Scott Wagner v. United States ( 2020 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 20a0124n.06
No. 19-3085
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT FILED
Feb 28, 2020
SCOTT WAGNER ) DEBORAH S. HUNT, Clerk
)
Petitioner-Appellant, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE
UNITED STATES OF AMERICA ) NORTHERN DISTRICT OF
) OHIO
Respondent-Appellee. )
BEFORE: ROGERS, STRANCH, and THAPAR, Circuit Judges
ROGERS, Circuit Judge. Sentenced to 75 months’ imprisonment for numerous federal
white-collar crimes, Scott Wagner moved for relief under 28 U.S.C. § 2255, arguing that his
retained counsel was ineffective for failing to file a notice of appeal. Although Wagner
immediately instructed his counsel to appeal after the jury trial, he subsequently modified that
request after discussion with his attorney. He has accordingly failed to show the district court
erred in holding that his counsel was ineffective in not filing a notice of appeal. With respect to
Wagner’s second claim, the district court properly concluded that Wagner did not receive
ineffective assistance of counsel as to the forfeiture allegations against him.
I.
From 2001 until at least 2012, Scott Wagner participated in a fraudulent billing scheme to
steal over $2.8 million from Owens-Illinois, Inc., an international producer of glass containers.
No. 19-3085, Wagner v. United States
Wagner was the majority owner of Construction Equipment Supply Company (“CES”), which was
in the business of renting and selling industrial machinery and equipment for commercial use.
CES rented equipment to Castalia Farms, which was a hospitality facility in Ohio that Owens-
Illinois had owned and operated since the 1930s. Wagner devised a scheme with Michael Conrad,
an employee of Castalia Farms, to submit false and fraudulent invoices from CES to Owens-
Illinois for goods and services that were not actually delivered or performed by CES. For example,
Wagner would submit invoices seeking payment for equipment rentals that never occurred.
Conrad would receive the fraudulent invoices from Wagner and submit them to Owens-Illinois for
payment. Owens-Illinois would pay these invoices with interstate wire transfers to CES. In turn,
Wagner would share the fraud proceeds with Conrad through various types of kickbacks. In one
instance, Wagner billed nearly $48,000 to Owens-Illinois for landscaping purportedly performed
for Castalia Farms but which was done entirely at Wagner’s personal residence. Conrad was paid
$25,000 for his assistance in submitting the fraudulent invoice to Owens-Illinois.
Wagner, Conrad, and others involved in the scheme were indicted in November 2015. The
indictment charged Wagner with 32 counts of wire fraud and conspiracy to commit wire fraud,
money laundering and conspiracy to commit money laundering, mail fraud and conspiracy to
commit mail fraud, and destruction of records. The indictment also sought forfeiture of Wagner’s
personal residence and forty-five items of construction equipment involved in the scheme. The
jury found Wagner guilty of the wire fraud and money laundering charges (counts 1-26) and
acquitted Wagner of the destruction of records charge (count 32). Counts 27 through 31 were
scheduled to be tried separately because those charges involved a different codefendant, Tom
Walters. Wagner later pled guilty to conspiracy to commit mail fraud (count 27) in exchange for
dismissal of four substantive counts of mail fraud (counts 28-31).
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After the guilty verdict and signing of the plea agreement, Wagner and the Government
stipulated that Wagner owed $1 million in restitution. The court accepted the stipulation and
entered a judgment that included that amount in restitution. The Government also moved for a
preliminary order of forfeiture on October 31, 2017, listing Wagner’s home and forty-five items
of construction equipment. Wagner did not contest the forfeitability of these assets; the motion
stated that “A proposed Preliminary Order of Forfeiture is attached and has been agreed to by
Claimant, Scott C. Wagner, through his counsel.” The motion also indicated that Wagner and the
Government were negotiating a settlement, which would involve the Government’s accepting a
cash payment from Wagner in lieu of forfeiture of the real and personal property listed in the
motion. The district court granted the motion on November 1, 2017, and issued a preliminary
order of forfeiture.
On November 3, 2017, Richard Kerger, who was Wagner’s retained trial attorney, made
what turned out to be an unauthorized settlement offer to the Government. The offer stated that
Wagner would pay $1,423,958 in return for relinquishment of the forfeiture claims against the
house and construction equipment. Kerger withdrew the offer over a month later on December 5,
2017, stating in an email to the Government’s counsel that Wagner was only willing to pay
$1,147,500 to settle the claims.
