United States District Court, D. New Jersey
B. KUGLER, U.S.D.J.
Steven Schwartz (“Petitioner”), is a federal
prisoner currently incarcerated at FCI Schuylkill,
Pennsylvania. He is proceeding pro se with a
petition for a writ of habeas corpus challenging his
convictions pursuant to 28 U.S.C. § 2241 and requests
that the Court hold an evidentiary hearing as to his claims.
For the reasons stated below, the Court will deny the
case arises from two related matters. First, in January of
2003, a grand jury returned an indictment, charging
Petitioner with: conspiracy to commit bank fraud, wire fraud,
and identity theft; wire fraud; bank fraud; identity theft;
and use of a fictitious name for mailing, in violation of 18
U.S.C. §§ 371, 1028(a)(7), 1342, 1343, and 1344.
Petitioner had operated a ponzi scheme from 1997 to 2002,
where he recruited new “investors” and used their
“investments” to pay earlier investors and to
fund his personal expenses. See United States v.
Schwartz, Crim. No. 03-35 (E.D.Pa. Jan. 16, 2003) (the
“03-35 action”). Petitioner could not maintain
the scheme with client funds alone and resorted to
“check-kiting, ” where he wrote and deposited
worthless checks into bank accounts under his control and
then withdrew those funds before the bank could verify that
the funds did not actually exist.
that case was pending before Judge Stewart Dalzell, the
Government presented evidence that Petitioner engaged in
criminal activity while on supervised release.
“Petitioner made online payments to credit card
companies from bank accounts with insufficient funds. These
payments increased Schwartz's available credit line . . .
[where] [h]e then incurred new charges on the credit cards
before the payments were rejected.” United States
v. Schwartz, Crim. No. 04-231, 2012 WL 1694292, at *1
(E.D. Pa. May 15, 2012). Petitioner testified that he
believed he would have sufficient funds to cover those
payments based on an anticipated loan and the sale of his
mother's house, but Judge Dalzell found that there was
probable cause to believe Petitioner had engaged in criminal
activity and revoked his bail.
on Petitioner's conduct during supervised release, a
grand jury returned a new indictment in April of 2004,
charging Petitioner with two counts of bank fraud, in
violation of 18 U.S.C. § 1344, and a superseding
indictment in June of 2004, charging Petitioner with an
additional seven counts of wire fraud in violation of 18
U.S.C. § 1343. See United States v. Schwartz,
Crim. No. 04-231 (E.D. Pa. Apr. 22, 2004) (the “04-231
the 03-35 action proceeded to trial, where the Government
presented evidence that Petitioner committed, among other
things, bank fraud under Counts 8 through 16 of the
indictment. As will be relevant later in the discussion,
Petitioner committed two varieties of bank fraud. Under
Counts 8 through 10, Petitioner committed bank fraud by
forging the signature of his then-fiancée Peggy Sue
Dorsey, on three checks from her closed bank account.
Petitioner then deposited those checks, totaling $42, 000.00,
to bank accounts under his control and then withdrew the
funds before the banks realized that the funds did not exist.
contrast, although Counts 11 through 16 also involved
check-kiting, Petitioner would write checks from his own bank
accounts with insufficient funds, rather than forge the name
of others. Petitioner then presented those checks for
“cash, ” or deposited those checks to other bank
accounts under his control and then withdrew those funds,
totaling $434, 000.00.
Dalzell held a charge conference, during which, Petitioner
objected to the proposed bank fraud instructions, which
charged bank fraud as one offense, and permitted the jury to
find Petitioner guilty if it found that he either
executed a scheme or artifice to defraud a bank, under §
1344(1) or obtained money from a bank “by
means of false or fraudulent pretenses, representations, or
promises, ” under § 1344(2). 18 U.S.C. §
1344; (See ECF No. 1, at 4). Petitioner argued that
writing a check on insufficient funds did not constitute a
“representation” in light of the Supreme
Court's decision in Williams v. United States,
458 U.S. 279, 284-85 (1982). Judge Dalzell denied
Petitioner's request and charged the jury in the
disjunctive, allowing the jury to convict Petitioner under
April 22, 2005, a jury convicted Petitioner of conspiracy to
commit wire and bank fraud and identity theft; five counts of
wire fraud; nine counts of bank fraud; and one count of use
of a fictitious name for mailing.
initiated later, the 04-231 action proceeded to trial prior
to the 03-35 action. At that trial, the Government presented
evidence that Petitioner committed, among other things, bank
fraud under Counts 1 and 2. As to Count 1, Petitioner
committed bank fraud by making an on-line payment of $3,
664.15 from his checking account at Citizens Bank to his
Providian Bank VISA account. Petitioner knew he had
insufficient funds to cover the payment and then used the
newly available credit to incur approximately $2, 700.00 in
additional credit charges.
under Count 2, Petitioner made online payments totaling $7,
379.59 from his Citizens Bank account to various credit cards
he held with Capital One Bank, each time knowing he had
insufficient funds to cover the payment. Petitioner then
incurred additional credit charges.
the 03-35 action, Petitioner alleges that he directed his
counsel to object to the bank fraud instruction in accordance
with Williams. (ECF No. 14, at 15). Judge Harvey
Bartle, III, denied Petitioner's request, and charged the
jury in the disjunctive, allowing the jury to convict
Petitioner under either the bank fraud statute's
“scheme to defraud” theory or its “obtain
money by false representation” theory. (see
id. at 15-16; App. 1278).
