# FALCI v. United States

> District Court, D. New Jersey · April 25, 2024

URL: https://www.frixlaw.com/law-library/cases/10278714

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** April 25, 2024
- **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/10278714

## How later opinions describe it (automated extraction)

- noting that movant did not provide an affidavit from the witness stating that he would have been available to testify and or describing his potential testimony
- noting that it is necessary to analyze an ineffectiveness claim considering all circumstances

## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
VINCENTP.FALCL =——ss—SSC:
Petitioner, Civ. No. 20-8962 (RK)
v .
UNITED STATES OF AMERICA, OPINION
Respondent.

KIRSCH, District Judge
THIS MATTER comes before the Court upon a Motion to Vacate, Set Aside or Correct
his Sentence Pursuant to 28 U.S.C. § 2255. See ECF No. 1. In his Motion, Petitioner initially
proceeded pro se, and asserted two claims: Claim I, Petitioner stated his criminal defense trial
counsel (“Trial Counsel”) was ineffective by failing to advise him of the elements of the charged
offense required for conviction; and Claim I, Petitioner stated his Trial Counsel failed to provide
any defense to the wire fraud counts, /d. at 4-5. On January 2, 2024, the Court issued a
Memorandum & Order which ordered an evidentiary hearing on Claim I, appointed legal counsel
to represent him at said hearing, and reserved ruling on Claim II. On January 16, 2024, the Court
appointed Michael A. Armstrong, Esq. to represent Petitioner. On February 29, 2024, the Court
conducted an evidentiary hearing at which Petitioner and his Trial Counsel, John Yauch, Esq., an
Assistant Public Defender, both testified. Mr. Armstrong appeared on behalf of Petitioner and
Matthew Specht, an Assistant U.S. Attorney for the District of New Jersey appeared for the
Respondent, United States of America.

I. INTRODUCTION
Petitioner, Vincent P. Falci (“Petitioner” or “Falci”), is a federal prisoner currently
incarcerated at F.C.1. Fort Dix in Fort Dix, New Jersey. For the following reasons, Petitioner’s §
2255 motion is denied and a certificate of appealability shall not issue.
I. FACTUAL AND PROCDURAL BACKGROUND
From approximately 2006-2016, Petitioner defrauded investors of millions of dollars
through a Ponzi scheme. Petitioner told investors he would safely invest their money in two
investment funds he controlled named the Saber and Vicor Funds. See Presentence Investigation
Report (“PSR”) ¥ 14. Petitioner falsely represented to investors that the funds were growing year
after year when Petitioner was actually diverting investor money for his own personal use. See id.
{| 14-15. When investors requested a disbursement of their invested money, Petitioner would use
newly invested funds to make those redemptions. See id. J 16.
Petitioner began to raise money for the Saber Fund in 2001. See id. § 12. Petitioner
misrepresented to investors that the Saber Fund was invested in 85-90% tax lien certificates that
were growing steadily over time. See id. { 17. Petitioner further misrepresented to investors that
the fund’s performance handily beat indices and that the fund’s model made it virtually impossible
not to generate positive returns year after year. See id. In reliance on those misrepresentations,
investors gave Petitioner more money to invest for them on their behalf. Petitioner raised at least
$15,000,000 from investors for the Saber Fund. See id.
Petitioner diverted money to himself and to riskier investments. See id. 18. For example,
Petitioner paid himself and his family approximately $1,000,000 from the money invested in the
Saber Fund from 2006-2009. See id. Petitioner also transferred money from the Saber Fund to
brokerage accounts. See id. Those accounts lost money though through day trading and other

investments. See id. Petitioner also transferred $3,000,000 from the Saber Fund to another entity
he controlled to use that money to buy and rehabilitate residential properties. See id. Most of
those investments also lost money. See id.
In 2011, Petitioner began soliciting investments for the Vicor Fund. See id. 20. Petitioner
told those investors he was an experienced financial advisor, particularly in the area of tax liens.
See id. He touted his experience as the founder and operator of the Saber Fund, which he falsely
told investors was primarily invested in tax liens. See id. Petitioner raised millions of dollars for
the Vicor Fund, from which, in turn, he diverted a substantial portion for he and his family’s own
personal use. See id at Jf 20, 25. For example, from January 2015 to May 2016, Petitioner
distributed over $500,000 of investor money to himself and his family. See id.
Petitioner was arrested on December 16, 2016. He was charged by way of complaint with
two counts of wire fraud in violation of Title 18, United States Code, Section 1342 and Section 2;
and one count of securities fraud in violation Title 15, United States Code, Sections 78j(b) and
78ff. See Crim. No. 17-228 ECF No. | at 2-3.! In January 2017, Mr. John H. Yauch, Esq., was
assigned to Petitioner as his Trial Counsel. See Crim. No. 17-228 ECF No. 11.
On March 6, 2017, the government provided a written plea agreement to Petitioner. See
ECF No. 9-1. The plea agreement stated that the government would accept a plea of guilty to one
count of securities fraud, in exchange for a recommended sentence of eighty-four months in prison.
Petitioner rejected this plea offer.
On June 18, 2017, a federal grand jury indicted Petitioner on one count of securities fraud.
See Crim. No. 17-228 ECF No. 14.