On February 2, 2018, Wagner entered into an agreement with the Government, whereby
Wagner would pay $1,247,500 to settle the forfeiture claims on his house and construction
equipment. Upon receiving the check from Wagner, the Government filed a motion for final order
of forfeiture, which the court granted on February 23, 2018.
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During the sentencing phase, the district court calculated Wagner’s Sentencing Guidelines
range as 63 to 78 months. The court ultimately sentenced Wagner to 75 months’ imprisonment on
each count, to be served concurrently, and three years of supervised release. Wagner did not appeal
his judgment or any of the forfeiture orders.
In April 2018, Wagner filed a timely pro se motion to vacate under 28 U.S.C. § 2255. In
his motion, he alleged that his retained counsel, Richard Kerger, provided ineffective assistance of
counsel by failing to file a notice of appeal. Wagner alleged that he asked Kerger to file a notice
of appeal after sentencing and that Kerger had agreed to do so. The United States responded to
the motion and attached Kerger’s affidavit. In the affidavit, Kerger stated that Wagner asked him
to file a notice of appeal after the jury verdict but not after the sentencing. According to Kerger,
he told Wagner that he would not prosecute the appeal, but referred Wagner to an appellate
attorney, Ralph Cascarilla.
Kerger further asserted that after the jury verdict and before the sentencing hearing, he
advised Wagner of the risks of filing an appeal. Those risks included the possibility that Wagner
would lose the reduction of his base offense level for acceptance of responsibility. To preserve
Wagner’s eligibility for the reduction despite Wagner’s having gone to trial, Kerger informed
Wagner that he would have to make incriminating statements to the probation officer preparing
his presentence report. Were Wagner to win on appeal and get a new trial, those statements would
be admissible against him, making any such appeal “a waste of time.” Kerger stated that after this
conversation, Wagner “said he still wanted to appeal the sentence if it was excessive.” Kerger
swore that he never discussed the possibility of an appeal after Wagner’s sentencing, thus
contradicting Wagner’s statement in his motion to vacate. Kerger also asserted that “[a]lthough I
had told Mr. Wagner previously that he would need another lawyer to handle any appeal, he did
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not ask me to locate one.” Finally, Kerger stated that Wagner “never told me he did not want an
appeal nor did he specifically tell me he agreed with my analysis.”
Several months after filing his original motion to vacate, Wagner retained Kassem
Dakhlallah, who is acting as his counsel on this appeal. Wagner’s new counsel filed a
supplemental motion to vacate, adding new claims that trial counsel performed ineffectively by
(1) failing to cross-examine two witnesses concerning inconsistent testimony; (2) failing to contest
or respond to the Government’s motions for forfeiture; (3) making a settlement offer to the
government regarding forfeited property without Wagner’s consent; and (4) failing to advise
Wagner of his right to contest the Government’s forfeiture allegations.
In his supplemental motion to vacate, Wagner no longer asserted that he asked Kerger to
file an appeal after the sentencing hearing. The supplemental motion focused exclusively on
Wagner’s express instruction to appeal after his trial and did not address Kerger’s sworn statement
that Wagner later modified this instruction. Accordingly, Wagner did not argue to the district court
that his sentence was “excessive” as he understood that term in his conversation with Kerger.
The district court denied Wagner’s motion without conducting an evidentiary hearing. In
a three-page order, the district court adopted the Government’s recitation of the facts and legal
arguments with respect to Wagner’s cross-examination and forfeiture arguments. The court
conducted its own brief analysis with respect to Wagner’s notice-of-appeal argument. The court
found that Wagner’s claim that he requested an appeal after his sentencing was contradicted by
sworn statements from Kerger and from Wagner’s wife; the latter averred in an affidavit that she
heard Wagner ask Kerger to appeal soon after the return of the jury verdict. The district court
noted that although Wagner gave an express instruction to appeal at the conclusion of his trial, he
modified this instruction later on and “agreed that Kerger would file an appeal only if Wagner’s
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No. 19-3085, Wagner v. United States
sentence was ‘excessive.’” Because Wagner was given a sentence within the Guidelines range,
the district court concluded that his sentence was not “excessive.” Accordingly, the court held that
Kerger had not failed to follow Wagner’s express instruction to appeal.
