McLean v. Holland

Filing 11

MEMORANDUM OPINION & ORDER; 1) McLean's pet for writ of habeas corpus is DENIED 2) McLean's motion 10 for status is granted; McLean's motion 10 to appoint counsel is DENIED 3) Court will enter an appropriate judgment 4) matter is stricken from active docket. Signed by Judge Henry R. Wilhoit, Jr on 11/21/12.(SMT)cc: COR, McLean via USMail

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION AT ASHLAND

JANIES E. MCLEAN, JR.,

Petitioner,
V.
lC. HOLLAND, WARDEN,
Respondent.

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Civil Action No. 11-124-HRW

MEMORANDUM OPINION

AND ORDER

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James E. McLean, Jr., is a prisoner confined at the Federal Prison Camp in
Ashland, Kentucky. Proceeding without counsel, McLean has filed a petition for a
writ of habeas corpus pursuant to 28 U.S.C. § 2241 [R. 1] and a subsequent
memorandum in further support of his petition. [R. 8] The Court has reviewed the
petition and memorandum, I but must deny relief because McLean may not assert his

I The Court conducts a preliminary review of habeas corpus petitions. 28 U.s.C. § 2243;
Alexander v. Northern Bureau ofPrisons, 419 F. App'x 544, 545 (6th Cir. 2011). Because the
petitioner is not represented by an attorney, the petition is reviewed under a more lenient standard.
Erickson v. Pardus, 551 U.S. 89,94 (2007); Burton v. Jones, 321 F.3d 569,573 (6th Cir. 2003). At
this stage the Court accepts the petitioner's factual allegations as true and his legal claims are
liberally construed in his favor. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007). Once
that review is complete, the Court may deny habeas relief "ifit plainly appears from the petition and
any attached exhibits that the petitioner is not entitled to relief." Rule 4 of the Rules Governing
§ 2254 Cases in the United States District Courts (applicable to § 2241 petitions pursuant to Rule
1(b)). Otherwise, the Court may resolve the petition as law and justice require. Hilton v. Braunskill,
481 U.S. 770, 775 (1987).

claims in this habeas proceeding pursuant to Section 2241.
I.

On September 13, 2002, McLean was indicted by a federal grand jury sitting
in Charlotte, North Carolina for his leadership role in an extensive conspiracy to
defraud the Department of Housing and Urban Development ("HUD"), the
Government National Mortgage Association ("Ginnie Mae"), and the Federal
National Mortgage Association ("Fannie Mae") through the issuance ofloans secured
by mortgages on non-existent or undeveloped properties. Following a week-long
trial, a jury found him guilty on all counts on November 22, 2002. United States v.
McLean, No. 3:02-cr-156-MR (W.D.N.C. 2002). The Fourth Circuit affirmed the

convictions on direct appeal, but remanded for resentencing in conformity with
United States v. Booker, 543 U.S. 220 (2005). United States v. McLean, 131 F.

App'x 34,36-38 (4th Cir. 2005).
On August 5, 2005, the trial court resentenced McLean to a 252-month term
of incarceration and ordered restitution in the amount of approximately $24 million,
a sentence affirmed by the Fourth Circuit on August 24, 2006. United States v.
McLean, 192 F. App'x 234 (4th Cir. 2006). The Supreme Court denied certiorari on

June 29, 2007.
On August 14, 2007, McLean filed a motion to vacate his conviction and
sentence pursuant to 28 U.S.C. § 2255.

As grounds, McLean contended the

indictment was initially defective in several respects and was constructively amended
during trial through the conduct of the prosecution and the court; the indictments
were duplicitous; the evidence was insufficient to convict him; his counsel was
constitutionally ineffective; and the court committed several errors in sentencing.
Before the trial court ordered the government to respond, on June 2, 2008, the
Supreme Court decided United States v. Santos, 553 U.S. 507 (2008), in which it held
that the term "proceeds" as used in the federal money laundering statute, 18 U.S.C.
§ 1956(a)( 1)(A)(I), will generally mean "profits" rather than merely "receipts" when
applied to federal criminal statutes regarding running various criminal enterprises,
such as gambling, drug trafficking, and conspiracy offenses. Santos, 553 U.S. at 515­
19. However, Justice Stevens's concurring opinion in the 4-1-4 decision indicates
that this may not always be so, and each offense must be examined to determine
whether the defendant used the funds generated in the underlying predicate criminal
activity in such a way as to run afoul of the separate prohibition against money
laundering. Santos, 553 U.S. at 525-29 (Stevens, J., concurring).2
The Sixth Circuit has held that the holding of the Supreme Court, being "the "position
taken by those [Justices] who concurred in the judgment[ ] on the narrowest grounds" under Marks
v. United States, 430 U.S. 188, 193 (1977), is that:
2

