The country’s most important civil court is under federal investigation, an insider says.
The probe is focusing on the state Supreme Court’s civil division at
60 Centre St. in lower Manhattan, where many tentacles reach to
disgraced Assembly Speaker Sheldon Silver, the court source said.
Silver was arrested last month on corruption charges, and Manhattan US Attorney Preet Bharara warned the public to “stay tuned” for more developments.
The case against Silver centers on his freelance legal “work” and the
millions of dollars in bribes and kickbacks he hauled in from
real-estate and asbestos claims, the feds say.
Many of these cases landed in the courtrooms at 60 Centre St.,
presided over by judges with ties to Silver and his lifelong pal,
Jonathan Lippman, the chief judge of the state Court of Appeals.
Both men grew up on the Lower East Side, and Silver has been
Lippman’s political godfather, pushing him to reach New York’s top
judicial post.
“The appointment of Sheldon Silver’s childhood friend, Jonathan
Lippman, as the state’s chief judge based on his administrative
experience made about as much sense as the Yankees making their
accountant the manager of the team,” said Charles Compton, former
president of the Supreme Court Officers Association. He added that
Lippman was appointed “to protect and promote Silver’s interests.”
At least three judges at 60 Centre St. are connected to Silver from the Lower East Side.
Judge Martin Shulman is a former president of Silver’s synagogue, and
the two are neighbors in a Grand Street co-op complex. In 1999, the
judge was appointed an acting Supreme Court justice by Lippman, then the
state’s chief administrative judge.
Shulman has been handling tax-reduction claims at the Centre Street
courthouse for at least a dozen years and now presides over most of
these cases. Many of these cases were filed by the Goldberg & Iryami
law firm.
Silver stands accused of raking in $700,000 in secret kickbacks from
Goldberg & Iryami. Firm principal Jay Arthur Goldberg had worked for
Silver in the Assembly as his counsel.
The indictment accuses Silver of steering billionaire developer
Leonard Litwin, the state’s largest political donor, to the firm, along
with another unnamed developer. In exchange, Silver reaped referral
fees.
The Goldberg firm handled tax appeals for 15 buildings owned by
Litwin’s organization, Glenwood Management, and its limited liability
companies, prosecutors said.
Court records show that in one case that landed in Shulman’s court —
involving a high-rise building on York Avenue — Glenwood won a $3.4
million reduction in the building’s assessment, which is used to
determine its taxes.
It was settled before trial, and Shulman signed off on the agreement in 2010.
David Bookstaver, a court system spokesman, denied there were conflicts of interest in Shulman’s court.
“The issue of conflict really doesn’t exist as most of these cases in
the tax part settle and the ones that go to trial are jury trials.
Furthermore, Judge Shulman has no knowledge whatsoever of any
compensation to Mr. Silver,” Bookstaver said.
But the apparent ties do not end in Shulman’s courtroom.
Litwin owns a rental building, The Fairmont — the same high-rise
where Lippman and his wife rented a one-bedroom apartment between 2007
and 2010, The Post found. And Lippman’s son, Russell, a Harvard-educated
lawyer, rented an apartment there between 2003 and 2005, public records
show.
Lippman, who earned $156,000 in 2010, moved into the rent-stabilized
building in 2007 shortly after he was appointed presiding justice of the
Appellate Division in Manhattan and was required to live in The Bronx
or Manhattan. He had lived in Westchester.
Bookstaver said Lippman paid market-rate rent of $3,195 for the
apartment. He said Lippman rented at the Fairmont because he needed to
move quickly and knew of the building because his son had lived there.
He said Lippman did not know Litwin owned the property.
“He has no idea who this guy is,” Bookstaver told The Post.
Silver’s influence was also apparent in another part of the iconic
civil courthouse on Foley Square, where the grand entrance has been used
as a backdrop for movies including “The Godfather” and “12 Angry Men”
and countless episodes of “Law & Order.”
Weitz & Luxenberg, the law firm where Silver was “of counsel”
until he was dumped last week, practically rules a special section of
the court dealing with complex asbestos litigation.
Critics say the firm gets the “red-carpet treatment” including a fast
track, “better judges” and first dibs on jurors to hear its cases.
Sherry Klein Heitler, the chief asbestos judge, as well as the top
administrative judge at 60 Centre St., has handled dozens of the firm’s
cases in what is called New York City Asbestos Litigation or NYCAL.
Last year, at Weitz & Luxenberg’s request, Heitler reversed a
20-year rule barring punitive damages in asbestos cases, paving the way
for much bigger jury awards.
Another judge, Joan Madden, consolidated unrelated asbestos cases,
which resulted in huge increases in jury verdicts — from an average of
$7 million to $24 million per plaintiff between 2010 and 2014, data
collected by Bates White Economic Consulting show. In one consolidated
case, Silver’s firm won a $190 million award.
Of 15 mesothelioma verdicts in the last four years, Silver’s firm won $273.5 million of $313.5 million awarded by NYCAL juries.
The average award for an NYCAL asbestos case — nearly $16 million per
plaintiff between 2010 and 2014 — is reportedly two to three times
larger than those in other courts nationwide.
The American Tort Reform Association last year called the asbestos
court the nation’s top “judicial hellhole” where plaintiffs’ lawyers are
“brazenly favored by the judges.” Silver has been blocking tort-reform
bills for decades in Albany.
It’s unclear whether any individual judge is being targeted by the
investigation. The US Attorney’s Office said it could neither confirm
nor deny any probe. An FBI spokesman would not comment.
“We are not aware of any federal investigation,” Bookstaver said.
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