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PRI-HAR v. U.S.

February 9, 2000

MENACHEM PRI-HAR, PETITIONER,
V.
UNITED STATES OF AMERICA, RESPONDENT.



The opinion of the court was delivered by: Sprizzo, District Judge.

  MEMORANDUM OPINION AND ORDER

Pursuant to Rule 33 of the Federal Rules of Criminal Procedure ("Rule 33") and 28 U.S.C. § 2255 ("§ 2255"), petitioner moves to vacate his conviction or, alternatively, for an order granting a new trial based upon newly-discovered evidence, prosecutorial misconduct, and ineffective assistance of counsel. In addition, pursuant to 28 U.S.C. § 144, 455(a) and 455(b)(1), petitioner moves for this Court to recuse itself from determination of his § 2255 motion on the grounds that this Court has a personal prejudice against him or, absent actual bias, has created a strong appearance of prejudice. For the reasons stated below, petitioner's motions are denied.

BACKGROUND

On October 26, 1993, petitioner, Menachem Pri-har ("Pri-har"), was indicted on twenty-four counts charging him with fraudulently obtaining more than $84 million in loans and U.S. government subsidies by submitting false documents and statements to the U.S. Department of Agriculture ("USDA") and to numerous domestic and foreign banks. Pri-har pled not guilty to all charges of the indictment. A jury trial began on November 9, 1993, and proceeded for two months.

At trial, the government presented evidence that established that Pri-har operated and controlled Red Rock Commodities, Ltd. ("RRC"), a commodities trading firm headquartered in New York City. Through RRC, Pri-har was able to obtain financing for a number of elaborate commodity trading schemes. First, by falsely naming an RRC affiliate, Olges, Ltd. ("Olges"), as a buyer of barley from RRC at excessively high prices, Pri-har obtained approximately $4 million in subsidies from the USDA. Second, by submitting false financial statements and overstating the price RRC paid for its wheat, Pri-har secured approximately $35 million in loans to finance RRC's contract to supply wheat for the Israeli Emergency Wheat Program ("IEWP"). Third, by wiring numerous fabricated invoices and forwarding misleading RRC bank statements, Pri-har obtained financing from Dresdner Bank in Germany in order to assert control over the IEWP. Fourth, by misrepresenting RRC's financial condition and purporting to use the loans for margin purchases of steel and grain futures contracts, Pri-har acquired and maintained a $1.5 million credit line from Banque Nationale de Paris, New York branch ("BNP-New York"). Fifth, by submitting false RRC financial statements and misrepresenting the status of the loan collateral, Pri-har acquired from BNP-New York and ABN-AMRO Bank approximately $17 million in loans to finance the shipment of steel from Poland to Israel. Finally, by falsely claiming ownership of two New York properties on his personal financial statements, Pri-har obtained a $1 million loan from Citibank and a $17 million loan from the Bank of Tokyo to finance the short-term borrowing needs and various real estate transactions of RRC's parent company, Red Rock Holding, Ltd. ("RRH").

The government directly implicated Prihar in the various commodities schemes with testimony from employees of the USDA, the defrauded banks, and RRC. The government also presented physical evidence implicating Pri-har, including incriminating contracts, memoranda, correspondence, and tape recordings seized from Pri-har's home and business offices. In his defense, Pri-har called two witnesses — his business manager and his secretary — and also testified on his own behalf.

On January 10, 1994, a jury found Prihar guilty on all twenty-four counts of the indictment. After two unsuccessful posttrial motions, one for a new trial and the other for a judgment of acquittal, this Court sentenced Pri-har to 168 months of incarceration and five years of supervised release. This Court also ordered him to pay $39 million in restitution, in addition to a $1 million fine and the mandatory assessments. The Second Circuit affirmed the conviction and sentence on January 3, 1995. See United States v. Pri-Har, 47 F.3d 1157 (2d Cir. 1995) (table opinion), cert. denied, 514 U.S. 1052, 115 S.Ct. 1431, 131 L.Ed.2d 312 (1995), and reh'g denied, 515 U.S. 1138, 115 S.Ct. 2571, 132 L.Ed.2d 822 (1995).

Pri-har filed the instant petition pro se on December 10, 1996, and a supplemental petition ("Sup.Pet.") on March 10, 1997. In these petitions, Pri-har claims that his conviction and sentence should be vacated because inconsistencies in the testimonies of various government witnesses constitute newly-discovered evidence. He argues that this newly-discovered evidence establishes his innocence and supports his allegations that the government suborned perjury, withheld exculpatory evidence, and misled the jury at trial. As additional grounds for relief, Pri-har propounds the failure of counsel to call expert witnesses, offer proper summation, and meet with an inquisitive juror.

In reply, the government primarily offers two contentions. First, the government charges that Pri-har's claims of prosecutorial misconduct and newly-discovered evidence are baseless and, in any event, fail to meet the heavy burden required for habeas relief under Rule 33 and § 2255. Second, the government argues that Prihar's allegations of ineffective counsel are procedurally barred and without merit.

On November 13, 1998, Pri-har filed a motion requesting that this Court recuse itself from determination of his petition. In his recusal motion, Pri-har contends that comments made by this Court during oral argument of his § 2255 petition evidence a personal antagonism toward him that could threaten this Court's objectivity. Furthermore, Pri-har argues that, even absent actual bias against him, recusal is required because of the strong appearance of prejudice created by this Court's comments, Pri-har's nationality, and this Court's recusal in an unrelated criminal case based on its prior representation of the Libyan government.*fn1

The government responds that recusal is not warranted because the Court's comments do not demonstrate any actual personal prejudice or bias and certainly fail to create an objective appearance of partiality. The government also contends that the inferences Pri-har draws from this Court's prior relationship with the Libyan government are unsubstantiated and speculative. Finally, the government reasons that this Court's decision to recuse itself in an unrelated action has no bearing on the instant motion because it was not based on personal prejudice or bias against a party because of that party's nationality or race.

