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Patridge v. United States

July 30, 2010

DENNY R. PATRIDGE, PETITIONER,
v.
UNITED STATES OF AMERICA, RESPONDENT.



The opinion of the court was delivered by: Michael P. McCUSKEY Chief U.S. District Judge

OPINION

On June 22, 2009, Petitioner, Denny R. Patridge, through his counsel, Jerold W. Barringer, filed a Motion to Vacate, Set Aside, or Correct Sentence Under 28 U.S.C. § 2255 (#1). On July 21, 2009, the Government filed its Response to Petitioner's Motion (#3) and Exhibits (#4). The Government argued, among other things, that Petitioner's Motion was filed beyond the one-year time limitation of 28 U.S.C. § 2255 and should be denied. On August 5, 2009, Petitioner filed a Reply (#5). In response to the Government's argument that his Motion is untimely, Petitioner appears to be arguing that he could not have raised his arguments prior to the decision of the United States Supreme Court in United States v. Santos, 553 U.S. 507, 128 S.Ct. 2020 (2008). Following careful consideration, this court concludes that Petitioner's Motion is untimely and must be denied on that basis.

FACTS

In Case No. 04-CR-20031, Petitioner was charged by indictment with one count of making a false federal income tax return, in violation of 26 U.S.C. § 7206(1), two counts of willfully attempting to evade or defeat tax, in violation of 26 U.S.C. § 7201, two counts of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(ii) and 18 U.S.C. § 1956(a)(1)(B)(i). On June 30, 2005, following a jury trial, Petitioner was found guilty of all charges except the charge of making a false federal income tax return. On September 25, 2006, a sentencing hearing was held and this court sentenced Petitioner to a term of 60 months in the Federal Bureau of Prisons. This court also ordered a term of three years of supervised release, restitution in the amount of $168,219.50 for tax years 1996, 1997, 1998 and 1999, and a fine of $100,000. Petitioner was represented by Attorney Barringer during his trial and sentencing.

Petitioner filed a timely notice of appeal. On November 14, 2007, the Seventh Circuit Court of Appeals entered an Opinion which affirmed Petitioner's convictions. United States v. Patridge, 507 F.3d 1092 (7th Cir. 2007). The court stated that Petitioner, "who owned an insurance agency, decided to make life hard for the revenooers by transferring his income to an offshore trust and then pretending that he had no income." Patridge, 507 F.3d at 1092. The Seventh Circuit explained:

The first trust in line, located in Antigua, transferred everything to a second trust, in Belize. The second trust transferred the money to a third trust (also in Belize), which "loaned" it back to Patridge, who conveniently never paid interest or repaid any of the "debt." When applying for credit, Patridge treated the proceeds from Trust #3 as income and claimed to have no debts. Trust #1 and Trust #2 filed tax returns, each claiming to have expenses exactly equal to its income. Trust #3 never filed a tax return. Patridge himself filed returns in some years, though not in others, and claimed to have negligible income. After an audit, the IRS concluded that Patridge's income was significant and that he owed $74,279 in taxes for 1996 and $49,836 for 1997. Penalties took the total to $130,736 (plus interest) for 1996 and $88,675 (plus interest) for 1997.

Partridge, 507 F.3d at 1092-93. The Seventh Circuit stated that Petitioner "dragged out the jury trial for 13 days but was convicted." Patridge, 507 F.3d at 1093. The Seventh Circuit went on to find that all 19 issues raised by Attorney Barringer were frivolous. Patridge, 507 F.3d at 1093-95. In fact, the Seventh Circuit expressed doubt regarding Attorney Barringer's fitness to practice law and gave him "14 days to show cause why he should not be fined $10,000 for his frivolous arguments and noncompliance with the Rules . . . ." Patridge, 507 F.3d at 1095-97. Petitioner filed a petition for a writ of certiorari to the United States Supreme Court, which was denied on March 24, 2008. The United States Supreme Court denied Petitioner's petition for rehearing on May 19, 2008.

More than one year later, on June 22, 2009, Petitioner, still represented by Attorney Barringer, filed a Motion to Vacate, Set Aside, or Correct Sentence Under 28 U.S.C. § 2255 (#1). In his Motion, Petitioner raised several arguments but mainly contended that his convictions of wire fraud and money laundering cannot stand following the Santos decision.*fn1 According to Petitioner's somewhat convoluted argument, his convictions must be vacated because no evidence was presented at trial regarding "proceeds" as defined by the Supreme Court. The Government argues that Petitioner's Motion is untimely based upon the one-year limitations period which applies to § 2255 under the Antiterrorism and Effective Death Penalty Act ("AEDPA"). This Court agrees.

ANALYSIS

"A motion by a federal prisoner for post-conviction relief under 28 U.S.C. § 2255 is subject to a one-year time limitation that generally runs from 'the date on which the judgment of conviction becomes final.'" Clay v. United States, 537 U.S. 522, 524 (2003), quoting 28 U.S.C. § 2255(f)(1). In this case, the judgment became final on the date the Supreme Court denied Petitioner's petition for a writ of certiorari, March 24, 2008. See Robinson v. United States, 416 F.3d 645, 649 (7th Cir. 2005). Therefore, Petitioner had one year, or until March 24, 2009, to file his Motion. See United States v. Marcello, 212 F.3d 1005, 1010 (7th Cir. 2000) (adopting the anniversary rule for determining the date § 2255 motion was due). Petitioner did not file his Motion until June 22, 2009, almost three months late.

In response to the Government's argument that his Motion is untimely, Petitioner argued, in his Reply, that his Motion is timely because of the Santos decision. Petitioner's argument is confusing and hard to follow, but this court believes that he must be arguing that his Motion is timely based upon § 2255(f)(3).*fn2 Under this subsection, the one-year limitations period runs from "the date on which the right asserted was initially recognized by the Supreme Court, if that right has been newly recognized by the Supreme Court and made retroactively applicable to cases on collateral review." 28 U.S.C. § 2255(f)(3). This court concludes that § 2255(f)(3) does not apply in this case.*fn3

In Santos, the defendant was convicted of one count of conspiracy to run an illegal gambling business, one count of running an illegal gambling business, one count of conspiracy to launder money and two counts of money laundering. Santos, 128 S.Ct. at 2023. The defendant's convictions were affirmed on appeal. However, in ruling on the defendant's motion under § 2255, the district court vacated the defendant's money laundering convictions based upon the Seventh Circuit's decision in United States v. Scialabba, 282 F.3d 475 (7th Cir. 2002). Santos, 128 S.Ct. at 2023. In Scialabba, the Seventh Circuit "held that the federal money-laundering statute's prohibition of transactions involving criminal 'proceeds' applies only to transactions involving criminal profits, not criminal receipts." Santos, 128 S.Ct. at 2023, citing Scialabba, 282 F.3d at 478. The Seventh Circuit affirmed the district court's ruling, based upon Scialabba. Santos, 128 S.Ct. at 2023. The United States Supreme Court granted certiorari.

On June 2, 2008, the Supreme Court issued its Opinion. Justice Scalia, joined by Justices Souter, Ginsburg, and Thomas, determined that the term "proceeds" in the money laundering statute was ambiguous because, "[f]rom the face of the statute, there is no more reason to think that 'proceeds' means 'receipts' than there is to think that 'proceeds' means 'profits.'" Santos, 128 S.Ct. at 2025. Justice Scalia then stated:

Under a long line of our decisions, the tie must go to the defendant. The rule of lenity requires ambiguous criminal laws to be interpreted in ...


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