The People, Respondent,v.Akiva Daniel Abraham, Appellant.BriefN.Y.Oct 15, 2013To Be Argued By: Time Requested: CHRISTOPHER D. HORN Ten (10) minutes Court of Appeals STATE OF NEW YORK _______________ THE PEOPLE OF THE STATE OF NEW YORK, Respondent, - against - AKIVA DANIEL ABRAHAM Defendant-Appellant. _______________ ________________________________________________________________________ RESPONDENT’S BRIEF ________________________________________________________________________ P. DAVID SOARES ALBANY COUNTY DISTRICT ATTORNEY ATTORNEY FOR RESPONDENT ALBANYCOUNTY JUDICIAL CENTER 6 LODGE STREET ALBANY, NEW YORK12207 TEL. (518) 487-5460 CHRISTOPHER D. HORN DATE COMPLETED: Of Counsel MARCH 28, 2013 ________________________________________________________________________ i TABLE OF CONTENTS Page TABLE OF AUTHORITIES ..................................................................................... iii PRELIMINARY STATEMENT ................................................................................ 1 STATEMENT OF FACTS ......................................................................................... 2 Defendant’s Acquisition of Title to the Saratoga Winners Property ............... 2 Insurance ........................................................................................................... 3 Saratoga Winners Arson ................................................................................... 4 Origin of the Fire .............................................................................................. 4 Canine Search ................................................................................................... 5 Forensic Testing ................................................................................................ 6 Cause of the Fire ............................................................................................... 7 Search of Defendant’s Vehicle ......................................................................... 8 Financial Difficulties ........................................................................................ 9 Arson Supplies .................................................................................................. 9 Interviews of the Defendant ............................................................................ 10 Verdict and Sentencing .................................................................................... 13 Direct Appeal ................................................................................................... 13 ARGUMENT ............................................................................................................. 15 I. DEFENDANT’S CONVICTION FOR INSURANCE FRAUD IN THE SECOND DEGREE WAS SUPPORTED BY LEGALLY SUFFICIENT EVIDENCE ....................................................................................................... 15 Standard of Review.......................................................................................... 15 This Case.......................................................................................................... 15 II. THE TRIAL COURT PROPERLY SUBMITTED THE INSURANCE FRAUD CHARGE TO THE JURY AND PROPERLY DECLINED TO AMEND THE VERDICT SHEET AS DEFENDANT REQUESTED ............. 24 III. PROSECUTORIAL MISCONDUCT DID NOT DEPRIVE DEFENDANT OF A FAIR TRIAL ......................................................................................... 27 ii A. Bogus/Fraud Argument ............................................................................. 27 B. Making False Statements Argument .......................................................... 31 1. The Parel Road, LLC, Mortgage .......................................................... 31 a. The Trial Prosecutor ....................................................................... 31 b. The Appellate Prosecutor ............................................................... 32 2. Defendant’s Call to his Insurance Agent .............................................. 33 a. The Trial Prosecutor ....................................................................... 33 b. The Appellate Prosecutor ............................................................... 34 3. The Tiki Torches .................................................................................. 35 a. The Trial Prosecutor ....................................................................... 35 b. The Appellate Prosecutor ............................................................... 38 C. Legal Standard ........................................................................................... 39 CONCLUSION ......................................................................................................... 42 iii TABLE OF AUTHORITIES Page(s) Cases People v Abraham, 94 AD3d 1332 [3d Dept 2012] ................... 1, 14, 22, 27, 28, 32 People v Aksoy, 84 NY2d 912, 914 [1994] ..............................................................18 People v Alfaro, 108 AD2d 517, 520 [2d Dept 1985] .............................................25 People v Amar, 134 AD2d 601 [2d Dept 1987] ......................................................26 People v Ashwal, 39 NY2d 105, 109 [1976] ...........................................................40 People v Benham, 160 NY 402 [1899] ....................................................................40 People v Bleakley, 69 NY2d 490, 495 [1987] .........................................................23 People v Boothe, 16 NY3d 195, 196 [2011] ............................................................17 People v Cabey, 85 NY2d 417, 420 [1995] .............................................................22 People v Chase, 299 AD2d 597, 599 lv denied 99 NY2d 613 [3d Dept 2002] 18, 19 People v Danielson, 9 NY3d 342, 349 [2007] .........................................................16 People v De Vito, 21 AD3d 696, 700 [3d Dept 2005] .............................................39 People v Demming, 116 AD2d 886, 887 [3d Dept 1986] ........................................39 People v Khan, 18 NY3d 535, 541 [2012] ..............................................................16 People v Michael, 210 AD2d 874 [4th Dept 1994] .................................................25 People v Mull, 167 NY 247, 254 [1901] ..................................................................40 People v Pagan, 87 AD3d 1181, 1183 [3d Dept 2011] ...........................................25 People v Priori, 164 NY 459 [1900] .......................................................................40 People v Roberts, 63 AD3d 1294, 1296 [3d Dept 2009] .........................................23 People v Scanlon, 52 AD3d 1038 [3d Dept 2008] ..................................................23 People v Tarantola, 178 AD2d 768, 770 [3d Dept 1991] .......................................39 People v Trimm, 252 AD2d 673 [3d Dept 1998] .....................................................16 People v Williams, 84 NY2d 925, 926 [1994] .................................................. 16, 40 People v Wong, 81 NY2d 600, 608 [1993] ..............................................................16 Williams v Brooklyn El. R. R. Co., 126 NY 96, 102 [1891] ....................................40 Statutes Criminal Procedure Law §470.05 ............................................................... 28, 34, 35 NY Rules of Professional Conduct (Rule 3.3[a][1]) .................................. 29, 30, 32 Penal Law § 176.05[1] ...................................................................................... 