' References to documents found within Petitioner’s criminal proceedings are explicitly cited with
that criminal action number in this opinion. Unless otherwise indicated, other ECF number
citations are from this civil action.

On August 9, 2018, the government again communicated to Petitioner a written plea offer.
See ECF No. 9-2. This plea offer, like the first, called for Petitioner to plead guilty to one count
of securities fraud, with the identical recommended sentence of eighty-four-months. Petitioner
again rejected the plea offer.
On August 23, 2018, a federal grand jury returned a superseding indictment against
Petitioner. See Crim. No. 17-228 ECF No. 43. This superseding indictment charged Petitioner
with one count of securities fraud and three counts of wire fraud. See Crim. No. 17-228 ECF No.
43.
The trial court conducted a hearing pursuant to Missouri v. Frye, 566 U.S. 134 (2012) to
ensure that Petitioner understood the contents of the plea offers and that he had discussed them
with his attorney before rejecting them prior to trial. The following colloquy took place between
Petitioner, the Court,” and counsel at this pretrial hearing:
[THE COURT]: Do you remember, Mr. Falci, receiving a proposed
plea agreement dated March 6th, 2017?
[FALC]]: Yes, Your Honor.
[THE COURT]: All right, so you recall receiving a copy of the
proposed plea agreement and you understood that the plea
agreement would be in lieu of the trial?
[FALCT]: Yes, Your Honor.
[THE COURT]: In other words, you plead or you go to trial. Those
are the choices.
[FALCI]: Yes, Your Honor.
[THE COURT]: Now, did you discuss that plea agreement with
your lawyer?
[FALC]]: I did.
[THE COURT]: And did the plea agreement have an expiration on
it? In other words, you have to plead by a certain date or thus and
such if you recall?
[FALC]]: I don’t recall specifically.
[THE COURT]: All right. But did you have enough time to discuss
it?
[FALC]]: I believe so.
The Honorable Anne. E. Thompson presided over Petitioner’s criminal proceedings.

[THE COURT]: And did you decide to accept the plea agreement
or to go to trial?
[FALCI]: I decided not to accept the plea agreement.
[THE COURT]: Isee. And you realized that the alternative would
be to go to trial?
[FALCT]: I did.
[THE COURT]: Now, did you understand that whether or not to
accept the plea agreement offered by the Government is entirely
your decision, not your lawyer’s decision? He is an experienced
professional who has been assigned to you to help you navigate the
legal system but he’s not the one who’s going to suffer the
punishment one way or the other. And, therefore, it’s not his welfare
that’s on the line. It’s yours. And, therefore, whatever he says is
advisory but the decision is yours, not his.
[FALC]]: I understand that, Your Honor.
[THE COURT]: Now, I understand there was another plea
agreement dated August 9th, 2018.
[FALC]]: Yes.
(THE COURT]: Do you remember that?
[FALC]]: Yes.
[THE COURT]: And again, did you have a chance to discuss it with
your lawyer?
[FALC]]: I did.
[THE COURT]: And did you appreciate the fact that this was
something that your lawyer could advise you on but it really was
going to be your decision, not his? You understood that?
[FALC]]: I understood it was my decision, Your Honor.
[THE COURT]: And you understood that if you took the plea
agreement, there would be no trial?
[FALCT]: I did.
[THE COURT]: But if you went to trial, you might end up with a
result much worse than might have happened in terms of your
exposure in the plea agreement?
[FALCI]: I understand that.
[THE COURT]: All right. And did you understand that nobody,
nobody, nobody can guarantee you what 12 jurors randomly
selected here will ultimately decide?
[FALC]]: I understand that.
[THE COURT]: And that this is a risk and it’s yours to make and
only you in the end will be the person to experience the
consequences of the decision. Did you understand that?
[FALC]]: Yes.
THE COURT: Mr. Herring [Government Assistant United States
Attorney], are there additional questions . . . with regard to this
subject --.... the Frye hearing.
MR. HERRING: No, Your Honor.

