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United States v. Atias

United States District Court, E.D. New York

December 18, 2017

UNITED STATES OF AMERICA,
v.
SOFIA ATIAS and JOSEPH ATIAS, Defendants.

          For the Government: Bridget M. Rohde Acting United States Attorney Eastern District of New York, Charles P. Kelly, A.U.S.A., Burton T. Ryan, Jr., A.U.S.A.

          For Sofia Atias: LaRusso Conway & Bartling, LLP 300 Old Country Rd, Suite 341 Mineola, New York 11501 By: Robert P. LaRusso, Esq.

          For Joseph Atias: Leonard Lato, Esq.

          MEMORANDUM AND ORDER

          DENIS R. HURLEY, U.S.D.J.

         On March 30, 2017, a jury convicted the defendants Sofia Atias ("Sofia") and her husband Joseph Atias ("Joseph") of the crimes charged in Counts One and Two (Bank Fraud and Conspiracy to Commit Bank Fraud), as well as Count Four ("Theft of Government Funds") of the captioned indictment.

         Sofia has moved pursuant to the Federal Rules of Criminal Procedure for (1) a judgment of acquittal pursuant to Rule 29(c) as to each of the counts of conviction[1] and (2) a new trial as to those counts pursuant to Rule 33. Joseph has moved for a judgment of acquittal as to Count Four under Rule 29(c) and for a new trial pursuant to Rule 33 for the bank fraud and bank fraud conspiracy counts. (Joseph's July 12, 2017 Reply (Doc. # 256) at 23.)

         GROUNDS ADVANCED BY SOFIA AND JOSEPH IN THEIR JOINT APRIL 6, 2017 LETTER FOR THE RELIEF REQUESTED

         The Atiases' Rule 29 motion, as delineated in their April 6th letter, is based on the purported insufficiency of the evidence. Their Rule 33 motion, i.e. for a new trial, rests on multiple grounds, to wit "(1) [Nicholas] Pellegrini's testimony was so patently incredible that no rationale [sic] jury could believe it; (2) the Court erroneously charged the jury on willful blindness or conscious avoidance; (3) the Court failed to charge the adverse inference from the government's failure to call Carlos Roa Zarate ('Zarate'); (4) the Court improperly ruled that Zarate properly invoked his Fifth Amendment privilege on other short sale criminal acts particularly in commission with the government's witness Nicholas Pellegrini ('Pellegrini') thus preventing the defendants from eliciting substantial impeachment evidence on . . . Pellegrini's credibility; and (5) the Court improperly curtailed Pellegrini's cross-examination by precluding leading questions of Sofia Atias by the co-defendant's attorney[2] and curtailing Pellegrini's cross examination regarding a perpetrated vehicle insurance and identification fraud, matters certainly . . . relevant to Pellegrini's credibility." (Defs.' Apr. 6, 2007 Letter in Supp. (Doc. # 239) at 1-2 (emphasis added).)

         Following receipt of the government's April 21, 2017 letter in opposition to the relief requested, movants Sofia and Joseph replied individually via submissions dated June 2, 1017 and July 12, 2017 respectively. In doing so, each supplemented the grounds advanced in their April 6th joint letter.[3]

         ADDITIONAL GROUNDS ASSERTED BY SOFIA IN JUNE 2, 2017 SUBMISSION

         The Rule 33 additions by Sofia were as follows: (1) "prosecutorial misconduct, including, inter alia, the government's mischaracterization of the evidence at trial and its rebuttal summation and the government's presenting and failing to correct perjured testimony", (Sofia's June 2, 2017 Reply (Doc. # 253) at 1-2), (2) Court's "curtail[ment] of advice of counsel argument, " (id. at 26 (capitalization omitted)), (3) government's "fail[ure] to turn over exculpatory information, " (id. at 27 (capitalization omitted)), (4) "curtailing defendants' cross examination of two witnesses, " namely Lee and Sofia, (id. at 30 (capitalization omitted); see also id. at 31), and (5) "government's fail[ure] to correct Pellegrini's testimony that he provided emails to government, " (id. at 31 (capitalization omitted)).

         Sofia also expanded her initial Rule 29(c) insufficiency argument.

