Teves v. USA

Filing 3

ORDER: (1) DENYING DEFENDANT'S MOTION UNDER 28 U.S.C. § 2255 TO VACATE, SET ASIDE, OR CORRECT SENTENCE BY A PERSON IN FEDERAL CUSTODY, ECF NO. 433; AND (2)DENYING A CERTIFICATE OF APPEALABILITY. Signed by CHIEF JUDGE J. MICHAEL SEABRIGHT on 12/19/2016. (afc) re: CR 11-00503-JMS-03 USA v. Pilialoha K. Teves CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
UNITED STATES OF AMERICA,

CR. NO. 11-00503 JMS (03)
CIV. NO. 16-00543 JMS-KJM

Plaintiff,
vs.
PILIALOHA K. TEVES (03),
Defendant.

ORDER: (1) DENYING
DEFENDANT’S MOTION UNDER
28 U.S.C. § 2255 TO VACATE,
SET ASIDE, OR CORRECT
SENTENCE BY A PERSON IN
FEDERAL CUSTODY, ECF NO.
433; AND (2) DENYING A
CERTIFICATE OF
APPEALABILITY

ORDER: (1) DENYING DEFENDANT’S MOTION UNDER 28 U.S.C. § 2255
TO VACATE, SET ASIDE, OR CORRECT SENTENCE BY A PERSON IN
FEDERAL CUSTODY, ECF NO. 433; AND (2) DENYING A
CERTIFICATE OF APPEALABILITY
I. INTRODUCTION
On October 22, 2013, after a three-week jury trial, Defendants
Pilialoha K. Teves (“Teves”) and Mahealani Ventura-Oliver (“Ventura-Oliver”)
(collectively, “Defendants”) were found guilty of multiple counts relating to a
fraudulent debt assistance program as charged in a September 1, 2011 Superseding
Indictment (“SI”). 1 On February 21, 2014, the court entered a judgment
sentencing Teves to a term of 42 months incarceration, imposed a restitution
obligation, and ordered that she forfeit all interest in specific properties. ECF No.
1

Although the SI charged additional Defendants, they were no longer part of this action
when trial commenced.

307. Currently before the court is Teves’ Motion Under 28 U.S.C. § 2255 to
Vacate, Set Aside or Correct Sentence By a Person in Federal Custody (Ҥ 2255
Motion”). ECF No. 433.
Teves’ § 2255 Motion alleges that she received ineffective assistance
of counsel as to the forfeiture order and seeks a reduction of the forfeiture money
judgment. She neither challenges the validity of her conviction or sentence nor
seeks release from custody. For the reasons discussed below, the § 2255 Motion
and a Certificate of Appealability are DENIED.
II. BACKGROUND
Teves and four co-defendants were charged with conspiracy and mail
fraud offenses arising out of their promotion and operation of a debt elimination
scheme. Defendants were associated with groups based in Maui known as the
“Hawaiiloa Foundation,” “Ko Hawaii Pae Aina,” and “The Registry” (collectively,
“HLF”), and they allegedly conducted seminars on Maui offering to teach
individuals about Hawaiian history and property rights. They also marketed a debt
assistance program claiming to eliminate mortgage, credit card, and other debt in
exchange for a fee. Through HLF, Defendants offered to provide individuals
“bonds” and other legal documents to pay their debts by drawing on fictitious
accounts purportedly established for each individual at his or her birth and
maintained by the United States Treasury and the State of Hawaii. Defendants
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caused these individuals to send these “bonds” and other legal documents to the
United States Treasury, the Federal Reserve Bank, the State of Hawaii, and their
creditors as a purported means of discharging their debts and forestalling mortgage
foreclosures and debt collection efforts. HLF obtained approximately $468,000
from these individuals. The SI sought entry of a personal forfeiture money
judgment in that amount, and the forfeiture of bank accounts, cash, collectible
coins, and vehicles that were proceeds of the offenses.
Following trial, Teves was found guilty of twelve counts of mail
fraud, and acquitted of three other counts of mail fraud (for events occurring prior
to July 9, 2008). Verdict Form, ECF No. 243. On December 17, 2013, this court
entered a preliminary order of forfeiture against Teves that provided for the entry
of a money judgment of $468,000. ECF No. 281. At the February 10-11, 2014
sentencing hearing, because Teves was acquitted of counts relating to conduct
prior to July 9, 2008, the court reduced the amount in the preliminary forfeiture
order to $369,622.01, reflecting the amount of proceeds received by HLF during
Teves’ participation in the conspiracy. ECF No. 303. Judgment was entered on
February 21, 2014, sentencing Teves to a term of 42 months incarceration,
imposing a restitution obligation, ordering that she forfeit all interest in specific
properties, and ordering that the final order of forfeiture include a money judgment
of $369,622.01. ECF No. 307.
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Following Teves’ sentencing, Ventura-Oliver contested the forfeiture
allegations, and sought a reduction of the money judgment by the value of the
assets seized. The seized assets had not been sold due to a stay in the execution of
forfeiture pending direct appeals.2 ECF No. 383. The Government, having agreed
that the value of the seized assets was $195,472, sought a money judgment of
$272,528, which represented the $486,000 derived from the scheme, less the
$195,472 value of the other seized assets as proceeds of the scheme. On June 13,
2014, the court entered a preliminary order of forfeiture against Ventura-Oliver
that provided for a money judgment of $272,528. ECF No. 352.
On January 23, 2015, the court entered a final order of forfeiture
against Teves, acknowledging that the money judgment against Ventura-Oliver
was reduced by the value of the seized property, but noting that the preliminary
order of forfeiture against Teves had become final at the time of sentencing and
therefore, the court lacked jurisdiction to grant a similar reduction. ECF No. 416.
In her direct appeal, Teves challenged both her conviction and the
court’s failure to reduce the money judgment by the value of the seized assets. On
October 15, 2015, the Ninth Circuit affirmed Teves’ judgment in all respects. See
Teves, 621 F. App’x 486, 487 (9th Cir. 2015). The Ninth Circuit noted that
2

