Thursday, June 23, 2011

Sunny Sheu - Was He murdered Because He Had Information About Judge Joseph Golia?

I knew Sunny. Not well, but he and I corresponded many times about his case, and we ironically met for the last time at a cocktail party for our new Attorney General, Eric Schneiderman.

I have posted his story on this blog and on my website,
Sunny Sheu, Judicial Reform Activist, Dies A Few Months After Saying He Was Pursued By Judge Joseph Golia in Queens Supreme Court

In my article is the video that Sunny did just 3 days before he died/was killed (The police dept evidently cremated his body before an investigation took place)

Sunny desperately wanted an investigation of the Judge Joseph Golia, and considered Schneiderman a step in the right direction. Instead, we are investigating the death of Sunny Sheu.

See a summary here.

Activist Dead Weeks After Posting Video About His Fears
Black Star News

Part One of a Series

Since his death last summer, associates of Sun Ming Sheu, an activist fighting alleged judicial corruption in New York, remain convinced that he was murdered and that police aren't investigating his death because of a coverup.

They point to the alleged kidnapping and death threats by New York Police Department (NYPD) officers Sheu reported to the FBI, the highly suspicious circumstances of Sheu’s injury, the contradictions in the official reports of his death, and most conspicuously, the lack of any investigation by law enforcement, even after the manner of Sheu’s death was ruled "undetermined" by the Medical Examiner, making an investigation legally mandatory.

They also cite a motive- the silencing of Sheu three days after he declared that he had discovered proof of felonies by a New York State Supreme Court Judge.

Perhaps the most ominous evidence of foul play, the associates say, is the video Sunny Sheu made weeks before his death - now posted on Youtube - in which he predicts his own murder and names the parties he feels will be responsible; parties including a sitting State Supreme Court Judge and two detectives of the Queens District Attorney office whom he had claimed "kidnapped" and threatened him months prior.

Sheu’s associates also question why NYPD officers removed Sheu's body from the Queens hospital, at 5 AM, hours after his death, and transferred it to the Medical Examiner, who was provided with a letter stating that "no criminality" was involved, all without even a cursory investigation.

At the same time, the precinct involved in the removal, the 109, insisted that Sheu had suffered "no head trauma", a position contradicted by the Medical Examiner, who concluded that Sheu died of "blunt force trauma to the head with skull fractures and brain injuries".

Darkening the story further is the improper treatment of Mr. Sheu’s body by the New York Queens Hospital and their false statements regarding his injuries. (The role of the New York Hospital of Queens in the disposition of Sheu’s body will be elucidated in part two of this series.)

Add the epilogue of the NYPD's refusal to release relevant documents requested by this newspaper under the Freedom of Information Act (FOIA)- and all the components of a deeply disturbing mystery are in place.

Whatever the direct cause of Sunny Sheu’s tragic death, this is a story of grave national concern; it demonstrates from beginning to end the systemic failure of our government to protect the rights, and even the life, of a resident of the United States who had been threatened by government officials.

I first met Sun Ming "Sunny" Sheu, an immigrant from Taiwan, when he asked me to write a story about his ten-year struggle with corruption at every level of New York government. Mr. Sheu was a small, wiry man, with a mischievous sense of humor who could express fierce outrage one moment and chuckle at the absurdity of it all the next. Though his English was rudimentary, he radiated intelligence, and humble self-assurance. He felt that fighting for one’s rights was a patriotic duty, a privilege of living in America that was to some degree its own reward.

Sheu’s problem centered around his residential property, a simple two story house in Flushing, which he said had been wrongfully wrested from him by a mortgage company with the aide of a judge, Joseph Golia of State Supreme Court in Queens. He claimed Golia was "corrupt" and had consistently ruled against him and in favor of the bank, to wrongfully ensure that he never recovered his property.
Judge Joseph Golia

Judge Golia, through his law clerk Mitchell Kaufmann, today declined to comment or to be interviewed for this report. "The judge will not sit for an interview with you," Kaufmann said, adding that Judge Golia also would not respond even if the questions were submitted in writing and by email message.

Sheu’s story of his struggle with Judge Golia was so compelling that The Black Star News covered it in depth, in a three-part series entitled "Junk Justice", which ran beginning in July 2009. The articles, which provide a detailed account of Sheu’s struggle with mortgage fraud and alleged court corruption can be found online. What follows is a condensed and cursory version of the pertinent events.

The Background Story

Sheu's ordeal began over 10 years ago when a bank representative knocked on his door and said he was there to inspect the house for its new owner. The problem was that Sheu had never sold the house. It turns out that someone had forged critical documents and used them to illegally sell the property.

Sheu alerted all relevant authorities; including the police, the bank that held the mortgage, and the title insurer of the property. Eventually the parties involved in forging the documents were prosecuted, pleaded guilty to forgery, and went to jail.

Sheu hoped that with all the evidence in his favor, the matter would be quickly resolved--it was actually only the beginning of his nightmare.

But Centex Home Equity, the bank that held the original mortgage, acted as if the fraudulent sale had been legitimate, ignoring all the documentation submitted by Sheu regarding the fraud, including the police report he'd filed.

Centex filed a lawsuit on December 12, 2001, against Sheu in State Supreme Court, in Queens County. The bank wanted a default judgment on the property and foreclosure, claiming that the “new owners” were delinquent on mortgage payments. In reality, of course, there was never any legal “new owner”.

The Centex case against Sheu went before Judge Golia, in Queens County. Sheu said he was stunned when Judge Golia also ignored the obvious fact that the “sale” had been fraudulent, which would obviate the claim against him. Instead of immediately restoring Sheu’s rightful ownership, he said, Golia allowed the lawsuit to proceed, eventually leading to the foreclosure of Shue’s home.

Worse yet, the judge let the case drag out for 10 years, with numerous postponements, in essence milking Sheu of all his resources. At some point, Sheu could no longer afford attorney fees and he had to represent himself.

Clearly, simple discovery— examination of documents by the court- would have proven the fraud in the alleged property sale, but Golia never allowed this fundamental judicial procedure to take place, despite Sheu's numerous appeals, he said.

For 10 grueling years, Sheu said, he was consistently denied the opportunity to present evidentiary documentation proving that the fraud had taken place and that Centex had no right to foreclose on his home.

Sheu's home was first foreclosed on January 28, 2005 and Centex "bought" the property for $1,000 from Amy Cheng, a pseudonymous fraudster involved in the fictitious sale. "How can you buy property from someone who does not exist?” Sheu had asked me, when I first started writing about his case.

Sheu also wrote Centex executive, Gerry King and New York State Chief Administrative Judge --now Chief Judge-- Jonathan Lippman, complaining about Judge Golia's conduct and accusing the judge of “discrimination” and “bias.”

Sheu demanded that Golia recuse himself from the case; the judge refused.

Sheu was persistent, writing to numerous elected public officials and filing an appeal against the foreclosure. Aware that he had notified various elected officials about what he claimed were the "biased" rulings, Sheu said, Judge Golia eventually reversed his own earlier decision and the initial foreclosure was rescinded, records showed.

Still, the judge refused to restore ownership of the property to Sheu.

Golia was so adamant to deprive him of justice, Sheu contended, that he came up with a remarkable decision. Golia now ruled that even though Sheu's home had been illegally sold years earlier, since Centex had already paid off the mortgage, the bank now owned the property under a doctrine known as "Equitable Subrogation."

"How can equitable subrogation apply to stolen property?” Sheu said, in an interview with The Black Star News, referring to the fraudulent sale. "This means if I have a lot of money, like Centex, I can pay off anybody's mortgage anywhere without their permission and then take possession of their home and kick them out?"

Sheu continued to spar with Judge Golia. Finally, early in 2010, his property was foreclosed on again, this time conclusively.

Alleged Intimidation and Retribution against Sheu

As Sheu realized that he could not expect a fair disposition of the case by Golia, he advised the judge that he would expose the judicial charade to the media.

Shortly thereafter, Sheu reported, he was contacted by Jason Garlick, an Assistant District Attorney at the Queens County DA’s office who had prosecuted the fraud case against the people who illegally "sold" Sheu's property. Sheu told me that Garlick urged him not to contact the media. "How could he have known my plans," to contact the media? asked Shue, “Only Judge Golia could have informed him".

Then, Sheu said, on January 14th, 2009, when he emerged from the Queens court house after filing papers in connection with his case, he was met by two detectives from the Queens County District Attorney’s office, he said. According to Sheu, the men “showed their guns and badges”, forced him into an unmarked car and drove him to the DA's office, where they entered through a back door. There, said Sheu, in a locked room, the officers berated, intimidated and threatened him, accusing him of harassing Judge Golia. He claimed one officer pounded on a desk and told him repeatedly that the house he was fighting for didn't belong to him.

Sheu also reported that the Detectives warned that if he went to the press or authorities, "you live in a dangerous neighborhood with gangs, and anything could happen to you". Understandably, Sheu took this as a direct threat against his life.

Sheu says that he was released after two hours, badly shaken and frightened for his life.

When contacted by this newspaper when the series of article about Sheu's case ran beginning in July, 2009, a spokesperson from the Queens DA's office, Kevin Ryan, confirmed that Sheu had indeed been taken by two detectives from the D.A.'s office on the date in question, and that he had been "cooperative and willingly agreed" to accompany them, which Shue denied. Ryan never divulged the names of the detectives and the party who ordered the detention; he also didn't respond to a question about whether Judge Golia had filed a report about Sheu.

This time, Sheu became so concerned for his safety that he contacted FBI agent Rachel Rojas of the New York Bureau, who started monitoring the case, and Sheu also had a personal meeting with Rojas,accompanied by several of his associates.

Sheu followed up the meeting with a letter to Rojas, detailing the threats against his life and asking for witness protection.

In her responding letter, Rojas simply told Sheu to "be careful", an admonition Sheu found to be small comfort. When contacted by this newspaper, while Sheu was still alive, agent Rojas declined to comment; she also did not respond to a phone message from The Black Star News after Sheu's death.

With this tepid response from the FBI, Sheu said he realized that he was basically on his own. Sheu, a man of considerable education and discernment, wondered if Golia’s alleged blatant disregard of law in his own case indicated a more general propensity for alleged corruption. Could he find evidence of other alleged improprieties by Golia?

