United States District Court, E.D. Virginia, Richmond Division
E. Payne Senior United States District Judge
matter is before the Court on the AMENDED MOTION TO VACATE,
SET ASIDE, OR CORRECT A SENTENCE UNDER 28 U.S.C. § 2255
submitted by Christian M. Allmendinger, a federal inmate
proceeding by counsel (ECF No. 491) (hereinafter "§
2255 Motion"). Allmendinger contends that his trial and
appellate counsel were ineffective, thereby violating the
Sixth Amendment right to counsel. Specifically, Allmendinger
demands relief because:
Claim One: "Counsel was ineffective in relying on an
invalid defense instead of recommending that Petitioner
accept the plea agreement offer of ten years."
(Id. at 5.)
Claim Two: "Petitioner was denied the effective
assistance of counsel on appeal." (Id. at 13.)
Claim Three: "Counsel failed to preserve for de
novo review the issue that petitioner's money
laundering convictions are barred by the 'merger
problem.'" (Id. at 18.)
Claim Four: "Counsel had a conflict of interest, as
co-counsel had applied for employment with the Department of
Justice at the time of petitioner's trial."
(Id. at 19.)
Government has responded, asserting that Allmendinger's
claims lack merit. (ECF No. 525.) Allmendinger has filed a
Reply. (ECF No. 529.) The United States has also filed
GOVERNMENT'S MOTION TO COMPEL COUNSEL TO PROVIDE AN
AFFIDAVIT IN RESPONSE TO PETITIONER'S INEFFECTIVE
ASSISTANCE OF COUNSEL
FILED PURSUANT TO 28 U.S.C. § 2255 AND MEMORANDUM IN
SUPPORT (ECF No. 4 98) . That Motion to Compel will be denied
as moot because the Government has submitted a declaration
from Barry Pollack, Allmendinger's trial counsel, as an
attachment to its response (ECF No. 525-1). For the reasons
stated below, Allmendinger's § 2255 Motion will be
September 7, 2010, a grand jury indicted Allmendinger on one
count of mail fraud conspiracy (Count One); three counts of
mail fraud (Counts Two through Four); one count of conspiracy
to commit money laundering (Count Eight); three counts of
money laundering (Counts Nine through Eleven); and two counts
of securities fraud (Counts Fifteen and Sixteen).
(INDICTMENT, ECF No. 3.) On October 21, 2010, Allmendinger
and his co-defendant, Adley Abdulwahab, were arraigned and
trial was set for March 9, 2011. (ECF Nos. 36 and 38). On
January 6, 2011, an agreed discovery order was entered. (ECF
No. 100) . However, the Government had provided some
discovery even before the Order was entered.
February 1, 2011, the grand jury returned a Superseding
Indictment charging the same counts with minor modifications.
(SUPERSEDING INDICTMENT, ECF No. 140.) The defendants were
arraigned on the Superseding Indictment on February 22, 2011.
The trial date was not changed.
Memorandum Opinion and Order entered on March 7, 2011, the
Court granted Allmendinger's and Abdulwahab's
separate motions to sever their trials. United States v.
Allmendinger, NOS. 3:10CR248-01, 3:10CR248-02, 2011 WL
841514, at *1 (E.D. Va. Mar. 7, 2011); (see ECF Nos.
177-78). Allmendinger's trial was rescheduled to begin on
March 14, 2011. (ECF No. 182.)
March 9, 2011, the Government filed a Motion to Dismiss Count
Ten of the Superseding Indictment with respect to
Allmendinger. (ECF No. 184.) By Order entered on March 11,
2011, the Court granted the Government's motion. (ECF No.
March 14, 2011, the jury trial commenced. After the
Government rested, Allmendinger moved for a judgment of
acquittal as to all counts pursuant to Federal Rule of
Criminal Procedure 29. (Mar. 18, 2011 Tr. 937-80, ECF No.
427.) The Court granted the motion as to a mail fraud count
(Count Four) and a securities fraud count (Count Sixteen),
but denied it with respect to the remaining counts. (ECF No.
203.) At the close of evidence, defense counsel renewed the
motion for a judgment of acquittal. (Mar. 21, 2011 Tr.
1081-82, ECF No. 432.) The Court denied the motion. (ECF No.
204.) After a day of deliberations, the jury returned its
verdict, finding Allmendinger guilty of the remaining seven
counts of the Superseding Indictment. (ECF No. 207, at 1-3.)
November 9, 2011, the Court entered judgment against
Allmendinger and sentenced him to 540 months of imprisonment.
(J. 3, ECF No. 384.) Allmendinger appealed. The United States
Court of Appeals for the Fourth Circuit affirmed
Allmendinger's convictions and sentence. United
States v. Allmendinger, 706 F.3d 330, 344 (4th Cir.
