jamie olis’ reply in support of motion for...

Cristina C. Arguedas (CA Bar 87787)Ted W. Cassman (CA Bar 98932)Raphael M. Goldman (CA Bar 229261)Arguedas, Cassman & Headley, LLP803 Hearst AvenueBerkeley, CA 94710Telephone: (510) 845-3000Facsimile: (510) 845-3003

John M. O’Quinn (SBN 15296000)The O’Quinn Law Firm2300 Lyric Centre Building440 LouisianaHouston, Texas 77002Telephone: (713) 223-1000 Facsimile: (713) 223-0103

Lloyd E. Kelley (SBN 11203180)Lloyd E. Kelley & Associates2726 Bissonnet, Suite 240PMB #12Houston, Texas 77005Telephone: (281) 492-7766Facsimile: (281) 652-5973

Tammy Tran (SBN 20186400)Pete Mai (SBN 24029702)Of counsel: David Tang (SBN 24014483)The Tammy Tran Law Firm2915 FanninHouston, Texas 77002Telephone: (713) 655-0737Facsimile: (713) 655-0823

Attorneys for Petitioner Jamie Olis

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

UNITED STATES OF AMERICA

v.

JAMIE OLIS, et al.

H-03-CR-217

JAMIE OLIS’ REPLY IN SUPPORT OF MOTION FOR RELEASE ON BOND

Case 4:03-cr-00217 Document 326 Filed 11/28/2007 of 28

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TABLE OF CONTENTS

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. OLIS HAS A HIGH PROBABILITY OF SUCCESS ON THE MERITS . . . . . . . . 2

A. Government Interference with Olis’ Right to Present His Defense at Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1. No Procedural Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32. State Action Obviously Present . . . . . . . . . . . . . . . . . . . . . . . . . . 53. Inability to Counter Heil’s Testimony Was Severely Prejudicial . . 6

B. Constructive Amendment of the Indictment . . . . . . . . . . . . . . . . . . . . . . . 9

C. Ineffective Assistance of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1. Failure to Object to Biased Juror . . . . . . . . . . . . . . . . . . . . . . . . 112. Failure to Object to Erroneous Instruction Concerning Interstate

Commerce Element of Wire Fraud . . . . . . . . . . . . . . . . . . . . . . . 123. Failure to Object to Erroneous Instruction Concerning the

“Scheme to Defraud” Element of Mail and Wire Fraud . . . . . . . . 14

III. EXCEPTIONAL CIRCUMSTANCES WARRANT GRANTING OLIS RELEASE ON BOND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

CERTIFICATE OF SERVICE


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TABLE OF AUTHORITIESCASES

Brentwood Academy v. Tennessee Secondary School Athletic Ass’n, 531 U.S. 288 121 S. Ct. 924, 930 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6

Carpenter v. United States, 484 U.S. 19, 108 S. Ct. 316 (1987) . . . . . . . . . . . . . . . . 14

Hughes v. United States, 258 F.3d 453 (6th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . 12

McClesky v. Zant, 499 U.S. 467, 111 S. Ct. 1454 (1991) . . . . . . . . . . . . . . . . . . . . . . 3

McNally v. United States, 483 U.S. 350, 107 S. Ct. 2875 (1987) . . . . . . . . . . . . . . . . 14

Monterey Plaza Hotel Ltd. P’ship v. Local 483 Hotel Employees, Rest. Employees, 215 F.3d 923 (9th Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Murray v. Carrier, 477 U.S. 478, 106 S. Ct. 2639 (1986) . . . . . . . . . . . . . . . . . . . . . . . 3

Pirelli Armstrong Tire Corporation Retiree Medical Benefits Trust v. Dynegy, Inc. Et al.,Case No. 4:02-cv-01571 (S.D. Tex.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Schmuck v. United States, 489 U.S. 705, 109 S. Ct. 1443 (1989) . . . . . . . . . . . . 12, 13

Stirone v. United States, 361 U.S. 212, 80 S. Ct. 270 (1960) . . . . . . . . . . . . . . . . . . . 11

United States v. Adams, 778 F.2d 1117 (5th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . 11

United States v. Alsugair, 256 F. Supp. 2d 306 (D.N.J. 2003) . . . . . . . . . . . . . . . . . . 15

