Page 1- MOTION TO CONTINUE RELEASE PENDING APPEAL

Ruben L. Iñiguez

Assistant Federal Public Defender

101 S.W. Main Street, Suite 1700

Portland, Oregon 97204

(503) 326-2123 Telephone

(503) 326-5524 Facsimile

ruben_iniguez@fd.org

Attorney for Defendant

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA,

Plaintiff,

v.

WINSTON SHROUT,

Defendant.

Case No. 3:15-cr-00438-JO-1

MOTION TO CONTINUE RELEASE 

PENDING APPEAL

The defendant, Winston Shrout, through counsel, Ruben L. Iñiguez, moves the Court to 

enter an Order granting his continued release pending the appeal of his conviction and sentence to 

the Ninth Circuit. The continuation of his release pending appeal is warranted because Mr. Shrout 

is not likely to flee or pose a danger to the safety of any other person or the community, the appeal 

is not for the purpose of delay, and the appeal raises several questions of law or fact that are “fairly 

debatable” and likely to result in reversal, an order for a new trial, or a reduced sentence. United 

States v. Handy, 761 F.2d 1279, 1281 (9th Cir. 1985); 18 U.S.C. § 3143(b).

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I. INTRODUCTION

On October 22, 2018, the Court sentenced Mr. Shrout to 10 years’ imprisonment following 

his convictions for willful failure to file tax returns and producing, presenting, and shipping 

fictitious financial instruments. CR 161. On October 26, Mr. Shrout timely filed a notice of appeal. 

CR 163. The Court ordered him to self-surrender on November 26 to the Federal Prison Camp at 

Sheridan, Oregon, to commence his sentence. CR 161. It subsequently revised its Order and 

directed the U.S. Marshals Service to “alert the court and [Mr. Shrout] at the time the Bureau of 

Prisons designates an institution. The court will assign [Mr. Shrout’s] self-surrender date at that 

time.” CR 178. Mr. Shrout remains on release pending the BOP’s completion of the designation 

process.

Mr. Shrout respectfully requests that the Court permit him to remain on his current

conditions of release pending appeal, pursuant to the Bail Reform Act of 1984, because he satisfies

the requirements of § 3143(b). First, he is not likely to flee or pose a danger. Second, his appeal

is not for the purpose of delay. Third, he presents several “substantial questions” for appeal,

which the Ninth Circuit interprets to mean issues that are “fairly debatable” or “fairly doubtful.” 

Handy, 761 F.2d at 1281. Of course, this Court need not determine that its own rulings were

incorrect in order to grant bail pending appeal. Nor must it determine that Mr. Shrout “present[s] 

an appeal that will likely be successful; only a non-frivolous issue that, if decided in [his] favor, 

would likely result in reversal[.]” United States v. Garcia, 340 F.3d 2013, 1021 n.5 (9th Cir.

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2003).1 Mr. Shrout presents several issues that are, at the very least, “fairly debatable.” The 

Court only need find that one issue meets the Handy standard in order to grant his Motion.

II. LEGAL STANDARD

18 U.S.C. § 3143(b) governs release pending appeal. It states that release is appropriate

where the Court finds: (1) “that the person is not likely to flee or pose a danger to the safety of any

other person or the community if released,” (2) “that the appeal is not for the purpose of delay,”

and (3) that the appeal “raises a substantial question of law or fact likely to result in – (i) reversal,

(ii) an order for a new trial, (iii) a sentence that does not include a term of imprisonment, or (iv)

a reduced sentence to a term of imprisonment less than the total of the time already served plus

the expected duration of the appeal process.”

The burden is on the defendant to demonstrate his eligibility for bail pending appeal. 

Handy, 761 F.2d at 1283. He must show the first Handy factor—flight or danger—“by clear and 

convincing evidence.” 18 U.S.C. § 3143(b)(1)(A). He must show the remaining factors by a 

preponderance of the evidence. United States v. Heine, 2018 WL 3745813, at *2 (D. Or. Aug. 7, 

2018) (because statute only requires clear and convincing evidence for first factor, defendant must 

show remaining Handy factors “only by a preponderance of the evidence”), reversing order 

denying bail, United States v. Heine, No. 18-3083, Docket No. 14 (9th Cir. Sept. 28, 2018)

(distinguishing clear and convincing standard for first factor from showing required for other 

factors).

 

1 Unlike Mr. Shrout, the defendants in Garcia were required to show an additional factor for bail –

“exceptional reasons” – because they had been convicted of a violent offense. 340 F.3d at 1014. 

Mr. Shrout’s convictions were for non-violent offenses that triggered no adverse presumptions 

regarding flight and danger.

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Handy is the foundational Ninth Circuit case analyzing this standard. 761 F. 2d at 1279. 

There, the Ninth Circuit interpreted the phrase “substantial question,” as it is used in § 3143(b), to 

mean an issue that is “fairly debatable” or “fairly doubtful”—that is, “of more substance than 

would be necessary to a finding that it was not frivolous.” Handy, 761 F.2d at 1283 (internal 

quotation marks and citations omitted). The Ninth Circuit rejected the government’s contention

that this standard limits bail pending appeal to defendants who can demonstrate that they will

probably prevail on appeal:

[W]e reject the government’s proposed construction of the statute. Like the Third

and Eleventh Circuits, we find that the word “substantial” defines the level of merit

required in the question raised on appeal, while the phrase “likely to result in

reversal” defines the type of question that must be presented.

Id. at 1281. Additionally, “[t]he question may be ‘substantial’ even though the judge or justice

hearing the application for bail would affirm the merits of the appeal.” Id. (quoting D'Aquino v. 

United States, 180 F.2d 271, 272 (11th Cir. 1950)).

The Ninth Circuit subsequently discussed Handy in Garcia, 340 F.3d a t 1013. “The

second part of the requirement – that the question be likely to result in reversal, a new trial, a

non-prison sentence, or a sentence reduced to less than the time that would be served by the end

of the appeal process – concerns only the type of question that meets the requirement; it does not 

involve assessing the likelihood that a reversal will occur in the particular case.” Id. (emphasis in 

original). The court in Garcia emphasized that a defendant “need not, under Handy, present an

appeal that will likely be successful, only a non-frivolous issue that, if decided in the defendant’s

favor, would likely result in reversal or could satisfy one of the other conditions.” Id. (emphasis

added). “Because under § 3143(b)(1)(B) a defendant need not show a likelihood of success on 

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appeal, a defendant who does show such likelihood goes well beyond the threshold requirement.” 

Id.

