Where, then, to look? Barbera had a safety-deposit box. Perhaps the records might be there along with, if Margolies was telling the truth, some of the diamonds and cash. A search warrant was obtained. John Wales went out to a Chemical Bank branch in Queens and served it on a Saturday morning in late April. “The box,” he says, “was empty. That was the big joke. I went out and hid it myself, with millions of dollars in diamonds missing, and it was empty. I came back and I said to the captain, ‘I hid that box.’ He said, ‘How did everything go?’ I said, ‘Well, I’m retiring very shortly.’”
But Chartrand had better luck. He had interviewed Barbera’s brother and sister several times. “And while I’m talking to Margaret’s sister, Faith, Faith tells me that there were some business records that the family removed from the apartment. And I said, ‘What did they look like?’ She said, ‘Well, my brother’s got them. They had a company name on them. They were big portfolios.’ So I went to the loving brother and I asked him if this was so, and he said, ‘Yes.’ And I asked him if it would be possible for me to have them. He then says, ‘I must talk to our attorney.’”
Barbera’s family soon after the murder retained William Kunstler, the well-known and controversial attorney, to represent them in the suit they intended to bring against the federal government for failing to protect their sister.
“So,” says Chartrand, “I called William and I told him who I am and I tell him what I’ve been told and I ask him if I could have them. He calls me back and says, ‘The family says you may come and get them.’ They turned out to be the true and accurate records of the Candor Diamond Corporation. They were examined by federal experts and the district attorney’s accountants. And they pictured the entire fraud on paper by figures. And so now Mr. Margolies is going to hit the jackpot. He is going to have very great problems with the income-tax people and he is going to have very great problems with the fraud people and we are going to put him on ice for a while and make sure he does not decide to run away again while we continue to look for more.”
Then more began to surface. John Wales found the first possible direct link between Margolies and Nash that anybody on the official side knew about. Wales was moonlighting one weekend, doing some siding work on the house of a friend, a former FBI agent turned private investigator. In the middle of the afternoon, Wales took a break. He and his friend sat down, had a beer, and did some light reminiscing about police work, swapping tall stories, always trying to one-up each other. After a time, the friend asked Wales what he was working on. Wales said, “The CBS thing.”
“Oh, yeah,” the friend said. “I worked on that, or at least part of it.”
“Sure,” Wales said. “What did you do?”
“Then he started telling me about him and his son,” Wales says. “They were doing some investigating for John P. Maguire and they were supposed to tail this guy Margolies and see if they could find out what he had done with the money. So one day they followed him into a building in midtown and they saw him have a meeting with a guy in the lobby. He said the guy looked like a hoodlum. That’s how he described him. Only the description was Nash. The description fit Nash. Just Margolies and Nash. That was the one tie-in we could come up with at that time.”
It was a beginning.
New York State, in the guise of the Manhattan district attorney and, in particular, Assistant District Attorney Gregory Waples, concentrated on Nash. For the investigators in Midtown North, in the task force, Waples was an unknown quantity. Another assistant district attorney, Donald Sullivan, had been handling the case from its inception, but he had been offered a better job and was seriously considering it, both from a professional and a personal standpoint. “He called me one day,” Chartrand remembers, “and asked me to stop by, and we had lunch together. Lunch with Sullivan is a sandwich and a container of juice in the park behind the courthouse. He told me that he had been offered a spot as a bureau chief and he wanted the job. But he said that if he thought the selection of his replacement was not the guy to handle this thing, or for whatever reason, he would not agree to it and he would decline. And he talked about this with some of the high mucky-mucks in the DA’s office. And a day later, he told me he spoke to the guy who was going to take over and he said he wanted me to come down and meet him. That’s when I first met Greg Waples. I had never heard of Greg Waples until then. Greg Waples was a conservative-type person, but very, very competent in preparing. He did his homework. He didn’t miss a trick. He played both sides, played the devil’s advocate and was able to anticipate in many cases some of the moves of the other side. A good person and a good DA, and he’s what we call they’ve got hidden down there and they pull them out when they need them.” Armed with the massive circumstantial evidence the cops had gathered on Nash, Waples went before the grand jury and, in June 1982, emerged with an indictment of Nash for five murders—Jenny Soo Chin, Margaret Barbera, Leo Kuranuki, Robert Schulze, and Edward Benford.
