224 F.3d 107 (2nd Cir. 2000), 99-1671, United States v Berger
|Docket Nº:||Docket Nos. 99-1671(L), 99-1672, 99-1673, 99-1674|
|Citation:||224 F.3d 107|
|Party Name:||UNITED STATES OF AMERICA, Appellee, v. CHAIM BERGER and AVRUM DAVID FRIESEL, a/k/a "David Friesel," a/k/a "Avraham Friesel," a/k/a "A. David Friesel," a/k/a "Aron Friesel," Defendants, KALMEN STERN, DAVID GOLDSTEIN, Esq., JACOB ELBAUM, a/k/a "Yitzchok Elbaum," and BENJAMIN BERGER, Defendants-Appellants.|
|Case Date:||August 25, 2000|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Argued: May 15, 2000
Appeal from the judgments of the United States District Court for the Southern District of New York (Barbara S. Jones, District Judge), convicting the defendants-appellants of conspiracy to defraud the federal government, as well as various substantive crimes, based upon jury verdicts of guilty.
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NATHAN LEWIN, Miller, Cassidy, Larroca & Lewin, L.L.P., Washington, DC (James R. Heavner, Jr., Miller, Cassidy, Larroca & Lewin, L.L.P., Washington, DC, Elkan Abramowitz, Morvillo, Abramowitz, Grand, Iason & Silberg, P.C., New York, NY, and Charles A. Stillman, New York, NY, of counsel, on the brief) for Defendants-Appellants Kalmen Stern and Jacob Elbaum,
HARVEY M. STONE, Schlam Stone & Dolan, New York, NY (Nathan Lewin, James R. Heavner, Jr., Miller, Cassidy, Larroca & Lewin, L.L.P., Washington, DC, and Michael Rosen, New York, NY, of counsel, on the brief) for Defendant-Appellant David Goldstein,
MICHAEL F. ARMSTRONG, Kirkpatrick & Lockhart, LLP, New York, NY (Nathan Lewin, James R. Heavner, Jr., Miller, Cassidy, Larroca & Lewin, L.L.P., Washington, DC, of counsel, on the brief) for Defendant-Appellant Benjamin Berger,
DEBORAH E. LANDIS, Assistant United States Attorney (Mary Jo White, United States Attorney, Joanna C. Hendon, Christine H. Chung, Assistant United States Attorneys, of counsel, on the brief), Southern District of New York, New York, NY for Appellee.
Before: CARDAMONE, MINER, and WALKER, Circuit Judges.
JOHN M. WALKER, JR., Circuit Judge:
Defendants-appellants Kalmen Stern ("Stern"), David Goldstein ("Goldstein"), Jacob Elbaum ("Elbaum"), and Benjamin Berger ("Berger") appeal from the November 1999 judgments of conviction entered and sentences imposed by the district court upon jury verdicts of guilty. They raise a number of issues on appeal. First, and most importantly, the appellants allege that they were improperly convicted of the fraud conspiracy charged in the indictment because the evidence showed multiple conspiracies rather than a single conspiracy and this variance was substantially prejudicial. Second, Berger
contends that his convictions should be reversed because the evidence was insufficient to sustain the conspiracy charge against him and there was a constructive amendment of the major substantive charge against him. Third, Goldstein argues that his convictions should be reversed because he withdrew from the conspiracy in 1991 and thus most of the charges against him were time-barred. Fourth, all four appellants claim that the district court erred in rejecting their claim under Batson v. Kentucky, 476 U.S. 79 (1986), concerning the prosecutor's use of a peremptory challenge to strike a Jewish prospective juror. Finally, they allege that the district court erred in enhancing their sentences under U.S.S.G. § 2F1.1(b)(4)(A) for misrepresentation of affiliation with an educational institution.
We conclude that: (1) the appellants were properly convicted of the conspiracy as charged because the evidence was sufficient to support a jury finding of a single conspiracy rather than multiple conspiracies; (2) Berger's convictions should be upheld since there was sufficient evidence of his knowing participation in the conspiracy and no constructive amendment of the charges against him; (3) Goldstein's convictions should be upheld because he did not establish withdrawal as a matter of law; (4) the district court properly rejected the Batsonclaim; and (5) the court properly enhanced the appellants' sentences for misrepresentation of affiliation with an educational institution. Accordingly, we affirm the judgment of the district court in all respects.
