                             UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLUMBIA

GERALD STONE,

                       Plaintiff,

                       v.                          Case No. 1:14-cv-00656 (CRC)

JULIÁN CASTRO, SECRETARY,
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT

                       Defendant.

                            MEMORANDUM OPINION AND ORDER

       This is but the latest of Gerald Stone’s numerous attempts to reverse the consequences of

his 2005 criminal conviction. Because Stone’s claims are virtually identical to ones previously

rejected by this court and others, the Court will grant the Secretary of Housing and Urban

Development’s motion to dismiss Stone’s complaint.

  I.   Background

       The events surrounding Stone’s conviction and sentence have been amply described in

prior decisions cited in this opinion. The Court will highlight the most pertinent facts. In 2005,

Stone pled guilty in the U.S. District Court for the Northern District of Texas to tax evasion and

to conspiracy to commit theft from an organization receiving federal benefits in excess of

$10,000. United States v. Hildenbrand, 527 F.3d 466, 473 (5th Cir. 2008). A non-profit

operated by Stone and his wife, Barbara Hildenbrand, bought houses from the U.S. Department

of Housing and Urban Development (“HUD”) at a discount through a HUD program (known as

the Single Family Affordable Housing Program, or “SFAHP”) offered to encourage home

ownership among low- and moderate-income buyers. Id. at 470–71. Stone invoiced the non-

profit and received payments for repair work on houses that he did not perform. Id. at 471–72.
The fake invoices inflated the stated expenses of the non-profit, thereby increasing the allowable

sale price of the houses. Id. at 471. Stone bought a yacht and a condo with the funds, and did

not report this income on his tax returns. Id. at 471–73.

       The District Court for the Northern District of Texas sentenced Stone to two years

imprisonment and restitution, and ordered forfeiture of the yacht and condo. Id. at 473–74; Plea

Agreement, at 4. The Fifth Circuit affirmed the sentence. Id. at 478. Stone’s motion to vacate

the sentence was denied by the district court. Stone v. United States, 2010 WL 2404281 (N.D.

Tex. June 15, 2010) (adopting report and recommendation). The Fifth Circuit dismissed his

appeal of the forfeiture order for lack of jurisdiction because Stone had no interest in the

forfeited property at the time the district court entered the order. United States v. Stone, 435 F.

App’x 320 (5th Cir. 2011).

       After the proceedings in the Fifth Circuit, Stone brought three cases in this district against

the Department of the Treasury, HUD, and Eric Holder in his capacity as Attorney General. See

Stone v. Holder, 859 F. Supp. 2d 48 (D.D.C. 2010) (consolidating three cases). All three sought

to reclaim restitution payments and property seized as part of his sentence. Id. at 50. All three

were dismissed because Stone did not meet his burden to establish that sovereign immunity had

been waived. Id. at 52. The court also held that the suits were improper collateral attacks on

Stone’s sentence. Id. at 53.

       In this complaint, Stone argues that there were no facts supporting his conviction under

18 U.S.C. § 666 for defrauding an organization receiving over $10,000 in federal benefits. See

Compl. at 3. He relies on recent responses to Freedom of Information Act requests where, he




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contends, HUD and the Department of Justice deny evidence of loss by HUD. Compl. at 6–7.1

Without a financial loss to HUD, Stone argues, the non-profit he defrauded could not have

received over $10,000 in federal benefits, as required by Section 666. Pl. Opp’n Mot. to Dismiss

at 2, 7. The Secretary moves to dismiss under Federal Rules of Civil Procedure 12(b)(1) and (6)

for lack of subject matter jurisdiction and failure to state a claim.

    II.       Standard of Review
              Federal courts are courts of limited jurisdiction. On a Rule 12(b)(1) motion to dismiss,

the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence.

See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Subject matter jurisdiction is an

Article III requirement which must be satisfied even if neither party raises an objection. See

Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003). The court may examine

materials outside the pleadings as it deems appropriate in order to resolve the question of its

jurisdiction. See Scolaro v. D.C. Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22 (D.D.C.

2000) aff’d, 2001 WL 135857 (D.C. Cir. Jan. 18, 2001) (citing Herbert v. Nat’l Academy of

Sciences, 974 F.2d 192, 197 (D.C. Cir.1992)). The Secretary’s motion to dismiss for failure to

state a claim under Rule 12(b)(6) should be granted if the allegations in Stone’s complaint do not

“contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on

its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 570 (2007)). In order to survive the motion to dismiss, Stone must have alleged

facts that would establish the Secretary’s liability. See Stokes v. Cross, 327 F.3d 1210, 1215

(D.C. Cir. 2003). Although the Court must accept the facts pled as true, legal assertions devoid


                                                            
1
 The Court is simultaneously issuing an opinion in Stone v. U.S. Dep’t of Housing and Urban
Development, 13-cv-01780 (CRC), in which Stone challenges the agencies’ responses to his
FOIA requests.
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of factual support are not entitled to this assumption. See Kowal v. MCI Commc’ns Corp., 16

F.3d 1271, 1276 (D.C. Cir. 1994). 

III.    Analysis

        Stone’s complaint must be dismissed because it rests on arguments that have been

squarely rejected by this and other federal courts. The doctrine of res judicata prevents repeated

litigation of causes of action that share the same nucleus of operative facts. See Jenson v.

