Page 1 – REPLY MEMORANDUM IN SUPPORT OF MOTION TO DISMISS FOR VINDICTIVE 

PROSECUTION

Ruben L. Iñiguez

Assistant Federal Public Defender

101 SW Main Street, Suite 1700

Portland, OR 97204

Tel: (503) 326-2123

Fax: (503) 326-5524

Email: ruben_iniguez@fd.org

Advisory Counsel for Pro Se Defendant

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA,

Plaintiff,

vs.

WINSTON SHROUT,

Defendant.

Case No. 3:15-cr-00438-JO

REPLY MEMORANDUM IN SUPPORT 

OF MOTION TO DISMISS FOR 

VINDICTIVE PROSECUTION

[HEARING REQUESTED]

The pro se defendant, Winston Shrout, through advisory counsel, Ruben L. 

Iñiguez, submits this reply memorandum in support of his Motion to Dismiss Counts 1 

through 13 of the Superseding Indictment for Vindictive Prosecution. ECF 73.

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An examination of the undisputed events surrounding the filing of the initial 

indictment on December 8, 2015, and the superseding indictment on March 15, 2016, are 

more than sufficient to give rise to a presumption of vindictiveness in this case. Because 

evidence indicating “a realistic or reasonable likelihood of vindictiveness” exists, there is 

a “presumption of vindictiveness on the government’s part.” United States v. GarzaJuarez, 992 F.2d 896, 906 (9th Cir. 1993).

The government offers no evidence to rebut the presumption of vindictiveness or 

to show that “independent reasons or intervening circumstances dispel the appearance 

of vindictiveness” and justify the prosecutor’s decision to increase the severity of the 

charges by re-indicting Mr. Shrout in response to his exercise of constitutional, statutory, 

and procedural rights. United States v. Hooton, 662 F.2d 628, 634 (9th Cir. 1984). The 

government having failed to sustain its burden of proof, the 13 felony charges set forth 

in the Superseding Indictment must be dismissed.

ARGUMENT

I. THE GOVERNMENT MISSTATES THE LEGAL STANDARD THAT GOVERNS 

A VINDICTIVE PROSECUTION CLAIM.

As an initial matter, it is important to note that the government misstates the legal 

standard that applies in analyzing a due process claim of vindictive prosecution. 

Contrary to its assertion, the courts do not require a defendant to present “exceptionally 

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clear proof.” ECF 74 (Government’s Response, hereinafter referred to as “GR”) at 4

(quoting McCleskey v. Kemp, 481 U.S. 279, 297 (1987)).

The government quotes the Supreme Court’s decision in McCleskey as support for 

its claim “that ‘exceptionally clear proof’ is required before a court may infer an abuse of 

prosecutorial discretion.” GR at 4. The government is mistaken. McCleskey did not 

involve a due process claim of vindictive prosecution. The habeas corpus petitioner in 

McCleskey, a black man who was convicted of armed robbery and murder and sentenced

to death in Georgia, alleged an equal protection violation, that is, purposeful racial 

discrimination. See 481 U.S. at 286 (“His petition raised 18 claims, one of which was that 

the Georgia capital sentencing process is administered in a racially discriminatory

manner”). Expressly acknowledging “[t]he unique nature of the decisions at issue in this

case,” the Supreme Court narrowly held that a statistical study that purported to show a 

disparity in the imposition of the death sentence in Georgia based on the race of the victim 

and the defendant (i.e., the Baldus study) was “clearly insufficient to support an inference 

that any of the decisionmakers in McCleskey’s case acted with [racially] discriminatory 

purpose.” Id. at 297.1

 

1 The government also cites Nunes v. Ramirez-Palmer, 485 F.3d 432, 441 (9th Cir. 2007), for the ambiguous 

proposition that “a defendant who contends that a prosecutor made a charging decision in violation of [his] 

rights has a demanding standard of proof.” GR at 4 (emphasis added). Although one of the claims in Nunes

concerned prosecutorial vindictiveness, the relevant language that the government paraphrases is actually 

a quote from United States v. Armstrong, 517 U.S. 456, 463 (1996). See 485 F.3d at 441 (quoting Armstrong). 

However, the Supreme Court in Armstrong was not addressing a vindictive prosecution claim. Rather, in 

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II. THE CORRECT LEGAL STANDARD THAT GOVERNS A VINDICTIVE 

PROSECUTION CLAIM.

