# Sutherland v. United States

> District Court, W.D. North Carolina · September 10, 2021

URL: https://www.frixlaw.com/law-library/cases/10257456

## Case

- **Court:** District Court, W.D. North Carolina
- **Decided:** September 10, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10257456

## How later opinions describe it (automated extraction)

- holding it was proper to dismiss § 2255 claims based on vague and conclusory allegations

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL CASE NO. 3:21-cv-00082-MOC
CRIMINAL CASE NO. 3:15-cr-00225-MOC-DCK-1

PATRICK EMANUAL SUTHERLAND, )
)
Petitioner, )
) MEMORANDUM OF
vs. ) DECISION AND ORDER
)
UNITED STATES OF AMERICA, )
)
Respondent. )
___________________________________ )

THIS MATTER is before the Court on Petitioner’s Motion to Vacate, Set Aside or Correct
Sentence under 28 U.S.C. § 2255 [CV Doc. 1],1 Petitioner’s Petition for Writ of Coram Nobis [CV
Doc. 3], the Government’s Motion to Dismiss Petitioner’s Motion to Vacate [CV Doc. 9], and
Petitioner’s Motion to Strike the Government’s Surreply [CV Doc. 12].
I. BACKGROUND
Petitioner Patrick Emanual Sutherland (“Petitioner”) was an experienced businessman and
actuary. He had a master’s degree in Actuarial Science and Finance and an undergraduate degree
in Mathematics, Economics, and Computer Science. [CR Doc. 57 at ¶¶ 6, 63: Presentence
Investigation Report (PSR)]. Petitioner was a Registered General Securities and Financial
Operations Principal with the National Association of Securities Dealers and was a Registered
Investment Advisory. [Id. at ¶ 6]. He had more than 20 years’ experience in insurance, banking,
securities, and financial services industries. He was the owner, principal, director, and executive

1 Citations to the record herein contain the relevant document number referenced preceded by either the
letters “CV,” denoting that the document is listed on the docket in the civil case file number 3:21-cv-00082-
MOC, or the letters “CR,” denoting that the document is listed on the docket in the criminal case file number
3:15-cr-00225-MOC-DCK-1.
of numerous businesses, including Insigne, Inc. (“Insigne”); XYZ Entertainment, LLC (“XYZ”);
Kyrotech Holdings (“Kryotech”); and Innovation Partners, LLC (“Innovation Partners”). [Id. at ¶
7].
Petitioner’s work included deals with offshore insurance companies. He used a Bermuda
company, Stewart Technology Services Limited (STS), as his primary intermediary to receive

offshore commissions and fees. [Id. at ¶ 8]. Although Petitioner’s sister, Beverly Stewart, was
listed as the President and owner of STS, it was really Petitioner’s company. [Id. at ¶ 10].
Petitioner received the statements for STS’s Bermuda bank account at his Charlotte, North
Carolina, residence; he was the primary contact for STS’s Bermuda brokerage account; he was
listed as a director and Vice President of STS and was a “customer delegate” with access to the
business internet banking for the STS Bermuda bank account; and he and his wife, Yanique
Lawrence, were authorized signatories on that account. [Id.]. Petitioner, his wife, and his business
entities had 36 different domestic financial accounts. [Id. at ¶ 11]. Between 2007 and 2010, over
$2.5 million in deposits were made to these accounts. [Id. at ¶ 12]. Approximately $2 million of

those deposits were wire transfers from STS. [Id. at ¶ 13].
Some of the wire transfers came from funds deposited into STS that were fees or
commissions on insurance contracts. Some came from interest earned or the sale of securities from
STS’s brokerage account. And some originated from lines of credit purportedly obtained by
Stewart. [Id. at ¶ 13]. Many of the wire transfers included descriptions, such as commissions,
consulting fees, and service fees, that identified them as taxable receipts. [Id. at ¶ 14]. Despite
this, the general ledgers for Insigne, XYZ, and Kryotech frequently mischaracterized these receipts
as nontaxable by falsely calling them capital contributions and loans. [Id. at ¶ 15]. Petitioner and
STS “treated these wire transfers in inconsistent manners that provided Petitioner tax advantages.”
United States v. Sutherland, 921 F.3d 421, 424 (4th Cir. 2019), cert. denied, 140 S.Ct. 1106 (2020).
The Fourth Circuit explained:
Sutherland treated the vast majority of wire transfers from STS to
his companies as bona fide loans or capital contributions, which
ordinarily are not taxable income for their recipient. By contrast,
STS treated nearly all of the wire transfers as expenses that had been
paid to Sutherland. If the wire transfers were in fact expenses paid
to Sutherland, as STS recorded them, then Sutherland and his
companies should have reported the wire transfers as taxable
income. Far from reporting them as income, however, Sutherland
either treated the transfers from STS to him and his wife as bona fide
loans or failed to account for them in his general ledger altogether.
In the end, Sutherland did not report the $2.1 million as income on
his tax returns.

