Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-02039/USCOURTS-azd-2_08-cv-02039-0/pdf.json

Nature of Suit Code: 510
Nature of Suit: Prisoner Petitions - Vacate Sentence
Cause of Action: 28:2255 Motion to Vacate / Correct Illegal Sentence

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1 Citations to “CR __” are to the docket in the underlying criminal matter, United States

v. Jeanette Wilcher, CR-03-1098-PHX-EHC. Citations to “Tr. ___” are to the criminal trial

transcript filed in CR-03-1098-PHX-EHC. 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff/Respondent,

vs.

Jeanette B. Wilcher, 

Defendant/Movant. 

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No. CV-08-2039-PHX-EHC (LOA)

REPORT AND RECOMMENDATION

This matter arises on Movant’s Motion to Vacate, Set Aside, or Correct Sentence

Pursuant to 28 U.S.C. § 2255. (docket # 1) Respondent has filed a Response. (docket # 5) 

Movant has not replied and the deadline has passed. 

I. Procedural and Factual Background

A. Procedural History

On October 22, 2003, Movant was charged in the United States District Court,

District of Arizona, with one count of wire fraud (Count 1), three counts of promotional

money laundering (Counts 2-4), and three counts of transactional money laundering (Counts

5-7), in violation of 18 U.S.C. §§ 1343, 1956(a)(1)(A)(i) and 1957, respectively. (CR 11

) A

superseding indictment was filed on October 7, 2004. (CR 56) On Movant’s motion, the

district court severed Count 8, a wire fraud count, from the superseding indictment. (CR 55) 

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 On the government’s motion, Count 8 of the superseding indictment was subsequently

dismissed without prejudice. (CR 255) 

Movant’s case proceeded to trial. On April 14, 2006 a jury found her guilty of

Counts 1-7 of the superseding indictment. (CR 222) On November 13, 2006, the district

court sentenced Movant to 92-months imprisonment. (CR 248, 249) 

On November 16, 2006, Movant filed a timely notice of appeal. (CR 250) On

August 29, 2007, the Ninth Circuit affirmed Movant’s convictions and sentence. United

States v. Wilcher, 239 Fed.Appx. 398 (9th Cir. 2007) (unpublished). On December 21, 2007,

Movant filed a petition for writ of certiorari in the United States Supreme Court which was

denied on February 26, 2008. (docket # 1)

Thereafter, Movant filed the pending Motion to Vacate, Set Aside, or Correct

Sentence pursuant to 28 U.S.C. § 2255. (docket # 1) Movant presents the following claims:

(1) ambiguous language in the money laundering statute pursuant to which she was

convicted should be interpreted in her favor, in accordance with United States v. Santos, ___

U.S.___, 128 S.Ct. 2020 (2008); and (2) Movant was denied due process because the district

court failed to give the jury a special verdict form directing that, in order to convict her of

wire fraud, the jury must find that Movant specifically intended to defraud the victim,

Ms.Gillaspie, rather than that she merely intended to defraud someone. (docket # 1 at 4-5) 

B. Investment Fraud

Movant’s convictions for wire fraud and money laundering arise from her

scheme to lure investors into her non-existent trading program in medium-term bank notes

and her fraudulent use of investors’ money. Movant enlisted Robert Ponikvar and J.D.

Surber, through Ponikvar’s investment company named Sansea, Ltd. (“Sansea), to locate

investors for her program. (CR 283, Tr 4/6/06 at 210-14); United States v. Wilcher, 2007

WL 1571205, appellee’s opening brief. In January 1999, the victim, Connie Gillaspie, was

introduced to Ponikvar and Surber by her nephew, Rex Allen, Jr. (CR 284, Tr. 4/7/06) 

Gillaspie was convinced to invest $3.3 million in Movant’s program through Sansea, Ltd. 

