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United States v. Rising

United States District Court, District of Colorado

November 4, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
1. GERALD R. RISING, JR., a/k/a GERRY RISING, Movant Criminal Case No. 11-cr-00117-WYD

Gerald R. Rising, Jr., Petitioner (1:13-cv-01056-WYD), Pro se, Florence, CO.

For USA, Plaintiff (1:11-cr-00117-WYD): Tonya Shotwell Andrews, LEAD ATTORNEY, Jaime A. Pena, U.S. Attorney's Office-Denver, Denver, CO.

ORDER

Wiley Y. Daniel, Senior United States District Judge.

I. INTRODUCTION

This matter is before the Court on Gerald R. Rising, Jr.'s Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence by a Person in Federal Custody filed April 22, 2013. The Government filed a response to the motion on May 1, 2013, and Mr. Rising filed a Traverse in the nature of a reply on July 22, 2013.[1]

Thereafter, Mr. Rising filed a " Pro Se Motion for Partial Summary Judgment" on August 27, 2013, a " Pro Se Motion for an Evidentiary Hearing on Motion to Vacate, Set Aside or Correct Sentence Pursuant to 28 USC § 2255 by a Person in Federal Custody" on September 24, 2013, and a " Pro Se Motion for Summary Judgment" on February 6, 2014. All of these motions relate to the § 2255 motion. The government filed a response to the summary judgment motions on March 3, 2014, and Mr. Rising file a reply on March 11, 2014, at which time Mr. Rising's motions were fully briefed.

I must construe liberally Mr. Rising's filings because he is not represented by an attorney. See Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972); Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). However, I should not be an advocate for a pro se litigant. See Hall, 935 F.2d at 1110. After reviewing the entire file, I find that an evidentiary hearing is not necessary as each of Mr. Rising's claims are resolvable solely on the basis of the existing record. Hooks v. Workman, 606 F.3d 715, 731 (10th Cir. 2010); see also United States v. Fields, 565 F.3d 290, 298 (5th Cir. 2009) (if, based on the record, a court can conclude as a matter of law that the movant cannot establish the elements necessary to state a valid constitutional claim, an evidentiary hearing is not necessary). For the reasons stated below, Mr. Rising's § 2255 motion and other motions referenced above are denied.

II. FACTUAL AND PROCEDURAL BACKGROUND

Defendant was charged on April 4, 2011, with one count of Mail Fraud, one count of Theft or Embezzlement in Connection with a Health Care Program, eighteen counts of Money Laundering, and Aiding and Abetting. (Indictment, ECF No. 1.) On October 26, 2011, Mr. Rising pleaded guilty to one count of Mail Fraud, one count of Theft or Embezzlement in Connection with a Health Care Program, and one count of Money Laundering. (ECF Nos. 40, 41.)

The Rule 11(c)(1)(A) and (B) Plea Agreement and Statement of Facts Relevant to Sentencing (ECF No. 40) [" Plea Agreement" ] sets forth what the Government's evidence would be against Mr Rising. ( Id. at 8.) The Plea Agreement notes that from about 2003 through about November 2010, Mr. Rising " defrauded individuals, companies, and entities throughout the United States and obtained by means of materially false and fraudulent pretenses, representations, and promises, money and property owned by, or under the custody and control of individuals, companies and entities in connection with the delivery of or payment for medical benefits pursuant to health benefit plans." ( Id. at 9.)

Mr. Rising owned and operated Rural Health Plans Initiative Administration Company [" RHPI" ], " a closely held Colorado Corporation that promoted, sold, and administered health benefit plans and employee welfare plans (herein referred to as 'plans') to entities, including school districts in the States of Colorado, Kansas, and Oklahoma, amongst others." (Plea Agreement at 9.) As part of the plans, Mr. Rising and RHPI represented that they " would retain part of the plan contributions, approximately 20%, for administrative costs, and that the remainder was to be held in a designated trust account to pay claims by covered employees of the particular subscribing entities and to purchase excess loss or stop-loss insurance coverage. . . through established insurance providers like Lloyd's of London and AIG to cover any claims that exceeded $25, 000.00." ( Id.) Mr. Rising also owned, operated and controlled RHPI Captive Insurance Company, LTD [" RHPIC" ], which was an off-shore corporation, incorporated in Anguilla, British West Indies. ( Id. at 10-11.) RHPIC maintained the plan contributions in the trust account after the administrative fees were deducted. ( Id. at 10.) Mr. Rising " created RHPIC to avoid regulation by the Colorado Board of Insurance." ( Id. at 11.)

Mr. Rising promoted the health care benefit plans to his customers by falsely representing to them that the funds paid into their plans would be properly maintained and accounted for in the trust and used to pay the claims of each plan's beneficiaries. (Plea Agreement at 10-11.) They were not. Mr. Rising paid claims using funds deposited by other beneficiaries in other plans, in violation of the trust agreement. ( Id. at 11.) He also falsely represented that reputable insurance companies like Lloyd's of London and AIG would provide stop loss coverage at $25, 000.00 when, in fact, those policies did not provide coverage on claims until they reached approximately $125, 000.00. ( Id. at 11.)

In 2008 and 2009, Mr. Rising " increased his salary in order to siphon monies held by RHPIC for the benefit of plan beneficiaries." (Plea Agreement at 11.) In 2009 and 2010, he " began to kite checks between various bank accounts he controlled for himself, RHPI and RHPIC, in order to create a false impression as to the financial status" of those companies. ( Id.) In addition, between July 2010 and November 2010, Mr. Rising " directed employees to falsely represent to various plan beneficiaries and employers that the claims for health care services were in fact paid when they were not, in hopes of allaying their concerns regarding their respective plans." ( Id.) During that same time period, Mr. Rising also " directed employees to send balance statements to plan employers that falsely represented" their account balances " because such statements were influenced by the issuance of checks that were held at GERALD RISING'S direction, and never sent." ( Id. at 11-12.)

In late 2010, Mr. Rising began to send bills to plan participants for purported healthcare-related payments RHPIC had made on their customer's behalf. (Plea Agreement at 12.) However, RHPIC had not made these payments. ( Id.) Mr. Rising " caused checks and premiums to be mailed by plan employers . . in order to fund the plans." ( Id.)

As noted previously, Mr. Rising pleaded guilty on October 26, 2011, to one count of Mail Fraud, one count of Theft or Embezzlement in Connection with a Health Care Program, and one count of Money Laundering. As part of his plea, he stipulated that the aggregate loss to the victims of his scheme to defraud was over $2.5 million, but less than $7 million. (Plea Agreement at 12.) Mr. Rising also agreed to waive his right to appeal and to collaterally attack the prosecution, conviction, or sentence in a 28 U.S.C. § 2255 motion. ( Id. at 5.) However, this waiver did not prevent Mr. Rising from seeking relief if there was a retroactive change in the guidelines, he was denied effective assistance of counsel, or he had a claim of prosecutorial misconduct. ( Id.)

During the plea hearing, Mr. Rising explained his criminal conduct to the Court. Specifically, he stated that in 2003 his business suffered " " unplanned for catastrophic losses that resulted in" his " business having a financial hole that I had to carry forward." (Plea Hr'g Tr. at 25:22 (Oct. 26, 2011), attached to the Government's response as Attachment A [" Plea Hr'g Tr." ]). Mr. Rising stated he was able to maintain his business by using premium contributions from employer's plans to fund claims from the prior months " [a]nd that was wrong" . ( Id. at 25:23-26:1.) He said he " should have shut the business down immediately and taken my lumps at that point." ( Id. at 26:2-3.) He was able to maintain his business over the years " at a fairly stable level" by " allowing people to believe that the reinsurance mechanism that [he] provided them was insurance and not partially a loan mechanism, and that constituted fraud." ( Id. 26:4-8.)