17, 18 Penal Law § 176.25 ............................................................................. 1, 2, 17, 23, 25 Section 120.25 of the Penal Law ............................................................................... 2 Section 150.10 of the Penal Law ............................................................................... 2 1 PRELIMINARY STATEMENT By permission of the Honorable Judge Eugene F. Pigott, Jr., Associate Judge of the New York Court of Appeals, granted October 12, 2012, Akiva Daniel Abraham appeals from an Order of the Appellate Division, Third Department, entered April 26, 2012, which unanimously affirmed a judgment of the Supreme Court of the State of New York, Albany County (Lamont, J.), rendered October 15, 2010, convicting him of Insurance Fraud in the Second Degree (Penal Law § 176.25), upon a jury verdict, and sentencing him to an indeterminate prison term of four (4) to twelve (12) years in prison (People v Abraham, 94 AD3d 1332 [3d Dept 2012]). Defendant is currently incarcerated pursuant to this judgment of conviction. 2 STATEMENT OF FACTS In May of 2009, an Albany County Grand Jury handed up a three- count indictment charging defendant, Akiva Daniel Abraham, with one count of Arson in the Third Degree, in violation of Section 150.10 of the Penal Law of the State of New York, a Class C Felony; one count of Insurance Fraud in the Second Degree, in violation of Section 176.25 of the Penal Law of the State of New York, a Class C Felony; and one count of Reckless Endangerment in the First Degree, in violation of Section 120.25 of the Penal Law of the State of New York, a Class D Felony (A 6-8). These charges stem from an incident wherein defendant committed a fraudulent insurance act when he filed a property loss notice and participated in an interview with an insurance adjustor to obtain insurance proceeds when he knew the property was destroyed by arson (A 7). Defendant’s Acquisition of Title to the Saratoga Winners Property On April 16, 2009, for consideration of One Dollar, Nickole and Stephan Sutliff granted defendant’s limited liability company, 1 st Call, LLC, a Warranty Deed for the property located at 1375 and 1391 Loudon Road in Colonie, New York (A 13-14). This property was the site of a closed nightclub known as Saratoga Winners. On that same date, Parel Road, LLC, took a mortgage securing a loan of $475,000 to 1 st Call, LLC (A 9-12). At 3 the time of the purported loan, Parel Road, LLC, had approximately $25.00 in its coffers (A 58; People’s Exhibit #88). No money ever exchanged hands. Insurance Evette Belardo, an insurance agent at Shank & Falvey, was contacted by defendant regarding possible insurance for property he planned to purchase located at 1375 Loudon Road (RA 17). Belardo asked questions about the property and submitted an application to Lovullo, a company who accepts risks that standard carriers will not cover, to obtain a quote (RA 17, 20). Lovullo drafted a proposed insurance policy for a year and the total charge was $5,948.27 (RA 21). After receiving the quote, defendant purchased the insurance for the property, paying $1,800.00 as a down payment (RA 18). The property was insured for the amount of the mortgage that defendant indicated to Belardo and its effective date was April 20, 2009 (A 133-134, RA 22). A mere 10 days later, on April 30th, Belardo spoke to defendant who informed her that his building had burned, that he couldn’t remember if he had locked the building when he left and immediately asked if his being unsure that he locked the door to the building could void his insurance policy (A 133-135; RA 22a-22b). 4 Saratoga Winners Arson On April 30, 2009, at approximately 3:15 AM, Joshua Weeks was driving home from work when he noticed that Saratoga Winners was on fire (RA 5, A 119). Weeks turned his vehicle around, parked in front of the building and called the police (A 119). Approximately five minutes later, the fire department arrived (A 119). When the firefighters arrived, they attempted to put out the fire, but were unable to enter the building because it would have been unsafe to do so (RA 6). The fire was rapidly consuming the building and the building was emitting intense heat (RA 8). After fighting the fire for 20 minutes, the building collapsed (RA 7). Origin of the Fire Once the fire was extinguished, Investigator Joseph Bisognano and others sifted through the rubble to determine the point of origin of the fire (RA 9-10). During the search for the origin of the fire, Bisognano observed an area in the floor that had been totally consumed by the fire (RA 11-12). Based on this observation and the fact that most of the heavy damage to the building was in the southeast area, Investigator Bisognano determined that the fire originated in the southeast corner of the building (RA 13). Canine Search 5 To aid in the investigation, Investigator William McGovern and his dog, Braith, were assigned to the case (RA 23-24, 26). Braith, a chocolate Labrador retriever, is trained to identify certain scents (RA 24). McGovern and Braith attended an eight week training course and participated in a certification process where they had to indicate whether or not various hides contained ignitable liquid or a burned specimen of an ignitable liquid (RA 24-25). McGovern and Braith received a perfect score in both the initial certification process and subsequent annual recertifications (RA 25). Upon arriving at the scene, McGovern was briefed on the steps the investigation had taken and conducted a safety sweep of the area (RA 26- 27). Following the sweep of the area, McGovern initially determined that they would only conduct a search of the perimeter of the building because he could not verify the integrity of the floor of the interior of the structure (RA 27). During the search of the perimeter, Braith stuck his nose into the ground and then sat, indicating that he discovered ignitable liquid vapor residue (RA 28-30). McGovern marked the spot by placing a flag over that area (RA 28). Subsequently, Braith reacted differently when he approached a wood log, indicating the presence of ignitable liquid vapor residue, but he failed to place his nose on any specific item (RA 31). 6 The search continued and Braith provided a positive indication for ignitable liquid at the corner of a box spring mattress (RA 31). At some point, the search briefly entered the interior of the dilapidated building in the southeast corner and Braith gave a positive indication for ignitable liquid among some debris on the floor (RA 32). Near the main entrance of the building, Braith indicated the presence of ignitable vapors (RA 33). Following the search of the exterior, Braith was removed from the scene, while McGovern collected samples from the areas Braith had indicated contained ignitable liquid (RA 34). After the floor of the building was deemed structurally sound enough, McGovern conducted a second canine search with Braith (RA 35). In the southeast part of the building, Braith provided a positive indication for ignitable liquid in two locations, denoted K-5 and K-6 (RA 35-37). McGovern collected samples from those locations (RA 36). Forensic Testing Dr. Frank Padula, a forensic scientist with the trace evidence section of the New York State Police forensic investigations center, analyzed various items in connection with the arson investigation (RA 48-49). Dr. Padula explained the process by which he analyzes evidence (RA 50). First, he performs a “waft test” where he opens the container to see