(Tr. 4/6/06 at 217, 4/7/06 at 380) Ponikvar and Surber wired Gillaspie’s $3.3 million to

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Movant, who diverted $2,151,500 of Gillaspie’s money for her own use. (Tr. 4/6/06 at 228,

242; CR 286, Tr. 4/12/06 at 617-21, 633-36, 646-47)

C. Money Laundering

On January 25, 1999, after Sansea received Gillespie’s $3.3 million investment,

Sansea wired funds into Movant’s LFT Lewco account. (CR 283, Tr. 4/6/06 at 242) Before

Sansea wired Gillaspie’s $ 3.3 million investment to Movant’s Lewco account, Movant’s

account had a zero balance. (CR 286, Tr. 4/12/06 at 617-18) On January 27, 1999, Movant

wired $1.5 million of Gillaspie’s investment into her Wells Fargo bank account. (CR 286,

Tr. 4/12/06 at 617) On February 9, 1999 and March 11, 1999, Movant drafted $500,000 in

checks from the Lewco account made payable to herself or other entities under her control. 

(CR 286, Tr. 4/12/06 at 620) Monvant distributed Gillaspie’s investment funds to her own

bank accounts to pay credit cards and to purchase her Scottsdale, Arizona home out of

foreclosure. (CR 286, Tr. 4/12/06 at 620-21, 633-36, 646-47) Movant kept $2,151,500 of

Gillaspie’s $ 3.3 million investment for her personal use. (CR 286, Tr. 4/12/06 at 636-37) 

Movant distributed approximately $1,713,000 to Sansea, falsely characterized as investment

payments, who distributed payments to Gillaspie. (Tr. CR 286, 4/12/06 at 627-30, 632, 637-

38) Specifically, Sansea distributed $752,000 to Gillaspie. Other than the $752,000 paid to

her, Gillaspie did not receive any other refund of her investment. (CR 286, Tr. 4/12/06 at

637-38, 641-42) Movant did not invest any of Gillaspie’s $3.3 million in the investment

program. (CR 286, Tr. 4/12/06 at 621) 

Movant was charged in Counts 2-4 for promotional money laundering in

violation of 18 U.S.C. § 1956(a)(1)(A)(i), and Counts 5-7 for transactional money

laundering in violation of 18 U.S.C. § 1957. (CR 56) Counts 2-4 involved payments to

Sansea for their recruitment of the victim investor in Movant’s fraudulent investment

program. Counts 5-7 involved Movant’s withdrawal of the victim’s funds from Movant’s

bank account to purchase her Scottsdale home out of foreclosure.

/ / /

/ / /

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II. Analysis

In the pending § 2255 Motion, Movant raises two claims: (1) ambiguous

language in the money laundering statute pursuant to which she was convicted should be

construed in her favor; and (2) the district court violated Movant’s right to due process by

failing to give the jury a special verdict form. (docket # 1) Respondent asserts that both

claims lack merit. Respondent also argues that review of ground two is precluded because

(1) the Ninth Circuit either rejected this claim on appeal, or (2) Movant did not directly raise

ground two on direct appeal, and therefore, that claim is procedurally barred.

A. Money Laundering Statute

In Ground One, Movant argues that the Government did not prove that the

“proceeds” of the “specified unlawful activity” were “profits” as opposed to expenses or

“receipts,” which Movant argues the Supreme Court now requires in view of its recent

ruling in United States v. Santos, ___ U.S.___ , 128 S.Ct. 2020, 2027 (2008).

Counts 2, 3, and 4 of the indictment charged Movant with violating the money

laundering statute, 18 U.S.C. § 1956 (a)(1)(A)(i). (CR 56; CR 287 at 32, Tr. 4/13/06 at 720) 

Title 18 U.S.C. § 1956 (a)(1)(A)(i) prohibits conducting a financial transaction with the

proceeds of an illegal activity “with the intent to promote the carrying on of” additional

illegal activity. Id. With regard to Movant’s alleged violation of this statute, the district

court instructed the jury that it must find beyond a reasonable doubt that “[f]irst, the

defendant conducted a financial transaction involving property that represented the proceeds

of wire fraud. Second, the defendant knew the property represented the proceeds of wire

fraud.” (CR 287 at 32, Tr 4/13/06 at 720) 

Section 1956(a)(1)(A)(i) does not define the word “proceeds.” When statutory

terms are not otherwise defined, they are “generally interpreted in accordance with their

ordinary meaning.” BP Am. Prod. Co. v. Burton, 549 U.S. 84 (2006). Movant argues that

the ordinary definition of “proceeds” could be either “profits” or “receipts.” She argues that

the Supreme Court recently held that “proceeds” should be defined to mean “profits” and not