Meanwhile, the federal government took out after Irwin and Madeleine Margolies for the Candor-Maguire fraud. Everybody agreed that the case, the still-incomplete case, against Margolies for murder must necessarily wait until after Nash’s trial. First things first. And so, possessed of the books that detailed the scheme to defraud Maguire and the Internal Revenue Service and to enrich the Margolieses, the U.S. attorney for the Southern District of New York, in the persons of Assistant U.S. Attorneys Ira Block and Stephen Schlessinger, went before the federal grand jury that had been empaneled and that, once, had expected to hear the testimony of Margaret Barbera. When they emerged, they had won a wide-ranging indictment, of Margolies and his wife, charging them with over fifty counts of mail fraud, wire fraud, and interstate transportation of stolen property, to which would be added, a little later, additional counts charging personal and corporate income-tax evasion. They were released on $75,000 bail each after Margolies posted a $200,000 personal-appearance bond secured by his Greenburgh home, a bond that was accepted even though there was some question as to just who owned the home now that the courts had ruled that the mortgage payment actually was made with money Candor, and Margolies, had stolen from Maguire and so was not a legal payment. But just to make sure that Irwin and Madeleine Margolies didn’t take it into their heads to make another sudden trip to Israel or someplace else, the court put a travel restriction on them, limiting their movements to Westchester County, the Bronx, and Manhattan.
22
Between indictments and scheduled trials, there stretched, as always in the American system of justice, long months and much work. Irwin and Madeleine Margolies, free on bail, were docketed to face their peers in federal court in Manhattan in December 1982, on the multiple charges of fraud and tax evasion. They had a new lawyer now, an experienced criminal and civil attorney named Gary Woodfield. It was not that Margolies no longer trusted Oestericher. That trust went deep, especially as Oestericher was so intimately involved in all that Margolies had done; it went as deep as their long friendship. It was that Margolies knew all too well Oestericher’s limitations as an attorney, and he was not about to put his fate and his future, nor those of his wife, in Oestericher’s hands.
Donald Nash, languishing in the Manhattan House of Detention, his twenty-day cloning sentence served and now sitting in a cell without bail, would go before his peers in New York State Supreme Court in April 1983, a year after the shooting on Pier Ninety-two, on five counts of murder. His attorney, Lawrence Hochheiser, well known in criminal-law circles, paid a fee in excess of $15,000 by Scott Malen from the Margolies fund, had complained bitterly of foot-dragging, of unconscionable delays in the trial because the prosecution still hadn’t amassed all its evidence and so Nash was being denied his right to a speedy trial. But a trial within a year was the norm, and Hochheiser knew it.
This was a time, then, for the prosecutions, both state and federal, to seek out even more damning evidence than they already had, time to organize that evidence into cases with no holes, and it was a time fo
r the defense, of the Margolieses and of Nash, to try desperately to find the holes through which their clients could escape.
During those months, Nash was constantly in and out of his cell. He was ordered to appear for blood tests, to see if his blood matched any of the samples found in the van. He was ordered to appear to have samples of his hair taken, to see if it matched any of the hair found in the van. He was ordered to appear for test after test. He was taken to the district attorney’s office for interviews, and there he sat silently beside his lawyer, refusing to answer any questions, refusing to say anything, refusing to implicate anyone.
“I removed Donald Nash from prison a number of times,” Chartrand says. “On one occasion I took him from detention, and he was a very popular chap in jail. You’ve got to respect a man like this, what they were charging him with. And a guy said, ‘We’ll see you later, Don.’ And Nash turned around and he pointed his finger as though it was a pistol and fired it. They practically idolized him there.”
The evidence the government had put together against Irwin and Madeleine Margolies was very distressing to Woodfield when he went through it, and he became increasingly gloomy about their prospects. Their only hope, he came to realize, was to strike some sort of deal with the federal attorneys, to plea-bargain and, perhaps, win some kind of leniency. At the beginning, when this was only a simple fraud case, only a matter of missing money and gems, when there was still dispute over the evidence and culpability was open to doubt, the government might well have been interested, and, in exchange for a plea of guilty and the return of some of the loot, the Margolieses might have gotten off with a fine, a short vacation, and some harsh words. But Jenny Soo Chin and Margaret Barbera, and the three CBS technicians, still had been alive then. Times and the situation had changed radically. The government was convinced it could go to trial and win a conviction on most if not all of the counts in the indictments. All a plea bargain would do, then, was save some time and expense. So the government was in a position to hold firm, to bargain hard, to give almost nothing. For Irwin Margolies, Woodfield was told, there would be no deals. For Madeleine Margolies, just maybe, but that would depend on Irwin.
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.”
The CBS Murders Page 15