The CBS Murders (20 page)

The lawyer explained it all to his clients. If the government pushed ahead and gained the convictions it so confidently expected, and then filed a harsh sentencing memorandum with the judge, in essence asking for the maximum sentences for the couple, then Irwin could face up to 250 years in prison and Madeleine not much less. Even with time off for good behavior, even if they served only the minimum one third of their sentences, neither Irwin Margolies, at forty-seven, nor Madeleine Margolies, at forty, could ever expect to see the outside world again, all their assets would be seized, and their children would be left destitute. And if the government was put through the time and expense of a trial, they could expect the worst.

The potential price of continued resistance, then, explained again and again by their lawyer, and the frigid atmosphere that hung over their meetings with their prosecutors, eventually convinced the Margolieses that they had little choice but to take whatever the government was prepared to offer and hope for the best. Early in November, the deal was struck.

Irwin Margolies, still maintaining that he was the innocent victim of an evil and untrustworthy employee, Margaret Barbera, agreed to plead guilty to fifty-one of the sixty-two counts of mail fraud, wire fraud, interstate transportation of stolen property, and personal and corporate tax evasion brought against him. He was doing so, he said, to protect his wife. In exchange, the government agreed to drop all the fraud charges against Madeleine Margolies, thereby allowing her to continue her attempts to retain possession of her Greenburgh home, her Florida condominium, and other assets, and accept only a guilty plea to five counts of tax evasion.

Even with their pleas, the couple was warned to expect little mercy. In accordance with Justice Department policy, the prosecutors made no recommendations as to what sentences they would like. But the memoranda filed with Judge John M. Cannella in Federal Court left no doubt as to the government's desires and expectations. There were two. One, running to sixty-one pages, detailed the Candor scheme to defraud Maguire and others. The second, filed as a secret supplement and held in confidence, went through the murders of Jenny Soo Chin and Margaret Barbera and what the government claimed was Irwin Margolies's role in them.

“The impact of the Margolieses' fraud,” the government document said, “goes well beyond the mere misappropriation of many millions of dollars. Partly as a result of the monetary losses incurred, and other unfortunate consequences of the victimization, Maguire, a long-established and highly regarded name in the factoring world, will cease operations and be merged into another Irving Trust Company subsidiary.…

“So, too, the careers of several Maguire officers who were involved in the administration of the Candor account and who were themselves hoodwinked by the multifarious lies and other stratagems of the defendants have been crippled. Additionally, the Margolieses have left behind them a trail of creditors stretching from New York to London and then again to Israel.

“The effect of this fraud upon the financial community is more difficult to gauge. Commercial financing companies such as Maguire are an important industry in New York City, and the services they provide are essential to numerous other enterprises both in this community and elsewhere. A scheme of the dimension and notoriety as that committed by these defendants inevitably inhibits the growth of such companies and makes them more reluctant to offer their services to newer and small clients who may be precisely the enterprises which most need their assistance.

“Despite the devastating effects of their fraud upon institutions and individuals alike, defendants have done absolutely nothing to atone for their crimes. All requests for their cooperation have been rebuffed.… They have made no restitution nor have they so much as offered an explanation as to why restitution cannot be made. Indeed, defendants have tried every imaginable means to conceal their booty and to insulate it from the Government and their legions of creditors.… The conclusion is therefore inescapable that Irwin and Madeleine Margolies remain in jealous possession of many millions of dollars of stolen money and are confident that their sentences will not be such as to cause them to disgorge it. Indeed, their silence in this regard can only be taken as an indication of continuing criminal intent.

