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United States v. Holloway

United States Court of Appeals, Tenth Circuit

June 20, 2016

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
ROBERT LEE HOLLOWAY, Defendant-Appellant.

         Appeal from the United States District Court for the District of Utah (D.C. No. 2:11-CR-00984-RJS-1)

          Gregory W. Stevens of Salt Lake City, Utah, for Defendant-Appellant.

          Dave Backman, Assistant United States Attorney (John W. Huber, United States Attorney, with him on the brief), District of Utah, Salt Lake City, Utah, for Plaintiff-Appellee.

          Before TYMKOVICH, Chief Judge, SEYMOUR and LUCERO, Circuit Judges.

          SEYMOUR, Circuit Judge.

         A jury convicted Robert Lee Holloway of four counts of wire fraud in violation of 18 U.S.C. § 1343 and one count of making and subscribing a false tax return in violation of 26 U.S.C. § 7206(1). The district court sentenced Mr. Holloway to 225 months of imprisonment on all five counts. On appeal, Mr. Holloway contends he was denied his Sixth Amendment right to counsel of his choice and that the district court allowed impermissible victim impact testimony, denied him his constitutional right to confront witnesses, and improperly enhanced his sentence. We affirm.

         BACKGROUND

         The charges against Mr. Holloway were the result of a scheme he created through his company, U.S. Ventures, that defrauded over 250 investors and caused losses in excess of $15 million. Mr. Holloway began soliciting investors in 2005 by guaranteeing incredible returns in futures markets due to a mathematical algorithm he had created. When Mr. Holloway failed to realize the gains he promised, he started defrauding his investors by stating that his trading was profitable even though he lost substantial amounts of money, using money from new investors to pay other investors, and fabricating reports to investors stating that his daily returns were between 0 to 1.15% and that his trading never resulted in a loss. He also diverted investor funds for his own personal use.

         At his initial appearance on December 16, 2011, the district court provided Mr. Holloway with an attorney. Approximately twenty months later, Mr. Holloway's first attorney withdrew and another attorney was appointed to represent him. At a hearing on November 19, 2013, the magistrate judge told Mr. Holloway that it would be the last time his court-appointed attorney would be replaced and stressed to him that if he wished to retain his own attorney, he must do so by the end of 2013 to avoid interfering with the trial date. On June 23, 2014, the district court entered a trial order requiring that any motion to substitute counsel be filed at least 21 days before trial. On July 2, the court appointed an additional attorney as co-counsel for Mr. Holloway through trial.

         Between March 2014 and July 2014, Mr. Holloway's appointed attorney attempted numerous times, without success, to show that Mr. Holloway was not competent to stand trial. Mr. Holloway appeared to be opposed to this trial strategy, stating on June 3 that "I certainly feel no lack of competency in going to court and telling the real story." Aplt. Br. at 11. On July 25, six days before trial, Mr. Holloway's court-appointed attorneys filed a motion to withdraw and to obtain a continuance, stating that Mr. Holloway had retained his own attorney. At a hearing to examine the motion, the district court recognized that "Mr. Holloway is entitled to counsel of his choice" and held that his new attorney, who attended the hearing, could appear and work alongside his current attorneys. Rec., vol. 4 at 194. But the court refused to reschedule the trial date and it denied the appointed attorneys' motion to withdraw and to continue the trial. After its ruling, the court took a fifteen minute recess so Mr. Holloway and all three attorneys could decide how to proceed. After the recess, one of Mr. Holloway's appointed attorneys stated "[t]he decision has been made that [Mr. Holloway's retained attorney] will not be entering her appearance at this time, " and that "[d]iscussion was had as to whether Mr. Holloway might wish to make a record on his own behalf and he has declined to do so." Id. at 200.

         At trial, the government presented seven witnesses to show that Mr. Holloway had made false representations to investors. Over the objection of Mr. Holloway, four of those witnesses were allowed to testify to the impact Mr. Holloway's fraudulent scheme had on their lives. Their testimony is outlined infra in our discussion of this issue. The government also introduced thousands of pages of trading records and reports to investors that were designed to show Mr. Holloway's specific intent to defraud, the only element of wire fraud that Mr. Holloway denied. Mr. Holloway was convicted on all five counts, and the district court subsequently sentenced him to 225 months in prison.

