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United States v. Grace

United States District Court, M.D. Louisiana

August 28, 2019

UNITED STATES OF AMERICA
v.
GEORGE GRACE

          MEMORANDUM RULING

          S. MAURICE HICKS, JR. JUDGE.

         Petitioner George Grace (“Grace”) is before the Court on a Motion to Vacate, Set Aside, or Correct Sentence under 28 U.S.C. § 2255 (Record Document 344) and an Amended Motion to Vacate, Set Aside, or Correct Sentence under 28 U.S.C. § 2255 (Record Document 348). For the reasons set forth below, the motions are DENIED.

         BACKGROUND

         These proceedings began in 2010, when Grace was originally indicted on eleven counts. See Record Document 1. In 2011, the Government filed a Superseding Indictment (the “Indictment”) (Record Document 24), which included 13 counts. Grace was charged with racketeering, bribery, obstruction of justice, fraud, extortion, making false statements to the FBI, and use of an interstate facility in aid of racketeering. These charges stemmed from Grace's corrupt conduct during his tenure as the mayor of the City of St. Gabriel, Louisiana. A lengthy trial began on January 23, 2012. Following closing arguments, the Court charged the jury. Grace did not object to the Court's jury instructions. See Record Document 281-3 at 299.

         The jury returned a guilty verdict on seven counts: Count 1 (RICO), Count 6 (obstruction of justice), Count 7 (false statements), Count 8 (federal program bribery), Count 9 (mail fraud), Count 11 (wire fraud), and Count 13 (use of an interstate facility in aid of racketeering). The Court then sentenced Grace to 264 months imprisonment. See Record Document 268.

         Grace timely appealed several aspects of his conviction and sentence to the Fifth Circuit. The Fifth Circuit rejected all of Grace's arguments regarding his conviction. It did, however, vacate the Court's sentence and remand for re-sentencing, such that this Court could recalculate the appropriate loss amount. See United States v. Grace, 568 Fed.Appx. 344 (5th Cir. 2014). The Court re-sentenced Grace, again to 264 months imprisonment. See Record Document 324. Grace now seeks to collaterally attack his conviction and sentence under 28 U.S.C. § 2255 on multiple grounds. The Court analyzes each of Grace's claims below.

         LAW AND ANALYSIS

         I) § 2255 Standard

         28 U.S.C. § 2255(a) provides a prisoner four grounds upon which he may seek relief from his sentence: (1) “that the sentence was imposed in violation of the Constitution or laws of the Untied States;” (2) “that the court was without jurisdiction to impose such a sentence;” (3) “that the sentence was in excess of the maximum authorized by law;” or (4) that the sentence is “otherwise subject to collateral attack.” If a court finds that any of the four grounds exist, the court “shall vacate and set the judgment aside and shall discharge the prisoner or resentence him or grant a new trial or correct the sentence as may appear appropriate.” 28 U.S.C. § 2255(b). Relief under § 2255 is “reserved for transgressions of constitutional rights and for a narrow range of injuries that could not have been raised on direct appeal and would, if condoned, result in a complete miscarriage of justice.” United States v. Acklen, 47 F.3d 739, 741 (5th Cir. 1995).

         “A claim not raised on direct appeal is considered procedurally defaulted and will be considered on collateral review only if the defendant can show either (1) ‘cause' for his failure to previously raise the issue and ‘actual prejudice' resulting from the alleged error or “actual innocence.'” Bousley v. United States, 523 U.S. 614 (1998). “To establish “cause, ” a prisoner must “show that some objective factor external to the defense impeded counsel's efforts to comply with the State's procedural rule.” Murray v. Carrier, 477 U.S. 478, 488 (1986). “This requires a demonstration that ‘the factual or legal basis for the claim was not reasonably available to the claimant at the time of the state proceeding.'” Roach v. Angelone, 176 F.3d 210, 222 (4th Cir.1999) (quoting McCleskey v. Zant, 499 U.S. 467, 494 (1991)).

         II) ANALYSIS

         a. McDonnell v. United States

         Grace's first series of arguments relies on the United States Supreme Court case of McDonnell v. United States, 136 S.Ct. 2355 (2016) (“McDonnell”). He argues that as a result of McDonnell, his convictions must be vacated. In McDonnell, the Supreme Court held that a district court's instruction on the term “official act, ” as used in 18 U.S.C. § 201(a)(3), was overbroad. The Court interpreted official act in the following way:

[A]n “official act” is a decision or action on a “question, matter, cause, suit, proceeding or controversy.” The “question, matter, cause, suit, proceeding or controversy” must involve a formal exercise of governmental power that is similar in nature to a lawsuit before a court, a determination before an agency, or a hearing before a committee. It must also be something specific and focused that is “pending” or “may by law be brought” before a public official. To qualify as an “official act, ” the public official must make a decision or take an action on that “question, matter, cause, suit, proceeding or controversy, ” or agree to do so. That decision or action may include using his official position to exert pressure on another official to perform an “official act, ” or to advise another official, knowing or intending that such advice will form the basis for an “official act” by another official. Setting up a meeting, talking to another official, or organizing an event (or agreeing to do so) -without more - does not fit that definition of “official act.”

