Case: 14-10055

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Nos. 14-10055, 14-10056 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT UNITED STATES OF AMERICA, Plaintiff-Appellee, v. DAVID FOLEY, Defendant-Appellant.

UNITED STATES MOTION TO DISMISS DEFENDANTS APPEAL Defendant-appellant David Foley pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit bank fraud, pursuant to a plea agreement with an appellate waiver provision. This Court should dismiss defendants appeal because he knowingly and voluntarily waived his right to appeal his convictions and sentence and because the issues he raises fall squarely within the scope of that waiver. As the district court found in accepting defendants guilty pleas and then in denying his motion for bail pending appeal, 1 defendant knowingly and voluntarily entered into a broad waiver of his appellate rights to challenge his convictions and sentence. Moreover, defendant cannot 1 Defendant has appealed that determination and the government has filed its opposition to defendants motion concurrently with this motion to dismiss.

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show that he falls within the limited circumstances in which this Court has declined to enforce such waivers. Accordingly, this Court should dismiss defendants appeal. JURISDICTION AND CUSTODY STATUS The district court had jurisdiction under 18 U.S.C. 3231. This Court has jurisdiction over defendants appeal pursuant to 18 U.S.C. 3145(c) and 28 U.S.C. 1291. On January 21, 2014, the district court sentenced defendant to two concurrent terms of 24 months imprisonment, to be followed by a three-year period of supervised release. FACTUAL BACKGROUND I. Offense Conduct As defendant acknowledged in his plea agreement, from approximately June 2006 to February 2008, he and Michael Daddona conspired to obtain money by making false or fraudulent representations by mail and wire to sell thumb drives (game packs) containing videogaming software that could be loaded onto full arcade video game machines for the home or arcade markets. Exhibit A (Plea Agreement) at 3. Specifically, they represented to buyers that a company called Ultracade, which defendant had sold to Global VR, along with all his intellectual property interests, manufactured the game packs. Id.; CR 1 at 2. Defendant, who was no longer associated with Ultracade, made and sold the game packs to 2

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Daddona, agreeing that Daddona could then sell the packs to the public using packaging and advertisements that falsely represented the goods to be Ultracade. Id. The game packs were sold at significantly lower prices than the retail prices charged by Global VR. CR 1 at 4. From September to October 2006, defendant also conspired to defraud Countrywide Home Loans by falsely claiming in his application for a nearly $3,000,000 loan and line of credit that he was currently employed by Global VR. In fact, defendant had been terminated by the company after an internal investigation revealed that he was selling Ultracade game packs for his own benefit after agreeing to and being compensated for the transfer of his intellectual property rights to Global VR. Exhibit A at 4. II. The Indictments On July 1, 2009, defendant and Michael Daddona were indicted on 35 counts of conspiracy to commit mail and wire fraud, trafficking in counterfeit goods, theft of trade secrets, mail and wire fraud, conspiracy to commit money laundering, money laundering, and bank fraud. CR 1. On August 18, 2011, a federal grand jury returned a superseding indictment against defendant and Daddona, charging them with 53 counts of conspiracy to commit mail and wire fraud, mail and wire fraud, trafficking in counterfeit goods, transportation of stolen goods, theft of trade secrets, and money laundering. CR 3

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103. On that same day, defendant was indicted in CR 11-00554 EJD on charges related to the mortgage and line of credit that he fraudulently obtained. III. Defendants Plea Agreement On January 6, 2012, defendant entered into a plea agreement with the government, pursuant to which he agreed to plead guilty to one count of conspiracy to commit mail and wire fraud as set forth in the superseding indictments first count in case number CR 09-00670-EJD, and one count of conspiracy to commit bank fraud in case number CR-11-00554-EJD. Exhibit A at 1. In return, the government agreed to dismiss the remaining charges against defendant. Id. at 8. With respect to sentencing, the parties agreed to an adjusted offense level of up to 20 on the conspiracy to commit mail and wire fraud count, with the proviso that the government could argue [that] the amount of loss is no more than 3,211 units multiplied by $479 a unit, or $1,589,069, while defendant could argue that the loss amount was as low as $0. Id. at 6. The parties agreed to an adjusted offense level on the conspiracy to commit bank fraud of up to 22, and that the combined offense level, would be decided by the court after determining the appropriate amounts of loss for both counts. Id. at 6-7. The parties reached no agreement as to defendants criminal history category. Id. at 5. As part of the sentencing stipulations, defendant expressly stated that he understood that the 4