         Mr. Holloway filed a timely appeal, claiming: (1) the district court's denial of his motion to substitute counsel deprived him of his Sixth Amendment right to counsel of choice; (2) the district court's admission of the victim-impact statements was an abuse of discretion; (3) the district court violated the Confrontation Clause by not allowing him to fully cross-examine two witnesses; and (4) the district court erroneously included a six-level enhancement of his sentence based on the claimed number of victims. We address each issue in turn.

         DISCUSSION

         A. Sixth Amendment Right to Counsel of Choice

         The Sixth Amendment guarantees that "[i]n all criminal prosecutions, the accused shall enjoy the right to . . . have Assistance of Counsel for his defence." U.S. Const. amend VI. The Supreme Court has explained that "an element of this right is the right of a defendant who does not require appointed counsel to choose who will represent him." United States v. Gonzalez-Lopez, 548 U.S. 140, 144 (2006). This right "stems from a defendant's right to decide what kind of defense he wishes to present." United States v. Collins, 920 F.2d 619, 625 (10th Cir. 1990) (citing United States v. Nichols, 841 F.2d 1485, 1502 (10th Cir. 1988)). We have recognized that "'[a]ttorneys are not fungible;' often 'the most important decision a defendant makes in shaping his defense is his selection of an attorney.'" Id. (quoting United States v. Laura, 607 F.2d 52, 56 (3d Cir. 1979)); accord United States v. Jones, 160 F.3d 641, 646 (10th Cir. 1998) ("[T]he selection of one attorney over another can profoundly affect the course and outcome of a trial.").

         When a defendant is wrongly denied his right to counsel of choice, his deprivation is "complete" at the time of the denial "regardless of the quality of the representation he received." Gonzalez-Lopez, 548 U.S. at 148; see also United States v. McKeighan, 685 F.3d 956, 966 (10th Cir. 2012). Because "erroneous deprivation of the right to counsel of choice [has] 'consequences that are necessarily unquantifiable and indeterminate, [the deprivation] unquestionably qualifies as structural error.'" Gonzalez-Lopez, 548 U.S. at 150 (quoting Sullivan v. Louisiana, 508 U.S. 275, 282 (1993)). Accordingly, '[i]f a defendant is wrongly denied his counsel of choice, no showing of prejudice is necessary to establish constitutional error." McKeighan, 685 F.3d at 966.

         "Although there is a presumption in favor of a defendant's counsel of choice, the right is not absolute." Id. at 966. The Supreme Court has long recognized "a trial court's wide latitude in balancing the right to counsel of choice against the needs of fairness and against the demands of its calendar." Gonzalez-Lopez, 548 U.S. at 152 (internal citations omitted). As we have explained:

A defendant's choice of counsel may be denied by a court's refusal to grant a continuance necessary to allow the chosen attorney to participate in the case. This issue has arisen when a defendant had not obtained an attorney by the time of trial, United States v. Kelm, 827 F.2d 1319, 1320-21 (9th Cir. 1987); United States v. Leavitt, 608 F.2d 1290, 1293-94 (9th Cir. 1979); when a chosen attorney claimed that he or she had inadequate time to prepare for trial, Birt, 725 F.2d at 591-92; United States v. LaMonte, 684 F.2d 672 (10th Cir. 1982); Linton, 656 F.2d at 208; . . . or when a defendant sought to obtain a new attorney immediately before, Urquhart v. Lockhart, 726 F.2d 1316, 1319 (8th Cir. 1984), or during trial United States v. Lowe, 569 F.2d 1113, 1116 (10th Cir. [(1978]).

Nichols, 841 F.2d at 1504. Thus, "[o]nly when the trial court unreasonably or arbitrarily interferes with a defendant's right to counsel of choice do we agree a conviction cannot stand, 'irrespective of whether the defendant has been prejudiced.'" United States v. Mendoza-Salgado, 964 F.2d 993, 1016 (10th Cir. 1992) (quoting Collins, 920 F.2d at 625).

