After Big Fish Plead, Smaller Fry Point Fingers

The star witness testified that David Avigdor wired thousands of dollars in ill-gotten gains into his bank account. But then, under questioning from Avigdor’s attorney, the witness said he didn’t know if Avigdor was even in on the white-collar bank-robbery scam.

“Yes!” a sympathetic voice whispered in the gallery. ​“The truth!”

That was part of the action on Day 5 of a federal trial unfolding in U.S. District Court in Hartford. The case centers on an alleged 15-member mortgage fraud ring that had its way with blighted properties in New Haven and left government and private lenders holding the bag.

On Tuesday, as the government’s star witness finished up his testimony, two New Haven office-mates — both on trial — began to turn against each other.

The two men are Avigdor, a New Haven rabbi and attorney; and disbarred attorney Morris Olmer, a former New Haven alderman and state representative. They are two of five defendants who claim that they were not part of the mortgage fraud ring.

They are the remaining defendants, alleged middlemen, on trial. The bigger fish who ran the scam, and straw buyers who pocketed quick cash, have all pleaded guilty in the face of compelling evidence, including secretly recorded conversations, confessions, and paper trails.

Now the two New Haven friends and office mates, Avigdor and Olmer, may need to point the fingers at each other to try to save their necks and clear their names. At least that’s what appeared to be happening in court Tuesday.

Kenneth Perkins, a 28-year-old from Groton, has also pleaded guilty. On Tuesday, he finished his fifth day on the stand as the prosecution’s wire-wearing star witness. On previous days, he testified on how the scam operated: The conspirators would artificially inflate the value of homes by means of false appraisals, file fictitious mortgage application using ​“straw buyers,” buy the homes for their real price, pocket the difference and abandon the homes to blight.

The ring allegedly defrauded government and private lenders of millions of dollars by pulling this scam on several dozen houses in New Haven and surrounding towns, leaving a trail of rundown and neglected homes in struggling neighborhoods..

After four days of examination by Assistant U.S. Attorney Eric Glover, Perkins was questioned by defense attorneys for the first time on Tuesday. The lawyers sought to discredit Perkins as a crook willing to do or say anything to avoid jail time. They also began to cast aspersions on other defendants, seeking to place blame on other clients in order to position their own in more flattering light.

That was the case with Avigdor and Olmer.

Perkins has testified that Olmer was involved in closings on the homes involved in the fraud scheme, working out of law offices he shared with Avigdor on Whalley Avenue. Avigdor allegedly helped transfer funds earned by the conspiracy. But to hear their respective attorneys’ cross-examination, each man was less culpable than the other.

Avigdor’s attorney, Howard Lawrence was the first to cross-examine Perkins. Wearing a dark suit with a maroon shirt, silver tie, and white pocket handkerchief, he began on a confrontational note: ​“Was it you that taught Mr. [Syed] Babar [the scheme’s admitted mastermind] the method for robbing banks, or was it he that taught it to you?”

Glover successfully objected to that question. It was withdrawn.

Lawrence later began to zero in on Perkins’ knowledge of Avigdor’s alleged role in the conspiracy. Under his questioning, Perkins said that, to his knowledge, Avigdor had no role in illegal closings or in falsified mortgage loan applications.

“David never received a bag of cash?” Lawrence pressed.

“No,” Perkins said.

“David had no clue what was going on?”

“To my knowledge, no.”

“How do you know who your co-conspirators are?” Lawrence asked.

Perkins acknowledged that he has recognized Olmer and Babar as members on the scheme.

“But you do not recognize David Avigdor?” Lawrence asked,

“No,” Perkins said.

As Lawrence returned to his seat, Avigdor’s wife Susanne clenched her fists in the gallery.

“Yes!” she whispered. ​“The truth!”

“He was duped,” Susanne later said of her husband. She had spent the morning in the front row of the courtroom, reading Hebrew prayers from a small red book. ​“He was played big time. He’s a very trusting, believing person.”

Later, when Lawrence had a second opportunity to question Perkins, he sought to underscore Avigdor’s lack of participation and emphasize the role of Olmer.

Olmer was the lawyer for 15 or 16 closings during the scam, Perkins said. He said he used to visit the Whalley Avenue office Olmer shared with Avigdor when closing the deals. Olmer had previously lost his license to practice law; he has told the Independent that he didn’t do any work on these transactions that violated the prohibition.

“Did you believe that Olmer was your attorney throughout those deals?” Lawrence asked.

“Yes,” Perkins said.

“What was your longest conversation with David Avigdor?”

“Twenty seconds.”

Perkins acknowledged that he recorded conversations between himself and Thomas Gallagher (who pleaded guilty on Monday), Olmer, and Babar. Did he record conversations with Avigdor?

“No,” Perkins said.

