Petition for Writ of Certiorari — Kay Ellison, Petitioner v. United States

Supreme Court briefMar 24, 2025

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No. ____

IN THE

Supreme Court of the United States

________________

KAY ELLISON,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

________________

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Third Circuit

________________

Petition for Writ of Certiorari

________________

THOMAS S. JONES

Counsel of Record

Nelson Mullins Riley & Scarborough LLP

One PPG Place, Suite 3200

Pittsburgh, PA 15222

thomas.jones@nelsonmullins.com

(412) 730-4500

CARA L. BRACK

Nelson Mullins Riley & Scarborough LLP

One PPG Place, Suite 3200

Pittsburgh, PA 15222

Question Presented

In Strickland v. Washington, 466 U.S. 668, 694

(1984), this Court delineated core aspects of the

Constitutional right to the effective assistance of

counsel. Under the paradigmatic test, the reviewing

court is asked to evaluate whether “but for” counsel’s

error, would the result have been different, essentially

asking whether the error was so material as to deprive

the defendant of a fair proceeding. Id. Subsequent to

Strickland, this Court further recognized that the “but

for” test becomes tenuously speculative when

counsel’s error deprives the defendant of an entire

proceeding. See Roe v. Flores-Ortega, 528 U.S. 470,

483 (2000). Under those circumstances, the test is not

centered on a projected, hypothetical outcome had

counsel performed with the Constitutionallyprotected effectiveness but, rather, whether the

defendant would have availed themselves of the

proceeding foregone.

This case presents a simple, important, but

unresolved question:

Is the loss of the opportunity to present

an affirmative case due to Constitutionally-deficient

representation during trial the loss of a “proceeding”

such that the process-based test for prejudice applies

to Petitioner’s claim for habeas relief?

Parties to the Proceedings

In the Petition arising from Appeal No. 22-2169 in

the United States Court of Appeals for the Third

Circuit, Petitioner is Kay Ellison (“Petitioner”).

Respondent

(“Respondent”).

United

States

America

There are no corporate parties involved in this

case.

iii

Statement of Related Proceedings

This case arises from the following proceedings in

the United States Court of Appeals for the Third

Circuit and the United States District Court for the

District of New Jersey:

Kay Ellison v. United States of America, Appeal

No. 22-2169, United States Court of Appeals for the

Third Circuit. Opinion filed December 30, 2024,

Petition for Rehearing En Banc denied December 23,

2024.

Kay Ellison v. United States, No. 2:21-cv-16230SDW, United States District Court for the District of

New Jersey. Opinion filed June 7, 2022.

United States v. Kay Ellison, Appeal No. 18-3683,

United States Court of Appeal for the Third Circuit.

Opinion filed February 12, 2020.

United States v. Judy Tull & Kay Ellison, No. 2:15cr-622-SDW, United States District Court for the

District of New Jersey. Judgment entered on

November 29, 2018 and Amended Judgment entered

on February 22, 2019.

Table of Contents

Question Presented ...................................................... i

Parties to the Proceedings .......................................... ii

Statement of Related Proceedings ............................ iii

Table of Contents ....................................................... iv

Table of Appendices ................................................... vi

Table of Authorities .................................................. vii

Petition for Writ of Certiorari .................................... 1

Opinions Below ........................................................... 1

Jurisdiction ................................................................. 1

Constitutional Provisions and Statutes at Issue ....... 2

Introduction and Summary ........................................ 4

Statement of the Case ................................................ 6

I. Ms. Ellison’s Criminal Trial and

Conviction ...................................................... 6

II. Proceedings Below. ...................................... 10

Reasons for Granting the Petition ........................... 12

The Decision Below Misapplies This

Court’s Precedent From Hill And Its

Progeny. ............................................................ 12

A. Hill And Its Progeny Created A

Test For Prejudice That Acknowledges

The Unfairness Of Requiring A

Defendant To Demonstrate The Effect

Of The Error On The Outcome Of A

Proceeding That Did Not Occur. .................... 14

B. The Process-Based Test For

Prejudice Applies To Any Circumstance

Where, As Here, A Defendant Loses

A Proceeding.................................................... 18

1. Ms. Ellison’s deprivation of her

case-in-chief is akin to the deprivation

of an entire proceeding. ............................... 19

2. The Panel’s holding that the

process-based test for prejudice only

applies outside the context of a trial

or trial-like proceeding is contrary

to this Court’s precedent. ............................ 22

C. The Process-Based Test For

Prejudice Sets Forth A Third Test For

Prejudice That Is Consistent With

Strickland And Does Not Require A

Per-Se Finding Of Prejudice. .......................... 24

II.

This Case Presents An Appropriate Vehicle

For Resolving An Important Question Of

Federal Law And Settling Confusion In

The Circuits. ..................................................... 26

Conclusion ................................................................. 28

TABLE OF APPENDICES

Page(s)

APPENDIX A – OPINION OF THE UNITED

STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT, FILED

OCTOBER 30, 2024 .............................................. 1a

APPENDIX B — ORDER OF THE UNITED

STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT, FILED

NOVEMBER 3, 2022 .......................................... 16a

APPENDIX C — OPINION OF THE UNITED

STATES DISTRICT COURT FOR

THE DISTRICT OF NEW JERSEY,

FILED JUNE 7, 2022 ......................................... 19a

APPENDIX D — ORDER DENYING

REHEARING OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD

CIRCUIT, FILED DECEMBER 23, 2024 .......... 69a

APPENDIX E — CONSTITUTIONAL

PROVISIONS AND STATUTE INVOLVED ..... 71a

vii

TABLE OF AUTHORITIES

Page(s)

Cases

Arizona v. Fulminate,

499 U.S. 279 (1991) ............................................. 24

Crane v. Kentucky,

476 U.S. 683 (1986) ............................................. 19

Garza v. Idaho,

586 U.S. 232 (2019) ........................... 13, 17, 18, 21

Hill v. Lockhart,

474 U.S. 52 (1985) ..........................5, 12, 14, 23, 25

Honie v. Powell,

58 F.4th 1173 (10th Cir. 2023) ................ 18, 27, 28

Jones v. Barnes,

463 U.S. 745 (1983) ............................................. 19

Lafler v. Cooper,

566 U.S. 156 (2012) ........................... 13, 16, 23, 25

Lee v. United States,

582 U.S. 357 (2017) ........................... 13, 17, 21, 26

Palmer v. Hendricks,

592 F.3d 386 (3d Cir. 2010) ..................... 11, 12, 24

Roe v. Flores-Ortega,

528 U.S. 470 (2000) ...................... 13-15, 18, 23, 25

viii

Strickland v. Washington,

466 U.S. 668 (1984) ........................ 5, 10-12, 15, 23

United States v. Ellison,

804 Fed. Appx. 153 (3d Cir. 2020) ...................... 10

United States v. Rahm,

993 F.2d 1405 (9th Cir. 1993) ............................. 19

Velazquez v. Supt. Fayette SCI,

937 F.3d 151 (3d Cir. 2019) ..................... 13, 18, 27

Vickers v. Supt. Graterford SCI,

858 F.3d 841 (3d Cir. 2017)

............................................................ 11, 13, 26, 27

Weaver v. Massachusetts,

582 U.S. 286 (2017) ............................................. 24

Statutes

28 U.S.C. § 2255 ................................................. 2, 3 10

28 U.S.C. § 1254(1)...................................................... 1

Other Authorities

Model Rule of Professional Conduct 1.4 .................. 19

U.S. CONST. AMEND. V. ............................................... 2

U.S. CONST. AMEND. VI. .............................................. 2

U.S. CONST. AMEND XIV.............................................. 2

Petition for a Writ of Certiorari

Petitioner respectfully petitions for a writ of

certiorari to review the opinion of the United States

Court of Appeals for the Third Circuit.

Opinions Below

The opinion of the United States Court of Appeals

for the Third Circuit is reported as Kay Ellison v.

United States of America, No. 22-2169, 120 F.4th 338

(3d Cir. 2024). United States Court of Appeal for the

Third Circuit. Opinion filed and judgment was

entered on October 30, 2024, reprinted at App. 1a.

Petition for Rehearing En Banc was denied on

December 23, 2024. App. 69a.

The District Court’s June 7, 2022 memorandum

and order denying Petitioner’s writ of habeas corpus

reported at Kay Ellison v. United States, No. 2:21-cv16230-SDW, 2022 WL 2047035, United States District

Court for the District of New Jersey. Opinion filed

June 7, 2022. App.19a

Jurisdiction

The United States Court of Appeals for the Third

Circuit issued its opinion and judgment on October 30,

2024. App.1a. Petitioner’s petition for rehearing en

banc was denied on December 23, 2024. App. 69a.

Under Supreme Ct. Rule 13.3, this Petition is timely.

The Court has jurisdiction under 28 U.S.C. § 1254(1).

Constitutional Provisions and Statutes at Issue

The Fifth Amendment to the United States

Constitution provides in part: “No person…shall be

compelled in any criminal case to be a witness against

himself, nor be deprived of life, liberty, or property

without due process of law[.]” U.S. CONST. AMEND. V.

App. 71a.

The Sixth Amendment to the United States

Constitution provides in pertinent part: “In all

criminal prosecutions, the accused shall enjoy the

right…to have the Assistance of Counsel for his

defense.” U.S. CONST. AMEND. VI. App. 72a.

The Fourteenth Amendment to the United States

Constitution provides in relevant part: “[N]or shall

any State deprive any person of life, liberty, or

property without due process of law[.]” U.S. CONST.

AMEND XIV. App. 73a.

28 U.S.C. § 2255(a) provides:

[a] prisoner in custody under sentence

of a court established by Act of

Congress claiming the right to be

released upon the ground that the

sentence was imposed in violation of

the Constitution or 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). App. 75a.

Introduction and Summary

Due to the Constitutionally-infirm advice of

counsel, Petitioner, Ms. Kay Ellison, lost a

proceeding—her case-in-chief at her criminal trial.

Ms. Ellison waived the right to present her case-inchief not because she was counseled that she should

not present a defense; rather, she was counseled that

she could not present a defense unless she waived her

Fifth Amendment right against self-incrimination.

Ms. Ellison sought habeas relief, which was denied by

the District Court and affirmed by the United States

Court of Appeals for the Third Circuit (“Third

Circuit”).

The Third Circuit Panel’s (the “Panel”) opinion

announced a rule regarding the application of the

process-based test for prejudice under the Sixth

Amendment that is contrary to this Court’s precedent.

The Panel’s opinion creates a novel, and erroneous,

standard: if the error underlying an ineffective

assistance of counsel claim occurs during a trial or a

trial-like proceeding, the outcome-based test for

prejudice applies to the claim no matter how much of

the proceeding is impacted or foregone. The Panel

further erred by likening the process-based test for

prejudice with the per se finding of prejudice

associated with structural error. This inappropriate

grouping of the two tests fails to recognize three

distinct lines of this Court’s precedent.

The Panel’s opinion is contrary to this Court’s

precedent and subverts the intention of Strickland v.

Washington, 466 U.S. 668, 694 (1984), Hill v.

Lockhart, 474 U.S. 52, 59-60 (1985), and their

progeny. This case presents the Court with an

opportunity to correct the Third Circuit’s course,

clarify the tests for prejudice in ineffective assistance

of counsel claims, and avoid confusion among other

federal courts.

Statement of the Case

Ms.

Ellison’s

Conviction

Criminal

Trial

and

In 2016, Ms. Kay Ellison and co-defendant Judy

Tull were charged by a superseding indictment with

eight counts of bank fraud, wire fraud, and conspiracy

to commit the same. App. 2a, 20a. Ms. Ellison was

represented throughout the litigation by James Lees,

Esq. App. 29a. Ms. Ellison and Ms. Tull were cofounders of Southern Sky Air & Tours d/b/a Myrtle

Beach Direct Air and Tours (“Direct Air”). App. 2a.

Direct Air was purchased by Avondale, and after

Direct Air’s purchase, Ms. Ellison and Ms. Tull

continued to work for Direct Air in a limited capacity.

App.46a.

The indictment alleged that Ms. Ellison and Ms.

Tull fraudulently conspired to withdraw funds held in

escrow for Direct Air’s customers by allegedly making

and canceling reservations for fictitious passengers,

and by fraudulently concealing Direct Air’s financial

condition from its creditors through the submission of

fraudulent release requests and financial statements

to these creditors. App. 20a-26a. Robert Keilman, who

held the title of CFO, among other titles, was a third

individual involved in the alleged conspiracy. App.

26a. Mr. Keilman was not charged in the conspiracy

and was a key witness for the government. A main

issue in the criminal trial was how funds reserved for

vouchers for future travel, consisting of a membership

fee and a voucher for air travel, were to be treated in

escrow. App. 25a, 31a-32a.

Throughout the litigation, Ms. Ellison maintained

her innocence and prepared to vigorously defend

against the government’s allegations. Ms. Ellison

took several steps that demonstrate she intended to

present a defense in some capacity, by either

testifying herself or presenting a number of

supporting defense witnesses. App. 29a. For example,

Ms. Ellison participated in a mock jury weeks ahead

of her trial, paid a jury consultant $5,000 to prepare

her to testify, and even paid an IT expert more than

$80,000 to testify regarding issues with the airline’s

accounting system. App. 36a. In fact, it had always

been Mr. Lees’ position, and Ms. Ellison’s

understanding, that her testimony and testimony of

the other witnesses would be pivotal to maintaining a

defense. App. 36a. (“Ultimately however conviction or

acquittal at trial will rest primarily upon your

performance when you are on the witness stand at

trial. I do not believe you can be acquitted at trial

without taking the stand and testifying.”). Mr. Lees

and Ms. Ellison prepared twelve witnesses to testify

in Ms. Ellison’s defense. App. 36a.

At trial, Mr. Lees promised the jury that it would

hear Ms. Ellison’s testimony and evidence:

I will tell you these two

citizens have been waiting

years to be here, to come

tell their side of the story as

to why the Department of

Justice, and this is our

position and as we go

through trial I will try as

best I can to introduce

evidence, have been sold a

bill of goods by some bitter,

bitter people to make these

two women the patsies for a

bankruptcy.

App. 29a. After presenting seven days of witnesses

and over three thousand exhibits, the prosecution

rested. App. 32a. Despite his previous promise to the

jury that Ms. Ellison’s testimony and other evidence

would be pivotal to her defense, Mr. Lees urged Ms.

Ellison not to testify. App. 37a. Critically, Mr. Lees

also erroneously informed Ms. Ellison that if she did

not testify, she would not be able to present any of the

other witnesses that were prepared to testify in her

defense. App. 37a. Ms. Ellison acquiesced and agreed

to rest without presenting a defense, effectively

leaving the government’s case unopposed. App. 3a,

32a-33a, 37a.

Ms. Ellison and her counsel participated in a

colloquy with the trial court, where she acknowledged

that she was waiving her right to testify. App. 37a.

However, that colloquy included nothing with respect

to Ms. Ellison’s ability to present other witnesses and

testimony even if she elected to assert her Fifth

Amendment right against self-incrimination:

THE COURT: All right. And

have

you

had

the

opportunity to discuss with

Mr. Lees, obviously, your

right not to testify as well as

your right not to put on a

case[?] Have you had those

discussions with [counsel]?

DEFENDANT

Yes, ma’am.

ELLISON:

THE COURT: And understa

nding, after you’ve had those

discussions with Mr. Lees,

has it been your decision

voluntarily to waive your

right to testify in this

matter?

DEFENDANT

Yes, ma’am.

ELLISON:

App. 3a. Although this colloquy advises Ms. Ellison

regarding the exercise of her Fifth Amendment rights,

it does nothing to decouple the patently erroneous

advice by Mr. Lees attaching such an invocation with

the right to present any witnesses or evidence at all.

App. 3a. Although Ms. Ellison states that she had

discussions with her counsel regarding her rights,

there is no evidence she was aware at that time that

his advice was erroneous. App. 3a.

After a one-sided jury trial in which Ms. Ellison,

relying on counsel’s misrepresentations, waived her

right to present a defense that she had so rigorously

prepared, on March 28, 2017, the jury convicted Ms.

Ellison on all eight counts in the superseding

indictment. App. 3a. After her conviction, Ms. Ellison

was sentenced to a 94-month term of imprisonment,

5-years of supervised release, and ordered to pay

$19,663,429.50 in restitution. App. 33a. Ms. Ellison

appealed her conviction and sentence, but both were

affirmed in 2020. App. 33a; see also United States v.

Ellison, 804 Fed. Appx. 153 (3d Cir. 2020).

II. Proceedings Below.

Ms. Ellison filed a petition for habeas corpus under

28 U.S.C. § 2255 in the United States District Court

for the District of New Jersey seeking to vacate her

sentence because her counsel’s erroneous advice

resulted in the ineffective assistance of counsel. App.