Following this relatively low standard, courts in this District and throughout the Ninth

Circuit regularly grant bail pending appeal in similar circumstances. For example, in United

States v. Pollock, 2016 WL 8730144 (D. Or. 2016), Judge Brown granted the defendant’s motion

for release pending appeal after he entered a guilty plea to making a false statement to a bank. 

After finding the defendant was not likely to flee, Judge Brown identified sentencing issues 

concerning loss as likely to require resentencing:

The Court finds Defendant has raised substantial questions on appeal because this

Court’s rulings on the amount of loss are “fairly debatable.” For example, 

Defendant challenges the Court’s rulings that the amount of actual loss could not 

be reliably calculated and that Defendant intended to cause a loss to the victim. If

the Ninth Circuit agrees with Defendant on one or both of these issues, Defendant’s

sentence would likely be reversed and the case remanded to this Court for

resentencing.

Id. at *2.

Similarly, in United States v. Winsor, 890 F. Supp. 2d 1257 (D. Or. 2012), Judge King

granted the defendant’s motion for bail pending appeal after his guilty plea to possession of child

pornography resulted in a sentence of 60 months.2 Judge King noted that, “[t]he court need not 

find that its [prior] ruling was wrong, just that it is fairly debatable. A question not yet decided by 

controlling precedent can present a substantial question.” Id. at 1259 (“While I am confident in 

my decision, it is possible the Ninth Circuit may disagree and I find his appeal raises a substantial 

question of law or fact.”). The substantial questions Judge King noted were his findings of good 

 

2 Because the offense in Winsor was not consider non-violent, Judge King was required to find

additional “exceptional reasons,” a factor not applicable here. 890 F.Supp.2d at 1258.

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faith in upholding a search warrant of the defendant’s residence and his denial of a motion to 

suppress a confession. Judge King also noted that the defendant was 66 years old, the offense had 

“occurred over seven years ago,” and in the meantime, the defendant had “been using his time 

wisely.” Id. at 1260.

In United States v. Ogle, 779 F. Supp. 141 (D. Or. 1991), Judge Frye granted the 

defendant’s motion for release pending appeal following his conviction by a jury for the crimes of 

tax evasion. Judge Frye agreed there was “a fairly debatable question as to whether the jurors [had 

unanimously agreed upon the facts which constituted an affirmative act of evasion],” agreed the 

issue was likely to result in a reversal or an order for a new trial, and granted the defendant’s 

motion. Id. at 144.3

 

3 See also United States v. Bernot, 2015 U.S. Dist. LEXIS 66782, at *4 (E.D. Cal. May 20, 2015)

(granting bail pending appeal where defendant raised question of applicability of vulnerable victim

enhancement); United States v. Memmott, 2015 U.S. Dist. LEXIS 17032, at *2 (E.D. Cal. Feb. 11,

2015) (granting bail pending appeal in tax evasion case because of difficulty of loss calculation);

United States v. McKany, 2014 U.S. Dist. LEXIS 159, at *5 (S.D. Cal. Nov. 12, 2014) (granting bail

pending appeal where defendant raised question as to his motion to suppress statements); United

States v. Abad, 2014 U.S. Dist. LEXIS 198311, *3 (N.D. Cal. Aug. 6, 2014) (granting bail pending

appeal; though defendant raised the same issues he raised in connection with his motions for

judgment of acquittal and new trial, and the court had considered and rejected those, “the Court is

not required to certify that it believes its rulings to be erroneous” to grant motion); United States v.

Martin, 2014 WL 2155187, at *2 (D. Idaho May 22, 2014) (defendant raised 12 issues; while most

did not present a substantial question, “one or two do, and that is all Swigert needs to be eligible for 

release pending appeal”); United States v. Dilworth, 1998 U.S. Dist. LEXIS 328, at *3 (D. Or. Jan.

9, 1998) (Frye, J.) (granting bail pending appeal after trial conviction; sufficiency of evidence at

trial presented substantial question); United States v. Bascue, 1995 WL 617480 (D. Or. Oct. 18,

1995) (Frye, J.) (granting bail pending appeal after trial conviction; substantial question whether

statute was constitutionally applied to defendants); Unite States v. MacDonald, 1994 U.S. Dist.

LEXIS 9138 (D. Or. June 29, 1994);see also United States v. Aceves, 2018 U.S. App. LEXIS 5097, 

at *1 (9th Cir. Feb. 27, 2018) (reversing district court’s denial of bail pending appeal in white collar

case); United States v. Wetselaar, 2017 U.S. App. LEXIS 26958, at *2 (9th Cir. Nov. 7, 2017)

(same).

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III. ARGUMENT

The circumstances of this case easily satisfy the Handy factors: Mr. Shrout is neither a

flight risk nor a danger, the appeal is not for the purpose of delay, there are several fairly debatable

questionsfor appeal, and appellate resolution of the questions is likely to result in reversal, an order 

for a new trial, or a reduced sentence.

A. The First Handy Factor: No Risk Of Flight Or Danger.

The evidence clearly and convincingly establishes that Mr. Shrout is not likely to flee or 

pose a danger to the safety of any other person or the community if he is continued on release. He 

has significant family and community ties to Oregon. He has been on pretrial supervision for the 

past three years. He first appeared via summons on January 7, 2016. Presentence Investigation 

Report (“PSR”) at ¶ 6. “At this time the Court ordered his release.” Id. He was again “ordered 

released to U.S. Pretrial Services on March 31, 2016, subsequent to his arraignment on a 

Superseding Indictment.” Id. He presently remains on release.

With the Court’s permission, Mr. Shrout has traveled several times not only outside the 

United States for medical treatment, but also outside the state of Oregon to visit family in Nevada 

and Utah. He has always returned, as promised. He has appeared, as directed, not only for all

hearings, but also for trial. He has committed no new law violations while on release. His 

compliance with pretrial supervision is hardly surprising given the complete absence of any prior 

criminal history, juvenile or adult, during the past 70 years. He is a military veteran, having served 

honorably as a Sergeant in the U.S. Marine Corps. PSR at ¶ 66. Throughout the three-year period 

of release, he has not posed a danger to anyone.

At the conclusion of the sentencing hearing, the Court renewed its determination that Mr.

Shrout was not a flight risk or a danger. Rather than order his immediate detention, he was 

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permitted to self-surrender voluntarily. CR 175 at 81. The Court’s ruling was consistent with the 

recommendation of the Probation Office, which found that he has been “compliant with the

conditions of pretrial release and viewed as suitable for voluntary surrender.” PSR at Sentencing 

Recommendation (Voluntary Surrender). In short, the evidence clearly and convincingly shows 

Mr. Shrout is neither a flight risk nor a danger.

