2010 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 8-25-2010 

# Hith am Abuhour an v

. J. Grondol sky P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 09-3162

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a nova . e du/thir dc ir c uit_2010

Thi s de c i sion i s br ou ght t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a nova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2010 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a nova U nive r sity S choo l of L a

w Di git al Reposit ory

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi l l a nova . e du . Re c omme nde d C it at ion " Hith am Abuhour a n v

. J . Gr ondo l sk

y " (2010). 2010 D e cisio n s . P ape r 712. http://d i git alc ommon s .l a

w . vi l l a nova . e du/thir dc ir c uit_2010/712NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N o. 09- 3162 HI T HAM ABUHOU RA N, A p p e llan t, v. WARDE N J . GR ONDOL S KY

N o. 09- 3244 AKT HAM ABUHOU RA N, A p p e llan t, v. CH RI STOPHER M ELLON EY

O n A p p e a l f

ro m th e U n ited S tate s D istric t C o u rt fort he D i s t r i ctof N ew J er s ey ( D . C . N os . 08- cv- 4379, 08- cv- 4838) D i stri ctJudg e: H on . D i ckinson R . D ebev ois e

### Ho no ra ble J . W il li am

Ditt er , Senior Dis tric t Court Judg e for the East er

n D is tric t * 

### of Pe nns yl vani a , s i tt i ng by de s i gnat i on.

- 2- S u b m itted U n d er T h ir d C ir cu itL . A . R . 3 4 . 1 (a),

J ul y16 , 2010 B e f o re : F U E N T E S a n d V A N A S K IE , C i r cui tJudges a n d DI TT ER, D is tr i ct

Judge . * ( O pi ni on Fi l ed: A ugus t25, 2010) OPI NI ON O F THE COURT

F U E N T E S , C i r cui tJudge : B a se d o n th e ir in v o lv e m e n t in a sc h e m e to f ra u d u len tlyo b tain o v e r $ 9 m ill io n in l oans fr om t he B ank of the B r andyw i ne V al l ey , H i t ham A buhour an and A kt ham A buhour an w er e convi ct ed of numer ous char ges i ncl udi ng bank fr aud and money l aunder i ng. Fol l ow i ng t he Supr eme C our t ’ s deci s i on i n U ni t ed Stat es v. Sant os , 55 3 U. S. 507, 128 S. C t . 2020 ( 2008) , t heys oughtperm i s s i on t o fi l e s ucce s s i ve mot i ons pur s uant t o 28 U . S. C . § 2255 t o chal l enge thei rconvi ct i ons form oneyl aunder i ng. W e deni ed the r eques tbutconcl uded that , as t heycl ai m ed thatt heyw er e bei ng det ai ned forconductt hat had s ubs equent l ybeen r ender ed non- cr i m i nal byan i nt erveni ng Supr eme C our tdeci s i on, th e yc o u ld f

ile h a b e a s p e titio n s p u rs u a n t to 2 8 U .S .C . § 2 2 4 1 . S e e In re D o rs a in v il , 119 F. 3d 245, 252 ( 3d C i r . 1997) .

### Th e Dis tric t Court had j uris diction und er

28 U.S.C. § 2 24 1. Th is Co urt has 1 

### juri sdic ti onpurs uant to 28 U.S.C. §§ 12 91 , 225 3. Weexerci seplenar y re view ov er

a d istrict co urt’s d en ial o f

h ab eas co rp u s relief

. Vega v. Un ited States , 493 F. 3d 310, 314 (3 dC ir. 2 0 0 7 ). We rev iewth e d istrict co urt’s f actu al f in d in g s f o r clear erro r. I

d.

