United States v. Miller

UNITED STATES OF AMERICA, v. ROBERT FRANK MILLER, Defendant.

Criminal Case No. 05-143 (RJL)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

FILED: December 3, 2018

November 30, 2018

MEMORANDUM OPINION

[Dkt. ## 155, 180, 184]

On November 20, 2007, after a nine-day trial, defendant Robert Frank Miller ("Miller" or "the defendant") was found guilty by a jury of nine counts of travel fraud and two counts of wire fraud. Miller appealed and raised a number of challenges to his conviction and sentence, including claims that his trial counsel was constitutionally deficient. Our Circuit Court affirmed Miller's conviction and sentence, but it remanded his ineffective-assistance-of-counsel ("IAC") claims for me to consider in the first instance. Following the remand, Miller filed a motion clarifying the specifics of his IAC claims, and, pursuant to an agreement with the Government, Miller supplemented the claims he had raised on appeal with new ones. After the initial round of briefing, I held three days of evidentiary hearings on September 12 and 13, and October 23, 2017, after which I accepted post-hearing briefing—in the form of proposed findings of fact and conclusions of law—and heard argument on Miller's IAC claims. I then accepted post-argument briefing that was ultimately completed on February 5, 2018.

Having closely reviewed the evidence presented during the hearings and in the parties' extensive briefing, Miller's IAC claims are DENIED for the reasons set forth below.

BACKGROUND

Over a less than ten-month period in late 2003 and early 2004, Miller, through his company American Funding and Investment Corporation ("AFIC"), defrauded dozens of investors and prospective home buyers out of more than $500,000. See, e.g., 11/16/07 Trial Tr. 985-87 [Dkt. # 72]; Judgment 6-8 [Dkt. # 124]. He operated AFIC from July 2003 through his arrest on April 8, 2004, all the while purporting to offer both high-yield real estate investments and home-buying assistance for individuals with subprime credit. United States v. Miller, 799 F.3d 1097, 1100 (D.C. Cir. 2015). In its opinion affirming his conviction and sentence, our Circuit Court summarized Miller's fraudulent scheme as follows:

First, Miller obtained cash investments from individuals who thought AFIC would invest their money in pools of investment real estate. He told those investors that AFIC would use the invested capital to buy and refurbish foreclosure properties and then resell those properties, at a profit, to home buyers with poor credit. Second, Miller obtained cash "down payments" from prospective home buyers with poor credit. He told those home buyers he would help secure mortgages for them and then would use the down payment funds to buy homes they had preselected.

Id. The "mortgage side" of the scheme involved "find[ing] buyers for the properties that [Miller] would acquire from the monies that he collected from the investor side." 11/8/07 Trial Tr. 53-54 [Dkt. # 67]. Potential buyers were told they could purchase "regardless of their credit history and with little or no money down," because Miller would provide loans through his purported mortgage company. Id. at 48, 54-56.

Upon securing the investments, however, Miller neither purchased real estate nor secured or funded any mortgages. Miller, 799 F.3d at 1100. Instead, he used the money to sustain and promote AFIC's purported business, taking out newspaper advertisements to attract additional investors, paying rent for AFIC's "extravagant" office space on Pennsylvania Avenue in downtown Washington, D.C., as well as for office equipment and payroll, and even making partial distributions to early investors who demanded recompense. Id.; 11/16/07 Trial Tr. 923. Miller also used AFIC investor funds to cover his own personal expenses at bars, restaurants, and hotels. Miller, 799 F.3d at 1100; 11/16/07 Trial Tr. 994-1002. The majority of AFIC's investors and prospective home buyers lost their entire investments. 11/16/07 Trial Tr. 980-85; Gov't Trial Ex. 27A.

One of AFIC's early investors was Richard Chisholm, an unemployed real-estate agent. 11/8/07 Trial Tr. 44-45, 69-70. Miller described his real estate investment plan to Chisholm in September 2003, explaining that he would match investments of $5,000, use the $10,000 to "rehab" properties he purchased, sell the properties for at least a $25,000 profit, and split the profits with his investors. Id. at 44-46. Chisholm agreed to join AFIC as an affiliate, and he worked there from September to November 2003. Id. at 42-43, 46-47, 57-58, 77-78. Chisholm also invested $5,000 of his own money, for which Miller promised a "guaranteed" return of $12,500 within 90 days. Id. at 71, 73-74. During the three months that Chisholm worked at AFIC, he did not see Miller purchase any homes. He saw no evidence that Miller even owned a mortgage company. Id. at 56, 78-79. Chisholm lost his $5,000 investment. Id. at 77-80.

Another investor, Yerusalem Woldeselassie, invested $5,000 with Miller to help finance the purchase and sale of fifteen properties in Baltimore, which he represented were "presently being conveyed to" AFIC. Id. at 145, 155-58. Miller told Woldeselassie that within 90 days she would receive a $200,000 profit, or at least a return of her principal. Id. at 146-47. In fact, he had not even offered to buy the fifteen Baltimore properties. 11/9/07 Trial Tr. 189-91, 193-95 [Dkt. # 68]. After 90 days, Woldeselassie wrote to Miller demanding repayment of her principal; Miller did not respond, and Woldeselassie lost her investment. 11/8/17 Trial Tr. 160-64.