B. The Second Handy Factor: Not For The Purpose Of Delay.

The purpose of Mr. Shrout’s appeal to the Ninth Circuit is to present for review several 

preserved issues relative to his conviction and sentence. The purpose of the appeal is not to delay. 

There is no evidence of any purpose for the appeal other than his desire to assert his right to contest 

the legality of his conviction and sentence.4

C. The Third Handy Factor: Substantial Questions Of Law Or Fact.

There are several “fairly debatable” or “non-frivolous” questions for appeal that are of

the type that, if the Ninth Circuit rules in Mr. Shrout’s favor, would result in reversal or 

resentencing. The Court need only determine that one of the issues meets the Handy standard.5

1. Denial of Motion to Dismiss Indictment for Vindictive Prosecution

Without Discovery or an Evidentiary Hearing.

Before trial, Mr. Shrout moved to dismiss the 13 fictitious financial instrument counts 

alleged in the Superseding Indictment for vindictive prosecution. CR 73. He submitted three 

 

4 The fact that almost three years elapsed between the filing of the initial Indictment and sentencing 

has no bearing on the issue of whether the appeal is for the purpose of delay. Even so, it was the 

legitimate, complicated, and interrelated issues regarding competency, self-representation, and the 

role of standby counsel, as well as the admittedly “voluminous” nature of the discovery involved 

(CR 16 at 24), that resulted in the Court’s decision to “declare this as a complex case” and 

prevented a speedier conclusion. CR 68 at 10.

5 Mr. Shrout does not set forth in this Motion every argument he intends to raise on direct appeal. 

He expressly reserves the right to present additional arguments to the Ninth Circuit.

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exhibits— an email from the prosecutor and two hearing transcripts—as evidence in support of his 

motion. Id. at 73-1 to 73-3. He expressly requested an evidentiary hearing. Id.

The government opposed the motion. CR 74. But it submitted no evidence—documentary 

or testimonial—to support its opposition. Comstock v. Humphries, 786 F.3d 701, 709 (9th Cir. 

2015) (“arguments in briefs are not evidence”).

6

 Notably, the government admitted it had been 

“investigating [Mr. Shrout] for potential violations of 18 U.S.C. § 514 since at least June 2012.” 

CR 74 at 7 (emphasis added). The government also admitted it already had “establishe[d] probable 

cause that [Mr. Shrout] acted in violation of ... § 514” at that time, namely, at least 31⁄2 years before 

it filed the initial Indictment. Id. In other words, the government conceded that, despite having 

investigated Mr. Shout for approximately 80 months, and despite having established probable 

cause for the fictitious instrument violations at least 42 months earlier, it did not pursue a single 

§ 514 charge when it first presented its case to the grand jury for Indictment in December 2015.

Without providing any evidence to support its claim, the government in its opposition 

memo claimed it was the “discovery of an important piece of evidence at around the time of the 

initial indictment [that] prompted [it] to revisit” its charging decision and file the Superseding 

Indictment charging Mr. Shrout with 13 felony counts less than 100 days after it filed the initial 

misdemeanor Indictment. CR 74 at 7. The obvious flaw in its unsupported assertion was its 

admission that Mr. Shrout “mailed the document well in advance of the initial indictment” (i.e., 

 

6 Without directly addressing vindictive prosecution, the government referenced an Affidavit in 

Support of Application for Search Warrant that IRS Special Agent Hill submitted almost five years 

earlier, on June 21, 2012. This did not constitute evidence as the government only offered to 

“provide[] [a copy] to the Court for review ... upon request.” CR 74 at 7 n. 2. The Court did not 

request a copy. The Affidavit supports retaliation because it confirms that the government’s 

“investigation [of Mr. Shrout] began on or about April 21, 2009,” that is, more than 61⁄2 years 

before it filed the initial indictment. Affidavit at ¶ 9.

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six months earlier) and, more importantly, its concession that the document formed the basis for 

only two of the 13 counts. Id. In other words, the supposedly “new” document, referenced only 

in argument in a brief, was wholly unrelated to the 11 remaining § 514 counts that the prosecutor 

suddenly saw fit to charge. The prosecutor offered no justification for his decision to charge Mr. 

Shrout with those 11 counts, despite his own admission that sufficient evidence to bring those 

particular charges had existed for years before the initial Indictment was filed.

But that is not all. Confronted with documentary evidence indicating that the prosecutor’s 

charging decision was vindictive, the government feigned ignorance. It claimed the prosecutor 

“does not specifically recall what subpoenas [he] was referring to in [his] conversation and 

subsequent email with [standby] counsel.” CR 74 at 8.7 At the same time, the government 

represented that “records indicate two subpoenas were issued by the Grand Jury in this matter in 

late-February/early March, 2015.” Id. (emphasis added). The government further represented that 

“[b]oth of the subpoenas ... proved unresponsive: neither party possessed any material relevant to 

the investigation.” Id.

Mr. Shrout then filed a reply memorandum. CR 76. He noted that the government had 

produced no evidence and, therefore, had failed to sustain its burden to show intervening 

circumstances to dispel the appearance of vindictiveness. Id. at 11-13. He specifically requested 

both discovery and an evidentiary hearing. Id. at 14.

The next day, the government filed a motion to correct a critical misrepresentation it had 

made to the Court. CR 77. It admitted its representation that it possessed “records” showing the 

 

7

In his email to standby counsel on February 3, 2016, the prosecutor, Stuart A. Wexler, asserted 

that “[t]he timing of the superseding indictment is uncertain, as the government is waiting on the 

return of subpoenas.” CR 73 at Exhibit C (emphasis added).

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grand jury had issued two subpoenas in “late-February/early-March, 2015” was “factually 

incorrect.” Id. at 1-2 (citing CR 74 at 8). Instead, the government now claimed the subpoenas 

were issued one year later—in 2016. Id. at 2. The difference, of course, is crucial. When the 

prosecutor claimed in early February 2016 that he was “waiting on the return of subpoenas” before 

deciding whether to file the superseding charges, no subpoenas were outstanding or awaiting return 

because no subpoenas had been issued yet. Accordingly, the “correction” not only cast serious 

doubt on the veracity of the prosecutor’s written representation, but it also added considerable 

strength to the appearance of vindictiveness.

Three days later, the Court issued an Order denying the motion to dismiss for vindictive 

prosecution. CR 78. It denied the motion without addressing Mr. Shrout’s request for discovery 

or conducting an evidentiary hearing. Id. Despite the fact that the government had presented no 

evidence, the Court found it “unlikely the prosecutor would have a punitive animus toward [Mr. 

