United States v. Gordon

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
TENTH CIRCUIT July 26, 2016
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 16-5000
(D.C. No. 4:14-CV-00675-JHP-FHM and
GEORGE DAVID GORDON, 4:09-CR-00013-JHP-1)
(D. N.D. Okla.)
Defendant - Appellant.
ORDER DENYING CERTIFICATE OF APPEALABILITY
AND DISMISSING APPEAL
Before HARTZ, O’BRIEN, and PHILLIPS, Circuit Judges.
George David Gordon, a federal prisoner proceeding pro se,1 wants to appeal from
the denial of his 28 U.S.C. § 2255 motion. His request for a certificate of appealability
(COA) was denied by the district judge, prompting him to reapply in this Court. Because
he has not “made a substantial showing of the denial of a constitutional right,” see 28
U.S.C. § 2253(c)(2), we too deny a COA.
I. Background
This case has a tortured factual and procedural history. For our purposes,
1
Although Gordon was a licensed attorney, we have nevertheless liberally
construed his pro se pleadings. See Ledbetter v. City of Topeka, Kan., 318 F.3d 1183,
1187 (10th Cir. 2003).
however, it suffices to say that Gordon, a securities lawyer, engaged in a stock
manipulation scheme wherein he acquired millions of shares in penny stock companies,
artificially inflated the price of those shares through false and misleading advertising, and
then sold them for a substantial profit. In July 2007, while the government was
investigating Gordon’s misdeeds, it seized his law firm bank accounts, filed a caveat
(Okla. Stat. Ann. tit. 16, § 74) and then a lis pendens on his personal residence, and
placed caveats on two lots of land he owned (the Delvest lots).2 The value of these assets
(collectively the restrained assets) exceeded $5 million, substantially less than his
claimed net worth of $8.8 million.3
In January 2009, a grand jury indicted Gordon with multiple counts of securities
related offenses. It also found (1) his residence was directly forfeitable as to one count
but a substitute asset as to the other counts and (2) the bank accounts were substitute
assets.4 The Delvest lots were not mentioned in the indictment.
2
A caveat is written notice filed by a person claiming an interest in land. Okla.
Stat. Ann. tit. 16, § 74(a); see also United States v. Gordon, 710 F.3d 1124, 1133 (10th
Cir. 2013) (a caveat is “a warning or proviso”) (quotation marks omitted). A “lis
pendens” is “[a] notice, recorded in the chain of title to real property, required or
permitted in some jurisdictions to warn all persons that certain property is the subject
matter of litigation, and that any interests acquired during the pendency of the suit are
subject to its outcome.” Black’s Law Dictionary (10th ed. 2014).
3
United States v. Gordon, 710 F.3d 1124, 1138 (10th Cir. 2013).
4
Property is forfeitable if it is “involved in” or “traceable to” the offense. United
States v. Gordon, 710 F.3d 1124, 1135 n.13 (10th Cir. 2013) (quotation marks omitted).
“[A] criminal defendant has no Sixth Amendment right to use forfeitable assets to
employ counsel.” Id. (quotation marks omitted). Substitute assets, on the other hand, are
not connected to the alleged crime. “‘Forfeiture of substitute property cannot occur until
after the defendant’s conviction and a determination by the trial court that the defendant’s
act or omission resulted in the court’s inability to reach forfeitable property.’” Id. at 1136
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Based on the grand jury’s forfeiture findings and believing the government was
improperly preventing him from using the restrained assets to pay his counsel of choice,
Gordon sought return of the assets and dismissal of the indictment. He also requested an
evidentiary hearing pursuant to United States v. Jones, 160 F.3d 641 (10th Cir. 1998).