2013). The Supreme Court of he United States subsequently
denied Allmendinger's petition for a writ of certiorari.
Allmendinger v. United States, 133 S.Ct. 2747
SUMMARY OF EVIDENCE
Fourth Circuit summarized the evidence of Allmendinger's
guilt as follows:
Allmendinger and Brent Oncale founded a company known as
"A&O" in Houston, Texas, in late 2004. The
company sold life settlement investments, which are interests
in life insurance policies. Until the end of 2006, A&O
sold "bonded life settlements, " which were
interests in particular life insurance policies. The
investments were for fixed terms of between four and seven
years. If the insured died during the term, the life
insurance company would pay a benefit, but if the insured
remained alive, a reinsurance bond, which A&O purchased
from Provident Capital Indemnity (ttPCI"),
was designed to pay out and take over the life insurance
policy (so long as the life insurance policy premiums were
Allmendinger and Oncale marketed and sold A&O's
bonded life settlements directly to investors. In 2005, they
hired Adley Abdulwahab to help market the products through
his company, Houston Investment Center ("HIC"). In
marketing A&O's products, both orally and through
written materials they created, Allmendinger, Oncale, and
Abdulwahab lied about many critical facts. For example, they
represented that investor funds were placed in a segregated
account dedicated to those payments and used right away to
pay policy premiums up front; in reality, although A&O
paid the premiums, it had no separate account for that
purpose and it paid them only as they became due. Indeed,
money invested with A&O was commingled in a general
operating account from which A&O paid its bills. Over the
time that A&O was in business, Allmendinger, Oncale, and
Abdulwahab took advantage of this structure, misappropriating
millions of dollars from this account for themselves.
The three men also misrepresented A&O's size, staff,
and record of earning returns for its investors. In 2005 and
2006, A&O's websites, whose content Allmendinger and
Oncale had created, listed fictional people as company
principals, falsely stated that A&O had officers in
multiple states, greatly exaggerated the number of A&O
employees, and falsely stated that A&O had particular
legal and business professionals on its staff. The sites also
stated that A&O had "enabled [their] clients to
leverage $375 million into $800 million in less than five
years, " when in actuality, no investor had received any
pay out at that time.
In 2006, Allmendinger and Oncale invited Abdulwahab, who was
excelling at A&O, to become a partner. Thereafter, the
three men each held an equal interest in A&O and shared
authority over the company.
By late 2006, regulators from different states began to send
inquiries to A&O regarding its life settlement product,
largely based on concerns that A&O was selling an
unregistered security. These inquiries prompted the three
partners to consult with Florida attorney Michael Lapat, who
assisted A&O in setting up hedge funds that were backed
by life settlements. By early 2007, A&O began offering
fractionalized interests in these funds that they called
"capital appreciation bonds."
This format change did not stem the tide of regulator
inquiries, however, and Allmendinger, Abdulwahab and Oncale
agreed to sell A&O to a company called "Blue
Dymond." Before the sale, however, Allmendinger,
Abdulwahab, and Oncale helped themselves-for what
Allmendinger believed was one final time-to several hundred
thousand dollars from A&O's operating fund. After
this raid on A&O's coffers, only $2.9 million
remained in A&O's bank accounts-not even half of the
amount A&O needed to pay the premiums on all of its
policies up through their bonding dates.
Unbeknownst to Allmendinger, however, Abdulwahab and Oncale
had constructed an elaborate secret plan to purchase the
company themselves and continue running it. Blue Dymond-the
buyer of A&O-was little more than a front for Abdulwahab
and Oncale; it was a shell company created and funded by
Abdulwahab and Oncale with the assistance of attorney Russell
Mackert and without the knowledge of Allmendinger.
Under the terms of the sale, the partners were to receive
$750, 000, with the expectation of an additional $250, 000 in
the 18 months following the sale. While Allmendinger received
his $750, 000, Oncale and Abdulwahab-unbeknownst to
Allmendinger- received only $750 and secretly continued the
business through Blue Dymond. Through August 31, 2007, the
date of the sale, Allmendinger had personally received $8,
455, 033.60 from A&O; Oncale had received $7, 303,
496.98; and Abdulwahab had received $2, 889, 366.70.
Allmendinger used his money to live an exceptionally
extravagant lifestyle, purchasing expensive jewelry, cars,
and other items, including a $2 million home.
