NY Lawyer Denied Attempt to Withdraw His Guilty Plea

Lawyer Loses His Bid to Withdraw His Guilty Plea to Wage Scam
The New York Law Journal by Mark Fass - August 26, 2009

A Brooklyn attorney has failed in his bid to withdraw his guilty plea to several felony charges related to a massive fraud scheme. The case stemmed from defendant Steven Coren's representation of contractors on public housing and infrastructure projects. Such contractors are required under the federal Davis-Bacon Act, as well as a similar state law, to pay laborers a "prevailing wage" of base pay and fringe benefits set by the U.S. Department of Labor. In March, Mr. Coren, of Coren & Associates in Manhattan, pleaded guilty to defrauding the government of millions of dollars earmarked for such employee-benefit contributions. In July, he moved to withdraw his plea, asserting several grounds for his motion, including that federal prosecutors had failed to state any cognizable offense. Specifically, Mr. Coren argued that because the agencies charged with enforcing the relevant laws had no property right in the money he allegedly misappropriated, the only harm they suffered was a diminishment of their "ability to monitor and regulate compliance with prevailing wage laws." Therefore, Mr. Coren contended, federal prosecutors could not establish the second element of mail or wire fraud—that the scheme involves "money or property." In a strongly worded, densely cited, 17-page decision, Eastern District Judge Eric N. Vitaliano rejected Mr. Coren's arguments. "This Court strongly disagrees," he wrote in United States v. Coren, 07-CR-265. "Having work on government owned projects actually done by prevailing wage workers is a fundamental part of the contract that the victim agencies bargained for and expected to receive." Mr. Coren was indicted in April 2007, following a five-year investigation. In March 2009, three days into his trial, he pleaded guilty to the entire 16-count indictment.

Mr. Coren admitted to setting up a trust to which he instructed clients to deposit funds earmarked for legally required benefits, thereby making it appear as if they complied with the Davis-Bacon Act and state labor laws. He then advised his clients that they could use the funds for other purposes, and skimmed a portion for himself. About one month before his August sentencing date, Mr. Coren sought to overturn his plea. "[A]t the heart of this claim is the contention that the federal government is improperly using the mail and wire fraud statutes to enforce state and federal labor laws," Mr. Coren's attorney, Vivian Shevitz, wrote in a letter to Judge Vitaliano last month. "What may be, at worst, misdemeanors under state law are being turned into federal crimes carrying twenty-year sentences without anyone having asked the Court to stop and consider whether the conduct being punished—that is, advice regarding prevailing wage laws—actually falls within the reach of the federal mail and wire fraud statutes." The judge ruled that the crimes do in fact fall within the statutes and threw out the motion. "Although Coren asserts that contract rights do not constitute property rights, his contention is at odds with case law," the judge wrote. "Indeed, Coren cites no case categorically holding that contract rights can never be 'property' within the meaning of the fraud statutes. In any event…Coren misses the simplicity of other agency property at issue here—namely, the actual funds that are owned and controlled by the victim agencies that were used in paying Coren's co-conspirators to improve and build on premises owned by the agencies." Sarah Mary Coyne served as lead attorney for the U.S. Attorney's Office for the Eastern District. On appeal, Mr. Coren was represented by Ms. Shevitz of South Salem. She did not return a call for comment. Mr. Coren faces a potential sentence of some 14 to 18 years. His sentencing, originally scheduled for this month, has not yet been rescheduled. Mark.Fass@incisivemedia.com