719 F.3d 1080
9th Cir.2013Background
- Avery served as trustee for the May Smith Trust (~$100M) and the May/Stanley Smith Charitable Trust (>$350M).
- He was charged by Information with a fraudulent financing scheme abusing fiduciary duties to obtain over $52M, secured by trust assets.
- Avery pleaded guilty under a Rule 11(c)(1)(C) plea to five counts of wire fraud, nine counts of money laundering, and one count of criminal forfeiture, and was sentenced to 102 months and $52,125,000 restitution.
- Plea language specified honest services fraud elements, not money-or-property based wire fraud; the government later relied on broader language.
- After Skilling (2010) narrowed honest services fraud, Avery challenged the conviction as actually innocent of the honest services theory under the plea.
- The district court denied habeas relief for procedural default; Avery appealed arguing improper default and actual innocence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Avery is procedurally defaulted on his honest services claim | Avery | Avery | Vacate default; remand for further proceedings |
| Whether Avery is actually innocent of the honest services fraud conviction post-Skilling | Avery is actually innocent of honest services fraud | Avery not actually innocent; default blocks review | Avery is actually innocent of honest services fraud; remand possible re prosecution |
Key Cases Cited
- Skilling v. United States, 130 S. Ct. 2896 (U.S. 2010) (limits honest services fraud to bribery/kickbacks)
- Bousley v. United States, 523 U.S. 614 (U.S. 1998) (actual innocence exception to procedural default)
- Schlup v. Delo, 513 U.S. 298 (U.S. 1995) (actual innocence standard; more likely than not no reasonable jury would convict)
- Escamilla v. United States, 975 F.2d 568 (9th Cir. 1992) (plea bargains and ambiguity construed in the defendant's favor)
- Pelisamen v. United States, 641 F.3d 399 (9th Cir. 2011) (actual innocence and plea-bargain scope considerations in Ninth Circuit)
- Milovanovic, 678 F.3d 713 (9th Cir. 2012) (honest services framework and related fraud theories)
- Rybicki, 354 F.3d 124 (2d Cir. 2003) (definition and scope of honest services and fraud schemes)
- Jaramillo v. Stewart, 340 F.3d 877 (9th Cir. 2003) (considerations on plea negotiations and consequences of not obtaining 'more serious' charges)