Mr. Rising admitted that he told his employees to misrepresent to employers and employees that claims had been paid or were going to be paid when they were not. (Plea Hr'g Tr. at 27:5-8.) Mr. Rising further admitted that he provided false reports to his customers that did not accurately reflect the financial status of their plans. Those reports led Mr. Rising's customers to believe " that groups of claims had been paid, and they had not." ( Id. at 27:5-14.) Mr. Rising also admitted increasing his salary and kiting checks between his personal and business accounts, to create the appearance that RHPI was lucrative in order to sell it. ( Id. 26:10-12, 18-23.) Eventually, Mr. Rising stated he could no longer carry the scheme and it " just fell apart" . ( Id. at 26:10-16.)

The Plea Agreement states that " [t]he parties agree that there is no dispute as to the material elements that establish a factual basis for the offense for conviction." (Plea Agreement at 8.) Further, Mr. Rising was asked during the plea hearing whether he had read the " Stipulation of Factual Basis and Facts Relevant to Sentencing" in the Plea Agreement at pages eight through twelve, and he said he had. (Plea Hr'g Tr. at 3:8.) He was then asked, " Do you agree with what it says?", to which he responded " Yes", and affirmatively stated that he did not disagree with any parts of it. ( Id. at 25:9-12.) Finally, he was asked, " Did you engage in the conduct here attributable to you?" ( Id. at 25:13-14.) He responded, " Yes, I did." ( Id. 25:15.)

Pursuant to Rule 11 of the Federal Rule of Criminal Procedure, the Court advised Mr. Rising of his right to plead not guilty and proceed to trial. (Plea Hr'g Tr. at 36:14-19; 38:21-39:2.) The Court told Mr. Rising that he would have the right to an attorney at all stages, and that if he could not afford one that one would be appointed by the Court. Mr. Rising acknowledged that he understood his rights. ( Id. at 36:20-37:1; see also ECF Nos. 40, 41.) Mr. Rising also agreed that no one had coerced, induced, persuaded, or forced him to plead guilty and he had no mental reservations or doubts about entering his plea of guilty. ( Id. at 39:22-25: 40:7-9.) Further, the Court advised him that the decision to plead guilty was voluntary, and asked him, " Do you want to go through with this today? ( Id. at 6:2-3.) Mr. Rising responded " Absolutely." He stated that he was " pleading guilty because I'm guilty of the offenses." ( Id. 40:1-6.) Mr. Rising also responded in the affirmative when asked whether his " decision to plead guilty" was " made after full and careful thought, upon the advice of your attorney, with a full understanding of your rights, the facts and circumstances of the case, and the potential consequences of your guilty plea." ( Id. 41:3-8.)

The Court further verified that Mr. Rising had sufficiently discussed " all aspects" of the case with his attorney Gregory Goldberg. Mr. Rising stated that he had. Mr. Rising said that his attorney's representation had been both effective and competent and he was satisfied with the representation he received. (Plea Hr'g Tr. at 40:10-18; see also ECF Nos. 40, 41.)

Mr. Rising was sentenced on March 30, 2012. At that time, the parties had stipulated to a loss figure of $3.5 million. (Sentencing Hr'g Tr. 14:5-15 (Mar. 30, 2012), attached to the Government's Answer as Attachment B [" Sentencing Hr'g Tr." ]). Based on the presentence report, the probation department requested that the court sentence Mr. Rising to 72 months of incarceration. ( Id. at 11:17-12:1.) However, the government requested a variant sentence of 60 months. This sentence was recommended because Mr. Rising had provided " extraordinary" cooperation. ( Id. at 15:10-25; 16:1-5; 17:4-23; see also Government's Motion Regarding Acceptance of Responsibility, ECF No. 60.)

Explaining Mr. Rising's cooperation, the government stated that Mr. Rising retained his attorney when he realized that the IRS and the Department of Labor were investigating him, and approached the government to cooperate early on. (Sentencing Hr'g Tr. at 16:1-5.) Mr. Rising's cooperation included attempting to determine the restitution amount by going through RHPI's business records. ( Id. at 8:24-9:2.) However, even with " extraordinary efforts", Mr. Rising was unable to figure out the amount of the loss because the business records were in disarray, were massive (70 boxes of financial records, plus computer records), and were " impossible to decipher" because Mr. Rising commingled funds in various accounts. ( Id. at 9:2-14, 13:8-14, 14:6-20; 16:13-20, 18:18-22.) The actual loss was estimated to be between two to seven million, with the probation office indicating that it was most likely the high end of that range--" 7 million, maybe even more." ( Id. 9:6-7; 14:10-19.) The government further informed the Court that Mr. Rising had, as part of his plea agreement, met with the victims. ( Id. at 17:4-21.)

After hearing the sentencing recommendations and statements from the probation department, the prosecutor, Mr. Rising, and Mr. Rising's attorney, Mr. Rising was sentenced to 66 months. ( Id. at 49:6-11.) One year later, Mr. Rising filed his 28 U.S.C. § 2255 motion challenging his conviction and sentence. I discuss the facts Mr. Rising relies on in support of his motion in the context of his claims. I note that his " Pro Se Memorandum of Arguments & Authorities in Support of Motion to Vacate, Set Aside or Correct Sentence Pursuant to 28 U.S.C. § 2255 by a Person in Federal Custody" [" Memorandum" ] contains a Verification under penalty of perjury that the statements are within Mr. Rising's " personal knowledge, and are true and correct, based upon my knowledge, information and belief." (Memorandum at 24.)

This is Mr. Rising's first § 2255 motion. He has met the procedural requirements of § 2255 for this Court to rule on the issues he raises in his motion. First, Mr. Rising has not pursued any other federal remedies, including any prior post-conviction motions. See Rule 5(b) of the Rules Governing Section 2255 Cases. Second, his motion was submitted within the one-year statute of limitations set forth under 28 U.S.C. § 2255(f)(1).

III. ANALYSIS

A. The § 2255 Motion

1. Ineffective Assistance of Counsel Claims

a. Claim One

Mr. Rising argues in Claim One that his counsel Mr. Goldberg rendered ineffective assistance of counsel by failing to note and argue meritorious defenses to his guilt, meritorious defenses that would have allegedly been outcome determinative. He also asserts that his counsel never intended to assert or advocate his right to trial, but determined that the case would be disposed by plea of guilty in accordance with an alleged " business model" of counsel's firm. In that regard, he asserts that in a meeting with counsel, he expressed his desire for a jury trial and was advised by one of defense counsel's associates that this would not fit the business model. ( Id. at 13.) Mr. Rising argues that his right to a jury trial was emasculated by the fact his counsel never intended to proceed to trial, and that but for counsel's ineffectiveness, he would never have pleaded guilty. ( See Traverse to the United States' Answer, ECF No. 97-1 [Traverse" ], at 10.)

It is further argued by Mr. Rising that his counsel did not conduct a single interview or conduct any investigation in preparation for trial, and did not prepare any pretrial motions or other trial documents, despite the fact that trial had been set. This means, according to Mr. Rising, that his counsel knew that the case would not proceed to trial. Mr. Rising also asserts that his counsel lied about and/or refused to allow him to see the grand jury transcripts which were disclosed by the Court. ( See Order of April 19, 2011, ECF No. 13.) He further suggests collusion between AUSA Jaime Pena and his counsel in regard to the transcripts and the guilty plea.

Finally, Mr. Rising argues that the court already found his allegations, which have not been refuted by the government or defense counsel, to be sufficient to warrant the granting of habeas relief. (Traverse at 10.) He asserts that if his sworn statement and exhibits were insufficient to establish ineffective assistance, the court would have dismissed the § 2255 motion sua sponte under the Prison Litigation Reform Act. Instead, it ordered the government to file an answer.

