United States v. Jacoby ( 2018 )

FILED
UNITED STATES COURT OF APPEALS United States Court of Appeals
Tenth Circuit
FOR THE TENTH CIRCUIT
_________________________________ October 4, 2018
Elisabeth A. Shumaker
UNITED STATES OF AMERICA, Clerk of Court
Plaintiff - Appellee,
v. No. 17-1431
(D.C. Nos. 1:16-CV-00133-KHV &
MICHAEL JACOBY, 1:10-CR-00502-KHV-1)
(D. Colo.)
Defendant - Appellant.
_________________________________
ORDER DENYING CERTIFICATE OF APPEALABILITY*
_________________________________
Before MATHESON, EID, and CARSON, Circuit Judges.
_________________________________
Michael Jacoby, a federal prisoner appearing pro se, seeks a certificate of
appealability (COA) to appeal the district court’s denial of his 28 U.S.C. § 2255 motion.
See 28 U.S.C. § 2253(c)(1)(B) (“Unless a circuit justice or judge issues a certificate of
appealability, an appeal may not be taken to the court of appeals from . . . the final order
in a proceeding under section 2255.”). We deny a COA and dismiss this matter.
I.
Mr. Jacoby was convicted in 2012 of eleven counts of wire fraud, one count of
money laundering, and two counts of bank fraud. He was sentenced to 108 months in
*
This order is not binding precedent except under the doctrines of law of the case,
res judicata, and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
prison and five years of supervised release. This court affirmed his convictions and
sentence on direct appeal. United States v. Zar, 790 F.3d 1036, 1059 (10th Cir. 2015).
We only briefly summarize the evidence supporting Jacoby’s convictions, which
was described in our previous decision. Jacoby, a real estate agent, recruited buyers to
purchase homes they could not afford, orchestrated schemes to falsely inflate the homes’
purchase prices, and helped the buyers fraudulently obtain mortgage loans for more than
the true cost of the homes.
Jacoby devised two methods of inflating the purchase price. In one, the seller
agreed to donate a significant portion of the stated sales price to a non-profit grant
program, and the grant program immediately returned those funds to the home buyer.
The lenders testified they did not receive paperwork disclosing the grant program
arrangement, and lent money based on the inflated purchase price stated in the sales
contract. In the other scheme, the buyers purchased a home through a solely-owned
limited-liability company (LLC), and the LLC immediately resold the home to the buyer
at a substantially higher price. The buyers did not disclose to their lenders that they
owned the LLCs, and the lenders made loans based on the inflated sales price, having
been misled into thinking the sale from the LLC to the buyer was an arms-length
transaction.
One of buyers that Jacoby recruited, Mike Macy, pleaded guilty and testified
against Jacoby at trial; two other buyers, Derek and Susanne Zar, were convicted along
with Jacoby. Macy testified that Jacoby came up with these mortgage fraud schemes, set
the prices, prepared the sales contracts, and either provided short-term loans to the buyers
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to assist their fraudulent loan applications or found other lenders to do so. Jacoby got
commissions on the sales and some of the fraudulently obtained loan proceeds.
Jacoby also fraudulently obtained two loans on his personal home, which he
purchased from his partner, Ed Schulz, who assisted in the fraudulent scheme. Jacoby
obtained the original mortgage from FirstBank by falsely representing the actual purchase
price of the home and inflating its value by creating a false construction budget for
improvements Schulz had made. Jacoby made false statements to the lender about his
current income, supported by forged statement-of-income letters he submitted on his
accountant’s letterhead. He falsely stated he had no financial assistance in buying the
home, but the evidence showed he borrowed the funds from a colleague, Ed Aabak, to
make the down payment, which he later repaid with the mortgage proceeds. Jacoby then
got a home equity line of credit (HELOC) from Citibank on his home, by again making
false statements about his current income. He falsely told Citibank he was using the
HELOC to repay a seller’s lien held by Schulz. There was no such loan; Jacoby created
and submitted fictitious loan and deed of trust documents to support his
misrepresentation.