McDonnell, 136 S.Ct. at 2371-72 (2016). Because the jury instructions used at McDonnell's trial included a broader interpretation, his convictions were vacated. Here, it is necessary to determine which, if any, of the counts on which Grace was convicted are affected by McDonnell. At the outset, the Court notes that McDonnell potentially affects Counts 1, 8, 9, 11 and 13. Each count will be addressed in turn.

         i. Count 1

         Count 1 charged Grace with a violation of 18 U.S.C. § 1962(c) - the RICO statute (“RICO”). To find a defendant guilty under RICO, a jury must find, inter alia, proof beyond a reasonable doubt of the commission of at least two racketeering acts. See United States v. Turkette, 452 U.S. 576 (1981). Here, the Indictment lists eleven racketeering acts. Six of the listed racketeering acts were public bribery in violation of Title 14, Louisiana Revised Statute, Section 118. Four of the listed acts were extortion in violation of Title 18, United States Code, Section 1951. These four acts of extortion were also charged as separate crimes in Counts 2-5 of the Indictment. The remaining racketeering act was obstruction of justice in violation of Title 18, United States Code, Section 1512(b)(3). Obstruction of justice was also charged as a separate crime in Count 6 of the Indictment. Of these eleven racketeering acts, only the four acts of extortion could have been affected by McDonnell.[1]

         As is mentioned above, the four racketeering acts of extortion were charged as separate crimes in Counts 2-5 of the Indictment. However, the jury returned verdicts of not guilty on each of those counts.[2] The Court takes this to mean that the acts of extortion also did not form the basis of the jury's conclusion that Grace violated RICO. As such, the Court concludes that McDonnell has no effect on Grace's conviction on Count 1.

         ii. Count 8

         Count 8 charged Grace with a violation of Title 18, United States Code, Section 666 - federal program bribery. This statute makes it a crime for an agent of a state or local government or agency receiving certain federal benefits to solicit, accept, or agree to accept a bribe in connection with certain business or transactions of the local government. See 18 U.S.C §666(B). It is not clear to the Court whether McDonnell has any effect on this statute, as on its face, there is no official act requirement. However, the Court need not decide whether it applies. Even assuming, arguendo, that McDonnell applies to Count 8, Grace's claim is procedurally defaulted, as he failed to raise the claim on direct review. See Bousley v. United States, 523 U.S. 614 (1998).

         As is noted above, where a claim is procedurally defaulted, “the claim may be raised in a habeas proceeding only if the defendant can first demonstrate either ‘cause' and actual ‘prejudice' or that he is ‘actually innocent.'” Id. at 622. Here, Grace has failed to demonstrate cause or actual innocence. First, Grace has failed to show that the legal basis for his claim was not reasonably available to counsel at the time of direct review. See Reed v. Ross, 468 U.S. 1 (1984) (holding that where a claim is so novel that its legal basis is not reasonably available to counsel on appeal, a petitioner has cause for the failure to raise the claim on direct review). It is clear that the basis for the Supreme Court's decision was reasonably available at the time of Grace's appeal.

         In Valdes v. United States, the United States Court of Appeals for the D.C. Circuit rejected a proposed interpretation of the term official act as used in 18 U.S.C. § 201 as overly broad. 475 F.3d 1319, 1323 (D.C. Cir. 2007). In so doing, the court relied on the canon of noscitur a sociis to narrowly interpret the terms “question” and “matter, ” which are found in the statutory definition of official act. See id. at 1324. This was the same approach used by the U.S. Supreme Court in McDonnell. See McDonnell, 136 S.Ct. at 2368. Additionally, in the case at bar, Grace challenged his conviction on Count 13, arguing that the Court's instruction on the term official action was overbroad. Although he did not object on the basis that the McDonnell Court later relied upon, Grace's argument was close enough to demonstrate that such a basis was reasonably available to counsel on direct review. For these reasons, Grace has failed to show cause for his failure to raise this issue on appeal as to Count 8.

         Grace has also failed to demonstrate actual innocence. To demonstrate actual innocence, a defendant must show that “it is more likely than not that no reasonable juror would have convicted him.” Bousley v. United States, 523 U.S. 614, 623, (1998). Here, the conduct alleged in the Indictment related to accepting bribes in exchange for zoning assistance and the sale of city property. Specifically, the Indictment alleges that Grace promised to ensure that particular property was zoned commercial and to ensure that certain city property was sold to William Myles. Such conduct clearly qualifies as official acts as defined in McDonnell. After review of the record, the Court has determined that enough evidence of such conduct was presented to prevent the Court from concluding that it is more likely than not that no reasonable juror would have convicted Grace under this statute. Therefore, Grace has also failed to show actual innocence. As such, Count 8 should not be vacated.

         iii. Counts 9 and 11

         Although it appears from case law that McDonnell does, in fact, apply to Counts 9 and 11, Grace did not raise the issues addressed by McDonnell on direct review for these counts. Therefore, Grace's McDonnell claims on these counts are also procedurally defaulted. Furthermore, because Grace has failed to prove cause or actual innocence, Grace is not entitled to relief from his convictions on these counts. First, Grace has failed to show cause for the same reasons addressed in the section II(a)(ii) on Count 8. Second, Grace has failed to prove actual innocence, as there was sufficient evidence for a jury to convict him on a theory of property fraud, which does not implicate the term official act. Thus, it is not affected by McDonnell.

         Count 9 charged Grace with mail fraud under Title 18, United States Code, Sections 1341 and 1346. Count 11 charged Grace with wire fraud under Title 18, United States Code, Sections 1343 and 1346. Both wire and mail fraud contain an honest services fraud theory and a property fraud theory. Charges may be pursued on either, or both. In this case, charges were pursued on both theories, as both theories were included in the Court's jury instructions for Count 9 and Count 11.

         As is mentioned above, only the honest services fraud theory of mail and wire fraud implicates McDonnell, as the official act instruction is only applicable to this theory. Here, the jury had the option to convict under either theory on each Count. Although it is impossible for the Court to ...


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