Opinion
Civil Cause No. SA-02-CA-314 EP, [Former Criminal Cause No. SA-97-CR-131-HG]
July 30, 2003
MEMORANDUM AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
TO: Honorable Edward C. Prado United States Judge
Pending before the Court is Movant Charles Philip Akin's Motion to Vacate, Set Aside, or Correct the Sentence of a Person in Federal Custody, filed pursuant to 28 U.S.C. § 2255. Respondent has filed a Response and Movant a subsequent Reply.
Docket entry no. 206.
Docket entry no. 210.
Docket entry no. 211.
I have jurisdiction to enter this Memorandum and Recommendation under 28 U.S.C. § 636(b) and the District Court's Order referring this matter to me to aid in its disposition by recommendation where my authority as a Magistrate Judge is statutorily constrained,
After reviewing the parties' submissions, their legal arguments and relevant law, I recommend for the foregoing reasons that Akin's § 2255 motion be DENIED.
I. Statement of the Case
On June 29, 1999, following a jury trial, Charles Philip Akin ("Akin") was convicted for conspiracy to defraud the United States, in violation of 18 U.S.C, § 371 (Count one); mail fraud, in violation of 18 U.S.C. § 2, 1341 (Counts two through fifty-six); money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i) (Counts fifty-seven through sixty-six); and submitting false claims to a Government agency, in violation of 18 U.S.C. § 2, 287 (Counts seventy-nine through eighty-four and count eighty-six). The district court sentenced Akin on February 11, 2000, to 87 months imprisonment on Counts fifty-seven through sixty-six; and 60 months imprisonment on each of Counts One through fifty-six, seventy-nine through eighty-four, and eighty-six, all terms to run concurrently. The district court also imposed a three-year term of supervised release and ordered Akin to pay $ 1,108,775.90 in restitution to Medicare and Medicaid and a $3,650 special assessment. On May 16, 2001, the United States Court of Appeals for the Fifth Circuit affirmed Akin's direct appeal. On October 1, 2001, the United States Supreme Court denied Akin's Petition for a Writ of Certiorari. On March 26, 2002, Akin filed the instant § 2255 motion to vacate, set aside or correct his sentence. His motion is timely.In May of 1997, the Government indicted Akin and two others, Teddy Henderson and William Gurasich for filing false Medicare claims between 1991 and 1993. In sum, the eighty-eight count indictment revealed a scheme wherein the three men, through several companies, manufactured and marketed to senior citizens and nursing homes, a wheelchair cushion, which was not a reimbursable orthotic device but a type of non-reimbursable durable medical equipment; and filed claims for reimbursement with Medicare claiming the cushion to be a reimbursable orthotic device. Under the Medicare reimbursement process, a provider, such as Akin submits claims to Medicare carriers on a standardized from. The provider is responsible for accurately filling out the form and correctly identifying the products and services provided to recipients using standardized codes set by Medicare. In the instant case, Akin, Henderson and Gurasich, through their various companies, filed reimbursement claims using the product code designation L0430, which covered a specific "body jacket" orthotic device — a device that bears no functional or aesthetic resemblance to the Defendants' wheelchair seat cushion, The money laundering aspect of the indictment arose from the men reinvesting the proceeds of their fraudulent Medicare filings back into the business of manufacturing and marketing the cushions.
Akin and Randy Shelly owned "Bio Tex Ltd.," which manufactured the wheelchair cushion. Akin was the vice president. Akin formed Health Care of Texas, which distributed the wheelchair cushion. (10TR271-2; 12TR530; 13 TR 867; and 1 Sent. TR23). Akin persuaded his friend, Teddy Henderson to start another distributorship for the cushion. Henderson ultimately formed Panal Medical Supplies, Systems Inc., and Hospital Rehabilitation Supply, Inc., for that purpose. The companies eventually became Valeo Limited Partnership, d/b/a Continental Health. Gurasich was a founding partner of Valeo. (13 TR 835-49).
