United States v. Mirando

UNITED STATES OF AMERICA, v. JOSEPH MIRANDO, Defendant.

14-CR-221 (ADS)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

May 20, 2020

MEMORANDUM OF DECISION & ORDER

APPEARANCES:

United States Attorney's Office, Eastern District of New York

Attorneys for the Government

271 Cadman Plaza East

Brooklyn, NY 11201

By: Artie McConnell, Assistant United States Attorney,

610 Federal Plaza

Central Islip, NY 11722

By:

Allen Lee Bode, Assistant United States Attorney,

Diane C. Leonardo-Beckmann, Assistant United States Attorney.

Sally J.M. Butler, Esq.,

Attorney for the Defendant

42-40 Bell Blvd, Suite 302

Bayside, NY 11361

SPATT, District Judge:

On January 7, 2016, defendant Joseph Mirando (the "Defendant") pleaded guilty, pursuant to a written plea agreement, to conspiracy to commit bank fraud through a large-scale mortgage fraud perpetrated by principals Aaron Wider ("Wider") and John Petition ("Petition"). Specifically, the Defendant admitted that he provided fraudulent appraisals that artificially inflated the value of properties; were relied on by lending institutions; and ultimately were used to secure loan proceeds far in excess of the properties' true value.

On September 6, 2018, the Defendant was sentenced to 14 months' incarceration, $1,500,000 in restitution, and $1,200,000 in forfeiture. The Defendant is currently released from custody and serving a term of 3 years' supervised relief.

Presently before the Court is a petition by the Defendant requesting that the Court, pursuant to 28 U.S.C. § 2255 ("Section 2255"), a writ of coram nobis, or the Court's general equity jurisdiction, vacate and modify the judgment of forfeiture ordered against him (the "Forfeiture Order"). For the following reasons, the Court orders supplemental briefing regarding the Defendant's coram nobis petition, and denies the petition in all other respects.

I. DISCUSSION

A. AS TO SECTION 2255.

28 U.S.C. § 2255(a) applies only to "[a] prisoner in custody . . . claiming the right to be released." Id. (emphasis added). It is well settled that Section 2255 generally "may not be used to bring collateral challenges addressed solely to noncustodial punishments" like the forfeiture order. Kaminski v. United States, 339 F.3d 84, 87 (2d Cir. 2003). However, the Second Circuit has "left open the question whether such fines and orders 'could ever be such a restraint on the liberty of a petitioner as to amount to custody.'" United States v. Rutigliano, 887 F.3d 98, 105 (2d Cir. 2018) (quoting Kaminski, 339 F.3d at 86-87).

The Defendant argues that the Forfeiture Order constitutes a restraint on his liberty in light of the Supreme Court's ruling in Honeycutt v. United States, 137 S.Ct. 1626, 198 L.Ed 2d 73 (2017). On June 5, 2017, before the Defendant was sentenced, the Supreme Court held that 21 U.S.C. § 853(a)(1), which mandates forfeiture of "any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of" certain drug crimes, does not permit the application of joint and several liability to forfeiture by co-conspirators who neverpossessed the tainted proceeds of their crimes. Honeycutt, 137 S.Ct. at 1635. Thus, the Defendant believes that his $1.2 million forfeiture judgment is erroneous, because he only received between $60,000 and $80,000 for his role in the conspiracy.

Putting aside the merits of the Defendant's interpretation of Honeycutt, he has failed to articulate any aspect of the Forfeiture Order that might impinge on his liberty. The Second Circuit has "observed" that situations in which a fine will trigger jurisdiction under Section 2255 "will likely be 'rare'" and depends on the "'terms' of [the fine], as well as the 'amount.'" Rutigliano, 887 F.3d at 106 (quoting Gonzalez v. United States, 792 F.3d 232, 237 (2d Cir. 2015)). In Kaminski v. United States, the Second Circuit found a $21,180 restitution order not to equate to custodial punishment reviewable under Section 2255; focused on the terms of payment, which were there limited "on a monthly basis [to] the greater of ten percent of [the defendant's] monthly income or $100," and concluded that those terms did "not come close to" creating a sufficiently severe restraint on liberty to equate to custody. 339 F.3d at 87. "Following Kaminski, district courts in this circuit have dismissed § 2255 challenges to even multi-million-dollar restitution orders based on similar payment terms." Rutigliano, 887 F.3d at 106.

In light of this authority, neither the amount nor payment terms of the Forfeiture Order are problematic. Although $1,200,000 is a large sum of money, it is far smaller than amounts expressly approved by the Second Circuit. Id. (citing fines of $9,301,538 and $6,984,000). As in Kaminski, the Forfeiture Order sets the maximum payments at 10% of the Defendant's gross monthly income. Moreover, the Defendant cites no other restraints on his liberty in the Forfeiture Order that may equate to custody, such as "physical presence at particular times and locations." Id. at 106.

