Michael Riolo appeals the denial of his 28 U.S.C. § 2255 motion to vacate a 293-month prison sentence and convictions for mail fraud. He claims ineffective assistance of counsel from Theresa Van Vliet, who allegedly assured him that pleading guilty to five counts would result in a maximum of 10 years in prison due to a supposed deal with the government regarding his sentencing range of 97–121 months. The district court held an evidentiary hearing and found no evidence that Van Vliet had made such representations. Instead, it determined that she adequately informed Riolo about the federal sentencing process, including the role of the United States Probation Office and the district court in determining the sentencing guidelines. The court denied Riolo’s motion based on these factual findings.
On appeal, Riolo challenges the district court's findings, asserting they are clearly erroneous and arguing that Van Vliet’s alleged misrepresentation about the guideline range constituted ineffective assistance. He also claims her underestimation of his guideline range by over 100 months amounts to ineffective assistance. However, after review and oral argument, the appellate court found no clear error in the district court's factual determinations and upheld the conclusion that Van Vliet did not provide ineffective assistance. The district court's judgment was affirmed.
Riolo’s offenses involved defrauding over 80 investors from August 1999 to December 2008, where he misrepresented investment opportunities in foreign currency trading through his companies, Sterling Wentworth Currency Group, Inc. and LaSalle International Clearing Corporation. Instead of investing the received funds, Riolo misappropriated them for personal expenses, including luxury items, and used new investors' money to pay returns to earlier investors, resulting in over $29.5 million disbursed under false pretenses.
Riolo orchestrated a Ponzi scheme, preparing fraudulent profit and loss statements that misled investors about substantial returns, ultimately collecting over $44 million over nearly a decade. In January 2009, the FBI served him with a subpoena for records from his companies, Sterling and LaSalle. Riolo contacted his civil attorney, Bart Houston, who connected him with Theresa Van Vliet, a seasoned criminal attorney. Van Vliet communicated with the FBI, informing them that her firm had the requested records. During a subsequent in-person meeting, Riolo disclosed that he had not conducted any legitimate trading and had sent investors false statements about their investments.
Van Vliet warned Riolo of potential mail and wire fraud charges, advising him about the implications of his case and the likelihood of a guilty plea leading to a reduced sentence. She indicated that his sentence would be influenced by the Sentencing Guidelines and emphasized that pleading guilty and cooperating with authorities would likely yield the lowest possible sentence. In May 2009, the government formally charged Riolo with five counts of mail fraud.
On May 7, 2009, Van Vliet met with Riolo, Houston, and Riolo’s then-wife, Lori Ann Gary, to discuss his potential guideline range. Van Vliet estimated an offense level of 30 with a criminal history category of I, suggesting a guideline range of 97–121 months’ imprisonment. She noted that a higher range could apply if a commodities law enhancement were imposed, but she believed it would not. She reassured Riolo that the government had reached the same calculations regarding his sentencing. Testimony during Riolo’s evidentiary hearing indicated conflicting accounts of whether Van Vliet had reached a binding agreement with the government about the sentencing range.
Gary inquired whether pleading guilty could result in a sentence longer than ten years, to which Van Vliet assured her it would not, stating that the plea agreement was established with the prosecution. Houston, a civil lawyer, mistakenly believed there was an understanding regarding Riolo's sentencing guidelines, while Riolo recalled Van Vliet asserting a guideline range of 97 to 121 months was guaranteed. Van Vliet denied making any assurances about a fixed guideline range or agreement with the government, claiming she informed Riolo about the complexities of sentencing guidelines and that the probation office would independently calculate his guideline range.
On May 11, 2009, Riolo had a lunch meeting with Van Vliet and private investigator Michael McManus, where Van Vliet purportedly explained federal sentencing procedures, including the role of the probation office and the district judge's discretion. However, Riolo denied Van Vliet's presence at the meeting and her discussion of these topics.
