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Shin v. United States

United States District Court, D. Hawaii

August 15, 2016

PATRICK SHIN, Petitioner,
UNITED STATES OF AMERICA, Respondent. Crim. No. 04-00150 SOM


          Susan Oki Mollway United States District Judge


         Defendant Patrick Shin pled guilty with a plea agreement to having made a false statement to the Government in violation of 18 U.S.C. § 1001. He was sentenced in 2006 to three years of probation and a fine. He has already completed his term of probation and paid the applicable fine. Shin now challenges his conviction, over nine years after it was imposed, through the common law writs of coram nobis and audita querela.

         In his Verified Petition for Writ of Error Coram Nobis, or Alternatively, for Writ of Audita Querela, Shin argues that recently discovered exculpatory evidence should have been disclosed by the Government to Shin before he entered his guilty plea. Specifically, Shin contends that the Government wrongfully withheld evidence that Wesley Choy, a Department of the Navy engineer involved in the contracting process, could not have testified as to an essential element of the false statement charge. Shin says that his conviction should therefore be vacated.

         Before the court are appeals from discovery orders by the Magistrate Judge. Shin had contacted the Government about deposing Choy, as well as another Navy employee involved in the contracting process, Annette Ching. When the Government declined to permit the depositions, Shin moved for a court order permitting them. The Magistrate Judge issued a minute order granting Shin’s request to depose Choy, but denying him leave to depose Ching.

         The Government appealed the Magistrate Judge’s ruling as to Choy. Shin asked the Magistrate Judge to reconsider the denial of the request to depose Ching. The Magistrate Judge denied reconsideration, and Shin filed his own appeal as to Ching’s deposition.

         For the reasons discussed below, this court affirms the Magistrate Judge’s denial of leave to take Ching’s deposition, but reverses the grant of leave to take Choy’s deposition.

         II. BACKGROUND.

         At all times material to the conviction, Shin was authorized to act as an agent on behalf of JHL Construction, Inc., a general contracting company owned by Shin’s nephew, James Lee. See ECF No. 1, PageID # 8.[1]

         In 2003, JHL was awarded a job order contract (“JOC”) by the Navy. JOCs are based on pre-priced construction tasks. The prices typically come from a unit price book. See id. The Navy’s unit price books list average costs that might be higher or lower than the actual costs in a particular local economy. See id., PageID # 10. Using the unit prices relied on by a customer such as the Navy, a contractor proposes an appropriate coefficient to apply to the unit prices in order to cover overhead and profit, thereby arriving at the contract cost. See id., PageID #s 10-11.

         JHL anticipated that the unit prices would exceed JHL’s actual costs. See id., PageID #s 12-13. Because JHL would make a profit without adding any coefficient, JHL proposed a 0% coefficient and was awarded a zero coefficient contract. See id., PageID #s 8-13.

         Once awarded to a contractor, a JOC allows an agency to approach and negotiate with the contractor directly, as construction needs come up. See id. In August 2003, the Navy asked JHL to provide a proposal under the JOC for the overhaul of Pump # 2, Drydock # 4, at Pearl Harbor Naval Shipyard. See id., PageID #s 13-14. The Navy was under pressure to award a number of work orders by the end of the Government’s fiscal year (September 30, 2003), and assigning the Pump # 2 project to JHL’s JOC was seen as a quick way to use current year funding. See id.

         JHL provided a proposal for $2, 360, 153, which was forwarded to the Navy’s Engineering Department for a technical review of the costs. See id., PageID # 31. Wesley Choy, a mechanical engineer with the Navy’s Engineering Department, questioned the costs, which he viewed as high. See id., PageID #s 18-19. The costs were not broken down, and he could not tell how the final number had been reached. See id. Choy asked the contract administrator, Annette Ching, to get subcontractor quotes from JHL to substantiate the proposal costs. See id.

         On August 26, 2003, JHL submitted a second proposal for the reduced amount of $2, 205, 138. See id., PageID # 31. The second proposal did not include either a line item breakdown of costs or the requested subcontractor quotes. Choy asked Shin for the subcontractor quotes from the proposed subcontractors, HSI Electric, Inc., and Alfred Conhagen, Inc. See id.

