Fujinaga v. United States ( 2023 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 UNITED STATES OF AMERICA, ) 4 ) Plaintiff, ) Case No.: 2:15-cr-00198-GMN-NJK 5 vs. ) ) ORDER DENYING § 2255 MOTION 6 EDWIN FUJINAGA, ) 7 ) Defendant. ) 8 ) 9 Pending before the Court is Petitioner Edwin Fujinaga’s Motion to Vacate, Set Aside, or 10 Correct Sentence under § 2255 (“§ 2255 Mot.”), (ECF No. 550). The Court appointed 11 Petitioner counsel, (Order Appointing Counsel, ECF No. 552), who filed a Supplement to 12 Petitioner Motion, (ECF No. 558). The Government filed a Response to Petitioner’s Motion 13 and Supplement, (ECF No. 560), to which Petitioner filed a Reply, (ECF No. 561). 14 The Court DENIES Petitioner’s § 2255 Motion because he fails to show vacatur or 15 correction of his conviction and sentence is warranted. 16 I. BACKGROUND 17 In 2015, a grand jury returned an Indictment for Petitioner, Junzo Suzuko (“J. Suzuki”), 18 and Paul Suzuki (“P. Suzuki”) for owning and operating MRI International Inc. (“MRI”), a 19 Nevada Limited Liability Corporation in Las Vegas, Nevada. (See generally Indictment, ECF 20 No. 1). 21 Petitioner was the president, chief executive officer, and sole owner of MRI. (Id.). 22 “MRI functioned almost entirely as a Ponzi scheme, that is, money solicited from new investors 23 was used to pay prior investors’ maturing investments.” (Presentence Report (“PSR”) ¶ 12). 24 Petitioner was charged in the Indictment with twenty counts: Counts One through Eight in 25 violation of 18 U.S.C. § 1341 Mail Fraud; Counts Nine through Seventeen in violation of 18 1 U.S.C. § 1343 Wire Fraud; and Counts Eighteen through Twenty in violation of 18 U.S.C. 2 § 1957 Monetary Transactions in property derived from specified unlawful activity. (See 3 generally Indictment). A jury found Petitioner guilty on all charges. (See Mins. Proceeding 4 Jury Trial (Day 17), ECF No. 262); (see also Partial Tr. of Proceedings 6:25–9:12, ECF No. 5 273). 6 A. Petitioner’s Sentencing 7 Before sentencing, the United States Probation Office (“PO”) submitted a PSR, 8 recommending the Court sentence Petitioner to a total of 40 years custody. (PSR ¶ 76). In 9 reaching this sentence, the PO applied, among other things, a 30-level enhancement pursuant to 10 United States Sentencing Guideline (“U.S.S.G”) § 2B1.1(b)(1)(P) because Petitioner caused a 11 loss greater than $550 million, and a two-level enhancement pursuant to U.S.S.G. 12 § 3A1.1(b)(1) because Petitioner knew or should have known the victims of his offense were 13 vulnerable victims. (Id. ¶¶ 23, 26). The PO’s recommendation considered Petitioner’s age, who 14 was then 72 years old, and lack of criminal history. (Id. ¶¶ 74–76). Additionally, the PO 15 recommended ordering Petitioner pay $1.5 billion in restitution. (Id. ¶ 73). 16 Petitioner filed an Objection, contesting the PO’s application of the 30-level 17 enhancement pursuant to § 2B1.1(b)(1)(P) because the record in this case only supported a loss 18 amount of $518 million. Petitioner further argued that the Court should offset and arguing that 19 the Court should further offset the $518 million loss amount by any principal and interest that 20 was paid back to investors pursuant to United States v. Van Alstyne, 584 F.3d 803 (9th Cir. 21 2009). (Pet. Obj. PSR 4:6–14, ECF No. 280). Petitioner also objected to the PO’s application 22 of the two-level vulnerable victim enhancement pursuant to U.S.S.G. § 3A1.1(b)(1) because 23 there was no evidence that individuals who were impaired physically or mentally were targeted, 24 and that Petitioner did not seek elderly investors to invest with MRI. (Id. 6:7–12). Finally, 25 /// 1 Petitioner objected to PO’s restitution calculation because there was “insufficient evidence to 2 find restitution in excess of $1.5 billion[.]” (Id. 6:19–21). 3 At sentencing, Petitioner argued that the 30-level enhancement was inapplicable because 4 the loss amount was below $550 million, especially when considering the “cases where the 5 Ninth Circuit” found the district courts erred in not “deduct[ing] an offset of funds that were 6 paid back to the victims.”1 (Sentencing Tr. 12:20–13:9, ECF No. 346); (Pet. Obj. PSR 4:6–14). 