rejecting petitioner's ineffective assistance of counsel claim because he failed to provide "any specific factual allegations tending to show that the Indictment was returned in violation of the Local Rules in this District and Rule 6(f) . . . "Summary of this case from McCullough v. United States
02 Civ. 8663 (SAS)
October 30, 2002
Cheryl J. Sturm, Esq., Chadds Ford, Pennsylvania, for Petitioner.
Erika K. Thomas, Assistant United States Attorney, New York, New York, for Respondent.
OPINION AND ORDER
Ghanshyam Kalani ("petitioner") has moved to vacate, set aside, or correct his sentence pursuant to section 2255 of Title 28, United States Code ("section 2255"). In that motion, Kalani argues that the conviction obtained and sentence imposed were in violation of his Fifth, Sixth and Seventh Amendment rights. See Memorandum of Law in Support of Motion to Vacate, Set Aside, or Correct Sentence Pursuant to Title 28, United States Code, Section 2255 ("Pet. Mem.") at 1-2. Primarily, Kalani argues that his conviction and sentence should be vacated because he received ineffective assistance of trial and appellate counsel. See id. at 12-15. Kalani alleges that his trial counsel was ineffective for: (a) failing to object to certain jury instructions; (b) failing to challenge the written judgment and conviction imposing a five-year term of supervised release; (c) failing to object to the imposition of mandatory restitution; and (d) failing to set a reasonable restitution payment schedule. See id. at 15-21. Kalani further asserts that appellate counsel was ineffective for: (a) failing to appeal the lack of an "ignorance of the law" jury instruction; (b) failing to challenge the written judgment and conviction imposing a five-year term of supervised release; and (c) failing to set a reasonable restitution payment schedule. See id. at 19-21. Finally, Kalani argues that the conviction obtained and sentence imposed were in violation of his Sixth Amendment right to be charged by an indictment returned in open court and his Seventh Amendment right to have the issue of restitution resolved by a jury. See id. at 21-25. Except for the issue of the five-year period of supervised release, Kalani's motion is denied, in its entirety, for the following reasons.
On August 23, 2002, this Court docketed an Amended Judgment and Commitment correcting a clerical mistake whereby a five-year period of supervised release was originally imposed. The Amended Judgment and Commitment, which conforms to the oral imposition of sentence, imposes a three-year period of supervised release. As the relief requested has already been provided, the issue is now moot.
A. Kalani's Conviction and Sentencing
Twenty six count Indictment S3 98 CR 1238 (SAS) was filed on February 3, 2000. Count One charged Kalani and seven other defendants — Alan Barton Nachamie, Edwin Tunick, Lydia Martinez, Jose Hernandez, Donna Vining, Kenneth Schrager, and Alan Siegel — with participating in a conspiracy, from 1995 through June 1998, to commit health care fraud, mail fraud, make false statements in connection with the delivery of or payment for health care benefits, and submit false claims for physician's services to a health care benefit program, in violation of section 371, Title 18, United States Code. Count Two charged Kalani and his co-defendants with committing health care fraud in violation of section 1347, Title 18, United States Code. Count Three charged Kalani and his co-defendants with making false statements in connection with the delivery of or payment for health care benefits in violation of section 1035, Title 18, United States Code. Counts Seven through Eleven charged Kalani and certain of his co-defendants with five substantive counts of submitting false claims for physicians' services to a health care benefit program in violation of section 1320a, Title 42, United States Code.
On May 9, 2000, after a five-week jury trial, Kalani was convicted on Counts Two, Three and Seven through Eleven of the Indictment. The jury found Kalani not guilty of the conspiracy charge in Count One. On September 25, 2000, Kalani was sentenced to a term of one year and one day of imprisonment, to be followed by three years of supervised release. Sentencing Transcript ("Sent. Tr.") at 34. The Court also imposed a mandatory $700 special assessment and ordered that Kalani pay restitution in the amount of $161,785.
