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United States v. Holloway

United States Court of Appeals, Tenth Circuit

September 19, 2019

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. Nos. 2:17-CV-00267-RJS & 2:11-CR-00984-RJS-1)

          Gregory W. Stevens, Salt Lake City, UT, for the Appellant.

          Ryan D. Tenney (John W. Huber, United States Attorney, with him on the brief), Office of the United States Attorney, District of Utah, Salt Lake City, UT, for the Appellee.

          Before HARTZ, MURPHY, and CARSON, Circuit Judges.

          CARSON, CIRCUIT JUDGE.

         A jury convicted Robert Holloway in federal district court of four counts of wire fraud in violation of 18 U.S.C. § 1343 and one count of submitting a false tax return in violation of 26 U.S.C. § 7206. The district court sentenced Holloway to 225 months' imprisonment, after applying a six-level enhancement for crimes involving 250 or more victims under U.S.S.G. § 2B1.1(b)(2)(C) (2014).[1] After unsuccessfully challenging his conviction and sentence on direct appeal, Holloway filed a 28 U.S.C. § 2255 motion raising three grounds for relief: (1) that a total breakdown of communication between Holloway and his trial counsel caused his trial counsel to perform ineffectively; (2) that his trial counsel acted ineffectively by failing to argue that the evidence did not support the district court's application of the six-level sentencing enhancement; and (3) that the prosecution violated his due process rights by failing to turn over to the defense favorable information possessed by a prosecution witness contrary to Brady v. Maryland, 373 U.S. 83 (1963). The district court denied Holloway's § 2255 motion, but granted a certificate of appealability on all three issues. We exercise jurisdiction pursuant to 28 U.S.C. §§ 1291 and 2253 and affirm.

         I.

         Robert Holloway was the president and CEO of U.S. Ventures-a company that traded in the futures market. Holloway told investors he had developed a special algorithm that allowed him to trade without losses. He claimed that because of the algorithm he "could trade the markets and make money whether the market went up or the market went down."

         Holloway's grandiose claims were false. Instead, for several years Holloway operated U.S. Ventures as a "Ponzi deal"-"taking new clients' money and paying out salaries and distributions." This scheme continued until 2007 when the SEC froze his accounts.

         Holloway subsequently faced criminal charges. Relevant to this case, federal prosecutors indicted Holloway on four counts of wire fraud and one count of submitting a false tax return.

         Attorney Edwin Wall initially represented Holloway in his criminal case. Approximately a month and a half before trial was set to begin, Wall withdrew as counsel for Holloway. After Wall's withdrawal, the district court vacated the trial date due to the complexity of the case and appointed attorney Kevin Murphy to represent Holloway.

         On November 19, 2013, the district court held a status conference hearing with the parties. Murphy mentioned a long-shot chance that Holloway might retain private counsel before trial. The judge responded directly to Holloway: "[I]f you're going to retain counsel you're going to do so by the end of the year. We're not going to delay this trial date. And so if you hire a lawyer, you are welcome to do so, but it has got to be by the end of the calendar year so he can get in and get up to speed and maintain all of the dates that we have got."

         In March 2014, Murphy filed a motion requesting a hearing on Holloway's competency. In support of the motion, Murphy attached a competency evaluation and a supplemental evaluator memorandum written by Dr. Jonathan Bone. During his initial competency evaluation, Dr. Bone determined that Holloway exhibited mild paranoia, and features of mania and hypomania. He also noted that Holloway met the criteria for Narcissistic Personality Disorder. Yet, he ultimately concluded that Holloway was competent to stand trial.

         In his supplemental evaluation, however, Dr. Bone expressed greater concern regarding Holloway's disposition and ability to stand trial. Dr. Bone stated that he "believe[d] that [Holloway was] likely compromised with regard to judgment, decision-making, and assisting properly in his defense."

         For his part, Holloway adamantly opposed an incompetency defense, and his counsel's supposed fixation on his mental health frustrated him. Emails between Holloway and Murphy demonstrate the increasing strain these competency evaluations placed on the attorney-client relationship. For example, Murphy repeatedly sought Holloway's permission to disclose Dr. Bone's evaluation to prosecutors. Holloway denied each request.[2] In an email dated March 24, 2014, Murphy requested that Holloway allow him to talk with prosecutors generally about Dr. Bone's evaluation without disclosing it to them. Holloway responded:

My answer would be. Since i strongly disagree with the report, especially the assertion of you and Dr. Bone what it was faked My answer is a definate no. I do not want anything regarding this report discussed in anyway shape or form with prosecutors or anyone else. As far as a more definite pea bargain i am not interested in showing our ( your) hand at this time. At such time as it would be appropriate i will let you know.[[3]]

         Holloway expressed a similar sentiment in an email dated March 27, 2014, after Murphy again asked for permission to disclose Holloway's mental health evaluation to prosecutors:

