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United States v. Barnard

United States District Court, E.D. Virginia, Alexandria Division

April 14, 2017



          Leonie M. Brinkema United States District Judge

         Movant Phillip Edmund Barnard, Jr. ("movant" or "Barnard"), acting pro se, has filed a Motion to Vacate Under 28 U.S.C. § 2255 ("Motion to Vacate") [Dkt. 88], [1] in which he challenges the effectiveness of his trial counsel, the conduct of the government, the sufficiency of the evidence introduced at his trial before he pleaded guilty, and the validity of his guilty plea. The government filed an opposition ("Gov. Opp.") [Dkt. 104], to which movant has replied ("Rep.") [Dkt. 110]. For the reasons that follow, the Motion to Vacate will be dismissed.

         I. BACKGROUND

         On February 26, 2015, Barnard was indicted on one count of wire fraud in violation of 18 U.S.C. § 1343 and three counts of money laundering in violation of 18 U.S.C. § 1957. [Dkt. 1]. The indictment alleged that Barnard operated a charitable foundation and a series of companies that purported to invest and engage in various forms of exploration and speculation, particularly for gold and other precious natural resources. Id. at ¶¶ 3-6. Barnard allegedly persuaded a number of persons to "invest" in these enterprises, promising a high rate of return and low risk. Id. at ¶¶ 7-11. According to the indictment, Barnard actually used the money primarily for "personal purposes including, but not limited to, hotels, entertainment, educational expenses, food, and travel." Id. at ¶ 12.

         At trial, Barnard was represented by Vaughan C. Jones ("Jones"). The thrust of Barnard's defense was that the transactions were legitimate but as-yet unsuccessful.[2] To present that defense at trial, Barnard hoped to call several witnesses who would purportedly buttress the bona fides of his financial dealings. Unfortunately for Barnard, many of his witnesses had other ideas. Although Jones sent subpoenas to every witness that Barnard requested, "most witnesses were evasive and unreliable" and "[m]any proposed witnesses steadfastly refused to corroborate positions supported by Barnard." Jones Decl., [Dkt. 104-1] at ¶ 15. After some witnesses were asked to testify, they "became angry and accused [Barnard] of lying to them about why he wanted them to speak with his lawyer." Id. at ¶ 16. Others "avoided service of subpoena" altogether and still others "threatened to testify directly adverse to [Barnard's] positions." Id. at¶17.

         The trial began on July 20, 2015. The government called several victims of Barnard's scheme to corroborate its allegations of fraud. For example, Mark Cantor ("Cantor"), whose daughter played soccer with Barnard's daughter, testified that Barnard approached him about investing in a deal involving gold. Tr. at 234:8-235:22. Barnard represented that he had successfully completed similar transactions "numerous times, " and promised zero risk and a 150% return in about three months. Id. at 235:17-238:11. Another witness, Loren Schaeffer ("Schaeffer") testified about similar representations. Barnard told her that he had completed about eight gold transactions in the past and that her rate of return on a no-risk investment with him would eventually reach 1500%. Id. at 379:10-395:24. After Schaeffer invested funds, Barnard dismissed her inquiries about when she would begin seeing a return. Id. at 396:1-398:1. She ultimately had to file for bankruptcy. Id. at 423:12-13.

         The government also presented evidence that Barnard ensnared his alma mater Virginia Polytechnic Institute and State University ("Virginia Tech") in his scheme. Lay Nam Chang ("Chang"), Dean of Virginia Tech's College of Science, testified that Barnard convinced the school he was going to donate $30 million to fund a new geosciences building. Tr. at 470:18-473:9. This understanding led Virginia Tech to fly him to campus on its private plane, cover his accommodations and dinners on various occasions, and publicly announce the planned building. Id. at 467:11-471:25. During these visits, he also convinced Professor Barbara Bekken ("Bekken") to invest "in the process of bringing gold to market, " this time promising a 100% return. Id. at 509:15-513:14.