19a. The District Court denied habeas relief without

holding an evidentiary hearing, ruling that Ms.

Ellison did not reach the threshold of demonstrating

prejudice under the outcome-based test for prejudice

announced in Strickland, 466 U.S. at 694. App. 67a.

Ms. Ellison timely appealed the decision of the

District Court, and the Third Circuit issued a

certificate of appealability certifying two questions:

“(1) whether Ellison’s ineffectiveness claim should be

analyzed using the standard for prejudice set forth in

Palmer v. Hendricks, 592 F.3d 386, 397-99 (3d Cir.

2010), or whether the analysis in Vickers v. Supt.

Graterford SCI, 858 F.3d 841, 857 (3d Cir. 2017),

requires us to revisit that standard; and (2) whether a

certificate of appealability (COA) is required to appeal

from the denial of an evidentiary hearing.” App. 16a18a. The second question is not at issue in this

petition.

After briefing and oral argument, the Third Circuit

held that the Strickland, outcome-based test for

prejudice applied to Ms. Ellison’s ineffective

assistance of counsel claim and affirmed the holding

of the District Court that the evidence and testimony

Ms. Ellison intended to present would not have

changed the outcome of the proceeding. App. 14a.

However, the panel erred in three regards. First,

the Panel erred by holding that the process-based test

for prejudice only applies outside of a “trial or ‘triallike’ context[.]” App. 8a. This holding is directly

contrary to this Court’s precedent. Second, the panel

erred by holding that Ms. Ellison did not forfeit a right

that resulted in a loss of a proceeding, which is

required to trigger the process-based test for

prejudice. App. 14a. Third, the Panel erroneously

stated that Ms. Ellison sought a per se finding of

prejudice in her appeal, which is not accurate.

Reasons for Granting the Petition

The Decision Below Misapplies This

Court’s Precedent From Hill And Its

Progeny.

Under Strickland, a prima facie showing of

prejudice requires the petitioner to demonstrate that

“there is 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.” 466 U.S. at 694

(examining whether counsel was ineffective for by

allegedly presenting insufficient mitigation evidence

in a capital case). This has come to be known as the

“substantive” or “outcome-based” test for prejudice.

Many cases default to using this outcome-based test

without any further analysis as to why it is the

appropriate test. See, e.g., Palmer, 592 F.3d. at 39495 (applying Strickland without discussion to a

waiver of defendant’s right to testify case).

In Hill, decided one year after Strickland, this

Court departed from Strickland’s outcome-based test

and held that in certain circumstances, the test for

prejudice looks not to whether the defendant can

show, more likely than not, that the outcome would

have been different but, rather, whether the

defendant would have utilized a process lost due to

counsel’s ineffectiveness. 474 U.S. at 59-60. Hill’s

progeny from this Court, and as applied by circuit

courts of appeal, hold that where ineffectiveness leads

to the forfeiture of an option to exercise a fundamental

right to process that is reserved to the defendant, the

proper prejudice inquiry is whether the defendant can

demonstrate a reasonable probability that but-for

counsel’s ineffectiveness, the defendant would have

opted to exercise that right. See, e.g., Lafler v. Cooper,

566 U.S. 156, 164 (2012); Roe v. Flores-Ortega, 528

U.S. 470, 484 (2000); see also Vickers, 858 F.3d at 841;

Velazquez v. Supt. Fayette SCI, 937 F.3d 151, 162-63

(3d Cir. 2019).

To hold otherwise distorts the nature of the Sixth

Amendment guarantee to effective counsel at every

stage of the proceeding because it is unfair and

unworkable to require habeas petitioners to prove

that the outcome of the proceeding would have been

different where counsel’s error leads to the

deprivation of an entire process or proceeding. See,

e.g., Garza v. Idaho, 586 U.S. 232, 243-44 (2019)

(refusing to require a defendant to demonstrate how

the outcome of a proceeding that never occurred would

have been different); Lee v. United States, 582 U.S.

357, 366-67 (2017) (same).

A. Hill And Its Progeny Created A Test For

Prejudice

That

Acknowledges

The

Unfairness Of Requiring A Defendant To

Demonstrate The Effect Of The Error On

The Outcome Of A Proceeding That Did

Not Occur.

In Hill, this Court determined that in pleabargaining cases, the petitioner must only show that

she would have made a different decision in the

process. 474 U.S. at 59. Stated otherwise, a petitioner

can show that there is a reasonable probability that,

“but for counsel’s errors, he would not have pleaded

guilty and would have insisted on going to trial.” Id.

The petitioner was not required to show that he would

have prevailed at the end of the hypothetical trial. Id.

In so holding, the Court established a line

between circumstances where counsel’s poor

performance essentially precluded the happening of a

single event (i.e., the defendant’s testimony) and

where counsel’s actions forfeited an entire process

(such as an entirely foregone trial).

Subsequently, this Court clarified in FloresOrtega, 528 U.S. at 484, that the process-based

prejudice standard announced in Hill applies beyond

the plea-bargaining context. Rather, it is applicable

where “counsel’s alleged deficient performance

arguably leads not to a judicial proceeding of disputed

reliability, but rather to a forfeiture of a proceeding.”

Id. at 483 (applying the process-based test for

prejudice where alleged ineffectiveness was counsel’s

failure to file a notice of appeal, because it would be

unfair to require petitioner to demonstrate the

outcome of a hypothetical appeal). This Court

recognized that where counsel’s deficient performance

led to the loss of an entire process, it would be “unfair

to require a[] defendant to demonstrate that his

hypothetical appeal had merit.” Id. at 486.1

Where there is a loss of an entire process, whether

it be through a plea, failure to appeal, or foregoing the

1 The burden associated with requiring a criminal defendant to

demonstrate a reasonable probability that but-for counsel’s

deficient performance, the outcome of the proceeding would have

been different, has also drawn comment. In dissenting from the

majority in Strickland, Justice Thurgood Marshall criticized the

outcome-based prejudice standard as follows:

First, it is often very difficult to

tell

whether

defendant

convicted after a trial in which he

was ineffectively represented

would have fared better if his

lawyer had been competent.

Seemingly impregnable cases can

sometimes be dismantled by good

defense counsel. On the basis of

a cold record, it may be

impossible for a reviewing court

ascertain

how

the

government’s

evidence

and

arguments would have stood up

against rebuttal and crossexamination by a shrewd, wellprepared lawyer.

Strickland, 466 U.S. at 710 (Marshall, J., dissenting).

presentation of any affirmative case, it may be

difficult or impossible for a court to make a

determination about the result of an entire lost

proceeding, the contents of which may forever remain

unknown. The outcome-based test for prejudice is far

more workable where a court is tasked with limited,

discrete decisions about how singular witnesses or

individual pieces of evidence would be received by the

fact finder, such as in Strickland where the Court

examined how mitigation evidence would have

affected a sentencing. Whereas here, the Court must

assess a slew of hypothetical witnesses, evidence, and

argument from a defendant’s foregone case-in-chief.

As such, it must delve into an alternate universe

where that defense was presented and project how

these various witnesses, including experts, and pieces

of evidence would have affected the trial. The

innumerable variables render such an exercise

unworkable.

Additionally, the use of the process-based test

for prejudice applies where a defendant forfeited a

fundamental right and, despite counsel’s error, a fair

trial nonetheless occurs. Lafler, 566 U.S. at 164-65.

Lafler confirmed that the process-based analysis is

appropriate where a defendant lost the ability to

exercise a constitutional right she otherwise would

have invoked even in the context of a trial. Id. at 17273.

On multiple occasions, this Court has affirmed

the use of the process-based test for prejudice where it

would be unduly difficult or unfair to require the

defendant to demonstrate the outcome of a proceeding

that did not occur. See Garza, 586 U.S. at 240

(defendant only needed to show he would have

exercised the right to take an appeal without any

further showing of his claim’s merit); Lee, 582 U.S. at

366-67 (defendant made adequate showing of

prejudice by demonstrating that he would have

rejected his plea if counsel had properly informed him

of the consequences despite the fact that he had no

viable defense at trial).

The Panel notably did not analyze whether Ms.

Ellison lost an entire proceeding when her counsel

erroneous informed her that if she herself did not

testify, she could not present any witnesses or

evidence in her defense. Instead, it summarily

assumed that when counsel’s error occurred within

the context of a trial, it was a strategic decision akin

to making the decision not to testify rather than

looking to whether the effect of the decision was to,

essentially, forgo a proceeding to which the Hill

inquiry applies. Ms. Ellison did not “opt[] not to

present a defense” as the Panel characterized, but,

rather, based upon counsel’s misrepresentations, Ms.

Ellison understood that she faced a Hobson’s choice -waive her Fifth Amendment right against selfincrimination and testify or present no affirmative

case at all.

B. The Process-Based Test For Prejudice

Applies To Any Circumstance Where, As

Here, A Defendant Loses A Proceeding.

The process-based test for prejudice applies to

ineffective assistance of counsel claims where

counsel’s ineffectiveness resulted in a deprivation of a

proceeding. Flores-Ortega, 528 U.S. at 483; see also

Velazquez, 937 F.3d at 163. In that circumstance, the

defendant need not show that “the decision to undergo

the process would have resulted in a more favorable

outcome.” Id. Instead, they need only demonstrate a

reasonable probability that, but-for counsel’s error,

the defendant would have chosen to exercise the right

or take advantage of the opportunity of which they

were deprived. See, e.g., Flores-Ortega, 528 U.S. at

481-82; Garza, 586 U.S. at 244-45. The appellate

courts have interpreted Flores-Ortega and Garza

similarly. See Velazquez, 937 F.3d at 163 (citing

Garza, 586 U.S. at 242-244); Honie v. Powell, 58 F.4th

1173, 1203 (10th Cir. 2023) (“[W]hen a defendant

claims ineffective assistance arising out of the waiver

of a fundamental right that only the defendant can

personally waive, the proper prejudice inquiry is

whether the defendant can demonstrate a reasonable

probability that, but for counsel’s ineffectiveness, they

would have opted to exercise that right.”) (citing

Flores-Ortega, 566 U.S. at 169-70) (Lucero, J.,

dissenting).

1. Ms. Ellison’s deprivation of her case-inchief is akin to the deprivation of an

entire proceeding.

The right to present a complete defense is a

fundamental Constitutional right. Crane v. Kentucky,

476 U.S. 683, 690 (1986) (“Whether rooted directly in

the Due Process Clause of the Fourteenth Amendment

[] or in the Compulsory Process or Confrontation

clauses of the Sixth Amendment [], the Constitution

guarantees criminal defendants “a meaningful

opportunity to present a complete defense.”) (citations

omitted).

While trial management may be the

province of defense counsel, it is the defendant who

holds the ultimate right to make fundamental

decisions in her case, including, inter alia, “whether to

plead guilty, waive a jury, testify in his or her own

behalf, or take an appeal.” Jones v. Barnes, 463 U.S.

745, 751 (1983); see also ABA Model Rule of

Professional Conduct 1.4.

Like the decision to plead guilty, file an appeal,

and waive a jury trial, the decision whether to present

a defense rested solely with Ms. Ellison. Jones, 463

U.S. at 751; see also United States v. Rahm, 993 F.2d

1405, 1414 (9th Cir. 1993) (“The rule the government

suggests would eviscerate several constitutional

rights. Rahm, like all criminal defendants, had the

right not to testify. By choosing not to testify, she did

not forfeit her right to present a defense or introduce

testimony.”).

The Panel determined that matters that

happen within the confines of the trial itself do not

constitute the denial of a proceeding. But, such a

standard fails recognize the large continuum between

discrete trial decisions, such as whether to present a

witness or submit a piece of evidence (which may be

considered strategic decisions), and broader

situations, such as the one presented here, that

constitute a deprivation of an entire proceeding. If, for

example, after the Government had presented their

case-in-chief, the court told Ms. Ellison that she was

unable to present any evidence in her defense, it

seems clear that Ms. Ellison would have been

deprived of a proceeding. Moreover, it cannot be said

that Ms. Ellison chose not to present a defense or

decided that she should not present a defense. Ms.

Ellison was told that if she did not herself testify, she

could not present a defense at all.

Applying the process-based test for prejudice in

circumstances where a defendant lost their right to

present any defense whatsoever furthers the rights

identified in Strickland and Hill. While it may be

possible for a Court to weigh the effect one defendant’s

testimony or weigh the effect that a few witnesses

would have on the outcome of the proceeding,

hypothetically projecting the effect an entire case-inchief may have on the jury is a difficult and

speculative task. This is especially true here where

Ms. Ellison’s case-in-chief would have spanned a

dozen witnesses prepared to testify in her defense,

expert testimony, and 56 boxes of exculpatory

evidence that were not introduced. The record

demonstrates that, at a minimum, Ms. Ellison had

prepared an expert to rebut the government’s

testimony as to the amount of funds allegedly

fraudulently transferred, which could have had a

significant impact on the amount of restitution Ms.

Ellison owes. The potential effect that an entire casein-chief may have had on the jury is almost impossible

to determine.

Recently, this Court expressed the inequity in

requiring a defendant who was deprived of a

proceeding to demonstrate the prospective merits of

the proceeding that never took place. In Garza, this

Court considered the loss of the right to appeal and

noted that “when deficient counsel causes the loss of

an entire proceeding, [the court] should not bend the

presumption of prejudice rule simply because a

particular defendant seems to have had poor

prospects.” Garza, 586 U.S. at 242-43 . In Lee, this

Court applied a similar inquiry to the decision to

accept a plea notwithstanding the lack of a viable

defense at trial. Lee, 582 U.S. at 365. Petitioner freely

recognizes that along the journey from individual trial

decision to waiver of proceeding there exist numerous

weigh stations.

However, as this Court has

recognized, when proceedings are forfeited, the

Strickland test becomes Constitutionally speculative

and unwieldy. Petitioner felt compelled to present no

affirmative defense much in the way this Court has

previously held the acceptance of a plea or a waiver of

appeal deprives the defendant of guaranteed process.

Just as requiring a trial court to project the outcome

of a trial or appeal foregone fails to fully protect the

Fifth and Sixth Amendment interests at stake, so too

does a rule that any decision made “in the trial

proceeding,” no matter how great the magnitude of the

matter relinquished, requires trial court projection of

a case never tried.2

2. The Panel’s holding that the processbased test for prejudice only applies

outside the context of a trial or triallike proceeding is contrary to this

Court’s precedent.

Contrary to the Panel’s decision that this test

only applies outside of the context of a trial or trial

like proceeding, this Court has applied the processbased test for prejudice within the context of a trial.

2 The Panel summarily stated that Ms. Ellison did not lose an

entire proceeding because “waiving the right to testify or call

witnesses is not tantamount to forfeiture of an entire

proceeding[.]” App. 14a. However, Ms. Ellison waived both her

right to testify and the right to present any evidence in her

defense. This waiver occurred because counsel erroneously

advised her that if she invoked her Fifth Amendment rights, she

could not present any evidence or witnesses in her defense

whatsoever leading to the loss of her case in chief. While Ms.

Ellison’s case may represent the ceiling for applying processbased test for prejudice, the facts of her case demonstrate that a

proceeding was, in fact, lost.

See Lafler, 566 U.S. 164-65. In Lafler, counsel’s

erroneous advice led the defendant to forego his option

to accept a plea deal and proceed to trial. Id. at 160.

Despite the fact that a trial occurred, the Court

applied the process-based test for prejudice and

rejected the idea that the defendant needed to show

that the outcome of the proceeding would have been

different. Id. at 174. In Lafler, this Court directly

rejected the idea that where a trial, in some form,

nonetheless occurs, it wipes clean the taint of

counsel’s ineffectiveness. Id. at 169. Even Strickland

acknowledged that “[t]he benchmark for judging any

claim of ineffectiveness must be whether the counsel’s

conduct so undermined the proper functioning of the

adversarial process that the trial cannot be relied on

as having produced a just result.” 466 U.S. at 686.

Accordingly, the process-based test for prejudice is

applicable even where a trial occurs.

This Court has applied the process-based test

for prejudice numerous times and in a variety of

different factual and procedural circumstances,

rendering the Panel’s assertion that the process-based

test for prejudice only applies outside of a trial or triallike proceeding incorrect. Hill applied the processbased test to pleas, Flores-Ortega applied the processbased test to appeals, and Lafler applied the process

based test to declined plea offers. See Hill, 474 U.S.

at 59-60; Flores-Ortega, 528 U.S. at 468; Lafler, 566

U.S. at 169. Here, as in Lafler, the process-based test

for prejudice should apply even though part of a trial

occurred. As detailed at length above, Ms. Ellison’s

counsel’s ineffectiveness led to the loss of an entire

proceeding—her case-in chief, warranting the

application of the process-based test for prejudice.