B. Kalani's Direct Appeal
Kalani appealed the following four claims to the Second Circuit: "(1) that the District Court's sentencing violated the rule set forth in Apprendi v. New Jersey, 530 U.S. 466 (2000); (2) that the District Court should have applied a heightened burden of proof concerning loss and, regardless, lacked sufficient evidence to calculate the amount of intended loss; (3) that the District Court erred in refusing to grant a mitigating role adjustment; and (4) that the District Court abused its discretion in refusing to apportion restitution to reflect his relative culpability and gain." United States v. Kalani, No. 00-1677, 2001 WL 266349, at *1 (2d Cir. Mar. 19, 2001) (unpublished). Kalani did not raise a claim alleging ineffective assistance of trial counsel in his direct appeal. On March 19, 2001, the Second Circuit affirmed Kalani's conviction and sentence. See id. Kalani has completed his sentence of imprisonment and is presently serving his term of supervised release.
1. Section 2255
A. Relevant Standards
Section 2255 allows a convicted person being held in federal custody to petition the sentencing court to vacate, set aside or correct a sentence. A properly filed motion under section 2255 must allege that: (1) the sentence was imposed in violation of the Constitution or laws of the United States; (2) the sentencing court was without jurisdiction to impose such sentence; (3) the sentence was in excess of the maximum authorized by law; or (4) the sentence is otherwise subject to collateral attack. See 28 U.S.C. § 2255. Accordingly, collateral relief under section 2255 is available "only for a constitutional error, a lack of jurisdiction in the sentencing court, or an error of law or fact that constitutes `a fundamental defect which inherently results in a complete miscarriage of justice.'" United States v. Bokun, 73 F.3d 8, 12 (2d Cir. 1995) (quoting Hill v. United States, 368 U.S. 424, 428 (1962)); accord United States v. DeLuca, 889 F.2d 503, 506 (3d Cir. 1989).
The Second Circuit has held that a petitioner under supervised release may be considered "in custody" for purposes of the habeas corpus statute. See Scanio v. United States, 37 E.3d 858, 860 (2d Cir. 1994).
2. Ineffective Assistance of Counsel
Regarding ineffective assistance of counsel claims, the Second Circuit has repeatedly observed:
A defendant challenging his conviction and sentence on the basis of ineffective assistance of counsel bears a heavy burden. In Strickland v. Washington, 466 U.S. 668 (1984), the Supreme Court adopted a strong presumption that trial counsel provides effective assistance. To overcome this presumption, a defendant must show both (1) "deficient performance," that is, that his trial counsel's performance "fell below an objective standard of reasonableness" under "prevailing professional norms," id. at 688 . . .; and (2) "prejudice," that is, that there is a "reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different," id. at 694.United States v. Diaz, 176 F.3d 52, 112-13 (2d Cir. 1999).
To eliminate the "distorting effects of hindsight," Strickland, 466 U.S. at 689, a reviewing court evaluating counsel's performance "`must indulge a strong presumption that counsel's conduct falls within the wide range of reasonable professional assistance,' bearing in mind that `[t]here are countless ways to provide effective assistance in any given case' and that `[e]ven the best criminal defense attorneys would not defend a particular case in the same way.'" United States v. Aguirre, 912 F.2d 555, 560 (2d Cir. 1990) (quoting Strickland, 466 U.S. at 689).
In satisfying the two-prong test, "it is not sufficient for the habeas petitioner to show merely that counsel omitted a nonfrivolous argument, for counsel does not have a duty to advance every nonfrivolous argument that could be made." Mayo v. Henderson, 13 F.3d 528, 533 (2d Cir. 1994). Rather, a petitioner must demonstrate that "counsel omitted significant and obvious issues while pursuing issues that were clearly and significantly weaker." Id. Similarly, in evaluating the prejudice prong of the Strickland test "the court must determine whether, `absent counsel's deficient performance, there is a reasonable probability that the outcome of the proceeding would have been different,' specifically, that there was a `reasonable probability that the claim would have succeeded at the state's highest court.'" Torres v. Irvin, 33 F. Supp.2d 257, 266 (S.D.N.Y. 1998) (quoting Mayo, 13 F.3d at 534).
