Arif v. USA

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Mustafa Hassan Arif
v. Case No. 19-cv-586-LM
Opinion No. 2020 DNH 023
United States
O R D E R
On October 11, 2016, Mustafa Hassan Arif pleaded guilty to
one count of wire fraud in violation of 18 U.S.C. § 1343, and on
May 26, 2017, this court sentenced him to serve 72 months in
prison. See United States v. Mustafa Hassan Arif, 15-cr-057-LM
(D.N.H. May 26, 2017) (“Arif I”). Arif appealed his conviction
and sentence, and on July 19, 2018, the First Circuit affirmed
both. See id. at doc. nos. 156 and 157. He now moves pursuant
to 28 U.S.C. § 2255 to vacate his sentence, alleging
prosecutorial misconduct and six claims of ineffective
assistance of counsel. The government objects.
STANDARD OF REVIEW
Under § 2255, a federal prisoner may ask the court to
vacate, set aside, or correct a sentence that “was imposed in
violation of the Constitution or laws of the United States.” 28
U.S.C. § 2255(a). The burden of proof is on the petitioner.
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Wilder v. United States, 806 F.3d 653, 658 (1st Cir. 2015).
Once a prisoner requests relief under § 2255 the district court
must grant an evidentiary hearing unless “the motion and the
files and records of the case conclusively show that the
prisoner is entitled to no relief.” 28 U.S.C. § 2255(b). Thus,
an evidentiary hearing is not necessary when “a § 2255 motion
(1) is inadequate on its face, or (2) although facially adequate
is conclusively refuted as to the alleged facts by the files and
records of the case.” Morgan v. Hogan, 494 F.2d 1220, 1222 (1st
Cir. 1974).
BACKGROUND
I. Factual Background
Arif owned and operated over 1,500 commercial websites
while living in Lahore, Pakistan. On most of those sites, he
sold drugs which he claimed treated or cured various diseases
and conditions. His internet reach spanned across the globe far
beyond the borders of Pakistan. The results were successful: he
generated $12 million, most of which came from customers in the
United States.
His endeavors quickly caught the eye of the United States
Government for several reasons. First, the websites selling
drugs had misleading mail-forwarding addresses. For example, a
website marketed to Germans had a German address. Other
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websites had mail forwarding addresses in England, Scotland,
Australia, and many other countries. This strategy was illegal
because every website and drug originated in Pakistan.
Second, information on the websites about the drugs
themselves contained gross misrepresentations. For example,
Arif falsely claimed that some of the drugs had a “cure rate for
90% of subjects” or had a “92% effect on the disease without a
single side effect.” In most cases, Arif never tested the drugs
nor backed up his claims with reputable evidence. Arif’s
websites also included false testimonials from customers as to
the drugs’ effectiveness.
Third, Arif generated $9 million in revenue from United
States customers. He used a third-party credit card processor
and authorized retailer named CCNow to transfer his revenue.
CCNow used JP Morgan Chase to wire Arif’s proceeds from its bank
account in Minnesota to his various bank accounts in Pakistan
and the United Kingdom.
II. Procedural Background
On April 8, 2015, a federal grand jury indicted Arif on one
count of wire fraud and aiding and abetting the same under 18
U.S.C. § 1343 and two counts of misbranding drugs in interstate
commerce under 21 U.S.C. §§ 331(a), 333(a)(2), and 352(a). A
grand jury returned a superseding indictment on September 9,
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2015, which increased the misbranding drug counts to a total of
four.
On October 11, 2016, Arif entered a conditional plea of
guilty to one count of wire fraud under 18 U.S.C. § 1343. He
subsequently appealed both his sentence and conviction, and the
First Circuit affirmed.
Arif filed the current § 2255 petition on June 3, 2019,
alleging prosecutorial misconduct and six claims of ineffective
assistance of counsel. The government responds that the court
can resolve the majority of Arif’s claims without an evidentiary
hearing. It concedes, however, that certain claims require
further factual development and requests that the court schedule
an evidentiary hearing. Arif counters that an evidentiary
hearing is not necessary but, to the extent the court disagrees,
he requests that the court appoint him counsel due to his
“strained financial condition” and waive his appearance at the
hearing. Doc. no. 7 at 3.
