Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_17-cv-00426/USCOURTS-azd-2_17-cv-00426-0/pdf.json

Nature of Suit Code: 510
Nature of Suit: Prisoner Petitions - Vacate Sentence
Cause of Action: 28:2255 Motion to Vacate / Correct Illegal Sentence

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UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Brent F. Williams,

Movant/Defendant

-vsUnited States of America,

Respondent/Plaintiff.

CV-17-0426-PHX-ROS (JFM)

CR-09-1492-PHX-ROS

Report & Recommendation 

on Motion to Vacate, Set Aside 

or Correct Sentence

I. MATTER UNDER CONSIDERATION

Movant, following his conviction in the United States District Court for the District 

of Arizona, filed an Amended Motion to Vacate, Set Aside or Correct Sentence pursuant 

to 28 U.S.C. § 2255 (Doc. 24), Memorandum in Support (Doc. 25) and Affidavit in 

Support (Doc. 26) on November 9, 2018 (Doc. 24). On January 2, 2019 Respondent filed 

its Response (Doc. 27). Movant filed a Reply on March 21, 2019 (Doc. 33).

The Movant's Motion is now ripe for consideration. Accordingly, the undersigned 

makes the following proposed findings of fact, report, and recommendation pursuant to 

Rule 10, Rules Governing Section 2255 Cases, Rule 72(b), Federal Rules of Civil 

Procedure, 28 U.S.C. § 636(b) and Rule 72.2(a)(2), Local Rules of Civil Procedure. 

II. RELEVANT FACTUAL & PROCEDURAL BACKGROUND

A. FACTUAL BACKGROUND

The following is a summary of Respondents’ statement of the factual background, 

and is offered only to provide context for understanding the parties’ arguments. 

In 2002, co-Defendants, including Movant’s son, Guy Williams, formed an entity 

known as “Mathon Fund I.” Movant became Chief Financial Officer in the operation in 

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2003. The business model was to solicit money from investors and use that money to 

make short-term, high-interest rate loans to third-party borrowers—transactions often 

known as “hard money” loans. The company targeted members of the Church of Jesus 

Christ of Latter Day Saints as investors, and touted the principals’ standing with the 

church. Investors were told their funds were designated to specific loans, and repayment 

was conditioned on performance of the funded loan. Instead, few loans were actually 

made, some to companies owned by the principals in the fund, many loans defaulted, and 

investors funds were commingled, and new investors’ money was used to repay other 

investors. 

In 2003, the principals formed “Mathon Fund” which represented that investors’ 

money was pooled and proceeds from loans were to be shared, a cash reserve and an 

insurance policy against defaults would be maintained, and the fund would be audited 

annually. Instead, investments were used to repay old investors, pay related companies 

or pay compensation to insiders. An audit of one month was conducted, and resulted in an

oral warning by the auditors that the company had become a Ponzi scheme, but this wasn’t 

included in the written report, which was then used for marketing. No reserve fund was 

ever created or insurance policy purchased. A disgruntled investor was paid off by the 

company reselling his interest multiple times to new investors. Loans to insider owned 

companies continued and defaults covered by taking money from new investors, with 

portions being retained by the company as fees. Misleading statements were sent to 

investors, and in-house counsel warned of a coming death spiral. The principals took steps 

to conceal various aspects of their business practices.

By 2005, the Arizona Corporation Commission had taken over the company and 

had a court-appointed receiver take control. When the dust settled, investors had lost 

approximately $32.9 million. 

B. PROCEDURAL BACKGROUND

An original Indictment was filed in December 2009. (CR Doc. 3.) (References to 

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the docket in the underlying criminal case, CR 09-01492-PHX-ROS, are referenced herein 

as “CRDoc. ___.”) The matter lingered on through various continuances and motion 

practice, until it proceed to trial in January 2013. A mistrial was called after 17 days of 

trial. (CR Doc. 1083.) 

The matter again proceeded to trial on June 17, 2013. (CR Doc. 1305.) Guilty 

verdicts were returned against Movant on counts 1, 4-5, 6-18 and 19-40. (CR Doc. 1325.) 

On September 30, 2013, Movant and his co-defendant, Guy Andrew Williams 

(collectively, the “Williamses”), were sentenced on charges of Conspiracy to Commit Mail 

Fraud and/or Wire Fraud and multiple counts of Mail Fraud, Wire Fraud, and 

Transactional Money Laundering. (CRDocs. 1552, 1553.) Movant was sentenced to 

concurrent sentences of 90 months, and consecutively concurrent sentences of three years 

supervised release. 

In a December 30, 2013 Order, the Court ordered Movant to pay restitution “in the 

amount of $15,658,454.05, joint and several with his codefendants.” (Doc. 1547.) An 

Amended Judgment incorporating the restitution Order was entered on January 9, 2014. 

(Doc. 1553.)

The Williamses appealed their convictions and sentences, and in an August 24, 

2015 memorandum decision, the Ninth Circuit Court of Appeals affirmed the Court’s 

judgment. (CRDoc. 1608-1.) The Court of Appeals’ mandate issued on November 4, 2015. 

(CRDoc. 1608.) 

In June 2016, the Williamses each filed a Motion for New Trial under Federal Rule 

of Criminal Procedure 33 raising, inter alia, challenges to this Court’s subject-matter 

jurisdiction. (CRDocs. 1616, 1620.) In an August 9, 2016 Order, the Court denied the 

Williamses’ Motions for New Trial after determining that their jurisdictional arguments 

reflected a misunderstanding of the Securities and Exchange Commission’s role in 

securities fraud cases. (CRDoc. 1623.) 

The Williamses filed a consolidated appeal from the Court’s August 9, 2016 Order

and in a January 19, 2018 memorandum decision, the Court of Appeals affirmed the 

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August 9, 2016 Order. Movant’s subsequent petition for rehearing and rehearing en banc

was denied, and on May 31, 2018, the Ninth Circuit issued its mandate. (CRDoc. 1642.)

C. PRESENT MOTION TO VACATE PROCEEDINGS

Movant commenced this case by filing his original Motion to Vacate, Set Aside, or 

Correct Sentence, pursuant to 28 U.S.C. § 2255, on February 9, 2017, during the pendency 

of the direct appeal. That motion asserted the following grounds for relief:1

1. Ineffective assistance re preclusion of Movant from testifying.

a. Ineffective assistance re engaging an expert.

b. Ineffective assistance re post-trial motions.

c. Ineffective assistance re prosecutor’s closing argument.

2. Ineffective assistance re lack of subject matter jurisdiction.

3. Ineffective assistance re Article III standing of the district court.

4. Ineffective assistance re prosecutor’s authority.

5. Ineffective assistance re money laundering.

6. Ineffective assistance re selective prosecution.

7. Ineffective assistance re mail fraud.

8. Ineffective assistance re Brady violation.

9. Ineffective assistance re prosecutorial misconduct - fraud on the court.

10.Ineffective assistance re primary administrative jurisdiction.

11.Ineffective assistance re duplicitous indictment. 

12.Ineffective assistance re Daubert.

Consideration of the motion was stayed pending completion of the appeal. (Order 

5/17/17, Doc. 11.) In the interim, Petitioner filed a “Supplemental Petition” (Doc. 21) 

which asserted a claim based on Honeycutt v. United States, 137 S.Ct. 1626 (2017) (scope 

1 With regard to original Ground 1, Respondent notes it included additional arguments of 

ineffective assistance based on failure to engage an expert, failure to file post-trial

sufficiency motions, and failure to object to the prosecutor’s closing argument. (Id. at 2, 

n.3.) The undersigned denotes these as original Grounds 1(a), 1(b), and 1(c).

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of joint and several liability under a federal forfeiture statute, 21 U.S.C. § 853). 

Upon issuance of the Ninth Circuit mandate, the Court lifted the stay, granted 

Movant leave to amend his motion to vacate, and set briefing deadlines. In addressing the 

“Supplemental Petition,” the Court observed that a 2255 motion could not be used to 

challenge a restitution order, but because the import of the “Supplemental Petition” was 

not clear, the Court granted Petitioner leave to file an amended motion including his 

original claims and his Honeycutt claim, deferring any decision on the cognizability of the 

Honeycutt claim. (Order 10/5/18, Doc. 23.) “In all other respects, the Supplemental 

Petition [was] denied.” (Id. at 5.) 

Movant then filed, on November 9, 2018, the instant Amended Motion to Vacate

(Doc. 24), along with a Memorandum (Doc. 25) and Affidavit (Doc. 26) in support. 

Movant asserts the following grounds for relief:

1. Counsel was ineffective regarding: 

a. issues on appeal; 

b. preclusion of Movant from testifying; 

c. expert witnesses; 

d. post-trial motions; 

e. prosecutorial misconduct at closing arguments; 

f. prosecutorial misconduct re unauthorized conduct; 

g. prosecutorial misconduct re money laundering charge; 

h. selective prosecution; 

i. invalid mail fraud offense; 

j. duplicitous indictment/unanimity of verdict; 

k. primary jurisdiction; 

l. Daubert violations; 

m. fraud on the court; and 

n. pretrial restraint of innocent assets.

2. Newly discovered Brady claim.

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3. Defects in subject matter jurisdiction.

4. Denial of counsel of choice.

In his Memorandum in Support, Movant engages in a practice of accretive and 

circular arguments, restating the substance of other grounds for relief as part of his 

argument on other grounds. In general, the undersigned has discerned no context in which 

the accretion of claims together alters the analysis, and thus addresses the primary claims

(as identified in the Amended Motion to Vacate) on the basis of the arguments unique to 

the primary claim.

Motion for Evidentiary Hearing - Movant filed a Motion for Evidentiary Hearing 

(Doc. 28), which was denied as premature because “the Amended § 2255 motion is not 

fully briefed, [thus] the Court cannot determine whether a hearing is required.” (Order 

2/14/19, Doc. 32 at 2.) 

Movant has not renewed that motion, but does argue in his Reply for an evidentiary 

hearing on his claims related to the court’s lack of subject matter jurisdiction. (Reply, 

Doc. 33 at 11.) In addition, he argues in his Memorandum in Support that an evidentiary 

hearing should be held on his allegations of prosecutorial misconduct (particularly relating 

to the SEC records) (Memo, Doc. 25 at 6, 12, 123, 125, 135), and the “jurisdictional 

defects” (id. at 33, 138) 

Response – On January 2, 2019, Respondent filed its Response (Doc. 27), arguing 

that the original Motion and Amended Motion are untimely, various grounds were decided 

or procedurally defaulted on direct appeal, and various claims are without merit.

Reply – Movant argues that the Response should be stricken because it was 

required to address the merits of his claims before asserting the statute of limitations. 

(Doc. 33 at 4-5, 21-23.) He argues his Motion is timely because: (1) his claims amount to 

subject matter jurisdiction claims, which can be raised at any time (Doc. 33 at 6); (2) his 

original Motion was timely (id.); (3) any new instances of ineffective assistance alleged in

the Amended Motion are not new claims, just new facts (id. at 7-9); (4) his claims are 

based on newly discovered evidence, i.e. information from the Securities and Exchange 

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Commission that the Commission found no Ponzi scheme (id. at 10-20.) He argues the 

merits of his Honeycutt claim. (Id. at 23-24.) 

Supplemental Answer – On October 11, 2019, the Court ordered Respondent to 

supplement its Response to address the merits of Ground 1J, 1L and 1M. (Order 10/11/19, 

Doc. 37).2 On October 29, 2019, Respondent filed its Supplemental Response (Doc. 38). 

Respondent argues each of the grounds lack merit. 

On January 6, 2020, Movant filed his Supplemental Reply (Doc. 41). Movant 

argues the merits of his claims. 

III. APPLICATION OF LAW TO FACTS

A. AMENDMENT EXCEEDING GRANT OF LEAVE

Respondent argues that because leave to amend was limited to the claims in the 

original motion and the Honeycutt claim, any additional claims raised in the amended 

motion were unauthorized. Consequently, Respondent addresses the 12 claims in the 

original Motion to Vacate (as stated therein), and the Honeycutt claim as asserted in the 

Amended Motion to Vacate. (Response, Doc. 27 at 2, n.2.) 

Upon issuance of the Ninth Circuit mandate, the Court granted Petitioner leave to 

file an amended motion including his original claims and his Honeycutt claim, deferring 

any decision on the cognizability of the Honeycutt claim. (Order 10/5/18, Doc. 23.) The 

Court directed: “Movant may submit an amended motion that encompasses both his 

original claims, as pleaded in the § 2255 Motion, and the new claim proposed in his 

Supplemental Petition.” (Id. at 23.) The Court did not explicitly preclude Movant from 

amending the pre-existing claims, e.g. by asserting additional facts, authorities, or 

arguments. Thus, only new claims would be outside this grant of leave.

Moreover, Federal Rule of Civil Procedure 15(a)(1) grants a party a right to amend 

2

In the interim, on April 1, 2019, following the elevation of then Magistrate Judge Bade 

(to whom the case had been referred) to the Ninth Circuit Court of Appeals, this matter 

was referred to the undersigned magistrate judge. (Order 4/1/19, Doc. 34.) 

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their pleading “once as a matter of course” within specified time limits. Where the 

pleading “is one to which a responsive pleading is required,” as is a Rule 2255 motion, 

that time limit extends until “21 days after service of a responsive pleading” or motion 

under Rule 12(b) (dismiss), 12(e) (more definite statement), 12(f) (motion to strike). Here, 

no responsive pleading or applicable Rule 12 motion was filed prior to the filing of 

Movant’s Amended Motion. 

