United States District Court, W.D. Arkansas, Fort Smith Division
MAGISTRATE JUDGE'S REPORT AND
HONORABLE MARK E. FORD, UNITED STATES MAGISTRATE JUDGE
the Court is the Defendant's Motion Under 28 U.S.C.
§ 2255 to Vacate, Set Aside, or Correct Sentence by a
Person in Federal Custody filed July 16, 2018 (ECF No. 42)
and his Amended Motion filed on July 30, 2018 (ECF No. 46).
The United States filed its response on August 28, 2018. (ECF
No. 51). Petitioner filed a reply on January 2, 2019. (ECF
No. 56). The matter is ready for Report and Recommendation.
11, 2016, Defendant, William Jackson Moates, Jr.
(“Moates”), was named in a 25-count Indictment
charging him with 13 counts of wire fraud (Counts 1, 3, 4, 5,
6, 8, 9, 10, 11, 15, 17, 18 and 23); seven counts of money
laundering (Counts 2, 7, 14, 16, 19, 21 and 22); one count of
theft concerning programs receiving federal funds (Count 12);
two counts of mail fraud, aided and abetted by each other and
others (Counts 13 and 20); one count of theft or embezzlement
from an employee benefit plan (Count 24); and, one count of
bank fraud (Count 25). (ECF No. 1).
was arrested on May 13, 2016. (ECF No. 11). He appeared for
arraignment with his retained counsel, Rex W. Chronister
(“Chronister”), on May 16, 2016, at which time he
entered a not guilty plea to each count of the Indictment.
(ECF No. 6). Chronister requested discovery in open court,
and Moates was released on a signature bond and conditions of
release. (ECF Nos. 6, 7, 8).
October 11, 2016, Moates appeared with counsel before the
Hon. P. K. Holmes, III, Chief U.S. District Judge, for a
change of plea hearing. (ECF No. 14). A written Plea
Agreement (ECF No. 15) was presented to the Court, and Moates
pleaded guilty to Counts 5, 11, 12, 13, 14 and 24 of the
Indictment. (ECF No. 14). The Court found that Moates'
guilty pleas were voluntary, supported by a factual basis,
and the pleas were accepted. (Id.). The Court
reserved approval of the Plea Agreement pending completion of
a Presentence Investigation Report (“PSR”).
Initial PSR was prepared by the United States Probation
Office on April 27, 2017. (ECF No. 18). On May 10, 2017, the
Government advised that it had numerous objections to the
Initial PSR, and these were principally related to the amount
of actual loss suffered by Moates' victims or the amount
of intended loss. (ECF No. 20). On May 11, 2017, Chronister
submitted 13 objections to the Initial PSR on Moates'
behalf. (ECF No. 22). Moates' objections concerned
factual matters, the amount of actual loss, application of a
sentencing enhancement for vulnerable victims, and that he
intended to seek a downward variance based on health issues.
26, 2017, a Final PSR was submitted to the Court. (ECF No.
23). In an Addendum, U.S. Probation noted resolution, or no
changes made, as to all objections. (ECF No. 23-1).
Final PSR determined that Moates is accountable for an actual
loss to his victims in the total amount of $5, 710, 816.62.
(ECF No. 23, ¶ 159). It was noted: “the
overwhelming information in this case would likely have
resulted in an intended loss to exceed $8, 000, 000. However,
the probation office believed that the actual loss in the sum
of $5, 710, 816.62 was undeniably a conservative estimate as
to the loss Moates should be held accountable for, but also
representative of a readily provable figure.”
(Id., ¶ 162). It was also reported that the
actual loss figure as determined by the probation office
falls within the stipulated loss agreed to by the parties in
the Plea Agreement. (Id., ¶ 163; ECF No. 15,
Base Offense Level was determined to be 7 pursuant to
U.S.S.G. § 2B1.1(a)(1). (ECF No. 23, ¶ 177). The
$5, 710, 816.62 actual loss to victims resulted in an
18-level enhancement.(Id., ¶ 178). As the offenses
involved a substantial financial hardship to five or more
victims, a 4-level enhancement was applied. (Id.,
¶ 179). A 2-level adjustment was made because the
offenses involved sophisticated means and Moates
intentionally engaged in or caused the conduct constituting
sophisticated means. (Id., ¶ 180). Since Moates
was convicted of money laundering under 18 U.S.C. §
1957, a 1-level increase applied. (Id., ¶ 181).
