Ruza v. Mich. Dep't of Corr., 1:20-cv-808

CourtUnited States District Courts. 6th Circuit. United States District Court (Western District Michigan)
Writing for the CourtPHILLIP J. GREEN United States Magistrate Judge
PartiesSteven Barry Ruza, Petitioner, v. Michigan Department of Corrections, Respondent.
Docket Number1:20-cv-808
Decision Date09 July 2021

Steven Barry Ruza, Petitioner,

Michigan Department of Corrections, Respondent.

No. 1:20-cv-808

United States District Court, W.D. Michigan, Southern Division

July 9, 2021

Honorable Hala Y. Jarbou


PHILLIP J. GREEN United States Magistrate Judge

This is a habeas corpus action brought by a state prisoner under 28 U.S.C. § 2254. The Respondent has filed an answer (ECF No. 8) along with the state-court record (ECF Nos. 9-1 - 9-16), pursuant to Rule 5, Rules Governing § 2254 Cases. Following an initial review of the record, the Court ordered Respondent to supplement the record, and Respondent has done so. (ECF Nos. 14-1 - 14-48.) After reviewing the state court record, I conclude that the petition is not barred by the one-year statute of limitations, as urged by the Respondent, nor are the issues raised procedurally defaulted. Nonetheless, I conclude that the petition fails to raise a meritorious federal claim and, therefore, is properly denied.


I. Factual Allegations

Petitioner's habeas petition is not a model of clarity. The form calls for Petitioner to set forth “every ground on which you claim that you are being held in violation of the Constitution, laws, or treaties of the United States.” (Pet., ECF No. 1, PageID.9.) Petitioner responds with only the following: “I was convicted with a state criminal statute when I was to be prosecuted under Dodd Frank.”[1] (Id.) The form invited Petitioner to provide supporting facts. He responded as follows:

Dodd Frank-12 CFR 1015, 12 CFR 1091.100 and 12 U.S.C. 5481 A vii says I was covered and my liability was limited to a civil remedy. New evidence has risen showing I never agreed to restitution figure; I was defrauded; innocence ineffective asst. of counsel; investigative &amp prosecutorial misconduct


Respondent interprets Petitioner's cryptic recitation of grounds as raising four issues:

I. Dodd Frank preempts Petitioner's state prosecution for conducting a criminal enterprise
II. Petitioner did not agree to the restitution amount.
III. Petitioner's cou\nsel provided ineffective assistance.
IV. The prosecutor committed misconduct in investigating and presenting the claims against Petitioner.

(Response, ECF No. 8, PageID.74 - 84.) After reviewing Petitioner's submissions to this Court and his submissions to the state courts, the undersigned concludes that Respondent's interpretation of the petition is reasonable, and the undersigned will address the issues as Respondent has described them.

On September 2, 2015, during a hearing in Michigan's 48th District Court, Petitioner pled guilty to one count of conducting a criminal enterprise, in violation of Mich. Comp. Laws § 750.159i, one of several charges raised against Petitioner in a prosecution in the Oakland County Circuit Court. (Plea Hr'g Tr., ECF No. 9-2.) The plea agreement included many terms, including an agreement to a maximum minimum sentence of forty months, a prompt down payment of $250, 000.00 on Petitioner's “to-be-determined” restitution obligation, and Petitioner's submission to psychological testing. In exchange for Petitioner's plea, the prosecutor agreed to drop all of the other charges.

Although Petitioner now claims otherwise, there is nothing in the plea agreement or the plea hearing transcript that suggests a term regarding total restitution or a term requiring the parties to agree to the total restitution amount or that the total restitution amount could not be settled without Petitioner's written permission. To the contrary, the transcript makes clear that the amount of restitution remained to be determined and the plea in no way depended upon Petitioner's concurrence in the ultimate determination.

To understand the nature of Petitioner's challenges to his conviction requires an examination of the elements of the crime to which he entered his plea. In People v. Speed, 952 N.W.2d 550 (Mich. Ct. App. 2020), the Michigan Court of Appeals described the statute and the elements of the crime as follows:

MCL 750.159i provides in relevant part:
(1) A person employed by, or associated with, an enterprise shall not knowingly conduct or participate in the affairs of the enterprise directly or indirectly through a pattern of racketeering activity.
A “pattern of racketeering activity” means not less than two incidents of racketeering to which all of the following characteristics apply:
(i) The incidents have the same or a substantially similar purpose, result, participant, victim, or method of commission, or are otherwise interrelated by distinguishing characteristics and are not isolated acts.
(ii) The incidents amount to or pose a threat of continued criminal activity.
(iii) At least 1 of the incidents occurred within this state on or after the effective date of the amendatory act that added this section, and the last of the incidents occurred within 10 years after the commission of any prior incident, excluding any period of imprisonment served by a person engaging in the racketeering activity. [MCL 750.159f(c).]
The term “racketeering, ” in turn, is defined as
committing, attempting to commit, conspiring to commit, or aiding or abetting, soliciting, coercing, or intimidating a person to commit an offense for financial gain, involving any of the following:
(ii) A violation of . . . [MCL 750.452, MCL 750.455, MCL 750.457, MCL 750.458, or MCL 750.459], concerning prostitution.
(jj) A violation of [MCL 750.462a et seq.] concerning human trafficking. [MCL 750.159g, as amended by 2014 PA 300, effective January 1, 2015.]
In order to find defendant guilty of racketeering, then, the jury needed to find beyond a reasonable doubt that
(1) an enterprise existed, (2) defendant was employed by or associated with the enterprise, (3) defendant knowingly conducted or participated, directly or indirectly, in the affairs of the enterprise, (4) through a pattern of racketeering activity that consisted of the commission of at least two racketeering offenses that (a) had the same or substantially similar purpose, result, participant, victim, or method of commission, or were otherwise interrelated by distinguishing characteristics and are not isolated acts, (b) amounted to or posed a threat of continued criminal activity, and (c) were committed for financial gain. [People v Martin, 271 Mich.App. 280, 321; 721 N.W.2d 815 (2006).]

Speed, 952 N.W.2d at 553-54.

Petitioner's crime was based on “assisting” mortgagors in their attempts to convince banks to modify mortgage terms because of the mortgagors' financial hardships. The letters Petitioner sent to the banks to obtain the modifications, however, contained false information. It does not appear Petitioner was ever - or at least not often - successful in his efforts. The banks did not modify the mortgage terms and many mortgagors apparently lost their homes to foreclosure. Petitioner's scheme left many victims, including the banks who might have been defrauded by Petitioner's false applications to modify mortgage terms and the mortgagors who paid Petitioner for his doomed efforts to modify the mortgage terms. The predicate acts[2]that formed the pattern of racketeering activity to which Petitioner pled guilty were not his fraudulent interactions with the mortgagors, they were specifically his fraudulent mailings to two specific banks. (Plea Tr., ECF No. 9-2, PageID.132.) It appears that the criminal charges that included Petitioner's fraudulent interactions with mortgagors were either dismissed as part of the plea agreement or considered part of the pattern of racketeering activity that supported the “criminal enterprise” charge, but not admitted at Petitioner's plea hearing.

Even though the criminal charges relating to Petitioner's defrauding of the mortgagors were dismissed or otherwise not expressly acknowledged at the plea hearing, the plea agreement required Petitioner to waive any challenge that the restitution amount was based on conduct other than the conduct to which he entered his plea. Therefore, the damage to the mortgagors could be part of the restitution amount despite the dismissal of charges related to defrauding the mortgagors or Petitioner's “silence” regarding those claims. The plea transcript, Petitioner's sentencing hearings, and the negotiation and ultimate resolution of the restitution amount, make very plain that the damage to the mortgagors was intended to be reflected in the restitution to be ordered by the court.

At the time the Oakland County Circuit Court determined Petitioner's term of imprisonment, the court had still not set the restitution amount. (Sentencing Tr., ECF No. 9-3, PageID.328.) The court sentenced Petitioner to one year in the county jail and five years' probation. (Id., PageID.326-327.)

Although the court did not determine a restitution amount at the time Petitioner's jail term was set, the parties had made some progress in negotiating the amount of restitution. (Stip. & Order Approving Restitution, ECF No. 9-4, PageID.337, ¶¶ 3-5); see also Oakland Cnty. Cir. Ct. Register of Actions, ECF No. 91, PageID.104 (showing a stipulation and order regarding restitution entered December 18, 2015, and the judgment noting that restitution is “TBD”). While Petitioner was serving his year in county jail, his counsel and the Michigan Attorney General reached agreement regarding the restitution amount. The agreement included terms that went beyond the restitution amount that Petitioner was obligated to pay. The stipulation set out a total amount of damage that Petitioner had caused to his victims ($989, 958.56).

Petitioner had already paid $250, 000.00. The State of Michigan agreed to pay the balance to the victims out of the state's Homeowner Protection Fund and, because the parties disputed how much of that damage...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT