Haredi über-thief Eliyahu Weinstein, who stole allegedly stole at least $200 million (some government estimates allegedly approach $1 billion) and pleaded guilty to stealing $50 million made another try to withdraw his guilty plea last week and the government slapped it down with no evident difficulty Friday. Here is what the government alleges:
The government writes:
…Weinstein seeks yet again to withdraw his guilty plea. First it was the Government’s fault: it supposedly violated the plea agreement by daring to bring new charges against Weinstein for committing new fraud after he pleaded guilty. Next it was this Court’s fault for supposedly violating Rule 11 by involving itself in plea negotiations. Now Weinstein chastises not only the Government, but also his attorneys at Proskauer, who Weinstein alleges labored under actual or potential conflicts of interests because two Proskauer attorneys were present for a meeting with Morris Rotenstein in or around February 2011 concerning a purported insurance transaction (the “February 2011 Meeting”), and then advised Weinstein to plead guilty nearly two years later in January 2013 in the face of overwhelming evidence.
Weinstein’s latest salvo fails for at least five reasons. First, he ignores the controlling legal standard. Because the issue was not raised before Weinstein pled guilty, no prejudice can be presumed. See Mickens v. Taylor, 535 U.S. 162, 166 (2001). Instead, Weinstein has the burden of showing that the conflict in question significantly affected his counsel’s performance. Only then will prejudice be presumed (here, pleading guilty where Weinstein would have gone to trial had he been represented by conflict-free counsel). Since Weinstein cannot show – indeed, has not even alleged – an adverse impact on his decision to plead guilty, his motion should fail. In fact, Weinstein has not even shown an actual conflict of interest to begin with.
Second, Weinstein was represented by incontestably conflict-free counsel throughout the relevant time period: Henry E. Klingeman. Mr. Klingeman became Weinstein’s lead counsel on July 22, 2011. David I. Schoen, an experienced litigator from Alabama, entered on September 23, 2011. Mr. Klingeman and Mr. Schoen were therefore Weinstein’s counsel when the Indictment was issued in October 2011, and so had more than a year to investigate the circumstances of the February 2011 Meeting and the purported insurance transaction that supposedly resulted in Proskauer’s conflict. Moreover, Mr. Klingeman was still Weinstein’s counsel of record at the plea hearing; and he received the Jencks material at the same time that the Proskauer attorneys did. Yet at no time did Mr. Klingeman suggest to this Court (or the Government) that Proskauer might be laboring under a potentially disqualifying conflict of interest.
Third, Weinstein’s analysis attempts to squeeze a square peg into a round hole. This case is different – profoundly different – from the ones cited in Weinstein’s motion. So far as the Government can tell, Proskauer’s attorneys did nothing to intentionally further Weinstein’s fraud, nor witnessed any events that would have required their testimony at any trial.
The Government has never alleged that the purported insurance transaction underlying the February 2011 Meeting was itself illegal – or, indeed, that anything at all untoward happened at the meeting Mr. Harris attended. Instead, the problem with what Weinstein did to Mr. Rotenstein – the reason that he defrauded Mr. Rotenstein – is the same reason that undergirds all of the other counts in the Indictment: Weinstein said one thing to his victim, and did another thing with the money. Weinstein proposed a legitimate insurance transaction to Mr. Rotenstein. On February 16, 2011, Mr. Rotenstein then provided approximately $101,700 to the account specified by Weinstein. By the end of the day on February 17, 2011, all of that money was gone, to approximately eleven different recipients, as well as $9,000 in cash withdrawals. In less than 48 hours, Weinstein spent all of Mr. Rotenstein’s money: on private school tuition for his children; on payments to prior victims, and on $2,000 in groceries from a kosher supermarket in Lakewood, Weinstein’s home town, among other things. The issue is therefore not what, if anything, Mr. Harris said to Mr. Rotenstein about the validity of the purported insurance transaction. The issue is rather what Weinstein said, on the one hand – which the Government would have elicited from Mr. Rotenstein, not from Mr. Harris – and what Weinstein did with Mr. Rotenstein’s money, on the other hand. The only necessary witness to this transaction, besides Mr. Rotenstein, would have been an FBI summary agent, to explain the attached flowchart. (GX 1523, attached hereto as Exhibit A).
Fourth, Weinstein’s own motion is internally inconsistent. In typically strong language, Weinstein initially alleges that the Government and Proskauer somehow hid the ball regarding Mr. Harris’s attendance at the February 2011 Meeting. (Dkt. No. 137 at 1-4.) But then, later in his motion, Weinstein lists three different instances in which the defense made this Court aware of Harris’s presence at the February 2011 Meeting: in Weinstein’s pretrial motion papers, and twice on the record at pretrial hearings. (Id. at 9.) How could this Court be unaware of something that Weinstein’s attorneys – Weinstein’s unquestionably unconflicted attorneys, Mr. Klingeman and Mr. Schoen – put in their motion papers and repeatedly put on the record? Mr. Harris’s attendance at the February 2011 Meeting was known all along to the Court, to defense counsel about whom there is no claim of conflict, and of course to Weinstein himself.
