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United States v. Teves

United States District Court, D. Hawaii

December 19, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
PILIALOHA K. TEVES (03), Defendant. CR. 11-00503 JMS (03),

          ORDER: (1) DENYING DEFENDANT'S MOTION UNDER 28 U.S.C. § 2255 TO VACATE, SET ASIDE, OR CORRECT SENTENCE BY A PERSON IN FEDERAL CUSTODY, ECF NO. 433; AND (2) DENYING A CERTIFICATE OF APPEALABILITY

          J. Michael Seabright Chief United States District Judge.

         I. INTRODUCTION

         On October 22, 2013, after a three-week jury trial, Defendants Pilialoha K. Teves (“Teves”) and Mahealani Ventura-Oliver (“Ventura-Oliver”) (collectively, “Defendants”) were found guilty of multiple counts relating to a fraudulent debt assistance program as charged in a September 1, 2011 Superseding Indictment (“SI”).[1] On February 21, 2014, the court entered a judgment sentencing Teves to a term of 42 months incarceration, imposed a restitution obligation, and ordered that she forfeit all interest in specific properties. ECF No. 307. Currently before the court is Teves' Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside or Correct Sentence By a Person in Federal Custody (“§ 2255 Motion”). ECF No. 433.

         Teves' § 2255 Motion alleges that she received ineffective assistance of counsel as to the forfeiture order and seeks a reduction of the forfeiture money judgment. She neither challenges the validity of her conviction or sentence nor seeks release from custody. For the reasons discussed below, the § 2255 Motion and a Certificate of Appealability are DENIED.

         II. BACKGROUND

         Teves and four co-defendants were charged with conspiracy and mail fraud offenses arising out of their promotion and operation of a debt elimination scheme. Defendants were associated with groups based in Maui known as the “Hawaiiloa Foundation, ” “Ko Hawaii Pae Aina, ” and “The Registry” (collectively, “HLF”), and they allegedly conducted seminars on Maui offering to teach individuals about Hawaiian history and property rights. They also marketed a debt assistance program claiming to eliminate mortgage, credit card, and other debt in exchange for a fee. Through HLF, Defendants offered to provide individuals “bonds” and other legal documents to pay their debts by drawing on fictitious accounts purportedly established for each individual at his or her birth and maintained by the United States Treasury and the State of Hawaii. Defendants caused these individuals to send these “bonds” and other legal documents to the United States Treasury, the Federal Reserve Bank, the State of Hawaii, and their creditors as a purported means of discharging their debts and forestalling mortgage foreclosures and debt collection efforts. HLF obtained approximately $468, 000 from these individuals. The SI sought entry of a personal forfeiture money judgment in that amount, and the forfeiture of bank accounts, cash, collectible coins, and vehicles that were proceeds of the offenses.

         Following trial, Teves was found guilty of twelve counts of mail fraud, and acquitted of three other counts of mail fraud (for events occurring prior to July 9, 2008). Verdict Form, ECF No. 243. On December 17, 2013, this court entered a preliminary order of forfeiture against Teves that provided for the entry of a money judgment of $468, 000. ECF No. 281. At the February 10-11, 2014 sentencing hearing, because Teves was acquitted of counts relating to conduct prior to July 9, 2008, the court reduced the amount in the preliminary forfeiture order to $369, 622.01, reflecting the amount of proceeds received by HLF during Teves' participation in the conspiracy. ECF No. 303. Judgment was entered on February 21, 2014, sentencing Teves to a term of 42 months incarceration, imposing a restitution obligation, ordering that she forfeit all interest in specific properties, and ordering that the final order of forfeiture include a money judgment of $369, 622.01. ECF No. 307.

         Following Teves' sentencing, Ventura-Oliver contested the forfeiture allegations, and sought a reduction of the money judgment by the value of the assets seized. The seized assets had not been sold due to a stay in the execution of forfeiture pending direct appeals.[2] ECF No. 383. The Government, having agreed that the value of the seized assets was $195, 472, sought a money judgment of $272, 528, which represented the $486, 000 derived from the scheme, less the $195, 472 value of the other seized assets as proceeds of the scheme. On June 13, 2014, the court entered a preliminary order of forfeiture against Ventura-Oliver that provided for a money judgment of $272, 528. ECF No. 352.

         On January 23, 2015, the court entered a final order of forfeiture against Teves, acknowledging that the money judgment against Ventura-Oliver was reduced by the value of the seized property, but noting that the preliminary order of forfeiture against Teves had become final at the time of sentencing and therefore, the court lacked jurisdiction to grant a similar reduction. ECF No. 416.

         In her direct appeal, Teves challenged both her conviction and the court's failure to reduce the money judgment by the value of the seized assets. On October 15, 2015, the Ninth Circuit affirmed Teves' judgment in all respects. See Teves, 621 F. App'x 486, 487 (9th Cir. 2015). The Ninth Circuit noted that imposition of criminal forfeiture is “subject only to statutory and constitutional limits, ” and that under 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c), Teves must forfeit “the proceeds of her criminal activity.” Id. (citing United States v. Newman, 659 F.3d 1235, 1240 (9th Cir. 2011)). In affirming Teves' judgment the Ninth Circuit explained:

Teves cites no case that requires a district court to order an offset against a personal money judgment by the value of the seized property before the property is sold. In the absence of such controlling authority, we conclude that the district court did not plainly err by failing to order the offset. In the event that Teves' personal money judgment is not offset by the proceeds of the forfeiture sale, and the Government attempts to collect in total more than the facial amount, Teves will be free to raise the challenge at that time.

Id. at 487-88.

         III. STAN ...


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