C. The Process-Based Test For Prejudice Sets

Forth A Third Test For Prejudice That Is

Consistent With Strickland And Does Not

Require A Per-Se Finding Of Prejudice.

In its Opinion, the Panel improperly compares the

process-based test to prejudice to a structural error.

App. 11a. (“Like Ellison, the Petitioner in Palmer

insisted that he was not required to show prejudice to

prevail on his claim because depriving him of the right

to testify is a ‘structural defect in the entire trial

process that requires automatic reversal[.]’”).

However, this comparison is incorrect.

On one hand, structural errors are errors that

“affect the framework within the trial proceeds, rather

than being simply an error in the trial process itself.”

Weaver v. Massachusetts, 582 U.S. 286, 295

(2017)(citing Arizona v. Fulminate, 499 U.S. 279, 310

(1991)(internal quotations omitted). In the few cases

where a structural error is found, prejudice is

irrebuttably presumed. Id. at 295-96. On the other

hand, Hill, Flores-Ortega, Lafler, and their progeny

apply an analysis that is materially different than the

structural error test. That inquiry asks whether butfor counsel’s error, the client would have elected to

exercise her right to the proceeding of which she was

denied. Hill, 474 U.S. at 59; Flores-Ortega, 528 U.S. at

483-85; Lafler, 566 U.S. at 164. A defendant that has

lost the right to a proceeding is not granted a per se

finding of prejudice as a defendant asserting a

structural error may be.

In fact, Flores-Ortega, this Court expressly

overturned the lower court’s per se finding of prejudice

and, instead, further developed the rule from Hill that

where a defendant is deprived of an entire proceeding,

the test for prejudice examines the process leading to

the deprivation instead of the hypothetical outcome of

the proceeding. Flores-Ortega, 528 U.S. at 483-85.

Indeed, Flores-Ortega specifically notes that its

holding is consistent with Hill. Id. at 485. Notably in

Flores-Ortega, this Court identified a level of proof

necessary

demonstrate

Constitutional

violation. Rejecting a presumed prejudice standard

for the loss of a proceeding in that instance, the Court

required that the petitioner demonstrate at an

evidentiary hearing that he would have appealed his

conviction had he been properly advised by his

counsel. Id. at 483-85. Notably, the inquiry upon

remand was not whether the petitioner would have

prevailed on his appeal, i.e. would proper legal

representation had made an ultimate difference in the

outcome. Id. at 485-86. Rather, the inquiry was

whether the petitioner would have availed himself of

the process potentially foregone as a result of counsel’s

defective advice. Id. Likening the process-based test

for prejudice to the per se finding of prejudice found

when counsel’s ineffectiveness leads to a structural

error is an improper application of this Court’s

precedent.

II.

This Case Presents An Appropriate

Vehicle For Resolving An Important

Question Of Federal Law And Settling

Confusion In The Circuits.

Based on this Court’s precedent, prior to its

opinion in this case, the Third Circuit clarified the

application of the process-based test for prejudice by

stating:

The combined effect of

Vickers, Lee, and Garza is

that petitioners alleging

ineffective assistance of

counsel resulting in a

deprivation of process need

not show that the decision

to undergo the process

would have resulted in a

more favorable outcome.

Instead, they need only

demonstrate a reasonable

probability that, but-for

counsel’s error(s), they

would have made the

decision—that is chosen to

exercise the right or take

advantage

the

opportunity of which they

were deprived.

Velazquez, 937 F.3d at 163; Vickers, 858 F.3d at 857.

After the Third Circuit’s clarification of the processbased test for prejudice, other Circuits began to

examine the test set forth in Vickers and Velazquez.

See, e.g., Honie, 58 F.4th at 1203 (“[W]hen a defendant

claims ineffective assistance arising out of the waiver

of a fundamental right that only the defendant can

personally waive, the proper prejudice inquiry is

whether the defendant can demonstrate a reasonable

probability that, but for counsel’s ineffectiveness, they

would have opted to exercise that right.”) (citing

Vickers, 858 F.3d at 856) (Lucero, J., dissenting), cert

denied, 144 S. Ct. 504 (2023).

In Honie, the defendant seeking habeas relief

where counsel’s purported error lead to a waiver of a

jury sentencing. Id. at 1185. The Tenth Circuit did

not reach the ultimate issue of whether the processbased test for prejudice applied to waivers of jury

sentencing. Id. at 1194. Because the defendant’s

petition for habeas corpus derived from a state court

conviction, the defendant was required to

demonstrate that “clearly established law” applied to

the defendant’s claim under the principles of the

Antiterrorism and Effective Death Penalty Act of 1996

(“AEDPA”). Id. at 1193. The Tenth Circuit did not

determine whether the process-based test for

prejudice applied to the defendant’s claim because

application of the process-based test for prejudice was

not clearly established law. Id. at 1198. The dissent

went on to argue that Hill, Flores-Ortega, and Lafler

provided an avenue for extending application of the

process-based test for prejudice into waivers of jury

sentencing. Id. at 1203. The courts would benefit

from a clearly defined rule from this Court, which

would avoid further misapplication of Hill and its

progeny and prevent further conflicting case law from

developing therein.

Conclusion

For these reasons, Petitioner respectfully requests

that the Court grant this Petition for Writ of

Certiorari, vacate the judgments of the United States

Court of Appeals for the Third Circuit, and remand for

further consideration.

Respectfully submitted,

THOMAS S. JONES

Counsel of Record

Nelson Mullins Riley & Scarborough LLP

One PPG Place, Suite 3200

Pittsburgh, PA 15222

thomas.jones@nelsonmullins.com

(412) 730-4500

CARA L. BRACK

Nelson Mullins Riley & Scarborough LLP

One PPG Place, Suite 3200

Pittsburgh, PA 15222

MARCH 24, 2025

APPENDIX

TABLE OF APPENDICES

Page

APPENDIX A — OPINION OF THE UNITED

STAT ES COU RT OF A PPEA LS FOR

T H E T H I R D CI R C U I T, F I L ED

OCTOBER 30, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1a

APPENDIX B — ORDER OF THE UNITED

STAT ES COU RT OF A PPEA LS FOR

T H E T H I R D CI R C U I T, F I L ED

NOVEMBER 3, 2022 . . . . . . . . . . . . . . . . . . . . . . . . .16a

APPENDIX C — OPINION OF THE UNITED

S TAT E S DI S T R IC T C OU RT FOR

T H E DI S T R IC T OF N E W J ER S E Y,

FILED JUNE 7, 2022 . . . . . . . . . . . . . . . . . . . . . . . . 19a

A P P E N DI X D — O R D E R D E N Y I N G

REHEARING OF THE UNITED STATES

COURT OF APPEALS FOR THE THIRD

CIRCUIT, FILED DECEMBER 23, 2024 . . . . . . 69a

A P P EN DI X E — C ON S T I T U T IONA L

PROVISIONS AND STATUTE INVOLVED . . . . 71a

Appendix

APPENDIX A — OPINION

OF THE

UNITED STATES

COURT OF APPEALS FOR THE THIRD CIRCUIT,

FILED OCTOBER 30, 2024

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 22-2169

KAY ELLISON,

Appellant ,

UNITED STATES OF AMERICA

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil No. 2-21-cv-16230)

District Judge: Honorable Susan D. Wigenton

Argued: May 7, 2024

Before: MATEY, MONTGOMERY-REEVES, and

ROTH, Circuit Judges

(Opinion filed: October 30, 2024)

OPINION OF THE COURT

MATEY, Circuit Judge.

Ineffective assistance of counsel claims under the

rubric created in Strickland v. Washington turn on

Appendix A

prejudice, “a reasonable probability” that, but for the

attorney’s error, “the result of the proceeding would have

been different.” 466 U.S. 668, 694, 104 S. Ct. 2052, 80 L.

Ed. 2d 674 (1984). Kay Ellison argues her convictions for

federal wire fraud, bank fraud, and conspiracy violate the

Sixth Amendment because she relied on her attorney’s

erroneous advice that if she did not testify, she could not

present other evidence. Applying the familiar Strickland

standard, we agree with the District Court that there is no

reasonable probability that this alleged error changed the

jury’s verdict. So we will affirm the denial of her petition

for a writ of habeas corpus.

Ellison, along with co-defendant Judy Tull, founded

and managed a now-defunct charter airline called

Southern Sky Air & Tours operating as Myrtle Beach

Direct Air & Tours (Direct Air). The Department of

Transportation requires charter operators to deposit

passengers’ payments into an approved bank account and

keep the funds escrowed until the flight is completed. 14

C.F.R. Part 380. But Direct Air had cash flow problems.

So Ellison siphoned millions of dollars out of the

escrow account through fictitious “dummy” passenger

reservations and falsified corporate records. When the

scheme was uncovered, the United States charged both

Ellison and Tull with conspiracy to commit wire fraud

and bank fraud in violation of 18 U.S.C. § 1349, wire fraud

in violation of 18 U.S.C. §§ 1343 and 2, and bank fraud in

violation of 18 U.S.C. §§ 1344 and 2.

Appendix A

Ellison and Tull proceeded to a jury trial, and Ellison

opted not to present a defense. Her counsel stated, outside

the presence of the jury, that he had “explained to [Ellison]

the decision to testify or not to testify was hers and hers

alone to make” and that Ellison had decided “not to testify

and not to call witnesses on her behalf.” App. 363. The trial

court then questioned Ellison on the record:

Court: A ll right. A nd have you had the

opportunity to discuss with [counsel], . . . your

right not to testify as well as your right not

to put on a case, as you have no burden in this

matter, the burden rests with the Government

for the entire case[?] Have you had those

discussions with [counsel]?

Ellison: Yes, ma’am.

Court: And understanding, after you’ve had

those discussions with [counsel], has it been

your decision voluntarily to waive your right

to testify in this matter?

Ellison: Yes, ma’am.

App. 364–65 (emphasis added). The jury convicted Ellison

and Tull of all counts. Ellison was sentenced to ninety-four

months’ imprisonment and ordered to pay $19,663,429.50

in restitution. We affirmed her convictions on direct

appeal. See United States v. Ellison, 804 F. App’x 153,

158 (3d Cir. 2020).

Appendix A

Ellison then moved to vacate her sentence, pursuant

to 28 U.S.C. § 2255, claiming her trial counsel incorrectly

advised her that if she declined to testify at trial, she could

not present other witnesses or evidence. Ellison argued

this advice prejudiced her defense by depriving her of the

opportunity to contest key portions of the Government’s

case.1 The District Court denied Ellison’s motion without

an evidentiary hearing and declined to issue a certificate of

appealability. In reaching its decision, the District Court

did not directly address Ellison’s allegation that counsel

erroneously advised her of a contingent link between the

right to testify and the right to present a defense. Rather,

the District Court concluded that, even assuming Ellison

could prove counsel was ineffective, her claim would still

fail because she could not show prejudice. 2 Accepting as

true Ellison’s statements of the nature of the expected

testimony, 3 the District Court focused the prejudice

1. Ellison’s petition described her intended trial testimony,

as well her own “brief summary” of the intended testimony of

her twelve proposed witnesses. App. 129; see also App. 127–33.

2. “Because failure to satisfy either prong defeats an

ineffective assistance claim, and because it is preferable to avoid

passing judgment on counsel’s performance when possible,”

courts often address the prejudice prong first where it disposes

of a petitioner’s claims. United States v. Cross, 308 F.3d 308, 315

(3d Cir. 2002).

3. Although Ellison swore to her own understanding of what

her proposed witnesses “were prepared to testify to” at trial,

App. 129, she did not provide any sworn statements from the

witnesses themselves. But showing Strickland prejudice “may

Appendix A

inquiry on “whether there is a reasonable probability

. . . that if Ellison had testified herself and presented the

testimony of her proposed witnesses, the jury would have

acquitted.” App. 61. And it found no such possibility:

Ellison’s defense, with or without the proposed

witness testimony, was dependent on the

jury concluding . . . that the DOT regulation

permitted (1) charter airlines to sell vouchers

and take membership and luggage fees out

of escrow before passenger flights had been

completed; and (2) to withdraw from the escrow

account without flight by flight accounting of

the funds. The jury rejected this argument and

there is nothing about the proposed defense

testimony that makes it . . . more persuasive in

light of the DOT’s position that voucher sales

were never permitted and withdrawals from

escrow required a flight by flight accounting.

The uncontradicted evidence of Direct Air’s

continuous losses and high fuel bills makes

it unlikely the jury would believe the escrow

shortage was caused solely by undiscovered

computer errors and that there was no intent

not be based on mere speculation about what the witnesses . . .

might have said.” United States v. Gray, 878 F.2d 702, 712 (3d

Cir. 1989). Rather, “[u]nder usual circumstances,” we expect that

“information [obtainable through an adequate investigation] would

be presented to the habeas court through the information of the

potential witnesses.” Duncan v. Morton, 256 F.3d 189, 202 (3d

Cir. 2001) (alteration in original) (quoting Gray, 878 F.2d at 712).

Ellison made no such presentation.

Appendix A

to deceive the banks. Evidence of Ellison’s

involvement in running Direct Air makes it

unlikely the jury would conclude she was not

involved in the inflation of the year-end financial

statements.

App. 81.

A motions panel of this Court then granted Ellison

a certificate of appealability as to whether the District

Court should have addressed Ellison’s “assertion that

her counsel advised her that the right to testify was

linked to the right to present a defense.”4 App. 83. The

4. The motions panel denied a certificate of appealability for

all other claims, including whether Ellison demonstrated prejudice

under the outcome-based standard applied by the District Court.

But the panel also referred “[t]he question of whether a certificate

of appealability is required to challenge the District Court’s denial

of an evidentiary hearing.” App. 84.

We agree with both Ellison and the Government that the

certificate of appealability statute applies only to “final order[s]”

in § 2255 proceedings, see 28 U.S.C. § 2253(c)(1)(B), and does not

explicitly cover interlocutory orders, such as the denial of a request

for an evidentiary hearing. See Harbison v. Bell, 556 U.S. 180, 183,

129 S. Ct. 1481, 173 L. Ed. 2d 347 (2009) (explaining that § 2253(c)

(1) refers to orders that “dispose of the merits” of the proceeding).

But that conclusion does not affect our jurisdiction. An order

denying an evidentiary hearing on an ineffective-assistance

claim is not independently appealable under the collateral order

doctrine. See In re Grand Jury, 705 F.3d 133, 144–45 (3d Cir.

2012) (noting that to be immediately appealable, an interlocutory

order must be “effectively unreviewable on appeal from the final

judgment in the underlying action”) (internal quotation marks

Appendix A

order directed the parties to address “whether Ellison’s

ineffectiveness claim should be analyzed using the

standard for prejudice set forth in Palmer v. Hendricks,

592 F.3d 386, 397–99 (3d Cir. 2010), or whether the analysis

in Vickers v. Superintendent Graterford SCI, 858 F.3d

841, 857 (3d Cir. 2017), requires [this Court] to revisit that

standard.” App. 84. 5

II.

Strickland announced the now-familiar test for claims

of ineffective assistance. First, “the defendant must show

that counsel’s performance was deficient.” 466 U.S. at

687.6 Second, “the defendant must show that the deficient

performance prejudiced the defense.” Id.

“[P]rejudice is defined in different ways depending on

the context in which it appears.” Weaver v. Massachusetts,

omitted). Rather, under the merger rule, that order would “merge

into the final judgment” denying the § 2255 motion itself, and then

“may be challenged on appeal from that judgment.” In re Diet

Drugs Prods. Liab. Litig., 418 F.3d 372, 377 (3d Cir. 2005). That

is what happened here.

5. The District Court exercised jurisdiction under 18 U.S.C.

§ 3231 and 28 U.S.C. § 2255. We have jurisdiction under 28 U.S.C.

§§ 1291, 2253(c)(1)(B), and 2255(d). On the denial of a § 2255 motion,

we “review legal conclusions de novo and factual findings for clear

error.” United States v. Folk, 954 F.3d 597, 601 (3d Cir. 2020).

6. The District Court assumed that Ellison’s attorney was

ineffective, and we do the same. See App. 61; Cross, 308 F.3d at 315.

Appendix A

582 U.S. 286, 300, 137 S. Ct. 1899, 198 L. Ed. 2d 420

(2017). When an attorney’s error occurs during trial

or another legal proceeding that is “sufficiently like a

trial in its adversarial format and in the existence of

standards for decision,” 7 “[t]he defendant must show that

there is a reasonable probability8 that, but for counsel’s

unprofessional errors, the result of the proceeding would

have been different.” Strickland, 466 at 686–87, 694. In

these cases, the prejudice analysis is conceptually clear-cut

because we generally presume that trials and “trial-like”

proceedings are reliable, aside from the alleged error.