- 3- I n t hei r§ 2241 pet i t i ons , t heyar gued thatundert he i nt erpr et at i on of the fe der al m oneyl aunder i ng s t atut e s etfor t h i n Sant os , t heyw er e i m pr oper l yconvi ct ed of money l aunder i ng. Speci fi cal l y , t heyr el i ed on Sant os fort he pr opos i t i on t hatt r ans act i ons t hat m e re lyp a ye x p e n se s o f a n u n law f

u l ac tiv ityd o n o t co n stitu te “ p ro c e e d s” o f th a t ac tiv ity and thus do notm eett he def i ni t i on of m oneyl aunder i ng. T heycont ended thatt he paym ent s char ged as m oneyl aunder i ng i n t hei rcas e w er e expe ns es of the bank f r auds and n o t pro fit s fro m the b an k fra u d s an d , there fo re, no t m o n eylaun d ering . T h e D istri ct C o u rt re jec ted th is a rg u m e n t, ho ld in g th a t th e p a ym e n ts a t issu e w e re p ro f its a n d a p ro p e r b a sis f o rt h e mo n e yl a u n d e r i n g c h a r g e s . F o rt h e r e a s o n s s t a t e d b e l o w, we wi l l a f f i r m. 1 

### I. Be c aus e we wri t e pri m ari l y for the part i e s , we onl y

di s c us s the fa c t s and proceedi ng s t o the exte nt nece ss ar y fo r the re soluti onof

the c as e. I n 1995, H i t ham A buhour an ( “St eve H our an”) and A kt ham A buhour an ( “Tony H o u ra n ” ) w e re n a m e d in a 5 7 -c o u n t In d ictm e n t alle g in g a sc h e m e to f ra u d u len tlyo b tain over$9 m i l l i on i n l oans fr om t he B ank of the B r andyw i ne V al l ey( “B B V ”) . T hi s amount e x c e e d e d B B V ’s c a p ital, an d th e b a n k c o llap se d . T h e c h a rg e s a g a in st D e f e n d a n ts i ncl uded bank f

r aud, i n vi ol at i on of 18 U . S. C . § 1344, and “pr om ot i on” money

### - 4-

l aunder i ng, i n vi ol at i on of § 18 U . S. C . § 1956( a) ( 1) ( A ) ( i ) . St eve H our an w as char ged w i t h fi ft een c ount s of bank f r aud and f

ourcount s of m oneyl aunder i ng; T onyH our an w as char ged w i t h fourcount s of bank f r aud and one countof m oneyl aunder i ng. E a c h o f th e c o u n ts o f

m o n e yla u n d e ri n g c o rr e s p o n d e d to a c o u n t o f b a n k f ra u d . Speci fi cal l y , eac h m oneyl aunder i ng countconce r ned a s i ngl e che ck thatal l egedl yus ed t he pr ocee ds of a ba nk fr aud s cheme t o pr om ot e thats cheme. Forexampl e, C ount16 char ged D efe ndant s w i t h obt ai ni ng a $350, 000 l i ne of c r edi tfr om B B V fort he us e of H our an Pl aza A s s oci at es bym i s r epr es ent i ng t he purpos e of the l oan. I tal l eged that D efe ndant s s t at ed thatt he funds w oul d be us ed t o r efurbi s h a bui l di ng ow ned byH our an P laza A sso ciates w h en the b u il d ing h ad alread yb ee n ref u rbish ed an d the f

u n d s w ere actual l yt o be us ed forD efe ndant s ’ per s onal needs and fort hei rbus i nes s , H our an C ons t ruct i on C om pany . A ft erobt ai ni ng t he funds , D efe ndant s and thei rbr ot her , A dham A buhour an ( “A dam H our an”) , engage d i n a s er i es of tr ans act i ons ; i n one, A dam H our an w r ot e a c heck f

or$50, 000, pay abl e t o H our an C ons t ruct i on C om pany . T hi s t r ans act i on w as char ged as m oneyl aunder i ng i n C ount18. St eve H our an pl eade d gui l t yt o al l char ges agai ns thi m and w as s ent ence d t o 188 m ont hs ’ i m pr i s onm ent , fi ve y ear s of s upervi s ed r el eas e, and r es t i tut i on i n t he amount of $ 6 ,9 1 7 ,2 4 6 . T o n yH o u ra n p ro c e e d e d to trial a n d w a s c o n v icte d o f a ll ch a rg e s a g a in st h im s a v e o n e c o u n to f

p e r j u r ya n d o n e c o u n to f

i n t e r s t a t e t r a n s p o r t a t i o n o f s t o l e n p r o p e r t y . He w as s ent ence d t o 109 m ont hs ’ i m pr i s onm ent , fi ve y ear s of s upervi s ed r el eas e, and