7 Petitioner maintained that the Court should deduct the principal and interest Petitioner paid 8 back, up to the amount victims originally invested, from the loss amount. (Sentencing Tr. 21:2– 9 15, 28:1–3). In response, the Government averred that the PO properly applied the 30-level 10 enhancement because the loss caused by Petitioner amounted to $813 million. (Id. 21:17– 11 27:11). This total, which the PO concurred with, accounted for funds returned to the investors 12 up to the amount invested but did not deduct for interest payments made to investors. (Id. 13 30:10–33:2). The Court agreed with the Government and found the loss caused by Petitioner 14 amounted to $813 million and applied the 30-level enhancement pursuant to § 2B1.1(b)(1)(P). 15 (Id.). 16 Next, the Court disagreed with Petitioner’s contention that the vulnerable victim 17 enhancement was inapplicable because there was no proof that he specifically targeted elderly 18 investors. (Id. 40:1–41:2). The Court found the enhancement was applicable because, for the 19 enhancement to apply, the defendant need not specifically target a certain group so long as the 20 defendant knows or should have known of the victim’s unusual vulnerability. (Id. 41:3–45:20). 21 And the Court determined that Petitioner knew or should have known of his victims’ unusual 22 23 1 Petitioner did not specifically cite Van Alstyne at sentencing. But he argued that the loss amount calculation should be reduced based on principal and interest paid back to investors up to their initial investment, and he 24 cited Van Alstyne in his Objection to the PSR. From these facts, the Court deduces that his reference to Ninth Circuit cases referred to Van Alstyne. (Id. 21:2–15); see Van Alstyne, 584 F.3d at 819 (instructing the district 25 court in recalculating the loss amount to “reduce the amount of loss by the amount of funds returned by the amount of funds returned to investors up to the amount invested, but not by the amount, if any, of any profit made by any investors”). 1 vulnerability because he marketed the investment product as a low-risk investment appropriate 2 for retirement savings, specifically rejected a suggestion to exclude investors over the age of 3 80, and included a clause making the investment certificates easily transferrable in an 4 inheritance. (Id.). Moreover, many investors were of advanced age. (Id.). 5 Finally, the Court addressed Petitioner’s argument that there was insufficient evidence to 6 impose a restitution order exceeding $1 billion as stated in the PSR. (Id. 46:13–48:2). The 7 Government averred, and the Court agreed, that the record supported a restitution order 8 amounting to $1.12 billion. (Id. 51:10–52:5). The Court disagreed with the PO’s 9 recommendation that a downward departure to 40 years was warranted considering the 18 10 U.S.C. § 3553(a) factors and sentenced Petitioner to a total of 50 years in custody: 20 years as 11 to Counts 1–8, concurrent to one another and consecutive as to Counts 9–20; 20 years as to 12 Counts 9–17, concurrent to one another and consecutive as to Counts 1–8 and 18–20; and 10 13 years as to Counts 18–20, concurrent to one another and consecutive to Counts 1–17. (Mins. 14 Proceeding, ECF No. 330); (J. at 3, ECF No. 338). 15 B. Petitioner’s Appeal to the Ninth Circuit 16 Petitioner appealed his conviction and sentence to the Ninth Circuit. (Not. Appeal, ECF 17 No. 433). Petitioner argued that the Court (1) erred in its loss calculation by ignoring Van 18 Alstyne and failing to offset principal and interest paid back to investors up to the amount they 19 initially invested and by applying the two-level vulnerable victim enhancement; (2) erroneously 20 found the Government had shown by a preponderance of the evidence that a restitution order of 21 $1.12 billion was warranted; and (3) unreasonably imposed a sentence greater than necessary 22 considering Petitioner’s advanced age and lack of criminal history. (Def. Opening Br. at 65–70, 23 74–75, Ex. 1 to Reply, ECF No. 561-1). The Ninth Circuit rejected Petitioner’s claims and 24 affirmed his conviction and sentence. United States v. Fujinaga, No. 19-10222, 2022 WL 25 671018 (9th Cir. Mar. 7, 2022). Petitioner then filed the instant § 2255 Motion, (ECF No. 550). 1 II. LEGAL STANDARD 2 Section 2255 provides, in pertinent part: “A prisoner in custody under sentence of a 3 court established by Act of Congress claiming the right to be released upon the ground that the 4 sentence was imposed in violation of the Constitution or laws of the United States . . . may 5 move the court which imposed the sentence to vacate, set aside or correct the sentence.” See 6 also Davis v. United States, 417 U.S. 333, 344–45 (1974). To warrant relief, the prisoner must 7 demonstrate the existence of an error of constitutional magnitude which had a substantial and 8 injurious effect or influence on the guilty plea or the jury’s verdict. See Brecht v. Abrahamson, 9 507 U.S. 619, 637 (1993); see also United States v. Montalvo, 331 F.3d 1052, 1058 (9th Cir. 10 2003) (“Brecht’s harmless error standard applies to habeas cases under section 2255[.]”). 