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United States v. Dignam

United States District Court, M.D. Louisiana

February 24, 2018

UNITED STATES OF AMERICA
v.
GAIL RAY DIGNAM

         NOTICE

         Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the U.S. District Court.

         In accordance with 28 U.S.C. § 636(b)(1), you have 14 days after being served with the attached report to file written objections to the proposed findings of fact, conclusions of law, and recommendations set forth therein. Failure to file written objections to the proposed findings, conclusions and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.

         ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.

          REPORT AND RECOMMENDATION

          ERIN WILDER-DOOMES UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on a motion by the defendant, Gail Ray Dignam (“Defendant”) to vacate, set aside, or correct her sentence pursuant to 28 U.S.C. § 2255 (the “Motion to Vacate”).[1] The United States has filed an opposition, [2] and Defendant has filed a reply.[3]There is no need for oral argument or for an evidentiary hearing. For the reasons set forth herein, the undersigned recommends that the Motion to Vacate be denied, and that this matter be dismissed, with prejudice.

         I. Background

         On February 17, 2010, Defendant was charged by Grand Jury Indictment of two counts of mail fraud in violation of 18 U.S.C. §§ 1341 and 1342.[4] The Indictment set forth that from about July 2004 through June 2005, Defendant devised a scheme and artifice to defraud the State of Louisiana and to fraudulently direct money from the Governor's Program on Abstinence (“GPA”) to her son, David Cox, while Defendant was employed as director of the GPA. Specifically, the Indictment alleged that prior to serving as director of the GPA, Defendant founded an abstinence education program known as Friends for Teens (“F4T”) and served as the president of F4T between 2002 through April of 2004. Following her appointment as director of the GPA “in or about April of 2004, ” Defendant solicited Donald Peterson to serve as president of F4T and created a contract between F4T and the GPA by signing her own name on behalf of the GPA and Mr. Peterson's name on behalf of F4T. Per the Indictment, Defendant thereafter created, completed, submitted, and approved fraudulent invoices on behalf of Mr. Peterson, and instructed another individual, Donna Hardin, to open a bank account in the name of “[Don Peterson] d/b/a Friends 4 Teens” over which Defendant controlled the flow of funds. Defendant then directed money from this bank account be used to pay invoices submitted by Defendant's son, without obtaining the approval of Mr. Peterson and without submission to the GPA.

         Following multiple continuances granted at the request of defense counsel, [5] a three-day jury trial was conducted October 11, 2011 through October 13, 2011. At the conclusion of the trial, Defendant was found guilty on both counts of mail fraud. A Presentence Report (“PSR”) was thereafter prepared.[6] The PSR calculated Defendant's base offense level to be seven (7), [7]increased Defendant's offense level for, inter alia, (1) the amount of loss caused to CASSE, which was considered additional conduct (i.e., other relevant conduct, USSG § 2B1.1(b)(1)(G); USSG § 1B1.3)), [8] and (2) Defendant's role as a leader or organizer in the criminal activity (USSG § 3B1.1(c)), [9] and calculated a Guideline range of imprisonment of between 70 to 87 months.[10]Defendant, through her attorney, filed written objections to the PSR.[11] A sentencing hearing was conducted before the District Judge on March 1, 2012.[12] At the sentencing hearing, the District Judge adopted the PSR without change[13] and imposed a term of imprisonment of 70 months on each count to be served concurrently.[14] In explaining the sentence, the Court stated as follows:

Now, that is the lower end of the Guidelines Sentence. And my reasons for imposing it are the factors set forth in 3553(A) and (B). This was a program that was well-meaning and was - that the federal Congress and the State decided to do. It had very limited funds. And it was not appropriate by your conduct to have diverted those funds away from programs to where they were doing what they were supposed to do and to line up a job or money to go into accounts which you controlled. You caused the state to lose money, precious money for that particular project. And unfortunately, as the government pointed out, you have a track record for going in to charitable organizations or groups and in diverting money for those groups and their intended purposes and diverting it to you or your family's bank accounts. And the evidence at trial was compelling that you did this knowingly and that you understood what it was going to do. You created numerous accounts to hide your activities, and it took serious investigation to undercover [sic] that activity. So I think that the guidelines sentence is appropriate in this case.[15]

         Relevant to the instant Motion to Vacate, the District Judge increased Defendant's offense level for (1) the amount of loss caused to the Council for the Advancement of Social Services/Education (“CASSE”), [16] which the court considered additional conduct (i.e., other relevant conduct, USSG § 2B1.1(b)(1)(G); USSG § 1B1.3)), [17] and (2) Defendant's role as a leader or organizer in the criminal activity (USSG § 3B1.1(c)).[18]

