Rabbi Spared Prison In Mortgage Fraud Case
by Melissa Bailey | Jun 28, 2012 5:01 pm
Posted to: Legal Writes
In a tear- and psalm-filled courtroom, a New Haven rabbi apologized for his role in a mortgage scam and emerged a free man—after a judge concluded he played only a minor role in the ring.
David Avigdor (pictured), New Haven’s longest-serving pulpit rabbi, learned his fate at a sentencing Thursday before Chief Judge Alvin W. Thompson in U.S. District Court in Hartford.
The rabbi was the sole defendant left standing last year after a trial for six of the 15 people accused of taking part in a conspiracy that defrauded government and private lenders of millions of dollars and left blighted homes scattered through New Haven and surrounding towns. While his co-defendants headed to prison, the rabbi remained free after a jury deadlocked on his case.
Avigdor and his family returned to court Thursday for a final chapter in the case that he said has “devastated” him.
Instead of sitting through a second trial, Avigdor hired a new attorney and struck a deal with the feds. The feds agreed to toss out felony conspiracy, wire fraud and false statement charges if Avigdor pleaded to one misdemeanor false statement charge. Avigdor, who originally proclaimed his innocence, pleaded guilty on March 20.
Under the plea deal, Avigdor agreed to surrender his law license for one year and pay $20,000 in restitution. The government agreed to recommend three years’ probation instead of prison.
However, the final word was up to the judge.
Heading into his sentencing Friday, Avigdor faced up to one year in prison and a fine of up to $100,000. Based on the relatively little amount of money Avigdor reaped in the scam compared to his co-defendants, Judge Thompson said, he agreed to depart from sentencing guidelines and give him three years’ probation instead of prison. The final amount of restitution to the victim, Wells Fargo Bank, is yet to be determined.
The decision brought tears of relief after a tense morning in the grand, gold-paneled second-floor courtroom.
Avigdor, who’s 58, showed up in court Thursday morning with his wife Susan, their eldest child, Rachel, and their youngest, Jacob.
He broke down on the stand as he apologized for what he did, while also trying to pin blame on his co-defendant, former Alderman and state Rep. Morris Olmer.
Avigdor limped to the stand. He is suffering from partial paralysis on his left side due to a stroke he suffered while the case was pending, according to his lawyer.
“I stand before you ashamed, frightened, and regretful that I had any part at all in this terrible mortgage fraud,” Avigdor told the judge.
Avigdor claimed he was “drawn into transactions that were fraudulent” without his intent.
It all started when Avigdor, who’s an attorney, was laid off in 2007 and found office space next to Olmer on Whalley Avenue. Unbeknownst to him, Avigdor argued, Olmer, a lawyer who had lost his license because of previous alleged wrongdoing, was embroiled in a 14-member mortgage fraud ring that would end up bilking government and private lenders out of $4.75 million.
“I regret the day I met him,” Avigdor said of Olmer.
The members of the ring made money by falsely inflating the price of homes, paying “straw buyers” to take out mortgages using trumped-up income and employment records, using the mortgage money to buy the homes for their actual prices, then pocketing the difference and walking away. The scheme left a trail of blighted properties through New Haven and elsewhere.
Because Olmer had lost his law license, Avigdor acted as the settlement agent on the home sales. Avigdor pleaded guilty to one count of making a false statement to the Department of Housing and Urban Development (HUD) on a mortgage form.
Avigdor was the settlement agent for the $160,000 sale of 211 Lloyd St. by Marshall Asmar—a convicted conspirator—to Alicia Martineau—a convicted straw buyer. (Read her dramatic story here.) Avigdor signed a HUD-1 form stating that Asmar would receive $144,763.42 from the sale. He certified that the form was “true and accurate account of this transaction. I have caused or will cause the funds to be disbursed in accordance with this statement.”
But he didn’t do as he had promised. He transferred only $93,000 to Asmar, and sent $49,375 to Sheda Telle Construction, a fake construction company the conspirators had invented as a cover.