The government opposed his requests arguing the restrained assets were directly
forfeitable and therefore Gordon had no right to use them to fund his defense. See supra
n.4. It also said no hearing was required because Gordon had not shown he had no other
assets with which to pay counsel. Jones, 160 F.3d at 647. It noted, among other things,
that Gordon had paid defense counsel over $900,000 in fees and costs since being
indicted. In fact, Gordon had paid this amount to his attorneys since the investigation
began in 2006, three years before the indictment. Since the indictment, he had paid his
attorneys approximately $96,000.
The district judge denied the motion to dismiss. He concluded the restrained
assets were directly forfeitable and Gordon had no constitutional right to use them to
employ counsel or otherwise fund his defense. He also decided the government’s pretrial
seizure and restraint of these assets was proper and no evidentiary hearing was necessary
because Gordon had other assets with which to retain counsel. In doing so, he relied in
part on the government’s misrepresentation concerning the time span over which Gordon
had paid $900,000 to his attorneys (the misrepresentation). Gordon moved for
reconsideration and later filed an interlocutory appeal. The trial judge denied the motion
n.14 (quotation marks omitted). Therefore, the government cannot restrain substitute
assets prior to conviction. Id.-3-
to reconsider as untimely. The interlocutory appeal was also untimely and therefore was
dismissed.
Gordon was ultimately convicted of the charges against him and sentenced to 144
months imprisonment. The judge ordered the forfeiture of (1) the bank account funds
and $1.7 million in Gordon’s personal residence as connected to the crimes of conviction
and (2) the Delvest lots as substitute assets. We affirmed his convictions and sentences
on direct appeal. See United States v. Gordon, 710 F.3d 1124 (10th Cir. 2013). Relevant
here, we concluded that even if the government had improperly seized and restrained his
assets pretrial, no Sixth Amendment violation had occurred because Gordon had not
shown he had no other assets to retain private counsel. Id. at 1135-38. In doing so, we
relied in part on the misrepresentation. Id. at 1138. The Supreme Court denied certiorari
review. Gordon v. United States, 134 S. Ct. 617 (2013). In responding to the petition for
certiorari, the government again relied in part on the misrepresentation.
Gordon’s § 2255 motion raises various claims of ineffective assistance of counsel,
fraud on the court, and prosecutorial misconduct. The judge denied the motion, his
subsequent motion for reconsideration, and his COA request.
II. Discussion
A COA is a jurisdictional prerequisite to our review of a petition for a writ of
habeas corpus. Miller-El v. Cockrell, 537 U.S. 322, 336 (2003). We will issue a COA
“only if the applicant has made a substantial showing of the denial of a constitutional
right.” 28 U.S.C. § 2253(c)(2). To make such a showing, an applicant must demonstrate
“that reasonable jurists could debate whether (or, for that matter, agree that) the petition
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should have been resolved in a different manner or that the issues presented were
adequate to deserve encouragement to proceed further.” Slack v. McDaniel, 529 U.S.
473, 484 (2000) (quotation marks omitted). Gordon has not satisfied his burden.
A. Ineffective Assistance of Counsel
Gordon claims his trial counsel was ineffective in failing to timely file the motion
to reconsider and subsequent interlocutory appeal. But even assuming deficient
performance, he cannot show prejudice.5 See Strickland v. Washington, 466 U.S. 668,
687 (1984) (to establish ineffective assistance of counsel, a defendant must show both (1)
deficient performance and (2) prejudice). That is because we eventually denied relief on
direct appeal. Had we considered his claim on interlocutory appeal (or the district court
had considered his motion to reconsider), the outcome would have been the same. Id. at
694 (to satisfy the prejudice prong of an ineffective assistance of counsel claim, a
defendant must show the result would have been different absent the errors).
But Gordon adds a new wrinkle. He claims our decision rejecting his Sixth
Amendment arguments was flawed because it was based on the government’s
5
Gordon alleges prejudice is presumed by the mere fact counsel did not timely file
the requested interlocutory appeal, thereby denying him an appeal as of right. He relies
on Roe v. Flores-Ortega, 528 U.S. 470 (2000), and Rodriguez v. United States, 395 U.S.