I relate the scheme in its most basic terms, but trial testimonial and documentary evidence revealed the Defendants: designed the cushion without the assistance of any medical professional or orthotist (11 TR329, 330, 342-346); manufactured the cushion for approximately $45 in an automotive upholstery shop (10 TR 170-1; 11TR 336-340); marketed and referred to the cushion using the "medical" sounding name, Lumbar Sacral Support System (LSSS) (11 TR 341, 404, 418; 12 TR 633; 14 TR 923); aggressively marketed the cushions to nursing homes and elderly patients in wheelchairs claiming Medicare covered the cost of the cushions for qualifying individuals (10 TR 166, 172-3, 223-34; 11 TR 401-5, 418-21, 444-46; 12 TR 528-40); and submitted reimbursement claims and pre-complete Certificates of Medical Necessity to Medicare seeking approximately $1,200 per cushion (10 TR 172; 11 TR 440). Medicare, relying that the reimbursement claims sought payment for authorized fitted orthotic "body jackets" paid the Defendants $858.00 per cushion. (10 TR 171). From 1992 through 1993, Medicare paid about 1.4 million dollars for Bio Tex products and products associated with companies that Akin was involved in. (14 TR 987-88 1054). Finally, despite receiving notice that his cushion was not billable under the body jacket code, L0430, Akin continued to seek reimbursement under said code. (10 TR 270-73, 277-82; 12 TR 642-44, 674-76, 678-80, 697-706; 13 TR 836-37).
13TR722.
12 TR 579, 706-07, 713.
12 TR 572-73, 612-13.
See Docket entry no. 1, Indictment at 18-18, Counts fifty-seven through sixty-six.
III. Authorities and Analysis
1) Scope of ReviewTitle 28 U.S.C. § 2255 provides relief for a convicted federal criminal defendant who can establish that either: (1) his sentence was imposed in violation of the Constitution or laws of the United States, (2) the sentencing court was without jurisdiction to impose the sentence, (3) the sentence was in excess of the maximum authorized by law, or (4) the sentence is otherwise subject to collateral attack. Thus, § 2255 post-conviction relief is reserved for errors of constitutional dimension and other injuries that could not have been raised on direct appeal and, if left unaddressed, would result in a complete miscarriage of justice.
See United States v. Placente, 81 F.3d 555, 558 (5th Cir. 1996); United States v. Seyfert, 67 F.3d 544, 546 (5th Cir. 1995); and 28 U.S.C. § 2255.
See United States v. Cervantes, 132 F.3d 1106, 1109 (5th Cir. 1998); United States v. Payne, 99 F.3d 1273, 1281 (5th Cir. 1996); United States v. Gaudet, 81 F.3d 585, 589 (5th Cir. 1996); United States v. Ressler, 54 F.3d 257, 259 (5th Cir. 1995); United States v. Acklen, 47 F.3d 739, 741 (5th Cir. 1995); United States v. Mimms, 43 F.3d 217, 219 (5th Cir. 1995); United States v. Patten, 40 F.3d 774, 776 (5th Cir. 1994); United States v. Segler, 37 F.3d 1131, 1133 (5th Cir 1994), United States v. Smith, 32 F.3d 194, 196 (5th Cir. 1994); United States v. Towe, 26 F.3d 614, 616 (5th Cir. 1994); United States v. Pierce, 959 F.2d 1297, 1301 (5th Cir. 1992); United States v. Vaughn, 955 F.2d 367, 368 (5th Cir 1992); United States v. Weintraub, 871 F.2d 1257, 1266 (5th Cir. 1989); and United States v. Smith, 844 F.2d 203, 205-06 (5th Cir. 1988).
Section 2255 does not reach errors not of a constitutional or jurisdictional magnitude that could have been reached by a direct appeal. Stated another way, a collateral challenge may not substitute for an appeal. "Nonconstitutional claims that could have been raised in a direct appeal, but were not, may not be asserted in a collateral proceeding." Moreover, a defendant may not raise an issue, regardless of whether constitutional or jurisdictional in nature, for the first time on collateral review without showing both "cause" and "actual prejudice" resulting from the error.
Sec United States v. Rocha, 109 F.3d 225, 229 (5th Cir. 1997); United States v. Payne, 99 F.3d at 1281; United States v. Seyfen, 67 F.3d at 546; United States v. Smith, 32 F.3d at 196; United States v. Towe, 26 F.3d at 616; United States v. Pierce, 959 F.2d at 1301; United States v. Vaughn, 955 F.2d at 368; and United States v. Stumpf, 900 F.2d 842, 845 (5th Cir. 1990). "If the error is not of constitutional or jurisdictional magnitude, the defendant must show the error would result in a complete miscarriage of justice." United States v. Segler, 37 F.3d at 1133, quoting United States v. Shaid, 937 F.2d 228, 232 n. 7 (5th Cir. 1991).
United States v. Shaid, 937 F.2d at 231.
United States v. Payne, 99 F.3d at 1281; United States v. Ressler, 54 F.3d at 259; United States v. Towe, 26 F.3d at 616.
Generally, "[a] [ § 2255] movant is [procedurally] barred from raising jurisdictional and constitutional claims for the first time on collateral review unless he demonstrates cause for failing to raise the issue on direct appeal and actual prejudice resulting from the error." United States v. Patten, 40 F.3d at 776. But see Massaro v. United States, 123 S.Ct. 1690 (2003) (holding claims of ineffective assistance of trial counsel may be raised for the first time in a § 2255 petition).
