Opinion ID: 510217
Heading Depth: 3
Heading Rank: 4

Heading: Systematic Recovery Service

Text: 22 Lazar was involved with yet another PVB contractor, Systematic Recovery Service (SRS), a debt-collection agency. The owner and president of SRS, Bernard Sandow, first met Lazar in 1976 shortly after Lazar had left his position as Administrator of the DOT. Claiming that he still controlled the PVB, Lazar promised that he could obtain a PVB first-placement contract for SRS, a promise fulfilled in early 1977. Although Lazar and Sandow agreed that Lazar would receive a commission on SRS's profits, SRS earned no profits. In 1980, Lazar and Sandow entered into another agreement under which Sandow agreed to pay Lazar a monthly retainer in exchange for Lazar's assistance in obtaining PVB work for SRS. Sandow, however, failed to make timely payments and ultimately cancelled the agreement in November 1980. Annoyed at Sandow's failure to meet his obligations, Lazar asked Lindenauer to terminate the PVB's contract with SRS. Lindenauer balked at this suggestion, pointing out that [y]ou just can't do something like that for no reason. Soon thereafter, Shafran also asked Lindenauer to cancel SRS's contract. Lindenauer again refused. Lindenauer nevertheless instructed James Rose to draft a memo rationalizing a reduction in assignments to SRS. 23 Lindenauer's attitude toward SRS soon changed. In the middle of 1980, Sandow hired his close friend Sheldon Chevlowe to execute judgments on behalf of SRS. Chevlowe, also a close friend of Manes, subsequently suggested to Lindenauer that Sandow could serve as a source of bribe payments. Indeed, Sandow in late 1980 agreed to pay Chevlowe two and one-half percent of SRS's collection commissions in exchange for Chevlowe's assistance in gaining favor with the PVB. Sandow began making these payments in cash to Chevlowe in early 1981. Chevlowe, in turn, gave the cash to Lindenauer, who divided it evenly between himself and Manes. After he began receiving bribes from Chevlowe, Lindenauer directed Rose to increase SRS's assignments and to give SRS whatever types of summons assignments Sandow might request. SRS's first-placement contract was subsequently renewed. Some months later, Lindenauer told Chevlowe that he had begun to feel very comfortable with Sandow, but complained that collecting money from Sandow through Chevlowe had become logistically awkward. According to Lindenauer, it was getting more and more difficult to arrange all these crazy meetings. After gaining Manes's approval, Lindenauer began to receive bribes directly from Sandow in early 1982. 24 Sandow's payments to Lindenauer increased as SRS, due to Lindenauer's efforts, received more assignments and commissions from the PVB. Indeed, when Lazar stopped paying bribes on behalf of Datacom in mid-1982, Lindenauer blocked the renewal of Datacom's rental-car contract and ensured that the contract was given to SRS. Lindenauer subsequently received two and one-half percent of SRS's commissions under its new contract. By December 1985, Lindenauer and Manes had split $250,000 to $300,000 in cash payments from Sandow. In addition, Lindenauer had received other benefits from Sandow, including meals, video equipment, airline tickets and an encyclopedia. 25 Shortly after SRS had gained favor with Lindenauer, the firm encountered some resistance from Shafran, who was actively supporting Datacom. In particular, Shafran wanted to renew Datacom's rental-car contract, and he became furious at Lindenauer when the contract was given to SRS. Fearing Shafran's continued opposition to SRS, Lindenauer urged Sandow to find a way to appease Shafran, such as taking Shafran to lunch more frequently. Moreover, in the spring of 1983, Lindenauer complained to Manes that I couldn't handle the fights that were going on between Lester and myself in regard to Sandow, and stated that he had even given Sandow permission to give Shafran money from the bribes that [Sandow] was giving Donald [Manes] and myself. Heeding Lindenauer's advice, Sandow began treating Shafran to expensive lunches, often spending more than $70 for two. Aware that his receipt of these meals was improper, Shafran joked with Sandow about City regulations that prohibited a private vendor from spending more than $5 per meal for a City employee. Shafran went to lunch with Sandow approximately six dozen times between 1983 and 1985. Sandow also took Shafran and his wife to expensive dinners and concerts. Moreover, Shafran sometimes solicited benefits from Sandow. For example, in December 1985 he asked Sandow to purchase theater tickets to two