United States v. Mason-Hobbs
| Decision Date | 03 April 2013 |
| Docket Number | NO. 4:11-CR-151-A-1,NO. 4:13-CV-078-A,4:13-CV-078-A,4:11-CR-151-A-1 |
| Parties | UNITED STATES OF AMERICA v. CRYSTAL LaVON MASON-HOBBS |
| Court | U.S. District Court — Northern District of Texas |
Came on to be considered the motion of Crystal LaVon Mason-Hobbs ("movant") pursuant to 28 U.S.C. § 2255 to vacate, set aside, or correct sentence. Having reviewed the motion, movant's memorandum, the record, the government's response, and applicable legal authorities, the court concludes that none of the grounds has merit and the motion should be denied.
Movant pleaded guilty to one count of conspiracy to defraud the United States, in violation of 18 U.S.C. § 371. She received a three-level reduction for acceptance of responsibility, a two-level enhancement for running a tax return preparation business and deriving a substantial portion of her income from such business, a two-level enhancement for using sophisticated means, and a four-level enhancement for being a leader or organizer of afraudulent scheme involving five or more participants or being otherwise extensive. The total offense level equaled 29, and with a criminal history category of I, the guideline range was 87-108 months; however, the statutory maximum was 60 months. Movant was sentenced to 60 months imprisonment and a three-year term of supervised release, and was also ordered to make full restitution in the amount of $4,206,805.49. The court entered judgment on March 19, 2012, and movant did not appeal. Movant timely filed her section 2255 motion on January 31, 2013.
From around 2005-2009, movant was an owner and operator along with her husband, Sanford Hobbs ("Sanford"), of a tax preparation business where she, Sanford, and their employees prepared and filed approximately 788 fraudulent tax returns through unauthorized use of the IRS electronic transmitter identification numbers (EFINs), resulting in a $4,200,000.00 loss to the United States Treasury. Movant and her husband obtained EFINs, and when the EFINs were suspended because of movant and Sanford's fraudulent activity, they got Sanford's sister, Nishia Hobbs ("Nishia") to obtain an EFIN, and they continued their criminal activity. The business had at least five employees: Regina Murray, Nikita Busby, Angela Lee, Angela McGrady, and Rockale Gowans.
As part of the scheme, movant prepared fictitious Schedule C forms to obtain a greater refund, fabricating information such as self-employment wages, exemptions, and credits. She also took advantage of return anticipation loans ("RALs") being offered by banks. Once the RALs were approved, the banks deducted tax preparation fees from the RAL funds and deposited the fees into movant's account. The loan funds were given to the clients in debit card form, and movant accompanied the clients to the ATMs and demanded excess fees from the clients. Movant and her husband retained all of the profits from the excess fees.
Movant identified three grounds for relief in her motion, all asserting that her attorney was deficient during the sentencing process: (1) failure to object to a sentencing enhancement applied to movant for using sophisticated means to commit the offense; (2) failure to object to the enhancement applied to movant for her leadership role in the conspiracy; and (3) failure to request a downward variance. Memo. at 4-8.
After conviction and exhaustion, or waiver, of any right to appeal, courts are entitled to presume that a defendant stands fairly and finally convicted. United States v. Frady, 456 U.S. 152, 164 (1982); United States v. Shaid, 937 F.2d 228, 231-32 (5th Cir. 1991), cert. denied, 502 U.S. 1076 (1992). A defendant can challenge her conviction or sentence after it is presumed final on issues of constitutional or jurisdictional magnitude only, and may not raise an issue for the first time on collateral review without showing both "cause" for her procedural default and "actual prejudice" resulting from the errors. Shaid, 937 F.2d at 232.