         On September 4, 2003, Shin called HSI and asked it to mark up its quote by $100, 000, but to invoice JHL the original amount without the $100, 000 markup. See Crim. No. 04-00150, ECF No. 64, ¶ 15. HSI contacted the FBI to inform it of Shin’s request. See ECF No. 1, PageID # 23.

         As directed by the FBI, HSI then gave Shin the requested quote with the inflated price. See id., PageID # 24. However, instead of submitting this quote to the Navy, Shin submitted HSI’s quote from July 10, 2003, which concerned work on Pump # 1. See Crim. No. 04-00150, ECF No. 64, ¶ 17. Shin used white-out to alter the $114, 733 price on the 2003 quote to $314, 733. See id.

         On September 4, 2003, Shin asked Conhagen to increase its quote by $180, 000, bringing the contract amount from $377, 260 to $557, 260. Conhagen provided Shin with the requested quote for $557, 260. See id., ¶ 18.

         On September 8, 2003, Shin met with Choy and Ching, providing them with the altered quotes from HSI and Conhagen and ultimately submitting JHL’s best and final offer of $2, 150, 000. See ECF No. 1, PageID # 29.

         On September 23, 2003, federal agents executed a search warrant at Shin’s business office. See id., PageID # 25. Shin confessed at that time to having submitted altered and inflated figures for the Pump # 2 job, explaining that the real subcontractor quotes would not have supported the cost proposal and would have caused the Navy to question the legitimacy of the proposal. See Crim. No. 04-00150, ECF No. 64, ¶ 20. He said that, while Conhagen had provided an inflated quote as he had requested, HSI’s failure to do so right away had caused him to doctor HSI’s quote from a previous job. See id.

         The Pump # 2 project did not involve pre-priced tasks listed in the Navy’s unit book. For that reason, performing work on Pump # 2 under JHL’s zero coefficient JOC did not allow JHL to recover any overhead or profit. Shin said the inflated subcontractor quotes were requested as a way to provide for overhead and profit. See id.

         The Government charged Shin with making a false statement to a federal official. On April 21, 2004, pursuant to a memorandum of plea agreement, Shin pled guilty to having made a false statement to the United States. See Crim. No. 04-00150, ECF No. 8. On March 8, 2006, Shin was sentenced to three years of probation, with twelve days in intermittent confinement, and a fine of $100, 000. See Crim. No. 04-00150, ECF No. 99.

         During sentencing proceedings, Shin argued that the Pump # 2 job was not pre-priced and therefore had been improperly assigned under JHL’s zero coefficient JOC, depriving JHL of a chance to recover overhead and profit. See id., Page #s 22-26. Shin contended that he had altered the subcontractor quotes only to recover a reasonable profit on the job. See id., Page # 24. He denied any malicious intent, but acknowledged that the way he had handled the situation was wrong. See id., Page # 57. This court determined that “there was clearly an intent to deceive, ” and called the offense a “dishonesty kind[] of crime[], ” see id., Page # 53, but imposed a sentence that reflected the court’s determination that the Government had failed to prove that Shin had intended to cause a loss. See id., Page # 37.

         Afer he was sentenced, Shin reached out to Choy several times to talk about Choy’s role in the prosecution and to ask him for a written statement. See Crim. No. 04-00150, ECF No. 91, PageID # 271. Choy originally said that Government lawyers had told him not to provide any such written statement without approval from the U.S. Attorney’s Office. See id., PageID #s 271-72. Ultimately, in approximately April 2014, Choy provided a typed, unsigned “clarification” statement regarding his role in the contracting process. See id., PageID # 272.

