Opinion
Criminal No. 4-96-150(1) (JRT/AJB), Civil No. 03-1020 (JRT)
September 2, 2003
Arthur Schuyler Ross, Leavenworth, KS, pro se
John R. Marti, OFFICE OF THE UNITED STATES ATTORNEY, Minneapolis, MN for respondent
MEMORANDUM OPINION AND ORDER DENYING § 2255 MOTION
Arthur Schuyler Ross ("Ross") is serving a federal sentence of 121 months imprisonment after being convicted of wire fraud and money laundering. This matter is now before the Court on Ross's motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255. Ross also seeks appointment of counsel. For the reasons discussed below, the Court now denies both motions.
This request was made to the Court by letter dated February 13, 2003.
BACKGROUND
In 1994, Ross formed Consortium International, Inc. ("Consortium"), a Minnesota corporation that purported to finance business transactions. Ross served as an executive and board member of Consortium. Ross was indicted for participating in an illegal "advance fee" run by Consortium, through which it fraudulently obtained fees from parties seeking financing, while Consortium never had the intent nor the ability to provide such loans.Ross was arrested at the Minneapolis-St. Paul International Airport on August 27, 1996. A search incident to arrest was conducted and the belongings seized were searched the following day pursuant to a search warrant. The government also executed many additional search warrants, including one at Consortium's offices and one at the home of a Consortium employee, Patti Jo Storms. The Magistrate Judge granted the Government's motion to seal those and other search warrants to protect the identities of cooperating witnesses. On September 4, 1996, the Magistrate Judge held a detention hearing and imposed conditions of release upon Ross, including a cash bond of $250,000. On September 6, 1996, the Magistrate Judge granted the government's motion to unseal the search warrants.
Shortly before trial, the Court granted the Government's motion to dismiss two counts. Over Ross's objection, the Court also granted in part the Government's motion to amend the indictment by deleting a reference to a dollar amount. See United States v. Ross, 210 F.3d 916, 922 (8th Cir. 2000) (" Ross I").
Ross represented himself at trial, and on November 20, 1997, a jury convicted him of fifteen counts of wire fraud and eighteen counts of money laundering. On November 12, 1998, the Court sentenced Ross to fifteen months for the wire fraud convictions and eighty-seven months for the money laundering convictions, to be served concurrently. The Court also ordered restitution in excess of $2.7 million. Ross appealed his conviction and sentence to the U.S. Court of Appeals for the Eighth Circuit, which affirmed the convictions and restitution order. See Ross I, 201 F.3d at 921-24. However, the Eighth Circuit reversed the Court's sentence and remanded for resentencing. Upon resentencing, this Court found that Ross was an organizer or leader of criminal activity and applied a four-level enhancement under United States Sentencing Guideline ("U.S.S.G.") § 3B1.1. See United States v. Ross, 279 F.2d 600, 602 (8th Cir. 2002) (" Ross II"). In calculating Ross's total offense level, the Court added four levels to the money laundering and wire fraud counts, which had been separately grouped pursuant to U.S.S.G. § 3D1.2. The Court also imposed a two-level downward departure on the money laundering counts under U.S.S.G. § 5K2.0. The Court issued a new sentence of 121 months, constituting 60 months on the wire fraud counts served concurrently with 121 months on the money laundering counts. The Court again ordered Ross to pay $2.7 million in restitution.
Ross appealed this sentence as well, objecting to the four-level enhancement on the money laundering counts, challenging the restitution order under Apprendi v. New Jersey, 530 U.S. 466 (2000), and seeking a new trial based on the Government's failure to disclose information about one of its witnesses. The Eighth Circuit rejected Ross's claims on this appeal, and affirmed this Court's judgment and resentencing. See Ross II, 279 F.3d at 610. Ross filed his present § 2255 motion on February 5, 2003.
Ross has also filed a "supplement" to his § 2255 motion, which consists of a letter and other documents mailed to the Court on January 9, 2003. The Court has considered this submission along with Ross's motion and the other pleadings.
ANALYSIS
Ross raises fourteen separate grounds in his § 2255 motion, several of which are interrelated. Grounds 1-3 of the motion contend that the search warrants for Consortium's offices, the residence of Patti Jo Storms ("Storms"), and for Ross's personal belongings were invalid. These grounds are the principal basis for Ross's § 2255 motion.Ground 4 alleges prosecutorial misconduct for seeking to seal the search warrants to mask purported defects. In Ground 5, Ross alleges that he was arrested without a warrant and that he did not consent to the search of his belongings upon arrest. Ground 6 challenges his restitution requirement pursuant to Apprendi. Ground 7 alleges that Ross was denied reasonable bail in violation of the Eighth Amendment. In Ground 8, Ross contends that he was denied his constitutional right to confrontation because he could not present witnesses or questions to the grand jury. Ground 9 claims that Ross was wrongly charged with "aiding and abetting" money laundering. Ground 10 alleges that the Government applied for a Letter Rogatory without giving Ross notice. Ground 11 asserts that the Government wrongly failed to disclose that one of its expert witnesses, an IRS agent, was forced to retire from the agency for disciplinary reasons. Ground 12 claims that the Government threatened certain witnesses so that they would not testify on Ross's behalf at trial. Ground 13 alleges "cumulative prosecutorial misconduct," and lists many of the above-stated allegations. Ground 14 is an omnibus allegation of ineffective assistance against all six of Ross's former defense attorneys.
