Elgawhary v. USA - 2255
Filing
2
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 1/11/2018. (aos, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ASEM M. ELGAWHARY
:
v.
:
Civil Action No. DKC 17-1762
Criminal No. DKC 14-0068
:
UNITED STATES OF AMERICA
:
MEMORANDUM OPINION
Presently pending and ready for resolution is a motion to
vacate
sentence
(“Petitioner”).
filed
by
Petitioner
(ECF No. 87).
Asem
Elgawhary
For the following reasons, the
motion to vacate will be denied.
I.
Background
A.
Factual Background
Petitioner
(“Bechtel”),
was
a
construction,
an
global
and
a
joint
electrical
company,
called
corporation
project
established
(“EEHC”),
employee
Company (“PGESCo”).
Bechtel
involved
management.
venture
with
Egyptian
Power
of
the
In
engineering,
1993,
Egyptian
Electricity
Generation
in
Corporation
government’s
Holding
Engineering
Bechtel
and
Company
Services
EEHC subcontracted with private companies
to perform services on its behalf and PGESCo provided technical
and
management
construction
of
assistance
power
in
projects,
the
engineering,
including
for
design
EEHC.
and
PGESCo
assisted EEHC in identifying possible subcontractors, soliciting
bids and awarding contracts to perform work for EEHC.
From 1996
to 2011, Petitioner was “assigned by Bechtel to be the General
Manager at PGESCo.
During that time, . . . [Petitioner] was
employed by both Bechtel and PGESCo.”
His
responsibilities
bidding
process
included
and
oversight
assisting
subcontracting work.
(ECF No. 64-1, at 1).
in
of
the
selecting
competitive
companies
for
He had access to information about the
bidding process and access to key decision makers at EEHC who
had final responsibility for selecting the subcontractors.
From
2003
until
2011,
various
companies
paid
Petitioner
money “for the purpose of attempting to secure a competitive and
unfair advantage in the bidding process.”
Petitioner
received
concealed
all
employers.
over
$5,000,000
information
Petitioner
also
about
in
(ECF No. 64-1, at 3).
payments.
these
conspired
to
payments
move
the
Petitioner
from
his
money
he
obtained from these payments through financial institutions to
“disguise the nature and source of the funds.”
(Id. at 5).
To
cover-up the source of the payments further, Petitioner told
employees of the Internal Revenue Service that the money he
deposited into his savings accounts were from foreign relatives
and not from companies bidding on contracts with his employers.
On December 4, 2014, Petitioner pled guilty to mail fraud,
conspiracy
to
launder
money,
and
interference
with
the
administration of the Internal Revenue laws and was sentenced to
2
42
months
imprisonment,
followed
by
one
year
of
supervised
release.
B.
On
Procedural History
June
sentence.
26,
2017,
Petitioner
filed
a
motion
to
vacate
Petitioner argued that after the decision of the
Supreme
Court
States,
136
of
S.Ct.
the
United
2355
States
(2016),
the
in
McDonnell
conduct
guilty to no longer constituted a crime.
Accordingly,
Petitioner
challenged
the
v.
United
Petitioner
pled
(ECF No. 87, at 8).
validity
of
his
plea.
The Government responded, (ECF No. 98), and Petitioner replied.
(ECF No. 101).
II.
Cause & Prejudice Exception to Procedural Default
A.
Standard of Review
An issue may only be raised in a motion to vacate pursuant
to 28 U.S.C. § 2255 if it has not been procedurally defaulted.
If a claim could have been raised on direct appeal, and was not,
the general rule is that “claims not raised on direct appeal may
not
be
States,
raised
538
on
U.S.
collateral
500,
504
review[.]”
(2003).
Massaro
“The
v.
United
Supreme
Court
has
recognized an equitable exception to the bar, however, when a
habeas applicant can demonstrate cause and prejudice[.]”
United
States v. Pettiford, 612 F.3d 270, 280 (4th Cir. 2010).
demonstrate
cause,
the
petitioner
must
show
a
reason
for
To
a
procedural default based “on something external to the defense,
3
such
as
the
novelty
of
assistance of counsel.”
the
claim
or
a
denial
of
effective
United States v. Mikalajunas, 186 F.3d
490, 493 (4th Cir. 1999).
