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United States of America v. Charles Schwab

April 17, 2013


The opinion of the court was delivered by: David G. Larimer United States District Judge


Defendant, Charles Schwab ("Schwab"), represented by counsel,*fn1 moves to vacate his judgment and conviction pursuant to 28 U.S.C. § 2255. Schwab claims a violation of his rights under the Sixth Amendment to the Constitution in that he was denied "the right to counsel of his choosing." Schwab also claims that he was denied effective assistance of appellate counsel because of his attorney's failure to raise the issue presented here in this motion. The motion to vacate (Dkt. #616) is in all respects denied.

The procedural history and relevant facts are set forth by the parties in their filings on the motion, including Schwab's motion to vacate (Dkt. #616) and the Government's Answer (Dkt. #620). The procedural history and facts are largely undisputed.

In sum, Schwab was indicted with several others and charged with mail fraud, money laundering and conspiracy. After Schwab's retained counsel, John R. Parrinello, withdrew from the case, the Court appointed Robert Smith of the Federal Public Defender's Office to represent Schwab.

Approximately a year after that appointment, Schwab pleaded guilty to five counts of the Second Superseding Indictment. As part of the plea, Schwab also agreed to and admitted to the forfeiture allegation involving most of the properties that Schwab had previously posted as security for his release. In its Answer (¶ 19), the Government sets forth these properties with some specificity.

Subsequent to the plea, the Court sentenced Schwab on February 24, 2009, principally to a term of 144 months imprisonment. Schwab attempted to appeal the Judgment of Conviction, but the Second Circuit dismissed the appeal. United States v. Schwab, 421 Fed. Appx. 57 (2d Cir. 2011). The Second Circuit determined that the plea colloquy was sufficient, that the plea was knowing and voluntarily made, and that the appeal waiver contained in the plea agreement was valid and enforceable. Thereafter, Schwab filed a petition for a writ of certiorari to the United States Supreme Court but the Supreme Court denied the petition on October 3, 2011. Schwab v. United States, 132 S. Ct. 338.

There has been no violation of Schwab's constitutional rights. Schwab's present motion is denied, both on procedural grounds and on the merits.

First, Schwab is now precluded from raising the issue set forth in the present motion to vacate because the issue was not raised on direct appeal, although it certainly could have been. Schwab is, therefore, procedurally barred from litigating the issue now.

An aggrieved party may not appeal adverse decisions in a piecemeal fashion. As noted by the Government in its answer here, both the United States Supreme Court and the United States Court of Appeals for the Second Circuit have dismissed later collateral proceedings for procedural default under circumstances where an issue could have been raised on appeal, but was not. Any issue presented under such circumstances is subject to procedural default in a subsequent proceeding, absent cogent and compelling reasons. See United States v. Frady, 456 U.S. 152, 162-167 (1982); United States v. Hussein, 178 F.3d 125, 130 (2d Cir. 1999).

Prior to taking the plea in this case, Schwab had objected, through prior retained counsel, that Schwab's Sixth Amendment right had been violated by the Government's seizure of assets that Schwab hoped to use to provide further monies for retained counsel. In spite of the appeal waiver provision in the plea agreement, Schwab did attempt to appeal the judgment to the Second Circuit, but failed to raise the issue now advanced here. Schwab is procedurally barred from seeking this relief now. There are no cogent and compelling reasons to warrant deviation from the well-established principles set out above.

On the merits, Schwab fares no better. There is no basis to vacate the judgment based on the claim now raised by Schwab.

Stripped of the rhetoric concerning the Sixth Amendment right to counsel, Schwab's argument is straightforward. He claims that the Government's decision to take steps to seize most of Schwab's real and personal assets precluded Schwab from utilizing those assets to pay additional monies to his retained attorney, Parrinello. Although Parrinello had apparently received some money ($75,000), he refused to proceed further with the case unless he was paid several hundred thousand dollars more. In the strongest terms, Parrinello refused the Court's offer to appoint him as counsel under the Criminal Justice Act at its applicable rates.*fn2

In essence, Schwab claims that the statutory asset forfeiture provisions impermissibly burdened his Sixth Amendment rights because the seizure prevented his use of the funds for his own purposes, principally to pay counsel. Unfortunately for Schwab, the United States Supreme Court, and other federal courts, has considered the precise issue raised here and rejected his argument.

The Government's answer (Dkt. #620, p. 14-16) discusses the Supreme Court decisions and other authorities on the issue. See United States v. Monsanto, 491 U.S. 600 (1989), and Caplin & Drysdale Charter v. United States, 491 U.S. 617 (1989). In essence, these cases stand for the proposition that a defendant does not have the right to use illegally obtained funds to finance his defense. As pointed out in the cases relied on by the Government, the Government has an important and legitimate ...

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