if he can smell 7 anything (RA 50-52). Next, Dr. Padula places a piece of coconut charcoal inside the container, which absorbs gases and liquids (RA 50). After 24 hours, he removes the piece of charcoal and uses a solvent to remove any gases or liquid that the charcoal has absorbed, keeping it in liquid form (RA 51). Then, Dr. Padula placed the remaining liquid into glass vials (RA 51). Finally, he used a glass chromatogram to separate the components in the liquid and a mass spectrometer to identify those components (RA 51-52). Samples taken from the scene at locations K-5 and K-6 tested positive for medium petroleum distillate, which was consistent with lamp oil, described as “Klean Heat” or “Tiki” torch fuel (RA 52-55, 57-59). The medium petroleum distillate was so abundant in the sample that it overwhelmed the instrument used in the lab (RA 60-61). Cause of the Fire In determining the cause of a fire, investigators look to rule out any possible causes (RA 14). The possible causes of a fire include chemical, electrical, mechanical, natural or intentional (RA 15-16). In the opinion of Investigator Bisognano, the fire that burned down the Saratoga Winnings building was not chemically, electrically, mechanically or naturally caused (A 99). 8 A mechanical cause stems from a malfunctioning appliance or device, which causes a fire to start; a mechanical cause was ruled out in this case because the heat was not working and the furnace room was located far away from the fire’s origin (RA 15). An electrical cause stems from an electrical short or malfunction, which causes a fire to start; an electrical cause was ruled out in this case because there was no electrical supply to the building (RA 15). A chemical cause stems from any sort of chemicals that could start a fire; a chemical cause was ruled out in this case because there were no chemicals or containers within the area of origin (RA 16). A natural cause is a naturally occurring event, such as lightning, that may cause a fire to start; a natural cause was ruled out because of the absence of a storm that night (RA 16). Search of Defendant’s Vehicle On May 17, 2009, the Colonie police department asked McGovern to perform a canine search on defendant’s vehicle (RA 37). Using Braith, McGovern performed the search and Braith provided a positive indication for ignitable liquid on a floor mat on the right hand side of the vehicle (RA 38). This floor mat later tested positive for a medium petroleum distillate, similar to charcoal lighter fluid (RA 59). Financial Difficulties 9 Amber Gibson, the sole employee of defendant’s company, 1 st Call, LLC, explained that several of her paychecks did not clear (A 146, RA 39). After the fire, defendant told Gibson that the fire “could be big for us” (A 147-148, RA 40). Arson Supplies On April 27, 2009, at approximately 7:39 PM, defendant purchased two nine pack Duraflame log sets and four gallons of Tiki torch fuel from a Home Depot in Clifton Park with cash (RA 41-44). On May 15, 2009, police conducted a search of defendant’s residence in an attempt to locate Duraflame logs, Tiki torch fuel, receipts for the purchase of such items and papers regarding any insurance and/or property transactions (A 153-154). As Investigator Sbuttoni walked around the property, he observed Duraflame log boxes in a wide open shed (A 155). Sbuttoni did not see a Tiki torch deployed anywhere on defendant’s property (RA 45). Police discovered two empty Duraflame boxes and four empty Tiki torch fuel containers (A 157, 159-160; RA 46-47). Interviews of the Defendant The defendant was interviewed by members of the Colonie Police Department on two occasions. The first Interview was on April 30, 2009 and the second interview was on May 15, 2009. Both interviews were 10 recorded on video and played for the jury (People’s Exhibits #44 and #45; A 167, 169). In the first interview, the defendant is very clear that he is the owner of the Saratoga Winners property and initially claims he paid $875,000 for it. He then rattles off an incomprehensible string of numbers and jargon to explain how that is the case. While it is not possible to concisely describe the defendant’s ever evolving explanation of the negotiations and transactions in either of the two interviews, the interviews contain a number of noteworthy claims and admissions by the defendant. He states very early on that the insurance he purchased was for the amount of the mortgage ($475,000) taken out by 1 st Call, LLC and held by Parel Road, LLC. He explains to the police that Parel Road, LLC, is just an outside investor that finances his deals. He further explains that he had to get insurance on the property in order to obtain a mortgage through Parel Road (People’s Exhibit #44). The defendant goes on to say that he bought the property from the bank, rather than from Nickole and Stephan Sutliff, who were in foreclosure on the property. As a result of his purchase of the property from the bank, he claims, the bank released the lien on the Sutliff’s property. The defendant further stated he had no idea how the fire could have started, but is not sure 11 whether he locked the door on his way out of the building the night before the fire (People’s Exhibit #44). The second interview of the defendant, on May 15, 2009, is very different from the first. His version of events continued to evolve in often unfathomable ways, not subject to easy explanation here. Again, however, the defendant makes many significant claims and admissions during the course of the interview. The defendant again attempted, through impenetrable jargon and numbers, to explain how it is that the purchase price for the Saratoga Winners property was $875,000. The defendant stated that he was attempting to make a short sale of the property that would benefit both him and the Sutliffs whose bank, Bayview, had filed a lis pendens and was seeking to foreclose on the property. The defendant acknowledged that he had gotten into doing short sales when his financial situation had hit “rock bottom”. He described lengthy and contentious negotiations he said he had with Bayview where he was attempting to satisfy a mortgage of approximately $365,000 for $50,000, $80,000 and $110,000. Eventually, he says, they agreed to transfer the mortgage to him for $310,000. Once he acquired the mortgage from Bayview, he intended to foreclose on the 12 property himself and clear the title which the Sutliffs had already signed over to him for $1.00 (A 13-14; People’s Exhibit #45). The defendant is very clear for much of the second interview that the property is his because the Sutliffs signed the deed over to 1 st Call, the defendant’s limited liability company. He explains how he obtained a loan of $475,000 from Parel Road, LLC, a self-directed 401K investor out of the Bronx, and even talks about how he has a payment coming up on the mortgage held by Parel Road. The defendant never mentions that Parel Road is his father’s self-directed 401K that the defendant personally controls with his father (A 57). During the interview, the defendant’s body language and attitude changed abruptly once the police explain that an arson dog had detected accelerants at the property and that the lab had determined that there was a high presence of some kind of lamp or torch fuel at various locations in the building and when they asked him about George Abraham’s connection to Parel Road (People’s Exhibit #45). The defendant admitted that George Abraham is his father, but immediately changed his description of the mortgage to just a line of