B. The Claims Kalani Did Not Raise in His Direct Appeal Are Procedurally Barred and Must Be Denied
Kalani's ineffective assistance of trial counsel claims are procedurally barred because he failed to raise them on direct appeal. Because Kalani cannot establish cause and prejudice excusing his procedural default, he has waived these claims as a matter of law. A district court's decision that a claim has been procedurally defaulted is reviewed for abuse of discretion. See United States v. Tarascio, 15 F.3d 224, 225 (2d Cir. 1993).
It is well-settled that federal prisoners may not employ section 2255 as a substitute for direct appeal. See Bousley v. United States, 523 U.S. 614, 621 (1998) ("Habeas review is an extraordinary remedy and `will not be allowed to do service for an appeal'") (quoting Reed v. Farley, 512 U.S. 339, 354 (1994)); United States v. Munoz, 143 F.3d 632, 637 (2d Cir. 1998) ("A motion under § 2255 is not a substitute for an appeal."). Defendants therefore cannot use section 2255 motions to litigate issues that could have been raised on direct appeal but were not. See, e.g., Napoli v. United States, 32 F.3d 31, 36 (2d Cir. 1994) (finding petitioners' section 2255 claims based on allegedly erroneous jury instructions to be procedurally barred because they were not raised on appeal).
"[F]ailure to raise a claim on direct appeal is itself a default of normal appellate procedure, which a defendant can overcome only by showing cause and prejudice." Campino v. United States, 968 F.2d 187, 190 (2d Cir. 1992). In addition to showing cause and prejudice, a petitioner may overcome a procedural default by demonstrating actual innocence. See Rosario v. United States, 164 F.3d 729, 732 (2d Cir. 1998).
"Cause" is measured by a stringent standard of diligence, and requires a demonstration that some factor external to the petitioner, such as interference by government officials, prevented the claim from being raised on appeal. See Coleman v. Thompson, 501 U.S. 722, 753 (1991). Any argument that the alleged ineffective assistance of appellate counsel is cause for Kalani's procedural default must be rejected. See Edwards v. Carpenter, 529 U.S. 446, 451 (2000) (holding that ineffective assistance can establish cause for a procedural default only if it is itself an independent constitutional claim). Because Kalani's ineffective assistance of trial counsel claims are meritless, see infra, Kalani's appellate counsel was not ineffective for failing to raise such claims on appeal. Accordingly, appellate counsel's conduct cannot serve as cause for Kalani's procedural default.
In addition to cause, Kalani must also prove prejudice. Petitioner "must shoulder the burden of showing, not merely that the errors at his trial created a possibility of prejudice, but that they worked to his actual and substantial disadvantage, infecting his entire trial with error of constitutional dimensions." United States v. Frady, 456 U.S. 152, 170 (1982). See also Femia v. United States, 47 F.3d 519, 524 (2d Cir. 1995). Given that Kalani's ineffective assistance of trial counsel claims relate solely to the jury charge, it cannot be said that his entire trial was infected with constitutional error. Accordingly, Kalani has failed to prove prejudice.
A petitioner unable to meet both the cause and prejudice prongs may collaterally attack a conviction only if he can establish that an error of sufficient gravity "`has probably resulted in the conviction of one who is actually innocent.'" Bousley, 523 U.S. at 623 (quoting Carrier, 477 U.S. at 496). To establish actual innocence, a petitioner must demonstrate that "`it is more likely than not that no reasonable jury would have convicted him.'" Id. (quoting Schlup v. Delo, 513 U.S. 298, 327-28 (1995)). This is a difficult burden to meet because actual innocence "means factual innocence, not mere legal insufficiency." Bousley, 523 U.S. at 623. For the first time, in his reply papers, Kalani argues that the procedural default rule "does not apply where, as here, the 2255 motion alleges that ineffective assistance of counsel led to the conviction of a person who is actually innocent of the charges set forth in the indictment." Traverse at 4 (emphasis added).
