Wells v. United States

ORDER DENYING PETITIONER'S MOTION UNDER 28 U.S.C. § 2255

RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Before the Court is Petitioner's 58-page § 2255 Motion to Vacate, Set Aside, or Correct Sentence. Dkt. #1. Nathaniel Wells challenges the 134-month sentence imposed on him by this Court following his guilty plea for conspiracy to commit bank fraud. Id. at 2; No. 2:16-cr-0007-RSM, Dkts. #230, #232. Petitioner challenges his sentences on ten grounds, detailed below. Dkt. #1. After full consideration of the record, and for the reasons set forth below, the Court DENIES Mr. Wells's § 2255 Motion.^[1]

II. BACKGROUND

The Court generally agrees with the relevant background facts as set forth by the Government and demonstrated by court records. See Dkt. #11 at 5-14. Mr. Wells does not dispute the vast majority of this procedural background. He mainly disputes details of the financial fraud victims' injuries and whether these injuries satisfied the elements of conspiracy to commit bank fraud. The Court will attempt to focus only on those facts relied on by the Court in reaching its ruling.

On January 14, 2016, the Government filed an indictment charging Mr. Wells and two codefendants with Conspiracy to Commit Bank Fraud. No. 2:16-cr-0007-RSM, Dkt. #35. A superseding indictment was later filed adding a fourth codefendant. No. 2:16-cr-0007-RSM, Dkt. #53. On January 6, 2017, Mr. Wells pleaded guilty without the benefit of a plea agreement. No. 2:16-cr-0007-RSM, Dkt. #114.

In July, August, and September of 2017, a four-day evidentiary hearing was held to determine sentencing guideline enhancements and the amount of restitution owed. Mr. Wells submitted a memorandum with several evidentiary and legal arguments. No. 2:16-cr-0007-RSM, Dkt. #163.

Prior to sentencing, Wells moved to withdraw his guilty plea and to dismiss the indictment. No. 2:16-cr-0007-RSM, Dkt. #205.

Sentencing occurred on March 30, 2018. No. 2:16-cr-0007-RSM, Dkt. #230. The Court denied Mr. Wells's motion to withdraw his plea and to dismiss the indictment and denied his motion for reconsideration of its prior Guidelines determinations. No. 2:16-cr-0007-RSM, Dkt. #299 at 3-4. The Court restated its written Guidelines calculation-total offense level 32, Criminal History Category VI-yielding a Guidelines range of 210 to 262 months.

Case No. 2:16-cr-0007-RSM, Dkt. #299 at 3. The Court imposed a 134-month prison sentence, followed by 5 years of supervised release, and ordered $5, 816, 938.82 in restitution. No. 2:16-cr-0007-RSM, Dkt. #232 and Dkt. #299 at 22-24. This sentence was based in part on a finding of ten or more victims. The court also imposed a sentence for Wells's supervision revocation: 36 months' imprisonment with no following supervision. No. 2:16-cr-0007-RSM, Dkt. #299 at 26. This sentence was ordered to run concurrently with the sentence in his current criminal case. Id.

Mr. Wells appealed his conviction and both sentences. No. 2:16-cr-0007-RSM, Dkt. #235.

The Government later raised an issue with the factual support for the number of victims and moved for a limited remand to resolve this issue, which the Ninth Circuit granted. No. 2:16-cr-0007-RSM, Dkt. #314. On remand, new evidence was collected by the Government to support the ten-or-more-victims finding. No. 2:16-cr-0007-RSM, Dkt. #334. Mr. Wells objected to this evidence and asked for an evidentiary hearing. No. 2:16-cr-0007-RSM, Dkt. #343. The Court denied Mr. Wells' request and reaffirmed its ruling about the number of victims enhancement. No. 2:16-cr-0007-RSM, Dkt. #347.

The case went back up on appeal. Mr. Wells's direct appeal did not raise any issue about the sentence imposed for his supervised release revocation. Regarding his conviction for conspiracy to commit bank fraud, he raised the following issues:

1. The Court erred by applying the predominance-of-the-evidence and not the clear-and-convincing-evidence standard in determining the Guidelines enhancements for loss amount, relevant conduct, and leadership role;

2. The Court erred in holding that all the losses caused by the conspiracy were attributable to Wells as relevant conduct;

3. The Court erred in holding that Wells qualified for a leadership enhancement;

4. In calculating the loss amount, the Court erred in holding that Wells was liable for all losses caused by the conspiracy;

5. In calculating the loss amount under the Guidelines, the Court erred in holding Wells liable for actual and intended losses, not just actual losses;

6. The Court erred in holding that Wells's crime involved ten or more victims;

7. The Court erred in denying his motion to dismiss for lack of subject matter jurisdiction without holding a hearing to determine whether the payment processors were “financial institutions” withing the meaning of the bank-fraud statute;

8. The Court erred in denying Wells's motion to withdraw his guilty plea;

9. The Court erred in holding Wells jointly liable for the entire amount of restitution ordered; and

10. During the limited remand, the Court erred in reaffirming its ten-or-more victims finding without holding an evidentiary hearing.