### - 5-

r es t i tut i on i n t he amountof $1, 860, 477. In 2 0 0 1 , D e f

e n d a n ts w e re n a m e d in a n e w in d ictm e n t th a t ch a rg e d th e m w ith addi t i onal fr auds . I n par t , t he 2001 i ndi ctm ental l eged thatD efe ndant s engage d i n a sc h e m e to d e f

ra u d six U n ited S tate s b a n k s o f $ 2 .5 m ill io n th ro u g h th e u se o f c o u n ter f e it c h e c k s, to h a v e th a t m o n e yw ire d to Jo rd a n , an d to f lee th e U n ited S tate s. O n e o f th e six b a n k s , P N C B a n k , w ir e d $ 1 8 5 ,0 0 0 to a n a c c o u n t in T o n yH o u ra n ’s n a m e in J o rd a n . S tev e H o u ra n p led g u iltyto c o n sp ira c ya n d w a s s e n ten c e d to 6 0 m o n th s’ im p riso n m e n t, w i t h 24 m ont hs t o run cons ecut i vel yt o hi s ear l i ers ent ence . A tpr es ent , hi s pr oj ect ed r el eas e dat e i s Sept ember13, 2012. T onyH our an l i kew i s e pl ed gui l t yt o cons pi r acyand w as i ni t i al l ys ent ence d t o 60 m ont hs ’ i m pr i s onm ent , w i t h 24 m ont hs t o run cons ecut i vel y . I n excha nge fort he G o v e rn m e n t’s re c o m m e n d a tio n o f a 2 4 -m o n th se n ten c e , T o n yH o u ra n a g re e d to cooper at e i n t he r etur n of the $185, 000 t o PN C B ank. B yt he t i m e of s ent enci ng, t he funds had noty etbeen r etur ned, and the G overnm entr ecomm ended that42 m ont hs of the 60- m ont h s ent ence be s erved cons ecut i vel y . T he D i s t r i ctC our ti m pos ed the r ecomm ended s ent ence . T her eaf t er , PN C B ank r etr i eved the funds , and the G overnm ent fi l ed a mot i on pur s uantt o Feder al R ul e of Cri m i nal Pr ocedur e 35 r eques t i ng t hatt he sen tenc e b e re d u ce d so that o n ly2 4 m o n ths w o u ld ru n co n sec u ti v ely . T h e D istri ct C o u rt gr ant ed the mot i on. T onyH our an has s erved the ent i r etyof thi s t erm of i m pr i s onm entbut r emai ns on s upervi s ed r el eas e.

### - 6-

I n 2008, t he Supr eme C our tdeci ded Sant os i n a di vi ded opi ni on. A ti s s ue i n t he cas e w as t he meani ng of the w or d “pr ocee ds ” as i ti s us ed i n t he fe der al m oney l aunder i ng s t atut e, 18 U . S. C . § 1956( a) ( 1) ( A ) ( i ) . T he conduc tchar ged as m oney laun d ering w as p ay m en ts bythe o p era tor o f a n il lega l l o tt eryto h is w inn ers a n d run n ers o u t o f th e re c e ip ts f

ro m th e lo ttery. A p p ly in g th e ru le o f len ity , a f

o u r-J u stic e p lu ra lity c o n c lu d e d th a t th e ter m “ p ro c e e d s” in th e m o n e ylau n d e rin g sta tu te m e a n t p ro f its a n d n o t, as th e G o v ern m en t argu ed , rec eipts. 1 2 8 S . C t. at 20 2 5 . A d o p ti n g the G o v ern m en t’ s i nt erpr et at i on w oul d, i n t he w or ds of the pl ur al i t y , cr eat e a “ m er gerpr obl em. ” I d. at 2 0 2 6 . “If