Jimmy Cheng invested in AFIC after reading a Washington Post advertisement promising a "guaranteed" fifteen percent return on a $5,000 investment, "secured by real estate." 11/13/07 Trial Tr. 408-09 [Dkt. # 69]. Miller invited Cheng to AFIC's Pennsylvania Avenue offices in November 2003 and gave Cheng the "grand tour." Id. at 411-12. Miller introduced Cheng to employees he referred to as real-estate agents and loan officers, which reassured Cheng that AFIC was a legitimate business. Id. at 412-20. Cheng invested $25,000 in AFIC on Miller's promise that Cheng would receive at least $25,000 in profit within 90 days. Id. at 414, 421-24. Cheng never heard from Miller again, and he lost his entire investment. Id. at 432-35. The same fate befell AFIC investors Lawrence Haye, Brenda Alston, and Denise McQueen. 11/9/07 Trial Tr. 322-24, 328-31; 11/13/07 Trial Tr. 447-55; 11/14/07 Trial Tr. 479-88, 449-50, 455-56, 489 [Dkt. # 70].

On the mortgage side of AFIC's operation, Miller placed advertisements offering home-buying help for people with poor credit and secured down payments from individuals for whom he offered to purchase homes and obtain mortgages for the balances. 11/16/07 Trial Tr. 885-88, 890-93, 920-23, 926-29. Anthony Wilburn and Charlene Peters gave Miller down payments of $4,500 and $7,200, respectively. Id at 890-91, 893-95, 925-26, 932-35. Both Wilburn and Peters lost their deposits, and neither got a home. Id. at 896, 937. When an AFIC employee informed Miller that Peters and her family were at risk of becoming homeless and asked that he return her down payment, Miller replied, "I can't save the world. They can go live with relatives." 11/15/07 Trial Tr. 795 [Dkt. # 71].

In late 2003, Cary Greene and Shawn Campbell met with Miller about Miller potentially purchasing their 65 rental properties in Baltimore, which were held by Queen Anne, LLC. 11/9/07 Trial Tr. 211-14. Greene provided Miller with a portfolio of photographs, descriptions, appraised values, and rent rolls for the properties, and offered to sell the properties to Miller for $2.2 million. Id. at 216-22. Miller declined to put down a deposit to buy the properties—and Greene and Campbell never heard from him again—but Miller kept the portfolio, which he then used to solicit and obtain investments from Anthony Stephen Roberts ($15,000), Robert Debnam ($143,000), and Haye ($25,000) under the pretense that he already had acquired the properties. Id. at 224, 226, 261-64, 268-71, 276-77, 279-80, 332-45; 11/14/07 Trial Tr. 554-56; 564-66; 569. In the weeks following the investments, Miller became "harder and harder to reach." 11/9/07 Trial Tr. 289-91, 349-50; 11/14/07 Trial Tr. 561. Then, in late March 2004, Miller told Roberts, Debnam, and Haye that he would soon be closing on the properties and that on April 9, 2014, they would be paid "in full." 11/9/07 Trial Tr. 287-89, 353-56. Roberts and Haye lost their entire investment; Debnam lost all but $10,000, which Miller paid—using funds obtained from another AFIC investor—after Debnam threatened to contact the local media to do an "expos[e]." Id. at 291-93, 359; 11/14/07 Trial Tr. 561-62; 11/19/07 Trial Tr. 1038 [Dkt. # 73].

In February 2004, Miller spoke with Charles Wilson, the president of Foxworthy, Inc., which owned 22 rental properties in Georgia. 11/14/07 Trial Tr. 492-94. On March 12, 2004, Miller contracted to buy the Georgia properties from Wilson for $750,000, and he made a $10,000 deposit. Id. at 495-98, 496-99, 515-16. The deal was scheduled to close on May 12, 2004. Id. at 495-98, 515-16. On March 26, 2004. Miller enlisted an AFIC employee to send a form letter under the employee's signature to the tenants of the Georgia properties, which stated, among other things, that AFIC had "acquired the property you presently live in" and that the tenants should send rental payments from February through April 2004 to AFIC within 10 days or face "IMMEDIATE EVICTION PROCEEDINGS." Id. at 587-93, 545-46, 588-90, 633-34, 642; Gov't Trial Ex. 26L, Attachment C. The letter also offered to help the tenants obtain a mortgage through AFIC to purchase their present home and enclosed a mortgage application. Id.

On April 6, 2004, having learned of Miller's letter to the tenants of his properties, Wilson sued Miller and AFIC. 11/14/07 Trial Tr. 500-01. Wilson's complaint noted that Foxworthy had been contacted by...