"For a collateral attack under § 2255, 'a distinction is drawn between constitutional or jurisdictional errors on the one hand, and mere errors of law on the other.'" "A defendant can challenge his conviction after it is presumed final only on issues of constitutional or jurisdictional magnitude, and may not raise an issue for the first time on collateral review without showing both 'cause' for his procedural default, and 'actual prejudice' resulting from the error." Other types of error may not be raised in a collateral attack, unless the defendant demonstrates that the error could not have been raised on direct appeal, and if condoned would result in a complete miscarriage of justice.
United Slates v. Pierce, 959 F.2d at 1300-01, quoting United States v. Capua, 656 F.2d at 1037.
United States v. Pierce, 959 F.2d at 1301, quoting United States v. Shaid, 937 F.2d at 232. Cf. United States v. Patten, 40 F.3d at 776 (holding that ineffective assistance of counsel satisfies the cause and prejudice standard).
See United States v. Patten, 40 F.3d at 776; and United States v. Pierce, 959 F.2d at 1301, quoting United States v. Shaid, 927 F.2d at 232 n. 7; see also United States v. Segler, 37 F.3d at 1133; United States v. Smith, 32 F.3d at 196 (holding that a § 2255 movant is not entitled to relief on any ground that he could have asserted on direct appeal but failed to do so only upon a showing that a failure to address the merits of his ground for relief would result in a miscarriage of justice); and United States v. Vaughn, 955 F.2d at 368.
Akin's instant § 2255 Motion seeks to vacate his conviction and set aside his sentence on the basis that the Government prosecuted Akin in violation of his right to due process, the district court erred when it sentenced Akin under the money laundering guidelines and not the fraud guidelines, and that Akin's appellate counsel rendered ineffective assistance by failing to challenge Akin's 87 month sentence. 1. Due Process Claim
Please note, I discuss the issues in a different order than those presented in Movant's motion.
Akin asserts the Government obtained his conviction by violating his right to due process. Specifically, Akin maintains that the Government had no basis for prosecuting him because the Medicare product code, L0430, under which he filed reimbursement claims, was so vague and ill-defined that Akin had no knowledge that he was committing a crime when he filed for reimbursement using that particular code. A thorough review of the record reveals Akin raised this very claim on direct appeal and the Fifth Circuit succinctly and decisively rejected same. It is well settled in this circuit that issues having been rejected on direct appeal cannot be raised again in a § 2255 proceeding. Moreover, the record is replete with evidence (which the jury obviously found persuasive) that the Medicare code was not vague and ill-defined, that Akin knew his product did not fit within the definition of that particular code, and that Akin's conduct was such that he intentionally submitted reimbursement claims for his cushion using the wrong code. Accordingly, it is my recommendation that the district court not revisit this issue and that Akin's claim for relief be denied in all respects.
United States v. Akin, 254 F.3d 1081 (5th Cir. 2001) ( per curiam unpublished table decision) (Jones, DeMoss and Benavides); and Docket entry no. 205.
United States v. Rocha, 109 F.3d 225 (5th Cir. 1997).
Akin raised this issue on direct appeal and in a pre-trial motion to dismiss the indictment. (Docket entry no. 42). H is motion was referred to me and I recommended the motion be denied on the basis that the jury must consider "all the relevant evidence and opinions as to a reasonable interpretation of the Code definition, as well as evidence of defendants' conduct in connection with designing and marketing the product and obtaining the reimbursements." (Docket entry no. 74 at 9). At trial the Government argued that Akin submitted fraudulent reimbursement claims using a code for a product vastly different than his cushion. Akin, in turn, argued the code was so vague and ill-defined and that it was reasonable to include his cushion within the definition of the code. Based on the counts of conviction, the jury disagreed.
2. Sentencing Under the Money Laundering Guidelines versus the Fraud Guidelines
Akin was convicted of multiple counts of closely related offenses-conspiracy to defraud the United States, mail fraud, money laundering, and submitting false claims to a Government agency. Because Akin's offenses involved the same victim and involved multiple acts linked by a common illegal objective or scheme, the district court "grouped" Akin's fraud and money laundering offenses pursuant to Sentencing Guidelines §§ 3D1.1, 3D1.2, 3D1.3, and 3D1.4, and determined a single offense level, which results from the most serious count in the group. Accordingly, the district court sentenced Akin under the money laundering guideline, § 2S1.1, because that guideline produced a higher offense level when compared to the fraud guideline, § 2F1.1.