I. Procedural Default for Failure to Raise on Appeal — Grounds 1-5, 8-10, 12-13
The Government argues that several of Ross's grounds are procedurally defaulted. Non-constitutional or non-jurisdictional issues that could have been but were not raised on direct appeal may not be raised in a § 2255 motion. Anderson v. United States, 25 F.3d 704, 706 (8th Cir. 1994). The Court does not agree with the Government that none of the grounds that Ross failed to raise on direct appeal — Grounds 1-5, 8-10, 12, and 13 — are jurisdictional or constitutional. Nevertheless, the Court agrees that these claims are procedurally barred because Ross has not demonstrated "cause and prejudice" that would permit him to seek § 2255 relief.
Section 2255 is still available to correct errors that could have been raised at trial or on direct appeal if Ross can show cause for the default and resulting prejudice, or if he can produce evidence of innocence. Johnson v. United States, 278 F.3d 839, 844 (8th Cir. 2002); Auman, 25 F.3d at 706. The Court finds that Ross cannot satisfy any part of this standard.
A. Grounds Related to Search Warrants — Grounds 1-4
Ross argues that he has cause for his default on this ground, because he only learned of the alleged conflicting dates on the search warrants relatively recently, in late 2002. Ross suggests that he was able to learn about this information only after some investigation. This does not amount to cause for Ross's failure to bring these claims on direct appeal. All the relevant search warrants were unsealed on September 6, 1996. They became public information and were freely available to Ross, his attorneys, or anyone else on that date. Ross's trial would not begin until more than one year later; he filed his first direct appeal in late 1998, more than two years later. Clearly, any information regarding these search warrants as well as their sealing and unsealing was available to Ross at trial and at the time of his direct appeal. Therefore, he could have raised these issues at that time.
Because Ross has not demonstrated cause for his default, the Court need not consider the question of prejudice. Because these search warrants form a significant part of Ross's motion, however, the Court will address this matter. Even if Ross had shown cause for his failure to raise the search warrant issue, he still could not demonstrate prejudice because he has not supported his claims that the search warrants were defective. Ross argues that the searches of Consortium's offices, his belongings, and Storms's residence were illegal because the searches were conducted before the warrants were issued. Ross does note possible discrepancies on some of these warrants, but none of them are sufficient to invalidate the warrants or to cause prejudice.
1. Consortium's Offices
This warrant was issued by the Magistrate Judge on August 27, 1996. ( See Docket No. 15.) Ross notes that the back page of the warrant provides that it was received and executed on August 28, 1996. ( Id.). Ross further notes that the inventory of evidence seized in the search indicates that it was collected on August 27, one day before the search was purportedly carried out. ( Id.) Ross claims that this discrepancy invalidates the search, but the Court disagrees. It is clear that the warrant was valid, and that all activities relating to the search took place after the warrant was issued on August 27, and before the warrant expired, on August 31, 1996. ( See id.) The Court thus finds no illegality or prejudice resulting from this warrant.
2. Residence of Patti Jo Storms
The government correctly notes that Ross has no standing to challenge this warrant. Fourth Amendment rights are personal and cannot be asserted vicariously. United States v. Pierson, 219 F.3d 803, 806 (8th Cir. 2000). Thus, a defendant "can argue for the suppression of evidence gathered in violation of the Fourth Amendment `only if that defendant demonstrates that his Fourth Amendment rights were violated by the challenged search or seizure.'" United States v. Payne, 119 F.3d 641, 641 (8th Cir. 1997) (quoting United States v. Padilla, 508 U.S. 77, 81 (1993) (emphasis original)). If a defendant does not prove a sufficiently close connection to the relevant places or objects searched, he has no standing to claim that they were searched or seized illegally. United States v. Gomez, 16 F.3d 254, 256 (8th Cir. 1994). Ross thus has the burden to show that he had a legitimate expectation of privacy that was violated by the search of Storms's residence. Pierson, 219 F.3d at 806; Payne, 119 F.3d at 641. To establish such a legitimate expectation, Ross must demonstrate: (1) a subjective expectation of privacy; and (2) that the subjective expectation is objectively reasonable. United States v. Muhammad, 58 F.3d 353, 355 (8th Cir. 1995); United States v. Welliver, 976 F.2d 1148, 1151 (8th Cir. 1992). Factors relevant to determining standing include:
Technically speaking, there is no doctrine of "standing" in Fourth Amendment law. However, courts in the Eighth Circuit use the term "standing" as a shorthand reference to the issue of whether a defendant's Fourth Amendment interests are implicated. See United States v. Green, 275 F.3d 694, 698 n. 3 (8th Cir. 2001).