11 Relief is warranted only upon the showing of “a fundamental defect which inherently results in 12 a complete miscarriage of justice.” Davis, 417 U.S. at 346. 13 Under § 2255, “a district court must grant a hearing to determine the validity of a 14 petition brought under that section, ‘[u]nless the motions and the files and records of the case 15 conclusively show that the prisoner is entitled to no relief.’” United States v. Blaylock, 20 F.3d 16 1458, 1465 (9th Cir. 1994) (quoting 28 U.S.C. § 2255). The court may deny a hearing if the 17 movant’s allegations, viewed against the record, fail to state a claim for relief or “are so 18 palpably incredible or patently frivolous as to warrant summary dismissal.” United States v. 19 McMullen, 98 F.3d 1155, 1159 (9th Cir. 1996). To earn the right to a hearing, therefore, the 20 movant must make specific factual allegations which, if true, would entitle him to relief. Id. 21 Mere conclusory statements in a § 2255 motion do not warrant a hearing. United States v. 22 Hearst, 638 F.2d 1190, 1194 (9th Cir. 1980). 23 /// 24 /// 25 /// 1 III. DISCUSSION 2 Petitioner again contends that the Court erred in its loss calculation, restitution 3 calculation, application of the vulnerable victim exception, and in imposing an unreasonably 4 long sentence, but now presents these arguments as ineffective assistance of counsel claims. 5 (See § 2255 Mot. at 11–13); (Reply 8:23–24, ECF No. 561) (explaining that Petitioner “did 6 challenge the loss calculation [on appeal], but not based on ineffective assistance of counsel”) 7 (emphasis in original). Petitioner also argues for the first time that his trial and appellate 8 counsel were ineffective for failing to argue his Indictment was constructively amended 9 because the Court’s loss calculation considered conduct predating the period charged in the 10 Indictment. (Supp. 30:7–36:2). The Court begins by examining Petitioner’s arguments 11 regarding his trial and appellate counsel’s alleged ineffectiveness in arguing loss calculation, 12 restitution calculation, application of the vulnerable victim exception, and length of Petitioner’s 13 sentence. 14 A. Relitigating Claims Decided on Direct Appeal 15 Broadly speaking, Petitioner contends his trial and appellate counsel ineffectively argued 16 four claims that were adversely decided against him by this Court and affirmed by the Ninth 17 Circuit. The Government contends that despite being reframed as ineffective assistance of 18 counsel claims, Petitioner’s claims are barred from reconsideration in a § 2255 motion because 19 the underlying arguments were already rejected by the Ninth Circuit on direct appeal. (Resp. 20 8:1–10, ECF No. 560). 21 Relief under § 2255 is limited because the movant “already has had a fair opportunity to 22 present his federal claims to a federal forum,” whether or not he took advantage of the 23 opportunity. United States v. Frady, 456 U.S. 152, 164 (1982). “The law in this circuit is clear 24 that when a matter has been decided adversely on appeal from a conviction, it cannot be 25 litigated again on a 2255 motion.” Odom v. United States, 455 F.2d 159, 160 (9th Cir. 1972). 1 And “[g]rounds which were apparent on original appeal cannot be made the basis for a second 2 attack under § 2255.” See United States v. Egger, 509 F.2d 745, 748 (9th Cir. 1975). 3 The Court agrees with the Government that although Petitioner has reframed his 4 challenges as ineffective of assistance of counsel claims, he seeks to relitigate issues already 5 decided by the Ninth Circuit on direct appeal.2 See United States v. Thompson, No. 2:16-cr- 6 00230, 2023 WL 4262534, at *3 (D. Nev. June 28, 2023) (“To the extent these claims are 7 merely a re-presentation of claims and substantive arguments rejected by the Ninth Circuit on 8 appeal now couched as ineffective assistance of counsel claims, they are barred from 9 reconsideration by way of a § 2255 motion such as this one.”) (cleaned up); Rivera-Alvarado v. 10 United States, No. 13-cv-00509, 2014 WL 5385501, at *9 (D. Ariz. Oct. 21, 2014) (same). 11 Accordingly, these claims may not be used as a basis for relief in a § 2255 petition. 