shows for the Shafran family. Sandow spent $830 on the tickets although he himself did not attend the performances. On another occasion, Sandow allowed Shafran to charge dinner to Sandow's account at a Manhattan restaurant. Overall, between 1983 and 1985, Shafran accepted approximately $3500 in meals and entertainment from Sandow. Well-fed and amused, Shafran became less resistant to SRS. 26 Lindenauer nevertheless believed that meals and theater tickets might not suffice to guarantee Shafran's support for SRS. After consulting with Manes, Lindenauer told Sandow in late 1982 or early 1983 that it would be a good idea if [Sandow] could try and get Lester [Shafran] to accept some cash. Thus, shortly after Sandow began regularly taking Shafran to lunch, Sandow offered Shafran cash, stating that I was starting to become very successful and would like to share my success with [you]. At first, Shafran refused Sandow's offer, telling Sandow that the better way you can share your success is just continue to do a good job. By 1984, however, Shafran began accepting money from Sandow. For example, during the summers of 1984 and 1985, Sandow gave Shafran approximately $3200 to enable Shafran to visit and to entertain his wife, who was working in rural Pennsylvania at a summer camp attended by the Shafrans' daughters. Moreover, in the early fall of 1985, at Shafran's request, Sandow gave Shafran $1200 to pay for the videotaping of Shafran's daughter's bas mitzvah. The videotaping cost only $300, and Shafran pocketed the remaining $900. In addition, Shafran asked Sandow for money in order to pay for the remodeling of Shafran's kitchen. Sandow responded in December 1985 by handing Shafran $3000 under a table in a Manhattan restaurant. 27 After each payment to Shafran, Sandow would report to Lindenauer. Pleased with Shafran's eagerness to accept cash, Lindenauer told Sandow that Shafran spoke well of Sandow and that Datacom's influence over Shafran had waned. Indeed, in the fall of 1985, Shafran had gone so far as to ask Datacom not to bid against SRS for a rental-car contract to be awarded in 1986. Late in 1985, however, Shafran announced that he was planning to leave the PVB. Fearing that Shafran's departure might damage SRS's chances of securing renewal of the rental-car contract, Lindenauer told Sandow to bribe Shafran to stay at the PVB. Sandow accordingly offered Shafran $5,000 per month to remain at the PVB for one more year. Shafran declined, however, stating that there was no need for him to stay at the PVB because he could control the awarding of the contract from the outside. Shafran then asked Sandow: If the contract is renewed, can I still get the money? Sandow, although annoyed at Shafran's insistence on leaving the PVB, agreed to the request. 28 The FBI arrested Sandow on December 20, 1985. After government agents informed him that he was under investigation in both New York and Chicago, Sandow agreed to cooperate with the government. In particular, Sandow taped a meeting between himself and Shafran at which the two men discussed reports in the press that Sandow was under investigation in Chicago. At this meeting, held on December 31, 1985, Shafran was nervous about speaking with Sandow. In fact, Shafran mouthed the question Are you wired?, to which Sandow shook his head in response. At another point in the meeting, Shafran wrote Sandow a note asking the very same question, and Sandow orally responded No, no. Shafran remained unconvinced. When Sandow cryptically reminded Shafran that Sandow had promised to remodel Shafran's kitchen, Shafran abruptly changed the subject and observed that SRS had achieved its success on the merits. 29 Shafran nevertheless expressed concern that evidence might exist documenting his receipt of meals and entertainment from Sandow. Shafran expressed concern about the $830 in theater tickets Sandow had recently given him, and Sandow stated that he could see no problem with the tickets. Concerned about recently signing Sandow's name to a restaurant bill, Shafran also wrote a note asking Sandow if there was any problem with the restaurant chits. At the end of the meeting, Shafran walked Sandow to the elevator. Still afraid of being taped, he nervously told Sandow, You're going to make me crazy about keeping your hands in your pocket there. What have you got? Sandow pulled a receipt from his pocket to reassure Shafran. Shafran then apologized for his suspicions. Before Sandow entered the elevator, Shafran told Sandow to work it out, and urged Sandow to [k]eep it out of New York. Sandow replied, You know it. If there's any way I can. 30