Veterans of Bench Apply To Replace Kaye as Chief

Veterans of Bench Apply To Replace Kaye as Chief
The New York Law Journal by Joel Stashenko - September 15, 2008

ALBANY - At least five bench veterans are seeking to succeed Judith S. Kaye as New York's top judge. Judges Carmen Beauchamp Ciparick and Eugene F. Pigott Jr. of the Court of Appeals have confirmed that they have asked the state Commission on Judicial Nomination to be considered to replace Chief Judge Kaye when she is forced to step down by mandatory retirement rules on Dec. 31. Presiding Justice Jonathan Lippman, of the Appellate Division, First Department (See Profile); Justice Steven W. Fisher of the Second Department (See Profile); and Supreme Court Justice Fern A. Fisher, the administrative judge of the New York City Civil Court (See Profile), all said they also have applied for the chief judgeship. A third Court of Appeals judge, Theodore T. Jones Jr., was known to be interested in the chief judge's post and was widely expected to apply. Judge Jones, thought by court observers to be among the strongest candidates for the job, did not return repeated calls last week seeking confirmation that he is a candidate. The deadline for applying for the post was Sept. 8.


Judicial Nomination Commission Members
John F. O'Mara, chairman, Davidson & O'Mara, Elmira
Edward F. Cox, Patterson Belknap Webb & Tyler
Michael C. Finnegan, J.P. Morgan Securities
Gerald B. Lefcourt, Gerald B. Lefcourt P.C.
Alan Mansfield, Greenberg Traurig
E. Leo Milonas, Pillsbury Winthrop
Margaret S. Morton, NYC Department of Cultural Affairs
David M. Schwartz, Ruskin Moscouo Faltischek, Uniondale


Non-Attorneys
Ruth Friendly
Janet M. Kassar
Elena H. Kiam
Richard P. Nathan

The commission will evaluate and schedule interviews for the leading candidates, said Stephen P. Younger of Patterson Belknap Webb & Tyler. Mr. Younger is counsel to the commission.

By law, the commission must submit the names of seven candidates to Governor David A. Paterson on Dec. 1, and the governor must nominate a new chief judge between Jan. 1 and Jan. 15, 2009, subject to confirmation by the state Senate. While the commission can submit between three and seven names to a governor when an associate judgeship is being filled on the Court of Appeals, it must submit the maximum number of choices when the chief judge's post is open. Members of the commission and its staffers are prohibited by law from publicly discussing the application and selection process, including who applied or how many people are seeking consideration. Though the governor may select a non-judge to the Court of Appeals - Chief Judge Kaye had no judicial experience when she was named an associate judge in 1983 by then-Governor Mario Cuomo - speculation among court observers about the strongest candidates for the chief judgeship has focused on sitting judges with administrative experience.

The chief judge is both the leader of the Court of Appeals and of the Unified Court System. Judge Jones, 64, was administrative judge for Brooklyn Supreme Court from January 2006 to January 2007, when he was named by then-Governor Eliot Spitzer to the Court of Appeals. There has been considerable speculation that Mr. Paterson, who is black, might want to pick a chief who is a member of a minority group. Judge Jones is also black.

Judge Ciparick, 66, the only Hispanic on the Court of Appeals, will be the longest-tenured member once Chief Judge Kaye retires. Judge Ciparick was initially selected to the Court by Mr. Cuomo in 1993 and reappointed by Mr. Spitzer to a second term last year. Judge Pigott, 61, was presiding justice of the Appellate Division, Fourth Department, between 2000 and 2006, when he was named to the Court of Appeals by then-Governor George E. Pataki. Justice Lippman, 63, was chief administrative judge under Chief Judge Kaye from 1996 to 2007, when he was appointed as presiding justice of the First Department Mr. Spitzer. Justice Steven Fisher, 62, spent six years as administrative judge of the Queens Supreme Court before being named to the Second Department bench in 2004 by Mr. Pataki. Justice Fern Fisher, 54, a Supreme Court justice since 1993, was named Civil Court administrator in 1997.

All of the chief judges named since 1977, when the appointive system for judges was adopted - Lawrence Cooke, Sol Wachtler and Chief Judge Kaye - already were on the Court at the time of their elevation to the center seat. In fact, even when chief judges were elected by voters, Edgar M. Cullen was the last chief judge not to have already been on the Court when he took the job in 1904. A number of non-judges who have applied to the Commission on Judicial Nomination candidate lists for recent openings on the Court of Appeals said the dual demands of the chief judge's job - top judge and top administrator - had kept them from applying for the slot. "I know that looking at Chief Judge Kaye's schedule, I would suspect she is spending at least one half of her time on administration," said Michael J. Hutter of Powers & Santola in Albany. "With the administrative stuff, you've got to like it, and if you don't, forget it. And that's even with a chief administrative judge to help out." Mr. Hutter, who is white, also speculated that Mr. Paterson would lean toward picking a minority as chief, giving the inside track to Judges Ciparick or Jones. "With Jones and Ciparick applying, it's got to go in-house and it appears to be a minority position," Mr. Hutter said in an interview.

Another candidate for past openings on the Court said many non-judges are thinking Mr. Hutter's way, that Mr. Paterson may well tap Judges Ciparick or Jones for the chief's position. That, in turn, would create an opening for an associate judge on the bench that practitioners may have a better shot at than chief judge. "I know a lot of people who are waiting for that associate's slot," said the attorney, who asked not to be identified. Of the judge candidates, only Justice Fern Fisher would be able to serve a full 14-year term if appointed as chief.

Both Judges Ciparick and Jones would be unable to serve full 14-year terms as chief. Like Chief Judge Kaye, they will be required to retire at the end of the year in which they turn 70. Luke Bierman, 51, an instructor at Albany Law School who is general counsel to state Comptroller Thomas P. DiNapoli, said he had applied for the chief judgeship. But several prominent attorneys said they decided not to apply, including Stephen C. Krane of Proskauer Rose, Jeh C. Johnson of Paul, Weiss, Rifkind, Wharton & Garrison, Jeremy G. Epstein of Shearman & Sterling, and Zachary W. Carter of Dorsey & Whitney.

Mr. Johnson said his role as a senior policy adviser to Democratic presidential candidate Barack Obama would keep him on the sidelines. "I am too involved in the Obama campaign to be involved in a judgeship," he said. Mr. Krane cited unspecified personal reasons for not applying. "I'm going to sit this one out," he said. "It's not for a lack of interest in the position." Supreme Court Justice James A. Yates of Manhattan (See Profile), who agreed in March to become Mr. Paterson's counsel but changed his mind and stayed on the bench (NYLJ, April 24), also did not apply. Justice Yates, whose name has appeared three times on commission lists for openings on the Court, declined to say why he had not applied for the latest vacancy. Mr. Paterson has said nothing publicly about the chief judge's opening, his spokesman Errol Cockfield said Friday.

"The Judicial Nominating Commission is an independent body and the governor is awaiting recommendations from the panel before he names a replacement for the chief judge," Mr. Cockfield said. In the relatively few judicial appointments he has made since succeeding Mr. Spitzer in March, however, Mr. Paterson has indicated a sensitivity toward diversity. All three of his appointees to Appellate Division openings - Justices Helen E. Freedman, Leland G. DeGrasse and Dianne T. Renwick, all in the First Department - were minorities or women. As of Friday, none of the 12 members of the Commission on Judicial Nomination had been selected by Mr. Paterson, though Mr. Cockfield said the governor was on the "verge" of appointing his first member. The term of Michael C. Finnegan, Mr. Pataki's former counsel, expired in March and Mr. Finnegan has remained on the commission as a holdover. The commission is chaired by Elmira attorney John F. O'Mara, who also served in Mr. Pataki's administration in various capacity. Four members of the commission are appointed by the chief judge, four by the governor and four by the majority and minority leaders of the state Legislature.  Joel.Stashenko@incisivemedia.com

Federal Judge Suspended On Misconduct Charges

Federal Judge Suspended On Misconduct Charges
The Wall Street Journal by NATHAN KOPPEL -  September 13, 2008; Page A4

A panel of federal judges suspended U.S. District Judge G. Thomas Porteous Jr. of New Orleans for two years for alleged misconduct, a severe punishment that may lead to a move in Congress to remove him from the bench through impeachment. In a decision handed down this past week, the Judicial Council of the Fifth Circuit U.S. Court of Appeals declared that Judge Porteous had "brought disrepute to the federal judiciary." The alleged misconduct included failing to report gifts from lawyers who appeared before him and concealing debts while in personal bankruptcy. Suspension of any length is rare in a system in which judges are largely investigated by their peers, and a punishment of two years is highly unusual, experts said. "This is probably the most severe punishment ever imposed by the federal bench against a fellow judge," said Arthur Hellman, a judicial-ethics expert at the University of Pittsburgh School of Law.

Judge Porteous didn't return a call seeking comment. Lewis Unglesby, the judge's attorney, said the suspension is unwarranted. "I don't think you'll find a single person who says Judge Porteous wasn't fair in any single case he tried," Mr. Unglesby said. The circuit court's decision comes when the federal bench is under great scrutiny for misbehavior. Last month, another U.S. district judge, Samuel Kent of Houston, was indicted on charges that he had sexually abused a court employee, which he has denied. The federal bench adopted procedures this year aimed at more thoroughly investigating judicial-misconduct complaints. The rules were a response in part to complaints that federal judges, who enjoy life tenure, aren't sufficiently accountable for ethical lapses. The only other option for punishing misconduct is the removal of judge though impeachment, a rare act that has been successful only seven times in U.S. history. The House Judiciary Committee said in June it was weighing whether to begin impeaching Judge Porteous. The committee, which didn't return requests to comment Friday, hasn't held impeachment hearings, and Congress is due to adjourn shortly. "Common sense tells me nothing will happen in this congressional session," said Mr. Unglesby, the judge's attorney. The 62-year-old judge was appointed to the bench in 1994 by President Bill Clinton.

