Page 1 NO.
14-
In the Supreme Court of the United States
LORIENTON N.A. PALMER,
FREDERICK MARTIN OBERLANDER,
v.
Petitioners,
JOHN DOE 98-CR-01101, UNITED STATES OF AMERICA,
Respondents.
On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Second Circuit
PETITION FOR A WRIT OF CERTIORARI
AND VOLUME 1 OF APPENDIX
Richard E. Lerner
Counsel of Record
The Law Office of Richard E. Lerner, P.C.
1375 Broadway, 3rd Floor
New York, New York Phone: 917.584.Fax: 347.824.richardlerner@msn.com
Counsel for Petitioners
Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.500Page 2 i
QUESTIONS PRESENTED
1. Despite this Court’s holdings that the public has a
first amendment right to access criminal trials, the
Second Circuit uses a cooperator exception to allow
closure without proof of necessity, the mere fact of
cooperation sufficient. Does this violate the
constitution?
2. In a circuit conflict, the Second Circuit uses this
cooperator exception to allow blanket sealing of cases
without individual particularized reviewable findings,
while the Fourth Circuit has held blanket sealing
unconstitutional. May a court seal entire cases and
everything filed in them without particularized
findings?
3. The Second Circuit uses this cooperator exception to
defy victim rights and mandatory sentencing laws,
letting convicted cooperator–defendants evade
restitution by holding the fact of their cooperation
justifies not telling victims of the case, yet claiming
their secret sentencings are really public, which if true
requires victim notification. Does this violate the
constitution?
4. The Second Circuit uses this cooperator exception to
defy the first amendment by letting courts enjoin third
parties who learn of the secret case from telling
anyone, even victims of ongoing crimes involved, even
Congress, without evidentiary hearings or findings, or
other due process. Does this violate the constitution?
5. The Second Circuit upheld the district court’s
rulings maintaining the sealing of documents by a nonprecedential “summary order” it admitted violated its
own precedents but applied nonetheless to this “specialPage 3 ii
case.” Does a federal appellate court violate the
constitution when it purports to issue non-precedential
orders; that is, does Article III require appellate courts
to give precedential value to all their decisions?Page 4 iii
TABLE OF CONTENTS
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . i
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . xi
DECISIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . CONSTITUTIONAL, STATUTORY, AND
REGULATORY PROVISIONS INVOLVED . . . . . . STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . I.
Everything Secret Degenerates – –
Especially the Administration of Justice . . .
II.
The Boston U.S. Attorney’s and FBI Offices
Facilitated and Covered-Up the Crimes of
Racketeer Whitey Bulger Because He Was an
Informant . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III.
The Eastern District of New York U.S.
Attorney’s and FBI Offices Facilitated and
Covered-Up the Crimes of Racketeer Felix
Sater, a Respondent Here, Because He Was
a Cooperator – but Unlike the Bulger Case,
Here, the Federal Courts Knowingly Went
Along, Ultimately Causing $1B of Injury . . . A. Sater’s 1990s racketeering and related
proceedings, 1998 to 2001, by which time
his conviction and cooperation had been
made public by the government, court, et
al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Page 5 iv
B. Sater’s all-new racketeering and related
proceedings while cooperating or
informing, from 2002 through 2009 . . . . C. Sater’s sentencing in 2009 . . . . . . . . . . . IV.
Petitioner Oberlander Discovers the
Crimes and the Cover-Up and Sues to Stop
Them . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
Procedural History I . . . . . . . . . . . . . . . . . . .
VI.
Procedural History II . . . . . . . . . . . . . . . . . .
REASONS FOR GRANTING THE WRIT . . . . . . . I.
The Integrity of the Federal Court System
Depends on This Court’s Confirming That
Lower Courts May no More Defy Binding
Precedent or Wrongfully Infringe Upon
Fundamental Rights Than They May
Defy Mandatory Sentencing or Similar
Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
II.
A lower federal court’s core “inherent power”
does not include the power to refuse to
impose the lawful sentences Congress
mandates, including restitution . . . . . . . . . .
III.
Lower courts’ “inherent power” cannot
include the power to defy binding precedent;
moreover, the issuance of a purported nonprecedential “summary order” by a federal
appeals court, as the Second Circuit issuance
here, is unconstitutional . . . . . . . . . . . . . . . 36Page 6 v
IV.
Lower courts’ “inherent power” cannot
include the power to wrongfully
infringe upon enumerated or unenumerated
rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPENDIX
Appendix A
Summary Order in the United
States Court of Appeals for the
Second Circuit
(June 5, 2014) . . . . . . . . . . . . . App.
Appendix B
Order in the United States District
Court, Eastern District of New York
(May 17, 2013) . . . . . . . . . . . . App.
Appendix C
Order in the United States District
Court, Eastern District of New York
(May 15, 2013) . . . . . . . . . . . App.
Appendix D
Order in the United States District
Court, Eastern District of New York
(March 13, 2013) . . . . . . . . . . App.
Appendix E
Transcript of Sentencing Before
the Honorable I. Leo Glasser
United States District Senior
Judge in the United States District
Court, Eastern District of New York
(October 23, 2009) . . . . . . . . . App. 18Page 7 vi
Appendix F
Excerpts of Docket Entries
U.S. District Court Southern District
of New York (Foley Square)
Criminal Docket for Case #:
1:94-cr-00248-CSH-1 . . . . . . App.
Appendix G
Constitutional, Statutory and
Regulatory Provisions . . . . . App.
Appendix H
Letter from Jeffrey Lichtman to
Eric O. Corngold in No. 00 CR (ILG)
(October 10, 2000) . . . . . . . . . App.
Appendix I
Letter [Excerpt] from the U.S.
Department of Justice to Lawrence
Ray in No. 00-196 (ILG)
(November 20, 2001) . . . . . . . App.
Appendix J
Transcript of Sentencing [Excerpt]
in the United States District Court
for the Eastern District of New
York in CR-98-(February 5, 2004) . . . . . . . . App.
Appendix K
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 00-CR-1005 (NGG)
(June 20, 2006) . . . . . . . . . . . App.
Appendix L
Transcript of Criminal Cause for
Sentencing [Excerpt] in the United
States District Court for the
Eastern District of New York in 04CR-234 (CBA)
(January 11, 2008) . . . . . . . . App. 81Page 8 vii
Appendix M
Transcript of Motion Hearing
[Excerpt] in the United States
District Court for the Eastern
District of New York in 98-CR-(June 14, 2010) . . . . . . . . . . . App.
Appendix N
Transcript of Oral Argument
[Excerpt] in the United States
District Court for the Eastern
District of New York in CV 98-(July 20, 2010) . . . . . . . . . . . App.
Appendix O
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App.
Appendix P
Letter (with attachment) from
Morgan, Lewis & Bockius LLP to
Judge Glasser in 98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App.
Appendix Q
Amendment
to Stipulated
Standstill Order in the United
States District Court for the
Eastern District of New York in CR 1101 (ILG)
(September 27, 2010) . . . . . App.
Appendix R
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(November 16, 2010) . . . . . . App. 114Page 9 viii
Appendix S
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 03cr(November 17, 2010) . . . . . . App.
Appendix T
Brief for the United States
[Excerpt] in the United States
Court of Appeals for the Second
Circuit, No. 11-1957, United States
of America v. Gushlak
(May 8, 2012) . . . . . . . . . . . App.
Appendix U
Letter from the U.S. Department of
Justice to Judge Glasser in No. CR 1101 (ILG)
(November 23, 2010) . . . . . . App.
Appendix V
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(March 17, 2011) . . . . . . . . . App.
Appendix W
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 98-CR-(April 1, 2011) . . . . . . . . . . . App.
Appendix X
Letter [Excerpt] from Wilson,
Elser, Moskowitz, Edelman &
Dicker LLP to Judge Cogan in No.
98 CR 1101 (ILG)
(April 4, 2011) . . . . . . . . . . . App. 138Page 10 ix
Appendix Y
Order in the United States District
Court for the Eastern District of
New York in 98-CR-(April 4, 2011) . . . . . . . . . . . App.
Appendix Z
Order in the United States District
Court for the Eastern District of
New York in 98-CR-(January 26, 2012) . . . . . . . App.
Appendix AA
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(January 26, 2012) . . . . . . . App.
Appendix AB
Order in the United States District
Court for the Eastern District of
New York in 98-CR-(February 2, 2012) . . . . . . . App.
Appendix AC
Letter from the Solicitor General to
the Supreme Court of the United
States
(March 19, 2013) . . . . . . . . . App.
Appendix AD
Email from Todd Kaminsky
(March 28, 2013) . . . . . . . . . App.
Appendix AE
Complaint [Excerpt] in the
Supreme Court of the State of New
York County of New York . App. 159Page 11 x
Appendix AF
Movant John Doe’s Supplemental
Memorandum of Law in Further
Support of Permanent Injunction
[Excerpt] in the United States
District Court Eastern District of
New York . . . . . . . . . . . . . . App.
Appendix AG
Public Records [Excerpt] in U.S. v.
Coppa 00-CR-196 (EDNY) . App.
Appendix AH
The Scorpion and the Frog
[Excerpt] . . . . . . . . . . . . . . . App. SEALED APPENDIX
Appendix AI Memorandum and Order in the
United States District Court, Eastern
District of New York (filed under seal)
(March 14, 2013) . . . . . . . . . . . App. Appendix AJLetter [Excerpt] from Beys, Stein &
Mobargha LLP to Judge Cogan
(August 2, 2012) . . . . . . . . . . . . App. Appendix AK
Transcript [Excerpt] in the United
States Court of Appeals for the
Second Circuit
(February 14, 2011) . . . . . . App. 207Page 12 xi
TABLE OF AUTHORITIES
CASES
ACLU v. Holder,
673 F.3d 245 (4th Cir. 2011) . . . . . . . . . . . . . . . Anastasoff v. United States,
223 F.3d 898, vacated en banc,
215 F.3d 1024 (8th Cir. 2000) . . . . . . . . . . . . . . Caperton v. AT Massey Coal Co., Inc.,
556 U.S. 868 (2009) . . . . . . . . . . . . . . . . . . . . . . . Dolan v. United States,
103 S.Ct. 2553 (2010) . . . . . . . . . . . . . . . . . . . . . Ex Parte United States,
242 U.S. 27 (1916) . . . . . . . . . . . . . . . . . . . . . . . U.S. v. Alcantara,
396 F.3d 189 (2d Cir. 2005) . . . . . . . . . . . . . . . . U.S. v. Salemme,
91 F.Supp.2d 141 (D.Mass. 1999) . . . . . . . . . . . . Withrow v. Larkin,
421 U.S. 35 (1975) . . . . . . . . . . . . . . . . . . . . . . . . CONSTITUTION, STATUTES, AND
REGULATIONS
U.S. Const. Art. III . . . . . . . . . . . . . . . . . . . . . . . 2, U.S. Const. amend. I . . . . . . . . . . . . . 2, 18, 22, 29, U.S. Const. amend. VI . . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 1506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 1964(d) . . . . . . . . . . . . . . . . . . . . . . . . . 14Page 13 xii
18 U.S.C. § 3553(c) . . . . . . . . . . . . . . . . . . . . . . . 2, 18 U.S.C. § 3663 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 3663A . . . . . . . . . . . . . . . . . . . . . . . . 2, 18 U.S.C. § 3664 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 3771 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 3771(a) . . . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 3771(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 3771(b)(1) . . . . . . . . . . . . . . . . . . . . . . . 18 U.S.C. § 3771(d) . . . . . . . . . . . . . . . . . . . . . . . . . 28 U.S.C. § 1254(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 28 CFR § 45.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 CFR § 50.09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RULES
Fed. R. Crim P. 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . Fed. R. Civ. P. 65(d) . . . . . . . . . . . . . . . . . . . . . . . . . OTHER AUTHORITIESPage 14 DECISIONS BELOW
The Second Circuit published a Summary Order sub
nom In re Applications to Unseal 98-cr-1101 (ILG), Fed.Appx. 68, 2014 U.S. App. LEXIS 10436 (June 5,
2014) (App.1) The order of the district court from which
the appeal was taken to the Second Circuit was issued
on March 14, 2013 and possibly remains under seal, if
it ever was lawfully sealed, though in any event certain
information contained therein is public. The sealed
order is submitted to this court in a separate sealed
appendix. (App.AI at 184.)
JURISDICTION
This appeal is from a final decision and order of the
Second Circuit Court of Appeals upholding an order of
a district court in the Eastern District of New York
which declined to “unseal” certain documents.
This Second Circuit order was entered on June 5,
2014, and by order of this court on petitioners’ motion,
the time to file this petition was enlarged to run
through and including November 3, 2014.
