THE case of Arnold Zaler — a former Denver kosher restaurateur and hot dog vendor facing federal fraud charges — seems to be entering its twilight phase.
On Friday, July 24, Zaler is expected to enter a plea of guilty to four of the original 30 mail, bank and wire fraud charges brought against him last year by a grand jury after an FBI investigation.
“We’ve got a disposition worked out,” Zaler’s attorney Mitchell Baker told the Intermountain Jewish News this week. “On Friday, Arnie will enter a plea of guilty to four counts.”
Mitchell has been conferring with the Denver US Attorney’s office for several weeks, working out the precise details of the plea agreement which is scheduled to be entered before US District Judge John Kane today.
On the original charges against him, Zaler faced a potential sentence of 20-30 years. His guilty plea is not expected to result in any significant reduction of that sentence. He could also face fines and significant restitution payments.Except for the sentencing — which will likely take place sometime this fall — this week’s guilty plea would constitute the final legal maneuver in a case whose twists and turns have attracted both local and international media attention.
Zaler, 60, is a Denver native, former Jewish community and political activist who was called the “Bernie Madoff of Denver” by the Jerusalem Post and a “smooth operator” by the Rocky Mountain News.
His troubles in Colorado were not his first brush with the law. In Arizona, he was convicted in 1996 of 50 counts of fraud related to a software company, Softie, Inc., which ostensibly developed popular games but which was alleged to have actually worked as a pyramid scheme.
Sentenced to 14 years, Zaler was able to secure parole after six years and soon thereafter was back in Colorado.
During the period from 2004 to 2007, he owned and operated Zaler’s Kosher Meats and Kosher Korner, a meat market-restaurant and hot dog vendor business respectively, in Denver. Read the related blog post, "Arnie Zaler - out and about in Israel" on Rocky Mountain Jew
LAST year’s indictment against Zaler listed more than $3 million allegedly lost by a list of victims who were lured into investing in those businesses under what the court alleges were false pretenses.
Alleged victims included MEP Group, a New Jersey-based partnership; Spivak Funding, a firm which invests in food companies; and two Denver businessmen.
According to the indictment, these investors forwarded varying amounts of money to Zaler — by means of wire and mail transfers and a series of transfers from several banks — after being shown falsified purchase orders and invoices indicating debts owed to Zaler.
Zaler allegedly falsified these invoices and orders — or otherwise “misrepresented” facts — to indicate that large quantities of hot dogs, frequently in amounts of hundreds of thousands of dollars, had been purchased by firms operating food and beverage concessions at major Denver sports venues and other locations.
Shortly after pleading not guilty to those charges in US District Court in March, 2008, Zaler fled to Israel, jumping his unsecured $25,000 bond and triggering the filing of a federal arrest warrant.
He would spent some 10 months in Israel where, according to a lengthy report in the Jerusalem Post last February, Zaler once more allegedly began to engage in fraudulent activity, including writing bad checks, selling tickets for a Paul McCartney concert and seeking investors in a kosher hot dog business.
Those activities were cut short on Feb. 20, when Zaler surrendered to federal agents at the Atlanta airport, after having earlier negotiated that surrender with FBI and State Department officials.
US Attorney office spokesman Jeff Dorschner told the IJN recently that Zaler was returned to Denver by federal marshals on March 24.
Since that time, he has been confined in the Federal Detention Center in Englewood.
Dorschner added that no additional charges relating to his flight from the US have been filed against Zaler.
Zaler’s attorney Baker told the IJN this week that it’s premature to predict the prison sentence Zaler might receive.
“I really can’t,” he said, “because although the plea agreement contains guideline calculations, those are purely advisory. Under the guidelines, you do have a possibility of getting a slightly lower sentence if you accept responsibility, but that final determination is up to the judge, so there’s absolutely no guarantee that Arnie will get a lighter sentence.”
Zaler was primarily motivated to enter a guilty plea, Baker indicated, out of concerns for the impact of a trial on the victims and his own family.
“Arnie didn’t want to subject people, including any of the victims, to having to go through a trial,” said Baker, who offered his personal belief that Zaler’s acts were the result of an escalating and out-of-control business failure and not a deliberate intent to commit fraud.
“I honestly don’t believe that Arnie ever wanted to hurt anybody,” Baker said. “His business just did not pan out the way it should have.”