“Likewise, despite repeated entreaties from the Government, defendants have declined to assist in the continuing investigation of other persons who necessarily must have been involved in the fraud, except, of course, to thrust responsibility for Maguire's loss upon Margaret Barbera and Jenny Soo Chin, whom they know cannot refute their accusations. They have steadfastly declined to provide information concerning other crimes which have come to light over the course of the investigation. Significantly, at no time have they claimed that they lack information with which to cooperate in the ongoing investigation. Their complete intransigence in these matters must weigh heavily in their sentences.…

“The litany of their various activities over the long course of this scheme reads like an encyclopedia of fraud, deceit, and duplicity. Wrongful appropriation of funds by Mr. and Mrs. Margolies certainly was not undertaken out of any compelling human need.… Their business afforded them an ability to make an honest living and enjoy a most comfortable life. Rather, the only explanation for their conduct is that they were motivated by greed.… Given the magnitude of the crimes, the total lack of remorse or restitution, and the defendants' continuing avariciousness, vindication of the principles of specific and general deterrence requires the imposition of substantial sentences of imprisonment. It is apparent from all the available evidence and from the defendants' massive theft that they did not believe they would be caught, or, alternatively, that they concluded that the amounts of money involved were worth the risk. Unless the Court imposes sentences commensurate with the crime, the sad fact will be that their evaluation was correct.”

Despite these harsh words, the government still was willing to waive the fraud charges against Madeleine Margolies and allow her to plead guilty to the tax-evasion ones only. “Undeniably,” it said, “it is the case that of the two defendants, Irwin Margolies is far more culpable than his wife. However … Mrs. Margolies was an active participant in the Maguire fraud. To the extent that the Government's acceptance of guilty pleas from Mrs. Margolies to tax offenses only may seem inconsistent … ultimately the Government determined to accept guilty pleas from Mrs. Margolies to five tax felonies carrying aggregate prison terms of 19 years and fines totaling $35,000 because of our belief that such maximum penalties would provide this Court with an appropriate sentencing range with respect to all of Mrs. Margolies's criminal activity.… Although Mrs. Margolies can be said to be less culpable than her husband, in large measure this derives from his several and continuous efforts to protect her—to the fullest extent possible from direct and collateral consequences of conviction. Thus, earlier in these proceedings, Irwin Margolies represented to the Court that he wished to testify exculpatorily for his wife at a severed trial, and in his plea allocution, he sought to minimize her role in Candor's day-to-day operations. When all is said and done, however, the simple truth is that Madeleine Margolies played a vital and significant, although supporting, role in the Candor-Maguire crimes.”

As for Irwin Margolies: “The Court, in fashioning an appropriate sentence for Irwin Margolies, should give full consideration to his responsibility for the murder of at least one prospective Government witness and the disappearance through violence of another. If persuaded of Mr. Margolies's direct connection with these heinous acts, the punishment which the Court would otherwise impose upon Margolies should then be enhanced to reflect his responsibility for these most ultimate acts of obstruction of justice.”

Judge Cannella read the memoranda and reached his decision. On December 1, 1982, he sentenced Irwin Margolies to 28 years in federal prison and fined him $72,000. “I am satisfied,” the judge said, “that there is no real remorse in this defendant at this time. He feels it's like paying rent for a loft. I believe that after serving his sentence, the fruits of his crime will still be there for him.” The judge then added that he hoped the Manhattan district attorney would take additional and appropriate action against Margolies if he found sufficient evidence to bring him to trial for murder. But the twenty-eight years for fraud was the longest term ever handed down in New York for a white-collar crime. Judge Cannella ordered Margolies remanded to prison without delay, and the once and still millionaire jeweler was shackled and led off a few blocks to the federally run Metropolitan Correctional Center, the first stop on a long journey, the place where he would remain until the authorities decided where he would go next.

Three days later, it was Madeleine Margolies's turn to face Judge Cannella. She was tearful, contrite. “I relied on my husband's advice on anything I may have done,” she said, sobbing. To which federal attorney Ira Block retorted sarcastically, “One would have to accept the fact that Mrs. Margolies lived in a cocoon.” Judge Cannella heard her out and then sentenced her to three years in a federal prison, which meant she would be eligible for parole in a year, and fined her $35,000. He gave her until late January to get her affairs in order before beginning that sentence.