The petitioner must also demonstrate
that he suffers “actual prejudice” if his claim is not reviewed.
Brown v. Lee, 319 F.3d 162, 169 (4th Cir. 2003).
B.
Analysis
Petitioner’s motion was filed well after the normal one
year period for filing, but he claims that the motion is timely
because it was filed within a year of the new rule of law
announced in McDonnell.
it
argues
that
the
The Government concedes timeliness, but
motion
to
vacate
is
procedurally
barred
because Petitioner failed to raise the issue on direct appeal.
Failing to raise an argument on direct appeal is excused,
and the procedural bar removed, when, at the time of the plea,
the
argument
was
not
reasonably
available.
An
argument
is
reasonably available when counsel would have known of the issue
and
could
advise
whether
a
client’s
served by making the argument or not.
14 (1984).
interest
would
be
best
Reed v. Ross, 468 U.S. 1,
If a petitioner makes a “tactical decision to forgo
a procedural opportunity – for instance an opportunity to object
at trial or to raise an issue on appeal,” then the petitioner
cannot later show “cause” to excuse the procedural default.
In
Bousley
v.
United
States,
523
U.S.
614
Id.
(1998),
a
petitioner pled guilty to “using” a firearm in violation of 18
4
U.S.C. § 924(c)(1).
After the guilty plea, the Supreme Court
narrowed the conduct included under the definition of “use,” and
the petitioner filed a petition for a writ of habeas corpus
arguing that his actions no longer fit the definition of “use.”
The petitioner argued that “the legal basis for his claim was
not reasonably available to counsel at the time his plea was
entered” and therefore that his failure to raise the issue on
appeal should be excused.
Id. at 622.
The Court concluded the
argument was reasonably available because “at the time of [the]
petitioner’s plea, the Federal Reporters were replete with cases
involving challenges to the notion that ‘use’ is synonymous with
mere ‘possession.’”
Id. at 622-23.
Here, Petitioner pled guilty to one count of mail fraud in
violation of 18 U.S.C. § 1341.
argument
that
constitute
the
official
conduct
acts
the
Petitioner contends that the
Government
performed
in
benefits was not reasonably available.
identified
exchange
for
did
not
specific
(ECF No. 87-1, at 10).
This argument, however, if applicable, nevertheless was readily
available.
In United States v. Sun-Diamond Growers of Cal., 526 U.S.
398, 414 (1999), the Supreme Court held that “to establish a
violation of 18 U.S.C. § 201(c)(1)(A), the Government must prove
a link between a thing of value conferred upon a public official
and a specific ‘official act.’”
5
In fact, the Court relied on
Sun-Diamond in rejecting the Government’s argument in McDonnell.
136 S.Ct. at 2370.
Petitioner’s argument is essentially that
his plea did not fulfill the Court’s holding in Sun-Diamond. It
fails because, “at the time of [P]etitioner’s plea, the Federal
Reporters [and online legal databases] were replete with cases
involving challenges to the notion that” actions taken by public
officials were “official acts” done in exchange for benefits.
Bousley v. United States, 523 U.S. 614, 623 (1998); see, e.g.,
United States v. Verrusio, 762 F.3d 1, 11-15 (D.C. Cir. 2014);
United
States
v.
2006).
Petitioner
Abbey,
has
not
452
F.Supp.2d
alleged
766,
ineffective
769
(E.D.Mich.
assistance
of
counsel, and it would seem competent counsel would have advised
Petitioner on the advantages and disadvantages of raising such
an argument at trial and on appeal.
Moreover, at the time of the plea, the test the United
States Court of Appeals for the Fourth Circuit had established
for determining what qualified as honest services fraud required
a case-by-case determination.
According to the Fourth Circuit,
although “every act within the range of official duty c[ame]
within the purview of an ‘official act’,” the statute “d[id] not
encompass
every
action
taken
in
one’s
official
capacity[.]”
