17‐629‐cr (L) United States v. Galanis

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 10th day of January, two thousand nineteen.

PRESENT: ROBERT D. SACK, BARRINGTON D. PARKER, DENNY CHIN, Circuit Judges.

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UNITED STATES OF AMERICA, Appellee,

v. 17‐629‐cr (L), 17‐2713‐cr

JASON GALANIS, Defendant‐Appellant.*

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* The Clerk of the Court is directed to amend the official caption to conform to the above. FOR APPELLEE: BRIAN R. BLAIS, Assistant United States Attorney (Aimee Hector, Rebecca Mermelstein, Won S. Shin, Assistant United States Attorneys, on the brief), for Geoffrey S. Berman, United States Attorney for the Southern District of New York, New York, New York.

FOR DEFENDANT‐APPELLANT DANIEL S. NOOTER, Law Offices of JASON GALANIS: Daniel S. Nooter, Washington, DC; Christopher Madiou, Law offices of Christopher Madiou, New York, New York.

Appeals from the United States District Court for the Southern District of

New York (Castel, Abrams, JJ.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that case no. 17‐629‐cr is REMANDED to the district

court and case no. 17‐2713‐cr will be HELD pending further proceedings.

Defendant‐appellant Jason Galanis appeals from his judgments of

conviction in two separate proceedings: in district court docket number 15‐cr‐643

(Castel, J.) convicting him of securities fraud violations relating to Gerova Financial

Group, Ltd. (the ʺGerova Proceedingʺ), and in district court docket number 16‐cr‐371

(Abrams, J.) convicting him of securities fraud violations relating to the Wakpamni Lake

Community Corporation (the ʺWakpamni Proceedingʺ).1 Galanis argues on appeal in

1 The Gerova Proceeding is before us as appeal number 17‐629‐cr (L). The Wakpamni Proceeding is before us as appeal number 17‐2713‐cr. The 17‐629‐cr (L) appeal was consolidated with the appeal of

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both cases that his Sixth Amendment right to effective assistance of counsel was

violated. We assume the partiesʹ familiarity with the underlying facts, procedural

history, and issues on appeal.

On September 21, 2015, Galanis was indicted on nine counts in the

Southern District of New York in the Gerova Proceeding before Judge Castel. Galanis

was represented in that matter by Thomas Mazzucco of the California law firm

Murphy, Pearson, Bradley & Feeney (ʺMPBFʺ). On May 31, 2016, while the Gerova

Proceeding was pending, Galanis was separately indicted on four counts in the

Wakpamni Proceeding before Judge Abrams.2 On July 11, 2016, Judge Abrams held a

status conference in the Wakpamni Proceeding, at which point Galanis was not

represented by counsel in that case. Mazzucco and MPBF deemed the Wakpamni

Proceeding to be beyond the scope of their representation, and thus Lisa Scolari

appeared at the status conference, pursuant to the Criminal Justice Act (ʺCJAʺ), on

Galanisʹs behalf. The district court declined to appoint Scolari as counsel at that time,

apparently because Galanis had not shown that he qualified for CJA counsel, and

instead continued the Wakpamni Proceeding for one month to allow Galanis to retain

counsel or make an application for court‐appointed counsel.

co‐defendant Gary Hirst. Because Galanis and Hirst raise different issues, we address them in separate orders. See United States v. Hirst, No. 17‐2552‐cr,

(2d Cir. Dec. 14, 2018). 2 A superseding indictment containing the same four counts against Galanis was filed on November 2, 2016.

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On July 19, 2016, about a week after the status conference in the

Wakpamni Proceeding, the government extended two plea offers to Galanis through

Mazzucco, his counsel in the Gerova Proceeding. The first plea offer (the ʺGerova

Offerʺ) required Galanis to plead guilty to Counts One, Two, Five, and Eight of the

Gerova indictment, in exchange for the governmentʹs agreement to dismiss the

remaining counts against him in that proceeding. The second plea offer (the ʺGerova‐

Wakpamni Offerʺ) required Galanis to plead guilty to a superseding information to be

filed at the time of his guilty plea, which would contain seven counts: the same four

counts in the Gerova Offer ‐‐ One, Two, Five, and Eight ‐‐ as well as Counts One, Two,

and Three of the Wakpamni indictment. In exchange, the government would dismiss

the remaining counts in both the Gerova and Wakpamni Proceedings. Both plea offer

letters contained the same subject line: ʺRe: United States v. Jason Galanis, [] 15 Cr. 643

(PKC).ʺ J. Appʹx at 113, 120. The government knew at the time that Galanis was

unrepresented in the Wakpamni Proceeding.

On July 21, 2016, two days after the plea offers were extended, Galanis

pleaded guilty pursuant to the Gerova Offer. The existence of the Gerova‐Wakpamni

Offer was not mentioned at the plea hearing.

On August 12, 2016, the district court in the Wakpamni Proceeding

appointed Scolari to be CJA counsel. Christopher Madiou was named additional CJA

counsel on August 15, 2016.

