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Will White-Collar Crime Bring Jail Time?

by Paul Bass | Apr 8, 2014 8:54 am

(2) Comments | Commenting has been closed | E-mail the Author

Posted to: Legal Writes

Paul Bass Photo A man who pocketed up to $1 million through a poverty real-estate scam in struggling city neighborhoods aims to cut his time behind bars from 30 years to zero—by helping the government convict his alleged accomplices.

To get there, Joseph Menachem “Yossi” Levitin had to endure some sharp taunts from attorneys Monday without responding in kind or defending himself.

“You lied, cheated and stole ... Lying was relatively easy for you, wasn’t it?” one attorney, Bruce Koffsky, asked him.

To which Levitin responded: “I got blinded by greed and went with it.”

Another attorney, Hubert Santos, quoted some remarks Levitin had made of a fellow scammer: “‘Shady’ ... ‘A scumbag’ ... ‘He would steal from his own mother.’ Are you describing him or yourself?”

To which Levitin responded: “Do you really want me to answer that?”

Those taunts and revelations—including the amount of money Levitin pocketed, a previously undisclosed scam of business partners from Israel, and his states hopes in a potential plea deal—emerged in Judge Janet Hall’s U.S. District courtroom on Church Street.

There, Levitin testified for a second day about the myriad ways he broke the law and cheated lenders and partners as he helped destroy blocks of Newhallville, the Hill and Fair Haven in one of the largest exposed mortgage-fraud scams in city history.

Levitin—who is 28 and started in poverty real estate at 18—was not on trial. He has already pleaded guilty to his crimes. Now he’s serving as the federal government’s star witness against Andrew Constantinou and Jacques Kelly. The government accuses them of participating in Levitin’s wide-ranging scam, which involved over 40 properties and cheated lenders out of more than $10 million between 2006 and 2008 while helping drag down blocks where other property owners are trying to rebuild. (Click here to read about the case against the pair, and their defense.)

On Monday, defense attorneys Santos and Koffsky turned into prosecutors as they sought to impeach the star witness as a lying, thuggish outlaw seeking a get-out-of-jail-free card, whose revelations about their clients can’t be trusted. Just as, last Thursday, a federal prosecutor, Assistant U.S. Attorney David T. Huang (pictured), had served as a defense attorney of sorts, gently walking Levitin through his criminal confessions as a contrite truth-teller.

In the process, the defense attorneys Monday extracted new information about just how much money Levitin made in the scheme, and how much he expects to pay for it.

At the heart of defense attorneys’ cross-examination was an argument common to this case: You can’t trust the star witness. To make their case in a conspiracy, the feds often get a major player in the conspiracy to plea bargain and testify against former co-conspirators. That means they put an admitted thief and/or liar on the stand—and ask the jury to believe them. Why believe the witness now? Especially when he stands to gain so much by convincing you to believe him.

Take Levitin. He faces 30 years in jail and up to $1 million in fines for his crimes.

The defense Monday exhibited the cooperation agreement Levitin signed with federal prosecutors. It showed that if Levitin cooperates fully with the government, it will recommend to his sentencing judge that his charges be reduced to carry a penalty of between 63 and 97 months in jail.

On top, of that, attorney Santos got Levitin to acknowledge, he hopes to obtain a “5k motion,” a letter from prosecutors attesting that he has cooperated fully and thus would deserve a further reduction in his sentence.

“What do you think you’re going to get?” Santos asked Levitin

“I have no idea,” Levitin responded.

“Two to three years?”

“I have no idea.”

“What do you hope to be getting?” Santos pressed, alternating his gaze throughout the questioning between Levitin and the 12 jurors and six alternate jurors to his right.

“My hope?” responded Levitin.

“Your hope.”

“My hope is nothing.”

“Probation!” Santos exclaimed.

“Yes.”

“Here you are, an admitted liar, thief, scammer. You’re hoping to walk out the door,” Santos continued.

“I’ve learned my lesson,” Levitin stated, “the hard way.”

Santos picked up on “hard way.” He described the “camp”—or minimum federal security prison—where white-collar criminals like Levitin end up serving time. Santos described them as places where inmates “play tennis all day” rather than share cells with violent felons.

Elvis Has Left The Building

Levitin parried Santos’s (pictured outside court) and Koffsky’s parries without falling into the trap they were clearly setting—to display anger, aggressiveness, hostility, argumentativeness. He stayed calm. He spoke softly. Most of the time he stuck to the witness script of answering precisely what an adversarial attorney asks, factually, without adding any information or opinions.

That left it to the attorneys to invoke the power of imagination to conjure the image of Levitin the rapacious lying tough guy who masterminded a scheme in which their clients now serve as fall guys.

Santos pretended to seek a precise number of times Levitin lied while arranging fradulent real-estate sales contracts, drawing up fake tenant leases, arranging for phony appraisals, shooting photos of occupied rooms to fool lenders about vacant apartments.

