U.S. v. Wolfson
| Decision Date | 05 May 2008 |
| Docket Number | No. S1 02 Cr. 1588(JGK).,No. S1 00 Cr. 628(JGK).,S1 00 Cr. 628(JGK).,S1 02 Cr. 1588(JGK). |
| Parties | UNITED STATES of America v. Allen Z. WOLFSON, Defendant. |
| Court | U.S. District Court — Southern District of New York |
David C. Essek04 Civ. 3736s, Joshua Aaron Goldberg, U.S. Attorney's Office, New York, NY, for Plaintiff.
Avraham Chaim Moskowitz, Moskowitz & Book, James A. Cohen, Lincoln Sq. Legal Services, Nancy Lee Ennis, Quijano & Ellis, P.C., New York, NY, Christopher Bruno, Jane Degenhardt Bruno, Bruno & Degenhardt, Fairfax, VA, for Defendant.
The defendant has moved pursuant to Federal Rule of Criminal Procedure 33 to vacate his guilty verdict in 00 Cr. 628 (the "Five Stock Indictment") and his guilty plea in 02 Cr. 1588 (the "Freedom Surf Indictment") on the grounds that he was incompetent at the time of the trial and guilty plea. The defendant, represented by new counsel, claims that he was incompetent under the well established standard in Dusky v. United States, 362 U.S. 402, 80 S.Ct. 788, 4 L.Ed.2d 824 (1960) (per curiam) (). He also claims that his previous attorney provided ineffective assistance of counsel by not raising the issue of incompetence to stand trial and enter a guilty plea. More recently, the defendant has also claimed that his mental condition has deteriorated and that he is currently incompetent to be sentenced in these cases.
The Court has received extensive briefs from the parties and held an evidentiary hearing at which the defendant's trial counsel testified. The Court also held an evidentiary hearing at which an expert psychologist, Dr. Sanford L. Drob, testified for the defendant. Dr. Drob testified in general that, while he had not originally concluded that Mr. Wolfson was incompetent at the time of the original proceedings, Dr. Drob now concluded that Mr. Wolfson was incompetent at the time of the original proceedings in these cases. Dr. Drob also concluded that there was evidence that the defendant was now incompetent to be sentenced. Dr. Wilfred G. Van Gorp, an expert neuropsychologist, called by the defendant, did not purport to give any testimony with respect to the defendant's competence, but did conclude that the defendant was suffering from some brain damage in August 2006.
Dr. Stuart B. Kleinman, an expert psychiatrist called by the Government, concluded without reservation that the defendant was competent at the time of the original trial and guilty plea. However, Dr. Kleinman candidly did not offer an opinion as to the defendant's competence to be sentenced. He noted that the defendant's delusions had worsened over time and affect his ability to express remorse and to express himself at sentencing, and affect his view of the motivations for the proceedings against him which Mr. Wolfson now views as motivated by a vast conspiracy to silence him.
For the reasons explained below, the Court concludes that the defendant was competent at the time of his trial and guilty plea and that there is no basis for the allegation that his counsel was ineffective in representing him. Therefore, the defendant's motion to vacate the jury verdict and guilty plea pursuant to Rule 33, and to grant new trials, is denied. However, the Court concludes that the defendant is currently incompetent to be sentenced and therefore should be committed to the custody of the Attorney General for care and treatment pursuant to 18 U.S.C. § 4244 until such time as he has recovered so that he can be sentenced.
On March 26, 2003, Mr. Wolfson was convicted following a jury trial of one count of conspiracy to commit securities fraud, wire fraud and commercial bribery, in violation of 18 U.S.C. § 371; five counts of securities fraud, in violation of 15 U.S.C. §§ 78j (b) and 78ff and 17 C.F.R. § 240.10b-5; and two counts of wire fraud, in violation of 18 U.S.C. §§ 1343, 1346 and 2. (See S1 00 Cr. 628(JGK) (the "Five Stock Indictment").) On January 21, 2004, Mr. Wolfson was convicted upon his guilty plea of conspiracy to commit securities fraud and wire fraud, in violation of 18 U.S.C. § 371; and securities fraud, in violation of 15 U.S.C. §§ 78j (b) and 78ff and 17 C.F.R. § 240.10b-5. (See 02 Cr. 1588(JGK) (the "Freedom Surf Indictment").)
The charges against Mr. Wolfson in the Five Stock Indictment, relate to his participation in a conspiracy to manipulate the price of five stocks from in or about 1998 through June 2000, by using various methods to secretly control large blocks of stock in those companies, coupled with large payments to brokers to promote the stocks to customers who were not informed of the payments. The charges in the Freedom Surf Indictment arise from similar conduct regarding stock in an additional company, Freedom Surf, Inc., committed during the summer and fall of 2000 while Mr. Wolfson was on bail on the Five Stock Indictment.