Both Defendants appealed their convictions. On October 30, 2015, the Ninth Circuit
affirmed Teves’ judgment. United States v. Teves, 621 F. App’x 486 (9th Cir. 2015) (mem.).
Ventura-Oliver’s conviction was affirmed on November 7, 2016. United States v. VenturaOliver, 2016 WL 6585121 (9th Cir. Nov. 7, 2016) (mem.).
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imposition of criminal forfeiture is “subject only to statutory and constitutional
limits,” and that under 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), Teves
must forfeit “the proceeds of her criminal activity.” Id. (citing United States v.
Newman, 659 F.3d 1235, 1240 (9th Cir. 2011)). In affirming Teves’ judgment the
Ninth Circuit explained:
Teves cites no case that requires a district court to order
an offset against a personal money judgment by the value
of the seized property before the property is sold. In the
absence of such controlling authority, we conclude that
the district court did not plainly err by failing to order the
offset. In the event that Teves’ personal money judgment
is not offset by the proceeds of the forfeiture sale, and the
Government attempts to collect in total more than the
facial amount, Teves will be free to raise the challenge at
that time.
Id. at 487-88.
III. STANDARD OF REVIEW
The court’s review of Teves’ § 2255 Motion is governed by 28 U.S.C.
§ 2255(a):
A prisoner in custody under sentence of a court
established by Act of Congress claiming the right to be
released upon the ground that the sentence was imposed
in violation of the Constitution or laws of the United
States, or that the court was without jurisdiction to
impose such sentence, or that the sentence was in excess
of the maximum authorized by law, or is otherwise
subject to collateral attack, may move the court which
imposed the sentence to vacate, set aside or correct the
sentence.
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A court should hold an evidentiary hearing on a § 2255 motion
“unless the files and records of the case conclusively show that the prisoner is
entitled to no relief.” 28 U.S.C. § 2255(b). “In determining whether a hearing and
findings of fact and conclusions of law are required, ‘[t]he standard essentially is
whether the movant has made specific factual allegations that, if true, state a claim
on which relief could be granted.’” United States v. Withers, 638 F.3d 1055, 1062
(9th Cir. 2010) (quoting United States v. Schaflander, 743 F.2d 714, 717 (9th Cir.
1984)). “Thus, the district court’s decision that [the petitioner’s] ineffective
assistance claim did not warrant an evidentiary hearing [is] correct if his
allegations, when viewed against the record, do not state a claim for relief or are so
palpably incredible or patently frivolous as to warrant summary dismissal.” United
States v. Leonti, 326 F.3d 1111, 1116 (9th Cir. 2003) (quoting Schaflander, 743
F.2d at 717). Conclusory statements in a § 2255 motion are insufficient to require
a hearing. United States v. Johnson, 988 F.2d 941, 945 (9th Cir. 1993).
Because the court concludes that the issues in Teves’ § 2255 Motion
can conclusively be decided on the basis of the existing record, the court will not
hold an evidentiary hearing.
IV. DISCUSSION
Teves filed the instant § 2255 Motion challenging the forfeiture order
and money judgment. Specfically, Teves alleges that she received ineffective
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assistance when counsel: (1) “fail[ed] to object to forfeiture of a personal money
judgment;” and (2) “fail[ed] to request the amount of the personal money judgment
be offset by the value of the seized property.” § 2255 Motion at PageID ## 558485, ECF No. 433-1.
A.

