U.S. v. Altman

• Citation: 48 F.3d 96
• Decision Date: 16 February 1995
• Docket Number: 388,D,Nos. 253,s. 253
• Parties: UNITED STATES of America, Appellee-Cross-Appellant, v. Melvyn ALTMAN, Defendant-Appellant-Cross-Appellee. ockets 94-1108, 94-1122.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 96

48 F.3d 96

UNITED STATES of America, Appellee-Cross-Appellant, v. Melvyn ALTMAN, Defendant-Appellant-Cross-Appellee.

Nos. 253, 388, Dockets 94-1108, 94-1122.

United States Court of Appeals Second Circuit.

Argued Nov. 2, 1994.

Decided Feb. 16, 1995.

Gerald L. Shargel, New York City (Michael S. Pollok, of counsel), for defendant-appellant-cross-appellee.

Paul A. Engelmayer, Asst. U.S. Atty., New York City (Mary Jo White, U.S. Atty., S.D.N.Y., Christopher P. Reynolds, Paul Shechtman, Asst. U.S. Attys., of counsel), for appellee-cross-appellant.

Before: MINER, JACOBS and PARKER, Circuit Judges.

MINER, Circuit Judge:

Defendant-appellant Melvyn Altman appeals from a judgment of conviction and sentence entered on February 1, 1994 in the United States District Court for the Southern District of New York (Knapp, J.), following a jury trial, convicting him of four counts of mail fraud, in violation of 18 U.S.C. Sec. 1341, one count of witness tampering, in violation of 18 U.S.C. Sec. 1512(b)(3), five counts of making false statements on bank loan applications, in violation of 18 U.S.C. Sec. 1014, and two counts of subscribing to false federal tax returns, in violation of 26 U.S.C. Sec. 7206(1). Grouping the mail fraud convictions with the witness tampering and false bank application convictions for sentencing purposes, the district court sentenced Altman to a prison term of 41 months, to be followed by a supervised release term of three years. The court also ordered payment of restitution and a special assessment of $500. On the income tax counts, the court sentenced Altman to a concurrent prison term of 16 months as well as a concurrent supervised release term of one year, and ordered the payment of restitution and a $100 special assessment.

On appeal, Altman challenges his conviction on the mail fraud counts as based on insufficient evidence, contends that the Sentencing Guidelines were applied erroneously in regard to those counts, asserts that reversal of his mail fraud convictions inevitably

leads to reversal on the other counts, and argues that the district court should have departed downward on account of his medical condition and because his criminal conduct was aberrant. The government cross appeals for the purpose of challenging the district court's denial of sentence enhancements for obstruction of justice and violating a court order. For the reasons that follow, we reverse the convictions on the mail fraud counts, affirm the convictions on the remaining counts and remand for resentencing, with instructions.

BACKGROUND

I. Of "Brazil En Fete"

This is the story of a lawyer who fancied himself an impresario. Melvyn Altman, whose previous show business experience consisted of a limited practice in entertainment law, became deeply involved as financial backer, producer and counsel in a dancing and variety show that originated in Brazil. This production, known variously as "Rio By Nite," "Brazil En Fete" and "The Great Brazil Show," never made it to Broadway. After a brief run in Miami, the show opened on May 20, 1985 at the Palais des Sports in Paris. It played to sparse audiences there for a brief period and then closed for good, due to lack of funds, in early June, 1985. The show was a financial disaster, and Altman lost substantial sums of money that he had invested in the production--his own funds as well as funds that he had embezzled. The funds that were embezzled to prop up the faltering production were entrusted to Altman in a fiduciary capacity--as executor of the estate of his friend, David Haber, deceased, and as court-appointed conservator of the person and property of Armando Corsini, a mentally handicapped person.

II. Of the Haber Estate

Altman was appointed executor of the Haber estate on December 9, 1983. The estate assets totaled approximately $1.2 million dollars, and Altman, as sole executor, was responsible for collecting the estate's assets, paying its expenses, making distributions to the beneficiaries and keeping proper records. At the time of his appointment, Altman had been involved for more than a year in the production and promotion of the show, having already invested several hundred thousand dollars of his own money in the expectation of receiving 10-20% of the show's profits. By early 1984, Altman was aware that his investment was in jeopardy, because the company responsible for securing financing for the production, LRC Inc., was running short of cash. Altman was a director of LRC and, in October of 1984, Barry Kaplan, the president of the company, advised him in writing that an infusion of money was necessary to avoid a total loss.

