UNITED STATES of America, Plaintiff-Appellee, v. Mark J. AVERY, Defendant-Appellant.
No. 12-35209
United States Court of Appeals, Ninth Circuit
June 18, 2013
719 F.3d 1080
I would hold that Proposition 100 violates substantive due process because it fails both prongs of the Salerno test, either one of which is sufficient to find Arizona‘s categorical denial of bail here unconstitutional. I therefore respectfully dissent.
Krista Hart (argued), Sacramento, CA, for Defendant-Appellant.
Kyle G. French (argued), Assistant United States Attorney; Karen Loeffler, United States Attorney, Anchorage, AK, for Plaintiff-Appellee.
Opinion by Judge Tallman
OPINION
TALLMAN, Circuit Judge:
Mark Avery, former attorney and trustee of private trusts, appeals the district court‘s denial of his
Avery served as a trustee for the May Smith Trust, with assets valued in excess of $100 million, and the May and Stanley Smith Charitable Trust, with assets exceeding $350 million. On March 6, 2007, Avery was charged by Information with engaging “in a fraudulent financing scheme in which he abused his fiduciary obligations and his position of trust to acquire over $52 million dollars through an ambiguous loan arrangement which used the May Smith Trust as collateral.” In furtherance of the fraudulent scheme, Avery executed margin loans secured by the trust assets and used the loaned funds “to purchase [a] speculative aircraft venture,” to “pa[y] personal debts,” and to “purchase personal assets.”1 After Avery filed personal bankruptcy and his businesses collapsed, Avery defaulted on the margin loans and the lender foreclosed on the $52 million of trust collateral that secured their repayment.
To resolve his criminal charges, Avery entered into a plea agreement executed under
But after serving almost four years of his sentence, on February 11, 2011, Avery sought habeas relief in the District of Alaska, claiming his conviction and sentence were invalidated by the Supreme Court‘s decision in Skilling. The district court denied Avery‘s habeas petition, concluding that Avery had “procedurally defaulted [his] claim by failing to raise it on direct review” and could not overcome that default by establishing actual innocence or cause and prejudice. Avery immediately appealed. On appeal, Avery argues that the district court erred in concluding that his honest services fraud challenge was procedurally defaulted. In the alternative, Avery contends that he can establish actual innocence or cause and prejudice to overcome any default.
STANDARD OF REVIEW
A district court‘s denial of a petition for writ of habeas corpus is reviewed de novo. Lopez v. Thompson, 202 F.3d 1110, 1116 (9th Cir.2000) (en banc). On habeas review, a district court‘s findings of fact are reviewed for clear error. Sanchez v. United States, 50 F.3d 1448, 1452 (9th Cir.1995).
DISCUSSION
In Skilling, the Supreme Court limited the scope of the honest services fraud offense under
Avery concedes that he failed to raise his innocence claim on direct appeal, challenging his conviction for the first time on collateral review. A defendant “has procedurally defaulted a claim by failing to raise it on direct review, [and] the claim may be raised in habeas only if the defendant can first demonstrate either ‘cause’ and actual ‘prejudice’ or that he is ‘actually innocent.‘” Bousley v. United States, 523 U.S. 614, 622, 118 S.Ct. 1604, 140 L.Ed.2d 828 (1998) (citations omitted). “Actual innocence” is an equitable remedy that permits a petitioner to obtain collateral review of a procedurally defaulted claim. Schlup v. Delo, 513 U.S. 298, 327, 115 S.Ct. 851, 130 L.Ed.2d 808 (1995). To invoke the actual innocence exception, Avery must show that in light of all of the evidence, “it is more likely than not that no reasonable juror would have found [him] guilty beyond a reasonable doubt.” Id. In this context, “actual innocence means factual innocence, not mere legal insufficiency.” Bousley, 523 U.S. at 623 (internal quotation marks omitted).
