Klund v. USA

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
CRAIG KLUND,
Petitioner,
v.
UNITED STATES OF AMERICA,
Respondent.
OPINION and ORDER
24-cv-402-jdp
20-cr-140-jdp
Petitioner Craig Klund was charged in a 19-count indictment with various offenses
arising from his fraudulent contracting with the United States Department of Defense. Dkt. 6
in Case No. 20-cr-140. Klund pleaded guilty to three counts: wire fraud, aggravated identity
theft, and money laundering. He was sentenced to concurrent 96-month terms of incarceration
for the wire fraud and the money laundering, and a consecutive 24-month sentence for the
aggravated identity theft. Klund appealed his sentence, challenging only the court’s calculation
of the loss amount. The sentence was upheld on appeal. United States v. Klund, 59 F.4th 322,
324 (7th Cir. 2023).
Klund, proceeding without counsel, now moves to vacate his conviction and sentence
under 28 U.S.C. § 2255. Dkt. 1. Klund’s petition is a bit of a jumble; he enumerates six grounds
for relief, although he touches on more than six issues. The government’s opposition, Dkt. 5,
parses it as seven grounds. Klund’s reply, Dkt. 8, doesn’t clarify the grounds he asserts.
But here’s the gist: The main challenge is to the aggravated identity fraud conviction,
which he says is now foreclosed by Dubin v. United States, 599 U.S. 110 (2023). Klund also
contends that his plea to the aggravated identity fraud count was invalid because he didn’t
actually admit to it at his plea hearing, and it’s not supported by the evidence. He persists in
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challenging the loss amount. He accuses the government of prosecutorial misconduct for
making false and exaggerated statements about his conduct, especially the about the extent of
the defective products that he supplied. Finally, he contends that his counsel, who represented
him in the district court and on appeal, was ineffective for not understanding the law of
government contracting and letting this all happen to him.
A. Timeliness
With the exception of the claim based on Dubin, Klund’s claims are untimely. The court
of appeals issued its decision on February 7, 2023. Klund did not petition for Supreme Court
review, so Klund’s conviction became final 90 days later, May 7, 2023. For all except the Dubin
claim, Klund had one year from that date, until May 7, 2024, to file his § 2255 petition.
28 U.S.C. § 2255(f)(1). The government accepts Klund’s representation that he put his
petition in the prison mail system on June 10, 2024. Dkt. 5, at 15. So Klund filed his petition
more than a month late. Klund’s Dubin claim is timely because June 10, 2024, was the first
business day after the one-year anniversary of the Supreme Court’s decision. § 2255(f)(3). I’ll
address Klund’s Dubin claim on the merits below.
Klund might be able to overcome his timeliness problem if he were entitled to equitable
tolling. But the standard is high, and tolling is the exception, not the rule. United States v.
Marcello, 212 F.3d 1005, 1010 (7th Cir. 2000). Klund would have to show that (1) he’s been
diligently pursuing his rights, and (2) some extraordinary circumstance stood in his way and
prevented timely filing. Holland v. Florida, 560 U.S. 631, 649 (2010).
Klund doesn’t have much to say about the timeliness issue raised in the government’s
brief. Klund says that he didn’t receive a copy of the court of appeals decision until May 5,
2024, when his caseworker gave him a copy from his file. That was only two days before his
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deadline. Dkt. 8 at 11. It would have been odd for Klund’s counsel to fail to send Klund a copy
of the court of appeals decision soon after it was issued. But even if counsel had failed to do
so, generally “a prisoner ‘bears the risk in federal habeas for all attorney errors made in the
course of representation.’” Shinn v. Ramirez, 596 U.S. 366, 382–83 (2022). Klund doesn’t say
that he ever asked his counsel about the status of his appeal. And he doesn’t say whether he
ever checked on his appeal through the law library or anywhere else. Klund hasn’t made any
showing that he was diligently pursuing his rights during the 15 months after the court of
appeals decision.