Statutory jurisdiction lies in 28 U.S.C. § 1254(1).Page 15 CONSTITUTIONAL, STATUTORY, AND
REGULATORY PROVISIONS INVOLVED
U.S. Constitution, Article III
U.S. Constitution, Amendment I
U.S. Constitution, Amendment VI
18 U.S.C. § 1506, “Theft or Alteration of Record or
Process; False Bail”
18 U.S.C. § 3553(c), “Imposition of a Sentence”
18 U.S.C. § 3663, “Order of Restitution”
18 U.S.C. § 3663A, “Mandatory Restitution to Victims
of Certain Crimes”
18 U.S.C. § 3664, “Procedure for Issuance and
Enforcement of Order of Restitution”
18 U.S.C. § 3771, “The Crime Victims’ Rights Act”
Federal Rule of Criminal Procedure 32, “Sentencing
and Judgment”
Federal Rule of Civil Procedure 65(d), “Injunctions and
Restraining Order”
28 CFR § 45.10, “Procedures to Promote Compliance
with Crime Victims’ Rights Obligations”
28 CFR § 50.9, “Policy with Regard to Open Judicial
Proceedings”Page 16 STATEMENT OF THE CASE
I.
Everything Secret Degenerates – –
Especially the Administration of Justice
The United States Court of Appeals for the Second
Circuit and district courts within, in active concert with
United States Attorneys, have created an
unconstitutional regime of secret criminal cases,
falsified dockets, illegal sentences, and prior restraints
in the name of “protecting” the safety of cooperators.
If this writ is granted, petitioners will ask this
Court use its supervisory powers to stop this defiance
of the Constitution and statutes, not only with respect
to the inferior courts involved, but also with respect to
the practice of law conducted before those courts by the
United States. Prosecutorial discretion and inherent
judicial power are extraordinary, but not infinite, and
not immune to the guarantees of enumerated and
unenumerated rights. Such discretion and power may
not be exercised corruptly, and as they have for too
long, they must be reined in by this Court.
Petitioners begin their explanation of the case by
analogizing it to the only thing like it in modern
history, the Whitey Bulger scandal in Boston.
II.
The Boston U.S. Attorney’s and FBI Offices
Facilitated and Covered-Up the Crimes of
Racketeer Whitey Bulger Because He Was
an Informant
In the 1970s, the Boston FBI office recruited local
mobster Whitey Bulger and others as informants,
beginning an infamous quarter-century partnership in
corruption wherein they gave the FBI informationPage 17 about organized crime and in return the FBI ignored
their crimes, even their murders; allowed innocents to
be convicted in their place, and told them of witnesses
who might testify against them so the informants could
have them killed and maintain their cover.
The corruption lasted to 1994, when a corrupt FBI
agent warned Bulger and others that they’d been
indicted on racketeering charges and Bulger became a
fugitive from justice for twenty years until captured.
In 2003, the House Committee on Government
Reform released the report of its investigation into the
scandal, Everything Secret Degenerates: The FBI Use of
Murderers as Informants. Among its conclusions:
• The FBI perjured, and obstructed state and local
prosecutions, to help their informants.
• Persons as senior as the FBI Director knew.
• The FBI Office of Professional Responsibility
lied when it said no favors had been given the
informants and prevented the committee from
obtaining information that proved the lie.
• The U.S. Attorney committed perjury, and
admitted he’d been intimidated, threatened by
the FBI if he interfered with these informants.
• The DOJ impeded the committee by
withholding, editing, or claiming to have lost
papers.
• In response to suits filed by the victims of these
crimes, the DOJ used litigation tactics “contrary
to respect for the rule of law.”Page 18 *****
The August 19, 2014, headline in Time’s movie
section, reviewing a documentary on the scandal, was,
Who’s the Bigger Criminal, Whitey Bulger or the FBI?
*****
Notably, the report says of federal judge Mark Wolf,
whose landmark decision in U.S. v. Salemme, F.Supp.2d 141 (D.Mass. 1999), started the oversight
process that led to the committee’s investigation, “He
is owed a significant debt of gratitude by everyone
devoted to law enforcement in a democratic society.”
III.
The Eastern District of New York U.S.
Attorney’s and FBI Offices Facilitated and
Covered-Up the Crimes of Racketeer Felix
Sater, a Respondent Here, Because He Was
a Cooperator – but Unlike the Bulger Case,
Here, the Federal Courts Knowingly Went
Along, Ultimately Causing $1B of Injury
In this case, like Whitey Bulger, respondent Felix
Sater, a career criminal and convicted racketeer,
became a cooperating witness and an informant in the
Eastern District of New York and in return was
covertly, and illicitly, not only allowed to, but
emboldened to, in fact facilitated in his efforts to,
commit a billion dollars of continuing predicate crime
during the ten years following his conviction.
And, like Bulger’s case, when one of the petitioners,
an attorney representing victims of those crimes,
discovered the corruption and sought to expose it to
bring Sater and those complicit with him to justice, the
Department of Justice did all it could, no matter howPage 19 corrupt, to cover it up and silence him and his clients,
actively working to prevent state, local, or private
prosecution of Sater.
But there all further resemblance to Bulger ends, as
there’s no Judge Wolf here. To the contrary, to use the
politic language of Caperton1, the evidence would
support the conclusion by an objective, well-informed
observer to a constitutionally intolerable degree of
confidence, that persons in the Department of Justice
were aided and abetted in keeping its corruption secret
by the collusion of Second Circuit district and appellate
judges, themselves implicated ab initio because of the
illegal concealment of Sater’s criminal case and the
illegal sentence he received, judges who, in creating or
upholding a cooperator exception to the constitution,
repudiated their oaths and abused the contempt power
to silence those who would tell the truth, falsified
judicial records, fabricated evidence, refused to afford
due process, and ultimately perpetrated direct fraud
not only on the institution of the court but on this
Court itself.
A. Sater’s 1990s racketeering and related
proceedings, 1998 to 2001, by which time
his conviction and cooperation had been
made public by the government, court,
et al.
Felix Sater has a long history of defrauding
investors and partners in his business ventures. For
Caperton v. AT Massey Coal Co., Inc., 556 U.S. 868 (2009),
quoting Withrow v. Larkin, 421 U.S. 35 (1975) (“probability of
actual bias…[by]…judge…too high to be constitutionally
tolerable”).Page 20 example, in 1998 he pled guilty to racketeering for
operating a “pump-and-dump” penny stock fraud in
partnership with other Russian and La Cosa Nostra
career criminals, bilking investors of at least
$40,000,000.
That should have signaled the end of his business
career and the possibility of restitution for the victims
of his crimes. Not so. Because he agreed to cooperate,
his entire criminal docket was not only “sealed,” but
“super-sealed,” indeed illegally so, infra, leaving his
victims and third parties unaware of his conviction.Apparently, from the time of his plea in through the end of 2001, Sater cooperated in the
investigation, arrest, and prosecution of his coconspirators in the stock fraud.While petitioners don’t know the details of his
cooperation (but take it on faith that there was at least
some), one thing they do know, because it is a matter of
public record, is that on and after March 2, 2000, by the
deliberate action of the government, the fact of Sater’s
conviction, and that of several of his co-conspirators
who also agreed to cooperate, like Sal Lauria, became
This court’s Richmond line of cases, with which familiarity is
assumed, all require procedural and substantive formality before
a proceeding or document in a criminal case may lawfully be closed
to public access. The judge in Sater’s criminal case stated on the
record many times that he never signed a sealing order, (App.M at
86-87), as is confirmed by the record, see U.S. v. Sater, 98-CR-(E.D.N.Y.) (Glasser, J.), as is the fact that no record findings
capable of review to justify any such closure were made.
All relevant process in relation to his co-conspirators took place
sub nom. U.S. v. Coppa, 00-CR-196 (E.D.N.Y.) (Glasser, J.).Page 21 public property forever because Loretta Lynch, then
E.D.N.Y. U.S. Attorneys, Lewis D. Schiliro, NYC FBI
Assistant Director, Howard Safir, N.Y.P.D.
Commissioner, issued a worldwide press release
announcing the arrest of the Coppa defendants and
disclosing that Sater, Lauria, et al. had already pled
guilty to racketeering charges.Six months later, on September 13, 2000, the
release was placed in the Congressional Record during
House hearings, Organized Crime on Wall Street.
Arguably, there might be some debate whether the
press release itself effectively revealed that Sater et al.
were cooperating, for example given the fact that they’d
already pled, but any ambiguity on that score went
away within a year, because by 2001 the government,
Coppa defense attorneys, and the presiding judge
(Glasser, J.) had placed in the public files of the case,
thus making it public property, any number of
documents explicitly confirming Sater’s cooperation.
The press release did travel around the world: “19 Charged in
Stock Scheme Tied to Mob,” The New York Times, March 3, 2000;
“40M Stock Scam 19 Said to Have Ties to U.S., Russian Mobs Are
Charged,” The New York Daily News, March 2, 2000; “Borscht
Boys & Goodfellas In $40M Stock Swindle: Feds,” The New York
Post, March 6, 2000 ; “Mob Influence Hit on Wall Street,” CNN
Moneyline News Hour, aired March 2, 2000; “19 Accused After
$40M Stock Fraud,” The Manchester Guardian UK.
The public court files of the Coppa case, which have always been
public (but which were hidden in the E.D.N.Y. for two years, infra)
contain: (1) The government’s witness list for the Coppa proceeding
against Daniel Persico, a captain in the Colombo crime family,
showing Sater set to testify as a government witness; (2) a
memorandum in support of Coppa defendant Lev’s request forPage 22 In short, by late 2001, anyone who cared to know,
certainly including the Coppa defendants and their
lawyers, knew Sater had pled and was cooperating, as
the information was public property and publicly
available – if you knew where to look.
Then why was there any legal basis to maintain the
“sealing” (illegal concealment) of his entire criminal
case (of course Sater had not yet been sentenced
himself)? Petitioners do not know, for this point has
never been answered despite their many times raising
it throughout the years of litigation, but a good guess
is that the FBI promised to do a favor for Sater after
the 9/11 attacks, and making his criminal record
disappear was the favor.
additional information on “cooperating witnesses” Sater and
other(s); (3) An objection by Lev’s attorney, Jeffrey Lichtman, to
information in Lev’s PSR about his “threat” against Sater (see
next); (4) said PSR, discussing Lev’s threat; and excerpts from the
website of Jeffrey Lichtman describing how he had Lev’s charges
reduced from racketeering to harassing a government witness
(Sater) by showing that said witness was committing crimes of
fraud during his cooperation. (App.AG at 168-178).
In Lauria’s 2003 autobiography The Scorpion and the Frog, he
says he and Sater were resigned to imprisonment because their
attempt at freedom, buying Stinger missiles from Afghanistan, had
failed, but that right after 9/11 Sater called him excitedly to tell
him that they were now going to be the FBI’s new best friend
because of Sater’s Middle East contacts and that in return the FBI
would “suppress” Sater (and Lauria’s) connection to the Coppa case
“as much as possible.” (App.AH at 182-183).Page 23 B. Sater’s all-new racketeering and related
proceedings while cooperating or
informing, from 2002 through During the ensuing years of his cooperating and
informing, while not yet sentenced for the stock
racketeering so supposedly subject to incarceration and
revocation of his cooperation agreement if he
committed crime, Sater took advantage of the secrecy
by resuming his old tricks and defrauding new victims.
By 2002, he had infiltrated and largely controlled
Bayrock, a New York developer with ties to organized
crime, in the next several years using it to launder
hundreds of millions, skim and extort millions more,
and again swindle his investors and partners, for
example fraudulently inducing banks to lend hundreds
of millions to Bayrock by concealment fraud (hiding the
material fact of his conviction from them), threatening
to kill anyone at the firm he thought knew of the
crimes committed there and might report it.7,
At least three Bayrock persons, one former employee and two
partners, have given sworn statements that Sater had threatened
to kill them if they ever complained about or revealed anything
Sater had been doing wrongfully at Bayrock.
It should be noted for the record that, while the Sater press
release was written up and publicized widely, oddly enough his
name was not used in any of that coverage, and so even to this day
searching on his name will not find it, except in the Congressional
record, where of course one would have to know to look in the first
place. Similarly, while the public Coppa records were always
available, one would have to think to look there. Thus, it’s
understandable that many persons, including at Bayrock, would
not know of his conviction, even though it was public property.Page 24 (By no means was Sater the only person committing
crimes at Bayrock; Julius Schwarz, it’s CEO and
General Counsel, was responsible as well because he
was aware of Sater’s secret conviction yet hid it.)
Supposedly, after taking a fortune out of the firm,
and arranging for much of it to be placed into trusts for
his family to remove it from the reach of his victims
(recall he had yet to be sentenced), Sater severed his
ownership in and other ties to Bayrock in 2008.
C. Sater’s sentencing in Finally, on October 23, 2009, more than a decade
after his guilty plea and long after his purported
cooperation and informing had ended, Sater stood
before federal district judge I. Leo Glasser in courtroom
8B of the Eastern District of New York to be sentenced.
It was over in less than an hour. Though Sater had
faced nearly 20 years of confinement, Judge Glasserimposed neither confinement nor probation. That, at
least, was within his discretion.
But, though Sater had also faced mandatory
forfeiture of $80,000,000, Judge Glasser imposed no
forfeiture, only a fine of $25,000, and though Sater had
further faced mandatory restitution of $40,000,000,
Judge Glasser imposed no restitution at all, in sum
Judge Glasser had years before gained notoriety for sentencing
“Sammy the Bull” Gravano to 4½ years’ time served as a reward
for cooperating against John Gotti, suggesting the 19 mob hits
Gravano had admitted couild be thought of as a public service.Page 25 letting Sater keep virtually all of the millions he’d
admitted receiving from the criminal scheme10.