I first reject Mr. Rising's argument that the Court's failure to dismiss the § 2255 motion on preliminary review and its Order of April 25, 2013, requiring the government to file an answer, mean that the Court has already found Mr. Rising's allegations sufficient to warrant habeas relief. A § 2255 motion can only be dismissed without notice to the United States and a hearing if " the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief." 28 U.S.C. § 2255(b) (emphasis added). As explained by the Ninth Circuit, " a habeas court reviewing a petition under Rule 4 reviews only to see if it plainly appears that petitioner is not entitled to relief." Calderon v. U.S. Dist. Court for the N. Dist. of Cal., 98 F.3d 1102, 1109 (9th Cir. 1996) (emphasis in original). Thus, " Rule 4 is intended to screen out plainly frivolous appeals." Id. Summary dismissal under Rule 4 is appropriate only when the allegations are " 'palpably incredible'" or " 'patently frivolous or false'", or when the allegations are not " so 'vague or conclusory' . . . as to warrant dismissal for that reason alone." Blackledge v. Allison, 431 U.S. 63, 75-76, 97 S.Ct. 1621, 52 L.Ed.2d 136 (1977) (quotations omitted).

Thus, the fact that Mr. Rising's motion was not summarily dismissed under Rule 4 means simply that his claims were found not to be patently frivolous or incredible. This has no bearing, however, on whether his claims actually have merit or whether the facts he alleges are actually sufficient to support habeas relief. Moreover, while Mr. Rising points repeatedly to the government's failure to provide affidavits or evidence to counter the facts he has presented, the government is not required to support its response with such documents. See Flores v. United States, No. 94-3457, 1996 WL 12583, at *4 n. 5 (7th Cir. 1996) (" The § 2255 rules state merely that the government's answer 'shall respond to the allegations of the motion, ' Rule 5, . . .; the rules nowhere contemplate that the government support its response to the allegations with counter-affidavits or any other specific documents"). In this case, the government relies on the record of this case, including the plea agreement, plea hearing, and sentencing hearing, to support its arguments. Thus, I turn to the merits of Mr. Rising's ineffective assistance of counsel argument, which must be addressed under the test set forth in Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). See Burnett v. United States, No. 09-30032-GPM, 2013 WL 6083422, at *3 (S.D. Ill. Nov. 19, 2013) (" If a § 2255 motion claiming ineffective assistance of counsel survives preliminary review and is considered on the merits, the court evaluates the claim" under Strickland .).

The " Sixth Amendment guarantees a defendant the right to have counsel present at all critical stages of the criminal proceedings, " which includes the entry of a plea of guilty. Montejo v. Louisiana, 556 U.S. 778, 786, 129 S.Ct. 2079, 173 L.Ed.2d 955 (2009) (citation and quotation omitted); see also Argersinger v. Hamlin, 407 U.S. 25, 34, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972) (when a defendant pleads guilty, " [c]ounsel is needed so that the accused may know precisely what he is doing, so that he is fully aware of the prospect of going to jail or prison, and so that he is treated fairly by the prosecution."). A claim of ineffective assistance of counsel in negotiating and advising a defendant to plead guilty is properly raised in a collateral proceeding. See United States v. Ibarra-Coronel, 517 F.3d 1218, 1222 (10th Cir. 2008) (citing United States v. Galloway, 56 F.3d 1239, 1242 (10th Cir. 1995)); United States v. Gutierrez-Vasquez, 373 F.App'x 860, 862-63 (10th Cir. 2010).

The Supreme Court has established a two-prong test to review ineffective assistance of counsel claims. The movant must demonstrate both that counsel's performance fell below an objective standard of reasonableness and that counsel's deficient performance was prejudicial. Strickland, 466 U.S. at 687. Courts are free to address these prongs in any order. Byrd v. Workman, 645 F.3d 1159, 1168 (10th Cir. 2011). This standard applies to claims of ineffective assistance of counsel in the plea bargain context. Missouri v. Frye, 132 S.Ct. 1399, 1405, 182 L.Ed.2d 379 (2012); United States v. Angelos, 417 F.App'x 786, 789 (10th Cir. 2011).

With respect to the first prong, requiring Mr. Rising to demonstrate that his counsel's representation was constitutionally deficient by falling " below an objective standard of reasonableness", this standard is " highly demanding" for the 2255 movant. Kimmelman v. Morrison, 477 U.S. 365, 382, 106 S.Ct. 2574, 91 L.Ed.2d 305 (1986). He must show " that counsel's representation was unreasonable under prevailing professional norms and that the challenged action was not sound strategy." Id. at 381 (citation omitted). The reasonableness is evaluated from the perspective of the attorney at the time of the claimed error. Id. " For counsel's actions to rise to the level of constitutional ineffectiveness, his strategic decisions must have been 'completely unreasonable, not merely wrong, so that [they] bear no relationship to a possible defense strategy.'" Fox v. Ward, 200 F.3d 1286, 1296 (10th Cir. 2000) (quotation and internal quotation marks omitted). " Judicial scrutiny of counsel's performance must be highly deferential." Strickland, 466 U.S. at 689. There is a " strong presumption" that counsel's performance falls within the range of " reasonable professional assistance." Id.; see also Byrd, 645 F.3d at 1168 (" '[c]ounsel is strongly presumed to have rendered adequate assistance and made all significant decisions in the exercise of reasonable professional judgment . . . .'") (quotation omitted).

In order to demonstrate the second prong, Mr. Rising must establish " a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Strickland, 466 U.S. at 694. In the context of a guilty plea, he must show " a reasonable probability that, but for counsel's errors, he would not have pleaded guilty and would have insisted on going to trial.'" Frye, 132 S.Ct. at 1409 (quoting Hill v. Lockhart, 474 U.S. 52, 59, 106 S.Ct. 366, 88 L.Ed.2d 203 (1985)). Reasonable probability " is a probability sufficient to undermine confidence in the outcome." Strickland, 466 U.S. at 694. If the movant fails to satisfy either prong of the two-part Strickland test, the ineffective-assistance-of-counsel claims must be dismissed. Id. at 697.

i. Counsel's Purported Conflict of Interest

Turning to Mr. Rising's claim, I first address his argument that his counsel was ineffective because he purportedly followed his firm's business model that required a plea of guilty instead of taking the case to trial. As the government notes, Mr. Rising attempts to establish the existence of a conflict of interest on this issue. The right to effective representation under the Sixth Amendment " includes the right to representation that is free from conflicts of interests." Gardner v. Galetka, 568 F.3d 862, 886 (10th Cir. 2009). When a conflict of interest is raised for the first time on a collateral attack, the movant must demonstrate that an actual conflict of interest adversely affected his lawyer's performance. Cuyler v. Sullivan, 446 U.S. 335, 347-48, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980). If such a conflict of interest is established, the prejudice prong under Strickland is presumed. Gardner, 568 F.3d at 886.

" An actual conflict exists only if counsel was 'forced to make choices advancing ... interests to the detriment of his client.'" Workman v. Mullin, 342 F.3d 1100, 1107 (10th Cir. 2003) (quotation omitted). " '[T]he petitioner must be able to point to specific instances in the record' that suggest his interests were damaged for the benefit of another party." Id. (quotation omitted). " [T]he mere possibility of a conflict is insufficient . .., at least when the conflict was not brought to the trial court's attention." Id.; see also Mickens v. Taylor, 535 U.S. 162, 171, 122 S.Ct. 1237, 152 L.Ed.2d 291 (2002) (" a mere theoretical division of loyalties" is not sufficient).

