United States v. Clay
| Decision Date | 02 August 2013 |
| Docket Number | No. 12-2893,12-2893 |
| Parties | United States of America Plaintiff - Appellee v. Alvin Clay Defendant - Appellant |
| Court | U.S. Court of Appeals — Eighth Circuit |
Appeal from United States District Court
for the Eastern District of Arkansas - Little Rock
Before COLLOTON, GRUENDER, and BENTON, Circuit Judges.
Alvin Clay appeals the district court's1 denial of his 28 U.S.C. § 2255 motion for post-conviction relief. On appeal, Clay contends that the district court used an incorrect standard to evaluate the effect of the Government's alleged use of perjuredtestimony during his underlying trial for wire fraud and money laundering. For the reasons discussed below, we affirm the denial of Clay's motion for post-conviction relief.
Clay was licensed as an attorney in Arkansas and also held a real estate agent's license, a real estate broker's license, and a contractor's license, in connection with which he owned Clay Construction Company. He was convicted of conspiracy to commit wire fraud in violation of 18 U.S.C. § 371 and four counts of money laundering in violation of 18 U.S.C. § 1957 for his role in a conspiracy to defraud the purchasers of five residential properties in Little Rock, Arkansas. The other charged conspirators were Raymond Nealy, who owned and operated Ideal Mortgage, Inc. and shared a suite of offices with Clay, and Donny McCuien, a manager for Burger King, whom Nealy employed as a loan originator.
In each of the five property transactions, which occurred between August 2002 and March 2003, Nealy arranged for an inflated appraisal of a residential property for sale. The conspirators would secure a naive purchaser for the property with the promise of a cash payment at closing and an assurance that the property soon would be resold or rented profitably, with no risk to the purchaser. Nealy then used falsified documents to arrange a loan for the purchase at the inflated appraisal amount, rather than the seller's actual asking price. The conspirators purloined the amount of the loan in excess of the seller's asking price by sending the closing agent an invoice for that amount from Clay Construction Company, ostensibly for renovation work requested by the seller. No renovation work was requested or performed for any of the five properties, but because each seller received his or her full asking price, no seller questioned the appearance of this additional line item on the seller's side of the closing statement. Likewise, because the Clay Construction line item was paid from funds nominally disbursed to the seller, no lender or purchaser raised any questions.In total, closing agents paid Clay Construction more than $130,000 from these five property sales.
It is undisputed that, for each of the five property transactions, Clay received a check from the closing agent and deposited it into a Clay Construction bank account. From the first such check, Clay kept $10,000 and paid the remainder of nearly $24,000 to Nealy's mother. Notably, rather than paying the $24,000 in one lump sum, Clay used three cashier's checks each in an amount less than $10,000. For the remaining four checks, Clay kept a portion and distributed the remainder, totaling more than $80,000, to a corporation organized by McCuien named "McCuien Property Management and Construction, Inc." McCuien testified that he further divided that more than $80,000 among Nealy, Clay, and himself, although Clay denied receiving a further share of those funds from McCuien.
The scheme was uncovered when a tax preparer hired by Clay to prepare an IRS Form 1099 for the disbursements to McCuien notified the FBI of concerns about the legitimacy of the transactions. McCuien reached a plea deal, and the district court decided to sever the trials of Clay and Nealy. At Clay's trial in late May and early June 2008, Clay's theory of defense was that he innocently rented his contractor's license to Nealy and McCuien, believing in good faith that McCuien actually was renovating each property, and that Clay's retained portion of each payment from a closing agent merely constituted the fee for renting his license. Clay testified that Nealy had represented to him, and Clay had believed, that McCuien had experience in construction and contracting work. On both direct and cross-examination, however, McCuien repeatedly testified that, even after having formed a corporation named McCuien Property Management and Construction in 2002, he never held himself out to the public as a contractor, that he never engaged in either construction work or real estate transactions, and that Clay was aware no actual renovation work would ever take place. The jury returned a guilty verdict.
Clay moved for a new trial or, in the alternative, judgment of acquittal on the basis that his counsel was ineffective for, inter alia, failing to develop impeachment evidence that would have shown that, at the time McCuien testified, he in fact had extensive experience as a contractor and had participated in previous real estate transactions. At a two-day hearing on the motion, concluding in January 2009, Clay introduced evidence that McCuien had obtained his own contractor's license in 2006. In addition, one of McCuien's former girlfriends, who had not testified at trial, stated that McCuien openly claimed in late 2002 to buy, renovate, and sell homes as a side business. Another former girlfriend, April Flowers, stated that McCuien had convinced her to be a purchaser, and defrauded her, in four real estate transactions in 2003. Flowers also stated that the FBI had interviewed her in 2007 and that she had been subpoenaed to appear, but never called to testify, at Clay's trial. Ronald Smith stated that he worked on a six-person construction crew for McCuien that renovated nine houses beginning in the spring of 2006. Clay also introduced additional testimonial and documentary evidence of McCuien's participation in various other real estate sales in 2006 and 2007. The district court denied the motion for new trial or judgment of acquittal in June 2009, holding that the new evidence presented at the hearing was cumulative to evidence of McCuien's dishonesty that was presented at trial. We affirmed the denial of the motion on direct review. See United States v. Clay, 618 F.3d 946, 952 (8th Cir. 2010) (per curiam).
Meanwhile, shortly after the district court hearing on Clay's motion for new trial, the Government reached an agreement with Nealy that resulted in his guilty plea to a reduced charge of misprision of a felony. At Nealy's change-of-plea hearing, the district court questioned the reduced charge:
Clay timely filed this § 2255 motion in February 2012, alleging, among other claims for relief, that his conviction was obtained through the use of perjured testimony from McCuien and that the Government knew, or should have known, that McCuien perjured himself.2 Soon after Clay filed his motion, the district court sent a letter to Clay's counsel, with a copy to the Government and the "Court File," disclosing an out-of-court conversation between the district court and theGovernment after direct appeals were exhausted in all cases related to the conspiracy. In that conversation, the Government confirmed that it had changed its evaluation of Nealy's case because "the prosecutors had learned that Donny McCuien had lied to them."3
The district court nevertheless denied relief on all Clay's § 2255 claims. With respect to the false testimony claim, the court found no need to decide whether the Government had used perjured testimony and knew or should have known it was perjured, holding that in any case Clay could not show prejudice because there was "no reasonable likelihood that the perjured testimony would have affected the jury's verdict." The district court granted a certificate of appealability solely with respect to the false testimony claim.
"On appeal from a denial of a 28 U.S.C. § 2255 motion, we review the district court's legal conclusions de novo and its factual findings for clear error." Morelos v. United States, 709 F.3d 1246, 1249 (8th Cir. 2013).
For purposes of this analysis, we assume without deciding that the Government used perjured testimony and knew or should have known it was perjured. Clay argues that the district court misapplied the standard for assessing prejudice to the defendant from the use of false testimony. The Supreme Court has established that, for cases under direct review, "a conviction obtained by the knowing use of perjured testimony is fundamentally unfair, and must be set aside if there is any reasonable likelihoodthat the false testimony could have affected the judgment of the jury." United States v. Agurs, 427 U.S. 97, 103 (1976) (footnote omitted). According to Clay, the district court incorrectly assessed "reasonable likelihood" in this case by...
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