         ADDITIONAL GROUNDS ASSERTED BY JOSEPH IN JULY 12, 2017 SUBMISSION

         As to Joseph's Rule 29(c) motion, his July 12th Reply includes the argument that the government has failed "to show that the Atiases were ineligible for Medicaid benefits exceeding $1, 000." (Joseph's July 12, 2017 Reply (Doc. # 256) at 2.) In making that argument, counsel focuses on the testimony of Heather Griffin ("Griffin")[4], who was recalled to the stand as part of the government's rebuttal case for purposes of providing her assessment of the testimony of defendant's expert, Moriah Adamo ("Adamo"). Joseph maintains that a juxtapositioning of their testimony indicates that Griffin implicitly withdraw her "'ineligibility conclusion'" thereby leaving unchallenged Adamo's opinion that eligibility for Medicaid "could not be determined without further investigation". (Id. at 2-3.)

         With respect to Joseph's predicates for his Rule 33 motion the following claimed areas of error, beyond those listed in the April 6th joint letter, are cited: (1) the Court's erroneous ruling concerning Zarate's fifth amendment rights was compounded by it not ordering the government to immunize Zarate, (2) the Court's erroneous conclusion that there was a cumulative aspect to the testimony the defense sought to elicit from Zarate under Rule 608(b), (3) the government was aware of perjured testimony given by defense witness Charles Strain yet no action was taken to address the situation, (4) the government in its summation improperly underscored the testimony of both Pellegrini and Stain even though they knew or should have known of the perjurious taint of the subject testimony, and (5) even though Strain was called to the stand by the defense, the argument is made that the government thereafter made him their witness via their line of inquiry on cross examination, thereby triggering a duty to disclose any 3500 material or Giglio material in its possession. (See generally Joseph's July 12, 2017 Reply (Doc. # 256) at 4-23.)

         APPLICABLE LAW

         1. Rule 29(c) Motion for Judgment of Acquittal

         Rule 29 provides in pertinent part that "the court . . . must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." Fed. R. of Crim. P. 29(a). In deciding a Rule 29 motion, a court is required to construe all the evidence and draw all inferences in favor of the government. See United States v. Puzzo, 928 F.2d 1356, 1361 (2d Cir. 1991). As a result, "[t]he court may not assess witness credibility, resolve inconsistent testimony against the verdict, or otherwise weigh the significance of the evidence." Mehler, Gleeson and James, Federal Criminal Practice: A Second Circuit Handbook, § 29-2 at 511 (Lexis Nexis, 12th Ed. 2012), and cases cited therein. For a movant to prevail, he or she must demonstrate that "no rational trier of fact could have found the essential elements of the crime charged beyond a reasonable doubt." United States v. Vasquez, 271 F.3d 364, 370 (2d Cir. 2001)(citation and internal quotation marks omitted).

         2. Rule 33 Motion for a New Trial

          Federal Rule of Criminal Procedure 33 provides in pertinent part:

Upon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of justice so requires. . . .

Fed. R. Crim. P. 33.

         In deciding whether to grant a motion for a new trial under Rule 33, the test is “whether ‘it would be a manifest injustice to let the guilty verdict stand.'” United States v. Sanchez, 969 F.2d 1409, 1414 (2d Cir. 1992)(quoting United States v. Reed, 875 F.2d 107, 114 (7th Cir. 1989)). Before ordering a new trial under Rule 33, a district court must find that there is “a real concern that an innocent person may have been convicted.” Id.; see also United States v. Morales, 902 F.2d 604, 606 (7th Cir. 1990)(Posner, J.)(describing order of new trial as a response to “a serious danger that a miscarriage of justice has occurred - that is, that an innocent person has been convicted”); United States v. Thomas, 894 F.Supp. 58, 63 (N.D.N.Y. 1995)(district court should only grant a new trial “when it ‘concludes that, despite the abstract sufficiency of the evidence to sustain the verdict, the evidence preponderates sufficiently heavily against the verdict that a serious miscarriage of justice may have occurred'”)(quoting United States v. Lincoln, 630 F.2d 1313, 1319 (8th Cir. 1980)). A trial court's discretion under Rule 33 “should be exercised sparingly.” Sanchez, 969 F.2d at 1414.