credit. When asked specifically where the money from the executed mortgage note was, he hemmed and hawed and all he could say was that there are things that have to be worked out. At the time of the execution of the mortgage 13 note, Parel Road, LLC, had approximately $25.00 in its checking account (A 58, People’s Exhibit #88). Whereas previously the defendant had been confident he was the owner of the property, at this point in the interview he became unsure whether he had any rights with regard to the property and indicated he might not even take the money if the insurance company were to pay the claim. At the end of the interview, the defendant still admits that he told the police he was the owner and had title to the property. He also admits that he told the insurance company that he was the owner of the property and that the reason the insurance policy was for $475,000 was because he told them he had a loan for that amount (People’s Exhibit #45). Verdict and Sentencing Defendant was convicted of insurance fraud in the second degree, but acquitted of arson in the third degree and reckless endangerment in the second degree (A 189-90). Defendant was sentenced to an indeterminate sentence of 4 to 12 years imprisonment (A 228). Direct Appeal On direct appeal, the defendant contended that the proof of Insurance Fraud in the Second Degree was legally insufficient; that the prosecution constructively amended the indictment by referring to the mortgage as “fraudulent” or “bogus” constituting a material change in the theory of the 14 case; that the verdict was repugnant; and that the prosecutor’s references to facts not in evidence and the trial court’s failure to correct such statements deprived the defendant of a fair trial. On April 26, 2012, the Appellate Division, Third Department held that the proof of Insurance Fraud in the Second Degree was legally sufficient; the verdict was not repugnant because there is a possible theory under which a split verdict could be legally permissible; that the People did not introduce a new theory of liability on the insurance fraud count during summation; and that the prosecutor was free to refer to the evidence regarding the mortgage and the inferences to be drawn therefrom, and references to the mortgage as “bogus” or “a fraud” in his opening statement and summation did not constitute misconduct (People v Abraham, 94 AD3d 1332 [3d Dept 2012]; A 3-4). By permission of the Honorable Judge Eugene F. Pigott, Jr., Associate Judge of the New York Court of Appeals, granted October 12, 2012, Akiva Daniel Abraham appeals from the Order of the Appellate Division, Third Department, which affirmed his conviction (A1a). 15 POINT I DEFENDANT’S CONVICTION FOR INSURANCE FRAUD IN THE SECOND DEGREE WAS SUPPORTED BY LEGALLY SUFFICIENT EVIDENCE Defendant contends that the Appellate Division, Third Department, erred in holding that his conviction of insurance fraud in the second degree was supported by legally sufficient evidence. Specifically, defendant contends that there was insufficient proof of the commission of a fraudulent act in that no evidence was introduced which demonstrated knowledge, intent to defraud, or concealment. The People disagree. Viewed most favorably to the People, there was ample evidence that defendant had knowledge of the cause of the fire and concealed this on his insurance claim, and thereby attempted to wrongfully take and obtain property with a value in excess of fifty thousand dollars. Standard of Review. At the outset, it must be noted that defendant repeatedly misstates the standard that this Court must apply in evaluating whether the proof adduced at trial was legally sufficient (Appellant’s Brief, pp. 15-16, 20-22). Defendant asserts that the “moral certainty” standard applies on appeal and makes numerous conclusory statements that the circumstantial evidence 16 could not have excluded beyond a reasonable doubt every reasonable hypothesis of innocence (Appellant’s Brief, pp. 15-16, 20-22). While the moral certainty standard must be charged to the jury in a wholly circumstantial case, this standard does not pertain to appellate review (People v Williams, 84 NY2d 925, 926 [1994]). It is well settled that in reviewing legal sufficiency of the evidence, direct or circumstantial, this Court’s inquiry is “whether any valid line of reasoning and permissible inferences could lead a rational person to the conclusion reached by the fact finder on the basis of the evidence at trial, viewed in the light most favorable to the People” (People v Williams, supra, at 926; see People v Danielson, 9 NY3d 342, 349 [2007]; People v Wong, 81 NY2d 600, 608 [1993]; People v Trimm, 252 AD2d 673 [3d Dept 1998]). A sufficiency inquiry requires a court “to marshal the competent facts most favorable to the People and determine whether, as a matter of law, a jury could logically conclude that the People sustained their burden of proof” (see Danielson, 9 NY3d at 349). Furthermore, defendant’s analysis repeatedly violates the axiom that in a legal sufficiency inquiry, the evidence must be viewed in the light most favorable to the prosecution (People v Khan, 18 NY3d 535, 541 [2012]). Instead, the defendant offers up interpretations of the evidence in a light most favorable to the defendant. For example, leading up to the arson, the 17 defendant was having financial difficulties and told one of his employees that the fire “could be big for us” (RA 39-40). In a light most favorable to the People, that evidence reveals that the defendant was fully aware that he stood to gain financially from the fire and suggests that he had a profit motive. The defendant, however, both inappropriately applies the “moral certainty” standard to this evidence and suggests that this statement merely “illustrated optimism after a loss, and was not evidence of motive” (Appellant’s Brief at p. 20). While this is an acceptable attempt at spinning this inculpatory evidence in a trial context, it does not properly view the evidence in the light most favorable to the People in an appellate context. Finally, the defendant repeatedly mischaracterizes both the evidence and the arguments advanced at trial. The People will address these missteps in the course of discussing the facts of the case. This Case A person is guilty of insurance fraud in the second degree “when he commits a fraudulent insurance act and thereby wrongfully takes, obtains or withholds, or attempts to wrongfully take, obtain or withhold property with a value in excess of fifty thousand dollars” (see Penal Law § 176.25; People v Boothe, 16 NY3d 195, 196 [2011]). As defined in Penal Law § 176.05[1], a person commits a “fraudulent insurance act” when he: 18 knowingly and with intent to defraud presents . . . any written statement as part of, or in support of, an application for the issuance of, or the rating of a commercial insurance policy, . . . or a claim for payment or other benefit pursuant to an insurance policy . . for commercial or personal insurance which he knows to: (a) contain materially false information concerning any fact material thereto or (b) conceal, for the purpose of misleading, information concerning any fact material thereto” (see Penal Law § 176.05[1]; Boothe, 16 NY3d at 196). A written statement “may consist of one materially false or misleading document or multiple documents collectively submitted to the insurer to advance a single fraudulent claim” (see People v Aksoy, 84 NY2d 912, 914 [1994]). Simply, a “fraudulent insurance act” can include material omissions from an insurance claim. For