THE COURT: All right, thank you very much. Mr. Yauch, maybe
if you'd like to elaborate? Is there anything you’d like to seal this
proceeding with?
MR. YAUCH: Judge, I can just inform the Court that I’ve had
extensive discussions with the Government regarding a resolution
of this matter and I’ve communicated with my client, all of those
possible ways that this case could have been resolved short of trial
and it’s my client’s decision to elect to proceed to trial.
THE COURT: With all of the details that a trial encompasses,
Witnesses who may testify one way or may testify another way,
jurors who are ultimately strangers, who knows what is in their
heads, there are all of these factors which in any trial lawyers have
to consider in discussing with their clients what a trial encompasses.
You’ve done that with your client?
MR. YAUCH: Absolutely.
THE COURT: All right, thank you very much. If there’s nothing
further that either side would like said or questioned about, I’m
satisfied. Thank you.
ECF No. 9-3 at 6-10.
Trial Counsel filed pre-trial motions on behalf of Petitioner. After they were denied,
Petitioner’s trial commenced in December 2018. The government presented several witnesses.
The defense presented no witnesses, but Trial Counsel cross-examined the government’s
witnesses, moved for a judgment of acquittal, presented an opening statement on behalf of
Petitioner, and gave a closing argument. The jury returned a verdict of guilty on all four counts of
the superseding indictment. See Crim. No. 17-228 ECF No. 83. Petitioner was ultimately
sentenced to 180 months imprisonment. See id. ECF No. 95. Petitioner did not file a direct appeal.
Subsequently, Petitioner filed the instant § 2255 motion. See ECF No. 1. Petitioner raises
two claims in his § 2255 motion. In Claim I, Petitioner argues that Mr. Yauch was ineffective
during the plea process when he failed to notify Petitioner of the elements that the government was
required to prove for a conviction on the securities fraud charge. See ECF No. 1 at 4. More
specifically, Petitioner asserts Mr. Yauch improperly led him to believe that the government
needed to prove motive to obtain a securities fraud conviction. Had he been properly informed of

the securities fraud elements, Petitioner claims he would have accepted the plea offer. In Claim
Il, Petitioner argues Mr. Yauch provided ineffective assistance at trial by failing to provide a
defense on the three wire fraud charges. See id. at 5. The government filed a response in
opposition to Petitioner’s § 2255 motion. See ECF No. 9. Petitioner filed a reply brief in support
of his § 2255 motion. See ECF No. 12. As stated, on February 29, 2024, the Court conducted an
evidentiary hearing on Claim J. Both Petitioner and Mr. Yauch testified. The court will now
adjudicate Claim I and Claim IL.
tl. LEGAL STANDARD
A motion to vacate, set aside or correct a sentence of a person in federal custody pursuant
to 28 U.S.C. § 2255 entitles a prisoner to relief if “the court finds . . . [t]here has been such a denial
or infringement of the constitutional rights of the prisoner as to render judgment vulnerable to
collateral attack.” 28 U.S.C. § 2255(b). “In considering a motion to vacate a defendant's sentence,
‘the court must accept the truth of the movant's factual allegations unless they are clearly frivolous
based on the existing record.’” United States v. Booth, 432 F.3d 542, 545 (3d Cir. 2005) (quoting
Gov't of Virgin Islands v. Forte, 865 F.2d 59, 62 (3d Cir. 1989)) (other citation omitted). A court
“Is required to hold an evidentiary hearing ‘unless the motion and files and records of the case
show conclusively that the movant is not entitled to relief.’” Jd. at 545-46 (quoting Forte, 865
F.2d at 62). The Third Circuit has stated that this standard creates a “‘reasonably low threshold
for habeas petitioners to meet.’” Jd. at 546 (quoting United States v. McCoy, 410 F.3d 124, 134
(3d Cir. 2005) (quoting Phillips v. Woodford, 267 F.3d 966, 973 (9th Cir. 2001))). Accordingly,
a court abuses its discretion “if it fails to hold an evidentiary hearing when the files and records of
the case are inconclusive as to whether the movant is entitled to relief.” Jd. (citing McCoy, 410

F.3d at 134). The Court ultimately determined that Claim I necessitated an evidentiary hearing
but that Claim II did not.
IV. DISCUSSION
Both of Petitioner’s claims contend that Trial Counsel provided ineffective assistance of
counsel. The Sixth Amendment guarantees effective assistance of counsel. In Strickland v.
Washington, 466 U.S. 668 (1984), the United States Supreme Court articulated a two-prong test
for demonstrating when counsel is deemed ineffective. First, a petitioner must show that
considering all the circumstances, counsel’s performance fell below an objective standard of
reasonableness. See id. at 688; see also Grant v. Lockett, 709 F.3d 224, 232 (3d Cir. 2013) (noting
that it is necessary to analyze an ineffectiveness claim considering all circumstances) (citation
omitted). A petitioner must identify the acts or omissions that are alleged not to have been the
result of reasonable professional judgment. See Strickland, 466 U.S. at 690. Under this first prong
of the Strickland test, scrutiny of counsel’s conduct must be “highly deferential.” See id. at 689.
Indeed, “[c]ounsel is strongly presumed to have rendered adequate assistance and made all
significant decisions in the exercise of reasonable professional judgment.” Jd. at 690. The
reviewing court must make every effort to “eliminate the distorting effects of hindsight, to
reconstruct the circumstances of counsel’s challenged conduct, and to evaluate the conduct from
counsel’s perspective at the time.” Jd. at 689. If counsel makes “a thorough investigation of law
and facts” about his plausible options, the strategic choices he makes accordingly are “virtually
unchallengeable.” Gov’t of Virgin Islands v. Weatherwax, 77 F.3d 1425, 1432 (d Cur. 2006)
(citing Strickland, 466 U.S. at 690-91). If, on the other hand, counsel pursues a certain strategy
after a less than complete investigation, his choices are considered reasonable “to the extent that