I first find that Mr. Rising has raised merely the possibility that his counsel made choices pursuant to a business model, not that he actually did. The fact that Mr. Rising was purportedly told that a jury trial would not fit the firm's business model does not mean that counsel was actually bound by or operating under the model in this case. Indeed, the issue of a business model was raised by an associate of his defense counsel Mr. Goldberg, not Mr. Goldberg himself, and Mr. Rising has alleged no facts to show that his counsel ever endorsed this in any manner. Indeed, defense counsel apparently contemplated the possibility of going to trial, as he e-mailed Mr. Rising a budget estimating how much it would cost if the case went to trial. ( See Exs. 1.3 and 1.4 to Mr. Rising's § 2255 Motion and Memorandum, ECF No. 80.) Mr. Rising is attempting to create a conflict of interest " from innuendos, speculation and suggestions", which is not sufficient to meet his burden. See Barrett v. United States, No. 09-CIV-105-JHP, 2012 WL 3542609, at *70 (E.D. Okla. Aug. 16, 2012).

Moreover, even if I accept Mr. Rising's assertion that defense counsel was actually operating under the auspices of the business model, he has not shown an actual conflict of interest. This is because he has not shown that his attorney was " forced to make choices advancing interests to the detriment of his client." Workman, 362 F.3d at 1107. Indeed, Mr. Rising does not identify any specific instances where his attorney Mr. Goldberg was forced to make, or made, choices to Mr. Rising's detriment.

Mr. Rising's other proffered evidence of a conflict of interest is also untenable because it is directly contrary to the factual record. Thus, he argues that his " counsel never estimated the cost of the trial defense" and established a flat fee insufficient to pay for a trial. (Memorandum at 6.) He argues that this is evidence of his counsel's loyalty to the " business model" . ( Id.) However, Mr. Rising's own Exhibits 1.3 and 1.4 attached to the § 2255 motion disprove his claim. Again, this e-mail clearly shows that his attorney sent him a budgetary estimation, including the approximate cost of trial based on an hourly rate. This estimate was sent on March 17, 2011, prior to the indictment on April 4, 2011. Furthermore, Mr. Rising's own e-mail states, " I am very pleased with the thoughtful advice I am getting as well as the respect for economy whenever possible." (Exs. 1.1-1.2 attached to § 2255 Motion and Memorandum.)

Lastly on the issue of a conflict, Mr. Rising argues that his attorney and the prosecutor colluded in order to obtain a plea of guilty. While most of Mr. Rising's arguments regarding collusion are merely speculative, he asserts that the proof of collusion is evidenced by the government's release of grand jury materials to his attorney. I reject this argument. The government routinely files motions to disclose grand jury transcripts in criminal cases, and this is not evidence of collusion. Moreover, the disclosure of grand jury materials to defense counsel is not an action adverse to Mr. Rising, nor does it show that his attorney was forced to make choices to Mr. Rising's detriment. Instead, the fact that defense counsel obtained a copy of the grand jury materials would actually have been beneficial to Mr. Rising so that his counsel could establish possible defenses, provide advice, and develop theories for trial.

In short, Mr. Rising fails to prove any evidence that his attorney's interests were adverse to his. In fact, the record establishes that the exact opposite is true. " [H]is interests appear not to have been damaged, but instead his interest may actually have been furthered by his attorney's actions." Workman, 342 F.3d at 1107. Mr. Rising obtained a significant benefit in connection with his change of plea, as he received a below guideline range sentence based on his " extraordinary" cooperation and plea of guilty. (Sentencing Hr'g Tr. 17:22-23; 49:6-11.) Therefore, Mr. Rising has not shown an actual conflict of interest.

ii. Counsel's Failure to Investigate, Argue Potential Defenses, or Prepare for Trial

Mr. Rising also argues in Claim One that his counsel's failure to investigate or prepare for trial constituted ineffective assistance of counsel, resulting in a violation of his Sixth Amendment right to trial. He cites numerous alleged deficiencies in this regard, such as the fact that his counsel failed to obtain a forensic accounting, did not properly investigate the RHPI contracts, and failed to interview witnesses. He asserts that a forensic accountant would have shown that he was maintaining a business that was " lawful, albeit, unsuccessful" (Memorandum at 9), and provides his own accounting of RHPI's losses. (Exs. 5.1-5.3 to § 2255 Motion and Memorandum.) He also argues that RHPI's contracts were legal and attaches Exhibits 3-5 to his § 2255 motion as evidence of their legality.

None of Mr. Rising's arguments or exhibits can overcome the presumption that the representation by his counsel was reasonable and that counsel made valid strategic or tactical decisions when he did not investigate the contracts or obtain a forensic accountant. Fox, 200 F.3d at 1296. At the time of counsel's decision, a forensic accountant may have been determined to be futile. Indeed, at the sentencing hearing, the probation department and the government indicated that even with " extraordinary efforts", including the help of his own accountant, Mr. Rising's business records were " impossible to decipher" because of the commingling of funds. ( Id. at 9:2-14, 13:8-14, 16:16-20, 18:18-22.) Moreover, hiring a forensic accountant could have precluded the government from offering a favorable plea agreement due to a delay in resolution. This was a strategic decision, entitled to a " heavy measure of deference." Strickland, 466 U.S. at 691.

Further, Mr. Rising's argument is absurd when compared to his sworn statements and the record before the Court. See Blackledge, 431 U.S. at 74 (" contentions that in the face of the record are wholly incredible" should be dismissed). Mr. Rising admitted to kiting checks, siphoning funds, and defrauding hundreds of individuals. (Plea Hr'g Tr. 25:3-15.) By his own admissions, Mr. Rising proves that a forensic accountant would have been futile. Blackledge, 431 U.S. at 74 (" Solemn declarations in open court carry a strong presumption of verity.") The fact that Mr. Rising relies on a forensic accounting of his businesses which he states indicates no fraud as well as evidence that RHPI's contract was deemed valid does not negate Mr. Rising's culpability for his own criminal acts or his admissions of those acts made in the plea hearing. Moreover, the forensic accounting documents (Exs. 5.1 and 5.2 to § 2255 Motion and Memorandum) appear to have been prepared by Mr. Rising, not an expert accountant, and are not properly supported and self-serving.

I also find that Mr. Rising has not shown that he would have insisted on a trial if counsel had done a more thorough investigation. See Miller v. Champion, 262 F.3d 1066, 1072 (10th Cir. 2001) (" petitioner's 'mere allegation' that he would have insisted on trial but for his counsel's errors, although necessary, is ultimately insufficient to entitle him to relief"); Gordy v. Hargett, 37 F.App'x 437, 439 (10th Cir. 2002) (unpublished) (defendant's claim failed because " he has made no showing of what an investigation would have revealed and how that would have affected his decision to plead guilty"). While he cites evidence about the purported legality of RHPI's business, he has not shown in any manner that if this evidence had been elicited by defense counsel, he would have foregone the plea of guilty and insisted on a trial. Ultimately, a movant's mere speculation, in this case that he would have gone to trial if his counsel had adequately prepared for trial, will not suffice to establish a reasonable probability of a different outcome under the prejudice prong. See United States v. Boone, 62 F.3d 323, 327 (10th Cir. 1995).

I also note that the court looks " to the factual circumstances surrounding the plea to determine whether the petitioner would have proceeded to trial." Miller, 262 F.3d at 1072. Here, the factual circumstances surrounding the plea as discussed in Section II, supra, show that Mr. Rising believed he had committed fraud and that he was guilty of the conduct in the plea agreement that supported the offenses to which he pled guilty. This indicates that Mr. Rising would not have gone to trial.