327 (1969). In those cases, the Supreme Court held that “a lawyer who disregards
specific instructions from the defendant to file a notice of appeal acts in a manner that is
professionally unreasonable.” Roe, 528 U.S. at 477. Prejudice is presumed in such
circumstances because counsel’s performance leads to the denial of an entire judicial
proceeding. Id. at 483. But we have uncovered no cases extending this reasoning to the
denial of an interlocutory appeal where, as here, the defendant has the opportunity to
raise and does raise his claims on direct appeal. In other words, counsel’s deficient
performance (filing an untimely interlocutory appeal) did not deprive Gordon of an
appeal altogether, it just delayed the inevitable. No presumption of prejudice applies.
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misrepresentation.6 His premise is wrong, but even if it had merit he cannot meet his
required showing of prejudice. The misrepresentation played only a part in our decision.
We also relied on (1) his having represented in a 2006 bank application that his net worth
was over $8.8 million, (2) his access to the equity in his home, which was substantially
more than the amount encumbered by the government ($1.7 million),7 and (3) his failure
to show what his attorneys would have done differently had he had access to the
restrained assets. Gordon, 710 F.3d 1138-39 & n.17. Indeed, we concluded that
“counsel [had] remained fully and actively engaged in the case throughout the entire trial
court proceedings” and Gordon “was represented in a thorough and vigorous fashion” by
his retained counsel. Id. at 1139. While Gordon now alleges his attorney failed to review
sizeable discovery, interview several witnesses, and hire the necessary experts and
investigators, he has not shown how these failures affected the outcome of his trial,
especially in light of the robust defense actually provided and the substantial evidence of
his guilt.8 See Strickland, 466 U.S. at 694.
Gordon also alleges his motion to reconsider and interlocutory appeal would have
6
Neither Gordon nor his counsel alerted us to the misrepresentation and we did
not discover it on our own.
7
The government’s caveat and lis pendens on the residence were limited to $1.7
million. The residence apparently had a value of $4-5 million. Yet, inexplicably, Gordon
never sought to use that excess value to fund his defense. On direct appeal, we rejected
his claim that the government’s encumbrances on his residence made it “unlikely that a
lender would provide a mortgage.” Gordon, 710 F.3d at 1138 n.17. In his COA
application and opening brief, he again claims he could not obtain a loan on the residence
due to the government’s encumbrances. But there is no evidence of any attempt to do so.
8
Our decision on direct appeal sets forth in excruciating detail his misdeeds. See
Gordon, 710 F.3d at 1128-33, 1140-52.
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raised a successful Fifth Amendment due process claim based on the judge’s denial of an
evidentiary hearing pursuant to Jones. He says we did not address the Fifth Amendment
on direct appeal because his appellate counsel failed to adequately brief it. But appellate
counsel is not ineffective for failing to raise a non-meritorious claim. See United States
v. Challoner, 583 F.3d 745, 749-50 (10th Cir. 2009). In Jones, we concluded the Fifth
Amendment entitled a defendant to a post-restraint, pre-trial evidentiary hearing if he
established (1) he “has no assets, other than those restrained, with which to retain private
counsel” and (2) “a bona fide reason to believe the grand jury erred in determining that
the restrained assets constitute or are derived . . . from gross proceeds traceable . . . to the
offense.” 160 F.3d at 647. As the district judge found (and we affirmed on direct
appeal), Gordon failed to satisfy the first requirement.9
Finally, in a Rule 28(j) letter, Gordon cites the Supreme Court’s recent decision in
Luis v. United States, wherein the plurality of the Court held that “the pretrial restraint of
legitimate, untainted assets needed to retain counsel of choice violates the Sixth
Amendment.” --- U.S. ---, 136 S. Ct. 1083, 1088 (2016) (emphasis added). He also
claims Luis decided such violation constitutes “structural error” not subject to harmless
error review. Assuming, arguendo, Luis applies retroactively to cases on collateral
9
Gordon also argues his counsel was ineffective for failing to raise Fed. R. Crim.
