Elgawhary v. USA - 2255
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
Civil Action No. DKC 17-1762
Criminal No. DKC 14-0068
UNITED STATES OF AMERICA
Presently pending and ready for resolution is a motion to
(ECF No. 87).
For the following reasons, the
motion to vacate will be denied.
EEHC subcontracted with private companies
to perform services on its behalf and PGESCo provided technical
assisted EEHC in identifying possible subcontractors, soliciting
bids and awarding contracts to perform work for EEHC.
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.”
(ECF No. 64-1, at 1).
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.
money “for the purpose of attempting to secure a competitive and
unfair advantage in the bidding process.”
(ECF No. 64-1, at 3).
obtained from these payments through financial institutions to
“disguise the nature and source of the funds.”
(Id. at 5).
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,
administration of the Internal Revenue laws and was sentenced to
Petitioner argued that after the decision of the
guilty to no longer constituted a crime.
(ECF No. 87, at 8).
The Government responded, (ECF No. 98), and Petitioner replied.
(ECF No. 101).
Cause & Prejudice Exception to Procedural Default
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
recognized an equitable exception to the bar, however, when a
habeas applicant can demonstrate cause and prejudice[.]”
States v. Pettiford, 612 F.3d 270, 280 (4th Cir. 2010).
procedural default based “on something external to the defense,
assistance of counsel.”
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).
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.
The Government concedes timeliness, but
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,
reasonably available when counsel would have known of the issue
served by making the argument or not.
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.
petitioner pled guilty to “using” a firearm in violation of 18
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
Id. at 622-23.
Here, Petitioner pled guilty to one count of mail fraud in
violation of 18 U.S.C. § 1341.
Petitioner contends that the
benefits was not reasonably available.
(ECF No. 87-1, at 10).
This argument, however, if applicable, nevertheless was readily
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.’”
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);
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
United States v. Jefferson, 674 F.3d 332, 356 (4th Cir. 2012).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,
This hazy line invited arguments that actions taken by public
whether a quid pro quo agreement existed.”
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.”
United States v. Jennings, 160 F.3d 1006,
Cir. 2014) (emphasis in the original).
Fourth Circuit’s test had an intent element, and any counsel
would argue that the government failed to prove the requisite
Thus, Petitioner’s argument was not only an available
argument but an expected one.
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,
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.
importance of the Supreme Court’s decision but rather whether
benefit was commonplace and routine.
Sometimes the argument
See, e.g., Valdes v. United States, 457 F.3d 1319
(D.C. Cir. 2007) (en banc).
Sometimes it did not.
Regardless, it was an available argument that Petitioner did not
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.
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).
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).
Both defendants went to trial
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
(ECF No. 18).
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
Standard of Review
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).
Bousley v. United States, 523 U.S. 614, 623
Successful actual-innocence gateway
pleas are “rare,” and “a petitioner does not meet the threshold
light of the new evidence, no juror, acting reasonably, would
McQuiggin, 133 S.Ct. at 1928.
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).
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).
Schlup v. Delo,
Here, Petitioner has not brought
cannot establish an actual innocence gateway.
Petitioner’s motion to vacate his sentence is procedurally
Honest Services Fraud
Even if Petitioner’s motion was not procedurally barred, it
would still be denied.
[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
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
Petitioner worked for both a private corporation and a publicprivate joint venture.
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
It is not clear whether a person who works solely for a
public-private joint venture would be a public official or a
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.
(ECF No. 87-1, at 12).
(ECF No. 87-1, at
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.”
136 S.Ct. at 2365.
Governor McDonnell committed or agreed to commit an ‘official
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.’”
Id. at 2369.
solely a public official.
The plea agreement states on numerous
Petitioner’s pre-trial motions practice emphatically stated that
this was a “private-sector honest-services mail and wire fraud
(See, e.g., ECF No. 53, at 1).
sentencing memorandum candidly acknowledges, “By accepting these
payments and concealing them from his employer, Dr. Elgawhary
violated his duty of honest services to Bechtel.”
(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.
Accordingly, McDonnell, a case applying, the
establish that the conduct Petitioner pled guilty to is not
Petitioner pled guilty to mail fraud in violation of 18
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.
18 U.S.C. § 1346 prohibits schemes to defraud
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).
Where an employee
“solicit[s] or accept[s] side payments from a third party in
third party, the employee commits honest services fraud.
As found in United States v. Lusk, No. 2:15-cr-00124, 2017
WL 508589, at *4 (S.D.W.Va. Feb. 2, 2017), honest services mail
[C]ase law establishes that — in the Fourth
Circuit and in the context of an honest services
defendant was the employee of the allegedly
harmed private-sector entity — the following
elements for an honest-services mail fraud
offense: (1) the existence of a fraudulent
scheme, see, e.g., United States v. Gibbs,
(citations omitted); (2) this fraudulent
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
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
elements of private sector honest services fraud.
was an employee at Bechtel.
Petitioner “owed a duty of loyalty
(ECF No. 64-1, at 12).
payments from the consultants representing power companies . . .
for the purpose of attempting to secure a competitive and unfair
advantage in the bidding process.”
furtherance of the scheme.
Thus, Petitioner’s plea establishes
his guilt for the offense of honest services mail fraud.3
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
In return, Pinson received money from the
The Fourth Circuit concluded:
established that both he and Pinson wanted
the University to choose W.E. Entertainment
as its 2011 concert promoter.
testified that he and Pinson expected to
receive a portion of the company’s preconcert $12,500 payment.
kickback was in addition to the disclosed
Pinson had with Joy and Robinson.
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.
government also established that Givens
received part of his expected kickback from
Robinson, and that Pinson later received 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
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
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”).
rational jury could find, based on the
evidence presented, that Pinson encouraged
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.
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
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 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).
Petitioner does not satisfy the above standard.
declines to issue a certificate of appealability.
For the foregoing reasons, the motion to vacate sentence
filed by Petitioner Asem Elgawhary will be denied.
order will follow.
DEBORAH K. CHASANOW
United States District Judge
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