Abrar Haque v. Warden, FCI Elkton

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0597n.06
No. 15-4219
FILED
UNITED STATES COURT OF APPEALS Nov 08, 2016
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
ABRAR U. HAQUE, )
)
Petitioner-Appellant, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE
WARDEN, FEDERAL CORRECTIONAL ) NORTHERN DISTRICT OF
INSTITUTE ELKTON, ) OHIO
)
Respondent-Appellee. )
)
BEFORE: GILMAN, GIBBONS, and STRANCH, Circuit Judges.
JULIA SMITH GIBBONS, Circuit Judge. Abrar Haque appeals the denial of his
petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2241. Following a jury trial, Haque
was convicted of sixty-one charges including RICO conspiracy, conspiracy to launder money,
money laundering, wire fraud, bank fraud, healthcare fraud, interstate transportation of property
taken by fraud, and making false statements to federal officers. Haque argues that he is entitled
to § 2241 habeas relief because he is actually innocent of his money-laundering convictions
under United States v. Crosgrove, 637 F.3d 646 (6th Cir. 2011), which in turn relied on United
States v. Santos, 553 U.S. 507 (2008), and United States v. Kratt, 579 F.3d 558 (6th Cir. 2009).
For the reasons that follow, we affirm the district court’s denial of habeas relief.
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I.
A.
Abrar Haque owned and operated Abrar CPA, Inc., an accounting firm where Haque and
others worked as certified public accountants. In 2003, the FBI began investigating Haque after
an informant reported that the firm was producing false tax documents. After the FBI
substantiated the claims, it had Mohammed Abdelqader, a cooperating witness, approach Haque
for help laundering allegedly off-the-books cash. Between December 2003 and August 2004,
Abdelqader and Haque engaged in four cash-for-check transactions. Abdelqader gave Haque
$330,000 in cash in exchange for $300,000 in checks. Haque kept $30,000 as a commission for
the transactions. Although the cash was provided by the FBI, Abdelqader told Haque it came
from the sale of contraband cigarettes in North Carolina.
B.
Haque and fourteen co-conspirators were indicted by a federal grand jury on February 1,
2006, in a seventy-nine-count superseding indictment. Haque was charged with RICO
conspiracy, conspiracy to defraud the United States, making and subscribing false income tax
returns for individuals, schools, and his firm, conspiracy to launder money, money laundering,
fraudulent misuse of visas, wire fraud, mail fraud, bank fraud, healthcare fraud, interstate
transportation of property taken by fraud, and making false statements to a federal officer. Only
Counts 4, 5, and 6 of the Superseding Indictment are at issue in this appeal. Each is a substantive
charge of money laundering, in violation of 18 U.S.C. § 1956(a)(3)(B), for Haque’s check-for-
cash exchanges with Abdelqader. The predicate activity for these money-laundering counts was
Abdelqader’s representation (as an FBI cooperating witness) that he had engaged in the interstate
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transportation of stolen property (cash from the alleged sale of contraband cigarettes), in
violation of 18 U.S.C. § 2314.1
Haque was convicted on sixty-one of the seventy-nine counts, including the substantive
money-laundering charges in Counts 4, 5, and 6. He was sentenced to a term of 144-months’
imprisonment. We affirmed Haque’s conviction on direct appeal, United States v. Haque, 315 F.
App’x 510, 516 (6th Cir. 2009), and the Supreme Court denied a petition for a writ of certiorari.
Haque v. United States, 558 U.S. 831 (2009). In 2010, Haque filed his first motion under
28 U.S.C. § 2255. There, Haque argued that he was innocent of the money-laundering
convictions because of intervening decisions in United States v. Santos, 553 U.S. 507 (2008),
and United States v. Kratt, 579 F.3d 558 (6th Cir. 2009). The district court denied his § 2255
motion, finding no basis under Santos and Kratt to overturn Haque’s money-laundering
convictions. Haque v. United States, No. 05-cr-182, 2011 WL 737319 (N.D. Ohio Feb. 24,
2011). We denied a certificate of appealability, finding that “reasonable jurists could not debate”
the correctness of the ruling that Kratt and Santos did not apply to Haque’s convictions. Haque
v. United States, No. 11-3617 (6th Cir. Nov. 3, 2011) (unpublished order). In 2013, Haque
petitioned to file a second § 2255 motion, arguing ineffective assistance of trial counsel under the
then-recent decisions in Lafler v. Cooper, 132 S. Ct. 1376 (2012), and Missouri v. Frye, 132 S.