P. 41(g) (formerly Rule 41(e)) as a basis for his request for an evidentiary hearing. But
Rule 41(g) “is an equitable remedy available only to a defendant who can show
irreparable harm and an inadequate remedy at law.” United States v. Akers, 215 F.3d
1089, 1106 (10th Cir. 2000). Gordon had an adequate remedy at law, the civil forfeiture
action (which was stayed, without objection from Gordon, pending the outcome of the
criminal case). Id. (“This court has held that a forfeiture proceeding provides a defendant
with an adequate remedy at law for resolving a claim to seized property.”).
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appeal, it is unavailing here for at least two reasons. First, both Luis and the government
agreed the restrained assets were untainted. 136 S. Ct. at 1088. In this case, the judge, in
denying Gordon’s motion to dismiss, found the restrained assets to be directly
forfeitable.10 Second, Luis needed the funds to obtain counsel of her choice. Id. at 1087-
88. Here, Gordon did not need the assets to retain counsel as he, in fact, had retained
counsel of his choice and that counsel “thorough[ly] and vigorous[ly]” represented him at
10
Gordon faults the district judge for finding the assets forfeitable because the
grand jury found otherwise, i.e., that the assets were either substitute assets (residence
and bank accounts) or not forfeitable (the Delvest lots). He relies on Jones and Kaley v.
United States, --- U.S. ---, 134 S. Ct. 1090, 1094 (2014). But neither case speaks to this
issue. Jones addressed whether a defendant is entitled to challenge the grand jury’s
probable cause findings as to the forfeitability of assets, which resulted in the district
court issuing a restraining order. 160 F.3d at 643-45. We concluded 21 U.S.C. § 853does not allow him to do so but the Fifth Amendment requires a hearing if certain
conditions are satisfied. 160 F.3d at 644-45, 647-48. As we have explained, he failed to
satisfy those conditions. Gordon claims Kaley held that a grand jury’s probable cause
finding that an asset is forfeitable is not judicially reviewable prior to trial. But he is
mistaken. Kaley decided that when challenging a pretrial restraint of property, a
defendant has no constitutional right to contest the grand jury’s probable cause finding as
to the defendant’s guilt. 134 S. Ct. at 1094, 1097-99. Indeed, in that case, the defendants
did not dispute the grand jury’s finding that there was probable cause to believe the assets
were traceable or otherwise sufficiently related to the crime (i.e., forfeitable); they wished
only to have the judge re-decide whether there was probable cause that they committed
the underlying offense. Id. at 1096-97. And, although the government conceded at oral
argument that a defendant has a constitutional right to a hearing on whether probable
cause exists to believe the assets are forfeitable, the Court expressly said “[w]e do not
opine on the matter here.” Id. at 1095 & n.3.
We recognize that § 853(e)(1)(A), which allows a judge to enter a restraining
order “to preserve the availability of [forfeitable] property,” contemplates that such order
will follow an indictment charging a violation of a requisite crime and “alleging that the
[subject] property . . . would, in the event of conviction, be subject to forfeiture.” But the
judge never entered a restraining order pursuant to § 853(e)(1)(A). Instead, he simply
denied Gordon’s motion to dismiss the indictment and request for an evidentiary hearing
because he had not established a Sixth Amendment violation. On direct appeal, we
agreed.
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trial. Gordon, 710 F.3d at 1139. Therefore, unlike the court’s order in Luis, the
government’s actions in imposing pretrial restraints on his assets did not prevent him
from exercising his Sixth Amendment right to retain counsel of his choice.
