X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MEMORANDUM & ORDER   Mark Hotton (“Petitioner”) entered a guilty plea to Conspiracy to Launder Money, in violation of 18 U.S.C. §§1956(a)(1)(A)(i) and 1956(h), pursuant to a Plea Agreement with the Government that included a waiver of his right to appeal or collaterally attack his conviction or sentence. (See Plea Agreement, D.E. 306-1 at ECF pp. 4-15; J., D.E. 231.) Following the guilty plea, Petitioner was sentenced to a term of imprisonment of one hundred thirty-five (135) months. (See J. at 2.) On July 16, 2017, Petitioner, acting pro se, petitioned this Court to vacate, set aside, or correct his conviction and sentence pursuant to 28 U.S.C. §2255 (“Section 2255″). (See Pet., D.E. 287.) Petitioner contends that he received ineffective assistance of counsel in relation to the entry of his guilty plea. In addition to the aforementioned Petition, the following motions are pending before this Court: (1) Petitioner’s motion to correct his sentence pursuant to Rule 36 of the Federal Rules of Criminal Procedure (“Rule 36″) filed in October 2017 (Rule 36 Mot., D.E. 296); (2) Petitioner’s motion to correct his sentence pursuant to Rule 36, originally filed in the Southern District of New York in July 2017 (S.D.N.Y. Rule 36 Mot., D.E. 313); (3) Petitioner’s motion to amend his Section 2255 Petition (Mot. to Amend, D.E. 306); and (4) Petitioner’s motion to expand the record and appoint counsel (Mot. To Expand & Appoint Counsel, D.E. 322). For the following reasons, the aforementioned motions are DENIED in their entirety. BACKGROUND The Court assumes familiarity with the facts, which are referenced only as necessary to explain the Court’s decision. I. Factual Background Petitioner entered into a Plea Agreement in which he agreed to plead guilty to Count One of a Superseding Information, charging Conspiracy to Commit Money Laundering, which carried a maximum jail sentence of twenty years of imprisonment and no minimum term of imprisonment. (Plea Agreement 1.) The Superseding Information stated, in pertinent part, that: On or about and between January 1, 1995 and October 15, 2012, both dates being approximate and inclusive, within the Eastern District of New York and elsewhere, [Petitioner], together with others, did knowingly and intentionally conspire to conduct one or more financial transactions in and affecting interstate commerce, which transactions in fact involved the proceeds of specified unlawful activity, to wit: mail fraud, [ ] wire fraud, [ ] securities fraud, [ ] and embezzlement from an employee benefits plan, [ ] knowing that the property involved in the financial transactions represented the proceeds of some form of unlawful activity (a) with the intent to promote the carrying on of the specified unlawful activity…and (b) knowing that the transactions were designed in whole and in part to conceal and disguise the nature, the location, the source, the ownership and the control of the proceeds of the specified unlawful activity. (Superseding Information, D.E. 78, at 1-2.) The Plea Agreement contained an appellate waiver, in which Petitioner agreed not to appeal or collaterally attack his conviction pursuant to 28 U.S.C. §2255 if he received a sentence of 135 months or less. (Plea Agreement 4.) Prior to entering into this Plea Agreement, Petitioner met with the Government numerous times in an attempt to provide cooperation pursuant to a Proffer Agreement, but no Cooperation Agreement was offered to Petitioner. (Resp’t Br., D.E. 292, at 2- 3.) The Proffer Agreement stated in pertinent part: THIS IS NOT A COOPERATION AGREEMENT. Client agrees to provide the Office with information, and to respond to questions, so that the Office may evaluate Client’s information and responses in making prosecutorial decisions. By receiving Client’s proffer, the Office does not agree to confer immunity, make a motion on Client’s behalf, or enter into a cooperation agreement, plea agreement or non-prosecution agreement. The Office makes no representation about the likelihood that any such agreement will be reached in connection with this proffer. (See Proffer Agreement, D.E. 224-4, 1.) According to the Government, “[o]n July 24, 2013, well before any entry of the guilty plea [ ] [Petitioner], his counsel Marianne Rantala, and his co-counsel Ira London…were both informed that no cooperation agreement would be offered.” (See Resp’t Br. at 3.) II. Guilty Plea On July 30, 2013, in this Court, Petitioner entered a guilty plea to Conspiracy to Commit Money Laundering in violation of 18 U.S.C. §§1956(a)(1)(A)(i) and 1956(h). (J. at 1.) After swearing Petitioner in, the Court ensured that Petitioner was competent to enter the guilty plea and understood the plea proceedings; the Court explained the constitutional rights Petitioner was forfeiting by pleading guilty. (Plea Tr., D.E. 121, 7:6-10:21.)1 The Court explained the range of sentences Petitioner faced, specifically noting that Petitioner could receive a maximum sentence of twenty years of imprisonment followed by three years of supervised release. (Plea Tr. 10:22-11:5.) The Court informed Petitioner that he would also receive a fine of $500,000 and “restitution in an amount that will be determined by the Court but