Along with its reprimand, the Fifth Circuit unsealed investigative reports detailing alleged transgressions by Judge Porteous. After incurring gambling debts, the judge filed for bankruptcy in 2001 under a fictitious name to save himself embarrassment, according to a 2007 report by a Fifth Circuit investigative committee. The judge was warned not to incur more debt while in bankruptcy yet ran up thousands of dollars in undisclosed gambling debts at casinos in Louisiana and Mississippi, the report said. These alleged infractions were investigated by a bankruptcy judge who didn't take action, said Mr. Unglesby. The Judicial Conference of the United States, a policy-making body for federal courts, also has investigated Judge Porteous. In a June report, released by the Fifth Circuit, the Judicial Conference concluded the judge had solicited and received gifts from lawyers, including, "cash payments, numerous lunches, payments for travel, meals, and hotel rooms in Las Vegas." The judge failed to disclose the gifts, according to the report, and used methods of payment that left no paper trail, including once dispatching his secretary to pick up an envelope of cash. "There's no prohibition in law or practice, which prevents judges from socializing with their friends," Mr. Unglesby said about the alleged gifts. "Big deal. I pay today; you pay tomorrow." Write to Nathan Koppel at nathan.koppel@wsj.com

Feds: While Corrupting Congress and Cheating Clients, Abramoff Stiffed His BigLaw Firm

Feds: While Corrupting Congress and Cheating Clients, Abramoff Stiffed His BigLaw Firm
The Daily Business Review by John Pacenti - September 10, 2008

MIAMI - It wasn't only American Indians who were ripped off by disgraced Republican lobbyist Jack Abramoff. In a sentencing memorandum filed by the Justice Department, prosecutors claimed Abramoff defrauded his employer, Greenberg Traurig, as well. Abramoff was sentenced last week in Washington to four years in federal prison for fraud, tax evasion and conspiracy to bribe public officials, such as former U.S. Rep. Robert W. Ney, R-Ohio. Abramoff already is two years into a nearly six-year sentence for another fraud case involving the purchase of the Dania Beach-based SunCruz gambling cruise line. U.S. District Judge Ellen Huvelle could have sentenced Abramoff to 11 years, but she gave him credit for helping the FBI investigate a number of politicos caught in the lobbyist's vast influence-peddling scandal. Abramoff's two federal sentences will run concurrently. Greenberg has said much of Abramoff's conduct was unknown to the Miami-based law firm until he pleaded guilty in Washington in 2006. "The acts of Jack Abramoff were illegal and a result of his efforts to deceive his clients and his former firm. He was asked to leave our firm more than four years ago," Greenberg spokeswoman Jill Perry said. "His plea agreement acknowledges that he defrauded Greenberg Traurig, and the restitution order recognizes that our firm was a victim of his illegal acts." Huvelle ordered Abramoff to pay $15 million in restitution. Perry didn't have comment regarding any restitution to Greenberg Traurig.

Abramoff cost his former employer plenty, the memo shows. Abramoff encouraged his lobbying team to conceal the identity of recipients of trips, dinners and other gifts on internal Greenberg Traurig reports to hide the identity of public officials receiving the favors, according to the government sentencing memo. Also noted, but not in detail, was that Abramoff committed private honest services fraud against his employer. "He directed a wireless company to pay lobbying fees due to Greenberg Traurig to Abramoff's nonprofit, the Capital Athletic Foundation," the memo states. A 2005 Senate inquiry found the charity was used to pay for overseas trips for Ney, House Majority Leader Tom DeLay and former Christian Coalition leader Ralph Reed. CAF also was used to funnel large fees from Indian tribes to lawmakers. Prosecutors say Abramoff asked a tribal client to pay the "vast bulk" of his fees through DeLay aide Michael Scanlon's public relations firm, Capital Campaign Strategies, which cut fees meant for Greenberg.

Abramoff also convinced the Pueblo of Sandia Indian tribe in New Mexico to hire Scanlon, reducing Greenberg's proposed fee from $125,000 to $50,000 per month. Because of the Scanlon hire, Greenberg lost its share of the additional fees that might have been paid by the Sandia tribe to Abramoff, depending on the outcome of their negotiations, according to the sentencing memorandum. The tribe hired Abramoff and Scanlon to lobby on its behalf in a legal dispute related to a mountain revered by the tribe as sacred. Other times, Abramoff scammed Greenberg Traurig by simply having his lobbyists pad their hours to get higher bonuses, according to prosecutors. "Lobbyists regularly shifted expenses from one client to another or padded hours in order to make it appear that they performed more work than they actually did, a fact which may have created a false impression about what the lobbyists were actually doing for their nonretainer clients," the memo states. Perry said she couldn't comment on the specifics of the fraud or the restitution owed to Greenberg Traurig. Assistant U.S. Attorney Mary K. Butler outlined the fraud against Greenberg Traurig that first surfaced at a Senate Indian Affairs Committee hearing in 2004. U.S. Sen. Tim Johnson, D-S.D., declared "credible law firms were taken advantage of."

Not all of the costs associated with Abramoff were mentioned in the sentencing memo, though. The firm negotiated settlements with several of Abramoff's tribal clients, such as the Alabama-Coushatta Tribe of Texas, which claimed Abramoff and others took part in a scheme that shut down the tribe's casino. Abramoff would tell the tribes -- such as the Tigua -- that he would work for free if they hired Scanlon. "In fact, Abramoff and Scanlon agreed that Abramoff would receive 50 percent of the net profits," the memo stated. They would often work against interests of the tribes they represented. For instance, Abramoff and Scanlon represented the Louisiana Coushatta in that tribe's efforts to close casinos in Texas -- a direct conflict with the interest of the Tigua, who wanted to reopen a casino in El Paso. The Daily Business Review reported in April that Greenberg Traurig refunded $324,000 in lobbying fees to Guam to get the island territory to drop felony charges against the firm. The firm faced charges of theft by deception, theft and conspiracy. Prosecutors say Greenberg became entangled in Guam's criminal investigation after the fallen lobbyist billed the territory for work on projects he wasn't hired to pursue.

Top Priority: Anti-Corruption Campaign

NY Pol Accused of Taking $500,000 in Payoffs
The New York Law Journal by Mark Hamblett - September 11, 2008

Assemblyman Anthony S. Seminerio of Queens yesterday became the latest New York politician to be charged in the Southern District with corruption as he was accused of taking $500,000 in payments from entities doing business with the state and using a purported consulting company to conceal the transactions. Mr. Seminerio, 73, surrendered to FBI agents at 10 a.m. yesterday and later pleaded not guilty to a single count of theft of honest services mail fraud, 18 U.S.C. §§1341, 1346, which carries a maximum of 20 years in prison. U.S. Attorney Michael J. Garcia and Mark J. Mershon, assistant director-in-charge of the FBI's New York office, announced the charge at an afternoon news conference, with Mr. Garcia accusing the assemblyman of "selling out his office, violating the public trust and breaking federal law." Mr. Garcia also laced into the "absence of genuine transparency in Albany" for "providing cover" for public corruption. Mr. Seminerio, a former city corrections officer from Ozone Park, has represented the 38th Assembly District in Queens for 30 years. He allegedly conducted the fraud over eight years, beginning in 2000. Mr. Garcia said that Mr. Seminerio established Marc Consultants to take advantage of the state's Public Officers Law, which permits members of the Legislature to disclose income in the name of a business instead of listing the actual clients of the business.

One of those clients was a New York hospital whose name Mr. Garcia would not divulge. The hospital, whose funding was affected by the state budget, paid Mr. Seminerio $310,000 through the bank account of Marc Consultants. A Medicaid-managed health care plan affiliated with the hospital paid him an additional $80,000. Mr. Seminerio allegedly then pressed other lawmakers to help the hospital and lobbied the executive branch as well. Other allegations include an undercover agent paying the assemblyman $25,000 to arrange meetings with the chairs of Assembly and Senate committees to discuss proposed legislation and Brownfield development projects and additional payments to Mr. Seminerio from a fictional company that wanted the inside track on the potential privatization of components of the state probation system. Prosecutors said Mr. Seminerio did little or no consulting for either the hospital or the undercover agent.

The case against Mr. Seminerio was built through recorded conversations with the undercover agent and a cooperating witness, wiretaps on Mr. Seminerio's phones and the seizure of evidence from his office in Albany, his district office in Queens and his home. According to the complaint, in one recorded conversation with the witness, Mr. Seminerio can be heard saying he earned a reputation in the health care field after working on a health care bill over 25 years ago - a bill he said was among "favors" he did for individuals who would now be charged for his services. "I was doing favors for these sons-of-bitches there, you know, they were, they were making thousands," Mr. Seminerio is quoted in the criminal complaint. He also conveys to the undercover that his new approach was, "Screw you, from now on, on, you know, I'm a consultant." Mr. Seminerio was released on a $500,000 personal recognizance bond. A pretrial hearing has been scheduled for Oct. 10. Ira Cooper of Davidson & Cohen in Rockville Centre represented Mr. Seminerio. After the arraignment, Mr. Cooper said only, "He's tired. He's exhausted. Please excuse us. He's had a very difficult time."

Anti-Corruption Campaign

Mr. Garcia came into office vowing that public corruption would be one of his top priorities and his office has since leveled charges against several state and city officials as well as federal immigration officers. At the United Nations, they have charged and won guilty pleas or verdicts against officials in connection with the Iraqi oil-for-food program and a procurement scandal. In 2006, prosecutors indicted Senator Efrain Gonzalez Jr. of the Bronx on charges he stole more than $400,000 from nonprofit groups to whom he had steered state grants. A superceding indictment against the senator adding new charges was filed this summer. His trial is scheduled to begin next month. In 2007, prosecutors unsealed an indictment accusing Bernard Kerik, the former New York Police Department commissioner and one-time nominee to head the Department of Homeland Security, with corruption, including the failure to report a $250,000 loan from a businessman and repeatedly lying to investigators.

In March, Brian McLaughlin, a labor leader and a former assemblyman representing the 25th District of Queens, pleaded guilty to racketeering for, among other things, misappropriating $100,000 from a division of the International Brotherhood of Electrical Workers, $185,000 from the New York City Central Labor Council, and $35,000 from the state for creating fictitious jobs on his legislative staff and pocketing the salaries for himself.