Sheu Investigates Judge Golia

With this in mind, Sheu set out to investigate the personal financial disclosure filings of the Judge Golia, which are public records, available by request from the Office of Court Administration’s (OCA) Ethics Committee. These filings detail the financial assets of all public officials, as a means of curtailing potential conflicts of interest.

Sheu searched the internet for documentation of Golia’s real estate holdings, hoping to find concealed assets that had not been declared on his financial disclosure form. If he could prove financial impropriety by Golia, Sheu reasoned, perhaps he could get Golia removed from the bench and finally receive a fair hearing for his case from another judge.

Sheu, who was a computer expert, searched the internet for evidence of properties he concluded were owned by Golia. Armed with a list of these properties, Sheu then went to the OCA Ethics Department to obtain Golia’s financial disclosure forms.

According to Sheu, he discovered major discrepancies between Golia’s actual properties and the ones declared on his financial disclosure forms, including a million dollar beach house on Breezy Point on Long Island, which was described in a local magazine as belonging to the judge, and which is publicly listed as being owned by the Golia family.

On November 29, 2009, Sheu alerted Janice Howard, the director of the OCA Ethics Department, of these apparent discrepancies.

Sheu’s complaint included the following allegations, that Judge Golia:

“..Failed to disclose fully his liabilities for 2002/2003/2004/2005/2006/2008, in that he:

- failed to disclose a mortgage held by HSBC under his wife “Roslaie Grecco” against the property

- failed to disclose a mortgage held by HSBC of “Joseph Golia and Rosalie Golia

- failed to disclose “Rosalie Grecco” employment/ income/ property

- failed to disclose “Hampton West” beach House (Breezy Point)

- interest conflict, own Flushing Bank stock (Flushing Financial Corp) and using connections” to get $750,000.000 in lower rate and mortgage more than the property market value, as NYC Dept. of Finance record, 2007 property market about $220,000.00.”

This Newspaper could not get Judge Golia to address these allegations that Sheu submitted to OCA since he declined to be interviewed.

Yet Janice Howard, director of the OCA Ethics Department, did ask for an amended financial disclosure statement from Golia.

By law, the amended disclosure form is the final opportunity for a public official to “come clean” about any errors or omissions on their original disclosure. The amended form is required to be submitted within two weeks of notice, but Sheu had to wait three months to receive the document from the judge.

Golia’s Amended Financial Form

Finally, on June 23rd, 2010, Sheu was personally handed the amended disclosure form by Janice Howard at the Ethics Committee office. Sheu discovered that even the amended disclosure form still neglected to mention the beach house as well any of the other properties Sheu believed were owned by Golia.

The only asset Golia included on the amended disclosure form that had not been cited on the original was a “vacant lot” in Queens that Golia claimed was worth less than $1,000, and therefore did not require reporting.

When Sheu received the amended form at the Ethics Committee office, he was accompanied by two associates, one of whom recorded Sheu’s reaction to reading the amended form. On the recording, Sheu can be heard exclaiming "Now I’ve got him!...I’ve got enough evidence to put Golia in Jail."

Three days later, Sunny Sheu was dead. His associates don't believe it was a coincidence.

Sheu’s futile efforts to protect his life

The most terrifying aspect of Sunny Sheu’s ordeal is that for two years after he was allegedly threatened by the detectives from the Queens D.A.'s office, he could not find a government official or agency willing or able to investigate these alleged threats, or to offer him protection.

Sheu, an optimistic and philosophical man, often compared the United States with his original home in communist China. He told his associates and others that while in China whistleblowers were usually killed or imprisoned, he was certain that in the United States of America those pursuing justice would ultimately prevail.

With this philosophy, Sheu was confident that if his story were known by the press and authorities, no one would dare harm him. That is why he came to The Black Star News, which covered his story in depth.

On numerous occasions, in the presence of colleagues at this newspaper, I urged him to always be accompanied by a friend if he could and to inform associates of his movements. "Even when you go out to the corner store to buy a can of soda, go with a friend," I told him. Still, I optimistically believed that no harm could befall him after this newspaper had publicized his case widely.

After reporting Golia’s alleged ommissions on the financial disclosure forms to the OCA, Sheu attempted with new urgency to alert all appropriate individuals and agencies to his plight.

Among those he contacted directly were: State Senator John Sampson; State Senator Eric Adams; Attorney General Eric Schneiderman; The Senate Judicial Ethics Committee; Presiding Judge Jonathan Lippman; Administrative Judge Anne Pfau; The Office of Court Administration Ethics Committee; The FBI; The Department of Justice; The Queens DA; the NYPD; the CCRB, and; then Governor David Paterson, among others.

Sheu said none of these individuals or agencies lifted a finger to help protect or defend him, or to investigate his allegations.

Finding government agencies and officials maddeningly unresponsive, Sheu again turned to the press. Apart from The Black Star News, no news organization would report or look into his claims of governmental threats against his life. Part two of this series will discuss the details of how some of these media outlets, including a major television station, declined to report the story.

Sheu’s video foretelling his death

It was on April 9, 2010, that Sheu recorded his video statement, which was later posted on YouTube. In the two-minute video, Sheu expresses his fear for his life as a result of his investigation into Judge Golia's personal finances.

"I have filed a complaint to the FBI and the New York State Unified Court Disciplinary Committee about Judge Golia[‘s] [falsification of] his financial disclosure statement," Sheu, who spoke halting English, says.

"And I have submit[ed] evidence to the FBI. Recently [the] FBI returned [to] me cop[ies] of evidence that I sent to the FBI and today, April 9, [the] Unified Court Disciplinary Committee director Janice Howard called and [said] that judge Joseph Golia already amend[ed] his financial disclosure statement, which means my evidence is true."

Sheu’s concluding statement is chilling: "I make this video for my safety….If anything wrong goes to me it should come from Judge Golia and his people [sic].."

Little did he know that he had less than three months to live.

Note: The next installment will include a detailed examination of the circumstances surrounding Sheu's death and The Black Star News' futile attempts to get relevant information from law enforcement including through FOIA

"Speaking Truth To Empower."

"Junk Justice"

Part One Of A Series

The man has been fighting a foreclosure for nearly 10 years.

Sun-Ming Sheu was eating Chinese noodle soup one day nine years ago when he heard a knock on the door of his Queens house.

When Sheu stepped out, he found an agent from Tower Insurance who told him that he was there to inspect the house for its new owner. "I almost choked on my soup," Sheu recalled in an interview with The Black Star News.

Sheu says he had never sold his house.

Earlier, he had worked with Manhattan-based mortgage brokers to refinance the house, which was under the name of his brother, Ming Chien Hsu. It turns out that the mortgage broker, Yek-Yun Chiu (a.k.a. Roman Chiu) and other accomplices, had forged his brother Hsu's signature on a power of attorney and applied for a mortgage loan with Centex Home Equity.

The forged power of attorney was signed and dated February 11, 2000; Sheu's brother, Hsu, was later able to prove that he was actually in Taiwan on that date and could not have signed the document.

Sheu immediately reported the fraud to the police and obtained a complaint report #7167, on June 19, 2000, from the 109 precinct, in Queens. Sheu also reported the matter to the Queens County District Attorney's office and to the Manhattan D.A., since the fraudsters worked in Manhattan.

On June 19, 2000, Sheu faxed a copy of the police complaint he had filed, to Ed Folland, a Centex official, and B. Osterman, director of collection, at Centex, alerting them to the fraud. Sheu also spoke with both officials by phone. “Folland said he would investigate,” Sheu said.

Sheu also faxed a copy of the police complaint on the same date to Old Republic National Title Insurance Company, which provided title insurance for the May 23, 2000 closing. He also reported the fraudulent mortgage loan to Midwest Finance, which was the agent for Chase Bank of Texas, the original mortgage lender to his brother, Hsu.

Sheu said he warned Centex to recover its money, since the mortgage had been fraudulently obtained. He said he was confident things would soon be resolved once Old Republic issued him with a claim #43391, after he had written a letter to the New York Department of Insurance, complaining about the fraudulent conveyance.

The letter from Old Republic with the claim number, reviewed by The Black Star, is dated October 5, 2004, and was signed by Felice K. Shapiro, then Vice President, New York State Counsel. The claim was assigned to Timothy McLeron, then the New York State Claims counsel for Old Republic.

Rather than deal with his claim, Sheu says, Centex and Old Republic decided to pretend as if the May 23, 2000 closing was not fraudulent, even though he provided both companies with documentation.

Instead, Centex later filed a lawsuit to foreclose on the property, Sheu says. “It was like a thief suing the victim. They conspired to steal my property," Sheu claims.

Nine years later, Sheu has been foreclosed on his property by Old Republic, which substituted for Centex as plaintiff, in 2008.

Separately, officials at both Centex and Old Republic did not return phone calls and e-mail messages from The Black Star seeking comment.

A lawyer for Old Republic, Matthew Dollinger, did not respond to an e-mail message with detailed questions. A spokesman for the New York State Department of Insurance did not return a phone message and e-mail message by publication time. Similarly, a spokesman for the New York State Attorney General did not respond by publication time.

At the fraudulent closing, on May 23, 2000, two associates of the broker, Yek-Yun Chiu, participated in the scam, Sheu says. Amy Cheng, whose real name is Jin Rong Wang, acted as the “buyer” of the property. She carried multiple identifications, and used the fake one, "Amy Cheng" for the closing. Her boyfriend Jing Gao, acted as the “seller.”

The pair was later busted by police and pleaded guilty on forgery charges.

Jin Rong Wang, the supposed buyer, did not even make the required $30,000 down payment on the property, Sheu says. Yet the deal was okayed by Centex’s lawyer, Brooklyn-based attorney Jakov J. Bohensky, Sheu says.

Bohensky’s name appears on the federally-required HUD-1 document certifying that the $30,000 downpayment was made; although his signature is not on the form.

The Black Star News has also reviewed photocopies of what purports to be checks made out by Bohensky in connection with the transaction. One check, purportedly made out to Ming Chien Hsu, Sheu’s brother, is for $4,112.60; Sheu says it was also a fake check since his brother was not selling the property, and, in any case, was not even in the country and never received the check.

Another check, purportedly for $1,000 was to Jeffrey Ruan, who was supposed to have been Jing Gao’s, the “seller’s” lawyer.