Shortly after the lunch, Van Vliet received and forwarded the plea agreement to Riolo, indicating that the prosecutor's calculations aligned with theirs, specifying a level 30 with a range of 97 to 121 months, and emphasizing the importance of cooperation for potential leniency. The plea agreement outlined the federal sentencing process and clarified that the court was not bound by the guideline range. Riolo expressed concerns about a specific statement in the factual proffer regarding trading in futures contracts, which Van Vliet presented to the government; however, the government refused to amend the language. Van Vliet reassured Riolo that it would not impact his guideline range, and he ultimately signed the factual proffer. During the change-of-plea hearing in July 2009, Riolo confirmed under oath that he had fully reviewed the plea agreement with Van Vliet and understood its contents.
Riolo confirmed to the court that he had fully reviewed the factual proffer with his attorney, Van Vliet, and understood the sentencing process following his guilty plea. He acknowledged that the probation office would prepare a Presentence Investigation Report (PSR) to determine his guideline range and recognized that only the district court would set his sentence. Riolo repeatedly affirmed that no promises had been made regarding his sentence. Following the change-of-plea hearing, the PSR assigned an offense level of 38 and a criminal history category of I, resulting in a guideline range of 235–293 months, which included two four-point enhancements not previously discussed. Riolo was shocked by these calculations, believing they contradicted an earlier agreement for an offense level of 30 and a shorter sentence range.
In response, he drafted a letter to the court seeking to withdraw his plea or delay sentencing, citing a perceived verbal agreement with the government. Van Vliet advised against attempts to withdraw the plea, warning of potential difficulties and adverse consequences. She noted the decision was ultimately Riolo's and suggested he seek a second opinion. Riolo then consulted with attorney Richard Rosenbaum, who expressed hesitance about supporting the withdrawal due to time constraints. A conference call involving Riolo, Rosenbaum, and Van Vliet ensued, where they discussed the case, leading Riolo to believe Rosenbaum would represent him at the upcoming sentencing. Later, Rosenbaum contacted Van Vliet for clarification on the plea agreement and Riolo’s case details.
Rosenbaum concurred with the opinion against Riolo withdrawing his plea but hesitated to communicate this due to their personal friendship. Instead, he and Van Vliet decided to inform Riolo that Rosenbaum could not represent him due to insufficient time to address the plea withdrawal before sentencing. Rosenbaum emailed Van Vliet, indicating his inability to represent Riolo due to a conflict check issue and requested Van Vliet to relay this to Riolo.
During the sentencing hearing, which resulted in a 293-month prison sentence for Riolo, Van Vliet reiterated objections to two four-point enhancements. She accepted that one enhancement related to commodities law was applicable but contested the validity of the enhancement concerning jeopardizing the soundness of financial institutions, arguing that the entities involved were not legitimate institutions. The district court overruled these objections, adopted the findings in the Presentence Report, and imposed the sentence after hearing victim testimonies.
Riolo appealed, claiming that the government had promised him a lower offense level than what was applied. However, the appellate panel found no evidence of such an agreement and noted that Riolo had sworn under oath that no promises regarding his sentence were made. Subsequently, Riolo filed a pro se motion to vacate his sentence under 28 U.S.C. § 2255, alleging ineffective assistance of counsel with multiple claims. The magistrate judge consolidated these claims into three broad theories for relief and recommended denial. After Riolo objected, the district court adopted the magistrate judge’s recommendation.
Riolo appealed again, leading the appellate panel to identify that the district court had overlooked some of his ineffective assistance claims. Citing Clisby v. Jones, the panel vacated the district court's judgment and remanded the case for reconsideration of these claims. The district court referred the matter back to the magistrate judge, who again found no merit in the claims and recommended denial. After Riolo's objections, the district court adopted the magistrate judge's recommendation, leading to another appeal by Riolo. In this second collateral appeal, Riolo contended that the district court failed to conduct a statutorily required evidentiary hearing, asserting that his allegations could constitute ineffective assistance of counsel, including claims regarding Van Vliet's advice about his sentencing.
