Rockland County fraudster Sholam Weiss succeeded in getting 825 years knocked off his federal prison sentence when Donald Trump granted clemency on his last full day in office, but federal courts since then have found no reason to waive a nearly $300 million fine or reduce three years of supervised release.
“The commutation did not … relieve defendant’s supervised release, fine or forfeiture obligations,” U.S. District Judge Philip M. Halpern ruled on Oct. 17.
Weiss and others were convicted for looting more than $400 million from National Heritage Life Insurance Co. in the 1990s, in what was believed to be the largest insurance company failure ever caused by criminals.
Weiss was convicted on 78 counts of racketeering, wire fraud and money laundering.
He had rejected a plea bargain that would have put him behind bars for five years, and while a jury was deliberating he fled the country.
He was convicted in absentia and in 2020 he was sentenced to 845 years in prison, in what was believed to be the longest prison term ever imposed for a white collar crime.
He also was ordered to pay $123 million in restitution to the victims, pay a $123 million fine, and serve three year of supervised release after his prison term.
He was found living an extravagant lifestyle in Vienna, Austria, according to court records, and extradited in 2002.
Even before President Trump commuted the prison sentence on Jan. 19, 2021, Weiss was lobbying for compassionate release. Having served 19 years, his attorneys had argued, he had been a good prisoner, his wife needed his help at home, he was in poor health, and under current sentencing guidelines he could have been sentenced to as few as 37 months.
But federal Judge Carlos E. Mendoza in Orlando, where the original trial was held and where many of the insurance scam victims lived, denied Weiss’ request in July 2020.
“His penchant towards dishonesty and fraudulent behavior could cause harm to the community,” the judge ruled.
In 2021, jurisdiction was transferred to federal court in White Plains, and Weiss asked the court to cut his 3-year term of supervised release and reduce the fine.
He claimed that his role in the insurance fraud was limited to money laundering, not stealing, and that his offenses were not as serious as the government claims.
He was active in his local synagogue and fully integrated into his community, his lawyers argued. He was living only on Social Security payments and the “good graces of his extended family.”
The $123 million criminal fine had grown to nearly $300 million with interest and penalties and was constitutionally excessive, according to his lawyers, and he had satisfied the $125 million in restitution.
“Although his children are not responsible for the fine,” attorney Leo Fox stated in a May 31 letter to assistant prosecutor Mellissa Childs, if the fine was reduced to an affordable and humane amount they would be willing to pay it “so that their father may live his remaining years in peace.”
Assistant prosecutor Stephanie Simon argued that more than $125 million in losses were attributed to Weiss, he was “one of the primary orchestrators,” he defrauded vulnerable people and then hid the money and concealed the fraud, and he has not accepted responsibility for his actions.
He has paid less than $3,000 of the original $123 million fine, and contrary to Weiss’ assertion that he satisfied the $125 million restitution, the prosecutor said, it was the government that recovered the money from other sources.
On Aug. 9, Judge Halpern denied the motion for early release from supervision. On Oct. 17, he ruled that the White Plains court has no jurisdiction over the fine and that Weiss will have to petition federal court in Orlando for that relief.