It is true that Plaintiff had previously attempted an amendment by a motion for 

leave to amend (Doc. 16), which was denied without prejudice because of the stay. (Order 

4/3/18, Doc. 22.) It is also true that Plaintiff attempted to file a Supplemental Petition 

(Doc. 21), but the Court construed this as “seek[ing] leave to amend his § 2255 Motion to 

add a claim based on Honeycutt.” (Order 10/5/18, Doc. 23 at 2.) The Court denied that 

request, noting that any amended motion had to incorporate all his claims. (Id. at 3-4.) 

Under Rule 15(a), a motion for leave to amend does not cutoff the right to make an 

amendment as a matter of course. But see Arthur R. Miller, Amendments as of Course—

Effect of a Motion for Leave to Amend During the Time for Amendment as of Course, 6 

Fed. Prac. & Proc. Civ. § 1482 (3d ed.) (August 2019) (noting lack of clarity). 

Thus, when Movant filed his Amended Motion, he retained his right to amend once 

as a matter of course. Thus, he was entitled to make any amendment beyond the leave 

granted as a matter of course. Consequently, there is no need to refer to the original Motion 

as setting the boundaries for the contents of the Amended Motion. 

Of course, that does not resolve whether the claims in the Amended Motion relate 

back to the original Motion for purposes of the statute of limitations. That issue is 

discussed hereafter.

B. TIMELINESS

Respondents argue both the original Motion (Doc. 1) and the Amended Motion 

(Doc. 24) are untimely.

/ / 

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1. One Year Limitations Period

The statute of limitations applicable to habeas proceedings by federal prisoners has 

been codified at 28 U.S.C. § 2255(f), which generally provides that motions to vacate filed 

beyond the one year limitations period are barred and must be dismissed. 

2. No Exception for “Jurisdictional” Claims

Movant argues that jurisdictional claims can be raised at any time. “The fact that

[the petitioner] raises a jurisdictional challenge to his conviction does not exempt him from 

the habeas statute of limitations, however.” Briscoe v. Eppinger, 2018 WL 3390141, at 

*2 (6th Cir. May 31, 2018), cert. denied, 139 S. Ct. 1573 (2019), reh'g denied, 140 S. Ct. 

13 (2019) (unpublished decision). See also Northrop v. Ryan, 2018 WL 6931891, at *6 

(D. Ariz. Aug. 16, 2018), report and recommendation adopted, 2018 WL 6300440 (D. 

Ariz. Dec. 3, 2018), certificate of appealability denied, 2019 WL 2542852 (9th Cir. Apr. 

26, 2019) (“even challenges asserting a lack of subject matter jurisdiction of the trial court 

are subject to the limitations period governing federal habeas petitions”).

Moreover, it is only claims that the court lacked jurisdiction that are not waivable. 

See Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435 (2011) (addressing civil 

judgment). “Because the consequences that attach to the jurisdictional label may be so 

drastic, we have tried in recent cases to bring some discipline to the use of this term. We 

have urged that a rule should not be referred to as jurisdictional unless it governs a court's 

adjudicatory capacity, that is, its subject-matter or personal jurisdiction.” Id. at 435. The 

grounds for relief asserted by Movant do not attack the jurisdiction of the court. At best, 

Movant argues that the prosecutor lacked authority to commence the case. Even if it is 

assumed that such a defect would amount to a lack of jurisdiction by the Court, as 

discussed hereinafter, the law of the case precludes Movant’s reliance on such claim. 

3. Commencement 

The undersigned begins by looking at the timeliness of the original Motion (Doc. 

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1), and will subsequently analyze the relation back of claims from the Amended Motion 

(Doc. 24).

a. Conviction Final – 2255(f)(1)

A federal habeas petitioner’s time to file under 28 U.S.C. §2255 generally begins 

to run on “the day on which the judgment of conviction becomes final.” 28 U.S.C. 

§2255(f).3 Although §2255 does not define final, the Supreme Court has applied its 

ordinary standard of finality. “Finality attaches when [the Supreme] Court affirms a 

conviction on the merits on direct review or denies a petition for a writ of certiorari, or 

when the time for filing a certiorari petition expires." Clay v. United States, 537 U.S. 522, 

527 (2003). 

Here, Movant’s direct appeal was decided on August 24, 2015. The petition for 

panel rehearing or rehearing en banc was denied on October 26, 2015. The Court of 

Appeals’ mandate issued on November 4, 2015. (CRDoc. 1608.) Petitioner did not seek 

certiorari review. 

A petition for writ of certiorari is due “within 90 days after entry of the judgment” 

by the U.S Court of Appeals. U.S.S.Ct. R. 13(1). However, where a timely motion for 

rehearing is filed, the ninety days runs from the denial of rehearing (the date of issuance 

of the mandate is irrelevant). U.S.S.Ct. R. 13(3). Thus, Movant had 90 days from the 

October 26, 2015 denial of rehearing to seek certiorari review. He did not do so, and thus 

on January 25, 2016, his conviction became final.4 

His one year limitations period expired one year later, on Wednesday, January 25, 

3 Later commencement times can also result from an impediment, newly recognized rights 

made retroactive, and newly discovered factual predicates for claims. See 28 U.S.C. § 

2255(2), (3) and (4). Except as discussed hereinafter, Movant does not assert these apply.

4 Respondents calculate the last day as January 24, 2016. That day was, however, a 

Sunday. For purposes of counting time for a federal statute of limitations, the standards 

in Federal Rule of Civil Procedure 6(a) apply. Patterson v. Stewart, 251 F.3d 1243, 1246 

(9th Cir. 2001). That Rule provides “ if the last day is a Saturday, Sunday, or legal holiday, 

the period continues to run until the end of the next day that is not a Saturday, Sunday, or 

legal holiday.” Thus, the last day was Monday, January 25, 2016. Thus, Respondent 

erroneously calculates Movant’s one year as expiring January 24, 2017, one day too soon.

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2017. 

Movant’s original motion was filed by the Clerk on February 9, 2017. However, 

Movant included with his Memorandum in Support a Certificate of Service (Doc. 2 at 16) 

declaring under penalty of perjury that it was delivered prison officials for mailing on 

dated February 3, 2017. “In determining when a pro se state or federal petition is filed, 

the ‘mailbox’ rule applies. A petition is considered to be filed on the date a prisoner hands 

the petition to prison officials for mailing.” Porter v. Ollison, 620 F.3d 952, 958 (9th Cir. 

2010). Under this rule, Movant’s original Motion is deemed filed February 3, 2017.

Even so, his original Motion was untimely by 9 days. 

b. No Reset from Amended Judgment

The original Judgment (CRDoc. 1454) ordered Movant to pay “RESTITUTION: 

To be determined.” (Id. at 1 (emphasis in original).) An Amended Judgment incorporating 

the restitution Order (CRDoc. 1547) was entered on January 9, 2014. (CRDoc. 1553.) The 

Ninth Circuit has held, however, that finality for purposes of § 2255(f) is measured from 

the original conviction and sentence, and not a subsequent amended judgment setting the 

amount of restitution. United States v. Gilbert, 807 F.3d 1197, 1200 (9th Cir. 2015).

Moreover, in Burton v. Stewart, 549 U.S. 147 (2007), the Court concluded that for 

purposes of the habeas statute of limitations, “[f]inal judgment in a criminal case means 

the sentence. The sentence is the judgment.” Id. at 156-157 (quoting Berman v. United 

States, 302 U.S. 211, 212 (1937)). Here, Movant’s sentence was not modified. 

Finally, even if this Amended Judgment were relevant under § 2255(f), it must have 

been separately appealed. Manrique v. United States, 137 S. Ct. 1266, 1274 (2017) (“a 

defendant who wishes to appeal an order imposing restitution in a deferred restitution case 

must file a notice of appeal from that order”). Movant never filed an appeal from that 

judgment. (Cf. Notice of Appeal 10/11/13, CRDoc. 1465 (appealing original Judgment, 

CRDoc. 1454); Notice of Appeal 8/25/16, CRDoc. 1628 (appealing Order denying new 

trial, CRDoc. 1623).) Movant’s time to appeal that Amended Judgment expired after 14 

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days, see Fed. R. App. P. 4(b)(1)(A), and thus this judgment became final by conclusion 

of the time for direct review on January 23, 2014. This was long before the time calculated 

in reference to the original Judgment (CRDoc. 1454). 

c. No Delay or Tolling from Motion for New Trial

In June 2016, Movant filed a Motion for New Trial (CRDocs. 1616, 1620) wjocj 

was denied on August 9, 2016 (CRDoc. 1623), and affirmed by the Ninth Circuit on appeal 

on January 19, 2018, rehearing en banc denied, and mandate issued on May 31, 2018. 

(CRDoc. 1642.) However, unless they result in the vacating or amendment of the original 

judgment, post-trial motions and appeals therefrom do not reset the commencement of the 

statute of limitations. Outler v. United States, 485 F.3d 1273, 1278 (11th Cir. 2007)

(commencement not extended for motion for new trial); Johnson v. United States, 246 

F.3d 655, 659 (6th Cir. 2001) (same); United States v. Booker, 564 F. Supp. 2d 7, 12–13 

(D.D.C. 2008) (commencement not extended by motion for resentencing); United States 

v. Colvin, 204 F.3d 1221, 1225 (9th Cir. 2000) (commencement reset by reversal and 

remand, and until after resentencing and time for appeal therefrom). 

Nor did the pendency of these post-appeal proceedings toll the running of the statute 

of limitations. 

It is true the statute of limitations applicable to state prisoners includes a provision 

for tolling while properly filed state proceedings are pending. See 28 U.S.C. § 2244(d)(2). 

The statute of limitations for federal prisoners makes no similar provision for tolling.

United States v. Redd, 562 F.3d 309, 312 (5th Cir. 2009) (rule 33 motion filed more than 

ten days after the entry of judgment does not toll § 2255’s one-year statute of limitations, 

because it is a collateral attack and not a direct appeal); United States v. Prescott, 221 F.3d 

686, 688 (4th Cir. 2000) (no tolling for pendency of Rule 33 motion); and Fed. Prac. & 

Proc. Crim. § 591 (4th ed. 2016) (“The time period to file both a new trial motion and a § 

2255 motion begin to run when a judgment becomes final and the filing of either type of 

motion does not toll the time allowed to file the other motion.”). 

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d. Newly Recognized Rights – 2255(f)(3)

In Ground 4, Movant asserts a claim based on the recent Supreme Court decision 

in Honeycutt v. United States, 137 S.Ct. 1626 (2017). The statute provides a delayed 

commencement from “the date on which the right asserted was initially recognized by the 

Supreme Court, if that right has been newly recognized by the Supreme Court and made 

retroactively applicable to cases on collateral review.” 28 U.S.C. § 2255(f)(3).

In Honeycutt, the Supreme Court held that joint and several liability was not 

authorized under the criminal forfeiture statute for certain drug crimes, 21 U.S.C. § 853(a).

Respondent concedes that Honeycutt established a new rule (or right), citing 

contrary circuit court opinions. However, under Teague, a new rule will be applied 

retroactively only if it (1) is substantive in that it alters the range of conduct or class of 

people that the law punishes or (2) it is a watershed rule of criminal procedure. Teague v. 

Lane, 489 U.S. 288, 307 (1989). Respondent contends Honeycutt is procedural, not 

substantive, and that it did not establish a watershed rule of criminal procedure. 

Section 2255(f)(3) has three requirements: (1) the claim must be based on a new 

“right”; (2) the right must have been newly recognized by the Supreme Court; and (3) it 

must have been made retroactive. Respondents rely on the absence of the third: 

retroactivity.

A preliminary consideration is whether this Court can make the retroactivity 

determination. In the context of applying § 2244(b)(2)(A) on second and successive 

petitions, the Supreme Court has held that “a new rule is not ‘made retroactive to cases on 

collateral review’ unless the Supreme Court holds it to be retroactive.” Tyler v. Cain, 533 

U.S. 656, 663 (2001). But the second and successive application provision of § 

2244(b)(2)(A) has language different from the statute of limitations language in § 

2255(f)(2) and its habeas petition counterpart in § 2244(d)(1)(C). In applying the statute 

of limitations provisions, other courts have generally held that the lower courts are 

competent to resolve whether a case should be made retroactively applicable. See Brian 

R. Means, Made retroactively applicable to cases on collateral review, Federal Habeas 

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Manual § 9A:30 (May 2019) (detailing cases). The Ninth Circuit has apparently not 

addressed this issue. The undersigned assumes arguendo that the Ninth Circuit would 

follow the other circuits and that a decision on retroactivity by the Supreme Court (or a 

circuit court) is not required. 

The undersigned also agrees with Respondents and other courts that have addressed 

the issue that Honeycutt is a procedural rule, is not a watershed rule, and does not apply 

retroactively. See United States v. Ortiz, 2018 WL 3304522, at *8 (E.D. Pa. July 5, 2018)

(Honeycutt not retroactive); United States v. Bangiyev, 359 F. Supp. 3d 435, 440 (E.D. 

Va.), aff'd, 771 F. App'x 328 (4th Cir. 2019) (same); United States v. Potts, 2018 WL 

5296376, at *3 (E.D. Pa. Oct. 25, 2018), aff'd, 765 F. App'x 638 (3d Cir. 2019), cert. 

denied, 140 S. Ct. 239 (2019) (same); United States v. Gioeli, 2019 WL 6173421, at *3 

(E.D.N.Y. Nov. 20, 2019) (same); United States v. Filice, 2018 WL 2326616, at *3 (E.D. 

