United States v. Cheng

          MEMORANDUM AND ORDER

          Hon. Patti B. Saris Chief United States District Judge.

         Sihai Cheng has moved under 28 U.S.C. § 2255 to vacate the nine-year term of imprisonment imposed after he pleaded guilty to six counts of a ten-count indictment relating to his illicit scheme to export pressure transducers, highly sensitive goods with nuclear applications, from the United States to Iran through China. After review of the briefing and the record, the Court ALLOWS IN PART and DENIES IN PART Cheng's motion to amend (Docket No. 185) and DENIES Cheng's motion to vacate his sentence (Docket No. 146).

         FACTUAL AND PROCEDURAL BACKGROUND

         Cheng is a citizen of the People's Republic of China. On November 21, 2013, he and three co-conspirators (an Iranian national named Seyed Abolfazl Shahab Jamili; Nicaro Engineering Co., Jamili's Iranian company; and an Iranian company called Eyvaz Technic Manufacturing Company) were charged in a ten-count indictment with the illegal export of pressure transducers manufactured by MKS Instruments, Inc., a Massachusetts corporation, from the United States to Iran between 2009 and 2012. MKS pressure transducers can be used in gas centrifuges to produce weapons-grade uranium. The indictment charged Cheng with conspiracy to commit export violations in violation of 50 U.S.C. § 1705 (Count I), conspiracy to commit smuggling violations under 18 U.S.C. § 554(a) in violation of 18 U.S.C. § 371 (Count II), unlawful exports of U.S. goods to Iran on four occasions between April and August 2009 in violation of 50 U.S.C. § 1705 (Counts III-VI), and smuggling of U.S. goods to Iran on the same four occasions in violation of 18 U.S.C. § 554 (Counts VII-X).

         Cheng served as the middleman in the scheme: He coordinated shipments from the United States, received them in China, and then sent them to Iran. He knew Kalaye Electronic Company, which the United States had designated as a nuclear weapons proliferator, was the end user of the pressure transducers. He also knew exporting the transducers from the United States to Iran was illegal, so he removed their serial numbers to hide their origin. He and his co-conspirators lied about the end users to secure export licenses to ship the goods to China.

         After Cheng's arrest in the United Kingdom and his extradition to the United States, the Court held an initial status conference on June 9, 2015. The Court asked the Government to provide a memorandum addressing whether it had extraterritorial jurisdiction to convict Cheng for conduct in China. The Government informed the Court that Cheng could be prosecuted in a U.S. court pursuant to the First Circuit's decision in United States v. McKeeve, 131 F.3d 1 (1st Cir. 1997), because his conspiracy involved pressure transducers exported from Massachusetts. Cheng's attorney, Stephen Weymouth, did not respond to the Government's memorandum.

         On December 18, 2015, Cheng pleaded guilty to Counts I through VI of the indictment. At the Rule 11 hearing, Cheng said he was satisfied with Weymouth's representation and Weymouth had not pressured him into pleading guilty. Besides explaining that he stopped selling pressure transducers in 2011, not 2012 as stated in the indictment, he agreed with the factual basis for the charges as just described. He specifically admitted he knew exporting the pressure transducers was illegal under U.S. law. Because of the nature of the crime, the Court recognized that evidence about Iran's nuclear program would be a significant issue at sentencing in determining whether a terrorism enhancement or upward departure was appropriate.

         Cheng also stated during the colloquy that he suffered from “mania.” Dkt. No. 76 at 7:11-15. Weymouth explained that he had reviewed Cheng's Chinese psychiatric records, which called him “manic” with “racing thoughts” and an “inability to sleep.” Id. at 8:2-13. The Court suggested Weymouth submit the records at the sentencing hearing to support an argument for diminished capacity or a variance based on his mental health. The Court authorized money to interpret the records for this purpose.

         The Pre-Sentence Report (“PSR”) discussed Cheng's mental health at length. He was hospitalized twice in China, once in 1999 and again in 2012. During his 1999 hospitalization, he was diagnosed with mania and prescribed medication.^[1] He took the medication until 2003 but stopped due to negative side effects. In addition to his mania, he began having delusions of grandeur in 1999 and experienced suicidal thoughts in the early 2000s and in 2012. Cheng reported that his condition improved significantly after his 2012 hospitalization. Nevertheless, after his arrest, he experienced racing thoughts, vivid dreams and lack of sleep due to “noise” in his brain. While in custody at Wyatt Detention Facility, he had monthly mental health counseling sessions and took melatonin to aid in sleeping. Documentation from Wyatt suggested a diagnosis of “a mood disorder and possible bipolar disorder.” PSR ¶ 91.