The government might have been expected to
complain about its loss of $79,975,000. But that was
the last thing the government was going to do because
the government had intentionally fouled the criminal
information to which Sater had pled, making
imposition of a forfeiture sentencing order, though
mandatory, impossible, doing so to “protect” Sater from
receiving a sentence mandated by Congress11.
Those defrauded lenders might have been expected
to complain, since during his allocution Sater admitted
that he’d concealed his conviction from them because
he knew they wouldn’t have lent otherwise.12 After all,
most of the loans had been written off, many of the
lenders had become insolvent, and not one would have
lent a dime had they known the truth, as Sater had
just admitted. But those complaints were never going
to happen because even then the lenders still had no
idea of his conviction, thus had no idea of his
In his 2004 PSR, of which this Court allowed limited disclosure
by its order of June 25, 2012 on docket 12-112, the Officer states
that he did not ask Sater what he had done with the millions of
dollars of proceeds of the stock fraud he had admitted receiving.
The sentencing transcript says there was a bargained forefeiture
order in the cooperation as to a house in Hampton Bays. The
cooperation agreement does describe such a house but the public
property records do not show a transfer occurred. In any event,
whatever the truth, the house would have been worth perhaps
$420,000, or 1/200th the mandatory forfeiture order.
The sentencing transcript is in the Appendix. (App.E at 32).Page 26 sentencing, a situation everyone present in that
courtroom had every reason to perpetuate forever.Probation wasn’t going to say anything because five
years before, in the 2004 PSR they’d prepared when
Sater was first scheduled to be sentenced, fn.10, the
officer who wrote it admitted he’d participated with the
government in helping Sater conceal his conviction
from Bayrock and his partners at the firm, thus
facilitating and emboldening Sater’s crimes, including
the financial institution concealment fraud.
Thus, while the four FBI agents present, including
Leo Taddeo -- who as former head of the E.D.N.Y.
Russian organized crime squad and Sater’s handler
was well familiar with the crimes of Sater and his
father, a Mogilevich crime syndicate boss14 -- might
have been expected to arrest Sater once they heard him
confess bank fraud, that was the last thing they were
going to do because it had been part of the
government’s deal with him to facilitate, and ignore,
the crimes, and they would certainly have some
explaining to do how this all happened under their
noses.
One should note Sater’s allocution, where he complains that he
had been trying to turn his life around but because the NY Times
had “outed” him he had to leave “his” company (Bayrock) because
the banks would now no longer lend. Does this sound like someone
who expected that this would ever become public, or like someone
who had been promised it would all stay secret forever?
His father, Michael Sheferofsky, had his own criminal record and
corresponding secret docket in the E.D.N.Y. see infra.Page 27 Accordingly, the E.D.N.Y. AUSA’s present, Todd
Kaminsky and Marshall Miller, who might have been
expected to ask to adjourn to void Sater’s plea
agreement and ask his bail be revoked so he could be
held in custody while they sought to indict him for the
continuing racketeering he’d just admitted
(participating in the operation of Bayrock through a
pattern of bank fraud), weren’t going to do anything
because they, too, had compromised themselves by that
arrangement to help him hide his conviction – a
conviction that was already public property, remember.
The AUSA’s had another reason to keep this all
concealed, or rather 1,200 reasons, namely Sater’s
victims. Naturally all those victims of Sater’s stock
fraud, most of them elderly, some Holocaust survivors,
would have been expected to raise hell about his
minimal sentence and the nearly 15 years it took to get
there, and would have been expected to sue for an order
of restitution15. After all, at interest that $40,000,of mandatory restitution Sater should have been
sentenced to would have grown to $120,000,000 by
2009.
Moreover, his liability to his victims in civil RICO
wasn’t actionable until his conviction became final on
entry of a judgment and commitment order16, and by
2009 with accretion, treble damages, and attorneys’
fees, that liability likely exceeded $500,000,000.
Victims may petition for restitution if denied same, or denied
sufficient amounts thereof, at sentencing. 18 U.S.C. § 3771(d).
18 U.S.C. § 1964(d).Page 28 So indeed those victims might have been expected
to make themselves heard vociferously, but that, too,
was never going to happen because, like the banks, the
victims had never been told of Sater’s sentencing (or,
for that matter, even the existence of his case).
However, unlike the banks, the victims were the
express beneficiaries of a statutory right not only to be
told of it, but to be invited to participate in it17, and it
was the duty of the very same AUSA’s, Kaminksy and
Miller, to make that happen. And rather inevitably,
since there would have been little point in their saving
Sater from tens of millions in mandatory forfeiture only
to have him ordered to pay tens of millions in
mandatory restitution, those AUSA’s repudiated their
duty and completely ignored the victims, not even
bothering to find them beyond those on lists they
already had from the NASD; that this was a
repudiation of their duty there can be no doubt because
AUSA Miller was at the time the E.D.N.Y. victims’
rights compliance officer and so had to know perfectly
well what his duties were to the victims – and to the
law.Mr. Miller is now the fourth ranking official in the
Department of Justice, Principal Deputy Assistant
Attorney General for the Criminal Division to Leslie
Caldwell, Assistant Attorney General for the Criminal
Division, the third ranking official. Ordinarily one
18 U.S.C. § 3771(a).
Remember, their duty is to seek out the victims, inform them of
their rights, and see to it that they were treated with fairness and
dignity. Id. Intentionally failing to notify them of an open court
(public) sentencing proceeding is a serious transgression.Page 29 might wonder whether Ms. Caldwell knows that her
assistant participated in this dishonor of the victims,
and what that augurs for his fealty to victims’ rights,
rights of court access, and his respect for Congressional
mandate in his current position, but this case long ago
departed from the ordinary, and there is no need to
wonder whether she knows, because she does.
Of that there is no doubt, because Ms. Caldwell,
who at the time of Sater’s plea bargain and conviction
was herself an E.D.N.Y. AUSA and at the time of his
2009 sentencing was head of Morgan Lewis’s criminal
defense practice, was also right there in court at that
sentencing, appearing as Sater’s lead defense counsel.
One presumes Ms. Caldwell wouldn’t have wanted
this to see the light of day if, as seems quite likely, the
fees Sater was paying her firm had to be traceable to
money he’d taken from Bayrock19, thus further
traceable to the financing he’d procured by fraud, or to
money he’d kept from his earlier racketeering and had
been spared forfeiting; either way the money was
proceeds of specified unlawful activity.
(That she knew their provenance is without doubt
as well, because in March 2010, barely six months after
his sentencing, Sater gave deposition testimony in
which he said that Ms. Caldwell had advised him that
he should refuse to testify whether he’d concealed any
convictions while at Bayrock because if he admitted he
His 2004 PSR says Sater told his probation officer that he had a
negative net worth, and the only source of income anyone is aware
of over the ensuing years was from Bayrock.Page 30 had he’d be exposing himself to criminal liability20;
unless she was corruptly advising him to take the fifth
and so was guilty of obstruction, Ms. Caldwell was
obviously well aware that her client had committed
hundreds of millions of dollars of concealment fraud at
Bayrock, just as he’d allocated to at his sentencing.)
And finally, as to Ms. Caldwell, we must presume
that she normally did not allow her cooperator clients
to admit at their sentencing allocutions that they had
used the secrecy of their dockets to perpetrate bank
fraud while cooperating unless she knew in advance
that no one would be surprised and no one would care.
And that suggests the question, Why let him admit
it at all? If he’s in open court, admitting his
participation in a billion dollars of bank fraud, doesn’t
he risk having the banks go after him, or Bayrock?
But then of course he wasn’t in open court. Even
though the Second Circuit has held that there is a first
“On the advice of counsel, I am not going to answer that question
as I don’t have to incriminate myself…On the advice of counsel, I
won’t answer past what I have already answered…My counsel is
Leslie Caldwell from Morgan Lewis.”
“Did she know you would be asked this question?”
“Yes.”
“Did she advise you not to answer this question?”
“Yes.”
“The grounds being again?”
“Not to incriminate myself…”Page 31 amendment public right of access to sentencings21, and
other laws and rules provide the same22, nothing
anywhere in the (now public) Sater docket shows there
was any unsealing of the case before sentencing; quite
the contrary. So surely, albeit illegally, his sentencing
was not being held in public.
(Of course if it were in open court, the fact that the
transcript shows his real name used throughout would
eliminate any chance of his cooperation or his
conviction remaining secret, as both were disclosed.)
Finally, there is the judge presiding (Glasser, J.).
He, too, had a duty to the victims, or rather in his case
to ensure that the government discharged its duty to
them23, and the transcript shows he did nothing about
victims’ rights whatsoever. At a minimum, this is
consistent with a sealed, rather than public, sentencing
proceeding, because even if illegally sealed it might at
least explain why the victims hadn’t been told of it24.
IV.
Petitioner Oberlander Discovers the
Crimes and the Cover-Up and Sues to Stop
Them
Petitioner Oberlander is a New York attorney who
represents minority partners in Bayrock, one of them
Bayrock’s former Director of Finance, and also
U.S. v. Alcantara, 396 F.3d 189 (2d. Cir. 2005).
See, 18 U.S.C. § 3553(c) (court at time of sentencing shall state
“in open court” its reasons for imposing the particular sentence).
18 U.S.C. § 3771(b)(1).
18 U.S.C. § 3771(a)(2).Page 32 represents victims of Sater’s 1990s stock fraud. These
partners engaged petitioner on suspicion they had been
defrauded by other partners, including Sater and
Schwarz. Subsequently, they directed him to sue.
When petitioner began drafting a RICO complaint
in 2009, publicly available information showed Sater
was “connected to” organized crime. For example, a
1998 Business Week article, and a 2007 New York
Times article, discussed Sater’s involvement in the
aforementioned stock fraud. And it was widely believed
that Sater had been only an “unindicted co-conspirator”
who avoided prosecution by cooperating; he was indeed
listed as an unindicted co-conspirator in the public
Coppa docket.
There was, however, information from which one
could infer Sater had been prosecuted. For example, a
co-conspirator, Klotsman had told the Times Sater had
pled guilty. And the Times quoted Sater’s lawyer, who
didn’t deny it, but just challenged anyone to find it.
On March 1, 2010, these suspicions were confirmed
when unexpectedly, and without solicitation, petitioner
received documents from a whistleblower, a former
employee of Bayrock, who found them on the Bayrock
email servers during his prior work there.
The documents were Sater’s criminal complaint,
information, proffer, and cooperation agreement, all
from 1998, and a PSR from 2004, all from his secret
case, 98-CR-1101 E.D.N.Y., identifying Sater by his
true name, confirming he had pled guilty to
racketeering, and had been scheduled for sentencing in
2004.Page 33 Petitioner, concluding at least $750,000,000 of the
firm’s capital, had been procured with the fraudulent
concealment of Sater’s conviction, and that the firm’s
customers were being defrauded daily by sales of
condominiums pursuant to false and misleading
offerings, acted quickly.
On May 10, 2010, petitioner filed a civil RICO
complaint, 10-CV-3959, S.D.N.Y., charging Sater and
others with operating the firm through a pattern of
crime, including excerpts from the documents. Within
a day Courthouse News had the story and a copy of the
complaint with the excerpts online, available for
download. Additionally, upon receipt, the firm’s general
counsel disseminated the complaint to several named
defendants and attorneys on May 12, 2010.
V. Procedural History I
On May 18, Sater obtained an ex parte TRO from
the same judge who had secretly tried him, (Glasser, J.,
E.D.N.Y.), enjoining dissemination of the documents
and ordering a hearing to ascertain how petitioner got
them, making petitioner a respondent in his secret
criminal case, U.S. v. Sater, (recall he had been
sentenced only a few months before).
On June 14, the second of four days of hearings,
petitioner asked the court reveal any order purporting
to seal anything, or bind him. Judge Glasser
admitted “there is no formal order” and he
couldn’t “find any order signed by me, which
directed that this file be sealed,” and there was no
indication in the first filing “or in any subsequent
document that an application was made or
request was made in that document to seal thatPage 34 file.” He further emphasized that there were no
orders ever issued that bound petitioner and there
were no sealing orders ever issued. (App.M at 85 et
seq.).
On July 20, Judge Glasser issued a permanent
injunction prohibiting dissemination of the PSR and
stated that while one could infer that the former
Bayrock employee who gave petitioner the documents
“may” have stolen them he still wondered “[w]hat order
of the Court was violated by that. Sater testified
briefly, but neither he nor other witnesses spoke of
any threat of harm they had encountered or had
reason to believe they would encounter if anyone
knew of Sater’s role in the stock fraud, nor did
anyone introduce non-parol evidence of it.
Judge Glasser issued TRO’s on the other
documents, claiming to have found a risk of harm to
Sater, but refused to state what that risk was or where
he had obtained the evidence of it, and never put any of
it on the record (we now know, because he had none).
Petitioner appealed, but it was delayed for months
because Judge Glasser refused to send the notices to
the Second Circuit, keeping them in chambers.