United States v. Baldinger, 838 F.2d 176 (6th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . 15

United States v. Boyd, 606 F.2d 792 (8th Cir. 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . 14

United States v. Caldwell, 302 F.3d 399 (5th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . 13

United States v. Chambers, 408 F.3d 237 (5th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . 11

United States v. Cross, 128 F.3d 145 (3rd Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . 13

United States v. Curry, 681 F.2d 406 (5th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . 13

United States v. Gray, 790 F.2d 1290 (6th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . 13


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United States v. Green, 786 F.2d 247 (7th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . 13, 14

United States v. Guerra, 94 F.3d 989 (5th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . 3

United States v. Lake, 472 F.3d 1247 (11th Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . 13

United States v. Lew, 875 F.2d 219 (9th Cr. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

United States v. Nell, 526 F.2d 1223 (5th Cir. 1976) . . . . . . . . . . . . . . . . . . . . . . . . . . 12

United States v. Robles-Vertiz, 155 F.3d 725 (5th Cir. 1998) . . . . . . . . . . . . . . . . . . . 10

United States v. Walters, 997 F.2d 1219 (7th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . 14

Virgil v. Dretke, 446 F.3d 598 (5th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

STATUTES, AUTHORITIES, CONSTITUTION

18 U.S.C. § 1341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

28 U.S.C. § 2255 . . . . . . . . . . . . . . . . . . 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, 14, 15, 16, 17

Fifth Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3

Sixth Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3


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I. INTRODUCTION

The government argues that Olis’ motion for bail should be denied because he is

unlikely to prevail on the merits of his § 2255 motion and because the record does not

establish extraordinary circumstances warranting his release. The first assertion is

belied by the fact that the government needed fifty-six pages to respond to Olis’ bail

motion — pages devoted almost entirely to the merits of the legal issues raised by Olis’

petition — while advancing positions that are legally and factually unsupportable.

Although at this early stage we will not comprehensively address each of the

government’s arguments, we are compelled to highlight a few of the more glaring

deficiencies in the government’s position.

For example, there was no procedural default of the Fifth and Sixth Amendment

fees issue because Olis and his attorneys had no knowledge of the government’s

involvement in Dynegy’s tortious conduct. Likewise, far from being an independent

actor, Dynegy’s decision not to advance Olis’ defense fees was controlled and

mandated by the government. And the testimony of Jeffrey Heil, indisputably false, was

both central to the government’s case and worked devastating prejudice to the defense.

For these and other reasons presented in the petition, Olis will prevail on the merits.

The second point — the existence of extraordinary circumstances — must be

evaluated in the context of the unique facts presented here. This is not a simple case of

legal error. Jamie Olis sits in prison because the government intentionally violated his

Fifth and Sixth Amendment rights by wrongfully choking off his access to resources that

he needed to defend against these complex charges. Most assuredly, Olis’ petition

establishes other errors, but each of them flowed from or at least could have been


1 The government requests sixty additional days to file its response on the meritsof the § 2255 motion. Although we do not oppose that request, the time elementunderscores the necessity for immediate relief in the form of bail. In addition,contemporaneous with the filing of this reply memorandum, Olis is filing a motion fordiscovery. The resolution of that motion, and the discovery process to follow, willrequire additional time. In the meantime, Jamie Olis should be released.

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timely prevented but for the government’s interference with Dynegy’s payment of fees.

Now, the government exacerbates its misconduct by advancing fact-bound arguments

(e.g. that Dynegy was an independent actor, that Olis personally possessed sufficient

resources to fund his defense, etc.) that, though without merit, cannot be conclusively

resolved without evaluation of disputed facts. Although the Court will require weeks and

perhaps months to develop the facts and law relevant to resolve these complex issues,1

the passing of each day is a precious loss for Olis and his family that can never be

redeemed. Meanwhile, Olis’ elderly parents continue to fail and his young daughter

approaches her fifth birthday without the presence of her loving father. Collectively,

these constitute extraordinary circumstances, and the Court should order that Olis be

released on bond.

II. OLIS HAS A HIGH PROBABILITY OF SUCCESS ON THE MERITS

Olis will not attempt to respond to each of the government’s arguments on the

merits of Olis’ § 2255 motion — a bail motion is not the proper vehicle to litigate those

issues. Nevertheless, a brief discussion of several key points demonstrates that the

government’s contentions will fail.

