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U.S. v. ROTH

United States District Court, Southern District of New York


February 7, 2003

UNITED STATES OF AMERICA
v.
MICHAEL ROTH, A/K/A "MECHY," DEFENDANT

The opinion of the court was delivered by: John F. Keenan, United States District Judge

OPINION and ORDER

Background

Defendant, Michael Roth, moves for a new trial on the ground that "newly discovered evidence" establishes that a Government witness, Shaya Waldman, perjured himself at trial. Roth urges that if the jury knew of the evidence, it would not have convicted Roth on the mail fraud conspiracy charged in the Indictment. (See January 1, 2003 Letter In Support of Defendant's Motion For A New Trial, p. 1-6).

Roth was convicted on April 17, 2002 of Conspiracy To Commit Mail Fraud (18 U.S.C. § 371) after a jury trial. That was the one count of the indictment. He was sentenced on October 8, 2002, after a Fatico hearing to a term of 30 months in prison.

Facts

The evidence at trial established that Michael Roth, a licensed public adjuster, engaged in a conspiracy to defraud insurance companies of hundreds of thousands of dollars by filing false insurance claims regarding water damage that Roth participated in causing. Roth agreed with Joseph Greenfield to cause damage at 884 East 28th Street and 1545 East 13th Street in Brooklyn, New York. The homes were then stocked with cheap and damaged furniture. The water pipes were deliberately broken and flooding of the houses and their contents resulted.

Roth prepared and submitted fraudulent claims to the insurance companies, inflating the price of the furniture damaged in the flood based on false furniture receipts. Roth settled with the insurance companies, and he and his co-conspirators received hundreds of thousands of dollars to repair the homes and replace the contents. (Tr. 67).*fn1 At trial the following witnesses, among others, testified for the Government:

(1) Special Agent Kevin O'Grady of the Federal Bureau of Investigation ("FBI"), who described Roth's admissions to him of his involvement in the insurance fraud scheme;
(2) Nathan Baum, the nominal owner of one of the properties who was one of Roth's co-conspirators. He testified pursuant to a cooperation agreement;
(3) Shaya Waldman, a furniture salesman who provided Roth and Greenfield with inflated furniture receipts for the insurance claims. He also testified pursuant to a cooperation agreement;
(4) Representatives of the two defrauded insurance companies, The Hartford Financial Services ("Hartford"), and Fireman's Fund Insurance Company ("Fireman's Fund")
A. 884 East 28th Street Fraudulent Claim

In 1996, Joseph Greenfield approached Roth, the licensed public adjuster, asking Roth how to file a fraudulent insurance claim on 884 East 28th Street in Brooklyn. Greenfield then lived with his wife and daughter on the second floor of that building. (Tr. 67, 138. 329). Greenfield told Roth that he owned the property at 884 East 28th Street in someone else's name. Roth later learned that Nathan Baum was the owner of record. (Tr. 65, 324-26). Greenfield told Roth that he was looking for a quick way to profit through an insurance claim on that property. (Tr. 65).

Roth described to Greenfield the different types of insurance coverage (Tr. 65) and explained that one type of insurance, structural or dwelling coverage, reimburses the insured for the costs of replacing the building structure if the building is destroyed or the costs of repairing the building if it is damaged. (Tr. 65). Roth suggested that Greenfield could not make much money on structural or dwelling coverage because the insurance company's payout on the claim would be only the actual cost of repairs. (Tr. 65-66). Roth explained that a lot more money could be made by inflating the claim on contents coverage, i.e., that type of insurance that reimburses the insured for the cost of the contents destroyed by a covered incident. (Tr. 66). Roth also told Greenfield that he could increase his profits through a false claim by obtaining: (a) additional living expenses or "ALE" coverage and (b) loss of use coverage, which reimburses an insured landlord for lost rent on the damaged property. (Tr. 66).

Roth told Greenfield that arson was not a good way to recover because insurance companies hire former fire marshals as investigators and they are more apt to detect arson. (Tr. 70) Roth recommended that Greenfield cause a flood and file a false water damage claim. This would look less suspicious and was more common. (Tr. 66, 70)

Greenfield told Waldman that he needed damaged or returned furniture for a house in Brooklyn. (Tr. 132). Waldman agreed to supply Greenfield with furniture, as well as receipts which showed inflated prices for the furniture, for $10,000. (Tr. 132-33). Waldman arranged for delivery of the furniture to 884 East 28th Street. (Tr. 134). Waldman met Roth and Greenfield. They instructed Waldman that the false receipts should total about $50,000, and that Waldman should leave key spaces on the documents blank, i.e., the name of the buyer, the date of the order, and the customer's signature. (Tr. 144, 149-50)

In May 1996, Baum, the nominal owner of 884 East 28th Street, went with Greenfield and his wife to Florida. (Tr. 330-31; GX108). While in Florida, Greenfield arranged for someone else to break a water pipe at the building. This caused substantial water damage. (Tr. 331-33). On May 28, 1996, Roth, who was listed as the public adjuster, filed the water damage claim in Nathan Baum's name with Hartford. (Tr. 66-67, 253; GX105; GX106-A). The Hartford claim falsely stated that the accident was caused by the improper installation of a pipe under a sink.

