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CAESAR’S WIFE

The Romans recognized the problem: “Qui custodiet ipsos custodes?” Roughly translated, “Who will guard the guards?”

Just as Julius Caesar expected his wife Pompeia to be above suspicion of disloyalty and infidelity, we expect our judges to be above suspicion of bias. But, as the Supreme Court has observed, “Bias is easy to attribute to others and difficult to discern in oneself.” Rare is the federal defendant who hasn’t felt like his or her judge is biased.

At least weekly, someone asks me how they can get his or her case assigned to a different judge because “my judge is biased against me.” The plain truth is that winning reassignment of a case to a different judge because of bias “is a serious request rarely made and rarely granted,” as the 2nd Circuit put it last week.

Everyone knows how hard correctional officers work and how important it is to ensure they have a carefree retirement. For BOP employees, the federal government guarantees a generous and secure sunset for its employees. But state and local COs have to depend on retirement promises made by governments that, unlike Uncle Sam, can’t print money to cover any shortfalls.

The New York City Correctional Officers Benevolent Association collected money from its members to invest in a pension plan. COBA’s executives got bribed into investing $20 million in Platinum Partners, a shaky pension plan that went bankrupt primarily because the pension managers pillaged it for their own benefit.

One of the bit players, defendant Jona Rechnitz, cooperated with the government. In fact, the government said, Jona was “one of the single most important and prolific white collar cooperating witnesses in the recent history of the Southern District of New York.” The government told the court that while Jona knew about the bribes, he “did not appear to know that Platinum was a fraud, or even that it was a bad investment.”

But District Court Alvin Hellerstein ordered changes in Jona’s Presentence Investigation Report, including that he had “had to know” both that Platinum was a “high-risk fund” and that the Fund was “willing to pay a bribe to obtain funds to satisfy a liquidity shortage, thus making it reasonably foreseeable that an investment of pension funds risked the loss of those funds.”

At sentencing, Judge H bumped Jona’s restitution from a proposed $1.2 million to $10 million and sentenced him to 5 months. Before judgment was entered, COBA intervened, asking that restitution be increased to $14.25 million.

While the appeal and COBA’s motion were pending, Jona learned from witnesses who had spoken to Andrew Kaplan – another defendant in the ongoing Platinum prosecutions – that Andy considered Judge Hellerstein to be “like a father” to him, and the judge had even advised Andy as to whether he should accept the government’s plea offer regarding his Platinum-related criminal conduct. The Judge and Andy had also talked about the significant monetary losses associated with the charges against Kaplan, and Kaplan’s feelings towards other Platinum executives.

While COBA’s motion for additional restitution was still pending, Jona asked the Judge to recuse himself to “avoid the appearance of any impropriety and in an abundance of caution.” Jona’s primary concern was that the size of his restitution turned largely on the credibility of his claim that he had believed “in the soundness of Platinum Partners as an investment vehicle,” and that the Judge might have obtained extrajudicial information regarding the case from Andy Kaplan, which Jona would not have had the opportunity to challenge.

The Judge turned him down, holding that his relationship with Andy Kaplan and the case pending against Andy were unrelated to the restitution issue involving Jona, in part because “there is no suggestion that [Jona] had any relationship with [Andy].” The Judge denied that he had any extra-record information regarding Jona or Platinum.

While Jona’s appeal was pending, the government told Jona’s lawyer that Judge Hellerstein had phoned the Assistant U.S. Attorney working on the case to ask how much Jona had paid in restitution and to complain that Jona was “sly, cannot be trusted, and use[d] religion as a cloak.” The Judge asked the AUSA “not to speak to [Jona’s] counsel about this…”

Jona argued to the 2nd Circuit that Judge Hellerstein should have recused himself under 28 USC § 455. Last week, the 2nd Circuit agreed.

Under § 455(a), a judge should disqualify himself or herself in any proceeding in which the judge’s “impartiality might reasonably be questioned,” while § 455(b) requires a judge to recuse or herself in any case where the judge has “a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding,” or where the judge or spouse or someone within the 3rd degree of relationship to either has an interest that could be substantially affected by the proceeding or may be a witness.

The Circuit concluded that Judge Hellerstein had crossed the line.

First and foremost, the district judge had a close, near-paternal personal relationship with Kaplan… a person who was directly involved in Jona’s bribery case… The government correctly points out that Kaplan was not one of the most central figures in Jona’s bribe scheme. But Jona’s testimony implicated Kaplan in concealing the Platinum investment from other COBA employees – a circumstance that placed Kaplan squarely in the middle of yet another incidence of wrongdoing at a firm where, through his guilty plea, he had already admitted to participating in a different criminal conspiracy…

The district judge did not merely have a close personal relationship with Kaplan; he advised Kaplan on his criminal case arising out of the Platinum collapse… The district judge’s advisory role is further problematic in light of the restitution question because Kaplan’s and Jona’s interests are plausibly adverse on that issue. COBA, of course, can recover its losses only once, even though two groups – those involved in the bribery scheme and those involved in the fraud – arguably caused them… Because Kaplan is a defendant in the Platinum case, it is possible that he will be ordered to pay restitution… [T]he more COBA recovers from the bribery defendants, the less it will need to recover from the Platinum defendants.

The Circuit concluded that “the judge’s close relationship with Kaplan, his advisory role in Kaplan’s criminal case, and the proximity of the cases (including with respect to restitution) would cause a reasonable person to question the district judge’s impartiality and was sufficient to necessitate recusal under 455(a).”

But the Circuit wasn’t done: “The district judge’s phone call with the prosecutor here was doubly ill-advised because it was both ex parte and off-the-record,” the panel held, “magnifying the concerns inherent to both types of communications. After all, but for the commendable transparency of the United States Attorney’s Office, Jona would not have learned of this phone call… [T]here is no obvious justification for conducting this particular inquiry ex parte and off-the-record. A public docket entry requiring an update from the parties would have been equally effective to monitor Jona’s restitution payments… And to the extent that the district judge felt the need to emphasize his views on Jona’s allegedly negative qualities, such statements should be reserved for open, on-the-record forums, if shared at all.”

Jona’s case was assigned to a different judge for resentencing.

United States v. Rechnitz, Case No 20-1011-cr, 2023 U.S. App. LEXIS 19054 (2d Cir. July 26, 2023)

– Thomas L. Root