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WEISSMAN v. UNITED STATES

December 20, 1984

MORDECAI WEISSMAN, Petitioner, against UNITED STATES OF AMERICA, Respondent.


The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

 On December 17, 1981, defendant Mordecai Weissman pleaded guilty to each count of a nine-count information charging him with conspiracy to violate 18 U.S.C. §§ 1014, 1341 and 1343, and with substantive violations thereof. He was thereafter sentenced to five years imprisonment on count one, the conspiracy count; and five years on counts two through eight and two years on count nine, to run consecutive to the sentence on count one but concurrently with each other. Weissman took no direct appeal from the judgment. The Court rejected a timely Rule 35 motion for reduction of sentence.

 Weissman now petitions pursuant to 28 U.S.C. § 2255 to vacate his judgment of conviction, or in the alternative for an evidentiary hearing. The grounds for the petition are the Court's asserted violations of Rule 11, F.R.Crim.P., when the guilty plea was accepted. Specifically, Weissman argues (main brief at 1) that "the Court did not establish a factual basis for the guilty pleas and failed to adequately demonstrate Petitioner's understanding of the charges against him."

 I.

 Rule 11, whose full present pertinent provisions appear in the margin, *fn1" "requires not only that a defendant's understanding of the nature of the charge be established before a plea of guilty may be accepted, but also that the court must satisfy itself that there is a factual basis for the plea." Seiller v. United States, 544 F.2d 554, 562 (2d Cir. 1975), citing McCarthy v. United States, 394 U.S. 459, 22 L. Ed. 2d 418, 89 S. Ct. 1166 (1969). Prior to the 1983 amendments to Rule 11, fn. 1 supra, if Rule 11 violations were demonstrated on direct appeal from the judgment, the Second Circuit read McCarthy as requiring automatic reversal and remand for another hearing at which defendant might plead anew. United States v. Journet, 544 F.2d 633 (2d Cir. 1976). *fn2"

 The rule was always different where, as here, defendant takes no direct appeal, but asserts Rule 11 violations in a habeas corpus collateral attack under § 2255. Then defendant cannot rely on "technical violation of the Rule." United States v. Timmreck, 441 U.S. 780, 784, 60 L. Ed. 2d 634, 99 S. Ct. 2085 (1979). He must allege and at least produce credible evidence of "actual prejudice." United States v. Horsley, 599 F.2d 1265, 1269 n.4 (3rd Cir. 1979) (en banc), cited in Godwin v. United States, 687 F.2d 585, 591 (2d Cir. 1982). See also Alessi v. United States, 593 F.2d 476, 481-82 (2d Cir. 1979). Such prejudice would be established if in fact defendant did not understand the charge, or there was no factual basis for the plea. Whatever the claim, to sustain collateral attack on the sentence the demonstrated prejudice must rise to the level of a "complete miscarriage of justice" or a proceeding "inconsistent with the rudimentary demands of fair procedure." Timmreck, supra, at 782, quoting Hill v. United States, 368 U.S. 424, 428, 7 L. Ed. 2d 417, 82 S. Ct. 468 (1962). Sometimes an evidentiary hearing is necessary to determine these issues, in which event the trial court is not limited to what was said at the time of plea, but may receive probative evidence from other sources. Alessi, supra, at 481. In other cases the motion papers are sufficient for adjudication. Horsley, supra, at 1269 n.4.

 II.

 The case at bar arises out of the massive frauds perpetrated by officers and employees of O.P.M. Leasing Services, Inc. ("O.P.M."). *fn3" Weissman founded the company. At the time of the frauds he and his brother-in-law and co-defendant, Myron S. Goodman, each owned 50 percent of O.P.M.'s shares. Weissman was president and Goodman vice president. They and five other O.P.M. officers eventually faced criminal charges.

 Pursuant to agreements with the Government, Weissman and Goodman pleaded guilty to individual informations on December 17, 1981. The proceedings were held in camera at the request of all counsel. Weissman and Goodman sat next to each other on a sofa in chambers. They were flanked by Andrew M. Lawler, Esq. and Nathan Lewin, Esq., counsel for Goodman, and by Elkan Abramowitz, Esq., counsel for Weissman. AUSA Audrey Strauss was the prosecutor.

