U.S. v. Weintraub

• Decision Date: 01 March 2001
• Docket Number: DEFENDANTS-APPELLANTS,Docket Nos. 99-1691
• Citation: 273 F.3d 139
• Parties: (2nd Cir. 2001) UNITED STATES OF AMERICA, APPELLEE, v. MELVIN WEINTRAUB, JOHN DAWSON, MORELITE DEV & CONST, INC AND LIBERTY REALTY ASSOCIATES, LLC,, SALVATORE NAPOLITANO, ROBERT WELSH, DOMINIC ONOFRIO, ECCO CONSTRUCTION, INC., MILL RIVER ENVIRONMENTAL CORPORATION AND ARTHUR HARRIS, DEFENDANTS. (L), 00-1368, 00-1385 August Term 2000 Argued:
• Court: U.S. Court of Appeals — Second Circuit

Page 139

273 F.3d 139 (2nd Cir. 2001)

UNITED STATES OF AMERICA, APPELLEE, v. MELVIN WEINTRAUB, JOHN DAWSON, MORELITE DEV & CONST, INC AND LIBERTY REALTY ASSOCIATES, LLC, DEFENDANTS-APPELLANTS, SALVATORE NAPOLITANO, ROBERT WELSH, DOMINIC ONOFRIO, ECCO CONSTRUCTION, INC., MILL RIVER ENVIRONMENTAL CORPORATION AND ARTHUR HARRIS, DEFENDANTS.

Docket Nos. 99-1691(L), 00-1368, 00-1385

August Term 2000

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: March 1, 2001

Decided: November 19, 2001

Defendant Melvin Weintraub appeals from a judgment of the United States District Court for the District of Connecticut (Janet Bond Arterton, District Judge) convicting him, after a jury trial, of criminal violations of and conspiracy to violate the Clean Air Act, 42 U.S.C. § 7413(c), and regulations promulgated thereunder, 40 C.F.R. §§ 61.145, 61.150.

Affirmed.

[Copyrighted Material Omitted]

Barry A. Bohrer, Esq., Morvillo, Abramowitz, Grand, Iason & Silberberg (James C. Dugan, on the brief), New York, New York, for Appellant Weintraub.

Jeffrey A. Meyer, Esq., Assistant United States Attorney (Stephen C. Robinson, United States Attorney for the District of Connecticut, on the brief), New Haven, Connecticut, for Appellee.

Before: Walker, Chief Judge, Oakes and Pooler, Circuit Judges.

John M. Walker, Jr., Chief Judge

Defendant Melvin Weintraub appeals from a judgment of the United States District Court for the District of Connecticut (Janet Bond Arterton, District Judge) convicting him, after a jury trial, of criminal violations of and conspiracy to violate the Clean Air Act ("CAA" or "the Act"), 42 U.S.C. § 7413(c)(1), (c)(2)(B), and regulations promulgated thereunder, 40 C.F.R. §§ 61.145, 61.150.

BACKGROUND

In November 1995, Weintraub, a real estate developer and the primary shareholder of defendants-appellants Morelite Development & Construction, Inc. ("Morelite") and Liberty Realty Associates, LLC ("Liberty") (collectively the "Corporate Defendants"), began negotiations with the City of New Haven, Connecticut ("the City") for the purchase of an abandoned office building located at 152 Temple Street in New Haven, with an eye to renovating the building and converting it into residential apartments. Prior to Weintraub's involvement, the City had engaged a consulting firm to evaluate the building for renovation or demolition, and that firm in turn had hired Mystic Air Quality Associates, Inc., ("Mystic") to perform an environmental analysis of the building. In reviewing the dilapidated property, Mystic prepared a report describing the presence of a considerable amount of asbestos both in floor tiles throughout the building and in insulation in the building's basement. An appraiser hired by the City estimated the building's value to be $40,000, after accounting for the building's poor condition and the estimated high cost of asbestos removal. The City provided Weintraub with the appraisal and the consultant's report, which included the Mystic report. In 1996, Weintraub and the City agreed that Liberty would purchase the property from the City for $40,000.

Morelite hired defendant Salvatore Napolitano to oversee operations at 152 Temple and defendant-appellant John Dawson as a sub-contractor to demolish the building's interior. Dawson was not licensed by the state to perform asbestos abatement. Nevertheless, throughout the demolition, employees under Dawson's supervision scraped up asbestos-containing floor tiles and removed asbestos-containing insulation from the basement. They placed the material in plastic garbage bags, which were then taped closed. At least some of the bags were dumped illegally by another defendant, Arthur Harris, at unauthorized sites including a local park and Amtrak property.

