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Gish v. United States

United States District Court, N.D. Georgia, Atlanta Division

September 29, 2017

UNITED STATES OF AMERICA, Respondent. Civil Action No. 1:15-CV-591-CAP


          CHARLES A. PANNELL, JR. United States District Judge

         This action is before the court on the magistrate judge's report and recommendation (“R&R”) [Doc. No. 228]. The movant has filed objections thereto [Doc. Nos. 236 and 237].[1]

         I. Standard of Review

         In reviewing a magistrate judge's R&R, the district court “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1). “Parties filing objections to a magistrate's report and recommendation must specifically identify those findings objected to. Frivolous, conclusive, or general objections need not be considered by the district court.” United States v. Schultz, 565 F.3d 1353, 1361 (11th Cir. 2009) (quoting Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir. 1988)) (internal quotation marks omitted). The district judge must “give fresh consideration to those issues to which specific objection has been made by a party.” Jeffrey S. v. State Bd. of Educ. of Ga., 896 F.2d 507, 512 (11th Cir. 1990) (citation and internal quotation marks omitted). Absent objection, the district judge “may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge, ” 28 U.S.C. § 636(b)(1), and “need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation, ” Fed.R.Civ.P. 72, advisory committee note, 1983 Addition, Subdivision (b).

         II. Discussion

         A. Background

         In 2010, the movant and his co-defendant, Myra Ettenborough, were indicted by a federal grand jury of conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371 (Count One), four counts of mail fraud in violation of 18 U.S.C. §§ 1341 and 2 (Counts Two through Five), and six counts of wire fraud in violation of 18 U.S.C. §§ 1343 and 2 (Counts Six through Eleven) [Doc. No. 1.]

         A trial was held from September 7, 2011, through September 23, 2011. The Eleventh Circuit Court of Appeals summarized the evidence as follows:

Between 2004 and May of 2006, the purported investment firm of Weston Rutledge raised approximately $30 million from over 300 investors for primarily three investment programs. Geoffrey A. Gish was the head of Weston Rutledge. Myra Ettenborough was Gish's office and operations manager, with responsibility for managing almost all aspects of the company's business, employee, and interactions with its investors. Ettenborough handled all mail, managed and reconciled Weston Rutledge's numerous bank accounts, handled all banking transaction, checks and wires, and processed all payments to investors. Gish and Ettenborough communicated to investors how the programs worked, details of the investments' safety and security, the investments' performance and earnings and other information. They also provided all other employees with the information provided to investors.
Ettenborough also wrote a newsletter that was distributed to investors. In one newsletter, she described how investors' principal would reside at a major bank in a non-interest bearing account with a block on it, which no one could touch during the investment period. The newsletter also purported to report investment results. Ettenborough provided standard document packages to investors showing substantial rates of return and created and distributed account statements to investors showing positive monthly earnings and increasing total account balances said to be from earnings. In March 2006, the last full month for which there were statements, the account balances as shown on investor statements reached $34 million.
In reality, virtually none of the representations made to investors was true. Of the $30 million raised by Gish, approximately $12 million was returned to investors to satisfy earnings and principal withdrawal demands. The rest went to Gish, Ettenborough, other third parties and various non-investment purposes. Ettenborough signed most of these checks. None of the investment funds went to any trading activity of any kind. Of course, the cash on hand at Weston Rutledge steadily declined over time. Upside down from the beginning, the gap between investor statements and cash on hand grew to almost $34 million by March 2006.
Various investigations of Weston Rutledge took place, beginning in late 2004 when the Georgia Secretary of State securities division subpoenaed Gish and Weston Rutledge. This investigation resulted in a cease and desist order and a civil fine. Instead of ceasing operations, Gish moved Weston Rutledge to a new office and resumed soliciting investors. Other investigations took place in both Arizona and Texas.
During this time, Gish and Ettenborough consulted a securities lawyer about their securities investment program Zamindari. They did not tell this lawyer about the Georgia investigation. Subsequently the lawyer withdrew his representation of Zamindari, informing him that his investment program was in violation of numerous securities laws and had the “indicia” of fraud. Gish did not further communicate with the lawyer, nor attempt to recover the unexpended retainer paid to him out of an account funded by investor monies.
In March and April of 2006, the SEC instituted its own investigation of Gish and his investment programs. On May 17, 2006, the SEC obtained a court order shutting down Weston Rutledge and appointing a Receiver for the business and approximately $1 million of investor funds remaining.

United States v. Gish, 518 F. App'x 871, 873-74 (11th Cir. 2013).

         The jury convicted the movant of Counts One through Ten of the Indictment, and acquitted him on Count Eleven [Doc. No. 110]. Ettenborough was convicted of Counts One through Three and Six through Seven [Doc. No. 111]. This court sentenced the movant to 240 months' imprisonment, three years' supervised release, and ordered the movant to pay $17, 245, 275.63 in restitution [Doc. No. 140].

         After the movant filed a timely notice of appeal, the Eleventh Circuit affirmed the movant's conviction and sentence by order dated May 16, 2013. Gish, 518 F. App'x at 871. The Eleventh Circuit considered and rejected the movant's arguments that (1) the jury was improperly instructed on the theory of deliberate ignorance; (2) testimony of three lawyers regarding their communications with the movant should not have been admitted at trial; (3) evidence regarding the Georgia Secretary of State's investigation was improperly admitted under Federal Rule of Evidence 404(b); and (4) the movant was sentenced in error. Id. at 874-75.

         B. Section 2255 Motion

         The movant now collaterally challenges his convictions and sentences on the following grounds: (1) trial counsel was ineffective in failing to negotiate a plea deal; (2) trial counsel was ineffective at trial for failing to call certain witnesses; (3) trial counsel was ineffective for failing to seek a severence; (4) trial counsel was ineffective for failing to object to a variance between the evidence and the court's instruction to the jury on materiality; (5) trial counsel was ineffective for failing to insist on jury instructions that would allow the jury to “parse out culpability on a temporal basis;” (6) appellate counsel was ineffective for failing to raise a Rule 43 error; (7) appellate counsel was ineffective for failing to raise the trial court's refusal to give an alleged theory of the defense good faith jury instruction; (8) the trial court erred in conducting “supplemental jury instructions” without the movant being present or having waived his right to be present; (9) the trial court erred in refusing to give the jury his requested good faith jury instruction; and (10) the federal fraud statutes are unconstitutional.

         1. Ineffective Assistance of Counsel Claims

         Under the Sixth Amendment, a defendant has the right to “reasonably effective” legal assistance. Strickland v. Washington, 466 U.S. 668, 687 (1984). To show constitutionally ineffective assistance of counsel, a petitioner must establish that (1) counsel's representation was deficient and (2) counsel's deficient representation prejudiced him. Id. at 690-92; Bottoson v. Moore, 234 F.3d 526, 532 (11th Cir. 2000) (stating that the court may resolve an ineffective assistance claim based on either prong).

         Under the first prong, a movant must show that “in light of all the circumstances, the identified acts or omissions were outside the wide range of professionally competent assistance.” Strickland, 466 U.S. at 690. “[C]ounsel's conduct is presumed reasonable, [and] a petitioner must establish that no competent counsel would have taken the action that his counsel did take.” Chandler v. United States, 218 F.3d 1305, 1315 (11th Cir. 2000) (en banc). To prove ineffectiveness, a movant must show that his attorney's representation “fell outside the wide range of professionally competent assistance.” Id. at 1314 (internal quotation marks omitted). When evaluating an attorney's performance, the court must be highly deferential and “avoid second-guessing counsel's performance.” Id. ...

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