Shrout] for exercising the rights he asserted.” Id. at 3. The Court also found “the timing of the 

superseding indictment suggests that a presumption of vindictiveness is not warranted.” Id. 

(citations omitted).

On appeal, Mr. Shrout will argue that the Court erred in denying his motion to dismiss 

without affording him discovery or conducting an evidentiary hearing. A hearing is required when 

“a material issue of fact [is] raised ‘which if resolved in accordance with [the defendant’s] 

contentions would entitle him to relief.’” United States v. Irwin, 612 F.2d 1182, 1187 (9th Cir. 

1980) (quoting Wright v. Dickson, 336 F.32d 878, 888 (9th Cir. 1964)); see also United States v. 

Howell, 231 F.3d 615, 620 (9th Cir. 2000) (evidentiary hearing required “when the moving papers 

allege facts with sufficient definiteness, clarity, and specificity to enable the trial court to conclude 

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that contested issues of fact exist”); United States v. Packwood, 848 F.2d 1009, 1010 (9th Cir. 

1988) (same); United States v. Carrion, 463 F.2d 704, 706 (9th Cir. 1972) (same).

In Irwin, both the defendant and the government introduced affidavits in connection with 

a motion to dismiss the indictment for prosecutorial misconduct. In deciding whether to conduct 

an evidentiary hearing, the district court considered not only the affidavits, but also “the tape 

[recording of several] telephone conversations, legal memorandum and oral argument.” Irwin, 

612 F.2d at 1184. While it ultimately denied the motion without an evidentiary hearing, the court 

did so “[o]n the basis of [the evidence].” Id.; see also 612 F.2d at 1189 (“the court referred 

specifically to the affidavits” in finding no evidentiary hearing was required).

On appeal, the Ninth Circuit first held it “must assume that the factual allegations in 

[Irwin’s] affidavits are true” in determining whether they “show as a matter of law that [he] was 

or was not entitled to relief.” Irwin, 612 F.2d at 1187. The court then “examine[d] in some detail 

the affidavits ... to determine whether they raised factual issues requiring a hearing.” Id. at 1190. 

Only because “[t]he moving papers failed to allege facts sufficient to enable the trial court to 

conclude that relief must be granted if the facts alleged were proved” did the Ninth Circuit 

conclude that “the trial court did not err in denying the motion to dismiss without an evidentiary 

hearing.” Id. at 1191 (citing Carrion, 463 F.2d at 706); see also United States v. Mazzarella, 784 

F.3d 532, 537-541 (9th Cir. 2015) (trial court abused its discretion by not allowing discovery or 

holding an evidentiary hearing to resolve disputed issues of fact relative to Brady claim).

It is well established that “[v]indictive prosecution violates due process.” Rushdan v. 

Schriro, No. CV 05–114–TUC–FRZ (JM), 2010 WL 7508269, at *8 (D. Ariz. 2010) (citing Moran 

v. Burbine, 475 U.S. 412, 466 (1986)). “[T]he mere filing of an indictment can support a charge 

of vindictive prosecution.” United States v. Hooton, 662 F.2d 628, 634 (9th Cir. 1981). In most 

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cases, a “claim of vindictive prosecution usually arises when the government increases the severity 

of alleged charges—for example, by re-indicting a defendant—in response to the exercise of 

constitutional or statutory rights.” Id. at 633; see also United States v. Montoya, 45 F.3d 1286, 

1299 (9th Cir. 1995) (“most vindictive prosecution cases involve re-indictment of a defendant.”).

“To establish a prima facie case of vindictive prosecution, [a defendant] ‘must show either 

direct evidence of actual vindictiveness or facts that warrant an appearance of such.’” United 

States v. Edmonds, 103 F.3d 822, 826 (9th Cir. 1996) (quoting Montoya, 45 F.3d at 1299). 

“Evidence indicating a realistic or reasonable likelihood of vindictiveness may give rise to a 

presumption of vindictiveness on the government’s part.” United States v. Garza-Juarez, 992 F.2d 

896, 906 (9th Cir. 1993); see also Hooton, 662 F.2d at 633 (“the mere appearance of vindictiveness 

gives rise to a presumption of vindictive motive”). “Upon such a showing, the prosecution has the 

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

of vindictiveness and justify its [prosecutorial] decisions.’” Edmonds, 103 F.3d at 826 (quoting 

Montoya, 45 F.3d at 1299); accord Hooton, 662 F.2d at 633. “Thus, whether the facts give rise to 

the appearance of vindictiveness is dependent upon the totality of the circumstances surrounding 

the prosecutorial decision at issue.” United States v. Griffin, 617 F.2d 1342, 1347 (9th Cir. 1980).

Although “it is not dispositive of the inquiry,” the Ninth Circuit has long held that “[t]he 

chronology of events is, of course, entitled to great weight.” Griffin, 617 F.2d at 1347 (emphasis 

added); see also United States v. Spiesz, 689 F.2d 1326, 1328 (9th Cir. 1982) (evidentiary hearing 

held where prosecutor filed superseding indictments seven weeks after initial indictment and, 

therefore, appearance of vindictiveness arose from “the sequence of events”).

Here, Mr. Shrout relied on much more than “the timing of the superseding indictment” to 

support his contention of a realistic or reasonable likelihood of vindictiveness. CR 78 at 3. He not 

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only observed that the prosecutor filed the Superseding Indictment less than 100 days after the 

initial Indictment, but he also submitted uncontested evidence that was strongly suggestive of 

animus on the part of the prosecutor.

Mr. Shrout provided evidentiary support of an appearance of vindictiveness by exposing the 

faulty premise for the prosecutor’s initial claim that his decision whether to pursue § 514 charges 

depended on the return of subpoenas that were still outstanding. As the government itself later 

acknowledged, the prosecutor’s claim that he was “waiting on the return of subpoenas” issued one 

year earlier was not correct. Mr. Shrout provided further evidence of vindictiveness when he 

similarly undermined the prosecutor’s claim that his decision to file the 13 fictitious instrument 

charges resulted from the belated receipt of a single document. Again, by its own admission, the 

government agreed that the solitary document received six months before the prosecutor filed the 

Indictment only related to two fictitious instrument charges. The obvious implication of that 

admission is that as early as 2012, the government’s multi-year investigation already had produced 

sufficient evidence to charge Mr. Shrout with the 11 other § 514 charges. Indeed, as early as June 

2012, the case agent affirmed exactly that. See Affidavit at ¶ 5 (“there is probable cause that 

evidence of ... Fictitious Obligations in violation of 18 U.S.C. § 514 ... will be found.”). And yet 

the prosecutor chose not to file a single § 514 charge when he filed the Indictment in December 

2015—quite reasonably since the documents, at the very least, do not fit within the core of the 

statute.