Ky. May 22, 2018) (same).5

Accordingly, Movant is not entitled to a delayed commencement under § 

2255(f)(3).

e. Newly Discovered Facts – 2255(f)(4) 

Movant argues that he is entitled to a delayed start of the limitations period based 

on the discovery of evidence that: (1) the SEC had concluded that there were no securities 

violations, no key misrepresentations made, and no Ponzi scheme, and that Movant was 

an employee, not an officer, director, member, owner or control person of Mathon Fund, 

LLC (Reply Doc. 33 at 13-14; and (2) “the actual securities agreements prosecutors claim 

constitute a ‘Ponzi scheme’" (id. at 15.) 

The statute provides for a later starting date of “the date on which the facts 

5 Moreover, a challenge to a forfeiture is not a proper claim in a § 2255 proceeding. 

“Claims seeking release from custody can be brought under § 2255; claims seeking other 

relief cannot.” United States v. Thiele, 314 F.3d 399, 402 (9th Cir. 2002) (challenging 

restitution order). See United States v. Finze, 428 F. App'x 672, 677 (9th Cir. 2011) 

(unpublished decision) (applying Thiele to bar 2255 challenging forefeiture). 

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supporting the claim or claims presented could have been discovered through the exercise 

of due diligence.” 28 U.S.C. § 2255(f)(4). For the following reasons, Movant fails to 

show that he is entitled to a later start date under this provision.

First, Movant fails to show that he did not discover this new evidence one year or 

less prior to his February 3, 2017 original Motion. Indeed, this same evidence formed the 

basis for Movant’s Motion for New Trial filed in June 2016 (CR 1620). At most, Movant 

has generically cast the information as “newly discovered.”

Second, Movant proffers nothing to establish that this information could not have 

been discovered earlier through the exercise of due diligence. In evaluating the requisite 

due diligence, the Court considers the resources available to Movant, including counsel at 

trial and on appeal. See Wood v. Spencer, 487 F.3d 1, 5 (1st Cir. 2007) (“lawyer's 

knowledge is attributed to her client”); and Ford v. Gonzalez, 683 F.3d 1230, 1235 (9th 

Cir. 2012) (applying newly discovered facts standard to §2254 habeas petition) (“due 

diligence requirement is an objective standard, [but] a court also considers the petitioner's 

particular circumstances” including “resources at the petitioner's disposal to discover his 

or her claim”). 

 In deciding the Motion for New Trial, this Court has already rejected, under Rule 

33), the assertion that this was “newly discovered evidence” or that Movant was diligent 

in discovering it: 

As explained by the Government, prior to trial Defendants 

were well aware the SEC had investigated their activities (Doc. 1617 

at 2). And given that the criminal case was brought by the Department 

of Justice, Defendants were aware long ago that it was not the SEC 

pursuing criminal charges against them. Thus, it is simply not 

possible Defendants only recently learned of the SEC’s investigation 

or non-involvement in this case. Defendants fail the first and most 

basic requirement of a Rule 33(b)(1) motion. 2 

Moreover, Defendants have not established they were diligent 

in obtaining the allegedly new evidence. Defendants waited until 

almost three years after their convictions to file their Motions and 

offer no explanation for this delay. Without evidence establishing 

Defendants were diligently pursuing the evidence, the Motions fail 

the second requirement. See United States v. Harrington, 410 F.3d 

598, 601 (9th Cir. 2005) (noting defendant had not been diligent in 

obtaining evidence when evidence “could have been obtained at any 

time”).

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(Order 8/9/16, Doc. 1623 at 2-3.) Assuming the Court could now do so, Movant proffers 

no reason to now reach a different conclusion. 

To the contrary, his arguments show the ease with which he could have ascertained 

this information:

Notably, had defense counsel merely contacted the SEC, or 

sought the results of its investigation, or simply subpoenaed the SEC 

at trial, the Fraud, Evidence Tampering, and jurisdictional defects 

would have been exposed, and a very different outcome to the trial 

would have resulted. 

For example, all that was required was to subpoena the SEC 

at trial to establish for the jury that the purported "Ponzi scheme" 

which is the basis for the offense, does not actually exist. or, that the 

purported fraudulent securities which are the basis for the scheme, 

are not actually fraudulent, but instead legal, legitimate, and 

authorized by the SEC. 

* * *

Further, had defense counsel actually obtained and examined 

the purported fraudulent securities, which are the basis for the 

offense, the object of the conspiracy, the mail matter in furtherance 

of the scheme, then the Brady violations and evidence tampering, also 

would have been exposed.

(Amended Memo, Doc. 25 at 34.) 

At least to the extent that Plaintiff relies on this SEC information to support his 

claims of ineffective assistance of appellate counsel, the failure of trial and appellate 

counsel to identify this information would be relevant to the diligence question. But 

Movant proffers nothing to show that even without counsel he could not have discovered 

this evidence sooner than one year before his original Motions was filed.

Therefore, Movant fails to show he is entitled to application of 2255(f)(4).

4. Equitable Tolling

In U.S. v. Battles, 362 F.3d 1195 (9th Cir. 2004), the Ninth Circuit held the statute 

of limitations under 28 U.S.C. § 2255 may be equitably tolled. 

A § 2255 movant is entitled to equitable tolling “only if he shows ‘(1) 

that he has been pursuing his rights diligently, and (2) that some 

extraordinary circumstance stood in his way’ and prevented timely 

filing.” The movant must show that the extraordinary circumstances 

“ ‘were the cause of his untimeliness.’ ” 

United States v. Buckles, 647 F.3d 883, 889 (9th Cir. 2011) (citations omitted). Movant 

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bears the burden of proof on the existence of cause for equitable tolling. Pace v. 

DiGuglielmo, 544 U.S. 408, 418 (2005).

In the recent en banc decision in Smith v. Davis, 2020 WL 1316832, at *3 (9th Cir. 

Mar. 20, 2020), the Ninth Circuit resolved a discrepancy between prior decisions and 

eschewed the “stop-clock” method of applying equitable tolling (that requires diligence 

only during the course of the extraordinary circumstance, and not thereafter, resulting in a 

day-for-day pause of the running of the limitations clock). Instead, the Court adopted a 

rule which conditions equitable tolling on a question of causation. “As we have previously 

described it, whether an impediment caused by extraordinary circumstances prevented 

timely filing is a “causation question” that requires courts to evaluate a petitioner’s 

diligence in all time periods—before, during, and after the existence of an “extraordinary 

circumstance”—to determine whether the extraordinary circumstance actually did prevent 

timely filing.” Id. at *9. 

Movant argues that he is entitled to equitable tolling based on the number and 

complexity of claims, and Movant’s pro se status and limited legal and office resources. 

He argues he has diligently pursued his claims. Moreover, he argues that on January 23, 

2017, his institution closed the prison law library for emergency maintenance, precluding 

his access for 10 days to research materials, computers and typewriters, as well as 

Movant’s draft motion and memorandum and files. Upon regaining access on February 

3, 2017, he finalized and delivered his original Motion to for mailing to the Court. (Memo 

in Support, Doc. 25 at 15-17.) 

Respondents do not address these contentions. 

With no reason appearing to conclude otherwise, the undersigned finds that 

Movant’s timely filing was precluded by the extraordinary circumstances of the 10 day 

closure, and that given the apparent lack of alternative means to file, that Movant was 

diligent during the existence of those circumstances. Moreover, given the complexity of 

the case and the claims raised, the Court finds that Movant was diligent prior to the 

extraordinary circumstances. And, given Movant’s mailing of his original Motion on the 

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same date the extraordinary circumstance abated, that he was diligent after the 

circumstances. 

Thus, the undersigned concludes that Movant is entitled to 11 days equitable tolling 

(from January 23, 2017 to February 3, 2017). Thus, rather than expiring January 25, 2017, 

his one year expired on February 3, 2017, making his February 3, 2017 original Motion 

timely. 

5. Actual Innocence

To avoid a miscarriage of justice, the habeas statute of limitations does not preclude 

“a court from entertaining an untimely first federal habeas petition raising a convincing 

claim of actual innocence.” McQuiggin v. Perkins, 569 U.S. 383, 398 (2013). (habeas 

petition under 28 U.S.C. § 2254). The Ninth Circuit has applied this principle to motions 

to vacate under § 2255. United States v. Kimber, 591 F. App'x 578 (9th Cir. 2015)

(unpublished). See also Phillips v. United States, 734 F.3d 573, 575 (6th Cir. 2013)

(applying McQuiggins in § 2255 case). 

An actual innocence showing is not met by creating a reasonable doubt. Nor is it 

an opportunity to simply retry the case. Rather, it must be based on new reliable evidence 

such as “exculpatory scientific evidence, trustworthy eyewitness accounts, or critical 

physical evidence.” Schlup, 513 U.S. at 324. 

Movant makes no claim of actual innocence, nor posit any new, reliable evidence. 

The only new evidence he raises is the information from the SEC, which the Ninth Circuit 

has already concluded does not negate Movant’s convictions. (See Mem. Dec., CRDoc. 

1642.)

6. Application to Amended Motion

a. Amended Motion Untimely 

Based on the foregoing, the undersigned has concluded that Movant’s original 

Motion was timely. However, the applicable, pending pleading is Movant’s Amended 

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Motion (Doc. 24), which was filed November 9, 2018, over seven months after the 

equitably tolled limitations period had expired.

b. Relation Back of Claims in Original Motion

Federal Rule of Civil Procedure 15(c), made applicable to habeas proceedings by § 

2242, Federal Rule of Civil Procedure 81(a)(2), and 2255 Rule 12, provides that 

amendments made after the statute of limitations has run relate back to the date of the 

original pleading if the original and amended pleadings “ar[i]se out of the [same] conduct, 

transaction, or occurrence.” Rule 15(c)(2). Relation back does not occur merely because 

the same conviction is being attacked. Rather, it “depends on the existence of a common 

‘core of operative facts’ uniting the original and newly asserted claims.” Mayle v. Felix, 

545 U.S. 644, 659 (2005) (applying Rule 15(c)(2) to state prisoner’s habeas petition and 

rejecting arguments that the trial or conviction were the relevant transactions). An 

amended petition “does not relate back (and thereby escape AEDPA's one-year time limit) 

when it asserts a new ground for relief supported by facts that differ in both time and type 

from those the original pleading set forth.” Mayle, 545 U.S. at 650. 

Here, because the original Motion was timely (as a result of equitable tolling), the 

question is whether the claims in the amended Motion arose form a common core of 

operative facts alleged in the original motion. If not, then they are untimely, and must be 

dismissed with prejudice.

The undersigned addresses hereinafter the application of these determinations to 

Movant’s various claims.

C. CLAIMS AND ISSUES DECIDED ON APPEAL

Respondent argues that original Grounds 2 through 10 were decided on appeal from 

Movant’s motion for new trial, and thus cannot be raised again.

Ordinarily, the doctrines of res judicata and collateral estoppel do not apply to 

habeas corpus proceedings. Sanders v. U.S., 373 U.S. 1, 8 (1963). However, the law of 

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the case doctrine is applicable on federal habeas review. Shore v. Warden, 942 F.2d 1117, 

1123 (7th Cir. 1991). "The law of the case doctrine ordinarily precludes a court from reexamining an issue previously decided by the same court, or a higher appellate court, in 

the same case." U.S. v. Caterino, 29 F.3d 1390, 1395 (9th Cir. 1994), overruling on other 

grounds recognized by United States v. Audette, 923 F.3d 1227, 1242 (9th Cir. 2019)

(quoting U.S. v. Maybusher, 735 F.2d 366, 370 (9th Cir. 1984)). Under this doctrine, a 

district court will ordinarily refrain from acting if an appellate court previously has issued 

a decision on the merits of the claim. Caterino, 29 F.3d at 1395. 

Thus, the Ninth Circuit has long held that "[i]ssues disposed of on a previous direct 

appeal are not reviewable in a subsequent petition under 2255." Stein v. U.S., 390 F.2d 

625, 626 (9th Cir. 1968). “The law in this circuit is clear that when a matter has been 

decided adversely on appeal from a conviction, it cannot be litigated again on a 2255 

motion.” Odom v. United States, 455 F.2d 159, 160 (9th Cir. 1972). 

On direct appeal, the Ninth Circuit refused to address Movant’s claims of 

ineffective assistance, deferring them to a habeas petition. (Mem. Dec. CRDOC 1608 at 

¶ 2.) The only other claim addressed was Movant’s claim that the district court abused its 

discretion “by excluding evidence of post-conspiracy collection efforts of Mathon Fund’s 

defaulted loans (or evidence that the Defendants personally attempted to collect on any 

defaulted loans at no cost to their victims).” (Id. at ¶ 1.) That claim is not raised herein.

In ruling on the appeal following the motion for new trial, the Ninth Circuit upheld 

this Court’s denial of Movant’s “subject matter jurisdiction, Brady, and prosecutorial 

authority claims” which were “premised on the assumption that the Department of Justice 

lacked authority to bring charges against them absent a pre-indictment enforcement action 

by the Securities and Exchange Commission,” and contentions “that the prosecutors 

lacked authority.” Other claims were rejected as procedurally defaulted on direct appeal, 

or not considered because raised for the first time on appeal. 

These issues will be addressed hereafter on a claim-by-claim basis. 

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D. PROCEDURAL DEFAULT

Respondent argues that original Grounds 11 (ineffective assistance re duplicitous 

indictment) and 12 (ineffective assistance re Daubert) were procedurally defaulted by 

failure to raise them at trial and on direct appeal. (Response, Doc. 27 at 27-28.) These 

original Grounds have been included in the Amended Motion at Grounds 1J (duplicitous 

indictment) and 1K (Daubert). 

