My Story As a Federal Criminal White Collar Defendant
Printer / PDF Version: My Story As a Federal Criminal White Collar Defendant
I was a financier who found opportunities to invest in. I found the deals; developed the deals; performed due diligence; put together the business plans, loan packages, due diligence packages and financial packages; performed business consulting; business valuations and appraisals. Once the deal was developed, I would take it to private equity, to be followed by institutional / syndicated debt. I charged a fee for my consulting services, a commission on the funding I put together and a small earned equity stake in the project / company.
I specialized in emerging markets in Asia. I also covered the US, South and Central America, Canada, Europe and the Caribbean. Some of the areas I worked in:
§ Real Estate Development
§ Ground up Construction
§ Condo Conversion
§ Renovation / Expansion
§ Residential / Commercial Resorts / Golf Courses / Entertainment complexes
§ Casinos
§ Restaurants
§ High Tech / Computer Companies / Software Companies
§ Bio tech / Medical
§ Wireless Technologies / WIFI
§ Internet Companies / Streaming Video
§ Advertising / Marketing Companies
§ Distribution
§ Shipping
§ Manufacturing
§ Agriculture / Agribusiness
§ Mining
§ Auto Parts
§ Restructurings / Turnarounds
§ Import / Export
In 2003 I was working with two companies who were in a joint venture together. I had some business difficulties and was out of touch with them for one month. I had worked with them for several months prior, during which time they were very satisfied with my work. When I re-established contact with them after one month, they accused me of running with their money perpetuating a fraud. I said this was not the case, and I intended to complete both companies’ deals as I had invested over 100 hours of my time in the deals to date. They proceeded to contact the local police department, Fraud Division, and sending over to the police department confidential deal packages I was working on. Finally, to appease the companies a fraud detective contacted me to get my side of the story. I met with the detective, cooperating fully, showing him my and all company files and how I conducted my business. Upon consultation with the state attorney, it was determined I had NOT perpetuated fraud. The investigation was terminated. After a few months passed I tried to salvage a professional relationship with the two companies. They weren’t getting their way in the deal so they complained to the fraud detective once again. He investigated and concluded for the second time that my company had committed no fraud.
At this point it was very difficult to have a professional business relationship with these companies, so I tried to settle with them on a civil basis. My attorney concluded they were not willing to negotiate in good faith and were not being reasonable, so I stopped trying to work with them. Shortly thereafter I received a phone call from the Fraud Detective giving me a “heads up” that the FBI was asking him questions about me. After months of hounding the FBI without any cooperation (due to the lack of intent to fraud), these companies called in a favor from a retired Judge. Unbeknownst to me, the FBI investigated me for nearly 2 years. They wired people who worked for me and told them to spy on me. Then after the surveillance was completed, the FBI and IRS raided my office, seizing all my documents, papers, letters, computers, hard drives and printers. They did not arrest me and indicated it was in the investigation state. They admitted it was regarding the two joint venture companies.
After months of more investigations and communications with my criminal attorney, I felt like the negotiations were getting nowhere with the Government, and we were handing over to the FBI more and more information on my clients with no end in sight. In other words, their scope went way beyond the two companies in question. The FBI wanted information on all the companies I had done business with over the past seven years. The FBI also investigated my personal life all the way back to my birth, speaking with my friends, family, girlfriends, ex-wife, with no stone in my life left unturned.
The US Attorney entered the picture and threatened to obtain an indictment on me. He subsequently offered us a plea deal which we declined as my attorney at the time felt we had a very good case to proceed with trial if it came to that. Several weeks later, a friend of mine saw on Google where I had been indicted on twelve counts of wire fraud and five counts of money laundering. Before I was able to speak with my attorney, the FBI came to my house at 1am and arrested me. NO warning, no heads up to my attorney and no request by the Government to turn myself in. I was handcuffed in my pajamas and allowed to change without being allowed to shave or comb my hair. Disheveled, they took me downtown to the US Marshals office. On the way downtown, I asked the head FBI agent if I could contact my attorney and he said that the AUSA might give my attorney a call. No guarantees.
