U.S. v. Patasnik

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: Before OAKES, McLAUGHLIN and JACOBS; JACOBS
• Citation: U.S. v. Patasnik, 89 F.3d 63 (2nd Cir. 1996)
• Decision Date: 11 July 1996
• Docket Number: Nos. 752,D,584,s. 752
• Parties: UNITED STATES of America, Appellee, v. Michael S. PATASNIK and James Cecere, Defendants-Appellants. ockets 95-1063(L), 95-1189(CON).

Page 63

89 F.3d 63

UNITED STATES of America, Appellee, v. Michael S. PATASNIK and James Cecere, Defendants-Appellants.

Nos. 752, 584, Dockets 95-1063(L), 95-1189(CON).

United States Court of Appeals Second Circuit.

Argued Feb. 5, 1996.

Decided July 11, 1996.

Andrew P. Gaillard, Assistant United States Attorney, New Haven, CT (Christopher F. Droney, United States Attorney for the District, New Haven, CT, on the brief), for Appellee United States of America.

John T. Walkley, Trumbull, CT, for Defendant-Appellant Michael Patasnik.

Michael O. Sheehan, Assistant Federal Public Defender, New Haven, CT (Thomas G. Dennis, Federal Public Defender, New Haven, CT, on the brief), for Defendant-Appellant James Cecere.

Before OAKES, McLAUGHLIN and JACOBS, Circuit Judges.

JACOBS, Circuit Judge:

For almost two years, Michael Patasnik and James Cecere conducted an advance fee loan scam, pocketing over $800,000. The scheme was simple. Patasnik and Cecere held themselves out as lenders or loan brokers who could save small businesses on the brink of disaster. Targeting businesses that needed large and urgent cash infusions and could not arrange financing elsewhere, Patasnik and Cecere falsely represented that they managed a sort of venture capital fund for wealthy investors and had financed many large investment projects in the past. The two encouraged their victims to submit their own investment proposals, which Patasnik and Cecere then pretended to evaluate. After "approving" the proposals, they explained that a certain percentage of the loan had to be paid in advance as a fee. Fees ranged from $5,000 to over $250,000. They promised in writing that the loan would be forthcoming once the fee was paid. No loans were ever made, of course.

Patasnik and Cecere were charged with ten counts of interstate transportation of funds obtained by fraud (18 U.S.C. §§ 2, 2314) and one count of conspiracy to commit this offense (18 U .S.C. § 371). Patasnik alone was also charged with one count of wire fraud (18 U.S.C. § 1343). Patasnik pled guilty to all twelve counts, while Cecere chose to go to trial. After a two-week jury trial, Cecere was found guilty on the conspiracy count and on nine of the ten substantive counts.

Patasnik challenges his conviction on the ground that he received ineffective assistance of counsel. We reject this argument, and affirm his conviction. Both defendants challenge their sentences on various grounds. We remand for resentencing.

I

Patasnik claims that two of his three lawyers rendered ineffective assistance. John Walkley, Patasnik's lawyer on appeal, represented Patasnik as court-appointed counsel from September 1993, when Patasnik was indicted, until September 1994, when Patasnik privately retained Howard Owens as counsel. Owens represented Patasnik during his plea allocution in October 1994. Patasnik then retained Robert Golger, who represented him at his sentencing hearing in January 1995. Probably because of Walkley's long familiarity with the case, Walkley acted as stand-by counsel, stood in court with Patasnik, and was encouraged by the court to give advice on any issue if he differed with Owens or Golger. The court made clear to Patasnik that he could rely on Walkley for advice at any time. Neither Owens nor Walkley said much at Patasnik's plea allocution. At Patasnik's sentencing hearing, both Golger and Walkley made extensive arguments that paralleled and supplemented one another.

Patasnik points to seven instances in which Owens and Golger supposedly did something wrong. We hold that these seven instances, either alone or in combination, do not constitute ineffective assistance of counsel.

Patasnik first argues that Owens should have challenged the government's claim that the fraudulent scheme caused over $800,000 in losses, and should have asked for a hearing on the issue. Owens did in fact challenge the total loss amount at Patasnik's plea allocution, but this issue was relevant only for calculating the sentence under the Guidelines, not for determining whether Patasnik's guilty plea was valid. Between the time of Patasnik's plea and his sentencing, the district court presided over Cecere's two-week jury trial in which numerous witnesses testified about the details of the scam worked by Patasnik and Cecere. Thus, by the time Patasnik was sentenced, the court knew what there was to know about the scheme and the amount of loss it generated. At Patasnik's sentencing hearing, the court explained that a hearing on Patasnik's "factual contentions" was obviated by Cecere's trial. See United States v. Tracy, 12 F.3d 1186, 1203 (2d Cir.1993); United States v. Carmona, 873 F.2d 569, 574 (2d Cir.1989). That Owens did not formally request such a hearing therefore did not prejudice Patasnik because the court ruled as if such a request had been made. See Strickland v. Washington, 466 U.S. 668, 691, 104 S.Ct. 2052, 2066, 80 L.Ed.2d 674 (1984).

