Pre-2009 Bank Fraud Convictions Vacated Where Evidence Showed Only that Defendant Intended to Defraud a Non-Federally Insured Mortgage Lender
In United States v. Michael Bouchard, Docket No. 14-4156-cr, the Circuit (Parker, Lynch, Lohier) in an opinion by Judge Lohier vacated on sufficiency grounds three bank-fraud related convictions, based on conduct occurring between 2001 to 2007, because the Government proved only that defendant Bouchard intended to defraud a mortgage lender (BNC Mortgage) that was not a federally insured financial institution. This was the case even though BNC was a wholly owned subsidiary of Lehman Brothers, a federally insured financial institution, since the Government concedes that “there was no evidence that Bouchard specifically intended to defraud Lehman Brothers or was even aware of Lehman Brothers’ role in the transactions involving BNC.” Op. 16. In so concluding based on Circuit precedent holding that “the Government must show that a defendant intended to defraud the [federally insured] financial institution itself,” id. at 18 (emphasis in original), the Court acknowledged a split with the First Circuit, explicitly rejecting the contrary holding of United States v. Brandon, 17 F.3d 409 (1st Cir. 1994).
Unfortunately, the effect of this decision is limited because Congress in 2009 amended the applicable law to cover specifically mortgage lending institutions like BNC. See Fraud Enforcement and Recovery Act of 2009, 123 Stat. 1617.
Finally, the Court upheld Bouchard’s conviction for § 371 conspiracy, since the underlying conduct involved the submission of false mortgage documents to Fremont Investment and Loan, a federal insured institution. Op. 25-27. But in a concluding footnote, the Circuit cautioned the district court about using acquitted conduct at the resentencing. (The jury had found Bouchard not guilty on certain counts involving other lenders, but the sentencing court nonetheless treated the underlying conduct as relevant conduct at the original sentencing). Specifically, while noting that a district court “may treat acquitted conduct as relevant conduct at sentencing” if proven by a preponderance, the Circuit warned that “‘the scope of conduct for which a defendant can be held accountable under the sentencing guidelines is significantly narrower than the conduct embraced by the law of conspiracy.’” Op. at 30 n.6 (quoting United States v. Getto, 729 F.3d 221, 234 n.11 (2d Cir. 2013)). Specifically, if a court wishes to base a sentence on acquitted conduct, the court “must make particularized findings either that Bouchard actually committed the acts or that the acts of his co-conspirators were both foreseeable to him and fell within the scope of criminal activity to which he agreed.” Id. (emphasis added).
District Court Did Not Err in Refusing to Appoint New Counsel to Represent Defendant on His Motion to Withdraw His Guilty Plea, which Appointed Counsel Declined to Make
In United States v. Robert Rivernider and Robert Ponte, Docket No. 13-4685 (L), the Circuit (Livingston, Lynch, and Rakoff, D.J.) in an opinion by Judge Lynch, affirmed the conviction and sentence of both defendants, rejecting a number of challenges to their guilty pleas and sentences. Only one issue is worth discussing – the Circuit’s rejection of Rivernider’s claim that the district court should have appointed counsel to represent him on his motion to withdraw his guilty plea, rather than allow him to proceed pro se on that motion, after his appointed counsel declined to make the motion on the ground that no non-frivolous argument supported the withdrawal of Rivernider’s guilty plea.
Rivernider pled guilty during trial, after about 10 days of evidence had been introduced. Several months later, appointed counsel (Bergenn) asked the court to allow Rivernider to file a pro se motion to withdraw his guilty plea. Bergenn informed the court that the basis of the motion was Rivernider’s belief that he lacked the necessary mens rea for the offenses to which he pleaded guilty; Bergenn also indicated that he declined to make the motion himself because he believed that there was no non-frivolous basis to support it.