Citing our unpublished decision in Shelton v. United States, 378 F. App’x 536, 539 (6th
Cir. 2010), the district court also held that Kerger’s advice to Wagner about the costs and benefits
of an appeal satisfied his obligation to consult with his client as established in Roe v. Flores-
Ortega, 528 U.S. 470 (2000). Wagner does not challenge this aspect of the district court’s ruling.
The district court denied a certificate of appealability for all of Wagner’s claims.
Wagner appealed, and we granted a certificate of appealability on “whether trial counsel
performed ineffectively by (1) failing to file a notice of appeal, and (2) failing to challenge the
forfeiture proceedings against Wagner’s wishes or inform Wagner of his right to challenge the
forfeiture proceedings.” Wagner v. United States, No. 19-3085, R. 6-2, at 5 (6th Cir. May 16,
2019) (unpublished order).
II.
Wagner argues both below and on appeal that he asked his attorney, Richard Kerger, to file
a notice of appeal at the conclusion of his trial. See R. 202, PageID #2609; Appellant Br. at 9-10.
He provides an affidavit from his wife that supports this account. Wagner contends Kerger’s
failure to follow his plain instruction to appeal was per se ineffective assistance of counsel under
Roe v. Flores-Ortega, 528 U.S. 470 (2000). See R. 202, PageID #2607, 2609; Appellant Br. at 9.
This argument disregards undisputed evidence of later discussions Kerger had with Wagner during
which Wagner asked Kerger to appeal only if his sentence was “excessive.”
Wagner further contends that Kerger admitted in his affidavit to receiving an unqualified
instruction to appeal immediately following the conclusion of the jury verdict. See R. 202, PageID
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No. 19-3085, Wagner v. United States
#2609; Appellant Br. at 9-10. Once again, however, this argument is irrelevant in light of
Wagner’s subsequent instruction to Kerger, which modified his original, unqualified instruction to
appeal. Wagner also asserts that Kerger demonstrated knowledge of Wagner’s desire to appeal by
contacting an appellate attorney and discussing appellate strategy with Wagner. See R. 202,
PageID #2610-2611; Appellant Br. at 12-13. But the argument that Kerger took preparations to
appeal does not respond to the Government’s argument that Wagner instructed Kerger to appeal
only on the limited condition that he receive an “excessive” sentence. The district court properly
relied on the Government’s evidence to find that Kerger was no longer under an unconditional
obligation to appeal.
Wagner’s failure to address the Government’s argument that he later modified his request
to appeal is fatal to his claim. The onus is on the petitioner to prove that his lawyer was
constitutionally ineffective by a preponderance of the evidence. Pough v. United States, 442 F.3d
959, 964 (6th Cir. 2006). Wagner has failed to meet his burden in this case. Wagner’s
supplemental motion filed with the district court completely neglected to address the
Government’s evidence demonstrating that Wagner’s original, unqualified instruction to appeal
was replaced by a qualified instruction to appeal only an “excessive” sentence. On appeal, Wagner
continues to press the argument that Kerger failed to adhere to his original agreement with Wagner.
See Appellant Br. at 10-11. Wagner has not provided any evidence—either to the district court or
to us—showing that Kerger violated his superseding agreement with Wagner. There is
accordingly no basis for reversing the district court’s determination that Wagner’s counsel was not
ineffective in failing to file a notice of appeal.
It may be that, instead of disregarding the post-conviction pre-sentencing discussions that
Kerger swore to, Wagner might have argued that in those discussions he communicated to Kerger
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No. 19-3085, Wagner v. United States
that he should file a notice of appeal. But Wagner makes no such argument, and made no such
argument below. For instance, the argument could have been made that the district court erred in
relying exclusively on the technical legal meaning of an “excessive” sentence in ascertaining what
the post-verdict pre-sentencing understanding was between Wagner and Kerger. But Wagner
never made such an argument, despite ample opportunity both below and here, and we are not in
a position to make it for him. In particular, Wagner did not respond to the Government’s
argument—later adopted by the district court—that his sentence was not “excessive” because it
fell within the U.S. Sentencing Guidelines range and, therefore, that Kerger was not ineffective for
failing to file a notice of appeal. A party forfeits arguments “not squarely presented to the district
court.” Thomas M. Cooley Law Sch. v. Kurzon Strauss, LLP, 759 F.3d 522, 528 (6th Cir. 2014)
(quoting Dice Corp. v. Bold Techs., 556 F. App’x 378, 384 (6th Cir. 2014)). Wagner forfeited any
such argument regarding the meaning of “excessive” by not addressing it in either of his § 2255
motions to the district court.1
Despite this forfeiture, we could still review the district court’s conduct in a § 2255
proceeding on the basis of plain error. See United States v. Frady, 456 U.S. 152, 166 n.15 (1982)
(citing Rule 12 of the Rules Governing § 2255 Proceedings). But Wagner has not requested that
we reverse on this basis. Rather, his argument on appeal is substantially similar to the one he made
below and thus he has not challenged the district court’s ruling that he received a sentence that was
not “excessive.”2 See Appellant Br. at 8-13.