A copy of what purports to be a money order for $1,000, one of several payments towards the purchase of the house, made out to Sheu’s brother, Hsu, by Amy Cheng, is drawn from Abacus Federal Savings Bank, in Chinatown. Canal Street is mispelled “Cannal Street.”

In an interview Ruan told The Black Star News that when Sheu later told him about the forgery, he wrote to Old Republic urging that the company not transfer the title pending resolution of the alleged forgery.

"What I cannot understand is how Centex's lawyer at the closing went along with this scam," Sheu says, in the interview. “He must have known it was fraudulent as the detectives said.”

Bohensky did not return a phone message from The Black Star News seeking comment.

The Black Star News spoke with one of the New York Police detectives who looked into Sheu's allegations in 2000. He said he was able to confirm that it was a forged power of attorney and that Sheu's brother, Hsu, was not in the country and could not have signed it in front of the notary public. He said bank records also showed that some purported deposits were actually never made.

Sheu also blames Midwest Finance, the agent for Chase Bank of Texas, his brother's mortgage holder, for not returning the money to Centex after he notified the company of the 2000 forgery. Contacted by The Black Star News, a Midwest official confirmed that Sheu's mortgage had been paid off; he wouldn't provide additional information.

Even after the May 23, 2000 fraudulent “closing” Sheu says, he wasn't too worried initially because he believed once he had reported the fraud to police and the DA, things would eventually be sorted out.

"It was the court system that later betrayed me," says the immigrant from Taiwan." Is this the American way?"

Acting as if the May 23, 2000 closing had been authentic, on January 10, 2001, Centex’s title insurer, Old Republic, recorded the property's deed and mortgage with the New York City Register, in Queens County. Old Republic listed Sheu’s brother, Ming Chien Hsu, as the first “party” and Jing Gao, the phony "seller" at the May 23, 2000 "closing" as the second “party.”

"This was knowingly criminal," Sheu claims.

Then on December 12, 2001, Centex filed a lawsuit against Sheu and his brother Hsu in State Supreme Court, in Queens County, seeking a default judgment on the property, arguing that Amy Cheng was not making payment on the mortgage, even though Cheng was the fictitious name of the buyer at the fraudulent May 23, 2000 closing.

So, in addition to Sheu and Hsu, Centex listed as co-defendants, the very individuals that had victimized the brothers: Jin Rong Wang (a.k.a. Amy Cheng); her boyfriend Jing Gao; and the broker who presided over the fraudulent May 23, 2000 "closing," Yek-Yun Chiu. Non of the fraudsters ever appeared in court.

The case was assigned to Justice Joseph Golia in State Supreme Court in Queens.

"My nightmare was just beginning," Sheu now recalls. “It was like the thief suing the victim of the crime.”
Sheu says had Judge Golia granted him due process, including disclosure, he would have quickly exposed the fraud perpetrated against him and had the case would have been thrown out.

Instead, Judge Golia granted summary judgment in favor of Centex and foreclosed on the property on July 21, 2004, records show.

Sheu continued to complain to Centex. A September 23, 2004 letter to Sheu's brother, Hsu, by Gerry King, a customer relations officer at the company acknowledges receiving “numerous faxed letters and copies of various documents” from Sheu but adds that “it was the decision of the court that insufficient evidence to prove fraud was provided and the Supreme Court of the State of New York issued a judgment of foreclosure...”

“There was no deposition; no discovery; so how could I present evidence to show fraud?” Sheu says, in the interview with The Black Star.

Sheu says even though Centex knew its May 23, 2000 originated mortgage was fraudulent, it was now using the Court system to legitimize the transaction.

The foreclosure sale was on January 28, 2005. “Centex bought the property for $1,000 from Amy Cheng, the fraudster,” Sheu says. “That was not even her real name. How can you buy property from someone who does not exist?”

A week after Centex “bought” the property, on February 2, 2005, both Jin Rong Wang (a.k.a. Amy Cheng) and Jing Gao, who had never appeared in court on the Centex case, were arrested based on the criminal forgery complaint filed by Sheu in 2000.

Sheu sent a fax to Centex’s Gerry King about the development and also informed Judge Golia. Sheu says he was appalled so he also wrote a letter to New York State Chief Administrative Judge, Jonathan Lippman, complaining about how his brother's property had been "stolen." He accused Golia of “bias” and “discrimination.”

Sheu says on February 3, 2005, Jason Garlick, an Assistant District Attorney at the Queens County DA’s office, who had prosecuted Jin Rong Wang (a.k.a Amy Cheng) and Jing Gao, called him and asked him not to contact media about his case. “Judge Golia must have called the DA’s office because I told him I was going to media,” Sheu says.

Judge Golia ordered a hearing for April, which was later moved to May 18 and 19, 2005.

The order was signed by Judge Golia on March 17, 2005 and stamped with the Queens county clerk’s seal on March 23, 2005. Sheu says when he’d last checked court records on March 24, 2005, there was no such entry or copy of such an order.

In fact, Sheu says, the only order he found in the records at the time, signed by Judge Golia on March 17, 2005, and stamped with the Queens county clerk’s seal on March 23, 2005, was a denial of Sheu’s and his brother, Hsu’s motion for Judge Golia to recuse himself.

After the May hearing, it was not until nearly a year later, on April 12, 2006, that Judge Golia returned with a ruling on the case.

Judge Golia again denied the defendants’ motion that he recuse himself; the judge cancelled the fraudulent deed of May 23, 2000 between Ming Chien Hsu and Jin Rong Wang (a.k.a Amy Cheng); he cancelled the foreclosure order filed on July 21, 2004; and, he cancelled and vacated the foreclosure sale of January 28, 2005.

Judge Golia, however, did not restore Ming Chien Hsu’s (Sheu’s brother) original 15-years $226,500 mortgage with SMI Mortgage (SMI had later assigned the mortgage to Chase Bank of Texas).

"This violated my right as a crime victim to be restored to original status," Sheu says, reading from papers he had pulled from research.

That wasn’t all.

Judge Golia awarded Summary Judgment in favor of Centex to foreclose an equitable mortgage, under the doctrine of Equitable Subrogation against the premises: he ruled that Centex had paid off the original mortgage.

"How can equitable subrogation apply to stolen property?” Sheu asks. "This means if I have a lot of money, like Centex, I can pay off anybody's mortgage anywhere without their permission and then take possession of their home and kick them out," Sheu noted, sarcastically.

Judge Golia did not return phone calls seeking comment and also didn’t respond to an e-mail message. In a phone interview, Mitchell Kaufman, Judge Golia’s law secretary claimed Sheu’s information about the fraud would not have made a difference in the case “if Centex did not know at the time” of the May 23, 2000 closing that it was based on the forged power of attorney. “Apparently Mr. Sheu is either unwilling or unable to accept the judgment of equitable subrogation.”

Sheu retorts: “Centex knew it was a fraudulent transaction. It was represented by an attorney—Bohensky and the fraudulent transaction was endorsed by Joseph Bigman, Old Republic's title agent. In any case Old Republic issued me a claim number and they still did nothing except to foreclose.”

Asked what if Centex did know, or came to know that the May 23, 2000 closing was fraudulent Kaufman said, of Sheu: “He may have a tort claim against Centex.”

Judge Golia appointed Martin Evans as referee charged with computing the amount owed to Centex by Sheu. Evans entered a judgment amount of $465,433.29 in favor of Centex.

Golia also ruled that Centex could move for a judgment of foreclosure and sale, with costs, disbursements and any additional allowance as allowed by law.

Separately, Dollinger, Gonski & Grossman, the law firm representing Centex (now representing Old Republic, since it substituted as the plaintiff), managed to get a satisfaction of mortgage document from Chase Bank of Texas, even though the mortgage was in the name of Mr. Sheu’s brother, Hsu.

Sheu said when he called Midwest, Craig K. Olson, a Vice President, told him that a lawyer from Dollinger had informed Midwest that the firm represented Sheu and his brother, Hsu.

Judge Golia issued a judgment of foreclosure sale on April 7, 2009. The foreclosure sale occurred on May 15, 2009.

On May 27, Sheu appeared before Judge Golia with Stephen Katz, an attorney, and Judge Golia denied Sheu’s motion to vacate the order for foreclosure and sale.

In his motion, Sheu said Old Republic was foreclosing on a loan “obtained by fraud and by forgery of a power of attorney,” to which Judge Golia wrote: “This assertion is intentionally misleading and disingenuous at best.”

"It is the truth," Sheu says. "It is nothing but the whole truth."

In the almost decade he's been fighting for the property, Sheu has learned a few things about the law. He pulls out information he’s researched and reads, "Part 100 of the Rules of the Chief Administrator of the Courts Governing Judicial conduct. Section 100.3. Disqualification. A judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned, including but not limited to instances where the judge has a personal bias or prejudice concerning a party or the judge has personal knowledge of disputed evidentiary facts concerning the proceeding."

In June 2009, Sheu met twice with a criminal investigator at the U.S. Attorney’s Office in the Southern District for a total of about four hours and discussed his case and submitted documentation. “We cannot confirm or deny that we are investigating this case,” the investigator told The Black Star News, when contacted by phone.

"These seem to be issues for the Appellate Division as I am not in position, nor am I qualified, to say whether or not a Judge's

decision was 'proper' or not nor am in a position to say what rule of law should have been used to decide a particular case," David Bookstaver, Communications Director for the New York State Unified Court System Office of Court Administration told The Black Star News.

Desperate, on June 23, 2009, Sheu again filed an order to show cause for a temporary restraining order to halt any further action even though the sale had already occurred.

He demanded that detectives Keith Ng and Kin Lee, now both retired, who both had investigated the fraudulent May 23, 2000 closing, be permitted to testify.

Judge Bernice D. Siegal, stayed any additional proceedings with respect to sale of the property, with a return hearing date of July 8, 2009.

At the July 8, hearing, Judge Golia set another hearing date for July 15, 2009, at which time Sheu was to produce cancelled checks for all payments he had made over the last nine years on the property, for taxes; insurance payments; and, utilities.

This reporter attended the July 15, 2009, hearing and observed the clearly acrimonious relationship between Judge Golia and Sheu. The Judge Golia kept shouting at Sheu, who was unable to produce receipts; Sheu on the other hand kept shouting at the judge about the May 23, 2000 fraudulent conveyance he insisted was at the root of his predicament.

“This is junk justice,” Sheu said, as he walked out of the court. "Nobody is above the law, except Judge Golia."

