United States v. Jansen
| Decision Date | 07 March 2018 |
| Docket Number | No. 17-1005,17-1005 |
| Citation | 884 F.3d 649 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Christopher A. JANSEN, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Michael D. Love, Attorney, Office of the United States Attorney, Rockford, IL, for Plaintiff-Appellee.
Johanna M. Christiansen, Attorney, Thomas W. Patton, Attorney, Office of the Federal Public Defender, Peoria, IL, for Defendant-Appellant.
Before Flaum, Sykes, and Hamilton, Circuit Judges.
Defendant Christopher Jansen pleaded guilty to one count of wire fraud and one count of tax evasion. He later sought to withdraw his guilty plea, arguing it was not "knowing and voluntary" because of ineffective assistance of counsel. The district court denied that motion, holding that Jansen’s counsel was not ineffective. We affirm. On the limited issue of restitution, we remand to allow the district court to clarify that its imposition of restitution is a condition of supervised release rather than a criminal penalty.
Defendant Christopher Jansen was the president and owner of Baytree Investors, Inc. ("Baytree"), an Illinois corporation that acquired trucking companies. In 2001, he learned that Dean Foods intended to sell one of its subsidiaries, DFC Transportation Company ("DFC"). DFC had millions of dollars of receivables that could be used as collateral to borrow money. Jansen created a Delaware corporation called DFCTC Holdings, Inc. ("DFCTC") for the sole purpose of purchasing DFC. In January 2012, DFCTC purchased DFC for $4.5 million, and Jansen issued DFCTC stock to officers and employees of DFC and Baytree investors.
After DFCTC purchased DFC, Jansen arranged for DFC to use its receivables to borrow money and transfer money to DFCTC. For instance, in 2002, $250,000 was transferred from a DFC bank account to a DFCTC bank account. Jansen distributed the money from DFCTC to himself and others for personal use. He did not seek authorization from DFC or DFCTC to make those transfers, and he did not disclose the transfers to directors or shareholders of the corporations. To receive income and disburse expenditures, Jansen and his business partner, Gilbert Granet, used a bank account in the name of an Illinois corporation, Talcott Financial Corporation ("Talcott"), which was dissolved in 1999.
As of 2005, Jansen allegedly had not filed a personal income tax return since 1996. Additionally, Baytree, Talcott, and DFCTC had never filed corporate income tax returns or informational forms, and Talcott never issued Jansen any W-2 or 1099 forms. The tax due on Jansen’s unreported 2002 income of $946,210.55 was $269,978.
At some point in 2003, the government initiated an investigation based on a tip by a former DFC employee. During the initial stages of the investigation, Jansen was represented by Michael Close. In 2005, Adam Bourgeois replaced Close. On March 12, 2007, the Assistant United States Attorney ("AUSA") sent Bourgeois a letter to open plea negotiations. For several months, Jansen discussed the charges and a possible plea agreement with Bourgeois.
On December 3, 2007, the government charged Jansen with a two-count information: (1) wire fraud pursuant to 18 U.S.C. § 1343 ; and (2) income tax evasion pursuant to 26 U.S.C. § 7201. On January 14, 2008, the government dismissed the two-count information because the parties were unable to reach a plea. Jansen then replaced Bourgeois with attorney Jeffrey Steinback. At the time Steinback took over, the government and defense had a strained relationship. Nevertheless, Steinback resumed negotiations and met with the AUSA, an IRS agent, and an FBI agent. On September 11, 2008, the government filed another two-count information charging Jansen with the same offenses.
In October 2008, Jansen and the government entered into a written plea agreement.
Jansen admitted his involvement in the fraudulent DFCTC scheme and admitted he did not report or pay income taxes in 2002. He also waived his right to challenge the wire fraud count on grounds that the five-year statute of limitations had lapsed. Additionally, Jansen agreed to cooperate with the government; the government stated that if Jansen provided "substantial assistance," it would recommend a sentence reduction under U.S.S.G. § 5K1.1. After a Rule 11 hearing, the court determined Jansen’s plea was knowing, voluntary, and supported by facts satisfying the elements of the offenses. Jansen and the government agreed to periodically continue sentencing to allow for Jansen’s continued cooperation. In January 2011, the government informed Jansen that he had not provided "substantial assistance" and therefore it would not make a recommendation to reduce his sentence pursuant to U.S.S.G. § 5K1.1.
