“The government then notes the irony in Petitioner’s claim that Mr. Crandall was ineffective since Petitioner was acquitted on the charges over which Mr. Crandall had primary responsibility, i.e., the bank and wire-fraud charges. Since Petitioner was acquitted on the charges handled by Mr. Crandall, it is impossible for Petitioner to meet his burden to show that but for Mr. Crandall’s alleged errors, the result would have been favorably different. Strickland, 466 U.S. at 693. The result could not have been favorably different since it was as favorable as possible as to the bank and wire fraud charges, i.e., Counts 1, 3, 4, and 5.” MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION
July 17, 2017
Steven Ingersoll's pro se bid to set aside his federal tax fraud and conspiracy convictions deflated faster than a leaky bounce house raided by a pack of chubby Cub Scouts.
In a motion filed late yesterday, United States Magistrate Judge Patricia T. Morris denied charter cheater Steven Ingersoll's request to set aside his March 10, 2015 tax fraud and conspiracy convictions due to alleged ineffective assistance of counsel.
In the 12-page opinion, Judge Morris outlined the legal basis for her determination that Ingersoll failed to “demonstrate the existence of an error of constitutional magnitude which had a substantial and injurious effect or influence on the guilty plea or the jury’s verdict.”
BACKSTORY
Steven Ingersoll originally charged on April 11, 2014.
On April 23, 2014, a superseding indictment was filed, charging Ingersoll with conspiracy to defraud a financial institution (Count 1), conspiracy to defraud the United States and the Internal Revenue Service of the Department of Treasury (Count 2), wire fraud (electronic funds transfer of $704,000 of construction loan proceeds from the Madison Arts account to Roy and Tammy Bradley’s construction company’s account) (Count 3), wire fraud (electronic funds transfer of $704,000 of construction loan proceeds from Roy and Tammy Bradley’s construction company account to Gayle Ingersoll’s business account) (Count 4), wire fraud (electronic funds transfer of $704,000 of construction loan proceeds from Gayle Ingersoll’s business account to Steven Ingersoll’s personal bank account) (Count 5), tax evasion for the 2009 calendar year (Count 6), and tax evasion for the calendar year 2010 (Count 7).
Ingersoll was convicted on Counts 2, 6 and 7 via jury trial held from February 10 through February 17, 2015, and February 25 through February 27, 2015, and March 3 through March 10, 2015. Ingersoll was represented by Jan Geht (of Bowerman, Bowden, Ford, Clulo & Luyt, PC) and Martin Crandall (of Clark Hill).
Geht was lead counsel on tax-related offenses because he is a Certified Public Accountant and former Department of Justice Tax Division Attorney; while Mr. Crandall was lead counsel regarding the bank and wire fraud charges.
Count 1 was dismissed by Judge Thomas L. Ludington during the trial and the jury found Ingersoll not guilty on Counts 3, 4, and 5.
Sentencing hearings were held on October 20, October 21, October 22, 2015, December 8 and December 10, 2015.
Further sentencing hearings were held on January 5, January 7, January 26, January 27, January 28, February 23, February 24, July 11, July 12, and December 15, 2016.
Judgment was entered on December 21, 2016, sending Ingersoll to 41 months in the slammer on Counts 2, 6, and 7, to be served concurrently.
On January 24, 2017, Ingersoll filed a pro se motion to vacate sentence. The government responded and Ingersoll replied.
(If you want to read about that activity, search this blog.)
ANALYSIS
Ingersoll argued that counsel was ineffective for: “(1) inadequate cross examination [of Ms. Hackett]; (2) depriving the jury of expert tax accounting testimony promised in opening statement; (3) negligently advising Ingersoll to exercise his 5th Amendment privilege; [and] (4) failing to provide cogent closing arguments.”
Further, Ingersoll argued in his January 24, 2017 pro se motion that “eliminating the testimony of Ingersoll and Hammel left gaping holes in the defense leading to conviction” and that “even if advice not to testify were deemed justifiably strategic, Mr. Crandall’s failure to deliver a cogent closing argument, which Ingersoll relied [on] in deciding not to testify, ensured conviction.”
