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Johnson v. United States

United States District Court, Third Circuit

August 2, 2013

ED JOHNSON, Petitioner/Defendant,
UNITED STATES OF AMERICA, Respondent/Plaintiff. Civil Action No. 12-403-LPS


LEONARD P. STARK, District Judge.

Pending before the Court is Ed Johnson's Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence. (D.I. 294)[1] For the reasons set forth below, the Court will deny Defendant's motion.


Ed Johnson ("Johnson") along with his wife, Carol Johnson, [2] operated a business, Merl Financial Group ("Merl"), which offered loans to applicants seeking funds for a variety of business and development projects. (D.I. 303 at 3-4) Merl served as the parent company of a number of smaller companies, one of which, Heritage Capital Credit Group ("HCCC"), is the focus of the current case. (D.I. 294 at 16) Johnson offered loans to a number of businesses through HCCC by means of a complex and novel loan instrument he created and called a Business Collateralized Line of Credit ("BCLOC"). ( Id. at 16-17) In order to secure funding through a BCLOC, it was necessary for Johnson and his wife to create "bond-like collateralized debt obligations" for sale. (D.I. 303 at 9) In order for Johnson's plan to be feasible, these "bonds" needed to receive an investment grade rating from Standard & Poor's. ( Id. ) Ultimately, Johnson collected in excess of $1.5 million in advance fees without funding a single loan. ( Id. at 4)

On September 11, 2008, a grand jury indicted Johnson on multiple counts of mail and wire fraud, engaging in an illegal monetary transaction, and conspiracy. ( Id. at 2)[3] Trial began on October 20, 2009 and, on October 29, 2009, the jury returned a verdict of guilty on all counts. ( Id. ) On May 26, 2010, the Court sentenced Johnson to 120 months imprisonment, three years of supervised release, and a $1400 special assessment. ( Id. at 2-3) On October 24, 2011, the Third Circuit affirmed, noting there was "abundant" evidence of Johnson's guilt (and further observing that Johnson acknowledged as much). See United States v. Johnson, 449 Fed.Appx. 149, 152-53 (3d Cir. Oct. 24, 2011).


Pursuant to 28 U.S.C. § 2255, Johnson may seek relief on the ground that his "sentence was imposed in violation of the Constitution or laws of the United States, or that the court was without jurisdiction to impose such sentence, or that the sentence was in excess of the maximum authorized by law, or is otherwise subject to collateral attack."

Johnson proceeds pro se. Accordingly, the Court is required to construe his filings liberally. See Royce v. Hahn, 151 F.3d 116, 118 (3d Cir. 1998). Having done so, the Court discerns three grounds on which Johnson seeks relief: (1) ineffective assistance of counsel; (2) prosecutorial misconduct; and (3) extreme punishment.[4] The Court addresses each of these grounds below.[5]

I. Ineffective Assistance of Counsel

Johnson contends that he was deprived of his Sixth Amendment right to effective legal assistance. (D.I. 294 at 25; see also D.I. 298 at 5-6) The Court reviews this claim pursuant to the two-prong standard established in Strickland v. Washington, 466 U.S. 668 (1984). Under the first prong of Strickland, Johnson must demonstrate that counsel's performance fell below an objective standard of reasonableness, with reasonableness being judged under professional norms prevailing at the time counsel rendered assistance. See id. at 688. That is, the Court must "judge the reasonableness of counsel's challenged conduct on the facts of the particular case, viewed as of the time of counsel's conduct." Id. at 690. Under the second prong, Johnson must affirmatively show that counsel's deficient performance prejudiced his case. See id. at 692-93. That is, Johnson must show "there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Id. at 694. When applying the Strickland test, the Court "must indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance." Id. at 689.

Here, Johnson alleges that his counsel, Christopher S. Koyste ("Counsel"), was ineffective because he was: (1) inadequately prepared for trial; (2) ineffective in his cross-examination of the government's witnesses; (3) ineffective in failing to object to the government's entry of evidence; (4) ineffective in failing to subpoena certain documents; (5) ineffective in failing to seek a continuance of trial; (6) ineffective in failing to retain or call expert witnesses during trial; (7) ineffective in failing to request a variance of Johnson's sentence after trial; and (8) ineffective in failing to allow Johnson to testify at trial. (D.I. 294 at 27-38) The Court addresses these contentions in tum.

A. Inadequate Preparation for Trial

Defendant asserts that Counsel inadequately prepared for trial, resulting in a failure by Counsel to understand the legal issues and factual matters underlying the case. ( Id. at 26) In response, the government has submitted an affidavit from Counsel. (D.I. 303 at 16) In his affidavit, Counsel declares that he assembled a team to assist in the preparation of Johnson's case and expended significant resources hiring a private investigator and paralegal to assist him. (D.I. 303-4 at 2) Counsel also retained expert witnesses from Santoro CPA group to analyze the evidence and potentially testify at trial. (Jd.) Among other things, Counsel learned through his pretrial investigation that documents Johnson now contends Counsel should have investigated further-including public documents from HCCC or Merl ( see D.I. 304 at 21)-supported the government's allegations that loan applicants were being misled as to the status of their loans (D.I. 303-4 at 3-4; see also id. at 3 ("Unfortunately, the Ed Johnson defense team's investigation revealed that the foundational components to make such a sale of bonds occur, never actually took place within the time line that such components needed to occur.")) Even assuming Counsel did not inform Johnson of all of his pretrial efforts - and Johnson alleges Counsel did not (D.I. 304 at 20-21) - there is no basis to doubt that Counsel did, in fact, undertake these efforts. The record does not support a finding that Counsel's trial preparation fell below the objective standard of reasonableness.

Nor has Johnson shown that pursuit of his suggested investigative steps would have led to a reasonable probability of a different verdict. To the contrary, the Court agrees with the government that "[b]ecause [Johnson's] theory was contradicted by the facts, both as uncovered in counsel's investigation and as presented by the government at trial, he suffered no prejudice from the purported ...

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