         Defendants alleging government witness trial perjury in a Rule 33 motion must demonstrate that the witness' testimony was actually false and “that ‘the jury probably would have acquitted in the absence of the false testimony.'” United States v. Moore, 54 F.3d 92, 99 (2d Cir. 1995)(quoting Sanchez, 969 F.2d at 1413-14); United States v. White, 972 F.2d 16, 20 (2d Cir. 1992). The Second Circuit has held that “in the rare instance where it can be shown that the prosecution knowingly used false testimony . . . we would apply a less stringent test and permit the granting of a new trial where the jury ‘might' have acquitted absent the perjury.” Sanchez, 969 F.2d at 1414 (citing United States v. Stofsky, 527 F.2d 237, 246 (2d Cir. 1975)).

         DISCUSSION

         EVIDENCE AND OBSERVATIONS BEARING ON ALL COUNTS OF CONVICTION

         1. Format of Decision

         By way of format, a review of the evidence placed before the jury pertaining to Counts One, Two and Four is necessary not only for Rule 29(c) purposes, but also to place defendants' Rule 33 applications in context.

         As to the Rule 33 applications, some of the grounds advanced relate to Counts One and Two and also Count Four. Plus many of the multiple grounds significantly overlap. Accordingly, rather than address the grounds seriatim under the captions assigned to those grounds by the particular movant, I will combine several of the points under an appropriate heading in an effort to avoid undue duplication while endeavoring to discuss all of Rule 33 arguments made.

         2. Defendants' Positions as to Counts One and Two

         A common theme advanced by the defendants throughout the trial as to Counts One and Two is that neither harbored the requisite criminal intent to commit the crimes charged. Indeed, both insisted at length during their testimony that they merely signed the implementing documents as presented to them by cooperating witness Nicholas Pellegrini ("Pellegrini") and his cohorts absent any realization that a fraud was afoot.

         The jury was called upon to evaluate that theme in determining whether or not the government had met its burden of proof and, in doing so, presumably considered the backgrounds, education and business experience of defendants. Indeed, Sofia's counsel appropriately asked the jury during his opening to consider her "background" including being raised in "a different culture" where "males are responsible for the financial health of the family" and "women are second class citizens." (Tr. at 125.)

         Moreover, to the extent each defendant claims to have been victimized by Pellegrini, the relationship between Pellegrini and particularly Joseph Atias warrants mention. Why? Because such evidence is germane as to whether either defendant was simply a passive dupe in the fraudulent bank scheme claimed to be hatched by another as each maintains.

         3. Defendants' Positions as to Count Four

         As to Count Four, defendants cite, among other things, a lack of understanding as to the meaning of several pivotal questions on the Medicaid application and recertification forms, together with a shared belief that monies paid for such items as overseas travel and for various other personal expenses while on Medicaid were not reportable to the Department of Social Services (“DSS”) as being allegedly funded by loans and gifts.

         4. Backgrounds of Sofia Atias and of Joseph Atias and an Overview of Joseph Atias's Business Experience

         (a) Sofia's Background

         Sofia Atias is a middle aged woman who migrated to the United States from Israel in 1986. (Tr. at 1520-21.) She thereafter became a United States citizen, (id. at 1521), graduated from a Long Island high school and then attended college for one year. (Id. at 1912-14.)

         She was primarily, if not exclusively a stay-at-home mother thereafter. Five children were born as a result of her marriage to Jacques Amsellem. (Tr. at 1526.) Upon her marriage to Joseph in 2004, (id. at 1917), she became the stepmother to his two children, (id. at 1945), and, as a result of her union with Joseph, an 8th child was born. (Id.)

         The previously noted prediction by counsel that the evidence would show Sofia was likely to readily comply with demands made by members of the opposite sex was called into serious question - or so the jury might have concluded - given the manner in which she fielded questions on both direct and cross-examination during her extended time on the witness stand. During that give-and-take process, she displayed a forceful demeanor and strong intellect.