‘p ro c e e d s’ m e a n t ‘re c e ip ts,’ n e a rlye v e ryv io latio n o f th e ill e g a l-lo ttery statu te w oul d al s o be a vi ol at i on of the money - l aunder i ng s t atut e, beca us e pay i ng a w i nni ng bet t ori s a tr ans act i on i nvol vi ng r ece i pt s t hatt he def endanti nt ends t o pr om ot e the carr y i ng on of the l ot t ery . ” I d. J us t i ce St evens w r ot e an opi ni on concurr i ng i n t he j udgm ent . I n hi s vi ew , t he w or d “pr ocee ds ” i n t he moneyl aunder i ng s t atut e coul d t ake o n d if f e re n t m e a n in g s d e p e n d in g o n th e s p e c if ie d u n la w f

u l a c tiv ity a t is s u e . I

d. a t 2 0 3 1 . W ith re sp e c t to ill e g a l g a m b lin g , the leg isla tiv e h isto ryw a s s ilen t o n th e a p p ro p ria te m eani ng of “pr ocee ds , ” and the cons equenc es of appl y i ng a “gr os s r ece i pt s ” def i ni t i on w oul d be “pe r ver s e. ” I d. at20 32 . T hu s, Just i ce S t even s agreed t hat “pr oceed s” m ust m e a n “ p ro f

its ” in th e c o n te x t o f

ille g a l g a m b lin g . I

d. at2033–34. T he pl ur al i t yand J us t i ce St evens di s agr eed, how ever , abouthow t o r econc i l e the tw o opi ni ons t o det erm i neA ft ert he dec i s i on i n Sant os , C o n g re ss a m e n d e d th e m o n e ylau n d e rin g sta tu te to 2 defi ne “pr ocee ds ” as “anypr opert yder i ved fr om orobt ai ned orr et ai ned, di r ect l yor i ndi r ect l y , t hr ough s om e form of unl aw ful act i vi t y , i ncl udi ng t he gross recei pts of s uch ac ti v ity . ” F rau d E n fo rce m en t and R ec o v eryA ct of 2 0 0 9 , P u b . L . N o . 1 1 1 -21 , § 2 (f)(1), 1 2 3 S ta t. 1 6 1 7 , 1 6 1 8 (c o d if ie d a s a m e n d e d a t 1 8 U .S .C . § 1 9 5 6 (c )( 9 )) (e m p h a s is a d d e d ). T h u s , Sant os is in a p p lica b le to a n yc a se c h a rg e d u n d e r th e n e w v e rsio n o f th e sta tu te. A ll par t i es i n t he i ns t antcas es conce de, how ever , t hatt he ca s es m us tbe dec i ded bas ed on the p r i o rv e r s i o n o f

t h e s t a tu t e , a s i n t e rp r e t e d b y Sant os .



### - 7- th e u lti m a te h o ld in g o f

th e C o u rt. 2 I n l i ghtof Sant os , St eve H our an as ked perm i s s i on t o fi l e a s ucce s s i ve mot i on p u rs u a n t to 2 8 U .S .C . § 2 2 5 5 to c h a lle n g e h is 1 9 9 5 c o n v ic tio n f o r m o n e yla u n d e ri n g . W e d e n ied th is re q u e st o n th e b a sis th a t Sant os di d nots etfor t h a new rul e of c ons t i tut i onal law ap p li ca b le t o ca ses o n co ll ateral rev iew . T h e G o v ern m en t ack n o w ledg ed , h o w ev er, that u n d er In re D o rs a in v il , t h e Ho u r a n s c o u l d p r e s e n tp e t i t i o n s p u r s u a n tt o 2 8 U. S . C. § 2241 i n t he di s t r i cti n w hi ch theyw er e conf i ned, t he D i s t r i ctof N ew J er s ey . Fol l ow i ng a hea r i ng, t he D i s t r i ctC our tdi s m i s s ed both pet i t i ons w i t h pr ej udi ce, hol di ng t hatt he Ho u r a n s d o n o tb e n e f