Kalani's conclusory statement of actual innocence is not supported by argument or evidence. Accordingly, the cause and prejudice analysis applies to Kalani's ineffective assistance of trial counsel claims. After his conviction, Kalani was represented by a new attorney in connection with his sentencing and appeal. Furthermore, the ineffective assistance of trial counsel claims raised by Kalani are based solely on the record of proceedings before this Court. Kalani failed to raise these ineffective assistance claims in his direct appeal. Therefore, these claims are barred. See Bloomer v. United States, 162 F.3d 187, 191-92 (2d Cir. 1998) ("[W]here the defendant is represented by new appellate counsel on direct appeal, and the ineffective assistance claim is based solely on the record developed at trial, the defendant is required to raise his claim on direct appeal.") (citing Billy-Eko v. United States, 8 F.3d 111, 115 (2d Cir. 1993)). See also Tapia-Garcia v. United States, 53 F. Supp.2d 370, 374 n. 2 (S.D.N.Y. 1999) (applying procedural bar to section 2255 claim asserting ineffective assistance of trial counsel where claim was not raised on appeal by new appellate counsel). Notwithstanding that most of Kalani's claims are procedurally barred, I will briefly address the merits, or lack thereof, for the sake of completeness.
C. Even If Not Procedurally Barred Kalani's Claims Are Without Merit and Must Be Denied
1. Ineffectiveness of Kalani's Trial Counsel
Kalani raises several claims of error relating to trial counsel's alleged ineffectiveness for failing to object to various portions of the jury charge. See Motion to Vacate, Set Aside, or Correct Sentence Pursuant to Title 28, United States Code, Section 2255 ("Petition") at 15-18, 18-20.
a. Conscious Avoidance
Kalani claims that this Court did not clearly instruct the jury that "a conscious avoidance instruction may not be used as a device to show intent" to join a conspiracy or to participate in a fraudulent scheme. See Petition at 18. This claim is belied by the record and meritless.
A conscious avoidance instruction "may only be given if (1) the defendant asserts the lack of some specific aspect of knowledge required for conviction, . . . and (2) the appropriate factual predicate for the charge exists. . . ." United States v. Ferrarini, 219 F.3d 145, 154 (2d Cir. 2000), cert. denied sub nom., Kagan v. United States, 532 U.S. 1037 (2001). Kalani's defense was based entirely on his lack of knowledge and intent. The factual predicate for the conscious avoidance charge was amply provided by the numerous fraudulent bills approved by Kalani, submitted to Medicare under Kalani's Medicare provider number, as well as the payments and explanations of benefits sent by Medicare to Kalani.
The charge given clearly instructs the jurors to only consider conscious avoidance when determining whether the defendant in question had knowledge of an object of the charged conspiracy or acted knowingly in participating in the charged substantive offenses. Specifically, the jury charge states, in relevant part, as follows:
On Count 1, if you find that [the] defendant you are considering knowingly participated in the conspiracy, then in determining whether he or she had knowledge of an object of the conspiracy, you may consider whether that defendant deliberately closed his or her eyes to what otherwise would have been obvious. You may also consider this question on Counts 2 through 20 in determining whether the defendant in question acted knowingly. If you find beyond a reasonable doubt that the defendant in question acted with a conscious purpose to avoid learning the truth, then this element may be satisfied.
Trial Transcript ("Tr.") at 3023-24.
In addition, Kalani's reliance on United States v. Tropeano, 252 F.3d 653 (2d Cir. 2001), and United States v. Juncal, 245 F.3d 166 (2d Cir. 2001) is misplaced, as neither case supports the conclusion that the conscious avoidance charge in Kalani's trial was improper in any way. To the contrary, both cases held that conscious avoidance may be appropriately used to show knowledge. Juncal, 245 F.3d at 171 n. 1 ("[W]hile evidence of conscious avoidance cannot support a finding that a defendant knowingly participated in or joined the conspiracy, it may support a finding that a defendant knew of the unlawful objectives of the conspiracy."); Tropeano, 252 F.3d at 660 ("[A] conscious avoidance theory may support a finding that a defendant knew of the objects of the conspiracy, whether or not the underlying substantive offenses require proof of specific intent."). See also Ferrarini, 219 F.3d at 155 ("[T]he jury was properly instructed that conscious avoidance could only be used to infer knowledge of the conspiracy's unlawful objectives, and not of intent to participate in the conspiracy."). The fact that Kalani was charged and convicted of crimes requiring proof of specific intent does not render the conscious avoidance charge inappropriate.