The correct legal standard governing a claim of vindictive prosecution is well 

established. A defendant can establish a prima facie case of vindictive prosecution in 

either of two ways. First, “by producing direct evidence of the prosecutor's punitive 

motivation.” United States v. Jenkins, 504 F.3d 694, 699 (9th Cir. 2007). Second, by showing 

that the circumstances establish “a reasonable likelihood of vindictiveness.” United States 

v. Goodwin, 457 U.S. 368, 373 (1982). See also United States v. Kent, 649 F.3d 906, 912 (9th 

Cir. 2011). “Evidence indicating a realistic or reasonable likelihood of vindictiveness may 

give rise to a presumption of vindictiveness on the government’s part.” Garza-Juarez, 992 

F.2d at 906. See also Hooton, 662 F.2d at 633 (“the mere appearance of vindictiveness gives 

rise to a presumption of vindictive motive”).

Once a presumption of vindictive motive arises, “the prosecution has the burden 

of proving that ‘independent reasons or intervening circumstances dispel the appearance 

of vindictiveness and justify its decisions.’” United States v. Edmonds, 103 F.3d 822, 826 

(9th Cir. 1996) (quoting United States v. Montoya, 45 F.3d 1286, 1299 (9th Cir. 1995)); Hooton, 

662 F.2d at 634.

 

making the statement referenced by the government, the court was addressing an equal protection claim 

of selective prosecution based on race.

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III. THE UNDISPUTED CIRCUMSTANCES OF THIS CASE ESTABLISH A 

“REASONABLE LIKELIHOOD OF VINDICTIVENESS.”

The government misapprehends the nature of the showing that Mr. Shrout must 

make to establish a prima facie case of vindictive prosecution. It suggests that no 

appearance of vindictiveness exists because Mr. Shrout has made “no allegations as to 

why the Government would be motivated to seek additional charges to punish [him].” 

GR at 6. Contrary to the government’s assertion, Mr. Shrout has no burden to discern the 

motive underlying the prosecutor’s vindictive actions. As previously noted, his only 

obligation is to show that the circumstances establish “a reasonable likelihood of 

vindictiveness.” Goodwin, 457 U.S. at 373; Kent, 649 F.3d at 912.

The following undisputed circumstances are more than sufficient to give rise to a

reasonable likelihood of vindictiveness.

1. The government “has been investigating [Mr. Shrout] for potential [felony] 

violations of 18 U.S.C. § 514 since at least June 2012.” GR at 7 (emphasis 

added).

2

2. In June 2012, the government obtained a search warrant based on a judicial 

finding of probable cause that Mr. Shrout had violated 18 U.S.C. § 514. GR 

at 7.

3. The Affidavit of SA Hill contains an entire section entitled, “Fictitious 

Financial Instruments Scheme.” See Affidavit of IRS Special Agent Casey 

 

2

In fact, the evidence establishes that the government’s investigation of Mr. Shrout commenced at least 

three years earlier, that is, in April 2009. See Affidavit of IRS Special Agent Casey Hill filed June 21, 2012, 

in In the Matter of the Search of Laptop Computer in the Possession of Winston Shrout, (Case No. 12-MC-232) at 

¶¶ 45-52.

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Hill filed June 21, 2012, in In the Matter of the Search of Laptop Computer in the 

Possession of Winston Shrout, (Case No. 12-MC-232) at ¶¶ 23-33.

4. On December 8, 2015, at least 3 1⁄2 years after the government began 

investigating Mr. Shrout for potential felony violations of 18 U.S.C. § 514, it 

presented its evidence to a grand jury.

5. The government did not seek to indict Mr. Shrout on any felony, including 

a violation of 18 U.S.C. § 514.

6. On December 8, 2015, the grand jury returned an indictment charging Mr. 

Shrout with six misdemeanor violations of 26 U.S.C. § 7203 (willful failure 

to file tax return). See ECF 1-2.

7. Immediately after the grand jury returned the indictment, the federal 

prosecutor, Stuart A. Wexler, was “approached outside th[e] courthouse 

with a document in which Mr. Shrout alleged that he was not subject to the 

jurisdiction of th[e] court; that he was a sovereign entity protected by UN 

charter.” ECF 73, Exhibit A at 12:2-6. See also ECF 11, Exhibit A.

8. That same day, December 8, 2015, SA Hill personally served Mr. Shrout 

with a summons to appear in court on January 7, 2016. See ECF 6.

9. Prior to his court appearance, Mr. Shrout mailed “commercial liens” to

several individuals, including Mr. Wexler and SA Hill. ECF 73, Exhibit A 

at 12:7-12. See also ECF 11, Exhibit B.

