An Australian national can stay in the United States because a federal appeals court ruled Monday that he cannot be punished for his attorney’s incorrect advice about a crime not being a deportable offense.

The U.S. Court of Appeals for the Second Circuit said Stephen Kovacs, a permanent U.S. resident since 1977, wouldn’t have entered a guilty plea in an insurance wire fraud case had he known that one day immigration officials would bar him from the United States.

A three-judge panel granted a writ of error coram nobis to Kovacs, saying he was prejudiced by ineffective assistance of counsel in 2001 when his lawyer told him and the court that a plea to “misprision of felony” wouldn’t lead to his deportation.

Kovacs ran into trouble with the law in 1996 for an insurance claim he submitted in 1991 for his business, International Bullion and Metal Brokers, Inc.

Kovacs lost $250,000 in a burglary, and Hanover Insurance Company dispatched to International Bullion Eliot Zerring, a public adjuster who turned out to be corrupt.

Zerring allegedly convinced Kovacs to inflate the claim to $850,000. Kovacs ended up taking $400,000,with the rest going to Zerring.

Kovacs was charged in 1996 with wire fraud and conspiracy to commit wire fraud. He instructed his attorney, Robert Fink of Kostelanetz & Fink, to negotiate a plea that would not hurt his immigration status.

Fink determined that “misprision of felony” under 18 U.S.C. §4 would have no impact on his status, so Kovacs pleaded guilty in 1999, with Fink telling the court that, after research “we feel comfortable that this is not a deportable offense.”

Kovacs was sentenced in 2001 to five years probation and ordered to pay restitution of $600,000. He paid full restitution and was granted early termination of probation in 2006.

Kovacs traveled abroad freely on a regular basis up until 2009, when immigration officials informed him he might be denied reentry because misprision of felony is a crime of moral turpitude.

He returned to Australia on advice of counsel. But his wife and children, who are U.S. citizens, remained in the United States.

Kovacs’ petition for a writ of coram nobis was denied by Judge Leonard Wexler, who found Kovacs had failed to show prejudice under the standard set forth by the U.S. Supreme Court in Strickland v. Washington, 466 U.S. 688 (1984).

Kovacs appealed to the Second Circuit, where Judges Amalya Kearse (See Profile), Dennis Jacobs (See Profile) and Barrington Parker (See Profile) heard oral arguments in Kovacs v. United States, 13-0209 on Nov. 21, 2013.

Writing for the Second Circuit Monday, Jacobs explained that a writ of error coram nobis is an extraordinary remedy “typically available only when habeas relief is no longer available because the petitioner is no longer in custody.”

In 2002, the circuit held that an affirmative misrepresentation about the deportation consequences of a guilty plea can be ineffective assistance of counsel, United States v. Cuoto, 311 F.3d 179 (2d Cir. 2002)

Cuoto was issued a year after Kovacs’ conviction became final, but the circuit accepted his request to apply Cuoto retroactively, saying “[c]ourts had concluded similar misadvice was objectively unreasonable as far back as the 1970s.”

Jacobs then said that “a defense lawyer’s incorrect advice about the immigration consequences of a plea is prejudicial if it is shown that, but for counsel’s unprofessional errors, there was a reasonable probability that the petitioner could have negotiated a plea that did not impact immigration status or that he would have litigated an available defense.”

The judge said that a showing of prejudice under Strickland “focuses on the outcome of the proceeding rather than on a defendant’s priorities or desires.”

So it’s up to a petitioner to show a “reasonable probability that the prosecution would have accepted, and the court would have approved, a deal that had no adverse effect on the petitioner’s immigration status.”

Jacobs said the court was convinced Kovacs had shown he could have negotiated such a plea and “that even if he could not, he would have litigated an available defense.”

Kearse concurred in the majority, but said she would have decided the appeal and granted the writ solely on the issue of whether Kovacs would have litigated an available defense.

Nicholas Gravante of Boies, Schiller & Flexner argued for Kovacs. He said his client is looking forward to returning from Australia and resuming “a normal life in the United States,” with his family.

“More broadly this decision should provide a measure of hope to any immigrants who have been deported and separated from their families because they did not understand or were misadvised about the potential deportation consequences of guilty pleas,” Gravante said.

“Bob Fink was a stand-up guy and provided an affidavit explaining to the court about his advice to his client—he did the right thing for his client,” Gravante continued. “Everyone was working on crafting a plea that would avoid deportation—and that was why he was allowed to plead guilty to this unusual offense.”

Assistant U.S. Attorney Michael Warren argued for the government.