Id. at 695 (“The assessment of prejudice should proceed

on the assumption that the decisionmaker is reasonably,

conscientiously, and impartially applying the standards

that govern the decision.”). So to evaluate prejudice, we

look at the “result of the proceeding” and consider the

likelihood that, absent the ineffective assistance, that

result “would have been different.” Id. at 693, 694.

But where counsel’s misstep occurs outside trial or

a “trial-like” context, Strickland’s prejudice prong is

less intuitive. As a result, the Supreme Court has, at

7. See Strickland, 466 U.S. at 686-87 (analogizing capital

sentencing to trial).

8. A “reasonable probability” means “a probability sufficient

to undermine confidence in the outcome.” Strickland, 466 U.S.

at 694. That requires a “substantial,” not just a “conceivable,”

likelihood of a different result. Harrington v. Richter, 562 U.S.

86, 112, 131 S. Ct. 770, 178 L. Ed. 2d 624 (2011).

Appendix A

times, retrofitted the test for claims arising from other

stages of the adjudicative process. For example, Hill v.

Lockhart—decided one year after Strickland—involved

an ineffective-assistance claim arising from a guilty plea.

474 U.S. 52, 53, 106 S. Ct. 366, 88 L. Ed. 2d 203 (1985).

There, counsel allegedly misadvised the defendant about

the length of his statutorily required parole term, and the

defendant claimed that made his guilty plea involuntary

and unintelligent. Id. at 55–56. The Court made clear that

the “two-part Strickland . . . test applies to challenges to

guilty pleas based on ineffective assistance of counsel.”

Id. at 58. But on the prejudice prong, it did not conduct

a Strickland “outcome-based” analysis—i.e., asking

whether the defendant would have still been convicted

had he proceeded to trial rather than pleading guilty.

Instead, the Court adopted a “process-based” standard,

under which the defendant could demonstrate prejudice

merely by showing that, “but for counsel’s errors, he would

not have pleaded guilty and would have insisted on going

to trial.” Id. at 59.

Over several decades, the Court has only applied Hill’s

process-based standard for prejudice to a narrow class of

ineffectiveness claims, including where counsel deficiently

advised the defendant to reject a plea deal, see Lafler v.

Cooper, 566 U.S. 156, 163–64, 132 S. Ct. 1376, 182 L. Ed.

2d 398 (2012), or counsel failed to file a notice of appeal,

see Roe v. Flores-Ortega, 528 U.S. 470, 484, 120 S. Ct.

1029, 145 L. Ed. 2d 985 (2000). In those cases, the Court

explained that the defendant must instead show

a reasonable probability that the plea offer

would have been presented to the court (i.e.,

10a

Appendix A

that the defendant would have accepted the plea

and the prosecution would not have withdrawn

it in light of intervening circumstances), that

the court would have accepted its terms, and

that the conviction or sentence, or both, under

the offer’s terms would have been less severe

than under the judgment and sentence that in

fact were imposed

Lafler, 566 U.S. at 164, or “a reasonable probability that,

but for counsel’s deficient failure to consult with him about

an appeal, he would have timely appealed,” Flores-Ortega,

528 U.S. at 484. In these cases, the Supreme Court has

presumed prejudice, “with no further showing from the

defendant o[n] the merits of [the] underlying claim[],”

where the ineffective assistance “rendered the proceeding

presumptively unreliable or entirely nonexistent.” FloresOrtega, 528 U.S. at 484; see also Lafler, 566 U.S. at 168–89.

III.

Ellison argues that Strickland’s outcome-based

prejudice test is irrelevant because her counsel’s

ineffective assistance deprived her of both her right to

testify and her right to present a defense,9 and thus the

process-based prejudice test should apply. We disagree,

and our decisions in Palmer and Vickers explain why.

9. A right the Supreme Court announced in Rock v. Arkansas,

483 U.S. 44, 51–53, 107 S. Ct. 2704, 97 L. Ed. 2d 37 (1987).

11a

Appendix A

As here, Palmer involved counsel allegedly failing

to advise that the defendant alone could decide whether

to testify. 592 F.3d at 394. The petitioner later claimed

that, had he been properly advised, he would have told

the jury “[his] side of what really happened.” Id. at 390.

But he did not offer any details on his proposed testimony,

let alone any factual analysis of how his testimony would

have swayed the jury. See id. at 395. Like Ellison, the

petitioner in Palmer insisted that he was not required to

show prejudice to prevail on his claim because depriving

him of the right to testify is a “structural defect in the

entire trial process that requires automatic reversal[.]”

Id. at 396–97 (internal quotation marks omitted). But we

rejected that argument, see id. at 397–99,10 and concluded

10. A conclusion shared by every other circuit court to

consider the issue, see Palmer, 592 F.3d at 397–98 (collecting

cases), and still consistent with more recent decisions, see, e.g.,

Hartsfield v. Dorethy, 949 F.3d 307, 312–16 (7th Cir. 2020) (finding

it “not reasonably probable that [the petitioner’s] proposed

testimony would have affected the jury’s verdict” and noting “the

unanimous weight of authority” rejecting the contention that a

defendant “need not show prejudice when the case involves the

right to testify”); Smith v. Dickhaut, 836 F.3d 97, 106 (1st Cir.

2016) (finding no prejudice in a right-to-testify claim because

petitioner failed to show “that, had he testified, there is a

reasonable probability that the outcome of his trial would have

been different”).

We have continued to demand prejudice in right-to-testify

cases since Palmer. See, e.g., Ruiz v. Superintendent Huntingdon

SCI, 672 F. App’x 207, 212 (3d Cir. 2016) (finding “no reasonable

probability that the outcome would have been different had [the

petitioner] testified at his trial” because his “proposed testimony

12a

Appendix A

there could be no prejudice under Strickland because the

petitioner did not show “‘that the decision reached’” at his

trial “‘would reasonably likely have been different absent

the errors,’” id. at 395–96 (quoting Strickland, 466 U.S.

at 696).

Our decision in Vickers does not change the application

of the Strickland prejudice standard to the case before us.

There, the petitioner claimed ineffective assistance based

on counsel’s advice to forgo his right to a jury trial and

choose a bench trial instead. Vickers, 858 F.3d at 844–46.

Following Strickland, our precedent at the time required

showing that a jury trial would have resulted in a more

favorable outcome than the bench trial. See United States

v. Lilly, 536 F.3d 190, 196–97 (3d Cir. 2008). But Vickers

reasoned that later Supreme Court decisions like Lafler

require applying the process-based test for prejudice, not

the traditional outcome-based prejudice inquiry. 858 F.3d

at 857.11 Accordingly, the question became “whether the

defendant can demonstrate a reasonable probability that,

but for counsel’s ineffectiveness, he would have opted to

exercise [the] right [at issue].” Id.

would not have changed an objective factfinder’s view of all of the

evidence”); United States v. Aldea, 450 F. App’x 151, 153 (3d Cir.

2011) (finding no prejudice because the petitioner’s testimony

“would not have undermined the verdict”). And we reaffirmed

this aspect of Palmer just over two years ago. See Lesko v. Sec’y

Pa. Dep’t of Corr., 34 F.4th 211, 236–37 (3d Cir. 2022).

11. We reasoned that our “holding regarding the appropriate

prejudice inquiry in this context” merely “align[ed] Lilly with the

Supreme Court’s subsequent decision in Lafler,” and thus “d[id]

not necessitate en banc review.” Vickers, 858 F.3d at 857 n.15.

13a

Appendix A

IV.

The Palmer outcome-based prejudice standard, not

the Vickers process-based prejudice standard, controls

here. This is because showing “actual prejudice” is

required where the alleged error occurs within a judicial

proceeding that is otherwise “presumptively reliable.”

Flores-Ortega, 528 U.S. at 484. That must include rightto-testify claims like Ellison’s, because the error in

those cases (i.e., failing to present testimony from the

defendant or other defense witnesses) occurs “‘during the

presentation of the case to the jury’ and ‘may therefore be

quantitatively assessed in the context of other evidence

presented in order to determine’” what effect, if any, it

had on the jury’s verdict. Palmer, 592 F.3d at 397 (quoting

Arizona v. Fulminante, 499 U.S. 279, 307–08, 111 S. Ct.

1246, 113 L. Ed. 2d 302 (1991)). The prejudicial effect will

necessarily depend on the significance of the facts to which

the defendant and her witnesses might have testified,

evaluated alongside the rest of the evidence produced

at trial. Id. at 399. So, following Palmer, Ellison needed

to show a reasonable probability that, but for counsel’s

errors, she would have exercised her trial rights, and

that doing so would have changed the result. That is the

analysis the District Court correctly conducted.12

12. In so observing, we are mindful of the confines of the

certificate of appealability, limited to whether the District Court

applied the correct legal standard for prejudice under Strickland.

Because we hold that it did, we “will not consider” arguments

challenging the District Court’s conclusion after applying that

14a

Appendix A

The cases Ellison relies on are distinguishable

because they involved the forfeiture of entire proceedings

to which the defendant was entitled—a trial rather than a

plea (Hill), an appeal (Flores-Ortega), a plea rather than

a trial (Lafler), and a jury trial instead of a bench trial

(Vickers). But that did not happen here. Waiving the right

to testify or call witnesses is not tantamount to forfeiture

of the entire proceeding, nor does it render the trial per

se “fundamentally unfair.”13 Strickland, 466 U.S. at 700;

cf. Vickers, 858 F.3d at 857. Rather, “when a defendant

states, ‘I would have testified to X, Y, and Z, but my

attorney would not put me on the stand,’ the significance

of such testimony can be evaluated in the context of the

remainder of the evidence in order to assess the impact of

the constitutional violation.” Palmer, 592 F.3d at 399. We

conclude from this that Palmer’s outcome-based prejudice

standard, as they are “not within the scope of the issue on which

we granted a certificate of appealability.” Miller v. Dragovich,

311 F.3d 574, 577 (3d Cir. 2002).

13. Of course, “[t]here are good tactical reasons why it may

not be best for the defendant to testify in some circumstances.”

United States v. Teague, 953 F.2d 1525, 1533 n.9 (11th Cir. 1992).

“Some examples might be if the defendant might provide evidence

of missing elements of the crime on cross-examination, if the

defendant might be prejudiced by revelation of prior convictions,

or if the prosecutor might impeach the defendant using a prior

inconsistent statement.” Id. It would thus misstate both law and

common practice to suggest that waiving the right to testify or

call witnesses “so undermine[s] the proper functioning of the

adversarial process that,” in general “the trial cannot be relied

on as having produced a just result.” Strickland, 466 U.S. at 686.

15a

Appendix A

standard is the appropriate one in Ellison’s ineffectiveassistance case.

* * *

“A n er ror by counsel, even i f professionally

unreasonable, does not warrant setting aside the judgment

of a criminal proceeding if the error had no effect on the

judgment.” Strickland, 466 U.S. at 691. Because Ellison

failed to demonstrate that her attorney’s alleged error

affected the jury’s verdict, we will affirm the District

Court’s denial of her petition for a writ of habeas corpus.

16a

Appendix

B UNITED STATES

APPENDIX B — ORDER

OF THE

COURT OF APPEALS FOR THE THIRD CIRCUIT,

FILED NOVEMBER 3, 2022

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

C.A. No. 22-2169

KAY ELLISON,

Appellant

UNITED STATES OF AMERICA

(D.N.J. Civ. No. 2-21-cv-16230)

Present: AMBRO, KRAUSE, and PORTER, Circuit

Judges

Submitted is Appellant’s application for a

certificate of appealability under 28 U.S.C.

§ 2253(c)(1), which includes a request for an

evidentiary hearing in the above-captioned

case.

Respectfully,

Clerk

17a

Appendix B

ORDER

The foregoing request for a certificate of appealability

is granted in part, referred to the merits panel in part,

and denied in part. Appellant filed a motion to vacate her

conviction and sentence under 28 U.S.C. § 2255, in which

she claimed that she received ineffective assistance of

counsel with regard to her rights to testify and to present

a defense. In denying her claims, the District Court did not

address Appellant’s assertion that her counsel advised her

that the right to testify was linked to the right to present a

defense. See ECF No. 1-1 at 4-5. Because jurists of reason

would debate the District Court’s treatment of this claim,

we grant her request for a certificate of appealability

on this claim. The question of whether a certificate of

appealability is required to challenge the District Court’s

denial of an evidentiary hearing is referred to the merits

panel.

A briefing schedule shall be issued. In addition to any

other arguments the parties wish to raise in their briefs,

they should address (1) whether Ellison’s ineffectiveness

claim should be analyzed using the standard for prejudice

set forth in Palmer v. Hendricks, 592 F.3d 386, 39799 (3d Cir. 2010), or whether the analysis in Vickers v.

Superintendent Graterford SCI, 858 F.3d 841, 857 (3d

Cir. 2017), requires us to revisit that standard; and (2)

whether a certificate of appealability (COA) is required

to appeal from the denial of an evidentiary hearing. See

United States v. Scripps, 961 F.3d 626, 630 (3d Cir. 2020)

(requiring, without discussion, a COA to challenge denial

of an evidentiary hearing); Roundtree v. United States,

18a

Appendix B

751 F.3d 923, 924 (8th Cir. 2014) (same); United States

v. Gonzalez, 596 F.3d 1228, 1244 (10th Cir. 2010) (same);

but see Norman v. Stephens, 817 F.3d 226, 234 (5th Cir.

2016) (holding COA is not required to appeal denial of

evidentiary hearing); cf. Harbison v. Bell, 556 U.S. 180,

182-83 (2009) (holding COA not required to challenge

denial of counsel’s post-judgment motion to expand the

scope of representation to a non-habeas proceeding).

With respect to the other claims Appellant raised in

her § 2255 motion, we deny her application for a certificate

of appealability. See 28 U.S.C. § 2253(c)(2); Slack v.

McDaniel, 529 U.S. 474, 484 (2000). Reasonable jurists

would not debate the District Court’s decision to deny

those claims on the merits. See Miller-El v. Cockrell,

537 U.S. 322, 335 (2003). In particular, Appellant has not

shown that she was arguably prejudiced by her counsel’s

performance, such that, had he presented her proposed

testimony and that of the defense witnesses, “the result of

the proceeding would have been different.” See Strickland

v. Washington, 466 U.S. 668, 687 (1984). Appellant’s

request for an evidentiary hearing is denied.

By the Court,

s/Thomas L. Ambro

Circuit Judge

Dated: November 3, 2022

19a

Appendix

APPENDIX C — OPINION

OF THE

UNITED STATES

DISTRICT COURT FOR THE DISTRICT OF

NEW JERSEY, FILED JUNE 7, 2022

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

Civil Action No. 21-16230 (SDW)

KAY ELLISON,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

Filed June 7, 2022

WIGENTON, District Judge

OPINION

Presently before the Court is Petitioner Kay Ellison’s

(“Ellison”) amended motion to vacate sentence brought

pursuant to 28 U.S.C. § 2255 and her memorandum in

support thereof, challenging her criminal conviction and

sentence in Criminal Action No. 15-622-2. (Civ. ECF Nos.

4, 5).1 The Government filed an answer to the amended

1. This Court w ill cite to docket entries in this civil

proceeding under § 2255 using “Civ. ECF No(s).” and will cite to

20a

Appendix C

§ 2255 motion (Civ. ECF No. 9), to which Ellison replied

(Civ. ECF No. 10), and requested an evidentiary hearing

(Civ. ECF Nos. 11, 12). For the reasons set forth below, this

Court will deny Ellison’s amended § 2255 motion without

an evidentiary hearing and will deny Ellison a certificate

of appealability.

BACKGROUND

The Superseding Indictment

In December 2016, Ellison and her co-defendant,

Judy Tull (“Tull”), as principle officers of Southern

Sky Air & Tours d/b/a Myrtle Beach Direct Air &

Tours (“Direct Air”), were charged with an eight-count

superseding indictment for their fraudulent scheme

to withdraw escrowed passenger money before those

passengers completed their flights. (Crim. ECF No. 44.)

The Superseding Indictment charged Ellison and Tull,

under Count One, with conspiracy to commit wire fraud

and bank fraud, in violation of 18 U.S.C. §§ 1343, 1344. (Id.

at 1-10.) The Superseding Indictment alleged, in relevant

part, the following background:

a. Southern Sky Air & Tours, d/b /a “Myrtle

Beach Direct Air & Tours” (“Direct Air”), was

a public charter company founded in or about

2006 and headquartered in Myrtle Beach,

South Carolina. In or about 2007, Direct Air

docket entries in Ellison’s related Criminal Action, 15-cr-622-2,

using “Crim. ECF No(s).”

21a

Appendix C

commenced operations as a public charter

operator. A public charter operator books

airline reservations and arranges for charter

flights to be flown by contracted airline carriers.