This conclusion is bolstered by the fact that the plea agreement Mr. Rising's counsel negotiated substantially reduced his client's potential sentence. See United States v. Walters, 492 F.App'x 900, 903 (10th Cir. 2012). Mr. Rising faced one charge of Mail Fraud, one count of Theft or Embezzlement in Connection with a Health Care Program, and 18 counts of Money Laundering, as well as charges for Aiding and Abetting. The maximum sentence for mail fraud is 20 years imprisonment. (Plea Agreement at 7.) The maximum sentence for money laundering as well as theft or embezzlement in connection with a health care program is 10 years. ( Id.) The effect of the plea bargain reduced Mr. Rising's maximum penalty to just a little over five years. Mr. Rising " does not allege different counsel could have obtained a better deal, nor do [I] find it likely [Mr. Rising] would have chosen to proceed to trial had he fully understood the sentence he faced." Walters, 492 F.App'x at 903. I find that " the fact that the plea agreement his counsel arranged helped him avoid a much longer prison sentence makes it very unlikely he would have rejected the agreement and proceeded to trial but for his counsel's deficient performance." Id. at 903-04.

Likewise, Mr. Rising's argument that his counsel failed to argue certain defenses does not establish counsel's ineffective assistance. Mr. Rising argues that he was denied effective assistance because his attorney should have defended his case based on the validity of RHPI's contract with its customers and the " parole evidence" rule, the fact that Mr. Rising loaned more of his personal money to his businesses than the amounts he is purported to have embezzled, and the merger issue related to the eighteen counts of money laundering. (Memorandum at 9, 11-13.) However, under the first prong of Strickland, it is not deficient performance to fail to raise a meritless issue. See Miller v. Mullin, 354 F.3d 1288, 1298 (10th Cir. 2004). The defenses Mr. Rising argues should have been raised by his counsel are legally meritless.

First, as to the merger issue, Mr. Rising argues that the monies taken from his " business are not alleged to be 'profits' of the business, but rather proceeds of the business that were misapplied by Rising, to his own benefit." (Memorandum at 12.) He asserts that there is a " 'merger problem', ie., the Supreme Court will not permit proceeds of the underlying criminal activity to be used to support a money laundering charge." ( Id.) Mr. Rising is correct that the Supreme Court has held that when the government alleges a defendant laundered the proceeds of an illegal gambling operation, the government must prove that the laundering transactions involved the profits, rather than the gross receipts of that operation. United States v. Santos, 553 U.S. 507, 514, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008).

However, Santos was a plurality opinion and the Tenth Circuit noted that it " has caused considerable disagreement and confusion among the circuit courts of appeal." United States v. Thornburgh, 645 F.3d 1197, 1208 (10th Cir. 2011). Accordingly, the Tenth Circuit limited Santos ' application to the particular facts of that case just a month after Mr. Rising was indicted and months before he pleaded guilty. Id. at 1209 (determining that " 'proceeds' means 'profits' for the purpose of the money laundering statute only where an illegal gambling operation is involved") (emphasis in original). Since this case does not involve an illegal gambling operation, counsel was under no obligation to raise a Santos merger issue that would have failed on the merits.

Second, the use of evidence regarding the purported validity of RHPI's contract or the " parole evidence" defense to Mr. Rising's criminal conduct would also be deemed meritless. The parol-evidence rule precludes the admission of testimony and prior written agreements to alter or explain the terms of a fully integrated written contract. 29A Am. Jur. 2d Evidence § 1104; see also Cummings v. FedEx Ground Package Sys., Inc., 404 F.3d 1258, 1263 (10th Cir. 2005). Mr. Rising's criminal conduct was not a contract dispute, but was based on his own misrepresentations to his customers and the subsequent theft and embezzlement of their plan contributions. RHPI's contract and the legal exclusion of parole evidence is irrelevant to the criminal conduct alleged.[2]

Finally, Mr. Rising asserts that the embezzlement charges are not supported as the evidence he attaches to his motion shows that he loaned more of his personal money to his businesses than they amounts he purportedly embezzled. This argument also would have failed on the merits. 18 U.S.C. § 669, the embezzlement statute to which Mr. Rising pled guilty, " [b]y its plain language, . . . prohibits misappropriating funds from a plan or contract that provides any medical benefit to any individual." United States v. Graf, 610 F.3d 1148, 1166 (9th Cir. 2010). Here, Mr. Rising admitted that he used premium contributions from employer's plans to fund claims from the prior months. (Plea Hr'g Tr. at 25:23-26:1.) The fact that Mr. Rising may have loaned money to his businesses is not a defense to the fact that he misappropriated funds from his clients' plans in order to fund other claims.

Based upon the foregoing, I find no merit to Mr. Rising's argument that his counsel's failure to investigate or prepare for trial or argue meritorious defenses constituted ineffective assistance of counsel.

iii. Counsel's Advice to Cooperate and Plead Guilty

Finally, I find that defense counsel was not ineffective for advising Mr. Rising to plead guilty and to cooperate. Mr. Rising fails to explain how pleading guilty was unreasonable advice under prevailing professional norms or how he suffered prejudice for doing so at the advice of counsel. Strickland, 466 U.S. at 687-88, 694. He has not alleged that, absent his counsel's alleged error (counseling him to plead guilty and cooperate), he would have pleaded not guilty and demanded a trial. Indeed, Mr. Rising states that his claim " has nothing to do with advising/convincing/or in any way orchestrating the plea of guilty." (Traverse at 20.) He merely faults his attorney for not defending against and investigating the charges and thus " emasculating" his rights to a jury trial. ( Id.) This failure to establish prejudice is fatal to Rising's claim of ineffective assistance of counsel.

In addition, advising Mr. Rising to plead guilty and cooperate with the government in order to receive a favorable sentence does not fall below an objective standard of reasonableness under the first prong of Strickland either. " A guilty plea entered upon the advice of counsel is invalid if the plea was coerced, . . . or if the advice of defendant's counsel was not within the range of competence demanded of attorneys in criminal cases." United States v. Carr, 80 F.3d 413, 416 (10th Cir. 1996) (internal citation omitted); see also United States v. Cronic, 466 U.S. 648, 657 n. 19, 104 S.Ct. 2039, 80 L.Ed.2d 657 (1984) (" even when there is a bona fide defense, counsel may still advise his client to plead guilty if that advice falls within the range of reasonable competence under the circumstances"). However, " [i]n the context of plea agreements, 'bad advice alone is insufficient to prove the deficient performance required for constitutional ineffective assistance of counsel." United States v. Patterson, 525 F.App'x 681, 685 (10th Cir. 2013) (unpublished) (quotation omitted).

In this case, Mr. Rising does not assert or argue that his plea was coerced or involuntary. Further, I find under the circumstances in the case that counsel's advice to plead guilty was objectively reasonable under Strickland . It is not outside professional norms to provide advice to plead guilty when there is no defense, and even if there is a valid defense, the advice to plead guilty may be competent under the circumstances. See Cronic, 466 U.S. at 657 n. 19 (citations omitted). Mr. Rising does not state why advising him to plead guilty was unreasonable, or how the advice fell outside the parameters of the professional norms. At the time, based on the investigation and Mr. Rising's own opinion that he committed fraud after the scheme " just fell apart, " it was reasonable for counsel to advise Mr. Rising to cooperate and plead guilty to obtain a potentially favorable sentence. (Plea Hr'g Tr. 26:10-23.)

Indeed, the result of Rising's " extraordinary" cooperation (Sentencing Hr'g Tr. 17:22-23) and plea of guilty allowed him to obtain a variant sentence (66 months) below the advisory guideline range for imprisonment of 87 to 108 months. ( Id. at 48:16-49:11; see also ECF Nos. 57, 60.) The prosecutor noted at the sentencing hearing in arguing for a sentence below the advisory guideline range that he was " in the unenviable position of defending a sentence that, frankly, benefits the defendant in this case." (Sentencing Hr'g Tr. at 15:10-12.) Further, all other counts against Mr. Rising were dismissed as a result of the plea of guilty. (ECF No. 62.) Clearly, proceeding with proffer sessions and cooperation was sound strategic advice under those circumstances. Furthermore, there is no evidence in the record that the government would have offered a plea without Rising's cooperation. Therefore, it cannot be said that counsel's advice was objectively unreasonable.