8

 As Mr. Shrout demonstrated, it was only after he had exercised his constitutional and 

 

8 The § 514 charges depended on the dubious premise that documents purportedly worth $1 trillion 

dollar had a real effect (i.e., that anyone would take them at face value).

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procedural rights (i.e., to represent himself, plead guilty to the initial misdemeanor charges, and file 

pro se pleadings) that the prosecutor filed the § 514 charges.

On appeal, Mr. Shrout will argue that his moving papers and evidence established facts 

with sufficient definiteness, clarity, and specificity to enable the Court to conclude that there were 

contested issues of fact. He demonstrated a reasonable likelihood that the prosecutor changed his 

decision not to pursue the § 514 charges after Mr. Shrout exercised his constitutional right to waive 

counsel and defend himself, twice attempted to plead guilty to the initial misdemeanor Indictment,

and exercised his procedural right to file pro se pleadings. He satisfied his burden of making an 

initial showing of an appearance of vindictiveness and, therefore, the burden shifted to the 

government to prove that the increase in the severity of the charges did not result from any 

vindictive motive.

The Court erred by not placing the burden of overcoming the presumption of vindictiveness 

on the government, affording discovery to Mr. Shrout, holding an evidentiary hearing, or otherwise 

requiring the prosecutor to introduce objective evidence justifying his decision to file the fictitious 

instrument charges. See United States v. Jenkins, 504 F.3d 694, 700 (9th Cir. 2007) (prosecutor 

testified at hearing on motion to dismiss); United States v. Spiesz, 689 F.2d 1326, 1328 (9th Cir. 

1982) (evidentiary hearing where prosecutor testified). As in Jenkins, the prosecutor here “had 

more than enough evidence to proceed with the [§ 514] charges prior to [Mr. Shrout’s] decision to 

[represent himself, plead guilty, and file pleadings].” Id. Unlike Jenkins, however, the Court did 

not “place the burden on the government to justify its course of conduct.” Id. And, unlike Jenkins, 

the prosecutor who filed the § 514 charges was not required to testify at a hearing or introduce 

objective evidence justifying his decision to increase the severity of the charges. Id. at 698; see 

also Spiesz, 689 F.2d at 1326.

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Mr. Shrout recognizes that the Court ruled against him and denied his motion to dismiss 

for vindictive prosecution—without granting his request for discovery or an evidentiary hearing. 

See CR 78 (Order). But, as noted above, the Court need not determine that its ruling was incorrect

in order to grant his motion. Handy, 761 F.2d at 1281. Instead, it need only find that the question

is “fairly debatable” to continue his release pending appeal.

2. Sixth Amendment Violation

In Faretta v. California, 422 U.S. 806 (1975), the Supreme Court recognized a defendant’s 

right to waive his Sixth Amendment right to counsel and conduct his own defense. “A defendant’s 

decision to forgo counsel and instead to defend himself—known as a ‘Faretta waiver’—is valid if 

the request is timely, not for the purpose of delay, unequivocal, and knowing and intelligent.” 

United States v. Erskine, 355 F.3d 1161, 1167 (9th Cir. 2004). “In order to deem a defendant’s 

Faretta waiver knowing and intelligent, the district court must insure that he understands 1) the 

nature of the charges against him, 2) the possible penalties, and 3) the ‘dangers and disadvantages 

of self-representation.’” Id. (citation omitted).

The courts “have consistently emphasized the primacy of the district court’s role in 

protecting a defendant’s twin Fifth and Sixth Amendment rights by insuring that a Faretta waiver 

is knowing and intelligent.” Erskine, 355 F.3d at 1167; see United States v. Hernandez, 203 F.3d 

614, 625 n. 16 (9th Cir. 2000) (discussing this “fundamental obligation”). “[W]e cannot overstate 

the importance of the court’s responsibility in this respect.” Erskine, 355 F.3d at 1167. Failure to 

meet the requirements for a valid Faretta waiver constitutes per se prejudicial error. United States 

v. Arlt, 41 F.3d 516, 524 (9th Cir.1994). The determination that a Faretta error occurred requires 

reversal of the conviction. Erskine, 355 F.3d at 1167.

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The government carries the burden of establishing the legality of a Faretta waiver on 

appeal. United States v. Mohawk, 20 F.3d 1480, 1484 (9th Cir. 1994). The Ninth Circuit 

“evaluates this question with great care, indulging ‘every reasonable presumption against waiver.’” 

Arlt, 41 F.3d at 520 (quoting Brewer v. Williams, 430 US. 387, 404 (1977)).

When Mr. Shrout appeared for arraignment on the initial Indictment, he admitted he was 

“kind of confused by the nature of this situation.” CR 16 at 6. Later, when the Court asked whether 

he understood the charges, he unequivocally stated: “No, sir.” Id. at 9. He subsequently reiterated 

that he did not “understand them.” Id. Similarly, when the Court asked whether he understood 

the potential penalties, Mr. Shrout stated: “no, I do not understand them.” Id. at 10. The prosecutor 

subsequently acknowledged that “the government has some concern as that does not qualify as a 

knowing and intelligent response to those two questions.” CR 16 at 21 (emphasis added). Despite 

his concern, the prosecutor did not ask the Court to confirm Mr. Shrout’s understanding of the 

nature of the charges and potential penalties.

Approximately two months later, Mr. Shrout appeared before the Court for arraignment on 

the Superseding Indictment. CR 68. As the Court advised him of the new felony charges and 

related penalties, it suddenly stopped and stated: “Let’s put it bluntly. You’re not competent to 

represent yourself, but you have a right to do that.” Id. at 6 (emphasis added). The Court 

nonetheless accepted Mr. Shrout’s choice “to be my own attorney without representation from [the 

Public Defender], but as standby counsel.” Id. at 8. The Court told him: “That’s your choice. I’ll 

accept that as a full and knowing decision, complying with the Faretta decision.” Id. at 8-9. 

Despite its contradictory pronouncement one minute earlier, the Court concluded: “I find, without 

doubt, he’s totally competent, and if he chooses to represent himself after advisement, that’s his 

legal right.” Id. at 9.

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On appeal, Mr. Shrout will argue that the government cannot sustain its burden of 

establishing the validity of the purported Faretta waiver given (1) the unequivocal statements that 

he did “not understand” the nature of the charges or potential penalties, and (2) the Court’s 

determination that he was “not competent” to represent himself. Because this mixed question of 

law and fact is “fairly debatable,” the motion to continue release pending appeal should be granted.