A. Government Interference with Olis’ Right to Present His Defense atTrial

Olis claims in his § 2255 motion that the United States Attorney’s Office


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(“USAO”) violated his Fifth and Sixth Amendment rights by using the deadly threat of

indictment to force Dynegy to cut off Olis’ access to defense funds. Memorandum of

Points and Authorities in Support of Jamie Olis’ Motion To Set Aside His Conviction

Pursuant to 28 U.S.C. § 2255 (“§ 2255 Memorandum,” Docket # 315) at 31-69. The

government argues that this claim is procedurally defaulted and fails on its merits.

These contentions are frivolous.

1. No Procedural Default

The government opposes the interference claim primarily by arguing that it has

been procedurally defaulted because Olis’ attorneys did not raise it before trial. Gov’t

Response at 5-9. That argument is patently erroneous: neither Olis nor his attorneys

had any knowledge that the government was responsible for Dynegy’s decision to

cease funding for Olis’ defense. Absent such knowledge, there was no default.

A § 2255 petitioner has adequate “cause” for failing to raise a constitutional claim

when there existed “some external impediment preventing counsel from constructing or

raising the claim.” McCleskey v. Zant, 499 U.S. 467, 497, 111 S. Ct. 1454, 1472 (1991)

(quoting Murray v. Carrier, 477 U.S. 478, 492, 106 S. Ct. 2639, 2648 (1986)). “For

cause to exist, the external impediment, whether it be government interference or the

reasonable unavailability of the factual basis for the claim, must have prevented

petitioner from raising the claim.” Id. (emphasis added); see also United States v.

Guerra, 94 F.3d 989, 993 (5th Cir. 1996) (“Objective factors that constitute cause

include . . . a showing that the factual or legal basis for the claim was not reasonably

available to counsel at the prior occasion.”).

Indisputably, government action is a required element of Olis’ constitutional


2 The government’s interference with Olis’ access to Dynegy’s funding restrictedthe resources available to him not only for attorneys’ fees but also for experts and otherancillary services. See § 2255 Memorandum at 52-69. In this context, the suggestionthat Olis had sufficient resources independently to fund his defense is fanciful. Further,the vast majority of Olis’ resources consisted of the family home and his wife’s pensionaccount, assets that could not easily be liquidated and that were unlikely to produce theappraised value.

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claims. See United States’ Response to Motion for Release on Bond (“Gov’t

Response”) at 10. Olis did not know until earlier this year that the USAO pressured

Dynegy to cease funding Olis’ defense. Olis Declaration in Support of His Motion to Set

Aside His Conviction (“Olis Declaration,” Docket # 311) ¶ 3. Nor were Olis’ attorneys

aware of the government’s involvement in Dynegy’s decision. Transcript of Testimony

of Terry Yates (attached as Exhibit D to the Declaration of Lloyd E. Kelley in Support of

Olis’ Motion to Set Aside His Conviction) at 84:15-85:3, 131:25-136:11, 134:16-135:11,

244:25-245:4. The government does not dispute these facts. Thus, the record

conclusively establishes that Olis could not have raised his constitutional claims before

trial or on appeal, and those claims are not subject to procedural default.

With respect to the “prejudice” prong of the procedural default jurisprudence, the

government argues that Olis had adequate resources to fully fund his own defense

regardless of Dynegy’s funding decision. Gov’t Response at 6-9. That contention is

patently ridiculous, but nevertheless presents a factual issue that cannot be resolved at

this stage. Ultimately, Olis will demonstrate in evidentiary submissions in connection

with the § 2255 motion that he was indeed severely prejudiced by the USAO’s

interference with his ability to fund his defense.2


3 Moreover, even if the Court resorted to the state-action doctrine, Olis’ claimswould prevail. State action may be found where, inter alia, the government provides“significant encouragement” for private conduct, where a private actor is a “willfulparticipant in joint activity” with the government, or when the government becomesentwined with the management or control of the private actor. Brentwood Academy,531 U.S. at 296, 121 S. Ct. at 930. Each of those tests is satisfied here: the USAO’s

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2. State Action Obviously Present

The government also insists that Olis’ interference claims will fail because there

was no “state action” supporting the claims. Gov’t Response at 10-13. That argument

is meritless. Olis’ challenge is directed at government action: the Department of

Justice’s promulgation of the Thompson Memorandum and the USAO’s use of the

Memorandum to pressure Dynegy to withholding funding for his defense.