12 B. Constructive Amendment 13 Petitioner raises one claim that was not litigated on appeal: That his trial and appellate 14 counsel were ineffective for failing to argue his Indictment was constructively amended 15 because the Court’s loss calculation considered conduct predating the period charged in the 16 Indictment. (Supp. 30:7–36:2). In response, the Government contends Petitioner’s argument is 17 misplaced because at sentencing, a court is allowed to consider conduct that is “not necessarily 18 19 20 2 Petitioner’s Reply attempts to explain why his arguments surrounding the Court’s loss calculation are different 21 from those previously raised on appeal. Petitioner’s purported distinctions, however, all involve his trial and appellate counsel’s ineffectiveness in arguing the Ninth Circuit’s decision in Van Alstyne. (Reply 8:16–13:5, 22 17:19–21:23). In other words, Petitioner does not dispute that his trial and appellate counsel raised Van Alstyne, nor that their arguments applying Van Alystne were “wrong;” instead, he argues “they . . . did not go far enough 23 in demonstrating the egregious error in the loss calculation urged by the Government at sentencing.” (Supp. 48:12–14). The Court is not persuaded that trial and appellate counsel’s alleged failure to robustly argue Van 24 Alstyne constitutes a new issue for purposes of Petitioner’s § 2255 Motion. In affirming Petitioner’s sentence, the Ninth Circuit determined the Court properly applied Ninth Circuit precedent, including Van Alstyne. Even if 25 the Court found Petitioner raised a cognizable distinction, his trial and appellate counsel were not ineffective in how they argued Van Alstyne because the Court did not err in its loss calculation for the reasons set forth by the Government. (Resp. 8:21–24, 11:3–7). 1 connected to what was charged in the indictment.” (Resp. 9:3–5). The Court agrees with the 2 Government that Petitioner’s argument improperly conflates two distinct concepts. 3 “A constructive amendment occurs when the defendant is charged with one crime but, in 4 effect, is tried for another crime.” United States v. Pang, 362 F.3d 1187, 1194 (9th Cir. 2004). 5 In essence, during trial, the parties and the court are tethered to the language charged in the 6 indictment, and a constructive amendment claim evaluates whether evidence at trial or the 7 court’s jury charge expands the scope of the indictment to crimes that have not been charged. 8 See United States v. Ward, 747 F.3d 1184, 1189 (9th Cir. 2014) (“An amendment of the 9 indictment occurs when the charging terms of the indictment are altered, either literally or in 10 effect, by the prosecutor or a court after the grand jury has last passed upon them.”) (quoting 11 United States v. Von Stoll, 726 F.2d 584, 586 (9th Cir. 1984)). Conversely, at sentencing, a 12 court may consider “all relevant conduct in calculating the amount of loss under the sentencing 13 guidelines.” United States v. Kirk, 849, Fed. App’x 224, 225 (9th Cir. 2021). This includes 14 “charged, uncharged, and even acquitted conduct in the determination of loss.” United States v. 15 Thomsen, 830 F.3d 1049, 1071 (9th Cir. 2016) (citation omitted) (emphasis added). 16 Here, Petitioner argues that his counsel was ineffective at sentencing. Because the 17 Court was not constrained by the charges within the four corners of the Indictment in 18 calculating loss at sentencing, his Indictment was not constructively amended by virtue of the 19 Court considering relevant uncharged conduct. It is well-established that counsel is not 20 ineffective for failing to raise a meritless argument. See Boag v. Raines, 769 F.2d 1341, 1344 21 (9th Cir. 1985) (“Failure to raise a meritless argument does not constitute ineffective assistance 22 [of counsel].”). Pursuant to this principle, Petitioner’s counsel was not ineffective for failing to 23 raise this meritless argument. 