United States of America v. Schwarzbaum

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO.: 18-cv-81147-BLOOM/REINHART

UNITED STATES OF AMERICA,

Plaintiff,

vs.

ISAC SCHWARZBAUM,

Defendant.

_______________________________________/

REPORT AND RECOMMENDATION ON CIVIL CONTEMPT SANCTIONS

The United States has an unpaid judgment against Isac Schwarzbaum for
$19,591,504.69 plus additional late payment penalties and post-judgment interest.
ECF No. 210. Mr. Schwarzbaum was ordered to repatriate his assets. ECF No. 176.
He did not comply with that Order, so the Court found him in civil contempt. ECF
No. 199. The Court deferred deciding what, if any, contempt sanction should be
imposed. ECF No. 204. I held an in person hearing on August 28, 2025. Mr.
Schwarzbaum failed to appear.
In their Motion, the United States asks for sanctions of imprisonment, a
monetary fine, or a combination of both. ECF Nos. 189, 203. At the August 28, 2025
Hearing, the United States conceded that imposing any additional monetary fines
would be futile. Instead, the United States now asks the Court to issue a bench
warrant and consider criminal contempt for Mr. Schwarzbaum’s failure to appear.
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For the reasons discussed below, I recommend that the District Court find that Mr.
Schwarzbaum remains in contempt and issue a coercive civil contempt sanction in
the form of a bench warrant. I will address criminal contempt for failure to appear by
a separate Report and Recommendation.
I. LEGAL PRINCIPLES
“District courts enjoy ‘wide discretion to fashion an equitable remedy for [civil]
contempt that is appropriate to the circumstances.’” United States v. City of Miami,
195 F.3d 1292, 1298 (11th Cir.1999) (citing E.E.O.C. v. Guardian Pools, Inc., 828 F.2d
1507, 1515 (11th Cir.1987)). Nevertheless, “[c]ivil contempt sanctions may not be
used to impose what amounts to a punitive or criminal contempt sanction.” See id.
“[S]anctions in civil contempt proceedings may be employed for either or both of two
purposes: to coerce the defendant into compliance with the court's order, and to
compensate the complainant for losses sustained.” Local 28 of Sheet Metal Workers'
Int'l Ass'n v. EEOC, 478 U.S. 421, 443 (1986) (internal quotation marks omitted).
Courts may order incarceration as a coercive civil contempt sanction. The
Court issues a bench warrant to implement such an order:
A bench warrant, or, more traditionally, a “capias,” instructs the police
to arrest someone to ensure that he appears in court. Courts have long
issued bench warrants after holding someone in contempt. And the
Federal Rules of Civil Procedure today expressly contemplate bench
warrants for “civil contempt of a decree or injunction.” Fed. R. Civ. P.
4.1(b).