The Manhattan Democratic Judge Selection Club

Thanks to Mr. Frank Lombardi of the Daily News, we have a peek inside the corruption of the Courts by the Manhattan Democratic Clubhouse.

In January 2007 I started working for Hank Sheinkopf in order to find out more on the controlled process of approving judges for the NYC Courts (he ran the campaign of NYC Surrogate Renee Roth, Nora Anderson, etc., all named in my case filed in District Court, Without a Prayer For Relief and RICO, and he told me that he would get Ray kelly to arrest me if I told anyone about what I knew). More about that in my book. The point I want to make here is that the courts are under the supervision of a relatively small group of political lobbyists who make sure that their "interests" are protected by the judges whom they approve. As can be seen in the following article, Death of the Duopoly, the Democratic Clubmembers may not be in sync right now with public sentiment. Of course, this is of no concern to them, but maybe we, the public, should be outraged, and obtain the help of our Attorney General....if he is interested.

BTW, Lombardi is incorrect about Geoffrey Wright - he is a Judge in New York State Supreme Court Manhattan, 80 Center Street, City Part (working for the City of New York).

Betsy Combier

Erika McDaniel Edwards, esq.

Are these two Harlem lawyers now Civil Court judges-in-making?

BY Frank Lombardi, DAILY NEWS UPTOWN COLUMNIST, Thursday, June 23rd 2011, 4:00 AM

Civil Court judges are supposedly elected, but more accurately they're usually "made" by political clubhouse leaders and loyalists.

Two lawyers from Harlem are on the fast track to being elected Civil Court judges later this year because they've been endorsed by various Democratic district leaders and county chairman, Harlem Assemblyman Keith Wright.

The two judges-in-making are Erika McDaniel Edwards, a civil and criminal attorney seeking a vacant countywide Civil Court seat, and W. FrancPerry 3rd, (see also Community Board 10) a court attorney for Judge Peter Moulton, the supervising judge of Manhattan Civil Court, who is running for the District 5 seat on the upper West Side.

Both were approved by screening panels used by Manhattan Democrats, which include representatives of bar groups and nonprofit organizations.

Manhattan Democrats, in fairness, do try to endorse qualified candidates and place emphasis on diversity. For Wright, who is African-American, Perry and Edwards are the first African-American judicial prospects he's helped through the politically charged process since he became county leader in September 2009.

Wright's brother, Geoffrey, is a state Supreme Court justice in the Bronx, and their father was the late Bruce Wright, a judge who served in both the Criminal Court and state Supreme Court.

Edwards' recent clients have included financier James Nicholson, who pled guilty in 2009 to a $140 million Ponzi scheme and is serving a 40-year prison sentence.

She was an assistant Manhattan district attorney before launching her own law firm in 1998 from a Harlem brownstone, and is now a partner with Donaldson, Chilliest & McDaniel.

Perry is on leave as chairman of Community Board 10 (Central Harlem). He is also a minister in the Metropolitan Community Church, a Protestant denomination.

"Occasionally I perform a wedding, or preach somewhere," he noted.

If elected, he said he would give up his community board post and his occasional ministry.

"We all bring a lot of different things to the bench," he noted of his decision to take a sabbatical from the law in 2001 to get a master of divinity degree from Union Theological Seminary.

Perry, who is gay, said he and his partner have two adopted children, and "the skills going into being a good parent" will give him "a greater perspective than anything else" if he becomes a judge.

Potential challengers still have until July 14 to file qualifying petitions to force a primary contest Sept. 13. But there's no indication that will happen, so they're expected to be unopposed on the Nov. 8 ballot.

Judges of the Civil Court - known as the "People's Court" - handle civil cases involving up to $25,000. They're elected for 10-year terms, at a salary of $125,600, which hasn't been raised since 1999.

Competitive races for judgeships are rare, in Manhattan as well as elsewhere in the city, because it's so difficult for hopefuls without clubhouse backing to collect the thousands of voter signatures needed to qualify for the ballot, and because it costs a bundle to wage an insurgent campaign.

Only one contested Civil Court race is shaping up this year in Manhattan, for a vacancy from District 3 (Chelsea). The two contenders gathering signatures to force a primary duel are Tony Cannataro, who has the endorsement of every club in the district and a bevy of Manhattan elected officials, and Housing Court Judge Sabrina Kraus.

The cost of waging a Civil Court race in Manhattan can range from $100,000 for a district level contest to $200,000 for a countywide race, according to James McManus, the longtime district leader from Hell's Kitchen (now tamely called Chelsea).

Three years ago, the last contested Civil Court race for a Manhattan countywide seat ended up costing its two contenders a combined $227,387, according to spending reports.

An insurgent, Nancy Bannon, won that year over her clubhouse-endorsed rival, Michael Katz, although he outspent her 2-to-1. So beating the clubhouse gang isn't entirely impossible, just improbable.

Uptown politics: Harlem Assemblyman Keith Wright sits in judgment on racial balance of judges


Harlem Assemblyman Keith Wright has "made" more than a dozen judges since becoming the Manhattan Democratic chairman 17 months ago.

But none of the new judges is African-American.

"We've chosen judges who are gay, Asian judges. We even have a Dominican judge - but we haven't done any black judge yet," said Wright.

It's not that he's unsympathetic to the need for diversity among New York judges. As of the latest count by the state court system, of 1,166 sitting full-time judges, 947 are white (81%); 121 are black (10%); 67 are Hispanic (6%) and 20 are Asian (2%).
Manhattan Democrats head Keith Wright describes judge-picking procedure.

Uptown politics: Harlem Assemblyman Keith Wright sits in judgment on racial balance of judges

Harlem Assemblyman Keith Wright has "made" more than a dozen judges since becoming the Manhattan Democratic chairman 17 months ago.

But none of the new judges is African-American.

"We've chosen judges who are gay, Asian judges. We even have a Dominican judge - but we haven't done any black judge yet," said Wright.

It's not that he's unsympathetic to the need for diversity among New York judges. As of the latest count by the state court system, of 1,166 sitting full-time judges, 947 are white (81%); 121 are black (10%); 67 are Hispanic (6%) and 20 are Asian (2%).

"It's just the way it turned out," said Wright. "But you know what? You can look at me and tell that will probably change at one point."

Wright, 56, who is African-American, is the son of the late Bruce Wright, a controversial city judge who was denounced by critics in his day as "Turn 'Em Loose Bruce" because of his low-bail policies.

As his son tells it, Bruce Wright might never have become a Manhattan judge - or remained one for 25 years - if the Harlem political powers back then had not gone to bat for him.

His father was named to the Criminal Court in 1970 by then-Mayor John Lindsay. But it was Harlem's own Percy Sutton who engineered the appointment, Keith Wright said. Sutton, who died in 2009 at age 89, was Manhattan borough president from 1966-77 and a longtime Harlem political power.

"My father was Percy's lawyer," a smiling Wright said in explaining how his rebel-lawyer father became a judge.

And, he continued, it was thanks to his predecessor as county leader, Assemblyman Herman (Denny) Farrell, that Bruce Wright was nominated to the state Supreme Court in 1978, when then-Mayor Ed Koch didn't renew his Criminal Court judgeship. Judge Wright retired in 1994 and died in 2005 at age 86.

Several well-placed Manhattan Democrats said Keith Wright ran into party resistance last year when he pushed for a black judicial nominee.

Other factions of the notoriously splintered Manhattan Democratic Party argued that "plenty" of black judges had been named during Farrell's 28-year party reign and forced Wright to bide his time.

Making Civil Court and Supreme Court judges is one of the few remaining powers of the city's Democratic bosses. Even the U.S. Supreme Court upheld that boss-ruled process in 2008.

But while Wright is a linear descendent of the bosses of the old Tammany Hall machine, he has inherited a largely rusted, powerless antique.

"I wouldn't say that at all," Wright said. "I think we do [have clout] and it's growing. That's why we still have candidates [for all offices] rushing to us, looking for our endorsement."

As for naming judges, he added, Manhattan has a more progressive and fair screening and nominating process than the other boroughs.

"We take recommendations [of the panels] as if they were coming down from the Sermon on the Mount," Wright said.

That may be, but anyone who doesn't get nominated by the party structure still has no prayer of forcing a party primary and getting elected, given the prevailing rules.

It helps to have a Percy Sutton plugging for you, or a Keith Wright, as we might see this year.

Death of The Duopoly

Democrats and Republicans are at risk of becoming irrelevant, says's Nick Gillespie, as more voters identify as Independents or with other groups like the Tea Party. He talks with WSJDN's Kelsey Hubbard about the shortcomings of the longstanding duopoly in American politics
Wall Street JUNE 18, 2011

Death of the Duopoly

Being binary is bad for business, so when will politics cure its bipolar disorder? Nick Gillespie and Matt Welch on the lessons Washington should learn from the real world.

Nothing in American life today seems as archaic, ubiquitous and immovable as the Republican and Democratic parties.

The two 19th-century political groupings divide up the spoils of a combined $6.4 trillion that is extracted each year from taxpayers at the federal, state, county and municipal levels. Though rhetorically and theoretically at odds with one another, the two parties have managed to create a mostly unbroken set of policies and governance structures that benefit well-connected groups at the expense of the individual.

Americans have watched, with a growing sense of alarm and alienation, as first a Republican administration and then its Democratic successor have flouted public opinion by bailing out banks, nationalizing the auto industry, expanding war in Central Asia, throwing yet more good money after bad to keep housing prices artificially high, and prosecuting a drug war that no one outside the federal government pretends is comprehensible, let alone winnable. It is easy to look upon this well-worn rut of political affairs and despair.

Journal Community

And Americans are, in increasing numbers. Perhaps the most important long-term trend in U.S. politics is the four-decade leak in market share by the country's two dominant parties. In 1970, the Harris Poll asked Americans, "Regardless of how you may vote, what do you usually consider yourself—a Republican, a Democrat, an independent or some other party?"

Fully 49% of respondents chose Democrat, and 31% called themselves Republicans. Those figures are now 35% for Democrats and 28% for Republicans. While the numbers have fluctuated over the years, the only real growth market in politics is voters who decline affiliation, with independents increasing from 20% of respondents to 28%.

These findings are consistent with other surveys. In January, Gallup reported that the Democrats were near their lowest point in 22 years (31%), while the GOP remained stuck below the one-third mark at 29%. The affiliation with the highest marks? Independent, at 38% and growing. In a survey released in May, the Pew Research Center found that the percentage of independents rose from 29% in 2000 to 37% in 2011.


