LINDA R. READE, Chief District Judge.
Before the court is Sholom Rubashkin's motion to vacate, set aside or correct sentence (civil docket no. 3). Sholom Rubashkin ("the movant") filed such motion on September 30, 2013. With leave of court, the movant filed an amended motion pursuant to 28 U.S.C. § 2255 ("motion pursuant to 28 U.S.C. § 2255") on March 18, 2014; (civil docket no. 27-2).
In October and November of 2008, the government commenced criminal proceedings against the movant by filing criminal complaints against him. An October 30, 2008 criminal complaint charged the movant with immigration crimes, and a November 14, 2008 criminal complaint charged the movant with financial crimes. In November and December of 2008, the government presented evidence to the grand jury, and, after considering the evidence, the grand jury returned multiple indictments that charged the movant with immigration and financial crimes. The government alleged in a November 13, 2008 superseding indictment (criminal docket no. 80) that the movant committed immigration crimes, and the government alleged in a November 20, 2008 second superseding indictment (criminal docket no. 94) that the movant committed bank fraud when he diverted customer payments on accounts receivable and caused Agriprocessors' books to reflect an inflated amount for accounts receivable which in turn he offered as collateral for bank loans.
Third Superseding Indictment (criminal docket no. 150) at 14-15.
On January 15, 2009, the grand jury returned a fourth superseding indictment (criminal docket no. 177), which, among other things, greatly expanded the number of counts alleging that the movant committed financial crimes. On March 31, 2009, the grand jury returned a fifth superseding indictment (criminal docket no. 413). On May 14, 2009, the grand jury returned a sixth superseding indictment (criminal docket no. 464), which, among other things, greatly expanded the number of counts alleging that the movant committed immigration crimes.
On July 16, 2009, a grand jury returned a 163-count seventh superseding indictment (criminal docket no. 544) against the movant. Count 1 charged the movant with conspiracy to harbor undocumented aliens for profit, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(v)(I) and 1324(a)(1)(B)(i). Counts 2 through 70 charged the movant with harboring and aiding and abetting the harboring of undocumented aliens for profit, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iii), 1324(a)(1)(A)(iv), 1324(a)(1)(A)(v)(II) and 1324(a)(1)(B)(i). Count 71 charged the movant with conspiracy to commit document fraud, in violation of 18 U.S.C. § 371. Count 72 charged the movant with aiding and abetting document fraud, in violation of 18 U.S.C. §§ 1546(a) and 2. Counts 73 through 86 charged the movant with bank fraud, in violation of 18 U.S.C. § 1344. Counts 87 through 110 charged the movant with the making of false statements and reports to a bank, in violation of 18 U.S.C. § 1014. Counts 111 through 124 charged the movant with wire fraud, in violation of 18 U.S.C. § 1343. Counts 125 through 133 charged the movant with mail fraud, in violation of 18 U.S.C. § 1341. Counts 134 through 143 charged the movant with money laundering and aiding and abetting money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i), 1956(a)(1)(B)(i) and 2. Counts 144 through 163 charged the movant with willful violation of an order of the secretary of agriculture and aiding and abetting a willful violation of an order of the secretary of agriculture, in violation of 7 U.S.C. § 195 and 18 U.S.C. § 2.
Pursuant to the movant's motion (criminal docket no. 497), the court ordered separate trials on counts 1 through 72 ("Immigration Counts") and counts 73 through 143 ("Financial Counts").
Rubashkin, 655 F.3d at 855 (fourth through ninth alteration in original). On November 12, 2009, the jury returned guilty verdicts on renumbered counts 1 through 71, 73 through 80, 84 through 89 and 91—fourteen counts of bank fraud, twenty-four counts of making false statements and reports to a bank, fourteen counts of wire fraud, nine counts of mail fraud, ten counts of money laundering and fifteen counts of violating an order of the Secretary of Agriculture to timely pay suppliers of livestock. See Verdict Forms (criminal docket no. 736). The jury returned not guilty verdicts on renumbered counts 72, 81, 82, 83 and 90—five counts of violating an order of the Secretary of Agriculture to timely pay suppliers of livestock. Id. On November 19, 2009, the courtgranted thegovernment's motion to dismiss without prejudice the Immigration Counts and related criminal forfeiture provisions. See Nov. 19, 2009 Order (criminal docket no. 746). The allegations underlying the Immigration Counts dealt with theMay 12, 2008 worksite enforcement action by Immigration and Customs Enforcement ("ICE").
On February 22, 2010, theprobation office filed a draft presentence report. See Draft Presentence Report (criminal docket no. 845). On March 1, 2010, the court denied the movant's motion for judgment of acquittal and combined motion for judgment of acquittal and motion for new trial. See Mar. 1, 2010Order (criminal docket no. 854).
On March 8, 2010, the parties filed objections to the draft presentence report. See Gov't Objection (criminal docket no. 859); Defendant Objection (criminal docket no. 860). On April 12, 2010, the movant filed a sentencing memorandum (criminal docket no. 879), and a motion for downward departure and/or variance (criminal docket no. 880). On that same date, the government filed a sentencing memorandum (criminal docket no. 883). On April 14, 2010, the probation office filed the final presentence report (criminal docket no. 887).
From April 28 to April 29, 2010, the court held a sentencing hearing. The court heard evidence and gave the movant his right of allocution. See Minute Entries (criminal docket nos. 910 & 912). The court took the sentencing issues, including the issue that the loss amount was too high because the government threatened forfeiture of Agriprocessors' assets, which allegedly reduced the sale price of Agriprocessors' assets during bankruptcy proceedings, under advisement. On June 21, 2010, the court filed a sentencing memorandum, detailing the court's interpretation and computation of the Guidelines, revealing the sentence the court intended to impose after considering all of the factors under 18 U.S.C. § 3553(a), discussing the evidence supporting the court's sentence and declining to vary from the advisory Guidelines range. See Sentencing Memorandum (criminal docket no. 927). On June 22, 2010, the sentencing hearing reconvened, and the court imposed a sentence at the low end of the advisory Guidelines range. See Minute Entry (criminal docket no. 928); Judgment (criminal docket no. 929). On that same date, judgment entered against the movant. See Judgment (criminal docket no. 929). On July 2, 2010, the movant filed a notice of appeal. See Notice of Appeal (criminal docket no. 932).
On August 5, 2010, the movant filed a motion for a new trial under Federal Rule of Criminal Procedure 33(b)(1). See Motion for New Trial (criminal docket no. 942). On October 27, 2010, the court denied the movant's motion for a new trial. See Oct. 27, 2010 Order (criminal docket no. 958). On November 8, 2010, the movant filed an additional notice of appeal. See Second Notice of Appeal (criminal docket no. 959).
On September 16, 2011, the Eighth Circuit Court of Appeals addressed several issues, including: (1) whether the court's meetings with ICE and the United States Attorney's Office created an appearance of partiality that necessitated recusal; (2) whether the court erred in ordering the jury trial on the Financial Counts to commence first, deciding a number of evidentiary issues and instructing the jury; (3) whether the court correctly determined that there was sufficient evidence of money laundering; and (4) whether the court miscalculated the loss involved in the movant's fraud and failed to consider all of the sentencing factors under 18 U.S.C. § 3553(a). See Rubashkin, 655 F.3d at 857-69.After the Eighth Circuit Court of Appeals resolved the movant's claims on direct appeal, the movant filed a petition for a writ of certiorari. See Notice of Petition for Writ of Certiorari (criminal docket no. 972). The Supreme Court denied such petition on October 1, 2012. See Rubashkin v. United States, ___ U.S. ___, 133 S.Ct. 106 (2012).
On October 4, 2013, the court considered the parties' proposed scheduling of the proceedings under 28 U.S.C. § 2255 and directed them to respond in a particular manner. See Oct. 4, 2013 Order (civil docket no. 4). On November 22, 2013, the government filed a motion to dismiss and an answer. See Motion to Dismiss (civil docket no. 5); Answer (civil docket no. 6). On December 11, 2013, the government filed an amended answer. See Amended Answer (civil docket no. 10). On January 29, 2014, the movant filed a motion to recuse. See Motion to Recuse (civil docket no. 12). On March 18, 2014, the movant filed a motion to amend his motion pursuant to 28 U.S.C. § 2255. See Motion for Leave to Amend (civil docket no. 27). On January 20, 2016, the court denied the movant's motion to recuse. See Jan. 20, 2016 Order (civil docket no. 42). On that same date, the court granted the movant's motion to amend his motion pursuant to 28 U.S.C. § 2255, denied the government's motion to dismiss and established a briefing schedule. See Jan. 20, 2016 Order (civil docket no. 43).
On March 21, 2016, the movant filed a merits brief, a motion for leave to take discovery and a motion for an evidentiary hearing. See Merits Brief (civil docket no. 44); Motion for Leave to Take Discovery (civil docket no. 45); Motion for Evidentiary Hearing (civil docket no. 46). In addition, the movant submitted an appendix. See Movant App'x (civil docket no. 44-1). On May 19, 2016, the government filed a responsive brief opposing the motion pursuant to 28 U.S.C. § 2255, the motion for leave to take discovery and the motion for an evidentiary hearing. See Responsive Brief (civil docket no. 52). In addition, the government submitted an appendix. See Gov't App'x (civil docket no. 52-1). On June 20, 2016, the movant filed a reply brief. See Reply Brief (civil docket no. 53). On that same date, he submitted a supplemental appendix. See Movant Supplemental App'x (civil docket no. 53-1). The motion pursuant to 28 U.S.C. § 2255 and related issues are fully submitted and ready for decision.
The movant generally asserts that he presented evidence of the government's improper use of forfeiture and interference in the bankruptcy case during the sentencing hearing and, after hearing the testimony of a rebuttal witness, the court incorrectly calculated the loss amount. The movant alleges that previously undisclosed evidence proves that the government knowingly presented false and/or misleading sentencing testimony. He states that detailed notes from a meeting involving prosecutors and the bankruptcy trustee indicate that prosecutors did in fact impose restrictions that they denied imposing during the sentencing hearing. He also states that the government failed to disclose information regarding the impact that the government's assertion of its rights to criminal forfeiture had on the bankruptcy process and information regarding the nature and extent of its role in the bankruptcy process. He maintains that, if the government had disclosed the truth, it is likely that the court: (1) would have found that the government's pursuit of criminal forfeiture depressed the bankruptcy auction sale process such that the bankruptcy trustee could not realize a sale price in excess of the fraud victims' debt and (2) would have calculated a sentencing Guidelines range between thirty and thirty-seven months imprisonment. The movant asserts that the court must vacate his sentence and resentence him in a hearing that is free from false and/or misleading testimony and that fully takes into account the effects of the government's conduct on the loss amount.
The movant asserts that the government cannot plausibly claim that it pursued forfeiture to protect against the dissipation of assets. He maintains that it is clear that: (1) the government used forfeiture to impose restrictions on the future ownership and operation of Agriprocessors, that is, to prevent the movant's father, Aaron Rubashkin, from having a role even though the government never charged him; (2) the government's use of criminal forfeiture hurt the victims it is duty-bound to protect; (3) the government focused on punishing Aaron Rubashkin rather than protecting the victims of the fraud offense; and (4) neither FBBC nor the bankruptcy trustee wanted the government to pursue forfeiture.
After observing that the government's use of forfeiture suffered from numerous defects and noting that the government unlawfully sought to forfeit either assets that an uncharged third-party held or assets that had no nexus to criminal offenses, the movant makes numerous assertions relating to the purpose for pursing forfeiture, the effect it had on potential bidders, the sale price and the sentencing Guidelines range, the government's misconduct, the testimony of Paula Roby and the need to readdress the calculation of loss. The court summarizes them below.
In support of his assertions, the movant refers to: the December 4, 2008 meeting that government counsel referred to in the government's December 8, 2008 letter to Lloyd Palans; the December 5, 2008 meeting that included the bankruptcy trustee, the bankruptcy trustee's criminal counsel, the bankruptcy trustee's other counsel, including Paula Roby, and government counsel, see Movant App'x (civil docket no. 44-1) at 88-98, 170-77; the December 9, 2008 letter that Lloyd Palans sent government counsel in response to the government's December 8, 2009 letter, see id. at 86-87; the affidavit of the bankruptcy trustee, see id. at 43-45; the affidavit of Eli Soglowek, see id. at 99-100; the affidavits of individuals on behalf of prospective bidders, see id. at 46-54, 103-112, 123-24; the March 24, 2009 default letter that FBBC's counsel sent the bankruptcy trustee, see id. at 113-15; the July 16, 2009 seventh superseding indictment, see Seventh Superseding Indictment (criminal docket no. 544); the July 14, 2009 letter to Anita Shodeen, see Movant App'x (civil docket no. 44-1) at 118-19; the July 15, 2009 correspondence between the Deputy Attorney General of Iowa and the government, see id. at 116-17; the July 30, 2009 letter from Jay Eaton, on behalf of SHF Industries, LLC, see id. at 120-22; the testimony of Paula Roby, see id. at 30-42; and the June 10, 2011 valuation report of Triax Capital Advisors, LLC, see id. at 55-83.
The movant alleges that the government withheld exculpatory information regarding the purpose of financial transactions that the government characterized as money laundering. The movant states that the relevant time period included hundreds of financial transactions that undermined the government's assertion that he laundered money and admissions from a key cooperating witness would have established that the financial transactions that support his money laundering convictions facilitated something other than money laundering. The movant claims that the government failed to disclose information that addressed his intent when transferring money among accounts. The movant cites to Mitchel Meltzer's January 29, 2014 statement, in which he states that he recalled mentioning to prosecutors and agents that the movant moved money between accounts to play the float and that he did not believe that the movant intended to defraud FBBC when doing so. See id. at 164-65.
The government denies that it failed to disclose information that demonstrates it influenced the bankruptcy trustee and prospective buyers or elicited perjury when Paula Roby testified about the existence of an agreement not to hire Rubashkins, bidding procedures and other matters related to the sale of Agriprocessors' assets during bankruptcy proceedings. The government argues that the movant conflates key terminology, shamelessly omits dispositive facts and furtively relies upon documentary evidence that the government disclosed prior to the sentencing hearing to support his assertion that a constitutional violation occurred. The government asserts that it never claimed that it did not intend to pursue forfeiture if the Rubashkins regained control of Agriprocessors, publicly announced its intention in pursuing forfeiture within days of including a forfeiture allegation in the December 11, 2008 third superseding indictment and disclosed to the movant documents that reiterated the forfeiture position that it had publicly disclosed. The government points out that the movant fails to mention the documents that the government disclosed prior to the sentencing hearing and relies on a disingenuous and inaccurate reading of the sentencing record when asserting that the government committed misconduct by knowingly presenting false testimony. The government emphasizes that the movant's latest attempt to rewrite the history of his case and cast his convictions and sentences as unjust is not a proper basis to grant relief.
In response to the movant's arguments, the government makes a plethora of arguments relating to: (1) the disclosure of the government's forfeiture position and the movant's reliance on newly discovered evidence; (2) the legality of the government's forfeiture position; (3) the testimony of Paula Roby; (4) the impact of the government's forfeiture position on the loss amount; and (5) the inability to establish cause and prejudice to overcome procedurally defaulted assertions. The court summarizes them below.
The government denies that it violated Brady by withholding information that Mitchel Meltzer disclosed prior to trial. The government points out that it disclosed Mitchel Meltzer as an individual who cooperated with law enforcement and it provided the movant with the September 9, 2009 FBI report of the interview of Mitchel Meltzer, which indicated that: Mitchel Meltzer was aware of the larger fraud scheme within Agriprocessors; Mitchel Meltzer was surprised when he learned that Agriprocessors' checks were being deposited into the depository account to cover prior diversions; the author of the report stepped out of the interview when certain topics were discussed, and the author was given a summary of what was discussed during his absence; the movant lost the two-day float when banking laws changed; the two-day float was critical to the movant; and Mitchel Meltzer understood how the movant was creating float when he saw checks written for Torah Education and Kosher Community Grocery. See Gov't App'x (civil docket no. 52-1) at 164-75. The government contends that no Brady violation occurred given what occurred prior to and during trial and what Mitchel Meltzer included in his January 20, 2014 statement.
In support of its position that no Brady violation occurred, the government makes a number of arguments. First, the government argues that Mitchel Meltzer's statement is inculpatory, rather that exculpatory, in that it made clear that the movant was check-kiting. The government emphasizes that Mitchel Meltzer's opinion regarding the movant's check-kiting is just another way of defrauding a financial institution. The government maintains that the movant's desire to check-kite and his desire to launder money were not mutually exclusive and that playing the float some of the time does not prove that he failed to launder money at other times.