After this court affirmed Jacoby’s conviction, he filed a timely § 2255 motion
raising four claims, each with numerous sub-claims: (1) ineffective assistance of trial
counsel; (2) ineffective assistance of appellate counsel; (3) prosecutorial misconduct and
malicious prosecution; and (4) actual innocence and cumulative error resulting in a
fundamental miscarriage of justice. The district court denied the § 2255 motion, finding
that all of Mr. Jacoby’s claims failed because he did not set forth specific and
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particularized facts which, if true, would entitle him to relief. In the same order, the
district court denied a COA. Mr. Jacoby filed a timely notice of appeal and renewed his
request for a COA, which the district court again denied. Mr. Jacoby then filed a motion
for reconsideration under Fed. R. Civ. P. 59(e), which the district court denied.
Mr. Jacoby did not amend his notice of appeal to include any challenge to the denial of
his Rule 59(e) motion.
II.
In his Combined Opening Brief and Application for COA, Jacoby asserts his trial
counsel was constitutionally ineffective for failing to introduce witnesses and evidence
that would, he alleges, show his factual innocence. Jacoby does not reassert his claims of
ineffective assistance of appellate counsel, prosecutorial misconduct, or actual
innocence.1
To merit a COA, Mr. Jacoby must make “a substantial showing of the denial of a
constitutional right.” 28 U.S.C. § 2253(c)(2). Because the district court denied Jacoby’s
§ 2255 motion on the merits, he must show reasonable jurists could debate whether the
motion should have been granted or the issues presented deserve encouragement to
proceed further. Slack v. McDaniel, 529 U.S. 473, 484 (2000). To decide whether
reasonable jurists could debate the district court’s denial of his ineffective assistance of
1
Our circuit has “definitively foreclose[d] independent actual innocence claims”
unconnected to any independent constitutional violation in habeas petitions. Doe v.
Jones, 762 F.3d 1174, 1188 (10th Cir. 2017) (Tymkovich, J, dissenting in part and
concurring in the judgment).
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counsel claim, we make a threshold inquiry into the underlying merit of the claim. Id. at
482.
The Sixth Amendment gives criminal defendants the right to effective assistance
of counsel. Strickland v. Washington, 466 U.S. 668, 685-86 (1984). To show his counsel
provided ineffective assistance in violation of the Sixth Amendment, Jacoby must show
(1) his counsel’s representation “fell below an objective standard of reasonableness,” id.
at 688, and (2) there is a reasonable probability the result of his criminal proceedings
would have been different if not for his counsel’s ineffectiveness, id. at 694. “[C]ounsel
is strongly presumed to have rendered adequate assistance and made all significant
decisions in the exercise of reasonable professional judgment.” Id. at 690. “[T]he
defendant bears the burden of proving that counsel’s representation was unreasonable
under prevailing professional norms and that the challenged action was not sound
strategy.” Boyle v. McKune, 544 F.3d 1132, 1138 (10th Cir. 2008) (internal quotation
marks omitted).
Jacoby asserts his trial counsel was constitutionally ineffective because he failed
to have key witnesses testify, to interview some witnesses prior to trial, to introduce
certain evidence, and to prepare Jacoby to testify in his own defense.
A. Failure to have key witnesses testify. Jacoby asserts trial counsel failed to
present testimony from any Colorado real estate expert witness. He speculates such an
expert would have testified that Jacoby properly performed his duties as a transaction
broker under Colorado’s real estate rules and requirements. He also claims counsel was
ineffective in not calling Ed Aabak as a witness. He asserts Aabak would have testified
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that Aabak owed Jacoby $603,391, and that evidence would have provided a defense to
the government’s evidence that Jacoby lied when he told FirstBank he had no financial
assistance in purchasing the home. Jacoby did not provide an affidavit from any
Colorado real estate expert or from Aabak to support his assertion of their purported
testimony.
“[T]he decision of which witnesses to call is quintessentially a matter of strategy
for the trial attorney.” Id. at 1139. Jacoby offers nothing but his own speculation as to
what a Colorado real estate expert or Aabak would have testified to. But “as easily as
one can speculate about favorable testimony, one can also speculate about unfavorable
testimony,” id. at 1138. Courts will not speculate that evidence counsel omitted would be
positive when it is equally likely the evidence would have been harmful. See United
States v. Snyder, 787 F.2d 1429, 1432 (10th Cir. 1986). The district court concluded
Jacoby failed to rebut the presumption that his trial counsel’s witnesses selections were
tactical decisions, or to specifically explain how these witnesses would have changed the
outcome of the trial. Reasonable jurists could not debate this conclusion.
