Page 2

Royce spent time, from March 17 through March 26, in Washington, D.C. with Maggie
Moo’s training division prior to signing contracts and completing the financing for his
proposed business. During that time, Jeff celebrated his 50% birthday with some close
friends at a dinner. I sat next to him and we discussed how much Royce was enjoying his
training and how excited he was to be embarking on this new venture. Jeff seemed
genuinely happy and said, “This is going to be great. This is Royce’s destiny.” Five days
later, we learned that we did not have the funds to proceed with our franchise plans. Our
partners managed to pull together extra capital to cover our share and revised the contract
to eliminate us. Although they were truly upset about our financial ruin, they did not
offer us even a small percentage of the business. Despite the fact that Royce came to
them with his idea of obtaining franchise rights for ice cream stores, researched the
various companies operating these franchises, and spent one year developing his plans,
they are now the proud owners and Royce became, temporarily, an employee. All
thanks to Jeffrey Goldberg.

We were also in the process of building a new home in Vernon Hills. We had already
signed a contract with Zale, remitted $17,500 in earnest money , and were to close in
December 2002. Needless.to.say; we could.not move-forward:with:ournew-home, We
notified Zale and explained our situation, but they refused to refund any of our money
and-told-us-if we-did-not'coritiniié Gut building process we would-be.in.default. Even
when our lawyer spoke to them, they were totally uncooperative. So because of Jeffrey’s
fraud, we now lost additional money. In addition, we could no longer afford to live in
our Buffalo Grove home. We:sold-our.beautiful-home.for Jess than-it-was worth because
werhad:a-limited-timetable. Once again, our future was compromised; we are now
renting a townhouse and cannot foresee purchasing anything. We did learn, however,
that the Goldbergs were able to purchase a home recently. It just doesn’t seem fair!

In order to support ourselves now, Iam-working full,time.and-Royce.is-working:six-days
a.week doing:a-great-deal-of physical labor, but together we'earn only halfof-what Royce
alone:previously’eatiiét. This was not the way we planned to spend this stage of our
lives. We had thought our retirement was secure and that we had enough money to own a
business and still maintain a comfortable lifestyle. However, our entire life—let alone our
lifestyle-has changed drastically. We are able to afford only the very basic necessities,
In fact, when, our.daughter-graduatedcollegelast-summer with a3.85.average, instead of
buying her.a-new-caras-we had planned;-we bought-her.a sweater. Everyone said that she
was very sweet and understood our situation; however, she shouldn’t have had to

understand! We shouldn’t have lost our money!


offense level of 23 and a criminal history category of I, and
hence for a Guideline sentencing range of 46 to 57 months.

What remains then is the question as to where Goldberg
should be placed within that range. Although there may be a good
deal to be said, in light of what has been discussed to this
point, for considering an upward departure from the Guideline
range as well, this Court's concerns over any ruling involving
double counting, as well as over the possibility of overreacting
to the harm that Goldberg has wreaked on the people who reposed
total trust in him, prevents this Court from taking that added
step.

But with that said, this Court believes that its views on
one relevant aspect of a seriously flawed Sentencing Guideline
system are well known: Despite what the system's proponents and
defenders urge as the system's virtues of precision and
objectivity, the surface appearance of such attributes--fostered
for example by the grid that looks so definitive and comforting
in those respects--really masks factors that implicate the
ultimate in subjectivity. That contrast is well demonstrated,
for example, by comparing the treatment of financial crimes such
as Goldberg's (so-called white collar crimes) with other offenses
such as drug offenses or bank robbery.

To choose the latter, for instance, how should the system

objectively equate the robbery of a bank that generates proceeds

13


Sv
— Ne

as a result of this trauma that has been inflicted upon me. Things are always stressed,
strained, and tense between and amongst us. Even my ex-husband says this is my fault
which reinforces his belief that I could not handle financial matters.

Thave also suffered physical consequences as a result of this crime. In the past two years
since I have come to understand all of what has been going on, I have gained a
significant amount of weight, my blood pressure is elevated to the point of needing blood
pressure medication, and my hair has been falling out. My health was perfectly fine prior
to this crime.

Neat, I will speak to the financial impact of this crime. The most important and major
impact is that I am in jeopardy of losing our home and I have had to sell off some of my
personal possessions. Unlike the companies Jeff Goldberg worked for, I do not have
insurance to pay for lawyers in this case, I needed to take a loan out against the house so
T could hire lawyers to try to get my money back. AIII think about is what are we going
to do if we lose the house? Where are we going to live? What will happen to my kids?
What will happen to my dogs? I now work two jobs (previously I worked part-time
because I wanted to not because I had to) to try to maintain the house and the household.
I don’t buy myself new clothes or new shoes, but I use the things that my daughter does
not use or want anymore. The fact that I now work two jobs contributes to the emotional
and physical issues I have discussed above. My time with my children and husband is
very limited because I am always working and when I am not working (which is not very
often) I am exhausted. I never thought I would be needing to do what I am having to do
at this point in my life.

In summary J have attempted to explain to you what Jeff Goldberg’s crime has done to
both me and my family.


Section 10(b) of the 1933 Securities Act and of its
implementation in SEC Rule 10b-5: It includes untrue statements
of material facts, or it omits material facts necessary to make
its statements, in light of the circumstances, not misleading.