Second, the government argues that Mitchel Meltzer's opinion that the movant did not intend to defraud FBBC when transferring money among accounts lacks foundation because Mitchel Meltzer testified at trial that he was first made aware of the transfers between accounts at Agriprocessors, Torah Education and Kosher Community Grocery only when the FBI asked him questions about them. It states that Mitchel Meltzer's speculative opinion about the movant's intent when making transfers between accounts would have been inadmissible at trial and of little assistance to the jury because Mitchel Meltzer only formed such opinion after the FBI questioned him. Given the nature of Mitchel Meltzer's opinion, the government maintains that it falls short of being material to the issue of guilt.
Third, the government argues that Mitchel Meltzer's statement is cumulative of information that the government disclosed prior to trial and cumulative of evidence that the jury considered. The government points to a report of the July 31, 2009 interview with Yomtov Bensasson, Agriprocessors' chief financial officer, and his testimony during trial. The government contends that the facts supporting the use of the float for business purposes was well-known to the movant and he cannot credibly claim that his own intent in moving money between accounts was hidden from him by the government. Regarding the former contention, the government emphasizes that: (1) Yomtov Bensasson testified that Agriprocessors played the float and by doing so automatically left Agriprocessors' receivables higher and (2) the movant maintained during closing argument that no money was diverted when taking advantage of the float. Regarding the latter contention, the government emphasizes that the movant testified that he did not see the whole purpose for the whole thing, that is, the "rounding up" of checks and transferring money between accounts, and it could have been Mitchel Meltzer or Yomtov Bensasson who had a reason for doing so.
Fourth, the government argues that the movant knew of the float and who had information about it and, if he thought Mitchel Meltzer possessed information favorable to him, he should have sought testimony from Mitchel Meltzer or presented other evidence. The government emphasizes that the movant's assertion that Mitchel Meltzer's statements are favorable to his defense is dubious in light of the fact that the movant disclaimed any understanding of the purpose behind rounding up deposits and attempted to blame the transactions on Mitchel Meltzer or Yomtov Bensasson.
Lastly, the government argues that Mitchel Meltzer's statement fails to account for the evidence that showed the movant intended to conceal his fraud by manipulating the amounts of the transfers between accounts to make customer cash diversions look like round-number transfers and to make replacement transfers look like customer payments. The government maintains that: (1) the movant fails to offer any explanation as to why he thought it was necessary to manipulate financial transactions at all and (2) the inclusion of a rounded-up check with other deposits to hide the fact that the deposits contained diverted customer payments clearly constitutes money laundering. The government emphasizes that the movant has offered no defense to the more than $25,000,000 that he laundered by concealing the fact that he rounded checks up before depositing them into Agriprocessors' operating account.
In sum, the government maintains that Mitchel Meltzer's opinion is neither exculpatory nor material and it is cumulative of information that the government disclosed and evidence that the movant presented. Additionally, the government maintains that, regardless of Mitchel Meltzer's opinion, the movant is unable to establish that he suffered any prejudice because the jury would have returned the same verdicts.
In his reply brief, the movant reiterates assertions that he made in his merits brief and makes numerous arguments. The court summarizes those arguments below.
With respect to his contention that the government withheld information that indicated Mitchel Meltzer thought the movant moved money between accounts to play the float and believed he did not intend to defraud FBBC when doing so, the movant asserts that the government does not deny that Mitchel Meltzer made statements concerning the float and his intent and these statements are material for purposes of Brady. The movant asserts that the government overlooks the fact that the non-disclosure of Mitchel Meltzer's statements had an effect on calculating his Guidelines sentencing range and calls into doubt the validity of the movant's money laundering convictions.
In support of his assertions regarding punishment, the movant argues that: (1) the government previously stated that the third-party accounts, that is, the Torah Education and Kosher Community Grocery accounts, were only being used for the specific purpose of allowing repayments to be made to FBBC from some source other than Agriprocessors itself; (2) the government had to characterize the transactions from the Torah Education and Kosher Community Grocery accounts in this way to prove "sophisticated laundering" under USSG §2S1.1(b)(3); (3) Mitchel Meltzer's undisclosed statements undermine the basis for a two-level enhancement because they establish that the use of the Torah Education and Kosher Community Grocery accounts had nothing to do with concealment and only were designed to "play the float"; and (4) there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the sentencing proceeding would have been different.
Concerning the validity of his money laundering convictions, the movant maintains that additional evidence of relatively minor importance might have been sufficient to create reasonable doubt because the government presented a "flimsy" money laundering case based on checks being written in odd amounts. He states that some transactions are inconsistent with the government's theory that he used the Torah Education and Kosher Community Grocery accounts to conceal the fact that Agriprocessors was the source of funds and there is at least a reasonable probability that testimony from a longtime employee of Agriprocessors would have caused the jury to return not guilty verdicts on the money laundering charges. The movant asserts that Yomtov Bensasson's statement to the FBI and testimony during trial does not render Mitchel Meltzer's statements immaterial or cumulative because Mitchel Meltzer's statements are different in that they do not provide an unlawful purpose for transferring funds. He emphasizes that Mitchel Meltzer's statements provide that extending the time of the float and helping with short-term cash flow management were the only reasons for moving funds to the Torah Education and Kosher Community Grocery accounts.
Additionally, with respect to Mitchel Meltzer's opinion about the lack of intent to defraud when transferring funds, the movant contends that: (1) courts have admitted such testimony; (2) the government's narrow focus on admissibility ignores how Mitchel Meltzer's opinion would have allowed defense counsel to understand what to expect when cross-examining him, especially considering that cross-examination of a witness who is sympathetic is very different that cross-examination of a witness who is hostile; and (3) the government cannot reasonably maintain that the movant should have asked blind questions without knowing what Mitchel Meltzer disclosed, especially considering that Mitchel Meltzer was an admitted liar and had an incentive to offer testimony that favored the government.
Lastly, the movant takes issue with the government's assertion that the inclusion of an inculpatory opinion nullifies the duty to disclose information. He emphasizes that Mitchel Meltzer's opinion about the movant's lack of any intent to defraud FBBC relates to all of the charges, not just the money laundering charges, and reiterates that there is a substantial difference between being punished for convictions based solely on fraud charges and being punished for convictions based on fraud charges and money laundering charges. The movant states that the government clearly recognizes such differences because it went to great lengths to defend the validity of the money laundering convictions on direct appeal. He maintains that the government should not be permitted to take inconsistent positions—that is, argue that the money laundering charges did not rely on the same financial transactions as the bank fraud transactions on direct appeal and argue that the money laundering charges and bank fraud charges are equivalent in this proceeding.
"A judge may, for good cause, authorize a party to conduct discovery under the Federal Rules of Criminal Procedure or Civil Procedure, or in accordance with the practices and principles of law." Rule 6(a), Rules Governing Section 2255 Proceedings for the United States District Courts. In order to establish "good cause," the movant must demonstrate that the record, supplemented by the discovery requested, may entitle the movant to relief. See Dyer v. United States, 23 F.3d 1421, 1424 (8th Cir. 1994) ("We find no abuse of discretion in the district court's denial of [the movant's] motions for discovery because [the movant] did not show how the evidence he sought would establish his innocence."); see also United States v. Fields, 761 F.3d 443, 478 (5th Cir. 2014) ("A petitioner demonstrates `good cause' under Rule 6(a) `where specific allegations before the court show reason to believe that the petitioner may, if the facts are fully developed, be able to demonstrate that he is . . . entitled to relief.'" (quoting Bracy v. Gramley, 520 U.S. 899, 904 (1997))).
The court finds that the movant has not demonstrated the requisite "good cause" to conduct discovery. The current record adequately allows the court to evaluate the movant's remaining grounds for relief, and the discovery requested, if produced, would not entitle the movant to relief. Accordingly, the court shall deny the motion for leave to take discovery.
A district court is given discretion in determining whether to hold an evidentiary hearing on a motion under 28 U.S.C. § 2255. See United States v. Oldham, 787 F.2d 454, 457 (8th Cir. 1986). In exercising that discretion, the district court must determine whether the alleged facts, if true, entitle the movant to relief. See Payne v. United States, 78 F.3d 343, 347 (8th Cir. 1996). Accordingly, a district court may summarily dismiss a motion brought under 28 U.S.C. § 2255 without an evidentiary hearing "if (1) the . . . allegations, accepted as true, would not entitle the [movant] to relief, or (2) the allegations cannot be accepted as true because they are contradicted by the record, inherently incredible, or conclusions rather than statements of fact." Engelen v. United States, 68 F.3d 238, 240-41 (8th Cir. 1995) (citations omitted); see also Delgado v. United States, 162 F.3d 981, 983 (8th Cir. 1998) (stating that an evidentiary hearing is unnecessary where allegations, even if true, do not warrant relief or allegations cannot be accepted as true because they are contradicted by the record or lack factual evidence and rely on conclusive statements); United States v. Hester, 489 F.2d 48, 50 (8th Cir. 1973) (stating that no evidentiary hearing is necessary where the files and records of the case demonstrate that relief is unavailable or where the motion is based on a question of law). Stated differently, the court can dismiss a 28 U.S.C. § 2255 motion without a hearing where "the files and records of the case conclusively show that the prisoner is entitled to no relief." 28 U.S.C. § 2255(b); accord Standing Bear v. United States, 68 F.3d 271, 272 (8th Cir. 1995) (per curiam).
The court concludes that it is able to resolve ground one and ground three from the record. See Rogers v. United States, 1 F.3d 697, 699 (8th Cir. 1993) (holding that "[a]ll of the information that the court needed to make its decision with regard to [the movant's] claims was included in the record" and, therefore, the court "was not required to hold an evidentiary hearing" (citing Rule Governing Section 2255 Proceedings 8(a) and United States v. Raddatz, 447 U.S. 667, 674 (1980))). The evidence of record conclusively demonstrates that the movant is not entitled to the relief sought. Specifically, it indicates that the movant's assertions are meritless, frivolous and/or malicious. As such, the court finds that there is no need for an evidentiary hearing. The court shall deny the movant's motion for an evidentiary hearing.
A prisoner in custody under sentence of a federal court is able to move the sentencing court to vacate, set aside or correct a sentence. See 28 U.S.C. § 2255(a). To obtain relief pursuant to 28 U.S.C. § 2255, a federal prisoner must establish: (1) "that the sentence was imposed in violation of the Constitution or laws of the United States"; (2) "that the court was without jurisdiction to impose such sentence"; (3) "that the sentence was in excess of the maximum authorized by law"; or (4) "[that the judgment or sentence] is otherwise subject to collateral attack." Id.; see also Hill v. United States, 368 U.S. 424, 426-27 (1962) (listing four grounds upon which relief under 28 U.S.C. § 2255 may be claimed); Watson v. United States, 493 F.3d 960, 963 (8th Cir. 2007) (same); Lee v. United States, 501 F.2d 494, 499-500 (8th Cir. 1974) (clarifying that subject matter jurisdiction exists over enumerated grounds within the statute); Rule 1, Rules Governing Section 2255 Proceedings (specifying scope of 28 U.S.C. § 2255). If any one of the four grounds is established, the court is required "to vacate and set the judgment aside and [it is required to] discharge the prisoner or resentence him or grant a new trial or correct the sentence as may appear appropriate." 28 U.S.C. § 2255(b).
When enacting 28 U.S.C. § 2255, Congress "intended to afford federal prisoners a remedy identical in scope to federal habeas corpus." Sun Bear v. United States, 644 F.3d 700, 704 (8th Cir. 2011) (en banc) (quoting Davis v. United States, 417 U.S. 333, 343 (1974)). Although it appears to be broad, 28 U.S.C. § 2255 does not provide a remedy for "all claimed errors in conviction and sentencing." Id. (quoting United States v. Addonizio, 442 U.S. 178, 185 (1979)). Rather, 28 U.S.C. § 2255 is intended to redress constitutional and jurisdictional errors and, apart from those errors, only "fundamental defect[s] which inherently result[] in a complete miscarriage of justice" and "omission[s] inconsistent with the rudimentary demands of fair procedure." Hill, 368 U.S. at 428; see also Sun Bear, 644 F.3d at 704 (clarifying that the scope of 28 U.S.C. § 2255 is "severely limited" and quoting Hill, 368 U.S. at 428); United States v. Apfel, 97 F.3d 1074, 1076 (8th Cir. 1996) ("Relief under 28 U.S.C. § 2255 is reserved for transgressions of constitutional rights and for a narrow range of injuries that could not have been raised on direct appeal and, if uncorrected, would result in a complete miscarriage of justice." (citing Poor Thunder v. United States, 810 F.2d 817, 821 (8th Cir. 1987))). A collateral challenge under 28 U.S.C. § 2255 is not interchangeable or substitutable for a direct appeal. See United States v. Frady, 456 U.S. 152, 165 (1982) (making clear that a motion pursuant to 28 U.S.C. § 2255 will not be allowed to do service for an appeal). Consequently, "an error that may justify reversal on direct appeal will not necessarily support a collateral attack on a final judgment." Id. (quoting Addonizio, 442 U.S. at 184).
The law of the case doctrine has two branches. See Ellis v. United States, 313 F.3d 636, 646 (1st Cir. 2002). The first branch involves the "mandate rule (which, with only a few exceptions, forbids, among other things, a lower court from relitigating issues that were decided by a higher court, whether explicitly or by reasonable implication, at an earlier stage of the same case)." Id. The second branch, which is somewhat more flexible, provides that "a court ordinarily ought to respect and follow its own rulings" throughout subsequent stages of the same litigation. Id.; see also United States v. Bloate, 655 F.3d 750, 755 (8th Cir. 2011) ("The [law of the case] doctrine applies only to actual decisions—not dicta—in prior stages of the case."); Roth v. Sawyer-Cleator Lumber Co., 61 F.3d 599, 602 (8th Cir. 1995) ("Law of the case applies only to issues actually decided, either implicitly or explicitly, in the prior stages of a case."). "[R]ulings are the law of the case and will not be disturbed absent an intervening change in controlling authority." Baranski v. United States, 515 F.3d 857, 861 (8th Cir. 2008); see also Davis, 417 U.S. at 342 (observing that law of the case did not preclude relief under 28 U.S.C. § 2255 because of intervening change in the law).
Hence, in collateral proceedings based on 28 U.S.C. § 2255, "[i]ssues raised and decided on direct appeal cannot ordinarily be relitigated." United States v. Wiley, 245 F.3d 750, 752 (8th Cir. 2001) (citing United States v. McGee, 201 F.3d 1022, 1023 (8th Cir. 2000)); see also Lefkowitz v. United States, 446 F.3d 788, 790-91 (8th Cir. 2006) (concluding that the same issues that have been raised in a new trial motion and decided by the district court cannot be reconsidered in a subsequent collateral attack); Bear Stops v. United States, 339 F.3d 777, 780 (8th Cir. 2003) ("It is well settled that claims which were raised and decided on direct appeal cannot be relitigated on a motion to vacate pursuant to 28 U.S.C. § 2255." (quoting United States v. Shabazz, 657 F.2d 189, 190 (8th Cir. 1981))); Dall v. United States, 957 F.2d 571, 572-73 (8th Cir. 1992) (per curiam) (concluding that claims already addressed on direct appeal could not be raised); United States v. Kraemer, 810 F.2d 173, 177 (8th Cir. 1987) (concluding that a movant could not "raise the same issues . . . that have been decided on direct appeal or in a new trial motion"); Butler v. United States, 340 F.2d 63, 64 (8th Cir. 1965) (concluding that a movant was not entitled to another review of his question). With respect to a claim that has already been conclusively resolved on direct appeal, the court may only consider the same claim in a collateral action if "convincing new evidence of actual innocence" exists. Wiley, 245 F.3d at 752 (citing cases and emphasizing the narrowness of the exception).
