Shin v. United States

• Decision Date: 11 April 2018
• Docket Number: Civil Action No. 15-7248(RMB)
• Parties: JONG SHIN, Petitioner, v. UNITED STATES OF AMERICA, Respondent.
• Court: U.S. District Court — District of New Jersey

JONG SHIN, Petitioner, v. UNITED STATES OF AMERICA, Respondent.

Civil Action No. 15-7248(RMB)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY CAMDEN VICINAGE

April 11, 2018

NOT FOR PUBLICATION

OPINION

This matter comes before the Court on Petitioner Jong Shin's ("Shin") Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence by a Person in Federal Custody ("2255 Mot.," ECF No. 1; Petr's Mem., ECF No. 1-2). The Government filed an answer and brief opposing the motion. ("Answer," ECF NO. 9.) Shin filed a reply brief in support of her motion to vacate. ("Petr's Reply Brief," ECF No. 15.)

Shin then filed a motion for release on bail pending disposition of her § 2255 motion ("Mot. for Bail," ECF No. 22), and a motion to dismiss the Superseding Indictment for Lack of Subject Matter Jurisdiction. ("Mot. to Dismiss," ECF No. 27.) The Government filed a brief in opposition to the motion for bail. ("Opp. to Mot. for Bail," ECF No. 23), and Shin filed a rebuttal ("Petr's Rebuttal," ECF No. 24.) Shin also submitted a Motion for Disqualification Under 28 U.S.C. 455(a) and an Amended Memorandum of Facts in support thereof ("Disqual. Mot." ECF No. 25; "Am. Mem. of Facts in Supp. of Disqual. Mot." ECF No. 26.) For the reasons discussed below, the motion to disqualify is denied, the § 2255 motion is denied; and the motions for release on bail and to dismiss the Superseding Indictment for lack of jurisdiction are dismissed as moot.

I. BACKGROUND

On April 20, 2011, a federal grand jury returned a four-count Superseding Indictment against Shin and co-conspirator Esther Zhu. (United States v. Shin, 10cr208(RMB)-1 (D.N.J.)(Superseding Indictment, ECF No. 23.)) Count One charged them with conspiracy to commit wire fraud, contrary to 18 U.S.C. § 1343, in violation of 18 U.S.C. § 1349. (Id. at 1.)¹ Count Two charged Shin with conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h) and contrary to § 1957(a). (Id. at 16.) Counts Three and Four charged Shin and Zhu with making false statements on a loan or credit application, in violation of 18 U.S.C. § 1014, and 18 U.S.C. § 2² for properties at 136 South Bellevue Avenue (Count Three) and 1929 Blaine Avenue (Count Four). (Id. at 19, 21.)

The jury trial began on October 3, 2011. (United States v. Shin, 10cr208(RMB)-1 (D.N.J.), Trial Tr., ECF No. 65.) Ten days later, the jury found Shin guilty of all charges. (Id., Jury Verdict, ECF No. 72.) Shin moved for a judgment of acquittal on all counts, pursuant to Federal Rule of Criminal Procedure 29(c). (Id., Mot. for Acquittal, ECF No. 73.)) This Court denied the motion by Opinion and Order dated April 18, 2012. (Id., Opinion and Order, ECF No. 81.) On September 10, 2012, judgment was entered and Shin was sentenced to a 186-month term of imprisonment, with a five-year term of supervised release. (Id., Judgment, ECF No. 95.)

On September 14, 2012, Shin filed a timely notice of appeal. (Id., Not. of Appeal, ECF No. 96.) The U.S. Court of Appeals for the Third Circuit denied Shin's appeal and affirmed her conviction on March 19, 2014. (Id., Judgment of USCA, ECF No. 101.)

On direct appeal, the Third Circuit Court of Appeals stated the relevant facts:

From May 2006 to December 2006, Shin orchestrated a scheme to flip real estate in Atlantic City, New Jersey at a substantial profit by submitting fraudulent loan applications, inflated appraisals, and falsified closing documents to mortgage lenders. Between May and October 2006, Shin purchased seven Atlantic City properties. Without having improved any of the properties, Shin re-sold them at inflated prices to five straw purchasers she had recruited. To lure the straw purchasers, Shin paid them a few thousand dollars and promised to make the mortgage payments if they submitted mortgage applications, went to the closing, and signed the appropriate paperwork.

To obtain the mortgages, Shin and a mortgage broker at Summit Mortgage Bankers arranged and prepared Uniform Residential Loan Applications (URLAs) for each straw purchaser, containing false statements about the purchasers' employment, income, and plans to reside at the properties. Shin also paid a real estate appraiser to prepare fraudulent appraisals, inflating the value of the properties. Finally, Shin paid a closing agent at Equity Title to prepare fraudulent closing documents that hid the fact that the straw purchasers had not invested any money in the properties, and that Shin (as opposed to the straw buyers) received the loan proceeds in each of the transactions. Shin participated in at least ten fraudulent real estate closings and collected approximately $1.2 million. All of the mortgages eventually went into default and most of the properties were foreclosed upon by the lender. By the end of Shin's scheme, the victim banks were owed an amount exceeding $4,600,000.