The conscious avoidance charge was upheld after being appealed by co-defendants Lydia Martinez and Edwin Tunick. See United States v. Nachamie, No. 00-1806, 2002 WL 108341, at *6 (2d Cir. Jan. 25, 2001). Specifically, the Second Circuit stated:
The instruction was supportable in this case because Martinez and Tunick both claimed that they were unaware of the fraud and a rational juror could conclude from this record that they were "aware of a high probability [of the fact in dispute] and consciously avoided confirming that fact.Id. (quoting Ferrarini, 219 F.3d at 154) (internal quotation marks omitted, alteration in original).
b. Willfulness and Intent
Relying on Neder v. United States, 527 U.S. 1 (1999), and Ayres v. General Motors Corp., 234 F.3d 514 (11th Cir. 2000), Kalani argues that the Court's inclusion of "concealment of truth" in its definition of a "scheme to defraud" was erroneous in the absence of a fiduciary duty to disclose, and that trial counsel was ineffective for failing to object to the instruction. See Petition at 16.
Kalani's argument is meritless because it ignores the fact that: (1) there was not only concealment, but affirmative misrepresentations contained in the many claims submitted to Medicare and paid under Kalani's provider number, and (2) as a physician and Medicare provider, Kalani occupied a special relationship of trust with respect to his patients and to Medicare. Indeed, this Court recognized as much in determining that an enhancement for abuse of a position of trust was appropriate for each of the doctor defendants. See United States v. Nachamie, 121 F. Supp.2d 285, 299 (S.D.N.Y. 2000), aff'd, 2001 WL 266349, at *1. See also United States v. Ntshona, 156 F.3d 318, 321 (2d Cir. 1998) ("We adopt the view of the other circuits presented with this issue and hold that a doctor convicted of using her position to commit Medicare fraud is involved in a fiduciary relationship with her patients and the government and hence is subject to an enhancement under § 3B1.3.") (emphasis in original).
Next, Kalani asserts that trial counsel was ineffective for failing to request an instruction "that a violation is not willful if based on a nonfrivolous interpretation of a regulation." Petition at 19. According to Kalani, the fact "that Medicare regulations authorized a physician to bill for unsupervised in-home visits under certain circumstances," id. at 18 (emphasis added), could have been used as a defense to willfulness resulting in a reasonable likelihood of acquittal if presented to the jury.
This argument overlooks the nature of the charges of which Kalani was convicted and the jury instructions on those charges. For example, Count Two charged Kalani with committing health care fraud. With regard to Count Two, I defined "willfully" to mean "to act knowingly and purposely with an intent to do something the law forbids." Tr. at 2964. I then gave the following "good faith" instruction:
Count Three charged Kalani with making false statements in connection with the payment for health care benefits, and Counts Seven through Eleven charged five substantive counts of submitting false claims for physicians' services to a health care benefit program.
Because an essential element of Count 2 is intent to defraud, it follows that good faith on the part of the defendant in question is a complete defense to a charge of healthcare fraud. A defendant, however, has no burden to establish a defense of good faith. The burden is on the government to prove fraudulent intent and the consequent lack of good faith beyond a reasonable doubt.
Under the healthcare fraud statute even false representations or statements, or omissions of material facts, do not amount to fraud unless done with fraudulent intent. However misleading or deceptive a plan may be, it is not fraudulent if it was devised or carried out in good faith. An honest belief in the truth of the representations made by the defendant in question is a good defense, however inaccurate the statements may turn out to be. If in good faith the defendant in question believed that his or her statements or representations were not false or fraudulent, then he or she cannot be guilty of the crime charged in Count 2.
Tr. at 2966-67. The above charge subsumes any "nonfrivolous interpretation of a regulation" charge because it includes any good faith on the part of a defendant, not just good faith based on statutory interpretation. Presumably, the jury considered the evidence regarding unsupervised in-home visits and concluded that Kalani did not act in good faith. Furthermore, the requested instruction would have only provided a partial defense given the many affirmative misrepresentations contained in the claims submitted to Medicare using Kalani's provider number. Kalani therefore cannot show that he was prejudiced by the failure to give the specific charge requested.