will not be more than $5.7 million.” (Plea Tr. 11:6- 11:9.) The Plea Agreement was discussed, and the waiver provisions contained in the agreement were placed on the record: THE COURT: You also understand, do you not, that you can not appeal my sentence if I sentence you to a term of 135 months or less. Do you understand that? MR. HOTTON: Yes. (Plea Tr. 14:7-14:11.) Further, the Court ensured that Petitioner understood that the Plea Agreement he was entering “super[s]edes any other agreement you had, any proffer agreements; in particular the January 2, 2000 proffer agreement.” (Plea Tr. 21:1-21:6.) Petitioner stated that he was entering the plea because he was in fact guilty and that no one was forcing him to plead guilty. (Plea Tr. 21:10-21:15.) In addition, Petitioner admitted to his criminal conduct and the following exchange occurred: THE COURT: All right, so tell me what it is that you did with respect to the superseding information, both as to the underlying conspiracy and as to the forfeiture? MR. HOTTON: I created false invoices with others to guarantee payments that my company was not entitled to. The proceeds of this scheme was used to promote the ongoing business and the further generation of false invoices to continue the business. And the proceeds were also used to finance a cash payroll. THE COURT: And what kind of business was it? MR. HOTTON: Electrical installation and electrical supply company. THE COURT: And what period of time did this occur? MR. HOTTON: From like 2009 until 2011. (Plea Tr. 21:16-22:4.) The Government then placed an offer of proof on the record: THE GOVERNMENT: There is additional evidence concerning frauds and money laundering relative to the earlier portion of the scheme from 1995 to 2009 that the government could prove. At that time Mr. Hotton was a broker dealer and he was involved in a series of fraudulent investment schemes involving companies such as Cross Country Capital, WQN, North Country Barbecue, a phone bond company, company bonds, phony GE promissory notes, Atlantic Senior Associates is another company, On Screen Media. He took money and made false statements concerning these investments or false document[s] concerning these. He defrauded a number of investors, approximately a dozen out of a number of millions of dollars. And then passed the money to promote his ongoing companies, and actually ended up purchasing through all of these, some of these schemes, the electrical companies through which he finally financed the false invoice scheme. And all of this was used, all this money was laundered for most of his illegal activities and to fund the payroll in which union benefit funds were not paid, and which none of the withholding taxes that were required to be paid to the IRS were ever submitted to the IRS. And in this way he committed the frauds, laundered money and he used operations for essentially 17 years. (Plea Tr. 22:8-23:8.) Petitioner conceded that what the Government stated was true and that he committed his criminal activity knowingly. (Plea Tr. 23:23-24:18.) Petitioner admitted guilt and the Court, satisfied with the allocution, accepted his guilty plea. (Plea Tr. 25:3-25:13.) III. Sentencing Proceedings Prior to sentencing, the Probation Office prepared a Presentence Investigation Report (“PSR”) and determined that Petitioner’s Total Offense Level was 42 with a Criminal History Category of III and he faced sentences of 360 months to life imprisonment, though the statutory maximum sentence was 240 months of imprisonment. (See PSR, D.E. 122, 107.) Petitioner returned to this Court for his sentencing hearing on June 25, 2015. (See Sentencing Tr., D.E. 259.) Prior to imposing sentence, the Court stated that it considered the PSR and its addendums, counsel’s objections to the PSR, the guilty plea, the Plea Agreement, and multiple letters. (Sentencing Tr. 4:8-18.) During the sentencing proceedings defense counsel claimed that Petitioner was induced to plead guilty and stated that “[Petitioner] basically signed off on [the] plea agreement and entered into this plea under the false pretenses that he would be used [as a cooperator] because this was in the midst of the cooperation, and as a matter of fact after the plea hearing there were still meetings for cooperation.” (Sentencing Tr. 10:12-17.) The Government responded that Petitioner had engaged in a lengthy series of proffers but that he was ultimately rejected as a cooperator, which the Government told Petitioner and defense counsel. (Sentencing Tr. 11:18-12:3.) As to Petitioner’s allegations of inducement to plead guilty, prior to the plea the Government stated that “the government never made any false promise to [Petitioner]. He knew that he did not have a cooperation agreement. He indicated his willingness to attempt and continue to work with the agents to develop criminal cases. The agents were willing to work with him to see if that could happen, but unfortunately once [Petitioner] was released on bail, he went out and committed new and additional crimes, lying to pretrial services numerous times.” (Sentencing Tr. 13:22-14:5.) The Government discussed Petitioner’s actions while out on bail: There were a long series of events while out on bail, where even if he had been granted a cooperation