23

Madeleine Margolies had a lot to do and not much time to do it. Sometime between Christmas and New Year's, she paid a call on family friend and still, in some things, adviser and attorney Henry Oestericher. With her she carried a wallet containing several hundred thousand dollars' worth of diamonds. Following Madeleine's orders, Oestericher walked up to Forty-seventh Street and paid a call on another Margolies friend and ally, jeweler Joseph Gubits. He handed the wallet with its horde of diamonds to Gubits and passed on Madeleine's instructions: Gubits was to protect those diamonds and, when ordered, turn them piece by piece into cash to be delivered to Madeleine's brother, Scott Malen, to Oestericher, or to some other trusted person, to take care of the Margolies family needs while she was away.

A few weeks later, she summoned her brother, who was then acting as president of Madeleine Chain. She gave him an envelope. In the envelope were $100 bills, $50,000 worth. He was to use the money to pay the expenses of running the Green-burgh house and taking care of Douglas and Steven Margolies, to pay lawyers, and to pass on to whomever else Madeleine or Irwin told him to pay.

And there were people to pay. Irwin Margolies did not like the Metropolitan Correctional Center one bit. He kept protesting his innocence, kept looking for ways to get out, and kept blaming a lot of other people for his troubles. If at anyone, his ire was directed at Maguire-Irying Trust attorney David Blejwas. If Blejwas hadn't been so dogged in his digging into the swindle, if Blejwas hadn't been so determined to put the onus on Margolies, it all would have blown away, the blame would have rested on Margaret Barbera, and Margolies would be free and guiltless. Margolies had tasted blood, even if only by proxy, and he had found the taste not unpalatable. He had come to believe that more blood, more murder, was the solution to all his problems. Anyone who crossed him deserved to die. And that was particularly true of David Blejwas. Of course, Margolies would not stoop to doing such a deed himself. There were always others he could buy who would do it for him, and he had plenty of money to do the buying. It didn't matter that he was locked up in a cell. In fact, what better place to find a killer-for-hire than in a prison cell.

But, as a matter of fact, prison may be just the wrong place to look for a killer-for-hire, and especially the Metropolitan Correctional Center. As Chartrand says, “The feds and the federal marshals at MCC have an unlimited number of informants in there. One floor is nothing but federal informants. I would say that a good number of the other floors have persons that are federal informants. And it was no time at all before friendly businessman Irwin is being suckered to death by the other inmates, the informers, the people on the staff. I don't know whether it's totally corrupt or not, but extras are always available if you have the wherewithal, and, of course, Irwin had the wherewithal. So he lived rather comfortably. Irwin liked his food, and so he ate reasonably well. And there were a couple of other obese chaps there who ate reasonably well, too, on Irwin, because they promised to do good things for him and, of course, they had to be rewarded for doing those good things. But Irwin rarely discussed with them what he was doing and planning. With a very few exceptions.”

It did not take very long before the word began to circulate on Margolies's floor at the Metropolitan Correctional Center that the jeweler was interested in putting a proposition to someone who might be interested in listening. The proposition entailed a little contract for some violence. As Chartrand says, “There were several maneuvers going on within the system as to who may be open to accept this contract. There were a number of people who were anxious to have this contract because this man stole five and a half million dollars, and there's got to be money out there he can control and get loose. So even if we don't do it, we can fuck him out of it and there's nothing he can do about it.”

Among all those inmates looking for a piece of the Margolies action, two just hapened to be his cellmates at various times during December and January. Both were career criminals, as people with long records are called these days. One was Henry Adair, who, though only in his early thirties, had been convicted of a variety of major crimes on ten different occasions and was then awaiting a transfer to a more permanent facility after a conviction for smuggling a boatload of narcotics and receiving a sentence of twenty-five years. The other was Vincent Calise, a little older than Adair but his match when it came to a criminal past and present. Neither had any great desire to spend the rest of their good years on the inside. Both would do almost anything to get back on the outside.