Riolo alleged that Van Vliet failed to inform him about the probation office conducting an independent calculation of his offense level. The appellate panel vacated the judgment and remanded the case for an evidentiary hearing to assess the truth of Riolo's claims. During the two-day hearing, Riolo and witnesses, including Gary and Houston, testified, while the government called Van Vliet, McManus, and probation officer Sheila Tierney, who prepared Riolo's Presentence Report (PSR). After the hearing, the district court denied Riolo's 2255 motion, favoring Van Vliet's testimony over that of Riolo and his witnesses. The court determined that Van Vliet had not misrepresented her dealings with the government regarding Riolo's guideline range and had adequately informed him of the sentencing process. Specifically, the court found that Van Vliet reviewed the plea agreement and discussed the probation office's role and the district court's discretion with Riolo before the change-of-plea hearing. Additionally, the court concluded that Van Vliet did not impede Riolo's attempt to withdraw his plea prior to sentencing. Ultimately, the district court ruled that Van Vliet did not provide ineffective assistance of counsel. Riolo's appeal is centered on whether his guilty plea was knowingly entered. The legal standard for 2255 proceedings involves de novo review of legal conclusions and clear error review of factual findings, particularly regarding claims of ineffective assistance of counsel, which follow the two-part test established in Strickland v. Washington. Riolo challenges five factual findings made by the district court, asserting they were clearly erroneous, particularly regarding Van Vliet's review of the plea agreement with him before the change-of-plea hearing.
Riolo argues that the district court made a clear error by concluding that his attorney, Van Vliet, reviewed the factual proffer with him prior to the hearing. The district court accepted Van Vliet's live testimony, which clarified the discrepancy, suggesting that the finding was not clearly erroneous. Riolo's own sworn testimony during the plea colloquy, where he affirmed that he had read and discussed the factual proffer with Van Vliet, supports the court's conclusion. At the evidentiary hearing, Riolo acknowledged discussing specific language in the proffer with Van Vliet, who attempted to remove certain language regarding futures contracts but was denied by the prosecutor. Their testimonies indicated that they had sufficient time to address concerns with the prosecutor, reinforcing the court's finding that Van Vliet had reviewed the proffer with Riolo before the change-of-plea hearing.
Riolo further claims that the district court erred in finding that Van Vliet informed him about the probation office's role in sentencing. He points to no inconsistencies in her testimony but instead asserts she was untruthful. The district court referenced the plea colloquy, where Riolo confirmed his understanding of the probation office's involvement. Additionally, McManus testified that he attended a meeting where Van Vliet explained this role, and Van Vliet credibly stated at the evidentiary hearing that she had discussed the probation office's role multiple times with Riolo. This evidence collectively supports the district court's finding regarding Van Vliet’s communication about the probation office.
Lastly, Riolo contends that the district court erred in finding that Van Vliet did not tell him about a deal with the government that specified an offense level of 30. The court found no clear error in this determination. It is also noted that Riolo independently reviewed the plea agreement, which outlined the role of the probation office in sentencing.
The Court will determine applicable sentencing guidelines based on a Pre-Sentence Investigation by the United States Probation Office, initiated after a guilty plea. Riolo claims the district court erred by dismissing evidence related to an alleged agreement on his offense level and misinterpreting his claims as a sentence guarantee rather than understanding his agreement. During the plea colloquy, Riolo affirmed three times that no promises regarding his sentence were made. Testimony from both Riolo and his attorney, Van Vliet, supported the district court's finding that there was no deal with the government concerning his offense level. Notably, Van Vliet indicated that the sentencing decision was ultimately up to the judge and that she never communicated any binding agreement regarding sentencing. Riolo's reference to an email from Van Vliet, which discussed matching calculations for an offense level of 30, did not substantiate his claim of a binding agreement, as the email did not mention any agreement but rather confirmed that their independent calculations aligned. Even if an agreement were assumed, the plea agreement and colloquy clarified that no binding agreement existed regarding sentencing, as the court retained the discretion to set the sentence.
The probation office is tasked with preparing a Presentence Report (PSR) that estimates the guideline range for sentencing. Riolo was informed that, while the district court must consider this advisory guideline range, it is not obligated to adhere to it and can impose a sentence outside of the range. During his change-of-plea hearing, the court clarified to Riolo that his attorney, Van Vliet, could not create any binding agreements regarding the guideline range or his sentence. The court emphasized that Van Vliet's opinions were not definitive, and it could make different decisions.