It is generally taken for granted that the Democrats and Republicans will always be around. But that may just be the influence of what cognitive scientists call "existence bias"—the pervasive idea that the status quo is stable and ongoing. What if the same factors that have given our incumbent parties an advantage also threaten to hasten their demise?

Economists have a particular fondness for studying what Democrats and Republicans have become: the longest-lived duopoly in American history. The Nobel Prize-winning economist John Forbes Nash (the subject of the book and movie "A Beautiful Mind") was all about duopolies. He showed that two powerful competitors frequently end up locked in a stable, mutually beneficial dance of tit-for-tat—they collude, in short, to carve up a captive market.

Economists have paid less attention to the chief vulnerability of duopolies: How collusion against the interests of customers produces an inevitable revolt, sweeping one or both dominant players into the dustbin of history.

In a widely circulated 2009 paper surveying the economic literature on the topic, the late Larry F. Darby presented a list of classic duopolies, including such familiar pairings as MCI and AT&T, and Macy's and Gimbels. Tellingly, several of the players no longer existed: MCI (then known as WorldCom) became history's largest bankruptcy in 2003; Gimbels was the country's dominant department store chain in the 1930s but went out of business in 1987.

There is nothing inherently stable about two organizations dominating a particular market in the hurly-burly of modern American life. In fact, there are many reasons to suspect that such arrangements are unstable—particularly when technology allows captive consumers to flee.

It is worth taking a closer look at one case on Mr. Darby's list: Kodak and Fujifilm. For much of the 20th century, Kodak was synonymous with color photography. Memories captured on film were "Kodak moments," and the Dow Jones Industrial Average listed the company for more than seven decades. At one point it enjoyed an amazing 96% share of the U.S. market for film. Such was its dominance that the federal government sued Kodak for antitrust violations not once but twice, producing out-of-court settlements in 1921 and 1954.

Fujifilm began competing with Kodak globally in the 1970s and seriously in the U.S. after the 1984 Olympics. Though always the junior partner on Kodak's home turf, the conglomerate held its own enough that the duopoly soon attracted academic studies. Their underlying assumption was that the duopoly would be stable for the foreseeable future.

But the studies were wrong. The share price of Eastman Kodak tumbled from $60 in 2000 to below the $4 mark by 2011.

What happened? Like many duopolies, Kodak and Fujifilm treated their customers like captives, forcing them to pay for pictures they didn't want and steering them toward ever-pricier analog products. This worked as long as consumers had nowhere else to turn. But digital technology, as we know, changed all that, giving customers not just a Kodak/Fuji-free workaround, but the power to make, delete, alter and otherwise control their own creative product.

Or consider the American craft-beer revolution, which people who went to college in the 1980s or before can testify is almost impossible to believe. As in politics, a duopoly—Anheuser-Busch InBev and MillerCoors—soaks up the vast majority (around 80%) of market share. But now the legacy giants are steadily leaking market share and buzz, while upstart craft-beer makers are cashing in on the only sector of the industry showing consistent growth.

Netscape or Internet Explorer, Crest or Colgate, stuffing or potatoes: When given real choice, especially the choice to go elsewhere, consumers will drop even the most beloved of brands for options that enhance their experience and increase their autonomy. We have all witnessed and participated in this revolutionary transfer of loyalty away from those who tell us what we should buy or think and toward those who give us tools to think and act for ourselves. No corner of the economy, of cultural life, or even of our personal lives hasn't felt the gale-force winds of this change.

Except government.

Think of any customer experience that has made you wince or kick the cat. What jumps to mind? Waiting in multiple lines at the Department of Motor Vehicles. Observing the bureaucratic sloth and lowest-common-denominator performance of public schools, especially in big cities. Getting ritually humiliated going through airport security. Trying desperately to understand your doctor bills. Navigating the permit process at city hall.

Whatever examples you come up with, chances are good that the culprit is either a direct government monopoly (as in the providers of K–12 education) or a heavily regulated industry or utility where the government is the largest player (as in health care).

Unlike government, Kodak doesn't have a guaranteed revenue stream. If consumers abandon its products, sales will be zero, and the company will disappear. The history of private-sector market dominance is filled with such seemingly sudden disappearing acts: Big-box music retailers and bookstores were supposed to bestride the land like colossi at the turn of our new century, but Virgin megastores have all but disappeared, and Borders has just gone bankrupt.

A more efficient system is on the doorstep of our most stubborn, foot-dragging sector: government.

There is a positive correlation between an organization's former dominance and its present-day inability to cope with change. As the technology business consultant Nilofer Merchant has aptly put it, "The Web turns old industries on their head. Industries that have had monopolies or highly profitable duopolies are the ones most likely to be completely gutted when a more powerful, more efficient system comes along."

Fortunately, a more efficient system is finally on the doorstep of America's most stubborn, foot-dragging, reactionary sector—government at the local, state and especially federal levels—and its officially authorized, customer-hating agents, the Democrats and Republicans.

As the number of independents rises, voters who are free from party affiliations are more inclined to view political claims with due skepticism. By refusing to confer legitimacy on the two accepted forms of political organization and discourse, they hint strongly that another form is gathering to take their place.

Something potentially revolutionary is afoot in our politics. The Bush-Obama era of bailout economics and perennially deferred pain has produced a political backlash. When blue-state California was allowed in May 2009 to pass judgment on a multipart budget-fix referendum that had received nearly unanimous support from the state's politicians and interest groups, the measures lost by an average of 30 percentage points, despite opponents having been vastly outspent.

Eight months later, unknown Republican Scott Brown won Teddy Kennedy's old Senate seat in overwhelmingly Democratic Massachusetts. Congressmen mostly canceled their traditional August town hall meetings in 2010 after getting too many earfuls in 2009.

For the first time in recent memory, participants in the political process, many of them newly engaged, are openly imagining and pushing for a world other than the one they currently live in. Voters are seizing control over the means of production, meeting up with strange new subgroups, and having a blast in the process. The future—even the present—belongs not to the central re-election committee but to the decentralized single-issue swarm. Wherever both parties have colluded in erecting a roadblock to the desires of American voters, there are citizen groups creating angry and effective coalitions to confront the status quo.

The decentralized and effectively leaderless Tea Party is the most potent example of this permanent non-governing minority. The movement has focused like a laser beam on what all but a few Washington politicians won't dare to touch: actually cutting spending and debt. Whether the group will be able to maintain its emphasis on stanching the nation's flow of red ink while avoiding divisive social issues is an open question. But there's no denying that the Tea Party's biggest impact has come by backing challengers to entrenched Republican candidates.

A similar phenomenon is visible in rising opposition to the drug war. Last fall, people from the far right, the far left and everywhere in between banded together in California to push an outright marijuana-legalization law. The initiative, derided as crazy by California's political class, pulled an impressive 46.5% of the vote.

And in the school-choice movement, politicians such as New Jersey's Republican Gov. Chris Christie and Newark's Democratic Mayor Corey Booker may agree on nothing else but ending the public school monopoly on K-12 education.

Such new configurations do not mean that the Democrats and Republicans will disappear anytime soon. Unlike Kodak and Fujifilm, they have a guaranteed revenue stream, and they get to write their own rules for survival. But the demonstrated ability of disgruntled voters to create whole new ways of doing things has made our political duopolists less secure and complacent.

At a time when governments at every level have run out of money, the smart politicians will figure out how to unbundle policy options and speed up the sort of innovation that has made most areas of our lives better than they were 40 years ago.

And the dumb politicians? They'll go the way of Kodak.

—Adapted from "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America" by Nick Gillespie and Matt Welch, to be published by PublicAffairs on June 28. Copyright © by Nick Gillespie and Matt Welch.

Tuesday, June 21, 2011

In Selzer v New York City Tr. Auth., NYS Supreme Court Sets The Verdict Aside

Selzer v New York City Tr. Auth.

2011 NY Slip Op 51015(U)
Decided on May 18, 2011
Supreme Court, New York County
Kenney, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 18, 2011
Supreme Court, New York County

Wilder Selzer, Plaintiff,
New York City Transit Authority, Defendant.

Plaintiff's Counsel:
Langsam Law
7 Dey Street, Suite 500
New York, NY 10007
212) 742-2700

Defendant's Counsel:
Smith & Laquercia, P.C.
291 Broadway
New York, NY 10007
(212) 227-3333

Joan M. Kenney, J.

Papers considered in review of this motion to set aside a verdict:

Notice of Motion, Affirmation, and Exhibits1-7
Opposition Papers, Affirmation with Exhibits8-13

Plaintiff's application seeks an Order pursuant to CPLR 4404(a), setting aside a jury verdict, and finding in favor of plaintiff as to liability and granting plaintiff a new trial on the issue of damages. Defendant opposes the motion.


In this personal injury action that was tried before a jury from December 3, 2010 through December 8, 2010, the jury rendered a verdict in favor of defendant, the New York City Transit Authority (TA). This Court presided over the jury trial. The case involved a claim by plaintiff, a passenger on an TA subway, that he was injured due to an unidentified conductor's closing of the [*2]subway doors while he was exiting the subway car. Plaintiff's right leg was allegedly trapped in the closing doors. Plaintiff testified that the lower part of his leg was trapped in the closed subway doors, causing him to fall and sustain multiple fractures to his leg. Plaintiff underwent an open reduction with internal fixation to treat the spiral fractures of his tibia and fibula.

Plaintiff argues seeks a new trial pursuant to CPLR 4404(a) on the grounds that the verdict was against the weight of the evidence and not in the interest of justice, due to the misconduct of counsel for the TA.

Defendant's counsel argues that his conduct did not rise to a level necessitating a new trial.


The discretion of a trial court to set aside the jury verdict pursuant to CPLR Section 4404(a) is a broad one intended to ensure that justice is done. CPLR §4404(a) states in pertinent part that:

"[a]fter a trial of a cause of action or issue triable of right by a jury, upon the motion of any party or on its own initiative, the court may set aside a verdict or any judgment entered thereon and direct that judgment be entered in favor of a party entitled to judgment as a matter of law or it may order a new trial of a cause of action or separable issue where the verdict is contrary to the weight of the evidence, in the interest of justice or where the jury cannot agree after being kept together for as long as is deemed reasonable by the court.

