jump to navigation

Former Construction Company Dispatcher Charged with Accepting Kickbacks June 14, 2010

Posted by jefhenninger in News.
Tags: , , ,
add a comment

HULON EUGENE PARSONS, a/k/a GENE PARSONS, JR., a resident of Hammond, Louisiana, was charged today in a one count bill of information with illegally accepting kickbacks from a subcontractor in connection with a federal contract.

According to court documents, the defendant was employed by a construction company headquartered in New Orleans which had agreed to perform asphalt work on the Naval Air Station Joint Reserve Base Belle Chasse, located in Belle Chasse, Louisiana. That company held a subcontract under a prime contract awarded by Naval Facilities Engineering Command Southeast, an agency of the Department of the Navy. As a trucking dispatcher for his employer, PARSONS’ job duties included deciding which trucking companies would be awarded trucking business in connection with various public works projects, specifically asphalt road projects, of his employer. A cooperating individual reported to law enforcement that he owned a trucking business and he had made cash payments to PARSONS over at least 10 years to ensure that he would continue to be awarded trucking business. When the individual ceased making such payments, the frequency and amount of trucking work awarded to that individual greatly decreased.

Court documents reflect that the individual, using money furnished to him by law enforcement for that purpose, then offered cash payments to PARSONS to obtain and reward favorable treatment in connection with trucking work awarded to him on the Naval Air Station Joint Reserve Base Belle Chasse subcontract. The bill of information charges that PARSONS accepted a total of $900 in cash payments on three occasions from September through November, 2009.

Will Brian Stack get caught up in Operation Bid Rig III? August 2, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , ,
1 comment so far

Yesterday, the Record reportedthat a donation of $4,000 from BH Property Management shows up on a 2007 campaign finance report for Union City First, a political action committee linked to Union City Mayor Brian Stack.  The company has been identified in a federal complaint as “an FBI undercover company” that was used to facilitate money laundering.  Of course, this doesn’t mean that every dollar the company gave was used or intended to be used to facilitate criminal activity. 

However, this story comes a day after the Star Ledger reportedthat Solomon Dwek, the cooperating witness who was at the heart of the 44 arrests of Operation Bid Rig III which ensnared three mayors, two state assemblymen and five rabbis.    Dwek reportedly gave $2,600 to Stack as well as $3,500 to U.S. Sen. Robert Menendez.  Menendez claimed to not know who Dwek was.

It seems like Stack has either been contacted by law enforcement or had some indication that he would be looked at as he has hired attorney Dennis McAlevy.  McAlevy has also represented former Hoboken Mayor Anthony J. Russo who pled guilty  to extorting $317,220 from accounting firm in exchange for contracts.  Russo was sentenced to 30 months in prison.

I’m sure that as OBR3 moves on, some of the 44 people will provide evidence against others who have not been arrested yet.  Whether or not Stack is one of them remains to be seen.

Contractor arrested for theft by deception August 1, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , ,

Robert D. Hamway of Toms River, who is not a licensed contractor, was arrested and charged with theft by deception after allegedly taking money to fix a roof but never performing the work. 

These cases are common but in my opinion, most of them are not criminal cases.  Instead, they are civil cases where the customer does not want to go to civil court for a number of reasons.  While I have little to no facts here, my experience tells me that the customer got fed up at some point and asked for his money back.  However, Hamway may have dodged phone calls or told the customer that the money was on the way, when it never really was.  It is that conduct that occurs after the transaction that tends to push this into criminal court.

Story is here.

Ponzi schemes continue to roll up July 30, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , , ,
1 comment so far

Some of the ponzi schemes that surfaced over the past year are starting to plea out.  The latest includes Marcia Sladich, the former operator of a Clifton-based real estate investment program.  She admitted that she fraudulently stole more than $15 million from hundreds of investors.  She pleaded guilty on Thursday in federal court to a one-count information charging her with mail fraud.  Under federal sentencing guidelines, she faces up to 78 months in prison but of course, the guidelines are no longer mandatory.

After the circus that was the Madoff case, I would want a few more of these cases to shake out first before tempting fate.  Conventional wisdom has traditionally been that a good attorney can shave years off the sentencing guidelines in a white collar crime case.  My firm has made that a reality.  Of course, post-Madoff, some judges might want to send an example especially when the victims are in the hundreds.  A six and a half year sentence in a  $15 million case is pretty good deal so we’ll have to see what the judge hands down.

Story is here.

Mortgage fraud crackdown continues July 28, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , , ,

Six people, including an attorney were charged by the FBI this week with wire fraud.  With many of these investigations, the allegations stem from incidents that occurred in 2005.  As 2010 nears, the Feds have to focus on cases from 2005 or risk running into the statute of limitations.

Of course, the mortgage industry didn’t fall apart until 2008, so we will see these cases crop up for years to come.

Press release:

Six Mortgage Industry Insiders Charged by FBI and IRS

NEWARK, NJ—FBI Special Agent In Charge Weysan Dun announced today the arrest of Daniel Verdia, Don Apolito, Jaye Miller, and Chrystal Paling (all on Tuesday, July 21), as well as the surrender of Robert Gorman and Philip Blanch (on Friday, July 24)—all in connection with a mortgage fraud scam operated out of an office in Hasbrouck Heights, New Jersey. All of the arrests occurred without incident. The six defendants are each charged with one count of wire fraud, in a joint investigation between the FBI and IRS titled “Operation Follow The Money.”

The investigation centered around activities occurring between February and September of 2005. According to the criminal complaint, the defendants obtained five mortgage loans by fraud between February and September of 2005 and deceptively converted the proceeds of those loans to their own use. This was done by first misrepresenting to the buyers and sellers the terms of the mortgage financing the purchase, the disbursements of the mortgage proceeds, and the source of the proceeds to pay off the mortgages, among other details. The second phase of the fraud involved falsifying information on the mortgage loan applications—namely the income and assets of the purchasers on the loans, the source of the down payments on new purchases, and the disbursements of cash related to the mortgage proceeds. The defendants allegedly accomplished their misdeeds through numerous interstate wire transfers. In the end, the only people who made a profit were Verdia, Miller, Apolito, Gorman, Blanch, and Palings.


According to the complaint, Verdia, age 51, has owned and operated mortgage brokerage companies since 2001, beginning with Challenge Mortgage Services, LLC which was located at 377 Route 17, Hasbrouck Heights, New Jersey. Challenge later became Monarch Mortgage Services, LLC, which eventually moved to 1 International Boulevard, Mahwah, New Jersey in 2007. In February of that year, Verdia and his associates closed Monarch and opened The Mortgage Exchange at the same address.  While he operated Monarch at the Hasbrouck Heights location, Verdia also owned Capital Investment Strategies (CIS), LLC which operated out of the same office and purportedly was the source of funds for Verdia’s real estate ventures. According to the complaint, CIS is a shell company used by Verdia and his associates to fraudulently conceal money.