While the defendant originally pleaded guilty before Magistrate Judge Peck in the Freedom Surf case, and that guilty plea was confirmed by another Judge, that case was transferred to this Court for purposes of a consolidated sentencing with the Five Stock Indictment.
On March 25, 2004, the Probation Office prepared a Presentence Investigation Report ("PSR") in anticipation of Mr. Wolfson's sentence. The Probation Office recommended that the Court sentence Mr. Wolfson principally to 240 months (20 years) imprisonment based on the magnitude of investor losses (in excess of $13 million), the defendant's criminal history, and the repeated nature of the defendant's conduct.
On March 6, 2006, almost three years after his convictions following the jury trial before this Court, Mr. Wolfson's new counsel filed a motion to set aside Mr. Wolfson's guilty verdict and vacate his guilty plea, pursuant to Rule 33 of the Federal Rules of Criminal Procedure. In that motion, Mr. Wolfson's counsel claimed, among other things, that Mr. Wolfson had been mentally incompetent at the time of his trial and guilty plea. Counsel based this claim on the findings of Sanford L. Drob, Ph.D., a forensic psychologist, who had been hired by the defendant's trial counsel to evaluate Mr. Wolfson following his convictions in connection with sentencing. Notably, in that report Dr. Drob did not find that Mr. Wolfson had been incompetent at the time of his trial or guilty plea. (See Ex. A to Govt. letter dated Sept. 24, 2007, Forensic Psychological Evaluation of Dr. Drob dated March 30, 20C4 ("Drob Report").) The Government consented to a competency hearing to address the defendant's claims. The Court thereafter held two hearings, one on August 3, 2006, at which the defendant's trial counsel testified and the second on October 1 and 2, 2007 at which the expert psychiatric witnesses for the defendant and the Government testified.
Christopher Bruno represented Mr. Wolfson in the trial of the Five Stock Indictment, during the guilty plea to the Freedom Surf Indictment and in preparation for sentencing. In connection with sentencing, he retained Dr. Drob to examine the defendant. Mr. Bruno's credible testimony at the evidentiary hearing held on August 3, 2006 strongly supports the conclusion that Mr. Wolfson was competent during the trial and guilty plea.
Mr. Wolfson hired Mr. Bruno in October 2002 based on a referral from another attorney. (Bruno Tr. at 7.)1 In their first conversation, Mr. Wolfson and Mr. Bruno spent approximately three hours on the telephone discussing the nature of the defendant's case, the procedural status of his case, and the charges pending against him. (Id.) During that conversation, Mr. Wolfson discussed the length of the anticipated trial, the specific nature of the charges against him, the specific transactions that were at issue, Mr. Wolfson's background, including his criminal history, and an "indepth overview of the nature of the potential witnesses that would testify against him." (Id. at 8.) Mr. Wolfson was "very rational" and "had a very in-depth understanding of ... the procedural aspects of the case, and the substantive aspects of the case." (Id.) Mr. Wolfson was "extremely" conversant about the nature of the criminal prosecution and the roles of the Court, the prosecutor and defense counsel. (Id.)
Between October 2002 and the trial in March 2003, Mr. Bruno and Mr. Wolfson were "in constant contact on a daily basis by telephone." (Id. at 9.) Mr. Wolfson "always made himself available," and he and Mr. Bruno spoke four or five times a day "in the area of 45 minutes to an hour each phone call." (Id.) During that time, Mr. Bruno also met with Mr. Wolfson in person over the course of several days, in New York, Utah and Central Islip. (Id. at 10.) Mr. Wolfson was "very, very involved in ... examining all of the evidence" against him. (Id.) Mr. Wolfson and Mr. Bruno had "prolonged, pronounced, substantive discussions during that period of time." (Id. at 58.) In December 2002, the Government moved unsuccessfully to revoke Mr. Wolfson's bail. (Id. at 10.) Mr. Wolfson was "absolutely" engaged in the process, appeared to understand the process, and was contributing to his defense. (Id.)
While Mr. Bruno had a concern over whether Mr. Wolfson was reviewing transcripts that were sent to him, Mr. Wolfson did eventually review the transcripts. (Id. at 20-21.) Based on his review of the evidence, at some point before trial Mr. Bruno concluded the case was a "loser." (Id. at 45.) Based on Mr. Bruno's advice, Mr. Wolfson authorized Mr. Bruno to seek a disposition. (Id. at 47.) Mr. Wolfson went "back and forth" about how negotiations were going. (Id.) Based on Mr. Wolfson's authorization, Mr. Bruno sought a "reverse proffer" from the Government. (Id.) Within minutes of leaving that meeting, Mr. Wolfson told Mr. Bruno "you...
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