Because Moates knew or should have known that a victim of the
offense was a vulnerable victim, a 2-level enhancement was
added. (Id., ¶ 182). Finally, Moates had abused
a position of private trust in a manner that significantly
facilitated the commission or concealment of the offenses, so
another 2-level enhancement was applied. (Id.,
¶ 183). These enhancements resulted in an Adjusted
Offense Level of 36. (Id., ¶ 185). After a
3-level reduction for acceptance of responsibility,
Moates' Total Offense Level was determined to be 33.
(Id., ¶¶ 187-189). Moates had no criminal
history, so his criminal history score of zero placed him in
Criminal History Category I. (Id., ¶ 201).
statutory maximum term of imprisonment for the counts of
conviction are: 20 years each for Counts 5 and 11; 10 years
for Count 12; 20 years for Count 13; 10 years for Count 14;
and, 5 years for Count 24. Therefore, the total maximum term
of imprisonment is 85 years. (Id., ¶ 250).
Based upon a Total Offense Level of 33 and a Criminal History
Category of I, the advisory guidelines sentencing range was
135 to 168 months imprisonment. (Id., ¶ 251).
filed a Sentencing Memorandum on June 7, 2017. (ECF No. 25).
In it, he argued the “vulnerable victims”
enhancement should not apply, that a downward variance was
warranted due to Moates' rare health condition, and he
suggested a sentence of six years (72 months) imprisonment
was sufficient but not greater than necessary to comply with
the goals of sentencing.
appeared for sentencing on June 28, 2017. (ECF No. 27). Upon
inquiry, Moates stated that he was satisfied with the
representation and advice of his counsel. (Id., p.
1; ECF No. 49, p. 5). The Court confirmed that Moates had an
opportunity to review and read the PSR and discuss it with
his counsel. (Id.). The PSR was reviewed in open
court, and the Court found that given the range in U.S.S.G.
§ 2B1.1, “whether the Court used the actual loss
or the intended loss, the Guideline calculation would be the
same.” (ECF No. 49, p. 6). Addressing Moates' first
five objections to the PSR, the Court clarified that
Moates' only objection was one of timing, and the Court
concluded, “[s]o if it's only a question of timing,
it doesn't appear to be an objection the Court needs to
rule on, ” to which Chronister agreed. (Id.,
p. 8). To the extent there was an objection that needed to be
ruled on, the Court overruled the objection. (Id.).
The Court determined that Moates' objection No. 7 to the
PSR did not affect the Guidelines calculation, and Chronister
agreed. (Id., pp. 8-9). Next, Moates' objection
to the vulnerable victim enhancement was discussed and
argued, with the Court finding that the enhancement applied
and overruling Moates' objection. (Id., pp.
Exhibit 1, being a letter from Dr. TeCora Ballom, Rear
Admiral for the U.S. Public Health Service, Federal Bureau of
Prisons, regarding the BOP's ability to treat Moates'
medical condition was received in evidence. (Id., p.
Government then presented testimony from Steve Williams, a
forensic accountant with the FBI, in support of showing where
the fraudulently obtained funds went. (Id., pp.
14-39). To summarize Mr. Williams' testimony, he
explained that Moates used the fraudulently obtained funds
for his own personal benefit in various ways, including:
payment of personal taxes; a remodel of his home and office;
payment of medical expenses; payment of his mortgage (and
rent during the remodel); ATM withdrawals; purchase of
jewelry; travel (a cruise and a trip to Africa); other
personal purchases (Amazon and iTunes); payments made to
close family members; and, other checks and transfers payable
to himself or his wife. The total of these personal
expenditures was just over $2, 000, 000. (Id., pp.
32-33). Mr. Williams also related that approximately $3, 500,
000 of fraudulently obtained client funds went back in to
Moates' business, including credit card payments of over
$500, 000, and payments to other investors who were defrauded
and whose money was never invested. (Id., pp. 18,
36-37). Moates presented no rebuttal evidence. (Id.,
Court then adopted the PSR without changes and as
supplemented to the extent that the testimony of Mr. Williams
described what happened to the funds that were obtained
through the counts of conviction. (Id., pp. 39-40).
