Tuesday, March 01, 2005

His father organized armed resistance to Nazis, his Rabbi/brother was known for charity, now lawyer Sam Burstyn fights drug and murder allegations

6 Comments:

At 3:08 AM, Blogger jewishwhistleblower said...

http://www.tallahassee.com/mld/tallahassee/news/breaking_news/11016042.htm

Mon, Feb. 28, 2005

Bond set for Miami attorney charged with laundering drug money
CATHERINE WILSON
Associated Press

FORT LAUDERDALE, Fla. - Prosecutors dredged up one of Miami's biggest scandals Monday by claiming a prominent attorney newly charged in a drug money laundering scheme joined a plot to kill three witnesses against drug-running police in the 1980s.

The defense dismissed the allegations as a desperate attempt to keep millionaire lawyer Sam Burstyn in jail until trial. U.S. Magistrate Judge Barry Seltzer set $400,000 bail and ordered Burstyn to stop taking new clients and mail his indictment to old ones.

Burstyn is accused of holding onto $500,000 cash in marijuana smuggling profits as collateral for a $498,250 loan in 1998 from Burstyn to an Atlanta business owned by a client's drug-dealing partner. He's also accused of advising two suspects to flee the country and inducing grand jury perjury to hide his corrupt role.

A former magistrate, a rabbi, lawyers and a niece spoke for Burstyn at a hearing that at times sounded more like a testimonial dinner for the longtime Miami attorney. He has represented Robin Givens and the estranged wives of tennis player Boris Becker and German billionaire Alexander Otto as well as an officer in the infamous Miami River Cops case.

Burstyn mentioned two government witnesses, made a throat-slitting gesture and told Officer Rodolfo Arias, "That's the only way you're going to win this," Assistant U.S. Attorney Michael Dittoe said in describing the 1984 police trial that ended in a mistrial. Ultimately, more than 100 officers were arrested, fired or disciplined.

Burstyn also prolonged the cross-examination of minor witnesses on a Friday to give police defendants extra time to track down and kill another witness, Dittoe said. The witness ended up testifying.

Burstyn's attorney Ed Shohat said the allegations were investigated by a special prosecutor at the time and resulted in no charges and no complaint to the Florida Bar.

"It just shows you they're desperate," said Shohat. "They didn't even believe it."

In the new case, Dittoe outlined complex transactions and analyzed tape-recorded conversations Burstyn had with marijuana ringleader Jeffrey Tobin. He is now serving a 16-year prison sentences and his brother, who also is cooperating against Burstyn, got 11 years.

"They're trying to get out on the backs of lawyers," Shohat told the judge.

Seltzer called the charges "very, very serious" and said they "represent a direct attack on the integrity of the system." He agreed to stay his bail decision for a day to give prosecutors time to consider an appeal.

Intimidating role-playing exercises to coach clients on false testimony was "a constant theme" for Burstyn, Dittoe argued in support of obstruction of justice charges.

Dittoe cited Burstyn's wealth, international clientele and international travel to justify keeping him in jail for several months before trial. He cited a potential prison sentence of 11 to 19 years in prison as another reason for Burstyn to flee.

Burstyn, 52, who has been jailed since Wednesday, regularly interrupted his attorney and spoke in stage whispers to get his points across.

"Mr. Burstyn has no place to go but here to fight these charges. In case you haven't noticed it, he's kind of feisty," Shohat said.

 
At 12:11 PM, Blogger yeshivaguy said...

What does this have to do with the accountability of leaders and institutions? Bursztyn is neither.

 
At 12:30 PM, Blogger jewishwhistleblower said...

Bursztyn and his extended family have ties to many of the Orthodox institutions in Florida.

He also represented Sholam Weiss (and a relative of his in a seperate case) who was responsible for $125 million of theft from National Heritage Life Insurance Co.

1)
Man Facing Prison for Dealings with Former Florida Insurer May Be Resentenced.
By Susan Clary
The Orlando Sentinel, Fla.
June 11, 2002

Federal prosecutors said Monday they will ask a judge to resentence a New York businessman who faces 845 years in prison for crimes associated with the $400 million theft from the National Heritage Life Insurance Co.