November 18, 2004, after a two-day trial, the jury convicted
Petitioner of two counts of bank fraud and seven counts of
wire fraud. (App. 1036). On April 11, 2005, Judge Bartel
sentenced Petitioner to eighteen months' imprisonment in
the 04-231 action, and on July 26, 2005, Judge Dalzell
imposed a consecutive sentence of 225 months'
imprisonment in the 03-35 action. United States v.
Schwartz, No. 04-231, 2012 WL 1694292, at *4 (E.D. Pa.
May 15, 2012).
filed an appeal in each case. The Third Circuit consolidated
the appeals and affirmed Petitioner's convictions and
sentences. United States v. Schwartz, 315 Fed.Appx.
412 (3d Cir. 2009). Petitioner then petitioned the United
States Supreme Court for a writ of certiorari, and
the Supreme Court denied that petition on April 26, 2010.
Schwartz v. United States, 559 U.S. 1094 (2010).
thereafter, Petitioner filed a timely motion for habeas
corpus relief, pursuant to 28 U.S.C. § 2255, to vacate,
set aside, or correct his sentence, in each of the underlying
actions. On May 15, 2012, Judge Bartle denied the § 2255
petition in the 04-231 action, and on February 20, 2013,
Judge Dalzell denied the § 2255 petition in the 03-35
action. United States v. Schwartz, 925 F.Supp.2d
663, 669 (E.D. Pa. 2013); United States v. Schwartz,
No. 04-231, 2012 WL 1694292, at *4 (E.D. Pa. May 15, 2012).
then filed a petition for habeas relief under 28 U.S.C.
§ 2241, which is presently before this Court.
corpus petitions must meet heightened pleading
requirements.” McFarland v. Scott, 512 U.S.
849, 856 (1994). A petition must “specify all the
grounds for relief” and set forth “facts
supporting each of the grounds thus specified.” 28
U.S.C. § 2254 Rule 2(c) (amended Dec. 1, 2004),
applicable to § 2241 petitions through Habeas Rule 1(b).
A court presented with a petition for writ of habeas corpus
“shall forthwith award the writ or issue an order
directing the respondent to show cause why the writ should
not be granted, unless it appears from the application that
the applicant or person detained is not entitled
there.” 28 U.S.C. § 2243.
“[f]ederal courts are authorized to dismiss summarily
any habeas petition that appears legally insufficient on its
face.” McFarland, 512 U.S. at 856; see
also Siers v. Ryan, 773 F.2d 37, 45 (3d Cir. 1985).
“[A] district court is authorized to dismiss a [habeas]
petition summarily when it plainly appears from the face of
the petition and any exhibits annexed to it that the
petitioner is not entitled to relief in the district
court[.]” Lonchar v. Thomas, 517 U.S. 314, 320
challenges his convictions and sentences in this 28 U.S.C.
§ 2241 federal habeas action. Generally, a person must
bring a challenge to the validity of a federal conviction or
sentence under 28 U.S.C. § 2255. See Jackman v.
Shartle, 535 Fed.Appx. 87, 88-89 (3d Cir. 2013) (citing
Okereke v. United States, 307 F.3d 117, 120 (3d Cir.
2002)). This is generally true because § 2255 prohibits
a district court from entertaining a challenge to a
prisoner's federal sentence through § 2241 unless
the remedy under § 2255 is “inadequate or
ineffective.” See 28 U.S.C. § 2255(e).
Indeed, § 2255(e) states that:
An application for a writ of habeas corpus in behalf of a
prisoner who is authorized to apply for relief by motion
pursuant to this section, shall not be entertained if it
appears that the applicant has failed to apply for relief, by
motion, to the court which sentenced him, or that such a
court has denied him relief, unless it also appears that the
remedy by the motion is inadequate or ineffective to test the
legality of his detention.
§ 2255 motion is “inadequate or ineffective,
” which permits a petitioner to resort to a § 2241
petition, “only where the petitioner demonstrates that
some limitation or procedure would prevent a § 2255
proceeding from affording him a full hearing and adjudication
of his wrongful detention claim.” Cradle v. U.S. ex
rel. Miner, 290 F.3d 536, 538 (3d Cir. 2002) (citations
omitted). However, § 2255 “is not inadequate or
ineffective merely because the sentencing court does not
grant relief, the one-year statute of limitations has
expired, or the petitioner is unable to meet the stringent
gatekeeping requirements of ... § 2255.”
Id. at 539 (citations omitted). “It is the
inefficacy of the remedy, not the personal inability to use
it, that is determinative.” Id. at 538
(citation omitted). “The provision exists to ensure
that petitioners have a fair opportunity to seek collateral
relief, not to enable them to evade procedural
requirements.” Id. at 539 (citing In re
Dorsainvil, 119 F.3d 245, 251-52 (3d Cir. 1997)).
Dorsainvil, the Third Circuit held that the remedy
under § 2255 is “inadequate or ineffective,
” permitting resort to § 2241 (a statute without
timeliness or successive petition limitations), where a
prisoner who previously had filed a § 2255 motion on
other grounds “had no earlier opportunity to challenge
his conviction for a crime that an intervening change in
substantive law may negate.” 119 F.3d at 251.
the Third Circuit emphasized that its holding was not
suggesting that a § 2255 motion was “inadequate or
ineffective” merely because a petitioner is unable to