Direct Air offered charter services in a number

of cities, including Newark, New Jersey.

b. Defendant JUDY TULL co-founded Direct

Air, served as its Chief Executive Officer,

handled Direct Air’s flight operations, and

had frequent communications with Direct

Air’s credit card processors and its corporate

depository bank, “Bank # 1.” [Valley National

Bank].

c. Defendant K AY ELLISON co-founded

Direct Air and served as its Managing Partner.

Defendant ELLISON was involved in Direct

Air’s customer reservations.

d. Robert Keilman (“Keilman”), a co-conspirator

not charged as a defendant herein, co-founded

Direct Air and held the title of Chief Financial

Officer (“CFO”). Keilman’s responsibilities

included, among other things, preparing Direct

Air’s financial statements.

e. Defendant TULL, defendant ELLISON, and

others owned equity shares in Direct Air and

received salaries and bonuses from Direct Air.

22a

Appendix C

f. The U.S. Department of Transportation

(“DOT”) . . . regulated public charter operators

such as Direct Air. . . .

Among other things, DOT regulations required

charter operators to protect passengers

financially either by having the charter

operator post a security or by having the

charter operator keep passenger payments

for future flights in a designated depository

or escrow account with an approved bank.

DOT regulations further protected f lying

passengers by not allowing charter operators

like Direct Air to receive a passenger’s funds

from the depository or escrow account until the

passenger’s flight was completed.

g. Bank # 1 was a regional bank . . . insured

by the Federal Deposit Insurance Corporation,

and was a financial institution under Title 18,

United States Code, Section 20. Bank # 1 was

approved by the DOT to maintain depository

or escrow accounts. Direct Air maintained a

depository account at Bank # 1 (the “Bank #

1 Depository Account”) and caused passenger

payments for future flights to be deposited into

the Bank # 1 Depository Account. Direct Air

and Bank # 1 agreed that these payments for

purchased flights would remain in the Bank # 1

Depository Account and would not be released

to Direct Air until completion of the purchased

flights. Upon completion of purchased flights,

23a

Appendix C

defendant TULL, defendant ELLISON, or a

Direct Air employee, acting at the direction

of either Defendant TULL or defendant

ELLISON, sent either a facsimile or an e-mail

from Direct Air’s office in South Carolina to

Bank #1 in New Jersey requesting payment

from the Bank #1 Depository Account (“Bank

#1 Release Requests”). The Bank # 1 Release

Requests contained information detailing

the purported revenue associated with the

completed flights.

h. “Bank #2” [Merrick Bank] . . . was insured

by the Federal Deposit Insurance Corporation,

and was a financial institution under Title

18, United States Code, Section 20. Bank #2

acquired, cleared, and settled credit and debit

card payments made by certain customers

booking flights through Direct Air. When

Direct Air customers paid for their charter

reservations using certain credit and debit

cards, Bank #2 acquired the funds to cover

the purchases and deposited the funds into the

Bank # 1 Depository Account, where the funds

were supposed to remain until the completion

of the purchased flights. If a customer sought

a refund of a credit or debit card charge, Bank

#2 had to initiate a “chargeback” to recover

the funds from Direct Air.

i. The “Card Processor” [JetPay] was a

credit and debit card processor. . . . The Card

24a

Appendix C

Processor contracted with Direct Air and Bank

#2 to process credit and debit card payments

acquired by Bank #2 and deposited into the

Bank # 1 Depository Account, where the funds

were supposed to remain until the completion

of the purchased flights. The Card Processor,

acting on behalf of Bank #2, also periodically

received and reviewed financial statements that

contained information regarding Direct Air’s

purported financial performance and health,

and transmitted these financial statements to

Bank #2 for additional review. Both the Card

Processor and Bank #2 relied upon these

financial statements.

j. The “Credit Card Company” [American

Express] . . . was a bank holding company, and

was a financial institution under Title 18, United

States Code, Section 20. The Credit Card

Company funded and processed its own credit

card payments. Some Direct Air passengers

paid for future flights on Direct Air using credit

cards issued by the Credit Card Company.

The Credit Card Company deposited funds to

cover the purchases to Direct Air to the Bank

# 1 Depository Account, where the funds

were supposed to remain until the completion

of the purchased flights. If a customer sought

a refund of a credit card charge, the Credit

Card Company had to initiate a chargeback to

recover the funds from Direct Air and credit

them to the customer’s account. The Credit

25a

Appendix C

Card Company also periodically received and

reviewed financial statements that contained

information regarding Direct Air’s purported

financial performance and health. The Credit

Card Company relied upon these financial

statements.

k. Direct Air periodically offered a promotion

called the “Family Ties” program, which

allowed passengers to purchase vouchers

redeemable for future flights. As part of the

program, Direct Air divided a passenger’s

total payment into a “membership fee” and a

separate “ticket price.”

1. Direct Air ceased operations and declared

bankruptcy in or about March 2012. After

Direct Air ceased operations, its flights were

cancelled. By this time, passengers had already

purchased tens of thousands of tickets for

future travel. Pursuant to DOT regulations

and agreements with Bank #2, the Card

Processor, and the Credit Card Company,

money associated with these tickets should

have been held in the Bank # 1 Depository

Account and should have totaled in the tens

of millions of dollars. In reality, however, the

Bank # 1 Depository Account contained only

approximately $1 million at the time Direct

Air ceased operations. As a result, there were

insufficient funds in the Bank # 1 Depository

Account from which to reimburse Direct Air

26a

Appendix C

passengers who had prepaid for flights that

were canceled upon Direct Air’s termination

of operations.

(Crim. ECF No. 44 at 1-5.)

The alleged conspiracy occurred between October

2007 and March 2012, the object of which was for Tull,

Ellison and co-conspirator Keilman to fraudulently

withdraw funds from escrow, held by Valley National Bank

for Direct Air’s customers, and to fraudulently conceal

Direct Air’s true financial condition from Merrick Bank,

JetPay and American Express. (Id. at 6-7.) The alleged

conspiracy was accomplished by:

on various occasions between 2008 through

2010, defendant TULL, defendant ELLISON,

and others:

(a) made a nd d i rect ed ot hers t o ma ke

reser vations for fictitious passengers in

Direct Air’s reservation system in order to

inflate the revenue associated with completed

flights; (b) submitted and directed others to

submit fraudulent Bank #1 Release Requests

to Bank #1 w ith these inf lated revenue

figures; and (c) canceled and directed others

to cancel the fictitious reservations in Direct

Air’s reservation system. Defendant TULL,

defendant ELLISON, and others thereby

fraudulently caused millions of dollars to be

released from the Bank # 1 Depository Account

in the manner described in this paragraph.

27a

Appendix C

...

It was further part of the conspiracy that

defendant TULL, defendant ELLISON,

Keilman, and others became aware of a

shortfall in the Bank # 1 Depository Account

and concealed that shortfall in the Bank #

1 Depository Account by submitting and

causing the submission of fraudulent financial

statements to Direct Air’s creditors and the

creditors’ agents, including Bank #2, the Card

Processor, the Credit Card Company, and

others.

...

It was further part of the conspiracy that, the

conduct of defendant TULL and defendant

ELLISON would and did affect one or more

financial institutions, namely, Bank #1, Bank

#2, and the Credit Card Company, all within

the meaning of Title 18, United States Code,

Sections 20 and 3293, in that these financial

institutions were exposed to a new and

increased risk of loss, and suffered actual

loss, in three ways. First, the defendants’

conduct caused Bank # 1 to release from the

Bank # 1 Depository Account monies which,

at various times, were owned by and in the

custody and control of Bank # 1, Bank #2,

and the Credit Card Company. Second, as a

result of the defendants’ conduct, and after

28a

Appendix C

the shortfall in the Bank # 1 Depository

Account was discovered, Bank # 1, Bank #2,

and the Credit Card Company engaged in civil

litigation and expended monies in fees, costs,

and related expenses defending their respective

interests. Third, as a result of the defendants’

conduct, Bank # 1, Bank #2, and the Credit

Card Company risked harm to their respective

commercial and professional reputations. All

in violation of Title 18, United States Code,

Section 1349.

(Crim. ECF No. 44 at 7-10.)

Counts T wo through Five of the Superseding

Indictment alleged wire fraud in violation of 18 U.S.C.

§ 1343 and Section 2, in connection with four facsimile

transmissions sent to Valley National Bank:

[o]n or about the dates set forth below, in

Passaic County, in the District of New Jersey

and elsewhere, defendants JUDY TULL and

KAY ELLISON and others having knowingly

and intentionally devised and intending to

devise a scheme and artifice to defraud, and

to obtain money and property by means of

materially false and fraudulent pretenses,

representations, and promises, which scheme

and artifice would affect financial institutions,

and for the purpose of executing such scheme

and artifice, knowingly and intentionally

transmitted and caused to be transmitted by

29a

Appendix C

means of wire communications in interstate and

foreign commerce the following writings, signs,

signals, pictures, and sounds, each constituting a

separate count of this Superseding Indictment:

(Id. at 11-12.)

B. Ellison’s Opening Statement at Trial

Ellison and Tull were tried jointly beginning on March

19, 2018, and concluding on March 28, 2018. Ellison was

represented by James B. Lees, Jr, Esq. (“Lees”). When

Lees presented Ellison’s opening statement at trial,

he told the jury that the defendants “had been waiting

years to be here, to come tell their side of the story as

to why the Department of Justice . . . have been sold a

bill of goods by some bitter, bitter people to make these

two women the patsies for a bankruptcy.” (Crim. ECF

No. 98 at 25.) Lees also pointed to evidence that Direct

Air’s CFO, Keilman, became the majority stockholder in

Direct Air in 2009, and this gave him the legal authority

to make all of the decisions for the company. Keilman

was a CPA and a former Vice President of the Bank of

New York. His purpose for investing in Direct Air was to

take the company public and make a lot of money. When

Direct Air went bankrupt, he pled guilty to financial

crimes and blamed Ellison and Tull. (Crim. ECF No. 98

at 30-31, 33-36.)

Lees argued the real story was that Direct Air

sold vouchers, which were transferable certificates to

be used for booking future flights. The vouchers had an

30a

Appendix C

expiration date, and sometimes they expired before being

used. Vouchers were not regulated by Part 380 of the

Code of Federal Regulations because a voucher is not an

airline ticket, it is a transferable certificate that could be

exchanged in the future for a flight. A voucher sale did

not create a passenger; therefore, there was no passenger

money to put in escrow under the regulations. In May 2009,

however, Direct Air, through its counsel, Aaron Goerlich,

agreed to voluntarily put money from voucher sales in

escrow. Direct Air’s policy was to place the portion of the

money from a voucher sale that was allocated for air travel

in the escrow account and make sure it remained in escrow

until a passenger completed a flight using the voucher.

The other portion of a voucher sale was a membership

fee, which provided free luggage transportation and other

land-based benefits. The membership fees did not have to

remain in escrow. The only money withdrawn from the

escrow account by Ellison and Tull were funds derived

from the membership fees on vouchers. Valley National

Bank agreed that these funds could be withdrawn from

escrow. Ellison and Tull meticulously kept track of what

money could and could not come out of escrow.

Direct Air had an annual income over $80 million

and it rented a computer system called Radixx, which

was widely used in the airline industry, although it

was not designed for charter airlines. Direct Air made

unintentional accounting errors, which were discovered by

looking at how the computer system worked. Radixx staff

informed Ellison and Tull that the computer system could

not capture financial transactions made by gate agents,

such as payments for luggage or other fees. Therefore,

31a

Appendix C

Ellison and Tull kept track of these transactions by

hand. Radixx was wrong, however, as the computer

system captured these transactions, and this resulted in

the transactions being counted twice. The total for the

transactions was $7 million.

Ellison and Tull were accused of falsifying sales for

passengers who had completed flights for the purpose of

illegally withdrawing money from escrow. Lees argued

there was a legitimate explanation for the fictitious

flights. When a Direct Air flight was canceled, DOT

regulations required Direct Air to purchase a ticket for

the passenger on another commercial flight, a practice

called passenger protection. By law, according to Lees,

the passenger was no longer a passenger of Direct Air, but

instead a passenger of the airline on which the passenger

was rebooked. Therefore, the money originally paid to

Direct Air could be taken out of escrow. The escrow

bank required only that Direct Air report the number of

“protected passengers” and to simply pick a random flight

to associate with the protected passengers. This made it

look like 600 or 700 passengers were on one flight, but it

was not fraud because the escrow bank understood this

was how protected passenger transactions were reported,

rather than having to report each rebooked passenger on

a particular commercial flight. The money could legally

be withdrawn from the escrow account.

Before the company was sold to Avondale, Direct Air’s

officers began to realize there was a shortage of money in

escrow, but they did not know why the numbers were off.

They disclosed the escrow shortage of $5.4 million and

32a

Appendix C

sold the company to Avondale, which had a plan to make

the company profitable again.

Direct Air kept meticulous records to establish

that every penny withdrawn from escrow was legally

withdrawn under the regulations, but those records were

taken by the bankruptcy trustee after Avondale declared

bankruptcy. After this prosecution began, Direct Air

discovered that 57 of its records were destroyed when

the roof collapsed in the bankruptcy trustees’ storage

facility. These were the documents that would have shown

the calculations made by Direct Air regarding the funds

they could legally withdraw from escrow. (Crim. ECF No.

98 at 25-57).

The trial and appeal

At trial, without referring to Direct Air’s voucher

sales, the Government focused on allegations that Ellison

and Tull sent false or misleading “Release Requests” to

Valley National Bank and withdrew passengers’ funds

before their flights were completed, contrary to their

representations that Direct Air was in compliance with

DOT regulations. The Government rested after a 7-day

jury trial. At that time, Lees confirmed in open court that

he had conferred with Ellison, advised her of her rights,

and that Ellison decided not to testify or to present a

defense. (Crim. ECF No. No. 112 at 13-14, 1270.) Ellison

agreed to Lees representations in a colloquy with this

Court. (Crim. No. ECF No. 113 at 5-6.) Thus, in Ellison’s

closing argument at trial, Lees stated:

33a

Appendix C

And believe me, we do not take lightly the fact

that in consultation with my client, given what

they have presented in this courtroom, we have

chosen to end this and not go forward with the

evidence. And go to you today and say, under

the law, there is no case. There should be an

acquittal, if you follow the law.

That is a trust we have in your ability and your

intellect to apply the law that is going to be

given to you tomorrow morning by your Honor.

(Crim. ECF No. 112 at 82-83.)

On March 28, 2018, the jury convicted Ellison

on all counts. (Crim. No. ECF No. 108.) Ellison was

sentenced on November 28, 2018, to a 94-month term of

imprisonment, 5 years of supervised release, and ordered

to pay $19,663,429.50 in restitution. (Crim. No. ECF No.

139.) An amended judgment was filed in February 2019.

(Crim. No. ECF No. 156.) After briefing on post-trial

motions, this Court denied Ellison’s motion for judgment

of acquittal and for a new trial. (Crim. No. ECF No. 119.)

Upon Ellison’s appeal, her conviction and sentence were

affirmed by the United States Court of Appeals for the

Third Circuit on February 12, 2020. United States v.

Ellison, 804 F. App’x 153 (3rd Cir. 2020). 2

2. On appeal, Ellison and Tull argued, in part, that their

convictions should be overturned for lack of evidence because

the Government did not distinguish between “the improperly

withdrawn monies from those validly taken out of escrow. And

as a result, they conclude, it cannot prove which withdrawals

34a

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II. DISCUSSION

Legal standard

A prisoner in federal custody may file a motion under

28 U.S.C. § 2255 to challenge the validity of his or her

sentence. Section 2255 provides, in relevant part, as

follows:

A prisoner in custody under sentence of a

court established by Act of Congress claiming

the right to be released upon the ground that

the sentence was imposed in violation of the

Constitution or laws of the United States,

or that the court was without jurisdiction to

impose such a sentence, or that the sentence

was in excess of the maximum authorized by

law, or is otherwise subject to collateral attack,

violated DOT regulations.” Ellison, 804 F. App’x at 157. The Third

Circuit held:

[b]ut the elements of all three charged offenses center

on whether there was a scheme to defraud through

false representations. Here, the evidence established

that the escrow release requests hinged on inflated

passenger rosters. It also shows that Defendants

were aware of the growing deficiency in the escrow

account, and they took active steps to conceal Direct

Air’s financial condition. A rational jury could find

that this shows that the escrow requests were part

of a scheme to defraud, as those requests triggered

the improper release of at least some funds. That is

enough for both bank and wire fraud.

Id.

35a

Appendix C

may move the court which imposed the sentence

to vacate, set aside or correct the sentence.

28 U.S.C. § 2255. When determining a pro se § 2255

motion, courts must accept “as true the allegations of

the petitioner, unless they are clearly frivolous.” United

States v. Travillion, 759 F.3d 281, 293, n. 23 (3d Cir. 2014)

(quoting Moore v. United States, 571 F.2d 179, 184 (3d Cir.