Assistant U.S. Attorneys Judy Hunt and Tom Turner said they plan to honor an agreement with Austrian officials in accordance with the extradition of Sholam Weiss, 47, who was returned Sunday to Orlando after nearly three years as a fugitive.

Weiss, dressed in a red jail jumpsuit and jail-issue sandals, appeared at an initial appearance before U.S. Magistrate Karla Spaulding at the federal courthouse in Orlando. Shackled at the ankles, he sat alone at a table that was surrounded by marshals.

Spaulding read Weiss his Miranda rights and told him he was appearing on a warrant issued by U.S. District Judge Patricia Fawsett after he failed to appear in court on Oct. 18, 1999 - the day a jury began deliberating the case against him after a nine-month trial.

Weiss of Monsey, N.Y., was convicted of dozens of counts against him for his corrupt business dealings with the insurer. He was sentenced in absentia to the longest federal prison term ever imposed.

Weiss was one of a dozen people charged in the case, but he was responsible for $125 million of the theft. The Orlando insurance company collapsed in 1994. Weiss, who remains at the Seminole County Jail, was silent at Monday's hearing. His attorney asked that Weiss be served kosher food. Austrian officials extradited Weiss on the condition that one count - obstruction of justice - be dropped because Austria doesn't recognize that as a crime. Weiss' current sentence includes five years for that crime, which is why prosecutors are seeking to have him resentenced.

Fawsett would make the final decision.

Miami attorney Sam Burstyn, who represented Weiss in his fight against extradition, appeared by phone from New York, where he is working.

Burstyn said he doesn't think the U.S. court has jurisdiction over Weiss because he said Weiss was kidnapped by federal agents. The lawyer reiterated his contention that the U.S. government colluded with Austrian officials to violate Austrian law and a treaty between the two countries.

Federal officials denied they spirited Weiss out of Austria early Sunday.

"Everything was done aboveboard," said Supervisory Special Agent Michael Ward with the FBI. "There was nothing sinister or untoward involved in his extradition."

Prosecutors filed their own motion Monday to have Burstyn thrown off the case because he defended Isack Rosenberg of Brooklyn, N.Y., who is married to Weiss' cousin.

In October 1999, Rosenberg pleaded guilty in the insurance case and was sentenced to two years' probation and a $10,000 fine. The judge said Monday that she would schedule a hearing to determine if Burstyn's representation of Weiss was a conflict.

"We look forward to concluding the few remaining hearings we have to bring this saga to an end," said Hunt, the prosecutor, after the hearing.

The courtroom was packed Monday with media and courthouse workers who were curious to see Weiss in person for the first time since 1999.

Orlando attorney Leon Handley appeared on behalf of National Heritage Life Insurance Co., which is now in liquidation.

"We feel vindicated - like our system has been vindicated," Handley said.

"Irony of all ironies, he jumps bail and that frustrates our efforts to retrieve his assets. But now hope springs eternal."

Fred Marro, acting general counsel for National Heritage, said his team has recovered $225 million toward payment to the guaranty fund and the thousands of policyholders who lost money.

Sitting in the back of the packed courtroom was one of 12 jurors who sat through the nine-month trial in federal court in 1999. Marcia Praysner, 47, a human resources specialist in Ocoee, said she had to come to see the end of Weiss' freedom.

"I wanted closure," Praysner said. "It was a very long trial, and it was a very big part of my life. I feel he was guilty and part of a large group that stole a lot of money and ruined thousands of lives."

2)
Fugitive asks for bond hearing, requests kosher meals in jail
By MIKE SCHNEIDER
Associated Press Writer
June 10, 2002

ORLANDO, Fla. (AP) - Even though Shalom Weiss had been sentenced in absentia to 845 years in prison, eluded international authorities for a year and faked a heart attack to delay being extradited from Austria, he wasn't about to give up without a fight.