Finally, on their transmittal, the government moved
to seal the appeal and, prior to any hearings or
submissions, the Second Circuit issued sua sponte
ex parte gag orders barring petitioner and his
clients from revealing any documents filed in
related cases in the Eastern or Southern Districts
or the Second Circuit and expressly barred them
from telling Congress what they had learned.Page 35 At argument on the government’s motion to seal,
AUSA Kaminsky said Sater’s criminal case had
been secret since inception, (App.AL at 207 et seq.).
On questioning by the panel, Kaminsky said he
believed there was a serious risk of harm to Sater if
any of this got public.
Petitioner argued that none of these facts were in
the record, so were only argument, and that the First
Amendment required the appellate docket be public.
The court conceded that media organizations could not
have been enjoined had they come into possession of
the documents at issue, and such appellate proceedings
would be open, but petitioners could be gagged because
they’re not the media:
Judge Cabranes asked for assurance from the
government that: “[W]e are not talking about
preventing a news organization from publishing a
matter of public concern or impinging on editorial
discretion.”
Judge Pooler responded to petitioner’s First
Amendment arguments with: “We are not dealing here
with prior restraint of the press or media. That’s what
the Pentagon Papers case was about. [Newspapers
have a special charge in publishing information for
citizens. [Petitioner] doesn’t have any charge in making
this information available to citizens.”
The court then issued a summary order,
maintaining the appellate case under blanket seal,
noting “In light of the serious, indeed grave,
concerns expressed by the United States regarding
the possible consequences of unsealing these
documents, and the absence of any sufficientlyPage 36 persuasive countervailing
expressed by [petitioner]...”
considerations
*****
The importance of the last pages to the maintenance
of a court system built upon fundamental fairness and
due process cannot be over-emphasized. Respectfully
we ask the Court to consider the following:
• Judge Glasser issued a permanent injunction on
dissemination without regard to the norms of
procedural and substantive due process.
• AUSA Kaminsky sat through four days of
district court hearings without introducing
evidence or asking a witness about risk of
harm…
• The Second Circuit blanket sealed an entire
appeal, to this day maintaining hundreds of
filings under seal, based on a record with no
evidence of any risk or reason to believe there
might be a risk based solely on Kaminsky’s
beliefs, which petitioner wasn’t allowed to
contest because it wasn’t done at a hearing.
• The government had made the conviction
public ten years before, by the press release,
but Kaminsky was there perpetrating fraud
on the institution of the court by lying,
saying the government had not (petitioner
hadn’t yet found the press release).
• When petitioner found the press release after
the hearing, and confronted Kaminsky with it,
the government asked to unseal Sater’s docketPage 37 by letter which admitted that the government
had not had any evidence for over ten years that
there had ever been any risk of harm or any
impediment to recruiting cooperators, which
meant Kaminsky knew he had no factual
basis to be opining and arguing before the
Second Circuit that there was grave,
imminent risk and cooperator recruiting
might be impaired. (App.V at 130).
• Kaminsky had been at Sater’s sentencing a
year earlier and had heard him admit the
bank fraud he perpetrated at Bayrock, and
was in possession of a copy of petitioner’s
May 10, 2010 RICO complaint and knew it
exposed the massive related crimes at
Bayrock, yet if petitioner had not found the
press release Kaminsky would have
prevailed in arguing that Sater’s hundreds
of millions of concealment frauds could
never be revealed because there might be a
threat to him. Forgive us for thinking the
threat would be a lot more to Kaminsky et
al. for allowing Sater to commit the frauds
at Bayrock.
• Finally, the government, Sater, the court,
all of them, knew there was a public Coppa
file in Lee Summit Archives for ten years
holding documents showing the public
revelation of Sater’s cooperation, not just
conviction. Why weren’t they admitting it?
Presumably, they knew he wouldn’t find it,
because when petitioner began requesting it
from Lee in November 2010, before thePage 38 Second Circuit hearing, he was told, and
would be told for years, that it had been
requested by, and then disappeared in, the
E.D.N.Y., while the E.D.N.Y. professed to
have no idea how they had misplaced it,
maintaining this lie for two years until it
turned up one day after Sater’s docket had
gone public.
VI.
Procedural History II
The Second Circuit eventually upheld the injunction
on the PSR, and this Court denied cert, but not before
granting petitioner’s motion, see docket 12-112, to be
allowed to disclose the contents of the PSR which he
felt showed government and judicial misconduct.
While the initial disclosure was, as ordered, without
use of Sater’s name, the press interest even before this
court’s order granting the motion had motivated
several persons, most prominently The Miami Herald
and petitioner Palmer, a private citizen, to join in the
attempt to unseal Sater’s case, and after an accident in
the E.D.N.Y. clerk’s office that exposed the entire
docket online for a week, Judge Glasser ruled he had
no choice but to unseal it permanently.
Judge Glasser then proceeded to hold hearings on
what documents on the docket would be unsealed and
what would remain sealed, or “sealed,” and those
hearings concluded in late 2012.
At the beginning of those hearings, Judge Glasser
ordered everyone but Sater and his counsel and the
government removed from the courtroom, including
movants (petitioners here), and announced that we
petitioners were prohibited from introducing anyPage 39 evidence into the unsealing proceedings, that he would
rule based on his own knowledge of the case and what
the government gave him and what Sater gave him,
but would take evidence from no one else, even though
petitioners here had authored almost 75% of all the
documents in question during the prior years of
litigation and so already had access to them anyway.
Then, when petitioners sought to introduce evidence
by document, through motion for judicial notice, Judge
Glasser threatened quasi-criminal sanctions for
“vexatious litigation” and held the submissions out of
order.
Petitioners then appealed from the unsealing order,
as noted in the front of this petition, on the ground that
the entire proceeding had been structurally defective
because the failure to allow us to present evidence that
there never had been any risk and that it had all been
public for years anyway was Fifth Amendment
structural error.
The Second Circuit in a summary order upheld
Judge Glasser, held that even though we had not been
permitted to introduce evidence we had “made our
views known” [sic], whatever that means, and further
held that even though Judge Glasser had made no
record findings of risk (or anything else) capable of
appellate review, merely listing “risk” conclusorily as
his reason for each closure maintained, that because of
the “gravity” of Sater’s cooperation the binding
precedent that there must be such express, reviewable
evidentiary findings need not apply in this special case.
Petitioners seek cert therefrom.Page 40 VII.
Procedural History II
In the interest of expedience, petitioners will
accelerate the remainder of this petition to present the
points in bullet point list format rather than text.
• On March 19, 2013, a few days before
petitioner’s prior petition was due to be
conferenced, the Solicitor General forwarded a
“sealed,” secret, ex parte order of Judge
Glasser’s (App.AI at 184) to this Court which we
had never seen and which was never docketed
and which contained the statement (this is now
a matter of public knowledge) that Sater had
been sentenced in public, in other words in open
court.
In the prior pages, petitioners explained that it
was inconceivable that it was taking place in
open court because Sater was admitting a billion
dollars of fraud while cooperating. Petitioners
also explained that if in fact it was open court,
then that meant that Judge Glasser, Kaminsky,
and Miller had willfully and intentionally defied
their statutory obligations to the victims. Yet
there that order is.
Regrettably, it appears that that much of it was
a fraud directed at this Court, if so the first time
in known history that a sitting federal judge
perpetrated a fraud targeted at this very Court.
Equally if not more regrettable is that the order
also contains a ruling that one Danny Persico
had threatened the life of Sater in an attack on
Lauria soon after the unsealings began claiming
that he only then knew who had informed onPage 41 him. Persico is a member of organized crime and
was a co-conspirator of Sater and Lauria’s in the
stock fraud. But Persico is more than that. He is
a childhood friend of Lauria’s, and Lauria
admits in his own book that he himself told
Persico he informed on him and that while he
seemed to take it well, the FBI told him later
(this is 2002, remember) that Persico had been
making threats against him, a story he repeated
in his (Lauria’s) own sentencing allocution
before Judge Glasser in 2004.
Ordinarily, the ramifications of a sitting judge
participating in the fabrication of evidence like
this to justify the concealment he was
responsible for would be unthinkable, but on
May 15, 2011, Sater’s lawyers wrote petitioner
through counsel warning that they had an
agreement with Judge Glasser that he would not
take up any unsealing motion we made and
would ignore our arguments if he did25. Both
happened as they predicted, as noted already in
the refusal to allow us to admit evidence and, as
we mention in closing, with the ex parte, secret
withdrawal of the government’s March 17, letter motion to unseal, kept from us for six
months.
“Even if Judge Glasser decides to hold a hearing or oral
argument to determine whether to unseal specific docket entries
of Doe’s criminal proceeding, he will do so without considering your
arguments or appeals. If you believe you are driving the unsealing
issue, you are mistaken.”Page 42 And in view of the several ex parte merits
conferences Judge Glasser ordered with the
government and counsel for Sater, to petitioner’s
exclusions, and without petitioner’s knowledge,
all shown on the now unsealed docket of 98-CR1101, who wouldn’t believe this is all collusive,
at best.• Under no circumstances is this petition a claim
of error, and importantly we ask this Court to
understand that this problem of illegally secret
cooperator cases and cover-ups that make the
Bulger case, at least in terms of dollars, look like
an amateur operation is not limited to this one
case.
• At approximately the same time that Sater was
pleading guilty, three co-conspirators, Richard
Appel, Sal Romano, and Myron Gushlak, were
engaged in pump-and-dump fraud of their own,
involving a penny stock controlled by Gushlak.
As with Sater, they bribed brokers to push the
A Status Conference as to Felix Sater was held on 1/10/before Senior Judge I. Leo Glasser: AUSA Todd Kaminsky and
Evan Norris appeared on behalf of the Government. Michael Beys
and Jason Berland appeared on behalf of John Doe. The Court
directed the government and John Doe to provide a detailed
chronological account with transcripts, of what the core issues
involving this case and how it evolved into a First Amendment
issue. The Court will issue an Order on Notice to Mr. Lerner
directing the parties to brief the issues before the Court. The
parties agreed to submit a Scheduling Order to the Court to be “So
Ordered.” (Court Reporter Charleane Heading.) (Francis, Ogoro)
(Entered: 01110/2012)Page 43 stock, in this case including brokers at a firm
called Montrose.
Eventually all three were caught and pled out
and became cooperators. That’s not the
interesting part. What’s interesting is that they,
each of them, openly admitted and stipulated
that they were co-conspirators in the scheme.
Accordingly, both for Pinkerton and restitution
purposes they had to have exactly the same set
of victims to whom they were liable.
When Romano came to be sentenced, the
government told the E.D.N.Y. judge, Carol
Amon, now chief judge of that district, that
Romano had been a great cooperator and that
sadly she could not order Romano to pay
restitution because the government simply had
no idea who they were. The government then
asked her to issue a finding to that effect, which
she did, thus for all practical purposes ending
any ability to get Romano to pay restitution.
When Appel came to be sentenced, surprisingly
enough all of a sudden the government knew
who the victims were, and sought and obtained
a $3,000,000 restitution order.
But when Gushlak came up for sentencing, his
restitution order was for $17,000,000, on top of
a $25,000,000 find. Why?
Because, as to restitution, the sentencing judge
held that as Gushlak, Roman, and Appel had coequal liability, and the government’s expert for
Gushlak’s trial had calculated $17,000,000 as
the aggregate loss for all of them, including allPage 44 the persons Appel had defrauded at Montrose to
further the scheme even though Gushlak had
never heard of them, Gushlak had to pay for all
of it.
Of course this is correct, but that’s not the point.
The point is, the victim loss sheets, as the
dockets reveal, were in the possession of FINRA
(blue sheets), and it is not possible that they
didn’t exist and so the victims couldn’t be found
for “wonderful” cooperator Romano but could be
found for the other two.
What’s even more impressive is that the reason
Gushlak was fined $25,000,000 and sentenced to
may years’ incarceration was that the judge
denied him acceptance credit. Why? Because the
government showed the judge that, just like
Sater, Gushlak had used his secrecy to defraud
investors, lenders and partners, just as Sater
admitted doing at Bayrock.
It’s very fascinating that what sends one man to
prison becomes something that is not to be
spoken about as to Sater, but petitioners will
speak, for what it is, more evidence that Sater,
like untold others, is benefiting from a covert,
and corrupt, promise to keep him “safe.”
• Finally we bring up two cases. One, Sheferofsky,
is a criminal case in the E.D.N.Y. where the
defendant admitted to running a scheme of
attempted extortion and extortion for ten years.
His entire docket was hidden for six years, with
no evidence of formality observed, but
importantly, when he got sentenced, thePage 45 government said there need be no restitution
because the victims were dead, criminals, or
unknown. The government had to know
perfectly well that the statute provides that
restitution is awardable to the representative of
a victim, too. It’s probably not irrelevant then to
note that Sheferofsky is, or was, Sater’s father,
and the dates on the closures of his docket
match the concealment of Sater’s.
• The other is United States v. Shereshevsky (no
relation), SDNY Docket No. 94-cr-248. On May
5, 1994, Shereshevsky was arraigned for bank
fraud, pled not guilty and was released on bail.