example, in People v Chase, the defendant’s insurance agent submitted a written claim for reimbursement for a fire loss at the request of the defendant (see People v Chase, 299 AD2d 597, 599 lv denied 99 NY2d 613 [3d Dept 2002]). The Third Department held that the defendant committed a fraudulent insurance act because he misled his agent, and ultimately the insurance company, into believing that the fire was accidental when in fact its origins were incendiary (see Chase, 299 AD2d at 599). Here, the People satisfied the requirements of Penal Law Section 176.05 by offering evidence that defendant knowingly submitted a false 19 statement to his insurers and concealed the origin of the fire. Defendant called to report a claim because his building burned to the ground and engaged in multiple conversations with an insurance adjuster and law enforcement in an attempt to obtain payment for his fire loss that certainly would not have been made by Omega Insurance if he had disclosed that the fire was not accidental (A 23-25; RA 22a-22b). The record clearly established that defendant concealed that the fire was deliberately set in an attempt to obtain the insurance proceeds (A 23-25). Thus, the jury could rationally conclude that defendant concealed material facts for the purpose of defrauding his insurer in excess of fifty thousand dollars (see Chase, 299 AD2d at 599). While the jury was not convinced, beyond a reasonable doubt, that defendant himself committed the crime of arson by physically setting the fire, the jury was convinced that defendant knew the fire had been intentionally set and attempted to obtain the insurance proceeds by concealing this material fact. Notably, the jury was not instructed on accessorial liability and the People’s theory of the case was that defendant set fire to the building himself, without the assistance of any other individual. The jury, however, rejected the theory that defendant personally set the fire. Instead, the jury found that, as set forth in count two of the 20 indictment, that defendant knew the building was burned down as a result of arson. 1 While the proof adduced at trial to show that defendant personally set the fire did not convince the jury beyond a reasonable doubt, it was certainly sufficient to establish that he was involved in and had knowledge of the arson and that he concealed it in an attempt to collect insurance proceeds. The record is replete with evidence indicating that defendant – while falling short of committing the arson himself – was involved in the arson, thereby knowing of the arson. Defendant claimed to have purchased the property with a $475,000 mortgage through Parel Road, LLC, his father’s 401K account; no money is ever transferred nor does his father’s account contain anywhere close to this amount of funds. Leading up to the arson, defendant was facing financial difficulties and told one of his employees that the fire “could be big for us” (RA 39-40). Ten days before the arson, defendant purchased an insurance policy in the amount of $475,000. Three days before the arson, defendant purchased Tiki torch fuel and Duraflame logs even though he did not have a torch displayed on his property (RA 41- 45). The day before the arson, defendant called his insurance agent to let her 1 Count two alleged, in pertinent part, “the defendant did commit a fraudulent insurance act, consisting of filing or causing to be filed a “Property Loss Notice” and participating in an interview with insurance adjustor Michael Cariello, for the purpose of obtaining insurance proceeds in excess of $350,000.00 on the property known as Saratoga Winners when he knew said property was destroyed by arson and admitted reporting same and if known by the insurance company would not result in payment of said monies” (A 7 [emphasis added]). 21 know he had received his policy in the mail and ask her to clarify some details with regard to his policy (RA 18-19). The fire is set at approximately 3:15 AM and the building collapses within the hour (A 119, RA 5, 7-8). Laboratory analysis of the debris recovered from the scene revealed that the ignitable liquid was consistent with the Tiki brand torch fuel (RA 52-55). In his interviews with the police, defendant gave evasive and ever evolving answers. Pursuant to a search warrant executed at defendant’s home, police recovered two empty Duraflame boxes and four empty Tiki torch fuel containers (A 157, 159-160; RA 46-47). Finally, it is clear that defendant had a motive to want an arson committed. Defendant created a $475,000 mortgage through his father’s 401K (A 9-12) and had obtained title to the property from the Sutliffs for a dollar (A 13-14). Using the purported value of the mortgage, defendant purchased insurance on the building for the amount of the loan. If defendant had recovered the insurance proceeds, he would have owned the property that he told the police was worth $975,000 for the amount of money he paid to insure the building: $1,800. However, obtaining title for less than two thousand dollars was not the only financial benefit the arson provided. The arson destroyed the building, which would have cost between $40,000 and $50,000 to remove (RA 44a). 22 In the jury’s view, defendant’s undeniable financial motive, his purchase of Tiki torch fuel and Duralogs shortly before the fire, expert testimony that an ignitable liquid consistent with Tiki torch fuel was found at the origin of the fire, his suspicious and evolving answers to police questioning and evidence that no one else had access to the premises compelled the conclusion that defendant knew his building had been destroyed by arson. Contrary to defendant’s claim, defendant did conceal this fact from an insurance adjuster. Defendant denied having “any idea of how the fire started” and failed to inform the adjuster that the fire was intentionally set when he was asked if there was anything else he “would like to add that would be important about the facts of the incident” (A 25). Moreover, despite knowing that the building was destroyed by arson, which would void any insurance claim, defendant initiated the claims process (RA 22a-22b). Accordingly, the Third Department did not err in concluding that the jury could have rationally concluded from all the evidence that defendant committed insurance fraud by concealing the cause of the fire (People v Abraham, 94 AD3d 1332, 1333 [3d Dept 2012]) . Viewing the evidence in the light most favorable to the People (see People v Cabey, 85 NY2d 417, 420 [1995]; People v Roberts, 63 AD3d 23 1294, 1296 [3d Dept 2009]) and giving the People the benefit of every favorable inference (see People v Bleakley, 69 NY2d 490, 495 [1987]; People v Scanlon, 52 AD3d 1038 [3d Dept 2008]) the People met their burden of proving every element of the crime of insurance fraud in the second degree (see Penal Law § 176.25). 