United States v. Sanford Pollack

Citations: 91 F.3d 331; 1996 U.S. App. LEXIS 18763; 1996 WL 426850Docket: 2068

Court: Court of Appeals for the Second Circuit; July 31, 1996; Federal Appellate Court

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Sanford Pollack appeals his conviction for conspiracy to embezzle union funds following a guilty plea, challenging the district court's conclusion that the government did not breach a cooperation agreement. This agreement stipulated that the government would submit a letter motion for a downward sentencing departure based on Pollack's cooperation. The court found that the government acted in good faith by not submitting the motion and upheld the district court's sentencing decisions. The case involved Pollack, an attorney for the International Union of Allied Novelty and Production Workers, who engaged in a scheme to obtain kickbacks from a contractor hired for renovations. After his arrest in 1993, Pollack cooperated with the government, leading to a formal cooperation agreement. Additionally, Pollack's home was destroyed by arson in 1992, which he initially attributed to a labor union, but investigations suggested involvement by his son. The appellate court affirmed the lower court’s ruling.

Pollack's insurer initiated a lawsuit in Florida state court, seeking a declaration of non-coverage based on allegations that Pollack was involved in an arson incident. The insurer's complaint claimed that Pollack, either directly or through a third party, caused the fire in violation of the insurance policy. Pollack denied any involvement in his response. In December 1993, when questioned about the arson by a special agent investigating a separate embezzlement case, Pollack stated it was merely a civil issue. His defense counsel informed the prosecutor in New York about the Florida civil case, providing copies of the pleadings in January 1994.

In April 1994, Detective Saling was deposed in the Florida action, identifying Pollack as a suspect based on evidence found in his garage and noting an ongoing federal investigation into the arson. Despite the prosecutor receiving information about Pollack's involvement in January 1994, she claimed to have first learned he was a suspect in July 1994 from a confidential informant, who alleged Pollack had arranged for someone to commit the arson.

On August 4, 1994, the prosecutor questioned Pollack about the arson, during which his attorney confirmed the existence of the investigation and shared details from the depositions. Pollack continued to assert his innocence. However, the prosecutor later concluded that Pollack was involved in the arson. On August 24, 1994, she informed Pollack that he would soon be indicted and offered a plea deal in exchange for his admission of guilt, which he rejected. Subsequently, the government indicated it would not support a cooperation agreement at sentencing, citing Pollack’s dishonesty regarding his involvement and failure to disclose his criminal investigation.

Pollack sought specific performance of his cooperation agreement after the government indicated it would not file a 5K1.1 letter on his behalf. The District Court held hearings on this motion, ultimately denying it based on the conclusion that the government acted in good faith. Pollack was sentenced to 12 months' imprisonment, with a three-point enhancement of his base offense level under U.S.S.G. 3B1.1(b) for being a "manager or supervisor" in the criminal activity. The court also refused to grant a downward departure based on Pollack's family circumstances. Pollack's appeal addresses the denial of his motion for specific performance and the sentencing enhancements.

The cooperation agreement stipulates that the government’s assessment of Pollack’s truthfulness and cooperation is binding. Plea agreements are treated as contracts, allowing prosecutors discretion in evaluating a defendant's performance, provided this discretion is exercised in good faith and not based on bad faith or unconstitutional grounds. The agreement requires Pollack to provide truthful and complete information, with the possibility that failure to do so could exempt the government from its obligation to file a 5K1.1 motion.

The government provided two reasons for its refusal to file a 5K1.1 letter as required by the cooperation agreement with Pollack. First, it claimed Pollack misled them by failing to disclose an ongoing arson investigation, which it argued was mandated by the agreement. Second, it asserted that Pollack lied about his involvement in the arson when confronted in August 1994, maintaining his innocence despite the government's belief in his guilt. Pollack countered that the government had constructive notice of his involvement through civil case pleadings provided by his counsel and argued that the cooperation agreement did not obligate him to voluntarily disclose unrelated criminal involvement. He accused the government of acting in bad faith by benefiting from his cooperation while using the arson investigation as a pretext to avoid its obligations under the agreement. 

The district court ultimately found that the government’s refusal to submit the 5K1.1 letter was not in bad faith, primarily based on its belief that Pollack lied about the arson. The court noted that the government's concerns were supported by a confidential informant’s information and corroborating evidence, which indicated Pollack's involvement in the arson. The court concluded that while the government was not required to seek out every detail from Pollack, he was also not obligated to disclose all potentially relevant information. The agreement did not impose an open-ended duty to volunteer information, and since the government had a reasonable belief that Pollack materially breached the agreement by lying, it was justified in withholding the 5K1.1 letter. The district court's decision was affirmed, confirming that the government acted in good faith.

Pollack argues the district court made two errors in sentencing: (1) enhancing his base offense level by three points under U.S.S.G. 3B1.1(b) for being a "manager or supervisor" in the criminal activity, and (2) not granting a downward departure based on his family circumstances under U.S.S.G. 5H1.6, p.s. The court reviews the "manager or supervisor" determination de novo, focusing on legal interpretations of the Sentencing Guidelines. The record shows Pollack acted as a manager by hiring Careccia and directing Baldo in the criminal scheme, fulfilling the criteria for enhancement. The court affirmed that Pollack exercised control over others involved and played a significant role in decision-making. Regarding the refusal to downwardly depart, such decisions are not typically appealable unless the district court mistakenly believed it lacked authority. The sentencing transcript confirms the court recognized its authority to depart based on family circumstances but chose not to in its discretion. Consequently, the district court's judgment is affirmed.