That was what the public docket reflected until,
June 26, 2002. The docket reflects that on that
date it was “entered” that eight years earlier, on
May 5, 1994 (viz. the same date as the docketed
not-guilty plea) Shereshevsky had actually pled
guilty to bank fraud. The Southern District
deliberately allowed false information to remain
on the public docket for eight years, a fraud on
the public.
Presumably, Shereshevsky was given the benefit
of secrecy because he was a cooperator, and
apparently got leniency – time served, two years
supervised release, and a restitution order off
$39,000. What did Shereshevsky do with himself
while “cooperating” with the government? He
perpetrated a multi-hundred million dollar
WexTrust Ponzi scheme.
One of the judges who, apparently, actively
falsified his docket, Michael Mukasey, went on
to become the Attorney General. On SeptemberPage 46 24, 2001, he issued a “speedy trial” ruling on the
docket, to keep up the false appearance that the
defendant had actually pled not guilty. (App. F
at 42).
REASONS FOR GRANTING THE WRIT
I.
The Integrity of the Federal Court System
Depends on This Court’s Confirming That
Lower Courts May no More Defy Binding
Precedent or Wrongfully Infringe Upon
Fundamental Rights Than They May Defy
Mandatory Sentencing or Similar Statutes
The factual history of this case is complex, but the
legal principles are not. Simply put, the Second Circuit
courts have seceded from the (juridical) union to form
their own state where the cooperator exception they
have invented of whole cloth trumps everything else,
including the enumerated and unenumerated
fundamental rights of liberty. And that is something
they cannot be permitted to do.
This case is not about judicial error. Indeed, taking
the word “error” literally, there may well be none.
What there is here, instead, is judicial defiance.
When a lower court decision conflicts with this
court’s binding precedent, ordinarily that’s “mere” error
and this court is not likely to grant a writ. But when
the conflict is so outside the norm of judicial decisionmaking that it requires intervention and review by this
court, that’s cert-worthy. And where, as in this case as
the record plainly shows, that great conflict, that great
deviation from the norm, is an intentional, blatant
disregard for that precedent then, petitioners submit,
this Court is compelled to act.Page 47 II.
A lower federal court’s core “inherent
power” does not include the power to
refuse to impose the lawful sentences
Congress mandates, including restitution
Of course, the lower federal courts have inherent
powers. But, save for a “core” subset, have long been
understood to be subject to Congressional override.Even that “core” exception proves petitioner’s point
here, because while Congress cannot interfere with the
ability of a lower court to decide a particular case, that
limitation does not apply at all to the authority of
Congress to set minimum sentences.
This Court held precisely, and unanimously, so a
century ago in the Killits case, Ex Parte United States,
242 U.S. 27 (1916): When a federal court refuses to
The Fourth Circuit explained in ACLU v. Holder, 673 F.3d (4th Cir. 2011) [citations and explanations omitted, emph. add.]:
The inherent power of…lower federal courts falls into
three…categories…[F]irst…core Article III power…the
ability of a lower federal court to decide a case over which
it has jurisdiction…once Congress has established lower
federal courts and provided jurisdiction over a given case,
Congress may not interfere with such courts by dictating
the result in a particular case…[S]econd…powers
“necessary to the exercise of all others”…these…are
deemed necessary to protect the efficient and orderly
administration of justice and…command respect for the
court’s orders, judgments, procedures, and
authority”…These…are subject to congressional
regulation…[T]hird…”those reasonably useful to achieve
justice”…Examples…”the power of a district court to
appoint an auditor to aid in litigation involving a complex
commercial matter”…Such are subject to congressional
regulation…Page 48 impose a mandatory sentence, it violates the law and
operates illegally. If there were any doubt that this
applies to a mandatory order of restitution, this Court
put that to rest in Dolan v. United States, 103 S.Ct.
2553 (2010), noting that when Congress said in the
restitution statute that such an order must be imposed
at sentencing notwithstanding any other provision of
law, 18 U.S.C. § 3663A, Congress meant it.
What about cooperator safety? Every filing by
respondent Sater and the government solemnly intones
that warning, arguing that the courts must hide all
this to keep Sater safe, even if, regrettably, he gets to
keep all the money he stole.
The reply must be, Where in Article III are federal
courts vested with police powers? Nowhere. And,
petitioners aver it to be common knowledge that, were
there even such a risk, the Federal Witness Protection
program has never lost a participant.
And frankly, the mere idea is simply nonsensical
that a felon like Felix Sater can assert a subjective
fear, decline witness protection, and as a result then be
allowed to evade restitution, keep the secret of his
conviction, and commit concealment frauds, again by
using that secrecy, and have the courts assert some
inherent power to protect him by enjoining even his
victims, those like petitioner’s clients, who found out
and would stop it.Page 49 III.
Lower courts’ “inherent power” cannot
include the power to defy binding
precedent; moreover, the issuance of a
purported non-precedential “summary
order” by a federal appeals court, as the
Second Circuit issuance here, is
unconstitutional
An elegant argument proving these points is in
Anastasoff v. United States, 223 F.3d 898, vacated en
banc, 215 F.3d 1024 (8th Cir. 2000) wherein a panel of
the Eighth Circuit, later reversed en banc held that a
federal appellate court’s issuance of non-precedential
decisions (summary orders) is unconstitutional.
Petitioners adopt it in its entirety.
IV.
Lower courts’ “inherent power” cannot
include the power to wrongfully infringe
upon enumerated or unenumerated rights
This, of all, is completely self-evident. And
therefore, petitioners submit respectfully, it was wrong
to deny them due process for all these years, both
procedural and, to the extent extant and not covered by
first amendment or other provisions, unenumerated
and thus substantive.
But as wrong as that was, and remains, it was even
more wrong to do that to the confederates of these
criminals, clueless as to the Brady violations that must
be rampant with undisclosed deals, and above all else
to the victims of these criminals, who have no voice
save that which the courts and the government are
tasked to give them. A mighty poor voice it is, indeed.Page 50 CONCLUSION
For all the foregoing reasons, it is most respectfully
requested that this petition for a writ of certiorari to
the United States Court of Appeals for the Second
Circuit be GRANTED.
Dated: November 3, Respectfully submitted,
Richard E. Lerner
Counsel of Record
THE LAW OFFICE OF
RICHARD E. LERNER, P.C.
1375 Broadway, 3rd Floor
New York, NY 917.584.347.824.2006 Fax
richardlerner@msn.com
Counsel for PetitionersPage 51 APPENDIXPage 52 i
TABLE OF CONTENTS
APPENDIX
Appendix A
Summary Order in the United
States Court of Appeals for the
Second Circuit
(June 5, 2014) . . . . . . . . . . . . . App.
Appendix B
Order in the United States District
Court, Eastern District of New York
(May 17, 2013) . . . . . . . . . . . . App.
Appendix C
Order in the United States District
Court, Eastern District of New York
(May 15, 2013) . . . . . . . . . . . App.
Appendix D
Order in the United States District
Court, Eastern District of New York
(March 13, 2013) . . . . . . . . . . App.
Appendix E
Transcript of Sentencing Before
the Honorable I. Leo Glasser
United States District Senior
Judge in the United States District
Court, Eastern District of New York
(October 23, 2009) . . . . . . . . . App.
Appendix F
Excerpts of Docket Entries
U.S. District Court Southern
District of New York (Foley
Square)
Criminal Docket for Case #:
1:94-cr-00248-CSH-1 . . . . . . App. 40Page 53 ii
Appendix G
Constitutional, Statutory and
Regulatory Provisions . . . . . App.
Appendix H
Letter from Jeffrey Lichtman to
Eric O. Corngold in No. 00 CR (ILG)
(October 10, 2000) . . . . . . . . . App.
Appendix I
Letter [Excerpt] from the U.S.
Department of Justice to Lawrence
Ray in No. 00-196 (ILG)
(November 20, 2001) . . . . . . . App.
Appendix J
Transcript of Sentencing [Excerpt]
in the United States District Court
for the Eastern District of New
York in CR-98-(February 5, 2004) . . . . . . . . App.
Appendix K
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 00-CR-1005 (NGG)
(June 20, 2006) . . . . . . . . . . . App.
Appendix L
Transcript of Criminal Cause for
Sentencing [Excerpt] in the United
States District Court for the
Eastern District of New York in 04CR-234 (CBA)
(January 11, 2008) . . . . . . . . App. 81Page 54 iii
Appendix M
Transcript of Motion Hearing
[Excerpt] in the United States
District Court for the Eastern
District of New York in 98-CR-(June 14, 2010) . . . . . . . . . . . App.
Appendix N
Transcript of Oral Argument
[Excerpt] in the United States
District Court for the Eastern
District of New York in CV 98-(July 20, 2010) . . . . . . . . . . . App.
Appendix O
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App.
Appendix P
Letter (with attachment) from
Morgan, Lewis & Bockius LLP to
Judge Glasser in 98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App.
Appendix Q
Amendment
to Stipulated
Standstill Order in the United
States District Court for the
Eastern District of New York in CR 1101 (ILG)
(September 27, 2010) . . . . . App.
Appendix R
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(November 16, 2010) . . . . . . App. 114Page 55 iv
Appendix S
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 03cr(November 17, 2010) . . . . . . App.
Appendix T
Brief for the United States
[Excerpt] in the United States
Court of Appeals for the Second
Circuit, No. 11-1957, United States
of America v. Gushlak
(May 8, 2012) . . . . . . . . . . . App.
Appendix U
Letter from the U.S. Department of
Justice to Judge Glasser in No. CR 1101 (ILG)
(November 23, 2010) . . . . . . App.
Appendix V
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(March 17, 2011) . . . . . . . . . App.
Appendix W
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 98-CR-(April 1, 2011) . . . . . . . . . . . App.
Appendix X
Letter [Excerpt] from Wilson,
Elser, Moskowitz, Edelman &
Dicker LLP to Judge Cogan in No.
98 CR 1101 (ILG)
(April 4, 2011) . . . . . . . . . . . App. 138Page 56 v
Appendix Y
Order in the United States District
Court for the Eastern District of
New York in 98-CR-(April 4, 2011) . . . . . . . . . . . App.
Appendix Z
Order in the United States District
Court for the Eastern District of
New York in 98-CR-(January 26, 2012) . . . . . . . App.
Appendix AA
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(January 26, 2012) . . . . . . . App.
Appendix AB
Order in the United States District
Court for the Eastern District of
New York in 98-CR-(February 2, 2012) . . . . . . . App.
Appendix AC
Letter from the Solicitor General to
the Supreme Court of the United
States
(March 19, 2013) . . . . . . . . . App.
Appendix AD
Email from Todd Kaminsky
(March 28, 2013) . . . . . . . . . App.
Appendix AE
Complaint [Excerpt] in the
Supreme Court of the State of New
York County of New York . App. 159Page 57 vi
Appendix AF
Movant John Doe’s Supplemental
Memorandum of Law in Further
Support of Permanent Injunction
[Excerpt] in the United States
District Court Eastern District of
New York . . . . . . . . . . . . . . App.
Appendix AG
Public Records [Excerpt] in U.S. v.
Coppa 00-CR-196 (EDNY) . App.
Appendix AH
The Scorpion and the Frog
[Excerpt] . . . . . . . . . . . . . . . App. SEALED APPENDIX
Appendix AI
Memorandum and Order in the
United States District Court,
Eastern District of New York (filed
under seal)
(March 14, 2013) . . . . . . . . . App.
Appendix AJ
Letter [Excerpt] from Beys, Stein
& Mobargha LLP to Judge Cogan
(August 2, 2012) . . . . . . . . . App.
Appendix AK
Transcript [Excerpt] in the United
States Court of Appeals for the
Second Circuit
(February 14, 2011) . . . . . . App. 207Page 58 App.
APPENDIX A
13-2373-cv
In re: Applications to Unseal
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
No. 13-2373-cv
[Filed June 5, 2014]
______________________________________
IN RE APPLICATIONS TO UNSEAL
98 CR 1101 (ILG), USA V. JOHN DOE
98-CR-------------------------------LORIENTON N.A. PALMER,
FREDERICK MARTIN OBERLANDER,
)
)
)
)
)
)
)
Movants-Appellants,
)
)
-v.)
)
)
JOHN DOE 98-CR-01101,
UNITED STATES OF AMERICA,
)
)
Respondents-Appellees.
)
______________________________________ )
SUMMARY ORDER
Rulings by summary order do not have precedential
effect. Citation to a summary order filed on or after
January 1, 2007, is permitted and is governed by
Federal Rule of Appellate Procedure 32.1 and thisPage 59 App. court’s Local Rule 32.1.1. When citing a summary order
in a document filed with this court, a party must cite
either the Federal Appendix or an electronic database
(with the notation “summary order”). A party citing a
summary order must serve a copy of it on any party not
represented by counsel.
At a stated term of the United States Court of
Appeals for the Second Circuit, held at the Thurgood
Marshall United States Courthouse, 40 Foley Square,
in the City of New York, on the 5th day of June, two
thousand fourteen.
PRESENT:
JOSÉ A. CABRANES,
ROSEMARY S. POOLER,
DENNY CHIN,
Circuit Judges.