         A forensic accountant employed by the Federal Bureau of Investigation ("FBI"), Stephanie Anderson ("Anderson"), testified that Barnard's bank accounts were generally near a zero balance shortly before he received money from his victim investors. Tr. at 639:23-630:3. She traced the proceeds of those "investments" showing that Barnard used those funds to purchase consumer goods from vendors with no evident connection to the gold industry such as Montgomery County Liquor, Giant Food, Arby's, Bed, Bath & Beyond, and Amoco Oil. Id. at 643:1-11. Barnard also spent "invested" money on his daughter's tuition at a private school. Tr. at 647:13-16. At no point during trial did the defense present any evidence that Barnard had ever completed a single gold transaction.

         Behind the scenes, Jones continued to struggle with the proposed defense witnesses and evidence. Barnard repeatedly told Jones that various transactions would demonstrate that his enterprise was legitimate, but when Jones asked Barnard for documentation of those transactions, Barnard "asserted that he did not know [Jones] needed that specific document" and would "return[] to [Jones'] office the following day with documents consistent with [Jones'] request." Jones Decl., [Dkt. 104-1] at ¶ 13. This pattern caused Jones "to have concerns about the authenticity of those documents and [his] ethical ability to introduce them as evidence." Id. Moreover, Jones' "communication with the alleged signatories on many documents revealed that the documents could not be authenticated for admission at trial." Id. at ¶ 12.

         As the defense neared the end of its case-in-chief, during the afternoon of the third day of trial, the remaining two defense witnesses were not in the courthouse, despite having been served with subpoenas. Jones proffered that one of the witnesses, Mumtaz Khan ("Khan"), was "a witness who had a long series of dealings with Mr. Barnard that goes on for years" and was "connected to the royal family of an Indonesian country." Tr. at 828:3-6. Jones expected another witness, Sonny Belew ("Belew"), to testify about "similar transactions" in which Belew was on the verge of making a payment to Barnard, which would have enabled Barnard to begin paying out to the victim investors. Id. at 831:5-15.

         The Court reviewed the FBI's reports of investigation ("ROIs") from its interviews with those witnesses and concluded that the testimony of the missing witnesses would not have aided movant's case. When asked about that interpretation of Khan's ROI, Jones replied:

What I was going to say is I am very much aware of the negative information in the [ROI]. I am very much aware of the inference that any reasonable attorney would take from a person choosing not to speak with them in the three months leading up to the trial.
I will only say that my client has provided documents that I think that Mr. Khan would have to acknowledge. And the documents would then speak for themselves regardless of his satisfaction with being present for court.

Tr. at 837:6-14. The Court denied a continuance, stating:

I'm making a judgment call that it is inconceivable to me that these witnesses, were they here, could have added anything that would help the defense.
You've got Khan admitting that the letter that Mr. Barnard wanted him to send to Virginia Tech was false and they both knew it was false. That kind of stuff is not going to help your case[.]... Belew absolutely adds nothing to your case. These [witnesses] will not... help you. And, therefore, I don't see how there is prejudice to the defendant in these witnesses not being here.

Id at 837:25-838:14.

         Following this exchange, Jones announced Barnard's intent to testify on his own behalf. The Court asked Barnard whether he felt he had enough time to consider that decision, and whether he knew that untruthful testimony could impact his sentence if he were to be found guilty. Tr. at 840:15-841:6. Barnard responded in the affirmative to both questions, but asked for "two minutes" to talk to Jones. Id. at 840:15-841:9. According to Barnard, during this conversation Jones asked him '"Are you really going to [testify] against the advice of your counsel and your family?" Aff. 36.

         While Barnard and Jones were conferring, the Court asked the government whether any progress had been made in locating the missing witnesses. The government had managed to contact Khan, who said that he sat outside the courtroom on the first day of trial but was not told he needed to return and consequently left the state. Tr. at 841:15-24. He offered to testify by telephone from New York. Id. at 842:4-5. The Court asked Jones about the possibility of Khan testifying by phone, to which Jones replied, "We were going to try to introduce 50 documents through [Khan], " making it clear that testimony by phone was impracticable. Tr. at 843:11-24.

         Jones was then given five more minutes to speak with his client. Id. at 844:1-3. Before that recess, the Court advised the defense that "it's not an automatic practice with this judge to necessarily increase the offense level if a defendant is found guilty even if he has testified." Id. at 844:16-19. After the recess, Jones was allowed to move the documents into the record that he hoped to enter through Khan and Belew. Id. at 846:13-14. After those documents were moved in, the government requested another five to ten minute recess. Id. at 848:25-849:1.

         At the conclusion of this second recess, Jones advised that his client had decided to accept a plea agreement offered by the government. Tr. at 849:12-17. The Court released the jury and took over an hour recess so that the plea documents could be prepared. Id. at 852:9-25. This recess was not the only time in which Jones and Barnard had discussed the terms of a plea agreement. According to Jones, "On the day [Barnard] accepted the plea he was not presented with any issue that had not been explained to him months earlier." Jones Decl., [Dkt. 104-1] at ¶27.

         After the recess, the Rule 11 colloquy began, with Barnard affirming to answer truthfully under the penalty of perjury and reporting that he was 54 years old, held an undergraduate degree and had completed some Ph.D. coursework, was fluent in English, was not suffering from any mental or physical health problems, and had not taken any medication in the previous 24 hours. Tr. at 853:17-854:15. The Court then turned to whether he had read the plea agreement:

THE COURT: We have in court this evening a written plea agreement. And the agreement is 13 pages long. And I see what appears to be your signature at the top of page 13. Did you in fact sign the written plea agreement?
THE COURT: Now, before you signed the plea agreement, because I know this was done somewhat at the last minute, have you had enough time to read the agreement over for yourself word for word?
THE COURT: And have you had enough time to thoroughly discuss it with your attorney, Mr. Jones?
THE COURT: Now, I want to just ask this, Mr. Jones, have there been previous efforts to work out a plea in this case?
MR. JONES: Yes, Your Honor.
THE COURT: Is the plea bargain that's in court today at all similar or close to some of those earlier efforts?
MR. JONES: I would classify it as similar to those, Judge.
THE COURT: And when you were working on other attempts, had you been discussing with Mr. Barnard the kinds of things that would be in the plea agreement?
MR. JONES: Yes, ma'am.
THE COURT: All right. And the reason I'm asking you this question, Mr. Barnard, is because normally there is more time for a defendant to evaluate a plea offer. I just wanted to make sure that certain aspects of this plea agreement had been previously discussed with you in the context of other possible plea agreements. Is that correct?
THE COURT: All right. Now, do you feel that you have had enough time to ask Mr. Jones all the questions that you have about this plea agreement?
THE COURT: Has he answered all of those questions to your satisfaction?
THE COURT: Are there any questions you want to ask me about the plea agreement?
THE COURT: And you realize that at any point during what we call a plea colloquy you can stop and ask questions either of Mr. Jones or the Court? Do you understand that?
THE COURT: All right. Now I want you to look at page 13.1 assume you have a copy of the plea agreement there with you. That's the page that has your signature. And there are two sentences that are right above your signature. I want to make sure you can see those. They go, "I have read this plea agreement and carefully reviewed every part of it with my attorney. I understand this agreement and voluntarily agree to it." Do you see those two sentences?
THE COURT: Are they completely true in every respect?
THE COURT: Now, by telling the Court that you have read the plea agreement and discussed it thoroughly with counsel, and that you understand it, and you are voluntarily agreeing to it, that means you will be bound by everything that is written in this 13-page document even if I don't go over every paragraph or page of the agreement with you today. Do you understand that?
THE COURT: And the reason for that result is that this plea agreement is really a written contract between you and the United States Government. And when a person signs a written contract after he has carefully reviewed it himself, and reviewed it with his counsel, and he understands it when he signs it, and he signs it voluntarily, then that becomes a binding legal document. And you can't just come back to court in a couple weeks and say, well, I ...

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