"[P]roceeds" does not always mean profits, as Justice Scalia concluded; it means
profits only when the § 1956 predicate offense creates a merger problem that leads
to a radical increase in the statutory maximum sentence and only when nothing in the
legislative history suggests that Congress intended such an increase. Whenever a
predicate offense satisfies this narrow rule, the Justices in the plurality would hold
"proceeds" means profits as well, because they would define "proceeds" as profits

Immediately thereafter, on September 29, 2008, McLean filed a motion to
amend his 2255 motion to include a claim that his counsel was ineffective for failing
to argue that under Santos he had not violated the money laundering statute.
Following the government's detailed response, the trial court entered an extensive
opinion denying relief on January 18, 2011. In doing so, it noted that the Supreme
Court's limited holding in Santos applied only to money laundering convictions
incident to illegal gambling operations, United States v. Howard, 309 F. App'x 760,
771 (4th Cir. 2009), and that the evidence at trial established that McLean had used
receipts generated by the mortgage fraud scheme he conducted for numerous
purposes other than to fund further illegal activity within that preexisting conspiracy.

McLean v. United States, No. 3:07-cv-331-MR (W.D.N.C. 2002) [R. 20, pp. 59-62
therein]. The Fourth Circuit Court of Appeals denied McLean a certificate of
appealability on July 1, 2011.
In his November 22, 2011, petition, McLean seeks relief from his convictions
and his sentence on many of the same grounds. First, McLean contends that his
conviction for both numerous substantive offenses, such as wire and bank fraud in
violation of 18 U.S.C. §§ 1343, 1344, making false statements in violation of 18
U.S.C. §§ 1001, 1006, and money laundering in violation of 18 U.S.C. § 1956, as
for every predicate offense.
United States v. Kratt, 579 F.3d 558,562-63 (6th Cir. 2009).

well as for conspiracy to commit each of these substantive offenses in violation of
U.S.C. § 371, creates a "merger" problem of the kind recognized by the Supreme
Court in Santos. [R. 1-1 at 2-3; 8-11] Second, McLean argues that because the
plurality opinion in Santos held that the term "proceeds" as used in the money
laundering statute referred to "profits" rather than to "receipts," he is actually
innocent of money laundering. [R. 1-1 at 3-6]
McLean's third and fourth claims challenge the sufficiency of the evidence
presented to convict him ofbank fraud [R. 1-1 at 12-13] and making false statements
[R. 1-1 at 13-14]. McLean's fifth and final argument is that the trial court erred
during sentencing by applying an older version of the sentencing guidelines and
miscalculated his criminal history. [R. 1-1 at 14-16]

II.
The Court will deny the petition because McLean may not assert these claims
in a habeas corpus petition under section 2241. A federal prisoner must challenge the
legality of his conviction or sentence by filing a post-conviction motion under 28
U.S.C. § 2255 with the trial court. Capaldi v. Pontesso, 135 F.3d 1122, 1123 (6th
Cir.2003). A federal prisoner may file a habeas corpus petition under Section 2241
only to challenge a decision by prison officials which affects the manner in which his
sentence is being carried out, such as the computation of sentence credits or parole
eligibility. United States v. Jalili, 925 F.2d 889, 894 (6th Cir. 1999).

Section 225 5(e) provides a narrow exception to this rule, and permits a prisoner
to challenge the legality ofhis conviction through a Section 2241 petition, where his
or her remedy under Section 2255 is or was "inadequate or ineffective" to test the
legality ofhis detention. The only circumstance where a prisoner may take advantage
of this provision is where, after his or her conviction has become final, the Supreme
Court re-interprets the terms of the statute petitioner was convicted of violating in
such a way that petitioner's actions did not violate the statute. Martin v. Perez, 319
F.3d 799,804 (6th Cir. 2003) ("A prisoner who can show that an intervening change
in the law establishes his actual innocence can invoke the savings clause of § 2255
and proceed under § 2241."); Lott v. Davis, 2004 WL 1447645, *2 (6th Cir. 2004)
(unpublished disposition). This exception does not apply where the prisoner failed
to seize an earlier opportunity to correct a fundamental defect in his conviction under
pre-existing law, whether by direct appeal or by motion under Section 2255, or where
he did assert his claim in an earlier motion under Section 2255 and was denied relief.
Charles v. Chandler, 180 F.3d 753, 756 (6th Cir. 1999); United States v. Prevatte,

300 F.3d 792, 800 (7th Cir. 2002).
McLean's claims are primarily based upon events which occurred during his
original criminal proceedings, and thus could and should have been asserted during
his trial, direct appeal, or by motion under Section 2255. Pointdexter v. Nash, 333
F.3d 372, 378 (2d Cir. 2003) (habeas reliefunder Section 2241 is not available where

"for example, a prior motion under § 2255 has been made and a successive motion
under that section is disallowed by the court of appeals under the gatekeeping
provisions of 28 U.S.C. §§ 2244 and 2255.")