Avigdor claimed Olmer roped him into the scheme without his intent to join it. If he hadn’t moved into the office building with Olmer, Avigdor told the judge Thursday, “I would not be before you today.”
Avigdor said he had a clean 25-year-long legal record before meeting Olmer. His past colleagues were “straight like arrows,” Avigdor said, so he was caught unaware by Olmer.
“I abdicated my professional obligation as a lawyer” by “blindly” trusting Olmer, Avigdor said. Judge Thompson ended up sending Olmer to prison for five years.
“I deeply regret my mistake and errors in this complex matter,” Avigdor said.
He broke down as he told the judge how he sought to do good. In addition to leading the Congregation Bikur Cholim-Sheveth Achim for 32 straight years, Avigdor founded a boys’ choir and often performed legal work for free, according to his lawyer.
“I have tried to live a good life,” he said amid tears, “and to perform good deeds ... “
His daughter burst out crying as she heard her father cry. The judge passed down a box of tissues from his bench.
... “good works,” Avigdor continued, “to assist people of every background, to help them through hard times.”
“Helping others is my essence,” Avigdor declared.
He then summoned the Holocaust in an emotional finale.
“It was the U.S. Army that liberated my father and father-in-law” from a concentration camp, he said. For that fact alone, he said, “I love the United States” and would never want to violate its laws.
“I am truly sorry for ignoring the signals” and becoming part of a fraud ring that had a “wide-ranging impact,” he continued, including on his own family and community.
“I regret the pain that I have caused to them.”
Avigdor presented his case in a 154-page memo defending his character and urging the judge to spare him jail. The memo, prepared by Attorney James Glasser of Wiggin and Dana in New Haven, included pages of testimony as to Avigdor’s good deeds.
Click here to read the memo.
In remarks to the judge Thursday, Glasser hit home a few points:
• Olmer made Avigdor do it. Avigdor “wasn’t told by anyone that he was getting involved in mortgage fraud.” Avigdor had an important role, but he wasn’t an “active participant” like the others.
• The others made off with more loot. While other defendants walked away with as much as 10 or 20 thousand per sale, Avigdor made only $5,845 in settlement fees, plus $7,609 in title insurance fees, over the course of all 14 transactions over 17 months.
• Avigdor isn’t greedy. He has led a life of “philanthropic endeavors” and lives in a humble home full of religious books. When a Jewish person passes away, Avigdor volunteers to stay with the body for 24 hours, as is Jewish custom. He has been known to walk across town to the hospital to visit people on the Sabbath, when he cannot drive.
• Avigdor has already suffered plenty. Avigdor had a good reputation for years; “The notion that he was involved in something criminal—it’s a dagger to him.”
“The fact that others may not view him the way they did before is just devastating to him,” Glasser said.
In an unusual move, the prosecution urged the judge to spare the defendant prison, despite what the sentencing guidelines say.
Federal sentencing guidelines called for 12 months in prison. Prosecutor Eric Glover (at left in photo) agreed with the defense, however, that Avigdor was a small fish not deserving of the slammer.
In all the hours of wiretapped phone calls, Glover said, there is a “lack of direct evidence that Mr. Avigdor was aware of an ongoing scheme—or the core criminal conduct or how pervasive it was.”
Glover agreed that Avigdor’s comparatively small earnings are a key sign as to his level of culpability.
“When you have straw buyers making off with bags of cash, yet Mr. Avigdor getting what he was getting,” Glover said, is indicative of his “lesser role.”
Neither side mentioned that the co-conspirators helped Avigdor’s wife, Susan, sell a home that had languished on the market for months. Susan earn a $18,600 commission on the sale of the home, which went to a straw buyer who didn’t live in the house and allegedly lied on loan applications.
Glover said Avigdor “allowed himself to be used” in the scam and acknowledged his part in the scheme.
Both sides lay still in the windowless room as Judge Thompson sat for 12 minutes, writing out a decision by hand.
Avigdor’s wife read from Psalms. Son Jacob closed his eyes and whispered beside her. Avigdor also read from a Hebrew book. A large silver clock crept forward. The room was quiet except for an occasional creak from his swivel chair.