Before this memorandum speaks to that inaccuracy, however,
it might be observed parenthetically that the paragraph quoted
above from defense counsel's Memorandum--almost hinting that
Goldberg's victims asked or deserved to be fleeced because of
their own profit-seeking goals--is a bit redolent of the
defendant to a rape charge who says that the victim could or
should have expected to be attacked, or even that she deserved
it, because she dressed in a provocative miniskirt. But that
aside, some chapter and verse response is in order to demonstrate
the inaccuracy of defense counsel's statement in factual terms,
so as to justify the pejorative label that this memorandum has
attached to it.

Although this Court has received and read letters from more
than 20 of Goldberg's victims, it is worth reading just four of
them to demonstrate graphically why this case indeed involves, as
Application Note 2 to Guideline §3A1.1(b) puts it, more than one
“unusually vulnerable victim in which the defendant knows or
should have known of the victim's unusual vulnerability”--a term
referred to in the same Application Note as having such

vulnerability “due to age, physical or mental condition, or who


Page 3

Reflecting back over the years, we are both struck with certain of Jeff’s actions that have
negatively affected our lives and/or have added credence to his guilt. In 1999, Royce was
unemployed and wanted to start his own business. Naturally, he spoke to Jeff who
introduced him to two men with whom Jeff had previous dealings. Together Kevin Koy,
Russ Felker and Royce began Friends2 B Made, a make-your-own stuffed animal store.
The idea was theirs; the entire investment was ours.

We entered into this partnership with the utmost confidence since Jeff knew these men
and guided us through the financial process. Our business failed because after opening
our second store in Maryland, Russ and Kevin stole $100,000 from a company bank
account, leaving Friends 2 B Made nearly insolvent. It wasn’t until after they walked
away from the business that Royce found the two checks Russ had written to himself.
We immediately informed Jeff who advised us not to prosecute because it was their word
against ours! We repeatedly asked for his assistance to regain our money, and he
repeatedly used his now-famous skills to convince us that it would be a futile effort.

In 2001, Jeff represented Royce in a lawsuit brought upon Friends 2 B Made by a
contractor in Maryland to whom the company owed $48,000 for work that began on the
Maryland store.. We agreed to pay $10,000 at that time with the balance to be divided
among Koy, Felker and us,and remitted in one year. In November of 2002, the
plaintiff's lawyer, Bryan Reed, froze our checking account until we paid the entire
balance since neither Kevin Koy nor Russ Felker supposedly were employed or had any
money. Apparently, Koy’s ex-wife was paying for the house in which he and his current
wife live, and Felker’s father was supporting his condominium at Lake Point Towers!
Because Royce and I were stil! trying to settle the financial burdens we had incurred, we
kept the money from the sale of our house in our checking account. Once again, we who
had nothing to hide and who were obviously too naive to expect more trouble, were
forced to release funds to cover the entire amount of the lawsuit; and Koy and Felker paid
nothing!

Recently we learned that Kevin Koy was the licensing agent for HCC Funding—the
imaginary account held by Cole Taylor Bank in which most of our money was
“invested,” and for which we continued to get monthly statements stating that we still had
over $800,000. Obviously, Jeff's dealings with Kevin Koy continued despite Koy’s
previous criminal activity with us,


To,.add.insult-to-injuryywhile-my-husband-and:children-andI.were
vacationing-in:Phoenix-this:past Christmas:(December:2002),here-is what
happened: We:-drove-up-to.the-brand.new Marriott-Desert:Ridge-hotel in
out.of the.car.The-first:person-I-saw:was-Jefirey
erg! Shocked, I told my husband and he ran after Goldberg to try to
talk to him about what was going on, however, Goldberg ran away from
him. We were seething! Goldberg-suppesedly-had-no-money;;no:income, no
jobja.wife.who.didn’t-work, and -was.stayingat a$350-a night-hotel on
vacation.with,his.wife.and.two-teenage:sons. We went out to the pool with
our children to wait for our room to be readied. Who is sitting out on
recliners at the pool, but Goldberg and his family. After much debating back
and forth whether or not we should approach him in front of his family, I
finally told my husband that Goldberg didn’t mind stealing our money for
his family’s support, trips, etc., so why should I continue to be nice and not
let him or his family know what I thought of him. I did.awalked.up to
.Goldberg-whose money was'paying forthis:vacation-his
orhisinvestors from beforefrom whom-he-stole
MILLION: ‘S of dollars’ He'said:tome “Lynti; it isn’t like that.” Hisewifethen
started.calling me-a-bitch,-liar,..ete.,-and threatened.{o,have.security.drag.me
out. I told her that her husband was a lying, deceitful jerk, and she was a
bigger jerk for believing anything he told her. The last thing I told Goldberg
was that I had already met with the FBI, and that everyone I knew whom
Goldberg had stolen from was aware that he would be indicted and
sentenced. I told him that I may not get any money back, but I would be
there at his sentencing, and I hoped his wife and children were there too to
finally see who was telling the truth and who was the amazing liar who stole
millions of dollars from kid’s bar mitzvah funds, retired people’s sole
retirement funds, hard earned money by hard working people who believed
Goldberg’s web of stories over the last 8-10 years. That would be some
small justice to me.

