Sholam Weiss

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Sholam Weiss
Sholam weiss from FBI wanted poster.JPG
Picture from FBI wanted poster
Born (1954-04-01) April 1, 1954 (age 61)
Brooklyn, New York, United States
Nationality American
Known for Insurance fraud
Criminal charge 78 counts of racketeering, wire fraud and money laundering
Criminal penalty 845 years imprisonment
Criminal status Fci otisville ; scheduled date of release: November 23, 2754

Sholam Weiss (also spelled Shalom Weiss; born April 1, 1954) is an American former businessman and convicted felon. In 2000, he was convicted of multiple fraud and money laundering counts and sentenced to 845 years in prison for looting the National Heritage Life Insurance Company of over $450 million.[1] It was believed to be the largest insurance failure in history at the time.[2] Weiss fled the country at the end of his trial and was a fugitive for one year. He was subsequently extradited from Austria.

The sentence imposed on Weiss is believed to be the longest known to have ever been imposed for a white-collar crime.[2] It is also believed to be the longest criminal sentence ever imposed at the federal level in American history.[3] Weiss was convicted of 78 counts including racketeering, wire fraud, and money laundering and ordered to pay $125 million in restitution and $123 million in penalties. About a dozen individuals were convicted for involvement in the collapse; another defendant, Keith Pound, received a 750-year sentence, and $139 million in restitution. Pound died in prison in 2004 at age 51. Federal cooperators Michael Blutrich and Lyle Pfeffer received reduced sentences of 200 months [4] and served their terms in the Federal Witness Security Program.

Weiss was captured in Austria and extradited pursuant to an international arrest warrant. He was not permitted to appeal his extradition or conviction in accordance with the longstanding precedent that fugitives have flouted the court's authority and thus forfeit their right to appeal.[5]

Early life and background[edit]

Weiss grew up in Borough Park, Brooklyn, where his father ran a fruit stand. He was educated in a yeshiva, where he spoke Yiddish, and received the equivalent of a high school education. He was born and raised Jewish. He did not learn English until he was in his late teens. He began doing construction work as a young man and established a plumbing supply company.[3]

The plumbing supply firm failed and declared bankruptcy. Weiss began hiring himself out as a bankruptcy specialist, advising other businesses. Through that business he met Michael D. Blutrich, who owned the topless club Scores, which then was controlled by the Gambino Crime Family.[3]

In 1994, Weiss was indicted on mail fraud charges. He was convicted and served eight months in prison.[3]

National Heritage Life Insurance[edit]

Weiss' looting of the National Heritage Life Insurance Co. was the largest in history caused by criminal misconduct, according to the FBI, with the loss exceeding $450 million.[2][3]

Federal authorities said the fraud began in the early 1990s, when a group of businessmen wrote a check for the company and lent themselves the money to cover the purchase price. Weiss took control in 1993, and with several confederates bought up worthless stocks and mortgages. The money vanished or ended up in accounts controlled by Weiss.[3] National Heritage collapsed only a year after Weiss took it over. In 1997, Weiss and four other defendants were indicted on 93 counts of racketeering, money laundering and wire fraud.[6]

On October 18, 1999, after a nine-month trial, Weiss failed to appear while the jury was deliberating,[1] and was declared a fugitive. At Weiss's sentencing on the National Heritage charges in February, Judge Patricia C. Fawsett said that Weiss should be removed permanently from society because of the "magnitude and repeated" nature of his fraudulent acts, as well as his "disrespect for the law." She was also swayed by federal prosecutors' claims that Weiss induced people who would have otherwise never defrauded anyone into taking part in the scheme. Under federal sentencing guidelines, none of the charges against Weiss carried the possibility of a life term. Instead, she imposed a string of sentences of five and 20 years for each count, and ran them together consecutively in order to ensure that he would die in prison.[3][7] He was eventually apprehended by Austrian authorities in the Fall of 2000.

Weiss was extradited from Austria after appeals to the European Court of Human Rights and the United Nations failed to prevent his extradition.[8][9]

Incarceration and subsequent proceedings[edit]

Weiss challenged his incarceration in a habeas corpus petition in federal court, claiming that the United States violated its extradition treaty with Austria. Because the courts cannot provide a re-sentencing and appeal, Weiss argued that, under treaty law, the Executive branch of the United States must still provide the benefit of a re-sentencing and appeal and that he was denied that benefit as a result of the fugitive disentitlement doctrine.[8] Weiss is currently serving his 845-year sentence at the Federal Correctional Institution, Otisville, New York, a medium security prison. He has a current projected "release date" of November 23, 2754, meaning that he will spend the rest of his life in custody.[10]

References[edit]

  1. ^ a b Whitney, Sally (September 2000). "Anatomy of a Failure" (PDF). Best's Review. Retrieved 2007-05-12. 
  2. ^ a b c "Testimony of Dennis Lormel, Section Chief, Financial Crimes, Before the House Financial Services Committee, March 6, 2001". FBI. 2001-03-06. Retrieved 2009-07-02. [dead link]
  3. ^ a b c d e f g Rashbaum, William K. (9 March 2000). "845 Years in Prison, If the Authorities Can Catch Him; F.B.I. Says Fugitive Has a Flair For Fraud and Hiding Stolen Cash". The New York Times. Retrieved 6 July 2009. 
  4. ^ United States District Court, MDFL, Case No. 97-71-CR-ORL-22
  5. ^ Report on the situation of fundamental rights in Austria 2003, EU Network of Independent Experts on Fundamental Rights, January 2004, [accessed 8 July 2009]
  6. ^ Leusner, Jim. Charges: 5 Bilked Orlando Insurer. Orlando Sentinel, 1997-07-25.
  7. ^ Clary, Susan. Insurance Crooks To Serve Life - Plus. Orlando Sentinel, 2000-02-16.
  8. ^ a b United Nations High Commission on Human Rights (2003-05-15). "Communication No 1086/2002 : Austria. CCPR/C/77/D/1086/2002. (Jurisprudence)". Retrieved 2007-05-12. 
  9. ^ Parliamentary Assembly (2003-04-01). "Extradition of Sholam Weiss". Council of Europe. Retrieved 2007-05-12. 
  10. ^ "U.S. Bureau of Prisons Inmate Locator". Retrieved 2009-07-02. 

External links[edit]