 The informations were individual and the allegations did not mirror each other. However, they grew out of the same fraudulent scheme. Goodman's Rule 11 allocution took place first. According to the transcript (Appendix A to this opinion) it began at 4:00 p.m. The Court said:

 Q. This information charges in essence that you and other individuals, co-conspirators and participants in the scheme, entered into a scheme to defraud lending institutions, the means of the scheme being the utilization of fraudulent devices to induce leading institutions to extend credit to O.P.M. Leasing Services, Inc. or to purchase notes from O.P.M., those fraudulent devices including the obtaining of financing on leases which had been fraudulently altered, inflating invoices, moving encumbered equipment without notifying the lending institutions which held the security interest, whose consent was required, and other forms of fraudulent and fictitious activity.

 Tr. 8-9.

 Goodman was asked to describe the scheme in his own words. He responded:

 A. Your Honor, I am nervous, and my attorney has anticipated that this question would be asked. Would you mind if I read you something that I wrote?

 THE COURT: Not at all.

 A. On Count 1, I was vice president and 50 per cent shareholder of O.P.M. Leasing Services, Inc. In that capacity, I agreed with the other fifty per cent owner, Mordecai Weissman, and others over the period of time that we conducted the affairs of O.P.M., to fraudulently obtain financing from lending institutions by submitting false documentations to those lending institutions.

 In carrying out that agreement, which I knew to be illegal, I at various times forged signatures and altered documents which were presented to the lending institutions.

 Some of the ways that we defrauded the lending institutions involved forging signatures on documents, substituting false pages in financing documents for true pages, drawing up leases on non-existent equipment, submitting the same equipment and leases for financing by two lending institutions and falsely increasing the lengths of leases beyond their true terms.

 Counts 2 to 16, the mail fraud and wire fraud counts, involved the same general illegal conduct that I just described. Financings generally involved the use of the mail and wire transferred funds.

 While I do not remember the exact dates and amounts of these transfers, I have been informed that the documents showing the dates and amounts set forth in Counts 3 through 15 are accurate.

 With regard to Count 2, I knew that officers of O.P.M. participating in the fraudulent scheme did cause a letter to be mailed in September 1980 to the attorneys for O.P.M., verifying a falsified equipment schedule.

 With regard to Count 16, I received a telephone call from Mr. Friedman pursuant to the illegal scheme on or about the date specified in the information.

 Q. While you have read from notes, Mr. Goodman, I take it that you intend that statement to be a true and accurate statement, based upon your own knowledge this afternoon; is that so?

 A. Yes, your Honor.

 Tr. 11-13.

 The Court accepted Goodman's guilty plea to all counts.

 Weissman's allocution followed immediately, commencing at 4:30 p.m. The transcript is Appendix B. The Court first stated:

 Mr. Weisman [sic], it has been suggested by counsel on your behalf that you are now prepared to plead guilty to each of the nine counts in this information. I must decide whether or not to accept that plea, and before doing so there are certain advices that I must give to you as to your constitutional rights and also certain questions that I must ask you.The purpose both of what I will say to you and ask you is to make certain that you understand your rights under the law and are offering these pleas voluntarily and without coercion.Therefore, if at any time you don't understand anything that I say or ask and want to ask me any questions about it or if at any time during these proceedings you wish to confer with counsel, do not hesitate to say so; all right?

 Tr. 4.

 Weissman then said that he was 34 years old, had a bachelor's degree in psychology, and "began my master's." Tr. 4.He further responded to the Court's questions as follows:

 You are represented this afternoon by your attorney, Mr. Abramowitz, and by other counsel who have previously been identified; is that so?

 A. Yes, your Honor.

 Q. Was Mr. Abramowitz retained by you privately or appointed by the Court?

 A. Retained by me privately.

 Q. And are you satisfied with the advice and assistance that Mr. Abramowitz has given you in this case?

 A. Yes, your Honor; I am.

 Q. Have you read the charges contained in this information?

 A. Yes, your Honor; I have.

 Q. Have you had sufficient opportunity to discuss those charges with your attorney?

 A. Yes; I have had sufficient opportunity.

 Tr. 5.

 As to the nature of the charges, the Court advised Weissman:

 This information charges that you and others associated or affiliated with O.P.M. Leasing Services, Inc., entered into a fraudulent scheme which was intended to induce lending institutions to extend credit to O.P.M. or to purchase notes from O.P.M., that the fraudulent devices were several in kind, including the alteration of leases, the inflation of invoices and the preparation of other fraudulent documents and that in furtherance of the scheme use was made of the mails and of interstate wire communication facilities.

 Do you understand that to be the nature of the charges against you?

 A. Yes, your Honor.

 Tr. 7.

 Weissman described the functioning of the fraudulent ...


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