Sutherland’s treatment of the STS transfers mirrored his treatment
of other income. Indeed, the defendant seemed to think that marking
income as a capital contribution or loan was a foolproof scheme.
For example, three Sutherland companies—Insigne Consulting,
Insigne, Inc., and XYZ Entertainment—sent almost $42,000 to
Kryotech Holdings, another Sutherland company, between 2007 and
2009. The paying companies recorded each transfer as a non-
taxable marketing expense, while Kryotech treated the payments as
non-taxable capital contributions. The net result: none of
Sutherland’s companies would pay taxes on those funds. Similarly,
Insigne, Inc., received more than $125,000 in taxable fees from
another firm, Global Financial Synergies, between 2006 and 2010—
yet Sutherland described the majority of them as nontaxable capital
contributions. Come tax day, despite the millions of dollars flowing
through his accounts, Sutherland reported just $88,979 of income in
2008; $16,669 in 2009; and $72, 415 in 2010.

Id. On those same tax returns, Petitioner also failed to report, as required, his interest in or
signatory authority over a financial account in a foreign country. [CR Doc. 57 at ¶ 18].
In April 2012, a grand jury in the Western District of North Carolina issued subpoenas
seeking the records of Petitioner’s companies. [CR Doc. 79 at 47: Trial Tr.2]. Three months later,
Petitioner’s attorney sent the United States Attorney’s Office a letter attempting “to explain away

2 Docket Nos. 77 through 82 are the trial transcripts in this matter.
a large number of transactions related to the subpoenaed materials.” Sutherland, 921 F.3d at 424.
The letter stated that STS was formed in the early 2000s to develop, manufacture, license, sell and
support products and database systems for trust and insurance companies and investment
managers. [CR Doc. 79 at 55]. The letter also stated that Petitioner had served on the STS board
of directors, but that he had no ownership interest in and was not employed by STS. [Id. at 56].

Petitioner’s attorney represented that Stewart had agreed to lend Petitioner’s companies
funds until his businesses became profitable and that “[a]ll loans from STS to … [Petitioner] were
contemporaneously documented by written and fully-executed loan agreements.” [Id.]. Pursuant
to those agreements, Petitioner agreed to pay 6% interest and 20% of the proceeds received from
the sale of any entity in which Petitioner had an ownership interest. [Id.]. The agreement provided
for full repayment of the loans plus interest seven years from the end of the calendar year in which
the loan was made. [Id.].
Petitioner’s attorney stated that between 2007 and 2011, Stewart loaned Petitioner
$2,052,925. [Id. at 56-57]. He attached loan agreements purportedly signed by Stewart and

Petitioner and executed in Union County, North Carolina, in 2007, 2008, 2009, 2010, 2011, and
2012. Each of the six agreements independently granted Stewart twenty percent of the sale of any
of Petitioner’s businesses. Therefore, when considered together, they provided that Stewart would
receive 120% of the proceeds from the sale of any of Petitioner’s businesses. [Id. at 64]. Balance
sheets for STS, reflecting assets and liabilities as of December 31, 2008, and as of December 31,
2010, purportedly signed by Stewart and Petitioner, did not reflect any loan from STS to Petitioner
or his companies as an asset. [Id. at 41-42]. Petitioner’s attorney also submitted documents
purporting to transfer to STS an interest in Petitioner’s properties in St. Lucia and Brevard, North
Carolina, and in two properties in Jamaica, including Stewart’s home address. [Id. at 66-70]. Both
Stewart and Petitioner purportedly signed these property transfers as they purportedly signed the
others. [Id. at 67-68].
The grand jury indicted Petitioner, charging him with three counts of filing a false tax
return, 26 U.S.C. § 7206(1), for the years 2008, 2009, and 2010 (Counts One, Two, and Three),
and one count of obstructing or attempting to obstruct, influence, and impede the grand jury and

aiding and abetting the same, 18 U.S.C. §§ 1512(c)(2) and 2 (Count Four). [CR Doc. 3: Bill of
Indictment]. The Indictment alleged that between 2007 and 2010, Petitioner and his companies
received deposits exceeding $2.5 million and underreported his income by more than $1.5 million
and that Petitioner’s personal expenditures “far exceeded his total income” as reported on his
individual tax returns. [Id.]. The Indictment also alleged that in 2008 to 2010 Petitioner failed to
report, as required, his interest in or authority over a financial account in a foreign country. [Id. at
3]. As to the obstruction count, the Indictment alleged that Petitioner had attempted to obstruct a
federal investigation by providing fraudulent documents, including purported loan agreements
between STS and Petitioner, to the grand jury. [Id. at 5]. Petitioner retained counsel and was