10. When Mr. Shrout appeared in court on January 7, 2016, he exercised his 

constitutional right to self-representation and expressed his “intention ... to 

plead guilty” to the misdemeanor indictment. ECF 73, Exhibit A at 6:14.

11. During the hearing, Mr. Wexler complained about the papers Mr. Shrout 

had mailed to him and the agent. ECF 73, Exhibit A at 11:23-14:10. He 

characterized the papers as “false retaliatory liens,” alleged that Mr. Shrout 

had committed “a federal crime under 18 U.S.C. § 1521,” and requested a 

“specific admonishment” from the court. ECF 73, Exhibit A at 14:9-10 and 

22:20.

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12. Mr. Wexler also claimed, “All of this activity echoes activity that Mr. Shrout 

took in a case ... in the state of Utah in 2014.” ECF 73, Exhibit A at 13:2-3. 

He alleged that Mr. Shrout had “responded in 2014 with a [similar] 

commercial lien” “in response to a search warrant that was executed on 

himself and associated business premises ... in 2012.” ECF 73, Exhibit A at 

13:11-14.

13. On January 20, 2016, Mr. Shrout exercised his statutory and procedural 

rights to file pro se pleadings. See ECF 9 and 10.

14. On January 29, 2016, the government filed a responsive pleading. See ECF 

11. Mr. Wexler complained anew about the pleadings Mr. Shrout had filed. 

Id. at 7. He characterized the pleadings as “threatening” and “frivolous,” 

and asked the court again to “admonish the defendant concerning these 

communications.” Id. at 11.

15. On February 3, 2016, before he appeared for arraignment, Mr. Shrout filed 

another pro se pleading. See ECF 13.

16. Later that same day, Mr. Shrout appeared for arraignment. See ECF 12. He 

once again exercised his constitutional right to self-representation and, 

when asked how he wished to plead, stated: “On behalf of the defendant, I 

plead guilty to the facts.” ECF 73, Exhibit B at 5:11-12, 12:2-5, and 18:7-8.

17. After the arraignment, Mr. Wexler wrote an email to advisory counsel “to 

summarize our hallway conversation re: discovery and superseding 

charges.” ECF 73, Exhibit C. The email states, “the government is actively 

pursuing a superseding indictment in this case, to include multiple counts 

of 18 USC 514 (Fictitious Instruments) and potentially a charge of 

obstruction under 26 USC 7212(a). The 514 charges would reflect criminal 

activity that has been going on for several years; the 7212(a) charge would 

potentially reflect obstructive activity dating back to at least 2012. The 

timing of the superseding indictment is uncertain, as the government is 

waiting on the return of subpoenas.” Id.

18. On March 15, 2016, after Mr. Shrout exercised his right to selfrepresentation, after the prosecutor unsuccessfully sought court 

admonishments, and only 98 days after the original Indictment was filed, 

the government filed a Superseding Indictment. See ECF 17. The 

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Superseding Indictment charges Mr. Shrout with not only the six original 

misdemeanors, but also 13 new felonies. Id.

The government asserts that “the case had barely begun” when the prosecutor, 

Mr. Wexler, “informed standby counsel [on February 3, 2016,] that [he] was considering 

additional [felony] charges.” GR at 6. The evidence establishes otherwise. Indeed, as the

government itself concedes, it had been investigating Mr. Shrout “for several years,” and 

specifically considering felony fictitious-instrument charges, by the time it finally 

presented its evidence to the grand jury and obtained the misdemeanor indictment on 

December 8, 2015. Despite the fact that sufficient evidence existed to establish probable 

cause of fictitious instrument violations in June 2012, the prosecutor chose not to indict 

Mr. Shrout on those charges in December 2015. And yet, only 57 days later, he changed 

course and prepared to do exactly that. The question, of course, is this: What changed 

during those two, short months to cause the prosecutor to seek 13 felony fictitious 

instrument charges after having chosen to seek none after so many years of investigation?

The prosecutor, Mr. Wexler, volunteered an explanation in his written email to 

advisory counsel on February 3, 2016. See ECF 73, Exhibit C. After acknowledging that 

Mr. Shrout had been “under investigation for an extended period,” he represented that 

the filing of the superseding indictment was “uncertain, as the government is awaiting on 

the return of subpoenas.” Id. (emphasis added). The problem with this explanation, 

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however, is that no evidence of any subpoena returned after February 3, 2016, exists 

among the discovery materials produced by the government.