DISCUSSION
Arif asserts seven claims in his § 2255 petition:
• the government breached its promise that Arif would be
prosecuted for only two misbranding of drug charges (and
not wire fraud) in exchange for him providing information
on CCNow (Claim 1);
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• ineffective assistance of counsel based on his attorneys’
failure to obtain the government’s promise in writing or to
bring it to the court’s attention (Claim 2);
• ineffective assistance of counsel based on his attorneys’
failure to assert the defense of improper venue (Claim 3);
• ineffective assistance of trial and appellate counsel based
on their failure to argue that the wire fraud statute did
not apply to the allegations of false advertising of non-
prescription drugs (Claim 4);
• ineffective assistance of counsel based on his attorneys’
failure to assert a defense under the Speedy Trial Act, 18
U.S.C. § 3161, et seq. (Claim 5);
• ineffective assistance of counsel based on his attorneys’
failure to advise him that the FDA could not investigate
false advertising of non-prescription drugs and that the
FDA’s presence at grand jury proceedings violated his due
process rights (Claim 6); and
• ineffective assistance of counsel based on his appellate
counsel’s failure to pursue the argument that the fact that
Arif informed his customers that his products were not FDA-
approved negated any intent to defraud, and that the
government could not approve a charge of wire fraud without
FTC certification (Claim 7).
The court first addresses Arif’s ineffective assistance of
counsel arguments in Claims 3-7.
I. Claims 3-7
Claims 3-7 are based on the alleged ineffectiveness of
Arif’s trial and/or appellate counsel. When a § 2255 petition
is based on ineffective assistance of counsel, the petitioner
“must demonstrate both: (1) that ‘counsel’s performance was
deficient,’ meaning that ‘counsel made errors so serious that
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counsel was not functioning as the “counsel” guaranteed the
defendant by the Sixth Amendment’; and (2) ‘that the deficient
performance prejudiced the defense.’” United States v. Valerio,
676 F.3d 237, 246 (1st Cir. 2012) (quoting Strickland v.
Washington, 466 U.S. 668, 687 (1984)).
Under the deficiency prong, the petitioner “must show that
counsel’s representation fell below an objective standard of
reasonableness.” Strickland, 466 U.S. at 688. There is a
“strong presumption that counsel’s conduct falls within the wide
range of reasonable professional assistance,” and the petitioner
“must overcome the presumption that, under the circumstances,
the challenged action might be considered sound trial strategy.”
Id. at 689 (internal quotation marks and citation omitted).
Under the prejudice prong, the petitioner “must show that there
is a reasonable probability that, but for counsel’s
unprofessional errors, the result of the proceeding would have
been different.” Id. at 694.
In the context of a guilty plea, “in order to satisfy the
‘prejudice’ requirement, the defendant must show that there is a
reasonable probability that, but for counsel's errors, he would
not have pleaded guilty and would have insisted on going to
trial.” Hill v. Lockhart, 474 U.S. 52, 59 (1985). The question
does not focus on the whims of the defendant, but instead
depends on whether “a reasonable defendant standing in the
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petitioner's shoes would likely have altered his decision to
plead guilty” in these circumstances. Ferrara v. United States,
456 F.3d 278, 294 (1st Cir. 2006). Failure to satisfy either
the deficiency or prejudice prong defeats an ineffective-
assistance-of-counsel claim. Strickland, 466 U.S. at 700.
A. Claim 3
Arif asserts in Claim 3 that his trial counsel were
ineffective for failing to seek to dismiss the indictment on the
basis of improper venue. According to Arif, this defense would
have been successful because CCNow is based in Minnesota, not
New Hampshire, and none of the website’s servers was in New
Hampshire. Arif asserts that had his trial counsel properly put
forth this defense, he would not have pleaded guilty.
Even assuming that Arif’s trial counsel should have raised
that defense, Arif has suffered no prejudice because that
defense has no merit. In deciding where a crime has been
committed for venue purposes, courts look to the “nature of the
crime,” as determined by the “essential conduct elements” of the
offense. United States v. Rodriguez–Moreno, 526 U.S. 275, 279–
280 (1999).
The “essential conduct” prohibited by the federal wire
fraud statute is ‘the misuse of wires as well as any
acts that cause such misuse.’ Thus, in a wire fraud
case, venue is established “where the wire
transmission at issue originated, passed through, or
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was received, or from which it was orchestrated
. . . . In other words, venue may lie only where
there is a direct or causal connection to the misuse
of wires.”
