Fraud Suspect With AIDS Asks Dismissal for Health Reasons

A man accused of masterminding a multimillion-dollar, office-supply fraud scheme is asking a federal judge to drop the charges against him because he has AIDS.

Sheldon L. Block, 36, of Malibu was indicted in February, charged with using a telephone “boiler room” sales operation to get thousands of businesses across the country to pay for overpriced or undelivered office equipment through post office boxes in Sherman Oaks and Encino. He was diagnosed in July as having AIDS and a related disease, Karposi’s sarcoma, according to records on file in U. S. District Court in Los Angeles.

Block’s trial on 75 counts of mail fraud and one count of racketeering is scheduled to begin Sept. 30. But defense attorney Mark E. Beck said in court papers filed Tuesday that a trial would “constitute a death sentence for Mr. Block.”

The prosecution, however, filed papers Tuesday stating that Block recently was seen working out at a health club and that he is robust and cheerful.

Possibly First Such Case

Although other illnesses have prompted delays or dropping of criminal proceedings, both sides agree that this is the first such case they know of involving a defendant with acquired immune deficiency syndrome.

U. S. District Judge A. Andrew Hauk is expected to take up the issue at a hearing today.

Block, president and owner of Venice-based Park Distributing Inc., allegedly grossed $35.4 million from 1981 to 1985 through the San Fernando Valley post office boxes. Prosecutors have alleged that salesmen at six “boiler room” offices in three states blanketed the country with calls and and shipped unwanted office and copier supplies, as well as inflated invoices, to businesses.

The charges carry a maximum sentence of 395 years.

Twenty-three of Block’s employees also were charged with mail fraud and related offenses in the scheme. Of those, 21 have pleaded guilty and at least a dozen have agreed to testify against Block, said Assistant U.S. Atty. David A. Katz, who is prosecuting the case.

Examined by Psychiatrist

Medical tests administered last week by Dr. L. James Grold, a psychiatrist hired by the defense, show “dramatic new evidence of the deterioration of Mr. Block’s condition,” the defense contended in the papers filed Tuesday.

The psychiatrist found brain disease that has reduced Block’s IQ “to the subnormal range” and rendered him “unable to make rational judgments,” the defense documents stated.

Block is also severely depressed, preoccupied with suicide, easily fatigued, and suffers from severe diarrhea, defense attorney Beck contended. He also contended that the trial would increase Block’s susceptibility to other “opportunistic illnesses” that plague AIDS victims.

Prosecution experts do not dispute the AIDS diagnosis but contend that Block can stand trial without physical harm, Katz said.

Katz said the prosecution would be willing to shorten the court days and take frequent rest breaks.

In a statement filed Tuesday with the court, a prosecution expert, Dr. Ronald Fishbach, said he examined Block on Sept. 16 and found no evidence of organic brain damage or psychiatric or neurological dysfunction.

“There is no reason to expect that Block’s risk of infection during a trial would be greater than his risk would be during his usual daily activities,” concluded Fishbach, head of the AIDS task force at St. Vincent Medical Center in Los Angeles.

In a sworn statement filed in the case, Larry Johnson, the U. S. postal inspector in charge of the investigation, said he followed Block to a Santa Monica health club Sept. 8.

Johnson said he secretly photographed Block lifting weights and riding an exercise bicycle for more than an hour. Club officials said Block works out two to three times a week and shows no signs of physical deterioration, Johnson said.

Block was freed on $1-million bail in February after posting two Malibu homes and a third house in Westlake Village as security.