24 POINT II THE TRIAL COURT PROPERLY SUBMITTED THE INSURANCE FRAUD CHARGE TO THE JURY AND PROPERLY DECLINED TO AMEND THE VERDICT SHEET AS DEFENDANT REQUESTED Having abandoned his unsuccessful argument that the verdict was repugnant, defendant now raises an issue which he did not present to the Third Department. Defendant claims that the trial court erred when it denied his request that the jury verdict sheet be altered so as to instruct the jury to stop deliberating if it found the defendant not guilty of arson. Specifically, defendant claims that based on the plain language of the charges in the indictment, the jury could not find the defendant guilty of insurance fraud if it did not find him guilty of arson. To be sure, the plain language of the indictment is clear. In the first count, defendant was alleged to have committed arson in the third degree (A 6). The second count of the indictment alleged that defendant knew Saratoga Winners was destroyed by arson (A 7). The difference between the counts is plain: one alleged that defendant personally set fire to his building, the other alleged that defendant knew his building was destroyed by arson and nonetheless attempted to obtain insurance proceeds. With respect to arson in the third degree, the jury was charged that a “person is guilty of arson in the third degree when that person intentionally 25 damages a building by starting a fire” and “a person intentionally damages a building by starting a fire when that person’s conscious objective or purpose is to cause such damage to a building by means of starting a fire” (A 201). Conversely, with respect to insurance fraud in the second degree, the jury was charged that a person is guilty of insurance fraud in the second degree when that person commits a fraudulent insurance act and “did so knowingly and with intent to defraud” (A 205). Thus, though defendant was acquitted of intentionally damaging a building by starting a fire, that in no way vitiates his commission of a fraudulent insurance act with the intent to defraud. The “essence of insurance fraud is the filing of a false written statement as part of a claim for insurance” (see People v Alfaro, 108 AD2d 517, 520 [2d Dept 1985]). Indeed, “insurance fraud required a finding that defendant intentionally concealed the cause of the fire on [his] insurance claim, and the jury was not further obliged to find that she intended to damage the apartment building by setting the fire (see People v Pagan, 87 AD3d 1181, 1183 [3d Dept 2011]). Contrary to defendant’s claim, the fact that the jury found him not guilty of arson “did not mean that [he] could not be convicted of insurance fraud” (see People v Michael, 210 AD2d 874 [4th Dept 1994]; Pagan, 87 AD3d at 1183; People v Amar, 134 AD2d 601 [2d 26 Dept 1987]). Therefore, there was no valid reason or authority for altering the jury sheet as defendant had requested. Defendant further contends that the trial court had the authority and discretion under CPL §300.40 to instruct the jury to stop deliberations if the jury acquitted defendant of the arson count. Defendant utterly fails to point to any language in that statute which would in any way support this bare assertion. Similarly, defendant is unable to cite to any case law which would support this claim. The remainder of defendant’s arguments on this subject is essentially a repetition of his argument that the proof of insurance fraud in the second degree was legally insufficient from Point I of his brief. For the reasons discussed above, the People submit this argument lacks merit. In denying defendant’s request to alter the verdict sheet as not authorized under the Criminal Procedure Law, the court noted that it was required to “submit to the jury each and every count, or the highest lesser included offense thereof that is supported by legally sufficient evidence” (A 212). Since the court found that the charge was supported by legally sufficient evidence, the count was duly submitted to the jury without any unauthorized modifications to the verdict sheet. This was, in all respects, proper. 27 POINT III PROSECUTORIAL MISCONDUCT DID NOT DEPRIVE DEFENDANT OF A FAIR TRIAL Defendant contends that the Third Department erred when it held that the defendant was not denied a fair trial and that “the prosecutor was free to refer to the evidence regarding the mortgage and ‘the inferences to be drawn therefrom,’ and his references to the mortgage as ‘bogus’ or ‘a fraud’ in his opening statement and summation did not constitute misconduct” (People v Abraham, 94 AD3d 1332, 1334 [3d Dept 2012]). The defendant also raises new objections to what he considers examples of the prosecution arguing outside “the four corners of the evidence” and alleges that the prosecution made false statements to the trial court, the Appellate Division, and this Court (Defendant’s Brief at 35). As previously explained, the facts surrounding defendant’s sham mortgage were in evidence and the People were free to comment on same and suggest inferences to the jury. A. Bogus/Fraud Argument The Third Department’s affirmed findings of fact are that the evidence showed that defendant acquired the property shortly before the fire and had taken out a large insurance policy on it, the value of which was based upon a $475,000 mortgage granted to a separate limited liability company, Parel 28 Road, LLC, which was controlled by defendant and his father. That company had not actually provided any funds to purchase the parcel, however, and had roughly $25 in its checking account at the time (People v Abraham, 94 AD3d at 1333). During the course of the prosecutor’s summation, which lasted at least an hour and a half (RA 62), defense counsel lodged a total of 6 objections (A 182, 185, 189, 191, 198, 199). Only one of these objections was to the prosecutor’s characterization of the mortgage as being bogus and a fraud (A 182). This was an unexplained one word objection, which the court overruled, finding the comment to be proper argument. The defendant did not seek to elaborate upon his objection at the conclusion of summations. Nevertheless, defendant devotes approximately twelve pages of his brief to the subject. The People submit that this single, unexplained objection is generally insufficient even to properly preserve the issue for appellate review (CPL §470.05). In any event, all such references to the mortgage constituted fair comment on the evidence and merely suggested a reasonable inference which the prosecutor was requesting the jury to make. The crux of defendant’s argument appears to be that if he disagrees with the inferences the prosecutor is asking the jury to make from the 29 evidence, then the prosecutor is “making false statements” and violating NY Rules of Professional Conduct (Rule 3.3[a][1]) (Defendant’s Brief at p. 37). This, of course, is an absurd position. The defendant, on the other hand, at page 38 of his brief, claims that because the prosecutor waited to argue that the mortgage was a fraud until closing argument, “no opportunity existed for Trial Counsel to rehabilitate the Appellant by proving the Trial Prosecutor’s statements were baseless and completely false”. Then, on page 40 of his brief, defendant contradicts himself by acknowledging that, in truth, the prosecutor had asserted during his opening statement that the mortgage was “bogus” and a “fiction” (A 116-117). Notably, these allegations by the prosecutor during his opening statement were not objected to (A 116-117). Shortly thereafter, at page 44 of his brief, the defendant reverts back to falsely stating that because the prosecution “did not argue the fraudulent mortgage theory until the closing argument, Trial Counsel had no reason to believe he would have to address the validity of the mortgage.” This is an assertion belied by defendant’s own brief. Finally, defendant’s disingenuous claim that defense counsel “had no reason to believe he would have to address the validity of the mortgage” 30 (Defendant’s Brief at 44) until this theory appeared in the prosecution’s closing argument is belied by the transcript of the first trial which ended with a hung jury. In the first trial, the trial prosecutor delivered a similar summation, describing the mortgage as a “farce” and a “myth” and