represented by four attorneys at trial. [CR Docs. 1, 13; 9/21/2015 Docket Entry].
At trial, the United States presented evidence that in 2007, 2008, and 2009, Stewart
attended a community college in Jamaica, studying hospitality and tourism management and
worked in the United States over the summer. [CR Doc. 78 at 32, 36-37, 40, 51; CR Doc. 81 at
89-90]. “Despite allegedly owning a multi-million dollar business [STS], Stewart worked at the
Best Western hotel in Cody, Wyoming for less than $10 an hour,” and, at one point, “was unable
to pay a $600 fee without her hotel earnings.” Sutherland, 921 F.3d at 424. In her application for
employment, Stewart did not list STS as part of her “[o]ther activities and experience.” [CR Doc.
78 at 54].
The evidence at trial not only outlined [Sutherland’s] financial
misdeeds …, but also demonstrated that the loan documents
Sutherland sent to the U.S. Attorney’s office in July 2012 had been
fabricated. Read together, the documents implausibly pledged that
Sutherland would give STS 120% of the proceeds of any sale of his
businesses. While the documents had purportedly been signed by
Sutherland’s sister, evidence revealed that Sutherland commonly
signed documents for her. The loan documents from Sutherland,
moreover, conflicted with internal accounting documents from STS
(the purported lender). Finally, the government introduced
documents in which Sutherland claimed to have made loan
payments by transferring interests in his other businesses to STS.
But these related documents were bogus and backdated. A
document supposedly signed in 2011, for example, described how
Sutherland’s businesses had “received loans from [STS] in 2011,
2012, and 2013.” J.A. 1333. Legitimate documents do not reference
potential future transactions in the past tense, just a bona fide loans
to not require fake payment trails.

Sutherland, 921 F.3d at 424-25.
Michael Jones, Petitioner’s business partner from 1999 until 2008 and a native of Jamaica,
testified at trial about the companies he and Petitioner formed, their decision to form STS to act as
an insurance intermediary in Bermuda, and the sources of commissions paid to their companies.
[CR Doc. 80 at 62, 64-67, 74-76, 78-80]. Jones testified that Petitioner was “the primary expert
in … offshore insurance” among their collaborators. [Id. at 79]. When asked what relationship
Stewart had with STS, Jones replied, “She had none.” [Id. at 81]. Jones explained that he traveled
to Bermuda with Petitioner on three occasions, interacting and working with representatives from
companies they worked with and Stewart “was never part of any conversation.” [Id.].
According to Jones, the companies he and Sutherland operated received commissions from
the sale of their insurance products. [Id. at 74]. Jones testified that Petitioner’s brother worked
for Petitioner and paid commissions to collaborators in accordance with their contracts. Petitioner,
however, did most of the bookkeeping and answered financial questions about the businesses. [Id.
at 76-77]. Jones testified that Petitioner sent emails under his own name, Stewart’s name, and his
brother’s name. [Id. at 112].
Jim Price, owner of a company that facilitated the sale of insurance policies in Bermuda,
first met Petitioner in 2005. [Id. at 214]. Price testified that Stewart signed contracts between STS
and Price’s company but that he never met her. [Id. at 222, 225-26]. Price also testified that when

he needed Stewart to sign a contract or other documents, he sent the documents to Stewart through
Petitioner because he was told [Stewart] traveled all the time” in Europe, selling software to
offshore companies. [Id. at 250, 254-260]. Some of these documents were ostensibly signed by
Stewart in Charlotte during one of the summers she was working at the Best Western in Cody,
Wyoming. [CR Doc. 78 at 36-37; CR Doc. 80 at 257-58].
Peter Barnett, the managing director of Transamerica Life between 2005 and 2010, testified
that Transamerica Life contracted with STS to represent clients from the United States who wanted
to buy insurance. [CR Doc. 80 at 177, 180, 195]. Transamerica Life paid commissions to STS on
the policies STS helped facilitate. [Id. at 182, 191-92]. Barnett testified that he negotiated with