3. Sentencing Errors

Before sentencing, Mr. Shrout formally objected to the offense level computations set forth 

in the PSR. See PSR at ¶¶ 33-43. He objected to the application of U.S.S.G. § 2B1.1 because the

only actual loss resulted from his failure to file income tax returns. Because no loss—actual or 

intended—resulted from his production, presentation, or shipping of the fictitious financial 

instruments, he argued that the Court was required to use the tax guideline—U.S.S.G. § 2T1.1—

to calculate the guidelines range. The Court did not address his objection at sentencing. CR 175.9 

The evidence at trial established that the total amount of tax loss for the six years that Mr. Shrout 

failed to file tax returns was $157,895. See PSR at ¶ 89 and Sentencing Recommendation 

(Justification) (“the actual losses resulting from all of the conduct charged in the Superseding 

Indictment is limited to less than $160,000 in unpaid taxes.”). Accordingly, he argued that a base 

offense level of 16 applied under § 2T1.1(a)(1) and § 2T4.1(F) (Tax Table) (tax loss more than 

$100,000, but less than $250,000).

 

9 Mr. Shrout’s general objection to the proposed application of § 2B1.1 encompassed his specific 

objection to both the application of a 30-level increase under § 2B1.1(b)(1)(P) because the amount 

of “intended loss” was more than $550,000,000, PSR at ¶ 34, and the application of a 2-level 

increase under § 2B1.1(b)(10) because the offense involved “sophisticated means.” PSR at ¶ 36.

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a. Erroneous standard of proof

The Court not only applied the wrong guideline—§ 2B1.1—but it also applied a 30-level

increase under § 2B1.1(b)(1)(P). Its application of the enhancement was apparently based on a

finding that the amount of “intended loss” was more than $550,000,000. See PSR at ¶ 34.10 While 

the Court seems to have implicitly overruled Mr. Shrout’s objections, it made no finding on the 

issue of the standard of proof that applied. See CR 175.

Before sentencing, Mr. Shrout argued that the government was required to prove the 

amount of loss by clear and convincing evidence. He observed that the base offense level would 

increase from 7 (for losses of $6,500 or less) to 37 (for losses of more than $550,000,000) under 

U.S.S.G. § 2B1.1(b)(1)(A) & (P). Because the higher base offense level increased the resulting 

guideline range from 0-6 months to 210-262 months, he argued that the circumstances required 

the government to prove the loss amount by clear and convincing evidence. He cited both United 

States v. Treadwell, 593 F.3d 990 (9th Cir. 2010), and United States v. Pollock, 3:14–cr–00186–

BR, 2016 WL 1718192 (D. Or. Apr. 29, 2016), as support for his position that the “extremely 

 

10 Mr. Shrout objected to the use of the purported “face value” of the fictitious financial instruments 

as the measure for intended loss given the fact that no less than eight of the 10 instruments were 

purportedly worth more than $550,000,000 each—the minimal amount necessary to apply a 30-

level increase under the Guidelines. Two fictitious instruments (counts 8 and 9) had purported 

face values of $1 trillion dollars each; one instrument (count 5) had a purported face value of $500 

billion dollars; and six instruments (counts 1, 2, 3, 4, 6, and 10) had purported face values of $1 

billion, $1.9 billion, $10 billion, and $25 billion dollars. PSR at ¶¶ 20-21. Those figures were so 

outrageous, there was no real possibility that any person or entity would accept the “Monopoly 

money.” In fact, the purported face value of only three of the 10 instruments (counts 2, 3, and 7) 

was less than $5,102,981 million: the gross domestic product (GDP) of the world’s leading 

economy—the United States—in the second quarter of 2018. It was hardly surprising that no 

instrument was in fact negotiated by anyone.

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disproportionate effect” of the factor on his sentence required its proof by clear and convincing 

evidence.

The application of an incorrect standard of proof to enhancements with disproportionate 

impact constitutes plain error. United States v. Jordan, 256 F.3d 922, 930 (9th Cir. 2001). Indeed, 

as the Ninth Circuit has observed, “the application of the correct burden of proof at a criminal 

sentencing hearing is critically important.” Id. (citing Rose v. Clark, 478 U.S. 570, 580-82 (1986)); 

see also Fox v. Vice, 563 U.S. 826, 839 (2011) (“A trial court has wide discretion when, but only 

when, it calls the game by the right rules.”). Whether the district court applied the correct burden 

of proof is reviewed de novo. United States v. Kilby, 443 F.3d 1135, 1140 (9th Cir. 2006); United 

States v. Banuelos, 322 F.3d 700, 704 (9th Cir. 2003).

The Court at sentencing did not address the issue of the appropriate standard of proof. CR 

175. It is not possible to discern, therefore, whether it correctly applied the clear-and-convincing 

standard or the less demanding preponderance-of-the-evidence standard. On appeal, Mr. Shrout 

will argue that his sentence must be vacated and his case remanded for resentencing so that the 

Court may determine in the first instance whether the evidence is clear and convincing that the 

amount of intended loss exceeded $550 million. See United States v. Hymas, 780 F.3d 1285, 1293 

(9th Cir. 2015); Jordan, 256 F.3d at 933.11 Because this question is “fairly debatable,” the motion 

to continue release pending appeal should be granted.

 

11 It may not be necessary for the Ninth Circuit to reach the issue of the correct standard of proof 

for determining intended loss if it agrees with Mr. Shrout’s related argument that the Court should 

have applied the tax guideline—U.S.S.G. § 2T1.1—to calculate the guidelines range.

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b. Erroneous finding that the purported face value of the fictitious 

financial instruments qualified as “intended loss.”

Mr. Shrout objected in writing to the calculation of his sentencing range based on the 

amount of “intended loss” under § 2B1.1(b)(1)(P) (more than $550,000,000). He argued that the 

definition of “intended loss” did not apply because he had not intended or “purposely sought to 

inflict” the claimed pecuniary harm. U.S.S.G. § 2B1.1, comment. (n.3(A)(ii)). Citing evidence 

that he suffers from a mental disease or defect (i.e., delusional disorder), and that the defect 

contributed substantially to his commission of the offenses, he argued that the purported face value 

of the fictitious instruments did not qualify as “intended loss,” as that term is specifically defined 

by the Guidelines, because the disease prevented him from purposely or intentionally seeking to 

inflict pecuniary harm.