The Yeshiva-educated businessman, who fled the United States three years ago before a jury convicted him of bilking tens of millions of dollars from an Orlando insurance company, asked a judge Monday for a bond hearing and that he be given kosher meals in jail.

U.S. Magistrate Karla Spaulding ordered Weiss held in custody. She agreed that he should receive kosher meals.

During a 20-minute initial appearance, Weiss' attorney called into question the legality of the extradition from Vienna to Orlando, which occurred Sunday.

"We object to the unlawful manner in which Mr. Weiss was essentially kidnapped," attorney Sam Burstyn said by speakerphone during the hearing. Burstyn was in the New York area for another trial.

But federal prosecutors said the extradition was legal, and they filed a motion to have Burstyn removed from the case because he had represented a co-defendant of Weiss, which prosecutors argued presented a conflict of interest.

The extradition petition was "drawn in accordance with the law," prosecutor Judy Hunt said after the hearing. "This was a horrendous crime that caused a number of people tremendous suffering."

Hunt said prosecutors would refile a sentencing motion dropping an obstruction of justice charge that could knock five years off of Weiss' sentence. Austrian officials allowed the extradition on the condition that the obstruction charge be dropped because the nation doesn't have a such a crime.

Dressed in a red prison suit and shackled at the hands and feet, a glum-looking Weiss presented a stark contrast to the type of high-living that investigators said Weiss grew accustomed to while living on the lam.

As a fugitive in Israel, Brazil, Belgium, the United Kingdom and Austria, Weiss acquired a call-girl girlfriend, gambled at casinos and lived at expensive hotels, officials said. He eluded authorities by using aliases such as "Charles Dick" and "Saul Levine," said retired FBI special agent Joseph Judge.

His wife and family remained in Monsey, N.Y., and at times in Brazil, while he moved in and out of the community of religious, Chasidic Jews.

"When it suits him, he's a religious Jew," Judge said. "When he's by himself, he shaves his beard and he gambles."

Weiss and 16 others were either convicted or pleaded guilty to stealing more than $250 million from National Heritage Life Insurance Co. through fraudulent business dealings. Federal authorities called it the largest failure due to criminal activity in the insurance industry's history.

Weiss fled the United States as a federal jury was deliberating his case in 1999 after a nine-month trial. In addition to the prison sentence, Weiss was ordered to pay restitution of $125 million.

Weiss was arrested in 2000 after his call-girl girlfriend, who was secretly being followed by Brazilian, Austrian and German investigators, inadvertently led authorities to Weiss in Vienna.

Marcia Praysner, who was a member of the jury that convicted Weiss and attended Monday's hearing, said she was glad to see him returned to face his sentence.

"I feel good that they finally got him," Praysner said. "I think he's come to the end - finally."

 
At 12:38 PM, Blogger jewishwhistleblower said...

Isack Rosenberg

1)
GREEN BACKER PLEADED TO DIRTY-MONEY SCHEME

GREG B. SMITH DAILY NEWS STAFF WRITER
September 8, 2001
New York Daily News

A former yeshiva official involved in laundering money for a mob- controlled strip club helped organize a big endorsement for mayoral candidate Mark Green, the Daily News has learned.

As part of a deal with prosecutors, Isack Rosenberg pleaded guilty in October 1999 to bankruptcy fraud and testified last month in Atlanta about a scheme to launder cash through a Brooklyn yeshiva for the owners of the Scores strip club.

In July, Rosenberg stood next to a smiling Green on the steps of City Hall, claiming to represent the Satmar community, one of the biggest Hasidic sects in New York.

Until late yesterday afternoon, a photo of Rosenberg standing next to Green was posted on the candidate's Web site, along with a story that quoted Rosenberg as saying, "our community is united behind Mark."

The photo was removed from the site less than an hour after The News contacted the Green campaign for comment.

Spokesman Joe DePlasco said the campaign had no clue that Rosenberg was involved with the owners of Scores or had pleaded guilty to bankruptcy fraud.

The day he stood next to Green on the City Hall steps, Rosenberg was on probation from that charge, records show.