         On March 8, 2012, Defendant filed a Notice of Appeal.[19] In her appeal, Defendant argued that the District Court violated the Speedy Trial Act, 18 U.S.C. §§ 3161-3174. Defendant did not appeal the calculations set forth in the PSR, nor did she challenge the District Court's sentence. On May 28, 2013, the Fifth Circuit Court of Appeals affirmed Defendant's conviction for mail fraud.[20] Following conclusion of that appeal, Defendant filed a Motion for New Trial, [21] as well as the instant Motion to Vacate.[22] The court deferred ruling on the Motion to Vacate pending a ruling on the Motion for New Trial.[23] On March 3, 2015, the Motion for New Trial was denied[24] and the United States was subsequently ordered to submit a response to the Motion to Vacate.[25] The United States filed an opposition to the Motion to Vacate, and Defendant thereafter filed a Reply. Per the Motion to Vacate, Defendant argues that her sentence should be vacated because her appellate counsel rendered ineffective assistance of counsel by failing to appeal the District Court's application of the CASSE-related loss as other relevant conduct and by failing to appeal Defendant's sentencing enhancement based on her leadership role. As discussed below, the undersigned finds that neither of Defendant's arguments have merit and therefore recommends that Defendant's Motion to Vacate be denied and that this matter be dismissed, with prejudice.

         II. Law and Analysis

         A. Scope of Relief Available Pursuant to 28 U.S.C. § 2255

         To obtain collateral relief pursuant to 28 U.S.C. § 2255, a defendant “must clear a significantly higher hurdle” than the standard that would exist on direct appeal. United States v. Frady, 456 U.S. 152, 166 (1982). When a defendant has been convicted, and his appellate rights have been exhausted or waived, there is a presumption that his conviction is fair and final. United States v. Cervantes, 132 F.3d 1106 (5th Cir. 1998), citing United States v. Shaid, 937 F.2d 228, 231-32 (5th Cir. 1991) (en banc), cert. denied, 502 U.S. 1076 (1992). “As a result, review of convictions under section 2255 ordinarily is limited to questions of constitutional or jurisdictional magnitude, which may not be raised for the first time on collateral review without a showing of cause and prejudice.” Id. at 1109. This procedural bar does not apply, however, to claims that could not have been raised on direct appeal, such as those for ineffective assistance of counsel. See, Massaro v. United States, 538 U.S. 500, 504 (2003) (holding that ineffective assistance claims are properly raised on collateral review and are not procedurally barred by a failure to raise them on direct appeal).

         As a threshold matter, the United States argues that “all of the defendant's arguments are the sort of technical Guidelines arguments that should not be considered in a Section 2255 action.”[26] Defendant does not respond to this basis for opposing the Motion to Vacate, and the undersigned agrees that arguments regarding the sentencing court's application of the Guidelines fall outside the scope of relief generally afforded by 28 U.S.C. § 2255. “Relief under 28 U.S.C. § 2255 is reserved for transgressions of constitutional rights and for a narrow range of injuries that could not have been raised on direct appeal and would, if condoned, result in a complete miscarriage of justice.” U.S. v. Vaughn, 955 F.2d 367, 368 (5th Cir. 1992) (per curium). “Nonconstitutional claims that could have been raised on direct appeal, but were not, may not be asserted in a collateral proceeding.” Id. The Fifth Circuit has held that “[a] district court's technical application of the Guidelines does not give rise to a constitutional claim.” Id. See also, U.S. v. Williamson, 183 F.3d 458, 462 (5th Cir. 1999) (“Section 2255 motions may raise only constitutional errors and other injuries that could not have been raised on direct appeal that will result in a miscarriage of justice if left unaddressed. Misapplications of the Sentencing Guidelines fall into neither category and hence are not cognizable in § 2255 motions.”); United States v. Segler, 37 F.3d 1131, 1133-1134 (5th Cir. 1994) (“Applying the § 4B1.1 criteria to determine whether to sentence as a career offender does not implicate any constitutional issues. Moreover, this claim could have been raised on direct appeal. Accordingly, Segler is not entitled to § 2255 relief.”) (internal citations omitted); Sun Bear v. United States, 644 F.3d 700, 704 (8th Cir. 2011) (“this court and out sister circuits have consistently held ‘that ordinary questions of guidelines interpretation falling short of the ‘miscarriage of justice' standard do not present a proper section 2255 claim.”) (internal citations omitted); United States v. Goines, 357 F.3d 469, 477 (4th Cir. 2004) (“guideline claims ordinarily are not cognizable in § 2255 proceedings.”). Here, Defendant did not appeal the application of the “other relevant conduct” enhancement for CASSE related conduct or the enhancement for her leadership role in the offense. Accordingly, the undersigned agrees that Defendant's arguments as set forth in the Motion to Vacate are not the sort that generally support relief under 28 U.S.C. § 2255. However, because Defendant has couched such claims within the argument that she was not afforded effective assistance of counsel, the undersigned has also considered the merits of those arguments below. See, United States v. Ohia, Criminal Action No. 13-139, 2017 WL 1088081, at * 7 (M.D. La. March 22, 2017) (explaining that “[i]n the Fifth Circuit, section 2255 petitioners cannot challenge a district court's technical application of the Sentencing Guidelines on collateral review. Accordingly, these claims are not appropriately before this Court….Insofar as Defendant attempts to frame these issues as claims of ineffective assistance of counsel in counsel's failure to object to such enhancements, these attempts fail.”).