The original indictment charged the appellants and two other defendants (now fugitives), Chaim Berger and Avrum David Friesel, with conspiracy and substantive counts based upon their participation in a massive conspiracy to defraud the Department of Education ("DOE"), the Department of Housing and Urban Development ("HUD"), the Small Business Administration ("SBA"), the Social Security Administration ("SSA"), and the Internal Revenue Service ("IRS"). A redacted indictment, used at trial, eliminated charges against the fugitive defendants. Count 1 of the redacted indictment charged all four appellants with conspiracy to defraud several federal agencies. The remaining counts charged the appellants, in various combinations, with substantive crimes relating to this conspiracy, including embezzlement, mail fraud, wire fraud, false statements, money laundering, filing a false tax return, and failing to file a tax return.
The evidence at trial, taken in the light most favorable to the government following the jury verdict in its favor, revealed that the appellants -- most of whom resided in New Square, a Hasidic Jewish community in Rockland County, New York -- participated in a massive conspiracy to obtain by fraud millions of dollars in student financial aid, rental subsidies, social security benefits, and small business loans. All four appellants participated in a fraud upon the DOE, which formed the centerpiece of the government's case, but the government also proved that the conspirators or subsets of them victimized other agencies as well. They also concealed their income to increase the amounts they could obtain under federal subsidy programs and reduce their tax liability. The conspiracy involved a number of other participants, including major figures in the New Square Hasidic community. We now examine the scheme in greater detail.
First, the conspirators defrauded the DOE's Pell Grant Program by falsely enrolling thousands of New Square residents and others in schools offering mentor-based independent study programs. Many students never actually studied at these institutions, even though the conspirators prepared a paper record of their academic progress. Ultimately, most of the false students were enrolled at Toldos Yakov Yosef Seminary ("TYY"), an institution that purported to employ all four appellants
and received over $11 million in Pell Grants but never existed except on paper. As part of the conspiracy, the conspirators made extensive efforts to deceive the Accrediting Council for Continuing Education and Training ("ACCET") in order to gain accreditation for TYY so that the school could qualify for federal aid.
Each of the appellants played a role in TYY. Elbaum was named as Board Secretary and had signature authority over bank accounts into which Pell Grant funds were wire-transferred and out of which payments were made to community organizations, to conspirators, and to the DOE (to repay student loans). Stern was named as Administrator (1987-88); pretended to be Arye Reich, the supposed Registrar -- who was living in Israel at the time -- during ACCET visits; and made false statements to the accreditors in this capacity. Goldstein was named as Administrator (1988-91) and helped deceive the accreditors in 1989. He resigned in 1991 and later served on the ACCET Board of Trustees. In addition, he made statements to a DOE investigator in 1996 that maintained the fiction of TYY, identifying officials and claiming to have fulfilled the duties of Administrator while at TYY. Finally, Berger served as an alleged mentor, and paychecks for supposed TYY employee Cheindel Bernat -- Ayre Reich's daughter, who also lived in Israel -- were deposited into a bank account controlled by Berger in Bernat's name.
Second, the conspirators defrauded HUD's Section 8 housing subsidy program. Elbaum and Stern failed to report to HUD payments they received from accounts controlled by Chaim Berger, thus fraudulently increasing the amount of Section 8 subsidies for which they could qualify as tenants. Benjamin Berger fraudulently obtained Section 8 rent payments as a landlord by disguising his ownership of property in New Square -- placing it in Cheindel Bernat's name -- and then depositing checks from HUD in an account he controlled in Bernat's name. In addition, Berger obtained greater subsidies as a Section 8 tenant in Spring Valley by failing to report the income he received as a shadow landlord.
Third, various conspirators, including Goldstein and Stern, participated in schemes to defraud the SSA and the SBA, the details of which are not relevant to this appeal.
Fourth, the conspirators attempted to disguise from the IRS the income that they had diverted to the New Square community and to themselves through the above schemes. Elbaum and Stern received proceeds through off-the-books payments made from accounts controlled by Chaim Berger. Elbaum also failed to file a tax return for one year. Finally, Berger received and concealed income through his control of an account in Cheindel Bernat's name.
The defendants moved to dismiss some or all of the counts against them on various grounds. The district court denied these motions. See United States v. Berger, 22 F.Supp.2d 145 (S.D.N.Y. 1998); United States v. Stern, No. 97-CR-410(BSJ), 1998 WL 813477 (S.D.N.Y. Nov. 19, 1998). On issues relevant to this appeal, the district court held that: (1) the conspiracy charge did not improperly combine multiple distinct crimes into a single count; (2)...
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