In April, Southern District prosecutors obtained indictments against two aides to New York City Councilman Kendall Stewart. Asquith Reid and Joycinth Anderson were accused of embezzling $145,000 from a charity that received funds through discretionary awards made by Mr. Stewart. More extensive charges were announced in June. In July, criminal charges were brought against Nigel Osarenkhoe, the deputy director of the Payment Services Office Department of the city's Administration for Children's Services. Mr. Osarenkhoe was accused of conspiring to steal hundreds of thousands of dollars in agency money designated for needy children. Meanwhile, other Assembly members have faced charges lodged by the Brooklyn District Attorney's Office. Both Clarence Norman and Diane Gordon were convicted of crimes and forced to resign their seats.

Revisited Legal Strategy: Just Have Witness Killed (FOR FULL STORY, CLICK HERE)

LAWYER TRIED TO 'ELIMINATE' WITNESSES: COPS
The New York Post by STEFANIE COHEN and CLEMENTE LISI - September 10, 2008

A prominent lawyer was charged today with attempting to "eliminate" the main witness against his drug kingpin client, federal officials said. Robert Simels was arrested this afternoon and accused in an 18-page federal complaint of paying $1,000 for the hit - which also included strict orders not to kill the witness' mother. Simels, who will be arraigned with conspiring to obstruct justice this afternoon in Brooklyn federal court, is alleged to have arranged the hit for his client, Shaheed Kahn, who ran a drug-dealing ring known as the "Phantom Squad." Kahn allegedly told Simels that the case against him hinged on one man - identified in court papers as "John Doe No 1." Simels wanted to "eliminate" and "neutralize" the witness, authorities said.

He allegedly told a government informant at one point that, "Obviously, any witness you can eliminate is a good thing." The feds said that on June 19, Simels met with the government informant in his Manhattan office and handed over $1,000 down payment for the hit. The two were caught on tape, according to the federal complaint, with Simels saying, "Here's $1,000 to get started." When the undercover informant said "no problem," Simels replied, "All [Kahn] says is be careful. He says don't kill the [witness'] mother." During the brief conversation, Simels also said, "Well, [Kahn] would like as much pressure being put on [John Doe No. 1] as possible." During his 30-year career, Simels has represented several dangerous criminals as well as A-list stars. He has defender the likes of Kenneth "Supreme" McGriff, a notorious gang leader who built a crack empire in Queens and had two rivals assassinated in 2001; former Jets stars Marc Gastineau and Ken O'Brien; and mobster-turned-rat Henry Hill, whose life was the basis for the hit movie, "Goodfellas."

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Here's the New York Daily News article on 'Officer of the Court' Robert Simels:

Lawyer plotted to kill and bribe witnesses in drug goon's trial - feds
The New York Daily News by JOHN MARZULLI - September 10, 2008

A prominent defense lawyer was busted Wednesday on charges he and a major narcotics trafficker plotted to bribe witnesses or murder their family members. Robert Simels, whose roster of clients includes drug kingpin Kenneth (Supreme) McGriff, former football star Mark Gastineau and gangster Henry Hill of "GoodFellas" fame, was arrested by Drug Enforcement Administration agents at his upper East Side office. On his Web site, the flamboyant lawyer notes he started out prosecuting corrupt cops, led a "legendary" law firm and was once dubbed "the Rolls-Royce of litigators."

Simels, 61, is charged with obstructing justice by conspiring to "eliminate" and "neutralize" potential witnesses who might testify at the upcoming trial of client Shaheed (Roger) Khan, a reputed leader of a violent drug organization based in Georgetown, Guyana. Brooklyn federal prosecutors say Simels asked a member of Khan's so-called "Phantom Squad" - a paramilitary group that provides muscle for the drug dealers - for help last May in finding rats who cooperated against his client. Prosecutors said the Phantom member was one of those rats. "Simels discussed with the (informant) what to do when the potential witnesses or their family members were located," DEA agent Cassandra Jackson said in an affidavit. "In substance and in part, Simels discussed a range of options, from offering them money to murdering their family members." In one secretly recorded conversation, he asked about "heat" coming back to Khan if a government witness refused to testify because someone close to him or her "falls off the face of the Earth." Simels told the informant he was leaving it up to him to figure out "what's going to best get to him (the witness)," but later told the informant not to kill the witness' mother. Simels was released on a $3.5 million bond secured by his home in Waccabuc, Westchester County. Khan, also charged in the conspiracy, was not in court Wednesday. Simels' associate Arienne Irving, who also was arrested, was freed on a $500,000 bond. "Bob Simels is well-known as a tenacious, effective and highly capable defense lawyer and he was doing his work," said his lawyer Gerald Shargel. "These charges are false and we intend to mount a vigorous defense." jmarzulli@nydailynews.com

TO READ THE CRIMINAL COMPLAINT, CLICK HERE

Outsider to Preside over Federal Judge's Sex Crime Trial

Outsider Tapped to Preside in Judge's Sex Crime Trial
The National Law Journal by Pamela A. MacLean - September 10, 2008

The 5th U.S. Circuit Court of Appeals wasted little time tossing the criminal prosecution of U.S. District Judge Samuel B. Kent of the Southern District of Texas to an out-of-circuit judge to oversee. Senior U.S. District Judge Roger Vinson of the Northern District of Florida in Pensacola, was assigned the job in an order signed by U.S. Supreme Court Chief Justice John G. Roberts Jr. on Aug. 29, one day after Kent's Aug. 28 indictment. It was based on certification by the 5th Circuit of the need to assign the case outside the circuit. The order was not made public until Sept. 5, when Kent's colleague, Chief Judge Hayden Head of Houston signed the order appointing Vinson. Kent, 59, faces three criminal charges, including attempted aggravated sexual abuse and two counts of abusive sexual touching of his former case manager, Cathy McBroom, in March 2007. He is the first federal judge ever indicted for alleged sex crimes. The charges carry a potential life prison term.

The ink was barely dry when Vinson issued his first order. He gagged everyone in the case from talking about it to the news media. His sweeping order states that the defendant, the alleged victim and the prosecuting attorneys "have so far demonstrated a willingness to 'try this case in the press' and manipulate media coverage to gain favorable attention." He said the intense scrutiny of the case has the potential to taint the Houston jury pool so, to "preserve a fair trial," he forbade anyone connected with the case from public comment about it. Vinson gagged all judicial branch employees from the courthouse, including his own staff, clerks, probation officers, secretaries and court reporters. In addition, the lawyers and their staffs; the U.S. Marshals Service; court security; any state, local or federal law enforcement officers; the alleged victim; and any witnesses are forbidden from making public statements. He added that testimony from the grand jury proceedings, along with tapes, transcripts and other documents are not public. Vinson's appointment runs to the end of this year, from Aug. 29, 2008 to Dec. 31, 2008, according to the order.

Vinson, appointed to the Florida trial bench by President Reagan in 1983, is considered by lawyers to be a smart, well-respected judge in the district and an "old school judge," according to lawyer comments in the Almanac of the Federal Judiciary. Among his best-known cases, in 1985 Vinson sentenced two men convicted of three abortion clinic bombings in Florida to 10 years in a minimum-security prison and said they should be eligible for parole "as soon as possible." In 1994 he rejected a justification defense by anti-abortion activist Paul J. Hill, who was charged with killing a doctor who performed abortions, along with the doctor's escort. Vinson wrote," There are legal alternatives, certainly legal alternatives far less intrusive and far less evil" than killing someone to stop abortions, U.S. v. Hill, 893 F. Supp. 1044 (N.D. Fla. 1994). He also upheld use of the Freedom of Access to Clinic Entrances Act used to convict Hill.

Public Servants for Sale: cheaply

Abramoff Protege Busted for Conspiring to Corrupt Congress
The Associated Press by Erica Werner - September 9, 2008

WASHINGTON — A one-time congressional aide who went on to work with jailed lobbyist Jack Abramoff was arrested Monday and accused of conspiring to corrupt government officials including his former boss, current Rep. John Doolittle, R-Calif. Kevin Ring, 37, pleaded not guilty to a 10-count federal indictment that accuses him of conspiring with Abramoff to win assistance from congressional and executive-branch officials by giving them things of value, and helping them skirt requirements to report those gifts. He appeared in federal court unshaven, his hair rumpled, wearing shorts and a T-shirt and occasionally fighting back tears as he exchanged glances with his wife. Ring's lawyer said that despite cooperating voluntarily for two years, Ring was not allowed to surrender himself. "The prosecutors orchestrated the spectacle of arresting Mr. Ring in front of his wife and children this morning," attorney Richard Hibey said in a statement.

"While Mr. Ring had been cooperating with officials for over two years, he simply could not plead guilty to crimes he did not commit. From that point he was deemed uncooperative." The indictment accuses Ring of obstructing justice by attempting to thwart a grand jury and congressional investigation, of lying about getting an alleged $135,000 kickback, and of engaging in a scheme to deprive citizens of the "honest services" of their elected officials. The most serious charge, involving wire fraud, carries a possible prison sentence of up to 20 years. Ring faces six counts of that. He was released on his own recognizance on condition he not travel outside the D.C. metro area or have contact with potential witnesses.

Ring's indictment was the latest development in the long-running Abramoff investigation, which has netted 13 guilty pleas from former lobbyists and government officials and one former congressman, GOP Rep. Bob Ney of Ohio, who was among those mentioned in court papers Monday as a recipient of favors from Ring. Abramoff was sentenced to four years in prison just last week. Prior to working as a lobbyist with Abramoff from 1999-2004, Ring worked for more than four years as a top aide to Doolittle. Doolittle has not been charged but remains under investigation, and is retiring from Congress at the end of this year partly as a result of the probe. He has repeatedly maintained he is innocent. The 46-page indictment lists a long list of favors that Ring did for aides to Doolittle and for Doolittle himself, who is referred to not by name but as "Representative 5." These included free travel, meals, fundraising help and tickets to sports games and concerts by the Dixie Chicks and Faith Hill. Abramoff also put Doolittle's wife, Julie, on his payroll to help with a fundraiser, and continued paying her even after the fundraiser she was hired to plan got canceled. Julie Doolittle got paid a total of about $96,000 from Abramoff.