United States v. Foley, No. CRIM.A. 11-10406-RGS, 2013 WL
210187, at *1 (D. Mass. Jan. 18, 2013) (quoting United States v.
Pace, 314 F.3d 344, 349 (9th Cir. 2002)), aff'd, 783 F.3d 7 (1st
Cir. 2015). Thus, where a defendant’s acts in a state “caused
the wires foreseeably to be used in furtherance of the
fraudulent scheme,” venue properly lies in that state. Id. at
*2.
The indictment (doc. no. 32) and the superseding indictment
(doc. no. 43) both allege that Arif sent his products to
residents of New Hampshire. In addition, they allege that such
purchases were made by customers located in New Hampshire
through their computers, and that customers were redirected to
CCNow’s website to make payments. Therefore, venue properly
lies in New Hampshire. For this reason, even if trial counsel
were ineffective, Arif suffered no prejudice because no
reasonable defendant in his circumstances would have altered his
plea of guilty.
B. Claim 4
Arif asserts in Claim 4 that his appellate and/or trial
counsel were ineffective for failing to raise the defense that
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the wire fraud statute did not apply to the allegations of false
advertising of non-prescription drugs. As Arif notes, however,
his appellate counsel did raise the defense in his brief on
appeal and cited the very case on which Arif relies in his
petition. See doc. no. 1 at 8. Although Arif asserts that
“[h]ad his appellate counsel been effective then [the] outcome
of appeal would also be different,” id., he offers no support
for that assertion. Thus, Arif’s fourth claim fails on both
prongs of the Strickland analysis.1
C. Claim 5
Arif next argues that his trial counsel were ineffective
for failing to advise him that he could have sought dismissal of
the indictment under the Speedy Trial Act. He states that had
his attorneys advised him of the availability of this defense,
he would not have pleaded guilty.
Even if Arif’s counsel had failed to advise him of the
possibility of asserting a defense under the Speedy Trial Act,
Arif suffered no prejudice because that defense is meritless.
Although Arif points to certain delays in the district court
1 Moreover, the court notes that Arif repeatedly raised the
argument that the wire fraud statute did not apply to the
conduct in this case at the district court level. See, e.g.,
doc. no. 87 at 15-16. Both this court and the First Circuit
have rejected the argument.
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proceedings (nearly all of which were based on his various
counsels’ reluctance to pursue meritless defenses Arif urged),
Arif neglects to mention that he repeatedly waived his right to
a speedy indictment and trial. See Arif I, doc. nos. 11, 14,
16, 18, 26, 30, 41, 48, 62, 69, 79, and 109. He not only waived
these rights, but explicitly acknowledged that he had been
advised of them. See id. Any defense based on the Speedy Trial
Act is not viable and, therefore, even if his counsel were
ineffective, no reasonable defendant in Arif’s circumstances
would have altered his plea of guilty.
D. Claim 6
Arif’s sixth claim of ineffective assistance of counsel is
based on the theory that the FDA is unauthorized to investigate
the area of false advertising and non-prescription drugs, but
that his trial counsel failed to assert that defense. He also
states that his trial counsel were ineffective for failing to
advise him that the wire fraud charge could have been dismissed
based on the FDA’s presence during his grand jury proceedings.
As with Arif’s other claims of ineffective assistance of
counsel, he fails to demonstrate any prejudice. He also offers
no support for his theory that the FDA’s supposed involvement in
the case renders the wire fraud charge subject to dismissal.
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Arif’s ineffective assistance of counsel claim in Claim 6 fails
on both Strickland prongs.
E. Claim 7
Arif argues that his appellate counsel was ineffective for
failing to argue on appeal that the fact that Arif informed his
customers that his products were not approved by the FDA negated
any intent to defraud. He also argues that his appellate
counsel was ineffective for failing to argue on appeal that the
Department of Justice may only initiate prosecutions such as his
upon certification by the FTC under 15 U.S.C. § 56(b). Arif
contends that had his appellate counsel pursued these avenues on
appeal, the result would have been different.
This court considered both of Arif’s arguments and rejected
them. See doc. no. 117. For the reasons stated, those
arguments are without merit. Therefore, Arif suffered no
prejudice from his counsel’s failure to pursue them on appeal.