The power to set aside a jury verdict and order a new trial is an inherent one (McCarthy v Port of NY Auth., 21 AD2d 125, 127, [1st Dept 1964]), which is codified in New York in CPLR 4404(a). The power is a broad one intended to ensure that justice is done (see, Siegel, New York Prac. §406), but the proper standard for setting aside a jury verdict is elusive and has long defied precise definition (see, Mann v Hunt, 283 AD 140 [3d Dept 1953]). Nevertheless, a close examination of the precedents reveals several principles that tend to outline the parameters of this Court's function on such a motion.

Whether a jury verdict is against the weight of the evidence is essentially a discretionary and factual determination which is to be distinguished from the question of whether a jury verdict, as a matter of law, is supported by sufficient evidence (Cohen v Hallmark Cards, 45 NY2d 493, 498-499 [1978]; Yalkut v City of New York, 162 AD2d 185 [1st Dept 1990]). The criteria for setting aside a jury verdict as against the weight of the evidence are less stringent, for such a determination results only in a new trial and does not deprive the parties of their right to ultimately have all disputed issues of fact resolved by a jury (Cohen, supra, at 498).The fact that determination of a motion to set aside a verdict involves judicial discretion does not imply, however, that this Court can freely interfere with any verdict that is unsatisfactory or with which it disagrees. A preeminent principle of jurisprudence in this area is that the discretionary power to set aside a jury verdict and order a new trial must be exercised with considerable caution, for in the absence of indications that substantial justice has not been done, a successful litigant is entitled to the benefits of a favorable jury verdict. "Fact-finding is the province of the jury, not the trial court, and a court must act cautiously or it could engage in an overzealous enforcement of its duty to oversee the proper administration of justice. A court cannot overstep its bounds and unnecessarily interfere with the fact-finding function of the jury to a degree that amounts to an usurpation of the jury's duty" (citations omitted). Nicastro v Park, 113 AD2d 129 [2d Dept 1985]).

Analysis of the cases reveals that particular deference has traditionally been accorded to jury [*3]verdicts in favor of defendants in tort cases because the disputed factual contentions are often sharper and simpler, and the jury need not find that a defendant has prevailed by a preponderance of the evidence, but rather may simply conclude that the plaintiff has failed to meet the burden of proof, establishing the defendant's culpability (citations omitted). Nicastro v Park, supra at 189.

As a general matter, "[i]ndeed, the court must cautiously balance the great deference to be accorded to the jury's conclusion ... against the court's own obligation to assure that the verdict is fair (citations omitted)." Bennett v Wolf, 40 AD3d 274 [1st Dept 2007]; McDermott v. Coffee Beanery, Ltd., 9 AD3d 195, 206 [1st Dept 2004]; Sepulveda v Aviles, 308 AD2d 1 [1st Dept 2003]; see, Mitchell v Yueh S. Wu, 38 AD3d 507 [2nd Dept 2007]).

Plaintiff argues inter alia, that a critical fact ignored by the jury, is that the expert's testimony regarding plaintiff's physical examination of plaintiff and the attendant medical records, went unrebutted. The TA did not call a medical expert to refute the testimony of plaintiff's expert. Plaintiff's expert, an orthopedic surgeon, testified that spiral fractures often occur when a foot and/or ankle are held in a fixed position, while the rest of the body twists. Plaintiff contends that the expert testimony corroborates plaintiff's version of how the accident occurred.

It is well settled that expert opinion evidence "must be based on facts in the record or personally known to the witness. [The expert] cannot reach his conclusion by assuming material facts not supported by evidence." (Cassano v. Hagstrom, 5 NY2d 643, 646 [1959]; Roques v Noble, 73 AD3d 204 [1st Dept 2010]). Here, the only statements indicating that the accident did not occur in the manner claimed by plaintiff, were the hypothetical statements made by defendant's counsel during his cross-examinations and summation. The TA conductor's testimony was based on speculation, because he testified that he did not know whether he was operating the doors in question at the time of the accident.

Given the plausible, uncontradicted evidence from plaintiff that the accident occurred in the manner he claimed, and not in the manner which defense counsel asserted, substantial justice would not be done if the verdict were permitted to stand. Moreover, plaintiff introduced competent testimony from an orthopedic surgeon, that plaintiff's injuries were the result of a trapping of the lower part of his foot or ankle.[FN1]

The weighing of the evidence is left entirely to this court's discretion, and this discretion may be exercised to set aside a verdict even where the evidence may be technically sufficient to sustain it (see, Siegel-NYPRAC §406; Cohen, supra, at 498-499). The court finds that the verdict is against the weight of the evidence. When there is something about the case that arouses a court's suspicions and makes it uncomfortable, although it cannot say clearly that the result can go in only one direction. It may be some misconduct on the part of counsel that the judge thinks may have influenced the verdict (see, Siegel-NYPRAC § 406, citing, Robinson v Klein, 21 AD2d 778 [1st Dept 1964]).

To obtain a new trial in the interest of justice, "[t]he Trial Judge must decide whether substantial justice has been done, whether it is likely that the verdict has been affected ... and must look to [her] own common sense, experience and sense of fairness rather than to precedents in [*4]arriving at a decision.' ... This power conferred upon a court to order a new trial is discretionary in nature." Micallef v Miehle Co., 39 NY2d 376, 381, (1976).

Plaintiff contends that the TA's attorney's misconduct tainted the course of the trial so that any chance for fair outcome was effectively destroyed, warranting new trial. Plaintiff argues that the TA's attorney interjected his own view of facts as to how he would personally enter and exit a subway train based upon his own experience and, that plaintiff was "rushing" home; and plaintiff never tried to exit the subway before the doors began to close. See, Valenzuela v City of New York, 59 AD3d 40, 869 (1st Dept 2008).Although a new trial may be granted in the rare circumstance that counsel's remarks rise to a watershed of prejudice so profound that it deprives the other party of a right to a fair trial, see e.g., Smith v City of New York, 217 AD2d 423, 424 (1st Dep't 1995), the watershed marker is very high, since the law allows for a wide latitude in the types of remarks allowed during trial and summation including comment, denunciation or appeal in advocating his/her cause. The TA attorney's conduct did not consist merely of a few, isolated, errant remarks. Rather, the remarks were repeated and calculated to influence the jurors by considerations not legitimately before them.

During his closing, the TA attorney also made the following statements:

TA'S Counsel:"After all, if you imagine a person standing in a doorway just standing there when the doors closed — - - and all of you [have] seen this happe[n] and I know this, during jury selection, you've all seen doors close on people and passengers, okay. You know what happens. It's the upper part of the person's body that's contacted."

Plaintiff's Counsel: Objection


TA's Counsel:". . . [B]ecause as I said in my opening, the plaintiff's body was outside of the train at the time of the occurrence. Why was it that way? I have no idea but it wasn't because his leg just happened to be at a particular point that it could be grabbed and held . . ."

"Think about it, how it happened. If he were going through, the upper part of his body would have been hit and would have been the contact point, his arm, shoulder, or something like that . . ."

Plaintiff's Counsel: "Objection"


TA's Counsel:"But not his leg."


TA's Counsel:"There is no other way I see it."

(Exhibit "A" annexed to moving papers).

A lawyer shall not assert personal knowledge of the facts in issue, except when testifying as a witness, and shall not assert a personal opinion as to the credibility of a witness (Code of Professional Responsibility, DR 7-106 [C](3)(4) [22 NYCRR § 1200.37(c)(3),(4)]; see also People v Paperno, 54 NY2d 294, 300-01 [1981]). This conduct amounts to a subtle form of testimony, as to which the opposing party cannot cross-examine (id., citing Paperno, at 301). In ruling on a motion for a new trial based on attorney misconduct, the trial court must determine, in its discretion, whether counsel's conduct created "undue prejudice or passion which played upon the sympathy of the jury" (Valenzuela, supra).

This Court cannot condone defendant's counsel's violation of these basic ethical and [*5]disciplinary rules. Further, this Court's observation was that defendant's counsel so tainted the course of the trial that he effectively destroyed any chance for a fair outcome by interjecting his own view of the facts to the jury."A new trial should be granted in the interests of justice only if there is evidence that substantial justice has not been done ... as would occur, for example, there has been misconduct on the part of the attorneys or jurors." (Gomez v Park Donuts, 249 AD2d 266 [2nd Dept 1998]; see also Schafrann v N. V Famka, Inc., 14 AD3d 363, 364, [1st Dept 2005]).

A verdict should be set aside only when the misconduct of the jury was likely to cause prejudice to one of the parties. Rather than employ a "per se" rule as to what constitutes prejudicial misconduct, courts make the determination on a "case-by-case basis, and the facts in each case must be examined to determine the nature of the material placed before the jury and the likelihood that prejudice would be engendered" (Taylor v Port Authority of New York and New Jersey, 202 AD2d 414 [2nd Dept 1994] [citations and internal quotations omitted]). As this standard suggests, the party claiming misconduct need not prove prejudice to an absolute certainty, but rather, that such prejudicial effect was "likely" (Edbauer v Board of Ed. of North Tonawanda City Sch. Dist., 286 AD2d 999 [4th Dept 2001]).

The TA's counsel created an atmosphere that deprived the plaintiff of a fair trial, not by an isolated remark during summation, but by continual and deliberate efforts to divert attention from the issues (see Vassura v. Taylor, 117 AD2d 798, 799 [2nd Dept 1986]; Mercurio v Dunlop, Ltd., 77 AD2d 647 [2nd Dept 1986]). For example, the TA's counsel repeatedly denigrated the ethics and veracity of the plaintiff and his counsel (see Clarke v New York City Tr. Auth., 174 AD2d 268, 276 [1st Dept 1992]; Weinberger v. City of New York, 97 AD2d 819, 820 [2nd Dept 1983]). The inflammatory and prejudicial comments made by defendant's counsel so contaminated the proceedings as to deny plaintiff his right to a fair trial (see Vassura v Taylor, supra).

According to a dissenting juror, defense counsel's speculative remarks regarding his personal theory regarding the cause of plaintiff's injuries, as well as, similar improper remarks made during summation and cross examination , e.g., plaintiff "jetting out of the train," were relied upon by the remaining jurors, rather than the uncontested witnesses' evidentiary testimony. The dissenting juror was so concerned that the remainder of the jurors were ignoring the evidence, that she asked for a read back of the charge relating to the inadmissability of counsel's remarks made during opening and closing statements.