The court allowed Rivernider to proceed pro se on his motion to withdraw his guilty plea. The principal basis of the motion, as counsel had indicated, was Rivernider’s claim that he lacked the requisite mens rea. However, in a few short passages in a 53-page motion, he also claimed that counsel coerced the plea. But during oral argument on the motion, Rivernider did not mention his allegation regarding coercion, relying solely on the other claims raised in his written motion.
The court denied the motion, and after Rivernider agreed to have Bergenn represent him at the sentencing, proceeded to sentence Rivernider to 144 months’ imprisonment, below the range of 324 to 405 months.
On appeal, the Circuit rejected Rivernider’s claim that the district court should have appointed counsel to represent him on his motion to withdraw his guilty plea, rather than forcing him to proceed on the motion pro se.1 To begin, the Court acknowledged that “[t]here is no question that a defendant is entitled to counsel in connection with deciding whether to withdraw a guilty plea.” Op. at 25 (emphasis added). Here, however, “Rivernider was represented when deciding how to proceed when he became dissatisfied with his guilty plea.” As the Court explains: “He had a lawyer, Bergenn, who, as the record makes clear, consulted with Rivernider about his desire to withdraw his plea, and determined that he could not properly make such a motion because there were no valid grounds on which to make it.” Op. at 25-26.
And while “the decision whether to plead guilty or proceed to trial is one of the decisions on which the final say is the defendant’s,” that is not true of “the decision whether to seek to withdraw a guilty plea that has already been entered and accepted by the court.” Op. at 27; see generally id. (“A counseled defendant  has no automatic right to insist that his lawyer make motions that he would prefer to be made . . . or to insist on new counsel when he and his attorney differ on strategy . . . , particularly  when the counsel’s reason for declining to make a motion is that there are no legal grounds upon which to do so.”). The difference is that while a defendant “need have no legal grounds, or even a rational reason, to proceed to trial” – it is his “absolute right” to plead guilty or proceed to trial – the situation changes “[o]nce a plea is entered and accepted.” “At that point,” the Court explains, “the defendant must make an application to the court, which may deny the motion unless sufficient legal grounds to grant it have been shown.” And “[w]hether such grounds exist is a legal question, on which counsel’s professional expertise must be brought to bear.” Op. at 27-28.
Thus, it is ultimately counsel’s decision whether to file a motion to withdraw a guilty plea, not the defendant’s. In this case, therefore, once counsel declined to file the motion, “Rivernider did not have a right to insist that the district court hear his application.” Op. at 28 n.5. When the court nonetheless allowed Rivernider to proceed pro se on the motion, therefore, “Rivernider was not denied the assistance of counsel; rather, he was permitted to make a pro se application that he need not have been allowed to make.” Id. (emphases in original).
The proper question on appeal is therefore whether counsel rendered ineffective assistance in declining to make a motion to withdraw on Rivernider’s behalf. Op. at 23-25. And because the Court had already concluded that Rivernider failed to show sufficient cause to warrant withdraw of his plea, Op. at 18-22, it ruled that Bergenn’s refusal to file the motion did not fall outside the bounds of professional competence. Op. at 28-29.
The only remaining issue was whether Rivernider’s “passing” and “conclusory allegations of coercion” in his motion to withdraw – that Bergenn forced him into pleading guilty – created a conflict of interest between the defendant and appointed counsel, and thus the need to have substitute counsel appointed to make the motion. Op. at 32-33. On the facts here, in which “the defendant makes only conclusory allegations of coercion,” Op. at 34 (“Rivernider’s passing references to Bergenn’s conduct, buried within a lengthy and otherwise irrelevant submission, contains no specific factual allegations.”), the Court concluded that these allegations “standing alone, do not suffice to allege an actual conflict of interest” and thus that the “district court did not err in declining to appoint new counsel.” Op. at 34.2
1 Rivernider also argued of course that the court erred in denying his motion to withdraw the guilty plea, but the Circuit rejected that argument. Op. at 17-23.
2 The Court explained, however, that Rivernider’s substantive claim of coercion by counsel could be raised in a § 2255 motion. Op. at 22-23.