DISCUSSION

I. The Recusal Motion

Pri-har moves this Court, pursuant to 28 U.S.C. § 144 and § 455(b)(1), to recuse itself from deciding the instant petition because of comments made by the Court at oral argument that petitioner alleges demonstrate personal prejudice against petitioner. Petitioner also contends, in the alternative, that even if the Court determines that their is no personal prejudice against petitioner, the Court should still recuse itself pursuant to 28 U.S.C. § 455(a), because the facts create the impression, to a reasonable observer, of the existence of such prejudice. Since petitioner has failed to demonstrate either actual bias or prejudice, or the appearance of such bias, the Court denies his motion to recuse for the reasons set forth below.

Under both 28 U.S.C. § 144 and § 455(b)(1), a judge shall recuse himself from a pending matter where a party sufficiently demonstrates that the judge has an actual "personal bias or prejudice" against a party. The source of the bias or prejudice must normally be based on extrajudicial conduct. See Apple v. Jewish Hospital and Medical Center, 829 F.2d 326, 333 (2d Cir. 1987); Curley v. St. John's University, 7 F. Supp.2d 359, 362 (S.D.N.Y. 1998). "Events occurring in the course of judicial proceedings generally do not constitute a basis for recusal unless they indicate that the judge has a deep-seated favoritism or antagonism that would make fair judgment impossible." United States v. Conte, 99 F.3d 60, 65 (2d Cir. 1996) (internal citations omitted). Thus, "judicial remarks . . . that are critical or disapproving of, or even hostile to, counsel, the parties, or their cases, ordinarily do not, support a bias or partiality challenge." Liteky v. United States, 510 U.S. 540, 555, 114 S.Ct. 1147, 1157, 127 L.Ed.2d 474 (1994). Moreover, it is well-settled that a judge's adverse rulings and decisions against a party almost never are a valid basis for a party to seek disqualification based on bias or impartiality. See id. Finally, the Court notes that a judge should not grant a recusal motion lightly lest the court encourage litigants "to advance speculative and ethereal arguments for recusal and thus arrogate to themselves a veto power over the assignment of judges." Thomas v. Trustees for Columbia University, 30 F. Supp.2d 430, 431 (S.D.N.Y. 1998).

Pri-har's motion alleges that observations made by the Court at oral argument evince a personal antagonism toward petitioner that render the Court incapable of objectively ruling on his petition. See Petitioner's Memorandum of Law in Support of Motion for Recusal dated November 13, 1998 ("Rec.Mem.") at 1. According to Prihar, "the thrust of these comments was that Petitioner is overly aggressive, domineering, controlling, arrogant and excessively demanding." Id. at 2. Petitioner also cites the Court's characterization of the events immediately preceding the return of the jury's verdict as additional evidence that the Court has an intense personal dislike of him. Furthermore, petitioner argues that the Court appeared not to have considered several theories offered by petitioner's counsel at oral argument, and that the Court has a "muted concern for justice in Petitioner's case," id. at 7, as additional evidence of bias.

Second, the Court rejects Pri-har's complaint that the Court exhibited a "muted concern for justice" when it expressed its opinion that petitioner "had received a fair trial. He may have gotten the wrong result." Arg.Tr. at 54. This comment, and others cited by petitioner, provide no basis for the conclusion that the Court should recuse itself on the basis of bias or animosity. Rather, the comments merely reflect this Court's opinion that petitioner received a fair trial, but he did not receive the result that he wanted.

Finally, the Court notes that Pri-har filed his recusal motion only after it became clear from the oral argument (which petitioner attended because the Court afforded him, at the request of counsel, a benefit not normally afforded most petitioners, i.e. the opportunity to personally appear on a writ to hear argument) that the Court was not receptive to the theories of relief raised in his petition. The Court suspects that petitioner filed the motion in order to avoid the negative outcome that petitioner anticipated would result from the tenor of the argument. This, of course, is also no basis upon which the Court should recuse itself from deciding the merits of Pri-har's petition. Accordingly, for all of the aforementioned reasons, the Court must conclude that Pri-har has failed to demonstrate that the Court should recuse itself on the basis of bias or partiality. Therefore, Pri-har's motion to recuse brought pursuant to 28 U.S.C. § 144 and 455(b)(1) is denied.

In the alternative, Pri-har seeks recusal pursuant to 28 U.S.C. § 455(a) because "the Court's impartiality might reasonably be questioned." Rec.Mem. at 8. According to Pri-har, a reasonable observer familiar with Court's comments at oral argument would conclude that the Court has a strong personal dislike of petitioner sufficient to require recusal. In addition, Pri-har asserts that the Court should recuse itself because an observer could "reasonably infer that the Court's obvious dislike of Petitioner is fueled by the Petitioner's nationality." Id. at 10. This claim rests on a series of dubious assumptions that gravitate around the Court's recusal based on a potential conflict in another case because while in private practice the Court represented the Libyan government. From this fact Pri-har argues that since there is enmity between Libya and Israel, the Court should recuse itself in the instant case because petitioner is an Israeli citizen and "an objective observer . . . might have good reason to believe that the Court harbored a bias against petitioner." Id. Prihar also contends that recusal is warranted because "the characteristics which the Court has attributed to Petitioner — aggressiveness, arrogance, manipulativeness vis-a-vis banks — often are those attributed to the negative stereotype of Israelis." Id.

Given the dubious and speculative nature of the assumptions noted above, the Court is constrained to conclude that there is no basis for recusal on any of those grounds. ...


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