         B. Standard for Demonstrating Ineffective Assistance of Counsel

         A habeas defendant who claims ineffective assistance of counsel must affirmatively demonstrate:

(1) That his counsel's performance was “deficient”, i.e., that counsel made errors so serious that counsel was not functioning as the “counsel” guaranteed the defendant by the Sixth Amendment; and
(2) That the deficient performance prejudiced his defense, i.e., that counsel's errors were so serious as to deprive the defendant of a fair trial, a trial in which the result is reliable.

Strickland v. Washington, 466 U.S. 668 (1984). The defendant must make both showings in order to obtain habeas relief based upon the alleged ineffective assistance of counsel. Id.

         “The entitlement to effective assistance does not end when the sentence is imposed, but extends to one's first appeal of right.” Williamson, 183 F.3d at 462 (citing Evitts v. Lucey, 469 U.S. 387, 394 (1985); Green v. Johnson, 160 F.3d 1029, 1043 (5th Cir.1998)). The Fifth Circuit evaluates counsel's appellate performance under the same two-prong test set forth in Strickland. Id. Accordingly, in order to prevail, Defendant must establish that her appellate counsel's representation was deficient and that the deficient performance caused Defendant prejudice. Id. See also, U.S. v. Reinhart, 357 F.3d 521, 525 (5th Cir. 2004) (same). As this court recently explained, “[a] defendant must satisfy both prongs of the Strickland test to succeed on an ineffective assistance of counsel claim. A court is not required to address these prongs in any particular order. If it is possible to dispose of an ineffective assistance of counsel claim without addressing both prongs, ‘that course should be followed.'” Ohia, 2017 WL 1088081, at * 4 (citing Strickland, 466 U.S. at 697)).

         In order to satisfy the deficient performance prong of the Strickland standard, a defendant must show that counsel's failure to raise the impositions of the sentencing enhancements on appeal “‘fell below an objective standard of reasonableness.'” Williamson, 183 F.3d at 462 (internal citations omitted). Review of counsel's performance “is deferential, presuming that ‘counsel's conduct falls within the wide range of reasonable professional assistance.'” Id. The Fifth Circuit has explained that “[c]ounsel does not need to ‘raise every nonfrivolous ground of appeal available.'” Id. (quoting Green v. Johnson, 160 F.3d 1029, 1043 (5th Cir. 1998) and citing Reese v. Delo, 94 F.3d 1177, 1185 (8th Cir. 1996) (holding that “counsel has discretion to abandon losing issues on appeal.”)). Nevertheless, a reasonable attorney has an obligation to research relevant facts and law, or make an informed decision that certain avenues will not prove fruitful. Solid, meritorious arguments based on directly controlling precedent should be discovered and brought to the court's attention.” Id. at 462-463. Accordingly, to determine whether appellate counsel's performance was deficient, the reviewing court must consider whether a challenge to the enhancements at issue in the Motion to Vacate “would have been sufficiently meritorious such that [defendant's] counsel should have raised [them] on appeal.” U.S. v. Phillips, 210 F.3d 345, 348 (5th Cir. 2000).