In evaluating whether Avery is actually innocent of his offense of conviction, sufficient to overcome a procedural default, we must first identify the offenses to which Avery pleaded guilty to committing. Although the government concedes, in light of Skilling, that Avery is actually innocent of the honest services fraud offenses charged in the Information, the government argues that Avery was nonetheless properly convicted of devising a scheme or artifice to defraud the May Smith Trust and May Wong Smith of money or property. The government insists that, in the Information, Avery was charged more broadly with violating not only
The language contained in the Information and plea agreement, citing both
The government also argues that the descriptive language contained in the Information is not limited to allegations of honest services fraud but instead can be construed to support allegations of both honest services fraud and money-or-property fraud. True enough. Paragraph 15 of the Information states that Avery “devised or intended to devise a scheme and
But while this language is compelling, it must be read in conjunction with the actual provisions of the plea agreement, which specify the elements of the offenses to which Avery pled guilty to committing and the underlying acts he admitted to establish his guilt. No portion of the plea agreement referenced money-or-property based wire fraud. The language in the plea agreement differs from the broader language of the Information. Instead, the elements of the offense set forth in the plea agreement were only sufficient to establish an honest services fraud violation. In the plea agreement, the government defined the elements of the crime of conviction as follows:
First, the defendant made up a scheme or plan to defraud the May Smith Trust of its right to his honest services[;] Second, that the defendant acted with the intent to deprive the May Smith Trust of its right to honest services as a trustee; Third[,] the defendant cause[d] a wiring(s) to occur in furtherance of the scheme or plan in interstate commerce.
Additionally, in the plea agreement, the predicate crime underlying the money laundering charges was defined as “breach of fiduciary duty and denial of honest services.”
A comprehensive review of the plea agreement, and the plea colloquy to which Avery swore in open court, demonstrates that Avery pled guilty only to honest services fraud. In pleading guilty, Avery did not admit to money-or-property based wire fraud, and cannot be deemed to have been convicted or sentenced in response to the broader charge, despite it being mentioned in the Information. As we have stated in other contexts, plea agreements are contracts, and are “premised on the notion that the negotiated guilty plea represents a bargained-for quid pro quo.” United States v. Escamilla, 975 F.2d 568, 571 (9th Cir.1992) (internal quotation marks omitted). In the present case, the government only bargained for an honest services fraud conviction and failed to allege a money-or-property based wire fraud violation anywhere other than in the charging document.
While there may be language in the Information that broadly references money-or-property based fraud, the government failed to incorporate those specific allegations into the plea agreement and did not elicit from Avery anything but a plea of guilty to honest services fraud. In enforcing a plea agreement, we are bound to construe any ambiguities or inconsistencies “in favor of the defendant, ordinarily placing on the government responsibility for any lack of clarity.” United States v. Franco-Lopez, 312 F.3d 984, 989 (9th Cir. 2002) (internal citations and quotation marks omitted). The government cannot seize upon convenient language contained in the Information to substantiate a broader charge that was not incorporated into the plea agreement and not acknowledged by Avery as true in conjunction with the entry of his guilty plea.
Our conclusion is bolstered by the statements made during Avery‘s plea colloquy. At the change of plea hearing, in stating the elements of the offense, the court reiterated the limited elements contained in
The government concedes that Avery is actually innocent of honest services fraud in light of Skilling, which confined the reach of the offense to “paradigmatic cases of bribes and kickbacks.” 130 S.Ct. at 2932-33. Since no evidence suggests that Avery either engaged in bribery or received kickbacks, the crime to which Avery pled guilty and for which he stands incarcerated is no longer a criminal offense.3 “A petitioner is actually innocent when he was convicted for conduct not prohibited by law.” Alaimalo v. United States, 645 F.3d 1042, 1047 (9th Cir.2011). Avery has demonstrated that he is actually innocent of the crime of honest services fraud, which underlies his conviction.4 Avery‘s innocence is sufficient to overcome the barrier to reviewing his procedurally defaulted habeas claim.
CONCLUSION
Accordingly, we VACATE the district court‘s dismissal of Avery‘s honest services
RICHARD C. TALLMAN
UNITED STATES CIRCUIT JUDGE
Notes
First, that you made a scheme or plan to defraud the May Smith Trust of its rights to—to your honest services. That‘s the first thing they‘d have to prove and they‘d have to prove that beyond a reasonable doubt. Second, they‘d have to prove that you acted with the intent to deprive the May Smith Trust of its right to honest services. And third, that you caused a wiring or wirings to occur in furtherance of the scheme or plan. They‘d have to prove each one of those elements beyond a reasonable doubt with regard to counts one through five. If they were able to do that, I would tell a jury they have to find you guilty. If they were unable to do that, I‘d tell a jury they had to find you not guilty.