Defendant Jaye Miller, age 50, has actively worked with Verdia since 2000 and has functioned as a loan officer and loan processor within Verdia’s companies. Miller was also a 50% owner of CIS and endorsed checks made out to that entity—monies that were allegedly proceeds of fraudulent activity. Robert Gorman, age 60, has also worked in many of Verdia’s businesses. Gorman obtained information from the mortgage applicants and processed the applications. This involved knowingly signing and submitting applications with false information, according to the allegations. Don Apolito, age 37, has done business with Verdia since 2002 and operated a number of companies that supplied warehouse lines of credit that funded Verdia’s alleged fraudulent transactions. All three of the companies operated by Apolito—Nina Funding, Matrix Funding, and the Mortgage Exchange—were operated out of Verdia’s Hasbrouck Heights office. Additionally, the complaint alleges that Apolito also served the same function as Gorman: knowingly signing and submitting loan applications with false information. Attorney Philip Blanch, age 69, closed all of loans in question. It was his responsibility to ensure the legality of the transactions and to verify the accuracy of the information in the closing documents and disbursement of funds.  Blanch did this by signing the federal Uniform Settlement Statements (HUD-1) forms involved in the transactions.  However, the complaint alleges Blanch was well aware that information he “verified” on the HUD-1 statements was false. Crystal Paling, age 49, worked for Blanch. The complaint alleges that Palings recruited individuals to purchase and sell the properties that were the subjects of fraud in this case. The complaint also alleges that Palings authored many of the documents associated with these transactions and facilitated the wire transfers to and from Blanch’s trust account.

The Scheme

The following outline is based on allegations made in the criminal complaint.  In the simplest terms, a victim home owner (two of which in this case were suffering financial hardship due to medical expenses) was convinced by one of the defendants named above to either sell or refinance his or her home through Monarch Mortgage Services, LLC as part of a foreclosure bailout scheme. The defendants then recruited a straw buyer who was promised a sum of $5,000 for his or her participation. The defendants explained to the straw buyer that the original owner would repurchase the home after a short period of time when the owner had recovered from financial difficulties. The defendants also told the straw buyers that the mortgage payments for the newly purchased properties would be paid by Monarch. The defendants then falsified the financial information in the paperwork associated with the transaction. In one of the transactions, the falsified application was submitted to one of the companies under Apolito’s control, Matrix Funding, for loan approval and then later sold to an outside mortgage company. But in all other cases, the fraudulent applications were submitted directly to outside mortgage lenders. Once the loans were approved, the mortgage lenders wired funds to Blanch’s attorney trust account. At Blanch’s direction, Palings, would then wire all or most of the proceeds to CIS as a fee or payment. In the end, three of the victim homeowners received no compensation whatsoever for the sale of their homes. Furthermore, one of those three victims suffering financial hardship was lead to believe he was refinancing his home when in reality, he sold it for a 100% loss. The other two victims received a fraction of the money they were legitimately owed. The defendants, however, all received financial compensation for each of the five transactions.  None of the resulting mortgages from these five transactions were ever paid and all of them went into default. The total fraud in these five transactions is estimated at $1 million. 

“Those who are engaged in foreclosure bailout schemes are opportunistic thieves,” said Weysan Dun. “The defendants in this matter are charged with preying on the financially weak and desperate, our lending industry, and ultimately the taxpayers.To swindle people out of the roofs over their heads is just deplorable. But we will continue working with our partners in uncovering these schemes, bringing the fraudsters to justice, and educating the public.”

Acting SAC Julio La Rosa, IRS-Criminal Investigations stated, “We will continue to work closely with our law enforcement counterparts at the FBI to investigate allegations of mortgage fraud. These types of financial crimes add to the underground economy, erode the integrity of our tax system, and threaten the financial health of our communities.”

White collar crime sentencing gets tougher in New Jersey July 27, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , ,
add a comment

As a defense attorney in New Jersey, I’ve enjoyed great success in getting charges dropped a degree for sentencing purposes.  The case of State v. Lake, released today, just made this more difficult to achieve, even for white collar crime defendants as Lake is an official misconduct and bribery case. 

All you really need to know about Lake is that the Appellate Divison said “An analysis of the offense circumstances at once makes clear that this is not one of those rare cases that satisfies the interest of justice standard for a downgrade”.  Yup, rare cases.

While this does not make my job any easier, I don’t think it will impact my practice to a great extent as I have been able to pull off some amazing miracles at sentencing.  However, I’ll have to work extra hard to make sure the judges sees that my case is the rare case.  And, I can’t just say that its a non-violent offense. 
(NOTE: The status of this decision is Published.)













DOCKET NO. A-3988-07T43988-07T4








0x08 graphic




















0x08 graphic


Submitted May 18, 2009 – Decided




Before Judges Lisa, Sapp-Peterson and Alvarez.




On appeal from the Superior Court of New Jersey, Law Division, Salem County, Indictment No. 06-11-00515-S.




Anne Milgram, Attorney General, attorney for appellant/cross-respondent (Jeanne Screen, Deputy Attorney General, of counsel and on the brief).




Law Offices of Edward J. Crisonino and Zucker Steinberg Sonstein & Wixted, P.A., attorneys for respondent/cross-appellant (Edward J. Crisonino, on the brief; Jeffrey C. Zucker, on the letter relying on the brief).




The opinion of the court was delivered by








After a bench trial, defendant was convicted of one count of second-degree official misconduct, N.J.S.A.and two counts of second-degree bribery, N.J.S.A.After merging one bribery count with the other, the judge sentenced defendant, pursuant to N.J.S.A.to terms appropriate to a crime one degree lower than those of which he was convicted. The judge imposed concurrent three-year terms of imprisonment for official misconduct and the merged bribery counts. He also entered an order directing that defendant forfeit his public office and be forever disqualified from holding any such office. See N.J.S.A. 2C:51-2. 2C:44-1f(2), 2C:27-2a. 2C:30-2a,


Within ten days of the imposition sentence, the State filed an appeal pursuant to N.J.S.A.contending that the court erred in imposing a sentence appropriate for a crime one degree lower. Defendant’s sentence has been stayed pending appeal. See State v. Sanders, 107 N.J. 609, 617 n.7 (1987). 2C:44-1f(2),


Defendant filed a cross-appeal. His sole argument is that the evidence was insufficient to support his conviction of second-degree offenses, and he should have been convicted only of third-degree official misconduct and bribery.


We agree with the State and reverse on its appeal. We reject defendant’s argument and affirm on his cross-appeal.






We set forth in some detail the factual background because it is necessary to our analysis of the issues raised on both the appeal and cross-appeal.


Defendant was the mayor of the Township of Carneys Point. That municipality operates under a form of government in which the voters elect five township committee members who exercise legislative authority and appoint a mayor from amongst themselves. The mayor’s appointment authority is subject to approval of the Township Committee.


Defendant’s term of office was scheduled to end in 2006. He was running as a Republican candidate for reelection in the November 2006 general election. Defendant was also a member of the Township’s Sewerage Authority and served as the emergency management coordinator for Salem County. Defendant had a long history in local politics at both the municipal and county levels.


In 2006, the makeup of the Township Committee was three Republicans and two Democrats. Because defendant was up for reelection, if his seat was won by a Democrat, control of the local governing body would change parties. Anthony Rullo was the Democratic candidate opposing defendant. Rullo had previously served a term on the Township Committee as a Republican. After losing his seat in the prior election, he switched his party affiliation. Rullo was also a member of the Township Sewerage Authority.


Prior to July 4, 2006, defendant approached Rullo and proposed that if Rullo would withdraw as a candidate, he would be guaranteed reappointment to the Sewerage Authority when his term expired. On July 4, 2006, defendant went to Rullo’s home and again discussed Rullo’s Sewerage Authority reappointment. Defendant also proposed that he could arrange for Rullo to obtain part-time mechanical work for the Authority, which would enable him to earn some extra money. This was the type of work Rullo had done when employed by DuPont, before his retirement. Expanding upon the proposal, defendant told Rullo he wanted him to wait until less than sixty days before the election to drop out so the ballots would already be printed and his party could not offer a replacement candidate. Thus, defendant would be able to run unopposed and would likely be assured reelection.


Rullo and his wife were raising three grandchildren due to personal difficulties of their daughter (the children’s mother). Rullo informed his campaign manager about defendant’s overtures, and his campaign manager reported the information to the Salem County Prosecutor’s Office.


On July 25, 2006, defendant again went to Rullo’s home. Defendant told Rullo he could not have the part-time job at the Sewerage Authority because to be eligible he would have to cease being a member of the Authority for at least one year. Defendant offered an alternative proposal. He said he could arrange for Rullo to be hired as the Township’s zoning and housing inspector. The person presently holding that position was out on extended medical leave. The Township was in the process of advertising to fill the position until the end of the year. Defendant again conditioned his offer on Rullo dropping out of the election race.


On August 1, 2006, Detective Sergeant Gary Sandes, then with the Official Corruption Unit of the New Jersey State Police, was assigned to investigate the allegations concerning defendant. He contacted Rullo, who described the conditional offers made by defendant. Rullo agreed to cooperate by tape recording his future conversations with defendant. Rullo made clear that he had no intention of dropping out of the election, and he agreed to report all contacts with defendant to the police.


As instructed by the police, Rullo filed an application for the zoning and housing inspector job. On August 9, 2006, Rullo recorded a conversation he had with defendant at Rullo’s home. Defendant explained that Rullo would be coached on how to conduct himself in the interview for the zoning and building inspector job and would be provided in advance with five prepared questions that would be asked at the interview. Rullo feigned concern that he had not served as a housing inspector for thirty years and had lost his familiarity with the applicable codes. Defendant assured him that he would have no problem, and, although another application had been submitted by a better qualified candidate, he assured Rullo that the other Township Committee members would go along with appointing him. Defendant also assured Rullo that he would be appointed to a full term as the zoning and housing inspector the following year as long as he performed the job reasonably for the remainder of the year.


In exchange for these assurances, defendant again asked Rullo to withdraw from the election less than sixty days before election day. In these discussions, defendant commented that his party would then continue in power for the next three years. Defendant also told Rullo that if he dropped out more than sixty days prior to the election and the Democrats were able to place a replacement candidate on the ballot, the deal would be off.


On August 30, 2006, Rullo recorded another conversation with defendant at Rullo’s home. Defendant again offered Rullo the zoning and housing inspector job for the remainder of 2006, and reappointment for the 2007 term, in exchange for his dropping out of the upcoming election sometime in mid-September. Defendant offered advice to Rullo about how he should present the withdrawal of his candidacy to other members of his party who supported him and expended party funds for his campaign. Defendant suggested, for example, that Rullo explain that he was in financial difficulty, being retired and unexpectedly raising his grandchildren, as a result of which he needed to accept employment with the Township to earn some money. Defendant also suggested that Rullo tell his party members he felt bad running against defendant. Defendant reiterated that Rullo would be coached through the interview process for the zoning and housing inspector job, and he again assured him he would be reappointed for the 2007 term as long as he did a decent job for the remainder of 2006.


Rullo told defendant that on his application, when asked what salary he expected, he simply “wrote down there whatever the, the base salary is now.” Defendant responded, “[Y]ou ain’t gonna get rich, but it’s not bad for part-time work.” He continued: “And let’s say in January I would, ah, my preference is I would, I would look to [be]cause John [the current office holder out on medical leave] won’t be there is to move you into his job title and work offa that salary.”


After the August 30, 2006 meeting, defendant and Rullo saw each other only once, at a Sewerage Authority meeting. They did not discuss anything related to defendant’s proposal. Rullo, who had never intended to drop out of the election, withdrew his application for the zoning and housing inspector job. He stayed in the election race and defeated defendant.


At trial, Rullo and Sandes were the only witnesses for the State. The recordings and corresponding transcripts of the August 9 and 30, 2006 meetings were admitted in evidence. The transcripts are part of the appellate record. Defendant did not testify and did not present any fact witnesses. He presented ten character witnesses, who attested to his upstanding character, excellent reputation in the community, and years of service in local politics.




We first address defendant’s argument that, because the State produced no evidence that the value of the benefits sought to be conferred on Rullo exceeded $200, he should have been convicted of only third-degree offenses.


The official misconduct statute provides, in relevant part:


A public servant is guilty of official misconduct when, with purpose to obtain a benefit for himself or another . . . :




a. He commits an act relating to his office but constituting an unauthorized exercise of his official functions, knowing that such act is unauthorized or he is committing such act in an unauthorized manner; . . .




. . . .




Official misconduct is a crime of the second degree. If the benefit obtained or sought to be obtained . . . is of a value of $200.00 or less, the offense of official misconduct is a crime of the third degree.




[N.J.S.A.(emphasis added).] 2C:30-2




The bribery statute provides, in relevant part:


A person is guilty of bribery if he directly or indirectly offers, confers or agrees to confer upon another, or solicits, accepts or agrees to accept from another:




a. Any benefit as consideration for a decision, opinion, recommendation, vote or exercise of discretion of a public servant, party official or voter on any public issue or in any public election; or




. . . .




c. Any benefit as consideration for a violation of an official duty of a public servant or party official; or




d. Any benefit as consideration for the performance of official duties.




For the purposes of this section “benefit as consideration” shall be deemed to mean any benefit not authorized by law.


. . . .




Any offense proscribed by this section is a crime of the second degree. If the benefit offered, conferred, agreed to be conferred, solicited, accepted or agreed to be accepted is of the value of $200.00 or less, any offense proscribed by this section is a crime of the third degree.




[N.J.S.A.(emphasis added).] 2C:27-2




Under the official misconduct statute, the benefit may be either that which defendant sought to obtain for himself or that which he sought to obtain for another. N.J.S.A.Likewise, under the bribery statute, the benefit may be either that which defendant “solicits, accepts or agrees to accept” from another or that which he “offers, confers or agrees to confer” upon another. N.J.S.A.In this case, the “benefits” for each of the crimes are both the value of the positions defendant offered to secure for Rullo and the benefit defendant sought to secure for himself in winning the election unopposed. 2C:27-2a. 2C:30-2a.


The definitional section applicable to both statutes defines “benefit” to mean “gain or advantage, or anything regarded by the beneficiary as gain or advantage, including a pecuniary benefit . . . .” N.J.S.A.A “pecuniary benefit” means a “benefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain.” N.J.S.A.The benefit need not be pecuniary. State v. Phelps, 187 N.J. Super. 364, 375 (App. Div. 1983), aff’d, 96 N.J. 500 (1984). 2C:27-1f. 2C:27-1a.


In Phelps, we held that official misconduct is a crime of the second degree and that, rather than forming a substantive element of the offense, the above-emphasized language from N.J.S.A.“carves out an exception” where the benefit obtained or sought to be obtained is of a value of $200 or less. Id. at 373-74. We concluded that the Legislature intended for courts construing the official misconduct statute to “start from the premise that the offense is of the second degree.” Id. at 375. We held that the carved out exception “is clearly pecuniary in nature” and did not apply to “a benefit not subject to pecuniary measurement.” Ibid. The reasoning in Phelps, which dealt with the official misconduct statute, leads to the same conclusion with respect to the bribery statute. Applying this reasoning, we recently affirmed a conviction for second-degree official misconduct of a volunteer firefighter who repeatedly called in false fire alarms in order to experience the joy of responding to them and possibly to give the volunteer fire department enough work to justify its existence, holding that “[b]ecause there was no pecuniary benefit, the misconduct was second degree.” State v. Quezada, 402 N.J. Super. 277, 286 (App. Div. 2008). 2C:30-2


Relying on Phelps, the trial judge found that the State’s failure to produce “direct proofs[] as to the value of any benefit that was involved in this case” did not defeat the second degree gradation of the offenses because of the distinction between benefits that are pecuniary in nature and those that are not. With respect to the latter, the presumed second-degree grade applies. Alternatively, the judge found that, if it was necessary to place a pecuniary value on the benefits intended to be conferred on Rullo, he would find as a matter of fact that the value exceeded $200 and that “no reasonable mind to the contrary could maintain a credible . . . argument.”


We agree with the judge’s analysis. Both pecuniary and non-pecuniary benefits are involved in this case. Defendant sought to obtain for himself the benefit of winning an unopposed election. Because that benefit is not subject to pecuniary measurement, the State was not required to provide evidence as to any pecuniary value with respect to it. Defendant also offered Rullo municipal jobs, both of which had the “primary significance of . . . economic gain” for Rullo. See N.J.S.A.The benefits resulting from those jobs constituted pecuniary benefit to Rullo. The trial judge recognized that, although the State offered no direct evidence to prove their monetary worth, the jobs would obviously bring Rullo a benefit of more than $200 in wages. The record contains sufficient credible evidence to support this inferential finding. State v. Johnson, 42 N.J. 146, 162 (1964). The finding is similar to the observation we made in Phelps that, because of the scope of the gambling operation involved, even if the State had the burden of proving that the benefit was of a value of over $200, the jury “could hardly have found the value to be $200 or less . . . [because] the gambling operation was quite large . . . [and] [t]he value of the benefit that defendant conferred on the operations by his inaction in permitting the operation to continue surely exceeded $200.” Phelps, supra, 187 N.J. Super. at 376 n.5. 2C:27-1f.


Therefore, under either alternative, the judge correctly found defendant guilty of second-degree official misconduct and bribery.




We now address the sentencing issue raised by the State. The State argues that the trial court erred in imposing a sentence appropriate for a crime one degree lower than that of the second-degree crimes of which defendant was convicted. We agree with the State.


We first note the aspects of the sentence that are not in dispute. Second-degree crimes carry a presumption of imprisonment. N.J.S.A.The judge found that the presumption was not overcome, as a result of which the sentence must be one of imprisonment. Defendant does not dispute this. Although the State argued in the trial court against merger of the two bribery convictions, it does not raise that issue before us, and thus acquiesces in the merger. The State acknowledged in the trial court that concurrent sentencing on all of defendant’s convictions would be appropriate, and it does not now argue otherwise. Therefore, the only issue before us is whether the judge erred by imposing a three-year sentence, within the third-degree range of three to five years, see N.J.S.A.rather than within the five to ten year range provided for second-degree crimes, see N.J.S.A.To justify the three-year sentence, the judge invoked the authority of N.J.S.A.which provides: 2C:44-1f(2), 2C:43-6a(2). 2C:43-6a(3), 2C:44-1d.


In cases of convictions for crimes of the first or second degree where the court is clearly convinced that the mitigating factors substantially outweigh the aggravating factors and where the interest of justice demands, the court may sentence the defendant to a term appropriate to a crime of one degree lower than that of the crime for which he was convicted.




The judge recognized the two-step process required by the statute. The first required an analysis of aggravating and mitigating factors. He found two aggravating factors: (4) a lesser sentence will deprecate the seriousness of the offense because it involved a breach of the public trust under chapters 27 and 30; and (9) the need for deterrence. See N.J.S.A.and (9). The judge found the presence of the following mitigating factors: (1) defendant’s conduct neither caused nor threatened serious harm; (5) the victim (Rullo) of defendant’s conduct induced or facilitated its commission; (7) defendant has no prior criminal history; (8) defendant’s conduct was the result of circumstances unlikely to recur; and (9) the character and attitude of defendant indicate he is unlikely to commit another offense. See N.J.S.A.(5), (7), (8) and (9). The judge acknowledged that mitigating factor (5) was of dubious application because the true victim here is the public. The judge found that, even without mitigating factor (5), he was clearly convinced that, upon qualitative analysis, the mitigating factors substantially preponderated over the aggravating factors. Therefore, the first component of the two-step test prescribed by N.J.S.A.was satisfied. 2C:44-1f(2) 2C:44-1b(1), 2C:44-1a(4)


Based upon our review of the record, we are satisfied that the judge’s findings as to the presence of aggravating and mitigating factors and the weight to be attributed to each of them (except as to mitigating factor (5)), are supported by substantial credible evidence in the record. Likewise, the judge’s finding of a substantial preponderance of the mitigating over the aggravating factors is amply supported by the record. As to the second component of the two-part test, that “the interest of justice demands” sentencing one degree lower, the judge found:


He’s obviously led an exemplary public life, excluding, of course, these salient events. He’s given the public — it’s so obvious, he’s given the public far more than he took. . . . [H]is private life has been equally one of charity and warmth towards his family. But not only his family . . . but also to others who perhaps, as I’ve read, are persons who he didn’t even know or didn’t know well. He served in public office with — again, excluding these events — with distinction.




The whole person concept, which is one that we’re invited to look at, does cry out for a third degree range.




The evils that were afoot in this matter did not occur. And that’s something that — I know I stated that before, but citing it as a reason now to sentence in a one degree lower needs repeating. Mr. Rullo did not get a job. He did not withdraw. The forfeiture of office is a significant penalty in and of itself, which has deterrent effect as well. Seven years, as the State suggests, is simply over the top. I don’t know how else to say it. It’s just over the top for a first offender with these facts.




. . . It’s more than necessary. It’s more than the public demands. It’s permitted for the Court to make that adjustment. There is — there is a case, [State v. Evers, 175 N.J. 355 (2003)], which suggests — perhaps holds, but certainly suggests that the whole person concept, the things that I’ve mentioned and the exemplary life that he has led throughout his public and private are factors which the Court can consider, not in overcoming the presumption of incarceration but in sentencing one degree lower.




No citizen of Salem County is going to be shocked or have a shocked conscience. I’m not going to read this tomorrow morning in one of our newspapers and say, look at this, what happened, three years, is that all? . . . .




There will be an abundance of deterrence that goes forward. Discretion in sentencing, when allowed by our law, ought to be exercised where appropriate, and this is one of those cases where I feel it is appropriate.




Accordingly, I would sentence Mr. Lake to three years New Jersey State Prison on the official misconduct; three years concurrent on the merged bribery charges.




In the seminal case interpreting the term “interest of justice” in N.J.S.A.our Supreme Court cautioned that a downgrade decision under this provision should be limited to cases in which a defendant can provide “compelling reasons” for the downgrade. State v. Megargel, 143 N.J. 484, 501-02 (1996). The reasons supporting the interest of justice prong must be “in addition to, and separate from” the mitigating factors which substantially outweigh the aggravating factors and thus satisfy the first prong. Id. at 502. 2C:44-1f(2),


Although the surrounding circumstances and the need for deterrence may be taken into account, the severity of the crime remains the single most important factor in considering whether the interest of justice demands a downgrade. Id. at 500 (citing State v. Hodge, 95 N.J. 369, 379 (1984)). Recognizing that the principles underlying the Criminal Code favor deterrence and protection of the public over rehabilitation and are designed to foster uniformity in sentencing, the Court emphasized that “[t]he focus on the offense rather than the offender is inexorable in formulating a sentence.” Ibid.


The Court held that, in evaluating the severity of the crime, trial courts must consider the nature of the circumstances pertaining to the offense. Ibid. If the surrounding circumstances of an offense make it very similar to a lower degree offense, a downgraded sentence may be appropriate. Ibid. The Court cited the following illustrative examples:


For example, a defendant who simulates having a gun by placing his hand in his pocket can be convicted of first-degree robbery. Such a crime, however, is very similar to second-degree robbery.




Although the degree of the crime is the focus of the sentence, facts personal to the defendant may be considered in the sentencing process. Courts should consider a defendant’s role in the incident to determine the need to deter him from further crimes and the corresponding need to protect the public from him. Was the defendant the mastermind, a loyal follower, an accomplice whose shared intent is problematic, or an individual who is mentally incapable of forming the necessary criminal intent?




[Id. at 500-01 (citations omitted).]




Thus, the Court made it clear that, because the focus remains on the offense and not the offender, the surrounding circumstances used as compelling reasons for a downgrade should arise from within the context of the offense itself. Ibid. The Court instructed trial courts to “state why sentencing the defendant to the lowest range of sentencing for the particular offense for which he was convicted, is not a more appropriate sentence than a downgraded sentence under section 44-1f(2).” Id. at 502.


The Court also held that the “interest of justice” standard of N.J.S.A.is not the same as the “serious injustice” standard for overcoming the presumption of imprisonment applicable to first and second-degree convictions under N.J.S.A.Id. at 499. The statutory presumption of imprisonment provides: 2C:44-1d. 2C:44-1f(2)


The court shall deal with a person who has been convicted of a crime of the first or second degree . . . by imposing a sentence of imprisonment unless, having regard to the character and condition of the defendant, it is of the opinion that his imprisonment would be a serious injustice which overrides the need to deter such conduct by others.




[N.J.S.A.(emphasis added).] 2C:44-1d




In Megargel, the Court recognized that the two statutes address “qualitatively different situations,” with N.J.S.A.being geared toward the initial determination of whether a defendant will be “in or out” of prison rather than the length of term scenario confronted by the downgrade provision of N.J.S.A.Supra, 143 N.J. at 499. Thus, the Court held that the compelling reasons required to satisfy the interest of justice for a downgrade under N.J.S.A.present a “somewhat lower standard” than the “truly extraordinary and unanticipated circumstances” required before a “serious injustice” may be found under N.J.S.A.Id. at 501-02. 2C:44-1d. 2C:44-1f(2) 2C:44-1f(2). 2C:44-1d


In Evers, the Court stated that “[i]n permitting consideration of ‘the character and condition of the defendant’ in determining whether imprisonment would be a ‘serious injustice,’ [N.J.S.A. 2C:44-1d] left ‘a residuum of power in the sentencing court not to imprison in those few cases where it would be entirely inappropriate to do so.'” Evers, supra, 175 N.J. at 389 (quoting State v. Roth, 95 N.J. 334, 358 (1984)). Yet, in Evers, the Court considered only the serious injustice standard of N.J.S.A.and was not confronted with a downgrade issue under N.J.S.A.Id. at 397. In Megargel, before offering guidance on what types of circumstances justify a downgrade in the interest of justice, the Court specifically noted that N.J.S.A.contains “no reference to the defendant’s character or condition.” Supra, 143 N.J. at 499. 2C:44-1f(2) 2C:44-1f(2). 2C:44-1d


Our reading of these cases leads us to conclude that circumstances such as a defendant’s overall character or contributions to the community should not be considered under the interest of justice prong in the determination of whether or not to downgrade a sentence pursuant to N.J.S.A.This is an offense-oriented provision. Characteristics or behavior of the offender are applicable only as they relate to the offense itself and give fuller context to the offense circumstances. See, e.g., State v. Read, 397 N.J. Super. 598, 613-14 (App. Div.) (holding that a downgrade for a juvenile who pled guilty to first-degree robbery was not warranted because, although the defendant acted as the look-out while his confederate committed the robbery, “we see no basis for characterizing defendant’s role as only secondary . . . . [and no] evidence of the kind of psychological impairment that would be relevant to this determination”), certif. denied, 196 N.J. 85 (2008). 2C:44-1f(2).


Applying these principles, we agree with the State that the trial judge did not correctly apply the interest of justice prong of the downgrade provision as interpreted by Megargel. One aspect of the judge’s error was in relying on Evers to evaluate “the whole person.” In Evers, “the propriety of downgrading the child pornography distribution charge from a second-degree to a third-degree offense for the purpose of sentencing [was] not raised in [the] appeal.” Supra, 175 N.J. at 397. Evers dealt with the “serious injustice” standard for overcoming the presumption of imprisonment, which includes the statutory criteria of giving “regard to the character and condition of the defendant.” See N.J.S.A.Both in Evers and Megargel, the Court made clear that these are two different tests for two different purposes and, because of the differing statutory language and differing purposes, the tests are not the same. Consideration of the whole person is appropriate as part of the evaluation of the “character and condition of the defendant” for purposes of determining whether the presumption of imprisonment has been overcome. However, it is not appropriate in the “interest of justice” analysis of the downgrade provision. Thus, the judge erred in considering defendant’s many years of public service, his first offender status, his acts of kindness over the years to his family and members of the public, and the like. While appropriate for consideration as mitigating factors, and therefore applicable to the first prong, they have no application to the second prong. In essence, much of the judge’s rationale supporting the second prong was a restatement of the reasons underlying the various mitigating factors. This is contrary to Megargel‘s directive that the basis for the second prong must be separate and distinct from the mitigating factors. 2C:44-1d.


The judge’s only finding under the interest of justice prong dealing with the offense itself was that “[t]he evils that were afoot in this matter did not occur.” This fact supported the judge’s finding of mitigating factor (1), that defendant’s conduct did not cause or threaten serious harm. Aside from not being separate and distinct from the facts underlying the mitigating factors, we fail to see how it is relevant that defendant failed in his attempt to subvert the election process through official misconduct and bribery. He did not “see the light” and call off the arrangement. His plan was thwarted only because the person with whom he thought he had a deal was never complicit in the arrangement and refused to go through with it. This “fact” was not properly considered in minimizing the seriousness of defendant’s crimes.


We also find no significance in the fact that defendant was required to forfeit his public office and be forever barred from holding public office. This is a statutory consequence of his criminal conduct that was imposed upon him. Besides not being related to the offense, it was not something of his doing that should reduce the penal consequences of his criminal conduct.


An analysis of the offense circumstances at once makes clear that this is not one of those rare cases that satisfies the interest of justice standard for a downgrade. Defendant’s conduct spanned several months. He was the sole and direct architect of the scheme. It could not be said that this was an isolated act of aberrant behavior in which an otherwise law-abiding person exercised poor judgment on one occasion. Defendant persisted in his conduct, geared to stealing the election and subverting the electoral process that is at the foundation of our democracy. He met repeatedly with Rullo, attempting to persuade him to participate in the scheme, and offering him public employment, for which he may not have even been qualified, at public expense, as the quid pro quo for allowing defendant to run unopposed for public office. Defendant’s conduct was deliberate, persistent over several months, and flagrant. His conduct presented no compelling circumstances to remove it from the heartland of offenses of this type, to place it in a less egregious light, and to warrant a downgraded sentence.


We therefore reverse the sentence of three years imprisonment for second-degree official misconduct and the merged second-degree bribery offenses. Ordinarily, we would remand for resentencing in the second-degree range. However, as in Megargel, the sentencing judge is no longer on the bench. See Megargel, supra, 143 N.J. at 506. As we have stated, we are satisfied from our review of the record that the judge’s finding that the mitigating factors substantially predominate over the aggravating factors is well-founded. Accordingly, as did the Court in Megargel, see ibid., we deem this an appropriate circumstance in which to exercise original jurisdiction. See R. 2:10-5. Based upon the substantial preponderance of mitigating factors, we sentence defendant at the bottom of the second-degree range to five years imprisonment for official misconduct and to a concurrent term of five years imprisonment for the merged bribery convictions. The trial court shall enter an amended judgment of conviction to that effect.