Further, movants ordinarily are precluded from asserting claims that they failed to raise on direct appeal. See McNeal v. United States, 249 F.3d 747, 749 (8th Cir. 2001); see also Ramey v. United States, 8 F.3d 1313, 1314 (8th Cir. 1993) (per curiam) (citing Frady, 456 U.S. at 167-68, and noting that a movant is not able to rely on 28 U.S.C. § 2255 to correct errors that could have been raised at trial or on direct appeal); United States v. Samuelson, 722 F.2d 425, 427 (8th Cir. 1983) (concluding that a collateral proceeding is not a substitute for a direct appeal and refusing to consider matters that could have been raised on direct appeal). "A [movant] who has procedurally defaulted a claim by failing to raise it on direct review may raise that claim in a [28 U.S.C. §] 2255 proceeding only by demonstrating cause for the default and prejudice or actual innocence." McNeal, 249 F.3d at 749 (citing Bousley v. United States, 523 U.S. 614, 622 (1998)); see also Massaro v. United States, 538 U.S. 500, 504 (2003) ("[T]he general rule [is] that claims not raised on direct appeal may not be raised on collateral review unless the [movant] shows cause and prejudice."). "`[C]ause' under the cause and prejudice test must be something external to the [movant], something that cannot fairly be attributed to him . . . ." Coleman v. Thompson, 501 U.S. 722, 753 (1991). "Prejudice" that is necessary to excuse procedural default means that the alleged error worked to the movant's actual and substantial disadvantage. See Frady, 456 U.S. at 170; Johnson v. United States, 278 F.3d 839, 844 (8th Cir. 2002); Swedzinski v. United States, 160 F.3d 498, 501 (8th Cir. 1998). If a movant fails to show cause, a court need not consider whether actual prejudice exists. See McCleskey v. Zant, 499 U.S. 467, 502 (1991). Actual innocence under the actual innocence test "means factual innocence, not mere legal insufficiency." Bousley, 523 U.S. at 623; see also Sawyer v. Whitley, 505 U.S. 333, 339-40 (1992) (equating fundamental miscarriage of justice with factual innocence); McNeal, 249 F.3d at 749 ("[A movant] must show factual innocence, not simply legal insufficiency of evidence to support a conviction."). To establish actual innocence, a movant "must demonstrate that, in light of all the evidence, it is more likely than not that no reasonable juror would have convicted him." Bousley, 523 U.S. at 623 (quoting Schlup v. Delo, 513 U.S. 298, 327-28 (1995)) (internal quotation marks omitted); see also Sawyer, 505 U.S. at 339 (clarifying that a fundamental miscarriage of justice can be demonstrated by "establish[ing] that under the probative evidence [the movant] has a colorable claim of factual innocence" (quoting Kuhlmann v. Wilson, 477 U.S. 436, 454 (1986))).
Lastly, "not all constitutional violations amount to reversible error." Satterwhite v. Texas, 486 U.S. 249, 256 (1988). Reversal is required where a "structural defect affect[s] the framework within which the trial proceeds, rather than simply an error in the trial process itself." Arizona v. Fulminante, 499 U.S. 279, 310 (1991). Thus far, an error has been found to be structural only in cases where there is a complete denial of counsel, a biased trial judge, an unlawful exclusion of grand jurors based on race, a denial of self-representation at trial, a denial of a public trial or a defective reasonable doubt jury instruction. See Johnson v. United States, 520 U.S. 461, 468-69 (1997) (collecting cases); see also United States v. Marcus, 560 U.S. 258, 263 (2010) (reaffirming that structural error has been found only in a very limited class of cases); Washington v. Recuenco, 548 U.S. 212, 218-19 (2006) (same). On the other hand, if no structural constitutional error occurred and "the defendant had counsel and was tried by an impartial adjudicator, there is a strong presumption that any other [constitutional] errors that may have occurred are subject to harmless-error analysis." Rose v. Clark, 478 U.S. 570, 579 (1986); accord Fulminante, 499 U.S. at 306-07 (reiterating that constitutional errors that are not structural defects are subject to a harmless error review). In that situation, the test is whether the error "had substantial and injurious effect or influence in determining the jury's verdict." Brecht v. Abrahamson, 507 U.S. 619, 623 (1993) (quoting Kotteakos v. United States, 328 U.S. 750, 776 (1946)); accord United States v. Clay, 720 F.3d 1021, 1027 (8th Cir. 2013).
The movant contends that a sentencing error occurred. But, the movant fundamentally misstates or misunderstands the nature of proceedings after a jury renders its verdicts, the extent of due process protection in the context of different phases of a criminal case and the scope of proceedings under 28 U.S.C. § 2255. He also repeatedly mischaracterizes the record and misunderstands the law.
During sentencing proceedings, a probation officer prepared a presentence report which calculated an advisory sentencing Guidelines range of life imprisonment for the Financial Counts, that is, the fraud counts, the false statement counts and the money laundering counts, and the movant raised multiple objections regarding the probation officer's application of the Guidelines. Ultimately, the movant contended that his total offense level should be either 28 (7 (base offense level) + 18 (loss between $2,500,000 and $7,000,000) + 3 (role)) for the fraud counts and false statement counts or 30 (25 (base offense level) + 2 (18 U.S.C. § 1956) + 3 (role)) for the money laundering counts. And, he asked the court to vary and/or depart downward and impose a term of imprisonment that did not exceed seventy-two months. In April of 2010, the court held a sentencing hearing and the parties presented evidence and argument in support of their positions.
Approximately two months after it heard from the parties, the court detailed its findings and conclusions in a sentencing memorandum. The court determined that the movant fell within criminal history category I. And, it calculated separate total adjusted offense levels for the fraud and false statement counts, that is, bank fraud counts, and the money laundering counts.
With respect to the fraud counts and false statement counts, the court: (1) relied on USSG §2B1.1(a)(1) to determine that a base offense level of 7 applied; (2) applied USSG §2B1.1(b)(1)(L) to increase the offense level by 22 levels because the loss exceeded $20,000,000; (3) applied USSG §2B1.1(b)(9)(C) to increase the offense level by 2 levels because the bank fraud offenses involved the use of sophisticated means; (4) applied USSG §3B1.1(a) to increase the offense level by 4 levels because the movant was an organizer or leader in the bank fraud offenses; and (5) applied USSG §3C1.1 to increase the offense level by 2 levels because the bank fraud offenses involved the obstruction of justice. A criminal history category of I and a total adjusted offense level of 37 for the bank fraud counts resulted in an advisory sentencing range of 210 to 262 months imprisonment.
For the money laundering counts, the court: (1) relied on USSG §2S1.1(a)(2) to determine that a base offense level of 31 applied; (2) applied USSG §2S1.1(b)(2)(B) to increase the offense level by two levels because the movant was convicted under 18 U.S.C. § 1956; (3) applied USSG §2S1.1(b)(3) to increase the offense level by two levels because the money laundering offenses involved the use of sophisticated means; (4) applied USSG §3B1.1(a) to increase the offense level by 4 levels because the movant was an organizer or leader in the money laundering offenses; and (5) applied USSG §3C1.1 to increase the offense level by 2 levels because the money laundering offenses involved the obstruction of justice. A criminal history category of I and a total adjusted offense level of 41 for the money laundering counts resulted in an advisory sentencing range of 324 to 405 months imprisonment.
Before it arrived at a total adjusted offense level for the bank fraud offenses and the money laundering offenses, the court considered whether the facts and the law justified upward adjustments under Chapter 2 and Chapter 3 of the Guidelines. When considering the specific characteristics of the bank fraud offenses, the court did not adjust the offense level under USSG §2B1.1(b)(2)(A)(i) for the number of victims in the case. And, the court did not adjust the offense level for either the bank fraud offenses or the money laundering offenses under USSG §3B1.3 for abusing a position of trust.
In addition, the court explicitly considered and rejected the government's arguments for an upward departure under USSG §5K2.0(a)(3) for extraordinary obstruction of justice and USSG §5K2.21 for failure of the Guidelines to account for criminal conduct. Before rejecting the government's bases for departing upward, the court observed that an upward departure would be permitted in light of the fact that the movant's obstructive conduct was more excessive than the conduct that is involved in a typical criminal case and the Guidelines failed to account for a large amount of the movant's criminal conduct. Nonetheless, it noted that a sentence within the sentencing range established by the Guidelines was sufficient to satisfy the goals of sentencing and that it would consider the facts underlying the potential upward departures in conjunction with its analysis of the factors enumerated in § 3553(a).
Similarly, the court explicitly considered and rejected the movant's arguments for a downward departure under USSG §5K2.0. The court also considered and rejected the movant's arguments for a downward variance from the advisory sentencing range in accordance with the sentencing factors under § 3553(a). Before declining to vary, the court made clear that the circumstances surrounding the movant's case, such as the reasonableness of a sentence for the movant under the Guidelines, the movant's motive for committing the offenses, the movant's extraordinary charitable and civic contributions, the movant's relationship with his developmentally-disabled minor son and/or the movant's mental health history, did not warrant a downward variance and unaccounted for conduct justified an upward variance. It also emphasized that, even if it inadvertently erred in computing the Guidelines, it would still impose a sentence of 324 months imprisonment after considering the factors under § 3553(a). And, when formally imposing the movant's sentence, the court clarified that it considered every argument and subargument that the parties' made.
On direct appeal, the movant, among other things, argued that the court erroneously calculated his total adjusted offense level. More specifically, he asserted that the court should not have calculated a sentencing range for the money laundering counts and the court should not have included in its actual loss figure approximately $15,000,000 of loss that he asserted he did not cause. Concerning the latter assertion, the movant maintained that the actual loss to FBBC that was attributable to his fraudulent acts or omissions was only about $12,000,000 because that is the amount of money that FBBC loaned to Agriprocessors after he falsely inflated the value of collateral and fraudulently diverted customer payments. He asserted that his crime was that he inflated the value of collateral to enable Agriprocessors to obtain more money than it was entitled to obtain under the terms of its loan agreement and that FBBC's inability to collect additional amounts was independent of his fraudulent acts or omissions.
The movant pointed out that any number of independent factors, such as deteriorating market conditions, bad business planning or poor management by the bankruptcy trustee, could have caused Agriprocessors to become unable to repay $15,000,000 of its loan. With respect to the bankruptcy trustee, the movant asserted that the record established that the shortfall on the balance of the loan was caused in no small part by the bankruptcy trustee's insistence that no member of the Rubashkin family be involved in the new management of the company, refusal to seriously consider an offer to purchase the company for $22,000,000
In response, the government asserted that the court did not err when it increased the movant's offense level by 22 levels, rather than 20 levels. Relying on USSG §2B1.1 cmt. n.3(E)(ii), the government claimed that the court correctly calculated the actual loss amount by taking the outstanding principal on the loan and reducing it by the amount recovered from the sale of collateral and the fair market value of any unsold collateral. It asserted that, after accounting for the sale of collateral, Agriprocessors still owed approximately $30,000,000, and, after accounting for the fair market value of unsold collateral and other credits, Agriprocessors still owed approximately $27,000,000. The government emphasized that the court's actual loss amount appropriately accounted for FBBC's inability to recover the full outstanding balance on the loan after the movant perpetrated a massive fraud and caused Agriprocessors to file for bankruptcy.
The Eighth Circuit Court of Appeals affirmed the court's calculations under the Guidelines. See Rubashkin, 655 F.3d at 869. Before doing so, it addressed the movant's arguments concerning the court's calculation of loss. Id. at 867-68.
Id. (fifteenth and twenty-first alterations in original).
The movant exercised day-to-day control over Agriprocessors prior to and after the May 12, 2008 ICE enforcement action. See Presentence Report (criminal docket no. 887) at ¶ 112. Aaron Rubashkin had the only ownership or shareholder interest in Agriprocessors. See Chapter 11 Affidavit (bankr. docket no. 3-2). Except for daily operations, every major decision regarding Agriprocessors was discussed and approved by Aaron Rubashkin. See Dec. 1, 2008 Hearing Transcript (bankr. docket no. 129) at 119-21, 161-62. Aaron Rubashkin had the ultimate decision-making authority and had familiarity with the operations, business and financial affairs of Agriprocessors. See Chapter 11 Affidavit (bankr. docket no. 3-2).
Agriprocessors experienced financial difficulties as a result of difficult circumstances brought about by the ICE enforcement action. Id. After the ICE enforcement action, Yomtov Bensasson recommended to the movant that Agriprocessors file for bankruptcy. See Presentence Report (criminal docket no. 887) at ¶ 294. At that time, Agriprocessors owed FBBC approximately $28,000,000 to $29,000,000. Id. Even though production at Agriprocessors greatly decreased after the ICE enforcement action, the amount of receivables that Agriprocessors reported to FBBC increased. Id. As of November of 2008, Agriprocessors employed between 250 and 300 people at its plant in Postville, Iowa, but, prior to its legal troubles, Agriprocessors had approximately 1000 employees. See Chapter 11 Affidavit (bankr. docket no. 3-2).
To restructure its overall business, Agriprocessors actively sought new sources of financing, and, as a result of labor issues, Agriprocessors engaged new supervisory personnel to oversee plant operations. Id. Mordechai Korf's company was interested in purchasing Agriprocessors because it had "an extremely strong position in the kosher meat market." See Defense Sentencing Exhibit 11131 (criminal docket no. 912-268); see also Sentencing Transcript (criminal docket no. 936) at 139-54.
In September of 2008, Aaron Rubashkin appointed Bernard Feldman as the chief executive officer. See Chapter 11 Affidavit (bankr. docket no. 3-2). Despite such appointment, the movant continued to exercise day-to-day control over Agriprocessors' plant and finances until Agriprocessors filed for bankruptcy. See Presentence Report (criminal docket no. 887) at ¶ 112.
In the Fall of 2008, Mordechai Korf learned that it might be possible to purchase Agriprocessors directly from FBBC. See Defense Sentencing Exhibit 11131 (criminal docket no. 912-268).
On October 30, 2008, FBBC sued Agriprocessors, Aaron Rubashkin, certain related companies and the movant. In its lawsuit, FBBC alleged, among other things, that the defendants diverted FBBC's collateral, that is, its accounts receivable into an operating account rather than a deposit account, and sought the repayment of its loan balance, which exceeded $32,000,000, and the appointment of a receiver with expanded powers. See Chapter 11 Affidavit (bankr. docket no. 3-2); see also Trustee Motion (bankr. docket no. 676).
On November 4, 2008, Agriprocessors filed for bankruptcy in the United States Bankruptcy Court for the Eastern District of New York. See Bankruptcy Petition (bankr. docket no. 3). As president of Agriprocessors, Aaron Rubashkin signed the voluntary petition for relief under the Bankruptcy Code. Id. Agriprocessors sought bankruptcy protection on an emergency basis due to pending litigation against it. See Chapter 11 Affidavit (bankr. docket no. 3-2). On November 5, 2008, Agriprocessors closed a slaughterhouse located in Gordon, Nebraska because of financial problems. See Presentence Report (criminal docket no. 887) at ¶ 107.
In November of 2008, Mordechai Korf offered to buy FBBC's interest in Agriprocessors for an amount between $21,500,000 to $22,000,000. See Defense Sentencing Exhibit 11131 (criminal docket no. 912-268); see also Sentencing Transcript (criminal docket no. 936) at 144-45. Mordechai Korf told FBBC that the value of Agriprocessors would drop dramatically if a bankruptcy trustee assumed control and altered the business in any way. See Defense Sentencing Exhibit 11131 (criminal docket no. 912-268). Mordechai Korf made it clear to FBBC that he wanted to buy Agriprocessors while it was still operating. Id. After informing Mordechai Korf that it had exposure in the amount of $27,000,000 to $29,000,000 and that it was not prepared to discount its note at all, FBBC rejected Mordechai Korf's offer. Id.; Sentencing Memorandum (criminal docket no. 927) at 18.
On November 20, 2008, the United States Bankruptcy Court for the Eastern District of New York appointed Joseph E. Sarachek as the bankruptcy trustee. See Amended Order Appointing Trustee (bankr. docket no. 57). On November 26, 2008, the bankruptcy trustee filed a notice that indicated he had held meetings with several parties, including with Assistant United States Attorneys for the Northern District of Iowa. See Statement in Support of Venue Change (bankr. docket no. 104). On December 1, 2008, the bankruptcy trustee filed a declaration that indicated: (1) upon being appointed, he immediately confronted "an estate in financial extremis" due in part to Agriprocessors being shut down, certain principals of Agriprocessors facing federal criminal charges and Agriprocessors facing federal criminal charges; (2) he needed to use cash collateral and obtain emergency post-petition financing; (3) he determined that the prospect of locating any third party that would be willing to extend credit to Agriprocessors would be "wholly unrealistic" because of the government's indictment; and (4) he had held meetings with several parties, including with Assistant United States Attorneys for the Northern District of Iowa. See Declaration of Trustee (bankr. docket no. 108).
At a hearing to determine whether it was appropriate to transfer the bankruptcy action to the Northern District of Iowa, several individuals testified. The attorney for Agriprocessors informed the United States Bankruptcy Court for the Eastern District of New York that Agriprocessors would need at least $50,000,000 in new financing to satisfy its obligation to FBBC and to fund operations. See Dec. 1, 2008 Hearing Transcript (bankr. docket no. 129) at 36, 40, 43. He also asserted that FBBC's actions hindered Agriprocessors and acknowledged that, if Agriprocessors' obligations to FBBC could not be satisfied in a short period of time, then liquidation was the only option. Id. at 40.
