Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States of America v. Evelyn Litwok

April 30, 2012

UNITED STATES OF AMERICA, APPELLEE,
v.
EVELYN LITWOK, DEFENDANT-APPELLANT.



The opinion of the court was delivered by: Lohier, Circuit Judge:

10-1985-cr

United States v. Litwok

4 (Argued: August 30, 2011 Final Submission: September 7, 2011

Before: LIVINGSTON and LOHIER, Circuit Judges, and KOELTL, District Judge.*fn1

15 Evelyn Litwok appeals from a judgment of conviction entered in the United States 16 District Court for the Eastern District of New York (Wexler, J.), after a jury found her guilty of 17 one count of mail fraud and three counts of tax evasion for calendar years 1995 through 1997. 18 On appeal, Litwok contends that the trial evidence was insufficient to support her convictions 19 and that the mail fraud and the tax evasion counts were improperly joined. We agree with 20 Litwok on the sufficiency challenges relating to the tax evasion counts for 1996 and 1997 and 21 reverse her convictions on those counts. We vacate Litwok's convictions for mail fraud and tax 22 evasion for 1995 on the ground that those counts were improperly joined, and we remand the 23 case to the District Court for further proceedings.

7 Evelyn Litwok appeals from a judgment of conviction entered after a jury trial in the 8 United States District Court for the Eastern District of New York (Wexler, J.), at which she was 9 found guilty of one count of mail fraud and three counts of tax evasion relating to calendar years 10 1995 through 1997. She challenges the sufficiency of the evidence underlying all four 11 convictions as well as the joinder of the mail fraud and tax evasion counts. With respect to the 12 two counts of tax evasion for the years 1996 and 1997, we reverse for insufficient evidence. We 13 vacate her convictions on the remaining two counts of mail fraud and tax evasion for 1995 14 because those counts, while supported by sufficient evidence, were improperly joined.

15 BACKGROUND

16 Because this is an appeal from a judgment of conviction entered after a jury trial, the 17 following facts are drawn from the trial evidence and described in the light most favorable to the 18 Government. United States v. Bahel, 662 F.3d 610, 617 (2d Cir. 2011).

19 1. Mail Fraud

20 A superseding indictment (the "Indictment") charged Litwok with mail fraud in 21 connection with a false insurance claim relating to her house on Duke Drive in East Hampton, 22 New York. At trial, however, the Government presented evidence relating to both Litwok's 23 house on Duke Drive, where Litwok, a stockbroker, lived and operated her businesses, and a 24 nearby house she owned on Aborigine Way. Litwok eventually transferred nominal ownership 1 of both houses to her close friend, Dalia Eilat, under whose name the homes were insured by a 2 subsidiary of Chubb Insurance Company ("Chubb").

3 In 1996, in relatively quick succession, Chubb received two noticeably similar insurance 4 claims, purporting to be signed by Eilat, for each of the East Hampton homes. First, in October 5 1996, Chubb received a claim for repairs after the house on Aborigine Way supposedly sustained 6 heavy storm damage, including destroyed patio furniture (the "Aborigine Way claim"). Chubb 7 eventually settled this claim for about $66,000. Second, in November 1996, Chubb received an 8 insurance claim for water damage from a broken bathroom pipe in the Duke Drive home (the 9 "Duke Drive claim"). Chubb initially paid approximately $22,000 to settle the Duke Drive 10 claim.

11 In March 1997, as part of the Duke Drive claim, Chubb received a receipt for lodging 12 expenses for several nights that Litwok and Eilat purportedly spent at a guesthouse while the 13 Duke Drive house was being repaired. The guesthouse receipt was issued to Litwok and Eilat, 14 signed by Ruth Vered, and faxed by "Janet Lehr Inc." In April 1997, Chubb mailed another 15 check for $2,186.44 for the lodging expenses (the "Lodging Check"). Although the Lodging 16 Check, which is the subject of the mail fraud count, was made payable to Eilat, it was deposited 17 in an account jointly held by Litwok and Adrienne Moore, an unlicensed public adjuster who had 18 assisted with filing the insurance claims and had endorsed the check. There was evidence to 19 suggest that Litwok was aware of the deposit into the joint account. For example, Litwok's 20 former assistant, Elizabeth Kratochvil, testified that Litwok meticulously supervised all the 21 financial transactions from her personal and corporate bank accounts and personally reviewed 22 the bank statements for her joint account with Moore.

