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United States v. Patel

United States District Court, W.D. Virginia, Harrisonburg Division

December 13, 2018

ANJAY PATEL, Petitioner.


          Michael F. Urbanski Chief United States District Judge

         Petitioner Anjay Patel filed a motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. § 2255 on two grounds. First, Patel claims the court's 2013 ruling denying release of forfeited substitute assets to pay his retained counsel is undone by the 2016 Supreme Court decision in Luis v. United States, 136 S.Ct. 1083 (2016). Second, Patel claims the government withheld discovery of an Office of Inspector General (OIG) Report in violation of the rule in Brady v. Maryland, 373 U.S. 83 (1963). ECF No. 871. The government moved to dismiss Patel's § 2255 motion on the basis of timeliness, ECF No. 877, and Patel responded, ECF No. 878.[1] On January 18, 2018, Patel's counsel write a letter providing more recent information concerning his Brady claim. ECF No. 893. For the reasons set forth in this opinion, the government's motion to dismiss will be granted as the petition, as pleaded, is untimely. However, as explained herein, Patel will be granted leave to amend his second claim to raise Brady violations, if any, beyond those he could have asserted based on the 2013 OIG Report.


         On October 6, 2011, a federal grand jury named Patel and others in an 180-count indictment charging violation of the Contraband Cigarette Trafficking Act ("CCTA"), various forms of money laundering, conspiracy to commit money laundering, conspiracy to traffic in contraband cigarettes, and trafficking in contraband cigarettes and counterfeit state tax stamps. The indictment followed a lengthy undercover sting operation conducted by agents from the Bureau of Alcohol, Tobacco, and Firearms ("ATF"), who sold untaxed cigarettes to the defendants. The notice of forfeiture attached to the indictment identified that certain of Patel's property was directly forfeitable under various criminal forfeiture statutes, including 18 U.S.C. § 981(a)(1)(C), 18 U.S.C. § 982(a)(1), 28 U.S.C. § 2461, and 49 U.S.C. § 8030. The government alleged the forfeitable assets included a $20.9 million money judgment, several business entities, bank accounts, and real and personal property. However, the government could not locate directly forfeitable assets of Patel sufficient to reach that figure, and therefore sought forfeiture of substitute assets pursuant to 21 U.S.C. § 853(p).

         On October 26, 2011, the court issued several protective orders to prevent Patel from alienating, encumbering, or wasting forfeitable property and substitute assets. ECF Nos. 27, 221, 222, and 223. On May 11, 2012, Patel moved to modify the pretrial protective orders, asserting that the orders rendered him unable to fully pay his counsel of choice in violation of the Sixth Amendment. ECF No. 334. Patel requested modification of the protective orders to release sufficient substitute assets to pay his legal fees, as he was in arrears under his fee agreement with retained counsel.[2] In connection with this motion, Patel urged the court to conduct a hearing pursuant to United States v. Farmer, 274 F.3d 800 (4th Cir. 2001), which requires a pretrial hearing when "a defendant claims that a portion of the assets restrained pursuant to criminal forfeiture statutes are untainted and that he has no other funds from which to secure the counsel of his choice." Id. at 803-04.

         The court held the Farmer hearing on October 16, 2012. After reviewing the evidence presented, the court denied Patel's motion to release his substitute assets in a memorandum opinion dated January 11, 2013. ECF No. 481. The court found that the government had demonstrated the existence of probable cause sufficient for the issuance of a protective order restraining up to $20.9 million in proceeds from contraband cigarette trafficking. Despite the exercise of due diligence, the government could not locate tainted assets of Patel's to reach that figure. Thus, after reviewing both civil and criminal forfeiture statutes, the court concluded that the government could seek forfeiture of Patel's substitute assets up to $20.9 million, pursuant to 21 U.S.C. § 853(p). The court concluded that Patel had paid counsel more than sufficient funds to defend his case, and that given the amount of paid fees, "there [was] no credible argument that Patel's Sixth Amendment rights [were] in danger of being infringed." United States v. Patel, 949 F.Supp.2d 642, 663 (W.D. Va. 2013).

         On January 17, 2013, Patel filed a notice of interlocutory appeal in the United States Court of Appeals for the Fourth Circuit, appealing the court's decision denying modification of the pretrial protective orders. ECF No. 483.

         On February 15, 2013, Patel and the government entered into a written plea agreement, in which Patel agreed to plead guilty to six counts: Count One charging him with conspiring to distribute contraband cigarettes, in violation of 18 U.S.C. § 371; Count Two charging him with conspiring to commit money laundering, in violation of 18 U.S.C. § 1956(h); Count 56 charging him with trafficking in contraband cigarettes, in violation of 18 U.S.C. § 2342(a); Count 133 charging him with money laundering to promote distribution of contraband cigarettes, in violation of 18 U.S.C. § 1956(a)(1)(A)(i); Count 156 charging him with money laundering related to the proceeds from die sale of contraband cigarettes, in violation of 18 U.S.C. § 1956(a)(3)(A)-(B);and Count 169 charging him with engaging in a monetary transaction in criminally derived funds greater than $10, 000, in violation of 18 U.S.C. § 1957. Plea Agree., ECF No. 492; see Judgment at 2-3, ECF No. 654.

         After pleading guilty, Patel moved to withdraw his January 17, 2013 interlocutory appeal to the Fourth Circuit. On March 8, 2013, the Fourth Circuit dismissed Patel's appeal pursuant to Local Rule 42(b) of the Federal Rules of Appellate Procedure. United States v. Patel, No. 13-4045 (4th Cir. Mar. 8, 2013), op. at 1, ECF No. 502; see Fed. R. App. P. 42(b).