In sum, the Court's instructions to the jury were entirely proper. Kalani's trial counsel was therefore not ineffective for failing to raise the jury charge objections asserted in the Petition. See, e.g., United States v. Clanton, 284 F.3d 420, 424 (2d Cir. 2002) (holding that counsel was not ineffective for declining to raise claims foreclosed by applicable law).
2. Ineffectiveness of Kalani's Appellate Counsel
"Although the Strickland test was formulated in the context of evaluating a claim of ineffective assistance of trial counsel, the same test is used with respect to appellate counsel." Mayo, 13 F.3d at 533. Thus, in order to prevail on his claim of ineffective assistance of appellate counsel, Kalani must show that both prongs of the Strickland standard are satisfied; that is, he must: (1) show that his counsel's representation fell below "an objective standard of reasonableness" under prevailing professional norms, and (2) "affirmatively prove prejudice" in order to demonstrate that he was deprived of his right to "counsel" as guaranteed by the Sixth Amendment. Strickland, 466 U.S. at 687-88, 693-94. Kalani's appellate counsel claim fails to meet either prong of the Strickland test.
Kalani argues that his appellate counsel's performance was constitutionally deficient because appellate counsel failed to appeal the omission of an "ignorance of the law" instruction in the jury charge. Petition at 19-20. Specifically, Kalani argues that
the district court should have instructed the jury that Kalani could not be found guilty unless he was aware of the statutes and the regulations and acted with specific intent to violate them.
Petition at 20.
In fact, the jury was instructed that Kalani could not be found guilty unless he acted wilfully and with specific intent, and only then if the jury found that he did not act in "good faith." Tr. 2964-68; 2989; 2992; 3024. Thus, Kalani's appellate attorney acted reasonably in not appealing this portion of the charge. The propriety of the given jury charge, considered together with the incorrect statement of the law proffered by Kalani, make it clear that Kalani would not have prevailed on this issue on appeal, even had this frivolous issue been raised by appellate counsel. See United States v. Ouimette, 798 F.2d 47, 49 (2d Cir. 1986) ("An appellant challenging a jury instruction faces a heavy burden: to establish both that he requested a charge that `accurately represented the law in every respect' and that the charge delivered was erroneous and caused him prejudice."). See also United States v. Bok, 156 F.3d 157, 160 (2d Cir. 1998) ("`A jury instruction is erroneous if it misleads the jury as to the correct legal standard or does not adequately inform the jury on the law.'") (quoting United States v. Dinome, 86 F.3d 277, 282 (2d Cir. 1996)). Accordingly, Kalani's ineffective assistance of appellate counsel claim is dismissed.
3. The Supervised Release Issue
Kalani also argues that counsel was ineffective for failing to take steps to correct the written Judgment and Commitment which included five years of supervised release, rather than the three years stated in open court. Petition at 20-21. This alleged failure by counsel does not satisfy either prong of the Strickland standard. First, the oral pronouncement of sentence, which imposed a three-year term of supervised release, is controlling. "`Where an unambiguous oral sentence conflicts with the written judgment, the constitutional right of a defendant to be present at sentencing dictates that the oral pronouncement of sentence must control.'" United States v. Thomas, 299 F.3d 150, 153 (2d Cir. 2002) (quoting United States v. A-Abras Inc., 185 F.3d 26, 29 (2d Cir. 1999)). See also United States v. Marquez, 506 F.2d 620, 622 (2d Cir. 1974) (stating that the written judgment is "nothing more than mere evidence of the sentence imposed orally in the court by the judge.") (internal quotation marks and citations omitted). Second, this clerical error was corrected before Kalani served more than the intended three-year term of supervised release. In fact, a revised order of restitution was docketed on October 13, 2000, nine days after the incorrect Judgment and Commitment was docketed, which stated that "upon his release from custody the Defendant is required to pay ten percent of his gross monthly earnings to Medicare throughout his three-year period of supervised release." (emphasis added). The Judgment and Commitment was officially amended on August 23, 2002, during the first year of Kalani's supervised release. Therefore, Kalani cannot prove prejudice resulting from this clerical mistake. For these reasons, neither his trial nor appellate counsel were ineffective for failing to take steps to correct the written judgment and commitment.