         On appeal, Mr. Holloway states he "is not claiming that the District Court unreasonably or arbitrarily interfered with his right to counsel." Aplt. Br. at 37. In fact, he concedes the court's actions in denying his motion to withdraw and to continue trial were appropriate because "Mr. Holloway missed the deadline set by the Court for retaining counsel, his delay would have inconvenienced the government and its witnesses, and Mr. Holloway's then-existing counsel stated that they were willing and able to proceed." Id. at 37-38. Thus, as his own brief admits, the district court did not deprive Mr. Holloway of his Sixth Amendment right to counsel of choice.[1]

         Instead, Mr. Holloway's argument is more properly characterized as a claim of ineffective assistance of counsel. He contends there was a total breakdown in communication between him and his appointed counsel, as evidenced by the disagreement about trial strategy and his competency to stand trial, as well as the fact that his appointed attorneys were unaware he had secured a separate attorney. Mr. Holloway asserts that "[a] complete breakdown in communication between defendant and his or her counsel thus implicates the consideration whether counsel is ineffective under the Sixth Amendment." Id. at 38 (emphasis added). Every case that Mr. Holloway cites in support of his argument involved an ineffective assistance of counsel claim. See, e.g., Romero v. Furlong, 215 F.3d 1107, 1113 (10th Cir. 2000) ("In deciding whether a complete breakdown in communication rendered Appellant's representation constitutionally ineffective, we consider four factors." (emphasis added)); Brown v. Craven, 424 F.2d 1166, 1170 (9th Cir. 1970) ("[T]o compel one charged with grievous crime to undergo a trial with the assistance of an attorney with whom he has become embroiled in irreconcilable conflict is to deprive him of the effective assistance of any counsel whatsoever."); United States v. Soto Hernandez, 849 F.2d 1325, 1328 (10th Cir. 1988) (complete breakdown in communication between attorney and client may give rise to presumption of ineffectiveness). Mr. Holloway's argument is thus that he was denied effective assistance of counsel, not that he was denied counsel of choice.

         While the current record does not support Mr. Holloway's complete breakdown claim, [2] we do not reach that issue because "[i]neffective assistance of counsel claims should be brought in collateral proceedings, not on direct appeal." United States v. Galloway, 56 F.3d 1239, 1240 (10th Cir. 1995) (en banc). The reason for this general rule is that "[a] factual record must be developed in and addressed by the district court in the first instance for effective review. Even if evidence is not necessary, at the very least counsel accused of deficient performance can explain their reasoning and actions, and the district court can render its opinion on the merits of the claim." Id. Accordingly, if Mr. Holloway wishes to establish there was a complete breakdown in communication between him and his appointed attorneys that rendered their representation ineffective, he must do so in collateral proceedings.

         B. Victim Impact Statements

         Relying on United States v. Copple, 24 F.3d 535 (3d Cir. 1994), Mr. Holloway contends the district court erred by allowing the government to present the testimony of several victims concerning the emotional impact the financial loss had on their personal lives. He maintains the error was not harmless because of the importance of the testimony "in establishing Mr. Holloway's guilt and the emphasis placed on that . . . testimony during closing [arguments] by the government." Aplt. Br. at 31. Although we question whether the district court should have allowed emotionally charged testimony, our review of the record persuades us any error was harmless in light of the overwhelming evidence of Mr. Holloway's specific intent to defraud investors.

         At trial, a number of victims testified about the impact the fraud had on their lives.[3] David Story testified that he and approximately forty of his investors received only 3.1 million of the four million invested with U.S. Ventures, that he had to sell everything to pay back the second-tier investors, that he lost relationships as a result, and that he ultimately filed for bankruptcy. Stanley Miller testified that he lost the $136, 000 he invested in U.S. Ventures while unemployed, and that he had cashed out his IRA and sold his house for the proceeds in order to invest. He further stated that "it separated our family" and that "we didn't end up with enough money to be able to afford to buy another house, and I wasn't getting enough from Social Security to afford an apartment." Rec., vol. 4 at 868-69. Mr. Miller broke down emotionally during this testimony. In addition, Timothy Kohl testified he invested $94, 000 in U.S. Ventures through Winsome ...


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