In September 2007, Abdulwahab and Oncale hired David White to
serve as A&O's president. During this time, A&O
continued generally to operate in much the same manner as it
had before Allmendinger sold his interest. Indeed, A&O
continued to employ the fraudulent marketing materials
Allmendinger and his co-conspirators had created. The
remaining principals, however, accelerated their
misappropriation of investor funds. In the fall of 2007,
A&O funds amounting to $11 million were deposited in
Mackert's account and distributed to Abdulwahab and
Oncale. A&O ceased making premium payments on many of its
life insurance policies, causing them to lapse, and A&O
stopped taking new investor funds in early 2008. Thereafter,
Mackert took over the management of A&O and subsequently
placed A&O into bankruptcy. From November 2004 until
2008, A&O's more than 800 investors lost more than
In January 2010, Allmendinger was interviewed by federal
prosecutors and law enforcement agents and informed that he
would be indicted based on his involvement with A&O. In
the following weeks, Allmendinger began to hide his assets.
His father opened a bank account in February 2010, and more
than $676, 000 in funds that Allmendinger had previously held
with his father in a joint account was deposited into the new
account. His father then used some of those funds to pay more
than $300, 000 of Allmendinger's credit card debt.
United States v. Allmendinger, 706 F.3d 330, 333-35
(4th Cir. 2013) (internal citations omitted) (alteration in
STANDARD FOR INEFFECTIVE ASSISTANCE OF COUNSEL:
demonstrate ineffective assistance of counsel, a convicted
defendant must show first, that counsel's representation
was deficient and second, that the deficient performance
prejudiced the defense. Strickland v. Washington,
466 U.S. 668, 687 (1984) . To satisfy the deficient
performance prong of Strickland, the convicted
defendant must overcome the "'strong
presumption' that counsel's strategy and tactics fall
'within the wide range of reasonable professional
assistance.'" Burch v. Corcoran, 273 F.3d
577, 588 (4th Cir. 2001) (quoting Strickland, 466
U.S. at 689). The prejudice component requires a convicted
defendant to "show that there is a reasonable
probability that, but for counsel's unprofessional
errors, the result of the proceeding would have been
different. A reasonable probability is a probability
sufficient to undermine confidence in the outcome."
Strickland, 466 U.S. at 694. In analyzing
ineffective assistance of counsel claims, it is not necessary
to determine whether counsel performed deficiently if the
claim is readily dismissed for lack of prejudice.
Id. at 697.
INEFFECTIVE ASSISTANCE DURING PLEA NEGOTIATIONS
Claim One, Allmendinger alleges that "counsel was
ineffective in relying on an invalid defense instead of
recommending that [Allmendinger] accept the plea agreement
offer of ten years." (§ 2255 Mot. 5.) First, it is
appropriate to outline the legal principles pertaining to
Claim One and then to see the claim for what it really is and
then measure it against the controlling legal principles and
Counsel's Obligations With Regard To Guilty Plea
plea negotiations defendants are 'entitled to the
effective assistance of competent counsel.'"
Lafler v. Cooper, 132 S.Ct. 1376, 1384 (2012)
(quoting McMann v. Richardson, 397 U.S. 759, 771
(1970)). Generally, claims of ineffective assistance of
counsel during the plea process fall into three categories.
First, "the [complete] failure of a defense attorney to
timely inform his client of a plea offer constitutes
unreasonable professional assistance." United States
v. Brannon, 48 F.App'x 51, 53 (4th Cir. 2002)
(citing United States v. Blaylock, 20 F.3d
1458, 1465-66 (9th Cir. 1994)); see Griffin v.
United States, 330 F.3d 733, 737 (6th Cir. 2003).
Second, a defense attorney's inaccurate advice or
misinformation in conveying a plea offer may constitute
deficient assistance. Brannon, 48 F.App'x at 53
(citing Paters v. United States, 159 F.3d 1043,
1047-48 (7th Cir. 1998); see United States v.
Merritt, 102 F.App'x 303, 307-08 (4th Cir. 2004);
Wolford v. United States, 722 F.Supp.2d 664, 688
(E.D. Va. 2010) (concluding that counsel was deficient where
he "misled [the petitioner] into believing that she had
some possibility of prevailing at trial on the basis of
several non-viable defenses"). Third, incomplete advice
in conveying a plea also may provide a basis for a claim of
ineffective assistance of counsel. See Wolford, 722
F.Supp.2d at 689 (concluding that "counsel's
incorrect and incomplete legal advice to [the petitioner]
during the plea negotiation process was objectively
unreasonable" (citing Strickland, 466 U.S. at
688)); see also United States v. Day, 969 F.2d 39,
43 (3d Cir. 1992) ("[A] defendant has the right to make
a reasonably informed decision whether to accept a plea
offer." (citing Hill v. Lockhart, 474 U.S. 52,
56-57 (1985); Von Moltke v. Gillies, 332 U.S. 708,
721 (1948))). Here, Allmendinger contends that he is entitled
to relief because Pollack provided incomplete and incorrect
advice in conveying what Allmendinger erroneously refers to
as a plea offer.