reasonable professional judgments support the limitations on investigation.” Rolan v. Vaughn,
445 F.3d 671, 682 (3d Cir. 2006) (citing Strickland, 466 U.S. at 690-91).
The second prong of the Strickland test requires a petitioner to affirmatively prove
prejudice. See 466 U.S at 693. Prejudice is found when “there is a reasonable probability that,
but for counsel's unprofessional errors, the result of the proceeding would have been different.”
Id. at 694, A reasonable probability is probability sufficient to undermine confidence in the
outcome.” Id.; see also McBridge v. Superintendent, SCI Houtzdale, 687 F.3d 92, 102 n.11 (3d
Cir, 2012). “This does not require that counsel's actions more likely than not altered the outcome,
but the difference between Strickland’s prejudice standard and a more-probable-than-not standard
is slight and matters only in the rarest case. The likelihood of a different result must be substantial,
just conceivable.” Harrington v. Richter, 562 U.S. 86, 111-12 (2011) (internal quotation marks
and citations omitted).
“With respect to the sequence of the two prongs, the Strickland Court held that ‘a court
need not determine whether counsel’s performance was deficient before examining the prejudice
suffered by the defendant as a result of the alleged deficiencies .... If it is easier to dispose of an
ineffectiveness claim on the ground of lack of sufficient prejudice .. . that course should be
followed.” Rainey v. Varner, 603 F.3d 189, 201 (3d Cir. 2010) (quoting Strickland, 466 U.S. at
697).
1. Claim I~ Ineffective Assistance During Plea Proceedings
In Claim I, Petitioner argues that Mr. Yauch was ineffective by failing to properly explain
to Petitioner the elements the government needed to prove to convict him of securities fraud, most
notably, whether Petitioner’s motive was an element the government needed to prove for a

conviction. This purported failure by Mr. Yauch caused Petitioner to misapprehend the
government’s burden at trial and led Petitioner to reject the government’s plea offers.
Petitioner’s Sixth Amendment right to counsel extends to the plea-bargaining process. See
Lafler v. Cooper, 566 U.S. 156, 162 (2012). “When addressing a guilty plea, counsel is required
to give a defendant enough information “‘to make a reasonably informed decision whether to
accept a plea offer.’”” United States v. Bui, 795 F.3d 363, 367 (3d Cir. 2015) (quoting Shotts v.
Wetzel, 724 F.3d 364, 376 (3d Cir. 2013) (quoting United States v. Day, 969 F.2d 39, 43 (3d Cir.
1992))). “A defendant who rejects a guilty plea and receives a more severe sentence after trial
makes a claim of ineffective assistance when ‘he alleges that the advice he received was so
incorrect and so insufficient that it undermined his ability to make an intelligent decision about
whether to accept the offer.’” Morris v. Adm'r New Jersey State Prison, 770 F. App'x 601, 605 (3d
Cir. 2019) (quoting Day, 969 F.2d at 43). In the context of rejecting a plea, a petitioner must show
that “‘but for counsel’s deficient performance there is a reasonable probability he and the trial
court would have accepted the guilty plea’ and the resulting sentence would have been lower.”
Shotts, 724 F.3d at 376 (citation omitted). However, the Third Circuit has cautioned that courts
should be “wary” of claims that trial counsel did not adequately advise a defendant about the
benefits and consequences of a plea offer because “defendants will always want the best of both
worlds: the chance at acquittal at trial, yet the chance to plead guilty if the trial defense fails.” Day,
969 F.2d at 46 n.9.
In Claim I, Petitioner asserted as follows:
Mr. Yauch, allowed Petitioner to jump in with both feet without
telling him what was lurking under the surface. Indeed, Mr. Yauch
told Petitioner going to trial was a bad idea, but when Petitioner
repeatedly professed that he “didn’t steal any money,” and
maintained that he had his investors best interest in mind
throughout, Mr. Yauch should have explained to Petitioner that

10

those factors did not matter. Not one bit. Neither theft, nor motive
are elements of the offense for which Petitioner was charged.
Instead, counsel told him if that were the case, “he couldn’t plead
guilty.” Thus, Petitioner proceeded to trial misunderstanding what
the government needed to prove to convict him....
If Petitioner had been properly informed, he would have graciously
accepted the government’s eighty-four month plea offer, rather than
proceed to trial...
Petitioner’s counsel knew about Petitioner’s misconception of the
elements the government needed to prove, but never corrected
Petitioner nor ever explained what the government was required to
prove. Indeed, Petitioner’s assertion to counsel time-and-time again
was that he a) didn’t steal any money and b) he had pure intentions
to turn a profit for his investors. Counsel never explained to
Petitioner that neither of those were elements the government would
be required to prove. Nor did he ever explain to Petitioner what the
government would have to prove. Counsel merely stated that the
government had to prove criminal intent, but Petitioner thought that
meant intent to steal the investor money. Counsel never even used
the word “element,” and beyond mentioning that the government
had to prove criminal intent, never elaborated further on the burden
of proof. Petitioner was adamant with Counsel that the government
could not prove he intended to steal the investor’s money. He
believed the only thing he was “guilty” of was choosing investments
that decreased in value rather than increased. Mr. Yauch responded
by telling Petitioner that if that were the case, then Petitioner “could
not plead guilty.” It is unclear from the record if defense counsel
knew the correct elements required for conviction under §§ 78j(b)
and ‘78ff.
ECF No. 1-2 at 2, 6.
Respondent opposed Claim I arguing that Petitioner failed to show that counsel’s
performance fell below an objective standard of reasonableness and/or that Petitioner failed to
show prejudice. Among the exhibits that Respondent included was a declaration from Mr. Yauch.
See ECF No. 9-6. In that declaration, Mr. Yauch stated that he thoroughly explained the elements
for each charge and at no time told Petitioner that the government needed to prove motive. See id.
at 2.