i tf r o m Sant os 

### . II. On a ppe a l , the Hour ans m ake the fol l owi ng argum e nt s : ( 1) the tr ans a c t i ons c harge d a s m one y

l aunde ri ng we r e e xpe ns e s of the bank fr auds and not pr ofi t s , and thus un der Santos , they

ar e a ct ually inno ce nt of

m on ey la un deri ng ; and(2) the Distri ct Co urt e rr e d i n c onc ludi ng that

the tr ans a c t i ons we r e not ne c e s s ary

t o pr om ot e the c ommi s s i on o f th e b ankf

rau d s an dth at, th eref

o re, th ere w as n o “m erg er p ro b lem .”

### - 8-

Inanex ten siv e writteno p in io n , th e D istrict C o urt caref u lly an dth o ro u g h ly consider ed the c on te ntions that the Hourans ra is e i n this a pp ea l. Af

te r a com plet e r evie w of the r ec ord andthe parti es ’ argum ents , we find n o b as is fo r dis turbing the Distri ct C o urt’s ru lin g . T h eref

o re, w e w ill af

f irm th e D istrict C o urt’s d ismissal o f th e H o uran s’ habeas peti ti on s s ub st anti al ly fo r the re as on s s et

fo rth b y the Dis tric t Court

in it s wri tt en o p in io n . See Abu ho uran v. Gron do ls ky , 643 F. Supp . 2d 6 54 (D.N.J . 200 9). Weadd o nly

the following : The cr

ux of the Hourans’ argum ent on app ea l i s that the tr ans a c t i ons c harge d a s m one y l aunde ri ng a c t

ua l l y c ons t i t ut e d e xpe ns e s of the bank frauds, not prof

it s from the bank f

ra ud s. Th ey

failto identi fy , how ever , e xact ly wh at expens es t heyw er e pay i ng. A compar i s on w i th t he fa ct s of Sant os emphasi zes t he defi ci enci es i n t he H our ans ’ ar gum ent . I n Sant os , t he tr ans act i ons char ged as m oney l aunder i ng w er e s peci fi cal l yi dent i fi ed as paym ent s t o t he i ndi vi dual s w ho hel ped run t he ill e g a l lo ttery an d p a ym e n ts to lo ttery w in n e rs. 1 2 8 S . C t. at 2 0 2 2

– 2 3 . K n o w in g e x a c tly w h a t th e p a ym e n ts w e re u se d f o r, th e C o u rt c o u ld d e ter m in e th a t th e y“ n o rm a lly occur [r ed] dur i ng the cour s e of runni ng a l ot t ery ” and w er e cl ear l yexpens es of the u n la w f u l e n te rp ri s e . I

d. at2027. T he H our ans have notexpl ai ned how t he tr ans act i ons char ged as m oneyl aunder i ng i n t hei rcas e w er e paym ent s t hatw er e i nt egr al t o t he bank fra u d sch em e. A cc o rdin g ly , the D istri ct C o u rtco rrectl yco n clud ed that the H o u ran s are

### In li gh t of this holding , we nee d n ot addres s the Go vernm ent’ s argum ent that 3 

### T o ny H o uranw aiv edh is rig h t to f ile th e in stant ap p eal.

- 9- n o t actua ll yinn o ce n t of m o n eylaun d ering u n d er Sant os , a n d we wi l l a f f i r m. 3 III . Fort he for egoi ng r eas ons , w e af fi r m t he 

### D istrict C o urt’s d ismissal o f D ef en d ants’ § 2 2 4 1 p etitio n s.