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court is not bound by the Guidelines calculations . . ., the court may conclude that a higher Guideline range applies to me, and, if it does, I will not be entitled, nor will I ask to withdraw my guilty plea. Id. Defendant also agreed that regardless of the sentence that the court imposes on me, I will not be entitled, nor will I ask, to withdraw my guilty plea. Id. As part of the agreement, defendant agreed to a broad waiver of his rights to appeal and collateral review. Id. at 5. Paragraph 4 of defendants Plea Agreement stated: I agree to give up my right to appeal my convictions, the judgment, and orders of the Court. I also agree to waive any right I may have to appeal any aspect of my sentence, including any order relating to forfeiture and/or restitution. Id. Paragraph 5 of the Plea Agreement stated: I agree not to file any collateral attack on my conviction or sentence, including a petition under 28 U.S.C. 2255 or 28 U.S.C. 2241, or motion under 18 U.S.C. 3582, at any time in the future after I am sentenced, except that I reserve my right to claim that my counsel was ineffective in connection with the negotiation of this Agreement or the entry of my guilty plea. Id. IV. Defendants Plea Colloquy During the plea colloquy, defendant confirmed that he had read and reviewed the plea agreement with his lawyer. Exhibit B (Plea Colloquy) at 3-4. Defendant further stated under oath that he was satisfied with the services of his 5

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lawyer, that he was not threatened into pleading guilty, and that he was pleading guilty freely and voluntarily. Id. at 6, 7. Defendant then admitted, again under oath, that he was in fact guilty of the crimes to which he was pleading guilty. See id. at 7. The court also confirmed that defendant had had the opportunity to discuss the plea agreement and in particular its sentencing provisions with his attorney and that defendant understood their significance. Id. at 7-9. After advising defendant of the elements of the offenses, the maximum penalties he faced, id. at 10-13, and the rights he was waiving by pleading guilty, id. at 14-17, the district court expressly advised defendant that he was waiving his right to appeal. Id. at 17-18. In response, defendant acknowledged that he understood that he was waiving those rights. Court: Now, I also understand in the plea agreement, sir, you are giving up certain appellate rights as well. As I read the agreement, it indicates that youre giving up your right to appeal any order or judgment of the court. That means your sentence. Is that your understanding as well? Defendant: It is, your honor. Court: I think you also agree not to engage in any collateral attack of the plea or the sentence. Is that your understanding as well? Defendant: It is. Court: You would, of course, have the right to appeal any issue that came up as to effective assistance of 6

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counsel. That remains as I understand the agreement. Is that your understanding as well? Defendant: Yes. Id. at 17-18. The government then made an offer of proof, noting that defendants false representations that the game packs were made by Ultracade were material to the customers who bought them, and that defendant made and sold the game packs even though he was no longer associated with Ultracade or Global VR. Id. at 1920. The government also stated that defendant had conspired with another individual to falsely represent that defendant was still employed by Global VR to obtain a nearly $3,000,000 mortgage and line of credit. Id. at 21. Defendant agreed that the facts as stated by the government were true and correct. Id. at 22. The district court then found that defendant had made a knowing, intelligent, free and voluntary waiver of his rights as to each of his pleas, and that there was an independent factual basis for each of the offenses. Id. at 25. V. Defendants Sentence The district court sentenced defendant to 24 months imprisonment on each of the counts to which he pleaded guilty, to be served concurrently. CR 251. At sentencing the court advised defendant that he had the right to file any appeal in this matter subject to the plea agreement .... If I recall correctly the only appellate

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remedy available is as to performance of counsel if Im not mistaken. Exhibit C (Sentencing Transcript) at 123. This appeal followed. VI. Defendants Motion for Bail Pending Appeal Defendant subsequently filed a motion in the district court asking that he be permitted to remain out of custody pending resolution of his appeal. CR 258. Before the district court, defendant argued that he was not a flight risk nor a danger to the community, and that his claims of ineffective assistance of counsel (specifically, that counsel failed to adequately investigate the case or prepare for trial, that counsel was ineffective in preparing for and handling the evidentiary hearing on loss amount, and that counsel failed to inform defendant of the plea agreements terms or the rights he would be giving up) raised substantial questions of law or fact. Id. Before this Court, defendant argues for the first time that he was entitled to relief because there was an impermissible variation between the theory of fraud in the plea agreement and the theory of fraud at sentencing, and because the district court erred in sentencing defendant based in part on its application of an evidentiary standard to which defendant himself agreed in the parties joint preevidentiary hearing statement. See Supplemental Memorandum in Support of Motion for Release Pending Appeal at 9-15. (In his pleadings before this Court,

