by David Kim

The United States Court of Appeals for the Tenth Circuit held that an evidentiary hearing was required on an ineffective-assistance claim involving an allegedly undisclosed bank-fraud defense. The Court explained that valid checks alone do not establish the fraudulent means required by 18 U.S.C. § 1344(2), limiting United States v. Bonnett, 877 F.2d 1450 (10th Cir. 1989). It also ordered reconsideration of prejudice from deficient advice concerning tax willfulness, requiring application of the Government’s burden to prove that element beyond a reasonable doubt.

Background

Nancy Martin used checks drawn against her employers’ accounts to pay personal expenses. She had general authority to write checks, but the Government maintained that she lacked authorization for those payments. Martin pleaded guilty to bank fraud and aiding or assisting in preparing a false tax return under 26 U.S.C. § 7206(2). When the U.S. District Court for the District of Kansas addressed the tax count at the plea hearing, Martin stated that she had not known her conduct was illegal. Both the defense and Government treated intentional commission of the acts as sufficient to establish the disputed mental-state element, and the District Court accepted the plea after Martin consulted counsel.

The plea agreement provided for dismissal of three additional tax counts and a recommendation by the Government for a sentence at the low end of the Sentencing Guidelines range. Martin requested probation. The District Court imposed concurrent prison sentences of 48 months for bank fraud and 36 months for the tax offense. Martin’s direct appeal was dismissed under her appeal waiver without a merits determination.

Martin then filed a verified 28 U.S.C. § 2255 motion alleging that counsel had not explained that the Government had to prove she used deception as the means of obtaining bank property. She also alleged that counsel had not explained that the tax charge required proof that she knew she was legally obligated to report the money taken from her employers as income. Counsel’s responsive affidavit generally described discussing the charges and their elements. The District Court denied relief without an evidentiary hearing, concluding that the bank-fraud defense lacked merit and that counsel’s deficient tax advice caused no prejudice. The Tenth Circuit granted a certificate of appealability with respect to counsel’s bank-fraud advice and prejudice on the tax conviction.

Analysis

The Court began its analysis with the two requirements for ineffective assistance, viz., objectively unreasonable performance and resulting prejudice. Strickland v. Washington, 466 U.S. 668 (1984). Counsel receives a strong presumption of reasonable professional judgment, assessed without hindsight. After a guilty plea, prejudice requires a reasonable probability that proper advice would have led the accused to reject the plea and insist on trial. Hill v. Lockhart, 474 U.S. 52 (1985).

The Court stated that the inquiry encompasses all circumstances surrounding the plea and that unsupported retrospective assertions are insufficient. Heard v. Addison, 728 F.3d 1170 (10th Cir. 2013). Courts must examine contemporaneous evidence of the accused’s preferences. Lee v. United States, 582 U.S. 357 (2017). The Court reviewed the entire order de novo, including factual findings, because no evidentiary hearing had occurred. United States v. Barrett, 797 F.3d 1207 (10th Cir. 2015). Section 2255(b) requires a hearing unless the motion, files, and records “conclusively show that the prisoner is entitled to no relief,” the Court observed.

Bank-Fraud Defense

The Court first addressed § 1344(2), which prohibits knowingly executing schemes that use “false or fraudulent pretenses, representations, or promises” to obtain property belonging to, or controlled by, a financial institution. The deception must naturally induce the bank or a custodian of bank property to release funds. Loughrin v. United States, 573 U.S. 351 (2014). Valid checks themselves do not assert facts. Williams v. United States, 458 U.S. 279 (1982). The Court noted that the Seventh Circuit applied that reasoning to § 1344(2). United States v. Doherty, 969 F.2d 425 (7th Cir. 1992). The Court explained that Loughrin recognized circuit agreement that check-kiting schemes lack the necessary false representations.

The Government argued that Martin’s checks implicitly misrepresented her authority to make the particular payments. However, the Court interpreted Loughrin as having established that such implied misrepresentations, without more, were insufficient under § 1344(2). In addressing the Dissent, the Court distinguished Bonnett, which involved additional conduct by bank insiders inducing payment, by explaining that “the mere writing and depositing of valid checks will not suffice.” To the extent Bonnett held Williams inapplicable to the bank-fraud statute, Loughrin abrogated that holding. Loughrin’s relevant legal statements remained controlling even if characterized as dicta. See, e.g., United States v. Serawop, 505 F.3d 1112 (10th Cir. 2007).

