Federal judge denies woman’s request to set aside prison sentence in Botox fraud case

A federal judge in Las Vegas has denied a woman’s request to set aside her 30-month prison sentence in a fraud case.

Debbie Martinez filed the motion in October 2010 and already has served her sentence. According to the Federal Bureau of Prisons website, the 46-year-old woman was released in April 2012.

“The real collateral damage to her is that she has a felony conviction,” said the defendant’s lawyer, Lisa Rasmussen.

Senior U.S. District Judge Kent Dawson issued his 15-page ruling on Feb. 7, and Rasmussen said her client has 60 days to appeal.

“She’s working and she has moved on with her life, and it is up to her if she wants to appeal within the 60 day time frame,” Rasmussen said.

The motion raised questions about the defendant’s legal representation during her 2008 trial. It included a sworn declaration that her trial attorney described at the time as a “complete piece of fiction.”

Las Vegas attorney Louis Palazzo, who represented Martinez at trial, said Dawson “clearly found that there was no merit to her claim.”

In the motion, Martinez asked Dawson to set aside her sentence because she was denied “effective assistance of counsel.”

Palazzo said he has been “fighting on behalf of the little guy against the government” for the past 25 years.

“She’s the only one in the 25 years I’ve been doing this that has made such a claim,” the lawyer said.

Martinez contended that Palazzo had a conflict of interest because he jointly represented her and her then-husband, Dr. Stephen Seldon.

In 2007, the couple were accused of defrauding patients by treating them with an unapproved substitute for the more expensive anti-wrinkle drug Botox. Martinez worked in her husband’s office.

A jury convicted them of 14 counts of mail fraud and one count of adulterating a drug while held for sale. Seldon was sentenced to 46 months in prison and lost his medical license.

The couple divorced in June 2009, the same month Martinez reported to prison, leaving behind her three teenage children from a previous marriage.

Nine months later, Dawson made the unusual decision to release Martinez and Seldon pending appeal. But the appeal failed, and they returned to prison.

Seldon, 59, was released in April of last year, according to the Federal Bureau of Prisons website.

Rasmussen prepared the motion to set aside Martinez’s sentence. It since has been sealed and is not available to the public.

According to the document, Palazzo was local counsel for Seldon’s trial attorney, Ronald Richards of Beverly Hills, Calif., which “compromised the undivided loyalty” Palazzo owed to Martinez.

Martinez “was not allowed to independently attempt to negotiate her case, as the concern was that she could have evidence that would negatively impact the codefendant, her husband at the time,” Rasmussen wrote. “She was further advised by both (lawyers) … not to testify.”

Palazzo said his designation as Richards’ local counsel was a formality; his “complete allegiance” was to Martinez.

According to Martinez’s declaration, Palazzo and Richards told her not to turn against her husband.

“It was clear to me that the strategy was a joint one, and that my desires to testify against him, to attempt to negotiate my case and cooperate against him were not part of the joint strategy,” she wrote.

Given the “staggering weight” of the evidence against Martinez, according to Dawson’s ruling, “blaming it all on Mr. Seldon is simply not a plausible defense strategy.”

“Negotiation requires two parties, and there is simply no meaningful evidence that the government was interested in negotiating defendant’s case,” the judge wrote. “Accordingly, there was no plausible alternative defense tactic for Mr. Palazzo to pursue.”

Martinez also contended that Richards once used cocaine in front of her, groped her and sent her “sexual text messages.”

In his ruling, Dawson specifically commented on the defendant’s claim that Richards made repeated sexual advances on her before and during the trial:

“While such behavior is unethical and unprofessional, it is irrelevant to whether a conflict of interest existed between defendant and her counsel, Mr. Palazzo. Further, defendant is a sophisticated businesswoman who successfully ran a medical practice until she broke the law. The court finds it strange that such a woman would not immediately alert the court to such offensive behavior.”

Richards said the judge “could not have denied the motion more aggressively.”

“Mr. Palazzo and I have had to suffer with these baseless allegations for over three years, and we were grateful we were vindicated by the ruling,” the lawyer said.

Rasmussen said Dawson’s ruling simply means Martinez did not present sufficient evidence in the “post-conviction context” to show that she was prejudiced by any conflict of interest.

“That does not mean that Judge Dawson approves of the alleged behavior of Ron Richards,” Rasmussen added.

Contact reporter Carri Geer Thevenot at cgeer@reviewjournal.com or 702-384-8710. Follow @CarriGeer on Twitter.