Bernard Feldman, as Agriprocessors' chief executive officer, testified that: (1) Agriprocessors faced a multitude of problems, including the inability to replace the employees that had been arrested by ICE, the lack of cash flow and the expenses that had to be paid; (2) somebody would have to be prepared to come into Agriprocessors and spend approximately $75,000,000 to give it the "maximum opportunity to survive"; (3) it was imperative that Agriprocessors start operating at full capacity in the cattle category and the cooked or prepared products category, not just the chickens category, in the very immediate future, otherwise the value of Agriprocessors, which is structured as an oversized plant, would be devastated and it would lose its niche; (4) Agriprocessors needed to secure additional financing through a new investor so that it could satisfy its obligation to FBBC and jump-start operations; and (5) Agriprocessors needed to reach an agreement with state and federal authorities because they were seeking to seize the plant and impose a multi-million dollar fine. See Dec. 1, 2008 Hearing Transcript (bankr. docket no. 129) at 159-60, 167, 171-74, 191-92. He also testified that: (1) the biggest issue facing Agriprocessors was its ability to satisfy FBBC and, if it could not do so within two to three weeks, the only alternative would be to go into liquidation; (2) the government would be willing to mitigate Agriprocessors' liability, including a fine of $9,600,000 and the possible seizure of assets; and (3) a lot of the concerns of the government would be satisfied if he could establish a new controlling interest, a new face or a new control of Agriprocessors. Id. at 172, 174, 188-94. Additionally, he: (1) observed that transferring the bankruptcy action to the Northern District of Iowa would be devastating because it would result in the loss of many, if not all, of the numerous potential investors that he had contacted and it would also negatively impact the reorganization or restart of Agriprocessors; (2) acknowledged that anyone financing Agriprocessors, merging with Agriprocessors or making an equity investment in Agriprocessors would (i) need to conduct due diligence, (ii) take into account the fact that Agriprocessors had been charged with immigration offenses and bank fraud offenses and (iii) ensure that a viable operation existed despite the accounting discrepancies; (3) stated that, although the bankruptcy trustee undertook efforts to obtain financing, his efforts and Aaron Rubashkin's efforts would probably be the only avenue towards financing because no institutional investor would be likely to help finance Agriprocessors in light of what happened; and (4) expressed that, even though Agriprocessors filed for bankruptcy, investors that he had met in August and September of 2008 expressed overall interest in Agriprocessors and told him to contact them at the appropriate time. Id. at 174-75, 178-79, 185-95. Lastly, Bernard Feldman expressed that potential investors preferred to be in New York because of certain things that happened in Iowa and that a concern with the administration of justice existed in light of, among other things, the computation of the multi-million dollar fine and the potential seizure and displacement of Agriprocessors by the federal government. Id. at 187-88.
In addition to hearing the testimony of Bernard Feldman, the United States Bankruptcy Court for the Eastern District of New York received the testimony of Aaron Rubashkin, who emphasized that he had no part in the daily operations of Agriprocessors and stated that the movant, Heshy Rubashkin and Yossie Gourarie addressed the daily operations of Agriprocessors and all of them were equal to each other in terms of their corporate responsibility. Id. at 120-22.
On December 8, 2008, government counsel sent a letter to Lloyd Palans, then-counsel for FBBC, regarding the government's forfeiture allegation against Agriprocessors, and it provided courtesy copies of such letter to the bankruptcy trustee and his counsel. Such letter provided:
Gov't App'x (civil docket no. 52-1) at 37-38, 90-91; Movant App'x (civil docket no. 44-1) at 84-85.
On December 10, 2008, the bankruptcy trustee filed an additional declaration that indicated: (1) he and his proposed counsel had met with the Assistant United States Attorney prosecuting the criminal case against Agriprocessors and certain of its former management; (2) he had a duty to maximize the value of the estate to afford its creditors the greatest possible recovery; (3) he believed maximum value could only be achieved through an open and transparent bankruptcy sale process that addressed the government's possible pursuit of forfeiture claims against Agriprocessors; (4) through proposed counsel, he "had been in direct and frequent communication with federal authorities . . . to discuss the parameters of a sale process that would obviate the need for the assertion of forfeiture claims"; and (5) the pending federal criminal charges and the Packers and Stockyards Act or trust fund claims by the providers of cattle and poultry to Agriprocessors would necessarily involve some compromise by the parties in interest. See Trustee Declaration in Support of Venue Change (bankr. docket no. 135) at 3.
On December 12, 2008, the United States Bankruptcy Court for the Eastern District of New York transferred the bankruptcy action to the United States Bankruptcy Court for the Northern District of Iowa. See Order Granting Transfer (bankr. docket no. 1). On December 17, 2008, the bankruptcy trustee filed a status report that disclosed: (1) he and his proposed counsel met with the United States Attorney for the Northern District of Iowa; (2) the government filed criminal charges against Agriprocessors and its December 11, 2008 superseding indictment added a forfeiture allegation which potentially put at risk Agriprocessors' assets if it was convicted of one or more offenses; (3) he and his proposed criminal counsel monitored initial federal criminal proceedings to protect the estate's interest concerning any fines or penalties that could be imposed; (4) he and his proposed criminal counsel met with the United States Attorney for the Northern District of Iowa on several occasions to discuss the effect that the government's prosecution would have on the bankruptcy proceeding, including but not limited to a sale under 363 of the Bankruptcy Code; (5) he had been approached by no fewer than twelve parties that expressed an interest in undertaking due diligence in connection with acquiring Agriprocessors' assets; and (6) the interested parties expressed that they were concerned about the government's potential forfeiture remedy and the 363 sale process. See Dec. 17, 2008 Trustee Status Report (bankr. docket no. 148) at 3, 5-6.
On December 22, 2008, the government made clear that it intended to use criminal forfeiture as a means to ensure that Agriprocessors' assets did not end up being controlled by or used for the benefit of those who allowed Agriprocessors' assets to be used for criminal purposes in the past. See Dec. 17, 2008 Hearing Notice (bankr. docket no. 107); Gov't App'x (civil docket no. 52-1) at 119-122. Specifically, when addressing the United States Bankruptcy Court for the Northern District of Iowa, government counsel stated:
Dec. 17, 2008 Hearing Notice (bankr. docket no. 107); Gov't App'x (civil docket no. 52-1) at 119-120.
On December 23, 2008, the bankruptcy trustee sought to retain Triax Capital Advisors, LLC, for the purpose of accounting for the estate's inventory, evaluating strategic alternatives and formulating a business plan for selling and/or hypothecating the estate's assets. See Application to Retain Triax (bankr. docket no. 184) at 5. On January 9, 2009, Agriprocessors, through Aaron Rubashkin, filed schedules, including one that claimed the book value of its assets was $40,013,246.00 excluding depreciation. See Schedules and Statements (bankr. docket no. 243); Defense Sentencing Exhibit 11012 (criminal docket no. 912-313).
On January 25, 2009, the bankruptcy trustee sought an order that approved the sale of substantially all of Agriprocessors' assets, free and clear of all liens, claims and encumbrances. See Motion for Sale of Property (bankr. docket no. 329); see also Defense Sentencing Exhibit 11013 (criminal docket no. 912-314). When doing so, the bankruptcy trustee noted that he had been inundated with requests by third parties to undertake due diligence in connection with a potential transaction with the estate, entered into no less than twelve non-disclosure agreements with interested parties and endorsed Soglowek Nahariya, Ltd., which indicated it was prepared to acquire substantially all of Agriprocessors' assets for $40,000,000. See Motion for Saleof Property (bankr. docket no. 329). He also attached the term sheet of Soglowek Nahariya, Ltd., which was dated January 21, 2009. See Soglowek Term Sheet (bankr. docket no. 329-2). As a condition of purchase, Soglowek Nahariya, Ltd. stated that it would acquire Agriprocessors' assets free and clear of all liens, claims, encumbrances, liabilities and interests, including the forfeiture allegations contained in the government's indictment dated December 11, 2008. Id. With respect to disclosures, Soglowek Nahariya, Ltd. stated:
Id. at 5 (footnote omitted) (formatting omitted). Soglowek Nahariya, Ltd. indicated that related parties included immediate members of the Rubashkin family and the spouses of immediate members of the Rubashkin family. See id.
On February 11, 2009, Soglowek Nahariya, Ltd. sent the bankruptcy trustee a letter. See Gov't App'x (civil docket no. 52-1) at 80; Gov't Sentencing Exhibit 5520 (criminal docket no. 912-289). In the letter, Soglowek Nahariya, Ltd. stated:
Gov't App'x (civil docket no. 52-1) at 80; Gov't Sentencing Exhibit 5520 (criminal docket no. 912-289).
On the same date, MLIC Asset Holdings, LLC,
On February 27, 2009, the United States Bankruptcy Court for the Northern District of Iowa entered an order approving the sale of Agriprocessors' assets at an auction. See Feb. 27, 2009 Order (bankr. docket no. 494). It included bid procedures, which set forth a disclosure requirement that mirrored the one that Soglowek Nahariya, Ltd. included in its term sheet. Id. at 4. On March 4, 2009, the bankruptcy trustee submitted an asset purchase agreement form, which included a disclosure requirement as outlined in the February 27, 2009 order. See Asset Purchase Agreement (bankr. docket no. 507-1).
On March 17, 2009, MLIC Asset Holdings, LLC and the bankruptcy trustee entered into a stipulation concerning the right to enter a credit bid at the auction of Agriprocessors' assets. See Mar. 17, 2009 Stipulation (bankr. docket no. 567). Additionally, MLIC Asset Holdings, LLC renewed its objection to the sale of Agriprocessors' assets on the basis that it could not reasonably make a credit bid at auction because no mechanism operated to allow it to accurately determine how net proceeds of the sale would be allocated. See MLIC Conditional Objection (bankr. docket no. 568).
Several parties submitted bids in connection with an auction that occurred on March 23 and March 24, 2009, but FBBC and MLIC Assets Holdings, LLC made credit bids for their collateral in the amount of $20,000,000 and $6,500,000, respectively. See Sale Motion (bankr. docket no. 678); Supplemental Sale Motion (bankr. docket no. 802). The auction concluded upon the primary secured creditors making credit bids, which reflected their unwillingness to accept the consideration being offered by the bidders at the auction. Consequently, the bankruptcy trustee did not accept any of the bids submitted and did not request a final order approving the sale.
On April 19, 2009, Soglowek Nahariya, Ltd. and others, including Nathan Tzivin, came back to the table and made an offer to purchase Agriprocessors for $17,000,000, payable on June 1, 2011, and rent of $3,000,000 per year or $250,000 per month until June 1, 2011. See Sentencing Transcript (criminal docket no. 936) at 92-93; Defense Sentencing Exhibits 11127, 11128 & 11129 (criminal docket nos. 912-264, 912-265 & 912-266). Either the bankruptcy trustee or FBBC rejected it. See Sentencing Transcript (criminal docket no. 936) at 92-93; Defense Sentencing Exhibit 11128 (criminal docket no. 912-265).
On June 23, 2009, the bankruptcy trustee again sought to sell substantially all of Agriprocessors' assets to another party, that is, SHF Industries, LLC. See Supplemental Sale Motion (bankr. docket no. 802). When doing so, the bankruptcy trustee stated that SHF Industries, LLC, would be required to provide a disclosure statement, which again substantially followed the disclosure statement that Soglowek Nahariya, Ltd. included in its term sheet. Id. at 5. The bankruptcy trustee also observed that several parties negotiated with the primary secured parties and obtained their consent to the proposed sale to SHF Industries, LLC. Id.
On July 1, 2009, government counsel responded to a June 24, 2009 inquiry about a proposed sale of equipment. See Gov't App'x (civil docket no. 52-1) at 27. Government counsel clarified that, although the government would not enter into the proposed certification, it did not intend to assert any forfeiture rights against the sale of the identified equipment and any proposed purchaser of the equipment should feel free to call if questions arose. Id.
Prior to the sale of Agriprocessors' assets, the government and SHF Industries, LLC, discussed a disclosure statement that would be included as part of the final sale order of the United States Bankruptcy Court for the Northern District of Iowa. On July 13, 2009, government counsel emailed Anita Shodeen, then-counsel for SHF Industries, LLC, in an effort to determine the status of the disclosure statement because the contents of such statement would allow the government to address its significant and variedinterests and determine the position it would take at a hearing scheduled for July 15, 2009. Id. at 8-9. In response, Anita Shodeen sent the government the disclosure statement and indicated that her client would sign it prior to the July 15, 2009 hearing. Id. at 8.In relevant part, the disclosure statement provided:
Id. at 10-12.
On July 14, 2009, government counsel sent Anita Shodeen a letter, which, in pertinent part, stated:
Id. at 5-6, 14-15, 64-66; Movant App'x (civil docket no. 44-1) at 118-19.
On July 15, 2009, Thomas Miller, a Deputy Attorney General of Iowa, emailed the government. In his email, he stated:
Gov't App'x (civil docket no. 52-1) at 25-26; Movant App'x (civil docket no. 44-1) at 116-17. In response, government counsel provided a copy of the disclosure statement that the buyer, SHF Industries, LLC, prepared and expressed that it made SHF Industries, LLC, aware of the government's position that bankruptcy proceedings would not adversely impact the government's forfeiture rights. See Gov't App'x (civil docket no. 52-1) at 25. In addition, government counsel made clear that there were limits as to what the government could do to affect the sale and it had a strong interest in seeing that a buyer acquire and lawfully operate the plant for the benefit of the community. Id.
On July 16, 2009, Anita Shodeen asked government counsel whether the government thought additional language should be included in the findings of the bankruptcy order or whether attaching the disclosure statement to the bankruptcy order would be sufficient. Id. at 16. On July 17, 2009, government counsel emailed Anita Shodeen to resolve concerns that it expressed in the July 14, 2009 letter. Id. Specifically, government counsel asked Anita Shodeen to include the following language in the proposed bankruptcy order:
Id.
On July 20, 2009, the United States Bankruptcy Court for the Northern District of Iowa entered an order approving the sale of substantially all of the assets, free and clear of all liens, interests, claims and encumbrances, to SHF Industries, LLC. See July 20, 2009 Order (bankr. docket no. 873); Gov't App'x (civil docket no. 52-1) at 42; Sentencing Transcript (criminal docket no. 936) at 34; DefenseSentencing Exhibit 11019 (criminal docket no. 912-225). Before entering its sale order, the United States Bankruptcy Court for the Northern District of Iowa, among other things, observed that the consideration provided by SHF Industries, LLC, that is, $8,500,000, constituted reasonably equivalent value and fair consideration under the law, referenced pertinent parts of the disclosure statement and stated that SHF Industries, LLC, in its sole discretion, could employ any of Agriprocessors' employees. See July 20, 2009 Order (bankr. docket no. 873) at 4, 9-11, 16.
On the same date, government counsel emailed Anita Shodeen to express the government's dissatisfaction with the lack of input it had with respect to the sale order. See Gov't App'x (civil docket no. 52-1) at 18. In response, Anita Shodeen stated that the record sufficiently represented the cooperation between the parties. Id. On July 21, 2009, Anita Shodeen emailed government counsel about several concerns, and government counsel again expressed dissatisfaction about the requested language being omitted from the sale order. Id. at 21-24.
Consistent with the sale order, SHF Industries, LLC, purchased substantially all of Agriprocessors' assets, free and clear of all liens, interests, claims and encumbrances. SHF Industries, LLC, however, did not purchase Agriprocessors' pre-petition inventory or accounts receivable. See May 12, 2009 Order (bankr. docket no. 723); July 30, 2009 Order (bankr. docket no. 897); Defense Sentencing Exhibit 11017 (criminal docket no. 912-223). Daniel Hirsch's son-in-law, Hershey Friedman, became the chief executive officer of Agriprocessors.
The government never obtained any property associated with Agriprocessors' bankruptcy estate as a result of pursuing the forfeiture allegations that it included in the indictments in the underlying criminal case. Although it chose not to pursue forfeiture under criminal statutes, the government relied on civil forfeiture provisions when it asserted that life insurance proceeds, in which Aaron Rubashkin was a potential trust beneficiary, constituted property that was either involved in money laundering or derived from the unlawful harboring of illegal aliens. See Movant App'x (civil docket no. 44-1) at 49; Sentencing Transcript (criminal docket no. 936) at 68-69; Gov't App'x (civil docket no. 52-1) at 92-114. The parties reached a settlement pursuant to which the Aaron Rubashkin Trust agreed to forfeit $661,592.64 in cash value to the United States for money laundering in violation of 18 U.S.C. § 1957 and the government agreed to forgo forfeiture of $100,000 in additional cash value. See Gov't App'x (civil docket no. 52-1) at 115-18.
On April 21, 2010, the movant amended his sentencing memorandum, asserting that:
Amended Sentencing Memorandum (criminal docket no. 895) at 39.
