Hirst v. United States

Background

A jury found Gary Hirst guilty in 2016 of four crimes arising from a scheme involving the issuance of Gerova Financial Group shares, including conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud. The court sentenced him principally to 78 months in prison, followed by one year of supervised release, and ordered forfeiture of $19,038,650.53 and restitution of $19,019,404.36. The Second Circuit affirmed the conviction and sentence on direct appeal.

Hirst, who represented himself in this proceeding, filed a motion under 28 U.S.C. § 2255 asking the court to vacate, set aside, or correct his sentence. His original motion asserted 14 grounds for relief, and his supplemental motion added grounds 15 through 23. The government opposed the motions.

Procedural bars and time limits

The court held that several claims were procedurally barred because Hirst could have raised them on direct appeal but did not. Hirst’s general statements that his appellate counsel was ineffective did not establish a valid reason for failing to raise those issues or show prejudice. The court therefore dismissed Grounds 1, 7, 8, 9, 10, and 11 as procedurally barred.

The court also dismissed Hirst’s challenge to testimony by Shant Chalian as procedurally barred because Hirst had raised that issue on direct appeal and could not use a section 2255 motion to relitigate it.

Hirst filed his supplemental motion after the one-year deadline. The court dismissed Grounds 20, 22, and 23 as untimely because they did not relate back to the original motion—that is, they were not based on the same core facts. The court also dismissed portions of Grounds 19, 21, and 23 because they repeated issues raised on direct appeal, while dismissing other portions of those grounds, and Grounds 16, 17, 18, 20, and 22, as procedurally barred because they could have been raised on appeal.

Ineffective assistance of counsel

The court applied the two-part test for ineffective assistance of counsel. Under that test, a defendant must show both that counsel’s performance fell below reasonable professional standards and that the deficient performance probably affected the result.

For Ground 3, Hirst claimed that trial counsel failed to tell him about a plea offer and failed to advise him about pleading guilty. The court found that the trial record showed no formal plea offer had been made. Hirst’s counsel and the government had described only preliminary discussions, and Hirst had confirmed that account at trial. The court also noted that Hirst had previously been told about those discussions and had not been interested in pleading guilty. The court rejected this claim.

For Ground 5, Hirst argued that counsel failed to present evidence of his understanding that the Gerova shares were restricted. The court found that counsel had raised the restrictions in closing arguments and had cross-examined brokerage witnesses about them. The court rejected this claim because counsel had in fact presented the issue.

For Ground 14, Hirst listed numerous alleged failures, including not impeaching witnesses, presenting expert testimony, making objections, pursuing discovery issues, offering evidence and witnesses, challenging the presentence report, and cooperating with appellate counsel. The court rejected the claim because Hirst provided no specific facts identifying the witnesses, evidence, discovery materials, or objections involved.

Statute-of-limitations claim

Hirst argued that his prosecution was barred by a five-year limitations period. Because he did not raise that defense before or during trial, the court held that he waived it. The court also held that he had not shown ineffective assistance or prejudice because the trial evidence indicated that aspects of the charged scheme continued into 2011, within the limitations period.

New evidence and actual innocence

Hirst relied on a corporate record to argue that a government witness, Michael Hlavsa, had not been Gerova’s chief financial officer during the relevant period. The court found that the record was likely erroneous or intentionally false, and that other evidence identified Hlavsa as the company’s chief financial officer. The court also concluded that challenging Hlavsa on this point could have been a strategic choice and that Hirst had not shown that the document would probably have prevented a reasonable jury from convicting him.

Hirst also relied on a book written by a convicted co-defendant and on an investigative memorandum concerning another person’s alleged efforts to drive down Gerova’s share price. The court found that Hirst had not identified evidence covered by the government’s disclosure obligations and had not shown that the materials would establish entitlement to relief.

The court separately rejected Hirst’s actual-innocence claim. It found his assertions about new evidence, false evidence, government lies, and missing impeachment evidence vague, conclusory, and unsupported. He had not shown the extraordinary circumstances required for relief based on actual innocence.

Ruling

The court concluded that Hirst’s motion and supplemental motion did not establish a basis for relief or justify an evidentiary hearing. Judge P. Castel denied both motions. The Clerk was directed to terminate the motion in the criminal case and close the related civil case. The court also declined to issue a certificate of appealability and denied permission to appeal without paying the filing fee, certifying that an appeal would not be taken in good faith.