1
Although Wagner requested an evidentiary hearing below, he has not argued for such a hearing on this appeal.
2
Wagner’s attorney finally raised an “excessive sentence” issue at oral argument. This was too late, however, as
issues raised for the first time at oral argument are considered forfeited on appeal. See United States v. Jackson, 918
F.3d 467, 493 (6th Cir. 2019) (citing United States v. Goldston, 906 F.3d 390, 395 n.1 (6th Cir. 2018)).
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It is true that we have discretion in “exceptional circumstances” to correct plain errors sua
sponte. See Silber v. United States, 370 U.S. 717, 718 (1962) (per curiam); accord United States
v. Graham, 275 F.3d 490, 521-22 (6th Cir. 2001). The circumstances here, however, are not
exceptional. What Wagner and Kerger may in context reasonably have understood by the word
“excessive” was a factual issue, not a legal one. In United States v. Finch, 998 F.2d 349, 355 (6th
Cir. 1993), we declined to address an error not raised on appeal where, as here, the district court
was confronted with a fact-intensive issue and “it is possible that the failure of the [losing party]
to raise the issue [below] may have influenced the manner in which the evidence was developed.”
In addition, Wagner had numerous chances to make such an argument below and on appeal but
failed to do so. Moreover, this is not a case in which sua sponte consideration of plain error is
warranted by an intervening change in the law that invalidated the district court proceedings.
Compare United States v. Pugh, 405 F.3d 390, 401-02 (6th Cir. 2005); United States v. Trammel,
404 F.3d 397, 401 (6th Cir. 2005); United States v. Vaught, 133 F. App’x 229, 238-39 (6th Cir.
2005); Graham, 275 F.3d at 521-22. Accordingly, sua sponte plain error review is not warranted
in the present case.
III.
Wagner brings a second claim under § 2255, alleging that his trial attorney was ineffective
for failing to contest the Government’s forfeiture claims or informing him that he had a right to
challenge forfeiture.
A.
As an initial matter, the Government does not argue that, because Wagner is not “claiming
the right to be released” as required under § 2255, his forfeiture-related claim should be dismissed.
See United States v. Watroba, 56 F.3d 28, 29 (6th Cir. 1995); United States v. Bernard, 351 F.3d
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No. 19-3085, Wagner v. United States
360, 361 (8th Cir. 2003) (collecting cases); but see Weinberger v. United States, 268 F.3d 346, 351
n.1 (6th Cir. 2001). Further, the Government expressly waived this issue at oral argument. We
may accept this waiver and proceed because the limiting language is not jurisdictional.
Section 2255 provides that “[a] prisoner in custody under sentence of a court established
by Act of Congress claiming the right to be released . . . may move the court which imposed the
sentence to vacate, set aside or correct the sentence.” 28 U.S.C. § 2255(a) (emphasis added). The
equivalent statute for state prisoners contains similar language: “a district court shall entertain an
application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment
of a State court only on the ground that he is in custody in violation of the Constitution or laws or
treaties of the United States.” 28 U.S.C. § 2254(a) (emphasis added). These statutes establish two
requirements relevant here: first, that the petitioner be “in custody,” and second, that the petitioner
be “claiming the right to be released,”—or in the § 2254 context, that he seeks a writ of habeas
corpus “on the ground that he is in custody in violation of the Constitution” or federal law.