18 U.S.C. § 371 (Count one).
18 U.S.C. § 2,1341 (Counts two through fifty-six).
18 U.S.C. § 1956(a)(1)(A)(i) (Counts fifty-seven through sixty-six).
18 U.S.C. § 2, 287 (Counts seventy-nine through eighty-four and count eighty-six).
See U.S. Sentencing Guidelines Manual § 3D1.3(b) (1998).
See id. § 3D1.3(b).
Akin asserts the district court violated his Eighth Amendment rights and Congressional intent by sentencing him under the money laundering guidelines and not under the fraud guidelines. He maintains the district court should have sentenced him under the fraud guidelines because fraud was the "essence" of his offenses and his crimes fell outside the "heartland" of the money laundering statute. Akin's motion does not distinguish whether he maintains the district court misapplied the sentencing guidelines by sentencing him under the money laundering statute or erred in refusing to grant him an "outside of the heartland" downward departure. Regardless, a district court's calculation under or application of the sentencing guidelines standing alone is not the type of error cognizable under § 2255, and Akin did not raise either claim on direct appeal. Thus, he is technically procedurally barred from doing so now. Furthermore, Akin does not present this claim as an ineffective assistance of counsel claim, which would hurdle the procedural bar. Nonetheless, I address the claims below and find each argument to be unpersuasive.
Docket entry no. 206 at 42.
See United States v Willis, 273 F.3d 592 (5th Cir. 2001) (District court may, sua sponte, invoke rule of procedural default to bar a defendant's request for relief through a motion to vacate sentence). A motion to vacate under § 2255 is rarely, ifever, the proper vehicle to challenge an application of the Sentencing Guidelines where the sentence is final and the movant did not directly appeal the issue. Prewitt v. United States, 83 F.3d 812 (7th Cir. 1996).
See Docket entry no. 206, Section II at 38-42.
Although a district court's calculation under or application of the sentencing guidelines standing alone is not the type of error cognizable under § 2255, a defendant's claim of ineffective assistance of counsel does give rise to a constitutional issue and if shown, ineffective assistance of counsel is sufficient to establish the cause and prejudice necessary to overcome a procedural default. See United States v. Walker, 68 F.3d 931 (5th Cir. 1996) and United States v. Acklen, 47 F.3d 739, 742 (5th Cir. 1995).
To the extent Akin argues the district court misapplied the sentencing guidelines when it sentenced him under the money laundering guidelines his claim is without merit. The district court properly followed the guidelines' architectural plan, grouped the related offenses and determined which had a greater offense level. Section 2S1.1 is the guideline for money laundering under 18 U.S.C. § 1956(a)(1)(A)(i). Section 2S1.1 has a base offense level of 23. Applying the money laundering loss figure of $328,855.15, the offense level increased by 2 levels to 25. Section 2F1.1 is the guideline for filing false claims and mail fraud under 18 U.S.C. § 287 and 1341, respectively. Section 2F1.1 has abase offense level of 6. Applying the fraud loss figure of $2,802,581, the offense level increased by 13 levels to 19. Accordingly, the district court properly applied the sentencing guidelines and sentenced Akin under the money laundering guideline, § 2S1.1, because that guideline produced a higher offense level of 25 when compared to the fraud guideline, § 2F1.1, offense level of 19. Where money laundering and fraud offenses can be properly grouped, the district court is required to impose the higher offense level.
See § 2S 1.11(b)(2)(B).
See § 2F1.1(b)(1)(N)
See § 3D1.3(b).
United States v. Leonard, 61 F.3d 1181, 1185 (5th Cir. 1995) (emphasis added). As a further aside, it is important to note that at sentencing the district court found the money laundering loss figure of $328,855.15, as calculated by U.S. Probation, to be appropriate and attributable to Akin. Akin argues that the district court should have used a money laundering loss figure of $46,004.15, instead of $328,855.15, (discussed infra in subsection 3). However, use of the lesser money laundering loss figure would not have changed the application of the money laundering guidelines in this case because under § 3D1.3(b), the money laundering loss figure of $46,004.15, produced an offense level of 23, which was still greater than the fraud offense guideline of 19.
To the extent Akin argues the district court misapplied the money laundering guidelines as an initial matter and should have applied the fraud guidelines because Congress and the Sentencing Commission intended the money laundering guidelines to be applied to drug trafficking and organized criminal enterprises offenses, which Akin did not commit-his argument is without merit because Akin's conduct falls directly within the language of the money laundering statute. The money laundering statute under which Akin was convicted on multiple counts, 18 U.S.C. § 1956(a)(1)(A)(i), criminalizes racketeering conduct where the proceeds of a specified unlawful activity are used to promote the carrying on of the specified unlawful activity. The money laundering statute, subsequently, defines "specified unlawful activity" to include mail fraud, of which Akin was also convicted. Mail fraud in turn is a specified racketeering activity under 18 U.S.C. § 1961(1). In the instant case, the jury found Akin guilty beyond a reasonable doubt of using the proceeds gained from his fraudulent billing and his mail fraud to promote the continued manufacturing, sale and billing of more wheelchair cushions. As initially stated, Akin's conduct falls directly within the language of the money laundering statute.
