United States v. Nathan, CRIMINAL ACTION NO. H-05-226-7

• Decision Date: 04 January 2012
• Docket Number: CRIMINAL ACTION NO. H-05-226-7,CIVIL ACTION NO. H-10-1639
• Parties: UNITED STATES OF AMERICA, Plaintiff-Respondent, v. IGBANIBO NATHAN, Defendant-Movant
• Court: U.S. District Court — Southern District of Texas

UNITED STATES OF AMERICA, Plaintiff-Respondent,

v.IGBANIBO NATHAN, Defendant-Movant

CRIMINAL ACTION NO. H-05-226-7

CIVIL ACTION NO. H-10-1639

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

Dated: January 4, 2012

MEMORANDUM AND RECOMMENDATION

Before the Magistrate Judge in this federal habeas corpus proceeding pursuant to 28 U.S.C. § 2255 is Movant Igbanibo Nathan's § 2255 Motion to Vacate, Set Aside or Correct Sentence (Document No. 351),¹ and the United States' Response and Motion to Dismiss Movant's § 2255 Motion (Document Nos. 363, 364). After reviewing Movant's § 2255 Motion, the Government's Response and Motion to Dismiss, the record of the proceedings before the District Court in the underlying criminal case and on appeal, and the applicable case law, the Magistrate Judge RECOMMENDS, for the reasons set forth below, that the Government's Motion to Dismiss (Document No. 364) be GRANTED, and that Movant Igbanibo Nathan's § 2255 Motion (Document No. 351) be DENIED.

I. Procedural History

Movant Igbanibo C. Nathan ("Nathan"), who is currently in the custody of the United StatesBureau of Prisons, is seeking federal habeas corpus relief under 28 U.S.C.§ 2255. This is Nathan's first attempt at § 2255 relief.

On May 18, 2005, Nathan was charged by Indictment with conspiracy to commit bank fraud in violation of 18 U.S.C. § 371 (Count 1), conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h) (Count 2), aiding and abetting bank fraud in violation of 18 U.S.C. §§ 1344 and 2 (Count 3), and money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(I) (Counts 4-7). (Document No. 1). Also charged in the Indictment were Noman Tabani, Mehmood Nazarani, Faisal Saeed Khan, Ahmed Shah, Maged M. Abuzaid, and Yerisoibi Florence Hamilton. On February 20, 2007, Nathan was found guilty by jury verdict on all counts charged in the Indictment. (Document No. 179).

Prior to sentencing, a pre-sentence investigation report ("PSR") was prepared. (Document No. 214). Pursuant to the PSR, Nathan's advisory guideline sentencing range was calculated as follows: (1) Nathan had a base offense level of 22 under U.S.S.G. § 2S1.1(a)(1). (2) Because Nathan had been convicted under 18 U.S.C. § 1956, his offense level was increased by 2 levels pursuant to U.S.S.G. § 2S1.1(b)(2)(B). (3) With an adjusted offense level of 24, and a criminal history category if I, he had an advisory guideline sentencing range of 51 to 60 months. On July 13, 2007, Nathan was sentenced to a total term of imprisonment of 60 months, to be followed by a 3 year term of supervised release, a special assessment of $700.00, and a fine of $3,000. (Document No. 217, Transcript of Sentencing Hearing, Document No. 278, pp. 8-10). Judgment was entered on July 25, 2007. (Document No. 223). With respect to the length of Nathan's sentence, Judge Harmon stated:

Igbanibo C. Nathan is before the Court as a result of his convictions for conspiracy to commit bank fraud, conspiracy to commit money laundering, and aiding and abetting money laundering. He has no prior criminal history.

Regarding the instant offense, the defendant, along with his wife and other co-conspirators in this case, were involved in a scheme to fraudulently secure more than $5 million in loans from federally-insured financial institutions which were guaranteed by the Small Business Administration.

Based on a preponderance of the evidence, this defendant is responsible for a total intended loss of $987,611. His abuse of the Small Business Administration was selfishly motivated by economic factors. His role is sanctioned by offense level increases. Of significance is his failure to truthfully testify at his and co-conspirator's trial. His guideline range is 51 to 63 months.

Considering the totality of factors, a sentence at the high end of the guideline range, 60 months, appears to be sufficient to satisfy the sentencing objectives under the guidelines, including the need to promote respect for the law. I have considered guidelines and find that a sentence within those guidelines is consistent with and takes into account the purposes of 18 United States Code, Section 3553(A). (Document No. 278, Transcript of Sentencing Hearing, pp. 7-8).

