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Bergman v. Lefkowitz

decided as amended.: December 19, 1977.


Appeal from an order of the District Court for the Southern District of New York, Gerard L. Goettel, Judge, denying a petition for habeas corpus based on the state prosecutor's alleged breach of a plea agreement. Affirmed.

Friendly, Hays and Mansfield, Circuit Judges.

Author: Friendly

FRIENDLY, Circuit Judge:

Bernard Bergman, who had been a prominent figure in the New York nursing home industry, petitioned the District Court for the Southern District of New York for habeas corpus relief from a sentence of one year's imprisonment, consecutive to a previous four months' federal sentence, imposed by a New York state judge on a plea of guilty to making unlawful payments to a state legislator in violation of § 77 of the New York Public Officers Law. He contended that the Special State Prosecutor for Health and Social Services had breached a plea agreement and that he was therefore entitled to relief under Santobello v. New York, 404 U.S. 257, 30 L. Ed. 2d 427, 92 S. Ct. 495 (1971). After an extensive hearing before Judge Goettel wherein Bergman's counsel was permitted to explore every highway and byway,*fn1 the court denied the petition, and Bergman has appealed. Despite the vehemence of the attack on the trial judge's decision, we affirm.

The Facts

The facts are stated in detail in Judge Goettel's comprehensive opinion, and we shall limit ourselves to what seem to us to be the essential points. As a result of various New York investigations of nursing homes,*fn2 the State created a Special State Prosecutor for Health and Social Services. Charles J. Hynes, Esq., became the Special Prosecutor. Grand jury investigations of Bergman were begun both by Mr. Hynes and by the United States Attorney for the Southern District of New York. Both grand juries indicted Bergman and his son on August 5, 1975, the federal grand jury on three counts involving the filing of false tax returns, three counts of submitting false Medicaid claims, four counts involving fraudulent statements to the Federal Government, and one count of conspiracy to defraud the Government and commit the offenses stated above, the New York grand jury on one count of conspiracy, four counts of filing fraudulent reimbursement claims, four counts of larceny, and one count of obstruction of governmental administration. Extended negotiations with the two prosecutors led to plea agreements, evidenced in separate letters dated March 4 and 8, 1976. The letter of the Special Prosecutor is reproduced in full in the margin;*fn3 paragraphs 4 and 8 are of particular importance to this appeal. The letter of the United States Attorney conformed mutatis mutandis.

On March 11, 1976, Justice Aloysius J. Melia, in the Supreme Court for New York County, accepted Bergman's plea of guilty to a later state indictment charging him with making unlawful payments to a state legislator in violation of § 77 of the Public Officers Law. He explained to Bergman, as he had earlier done to counsel in chambers, that while he ordinarily accepted a prosecutor's recommendation for less than the maximum sentence and saw no reason "at this point in time to believe that I would not do so here," he wanted "it to be very clear to you that on this plea of guilty you could be sentenced to serve up to four years regardless of what sentence is imposed in the Federal Court."*fn4 Not until Bergman thrice acknowledged that he understood this was the guilty plea accepted. On the same day the plea bargain was presented to Judge Frankel in the federal court and the guilty plea was accepted there. Bergman read a written statement in which he admitted knowing that his accountant was withdrawing money from Towers Nursing Home and paying it to his own account; that false information was being given to the Department of Health which got Towers a higher rating than it deserved; that a salary was being paid to Bergman's wife, for which she performed no work; that interest charges for real estate entities in which Bergman had an interest were improperly submitted to the Health Department as costs of Towers; and that he sold partnership interests in Towers to certain persons, caused them to be made partners of a company performing cleaning services for Towers, and failed to disclose the facts of the relationship in his tax returns.

A dispute shortly arose between Bergman and the Special Prosecutor concerning paragraph 8 of the plea bargain, relating to restitution. The Special Prosecutor in May 1975 claimed that Bergman's liability was at least $2,500,000. Bergman attacked that figure, but did not present one himself until criticized by Judge Frankel for the omission on June 10. Four days later defense counsel submitted materials that placed Bergman's liability at only $363,877. Further, the Special Prosecutor insisted that the amount be determined and paid prior to sentencing; Bergman's counsel favored sentence first and payment later. Although the plea bargain was not as specific about this as it should have been, common sense would dictate in favor of the Special Prosecutor's construction that restitution should be provided for, at least before sentencing in the state court; Bergman would have had little incentive to make restitution once he had served his sentence and the prosecutors had carried out the rest of the plea bargain.*fn5 This dispute was brought to the attention of both judges during June. Justice Melia indicated that he would not be prepared to sentence until the differences with respect to restitution were resolved or a machinery for their resolution was established. Any interval between the federal and the state sentencing was a subject of concern to defense counsel.*fn6 When the parties applied for a postponement of the federal sentencing corresponding to any delay in the state sentencing, Judge Frankel declined on the basis that sentencing had already been delayed too long. He noted later that he regarded the restitution problem as a matter solely of state concern and that he would proceed on the assumption that no additional sentence would be imposed by the state court.*fn7