Rosenberg was on the board of the Yeshiva Yetev Lev D'Jerusalem in June 1995 when a lawyer connected to Scores wrote two checks totaling $100,000 to the yeshiva.

Rosenberg said that as a yeshiva director, he had the school write $100,000 in checks to his lumber firm. He then withdrew $95,000 in cash from the business and delivered it to ex-Scores owner Lyle Pfeffer.

Pfeffer - who pleaded guilty to fraud charges and is cooperating with the FBI - says he delivered the cash to Gambino soldier Craig DePalma. DePalma told an Atlanta federal grand jury that he gave the cash to John A. (Junior) Gotti.

Rosenberg's lawyer, Samuel Burstyn, insisted his client did not know the money was going to Gotti. He said it was just a loan and that Rosenberg used the yeshiva to ensure he'd be repaid.

Two other Satmar leaders involved in the Green endorsement also have problems in their pasts: Jack Brach, also quoted on the Green Web site yesterday, was convicted of wire fraud in Wisconsin and sentenced to 27 months in jail.

Abe Wieder, mayor of the Orange County Hasidic town of Kiryas Joel, also helped arrange the Green endorsement. He is under investigation by the Orange County district attorney into allegations of voter fraud.

Brach and Wieder could not be reached yesterday for comment.

2)
Mob used sect to wash cash
GREG B. SMITH SPECIAL TO EXPRESS
September 7, 2001
New York Daily News

A mob-controlled strip club used a yeshiva run by the city's biggest Hasidic sect to launder cash for crime boss John A. (Junior) Gotti, federal prosecutors say.

The scheme orchestrated by the owners of Scores, the upscale strip club, apparently was carried out without the knowledge of the Satmars, the sect that operates Yeshiva Yetev Lev D'Jerusalem, of Williamsburg, Brooklyn.

At least one yeshiva board member, Isack Rosenberg, served as a conduit for the cash, but says he had no idea it was going to Gotti, say the prosecutors.

Details of the alleged money-laundering emerged last month in the final days of the Gold Club trial in Atlanta, in which prosecutors said Gotti got $100,000 to settle a dispute between gangsters fighting for control of Scores.

The East Side club was secretly controlled by the Gambinos in the mid-1990s.

Rosenberg's lawyer, Samuel Burstyn, said his client deeply regrets involving the yeshiva - or Orthodox Jewish school.

"Unequivocally, I can tell you that Mr. Rosenberg never had any inkling that this transaction would lead into the Gotti crime syndicate," Burstyn said.

3)
YESHIVA AND THE MOB Feds: Gotti washed cash through B'klyn school
GREG B. SMITH DAILY NEWS STAFF WRITER
September 7, 2001
New York Daily News

A mob-controlled strip club used a yeshiva run by the city's biggest Hasidic sect to launder cash for crime boss John A. (Junior) Gotti, federal prosecutors have charged.

The scheme orchestrated by the owners of Scores, the upscale strip club, apparently was carried out without the knowledge of the Satmars, the sect that operates Yeshiva Yetev Lev D'Jerusalem of Williamsburg, Brooklyn.

At least one yeshiva board member, Isack Rosenberg, served as a conduit for the cash, but says he had no idea it was going to Gotti.

Details of the money laundering emerged last month in the final days of the Gold Club trial in Atlanta, where prosecutors alleged Gotti received $100,000 to settle a dispute between gangsters fighting for control of Scores.

The East Side club was secretly controlled by the Gambinos in the mid-1990s.

According to testimony in the Gold Club case, in June 1995 Rosenberg was asked by a lawyer connected to Scores to obtain a large sum of cash.

With Rosenberg's okay, the lawyer then wrote two checks to the yeshiva from an entity called the First Avenue Nite Club Corp., which owned the now-defunct Chippendales male strip club on the East Side.

The two checks totaling $100,000 were deposited in the yeshiva account, and Rosenberg says he told yeshiva board members the money was a "loan."