1 There was also evidence that both insurance claims were fraudulent. Both claims 2 included inflated estimates of damage from Litwok's home contractor, who testified that he did 3 not prepare these estimates, and declared water damage requiring repair or replacement of 4 hardwood floors that, Chubb later discovered, were largely intact. The Property Loss Notice 5 forms accompanying both claims listed Litwok, not Eilat, as the contact person. Furthermore, in 6 mid-1997 Eilat notified Chubb that Litwok and Moore had forged Eilat's signature on the 7 Property Loss Notice forms for both insurance claims and deposited the settlement checks into 8 their joint account after forging her signature on the back of the checks. Eilat's allegations 9 prompted a United States Postal Inspector to investigate the claims. The Inspector visited the 10 Duke Drive home and encountered Litwok with the allegedly damaged patio furniture from 11 Aborigine Way intact. During the encounter, Litwok told the Inspector, "[D]on't take my 12 furniture back." The Inspector also determined that there was no guesthouse at the address that 13 appeared on the guesthouse receipt and concluded that the receipt was false. 14 As part of his investigation, the Inspector enlisted the help of Janet Lehr, whose name 15 appeared on the fax line of the false receipt, to record a telephone call with Litwok discussing the 16 receipt and the fact that Lehr had been visited by a federal agent. The recorded call was played 17 to the jurors, and a transcript was provided to them. During the call with Lehr, Litwok did not 18 dispute the fraudulent nature of the Duke Drive claim. To the contrary, her statements suggested 19 that she was aware of both the details of the false receipt and its incriminating nature. For 20 example, after Lehr expressed remorse over her involvement in the scheme, Litwok offered to 21 "un-create the problem" for Lehr by blaming Moore.

2. Tax evasion

2 In addition to the evidence of mail fraud, the Government presented the following 3 evidence relating to the tax evasion counts. From 1994 to 1997, Litwok operated a number of 4 private equity companies from her Duke Drive house, including Kohn Investment I LP, which 5 she managed through Kohn Investment Management, Inc. Litwok routinely commingled her 6 corporate and personal funds and used funds she received from her corporate investors to pay for 7 personal expenses and gifts. Although she owed nearly $1.5 million in taxes from 1995 through 8 1997 based on her personal income, Litwok failed to file a single personal tax return for those 9 years.

10 Three of Litwok's former accountants testified at trial. But only one accountant, Peter 11 Testaverde, testified about work related to any of the years relevant to the tax evasion charges, 12 namely, 1995, the year referenced in Count Two of the Indictment. Testaverde explained that 13 Litwok had retained his accounting firm from September 1995 to September 1996 to calculate 14 the losses and income for Kohn Investment I LP and to prepare 1995 K-1 tax forms, which 15 provide investors with information necessary to file their own tax returns, including their portion 16 of the partnership income. Testaverde confronted Litwok after discovering over $2.3 million in 17 excess personal compensation based on a review of various brokerage account statements, 18 among other documents. In response, Litwok attacked the accuracy of the account statements 19 from her company's brokerage firm that Testaverde had relied on to calculate her compensation. 20 She then blocked Testaverde from contacting the brokerage firm to verify the information, as 21 would have been the normal practice. When Testaverde tried to notify her company's partners 22 that he could not prepare their K-1 forms because Litwok had prohibited him from contacting the 1 brokerage firm, Litwok attempted to prevent him from doing so. One of Litwok's two other 2 accountants testified that his firm prepared Litwok's tax returns for 1992 and 1993, prior to the 3 period charged in the Indictment, but she never filed them. One of these accountants, Lawrence 4 Goldstein, also confronted Litwok, to no effect, about what appeared to be $1 million in excess 5 personal compensation, and refused her repeated demands to adjust his accounting for her 1994 6 partnership tax return.

7 In March 2003 Litwok was charged in the Indictment with mail fraud relating to the 8 Duke Drive lodging reimbursement claim and tax evasion for the years 1995 through 1997. The 9 case was tried before a jury in February 2009. At trial, the District Court admitted evidence of 10 Litwok's failure to file taxes prior to 1995 under Federal Rule of Evidence 404(b) and instructed 11 the jury that it could consider that evidence solely to determine Litwok's intent. In May 2010, 12 after the jury convicted Litwok on all counts, the District Court sentenced her principally to two 13 years' imprisonment and ordered her to pay $23,551 in restitution. She began serving her 14 sentence in September 2010. By order dated September 8, 2011, we released Litwok on ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.