I then told a friend of mine in Phoenix who knew Goldberg and his wife that
we had run into him. She:told*ié'that:she:knewsthat Goldber and-hisdamily
had. justdeft:staying.at.the Ratz-Carlton in’S cottsdale prisr’
Marriott! Another luxury hotel vacation at his victims’ expense when

restitution should have been started. Where was the money coming from?

¥otrhonor;Goldberg-deserves,to.go.to.Kederal:prisony:notva:white:collar
work fart with-adotvof-rich;:well-connected:white.collar-criminals.who-have


July 13, 2003 Jouoe Cagar Agcuss
y NJoyee Cagaur ef
To Whom It May Concern:

Thank you for the opportunity to share this information. Let me start off by saying that I
hope that anyone who is reading this letter never has to go through anything like this. I
will try my best to put into words what this experience and my feelings have been, but at
least for me I do not know if words alone can capture the true feeling of what it was and
still is like to be violated like I was violated by Jeff Goldberg.

I was truly at a vulnerable point in my life when I met Jeff Goldberg in his role as
financial advisor/planner. My husband was divorcing me after 23 years of marriage to
get married to someone else. My husband took care of all of our financial matters as that
was his business and he was and still is very successful at what he does. At the time of
the divorce I felt I needed someone that I could trust to help me negotiate and understand
the financial aspect of the divorce settlement as I had no knowledge at all of financial
matters. Jeff Goldberg had been working with some people I knew for many years so
instead of looking to work with a stranger to get financial advice, I thought I could trust
someone who had been working with these people I knew for many years. How much
further from the truth could I have been. Jeff Goldberg turned out to be the scum of the
earth,

At the time of the divorce, I talked with Jeff Goldberg and asked him if he would help me
negotiate and understand the financial aspect of the divorce settlement and he said yes.
He actually sat with me, my lawyer, and my husband and his lawyer to negotiate the
financial settlement. Jeff Goldberg knew what my financial goals and needs were at all
times and he knew that this settlement would have to last me for the rest of my life.

As a result of this crime that has been committed against me I have nothing left
financially and as a result I have suffered emotionally, physically, and financially. This
crime has not only affected me but my children and my current husband. My feelings
about myself and my life have definitely been changed as a result of this crime. The
emotions are probably the hardest to write about. J thought that my life was over after
my first husband divorced me but I began to recover from that thinking that I was going
to be ok — that I could be independent emotionally and financially. Well, lo and behold,
five years after my divorce, my life came crashing down again and I don’t know how I
am going to recover from this. As I said previously, I felt and still feel betrayed, violated,
depressed, used, manipulated, embarrassed, angry, sad, frustrated, furious, and hatred
towards Jeff Goldberg at varying times and in varying degrees. And sometimes I feel
them all at the same time, which make these negative feelings very intense. Please notice
that the reference to emotions like “happy, content, satisfied, or pleased with life” do not
apply to me anymore. We don’t have fun and we don’t laugh like we used to.

I worry all the time and I feel stressed alll the time. As a result I am not a pleasant person
to be around lately because I feel so many of these negative feelings all the time. I
believe that my relationship with both of my children and current husband have suffered


.G7-24-2883 12:26PM FROM “ORT & ASSOCIATES TO 13128561755

ELC. for paying our day. to-day living expenses. My husband and 1 {rented an’ ‘apartment
the above Arlington Heights address, and now I am going to have to find a new home.
tely, two children have helped my husband id financially { to subsist. Thelloss of -

undingylaLG.y:not-only. depressed my: husband: and: L ‘but

beats .
TOTAL. P.82


F.3d 407, 413-14 (7TM Cir. 2002) and cases cited there, and

United States v. Paneras, 222 F.3d 406, 412-14 (7 Cir. 2002)

With the applicability of Guideline §3A1.1(b) thus having
been cemented, something should be said about the extent of
adjustment called for by that provision. In the language of that
section, two levels up from the otherwise-applicable offense
level are called for “[i]f the defendant knew or should have
known that a victim of the offense was a vulnerable victim,” but
another two level increase is called for by the Guideline if “the
offense involved a large number of vulnerable victims.” In the
latter respect the Application Note states:

Subsection (b) (2) implements, in a broader form, the

instruction to the Commission in section 6(c) (3) of

Public Law 105-184.

This Court has consulted that cross-reference and has found
it to be part of the Telemarketing Fraud Prevention Act of 1998.
But even though the Sentencing Commission has chosen to implement
that concept “in a broader form,” making it applicable to “a
large number” generally rather than restricting it to fraudulent
appeals to a mass market, it cannot fairly be said--despite the
egregious nature of Goldberg's conduct toward those of his
victims who may clearly be characterized as vulnerable--that the
vulnerable victim category applies to enough people who have
suffered at his hands to justify the substantially more severe

adjustment. Accordingly this Court is prepared to modify the


it, “to gild refined gold, to paint the lily....”7 It is true
that this Court has been selective in thus choosing the materials
that best illustrate the applicability of the vulnerable victim
provisions to the circumstances of this case, although a number
of the other letters portray the same pictures in varying
degrees, some of those others close to the four that have been
dealt with at length. But this Court is prepared to hold that
those four statements alone amply demonstrate that Goldberg's
crimes fit very comfortably within the terms of Guideline
§3Al.1(b) and the caselaw. In that regard it is worth quoting
from the most recent statement by our Court of Appeals dealing

with that Guideline, United States v. Sims, 329 F.3d 937, 944

(7TM Cir. 2003), after having quoted Application Note 2:

The government need only establish that a single victim
was vulnerable in order for the enhancement to apply.
Parolin, 239 F.3d at 926. Further, no other factor
need accompany age so long as the victim's
vulnerability is related to the victim's age. See
United States v. Williams, 258 F.3d 669, 672-73 (7th

Cir.2001). Elderly victims satisfy the requirements of
§3Al1.1(b) (1), especially when their financial
investments and financial security are at issue. See

United States v. Seward, 272 F.3d 831, 841 (7th Cir.

