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

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