Petitioner and that, while he had seen Stewart’s name on documents between STS and
Transamerica Life, he never met Stewart or spoke with her. [Id. at 186-87].
Doug Boik, owner of an information-technology consulting company that provide website
development, internet marketing, and corporate email services to Petitioner and his companies,
testified that he worked with Petitioner on technology matters related to STS. [CR Doc. 79 at 141-
48, 160]. Boik testified that he assumed that STS was in Charlotte because he dealt only with
Petitioner from when Boik began providing services to STS in 2007 until 2014 or so, when Stewart
became his billing contact for STS. [Id. at 142-43, 174].
Agent Linda Polk of the Internal Revenue Service (“IRS”) assisted in the investigation of
Petitioner’s case. She testified about financial records for Petitioner and his business entities. [CR
Doc. 81 at 113]. Polk testified that she reviewed Petitioner’s business ledgers and summarized
how various transactions were recorded. [Id. at 117-18]. Some transactions between STS and
Petitioner’s other companies were described as “capital contributions.” [Id. at 118]. Polk testified

that capital contributions and bona fide loans are not taxable to the recipient. [Id. at 118-19, 198].
Polk further testified that more than $45,000 of fees and rent paid by Innovation Partners to Insigne
was not treated as income to Insigne. [Id. at 140-41]. Polk also testified that $66,376 of income
to Petitioner from sources other than STS was not treated as income on Petitioner’s 2008 tax return.
[Id. at 149]. Polk testified that almost $50,000 that Petitioner received was not reported as income
on Petitioner’s 2009 federal tax return, and that more than $39,000 that Petitioner received was
not treated as income on Petitioner’s 2010 federal tax return. [Id. at 150-51].
The defense called five witnesses. [CR Doc. 81 at 215, 237, 248, 257; CR Doc. 82 at 6].
Peter Moison, the president of CastleRe Insurance Company, a Bermuda company, testified

regarding Petitioner’s expertise and experience in the insurance field, as well as his reputation for
honesty. [CR Doc. 81 at 216-17]. Moison also testified that his company’s payments went to
Innovation Partners, not STS. [Id. at 220]. Gerald Nowotny, an attorney and business owner,
testified that he had worked with Petitioner and referred clients to him, and that Petitioner had an
excellent reputation for honesty. [Id. at 237-44]. Sally Gilliam, a due diligence consultant with
Wells Fargo, testified that she had previously worked at Innovation Partners as a compliance
associate and that there were nine employees working there when she left. [Id. at 249].
The defense prepared a summary chart of credit card accounts and balances for four
accounts, one for Petitioner, one in his name for Insigne, and two for his wife. [CR Doc. 81 at
257-58]. The exhibit was admitted through the testimony of Marissa Mugan, a paralegal, and
showed large balances were carried on the cards. [Id. at 257-60]. Finally, a business valuation
expert, Bradford Taylor, testified regarding the value of Innovation Partners and Insigne Advisor
Consulting at the time a percentage of those companies was transferred to STS as alleged
repayment of the loans. [Doc. 82 at 6-7, 14, 17]. At the end of 2011, the total value was $10,000;

in 2012 it was $250,000; in 2013 it was $720,000; in 2014 it was $1.45 million; and by 2016 it
was $7.2 million. [Id. at 25]. Petitioner did not testify. [Id. at 43-44].
The jury found Petitioner guilty on all four counts. [CR Doc. 44: Jury Verdict].
Petitioner was sentenced on June 21, 2017. [CR Doc. 84 at 1: Sentencing Tr.]. At
sentencing, Petitioner sought to decrease the loss calculation. He argued that the “books
mischaracterized a whole bunch of things to the benefit and to the detriment of Mr. Sutherland.”
[Id. at 6]. Jane Frazier, a managing member of a public accounting firm with a B.S. in accounting,
testified for Petitioner. [Id. at 9-10]. She testified that she found other unreported income based
on an interview with Petitioner and documents that he provided, documents from his law firm, and

the Government’s exhibits. [Id. at 12-14, 16]. Frazier testified that she had not included certain
money as income because it was her “understanding” that certain transfers were from a line of
credit at STS. [Id. at 15]. She included deductions for business expenses that were paid using
Petitioner’s personal credit care. [Id. at 17-18]. Frazier testified that she calculated a loss of $283,
438 for 2007, which she carried forward to 2008. [Id. at 24]. She determined that there was a
policy with United Healthcare that was in the name of Kryotech Holdings. [Id. at 25-26].
Although payments were made for that policy from other entities, she eliminated the deduction
from there and included it under Kryotech because the policy was in that company name. [Id. at
26]. Based on her calculations, Frazier concluded that Petitioner owed no additional tax for 2008,
that he owed $2,530 for 2009, and that he owed $32,943 for 2010. [Id. at 28-29].
Frazier admitted that Petitioner provided much of the information regarding what charges
were for business expenses, that she did not have receipts for everything, and that she did not audit
all the items in QuickBooks. [Id. at 34-35, 49]. Her calculations showed hundreds of thousands

