Shin v. United States

ORDER DENYING DEFENDANT'S SECOND CORAM NOBIS PETITION

Susan Oki Mollway, United States District Judge

I. INTRODUCTION.

In 2004, with a plea agreement, Defendant Patrick Shin entered a plea of guilty to having made a false statement to the Government in violation of 18 U.S.C. § 1001. Shin's conviction arose out of a proposal his nephew's company, JHL Construction, Inc., submitted for work on a United States Navy contract. At the plea hearing, Shin admitted that he had used fake estimates from JHL's subcontractors to inflate JHL's estimated costs and raise the amount the Navy would pay JHL. Shin was sentenced in 2006 to three years of probation, which included twelve days of intermittent confinement, and to a $100, 000 fine. Shin now seeks to vacate his conviction more than fifteen years after judgment was entered. Having long since paid his fine and completed his term of probation and intermittent confinement, he is no longer in custody and cannot proceed under 28 U.S.C.

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§ 2255. Instead, for the second time, he seeks a common law writ of coram nobis.

Shin maintains that his conviction should be vacated because of a change in the law. After Shin was sentenced, the Ninth Circuit, departing from its prior precedent, indicated that, to secure a conviction under § 1001, the Government had to prove that a defendant knew that his conduct was unlawful. Shin says that, because he was not (and allegedly could not have been) aware of that element when he entered his guilty plea in 2004, his guilty plea was not “voluntary in [the] constitutional sense.” See Henderson v. Morgan, 426 U.S. 637, 645 (1976).

A writ of coram nobis, however, is only available to correct errors of the most fundamental character. Even if Shin was unaware of one of the elements of the charge against him, his guilty plea was not marred by fundamental error because it is not reasonably probable that he would have maintained a not guilty plea if only he had known about that element. Shin admitted having intentionally submitted falsified documents to the Government. Quite apart from whether it is a common understanding that it is illegal to do such a thing, Shin, an experienced Government contractor, would not likely have risked going to trial to see whether the Government could establish beyond a reasonable doubt that he knew his conduct was unlawful. Moreover, Shin fails to meet his burden of showing that there

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are valid reasons for his delay in making the argument he now advances. His petition for a writ of coram nobis is denied.

II. BACKGROUND.

A. The False Statements.

The basic facts surrounding Shin's conviction are not disputed. At all times material to his conviction, Shin was authorized to act as an agent on behalf of JHL Construction, Inc., a general contracting company owned by Shin's nephew, James Lee. Shin has repeatedly acknowledged that, during this time period, he was an experienced contractor who was very familiar with the process of applying for and securing federal contracts, particularly contracts involving work at Pearl Harbor. See, e.g., ECF No. 209, PageID # 1811-13.^[1] Shin estimated that, by 2003, he had completed “way over [one] hundred projects” for the Government. Id. at 1869. Shin knew that he had to be truthful and honest in his dealings with the Navy, and that he had to provide the Navy with accurate information. Id. at 1869.

In 2003, the Navy asked JHL to submit a proposal for work repairing Pump # 2, Drydock # 4, at Pearl Harbor Naval Shipyard. It appears that JHL had previously submitted a proposal for repairing another pump (Pump # 1) at the same

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drydock. After JHL submitted the proposal for Pump # 2, Wesley Choy, a Government official assigned to review the proposal, felt that it was “questionable.” See ECF No. 100-1, PageID # 421; see also ECF No. 209, PageID # 1881-82. The price that JHL proposed exceeded Choy's own estimate of the costs of the project. See ECF No. 100-1, PageID # 421. Choy could not even begin to evaluate JHL's estimate of the costs, because, in the proposal “many costs were aggregated, ” and Choy lacked “data supporting the subcontractor costs.” See Id. Choy therefore asked Annette Ching, the Government's contract administrator, to obtain subcontractor quotes to substantiate JHL's proposal. See id.; see also ECF No. 209, PageID # 1882. Specifically, Choy asked for the prices that JHL's subcontractors had submitted for the work on Pump #1, because Pump #2 would involve the “same scope of work.” ECF No. 209, PageID # 1882. Shin followed up with a reduced cost estimate, but the new proposal still did not include subcontractor quotes. ECF No. 100-1, PageID # 421. After reviewing the revised proposal, Choy again asked Ching to get the “actual quotes” for JHL's subcontractors' work. Id. at 422.

