Article

Note: Paul Musgrave (Borrower) entered a business venture with Raymond Goldberg (Associate) to start a tire recycling plant in Dayton, Ohio. Borrower and Associate made arrangements to hide Associate’s name because Associate had previously failed in operating a tire recycling company. Associate was to provide the equipment needed for USD 2,300,000 with USD 300,000 supposedly coming from Borrower personal funds and USD 350,000 from a price discount from Associate. The remaining funds, USD 1,700,000 came from a government guaranteed loan from Mutual Federal Savings Bank. Borrower obtained a commercial LC from a U.S. bank in favor of Associate to obtain the materials needed to start the tire recycling company.

Because Borrower specified “partial shipments not allowed” on the LC paperwork, Associate falsified the shipping documents to show that the shredder had been included. The documents complied, and Issuer honored. When the goods arrived however, a tire shredder, the most expensive and important piece of equipment, was missing.

Because of Associate’s previously failed business ventures, he had over-drafted his bank accounts. When payment under the LC came to his bank, the bank seized half of the payment to cover his prior overdraft. Borrower tried to recovery his money when the tire shredder was not included in the shipment, but recovery was impossible due to Associate’s bank’s overdraft seizure. Because the tire shredder was not shipped, and Borrower was unable to retrieve his money, the tire-recycling venture failed, resulting on a default on the loan. When Borrower complained that he had been defrauded of his investment, an investigation commenced which resulted in charges against Borrower and Associate for bank fraud, wire fraud, conspiracy, and providing false statements.

The U.S. made a plea bargain with Associate who testified that it was Borrower’s idea to leave Associate’s name off the loan applications and falsify the shipping paperwork. Based on this testimony, the jury convicted Borrower of four counts of fraud. After Borrower lost an appeal his sentence, he moved for a new trial due to ineffective assistance of counsel, claiming that his counsel was ineffective because defense trial counsel failed to appropriately impeach opposing witness and call exculpatory witnesses. The United States District Court for the Southern District of Ohio, Black, J., denied the motion.

The Judge stated noted that a strong presumption in favor of counsel exists that his actions fall within reasonable assistance. Deference must be given to counsel’s trial strategy unless clear evidence of unreasonableness exists. Because trial counsel vigorously cross-examined all the witnesses as allowed under evidentiary rules and made reasonable judgment calls as to which witnesses would help Borrower/Applicant or undermine his credibility, the actions of trial counsel were reasonable and not constitutionally deficient.

The Judge noted, “The Sixth Amendment right to effective assistance of counsel is not intended to guarantee perfection, but instead, ensure a fair trial.”

[JAH]

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