         On January 27, 2016, the Court held an all-day sentencing hearing. The Government called David Albright, the president of a nongovernmental organization that conducts research on nuclear nonproliferation, to testify in support of a terrorism enhancement and upward departure under Application Note 2 to U.S.S.G. § 2M5.1 (evasion of export controls). Albright worked in the field since 1981, wrote hundreds of peer-reviewed articles and five books, and personally studied Iran's nuclear program for over twenty years. His organization conducted significant research on Iran's nuclear program and was the first to identify the Natanz Fuel Enrichment Plant as a gas centrifuge facility.

         Albright testified that Iran began to develop a program to create weapons-grade uranium in 1985. It used gas centrifuges located at Natanz and the Fordow Fuel Enrichment Plant to conduct enrichment. Kalaye Electric Company operated the Fordow plant and acquired equipment and materials overseas to develop and design gas centrifuges. Fordow was used for enrichment at least until it was discovered in September 2009, after Cheng made four shipments of pressure transducers to Iran.

         Having studied illegal procurement networks, Albright called Cheng's role in the conspiracy “critical” and the scheme “very sophisticated.” Dkt. No. 104 at 39:23-40:5, 44:22-45:6. Finally, he opined that Cheng's conduct put the United States at a strategic disadvantage during negotiations with Iran over its nuclear program: Cheng was supplying Iran with tools to manufacture more centrifuges just as the United States was trying to get Iran to agree to reduce the number of centrifuges.

         Weymouth cross-examined Albright about his qualifications, the basis of his opinions, and the timing of Iran nuclear program. Albright admitted he was a mathematician and physicist by education and his opinion relied only on publicly available documents and statements from others. Weymouth emphasized Albright's testimony that he could only say that the weapons-grade enrichment at Fordow continued until 2009, and he pointed out that, according to assessments of Iran's nuclear program from 2009 to 2013, Iran had never made enough weapon-grade uranium for even one nuclear weapon. Albright also admitted that pressure transducers have nonnuclear and nonmilitary purposes. Weymouth did not put on an expert witness to counter Albright's testimony, but he said he had spent dozens of hours over four weeks preparing for the cross-examination.

         The Court next heard argument on calculation of the guidelines range. The Government sought, and Weymouth opposed, a four-level aggravating role adjustment as an organizer under U.S.S.G. § 3B1.1(a), a terrorism enhancement under U.S.S.G. § 3A1.4, and an upward departure under Application Note 2 to U.S.S.G. § 2M5.1. Although Weymouth sought a minor-role adjustment in his sentencing memorandum, he conceded at the hearing that it did not apply. The Court rejected the aggravating role adjustment and terrorism enhancement, which the Government never properly sought, but decided to upwardly depart by six levels under Application Note 2 to U.S.S.G. § 2M5.1 because Cheng's scheme posed a serious threat to national security, involved a substantial volume of commerce and number of occurrences, and was highly sophisticated. With the upward departure, the Court found a total offense level of 29. Cheng had a criminal history category of I, so his guidelines range was 87 to 108 months.

         The Court then heard argument on the appropriate sentence. Requesting a term of imprisonment of fifteen years, the Government emphasized the national security threat Cheng's conduct posed to the United States, the sophistication of the scheme, the quantity and number of shipments of pressure transducers sent to Iran, and Cheng's knowledge of its illegality. Weymouth argued for a twenty-four-month sentence because other defendants in similar cases received short sentences and Cheng did not knowingly support Iran's nuclear weapons program, had no exposure to the United States or its laws, executed his scheme solely for personal gain, and did not need to be specifically deterred.

         The Court asked about Cheng's Chinese mental health records. Weymouth did not submit translations of the records, but Cheng and an interpreter had translated them for him. Weymouth said that the records showed Cheng suffers from “mania” and argued that, while Cheng was competent to stand trial and criminally responsible, his mania and “racing thoughts” likely influenced his decision to participate in the scheme. Cheng then had a lengthy allocution. Among other things, he mentioned his two hospitalizations in China for “mania” and his diagnosis of Hepatitis B in 1999.