of dollars of business expenses that were all cash. [Id. at 36]. She did not have all the bank records
underlying the transactions or even all of Sutherland’s accounts. [Id. at 39-45]. She allowed
business expenses of $5,000-$6,000 a year for grocery store purchases based on Petitioner’s
representations that they were business expenses. [Id. at 49-50]. Frazier deducted anything that
was vehicle related based on Petitioner’s representation that the expenses were business related,
although there was no mileage log. [Id. at 52].
The Government, on the other hand, argued that the records were unreliable and “just don’t
make sense.” The Government argued that Petitioner asked the Court to include business expenses
from companies that appeared nowhere on Petitioner’s tax returns in calculating loss. [Id. at 62-

63]. The Government also stated that it was very conservative in its estimates due to the lack of
records supporting different expenses. [Id. at 61-62].
The Court found that the self-reported information from Petitioner was not reliable and that
it was “just not believable” that “you can live this lifestyle off of that little money.” [Id. at 63-64].
The Court found that the Guidelines correctly stated the loss amount. [Id. at 64]. The Court varied
downward and sentenced Petitioner to 33 months’ imprisonment on all counts, to be served
concurrently, and one year of supervised release on the tax counts and three years of supervised
release for the obstruction count, to run concurrently. [Id. at 90].
Petitioner appealed, [CR Doc. 72], and the Fourth Circuit affirmed his conviction on April
22, 2019. Sutherland, 921 F.3d at 421, cert. denied, 140 S.Ct. 1106 (2020). Petitioner was released
from prison on March 22, 2019. Petitioner’s one-year term of supervised release on Counts One
through Three has been discharged, but Petitioner remains on supervised release on his obstruction
of justice charge. In November 2020, this Court denied Petitioner’s motion for early termination

of his term of supervised release on this charge. [CR Docs. 88, 94]. On February 24, 2021,
Petitioner filed the pending § 2255 motion to vacate and petition for writ of coram nobis. [CV
Docs. 1, 3]. In his § 2255 motion, Petitioner argues that he received ineffective assistance of
counsel because his attorney did not call his brother, Phillip Sutherland, as a witness at trial and
did not call an expert in accounting and taxes to testify at trial, citing the expert testimony he
offered at sentencing. [CV Doc. 1 at 19, 23]. Petitioner also petitions the Court for writ of coram
nobis to vacate his convictions on Counts One through Three on essentially the same grounds.
[CV Doc. 3].
The matter is now ripe for disposition.

II. STANDARD OF REVIEW
A. Motion to Vacate
A federal prisoner claiming that his “sentence was imposed in violation of the Constitution
or the 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, may move the court which imposed the sentence to vacate, set aside or correct
the sentence.” 28 U.S.C. § 2255(a).
Rule 4(b) of the Rules Governing Section 2255 Proceedings provides that courts are to
promptly examine motions to vacate, along with “any attached exhibits and the record of prior
proceedings . . .” in order to determine whether the petitioner is entitled to any relief on the claims
set forth therein. After examining the record in this matter, the Court finds that the motion to
vacate can be resolved without an evidentiary hearing based on the record and governing case law.
See Raines v. United States, 423 F.2d 526, 529 (4th Cir. 1970).
B. Coram Nobis

The All Writs Act, 28 U.S.C. § 1651(a), authorizes the Court to hear petitions for a writ of
error coram nobis. United States v. Morgan, 346 U.S. 502, 512 (1954). A coram nobis petition is
“of the same general character as one under 28 U.S.C. § 2255,” but is available to petitioners who
are no longer “in custody” and cannot seek habeas relief under § 2255 or §2241. Morgan, 346
U.S. 506 n. 4. It is a remedy of last resort and is “narrowly limited to extraordinary cases presenting
circumstances compelling its use to achieve justice.” Kornse v. United States, No. 1:19-cv-00290-
MR, 2019 WL 6169808, at *2 (W.D.N.C. Nov. 19, 2019) (citations and internal quotation marks
omitted). “[J]udgment finality is not to be lightly cast aside; and courts must be cautious so that
the extraordinary remedy of coram nobis issues only in extreme cases.” United States v. Denedo,