Teves’ Claim Fails Under § 2255
Teves’ challenge to the forfeiture order and money judgment is not

cognizable under § 2255. United States v. Kramer, 195 F.3d 1129 (9th Cir. 1999),
determined that “by its plain terms, § 2255 is available only to defendants who are
in custody and claiming the right to be released. It cannot be used solely to
challenge a restitution order.” Id. at 1130. That is “[c]laims seeking release from
custody can be brought under § 2255; claims seeking other relief cannot.” United
States v. Thiele, 314 F.3d 399, 402 (9th Cir. 2002). Thus, a “forfeiture claim is not
a cognizable § 2255 claim.” United States v. Finze, 428 F. App’x 672, 677 (9th
Cir. 2011). And even when “couched as an ineffective assistance of counsel
claim,” a challenge to a “prior order of forfeiture . . . is not cognizable through a
§ 2255 motion.” Oranga-Zuniga v. United States, 2014 WL 3056800, at *2 (W.D.
Wash. July 7, 2014) (citing Thiele, 314 F.3d at 402).
Here, by her own admission, Teves’ challenges only the forfeiture
order and seeks a reduction of the money judgment. She does not challenge her

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conviction or sentence, and does not seek release from custody. See § 2255
Motion at PageID # 5584. Thus, her claim is not cognizable under § 2255.
B.

Teves’ Claim Also Fails If Construed as a Writ of Error Coram Nobis
In light of the foregoing, the court may (but is not required to) sua

sponte construe the § 2255 Motion as a writ of error coram nobis. See CasasCastrillon v. Wagner, 265 F. App’x 496, 497 (9th Cir. 2008) (“The district court
was not obligated to construe, sue sponte, [a] habeas petition as a writ of error
coram nobis.”); see also United States v. Kwan, 407 F.3d 1005, 1011 (9th Cir.
2005), abrogated on other grounds by Padilla v. Kentucky, 559 U.S. 356, 373-74
(2010) (“Federal courts have authority to issue the writ of coram nobis under the
All Writs Act, 28 U.S.C. § 1651(a).”); Cepeda v. California, 2009 WL 959955, at
*1 (E.D. Cal. Apr. 6, 2009) (“[T]he court may construe petitioner’s habeas petition
as a request for a writ of coram nobis.”).
Even construed as a petition for a writ of coram nobis, however,
Teves’ claim fails. Coram nobis is an extraordinary remedy available only if
Teves can show “error[ ] of the most fundamental character.” Matus-Leva v.
United States, 287 F.3d 758, 760 (9th Cir. 2002). And a “writ of error coram nobis
is a highly unusual remedy, available only to correct grave injustices in a narrow
range of cases where no more conventional remedy is applicable.” United States v.
Reidl, 496 F.3d 1003, 1005 (9th Cir. 2007). They “should be granted ‘only under
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circumstances compelling such action to achieve justice.’” Id. (quoting United
States v. Morgan, 346 U.S. 502 (1954)).
Coram nobis relief may be granted only if Teves can satisfy all four of
the following criteria:
(1) a more usual remedy is not available; (2) valid
reasons exist for not attacking the conviction earlier;
(3) adverse consequences exist from the conviction
sufficient to satisfy the case or controversy requirement
of Article III; and (4) the error is of the most fundamental
character.
Id. at 1006 (quoting Hirabayashi v. United States, 828 F.2d 591, 604 (9th Cir.
1987)). Teves clearly fails to meet the fourth criterion -- that is, she cannot
demonstrate a fundamental error, such as ineffective assistance of counsel. See,
e.g., Kwan, 407 F.3d at 1014 (collecting cases).
To establish ineffective assistance of counsel, Teves must show that
(1) counsel’s representation was deficient, and (2) she suffered prejudice as a
result. Strickland v. Washington, 466 U.S. 668, 687 (1984). A court need not
determine whether counsel’s performance was deficient before examining the
prejudice suffered by the petitioner as a result of the alleged deficiencies. See id. at
697. In other words, any deficiency that does not result in prejudice necessarily
fails.
Here, Teves has not met the second Strickland prong. Even assuming
counsel’s representation was deficient (which the court does not find) for failing to
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(1) object to forfeiture of a personal money judgment, and (2) request that the
personal money judgment be offset by the value of the seized property, Teves has
not shown actual prejudice. Teves alleges prejudice because she “is left with a
forfeiture order in an amount greater than the proceeds of the offense of conviction
. . . that contains no language to ensure” that an offset will be applied. § 2255
Motion at 5-6.
But Teves is mistaken. First, on Teves’ direct appeal, the Ninth
Circuit determined that the court’s failure to reduce the money judgment by the
value of the seized assets was not plain error and resulted in no prejudice to Teves
at that time. Teves, 621 F. App’x at 487-88 (“The district court did not plainly err
by failing to order the offset . . . and [should] the Government attempt[] to collect
in total more than the facial amount, Teves will be free to raise the challenge at that
time.”). Second, the forfeiture sale still has not yet occurred, and the government
continues to represent that it will offset Teves’ personal money judgment by the
proceeds from the forfeiture sale. See Govt’s Opp’n at 7 n.5, ECF No. 440 (“[T]he
Ninth Circuit has just affirmed Co-defendant Ventura-Oliver’s judgment. When
the mandate in that case issues, the government intends to sell the seized items.
Teves’ money judgment will be reduced at that time by the amounts obtained by
the sale.”).

