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76 - Gov - Uscourts.ord.124749.76.0
76 - Gov - Uscourts.ord.124749.76.0
Legal Document
Oregon District Court
Case No. 3:15-cr-00438
USA v. Shrout
Document 76
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Ruben L. Iiguez
Assistant Federal Public Defender
101 SW Main Street, Suite 1700
Portland, OR 97204
Tel: (503) 326-2123
Fax: (503) 326-5524
Email: [email protected]
Advisory Counsel for Pro Se Defendant
WINSTON SHROUT,
[HEARING REQUESTED]
Defendant.
Iiguez, submits this reply memorandum in support of his Motion to Dismiss Counts 1
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
of vindictiveness and justify the prosecutors decision to increase the severity of the
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
ARGUMENT
As an initial matter, it is important to note that the government misstates the legal
Contrary to its assertion, the courts do not require a defendant to present exceptionally
The government quotes the Supreme Courts decision in McCleskey as support for
its claim that exceptionally clear proof is required before a court may infer an abuse of
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
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 McCleskeys case acted with [racially] discriminatory
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
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
v. Goodwin, 457 U.S. 368, 373 (1982). See also United States v. Kent, 649 F.3d 906, 912 (9th
F.2d at 906. See also Hooton, 662 F.2d at 633 (the mere appearance of vindictiveness gives
Once a presumption of vindictive motive arises, the prosecution has the burden
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,
making the statement referenced by the government, the court was addressing an equal protection claim
of selective prosecution based on race.
The government misapprehends the nature of the showing that Mr. Shrout must
why the Government would be motivated to seek additional charges to punish [him].
GR at 6. Contrary to the governments assertion, Mr. Shrout has no burden to discern the
motive underlying the prosecutors vindictive actions. As previously noted, his only
The following undisputed circumstances are more than sufficient to give rise to a
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 fact, the evidence establishes that the governments 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.
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.
5. The government did not seek to indict Mr. Shrout on any felony, including
a violation of 18 U.S.C. 514.
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.
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.
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 self-
representation, 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
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
government itself concedes, it had been investigating Mr. Shrout for several years, and
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?
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,
however, is that no evidence of any subpoena returned after February 3, 2016, exists
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
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
3The 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.
notion that Mr. Wexler, in both his conversation and written email, may have been
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.
of the subpoenas referenced by the [prosecutor] in [his] conversation [and email] with
proof of vindictiveness. Id. The answer is clear. While the prosecutors claim that his
decision to file superseding felony charges rested on the return of the still unseen
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.
prosecutors 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 prosecutors statement that he perceived the liens to be
repeated attempts to plead guilty to the misdemeanor indictment, his exercise of his
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 camels 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 teams 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.
or testamentary, to support its position. It does not offer the relevant document. And it
of events relative to the prosecution teams alleged receipt of the document at or about
the time of the original indictment.4 Having introduced no evidence, the government has
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
explain the prosecutors decision to charge those eleven felonies when, only 57 days
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
4At 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.
failed to sustain its burden of proof, all 13 felony charges alleged in the Superseding
V. In The Alternative, If The 13 Felony Counts Are Not Dismissed On This Showing,
The Government Should Produce Any Evidence Concerning The Prosecution Teams
Decision To File Superseding Charges, Including Email And Other Correspondence,
For In Camera Inspection.
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
The governments mere assertions are plainly insufficient to sustain its burden to
explanation for his decision to filing superseding charges (i.e., awaiting on the return of
5The 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.
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 defenses prima facie showing of vindictiveness, Mr. Shrout
this motion.
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.