The Court also expressed final approval of the Plea
Agreement. (Id., p. 40). Victim impact statements
were received, and several victims addressed the Court at
sentencing. (Id., pp. 45-56).
Government “[did] not doubt that [Moates'] use and
likely abuse of prescription pain medication lowered his
inhibitions to commit these crimes and helped him escape from
the reality of what he was doing, ” but it argued that
Moates' pride and greed were the motivating factors
behind his criminal conduct, and it was noted that letters of
support from Moates' closest family members expressed the
view that he was innocent and the scapegoat of some wider
conspiracy. (Id., pp. 58- 60). The Court also
recognized this, stating “the Court is somewhat
bothered by statements of people who don't acknowledge
the criminal conduct that the Defendant pled guilty
to.” (Id., p. 60).
argued that Moates “took the wrong path, ” but
that “there was a meeting with family members of the
victims who were aware of all of this happening
that encouraged Mr. Moates to take the path he took.”
(Id., p. 65). Chronister also raised the issue of
Moates' use of prescription pain medications, arguing
that Moates' inhibitions may have been impaired.
(Id., p. 66). An argument for a downward variance
because of Moates' health condition was made.
to exercise his right to allocution, Moates stated, “I
accept the responsibilities for this, ” but also
“[t]his is not me, ” and “I don't
remember all of it.” (Id., p. 67).
that the BOP is capable of taking care of Moates' medical
condition, the Court concluded that a downward variance
because of Moates' medical condition was inappropriate.
(Id., p. 69). Turning to the nature and
circumstances of the offense, the Court commented that
“this is some of the most reprehensible, fraudulent
conduct I have seen.” (Id.). The Court noted
that Moates “used religion to gain the trust of a lot
of investors, ” and “these are people without
means who now have nothing.” (Id., pp. 69-70).
It was also noted that the offense conduct occurred over a
period of four years; that it even “turned into a Ponzi
scheme” where Moates would take money from investors
and give it to other investors; and, that two weeks after his
arrest Moates filed personal bankruptcy and “some of
the victims are listed as unsecured creditors ... which
really, really somewhat astounds me.” (Id.,
pp. 70-71). The need to reflect the seriousness of the
offense and to deter other similar criminal conduct were also
referred to by the Court in support of a Guidelines sentence.
(Id., p. 71). The Court then imposed a Guidelines
sentence of 150 months imprisonment on Counts 5, 11, and 13,
a term of 120 months imprisonment on Counts 12 and 14, and a
sentence of 60 months on Count 24, all to run concurrently.
(Id., p. 73). Three years supervised release was
imposed on each count of conviction, all to run concurrently.
(Id.). No. fine was imposed “because if there
is any monies available, it ought to go towards the payment
of restitution, ” which was ordered in the amount of
$5, 710, 816.62, and $600.00 in special assessments were
ordered. (Id., p. 75).
imposition of sentence, the Court advised Moates of his
appellate rights, including the right to appeal in forma
pauperis. (Id., pp. 76-77).
was entered by the Court on June 28, 2017. (ECF No. 29).
Moates did not pursue a direct appeal from the Judgment.
16, 2018, Moates filed his pro se Motion Under 28
U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence
by a Person in Federal Custody (the “motion”).
(ECF No. 42). The motion was incomplete and was not signed by
Moates under penalty of perjury, so on July 17, 2018 an Order
was entered directing Moates to complete and file the
standard form § 2255 motion on or before August 17,
2018. (ECF No. 44). On July 30, 2018, Moates filed his
completed motion under § 2255. (ECF No. 46). He declared
under penalty of perjury that his motion was placed in the
prison mailing system on July 10, 2018, but the hand-written
date of execution is shown as July 11, 2018. (Id.,
motion, as amended, raises four grounds for relief, which are
summarized as follows:
One: Ineffective assistance of counsel prior to change of
plea, including counsel's failure to investigate
Moates' claims, to review the entire discovery, and to
review applicable law; failure to file a motion to suppress
the evidence seized by the Government; and, failure to
investigate Moates' claims of diminished capacity.