On September 12, 2011, Steinback moved to withdraw from his representation of Jansen. He cited health concerns and stated that his relationship with Jansen "had begun to deteriorate." Steinback was replaced by Lawrence Beaumont, who requested Rule 16 discovery and obtained 42,700 documents related to the case. On December 9, 2011, Jansen filed a pro se motion to continue his sentencing proceedings because none of his prior attorneys, including Steinback, had requested or reviewed the Rule 16 documents. On February 2, 2012, Beaumont withdrew as well, citing irreconcilable differences; he was replaced by Stephen Richards. One week later, Jansen indicated to the court that he wished to withdraw his guilty plea. On April 6, 2012, Richards also withdrew. The court permitted Jansen to proceed pro se.
On July 6, 2012, Jansen filed a motion to withdraw his guilty plea. He asserted three bases: (1) the government’s breach of the plea agreement; (2) ineffective assistance of counsel on the part of attorney Steinback; and (3) prosecutorial misconduct. Relevant to this appeal is only the ineffective assistance of counsel claim.1
The court held an evidentiary hearing at which several witnesses testified, including Steinback. Due to health issues, Steinback’s testimony took place on six dates, including a seventeen-month break during direct examination.
At his first direct examination, on February 8, 2013, Steinback maintained that his counsel was appropriate. He expressed a belief that he was hired specifically "to work on negotiating a plea agreement" because Jansen knew that he "specialized in ... negotiations and plea bargains." His goal was to get the "best outcome possible with respect to sentencing." Especially due to the "strained" relationship between Jansen and the government, Steinback believed that "cooperation" with the government was required.
Steinback further explained that as a result of a "confluence of different items," including information learned from discussions with the AUSA, Granet, and Jansen himself, Steinback discovered "[t]here was a very large investigation ... [and] a belief on the part of the government that [Jansen] had engaged in multiple areas of misconduct, not just the areas that ultimately resulted in the guilty plea." For instance, Steinback believed there were "many years that [Jansen] hadn’t filed tax returns" and "many years [Jansen] had engaged in different businesses that the government contended involved fraudulent misconduct." Thus, Jansen’s strategy was to "proceed with relative expediency with respect to the plea [in order to] avoid [or] stop an investigation into a variety of different entities that [Jansen] ... had [at] one time been a part of." Steinback stressed his belief that if he could "expediently resolve the plea," the government would "not refer to or include any of those other matters as relevant conduct."
As to Jansen’s allegations regarding Rule 16 discovery, Steinback agreed it was routine to request discovery from the government in this sort of case. He maintained, however, that Jansen’s case "was not in a routine posture." He concluded that it was in Jansen’s "best interests" to not request discovery because if the AUSA "delve[d] into all of the other investigative matters that he[ ] [was] willing to forego [sic]," he might "rethink his position." In short, Steinback stated:
I am a negotiator, and I told you that I would do the absolute best job I could do for you, and it was my judgment after speaking with the government that the best job I could do for you was to negotiate a deal which cut [the government] off. And did it require some good faith belief on my part that [the AUSA] was telling me the truth? Yes it did.
Steinback’s direct examination resumed on July 31, 2014. This time, Steinback had a different tenor. He expressed a belief that he had not provided adequate counsel. He reiterated that he had his "reasons" for not reviewing the government’s documents, but acknowledged that not doing so was a "shortcoming." He stated that reviewing the documents would have "made [his] understanding of the case fuller" and "discharged [the] obligation to make ... full investigations."
On cross, Steinback confirmed that he had explained all aspects of the plea to Jansen, including the statute of limitations waiver. Steinback also stated he believed Jansen withdrew his guilty plea because the government would not request a downward departure based on "substantial assistance" under § 5K1.1.
Of added note for our purposes, Steinback also testified about civil litigation between him and Jansen that occurred in 2012 and 2013. Jansen had filed two lawsuits and a complaint with the Illinois Attorney Registration & Disciplinary Commission ("ARDC") against Steinback. In the first lawsuit, a $39,000 default judgment was entered in favor of Jansen. On April 1, 2013, Steinback and Jansen entered into a mutual release; Steinback would pay Jansen $52,500 to satisfy the default judgment, and Jansen would agree to dismiss the second case. Steinback stated that he paid $19,500 of that...
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