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United States v. Brown

United States District Court, D. Montana, Helena Division

February 13, 2018

UNITED STATES OF AMERICA, Plaintiff/Respondent,
ERIKA RAE BROWN, Defendant/Movant.



         This case comes before the Court on Defendant/Movant Erika Rae Brown's motion to vacate, set aside, or correct her sentence, pursuant to 28 U.S.C. § 2255. Brown is a federal prisoner proceeding pro se.

         I. Preliminary Review

         Before the United States is required to respond, the Court must determine whether "the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief." 28 U.S.C. § 2255(b); see also Rule 4(b), Rules Governing Section 2255 Proceedings for the United States District Courts. A petitioner "who is able to state facts showing a real possibility of constitutional error should survive Rule 4 review." Calderon v. United States Dist. Court, 98 F.3d 1102, 1109 (9th Cir. 1996) ("Nicolas") (Schroeder, C.J., concurring) (referring to Rules Governing § 2254 Cases). But the Court should "eliminate the burden that would be placed on the respondent by ordering an unnecessary answer." Advisory Committee Note (1976), Rule 4, Rules Governing § 2254 Cases, cited in Advisory Committee Note (1976), Rule 4, Rules Governing § 2255 Proceedings.

         II. Background

         On January 7, 2015, a grand jury indicted Brown on two counts of money laundering, violations of 18 U.S.C. § 1957 (Counts 1 and 2), and two counts of making a false statement to a government agency, violations of 18 U.S.C. § 1001(a)(2) and (3) (Counts 3 and 4). The Indictment alleged that Brown defrauded Excel National Bank ("the Bank") by persuading it to loan millions of dollars to blue Vault LLC, a company purportedly organizing construction and management of a data storage company near Darby, Montana. Brown presented fictitious letters of intent to use blue Vault's services or to purchase the company. She also presented false invoices and checks to obtain two disbursements of $19, 980 from the Bank in February and March 2010. The United States Department of Agriculture ("USDA") guaranteed the Bank's loan to Brown. In November 2011, Brown made false statements and provided false documents to USDA. See Indictment (Doc. 1) at 1-5.

         If convicted on Counts 1 or 2, Brown faced a maximum prison sentence of ten years and/or a maximum fine of the greater of $250, 000, twice the amount of any criminally derived property, or twice the pecuniary gain or loss. See 18 U.S.C. §§ 1957(b)(1), 3571(b)(3), (d). If convicted on Counts 3 or 4, Brown faced a maximum prison sentence of five years and/or a fine up to $250, 000. See Id. § 1001(a).

         On March 4, 2015, Brown moved to change her plea from not guilty to guilty. A plea agreement was filed on March 10, 2015. Brown agreed to plead guilty to Count 1. The United States agreed to dismiss Counts 2, 3, and 4 and conditionally agreed to seek a three-level reduction in the offense level for acceptance of responsibility, and agreed to recommend a sentence at the low end of an advisory guideline range of 57 to 71 months. Both parties conditionally agreed to waive appeal. See Plea Agreement (Doc. 13) at 2 ¶ 2, 6-7 ¶ 6 paras. 1-2, 7 ¶ 8(a) para. 1. As to restitution, the agreement provided:

Restitution to the United States Department of Agriculture and EH National Bank[1]
Counts II through IV gave rise to this plea agreement. 18 U.S.C. § 3663A(c)(2). The defendant acknowledges and agrees to be responsible for complete restitution regardless of whether a count or counts of the Indictment will be dismissed as part of this plea agreement. 18 U.S.C. § 3663A(a)(3). In particular, the defendant agrees to pay $2, 987, 678.26 to the United States Department of Agriculture and $753, 369.56 to EH National Bank. Moreover, the defendant acknowledges that additional restitution may be ordered upon a final loss settlement between the United States Department of Agriculture and EH National Bank. See 18 U.S.C. § 3664(d)(5).

Id. at 3 ¶ 3 para. 2. No provision of the plea agreement was binding on the Court. See Id. at 2 ¶ 3, 7 ¶ 6 para. 2; Fed. R. Crim. P. 11(c)(1); Change of Plea Tr. (Doc. 51) at 5:23-8:10.

         At the change of plea hearing, the parties explained that Brown obtained a $4 million loan and "the entire bank loan is the specified unlawful activity." The discrete amount of $19, 980 paid to S.M. on February 12, 2010, was selected to establish a specific transaction involving more than $10, 000. See 18 U.S.C. § 1957(a); Change of Plea Tr. at 29:13-31:20. In response to the United States' offer of proof, Brown personally stated that A.T., who worked on the project business plan, "did not say anything about the project being unfeasible for the location and having high start-up costs which would make it non-feasible." Change of Plea Tr. at 34:9-13; compare Offer of Proof (Doc. 22) at 4 para. 3. Brown pled guilty to Count 1 in open court. See Change of Plea Tr. at 35:12-14.

         The United States Probation Office drafted a presentence report. See Fed. R. Crim. P. 32(d)-(g). The Probation Office calculated the loss at $4, 588, 287, or more than $2.5 million but less than $7 million, resulting in an 18-level upward adjustment under U.S.S.G. §2B 1.1 (b)(1)(J). See Presentence Report ¶ 49. Brown objected by tracing the allocation of the proceeds of the loan, eliminating the sums that went to other people or entities, and arguing that the amount of the loss should be limited to Brown's own personal gain of $64, 261. See Objection # 1, Presentence Report at 34 para. 2, 35 para. 5; see also U.S.S.G. § 2B1.1 cmt. n.3(B) (Nov. 1, 2014). Brown also objected to S.M.'s receipt of restitution on the grounds that he should be viewed as a co-conspirator rather than a victim. See Objection #2, Presentence Report at 35-36.

         At sentencing, S.M. did not appear. The United States withdrew its request for restitution for him. See Sentencing Tr. at 4:22-5:8. Brown's objection to the amount of the loss was overruled. The final loss amount was $3, 741, 047.82, the same as the amount of restitution set forth in the plea agreement. Brown was sentenced to serve 56 months in prison, to be followed by a three-year term of supervised release. She was also required to pay $2, 987, 678.26 to USDA and $753, 369.56 to the Bank, as the plea agreement required.

         Brown appealed, challenging the loss amount and the sentencing court's denial of her request for a downward variance. The Ninth Circuit Court of Appeals affirmed her sentence. Her conviction became final on December 14, 2016. See Gonzalez v. Thaler, 565 U.S. 134, 150 (2012). She timely filed her § 2255 motion on July 10, 2017. See 28 U.S.C. § 2255(f)(1); Houston v. Lack, 487 U.S. 266, 276 (1988).

         III. Claims and Analysis

         Brown claims that counsel was ineffective in various respects. These claims are governed by Strickland v. Washington, 466 U.S. 668 (1984). At this stage of the proceedings, Brown must allege facts sufficient to support an inference (1) that counsel's performance fell outside the wide range of reasonable professional assistance, id. at 687-88, and (2) that there is a reasonable probability that, but for counsel's unprofessional performance, the result of the proceeding would have been different, id. at 694. "[T]here is no reason ... to address both components of the inquiry if the defendant makes an insufficient showing on one." Id. at 697.

         Brown's claims are reorganized here, but all are addressed. Three of her claims go to the voluntariness of her guilty plea. She also contends the prosecution breached the plea agreement and ...

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