The prosecutor’s attempt to explain his representation that he was “awaiting on 

the return of subpoenas” before deciding whether to seek a superseding indictment raises 

more questions than it answers. For example, Mr. Wexler first avers that he “does not 

specifically recall what subpoena [he] was referring to in [his] conversation and 

subsequent email with [advisory] counsel.” ECF 74 at 8. He then represents that “two 

subpoenas were issued by the Grand Jury in this matter in late-February/early March, 

2015.” Id. (emphasis added). If, however, as Mr. Wexler asserts, the grand jury issued 

two subpoenas one full year earlier, it is difficult to understand (a) why the subpoenas 

were still outstanding on February 3, 2016, and (b) why neither the subpoenas nor the 

returns have been produced in discovery to the defense more than one year later.3 The 

government concedes that with the exception of the two unidentified subpoenas that 

were allegedly issued in 2015, “all other subpoenas had been returned to the Grand Jury 

prior to February 3 [2016].” GR at 8.

The prosecutor next speculates that he “likely ... was either alluding to these [2015] 

subpoenas or to subpoenas that were contemplated b[ut] not ultimately issued.” Id. The 

 

3 The government states that “the subpoenas that were issued in February/March [2015] ... proved 

unresponsive: neither party possessed any material relevant to the investigation.” GR at 8. It fails, 

however, to identify the parties served or to provide copies of the subpoenas and returns.

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notion that Mr. Wexler, in both his conversation and written email, may have been 

“alluding” to subpoenas that were “contemplated but not ultimately issued” is 

particularly difficult to fathom. The language of his email refutes the suggestion. He 

unequivocally wrote that the government was “awaiting on the return of subpoenas,” 

indicating that the subpoenas already had been issued. ECF 73, Exhibit C.

The government attempts to downplay the significance of the dubious existence 

of “the subpoenas referenced by the [prosecutor] in [his] conversation [and email] with 

[advisory] counsel.” GR at 8. It questions “why the [prosecutor] making this assertion is 

proof of vindictiveness.” Id. The answer is clear. While the prosecutor’s claim that his 

decision to file superseding felony charges rested on the return of the still unseen 

subpoenas is not direct evidence of vindictiveness, it is circumstantial evidence of a 

potentially vindictive motive. If the decision to file felony charges did not depend on the 

subpoena returns, as the prosecutor claimed, then his true motive lies elsewhere.

Contrary to the government’s assertion, the foregoing circumstances are more 

than adequate to establish a reasonable likelihood of vindictiveness. Considering the 

prosecutor’s difficult, personal history with Mr. Shrout, including the criminal case in 

Utah in 2014, the “commercial liens” that Mr. Shrout personally served on Mr. Wexler 

and the case agent, the prosecutor’s statement that he perceived the liens to be 

“threatening,” Mr. Shrout’s exercise of his constitutional right to self-representation, his 

repeated attempts to plead guilty to the misdemeanor indictment, his exercise of his 

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statutory and procedural rights to file pro se pleadings, the fact that the prosecutor did 

not initially seek felony charges despite several years of investigation that included 

evidence of the overwhelming majority of the alleged fictitious instruments, and the fact 

that Mr. Wexler abruptly changed course and sought felony charges approximately two 

months after Mr. Shrout chose to represent himself and served pleadings on the 

prosecutor, Mr. Shrout has established a prima facie case for vindictive prosecution.

IV. Having Produced No Evidence, The Government Cannot Sustain Its Burden To Show 

Intervening Circumstances To Dispel The Appearance Of Vindictiveness.

Despite its acknowledgment that it had been “investigating [Mr. Shrout] for 

potential [felony] violations of 18 U.S.C. § 514 since at least June 2012,” GR at 7, the 

government suggests the proverbial straw that broke the camel’s back was a single 

document that Mr. Shrout allegedly mailed to the U.S. Treasury Department in June 2015, 

more than six months before the prosecution presented its case to the grand jury. Id. It 

asserts the prosecution team’s receipt of that one “piece of evidence” led it to change 

course and “revisit its case against [Mr. Shrout] for violations of 18 U.S.C. § 514.” Id.

Remarkably, the government provides the Court with no evidence, documentary 

or testamentary, to support its position. It does not offer the relevant document. And it 

makes no attempt to prove, by declaration or otherwise, the circumstances or chronology 

of events relative to the prosecution team’s alleged receipt of the document at or about 

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the time of the original indictment.4 Having introduced no evidence, the government has 

not sustained its burden of proving intervening circumstances.