The submission to Hartford had several false damage claims including:

(a) a claim for reimbursement of damaged furniture based on the phony receipts given by Waldman;
(b) a claim that Baum was entitled to reimbursement for lost rent based on a false lease for the first-floor apartment;
(c) a claim that Baum was entitled to reimbursement for rental payments while he was displaced from his home based on a false lease;
(d) a claim for expenses that Baum and his family had allegedly incurred as a result of the water damage. This was also based on false documents and correspondence. (Tr. 67, 260, 265-66, 269-70, 272-73, 337, 339, 340-43; GX109,*fn2 GX110, GX113, GX116, GX117A-C, GX122, GX123, GX124, GX302)
After numerous discussions with Roth, Hartford ultimately paid Baum and H. Roth Adjustors $144,315 in settlement of the 884 East 28th Street claim. (Tr. 275-76; GX104A-M)

B. 1545 East 13th Street Fraudulent Claim

Greenfield later bought 1545 East 13th Street, Brooklyn, New York, in his wife's name. He obtained homeowner's insurance on this property through Fireman's Fund. (Tr. 68, 559-62; GX201A). Roth and Greenfield then worked out essentially the same scheme in relation to 1545 as they had for 884 East 28th Street. For another $10,000, Waldman provided Roth and Greenfield with damaged furniture for 1545 and phony receipts inflating the price of the furniture. (Tr. 68, 153-63; GX209A-E). Greenfield told Waldman that they were planning to flood the house and make repairs with the insurance. (Tr. 155)

On September 1, 1997, Roth, as the public adjuster filed a false water damage claim in Elizabeth Greenfield's name with Fireman's Fund for 1545 East 13th Street. (Tr. 68, 559-62, 566; GX201A). The claim misstated the cause of the flood. False documents were submitted to substantiate the claim. These were:

(a) the inflated receipts which Waldman supplied;

(b) phony lease indicating that Elizabeth Greenfield had rented a temporary residence as a result of the water damage;
(c) false documents and correspondence which reflected expenses that Elizabeth Greenfield had allegedly incurred as a result of the water damage. (Tr. 68, 561, 571-72, 580-87, 590; GX208, GX208A, GX209, GX209-A-E, GX211A-C, GX212A-C, GX214, GX215, GX217, GX219A-B, GX220A-B, GX221A-C). Fireman's Fund settled the claim for approximately $150,000 after negotiations with Roth. (Tr. 605; GX223A-E)
Roth was convicted and sentenced as set forth on p. 2 supra.

Discussion

Roth contends that the affidavits of Nechemia Mendelowitz and Sheya Gruenzweig demonstrate that Shaya Waldman, one of the cooperators who testified for the Government, committed perjury "when he testified that it was Mr. Roth (sic) introduced him to fellow conspirator Joseph Greenfield. Waldman testified that he met Roth in 1994 and Greenfield approximately a year later in 1995 (Tr. 129-30). According to the personal observations of these two witnesses, Waldman actually knew Greenfield in early 1994, well before he ever met Roth, and the witnesses saw them together on a number of occasions during that time." (Defense January 1, 2003 Submission, p. 1)

Jurisdiction

The Government properly points out that Federal Rule of Criminal Procedure 33 provides that "if an appeal is pending, (as here) the court may grant the motion only on remand of the case." However, the Court of Appeals for the Second Circuit has created an exception to that rule in United States v. Camacho, 302 F.3d 35 (2d Cir. 2000). I have jurisdiction to entertain this motion.

The Second Circuit held that "the district court retains jurisdiction to deny a Rule 33 motion during the pendency of an appeal, even though it may not grant such motion unless the Court of Appeals first remands the case to the district court." Id. at 36.

B. The Motion For A New Trial

At the outset, it must be pointed out that in his motion, Mr. Roth does not charge that the Government had any actual knowledge of the alleged Waldman perjury nor is there any contention that the Government should have been aware of the charged perjury.

In determining the effect of perjury on a jury's verdict, much depends on whether the Government was aware of the perjury. If the Government is charged with knowledge of a witness' perjury, a conviction must be set aside "`if there is any reasonable likelihood that the false testimony could have affected the judgment of the jury.'" United States v. White, 972 F.2d 16, 21 (2d Cir. 1992) (quoting United States v. Wallach, 935 F.2d 445, 456 (2d Cir. 1991)). However, if the Government is not charged with knowledge of the perjury, a new trial is warranted only if "`the court (is left) with a firm belief that but for the perjured testimony, the defendant would most likely not have been convicted.'" Id. (quoting Wallach, 935 F.2d at 456. I have no such "firm belief."