United States v. Wells, 9th Cir. No. 18-30074, Dkts. #10 and #61. The Ninth Circuit rejected these arguments and affirmed Wells's conviction and sentences. United States v. Wells, 804 Fed.Appx. 515 (9th Cir. 2020).

Mr. Wells filed this instant petition on May 3, 2021. Dkt. #1. He requests an evidentiary hearing to address the merits of his claims, dismissal of the superseding indictment, resentencing, suppression of evidence, and that the Court vacate his guilty plea. Id. at 58.

III. DISCUSSION

A. Legal Standard

A motion under 28 U.S.C. § 2255 permits a federal prisoner in custody to collaterally challenge his sentence on the grounds that it was imposed in violation of the Constitution or laws of the United States, or that the Court lacked jurisdiction to impose the sentence or that the sentence exceeded the maximum authorized by law.

A petitioner seeking relief under Section 2255 must file his motion with the one-year statute of limitations set forth in § 2255(f).

A claim may not be raised in a Section 2255 motion if the defendant had a full opportunity to be heard on the claim during the trial phase and on direct appeal. See Massaro v. United States, 123 S.Ct. 1690, 1693 (2003). Where a defendant fails to raise an issue before the trial court, or presents the claim but then abandons it, and fails to include it on direct appeal, the issue is deemed “defaulted” and may not be raised under Section 2255 except under unusual circumstances. Bousley v. United States, 523 U.S. 614, 622 (1998); see also United States v. Braswell, 501 F.3d 1147, 1149 & n.1 (9th Cir. 2007). Unless the petitioner can overcome this procedural default, the Court cannot reach the merits of his claims. See Bousley, 523 U.S. at 622. To do so, the petitioner must “show both (1) ‘cause' excusing his double procedural default, and (2) ‘actual prejudice' resulting from the errors of which he complains.” United States v. Frady, 456 U.S. 152, 168 (1982).^[2] To demonstrate “cause” for procedural default, a defendant generally must show that “some objective factor external to the defense” impeded his adherence to a procedural rule. Murray, 477 U.S. at 488. See also United States v. Skurdal, 341 F.3d 921, 925 (9th Cir. 2003). The Supreme Court has held that “cause” for

failure to raise an issue exists “where a constitutional claim is so novel that its legal basis is not reasonably available to counsel.” Reed v. Ross, 468 U.S. 1, 16 (1984). The “prejudice” prong of the test requires demonstrating “not merely that the errors at . . . trial created a possibility of prejudice, but that they worked to his actual and substantial disadvantage, infecting his entire trial with error of constitutional dimensions.” Frady, 456 at 170.

B. Evidentiary Hearing

The Court finds that an evidentiary hearing is not required in this case because Mr. Wells's allegations can be refuted from the record on procedural grounds. See Dkt. #11 at 5 (citing 28 U.S.C. §2255(b); Shah v. United States, 878 F.2d 1156, 1161-62 (9th Cir. 1989)).

C. Analysis

There is no dispute that Mr. Wells meets the “custody” requirement of the statute and that this is Motion is timely under § 2255(f).

The Court has identified ten grounds/claims for relief raised in this Motion. The Government presents many overlapping arguments for why these claims must be dismissed, not all of which need to be discussed. The Government's central argument for denying relief is because Mr. Wells has not raised many of these issues on appeal-so called procedural default-and because he has failed to demonstrate actual prejudice from the alleged errors due to a central misunderstanding of the elements the Government needed to prove for the charge of conspiracy to commit bank fraud. More specifically, the Government asserts:

Except for his ineffective-assistance-of-counsel claim (Claim 4), all of Wells's current claims are based on evidence that was adduced at the presentencing evidentiary hearing, as well as prior discovery (Claims 1-3, 5-9), or else challenge the legality of the sentence imposed for his supervision revocation (Claim 10). With the exception of Wells's challenge to the Guidelines burden of proof (Claim 9) and the Guidelines enhancements for loss amount, number of victims, and leadership role (Claim 8 in part), the

remainder of Wells's current claims-Claims 1-3, 5-7, 8 in part, 10-were not raised on appeal and, except for the enhancement for possessing device-making equipment (Claim 8,