On the same date, defense counsel emailed the government. See Gov't App'x (civil docket no. 52-1) at 3-4. Such email, in relevant part, stated:
Id. at 3 (formatting omitted). On April 22, 2010, government counsel spoke with defense counsel and sent the following email:
Id. The July 14, 2009 letter to Anita Shodeen was attached to the government's email. See id. at 5-6. On April 23, 2010, government counsel again emailed defense counsel. The email, in relevant part, stated:
Id. at 7. The government's attachments included: (1) the July 1, 2009 correspondence between the government and counsel who represented the seller of equipment; (2) the July 13, 2009 correspondence between the government and Anita Shodeen; (3) the disclosure statement of SHF Industries, LLC; (4) the July 14, 2009 letter to Anita Shodeen; (5) the July 15, 2009 correspondence between the Deputy Attorney General of Iowa and the government; (6) the July 16, 2009 and July 17, 2009 correspondence between Anita Shodeen and the government; and (7) the July 20, 2009 and July 21, 2009 correspondence between the government and Anita Shodeen. See id. at 8-28, 59-79; Defense Sentencing Exhibit 11023 (criminal docket no. 912-232).
On April 27, 2010, the government notified defense counsel that additional information would be added to the discovery file. See Gov't App'x ( civil docket no. 52-1) at 36. Specifically, it referred to the December 8, 2008 letter to Lloyd Palans and attached such letter to its email. Id. at 36-38.
During the sentencing hearing that the court held between April 28, 2010 and April 30, 2010, the parties, among other things, presented evidence regarding the government's forfeiture position and its impact on the sale of Agriprocessors. Specifically, defense counsel elicited the following testimony from FBI Special Agent Randy Van Gent:
Id. at 48; Sentencing Transcript (criminal docket no. 936) at 56. Defense counsel introduced as exhibits the July 1, 2009 correspondence between the government and counsel who represented the seller of equipment, the July 13, 2009 correspondence between the government and Anita Shodeen, the disclosure statement of SHF Industries, LLC, the July 14, 2009 letter to Anita Shodeen, the July 15, 2009 correspondence between the Deputy Attorney General of Iowa and the government, the July 16, 2009 and July 17, 2009 correspondence between Anita Shodeen and the government and the July 20, 2009 and July 21, 2009 correspondence between the government and Anita Shodeen (collectively "bankruptcy documents"), and asked FBI Special Agent Randy Van Gent questions concerning the bankruptcy documents. See Sentencing Transcript (criminal docket no. 936) at 60-63; Defense Sentencing Exhibit 11023 (criminal docket no. 912-232). Aside from asking questions concerning the involvement that a buyer of Agriprocessors could have with the movant or his family, defense counsel sought to explore why a potential buyer might have withdrawn a bid during bankruptcy proceedings. Upon being questioned, FBI Special Agent Randy Van Gent testified that Soglowek Nahariya, Ltd. withdrew a $40,000,000 bid for Agriprocessors because it "was concerned about the accuracy of Agriprocessors' financial numbers." Gov't App'x (civil docket no. 52-1) at 50; Sentencing Transcript (criminal docket no. 936) at 65. On redirect, the government emphasized FBI Special Agent Randy Van Gent's testimony concerning the reason Soglowek Nahariya, Ltd. withdrew its bid by admitting the February 11, 2009 letter from Soglowek Nahariya, Ltd. to the bankruptcy trustee. See Gov't App'x (civil docket no. 52-1) at 55, 80; Sentencing Transcript (criminal docket no. 936) at 85.
Aside from questioning FBI Special Agent Randy Van Gent, the government questioned Paula Roby, who served as counsel for the bankruptcy trustee. See Gov't App'x (civil docket no. 52-1) at 81-89; Sentencing Transcript (criminal docket no. 937) at 485-519. When testifying, Paula Roby generally indicated the following:
See Gov't App'x (civil docket no. 52-1) at 81-84; Sentencing Transcript (criminal docket no. 937) at 485-99.
After the government finished asking Paula Roby questions as part of its rebuttal case, a lengthy colloquy between the movant's counsel and Paula Roby ensued. It generally revealed the following:
See Gov't App'x (civil docket no. 52-1) at 84-89; Sentencing Transcript (criminal docket no. 937) at 499-519.
Lastly, Paula Roby testified that the bankruptcy trustee did everything he could do to maximize the value of the bankruptcy estate and FBBC did everything it could do to maximize the value of its collateral. See Gov't App'x (civil docket no. 52-1) at 89; Sentencing Transcript (criminal docket no. 937) at 518-19. She stated that FBBC's efforts included but were not limited to providing DIP financing so that Agriprocessors could be sold as a going concern. See Gov't App'x (civil docket no. 52-1) at 89; Sentencing Transcript (criminal docket no. 937) at 518-19.
Steve Cohen also testified during the sentencing hearing. See Sentencing Transcript (criminal docket no. 937) at 530-36. He maintained that, in December of 2008 or January of 2009, he spoke with the bankruptcy trustee and learned that Rubashkins could not be involved in any acquisition. Id. at 531. He also stated that he considered the Rubashkins to be an important component in keeping Agriprocessors viable and such consideration and several other reasons caused him not to make an offer. Id. at 534. He thought that the prohibition against having Aaron Rubashkin involved in a successor corporation reduced the value of Agriprocessors by millions of dollars because Aaron Rubashkin would be unable to tell him how to go forward. Id. at 535-36.
Based on the evidence admitted during the sentencing hearing, the movant argued that the government threatened forfeiture of Agriprocessors' assets and the loss amount reflected the government's misconduct. See Sentencing Transcript (criminal docket no. 936) at 33-95; Sentencing Transcript (criminal docket no. 937) at 485-519; Defense Sentencing Exhibits 11000-11030, 11127-11131 (criminal docket nos. 912-301-912-315, 912-221-912-239 & 912-264-912-268). Specifically, at the conclusion of the sentencing hearing, defense counsel asserted:
Sentencing Transcript (criminal docket no. 937) at 568.
After the sentencing hearing, the movant filed a summary of his sentencing exhibits. See Summary of Sentencing Exhibits (criminal docket no. 905). He described the import of the bankruptcy documents in the following manner:
Id. at 10. Additionally, the movant offered the affidavit of Meyer Eichler as an exhibit, and described it in the following manner:
Id. at 9. The court admitted all of the movant's exhibits without objection. See Gov't App'x (civildocket no. 52-1) at 57; Sentencing Transcript (criminal docket no. 936) at 92. In his affidavit dated April 9, 2010, Meyer Eichler declared:
Gov't App'x (civil docket no. 52-1) at 137-39 (formatting omitted); Movant App'x (civil docket no. 44-1) at 46-48 (formatting omitted).
In its June 21, 2010 sentencing memorandum, the court stated:
Sentencing Memorandum (criminal docket no. 927) at 22-23. In addition, the court generally observed that the movant failed to present sufficient evidence to support the theories that he offered in an effort to reduce the loss amount and failed to recognize that his theories disregarded the impact that a massive fraudulent scheme has on the value of a company and the effect that a bankruptcy has on the value of assets of the estate. See id. at 23. It concluded that intervening causes did not make the loss amount unforeseeable to the movant. Id. at 23-25.
On December 5, 2008, a meeting that included the bankruptcy trustee, the bankruptcy trustee's criminal counsel, the bankruptcy trustee's other counsel, including Paula Roby, and government counsel took place. See Movant App'x (civil docket no. 44-1) at 88-96, 170-77. Notes regarding that meeting indicate that participants made various assertions when discussing Agriprocessors' bankruptcy. The edited and truncated discussion generally reveals the following:
See id. at 88-96, 170-77 (reproducing discussion verbatim).
In response to the government's December 8, 2008 letter, Lloyd Palans sent the government a letter, which is dated December 9, 2008. Id. at 86-87. In such letter, Lloyd Palans stated:
Id.
FBBC's counsel sent the bankruptcy trustee a letter of default on March 24, 2009. Id. at 113-15. Such letter specified additional occurrences of default and indicated the following:
Id. at 113-14.
Jay Eaton, as counsel for SHF Industries, LLC, sent "gentlemen," who presumably were associated with the purchase of Agriprocessors' assets, a letter, which is dated July 30, 2009. Id. at 120-22. Such letter, in relevant part, stated:
Id. at 120-21. It also listed multiple future meeting topics, including whether a comfort letter of some sort or, in Jay Eaton's opinion, an unrealistic agreement in some form that included the language which the government wanted in the bankruptcy sale order would give the government appropriate comfort, and noted that the government wanted a list of items that the buyer would need comfort on before deciding to proceed with the closing. Id. at 121-22.
Triax Capital Advisors, LLC, completed a valuation report, which is dated June 10, 2011. See id. at 55-83. Portions of such report indicated:
Id.
Id. at 99-100 (formatting omitted); see also id. at 123-24 (indicating that the threats and demands of the United States Attorney's Office were the principal reasons that caused Soglowek Nahariya, Ltd. to withdrew the offer reflected in the $40,000,000 term sheet and elect not to appear at the bankruptcy auction held on March 23, 2009 and March 24, 2009).
In his affidavit dated March 1, 2016, the bankruptcy trustee declared:
As [the bankruptcy trustee], my mission was to maximize the value of the bankruptcy estate for the benefit of Agriprocessors' creditors. I felt the best way to accomplish this goal was by selling [Agriprocessors] as a going concern, and therefore from the outset focused my energies on preparing [Agriprocessors] for sale as an operating entity. At the outset of the case, [Agriprocessors] was shut down and me and my staff had to restart operations. . . .
Id. at 43-45 (formatting omitted) (thirty-third alteration in original).
In their affidavits, other individuals on behalf of prospective bidders generally asserted variations of the following themes: (1) after meeting with government counsel, the bankruptcy trustee or individuals associated with him, prospective bidders learned that the government would exercise its right to forfeiture if Aaron Rubashkin or other members of the Rubashkin family obtained an ownership interest or management role in Agriprocessors, (2) the government viewed Agriprocessors as a criminal enterprise, (3) the government's forfeiture position had a chilling effect on prospective bidders' interests in purchasing Agriprocessors because operation of Agriprocessors required extensive skills in the areas of purchasing livestock, kosher slaughtering and sales and distribution, (4) Aaron Rubashkin was the only person with the ability to manage Agriprocessors, (5) any transition would be much more difficult and risky if Rubashkins could not be in management, (6) government counsel threatened, accused and intimidated potential bidders by asserting, among other things, that it might use criminal forfeiture to seize Agriprocessors' assets after the bankruptcy sale, (7) the government's restrictions caused bidders to lower their bids, including the highest bid for nearly $16,000,000, at the March auction, and the government's interactions with bidders at the March auction further reduced Agriprocessors' valuation, (8) prospective bidders at the March auction understood that Rubashkins could not be involved in the ownership or operation of Agriprocessors following the sale, (9) annual earnings before taxes of $25,000,000 could be earned in one's sleep, but all of the money that the Rubashkin family had was diverted to other companies or never realized due to very poor management of the enterprise; (10) the inability to have any ties with the Rubashkins, any employment or consulting relationship with any member of the Rubashkin family or any connection to any company affiliated with the Rubashkins caused prospective bidders to chose not to contact the United States Attorney's Office; and (11) prospective bidders did not feel comfortable calling the government because they were unwilling to have the government dictate who could be hired and how business should be conducted. See id. at 49-54, 103-12, 123-24.
Pursuant to 28 U.S.C. § 994(a)(1), the United States Sentencing Commission establishes Guidelines, which provide the essential framework for federal sentencing proceedings.
Molina-Martinez v. United States, ___ U.S. ___, ___, 136 S.Ct. 1338, 1342 (2016).
After receiving the presentence report, the parties have an opportunity to raise objections. See Fed. R. Crim. P. 32(f)(1) ("Within 14 days after receiving the presentence report, the parties must state in writing any objections, including objections to material information, sentencing guideline ranges, and policy statements contained in or omitted from the report."); Fed. R. Crim. P. 32(i) (making clear that a district court must provide an opportunity at the sentencing hearing for the parties to address their objections). In deciding disputed sentencing factors, the district court can consider a wide variety of evidence not normally admissible at trial. See USSG §6A1.3(a) ("[T]he court may consider relevant information without regard to its admissibility under the rules of evidence applicable at trial, provided that the information has sufficient indicia of reliability to support its probable accuracy."); see also 18 U.S.C. § 3661 ("No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United States may receive and consider for the purpose of imposing an appropriate sentence."); Fed. R. Evid. 1101(d)(3) (clarifying that the Federal Rules of Evidence do not apply in sentencing proceedings); United States v. Watts, 519 U.S. 148, 157 (1997) (explaining that information may be considered if it has sufficient indicia of reliability to support its probable accuracy); Witte v. United States, 515 U.S. 389, 399-401 (1995) (noting that sentencing courts have traditionally considered a wide range of information without the procedural protections of a criminal trial); United States v. Tucker, 404 U.S. 443, 446 (1972) ("Before making [the sentencing] determination, a judge may appropriately conduct an inquiry broad in scope, largely unlimited either as to the kind of information he may consider, or the source from which it may come."); Williams v. New York, 337 U.S. 241, 246 (1949) (explaining that courts have traditionally exercised "wide discretion in the sources and types of evidence used to assist [them] in determining the kind and extent of punishment to be imposed within limits fixed by law"). Additionally, "the nature of the dispute, its relevance to the sentencing determination, and applicable case law" guides what procedure should be utilized by the district court, USSG §6A1.3 cmt. background, and a preponderance of the evidence standard of proof, rather than a beyond a reasonable doubt standard of proof, is relied upon by the district court when making its findings of fact, see id. ("The Commission believes that use of a preponderance of the evidence standard is appropriate to meet due process requirements . . . ."); see also Watts, 519 U.S. at 156 ("[A]pplication of the preponderance standard at sentencing generally satisfies due process."); McMillan v. Pennsylvania, 477 U.S. 79, 88-93 (1986) (endorsing a preponderance-of-the-evidence standard at sentencing).
After receiving input from the parties, the district court formulates a sentence that is sufficient, but not greater than necessary, to further the goals enumerated by Congress in 18 U.S.C. § 3553(a). When formulating a sentence, the district court must consult a properly calculated Guidelines range. See Molina-Martinez, ___ U.S. at ___, 136 S. Ct. at 1342 (citing Peugh v. United States, 569 U.S. ___, ___, 133 S.Ct. 2072, 2080 (2013); United States v. Booker, 543 U.S. 220, 264 (2005)); Gall v. United States, 552 U.S. 38, 49 (2007) ("[T]he Guidelines should be the starting point and the initial benchmark."). But, "the sentencing court does not enjoy the benefit of a legal presumption that the Guidelines sentence should apply." Rita v. United States, 551 U.S. 338, 351 (2007) (citing Booker, 543 U.S. at 259-60). Rather, it must make an independent determination that a Guidelines sentence comports with the sentencing factors set forth in 18 U.S.C. § 3553(a). See Hawkins v. United States, 706 F.3d 820, 822-23 (7th Cir. 2013) (emphasizing that district courts cannot impose a sentence that is within the applicable Guidelines range if such a sentence is inconsistent with the considerations set forth in 18 U.S.C. § 3553(a)). A district court may choose an out-of-Guidelines sentence, but it must ensure that the facts justify the degree of variance from the Guidelines. See Gall, 552 U.S. at 50; see also United States v. Cavera, 550 F.3d 180, 190 (2d Cir. 2008) (en banc) (stating that district court commits procedural error, inter alia, where it miscalculates Guidelines or does not consider 18 U.S.C. § 3553(a) factors).
Aside from challenging the application of the Guidelines during sentencing proceedings, a defendant's primary avenue for obtaining relief is to assert on direct appeal that a sentence calculation error occurred. When reviewing a defendant's sentence, an appellate court must "ensure that the district court committed no significant procedural error." United States v. Feemster, 572 F.3d 455, 461 (8th Cir. 2009) (en banc) (quoting Gall, 552 U.S. at 51). "A failure to properly calculate the advisory Guidelines range is a significant procedural error . . . ." United States v. Waller, 689 F.3d 947, 957 (8th Cir. 2012) (quoting United States v. Woods, 670 F.3d 883, 886 (8th Cir. 2012)).
Appellate courts analyze preserved objections for harmless error and unpreserved objections for plain error. See Molina-Martinez, ___ U.S. at ___, 136 S. Ct. at 1343; Booker, 543 U.S. at 268. Pursuant to either harmless error review or plain error review, appellate courts routinely remand cases to correct sentencing errors. However, there may be occasions where it is appropriate to excuse application of an erroneous Guidelines range. A preserved error is harmless if "the government can show the procedural error did not substantially influence the outcome of the sentencing proceeding." Waller, 689 F.3d at 958 (quoting Woods, 670 F.3d at 886). And, an unpreserved sentencing error does not require an appellate court to remand for resentencing if the defendant is unable to "`show a reasonable probability that, but for the error,' the outcome of the proceeding would have been different." Molina-Martinez, ___ U.S. at ____, 136 S. Ct. at 1343 (quoting United States v. Dominguez Benitez, 542 U.S. 74, 76 (2004)).