Doolittle, in turn, helped out Ring and Abramoff, including by writing letters to the Interior Department to help their tribal clients, pushing for federal money for their projects and seeking support from his colleagues for legislation they were pushing. At one point in 2000, Doolittle's then-chief of staff told Ring that Doolittle had said he felt like a "subsidiary" of Abramoff's firm, the indictment says. The indictment quotes an October 2000 e-mail from Ring to Abramoff describing Doolittle as "such a good soldier, doing everything we asked of him," and suggesting Abramoff seek more campaign money for Doolittle. Doolittle later asked Ring for more help raising campaign cash, according to the indictment. Doolittle's attorney, David Barger, defended the congressman in a statement Monday. "It is clear that portions of the Kevin Ring indictment were designed to make gratuitous references to the congressman and his wife. This appears to have been done to titillate the public, with the foreseeable and therefore intended consequence of attempting to embarrass and pressure the congressman," the statement said.

"Not once in this document does the Department of Justice allege any sort of illegal agreement between Congressman Doolittle, on the one hand, and Kevin Ring or Jack Abramoff, on the other. To the extent the indictment can be read to imply such an agreement, the congressman continues to steadfastly maintain there was none and that he is innocent." The indictment also details numerous favors exchanged between Ring and John Albaugh, a one-time top aide to former Oklahoma Rep. Ernest Istook. Albaugh pleaded guilty in June to a conspiracy to defraud the House. Istook is referenced in the indictment as "Representative 4" and is described getting help from Ring including fundraisers for which he failed to make the proper reimbursement. Istook has not been charged. In June he said he was cooperating with the FBI, but had been told he's not a target of the investigation.

'Officer of Court' Mail and Wire Fraud Case to Proceed

DEFENDANT LAWYER (STEVEN COREN)was indicted for mail and wire fraud and money laundering for devising, for clients, schemes to defraud government entities relating to construction contracts subject to the Davis-Bacon Act by creating the false appearance that laborers were being paid required prevailing wages. Defendant had created the Contractor's Benefit Trust (CBT) into which participating contractors paid prevailing wage fringe benefit payments as irrevocable contributions to a trustee. Defendant acted as the CBT's trustee. The court denied dismissal, noting that an employer's obligations under Davis-Bacon are not discharged solely because dollars claimed to satisfy payment of a prevailing supplement wage obligation are contributed to an ERISA qualified fund. When an employer chooses to use an ERISA-qualified trust to satisfy its Davis-Bacon obligations compliance must be had with both ERISA and Davis-Bacon. The plain meaning of the Davis-Bacon Act, and case law, adequately warned defendant's conduct was criminal.

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Published in the New York Law Journal 9/8/2008
United States v. Steven Coren, 07-CR-265 - Decided: August 29, 2008; District Judge Eric N. Vitaliano

U.S. DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Appearances: For US: Richard T. Faughnan, United States Attorneys Office Eastern District of New York, Brooklyn, NY; Sarah Mary Coyne, United States Attorneys Office, Eastern District of New York, Brooklyn, NY; For Defendant: Lawrence H. Schoenbach, New York, NY, Marc Lee Mukasey, Bracewell & Giuliani LLP, New York, NY, Judge Vitaliano

MEMORANDUM AND ORDER

Defendant Steven Coren moves to dismiss criminal charges brought against him in a 17 count indictment filed on April 4, 2007. For purposes of the motion the factual allegations are deemed true and, following extensive briefing including by amici, the motion is denied.

Background

The indictment charges, in substance, that Coren, an attorney, devised for clients schemes to defraud various government entities relating to construction contracts subject to the Davis-Bacon Act, Title 40, U.S.C. §3142 ("Davis-Bacon") or New York Labor Law Section 220, et seq. ("Section 220" or "Little Davis-Bacon"), by creating the false appearance that laborers working for the contractors were being paid the required prevailing wage. Specifically, counts one through ten charge Coren with mail fraud, in violation of 18 U.S.C. §§1341 and 2; counts 11 through 13 charge Coren with wire fraud, in violation of 18 U.S.C. §§1342 and 2; and counts 14 through 16 charge Coren with money laundering and money laundering conspiracy, in violation of 18 U.S.C. §§1956(1)(3)(B) and 1956(h), respectively. Count 17 charges Coren with obstruction of justice in violation of 18 U.S.C. §1512(c)(1) through the altering or concealing of records with the intent to impair their integrity and availability for use in an official proceeding.

Applicable Statutes

Davis-Bacon requires that contracts in excess of $2,000 to which the United States is a party for the construction, alteration, or repair of public buildings or public works contain a provision "stating the minimum wages to be paid various classes of laborers and mechanics." 40 U.S.C. §3142(a). The minimum wages to be paid are the wages that the Secretary of Labor determines to be "prevailing" for laborers and mechanics employed on similar projects in the same geographical area in which the work is to be performed (the "prevailing wage"). 40 U.S.C. §3142(b). As set by the statute, the prevailing wage has two components, both of which are computed on an hourly basis: a basic rate of pay and a fringe benefit amount.1 A contractor may discharge its prevailing wage fringe benefit obligations by either: (1) paying in cash; (2) making contributions to a trustee or to a third person pursuant to a fund, plan, or program referred to in 42 U.S.C. §3141(2)(B)(i); (3) assuming an enforceable commitment to bear the costs of a plan or program referred to in 42 U.S.C. §3141(2)(B)(ii); or (4) by a combination thereof. 40 U.S.C. §3142(d).

New York's Little Davis-Bacon Act contains essentially the same provisions as the federal prevailing wage law. Pursuant to this statute, each contract, to which the state, a locality, a public benefit corporation, or a commission appointed by law is a party, for the construction, alteration, or repair of a public works project must contain a provision requiring that laborers, workmen and mechanics be paid not less than the prevailing wage, to be determined by either the New York State Department of Labor, or the New York City Comptroller if the work is performed for agencies of the City of New York. As with Davis-Bacon, under Section 220, the prevailing wage consists both of a basic hourly rate and supplemental benefit rate. "Supplements", as defined by the statute, mean "all remunerations for employment paid in any medium other than cash . . . or any payments which are not 'wages' . . . including, but not limited to, health, welfare, non-occupational disability, retirement, vacation benefits, holiday pay, life insurance, and apprenticeship training." Section 220(5).2

Davis-Bacon and Little Davis-Bacon each requires contractors, on a regular basis, to submit a transcript of their payroll to a public agency and to certify under the penalties of perjury that they complied with the prevailing wage requirements. See 29 C.F.R. §5.5(a)(3); Hopkins v. Unites States Dep't of Hous. & Urban Dev., 929 F.2d 81, 86 (2d Cir. 1991) ("To demonstrate compliance with wage standards, federal contractors are required to submit weekly certified statements with respect to the wages paid each affected employee."); Section 220(3-a)(a)(iii). Credit is given for compliance when the contractor has met the obligations as to both the hourly wage and the fringe benefit wage.

Relevant Facts

Coren, during the relevant time, practiced out of the Manhattan offices of his law firm, Coren & Associates, P.C. As part of his practice, Coren advised several contractor clients. In connection with this work, in 1993, Coren established the Contractor's Benefit Trust (the "CBT"), an entity formed under the dual authority of ERISA and the IRS Code. As stated in its Declaration of Trust, the CBT was created "to provide benefits under New York State Labor Law Section 220 (and other similar state laws in other states), the Davis-Bacon Act, or any other state or federal rule requiring the payment of prevailing supplemental benefits which include pension annuity, vacation, health and welfare, or like benefits." As devised by Coren, client-contractors who participated in the CBT would make prevailing wage fringe benefit payments to the trust as irrevocable contributions to a trustee or a third person under a fund, plan, or program. The CBT then served as a "benefits bank", funding various types of employee welfare benefits, including health, vacation, and the like to certain eligible employees. Companies utilizing the CBT signed a Participation Agreement, by which the employer designated the specific benefits plan(s) it wanted to provide its employees. Coren was the trustee of the CBT.

Contributions to the CBT were expressly limited to those funds necessary to cover fringe benefits required to be paid to workers under the provisions of a state and/or federal prevailing wage law. Further, absent written permission from the trustee (Coren), contributions were permitted only if the employer actually received credit for the contribution in satisfaction of its obligation to provide such prevailing wage benefits. Consequently, the monies held in the CBT consisted solely of contributions that Coren's client-contractors had certified to state and/or federal agencies satisfied their obligation to pay prevailing wage fringe benefits owed by law to prevailing wage employees.

As charged in the indictment, Coren knew, and, in fact, intended, that employer contributions to the CBT would not be used exclusively to provide fringe benefits to the prevailing wage employees on whose behalf credit had been claimed by his client-contractors. Rather, the funds in the CBT were used for the purchase of welfare benefits for company employees without regard to the type of work performed by that employee. In some instances, the benefits paid by the CBT inured solely, or, at least, mostly, to the benefit of the owners and operators of the companies themselves. Coren, it is therefore alleged, advised, counseled and assisted his client-contractors in using the CBT to claim fraudulently to state and federal agencies that they were in full compliance with their prevailing wage obligations, even though a significant portion of the funds contributed to the CBT were not used to provide fringe benefits for the workers on whose behalf the contribution had been made and prevailing wage credit received. Put simply, the indictment's essential criminal theme is that Coren assisted these owners and operators in diverting funds deposited on behalf of prevailing wage workers, and reported to state and federal agencies as satisfying prevailing wage obligations, back into their own pockets. Correspondingly, under Coren's alleged scheme, employees working on government projects received wages below the prevailing wage, despite the employer's contrary sworn certification.