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defendant refers to his claims of ineffective assistance only in passing as a reason why the appellate waiver should not apply to him. Id. at 15.) ARGUMENT I. STANDARD OF REVIEW Whether a defendant has waived his statutory right to appeal is a matter of law reviewed de novo. See United States v. Jeronimo, 398 F.3d 1149, 1153 (9th Cir. 2005), overruled on other grounds by United States v. Jacobo Castillo, 496 F.3d 947, 957 (9th Cir. 2007) (en banc). To determine whether defendants guilty plea and, by extension, his plea agreement were knowing and voluntary, this Court looks to the Rule 11 plea colloquy. See Jeronimo, 398 F.3d at 1157 n.5. II. DEFENDANT HAS WAIVED HIS RIGHT TO APPEAL Defendant knowingly and voluntarily waived his right to appeal his convictions and sentence. This Court should dismiss his appeal because that waiver is valid, his claims on appeal fall within its scope, and none of the limited of circumstances under which this Court has declined to enforce an otherwise valid waiver apply here. This Court has consistently held that an express waiver of a defendants right to appeal is valid if the guilty plea is knowingly and voluntarily made. See United States v. Rahman, 642 F.3d 1257, 1258 (9th Cir. 2011) ([a] defendants waiver of his appellate rights is enforceable if (1) the language of the waiver 9

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encompasses his right to appeal on the grounds raised, and (2) the waiver is knowingly and voluntarily made). This Court has explained that the proper enforcement of appeal waivers serves an important function in the judicial administrative process by preserving the finality of judgments and sentences imposed pursuant to valid plea agreements. United States v. Baramdyka, 95 F.3d 840, 843 (9th Cir. 1996) (quoting United States v. Rutan, 956 F.2d 827, 829 (8th Cir. 1992)). Moreover, public policy strongly supports plea agreements, and perhaps the most important benefit of plea bargaining is the finality that results. United States v. Navarro-Botello, 912 F.2d 318, 321-22 (9th Cir. 1990). Accordingly, when an appeal waiver is valid, the Court must dismiss the appeal. See United States v. Michlin, 34 F.3d 896, 898 (9th Cir. 1994). A. The Waivers Language Encompasses Defendants Right To Appeal On The Grounds Raised

Here, defendant entered into a broad waiver of his appellate rights. Paragraph 4 of defendants Plea Agreement stated: I agree to give up my right to appeal my convictions, the judgment, and orders of the Court. I also agree to waive any right I may have to appeal any aspect of my sentence, including any order relating to forfeiture and/or restitution. Exhibit A at 5. Paragraph 5 of the Plea Agreement stated: I agree not to file any collateral attack on my conviction or sentence, including a petition under 28 U.S.C. 2255 or 28 U.S.C. 2241, or motion under 18 U.S.C. 3582, at any time in the future after I am sentenced, 10

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except that I reserve my right to claim that my counsel was ineffective in connection with the negotiation of this Agreement or the entry of my guilty plea. Id. That language plainly covers defendants claims of sentencing error. To the extent that defendant retains a limited right to assert ineffective assistance of counsel, he may do so only through a collateral attack, not direct appeal. (That waiver is consistent with this Courts case law holding that this Court will only decide ineffective assistance of counsel claims on direct appeal in exceptional circumstances not applicable here. United States v. Steele, 733 F.3d 894, 897 (9th Cir. 2013). B. Defendant Knowingly And Voluntarily Waived His Rights

During the plea colloquy, defendant confirmed that he had read and reviewed the plea agreement with his lawyer. Exhibit B (Plea Colloquy) at 3-4. Defendant further stated under oath that he was satisfied with the services of his lawyer, that he was not threatened into pleading guilty, and that he was pleading guilty freely and voluntarily. Id. at 6, 7. The court also confirmed that defendant had had the opportunity to discuss the plea agreement and in particular its sentencing provisions with counsel and that defendant understood their significance. Id. at 7-9. After advising defendant of the elements of the offenses and the maximum penalties he faced, id. at 10-13, as well as the rights he was waiving by pleading guilty, id. at 14-17, the district court expressly advised 11