         In order to satisfy the prejudice prong of the Strickland standard, a defendant must demonstrate that “‘there is a reasonable probability that, but for counsel's unprofessional error[], the result of the proceeding would have been different.'” Williamson, 183 F.3d at 463. “A reasonable probability is that which renders the proceeding unfair or unreliable, i.e., undermines confidence in the outcome.” Id. “When a claim of ineffective assistance of counsel is premised on counsel's failure to raise an issue on appeal, ‘the prejudice prong first requires a showing that [the Fifth Circuit] would have afforded relief on appeal.'” Reinhart, 357 F.3d at 530 (citing United States v. Phillips, 210 F.3d 345, 350 (5th Cir. 2000) (“In the appellate context, the prejudice prong first requires a showing that we would have afforded relief on appeal.”). In order to make this determination, a reviewing court must “‘counter-factually determine the probable outcome on appeal had counsel raised the argument.'” Id.

         On appeal, a district court's application or interpretation of the Sentencing Guidelines is reviewed de novo and while its factual findings are reviewed for clear error.” Reinhart, 357 F.3d at 530 (had defendant raised the issue, “we would have reviewed ‘the district court's interpretation or application of the Sentencing guidelines de novo and its factual findings, such as a finding of obstruction of justice, for clear error.'”) (citing Phillips, 210 F.3d at 351 and United States v. Huerta, 182 F.3d 361, 364 (5th Cir. 1999)). “As long as a factual finding is plausible in light of the record as a whole, it is not clearly erroneous.” Huerta, 182 F.3d at 364.

         C. The Failure of Appellate Counsel to Appeal Inclusion of CASSE-Related Conduct as Relevant Conduct for Sentencing Purposes Does Not Require Vacating Defendant's Sentence

         Defendant contends that appellate counsel's assistance was ineffective because counsel failed to argue on appeal that findings concerning the CASSE loss as “other relevant conduct” were inadequate.[27] Defendant argues that the sentencing enhancement was based on uncharged conduct and that “neither the Court nor the presentence report identified the relevant criminal statute Dignam violated by virtue of her contact with CASSE.”[28] Defendant asserts that “[t]he District Court's failure to make specific factual findings with respect to: (1) the criminal statute that was violated in relation to the CASSE loss and, (2) how such losses constituted relevant conduct under USSG § 1B1.3 was erroneous.”[29] In response, the United States argues that Defendant's CASSE-related conduct “is almost an exact replica of the conduct charged in the Indictment”[30] and that “at sentencing, there was ample evidence in the record that the defendant's conduct at CASSE was criminal in nature.”[31]

         1. There Was Sufficient Evidence Adduced at Trial to Properly Consider Defendant's CASSE-Related Acts Other Relevant Conduct

         In the PSR, Defendant's CASSE-related acts were described as follows:

Sometime in 2003 and 2004, the defendant was employed by a nonprofit organization called the Council for the Advancement of Social Services (CASSE) located in Shreveport, Louisiana, which provided counseling and other social services to pregnant women. While working for CASSE, the defendant obtained a large federal grant, then convinced CASSE to enter into a number of contracts with third parties that would help CASSE deliver the services in the grant. The 3rd parties included F4T, MySkye, Inc., and PMRC. Just as defendant had approved the GPA contracts on behalf of GPA, the defendant approved these contracts on CASSE's behalf. In the same manner that the defendant engaged in self-dealing while director of the GPA, the defendant concealed from CASSE the fact that she and her husband were PMRC's sole officers and directors. It was also concealed the fact that MySkye was solely owned by PMRC. Once the contracts were in place, the defendant caused CASSE to pay $46, 000 to F4T, $73, 999.32 to MySkye, and $69, 035 to PMRC, for a total of $189, 026.32. Considering the loss of $51, 000 to the GPA, and the loss of $189, 026.32 to CASSE, the total loss is $240, 026.32.[32]

         “A defendant convicted of an offense involving fraud or deceit is sentenced based on the amount of loss attributable to his conduct.” U.S. v. Benns, 740 F.3d 370, 374 (5th Cir. 2014) (citing USSG § 2B1.1(b)). “In addition to losses attributable to the acts underlying the offense of conviction, the loss amount may include losses attributable to other acts that constitute ‘relevant conduct' as defined in the Sentencing Guidelines.'” Id. (citing USSG § 1B1.3(a)(2) & noting that that “[f]raud and related offenses sentenced under § 2B1.1 are grouped with respect to multiple counts. See § 3D1.2(d). Accordingly, relevant conduct for such offenses is determined per the method set forth in § 1B1.3(a)(2).”). “A finding by the district court that unadjudicated conduct is part of the same course of conduct or common scheme or plan is a factual determination subject to review by this court under the clearly erroneous standard.” U.S. v. Hinojosa, 484 F.3d 337, 340 (5th Cir. 2007) (citing United States v. Ocana, 204 F.3d 585, 589 (5th Cir. 2000)). See also, U.S. v. Peterson, 101 F.3d 375, 384 (5th Cir. 1996) (“a district court's findings as to what constitutes relevant conduct is reviewed under a clearly erroneous standard.”).