I was put in an interview room for an hour until a Probation Officer came in to interview me. Without the presence of an attorney, I was asked an infinite amount of personal questions. He said the information was for the Judge. I felt if I refused to answer the questions until my attorney was present, I would spend a very long time there, so I appeased and answered the questions. Age, height, weight, health, my assets, my accounts, my work, my education, my alcohol use, my drug use, my criminal history, driving history, my family, my significant other and so forth.
Next I was put in a cell with other mates wearing stripes. Apparently they were being held on various drug charges. After an hour in the cell, I was taken to court in shackles and handcuffs but the Marshall had taken the wrong person (me). He growled at me asking why I had acknowledged to another name, I told him that I said “no” to his question. He continued to mutter all the way back to the cell how I didn’t know my name.
Then sometime later, they handcuffed and shackled me again for the long walk from one building (Marshall’s Office) to the other (Federal Court). I was put in the Court’s holding cell, until my name was called by the Pre-Trial Judge. When I walked into the court room, my attorney was there waiting for me. Apparently the US Attorney had called him. I was never so happy to see my attorney in my life!
Without any criminal history or risk of flight, the Judge ordered me released on self-reconnaissance bond. I was shackled and walked back to my cell in the US Marshall’s Office overhearing the Marshall’s behind me saying the scum of the earth were the ones charged with Wire Fraud.
I sat in a cell with all the jail stripped inmates, for four hours until they released me. I had to walk over to the bond office to sign the conditions of my bond, and then walk several blocks to meet with my Pre-Trial Probation Officer. There she explained the terms of my release and what was expected of me. Then I was allowed to finally go home. Exhausted I walked in my front door, embarrassed knowing all my neighbors saw me carted out by a dozen FBI agents ten hours earlier. I was scared and numb. Not knowing what to do…
I was scheduled for arraignment a few days later. During my initial bond hearing, the Pre-trial Judge mentioned something to the probation officer about investigating my use of the internet. On arraignment day, the Judge asked for the PO’s recommendations. One of them was to restrict me completely from the internet. My attorney made a weak argument that all I had was a website and that alone should not preclude me from being online. Then, the AUSA got up and told the Judge that I operated a complete sham of a business; in fact, he said that I operated no business at all for the last seven years. This was a complete exaggeration and I hit the ceiling. My attorney told me to settle down and again he meekly argued to the Judge. I mentioned to my attorney that I was being brought up on charges concerning only the finance side of my business, so I proposed a compromise where I would be able to practice my business consulting business, which was not being brought into question. My attorney argued this point with a little more conviction, but he backed down very quickly when the Judge disagreed. My attorney feared I could be thrown into jail if he pushed it anymore with the Judge. So the Judge ruled that I could not possess a computer, could not use a computer, could not access the internet in any fashion and had to shut down all my companies and websites immediately. I immediately barked at my attorney that my computer had everything I needed for my defense. The Judge seemed unconcerned and stated it was not his problem. So the Judge with only one-sided information provided by the US Attorney’s Office and with one swipe of his pen, closed down the companies which I had worked tirelessly on for many years.
Needless to say I was not a happy camper. I went to meet with my pre-trial probation officer, and asked her plainly what I could do for my existing clients and the projects I was working on. Also, how could I prepare for my trial if I could not access my computer? I was allowed to send one e-mail to clients and that was it, cutting them off cold. Luckily my attorney was able to work out a deal with my PO so that my computer was to be kept at my attorney’s office and I could come there to work on it for my trial. However, I was not allowed to use any other computer or access the internet or e-mail. My business and financial livelihood was in peril.
I worked non-stop for two months on my computer to prepare for trial. I was supposed to receive discovery from the government within 10 days; it took 30 days and my attorney was easy on then about the timeline. He elected to get along with the Government versus asking the Judge to put pressure on them to produce my discovery in a timely fashion.