Huerta, 828 F. Supp. 2d 174, 179 (D.D.C. 2011). Claims share the same facts when they “are

related in time, space, origin, or motivation[;] . . . form a convenient trial unit[; and] . . . their

treatment as a unit conforms to the parties’ expectations.” Id. (quoting Stanton v. D.C. Court of

Appeals, 127 F.3d 72, 78 (D.C. Cir. 1997)). Res judicata forecloses all that was or could have

been litigated in a previous action, and any issue that was raised and decided in a previous

action. See Sheppard v. District of Columbia, 791 F. Supp. 2d 1, 5 (D.D.C. 2011). “The court

may take judicial notice of public records from other court proceedings.” Lewis v. Drug

Enforcement Admin., 777 F. Supp. 2d 151, 159 (D.D.C. 2011) (citing Covad Commc’ns Co. v.

Bell Atl. Corp., 407 F.3d 1220, 1222 (D.C. Cir. 2005)).

        Stone seeks the return of the restitution he paid to HUD. See Compl. at 9. He contends

that restitution should never have been ordered by the District Court for the Northern District of

Texas because the government did not prove one of the essential elements of a Section 666

crime: benefits in excess of $10,000 under a Federal program. See id. at 2. Stone advanced

identical arguments concerning the definition of “benefits” and federal assistance during his Fifth

Circuit appeal. While the Fifth Circuit agreed with Stone that the waiver of appeal rights in his

plea agreement would not be valid if there were insufficient facts to support the underlying

crime, it flatly rejected the merits of his challenge:



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       The majority of Stone’s brief is devoted to the argument that the facts are
       insufficient to establish a violation of § 666. Similar to the argument Hildenbrand
       raises, Stone urges that the 10% to 30% discounts CHF received under the
       SFAHP do not qualify as “benefits” under a federal program involving any
       “federal assistance” within the meaning of § 666 because such terms contemplate
       the payment and disbursement of federal funds.

        ...

       [A] discount is, by its very nature, a benefit to the person who receives it; it
       provides an advantage, useful aid, and help to the recipient. Stone’s argument . . .
       is purely one of form over substance. Although received in the form of a discount,
       it is undisputed that CHF received a quantitative monetary benefit from HUD
       through the discounts under the SFAHP. Stone’s factual resume lists the monetary
       value of each discount received by CHF in its purchase of program homes from
       June 1999 through March 2000, which discounts totaled $152,906.80.

        ...

       Because there is a statutory scheme authorizing the discounts on SFAHP homes
       and because the scheme furthers the public policy objectives of both expanding
       home ownership opportunities for low- and moderate-income purchasers and
       strengthening neighborhoods, we conclude that participation in the SFAHP
       qualifies as federal assistance.

United States v. Hildenbrand, 527 F.3d 466, 474, 477–78 (5th Cir. 2008). The Supreme Court

denied Stone’s petition for certiorari. See Hildenbrand v. United States, 555 U.S. 946 (2008).

Because the Fifth Circuit decision rejecting the identical arguments Stone makes here is res

judicata in this case, Stone’s complaint must be dismissed.

       Judge Berman Jackson’s decision in Stone v. Holder—holding that the government had

not waived sovereign immunity and consented to suit on the identical claims—is also res

judicata in this case. The fact that the prior case was directed against HUD itself, rather than the

Secretary in his official capacity, does not change the res judicata analysis. “A suit against a

government official in his official capacity ‘generally represent[s] only another way of pleading

an action against an entity of which an officer is an agent,’ such that ‘an official capacity suit is,

in all respects other than name, to be treated as a suit against the entity.’” Partovi v.


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Matuszewski, 647 F. Supp. 2d 13, 17 (D.D.C. 2009) aff’d, 2010 WL 3521597 (D.C. Cir. Sept. 2,

2010) (quoting Kentucky v. Graham, 473 U.S. 159, 165–66 (1985)). Accordingly, Stone’s suit

must be dismissed on that independent ground as well.2

IV.           Conclusion

              The Fifth Circuit has already denied the merits of Stone’s challenge, and this court has

dismissed his virtually identical complaints on grounds of sovereign immunity. Stone has not

alleged why the outcome here should be any different.

              For the foregoing reasons, it is hereby

              ORDERED that Defendant’s Motion to Dismiss is GRANTED.

              This is a final, appealable order.

              SO ORDERED.




                                                                   CHRISTOPHER R. COOPER
                                                                   United States District Judge


              Date:            November 3, 2014




                                                            
2
  Even if all issues had not already been litigated in the Secretary’s favor, the Court would find
that Stone has not established a waiver of sovereign immunity. Sovereign immunity shields the
Federal government, its agencies, and officials named in their official capacity from suit. Stone
v. Dep’t of Treasury, 859 F. Supp. 2d 53, 57 (D.D.C. 2012). It operates unless Congress has
expressly waived immunity to suit. See United States v. Mitchell, 463 U.S. 206, 212 (1983).
Stone offers two grounds for jurisdiction over his suit: Federal question jurisdiction under 28
U.S.C. § 1331 and the Mandatory Victim Restitution Act of 1996, 18 U.S.C. § 3663A. Federal
question jurisdiction does not by itself waive sovereign immunity. See Swan v. Clinton, 100
F.3d 973, 981 (D.C. Cir. 1996). And, as Judge Berman Jackson held in 2012, the MVRA simply
“requires courts to order restitution to the victims of certain offenses[; it] does not provide a
waiver of sovereign immunity.” Stone, 859 F. Supp. 2d at 57 (citations omitted). 
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