2001); United States v. Stewart, 33 F.3d 764, 770-71

(7th Cir. 1994); United States v. Haines, 32 F.3d 290,

293 (7th Cir. 1994).

That last sentence may well have been written expressly as
to Goldberg's aunt Ms. Nagelberg, and perhaps as to others among

his elderly victims whose statements have not been reproduced

2 William Shakespeare, King John act 4, sc. 2, line 11.

6



is otherwise particularly susceptible to the criminal conduct.”
Such detailed treatment is engaged in with some reluctance,
because this Court recognizes that doing so may serve to reopen
painful wounds or to keep those painful wounds open. But it is
also true that by the victims' having responded to the request by
government counsel for their statements, as they have, they have
already shared those wounds with strangers, so that airing the
statements publicly really poses no inconsistency.

Those four letters are the ones received from Bess
Nagelberg, Ina and Royce Williamson, Janyce Cagan Agruss and
Lynne Miller Socol. Look at what they say.*

To go beyond those statements would be, as Shakespeare put

+ Those letters are attached as exhibits to this
memorandum, although this Court anticipates reading them aloud
during the sentencing hearing in the course of expressing its
ultimate views. Brief added comments should be made as to two of
those victims:

1. Ina follow-up letter Ms. Agruss has identified her
financial loss as $1,611,500, for which she has obtained a
judgment against Goldberg--for what little any such judgment
may be worth.

2. As to Ms. Socol's letter, this Court gives no
consideration to her characterization of the Phoenix-
Scottsdale episode that she describes. This Court has read
the explanation by Goldberg's counsel in that respect (Mem.
5 n.1), and it is obviously not in a position to reach any
factual conclusions on the matter. Nor does this Court draw
any inference as to Goldberg's asserted concealment of any
ill-gotten gains, as suggested by Ms. Socol. In terms of
Ms. Socol's letter, as with the others, this Court's focus
remains solely on the vulnerable victim issue.

5


Royce and Ina Williamson
416 E. Bay Tree Circle
Vernon Hills, IL 60061
August 5, 2003

United States Attorney’s Office—Illinois Northern District
Attn: Ms. Lisa Diaz, V.W. Coordinator

219 S. Dearborn St. ~ 5 Floor

Chicago, IL 60604

RE: Jefirey L. Goldberg, USAO #2002R00466, Court Docket #03CR0332
Impact Letter

Dear Ms. Diaz,

March 28, 2002, was the beginning of the worst time in our lives. On that day, Royce
went to Essex Financial, as instructed by Jeffrey Goldberg earlier in the day, to pick up a
check for approximately $200,000 with which we would begin our new business. We
were to be one-third of a partnership in a franchise to open and operate 30 Maggie Moo
ice cream stores in the Chicagoland area over the next 10 years. When Royce spoke to
Laurie Smith at Essex, he was told that they did not have a check because we did not
have any money. AS.a result.of the actions of Jefirey Goldberg and.Essex Financial, we
lost-in-excess.of:$800,000.and were broke!

Royce was so shocked and upset that Mark Jacobs of Essex tried to keep him in the office
to calm down before Royce got into his car. When I called Essex two hours later looking
for Royce, I was given the horrifying news, told of Royce’s condition when he left them
and advised to call the police. Royce;was.missing for. five hours;-he-was.driving around
in a:state-of-hysteria, not eyen.knowing-when-he-was; feeling totally-distraught-and
contemplating suicide;-and-terrified-about-breaking the news tome that-our financial
futureshad'beendéstroyed. And all at the hand of Jeffrey Goldberg—-one.of.our:closest
friends-whom-we'considered “family,” someone with whom we shared holidays and
vacations, whose wife was one of my best friends, and who was given our unconditional
trust to advise us and invest all of the early retirement funds Royce received from Sears.


Does the vulnerable victim adjustment constitute
impermissible double counting in light of the unquestioned
applicability of the two-level adjustment for abuse of trust?
Not at all. There are a host of cases decided by Courts of
Appeals around the country that speak to that issue, but more
than one from our own circuit confirm the applicability of that

conclusion to this case. Thus United Stats v. Haines, 32 F.3d

290, 293 (7 Cir. 1994) cited and distinguished an opinion that
had found such double counting in a very different situation from
the one before the Haines court (that earlier case was United
States v. Kopshever, 6 F.3d 1218 (7 Cir. 1994), which by sheer
chance was written for the panel by this Court, then sitting by
designation). As Haines, 32 F.3d at 293-94 explained:

In this case, the situation is different. The facts in
this record are sufficient to support each adjustment.
Furthermore, the district court did not "draw from the
same well" when imposing the upward adjustments. One
adjustment focuses on the victim, who was demonstrated
to be vulnerable. The other adjustment looks to the
conduct of the offender, who abused a position of
trust.