Id. at 1346-47 (citations omitted) (alteration in original); see also Williams v. United States, 503 U.S. 193, 203 (1992) (explaining that remand is unnecessary if "the district court would have imposed the same sentence absent the erroneous factor").
Once the appeals process concludes and a defendant's conviction becomes final, a sentencing error may be asserted in a proceeding under 28 U.S.C. § 2255. But, not every sentencing error can be corrected on collateral review. See Sun Bear, 644 F.3d at 704 (clarifying that the scope of 28 U.S.C. § 2255 is severely limited); see also United States v. Springs, 988 F.2d 746, 747 (7th Cir. 1993) (emphasizing that the domain of 28 U.S.C. § 2255 is limited). If the alleged sentencing error is neither constitutional nor jurisdictional, there is no authority under § 2255 to review such error unless it amounts to "a fundamental defect which inherently results in a complete miscarriage of justice." Sun Bear, 644 F.3d at 704 (quoting Addonizio, 442 U.S. at 185); see also Reed v. Farley, 512 U.S. 339, 354 (1994) (indicating that a non-constitutional error can be raised for the first time on collateral review only where the alleged error constitutes a "fundamental defect which inherently results in a complete miscarriage of justice" (quoting Hill, 368 U.S. at 428)); Jones v. United States, 178 F.3d 790, 796 (6th Cir. 1999) ("Moreover, an error in the application of the Sentencing Guidelines does not warrant collateral relief under § 2255 absent a complete miscarriage of justice."); Burke v. United States, 152 F.3d 1329, 1332 (11th Cir. 1998) ("We thus hold that a claim that the sentence imposed is contrary to a post-sentencing clarifying amendment is a non-constitutional issue that does not provide a basis for collateral relief in the absence of a complete miscarriage of justice."); Graziano v. United States, 83 F.3d 587, 590 (2d Cir. 1996) (holding that, absent a complete miscarriage of justice, claims regarding a sentencing court's error in failing to properly apply the Guidelines are not subject to collateral review). Review is only appropriate if the district court is presented with "exceptional circumstances where the need for the remedy afforded by the writ of habeas corpus is apparent." Hill, 368 U.S. at 428.
Given the permissible scope of review under § 2255,
Sun Bear, 644 F.3d at 704; see also United States v. Foote, 784 F.3d 931, 943 (4th Cir. 2015) (concluding that an erroneous Guidelines classification is not cognizable under § 2255); Spencer v. United States, 773 F.3d 1132, 1135 (11th Cir. 2014) (en banc) (explaining that a misapplication of the advisory Guidelines is not a basis to collaterally attack a sentence); Donnell v. United States, 765 F.3d 817, 819 n.2 (8th Cir. 2014) (stating that "[s]entencing errors are generally not cognizable in § 2255 proceedings"); United States v. Coleman, 763 F.3d 706, 710 (7th Cir. 2014) (recognizing that even sentencing errors that are not harmless are not cognizable in post-conviction proceedings); Hawkins, 706 F.3d at 824 ("An error in the interpretation of a merely advisory [G]uideline is less serious [than a sentence that exceeds the statutory maximum]. Given the interest in finality, it is not a proper basis for voiding a punishment lawful when imposed."); Welch v. United States, 604 F.3d 408, 412 (7th Cir. 2010) ("[D]eviations from the Sentencing Guidelines generally are not cognizable on a § 2255 motion."); United States v. Mikalajunas, 186 F.3d 490, 495 (4th Cir. 1999) ("[M]isapplication of the sentencing [G]uidelines does not amount to a miscarriage of justice.").
It is clear that a post-conviction change in the law that renders conduct no longer criminal can be corrected on collateral review. See Davis, 417 U.S. at 346-47 (explaining that, if a prisoner's punishment is for something that the law does not make criminal, "there can be no room for doubt that such a circumstance `inherently results in a complete miscarriage of justice' and `present[s] exceptional circumstances' that justify collateral relief"). It is also clear "that, in sentencing, a miscarriage of justice cognizable under § 2255 occurs when the sentence is in excess of that authorized by law." Sun Bear, 644 F.3d at 706 (citing Addonizio, 442 U.S. at 184); see also Foote, 784 F.3d at 938 (recognizing that sentencing errors in cases of actual innocence and sentences above the statutory maximum are cognizable on collateral review); Meirovitz v. United States, 688 F.3d 369, 371-72 (8th Cir. 2012) (concluding that alleged error in calculating the Guidelines range did not amount to a miscarriage of justice because the sentence was not in excess of that authorized by law). But, in the context of sentencing, an error that does not result in the imposition of a sentence that does not exceed the statutory maximum rarely, if ever, qualifies as a "fundamental defect" that is cognizable on § 2255 review.
Surely, there are constitutional limitations on the scope of information that a court may consider at sentencing. See United States v. Pratt, 553 F.3d 1165, 1170 (8th Cir. 2009). Indeed, although a sentencing court may consider relevant information without regard to its admissibility under the Federal Rules of Evidence, provided the evidence has "sufficient indicia of reliability to support its probable accuracy," USSG §6A1.3(a), a sentence cannot stand if it is based in part on "misinformation of constitutional magnitude," Tucker, 404 U.S. at 447. See also Roberts v. United States, 445 U.S. 552, 556 (1980) ("We have . . . sustained due process objections to sentences imposed on the basis of `misinformation of constitutional magnitude.'" (quoting Tucker, 404 U.S. at 447)); Hill, 368 U.S. at 429 (emphasizing that there was no suggestion that the district court was "misinformed or uninformed as to any relevant circumstance").
Where a violation of a defendant's due process right to be sentenced on the basis of accurate and reliable information occurs, appellate courts vacate sentences and remand for resentencing. See, e.g., United States v. Ortiz, 741 F.3d 288, 295 (1st Cir. 2014) (vacating sentence because reliance on erroneous information that materially influences the sentencing calculus undermines the integrity of the sentencing process); United States v. McGowan, 668 F.3d 601, 606-09 (9th Cir. 2012) (vacating sentence because district court relied on allegations that were insufficiently reliable when it imposed a sentence); United States v. Corona-Gonzalez, 628 F.3d 336, 342-43 (7th Cir. 2010) (vacating sentence because there was a distinct possibility that the district court relied on a nonexistent fact when it made its sentencing assessment); United States v. Wilson, 614 F.3d 219, 225 (6th Cir. 2010) (vacating sentence after recognizing "the general rule that a violation of due process exists when a sentencing judge relies upon erroneous information" (quoting Arnett v. Jackson, 393 F.3d 681, 686 (6th Cir. 2005))); United States v. Simmons, 964 F.2d 763, 776-78 (8th Cir. 1992) (vacating defendant's sentence because drug quantity finding could have been based on testimony of a drug addict with impaired memory); United States v. Shacklett, 921 F.2d 580, 584 (5th Cir. 1991) (vacating sentence because district court relied solely on probation officer's conclusory statement as to drug quantity involved); United States v. Cammisano, 917 F.2d 1057, 1062 (8th Cir. 1990) (vacating sentence because uncorroborated testimony of FBI agents that defendant was member of organized crime was not sufficiently reliable); United States v. Robison, 904 F.2d 365, 371 (6th Cir. 1990) (vacating sentence because drug quantity estimates provided by witness who was heavy drug user lacked sufficient indicia of reliability); United States v. Williams, 668 F.2d 1064, 1072 (9th Cir. 1981) (vacating sentence because trial judge relied on materially false or unreliable information). And, under certain circumstances, due process concerns may give rise to relief in a collateral proceeding. See, e.g., Hicks v. Oklahoma, 447 U.S. 343, 346 (1980) (concluding that relief was warranted because appellate court's refusal to correct unconstitutional mandatory prison term deprived petitioner of a state-provided liberty interest in a jury determination). "[A]s a practical matter, collateral relief does exist to vindicate rights of constitutional import that may lurk beneath otherwise garden-variety issues of statutory rights or [G]uideline calculations." Grant v. United States, 72 F.3d 503, 506 (6th Cir. 1996). But, only where "the error is committed in a context that is so positively outrageous as to indicate a `complete miscarriage of justice'" does due process require a district court to "correct" a sentence that is in every sense final. Id.; see also Crank v. Duckworth, 905 F.2d 1090, 1090 (7th Cir. 1990) (observing that "`misinformation of constitutional magnitude', [Tucker, 404 U.S. at 447]—that is, reliance on an invalid prior conviction—authorizes relief from the current sentence"); cf. United States v. Eakman, 378 F.3d 294, 301 (3d Cir. 2004) (explaining that "the appropriate test inquires whether (1) the district court made an objectively ascertainable error (one that does not require courts to probe the mind of the sentencing judge) and (2) the district court materially relied on that error in determining the appropriate sentence"); Jones v. United States, 783 F.2d 1477, 1480 (9th Cir. 1986) ("Where a § 2255 petition alleges reliance on materially false sentencing information, the sentence will be vacated on appeal only if the challenged information is (1) false or unreliable and (2) demonstrably made the basis for the sentence.").
Mastracchio v. Vose, 274 F.3d 590, 601 (1st Cir. 2001). The materiality standard for a claim for the knowing use of perjured testimony is less stringent than the materiality standard for a general Brady violation. See Clay, 720 F.3d at 1025-26 (citing Rosencrantz v. Lafler, 568 F.3d 577, 587 (6th Cir. 2009)); see also Perkins v. Russo, 586 F.3d 115, 119 (1st Cir. 2009) ("[A] prosecutor's knowing inducement of perjury is treated more harshly than a failure, which could be inadvertent, to disclose exculpatory evidence.").
Wogenstahl v. Mitchell, 668 F.3d 307, 323 (6th Cir. 2012) (first, second and fourth alterations in original); accord Trepal v. Sec'y, Fla. Dep't of Corr., 684 F.3d 1088, 1107-08 (11th Cir. 2012); Perkins, 586 F.3d at 119; Mastracchio, 274 F.3d at 601; Braun v. Powell, 227 F.3d 908, 920 (7th Cir. 2000); Gilday v. Callahan, 59 F.3d 257, 267 (1st Cir. 1995).
Clay, 720 F.3d at 1026-27 (citations omitted) (sixth alteration in original).
Hence, on direct appeal, the knowing use of perjured testimony requires a conviction to be set aside if there is any reasonable likelihood that the false testimony could have affected the judgment of the jury, but, on collateral review, the knowing use of perjured testimony might not give rise to relief if the error is considered harmless under Brecht. See id. Where a movant alleges in a collateral proceeding that the prosecution knowingly presented false testimony during trial, the appropriate inquiry is whether "there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different," Kyles v. Whitley, 514 U.S. 419, 433 (1995) (quoting United States v. Bagley, 473 U.S. 667, 682 (1985)), because such inquiry is the same as the Brecht harmless-error inquiry. See Clay, 720 F.3d at 1026 n.4; see also Wogenstahl, 668 F.3d at 323 (explaining that "a traditional Brady materiality analysis obviates a later harmless-error review under [Brecht and] courts may excuse Brady/Giglio violations involving known and materially false statements as harmless error" (quoting Rosencrantz, 568 F.3d at 584)); Rosencrantz, 568 F.3d at 591 (emphasizing that, under Brecht, the crucial inquiry for due process purposes concerns the effect that the prosecutorial misconduct had on the jury's verdict) (citing Smith v. Phillips, 455 U.S. 209, 219 n.10 (1982)); Mitchell v. Gibson, 262 F.3d 1036, 1062 n.13 (10th Cir. 2001) (explaining that, in collateral proceedings, a court applies the "reasonable probability" standard of Kyles, not the "reasonable likelihood" standard of Giglio, because an error that may have occurred as a result of the presentation of false testimony is still subject to harmless-error analysis under Brecht, which is essentially the same analysis that is required by Kyles); Braun, 227 F.3d at 921 (reviewing government's conduct under "substantial and injurious effect" standard (citing Brecht, 507 U.S. at 637)); Gilday, 59 F.3d at 269 (stating that a court must consider whether the error more likely than not had no effect on the verdict) (citing O'Neal, 513 U.S. at 436). Even if a court concludes that the presentation of false testimony did not have a substantial and injurious effect on the factfinding process at trial, the grant of habeas relief might still be warranted if the circumstances show that "a deliberate and especially egregious error of the trial type, or [an error] that is combined with a pattern of prosecutorial misconduct, [infected] the integrity of the proceeding." Rosencrantz, 568 F.3d at 589 (quoting Brecht, 507 U.S. at 638 n.9).
These proceedings are not a substitute for earlier proceedings, and, consequently, the movant cannot reformulate arguments, reconstruct the record or relitigate issues that have already been decided. The movant has not plausibly alleged cause that excuses his failure to assert the sentencing error earlier and prejudice that resulted from such error. Cf. Clay, 720 F.3d at 1025 n.2 (pointing out that, even though movant arguably procedurally defaulted his claim that his conviction was based on the use of perjured testimony in violation of his right to due process, the merits of such claim would be addressed because the government chose not to argue that movant's claim was procedurally defaulted). The parties presented evidence and arguments in support of their positions regarding the Guidelines and appropriate disposition. Witnesses testified and the court received exhibits. The movant argued that the loss amount was unreliable and unforeseeable. The court previously considered all of the parties' contentions regarding loss under the Guidelines and under 18 U.S.C. § 3553(a). The court overruled the movant's objection regarding the application of USSG §2B1.1(b). After considering all of the Guidelines and the § 3553(a) factors, the court provided reasons that justified the sentence. The court's discussion of the appropriate sentence clearly reflects consideration of the factors under 18 U.S.C. § 3553(a). Assuming that the movant can establish cause for failing to raise the Guidelines issue during sentencing or on direct appeal, the movant cannot show prejudice because the court emphasized that the movant's sentence was well-justified in light of the factors under § 3553(a).
It is clear that, even if the court accepted the movant's argument that the government impermissibly caused the loss amount to increase when it legally asserted its right to forfeiture, the court would have departed or varied upward to arrive at the same sentence because such sentence is the sentence that is sufficient, but not greater than necessary, to achieve the overall goals of sentencing. The extent of the enhancement under USSG §2B1.1(b) really was immaterial because the court made clear that the circumstances justified a term of 324 months imprisonment or a greater term of imprisonment. The movant does not assert that the court could not have departed or varied upward based on its assessment of the factors under § 3553(a), and the court's explanation of the sentence makes clear that it intended to impose a term of 324 months imprisonment regardless of the Guidelines range. See Molina-Martinez, ___ U.S. at ___, 136 S. Ct. at 1346 (recognizing that, "despite application of an erroneous Guidelines range, a reasonable probability of prejudice does not exist" when "[t]he record in the case . . . show[s] . . . that the district court thought the sentence it chose was appropriate irrespective of the Guidelines range"); United States v. Hentges, 817 F.3d 1067, 1068 (8th Cir. 2016) (finding that district court's variant sentence made it unnecessary to address whether district court erred in applying the Guidelines); United States v. Hager, 609 F. App'x 355, 358 (8th Cir. 2015) (finding that there was no need to determine whether district court procedurally erred because the record unequivocally indicated that the district court would have imposed the same sentence based on the 18 U.S.C. § 3553(a) factors); United States v. Pappas, 715 F.3d 225, 230 (8th Cir. 2013) (holding that any error in applying the Guidelines was harmless because district court made sufficient findings that sentence would be the same regardless of calculations under the Guidelines); United States v. Sanchez-Martinez, 633 F.3d 658, 660-61 (8th Cir. 2011) (concluding that miscalculation of the advisory Guidelines range was harmless because the record clearly established that district court intended to impose the same sentence under 18 U.S.C. § 3553(a) regardless of the error); United States v. Henson, 550 F.3d 739, 741-42 (8th Cir. 2008) (emphasizing that district court's procedural error did not substantially influence the outcome of the sentencing proceeding because judge expressly took into account the potential impact of the claimed error and made clear that he intended to impose the same sentence); United States v. Idriss, 436 F.3d 946, 951 (8th Cir. 2006) (emphasizing that non-constitutional misapplication of the Guidelines does not require remand if the record establishes that district court would have imposed the same sentence absent the error). A variant sentence based on the factors under § 3553(a) defeats any claim that the movant suffered prejudice. In light of the record, it is clear that the court's application of the advisory sentencing Guidelines, consideration of the parties' sentencing arguments and application of the sentencing factors under 18 U.S.C. § 3553(a) violated no constitutional right. Nothing restricted the court's discretion during the sentencing hearing, and the sentence that the movant received is reasonable and appropriate. Accordingly, the movant's sentencing error claim is procedurally defaulted, and relief on the basis of such error is unavailable to the movant.