The fraudulent schemes allegedly contrived by Coren were described with some detail in the indictment:

Fraudulent Scheme 1: In 2000, Coren established a CBT account for two door manufacturing and installation companies, known as Corporation-1 and Corporation-2, both of which were owned and operated by Cooperating Witness 1 (CW-1) and Cooperating Witness 2 (CW-2). These corporations performed work primarily on publicly funded projects subject to prevailing wage obligations. Coren advised and counseled CW-1 and CW-2 to deposit funds into the CBT that they would claim as fringe benefit contributions in satisfaction of their prevailing wage obligations. Coren then further advised CW-1 and CW-2 to use those deposits to purchase benefits, such as health insurance, for nonprevailing wage employees of the corporations on whose behalf the contributions to the CBT had not been made. The indictment further charges that Coren advised, counseled and assisted CW-1 and CW-2 in setting up a vacation trust that maintained eligibility requirements which essentially precluded all employees from receiving any vacation and holiday benefit, except for CW-1 and CW-2, who were themselves nonprevailing wage employees.

Fraudulent Scheme 2: On or about August 2003, Coren established a CBT account for Corporation 3. Corporation 3 was partly owned by Cooperating Witness 3 (CW-3). Cooperating Witness 4 (CW-4) was employed by CW-3 as the office manager. Coren allegedly advised, counseled and assisted CW-3 and CW-4 in establishing a CBT account into which Corporation-3 would deposit funds claimed as fringe benefit contributions in satisfaction of prevailing wage obligations. As with the previous scheme, the indictment claims Coren advised CW-3 and CW-4 to use those CBT deposits to purchase benefits for nonprevailing wage employees on whose behalf fringe benefit contributions had not been made. Coren also advised and counseled CW-3 and CW-4, it is charged, to deposit funds into the CBT account for one specified group of prevailing wage workers and then transfer some or all of the funds in that account to various labor union benefit funds on behalf of a separate group of prevailing wage workers, for whom Corporation 3 also claimed to have satisfied its fringe benefit obligations. Thus, the indictment charges, on the advice and with the assistance of Coren, Corporation-3 took credit for having paid the fringe benefit portion of the prevailing wage for two groups of workers, while actually depositing money on behalf of only one group.

As one would expect, the obstruction of justice count relates to the investigation which precipitated the principal counts of the indictment. To that end, count 17 references the work of a grand jury in the Eastern District of New York, duly empanelled in November 2005, that was investigating one of the fraudulent schemes charged in this indictment. Thereafter, on or about January 12, 2006, Coren was informed by a cooperating witness that his company was under investigation by a law enforcement agency and that law enforcement officials had obtained certified payrolls submitted by the corporation for work it performed as a subcontractor on various state and federal projects. Coren, in response, allegedly advised the owners and operators of the company, with whom he had previously dealt, to conceal and destroy records, documents and other objects relating to the transfer of CBT funds.

Rule of Decision

Federal Rule of Criminal Procedure 12(b)(2) permits a criminal defendant to raise by pretrial motion "any defense, objection, or request that the court can determine without a trial of the general issue." A court faced with a motion to dismiss must ask, first, whether the indictment states an offense, and second, whether the indictment is sufficiently specific to provide notice and allow the defendant to plead double jeopardy in a subsequent case. See United States v. Sierra-Garcia, 760 F. Supp. 252, 258 (E.D.N.Y. 1991). Allegations of fact in the indictment must be accepted as true and contrary assertions of fact by the defendant will not be considered. United States v. Goldberg, 756 F.2d 949, 950 (2d Cir. 1985).

Discussion

Coren primarily advances three arguments in support of his motion to dismiss. First, that the indictment does not charge a crime because Coren's client-contractors fully complied with Davis-Bacon and Section 220 by claiming credit for funds deposited into the CBT. Second, that, to the extent Davis-Bacon and Little Davis-Bacon require anything more than a contribution to a fund, such as the CBT, the statute fails to provide adequate notice of the prohibited conduct. Finally, that, even assuming, arguendo, the client-contractors were in violation of applicable prevailing wage laws, Coren cannot be criminally liable because he did not advise his clients as to the amount of credit they could properly claim.

ERISA and Prevailing Wage Law

The heart of Coren's motion to dismiss focuses on the intersection of ERISA and the prevailing wage laws. According to Coren, because ERISA controls the operation of a benefit trust, such as the CBT, prevailing wage laws can require only that employers who are subject to prevailing wage requirements contribute a defined amount to an ERISA-qualified benefits trust, but cannot, in any way, dictate how those funds are then distributed. Coren thus contends that an employer can properly claim prevailing wage credit for contributions to a trust in the name of prevailing wage workers, regardless of whether and how those contributions relate to benefits ultimately provided (or not provided) to those workers. Furthermore, Coren points out, ERISA precludes discrimination by employers among employees who are "qualified" to receive benefits - as defined by a plan or program - and that, under ERISA, employees have no ownership interest or specific right to any asset in such a fund. Coren also notes that ERISA preempts state law, such that state prevailing wage laws cannot (1) prescribe either the type and/or the amount of an employer's contribution to a plan, rules or (2) promulgate regulations under which a plan operates, or (3) dictate the nature or amount of benefits provided under the plan. For these reasons, Coren argues that contributing to a trust alone must satisfy prevailing wage obligations, even if those contributions do not relate, in any way, to benefits ultimately provided to prevailing wage workers:

For government prevailing wage reporting purposes, if the benefits wages are contributed to a proper ERISA trust, the contractor has met his obligation under Davis-Bacon. Once the benefits have been deposited, the specific rules governing the ERISA plan take effect and define acceptable uses of the funds such as non-discriminatory benefit payments on behalf of plan participants pursuant to the employer's plan.

(Def's Br. at 10.) Since, as it is alleged in the indictment, Coren's client-contractors did contribute money to a qualified ERISA trust, and both Coren and his clients were in full compliance with ERISA, Coren contends that the indictment fails to state a crime.

The government conceded at oral argument there is no allegation that the CBT, and Coren as trustee of the CBT, failed to comply with ERISA. But, it is more of a demurrer than a concession for the government argues that compliance with ERISA is irrelevant to the question of whether Coren and his client-contractors criminally violated prevailing wage laws. According to the government, prevailing wage laws require that there be a reasonable relationship between contributions to a trust on behalf of prevailing wage workers and benefits actually received by those workers in order for an employer to properly claim credit. Whether the employer complies with ERISA in the operation of the trust is irrelevant, the government says, to the question of whether the employer properly claimed credit under prevailing wage laws. Coren argues that the government's position is untenable, because ERISA controls plan benefit payments to workers, and, under ERISA, an employee has no ownership interest or other specific rights; "no member of a defined benefit plan under ERISA has a claim to any particular asset that composes a part of the plan's general asset pool." (Def's Br. at 15 (citing Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 440 (1999).)

Coren's argument, though provocative, is fatally flawed. First and foremost, nothing in the prevailing wage laws requires the payment of supplemental benefits through an ERISA-qualified trust. The laws simply require that they be paid. They could, of course, always have been paid in cash. Therefore, whatever an employer's obligations are under Davis-Bacon, they are not discharged solely because dollars claimed to satisfy payment of a prevailing supplement wage obligation are in fact contributed to an ERISA qualified-fund, plan or program; nor is the government precluded from examining who the actual beneficiaries of the CBT were in order to determine compliance with prevailing wage laws. ERISA and Davis-Bacon need not work at cross purposes, and when an employer chooses to utilize an ERISA-qualified trust to satisfy its Davis-Bacon obligation, compliance must be had with both.

Moreover, the relationship between prevailing wage laws and ERISA is not one of first impression in this Circuit. In HMI Mech. Sys., Inc. v. McGowan, 266 F.3d 142 (2d Cir. 2001), the court of appeals addressed the intersection of ERISA and Section 220. In that case, an employer challenged New York's labor regulations, which determined a contractor's compliance with Section 220 by using, among other things, an annualization formula.3 Id. at 145. To enforce Section 220, the state required that HMI, the plaintiff-employer, submit internal allocations of benefits to determine the adequacy of benefits distributed under its plan. Id. at 146. In particular, the state had subpoenaed documents and records "which look[ed] to the effect of pooling plan contributions to benefit not only public workers but also private workers or public workers on private projects." Id. at 150. "[T]he subpoenas sought to uncover whether employers were diminishing the prevailing wage protections for public projects by spreading the benefits over hours worked on private projects." Id.

The plaintiff in that case had chosen to satisfy its fringe benefit obligations by contributing to a pooled ERISA trust4, similar to the CBT. There, as here, the plaintiff claimed that the state's inquiry under Section 220 improperly focused on the internal allocation and adequacy of benefits provided by the trust, an examination that plaintiff argued was preempted by ERISA. The Second Circuit rejected this argument, holding that the state's method of enforcement only indirectly affected ERISA plans. Id. at 151. Specifically, the Circuit held that the state was not mandating a particular structure for ERISA plans, did not require plans to exclude participants who performed work on private projects, and did not mandate a particular method of administrating the ERISA plan. Id. To the contrary, employers remained free to satisfy their prevailing wage obligations through any combination of contributions to ERISA plans, contributions to non-ERISA plans, or cash payments. Id. In fact, even noting that New York's enforcement methods eliminated incentives for employers to pool supplement contributions among public and private workers, the court held that "ERISA does not preempt a law that uses economic incentives in this way. Id. (citing California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 32 (1997)). See also Burgio & Campofelice, Inc. v. New York State Dep't of Labor, 107 F.3d 1000, 1009 (2d Cir. 1997) (holding, in relation to Section 220, "[w]here a legal requirement may be easily satisfied through means unconnected to ERISA plans, and only relates to ERISA plans at the election of an employer, it affects employee benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that the law 'relates to' the plan"); Minnesota Chapter of Associated Builders & Contractors, Inc. v. Minnesota Dep't of Labor & Indus., 47 F.3d 975 (8th Cir. 1995) (prevailing wage law not preempted by ERISA where it did not require employer to provide any level of benefit and only affected benefit plans to the extent that the employer chose to include benefits as part of the wage); Keystone Chapter, Associated Builders & Contractors, Inc. v. Foley, 37 F.3d 945 (3d Cir. 1994) (ERISA did not preempt state prevailing wage law where the law did not single out ERISA plans for special treatment or even refer to such plans, and in the absence of ERISA, the wage law could be meaningfully applied).