F. Summary
Claims 3-7 do not require further factual development.
Arif’s motion conclusively shows that he is not entitled to
relief on those claims.
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II. Claims 1 and 2
Arif states in his petition that, at some point, the
government verbally promised him that in exchange for proffering
all information about CCNow’s role in his business, it would
charge him with no more than two misbranding of drug charges and
would not prosecute him for wire fraud. Arif states that the
government eventually broke that promise.
Based on those actions, Arif asserts a claim for
prosecutorial misconduct (Claim 1) and ineffective assistance of
counsel for failing to investigate the promise or raise it with
the court (Claim 2).2
Claims 1 and 2 cannot be resolved without further factual
development. Therefore, an evidentiary hearing is necessary.
In Arif’s filings in this proceeding, he contends that all
of his claims can be resolved without an evidentiary hearing
based on his affidavit. He asserts that if the court determines
that factual disputes exist, that it should “compel counter-
affidavits” from his attorneys and/or the prosecutor involved in
the case before scheduling an evidentiary hearing. In addition,
he requests that if the court deems an evidentiary hearing
necessary, that his personal presence be waived, and that
2 This claim appears to be asserted against one of Arif’s
attorneys, Michael J. Connolly.
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counsel be appointed for him because of his strained financial
condition.
A. Necessity of Evidentiary Hearing
Before addressing Arif’s request to have the government
produce “counter-affidavits,” the court notes that Arif
currently has submitted no competent evidence in support of his
claim. Although he filed an “affidavit,” the affidavit is not
sworn and does not comply with 28 U.S.C. § 1746.3
In light of Arif’s pro se status, the court will allow Arif
to submit either a sworn statement or an unsworn declaration
under penalty of perjury in compliance with 28 U.S.C. § 1746 to
support Claims 1 and 2. Arif shall submit such a filing within
45 days of this order, on or before April 3, 2020. If Arif does
not comply with that deadline, the court will rule on Claims 1
and 2 based on the current record.
In addition, on or before April 3, 2020, Arif shall notify
the court whether he (1) would like the court to resolve his
claims based on the parties’ filings and supporting evidence or
(2) hold an evidentiary hearing. If Arif prefers to waive an
evidentiary hearing, then the government shall have three weeks
from the date of Arif’s filing to offer any evidence, which may
3 For example, Arif’s affidavit is not signed under penalty
of perjury.
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include but is not limited to affidavits from Arif’s former
counsel and the prosecutor on his case, regarding Claims 1 and
2. If Arif requests an evidentiary hearing, the government may
instead proffer any supporting evidence at that hearing.
B. Arif’s Status
Arif requests that, in the event of an evidentiary hearing,
the court appoint him counsel and waive his personal appearance.
For any person seeking relief under 28 U.S.C. § 2255,
“representation may be provided for any financially eligible
person” if “the court determines that the interests of justice
so require.” 18 U.S.C. § 3006A(a)(2). Although Arif references
his “strained financial condition,” doc. no. 7 at 3, that
statement does not show that he is financially eligible. The
evidence in Arif’s criminal case showed that he generated
approximately $12 million through his scheme, he had the money
sent to England and Pakistan, and the United States did not
recover any of the proceeds. Thus, it strains credulity to
believe that Arif is presently indigent as he claims.
To the extent Arif requests an evidentiary hearing and
seeks counsel, he must provide competent evidence that he is
financially eligible by filing a financial affidavit. If he
does, the court will determine whether the interests of justice
require the appointment of counsel. The court further notes
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that although it sees no reason to waive Arif’s appearance at an
evidentiary hearing, it will address Arif’s request after his
April 3, 2020 filing.
CONCLUSION
Arif is not entitled to habeas relief for Claims 3-7. In
light of the factual dispute concerning Claims 1 and 2, the
court holds its ruling as to Arif’s petition in abeyance as
provided in this order. If Arif chooses to submit a filing in
support of Claims 1 and 2, he must do so within 45 days of this
order, on or before April 3, 2020. Arif shall also notify the
court about his preference regarding an evidentiary hearing on
or before April 3, 2020. The Clerk’s Office shall send a
financial affidavit to Arif at his address on file.
SO ORDERED.
__________________________
Landya McCafferty
United States District Judge
February 18, 2020
cc: Mustafa Hassan Arif, pro se
Seth R. Aframe, Esq.
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