United States v. Jefferson, 674 F.3d 332, 356 (4th Cir. 2012).1
1
Petitioner relies on the decision of the trial judge in
United States v. Jefferson, No. 1:07-cr-209 (E.D.Va. Oct. 5,
6
This hazy line invited arguments that actions taken by public
officials
were
not
“official
acts”
official,
the
“official
and
Fourth
acts.”
non-official
Circuit
To
acts
distinguish
taken
instructed
by
courts
whether a quid pro quo agreement existed.”
a
to
between
public
“look
to
United States v.
McDonnell, 64 F.Supp.3d 783, 789 (E.D.Va. 2014) aff’d, 792 F.3d
478 (4th Cir. 2015), vacated and remanded, 136 S.Ct. 2355 (2016).
A quid pro quo agreement existed when “payments were made with
the intent of securing a specific type of official action or
favor in return.”
1014 (4th
United States v. Jennings, 160 F.3d 1006,
Cir. 2014) (emphasis in the original).
Thus, the
Fourth Circuit’s test had an intent element, and any counsel
would argue that the government failed to prove the requisite
intent.
Thus, Petitioner’s argument was not only an available
argument but an expected one.
Petitioner
misunderstands
the
test
for
“cause”
when
he
states that the decision in McDonnell was an “unanticipated” and
“major change in the legal landscape” excusing his failure to
raise the argument.
(ECF No. 101, at 4).
Even if true, the
inquiry for “cause” to excuse a default focuses on arguments,
not
decisions.
The
question
is
not
about
the
novelty
or
2017), to argue that the decision in McDonnell was “unexpected.”
The petitioner in Jefferson, however, avoided the procedural
default bar precisely because he consistently challenged the
government’s definition of official act.
Petitioner here had
the same opportunity, but did not take that tack.
7
importance of the Supreme Court’s decision but rather whether
the
argument
that
context
of
an
actions
were
led
honest
not
to
that
services
“official
decision
case,
actions”
the
done
benefit was commonplace and routine.
prevailed.
novel.
in
the
that
argument
In
the
exchange
for
a
Sometimes the argument
See, e.g., Valdes v. United States, 457 F.3d 1319
(D.C. Cir. 2007) (en banc).
United
was
States
v.
McDonough,
Sometimes it did not.
727
F.3d
143
(1st
See, e.g.,
Cir.
2013).
Regardless, it was an available argument that Petitioner did not
make.
Petitioner cites to McDonnell and United States v. Silver,
864 F.3d 102 (2d Cir. 2017), for his arguments on the merits, but
those cases undermine his procedural argument.
In McDonnell,
the defendant was offered a chance to plead guilty to one felony
charge and instead opted to go to trial on a 14-count indictment
and faced more than a decade in prison.
Rosalind S. Helderman
and Carol D. Leonnig, McDonnell rejected plea offer to face on
felony, spare wife any charges, avoid trial, Washington Post
(Jan. 23, 2014).
plea deal.
In Silver, the defendant chose not to seek a
Dareh Gregorian, Sheldon Silver wasn’t offered a
plea deal in his upcoming corruption trial: prosecutors, New
York Daily News (Oct. 30, 2015).
arguing
that
the
government
Both defendants went to trial
had
8
not
proved
they
accepted
benefits in exchange for official acts, both were found guilty,
both appealed, and both eventually won on appeal.
Petitioner did not make the argument and chose instead to
plead guilty pursuant to a plea agreement submitted pursuant to
Fed.R.Crim.P. 11 (c)(1)(C).
The grand jury had returned an
eight-count indictment against Petitioner which included four
counts of mail fraud, two counts of wire fraud, one count of
conspiracy
to
interfering
laws.
commit
with
the
money
administration
(ECF No. 18).
an agreement.
laundering,
of
and
the
one
count
Internal
of
Revenue
Petitioner and the Government negotiated
As part of the agreement, Petitioner benefited
from a reduced sentence.
The agreement included a carefully
crafted statement of facts designed to admit the minimum conduct
necessary to establish guilt for the charged crime.
Accordingly, Petitioner has not shown cause to excuse his
failure to raise the issue at trial and/or on appeal.
III. Actual Innocence Gateway
A.