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On December 19, 2016, the government extended to Galanis through

Scolari a plea offer (the ʺWakpamni Offerʺ), which required Galanis to plead guilty to

the same three Wakpamni counts contemplated in the Gerova‐Wakpamni Offer ‐‐

Counts One, Two, and Three. In exchange, the government agreed to dismiss the

remaining count against him in the Wakpamni indictment. On January 19, 2017,

Galanis pleaded guilty pursuant to the Wakpamni Offer.

On February 15, 2017, Galanis was sentenced in the Gerova Proceeding to

135 monthsʹ incarceration. Although the Guidelines range stipulated to in the Gerova

Offer was 121 to 151 months, the Guidelines range applicable at the time of sentencing

was 135 to 168 months, because Galanisʹs intervening plea in the Wakpamni Proceeding

raised his criminal history category from II to III. See U.S.S.G. § 4A1.2(a)(4). On August

11, 2017, Galanis was sentenced in the Wakpamni Proceeding to 188 monthsʹ

imprisonment, 60 months of which were to be served consecutively to the 135‐month

sentence in the Gerova Proceeding. The Guidelines range stipulated to in the

Wakpamni Offer was 188 to 235 months, reflecting a criminal history category of III,

rather than II, due to Galanisʹs guilty plea in the Gerova Proceeding. Thus, although the

district court in both proceedings sentenced Galanis to the low end of the respective

Guidelines range, his effective combined sentence was 195 months. By contrast, the

joint Gerova‐Wakpamni Offer had a stipulated Guidelines range of 168 to 210 monthsʹ

imprisonment.

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On March 2, 2017, Galanis timely filed a notice of appeal in the Gerova

Proceeding. On August 29, 2017, Galanis timely filed a notice of appeal in the

Wakpamni Proceeding. On October 5, 2017, Galanis filed a pro se motion in the Gerova

Proceeding in the district court, seeking to vacate his conviction pursuant to Fed. R.

Crim. P. 33 as a result of Mazzuccoʹs alleged ineffective assistance. See Dkt. Nos. 448‐49.

The motion is stayed pending the outcome of these appeals. See Fed. R. Crim. P.

33(b)(1).

DISCUSSION

Ineffective‐assistance claims regarding plea offers are covered by the

familiar two‐prong test set forth in Strickland v. Washington,

(1984). The

defendant must show that (1) his attorneyʹs performance was deficient and (2) the

deficient performance prejudiced him. Missouri v. Frye,

(2012). In the

context of plea offers, counsel performs deficiently when he fails to (1) ʺcommunicate

formal offers from the prosecution to accept a plea on terms and conditions that may be

favorable to the accused,ʺ id at 145, or (2) ʺinform the defendant of the strengths and

weaknesses of the case against him, as well as the alternative sentences to which he will

most likely be exposed,ʺ Purdy v. United States,

, 44‐45 (2d Cir. 2000) (citing

United States v. Gordon,

(2d Cir. 1998)). To prove prejudice, the

defendant must show that, but for the counselʹs errors, there is a reasonable probability

that (1) he would have accepted a plea offer, (2) the plea offer would not have been

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withdrawn by the prosecution in light of intervening circumstances, (3) the court would

have accepted the terms of the plea offer, and (4) ʺthe conviction or sentence, or both,

under the offerʹs terms would have been less severe than under the judgment and

sentence that in fact were imposed.ʺ Lafler v. Cooper,

(2012); see also

Fulton v. Graham,

(2d Cir. 2015).

We have serious questions as to whether Galanis received effective

assistance of counsel. On July 19, 2016, Mazzucco received two plea offers from the

government on Galanisʹs behalf; on July 20, he and his co‐counsel met with Galanis at

the Metropolitan Correctional Center; and by the end of the day on July 21, Galanis had

pleaded guilty pursuant to the Gerova Offer. According to Galanis, ʺ[t]he almost

immediate timing of the plea hearing . . . was wholly to accommodate the fact that

Mazzucco and [his colleague] Larson were flying back to California later that day.ʺ J.

Appʹx at 199. Galanis avers that Mazzucco and a colleague had been denied year‐end

bonuses by the firm as a consequence of allegedly unpaid invoices in the Gerova

representation and that, in October 2015, Mazzucco and his colleagues at the firm

discussed by email how going to trial in the Gerova Proceeding would carry

ʺenormousʺ costs in the ʺmillionsʺ and that it would, therefore, be ʺprudentʺ to consider

having a public defender appointed instead.

at 198‐99 & n.1.