Docket entry no. 206 at 41-2.
To the extent Akin argues the district court should have, as an initial matter, applied the fraud guidelines and not the money laundering guidelines because fraud was the "essence" of his offenses and his crimes fell outside the "heartland" of the money laundering statute, his claim is without merit. Although Akin cites United States v. Hemmingson in support of his proposition that his is an "atypical" case falling outside of the heartland of money laundering, his arguments ignore the salient aspect of the case. In Hemmingson, the district court applied the fraud guidelines in lieu of the more severe money laundering guidelines because the district court exercised its discretion to grant an "outside of the heartland" downward departure. By exercising its discretion, the district court's actions comported with the prevailing case law in this circuit which "interpret[s] the heartland analysis [to be] a permissive basis for exercising discretion to apply a downward departure, rather than a component of the initial selection of the applicable guideline." Because of this prevailing case law, the only argument Akin could have raised on direct appeal is that the district court abused its discretion in refusing to grant him a heartland downward departure. Such an argument, however, would have been foreclosed and un-reviewable to Akin on direct appeal because the appellate court only reviews a district court's refusal to grant a departure "when the district court based its decision upon an erroneous belief that it lacked the authority to depart and the record indicates the district court held such an erroneous belief." A thorough review of the January 25, 2000, sentencing hearing, shows that the district court entertained Akin's request for a heartland departure. The judge's remarks at the hearing and at Akin's sentencing on February 9, 2000, do not suggest that the district court believed it lacked authority to depart. Instead, the court evaluated the facts of this case, adopted the pre-sentence report, determined that the facts of the case fell within the heartland of the money laundering guideline, and thus, declined to depart. Undoubtedly, the district court understood it had the authority to depart but determined Akin's case did not warrant a heartland departure.
157 F.3d 347 (5th Cir. 1998).
United States v. Martinez, 263 F.2d 436, 440 (5th Cir. 2001) ( citing United States v. McClatchy, 249 F.3d 348, 359-60 (5th Cir. 2001); United States v. Wilson, 249 F.3d 366, 379-80 (5th Cir. 2000); United States v. Dadi, 235 F3.d 945, 954-55 (5th Cir. 2000); United States v. Davis, 226 F.3d 346, 359 (5th Cir. 2000); United States v. Hemmingson, 157 F.3d 347, 360 (5th Cir. 1998); United States v. Leonard, 61 F.3d 1181, 1185 (5th Cir. 1995); and United States v. Willey, 57 F.3d 1374, 1391-92 (5th Cir. 1995)).
United Slates v. Valencia-Gonzales, 172 F.3d 344, 346 (5th Cir. 1999) (internal quotations omitted).
I submit Akin's sentence under the money laundering guidelines was not imposed in violation of the Constitution or the laws of the United States. Accordingly, his claim that the district court should have sentenced him under the fraud guidelines and not under the money laundering guidelines does not warrant § 2255 relief and should be denied.
3. Ineffective Assistance of Counsel Claim
Akin maintains his appellate counsel rendered ineffective assistance because he failed on direct appeal to challenge Akin's 87 month sentence. Specifically, Akin asserts that his counsel on direct appeal should have argued that the district court erred when computing the money laundering loss figure attributable to Akin under guideline § 2S1.l(b)(2).
In response to the charge of ineffective assistance of counsel, Akin's appellate counsel, a former Assistant United States Attorney and 30-year legal practitioner, submitted an affidavit claiming his strategic decision regarding which claims to pursue was influenced in part by his client's specific instructions "to only raise issues that would result in a reversal of [Akin's] conviction on appeal and nothing less," and that he elected not to raise the money laundering loss issue because trial counsel relied solely on his written objections to the PSR and failed to properly develop the record when he failed to obtain a rationale for the court's ruling. Akin conversely argues that he has no legal training and relied on his attorney 100% and that he only "instructed [his attorney] to explore and expound upon any and all issues which could benefit me and my Appeal of my Conviction." Neither parties' statements, however, shed light on whether Akin's appellate counsel rendered ineffective assistance by making the strategic choices he made. Thus, I turn to the record and review Akin's appellate counsel's actions in light of Strickland v. Washington.
Docket entry no. 210, Exhibit 1.