Congress has not indicated with sufficient clarity that § 2255’s “claiming the right to be
released” requirement is jurisdictional. There is no jurisdictional language to be found in
§ 2255(a). Each requirement in the statute is imposed as a limitation on the movant, not on the
court’s adjudicatory power: “A prisoner in custody . . . claiming the right to be released . . . may
move the court . . . to vacate, set aside, or correct the sentence.” 28 U.S.C. § 2255(a) (emphasis
added). The Supreme Court, in the context of a different habeas provision, explained that “[a] rule
is jurisdictional ‘if the Legislature clearly states that a threshold limitation on a statute’s scope
shall count as jurisdictional.’” Gonzalez v. Thaler, 565 U.S. 134, 141 (2012) (internal brackets
omitted) (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 515 (2006)). Without such a clear
statement, “courts should treat the restriction as nonjurisdictional.” Id. at 142 (quoting Arbaugh,
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No. 19-3085, Wagner v. United States
546 U.S. at 516). In determining whether there is a clear statement, the Gonzalez Court looked for
“‘clear’ jurisdictional language.” Id. For instance, the Court acknowledged the presence of
jurisdictional language in 28 U.S.C. § 2253(c)(1), which reads “Unless a circuit justice or judge
issues a certificate of appealability, an appeal may not be taken to the court of appeals.” Id.(quoting 28 U.S.C. § 2253(c)(1)). The absence of such jurisdictional language in surrounding
provisions of a statute leads to a presumption that Congress intended those provisions to be
nonjurisdictional. Id. at 143. Gonzalez thus supports the conclusion that the requirements in
§§ 2254(a) and 2255(a) are not jurisdictional.
We recognize that the Second, Fifth, and Ninth Circuits have used language suggesting
that a court lacks subject-matter jurisdiction over a prisoner’s challenge to his non-custodial
sentence under § 2254 or § 2255. See Bailey v. Hill, 599 F.3d 976, 984 (9th Cir. 2010) (Section
2254); Kaminski v. United States, 339 F.3d 84, 91 (2d Cir. 2003) (Section 2255); United States v.
Hatten, 167 F.3d 884, 887 (5th Cir. 1999) (same). These cases, however, are not persuasive. First,
they came down before the Supreme Court’s decision in Gonzalez, which was the culmination of
a successful effort by the Court to “‘bring some discipline’ to the use of the term ‘jurisdictional.’”
Gonzalez, 565 U.S. at 141 (quoting Henderson v. Shinseki, 562 U.S. 428, 435 (2011)). Tellingly,
the courts in Kaminski and Bailey do not employ a jurisdictional analysis along the lines suggested
by Gonzalez and its precursor cases Henderson and Arbaugh, and the Hatten court provides no
supporting discussion at all as it relates to jurisdiction.
Further, the absence of a jurisdictional analysis in these cases casts doubt on whether the
issue of jurisdiction was ever raised or considered. Accordingly, the Kaminski, Hatten, and Bailey
decisions appear implicitly to tether their jurisdictional holdings to the mandatory nature of the
claiming release requirement. But “there is a distinction between a ‘mandatory’ provision and a
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‘jurisdictional’ provision.” Allen v. Parker, 542 F. App’x 435, 440 (6th Cir. 2013). The Supreme
Court has “long ‘rejected the notion that all mandatory prescriptions, however emphatic, are . . .
properly typed jurisdictional.’” Gonzalez, 565 U.S. at 146 (quoting Henderson, 562 U.S. at 439).
Consistent with this view, the Eleventh Circuit has observed that most courts denying challenges
by prisoners to non-custodial sentences under § 2255 “have not couched their opinions in
jurisdictional language.” Blaik v. United States, 161 F.3d 1341, 1343 (11th Cir. 1998) (collecting
cases). We therefore respectfully decline to follow the Second, Fifth, and Ninth Circuits on this
issue.
It does not follow from the jurisdictional nature of the “in custody” requirement, see
Maleng v. Cook, 490 U.S. 488, 494 (1989); United States v. Osser, 864 F.2d 1056, 1060 (3d Cir.