saying “You’ve got 475,000 fake dollars burning a hole in your fake pocket” (RA 1-4). It is clear that defense counsel read the minutes of the first trial because he has included exhibits and excerpts from the transcripts of that trial in his appendix to his brief (A 62, 104-112). Notably, defense counsel has, at times, improperly utilized such excerpts from the mistrial to, among other things; attempt to buttress his claim that the proof was not legally sufficient at this trial (Defendant’s Brief at 18-19; A 110-11). Defendant’s assertions are demonstrably false and violate the NY Rules of Professional Conduct (Rule 3.3[a][1]) which he frivolously asserts the prosecution violated. In any event, at trial, evidence was presented that defendant created a mortgage from Parel Road, LLC, his father’s 401K which he controlled along with his father. The balance in Parel Road’s NBT checking account was approximately $25.00 at the time of the execution of the mortgage note and no transfer of $475,000 was ever made between Parel Road and the defendant’s other limited liability company, 1 st Call, LLC. Evidence of the 31 lack of a substantial balance in the Parel Road account was presented to the jury and the trial prosecutor correctly argued, in line with the theory of the case, that defendant created a fraudulent mortgage of $475,000 so he could use the value of the mortgage to help him purchase insurance on the property in that amount. B. Making False Statements Argument Presumably without intended irony, defendant next asserts that his Due Process rights were violated when the trial and appellate prosecutors made false statements to the trial court, the Appellate Division, and this Court. 1. The Parel Road, LLC, Mortgage a. The Trial Prosecutor Defendant contends that the prosecutor made a false statement when he argued that the defendant used the mortgage to obtain $475,000 in insurance coverage for Saratoga Winners. Notably, the Third Department made affirmed findings of fact on this subject: The record reveals that defendant acquired the property shortly before the fire and had taken out a large insurance policy on it, the value of which was based upon a $475,000 mortgage granted to a separate limited liability company, Parel Road, LLC, which was controlled by defendant and his 32 father (People v Abraham, 94 AD3d 1332, 1333 [3d Dept 2012]). The Third Department which reviewed the same evidence the People did in this case, reached a similar conclusion. Under defendant’s theory, the Third Department panel that affirmed these findings of fact is also in violation of NY Rules of Professional Conduct (Rule 3.3[a][1]). The position is absurd. The People did not contend that the defendant did not have an insurable interest in the property or that he could not have gotten any insurance on the property without the mortgage. The evidence shows that the defendant used the value of the mortgage to obtain an insurance policy in the amount of $475,000 (A 133-134, RA 22; People’s Exhibit #45). The profit motive for the defendant was in the difference between what he paid for the property and the down payment on the insurance (less than $2,000) and the amount of money the insurance company would give him when the building burned. The ploy with the unfunded mortgage was intended to convince an insurance company to give him $475,000 in coverage on the theory that he has $475,000 of his own money at risk. This is the theory of the case. The rather unsurprising fact that a defendant disagrees with our theory of the case does not make said theory a “false statement”. b. The Appellate Prosecutor 33 Apparently, defense counsel believes that prosecutors are required to accept his legal arguments as gospel. This is assuredly not true. Here, defendant contends that appellate counsel made false statements by defending the People’s theory of the case on appeal. Defendant’s contentions are entirely lacking in merit for the same reasons discussed above. 2. Defendant’s Call to his Insurance Agent a. Trial Prosecutor The day before the fire, the defendant called his insurance agent to ask some questions about his policy. Defendant asserts that the “record indicates that Appellant called his insurance agent simply to clarify the terms of his policy” (Defendant’s Brief at 55). Whereas, on summation, the prosecutor said : He calls the insurance company. The day before the fire. He calls them up. Just checking. Still got that insurance. Right? That’s what he does on the 29 th . * * * On the 29 th he called the insurance company and he checks on his policy. He wanted to see how much money he would get in the case of recovery (A 192). The People submit that there isn’t any difference between calling to “clarify the terms of his policy,” as defendant prefers to describe it, and the way the trial prosecutor described it on summation. The prosecution’s 34 argument was that he was making sure that everything was set with his insurance and, we submit, he was interested in what coinsurance was because that might affect the amount he would be paid when the building burned. Notably, once again, there was no objection to this statement by the prosecutor at the trial and, accordingly, it is unpreserved for appellate review (CPL §470.05). In any event, the prosecutor’s statements during summation constituted fair comment on the evidence and merely suggested a reasonable inference which the prosecutor was requesting the jury to make. The Appellate prosecutor Again, defendant asserts that the appellate prosecutor made false statements and committed misconduct for having the audacity to disagree with him on a legal argument and defend the People’s theory of the case. The argument presented demonstrates a basic lack of understanding of what an “inference” is. The People are permitted to suggest reasonable inferences from the facts and we are not limited to defense counsel’s interpretation of the facts. The inferences to be drawn from the fact that the defendant had specific questions about his insurance policy the day before the arson are plain. If the defendant believes that other inferences are more reasonable or plausible, he is free to advance them but that does not have the effect of 35 making the statements made by the People in their closing arguments “false”. 3. The Tiki Torches a. The Trial Prosecutor Defendant, again, alleges that the trial prosecutor committed misconduct by making false and misleading statements during his closing argument. Again, there was no objection to this statement by the prosecutor at the trial and, accordingly, the issue is unpreserved for appellate review (CPL §470.05). In any event, the prosecutor’s statements during summation constituted fair comment on the evidence and merely suggested a reasonable inference which the prosecutor was requesting the jury to make. Defendant’s argument on this subject is even more disingenuous than his prior arguments. During closing arguments, the prosecutor opined: Defendant buys tiki torch fuel and duraflame logs on april 27 th . Three days before the fire. Now that can’t be denied. Right? That is absolutely a fundamental truth. What is another interesting thing about that truth? It’s interesting that you buy four gallons of tiki torch fuel when you don’t have a single torch anywhere working on your property. Out on the property. You will see photos of the property. They are not out. You will see the gasoline. You will see them stacked up in the gazebo with no torch, little containers in them not ready to use. Just sitting in a messy gazebo. So that’s interesting that you have four gallons of tiki torch fuel. It is interesting that you buy two boxes. 