         On August 29, 2013, a criminal judgment was entered sentencing Patel to 84 months of imprisonment followed by two years of supervised release. Judgment at 3-4, ECF No. 654. Patel did not file a direct appeal, and his judgment became final on September 28, 2013.

         On March 30, 2017, Patel filed the present § 2255 motion seeking vacatur of his guilty plea and release of his substitute assets claiming retroactive application of Luis and recent discovery of the claimed Brady violation. In his first claim, Patel alleges the district court violated his Sixth Amendment right to counsel of choice by preserving the pretrial protective orders restraining Patel's substitute assets.

         In his second claim, Patel asserts that the government violated Patel's constitutional due process rights under Brady v. Maryland, 373 U.S. 83 (1963), when it failed to disclose that the Office of the Inspector General ("OIG") in the U.S. Department of Justice was engaged in an ongoing audit of the ATF's procedures and conduct during the investigation underlying Patel's charged criminal activity. Patel asserts that he requested discovery on ATF investigatory improprieties by letter July 31, 2012, ECF No. 871, Ex. C, but apart from an emailed request for further specificity, no discovery related to the OIG audit and report was produced.[3] Patel claims that he would not have entered a guilty plea had proper discovery been provided apprising him of the myriad ATF improprieties revealed in the OIG Report. The audit and investigatory field work, which predates Patel's guilty plea, led to the OIG publishing a report in September 2013 (the "OIG Report"), a month after Patel was sentenced. OIG Report, ECF No. 871, Ex. B. The OIG Report identified certain ATF misconduct, concluding that the ATF had failed to authorize several contraband cigarette investigations and comply with accounting procedures for seized assets. The September 16, 2013 ATF response to the OIG Report states that "[a]s early as March 2011, ATF recognized issues with the manner in which income-generating undercover operations were being conducted." ECF No. 871, Ex. B, Audit of the Bureau of Alcohol, Tobacco, Firearms and Explosives' Use of Income-Generating, Undercover Operations, App. II, at 54. Appendix 1 to the ATF's September 16, 2013 response to the OIG Report is entitied "Timeline of Churning Remedial Measures," and this chronology of agency activity makes clear that the ATF was aware of problems with its undercover tobacco operations and was taking steps to correct them in 2011 and 2012, when Patel's discovery requests were pending. Patel's discovery letter of July 31, 2012 sought specific information regarding inappropriate conduct by ATF agents in conducting these operations. ECF No. 871, Ex. C. Indeed, Patel claims that Operation Alpha highlighted in the OIG Report is the investigation refers to his case. Patel's petition alleges that that the OIG report was the subject of a September 25, 2013 Washington Post article. Sari Horwitz, ATF lost track of 2.1 million cartons of cigarettes in sting operations, report finds, WASH. POST, Sept. 25, 2013. ECF No. 871, at 3 n.2.

         Since the filing of the present § 2255 motion, Patel's counsel sent a letter to the court on January 18, 2018, raising "recent developments and admissions from the Bureau of Alcohol, Tobacco and Firearms." ECF No. 893. In the letter, Patel's counsel asserts he has discovered new information regarding his Brady claim. Patel cites to articles published by the New York Times in 2017, [4] which he claims reveal improprieties beyond those contained in the OIG Report. Patel's counsel's letter focuses, as do the New York Times articles, on an ATF "management account" used to fund undercover operations associated with Big South, a tobacco warehouse in Bristol, Virginia. Counsel's letter refers to the ATF's use of this bank account and alleged dealings between Patel's co-conspirators and Big South, noting that the Bristol warehouse was expressly mentioned in Patel's indictment. Indictment, ECF No. 3, ¶¶ 36, 70. On February 16, 2018, the government responded to the letter, contending that it sets forth improper and untimely arguments. ECF No. 894.


         To state a viable claim for relief under § 2255, a petitioner must prove: (1) that his sentence was "imposed in violation of the Constitution or laws of the United States;" (2) that "the court was without jurisdiction to impose such a sentence;" or (3) that "the sentence was in excess of the maximum authorized by law, or is otherwise subject to collateral attack." 28 U.S.C. § 2255(a). Patel bears the burden of proving grounds for a collateral attack by a preponderance of the evidence. Jacobs v. United States, 350 F.2d 571, 574 (4th Cir. 1965).

         A threshold issue for the court is whether Patel's § 2255 petition is timely. Under 28 U.S.C. § 2255(f)(1), a petitioner has one year from the date that his judgment of conviction becomes final to attack the corresponding sentence. Patel's criminal judgment, entered on August 29, 2013, became final on September 28, 2013. See Clay v. United States, 537 U.S. 522, 524-25 (2003) (stating a conviction becomes final once the availability of direct review is exhausted). Patel concedes that his § 2255 petition was not filed within one year of his conviction becoming final. Because Patel's judgment of conviction was final for more than three years before he filed this § 2255 petition, he must satisfy one of § 2255(f)'s other conditions for renewing the limitations period.


         For his first claim, asserting violation of his Sixth Amendment right to counsel of choice, Patel relies on § 2255(f)(3), which allows the limitations period to begin on "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). The § 2255(f)(3) limitation period runs from the date on which the Supreme Court recognizes the new right, not the date on which the new right was "made retroactive[.]" Dodd v. United States, 545 U.S. 353, 357-60 (2005). "A petitioner who collaterally attacks his conviction must establish that the change applies retroactively." Miller v. United States, 735 F.3d 141, 145 (4th Cir. 2013).

         Patel argues his claim was filed within one year of the Supreme Court's decision in Luis, which held that "the pretrial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment." 136 S.Ct. at 1088-1092. Specifically, Patel argues that the decision in Luis constitutes a new right that was initially recognized by the ...

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