Friday, July 23, 2021

Scheme To Extort Payment With Rabbi Launderer Draws Suspension

A criminal conviction drew a three-year suspension from the New York Appellate Division for the First Judicial Department

The stipulation of facts confirms that, as alluded to above, this Court determined in July 2020 that respondent had been convicted of a "serious crime," immediately suspended him from the practice of law, and directed a sanction hearing be held. The conviction was based on respondent's plea of guilty in June 2019 in the United States District Court for the Eastern District of New York to conspiracy to obstruct an official proceeding in violation of 18 USC ยงยง 1512(c)(2) and 1512(k), a felony. On January 29, 2020, he was sentenced to four years' probation, 300 hours of community service, and fined $45,000. Respondent has paid the fine and completed his community service. As further stipulated, respondent's conviction stemmed from his efforts to assist a childhood friend, who had been convicted of, inter alia, securities fraud, in extorting money from the friend's convicted codefendant, who happened to be respondent's relative through marriage. In or about February 2017, the friend asked respondent to convey to his former codefendant that he wanted a sum of money to avoid getting the codefendant in unspecified trouble. Respondent conveyed the message to the codefendant, and, in a subsequent March 2017 communication, respondent told the codefendant that his friend demanded $5 million from him.

The codefendant repeated what respondent said to him to the FBI, and then began acting with the knowledge and at the direction of FBI case agents. In March 2018, respondent informed the codefendant that his friend had identified a rabbi who would allow any funds paid by the codefendant to be paid through the rabbi's charity. At a subsequent meeting, also in March 2018, respondent and the codefendant discussed that any funds destined for the friend could not be paid in the friend's name because of the friend's outstanding restitution obligations stemming from his conviction. In April 2018, respondent and the codefendant discussed that a rabbi would serve as an intermediary and take possession of any incriminating documents that the friend might possess relating to his codefendant, and would destroy those documents once the codefendant paid $6 million. In May 2018, respondent arranged a meeting between the codefendant and the rabbi, who had agreed to allow the use of his charity to facilitate transfer of the funds and took further steps to facilitate such transfer.

In late May 2018, respondent sent messages to the codefendant indicating that he no longer wanted to be involved in the transaction and asking that the codefendant contact the rabbi directly. In June 2018, respondent was arrested. Subsequent to his arrest, respondent cooperated with the government and, through counsel, provided information relevant to the codefendant to assist the government in its efforts to obtain restitution. Respondent conditionally admits that his conduct, as set forth above, violated the New York Rules of Professional Conduct.

The parties agree that respondent's conduct was aggravated by his undermining and interfering with the court's restitution order in a case where there were millions of dollars that were lost by victims of the underlying securities fraud, and that his scheme sought to interfere with the victims' efforts to recover that money pursuant to a restitution order issued by the United States District Court for the Eastern District of New York.

In terms of mitigation, the parties jointly note that respondent fully cooperated with the criminal justice system. In addition to pleading guilty, he cooperated with the government in providing information that he learned about his friend's codefendant's finances in hopes that additional funds could be uncovered for purposes of repaying innocent victims of the underlying fraud. They agree that respondent's misconduct was highly aberrational and isolated in an otherwise law-abiding life; that he promptly notified the Court and the AGC of his conviction; that he fully cooperated with the AGC's investigation and consented to an interim suspension; that he promptly accepted full responsibility for his criminal conduct and never attempted to blame anyone or anything for his misconduct; and that he expressed his sincere remorse and contrition for his misconduct. Additionally, respondent's misconduct was not motivated by personal financial gain but rather by the desire to mediate a long festering hostility between two people with whom he had deep and close connections. It is further noted that respondent voluntarily withdrew from the developing scheme; that his misconduct was not related to the practice of law; that he is well regarded in the legal community and has an excellent reputation for the character traits of honesty and integrity; that 69 individuals wrote letters to the sentencing judge attesting to respondent's reputation for good character, which reflect, among other things, his excellent reputation and his numerous, selfless acts on behalf of family, friends, and people he only knew tangentially, and which confirm that respondent has a long-standing reputation as a well-respected husband, father, friend, and community member. Finally, the parties have stipulated that respondent has taken steps to internalize the criminality of his conduct, and has used his hard-learned wisdom to help others avoid his fate, including by taking a personal ethics course and undergoing spiritual therapy sessions with a rabbi.

According to this press release of the United States Attorney for the Eastern District of New York, the rabbi also was arrested. 

Credit was given for the period of interim suspension. (Mike Frisch)

Bar Discipline & Process | Permalink