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United States v. Vennes

United States District Court, D. Minnesota

April 29, 2015

United States of America, Plaintiff,
v.
Frank Elroy Vennes, Jr., Defendant. Civ. No. 14-4202 (RHK)

Kimberly A. Svendsen, Timothy C. Rank, Assistant United States Attorneys, Minneapolis, Minnesota, for the Government.

William J. Mauzy, Casey T. Rundquist, Law Office of William J. Mauzy, Minneapolis, Minnesota, for Defendant.

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

In April 2011, a grand jury indicted Defendant Frank Elroy Vennes, Jr. on four counts of securities fraud and one count of money laundering in connection with investments he solicited in the massive Ponzi scheme spearheaded by Tom Petters. The grand jury later returned a Second Superseding Indictment charging him with 28 counts of securities fraud, wire fraud, mail fraud, bank fraud, and money laundering, among other crimes. After extensive preparation and pretrial motion practice, his trial was scheduled to commence on February 5, 2013.

On February 1, 2013, however, Defendant entered into a plea agreement (the "Plea Agreement") (Doc. No. 167) with the Government in which he agreed to plead guilty to one count of securities fraud and one count of money laundering. The Court accepted his guilty plea, and on October 18, 2013, sentenced him to 15 years' imprisonment, the statutory-maximum penalty. Defendant did not appeal.

On October 4, 2014, nearly two years after he pled guilty and almost a year after he was sentenced, Defendant for the first time claimed the Government had made certain promises to him, not contained in the Plea Agreement, to which it did not adhere. He also asserted that his lead defense counsel, James Volling, Esq., failed to provide effective assistance because he did not object to the Government's alleged malfeasance and misrepresented his likely sentence in private discussions with Defendant. As a result, he filed the instant Motion under 28 U.S.C. § 2255, seeking to withdraw his guilty plea. Having carefully considered the parties' robust briefing, the Motion will be denied.

BACKGROUND

The facts recited below are taken from the docket in this matter and from Defendant's Motion.

Shortly after being charged, Defendant retained Volling to represent him. Volling is an attorney with more than 30 years' experience, a partner at Faegre Baker Daniels, one of the largest law firms in Minneapolis, and a former law clerk to United States Supreme Court Justice Warren E. Burger. Notably, Volling had been representing Defendant for more than two years before he was indicted, in connection with civil matters comprising part of the Petters proceedings. Defendant and Volling have known each other since the early 1990s, due to their work together on the board of a Minnesotabased prison ministry. Hence, as Defendant puts it, he had "a level of trust with Mr. Volling [he] would not have with [another] lawyer." (Decl. ¶ 4.)[1]

Volling (and several other lawyers from his firm) quickly undertook a spirited and vigorous defense. He filed a bevy of motions, including a motion to sever and a motion for a bill of particulars. He reviewed the massive collection of documents the Government had mustered during its investigation. As the February 5, 2013 trial date approached, he filed a slew of additional motions, including a number of motions in limine. At no point along the way did Defendant express any willingness to plead guilty. (Id. ¶¶ 6-7, 9, 11; Volling Aff. ¶ 4.)

But with trial looming, things changed in mid-January 2013. After receiving the Government's trial exhibits and Jencks Act disclosures, Volling and Defendant discussed the possibility of a plea deal, and Defendant authorized Volling to confer with Assistant United States Attorney Timothy Rank. (Decl. ¶ 11.) On January 29, 2013, Defendant and Volling met to discuss an offer Rank had made. It is undisputed the offer was for Defendant to plead guilty to two counts (securities fraud and money laundering) with a statutory maximum penalty of 15 years' imprisonment, in exchange for the Government dismissing the remaining Counts in the Second Superseding Indictment.[2] According to Defendant, Volling also informed him that Rank "would not advocate for a particular sentence" and would "tell the court that [he] was less culpable than Robert White, " a Petters co-conspirator who received a five-year sentence. (Id. ¶¶ 12-13.) Defendant, though, pressed Volling to obtain a better deal because he "feared the possibility of a fifteen year sentence." (Id. ¶ 15.) According to Defendant, Volling bristled in response and threatened to withdraw as counsel - with trial approximately a week away - unless he agreed to plead guilty. (Id. ¶¶ 14-16.)[3] Nevertheless, Volling contacted Rank a second time but was unable to obtain a better offer; yet, Rank (allegedly) reiterated he would "remain completely mute" at sentencing, other than to inform the Court Defendant was less culpable than White. (Id. ¶ 17.) Defendant decided to take the evening to consider Rank's offer and agreed to meet Volling the following day, although at the time he intended to reject the offer and proceed to trial. (Id. ¶¶ 17-18.)[4]

That night, Defendant discussed the offer with his wife and mother. (Id. ¶ 19.) He was reluctant to plead guilty but "concern[ed]" about Volling's (alleged) threat to withdraw - since all of his money had been seized as part of the related proceedings against Petters, he "did not have access to funds to hire a different lawyer and would have to defend [him]self at trial without a lawyer to represent [him]." (Id.)