Riolo claimed that the district court erred in finding that Van Vliet did not hinder his attempt to withdraw his guilty plea. He referenced an email he sent the day before sentencing, in which he requested to withdraw his plea. Van Vliet advised against this withdrawal, asserting that the decision was ultimately his, and encouraged him to seek a second opinion. Subsequently, another attorney, Rosenbaum, concluded there was no viable basis for withdrawal. The district court found that Van Vliet's actions did not obstruct Riolo's decision-making process.
In assessing Van Vliet's representation, the court determined she did not provide constitutionally ineffective assistance of counsel under the Strickland standard. The rejection of Riolo's arguments regarding the factual findings made it unnecessary to consider the precedent case of Betancourt v. Willis.
Riolo contends that Van Vliet’s miscalculation of his sentencing guideline range constitutes ineffective assistance of counsel. The court distinguishes this case from Betancourt, where the petitioner successfully argued ineffective assistance due to his attorneys' misleading assurances about a potential sentence reduction linked to a guilty plea. In Betancourt, the court granted relief because the petitioner was unaware of the real consequences of his plea as a result of his counsel's misrepresentations. Conversely, the court finds that in Riolo's case, there is no evidence that Van Vliet provided any assurances or binding agreements regarding sentencing.
Additionally, while it is acknowledged that Van Vliet underestimated Riolo's guideline range by over 100 months, the court emphasizes that this miscalculation alone does not satisfy the criteria for ineffective assistance of counsel under the Strickland standard. This standard requires demonstrating both deficient performance by counsel and resulting prejudice to the defendant, which Riolo has not successfully established.
Strickland's standard for proving ineffective assistance of counsel is stringent, especially regarding guilty pleas. A § 2255 movant must satisfy both prongs of Strickland, but if the first prong is not met, the second need not be considered. In this case, the analysis focuses on the first prong, determining that Van Vliet’s performance was not deficient. To demonstrate deficient performance, Riolo must show that Van Vliet's representation fell below an objective standard of reasonableness. Van Vliet, a criminal lawyer with 18 or 19 years of experience, had previously worked in the Department of Justice and as an Assistant U.S. Attorney, which supports the presumption of her reasonable performance.
Despite her miscalculation of Riolo’s guideline range by over 100 months, the court finds that this did not stem from deficient performance. She had estimated an offense level of 30 with a range of 97–121 months but warned Riolo of a potential four-point enhancement for commodities law violations, which he acknowledged. Moreover, Van Vliet objected to this enhancement after the probation office produced the Presentence Report (PSR). Given these factors—her anticipation of the enhancement, warning to the client, and subsequent objection—the court concludes that her performance cannot be deemed deficient.
A four-point sentencing enhancement was imposed for jeopardizing the safety of a financial institution, which neither Van Vliet nor the government expected to apply due to a lack of prior judicial interpretation. Van Vliet argued that the enhancement was inapplicable because the corporations involved were "fictional," asserting they were not legitimate financial institutions. The court noted that while Van Vliet's understanding of the guideline was reasonable, other circuits had affirmed the enhancement's application to sham financial institutions. The court emphasized that the guideline does not restrict the enhancement to only legitimate institutions and highlighted precedents supporting this view. The test for ineffective assistance of counsel is not based on whether more could have been done but rather on whether the representation fell within a reasonable standard. Van Vliet anticipated most enhancements and verified calculations with the government, with the government's independent agreement underscoring the reasonableness of her representation. Consequently, the court found no deficiency in Van Vliet's performance under the Strickland standard and upheld the denial of Riolo's 2255 motion.
The 1997 U.S. Sentencing Guidelines included a financial institution enhancement in Part F, which was later moved to Part B in the 2008 manual without material changes. This 2008 version was the most current available to Van Vliet during Riolo's sentencing. The district court's dismissal of Riolo's 2255 motion is affirmed. Judge Jordan concurs with the majority opinion, noting that several circuits have recognized that significant errors in sentencing advice may constitute deficient performance by counsel, referencing multiple cases to support this view. However, he emphasizes that a mere miscalculation or erroneous estimate of a sentence does not amount to ineffective assistance of counsel. The court has previously sidestepped this issue and continues to do so in this instance, indicating it will need to address it in the future.