The state-action doctrine is designed to determine when “seemingly private

behavior ‘may be fairly treated as that of the State itself.’” Brentwood Academy v.

Tennessee Secondary School Athletic Ass’n, 531 U.S. 288, 295, 121 S. Ct. 924, 930

(2001). That test is met where there is a “close nexus between the State and the

challenged action,” such as where the state exercises coercive power or provides the

private actor with significant encouragement. Id. 531 U.S. at 295-96, 121 S. Ct. at 930

(citation omitted). Here, however, there is no occasion for application of the state-action

doctrine: while Dynegy breached its express contractual obligations by refusing to

advance Olis’ legal fees, Olis does not claim here that Dynegy violated his constitutional

rights. Rather, the government itself effected the constitutional violation by causing

Dynegy not to pay the fees — thus unjustifiably depriving Olis of resources that would

otherwise have been lawfully available for his defense. See § 2255 Memorandum at

32-45. Accordingly, there is no question that “state action” was present.3


pressure plainly caused Dynegy to reverse course and withhold funding from Olis eventhough it was obligated — and originally intended — to provide the funding.

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3. Inability to Counter Heil’s Testimony Was Severely Prejudicial

The government asserts that Olis was not prejudiced by his inability to counter

government witness Jeffrey Heil’s trial testimony describing the losses allegedly

suffered by the University of California system, including losses of the employees’

pension fund, as a result of Project Alpha. Specifically, the government avers that

contradictory evidence, including that provided by an expert like Dr. Bala Dharan, would

have had little effect because the jury heard all of the relevant information. Moreover,

the government asserts — without any support — that Project Alpha did in fact cause

the University system to lose over $100 million, as Heil testified. Gov’t Response at 14-

19. Those frivolous arguments are a microcosm of the government’s confused and

internally inconsistent attempts to save its unconstitutional prosecution of Olis.

As set forth in the § 2255 Memorandum at 22-26, 54-63, the content of Heil’s

testimony, and the conclusions the government sought to draw therefrom, were false

and misleading. Heil testified that the University system sold its investment in Dynegy

at a huge loss after the company disclosed the S.E.C.’s objections to the accounting

treatment of Project Alpha on April 25, 2002. Trial Transcript Day 7 at 215:25-222:20.

He further testified that he focused on Dynegy’s positive cash flow numbers as a

primary motivating factor for his decision to have the University system purchase

Dynegy stock. Id. 220:18-221:6. But all of this testimony was false.

It is now undisputed that the University system did not sell its Dynegy stock

following the April 25, 2002 disclosure. To the contrary, the University bought 900,000


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additional shares after the accounting issues were disclosed. See § 2255

Memorandum at 59; Declaration of Bala G. Dharan ¶¶ 11-12 & Ex. D. The disclosure of

this fact alone would have destroyed Heil’s credibility and the inferences that the

government based upon it. Further, recently-discovered pleadings from Pirelli

Armstrong Tire Corporation Retiree Medical Benefits Trust v. Dynegy, Inc., et al., Case

No. 4:02-cv-01571 (S.D. Tex.), a class-action lawsuit against Dynegy, demonstrate that

the University system’s investment officers were well aware by May 1, 2002, that

Dynegy would be required to reclassify cash flows as revenue from financing rather

than operations — but nonetheless recommended purchasing an additional 900,000

shares of Dynegy stock. See Declaration of Ted W. Cassman in Support of Jamie Olis’

Motion for Discovery ¶ 5 & Ex. B. Moreover, it is now established that the proposition

that Project Alpha caused the University system to lose money is speculative and

inconclusive, at best. See § 2255 Memorandum at 58-63; Dharan Decl. ¶¶ 4-9. Yet the

government blindly adheres to its baseless assertion that Project Alpha did cause harm

to the University of California, see Gov’t Response at 17, despite the facts that (1)

expert testimony persuasively demonstrates that the University system suffered no such

harm, and (2) this Court has already decided the point against the government, United

States v. Olis, Criminal No. H-03-217-01, 2006 WL 2716048 at *9 (S.D. Tex. Sept. 22,

2006) (“[I]t is not possible to estimate with reasonable certainty the actual loss to

shareholders attributable to corrective disclosures about Project Alpha.”).