0x08 graphic
Reversed on the State’s appeal; affirmed on defendant’s cross-appeal. The stay of sentence is vacated.


The State makes a further argument that we should consider the Court’s admonition in Megargel that courts exercise special caution before downgrading a sentence for an offense for which the Legislature has provided for enhanced punishment. See supra, 143 N.J. at 503-04. That was the case in Megargel, where the offense was first-degree kidnapping, which carried a sentence greater than first-degree crimes generally carry. Ibid. In this case, at the time defendant committed the offenses, no enhanced punishment was provided. However, effective April 14, 2007, legislation was enacted providing for a minimum mandatory term of five years imprisonment without parole for certain second-degree offenses, including bribery and official misconduct. See N.J.S.A.L. 2007, c. 49, � 6. We decline to consider this argument, as it may have ex post facto implications. 2C:43-6.5,










































   July 27, 2009 








July 27, 2009

Operation Bid Rig Part 3 – update July 23, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , ,

Quick update on that massive corruption case that went down today, which we now know is the third phase of Operation Bid Rig.  All of the names have been released.  They are, according to the press release:

  • Leona Beldini, deputy mayor of Jersey City and a realtor. Beldini planned to become broker for his purported 750-unit condominium project on Garfield Avenue, where units would sell for $500,000 each. Beldini, who was treasurer of a Jersey City official’s re-election campaign (that official is identified only as Jersey City Official 4 in the Complaints), also accepted $20,000 in campaign donations, which she said would be divided between “donors” who would return the money to the campaign in increments of $2,600, the maximum individual donation allowed under law.
  • Jack M. Shaw, a Hudson County political consultant. As described in the Complaint, he took $10,000 from the cooperating witness for himself and proposed that the cooperating witness pay $10,000 in campaign contributions for the re-election campaign of Jersey City Official 4.
  • Edward Cheatam, the affirmative action officer for Hudson County, a commissioner with the Jersey City Housing Authority and, until May, vice president of the Jersey City Board of Education. Cheatam took $15,000 in cash bribes. (Khalil had introduced Cheatam to the cooperating witness; Cheatam then introduced Beldini and Shaw to the cooperating witness, all of whom then went on to extend introductions of the cooperating witness to many others.)
  • Mariano Vega, Jr., the Jersey City council president. He met several times with the cooperating witness and ultimately accepted three $10,000 payments, two of which Vega instructed an intermediary to have broken down and converted into individual contributions for his re-election campaign and the third which he received after his election victory.
  • Louis Manzo, a defeated candidate for Jersey City mayor, and his brother and political advisor, Ronald. Together, they accepted $27,500 in three cash payments intended for Louis Manzo’s campaign. The cooperating witness was told that giving money to Louis Manzo was “insurance” to secure his influence for the cooperating witness in the event the incumbent for mayor lost.
  • Lavern Webb-Washington, an unsuccessful candidate for the Jersey City council and a self-described housing activist. She accepted $15,000 in three cash installments of $5,000 for her political campaign.
  • Lori Serrano, an unsuccessful candidate for the Jersey City council and former chair of the Jersey City Housing Authority. Serrano accepted $10,000 in two cash payments of $5,000 for her political campaign.
  • James P. King, an unsuccessful candidate for Jersey City Council, former head of the Jersey City Parking Authority, former chairman of the Jersey City Incinerator Authority and a former Hudson County undersheriff. He accepted two payments of $5,000 each for his political campaign.
  • Michael J. Manzo (no relation to the other Manzos), an unsuccessful candidate for Jersey City Council, and a Jersey City arson investigator. He agreed to accept a $5,000 cash payment from the cooperating witness for his campaign.
  • Joseph Castagna, a health officer with the Jersey City Department of Health and Human Services, and a close associate of Michael Manzo. Castagna took the $5,000 payment from the cooperating witness to pass to Michael Manzo.
  • Dennis Jaslow, an investigator for the Hudson County Board of Elections and formerly a state corrections officer. Jaslow accepted $2,500, but complained that he wanted $5,000.
  • Joseph Cardwell, a political consultant and a commissioner of the Jersey City Municipal Utilities Authority. He accepted two payments of $10,000 in cash to assist the cooperating witness with local government officials in Jersey City and other municipalities, and another $10,000, most of which was used for the purchase of fundraising event tickets.
  • Guy Catrillo, a Jersey City planning aide and member of the mayor’s “Action Bureau,” and an unsuccessful candidate for the city council. Catrillo took $10,000 in campaign cash and another $5,000.
  • L. Harvey Smith, state Assemblyman, a Jersey City mayoral candidate and former three-term councilman in Jersey City and a Hudson County undersheriff. Smith took two cash payments, one for $5,000, the other for $10,000, in exchange for approaching high-level contacts with the state Department of Transportation and Department of Environmental Protection to clear the way for approvals of the cooperating witness’s project on Garfield Avenue in Jersey City and another project off Route 440 in Bayonne. Smith’s aide, Richard Greene, is charged in the same criminal Complaint, and is accused of taking the $5,000 payment from the cooperating witness and passing it to Smith.
  • Peter Cammarano III, previously a Hoboken councilman and now mayor, and a lawyer specializing in election law. While a candidate for mayor, then-councilman Cammarano and his close associate, Michael Schaffer, a commissioner on the North Hudson Utilities Authority, took three payments of $5,000 each with the promise that, in return, Cammarano would sponsor zoning changes and push through building plans for high-rise development in Hoboken by the cooperating witness. After the conclusion of their first meeting at a Hoboken diner, the cooperating witness stated, “Make sure you get my stuff expedited.” To which Cammarano replied: “I promise you … you’re gonna be treated like a friend.” Moments later, in the parking lot, Schaffer took the first $5,000 in cash. On July 16, Cammarano and Schaffer met the cooperating witness again at a Hoboken diner and accepted another $10,000, which Cammarano said was needed to pay campaign debts, bringing the total in bribes accepted by Cammarano and Schaffer to $25,000.
  • Dennis Elwell, mayor of Secaucus, and Ronald Manzo (Manzo is charged in this Complaint in addition to the one with his brother Louis). Elwell received a $10,000 cash bribe—through Manzo as the middleman—to assist the cooperating witness with plans to build a hotel in Secaucus. Manzo took $5,000 from the cooperating witness as a reward for bringing Elwell to him.
  • Anthony Suarez, mayor of Ridgefield Borough and an attorney, and co-defendant Vincent Tabbachino, owner of a tax preparation business in Guttenberg. Suarez accepted $10,000 from the cooperating witness through Tabbachino as a middleman, for Suarez’s promised assistance in getting approvals to develop properties in Ridgefield. Tabbachino said he kept the cash and, in turn, would write checks totaling $10,000 (one check for $2,500 was cashed) to a legal defense fund for Suarez related to an allegation made by a political opponent of Suarez. Tabbachino also laundered $100,000 in cash from the cooperating witness’s purported knock-off handbag business.
  • Daniel M. Van Pelt, state Assemblyman and administrator for Lumberton Township. Van Pelt accepted $10,000 from the cooperating witness for his influence as a state Assemblyman to help in getting the necessary permits for a purported project the cooperating witness was planning in Waretown, Ocean Township. Van Pelt particularly offered his influence in obtaining the necessary permits from the state Department of Environmental Protection.
  • Jeffrey Williamson, a Lakewood housing inspector, who was also a state Assembly candidate in 2007. He accepted a total of more than $16,000 in bribes in regular payments of $1,000 between about May 2007 and the last one on July 10, to provide lenient inspections on rental and other properties owned by the cooperating witness in Lakewood. Williamson also allowed the cooperating witness to illegally use a residence in Lakewood as a commercial office. Charles “Shaul” Amon aided in the Lakewood payoff scheme by introducing Williamson to the cooperating witness.
  • Charles “Shaul” Amon, previously worked for the cooperating witness managing properties in Lakewood. Amon aided in the Lakewood payoff scheme by introducing Williamson to the cooperating witness. Amon described how he had previously made payoffs to Williamson to go light on housing inspections.