1]

The Court ultimately determined that an evidentiary hearing was warranted on Claim I.
See ECF No. 17. Indeed, a final decision on Claim J could have potentially involved (as it does in
this case) making a credibility determination between Petitioner’s and Mr. Yauch’s versions of
events. Both Petitioner and Mr. Yauch testified at the February 29, 2024 evidentiary hearing. A
brief recitation of their testimony at that hearing is described infra.
i, Petitioner’s Testimony
Petitioner testified at the hearing. He presented himself, as his Trial Counsel described, as
an amiable, likable individual. He was polite and conversational, and answered the questions posed
to him without anger or defensiveness. Notwithstanding, while he spoke in a measured, non-
confrontational tone, it is clear that some of his responses, particularly on the critical issues before
the court, strained the bounds of credulity. The court does not find that Petitioner intentionally
testified falsely or tried to mislead the court but rather, in light of the passage of time and the stress
of being under federal charges, it is the court’s conclusion that he failed to appreciate the
information and advice that his very experienced Trial Counsel provided to him over the span of
significant time and many face-to-face meetings.
Petitioner testified that this case was the first time he had been arrested. See Hr’g Tr. at
4-5, Feb, 29, 2024. He stated that he first met his assigned Trial Counsel in January of 2017, and
the court notes that the trial was conducted in December of 2018, almost two years after their first
meeting. Id. at 5. Petitioner, on cross-examination, admitted that he was arrested in December of
2016 on a complaint charging him with wire fraud and securities fraud, and that in March of 2017,
the government presented him with the first plea agreement wherein he would agree to plead guilty
to one count of securities fraud, which he rejected. /d. at 12. He admitted that, in June of 2017, the
was indicted by the grand jury to a count of securities fraud, and that in August of 2018, he rejected

12

a second plea offer. /d. at 12-13. He acknowledged that a superseding indictment charged him with
one count of securities fraud and three counts of wire fraud, and he testified under oath, that he
understood that the result of a trial may well be worse for him than the terms contemplated by the
plea agreement. Jd. at 13.
He acknowledged that Trial Counsel explained the charges brought against him, although
he seemed to qualify the acknowledgement by adding “on a limited basis,” thereafter. Jd. at 5-6.
Despite their “several meetings,” Petitioner testified that he never heard the term “elements of the
offense” at any point, and that Trial Counsel never reviewed the elements of the charge of
securities fraud with him. Id. at 6-8. Without explaining the basis for this supposition, Petitioner
claimed as follows: “I-was under the impression that they simply had to prove that I stole money.”
Id. at 6. Now, years later, after learning the elements of securities fraud, he realizes that he, in fact,
was guilty and seeks to accept the plea offer which was tendered to him, twice, and rejected both
times. /d. at 18.
Petitioner, however, did admit that Trial Counsel did review the plea offer with him, and
that his lawyer advised him that he was exposed to a potential twenty year term in federal prison
on the charge of securities fraud. /d. at 8-9. Remarkably and implausibly, Petitioner denied that
Trial Counsel failed to review or discuss the application of the U.S. Sentencing Guidelines, and
denied so much as seeing a Sentencing Guidelines’ manual over the course of his meetings with
Trial Counsel. /d. at 9-10.
il. Mr. Yauch’s Testimony
Mr. Yauch confirmed he was assigned to represent Petitioner “in the early stages” of the
case. Id. at 21. Throughout his testimony, Trial Counsel did not exhibit, verbally or in body
language, any animus regarding the Petitioner. To the contrary, throughout his testimony, he