Rosenberg says he then wrote checks totaling $100,000 to his lumber company, which then provided $95,000 in cash for the transaction. He kept a $5,000 fee for himself.

Rosenberg says he delivered the cash to Scores co-owner Lyle Pfeffer at Scores' corporate office in midtown.

Pfeffer - who pleaded guilty to fraud charges and cooperated with the government - said he gave the cash to Craig DePalma, a mob soldier. DePalma told the Gold Club grand jury he later handed it to Gotti at a Long Island wedding.

Gotti pleaded guilty to numerous racketeering charges in 1999 and is serving a six-year sentence. His lawyer, Gerald Shargel, noted that Gotti did not admit to participation in the Scores shakedown.

Rosenberg's lawyer, Samuel Burstyn, said his client deeply regrets involving the yeshiva in the transaction.

"Unequivocally, I can tell you that Mr. Rosenberg never had any inkling that this transaction would lead into the Gotti crime syndicate," Burstyn said. "He was trying to help out a friend, and he was deceived about the true purpose of the loan."

Officials at Yeshiva Yetev Lev D'Jerusalem did not return several calls for comment. Burstyn said Rosenberg is no longer affiliated with the yeshiva.

4)
Judge Denies Restitution for Customers of Orlando, Fla., Insurance Firm
Susan Clary
February 8, 2000
Florida

They went to federal court Monday to seek restitution for 25,000 policyholders whose money was stolen from an Orlando insurance company.

But attorneys who are managing the liquidation of National Heritage Life Insurance Co. left empty-handed.

U.S. District Judge Patricia Fawsett rejected their request to order New York businessman Isack Rosenberg to pay more than $3 million to victims as part of his sentence.

The insurance company, chartered in Delaware, collapsed in 1994. A dozen people have been convicted of stealing $400 million from the insurer through a series of complicated schemes.

Rosenberg, 51, pleaded guilty in October to bankruptcy fraud. In a surprising move, prosecutors dropped racketeering charges against him and agreed not to seek restitution.

Originally facing 20 years in prison, he was sentenced Monday to two years' probation and a $10,000 fine.

Attorneys for the insurance company, who traveled from Pennsylvania, Delaware and New York to attend the hearing, said they were outraged that prosecutors were so lenient.

"There is no question Mr. Rosenberg received money and no question he did not repay it," said Greg Magarity, a Philadelphia attorney representing the insurer. "Probation with no restitution seems an absurd result."

Rosenberg admitted he submitted two false documents to a federal bankruptcy court in New York in 1992, claiming National Heritage was a $4.3 million creditor in his companies, Certified Lumber and Boro Park Inc. By making those false statements, National Heritage became the largest single unsecured creditor in the case, which placed it in a position to control Rosenberg's plan of repayment.

The New York businessman who represented the insurer in Rosenberg's bankruptcy actually was an associate of Rosenberg's who had obtained mortgage loans for him.

That associate, who later pleaded guilty to multiple crimes, also loaned Rosenberg more than $3 million of stolen National Heritage money.

Assistant U.S. Attorney Tom Turner said Monday there was no evidence Rosenberg knew the money he borrowed was stolen.

"We can only seek restitution for a crime in which he has been convicted," Turner said. "We could not prove he was part of the conspiracy."

Rosenberg's attorney, Samuel Burstyn of Miami, said he received a copy of the motion seeking restitution before it was filed with a note requesting repayment.

"Isack Rosenberg never had any involvement whatsoever in the National Heritage looting," Burstyn said after the hearing. "This is extortion and malicious prosecution. I don't know if the old broken-down Northeast lawyers realize that."

Burstyn said he was happy with Fawsett's decision not to require restitution. He said he plans to file a lawsuit against insurance officials.

Rosenberg appeared in court with his wife. She is a cousin of Sholam Weiss, 45, the lead defendant in the National Heritage case. Weiss and three others were convicted of crimes following a nine month trial last year.

Weiss, who faces a sentence of life in prison on Feb. 15, disappeared in October and is the subject of an FBI manhunt.

Delaware officials will continue their efforts to retrieve stolen money through civil suits filed in Florida and New York.