That is the case here as well. There is no essential conflict between ERISA and the government's enforcement of the prevailing wage laws. The indictment does not, as Coren contends, suggest that the structure of the CBT is illegal, or that, standing alone, the use of a trust, like the CBT, to pay benefits to nonprevailing wage workers violates prevailing wage laws. Rather, the indictment charges that, on the advice, counsel and with the assistance of Coren, Coren's client-contractors defrauded government agencies by falsely claiming credit for paying their public workers the prevailing wage for work performed on public contracts. The CBT is only relevant to the extent that it was developed by Coren as part of the alleged scheme to defraud those agencies into giving prevailing wage credit, and thus awarding construction contracts, to his clients, who would fail to pay the prevailing wage. Had Coren's contractor-clients used the CBT in the manner alleged as a pooled trust, i.e., accepting only contributions from prevailing wage workers while providing benefits to nonprevailing wage workers and prevailing wage workers alike, but adjusted the amount of prevailing wage credit they claimed accordingly, there would be no fraud, and, consequently, no crime. It is, however, the contractors' alleged use of the CBT, on the advice and counsel of Coren, to give the appearance to government agencies that the employers were paying prevailing wages, while instead effectively using the money to pay other expenses, such as benefits for nonprevailing wage workers, that makes out the crimes charged. Stated differently, the mediacy of an ERISA-qualified trust to accomplish this illegal objective and full compliance with ERISA provide no safe harbor. See HMI, 266 F.3d at 151.

Indeed, Coren himself acknowledged the proper interplay of ERISA and the prevailing wage laws in his reply memorandum of law at pages 4-5:

[The government] goes to great pains to argue that ERISA does not pre-empt all state prevailing wage laws. This is true only to the extent that the prevailing wage law does not impact upon the operation or administration of an ERISA plan. State governments are free to determine how much credit to give ERISA plan contributions for purposes of their prevailing wage laws without implicating ERISA pre-emption. Similarly, the federal government routinely enforces Davis-Bacon by restricting the amount of credit it permits an employer to take for contributions to a benefit plan. If the contributions or benefits under that plan do not qualify for Davis-Bacon credit, the employer is not entitled to credit, and must comply with Davis-Bacon in some other fashion. This is the only way to reconcile the requirements of Davis-Bacon and ERISA.

Precisely.

Due Process

Coren argues, in the alternative, that the indictment should be dismissed on the ground that, as applied, the statute is unconstitutionally vague. Of course, fundamental principles of constitutional fair warning mandate "that no individual be forced to speculate, at peril of indictment, whether his conduct is prohibited." Dunn v. United States, 442 U.S. 100, 112 (1979). One manifestation of that principle is the void-for-vagueness doctrine, which "requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." Kolender v. Lawson, 461 U.S. 352, 357 (1983); see also United States v. Dauray, 215 F.3d 257, 264 (2d Cir. 2000) ("Due process requires that a criminal statute 'give fair warning of the conduct that it makes a crime.'" (quoting Bouie v. City of Columbia, 378 U.S. 347, 350-51 (1964))). "The touchstone inquiry is 'whether the statute, either standing alone or as construed, made it reasonably clear at the relevant time that the defendant's conduct was criminal.'" United States v. Velastegui, 199 F.3d 590, 593 (2d Cir. 1999) (quoting United States v. Lanier, 520 U.S. 259, 266 (2005)).

The rule of lenity, another manifestation of the principle of due process, "ensures fair warning by so resolving ambiguity in a criminal statute as to apply it only to conduct clearly covered . . . . [A]lthough clarity at the requisite level may be supplied by judicial gloss on an otherwise uncertain statute, due process bars courts from applying a novel construction of a criminal statute to conduct that neither the statute nor any prior judicial decision has fairly disclosed to be within its scope." Lanier, 520 U.S. at 266 (internal citations omitted). "Because the meaning of language is inherently contextual," however, the Supreme Court has "declined to deem a statute 'ambiguous' for purposes of lenity merely because it was possible to articulate a construction more narrow than that urged by the Government." Moskal v. United States, 498 U.S. 103, 108 (1990) (emphasis in original). The rule "applies only when, after consulting traditional canons of statutory construction, we are left with an ambiguous statute." United States v. Shabani, 513 U.S. 10, 17 (1994). Where such an ambiguity does exist, the rule of lenity requires that "a court should resolve [the] ambiguity in favor of the defendant." United States v. Polizzi, 549 F. Supp. 2d 308, 377 (E.D.N.Y. 2008).5 Finally, it is well established that vagueness challenges other than in the First Amendment context "must be examined in light of the facts of the case, on an as-applied basis." United States v. Whittaker, 999 F.2d 38, 42 (2d Cir. 1993) (quotation omitted); see also United States v. Mazurie, 419 U.S. 544, 550 (1997).

Here, Coren does not argue that the mail and wire fraud statutes are themselves unconstitutionally vague. Rather, Coren contends that, as applied to this case, the mail and wire fraud charges incorporate provisions from Davis-Bacon and Little Davis-Bacon which lack the precision of criminal code. Specifically, Coren claims that the prevailing wage statutes' lack of guidance on the necessary relationship between funds deposited into a trust account, such as the CBT, and benefits paid from the account in order to claim prevailing wage credit, preclude the imposition of criminal liability. The government responds that this is not a case about unintentional misunderstandings regarding the necessary relationship between deposits to and benefits from the CBT. Rather, it notes, Coren is charged with devising a scheme to intentionally falsify credits to state and federal agencies by establishing the CBT and advising his client-contractors to use the CBT to give the appearance of compliance with prevailing wage obligations. Moreover, the government urges that the relevant prevailing wage laws are neither uncertain nor complex, and that no contractor or attorney would miscomprehend that full prevailing wage credits could not be taken knowing that the money owed in supplemental wages would not be used to benefit the workers entitled to them.

This branch of Coren's motion fails as well. The mail and wire fraud statutes, as applied to the facts alleged in the indictment, are not unconstitutionally vague. Specifically, the mail fraud statute requires the government to show that a defendant devised a scheme to defraud the alleged victim of money, and used the mail to execute the scheme. The wire fraud statute requires the same for schemes in which the wire is used. Though Coren is correct that, at least to the Court's knowledge, this is the first criminal case of its kind, but for every kind of crime there is always an inaugural charge. What is critical and dispositive here is the abundance of authority which patently establishes that the conduct alleged in this inaugural charge is prohibited. The relevant prevailing wage laws, the regulations implementing those laws, as well as caselaw all make clear that, in order to take credit for payments to prevailing wage workers, there must be, at a minimum, a reasonable relationship between the credit taken and the benefit received by the prevailing wage workers for whom the credit is taken.

As an initial matter, the texts of Davis-Bacon and Section 220 make plain that contributions to a trust, for which prevailing wage credit is claimed, must be related to a benefit received by the prevailing wage worker for their work on public projects. As we have seen, prevailing supplement wages may be paid to worker beneficiaries in a number of ways, including through an ERISA-qualified trust, but "all supplements due under [the prevailing wage laws] shall be paid to or on behalf of an employee." See Section 220(3)(e) (emphasis added). And, to that end, employers working on prevailing wage projects must submit a statement of compliance, certifying "[t]hat each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed." 29 C.F.R. 5.5(a)(3) (emphasis added). Beyond quibble, any reasonable reading of the statutes informs an employer that it may only claim prevailing wage credit for contributions to a trust where there is a nexus between the payment made and a benefit to be actually received by the worker or class of workers on whose behalf prevailing wage credit is taken. Cf., Velastegui, 199 F.3d at 593.

Indeed, legislative history and interpretive caselaw further illuminate this requirement. As the Supreme Court has noted, the primary purpose of such prevailing wage laws is to protect construction workers "from substandard earnings by fixing a floor under wages on Government projects." Walsh v. E.A. Schlecht, 429 U.S. 401, 411 (1977) (quoting United States v. Binghamton Constr. Co., 347 U.S. 171, 176-77 (1954)); see Beltron Constr. Co. v. McGowan, 260 A.D.2d 870, 871-72, 688 N.Y.S.2d 783,785 (3d Dep't 1999) ("Labor Law §220 was enacted to ensure that employees on public works projects are paid wages equivalent to the prevailing rate of similarly employed workers in the locality where the contract is to be performed.") see also Chesterfield Assoc. v. New York States Dep't of Labor, 4 N.Y.3d 597, 830 N.E.2d 287, 797 N.Y.S.2d 389 (2005) (holding that prevailing wage laws also serve to level the playing field among contractors and to prevent underbidding). Clearly, it is the intent of Davis-Bacon to "restrict severely the occasions when prevailing wages may be returned to contractors and to prohibit the use of deductions from employee wages to profit or benefit contractors." Int'l Brotherhood of Electrical Workers, Local 357, AFL-CIO v. Brock, 68 F.3d 1194, 1201 (9th Cir. 1995). Further, it matters not whether hourly wages or supplement wages are in issue; the fringe benefits provided for in the Act "constitute an integral part" of an employee's wage. S. Rep. No. 963, 88th Cong., 2d Sess. (1964), reprinted in 1964 U.S. Code Cong. & Admin. News 2339, 2340. Moreover, with regard to funded plans, the legislative history elaborates that contributions made in this manner

. . . must be irrevocable and they must be made pursuant to a fund, plan, or program. While it was not the desire of the committee to impose specific standards relating to the administration of the plans it is expected that the majority of plans of this nature will be those which are administered in accordance with the requirements of section 302(c)(5) of the National Labor Relations Act, as amended. Among other things, therefore, the contributions would have to be placed with a trustee or third person who could not later be required to return them to the contractor or subcontractor making the contributions. This will help insure the bona fides of the plan, fund, or program, and protect and preserve the interest of the beneficiaries in them. The phrase "plan, fund, or program" is merely intended to recognize the various types of arrangements commonly used to provide fringe benefits through employer contributions.