556 U.S. 904, 916 (2009).
A petitioner for coram nobis is not entitled to relief unless he can meet his burden to prove
four elements: “(1) a more usual remedy is not available; (2) valid reasons exist for not attacking
the conviction earlier; (3) adverse consequences exist from the conviction sufficient to satisfy the
case or controversy requirement of Article III; and (4) the error is of the most fundamental
character.” United States v. Akinsade, 686 F.3d 248, 252 (4th Cir. 2012) (citation omitted). This
is a “substantial burden,” even “‘exceeding that of an ordinary habeas petitioner.’” Hall v. United
States, No. 3:12-cv-762, 2012 WL 5902432, at *3 (W.D.N.C. 2012) (quoting Akinsade, 686 F.3d
at 261 (Traxler, C.J., dissenting)). Whether to grant the writ is ultimately a matter of this Court’s
discretion. See Akinsade, 686 F.3d at 252 (reviewing denial of writ for abuse of discretion).
III. DISCUSSION
The Sixth Amendment to the U.S. Constitution guarantees that in all criminal prosecutions,
the accused has the right to the assistance of counsel for his defense. See U.S. Const. Amend. VI.

To show ineffective assistance of counsel, Petitioner must first establish deficient performance by
counsel and, second, that the deficient performance prejudiced him. See Strickland v. Washington,
466 U.S. 668, 687-88 (1984). The deficiency prong turns on whether “counsel’s representation
fell below an objective standard of reasonableness ... under prevailing professional norms.” Id. at
688. A reviewing court “must apply a ‘strong presumption’ that counsel’s representation was
within the ‘wide range’ of reasonable professional assistance.” Harrington v. Richter, 562 U.S. 86,
104 (2011) (quoting Strickland, 466 U.S. at 689). The Strickland standard is difficult to satisfy in
that the “Sixth Amendment guarantees reasonable competence, not perfect advocacy judged with
the benefit of hindsight.” See Yarborough v. Gentry, 540 U.S. 1, 8 (2003).

The prejudice prong asks whether counsel’s deficiency affected the judgment. See
Strickland, 466 U.S. at 691. A petitioner must demonstrate “a reasonable probability that, but for
counsel’s unprofessional errors, the result of the proceeding would have been different. A
reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. at
694. In considering the prejudice prong of the analysis, a court cannot grant relief solely because
the outcome would have been different absent counsel’s deficient performance, but rather, it “can
only grant relief under . . . Strickland if the ‘result of the proceeding was fundamentally unfair or
unreliable.’” Sexton v. French, 163 F.3d 874, 882 (4th Cir. 1998) (quoting Lockhart v. Fretwell,
506 U.S. 364, 369 (1993)). Under these circumstances, the petitioner “bears the burden of
affirmatively proving prejudice.” Bowie v. Branker, 512 F.3d 112, 120 (4th Cir. 2008). If the
petitioner fails to meet this burden, a reviewing court need not even consider the performance
prong. Strickland, 466 U.S. at 670.
“The decision whether to call a particular witness is almost always strategic, requiring a
balancing of the benefits and risks of the anticipated testimony.” Jackson v. United States, 638 F.

Supp. 2d 514, 550 (W.D.N.C. 2009) (quoting Horton. Allen, 370 F.3d 75, 86 (1st Cir. 2004)).
Risks include a witness not testifying as anticipated, witness whose character or demeanor might
be viewed unfavorably by the jury, and eliciting testimony that could “prompt jurors to draw
inferences unfavorable to the accused.” Id. Strategic decisions of counsel are entitled to
“enormous defendant.” United States v. Terry, 366 F.3d 312, 317 (internal quotation and citation
omitted); Strickland, 466 U.S. at 669. To establish ineffective assistance, counsel’s decision not
to call a witness must be “so patently unreasonable that no competent attorney would have made
it.” Jackson, 683 F. Supp. 2d at 550 (internal citation and quotation omitted).
A. Motion to Vacate

Petitioner moves to vacate his convictions on all four counts of conviction based on
ineffective assistance of counsel. Section 2255 requires that a prisoner be in custody at the time
he files his motion to vacate. See 28 U.S.C. § 2255; Carafas v. LaVallee, 391 U.S. 234, 238 (1968).
Where a petitioner’s sentence, including any term of supervised release, has been fully discharged,
the petitioner is no longer in custody. Maleng v. Cook, 490 U.S. 488, 491-92 (1989). “[O]nce the
sentence imposed for a conviction has completely expired, the collateral consequences of that
conviction are not themselves sufficient to render an individual ‘in custody’ for the purposes of a
habeas attack upon it.” Id. at 492.
Petitioner is no longer in custody on his convictions for Counts One through Three. His
term of supervised release on these convictions was discharged on March 22, 2020. He did not
file the pending § 2255 motion until over one year later. Relief under § 2255 for these convictions
is, therefore, unavailable. Relief is proper, if at all, through the writ of coram nobis, which
Petitioner concedes in his petition therefore. [CV Doc. 3 at 12 (“[Petitioner] is not eligible for

