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Phipps v. Warden FCI Oakdale

United States District Court, W.D. Louisiana, Lake Charles Division

September 7, 2018

JAMES RAY PHIPPS B.O.P. # 25807-001
v.
WARDEN FCI OAKDALE

         SECTION P

          REPORT AND RECOMMENDATION

          KATHLEEN KAY, UNITED STATES MAGISTRATE JUDGE

         Before the court is a petition for writ of habeas corpus [doc. 1, doc. 1, att. 1] and memorandum in support [doc. 10] filed pursuant to 28 U.S.C. § 2241 by James Ray Phipps, who is proceeding pro se in this matter. Phipps is an inmate in the custody of the Bureau of Prisons and is currently incarcerated at the Federal Correctional Institution in Oakdale, Louisiana. The government has filed a response [doc. 13] and the petitioner has filed a reply with additional exhibits. Docs. 14, 15.

         This matter has been referred to the undersigned in accordance with the provisions of 28 U.S.C. § 636. For the reasons stated below, IT IS RECOMMENDED that the petition be DISMISSED WITHOUT PREJUDICE for lack of jurisdiction.

         I. Background

         Phipps brings this petition to challenge the validity of his conviction and sentence for one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, in violation of 26 U.S.C. § 7212(a). Doc. 1; doc. 1, att. 1. He was convicted of that offense, as well as three counts of mail fraud, one count of wire fraud, and three counts of tax evasion, following a jury trial in the United States District Court for the Northern District of Texas. United States v. Phipps, No. 3:06-cr-114, docs. 19, 120 (N.D. Tex. Aug. 12, 2008). The United States Court of Appeals for the Fifth Circuit described his offense conduct as follows, based on the evidence adduced at trial:

For over twenty years, Phipps has operated self-styled “educational programs dedicated to teaching others how to eliminate their debt and live within their means.” Despite notice from the United States Postal Service (“USPS”) that both of his prior, similarly structured endeavors were considered illegal pyramid schemes, Phipps created the instant program, Life Without Debt (“LWD”). Members were encouraged to contribute between $2, 000 and $100, 000; Phipps claimed that a larger contribution would engender larger returns. As with prior schemes, members were required to recruit two new members prior to receiving any payments; they also received educational literature and tapes with anti-income tax messages. Notably, Phipps told participants that the income received through LWD would not need to be reported to the IRS. Phipps himself did not report any of his LWD income to the IRS.
During his ten years of operating LWD, Phipps received notices from the states of Georgia, Oklahoma, and Maryland that LWD constituted a pyramid scheme, and he may be subject to civil or criminal enforcement actions as a result. Indeed, six LWD members were arrested in Florida for felony and misdemeanor promotion of and participation in an illegal lottery. Despite these warnings that his activities might be illegal, Phipps continued to recruit new members through mass mailings, teleconference calls, and seminars in major cities. Phipps sent periodic small payments to members to encourage them to remain in the program, recruit new members, or reinvest in larger payment plans. Though Phipps marketed LWD as a compound-leveraging investment program that would generate large sums of money for its investors, less than nine percent of LWD's approximately 31, 000 participants made a net profit above their initial investment. Phipps “earned” $4, 606, 396 from LWD, $1, 381, 683 of which was “participation income, ” and $3, 224, 782 of which he paid to himself under aliases within the scheme.

United States v. Phipps, 595 F.3d 243, 244-45 (5th Cir. 2010). On August 12, 2008, Phipps was sentenced to a 210 month term of imprisonment, including 22 months for the 26 U.S.C. § 7212 violation, with that term to run concurrent to the others. Phipps, No. 03:06-cr-114, at docs. 195, 196. By amended judgment, the court also ordered restitution in the amount of $1, 402, 446.00. Id. at doc. 263.

         Phipps appealed his conviction to the Fifth Circuit, and that court affirmed his conviction on all counts. Phipps, 595 F.3d at 244-48. He sought a writ of certiorari in the United States Supreme Court, which denied same on May 24, 2010. Phipps v. United States, 130 S.Ct. 3336 (2010).

         On October 7, 2010, Phipps's timely pro se Motion to Vacate under 28 U.S.C. § 2255 (“2010 § 2255 motion”) was received by the trial court.[1] Phipps v. United States, No. 3:10-cv-2038, doc. 1 (N.D. Tex. Jun. 25, 2012). There Phipps raised several grounds for relief, including lack of subject matter jurisdiction, ineffective assistance of counsel, and unconstitutionally excessive sentence. Id. After receiving a response from the government, the magistrate judge recommended that the motion be denied and the trial judge adopted the recommendation. Id. at docs. 12, 17, 18. On September 25, 2017, he filed another § 2255 motion in the trial court, raising new constitutional challenges to his conviction and sentence. Phipps v. United States, No. 3:17-cv-2720, doc. 2 (N.D. Tex. Oct. 30, 2017). The court ordered the motion transferred to the Fifth Circuit for authorization under 28 U.S.C. § 2255(h), and that court denied same on March 28, 2018. Id. at docs. 7, 9, 12.

         Phipps now brings the instant habeas petition, arguing that the Supreme Court's recent decision in Marinello v. United States, 138 S.Ct. 1101 (2018), shows that he was convicted of a nonexistent offense with respect to his conviction for corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws, in violation of 26 U.S.C. § 7212(a) (“§ 7212(a) conviction”). Doc. 1; doc. 1, att. 1. The government has filed an opposition, arguing that the court does not have jurisdiction over this petition because Phipps has not shown that Marinello calls his conviction into question or that he was foreclosed from raising such a claim in a prior § 2255 motion, as required to seek habeas relief in this court through § 2255's savings clause. Doc. 13. In his reply Phipps attempts to present additional grounds for relief. Doc. 14.

         II. LAW & ANALYSIS

         A. ...


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