         (b) Joseph's Background

         Joseph Atias, 53 years of age when he testified, was born in Israel and studied mechanical engineering in that country. (Tr. at 2226.) He also served in the military for a total of seven years, first on active duty and then as a member of the reserve. (Id. at 2227.) Upon immigrating to United States in the early to mid-1990s and becoming a citizen in the "[m]id'90s, " he became involved in real estate transactions. (Id. at 2228-30.) He, and apparently one or more associates, looked for undervalued properties. (Id. at 2230-31.) The deals that closed were lucrative. (Id. at 2231.) One transaction he did with Pellegrini in the early 2000s resulted in each realizing a profit of $400, 000. (Id. at 926.)

         Joseph also became a principal and operated several businesses including "New York Forex Fund" which originally started "as a foreign exchange trading logarithm" and which by 2007 had "a few hundred thousand dollars."[5] (Tr. at 2260.) Two other business he had were "Cryoshape Global" ("a company that was created to accommodate an exclusive marketing right for a medical device" developed by a friend of his who was a plastic surgeon in Israel) and "Incentives IQ" (dealing "with cyber security, internet security"). (Id. at 2261-62.)

         Over time he apparently became viewed as a person of sufficient business and technological gravitis that (1) he "was invited with his close friend and superior officer during his military time in Israel to evaluate a technology in South Africa that was designed "help locate and identify missing and kidnaped soldiers." (Id. at 2287.) Also, while his family was on Medicaid, he traveled to Zurich "to evaluate software . . . for insurance companies" and to Geneva for another business purpose. (Id. at 2291-92.) Joseph testified that his associated transportation costs were borne by another, and he supposedly received no compensation for his involvement. (Id. at 2292.)

         Among his other travels while on Medicaid were trips to Mumbai, India.[6] (Tr. at 2298-2300.) The reason for his trips was to help software developers with respect to a system that he designed. The beneficiaries of his input "were the programers that were actually writing the code for the system." (Id. at 2299.) The persons that he was interacting with towards that goal were not only in India but "also in the Phillippines and some in Russia." (Id. at 2300.) To the coders that were helping to develop his program he wired "anywhere from 150 to 200, 000 dollars, " (id.), again while collecting Medicaid.

         The jury heard all of the above information plus much more, detailing Joseph's educational and extensive experience in the business community. Given his background, possibly the jury had significant reservations about his credibility vis-a-vis the counts of convictions concerning such matters as, inter alia, his professed inability to understand the term "self employment" in the Medicaid application form, (Tr. at 2545-46), and his purported failure to review, cursorily or otherwise, most, if not all of documents underlying the Counts One, Two and Four. Perhaps such a cavalier attitude as to such important matters seemed out-of-sync with the probing, accomplished person he seems to be.

         Similarly the jury may have questioned the notion that Sofia is a subservient second class citizen as suggested during her opening after listening to her for several days on the stand and learning of her thirty plus years as a United States resident and citizen.

         5. Evidence and Information Bearing Particularly on Counts One and Two

         (a) Pellegrini's Background and Relationship With Sofia and Joseph; Pamela Lee's and Pellegrini's Involvement in Subject Short Sale

         The jury was provided with more than ample information with which to evaluate Pellegrini's credibility. They learned, for example: (1) that he was no longer permitted to practice law in the State of New York, having been suspended in 2012, (Tr. at 911), (2) that he pled guilty to Count Two of the captioned indictment and is presently awaiting sentence, (id. at 912), (3) that he has pending charges in a "state court in Suffolk County" pertaining to alleged illegal acts committed by him in his capacity as a lawyer, (id. at 881), [7] (4) that he either personally or through an intermediary forged a number of real estate documents and on more than one occasion notarize signatures thereby affirming that the signatures were affixed in his presence when such was not the case. (Id. at 1052 and 1055-58.