Ct. 1399 (2012). We denied his petition because neither decision constituted a new rule of
constitutional law made retroactive on collateral review by the Supreme Court. See 28 U.S.C.
§ 2255(h).
On May 15, 2015, Haque filed a petition for a writ of habeas corpus under 28 U.S.C.
§ 2241. Haque now argues that he is actually innocent of his money-laundering conviction under
1
Haque was not indicted under 28 U.S.C. § 2314 for transporting this purportedly stolen cash. The only § 2314
charge against him—in Count 17 of the Superseding Indictment—involved a fraudulent $10,000 loan from
Citifinancial, an activity which is unrelated to the money-laundering convictions at issue in this appeal.
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United States v. Crosgrove, 637 F.3d 646 (6th Cir. 2011), a decision relying on both Santos and
Kratt. The district court denied Haque’s petition on September 9, 2015, finding that he was not
entitled to file under § 2241 because § 2255 was the proper avenue for relief. The district court
determined that the exception under § 2255(e), which would allow Haque to pursue relief under
§ 2241, did not apply because § 2255 was not “inadequate or ineffective” under Terrell v. United
States, 564 F.3d 442, 447 (6th Cir. 2009). The district court further recognized that Haque had
been able to challenge his money-laundering conviction on the basis of Santos and Kratt in a
prior § 2255 petition. Haque filed a timely notice of appeal.
II.
This Court reviews de novo a district court’s order denying habeas corpus relief under
28 U.S.C. § 2241. Christian v. Willington, 739 F.3d 294, 298 (6th Cir. 2014) (citing Fazzini v.
Ne. Ohio Corr. Ctr., 473 F.3d 229, 231 (6th Cir. 2006)); Rosales-Garcia v. Holland, 322 F.3d
386, 400–01 (6th Cir. 2003) (en banc).
“Section 2255 is the primary avenue for relief for federal prisoners protesting the legality
of their sentence, while § 2241 is appropriate for claims challenging the execution or manner in
which the sentence is served.” United States v. Peterman, 249 F.3d 458, 461 (6th Cir. 2001).
A federal prisoner can attack the legality of his conviction under § 2241 only by showing that the
§ 2255 savings clause applies. Id. The savings clause states:
An application for a writ of habeas corpus in behalf of a prisoner who is
authorized to apply for relief by motion pursuant to this section, shall not be
entertained if it appears that the applicant has failed to apply for relief, by motion,
to the court which sentenced him, or that such court has denied him relief, unless
it also appears that the remedy by motion is inadequate or ineffective to test the
legality of his detention.
28 U.S.C. § 2255(e) (emphasis added); Wooten v. Cauley, 677 F.3d 303, 307 (6th Cir. 2012);
Charles v. Chandler, 180 F.3d 753, 755–56 (6th Cir. 1999).
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“The circumstances in which § 2255 is inadequate and ineffective are narrow, for to
construe § 2241 relief much more liberally than § 2255 relief would defeat the purpose of the
restrictions Congress placed on the filing of successive petitions for collateral relief.” Peterman,
249 F.3d at 461 (citing the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA),
Pub. L. No. 104-132, 110 Stat. 1214 (amending 28 U.S.C. § 2255)). Section 2255 is not
inadequate or ineffective merely “because § 2255 relief has already been denied, . . . because the
petitioner is procedurally barred from pursuing relief under § 2255, . . . or because the petitioner
has been denied permission to file a second or successive [§ 2255 motion].” Charles, 180 F.3d
at 756 (internal citations omitted); see also Wooten, 677 F.3d at 307; Peterman, 249 F.3d at 461.
We apply the § 2255(e) savings clause only where the petitioner demonstrates a claim of
actual innocence that would be barred if brought by way of a second or successive § 2255
petition. Wooten, 677 F.3d at 307; Bannerman v. Snyder, 325 F.3d 722, 724 (6th Cir. 2003).