13

repeatedly referred to Petitioner as “Vinnie,” and described him as not “the typical white-collar
greedy bastard. He was — he was a good guy. He was a good decent, guy.” Id. at 27.
Mr. Yauch testified that he has been a criminal defense lawyer “(flor over thirty years.”
Id. at 19. He has represented “hundreds, if not thousands” of criminal defendants. See id. at 20.
Mr. Yauch was appointed to this case to represent Petitioner “in its early stages.” Jd. at 21. Mr.
Yauch consulted with Petitioner “many times.” Jd. Mr. Yauch testified about the volumes of
discovery in this case as the purported fraud took place over a ten-year period. See id. at 21-22.
The discovery included “financial statements, all the different entities involved .. . bank records”
and encompassed “thousands and thousands of pages[.]” /d. at 22.
Mr. Yauch then explained his defense team. “There was an investigator assigned to the
case; there was a paralegal assigned to the case; there was another attorney assigned to [the] case.”
Id. Both Mr. Yauch and the investigator spoke to many witnesses pre-trial. See id. In addition,
he stated that the defense had retained “several experts in connection with the case, mostly on a
consultant basis.” Jd.
Mr. Yauch filed several pretrial motions, but, after they were denied, he had “numerous
discussions” with Petitioner about his options. See id. at 23. These discussions occurred mostly
in person at Mr. Yauch’s Newark, New Jersey office. See id. During these discussions, Mr. Yauch
testified that “I made it plain to Mr. Falci that the evidence was overwhelming, and it was a terrible
case to take to trial, and I begged him, I literally begged him, to not take this case to trial, given
what could happen after a trial and a likely guilty verdict.” Jd. at 24, Indeed, Mr. Yauch testified
that the evidence against Petitioner was “suffocating.” Jd.
Mr. Yauch then testified that he went over what possible sentences Petitioner faced at trial
if convicted. Mr. Yauch testified that, in anticipation of his testimony, he reviewed his notes which

14

confirmed that “on several occasions” he advised “Vinnie,” the Petitioner, that his exposure under
the Sentencing Guidelines was 262-327 months and told him “you don’t want to be in that position.
The proofs are very strong.” See id. at 25. Indeed, Mr. Yauch stated that the more witnesses he
spoke to during his investigation, the worse the case got as it related to Petitioner’s guilt. See id.
at 25. He testified: “Every stone we unturned in the case didn’t make the case any better for us. It
only made it worse.” Id.
Mr. Yauch then testified about his conversations with Petitioner about the proofs the
government would need to show at trial. Mr. Yauch stated he had “many . . . specific discussions”
with Petitioner about the proofs the government would need to show and the likely proofs that
would be presented by the government. See id. at 24,25. Mr. Yauch was then questioned at the
evidentiary hearing whether motive was an element of any of the crimes for which Petitioner was
charged. See id. at 26. Mr. Yauch expressly testified that he never advised Petitioner that motive
was an element the government needed to prove for a conviction, but that the government “would
likely” present evidence of motive, which included evidence of money that he and his family
received, and that “he was living a good life for a couple years.” /d. at 26-27. Indeed, he further
noted that there was never any time that Petitioner indicated to him that Petitioner believed motive
was an element of securities fraud. See id. at 28-29. Most problematic, according to Trial Counsel,
were the proofs which “centered around all the monies that these investors put into his scheme and
all of the ways that he disguised the movement of monies and put together this scheme to defraud.”
Id. at 27.
Mr. Yauch was then questioned about the jury instructions at trial. He expressly stated that
he did not ask that motive be included as an element of the charges because “motive is not an
element of the intent to defraud.” See id. at 28.

15

After the government completed its direct examination of Mr. Yauch, the Court then asked
Mr. Yauch several questions. First, the Court inquired of Mr. Yauch how he reviewed the specific
elements of securities fraud with Petitioner. He responded as follows:
Well, most of the time it was done generally. We would describe —
I mean, in the indictment itself, we would go through the indictment,
because, of course, in order to plead not guilty at the arraignment,
he had to understand the nature of the charge against him. So we
would review it then.
Then, as I got up to speed and more comfortable with the case, we
would sit down and I would review with him, look, here’s what the
government is going to do to prove their case. Here are the elements.
And the crux of the defense, with all the charges, was — because of
the paper trail proved all the elements. The only thing that was in
question was the intent to defraud. So we had substantial
discussions regarding the intent — the intent to defraud and how that
element would be proved, and how it would be proved, in my
estimation, with the — the mountain of evidence the documentary
evidence regarding the different entities that were involved and
created by [Falci] in this scheme to defraud, and the movement of
monies amongst these different entities. And it was absolutely
suffocating in terms of, like I said, the — the volume of evidence and
proof, and we had discussions regarding that.
See id. at 31-32. The Court then concluded its colloquy with Mr. Yauch by inquiring whether Mr.
Yauch had educated himself about the elements of a securities fraud charge and whether he
reviewed those elements with Petitioner. See id. at 33. Mr. Yauch stated that he was certain before
the Frye hearing that he educated himself on the securities fraud elements and was “certain” that
he reviewed those elements with Petitioner. See id.
iii. Analysis
The testimony of Petitioner and Trial Counsel were consistent on a number of issues. For
example, it was clear to the court that Petitioner and Trial Counsel enjoyed a productive and open
attorney-client relationship, built over a substantial period of time, and over the course of many
face-to-face meetings. As stated, Trial Counsel had positive feelings for Petitioner and it is clear