Second, Patasnik claims that he had a "conflict" with counsel because (according to Patasnik) Owens stated that he would not represent Patasnik if Patasnik chose to go to trial, unless Patasnik made a payment on the fee. Such a statement may have created friction between Owens and Patasnik, but it would not of itself suggest a conflict of interest. Such a conflict exists "when, during the course of the representation, the attorney's and defendant's interests diverge with respect to a material factual or legal issue or to a course of action." Winkler v. Keane, 7 F.3d 304, 307 (2d Cir.1993) (internal quotations omitted), cert. denied, --- U.S. ----, 114 S.Ct. 1407, 128 L.Ed.2d 79 (1994). But here, Owens's interest was always aligned with Patasnik's during the time that Owens represented him: if Patasnik paid him, Owens would be his advocate; without payment, Owens would not. ¹ Neither possibility suggests that Owens would act as anything less than a zealous advocate while representing Patasnik. Cf. id. at 307-08 (contingency fee in which counsel received higher payment in a criminal case if his client was acquitted created a conflict of interest because "trial counsel had a disincentive to seek a plea agreement, or to put forth mitigating defenses that would result in conviction of a lesser included offense"). Besides, it is likely that Owens's chances of being paid would vary inversely with the severity of Patasnik's sentence, giving him an additional incentive to defend Patasnik zealously. Thus, there was no conflict of interest.

Third, fourth, fifth and sixth, Patasnik claims that Owens (and perhaps Golger) failed "to investigate [Patasnik's] background and prior record," failed "to listen to [Patasnik's] version of the case," failed "to prepare properly for possible defenses available to the defendant," and did "not properly investigate[ ] defendant's case and ... prepare[ ] himself for trial." To the extent that these conclusory statements bear on Owens's recommendation that Patasnik plead guilty, they do not undermine the reasonableness of that recommendation: Patasnik points to nothing in his "background," "prior record" or "version of the case" that would have made a lawyer optimistic about taking the case to trial. Nor does Patasnik explain what "possible defenses" he has in mind that might have caused Owens to give different advice. The overwhelming evidence adduced by the government (not to mention the jury's verdict) reinforces the conclusion that Owens's advice was objectively reasonable. See Strickland, 466 U.S. at 687-88, 104 S.Ct. at 2064-65. To the extent that Patasnik's claims bear on Golger's representation of Patasnik at the sentencing hearing, they are defeated by the record: in Golger's well-researched and articulate statement before the district court, he raised numerous objections to the presentencing report and demonstrated a thorough knowledge of Patasnik's background and the record.

Finally, we reject Patasnik's claim that Golger rendered ineffective assistance by failing to obtain certified copies of past convictions. In fact, Golger explored this exact issue at the sentencing hearing, arguing that Patasnik's criminal history score could not be determined without certified copies of his past convictions. The court rejected this argument, ruling that the evidence of these convictions as set out in the presentencing report was sufficient "for purposes of a sentencing proceeding." Golger's decision not to press the issue further, and to move on to another point in his long list of objections at the sentencing hearing, was objectively reasonable under the circumstances.

II

Both Patasnik and Cecere challenge the district court's decision to increase their offense levels under § 3B1.1 of the Sentencing Guidelines for their roles in directing the scheme.

A

Patasnik received a four-level enhancement ("adjustment" in Guidelines lingo) under § 3B1.1(a) as "an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." U.S.S.G. § 3B1.1(a). "We have repeatedly stressed that a sentencing court must make specific factual findings in support of any offense-role enhancement." United States v. Greenfield, 44 F.3d 1141, 1147 n. 4 (2d Cir.1995). A court must therefore make two specific factual findings before it can properly enhance a defendant's offense level under § 3B1.1(a): (i) that the defendant was "an organizer or leader," and (ii) that the criminal activity either "involved five or more participants" or "was otherwise extensive." See United States v. Liebman, 40 F.3d 544, 548-49 (2d Cir.1994) (case remanded because district court made no finding on number of participants or extensiveness of criminal activity); United States v. Fermin, 32 F.3d 674, 682 (2d Cir.1994) (case remanded because district court made no finding as to whether defendant was "manager or supervisor" under § 3B1.1(b)), cert. denied, --- U.S. ----, 115 S.Ct. 1145, 130 L.Ed.2d 1104 (1995).

Relying on the government's...