Because these claims, even if

meritorious, did not convict McLean of conduct "that the law does not make
criminal" in light of a Supreme Court decision handed down after his direct appeal
or first collateral attack on his conviction, they are not cognizable in a habeas corpus
proceeding under Section 2241. Townsendv. Davis, 83 F. App'x 728 (6th Cir. 2003)
("The only claim that this court has recognized as cognizable under § 2241 is a claim
of actual innocence based upon a new rule of law made retroactive by a Supreme
Court case, such as the claim raised in the case of Bailey v. United States, 516 U.S.
137, 116 S.Ct. 501, 133 L.Ed.2d 472 (1995).").
None of the claims asserted by McLean fall within this narrow exception.
McLean's first argument is essentially a reiteration of his "duplicity" arguments
asserted in his initial 2255 motion. His contention, that he cannot be convicted of
both a substantive offense and a conspiracy to commit that offense, is not predicated
upon Santos, and is one which he could, and should, have asserted at trial, on direct
appeal, or in his 2255 proceedings. His third, fourth, and fifth challenges - to the
sufficiency of the evidence used to convict him and to the sentence imposed - were
also raised in some fashion in his 2255 petition, and were denied by the trial court.
In addition, such claims are not cognizable in this 2241 proceeding. United States v.

Peterman, 249 F.3d 458, 462 (6th Cir. 2001) (holding that claims ofsentencing error

are not cognizable under § 2241); Graham v. Sanders, 77 F. App'x 799,801 (6th Cir.
2003) (holding that challenges to the sufficiency of evidence to support conspiracy
conviction could be raised on appeal and under Section 2255, rendering relief under
Section 2241 unavailable); Griffin v. Wiley, 141 F. App'x 843,844 (11th Cir. 2005).
McLean's second claim also fails to provide a basis for relief in this
proceeding.

McLean contends that under Santos he did not commit money

laundering because he used the proceeds from his mortgage scheme exclusively to
pay the expenses ofthe enterprise. The Supreme Court's decision in Santos was one
of statutory interpretation, was rendered nearly a year after McLean's conviction
became final on direct appeal, and a number of courts have determined that the
decision is retroactively applicable to cases on collateral review. Wooten v. Cauley,
677 F.3d 303, 306 (6th Cir. 2012) (collecting cases). Santos thus satisfies the
threshold requirement that a § 2241 petitioner predicate his or her claim for relief
upon a retroactively-applicable Supreme Court decision which (here, at least
potentially) narrows the scope of conduct proscribed by the statute of conviction.
Martin, 319 F.3d at 804.

Nonetheless, under these particular facts, McLean has failed to demonstrate
that his remedy under § 2255 was ineffective to test the legality of his detention.
Here, after Santos was decided, McLean was permitted to amend his § 2255 petition

to expressly assert claims predicated upon the Supreme Court's decision in Santos,
and the trial court considered and rejected those claims, both legally and factually.
Further, the Fourth Circuit considered and rejected the grounds for relief requested
by McLean is his motion for a certificate of appealability. Sixth Circuit law is clear
that a habeas petitioner cannot be allowed to use a § 2241 petition as a "second bite
at the apple," a de facto appeal from a trial court's denial of relief under § 2255.
Charles, 180 F.3d at 756 ("[T]he § 2255 remedy is not considered inadequate or
ineffective simply because § 2255 reliefhas already been denied[.]"). See also Lucas
v. Berkebile, No. 7:11-28-HRW, 2012 WL 2342888, at *2 (E.D. Ky. June 19,2012)
("Section 2241 is not an available to a petitioner who merely wishes to reargue claims
considered and rejected in a prior motion under Section 2255.")
In addition, when denying relief, the trial court stated that the evidence at trial
established that McLean had used the proceeds from his mortgage scheme not merely
to pay its expenses and its other participants, but to engage in new and further
criminal activity by transferring funds used to defraud Fannie Mae into a new effort
to commit a similar fraud upon Ginnie Mae, and for his own personal expenditures.
A federal court in a post-conviction proceeding may rely on the factual conclusions
made by an appellate court in the same case. Smith v. Snyder, 22 F. App'x 552, 553
(6th Cir. 2001) (citing Myers v. United States, 198 F.3d 615, 619 (6th Cir. 1999). For
these reasons, McLean's petition must be denied.

Accordingly, IT IS ORDERED that:

1.

McLean's petition for a writ of habeas corpus [R. 1] is DENIED.

2.

McLean's motion for status [R. 10] is GRANTED; McLean's motion

to appoint counsel [R. 10] is DENIED.
3.

The Court will enter an appropriate judgment.

4.

This matter is STRICKEN from the active docket.

This 2pt day of November, 2012.