It is true that Mrs. Hoskins's vulnerability, her age
and inability to care for herself, enabled Haines to
gain her trust. But it is the abuse of that trust by
Haines which led to the second adjustment, not Mrs.
Hoskins's vulnerability. In United States v. Boula,
932 F.2d 651, 655 (7th Cir. 1991), we stated that the
"Guidelines sections are not mutually exclusive.” In
other words, even if there is some overlap in the
factual basis for two or more sentencing adjustments,
so long as there is sufficient factual basis for each
they may both be applied.

Accord, more recent cases such as United States v. Rumsavich, 313



LYNN MILLER SOCOL
290 GREENWOOD AVENUE
GLENCOE, ILLINOIS 60022
(847) 242-9801

U.S. Department of Justice

United States Attorneys Office

Illinois Northern District

Attn: Mrs. Lisa Diaz, V.W. Coordinator

219 S, Dearborn St., 5" Floor

Chicago, IL 60604 July 24, 2003

Re: USAO Number: 2002R00466
Court Docket Number: 03CR0332
Jeffrey L. Goldberg, Defendant

Your Honor:

Iam writing this victim impact statement to familiarize you and others who
may read it with a small part of the background to my case and the effect
Jeffrey Goldberg (“Goldberg”) has had on my family and me.

My husband and I invested our hard earned money with Goldberg in 1994
for the purported Willow Bay development in Antioch, IL. My in-laws,
retired senior citizens, also invested with Goldberg in the project, along with
my brother. My husband and I have invested in numerous other real estate
projects with other limited partnerships, and were familiar with usual and
customary business practices and documentation available and sent to
investors.

However, nothing in my previous experience could prepare me for the way
Goldberg conducted himself during the next 7 to 8 years. I, my husband, and
my brother continuously telephoned Goldberg to beg for documents showing
how the project was doing financially (i.e. K-1’s, financial statements, etc.)
and to find out the progress in the development. I am not exaggerating when
I say that we called Goldberg:in excess of 100 times to try to speak with
him. He rarely returned phone calls, even in the beginning. In fact, we had to
make an appointment with his then secretary for a specific time to call in
order to even attempt to contact him by phone. When we did get the chance


Minute Drder Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge Milton I. Shadur Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 03 CR 332 DATE 10/30/2003
CASE USA vs. Jeffrey Goldberg
TITLE
Tin the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented]

DOCKET ENTRY: :

qd) Oo Filed motion of [ use listing in “Motion” box above.]... ..

(2) oO Brief in support of motion due

@) a Answer brief to motion due . Reply to answer brief due .

(4) Oo Ruling/Hearing on set for at ‘

(5) Oo Status hearing[held/continued to] [set for/re-set for]. on. set for at

© a Pretrial conference[held/continued to] [set for/re-set for] on. set for at

(7) a Trial[set for/re-set for] on at ~

(8) a [Bench/Jury trial] [Hearing] held/continued to at

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

COFRCP4(m) OlLocal Rule 41.1 CUFRCP41(a\(1) OFRCP41(a)(2).

(10) WM! [Otherdocketentry] Enter Memorandum. Again in summary, this court has considered all relevant
factors - - those favoring as well as those disfavoring Goldberg. Unless some aspect of the presentation
made during the course of the October 30 sentencing hearing calls for a different outcome, this court
anticipates sentencing him at the high end of the Guideline range: 57 months in the custody of the Bureau
of Prisons.

dt) [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required. vurberofyrices
ov | Notices mailed by judge’s staff.

Notified counsel by telephone. : NOV 63 2

Docketing to mail notices.

Mail AO 450 form. yinng tantie!

Copy to judge/magistrate judge. qos

courtroom a
SN deputy’s
“| initials =
Date/timie received in
+. “central Clerk’s Office wnaling deputy iis



intending to be a criminal, this Court is reminded of the
circumstances that led to what has become the generic name for
fraudulent activity: the “Ponzi scheme.” Ponzi originally
discovered a legitimate profit opportunity, based on the
arbitrage involved in money transactions--although this Court's
recollection may be wrong, it believes that those involved the
use of postal money orders between the United States and Italy.
Initially Ponzi had found that he could provide a meaningful
return for investors while at the same time making money for
himself. From that discovery he then assumed that if he were to
increase the volume of his activity, he could expand his own
income greatly while continuing to deliver the same impressive
yield to a larger group of investors. Where he went wrong is
that when extremely large numbers of Italian immigrants came
flocking to take advantage of what they understood to be a fine
investment opportunity, and when Ponzi then discovered that it
didn't work in such large numbers, he then continued to solicit
ever-increasing numbers of investors to get funds with which he
could rob Peter to pay Paul--or in that instance, to rob Pietro
to pay Paolo.

Here Goldberg's activities were materially more
reprehensible than Ponzi's, although some of his fraudulently
obtained proceeds were employed in the same way--for example, his

use of money obtained from persons whom he solicited to invest in

11



PSI's analysis to bring the total offense level to 23 (and not
25) rather than 21.

This memorandum next turns to the portion of Goldberg's
Memorandum in which he has moved for a downward departure. As
might be suspected from what has already been said here on the
vulnerable victim subject, any such effort on his part to obtain
especially favorable treatment faces an uphill battle. But
something else must be added in response to the Memorandum's
attempted emphasis on general declines in investment values for
which Goldberg cannot be blamed.