United States v. Phillips, 834 F.3d 1176, 1181 (11th Cir. 2016) (internal citations
omitted). Rule 4.1(b) says, “An order committing a person for civil contempt of a
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decree or injunction issued to enforce federal law may be served and enforced in any
district.”
Nevertheless, there are limits on coercive incarceration. To prevent a sanction
from becoming criminal in nature, incarceration may be used to obtain compliance
only where there is a “realistic possibility” that the contemnor will comply with the
order. See In re Lawrence, 279 F.3d 1294, 1300–01 (11th Cir.2002); see also Schiff v.
Grenough, 2012 WL 5493646, at *5 (M.D.Fla. Oct. 22, 2012), report and
recommendation adopted, 2012 WL 5493616 (M.D.Fla. Nov. 13, 2012)
(“[I]ncarceration may be used to obtain compliance only where the contemnors have
the present ability to purge themselves of contempt and willfully fail to comply with
the court order.”).
Likewise, civil sanctions become futile when the offending party repeatedly
ignores the court’s orders or when the sanctioned party lacks the ability to comply.
S.E.C. v. Greenberg, 105 F. Supp. 3d 1342 (S.D. Fla. 2015) (citing S.E.C. v. Universal
Exp., Inc., 546 F.Supp.2d 132, 142 (S.D.N.Y.2008) (“Imposing escalating fines on a
defendant who has brazenly refused to pay an already large judgment would be an
empty gesture.”)).
“When fashioning a sanction to secure compliance, a district court should
consider “‘the character and magnitude of the harm threatened by continued
contumacy and the probable effectiveness of any suggested sanction in bringing about
the result desired.’” Citronelle-Mobile Gathering, Inc. v. Watkins, 943 F.2d 1297 (11th
Cir. 1991) (internal citations omitted).
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II. DISCUSSION
First, this Court has already found Mr. Schwarzbaum in contempt for failure
to repatriate his assets. ECF Nos. 196, 199. To date he still has not done so. For the
same reasons discussed in my previous Report and Recommendation, there is clear
and convincing evidence that Mr. Schwarzbaum is able to comply and is nevertheless
refusing to do so. See ECF No. 196 at 4. So, I recommend that the District Court find
that he remains in civil contempt.
Next, having considered the character and magnitude of the harm threatened
by continued contumacy and the probable effectiveness of any suggested sanction, the
United States has not suggested nor can this Court fashion a reasonable monetary
sanction that would secure compliance. Mr. Schwarzbaum has failed to repatriate his
assets and failed to satisfy an already large money judgment. So, imposing escalating
fines would be an empty gesture.
The United States has suggested a bench warrant as an alternative coercive
civil contempt sanction. In support, the United States says if the Court issues a bench
warrant, the United States would be able to register that warrant with the United
States Border Patrol and/or the Department of Homeland Security so that Mr.
Schwarzbaum would be arrested if he tried to enter the United States. The United
States also says it may be able to enforce the warrant overseas. I find that this
sanction could reasonably achieve compliance.
Other courts in this District have issued bench warrants where monetary fines
did not coerce a defendant to comply with orders. Dogwood State Bank, A N. Carolina
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State-Chartered Bank, Plaintiff, v. Manal S. Moussa-Oliver, Individually, & Michael
W. Oliver, Individually, Defendants., No. 23-22539-cv, 2025 WL 2434360 (S.D. Fla.
Aug. 25, 2025); see also Phillips, 834 F.3d at 1181. This Court has held that arrests
based on bench warrants satisfy the Fourth Amendment, see Simon v. United States,
644 F.2d 490, 494 (5th Cir. 1981), and our sister circuits agree with that proposition
even when the bench warrant is based on civil contempt.”) (citations omitted).
Accordingly, this Court should issue a bench warrant against Mr.
Schwarzbaum and direct that, upon arrest, Mr. Schwarzbaum remain in custody
until he cures his contempt by repatriating his money. In the interest of judicial
economy, the District Court should also direct the United States to file yearly status
reports on whether, (1) Mr. Schwarzbaum complies, (2) the warrant is executed, or
(3) in the event of Mr. Schwarzbaum’s death.
REPORT AND RECOMMENDATION
Accordingly, this Court RECOMMENDS that the District Court find that Mr.
Schwarzbaum continues to be in Civil Contempt for his failure to repatriate his
assets, issue a bench warrant, and direct the United States to file yearly status
reports starting September 04, 2026.
NOTICE OF RIGHT TO OBJECT
A party shall serve and file written objections, if any, to this Report and
Recommendation with the Honorable Beth Bloom, United States District Court
Judge for the Southern District of Florida, within FOURTEEN (14) DAYS of being
served with a copy of this Report and Recommendation. Failure to timely file
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objections shall constitute a waiver of a party's "right to challenge on appeal the
district court’s order based on unobjected-to factual and legal conclusions." 11th Cir.
R. 3-1 (2016).
If counsel do not intend to file objections, they shall file a notice
advising the District Court within FIVE DAYS of this Report and
Recommendation.
DONE and SUBMITTED in Chambers at West Palm Beach, Palm Beach
County, in the Southern District of Florida, this 4th day of September 2025.

__________________________________
BRUCE E. REINHART
UNITED STATES MAGISTRATE JUDGE

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