24 To the extent Petitioner contends that his Indictment was constructively amended 25 because evidence of conduct predating the period charged in the Indictment was introduced at 1 trial, the Court disagrees. The contested evidence fell within the specified acts alleged in the 2 Indictment because it involved the same misrepresentations made to investors and was 3 inextricably intertwined with the charged conduct. (Tr. Proceedings 12:4–14:14, ECF No. 195); 4 see United States v. Baghat, 436 F. 3d 1140, 1146 (9th Cir. 2006) (explaining that “evidence 5 not referenced in the indictment may be admitted for impeachment or other legitimate 6 purposes, without effecting any changes to the indictment”). And the Court instructed the jury 7 that they “are here only to determine whether the [D]efendant is guilty or not guilty of the 8 charges in the [I]ndictment” and that the Defendant “is not on trial for conduct or offense not 9 charged in the [I]ndictment.” (Jury Instructions 33:1–36, ECF No. 266). This instruction 10 clarified the proper and improper scope of evidence predating the charges in the Indictment in 11 determining Petitioner’s guilt. See Ward, 747 F.3d at 1191 (holding instructions requiring the 12 jury to find the conduct charged in the indictment before it may convict provides sufficient 13 assurance that the jury convicted the defendant based solely on the conduct actually charged in 14 the indictment); see also United States v. Daraio, 445 F.3d 253, 260 (3d Cir. 2017) (“Although 15 we agree with Daraio that the government presented a significant amount of evidence 16 concerning her prior tax non-compliance beyond that charged in the indictment, the district 17 court’s instructions ensured that the jury would convict her, if at all, for a crime based on 18 conduct charged in the indictment.”). In short, the evidence introduced at trial did not embody 19 a set of facts distinctly different from those provided in the Indictment, nor did the jury 20 instructions substantially alter the crime charged. As Petitioner’s claim is without merit, his 21 counsel could not have been ineffective by failing to raise a meritless issue. Boag, 769 F.2d at 22 1344. 23 In sum, the Court finds Petitioner’s § 2255 Motion fails to show that vacatur of his 24 conviction or sentence is warranted. Petitioner’s claims either impermissibly seek to relitigate 25 /// 1 issues already decided by the Ninth Circuit on direct appeal or are without merit. Accordingly, 2 Petitioner’s § 2255 Motion is DENIED. 3 C. Evidentiary Hearing 4 Under § 2255, the Court must hold an evidentiary hearing unless “the motion and the 5 files and records of the case conclusively show that the prisoner is entitled to no relief.” 28 6 U.S.C. § 2255; see Frazer v. United States, 18 F.3d 778, 781 (9th Cir. 1994). “No hearing is 7 required if the allegations, viewed against the record, either fail to state a claim for relief or are 8 so palpably incredible or patently frivolous as to warrant summary dismissal.” Shah v. United 9 States, 878 F.2d 1156, 1158 (9th Cir. 1989); see United States v. Howard, 381 F.3d 873, 879 10 (9th Cir. 2004) (holding that no evidentiary hearing is required unless the petitioner raises 11 “detailed and controverted issues of fact”). 12 The detailed record in this matter is a sufficient basis on which to decide Petitioner’s 13 claims and determine that he is entitled to no relief. Accordingly, the Court exercises its 14 discretion not to hold an evidentiary hearing. Shah, 878 F.2d at 1158. 15 B. Certificate of Appealability 16 A habeas petitioner may not appeal the denial of a § 2255 habeas petition unless he 17 obtains a certificate of appealability from a district or circuit judge. 28 U.S.C. § 2253(c)(1)(B); 18 see also United States v. Asrar, 116 F.3d 1268, 1269-70 (9th Cir. 1997) (holding that district 19 courts retain authority to issue certificates of appealability). A certificate of appealability is 20 authorized “if the applicant has made a substantial showing of the denial of a constitutional 21 right.” 28 U.S.C. § 2253(c)(2). To meet this threshold showing, a petitioner must show that (1) 22 the issues are debatable among jurists of reason, (2) a court could resolve the issues in a 23 different manner, or (3) the questions are adequate to deserve encouragement to proceed 24 further. Lambright v. Stewart, 220 F.3d 1022, 1025–26 (9th Cir. 2000) (citing Slack v. 25 McDaniel, 529 U.S. 473 (2000); Barefoot v. Estelle, 463 U.S. 880 (1983)). 1 Based on this Court’s review of the record, the issues presented are not debatable among jurists 2 of reason and no issues could be resolved in a different manner. This Court further finds that 3 no questions are adequate for further proceedings. Therefore, Petitioner is not entitled to a 4 certificate of appealability. 5 IV. CONCLUSION 6 IT IS HEREBY ORDERED that Petitioner’s Motion to Vacate, Set Aside, or 7 Correction Sentence under § 2255, (ECF No. 550), is DENIED. 8 Dated this _1_3_ day of December, 2023. 9 10 ___________________________________ Gloria M. Navarro, District Judge 11 UNITED STATES DISTRICT COURT 12 13 14 15 16 17 18 19 20 21 22 23 24 25