To prevail on this motion, the defendant is required to show that he has identified "newly discovered evidence," i.e., evidence that he was unaware of before or during the trial, or that he could not have learned of through the exercise of reasonable diligence. Id. at 20. Mr. Roth does not meet this standard.

Roth urges that the "newly discovered evidence" is the testimony of the two witnesses recently discovered by the defense. He maintains that this information demonstrates that Shaya Waldman perjured himself when he testified that Roth introduced him to Joseph Greenfield in 1995. (Jan. 1, 2003 Def. Letter at 1) The proffered evidence is not "newly discovered evidence."

Laudably, the Government produced its 18 U.S.C. § 3500 prior to trial and before Waldman took the stand, long before the statute required the materials to be turned over. The F.B.I. Waldman interview memoranda, GX3505E and 3505F, both refer to Waldman's recollection that Greenfield was introduced to Waldman by Michael Roth. Thus, Roth was put on notice before trial of Waldman's recollection as to the sequence of the Waldman meeting. The argument that Roth's able trial attorney saw no need before trial to seek testimony that Waldman knew Greenfield before he knew Roth because that "testimony only became material once Waldman falsely claimed at trial to the contrary," Jan. 1, 2003 Def. Letter, p. 3, is baseless. The § 3500 material clearly established the nature of Waldman's trial testimony in this area. Roth had ample opportunity, both before and during trial, to attempt to identify witnesses who might have information about the timing and circumstances under which Waldman met Greenfield for the first time. The two witnesses whose testimony Roth now offers were uniquely available to Roth — not the Government — before and during trial.

In any event, it was Roth, who was friends with both Waldman and Greenfield. He knew or should have known whether he introduced Waldman to Greenfield in the first place and could have uncovered such proof before or during trial through the exercise of due diligence.

Roth has failed to establish that he exercised "due diligence" to obtain the testimony of these witnesses before or during trial. United States v. Helmsley, 985 F.2d 1202, 1207 (2d Cir. 1993). "We have never permitted a successful collateral attack for a prosecutor's knowing use of false testimony based entirely on evidence of which the defendant was aware, or in the exercise of reasonable diligence should have been aware, at trial." Id. at 1208.

Even if the affidavits of Nechemia Mendelowitz and Sheya Gruenzweig did constitute "newly discovered evidence" under Rule 33, the defense must show that the evidence is material and not cumulative. "Evidence of impeachment is material if the witness whose testimony is attacked `supplied the only evidence linking the defendant(s) to the crime,' or `where the likely impact on the witness's credibility would have undermined a critical element of the prosecution's case.'" United States v. Wong, 78 F.3d 73, 79 (2d Cir. 1996) (citations omitted). New impeachment evidence is not material where it would only be an additional basis on which to attack the credibility of a witness whose credibility had already been shown to be questionable.

The proffered testimony of Roth's witnesses does not provide any direct evidence that contradicts Waldman's testimony regarding Roth's involvement in the insurance fraud conspiracy. The proffered testimony relates to a collateral issue — the timing and circumstances under which Greenfield and Waldman met.

Waldman's credibility was repeatedly attacked on cross-examination by counsel about his relationship with Roth and the conversations that the two of them had regarding the insurance fraud scheme. The cross-examination of Waldman was vigorous and thorough. In addition to trial counsel's rigorous and effective cross-examination of Waldman, Roth's trial lawyer challenged Waldman's credibility, particularly Waldman's alleged inconsistencies relating to Roth's role in the conspiracy, in his opening and closing statements. (Tr. 44-45, 785-91).

The testimony of the two new witnesses, even if "newly discovered" is collateral and cumulative and not grounds for either a new trial or a hearing.

"`[A] district court must exercise "great caution" in determining whether to grant a retrial on the ground of newly discovered evidence, and may grant the motion only in the most extraordinary circumstances.'" United States v. Zagari, 111 F.3d 307, 322 (2d Cir. 1997) (quoting United States v. Spencer, 4 F.3d 115, 118 (2d Cir. 1993)) (emphasis in original); accord Wong, 78 F.3d at 79. "[M]otions for a new trial are disfavored in this Circuit," United States v. Gambino, 59 F.3d 353, 364 (2d Cir. 1995), and should therefore not be granted unless, after evaluating all of the evidence, the district court is left with a "real concern that an innocent person may have been convicted." United States v. Sanchez, 969 F.2d 1409, 1414 (2d Cir. 1992)

I do not believe that the proffered testimony of the two new witnesses would in any way have affected or changed the jury's guilty verdict. More important, I have no "concern that an innocent person" was convicted.

The motion is denied in all respects.

SO ORDERED.


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