FOR MOVANTS-APPELLANTS:
FREDERICK M. OBERLANDER (Richard E. Lerner,
Law Office of Richard E. Lerner, P.C., New York,
NY, on the brief), Montauk, NY.
FOR RESPONDENTS-APPELLEES:
EVAN M. NORRIS (Todd Kaminsky, Peter A. Norling,
Elizabeth Kramer, on the brief), Assistant United
States Attorneys, for Loretta E. Lynch, United
States Attorney for the Eastern District of New
York, Brooklyn, NY.
Jason H. Berland, Beys, Stein & Morbargha LLP,
New York, NY.
Appeal from orders, entered March 15, 2013, May
15, 2013, and May 17, 2013, of the United StatesPage 60 App. District Court for the Eastern District of New York (I.
Leo Glasser, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY
ORDERED, ADJUDGED, AND DECREED that the
orders of the District Court are AFFIRMED.
Movants seek the unsealing of certain documents
relating to the cooperation of Felix Sater (formerly
known publicly only as “John Doe”) in a number of
criminal cases. This matter has already been before us
twice. See Roe v. United States, 428 F. App’x 60 (2d Cir.
2011); Roe v. United States, 414 F. App’x 327 (2d Cir.
2011). We assume the parties’ familiarity with the
underlying facts, procedural history, and issues for
review, to which we refer only as necessary to explain
our decision.
DISCUSSION
The Supreme Court has held that judicial
proceedings are presumptively open under the First
Amendment. See Richmond Newspapers, Inc. v.
Virginia, 448 U.S. 555, 573 (1980). It has also
recognized a common-law right of presumptive access
to judicial records and documents. See Nixon v. Warner
Commc’ns, Inc., 435 U.S. 589, 597 (1978). This right of
access is, of course, qualified, and documents may be
sealed in some cases. We have held, however, that
“[d]ocuments to which the public has a qualified right
of access may be sealed only if ‘specific, on the record
findings are made demonstrating that closure is
essential to preserve higher values and is narrowly
tailored to serve that interest.’” United States v. Aref,
533 F.3d 72, 82 (2d Cir. 2008) (quoting Press-Enter. Co.
v. Super. Ct., 478 U.S. 1, 13–14 (1986)). Such findingsPage 61 App. must be made “on the record for our review,” but “may
be entered under seal, if appropriate.” Id. (internal
quotation marks omitted).
After we last heard this case, our summary order
remanded to the District Court “with instructions (i) to
rule upon the government’s [then-pending] unsealing
motion of March 17, 2011,” and “(ii) to issue a final
determination regarding whether the dissemination of
the other (non-PSR) sealed documents in John Doe’s
criminal case, particularly those that refer to Doe’s
cooperation, should be enjoined.” Roe, 428 F. App’x at
68–69.
That procedure was ultimately modified when the
Clerk’s Office in the Eastern District of New York
inadvertently unsealed the docket sheet, revealing that
Sater was “John Doe” and a cooperator. Judge Glasser
then held a series of hearings, with only the
Government and Sater’s counsel present, and went
through the entire docket to determine which
documents should be unsealed. Thereafter, he issued
two orders—one sealed, one unsealed—detailing which
documents were to be kept sealed.
Movants first object that they were not allowed to
attend these proceedings, although they were parties to
the case. See Aref, 533 F.3d at 81 (holding that “a
motion to intervene to assert the public’s First
Amendment right of access to criminal proceedings is
proper”). This argument fails. Judge Glasser’s sealed
order is persuasive in concluding that the hearings
should be closed, because the contents of the documents
on their face implicate compelling interests. We have
expressly held that judicial findings justifying sealing
may be entered under seal. See Aref, 533 F.3d at 82.Page 62 App. Moreover, it appears from the docket sheet that
Movants informed the District Court of their views in
written submissions. See, e.g., E.D.N.Y. No. 12-mc-150,
dkt. 97.
Movants next challenge the District Court’s
determination that a number of documents
(approximately 25% of them) would remain under seal,
in whole or in part. Judge Glasser’s sealed order lays
out the District Court’s basis for ongoing
sealing—generally, safety of persons or property;
integrity of government investigation and law
enforcement interests; and protection of cooperator’s
anonymity.
As a general matter, “[b]road and general findings
by the trial court . . . are not sufficient to justify
closure.” Matter of New York Times Co., 828 F.2d 110,
116 (2d Cir. 1987). And any such sealing must be
narrowly tailored. See Aref, 533 F.3d at 82 (“[I]t is the
responsibility of the district court to ensure that
sealing documents to which the public has a First
Amendment right is no broader than necessary.”).
Here, the District Court laid out each document
that was to remain sealed in a series of tables and
noted for each the basis for continued sealing. Where
possible, it limited the sealing to redactions on certain
pages. We have reviewed the District Court’s sealed
order. Given the extent and gravity of Sater’s
cooperation, we conclude that these findings are
sufficient.Page 63 App. CONCLUSION
We have reviewed the record and considered
plaintiffs’ remaining arguments on appeal, and find
them to be without merit. For the reasons set out
above, we AFFIRM the District Court’s March 15,
2013, May 15, 2013, and May 17, 2013, orders.
This panel shall retain jurisdiction over any further
appeals from proceedings in the District Court.
The mandate shall issue forthwith.
FOR THE COURT,
Catherine O’Hagan Wolfe, Clerk of CourtPage 64 App.
APPENDIX B
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
12 MC 150 (ILG)
[Filed May 17, 2013]
______________________________
In the Matter of the Motion to )
Unseal Docket No. 98-)
_____________________________ )
ORDER
GLASSER, United States District Judge:
On May 15, 2013, the Court received via facsimile
from The Law Office of Richard E. Lerner, P.C., a five
page letter which, in bold type, is introduced with these
centered legends:
Request for Emergency Prerogative Quo Warranto
Relief From Prior Restraint With Respect to the Order
Docketed on March 13, That This Court Show Cause By What Authority It
Believes, If It Believes, It Has Lawfully Concealed
Said Judicial Document From the Public and
Enjoined Its Dissemination by Those Who Have It
He then begins as follows: “We write in receipt of a
May 8, 2013 letter from the U.S. Supreme Court
requiring (emphasis mine) we seek clarification from
your honor with respect to the March 13, 2013 order on
docket 12-MC-150 (No. 105) which the Supreme CourtPage 65 App. calls “apparently” sealed. The letter triggers a
jurisdictional fifteen days therefrom to obtain
clarification. We seek emergency relief from a certain
portion of the March 13th Order insofar as it unlawfully
(ultra vires) or invalidly (unconstitutionally) bears the
legend ‘FILED UNDER SEAL.”’ The letter was not
filed on ECF because, as he announces at the outset in
bold type, that he has not done so “so the court may
confirm the entirety of its contents is public property
and must be publicly uploaded without redaction
immediately.” His letter will be docketed and thus be
made available to the public. I will not venture to
summarize the letter or comment on its accusatory
tenor, e.g., “The court’s failure to follow the law . . . ” at
p. 4; his reservation of “the right to supplement this,
and invite the media, members of the public and Mr.
Sater’s many victims to join this application, at p. 5; his
reminder to the Court, the government and Mr. Sater
of 18 U.S.C. § 1505 which, in substance, makes it
unlawful to obstruct or impede any Congressional
inquiry on investigation, p. 3 n.3. The irrelevance of his
“reservation” and “reminder” ostensibly prompted by a
letter from the Clerk of the Supreme Court resonate
with a sinister ring.
Discussion
The May 8th letter from the Clerk of the Supreme
Court regards Lerner’s “petition for rehearing in this
case” and is attached as an Exhibit to the government’s
letter in Opposition, Docket No. 119. It reads in part:
On pages 4-7 of that petition, you quote from
a March 14, 2013, order from the United States
District Court for the Eastern District of New
York. Because the first page of that order clearlyPage 66 App. reflects it is under seal, it would appear that the
rehearing petition cannot be filed on the public
record. If you wish to file the petition, you may
ask the lower court to unseal those portions, or
you may file a motion for leave to file the
petition under seal with a redacted copy for the
public record.
Your rehearing petition will be deemed
timely if you take the corrective action within days of this letter. Rule 44.6.
It plainly does not require him to “seek clarification”
of my order of March 13th. It explicitly advises him how
to proceed. It does not characterize that Order as
“apparently” sealed. It “clearly reflects it is under seal.”
His “Request” addressed to this Court in his May 15th
submission is a misrepresentation of that letter. The
emergency relief he seeks, he candidly states, is to have
that order declared unlawful or unconstitutional and
uses the Clerk of the Court’s letter as a pretext for yet
another attack on this Court’s Orders. His “Request” is
denied.
I would also note that his request for Emergency
Quo Warranto relief is misguided. As long ago as 1820,
Chief Justice Marshall wrote that “a writ of quo
warranto could not be maintained except at the
instance of the government, and as the writ was issued
by a private individual without the authority of the
government it could not be sustained . . . . ” Wallace v.
Anderson, 18 U.S. 291, 292 (1820). See also Johnson v.
Manhattan Ry Co., et al., 289 U.S. 479, 502 (1933),
where the Court wrote “Quo Warranto is addressed to
preventing a continued exercise of authority unlawfully
asserted, not to a correction of what already has beenPage 67 App. done under it or to a vindication of private rights. It is
an extraordinary proceeding, prerogative in nature,
and in this instance could have been brought by the
United States, and by it only, for there is no statute
delegating to an individual the right to resort to it.”;
Allah v. Linde, 2008 WL 1699441 (W.S. Wash.) (“Under
federal law, it appears that a quo warranto proceeding
can be brought only by the United States, and not by
private individuals.”)
I confess to being confounded as to how to respond
to his request that I show cause by what authority I
assume the right to issue Orders in this case. Perhaps
Article III of the United States Constitution is a
responsive start. In addition, I would incorporate by
reference, my Orders, docketed in 12 MC 150 and
numbered, 42, 62, 104, 106, 109 and 118, in response.
I would also add a few lines written by Judge Newman
in In re Application of the Herald Company, 734 F.3d
93, 100 (2d Cir. 1984) as follows: “The trial judge must
articulate the basis for appellate review. If such
articulation would itself reveal information entitled to
remain confidential, the basis for closure may be set
forth in a sealed portion of the record.” Reliance on that
teaching was placed in docket no. 106, my Order of
March 13, 2013.
SO ORDERED.
Dated:
Brooklyn, New York
May 17, /s/
I. Leo GlasserPage 68 App.
APPENDIX C
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
12 MC 150 (ILG)
[Filed May 15, 2013]
______________________________
In the Matter of the Motion to )
Unseal Docket No. 98-)
_____________________________ )
ORDER
GLASSER, United States District Judge:
In a letter dated March 27th, 2013, Docket No. 108,
Frederick Oberlander and intervenor Lorienton Palmer
requested the Court to docket the sealed Memorandum
and Order (M&O) of March 15, 2013, mistakenly
referenced the “March 14 Order” and for permission to
move for a reconsideration of that M&O within 14 days
thereafter pursuant to Local Rule 6.3, mistakenly
referred to as 16.3. In an Order issued the following
day, March 28, 2013, learning that the sealed M&O,
Docket No. 106, was inadvertently sealed, it was
unsealed and the requested enlargement was granted,
Docket No. 109.
In a letter dated April 11, 2013, Docket No. 110,
which the movants requested partially sealed, they
requested an additional enlargement to file their
motion for reconsideration which the Court granted,
Docket No. 112.Page 69 App. Local Rule 6.3 of the United States District Courts
for the Southern and Eastern Districts of New York
captioned “Motions for Reconsideration or
Reargument,” provides in relevant part:
There shall be served with the Notice of Motion
a memorandum setting forth concisely the
matters or controlling decisions which counsel
believes the Court has overlooked. (emphasis
mine).
On April 19, 2013, a nineteen page Joint Motion for
Reconsideration was filed, Docket No. 113.1 That
submission contains not a sentence, a word or even a
syllable which smacks of a matter or controlling
decision which counsel doesn’t even purport to believe
the Court overlooked to require reconsideration of its
March 15, 2013 Memorandum and Order.
In a letter response dated April 26, 2013, Docket
No. 115, to their motion to reconsider, the government
opposed it for essentially the same reasons.
Having made reference to the relevant Local Rule
and blatantly ignored it, they manifest as well an
indifference to the certification required by Rule
11(b)(1), Fed. R. Civ. P., that their motion was not
presented “for any improper purpose.” Their “Joint
Motion to Reconsider” is a transparent pretext for
airing, yet again, arguments they have repeatedly
On April 22, 2013, they filed a corrected version of their joint
motion which they represented made no substantive changes but
merely fixed typographical errors and added or removed a few
words. This version is docketed as #114-2. Page references made
infra are to the pages in the corrected version.Page 70 App. made and scurrilous charges they have leveled at
judges, courts, prosecutors and other lawyers. Those
include, for example, “discussion must be made of the
intellectually dishonest EDNY history of attempting to
restrain the speech of the ‘little people’ who don’t buy
info by the barrel, most infamously in the context of
Zyprexa,” at p. 5; referring to the opinion in Zyprexa,“we assume the court knew perfectly well what was the
law and what it was doing and made a bet that the
individuals whose civil rights it was violating wouldn’t
or couldn’t, pay to appeal. That’s intellectual
dishonesty. Or judicial hubris. Either works.” at p. 6-7,
“We assert that U.S. v Doe, the 1995 2d Circuit case
around which too many judges in this district seems to
have built a cottage industry of sealing whatever the
government or cooperator wants on the mere
‘possibility’ of a threat is unconstitutional per se.” at
p. 10; this Court “illegally hid a felony conviction” at
p. 9.
