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Reese-Thomas v. United States

December 18, 2007


The opinion of the court was delivered by: John Gleeson, District Judge



Christopher Reese-Thomas moves, pursuant to 28 U.S.C. § 2255, to vacate his conviction for multiple counts of fraud and his 115-month prison sentence. For the reasons set forth below, the motion is denied.


A. The Crimes and the Charges

In July 1999, the Federal Bureau of Investigation ("FBI") was advised of a scheme to defraud MoneyGram Payment Systems, Inc. ("MoneyGram"), a company engaged in money transfer services to individuals in the United States and elsewhere. MoneyGram has a network of 26,000 authorized agents through which its customers can send and receive money payments.

The MoneyGram agent who takes in funds for transfer is referred to here as the sending agent; the one from whom the transferred funds are received by the intended recipient of the funds is referred to as the receiving agent. When a sending agent takes in money for transfer from a sender, the agent contacts the company's operations center in Lakewood, Colorado, and provides the sending agent's unique personal identification number ("PIN") as well as the details of the sender's request (i.e., amount, identity of recipient, etc.). A reference number for the transaction is provided by the operations center, which the sending agent gives to the sender, who in turn gives it to the intended recipient. The reference number, together with proof of identity, permits the recipient to retrieve the transferred funds from the receiving MoneyGram agent.

The operations center confirms orders over a certain amount by immediately calling back the sending agent after an order is placed. Using the telephone number it has in its records, the operations center calls that agent, asks for the agent's PIN, and then confirms that the agent actually obtained the funds that are the subject of the requested transfer.

Reese-Thomas's scheme to defraud worked as follows: First, he or a co-conspirator he recruited*fn1 would telephone MoneyGram agents (many of them corner stores or other small businesses) pretending to be from the operations center. He would trick the agents into divulging their PINs. Once he had an agent's PIN, the fraudster would call the telephone company, pretending to be that agent, and request that the telephone company forward all incoming calls to one of the multiple cellular telephones controlled by Reese-Thomas.

Then Reese-Thomas or one of his underlings would call the operations center, pretending to be a sending agent, and say he had just received a large sum of money to transfer to a specified recipient. He would provide the PIN number of the MoneyGram agent he was impersonating. After the transfer order was placed, the operations center would call back what it believed was the sending agent, but due to the call forwarding it would get one of the fraudsters instead. The fraudster would of course falsely confirm receipt of the money. The designated recipient, also a co-conspirator, would then go to a receiving MoneyGram agent, provide the requisite information and reference number, and be given the cash. The victimized MoneyGram sending agents would discover after getting their telephones unforwarded (many were mystified -- and some delighted -- by the sudden cessation of calls from their spouses) that they owed large sums of money to MoneyGram.

A total of 145 such transfers occurred in this fraudulent fashion between June 1999 and January 2000. Approximately $200,000 in cash was actually received by Reese- Thomas and his underlings; additional transfers amounting to approximately $200,000 were not completed because the conspirators did not pick up the money from the receiving agents.

Reese-Thomas was under federal supervision during the relevant period, based on one of his numerous other fraud convictions. He falsely withheld from his supervising officer the various cellular telephone numbers he used to commit the MoneyGram fraud, and he gave false and misleading testimony under oath on that subject during a violation proceeding in that case in early 2000.

On April 11, 2002, Reese-Thomas (under the name Christopher Thomas, a/k/a "Christopher Reese" and "Black"), was charged in an indictment with conspiring to commit wire fraud (Count One) and nine counts of wire fraud (Counts Two through Ten).

B. The Plea Bargaining and Plea

On May 10, 2002, the government sent a proposed plea agreement to defense counsel, John H. Jacobs. Reese-Thomas received it on May 17, 2002 and discussed it with Jacobs. At Reese-Thomas's instruction, Jacobs wrote to the prosecutor to convey three objections to the estimated Guidelines calculation set forth in the proposed plea agreement. Defense counsel wrote as follows:

Our first objection is the increase of two points for sophisticated means. It is our position that there was nothing elaborate or sophisticated.

The second objection is the enhancement for aggravated role, which we believe should be at most two points. In essence, there are not more than five participants in this case. I can elaborate on this when we speak.

Third, the government seeks to enhance the offense level based upon transactions that were never received by the defendant. If the government persists in this theory, a three level reduction for an incomplete crime should be considered.

Let me know your thinking on the points.

Letter from John Jacobs to Adam Schuman, May 28, 2002.

On July 15, 2002, Reese-Thomas appeared before Judge Reena Raggi for the purpose of entering a guilty plea. Instead, Reese-Thomas requested that Judge Raggi recuse herself from the case. When Judge Raggi denied that application, Reese-Thomas refused to enter a guilty plea, and the case was set for trial. Later that day the government notified Reese-Thomas by letter that it was withdrawing its plea offer. Two days later, Reese-Thomas again moved for recusal, this time in writing, an application Judge Raggi denied in an endorsement ...

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