As noted by the government in its response, Ingersoll’s two attorneys, Crandall and Geht, divided the workload according to their expertise, i.e., Geht generally performed cross examination of government witnesses regarding the tax charges (IRS agent Wisniewski, IRS Special Agent Russo, CPA Taylor, CPA Camiller, CPA Clawson, Ms. Wilson who testified re tax credits, and Ms. Harrington who was employed by H&R Block). On the other hand, Mr. Crandall cross-examined Walbecq and Scherret who worked as laborers on the Madison Arts project and representatives of Chemical Bank (Kienbaum and VanWert).
(Ingersoll did not dispute this characterization of the roles his defense attorneys played.
The government then noted the irony in Ingersoll’s claim that Mr. Crandall was ineffective since he was acquitted on the charges over which Mr. Crandall had primary responsibility, i.e., the bank and wire-fraud charges.
Since Ingersoll was acquitted on the charges handled by Mr. Crandall, it is impossible for Ingersoll to meet his burden to show that but for Mr. Crandall’s alleged errors, the result would have been favorably different.
The result could not have been favorably different since it was as favorable as possible as to the bank and wire fraud charges, i.e., Counts 1, 3, 4, and 5.
As to the claim that Mr. Crandall was ineffective in his cross examination of Ms. Hackett, government counsel and the court told the jury that Mr. “Hackett’s testimony had application only to the charge in count I of the indictment” which was dismissed by the court during trial.
The government continues that if Ms. “Hackett’s testimony was critical regarding the tax charges [that he was convicted on]...one would have expected Mr. Geht to do the cross-examination of that witness, not Mr. Crandall.” Since the jury was told it could only consider Ms. Hackett’s testimony as to a count that Ingersoll was acquitted on, i.e., Count 1, it is also impossible for Ingersoll to meet his burden to show prejudice as to this argument.
Ingersoll replied that Mr. Crandall’s failure influenced his conviction on Count 2.
Ingersoll argued that Mr. Crandall failed to “emphasize that both witnesses [Walbecq and Scherrett] denied Ingersoll’s involvement in their pay and that Ms. Parker presented no evidence that Ingersoll had any awareness or involvement in Bradley’s payroll practices” and that “Crandall failed to point out to the jury the complete lack of evidence linking Ingersoll to Bradley’s payroll violations, the only basis for a conspiracy conviction after Count 1 was dismissed. Crandall’s failure left the only remaining possibility of a Count 2 [conspiracy to defraud the IRS] conviction unaddressed.”
A review of the transcript, however, reveals that Mr. Crandall did emphasize the lack of evidence connecting Ingersoll to the Bradleys’ payroll practices.
On direct examination, Walbecq testified that he was paid in cash for his work on the Bay City Academy project, that he was paid by Tammy Bradley, never received a W-2, that he never saw Roy Bradley pay anyone, but that he did see a cash transaction where Roy Bradley gave Ingersoll cash in a bank bag, and then he saw Ingersoll put the bank bag in the pocket of his coat.
Direct examination consisted of 8 pages.
On cross-examination, Crandall elicited that Walbecq was a friend of another witness and that Walbecq’s information about money passing from Roy Bradley to Ingersoll “might have come from discussions with the other witness” rather than being something he witnessed.
This cross examination targeted the main point made by Walbecq that connected Ingersoll to Roy and/or Tammy Bradley’s payroll practices and it deflated the credibility of such testimony by pointing out that Walbecq may not have based his testimony on an event he saw but perhaps was only repeating a story he had heard from the other witness. This was effective cross-examination that emphasized the lack of direct evidence.
In addition, in his closing, Mr. Crandall once again challenged the testimony of Walbecq.
As to Ingersoll’s decision not to testify, Mr. Crandall’s affidavit establishes that he and Ingersoll discussed the possibility of Ingersoll testifying, Mr. Crandall “opined on some of the dangers inherent to that process” but “it was made clear to him that it was his decision. Ingersoll made the decision not to testify.” Mr. Crandall also clarified that he “surely did not predict winning the case with or without Mr. Ingersoll’s testimony.”
