United States v. Allmendinger

• Decision Date: 01 February 2017
• Docket Number: Criminal No. 3:10CR248
• Court: U.S. District Court — Eastern District of Virginia
• Parties: UNITED STATES OF AMERICA v. CHRISTIAN M. ALLMENDINGER

UNITED STATES OF AMERICA v. CHRISTIAN M. ALLMENDINGER

Criminal No. 3:10CR248

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division

February 1, 2017

MEMORANDUM OPINION

This matter is before the Court on the AMENDED MOTION TO VACATE, SET ASIDE, OR CORRECT A SENTENCE UNDER 28 U.S.C. § 2255 submitted by Christian M. Allmendinger, a federal inmate proceeding by counsel (ECF No. 491) (hereinafter "§ 2255 Motion"). Allmendinger contends that his trial and appellate counsel were ineffective, thereby violating the Sixth Amendment right to counsel.¹ Specifically, Allmendinger demands relief because:²

Claim One: "Counsel was ineffective in relying on an invalid defense instead of recommending that Petitioner accept the plea agreement offer of ten years." (Id. at 5.)

Claim Two: "Petitioner was denied the effective assistance of counsel on appeal." (Id. at 13.)

Claim Three: "Counsel failed to preserve for denovo review the issue that petitioner's money laundering convictions are barred by the 'merger problem.'" (Id. at 18.)

Claim Four: "Counsel had a conflict of interest, as co-counsel had applied for employment with the Department of Justice at the time of petitioner's trial." (Id. at 19.)

The Government has responded, asserting that Allmendinger's claims lack merit. (ECF No. 525.) Allmendinger has filed a Reply. (ECF No. 529.) The United States has also filed GOVERNMENT'S MOTION TO COMPEL COUNSEL TO PROVIDE AN AFFIDAVIT IN RESPONSE TO PETITIONER'S INEFFECTIVE ASSISTANCE OF COUNSEL CLAIMS FILED PURSUANT TO 28 U.S.C. § 2255 AND MEMORANDUM IN SUPPORT (ECF No. 498). That Motion to Compel will be denied as moot because the Government has submitted a declaration from Barry Pollack, Allmendinger's trial counsel, as an attachment to its response (ECF No. 525-1). For the reasons stated below, Allmendinger's § 2255 Motion will be denied.

I. PROCEDURAL HISTORY

On September 7, 2010, a grand jury indicted Allmendinger on one count of mail fraud conspiracy (Count One); three counts of mail fraud (Counts Two through Four); one count of conspiracy to commit money laundering (Count Eight); three counts of money laundering (Counts Nine through Eleven); and two counts of securities fraud (Counts Fifteen and Sixteen). (INDICTMENT, ECFNo. 3.) On October 21, 2010, Allmendinger and his co-defendant, Adley Abdulwahab, were arraigned and trial was set for March 9, 2011. (ECF Nos. 36 and 38). On January 6, 2011, an agreed discovery order was entered. (ECF No. 100). However, the Government had provided some discovery even before the Order was entered.

On February 1, 2011, the grand jury returned a Superseding Indictment charging the same counts with minor modifications. (SUPERSEDING INDICTMENT, ECF No. 140.) The defendants were arraigned on the Superseding Indictment on February 22, 2011. The trial date was not changed.

By Memorandum Opinion and Order entered on March 7, 2011, the Court granted Allmendinger's and Abdulwahab's separate motions to sever their trials. United States v. Allmendinger, Nos. 3:10CR248-01, 3:10CR248-02, 2011 WL 841514, at *1 (E.D. Va. Mar. 7, 2011); (see ECF Nos. 177-78). Allmendinger's trial was rescheduled to begin on March 14, 2011. (ECF No. 182.)

On March 9, 2011, the Government filed a Motion to Dismiss Count Ten of the Superseding Indictment with respect to Allmendinger. (ECF No. 184.) By Order entered on March 11, 2011, the Court granted the Government's motion. (ECF No. 188.)

On March 14, 2011, the jury trial commenced. After the Government rested, Allmendinger moved for a judgment of acquittal as to all counts pursuant to Federal Rule of CriminalProcedure 29. (Mar. 18, 2011 Tr. 937-80, ECF No. 427.) The Court granted the motion as to a mail fraud count (Count Four) and a securities fraud count (Count Sixteen), but denied it with respect to the remaining counts. (ECF No. 203.) At the close of evidence, defense counsel renewed the motion for a judgment of acquittal. (Mar. 21, 2011 Tr. 1081-82, ECF No. 432.) The Court denied the motion. (ECF No. 204.) After a day of deliberations, the jury returned its verdict, finding Allmendinger guilty of the remaining seven counts of the Superseding Indictment. (ECF No. 207, at 1-3.)