36 Not the little guys that I used to start fires with. Those little guys you put underneath logs. These are the full blown, full-sized duraflame logs. Nine per box. Excuse me. Nine per box. Five pound fire logs. Two boxes. What is especially interesting about that is that you can conclude that all of the tiki torch fuel and all of the logs were used at the same time. Otherwise why would the empty bottles and the caps and the little tops be inside the boxes in the shed? They were all used at the same time. Well gee. What could you possibly be doing with $73.00 worth of flammable materials using it all at the same time. By the way, you bought it three days before a fire. Here we go to the next point. Saratoga Winners burns to the ground on April 30 th . No question about that [emphasis added] (A 179-180). There is not a single arguable misrepresentation of any fact anywhere in that excerpt which defendant belatedly objects to. The Tiki torches were not out or displayed on the property, which is what the prosecutor said. The Tiki torches were stacked in a messy gazebo, as the prosecutor said, and the torches did not have the containers that hold the fuel and the wick sitting in the baskets of the torches – as can be seen by simply looking at the photos at (A 60) of defendant’s appendix. Defendant asserts at pages 58-59 of his brief that the prosecutor’s statement: about the Tiki torches not being out or being used were misleading to the jury. The fire occurred the weekend before Memorial Day, a holiday when Appellant and many other pool owners first open 37 their pool for the season. As Appellant’s pool was not yet open at the time of the fire (A 156), there would be no reason for him to have his Tiki torches “deployed” (Defendant’s Brief at pp. 58- 59). There are so many things wrong with this argument. First, how can a demonstrably true statement that the Tiki torches were not out or being used be in any way misleading? Second, in 2009, Memorial Day fell on May 25. The fire occurred on April 30, which is not the weekend before Memorial Day. Finally, defendant’s argument wholly misses the point. Defendant is arguing that he may at some point in the future have had a use for four gallons of Tiki torch fuel and two boxes of duraflame logs. The prosecutor’s point was that the defendant bought all of these flammable materials three days before the fire and they were all used up by the time the defendant’s residence was searched (which was still before Memorial Day). That the Tiki torches were not out on the property and “deployed” or even ready to be used is relevant precisely because it shows that the defendant had not used all of those materials in a typical non-arson related fashion in the few days since he bought them at Home Depot. With regard to what defendant contends were Tiki torches at the Saratoga Winners property, the photo he is referring to was not admitted into evidence because defense counsel could not lay a proper foundation for the 38 photo. Contrary to defendant’s assertion, Inv. Bisognano did not testify that Defendant’s Exhibit N “fairly and accurately depict[ed]” the Saratoga Winners property on April 30, 2009. Appellate counsel is quoting a question asked by trial counsel (A 126) of Inv. Bisognano, who did not say that he agreed with the question asked. Furthermore, Inv. Bisognano explained that he did not remember seeing any Tiki torches at the scene the day he was there, but in any event, the area where defense counsel was claiming they were located was in a pile of weathered debris, as opposed to being part of the area that had burned (A 129). b. The Appellate Prosecutor Defendant further contends that the appellate prosecutor made false statements and committed misconduct for largely the same reasons he made similar accusations against the trial prosecutor. The argument is similarly poorly reasoned. Defense counsel asserts that “[w]hether the Tiki torches were ‘deployed’ (A 156) or ‘displayed’ (A 77, A98) or not, is a distinction without a difference” (Defendant’s Brief at 63). It’s a rather important distinction that makes a huge difference when one attorney is calling another attorney a liar in a brief to the Court of Appeals – particularly when the statement is an undeniably true statement. The flippant and inaccurate fashion in which defense counsel has made these baseless allegations is 39 deserving of an appropriate rebuke from this Court. This sort of behavior has contributed to an overall loss of civility and dignity in the practice of law and it should not be tolerated. Defense counsel then purports to recite the contents of an untranscribed telephone conference amongst himself, the appellate prosecutor, and Judge Pigott, in which he contends the appellate prosecutor continued to commit misconduct (Defendant’s Brief at 63). The inappropriateness of this recitation is self-evident. C. Legal Standard To determine whether a reversal is warranted on the grounds of prosecutorial misconduct, a court must assess “the severity and frequency of the conduct, whether the trial court took appropriate action to dilute the effect of the conduct and whether, from a review of the evidence, it can be said that the result would have been the same absent such conduct” (see People v Tarantola, 178 AD2d 768, 770 [3d Dept 1991]; People v De Vito, 21 AD3d 696, 700 [3d Dept 2005]). To grant a new trial on the grounds of prosecutorial misconduct, a “flagrant and pervasive pattern of prosecutorial misconduct must be demonstrated” (see People v Demming, 116 AD2d 886, 887 [3d Dept 1986]). 40 Counsel is permitted “to comment upon every pertinent matter of fact bearing upon the questions the jury have to decide” during summation (see Williams v Brooklyn El. R. R. Co., 126 NY 96, 102 [1891]; People v Mull, 167 NY 247, 254 [1901]; People v Benham, 160 NY 402 [1899]; People v Priori, 164 NY 459 [1900]). But during summation, counsel “must stay within ‘the four corners of the evidence’” (see People v Ashwal, 39 NY2d 105, 109 [1976] quoting Williams, 126 NY at 103). Thus, counsel must “avoid irrelevant comments which have no bearing on any legitimate issue in the case . . . refer to matters not in evidence . . . or call upon the jury to draw conclusions which are not fairly inferable from the evidence” (see Ashwal, 39 NY2d at 109-10). In short, counsel “should not seek to lead the jury away from the issues by drawing irrelevant and inflammatory conclusions which have a decided tendency to prejudice the jury against the defendant” nor should counsel “try to convey to the jury, by insinuation, suggestion or speculation, the impression that the defendant is guilty of other crimes not in issue at the trial” (see Ashwal, 39 NY2d at 110). The defense argues that the cumulative and pervasive misconduct by all of the prosecutors in this case denied defendant a fair trial and a fair appeal. The People disagree for the reasons stated above. However, even 41 assuming any error, it cannot be said that the instances of misconduct, either individually or cumulatively, were so egregious as to deprive defendant of a fair trial or a fair appeal. 42 CONCLUSION THE JUDGMENT OF CONVICTION SHOULD, IN ALL RESPECTS, BE AFFIRMED. RESPECTFULLY SUBMITTED, P. DAVID SOARES ALBANY COUNTY DISTRICT ATTORNEY ATTORNEY FOR RESPONDENT ALBANY COUNTY JUDICIAL CENTER 6 LODGE STREET ALBANY, NEW YORK 12207 TEL. (518) 487-5460 Dated: March 28, 2013 By:__________________________ CHRISTOPHER D. HORN Of Counsel