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“receipts.” Consequently, Movant argues that the Government failed to prove that her wire

fraud resulted in any profits, as opposed to merely receipts. (docket # 1) 

In Santos, the defendant was convicted of money laundering based on his role in

operating an illegal lottery. United States v. Santos, __ U.S. ___, 128 S.Ct. 2020 (2008). He

supervised the use of funds collected in the lottery to pay the salaries of those working

beneath him, as well as to pay the lottery winners. Santos, 128 S.Ct. at 2022-23. Santos was

convicted under 18 U.S.C. § 1956(a)(1)(A)(i), which prohibits conducting a financial

transaction with the proceeds of illegal activity “with the intent to promote the carrying on

of” additional illegal activity, which in Santos was the continued operation of the lottery. In

Santos, a plurality of the United States Supreme Court held that the term “proceeds” in the

money laundering statute means “profits” and stated that “a criminal who enters into a

transaction paying the expenses of his illegal activity cannot possibly violate the

money-laundering statute, because by definition profits consist of what remains after

expenses are paid.” Id. at 2027. Because Santos is a plurality decision, its holding is limited

to the more narrow ground on which Justice Stevens decided his concurrence. Santos, 128

S.Ct. at 2031. See Marks v. United States, 430 U.S. 188, 193 (1977) (stating that “[t]he

holding of the Court may be viewed as that position taken by those Members who concurred

in the judgment . . . on the narrowest grounds.”) Justice Stevens found that the “profits”

definition of “proceeds” is limited to money laundering cases involving gambling operations

like the one in that case. He explained that, “[i]n other applications of the statute not

involving such a perverse result [as in this case], I would presume that the legislative history

summarized by Justice Alito [that “proceeds” means “receipts”] reflects the intent of the

enacting Congress.” Id. at 2034 n. 7. Justice Stevens carved out an exception for gambling

operations in which “proceeds” means “profits,” although the rule is that “proceeds” means

“receipts.”

The Santos court limited its holding to the facts of that case, therefore, it only

applies where the predicate specified unlawful activity in a money-laundering case consists

of a gambling offense under 18 U.S.C. § 1955. Santos, 128 S.Ct. at 2031. Thus, in all other

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2

 Although the government refers to Movant’s § 2255 motion as successive, it argues that

the motion is precluded because the special verdict-form issue was decided previously on direct

appeal. (docket # 5 at 6) Because this is Movant’s first § 2255 motion, the government

incorrectly characterizes the motion as successive. See 28 U.S.C. § 2255.

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money-laundering cases, including this case, “proceeds” continues to mean “gross receipts.” 

See, United States v. Everett, 2008 WL 3843831, * 7 (D. Ariz., August 14, 2008); U.S. v.

Howard, 2009 WL 205649 (4th Cir., Jan. 29, 2009); (Bull v. United States, 2008 WL

5103227, * 8 (C.D.Cal., Dec. 3, 2008) (stating that “given Justice Stevens’ opinion that

‘proceeds’ means ‘profits’only for the purpose of money laundering funds from an illegal

gambling business, the Court cannot conclude that Santos announces a ‘new rule’ defining

the term ‘proceeds’ to mean ‘profits’ in all statutes.”).

This district has previously concluded that the holding in Santos is limited to

those money laundering cases where the predicate unlawful activity is gambling. Everett,

2008 WL 384381, * 7. Consistent with the prior holding in this district, the undersigned

concludes that Santos does not apply to this case where the specified unlawful activity is

wire fraud, not gambling. Accordingly, the Government was not required to prove that the

proceeds in this case were profits. 

B. Due Process Claim - Special Verdict Form

In her second ground for relief, Movant argues that the district court violated her

right to due process by refusing to give the jury a special verdict form requiring the jury to

find that Movant specifically intended to defraud Gillaspie, rather than to simply defraud an

unspecified victim. (docket # 1) This issue, presented using different language, was

decided adversely to Movant in her direct appeal from the judgment of conviction. 