The general rule is “that claims not raised on direct appeal may not be raised on 

collateral review unless the petitioner shows cause and prejudice.” Massaro v. U.S., 538 

U.S. 500, 504 (2003). But, claims of ineffective assistance of counsel need not be 

exhausted on direct appeal, but are properly brought in the first instance in a Motion 

pursuant to 28 U.S.C. sec. 2255. "We do hold that failure to raise an ineffective-assistanceof-counsel claim on direct appeal does not bar the claim from being brought in a later, 

appropriate proceeding under § 2255." Massaro v. United States, 538 U.S. 500, 509 

(2003). While the substantive claims may have been waived or procedurally defaulted, it 

is the very failure to raise the claims that is the substance of the ineffective assistance 

claim. 

Here, the undersigned construes the claims raised in Ground 1J and 1K as claims 

of ineffective assistance of counsel. Claims of ineffective assistance are not waived by 

counsel’s failure to raise them at trial or on direct appeal. 

E. GROUND 1A – IAC RE APPEAL

In Ground 1A, Movant argues that “Counsel failed to raise meritorious issues on 

Appeal.” (Amend Mot., Doc. 24 at 5.) In his Memorandum in Support, he argues that 

appellate counsel was ineffective for failing to assert his claims of ineffective assistance 

of trial counsel, and substantive claims regarding: “(1) Brady violations; (2) Daubert 

violations; (3) Knowing use of false evidence; (4) jurisdictional defects.” (Memo, Doc. 

25 at 52.)

Movant did not assert a claim of ineffective assistance of appellate counsel in his 

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original Motion. 

In his original Motion (Doc. 1) his Grounds were simply cast as “Ineffective 

Assistance of Counsel,” without reference to which proceeding (trial or appeal) with the 

underlying substantive claim identified. In his Memorandum in Support, however, he 

plainly referenced the conduct of trial counsel.

“Petitioner...hereby moves...on the grounds of ineffective assistance of trial 

counsel.” (Orig. Memo, Doc. 3 at 1.) “Petitioner submits that the conduct of his trial 

counsel was so deficient as to constitute ‘ineffective assistance’.” (Id.)

Movant now argues that his assertions of ineffective assistance of appellate counsel 

relate back to his claims of ineffective assistance of trial counsel. 

An amended petition “does not relate back (and thereby escape AEDPA's one-year 

time limit) when it asserts a new ground for relief supported by facts that differ in both 

time and type from those the original pleading set forth.” Mayle, 545 U.S. at 650. The 

original and amended claims must, instead, be “tied to a common core of operative facts.” 

Id. at 664. 

Here, the claims of ineffective assistance of trial and appellate counsel do share 

various operative facts, namely the substance of the underlying alleged defect. However, 

the former relates to the conduct of trial counsel at trial in investigating and defending at

trial. The latter relates to the conduct of appellate counsel, after trial, in investigating and 

asserting appellate claims. These core operative facts are separated by time (trial v. 

appeal) and type (defense of trial v. prosecution of appeal). 

Accordingly, Ground 1A does not relate back to the original Motion, is untimely, 

and must be dismissed with prejudice.

Thus, the balance of Movant’s claims of ineffective assistance claims are addressed 

only with respect to the effectiveness of trial counsel. 

F. GROUND 1B – IAC RE TESTIFYING

In Ground 1B, Movant asserts ineffective assistance because “Petitioner was 

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improperly precluded from testifying at trial.” (Amend. Mot., Doc. 24 at 5.) In his 

Memorandum in Support, he clarifies that his claim is really that that trial counsel was 

ineffective by advising him to not testify at trial. (Amend. Memo, Doc. 25 at 60, et seq.) 

1. Timely

Movant asserted this claim in his original Ground 1. (See Orig. Memo, Doc. 3 at 

35, et seq.) Accordingly, it relates back to the original Motion and is timely. 

2. No Merit 

Respondents argue that this claim is without merit because advice on whether to 

testify is a “paradigm of the type of tactical decision that cannot be challenged as evidence 

of ineffective assistance.” (Response, Doc. 27 at 29 (quoting Carter v. Lee, 283 F.3d 240, 

249 (4th Cir. 2002) (citation omitted)). Respondent further argues that Movant cannot 

show prejudice from his “belated and self-serving justifications,” particularly in light of 

the substantial evidence supporting the conviction. (Id. at 30-31.) 

Movant does not reply. 

Generally, claims of ineffective assistance of counsel are analyzed pursuant to 

Strickland v. Washington, 466 U.S. 668 (1984). In order to prevail on such a claim, 

Petitioner must show: (1) deficient performance - counsel’s representation fell below the 

objective standard for reasonableness; and (2) prejudice - there is a reasonable probability 

that, but for counsel’s unprofessional errors, the result of the proceeding would have been 

different. Id. at 687-88. Although the petitioner must prove both elements, a court may 

reject his claim upon finding either that counsel's performance was reasonable or that the 

claimed error was not prejudicial. Id. at 697.

Deficient performance is one in which counsel’s errors were so great he or she was 

not functioning as the counsel guaranteed by the Sixth Amendment. Iaea v. Sunn, 800 

F.2d 861, 864 (9th Cir. 1986). An objective standard applies to proving such 

ineffectiveness, and requires a petitioner to demonstrate that counsel’s actions were 

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“outside the wide range of professionally competent assistance, and that the deficient 

performance prejudiced the defense.” United States v. Houtcens, 926 F.2d 824, 828 (9th 

Cir. 1991)(quoting Strickland, 466 U.S. at 687-90). The reasonableness of counsel’s 

actions is judged from counsel’s perspective at the time of the alleged error in light of all 

the circumstances. Kimmelman v. Morrison, 477 U.S. 365, 381 (1986); Strickland, 466 

U.S. at 689. Tactical decisions with which a defendant disagrees cannot form the basis for 

a claim of ineffective assistance of counsel. Morris v. California, 966 F.2d 448, 456 (9th

Cir. 1996). "Mere criticism of a tactic or strategy is not in itself sufficient to support a 

charge of inadequate representation." Gustave v. United States, 627 F.2d 901, 904 (9th 

Cir. 1980). Finally, the court need not determine the actual reason for an attorney's actions, 

as long as the act falls within the range of reasonable representation. Morris, 966 F.2d 

at 456-457. 

The undersigned agrees that advice to Movant to not testify was a reasonable 

tactical decision. The testimony Movant asserts he would have presented largely consists 

of self-serving denials of other testimony, hearsay about representations made to investors 

(Amend. Memo, Doc. 25 at 62), denials of ownership or control (while serving as chief 

financial officer) (id. at 63), assertions that verbal statements did not overcome the written 

agreements (id.), that representations of a reserve fund were met by Mathon’s willingness 

to liquidate common assets to repay lenders (id. at 66), etc. Much of it consists of the 

kind of mincing and fine slicing of words that, whatever their substantive content, could 

reasonably be feared by counsel as more likely to reinforce the prosecution’s theory of the 

case that Movant was willing to mislead and lie for his own benefit. 

Moreover, trial counsel must weigh not only the value (or lack thereof) of what his 

client wants to testify about, but the risks associated with subjecting his client to crossexamination. The defense Movant wanted to paint was not a clear cut “I wasn’t there” 

kind of defense. Instead, Movant would have had to admit much of the conduct on which 

the prosecution’s case was built (or risk perjury charges for failing to do so). Counsel 

could have reasonably concluded Movant was better served to leave the prosecution 

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having to construct their case without such direct evidence.

Accordingly, Movant fails to show deficient performance.

Ground 1B is without merit and should be denied.

G. GROUND 1C – IAC RE EXPERT WITNESSES

In Ground 1C, Movant argues that counsel was ineffective for failing to engage a 

forensic accounting expert to counter the prosecution’s expert, Mr. Saitta, who testified 

the funds were operated as a Ponzi scheme. (Amend. Memo, Doc. 25 at 77.) 

1. Timely

This claim was raised in original Ground 1(a) (see Original Memo, Doc. 3 at 57), 

relates back to the original Motion, and is timely. 

2. No Merit

Respondent argues this claim is without merit because Mr. Saitta did not testify as 

an expert witness, but only to introduces Rule 1006 summary exhibits. Respondent also 

argues Movant cannot establish prejudice. (Response, Doc. 27 at 31-32.) 

Movant does not reply.

The undersigned agrees that Movant’s factual basis for his claim is erroneous. 

Saitta did not testify as an expert, but merely to testify as to the creation of the 

prosecution’s summary exhibits summarizing various transactions. For example, he 

proffered no opinions about the criminal nature of the operation or that it was a Ponzi 

scheme. (RT 6/25/13, CRDoc. at 1908-29; RT 6/26/13, CRDoc. 1418 at 1938-2007.)

Moreover, “evidence about the testimony of a putative witness must generally be 

presented in the form of actual testimony by the witness or on affidavit. A defendant cannot 

simply state that the testimony would have been favorable; self-serving speculation will 

not sustain an ineffective assistance claim.” U.S. v. Ashimi, 932 F.2d 643, 650 (7th Cir. 

1991). Here, Movant simply speculates that an unidentified expert witness existed who 

would have testified in his favor. That does not suffice to show ineffective assistance.

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This claim is without merit and must be denied. 

H. GROUND 1D – IAC RE POST-TRIAL MOTIONS

In Ground 1D, Movant argues ineffective assistance because “Counsel failed to file 

Rule 39 and/or Rule 33 motion.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in 

Support, he clarifies that “based on a lack of sufficient evidence,” which he relates to “lack 

of evidence of criminal intent,” counsel should have filed a motion “under Rule 29 or 33”. 

(Amend. Memo., Doc. 25 at 77-89.)

1. Timely

This claim was raised in original Ground 1(b) (see Original Memo, Doc. 3 at 57-

58), relates back to the original Motion, and is timely. 

2. No Merit

Respondent argues that any such motions would have been futile, given the 

standard applicable on such motions and the testimony of four insiders that they had 

personally witnessed or participated in fraud and the Ponzi schemes. (Response, Doc. 27 

at 32-33.) 

Movant does not reply.

It is clear that the failure to take futile action can never be deficient performance. 

See Rupe v. Wood, 93 F.3d 1434, 1445 (9th Cir.1996). “The failure to raise a meritless 

legal argument does not constitute ineffective assistance of counsel.” Baumann v. United 

States, 692 F.2d 565, 572 (9th Cir. 1982). Moreover, “[t]he law does not require counsel 

to raise every available nonfrivolous defense. Counsel also is not required to have a tactical 

reason—above and beyond a reasonable appraisal of a claim's dismal prospects for 

success—for recommending that a weak claim be dropped altogether.” Knowles v. 

Mirzayance, 556 U.S. 111, 127 (2009) (citations omitted) (rejecting contention that 

counsel was deficient for failing to pursue questionable tactic because there was “nothing 

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to lose”). 

Rule 29 authorizes a motion for a judgment of acquittal, after the close of the 

government’s evidence, or the close of all evidence, for “any offense for which the 

evidence is insufficient to sustain a conviction.” Fed. R. Crim. Proc. 29(a). In ruling on 

a Rule 29 motion, the court views the evidence in the light most favorable to the 

government and determines whether any rational trier of fact could have found the 

essential elements of the crime beyond a reasonable doubt. United States v. Christensen,

828 F.3d 763, 780 (9th Cir. 2015). 

Rule 33 authorizes a post-judgment motion for new trial on various bases, including 

insufficiency of the evidence. In this context, however, the standard is higher, and relief 

“should be granted ‘only in exceptional cases in which the evidence preponderates heavily 

against the verdict.’” United States v. Pimentel, 654 F.2d 538, 545 (9th Cir. 1981) (quoting 

2 Wright, Federal Practice and Procedure, Criminal s 553 at 487 (1969)). “A district court 

may grant a Rule 33 motion only in “extraordinary circumstances,” and only if there exists 

“ ‘a real concern that an innocent person may have been convicted.’ ” United States v. 

Romano, 859 F. Supp. 2d 445, 456 (E.D.N.Y. 2012) (citations omitted). 

Movant asserts there was a lack of evidence of criminal intent. But criminal intent 

need not be shown by direct evidence. See e.g. United States v. Rogers, 321 F.3d 1226, 

1230 (9th Cir. 2003) (“It is settled law that intent to defraud may be established by 

circumstantial evidence.”). Here, viewed in a light favorable to the prosecution, there is 

ample evidence from which a juror could infer the requisite criminal intent, including 

evidence of Movant’s involvement at a high level and with the unique knowledge from 

that position on the business’s structure and operations, as well as the explicit warnings 

from the auditors and corporate counsel that the company appeared to be operating like a 

Ponzi scheme. 

Accordingly, counsel could have reasonable concluded that a Rule 29 or Rule 33 

motion would have been futile, and thus properly made the tactical decision not to pursue 

such motions. 

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Round 1D is without merit and should be denied.

I. GROUND 1E – IAC RE CLOSING ARGUMENTS

In Ground 1E, Movant argues ineffective assistance because “Government’s 

improper Closing Argument/Prosecutorial Misconduct.” (Amend. Mot. Doc. 24 at 5.) In 

his Memorandum in Support, he clarifies that he contends the prosecution violated his 

Fifth Amendment privilege by arguing missing evidence from the defense’s case, which 

he casts as attempts to call attention to his failure to testify. (Amend. Memo., Doc. 25 at 

79-80.)

1. Timely 

This claim was raised in original Ground 1(c) (see Original Memo, Doc. 3 at 59-

60), relates back to the original Motion, and is timely.

2. No Merit

Respondent argues there was no meritorious objection for trial counsel to raise, 

because the comments were on the failure of the defense counsel to address issues, not 

Movant’s failure to testify. Respondent further argues a lack of prejudice based on the 

overwhelming evidence and the limited effect of such comments in the hour-long closing 

argument. (Response, Doc. 27 at 33-34.) 

Movant does not reply.