16

to the Court that he was very devoted to providing Petitioner with the best legal advise possible
under the circumstances. Both acknowledged that Trial Counsel reviewed the charges with
Petitioner, and the plea agreements tendered by the government, and that Petitioner was aware of
the potential twenty-year sentence to which he was exposed if he was convicted of securities fraud.
Petitioner and Trial Counsel, however, differ on whether Trial Counsel reviewed the elements of
the offense of securities fraud with him, and whether motive was an element for securities fraud.
In assessing witness credibility, the Court is guided by several factors such as:
(1) the opportunity and ability to see or hear or know the things the
witness testifies to;
(2) the quality of the witness’s understanding and memory;
(3) the witness’s manner while testifying;
(4) whether the witness has an interest in the outcome of the case or
any motive, bias or prejudice;
(5) whether the witness is contradicted by anything the witness said
or wrote before trial or by other evidence;
(6) how reasonable the witness’s testimony is when considered in
the light of other evidence that you believe; and
(7) any other factors that bear on believability.
3d Cir. Model Civ. Jury Instructions § 1:7.
Mr. Yauch has thirty years of experience as a defense attorney and has worked with
hundreds of clients. Mr. Yauch’s testimony indicated how seriously he took this case and the
incredible volume of evidence he reviewed and evaluated. He assembled a team which consisted
of an investigator and a second lawyer. Mr. Yauch showed no animus towards Petitioner and, to
the contrary, he exhibited palpable regret years later in Petitioner’s unwavering insistence to go to
trial, notwithstanding his repeated and clear advise that it was not in his interest to do so. His
testimony was unambiguous that he talked to Petitioner about the proper elements that the
government needed to prove to secure a securities fraud conviction.

17

After analyzing the relevant credibility factors, and having had the ability to observe both
Petitioner and Mr, Yauch at the evidentiary hearing, the Court finds Mr. Yauch’s testimony highly
credible and accords his testimony great weight. Thus, for the following reasons, Petitioner fails
to show that counsel’s performance fell below an objective standard of reasonableness with respect
to Claim I.
The review and discussion of the elements of a charged criminal offense with a client is a
foundational, rudimentary function of a defendant’s attorney. The notion that a highly experienced
and dedicated attorney like Mr. Yauch, on a case with such significant penal exposure to his client,
after having assembled a team (including an investigator, co-counsel, and a number of expert
consultants), after delving into thousands of pages of written discovery, and over a span of almost
two years would have failed to review the elements of securities fraud with his client is near
impossible to conjure. Mr. Yauch was adamant that he properly instructed Petitioner as to the
elements of the charges, and that motive was not one of them. Petitioner’s self-interested testimony
on this point, on what may be his last chance to challenge his judgment of conviction, wreaks of
implausibility. The court credits Mr. Yauch’s testimony in this regard.
The court also notes that Judge Thompson’s jury instructions were eminently clear that
motive was not an element the government needed to prove for a securities fraud conviction.
First, Judge Thompson recited the elements the government needed to prove for the jury to
find Petitioner guilty of the securities fraud charge; more specifically, Judge Thompson instructed
the jury as follows:
[Flour essential elements for Count 1 [securities fraud], all right?
One, that the defendant knowingly did one of the following as
detailed in the description of Count 1 of the indictment. Employed
any device, scheme or artifice to defraud or made any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements not misleading in light of

12

the circumstances under which they were made or engage in a
transaction, practice or course of business which operated or would
operate as a fraud and deceit on a person. Any one of the three is
sufficient but the jury must be unanimous as to which one of the
three it was.
Two, moving on now to Element Number 2. We did Element
Number 1. Now we’re going to Element 2. Defendant did so in
connection with the purchase or sale of the securities described in
Count 1.
Three, in connection with this purchase or sale defendant made use
of or caused the use of any means or instrumentality of interstate
commerce or of the mails.
And four, the fourth essential element, defendant acted knowingly,
willfully and with the intent to defraud.
Crim. No. 17-228 ECF No. 87 at 27-28. Subsequently, Judge Thompson explicitly noted that
motive was not an element of the offenses charged. Indeed, she instructed the jury as follows:
Now, motive is not an element of the offense with which the
defendant is charged. Proof of bad motive — J think that heading is
supposed to be motive explained. [I’m just going to write that in,
motive explained at the header.
Proof of bad motive is not required to convict that the defendant is
guilty and proof of good motive alone does not establish that the
defendant is not guilty. Evidence of the defendant’s motive,
however, may help you find the defendant’s intent. Intent and
motive, however, are different concepts. Motive is what prompts a
person to act. Intent refers to the state of mind with which the
particular act is done. Personal advancement and financial gain, for
instance, are motives for much of human contact. However, these
motives may prompt one person to intentionally do something
perfectly acceptable while prompting another person to intentionally
do an act that is a crime.
Now, let’s define willfully. What does willfully mean? The offense
of securities fraud charged in the indictment requires that the
Government prove that the defendant acted willfully with respect to
an element of the offense. This means the Government must prove
beyond a reasonable doubt that the defendant knew his conduct was
unlawful and intended to do something that the law forbids. That is,
to find that the defendant acted willfully, you must find that the