The tenor of that submission and of countless others
to which the few excerpts above give barely a hint,
magnify the failure to obey the Local Rule and require,
if not compel, that their Joint Motion be and it is,
hereby denied. Their Joint Motion also respectfully
demands (emphasis mine), that the caption to case
numbered 98 CR 1101 (ILG) be changed to read United
States v. Felix Sater, instead of v. John Doe. To that
extent only, their motion is granted. Referring to Sater
No citation is provided to this case nor is the “court” named. I
provide just one citation in the body of which the history of that
litigation is given as “Appendix B, History of the Zyprexa Products
Liability Litigation, Case No. 04-MD-1596.” In re Zyprexa Products
Litigation, 260 FRD 13 (E.D.N.Y. August 17, 2009) (Weinstein, J).Page 71 App. as “John Doe” no longer serves any useful purpose
since his role as the defendant in this case is now a
matter of public record. The Clerk of Court is to make
the necessary change accordingly.
In a letter dated May 10th, but not filed until
May 13th, Docket No. 117, the movants “request a one
week extension of time to reply to the government’s
letter of April 26th.” The government’s letter is plainly
a mirror reflection of my denial of their motion and to
which a reply is neither wanted nor warranted. Their
request is denied.
SO ORDERED.
Dated:
Brooklyn, New York
May 15, /s/
I. Leo GlasserPage 72 App.
APPENDIX D
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
12 MC 150 (ILG)
[Filed March 13, 2013]
______________________________
In the Matter of the Motion to )
Unseal Docket No. 98-)
_____________________________ )
ORDER
GLASSER, United States District Judge:
In an Opinion and Order dated August 27, 2012,
Dkt. No. 42, familiarity with which is assumed, the
Court granted a motion to unseal the docket sheet only
in 98 CR 1101 and directed that a hearing will be held
thereafter on October 2, 2012 to determine whether
any document sealed and filed in that case should be
unsealed. A request by the government to adjourn that
hearing until October 9, 2012 was granted. At the
hearing held that day, I stated my belief that I was
obedient to the law in having notice of that hearing
docketed and the hearing itself open to the public. I
then stated that my determination of which documents
may remain sealed and which may be unsealed can
only be made upon a review of those documents. Given
my familiarity with this case, I found a substantial
probability of prejudice to the compelling interest that
inheres those documents that can only be protected by
a review of them in a closed courtroom. I stated thosePage 73 App. compelling interests to be, among other things, the risk
of harm to the defendant; the integrity of government
activity sufficient to trump the public’s common law
and First Amendment right of access to the Court. See
In re Herald, 734 F.2d 93, 100 (2d Cir. 1984); United
States v. Haller, 837 F.2d 84, 88 (2d Cir. 1988). I then
declared the proceedings to be closed and the
courtroom to be vacated. Hr’g Tr. 5-6, Oct. 9, 2012.
Hearings were subsequently held in camera on that
day, i.e., October 9th, 23rd, November 16th, 2012,
January 18th and on a conference call on the 14th, 2013.
Present at those hearings were counsel for Felix Sater
(John Doe) and the United States. It was their burden
to establish that there were compelling interests that
superseded the general common law and qualified First
Amendment right of access to those documents.
At the conclusion of those hearings, the Court finds
that their burden was not carried as regards the
following docket numbered documents which are
hereby directed to be unsealed in their entirety: 1, 2, 58, 10, 11, 13-15, 17, 18-25, 29-35, 37-39, 41-49, 51- 56,
58-61, 65-67, 69-75, 77, 78, 81-86, 89-99, 101-108, 110,
111, 113, 114, 116, 117, 120, 123-126, 128-131, 133-136,
139, 140, 143-152, 155-157, 159-168, 174-184, 186-190,
193, 198, 200-201.
The Court finds that the required burden of proof
was satisfied as regards the docket numbered
documents not included in those listed above and
should remain sealed in their entirety or remain sealed
as redacted. A Memorandum and Order providing the
bases for those findings, together with the documents
at issue and the sealed transcripts of the in camera
proceedings at which those findings were made willPage 74 App. remain sealed and submitted to the Court of Appeals
for review and determination.
SO ORDERED.
Dated:
Brooklyn, New York
March 12, /s/
I. Leo GlasserPage 75 App.
APPENDIX E
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CR-98-[Dated October 23, 2009]
_________________________________
UNITED STATES OF AMERICA, )
)
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant.
)
________________________________ )
United States Courthouse
Brooklyn, New York
October 23, 10:00 a.m.
TRANSCRIPT OF SENTENCING
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT SENIOR JUDGEPage 76 App. APPEARANCES:
For the Plaintiff:
BENTON J. CAMPBELL, ESQ.
United States Attorney
BY: TODD KAMINSKY, ESQ.
MARSHALL MILLER, ESQ.
Assistant United States Attorneys
For the Defendant:
KELLY MOORE, ESQ.
LESLIE CALDWELL, ESQ.
Court Reporter:
FREDERICK R. GUERINO, C.S.R.
225 Cadman Plaza East
Brooklyn, New York
718-330-Proceedings recorded by mechanical stenography,
transcript produced by CAT.
[p.2]
THE COURT CLERK: Criminal cause for
sentencing, docket number 98-CR-1101, United States
v. John Doe.
Counsel, please approach and state your name for
the record.
MR. KAMINSKY: For the United States, Todd
Kaminsky and Marshall Miller.
Good morning, your Honor.
THE COURT: Good morning.Page 77 App. MS. CALDWELL: Your Honor, for Mr. Slater, Leslie
Caldwell and Kelly Moore.
THE COURT: Good morning.
MR. KAMINSKY: We are joined by probation officer
Michelle Espinoza.
MS. ESPINOZA: Good morning, your Honor.
THE COURT: Are you ready to proceed?
MR. KAMINSKY: Yes, Your Honor.
MS. CALDWELL: Yes, your Honor.
THE COURT: Have you reviewed the presentence
report with your client?
MS. CALDWELL: Ms. Moore will address the issues
on the presentence report.
THE COURT: You took some exception to some
aspects of the presentence report. Why don’t we dispose
of that first.
MS. MOORE: Yes, Your Honor.
[p.3]
THE COURT: I think for the most part the
probation department was in agreement with your
observations. I think we start at paragraph 110. should be changed to 20.
MS. ESPINOZA: Yes, Your Honor.
THE COURT: And in paragraph 115, 37 should be
changed to 34.
MS. ESPINOZA: Correct.Page 78 App. 34.
THE COURT: Paragraph 117, 41 should now read
Paragraph 121, 45 should read 38.
MS. ESPINOZA: Yes, your Honor.
THE COURT: Paragraph 123 should now read instead of 0; paragraph 125 becomes 2 instead of 1;
paragraph 126 becomes 38; paragraph 128 becomes 40;
130 becomes 37; and 192 should read 37 on the first
line and 262 to 327 on the second line. On paragraph
201, the range should range from 20 instead of 25.
MS. ESPINOZA: Correct, your Honor.
THE COURT: I think that was all of it.
MS. MOORE: That’s right, your Honor.
THE COURT: I take it you received a
communication that I found on my desk this morning.
MS. CALDWELL: Yes, Your Honor. We received
that yesterday.
THE COURT: You want to be heard?
MS. CALDWELL: Yes, Your Honor. I will start with
[p.4]
that, since the court raised the issue.
Mr. Slater a couple of weeks ago was out with his
wife at a restaurant and had a little too much to drink
and was driving home. Mr. Slater realized that he had
too much to drink and pulled over into a park and was
actually sitting in his car. We have the police reports,
which we could provide to the court, if you like. He wasPage 79 App. sitting in his car with the engine running, but parked,
thinking that if he sat for half an hour or an hour he
would be able to drive again. He was only a couple of
miles from his home. The police officer asked him to get
out of the car, which he did, and he failed the field
sobriety test. I believe he tested .9 and .829 was the
state limit. That case is pending in Nassau County. We
really don’t think that case has any bearing on this
case or should have any bearing on this case, in light of
all of the other circumstances of this case, which I
would like to address now.
THE COURT: Go ahead.
MS. CALDWELL: Unless the court has any
questions about the DWI.
THE COURT: Does the government want to
comment in it now?
MR. KAMINSKY: No, Your Honor, other than the
fact that we think this incident, while unfortunate,
does not reflect in any way the extraordinary
cooperation Mr. Slater
[p.5]
provided starting in 1998 and continuing nearly up to
the present day.
THE COURT: All right.
MS. CALDWELL: Felix Slater was really a selfmade man, as you know from the presentence report
and letters. He was an immigrant from Russia. He
worked his way to Wall Street where he was very
successful. He was a young man who was working at
several at the time name brand brokerage firms,Page 80 App. including Shearson Lehman, until one unfortunate
night in 1991, at age 25, he went to a bar, had too much
to drink, and got into an altercation with another
person. The other person suffered. Mr. Slater hit that
the other person, and that impulsive act resulted in a
criminal conviction for Mr. Slater. That had a cascade
of consequences for him. He lost his Series 7 brokerage
license. As a convicted felon, he was not really able to
get legitimate work. He was in need of money. He was
married and had a young child. He foolishly connected
with some friends from his boyhood who were operating
a securities brokerage firm.
As the court will recall in the mid-‘90s there were a
lot of pump-and-dump type brokerage firms, and Mr.
Slater foolishly connected with those individuals. He
left that business in 1996 of his own accord. He has not
engaged in criminal activity since 1996.
Mr. Slater was working in Russia when in 1998 the
[p.6]
New York City Police Department happened to stumble
upon a mini storage box that contained a cash of
documents, all described in the government’s letter,
that were linked to Mr. Slater. Again, this was not an
investigation that was pending or ongoing. There were
no charges brought. This was a box of documents, to
use the government’s word, “indecipherable,” but
connected to Mr. Slater.
Mr. Slater was in Russia working as a consultant
for AT&T at the time and heard that the F.B.I. was
looking for him. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxPage 81 App. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Mr. Slater provided, flew to the United States to
surrender to F.B.I. he began to cooperate, pled guilty in
1998, and he’s been cooperating ever since.
[p.7]
His cooperation has included the type of cooperation
that the court often sees which is against traditional
criminals, including people who worked at the
brokerage firm where Mr. Slater worked. Again, he
surrendered in 1998. No one had yet been prosecuted
in connection with the State Street brokerage firm
where he worked. But the government was able to
prosecute more than 19 people at various levels of that
operation, ranging from the brokers, to the people who
were transferring money, xxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxf that operation ranging from the brokers to
the people His cooperation has included the type of
cooperation that the court often sees which is against
traditional criminals including people who worked at
the brokerage firm where Mr. Slater worked. Again he
surrendered in 1998. No one had yet been prosecuted
in connection with the State Street brokerage firm
where he worked. But the government was able to
prosecute more than 19 people at various levels
[p.8]
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxPage 82 App. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxx
in
The government describes Mr. Slater’s cooperation
[p.9]
their letter as exemplary. He has worked with several
F.B.I. agents over the years. Four of those agents are
here in court today, and I understand, if the court
permits, at least one of them will address the court.
The government also says that Mr. Slater’s
cooperation was above and beyond what could be
expected of a cooperating defendant. If it is, that’s an
understatement, but Mr. Slater is somebody who
cooperated for ten years, your Honor. He’s somebody
whose life has changed dramatically since 1996. He is
somebody who legally turned his life around. He made
a stupid mistake in a bar fight, and again that had a
ripple effect which caused him to make another stupid
mistake. But really since 1996 he has been working
legitimate jobs, cooperating since 1998 with the
government. He has a very stable and healthy family
life, and his wife, his mother, and sister are all present
in court here today with him and are very supportive of
him. He has three young school-aged daughters who
he’s very dedicated to.
This is an individual who really has turned his life
around. You have the letters from his Rabbi describing
his involvement with the community, and we reallyPage 83 App. think, you know, I’m hesitant to use the word in the
context of a criminal sentencing, I’m hesitant to use the
word “redemption,” but I think it fits Mr. Slater. I
think he has redeemed himself. He has made many,
many amends over the
[p.10]
last 13 years -- excuse me, the last eleven years since
he’s cooperating. He’s not going to - notwithstanding
the DWI incident - he’s not going to appear before this
court or any other court again in the context of a
criminal case.
We understand that to ask for a sentence of no jail
term and no probation is extraordinary, but we think
it is warranted in this case where Mr. Slater really has
been under a sort of defacto probation for the last ten
years. As he has worked very closely with the F.B.I.
agents, the government has not seen it necessary to
impose any kind of restrictions or conditions on Mr.
