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United States v. Weinstein

United States District Court, D. New Jersey

December 8, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
ELIYAHU WEINSTEIN, Defendant.

OPINION

JOEL A. PISANO, District Judge.

Presently before the Court is Defendant, Eliyahu Weinstein's ("Defendant" or "Weinstein") motion to dismiss the indictment [docket #71]. The government opposes this motion [docket #75]. Defendant Weinstein also filed a supplemental brief on the basis of newly obtained evidence [docket #78]. The Court considered the papers filed by the parties and rules on the written submissions without oral argument. For the reasons that follow, this Court DENIES Defendant's motion to dismiss in its entirety.

I. BACKGROUND

In October 2011, Defendant Weinstein was indicted by a grand jury on charges of wire fraud conspiracy, wire fraud, bank fraud, and money laundering for operating a Ponzi scheme "from at least as early as in or about June 2004 through in or about August 2011." [Docket #38, at ¶ 9 in 11-cr-701 ("Weinstein I")]. The indictment in Weinstein I alleged that Weinstein and unidentified co-conspirators "raised funds from victims for specific real estate transactions and used material portions of the raised funds for other purposes without disclosing those diversions of funds to victims." See Certification of Creizman, at Ex. B ¶ 2. On August 30, 2010, a Magistrate Judge entered an Order setting conditions of release, and Defendant was released on bail shortly thereafter.

According to the government, reports surfaced that Weinstein violated his bail conditions by engaging in subsequent criminal conduct. This subsequent criminal conduct included meeting with witnesses outside the presence of counsel, engaging in financial transactions in contravention of the conditions of his release, and continuing to engage in other fraudulent activity. For example, in or around November 2012, the government learned of a doctor from Florida who was seeking investors for a medical device company, and who was introduced to Defendant Weinstein, Fredrick Todd, and Aaron Glucksman. It was reported to the government that Weinstein made various misrepresentations to the doctor, and promised investments that never materialized.

On January 3, 2013, Defendant Weinstein pleaded guilty to Count One of the Weinstein I indictment (charging him with conspiracy to commit wire fraud) and Count Thirty-Six of the indictment (charging him with transacting in criminal proceeds). The parties' plea agreement contained the following provision:

If Eliyahu Weinstein enters a guilty plea and is sentenced on these charges consistent with the stipulated range under Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure, and otherwise fully complies with all of the terms of this agreement, this Office will not initiate any further criminal charges against Eliyahu Weinstein for his conduct, now known to the government, from in or about June 2004 through the date a plea is entered in this matter.

[docket #74 in 11-cr-701]. As of the date of Defendant Weinstein's plea, the facts referenced above surrounding the unidentified doctor was the extent of the conduct generally known to the government; however, they did not know any specifics about other potential victims or other subsequent frauds.

On or about February 6, 2013, more than one (1) month after Weinstein pleaded guilty in Weinstein I, the government first learned of specific details surrounding Weinstein's continuing criminal conduct. An attorney representing victims, J.C. and G.C. (collectively "the victims") informed the government that he represented individuals who had been victimized by the Defendant. On or about March 17, 2013, the government first met and interviewed the Weinstein II victims who, even at that time, were still acting in concert with Defendant and others acting at his direction and were hopeful their "investments" would be repaid.

Two (2) months later, on or about May 13, 2013, a Magistrate Judge signed a criminal complaint against Weinstein and issued a warrant for his arrest, having found that there was probable cause to believe that, between February 2012 and May 2013, Weinstein conspired to defraud victims G.C. and J.C., laundered the fraud proceeds, and committed five (5) substantive counts of wire fraud at various times throughout 2012 while on release in Weinstein I. The next day, Defendant Weinstein was arrested on those charges. Approximately one (1) week later, and more than five (5) months after Weinstein pled guilty in Weinstein I, the government first learned that Defendant Weinstein had also victimized A.Q., whose transactions make up the balance of the Weinstein II indictment.

Almost one (1) year later, on April 17, 2014, a grand jury indicted Weinstein in Weinstein II, finding probable cause to believe that from February 2012 through about May 2013, Weinstein defrauded G.C., J.C., and A.Q., with respect to purported investments in pre IPO shares of Facebook, Inc. and Florida real estate properties. On September 3, 2014, Defendant Weinstein pled guilty to Counts One, Two, and Twelve of the Weinstein II indictment, and also filed the instant motion which was preserved by the terms of his plea. In this motion, Defendant Weinstein makes two (2) claims: first, he argues that the government breached its plea agreement with him in Weinstein I by filing the Weinstein II indictment, contending that the criminal conduct outlined in the Weinstein II indictment was covered by the plea agreement because he reasonably believed that it was included in the conduct from in or about June 2004 through January 3, 2013 for which the government agreed not to initiate further charges against him; second, Weinstein claims that because the charges in Weinstein II are encompassed by the conspiracy charged in Count One of Weinstein I, the charges in Weinstein II should be dismissed on double jeopardy grounds. Defendant also requests this Court to conduct a hearing on the instant motion. The Court will address each of these arguments below.

II. DISCUSSION

a. Legal Standard

To determine whether the government breached the plea agreement, the Court uses the principles of contract law. See, e.g., United States v. Gebbie, 294 F.3d 540, 545 (3d Cir. 2002); United States v. Moscahlaidis, 868 F.2d 1357, 1361 (3d Cir. 1989) ("Although a plea agreement occurs in the criminal context, it remains contractual in nature and is to be analyzed under contractlaw standards."). Such agreements, however, are unique in light of special due process concerns and must be construed accordingly. United States v. Baird, 218 F.3d 221, 229 (3d Cir. 2000). Thus, "[w]hen a plea rests in any significant degree on a promise or agreement of the prosecutor, so that it can be said to be part of the inducement or consideration, such promise must be fulfilled." Santobello v. New York, 404 U.S. 257, 262, 92 S.Ct. 495, 499, 30 ...


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