Argued: November 29, 2017
Appeal from the United States District Court for the Southern
District of New York
cross appeals from a judgment of the United States District
Court for the Southern District of New York (Marrero,
J.), entered pursuant to 28 U.S.C. § 2255, the
parties challenge a reduction in the defendants'
restitution obligations as imposed in their original
judgments of conviction. Defendants argue that even the
reduced restitution amounts are not supported by the record.
The government argues that § 2255 does not authorize,
nor do the facts warrant, any reduction in
restitution. We agree with the government. Consistent with
this court's controlling precedent, we conclude that
§ 2255 jurisdiction does not reach the restitution part
of a sentence where, as here, the restitution cannot be
deemed custodial punishment. It is not the amount of
restitution alone but, rather, the terms of payment that
identify those rare cases in which a restitution order might
equate to custodial punishment. Because the challenged
judgments here contemplate the payment of restitution on
schedules yet to be set by the district court, defendants
cannot show on the present record that their restitution
obligations are custodial punishments for purposes of §
2255 review. Accordingly, the judgment reducing restitution
must be vacated, and the case is remanded for reinstatement
of the original judgments. No different conclusion is
warranted for defendant Baran, who also invoked coram
nobis to seek relief from restitution. Although the
district court did not rule on Baran's coram
nobis petition, there is no need for it to do so on
remand because Baran identifies no fundamental error in her
original restitution sentence, as necessary for coram
B. Tehrani, Assistant United States Attorney (Karl Metzner,
Assistant United States Attorney, on the brief), for Geoffrey
S. Berman, United States Attorney for the Southern District
of New York, New York, New York, for
W. Ryan, Jr., Law Offices of Joseph W. Ryan, Jr., Melville,
New York, for Defendant-Appellant-Cross-Appellee Joseph
M. Maher, Law Offices of Sean M. Maher, PLLC, New York, New
York, for Defendant-Appellant-Cross-Appellee Peter J.
D. Cline, Law Office of John D. Cline, San Francisco,
California (Thomas A. Durkin, Durkin & Roberts, Chicago,
Illinois, on the brief), for Defendant-Appellant-Cross-
Appellee Peter J. Lesniewski.
Baran, pro se, Danbury, Connecticut.
Before: Jacobs, Raggi, Droney, Circuit Judges.
Raggi, Circuit Judge
Joseph Rutigliano, Peter J. Ajemian, Peter J. Lesniewski, and
Marie Baran stand convicted in the United States District
Court for the Southern District of New York (Victor Marrero,
Judge) for participating in a massive scheme to
defraud the United States Railroad Retirement Board
("RRB") by filing fraudulent disability pension
applications on behalf of Long Island Rail Road
("LIRR") employees. See United States v.
Ajemian, No. 11 Cr. 1091 (S.D.N.Y.), Dkt. Nos. 401, 592,
649, 704. Defendants here appeal from a subsequent judgment
of the same court, entered on November 1, 2016, which, in
response to their motions for vacatur of sentence pursuant to
28 U.S.C. § 2255, amended each defendant's sentence
in part to reduce original restitution obligations: for
Rutigliano from $82, 356, 348 to $42, 317, 076; for Ajemian
from $116, 500, 000 to $53, 494, 797; for Lesniewski from
$70, 632, 900 to $34, 237, 476; and for Baran from $31, 398,
907 to $21, 467, 954. See United States v. Ajemian,
No. 11 Cr. 1091 (VM), 2016 WL 6820730, at *3-4 (S.D.N.Y. Nov.