What that emphasis glosses over--or more accurately ignores
entirely--is that Goldberg is not being sentenced for being an
unfortunate investment advisor, himself victimized by a downturn
in the market. Although attorney Stone, like Goldberg himself,
signed the Plea Agreement, he seems to have forgotten in the
intervening six months the detailed recital of Goldberg's crimes
that occupies fully 11 pages in that document (repeated
essentially, as stated earlier, in this month's Government's
Version of the Offense). In the most important sense, Goldberg's
investment skills are an aggravating rather than a mitigating
factor: They facilitated his opportunity to engage in his
crooked conduct by attracting his victims and then lulling them
into a false sense of security.

As for any contention that Goldberg did not start out

10



here. And vulnerable victim status is not reserved to the
elderly--such victims as Ms. Agruss, whom Goldberg targeted at a
time that he knew to be “truly at a vulnerable point in my life”
(her accurate self-characterization) fit that label like a glove
for different and legitimate reasons. Indeed, the same is true
(albeit perhaps to a lesser extent) as to the other two victims
whose statements are included here, and as to some others whose
statements are not.

Although as stated earlier the prosecutor has not spoken
directly to the vulnerable victim issue, Government's Version of
the Offense 13-14 provides an accurate capsule summary of the
victims' letters in their totality:

As detailed in the victim letters submitted to the

Court, victims of Goldberg's lies and deceit lost their

retirement nest eggs; money they saved throughout their

lives; money they used to pay the mortgages on their

homes; money that gave them the emotional security to

feel confident that they were financially stable; and

money they had earned through a lifetime of hard work

and needed to carry on their daily lives. The

emotional and financial devastation Goldberg inflicted

on his victims is substantial. As the victim letters

make clear, it is devastating to learn that someone you

trust has defrauded you and in the process has impacted

on the quality of your life.

Indeed, every individual victim or couple that has written
presents an extraordinarily poignant account of a life that has
been impacted to a major extent by Goldberg's crimes, whether or

not the particular writer meets the demands of the “unusually

vulnerable victim” category.


Page 4

Losing this much money when we had so little left added an immense strain to our
already dismal situation. Lspent.a.great.deal.of time.crying,and.am taking.Lexapro.and
Wellbutrintocontrolmy:depression. Royce has felt unreasonably responsible for
tuining his family’s life. His sense of failure and hopelessness brought him very close to
having a nervous breakdown, and he was suffering continuous anxiety attacks. Some
came upon him while he was driving, forcing him to pull his car to the side of the road.
One especially serious attack at home caused me to call the paramedics since Royce was
unresponsive and gray in color. He-has.been.depending.on.Lexapro.and.Ativan-to:control
these-attacks. Although his condition has improved, he still experiences bouts of anxiety.

As time progresses, we keep reading and hearing more about Jeff’s transgressions. It
appears that we have been pawns of his for many years. Neither of us can imagine how
he could have forged Royce’s signature on a promissory note to another friend’s parents,
how he could take a cruise vacation with us and stop off at a bank in Nassau, how he
could have set us up with his criminal associates, how he could pretend to guide us while
he was stealing all of our money, and how he could feign his affection for our family
while he was knowingly betraying us. We have been questioned and ridiculed for our
unconditional trust in this man. Wemo-longer-have financial security;-we:have:-strained
personal-relationships. with. mutual friends-of-ours-and:the:Goldbergs;-we have'been
suffering terrible:emotional anguish;:and-we are both working very hard to.maintain our
now:simple.lifestyle. »\Whatever-sentence Jeffrey. Goldberg:receives'will-be'light
compared to.our sentence:..the-destruction of our life savings.

Mr. Jed Stone has stated that his client, Jeffrey Goldberg, “should not be judged by the
worst five minutes of his life.....” Evidently Mr. Stone has no real sense of time!

Sincerely,

Ma Libeteimscn

Ina Williamson

oe Mirna,

Roycé Williamson


a*sountry-elub:atmosphereinstead-of'a-small-cell-with-a-real-prison,around
them. He:deservesto-serve at least oiie year for every-million-dollars-hestole
i d.people. Please don’t allow his family or him to benefit from the
money he has stashed away in hidden accounts out of this country that the
FBI hasn’t found. Please allow there be a real consequence to Goldberg’s
behavior and actions. Pleaserestare, our. ability.to:teustagain-by:sentencing
Goldberg.to.the maximunvallowable by:law;andnotaccept'a:plea*bargain
forless.time.thanthesmaximum. Goldberg can be very convincing, but as I
have seen, his audacity is beyond the average person’s comprehension. What
person, other than one without any conscience whatsoever, could take his
family on vacation to an expensive hotel, spending even more money that
was never his, after stealing millions of dollars from countless people, after
being told not to leave the state by the authorities? Why:hasn’the:paid:any
Testifutiontochisevictims.wather'than:spending his: wife’s inheritance money
to-buy-another-home:in-Buffalo’Grove? Do we all have to be victims again
and again? Please prove to all of Goldberg’s victims that there is a serious
consequence to this type of behavior and deliberate criminal actions. Please
have the authorities continue to search for his hidden bank accounts in the
Cayman Islands and wherever else he may have hidden money so he cannot
profit after his eventual release.