B. Fraud on the Court
Gordon’s fraud on the court claim also fails. The government admits its statement
about the $900,000 in post-indictment defense costs was erroneous, but credibly tells us it
came from informal discussions between government counsel and the probation
department. Such cavalier methods are hardly laudable, but Gordon has presented
nothing calling its embarrassing explanation into doubt and, tellingly, nothing suggesting
it was aware of but disregarded its error. As far as we can determine from the record, the
first mention of the issue occurred in this § 2255 proceeding. Courts rightfully expect the
government to be scrupulously honest in these matters, but a mistake does not, alone,
constitute a fraud on the court. See Weese v. Schukman, 98 F.3d 542, 552-53 (10th Cir.
1996) (“Generally speaking, only the most egregious misconduct, such as bribery of a
judge or members of a jury, or the fabrication of evidence by a party in which an attorney
is implicated will constitute a fraud on the court. Less egregious misconduct, such as
nondisclosure to the court of facts allegedly pertinent to the matter before it, will not
ordinarily rise to the level of fraud on the court.”) (quotation marks omitted). Moreover,
Gordon presented no evidence demonstrating the government’s misrepresentation was
intentional, as opposed to an innocent mistake. Id. at 553 (“Intent to defraud is an
-9-
absolute prerequisite to a finding of fraud on the court . . . .”).11
C. Prosecutorial Misconduct
Gordon’s prosecutorial misconduct claims face a similar fate. Evaluating a claim
of prosecutorial misconduct is a two-step process. United States v. Fleming, 667 F.3d
1098, 1103 (10th Cir. 2011). First, we ask “whether the conduct was, in fact, improper.”
United States v. Oberle, 136 F.3d 1414, 1421 (10th Cir. 1998) (quotation marks omitted).
If so, we then determine whether reversal is warranted. Id.This claim continues the leitmotif—the government wrongfully restrained his
assets and deprived him of his ability to use them to fund his defense. But, as we
concluded on direct appeal and have already explained, even assuming the government
acted improperly, reversal is not required because Gordon failed to show he was
inadequately represented in the trial court by his retained counsel or the unavailability of
other assets with which to pay retained counsel.
Gordon also claims the government knowingly presented the perjured testimony of
several key factual witnesses at trial or failed to correct the false testimony when it
occurred. As the judge properly concluded in denying this claim, “Gordon . . . points to
nothing more than apparent inconsistencies in the witnesses’ testimonies” which alone do
not constitute perjury and fail to show the prosecution knew the testimony was false. (R.
at 252.) See Tapia v. Tansy, 926 F.2d 1554, 1563 (10th Cir. 1991) (“Contradictions and
11
Given this holding, we also reject Gordon’s claim that the judge erred in
denying his motion to recuse in the § 2255 proceeding, which was based on Gordon’s
claim that the judge’s testimony was necessary to determine whether the judge knew the
government misrepresentation was false and, if so, why he would rely on it.
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changes in a witness’s testimony alone do not constitute perjury and do not create an
inference, let alone prove, that the prosecution knowingly presented perjured
testimony.”); see also United States v. Frazier, 429 F. App’x 730, 734 (10th Cir. 2011)
(unpublished) (“Discrepancies in testimony are common, and can generally be explained
as resulting from human failings short of intentional lying. To reverse Defendant’s
conviction on this ground would bring many, perhaps most, convictions into question.
We will reserve such reversals for cases in which perjury and knowledge of perjury are
either clear on the record or have been found by the lower court.”).
We DENY a COA and DISMISS this matter.
Gordon’s request to proceed on appeal in forma pauperis (ifp) is DENIED AS
MOOT. The relevant statute, 28 U.S.C. § 1915(a), does not permit litigants to avoid
payment of fees; only prepayment of fees may be excused. Since we have reached the
merits of this matter, prepayment of filing and docketing fees is no longer an issue, but
liability for those fees remains. Gordon is required to pay all filing and docketing fees
($505.00). Payment must be made to the Clerk of the District Court.
Entered by the Court:
Terrence L. O’Brien
United States Circuit Judge
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