Further, an issue which has been decided by the Eighth Circuit Court of Appeals may not be revisited absent exceptional circumstances. An example of such a circumstance includes an intervening change in the law. No intervening change in the law or other extraordinary circumstance exists such that it is appropriate to relitigate the issue of loss under the Guidelines. See Baranski, 515 F.3d at 861 (affirming district court's decision denying collateral relief because prior rulings were law of the case and movant did not establish an intervening change in controlling authority); see also United States v. Marks, 768 F.3d 1215, 1218 (8th Cir. 2014) (explaining that the law of the case doctrine requires an appellate court to adhere to decisions that were made in earlier proceedings unless a party introduces substantially different evidence or the prior decision is clearly erroneous and works a manifest injustice); United States v. Winters, 600 F.3d 963, 966 (8th Cir. 2010) (concluding that additional evidence offered in subsequent proceeding after remand did not substantially differ from testimony offered at earlier hearing); United States v. Bartsh, 69 F.3d 864, 866-67 (8th Cir. 1995) (determining that district court did not err in determining that law of the case doctrine precluded further review of defendant's sentence even though district court arrived at a different loss amount on remand).
Even if the movant's claim concerning the loss amount was not procedurally defaulted, it is not cognizable. Any entitlement to collateral relief is severely limited; the language of § 2255(a) demonstrates that collateral review is available for a narrow range of defects. The facts asserted by the movant do not establish "exceptional circumstances where the need for the remedy afforded by the writ of habeas corpus is apparent." Hill, 368 U.S. at 428. No sentencing error amounted to a fundamental defect which inherently resulted in a complete miscarriage of justice. See Sun Bear, 644 F.3d at 704-05 (concluding that sentencing errors are generally not cognizable in § 2255 proceedings).
As the government correctly points out, claims involving errors in the application of the sentencing Guidelines, which are non-constitutional errors, generally are not cognizable under § 2255. See Addonizio, 442 U.S. at 187-88 (explaining that a district court's subjective intent in sentencing is not a subject cognizable on § 2255 review); Henson, 550 F.3d at 741 (stating that district court's improper treatment of the sentencing range as presumptively reasonable was undoubtedly a non-constitutional error). Unless the record reflects a fundamental defect in the proceedings which necessarily resulted in a complete miscarriage of justice, a sentencing error, to wit a non-constitutional error, cannot be raised in a § 2255 motion.
The movant cannot use § 2255 to raise the alleged error in calculating the Guidelines range. The error asserted by the movant is not a member of the "small" class of errors which would call for § 2255 review. See United States v. Peterman, 249 F.3d 458, 462 (6th Cir. 2001) ("Courts have generally declined to collaterally review sentences that fall within the statutory maximum."); Pregent, 190 F.3d at 284 ("[W]hile § 2255 applies to violations of statutes establishing maximum sentences, it does not usually apply to errors in the application of the Sentencing Guidelines."); Auman, 67 F.3d at 161 ("While section 2255 does provide relief for cases in which `the sentence was in excess of the maximum authorized by law,' this provision applies to violations of statutes establishing maximum sentences, rather than garden-variety Sentencing Guideline application issues."). The alleged error in the application of the advisory Guidelines is not a fundamental defect that inherently results in a complete miscarriage of justice.
Notably, when the court sentenced the movant, it relied on advisory Guidelines and the movant received a sentence that is below the maximum that is authorized by the law. See United States v. Villareal-Amarillas, 562 F.3d 892, 898 (8th Cir. 2009) (observing that a sentencing judge is only constrained by the statutory maximum and minimum for an offense and the factors included in 18 U.S.C. § 3553(a)). The court sentenced the movant within the statutory limits, and, although actual loss under USSG §2B1.1(b) was an issue at the time of sentencing, the application of USSG §2B1.1(b) did not affect the lawfulness of the movant's sentence—then or now. In the context of collateral proceedings, a sentence below the ceiling imposed by Congress—whether by statute or the Guidelines—does not constitute a miscarriage of justice. Therefore, the court is not presented with exceptional circumstances where the need for the remedy afforded by the writ of habeas corpus is apparent.
The dimensions of the issues that are addressed during a criminal trial and during a sentencing hearing are fundamentally different. See Nichols v. United States, 511 U.S. 738, 747 (1994) (noting that "the sentencing process . . . [is] less exacting than the process of establishing guilt"). Indeed, a sentencing hearing is not undertaken to convict a defendant for the alleged violation, and, therefore, it does not give rise to the full panoply of rights that are due a defendant at trial. See Witte, 515 U.S. at 399-401 (noting that sentencing courts have traditionally considered a wide range of information without the procedural protections of a criminal trial). It is also clear that different standards apply when trial errors and sentencing errors are reviewed on direct appeal and when they are reviewed in a collateral proceeding. Compare Wogenstahl, 668 F.3d at 323 (emphasizing that the knowing use of perjured testimony requires an appellate court to set aside a conviction if there is any reasonable likelihood that the false testimony could have affected the judgment of the jury), and United States v. Boyce, 564 F.3d 911, 918 (8th Cir. 2009) (explaining that, where a defendant asserts that a violation of due process occurred at the time of sentencing, appellate relief is available if the defendant establishes that "the prosecution used perjured testimony, [that it] knew or should have known of the perjury, and that there is a `reasonable likelihood that the perjured testimony could have affected the [court's] judgment'" (quoting United States v. Martin, 59 F.3d 767, 770 (8th Cir. 1995) (second alteration in original)), with Clay, 720 F.3d at 1026 n.4 (explaining that, in a collateral proceeding where a movant asserts that the prosecution knowingly presented false testimony during trial, the appropriate inquiry is whether there is "a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different" (quoting Rosencrantz, 568 F.3d at 584 n.1)), and Grant, 72 F.3d at 506 (emphasizing that only where "the error is committed in a context that is so positively outrageous as to indicate a `complete miscarriage of justice'" does due process require a district court to "correct" a sentence that is in every sense final).
Here, the movant does not argue that the government presented false testimony or committed misconduct during trial. Rather, the movant argues that the total loss that the victims suffered and the court calculated for sentencing purposes was based on false or misleading testimony and incomplete information. But, the movant falls woefully short of establishing that the alleged error was committed in a context that is so positively outrageous as to indicate a complete miscarriage of justice. See Grant, 72 F.3d at 506.
It is apparent that the position advanced by the movant in this proceeding is essentially the same position that he advanced in prior proceedings. In advance of the sentencing hearing, throughout his sentencing proceeding and after judgment entered against him, the movant argued some variation of the following:
Similarly, the evidence of record clearly revealed the government's purpose for asserting a forfeiture allegation and the manner in which the government advanced its forfeiture rights. The government consistently asserted some variation of the following:
At nearly the outset of criminal proceedings against the movant and Agriprocessors, the government decided to put potential buyers on notice that any asset acquired with or for a defendant and any money paid to a defendant could be subject to forfeiture. And, shortly after making such decision, the government included a forfeiture allegation in the December 11, 2008 third superseding indictment.
Aside from the fact that readily available information indicated that the government was trying to prevent Aaron Rubashkin from regaining control of Agriprocessors either directly or through another purchaser and would pursue forfeiture if any of Agriprocessors' assets were ultimately owned by the Rubashkins, controlled by the Rubashkins or used for the benefit of the Rubashkins, abundant information apprised the movant that the bankruptcy trustee, FBBC and other interested parties had concerns about the government's forfeiture position. Actual documents disclosed those concerns, and it would have been obvious to anyone involved in the bankruptcy process that the issue of forfeiture would need to be addressed.
The arguments offered by the movant with respect to Paula Roby's testimony do not support a finding that Paula Roby committed perjury. If all of Paula Roby's testimony is considered, it cannot be said that she wilfully intended to provide either false or substantially misleading testimony. See Tassin v. Cain, 517 F.3d 770, 778-79 (5th Cir. 2008). Rather, it is clear that any inaccuracy in her testimony occurred as a result of confusion, mistake or faulty memory.
Paula Roby's testimony can be fairly characterized as generally addressing the following:
See Sentencing Transcript (criminal docket no. 937) at 485-519. Paula Roby repeatedly emphasized that potential bidders needed to work out forfeiture details with the government. She never implied that the government was not pursuing forfeiture. In February of 2009, she clearly thought that the government's forfeiture position did not prohibit all involvement by the Rubashkins, that is, they could have some type of limited involvement. It is apparent that she believed Aaron Rubashkin could be involved as an advisor and other Rubashkins could be employed in some capacity. By relying on terms such as "advisor", she fairly conveyed that the circumstances under which the government would pursue forfeiture depended on the manner in which the Rubashkins would be involved and the benefit they would receive.
The movant's attempts to disparage the government and its witnesses are misguided. There was no doubt that the government would be pursuing all of its significant interests. But, it was also true that the government appropriately recognized that it could not act out of vindictiveness and that the advancement of its rights to forfeiture had limits. It clearly tried to balance the interests of the Postville community and other interests against its assertion of its right to forfeiture. Indeed, it did not persist when SHF Industries, LLC indicated that it was unwilling to go forward if the government continued to pursue its forfeiture interests. And, consistent with testimony offered at the sentencing hearing, the bankruptcy trustee did what he thought was in the best interests of creditors. Even though the government expressed reservations about Heshy Rubashkin being involved in Agriprocessors, the government did not interfere with the bankruptcy trustee's determinations as to what was best for Agriprocessors.
Regarding the movant's attempts to disparage the government's witnesses, a fair description of the record reveals that the government's witnesses actually provided testimony that favored the movant, or, at least, can be described as relatively neutral. See Boyce, 564 F.3d at 918 (concluding that defendant failed to establish a reasonable likelihood that false statements affected his sentence). They both acknowledged that the government's forfeiture position caused people to react, to explore the limitations or restrictions on the Rubashkins and/or to seek information about the parameters of the government's forfeiture position. The government's witnesses provided testimony that aligned with the work that they did: FBI Special Agent Randy Van Gent investigated the movant, and Paula Roby, as counsel for the bankruptcy trustee, served the interests of the creditors of the bankruptcy estate. They both expressed views based on their observations and perspectives.
The movant mischaracterizes the new evidence. A fair description of the new evidence indicates the following:
See Movant App'x (civil docket no. 44-1) at 88-98, 170-77. The movant's new evidence is consistent with the evidence that the movant previously relied on during sentencing proceedings. It does not substantially differ from the evidence that the parties presented during the sentencing hearing. Because the new evidence that the movant relies on is essentially the same as the evidence that he previously introduced during the sentencing hearing, a reasonable probability that the result of the sentencing proceeding would have been different does not exist. Thus, it cannot be said that the government's conduct caused a complete miscarriage of justice, see Grant, 72 F.3d at 506, or had a substantial and injurious effect or influence in determining the outcome, see Brecht, 507 U.S. at 637.
The movant had all the information that he needed to make a full and fair argument concerning the loss amount. After obtaining relevant information, nothing prevented the movant from following up or conducting further investigation. And, nothing prevented the movant from doing more with the information that he had. The movant absolutely could have provided a different accounting and/or made other arguments, including an argument about the legality of the government's forfeiture position.
Given the parties' positions, the court understood that numerous variables or factors, not just the government's forfeiture position, could have impacted the value of Agriprocessors. It also understood that reasonably accurate estimates for those variables or factors could not be provided.
The record is filled with statements that make it relatively easy to infer that the circumstances surrounding the sale of Agriprocessors' assets involved many considerations. For example, it is possible that the value of Agriprocessors could have been influenced by the following:
Not one of those variables considerably outweighs the other listed variables. The government's role is no more important than the role that FBBC, the bankruptcy trustee, the Rubashkins or potential buyers played prior to and/or during bankruptcy proceedings.
The movant repeatedly emphasizes that potential buyers would have paid more for Agriprocessors if the Rubashkins could have been involved, but he fails to acknowledge that some buyers wanted absolutely nothing to do with the Rubashkins and were willing to spend around $50,000,000. He also fails to recognize that the buyers' declarations that they would have paid more if the Rubashkins could have had an ownership interest or management role directly conflicts with their interest in paying as little as possible for Agriprocessors' assets. No potential buyer could credibly assert that Aaron Rubashkin's name and the involvement of the other remaining Rubashkins had value in the tens of millions, and it is highly likely that buyers' interests in obtaining a sale price as low as possible far outweighed the value and good will associated with the use of Aaron Rubashkin's name and the involvement of the Rubashkins. Potential buyers clearly had an incentive to profess their need for the Rubashkins to be involved and their desire that the government not assert its forfeiture rights. Indeed, they cannot credibly deny that they wanted to pay as little as possible for Agriprocessors' assets.
It is telling that not one potential buyer deemed the government's forfeiture position and the involvement of the Rubashkins to be so important that they asked to meet with the government to negotiate appropriate terms. The movant does not point to businesses or individuals that identified the government's forfeiture position as an overwhelming concern and deemed it essential to negotiate an agreement not to pursue forfeiture before submitting a bid or offer. Sophisticated businesses run by savvy individuals do not run from a challenge. Rather, they seize opportunities, especially when an opportunity benefits the bottom line. If it serves their interests, savvy investors who have concerns attempt to get them addressed. If any potential buyer really thought that the remaining Rubashkins were indispensable or the government's forfeiture position caused unreasonable restrictions, such buyer could have sought to negotiate favorable terms with the government. And, if negotiations with the government failed to alleviate a potential buyer's concerns, nothing prevented such buyer from pursuing other options, such as asking the bankruptcy trustee or the United States Bankruptcy Court for the Northern District of Iowa to get involved. The suggestion that savvy individuals felt so threatened or frightened by the government that they would not even entertain the thought of asking for a meeting is unbelievable; it is incredibly difficult to conclude that all investors were so debilitated by fear that they refused to act in any manner whatsoever.
In order for the court to depart downward, reliable evidence regarding the impact that particular factors had on the sale of Agriprocessors' assets needed to be part of the record. The movant did not present specific evidence to support his theory about a depressed sale price, and, as a result, the court could not reasonably estimate the value associated with particular factors. The court still cannot reasonably estimate the value associated with specific factors and doubts that it ever could given the circumstances surrounding this case.
During the sentencing hearing, the government exercised great restraint. Due to the evidence already in the record, the government did not have to offer anything but a temperate response, that is, it only needed to admit reliable evidence of the banks' losses during the sentencing hearing.
Throughout sentencing proceedings, the movant never emphasized a specific value that could be attributed to any particular factor, and nobody placed a value on any particular factor that impacted the sale of Agriprocessors' assets. When the government called Paula Roby as a rebuttal witness, Paula Roby opined that she did not think the government's forfeiture position impacted the sale of Agriprocessors' assets. And, the movant's sur-rebuttal witness failed to identify all of the considerations that caused him not to make an offer for Agriprocessors' assets or a specific number that he associated with having the Rubashkins involved in a new entity. He only testified that he believed the prohibition against having Aaron Rubashkin involved in a successor corporation reduced the value of Agriprocessors by millions of dollars.
Contrary to the movant's contention, the court did not discredit or credit any specific testimony of any witness. It did not specify the forfeiture position that it believed the government advanced during bankruptcy proceedings because a determination regarding the loss amount did not hinge on the exact nature of the government's forfeiture position. It was clear that the government aggressively pursued its right to forfeiture. But, it was also clear that not all involvement by Rubashkins was prohibited. Because it was clear from Meyer Eichler's affidavit and Paula Roby's testimony that no absolute prohibition regarding all of the Rubashkins existed, it was not difficult to reject the movant's argument that no purchaser could have any involvement whatsoever with the movant or the movant's family. Rather than focus on the extent of the government's restriction on the Rubashkins' involvement, the court focused on whether any forfeiture position could have impacted the sale price of Agriprocessors' assets. The court credited Paula Roby's opinion about the impact that the government's forfeiture position had on potential bidders. And, the court discredited witnesses' opinions that were offered in support of the movant's assertion that the government's forfeiture position resulted in a depressed sale price of Agriprocessors' assets. Namely, the court did not find that the value of Agriprocessors' assets fell by millions of dollars because buyers could have absolutely no association or involvement with Aaron Rubashkin, that is, could not even ask Aaron Rubashkin for advice on how to move forward, or that buyers opted not to bid because they could not put together a sufficiently experienced management team if a Rubashkin could not be part of it.