agreement he would not have honored the minimum conditions which is required to commit no additional crimes. As a result of that, there was a lengthy hearing held before the Court concerning the defendant’s conduct and the defendant was remanded. As a result of that, the probation department found him to have lost his acceptance of responsibility for this new criminal conduct and other consequences that increased his punishment before the Court. All of that goes to show that there was no fraud in the inducement at all by this defendant. In fact for a man who has spent his entire professional life as essentially a career white-collar criminal lying to people and making false promises about what he would do, we find it the most extreme irony that he now accuses the government of acting as he has acted his entire life. (Sentencing Tr. 14:19-15:11.) Defense counsel then stated that during Petitioner’s guilty plea allocution Petitioner was never asked if he had reviewed the Superseding Information. (Sentencing Tr. 17:17-21.) As a result of this representation, the Court allowed for an adjournment for defense counsel and Petitioner to consider whether Petitioner wanted to withdraw his guilty plea. (Sentencing Tr. 36:7-24.) Defense counsel indicated that only a brief adjournment was needed and upon return that day the Court asked: “Do you understand that you were given a full opportunity to withdraw your plea today based on any claims that you have that your plea was not knowingly made because I didn’t specifically ask you had you reviewed the plea agreement with your attorneys. Do you understand that?” (Sentencing Tr. 38:11-16.) Petitioner responded that he understood and chose not to withdraw his plea. (Sentencing Tr. 38:17-39:1.) The Court proceeded to hold a Fatico hearing and heard from witnesses presented by the defense and the government regarding the loss amount caused by Petitioner’s criminal activities. (Sentencing Tr. 42:3-97:14.) Ultimately the Court determined that “as a result of this Fatico hearing that the government’s summary is indeed accurate and I find the amount of $9,336,213 is the amount of intend[ed] loss which causes [Petitioner] to be in — that would add additional levels to have him at a bas[e] offense level of 36. In addition, the amount of restitution is $6,019,962.” (Sentencing Tr. 102:25-103:7.) Defense counsel argued that the Plea Agreement had a cap offense level of 33, that the correct base offense level should have reduced the level to 32, and a two-level reduction for acceptance of responsibility should be added, bringing the offense level to 29 with a sentence range of 87 to 108 months. (Sentencing Tr. 103:17-104:8.) As to acceptance of responsibility the Government responded that “there was no way at the time we entered this plea agreement that we could be aware [Petitioner] was going to commit new crimes subsequent to his release on bail and the probation department was entirely free to reject the acceptance of responsibility because of that and find that he obstructed justice or no longer had accepted responsibility because of the new criminal conduct while released on bail.” (Sentencing Tr. 105:15- 22.) In response to defense counsel’s statement that the Government had agreed not to challenge the acceptance of responsibility, the Government stated that “the court is free to provide him the acceptance of responsibility. We would have not objected if you do provide it, but it’s up to the court’s discretion.” (Sentencing Tr. 105:25-106:14.) The Court determined that Petitioner would not be receiving credit for acceptance of responsibility, stating “[t]his is a classic case of someone not accepting responsibility, and not bothering to even coordinate their activities with a generous opportunity to be at liberty.” (Sentencing Tr. 106:17-19.) The Court then engaged in an analysis of the Sentencing Guidelines, ultimately finding Petitioner’s offense level was 43. (Sentencing Tr. 108:1-112:19.) In considering sentence, the Court referenced Petitioner’s guilty plea in the Southern District of New York and defense counsel pointed out that Petitioner had already completed his Southern District sentence before receiving the instant sentence. (Sentencing Tr. 104:22-105:12.) The Court engaged in a discussion with the parties regarding their stance on the U.S.S.G. §3553(a) factors as applied to Petitioner. (Sentencing Tr. 103:22-127:4.) Further, the Court addressed Petitioner’s criminal activities during the pendency of this case. (Sentencing Tr. 127:6-128:16.) Following arguments from counsel and a consideration of all factors under U.S.S.G. §3553(a), in accordance with the Plea Agreement, the Court sentenced Petitioner to a sentence of 135 months of imprisonment followed by three years of supervised release and a restitution amount of $5.75 million. (Sentencing Tr. 130:7-20.) Notwithstanding the appeal waiver, Petitioner sought relief from the Second Circuit Court of Appeals following his sentencing; Petitioner’s appellate counsel filed an Anders brief which Petitioner opposed pro se, arguing that the guilty plea was not voluntarily executed. (See Resp’t Br. at 2.) On March 22, 2016, the Second Circuit held the following: “Upon due consideration, it is hereby ORDERED that