The opinion of the court was delivered by: WOLIN
This matter comes before the Court on the motion of petitioner Lawrence Spritzer ("L. Spritzer") under 28 U.S.C. § 2255 (1996) to vacate, set aside, or correct his sentence. Pursuant to Rule 78 of the Federal Rules of Civil Procedure, the Court has decided the motion based on the written submissions of the parties. For the following reasons, L. Spritzer's motion will be denied.
L. Spritzer and his brother, Daniel Spritzer ("D. Spritzer"), were co-owners of NJCT, a New Jersey corporation in the business of selling food service equipment to federal agencies. L. Spritzer was a director and treasurer, and D. Spritzer was a director and president. In 1989, several former employees of NJCT approached the Federal Bureau of Investigation with information regarding overcharging by NJCT on items purchased by United States agencies. An investigation commenced in the fall of 1989. On or about December 15, 1994, L. Spritzer plead guilty to conspiracy to defraud the United States in violation of 18 U.S.C. § 371 (1994) and to presentment of a false claim to the Bureau of Prisons, a United States agency, in violation of 18 U.S.C. § 287 (1986). D. Spritzer was never charged.
On June 1, 1995, L. Spritzer entered into a settlement agreement with the United States Attorney's Office ("USAO"). The USAO agreed to accept $ 200,000 in compromise of potential civil claims for treble damages and penalties under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-33 (1986). On June 2, 1995, this Court sentenced L. Spritzer to twelve months and one day in prison and three years of supervised release. In addition, this Court ordered L. Spritzer to pay $ 142,145.68 in restitution pursuant to the Victim and Witness Protection Act ("VWPA"), 18 U.S.C. §§ 3663-64 (1996). To reach this figure, the Court credited L. Spritzer's $ 200,000 settlement against the government's total loss of $ 342,145.68. Thus, L. Spritzer's obligation to the government totaled $ 342,145.68.
Although D. Spritzer was never charged, the United States held civil causes of action against him under the FCA. On June 9, 1995, seven days after the Court sentenced L. Spritzer, the USAO settled with D. Spritzer for $ 100,000 in compromise of future claims it held against him under the FCA.
L. Spritzer now moves to correct this Court's restitution order on the grounds that the Court should credit D. Spritzer's $ 100,000 settlement against L. Spritzer's $ 142,145.68 restitution obligation. L. Spritzer argues that the government may not recover more than its actual loss. If the government collects $ 342,145.68 from L. Spritzer and $ 100,000 from D. Spritzer, the government's total recovery will be $ 100,000 above the government's actual loss. Therefore, L. Spritzer asks that this Court credit his restitution obligation by $ 100,000.
At the time of L. Spritzer's sentencing, he was aware that the USAO was negotiating a settlement with D. Spritzer as to the government's FCA claims against him. Nevertheless, at no time prior to or during his sentencing did L. Spritzer object to this Court's order of restitution without consideration of D. Spritzer's prospective settlement. Because L. Spritzer chose not to appeal his sentence, this issue was not raised on appeal.
I. L. Spritzer's Procedural Default
A petitioner who moves pursuant to section 2255 must satisfy certain procedural requirements before a court will hear the merits of his or her claim. Generally, a petitioner may not bring a section 2255 motion if he or she could have, but did not raise the issue on direct appeal. See United States v. Frady, 456 U.S. 152, 165, 71 L. Ed. 2d 816, 102 S. Ct. 1584 (1982). A section 2255 motion is not a substitute for a direct appeal. See id. Once an opportunity to appeal has been waived or exhausted, a court is entitled to presume that he stands "fairly and finally convicted." See id. at 164. Courts, however, recognize an exception to this rule, permitting petitioners to raise new issues upon a showing of: (1) good cause for the procedural default of not raising the claim on direct appeal; and (2) prejudice resulting from not being allowed to raise the issue on collateral attack. See id. at 168.
In the present case, L. Spritzer raises issues not brought on direct appeal; thus, he must demonstrate good cause for his procedural default. L. Spritzer asserts three arguments to excuse his lack of appeal. First, he states that his tumultuous relationship with his brother prevented him from finding out about D. Spritzer's settlement. Second, he claims that the USAO gave "cagey" responses to his attorney's requests for information regarding the D. Spritzer settlement. Finally, he purports that the government had an obligation to come forward with information regarding the D. Spritzer settlement at the time of petitioner's sentencing.
This Court finds that these excuses are insufficient to show cause for L. Spritzer's procedural default. L. Spritzer's first excuse is without merit; whether he had an amicable relationship with his brother is of no legal moment. The second excuse, which implies that the government attempted to mislead L. Spritzer's attorney, is unsubstantiated. The record lacks any sworn statements with respect to L. Spritzer's attorney's requests to the USAO for information regarding D. Spritzer's settlement. Similarly, any responses by the USAO to such requests are absent from the record. As for the third excuse, there is no indication that the government had any information regarding the D. Spritzer settlement that would have been of use to the Court at the time of L. Spritzer's sentencing. Moreover, because L. Spritzer was aware that the government was negotiating a settlement with D. Spritzer, he could have asked the Court, at least provisionally, to credit his restitution obligation when D. Spritzer settled with the government. That the ...