I noticed that during this two month period, I was working my butt off on my case, but I saw my attorney not doing much at all on my case. I made progress, pages of notes, organized files, completely went through all the thousands of documents in discovery and my attorney had yet to go through my materials. With trial looming in October, I started getting nervous. My attorney had little grasp of my very complicated financial case. He obviously was not reviewing much of the documentation I provided him and very little of the Discovery. Then the government posed a plea agreement. They wanted to forego the substantial cost of a trial as they would have to bring witnesses in from all over the world. At this time, my attorney announced he was taking a two week vacation starting August seventeenth. Although the Government did not need a decision as to plea or trial until Sept 1, because of my attorney’s vacation, I was required to make a decision on the plea agreement by august 16th, providing me 2 weeks less to make this major decision.
I pressed my attorney to review all my materials so he could give me advice regarding proceeding to trial or negotiating a plea agreement. Very last minute, my attorney met with me and went through the Indictment line by line. It was evident he had not read the materials I prepared for him nor had he read much of the Discovery. So without looking at my evidence in totality or considering the government’s evidence in any great detail, he used the indictment as the sole deforming factor in deciding should we go to trial. I hired this particular attorney to go to trial with since he was known for his trial prowess. After reading through the indictment, he advised me of the risks of a trial first, and then he let me know that the Government could / would increase the number of counts against me which at that point was twelve. He stated we could put on a very good trial, although I’m not sure how he knew that as he had reviewed very little of my materials on the case, and beat every count but just one. Based on the federal concept of relevant Conduct, although I may only be convicted on just one count, relevant conduct could / would bring in all the counts into my sentencing. So for instance, let’s say count one was for wire fraud for $13,000. The jury returns a verdict of guilty on 1 count wire fraud. The Judge, using just the conviction of 1 count, will bring in relevant conduct for all the other counts which in my case added up to $650,000. Due to relevant conduct, the risk of spending 10 years in a Federal Penitentiary is a real concern. In other words, you would have to hit a home run or face the book being thrown at you. This threat is what scared me into accepting the plea, along with the Government’s promise of recommending 21-27 months incarceration time and capping the Restitution at $400,000.
Plea Agreement: I thought it was strange that the plea agreement did not have the Government’s recommendation of 21-27 months and the 400k restitution cap. My attorney assured me that the letter from the AUSA memorializing the deal was sufficient and these things did not need to be contained in the plea agreement. Another reason I took the plea was that my attorney said he would have the opportunity to negotiate with the Government in order to reduce the restitution and perhaps the suggested incarceration period. When I signed the plea I had to accept the Statement of Facts, which I noted was not accurate to my attorney on many occasions. Also, my attorney did not call to my attention that by signing the plea, I was waiving my right to appeal (in the pressure situation and under a time limitation, I must have missed that part of the plea).
I wanted more time to consider the plea agreement but since my attorney was going on a two week vacation, and the government needed to know by September first whether we were going to trial, I had to go ahead and decide. Not only due to relevant conduct, was the risk of trial concerning, but also what the effects of trial would be on my family, personal life and business life. Nobody would be safe. The FBI had already interviewed my past relationships, my parents, my business associates and had trampled all over my life going back to my birth. I knew during Trial, this harassment would be stepped up, making everyone in my life subject to being called in as a witness. This was the deciding factor for me, as I wanted to protect those in my personal and business life. I accepted the plea.
My attorney went on vacation and I continued to go to his office to work on my computer and discovery materials so that when my attorney returned, he would have lots of ammo with which to fight for a better plea agreement. Over the next five months, my attorney did little to use the summaries and documents I provided him to proactively negotiating better plea terms with the Government. Instead my attorney used the “get along, go along” strategy with the Government, and he NEVER sent the government proof from my records showing substantial reasons to lessen the terms of the plea. Instead, he would send e-mails to the AUSA and speak to him on the phone asking for reductions but never providing the government proof to back it up. The Government therefore, never had incentive to change the initial terms of the plea.