1978)). An evidentiary hearing on a motion to vacate is not

required where “the motion and files and records of the

case conclusively show that the prisoner is entitled to no

relief.” United States v. Booth, 432 F.3d 542, 545 (3d Cir.

2005) (quoting R. Governing § 2255 Cases R. 4(b)).

B. Ellison’s a mende d § 2 2 5 5 motion a nd

memorandum of law

Ellison presents the following sole ground for relief

in her amended § 2255 motion:

Mrs. Ellison was deprived of the effective

assistance of counsel in preparation for and

during trial, as a result of counsel’s failures: 1)

to present Mrs. Ellison’s testimony which he

had promised the jury in his opening statement;

and 2) to present the defense witnesses who

had been prepared to testify in Mrs. Ellison’s

defense at her trial.

(Civ. ECF No. 4 at 5; Civ. ECF No. 5 at 6 (capitalization

altered)).

36a

Appendix C

Ellison submitted a declaration in support of her

amended § 2255 motion, wherein she asserts that she

participated in a mock trial to determine the value of

her truthful exculpatory testimony, and the mock jury

acquitted her. (Civ. ECF No. 1-1, ¶ 6.) Therefore, she

alleges that no reasonable attorney would have failed to

present her testimony, which the jury was expecting to

hear after her counsel’s opening statement. (Civ. ECF

No. 5 at 7-8.) She argues that her counsel was likewise

professionally unreasonable by failing to present the

testimony of Ellison’s many exculpatory witnesses because

their testimony would have resulted in a reasonable

probability of acquittal. (Civ. ECF No. 5 at 9.)

Ellison submitted a copy of an October 2017 email

from Lees to herself:

I [] believe [] that we have a decent defense

and that for each allegation being made by the

government I do have a viable position that

argues against criminal activity. Ultimately

however conviction or acquittal at trial will rest

primarily upon your performance when you are

on the witness stand at trial. I do not believe

you can be acquitted at trial without taking the

stand and testifying.

(Civ. ECF No. 5 at 11, citing Ex. 2.)

At the close of the Government’s case at trial, Lees

advised Ellison that the Government had not presented

sufficient evidence to convict, and her testimony would

37a

Appendix C

only lead to jury confusion. (Id. at 11-12.) Ellison claims

that Lees incorrectly told her that if she did not testify,

she would not be allowed to present any of the defense

witnesses. (Id. at 12, n. 8.) Ellison expressed her concern

to Lees about his opening statement “promising the

jury [her] testimony,” but after more than two hours of

discussion, Ellison acquiesced in his advice not to put on

a defense. (Id. at 12, n. 9.) Ellison alleges her counsel’s

advice was motivated by his desire to save himself days

of labor presenting witnesses at trial. (Id. at 14.) Ellison

argues that she was prejudiced by ineffective assistance

of counsel because she was deprived of the opportunity

to contest key facts essential to the Government’s case,

which she and her exculpatory witnesses were prepared

to contest. (Id. at 17-18.)

The Government’s answer

The Government contends that Ellison and her counsel

agreed on a strategy not to put on a defense because they

believed that the Government had not proven its case.

(Civ. ECF No. 9 at 2.) Further, by virtue of her colloquy

with the Court where she represented that it was her

decision not to testify or put on a defense, Ellison waived

her allegation that counsel told her the defense witnesses

could not testify unless she did. (Id. at 2.)

Alternatively, the Government argues that a hearing

is unnecessary because Ellison has failed to show

prejudice. (Id.) The Government submits that the defense

testimony would have been cumulative to the opening

statement, cross-examination and summation, and, if

38a

Appendix C

presented, could have confused the jury. (Civ. ECF No.

9 at 13-14.) Contrary to the email presented by Ellison,

where Lees suggested to her that she would need to testify

if she hoped for an acquittal, the Government notes that

Lees also sent Ellison an email before trial, advising her

of the substantial likelihood that she would be convicted

based on the documentary evidence and co-conspirator

testimony. (Id. at 16-17, citing Ellison’s Ex. 2.) Although

Lees had told the jury in his opening statement that

the defendants were anxious to testify, he explained in

closing argument that he did not put on a case because the

Government failed to meet its burden. (Id. at 17.) Finally,

the Government contends Ellison’s assertion that Lees’

strategy was motivated by his desire to avoid additional

work is frivolous, based on the amount of work he put into

the case. (Id. at 18.)

Ellison’s reply brief

In her reply brief, Ellison contends that she is entitled

to an evidentiary hearing because she has declared

under oath that Lees told her she could not present

defense witnesses if she did not testify herself, and the

Government has not refuted this allegation. (Civ. ECF No.

10 at 2.) Ellison argues that her acquiescence to counsel’s

advice does not speak to the adequacy of the advice. (Civ.

ECF No. 10 at 7.) Thus, she concludes that because she

has made a prima facie showing of ineffective assistance,

her counsel must be called to testify. (Id. at 9-10.)

Ellison submitted a declaration summarizing the

nature of her proposed testimony and that of the defense

39a

Appendix C

witnesses. (Civ. ECF No. 1-1.) Additionally, Ellison seeks

to present the testimony of her exculpatory witnesses

at an evidentiary hearing in order to make a showing

of prejudice. Ellison maintains that defense counsel’s

arguments to the jury cannot replace defense witness

testimony because counsel’s arguments are not evidence.

Therefore, she claims prejudice by counsel’s failure to put

on a defense.

E. Sixth Amendment ineffective assistance of

counsel standard of law

To state a claim of ineffective assistance of counsel

in violation of the Sixth Amendment, a petitioner must

show that counsel’s performance was deficient. Strickland

v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 80

L. Ed. 2d 674 (1984); United States v. Travillion, 759 F.3d

281, 289 (3d Cir. 2014) (quoting Strickland.) The petitioner

must show that counsel made errors so serious that counsel

was not functioning as the ‘counsel’ guaranteed by the

Sixth Amendment.” Id. at 687; United States v. Shedrick,

493 F.3d 292, 299 (3d Cir. 2007). The standard for attorney

performance is that of objectively reasonable assistance

under prevailing professional norms. Id. at 687-88.

Determination of the objective reasonableness of counsel’s

performance is made under all of the circumstances and

from counsel’s perspective at the time, without relying on

hindsight. Id. at 688-89.

Even when a petitioner is able to show that counsel’s

representation was deficient, the petitioner must still

demonstrate that counsel’s deficient performance

40a

Appendix C

prejudiced the defense. Id. at 692-93. “It is not enough for

the defendant to show that the errors had some conceivable

effect on the outcome of the proceeding.” Strickland, 466

U.S. at 693. The petitioner must demonstrate that “there

is a reasonable probability, 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; Shedrick, 493 F.3d at 299. “[N]ot every error that

conceivably could have influenced the outcome undermines

the reliability of the result of the proceeding” Id. at 693.

However, “a defendant need not show that counsel’s

deficient conduct more likely than not altered the outcome

in the case.” Id. Instead, “[t]he defendant must show that

there is 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. “Because failure to satisfy either

prong [deficient performance and prejudice] defeats an

ineffective assistance claim, and because it is preferable

to avoid passing judgment on counsel’s performance

when possible, [citing Strickland, 466 U.S. at 697-98],”

courts should address the prejudice prong first where it is

dispositive of a petitioner’s claims. United States v. Cross,

308 F.3d 308, 315 (3d Cir. 2002).

Analysis

This Court will first address the prejudice prong

of Strickland because it is dispositive of this matter.

A petitioner’s “failure to include a sworn statement

41a

Appendix C

regarding the nature of [defense witnesses’] proposed

testimony is fatal to his making a prima facie showing of

prejudice.” Tolentino v. United States, No. CIV.A. 13-4168

WJM, 2014 U.S. Dist. LEXIS 107400, 2014 WL 3844807,

at *3 (D.N.J. July 31, 2014) (citing Duncan v. Morton,

256 F.3d 189, 202 (3d Cir. 2001) (additional citations

omitted). Petitioner has not included sworn statements

from her proposed defenses witnesses. Moreover, even

accepting as true Ellison’s statements of the nature of her

proposed witnesses’ testimony, she has not established a

prima facie showing of prejudice. To determine prejudice

under Strickland, this Court considers whether there is a

reasonable probability, “sufficient to undermine confidence

in the outcome” that if Ellison had testified herself and

presented the testimony of her proposed witnesses, the

jury would have acquitted. To begin the prejudice analysis,

this Court looks to the closing arguments for a summary

of the evidence presented at trial and the arguments made

by counsel. 3

The Government’s closing argument

After trial, the Government summarized its case in

closing argument. (Crim. ECF No. 112 at 57-80.) The

Government asked the jury to focus on seven lies in

letters prepared and signed by Ellison and Tull, which

were sent to Valley National Bank to steal passengers’

money. According to Direct Air stockholder Ed Warneck’s

(“Warneck”) testimony, these letters falsely inflated the

3. A summary of co-defendant Tull’s closing argument and

the Government’s redirect in closing are omitted.

42a

Appendix C

amount of money Direct Air was entitled to withdraw

from the escrow account for actual completed flights.

Lisa Swafford Brooks (“Brooks”) from the DOT testified

that a DOT regulation, referred to as Part 380, protected

passengers’ money, with limited exceptions, by requiring

all passengers’ money to be held in an escrow account

until after the passengers’ flights were completed. Aaron

Goerlich (“Goerlich”), Direct Air’s aviation lawyer,

described the same basic rule. Lori Rooney (“Rooney”)

from Valley National Bank testified that she took Direct

Air’s Release Request letters for withdrawals from escrow

at face value. She did not know why the numbers were

inflated. However, Warneck explained that the letters

falsely inflated income by adding in exorbitant cash lines,

some reflecting as high as $50,000 to $100,000 in cash

payments for a single flight, which never happened with

a discount carrier like Direct Air.

Mary Ann Jarrell (“Jarrell”), employed in Direct

Air’s reservation center in West Virginia, testified as

to how she created reports for Release Requests upon

Ellison’s orders. Ellison, her boss, would call her and

tell her to “dummy up reservations” for flights that were

already completed. Jarrell would open up reservations

from the past, trips that had already taken place, and

she would add fake passengers to flights. She had to

make the reservations using a cash entry because she

did not have a credit card for this purpose. Ellison would

tell her to cancel the reservations after making them,

which would make sense if she needed to know how much

money Direct Air actually had, not including cash from

the false sales. Jarrell “freaked out” when Ellison called

43a

Appendix C

her on the last day Direct Air was in business and told

her to get her purse and go home. Ellison told Jarell that

she was having a bad day because she was $24 million in

debt. The Government argued this was tantamount to a

confession because the debt represented the consequences

of her crimes.

While Jarrell could not explain why Ellison had asked

her to falsify passenger reservations, Diane Drummond,

who worked at Direct Air’s headquarters in Myrtle Beach,

testified that Tull and Ellison were the people in charge

at Direct Air. They paid the bills, including the fuel bills.

They were the only two people at Direct Air who were

allowed to look at the daily fax from the escrow bank.

Keilman’s testimony explained why no one was allowed

to look at the escrow account statements, because the

statements told the grim reality that Direct Air had

insufficient funds. Keilman admitted that and he and

the defendants added the balance of the escrow account

to the company’s net income to make the company look

like it was making money when, in reality, it was losing

money. They all knew this was wrong but lied to the credit

card companies and banks because Direct Air could not

continue to do business without their services. They hoped

to keep the company alive and sell it for a profit.

Referring to Keilman’s testimony about Direct Air’s

year-end financial statements, the Government submitted

that over the course of Direct Air’s existence, while Direct

Air’s internal financial documents showed net year-end

losses ranging from $700,000 to $3.4 million, Direct Air

was submitting external financial statements to Merrick

44a

Appendix C

Bank and American Express that showed yearly profits

ranging from $200,000 to almost $2 million.

Ellison’s closing argument

In Ellison’s closing statement at trial (Crim. ECF

No. 112 at 81-115), Lees argued on her behalf that the

Government had failed to prove she committed any of

the crimes charged. First, Lees attacked Keilman’s

credibility based on his testimony that he had entered

into an agreement with the Department of Justice,

which permitted him to receive a lighter sentence for

testifying against Ellison and Tull. Keilman admitted

that he lied to the Government in interviews leading up

to his prosecution, and that he had lied to Direct Air’s

bankruptcy trustee. Lees posed the question: “Why did

the Department of Justice believe Keilman now?”

Next, Lees argued that it is not a crime to steal

your own money. Joseph Pabst (“Pabst”) from American

Express testified that the money held in Direct Air’s

escrow account with Valley National Bank was deferred

revenue, specifically, that it was Direct Air’s revenue.

Thus, it was not a crime to take the money out of escrow.

Further, Lees noted the indictment charged Ellison with

obtaining money owned by or in the custody and control

of Valley National Bank, Merrick Bank, and American

Express, but that the Government had not presented any

evidence that Merrick Bank or American Express owned

or had the escrow money in their custody and control. With

respect to Valley National Bank’s “custody and control” of

the escrow account, Lees pointed to Rooney’s testimony

45a

Appendix C

that Valley National Bank did not own the money in the

escrow account.

Lees then explained the importance of Direct Air’s

voucher sales. Warneck testified that Direct Air, through

its Family Ties program, sold vouchers that included a

membership fee and a transferable certificate for the

future booking of a charter airline ticket. In 2009, the

DOT opened an enforcement investigation into Direct

Air’s Family Ties program but closed the investigation

without taking any action. Ellison and Tull continued

to sell vouchers on the advice of their aviation counsel,

Goerlich. Goerlich testified that he was surprised when

the DOT reopened the investigation in 2011, and the

DOT admitted it made a mistake by not enforcing the

prohibition on voucher sales in its earlier investigation of

Direct Air. It was only after Direct Air went bankrupt

that the DOT issued its clarifying statement that it

would consider voucher sales by charter airlines a per se

violation of its rules. Lees suggested that after the DOT

misled Ellison and Tull into believing voucher sales by

charter airlines were permitted, it was wrong for the

Government to charge Ellison with a crime for selling

vouchers and taking money from voucher sales out of the

escrow account. Lees concluded that the Government did

not prove any crime had been committed because it did not

distinguish between the money that Ellison permissibly

withdrew from the escrow account for voucher sales from

money that came from passengers who held a confirmed

ticket but had not yet flown.

46a

Appendix C

Lees then explained to the jury that it was only the

manner in which the requests for withdrawal of escrow

funds were made that was problematic, not that the money

was impermissibly withdrawn. He referred to an email

between Ellison and Jarrell, the reservation supervisor at

Direct Air. Jarell informed Ellison that Troy at Radixx,

the company from which Direct Air leased their airline

computer system, told her they had to enter a booked date

and a canceled date in the system to record an instance

where Direct Air had to purchase a scheduled airline

ticket for a customer whose charter flight was canceled.

Thus, Lees suggested that the sales numbers reported in

the Release Requests to Valley National Bank were not

inflated because they included not only the number of sales

for charter flights that had been completed, but also the

sales of charter flights which were canceled and Direct

Air had purchased a scheduled airline ticket for passenger

accommodation. Rooney from Valley National Bank

testified that once a scheduled airline received money for

a rebooked passenger, it was the scheduled airline that

was required to keep the funds in escrow until the flight

was completed. Lees concluded that Ellison’s requests

for release of funds from escrow were not fraudulent

but instead were requests for funds that Direct Air was

permitted to withdraw.

Lees then turned to the issue of the sale of Direct

Air to Avondale. He argued that Ellison and Tull were

merely employees of Avondale after Avondale purchased

Direct Air on September 29, 2011. Jeff Conry ran the

company for Avondale after the sale. Keilman testified

that the $5.4 million escrow shortage was properly

47a

Appendix C

disclosed to Avondale prior to the sale. Lees argued that

the escrow shortage was the result of a problem Direct

Air had discovered with the Radixx computer system,

and there was no intent to deceive any buyer of Direct

Air regarding the shortfall. Avondale had a plan to make

up Direct Air’s shortfall and become profitable by using

bigger planes for the charter flights. Lees suggested

that Avondale’s decision to declare bankruptcy in 2012

caused the loss suffered by Direct Air’s customers when

it ceased operations. Keilman testified that all of the sales

made by Direct Air prior to its sale to Avondale came

from completed flights or vouchers which had expired,

leaving the responsibility of the $5.4 million shortfall on

Avondale. Lees stated the only reason Ellison and Tull

were charged with a crime was so Keilman could receive

a lighter sentence.

Finally, Lees addressed the profit and loss statements.