1988), that the “claiming the right to be released” requirement is jurisdictional. The requirement
that a habeas petitioner be “in custody” originates from § 2241, which, in contrast to §§ 2254 and
2255, contains clear jurisdictional language.3 Noticeably, however, there is no similar requirement
in § 2241 that a petitioner claim release from custody. Section 2241(c)(1), for example, grants
habeas jurisdiction over a petitioner “in custody under or by color of the authority of the United
States.” Consistent with this reading of § 2241’s text, courts have allowed remedies under § 2241
that do not affect the validity or duration of a prisoner’s sentence. A prisoner can, for instance,
3
Title 28 U.S.C. § 2241 provides the general grant of habeas jurisdiction to federal courts and states in relevant part
that “[t]he writ of habeas corpus shall not extend to a prisoner unless—
(1) He is in custody under or by color of the authority of the United States or is committed for trial
before some court thereof; or
(2) He is in custody for an act done or omitted in pursuance of an Act of Congress, or an order,
process, judgment or decree of a court or judge of the United States; or
(3) He is in custody in violation of the Constitution or laws or treaties of the United States; or
(4) He, being a citizen of a foreign state and domiciled therein is in custody for an act done or
omitted under any alleged right, title, authority, privilege, protection, or exemption claimed under
the commission, order or sanction of any foreign state, or under color thereof, the validity and effect
of which depend upon the law of nations; or
(5) It is necessary to bring him into court to testify or for trial.
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No. 19-3085, Wagner v. United States
use § 2241 to challenge the “execution or manner in which the sentence is served.” Edwards v.
Dewalt, 681 F.3d 780, 784 (6th Cir. 2012) (quoting United States v. Peterman, 249 F.3d 458, 461
(6th Cir. 2001)). This includes challenges to the location where a sentence is being served, United
States v. Jalili, 925 F.2d 889, 893 (6th Cir. 1991) (dictum), prison transfers, Montez v. McKinna,
208 F.3d 862, 865 (10th Cir. 2000), or a prison’s requirement that a prisoner make restitution
payments while confined, Fontanez v. O’Brien, 807 F.3d 84, 87 (4th Cir. 2015). Section 2241
thus provides the requisite clear statement from Congress that being in custody is a jurisdictional
limitation on habeas courts. There is no equivalent clear statement in § 2241 that courts lack
jurisdiction over habeas petitions where the petitioner does not claim the right to be released.
The origin of § 2255 can be traced back to § 2241 and thus § 2241’s language informs the
meaning of § 2255. Section 2255, which was passed into law in 1948, requires a prisoner to file
suit in the district in which he was sentenced and was enacted solely to alleviate the “‘serious
administrative problems’ caused by the [previous] requirement that habeas petitions be brought in
the district of incarceration, often far from where relevant records and witnesses were located.”
McCarthan v. Dir. of Goodwill Indus. Suncoast, 851 F.3d 1076, 1082 (11th Cir. 2017) (en banc)
(quoting United States v. Hayman, 342 U.S. 205, 212 (1952)). As a result, the § 2255 remedy was
not intended to be different in scope from the § 2241 remedy previously available. See Sustache-
Rivera v. United States, 221 F.3d 8, 17 (1st Cir. 2000); Kinder v. Purdy, 222 F.3d 209, 214 (5th
Cir. 2000). Thus, even assuming that the jurisdictional nature of the “in custody” requirement of
§ 2241 carried over to § 2255, the same cannot be said of the “claiming the right to be released”
language appearing only in § 2255. It follows that the Government could waive the restrictive
nature of this language in the present case.
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B.
Wagner’s forfeiture-based ineffective assistance claim fails, however, as Wagner is unable
to show either deficient performance or prejudice as required by Strickland v. Washington, 466
U.S. 668, 688, 692 (1984). Wagner first argues that Kerger was ineffective by neglecting to tell
Wagner that he had the right to contest the Government’s forfeiture claims. In support of this
argument, Wagner points to an affidavit from his son, Jordan Wagner, who attended a meeting in
October 2017 with his father and Kerger where the three discussed options regarding forfeiture.
Jordan Wagner avers that “Kerger did not advise [Wagner] of the option to contest the forfeiture
and make the Government prove that the forfeited property was paid from proceeds traceable to
criminal activity.”
As the Government correctly points out, however, there is contrary evidence showing that
Kerger did inform Wagner of the possibility of contesting forfeiture. Elsewhere in his affidavit,
Jordan Wagner states that “[d]uring the meeting, Mr. Kerger proposed the option of fighting the
forfeiture of the equipment on the basis that it was owned by Construction Equipment and Supply,
Ltd., (‘CES’), not by Scott Wagner, and CES was not convicted of a crime.” Thus, by October
2017—before the Government had filed a motion for preliminary order of forfeiture—Wagner was
aware of the possibility of contesting certain aspects of the forfeiture proceeding. Accordingly, it
was not clearly erroneous for the district court to conclude that Wagner knew of his ability to
challenge the Government’s forfeiture allegations.