         Defense counsel argue that Pellegrini is the villain underlying the scenario set forth in Counts One and Two. Clearly he was in the midst of the wrongdoing. But to suggest that he was the instigating and primary wrongdoer with defendants merely his victims, is nigh impossible to square with the evidence. As to the relationship between the Atiases and Pellegrini the jury learned (1) defendants purchased 83 Cathedral Avenue from Pellegrini, (Tr. at 928), who had previously used the building as his home and office, (id. at 866), (2) Joseph and Pellegrini did numerous real estate transactions together over many years; notably Joseph's role typically was to find the investment properties and put together the transactions via negotiating with the sellers, with Pellegrini's role being to arrange the financing and do the associated legal work (id. at 924-25), and (3) most importantly, as to the short sale and subsequent non-arms length transfer of 83 Cathedral Avenue to Sacred Heart Academy as charged in Counts One and Two, overwhelming evidence was presented by the government indicating that the idea for that fraud did not originate with Pellegrini but instead was the brainchild of Joseph. Indeed, prior to Pellegrini becoming involved in the subject transaction, Joseph contacted a short sale specialist recommended by an individual in Sofia's brother's office, Pamela Lee ("Lee"). (Id. at 2344 and 2358.)

         Lee testified that Joseph contacted her in July of 2011. (Tr. at 3073.) He expressed an interest in the rules pertaining to a "flip" i.e. whereby a short sale is followed by the purchaser at the short sale selling to a third party.[8] (Id. at 3076-77.) She later met Joseph in person and "gave him a very detailed outline" of the process together with samples of the "documents . . . to submit to the bank." (Id. at 3078.) Included within that package was a specific "hardship letter" pertaining to 83 Cathedral Avenue for Sofia's signature and submission to the mortgagee bank, together with a proposed "contract of sale" for the property.[9] (Id. at 3080.)

         After Joseph and Sofia decided to replace Lee with Pellegrini as their lawyer, Pellegrini called Lee to "discuss[] the transaction." (Tr. at 933.) He thereafter "g[o]t some paperwork from her" through Joseph. (Id.)

         As Joseph explained to defense witness Charles Strain ("Strain"), selling directly to an interested party, such as Sacred Heart Academy, would not be a "smart" thing to do. (Tr. at 2709.) By using an intermediary, Joseph and Sofia would receive the "spread" consistent with their stated goal. (Id. at 1742-43.)

         In sum, while the jury was aware of Pellegrini's significant criminal role in the charged fraud they also heard testimony that the origin of the idea was traceable to Joseph with Pellegrini serving primarily as the technician to implement that scheme. Thus the notion that "[a]bsent the testimony of Pellegrini . . ., the evidence is unequivocal that the defendants were unaware of the fraudulent nature of the short sale" is dubious given the overwhelming evidence to the contrary. (Defs.' Apr. 6, 2017 Letter in Supp. (Doc. # 239) at 3.)

         (b) Information About the Documents Used to Accomplish the Short Sale Itself, the Subsequent Sale to Sacred Heart Academy, and Disposition of the Proceeds

         Using a format provided by Lee, Sofia sent a letter to the mortgage bank indicating that they were unable to meet their payment obligations. (Id. at 3090-91.) She neglected to note that Sacred Heart Academy was interested in buying the property at an amount that would have more than satisfied their obligation.

         Pellegrini, rather than forming a new corporation to acquire the property at the planned short sale - with the time and money that process would have entailed - told the Atiases that they could use an existing non-functioning corporation of his, Jefferson Management Property Corp. (Tr. at 935.) After some negotiations, the bank agreed to a short sale to that corporation for $485, 000. With the bank's approval of a short sale for $485, 000 and the Sacred Heart Academy's offer both being in place, (id. at 916-17), "the house was sold [by] Sofia Atias . . . to a newly formed corporation [viz. Jefferson Real Property Management Inc.] for the purpose of this transaction." (Id. at 917.) Pursuant to the plan, "two months later, more or less, the new corporation sold the house to Sacred Heart for $925, 000. So the difference, which is about $400, 000, went to the Atiases." (Id.)

         The spread realized from the second sale was then deposited in the MC-12 Trust at the direction of Joseph. (Tr. at 1006.)[10] The reason for that, according to Sofia, was that the $400, 000 plus monies represented the return on $100, 000 that the Trust had loaned to the short sale purchaser several months earlier which was applied towards the $485, 000 short sale purchase price. (Id. at 2071-73.)

