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Novak v. United States

April 13, 2009


The opinion of the court was delivered by: Trager, J.


On October 8, 2007, Charles Novak, appearing pro se, filed the instant motion pursuant to 28 U.S.C. § 2255 (2000) to vacate his judgment of conviction. For the reasons set forth below, his motion is denied.


Novak was indicted on charges of racketeering, mail fraud, receipt of unlawful labor payments, making false ERISA statements, money laundering and conspiracy. The charges stemmed from payments Novak received as a Business Agent/Vice President of Local One of the International Union of Elevator Constructors ("Local One"). Local One's members are mechanics and operators who construct, maintain and operate the temporary elevators at construction sites in the greater New York City area. The operators are supervised by lead operators, Local One members who are appointed by business agents such as Novak who serve as de facto, on-site union representatives.

Local One entered into collective bargaining agreements with certain building contractors. The collective bargaining agreements established wage rates for regular and overtime work and required the contractors to contribute to the pension, welfare and annuity plans ("benefit plans") of Local One's operators. The contractors' contributions were based on hours the operators worked as reflected on time sheets submitted by Local One. Lead operators completed the time sheets.

Local One kept a hiring list containing the names of operators who were not assigned to a job. Lead operators and business agents would submit the names of operators on the hiring list to contractors who had available operator positions on their construction sites. Traditionally, preference in hiring was given to operators who had been on the list the longest. Business agents and lead operators, however, had the authority to assign jobs to Local One members regardless of their positions on the list.

Novak and the lead operators he appointed developed a scheme whereby they would supply contractors with the names of favored operators from the hiring list regardless of their priority on the list, provided they "kicked back" a portion of their wages. In furtherance of this scheme, the lead operators provided the contractors with time sheets which stated that the operators had worked hours they had not. The contractors paid the operators their wages and contributed to their benefit plans based on the hours stated on the fraudulent time sheets. The operators kicked back the net portion of their wages to Novak and the lead operators, but kept the contributions to their benefit plans.

Following a jury trial, Novak was convicted of one RICO count, one mail fraud count, four counts of unlawful labor payments, three counts of making false ERISA statements, one count of money laundering and three counts of conspiracy. He was sentenced to 108 months in prison.

Novak appealed to the United States Second Circuit on the following grounds: (1) there was no actual violation of 29 U.S.C. § 186 for receipt of unlawful labor payments because the payments were not made by an employer, (2) the Court's comments to the jury denied him a fair trial, (3) the mens rea definitions in the jury charge diluted the prosecution's burden of proof and (4) venue had not been established in the Eastern District of New York for the counts of the indictment charging false ERISA statements.

In a published opinion, the Second Circuit affirmed Novak's convictions for unlawful receipt of labor payments, RICO conspiracy and RICO violations but reversed his mail fraud and false ERISA statement convictions. United States v. Novak ("Novak I"), 443 F.3d 150, 163 (2d Cir. 2006). After further briefing, the Second Circuit, in an unpublished opinion, affirmed Novak's convictions for money laundering, money laundering conspiracy and conspiracy to receive unlawful labor payments. United States v. Novak ("Novak II"), 188 Fed. App'x 9, 10 (2d Cir. 2006). The Supreme Court denied his petition for a writ of certiorari on October 30, 2006, and Novak was resentenced on the nine remaining counts.

Novak now brings the instant motion claiming that his trial counsel was ineffective because he failed to: (1) object to several of the charges as duplicitous, (2) object to the instruction on the unlawful labor payment counts, which did not require the jury to find that the payments were made with the knowing participation of the employer (the "knowing participation argument"),*fn1 (3) object to comments made by the Court or (4) object to the jury instruction on mens rea.


(1) Procedural Bar

Novak raises three claims that were already considered and rejected on appeal and one claim that was never presented to this Court or raised on appeal. Section 2255 motions may not raise issues that were: (1) raised on direct appeal, e.g., Barton v. United States, 791 F.2d 265, 267 (2d Cir. 1986), or (2) not raised on direct appeal absent a showing of cause for failing to raise it and prejudice arising from the failure, see Zhang v. United States, 506 F.3d 162, 166 (2d Cir. 2007). However, ineffective assistance of counsel claims may be raised for the first time in a § 2255 motion. Massaro v. United States, 538 U.S. 500, 509 (2003). Standing alone, all of the grounds Novak presents ...

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