Mr. Rising's claim is also wholly contrary to his statements under oath at the plea hearing. As noted earlier, " [s]olemn declarations in open court carry a strong presumption of verity." Blackledge, 431 U.S. at 74. " The subsequent presentation of conclusory allegations unsupported by specifics is subject to summary dismissal, as are contentions that in the face of the record are wholly incredible." Id. Mr. Rising's claim now contradicts his sworn statements and his plea agreement. At the change of plea hearing, Rising stated that he read and understood the terms of his plea agreement and that he wanted to plead guilty. He further explained to the Court the criminal conduct that supported his plea (Plea Hr'g Tr. 25:3-25; 26:1-23; 27:5-14), and stated that he was pleading guilty because he was guilty of the offenses. ( Id. 40:1-6.) Mr. Rising answered " yes" when asked whether he was satisfied with his counsel's representation of him. ( Id. at 40:13-15). Further, he answered " yes" when asked whether he believed the representation was both effective and competent. ( Id. at 40:16-18.) Mr. Rising's admissions under oath were his, not his counsel's. Mr. Rising cannot show, nor does any evidence exist to prove, that his counsel's performance in advising Rising to plead guilty or cooperate was deficient under the standards articulated in Strickland .

Based upon the foregoing, I find that Mr. Rising has not met his burden of demonstrating ineffective assistance of counsel as to Claim One.

b. Claim Three

Mr. Rising's third claim also asserts an ineffective assistance of counsel argument, but in relation to his sentencing. He asserts that this ineffective assistance resulted in an excessive sentence being imposed and that counsel failed to perfect appealable error. In support of this claim, Mr. Rising cites the following:

Rising pleaded guilty to three crimes, and at the plea the total monetary value of the crimes to which he pleaded guilty was $27, 000. However, from plea to sentencing AUSA Pena enhanced and defense counsel permitted enhancement, of Rising's sentence based upon a monetary value of $3.5 million. That amount was never admitted by Rising, nor was AUSA capable of proving that value beyond a reasonable doubt, and in fact, AUSA never made an effort to prove that value by the requisite burden of proof. Rising's sentence violated APPRENDI v NJ, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 [2000], BLAKELY v WASHINGTON, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 [2004], BOOKER v US, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621[2005], as well as, SOUTHERN UNION v US, U.S., 132 S.Ct. 2344, 183 L.Ed.2d 318, 91 CrL. 415 [2012]. . . .

(2255 Motion at 8.)

As the government notes, this claim is predicated on an incorrect assumption. Mr. Rising argues that the stipulated $3.5 million dollars was the amount he profited from the scheme to defraud (Memorandum at 17); however, the $3.5 million figure was the loss determination relevant to the victims. His reliance on Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000) and its progeny is misplaced. The cases relied on by Mr. Rising " prohibit judicial factfinding that increases maximum criminal 'sentence[s], ' 'penalties, ' or 'punishment[s]'" . S. Union Co. v. United States, 132 S.Ct. 2344, 2351, 183 L.Ed.2d 318 (2012) (quoting Blakely, 542 U.S. at 304; Apprendi, 530 U.S. at 490; and Ring v. Arizona, 536 U.S. 584, 589, 122 S.Ct. 2428, 153 L.Ed.2d 556 (2002)). In this case the $3.5 million dollar loss amount was a stipulation between the parties, not a fact determined by the Court. The cases Mr. Rising cites do not apply where the sentence is based upon facts admitted or stipulated to by the parties. See United States v. Lowe, 148 F.App'x 715, 717 (10th Cir. 2005); United States v. Stearns, 387 F.3d 104, 107 (1st Cir. 2004); see also Kim v. United States, No. 05-3407, 2006 WL 891173, at *2 (D.N.J. April 4, 2006) (" by stipulating to the facts that led to the Court's guideline calculation [including the loss amount], petitioner waived any right she might have had to a jury determination of the issue").

Further, although Mr. Rising attempts to articulate his claim as an ineffective assistance of counsel claim, it is not. He is essentially arguing that his sentence is excessive. I find that this argument must be dismissed based on his waiver of his right to collaterally attack his sentence. (ECF No. 40, p. 5.) Mr. Rising's claim is precluded from review based on the appellate waiver if: (1) the claim falls within the scope of the waiver of appellate rights; (2) the defendant knowingly and voluntarily waived his appellate rights; and (3) enforcing the waiver would not result in a miscarriage of justice. United States v. Hahn, 359 F.3d 1315, 1325 (10th Cir. 2004).

Under the first Hahn factor, Mr. Rising's excessive sentence argument falls within the scope of the waiver. In fact, he specifically waived " his right to challenge [the] . . . sentence and/or the manner in which it was determined in any collateral attack." (ECF No. 40, p. 5.)

Under the second factor, Mr. Rising bears the burden to establish that he did not understand the waiver provision. United States v. Cudjoe, 634 F.3d 1163, 1166 (10th Cir. 2011). He has not alleged this. Without any allegation that he did not understand the waiver provision in his Plea Agreement, Mr. Rising cannot overcome his burden to establish that the waiver was not made knowingly and voluntarily. In fact, the written Plea Agreement and his plea hearing statements establish that Mr. Rising waived his appellate rights knowingly and voluntarily. The appellate waiver was discussed in detail by the Court at the plea hearing, and Mr. Rising was asked about and explained what his understanding of the benefit he received from the waiver. (Plea Hr'g Tr. 16:6-21.) His counsel also explained the benefit from the waiver. ( Id. at 18:5-20:1.) Further, the Court asked if there were any concerns as to whether Mr. Rising entered the agreement with the appellate waiver knowingly and voluntarily or whether the waiver would result in a miscarriage of justice. ( Id. 22:5-19.) Defense counsel indicated that he and client did not have any such concerns. ( Id. 22:21.) The appellate waiver was only approved after this colloquy. ( Id. 22:22-24.) Finally, the Court advised Mr. Rising that the appellate waiver would limit the right to appeal, which Mr. Rising stated he understood. ( Id. 39: 3-12.) Under these circumstances, I find that Mr. Rising knowingly and voluntarily waived his appellate rights.

Lastly, I find that enforcing the waiver provision in this case will not result in a miscarriage of justice under the third Hahn prong. The Tenth Circuit explained that " waivers are subject to certain exceptions, including [1] where the district court relied on an impermissible factor such as race, [2] where ineffective assistance of counsel in connection with the negotiation of the waiver renders the waiver invalid, [3] where the sentence exceeds the statutory maximum, or [4] where the waiver is otherwise unlawful, " meaning it seriously affects " the fairness, integrity or public reputation of judicial proceedings." Hahn, 359 F.3d at 1327 (10th Cir. 2004). Enforcement of a waiver provision will result in a miscarriage of justice when one of these exceptions is established. Id. Mr. Rising does not argue, nor is there anything in the record to indicate, that any of the exceptions set forth in Hahn are present in this case. Therefore, I find that Mr. Rising's claim of an excessive sentence is barred by the appellate waiver.

Nevertheless, to the extent the claim can be interpreted as an ineffective assistance claim for failing to dispute the stipulated loss amount, once again, Mr. Rising fails to establish the prejudice prong. He has not articulated that, but for counsel's objection to the loss amount, he would have declined the offer to plead guilty and proceeded to trial. In fact, Mr. Rising merely argues that he " is entitled to a re-sentencing." (Memorandum at 18.) Thus, he has not established prejudice.