"We are going to move on and prove our case in civil court and try to restore the money lost by policyholders," said Fred Marro, acting general counsel for National Heritage. "We will continue to chase after assets, wherever they are."

5)
Defendant Enters Plea in Nation's Largest-Ever Insurance-Fraud Case
Susan Clary
November 1, 1999
KRTBN Knight-Ridder Tribune Business News
The Orlando Sentinel - Florida

As a jury finished its second week of deliberations in a federal insurance fraud trial Friday, a defendant who participated in the crimes pleaded guilty in another courtroom.

The jury is deciding the fate of five people charged with stealing millions of dollars from National Heritage Life Insurance Co., in the largest insurance fraud in nation's history.

Just before the trial began Feb. 1, U.S. District Judge Patricia Fawsett granted a separate trial for a sixth defendant, Isack Rosenberg, 51, of Brooklyn, N.Y.

Rosenberg was charged with various racketeering acts and faced 20 years in prison. His trial was scheduled to begin when the current trial is complete.

But in a deal with prosecutors, Rosenberg pleaded guilty Friday to bankruptcy fraud in front of U.S. Magistrate Karla Spaulding.

The charge carries a maximum five-year sentence, but Rosenberg will likely receive a much reduced sentence or probation.

Rosenberg admitted he submitted two false documents, one sworn and one not sworn, to a federal bankruptcy court in New York in 1992, claiming National Heritage was a $4.3 million creditor in his companies, Certified Lumber and Boro Park Inc.

National Heritage was not a creditor. The insurer had made a loan to another Rosenberg company, which was not in bankruptcy.

By making those false statements, National Heritage became the largest single unsecured creditor in the case, which gave it position to control Rosenberg's plan of repayment.

The New York businessman who represented the insurer in Rosenberg's bankruptcy was actually an associate of Rosenberg's who had obtained mortgage loans for him.

In Rosenberg's plea agreement, prosecutors dropped the other charges and agreed not to prosecute Rosenberg for any other crimes related to the case.

Assistant U.S. Attorney Tom Turner also told Spaulding he would ask federal prosecutors in New York not to pursue charges against Rosenberg.

More significantly, the government agreed there was no actual loss to any victim and no restitution would be ordered.

Rosenberg is married to the cousin of the lead defendant in the National Heritage trial, Sholam Weiss, 45. In that case, Weiss is accused of participating in the bankruptcy fraud scheme and is charged with a $4 million loss.

"This is an acknowledgement by the government that there was no loss with respect to the Certified Lumber allegations," said Steve Altman, Weiss' civil attorney in New York. "It is recognition of the weakness of the case they presented to the jury."

Weiss, who faces life in prison if he is convicted on all counts, disappeared Oct. 18, the day the jury began its deliberations.

In their second week of deliberations, the jury asked two questions -- one about the omission of a racketeering act from a verdict form and the other related to inconsistencies in dates and evidence.

The nine men and three women have made their own schedule and have hunkered down in a sixth-floor courtroom to sift through boxes of evidence. Fawsett told them not to consider Weiss' absence in their decision.

Weiss' attorney, Joel Hirschhorn of Miami, has refused to answer questions about his client's whereabouts. The family said they have not heard from Weiss since Oct. 17.

At the end of Friday's hearing, Rosenberg's attorney Sam Burstyn asked Spaulding to remove the travel restrictions from Rosenberg's bond so that he can travel to a family wedding in December in Israel.

After a short pause, Spaulding granted the request.

"Come back, Mr. Rosenberg," Spaulding said.

"That sounds like a knowing admonition," Burstyn replied.

Rosenberg, who flew to Orlando from New York and carried his suitcase to court, said Friday he has not heard from Weiss. The jury will return at 9 a.m. Monday to continue deliberations.

6)
Nine More Charged in National Heritage Collapse.
April 30, 998
Bestwire

OLDWICK, N.J. - Nine people and seven companies were charged in a 93-count indictment Wednesday for their roles in the collapse of National Heritage Life Insurance Co. and its parent, LifeCo Investment Group Inc.

