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United States v. Gallardo

United States District Court, M.D. Pennsylvania

April 19, 2018



          Sylvia H. Rambo Judge

         Presently before the court is Joseph Gallardo's (“Gallardo”) petition to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. After extensive consideration, and for the reasons that follow, the court is constrained to find that Gallardo received constitutionally ineffective assistance of counsel, in the absence of which there is a reasonable probability that he would not have pleaded guilty. Accordingly, the petition will be granted and Gallardo's conviction and sentence will be vacated.

         I. Background

         Gallardo, who is presently 51 years old, immigrated to the United States from Cuba with his family on July 14, 1973, at age 10, and became a legal permanent resident in 1977. While he never applied for citizenship, he married an American citizen in 2005, and resided with his daughter and step-daughter in Pennsylvania up until the time that he was incarcerated for the instant offense.

         From 2006 to 2009, while acting as the chief executive officer of a real estate venture called Blue Meadow Group, LLC, Gallardo perpetuated a fraudulent scheme in which he induced his clients to invest in a so-called Real Estate Investment Trust by promising that their money would be invested in and protected by real estate and that they would receive guaranteed rates of return. In reality, he used the funds to “invest” in dilapidated homes and a gas station, pay personal living expenses, purchase thousands of dollars of gasoline and fast food, finance his own risky and unprofitable day trading activity, and make purported interest payments to his investors that he characterized as returns on profitable real estate investments. After the Pennsylvania Securities Commission began investigating his fraudulent activities, Gallardo falsely advised that he never encouraged his clients to invest in Blue Meadow Group, and then induced one of his clients to corroborate his false statements in a letter sent to the Pennsylvania Securities Commission on May 6, 2009. Records obtained by investigators revealed that twenty-eight checks totaling $1, 842, 901.00 were drawn on the bank accounts of nine clients, or from accounts on their behalf, and deposited into six accounts in the name of Gallardo's wife, Elizabeth Gallardo (“Elizabeth”), or Blue Meadow Group.

         On September 30, 2013, the Government filed a criminal complaint against Gallardo, [1] and in March 2014, Gallardo retained Joshua Lock, Esquire (“Mr. Lock” or “Counsel”), who represented Gallardo through his sentencing. For months, Mr. Lock and the government worked tirelessly to secure a plea deal wherein Gallardo's wife, who was implicated in the scheme but played a much smaller role in the offense conduct and largely at the behest of her husband, would pay a substantial sum of restitution while Gallardo would plead guilty to a criminal offense. In an effort to resolve the case with Gallardo, the government identified the May 6, 2009 mailing and proposed an information and plea agreement to one count of mail fraud, in violation of 18 U.S.C. § 1341.

         In considering the government's offer, Mr. Lock and Gallardo discussed “the likely outcome of a trial, the ability to raise the mitigation in the context of the loss hearing and at sentencing in support of [a] request for a variance, and . . . the superordinate concern about the welfare of [Gallardo's] family.” (§ 2255 Hr'g Tr. at 10, Nov. 15, 2017.) Although Gallardo frequently expressed apprehension about pleading guilty (id. at 12, 37-38), he ultimately made the decision to accept the government's proposal in order to absolve his wife of criminal liability. To that end, Gallardo signed a document entitled, “Waiver Agreement, ” dated April 5, 2014 (Doc. 141-1, pp. 4-6 of 12), to extend that statute of limitations regarding the May 6, 2009 mailing in an effort to give the government additional time to resolve the case against his wife without criminal charges being brought against her. At some point during the summer of 2014, his wife paid the government approximately $851, 000.00 in restitution. (§ 2255 Hr'g Tr. at 85.)

         Thereafter, on September 2, 2014, the government filed a one-count Criminal Information charging Gallardo with mail fraud, in violation of 18 U.S.C. § 1341. (Doc. 1.) On September 23, 2014, Gallardo waived his right to a grand jury indictment and pleaded guilty to the Criminal Information. On February 9, 2016, Gallardo was sentenced to ninety-seven months imprisonment, followed by three years supervised release, restitution in the amount of $1, 792, 170.22, and a special assessment in the amount of $100. (Doc. 60.)

         On November 4, 2016, Gallardo filed a pro se motion to vacate pursuant to 28 U.S.C. § 2255 asserting twenty-nine different grounds covering a broad range of alleged ineffective assistance claims from plea negotiations through sentencing. (Doc. 132.) On August 16, 2017, the court appointed Edward Rymsza, Esquire (“Mr. Rymsza”), to represent Gallardo in all post-conviction proceedings, and on August 18, 2017, Mr. Rymsza filed an unopposed motion to amend/supplement the pro se § 2255 motion.

         On October 6, 2017, an amended § 2255 motion was filed. In that motion, Gallardo, through Mr. Rymsza, asserted, for the first time, that he was denied effective assistance of counsel because Mr. Lock had failed to warn him that if he were convicted of mail fraud he would likely be deported, and that he was in no other way informed of the possibility of facing deportation upon accepting such a plea.

         At an evidentiary hearing on Gallardo's motion, Mr. Lock acknowledged that, although he was aware of Gallardo's immigration status both prior to and after the entry of the guilty plea, he never advised Gallardo that his plea carried a risk of deportation. (§ 2255 Hr'g Tr. at 13-17, 30-33.) He further testified that he does not recall having any discussions regarding potential immigration consequences with the government during plea negotiations. (Id. at 34.) Indeed, the twenty-six page plea agreement is silent as to any such matter. (See Doc. 3.) At the change of plea hearing, the court did not advise Gallardo that he may be subject to removal, see Fed. R. Crim. P. 11(b)(1)(O), and neither Mr. Lock nor the government requested an inquiry on the matter. Instead, it appears that Gallardo was first advised that he may be deported in the pre-sentence report, which was filed on February 10, 2015. (PSR ¶ 42.)

         II. Legal Standard

         The Sixth Amendment guarantees a defendant effective assistance of counsel at “critical stages of a criminal proceeding, including when he enters a guilty plea.” Lafler v. Cooper, 566 U.S. 156, 165 (2012). To demonstrate that counsel was constitutionally ineffective, a defendant must show that counsel's representation fell below an objective standard of reasonableness, and that he was prejudiced as a result of counsel's errors. Strickland v. Washington, 466 U.S. 668, 687-688 (1984). In the context of a guilty plea, a defendant is required to show that but for counsel's errors, he would not have pleaded guilty and would have instead insisted on proceeding to trial. Lafler, 566 U.S. at 163 (citing Hill v. Lockhart, 474 U.S. 52, 59 (1985)).

         III. ...

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