7201, in which he willfully failed to declare three sources of income: (a) over $1 million that he won on the nationally televised CBS mini-series, Survivor; (b) $18,708 in rental income from a property he owned in Newport;and (c) $25,000 in charitable donations that he diverted to his own use (making it reportable personal income).

Count 2 alleged Hatch filed a false tax return for the year 2001, in violation of 26 U.S.C. § 7201, in which he willfully failed to declare four sources of income: (a) roughly $320,000 that he received as co-host of a radio show; (b) $9,396 in rental income from the Newport property; (c) $27,074, representing the value of a car he won as part of his Survivor show prize; and (d) $11,500 in charitable donations which he diverted to his own use.

Count 3 alleged Hatch filed a 2001 tax return for Tri-Whale Enterprises, Inc., an S-corporation created to receive his radio show income, in which he falsely stated that Tri-Whale's annual income was $68,173, omitting the $320,000 income discussed above, in violation of 26 U.S.C. § 7206(1).

Counts 4-9 charged that Hatch defrauded four companies which contributed $36,500 in charitable donations (the same money that formed a partial basis of Counts 1 and 2), in violation of 18 U.S.C § 1343 or 1341. Count 10 alleged that Hatch defrauded People's Credit Union when he altered a $25,000 donation check so that he appeared as a payee, and then deposited it in his personal account there, in violation of 18 U.S.C. § 1344.

Throughout all proceedings in this Court, Hatch was represented by retained counsel, Attorneys Michael Minns and John MacDonald. All trial and sentencing proceedings were conducted by Judge Ernest C. Torres of this Court.²

A nine-day trial was held at which a number of witnesses testified. Mark Burnett, owner of Survivor Entertainment Group (SEG) and the producer of the Survivor show, testified that Hatch received a total of $1,010,000 in cash earnings from the Survivor show in 2000. (See Trial Tr. Vol. I, 84-88, 92, Jan. 12, 2006 ("Trial Tr.-I").)³ He confirmed that each Survivor contestant signed a contract that provided, "I shall pay all state and federal or other taxes on any prizes I win." (Id. at 88.) Burnett stated that contestants were not employees of SEG and confirmed that a Form 1099 was issued to Hatch for the $1,010,000 in payments. (Id. at 89, 99-100.)

Richard Plotkin and Jodi Rodriguez-Wallis ("Wallis"), the accountants who worked on Hatch's tax returns for the years in question, also testified. Plotkin testified that he prepared a tax return for Hatch for 2000, which included Hatch's $1 million Survivor winnings and other sources of income; he met with Hatchand discussed the return; Hatch took the return but he did not know whether it was ever filed. (See generally Trial Tr. Vol. III 81-117, Jan. 17, 2006 ("Trial Tr.-III").)

Wallis testified inter alia that she worked on Hatch's returns for 2000 and 2001; the 2000 tax return she prepared included his $1 million Survivor winnings; at Hatch's request she subsequently prepared a "hypothetical" tax return for 2000 omitting the $1 million winnings, but she instructed him not to file it and he signed a written acknowledgment that the hypothetical return was not to be filed. (See Trial Tr.-III 151170; Trial Tr. Vol. IV, 1-41, Jan. 18, 2006 ("Trial Tr.-IV").) Wallis further testified that she prepared 2001 tax returns for Hatch individually and for Tri-Whale Enterprises and neither return included the income received from his services as a radio show co-host or from the automobile he received as part of his Survivor winnings, as Hatch did not inform her of either. (Trial Tr.-IV 41-61.)

IRS Agent Michael Pleshaw testified about the tax loss resulting from Hatch's filing of the false returns for himself and Tri-Whale Enterprise in 2000 and 2001 and that the total amount due and owing for both 2000 and 2001 was $474,971. (See Trial Tr. Vol. V, 75-109, Jan. 19, 2006 ("Trial Tr.-V").)

According to Hatch, one of his principal defenses at trial was that Burnett had promised CBS or SEG would pay all taxes onhis Survivor winnings in response to Hatch's complaints regarding incidents of cheating during the Survivor show's filming.

At the conclusion of trial, a jury found Hatch guilty on the three tax counts (Counts 1-3) and acquitted him of the remaining charges (Counts 4-10).