As a rule of law, the discretionary power afforded to this Court to set aside a jury verdict and to order a new trial can only be exercised with considerable caution. There are strong indications that substantial justice has not been done in this case, therefore plaintiff is entitled to a new trial. Ohdan v City of New York, 268 AD2d 86 (1st Dept 2000); Berry v. Metropolitan Transportation Authority, 256 AD2d 271 (1st Dept 1998).

Accordingly, it is
ORDERED that plaintiff's motion is granted in part and denied in part; and it is further
ORDERED that plaintiff is granted a new trial on all issues; and it is further
ORDERED that plaintiff's counsel is to serve a copy of this Order upon the appropriate clerk's office so as to cause this case to be placed upon the Part 40 calendar.

Dated: May 18, 2011
E N T E R: [*6]
Hon. Joan M. Kenney

Attorney Ravi Batra Wins Right To Depose Defendant Parties From the TV Show Law & Order

Ravi Batra, Plaintiff



Ravi Batra Esq.
142 Lexington Avenue, New York, NY 10016

For Defendants
Elizabeth McNamara Esq.
Davis Wright Tremaine, LLP
1633 Broadway, New York, NY 10019

Lucy Billings, J.


Plaintiff, a New York attorney, sues defendants, all associated in various capacities with the television series Law & Order, for defamation arising from the depiction of a lead character in the "Floater" episode of Law & Order. He claims the episode was based on the scandal involving crimes by attorney Paul Siminovsky and Justice Gerald Garson, but cast an Indian American of plaintiff's age with his first name in the Siminovsky role.

Plaintiff moves to compel disclosure. C.P.L.R. § 3124. This decision and order address plaintiff's notices demanding depositions of defendants Dick Wolf, Peter Jankowski, Jeffrey Hayes, and Kati Johnston, to which defendants have objected. C.P.L.R. § 3107. Upon oral [*2]argument June 17 and July 8, 2010, for the reasons explained below, the court grants plaintiff's motion to the extent of compelling these defendants' depositions, on the conditions specified.

"Any party may take the testimony of any person by deposition," without an initial showing of materiality. C.P.L.R. § 3106. See Seltzer v. Bayer, 272 AD2d 263, 266 (1st Dep't 2000); Fasciglione v. D.C.D. Advert., Ltd., 256 AD2d 215 (1st Dep't 1998). Although C.P.L.R. § 3103(a) confers "broad discretion" on the court to issue protective orders denying or limiting disclosure, including depositions, "to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person," see Lipin v. Bender, 84 NY2d 562, 570 (1994); Jones v. Maples, 257 AD2d 53, 56 (1st Dep't 1999), the rule disfavors limitations. Emile v. Big Brothers/Big Sisters of New York City, Inc., 292 AD2d 297, 298 (1st Dep't 2002).


As named defendants, Wolf, Jankowski, Hayes, and Johnston must anticipate expending time and effort defending themselves and thus disclosing information relevant to their defenses. See C.P.L.R. § 3101(a)(1) and (2). Only the most extreme circumstances would shield defendants from their depositions, such as systematic harassment by plaintiff, including breaking into and entering defendants' apartments and distributing forged obscene images of defendants to their family, friends, and associates, or defendants' severe psychiatric disorders such that a deposition would endanger their mental health. Jones v. Maples, 257 AD2d at 56-57; Button v. Guererri, 298 AD2d 947 (4th Dep't 2002). Defendants have not indicated any remotely comparable circumstances.

The standard allowing disclosure of "all matter material and necessary," C.P.L.R. § 3101, is by those terms broad and to be "interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity." Allen v. Crowell-Collier Publ. Co., 21 NY2d 403, 406 (1968); Osowski v. Amec Const. Mgmt., Inc., 69 AD3d 99, 106 (1st Dep't 2009). Defendant Wolf Films, a business entity of unspecified form, was responsible for production of Law & Order. Defendant Wolf, the Chairman of Wolf Films, had ultimate authority over production of the Law & Order episode, received the reports clearing names for use on the show, and is in a position to know the contracts and relationships among the business entities associated with Law & Order or involved in the "Floater" episode's production. Defendant Matthew Penn, a producer of the episode, testified at his deposition that Wolf had authority to alter the show's scripts, authority Penn likely would not mention unless Wolf had exercised it.

Defendant Jankowski, the President of Wolf Films and in charge of that entity's budget and personnel, is likely in a position to clarify the precise responsibilities of the Law & Order staff. Even if the depositions of Wolf and Jankowski ultimately establish their lack of responsibility for any defamation, which they obviously have not accomplished yet, they still may have observed, heard, or otherwise learned information that would point plaintiff to admissible evidence. Even if they insist they remember nothing regarding the "Floater" episode, plaintiff is entitled to test their lack of memory and attempt to refresh it, whether about the script, developing it into a film, or any other information leading to admissible evidence.

As an Executive Producer of Law & Order, defendant Hayes oversaw the production of the "Floater" episode, was involved in readings of its script and auditions for the episode, and likely participated in or at least witnessed discussions or decisions regarding the alleged defamatory character. Again, even if not responsible for any defamation, he still may be witness to it, and, in any event, defendants have not as yet established their nonliability.

As a Line Producer for Law & Order, defendant Johnston was similarly in a position to have participated in or witnessed discussions or decisions regarding the character. Although Johnston in her affidavit denies working on the "Floater" episode, plaintiff is entitled to attempt to refresh her recollection given the contradictory deposition testimony by defendant Eric Overmyer, the writer of the "Floater" script. He testified that he did interact with Johnston in recording the episode, and she was present for readings of its script before the script was in final [*3]form.

Plaintiff suggests, and no evidence refutes, that this phase of script development may have been when a story based on the Siminovsky-Garson scandal evolved to cast an Indian American as the attorney involved. If, as plaintiff further alleges, contemporaneous publicity about him inspired the use of an Indian American attorney, any decision to carry out that inspiration involved business judgment, weighing the risks versus the episode's success, by executives like Jankowski and Wolf. Producers like Hayes and Johnston may well be in a position to identify who provided creative direction for Law & Order episodes' content. If Johnston did not work on the "Floater" episode, she may be in a position also to identify which line producer did.


These defendants' status as employees at high levels that may remove them from direct knowledge of material information does not insulate them from depositions. Plaintiff seeks to depose all four witnesses in their capacity as named defendants, not merely in their capacity as employees of defendant. C.P.L.R. § 3101(a)(1) and (2). See Broadband Communications v. Home Box Off., 157 AD2d 479, 480 (1st Dep't 1990); Saieh v. Demetro, 201 AD2d 477 (2d Dep't 1994).

Insofar as these defendants' high level positions limit their knowledge, however, their removed positions may limit their depositions. If defendants continue to display a sincere lack of memory, plaintiff may not test and attempt to refresh it endlessly. Had defendants requested or the record indicated that the information to be gleaned from these defendants was equally available through a less burdensome disclosure device, the court might preclude depositions until after plaintiff used that device and then showed it to be insufficient. Button v. Guererri, 298 AD2d 947. Likewise, time limits may prevent "unreasonable annoyance" or harassment. C.P.L.R. § 3103(a). See Bielat v. Montrose, 249 AD2d 103 (1st Dep't 1998).


For the foregoing reasons, the court grants plaintiff's motion to compel the depositions of defendants Dick Wolf, Peter Jankowski, Jeffrey Hayes, and Kati Johnston, subject to the following conditions, unless the parties stipulate otherwise. Plaintiff shall re-serve notice of the times and places for these defendants' depositions, consistent with C.P.L.R. §§ 3107 and 3110. Plaintiff shall be limited to three hours per deposition for his questions and each defendant's answers, exclusive of objections or colloquy by defendants' attorneys, as well as interruptions or breaks off the record.

DATED: August 23, 2010

Alexander Kaplan, Esq., Sentenced To 46 months In Prison For Mortgage Fraud Scheme

Real Estate Lawyer Sentenced in Manhattan Federal Court to 46 Months in Prison for His Role in a Multimillion-Dollar Mortgage Fraud Scheme

U.S. Attorney’s Office June 21, 2011
* Southern District of New York (212) 637-2600

Press Release

PREET BHARARA, the United States Attorney for the Southern District of New York (pictured above), announced that ALEXANDER KAPLAN, formerly a Brooklyn-based real estate lawyer and the owner of a title insurance company, was sentenced on Friday, June 17, 2011, in Manhattan federal court to 46 months in prison by United States District Judge RICHARD J. HOLWELL for his role in a multimillion dollar mortgage fraud scheme. KAPLAN was convicted, on February 6, 2009, of eighteen counts of mortgage fraud after a two-week jury trial.

According to the evidence presented at trial and statements made in court:

From late 2004 through January 2007, KAPLAN and his coconspirators obtained hundreds of mortgage and home equity loans by submitting loan applications and supporting documents to various lenders that contained false information about, among other things, the prospective borrower’s employment, income, and intent to reside in the property in question, as well as the fair market value of the property.

The fraud also involved paying individuals who fit a certain financial profile to act as phony purchasers, or “straw buyers,” of the target properties. KAPLAN’s co-conspirators then prepared and submitted false and misleading information concerning the straw buyers’ current residences, employment, income, assets, and existing debt. False documentation, such as bank statements and proof of income, were also created and submitted to the lenders.
In addition, KAPLAN and his co-conspirators sought mortgages and home equity loans at values that were in excess of properties’ actual sale prices and, therefore, the properties’ true market values. To support applications for loans in excess of the properties’ market values, they procured artificially inflated appraisals of the market value of the target properties. Using these false appraisals, KAPLAN’s co-conspirators received mortgages and other loans in excess of the actual sale price of the properties securing the loans. The difference between the appraised value of the property and the property’s actual sale price represented, in part, the profits from the scheme.

KAPLAN’s role in the scheme largely centered on the purchase of a block of ten rent-regulated condominium apartments at 243 West 98 Street, on the Upper West Side of Manhattan th (“the Apartments“). Over the course of two separate days in January 2006, KAPLAN served as the attorney for the buyers and the banks in the closings of the Apartments. He conspired with others to obtain mortgages, based on false statements and material omissions, to finance 100 percent of the purchase price of the Apartments.

