United States v. Muhanad Badawi

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 23, 2024
• Docket: 21-55944
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 23 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, No. 21-55944

Plaintiff-Appellee, D.C. No. 8:15-cr-00060-DOC-2 v.

MUHANAD ELFATIH M.A. BADAWI, MEMORANDUM*

Defendant-Appellant.

Appeal from the United States District Court for the Central District of California David O. Carter, District Judge, Presiding

Argued and Submitted April 8, 2024 Pasadena, California

Before: BERZON and MENDOZA, Circuit Judges, and BOLTON,** District Judge.

Muhanad Badawi appeals the denial of his motion to vacate, set aside, or

correct his sentence under 18 U.S.C. § 2255. Badawi was convicted of conspiracy

to provide and aiding and abetting an attempt to provide material support—in the

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Susan R. Bolton, United States District Judge for the District of Arizona, sitting by designation. form of personnel—to a foreign terrorist organization. 18 U.S.C. § 2339B. He was

also convicted of financial aid fraud stemming from his use of Pell Grant funds to

purchase a plane ticket for his co-defendant to travel internationally. 20 U.S.C.

§ 1097(a). “We review de novo a district court’s decision to grant or to deny a

petition for habeas corpus.” Martinez-Villareal v. Lewis, 80 F.3d 1301, 1305 (9th

Cir. 1996).

1. Badawi first argues that he is “factually innocent” of “misappl[ying]”

financial aid funds under § 1097(a) because his use of Pell Grant funds to purchase

a plane ticket for someone else did not involve the “conversion” of funds, which he

contends is a required element of the crime. Badawi did not advance this position

at trial and did not challenge his financial aid fraud conviction on this ground, or

any other, on direct appeal. “Where a defendant has procedurally defaulted a claim

by failing to raise it on direct review, the claim may be raised in [a § 2255 petition]

only if the defendant can first demonstrate either ‘cause’ and actual ‘prejudice,’ or

that he is ‘actually innocent.’” Bousley v. United States, 523 U.S. 614, 622 (1998)

(citations omitted).

Construing Badawi’s innocence claim as a challenge to the sufficiency of the

evidence,1 a claim cognizable in a § 2255 proceeding, he may proceed only “if the

1 Badawi did not in his briefing rely on Herrera v. Collins to assert a “freestanding claim[] of actual innocence,” 506 U.S. 390, 401 (1993), nor does he

2 settled procedural prerequisites for such a claim have otherwise been satisfied.”

Jackson v. Virginia, 443 U.S. 307, 324 (1979); see also United States v. Johnson,

988 F.2d 941, 945 (9th Cir. 1993) (concluding that the defendant must demonstrate

cause and prejudice to excuse the procedural default of an insufficiency-of-the-

evidence claim under § 2255). Ineffective assistance of trial counsel or counsel on

direct appeal may constitute cause for procedural default. See Murray v. Carrier,

477 U.S. 478, 488 (1986); United States v. Ratigan, 351 F.3d 957, 964–65 (9th Cir.

2003) (applying Murray to a sufficiency-of-the-evidence claim raised in a § 2255

petition); United States v. Withers, 638 F.3d 1055, 1064–65 (9th Cir. 2011)

(recognizing ineffective assistance of appellate counsel as “cause” for procedural

default). To establish that counsel was constitutionally ineffective, petitioner must

show (1) that counsel’s performance was deficient, and (2) that he was prejudiced

by the deficient performance. Strickland v. Washington, 466 U.S. 668, 687 (1984).

Badawi contends trial and appellate counsel were ineffective for failing to

challenge his conviction under § 1097(a) on the ground that the government failed

to prove the element of conversion. Although the statute does not refer to

“conversion,” the Seventh and Eleventh Circuits have held that a conviction for

allege that his innocence should serve as a “gateway” to excuse the default of another constitutional claim under Schlup v. Delo, 513 U.S. 298, 316 (1995). He did rely on Jackson v. Virginia, 443 U.S. 307, 309 (1979). We therefore construe his argument that he is factually innocent of financial aid fraud as a constitutional sufficiency-of-the-evidence challenge.

3 “misappl[ying]” financial aid funds under 20 U.S.C. § 1097(a) requires proof of

conversion, defined as “an act of dominion or control over the property that

seriously interferes with the owner’s rights.” United States v. Kammer, 1 F.3d

1161, 1165 (11th Cir. 1993), disapproved of on other grounds by Bates v. United

States, 522 U.S. 23 (1997) (citation omitted); see United States v. Bates, 96 F.3d

964, 968–70 (7th Cir. 1996); United States v. Weaver, 275 F.3d 1320, 1328–29

(11th Cir. 2001). The Supreme Court has not decided whether conversion is an

element of misapplication under § 1097(a), although it mentioned the Seventh

Circuit’s definition in Bates v. United States. 522 U.S. at 31 n.7.

And, in analyzing a statute prohibiting the conversion of government

property, 18 U.S.C. § 641, the Supreme Court noted that “[c]onversion may

include misuse or abuse of property” and encompasses “use in an unauthorized

manner or to an unauthorized extent of property placed in one’s custody for limited

use.” Morissette v. United States, 342 U.S. 246, 272 (1952); see also United States

v. Andreen, 628 F.2d 1236, 1241 (9th Cir. 1980) (citing Morissette’s definition in

analyzing conversion of employee welfare assets under 18 U.S.C. § 664); United

States v. Eriksen, 639 F.3d 1138, 1145, 1150 (9th Cir. 2011), as amended on denial

of reh’g (May 23, 2011); United States v. Thordarson, 646 F.2d 1323, 1335 & n.22

(9th Cir. 1981) (citing Morissette’s definition in interpreting conversion of union

funds under 29 U.S.C. § 501(c)).