Claim One: What Is It?
One is comprised of two somewhat related notions. First,
there is the notion that trial counsel was ineffective for
not "recommending that [Allmendinger] accept the plea
agreement offer of ten years." (§ 2255 Mot. 5.)
That, indeed, is the gravamen of Claim One. Second, there is
the linked notion that trial counsel chose to rely on an
"invalid defense" instead of recommending
acceptance of the so-called plea offer. (Id.)
Neither proposition is borne out by the record.
begin, the record shows that there never was a plea agreement
offer of ten years for Allemendinger to accept. The record
shows only that, in February 2010, there were discussions
about a cooperating plea agreement that would carry a
ten-year maximum sentence which Allmendinger rejected out of
hand. And, the record also shows that the theory of defense
in play in February 2010 when those discussions occurred was
a lack of scienter that was based on what Allmendinger told
trial counsel and that Allmendinger simply did not tell his
counsel the truth.
The Notion That Counsel Was Ineffective For Failing To Advise
Allemdinger To "Accept The [So-Called] Plea Agreement
predicate of Claim One is the assertion that there existed a
plea agreement offer of ten years that Allmendinger could
have accepted. This notion springs from a single conclusory
statement in a document entitled UNSWORN DECLARATION OF
CHRISTIAN ALLMENDINGER in which it is said that "Pollack
informed me that the Government offered me a plea agreement
of 10 years." (ECF No. 482-1, at 26.) The record
actually disproves that assertion.
Pollack and the prosecutor, Michael Dry, swear that, in
February 2010, there was no plea agreement offer. To the
contrary, there were only discussions about a possible plea
agreement pursuant to which Allmendinger would cooperate in
the prosecution of other A&O principals and be charged
with an offense carrying a ten year term of
January 2010, Dry decided to accelerate the investigation
into A&O by interviewing company executives in an effort
to secure their cooperation, thinking that a successful
prosecution required the direct testimony of an A&O
executive, notwithstanding that there were clearly some
misrepresented facts on the A&O website. To that end, on
January 26, 2010, Dry interviewed Allmendinger. Dry advised
Allmendinger's counsel, Jason Ross, that Allmendinger was
facing significant prison time and asked whether Allmendinger
would cooperate with the Government to try to "minimize
his criminal exposure."
February 2010, Pollack, who by then had been retained by
Allmendinger to replace Ross, telephoned Dry who explained
that Allmendinger likely would be charged and, if so, he
faced significant criminal exposure. Dry queried Pollack
whether Allmendinger would plead guilty and cooperate against
other A&O executives. Pollack and Dry "discussed the
broad contours of a potential plea agreement in
which Allmendinger would plead guilty to charges that would
provide for a 10-year statutory maximum sentence." (Dry
Decl. ¶ 5.)
made clear that any offer would have to be approved by his
management and that the discussions represented only what Dry
would recommend. (Id.) Dry also informed Pollack
that other A&O executives were being interviewed and that
if one of them decided to cooperate before Allmendinger,
Dry's recommendation for plea terms respecting
Allmendinger would worsen. (Id.)
March 23, 2010, Dry, who by then had heard nothing further
about Allmendinger's willingness to cooperate,
interviewed another A&O principal, Brent Oncale. Later
that same day, Oncale agreed to plead guilty to "charges
providing for a 10-year statutorily capped sentence" and
to cooperate against Allmendinger and others at A&O.
(Id. ¶ 6.) At that point, it was no longer even
possible for Allmendinger to secure such terms. (Id.
¶ 7.) In any event, sometime in the ensuing month,
Pollack telephoned Dry and advised that Allmendinger
"was not interested in pursuing any potential plea
agreement that likely would result in a 10-year sentence of
version of the events of February 2010 confirms Dry's
statements. Pollack's recollection is that he talked to
Dry "to explore the broad parameters of what type of
plea offer the Government might be willing to extend to Mr.
Allmendinger." (Pollack Decl. ¶ 7) . Pollack never
received a written plea offer from the Government.
(Id.) However, he recalled that:
[T] he Government indicated it would likely be willing to
extend to Mr. Allmendinger a plea offer pursuant to which
there would be a statutory maximum of ten years, . . . and
there would be a joint recommendation for a ten-year
(Id.) Pollack also recalled that there would be a
possibility for a post-sentence reduction if Allmendinger
provided "substantial assistance to the
after the discussions with Dry, Pollack communicated the
potential plea terms to Allmendinger, (id.
¶¶ 9-10), and Pollack was satisfied that
Allmendinger "understood the contours of the proposed
potential plea offer." (Id. ¶ 11.) After
those discussions, Allmendinger "decided not to pursue ...