My attorney brought in a CPA / Attorney from his firm to draw up some summaries of the company “victims” in order to show that I did substantial, bona fide work for each of the companies listed in the indictment and PSR. The CPA / Attorney sat with me for two days, having had access to all my notes and Discovery for three weeks prior. After 1 month, he provided me with company summaries which were inaccurate. He listed hours worked which were truly best-guesses and manufactured. (I will pause here and go on to the PSR, then pick this back up in the timeline.)
PSR: Pre-sentenced Report. The Probation Officer who was responsible for putting together the pre- sentence report for the Judge came to my attorney’s office for the interview. The fact that the PSR PO would come to us was a good sign he was going to be easy to work with. As requested by my attorney, I had prepared for the PSR questionnaire beforehand. I asked my attorney if he needed to review it before the interview, and he said that was not necessary. The interview went smoothly and quickly since I had prepared the answers prior in writing. At no time did my attorney tell me that it was significant if I had drug or alcohol abuse. I thought this aspect of my life was private and nobody’s business but my own. Therefore, I did not admit to alcohol abuse from my past. (I will speak to the significance of this emission later).
The Probation Officer formed the PSR and sent it to my attorney for review. It listed 17 companies adding on to the original 12 from the indictment; $486,033 in restitution (not the 400k cap they promised) and it stated the range of 27-33 months. My attorney had some of the clerical mistakes corrected, but he never presented the PO or AUSA with concrete evidence as to why companies should be taken out of the PSR and/or why the restitution should be reduced due to actual services I performed for these companies. Nor did my attorney call the PO’s attention to the AUSA’s letter memorializing the terms of my plea agreement.
At this point I finally received back the CPA / Attorney’s write-up on each of the companies listed in the PSR. It was inaccurate and portrayed hours of work which were just best guesses. I did not feel comfortable with the write-ups so I had to spend day and night for 2 weeks writing the summaries on each of the 17 companies (victims). Unfortunately, my attorney never sent these summaries to the PO or AUSA prior to the sentencing hearing, nor did he provide the Judge with the information. The summaries provided strong evidence toward reducing the amount of victims (possibly giving me 6 months less on my sentence) and reducing the amount of restitution I had to pay. Since my attorney never submitted this evidence to the PO, AUSA or the Judge, none of them had reason or incentive to reduce the charges. It came as no surprise that my Attorney’s argument on sentencing day concerning my doing legitimate work and challenging the amount of restitution fell on deaf ears as evidence was submitted to support his motion.
On sentencing day, my Attorney’s motions and arguments were a waste of time. The Judge had made up his mind prior to entering the Court, as he indicated to the AUSA that he need not make any counter arguments. The AUSA, in writing, promised 21-27 months later adjusted to 27-33 by the PO and a cap of $400,000 in restitution. I ended up with 33 months and $486,000 in restitution. The Judge sentenced me in the low range of the guideline which was not a surprise but because of my Attorney’s mistakes, I received six months more on my sentence of 27 months.
I was ordered to Self-Surrender in a month to a facility the BOP determined was appropriate. The only thing my attorney could say at this point was “you are a lot better off than if you went to trial.” I would have been better off hiring a more aggressive attorney.
So that is what I did. I researched all weekend long and found a well regarded Post-Conviction law firm to represent my interests going forward. This was the best decision I have ever made. In fact, I should have retained these experts before I signed my Plea Agreement as they certainly could have guided my local attorney on how to properly negotiate a plea deal in my circumstance. They are Federal Law experts on Plea Agreements, Trial Prep, PSRs, Sentencing, Post-conviction, Designation, Appeals, Case Review, Relief and so forth.