         SUFFICIENCY OF EVIDENCE AS TO COUNTS ONE & TWO UNDER RULE 29(C)

         In sum, the evidence as to Counts One and Two as to each defendant was more than sufficient to support the jury's verdict. Accordingly, their respective Rule 29(c) motions are denied. Also denied are defendants' Rule 29 motions made prior to the case being submitted to the jury.

         Attention will now be directed to defendants' applications for judgments of acquittal with respect to Count Four.

         SUFFICIENCY OF EVIDENCE AS TO COUNT FOUR[11] UNDER RULE 29(C)

         Count Four, entitled "Theft of Government Funds" alleges

[O]n or about and between February 1, 2009 and February 28, 2015, both dates being approximate and inclusive, within the Eastern District of New York, the defendants SOFIA ATIAS and JOSEPH ATIAS, together with others, did knowingly and intentionally steal, purloin and convert to their own use and the use of another, money and things of value in excess of the sum of $1, 000 of the United States and a department and agency thereof, to wit: the United States Department of Health and Human Services Medicaid Program for Medicaid Benefits, which is administered by the Nassau County Department of Social Services.

(Superseding Indictment (Doc. # 140) at ¶ 29.)

         From on or about February 1, 2009 until February 28, 2015 the Atiases have received over $200, 000 in Medicaid benefits. (Tr. at 2614-15.) The government has provided an accurate overview of the testimony placed before the jury indicating that the subject sums were stolen from "the United States and a department or agency thereof" via the fraudulent manner in which Sofia, with her husband's complicity, completed the Medicaid eligibility and recertification forms provided to the Nassau County Department of Social Services. The Government's on-target synopsis is hereby incorporated by reference. (Gov't's Apr. 21, 2017 Opp. (Doc. # 241) at 2-5.) What follows in this section of the decision are some of my additional observations as the trial judge.

         To the extent defendants told the jury that they did not understand portions of the Medicaid application forms (see Gov't's Ex. 30), the jury may had difficulty accepting that testimony given the defendants' backgrounds and the clear language involved. (See the following items in Gov't's Ex. 30, NOTIFICATION OF CLIENT RESPONSIBILITY dated Nov. 6, 2008 (00003099), and the "Resource Worksheet.") On the worksheet, (00003100) Sofia indicated the only resource on hand was $100 in a checking account. On the "Declaration of No Income" portion of the application (00003101) Sofia indicates that her "husband is not working and we have no income. We live basically upon my child support and my mom helps us as well." That same representation is carried forward in the recertification process which occurs yearly thereafter even though it is undisputed that Joseph was working at various times, if not during the entire time the family received Medicaid. As to the fact that the "self employment" box was never checked in the application or recertification process, Joseph Atias testified that he did not understand what the term "self employment" means. (Tr. at 2545-46.) Again, given his background, the jury may have found that declaration to be untrue.

         As government witness Heather Griffin ("Griffin") from DDS explained, the purpose of listing "Additional Resources Not Listed Above" on the "Resource Worksheet" (00003100) is to permit DSS to determine whether such resources are available for support purposes. (Tr. at 402-04.) That rationale applies to the numerous personal expenses of the Atiases which were paid while they were on Medicaid through Joseph's various business, such as tuition payments for one of their children's schooling, (id. at 1825, 1832), and child support payments to Joseph's former wife. (Id. at 2547.) In any event, one of the themes espoused by defendants was that to the extent business credit cards were utilized for personal expenses, - as they admittedly were - the sums involved were loans from the corporations involved and therefore not reportable. Even if, arguendo, that testimony was truthful notwithstanding the lack of supporting documentation, the sums involved were required to be reported to DSS so that they could conduct the requisite investigation.

         Also unreported to DSS was Sofia's inheritance of over $200, 000 following the death of her father as well as the over $400, 000 spread the Atiases realized from the sale of 83 Cathedral Avenue to the Sacred Heart Academy. Those sums, as previously noted, ended up as part of the corpus of the MC-12 Trust. And, as correctly noted by the government, that Trust, in turn, funneled monies to Joseph's businesses including payments in March of 2012 "of $10, 000, $5, 000 and $18, 000 and, in December of 2012, the business account received payments totaling $42, 000." (Gov't's Apr. 21, 2017 Opp. (Doc. # 241) at 4 (with citations to the record).) Joseph and Sofia typically maintained, again absent supporting proof, that all such transactions were loans subject to obligations of repayment.