The following morning, Defendant again met with Volling, at which time Volling presented him a letter "memorializing [their] discussions and... [his] advice over the last several days" and summarizing a plea agreement Rank had "offered to draft." (Decl. ¶ 20 & Ex. 1.)[5] The letter explained the Government had offered for Defendant to plead guilty to securities fraud and money laundering with a maximum sentence of 15 years' imprisonment, a sentence Volling considered "unlikely" because it would have required the Court to impose consecutive maximums on each of the two counts. (Id. Ex. 1.)[6] The letter continued:

[T]he Plea Agreement offered by Mr. Rank on January 29 would have contained language expressly acknowledging your lack of knowledge that there was a Ponzi scheme perpetrated by Mr. Petters and others, would have provided that there is no agreement on an amount of loss calculation such that the issue could be creatively argued to the Court, would have stated that the Government would not argue for a particular sentence and instead would simply ask the Court to impose a sentence consistent with the statutory factors, would have allowed me to advocate on your behalf for whatever sentence was deemed appropriate, and would have provided that you should receive the benefit of acceptance of responsibility under the Sentencing Guidelines.[7] In addition, Mr. Rank advised me that he would tell the Court at sentencing that the Government deems you less culpable than Robert White in terms of the overall conduct involved in the Petters fraud.
As we discussed, while the Court would not be a party to the proposed Plea Agreement, given other sentences imposed by the Court, and given the possibility of your cooperation with regard to the pending case against [co-defendant] James Fry and possibly with regard to others, I have told you that I believe there is a likelihood that a sentence at the low end of three years and the high end of seven years could be imposed by the Court. Given that Robert White received a sentence of five years, that [Petters coconspirator] Greg Bell received a sentence of six years, and that the Government will inform the Court that it deems you less culpable than Mr. White; given that strong evidence of your good works and the support of many will be before the Court at sentencing and not opposed by the Government; given that you have significant health issues; and given that you likely will earn maximum good-time credit, I have advised you that I believe a sentence of less than five years is a real possibility under the plea bargain as proposed by Mr. Rank.

(Id.)[8] Defendant asserts that after seeing these "promises" in writing for the first time, and after considering Volling's predictions about a possible sentence, he began to reconsider whether he should plead guilty. (Decl. ¶ 21.) He agreed to meet with Volling again on January 31, 2013, to discuss the matter further.

At that January 31 meeting, Defendant purportedly reviewed a draft of the Plea Agreement; that draft, however, did not contain any of the "promises" discussed above. (Id. ¶ 23.) When he asked about their absence, Volling "assured [him]... that... Rank could be trusted to abide by the promises contained in [the] January 30 letter." (Id.) Defendant then signed the Plea Agreement, even though he "felt reluctant to" do so. (Id. ¶¶ 23-24.)[9]

Rank, Volling, and Defendant then appeared before the Court for a change-of-plea hearing on the afternoon of February 1, 2013. During the hearing, Defendant apparently was "not concerned" when Rank asked him to affirm that no promises had been made beyond those in the written Plea Agreement, since Volling had assured him Rank was true to his word. (Id. ¶ 26.) Nor did he hesitate to confirm to the Court that no one had made any "promises to get [him] to enter into th[e] plea agreement" and that no one had told him what his sentence would be. (2/1/13 Hr'g Tr. at 34, 36-37.) Of particular relevance here, the hearing transcript reveals the following:

MR. RANK: Mr. Vennes, I'm showing you a document here. It's a document that is a 12-page document and it is entitled Plea Agreement and Sentencing Stipulations. Do you see this document?
THE DEFENDANT: Yes.
MR. RANK: And, sir, have you had an opportunity to go through this plea agreement in its entirety with your attorney?
THE DEFENDANT: I have.
MR. RANK: Have you had a chance to yourself read through it in detail?
THE DEFENDANT: Yes.
MR. RANK: Do you understand what the plea agreement here is doing and what you're entering into here today?
THE DEFENDANT: Yes.
* * *
MR. RANK: And you also understand, sir, that there are certain statutory penalties that are associated with the plea that you're entering here today?
THE DEFENDANT: Yep.
MR. RANK: And with respect to Count 3 of the indictment [securities fraud], that carries a statutory penalty of imprisonment up to five years.... Do you understand that, sir?
THE DEFENDANT: Yes.
MR. RANK: Do you also understand that Count 26 of the indictment [money laundering] carries a statutory penalty of up to 10 years.... Do you understand that?
THE DEFENDANT: Yes.
* * *
THE COURT: One of the consequences [of pleading guilty] is it's going to be over. There's going to be no - nothing you can do about it. Your plea will be in regardless of whether you take an appeal or you're allowed to take an appeal, but the guilty verdict will be in place. There's nothing you can do about that. So there's no way of changing your decision in that regard.
So if during the course of the rest of this hearing here this afternoon there are any questions about this plea agreement that come to your mind for the first time, something that hadn't dawned on you until you started hearing the questions from just being in the courtroom which you would like to talk to Mr. Volling about, or any questions you have of me or any questions of Mr. Rank, you should feel free to ask those questions. Just let me know, we'll stop, we'll take a recess or whatever we have to do, just so you can talk with counsel or you can ask questions of me.
And there are no - I tell this to every Defendant - there are no dumb questions, there are no silly questions. Anything that's on your mind that affects this plea agreement you should feel free to ask me. All you have to do is just raise your hand and we'll try to address whatever those concerns are.
I mention it because if I accept the plea, the time for asking those questions, it's going to be too late after today. So if you have any reservations about what's in this plea agreement, feel free to let me know that. Do you understand that?
THE DEFENDANT: Yes.
* * *
MR. RANK: And lastly, sir, before I get to the factual basis, you understand that this is a complete agreement between the United States and yourself. Do you understand that?
THE DEFENDANT: Yes.
MR. RANK: And is it true that there are no other agreements, promises, representations, or understandings that are getting ...

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