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Roberts v. Watson

United States District Court, W.D. Wisconsin

July 11, 2017

TERRANCE ROBERTS, Petititoner,
v.
TOM WATSON, Respondent.

          OPINION AND ORDER

          BARBARA B. CRABB District Judge.

         Petitioner 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 contends 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 prohibits certain financial activities involving the “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 screened the petition and directed the government to respond, dkt. #4, and then asked for supplemental briefing in an April 25, 2017 order to develop several issues, dkt. #14. In its supplemental response, the government seems to abandon all but one argument. In particular, the government says that petitioner was convicted of both “promotional” and “concealment” money laundering, that petitioner received concurrent sentences for those convictions and that Santos does not undermine the conviction for money laundering under a concealment theory, so even if the conviction for promotional money laundering is invalid, it would not affect petitioner's sentence. Although the government's objection has potential merit, the government has failed to develop its argument that Santos does not affect convictions for concealment money laundering. Accordingly, I am giving the government one last opportunity to show cause why the petition should not be granted.

         OPINION

         A. 2009 Amendments and Venue

         In the April 25, 2017 order, I asked the parties to address two new issues. First, I noted that Congress had amended the definition of “proceeds” in a 2009 amendment to the money laundering statute, 18 U.S.C. § 1956(c)(9), and I asked the parties to discuss whether the amendment has any bearing on the petition. Second, I noted that, after petitioner filed this case, he was transferred from the Federal Correctional Institution in Oxford, Wisconsin to the Federal Correctional Institution in Sandstone, Minnesota, and I asked the parties to discuss whether petitioner's transfer to a prison in Minnesota has any bearing on venue.

         In its supplemental response, the government acknowledges that the 2009 amendment to § 1956(c)(9) is not retroactive and therefore has no bearing on petitioner's claim. Dkt.#18 at 11. Second, the government does not seek a change in venue as a result of petitioner's prison transfer. Id. Accordingly, it is unnecessary to discuss those issues.

         B. Procedural Requirements for Bringing a Petition under § 2241

         A prisoner may not bring 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 the following: (1) he is seeking correction of a fundamental defect in his conviction or sentence (such as a claim of 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) the new rule applies retroactively; (4) he is barred from bringing a successive § 2255 motion; and (5) 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 v. Bezy, 499 F.3d 668, 672 (7th Cir. 2007); 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.”).

         In its initial response to the court's order to show cause, the government did not challenge petitioner's ability to show that he was challenging a fundamental defect in his conviction, that his claim relied on a new rule of statutory law or that he was unable to bring a motion under § 2255. I agree with the government's implicit concession that petitioner has satisfied those requirements. Petitioner is contending that he is actually innocent of money laundering, so that qualifies as a fundamental defect, Montana v. Cross, 829 F.3d 775, 783 (7th Cir. 2016); Santos is a new rule of statutory interpretation; and petitioner cannot file a motion under § 2255 because he already filed such a motion and he does not meet the criteria for filing a successive petition. 28 U.S.C. § 2255(h)(2) (successive petition allowed only for newly discovered evidence or new rule of constitutional law).

         The government stated in its initial response that petitioner could have raised his claim in a timely § 2255 motion, but the government did not develop the argument and it ignored United States v. Simmons, 154 F.3d 765, 770 (8th Cir. 1998), the case on which petitioner relied for the proposition that his claim was foreclosed by circuit precedent until the Supreme Court decided Santos. (There is no dispute that Eighth Circuit precedent is relevant for the purpose of determining whether petitioner's claim was foreclosed because petitioner was convicted in that circuit.) The government also seemed to question in a footnote whether Santos should apply retroactively, but, again, it did not develop the argument. Accordingly, I asked the government to address the questions whether: (1) Simmons prevented petitioner from filing a timely petition under 28 U.S.C. § 2255; and (2) whether Santos applies retroactively.

         In its supplemental response, the government all but concedes that both issues should be resolved in petitioner's favor. Although the government does not say expressly that Santos is retroactive, it “concedes that Santos is a substantive statutory interpretation case and that it is within this Court's authority” to conclude that Santos applies retroactively. Id. at 1. As I noted in the April 25 order, the courts of appeal in at least four circuits have concluded that Santos applies retroactively. 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.”). I am not aware of any courts that have reached a different conclusion. In the absence of any argument from the government, I will follow Wooten.

         As to the question whether petitioner could have raised his claim in a timely § 2255 motion, the government devotes several pages of its 12-page supplemental response to arguing that Simmons did not foreclose petitioner's claim. Dkt. #18 at 4-7. In particular, the government says that Simmons was not dispositive because it involved an interpretation of the word “proceeds” in the context of the RICO statute, not the money laundering statute.

         I need not decide whether Simmons foreclosed petitioner's claim because the government cites another case that did. In particular, the government cites United Statesv. Huber, 404 F.3d 1047, 1058 (8th Cir. 2005), in which the court rejected a defendant's argument that the meaning of “proceeds” in the money laundering statute excludes expenses.The government acknowledges that Huber was decided before petitioner's ยง 2255 ...


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