The Money Laundering Defendants

Following are the individuals charged in the money laundering investigation and summaries of their alleged conduct as described in the criminal Complaints (All defendants are presumed innocent unless proven guilty beyond a reasonable doubt):

  • Saul Kassin, the chief rabbi of Sharee Zion in Brooklyn, who laundered more than $200,000 with the cooperating witness between June 2007 and December 2008 by accepting “dirty” bank checks from the cooperating witness and exchanging them for clean checks from Kassin’s charitable organization, after taking a fee of 10 percent for each transaction.
  • Edmund Nahum, principal rabbi at Deal Synagogue in Deal, N.J., who laundered money both acting alone and with Kassin. Nahum laundered $185,000 between June 2007 and December 2008 by accepting dirty checks from the cooperating witness and exchanging them for clean checks from his own and Kassin’s charitable organizations, after taking a fee of 10 percent for each transaction. Both Kassin and Nahum also laundered money to create fictitious tax deductions by accepting checks made payable to their charitable organizations, which created the appearance of charitable donations. They then deducted their 10 percent fee for laundering the checks through their charitable organization accounts and returned to the originators checks drawn on one of their accounts for 90 percent of the value of the original checks. These return checks would be payable to a name designated by the originators.
  • Eli Ben Haim, principal rabbi of Congregation Ohel Yaacob in Deal, N.J., laundered $1.5 million with the cooperating witness between June 2007 and February 2009 by accepting dirty checks from the cooperating witness and exchanging them for cash, after taking a fee of approximately 10 percent for each transaction. His source for the cash was an Israeli who, for a fee of 1.5 percent, supplied the cash through intermediary cash houses run by defendants Weiss, Ehrental, and Cohen, who are described below. Ben Haim remarked that at one time he had laundered between $7 million and $8 million in one year, and earned $1 million laundering money in that year.

Cash House Operators for Haim Transactions:

  • Arye Weiss—operated cash house from his residence in Brooklyn for Haim money laundering transactions; charged with supplying $300,000 in cash.
  • Yeshayahu Ehrental—operated cash house from his office in Brooklyn for Haim money laundering transactions; charged with supplying $300,000 in cash.
  • Schmulik Cohen—operated cash house from his residence in Brooklyn for Haim money laundering transactions; charged with supplying $850,000 in cash.
  • Mordchai Fish—Rabbi of Congregation Sheves Achim in Brooklyn. Working with his brother Lavel Schwartz, also a rabbi in Brooklyn, Fish laundered approximately $585,000 with the cooperating witness by accepting dirty checks and exchanging them for cash, after taking a fee of 15 percent for each transaction. His source for the cash for some of the transactions was Levi Deutsch, who supplied the cash through an intermediary cash house run by Spira; for other transactions his source for the cash is unidentified but the cash was provided by cash couriers Gertner and Goldhirsh and cash houses run by Pollack and Weber. On two occasions over the course of his dealings with the Cooperating witness, Fish gave the Cooperating witness new chips for his cell phone to thwart any law enforcement attempt to wiretap their telephone calls.
  • Levi Deutsch—Israeli source/supplier of cash for a number of Fish money laundering transactions. For a fee of two or three percent, he supplied cash for the transactions through intermediary Spira’s cash house and is charged with supplying $200,000 in cash

Cash House Operators and Cash Couriers for Fish Transactions:

  • Binyomin Spira—operated a cash house from a bakery in Brooklyn in which he received cash from Levi Deutsch and supplied cash for Fish money laundering transactions, charged with supplying $200,000 in cash
  • Yolie Gertner—acted as a cash courier for Fish money laundering transactions, charged with moving $185,000 in cash
  • David Goldhirsh—acted as a cash courier for Fish money laundering transactions, charged with moving $100,000 in cash
  • Abe Pollack—operated cash house from his office in Brooklyn (which he shared with Naftoly Weber) for Fish money laundering transactions, charged with supplying $125,000 in cash
  • Naftoly Weber—operated cash house from his office in Brooklyn (which he shared with Abe Pollack) for Fish money laundering transactions, charged with supplying $125,000 in cash.

Indictment for $1.7 million in securities fraud illustrates an important first step for attorneys July 22, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , , , , , ,
add a comment

I often say that, in the context of white collar crime, the difference between a criminal case and a civil case is thin, usually blurry line.  One of the key factors that pushes a case over to the criminal side of the line is personal use of money.  In other words, if the money at issue was used solely for business purposes, it will likely be a civil case.  Likewise, as soon as you use the same money to enrich yourself, you will be looking at criminal charges.

Thus, the first thing I do in any case that could turn into a white collar crime case is to get my client’s financial records to assess their criminal exposure.  The attorney’s actions at the first sign of trouble could impact the entire case.  If this is a civil case but the State thinks otherwise, you may have to play this card now.  If there is some serious criminal exposure, trying to get a favorable resolution early on may we worth considering.

A good example of a white collar crime case where the defendant’s personal expenses will be at the heart of the State’s case is found in the press release below:

TRENTON – Attorney General Anne Milgram announced that a Bergen County man was charged today with defrauding hundreds of investors of more than $1.7 million by selling unregistered shares of stock in his startup horseshoe manufacturing company, which he claimed already had a prince from Dubai as a client.

The man allegedly stole more than $350,000 in investor funds to pay for personal expenses. Although he also spent funds in an effort to launch the company, the venture failed.

According to Director Deborah L. Gramiccioni, the Division of Criminal Justice filed a criminal complaint today in Superior Court in Bergen County charging Samuel M. Serritella, 64, of Garfield, with the crimes of securities fraud, theft by deception, misapplication of entrusted property, money laundering and misconduct by a corporate official, all in the second degree.

The charges resulted from an investigation by the New Jersey Bureau of Securities. Also today, Bureau of Securities Chief Marc B. Minor issued an order assessing a penalty of $20,000 against Serritella for violation of the New Jersey Uniform Securities Law. The Bureau Chief found that Serritella committed securities fraud and sold unregistered securities as an unregistered agent.

“This defendant sold $1.7 million in fraudulent and unregistered securities to trusting investors,” said Attorney General Milgram. “He repaid their trust by stealing hundreds of thousands of dollars of their money and leaving them with worthless shares in a failed company.”

Serritella was president, chief financial officer and chairman of International Surfacing Inc., which was based at 5 Erie Street in Garfield. It is charged that between February 2004 and May 2006, Serritella fraudulently obtained in excess of $1.7 million from more than 300 investors, most of whom were New Jersey residents, by selling them shares of International Surfacing. The shares were not registered with the Bureau of Securities as required by law, and Serritella was not registered as an agent authorized to sell securities in New Jersey.

Serritella held investment conferences where he told investors they could get in on the ground floor by purchasing shares in a company he planned to take public. He allegedly told at least one group of investors during a hotel meeting that the venture’s clients included a prince in Dubai.

Serritella allegedly deposited the investors’ funds into several bank accounts that he controlled. He allegedly misappropriated funds totaling approximately $354,720 for personal expenses. Seritella allegedly wrote checks to himself, made cash withdrawals at ATMs, paid credit card bills, and made debit card purchases using investor funds in the accounts. He used the funds to pay for such personal expenses as airline and hotel bills, tavern bills, and medical costs. He also allegedly used investor funds to make personal loans to three friends totaling $84,000.