Id.
Docket entry no. 213, Exhibit 3.
466 U.S. 668, 687(1984).
In Strickland v. Washington, the Supreme Court announced the two pronged constitutional standard for determining whether a criminal defendant has been denied the effective assistance of counsel, as guaranteed by the Sixth Amendment. It stated:
First, the defendant must show that counsel's performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as the "counsel" guaranteed by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel's errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable.
Id
In summary, the movant must establish both deficient performance and prejudice before he is entitled to relief.
See Villafuerte v. Stewart, 111 F.3d 616 (9th Cir. 1997).
The standard for effective assistance of counsel is the same for appellate counsel as it is for a trial lawyer. However, in the context of appellate representation it is difficult to demonstrate that counsel was incompetent, given the strong presumption that counsel's representation was professionally reasonable, Petitioner "carries the burden of proof . . . and must overcome a strong presumption that the conduct of his [appellate] counsel falls within a wide range of reasonable professional assistance." "Generally, only when ignored issues are clearly stronger than those presented, will the presumption of effective assistance of counsel be overcome." To satisfy the prejudice prong of Strickland, with respect to a claim that his attorney failed to brief an issue on direct appeal, the movant must show with reasonable probability that had his attorney briefed the issue the appeal would have had a different outcome. The Strickland court defined a reasonable probability as "a probability sufficient to undermine confidence in the outcome."
Smith v. Robbins, 528 U.S. 259, 288 (2000).
Crockett v. McCotter, 796 F.2d 787, 791 (5th Cir. 1986).
Gray v. Greer, 800 F.2d 644, 646 (7th Cir. 1986), quoted in Smith, 538 U.S. at 288.
United States v. Davolina, 262 F.3d 472 (5th Cir. 2001).
Id
A review of the trial record and appellate record reveals Akin's appellate counsel raised substantial meritorious issues on direct appeal in keeping with the well-settled principle that only those arguments that have the best chance of success should be urged. The Fifth Circuit acknowledged this practice in Wicker v. McCotte when it observed, "[t]he fact that counsel did not argue every possible point on appeal . . . represents the kind of strategy that able counsel pursue and appellate courts appreciate." Which issues to urge on appeal is a decision that is well within the wide range of professional judgement permitted appellate counsel. In keeping with this principle, and exercising his professional judgment, Akin's appellate counsel raised several meritorious issues on direct appeal — he argued the indictment should have been dismissed because the basis for the charges against Akin was a vague and indefinite Medicare claims code; that the cumulative error of the district court's admission of certain lay testimony, denial of Akin's motion to suppress, and refusal of Akin's proposed jury instructions mandated reversing Akin's conviction; and that Akin's sentence violated Apprendi v. New Jersey. Consequently, Akin's counsel made a strategic decision to raise the foregoing issues, and by all accounts it appears he did not render ineffective assistance. Nonetheless, the question remains: did he fall short of the professional mark by failing to challenge the district court's finding that he laundered $ 328,855.15 in funds.
783 F.2d 487, 497 (5th Cir. 1985).
120 S.Ct. 2348 (2000).
Docket entry no. 206 at 31
Akin asserts that his money laundering sentence must be vacated because his total offense level was erroneously based upon the improperly calculated money laundering loss figure of $328,855.15. Although the government must prove all elements of a criminal offense beyond a reasonable doubt, findings of fact for sentencing purposes need only be proven by the lower "preponderance of the evidence" standard. Moreover, a district court's valuation of funds under § 2S1. l(b) is a determination of fact reviewed for clear error.
U.S.S.G. § 6A1.3, p.s., cooment; United States v. Huskey, 137 F.3d 283, 291 (5th Cir. 1998)
United States v. Hull, 160 F.3d 265, 268 (5th Cir. 1998).
In the instant case, Akin's base level was increased by 2 to level 25 because the value of the funds laundered exceeded $200,000. Under criminal history category one, and adding a four level role enhancement, his offense level scored at 29 which carries a sentencing range of 87 to 108 months. The district court sentenced Akin to 87 months.
U.S.S.G. § 2S1.1(b)(2)(C) (1998).