         Defendants' claim that monies received were loans, i.e. not income reportable to DSS, is not available to them with respect to government's exhibit 71. That exhibit is Joseph's affidavit filed in support of his motion to dismiss plaintiff's claims in Michael Knopf and Leonard Wisneski, MD v. Joseph Atias, Index No. 7887-2011 then pending in the Supreme Court of Nassau County. In paragraph 12 of that submission, Joseph averred: "Mr. Knopf's claim for conversion must be dismissed because he gave me his credit card to use for my personal expenses, which I did for about $50, 000 . . . ." (Ex. 71 (Feb. 8, 2012 Aff.) at ¶ 12.) The $50, 000 was "part of Mr. Knopf's payment to me of $350, 000 for my obtaining the distribution rights for the Etgar deal in February 2010, Mr. Knopf gave me his American Express credit card and told me to use it to pay for my personal expenses." (Id. at ¶ 13.) In paragraph 16, Joseph informs the Nassau County Supreme Court Justice that "Mr. Knopf, in his own handwriting, acknowledged his remaining $300, 000 obligation to me (after payment of about $50, 000 by use of his credit card). . . ." (Id. at ¶ 16.)

         Clearly the use of the just referenced credit card to the tune of $50, 000 was income, at least according to Joseph's affidavit, just as the additional $300, 000 claim was a "resource." Neither, of course, was reported to DSS. The jury may have concluded, legitimately so, that the Atiases' wholly uncorroborated testimony concerning numerous other personal expenses paid through Joseph's many businesses constituted reportable income, not loans, and that both defendants knew such to be the case.

         The jury also learned that the Atiases vacationed in such resorts as Cancun and Punta Cana while reporting de minimus assets to DSS. To the obvious question as to where the money came from for those trips, the answer given was that each was funded by a gift from Sofia's mother. Tellingly, however, no corroborative evidence was provided by way of testimony from the living benefactor, (Tr. at 3337-38), or otherwise.

         The defense called Moriah Adamo ("Adamo") - who after acknowledging that defendants never advised her that Joseph had access to, and in fact used the just discussed credit card of Knopf for personal purchases of $50, 000, (Tr. at 3011), or about the $10, 000 that the Atias' received from a charity while they were on medicaid to pay for their rent, (id. at 3013-14) - explained that a number of the resources seemingly available to the Atiases may or may not have constituted available resources for purposes of DSS depending upon further analysis. The jury, however, may have accepted the testimony given by government witness Griffin that unless the medicaid applicant reports the existence of such items, there is nothing to trigger a possibly disqualifying follow-up investigation. That defendants knew this is evidenced by the events surrounding their 2009 application to receive "Home Energy Assistance" benefits. Upon being asked to complete a self employment work sheet requesting "personal and business . . . bank statements" and other financial records the Atiases elected to abandon "the whole process" by "manag[ing] with the family to help [them]." (Id. at 2116-19.)

         Finally, as to the sufficiency of the proof regarding Count Four, defendants also maintain that the evidence did not demonstrate that “defendants stole the funds” under “18 U.S.C. § 641, ” (Sofia's June 2, 2017 Reply (Doc. # 253) at 2), or that the amount involved exceeded $1, 000.00 as charged in the indictment. Indeed, Joseph takes the position that “nothing [was] stolen, ” maintaining that even if, arguendo, fraud and concealment with resulting loss was established such conduct falls outside the scope of section 641. (See Joseph's Dec. 1, 2017 Sur-surreply (Doc. # 281) at 3 (“And the government attorney [in his October 13, 2017 surreply] once again obscures that its investigators, even if they uncovered concealment and fraud, failed to uncover theft.”)(emphasis in original).)

         The “theft-fraud distinction” Joseph seeks to draw is a defense afterthought. I don't recall it ever being expressed during the government's presentation of “concealment” and “fraud” evidence with respect to Count Four. Moreover, although the subject distinction is absent from the Court's charge in both language and substance (Tr. at 3487-91), the relevant part of the ...


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