Section 2255 does not offer recourse to all who suffer trial errors. It is reserved for transgressions of constitutional rights and other narrow injuries that could not have been raised on direct appeal and would, if condoned, result in a complete miscarriage of justice. United States v. Capua, 656 F.2d 1033, 1037 (5th Cir. Unit A Sept. 1981). In other words, a writ of habeas corpus will not be allowed to do service for an appeal. Davis v. United States, 417 U.S. 333, 345 (1974). Further, if issues "are raised and considered on direct appeal, a defendantis thereafter precluded from urging the same issues in a later collateral attack." Moore v. United States, 598 F.2d 439, 441 (5th Cir. 1979) (citing Buckelew v. United States, 575 F.2d 515, 517-18 (5th Cir. 1978)).
To prevail on an ineffective assistance of counsel claim, movant must show (1) that her counsel's performance fell below an objective standard of reasonableness and (2) that there is a reasonable probability that, but for her counsel's unprofessional errors, the result of the proceedings would have been different. Strickland v. Washington, 466 U.S. 668, 687 (1984). Both prongs of the Strickland test must be met to demonstrate ineffective assistance. Id. at 697. Further, "[a] court need not address both components of an ineffective assistance of counsel claim if the movant makes an insufficient showing on one." United States v. Stewart, 207 F.3d 750, 751 (5th Cir. 2000). "The likelihood of a different result must be substantial, not just conceivable," Harrington v. Richter, 131 S. Ct. 770, 792 (2011), and a movant must prove that counsel's errors "so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result." Cullen v. Pinholster, 131 S. Ct. 1388, 1403 (2011) (quoting Strickland, 466 U.S. at 686)). Judicial scrutiny of this type of claim must behighly deferential and the defendant must overcome a strong presumption that his counsel's conduct falls within the wide range of reasonable professional assistance. Strickland, 466 U.S. at 689.
Movant contends that her conduct did not involve the use of sophisticated means, and that her attorney should have objected to the application of the sophisticated means enhancement. The Application Notes to the United States Sentencing Guidelines ("USSG") Manual provide:
U.S. Sentencing Guidelines Manual § 2T1.4 cmt. n.3, background. The government points out that the Fifth Circuit has affirmed the application of sophisticated means enhancements in cases in which a defendant made a one-time purchase of an ethanol plant todefraud the government out of federal excise taxes, United States v. Powell, 124 F.3d 655, 666 (5th Cir. 1997), and in which a defendant's "use of multiple cashier's checks and his wife's separate bank account to obscure" his conduct justified the application, United States v. Clements, 73 F.3d 1330, 1340 (5th Cir. 1996). See also United States v. Toto-Nqosso, 407 F. App'x 687, 691-92 (4th Cir. 2011) ().
Movant's scheme in defrauding the government was as equally, if not more, sophisticated as the above-mentioned examples. Movant, with Sanford, owned and operated a tax preparation business that had three offices and at least five employees. Movant filed 788 fraudulent tax returns from tax years 2005-08 that caused a loss of $4,200,000.00, used EFINs registered to others, set up bank accounts to take advantage of RALs and have fees deposited into her accounts, and extracted excessive fees from clients. Movant argues that her conduct was "relatively simple" because it involved repetitive conduct over a period of time and was "merely typical" in a scheme to file false tax returns. The court disagrees, and concludes that movant'sconduct involved sophisticated means, the application of the enhancement was appropriate, and movant's counsel was not deficient for failing to raise what would have been a meritless objection.1 See Smith v. Puckett, 907 F.2d 581, 585 n.6 (5th Cir. 1990) ().
Movant contends that she should not have been considered a leader or organizer of the criminal scheme under USSG § 3Bl.l(a), and faults her attorney for failing to object to the application of the four-point enhancement applied for her leadership role. USSG § 3B1.1 calls for the court to increase a defendant's offense level by four points if "the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." Courts consider the following factors in determining whether a defendant qualifies as a leader:
(1) exercise of decision-making authority; (2) nature of participation in the commission of the offense; (3) recruitment of accomplices; (4) claimed right to a larger share of...
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