Serittella used some funds for startup costs for the company, such as rent for a building, salaries, and payments to a company contracted to assist in manufacturing horseshoes.

“The Division of Criminal Justice is focusing on more complex white collar crime cases, including securities fraud cases such as this one,” said Director Gramiccioni. “In prosecuting this case, we are working closely with the Bureau of Securities, which thoroughly investigated the alleged fraud and thefts committed by Serritella.”

“Investors need to protect themselves by remembering that an offer which seems too good to be true is often precisely that – untrue. Investment fraud is on the rise in these difficult economic times and investments that promise ‘guaranteed results’ or offer unusually high profits should be carefully scrutinized before any investment is made,” Bureau Chief Minor said.

The Bureau of Securities investigation was conducted by Acting Chief of Investigations Rudolph Bassman. Deputy Attorney General Victoria Manning represented the Bureau in its investigation.

Serritella has been ordered to appear before Superior Court Judge Harry G. Carroll in Bergen County on Wednesday, July 29 at 10 a.m.

Should you put your client on the stand? July 19, 2009

Posted by tsclaw2209 in My Cases.
Tags: , , , ,
add a comment

I hear too many attorneys say that they will never put their client on the stand to testify.  As the old saying goes, never say never.  In this article, I will discuss the reasons why some attorneys have this fear, why you should consider putting the client on and then break down the analysis that you should undertake when making this crucial decision.

Why are some attorneys so afraid?

In my opinion, many attorneys have a defeatist attitude when it comes to trial.  This is probably due, in large part, to the attorney’s lack of confidence in their own skills.  Just watch some attorneys during trial when they go on and on about meaningless points that have nothing to do with the theme of the case.  Those attorneys clearly have no plan and thus, they probably fear just about every aspect of the trial as they have no control.

Think about it this way.  What are you more comfortable with:  something you are skilled at or something you have never done before?  Or how about something you are prepared for and something that you are surprised with?  If you have confidence in your trial skills and you are prepared, than you should be very comfortable during the trial. 

When you have comfort with your trial plan, you should be able to clearly analyze all strategic decisions that will come up during the trial including whether or not your client should testify.

Some attorneys are also afraid of a client’s  prior record.  Of course, if it is a mile long, then you will have some serious problems.  If it is one or two incidents, you should look into how you will deal with it especially if it is an old conviction.

Why should your client take the stand?

One of the primary reasons for putting your client on the stand is that the jury wants to hear from him.  I don’t care what the judge says about the right to remain silent.  The jury wants to hear from your client because they are thinking, if this was me, I would talk.  After all, what does he have to hide?

Another great reason is that the prosecutor will probably have little to no idea what your client will say.  Thus, it will be extremely difficult to cross examine on the fly as prosecutors are rarely great at cross.  If the prosecutor fails to call anyone to rebut a key point your client made, you have to tell the jury during summation that the prosecutor did not refute your client’s testimony. 

Your client also has an advantage that no other witness has.  He was there for all of the testimony.  Thus, his testimony can be “shaped” to respond to all other witnesses.  Of course, I do not advocate perjury, but creative use of adjectives is vital.

In some cases, especially white collar crime cases, your client may be the only person that can tie up the entire story.  Without him, you have no case.  Thus, taking the attitude that you should never put your client on the stand is just stupid thinking that can be malpractice in certain situations.

Should you put your client on the stand?

Everything you do at trial should have a purpose, and I do mean everything.  So, when deciding whether or not to put your client up there, you first have to answer the why question.  What is the purpose in having him testify?  Is it really necessary to the defense? 

Whether or not testimony will add anything to a defense depends largely on whether or not the jury has already hear your client’s version of the events.  While an exculpatory statement will rarely be presented to a jury, you may have a statement by your client that is not really harmful to the defense.  For example, if a self defense case, your client may detail the reasons that he stabbed the victim.  In that case, there may be little reason to subject your client to cross examination when there is little to  add.

On the other hand, if your client has not made a statement, the jury will probably need to hear your client’s version.  If your client made a damaging statement and you are still going to trial, your client must explain why he said what he said and what the real story is.

You also have to determine how your client will come across  to the jury.  Sometimes, this is a total crap shoot.  Quite often, your client will say something that comes out of nowhere or will act totally different than what you have seen in the past.  In other words, the way your client comes across in your office will be different than how he is when he is in the hot seat.  Thus, a margin of error has to be built into your analysis.

You must prepare your client so he knows the case and his testimony cold.  Only then will you really have a client for how your client will perform at trial.  In addition, its not just what you say but how you say it.  Thus, I try to stay away from a script and focus more on the general story with an extra focus on key topics.

Prepping your client for cross examination should be pretty easy to do.  Most prosecutors use the same lazy cross examination that consists mostly of yelling at the client.  You have to put on your prosecutor hat and look at every damaging piece of evidence or hole in the case.  Then, you have to discuss these issues with your client and get his side of the story.  Only then should you give further advice on how to handle those issues first talking in the general sense and then the specific sense. 

 Some of these issues can be dealt with on direct and the others should be left for cross.  If you deal with an issue on direct, the purpose is to take the “sting” out of it and explain it away.  However, you don’t want to make this obvious to the jury.  Try to work it into the story.  With everything else, wait for it.  Nothing takes the wind out of a prosecutor’s sails when they think they are about to land a knock out punch only to find out that they just stepped in it.

One such issue that should be dealt with on direct is a client’s prior record.  Again, I assume that it is not a mile long.  Most states limit how much the prosecutor can ask or else the prior record evidence becomes 404(b) evidence.  Thus, you should be able to keep the details vague.  But again, you should do everything you can to try to work this into the story.  Otherwise, it will be obvious that you are asking it for a reason. 

Due to the relationship you have with your client, it can be difficult to simulate a real cross examination experience if you also do the cross. Thus, get another attorney to do it for you.  Write out all of the questions for the attorney and have them lay it on thick.  Then, you can discuss the results with your client and make changes as necessary.

Once you complete this analysis, you will know why you are putting your client on, what they will say, how they will handle the Prosecutor’s cross and how they will come across in front of the jury.  When you are this prepared, you can then make an intelligent choice as to whether or not you should put your client on the stand.  Of course, I know this is the client’s decision, but let’s be honest, almost all of them will do whatever we tell them to do.

NJ continues crackdown on mortgage industry July 15, 2009

Posted by tsclaw2209 in News.
Tags: , , , , , , ,
1 comment so far

I’ve said it before and I’ll say it again: the mortgage industry is under assault here in New Jersey and anyone associated with it must be very careful.  The NJ AG announced today that her office has filed two more law suits against 10 defendants charging them with mortgage related fraud.

These defendants allegedly promised to help modify mortgages for people struggling to keep their homes. However, they allegedly pocketed the fees paid by homeowners instead of providing the assistance.

The first lawsuit was filed in Mercer County against Best Interest Rate Mortgage Company which is located in Haddon Township.  They allegedly solicited distressed homeowners in the mail, sending a form that appeared government authorized.

The second lawsuit was filed in Essex County against nine defendants, including Newark attorney Ejike Uzor and Stephen Pasch of Green Brook Township. Seven corporate and nonprofit entities, including New Day Financial Solutions in Newark were also charged.

The attorneys here face  a massive risk here as their ability to practice  law is in jeaporday.  If this case is going to settle, and most of them do, they should settle before the discovery gets too far.  Otherwise, they are going to get locked into a statement which could be used against them in the future.

Story is here.