habeas relief under 28 U.S.C.§ 2255” on Counts One through Three.”)].
The Court, therefore, considers Petitioner’s motion to vacate as it relates to his conviction
for obstruction of justice only. Petitioner, however, presents no viable grounds for relief on this
claim. He claims that “[h]ad defense counsel presented evidence creating a reasonable doubt about
the government’s theory that the STS Transfers were not loans, such evidence would have defeated
all of the counts of the indictment.” [CV Doc. 2 at 2-3]. Petitioner, however, does not show how
this evidence would have defeated the obstruction of justice charge in particular. [See id. at 2-9].
And Petitioner’s allegations are too vague and conclusory to warrant further examination. See
United States v. Dyess, 730 F.3d 354, 359-60 (4th Cir. 2013) (holding it was proper to dismiss §

2255 claims based on vague and conclusory allegations), cert. denied, 135 S. Ct. 47 (2014).
Moreover, as more fully address below, Petitioner’s counsel’s performance was not deficient in
any event.
As such, the Court will deny and dismiss Petitioner’s § 2255 motion to vacate as to all
counts.
B. Coram Nobis
Relief under the writ of coram nobis, on the other hand, is available only when a petitioner
is no longer in custody for the challenged conviction(s). Here, Petitioner seeks relief through this
writ on his convictions on Counts One through Three for which he is no longer in custody. Because
it is determinative, the Court looks directly to the fourth element of a coram nobis claim, that “the
error is of the most fundamental character.”
Petitioner argues that he is entitled to coram nobis relief because his trial counsel was
ineffective. [CV Doc. 3 at 15]. Specifically, Petitioner argues that he received ineffective
assistance because his trial counsel failed “to present material and substantial testimonial evidence

supporting the defense that the subject funds were nontaxable loans and not income” and “that no
or a minimal tax was due for the years at issue.” [Id. at 16, 20]. Petitioner claims that such
evidence could have been shown through the testimony of Petitioner’s brother, Phillip Sutherland,
and an accounting and tax expert, such as Michelle Frazier, Petitioner’s expert at sentencing. [Id.
at 16-23]. Petitioner, however, fails to establish any error let alone one of fundamental character.
As to his brother’s testimony, Petitioner contends Phillip would have testified that, despite
having no education, training, or experience in bookkeeping or accounting, he was the bookkeeper
for Petitioner’s companies, including Innovation Partners. [CV Doc. 1 at 20]. Petitioner asserts
that Phillip would have admitted making numerous mistakes and omissions in QuickBooks. [Id.].

Phillip would have testified that he used the name “Phillip Augustus,” rather than Phillip
Sutherland in work matters to avoid having the same email address as Petitioner. [Id. at 21].
Phillip would have testified to his sister Beverly’s “savvy business acumen,” her having owned a
restaurant in a shopping plaza in Jamaica before 2008, and him having observed her living in a
nice house in 2013. [Id.]. Petitioner also contends that Phillip would have testified to what Jones
knew, what he overheard Petitioner and Stewart discussing, and what Petitioner and his sister-in-
law told him.3 [Id. at 20]. As to expert testimony, Petitioner contends that a tax and accounting
expert “would have provided evidence that (1) approximately half of the source of the STS

3 Petitioner did not provide an affidavit from his brother, Phillip, attesting to the expected testimony.
Transfers were the STS Line of Credit Funds that such expert would have characterized as loans
to Sutherland and (2) because of untaken deductions, there was no or de minimis taxes due for the
years in question.” [CV Doc. 3 at 19]. Petitioner also asserts that his attorney failed to adequately
investigate the deductions reflected in Petitioner’s tax returns and that, if counsel had so
investigated, counsel could have presented evidence of the nature and amount of untaken

deductions at trial through an expert like Frazier. [Id. at 21-22].
Petitioner claims that the failure to present testimony by Phillip and a tax and accounting
expert constituted deficient performance and prejudiced Petitioner “because it deprived the jury of
evidence relevant to the key issue at trial – whether the funds at issue were loans or income,” thus,
plainly “undermin[ing] confidence in the outcome.” Strickland, 466 U.S. at 694.
Assuming for the sake of argument that Phillip would have testified as offered and that
such testimony was admissible, Petitioner cannot show deficient performance or prejudice.
Petitioner’s attorney prepared Phillip for trial. After hearing the Government’s evidence, counsel
decided not to call Phillip as a witness. This decision was well within the bounds of reasonable