Movant references the following portions of the prosecution’s rebuttal closing 

argument:

Now, folks, you just heard for about three hours from the 

defense and they talked about a great many things. And before I start 

addressing those one by one, I want to talk-about a whole bunch of 

things they didn't talk about in the course of telling you why their 

clients didn't have criminal intent. Do you remember Kurt Taylor 

getting paid $500,000 with his [sic] own money by Guy Williams? 

Do you remember hearing anything about that for the last three 

hours? Do you remember $55 million came in during the new fund 

and they only made $5 million of loans when they were talking about 

what a great company this is? Did you hear one bit of discussion 

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about that defense of that? (Trial Transcript p. 2449, emphasis 

added.) 

Do you remember --- one of the emails we showed, Jed 

Bindrup comes in, puts $50,000 in, two minutes, Brent and Guy talk 

about· - . - how they need to transfer that over to pay off Bruce 

McMullen who is in the lobby. That's criminal intent. You didn't hear 

about that because it's indefensible. And they tried to talke [sic] about 

other things. And they also talekd [sic] about the email to Mr. Bodell 

with the two lies in it. It's the 700,000 came in and your money will 

be going out to Leisure. Mr. Jones didn't even mention it. An hour. 

That's just a bold-faced lie at the heart of this whole case, couldn't 

even come up with a way to justify that. (Id., p. 2449-50.) 

Also, separate from Mr. Saitta's analysis, the defense attorneys 

didn't mention the fact --- they said, well, you only looked at a short 

amount of dates. (Id., p. 2458.) 

Parsons 4E, the side deal, Mr. Jones didn't try to discuss it. 

(Id., p. 2463.) 

I think it's telling that neither one of the defense attorneys 

made any effort to actually defend this [Mill Creek] transaction on 

the merits. (Id., p. 2466.) 

You also heard some discussion about Aspen Grove in an 

amount to justify those transactions and, again, one of the things that 

was conspicuously absent during either of the defense closings, do 

you remember that last Aspen Grove transaction ... They didn't even 

- try to defend that. They didn't even talk about that. That is criminal 

intent. That is just stealing from investors. Speaks volumes that they 

couldn't even try to defend it. (Id., p. 2467.)

(Amend. Memo, Doc. 25 at 79-80.) 

In all those references, the prosecution was explicitly referencing issues in defense 

counsel’s closings (“they,” “defense of that,” “indefensible,” “defense attorneys,” “Mr. 

Jones,” “defense attorneys,” defense closings,” and “defend it”). It was not a call to the 

jury to consider the silence of the defendants in the witness box, but the silence of their 

counsel in challenging key issues in the prosecution’s case. 

The Fifth Amendment does not create a privilege against countering the 

prosecution’s evidence. It is a privilege against being compelled to testify. “No person 

...shall be compelled in any criminal case to be a witness against himself.” U.S. Const. 

Amend. V. “[T]he privilege ‘protects an accused only from being compelled to testify 

against himself, or otherwise provide the State with evidence of a testimonial or 

communicative nature.’” Pennsylvania v. Muniz, 496 U.S. 582, 589 (1990) (quoting 

Schmerber v. California, 384 U.S. 757, 761–762, n. 6 (1966)). 

This claim is without merit and should be denied. 

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J. GROUND 1F – IAC RE UNAUTHORIZED PROSECUTOR

In Ground 1F, Movant argues ineffective assistance because “Unauthorized 

Conduct/ Prosecutorial Misconduct.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum 

in Support, he clarifies that he believes the special prosecutor had not been properly 

authorized to serve as a U.S. Attorney (or officer of the Department of Justice), citing 28 

U.S.C. §§ 516 and 547. (Amend. Memo., Doc. 25 at 81.)

1. Timely

This claim was raised in original Ground 4 (see Original Memo, Doc. 3 at 71-72), 

relates back to the original Motion, and is timely. 

2. Law of the Case

Respondent argues this claim was decided by the Ninth Circuit on appeal from

Movant’s motion for new trial. 

Movant raised the underlying substantive claim in his Motion for New Trial. 

(CRDoc. 1620 at 30-31.) The district court ruled:

Second, Defendants take issue with Wendy Coy’s designation as a 

special assistant U.S. Attorney in this case. Defendants do not explain 

how Coy’s involvement would entitle them to a new trial, especially 

given the evidence that Coy did not actively participate at the trial. 

The Government has satisfied this Court that Coy was properly 

designated to assist (Doc. 1619). Defendants’ request for a new trial 

on this basis has no merit. 

(Order 8/9/16, Doc. 1623 at 4-5.) In turn, the Ninth Circuit rejected the claim:

Nor did the district court err by rejecting appellant’s remaining 

contentions that the prosecutors lacked authority. The United States 

Attorneys’ Manual, on which appellant’s rely, “is not intended to, 

does not, and may not be relied upon to create any rights, substantive 

or procedural, enforceable at law by any part in any matter civil or 

criminal.” United States v. Lorenzo, 995 F.2d 1448, 1453 (9th Cir. 

1993) (internal quotations omitted). And in any event, appellants 

have not shown that the prosecution of their criminal charges was 

contrary to any protocols.

(Mem. Dec. 1/19/18, CRDoc. 1642 at 2.) 

Here, however, Movant does not present the substantive claim, but the related claim 

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of ineffective assistance. Accordingly, the Ninth Circuit has not already decided the claim

now presented. 

Nonetheless, that court’s decision on the merits of the substantive claim is the law 

of the case, Caterino, 29 F.3d at 1395, and establishes that, had trial counsel raised the 

substantive claim, it would have been without merit. 

3. No Merit 

Because the law of the case establishes the underlying substantive claim is without 

merit, it follows that it would have been futile for counsel to have raised objections on this 

basis at trial. “The failure to raise a meritless legal argument does not constitute ineffective 

assistance of counsel.” Baumann, 692 F.2d at 572. This claim is without merit and must 

be denied.

K. GROUND 1G – IAC RE MONEY LAUNDERING CHARGE

In Ground 1G, Movant argues ineffective assistance because “Unauthorized Money 

Laundering Charge / Prosecutorial Misconduct.” (Amend. Mot. Doc. 24 at 5.) In his 

Memorandum in Support, he clarifies that his underlying substantive claim is that the 

United States Attorneys were required under various guidelines and manuals to obtain 

approval from the Department of Justice before filing a money laundering charge, and that 

such approval was not obtained. He asserts this deprived the court of jurisdiction over the 

money laundering charge. (Amend. Memo., Doc. 25 at 82-83.)

1. Timely

This claim was raised in original Ground 5 (see Original Memo, Doc. 3 at 72-74),

relates back to the original Motion, and is timely. 

2. Law of the Case

Movant raised the underlying substantive claim in his Motion for New Trial. 

(CRDoc. 1620 at 31-33.) The district court did not explicitly address this claim in denying 

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the motion for new trial. (See generally Order 8/9/16, CRDoc. 1623.) Movant again urged 

the claim in his appeal. (Ninth Circuit Case 16-10375, Opening Brief, Doc. 28 at 38-39.) 

As with Ground 1F, the Ninth Circuit rejected the claim on the basis of that the regulations 

did not create third party rights, and no protocols had been violated. (Mem. Dec. 1/19/18, 

CRDoc. 1642 at 2.) 

As with Ground 1F, that decision is the law of the case. Caterino, 29 F.3d at 1395.

3. No Merit 

Because the law of the case establishes the underlying substantive claim is without 

merit, it would have been futile for counsel to raise the issue, and thus counsel was not 

ineffective in failing to do so. Baumann, 692 F.2d at 572. This claim is without merit and 

must be denied.

L. GROUND 1H – IAC RE SELECTIVE PROSECUTION

In Ground 1H, Movant argues ineffective assistance because “Selective 

Prosecution / Usurpation of Power.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in

Support, he clarifies that this claim is based on the contention that the Securities and 

Exchange Commission possessed the sole authority to authorize the prosecution of 

securities offenses, and thus the prosecutor lacked authority to even bring the related mail 

fraud charge. (Amend. Memo., Doc. 25 at 84-89.)

1. Timely

This claim was raised in original Ground 6 (see Original Memo, Doc. 3 at 57), 

relates back to the original Motion, and is timely. 

2. Law of the Case

Movant raised the substance of this claim in his Motion for New Trial. (CRDoc. 

1620 at 31-33.) The district court rejected it, holding that “neither the SEC ‘nor its staff 

has the authority or responsibility for instituting, conducting, settling, or otherwise 

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disposing of criminal proceedings. That authority and responsibility are vested in the 

Attorney General and representatives of the Department of Justice.’” (Order 8/9/16, 

CRDoc. 1623 at 3-4 (quoting 17 C.F.R. § 202.5(f)).) Movant again urged the claim in his 

appeal. (Ninth Circuit Case 16-10375, Opening Brief, Doc. 28 at 18, et seq.) The Ninth 

Circuit rejected it, concluding:

Appellants raise several claims premised on the assumption that the 

Department of Justice lacked authority to bring charges against them 

absent a pre-indictment enforcement action by the Securities and 

Exchange Commission (“SEC”). Contrary to appellant’s 

contentions, neither the SEC “nor its staff has the authority or 

responsibility for instituting, conducting, settling, or otherwise 

disposing of criminal proceedings. That authority and responsibility 

are vested in the Attorney General and representatives of the 

Department of Justice.” 17 C.F.R. § 202.5(f). Therefore the district 

court did not abuse its discretion by rejecting appellant’s subject

matter jurisdiction, Brady, and prosecutorial authority claims. See 

United States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir. 2009) (en 

banc). 

(Mem. Dec. 1/19/18, CRDoc. 1642 at 2.) 

As with Ground 1F, that decision is the law of the case. Caterino, 29 F.3d at 1395.

3. No Merit 

Because the law of the case establishes the underlying substantive claim is without 

merit, it would have been futile for counsel to raise the issue, and thus counsel was not 

ineffective in failing to do so. Baumann, 692 F.2d at 572. This claim is without merit and 

must be denied.

M. GROUND 1I – IAC RE MAIL FRAUD CHARGE

In Ground 1I, Movant argues ineffective assistance because “Invalid Mail Fraud 

Offense.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in Support, he clarifies that 

the writings on which the mail fraud counts were based were mailings mandated by the 

federal securities laws, and thus could not form the basis of such an offense, and otherwise 

did not establish mail fraud. (Amend. Memo., Doc. 25 at 89-92.)

/ /

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1. Timely

This claim was raised in original Ground 7 (see Original Memo, Doc. 3 at 79-82), 

relates back to the original Motion, and is timely. 

2. No Controlling Law of the Case

Movant raised the underlying substantive claim in his Motion for New Trial. 

(CRDoc. 1620 at 11, 38-40.) The district court did not explicitly address this claim in 

denying the motion for new trial. (See generally Order 8/9/16, CRDoc. 1623.) Movant 

again urged the claim in his appeal as part of his general claim that mail fraud had not been

proven. (Ninth Circuit Case 16-10375, Opening Brief, Doc. 28 at 51.) The Ninth Circuit 

rejected the substantive claim as procedurally defaulted on direct appeal:

We do not consider appellants’ remaining arguments, which they 

failed to raise in their direct appeals and were not a basis for their 

motions for new trials.

(Mem. Dec. 1/19/18, CRDoc. 1642 at 3.) 

If Movant were now asserting the substantive claim, that procedural decision would 

require its dismissal as previously decided. But Movant does not assert the substantive 

claim, but rather the related ineffectiveness claim. Accordingly, there is no law of the case 

precluding the present claim, nor is there any law of the case deciding whether the 

substantive claim would have been meritorious had counsel raised it. 

3. Factual Background

Ground 1I challenges counsel’s effectiveness with regard to Counts 2, 3, 4 and 5, 

for violations of 18 U.S.C. § 1341 (mail fraud). Three of those (Counts 2, 3, and 5) arose 

from account statements mailed to three distinct investors, and one (Count 4) from false 

investment documents (i.e. Private Placement Memorandum, Subscription Agreement, 

and Operating Agreement) to another investor.

Evidence at trial established that Movant had been alerted by Mathon’s controller 

and in-house counsel that due to defaults in the loan portfolio, the valuations reflected on 

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the statements were misleading, and Movant had information from others that the value of 

particular investment loans were compromised, i.e. because certain borrowers had no 

assets, or the supposedly collateralized loans were in fact unsecured. Nonetheless, Movant 

insisted the statements be sent as prepared. 

4. No Merit

In its Supplemental Response, Respondent argues: (1) the mailings qualified as 

mail fraud; and (2) the authorities relied on by Movant for the contention that the statutory 

requirement for the mailings precluded criminal liability (Parr and Lake) do not apply. 

(Doc. 38 at 2-5.) 

In reply, Petitioner argues there was no Ponzi scheme, no material lies, the SEC 

made such determinations, and others prepared the documents. (Supp. Reply, Doc. 41 at 

5-9.) 

No Prejudice on Dismissed Counts - Movant was not convicted on Counts 2, 3, 

or 4. Thus Movant cannot show prejudice with regard to these counts. Moreover, Movant 

proffers no basis to conclude that a dismissal on these counts would have resulted in a 

different outcome on Count 5. For this reason, Movant fails to show prejudice as to Counts 

2, 3, and 4, and that portion of Ground 1I is without merit on this basis alone.

No Deficient Performance - Section 1341 generally prohibits the use of the mail 

as part of a fraudulent scheme.

There is no requirement that the mailings triggering the mail fraud statute

themselves contain any misrepresentation. It does not matter if “the things they caused to 

be mailed were ‘innocent in themselves,’ if their mailing was ‘a step in a plot.’” Parr v. 