4 Considering that there is no language in the financial aid fraud statute

referring to conversion, as well as the absence of binding precedent on whether

conversion is a required element of misapplication under § 1097(a) and, if so, what

conversion means in this context, Badawi’s counsel was not constitutionally

deficient for failing to raise a defense on this ground.2 The “failure to recognize

every possible legal argument, including the arguably insufficient proof offered by

the government as to one element of the crime, does not . . . constitute cause” to

excuse procedural default. Ratigan, 351 F.3d at 965.

Further, a defense attorney’s strategic choices are given “a heavy measure of

deference,” Strickland, 466 U.S. at 691, and “a reviewing court is not free to

engage in after-the-fact second-guessing of strategic decisions made by defense

counsel,” United States v. Claiborne, 870 F.2d 1463, 1468 (9th Cir. 1989). “Once

counsel reasonably selects a defense, it is not deficient performance to fail to

pursue alternative defenses.” Rios v. Rocha, 299 F.3d 796, 807 (9th Cir. 2002).

Here, Badawi’s trial counsel argued that the defendant did not misapply Pell Grant

funds because he was reimbursed for the plane ticket in cash, which he permissibly

used for living expenses. The district court allowed that defense to go to the jury,

although the defense did not prevail. Given counsel’s reasonable strategic choice,

2 We make no ruling on the merits of whether conversion is a required element of misapplication of financial aid funds under § 1097(a).

5 her conduct was not “error[] . . . so serious as to deprive [Badawi] of a fair trial,”

Strickland, 466 U.S. at 687, and so does not constitute cause for the procedural

default of the conversion interpretation of 20 U.S.C. § 1097(a) at trial and on direct

appeal.

In sum, no cause exists to excuse the default of a constitutional sufficiency-

of-the-evidence challenge to the financial aid fraud conviction.

2. Badawi separately contends that trial counsel was ineffective for

failing to object to and correct various misstatements of law concerning the

financial aid fraud charge, and that appellate counsel was ineffective for failing to

raise the same issues. The “failure to raise an ineffective-assistance-of-counsel

claim on direct appeal does not bar the claim from being brought in a later,

appropriate proceeding under § 2255.” Massaro v. United States, 538 U.S. 500,

509 (2003).

Counsel was not constitutionally ineffective for failing to object to “lay legal

opinion” testimony by a Department of Education employee that the recipient of a

Pell Grant is not “allowed to use his own . . . funds to provide something to

someone else.” To establish prejudice under Strickland v. Washington, a defendant

must show “there is a reasonable probability that, but for counsel’s unprofessional

errors, the result of the proceeding would have been different.” 466 U.S. at 694.

Here, other evidence was before the jury concerning the purpose of and limits on

6 the use of Pell grants. There is no reasonable probability that absent the contested

testimony, the jury would have found that the use of Pell Grant funds to purchase a

plane ticket for a friend was consistent with the terms of the grant.

Nor was counsel deficient for failing to object to the prosecution’s reliance

in closing argument on the testimony of the Department of Education employee to

argue that Badawi violated § 1097(a). The Ninth Circuit has “repeatedly held that,

‘absent egregious misstatements,’ failing to object to error during closing argument

falls within the ‘wide range’ of reasonable assistance.” Demirdjian v. Gipson, 832

F.3d 1060, 1073 (9th Cir. 2016) (quoting Cunningham v. Wong, 704 F.3d 1143,

1159 (9th Cir. 2013)). The prosecutor’s statements were not so “egregious” or

“inflammatory” as to require correction. Zapata v. Vasquez, 788 F.3d 1106, 1116

(9th Cir. 2015).

Because counsel’s failure to object to the introduction of the testimony or

the prosecution’s closing argument was not ineffective, counsel similarly was not

deficient for failing to request jury instructions correcting the alleged errors, or to

move for acquittal or for a new trial based upon the prosecution’s argument.

Finally, because we have concluded that trial counsel did not fall below “prevailing

professional norms” for failing to challenge the sufficiency of the evidence

concerning conversion, Strickland, 466 U.S. at 690, counsel was similarly not

deficient for failing to request an instruction defining “misapplies.”

7 3. Finally, Badawi contends counsel was ineffective for failing to

challenge his consecutive sentences for conspiracy and aiding and abetting an

attempt to provide material support to a terrorist organization. Badawi argues that

U.S.S.G. § 5G1.2(d), which directs the court to impose consecutive sentences

under the circumstances that exist here, conflicts with 28 U.S.C. § 994(l)(2), which

directs the Sentencing Commission to “insure that the guidelines . . . reflect . . . the

general inappropriateness of imposing consecutive terms of imprisonment for an

offense of conspiring to commit an offense . . . and for an offense that was the sole

object of the conspiracy.”

The language of § 994(l)(2) refers to the “general inappropriateness” of

consecutive sentences for conspiracy and its object; it does not prohibit provision

for consecutive sentences in all circumstances. So recognizing, Badawi’s argument

has been rejected by every circuit court directly to consider it. See United States v.

Saccoccia, 58 F.3d 754, 786–87 (1st Cir. 1995); United States v. Kapaev, 199 F.3d

596, 598 (2d Cir. 1999) (per curiam); United States v. Kleinebreil, 966 F.2d 945,

952 (5th Cir. 1992); accord United States v. Wade, 788 F.2d 722, 722 (11th Cir.

1986) (per curiam). Given that neither the language of the statute nor existing case

law supports Badawi’s argument, defense counsel’s failure to make the argument

at sentencing did not “f[a]ll below an objective standard of reasonableness.”

Strickland, 466 U.S. at 688.

8 AFFIRMED.