Soon after demolition began, in February 1997, a state health inspector began investigating reports that asbestos was being thrown from the windows of the building. During his investigation, the inspector noticed that asbestos-containing floor tiles had been removed and issued a warning letter that directed the defendants to hire a licensed asbestos-abatement contractor. Napolitano responded by hiring Eagle Environmental, Inc. ("Eagle") to survey the quantity and quality of asbestos in the building. In March 1997, Eagle issued a report that confirmed the Mystic report's finding of significant amounts of asbestos and stated that abatement work should be performed by a licensed contractor. Napolitano tried to bribe Eagle to provide paperwork indicating that the asbestos had been successfully abated, but Eagle refused.

In April 1997, after receiving a copy of the Eagle report but no evidence of proper abatement, the City's building inspector sent a letter to Weintraub asking when the "unsafe conditions" of the building would be eliminated. Thereafter, the building inspector and Liberty's lender continuously pressured Weintraub to produce documentation of proper asbestos abatement. In June 1997, with Weintraub's knowledge, Napolitano procured forged documents showing that abatement had been completed and provided the documents to the lender and building inspector. Based on that representation, the lender released the capital that Weintraub had sought, enabling Liberty to close on its purchase of the building in July 1997.

Both before and throughout the demolition process, Weintraub knew of the asbestos at 152 Temple Street. He received the Mystic report, which included an itemized accounting of the asbestos present in the building. He signed a demolition permit indicating that asbestos abatement would be required. He held numerous conversations with City personnel and his own employees regarding the asbestos in the building. He closely monitored Morelite's expenditures for the disposal of removed asbestos. He was told on several occasions of the need to employ the services of a licensed asbestos abatement contractor. He made a variety of statements regarding the legality of the asbestos removal. He evidenced knowledge of wrongdoing by complaining to the building inspector that the inspector should not communicate with him in writing about the building's asbestos problem. He also tried to persuade City personnel to make false statements about the defendants' compliance with asbestos regulations. And finally, he participated in the unsuccessful effort to procure phony abatement certifications from Eagle.

On September 24, 1998, a grand jury returned an eight-count indictment against all of the defendants. This was supplanted on March 10, 1999 by a superseding indictment against Weintraub, Dawson, the corporate defendants, and several other individual defendants. Napolitano, who had agreed to cooperate with the government, was named but not charged in the superseding indictment. Count One of the superseding indictment charged that the named defendants conspired to violate the CAA, 42 U.S.C. § 7413(c), by unlawfully removing and disposing of asbestos. Counts Two through Eight charged substantive violations of the CAA, the national emission standard for hazardous air pollutants for asbestos and accompanying "work practice standards" promulgated by the United States Environmental Protection Agency ("EPA") under the CAA, see 42 U.S.C. § 7412(h); 40 C.F.R. § 61.145(b), and causing, aiding, or abetting such violations, under 18 U.S.C. § 2. The substantive counts alleged improper handling and removal of asbestos- containing material and failure to notify EPA and the Connecticut Department of Environmental Protection ("DEP"), as required by EPA regulations. Prior to trial, the government voluntarily dismissed Count Eight, which alleged a failure to notify the DEP.

A jury trial was held in September 1999. At the close of the prosecution's case, Weintraub moved pursuant to Fed. R. Crim. P. 29(a) for judgment of acquittal on Counts Three to Five. Liberty made the same motion with respect to Counts Two to Seven. The district court denied the motions without prejudice to renewal. The jury returned guilty verdicts on all counts against Weintraub and the Corporate Defendants. All of the defendants renewed their Rule 29 motions and moved for a new trial pursuant to Fed. R. Crim. P. 33. The district court dismissed Counts Four and Five against Weintraub, finding insufficient evidence that he knew that the asbestos had not been properly "wetted" during removal, and Count Two against Liberty, on the basis that the corporation had not been formed at the time that it was allegedly required to report to EPA. The court denied all new trial motions.

On May 11, 2000, the district court sentenced Weintraub to imprisonment for 12 months and one day, to be followed by three years supervised release, and a $250,000 fine. Dawson was sentenced to 13 months incarceration, to be followed by three years of supervised release and a $10,000 fine. Each Corporate Defendant received five years probation and a $300,000 fine and was ordered to pay, jointly and severally, restitution of $16,600, to cover medical monitoring for workers exposed to asbestos. Finally, the district court sentenced all of the defendants jointly and severally to restitution of $6,534.08, payable to the City of New Haven and Amtrak. Weintraub, Dawson, and the Corporate Defendants appealed. In summary orders filed simultaneously with this opinion, we dispose of the appeals of Weintraub's co- appellants.¹

DISCUSSION

Weintraub alleges a host of errors in the district court, most of which do not merit discussion. Weintraub's most serious claim is that the district court erred in instructing the jury on the level of scienter that is required to prove a criminal violation of the Clean Air Act and its accompanying regulations.² In particular, Weintraub argues that the district court improperly failed to instruct the jury that the government was obligated to prove Weintraub's knowledge of "the facts underlying the essential threshold elements of the [asbestos] work-practice standards...