Nathan appealed his conviction to the Fifth Circuit Court of Appeals. Unpersuaded by the arguments raised by Nathan, the Fifth Circuit affirmed his conviction. (Document Nos. 316, 317). The Fifth Circuit wrote:

Igbanibo Nathan and Yerisoibi Hamilton were convicted of multiple counts of bank fraud and money laundering in connection with a land flip scheme. See United States v. Sallee, 984 F.2d 643, 644 n.1 (5th Cir. 1993) (providing a detailed example and explanation of a generic land flip scheme). Hamilton and Nathan were the escrow agent and the "hard money" lender, respectively, for this land flip. The district court sentenced Nathan to sixty months imprisonment and three years supervised release. Hamilton was sentenced to ninety-six months imprisonment and five years supervised release. They now appeal their convictions, and Nathan appeals his sentence. For the reasons stated below, we AFFIRM.

Nathan and Hamilton both acknowledge that their services were used in a scheme to defraud Banco Popular. They argue, however, that the Government did not prove that they had the knowledge and specific intent to commit the bank fraud and money laundering counts with which they were charged. Sufficiency of the evidence supporting a conviction is viewed in the light most favorable to the jury verdict, andthis court determines only whether "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Sprick, 233 F.3d 845, 852 (5th Cir. 2000) (internal quotation marks omitted). At trial, the Government introduced evidence that Hamilton had altered documents during the closing, that Nathan had instructed lenders to make out checks to a third party, that both appellants had been involved with similar transactions in the past, and that Appellants profited from the disbursement of escrow funds at closing to their jointly-owned companies. Based on the strength and nature of this and other circumstantial evidence described in the record, it was reasonable for the jury to infer that Appellants knew of and had the specific intent to commit the charged crimes.

Nathan and Hamilton also objected to the "deliberate ignorance" instruction given to the jury, arguing that it did not require the jury to find that both of them possessed subjective awareness of the illegality. Because they did not object at trial, this court reviews for plain error. The instruction allowed the jury to find that the defendants had knowledge if jurors found that "the defendant deliberately closed his eyes to what would otherwise have been obvious to him" or "deliberately blinded himself to the existence of a fact." This court has noted that these types of instructions should rarely be given, but can be justified where "a defendant claims a lack of guilty knowledge and the proof at trial supports an inference of deliberate indifference." United States v. Bieganowski, 313 F.3d 264, 289 (5th Cir. 2002) (internal quotation marks omitted). Given the facts presented at trial, including the evidence that Appellants had participated in other similarly-executed land flip transactions, the Appellants cannot establish that the Court's use of this instruction was a marked departure from our past cases. See, e.g., United States v. Lara-Velasquez, 919 F.2d 946, 952 (5th Cir. 1990).

Nathan appeals the admission of evidence and the prosecutor's closing argument regarding his immigration status. Because Nathan did not request a limiting instruction or object, we review for plain error only. Nathan had the burden of establishing that allegedly improper remarks in the closing argument were substantial and cast serious doubt on the correctness of the jury's verdict. United States v. Mares, 402 F.3d 511, 515 (5th Cir. 2005) (citing United States v. Virgen-Moreno, 265 F.3d 276, 290 (5th Cir. 2001)). Nathan also had to show that improper evidence was introduced and that "the need for [a limiting] instruction [was] obvious and the failure to give it [was] so prejudicial as to affect substantial rights of the accused." United States v. Waldrip, 981 F.2d 799, 805 (5th Cir. 1993) (internal quotation marks omitted). On direct examination, Nathan described his marriage and reasons for coming to the United States. Hamilton and Nathan were both natives of Nigeria, married each other in the late 1970's, came to the United States in 1982, divorced in 1994, remarried American citizens, divorced those citizens in 2000 or 2001, gained American citizenship in 2001 , and remarried one another in 2001. Even while divorced, they continued to have a close relationship. Nathan worked down the hallfrom Hamilton, co-owned two businesses with her, and recommended her to be the escrow agent for this transaction. The relationship between Nathan and Hamilton, therefore, was central to the question whether they had knowledge of the conspiracy, and any error was invited by Nathan's statements on direct examination. See United States v. Tullos, 868 F.2d 689 (5th Cir. 1989).

Finally, Nathan argues that the district court erred when it assessed the loss for sentencing purposes using the purchase price of the collateral in 1998 instead of a 2000 bank appraisal. He did not object at the time of sentencing and therefore, this court reviews for plain error. The Application Note 3(E)(ii) to U.S.S.G. § 2B1.1 states that any loss amount shall be reduced by "the fair market value of the collateral at the time of sentencing" if the collateral has not been disposed of by that time. At the time of sentencing in 2007, there is no evidence that the property had been sold and no current appraisal was presented.

Under plain error review, the error must be obvious and "evident from a plain reading

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