         The Court sentenced Cheng to a term of imprisonment of nine years. Citing the factors under 18 U.S.C. § 3553(a), the Court emphasized the need for general deterrence, and Cheng's pecuniary motivation for the crime. The Court also recognized that his mental health problems might explain some of his statements (like “f--- the United States”) but added it did not have much of a record on the issue of mental health. The Court also noted the sentence was consistent with United States v. Khazaee, a similar case from Connecticut raised by the Government in its sentencing memorandum. The Court issued a memorandum memorializing the reasons for its guidelines calculations and its sentence on February 1.

         The First Circuit affirmed Cheng's nine-year sentence on March 1, 2017. United States v. Cheng, 849 F.3d 516, 517 (1st Cir. 2017). The First Circuit determined that the Court did not err in its upward departure under Application Note 2 to U.S.S.G. § 2M5.1 or its balancing of the sentencing factors and that Cheng's sentence was not disproportionate to sentences in similar case. Id. at 518-21.

         On April 10, 2017, Cheng filed a pro se motion to vacate his sentence under 28 U.S.C. § 2255. After securing counsel, Cheng filed an amended motion on April 5, 2018. In this motion, Cheng argues that Weymouth provided ineffective assistance of counsel in the following ways: 1) failure to translate and use his Chinese mental health records to support a mitigation argument or a departure under U.S.S.G. § 5H1.3 (mental and emotional conditions); 2) failure to call an expert on Iran to counter the testimony of David Albright; 3) failure to challenge the exercise of extraterritorial jurisdiction; 4) failure to challenge the Government's evidence that Cheng acted willfully; 5) failure to object to the use of Application Note 2 to U.S.S.G. § 2M5.1; 6) conceding that Cheng did not play a minor role in the conspiracy; and 7) a lack of trust in the attorney-client relationship.

         On July 27, 2018, Cheng moved to amend his amended petition. In his motion, he withdraws his claim regarding a lack of trust with Weymouth. He also seeks to add the following ineffective assistance of counsel claims: 1) failure to move to dismiss based on insufficiency of the indictment; 2) failure to distinguish United States v. Khazaee at sentencing; and 3) failure to use his medical records to argue for diminished capacity under U.S.S.G. § 5K2.13. Finally, he contends that his prosecution for extraterritorial conduct violated due process.

         DISCUSSION

         I. Motion to Amend

         A. Legal Standard

         A defendant must move to vacate his conviction or sentence within one year of “the date on which the judgment of conviction becomes final.” 28 U.S.C. § 2255(f)(1). Where the defendant challenges his conviction or sentence before the court of appeals but does not to seek review in the Supreme Court, the “judgment of conviction becomes final when the time expires for filing a petition for certiorari.” Ramos-Martínez v. United States, 638 F.3d 315, 320-21 (1st Cir. 2011) (quoting Clay v. United States, 537 U.S. 522, 525 (2003)). Parties have ninety days after entry of the judgment in the court of appeals to file a petition for certiorari. See Sup. Ct. R. 13.1; Ramos-Martínez, 638 F.3d at 321.

         Federal Rule of Civil Procedure 15 governs amendments to § 2255 motions. United States v. Ciampi, 419 F.3d 20, 23 (1st Cir. 2005). Rule 15(c)(1)(B) permits an amendment to “relate back” to the date of the original pleading for purposes of evaluating a statute of limitations if “the amendment asserts a claim . . . that arose out of the conduct, transaction, or occurrence set out -- or attempted to be set out -- in the original pleading.” For § 2255 motions, this provision “is to be strictly construed, in light of Congress' decision to expedite collateral attacks by placing stringent time restrictions on them.” Ciampi, 419 F.3d at 23 (cleaned up). Thus, relation back is permitted for amendments to § 2255 motions only where the amended claims “arise from the ‘same core facts'” as the timely claims and do “not depend upon events which are separate both in time and type from the events upon which the original claims depended.” Id. at 24 (quoting Mayle v. Felix, 545 U.S. 644, 657 (2005)). For example, a defendant ...