Nor has Klund shown that any other extraordinary circumstance stood in his way. He
says that his prison, FCI Leavenworth, was on lockdown from early March 2024 until he was
transferred to FPC Duluth in April 2024. Dkt. 8 at 20. The lockdown prevented him from
accessing the law library he says. But that only accounts for a single month of the available
time. Klund concedes that all the information he needed to support his claims, except for the
Dubin decision, has been available all along. Id.
The court concludes that Klund is not entitled to equitable tolling. Thus, with the
exception of the Dubin claim, Klund’s claims are untimely.
B. Dubin claim
Klund 	was 	convicted 	of 	aggravated 	identity 	theft, 	in 	violation 	of 	18 	U.S.C.
§ 1028(a)(1), which prohibits, among other things, making unauthorized use of another
person’s identity in connection with a crime against the government. Klund falsely represented
to the government defense contracting system that one of his companies, Rogue Applied
Sciences, Corp. was a “woman-owned small business.” To do so, he used his wife’s name
without her knowledge or consent. The underlying crime was charged as a violation of
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18 U.S.C. § 1001 (knowing and willful false statement to the government) in Count 12 of the
indictment; the aggravated identity theft was charged as Count 15. Klund pleaded guilty to
Count 15, but he now contends that his conviction must be overturned in light of Dubin, 599
U.S. 110.
In Dubin, the Supreme Court rejected an expansive reading of § 1028(a)(1) that would
have criminalized almost any use of a person’s means of identification in connection with a
fraud crime. The Dubin defendant owned a company that provided psychological services. The
company misrepresented the qualifications of a services provider, which inflated the billed
amount. The defendant was charged not only with healthcare fraud, in violation of 18 U.S.C.
§ 1347, but also aggravated identify fraud in violation of § 1028(a)(1) because the fraudulent
billing also included the patient’s Medicaid reimbursement number, which is a means of
identification for purposes of § 1028(a)(1). The Supreme Court held that these facts did not
support a conviction under § 1028(a)(1) because the patient’s identity was not “used” “in
relation to” the healthcare fraud. 599 U.S. at 132. A means of identify is “used in relation to”
another offense only when the identity is “at the crux of what makes the conduct criminal.” Id.
The patient’s identity, although used as part of the fraudulent billing, was tangential to the
fraud committed against the government.
Dubin doesn’t help Klund, because his wife’s identity was at the crux of the offense
charged in Count 12. Klund was the sole owner and manager of Rogue, but he falsely
designated Rogue as a woman-owned small business to gain advantages in defense contracting.
He falsely listed his wife by name as the administrator, as mandatory point of contact, and as
the individual executing the IRS consent. His use of his wife’s name was at the crux of the
§ 1001 violation, not peripheral like the patient’s identity in Dubin. Klund’s offense falls
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squarely within the heart of § 1028(a)(1) offenses and it is unaffected by the Supreme Court’s
decision in Dubin.
The court will deny Klund’s petition on the Dubin-based ground for relief.
C. Certificate of appealability
Under Rule 11 of the Rules Governing Section 2255 Proceedings, the court must issue
or deny a certificate of appealability when entering a final order. To obtain a certificate of
appealability, the applicant must make a “substantial showing of the denial of a constitutional
right.” 28 U.S.C. § 2253(c)(2); Tennard v. Dretke, 542 U.S. 274, 282 (2004). This means that
“reasonable jurists could debate whether (or, for that matter, agree that) the petition should
have been resolved in a different manner or that the issues presented were adequate to deserve
encouragement to proceed further.” Miller-El v. Cockrell, 537 U.S. 322, 336 (2003) (internal
quotations and citations omitted). Because reasonable jurists would not debate the outcome
here, I will not issue Klund a certificate of appealability. He may seek a certificate from the
court of appeals under Federal Rule of Appellate Procedure 22.
ORDER
IT IS ORDERED that:
1. 	Petition Craig Klund’s petition under 28 U.S.C. § 2255 is DENIED.
2. 	The clerk of court is directed to enter judgment and close the case.
Entered November 25, 2025.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
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