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Handler Indicted For Day Care Fraud Pled Guilty US Wants 63 Month Sentence but When

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, June 24 – Isidore Handler, Martin Handler, Menachem Lieberman, Harold Schwartz and Ben Werczberger were indicted and then presented on January 11 before U.S. District Court for the Southern District of New York Magistrate Judge Robert W. Lehrburger.

Inner City Press was there, the only media in the Mag Court. There was an argument about the defendants phones being searched, see below.

  The charges include wire fraud, theft of government funds, aggravated identity theft and money laundering.

On August 31, a change of plea (to guilty) hearing was docketed: "ORDER as to Isidore Handler: The Court has been informed that Defendant Isidore Handler may wish to enter a change of plea."

He did, and on February 16, 2024 Isidore Handler asked for a non-custodial sentence.

On March 7, it emerged that the lead defendant is to plead guilty: "ORDER as to (23-Cr-00004-1) Martin Handler. The Court has been informed that Defendant Martin Handler may wish to enter a change of plea. Accordingly, on Tuesday, March 12, 2024 at 10:15 a.m., a plea proceeding will take place... (Signed by Judge Jennifer H. Rearden on 3/7/2023)."

This was pushed back to March 15 at 10:30 am. Inner City Press went, see

Ok - now at guilty plea of Martin Handler. 

AUSA: He needs to be arraigned on the S-2 indictment first.

The plea deal is to tax evasion. 

Handler: ... On counts 5 and 7, from for profit day care NY Early Learning Co., I misapplied more than $5000...On the superseding information, I claimed charitable deductions for funds that weren't given until later. I am sorry.

 Then they went back to the S-2 indictment...

On June 24, the US Attorney's Office wrote in on Martin Handler and asked for 63 months and a fine of $200,000 - "the top of the range under the US Sentencing Guidelines." But Handler's sentencing has been adjourned sine die pending an evidentiary hearing on NYCELC's application.

The indictment, while ordered unsealed on January 11, was still not in PACER - in its place were two copies of the order to unseal. Inner City Press has obtained and published it on its DocumentCloud, here. 

Docketed on April 15, another co-defendant now intended to plead guilty: "ORDER as to Ben Werczberger. The Court has been informed that Defendant Ben Werczberger may wish to enter a change of plea. Accordingly, on April 18, 2024 at 2:15 p.m., a plea proceeding will take place (Signed by Judge Jennifer H. Rearden."

He did plead guilty on April 18 - the same day co-defendant Wong got time served: "JUDGMENT In A Criminal Case. Date of Imposition of Judgment: 4/18/2024. Defendant Charmane Wong (7) pleaded guilty to Count(s) 1 of the S3 Information. IMPRISONMENT: Time served. SUPERVISED RELEASE: One (1) year. Standard Conditions of Supervision."

Summary: They are charged with participating in schemes to steal millions of dollars from government-funded childcare programs for low-income families, including by stealing proceeds from a fake after-school program that received millions in funding and by using funds to purchase private real estate, items at auction, and a luxury vehicle.

  The defendants were ordered released on bond on January 11.

There was an argument about phones seized from the defendants. Defense counsel wanted to litigate before any search warrant can be obtained. But Assistant US Attorney Daniel Wolf said the issue wasn't ripe, that they could move to suppress later. 

 Judge Lehrburger recommended that defense counsel write a letter to the assigned District Judge Jennifer H. Rearden.

On January 18, they did, arguing that "the government has not set forth the basis for the agents' belief that - at the time of the seizure - they had probable cause to believe that these specific phones contained evidence of criminality." And some phones, they say, were not in plain view. Motion on Patreon here

On January 19, Judge Rearden held the arraignment, and moved on to trial date. Inner City Press thread here, more on Patreon here

On March 14, 2023, the US Attorney's Office docketed redacted letters as to Martin Handler and Martin Lieberman, asserting their lawyers have conflicts of interest - that could be waived - with the blacked out material said to "address ongoing non-public matters before the grand jury."

On March 16, Judge Rearden ordered: "ORDER as to Martin Handler, Menachem Lieberman. Defendant Martin Handler, his counsel, and the Government shall appear for a Curcio Hearing on March 22, 2023 at 11:00 a.m. Defendant Menachem Lieberman, his counsel, and the Government shall appear for a Curcio Hearing on March 22, 2023 at 2:00 p.m." Inner City Press asked in its March 16 story, Can they hold a Curcio hearing which does not disclose the conflicts?

  Almost, is the answer. Inner City Press attended and covered both Curcio hearings on March 22. The 11 am, or Menachem Lieberman, when smoothly: he waived the conflict. But at 2 pm, Martin Handler's lawyer contested several of the questions - and then argued that the Court cannot order her client to speak to another lawyer. Judge Rearden asked for a letter by 5 pm on March 23 before she issues an order.

At the end, the AUSA asked to redact the transcript, as the name of one of the companies was said. Inner City Press heard it and wrote it down, but is voluntarily not reporting it here.

On the afternoon of March 23, Handler proposed his own Curcio counsel, citing Supreme Court precedent on a defendant's right "to choose who will represent him."

On March 23, the US Attorney's Office responded that the Court should question the counsel Handler has proposed. Then it separately reported on cellphones, some of which it has still been unable to decrypt or extract.

On March 30, Judge Rearden ordered: "ORDER as to Martin Handler: Martin Handler's application to retain Stacey Richman as independent Curcio counsel, ECF No. 74, is GRANTED. Mr. Handler, his counsel, his independent counsel, and the Government shall appear ... on April 11, 2023 at 10:30 am to continue the March 22, 2023 Curcio hearing."

  Inner City Press was there. Midway through the more than an hour hearing, Handler said he couldn't or wouldn't waive the right to cross examine employees of the two entities. His lawyer added that is not what in her understanding the law or ethics requires - only that information gained in the previous representation cannot be used. It emerged that both entities in the last 24 hours provided waivers. But the AUSA sought and got a question on that these waivers are not necessarily forever. After all this, a knowing acceptance of the (possible) conflict was found, and the case proceeds.

On April 18, all defendants and their counsel were before Judge Rearden. The defense requested a trial date in mid May 2024 but Judge Rearden said that was too far off. One has a conflict in EDNY in March; Judge Rearden asked for emailed about other dates in the first     quarter of 2024.

Watch this site.

Inner City Press will continue to cover this case.

The case is US v. Handler, et al., 23-cr-4 (Rearden)


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