(Id., pp. 4-6).
Two: Ineffective assistance of counsel prior to the
sentencing hearing. Moates claims he never received the
discovery and computer records the Government promised him to
prepare for sentencing, and that counsel never notified the
Court of this. Moates also asserts that counsel failed to
seek a departure due to Moates' diminished mental
capacity. “Because of Attorney Chronister's actions
I was not able to prove that I was not responsible for the
amount of missing funds and that I qualified for a departure
from my sentencing range.” (Id., p. 7).
Three: Ineffective assistance of counsel during the
sentencing hearing. Moates claims his counsel “failed
to notify the Court that the government had purposely erased
the data that would have vindicated me or at a minimum
lowered the loss amounts, ” and “failed to
present evidence that would have supported a downward
departure or variance of my sentence due to unwarranted
disparity.” (Id., p. 8).
Four: Ineffective assistance of counsel after sentencing
hearing. Moates alleges he asked counsel to file an appeal on
his behalf, but that he was dissuaded from an appeal by
counsel because of the costs involved; that “Chronister
never told me that I could have obtain (sic) In Forma
Pauperis status with the Court and not be required to pay up
front for my appeal”; and, that “I would have
appealed my case had Attorney Chronister informed me that I
could appeal without prepayment.” (Id., p.
United States' response to the motion, as amended, was
filed on August 28, 2018. (ECF No. 51). Moates filed a reply
on January 2, 2019. (ECF No. 56).
prisoner in custody under sentence . . . claiming the right
to be released upon the ground that the sentence was imposed
in violation of the Constitution or laws of the United
States, or that the court was without jurisdiction to impose
such sentence, or that the sentence was in excess of the
maximum authorized by law, or is otherwise subject to
collateral attack, may move the court which imposed the
sentence to vacate, set aside or correct the sentence.”
28 U.S.C. § 2255(a). “If the court finds that the
judgment was rendered without jurisdiction, or that the
sentence imposed was not authorized by law or otherwise open
to collateral attack, or that there has been such a denial or
infringement of the constitutional rights of the prisoner as
to render the judgment vulnerable to collateral attack, 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). A thorough review of Moates'
Motion, as amended, and the files and records of this case
conclusively shows that Moates is not entitled to relief, and
it is recommended that his Motion, as amended, be dismissed
with prejudice without an evidentiary hearing.
year period of limitation applies to motions under 28 U.S.C.
§ 2255. This period runs from the latest of: (1) the
date on which the judgment of conviction becomes final; (2)
the date on which the impediment to making a motion created
by governmental action in violation of the Constitution or
laws of the United States is removed, if the movant was
prevented from making a motion by such governmental action;
(3) 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; or, (4) the date on
which the facts supporting the claim or claims presented
could have been discovered through the exercise of due
diligence. 28 U.S.C. § 2255(f).
United States has not raised the issue of timeliness in its
Response, but the circumstances present in the record cause
concern regarding whether Moates' § 2255 Motion is
upon the allegations contained in Moates' § 2255
Motion, the operative date in this case is “the date on
which the judgment of conviction becomes final.” 28
U.S.C. § 2255(f)(1). Moates' Judgment was entered on
June 28, 2017. (ECF No. 29). Had Moates wished to file an
appeal, he was required to do so within 14 days. See
Fed. R. App. P. 4(b)(1)(A)(i). Moates did not file an appeal,
and his judgment of conviction thus became final on July 12,
2017. See Murray v. United States, 313 Fed.Appx. 924
(8th Cir. 2009). From that date, Moates had one year, or
until July 12, 2018, to timely file a § 2255 habeas
of the “prison mailbox rule” could place the
filing of Moates' § 2255 Motion within the one-year
3(d) of the Rules Governing Section 2255 Proceedings provides
“A paper filed by an inmate confined to an institution
is timely if deposited in the institution's internal
mailing system on or before the last day for filing. If an
institution has a system designed for legal mail, the inmate
must use that system to receive the benefit of this rule.
Timely filing may be shown by a declaration in compliance
with 28 U.S.C. § 1746 or by a notarized statement,