Id. at 2343-44. A "bona fide" plan, therefore, must be one where the funds contributed to the trust are being used to cover an employer's expenses related to the wages required to be paid prevailing wage workers. If an employer could make contributions to a fringe benefit plan that were not reasonably related to the benefits actually received by such an employee, the prevailing wage statutes would have no effect: employers would incur no or little cost with respect to these employees and the covered class of employees will not receive the appropriate full "wage". The plain meaning of these words dictates this most uncomplicated understanding.6

Although Coren is correct that the issue of an employer's satisfaction of its obligations under Davis-Bacon as Coren's clients claimed they did is one of first impression in this Circuit, more than the plain meaning of words should have provided him guidance in advance. In Miree Construction Corporation v. Dole, 930 F.2d 1536 (11th Cir. 1991), the Eleventh Circuit, reviewing de novo a decision of the Wage Appeals Board considered an employer's obligations under Davis-Bacon. There, the Court held, unequivocally, that "an employer may only receive Davis-Bacon credit for contributions that are reasonably related to the [benefit conferred on the employee]." Id. at 1543 (emphasis added). As explained by the Miree court: The Davis-Bacon Act "was not enacted to benefit contractors, but rather to protect their employees from substandard earnings . . . . If an employer could make contributions to a fringe benefit plan that were not reasonably related to the benefits actually received by the employee, the employee would not receive an appropriate 'wage' as contemplated by the Act." Id.; see also Chesterfield 4 N.Y.3d at 604-05, 830 N.E.2d at 292 ("Because Chesterfield contributed to the profit-sharing plan not only for its employees' public work but also for their private work, however, there was room for shifting costs on paper to overstate its payments on behalf of public hours, which would have bestowed an unfair competitive advantage on Chesterfield and denied its employees the full value of the supplements to which they were entitled. To protect against this potential cost shifting, the Commissioner chose to average Chesterfield's contributions over all work, both public and private, to which pension benefits might be related. This resulted in a proportionate credit to offset Chesterfield's supplement obligations. We cannot say that the Commissioner acted unreasonably or irrationally in taking this approach under the circumstances of this case.")

Further, contrary to Coren's argument, the D.C. Circuit's decision in Tom Mistick & Sons, Inc. v. Reich, 54 F.3d 900 (1995), does not provide conflicting authority. In Mistick, the employer elected to pay the fringe benefit portion of the prevailing wage by contributing funds into separate interest-bearing trust accounts for each employee who performed Davis-Bacon work. The Department of Labor, applying Miree, found that the employer had failed to pay the prevailing wage under the reasonable relationship test, because the employer, Mistick, did not show that its contributions to its benefits plan was reasonably related to the cost of providing fringe benefits to its prevailing wage employees and that disbursements were made for non-bona fide benefits. The court of appeals disagreed. Specifically, the court held that the reasonable relationship test could not be applied to find noncompliance because prevailing wage workers were the sole benefactors of their individual trust accounts, and, further, there was no evidence that the benefits being distributed to those workers were for work on nonprevailing wage jobs. In such a circumstance, Mistick held that "[t]he one-to-one ratio between employer contributions on behalf of an employee and value received by the employee cannot be deemed unreasonable." Id. at 704. Thus, Mistick did not reject the reasonable relationship test advanced in Miree, but rather found that, given the facts of Mistick, as a matter of law, the benefits plan adopted by the employer could not be deemed unreasonable.7

Additionally, as the government points out, opinion letters published by the Department of Labor, support the same common sense interpretation:

Contrary to the defendant's assertions [] contributions for prevailing wage fringe benefits must, in fact, be made on behalf of, and calculated with respect to, each and every laborer . . . .

When an employer makes a contribution to a trust that will not be used to purchase a benefit for that particular employee, no cost is incurred 'with respect to' that employee, and no credit is due under prevailing-wage law. It costs the employer exactly nothing to provide no benefits to an employee, and as the U.S. Department of Labor made clear in an opinion letter, "it should be kept in mind that if the employer's cost (i.e. the employer's contribution) of providing this benefit does not equal the cost per hour for each individual employee[] set forth in the applicable wage determination, the employer must provide the difference in cash payments to the employees for all hours spend on covered work." Opinion Letter, W&H, DBRA-144 (1973).

Furthermore, contributions made on behalf of one prevailing wage worker cannot be used to purchase benefits for another prevailing wage worker, let alone an employee or owner of the company who does not earn the prevailing wage. See Opinion Letter, W&H, DBRA-459 (1978) ("Just as the Department does not recognize a cash payment to one employee as meeting the employer's obligation to pay the prevailing wage rate to a second employee, neither does the Department recognize a fringe contribution on behalf of one employee as meeting the requirement to pay the prevailing wage to a second employee.").

(Gov't Br. at 16.) It is a point the Court accepts.

Finally, no one can contest that the failure to pay prevailing wages has been the subject of past criminal prosecutions for making false statements and for fraud. See United States v. Gotti, 42 F. Supp. 2d 252 (S.D.N.Y. 1999) (defendant charged with mail fraud in connection with concealing co-defendant's presence on a construction project and failing to pay him the prevailing wage); United States v. Shareef, 190 F.3d 71 (2d Cir. 1999) (conviction for failing to pay laborers the prevailing wage rate by means of conduct that violated the Hobbs Act); United States v. Andrews, 88 Fed. Appx. 903 (6th Cir. 2004) (conviction for false statements to the Department of Labor regarding underpayment of prevailing wages). All that is novel here is the alleged mechanism of the scheme, not the criminal objective.

Taken together, the plain meaning of the language of the statute, its legislative history, regulatory clarifications and related interpretive caselaw gave more than fair warning that conduct such as charged here is criminal - prevailing wage credit cannot be claimed where it is intended beforehand that the workers on whose behalf the credit is taken will be ineligible to share the benefit. As applied, Davis-Bacon and Section 220 do not appear vague given the charges are grounded upon Coren's alleged participation in devising and executing such a scheme to defraud federal and state agencies by intentionally claiming false prevailing wage credits for corresponding deposits made to the CBT. Whether the government can prove all that it alleges beyond a reasonable doubt, of course, is a matter for trial. What the indictment alleges, however, is enough to withstand Coren's constitutional challenge by motion before trial.

Did the indictment Properly Charge Coren's Participation in the Alleged Fraud

Lastly, Coren argues that, even assuming arguendo the conduct of his client-contractors violated the prevailing wage laws, he cannot be held criminally liable because he did not advise his clients as to the propriety of any prevailing supplemental wage credit they claimed. According to Coren, determining the amount of prevailing wage credit that can be claimed by a contractor is an accounting function performed by the contractors, and outside his bailiwick as counsel or CBT trustee.

The indictment, of course, does not claim he did it alone. It charges Coren as an aider and abettor of his clients' alleged prevailing wage law crimes. In order to prove that he took part in the contractors' crimes, the government must demonstrate that the underlying crime was committed by the contractors and that Coren acted with the "specific purpose" of bringing about that crime. See United States v. Best, 219 F.3d 192, 199 (2d Cir. 2000); see also United States v. Pipola, 83 F.3d 556, 562 (2d Cir. 1996) ("to show specific intent [to aid and abet] the prosecution must prove the defendant knew of the proposed crime . . . and had an interest in furthering it"); United States v. Wiley, 846 F.2d 150, 154 (2d Cir. 1988) (finding that aiding and abetting requires the "specific intent that [the defendant's] act or omission bring about the underlying crime). More dispositively, on this motion, the question is only whether the indictment alleges sufficient facts to support such charges. While Coren's involvement in the contractors' fraud will undoubtedly be the issue for trial, the indictment clearly alleges that Coren devised the CBT with the specific intent to help contractors shirk their prevailing wage obligations and divert money that should have been spent on benefits for prevailing wage workers back into their own pockets. That is enough.

Coren's last hope collateral attack fails too. The government's concession that Coren, as trustee, committed no ERISA violation cannot serve as a deus ex machina to short-circuit prosecution. Coren was not, as he claims, caught in the "Catch-22" of having to choose between compliance with his duties as trustee under ERISA and compliance with Davis-Bacon. Here again, Coren fundamentally misconstrues the allegations of the indictment. Coren is not charged with violating prevailing wage law owing to his function as the creator and/or trustee of the CBT. He is charged with advising and counseling his client-contractors to overstate their prevailing wage payments to their state and federal contracting partners. Whatever the status of a hypothetical ERISA trustee who unwittingly assists employer-trust contributors in avoiding their prevailing wage obligations, those are not the facts alleged in this indictment.8

Conclusion

Accordingly, for all these reasons, Coren's motion to dismiss the indictment is denied in its entirety.

SO ORDERED.

1. Specifically, Davis-Bacon provides as follows:

Wages, scale of wages, wage rates, minimum wages, and prevailing wages. - The terms "wages", "scale of wages", "wage rates", "minimum wages", and "prevailing wages" include -

(A) the basic hourly rate of pay; and

(B) for medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the forgoing, for unemployment benefits, life insurance, disability and sickness insurance, or accident insurance, for vacation and holiday pay, for defraying the costs of apprenticeship or other similar programs, or for other bona fide fringe benefits, but only where the contractor or subcontractor is not required by other federal, state, or local law to provide any of those benefits, the amount of -

(i) the rate of contribution irrevocably made by a contractor or subcontractor to a trustee or to a third person under a fund, plan, or program; and

(ii) the rate of costs to the contractor or subcontractor that may be reasonably anticipated in providing benefits to laborers and mechanics pursuant to an enforceable commitment to carry out a financially responsible plan or program which was communicated in writing to the laborers and mechanics affected.

40 U.S.C. §3141(2).

2. Because Davis-Bacon and Section 220 contain virtually identical requirements, the Court will hereinafter use "prevailing wage" to refer to the requirements of both statutes. The Court will likewise use "fringe benefit wage" to refer both to fringe benefits defined by Davis-Bacon and supplements defined by Section 220.

3. Under the principle of annualization, an employer calculates the hourly cash equivalent fringe benefits that contractors paid by dividing that actual cash value of the employer's contribution by the total number of hours employees worked annually on both public and private jobs. See infra note 6.