4. Issues Related to the Order of Restitution
Kalani was ordered to pay $161,785.88 in restitution. See Judgment and Commitment at 4-5, attached as Ex. A to the Government's Memorandum of Law in Opposition to the Motion of Ghanshyam Kalani to Vacate, Set Aside or Correct Sentence Pursuant to Title 28, United States Code, Section 2255. This amount reflects the total amount of Medicare checks that Kalani received and deposited in his bank account prior to splitting the proceeds with co-defendant Alan Barton Nachamie, less the $11,000 payment Kalani had previously repaid to Medicare. Kalani raises three challenges to this restitution order: (1) that it must be vacated because "where, as here, the amount of restitution exceeds $20" the issue of liability must be resolved by a jury, see Petition at 25; (2) this Court lacked jurisdiction to impose restitution because "neither Empire Blue Cross nor Medicare is a person," Petition at 21; and (iii) the payment schedule is unreasonable. See id.
Kalani's first claim, relying on Tull v. United States, 481 U.S. 412 (1987) and United States v. Behrman, 235 F.3d 1049 (7th Cir. 2001), is totally devoid of merit. First and foremost, Tull is inapposite because it involved civil penalties and injunctive relief sought by the Government under the Clean Water Act. In any event, the Supreme Court held that the determination of a civil penalty under the Clean Water Act did not require a jury. See Tull, 481 U.S. at 426. Kalani fares no better in relying on Behrman, in which the Seventh Circuit expressly held that the determination of restitution is not a matter for the jury, but that the sentencing judge may make any appropriate findings with respect to restitution by a preponderance of the evidence. See Behrman 235 F.3d at 1054 (holding that restitution is not a "penalty for a crime" that need be decided by a jury).
Kalani's next argument is that government agencies such as Empire Blue Cross and Medicare are not victims under the Mandatory Victims Restitution Act of 1996 ("MVRA") and, hence, are not entitled to restitution. Kalani does not cite any case authority or statute in support of this proposition. He merely argues that such agencies are not "persons" and therefore fall outside the purview of the MVRA. See 18 U.S.C. § 3663A(a)(2) (defining victim to mean "a person directly or proximately harmed as a result of the commission of an offense for which restitution may be ordered . . ."). Kalani's argument flies in the face of the MVRA's legislative purpose and existing case law.
With regard to legislative history, "the MVRA's primary purpose is to force offenders to `pay full restitution to the identifiable victims of their crimes.'" United States v. Reano, 298 F.3d 1208, 1211 (10th Cir. 2002) (quoting S.Rep. No. 104-179, at 12 (1996), reprinted in 1996 U.S.C.C.A.N. 924, 925) (stating that the MVRA is "necessary to ensure that the offender realizes the damage caused by the offense and pays the debt owed to the victim as well as to society"). To hold that Medicare is not a person and therefore cannot be a victim under the MVRA would create a serious injustice. Furthermore, courts have routinely ordered defendants to pay restitution to Medicare and other similar entities. See, e.g., United States v. Gieger, 190 F.3d 661, 665 (5th Cir. 1999) (upholding restitution order based on amounts that Medicare paid on fraudulent billings); United States v. Cummings, 189 F. Supp.2d 67, 75 (S.D.N.Y. 2002) ("The fact that Aurora (a corporation] is not named as a victim in the superceding indictment does not prevent it from being a victim under the MVRA."). In short, Medicare is a cognizable victim under the MVRA and is therefore entitled to restitution.
Finally, Kalani's third argument — that both his trial and appellate counsel "were ineffective for not asking the judge to fashion a reasonable payment schedule" — is also meritless. Before setting the payment schedule, this Court analyzed Kalani's financial resources and ability to make restitution. See Sent. Tr. at 29. Thus, the Court did not abuse its discretion in setting a payment schedule of a $60,000 lump sum payment plus 10% of Kalani's gross monthly earnings throughout the period of supervised release. See United States v. Mattice, 186 F.3d 219, 231 (2d Cir. 1999) (discussing district courts' wide latitude in forming restitution orders).