professional assistance. There were risks incident to calling Phillip, including being cross-
examined on his grand jury testimony. Moreover, Phillip’s purported testimony would have
emphasized his numerous bookkeeping errors, except as to Innovation Partners, the one company
that had to be audited. This would have highlighted either Petitioner’s knowledge of Phillip’s
errors or his willful blindness to them. Finally, given the evidence of fraudulent documents
associated with Stewart’s name, evidence from another of Petitioner’s relatives would not likely
have favorably impressed the jury.
Petitioner also fails to show deficient performance or prejudice regarding the failure to
call an accounting expert at trial. Petitioner points to Frazier’s testimony at sentencing to support
what could have been shown at trial. The Federal Rules of Evidence, however, do not apply at
sentencing hearings and there is a substantial question regarding whether Frazier’s testimony
would have been admissible at trial. See Fed. R. Evid. 703; United States v. Slager, 912 F.3d 224,
235 n.4 (4th Cir. 2019). Frazier admitted that she did not have records for all of Petitioner’s
accounts and that her findings of large unclaimed business expenses relied on evidence from

Petitioner which was not supported by itemized receipts. Her calculations were based on
hypothetical recharacterizations and shifting money to different entities. Ultimately, Frazier’s
testimony was insufficient to sway the Court at sentencing, in any respect, and the Court found
that the self-reported information from Petitioner was not reliable. Petitioner seems also to ignore
the risks that were associated with presenting tax expert testimony at trial, a risk that was born out
at sentencing where Frazier’s testimony was undermined. The jury could have easily seen such
testimony as reflecting more evidence of intentional mischaracterization of income and expenses.
Petitioner’s counsels’ decision not to present such testimony was well within the bounds of
reasonable professional assistance.

Moreover, Petitioner’s assertion that his attorney failed to adequately investigate the
accounting before trial is speculative and unsupported by the record. The record shows that
defense counsel was familiar with the relevant transactions and employed generalizations to
support the defense that the books were messy and, thus, mistakes were less evident. This
approach evidences a strategic means of casting doubt on intent.
Petitioner also fails to show prejudice. Even if an expert had testified at trial, at best, the
expert would have testified that Petitioner’s tax returns were not accurate and that he owed less
money in taxes than shown by the Government. Evidence that Petitioner still owed a significant
amount of money in taxes to the IRS does show that the result of these proceedings was
fundamentally unfair or unreliable. Sexton, 163 F.3d at 882. Petitioner, therefore, has not shown
an error of the most fundamental character. He is not entitled to relief under coram nobis.4
IV. CONCLUSION
For the foregoing reasons, the Court denies Petitioner’s § 2255 motion to vacate, denies
Petitioner’s petition for writ of coram nobis, and grants the Government’s motion to dismiss.

The Court further finds that Petitioner has not made a substantial showing of a denial of a
constitutional right. See generally 28 U.S.C. § 2253(c)(2); see also Miller-El v. Cockrell, 537 U.S.
322, 336-38 (2003) (in order to satisfy § 2253(c), a “petitioner must demonstrate that reasonable
jurists would find the district court’s assessment of the constitutional claims debatable or wrong”)
(citing Slack v. McDaniel, 529 U.S. 473, 484-85 (2000)). Petitioner has failed to demonstrate both
that this Court’s dispositive procedural rulings are debatable, and that the Motion to Vacate states
a debatable claim of the denial of a constitutional right. Slack v. McDaniel, 529 U.S. at 484-85.
As a result, the Court declines to issue a certificate of appealability. See Rule 11(a), Rules
Governing Section 2255 Proceedings for the United States District Courts, 28 U.S.C. § 2255.

O R D E R
IT IS, THEREFORE, ORDERED that:
1. Petitioner’s Motion to Vacate, Set Aside or Correct Sentence under 28 U.S.C. §
2255 [Doc. 1] is DENIED;
2. Petitioner’s Petition for Writ of Coram Nobis [Doc. 3] is DENIED;
3. The Government’s Motion to Dismiss [Doc. 9] is GRANTED;
4. Petitioner’s Motion to Strike the Government’s Surreply [Doc. 12] is DENIED;
and

4 Because Petitioner has not shown such an error, the Court declines to address the other elements required
for coram nobis relief.
5. Pursuant to Rule 11(a) of the Rules Governing Section 2254 and Section 2255
Cases, this Court declines to issue a certificate of appealability.
IT IS SO ORDERED.
Signed: September 10, 2021

astevrnna
Max O. Cogburn Jr =
United States District Judge Foal gale st

20

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10257456. Public record. Not legal advice.