In his capacity as the buyers’ attorney and bank attorney, KAPLAN presided over the closings, and obtained signed and completed false documents, including, among other things, loan application documents, on which each of the buyers indicated that the Apartment was to be a “primary residence,” and false affidavits stating that the buyers intended to occupy the Apartments. He submitted these fraudulent documents to the lenders.

Almost all of the Apartments were then resold, or “flipped,” to straw-buyers within a matter of months after their initial purchases. The purported sales prices for each of the flips was almost twice the initial purchase price, and KAPLAN’s co-conspirators obtained almost $13 million in additional loans on the Apartments by submitting false information and documents to various lenders. KAPLAN served as both the buyer’s and seller’s attorney for each of these flips, drafting sham contracts of sale and other necessary documentation. He also served as the attorney for the banks at the closings of certain loans obtained in connection with the flips of the Apartments.

In addition to the prison term, Judge HOLWELL sentenced KAPLAN, 36, of Brooklyn, New York, to three years of supervised release.

Mr. BHARARA praised the efforts of the Federal Bureau of Investigation, the New York City Police Department, and the United States Bureau of Immigration and Customs Enforcement. He also thanked the New York State Attorney General’s Office for its outstanding work in the investigation.

This case is being prosecuted by the Office’s Organized Crime Unit. Assistant United States Attorneys AVI WEITZMAN and KATHERINE R. GOLDSTEIN are in charge of the prosecution.

Mortgage Fraud: 02-09-09 Alexander Kaplan, Guilty

Posted on February 9, 2009
by alaskakid

LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, announced that attorney ALEXANDER KAPLAN was found guilty today of participating in a multimillion-dollar mortgage fraud scheme. KAPLAN was found guilty, after a two-week jury trial in Manhattan federal court, on all eighteen counts in the Indictment against him. According to the evidence at trial, statements made in open court, and the Indictment:

From late 2004 through January 2007, KAPLAN and his coconspirators, using phony purchasers, or “straw buyers,” obtained hundreds of mortgage and home equity loans by submitting to various lenders loan applications and supporting documents that contained false information about, among other things, the prospective borrower’s employment, income and assets, and intent to reside in the property in question, as well as the fair market value of the property.

In addition, KAPLAN and his co-conspirators, using artificially inflated appraisals, sought and obtained mortgages and home equity loans at values that were in excess of properties’ actual sale prices and, thus, the properties’ true market values. The difference between the appraised value and actual sale price of the property represented, in the part, the profits from the scheme.

KAPLAN participated in the scheme by acting as a lawyer for the straw buyers and providing misleading and false information to the lenders. As shown at trial, concerning a block of ten rent-regulated condominium apartments at 243 West 98 th Street, on the Upper West Side of Manhattan (“the Apartments”), KAPLAN served as the attorney for the buyers and the banks in the closings of sales of the Apartments, supported by 100% financing. None of the documents submitted to the lenders in these transactions disclosed that: (1) certain buyers were seeking loans to purchase more than one Apartment as a “primary residence;” (2) each of the Apartments was already occupied by a tenant, and therefore not suitable for a primary residence; or (3) the Apartments were subject to rent regulation laws that precluded the buyer from charging the reported rents.

KAPLAN presided over the closings, and obtained for submission to the lender signed and completed false documents, including, among other things, loan application documents, on which each of the buyers indicated that the Apartment was to be a “primary residence,” and false affidavits stating that the buyers intended to occupy the Apartments.

Almost all of the Apartments were then resold, or “flipped,” to straw buyers within a matter of months. The purported sales prices for each of the flips was almost twice the initial purchase price, and KAPLAN’s co-conspirators obtained almost $13 million in additional loans on the Apartments by submitting false information and documents to the lenders.

KAPLAN served as both the buyer’s and seller’s attorney in connection with the flip transactions, drafting sham contracts of sale and other documentation. KAPLAN also served as the attorney for the banks in connection with certain of the flip transactions, and distributed a portion of the loan proceeds to his co-conspirators.

KAPLAN, of Brooklyn, New York, was found guilty of one count of conspiracy to commit bank, wire, and mail fraud; six counts of bank fraud; eight counts of wire fraud; and three counts of mail fraud. The conspiracy count carries a maximum prison sentence of 30 years and a fine of $1 million or twice the gross gain or loss resulting from the offense. Each of the substantive bank, wire, and mail fraud counts carries a maximum prison sentence of 30 years and a fine of $1 million or twice the gross gain or loss resulting from the offense.

KAPLAN is scheduled to be sentenced by United States District Judge RICHARD J. HOLWELL on May 1, 2009.

Of the 26 other defendants originally charged with KAPLAN in United States v. Aleksander Lipkin, et al., 25 have pleaded guilty. The case against JOHN CIAFALO remains pending.

Mr. DASSIN praised the investigative work of the Federal Bureau of Investigation, New York City Police Department, and Department of Homeland Security’s U.S. Immigration and Customs Enforcement.

Assistant United States Attorneys JONATHAN B. NEW, KATHERINE R. GOLDSTEIN, and AVI WEITZMAN are in charge of the prosecution.

The charges and allegations contained in the Indictment against CIAFALO are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

N.Y. Attorney Convicted of Mortgage Fraud
Mark Hamblett All Articles
New York Law Journal
February 09, 2009

The bogus world of a Brooklyn, N.Y., attorney who built a profitable business on title insurance while earning high fees on real estate closings came crashing down on Friday as a federal jury convicted him in a subprime mortgage scam.

Alexander M. Kaplan, 34, of Lerner & Kaplan, sat stoically at the defense table while a jury of 10 women and two men pronounced him guilty on all 18 counts in an indictment charging him with conspiracy and bank, mail and wire fraud.

Kaplan, who testified in his own defense, is scheduled to be sentenced May 1 by Southern District Judge Richard Holwell.

The verdict was a victory for Assistant U.S. Attorneys Avi Weitzman and Jonathan New, who persuaded the jury that Kaplan played a pivotal role in a wide-ranging conspiracy that ripped off lenders of millions of dollars.

Kaplan's role, they proved, was to keep lenders in the dark by representing the bank, the buyer and the seller in transactions where mortgage brokers, particularly lead actor Alexander Lipkin, would use the identities of innocent straw buyers to obtain huge loans on properties. Sometimes, they would flip the properties within weeks using even more phony documents.

Weitzman told the jury during summations in the two-week trial that Kaplan was "a liar and fraudster," who "engaged in a massive fraud that was perpetrated by all these people.

"He did so by telling lies to banks over and over again. He lied about who the real purchasers were and he lied about the amount of money he disbursed from the loan proceeds," Weitzman said. "His lies were all intended to protect his criminal partners and to make sure the real estate transactions looked legitimate."

Kaplan was one of 27 people indicted in the conspiracy. All of the other defendants except one have pleaded guilty, including Lipkin who admitted to guilt in two schemes in June 2008. He has yet to be sentenced.

The first was part of a foreclosure "rescue scheme" whereby Lipkin induced distressed homeowners to transfer the deeds in their homes to straw buyers who would supposedly "save" their homes and promise to return the deed to the homeowners.

In the end, Lipkin and his cohorts, using the straw buyers, would take out millions of dollars in loans on the property. They would then default on those loans, leaving both the banks and the straw buyers damaged.

The second scheme concerned subprime mortgages. Lipkin and others submitted applications for millions of dollars to lenders using fraudulent documents, a scheme that cost the lenders more than $4.5 million.

Kaplan, the prosecutors said, was one of several dirty lawyers who helped facilitate these plots, including the signature scam in the indictment: the purchase of a block of apartments at 243 West 98th Street in Manhattan where Lipkin and several others, including Kaplan, never disclosed to the bank that the units were occupied and under rent control. Some tenants were paying as little as $393 a month.

Kaplan made between $850 to $1,100 in fees per closing and much more in title fees, Weitzman said, and he made "tens of thousands" in fees on the West 98th Street deal.


Defense lawyer Diarmuid White of White & White in Manhattan, was faced with an uphill battle. It did not help when his client took the witness stand and was unable to remember key details, claimed paralegals handled a good deal of the work, and conceded he did not file income taxes in 2006 and then blamed his accountant.

White's strategy was to portray Kaplan as an ambitious young attorney who was trying to build a "mill" and who let things get away from him through sloppy business practices and mismanagement.

"No question he did not act as diligently as he should have," White told the jury during opening statements, asking why Kaplan "would risk everything -- his law career, his business, everything, to willingly participate in such a conspiracy?"

Kaplan, admitted to the bar in 1999 after graduating from New York Law School, started with a small firm practicing immigration, matrimonial and real estate law. After working for another real estate firm in Brooklyn, he and partner Garry Lerner, who is his cousin, started their own practice focusing on real estate.

Kaplan got his foot in the door by becoming the closing agent for one bank. He soon became the agent for another six banks and, at the peak of his practice, did closings for as many as 60 banks.

By 2004, he was doing as many as 10 closings a day, employing teams of paralegals to handle most of the transactions.

In the  same building as Lerner & Kaplan on E. 12th Street in Brooklyn, Kaplan built a thriving 10-employee title company, Executive Settlement Services.

"Why send this out? Why not have a title company that I control and all the fees that it generates?" White said to the jury during opening arguments. "Now that's good business, but it's not so good for a lawyer because there is a potential conflict of interest."

There were ethical lapses, he said, and Kaplan "spread himself too thin" because "he couldn't possibly oversee every transaction."

In his summation, White did not mince words, saying Lerner & Kaplan was "run poorly, not well supervised, not managed properly."

"There was too much emphasis on growing the business," he said. "The practice was a mess."

White said that Lipkin, "the ringleader," lied to everyone along the way, the banks, the straw buyers, the other defendants and Kaplan, whom he played for a dummy.

"He was a fool, a total fool," White said. "He was ripe for Lipkin to manipulate and that's what happened. He was duped."

But Weitzman and New convinced the jury that it was impossible for Kaplan to sign off on one document after another on the closings, particularly the West 98th Street property, without knowing, or at least consciously avoiding, the truth.

Weitzman compared Kaplan to the three monkeys who hear no evil, see no evil and speak no evil.

"Essentially, Kaplan's defense is 'I didn't see nothing. I didn't hear nothing,'" he said.

Kaplan faces a potential sentence of upwards of 30 years and a fine of $1 million, but is expected to receive much less under the U.S. Sentencing Guidelines.