One way to succeed on a claim of actual innocence is to show “(1) the existence of a new
interpretation of statutory law, (2) which was issued after the petitioner had a meaningful time to
incorporate the new interpretation into his direct appeals or subsequent motions, (3) is
retroactive, and (4) applies to the merits of the petition to make it more likely than not that no
reasonable juror would have convicted him.” Wooten, 677 F.3d at 307–08.
Assuming for present purposes that Haque’s petition would not be cognizable as a second
or successive § 2255 petition, we proceed to consider whether Haque has met his burden to show
actual innocence. Haque asserts that United States v. Crosgrove, 637 F.3d 646 (6th Cir. 2011), is
sufficient to show that he is actually innocent of the money-laundering convictions and thus
eligible for § 2241 relief. His argument fails because Crosgrove does not apply to the merits of
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his petition. And even if it did apply, Haque cannot show actual innocence because Crosgrove
does not constitute a new interpretation of statutory law.
A.
To make out a claim of actual innocence, Haque must show that Crosgrove applies to the
merits of his petition such that it becomes “more likely than not that no reasonable juror would
have convicted him.” Wooten, 677 F.3d at 307–08. The Santos-Kratt framework as applied in
Crosgrove, however, does not apply to Haque.
In United States v. Santos, 553 U.S. 507 (2008), the Supreme Court reviewed convictions
for running an illegal gambling business, in violation of 18 U.S.C. § 371 and § 1955, as well as
promotional money laundering and conspiracy to commit promotional money laundering, in
violation of 18 U.S.C. § 1956(a)(1)(A)(i) and § 1956(h). Santos, 553 U.S. at 509. This
“promotional” theory of money laundering prohibits an individual from reinvesting the proceeds
of an illegal scheme back into that scheme in an attempt to promote, or sustain, the illegal
activity in which he is involved. See Crosgrove, 637 F.3d at 654.
The Santos defendants were directly involved in running an illegal lottery at bars and
restaurants in Indiana. Santos, 553 U.S. at 509. In doing so, they made payments to the lottery
winners and kept any profits to themselves. Id. Although it was a divided decision, a majority
of the Court concluded that in this context, interpreting “proceeds” in § 1956(a)(1) as “gross
receipts” would create a merger problem because the payments to lottery winners would be
sufficient to support both illegal-gambling and promotional money-laundering convictions.2 Id.
2
“Merger” has been described in the criminal-law context as “[t]he absorbtion of a lesser included offense into a
more serious offense when a person is charged with both crimes, so that the person is not subject to double
jeopardy.” Black’s Law Dictionary 1078 (9th ed. 2009). Santos was the first time that the Court applied the concept
of a “merger problem” to money-laundering convictions. The divided Court noted multiple justifications for
applying such a concept. Writing for a plurality of the Court, Justice Scalia identified the concerns that prosecutors
could use the money-laundering statute to ratchet up a defendant’s potential sentence and that the government had
provided “no explanation for why Congress would have wanted a [monetary] transaction that is a normal part of a
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at 515–16. Because every lottery involves paying winners, “nearly every violation of the illegal-
lottery statute would also be a violation of the money-laundering statute.” Id. at 515. If
“proceeds” were interpreted to mean “profits,” then § 1956(a)(1) would apply to the defendants
only if they chose to reinvest their profits back into the illegal lottery. Id. at 515–16. Such an
interpretation avoided a merger problem because reinvesting profits was activity separate and
apart from that punished by the illegal gambling statute. Id.
We first addressed the Supreme Court’s divided decision in Santos, interpreting the use
of “proceeds” in 18 U.S.C. § 1956, the federal money-laundering statute, in United States v.
Kratt, 579 F.3d 558 (6th Cir. 2009). Kratt was convicted of bank fraud and making a false
statement on a loan application for financing the purchase of an airplane by providing fraudulent
tax returns to his bank. Kratt, 579 F.3d at 559. These convictions served as predicate offenses
for three counts of engaging in monetary transactions in criminally derived property, in violation
of 18 U.S.C. § 1957.3 Id. Like the Santos defendants, Kratt was directly involved in the
predicate offense. Id. We held that Santos required us to define “proceeds” as “profits” and not
simply as “gross receipts” in limited cases where the predicate offense to the money-laundering
charge “creates a merger problem that leads to a radical increase in the statutory maximum
sentence,” and “nothing in the legislative history suggests Congress intended such an increase.”