In an indictment handed up in U.S. District Court in Orlando, Fla., Shalom Weiss, the former owner of Studio 54 in New York, and several of his former business partners are accused of taking part in $300 million worth of fraudulent transactions that eventually led to the insurer's collapse in 1994.

Regulators have said the loss is one of the largest fraud-related failures of an insurance company. To date, more than 40 civil and criminal suits have been filed during a four-year, multistate investigation that includes federal prosecutors, the FBI, the Internal Revenue Service, the U.S. Postal Service and the Department of Insurance in Delaware, where Orlando-based National Heritage was incorporated.

The indictments came after it was announced that three key players had pleaded guilty in the case and were cooperating with prosecutors. They are Patrick Smythe, former National Heritage president and chief operating officer; Michael Blutrich, a New York attorney and former outside counsel for LifeCo and National Heritage; and Lyle Pfeffer, a New York businessman and former consultant for LifeCo and National Heritage.

In the new indictment, Weiss is charged with 76 counts of racketeering, conspiracy, fraud, theft, money laundering, lying to prosecutors, and giving grand jurors false documents.

Also charged were his lawyer, Jan Schneiderman; Richard Herman, the former law partner of Blutrich; and business partners Nadine Allen, Robert Gorski, Richard Langer, Keith Pound, Isack Rosenberg, and Yaakov Stark.

None of the defendants could be reached for comment.

Weiss and Herman were previously charged, but the case was dropped by prosecutors in December. At the time, prosecutors indicated they wanted to get a broader indictment.

Also named were New York based companies South Star Management Inc., Ados Equities Inc. and Sprite Equities Inc.; National Housing Exchange Inc., a North Carolina company; and Illinois-based APX Mortgage Services Inc., Resource Asset Management Inc., and National Workout Specialists Inc.

According to the indictment, several transactions took place that fraudulently inflated the value of the company and hid the real financial problems from regulators.

In one of the first such transactions, according to the indictment, Weiss bought $80 million in National Heritage's assets by giving the company inflated mortgages. He is also accused of providing $250,000 in bribes to Smythe, Blutrich and Pfeffer.

Pound is charged with skimming off the top of LifeCo's mortgage division, which he ran, while Allen and Gorski are accused of siphoning money from a mortgage collection subsidiary. All told, the indictment alleges the three stole $4.2 million from the company.

Past indictments have shown some of the company's money went to fund loans for such operations as Scores nightclub in New York and Club Harem, a topless bar in Florida.

The scheme began to unravel in 1994 when the Delaware insurance department, conducting a triennial examination to validate National Heritage's assets, discovered that at least $35 million that the company declared in assets had in fact been liquidated.

While National Heritage thought it had at least $35 million in cash and stocks in New York, most of the assets pledged behind the insurer's back were gone by May 1993, court records indicate.

The company was initially put under supervision, then in May 1994, a rehabilitation order from the Delaware Chancery Court appointed Insurance Commissioner Donna Lee Williams as receiver. By July 1995, Williams decided the company couldn't be reorganized and had to be liquidated.

Williams has also filed suit against the company and its officers.

National Heritage, which did business in 20 states, had about 35,000 policyholders, with the majority-about 10,500-in Florida. The policies have been taken over by Metropolitan Life Insurance Co. and two other companies.

The case was one of the first handled under a model multistate insurance liquidation act created by the National Association of Insurance Commissioners, allowing one state to act as receiver in cases where misconduct in several states is involved.

 
At 6:59 PM, Blogger yeshivaguy said...

"Bursztyn and his extended family have ties to many of the Orthodox institutions in Florida."

Just about every Jew in existence has ties to Jewish institutions. That doesn't make everyone a leader or institution.

 
At 8:17 PM, Blogger jewishwhistleblower said...

Yeah, but how many lawyers are the lawyers of choice for Orthodox criminals with ties to organized crime who need to fight for their right to have kosher meals in jail? Keep watching this case, interesting stuff to come.

 

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