The government indicates that the document Mr. Shrout allegedly mailed on June 

9, 2015, forms the basis for the two fictitious obligation charges in Counts 10 and 13 of the 

Superseding Indictment. See GR at 7 (citing ECF 17). But the Superseding Indictment 

does not charge Mr. Shrout with only those two felonies. To the contrary, it also charges

him with eleven other felonies. See ECF 17, Counts 1-9 and 11-12. The government does 

not suggest that the evidence underlying those eleven felonies is new. Nor could it. 

Having possessed the evidence underlying those fictitious obligation charges “for several 

years,” the government fails to allege or prove any “intervening circumstances” to 

explain the prosecutor’s decision to charge those eleven felonies when, only 57 days 

earlier, he made a completely different decision.

While the government’s belated “discovery” of the document that underlies 

Counts 10 and 13 of the Superseding Indictment might explain why the prosecutor did 

not charge Mr. Shrout with those two felonies at the time he sought the initial Indictment, 

it does not explain why he filed eleven additional felonies when the evidence underlying 

those charges had been known to him for years. In any event, the government having 

 

4 At the request of advisory counsel, the government recently produced a scanned copy of a one-page 

document titled “Frivolous Return Program.” The document reflects it was printed on November 25, 2015, 

approximately two weeks before the prosecution presented its case to the grand jury.

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failed to sustain its burden of proof, all 13 felony charges alleged in the Superseding 

Indictment must be dismissed.

V. In The Alternative, If The 13 Felony Counts Are Not Dismissed On This Showing, 

The Government Should Produce Any Evidence Concerning The Prosecution Team’s 

Decision To File Superseding Charges, Including Email And Other Correspondence, 

For In Camera Inspection.

The government makes several relevant assertions, but introduces no evidence to 

support them. For example, it claims (1) “the prosecution team did not become aware of 

[the] existence [of the solitary document that underlies Counts 10 and 13 of the 

Superseding Indictment] until approximately December 4, 2015,” (2) “only [the case 

agent] was aware of the existence of the document on December 4,” (3) “the prosecutors 

... were not aware of the document until [the case agent] showed it to them in person on 

December 7,” and (4) the case agent “digitized the document and emailed it to attorneys 

for the Government on Dec. 10.” GR at 7-8.5

The government’s mere assertions are plainly insufficient to sustain its burden to 

show intervening circumstances to dispel the appearance of vindictiveness. 

Furthermore, given the absence of evidence to support the prosecutor’s initial 

explanation for his decision to filing superseding charges (i.e., “awaiting on the return of 

 

5 The government states that “a copy of [the December 10, 2015,] email was provided to [advisory] counsel 

and [Mr. Shout] on March 1, 2017.” GR at 8, n. 3. That is not entirely accurate. Although Mr. Wexler did 

send a password-protected zip file as an attachment to an email on March 1, the password required to open 

and review the file was not provided. As a result, neither advisory counsel nor Mr. Shrout has been able 

to review the email or verify its receipt by the prosecutors on December 10, 2015.

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subpoenas”), it is important that the government be required to disclose all relevant 

evidence in its possession relative to the decision to file superseding felony charges. The 

Court should order discovery and schedule a hearing. Only then can Mr. Shrout be 

assured that the appearance of vindictiveness has been fully and fairly resolved.

6

VI. CONCLUSION.

For each of the foregoing reasons, Mr. Shrout requests that the Court dismiss 

Counts 1 through 13 of the Superseding Indictment. The case should proceed to trial on 

the six remaining misdemeanor charges which were originally charged in the Indictment.

In the alternative, if the Court is still inclined to accept evidence from the 

government to overcome the defense’s prima facie showing of vindictiveness, Mr. Shrout 

requests discovery as set forth in Section V, above, as well as an evidentiary hearing on 

this motion.

RESPECTFULLY SUBMITTED this 27th day of March, 2017.

/s/ Ruben L. Iñiguez

Ruben L. Iñiguez

Advisory Counsel for Pro Se Defendant

 

6 Throughout its response, the government refers to communications and decisions made by the lead 

prosecutor, Mr. Wexler, as if they were made generically by “the Government.” See GR at 8 (“the 

Government does not specifically recall what subpoenas it was referring to in its conversation and 

subsequent email with counsel”) (emphasis added). Because Mr. Wexler authored the February 3, 2016, 

email, had the related conversation with advisory counsel, and most likely played a central role in the 

decision to file superseding felony charges, his role as a witness directly conflicts with his role as lead 

attorney for the government, at least for the purposes of the instant motion.

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