2. Prosecutorial Misconduct (Claim Two)

Mr. Rising also asserts that the prosecutor was guilty of prosecutorial misconduct that affected the fairness of the proceedings. He asserts in that regard that the prosecutor " actively suppressed exculpatory evidence, not from Rising as the grand jury materials were, incredibly, obtained and made available to Rising's counsel [unknown to Rising until after he was sentenced], but from grand jury itself." (§ 2255 Mot. at 6.) He further asserts:

In suppressing this exculpatory evidence AUSA Pena argued for an indictment on prosecution theories that would have been negated by the materials suppressed from the grand jury. The actions of AUSA Pena denied Rising his right to Grand Jury indictment pursuant to Amend V, U.S. Const., as well as, significantly prejudiced Rising's right to grand jury indictment. . . .AUSA Pena's actions constituted a pattern of abuse, calculated to deny Rising a significant constitutional right, and proven by the prosecution theory presented to the grand jury to obtain a true bill indictment, a theory that would have been negated by the materials suppressed from the grand jury's deliberations.

( Id.)

I agree with the government that Mr. Rising is precluded from asserting a prosecutorial misconduct claim antecedent to his voluntary and intelligent plea of guilty. The Supreme Court has stated that " 'a voluntary and intelligent plea of guilty made by an accused person, who has been advised by competent counsel, may not be collaterally attacked.'" Bousley v. United States, 523 U.S. 614, 621, 118 S.Ct. 1604, 140 L.Ed.2d 828 (1998) (quoting Mabry v. Johnson, 467 U.S. 504, 508, 104 S.Ct. 2543, 81 L.Ed.2d 437 (1984)). The only exceptions are " due process claims for vindictive prosecution and double jeopardy claims that are evident from the face of the indictment." United States v. De Vaughn, 694 F.3d 1141, 1146 (10th Cir. 2012).

Thus, a guilty plea precludes inquiry into the merits of pre-plea defenses. See Tollett v. Henderson, 411 U.S. 258, 266, 93 S.Ct. 1602, 36 L.Ed.2d 235 (1973). As stated in Tollett :

a guilty plea represents a break in the chain of events which has preceded it in the criminal process. When a criminal defendant has solemnly admitted in open court that he is in fact guilty of the offense with which he is charged, he may not thereafter raise independent claims related to the deprivation of constitutional rights that occurred prior to the entry of the guilty plea.

Id. at 267.

Here, Mr. Rising is not challenging his plea of guilty as coerced, nor is he challenging that the prosecutor somehow subverted the voluntariness or intelligence of his plea. His challenge relates to the fact that exculpatory evidence was not presented to the grand jury and/or that the prosecutor colluded with his counsel to obtain a guilty plea rather than take the case to trial. These challenged are waived by Mr. Rising's plea of guilty on October 26, 2011.

Furthermore, Mr. Rising is also precluded from making this argument as he failed to directly appeal this issue. A collateral attack is not a substitute for appellate review for claims that should have been brought on direct appeal, but were not. See United States v. Magleby, 420 F.3d 1136, 1139 (10th Cir. 2005). If a movant fails to bring a claim on direct appeal, he is procedurally barred from bringing that claim collaterally unless he can show " good cause for failing to raise the claim earlier, and that the court's failure to consider the claim would result in actual prejudice" or that the court's " failure to consider the . . . claim[ ] will result in a fundamental miscarriage of justice." United States v. Cervini, 379 F.3d 987, 990 (10th Cir. 2004). Mr. Rising has not established nor articulated good cause for failing to bring the prosecutorial misconduct challenge on direct appeal, nor has he shown that a fundamental miscarriage of justice will result if this claim is not addressed. See Angelos v. United States, No. 02-CR-708-PGC, 2008 WL 5156602, at *8 (D. Utah 2008) (Angelos' failure to assert his claim for prosecutorial misconduct on direct appeal was procedurally defaulted when " [a]ll of the necessary factual and legal arguments were available to him" and he did not show cause excusing the procedural default of his claims). Thus, this claim is procedurally barred.

Even if Mr. Rising is not precluded from bringing this claim on collateral review, his arguments regarding collusion regarding the guilty plea are speculative and unsupported. Indeed, they are directly contrary to Mr. Rising's representations at the plea hearing where he stated his plea was voluntary and that he wanted to plead guilty because he was guilty of the conduct at issue in the offenses charged.

Further, his argument that the prosecutor suppressed evidence from the grand jury is foreclosed by the Supreme Court's decision in United States v. Williams, 504 U.S. 36, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992). In Williams, the Court held that the government does not have to present exculpatory evidence in its possession to the grand jury. Id. at 51, 55. In making this determination, the Court noted that " the grand jury sits not to determine guilt or innocence, but to assess whether there is adequate basis for bringing a criminal charge." Id. at 51. " [T]o make the assessment, it has always been thought sufficient to hear only the prosecutor's side." Id. The Supreme Court noted that " [i]mposing upon the prosecutor a legal obligation to present exculpatory evidence in his possession would be incompatible with this system." Id. at 52. Since the prosecutor was under no obligation to present exculpatory evidence to the grand jury, Mr. Rising's claim of prosecutorial misconduct lacks merit.

3. Actual Innocence (Claim Four)

Finally, Mr. Rising asserts that he " is actually innocent of all charges." (§ 2255 Mot. at 9.) He states that had " defense counsel retained the services of a forensic accountant, and had all the business documents related to Rising's business and the allegations in the applicable state and federal statutes applicable to the type of business Rising was operating, the reality that no crimes would have been evident." ( Id.) Further, he asserts, among other things, that the RHPI business model did not violate Colorado law, including Colorado's insurance laws, and that RHPI did not guarantee the medical claims of its plan sponsor clients.

Mr. Rising's guilty plea also bars his claim that he is actually innocent. When he pleaded guilty he waived the right to a jury trial, to confront his accusers, to compel the testimony of witnesses, and to challenge the government's evidence. His plea also barred him from challenging constitutional deficiencies which occurred prior to his plea of guilty. Tollett, 411 U.S. at 267. While he may challenge his guilty plea as not being made voluntarily and intelligently, United States v. Rollings, 751 F.3d 1183 (10th Cir. 2014), he has not made this assertion. Mr. Rising offers no new evidence supporting his innocence claim, but merely attempts to challenge the government's evidence. He had the right to offer this testimony at trial if he had exercised that right. He did not. Therefore, any argument regarding actual innocence claim based on evidence available prior to his plea is barred by Tollett. Id .

Even if Mr. Rising's claim of actual innocence is not barred, it fails on the merits. There are two types of actual innocence claims--a freestanding constitutional claim " and as a 'gateway' to rais[e] . . . otherwise time-barred constitutional claims." Doe v. Jones, 762 F.3d 1174, 1176 (10th Cir. 2014). As to a gateway type of actual innocence claim, the Supreme Court noted that " the voluntariness and intelligence of a guilty plea can be attacked on guilty plea only if first challenged on direct review." Bousley, 523 U.S. at 621. Where the movant cannot establish cause and prejudice to forgive the procedural default, he may still assert the claim in a collateral proceeding " if he can establish that the constitutional error in his plea colloquy 'has probably resulted in the conviction of one of who is actually innocent.'" Id. at 623 (quotation omitted). This has been deemed " the fundamental miscarriage of justice exception" that " seeks to balance the societal interests in finality, comity, and conservation of scare judicial resources with the individual interest in justice that arises in the extraordinary case." Schlup v. Delo, 513 U.S. 298, 324, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995).