Wagner secondly criticizes Kerger for failing to respond to either of the Government’s
forfeiture motions. But there is evidence that Kerger’s failure to respond to the preliminary
forfeiture motion was the result of Wagner’s informed choice not to contest the motion. According
to Jordan Wagner’s affidavit, Scott Wagner discussed with Kerger the possibility of fighting the
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forfeiture allegations but also told Kerger that he would “rather pay cash than allow the
government to take the family residence.” Accordingly, the record supports the reasonable
inference that Wagner settled the forfeiture allegations in order to keep his family home and not
because of Kerger’s deficient legal representation. Kerger likewise cannot be faulted for not
responding to the Government’s motion for final order of forfeiture. By the time the Government
filed that motion on February 21, 2018, Wagner had already signed a settlement agreement with
terms identical to those in the Government’s motion, thereby eliminating the need to contest it.
Accordingly, Wagner has failed to prove that his attorney performed deficiently by not contesting
the Government’s forfeiture allegations.
Wagner also cannot demonstrate that he was prejudiced by not challenging the forfeiture
allegations. Wagner first contends that he would have been better off challenging the forfeiture
allegations because “there is a colorable argument that no nexus can be drawn between the
defendant’s criminal conduct and much of Wagner’s forfeited property.” According to Wagner,
his legitimate earnings far outstrip the $1,937,500 he received through his fraudulent schemes and,
as a consequence, “the Government could not prove that the forfeited property was derived from
the fraud, and not from the millions of dollars Wagner made in legitimate business dealings.”
This argument addresses why Wagner’s property is not forfeitable under the civil forfeiture
statute. That statute permits forfeiture of property “which constitutes or is derived from” illegal
proceeds. See 18 U.S.C. § 981(a)(1)(C). But the Government sought forfeiture of Wagner’s
property under the civil and criminal forfeiture statutes. Property is subject to criminal forfeiture
if it is “involved in” or “traceable to” certain illegal activity, including mail fraud, wire fraud, and
money laundering. See 18 U.S.C. § 982(a)(1). Wagner does not even attempt to show that his
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assets were not involved in or traceable to his illegal schemes. He thus has not demonstrated that
he was prejudiced by his counsel’s asserted failure to contest the forfeiture allegations against him.
Wagner makes an additional prejudice argument: that but for his attorney’s asserted failure
to contest the forfeiture allegations, Wagner would have paid a lower settlement for the forfeited
property. Wagner asserts that had Kerger contested forfeiture, he “might have worked out a deal
for Wagner to pay the $1 Million in restitution directly, without forfeiture of the family home, thus
saving Wagner $247,500.” But restitution and forfeiture are distinct remedies, and a district court
may order both when appropriate. United States v. Schwartz, 503 F. App’x 443, 449 (6th Cir.
2012) (collecting cases). Thus, Wagner’s payment of restitution did not prohibit the Government
from also seeking forfeiture of assets involved in or derived from his illegal scheme. Moreover,
the record does not reflect any attempt by the Government to negotiate restitution and forfeiture
together. There were separate settlement agreements for restitution and forfeiture, and each was
signed at different times. Accordingly, any payment in lieu of forfeiture would have been on top
of Wagner’s $1 million restitution obligation.
Wagner’s final argument is that Kerger’s unauthorized settlement offer to the Government
“severely prejudiced Wagner in negotiations from that point on.” Wagner’s only evidence for this
claim is his son’s affidavit, which states that “Kerger then told us that the Government was going
to take our family home because they were upset that we retracted on the settlement.” Put simply,
the record is devoid of any evidence that the Government punished Wagner for Kerger’s misstep.
Jordan Wagner’s fear that the Government would, out of retaliation for the retracted settlement
offer, “take the family home,” turned out to be unfounded. Furthermore, Wagner eventually settled
the forfeiture allegations for $1,247,500, over $175,000 less than the amount Kerger originally
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No. 19-3085, Wagner v. United States
offered. Thus, even assuming Kerger performed deficiently by tendering an unauthorized
settlement offer, Wagner has not met his burden of showing that he was prejudiced.
IV.
The judgment of the district court is affirmed.
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