Standard of Review
The
Supreme
Court
has
held
that
“actual
innocence,
if
proved, serves as a gateway through which a petitioner may pass”
to raise arguments that would otherwise be procedurally barred.
McQuiggin v. Perkins, 133 S.Ct. 1924, 1928 (2013).
“‘actual
innocence’
insufficiency.”
means
factual
innocence,
not
However,
mere
legal
Bousley v. United States, 523 U.S. 614, 623
9
(1998)(citation omitted).
Successful actual-innocence gateway
pleas are “rare,” and “a petitioner does not meet the threshold
requirement
unless
he
persuades
the
district
court
that,
in
light of the new evidence, no juror, acting reasonably, would
have
voted
to
find
him
guilty
beyond
a
reasonable
doubt.”
McQuiggin, 133 S.Ct. at 1928.
B.
Analysis
Petitioner asserts that even if he cannot show cause, the
court can review his petition because he has established an
actual innocence gateway.
(ECF No. 101, at 14).
To create an
actual innocence gateway, a petitioner must show that “in light
of new evidence it is more likely than not that no reasonable
juror would find him guilty beyond a reasonable doubt.”
v. Bell, 547 U.S. 518, 537 (2006) (emphasis added).
House
“Without
any new evidence of innocence, even the existence of a . . .
meritorious constitutional violation is not in itself sufficient
to establish a miscarriage of justice that would allow a habeas
court to reach the merits of a barred claim.”
513 U.S. 298, 316 (1995).
forward
any
new
evidence
Schlup v. Delo,
Here, Petitioner has not brought
to
suggest
innocence
and
therefore
cannot establish an actual innocence gateway.
Petitioner’s motion to vacate his sentence is procedurally
barred.
10
IV.
Honest Services Fraud
Even if Petitioner’s motion was not procedurally barred, it
would still be denied.
Petitioner asserts:
[He] was a public official of Egypt, and the
same definition of [18 U.S.C.] § 201 that
informed the meaning of honest-services
fraud in McDonnell can inform the court’s
assessment of [Petitioner’s] convictions.
In light of McDonnell, it is now clear that
[Petitioner] pleaded guilty to conduct in
Count One that is not illegal.
(ECF No. 87-1, at 8).
To conclude McDonnell applies, Petitioner
assumes
exclusively
that
he
was
a
public
official
and
that
honest services fraud can only be defined in reference to the
federal bribery statute, 18 U.S.C. § 201.
assumptions is correct.
Neither of these
Petitioner was a private employee, and
bribery has more than one possible definition.
Petitioner’s argument first creates a false dichotomy in
which
a
person
is
either
a
private
or
public
employee,
but
Petitioner worked for both a private corporation and a publicprivate joint venture.
private corporation.2
He was – at least - an employee of a
He breached a duty to that corporation,
took bribes as an employee of that company, and pled guilty to
2
It is not clear whether a person who works solely for a
public-private joint venture would be a public official or a
private employee.
11
private sector honest services fraud in relation to his conduct
as an employee of Bechtel.
Petitioner also assumes that the Government - and the court
- would have had to define honest services fraud by reference to
the federal bribery statute, 18 U.S.C. § 201.
13).
Section
bribery.
201,
however,
is
not
(ECF No. 87-1, at 12).
the
(ECF No. 87-1, at
only
definition
of
In McDonnell, the government
charged Governor Robert McDonnell with honest services fraud,
and the parties “agreed to define honest services fraud with
reference to the federal bribery statute.”
As
a
result,
“the
[g]overnment
was
136 S.Ct. at 2365.
required
to
prove
that
Governor McDonnell committed or agreed to commit an ‘official
act
in
exchange
Williams.’”
Id.
for
the
loans
and
gifts
from
[Jonnie]
The Court interpreted “official act” to mean
“mak[ing] a decision or tak[ing] an action on,” id. at 2370, “a
‘question’ or ‘matter’ . . . similar in nature to a ‘cause,
suit, proceeding or controversy.’”
Here,
the
Government
did
not
Id. at 2369.
agree
that
Petitioner
was
solely a public official.