Therefore, the Court finds that it lacks jurisdiction to entertain a motion for relief under Section 2255, regardless of the applicability of Honeycutt. Indeed, "courts have universallyrejected the argument that Honeycutt can form the basis to disturb a final forfeiture order on a Section 2255 petition." Lasher v. United States, No. 12-cr-868, 2018 WL 3979596, at *9 (S.D.N.Y. Aug. 20, 2018) (collecting cases).

B. AS TO CORAM NOBIS RELIEF.

Coram nobis relief is "an 'extraordinary remedy' available only in rare cases." Kovacs v. United States, 744 F.3d 44, 54 (2d Cir. 2014) (quoting United States v. Morgan, 346 U.S. 502, 511, 74 S.Ct. 247, 252, 98 L.Ed. 248 (1954)). Its application is "strictly limited to those cases in which errors of the most fundamental character have rendered the proceeding itself irregular and invalid." United States v. Foont, 93 F.3d 76, 78 (2d Cir. 1996). The writ is "essentially a remedy of last resort" because unlike habeas relief, the petitioner is no longer in custody. Fleming v. United States, 146 F.3d 88, 89-90 (2d Cir. 1998) (per curiam); see also United States v. Mandanici, 205 F.3d 519, 532 (2d Cir. 2000) (Kearse, J., concurring) ("[T]he granting of coram nobis normally results in the expungement of the conviction, with no possibility of further proceedings to determine whether the petitioner was guilty of the offense charged."). "The harm to the petitioner is therefore much less and, accordingly, courts are more reluctant to grant relief." Moskowitz v. United States, 64 F.Supp.3d 574, 577 (S.D.N.Y. 2014) (collecting cases).

In light of this high bar, a petitioner seeking the grant of coram nobis must make three showings: (1) "there are circumstances compelling such action to achieve justice"; (2) "sound reasons exist for failure to seek appropriate earlier relief"; and (3) "the Petitioner continues to suffer legal consequences from his conviction that may be remedied by granting of the writ." Kovacs, 744 F.3d at 49. The Court presumes that the prior proceedings were correct, and "the burden rests on the accused to show otherwise." Morgan, 346 U.S. at 512, 74 S.Ct. 247.

The Court finds that the Defendant satisfied the latter two elements, but that further briefing is required to determine whether sufficiently compelling circumstances exist to issue a writ of coram nobis.

a. As to Whether There Are Circumstances Compelling Such Action to Achieve Justice.

The Defendant presents two grounds for vacating the Forfeiture Order: (1) the alleged violation of his Sixth Amendment right to effective assistance of counsel; and (2) the excessiveness of the Forfeiture Order allegedly in contravention of the Eighth Amendment. The Court finds that the Defendant failed to establish a constitutional violation regarding the latter theory, but that the parties must furnish additional briefing in order to determine whether the Defendant presented a cognizable claim for relief under the former theory.

i. As to the Defendant's Ineffective Assistance of Counsel Claim.

"[I]neffective assistance of counsel is one ground for granting a writ of coram nobis." See Kovacs, 744 F.3d at 49. A petitioner seeking coram nobis based on allegedly ineffective assistance of counsel bears the "heavy burden" of establishing both "(1) that counsel's performance was so unreasonable under prevailing professional norms that 'counsel was not functioning as the 'counsel' guaranteed the defendant by the Sixth Amendment' and (2) that counsel's ineffectiveness prejudiced the defendant such that 'there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different.'" United States v. Gaskin, 364 F.3d 438, 468 (2d Cir. 2004) (quoting Strickland v. Washington, 466 U.S. 668, 694 (1984)).

Here, the Supreme Court decided Honeycutt between the Defendant's plea and his sentencing. Thus, The Defendant argues he suffered from ineffective assistance of counsel, because defense counsel failed to inform him of Honeycutt; failed to raise objections to theforfeiture amount at the time of his sentencing; and never appealed the forfeiture amount. In response, the Government argues that defense counsel could not have been ineffective because the Defendant agreed to the forfeiture amount in his plea agreement, and could not have predicted Honeycutt's applicability to the statute governing the Defendant's forfeiture. In the Court's view, neither party has adequately addressed the relevant issues, requiring further briefing.

"Honeycutt narrowly addresse[d] the issue of whether joint and several liability is available for forfeiture for co-conspirators in certain drug crimes under 21 U.S.C. § 853(a)(1)." Lasher, 2018 WL 3979596, at *10. The Forfeiture Order here is based on a different statutory provision: 18 U.S.C. § 982(a)(2)(A). The Second Circuit has still not yet ruled on Honeycutt's applicability to other criminal forfeiture statute...