Counsel must reasonably investigate the law and may perform deficiently by failing to disclose a credible defense that ultimately fails. Deference to strategy is inappropriate when nondisclosure lacks sound professional judgment, the Court noted. Heard. Counsel generally need not anticipate legal changes but may have to consider arguments foreshadowed by existing decisions. Bridges v. United States, 991 F.3d 793 (7th Cir. 2021); accord United States v. Carthorne, 878 F.3d 458 (4th Cir. 2017); United States v. Juarez, 672 F.3d 381 (5th Cir. 2012).

The Court determined that its precedents had not adopted Martin’s theory but that the statute and existing Supreme Court decisions sufficiently supported it when she pleaded guilty. Later decisions provided limited corroboration. United States v. Robinson, 161 F.4th 1069 (7th Cir. 2025) (as amended Jan. 28, 2026) (remanding for acquittal after rejecting implied misrepresentation); United States v. McDonald, No. 5:21-CR-00012 (W.D. Va. Jan. 23, 2024) (granting acquittal for an employee’s unauthorized checks). Their post-plea timing limited their weight because hindsight was impermissible.

The Court did not determine whether Martin’s statutory defense would prevail or whether counsel’s performance was deficient. Counsel’s general statement that she discussed the charges and their elements did not establish whether she knew of the Loughrin defense or had a strategic reason for not disclosing it. The existing record did not conclusively foreclose relief, so § 2255(b) required an evidentiary hearing, according to the Court. See United States v. Aguayo-Montes, 169 F.4th 1205 (10th Cir. 2026).

The hearing must determine whether counsel considered the defense, whether she discussed it with Martin, and whether disclosure would have affected Martin’s decision to proceed to trial.

Tax Willfulness and Prejudice

The Court then turned to tax willfulness. Section 7206(2) requires proof of a legal duty, knowledge of that duty, and a voluntary, intentional violation. United States v. Ambort, 405 F.3d 1109 (10th Cir. 2005); Cheek v. United States, 498 U.S. 192 (1991). Intentionally performing the acts alone does not establish a knowing violation of tax law. The Court concluded that counsel’s contrary advice was deficient.

The District Court nevertheless reasoned that Martin’s bookkeeping experience and concealment indicated guilt and that she had not articulated a good-faith belief that she was complying with the law. But the Government must prove willfulness beyond a reasonable doubt; Martin did not have to establish good faith to defeat the charge, the Court explained.

The Court rejected the Government’s harmlessness argument because prejudice concerned Martin’s individual decision, not whether everyone in her position would reject the plea. Lee. The inquiry must account for the elements and available proof. Martin could establish prejudice by showing that trial rationally served her expressed preferences and a reasonable probability that she would have chosen it, the Court reasoned. Her stated desire to avoid any realistic imprisonment risk linked the two counts. Acquittal on only one might not have induced her to reject a plea permitting probation. The Court instructed that the District Court must decide whether the two prejudice claims depend on one another.

Conclusion

Accordingly, the Court reversed the denial of Martin’s § 2255 motion and remanded for the bank-count evidentiary hearing and renewed tax-count prejudice determination. See: United States v. Martin, 2026 U.S. App. LEXIS 27552 (10th Cir. 2026).

Editor’s Note: Readers litigating ineffective-assistance claims are encouraged to read the Court’s full opinion together with the Fifth Barrier, “Obtaining Evidence, a Hearing, and Counsel,” in the Cover Story. The decision illustrates why adding counsel’s affidavit to the record does not necessarily resolve the factual questions that determine entitlement to relief.

Martin’s verified motion identified a particular omission in counsel’s advice. Counsel’s general account of discussing the charges and their elements did not establish whether she considered or disclosed the plausible bank-fraud defense or had a sound professional reason for omitting it. The Court required a hearing on those unresolved matters and prejudice. It also inferred a misunderstanding from counsel’s reference to “PIK instructions,” which it understood to mean Kansas pattern instructions irrelevant to the elements of federal bank fraud.

The practical lesson is to state specific facts under penalty of perjury, e.g., what counsel said or failed to explain, when, and how adequate advice would have affected the plea decision. Identify material disagreements with counsel’s affidavit, unanswered questions, and statements supporting your claim. Provide available supporting documents or witness statements. Explain why those facts, if established, could warrant relief and why the existing record does not conclusively defeat the claim. Disagreement alone does not require a hearing.

Expressly request an evidentiary hearing in the District Court. If appealing a denial without a hearing, expressly challenge that refusal and explain why factual development is necessary. The Dissent objected that Martin had not raised the absence of a hearing as a ground for reversal on appeal. Although the majority ordered a hearing, prisoners should avoid leaving that issue unpresented.

Obtaining a hearing does not establish ineffective assistance. Martin still must prove deficient performance and prejudice on the bank-fraud claim.  

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