At issue is whether the district court clearly erred when it calculated the money laundering loss figure. The district court accepted the PSR's determination that Akin had laundered $328,855.15. This figure was based on a Bio Tex Income Statement dated May 31, 1993, which was found at Akin's house during the execution of the search warrant. The income statement indicated that Bio Tex's net sales for the first five months of 1993 were $708,148.49. The document further states that out of that amount, $92,749.88 was spent for goods sold, and $236,105.27 was spent on operating expenses, e.g. salaries, pay roll taxes, advertising, traveling expenses, rents etc. This indicated, according to the Government, that during a mere five months of a three year conspiracy, Akin spent a minimum of $328,855.15 to promote the carrying on of his underlying criminal offenses. Akin argues, as he did at the sentencing hearing: (1) that he should only be held accountable for $46,004.15, the specific sum alleged in the indictment and proven by the Government to promote the manufacturing, marketing and sale of the cushion, (2) that the Government failed to prove beyond a reasonable doubt how the $328,855.15 was spent, and (3) more specifically, the $328,855.15 figure included expenditures unrelated to the illegal activity or, stated another way, it included expenditures that did not promote Akin's illegal activity.
Trial Exhibit 29, see also Docket entry no. 146 at Exhibit B.
At sentencing and in support of his assertion that the $328,855.15 money laundering loss figure included legitimate expenditures for the promotion of other products sold by Bio Tex, Akin presented the testimony of Vivian Shelly, the wife of co-conspirator Randy Shelly, Special Agent Dick Barham and Special Agent Tim Lester. While Akin presented these witnesses in his defense, their testimony demonstrates that the Government met the lesser burden of proving by a preponderance of the evidence that Akin laundered at least $328,855.15.
As noted in footnote 9 supra, Akin and Randy Shelly owned "Bio Tex Ltd.," which manufactured the wheelchair cushion. Randy Shelly pled guilty and was convicted of fraud in connection with the wheelchair cushion in the Northern District of Texas, Dallas Division.
Vivian Shelly testified that she personally prepared various Bio Tex income statements, In particular she claimed to have prepared the May 31, 1993, Bio Tex Income Statement on an accrual basis, and she testified that the $236,000 was partly an accrual figure and that Bio Tex sold other products than the cushion, e.g. disposable linens, thermal blankets, and foot orthotics. She claimed Randy Shelly signed all the Bio Tex checks and that Akin never directed the expenditure of any Bio Tex money. She further testified that only a "small portion" of the $92,000 "freight in" costs was attributable to the wheelchair cushions. When directly questioned, however, Vivian Shelly could neither elaborate nor remember how much money was specifically spent for any particular product during any time period of the conspiracy.
1 Sentencing TR 64-68.
Id. at 67.
Id
Id. at 71.
Special Agent Barham testified that he began an investigation into Bio Tex's wheelchair cushion in 1993. He made specifically clear that he had not been involved in the money laundering aspects of the case and he stated he had no knowledge concerning what portion of the $328,855.15 figure was used to promote the wheelchair cushion. Although he acknowledged Bio Tex appeared to be in the business of selling other products such as disposable sheets and hand splints in addition to the wheelchair because searches had recovered pamphlets for these other products, his personal investigation indicated that no sales of those products had taken place in the central Texas area. Additionally, he testified that the sales witnesses he had interviewed indicated they only sold the wheelchair cushion, and they never mentioned having sold any of the other Bio Tex products.
Id. at 8 22.
Id. at 9-16.
Id at 16 24-5.
Special Agent Lester testified he was responsible for the money laundering investigation against Akin. His investigation revealed that Akin was personally responsible for over $500,000 in sales of Bio Tex wheelchair cushions, and his deposit analysis revealed that the Medicare payments Akin received for these cushions was funneled or deposited back into his business to promote further sales of the cushions, and pay for other business expenses such as commissions, freight charges, office rent, and employee and officers' salaries and commissions. All was done to promote further sales of the wheelchair cushion. Both Barham and Lester also testified to the relevant conduct the district court could have considered when sentencing Akin.
Id. at 39.
Id. at 40-1.
Having heard and reviewed the testimonial and documentary evidence regarding Akin's filing of false Medicare claim forms between 1991 and 1993, his recruitment of others to participate in his scheme to bilk Medicare, the benefits he derived from his criminal activities and those of his co-defendants, and his using the fraudulent proceeds to promote his illegal activity, the district court found Akin's objections unpersuasive and accepted the PSR's determination that Akin had laundered $328,855.15. The district court's finding was neither unreasonable nor, based on the record, clearly erroneous. Accordingly, Akin's appellate counsel did not render ineffective assistance by not challenging the district court's computation of the money laundering loss figure.