Commencing in July of 1984, Altman embarked on a course of looting the Haber estate and transferring the funds into the bottomless pit that the show had become. He went about the removal of the funds by liquidating the estate's certificates of deposit and treasury bills, depositing the proceeds into the estate bank account and then drawing checks for the use of the show. In July and August of 1984, Altman converted $115,000 of estate funds. After hearing in January of 1985 from Marvin Krauss, the show's general manager, that the entire investment would be lost if additional funds were not forthcoming, Altman converted an additional $380,000 between February and April of 1985. Of the total amount embezzled from the estate, approximately $125,000 was passed through Altman's personal bank account and the balance was passed principally to the producer and director of the show and to the wire-transfer company that paid the show's expenses.

Edith Haber, widow of David Haber and principal beneficiary of the Haber estate, was represented by attorneys Arthur Brown and Dean Braslow. Between 1985 and 1989, the attorneys repeatedly called upon Altman to make distributions to their client, who was ill, elderly and in need of funds. Altman falsely represented to them that the estate money was tied up in certificates of deposit and treasury bills and that an IRS audit was pending. In 1986 and 1987, Altman disgorged four $50,000 payments to Edith Haber after her attorneys threatened to take action against him in the Surrogate's Court. Edith Haber died in January of 1988, and After some delay, Altman submitted an accounting to Braslow on April 10, 1989. Braslow signed the receipt that Altman had prepared, acknowledging that he had received "Melvyn Altman's First Intermediate Accounting For The Estate of David Haber." Included in the accounting was a statement that the estate had made loans in the aggregate amount of $495,000 to a "theatrical production company in Europe," with interest accruing at 10% per annum. Also included was a representation that the balance of the principal remaining due on the loans, $93,500, together with interest in the total sum of $91,528.48, would be paid on August 1, 1989. There never were any "loans" as such and, even if there were, the production company could not repay them, having ceased to exist four years earlier. Altman had taken $37,000 in executor's commissions and secured Braslow's consent to credit himself with $20,000 more. It was not until November of 1990, however, that Altman raised the money to provide the Edith Haber estate with the final payment due from the David Haber estate.

her attorneys pressed Altman for further information and for distributions to her estate. Continuing to receive unsatisfactory answers to their inquiries, the attorneys in late 1988 petitioned the Surrogate's Court for an accounting. That court ordered Altman to account for his actions as executor.

The accounting was false in another respect, because it failed to reveal the repayment of a $50,000 loan that Altman had received on behalf of the David Haber estate from Richard Gamsu, a friend of David Haber. Gamsu had executed to Haber a promissory note, with a due date of January 28, 1984, as evidence of the debt. Altman received full payment on the note in January of 1984 and deposited it in his own account. He never returned the money to the estate and never listed it as an estate asset at any time. When reviewing the accounting with the attorneys who had pressed him to provide it, Altman represented that the debt had been repaid before Haber's death and was omitted from the accounting for that reason. In January of 1992, during the course of an FBI investigation, Gamsu stated that he owed no money to the Haber estate but that Altman had borrowed $50,000 from him, an amount still unpaid. Later, Gamsu admitted that he owed Haber the $50,000 at the time of Haber's death, that he had never loaned the money to Altman and that he had lied because Altman, who was a close friend, asked him to do so.

III. Of the Corsini Conservatorship

By order of the New York County Surrogate's Court dated January 9, 1985, Altman was appointed Conservator of the Person and Property of Armando Corsini. Armando's father, Andrea Corsini, had died on July 26, 1984 leaving an estate then valued at approximately $106,000. Armando was the sole distributee of the estate. He also was the beneficiary of nine Totten Trust bank accounts established by his father having a total value in excess of $246,000. Carlos Agosto, with whom Armando lived, filed a petition to be appointed conservator, but a guardian appointed by the court testified that Mr. Agosto did not have the necessary skills to discharge the duties required. Accordingly, the court appointed Altman as conservator for Armando Corsini and later appointed him administrator of the estate of Andrea Corsini.

Although a conservator is required by New York law to file a sworn accounting in January of each year describing the condition of his stewardship, Altman did not file his 1985 accounting until March 2, 1987. This filing came only in response to threats by a referee that a removal proceeding would be instituted if Altman failed to account. The referee was appointed by the court to review each...