United States District Court, W.D. Wisconsin
BARBARA B. CRABB, DISTRICT JUDGE
Terrance Roberts is a federal prisoner who has filed a
petition for a writ of habeas corpus under 28 U.S.C. §
2241 to challenge convictions from the year 2000 for money
laundering and conspiracy to commit money laundering in
connection with a prostitution ring, in violation of 18
U.S.C. § 1956. Petitioner's claim is that his
convictions are invalid under United States v.
Santos, 553 U.S. 507 (2008), because both his indictment
and the instructions the jury received are inconsistent with
the Supreme Court's interpretation in that case of §
1956, a statute that applies to "proceeds" of an
unlawful activity. In particular, petitioner says that the
Court defined "proceeds" to mean "profits,
" but he was charged and convicted under a theory that
"proceeds" means "receipts." In other
words, he was charged and convicted under a theory that
"proceeds" means gross income rather than net
income. The court has screened the petition and directed the
government to respond. Dkt. #4.
government seeks dismissal of the petition on both procedural
and substantive grounds. First, the government says that
petitioner cannot obtain relief under § 2241 because he
should have raised this claim on direct appeal of his
conviction or in a motion brought under 28 U.S.C. §
2255. Second, the government says that neither the Supreme
Court nor the Court of Appeals for the Seventh Circuit has
held that Santos applies retroactively. Third, the
government says that "Santos is not applicable
to the concealment aspect of money laundering, " so it
does not affect petitioner's conspiracy conviction. Dkt.
#11 at 10. Fourth, the government says that "all of the
money [petitioner received] was in fact net profits, "
so the convictions are consistent with Santos.
the government mentions in passing that petitioner
"fails to explain why he waited until August 1, 2016,
approximately eight years after Santos was decided,
to raise this claim, " dkt. #11, at 6-7, the government
does not argue that the petition should be dismissed as
untimely. Morales v. Bezy, 499 F.3d 668, 672 (7th
Cir. 2007)("[T]here is no statute of limitations
applicable to a federal prisoner's filing a section 2241
reviewed the government's response, I am staying a
decision on the petition and directing the government to file
an amended response developing its arguments more clearly.
government's first argument relates to the rule that a
federal prisoner may not file a habeas petition under §
2241 unless "the remedy by motion [under § 2255] is
inadequate or ineffective to test the legality of his
detention." 28 U.S.C. § 2255(e). To satisfy §
2255(e), a prisoner must show several things: (1) he is
seeking correction of a fundamental defect in his conviction
or sentence (such as a claim for actual innocence); (2) his
petition is based on a rule of statutory law not yet
established at the time he filed his first § 2255
motion; (3) he is barred from bringing a successive §
2255 motion; and (4) he either raised the issue on direct
appeal or in a § 2255 motion or the issue was foreclosed
by controlling precedent at the time. Light v.
Caraway, 761 F.3d 809, 812-13 (7th Cir. 2014); Hill
v. Werlinger, 695 F.3d 644, 648 (7th Cir. 2012);
Morales, 499 F.3d at 672; United States v.
Prevatte, 300 F.3d 792, 799-800 (7th Cir. 2002); In
re Davenport, 147 F.3d 605, 610-11 (7th Cir. 1998).
See also Webster v. Caraway, 761 F.3d 764, 767 (7th
Cir. 2014) ("When a change of law, retroactively
applicable, shows that the prisoner did not commit a crime or
has received an illegally high sentence, § 2241 is
available if it otherwise would be impossible to implement
the Supreme Court's intervening decision.").
government does not argue that petitioner has failed to meet
any of the first three requirements. Instead, the government
states with little explanation that petitioner's claim
was "not foreclosed to him on his direct appeal or
§ 2255 petition." Dkt. #11 at 8. It is undisputed
that petitioner has not raised this issue before, but that is
not the end of the matter. The government simply ignores
United States v. Simmons, 154 F.3d 765, 770 (8th
Cir. 1998), a case cited in petitioner's opening brief
and the court's screening order. (Eighth Circuit law is
relevant because that is where petitioner was convicted and
Simmons, 154 F.3d at 770, the court considered
whether the word "proceeds" means "gross
revenues" or "net profits" and it concluded
that "the better view is the one that defines proceeds
as the gross receipts of the illegal activity." Although
Simmons involved an interpretation of 18 U.S.C.
§ 1963 (the Racketeer Influenced and Corruption
Organizations Act) rather than 18 U.S.C. § 1956, the
Court of Appeals for the Eighth Circuit has stated that
Simmons stands for the more general proposition that
"'proceeds' includes anything that is the gross
receipt of illegal activity." United States v.
Williams, 605 F.3d 556, 567 (8th Cir. 2010). See
also Prost v. Anderson, 636 F.3d 578, 595 (10th Cir.
2011) ("[T]he Eighth Circuit appears to agree with
[petitioner] that its RICO precedent did preclude the reading
of the money laundering statute later adopted in
Santos."). The government should have addressed
the question whether Simmons barred petitioner's
of discussing Simmons, the government relied on
Blumeyer v. Walton, No. 11-CV-l 137-DRH-DGW, 2013 WL
4510160, at *7 (S.D. 111. Aug. 26, 2013), in which the court
concluded that Simmons had not foreclosed a claim
similar to petitioner's. However, as petitioner points
out, the reasoning of the court in Blumeyer was that
the Court of Appeals for the Eighth Circuit decided
Simmons well after the direct appeal of the
petitioner in Blumeyer. Because Roberts was
convicted in 2000, two years after Simmons,
Blumeyer is not instructive.
footnote, the government observes that neither the Supreme
Court nor the Court of Appeals for the Seventh Circuit has
concluded that Santos applies retroactively.
However, in the absence of controlling precedent, a district
court may determine on its own whether a decision should have
retroactive effect. Krieger v. United States, 842
F.3d 490, 499 (7th Cir. 2016). If the government believes
that Santos should not apply retroactively, the
government should explain in its amended response why it
disagrees with the courts that have reached the opposite
conclusion. Wooten v. Cauley, 677 F.3d 303, 308-09
(6th Cir. 2012) ("Because the new definition of a key
phrase in the money laundering statute is a substantive
change of law and increases the government's burden of
proof, we agree with the Fourth, Fifth, and Eleventh Circuits
in holding that Santos is retroactive.").
government's next argument consists of one paragraph that
is not easy to follow:
The evidence presented at trial supports the fact that an
extensive conspiracy existed, to both transport and
prostitute women and young girls, and to launder money. The
conspiracy to launder money had dual purposes, facilitation
and proceeds. The evidence presented at trial clearly
supports the concealment object of the money laundering
conspiracy charged in Count Forty-four. Therefore, as
Santos is not applicable to the concealment aspect
of money laundering, Petitioner's claim as to Count
Forty-Four should fail.
Dkt. #11 at 10.
government provides no further explanation of this argument,
but it seems to be arguing that petitioner's conspiracy
conviction relied on evidence that petitioner concealed the
proceeds of his unlawful activity and that Santos
does not apply in that context. The problem is that the
government neither includes any citations to the record
showing that the conspiracy conviction relied on a
concealment theory nor provides any authority or argument for
the view that Santos would not apply in that
context. United States v. Hosseini, 679 F.3d 544,
548 (7th Cir. 2012) ("In a traditional money-laundering
case-where the indictment alleges that the defendant engaged
in specified financial transactions for the purpose of
concealing the proceeds of criminal activity or avoiding a
state or federal reporting requirement (as opposed to
promoting the underlying crime)-must the government prove
that the laundered 'proceeds' are the ...