the Anders motion is GRANTED, and the Government’s motion to dismiss is GRANTED…with respect to [Petitioner's] appeal of his conviction and term of imprisonment, and is construed as a motion for summary affirmance with respect to the non-custodial components of his sentence, and is GRANTED so construed.” (See, 2d Cir. Order, D.E. 323-2, United States v. Hotton, No. 15-CR-2190 (2d Cir. Mar. 22, 2016).) Petitioner then moved for rehearing, which was denied by the Second Circuit on July 22, 2016. (See Pet. at 1; Resp’t Br. at 5.) IV. The Section 2255 Motion On July 16, 2017, Petitioner filed this Petition to vacate his conviction and sentence pursuant to 28 U.S.C. §2255, contending that he received ineffective assistance of counsel and was entitled to an evidentiary hearing to resolve this matter. (See Pet. at 9-13.) Petitioner claims that counsel erred, in that: Defense counsel repeatedly assured [him] that despite what was said in the plea agreement and despite what was said in the courtroom that he would in fact get credit for cooperation and that there would be no relevant conduct. In fact, the defense counsel on repeated occasions went to great lengths in telling [Petitioner] how this was going to be reduced and that was going to be credited. In fact, apparently none of this was true. [Petitioner] agreed to a plea with the [i]mpression that after credit for cooperation and all the other reductions he thought he was getting that he would either get time served or only have to serve a little more time. (Pet. at 10.) Petitioner provides lists of alleged quotes from his defense attorneys that induced him to enter his guilty plea, a plea that he insists he would not have accepted absent this ineffective assistance of counsel. (Pet. at 3-8, 11.) To summarize, Petitioner claims that his attorneys told him that: (1) if he provided credible information to the Government that he would get a Cooperation Agreement; (2) that the Government was satisfied with the progress of Petitioner’s proffer sessions and he was going to get a sentence of time served or a short sentence; (3) notwithstanding what was on the record or in the Plea Agreement, the Government promised that it would make a motion under Rule 35 to obtain a reduced sentence. (See Pet. at 3-8.) The Government filed a response on August 16, 2017, arguing that Petitioner’s claims are without merit, that his arguments were already presented to this Court prior to sentencing, and that his arguments are precluded by his valid guilty plea and appeal waiver. (See Resp’t Br. at 2, 5-9.) The Government’s argument is summarized as follows: In sum [Petitioner], knowing (1) he had not received a cooperation agreement, (2) that he had been caught and incarcerated after committing new crimes, and (3) that no promises existed as to what sentence he would receive, and (4) with the advice of two counsel, one of whom he does not claim was ineffective, chose to reject the opportunity to withdraw his plea. Given those facts, no factual or legal basis exists that justifies Hotton’s claim he was actually ‘prejudiced’ by one of his two counsel’s claimed representations making his plea non-voluntary. (Resp’t Br. at 9.) On September 7, 2017, Petitioner submitted a reply providing further support for his claims of ineffective assistance of counsel, adding that “[t]he government has not submitted any affidavit that contradicts what occurred in meeting[s] outside the courtroom and off the record between [Petitioner] and defense counsel.” (See Pet’r Reply Br., D.E. 293, 20.) In his reply, Petitioner also adds that co-counsel Mr. London provided ineffective assistance, stating: “after being added to the team, Mr. London did not provide any advice during [ ] key meetings outside the courtroom and in many cases was not at the meeting…At one point after sentencing, Mr. London advised [him] to file a 2255 because Ms. Rantala ‘made too many mistakes.’” (Pet’r Reply Br. at

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
September 05, 2024
New York, NY

The New York Law Journal honors attorneys and judges who have made a remarkable difference in the legal profession in New York.


Learn More
May 15, 2024
Philadelphia, PA

The Legal Intelligencer honors lawyers leaving a mark on the legal community in Pennsylvania and Delaware.


Learn More
May 16, 2024
Dallas, TX

Consulting Magazine recognizes leaders in technology across three categories Leadership, Client Service and Innovation.


Learn More

We are seeking an associate to join our Employee Benefits practice. Candidates should have three to six years of employee benefits experienc...


Apply Now ›

Associate attorney position at NJ Immigration Law firm: Leschak & Associates, LLC, based in Freehold, NJ, is looking for a full time ass...


Apply Now ›

Duane Morris LLP has an immediate opening for a senior level, highly motivated litigation associate to join its dynamic and growing Employme...


Apply Now ›
04/29/2024
The National Law Journal

Professional Announcement


View Announcement ›
04/15/2024
Connecticut Law Tribune

MELICK & PORTER, LLP PROMOTES CONNECTICUT PARTNERS HOLLY ROGERS, STEVEN BANKS, and ALEXANDER AHRENS


View Announcement ›
04/11/2024
New Jersey Law Journal

Professional Announcement


View Announcement ›