“Not one?” Lawrence asked.

“No.”

You never discussed anything with Avigdor?

“No.”

“You never exposed anything to him, did you?” Lawrence asked.

“No.”

“Mr. Olmer was the attorney handling your affairs and Mr. Babar’s affairs,” Lawrence said. ​“For the entire period from the time that you first met Mr. Olmer to the time of the last deal, as far as you knew or were aware, Mr. Olmer was the attorney representing your interests.”

“Yes,” Perkins said.

“An Office Is Not A Person”

Next to examine Perkins was Olmer’s lawyer, Audrey Felsen. Where Lawrence ended his questions with an emphasis on Olmer, she began hers with Avigdor.

She focused on wire transfers from a law office to Perkins’ bank account.

“Money has to get wired by somebody,” she said. ​“A person has to do it, not a law office.”

“An office is not a person. That is correct,” Perkins said.

Felsen called up an image of a bank statement on the 17 monitors in the courtroom and asked Perkins whom the document indicated had wired money into a bank account.

“David Avigdor,” Perkins said.

“Not Morris Olmer?” Felsen said.

“It is not from Morris Olmer,” Perkins said.

On Monday the court heard a wiretap recording between Perkins and an alleged conspirator, Felsen said. ​“You were discussing the fact that Mr. Olmer was in trouble with his law license and lost his license for a while,” she said. ​“So this is from attorney David Avigdor right? And Olmer had lost his license.”

“Yes.” Perkins said.

In another wire conversation between Perkins and Babar, Babar had said, “‘I’m going to pay Morris Olmer because I don’t want to leave them empty.’”

“Who’s ​‘them’?” Felsen asked.

“Morris and David, I assume,” Perkins said.

“Objection!” Lawrence stood up abruptly to protest that an assumption is not evidence. The judge sustained the objection.

“It is my belief that he’s referring to the law offices,” Perkins said a moment later, referring to the offices shared by longtime friends Olmer and Avigdor.

A Conspirator’s Conscience

Tuesday was the fifth day Perkins took the stand, and may have been the most difficult. Last week and on Monday, the 28-year-old answered questions from assistant U.S. Attorneys with whom he has been working to take down the alleged conspiracy. But on Tuesday, he faced sometimes combative questioning from five lawyers seeking to discredit him.

Perkins wore a pink tie on Tuesday; a pink handkerchief peeked out of the breast pocket of a navy suit. His hands remained clasped neatly in front of him for most of the day, and his habit of rapid blinking continued as attorneys had him admit he is a ​“crook,” ​“thief,” and ​“liar.”

That testimony was elicited by A. Ryan McGuigan, attorney for Wendy Werner, one of the accused conspirators. It was perhaps the bluntest example of a line of an argument pursued by nearly all of the defense attorneys: Perkins lied before to make money; he’ll lie now to avoid jail time.

McGuigan examined Perkins immediately after lunch. He asked him about his childhood. Perkins testified that as a child had been a boy scout and an avid roller skater. (He later became a competitive skater.) His father had owned a rink. He grew up with one sister in Gales Ferry, where he was acolyte at the local episcopal church. He first met Babar in 2002 in a computer science class at Three Rivers Community College in Norwich.

McGuigan asked if Babar is ​“a fairly convincing gentleman.” Perkins said he is. Under questioning, he then said that it would be fair to call him ​“a manipulative gentleman,” ​“a crook,” ​“a thief,” ​“a liar,” and a person ​“not to be trusted.” And since he was involved with Babar, it would also be fair to call Perkins all of those things, too, Perkins acknowledged.

McGuigan asked Perkins why he continued to involve himself more and more in the scam after he realized it was illegal.

“What were you thinking?” he asked.

“I don’t know,” Perkins said. ​“I had already dug myself into this hole and i just kept on digging.”

“In the beginning it was just blind faith,” he said later. ​“There were definitely nights of guilt … It definitely made me feel sick sometimes to think about what we were doing.” He stopped listening to the part of his brain that questioned the scam, Perkins said.

“Would that part of you brain be your conscience?” McGuigan asked.

“Yes,” Perkins said.

Previous coverage of this case:

• Slum-Photo Doctor Makes A Call
• What Happened At Goodfellas Didn’t Stay At Goodfellas
• Fraud Trial Opens With Oz-Like Yarn
• ​“Partying” MySpacer Lined Up Scam Homebuyers
• ​“Straw Buyer” Pleads Guilty
• Neighbors, Taxpayers Left With The Tab
• FBI Arrests Police Commissioner, Slumlord, Rabbi
• One Last Gambit Falls Short
• Was He In ​“Custody”?
• Is Slum Landlord Helping The FBI?
• Feds Snag Poverty Landlord
• Police Commissioner Pleads