United States v. Silver
| Decision Date | 03 May 2016 |
| Docket Number | 15-CR-093 (VEC) |
| Parties | United States of America, v. Sheldon Silver, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Andrew Daniel Goldstein, Carrie Heather Cohen, Howard Seth Master, U.S. Attorney's Office, James M. McDonald, US DOJ, New York, NY.
Joel Cohen, Stroock & Stroock & Lavan LLP, Joel Barry Rudin, Law Offices of Joel B. Rudin, Justin Vaun Shur, Steven Francis Molo, Tuongvy Le, Justin Michael Ellis, MoloLamken, LLP, New York, NY, Robert Kelsey Kry, MoloLamken LLP, Washington, DC, for Defendant.
After a twelve-day jury trial, twenty-five witnesses, and three days of jury deliberations, on November 30, 2015, Sheldon Silver, former Speaker of the New York State Assembly, was convicted on two counts of honest services mail fraud, 18 U.S.C. §§ 1341, 1346, two counts of honest services wire fraud, 18 U.S.C. §§ 1343, 1346, two counts of extortion under color of official right, 18 U.S.C. § 1951, and one count of money laundering, 18 U.S.C. § 1957. Silver renews his motion pursuant to Rule 29 for a judgment of acquittal and moves pursuant to Rule 33 for a new trial. For the following reasons, Silver's motions are denied.
Silver orchestrated two criminal schemes that abused his position as the Speaker of the New York State Assembly and as an elected Assemblyman for unlawful personal gain. The two schemes follow the same basic model: Silver received bribes and kickbacks in the form of referral fees from third party law firms in exchange for official actions. Silver also engaged in money laundering pursuant to which he invested the proceeds of his unlawful schemes into private, exclusive investment vehicles.
The first scheme is the "Mesothelioma
Scheme." In the fall of 2002, Silver became "of counsel" to the personal injury law firm Weitz & Luxenberg. Tr. 1181. Silver received a fixed salary for lending his name to the firm (Silver was not expected to and did not perform any legal work for the firm's clients) and received a referral fee for any case he brought into the firm; his referral fee was a set percentage of the fees earned by the firm on any case Silver referred to the firm. Tr. 180–81, 184–86, 1010, 1016, 1182. Mesothelioma cases were particularly lucrative, generating on average hundreds of thousands of dollars in legal fees per case; the firm did not donate to mesothelioma medical research. Tr. 176–77, 262, 273, 1149, 1188, 1206–09.
Dr. Robert Taub, a physician-researcher at Columbia-Presbyterian Hospital, specialized in mesothelioma
, a rare cancer caused by exposure to asbestos. Tr. 249–51. Dr. Taub sought funding for mesothelioma medical research, and, aware of the value of these cases to law firms, he believed that firms that profit from mesothelioma cases should donate to support mesothelioma research. Tr. 262–64. As of 2003, Dr. Taub knew that Weitz & Luxenberg had not donated any substantial sums to mesothelioma research. Tr. 264–65. For that reason, Dr. Taub did not refer his patients to the firm for legal representation. Id . In 2003, Dr. Taub, who was an acquaintance of Silver, approached Silver at an event to ask him to encourage Weitz & Luxenberg to donate money to mesothelioma research. Tr. 265, 267–68. Silver, without consulting anyone at the firm, responded that he could not get Weitz & Luxenberg to do so. Tr. 191, 268. But, within two weeks, through a mutual friend (Daniel Chill, who had introduced them), Silver made it known to Dr. Taub that he wanted Dr. Taub to refer mesothelioma cases to Weitz & Luxenberg through him. Tr. 269–70, 273. Responding to that request, Dr. Taub started referring mesothelioma patients who were not represented to Silver for legal representation; Dr. Taub explained that he wanted to develop a relationship with Silver that would help him receive research funding. Tr. 273–74, 276. In addition to referring patients to Silver, Dr. Taub also gave the patients' contact information to Silver. Tr. 284–87. Although Dr. Taub did not know the specifics of the financial arrangement between Silver and the firm, he thought Silver would benefit financially. Tr. 274. Silver made it known to Dr. Taub that he was pleased with the referrals. Id. Over approximately ten years, Silver received roughly $3 million in referral fees for cases referred by Dr. Taub. Tr. 276, 1016; GX 1509.