On June 17, 1976, Judge Frankel sentenced Bergman to four months' imprisonment. Bergman distributed to the press on the courthouse steps a prepared statement saying that "Irrespective of whether today's sentencing decisions are resolved favorably or not, I am relieved that this ordeal of more than 1 and 1/2 years is over. It is finally time that the air is cleared and that the truth emerges," and that, "Approximately 99% of the amount charged in the indictments and in other demands made by the Prosecutors concerned matters which I knew nothing about. They were entirely the account[ant]'s own overaccruals and misclassifications." Counsel then returned to Justice Melia. Despite the Justice's statements on June 15 and 16 that he would not sentence while the restitution controversy remained unresolved, Bergman's attorney asked him to do so.*fn8 Justice Melia again refused. He repeated that he had no commitment to follow the Special Prosecutor's recommendations and emphasized that the people were entitled to know "how much money is due and owing to them from these Medicare discrepancies" and "to be paid back that money." He adjourned the sentencing to July 2, 1976. On leaving the state court Hynes answered some questions from reporters and said he would make a formal press statement in his office later in the day. We quote this in full in the margin.*fn9 This statement was reported both on radio and television and in the press, and we have no doubt that Justice Melia became aware of it.

As found by the district judge, "Public response to the sentence was immediate, substantial and generally adverse." The negative response was predictable in view of the widespread publicity concerning grave abuses in nursing homes, see note 2 supra, and was doubtless accentuated by the sentence having followed upon another federal judge's imposition of a suspended sentence, with confinement only on weeknights, on Eugene Hollander, another nursing home proprietor who had figured prominently in the state investigations. The New York Times, which printed a balanced news account along with excerpts from Judge Frankel's sentencing memorandum and the full text of Hynes' press statement, also published an editorial which opined that the sentence made "the odds on white-collar crime look rather good" and could "only reinforce cynicism about the realities of equal justice under law." The New York Post, paying deserved tribute to Judge Frankel as "a thoughtful, conscientious judge," was concerned whether the Hollander and Bergman sentences established "any serious deterrent to new nursing home fraud." The Daily News spoke more raucously of "powder-puff treatment."*fn10 Assemblyman Stein, who had chaired one of the State investigations of nursing homes, voiced his indignation to the press and later wrote and called upon Justice Melia to urge a higher sentence; concededly the Special Prosecutor had no part in this.

On July 2, the Special Prosecutor and Bergman's counsel again appeared before Justice Melia. Mr. Hynes asked the Justice to defer the sentencing since Bergman had not fully complied with the provisions of the plea agreement relating to restitution in respect either of amount or method of payment. The amount Bergman conceded that he owed had inexplicably quadrupled from the $360,000 claimed at the proceedings in mid-June to $1,400,000 but the state was adhering to its figure of $2,500,000 at minimum and to its demand that payment be tendered before sentencing. Defense counsel agreed to submit to a binding determination of the amount due but disclaimed any obligation by Bergman to pay before sentence, which he asked to have imposed immediately. Justice Melia made an extended statement: He reiterated his amazement at learning on June 17 that "nothing had really been accomplished" with respect to restitution. In fairness to the defendant he had then deferred sentence to enable some progress to occur. Later the judge had indicated that he was agreeable to a suggestion that the amount be determined by a top accounting firm, but he had insisted that a substantial down payment be made prior to sentencing. The judge was willing to extend the date of sentencing until September to afford a further time for working out restitution but if Bergman wished to be sentenced immediately, he would proceed forthwith.

These remarks, with their evident overtone, provoked a quick reaction. Defense counsel advised the judge that he had suddenly learned that Bergman "is not feeling able to present himself to this Court in the posture he would like to, both physical and psychological reasons." He therefore joined in the Special Prosecutor's application for an adjournment. The judge was understandably puzzled why Bergman should not be ready for sentence if he was "five minutes ago." After a brief recess to permit consultation with Bergman, counsel asserted that he had been at fault in asking for immediate sentence and repeated that he now joined the Special Prosecutor's request for an adjournment. The court agreed. Justice Melia noted that he would require not only a determination of the amount but also a substantial payment and an acceptable program of payment. He made clear that this would be the last adjournment and that he was "not tied to any sentence agreement with anybody." He also revealed that Assemblyman Stein had called upon him and deplored that this had been "trumpeted to the press in advance." Sentencing was set for September 14, 1976.

On September 14 the Special Prosecutor addressed the court. He reported that, with respect to cooperation, see paragraph 5 of the plea bargain, note 3 supra, Bergman had "substantially complied and continued to comply." With respect to restitution there had been more than 30 meetings since July 2. At earlier meetings Bergman's admissions of liability rose from $1,400,000 - itself four times his original figure - to slightly more than $2,000,000. Still not satisfied, the Special Prosecutor had obtained the appointment of an accounting firm as arbitrator. "Almost immediately, the defendant agreed to repay $2.5 million . . .," now seven times his starting figure and what the State had insisted on from the beginning. Difficulties had persisted, however, on the question of the method of payment. Now, "at the eleventh hour," Bergman had complied with a suggestion of the arbitrator and had signed a confession of judgment for $2,500,000 and assigned all his assets to the State as security. The Special Prosecutor continued:

Since both items of the agreement have now been satisfied, I have the obligation to fulfill my commitment under the March 4th agreement and, your Honor, would recommend that whatever sentence you impose be a concurrent ...

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