Kratt, 579 F.3d at 562. We found a clear merger problem in Kratt’s case because the bank-fraud
and false-statement offenses necessarily required “depositing, withdrawing, transferring or
crime it had duly considered and appropriately punished elsewhere . . . to radically increase the sentence for that
crime.” Santos, 553 U.S. at 516. In a concurring opinion, Justice Stevens also expressed the concern that the
practice of charging both a predicate offense and money laundering for the same conduct was “in practical effect
tantamount to double jeopardy.” Id. at 527–28 (Stevens, J., concurring in the judgment).
3
In Kratt, we determined that “proceeds” as used in § 1957 should be interpreted under the merger framework
established in Santos for § 1956(a) because Congress enacted both statutes at the same time as part of the same Act.
Kratt, 579 F.3d at 560.
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exchanging funds derived from the offense.” Id. at 563. This was the same conduct for which
Kratt was convicted under § 1957. Id. at 563.
In Crosgrove, we applied this Santos-Kratt framework to invalidate a promotional
money-laundering conviction under § 1956(a)(1). Crosgrove, 637 F.3d at 654. Crosgrove was
convicted of conspiracy to commit mail/wire fraud and promotional money laundering for his
involvement in a fraudulent insurance scheme. Id. at 650. Underlying this fraud conviction was
the fact that Crosgrove had regularly written himself checks from accounts funded by client fees
received in the course of the fraudulent scheme. Id. at 651. Crosgrove reinvested these
payments back into the insurance scheme. Id. at 654. We first clarified that a merger problem
exists when interpreting “proceeds” as “gross receipts” under the money-laundering statute
creates a situation where a single course of conduct by a defendant triggers criminal liability for
both a predicate offense (such as wire fraud) and money laundering. Id. at 655. In such cases,
the concern is that, because the predicate offense carries a significantly lower statutory maximum
sentence, the ability to charge money laundering for the same conduct will significantly increase
a defendant’s “exposure to prison time.” Id. We found that the conspiracy to commit mail/wire
fraud and promotional money-laundering charges merged because the underlying activity—
Crosgrove mailing payments to himself—was sufficient to support both a fraud and promotional
money-laundering conviction when “proceeds” were defined as “gross receipts.” Id. at 655
(citing Kratt, 579 F.3d at 563).
Haque, by contrast, was convicted under a “sting” theory of money laundering, in
violation of § 1956(a)(3)(B). This provision punishes anyone who “conducts . . . a financial
transaction involving property represented to be the proceeds of specified unlawful activity”
while acting with intent “to conceal or disguise the nature, location, source, ownership, or control
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of property believed to be the proceeds of specified unlawful activity.” 18 U.S.C.
§ 1956(a)(3)(B). Although the defendant is led to believe that the funds to be laundered are the
proceeds of unlawful activity, the funds are not actually illegal gains. See United States v.
Monea, 376 F. App’x 531, 536–37 (6th Cir. 2010). In sting cases, in other words, the predicate
unlawful activity is only alleged. There is no requirement that it occurred. And when a
defendant is not engaged in an underlying unlawful scheme, there cannot be a merger problem
because there is no other offense that can be charged.
The availability of relief, then, turns on whether Haque was involved in and charged with
unlawful activity that merged with his money-laundering conviction. Unlike the Santos, Kratt,
and Crosgrove defendants, Haque was not engaged in, charged with, or convicted of illegal
activity constituting a predicate offense. Because the cash-for-check exchanges with Abdelqader
were organized by the FBI, there was no actual unlawful predicate activity in which Haque could
have been involved. As a result of his involvement in these exchanges, Haque was charged with
and convicted of only the substantive counts of money laundering. This distinguishes his case
from Santos, Kratt, and Crosgrove, where the defendants were convicted of money laundering in
an attempt to promote an underlying scheme in which they were directly involved. Santos,