Several months after Dr. Taub began referring patients to Silver, Silver made it known to Dr. Taub that he should request state funding through Silver. Tr. 273–74. In 2005, a few months after Silver received his first referral fee check from Weitz & Luxenberg for $176,048.02, he approved the first of two $250,000 New York State grants to Columbia University to support Dr. Taub's research. Tr. 275, 661–62, 674–76, 1028–33; GX 115, 284, 514–1. The grants were funded out of the Health-Care Reform Act ("HCRA") Assembly Pool; Silver alone controlled this pool of tax-payer money. Tr. 654–59, 663–64, 672, 674, 897–900. Silver did not publicly disclose the grants. Tr. 100, 654–59, 899. Silver never asked Dr. Taub about the progress of his research or about the connection between any predicted upsurge in mesothelioma
cases and the discharge of asbestos particles into the air as a result of the collapse of the World Trade Center on September 11, 2001. Tr. 637. Dr. Taub presumed that his mesothelioma referrals were a factor in Silver's decision to approve the grants. Tr. 639.
In 2007, the law changed, requiring Silver to disclose the recipients of HCRA grants and requiring disclosure of conflicts of interest. Tr. 748–52, 754, 762–63. Although there were sufficient funds available for Silver to continue to support Dr. Taub's research, Tr. 732–33, 752–54, 758–62, after the change in the disclosure requirements, Silver told Dr. Taub, in substance, that further requests for state grants would not be approved. Tr. 339–40, 636–37. Nevertheless, Dr. Taub continued to send mesothelioma
leads to Silver in hopes that by incentivizing him, Silver would find a way to support his research. Tr. 340. Starting in 2010, Dr. Taub started sending some mesothelioma leads that he would otherwise have given to Silver to the Simmons Law Firm (another personal injury law firm that handles many mesothelioma cases) because the Simmons Firm began funding his research. Tr. 368, 375–76. As the number of referrals from Dr. Taub waned, Silver appeared, uninvited, in Dr. Taub's office to complain that he was receiving fewer referrals; Dr. Taub told Silver that he was sending mesothelioma leads to the Simmons firm, which was funding his research. Tr. 376–77. Dr. Taub understood from this conversation that Silver wanted more leads, and he continued to provide some leads to Silver in the continuing hope that Silver would help fund his research as the opportunity arose. Tr. 378.
Although Silver did not facilitate any additional funding for Dr. Taub's research, he did take other official actions on behalf of Dr. Taub. In May 2011, Silver rushed his staff to prepare a New York Assembly resolution and official proclamation so that Silver could present it to Dr. Taub at a public event. Tr. 388–93, 1260–63, 1265–66. In August 2011, Silver agreed to help Dr. Taub secure the necessary permits for a charity run to benefit mesothelioma
research. Tr. 401–410; GX 525–21. Dr. Taub thought at the time that Silver would likely want something—probably referrals—in return for his help, which Dr. Taub described as a "pattern" when dealing with Silver. Tr. 401–02, 407. Finally, in February 2012, at Dr. Taub's request, Silver helped Dr. Taub's son get a job with Ohel, a not for profit organization that received substantial discretionary state funding controlled by Silver (including a $2 million grant and a total of $6 million in funding over a ten-year period). Tr. 413–416, 718–26, 1295; GX 316. Silver called Ohel's CEO twice and sent him a letter on Assembly letterhead relative to the younger Taub. Tr. 1533–35, 1538–39; GX 167–3. Silver had never previously nor has he subsequently asked Ohel to hire anyone. Tr. 1534.2
Silver concealed his arrangement with Dr. Taub from Weitz & Luxenberg. Although the attorneys at Weitz & Luxenberg knew that Silver's mesothelioma
referrals were coming from Dr. Taub, Silver did not tell the firm that he was allocating state funding to Dr. Taub's research. Tr. 189, 202–03, 1020, 1154–56, 1183–84, 1186. Silver also did not disclose the fact that he was receiving referral fees for mesothelioma cases sent by Dr. Taub to his press officer, to fellow Assembly members, or to Department of Health officials responsible for administering the grants Silver provided. Tr. 100, 933–35, 965, 2188–89, 2193–94, 2206. Silver asked Dr. Taub not to tell their mutual friend, Mr. Chill, about any further referrals, even though Mr. Chill had facilitated Dr. Taub's introduction to Silver to request research funding. Tr. 288–89. Silver did not include on his financial disclosure forms that his compensation as a lawyer included referral fees for mesothelioma
cases. Tr. 2115; GX 913–924, 2009. Finally, Silver's press statements indicated that his law practice consisted of representing individual claimants in personal injury actions, reviewing medical malpractice cases one half day per week, and referring those cases to trial lawyers at Weitz & Luxenberg. Tr. 2224–27; GX 1–3. He said he obtained clients based on his public reputation as a lawyer. Id . Although Silver mentioned in passing in one statement to the press that he handled asbestos cases, GX 1, he never disclosed that he received referrals from a doctor whose research was funded by HCRA grants controlled by Silver.
The second scheme is the "Real Estate Scheme." Glenwood Management and the Witkoff Group are two major real estate developers in New York. Both companies depend heavily on the New York State government for favorable rent...
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