Keilman testified that Ellison and Tull told him to lie on

the financial statements, but what they actually told him

was to report the dollar amount from the escrow account

as an asset on the profit and loss statements, and this was

a legitimate way to report deferred revenue, according to

the testimony of Joseph Pabst from American Express.

This was the heart and soul of the case, Lees told the

jury, and it was not a lie because the escrowed amount

should be reported under sound accounting principles.

He explained, “there’s a liability to customers, and that

liability is offset on the asset side of the balance sheet with

cash, a cash entry. They [the prosecution] would not dare

bring an accountant in here because that’s the explanation,

and thank God Pabst was here to give it.” (Crim. ECF No.

48a

Appendix C

112 at 108.) Lees sought to persuade the jury that Keilman

had the most to lose if Direct Air failed, he had the most

experience in accounting, and he was solely responsible

for covering up any accounting errors and putting the

blame on others to receive a lighter sentence. (Id. at 109.)

Proposed defense testimony

To determine whether Ellison was prejudiced by the

advice not to testify or call defense witnesses, the Court

considers Ellison’s proposed testimony, stated in her

declaration:

• She was not guilty

• She was being used as a scapegoat by

the cooperators

• Why they handled passenger protection

in the way they did

• That she never signed a charter filing

• She was only put on the account in 2010

because Judy Tull’s health was failing

• The first time she filed a report, she

called Valley National Bank and sent

two reports, one with and one without

cash protection

• About the limitations of the Radixx

Reports versus the Radar Reports

49a

Appendix C

• Radixx knew there were issues that

a Charter Carrier needed versus a

Scheduled Carrier, and Radixx did not

tell them about the report being off, and

what that meant to Direct Air

• How the Family Ties process worked

and when they [vouchers] expired

• What happened on the day Ellison

called the reservation center and Mary

Ann Jarrell would not come to the

phone (contesting that they spoke to

each other).

Further, Ellison submits, verbatim, how she expected the

defense witnesses would have testified:

• Amber Bostic—Advance Technology.

The defense’s expert on computer

programming and coding errors. She

was going to testify that the Radixx

reporting system was off as much as

6% due to coding error. She had worked

all the codes and knew what the exact

issues were. She was going to testify

about the limitations of Family Ties

and how the system would not autocancel memberships. The memberships

were canceled by the reservationist

and could have human error. Also

how many were used and how many

50a

Appendix C

were never used. The protection of

passengers was another area she was

to cover . . . explaining the total number

of cancelled passengers and how much

was recommended for protection.

• Shawn Ulerup—Management in the

reservation center. He was going to

explain system limitations, manual

refund limitations, and the reservation

policy on Family Ties memberships. He

would have told the jury [that] Mary

Ann Jarrell refused to come to the

phone the day the company closed and

that she refused to talk to me.

• Theresa Randall—Protection

Supervisor and over the recommendation

desk. She would have testified to the

large number of protections and the

policies of the company.

• Kevin Tull—Judy Tull’s son who worked

for the company as contract labor for

the first year and trained Keilman on

balancing the escrow. He explained the

rules and helped Keilman set it up and

the credit card processing. He would

have testified what Keilman said about

his knowledge and involvement was a

lie.

51a

Appendix C

• Reese Boyd—the corporate lawyer

who came in and out of our office every

day. He spent most of his time working

with Direct Air. He personally meet

[sic] with Keilman and knew everything

about what everyone said or did within

the company. And he was prepared to

say Keilman was lying.

• Ron Per i — a long t i me f r iend t o

Marshall and me. He was the owner

of Radixx. He had come clean and told

me that the Radixx Reports had issues

and the coding was lost when the guy

who developed it left the company. He

was scrambling to get Radar [the new

software program] up but knew that it

was an issue.

• Chris Jenson—Senior VP at Radixx.

He told me he would come into court

and tell the truth; that Radixx had

issues and what they were. After being

the number 2 guy and leaving the

company, they settled with him with a

contract not to tell what was wrong but

under oath he would have to tell and it

would not have affected his contract.

• Jessica Murphy—Bankruptcy Trustee’s

Counsel. Would have testified about the

destroyed documents and the hidden

52a

Appendix C

documents. She would have had to come

clean about the time that the documents

were destroyed and if and why she had

these documents.

• Penny Bly-Keeper of the BK Direct Air

Documents and worked on accounting.

She could have testified about missing

docs and her Direct Air inaccurate

accounting.

• Greg Lukenville—President of Sky

King. Knew the involvement of Keilman

and new owners (their issues of the

past). Keilman told Lukenville during a

meeting that he was running the show.

• Avondale-New Owners-Jeff Conry,

Wayne Greene CFO, Hank Torbert,

and Donald Stukes. They would have

testified against each other about intent

for the company, and who was running

what.

• Mary Baldwin. She would have testified

about what her boss Robert Keilman

did or did not do. She was offered help

getting a job [and] basically kept up the

Keilman story.

(ECF No. 1-1, ¶¶10-11.)

53a

Appendix C

The defense theory

Based on Lees’ opening statement, the defense

theory was as follows: 1) that the escrow shortfall was

created by undisclosed flaws in the Radixx computer

system; 2) Ellison’s representations to Valley National

Bank in support of escrow withdrawal requests were not

intended to deceive but were withdrawals permitted under

DOT regulations, specifically revenue from membership

fees from voucher sales and refunds to Direct Air for

rebooking passengers on scheduled flights; 3) Keilman was

actually running Direct Air and acted alone in falsifying

the financial statements; and 4) the sale of Direct Air to

Avondale exonerated Ellison for the shortfall in escrow.

The proposed defense testimony relies on the same

defense theory presented by Lees, but without the benefit

of not exposing any of the defense witnesses to crossexamination. Ellison claims that the defense testimony

would contest the key facts essential to the Government’s

case, but she does not explain why they jury was more

likely to believe the defense witnesses’ testimony. For

the reasons discussed below, there is not a reasonable

probability that the jury would have been persuaded to

acquit. The proposed defense testimony on each aspect

of the defense is discussed below.

Keilman’s credibility

Ellison submits she would have testified that she was

not guilty and was a scapegoat for the cooperators. This

was the theme of the defense and was presented in opening

54a

Appendix C

and closing statements by defense counsel. While it is

true, as Ellison asserts, that an attorney’s argument is not

evidence,4 Lees referred to the evidence in the record that

supported the defense theory. Ellison has not provided

any reason why the jury was any more likely to believe

the same defense theory if she had testified that she was

not guilty and merely a scapegoat. As discussed further

below, Ellison would have been subjected to difficult crossexamination.

In support of her argument that Keilman lied about the

conspiracy, Ellison would have presented the testimony of

Kevin Tull, Judy’s Tull’s son, who worked for Direct Air for

its first year and trained Keilman on balancing the escrow.

He would have testified, according to Ellison, “what

Keilman said about his knowledge and involvement was

a lie.” Keilman testified that Kevin Tull had experience

using QuickBooks for a charter airline’s accounting, and

he set up QuickBooks and showed Keilman and Baldwin

how to use it. (Crim. ECF No. 110 at 221-22.)

When Lees asked Keilman about their accounting

method, Keilman explained:

QuickBooks kept track of everything coming in

and out of—in and out on a cash basis, and that’s

how virtually how we ran the company. I am not

sure I answered your question. But we ran the

system with QuickBooks on an accrual—cash

basis principally and only accrued for big items.

4. See Jury Charge, Crim. ECF No. 113 at 17.

55a

Appendix C

(Id. at 224.) Lees, implying that it was highly irregular to

use a hybrid cash/accrual basis of accounting, questioned

how their balance sheets work. Keilman responded,

“[p]rincipally, on a cash basis, because it was a cash

business so the records always reflected that.” Keilman

did not remember if he had told Ellison and Judy Tull

that he accrued “some of the big items[,]” which meant

including anticipated versus actual financial transactions.

(Id. at 225-26.) To explain why Ellison would have told

Keilman to include the escrow account balance in the

financial statements, the basis for the charges of falsely

inflating the income in the year-end financial statements,

Lees suggested that Direct Air moved from accounting

on a cash basis to an accrual basis in order to capture

income that would be coming in from future flights based

on voucher sales. (Crim ECF No. 110 at 228-30.) Keilman

denied this explanation and admitted to their wrongdoing,

“we put the money in the escrow account that wasn’t ours

on the balance statement and income statement.” (Id. at

231.)

Joseph Pabst from American Express testified that

he asked Keilman, by email, how Direct Air reported

deferred revenue from its escrow account in its balance

sheets. (Crim. ECF No. 111 at 147.) Pabst explained that

when a passenger buys an airline ticket for a future flight,

the money goes into a deferred revenue account in the

balance sheet. (Id. at 146-47.) Because the airline has a

liability to the customers until the flights are completed,

the liability “is offset on the asset side of the balance sheet

with cash.” (Crim. ECF No. 111 at 147.) Pabst agreed that

Direct Air’s financial statements should have the Valley

56a

Appendix C

National Bank escrow balance on the liability side of the

statement with a corresponding offset on the asset side.

(Id.) But Keilman, in a phone call, told Pabst that they did

not include a deferred revenue account on their balance

sheet because it was not their money. (Crim. ECF No. 111

at 147.) In other words, Direct Air was accounting on a

cash basis. Keilman told Pabst that the Valley National

Bank account reported in the balance sheet was not an

escrow account, but an account that received money from

the escrow account for flights that were already completed.

(Id. at 149-50.) This was not true. Keilman testified that

he reported the escrow account balance as income upon

Ellison’s direction. Assuming Ellison and Kevin Tull

would have testified in support of Lees’ argument that the

escrow balance was properly reported on the income and

balance sheets on an accrual basis, they would have been

subject to cross-examination on this contrary evidence.

Ellison further submits that Reese Boyd (“Boyd”),

Direct Air’s corporate lawyer, would have testified that he

“personally meet [sic] with Keilman and knew everything

about what everyone said or did within the company.

And he was prepared to say Keilman was lying.” This

proposed testimony is too vague to explain how it would

have persuaded the jury to acquit, in light of the evidence

of Ellison’s involvement from other witnesses.

Next, Ellison proposes that Mary Baldwin (“Baldwin”),

Direct Air’s bookkeeper, “would have testified about

what Robert Keilman did or did not do. She was offered

help getting a job basically kept up the Keilman story.”

Keilman pled guilty to conspiracy to commit bank and

57a

Appendix C

wire fraud. Thus, it is not clear how testimony about what

he “did or did not do” would have tended to exonerate

Ellison. Further, Baldwin would have been subject to

cross-examination on the difference between Direct

Air’s internal documents showing losses each year and

the external financial statements showing profits, and

questioned about who would have input and access to each

of those statements. This could have harmed the defense.

In a further attempt to attack Keilman’s credibility,

Ellison submits that J. Greg Lukenville, President of

Sky King, “knew the involvement of Keilman and new

owners [Avondale] (their issues of the past). Keilman told

Lukenville during a meeting that he was running the

show.” Given the evidence at trial of Ellison’s signature on

Release Requests to Valley National Bank and testimony

that Ellison and Tull ran the business, and in particular,

that they paid the bills and managed the escrow account,

the proposed testimony that Keilman was running the

show at the time of the sale of Direct Air to Avondale

would do little to sway the jury.

W het her pa s s enger pr ot e c tion

explains the cash sales reported on

the Release Requests

The defense’s explanation at trial for the “dummy

reservations” was a practice called passenger protection.

Direct Air created a record to submit to Valley National

Bank for reimbursement of passenger money, after

Direct Air had purchased flights on scheduled airlines

to accommodate passengers whose charter flights were

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Appendix C

cancelled. According to the defense, once Direct Air paid

the scheduled airlines to rebook the passengers, they could

withdraw the passengers’ money from escrow, and it was

up to the scheduled airlines to maintain passengers’ money

in escrow until the flights were completed. Ellison states

she would have testified “why they handled passenger

protection in the way they did.” This does not add anything

to the information Lees brought out on this subject in

cross-examination.

Ellison further proposed to testify that “the first time

she filed a report, she called Valley National Bank and sent

two reports, one with and one without cash protection[.]”

Theresa Randall, the protection supervisor at Direct Air,

would have testified to “the large number of protections

and the policies of the company.” Amber Bostic, the

defense’s computer expert, would have explained “the

total number of cancelled passengers and how much was

recommended for protection.”

The proposed defense testimony raises difficult

questions for cross-examination. If Direct Air experienced

many flight cancellations where passengers were protected

in this manner, why were there so few Release Requests

supported by large cash sales, and none in 2008 or 2011?

Rooney from Valley National Bank testified that before

money could be released from the escrow account, Valley

National Bank would also have to receive notification

from the specific air carriers “that they did in fact fly a

particular flight.” (Crim. ECF No. 101 at 114.) The dummy

reservations described by Jarrell did not provide a flight

by flight reporting of funds from escrow, so how were the

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Appendix C

funds released upon confirmation from the specific air

carriers on which the passengers were rebooked?

Along the same lines, Brooks from the DOT testified

that even if a charter company bought a ticket for a

passenger on a scheduled flight after cancellation of a

charter flight, the money had to be escrowed until the

flight was completed. (Crim. ECF No. 98 at 75-79.) Brooks

explained the typical practice was to transfer the funds

from the charter airline’s escrow account to the scheduled

airlines’ escrow accounts, because if the money was

simply withdrawn by the charter airline after buying

the passenger a new ticket “we would never really know

what carrier had the money, how much was paid, and

we wouldn’t know how much the public charter operator

would have been entitled to.” (Crim. ECF No. 98 at 79.)

Goerlich, Direct Air’s aviation counsel, testified that

under the DOT regulation there has to be flight by flight

accounting in escrow, matching passengers to flights. (Id.

at 66-67.) Based on the record as a whole, the proposed

defense testimony regarding passenger protection was not

likely to persuade the jury that Direct Air only withdrew

money from escrow that represented flights completed by

real passengers.

Ellison’s role in Direct Air

Ellison submits she would have testified that she never

signed a charter filing, and that she was only put on the

[escrow] account in 2010 because Tull’s health was failing.

Testimony and evidence admitted at trial established that

Direct Air made various representations to Valley National

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Appendix C

Bank, American Express and Merrick Bank that Direct

Air was in compliance with DOT regulations. Warneck,

Jarrell, Drummond, and Keilman testified that Ellison and

Tull, based on their decades of airline experience, ran the

company, and this was consistent with their biographies

on Direct Air’s website. (Crim. ECF No. 98 at 106, 112-16;

Crim. ECF No. 101 at 29-30, 173; Crim. ECF No, 110 at

123). Warneck and Keilman testified that Tull and Ellison

managed the escrow account. (Crim. ECF No. 98 at 12426; ECF No. 110 at 136-37.) Jarrell testified it was Ellison

who directed her to create the dummy reservations. (Crim

ECF No. 101 at 183-85.) The reason that Ellison became

a signatory on the escrow account does not suggest that

she was not involved in the conspiracy.

Whether the total escrow shortfall

was caused by unknown errors in the

Radixx computer system

Ellison proposes that she would have testified about

the limitations of the Radixx Reports, and that Radixx

knew there was a problem with the software and did not

disclose the reports being off. Amber Bostic, the defense’s

expert on computer programming and coding errors,

would have testified that the Radixx reporting system was

off as much as 6% due to coding error. Direct Air employee

Shawn Ulerup would have “explain[ed] system limitations,

manual refund limitations.” Ron Peri, owner of Radixx,

would have testified that he admitted to Ellison that the

Radixx Reports had issues and the coding was lost when

the developer left the company. Chris Jenson, Senior VP

at Radixx, would have testified about the issues with the

Radixx reports.

61a

Appendix C

In opening argument, Lees suggested the evidence

would show that the escrow shortage was caused by

Radixx computer errors, unknown to Ellison at the

time of the alleged false representations in the escrow

Release Requests. The resulting escrow shortfall of

$5.4 million was properly disclosed to Avondale, which

assumed responsibility for the shortfall when it purchased

Direct Air. Therefore, there was no crime. The proposed

testimony by Ellison and others was not likely to have

persuaded the jury to acquit for several reasons. First,

if there was no crime because the shortfall was caused by

unknown computer errors and it was properly disclosed

to the purchaser, why did Keilman plead guilty? Second,

if the escrow shortfall was only $5.4 million, and Direct

Air was losing an average of $2 million dollars per year,

how did the company pay its bills until it went bankrupt

because it could no longer pay for fuel? (Crim. ECF No.

110 at 92-96.) On cross-examination, the defense witnesses

would be subject to questioning about testimony that

Ellison and her co-defendant handled the escrow account,

would not allow anyone to see the daily fax containing the

escrow balance (Crim. ECF No. 110 at 88), and they told

Baldwin what bills to pay and when. (Crim. ECF No. 110

at 89, 120, 137.) This evidence is inconsistent with Ellison

being unaware of the cause of the escrow shortage.