Fifth, the logic of Weinstein’s latest motion is preposterous. To succeed it would require this Court to accept all of the following:
a. that Proskauer entered the case in December 2012 hell-bent on taking the case to trial (despite the documented fact that the parties had been discussing various plea possibilities for months, and despite the fact that Weinstein had belatedly signed a counteroffer to an earlier plea agreement just before Proskauer’s entry into the case);
b. that although Proskauer entered the case raring to go to trial, it encountered the Jencks material regarding the February 2011 Meeting, immediately made a 180 degree turn to save their own professional skins (and even stay out of jail), and forced Weinstein to take a plea that he otherwise would not have accepted (despite the fact that Proskauer managed to negotiate, for a defendant who stole more than $200 million, a plea with a possibility of probation);
c. that Proskauer counseled Weinstein to take a plea after reading the Jencks not because the Jencks consisted of dozens of absolutely devastating memoranda detailing the overwhelming evidence of Weinstein’s vast, sophisticated, and brazen fraud, and the statements of the witnesses who would take the stand and destroy any possible defenses, but rather because two pieces of Jencks mentioned a meeting regarding an insurance transaction that could well have been legitimate if carried out as described;
d. that Mr. Harris had somehow either forgotten his attendance at the February 2011 meeting, or, more nefariously, knew all along that he was the next target of the Government’s investigation, and so deliberately entered into a case in which he had a “blatant, “obvious,” and “serious” conflict of interest in a plot to force Weinstein into a guilty plea for the sole purpose of burying Mr. Harris’s own misdeeds in the graveyard of foregone trials;
e. that Weinstein’s unquestionably conflict-free attorney, Mr. Klingeman (who wrote the pretrial motions describing the February 2011 meeting and Proskauer’s role in it, and who was present at both of the oral arguments which raised the February 2011 meeting, and Proskauer’s role in it) also advised pleading guilty because he was either complicit in Proskauer’s scheme to force Weinstein to plead guilty or completely incompetent;
f. that after Weinstein’s current counsel entered this case on August 14, 2013, neither he nor anyone at his firm read any of the Jencks for over four months, and only recently discovered the February 2011 Meeting; and
g. that the real reason Weinstein first advanced this issue on December 23, 2013 – three hundred and fifty four days after he pled guilty – is not because Weinstein is desperately trying to delay sentencing or escape his guilty plea so that he can, in the words of one of his new “of counsel” “reach a global settlement [of Weinstein I and II] through negotiation and consent” (and on better terms to Weinstein), but rather because he never would have pled guilty absent Proskauer’s irredeemable conflict.
If the Court does not buy every single one of those preposterous propositions, then Weinstein’s current motion, like his previous attempts to withdraw his guilty plea, must fail.…
In sum, Weinstein’s most recent motion should be viewed in the context of this case as a whole: it is part and parcel with Weinstein’s desperate strategy to escape the consequences of a guilty plea that he entered into freely and voluntarily, represented by conflict-free counsel, nearly a year ago, because he now been caught committing yet more fraud, because he has provided not a dime of restitution to his victims, and because he rightly fears a lengthy prison term for his enormous, long-running fraud scheme. This latest motion is more of the same, and the Court should treat it as such. For all these reasons, Weinstein’s most recent allegations, nearly a year after his plea, and just days before his sentencing, of nefarious schemes by his own attorneys cannot be trusted. His motion should be denied.
In a footnote, the government takes a very strong shot at Weinstein's latest attorney, Eric Creizman, who appears to me to be a hairsbreadth away from being sanctioned:
Mr. Harris is the target of particularly savage attacks by Weinstein, in a style that is now sadly familiar to this Court. This is unfortunate. Mr. Harris is a partner at a major law firm. He is a former Assistant United States Attorney. He clerked for two different Justices of the United States Supreme Court. For Weinstein to publicly file statements like “Harris could be viewed as a co-conspirator and accomplice of Weinstein since Harris aided and abetted the charged insurance transaction scheme”; “Harris can be easily viewed as having facilitated Weinstein’s charged fraud by encouraging an alleged ‘victim’ to invest in the scheme”; “Harris (and possibly other Proskauer lawyers) could have been (and still can be) charged with or professionally disciplined for the subject insurance transaction”; “Harris appeared equally oblivious to his ethical obligations”; and “Harris showed questionable judgment, as well as ethical myopia” – certainly does call into question the judgment and the ethics of someone involved in this case, but it is not Mr. Harris. The Court has been forced to deal with this type of conduct before. At a recent hearing, the Court stated, “Mr. Creizman, I don’t know what the standards of practice are that you abide by, but one thing we expect in this court is common courtesy among adversaries and refraining from vituperative, sarcastic language. . . . It is insulting, Mr. Creizman.” (Nov. 25, 2013 Tr. at 25.) Unfortunately, the Court’s message appears to have been ignored by Mr. Creizman.
The standards of practice are simple, clear and should be intuitive. “The Guidelines For Litigation Conduct” adopted by the American Bar Association’s Section of Litigation in August 1998 have been incorporated into this Court’s Local Rules, and apply in both civil and criminal cases.
You can read the entire government filing by downloading this PDF file: