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November 26, 2002


The opinion of the court was delivered by: Louis H. Pollak, United States District Judge


In this § 2255 habeas action, Hitham Abuhouran (a/k/a Steve Houran), acting pro se, has raised five challenges to the 188-month sentence imposed upon him after he pled guilty in 1996 to, among other charges, four counts of money laundering and fifteen counts of bank fraud. The five points Mr. Abuhouran raises are as follows: (1) the indictment impermissibly relies upon a single transaction as the basis for charges of both bank fraud and money laundering; (2) assistance of counsel was ineffective because of the failure to raise point 1; (3) one of the counts in the indictment alleges no crime: it states merely that a check was written, not that any transaction actually occurred; (4) two upward adjustments in sentencing violated due-process rights enunciated by the Supreme Court in Apprendi; and (5) the grand jury that issued the indictment was empaneled for a time period greater than that allowed by Federal Rule of Criminal Procedure 6(g). Mr. Abuhouran's arguments were not raised all at once. Rather, points 1 and 2 appear in the original Petition Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence filed February 10, 2000 (Docket #428); point 3 appears in the Motion to Dismiss Indictment and/or Motion to Amend Motion to Vacate Sentence filed August 21, 2000 (Docket #437); point 4 appears in the Motion for Leave to File Supplement to Motion to Vacate, Set Aside, and Correct Sentence filed December 26, 2000 (Docket #438); and point 5 appears in the Motion for Leave to Amend § 2255 Motion filed May 4, 2001 (Docket #441).

After receiving Docket #428, this court referred Mr. Abuhouran's case to Magistrate Judge Angell for a Report and Recommendation. Judge Angell's Report and Recommendation (Docket #433), dated July 19, 2000, addresses points 1 and 2, the only issues that Mr. Abuhouran had raised at the time. Mr. Abuhouran filed objections to the Report and Recommendation on July 31, 2000 (Docket #434), which he supplemented with a supporting memorandum on August 21, 2000 (the memorandum apparently was not assigned a docket number, but the certificate of service was marked as filed by the clerk of court). In accordance with 28 U.S.C. § 636(b)(1), this court conducts a de novo review of the issues in the Report and Recommendation to which Mr. Abuhouran objected. Each of the five issues, including the three not addressed by Judge Angell, will be addressed here in turn.

Points 1 and 2

In his initial § 2255 submission (Docket #428), Mr. Abuhouran questions the adequacy of the indictment to which he pled guilty. Specifically, he asserts that Counts 8, 18, 27, and 31 (all alleging money laundering) impermissibly rely upon the same financial transactions as do, respectively, Counts 7, 16, 26, and 29 (all alleging bank fraud). Mr. Abuhouran points out that a key element of the crime of money laundering, as defined by 18 U.S.C. § 1956, is that a financial transaction involve the "proceeds" of unlawful activity. He argues that § 1956 contemplates two distinct acts underlying the crime of money laundering: (1) some sort of unlawful activity producing proceeds, and then (2) a financial transaction involving those proceeds. The United States charges that Mr. Abuhouran laundered the proceeds he received from the unlawful activity of bank fraud. The problem with the indictment, according to the Motion to Vacate Sentence, is that the government took a single check and used it as the basis to charge both bank fraud and laundering the proceeds of that same bank fraud.

This court is not without guidance on this issue. Mr. Abuhouran's brother Aktham (a/k/a Tony Houran), after being convicted by a jury for his involvement in the same fraudulent scheme to which petitioner Hitham pled guilty, appealed his conviction to the Third Circuit. A portion of the opinion dealt with Counts 26 and 27 — two of the very same counts from the very same indictment of which Hitham Abuhouran now complains — and held that:

Money laundering must be a crime distinct from the crime by which the money is obtained. United States v. Conley, 37 F.3d 970, 980 (3d Cir. 1994). The money laundering statute is not simply the addition of a further penalty to a criminal deed; it is a prohibition of processing the fruits of a crime or of a completed phase of an ongoing offense. Id. at 979. The check to Murphy [alleged in Count 27] was the same check referred to in the charge [alleged in Count 26] of abetting Steve Houran in the bank fraud involved in the Webster Avenue loans. It could be objected that the act charged as money laundering was not distinct from one of the acts charged as aiding and abetting bank fraud. This objection was not raised at trial; the error, if any, was therefore forfeited, and we review it under the criteria governing our exercise of review under Fed.R.Crim.P. 52(b). A majority of the court is of the opinion that it is sufficient under Conley that a distinct phase of the bank fraud have been completed before the act of money laundering was committed. The majority views the bank fraud which Steve Houran committed and of which the check Tony Houran wrote constituted proceeds, as having already been completed at the time Tony Houran wrote the check. Judge Noonan does not agree with this approach. In the light of the division of the court he does believe that the error, if any, does not meet the criteria set for the recognition of plain error by United States v. Olano, 507 U.S. 725, 730 (1993).

United States v. Abuhouran [Abuhouran I], 162 F.3d 230, 233-34 (3d Cir. 1998).

Mr. Abuhouran's theory makes a distinction without making a difference; ultimately, Abuhouran I and Conley control. As an initial matter, it must be emphasized that Charge 26 does not rely exclusively upon the check mentioned in Count 27 to support the bank-fraud allegation. A litany of financial transactions is alleged in Charge 26, which traces the flow of money through the Abuhourans' elaborate shell game. Mr. Abuhouran himself describes the movement of money as follows:

The Hourans had straw borrowers apply for real estate and construction loans at [Bank of Brandywine Valley ("BBV") the bank defrauded —] for properties located on Webster Avenue in Jersey City. When the loans were made, the proceeds were paid into [an account] at BBV, established by [Steve] Houran to collect the funds generated by the loans, which would ultimately total 2.6 million. This transaction actually concluded the execution of the bank fraud, since the money had been removed from the control of BBV and was available to [Steve] Houran for spending.
Houran then transferred 1.6 million out of the . . . account at BBV into the Petra Construction Co. account at First Fidelity Bank, Union City, N.J. This transaction, by [Steve] Houran alone, is clearly money laundering. However, the prosecutor chose not to denominate it as such in the indictment. Tony Houran then wrote a number of checks, totalling $890,000, on the Petra Construction account. [I]n Count 26, the prosecutor chose to denominate these transactions as still part of the execution of the bank fraud scheme. However, the prosecutor then singled out one of those checks . . . and charged this same transaction as money laundering in Count 27.

Memorandum of Law in Support of Objections to Magistrate Judge's Report and Recommendation at 9 (emphasis added and citations omitted).

As Mr. Abuhouran acknowledges, an act of bank fraud had been completed at the time BBV initially made the loan. See United States v. Gregg, 179 F.3d 1312, 1315 (11th Cir. 1999) ("Under 18 U.S.C. § 1344, [defendant] had completed the offense of bank fraud as soon as he fraudulently obtained credit from [the bank] in the form of a balance in a bank account."). The ill-gotten funds had already been tucked safely into the Abuhourans' various accounts before the drafting of the check mentioned in Count 27. That check, without question, involved the proceeds of illegal activity — no less so because the funds ...

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