To establish actual innocence in the gateway context, " petitioner must demonstrate that, 'in light of all the evidence, 'it is more likely than not that no reasonable juror would have convicted him.'" Bousley, 523 U.S. at 621 (quotation and internal quotation marks omitted). This requires a stronger showing than that needed to establish prejudice. Schlup, 513 U.S. at 327. Actual innocence in this regard " means factual innocence, not mere legal insufficiency" for the conviction. Bousley, 523 U.S. at 621. As further stated by the Supreme Court:

To be credible, such a claim requires petitioner to support his allegations of constitutional error with new reliable evidence--whether it be exculpatory scientific evidence, trustworthy eyewitness accounts, or critical physical evidence--that was not presented at trial. Because such evidence is obviously unavailable in the vast majority of cases, claims of actual innocence are rarely successful.

Schlup, 513 U.S. at 324 (emphasis added). " [A] petitioner does not meet the threshold requirement unless he persuades the district court that, in light of the new evidence, no juror, acting reasonably, would have voted to find him guilty beyond a reasonable doubt." Id. at 329.

As to the second type of actual innocence claim, the Supreme Court has 'not resolved whether a prisoner may be entitled to habeas relief based on a freestanding claim of actual innocence.'" Doe, 762 F.3d at 1176 n. 5 (quoting McQuiggin v. Perkins, 133 S.Ct. 1924, 1931, 185 L.Ed.2d 1019 (2013)); see also Herrera v. Collins, 506 U.S. 390, 404-05, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993). Nonetheless, it has stated that if such a claim exists, the standard would be " 'extraordinarily high.'" House v. Bell, 547 U.S. 518, 555, 126 S.Ct. 2064, 165 L.Ed.2d 1 (2006) (quoting Herrera, 506 U.S. at 417). It would " require[ ]more convincing proof of innocence" than the standard in a gateway type of claim of actual innocence.

I find that Mr. Rising cannot meet his burden of proving he is actually innocent under either a freestanding or gateway claim. First, as to a gateway claim, he has not presented any new reliable evidence that supports his claim of innocence. While he relies on RHPI's business model structure to exculpate his conduct and attaches forensic accountings of his business to his motion, this does not support his claim. As shown by his plea and his statements at the plea hearing and sentencing, it was Mr. Rising's fraudulent conduct that caused millions in dollars in loss to his customers and their employees, not the structure or operation of RHPI. Moreover, as discussed earlier, the forensic accounting documents (Exs. 5.1 and 5.2 to § 2255 Motion and Memorandum), which appear to have been prepared by Mr. Rising himself, are not properly supported and are self-serving.

Moreover, regardless of Mr. Rising's evidence, I find that his claim of actual innocence is foreclosed by his plea of guilty, the plea agreement, and the transcript of the plea hearing. As noted earlier, Mr. Rising pleaded guilty to three counts (one count of Mail Fraud, one count of Theft or Embezzlement in connection with a Health Care Program, and one count of Money Laundering), the elements of which are set forth in the plea agreement. The plea agreement contains the factual basis for the counts and the evidence against Mr. Rising that supports his plea of guilty. It stated that " [t]he parties agree that there is no dispute as to the material elements which establish a factual basis for the offense of conviction." (Plea Agreement at 8.)

At Mr. Rising's change of plea hearing, he told the court in his own words what he believed he did wrong that would support these convictions. (Plea Hr'g Tr. at 25:16-27:15.) Among other things, Mr. Rising admitted that he " allow[ed] people to believe that the reinsurance mechanism that I provided them was insurance and not partially a loan mechanism, and that constituted fraud" ( id . 26:4-8), that he told his employees to misrepresent that claims had been paid or were going to be paid when they were not ( id . at 27:5-8)), that he provided false reports to his customers that did not accurately reflect the financial status of their plans ( id . at 27:5-14), and that he kited checks between his personal and business accounts to create the appearance that RHPI was lucrative in order to sell it. ( Id. 26:10-12, 18-23.)

The court referred Mr. Rising to the portion of the plea agreement containing the facts the government contended it would be able to prove. The following colloquy ensued:

Q [by the court] ... Have you read this portion of the plea agreement?
A Yes, I have.
Q Do you agree with what it says?
A Yes.
Q Do you disagree with any parts of it?
A No, I do not.
Q Did you engage in the conduct here attributable to you?
A Yes, I did.

(Plea Hr'g Tr. at 25:6-15.) Based on Mr. Rising's responses, the Court determined there was an adequate basis for his plea, accepted his plea, and " adjudged [Defendant] guilty of the offenses to which he's pled." ( Id. at 33:15-20; 41:24-42:8.)

As noted by the Tenth Circuit in United States v. Powell, 159 F.3d 500, 503 (10th Cir. 1998), " '[a] plea of guilty is the equivalent of admitting all material facts alleged in the charge.'" (quotation omitted). As can be seen, through the plea agreement, plea colloquy, and guilty plea, Mr. Rising " admitted the conduct charged in" those counts. Those admissions are sufficient to support a conviction under those counts; that is, a reasonable jury could have relied on this admission to convict him of all three counts to which he pled guilty. Id.; see also Tannenbaum v. United States, 148 F.3d 1262, 1264 (11th Cir.1998). Indeed, Mr. Rising has not provided any reason to question the truthfulness of his sworn admission of guilty. Mr. Rising " therefore cannot demonstrate the innocence necessary for his defaulted claim to be heard on the merits." Powell, 159 F.3d at 504.

His claim cannot meet the actual innocence procedural default bar, much less make a showing under the " extraordinarily high" standard for a freestanding innocence claim. House, 547 U.S. at. 555. At its core, Mr. Rising's claim is a legal insufficiency challenge, which is not recognized under the actual innocence jurisprudence and would be procedurally barred by his plea. See Levin v. Romero, 485 Fed.App'x 301, 304 (10th Cir. 2012) (unpublished) (claims of " insufficient evidence are factual challenges are factual challenges" that are barred by a guilty plea).

B. Mr. Rising's Summary Judgment Motions

I next address Mr. Rising's Pro Se Motion for Partial Summary Judgment and Pro Se Motion for Summary Judgment. Both motions assert that Mr. Rising presented sworn testimony and exhibits in support of his claims under § 2255, and that these facts, if true, were found by the court to be sufficient to warrant the granting of habeas relief. Mr. Rising argues that the government was ordered to answer and did not challenge a single fact or exhibit advanced by him. Accordingly, he argues that there is no genuine issue of material fact as to his habeas claims, and that AUSA Pena and his defense counsel Gregory Goldberg " have, by their collective silences, confessed constitutional error" . ( See Mot. for Partial Summ. J., at 1, Mot. Summ. J., at 3.)

I deny Mr. Rising's motions for summary judgment. While Mr. Rising asserts that the sworn facts he presented were already found to be sufficient to warrant habeas relief based on the court's order to the United States to answer, this is not true as discussed in Section III.A.1.a, supra . Moreover, I found in this Order that his facts are not sufficient to warrant habeas relief and that his § 2255 motion should be denied. Accordingly, Mr. Rising is not entitled to summary judgment on his habeas claims.

IV. CONCLUSION

Based upon the foregoing, it is

ORDERED that " Gerald Rising's Pro Se Motion for an Evidentiary Hearing on Motion to Vacate, Set Aside or Correct Sentence Pursuant to 28 U.S.C. § 2255 by a Person in Federal Custody (ECF No. 99) is DENIED. It is

FURTHER ORDERED that Gerald Rising's Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence by a Person in Federal Custody (ECF No. 80) is DENIED. It is

FURTHER ORDERED that " Gerald Rising, Jr.'s Pro Se Motion for Partial Summary Judgment" (ECF No. 98) is DENIED. It is

FURTHER ORDERED that " Gerald Rising, Jr.'s Pro Se Motion for Summary Judgment" (ECF No. 100) is DENIED. Finally, it is

ORDERED that no certificate of appealability will issue because Mr. Rising has not made a substantial showing of the denial of a constitutional right or a substantial showing that jurists of reason would find it debatable whether the procedural ruling is correct and whether the underlying claim has constitutional merit.


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