United States, 363 U.S. 370, 390 (1960) (quoting Badders v. United States, 240 U.S. 391, 

394 (1916)). “In Parr the Court specifically acknowledged that ‘innocent’ mailings—

ones that contain no false information—may supply the mailing element.” Schmuck v. 

United States, 489 U.S. 705, 715 (1989). However, the statute does require that the 

mailing be “for the purpose of executing such scheme or artifice or attempting so to do.” 

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18 U.S.C. § 1341. 

The Supreme Court has addressed several scenarios where they concluded that the 

mailings were not for the purpose of executing the fraud. For example, in Kann v. United 

States, 323 U.S. 88 (1944), the defendants were corporate officers of the victim, who had 

set up a dummy entity to divert profits from the victim. They drew checks on the 

corporation, which they cashed at a local bank. The local banks mailed the cashed checks 

to the drawee banks to obtain the funds. The Court found the “purpose” requirement of § 

1341 not satisfied because, as far as the defendants were concerned, the scheme was 

complete when the checks were cashed and it was “immaterial to them, or to any 

consummation of the scheme, how the bank which paid or credited the check would collect 

from the drawee bank.” Kann, 323 U.S. at 94.

Similarly, in Parr (on which Movant principally applies), two of the defendants 

were charged with fraudulent use of a school district’s credit cards, using them for personal 

expenses or purchases. The mail fraud was founded on the credit card company’s mailed 

invoice to the District for payment on the cards and the District’s mailed payment. Relying 

on Kann, the Court found these did not qualify as use of the mail for purpose of executing 

the fraud, because collection by the credit card company was not part of the scheme, the 

scheme having reached fruition when the credit card purchases were completed. 

However, Parr also addressed charges that defendants who were officers of the 

District and two banks (controlled by some of the officers) engaged in a broader scheme 

of misappropriating the District’s funds. The mail fraud charges were based in part on 

mailings to collect the taxes levied by the District and receipt of tax payments by mail. 

The defendants argued that the levying and collection of the tax payments were part of the 

regular, mandatory business of the District and not a part of the scheme. The Court first 

noted that it was neither charged nor did evidence show that the taxes assessed were 

“excessive, ‘padded’ or in any way illegal,” Parr, 363 U.S. at 388, and that indeed the 

Government had even argued that the District had been damaged by loss of needed funds 

and being left in debt. The Court reiterated that “only if the mailings were a ‘part of the 

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execution of the fraud,’ or...were ‘incident to an essential part of the scheme,’ do they fall 

within the ban of the federal mail fraud statute.” Id. at 390. The Court concluded 

...it cannot be said that mailings made or caused to be made under 

the imperative command of duty imposed by state law are criminal 

under the federal mail fraud statute, even though some of those who 

are so required to do the mailing for the District plan to steal, when 

or after received, some indefinite part of its moneys.

Id. at 391. 

Movant relies on this language of Parr to contend that the various mailings in this 

case could not be mail fraud because they were statements, etc. mandated by law. But 

Movant overlooks the preceding portion of Parr that based its conclusion on the absence 

of any impropriety in the District’s assessments. 

We agree that the factual situation is unique, and, of course, 

agree, too, that the fact there is no reported decision involving similar 

factual circumstances or legal theories is not determinative. But in the 

light of the particular circumstances of this case, and especially of the 

facts (1) that the School Board was legally required to assess and 

collect taxes, (2) that the indictment did not charge nor the proofs 

show that the taxes assessed and collected were in excess of the 

District's needs or that they were ‘padded’ or in any way unlawful, 

(3) that no such issue was submitted to, nor, hence, determined by, 

the jury, (4) that the Board was compelled to collect and receipt for 

the taxes by state law, which, in the circumstances here, compelled it 

to use and cause (here, principally by permitting) the use of the mails 

for those purposes, we must conclude that the legally compelled 

mailings, complained of in the first 16 counts of the indictment, were 

not shown to have been unlawful ‘step(s) in a plot,’ ‘part(s) of the 

execution of the fraud,’ ‘incident to an essential part of the scheme,’ 

or to have been made ‘for the purpose of executing such scheme,’ 

within the meaning of § 1341...

Parr, 363 U.S. at 391. 

Here, in contrast, Respondent argues that the evidence showed that the monthly 

investor account statements underlying Counts 2, 3 and 5 included misrepresentations of 

the value of the account and Movant not only knew of the misrepresentations but refused 

to correct them, and that the investors relied on these statements to continue investing in 

Mathon. Similarly, the investment documents underlying Count 4 contained falsehoods 

and were used to obtain investments in Mathon. (Supp. Resp., Doc. 38 at 3-4.) 

Thus, although arguably legally required, the mailings in this case were not 

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innocent mailings unrelated to the scheme, but a key component of the scheme and 

intended to obtain investors’ funds. 

Prior Investigations Not a Defense – Aside from inviting a new trial on whether 

there were misrepresentations, a Ponzi scheme, or improprieties in state court proceedings, 

Movant does not challenge Respondents assertions about the evidence.

Instead, he falls back on the old theme that the regulatory investigations provided

a safe haven. He contends the SEC’s investigation constituted binding findings on whether 

the mailings were fraudulent, and adds reliance on an investigation by the Arizona 

Corporation Commission. (Supp. Reply, Doc. 41 at 5-6.)6 And, he seeks an evidentiary 

hearing to show that these regulatory bodies approved the same documents that underlay 

the mail fraud counts.

Movant cites no authority for the proposition that such investigative findings are 

binding in a prosecution. Instead, Movant baldly asserts that the government “must speak 

with one voice.” There is no support in the law for such a contention.7 

There is a defense of “entrapment by estoppel,” where a defendant reasonably relies 

on a government official’s advice. But that requires the defendant to “show that (1) an 

authorized government official, empowered to render the claimed erroneous advice, (2) 

who has been made aware of all the relevant historical facts, (3) affirmatively told him the 

proscribed conduct was permissible, (4) that he relied on the false information, and (5) that 

his reliance was reasonable.” United States v. Batterjee, 361 F.3d 1210, 1216 (9th Cir. 

2004) (citations and quotations omitted). That principle does not apply where a regulatory 

agency simply fails to discern fraudulent information, of which the defendant has 

knowledge, and the only reliance by the defendant is momentarily remaining free of 

6 The Ninth Circuit rejected the jurisdictional portion of this deflection on direct appeal, 

at least with regard to the SEC. (CRDoc 1642, Mem. Dec. at 2.) 

7 There is a line of cases relating to the Federal Government's exclusive authority to “speak 

with one voice” when regulating commercial relations with foreign governments. See e.g. 

Barclays Bank PLC v. Franchise Tax Bd. of California, 512 U.S. 298, 311 (1994). But 

these have no application to Movant’s criminal case. 

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prosecution. 

Accordingly, the underlying claim was futile, and counsel was not ineffective for 

failing to raise it. Therefore, Ground 1I is without merit and must be denied.

N. GROUND 1J – IAC RE DUPLICITOUS INDICTMENT

In Ground 1J, Movant argues ineffective assistance because “Duplicitous 

Indictment / Unanimity of Verdict.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in 

Support, he clarifies that his substantive contention is that the indictment joined the two 

offenses in the federal Mail Fraud statute (scheme to defraud and scheme to obtain), and 

this was not cured by a jury instruction requiring a unanimous verdict on which offense 

was proven. (Amend. Memo., Doc. 25 at 93-95.)

1. Timely

This claim was raised in original Ground 11 (see Original Memo, Doc. 3 at 102-

104), relates back to the original Motion, and is timely. 

2. No Controlling Law of the Case

Movant did not raise this claim or the underlying substantive claim in his Motion 

for New Trial, only noting “Defendants have not raised cumulative issues such as the 

Duplicitous Counts in the indictment.” (CRDoc. 1620 at 40.) The district court did not 

address this claim in denying the motion for new trial. (See generally Order 8/9/16, 

CRDoc. 1623.) 

Movant did urge the underlying substantive claim in his appeal on the motion for 

new trial. (Ninth Circuit Case 16-10375, Opening Brief, Doc. 28 at 53.) The Ninth Circuit 

rejected the substantive claim as procedurally defaulted on direct appeal:

We do not consider appellants’ remaining arguments, which they 

failed to raise in their direct appeals and were not a basis for their 

motions for new trials.

(Mem. Dec. 1/19/18, CRDoc. 1642 at 3.) 

As with Ground 1I, this procedural rejection of the substantive claim does not 

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dispose of the related ineffective assistance claim.

3. No Merit

Respondent argues that this claim is without merit because the mail fraud charges 

were not duplicitous, but merely listed the various means of satisfying a single element, 

and properly substituted “and” for “or” when quoting the language from the statute. (Supp. 

Resp., Doc. 38 at 5-6.) 

Movant replies that inclusion of both prongs of the statute in one charge made the 

indictment duplicitous. (Supp. Reply, Doc. 41 at 9-10.) 

In addition to use of the mails in so doing, the mail fraud statute requires a defendant 

“devise or intend to devise” one of three types of “schemes or artifices,” either one to 

defraud, or one to obtain “money or property,” or one involving counterfeiting. The 

obtaining money or property version requires “false or fraudulent pretenses, 

representations, or promises.”8 18 U.S.C. § 1341. 

The indictment framed the mail fraud counts omitting the counterfeiting alternative, 

and generally substituting “or” with “and”:

...did knowingly and willfully devise and intend to devise a scheme 

and artifice to defraud and to obtain money and property by means 

of materially false and fraudulent promises, pretenses and

representations..

(CRDoc. 3 at 25, ¶ 21.) 

“An indictment is duplicitous where a single count joins two or more distinct and 

separate offenses.” U.S. v. Garcia, 400 F.3d 816, 819 (9th Cir. 2005). However, an 

indictment is not duplicitous merely because a count identifies several ways in which the 

one offense may be committed. Indeed, Federal Rule of Criminal Procedure 7(c) 

specifically provides that “[i]t may be alleged in a single count that ... the defendant 

committed [the offense] by one or more specified means.” The Supreme Court has noted 

8 A separate statute, not applicable here, clarifies that § 1341 extends to deprivations of 

“the intangible right of honest services.” 18 U.S.C. § 1346. But see Skilling v. United

States, 561 U.S. 358, 404 (2010) (adopting limited construction to avoid unconstitutional 

vagueness.) 

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that “[a] single offense should normally be charged in one count rather than several, even 

if different means of committing the offense are alleged.” Sanabria v. U. S., 437 U.S. 54, 

66 n. 20 (1978). 

Section 1341 does not specify separate offenses, but alternative routes to a mail 

fraud conviction. See Cleveland v. United States, 531 U.S. 12, 26 (2000) (not separate 

offenses). Thus, including the various means of violating § 1341 in a single count was not 

improper. 

Moreover, substituting “or” with “and” was appropriate. “When a crime is 

denounced disjunctively in the statute, it may be pled conjunctively in the indictment.” 

United States v. Urrutia, 897 F.2d 430, 432 (9th Cir. 1990). “When a statute specifies 

two or more ways in which an offense may be committed, all may be alleged in the 

conjunctive in one count and proof of any of those acts conjunctively charged may 

establish guilt.” Id. This flows from three concepts. This first is that “[a]s long as the 

crime and the elements of the offense that sustain the conviction are fully and clearly set 

out in the indictment, the right to a grand jury is not normally violated by the fact that the 

indictment alleges more crimes or other means of committing the same crime.” United 

States v. Miller, 471 U.S. 130, 136 (1985).9 The second is that “an indictment need not 

specify which overt act, among several named, was the means by which a crime was 

committed.” Schad v. Arizona, 501 U.S. 624, 631 (1991). And the third is that “jurors [are 

not] required to agree upon a single means of commission, any more than the indictments 

were required to specify one alone.” Id.

9 Respondents appear to argue that conjunctive charging is mandatory. (Supp. Resp., Doc. 

38 at 6 (“where the statute says ‘or’ the indictment should be pleaded as ‘and’”) (emphasis 

added).) While a prosecutor may have tactical reasons for preferring conjunctive over 

disjunctive pleading, none of the cited authorities go beyond making conjunctive charging 

permissible. See United States v. Tykarsky, 446 F.3d 458, 474 (3rd Cir. 2006) (concluding 

that court could properly charge jury with disjunctive instructions when indictment used 

conjunctive); United States v. Brandon, 298 F.3d 307, 314 (4th Cir. 2002) (the indictment 

may allege the several ways in the conjunctive); United States v. Gunter, 546 F.2d 861, 

868-69 (10th Cir. 1976) (“crime denounced in the statute disjunctively may be alleged in 

an indictment in the conjunctive”). The Ninth Circuit applies a permissive standard. See 

e.g. Urrutia, 897 F.2d 430; and United States v. Renteria, 557 F.3d 1003, 1008 (9th Cir. 

2009) (quoting Urrutia). 

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Thus, alleging the multiple means of commission in the conjunctive did not render 

the indictment duplicitous. See United States v. Caldwell, 302 F.3d 399, 408 (5th Cir. 

2002) (indictment alleging, inter alia, defraud and obtain money, not duplicitous because

under mail fraud statute each mailing is a separate violation, not each scheme). 

Accordingly, a duplicity challenge to the indictment would have been futile, and 

counsel was not ineffective for failing to pursue it. Accordingly, Ground 1J is without 

merit and must be denied. 

O. GROUND 1K – IAC RE AGENCY JURISDICTION

In Ground 1K, Movant argues ineffective assistance because “Primary Jurisdiction 

/ Duty to Dismiss.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in Support, he 

clarifies that the underlying substantive claim is that only the SEC could have authorized 

the institution of the prosecution of the securities charges, or any related charges. (Amend. 

Memo., Doc. 25 at 96-99.) This claim is closely related to the claim raised in Ground 1H

(“Selective Prosecution / Usurpation of Power”), which focuses on the mail fraud charge. 