Predictably, the government now attempts to downplay the significance of Heil’s

false testimony. Gov’t Response at 15-19. But that effort is transparently unavailing.

Heil’s testimony was crucial to the prosecution, and the inability of Olis’ attorneys to


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effectively combat that testimony was devastating to the defense. The government

relied extensively on Heil’s testimony at trial: it highlighted the testimony in both its

opening statement and closing arguments, and called Heil as its final witness. See §

2255 Memorandum at 22-26, 54-58. As the government urged during its argument on

the defense in limine objection to his testimony, Heil’s testimony was the only evidence

the government presented concerning Olis’ intent and motive; and in its closing

argument the government was careful to emphasize the losses supposedly suffered by

the University’s pensioners. Id. at 23-24, 55. Indeed, Heil’s importance is demonstrated

by the fact that the government continues to rely on his testimony for the now-

discredited proposition that the Dynegy’s disclosures concerning cash flow were an

important consideration for investors. See Gov’t Response at 33-34. By showing that

the government’s conclusions were factually and conceptually bankrupt, an expert like

Dr. Dharan could have massively undermined the thrust of the government’s case

against Olis.

With regard to Mr. Heil, the only remaining questions are whether the USAO

knew that his testimony was false and misleading when it presented him to the jury, and

whether the government withheld Brady material that would have helped Olis attack

that testimony and the false inferences the government drew from it. Recent

investigation suggests that both questions must be answered affirmatively: the

University of California system appears to have provided to the government — before

Olis’ trial — the records discussed herein demonstrating that the University bought

additional Dynegy stock after Project Alpha was revealed. Declaration of Ted W.

Cassman In Support of Jamie Olis’ Motion For Discovery ¶¶ 4-6 & Exs. A-C.


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B. Constructive Amendment of the Indictment

The government attacks Olis’ constructive amendment claim with a confusing

series of arguments that rely upon the very premises they seek to counter. The

government argues at length that it was not required to prove a violation of GAAP to

show violations of the statutes charged against Olis. Gov’t Response at 31-35. But that

argument proves too much — it is in fact an attempt justify Olis’ conviction on the

improperly amended charges, not on the charges in the indictment.

The grand jury charged that Project Alpha was a scheme to falsely report

financing activity as operating cash flows. Indictment ¶ 15; see also id. ¶ 19 (“the

Defendants and their coconspirators and agents well knew, intended, and believed

[that] Project Alpha was, in fact, a loan structured to appear as a 5-year natural gas

contract that should have been disclosed as cash flows from financing activities”

(emphasis added)). The indictment alleged that Project Alpha employed a “100%

hedging” strategy to insulate the involved banks from financial risk, and that reporting

such an arrangement as operating income violated Generally Accepted Accounting

Principles (“GAAP”). Indictment ¶ 20. According to the indictment, the Defendants

“falsely report[ed]” to the “Rating Agencies, lenders, market and securities analysts, and

the investing public” that the cash flows were operating income rather than financing

activities. Indictment ¶ 21. The false reports “caused Dynegy’s cash flow from

operations . . . to be materially overstated” and caused Dynegy’s financial statements to

be misleading. Indictment ¶ 24.

At trial, however, the government made no attempt to prove that the purpose of

Project Alpha was falsely to characterize loan proceeds as cash flow from operations.


4 Indeed, the government continues to amend the indictment. On page 52 of itsresponse, the government argues that Olis’ conviction may stand because he intendedthat Dynegy would obtain money from lenders — a charge not alleged in the indictmentor proved at trial. By contrast, the government’s trial proof and arguments suggestedonly one possible victim: the investing public. See § 2255 Memorandum at 73-74.