Upon receiving Ching's request, Shin called two of JHL's subcontractors, Conhagen and HSI, and asked them to submit falsely inflated quotes. Conhagen agreed. HSI, however, called the FBI. See ECF No. 64, ¶ 15-17; ECF No. 91, PageID # 263-66.

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Because HSI did not respond immediately, Shin decided to produce an altered quote himself. See ECF No. 209, PageID # 1887-1894. Shin took a copy of the quote HSI had submitted for work on Pump #1 ($114, 733) and ran that through the copy machine with a piece of white paper covering the first “1” digit. Id. at 1889-90. That created a blank space, and he then placed a “3” digit that had been cut out from another sheet of paper into that space, changing the quote to $314, 733.^[2] Shin submitted that document, along with the inflated quote he had received from Conhagen, to the Navy. See ECF No. 209, PageID # 1889-1897.

B. Shin's Justification For His Conduct.

According to Shin, his intent in falsifying the quotes was not to harm the Government or unfairly increase his profits. That assertion is central to Shin's present coram nobis motion. Shin maintains that he was correcting an error by the Navy, which had put him in an impossible position by choosing the wrong contract vehicle for the work on Pump # 2, Drydock # 4.

Shin says that the Navy was using a contract process under which JHL would not have been able to cover its overhead or to earn any profit. Shin was concerned that there was not enough time for the Navy to correct its error before the fiscal year ended. Any funds not obligated by the end of the fiscal

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year would lapse, meaning that the Navy would lose the ability to use those funds, which would go back to the general United States Treasury account. Agencies could compete for those funds to be allocated to them for the next fiscal year, but the Navy would have no guarantee that it would recover the amount of the lapsed funds in a subsequent allocation. In terms of the Pump # 2 contract, the Navy was at risk of losing its funding for the work, and JHL stood to lose the chance to do any work at all on Pump # 2 if the funds lapsed. Shin claims that he submitted the altered documents to solve this “problem” and “make the numbers work.”

Shin testified that the Navy uses different categories of contracts in soliciting work. See ECF No. 209, PageID # 1813-20. One category involves an “invitation for bid” or “IFB” contract. Id. at 1814; see also Id. at 1702. Under an IFB contract, the Navy's engineers hire an outside company to design the project, and then, once the design is completed, the Navy invites contractors to bid on the project. Id. at 1814. The IFB process takes approximately two years to complete. Id.

Because that process is lengthy and cumbersome, the Navy created a different contracting vehicle that could handle smaller projects more quickly. That contracting vehicle is called “indefinite delivery, indefinite quantity, ” or “IDIQ.” Id. at 1817; see also Id. at 1702. Under an IDIQ contract, the

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Navy hires a contractor for a three-year or five-year period and can assign the contractor multiple projects during that period without soliciting competitive bids for the projects. Id. at 1817. For reasons discussed below, during the times relevant to this case, it appears that IDIQ contracts were only supposed to be used for construction contracts. See ECF No. 91, PageID # 250.

The price that contractors are able to charge under IDIQ contracts is determined by two factors: the Means Book and the contracting coefficient. See ECF No. 209, PageID # 1818. The Means Book contains estimated line-item prices for most components or costs that a contractor might incur while working on a small construction contract. See Id. at 1819. Those estimates are based off of the average national cost for an item, with an adjustment for local conditions. Id. at 1818-1821. In Hawaii, the costs listed in the Means Book are approximately 30 to 40 percent higher than the national average. Id. at 1821.

The second relevant factor is the contracting coefficient. The coefficient is a multiplier applied to prices in the Means Book to ensure that contractors can cover their overhead and earn a profit. For instance, a coefficient of 1.20, or 120 percent, means that the Navy pays a contractor 120

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percent of the price listed in the Means Book for every task the contractor completes. See Id. at 1821-22.

JHL had an IDIQ contract with the Navy with a coefficient of 1.00, or 100 percent. Id. at 822. It thus agreed to do work at the prices listed in the Means Book for Hawaii. JHL agreed to that coefficient because it believed that it could do work more cheaply than the prices listed in the Means Book. See Id. at 1820-22. That is, JHL believed that it could still “make [a] profit and [cover] overhead because [it] actually could do the work for less.” Id. at 1822.

The system assumes that an IDIQ project involves...