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Given the Ninth Circuit’s determination of no plain error by the court
and recognition that Teves was not prejudiced by the money judgment prior to the
forfeiture sale, and the absence to date of a forfeiture sale, the court finds that
Teves has failed to show actual prejudice from counsel’s representation as to the
forfeiture order and money judgment. 3 Thus, Teves cannot meet the fourth
required criterion of fundamental error for coram nobis relief at this time.
In short, a petition for a writ coram nobis is premature. If the
government fails to reduce the money judgment by the proceeds from the forfeiture
sale, Teves could seek coram nobis relief at that time.
C.

Certificate of Appealability
In dismissing the § 2255 Motion, the court must also address whether

Teves should be granted a certificate of appealability (“COA”). See R. 11
Governing Section 2255 Proceedings (providing that “[t]he district court must
issue or deny a certificate of appealability when it enters a final order adverse to
the applicant”). A COA may issue only if the petitioner “has made a substantial
showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2).
3

The court is not holding, as a matter of law, that Teves’ failure to prevail under a plain
error standard on direct appeal necessarily forecloses an ineffective assistance of counsel claim
on collateral review. See James v. United States, 622 F. App’x 689 (9th Cir. 2015). Several
courts have held or suggested, however, that Strickland’s prejudice prong is virtually identical to
the plain error’s substantial rights’ prong. See Close v. United States, 679 F.3d 714, 720 (8th
Cir. 2012); United States v. Rangel, 781 F.3d 736, 745-46 (4th Cir. 2015); Bennett v. United
States, 663 F.3d 71, 89 (2d Cir. 2011); United States v. Saro, 24 F.3d 283, 287 (D.C. Cir. 1994);
see also, United States v. Marcus, 560 U.S. 258, 262 (2010) (stating that in the ordinary case, the
plain error requirement of affecting substantial rights requires a showing of prejudice).
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The court carefully reviewed all of Teves’ assertions and gave her every benefit by
liberally construing them. Based on the above analysis, the court finds that
reasonable jurists could not find the court’s rulings debatable.
Accordingly, a COA is DENIED.
V. CONCLUSION
For the foregoing reasons, the court DENIES Teves’ § 2255 Motion
and DENIES a COA. The Clerk of Court is directed to close the case file.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, December 19, 2016.

/s/ J. Michael Seabright
J. Michael Seabright
Chief United States District Judge

United States v. Teves, Cr. No. 11-00503 JMS (03); Civ. No. 16-00543 JMS-KJM, Order:
(1) Denying Defendant’s Motion Under 28 U.S.C. § 2255 To Vacate, Set Aside, Or Correct
Sentence By A Person In Federal Custody, ECF No. 433; and (2) Denying A Certificate Of
Appealability

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