Thank you for the opportunity of allowing me to write this letter and be
heard.

Sincerely,
Lynn Miller Socol


by Goldberg's attorney Jed Stone, Esq. seeks to focus on the
devastation that counsel represents as having been wreaked on his
own client's life--a wholly self-inflicted wound, it must be
said--and then to contrast that with the situation of Goldberg's
victims by saying this in Memorandum at 3:

Most of the investors had net worth in excess of three

million dollars. Their average loss was under one

hundred thousand dollars. These victims were, by and

large, venture capitalists who sought large returns on

risky investments.

Because that portrayal seemed seriously inconsistent with at
least a material number of the supplemental reports that
Probation Officer Alper had submitted to this Court after
completing his thorough Presentence Investigation Report
(“PSI”) --supplements that had provided capsule summaries of the
numerous letters received from victims of Goldberg's massive
fraud (amounting at the most recent reading to some $9.1
million)--this Court asked Probation Officer Alper to provide it
with all of the victims' actual letters, both favorable and
unfavorable. This Court has read all of those letters. And
before this memorandum turns to the substance of those letters,
some of which must be dealt with at length or in full to convey
their flavor accurately, it must frankly be said that if the
Memorandum by Goldberg's counsel had been a securities
prospectus, the language that has been quoted earlier (and some

other portions as well) would present a serious violation of


of (say) $2,000 or $3,000, without the robber's use of even a
false “I have a gun” note, with the perpetration of a massive
fraud by another criminal who instead uses false representations
to investors to accomplish his or her goal? How much money must
the white collar criminal in the latter category obtain to put
him or her into the same sentencing range as the robber? It
appears from looking at Guideline §2B3.1(a) and former Guideline
§2F1.i(b) that something over $1.5 million was the answer as to
the white collar criminal until that former Guideline was deleted
by consolidation with Guideline §2B1.1 effective November 1, 2001
(to take such white collar crimes more seriously). Or to take
the other example, how much must the white collar fraudfeasor
extract from his or her victims to be placed on a parity for
sentencing purposes with the person who possesses a kilo of
cocaine with the intent to distribute it?

But over and above the extent to which the Guidelines import
substantial subjectivity, rather than the semblance of
objectivity created by the Guideline grid, one thing appears
reasonable to believe: Prospective white collar offenders, those
who might consider engaging in deliberate financial offenses and
who are typically among the more privileged members of our
society, would seem more likely to be deterred by the knowledge
that such crimes will be met with serious punishment for having

torn the societal fabric than (say) the bank robber, who would

14


g7-24-2083 12:@5PM FRO ORT & ASSOCIATES TO 13128561755 Pe

BESS NAGELBERG
"3700 W. RAND ROAD, #B101
ARTINGTON HEIGHTS, ILLINOIS 60004

: tates Atiomey’s Office :

Al afion: My, Lis Diaz, V. W. Coordinator
Mjinois Northern District .

219 S..Dearbor Street - $* Floor

‘Chicago, Hlinois 60604 .

‘Re: USAO Number: 2002 ROO466

Court Docket No.; 03.CR 0332 .
(Jeffrey L. Goldberg)
ar Mrs. Diaz: .

oo Tam enclosing x Victim Impact Statement, as requested in the letter, dated June 10,
2003, from Assistant ¥. S. aia Scott D. Levine to my husband Jack ole: of me, e.My

xecutor ofmyh  yusband’s and a Estates, until he was recently replaced. Moyhsband and
alamo oF $64: £651:99:in H.C.C. Funding, L.L.C. Myshusbatidiand

 majonty-ofmy-husbend’s and $a inset assets, “other than Social Security. We were
devastated, financially and emotionally, when we became aware in 2002 that our investurent
in H.C.C. Funding, L.L.C. was worthless, We have therefore lost the entire amount of
$154,401.99 that was invested in H.C.C. Funding, L-L.C.

Mr. Goldberg never returned my husband’s telephone calls to him inquiring about
this matter. We simply received the attached letter from his attorney. My husband and 1
primarily depended on the monthly payments from our investments in H.C.C. Funding,



April 23, 2003 Plea Agreement. This should not be taken as a
criticism of the prosecutor, however, for the August 18
memorandum had concluded by stating:

It is not necessary that either counsel address those

subjects by written submissions (including any relevant

case citations) in advance of the sentencing date, but

they should be prepared to discuss both those issues on

that date.

Although this memorandum has been completed just in advance
of any oral submissions that counsel for the parties may make
during the scheduled October 30 sentencing hearing, of course
this Court has already given a great deal of thought and study to
the problem, and--because the sentencing decision will obviously
play such a substantial role in Goldberg's future--this Court
considers it appropriate to reduce its present views to written
form. If anything that develops during the sentencing hearing
were to call for a modification of what is said here, this Court
expects to remain open to a possible revision of these views.

