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Abu-Shawish v. United States

United States Court of Appeals, Seventh Circuit

July 31, 2018

Mhammad Abu-Shawish, Petitioner-Appellant,
United States of America, Respondent-Appellee.

          Argued April 5, 2018

          Appeal from the United States District Court for the Eastern District of Wisconsin. No. 03-CR-211-1-JPS - J.P. Stadtmueller, Judge.

          Before Kanne, Rovner, and Hamilton, Circuit Judges.

          Hamilton, Circuit Judge.

         Petitioner-appellant Mhammad Abu-Shawish was tried and convicted on a federal fraud charge, but that conviction was reversed after he served the entire prison sentence. Abu-Shawish was acquited in a second trial. He now seeks damages under 28 U.S.C. § 1495 and § 2513 for unjust conviction and imprisonment. Abu-Shawish petitioned for a certificate of innocence-a prerequisite to a damages claim against the United States under those statutes.

          In this appeal, the government is in the unusual position of defending a dismissal it never requested. Without any response from the government, the district court dismissed the petition, reasoning that Abu-Shawish failed to provide evidence of his actual innocence. United States v. Abu-Shawish, 228 F.Supp.3d 878, 883-84 (E.D. Wis. 2017).

         We vacate the dismissal and remand for further proceedings. The district court applied a standard that is too rigorous for the pleading stage of what is, in essence, a new civil case embedded within a closed criminal case. In the end, the question in this proceeding is whether Abu-Shawish can show by a preponderance of the evidence that he was in fact not guilty of a crime, not whether the trial evidence would have allowed a conviction. This is not to say that Abu-Shawish is entitled to relief, but he must be given a fair opportunity to show that he is entitled to damages under the governing statutes.

         I. Factual and Procedural Background

         A. Underlying Facts

         Abu-Shawish was the founder and executive director of a Milwaukee-based non-profit organization. United States v. Abu-Shawish, 507 F.3d 550, 552 (7th Cir. 2007). On behalf of that non-profit, Abu-Shawish sought and received a grant from the City of Milwaukee to create a plan for revitalizing a street in Milwaukee. The problem was that the development plan from Abu-Shawish's non-profit was "essentially identical" to a plan submited by someone else and sponsored by a separate group. Id. at 553. The funds for the grant came from the United States Department of Housing and Urban Development, id. at 552, which explains why a local grant proposal ultimately piqued the interest of federal prosecutors.

         B. First Trial

         On the theory that Abu-Shawish took the government's money but gave it nothing it had not already paid for, the government charged him with federal program fraud under 18 U.S.C. § 666(a)(1)(A). A jury convicted Abu-Shawish in 2005. The district court sentenced Abu-Shawish to three years in prison and ordered him to pay $75, 000 in restitution to the City of Milwaukee, $1, 000 in fines, and a $100 assessment. Abu-Shawish served the full sentence.

         We vacated Abu-Shawish's conviction. Abu-Shawish, 507 F.3d at 558. We held that the government charged Abu-Shaw-ish with the wrong crime because the federal program fraud statute requires that the defendant be an agent of the defrauded organization. Id. at 556. Because Abu-Shawish was not an agent of the City of Milwaukee, and because the indictment did not indicate that Abu-Shawish defrauded his own non-profit, he could not be charged under the federal program fraud statute. See id. at 558. Our opinion went on to say that "the indictment properly alleged and the evidence was sufficient to show that Abu-Shawish defrauded the City of Milwaukee." Id. We noted that the government likely could have charged Abu-Shawish with mail or wire fraud. Id.

         C. Second Trial

         On remand, the district court dismissed the indictment for federal program fraud. A grand jury indicted Abu-Shawish again-this time as a principal under 18 U.S.C. § 2 on charges of mail fraud (18 U.S.C. § 1341) and transporting, in foreign commerce, funds obtained by fraud (18 U.S.C. § 2314). The case went to trial in 2008. This time the jury found Abu-Shaw-ish not guilty.

         D. Certificate of Innocence Filings

         In 2014, Abu-Shawish filed a complaint against the United States in the Court of Federal Claims pursuant to 28 U.S.C. § 1495 and § 2513 seeking damages for unjust conviction and imprisonment. Abu-Shawish v. United States, 120 Fed.Cl. 812, 812 (2015). Abu-Shawish filed that complaint after unsuccessfully suing the government and individual defendants for malicious prosecution and other torts. See Abu-Shawish v. United States, 546 Fed.Appx. 576 (7th Cir. 2013). The Court of Federal Claims dismissed without prejudice for lack of jurisdiction because Abu-Shawish had not yet obtained a certificate of innocence, which § 2513 requires him to seek from the court where he was convicted. Abu-Shawish, 120 Fed.Cl. at 812, 814.

         In November 2015, Abu-Shawish went back to the district court in Wisconsin and filed a pro se petition for a certificate of innocence.[1] The petition alleges that this court vacated the conviction on the federal program fraud charge, that the jury acquited Abu-Shawish on the charges of mail fraud and transporting stolen funds in foreign commerce in the second trial, and that this acquital proves Abu-Shawish "was and still is innocent of the charged offenses and of any fraud." After more than three months with no docket activity, Abu-Shawish filed a motion to expedite a decision on his petition. The government never responded to the original petition or to the motion to ...

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