1. Timely

This claim was raised in original Ground 10 (see Original Memo, Doc. 3 at 98-

101), relates back to the original Motion, and is timely. 

2. No Merit

As with Grounds 1F, 1G, and 1H, the Ninth Circuit rejected Movant’s argument 

that only the SEC had power to authorize the prosecution. Consequently, under the law 

of the case, the substantive claim is without merit and futile, and counsel was not 

ineffective for failing to raise it. This claim must be denied. 

P. GROUND 1L – IAC RE DAUBERT VIOLATIONS

In Ground 1L, Movant argues ineffective assistance because “Daubert Violations / 

District Court’s Gatekeeper Duty.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in 

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Support, he clarifies that his underlying substantive claim is that the prosecution’s forensic 

accountant was not properly qualified as an expert. (Amend. Memo., Doc. 25 at 100-102.)

1. Timely

This claim was raised in original Ground 12 (see Original Memo, Doc. 3 at 105-

107), relates back to the original Motion, and is timely. 

2. Not Procedurally Defaulted

For the reasons discussed above in Section III(D) (Procedural Default), this claim 

of ineffective assistance is not procedurally defaulted, even if the underlying substantive 

claim was. 

3. No Controlling Law of the Case

Movant did not raise this claim or the underlying claim in his Motion for New Trial. 

(CRDoc. 1620.) The district court did not address them in denying the motion for new 

trial. (See generally Order 8/9/16, CRDoc. 1623.) 

Movant did urge the underlying substantive claim in his appeal on the motion for 

new trial. (Ninth Circuit Case 16-10375, Opening Brief, Doc. 28 at 55-57.) The Ninth 

Circuit rejected the substantive claim as procedurally defaulted on direct appeal:

We do not consider appellants’ remaining arguments, which they 

failed to raise in their direct appeals and were not a basis for their 

motions for new trials.

(Mem. Dec. 1/19/18, CRDoc. 1642 at 3.) 

As with Ground 1I, this procedural rejection of the substantive claim does not 

dispose of the related ineffective assistance claim.

4. No Merit

Respondent argues that Ground 1L is without merit because Daubert has no 

application because the prosecution’s accountant Mr. Saitta (although noticed as an expert) 

did not testify as an expert. (Supp. Resp., Doc. 38 at 6-7.)

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Movant replies that even if not testifying as an expert, the jury viewed the 

accountant as an expert. (Supp. Reply, Doc. 41 at 10-12.)10 

In general, testimony is only relevant and reliable to the extent that it is based on 

the witness’s personal observations of the pertinent events, rather than just their opinions. 

Limited exceptions are recognized both as to witnesses’ lay testimony, see Federal Rule 

of Evidence 701, and witnesses’ expert testimony. The former (lay testimony) must still 

be rationally based on the witness’s personal perception, i.e. their first-hand knowledge or 

observation. Fed.R.Evid. 701(a). The latter (expert testimony) need not be based on such 

first-hand observations, but can be based on “specialized knowledge.” Fed.R.Evid. 702(a). 

In Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 594 (1993), the Court 

addressed the appropriate standard to be applied in determining when a witness’s 

expertise, their “specialized knowledge,” qualifies them to testify about opinions drwn 

from such expertise rather than their first-hand knowledge of the facts of a case. In so 

doing, the Court recognized that trial judges remained obligated to act as a “gatekeeper” 

to ensure that expert opinion testimony is relevant (i.e. of assistance to the jury) and 

reliable (i.e. based on scientific knowledge, etc.).

But, as argued by Respondents, Daubert has no application where a witness testifies 

based only on their own, first-hand knowledge, even if they may be considered an 

“expert.” The Advisory Committee Notes observe:

The amendment does not distinguish between expert and lay 

witnesses, but rather between expert and lay testimony. Certainly it 

is possible for the same witness to provide both lay and expert 

10 Movant also raises new claims that counsel was ineffective for failing to challenge other 

unnamed witnesses as unqualified experts, e.g. witnesses on values, validity of audits, 

existence of a Ponzi scheme, etc. (Id. at 11.) These claims are conclusory and thus 

meritless. Stein v. U.S., 390 F.2d 625, 627 (9th Cir. 1968) (conclusory claims merittless); 

Grisby v. Blodgett, 130 F.3d 365, 373 (9th Cir. 1997) (speculation about uncalled 

witnesses insufficient). Moreover, they assert distinct instances of ineffective assistance 

of counsel. Claims of ineffective assistance are not fungible. See Pappageorge v. Sumner, 

688 F.2d 1294, 1295 (9th Cir. 1982) (presentation of “additional facts of attorney 

incompetence” transformed claim into one not presented to state court). The undersigned 

does not consider these newly raised claims. “The district court need not consider 

arguments raised for the first time in a reply brief.” Zamani v. Carnes, 491 F.3d 990, 997 

(9th Cir. 2007).

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testimony in a single case. See, e.g, United States v. Figueroa-Lopez, 

125 F.3d 1241, 1246 (9th Cir. 1997) (law enforcement agents could 

testify that the defendant was acting suspiciously, without being 

qualified as experts; however, the rules on experts were applicable 

where the agents testified on the basis of extensive experience that 

the defendant was using code words to refer to drug quantities and 

prices). The amendment makes clear that any part of a witness' 

testimony that is based upon scientific, technical, or other specialized 

knowledge within the scope of Rule 702 is governed by the standards 

of Rule 702 and the corresponding disclosure requirements of the 

Civil and Criminal Rules.

Fed.R.Evid. 701, Advisory Committee Notes to 2000 Amendments.11

Thus, whether Saitta as a witness was an expert or the jury viewed him as an expert, 

does not control whether his testimony amounted to an expert opinion. Movant offers no 

explanation what expert opinion was required for Saitta to testify that he had viewed 

records and prepared summaries of them that were reflected on the exhibits. 

The point is made by the answer to the question Movant asks: “If he was not 

testifying as an expert, why was he the one who was needed to introduce the exhibits?” 

(Supp. Reply, Doc. 41 at 10.) The answer is because he had created the summary exhibits, 

which allowed him to testify about them based on classic first-hand knowledge, as opposed 

to opinion.

Thus, a challenge to Saitta’s testimony based on Daubert would have been futile, 

and counsel was not ineffective in failing to pursue it. Accordingly, Ground 1L is without 

merit and must be denied. 

Q. GROUND 1M – IAC RE FRAUD ON THE COURT

In Ground 1M, Movant argues ineffective assistance because “Fraud Upon the 

11 For example, a physician is not offering an opinion when he testifies that someone’s 

head has been severed based on viewing the head and body separated. And if he saw 

someone cutting it off with a saw, that requires no opinion to say it was severed with a

saw. And even if after the fact he has observed the body, the severed head and a bloodied 

saw lying between them, he may be able to offer an opinion (based solely on those firsthand observations) that the head was severed with a saw. Such would be a Rule 701 

layman’s opinion. But if the physician observes only the head after it has been severed, 

and then offers an opinion based on his examination of the head and his experience and 

training that the head was sawn off, that is a Rule 702 expert opinion, and subject to 

Daubert’s gatekeeping standard for qualifying expert opinions. Here, Saitta was simply 

testifying to the severed head, i.e. the records he observed and the summaries he prepared. 

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Court.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in Support, he clarifies that the 

underlying substantive claim is that the prosecution had worked a fraud on the court by 

prosecution him because: (1) he was merely an employee and officer of the management 

company and not of either “fund,” which he argues were limited liability companies and 

not “funds” (Amend. Memo., Doc. 25 at 103-104); and (2) the SEC investigation 

precluded the prosecution. (Id. at 104-113.) 

1. Timely

This claim was raised in original Ground 9 (see Original Memo, Doc. 3 at 87-97), 

relates back to the original Motion, and is timely. 

2. Part 2 (SEC Investigation) - Law of the Case

Movant did not raise the first portion of this claim (only employee of management 

company) or the underlying substantive claim in his Motion for New Trial. He did argue 

there was a “fraud on the court,” but only did so on the basis that the SEC had not directed 

prosecution or taken prior administrative action against him or co-defendants. (CRDoc. 

1620 at 18-24.) He also asserted the funds were limited liability companies, but did so 

only as part of his introductory “Statement of the Case” and not a basis for relief. (Id. at 

11.) The district court did not sua sponte address the ineffectiveness claim or the 

underlying substantive claim now raised in this part of his claim in denying the motion for 

new trial. (See generally Order 8/9/16, CRDoc. 1623.) 

Movant did, however, assert a “fraud on the court,” based on his SEC claims, i.e. 

use of the special prosecutor, and the results of the SEC investigation. (Ninth Circuit Case 

16-10375, Opening Brief, Doc. 28 at 47-48.) This claim has already been resolved against 

Movant. (CRDoc. 1642, Mem. Dec. 1/19/18 at 3.) 

As with Ground 1F, that decision is the law of the case. Caterino, 29 F.3d at 1395.

And, because the law of the case establishes the underlying substantive claim is without 

merit, it would have been futile for counsel to raise the issue, and thus counsel was not 

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ineffective in failing to do so. Baumann, 692 F.2d at 572. Thus, this portion of the claim 

is without merit and must be denied.

3. Part 1 (Employee of Management Company) - No Merit

With regard to the first part of this claim, Respondent argues that the evidence 

showed that whatever the business structures involved in the case, and Movant’s official 

role in them, Movant was an active participant in the fraudulent scheme. (Supp. Resp.

Doc. 38 at 7-8.)

Movant replies by arguing that evidence showed he “was not part of Mathon in 

August, 2003, nor was he ever CFO over the LLC’s as claimed by the Respondents, and 

was only involved for 19 months. (Supp. Reply, Doc. 41 at 12.) (He also argues the SEC 

issued at length. (Id. at 12-17.) 

Movant cites no authority for the proposition that counsel could have challenged 

the case on the basis that the prosecution was engaged in a fraud on the court given the 

factual disputes he references. The authorities he cites in his Memorandum in Support are 

all focused on his underlying SEC arguments. (Doc. 25 at 103-113.) 

In Hazel-Atlas Glass Co. v. Hartford Empire Co., 322 U.S. 238 (1944), the 

Supreme Court recognized the rule that courts have the inherent power to correct 

judgments obtained through fraud or intentional misrepresentation. The concept is 

embodied in the authority granted in Federal Rules of Civil Procedure 60(b)(3) to grant 

relief from a civil judgment for “fraud.” Although rarely so, the principle of fraud-on-thecourt has been applied in criminal cases. See e.g. United States v. Bishop, 774 F.2d 771, 

775 (7th Cir. 1985). 

All inherent powers by nature are not established by, and thus restrained by, statutes

or rules. Thus, as an inherent power, the fraud-on-the-court principle is to be applied “with 

restraint and discretion” and only when the fraud is established by “clear and convincing 

evidence.” United States v. Estate of Stonehill, 660 F.3d 415, 443-444 (9th Cir. 2011). 

“Fraud on the court” should, we believe, embrace only that species of 

fraud which does or attempts to, defile the court itself, or is a fraud 

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perpetrated by officers of the court so that the judicial machinery can 

not perform in the usual manner its impartial task of adjudging cases 

that are presented for adjudication.

In re Intermagnetics America, Inc., 926 F.2d 912, 916 (9th Cir.1991) (quoting 7 J. Moore 

& J. Lucas, Moore's Federal Practice ¶ 60.33, at 515 (2d ed.1978)). Ordinary cases of 

perjury by a witness, or failure of disclosure do not qualify. Stonehill, 660 F.3d at 444.

“[T]he courts have refused to invoke this concept in cases in which the wrong, if wrong 

there was, was only between the parties in the case and involved no direct assault on the 

integrity of the judicial process.” Wright & Miller, Fraud on the Court, 11 Fed. Prac. & 

Proc. Civ. § 2870 (3d ed.). 

For example, in Hazel-Atlas, an attorney (and thus an “officer of the court”) in a 

patent case had schemed with his client’s officers to write and have published in a trade 

journal under the name of an ostensible expert an article asserting the uniqueness of the 

patent, and then cited that same article to the patent office in support of the patent 

application and again to the courts in support of his client’s defense in a patent 

infringement case. 322 U.S. at 240-241. 

Here, Movant fails to show any fraud by the prosecution for the following reasons. 

First, he contends only that the allegations made by the prosecution were false. He 

argues that there were willful false statements and misrepresentations. But he simply 

references various arguments by the prosecution. But allegations are not evidence, and

the entire purpose of a trial is to determine whether allegations are true or false. Thus, an 

unproved allegation does not interfere in the integrity of the judicial process. By Movant’s 

reasoning, whichever side loses at trial must be deemed to have perpetrated a fraud on the 

court 

Second, this claim is conclusory. It is only in his Supplemental Reply that Movant 

argues any specifics on this claim, when he asserts that the prosecution committed fraud 

when it argued that Movant was part of Mathon for three years(beginning in August 2013). 

Movant insists instead that he was the CFO of “MMgt” (Mathon Management Company)

and not so until the month following the date claimed by the prosecution. (Supp. Reply, 

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Doc. 41 at 12.) Again, however, this is nothing more than an assertion that the 

prosecutions’ argument was wrong. 

Third, Movant offers no clear and convincing evidence to support his assertions, 

nor does he even suggest that such evidence exists. The controller for the Mathon 

companies testified that Movant joined the Mathon Management Company as CFO in 

August 2003. (CRDoc. 1412, R.T. 6/17/12 PM at 195.) And, Mathon’s Chief Compliance 

Officer testified that Movant was CFO of “Mathon” at least as of September 2013. 

(CRDoc. 1416, R.T. 6/21/13 AM at 1138.) Movant offers no clear and convincing 

evidence to the contrary. 