Upon retaining this expert firm they immediately went to work. They properly interviewed me and determined my alcohol abuse, whereby they explained the RDAP program. RDAP is a 9 month BOP drug rehab program which when completed can give up to twelve months off your sentence (average at nine months). Prior to the PSR interview, my attorney failed to pre-interview me properly and document my alcohol abuse in the PSR, which automatically admits you into the RDAP program upon review by the BOP.
At the time of writing this story about my federal exploits, I have been approved by the RDAP program. Although I did not have any alcohol abuse detailed in my PSR, my Post-Conviction Attorney had my Psychologist write a letter diagnosing my abuse. Since I had been seeing my Psychologist for some time, his credentials and letter were the chief reasons why my RDAP approval came through. My attorney also had the sentencing Judge issue an order requesting the BOP screen me for substance abuse. These two elements, along with a positive inmate drug counselor interview on my substance abuse, helped me to become approved for the RDAP Program. Even if your substance abuse is documented in your PSR, it isn’t a guarantee you will get into RDAP. Having a Medical Doctor’s diagnosis letter helps solidify your chances of getting approved for RDAP. Currently I am waiting to be designated to an RDAP facility. [Done properly, for RDAP purposes, your substance abuse should be documented in your PSR, a diagnosis letter should be included in the PSR, along with a request to your sentencing Judge recommending RDAP and the particular RDAP facility you want to be designated to. The BOP strongly adheres to a Judge’s recommendation when circumstances permit and when the Judgment is accurate (i.e. sending you to the proper security level institution).]
Also, at this time my 2255 review has been completed. My Post-Conviction Law firm has an Appeal team on retainer and upon a thorough, detailed review of my case, my appeal attorney’s opinion is that I have a strong potential of obtaining up to 5 months off my sentence since I had signed my Plea agreement based upon a letter by the AUSA stating the estimated terms of the plea. (After which the AUSA recommended to the PO to include a 2 point enhancement for Breach of a Position of Trust). My Attorney never brought up to either the PO or the Government, illustrating how the Government breached its promise of the sentencing guideline recommendation to the PO. I based not only my decision to sign the Plea Agreement on that letter from the AUSA but also used it as the central reason not to pursue a trial. Based upon this evidence, my appeal attorney said I can present this evidence to my sentencing Judge, asking for a vacate and re-sentencing. In my case, a re-sentencing would not enhance the amount of time I have to serve, so the risk is minimized. We would ask for a new sentencing judge and expect a low-end guideline range sentencing as was the case with my original sentencing Judge. Hence, the opportunity to get up to 6 months relief.
An element which my Review Attorney felt was overlooked by my trial attorney was my diagnosis of depression. This could also have been a reason significant enough to pursue a Trial. This diagnosis could have been used effectively to explain my actions.
Another area the Government breached my Plea Agreement was increasing my agreed cap of $400k of restitution. It ended up being $486,000. Unfortunately restitution cannot be contested by a 2255 Relief.
In the end, I have come to realize, you need to have a Federal Law Expert working with the local attorney of record in order to ensure all avenues of justice and your defense are pursued aggressively. A Federal Law firm has a depth of different talents and disciplines to provide your attorney the resources necessary to level the playing field with the Government. Otherwise you will be railroaded like I was no matter if your attorney comes highly recommended. Federal Law is broad, yet complicated and precise, and the emergence of Federal Expert Law Firms is on the rise due to complexities in putting on a strong defense. To do this you need Federal Law consultants, sentencing mitigation experts, Attorneys versed in Federal Guidelines and Programs, Alternative sentencing resources, medical experts, appeal experts and so forth along with a strong, local trial attorney. A complex team is necessary so pick your law firms carefully. A place to start is having your local attorney hire a good Federal Law Consultant, often called a Sentencing Consultant. This Consultant can advise you on what “expert” firm will work well for your case, helping you assemble a capable defense team.
God Bless and Good Luck!
I have written a Comprehensive Legal Guide for White Collar Defendants in the Federal Criminal Legal System, which may be helpful for you and your attorney.
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