         Choy’s “clarification” statement includes the following points: 1) he recalled having stated at a meeting with Shin in 2003 that he understood that Shin needed to “roll” overhead and profit into the line items, given the zero coefficient contract, but that that was a contractual rather than technical issue; 2) imposing a zero coefficient contract on JHL would not be fair or reasonable; 3) Choy was surprised to hear that the project had a zero coefficient; and 4) Choy had turned the issue over to the contracting officer as the person authorized to resolve the matter. See Crim. No. 04-00150, ECF No. 91-2.

         In May 2015, Shin spoke with Choy regarding Choy’s communications with “the Prosecutor and the Prosecutor’s investigators.” See Crim. No. 04-00150, ECF No. 91, PageID # 276. Unbeknownst to Choy, Shin tape recorded the conversation. See ECF No. 12-3. When Shin asked Choy whether he had communicated to the Government personnel any of the points made in his April 2014 “clarification” statement, Choy allegedly stated that he had told the Government personnel (i.e., “the Prosecutor and the Prosecutor’s investigators”) that he did not have the authority to decide whether JHL needed to be awarded extra money in the zero coefficient contract to cover its legitimate and reasonable overhead and profit. See Crim. No. 04-00150, ECF No. 91, PageID #s 277-78. Choy also allegedly told Shin: 1) the prosecuting authorities “point[ed] the gun” on him regarding his authority to decide the zero coefficient issue; 2) the prosecuting authorities “hid” the fact that Choy was not authorized to deal with the zero coefficient issue; 3) the prosecuting authorities only “hear what they want to hear . . . to make their case”; and 4) the declaration that the prosecuting authorities had Choy sign was “sneaky” and “twist[ed]” the facts he had given the Government personnel. See id.

         On September 22, 2015, Shin moved for a writ of coram nobis or, in the alternative, audita querela to: 1) vacate Shin’s federal criminal conviction on one count of False Statement pursuant to 18 U.S.C. § 1001(a)(3); and 2) grant Shin leave to withdraw his prior guilty plea in this case. See id., PageID # 243.

         As noted earlier, Shin moved for leave to take the depositions of Choy and Ching in aid of supporting his request for a writ of coram nobis or audita querela. See ECF No. 14. Before the Government could respond to the motion for leave to take the depositions, the Magistrate Judge issued a minute order granting Shin’s request to depose Choy, but denying his request to depose Ching. See ECF No. 15. The Magistrate Judge explained, “Based on the factual issues raised in the United States’ Opposition, Petitioner Patrick Shin has demonstrated good cause to allow him to take the deposition of Wesley Choy. The Court finds that Petitioner Patrick Shin has failed to demonstrate good cause to take the deposition of Annette Ching.” See id.

         The Government appealed the Magistrate Judge’s grant of leave to depose Choy. See ECF No. 17. Shin sought reconsideration of the denial of his request to depose Ching. The Magistrate Judge denied Shin’s reconsideration motion, see ECF No. 21, and Shin appealed the denial of leave to depose Ching, see ECF No. 23.

         III. ANALYSIS.

         Shin sought discovery in connection with both his request for a writ of coram nobis and his request for a writ of audita querela. See ECF No. 1. However, as Shin is aware, a writ of error audita querela is a writ of last resort available only when all other post-conviction remedies have been exhausted. See United States v. Valdez-Pacheco, 237 F.3d 1077, 1080 (9th Cir. 2001); see also United States v. Baptista, No. CR 10-00050 PJH, 2013 WL 4014965, at *3 (N.D. Cal. Aug. 5, 2013). Shin seeks a writ of audita querela only as an alternative to a writ of coram nobis. See ECF No. 1. Because Shin’s request for a writ of coram nobis is still pending, it is premature at this point for Shin to seek discovery in aid of a writ of audita querela. Accordingly, this court addresses Shin’s discovery request in the context of only his request for a writ for coram nobis.

         A. Applicable Standards.

         1. Appeal of a Nondispositive Matter.

         Pursuant to 28 U.S.C. § 636(b)(1) and Local Rule 74.1, a party may appeal to a district judge any pretrial nondispositive matter determined by a magistrate judge. Under 28 U.S.C. § 636(b)(1)(A), a magistrate judge’s order may be reversed by a ...

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