Accordingly, Respondent asserts that review of Ground Two is precluded because it was

rejected on direct appeal.2

On direct appeal, Movant argued that the district court erred by instructing the

jury on the specific intent requirements of the wire fraud statute. United States. v. Wilcher,

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3

 Because the Court concludes that Movant raised the gravamen of her special-verdict

form-claim asserted in Ground Two on direct appeal, it need not reach Movant’s alternative

argument that review of Ground Two is precluded based on Movant’s failure to directly raise

her special-verdict-form claim on direct appeal. 

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239 Fed.Appx. 398, 399 (9th Cir. 2007). Movant specifically asserted that the jury should

have been instructed that, in order to convict her, it must find that she specifically intended

to defraud the victim, Ms. Gillaspie. See Appellant’s Opening Brief in United States v.

Wilcher, 2007 WL 111970, at ** 22-25. The Ninth Circuit rejected this claim and affirmed

Movant’s convictions. Wilcher, 239 Fed.Appx. at 399. 

In the pending § 2255 motion, Movant challenges the district court’s failure to

give the jury a special verdict form. Respondent argues that, although Movant did not raise

this exact claim on direct appeal, her jury-instruction challenge asserted essentially the same

issue. The Court agrees. Both on direct appeal and in the pending § 2255 motion, the

gravamen of Movant’s claim is that the jury was not advised - by a special verdict form or

by a specific jury instruction - that in order to convict Movant it must find that she

specifically intended to defraud the victim, Mrs. Gillaspie. (see Appellant’s Opening Brief

in United States v. Wilcher, 2007 WL 111970, at ** 22-25; docket # 1). Although framed

differently, both claims assert that the trial erred in failing to advise the jury that, in order to

convict Movant, it must find that she had the specific intent to defraud Ms. Gillaspie.3

 

As previously stated, the Ninth Circuit rejected this claim. “[W]hen a federal prisoner

presents a claim in a § 2255 petition that he has presented previously, the federal court

retains the jurisdiction to refuse to consider the claim on the basis that the prisoner is

abusing the writ.” Walter v. United States, 969 F.2d 814, 816 (9th Cir. 1992). See also

Battaglia v. United States, 428 F.2d 957 (9th Cir.1979) (stating that a section 2255

proceeding may not be used to relitigate issues which have already been raised on direct

appeal). In other words, because the issue raised in Ground Two was previously decided on

direct appeal, that claim is not reviewable in this subsequent § 2255 motion. See Walter v.

United States, 969 F.2d 814, 816 (9th Cir. 1992); United States v. Currie, 589 F.2d 993, 995

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(9th Cir. 1979); Odom v. United States, 455 F.2d 159, 160 (9th Cir. 1972). The fact that the

issue may be couched in different language is of no significance. Sanders v. United States,

373 U.S. 1, 16, 83 (1963). This Court is bound by the previous decision and declines to

again review this contention. Moreover, the ends of justice would not be served by

reconsideration of Movant’s claim raised in Ground Two. 

In accordance with the foregoing,

IT IS HEREBY RECOMMENDED that Movant’s Motion to Vacate, Set

Aside, or Correct Sentence Pursuant to 28 U.S.C. § 2255 (docket # 1) be DENIED. 

This recommendation is not an order that is immediately appealable to the Ninth

Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of 

Appellate Procedure, should not be filed until entry of the District Court=s judgment. The

parties shall have ten days from the date of service of a copy of this recommendation within

which to file specific written objections with the Court. See, 28 U.S.C. ' 636(b)(1); Rules

72, 6(a), 6(e), Federal Rules of Civil Procedure. Thereafter, the parties have ten days within

which to file a response to the objections. Failure timely to file objections to the Magistrate

Judge's Report and Recommendation may result in the acceptance of the Report and

Recommendation by the District Court without further review. See United States v. ReynaTapia, 328 F.3d 1114, 1121 (9th Cir. 2003). Failure timely to file objections to any factual

determinations of the Magistrate Judge will be considered a waiver of a party=s right to

appellate review of the findings of fact in an order or judgment entered pursuant to the

Magistrate Judge=s recommendation. See, Rule 72, Federal Rules of Civil Procedure.

DATED this 30th day of April, 2009.

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