4. A pooled trust, the court explained, is one which provides benefits to prevailing wage workers both during periods when they work on prevailing wage jobs and during periods when they work on private jobs, as well as to nonprevailing wage workers.

5. Despite chatter to the contrary in certain academic circles, reports of the rule's demise have been greatly exaggerated. See, e.g., United States v. Santos, ___ U.S. ___, 128 S.Ct. 2020 (2008) (applying rule of lenity to undefined term in federal money laundering statute); see also Note, The New Rule of Lenity, 119 Harv. L. Rev. 2420, 2421 (2006) (though criticized in recent years, rule of lenity neither "defunct" nor "randomly applied").

6. Further support for this common sense interpretation can be found in the principle of annualization, utilized both under Davis-Bacon and Section 220. Through annualization, as explained in HMI, an employer who contributes to a pooled trust, that is, covering benefits distributed also to nonprevailing wage workers or prevailing wage workers on nonprevailing wage jobs, must calculate the prevailing wage credits available by dividing the actual cash value of the fringe benefit contributions by the number of total hours employees worked annually on both public and private jobs. HMI, 166 F.3d at 145. In that way, agencies ensure that prevailing wage workers are not underpaid, because the employer cannot dilute the supplements due to each public work employee by spreading the benefits out to cover both public and private work. Id. Wage underpayment is exactly what is alleged here.

7. Here, by contrast, it is alleged - and must be accepted as true on this motion - that nonprevailing wage workers were receiving benefits from the CBT, whose contributions were solely made up from funds for which credit on prevailing wage obligations had been paid. Indeed, this case represents the exact opposite situation as that present in Mistick - here, the indictment alleges that prevailing wage employees were being underpaid, as nonprevailing wage workers were receiving benefits paid for exclusively by contributions credited as the payment of fringe benefit wages owed on prevailing wage work.

8. Also, Coren essentially attacks the obstruction of justice charge in count 17 as a derivative of his forecasted success in his attack on the substantive counts that precede it. Since that attack has failed, the challenge asserted against count 17 is academic and the motion to dismiss it is denied.

Ex-FBI Agent Faces Murder Trial; Another: IRS Surrogate Court Probe

IRS Looking at Westchester Surrogate Judge Scarpino Link with Bank Chairman and Lawyer (CLICK HERE)

and

Ex-FBI Agent Faces Trial in 1982 Murder - Boston Mob Handler Is Charged in Fla.
The Associated Press by Curt Anderson - September 7, 2008

MIAMI -- John J. Connolly was hundreds of miles away in 1982 when gambling executive John Callahan's bullet-riddled body was discovered in the trunk of his Cadillac at Miami's airport. The admitted shooter said he never met Connolly, the disgraced ex-FBI man at the heart of the agency's sordid dealings with Boston's Winter Hill Gang. Yet Connolly will stand trial on murder and conspiracy charges this month as if he had pulled the trigger himself, because prosecutors say he secretly gave information that was crucial in setting up the hit. Jury selection is to begin Monday in Connolly's trial, which figures to rehash some of the ugliest episodes in the Boston FBI's handling of the gang, once led by James J. "Whitey" Bulger and convicted killer Stephen "the Rifleman" Flemmi. For years, both were top FBI informants on rival Italian mobsters. Connolly was their handler, and he made sure they were shielded from prosecution for murder and many other crimes. That eventually sent him to federal prison on a racketeering conviction.

A congressional investigation concluded in 2003 that the FBI's relationship with Bulger and his cohorts "must be considered one of the greatest failures in the history of federal law enforcement." The Callahan slaying is part of that history, detailed in numerous court documents, interviews and investigative reports. Callahan was president of World Jai Alai, purchased in the late 1970s by Roger Wheeler, a businessman from Tulsa, who liked the fact that former Boston FBI agent Paul Rico was part of the security team. Wheeler came to suspect that Callahan was skimming profits from World Jai Alai for the Winter Hill Gang. He fired Callahan and ordered an audit. On May 27, 1981, Wheeler was shot between the eyes at a Tulsa country club by hit man John V. Martorano, who has admitted in court to 20 murders.

Callahan was targeted next because Bulger and Flemmi feared he would finger them for Wheeler's killing. Martorano pleaded guilty in 2001 to shooting Callahan and, with the help of an associate, stuffing his body into the trunk of Callahan's silver Cadillac. Rico, Connolly's former FBI colleague, was eventually charged in Wheeler's murder, but he died in 2004 before going to trial. A little over a year later, Connolly was indicted by a Miami-Dade County grand jury in Callahan's killing. A conviction would mean a life prison sentence. Connolly, 68, is already serving a 10-year federal prison stretch for racketeering and other charges from his associations with Bulger and his gang, including tipping off his former informant about an impending 1995 indictment. Bulger fled before he could be arrested and remains a fugitive, a fixture on the FBI's Ten Most Wanted list. The federal jury that convicted Connolly in 2002 rejected evidence of his involvement in the Callahan killing, although the charge then was obstruction of justice. Connolly's lawyer, Manuel Casabielle, said little new has surfaced in the years since. "The reason you haven't seen much connecting John to the Callahan murder is because there isn't much. It isn't there," Casabielle said. But prosecutor Michael Von Zamft said the state is confident in its case, even with key witnesses of questionable repute.

Buffalo News: Prison Likely for Former Judge Pimp

Former judge Tills faces likely prison term after admitting he recruited prostitutes Guilty plea may net 21 month sentence
The Buffalo News by Dan Herbeck - September 6, 2008

Former Judge Tills pleads guilty in prostitution case, faces 21 months in prison
Former Judge Tills resigns amid FBI prostitution investigation
Judge Tills traveled with woman he jailed on prostitution charge
Two Erie County deputies added to Jesters prostitution investigation
Lawyer in Jesters case pleads guilty to transporting prostitute illegally

Ronald H. Tills had the reputation as one of the toughest sentencing judges in Western New York during his 10 years as a State Supreme Court judge. But it turns out that, while the judge was throwing the book at others, he was engaging in felony crimes himself. And now Tills is looking at jail time — possibly 21 months or more — after taking a plea deal Thursday before U. S. District Judge William M. Skretny. An embarrassed-looking Tills, 73, admitted Thursday that he recruited prostitutes for events sponsored by a nationwide fraternal men’s club called the Royal Order of Jesters. The Hamburg resident pleaded guilty to a felony violation of the federal Mann Act, which prohibits transporting people across state lines for the purposes of prostitution. At least some of Tills’ illegal activities took place during his tenure as a state judge, which ended at the conclusion of 2005, according to court papers filed by the U. S. Attorney’s office.

Tills admitted the following:

• He was responsible for recruiting out-of-state prostitutes to work a Jesters meeting in Dunkirk “in or about September 2001,” while serving as director of the Buffalo chapter of the Jesters.
• He recruited an illegal alien prostitute from a North Tonawanda massage parlor to service men at a Jesters event in Kentucky in October 2005.
• He arranged for transporting prostitutes from Buffalo Niagara International Airport to a national Jesters meeting in Niagara Falls, Ont., in the spring of 2006.

Several infractions

• He recruited a woman from the same massage parlor to work as a prostitute at a Jesters gathering in Pennsylvania sometime in the fall of 2006. He also arranged for a Buffalo-area prostitute to travel to Florida for a Jesters event.
• He arranged for prostitutes from three different states to service a Jesters meeting in Brantford, Ont., in October 2007.

Tills is ashamed of his actions and takes full responsibility for them, said the former judge’s attorney, Terrence M. Connors. “He admitted in court that he committed a crime, his conduct was wrong and his judgment was horrible,” Connors said Thursday. “Privately, he has told me he has no one to blame but himself. He understands there will be serious consequences, and he’s prepared to deal with them.” Tills, who will be sentenced Jan. 12, had no comment after his court appearance Thursday. Will the former judge get prison time for his actions? Connors declined to speculate, but under advisory sentencing guidelines, prison time appears likely.

Judge has latitude

Skretny indicated that Tills faces a probable prison term of at least 21 months. Because the sentencing guidelines are advisory, Skretny could determine that Tills deserves a longer term, or possibly a shorter one, including home confinement or probation. Skretny also said that, in part, Tills’ sentence will be based on how helpful he is to federal agents as they continue their investigation into the Jesters’ involvement in human trafficking and prostitution. Skretny said Tills has agreed to provide “proactive cooperation” in the ongoing probe. Federal agents believe that Buffalo was not the only Jesters chapter involved in transporting prostitutes across state lines, according to court papers filed by Assistant U. S. Attorney Robert C. Moscati. “This organization maintained chapters throughout the United States, including in Western New York, and it was the custom of these chapters to host periodic meetings, usually on weekends, for their members,” Moscati stated.

Liaisons were common

“At most of these meetings, some members of the organization would be tasked to arrange the presence of women at the meeting, for the specific purpose of utilizing the women to engage in sexual intercourse and other sexual activity with the organization’s members in exchange for money.” The Jesters have more than 23,000 members, including prominent businessmen, court officials and government office holders. In order to join the Jesters, a man must also be a member of the Masons and the Shriners. The Jesters’ motto is “Mirth is king.” The Buffalo News first reported in March that Tills and other Buffalo Jesters were under investigation for allegedly hiring prostitutes for events and transporting them over state lines. Tills’ law clerk, Michael Stebick, and former Lockport police captain John Trowbridge previously pleaded guilty to charges from the investigation. All three agreed to cooperate in the ongoing investigation.

Agents from a human trafficking task force in Buffalo are working on the case. The task force includes investigators from the FBI, U. S. Border Patrol, the Erie County Sheriff’s Office, U. S. Immigration & Customs Enforcement and other agencies. Prosecutors said they learned about the Jesters’ involvement while investigating prostitution and human trafficking crimes associated with massage parlors in Niagara and Erie counties. Alex Rogers, national business manager of the Jesters, said from Indianapolis Thursday he was unaware of Tills’ plea agreement and could not comment on it. But Rogers said the Jesters as an organization do not condone or authorize the hiring of prostitutes at events. “There may be certain individuals out there doing that, but not as an organization,” Rogers said. dherbeck@buffnews.com