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Edwards v. United States

August 10, 2007

JOYCE EDWARDS, MOVANT,
v.
UNITED STATES OF AMERICA, RESPONDENT.



The opinion of the court was delivered by: Trager, J

MEMORANDUM AND ORDER

Pro se movant Joyce Edwards ("Edwards") filed this motion pursuant to 28 U.S.C. § 2255. For the reasons set forth below, the motion is denied.

Background

Edwards was a teller at the Avenue J branch of the Atlantic Liberty Savings Bank ("the Bank") in Brooklyn, New York. Together with other tellers, managers, and the President of the organization, Edwards engaged in bank fraud by issuing teller's checks, both to her creditors and herself, to pay for her personal expenses. The following information regarding the multiple frauds committed at the Bank are taken from the Presentence Investigation Report ("PSR"), the details of which were accepted by Edwards at sentencing. Tr. of Sentencing, May 23, 2000 ("Sent. Tr.") at 6. An investigation at the Bank was commenced by the Internal Revenue Service ("IRS") regarding failure to submit Currency Transaction Reports ("CTR") and Suspicious Activity Reports ("SAR").*fn1 The investigation revealed that Edwards initially became involved in the scheme when Betty Lane ("Lane"), the branch manager, began having Edwards and two other tellers sign bank checks that were then deposited into accounts created to perpetrate fraud. After becoming involved in the scheme by co-signing the checks, Edwards and the other tellers began to engage in similar schemes to defraud the Bank. Some of the tellers involved in the scheme were brazen enough to remove funds directly from their teller's tray without even trying to cover-up the thefts, while all conducted fraud based on the example set by Lane. While each of the other employees involved in the scheme were aware of the fraudulent activities of the other participants, they did not share in the proceeds of their fellow employees' defalcations.

In order to conceal her activities, Edwards would issue duplicate bankbooks for the accounts of certain customers. These passbooks were then used to secretively remove funds from the customer accounts to cover the teller's checks that were illegally being issued. Upon investigation, it was found that Edwards had made unauthorized withdrawals from customer accounts to pay for credit card bills, department store bills, cover dayto-day expenses and to buy a cooperative apartment in Brooklyn, New York. Additionally, Edwards, with others, made an unauthorized withdrawal in the amount of $50,000, which was invested with Schwab Financial Services in order to recover the money that had been stolen; the money used to create this account, however, did not appreciate and was lost. All told, Edwards was involved in stealing at least $600,000 in a scheme that, in total, defrauded the Bank of over two million dollars.

Because the fraudulent activities involved many of the same people, the investigation into all responsible parties was conducted simultaneously. In preparing its case against the defendants, the government requested and received an affidavit of loss from the Bank, which indicated that all of the fraudulent activity at the Bank resulted in a loss of funds over two million dollars.*fn2 In preparing its case against Edwards, the government used statements prepared by the Bank to determine the portion of the total amount stolen that was attributable to Edwards. This was not done on the basis of a percentage of the total loss but was calculated based on Edwards's actual activities. A letter from the Bank's insurance company, forwarded to the court, indicated that a little over one million dollars was covered by the insurance policy held by the bank. It is on this document that Edwards bases her belief that the actual loss was less than the two million dollars presented during plea negotiations. Aff. of Loss, May 23, 2000. While the insurance company may have only paid a portion of the loss, the number reported by the Bank in its corrected affidavit of loss, as represented by the government at sentencing, is the actual amount stolen and is the proper basis for calculating Edwards's participation.

Edwards pled guilty to conspiracy to commit bank fraud under 18 U.S.C. § 371, and on May 23, 2000, was sentenced to eighteen months' imprisonment, two years of supervised release, restitution in the amount of $600,000, and was ordered to forfeit the apartment bought with the proceeds of the fraud. Sent. Tr. at 10. Based on Edwards's PSR, prepared by the United States Probation Department, and the affidavit of loss submitted by the victim Bank, the government estimated the loss caused by Edwards to be "at least $600,000." Sent. Tr. at 4. The restitution amount set during sentencing was based on both the affidavit of loss and the presentence report. Sent. Tr. at 10. To date, Edwards has satisfied the custodial sentence imposed, completing her prison term and the subsequent period of supervised release.

Edwards filed a petition to vacate, set aside, or correct a sentence pursuant to 28 U.S.C. § 2255 on May 22, 2001, which is within the one-year limitation set forth by statute. 28 U.S.C. § 2255 (1996). Edwards seeks to collaterally attack her sentence on the ground of ineffective assistance of counsel and she seeks an amendment to the amount of restitution ordered to reflect the reduction in actual loss presented by the bank.

Discussion

Edwards is ultimately seeking a reduction in the amount of restitution ordered after pleading guilty to one count of conspiracy to commit bank fraud. In her § 2255 motion, Edwards claims that the amount of restitution should be reduced to approximately $300,000 because of an alleged difference between the actual loss suffered and the loss calculation used during sentencing. This claim fails because § 2255 motions may only be used to challenge custodial orders, not orders of restitution. Kaminski v. United States, 339 F.3d 84, 87 (2d Cir. 2003) (holding that restitution orders that do not restrain liberty are non-custodial). In her § 2255 motion, Edwards also claims that ineffective assistance of counsel resulted in an improper restitution order.*fn3 This also fails under Kaminski, 339 F.3d at 87, as a challenge that cannot be raised using a § 2255 motion but should have been raised on direct appeal. Even if such a claim could be raised under § 2255, Edwards's claim does not meet the requirements for an ineffective assistance of counsel claim as set forth in Strickland v. Washington, 466 U.S. 668 (1984). Ultimately, Edwards's claims either fail for lack of jurisdiction under § 2255 or, on the merits, fail to overcome the burden of proof required.

(1) Amendments to Restitution Orders Improper under 28 U.S.C. § 2255

Edwards's motion is grounded on 28 U.S.C. § 2255, which states in relevant part that "[a] prisoner in custody under sentence of a court established by Act of Congress claiming the right to be released upon the ground that the sentence was imposed in violation of the Constitution or laws of the United States . . . may move the court which imposed the sentence to vacate, set aside or correct the sentence." (Emphasis added). The plain language of the statute clearly indicates that any motion made pursuant to the statute must focus on a claimed right to be released from custody. Therefore, "a petitioner who challenges just the restitution portion of his sentence is asserting his right to be released from custody only if the restitution order itself amounts to a form of custody." Kaminski, 339 F.3d at 86-87.

Neither Edwards nor the government, in its response to the motion, argued whether the order of restitution was properly challenged under a § 2255 motion in this case. Despite the failure of the parties to raise this concern, nonetheless the plain language of the statute requires that the movant be both in custody (or subject to possible incarceration) and seeking a release therefrom. 28 U.S.C. § 2255. Unless these conditions are met, the statute will not confer jurisdiction.

In Kaminski, the court did not decide the question of whether restitution orders, per se, can ever rise to a level of restraint on liberty such that they can be construed as custodial orders. 339 F.3d at 87. Instead, the court limited its holding to the restitution order at issue in that case, which required monthly payments of the greater of either $100 or 10% of Kaminski's monthly ...


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