Fourth, Movant offers no basis to draw a meaningful distinction between the 

Mathon Management Company and the various funds and LLCs that it ran. Perhaps, if 

this were a case pursuing civil liability that distinction might be relevant. But in a criminal 

fraud case, the relevant fact was that Movant was actually involved in the fraud, and who 

wrote his paycheck or what title he bore do not go to the central issues in the case. As 

recognized in Stonehill, it is only when a litigant “intentionally misrepresented facts that 

were critical to the outcome of the case” that fraud on the court can be shown. Stonehill, 

660 F.3d at 452. 

This portion of the claim is without merit and must be denied.

R. GROUND 1N – IAC RE RESTRAINT OF ASSETS

In Ground 1N, Movant argues ineffective assistance because “Pretrial Restraint of 

Innocent Assets.” (Amend. Mot. Doc. 24 at 5.) In his Memorandum in Support, he 

clarifies the underlying substantive claim is that “the government impermissibly restrained 

innocent assets pre-trial, which were needed to pay counsel of choice.” (Amend. Memo., 

Doc. 25 at 114-115.)

This claim was not raised in the original Motion, nor was the underlying substantive 

claim. Nor did the original Motion assert the operative facts of an improper pretrial 

restraint of assets, the resulting denial of counsel of choice, or trial counsel’s failure to 

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raise the issue. (See generally Original Motion, Doc. 1 and Original Memo, Doc. 3). 

Movant argues that it was sufficient that ineffectiveness of trial counsel was argued. 

But ineffective assistance of counsel is not a unitary claim, with all instances being 

fungible. Schneider v. McDaniel, 674 F.3d 1144, 1152 (9th Cir. 2012). Cf. Carriger v. 

Lewis, 971 F.2d 329, 333-34 (9th Cir. 1992) (in the context of exhaustion defense, 

rejecting argument that presentation of any claim of ineffectiveness results in fair 

presentation of all claims of ineffective assistance). Movant points to no similar claim in 

his original Motion of ineffective assistance that related to pretrial restraint of assets, the 

selection of counsel, or otherwise raised the operative facts of Ground 1N. The 

undersigned finds none.

Accordingly, Ground 1N does not relate back to the original Motion, is untimely, 

and therefore must be dismissed with prejudice.

S. GROUND 2 – BRADY CLAIM

In his Ground 2, Movant argues a Brady violation based on information obtained 

from the SEC’s investigation. (Memo., Doc. 25 at 116-125.) 

1. Timely

Movant asserted a claim of ineffective assistance based on these facts in original 

Ground 8. (Orig. Motion, Doc. 1 at 17; Orig. Memo, Doc. 3 at 83-86.) While the assertion 

of a related substantive claim can fail to present the operative facts of an ineffective 

assistance claim (e.g. if it fails to include the additional facts of counsel’s deficiency with 

regard to the substantive claim), the reverse is not necessarily true. Here, Movant’s related 

ineffective assistance presents the operative facts on which he relies in Ground 2, namely 

that the SEC’s files revealed no findings of misrepresentations or false statements, and 

authorized no criminal prosecution, and “the prosecutors knowingly and wilfully [sic] 

withheld and concealed the exculpatory evidence.” (Orig. Memo., Doc. 3 at 83-84.) Thus, 

the operative facts of Ground 2 were raised in the original Motion, and therefore Ground 

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2 relates back to the original motion and is timely. 

2. Law of the Case

Movant argued this Brady claim in his Motion for New Trial (CRDoc. 1620 at 5-

8), and on appeal from the denial of his Motion for New Trial (Ninth Circuit Case 16-

10375, Opening Brief, Doc. 28 at 44, et seq.). The district court denied the claim. (Order 

8/9/16, CRDoc. 1623 at 3-4) as did the Ninth Circuit (Mem. Dec. 1/19/18, CRDoc. 1642 

at 2). Accordingly, Movant cannot again raise this claim in his 2255 motion. Odom, 455 

F.2d 160. 

Therefore, Ground 2 must be dismissed with prejudice.

T. GROUND 3 – SUBJECT MATTER JURISDICTION

In Ground 3 Movant argues that there were defects in the Court’s subject matter 

jurisdiction. (Amend. Motion, Doc.24 at 7.) In his Motion in Support, he clarifies that his 

contention is that the information in the SEC’s investigative file established: (a) there 

were no violations, and thus no case or controversy; (b) there was no standing because 

Movant had no ownership or control over the funds, there were no “funds”, and no Ponzi 

scheme existed; (c) no jurisdiction because the prosecutor was not authorized by the SEC 

to prosecute; and (d) the matter was moot because the SEC determined there was no Ponzi 

scheme. (Amend. Memo., Doc. 3 at 126-141.)

1. Timely

Movant asserted a claim of ineffective assistance based on most of these issues in 

original Grounds 2 and 3. (Orig. Motion, Doc. 1 at 5, 7; Orig. Memo, Doc. 3 at 61-63, 64-

70.) 

However, Movant did not assert that the legal argument that the matter was moot. 

However, the facts on which his mootness claim is based are the SEC’s investigation

which underlies Grounds 2 and 3. Thus, even this portion of Ground 3 arises from a 

common core of operative facts as original Grounds 2 and 3. As with Ground 2, it is not 

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controlling that the operative facts were asserted as part of a claim of ineffectiveness.

Therefore, all of Ground 3 relates back to the original Motion, and is timely.

2. Law of the Case

Movant argued at least portions of this subject matter jurisdiction claim in his 

Motion for New Trial. (CRDoc. 1620 at 18-19, 24-25.)

On appeal from the denial of his Motion for New Trial, Movant argued his claims 

based on (a) the lack of a case or controversy (Ninth Circuit Case 16-10375, Opening 

Brief, Doc. 28 at 16, et seq.); (b) no standing because of a lack of evidence (id.); and (c) 

the lack of SEC authorization (id. at 16-17). He did not explicitly assert a lack of 

jurisdiction based on (d) mootness. But, the essence of his mootness claim is simply a 

restatement of his contention that there was no case or controversy because the SEC did 

not find a Ponzi scheme. (Memo. Doc. 25 at 139-140.)12 

The Ninth Circuit denied Movant’s claims of a lack of subject matter jurisdiction. 

(Mem. Dec. 1/19/18, CRDoc. 1642 at 2). Accordingly, Movant cannot again raise Ground 

3 in his 2255 motion. Odom, 455 F.2d 160. 

Therefore, Ground 3 should be dismissed with prejudice.

U. GROUND 4 – HONEYCUTT

In Ground 4, Movant asserts a claim based on Honeycutt v. United States, 137 S.Ct. 

1626 (2017) (scope of joint and several liability under a federal forfeiture statute, 21 

U.S.C. § 853). As discussed above in Section III(B)(3)(d) (newly recognized right), this 

claim is not subject to a delayed statute of limitations. 

Movant did not assert this claim in his original Motion. Accordingly, it does not 

relate back to his original motion. 

He first asserted it in his attempted “Supplemental Petition” (Doc. 21), filed June 

12 Even if not precluded by the law-of-the-case doctrine, the “mootness” claim is without 

merit for the same reason that the claim in Ground 1I (findings of investigation binding) 

is without merit. 

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11, 2018. The court construed this as a motion for leave to amend. (Order 10/5/18, Doc. 

23.) Although the Ninth Circuit has apparently not spoken, other circuits have held that 

an amended pleading is, for purposes of a statute of limitations, deemed filed as of the 

filing of the motion to amend. See Villanueva v. Liberty Acquisitions Servicing, LLC, 215 

F. Supp. 3d 1045, 1058 (D. Or. 2016) (detailing cases). But that motion was filed long

after the statute of limitations (including equitable tolling) expired on February 3, 2017. 

Accordingly, this claim is untimely, and must be dismissed with prejudice. 

V. EVIDENTIARY HEARING

Movant makes various calls for an evidentiary hearing. 

The court may deny a hearing if the movant's allegations, viewed against the record, 

fail to state a claim for relief or "are so palpably incredible or patently frivolous as to 

warrant summary dismissal." U.S. v. Mejia-Mesa, 153 F.3d 925, 931 (9th Cir.1998). Mere 

conclusory statements in a § 2255 motion are insufficient to require a hearing. U.S. v. 

Hearst, 638 F.2d 1190, 1194 (9th Cir.1980), cert. denied, 451 U.S. 938 (1981).

For the reasons discussed hereinabove, Movant's claims are either procedurally 

defective, or supported only by conclusory statements, and may be conclusively decided 

on the basis of the record available. Accordingly, the undersigned concludes that an 

evidentiary hearing on Movant's claims is not required.

W. SUMMARY

Grounds 1A, 1N, and 4 of the Motion to Vacate are barred by the applicable statute 

of limitations and must be dismissed with prejudice.

Grounds 2 and 3 were previously decided by the Ninth Circuit, and under the law 

of the case must be dismissed with prejudice. 

The ineffective assistance claims in Grounds 1F, 1G, 1H, 1K and 1M Part 2 are 

founded on substantive claims that under the law of the case are without merit, and thus 

the ineffective assistance claims in these grounds are without merit and must be denied. 

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Grounds 1B, 1C, 1D, 1E, 1I, 1J, 1L and 1M Part 1 are without merit and must be 

denied.

IV. CERTIFICATE OF APPEALABILITY

Ruling Required - Rule 11(a), Rules Governing Section 2255 Cases, requires that 

in habeas cases the “district court must issue or deny a certificate of appealability when it 

enters a final order adverse to the applicant.” Such certificates are required in cases 

concerning detention arising “out of process issued by a State court”, or in a proceeding 

under 28 U.S.C. § 2255 attacking a federal criminal judgment or sentence. 28 U.S.C. § 

2253(c)(1). 

Here, the Motion to Vacate is brought pursuant to 28 U.S.C. § 2255, and challenges 

Movant’s federal criminal judgment or sentence. The recommendations if accepted will 

result in Movant’s Motion being resolved adversely to Movant. Accordingly, a decision 

on a certificate of appealability is required. 

Applicable Standards - The standard for issuing a certificate of appealability 

(“COA”) is whether the applicant has “made a substantial showing of the denial of a 

constitutional right.” 28 U.S.C. § 2253(c)(2). “Where a district court has rejected the 

constitutional claims on the merits, the showing required to satisfy § 2253(c) is 

straightforward: The petitioner must demonstrate that reasonable jurists would find the 

district court’s assessment of the constitutional claims debatable or wrong.” Slack v. 

McDaniel, 529 U.S. 473, 484 (2000). “When the district court denies a habeas petition on 

procedural grounds without reaching the prisoner’s underlying constitutional claim, a 

COA should issue when the prisoner shows, at least, that jurists of reason would find it 

debatable whether the petition states a valid claim of the denial of a constitutional right 

and that jurists of reason would find it debatable whether the district court was correct in 

its procedural ruling.” Id.

Standard Not Met - Assuming the recommendations herein are followed in the 

district court’s judgment, that decision will be in part on procedural grounds, and in part 

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on the merits. Under the reasoning set forth herein, jurists of reason would not find it 

debatable whether the district court was correct in its procedural ruling, and jurists of 

reason would not find the district court’s assessment of the constitutional claims debatable 

or wrong. 

Accordingly, to the extent that the Court adopts this Report & Recommendation as 

to the Motion to Vacate, a certificate of appealability should be denied.

V. RECOMMENDATION

IT IS THEREFORE RECOMMENDED that Grounds 1A, 1N, 2, 3, and 4 of 

Movant's Amended Motion to Vacate, Set Aside or Correct Sentence pursuant to 28 U.S.C. 

§ 2255, filed November 9, 2018 (Doc. 24) be DISMISSED WITH PREJUDICE.

IT IS FURTHER RECOMMENDED that remainder of Movant's Amended 

Motion to Vacate, Set Aside or Correct Sentence pursuant to 28 U.S.C. § 2255, filed 

November 9, 2018 (Doc. 24), including Grounds 1B, 1C, 1D, 1E, 1F, 1G, 1H, 1I, 1J, 1K, 

1L, 1M Part 1, and 1M Part 2 be DENIED.

IT IS FURTHER RECOMMENDED that, to the extent the foregoing findings 

and recommendations are adopted in the District Court’s order, a Certificate of 

Appealability be DENIED.

VI. EFFECT OF RECOMMENDATION

This recommendation is not an order that is immediately appealable to the Ninth 

Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of 

Appellate Procedure, should not be filed until entry of the district court's judgment. 

However, pursuant to Rule 72(b), Federal Rules of Civil Procedure, the parties shall 

have fourteen (14) days from the date of service of a copy of this recommendation within 

which to file specific written objections with the Court. See also Rule 10, Rules Governing 

Section 2255 Proceedings. Thereafter, the parties have fourteen (14) days within which to 

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file a response to the objections. Failure to timely file objections to any findings or 

recommendations of the Magistrate Judge will be considered a waiver of a party's right to 

de novo consideration of the issues, see United States v. Reyna-Tapia, 328 F.3d 1114, 

1121 (9th Cir. 2003)(en banc), and will constitute a waiver of a party's right to appellate 

review of the findings of fact in an order or judgment entered pursuant to the 

recommendation of the Magistrate Judge, Robbins v. Carey, 481 F.3d 1143, 1146-47 (9th 

Cir. 2007). 

In addition, the parties are cautioned Local Civil Rule 7.2(e)(3) provides that 

“[u]nless otherwise permitted by the Court, an objection to a Report and Recommendation 

issued by a Magistrate Judge shall not exceed ten (10) pages.” 

Dated: March 23, 2020

17-0426r RR 19 10 03 on HC.docx

James F. Metcalf

United States Magistrate Judge

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