With regard to Kalani's financial circumstances, the Court noted that
Dr. Kalani has total assets, consisting of bank accounts and securities, of $182,100, and total liabilities, consisting primarily of credit card charges, of $62,445. See Kalani PSR, paragraph 139 . . . Dr. Kalani's adjusted gross income as reported on his 1998 tax return is $148,766.
Sent. Tr. at 29. Findings were also made as to Kalani's financial needs as well as those of his family.
5. The Indictment
Kalani argues that his Sixth Amendment right to have his indictment returned in open court in the presence of the grand jury was violated. See Pet. Mem. at 23. Kalani further argues that counsel was ineffective for failing to object to the defective return of the indictment given that "there is no evidence the Grand Jury returned the indictment in open court." Id. at 24. It is doubtful that Kalani has presented a constitutional claim in this regard as the notice provision of the Sixth Amendment applies to trial proceedings, not grand jury proceedings. See Pressley v. Bennett, No. 01 Civ. 5831, 2002 WL 31014828, at *10 (S.D.N.Y. Sept. 10, 2002) ("[T]he Sixth Amendment right to be informed of the nature and cause of the criminal accusation is not implicated in a grand jury proceeding.").
The Sixth Amendment provides as follows:
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.
U.S. CONST. amend. VI.
The Federal Rules of Criminal Procedure state that:
A grand jury may indict only upon the concurrence of 12 or more jurors. The indictment shall be returned by the grand jury, or through the foreperson or deputy foreperson on its behalf, to a federal magistrate judge in open court.
Assuming, arguendo, that an alleged violation of a Federal Rule of Criminal Procedure can reach constitutional magnitude, Kalani has failed in his offer of proof. In a section 2255 motion, the movant bears the burden of proof, by a preponderance of the evidence. See Triana v. United States, 205 F.3d 36, 40 (2d Cir.), cert. denied, 531 U.S. 956 (2000). Having failed to present any specific factual allegations tending to show that the Indictment was returned in violation of the Local Rules in this District and Rule 6(f) of the Federal Rules of Criminal Procedure, Kalani's Sixth Amendment claim must be rejected, as must his related claim of ineffective assistance of counsel.
For the reasons stated above, except for the matter relating to the mistaken five-year term of supervised release, Kalani's section 2255 motion is hereby dismissed without a hearing. Accordingly, the order of restitution previously imposed remains in full effect. The Clerk of the Court is directed to close this case.
Contrary to the arguments made in Kalani's reply papers, section 2255 does not require a court to hold a hearing if the motion papers, files and court record clearly show that the defendant is entitled to no relief. Rules 4 through 8, Rules Governing Section 2255 Proceedings for the United States District Courts. See also Machihroda v. United States, 368 U.S. 487, 495 (1962) ("What has been said is not to imply that a movant must always be allowed to appear in a district court for a full hearing if the record does not conclusively and expressly belie his claim, no matter how vague, conclusory or palpably incredible his allegations may be. The language of the statute does not strip the district courts of all discretion to exercise their common sense.")
Finally, there is the question of whether to grant a certificate of appealability. For a certificate of appealability to issue, petitioner must make a "substantial showing of the denial of a constitutional right." 28 U.S.C. § 2253(c)(2). "A `substantial showing' does not compel a petitioner to demonstrate that he would prevail on the merits, but merely that the issues involved in his case `are debatable among jurists of reason; that a court could resolve the issues [in a different manner]; or that the questions are adequate to deserve encouragement to proceed further.'" Lucidore v. New York State Div. of Parole, 209 F.3d 107, 112 (2d Cir. 2000) (quoting Barefoot v. Estelle, 463 U.S. 880, 893 n. 4 (1983) (internal quotation marks omitted) (emphasis and alteration in original)). In sum, "`[w]here a district court has rejected the constitutional claims on the merits, the showing required to satisfy § 2253(c) is straightforward: The petitioner must demonstrate that reasonable jurists would find the district court's assessment of the constitutional claims debatable or wrong.'" Rudenko v. Costello, 286 F.3d 51, 79 (2d Cir. 2002) (quoting Slack v. McDaniel, 529 U.S. 473, 484 (2000)). Petitioner has made no such showing in this case. Accordingly, no certificate of appealability will be issued.