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Instead, the government insisted that it mattered not at all whether the conspirators

believed that the accounting for Project Alpha was correct. See § 2255 Memorandum

at 70-75. Nor did it matter whether Olis and his alleged co-conspirators intended falsely

to characterize loan proceeds as cash flow from operations. Id. Instead, the

government told the jury, the only question was whether Olis and his alleged co-

conspirators concealed the outside hedges and tear-ups from Hecker, Andersen’s

engagement partner. Id.4

The Fifth Amendment commands that a criminal defendant be tried only on

charges presented in a grand jury indictment. “[T]he government may not obtain an

indictment alleging certain material elements or facts of a crime, then seek a conviction

on the basis of a different set of elements or facts.” United States v. Robles-Vertiz, 155

F.3d 725, 728 (5th Cir. 1998). This is so regardless of whether the alternative facts

presented at trial could constitute a crime under the statute charged, or even whether

the indictment could have been couched in general terms encompassing both the

particular facts alleged in the indictment and those proved at trial. When only one

particular set of material facts is charged, the conviction must rest on proof of those

facts. Stirone v. United States, 361 U.S. 212, 218-19, 80 S. Ct. 270, 274 (1960); United

States v. Chambers, 408 F.3d 237, 242-44 (5th Cir. 2005); United States v. Adams, 778

F.2d 1117, 1125 (5th Cir. 1985).


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Accordingly, the government’s argument that the charged statutes do not require

a violation of GAAP is a red herring. The vital point is that the charges in the indictment

relied upon allegations that the conspirators sought an incorrect accounting result, yet

the government did not prove those allegations. Instead, the government sought to

convict Olis based upon a theory fundamentally different from the one presented in the

grand jury’s indictment: that Olis and his alleged coconspirators tried to trick Hecker and

Hecker only. See § 2255 Memorandum at 69-85.

C. Ineffective Assistance of Counsel

The government makes various arguments concerning the ineffective assistance

of counsel Olis received at trial. Gov’t Response at 36-53. None is persuasive.

1. Failure to Object to Biased Juror

The government first contends that counsel was not deficient for failing to object

to the Court retaining an admittedly biased juror. Gov’t Response at 36-53. The

government baldly insists that the record demonstrates that the juror was not biased.

That argument ignores the caselaw that binds this Court. Whether the juror was biased

was a question to which counsel was required to seek an answer, and the failure to do

so was constitutionally ineffective. See § 2255 Memorandum at 87-95.

As discussed in the § 2255 Memorandum at 88-89, the juror expressly stated, “I

will not be able to judge this case fairly.” Such unequivocal statements of bias, if they

are not rehabilitated on the record, require counsel to presume that the juror is biased.

Virgil v. Dretke, 446 F.3d 598, 607, 610 & n.52, 613 (5th Cir. 2006); Hughes v. United

States, 258 F.3d 453, 459-60 (6th Cir. 2001); United States v. Nell, 526 F.2d 1223,

1230 (5th Cir. 1976). There was no rehabilitation here; in fact, the Court spoke to the


5 Moreover, the government makes no effort to address counsel’s failure tovindicate Olis’ rights to be present and to have counsel present at critical stages of theproceedings. See § 2255 Memorandum at 93-95.

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juror ex parte and reported that the juror was “not happy.” Nothing in the record

demonstrated that the juror was not biased.

The government asks the Court to simply assume from the circumstances that

the juror was not biased. But Virgil, Hughes and Nell prohibit such an assumption —

counsel is obligated, when faced with a juror’s direct expression of bias, to take action.

Virgil, 446 F.3d at 610; Hughes, 258 F.3d at 463; Nell, 526 F.2d at 1230. Because

counsel did not take action, the cases require a finding of ineffective assistance.5

2. Failure to Object to Erroneous Instruction Concerning Interstate Commerce Element of Wire Fraud

The government asserts that counsel did not err in the failing to object to the wire

fraud instruction that “It is not necessary for the government to prove . . . that the

material transmitted by wire was itself false or fraudulent.” Trial Transcript Day 8,

32:21-24. The government argues that the instruction was a correct statement of the

law, Gov’t Response at 44-47, but the government is wrong.

The government’s reliance on Schmuck v. United States, 489 U.S. 705, 109 S.