         The Guidelines state that relevant conduct includes “all acts and omissions…that were part of the same course of conduct or common scheme or plan as the offense of conviction.” USSG §1B1.3(a)(2). “For two or more offenses to constitute part of a common scheme or plan, they must be substantially connected to each other by at least one common factor, such as common victims, common accomplices, common purpose, or similar modus operandi.” USSG §1B1.3 cmt. 9(A).[33]“When sentencing a defendant, a district court may consider uncharged, relevant conduct that has been established by a preponderance of the evidence.” U.S. v. Ballew, 40 F.3d 936, 943 (8th Cir. 1994). “It is not necessary for the defendant to have been charged with or convicted of carrying out the other acts before they can be considered relevant conduct. However, for the acts to constitute relevant conduct, the conduct must be criminal.” U.S. v. McConnell, 273 Fed.Appx. 351, 354 (5th Cir. 2008). See also, U.S. v. Peterson, 101 F.3d 375, 384 (5th Cir. 1996) (“For conduct to be considered ‘relevant conduct' for the purposes of establishing ones [sic] offense level that conduct must be criminal.”).

         Here, evidence was introduced during Defendant's trial that her actions while at CASSE involved a similar modus operandi and common purpose with her actions while with the GPA. In particular, while working at both GPA and CASSE, Defendant entered into contracts on behalf of those respective organizations with Friends for Teens (and other organizations controlled by Defendant or her family) and thereby diverted payments to those subcontractors without adequate documentation or receipt of deliverables. During the trial, Mary Beth Chumley, head of CASSE, testified that she was aware in 2002 that Defendant would be filing a grant on behalf of CASSE[34]and that when the CASSE grant was awarded in the late summer of 2003, [35] Defendant was hired by CASSE full time as project manager.[36] Ms. Chumley testified that she ultimately obtained a copy of the CASSE grant application using an attorney, [37] and learned that the “dba” for the particular grant project was named “Friends for Teens.”[38] She testified that while she initially did not have any concerns about the project, “as time wore on” she began “questioning the deliverables”[39] and explained that:

We had significant sums of monies going out, and I wasn't seeing any paperwork that made me feel like we had deliverables coming any time soon, and I began to question Gail about when were we going to get the computers, how were the educational materials coming along? And I had developed some concerns, because I had no documentation. I was getting invoices, but I was not getting any supporting documentation.[40]

         Ms. Chumley testified that when she raised her concerns with Defendant, Defendant assured her that she had all the necessary supporting documentation.[41] She further testified that while she “began to get better prepared invoices” she “never got any supporting documents…for the two larger contracts” for educational materials from a company called PMRC and computers from a company called MySky.[42] During her testimony, articles of incorporation for Friends for Teens were admitted listing Defendant as director and agent for service of process at the time Defendant was employed with CASSE, and Ms. Chumley testified that CASSE would not have allowed Defendant to “contract with herself.”[43] Evidence was also submitted that PMRC was doing business as MySky, [44] that the owner of PMRC was Defendant's husband, [45] and that CASSE never received computer equipment or other deliverables from MySky[46] despite making payments. With respect to PMRC, evidence was introduced showing Defendant as well as her husband were listed as the corporate officers and directors, and Ms. Chumley testified that it would have been a “violation” to have Defendant working for CASSE and contracting with herself.[47]

         The United States asserts that Defendant's conduct while at CASSE “was virtually identical to the conduct charged in the Indictment, for instance, a mail fraud scheme under 18 U.S.C. § 1341, all of the conduct could have been considered as part of the same mail fraud scheme or constituting two very similar schemes.”[48] Ms. Chumley's testimony supports a finding that Defendant's CASSE-related conduct was also criminal in nature. “To prove mail or wire fraud, the government must prove ‘a scheme to defraud, the use of the mail or wire communications, and a specific intent to defraud.'” Benns, 740 F.3d at 375 (citing United States v. McMillan, 600 F.3d 434, 450 (5th Cir. 2010) (citation omitted)). During Ms. Chumley's testimony, evidence was introduced showing that Friends for Teens, MySkye, and PMRC were controlled by Defendant or her family members and that Defendant entered into contracts on ...


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