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defendant that he was waiving his right to appeal, and defendant acknowledged that he understood that he was waiving those rights. The district court then found that defendant had made a knowing, intelligent, and voluntary waiver of his rights as to each of his pleas. Id. at 25. Defendant contends on appeal that the waiver was not knowing and voluntary because he could not have anticipated that the government would seek to have him sentenced on a different theory of fraud. But for all the reasons set forth in the governments simultaneously filed opposition to defendants bail motion, the theory of fraud to which defendant pleaded guilty was the same as the theory under which he was sentenced: defendant and Daddona sold game packs by knowingly and fraudulently presenting them as manufactured by Ultracade when in fact they were manufactured by defendant, who had sold his intellectual property rights to Global VR. Moreover, defendant stipulated in the plea agreement that the government could argue for loss in excess of $1,500,000. In fact, the district court found a loss of less than $500,000. Defendant cannot credibly contend that he did not understand that he might be sentenced based on an amount of loss far higher than that ultimately found by the district court. Accordingly, because defendant knowingly and voluntarily waived his right to challenge his sentence, this Court should dismiss his appeal.

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C.

None Of The Limited Set Of Circumstances In Which This Court Has Declined To Enforce An Appellate Waiver Apply Here

As defendant acknowledges in his bail motion, the limited set of circumstances under which this Court has declined to enforce an otherwise valid appeal waiver include when: (1) a defendants guilty plea failed to comply with Federal Rule of Criminal Procedure 11; (2) the sentencing judge informed the defendant that he retained the right to appeal; (3) the sentence does not comport with the terms of the plea agreement; or (4) the sentence violates the law. See United States v. Bibler, 495 F.3d 621, 624 (9th Cir. 2007). None of those circumstances apply here. Defendant contends that the waiver does not apply here because the sentence did not comport with the terms of the plea agreement. To the contrary, the sentence did comport with the terms of the plea agreement, and the amount of loss on which it was predicated fell well within the range agreed to by the parties. Exhibit A at 6. Moreover, the plea agreement expressly warned defendant that the court was not bound by the agreement at sentencing, that he could not withdraw his plea based on the sentence he received, and the sentence ultimately imposed was well within the offense level stipulations to which defendant agreed. Id. at 5. Defendant also contends that the waiver is ineffective because his sentence violated the law. But defendants sentence was within the statutory maximum and was not illegal. See, e.g., United States v. Brizan, 709 F.3d 864, 866 (9th Cir. 13

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2013); United States v. Johnson, 988 F.2d 941, 943 (9th Cir. 1993) (illegal sentence is one which is not authorized by the judgment of conviction, or is in excess of the permissible statutory penalty for the crime, or is in violation of the Constitution). Accordingly, defendants appeal should be dismissed. CONCLUSION For the foregoing reasons, this Court should dismiss defendants appeal.

DATED: April 21, 2014

Respectfully submitted, MELINDA HAAG United States Attorney BARBARA J. VALLIERE Assistant United States Attorney Chief, Appellate Division /s/ Anne Voigts ANNE M. VOIGTS Assistant United States Attorney 450 Golden Gate Ave., 11th Floor San Francisco, CA 94102 Phone: (408) 535-5588 Attorneys for Plaintiff-Appellee UNITED STATES OF AMERICA

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CERTIFICATE OF COMPLIANCE I certify that, pursuant to Fed. R. App. P. 27(d)(2), the foregoing is proportionately spaced, using the Microsoft Word 2010 program, with 14-font size Times New Roman style, and contains no more than 20 pages. Dated: April 21, 2014 /s/ Anne Voigts ANNE M. VOIGTS Assistant United States Attorney

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CERTIFICATE OF SERVICE I, Hui Chen, certify that I am an employee of the Office of the United States Attorney, Northern District of California, a person over 18 years of age and not a party to the within action. I certify that on April 21, 2014, I electronically filed the United States Motion to Dismiss Defendants Appeal Exhibits A-C to the United States Motion in the case of United States v. David Foley, CA 14-10055, 14-10056, with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system. I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. Dated: April 21, 2014 /s/ Hui Chen Hui Chen Legal Assistant

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