Ct. 1443 (1989), and United States v. Green, 786 F.2d 247 (7th Cir. 1986), is

misplaced. The “Parr exception” holds that when a wired statement is required by law,

it cannot form the basis of a wire fraud conviction unless the statement itself is false or

fraudulent. United States v. Curry, 681 F.2d 406, 412 (5th Cir. 1982) (“mailings of

documents which are required by law to be mailed, and which are not themselves false

and fraudulent, cannot be regarded as mailed for the purpose of executing a fraudulent


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scheme”) (citing Parr v. United States, 363 U.S. 370, 390-91, 80 S.Ct. 1171, 1183-84

(1960)). The Schmuck Court and the Fifth Circuit have each recognized a limitation on

this principle: “the Parr exception is . . . inapplicable [when the] mailings would not have

been made but for [the defendant’s] alleged scheme to defraud.” United States v.

Caldwell, 302 F.3d 399, 416 (5th Cir. 2002). But the limitation does not apply here:

even the government acknowledges that the law required Dynegy to wire the financial

statements at issue to the S.E.C. regardless of the alleged conspiracy. See Gov’t

Response at 47.

Perhaps most egregiously, the government misleadingly cites a Seventh Circuit

case and its progeny for the proposition that the Parr “innocent mailing” exception does

not apply if wire or mail transmittals are “part of the execution of the scheme” alleged.

Gov’t Response at 46-47. But that is not a correct statement of Fifth Circuit law, see

Curry, 681 F.2d at 412 — or that of the other Circuits to have addressed the issue. As

the court observed in United States v. Lake, 472 F.3d 1247 (11th Cir. 2007):

Most other circuits to address the issue have interpreted Parr to hold that“mailings of documents which are required by law to be mailed, and whichare not themselves false and fraudulent, cannot be regarded as mailed forthe purpose of executing a fraudulent scheme.” United States v. Curry, 681F.2d 406, 412 (5th Cir. 1982); see United States v. Cross, 128 F.3d 145,149-52 (3d Cir. 1997); United States v. Gray, 790 F.2d 1290, 1298 (6th Cir.1986), rev’d on other grounds sub nom. McNally v. United States, 483 U.S.350, 107 S. Ct. 2875, 97 L. Ed. 2d 292 (1987); United States v. Boyd, 606F.2d 792, 794 (8th Cir. 1979) (alternative holding). A divided panel of theSeventh Circuit did not read Parr so broadly, see United States v. Green, 786F.2d 247, 249-51 (7th Cir. 1986), but we think that the dissent in that casehad the better of the argument. Not only did the Green majority opinionadopt an unconvincingly crabbed interpretation of Parr, but it failed to explainhow a nonmisleading mailing compelled by law can be for the purpose offurthering a fraudulent scheme.

Id. at 1256. In short, under the binding Fifth Circuit law set forth in Curry, it was “necessary


14

for the government to prove . . . that the material transmitted by wire was itself false or

fraudulent,” and the Court’s instruction to the contrary was incorrect.

3. Failure to Object to Erroneous Instruction Concerning the “Schemeto Defraud” Element of Mail and Wire Fraud

The government also argues that mail and wire fraud convictions may be

obtained if the defendant sought only to deprive another of property — rather than to

obtain property — and that the instructions to that effect were therefore correct. Gov’t

Response at 47-53. Again, the government is wrong.

The government cites Carpenter v. United States, 484 U.S. 19, 108 S. Ct. 316

(1987), but that case is inapposite. The Carpenter Court held simply that a defendant

who reveals a victim’s confidential information may thereby deprive the victim of

property. Id. The Court did not even address the question whether a conviction may

stand absent proof that the defendant sought to obtain property.

The government fails to address the cases cited in Olis’ § 2255 Memorandum

that are on point: United States v. Walters, 997 F.2d 1219, 1227 (7th Cir. 1993) (A

“deprivation is a necessary but not a sufficient condition” of mail or wire fraud because

“only a scheme to obtain money or other property from the victim by fraud violates”

those statutes); Monterey Plaza Hotel Ltd. P’ship v. Local 483 of Hotel Employees,

Rest. Employees, 215 F.3d 923, 926-27 (9th Cir. 2000) (“The purpose of the mail and

wire fraud proscriptions is to punish wrongful transfers of property from the victim to the

wrongdoer”); United States v. Lew, 875 F.2d 219, 221 (9th Cir. 1989) (“after McNally the

elements of mail fraud remain unchanged except that the intent of the scheme must be

to obtain money or property, [and] the Court made it clear that the intent must be to


15

obtain money or property from the one who is deceived” (emphasis added)); United

States v. Baldinger, 838 F.2d 176, 180 (6th Cir. 1988) (Section 1341 “was intended by

the Congress only to reach schemes ‘that have as their goal the transfer of something

of economic value to the defendant.’”); United States v. Alsugair, 256 F. Supp. 2d 306,

312 (D.N.J. 2003) (“[I]n addition to an allegation that a defendant deprived a victim of

money or property, the mail-fraud statute, 18 U.S.C. § 1341, requires an allegation that

the defendant obtained money or property as well.”). These cases compel the

conclusion that the instructions were erroneous. See also § 2255 Memorandum at 98-

100.

