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SUPREME COURT OF THE STATE OF NEW YORK


COUNTY OF NEW YORK: PART 51
- -- .... ~---.----~-------------- --_·_-x
THE PEOPLE OF THE STATE OF NEW YORK,

- against- DECISION AND ORDER

LOUIS POSNER and BETTY POSNER Ind. No. 3982/08

Defendants,

NEW YORK CITY POLICE DEPARTMENT,

Third Party Movant


-. - - X
MICHAEL DeUS, J.:

The New York City Police Department has moved, by ortjer to show cause, to

vacate orders ofthis Court dated February 18 and March 9, 2010,' directing the payment

of defendants' attorney and expert fees and defendants' living expenses, and to oppose

the issuance of additional such orders. Upon consideration of the;motion papers fUed by
\

the New York City Police Department (hereinafter "NVPD"), counsel for defendants and the

District Attorney, as well as all of the prior proceedings herein, tf.IB motion to vacate is

denied and the Police Department is directed to comply with all payment orders issued by

the Court.

On July 17, 2008. the New York City Police Department eXElouted search warrants

at Louis Posner's adult entertainment club (the "Hot Lap Dance Club"), the Posner's

persona! residence, Louis Posner's law office, a storage facility rented by at least Louis

Posner, and the Posners' multiple bank accounts and safe deposit boxes. Pursuant to

those warrants, the police seized over one-half million dollars, which was divided into
I
roughly equal portions held by the District Attorney and the NYPD. Defendant Louis

Posner was thereafter indicted for a vari~ty of promoting prostitution, money laundering
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and falsifying business records charges; his spouse Betty Posner was indicted for falsifying

business records only. As noted below, until recently, neither the District Attorney nor the

NYPD commenced forfeiture proceedings as to the funds controlled by them_

On June 11, 2009, the Court issued written decisions on defendants' omnibus

motions. 80th defendants then retained new counsel, who filed additional lengthy motions

and prepared for trial. New counsel a/so sought, as did former counsel, monthly

disbursements of funds held by the District Attorney for the Posners' living expenses, as

supported by Louis Posner's financial affidavit. In addition, new counsel for each

defendant sought the disbursement of the seized funds. to pay counsels' fees, as

supported by monthly billing records submitted for in <ramera review, and for the payment

of an investigator. After written submissions and argument by the parties - which included

the People's agreement to pay reasonable counsel's fees as work was actually completed

and billed - the Court granted the defense applications, and signed a series of monthly

orders providing for the payment of living exp<mses and counsel and investigator fees,

In January. 2010, the People alerted the Court and defense counsel that they no·

longer possessed sufficient funds to satisfy the payment orders, Elnd that counsel wou Id

need to seek payment from the NYPD. Acting on defendants' request in anticipation of a

firm April 1, 2010, trial date, the Court also agreed to defendants' retention of a forensic

accountant, to be paid from the seized funds lipan in camera review of billing records. On

February 5, 2010, defense counsel served five or six proposed payment orders on the I
NYPD's Property Clerk - according to defense counsel, service of those proposed orders

was declined by the NYPD Legal Department - and upon the New York City Corporation

counsel, which has not taken a position on this litigation. On February 18. 2010, having

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heard nothing from the NYPD, the Court signed the six proposed payment orders. In late

February, 2010, the NYPD first contacted the Court to state that it would file an order to

show cause opposing payment. On March 9. 2010, the Court signed an additional four

orders for the payment of monthly attorneys' fees and living expenses. On March 15,

2010, the NYPD filed its order to show cause, revealing that on March 1. 2010, it had'

commenced a forfeiture proceeding pursuant to Administrative Code §14-140, seeking

forfeiture of the funds seized 20 months eanier.

On March 23,2010, the case was advanced from the April1 si trial date to permit

defendant Louis Posner's guilty plea to a felony count of promoting prostitution in the third

degree in exchange for a promised sentence of probation. One-0f the conditions of the

plea bargain Is that defendants will forfeit any funds held by the NYPD remaining after

payment of such attorney and expert fees and living expenses ordered by the Court. The

criminal proceeding was then adjourned to April 22. 2010, when Louis Posner will be

sentenced and the People will move to dismiss the charges against Betty Posner.

On March 25, 2010, the return date of the present order to show cause, attorneys

for both defendants, the NYPD and the People appeared in court for oral argument on the

NYPD's motion to vacate. 'At that argument. the NYPD expanded its request to argue that

the Court should vacate not only its February 18, 2010. orders. but its March 9, 2010,

orders, and that it should decline to sign any additional payment GJrders.

At argument and in its order to show cause, the NYPD raised a host of objections

to the form and service of the February and MarCh, .2010. proposed payment orders.

Contrary to the NYPD's view of this Court's lack of equity power, however - a view founded

upon the distinct and limited jurisdiction of thp. New York City Criminal Courts - this Court

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possesses both the discretion and equity juris(Hction to enforce its orders notwithstanding

the claimed irregularities. See feople v. SalzoM, 98 M2d 131,132 (Crim. Ct., Kings Co.

1978). In dOing so, this Court is mindful of the unique circumstances posed by this case;

the protracted litigation over the payment issues which preceded the NYPD's entry into the

proceedings; the lack of any forfeiture action by either the District Attorney or the NYPO

for more than one and one-half years; the unbroken involvement by the District Attorney

on this issue, including two submissions filed in support of the NYPD's motion; the inequity

of luring the defense into trial preparation expenditures without ultimate payment'; the

disputed claim regarding whether the NYPD Legal Division would have accepted service

and the undisputed claim of service on Corporation Counsel; the NYPD's slow pace in

routing and responding to the proposed orders which led to its default; and the curable

nature of any technical irregularities. All parties have now received all of the orders and

have had an opportunity to be heard. The underlying criminal prosecution and, subject to

this ruling, the forfeiture proceeding, have having been disposed of by the guilty plea. The

Court therefore finds no useful purpose in further protracting these proceedings.

On the merits, this Court adheres to its view, articulated oV':er six months ago, that

under the unique circumstances posed by this case, disbursement of funds for attorney

and expert fees end living expenses' to further defendants' Sixth Amendment rights and I

The Court also questions thefaimess of the District Attorney's eleventh hour
"departure from the position previously taken in this litigation, ~ in light of its recent
"anal[ysisJ [ofJ the matter in terms of broader policy consideratiomi," to oppose payments
to which it had regularly consented (March 23. 2010, letter by District Attorney opposing
all payments).

The Court does find troubling the People's documented claim (letter dated March
25, 2010), that notwithstanding his sworn financial affidavit and protestations of dire

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meet a pending criminal prosecution is permissible. See PeoRle v. Martinez, 151 M2d 641,

648-50 (Sup. Ct., N. Y. Co. 1991); Matter of Documents Seized Pursuant to a Search

Warrant, 124 M2d 897, 898-99 (Sup. Ct.. N. Y. Ca. 1984); CPL §ff90.55(1)(a).

Accordingly, the motion filed by the NYPD to vacate this Court's February 18, 2010,

orders, and in opposition to the payments outlined in the orders dated March 9, 2010, and

the final orders signed herewith, is denied.

This constitutes the decision and order of the Court.

Dated: New York, New York


Apri113,2010

.S.C. j i

HON. MICH~ll OBUS


V

financial need, Louis Posner has appeared to have regularly and recently frequented lap
and strip clubs. Defendant is reminded that i'f he Violates the specific condition of probation
pertaining to his involvement in such activities, the Court will have the authority to re­
sentence him upon his guilty plea to a Class D felony.