On November 9, 2011, the Court entered judgment against Allmendinger and sentenced him to 540 months of imprisonment. (J. 3, ECF No. 384.) Allmendinger appealed. The United States Court of Appeals for the Fourth Circuit affirmed Allmendinger's convictions and sentence. United States v. Allmendinger, 706 F.3d 330, 344 (4th Cir. 2013). The Supreme Court of he United States subsequently denied Allmendinger's petition for a writ of certiorari. Allmendinger v. United States, 133 S. Ct. 2747 (2013).

II. SUMMARY OF EVIDENCE

The Fourth Circuit summarized the evidence of Allmendinger's guilt as follows:

Allmendinger and Brent Oncale founded a company known as "A&O" in Houston, Texas, in late 2004. The company sold life settlement investments, which are interests in life insurance policies. Until the end of 2006, A&O sold "bonded life settlements," which were interests in particular life insurance policies. The investments were for fixed terms of between four and seven years. If the insured died during the term, the life insurance company would pay a benefit, but if the insured remained alive, a reinsurance bond, which A&O purchased from Provident Capital Indemnity ("PCI"), was designed to pay out and take over the life insurance policy (so long as the life insurance policy premiums were current).

Allmendinger and Oncale marketed and sold A&O's bonded life settlements directly to investors. In 2005, they hired Adley Abdulwahab to help market the products through his company, Houston Investment Center ("HIC"). In marketing A&O's products, both orally and through written materials they created, Allmendinger, Oncale, and Abdulwahab lied about many critical facts. For example, they represented that investor funds were placed in a segregated account dedicated to those payments and used right away to pay policy premiums up front; in reality, although A&O paid the premiums, it had no separate account for that purpose and it paid them only as they became due. Indeed, money invested with A&O was commingled in a general operating account from which A&O paid its bills. Over the time that A&O was in business, Allmendinger, Oncale, and Abdulwahab took advantage of this structure, misappropriating millions of dollars from this account for themselves.

The three men also misrepresented A&O's size, staff, and record of earning returns for its investors. In 2005 and 2006, A&O's websites, whose content Allmendinger and Oncale had created, listed fictional people as company principals, falsely stated that A&O had officers in multiple states, greatly exaggerated the number of A&O employees, and falsely stated that A&O had particular legal and business professionals on its staff. The sites also stated that A&O had "enabled [their] clients to leverage $375 million into $800 million in less than five years," when in actuality, no investor had received any pay out at that time.

In 2006, Allmendinger and Oncale invited Abdulwahab, who was excelling at A&O, to become a partner. Thereafter, the three men each held an equal interest in A&O and shared authority over the company.

By late 2006, regulators from different states began to send inquiries to A&O regarding its life settlement product, largely based on concerns that A&O was selling an unregistered security. These inquiries prompted the three partners to consult with Florida attorney Michael Lapat, who assisted A&O in setting up hedge funds that were backed by life settlements. By early 2007, A&O began offering fractionalized interests in these funds that they called "capital appreciation bonds."

This format change did not stem the tide of regulator inquiries, however, and Allmendinger, Abdulwahab and Oncale agreed to sell A&O to a company called "Blue Dymond." Before the sale, however, Allmendinger, Abdulwahab, and Oncale helped themselves—for what Allmendinger believed was one final time—to several hundred thousand dollars from A&O's operating fund. After this raid on A&O's coffers, only $2.9 million remained in A&O's bank accounts-not even half of the amount A&O needed to pay the premiums on all of its policies up through their bonding dates.

Unbeknownst to Allmendinger, however, Abdulwahab and Oncale had constructed an elaborate secret plan to purchase the company themselves and continue running it. Blue Dymond-the buyer of A&O-was little more than a front for Abdulwahab and Oncale; it was a shell company created and funded by Abdulwahab and Oncale with the assistance of attorney Russell Mackert and without the knowledge of Allmendinger.

Under the terms of the sale, the partners were to receive $750,000, with the expectation of an additional $250,000 in the 18 months following the sale. While Allmendinger received his $750,000, Oncale and Abdulwahab—unbeknownst to Allmendinger—received only $750 and secretly continued the business through Blue Dymond. Through August 31, 2007, the date of the sale, Allmendinger had personally received $8,455,033.60 from A&O Oncale had received $7,303,496.98; and Abdulwahab had received $2,889,366.70. Allmendinger used his money to live an exceptionally extravagant lifestyle, purchasingexpensive jewelry, cars, and other items, including a $2 million home.

In September 2007, Abdulwahab and Oncale hired David White to serve as A&O's president. During this time, A&O continued generally to operate in much the same manner as it had before Allmendinger sold his interest. Indeed, A&O continued to employ the fraudulent marketing materials Allmendinger and his co-conspirators had created. The remaining principals, however, accelerated their misappropriation of investor funds. In the fall of 2007, A&O funds amounting to $11 million were deposited in Mackert's account and distributed to Abdulwahab and Oncale. A&O ceased making premium

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