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Friday, April 10, 2020

Two trials, same result: Sheldon Silver guilty of using public office to make millions from asbestos lawsuits

By John O'Brien | May 12, 2018

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NEW YORK (Legal Newsline) – For a second time, a jury has convicted former New York State Assembly Speaker Sheldon Silver of corruption for using his status as a lawmaker and asbestos attorney to rake in millions of dollars.

On May 11, Silver, a Democrat who was granted a retrial of his 2015 conviction after a U.S. Supreme Court decision, again received bad news from a federal jury in Manhattan. The first time, he was sentenced to 12 years in prison. He was convicted of all seven charges in this latest trial, and an appeal is planned, according to the New York Times.

Prosecutors charged Silver with a scheme in which a mesothelioma doctor referred possible asbestos lawsuit plaintiffs to him in exchange for $500,000 in state grants. Silver passed on the clients to the powerful New York asbestos firm Weitz & Luxenberg, which paid him more than $3 million in referral fees and has denied knowledge of Silver’s arrangement with the doctor.

“The jurors that decided Sheldon Silver's fate have done their fellow New Yorkers a great public service in bringing the former Assembly Speaker to justice,” said Tom Stebbins executive director of New York Lawsuit Reform Alliance.

“Silver used his elected-office and his law license to enrich himself and his friends at personal injury law firms.”

LRANY and other civil justice reform groups were long critical of Silver, calling him a roadblock to meaningful reform in the state’s courts. Its most notorious is the special asbestos docket – New York City Asbestos Litigation (NYCAL).

Weitz & Luxenberg files the most cases in NYCAL, which recently reintroduced the possibility of hitting defendants with punitive damages. Defendants are likely to appeal again after first losing in an intermediate appellate court.

Silver’s trial lasted half as long this time around. During opening arguments, Assistant U.S. Attorney Damian Williams told jurors that Silver received $60,000 from Weitz & Luxenberg for each name of potential asbestos plaintiffs.

The Weitz firm “didn’t hire Sheldon Silver because he was a talented lawyer, or because they expected him to do any legal work at all,” Williams told the jury.

“He used his law license as a cover to accept bribes.”

Prosecutors say Weitz & Luxenberg hired Silver for $120,000 a year despite his having no clients and no prior experience representing asbestos plaintiffs, because as Speaker he controlled the flow of legislation through the statehouse as well as key committee assignments. The law firm, in a statement to Legal Newsline, said its payments to Silver “were compensation for business he referred in his ‘of counsel’ role at the firm,” and therefore not illegal.

In the 2015 indictment that led to Silver’s conviction, and which was being used in the retrial, the government called the referral fees “illegal payments.”

Silver wasn’t satisfied with his salary, prosecutors said, and began referring mesothelioma patients he learned about from Dr. Robert Taub, who ran a cancer clinic affiliated with Columbia University.

Shortly after cashing his first referral fee of $130,000 in 2005, Silver arranged for Taub’s clinic to receive a $250,000 grant from a state healthcare fund Silver controlled. He issued another $250,000 grant the following year, prosecutors say, then halted them after the state legislature required all such grants to be disclosed to the public.

To convince the jury Silver had the guilty state of mind necessary for a criminal conviction, Williams told jurors Silver never publicized his grants to a cancer clinic even though many of his constituents in downtown New York were worried about coming down with cancer from inhaling asbestos-laced dust from the collapse of the World Trade Towers.

Silver also was accused of depriving taxpayers of “honest services,” a crime the Supreme Court held is restricted to cases of bribery and kickbacks in a 2010 decision involving former Enron Chairman Jeffrey Skilling.

Prosecutors needed to prove that the payments to Silver fall within that definition, therefore, as well as prove that he performed specific official acts in exchange for the illegal payments. That is to comply with the Supreme Court’s 2016 decision overturning the conviction of former Virginia governor Robert McDonnell.

In that decision, the court said the illegal behavior must go beyond arranging meetings or even urging lawmakers to pass legislation.

Silver, now 74 years old, served as Speaker for more than 20 years until his legal troubles began. His first year in the State Assembly was 1977, nine years after he earned his law degree from Brooklyn Law School.

But he was “blinded by greed,” prosecutors said.

“Sheldon Silver, the former New York State Assembly Speaker, took an oath to act in the best interests of the people of New York State. As a unanimous jury found, he sold his public office for private greed,” said Geoffrey Berman, U.S. Attorney for the Southern District of New York.

“One of the most worthy endeavors of this office is combatting public corruption.”

Silver also was convicted of accepting $700,000 in fees from a real estate law firm after he steered business the firm’s way from two developers who benefited from his activities at the statehouse.

Sentencing is July 13.

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Organizations in this Story

Columbia UniversityWeitz and LuxenbergNew York State AssemblyU.S. Attorney for the Southern District of New YorkU.S. District Court for the Southern District of New YorkBrooklyn Law SchoolNew York City Asbestos Litigation