Finally, the proposed defense testimony about the

$5.4 million escrow shortfall does not address Keilman’s

testimony that the shortfall was closer to $20 million, and

that the disclosure to Avondale, prepared by Ellison from a

report from the Radixx computer system, was misleading

because they intentionally made it difficult for Avondale to

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Appendix C

figure out the true shortfall. (Crim. ECF No. 111 at 65-66.)

The gross revenue in the disclosure to Avondale included

$7 million dollars in membership and luggage fees that

they had taken out of escrow, which was required to be

replaced because the passengers were entitled to refunds.

(Id. at 67.) Avondale would have to discover on its own

how to determine the total escrow shortfall because the

Radixx Report did not tell the whole story:

the total shortage would be the difference

between the eighteen million seven seventyone and the eleven million nine shown between

gross revenue and net, or an additional $7

million has to be added to the five million four

and has to be added to the seven million zero

seven seven.

(Crim. ECF No. 111 at 94-95.) In other words, there was

another $14 million escrow shortfall at the time of the

disclosure. The proposed defense testimony does not

address this key testimony.

The relevance of Direct Air’s voucher

sales

According to Ellison, the voucher sales were important

to establish that no crime was committed. Ellison would

have testified “how the Family Ties process worked and

when they [vouchers] expired[.]” Direct Air employee

Shawn Ulerup would have explained “the reservation

policy on Family Ties memberships.” This, however,

does not address the testimony that the jury heard from

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Appendix C

Goerlich, Direct Air’s aviation counsel. He testified that

when the DOT opened an investigation into Direct Air’s

Family Ties program in 2009, Direct Air explained to him

how they managed the program. (Crim. ECF No. 101 at

74-76.) He reported this to the DOT, but the information

that he was provided was incomplete. (Id. at 76.) It did

not account for the fact that Direct Air did not keep the

membership fees in the escrow account until the flights

were completed. (Crim. ECF No. 101 at 77-78.) Therefore,

when Direct Air had to refund membership and luggage

fees for vouchers that were unused, it created a shortfall.

This was corroborated by Keilman’s testimony that the

$5.4 million shortfall did not include the $7 million that

had to be returned to the escrow account for membership

and luggage fees. (Crim. ECF No. 111 at 66-69.)

W hether revenue from the voucher sales was

withdrawn from the escrow account in compliance with

the DOT regulation was a question of fact for the jury

to decide. Brooks from the DOT testified that a voucher

program does not provide protection of consumer funds

under the escrow provisions. (Crim. ECF No. 98 at 87-88.)

She explained,

[y]ou were not supposed to sell vouchers if you

were a public charter operator because the

rules specifically say any money you take from

consumers has to go in a specific flight account.

If you did not purchase a ticket for a specific

flight the rules do not apply, that is why we don’t

allow vouchers.

64a

Appendix C

(Id. at 88.) Goerlich testified similarly, that the voucher

program was incompatible with the regulations, which

required accounting for sales on a flight by flight basis.

(Crim. ECF No. 101 at 81.) Goerlich also testified that he

warned Direct Air of the risk of future DOT enforcement

after DOT closed the 2009 investigation, but Direct Air

decided to accept the risk because the voucher program

was important to them. (Id. at 75.) Given this testimony,

Ellison’s and Ulerup’s explanation of how the Family Ties

program worked and the defense theory that taking money

out of escrow for membership fees was permitted does

not raise a reasonable probability of a different outcome

at trial.

The credibility of Jarell’s testimony

Jarrell, Direct Air’s reservations center supervisor,

testified that on the last day Direct Air was in business,

Ellison called her and told her to go home because the

company was shutting down and the Department of

Transportation or IRS was coming. (Crim. ECF No. 101

at 196.) Ellison told Jarrell that she was having a bad day

because she was $24 million in debt. (Id. at 197.) In closing

argument, the Government described this phone call as

tantamount to a confession. (Crim. ECF No. 112 at 66.)

Ellison asserts she would have testified that she never

spoke to Jarell because Jarrell refused to come to the

phone, and Shawn Ulerup, a manager in the reservation

center, would have corroborated Ellison’s testimony.

The defense contested Jarrell’s testimony at trial. Lees

impeached Jarrell because she gave different accounts

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Appendix C

of the phone call in interviews with the Department of

Justice on several occasions. Jarrell testified on redirect

examination, that even if she did not recall the correct

timing or exact words of the phone conversation, she

remembers the event because it was so distressing to her

that she went straight home and called her mother.

It is significant to Jarrell’s credibility that Jarrell

testified she had known Ellison since 1996, and she worked

for Direct Air from when it opened in 2007 until it closed

in 2012, and primarily reported to Ellison. (Crim. No.

ECF 101 at 167-69.) She spoke to Ellison every day. (Id.

at 172.) As the reservations supervisor, she worked six

days a week, opening at 7:00 a.m. and staying until 7:00

p.m., supervising up to 100 people. (Id. at 174-75.) Her

testimony was inconsistent with a person who would have

left the office early in the day, leaving behind stranded

customers when all of their flights were cancelled, if she

had not received a call from Ellison telling her to leave.

Jarrell testified that the phone conversation she described

with Ellison was the last time she ever spoke to her, and

Ellison has not described any other conversation they had

after Jarrell learned about the shut-down on the last day

Direct Air was in business. (Crim. ECF No. 101 at 198.)

Ellison has not shown a reasonable probability that the

outcome of the trial would have been different if Ellison

and Ulerup had denied the phone conversation.

The relevance of the missing Direct

Air bankruptcy documents

Ellison submits that Penny Bly, who kept the Direct

Air bankruptcy documents and worked on accounting,

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Appendix C

“could have testified about missing docs and her Direct

Air inaccurate accounting.” H. Jessica Murphy, the

bankruptcy trustee’s counsel, “would have testified about

the destroyed documents and the hidden documents. She

would have had to come clean about the time that the

documents were destroyed and if and why she had these

documents.” In light of the problems in the defense theory

discussed above, it is unlikely the result of the trial would

have been different if Ellison testified that Direct Air

properly accounted for all of the transactions in the escrow

account in compliance with the DOT regulation, with the

exception of the errors caused by the Radixx system,

but she could not prove this because the documents were

inadvertently destroyed by the bankruptcy trustee.

The relevance of Avondale’s purchase

of Direct Air

According to Ellison, Avondale officers Jeff Conry,

Wayne Greene, Hank Torbert and Donald Stukes

“would have testified against each other about intent

for the company [Direct Air], and who was running

what.” However, as the Government argued in its closing

statement, the fraud alleged in this case occurred before

Avondale bought Direct Air. Besides, as discussed above,

there was testimony that the escrow shortfall was much

greater than the $5.4 million disclosed to Avondale, calling

into question the defense theory that Direct Air was not

responsible for any losses because Avondale accepted

responsibility for the shortfall. Therefore, this proposed

testimony would not have persuaded the jury.

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Appendix C

III. CONCLUSION

Ellison’s defense, with or without the proposed witness

testimony, was dependent on the jury concluding, as a

finding of fact, that the DOT regulation permitted (1)

charter airlines to sell vouchers and take membership

and luggage fees out of escrow before passenger flights

had been completed; and (2) to withdraw from the escrow

account without flight by flight accounting of the funds.

The jury rejected this argument and there is nothing

about the proposed defense testimony that makes it

a more persuasive in light of the DOT’s position that

voucher sales were never permitted and withdrawals

from escrow required a flight by flight accounting. The

uncontradicted evidence of Direct Air’s continuous losses

and high fuel bills makes it unlikely the jury would believe

the escrow shortage was caused solely by undiscovered

computer errors and that there was no intent to deceive

the banks. Evidence of Ellison’s involvement in running

Direct Air makes it unlikely the jury would conclude she

was not involved in the inflation of the year-end financial

statements. Factual allegations of prejudice are an

essential component to a prima facie showing entitlement

to habeas relief, and Ellison has not alleged sufficient

facts to establish prejudice. Therefore, an evidentiary

hearing is unnecessary. Palmer v. Hendricks, 592 F.3d

386, 400 (3d Cir. 2010) (prima facie showing of prejudice

is required before an evidentiary hearing is necessary to

determine and ineffective assistance of counsel claim on

habeas review.) Therefore, for the reasons stated above,

the amended § 2255 motion is DENIED. An appropriate

order follows.

68a

Appendix C

IV. CERTIFICATE OF APPEALABILITY

Pursuant to 28 U.S.C. § 2253(c), the petitioner in a

§ 2255 proceeding may not appeal from the final order

in that proceeding unless he or she makes “a substantial

showing of the denial of a constitutional right.” “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 that the issues presented here are adequate to

deserve encouragement to proceed further.” Miller-El v.

Cockrell, 537 U.S. 322, 327, 123 S. Ct. 1029, 154 L. Ed. 2d

931 (2003); Slack v. McDaniel, 529 U.S. 473, 484, 120 S. Ct.

1595, 146 L. Ed. 2d 542 (2000). Because jurists of reason

could not disagree with this Court’s conclusion that Ellison

failed to establish the prejudice prong of her ineffective

assistance of counsel claim, Ellison has failed to make a

substantial showing of the denial of a constitutional right,

and no certificate of appealability shall issue.

Date: June 7, 2022

/s/ Susan D. Wigenton

Hon. Susan D. Wigenton,

United States District Judge

69a

Appendix

APPENDIX D — ORDER

DENYING

REHEARING OF

THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT, FILED DECEMBER 23, 2024

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 22-2169

KAY ELLISON,

Appellant,

UNITED STATES OF AMERICA

On Appeal from the United States District Court

for the District of New Jersey

(No. 2-21-cv-16230)

District Judge: Honorable Susan D. Wigenton

BEFORE: CHAGARES, Chief Judge, and

JORDAN, HARDIMAN, KRAUSE,

RESTREPO, BIBAS, PORTER, MATEY,

PHIPPS, FREEMAN, MONTGOMERY-REEVES,

CHUNG, ROTH* Circuit Judges

Filed December 23, 2024

SUR PETITION FOR REHEARING

The petition for rehearing filed by Appellant Kay

Ellison in the above-captioned matter has been submitted

* Jude Roth’s vote is limited to panel rehearing only.

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Appendix D

to the judges who participated in the decision of this Court

and to all other available circuit judges of the Court in

regular active service. No judge who concurred in the

decision asked for rehearing, and a majority of the circuit

judges of the Court in regular active service who are not

disqualified did not vote for rehearing by the Court en

banc. It is now hereby ORDERED that the petition is

DENIED.

BY THE COURT

s/ Paul B. Matey

Circuit Judge

Dated: December 23, 2024

Lmr/cc: All Counsel of Rec

71a

Appendix E

APPENDIX E — CONSTITUTIONAL

PROVISIONS

AND STATUTE INVOLVED

U.S.C.A. Const. Amend. V

Amendment V. Grand Jury Indictment for Capital

Crimes; Double Jeopardy; Self-Incrimination; Due

Process of Law; Takings without Just Compensation

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in

the land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offence to be twice put

in jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due process

of law; nor shall private property be taken for public use,

without just compensation.

72a

Appendix E

U.S.C.A. Const. Amend. VI-Jury Trials

AMENDMENT VI. JURY TRIALS FOR CRIMES,

AND PROCEDURAL RIGHTS [TEXT & NOTES OF

DECISIONS SUBDIVISIONS I TO XXII]

In all criminal prosecutions, the accused shall enjoy the

right to a speedy and public trial, by an impartial jury of

the State and district wherein the crime shall have been

committed, which district shall have been previously

ascertained by law, and to be informed of the nature

and cause of the accusation; to be confronted with the

witnesses against him; to have compulsory process for

obtaining witnesses in his favor, and to have the Assistance

of Counsel for his defence.

73a

Appendix E

U.S.C.A. Const. Amend. XIV

AMENDMENT XIV. CITIZENSHIP; PRIVILEGES

AND IMMUNITIES; DUE PROCESS;

EQUAL PROTECTION; APPOINTMENT OF

REPRESENTATION; DISQUALIFICATION OF

OFFICERS; PUBLIC DEBT; ENFORCEMENT

Section 1. All persons born or naturalized in the United

States, and subject to the jurisdiction thereof, are citizens

of the United States and of the State wherein they reside.

No State shall make or enforce any law which shall abridge

the privileges or immunities of citizens of the United

States; nor shall any State deprive any person of life,

liberty, or property, without due process of law; nor deny

to any person within its jurisdiction the equal protection

of the laws.

Section 2. Representatives shall be apportioned among

the several States according to their respective numbers,

counting the whole number of persons in each State,

excluding Indians not taxed. But when the right to vote

at any election for the choice of electors for President and

Vice President of the United States, Representatives in

Congress, the Executive and Judicial officers of a State,

or the members of the Legislature thereof, is denied to

any of the male inhabitants of such State, being twentyone years of age, and citizens of the United States, or in

any way abridged, except for participation in rebellion, or

other crime, the basis of representation therein shall be

reduced in the proportion which the number of such male

citizens shall bear to the whole number of male citizens

twenty-one years of age in such State.

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Appendix E

Section 3. No person shall be a Senator or Representative

in Congress, or elector of President and Vice President, or

hold any office, civil or military, under the United States,

or under any State, who, having previously taken an oath,

as a member of Congress, or as an officer of the United

States, or as a member of any State legislature, or as an

executive or judicial officer ofany State, to support the

Constitution of the United States, shall have engaged in

insurrection or rebellion against the same, or given aid or

comfort to the enemies thereof. But Congress may by a

vote of two-thirds of each House, remove such disability.

Section 4. The validity of the public debt of the United

States, authorized by law, including debts incurred

for payment of pensions and bounties for services in

suppressing insurrection or rebellion, shall not be

questioned. But neither the United States nor any State

shall assume or pay any debt or obligation incurred in aid

of insurrection or rebellion against the United States, or

any claim for the loss or emancipation of any slave; but

all such debts, obligations and claims shall be held illegal

and void.

Section 5. The Congress shall have power to enforce, by

appropriate legislation, the provisions of this article.

75a

Appendix E

28 U.S.C.A. § 2255. Federal custody;

remedies on motion attacking sentence

(a) A prisoner in custody under sentence of a court

established by Act of Congress claiming the right to be

released upon the ground that the sentence was imposed

in violation of the Constitution or 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.

(b) Unless the motion and the files and records of the

case conclusively show that the prisoner is entitled to no

relief, the court shall cause notice thereof to be served

upon the United States attorney, grant a prompt hearing

thereon, determine the issues and make findings of fact

and conclusions of law with respect thereto. If the court

finds that the judgment was rendered without jurisdiction,

or that the sentence imposed was not authorized by law

or otherwise open to collateral attack, or that there has

been such a denial or infringement of the constitutional

rights of the prisoner as to render the judgment vulnerable

to collateral attack, the court shall vacate and set the

judgment aside and shall discharge the prisoner or

resentence him or grant a new trial or correct the sentence

as may appear appropriate.

without requiring the production of the prisoner at the

hearing.

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Appendix E

(d) An appeal may be taken to the court of appeals from

the order entered on the motion as from a final judgment

on application for a writ of habeas corpus.

(e) An application for a writ of habeas corpus in behalf of

a prisoner who is authorized to apply for relief by motion

pursuant to this section, shall not be entertained if it

appears that the applicant has failed to apply for relief,

by motion, to the court which sentenced him, or that such

court has denied him relief, unless it also appears that the

remedy by motion is inadequate or ineffective to test the

legality of his detention.

(f) A 1-year period of limitation shall apply to a motion

under this section. The limitation period shall run from

the latest of –

(1) the date on which the judgment of conviction

becomes final;

(2) the date on which the impediment to making a

motion created by governmental action in violation

of the Constitution or laws of the United States is

removed, if the movant was prevented from making

a motion by such governmental action;

(3) the date on which the right asserted was initially

recognized by the Supreme Court, if that right has

been newly recognized by the Supreme Court and

made retroactively applicable to cases on collateral

review; or

77a

Appendix E

(4) the date on which the facts supporting the claim or

claims presented could have been discovered through

the exercise of due diligence.

(g) Except as provided in section 408 of the Controlled

Substances Act, in all proceedings brought under this

section, and any subsequent proceedings on review, the

court may appoint counsel, except as provided by a rule

promulgated by the Supreme Court pursuant to statutory

authority. Appointment of counsel under this section shall

be governed by section 3006A of title 18.

(h) A second or successive motion must be certified as

provided in section 2244 by a panel of the appropriate

court of appeals to contain –

(1) newly discovered evidence that, if proven and

viewed in light of the evidence as a whole, would

be sufficient to establish by clear and convincing

evidence that no reasonable factfinder would have

found the movant guilty of the offense; or

(2) a new rule of constitutional law, made retroactive

to cases on collateral review by the Supreme Court,

that was previously unavailable.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.