It is against this backdrop that we consider Galanisʹs claim of ineffective

assistance. Galanis avers that ʺ[a]lthough Mazzucco and Larson discussed the Gerova‐

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only plea offer with [him], neither attorney counseled [him] concerning the merits of

accepting the second, joint Gerova‐Wakpamni plea offer.ʺ Id. at 197. This assertion has

some support in the record. At Galanisʹs sentencing in the Gerova Proceeding, which

occurred roughly one month after he accepted the Wakpamni Offer, Mazzucco argued

to the court that Galanisʹs criminal history category should be II rather than III, despite

the mechanical operation of U.S.S.G. § 4A1.2(a)(4). Mazzucco stated:

Iʹm here to be candid with the Court. Thatʹs why I would like to make the chronological argument about the unfairness of . . . the base guideline calculation. . . . [W]hen [Galanis] pled to this case in July, there was an offer from the government to plead to both cases: This matter and the matter before Judge Abrams . . . . We could not enter into a disposition into that matter because, one, Mr. Galanis at the time was pro se; we were not appointed to represent him, nor were we retained; I had not seen a single lick of discovery. . . . I did forward some information . . . as to why he shouldn’t be indicted in the case. But I was not professionally prepared ‐‐ nor could I have been ‐‐ to enter into that joint disposition. So we chose this disposition.

J. Appʹx at 164‐66.

These admissions are troubling. They are made more troubling by the fact

that (1) the government knew at the time it extended the plea offers that Galanis was

unrepresented in the Wakpamni Proceeding, and (2) neither the government nor

defense counsel made any mention of the joint Gerova‐Wakpamni Offer at Galanisʹs

plea hearing in the Gerova Proceeding. See Frye,

(noting that a plea

hearing provides an opportunity for the trial court and all counsel to ensure that ʺthe

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defendant understands the process that led to any offer, the advantages and

disadvantages of accepting it, and the sentencing consequences or possibilities that will

ensue once a conviction is entered based upon the pleaʺ). If Galanisʹs assertions are

correct, he accepted the Gerova Offer without any advice as to whether entering

separate pleas in the two proceedings would result in a higher criminal history category

and a longer sentence.

The record regarding prejudice is similarly concerning. Galanis avers that

he ʺabsolutely would not have rejected that joint plea offer and pleaded separately to

the two cases had [he] been correctly and competently informed . . . about the effect that

doing so would have both on [his] Guidelines criminal history score and on the

likelihood of receiving consecutive sentences.ʺ J. Appʹx at 202. Similarly, at his

sentencing in the Wakpamni Proceeding, Scolari stated that ʺ[o]nce we were appointed

. . . we reached out to the government and said, Mr. Galanis wants to plead on this other

case. He should have taken the joint plea and he wants to take the plea and the

government said no.ʺ

. Had Galanis accepted the Gerova‐Wakpamni Offer,

his criminal history category at sentencing would have been II, rather than III, and there

would not have been any additional sentencing in the Wakpamni matter, as those

counts were to be disposed of. By pleading guilty pursuant to the Gerova Offer,

Galanisʹs criminal history category increased to III in both the Gerova Proceeding and

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the Wakpamni Proceeding, and Galanis exposed himself to the possibility of multiple,

potentially consecutive, sentences.

Lastly, the record provides some support for Galanisʹs argument that

acceptance of the Gerova‐Wakpamni Offer would have led to a less severe sentence

than that actually imposed. The district court in the Gerova Proceeding imposed a

sentence of 135 monthsʹ incarceration. The district court in the Wakpamni Proceeding

imposed a sentence of 188 monthsʹ incarceration, with 60 of those months to be served

consecutively to Galanisʹs 135‐month sentence in the Gerova Proceeding. Both of these

sentences fell at the low end of their respective Guidelines range. Galanisʹs actual

effective sentence was thus 195 monthsʹ imprisonment ‐‐ toward the upper end of the

168‐to‐210‐month range contemplated in the Gerova‐Wakpamni Offer. Had Galanis

been sentenced at the low end of that range, 168 months, his sentence would have been

27 months less than the combined sentence he actually received.

* * *

ʺ[E]xcept in highly unusual circumstances,ʺ an allegedly ineffective

lawyer should have ʺan opportunity to be heard and to present evidence, in the form of

live testimony, affidavits, or briefs.ʺ Sparman v. Edwards,

(2d Cir. 1998)

(per curiam). Accordingly, and pursuant to our practice in United States v. Jacobson,

(2d Cir. 1994), we remand to the district court such jurisdiction as is

necessary to consider and rule upon Galanisʹs pending Rule 33 motion in the Gerova

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Proceeding. See Dkt. Nos. 448‐49. This Court (and this panel) shall retain jurisdiction

over the matter. Upon a decision by the district court, full jurisdiction will be restored

to this Court and this panel by either party informing us by letter of the district courtʹs

decision. We note that the government represented at oral argument that ʺif there was a

Jacobson remand for the purpose of doing further fact‐findingʺ and ʺif Judge Castel were

to find that there [was] ineffective assistance with respect to the joint offer, the

government would certainly consent to Mr. Galanisʹs withdrawal of his plea in the

[Wakpamni] matter. We would not stand on formalities if there is a finding of

ineffectiveness. We would carry out the joint plea offer.ʺ Oral Argument at 37:36‐38:20.

We thus will hold case no. 17‐2713‐cr pending further word from the parties.

For the foregoing reasons, case no. 17‐629‐cr is REMANDED to the

district court for further proceedings consistent with this order and case no. 17‐2713‐cr

will be HELD pending further proceedings.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk of Court

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