B. Failure to interview witnesses. Jacoby asserts his trial counsel failed to
interview the First Bank and Citibank witnesses prior to trial. He claims his attorney
would have learned from such an interview that these lenders had his 2005 and 2006 tax
returns and knew of his real estate assets, and that Jacoby could use the HELOC as he
chose. He also faults counsel for not interviewing the mortgage broker for one of the
new homes (1065 Ridge Oak), to ascertain whether the lender had information about the
grant program. The district court concluded Jacoby did not demonstrate that any failure
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to interview these or other witnesses would have changed the outcome of the trial or was
unreasonable from counsel’s perspective. See Newmiller v. Raemish, 877 F.3d 1178,
1197 (10th Cir. 2017) (citing Strickland’s holding that the reasonableness of counsel’s
investigation must be evaluated from counsel’s perspective at the time the strategic
decisions were made), petition for cert. filed (U.S. Mar. 19, 2018) (No. 17-8224). We are
satisfied from our review of the evidence presented at trial that no reasonable jurist would
debate this conclusion of the district court.
C. Failure to introduce evidence. Jacoby asserts his counsel was ineffective
because he did not introduce evidence (1) of his 2005 and 2006 tax returns showing he
had substantial income; (2) that he had tax deferred income of $1,058,978 in 2007;
(3) that FirstBank and Citibank had his 2005 and 2006 tax returns and knew he owned
four properties with Schulz; (4) that he was entitled to use the Citibank HELOC however
he chose; (5) that Aabak owed Jacoby $603,391; (6) that he made a short-term loan to
Macy after, not before, Macy was approved for one of the mortgage loans; (7) of
appraisals on two properties; (8) that some sales contracts disclosed that Jacoby was not
making any representations; (9) of cash and investor discounts given by DR Horton to
Derek Zar and Macy; (10) letters from mortgage brokers stating they were aware some of
the transactions were not arms-length.
The district court concluded that Jacoby had not demonstrated that his counsel’s
decisions regarding the presentation of evidence lacked any justification. The court’s
“task is not to determine in the first instance whether defense counsel was deficient; it is
to determine whether there is any reasonable argument that counsel satisfied Strickland’s
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deferential standard.” Newmiller, 877 F.3d at 1203 (internal quotation marks omitted).
The district court further concluded that even if Jacoby’s counsel should have introduced
any of this additional evidence, it was insufficient to overcome the overwhelming
evidence of Jacoby’s participation in the fraudulent schemes. Based on our review of the
evidence, we conclude no reasonable jurist could debate the district court’s denial of
these claims.
D. Failure to prepare him to testify. Jacoby alleges his counsel was ineffective
because he failed to prepare Jacoby to testify, or to advise him about testifying in his own
defense. He asserts he could have testified as to his 2006 commission income, his 2005
and 2006 tax returns, and his real estate assets; that he did not borrow the down payment
to purchase his home because Aabak owed him money; that he lent money to Macy after,
not before, two loan applications; that the terms of the Citibank HELOC allowed him to
use the loan however he chose; that he did not influence any home appraisals, correctly
disclosed the grant program in the sales contracts, and properly performed his duties as a
transaction broker; that one of the mortgage lenders knew about the grant program; and
that Jacoby gave the buyers a document stating he was not involved in determining the
grant amount or its terms and advising the buyers to seek legal advice.
It is well established that “[t]he decision whether to testify lies squarely with the
defendant; it is not counsel’s decision.” Cannon v. Mullin, 383 F.3d 1152, 1171
(10th Cir. 2004). Jacoby made only passing references to this claim in his voluminous
§ 2255 motion, stating simply that his attorney failed to have him testify. Jacoby did not
allege in his § 2255 motion that his counsel prevented him from testifying or was
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otherwise ineffective in preparing or advising him of his right to testify. But even if
Jacoby had presented any such evidence, his claim would fail on the prejudice prong
because any failure to call him as a witness does not undermine confidence in the
outcome of the trial. Based on the trial evidence, no reasonable jurist would conclude
from Jacoby’s description of his proposed testimony that there is a reasonable probability
it would have altered the outcome of the trial.
After consideration of Jacoby’s Combined Opening Brief and Application for a
Certificate of Appealability and the record on appeal, we are persuaded that reasonable
jurists would not debate the correctness of the district court’s denial of relief under
§ 2255. For substantially the same reasons given by the district court, we deny Jacoby’s
request for a COA and dismiss this matter. Jacoby’s motion to proceed in forma pauperis
on appeal is granted.
Entered for the Court
Allison H. Eid
Circuit Judge
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