To focus first on the “wulnerable victim” issue, this Court
of course recognizes the need to avoid any element of double
counting that would be implicated if the identical factors that
constitute an abuse of trust (see Guideline §3B1.3) were to be
treated as automatically providing a further showing that one or
more victims of Goldberg's crimes was or were unusually
vulnerable. On the other hand, the October 22 Sentencing

Memorandum and Motion for Downward Departure (“Memorandum”) filed


to speak with Goldberg, he always had an amazingly extravagant story of
people with whom he had met at the mayor’s office, city council, zoning
board, planning department, etc. It got so difficult to get a hold of Goldberg,
that when I finally did, I would take copious notes for my files of names,
dates, and places of people and events he said he had met with. I was getting
an uncomfortable feeling about his unavailability and lack of backup
documents for the project in about 1999 or so. Finally, after much badgering,
Goldberg presented us with a notebook, quite professional looking,
“evidencing” documentation about the validity of the project. We continued
to ask for K~1s, and never received anything-for years. It became impossible
to get in touch with Goldberg either by phone or in person, and in the chance
event we ran into him at a social function, he always had an update about
how the project was doing, and how he was having trouble with the adjacent
property owners, the zoning board, the mayor’s office, this and that
councilperson, etc. Excuse after excuse after excuse about why the project
was never moving ahead. Here is an example from my notes during one of
my telephone conversations with Goldberg (Goldberg speaking):

“We are in serious negotiations with a retail developer from Minneapolis
who is interested in a lot more retail properties than he thought. Lake Villa
city wants the project. The mayor and city also want the project. It may take
4 months extra, because it is not zoned for either yet. The meeting with the
buyer is this week, Friday or Saturday. The village meeting is next week,
and the zoning meeting will be in March. I have hired Alan Krakower (sp?),
as a land planner. He is very well known in Illinois”.

By200dphfinally realized that Goldbérgwas.a dispusting-habitualliarand
had stolenall.of.oursinvestiient. I got out my notes and started making calls
to all of the people Goldberg had named in his “dealings”. First, I called the
mayor’s office in Antioch and Lake Villa. They checked their records, and
told me that the mayor had never met with anyone from Willow Bay, a
Jeffrey Goldberg, or anyone regarding said proposed project. I then called
the County Recorder’s office, and found that the property was not even
owned by Goldberg or anyone remotely connected with his purported
Willow Bay project and that property taxes were being paid by totally
unrelated parties. I then called everyone I knew who had invested in a
Goldberg project and advised them of my findings. Shortlyeaftermy
discovery... found out that,Geldberg-had:been:fir
andwwasin-the-processofideclaring*bankruptey:
FBI: State’s Attomey; ttc.



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF AMERICA,

)
)
Plaintiff, )
)
v. ) No. 03 CR 332
) ly)
JEFFREY GOLDBERG, ) Die,
) Noy é
Defendant . ) # y
G03
MEMORANDUM

Because of concerns raised by Probation Officer Michael
Alper's summaries of a number of the letters that had been
received from victims of the depredations imposed on them by
defendant Jeffrey Goldberg (“Goldberg”), this Court notified the
parties early on that it might give consideration to a two-level
increase in Goldberg's offense level based on the unusual
vulnerability of at least some of his victims--Sentencing
Guideline (“Guideline”) §3A1.1(b)--or perhaps to an upward
departure (see, e.g., Guideline §§5K2.0 and 5K2.3), or to both.
Goldberg's attorney has both responded to that August 8, 2003
memorandum and, apparently on the theory that the best defense is
a good offense, has sought a downward departure.

To date no written response has been forthcoming from the
government, although Assistant United States Attorney Scott
Levine has submitted the October 7 Government's Version of the
Offense, repeating in material part the 1l-plus page description

of Goldberg's admitted predatory activities as set out in his


the Willow Bay and HCC ventures. In contrast to Ponzi's initial
level of naivete, Goldberg was admittedly very smart and
sophisticated. And he abused those talents by mulcting his
unknowing investors to the tune of some $9.1 million in losses.

Tt is also worth observing that this is not an instance of
the sort of situation about which the most notorious con man in
Illinois history, Yellow Kid Weil, spoke when he said in essence
“I never conned anybody who didn't have some larceny in his own
heart.” Or to draw another well-known catchphrase from the con
game lexicon, “If somebody offers you a deal that sounds too good
to be true, that's because it's not true.” In this instance
Goldberg instead took legitimate good-faith investors into what
appeared to be legitimate and plausible investments, then
proceeded to engage in the extensive frauds that he has expressly
admitted in his Plea Agreement--but that he seems now to have
forgotten conveniently, if his lawyer's Memorandum statement on
his behalf is to be credited.

In summary, this Court cannot in good conscience give
favorable consideration to any notion of downward departure,
whether based on the reason that has just been rejected or on the
level of Goldberg's cooperation or remorse--both of which are
accepted as genuine--or based on any other reason. That being
the case, unless the sentencing hearing itself calls fora

different conclusion, this Court's determination calls for an

12


seem to be an unlikely candidate for engaging in any reasoned
cost-benefit analysis. As a matter of sentencing philosophy,
then, this Court tends to favor the imposition of meaningful
sentences in response to the kind of deliberate criminal activity
of the type at issue in this case.

Again in summary, this Court has considered all relevant
factors--those favoring as well as those disfavoring Goldberg.
Unless some aspect of the presentation made during the course of
the October 30 sentencing hearing calls for a different outcome,
this Court anticipates sentencing him at the high end of the

Guideline range: 57 months in the custody of the Bureau of

Ter Wan, Souter

Milton I. Shadur
Senior United States District Judge

Prisons.

Date: October 30, 2003

15