553 U.S. at 509; Kratt, 579 F.3d at 559; Crosgrove, 637 F.3d at 650–51.
Accordingly, we conclude that there cannot be a Santos-Kratt merger problem with
respect to Haque’s sting money-laundering conviction under § 1956(a)(3) because there was no
predicate offense with which the money-laundering conviction could merge.4 This is consistent
4
The Fifth Circuit has reached a similar conclusion, finding more broadly that no merger problem exists when a
defendant is not charged with the predicate offense underlying the money-laundering conviction. See United States
v. Lineberry, 702 F.3d 210, 218 (5th Cir. 2012), cert. denied, 133 S. Ct. 2839 (2013) (finding “no ‘perverse result’ of
the merger problem as contemplated by Santos” because the defendant was not charged with the “underlying
unlawful activity”). As that court recognized, such cases avoid any problem of double jeopardy—the primary
concern associated with the merger problem—because the defendant is charged with only one crime. Id. (citing
Black’s Law Dictionary 1078 (9th ed. 2009)).
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with our prior decisions that instruct us to not overstate the merger problem described in Santos,
see Wooten, 677 F.3d at 311, and to narrowly construe the availability of § 2241 relief.
Peterman, 249 F.3d at 461. Without a merger problem in the present case, Crosgrove provides
no support for Haque’s argument that he is actually innocent. For this reason, we must affirm
the district court’s order dismissing Haque’s petition for habeas corpus under § 2241.
B.
Even if we were to assume that a sting money-laundering conviction under § 1956(a)(3)
could create a Santos-Kratt merger problem making Crosgrove applicable, Haque still cannot
show actual innocence as required to invoke the § 2255(e) savings clause because Crosgrove, by
its own language, is not a new interpretation of existing statutory law.
Crosgrove was convicted of mail fraud and conspiracy to commit promotional money
laundering under 18 U.S.C. § 1956(a)(1). Crosgrove, 637 F.3d at 650. The government alleged
that Crosgrove was engaged in insurance fraud and was reinvesting the proceeds to further
promote the fraudulent scheme. Id. at 654. The government conceded that the only basis for the
money-laundering charge were payments to Crosgrove for his participation in the underlying
scheme. Id. at 655. Crosgrove challenged his conviction, arguing that these payments were
insufficient to prove money laundering because the government was required to prove that he
received and reinvested profits. Id. at 658. We held that Crosgrove’s mail-fraud conviction
created a merger problem with the money-laundering charge that led to a radical increase in the
statutory maximum sentence. Crosgrove, 637 F.3d at 654–55 (citing Kratt, 579 F.3d at 562).
Because the government was required to prove that Crosgrove had laundered profits of the
scheme, but failed to do so, we vacated his conviction for conspiracy to commit money
laundering. Id.
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Haque reads Crosgrove to “clarify[] what a court must consider” when determining
whether the predicate offense for money laundering creates a merger problem. CA6 R. 19,
Corrected Appellant Br., at 9–10. He asserts that the Crosgrove court “made clear” that using a
categorical approach to determine whether there was a merger problem is not required and,
therefore, courts must now assess “the specific facts giving rise to the predicate offense.” Id. at
5–6. Haque believes this “materially altered [the] Kratt rule and clarified that an ‘offense-by-
offense inquiry’ was not part of the [test under Kratt.]” Id. at 9.
Haque is overstating the implications of Crosgrove. In that case, we simply recognized
and applied the test established in Santos and Kratt. Crosgrove, 637 F.3d at 654–55. After
discussing different ways to approach the problem of determining whether the predicate crimes
merged, we clarified, “[i]t is not necessary to decide in this case whether the merger analysis
requires a case-by-case or categorical approach, however, because the crimes as charged
obviously merge.” Id. at 655. Because this clearly does not establish a new test within the
Santos-Kratt framework, we concluded that Crosgrove is not a new rule of statutory
interpretation. This further supports our finding that Haque is precluded from invoking the
§ 2255(e) savings clause to seek § 2241 habeas relief.
III.
For the foregoing reasons, we affirm the district court’s denial of habeas relief.
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