“Is it fair to say you lied and deceived every day of the week during your conspiracy?” Santos asked. “... Thousands of times? ... You cannot remember how many times you lied, deceived between 2006 and 2008?”

Koffsky noted that Levitin wore a dress jacket and button-down shirt to court. Then he asked about his fashion and transportation and tobacco choices as a property manager on the streets of New Haven.

“You rode a motorcyle around New Haven, didn’t you?” he pressed Levitin.

Yes, Levitin acknowledged. Only it was a Suzuki, not, as Koffsky claimed, a Yamaha.

“You smoked Cuban cigars, correct?”

“From time to time.”

“You wore sunglasses that made you look like Elvis, correct?”

“If,” Levitin, responded, “it was sunny out.”

Israel Partner’s Israeli Friends Duped

Perhaps more damning to Levitin’s credibility, though were new details about his dealings as a real-estate agent and property manager and owner. 

Santos walked him through the fees he collected arranging for sales based on sham prices contained in secret contract “addenda,” kickbacks, fake leases and photos, invented “repair fees” that sent tens of thousands of dollars in cash back to the buyers of properties at closings. All in all, Levitin conservatively estimated, he made at least $700,000 in fees for arranging those deals.

Then Santos questioned him about another set of transactions that hadn’t arisen during prosecutor Huang’s friendly damage-control questioning the previous Thursday. These involved same-day property flips that suckered Levitin’s own partners.

For instance: Levitin admitted under cross-examination that he repeatedly fooled the buyers whom he represented in these deals—by first buying a property himself, cheap, then reselling it to them the same day for $45,000 or $75,000 more. He wouldn’t tell them he bought the property first. Rather, he would form a limited liability corporation through which to buy and then flip the property. He’d give someone else power of attorney in order to appear as the seller instead of Levitin. The buyers never realized they were buying the properties from their own agent, at jacked-up prices that put tens of thousands of dollars a pop into his pocket.

Among the victims of that flipping fraud were Israeli investors, Levitin testified. He met them through an Israeli bar owner named Lior Moshe. The investors flew to New Haven so Levitin could show them rundown houses he could arrange for them to buy cheap in poor neighborhoods. They bought numerous properties—at the wildly inflated flipped prices. He did the same with numerous properties bought by one of the local alleged fellow scammers involved in the scheme, he testified. All told, that would easily put Levitin’s personal take in the two-year scam over $1 million.

Through the invocation of the Israeli victims, Santos found another way to raise questions about the relationship between star witness and the government: Levitin continues to do business with Lior Moshe. And with many others. In fact, after forfeiting 51 properties to the feds after his 2010 arrest, Levitin has quietly begun amassing a new poverty landlord empire in the same New Haven neighborhoods. The Independent, for instance, has tracked at least 27 properties in town purchased since Levitin’s arrest by limited-liability corporations (LLCs)—for which Levitin serves as registered agent and/or a partner, in some cases along with Lior Moshe). In all cases his Levitin Management firm manages the properties.

Santos asked him about that in court Monday.

“You put together these fake leases. You lied to all sorts of people ...” he stated. “And now the government is permitting you while this case is pending to manage real estate?” Santos didn’t mention that Levitin is also in some cases an equity party in these transactions.

“How many people have you duped since 2010?” Santos asked.

Levitin didn’t flinch. He didn’t bristle.

“I believe,” he calmly retorted, “I run an honest business.”


Previous articles about this case and a related New Haven mortgage-fraud case:

Facing 30 Years, Scammer Turns Star Witness
Scammer, Awaiting Sentence, Rebuilds
Patsies? Or Schemers?
Fraud Defense: Banks Were The Real Crooks
Kwame & Straw Buyer Leave Trail Of Blight
1 Mortgage Fraud Ring Down, Feds Turn To 2nd
“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
Mortgage Fraud Mastermind Gets 10 Years

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posted by: cedarhillresident! on April 8, 2014  9:33am

I can not stand this. Not only did this guy scam the banks…but there are other victims to this crime. The community’s that these crimes happened in received a false inflation of the market value of their home and taxes are based on that false market rate inflated by this scum. People bought surrounding homes during this time thinking the were paying a fair price but in reality they were paying a price based on this false market rate.  These people deserve justice just as much as the banks!! And he is still buying homes in the area to run to the ground? I am sorry but this man did far more damage than robbing banks. (lets also remember the people that lived in the buildings) I have one property in my area the man ran. They went without heat half the winter one year. (all to afraid to call LCI)

posted by: PH on April 9, 2014  2:27pm

@cedarhillresident

Agreed. People who acquired property in the area around these sham properties with inflated values should drag this character into civil court and get him to empty out his pockets.  He should be liable for the difference in tax assessments and payments in the years affected, and for loss of fair market value attributable to the inflated comparable properties.  If anyone bought a property with one of these sham properties listed as a comp I would think they would have a very strong argument that Levitin owes restitution, plus interest, for the excessive value they were swindled into believing they were getting.

There is a deep enough (and scum-lined) pocket that some lawyer should be interested!

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