The government further argues that the instructions were somehow correct

because the indictment alleged a conspiracy to obtain property. Gov’t Response at 49-

51. As Olis has already demonstrated, the government did not prove the charges

alleged in the indictment — and certainly did not prove that Olis intended to obtain any

money or property. See § 2255 Memorandum at 69-85. In any event, the indictment’s

charges do nothing to correct the erroneous jury instructions.

III. EXCEPTIONAL CIRCUMSTANCES WARRANT GRANTING OLIS RELEASEON BOND

Contrary to the government’s perfunctory argument, Gov’t Response at 53-54,

exceptional circumstances warrant granting Olis release on bond.

Most significantly, the government misconduct that led to Olis’ conviction was

exceptional. This is not a case of simple legal error. Rather, as discussed herein and in

the § 2255 Memorandum, the USAO engaged in a pernicious pattern of misconduct

involving repeated violations of Olis’ fundamental constitutional rights. The misconduct


16

as a whole deprived Olis of any chance of a fair trial, and resulted in the conviction of an

innocent man. Moreover, the USAO’s misconduct was so pervasive that litigating the

merits of Olis’ § 2255 motion will likely take an unusual amount of time. In this context,

Olis must not be compelled to conduct that litigation while incarcerated.

Moreover, as Olis observed in his initial bail motion, continuing Olis’ incarceration

perpetuates the constitutional violations that led to his incarceration in the first place.

While in prison, Olis cannot fully assist his defense team in litigating the § 2255 motion

now before this Court. The government asserts that this argument could be made in

most habeas petitions, Gov’t Response at 54, but Olis is not in a position similar to most

other prisoners. As the government readily concedes, because of the complexity of the

facts underlying the charges, Olis himself has always been a vital participant in the

preparation of his own defense. Gov’t Response at 14-15. Olis’ imprisonment limits his

participation by substantially restricting his ability to review the voluminous relevant

discovery documents and communicate with counsel.

Furthermore, several factors personal to Olis and his family militate strongly in

favor of release on bond. First, Olis’ adoptive father, William, is seriously ill with

terminal cancer. It is unclear whether he will endure until Olis’ release date. Thus, if the

Court does not order release on bond, Olis’ unwarranted and unconstitutional prison

sentence would be unfairly compounded by the punishment of missing his father’s final

months. A letter from William Olis is attached hereto as Exhibit A.

Likewise, Olis and his wife, Monica, have long hoped to add to their family.

However, because Monica is now 43 years old, time is of the essence. Again, absent

release on bond, Olis’ sentence will be unfairly compounded by interference with his


17

ability to raise a family. A letter from Monica Olis is attached hereto as Exhibit B.

IV. CONCLUSION

For the reasons stated herein and in the initial Points and Authorities supporting

his motion for release on bond, Olis respectfully requests release on bond, with his

appearance assured by a quitclaim deed on his residence, pending resolution of his

motion to set aside his conviction pursuant to 28 U.S.C. § 2255.

Dated: November 28, 2007, Berkeley CA

Respectfully submitted,

ARGUEDAS, CASSMAN & HEADLEY, LLP

By: /s/ Ted W. Cassman Ted W. Cassman 803 Hearst Avenue Berkeley, CA 94710 (510) 845-3000


CERTIFICATE OF SERVICE

I hereby certify that, on November 28, 2007, I caused to be served a true and

accurate copy of each of the attached Jamie Olis’ Reply in Support of Motion for

Release on Bond on all parties to the above-titled case registered as Electronic Filing

System users by filing the documents in this Court’s ECF/Electronic Filing System.

/s/ Ted W. Cassman Ted W. Cassman


ExhibitA


ExhibitB


jamie olis’ reply in support of motion for...

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