ownership, possession and/or control of the area searched or item seized; historical use of the property or item; ability to regulate access; the totality of the circumstances surrounding the search; the existence or nonexistence of a subjective anticipation of privacy; and the objective reasonableness of the expectation of privacy considering the specific facts of the case.Gomez, 16 F.3d at 256. It is clear from these standards that Ross had no legitimate expectation of privacy in Storms's residence. Accordingly, Ross may not challenge the search warrant on Fourth Amendment grounds.
The Court notes that even if Ross did have standing, his challenge of this warrant would be unsuccessful. Ross claims that the warrant is invalid because it was issued on August 31, 1996, but was executed on August 27, four days earlier. It evident from the face of the warrant and from the record that the discrepancies in the Storms search warrant are certainly due to clerical error. For this case, the Magistrate Judge approved approximately fifteen search warrants on the same day, August 27, 1996. ( See Docket Nos. 13-43.) Nearly all of the warrants noted that they were issued on that date, and all the warrants noted that they expired on August 31, 1996. The Court finds that in light of these facts, it is likely that the Magistrate Judge simply erred when filling out the date, and accidentally wrote the expiration date instead of the date of issuance on the Storms warrant. ( See Docket Nos. 42-43.) This is further confirmed by the back page of the warrant, where the Magistrate Judge again signed and dated the form, indicating that it was returned to him as executed on August 29, 1996.
3. Search of Ross's Belongings
Finally, Ross argues that the search of his briefcase and luggage was improper because the search took place before agents possessed the warrant. This allegation is unfounded and is likely based on confusion between the search and seizure incident to Ross's arrest on August 27, 1996, and the subsequent search on August 28 of items seized the previous day. When Ross was arrested on August 27, agents conducted a search of his person. As part of the arrest, they also seized Ross's briefcases and handbags. These items were not searched, however, until the following day, after the agents obtained a search warrant. Thus, it is clear from the record that the search of Ross's bags was performed properly and lawfully.
The warrant shows that it was approved on August 27, 1996. ( See Docket No. 31.) Ross notes another discrepancy involving dates, pointing out that the application and affidavit for the search warrant bear the Magistrate Judge's signature and date of August 31, 1996. For the reasons described in relation to the Storms warrant, the Court finds that this was likely a simple error by the Magistrate Judge.
Based on this discussion, the Court finds that even if Ross could show cause for his procedural default on grounds 1-4, he has not provided evidence that these warrants were defective, and therefore cannot demonstrate any actual prejudice.
B. Grounds 5, 8-10, and 12-13
Ross clearly knew both at trial and upon direct appeal the following information: the circumstances regarding his arrest (Ground 5); the fact that he was not granted access to the grand jury (Ground 8); information in the indictment regarding "aiding and abetting" (Ground 9); that the government had sought a letter rogatory (Ground 10); whether witnesses were allegedly threatened (Ground 12); and whether the prosecutors had committed misconduct at trial (Ground 13). Therefore, as stated above, the Court finds that Ross has not shown cause on these grounds because he could have brought all of them on direct appeal. Because Ross cannot show cause on these grounds, there is no need to consider the question of prejudice.
The record demonstrates that a warrant for Ross's arrest was issued on August 27, 1996. ( See Docket No. 4.)
This ground has no merit, because defendant had no right to be present or to present evidence before the grand jury. See Fed.R.Crim.P. 6(d).
The premise of this ground is also erroneous. Ross was never charged with aiding and abetting money laundering, as he claims. Rather, the indictment charged that Ross was "aided and abetted by others." (Second Revised Indictment at 8.)
The record demonstrates that Ross's attorney filed a motion referencing the letter rogatory on April 17, 1997 — several months before Ross's trial. ( See Docket No. 131.)
Ross claims that he learned of such threats "[j]ust prior to trial in 1997." (Traverse at 20.) Therefore, he could have raised this concern either at trial or on direct appeal.
Even if Ross cannot show cause and actual prejudice, he may still bring these § 2255 grounds if he can make a showing of "actual innocence." To establish a valid claim of actual innocence, Ross must show by clear and convincing evidence that, but for an alleged constitutional error, no reasonable juror would have found him guilty. Anderson, 25 F.3d at 706-07. Under this doctrine, Ross "must show factual innocence, not simply legal insufficiency of evidence to support a conviction." McNeal v. United States, 249 F.3d 747, 749 (8th Cir. 2001). In this case, Ross makes a variety of arguments which, if true, may demonstrate that the Government's case was legally insufficient. He has not, however, made the required showing of actual innocence. Therefore, the Court finds that Grounds 1-5, 8-10, and 12-13 are procedurally defaulted and may not be brought under § 2255.