The Presentence Report (PSR) prepared by the U.S. Probation Office calculated a guideline range of 25 to 41 months, based on an offense level of 20 and a criminal history category I. The Government filed a motion for a two-level adjustment for obstruction of justice based on Hatch's false testimony at trial. Counsel for Hatch filed objections to the proposed obstruction of justice enhancement and to the calculation of the tax loss and argued those objections at the sentencing hearing. (See Sentencing Tr. 13-39, 43-46, May 16, 2006 ("Sent. Tr.").)

At sentencing, Judge Torres denied the objections and found, based on the testimony of Agent Pleshaw and the PSR, the tax loss resulting from Hatch's offenses to be more than $400,000, which resulted in a two-level upward adjustment in his offense level. (Id. at 39.) In addition, the Court, after cataloging a number of instances where it believed Hatch testified falsely at trial or submitted false information to the U.S. Probation Office, imposed a two-level enhancement for obstruction of justice. (Id. at 46-60.) The resultingguideline range was 37 to 51 months. The Court sentenced Hatch to 51 months imprisonment, the high end of the guidelines range, followed by three years of supervised release.⁴

Hatch appealed his conviction and sentence, represented by Attorney Minns. He argued inter alia that the trial court (1) improperly precluded him from testifying concerning Burnett's offer to pay any taxes on Hatch's winnings in exchange for his silence concerning the cheating that allegedly occurred during the filming of Survivor; (2) erroneously limited his cross-examination of Plotkin, Wallace and an IRS agent Jason Rameaka; (3) erroneously admitted expert testimony presented by the Government; and (4) unduly restricted the direct testimony of a defense witness, accountant Dan Urso. Hatch also challenged the sentencing court's calculation of the tax loss and the upward adjustment for obstruction of justice. The Court of Appeals rejected all of these arguments and affirmed Hatch's convictionand sentence. United States v. Hatch, 514 F.3d 145 (1st Cir. 2008). Further review was denied by the Supreme Court. Hatch v. United States, 129 S. Ct. 103 (2008).

Thereafter, Hatch filed the instant motion to vacate (ECF No. 97). In his motion he asserts four claims: (1) ineffective assistance of his counsel due to his trial counsel's failure (a) to effectively cross-examine certain government witnesses; and (b) to adequately dispute the Government's calculation of the tax loss and the obstruction-of-justice sentence enhancement; (2) ineffective assistance of counsel in failing to adequately argue certain issues on appeal; (3) sentencing errors by the Court due to miscalculating the tax loss resulting from Hatch's offenses and improperly assessing an obstruction of justice enhancement for perjury; and (4) a claim of "freestanding actual innocence."

The Government has filed a Response (ECF No. 110) objecting to the motion, to which Hatch has replied and filed several additional submissions.⁵ No hearing is necessary, ⁶ and thismatter is ready for decision.⁷

II. Discussion

A. General Principles

Generally, the grounds justifying relief under 28 U.S.C. §2255⁸ are limited. A court may grant such relief only if it finds a lack of jurisdiction, constitutional error or a fundamental error of law. See United States v. Addonizio, 442 U.S. 178, 184-85 (1979) ("[A]n error of law does not provide abasis for collateral attack unless the claimed error constituted a fundamental defect which inherently results in a complete miscarriage of justice.") (internal citation and quotations omitted).

Moreover, a motion under § 2255 is not a substitute for a direct appeal. See United States v. Frady, 456 U.S. 152, 165 (1982). A movant is procedurally precluded from obtaining § 2255 review of claims not raised on direct appeal absent a showing of both "cause" for the default and "actual prejudice," or alternatively, that he is "actually innocent" of the offense of which he was convicted. Bousley v. United States, 523 U.S. 614, 622 (1998) (citations omitted). Claims of ineffective assistance of counsel, however, are not subject to this procedural hurdle. See Knight v. United States, 37 F.3d 769, 774 (1st Cir. 1994).

B. Ineffective Assistance Claims

A defendant who claims that he was deprived of his Sixth Amendment right to effective assistance of counsel must demonstrate:

(1) That his counsel's performance fell below an objective standard of reasonableness; and

(2) [A] reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different.

Strickland v. Washington, 466 U.S. 668, 687-88, 694 (1984); accord United States v. Manon, 608 F.3d 126, 131 (1st Cir. 2010).

In assessing the adequacy of counsel's performance, the Court looks to 'prevailing professional norms.' All that is required is a level of performance that...