19

evidence prove beyond a reasonable doubt that the defendant acted
with a purpose to disobey or disregard the law.
Willfully does not, however, require proof that the defendant any
evil motive or bad purpose other than the purpose to disobey or
disregard the law. Willfully does not require proof that the actor of
the existence and meaning of the statute making his conduct
criminal.
See Crim. No. 17-228 ECF 87 at 43-45.
Judge Thompson’s instructions were clear. Motive was not an element of the securities
fraud charge. Had Mr. Yauch improperly instructed Petitioner or thought that motive was an
element of the securities fraud charge as Petitioner claims, it makes logical sense that an objection
would have been made to Judge Thompson’s jury instructions on motive. No objection was made.
This lends further credence to Mr. Yauch’s, as opposed to Petitioner’s, version of events.
Petitioner was properly advised of the elements of securities fraud. It did not include a motive
element.
Therefore, the Court finds Mr. Yauch’s representation of Petitioner did not fall below an
objective standard of reasonableness. Thus, Claim I is denied.?
2. Claim II — Ineffective Assistance of Counsel for Failing to Present a Defense to Wire Fraud
Counts
In Claim II, Petitioner asserts that counsel failed to provide a defense to the three wire fraud
counts against him at trial. Petitioner did not present any witnesses at trial. Mr. Yauch filed pre-
trial motions, cross-examined witnesses, moved for a judgment of acquittal, and otherwise argued
extensively on Petitioner’s behalf during opening and closing arguments.
Initially, the Court notes that Petitioner has come forward with no witnesses that Mr. Yauch
should have called on his behalf to testify at trial. In Duncan v. Morton, 256 F.3d 189, 202 (3d

*Given that Mr. Yauch’s performance did not fall below an objective standard of reasonableness
as to Claim I, the Court need not address whether Petitioner has shown Strickland prejudice.
an

Cir. 2001), the Third Circuit found that a habeas petitioner’s failure to present any sworn testimony
by the witnesses the habeas petitioner claimed counsel should have investigated and called as a
witness amounted to a failure to establish Strickland prejudice. In the § 2255 context, other courts
have similarly found that a petitioner needs to provide a sworn statement of fact from the proposed
witness regarding what they would have testified to if a § 2255 petitioner is to establish Strickland
prejudice. See Huggins v. United States, 69 F. Supp. 3d 430, 446 (D. Del. 2014) (noting that
movant did not provide an affidavit from the witness stating that he would have been available to
testify and or describing his potential testimony); Karamos v. United States, No. 04-0171, 2005
WL 2777552, at *4 (D.N.J. Oct. 24, 2005) (“[T]he Court cannot conclude that Petitioner was
prejudiced by counsel's failure to investigate or call these individuals as witnesses because
Petitioner has failed to provide a sworn statement of facts from any of the seventeen detailing their
proposed testimony.”).
Given Petitioner’s failure to come forward with any witness statements, the fact that Mr.
Yauch did not call any witnesses does not, in and of itself, constitute ineffective assistance of
counsel under the relevant Strickland standard. Furthermore, the Court has reviewed the record,
particularly the closing arguments by Mr. Yauch. Mr. Yauch strenuously argued that Petitioner
lacked criminal intent to be found guilty. See Crim. No. 17-228 ECF No. 88 at 56-78. Petitioner’s
conclusory statement that counsel did not provide a defense is belied by the record in this case.
Accordingly, Claim Il is denied as Petitioner fails to show that Mr. Yauch performed ineffectively
and/or failed to show prejudice by not defending him on the wire fraud counts.*

* While certainly not controlling to the Court’s disposition on Claim II, it is at least worth noting
that Judge Thompson stated at the close of trial that the attorneys maintained a high level of
professionalism throughout. See Crim. No. 17-228 ECF No. 89 at 5.

51

V. CERTIFICATE OF APPEALABILITY
Pursuant to 28 U.S.C. § 2253(c), unless a circuit justice or judge issues a certificate of
appealability, an appeal may not be taken from a final order in a proceeding under 28 U.S.C. §
2255. A certificate of appealability may issue “only if the applicant has made a substantial
showing of the denial of a constitutional right.” 28 US.C. § 2253(c)(2). “A petitioner satisfies
this standard by demonstrating that jurists of reason could disagree with the district court’s
resolution of his constitutional claims or that jurists could conclude the issues presented are
adequate to deserve encouragement to proceed further.” Miller-El v. Cockrell, 537 U.S. 322, 327
(2003) (citation omitted). Applying this standard, the Court will deny Petitioner a certificate of
appealability.
VI. CONCLUSION
For the reasons stated above, Petitioner’s § 2255 motion is denied and a certificate of
appealability shall not issue. An appropriate order will be entered.° □ Lo □□

DATED: April 25, 2024 Nee ee -
ROBERT KIRSCH NN
United States District Judge □□

5 The Court expresses its appreciation to Mr. Michael A. Armstrong, Esq., for representing
Petitioner at the February 29, 2024 evidentiary hearing.
99

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10278714. Public record. Not legal advice.