The plea agreement states on numerous
occasions
a
that
he
owed
duty
to
a
private
corporation.
Petitioner’s pre-trial motions practice emphatically stated that
this was a “private-sector honest-services mail and wire fraud
prosecution.”
(See, e.g., ECF No. 53, at 1).
Petitioner’s
sentencing memorandum candidly acknowledges, “By accepting these
12
payments and concealing them from his employer, Dr. Elgawhary
violated his duty of honest services to Bechtel.”
at 3).
(ECF No. 71,
Moreover, the Government did not - and does not - agree
that the definition of bribery under 18 U.S.C. § 201 applies.
Other federal statutes supply different definitions for bribery,
see, e.g., 18 U.S.C. § 666, and kickbacks, see, e.g., 41 U.S.C.
§§ 8701, et seq.
definition
of
§
Accordingly, McDonnell, a case applying, the
201
bribery
to
a
public
official,
does
not
establish that the conduct Petitioner pled guilty to is not
illegal.
Petitioner pled guilty to mail fraud in violation of 18
U.S.C.
§§
1341
and
1346,
conspiracy
to
launder
money
in
violation of 18 U.S.C. § 1956(h), and interference with the
administration of the Internal Revenue laws in violation of 26
U.S.C. § 7212.
another
person
18 U.S.C. § 1346 prohibits schemes to defraud
of
the
intangible
right
of
honest
services.
Section 1346 prohibits employees from participating in a bribery
or kickback scheme “in violation of a fiduciary duty.”
v. United States, 561 U.S. 358, 407 (2010).
Skilling
Where an employee
“solicit[s] or accept[s] side payments from a third party in
exchange
for
making
these
misrepresentations”
to
benefit
third party, the employee commits honest services fraud.
the
Id. at
2010.
As found in United States v. Lusk, No. 2:15-cr-00124, 2017
13
WL 508589, at *4 (S.D.W.Va. Feb. 2, 2017), honest services mail
fraud
when
analyzed
expansively
contains
the
following
eight
elements:
[C]ase law establishes that — in the Fourth
Circuit and in the context of an honest services
mail
fraud
offense
where
the
defendant was the employee of the allegedly
harmed private-sector entity — the following
extensive
list
encompasses
the
present
elements for an honest-services mail fraud
offense: (1) the existence of a fraudulent
scheme, see, e.g., United States v. Gibbs,
Cir.
2005)
132
F.App’x
502,
503
(4th
(citations omitted); (2) this fraudulent
scheme
“deprive[d]
another
of
honest
services
through
bribes
or
kickbacks
supplied by a third party who had not been
deceived,” Skilling, 561 U.S. at 404; (3)
the defendant employee owed a fiduciary duty
to the harmed private-sector entity, see,
e.g., United States v. Evans, No. 2:14-cr00113, 2015 WL 1808904, at *4 (S.D.W.Va.
Apr. 21, 2015); (4) the defendant “employee
intended to breach a fiduciary duty,” United
States v. Vinyard, 266 F.3d 320, 327(4th Cir.
2001) (citation omitted); (5) the defendant
“employee foresaw or reasonably should have
foreseen that his employer might suffer an
economic harm as a result of the breach,”
id. (citation omitted); (6) the defendant
employee “acted with specific intent to
defraud,” United States v. Ham, 998 F.2d
Cir.
1993)
(citation
1247,
1254
(4th
omitted); (7) the fraudulent scheme must
include a “materiality of falsehood,” Neder
v. United States, 527 U.S. 1, 25 (1999); and
(8) the use of the mails in furtherance of
the scheme, e.g., Gibbs, 132 F.App’x at 503
(citation omitted).
Petitioner’s
guilty
plea
established
all
the
elements of private sector honest services fraud.
14
requisite
Petitioner
was an employee at Bechtel.
to Bechtel[.]”
Petitioner “owed a duty of loyalty
(ECF No. 64-1, at 12).
Petitioner “accepted
payments from the consultants representing power companies . . .
for the purpose of attempting to secure a competitive and unfair
advantage in the bidding process.”
and
misrepresented
material
furtherance of the scheme.
(Id.).
facts.
