Law360 (June 1, 2026, 4:22 PM EDT) -- The U.S. Supreme Court agreed Monday to resolve a circuit split over whether prisoners may seek early release under the First Step Act through habeas petitions, taking up the appeal of a former Texas lawyer who was convicted in a Mafia takeover scheme of a mortgage loan company.

A New Jersey federal jury convicted William Maxwell in 2014 of racketeering, conspiracy and fraud-related charges for his role in the La Cosa Nostra takeover of Texas-based mortgage loan company FirstPlus Financial Group Inc.

The Mafia used threats to force FirstPlus' executives to hand over control of the company, then installed Maxwell as "special counsel" and drained more than $14 million from it.

Maxwell was sentenced in 2015 and is serving 20 years in federal prison. He was suspended from practicing law in 2016 in Texas and was disbarred last year.

Maxwell argued in an August pro se petition to the Supreme Court that the Federal Bureau of Prisons wrongly denied his 2020 application to be transferred from prison to a halfway house or home confinement under the First Step Act. The 2018 law allows the court to reduce sentences or grant early release to defendants.

The Supreme Court has taken up several cases that hinge on interpretations of the First Step Act and its scope. The law was part of a sweeping effort to provide relief from mandatory minimum prison sentences and promote rehabilitation.

Last week, the justices issued opinions in two other cases — Fernandez v. U.S. and Rutherford v. U.S. — that limited the discretion of judges and the U.S. Sentencing Commission in certain types of First Step Act cases.

Maxwell contends that the district court and the Fifth Circuit incorrectly determined that he could not challenge the denial of his application for early transfer from prison under the First Step Act through a habeas petition brought under U.S. Code Section 2241.

The district court found that Maxwell had failed to exhaust his administrative remedies. The Fifth Circuit did not address that issue, but it affirmed the lower court's ruling saying Maxwell's claim under Section 2241 could only survive if a favorable ruling would "automatically entitle [him] to accelerated release."

The Eighth Circuit has reached the same conclusion, which conflicts with rulings from the First, Second and Third Circuits, according to a brief that Maxwell filed in May. By then, Davis Polk & Wardwell LLP and Paul Weiss Rifkind Wharton & Garrison LLP were representing him. 

"This case is an obvious candidate for review," Maxwell argued. "It implicates a well-developed, 3-to-2 conflict on an important question about the dividing line between habeas and civil rights suits."

The question of whether prisoners can seek home confinement under the First Step Act through a Section 2241 habeas petition also has divided the Fifth Circuit itself. The circuit's judges in 2020 rejected such petitions in Melot v. Bergami but went the other way in a nonprecedential decision in Cheek v. Warden. 

In urging the justices to resolve the conflicting rulings, Maxwell argued that the issue at the heart of his appeal "arises frequently and has great practical significance" for about 60,000 federal prisoners who have been denied relief under the First Step Act.

"The practical consequences of the persistent conflict are particularly significant because prisons within the Fifth Circuit hold roughly one out of every six of the nation's federally incarcerated population, and that number rises to one out of every five when considering the prison population of the Fifth and Eighth Circuits combined," Maxwell asserted.

The government urged the justices in an April brief to shut the door on Maxwell's case, arguing in part that the matter did not warrant review because Maxwell had failed to exhaust his administrative remedies.

The government said it recognized that the Fifth Circuit has made contradictory rulings on First Step Act-related petitions under Section 2241, but argued that the "intra-circuit tension is best left for resolution in the first instance by the court of appeals," not the Supreme Court.

Counsel for Maxwell declined to comment on the case Monday. Representatives for the government did not immediately respond to a request for comment.

Maxwell is represented by Masha G. Hansford and James Durling of Davis Polk & Wardwell LLP and Austin W. Piatt, Charlotte G. Cooper and Anna M. Stapleton of Paul Weiss Rifkind Wharton & Garrison LLP.

The government is represented by D. John Sauer, A. Tysen Duva and Ann O'Connell Adams of the U.S. Department of Justice.

The case is Maxwell v. Thomas, case No. 25-5930, in the Supreme Court of the United States.

--Editing by Melissa Treolo.

For a reprint of this article, please contact reprints@law360.com.