The Ninth Circuit reviews de novo a district court's interpretation of the sentencing 

guidelines. United States v. Dixon, 201 F.3d 1223, 1233, (9th Cir.2000). It reviews for clear error 

the factual findings underlying the sentencing decision. United States v. Barnes, 125 F.3d 1287, 

1290 (9th Cir.1997).

The Court did not address Mr. Shrout’s objection at sentencing. CR 175. On appeal, Mr. 

Shrout will argue that his sentence must be vacated and his case remanded for resentencing because 

the evidence offered to support the 30-level enhancement was factually and legally inadequate to 

qualify as “intended loss” and, therefore, the Court erred in its calculation of the sentencing range. 

This question is “fairly debatable” and, therefore, the motion to continue release pending appeal 

should be granted.

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c. Erroneous application of “sophisticated means” enhancement

Mr. Shrout formally objected to the application of a two-level increase under U.S.S.G. §

2B1.1(b)(10)(C). The Court did not address the objection. CR 175.

The Guidelines commentary provides a specific and narrow definition of the term 

“sophisticated means.” U.S.S.G. §2B1.1, comment. (n.9(B)). The term means “especially 

complex or especially intricate offense conduct pertaining to the execution or concealment of an 

offense.” Id. Two examples are provided. First, “in a telemarketing scheme, locating the main 

office of the scheme in one jurisdiction but locating soliciting operations in another jurisdiction 

ordinarily indicates sophisticated means.” Id. Second, “[c]onduct such as hiding assets or 

transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial 

accounts also ordinarily indicates sophisticated means.” Id.

There was no evidence that Mr. Shrout located offices in multiple jurisdictions in an effort 

to avoid detection; hid assets or transactions; or used fictitious entities, corporate shells, or offshore 

financial accounts. To the contrary, the fictitious instruments listed both his name and an account 

number “which matched [his] Social Security number.” PSR at ¶ 36. The instruments also 

contained his fingerprint and signature. PSR at ¶ 21. He shipped the instruments via the U.S. 

Postal Service and Federal Express. Related invoices bore not only his name and signature, but 

also his address and phone number. These undisputed facts demonstrate that he made no effort to 

conceal the offenses. Nor was the “offense conduct pertaining to the execution” of the offenses 

“especially complex or especially intricate.” To the contrary, it is difficult to conceive of a less 

complex or intricate scheme than this.

Most of the facts that the government cited as support for its argument that the 

“sophisticated means” enhancement applied did not pertain to “the execution or concealment of 

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[the] offense,” as the Commentary expressly requires. For example, while it is true that Mr. Shrout 

“operated a business” under his true and correct name (i.e., Winston Shrout Solutions in 

Commerce) and “received payments for services as a presenter at seminars,” those business 

activities did not pertain to “the execution or concealment” of the offense. The execution of the 

offenses bore no direct relationship to his operation of the business. His conduct pertaining to the 

execution of the offenses simply involved the production, presentation, and shipping of the 

instruments. Nor was there evidence of any effort to conceal the offenses. The fact that Mr. Shrout 

used his true name, signature, fingerprint, Social Security number, and mailing address to execute 

the offenses demonstrates that he made no attempt to conceal his conduct. Accordingly, the 

enhancement did not apply.

On appeal, Mr. Shrout will argue that his sentence must be vacated and his case remanded 

for resentencing for at least three alternative reasons. First, so that this Court may determine 

whether the evidence is clear and convincing that “the offense otherwise involved sophisticated 

means and the defendant intentionally engaged in or caused the conduct constituting sophisticated 

means.” U.S.S.G. § 2B1.1(b)(10)(B); see Jordan, 256 F.3d at 922. Second, because the evidence 

the government offered to support the enhancement was inadequate to qualify for the enhancement 

and, therefore, the Court miscalculated the sentencing range. Id. at 926. Third, because the Court 

provided insufficient reasoning to allow for meaningful appellate review. See Gall v. United States, 

552 U.S. 38, 50 (2007); United States v. Carty, 520 F.3d 984, 992 (9th Cir. 2008). Because each 

question is “fairly debatable,” the motion to continue release pending appeal should be granted.

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4. Competency Errors

a. Failure to hold a competency hearing before trial

There is an independent obligation upon the defense, the prosecution, and the Court to 

inquire into a defendant’s mental competence if a good faith basis to question competency arises 

during the criminal proceedings. See 18 U.S.C. § 4241(a) (obligation to raise issue “if there is 

reasonable cause to believe” that the defendant might not be competent); see also Pate v. Robinson, 

383 U.S. 375, 385 (1966) (“Where the evidence raises a ‘bona fide doubt’ as to a defendant’s 

competence to stand trial, the judge on his own motion” must hold a competency hearing). If a 

bona fide doubt regarding a defendant’s mental competence is raised, the district court must hold 

a competency hearing, which begins with an evaluation of the defendant’s mental competence 

performed by a court-appointed mental health professional. Pate, 383 U.S. at 385. If a reasonable 

judge would have a “genuine doubt” about the defendant’s competency to stand trial, failure to 

hold a competency hearing is plain error. United States v. Dreyer, 705 F.3d 951, 961 (9th Cir. 

2013) (citing Chavez v. United States, 656 F.2d 512, 516 (9th Cir. 1981)).

When Mr. Shrout appeared for arraignment on the initial Indictment, he admitted he was 

“kind of confused by the nature of this situation.” CR 67 at 6. He noted that “what’s confusing to 

me is that obviously this is not a tort case.” Id. at 7. He asked whether “[t]here has to be a 

commercial crime?” Id. He then asked what the proceeding was “based upon” and whether the 

“procedures of statutes of the United States” applied “to citizens or what?” Id. Later, when the 

Court inquired whether he understood the charges, Mr. Shrout stated: “No, sir.” Id. at 9. He 

subsequently repeated that he did not “understand them.” Id. And when the Court asked whether 

he understood the potential penalties, he again stated: “no, I do not understand them.” Id. at 10.

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The Court subsequently commented on the pro se pleadings that Mr. Shrout filed before 

the hearing. It told him:

Based on the documents you have submitted so far in this case, it is clear you do 

not know how to present a viable defense to the charges against you. The 

documents you have submitted purporting to be a lien and invoice and liquidation 

are null and void. They have no legal consequence at all. If these documents are 

intended to be the basis of your defense, you’re going to lose this case.

CR 16 at 11. Later, when Mr. Shrout informed the Court that he was “confused about the terms 

being used here” (i.e., assistance of counsel, standby counsel, and advisory counsel), the Court 

stated:

Here’s what I mean: You’ve got some theories ... about admiralty courts and all 

that stuff. It’s hogwash. It doesn’t exist in the law, but you have a right to make a 

record of it, as I’ve done for other tax protestors. A lawyer can’t assert that right 

for you. They just can’t do that. They can’t present to the Court spurious matters. 

