United States v. Moates
| Decision Date | 22 January 2019 |
| Docket Number | Criminal No. 2:16-cr-20015-PKH-MEF-1,Civil No. 2:18-cv-02121-PKH-MEF |
| Parties | UNITED STATES OF AMERICA PLAINTIFF v. WILLIAM JACKSON MOATES, JR. DEFENDANT |
| Court | U.S. District Court — Western District of Arkansas |
Before 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.
On May 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).
Moates 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).
On 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"). (Id.).
An 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. (Id.).
On May 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).
The 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: (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, ¶ 19).
Moates' 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.1 (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).
The 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).
Chronister 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.
Moates 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 timing2, 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. 9-14).
Government's 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. 14).
The 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., p. 39).
The 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).
The 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).
Chronister argued that Moates "took the wrong path," but that "there was a meeting with family members of the victims3 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'...
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