Assuming arguendo, however, that appellate counsel's performance was deficient, Akin must still show that the deficient performance prejudiced his case. Application of the lesser money laundering loss figure would have changed Akin's base offense level to 23 under § 2S1.1. A four level increase for his role in the offense would have resulted in an adjusted offense level of 27, which under criminal history level one, carries a sentencing range of 70 to 87 months. Akin was sentenced to S7 months-a sentence still within the maximum permissible guideline sentence of offense level 27. Therefore, any alleged error did not result in a specific, demonstrable increase in Akin's sentencing, and, as a result, Akin has suffered no prejudice because of it. Insofar as Akin maintains that because the district court sentenced Akin to the low end of the 87 — 108-month guideline range, ("it is reasonable to infer that given Dr. Akin's age and lack of prior criminal record the district court would have sentenced him to the lowest end of the reduced guideline range-or 70 months-17 months lower than the sentence actually imposed,") this assertion is purely speculative and premised on nothing more than conjecture. Akin's speculations about the sentencing phase of his case are insufficient to show prejudice or that there was a reasonable probability that the outcome would have been different.
Docket entry no, 206 at 33-4.
I submit Akin's appellate counsel did not render ineffective assistance and his claim for relief should be denied.
4. Request to seek a § 5K2.0 Departure
Insofar as Akin asserts he should be able to seek a § 5K2.0 downward departure based on the disparity of his sentence compared to the sentences of his co-defendants, his claim is procedurally barred because he did not raise said claim on direct appeal. A sentencing court's technical application of the federal sentencing guidelines does not give rise to a constitutional or jurisdictional issue, and more to the point, such a sentencing error claim could have been raised on direct appeal.
United States v. Seyfert, supra.
Insofar as Akin claims his appellate counsel rendered ineffective assistance for failing to raise this claim on direct appeal, Akin's claim fails to satisfy the Strickland standard. Prejudice does not exist simply because Akin received a more severe sentence for his crimes than his co-defendants. Akin's co-defendants received § 5K1.1 substantial assistant departures. The purpose of substantial assistance departure is to provide a lower sentence to a defendant who cooperates. Akin, unlike his co-defendants, insisted on his innocence and elected to have his case tried by a jury which found him guilty on all counts. Accordingly, the trial court sentenced Akin consistent with the guidelines. Now Akin argues he should be able to seek a § 5K2.0 departure. The Fifth Circuit has held, the guidelines themselves do not require equalization of co-defendants' sentences. Moreover, disparity of co-defendants' sentences cannot be deemed an aggravating or mitigating circumstance under § 5K2.0, and thus, should never constitute a permissible basis for departure from the guidelines' sentencing range. 5. Need for an Evidentiary Hearing
See, e.g., United States v. Pierce, 893 F.2d 669, 678 (5th Cir. 1990); and United States v. Boyd, 885 F.2d 246, 249 (5th Cir. 1989).
Sec United States v. Lawrence, 179 F.3d 343, 351 (5th Cir. 1999).
An evidentiary hearing is unnecessary, when, as here, Akin's § 2255 motion for relief fails to present claims that are either contrary to law or plainly refuted by the record.
See United States v. Bartholomew, 974 F.2d 39, 41 (5th Cir. 1992); and United States v. Plewniak, 947 F.2d 1284, 1290 (5th Cir. 1991).
IV. Recommendation
It is the recommendation of the Magistrate Judge that Akin's Motion to Vacate, Set Aside, or Correct his Sentence pursuant to Title 28 U.S.C. § 2255 be, in all respects, DENIED.Instructions For Service and Notice of Right To Appeal/Object
The United States District Clerk shall serve a copy of this Memorandum and Recommendation on each and every party either (1) by certified mail, return receipt requested, or (2) by facsimile if authorization to do so is on file with the Clerk.Pursuant to Title 28 U.S.C. § 636(b)(1), and Rule 4(b) of the Local Rules for the Assignment of Duties to United States Magistrates (Appendix C to the Local Court Rules for the Western District of Texas), the parties are hereby notified that any party who desires to object to this report must file written objections to the Memorandum and Recommendation with the Clerk of this Court, and serve the Magistrate Judge and all parties, within ten (10) days after being served with a copy of this Memorandum and Recommendation.
United States v. Wilson, 864 F.2d 1219, 1221 (5th Cir. 1989), cert. denied, 492 U.S. 918 (1989).
A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. A party's failure to file written objections to the proposed factual findings, legal conclusions, and recommendations contained in this report shall bar the party from a de novo determination by the District Court.
Battle v. U.S. Parole Commission, 834 F.2d 419, 421 (5th Cir. 1987).
Thomas v. Arn, 474 U.S. 140 150-155 (1985); United States v. Raddatz, 447 U.S. 667, 673-76(1980); 28 U.S.C.
Additionally, any failure to file written objections to the proposed findings, conclusions, and recommendations contained in this report within ten (10) days after being served, shall bar the aggrieved party from appealing the factual findings and legal conclusions that are accepted or adopted by the District Court, except on grounds of plain error.
Douglas v. United Services Automobile Association, 79 F.3d 1415, 1428-29 (5th Cir. 1996).