You can if that’s your choice. But at the same time ... you can go ahead and assert 

your positions, even though I feel that they are without merit, but you have a right 

to put them on the record.

Id. at 13. Still confused, Mr. Shrout then said, “One more question: On the – at this advisory 

position, would an attorney be able to sign my name or any other documents that would pertain to 

me?” Id. at 14. He acknowledged he was having trouble “trying to understand what the advisory 

counsel would be.” Id. In the end, he posed the issue to the Court in a different fashion, asking 

“could he [standby counsel] create a liability in me?” Id. It was only after the Court agreed that 

Mr. Shrout would “sign all the documents” that he stated: “Okay. Would that – with that being 

the case, then I agree to the terms of the....” Id. Later, after Mr. Shrout had pleaded guilty, the 

Court noted its own confusion over the situation: “Well, in respect to this matter, he’s pleading 

guilty to the facts and if – do you have any basis of – I’ve – I still am confused as to what you want 

because you could go to trial before a judge or a jury.” Id. at 19.

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Approximately two months later, Mr. Shrout appeared before the Court for arraignment on 

the Superseding Indictment. CR 68. As the Court advised him of the charges and related penalties, 

it stopped and stated: “Let’s put it bluntly. You’re not competent to represent yourself, but you 

have a right to do that.” Id. at 6 (emphasis added). The Court also stated: “You don’t have the 

competency to know the first thing about cross-examining a witness, but....” Id. at 7. Finally, the 

Court noted: “I’ve said this before to people like you. You’re well meaning. You -- you are 

bizarre, however....” Id. (emphasis added).

Despite its observations and statements to the contrary, the Court ultimately accepted Mr. 

Shrout’s choice “to be my own attorney without representation from [the public defender], but as 

standby counsel.” CR 68 at 8. The Court told him: “That’s your choice. I’ll accept that as a full 

and knowing decision, complying with the Faretta decision.” Id. at 8-9. The Court concluded: “I 

find, without doubt, he’s totally competent, and if he chooses to represent himself after advisement, 

that’s his legal right.” Id. at 9.

This case presented unique, complex, and overlapping issues involving the right to selfrepresentation under Faretta, the role of standby counsel under McKaskle v. Wiggins, 465 U.S. 

168 (1984), and client autonomy under McCoy v. Louisiana, 138 S. Ct. 1500 (2018). Here, Mr. 

Shrout’s conduct both in and out of the courtroom created a genuine doubt as to his competency 

to stand trial. Secondarily, the doubt also related to whether Faretta required the Court to decide 

whether mental illness impacted the exercise of that right. Indiana v. Edwards, 554 U.S. 164 

(2008). But the Court failed to order a competency hearing sua sponte.

On appeal, Mr. Shrout will argue that because the evidence of incompetence was such that 

a reasonable judge would be expected to experience a genuine doubt respecting his competence, 

the failure to order a competency hearing sua sponte is plain error. The fact that two mental health 

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experts later found that he suffered from a mental disease or defect (i.e., delusional disorder) 

supports his argument. Because this question is “fairly debatable,” the motion to continue release 

pending appeal should be granted.

b. Erroneous competency finding before sentencing

Mr. Shrout was convicted after trial of all 19 counts set forth in the Superseding Indictment. 

CR 110. A few days later, he changed his mind and asked the Court to appoint counsel to represent 

him in all subsequent proceedings. The Court granted his request and appointed counsel. CR 112.

Defense counsel subsequently filed a motion for a hearing to determine mental 

competency. CR 129. Counsel submitted a psychological evaluation by a local mental health 

expert, Dr. Martin, in support of the motion. She found that Mr. Shrout was not malingering, did 

suffer from a mental disease or defect, namely, delusional disorder, and he was not competent to 

proceed to sentencing. Based on that report, the Court granted the motion for a competency 

hearing and ordered a further evaluation by another expert, Dr. Lopez. CR 141 and 173.

Dr. Lopez submitted her report to the Court before the hearing. She opined that Mr. Shrout 

was not malingering, did not suffer from a mental disease or defect, and was competent. The 

defense also submitted a report from a third expert, Dr. Millkey. He too agreed that Mr. Shrout 

was not malingering. He found that while Mr. Shrout did suffer from delusional disorder, he was 

competent to proceed.

The Court held a competency hearing. CR 153 and 174. Dr. Lopez and Dr. Millkey both 

testified. Id. Dr. Martin did not. At the conclusion of the hearing, the Court succinctly ruled as 

follows:

My ruling is clear that he is competent to proceed to sentencing. He may have 

delusional beliefs. He may not be medically diagnosed as such, but as far as I’m 

concerned, he is fully competent to address any matters pertaining to sentencing....

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CR 174 at 81.

On appeal, Mr. Shrout will raise at least two related arguments with respect to the contested 

issue of his competency to proceed to sentencing. First, because the test of his competency is 

whether he has a sufficient present ability to consult with his lawyer with a reasonable degree of 

rational understanding and whether he has a rational as well as factual understanding of the 

proceedings against him, the record does not sufficiently support the Court’s cursory finding of 

competency. Dusky v. United States, 362 U.S. 402 (1960). Second, the Court erred by finding 

him competent because “a preponderance of the evidence [established that Mr. Shrout was] 

presently suffering from a mental disease or defect rendering him mentally incompetent.” 18 

U.S.C. § 4241(d); see United States v. Benson, No. 12-CR-00480-YGR-1, 2015 WL 1064738, at 

*5 (N.D. Cal. Mar. 11, 2015) (“In federal court, the government, not the defendant, bears the 

burden.”).

D. The Fourth Handy Factor: Effect on Conviction or Sentence

As demonstrated, there are several “fairly debatable” questions for the appellate court, some 

of them novel, that, if any one of them is resolved in Mr. Shrout’s favor, will result in at least 

resentencing, if not reversal. Accordingly, he respectfully asks the Court to grant his request 

to remain on release pending appeal, pursuant to 18 U.S.C. § 3143(b).

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IV. CONCLUSION

For each of the foregoing reasons, Mr. Shrout respectfully requests that the Court grant his 

motion and enter an Order permitting him to continue on his current conditions of release while 

pending appeal.

RESPECTFULLY submitted this 10th day of December, 2018.

/s/ Ruben L. Iñiguez

Ruben L. Iñiguez

Assistant Federal Public Defender

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