Under these circumstances, counsel cannot be considered ineffective and even if he could, Ingersoll has not sufficiently alleged any prejudice. As to Mr. Crandall’s opening statement promise to provide expert tax accounting testimony, the opening did not contain any such promise.
Mr. Crandall stated that the “flow of money is looked at every year by the auditors, by the board of directors from the Grand Traverse Academy, by the Lake Superior State auditor, the chartering school, by the state of Michigan, Department of education. They look at it, they opine and never was there a problem until the IRS came to town and said they stole that money. And the auditors you’re going to see testify, some of the them are going to say, no, they didn’t. And then some of them are going to say, whoa, this is the IRS, they got power. They’re going to say, you might be right...”
Mr. Crandall was not promising to produce auditors who would testify to particularized findings or conclusions; instead, he was indicating the auditors may have various opinions on whether the conduct was problematic. Mr. Crandall also referred to a “page from an accountant that we had, a forensic accountant” and asked them to “take a look at these records...”.
However, the government objected to Mr. Crandall’s stated timing of when this document was shown to the government, then almost immediately, the government objected to Mr. Crandall’s reference to the success of previous school projects, that objection was overruled, and Mr. Crandall went on to talk about the other projects.
This brief reference did not a promise make and any reference was likely lost in the mire of objections and discussions about other school projects.
Consequently, Ingersoll cannot meet his burden to allege any prejudice based on this issue. Ingersoll focuses on the failure to call Mr. Hammel, an expert in forensic accounting, as promised in the opening statement; however, Mr. Hammel was never mentioned in the opening statement.
To the extent that Ingersoll also criticizes the decision not to call Mr. Hammel, Mr. Crandall’s affidavit indicates that “Mr. Hammel was certainly ready, willing and able to testify both in the trial of this matter and in the post-trial proceedings when he was subpoenaed to testify, but it was the Defendant’s and/or Mr. Geht’s decision, not my decision, not to call Mr. Hammel as a witness.”
Since there were no significant promises made in Mr. Crandall’s opening, and no mention of, let alone promise to call, Mr. Hammel, there can be no ineffectiveness stemming from any lack of fulfillment of a non-existent promise.
Even if there were any ineffective assistance as to the decision not to call Mr. Hammel, Mr. Crandall was not the attorney on that topic and cannot be held responsible for it.
Finally, no sufficient allegations of prejudice from any of these issues has been made.
As to Ingersoll’s argument that Mr. Crandall’s closing did not match his opening, there is no such requirement.
Effective attorneys address the evidence produced at trial in their closing arguments, as Mr. Crandall did. Even if Mr. Crandall’s closing argument was not the most eloquent argument ever made, it did not have to be. A review of the transcript shows that it was well within acceptable standards.
Ingersoll also makes a brief reference to Mr. Geht’s “fail[ure] to elicit the fact that the tax credit proceeds about which Ms. Wilson testified were used to repay the shareholder loans that was the central tax question of the trial.”
This brief reference in a reply, however, is insufficient to invoke a new claim of ineffective assistance of counsel against Mr. Geht.
Finally, Ingersoll complains that Mr. Crandall behaved unethically when he loaned Ingersoll $86,000 and threatened to withdraw from the case if he was not paid. Mr. Crandall’s affidavit acknowledges the “bridge loan,” but indicates that he did not contemplate or threaten to withdraw.
Whether that loan was proper or improper does not affect whether Mr. Crandall’s performance at trial met an objective standard of reasonableness and has no relation to this motion.
In addition, even assuming that threats were made, counsel did not move to withdraw during trial; thus, Ingersoll did not suffer any prejudice.
HEARING
In the case, there is no material factual dispute that a hearing could address. Ingersoll is not entitled to a hearing on the allegations raised in his motion. In her opinion, Judge Morris recommend that the Court deny Ingersoll’s motion because he failed to show that counsel’s conduct fell below an objective standard of reasonableness and he failed to allege prejudice supporting his ineffective assistance of counsel argument.