II. Procedural Bar Due to Full and Fair Litigation — Grounds 6-7, 11
The Court next addresses Ross's allegations in Grounds 6, 7, and 11 of his motion and notes that these grounds are procedurally barred because he did raise them on direct appeal and the issues were decided against him. It is well established that issues "raised and decided on direct appeal cannot ordinarily be relitigated in a collateral proceeding based on 28 U.S.C. § 2255." United States v. Wiley, 245 F.3d 750, 752 (8th Cir. 2001). Here, it is clear that Ross has raised the Apprendi claim found in Ground 6, and the Eighth Circuit rejected it. See Ross II, 279 F.3d at 608-10. Ross's allegations relating to bail, found in Ground 7, were also raised in a direct appeal to the Eighth Circuit, which affirmed this Court's refusal to reduce bail. ( See Govt. Br. Ex. 3.) Finally, Ross raised the issues related to the testimony of IRS agent Walsh found in Ground 11. The Eighth Circuit considered Ross's allegations relating to Walsh in Ross II, and found no abuse of the Court's discretion to deny a new trial on these grounds. See Ross II, 279 F.3d at 610. The Court thus concludes that Grounds 6, 7, and 11 were raised and determined on direct appeal. The only way that Ross might attain § 2255 review on these matters is if he could produce evidence of actual innocence. See Wiley, 245 F.3d at 752. As with the earlier claims, however, it is clear that Ross at most asserts legal insufficiency, and has not produced any "convincing new evidence" of actual innocence. Id. Therefore, these grounds are procedurally barred from consideration under § 2255.
III. Ineffective Assistance of Counsel — Ground 14
The only claim in Ross's § 2255 motion that is not procedurally barred is Ground 14, his omnibus claim of ineffective assistance of counsel against all of his lawyers. To prevail on these claims, Ross must show that: (1) counsel's performance was deficient, and (2) he was prejudiced by that deficient performance. Strickland v. Washington, 466 U.S. 668, 687 (1984). When evaluating the first prong, the Court must "indulge a strong presumption" that counsel performed as a reasonably competent attorney. Id. at 689. See DeRoo v. United States, 223 F.3d 919, 925 (8th Cir. 2000) ("A defendant faces a heavy burden to establish ineffective assistance of counsel pursuant to section 2255." (Citation omitted)). Ross has the burden of showing that counsel's performance "fell below an objective standard of reasonableness," and was not within the range of competence demanded of attorneys in criminal cases. Strickland, 466 U.S. at 689. See Hill v. Lockhart, 474 U.S. 52, 58 (1985); Tollett v. Henderson, 411 U.S. 258, 266 (1973). To establish the second prong, Ross must show "a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Id. at 694. Counsel's challenged conduct is to be evaluated in light of the circumstances surrounding the decision, not with the 20/20 vision of hindsight. Id. at 689.
The Court finds that Ross's allegations of ineffective assistance fail because he cannot satisfy either prong of the Strickland test. First, Ross has provided no evidence that any of his lawyers' performance was deficient. Ross's argument on this ground contains many allegations, but he produces no evidence supporting any of his claims. ( See, e.g., § 2255 Motion ¶ 12N; § 2255 Motion Supp. at 2; Traverse at 22-23.) As noted above, the Court must presume that Ross's lawyers were competent, and Ross cannot overcome this strong presumption through allegations alone. In the absence of evidence that Ross's lawyers performed deficiently, the Court finds that Ross has not met the first Strickland prong. Furthermore, even if Ross had produced some evidence of deficiency, he has not provided evidence that in the absence of such deficiency he would not have been convicted by the jury. Therefore, the Court also finds that Ross cannot demonstrate prejudice and also fails the second Strickland prong. Accordingly, Ross's allegations in Ground 14 fail.
The Court finds that Ross is not entitled to an evidentiary hearing because the motion, the files, and records in this case conclusively show that he is entitled to no relief. See 28 U.S.C. § 2255. Furthermore, because Ross's § 2255 petition must be dismissed, his request for appointment of counsel is moot.
ORDER
Based on the foregoing, all the records, files, and proceedings herein, IT IS HEREBY ORDERED that:
1. Petitioner's motion pursuant to 28 U.S.C. § 2255 [Docket No. 476] is DISMISSED WITH PREJUDICE.
2. Petitioner's motion for appointment of counsel is DENIED AS MOOT.
LET JUDGMENT BE ENTERED ACCORDINGLY.