At 11:14 a.m., Judge Thompson nodded to the court reporter that he was ready. Prosecutors sat upright in their chairs. Avigdor leaned forward, elbows on the table.
Judge Thompson ticked off the factors he’s permitted to consider in departing from the sentencing guidelines. The most relevant one, he said, is the need for the sentence to offer “just punishment” commensurate to the crime.
He said “just punishment” in this case does not require prison.
The rabbi earned only $13,454 from the scam, Thompson calculated—“a miniscule percentage of your net worth.”
“You simply did not need the money,” the judge said. “I can’t read your mind,” he said, but the motive of the crime does not appear to be “greed and personal financial gain.”
“You are clearly guilty of a crime—but it’s a very different type of culpability.”
Thompson said that finding alone was enough to spare a defendant from jail. However, he noted for the record that he found Avigdor’s good deeds “very impressive.”
“It was quite telling that the point at which you choked up” was when Avigdor was talking about living a good life. That’s indicative of his character, the judge concluded.
Glasser thanked the judge, and issued a special note of thanks to the government for not trying to put his client behind bars.
As Thompson issued the sentence of three years’ probation, Avigdor’s family let out tears of relief. They hugged the rabbi, collected the Psalms, and headed out the door.
Previous coverage of this case:
• Rabbi Pleads Guilty
• Mortgage Fraud Mastermind Gets 10 Years
• “Big Liberal” Gets 5 Years For Ripping Off Poor
• White-Collar Criminals Sent To Slammer
• Judge Baffled By Two Morris Olmers
• Feds Will Retry Avigdor
• 4 Convicted In Fraud Scam; Mistrial For Rabbi
• Jury Can’t Agree In Scam Trial
• Avigdor’s Final Plea: Follow The Money
• Claire: The Rabbi Is Kosher
• Wednesday The Rabbi Took The Stand
• Straw Buyer Lured Into A Wild Ride
• After Big Fish Plead, Smaller Fry Point Fingers
• Slum-Photo Doctor Makes A Call
• What Happened At Goodfellas Didn’t Stay At Goodfellas
• Fraud Trial Opens With Oz-Like Yarn
• “Partying” MySpacer Lined Up Scam Homebuyers
• “Straw Buyer” Pleads Guilty
• Neighbors, Taxpayers Left With The Tab
• FBI Arrests Police Commissioner, Slumlord, Rabbi
• One Last Gambit Falls Short
• Was He In “Custody”?
• Is Slum Landlord Helping The FBI?
• Feds Snag Poverty Landlord
• Police Commissioner Pleads
Post a Comment
posted by: OccupyTheClassroom on June 28, 2012 9:58pm
Sell drugs, get prison. Sell fake mortgages, get a slap on the wrist.
Where is the compensation for the other victims, the people of good character who live in the neighborhoods that were gutted by this scam?
Suspended licence for a year? How about life? The may not have profited greatly, but he was a key player because he had a law licence. Pathetic.
I feel bad for the neighborhoods wherein these properties were being used. It looks like Fair Haven has been exploited by this network of criminals.
Figure 1 in 10 odds of getting caught. 9/10 you make $14k, 1/10 you pay $6k.
White collar crime pays.
Another fraud was just perpetrated on the public. There is a kid in North Branford who sent threatening text messages across 10 minutes - he did 10 months in a federal prison. The feds forced him to plead to a felony. Nobody was hurt. Nobody was even in danger. Zero evidence he could have carried out his threats and no evidence he intended to carry it out. He’s black.
My guess is that the young man in North Branford didn’t have the same knowledge of the law as this rabbi did while he was committing crimes.
Had the young man been more calculated in his approach to breaking the law, he would not have been as harshly punished.
Sad for David, sad for his family, sad for New Haven….I hope a strong lesson was learned here and from this he moves forward and makes amends in his own way to trusting people and G_d. Start over and start with asking privately for complete forgiveness from the one who really counts when it is all said and done and over in this life here on earth.