He
Petitioner concealed
used
the
mail
in
Thus, Petitioner’s plea establishes
his guilt for the offense of honest services mail fraud.3
The
Fourth
Circuit
similar circumstances.
recently
affirmed
a
conviction
under
In United States v. Pinson, 860 F.3d
152, 168-69 (4th Cir. 2017), the defendant, Jonathan Pinson, was
a public official and, along with another, had helped a company
obtain a contract to promote a concert at Pinson’s employer, a
state university.
company.
In return, Pinson received money from the
The Fourth Circuit concluded:
Regarding
Count
12,
Givens’s
testimony
established that both he and Pinson wanted
the University to choose W.E. Entertainment
as its 2011 concert promoter.
Givens also
testified that he and Pinson expected to
receive a portion of the company’s preconcert $12,500 payment.
This pre-concert
kickback was in addition to the disclosed
post-concert
profit-splitting
plan
that
Pinson had with Joy and Robinson.
The
3
Petitioner’s argument about his convictions for conspiracy
to launder money and for interference with the administration of
the Internal Revenue laws depends on vacating his plea to honest
services mail fraud.
Because the honest services mail fraud
plea remains valid, Petitioner’s argument about his other
offenses does not need to be addressed.
15
government also established that Givens
received part of his expected kickback from
Robinson, and that Pinson later received a
similar
portion
from
Robinson
electronically.
On
this
evidence,
a
rational jury could view Pinson’s expected
receipt of the kickback, coupled with his
actions on W.E. Entertainment's behalf, as a
scheme to defraud and deprive the University
and the citizens of South Carolina of his
honest services as Chairman of the Board of
Trustees of SCSU.
Pinson also aided Givens’s decision to sign
the actual concert promotion contract on
behalf
of
the
University
with
W.E.
Entertainment.
Givens’s signing of the
contract qualifies as an “official act,”
even under the more restrictive definition
that the Supreme Court recently adopted when
interpreting the term in a separate bribery
statute.
See McDonnell, 136 S.Ct. at 2371–
72 (holding that an “official act” needed to
be something more than “[s]etting up a
meeting, hosting an event, or calling an
official,” and instead was a decision or
action on a “question, matter, cause, suit,
proceeding or controversy” which involves “a
formal exercise of governmental power”).
A
rational jury could find, based on the
evidence presented, that Pinson encouraged
Givens
to
take
this
official
act
in
anticipation of the pre-concert kickback
that both officials expected to receive from
Joy and Robinson.
If steering a contract constitutes public sector honest services
mail fraud post-McDonnell, it also establishes private sector
honest services mail fraud.
Petitioner has not demonstrated that he is being held in
violation of the laws of the United States or the Constitution.
16
V.
Certificate of Appealability
Pursuant to Rule 11(a) of the Rules Governing Proceedings
under 28 U.S.C. §§ 2254 or 2255, the court is also required to
issue or deny a certificate of appealability when it enters a
final
order
adverse
to
the
petitioner.
A
certificate
of
appealability is a “jurisdictional prerequisite” to an appeal
from the court’s order.
659 (4th Cir. 2007).
United States v. Hadden, 475 F.3d 652,
A certificate of appealability may issue
“only if the applicant has made a substantial showing of the
denial
of
a
constitutional
motion
is
denied
appealability
demonstrate
debatable
on
will
both
whether
a
procedural
not
“(1)
the
right.”
issue
that
§
2253(c)(2).
ground,
unless
jurists
petition
of
states
a
the
certificate
petitioner
reason
a
Where
valid
would
claim
of
can
find
of
a
it
the
denial of a constitutional right and (2) that jurists of reason
would find it debatable whether the district court was correct
in its procedural ruling.”
Rose v. Lee, 252 F.3d 676, 684 (4th
Cir. 2001) (internal quotation marks omitted).
Upon
its
review
of
the
record,
the
court
Petitioner does not satisfy the above standard.
declines to issue a certificate of appealability.
17
finds
that
Accordingly, it
VI.
Conclusion
For the foregoing reasons, the motion to vacate sentence
filed by Petitioner Asem Elgawhary will be denied.
A separate
order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
18
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