At their core, the movant's allegations regarding the government's conduct amount to no more than the use of accusations, especially unjust ones, to damage the reputation of an opponent. The movant's mudslinging is wholly inappropriate. Although zealous advocacy is permitted, a litigant may not embellish, disparage and take words out of context in an effort to prove a weak or non-existent argument. Clearly, the movant's all-consuming endeavor to call into question the government's actions and to impugn witness testimony caused him to lose track of the central issue in this proceeding.
The government never disputed that it sought forfeiture of Agriprocessors' assets and that it took steps to enforce its right to forfeiture. But, without credible evidence that established amounts that could be attributed to various factors, the government's forfeiture position and what it did during bankruptcy proceedings really had no bearing whatsoever on the sentencing proceeding. When initially making points about the Guidelines, the parties presented straight-forward calculations, and neither the government nor the movant offered any specific evidence regarding any particular factor. Given the movant's evidence, the government really had no reason to call a rebuttal witness. And, even after the government offered the rebuttal testimony of Paula Roby and the movant offered the sur-rebuttal testimony Steve Cohen, the evidence of record did not show with any specificity whatsoever the impact that the government's forfeiture position had on the value of Agriprocessors' assets.
It is apparent that the movant is reluctant to focus on the facts because the facts do not give rise to relief. Speculation that one factor over all of the other factors caused an increase in the loss amount is not a sufficient basis for a court to impose a sentence. It is not possible to reasonably approximate values for particular factors. This is particularly evident when some of the numbers that are part of the record are analyzed: (1) as of June 27, 2008, no reasonable investor would pay more than the enterprise value of $26,916,000 for Agriprocessors' assets to be free and clear of the debt security holder's obligations; (2) as of June 27, 2008, Agriprocessors had a book value of $10,205,000 and $21,929,246 in net property, plant and equipment; (3) in the summer of 2008, the Rubashkin family was asking Mordechai Korf to pay around $40,000,000 for Agriprocessors;
The $68,662,617 number that the movant provides as a starting point for the value of Agriprocessors' assets is disingenuous. Regarding the more realistic starting point that is at some point below $40,000,000, potential buyers would absolutely be concerned about how to value Agriprocessors in light of various factors, including accounting irregularities, and to suggest that those factors did not decrease the $40,000,000 value that the Rubashkins placed on Agriprocessors is absolutely belied by the actions of bidders.
The movant argues that the loss amount is no more than $19,500,000, which is $27,000,000 (FBBC's outstanding unpaid balance) — $7,500,000 (the difference between the bid of almost $16,000,000 during the March auction and the $8,500,000 paid by SHF Industries, LLC). But, he fails to acknowledge that Eli Soglowek offered between $17,000,000 and $23,000,000 on April 19, 2009, which purportedly would have accounted for the government's forfeiture threats. So, something other than the government's forfeiture position must account for the $8,500,000 to $14,500,000 drop that occurred between April 19, 2009 and July 20, 2009.
In addition, the movant argues that the government interfered with the free operation of market forces by asserting its legal right to forfeiture. But, he wholly fails to address the fact that he improperly interfered with the free operation of market forces well before and after Agriprocessors filed for bankruptcy. Aside from the fact that harboring an illegal workforce and committing financial crimes artificially increased the value of Agriprocessors for a lengthy amount of time, the movant and Agriprocessors duped FBBC into providing another $5,000,000 in DIP financing, that is, before it realized the extent of the fraud. FBBC unwittingly loaned such amount without realizing that the movant falsely inflated Agriprocessors' accounts receivable by $10,000,000 and that it would be unable to recover approximately $5,000,000 as a result of the movant's failure to comply with the Packers and Stockyards Act. It is possible that the movant's failure to disclose his unlawful conduct and additional unlawful conduct, even after being indicted by the government, bolstered the sale price of Agriprocessors' assets because the bankruptcy trustee was able to sell Agriprocessors as a going concern. At a minimum, it is probable that FBBC would have made different choices if it had known the extent of the fraudulent activity and the low amount that it would ultimately recover.
The movant asserts that the government's misconduct deprived him of a fair sentencing hearing. There is absolutely no support for the movant's allegations of misconduct. The government did not conceal any information that materially affected the outcome of the sentencing hearing and it did not offer misleading testimony. The court was neither misinformed nor uninformed as to any relevant circumstance, correctly applied the Guidelines and imposed a sentence after exercising its informed discretion.
Markert, 774 F.3d at 926. After considering all of the evidence and the arguments of the parties in light of the evidence and the Guidelines, the court correctly calculated the loss amount.
As the court observed during sentencing proceedings, the movant's theory regarding loss was fundamentally flawed in that it disregarded the general effect that a massive fraudulent scheme and a subsequent bankruptcy have on the value of a corporation's assets. There is a common denominator among the various factors that affected the sale of Agriprocessors' assets: the movant and Agriprocessors. When assigning fault, nearly all, if not all, of the loss amount is attributable to the conduct of the movant and Agriprocessors. But for the criminal actions of the movant and Agriprocessors, the government would not have asserted a forfeiture allegation. But for the actions of the movant and Agriprocessors, no bankruptcy petition would have been filed. But for the actions of the movant and Agriprocessors, prospective bidders would have been able to evaluate the value of Agriprocessors with some certainty. The movant's conduct, through Agriprocessors, was the foreseeable cause of loss.
The court was well aware of the movant's position at the time of sentencing. The court understood that the movant blamed the government for failing to work with him and his lawyers before the ICE enforcement action, the government for prosecuting him and seeking forfeiture, FBBC, his illegal workforce, his father, managers of Agriprocessors, other employees of Agriprocessors, the bankruptcy trustee, etc. It also understood that the movant orchestrated a massive criminal scheme that impacted a very large community, that is, defrauded financial institutions for approximately ten years, harbored an illegal workforce and laundered millions of dollars in an effort to provide kosher products across the nation. The court recognized that the movant repeatedly tried to obstruct justice when his criminal scheme came to light, never acknowledged what the law requires and never wholeheartedly accepted responsibility. The court knew that the movant's criminal conduct caused many individuals and entities to respond and that a business that is unable or unwilling to comply with the law could prove to be worthless, or, at the very least, significantly devalued.
The movant's alleged sentencing error is based on nothing more than a conclusory assertion that the loss estimate might have gone down if the movant could have established that the government's exercise of its lawful right to forfeiture caused a decrease in Agriprocessors' value. Clearly, in order to arrive a lower Guidelines range, the loss would have had to be $20,000,000 or less. And, in order to arrive at a Guidelines range that did not encompass 324 months imprisonment, the loss would have had to be $7,000,000 or less. But, FBI Special Agent Randy Van Gent testified that inflated collateral exceeded $12,000,000 and the movant conceded on appeal that such number should have been used to calculate loss. More importantly, there is absolutely no need to recalculate the loss that the victims suffered, and a number that is more reasonable than the one that the court calculated could not be determined given all of the variables. Supposition as to the value of a business that does not face forfeiture allegations is not a proper basis to estimate loss. The movant does not suggest a way to reasonably quantify such a variable and implicitly acknowledged that it could not be quantified when he failed to present reliable evidence at the sentencing hearing. It necessarily follows then that there is absolutely no need to resentence the movant.
The court did not base the movant's sentence upon misinformation of constitutional magnitude; the court did not arrive at the movant's sentence after relying on any incorrect facts. Neither the government nor its witnesses misled the court about anything. See Boyce, 564 F.3d at 918-19 (concluding that no due process violation occurred as a result of any alleged misconduct by the government during defendant's sentencing and emphasizing that inconsistent testimony does not always create a due process concern). Surely, the government would not have pursued forfeiture absent the movant's criminal conduct, and the loss that the court calculated appropriately accounts for the natural and foreseeable consequences of such conduct. See United States v. Morris, 744 F.3d 1373, 1374 (9th Cir. 2014) (emphasizing that the sentencing Guidelines "ensure that defendants who fraudulently induce financial institutions to assume the risk of lending to an unqualified borrower [be held] responsible for the natural consequences of their fraudulent conduct" (quoting United States v. Mallory, 709 F.Supp.2d 455, 459 (E.D. Va. 2010))); Rubashkin, 655 F.3d at 868 (citing Turk, 626 F.3d at 750); Parish, 565 F.3d at 535 ("The appropriate test is not whether market factors impacted the amount of loss, but whether the market factors and the resulting loss were reasonably foreseeable.").
The movant is unable to overcome procedural obstacles and presents a ground for relief that is not cognizable in § 2255 proceedings. Moreover, even if the movant's arguments regarding the sentencing error are considered, it is clear that they are meritless, frivolous and/or malicious. Accordingly, the movant is not entitled to relief based on ground one.
With respect to the alleged Brady violation that occurred during trial, the movant
Mandacina v. United States, 328 F.3d 995, 1001 (8th Cir. 2003).
The Brady standard is not met if a movant shows a mere possibility that the suppressed evidence might have produced a different outcome. See United States v. Agurs, 427 U.S. 97, 109-10 (1976) ("The mere possibility that an item of undisclosed information might have helped the defense . . . does not establish `materiality' in the constitutional sense."); United States v. Sigillito, 759 F.3d 913, 929 (8th Cir. 2014) (quoting United States v. Haskell, 468 F.3d 1064, 1075 (8th Cir. 2006)). Further, the
Clay, 720 F.3d at 1026 n.4.
Sigillito, 759 F.3d at 929; see also United States v. Roy, 781 F.3d 416, 421 (8th Cir. 2015) (emphasizing that no Brady violation occurs if a defendant has access to undisclosed evidence through other channels); United States v. Ladoucer, 573 F.3d 628, 636-37 (8th Cir. 2009) (citing Jones, 160 F.3d at 479); United States v. Willis, 997 F.2d 407, 412-13 (8th Cir. 1993) ("Due process does not require the prosecution to turn over its entire file or to do the defense counsel's work." (citing United States v. Pou, 953 F.2d 363, 366 (8th Cir. 1992)); United States v. McMahan, 744 F.2d 647, 651 (8th Cir. 1984) ("[Brady] does not require the government to provide defendants with all information it has regarding each of its witnesses.").
Having reviewed the entire record, the court concludes that no Brady violation occurred. See, e.g., Gov't App'x (civil docket no. 52-1) at 142-212. The government correctly points out that: the movant denied having any knowledge whatsoever of why it was necessary to round checks up and transfer money between accounts, the movant thought Mitchel Meltzer or Yomtov Bensasson were responsible for doing so and the movant presented evidence and argument concerning the float during trial. It also correctly points out that the statements offered by Mitchel Meltzer: incriminate the movant; are cumulative of Yomtov Bensasson's testimony; are based on what he thought the movant was doing when law enforcement officers told him what was occurring; are not probative of the movant's actual state of mind at the time he committed criminal acts; and fail to account for why the movant directed checks to be rounded up and why the movant concealed or manipulated financial transactions. Cf. United States v. Ellefsen, 655 F.3d 769, 777-78 (8th Cir. 2011) (observing that "self-serving exculpatory acts performed substantially after a defendant's wrongdoing is discovered are of minimal probative value as to [a defendant's] state of mind at the time of the alleged crime" (quoting United States v. Radtke, 415 F.3d 826, 840-41 (8th Cir. 2005))).
Given the record, it cannot be said that any additional testimony by Mitchel Meltzer would have had a substantial influence on the jury's verdicts, especially considering that the other evidence overwhelmingly weighed in favor of the jury's verdicts. The jury apparently did not believe anything that the movant testified about and Mitchel Meltzer's testimony about an intent that the movant denied having would have had absolutely no effect or influence in determining the jury's verdicts. See Brecht, 507 U.S. at 637. The movant advances a position that is not consistent with the position that he advanced during trial and he is unable to advance a new theory that is based on an opinion that has limited or no bearing on the movant's state of mind at the time he committed criminal acts, especially considering that the movant offers no explanation whatsoever for directing the use of particular numbers.
Nothing the government did was of such a magnitude that it actually casts doubt on the integrity of the jury's verdicts. See Robinson, 809 F.3d at 997 (concluding that there was no reasonable probability defendant would have been acquitted given the additional testimony of an eye witness). And, it necessarily follows that the court's sentences are proper. Accordingly, the movant is not entitled to relief based on ground three.
In a 28 U.S.C. § 2255 proceeding before a district judge, the final order is subject toreview, on appeal, by the court of appeals for the circuit in which the proceeding is held. See 28 U.S.C. § 2253(a). Unless a circuit justice or judge issues a certificate of appealability, an appeal may not be taken to the court of appeals. See 28 U.S.C. § 2253(c)(1)(A). A district court possesses the authority to issue certificates of appealability under 28 U.S.C. § 2253(c) and Fed. R. App. P. 22(b). See Tiedeman v. Benson, 122 F.3d 518, 522 (8th Cir. 1997). Under 28 U.S.C. § 2253(c)(2), a certificate of appealability may issue only if a movant has made a substantial showing of the denial of a constitutional right.S eeMiller-El v. Cockrell, 537 U.S. 322, 335-36 (2003); Garrett v. United States, 211 F.3d 1075, 1076-77 (8th Cir. 2000); Carter v. Hopkins, 151 F.3d 872, 873-74 (8th Cir. 1998); Cox v. Norris, 133 F.3d 565, 569 (8th Cir. 1997); Tiedeman, 122 F.3d at 523. To make such a showing, the issues must be debatable among reasonable jurists, a court could resolve the issues differently, or the issues deserve further proceedings. See Cox, 133 F.3d at 569 (citing Flieger v. Delo, 16 F.3d 878, 882-83 (8th Cir. 1994)); seealso Miller-El, 537 U.S. at 335-36 (reiterating standard).
Courts reject constitutionalclaims either on the merits or on procedural grounds. "`[W]here a district court has rejected the constitutional claims on the merits, the showing required to satisfy[28 U.S.C.] § 2253(c) is straightforward: the [movant] must demonstrate that reasonable jurists would find the district court's assessment of the constitutional claims debatable or wrong.'" Miller-El, 537 U.S. at 338 (quoting Slack v. McDaniel, 529 U.S. 473, 484 (2000)). When a federal habeas petition is dismissed on procedural grounds without reaching the underlying constitutional claim, "the [movant must show], at least, that juristsof reason would find it debatable whether the petition states a valid claim of the denial of a constitutional right and that jurists of reason would find it debatable whether the district court was correct in its procedural ruling." See Slack, 529 U.S. at 484.
Having thoroughly reviewed the record in this case, the court finds that the movant failed to make the requisite "substantial showing" with respect to the grounds that he raised in his motion to vacate, set aside or correct sentence pursuant to 28 U.S.C. § 2255. See 28 U.S.C. § 2253(c)(2); Fed. R. App. P. 22(b). Because he does not present a question of substance for appellate review, there is no reason to grant a certificate of appealability. Accordingly, a certificate of appealability shall be denied. If he desires further review of his 28 U.S.C. § 2255 motion, the movant may request issuance of the certificate of appealability by a circuit judge of the Eighth Circuit Court of Appeals in accordance with Tiedeman, 122 F.3d at 520-22.
There is no need for discovery or an evidentiary hearing because the facts and legal contentions are adequately presented in the parties' briefs, and neither discovery nor an evidentiary hearing would aid the decisional process. There is no need to prolong this case any further because it is very clear that this is not a case where the government's conduct strikes a heavy blow to the public's "trust in the prosecutor as `the representative . . . of a sovereignty . . . whose interest . . . in a criminal prosecution is not that it shall win a case, but that justice shall be done.'" Kyles, 514 U.S. 439 (alterations in original) (quoting Berger v. United States, 295 U.S. 78, 88 (1935)). The prosecutors in this case appropriately prosecuted the movant with "earnestness and vigor." Berger, 295 U.S. at 88. Their zealous advocacy never caused them to rely on "improper methods calculated to produce . . . wrongful conviction[s]" or sentences. Id. Throughout all steps in this case, the government remained committed to ensuring that the factfinding process would be fair.
The accuracy of the outcome is not subject to second-guessing because the government did not present false or misleading evidence, did not fail to correct false or misleading evidence and did not fail to disclose material evidence. The jury fairly and dispassionately considered all of the evidence when deciding what verdicts to return, and the court fairly and dispassionately considered all of the evidence when deciding what sentences to impose. The movant's convictions and sentences remain valid. None of the movant's grounds for relief, including the ground that the court resolved on January 20, 2016, have any merit. Accordingly, the movant's motion pursuant to 28 U.S.C. § 2255 shall be denied.
As for a certificate of appealability, the movant has not made the requisite showing. See 28 U.S.C. § 2253(c)(2). Accordingly, a certificate of appealability under 28 U.S.C. § 2253 will not issue. If he deems it appropriate, the movant may seek a certificate of appealability at the appellate level.
(1) The movant's motion for leave to take discovery is
(2) The movant's motion for an evidentiary hearing is
(3) The movant's motion pursuant to 28 U.S.C. § 2255 is
(4) A certificate of appealability is