1, 2016). Defendants argue that even these reduced amounts
are not supported by record evidence. The government
cross-appeals, arguing that § 2255 does not authorize,
nor do the facts warrant, any reduction of the restitution
parts of defendants' sentences. The government further
argues that the certificate of appealability granted
defendants in this case does not reach their restitution
challenges; that Ajemian waived any challenge to restitution
in his plea agreement; and that, insofar as Baran had already
filed one unsuccessful § 2255 motion, she had not
secured the necessary leave to file a successive petition.
not reach the government's last three arguments because
we are persuaded by its first. We conclude that § 2255
does not authorize district courts to hear collateral
challenges to the restitution parts of criminal sentences
where, as here, restitution obligations do not equate to
custodial punishment. Accordingly, we vacate the § 2255
judgment reducing defendants' restitution obligations as
imposed in their original judgments of conviction, and we
remand for reinstatement of the original judgments. To the
extent defendant Baran also invoked coram nobis to
seek relief from restitution, the district court did not
address that claim, but no remand is necessary for that
purpose because Baran cannot show fundamental error in the
original order of restitution.
Defendants' Convictions and Original Sentences
fraud scheme for which defendants stand convicted sought to
take advantage of a disability pension plan made available to
LIRR employees by the RRB. The LIRR's own pension plan
allowed employees with 20 or more years of service to retire
as early as age 50 and to receive payments equal to half
their pre-retirement income. When an employee reached age 62
or 65, he was eligible for an additional retirement pension
from the RRB. The RRB also offered disability pensions to
employees of any age who were no longer able to work, for
which payments began immediately upon approval of a
of a decades-long scheme to defraud the RRB, defendants
Rutigliano, Ajemian, Lesniewski, and Baran, together with 17
confederates, repeatedly submitted applications for
disability pensions based on fabricated medical documents.
Orthopedic physicians Ajemian and Lesniewski created these
fabricated documents. Rutigliano, a former LIRR conductor and
union local president, obtained a disability pension for
himself by submitting false documentation of his physical
condition from Lesniewski. Rutigliano also acted as a
facilitator or consultant for numerous other LIRR employees
seeking disability pensions, charging approximately $1, 000
per person to fill out fraudulent applications. Baran, a
former RRB employee whose LIRR-employed husband obtained an
RRB disability pension through a fraudulent application
supported by Lesniewski, also acted as a
facilitator-for-hire, submitting disability pension
applications for LIRR employees that she knew were supported
by fraudulent documentation.
January 18, 2013, Ajemian entered into an agreement with the
government and pleaded guilty to conspiracy to commit mail,
wire, and health care fraud, as well as substantive health
care fraud. See 18 U.S.C. §§ 1347, 1349.
On May 24, 2013, the district court sentenced Ajemian
inter alia to 96 months' imprisonment and
ordered $116, 500, 000 restitution, the amount identified in
his plea agreement. Further consistent with that agreement,
Ajemian did not challenge his conviction or any part of his
sentence on direct appeal.
Lesniewski, and Baran stood trial and, on August 6, 2013, a
jury found them guilty of multiple conspiratorial and
substantive counts of mail, wire, and health care fraud.
See id. §§ 371, 1341, 1343, 1347, 1349.
The district court sentenced Rutigliano and Lesniewski
inter alia to 96 months' imprisonment each and
to $82, 356, 348 and $70, 632, 900 in restitution
respectively. It sentenced Baran inter alia to 60
months' imprisonment and $31, 398, 907 restitution.
restitution amounts ordered were based on data compiled by
Natasha Marx, an Auditor in the Office of the RRB Inspector
General, and reflected disability pension payments made to
identified LIRR annuitants-for whom each defendant had
submitted or supported fraudulent claims-as of the dates the
RRB terminated their disability pensions due to the discovery
of the fraud.
Lesniewski, and Baran unsuccessfully challenged their
convictions, including their sentences, on direct appeal.
See United States v. Rutigliano, 790 F.3d 389 (2d
Cir. 2015); United States v. Rutigliano, 614
Fed.Appx. 542 (2d Cir. 2015).
The RRB Board Orders and Post-Termination Approvals
submit that post-conviction actions by the RRB constitute new
evidence supporting the instant collateral challenges to
their convictions and ...