You told me that Bone was brought in to evaluate whether or not there was an attempt to defraud. I was also told by you that the investigator was brought in by you on limited resources to investigate potential lead that would bring out the truth. Instead it appears Dr. Bone & the investigators were brought on solely to portray me as mentally ill. If I had of known Dr. Bones background regarding his work with as an expert on the criminally insane or innocence by being mentally ill pleas, and that was your intent from the beginning, I would have gone in completely different direction.
Spending the limited resources that the Government allocated to you to attempt to convince me into a plea deal was not part of the intended plan. We have now wasted 7 months of my life to be nowhere. Being creative, not being like everyone else in a box does not equate mental illness. I do not appreciate the constant reference to your belief that I am mentally ill or your belief that I faked the results of the test merely because the results did not support your theory of the case.
Your job is to defend me not package me for the purpose of an easy plea. In my last meeting with you & Dr. Bone I felt like I was ambushed. The accusations and language used by both of you which is still continuing is what I would expect from an accuser not from my counsel. The last 7 months should have been spent addressing the facts of the case rather than looking for the simple way out. Early on it is apparent you bought into the Government side of the case rather than attacking it or addressing my side.
With what little time we have we need to spend it building my case. To show Government that report is of no benefit to my case. Rather showing that each of the Government witnesses have a reason to lie, that I did not intently mislead any investor and that the Governments attempt to make me look like the ringmaster is not true.

         On March 31, 2014, Murphy asked Holloway if he would agree to a second psychological evaluation. Holloway wrote back:

It has been my written and verbal direction since retaining you to seek out the truth that would prove same and get closure for me and my family.
Instead it seems evident that your intent is to take the easy road, try to prove me insane, dump me and go on with your law practice. After multiple emails and verbal instructions to cease the insults, and personal attacks yet you continue. I will ask you one more time to stop the attacks. It is apparent that you have no interest in defending me . . . spending 7 months doing nothing to same. If you want out . . . get me a large delay and i will figure it out myself. Its apparent the person who is afraid of the Prosecutor is you not me.
Answer is again no . . . Had i known you were going to this focused on trying to ambush and almost extort me into saying uncle i would have never agreed. Had i known the background of Bone whos deal is criminal insane plea . . . same

         The same day, Murphy filed the motion seeking a hearing on the competency issue.

         On April 4, 2014, a federal magistrate judge held a status hearing. After reviewing Murphy's motion on competency and hearing from both parties, the judge issued an Order for Competency Evaluation.

         Scheduling the court-ordered competency evaluation caused even more friction between Holloway and Murphy. Holloway was adamant that the evaluation not be scheduled over a weekend and that he be given several weeks' notice so that he could take the best flights. He also pointed out to Murphy that the prosecutors scheduled the evaluation over Easter weekend, and asked Murphy to request different dates. Murphy followed up with prosecutors on Holloway's request and later informed Holloway that they "refuse to re-schedule the competency examination dates, even though I reminded them it is Easter weekend. They are making arrangements to pay your air fare to come here for the examination."

         Dr. Noel Gardner evaluated Holloway on April 19, 2014. He determined that Holloway has "situational[ly] paranoid interpersonal perspectives" and has a "narcissistic personality makeup." He also concluded that Holloway has a "very mild form of persistent hypomania." But despite these conditions, Dr. Garner concluded that Holloway "has the capacity but not the willingness to carefully assess [his] legal options" and that Holloway did not have a "mental disease or defect" that would render him incompetent "to stand trial."

         On June 3, 2014, the district court held another status conference hearing.[4] The district court invited Holloway to address the issue of his competency. Holloway stated:

Well, Your Honor, I trust the direction that-that my counsel is taking. I certainly feel no lack of competency in going to court and telling the real story, and have no lack of confidence that when we get there we're going to be able to prove innocence. So I'm not-I'm not-I certainly don't want to be-you know, I'm ready to go. I mean I have-I have no desire to (unintelligible) negate my right to be able to have a fair trial. So I'm sure we don't want to go down that road.

         At the hearing, Holloway also told the district court that he had not seen a copy of Dr. Bone's evaluation, although he asked for a copy, and that he learned of the results from Dr. Garner's evaluation during the hearing. The district court eventually found that Holloway was competent to stand trial.

         The day after the hearing, Holloway expressed his anger regarding Murphy's focus on competency. Holloway emailed Murphy that:

The competency fiasco is not behind us . . . It was your tact not mine. As far as i am concerned and it is agreed by a great deal of people is we have wasted 1 year of valuable time based on the understanding that you do not understand what the make up of a complex man is. You from day one convicted me and really do believe what the prosecutors have. You have emphatically stressed that you think i am guilty and mentally ill and argued with the judge that Gardner was wrong ..... so it is not behind us.
I am not mad at you but its not behind us. You humiliated your client by going outside of my instructions and ...

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