. . .

At sentencing, after calculating a Guidelines range of 168-210 months' imprisonment based on a total offense level of 35 and a criminal history category of I, the District Court sentenced Shin to 186 months' imprisonment.

United States v. Shin, 560 F. App'x 137, 138 (3d Cir. 2014).

Shin raised the following arguments on direct appeal:

(1) the District Court's jury instruction on "reasonable doubt" was improper; (2) the District Court plainly erred in admitting co-conspirators' plea agreements during direct examinations; (3) the District Court did not have jurisdiction because there was insufficient evidence of a federal offense; (4) the sentence imposed was substantively unreasonable; and (5) Shin received ineffective assistance of counsel at trial and at sentencing.

Shin, 560 F. App'x at 139-40.

For her third argument on direct appeal, Shin maintained that she did not violate federal law because she did not personally submit a URLA to a federally insured bank. Id. The Third Circuit stated, "[w]e have never held that to be liable under [18 U.S.C.] § 1014 a defendant must personally submit the false statements to the federally insured bank; rather, use of a third party conduit could suffice." Id. at 141. Further, the Third Circuit noted the Fifth and Ninth Circuits had also held it is enough to convict under § 1014 if the defendant knew the false statements were to be presented to a bank, whether or not that institution was federally insured. Id.

The Third Circuit found the following evidence was sufficient to convict Shin under § 1014: (1) J.P. Morgan Chase Bank ("Chase") provided loans in at least three real estate transactions in which Shin was indicted; (2) Shin prepared false URLAs for at least two of her straw purchasers, and directed them to submit their URLAs to her co-conspirator, Zhu; (3) Zhu submitted the URLAs to Chase; and (4) based on the fraudulent URLAs and other fraudulent documents, Chase funded the loans. Id. The Third Circuit agreed with this Court that there was sufficient evidence for a jury to find Shin guilty on any of these three alternate theories:

(1) [Shin's] knowledge, when she prepared the fraudulent loan applications at issue, that they would ultimately be submitted to Chase; (2) [Shin's] aiding and abetting of her co-conspirators in committing these offenses; and (3) the fact that [ ] these offenses were committed in the scope and in furtherance of the wire fraud conspiracy and the acts were reasonably foreseeable consequences of the conspiracy.

Shin, 560 F. App'x at 142.

Shin's also claimed on direct appeal that her trial counsel was ineffective for failing to move to dismiss the indictment on the insufficiency of the charges. Id. The Third Circuit held that Shin could not establish prejudice based on trial counsel's failure to make a motion to dismiss the indictment because the evidence was sufficient for a reasonable jury to convict. Id. Therefore, Shin could not establish prejudice by the alleged failures of counsel. Id.

Shin filed a petition for writ of certiorari. Jong Shin v. United States, 135 S. Ct. 244 (2014). The Supreme Court denied the writ on October 6, 2014. Id. On October 1, 2015, Shin filed the instant Motion to Vacate, Set Aside or Correct Judgment, pursuant to 28 U.S.C. § 2255. (2255 Mot., ECF No. 1.) Shin raised the following grounds for relief:

Ground One (a)(1), (2) 1. There was no federal jurisdiction over Counts One and Two, inter alia, because there was no showing that petitioner Shin agreed that funds should be transferred interstate, as required by the plain language of the statute, which addresses only wire communications "in interstate or foreign commerce."

2. There was no federal jurisdiction over Counts 3 and 4 prior to 2009. Prior to 2009, false information submitted to a mortgage brokerages was not covered by 18 U.S.C. § 1014 even if those brokerages then obtained FDIC-insured mortgages for the applicant. In 2006, when Shin committed the acts, there was no federal jurisdiction over the submission of false information to mortgage brokerages. Application of the Post-2009 version of 18 U.S.C. § 1014 to Shin's conduct in 2006 violated the Ex Post Facto Clause.

Ground Two: Because the Government introduced perjured testimony, failed to correct perjured testimony, and argued facts it knew to be untrue, Jong Shin's constitutional right to Due Process of Law was violated.

Ground Three (a)(1-6)

1. Defense counsel was ineffective for failing to seek to call Esther Zhu to the witness stand or, if she was unavailable, to seek a missing witness instruction. Zhu made a statement, turned over in 3500 material, that she sold mortgages to other banks as part of her employment with SMB and received a 1 point commission for so doing. Her testimony would have undermined the government's theory that Shin aided Zhu in submitting false information to Chase.

2. Counsel failed to argue lack of jurisdiction over the various counts of the Indictment, as in Point One[.]

3. Defense counsel was ineffective for failing to object to instructions on conspiracy to commit wire fraud.

4. Defense counsel was ineffective for

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