Slater over the last ten years. He has been traveling
freely and does travel to Russia in connection with the
real estate business he’s involved in, and the
government has not imposed any reporting
requirement on him over those last ten years.
THE COURT: You have to slow down a little bit for
the arms of our court reporter.
MS. CALDWELL: As I always did before.
In any event, your Honor, I think Mr. Slater is
really deserving of the full measure of leniency that
this court can impose, given the extraordinary
circumstances of his cooperation and the fact he hasPage 84 App. really rehabilitated himself in these last -- really since
1996. Thank you.
THE COURT: Mr. Kaminsky or Mr. Miller.
MR. KAMINSKY: I will address the court first.
[p.11]
While the underlying criminal conduct involved was
serious and real, I don’t think there’s any question that
Mr. Slater has prevented far more financial fraud than
he has caused. In a moment, your Honor, if the court
permits, I would like to ask Special Agent Leo Taddeo
to address the court. He is a senior F.B.I. agent who
first worked with Mr. Slater. What he could tell you
and what he will tell you is that Mr. Slater was really
the F.B.I.’s entry into the types of financial frauds that
were being perpetrated at the time in the mid to late
‘90s the criminal financial wizards were one step ahead
of law enforcement, and literally that was until Felix
Slater cooperated with the F.B.I.
The 19 other defendants in the United States v.
Coppa case that came before your Honor is certainly
the most concrete form of that. But far and beyond
those 19 defendants, Felix Slater explained to the
F.B.I. how these schemes operated. And then there are
instances far too numerous to mention in a 5K letter,
but they would take any given investigation they were
looking into at the time, bring it in front of Felix Slater,
and he would explain to them what was going on. He
clearly illuminated and elicited information to them
which brought countless arrests and halted the fraud
at the time. That would be enough, your Honor, for us
to stand here and tell you that Felix Slater went above
and beyond, but that was only the beginning.Page 85 App. [p.12]
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Time and time again all agents here, and numerous
others who couldn’t be here today, have told the
government Felix Slater was one of the best
cooperators we worked with. There was nothing he
wouldn’t do. No task was too big. He was really helpful
and was the key to open a hundred different doors that
they couldn’t open prior to that time.
[p.13]
So, your Honor, if the court permits, at this time I
would like to ask Special Agent Leo Taddeo, who from
the inception worked with Felix Slater, address the
court and tell you about that experience.
THE COURT: All right. Let him come up.
A VOICE: Good morning, your Honor.
THE COURT: Good morning.
State your name.
A VOICE: Leo Taddeo. I’m the Assistant Special
Agent in the City of Baltimore’s Field Office.
Good morning, your Honor. First I would like to
corroborate and confirm the 5K letter and statements
made by Mr. Kaminsky and add a view observations, if
I could.Page 86 App. I worked with Mr. Slater from the outset of this
stock fraud investigation and he was the epitome of
professionalism in our efforts to not only uncover the
scheme, but all of the different individuals involved. He
answered every single phone call I made to him. He
answered every question honestly. He did his best to be
truthful and not exaggerate. A person in his situation
would have easily believed that he could get more favor
from the F.B.I. by making a bigger story than what was
already apparent, but he didn’t exaggerate or try to
make himself anymore important than he already was.
I also observed his interaction with his family and
[p.14]
other individuals, and I can say he’s a dedicated family
man and actually a pleasure to work with.
In terms of the effects of his cooperation, in addition
to what is in the 5K letter, I just want to add in the
mid-‘90s, the F.B.I. was facing the probability of seeing
organized crime on Wall Street, but not being able to do
much about it. And given between success and failure
for us is often an effective cooperating witness. Felix
Slater was that cooperating witness.
THE COURT: He had Frank Coppa at one point,
too.
AGENT TADDEO: Your Honor? Your Honor, he
was instrumental bringing Frank Coppa in, and as a
result of his cooperation, caused further damage to the
Bonnano family. Without his cooperation, it would have
been a few more years where the F.B.I. would have
effectively removed La Cosa Nostra from the penny
stock business. And I would easily credit Felix not onlyPage 87 App. his efforts, but the cascading efforts of bringing other
witnesses in to basically eliminate the threat on Wall
Street.
Once again, I know he worked with other agents,
and I heard nothing but similar comments from them
about the nature of his cooperation and his personality
and professionalism, and I’m here today on his behalf.
I hope that his family can get on with their lives, and
he can go on to be prosperous and a good dad and
husband. I know he is.
[p.15]
Those are my comments, your Honor.
I’m happy to answer any questions.
THE COURT: Thank you. Mr. Miller.
MR. MILLER: Your Honor, I don’t want to try the
court’s patience by repeating what has already been
said by Ms. Caldwell, Mr. Kaminsky, and Agent
Taddeo, but I did want to underline two things. One
was Mr. Slater’s cooperation to the office and the many
investigations he participated in. The length of his
cooperation is extraordinary. And I wanted to be here
to express from the office’s perspective just how capable
a cooperator he was, how important a cooperator he
was, and how effective he was.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
So those are the two points I wanted to make.
THE COURT: All right.Page 88 App. Mr. Slater, what would you like to say to me this
morning?
THE DEFENDANT: I have been writing what I am
going
[p.16]
to say for eleven years, but I don’t want to read it.
I’m not proud of what I have done. I felt I was
trapped at the time I agreed to do it. I had a bar fight,
went to jail which something I never thought I would
ever do nobody ever thought I would go to jail for a bar
fight. I had to find money for an appeal that my lawyer
was trying to file and I didn’t have a job. I had a fourmonth-old daughter at that moment, legal bills
mounting, personal bills, and a childhood acquaintance
approached me with this scheme, which I subsequently
pled guilty to in front of your Honor.
THE COURT: Is that Clarkson?
THE DEFENDANT: Yes. Prior to that I never had
any run-ins with the law. I worked with very legitimate
firms, very honest. I had one complaint in the entire
time I worked on Wall Street prior to my criminal
activity.
During the two and a half years that I was involved
in this activity, I spent a year of those in jail. I hated
myself, despised myself for doing the things I was
doing while I was doing them, because my parents did
not sacrifice what they sacrificed to have me come to
this country and become a criminal. The acts that I
committed were despicable. They just weren’t financial
fraud. I took ability and opportunity and flushed themPage 89 App. down the toilet. The bar fight and the acts that I took
afterwards are not a
[p.17]
justification. I’m just merely trying to explain the
circumstances under which I engaged in that activity,
what was happening to me at the time.
I quit of my own accord, approximately two years
before the government asked me, until I found out that
there was a case getting started or investigation. I quit.
I did not want to be involved in criminal activity. I
went to Russia to work in telecommunications to get
away from what I was involved with here.
Xxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
But more importantly because why I have continued all
of these years, why I was asked many times by various
agents, by various prosecutors, is it time yet to get
sentenced? I said no, I’m willing to continue working.
I did it because I want some redemption. Yes, I am a
criminal.
Yes, I am guilty of the things that I have done. The
worse thing that could happen, your Honor, despite
whatever sentence you impose upon me, I went into
real estate development and I built a very successful
real estate company right up the block, a Trump
project, built the whole thing. Years ago they wrote an
article in the newspaper, “executive with ties to Donald
Trump has a criminal past” the next month I had to
leave my company, the company that I built
[p.18]
with my own two hands, otherwise the banks would
have said there’s a criminal involved. I had to get out.Page 90 App. At that moment I thought my life was over. Here I am
trying to rehabilitate myself and keep getting the rug
pulled out from under me. I thought that was the case
until a week later my daughter came home and said
the kids at school said my Dad is a terrorist.
I guess the worst thing that is going to happen and
is happening is the blight I put on my children, and I
will now in the past and in the future try to do good
deeds, try to be a positive member for my family and
for my community to in some way hopefully balance out
the mountain of garbage I heaped on my own life.
In closing, your Honor, I’m guilty of the things I
have done and I stand before you with no justification,
and I’m ready to accept any punishment you feel is
deserving for me to fulfill anything that I have done.
THE COURT: I frequently hear a phrase that Ms.
Caldwell used, literally hundreds of persons who stand
before me that do use, “I made a terrible mistake.” The
word “mistake” always intrigues me. Given what you
have done over the past eleven years raises a question
as how is it possible, given the character that you
exemplified those eleven years, how is it possible that
you became involved in an enterprise, which is what
the RICO prosecution was all
[p.19]
about, calculated a massive series of securities frauds,
which were conceived by a cadre of callous, corrupt
venisons of the security industry, who also enlisted the
assistance of the likes of Garafalo and Cochlin (ph), the
Persico and the Colombo families, and I have asked
myself countless times how has that happening? And I
have been able to answer that question by assumingPage 91 App. and believing that most of us have a little voice inside
us which speaks to us when we think of or about to do
something wrong. It says to us, don’t do it, it is wrong.
And there were times that I have come to know that
there are some persons who don’t have that little voice.
They never hear it, never listen to it. And there are
some who do. I guess you exemplify that category; you
heard that voice. You weren’t listening to it at the time
when Clarkson invited you to join them.
I’m required, although it is an oxymoron, to consider
the guidelines which are unconstitutional, but I’m to be
guided by them, and if I do disregard them drastically,
an appellate court will tell me I did something
unreasonable, although semantically I never
understood why if a judge has discretion, how could it
be abused by definition. He has the privilege of doing
whatever he believes to be right.
One of the greater judges of our country, Judge
Friendly, attempted to resolute that years ago and
concluded when the Court of Appeals says a district
court judge abuses
[p.20]
discretion, all they are saying is we disagree with him.
That becomes relevant in connection with your
sentence because I’m obliged to consider the nature and
circumstances of the offense and the seriousness of the
offense. The seriousness of offenses I guess for most
people who automatically define offenses which inflict
serious physical harm, murder, rape, burglary, assault,
but the offense with which you were involved was also
extremely serious because one can’t measure how
many, literally hundreds of persons, bought Fun Time,Page 92 App. Hydrock, Holly, United States Bridge, worthless stock,
lost money which they have set aside for retirement.
Lost money which they set aside for their children’s
education. And the harm with which that kind of crime,
characterized as white collar crime, is in many respects
far more serious than the floating infliction of a serious
act. So I’m obliged to consider the seriousness of the
offense.
I’m obliged to consider the sentence achieving
promotion and respect for the law. It is a rather curious
factor for the court to consider, promote respect for the
law. What does that mean? Obviously it doesn’t mean
that I can administer a credible injection into your
head and instantaneously instill respect for the law.
What it means is to convey an understanding - which
at this point I believe is irrelevant for me to covey convey an understanding that
[p.21]
when the law makes certain conduct illegal, it means
it. That’s what promoting respect for the law means,
believe what the law means when it says securities
fraud is a crime. Don’t do it. And the arm of the law is
pretty long. It eventually will catch up to you.
The most difficult task of that statute, 3553(a),
which the court is obliged to consider imposing just
punishment, and there is no mathematical, scientific,
or any other guide to determine what just punishment
is, I sometimes like to think of a question that
somebody said was asked about God. Somebody asked
whether God prays. And the response was, that’s a
remarkable silly question, God prays? What would God
pray for? And the answer was that God prays that hisPage 93 App. sense of mercy will overcome his desire for justice, and
naturally would be factored into what is just
punishment in your case.
What is interesting and difficult about your case,
literally hundreds of cases like it, judges tend to
become cynical and mindful. So with cooperators. We
understand in most instances there’s a very quick cost
benefit analysis which is made. A person is
apprehended for having committed a crime, and rather
quickly decides that perhaps the best way to minimize
my sentence is to begin to cooperate. And the other
troublesome and interesting aspect of this phase of
sentencing in this case is the more sophisticated and
[p.22]
knowledgeable the criminal, the more valuable is his
cooperation, and the more benefit he can obtain, and
offset the punishment which might otherwise have
been imposed. We see that all of the time, low-level
drug dealers, couriers, have no information they can
give to the government which would provide any
assistance, so they suffer the sentence which the law
requires. A person who was higher-up on the ladder,
drug trade or a securities fraud has a lot of knowledge
and information to convey to the government, is
obviously in a much better position.
So really getting down to the crux of this, to what
extent should your very valuable cooperation offset the
guideline sentence, which statutorily for RICO is years, and for guideline, 262 to 300-some-odd-months,
to what extent does your cooperation offset that
enormous amount of time? I don’t think anybody truly
suspects that a sentence of 20 years or 262 monthsPage 94 App. would be imposed, except the newspapers like to trump
the numbers, facing a jail term of 120 years and so on.
But there’s another factor which I regard as quite
relevant, in a very real sense, I think and you said it.
You have be writing your little allocution to me for
eleven years. I’ve often wondered why it takes the
government eleven years or twelve years to bring a
cooperator in for sentencing. In your case they were
aware of your assistance,
[p.23]
the quality and extent of it. They didn’t have to wait to
call upon you to testify, have your sentence first, and
thought maybe you would refuse to testify in a case
thereafter because you had already been sentenced.
For eleven years I would suspect you had gone to
bed every night or every other night sleeping a little
restlessly and wondering what your sentence is going
to be. Then when the day of punishment comes, what
will be my fate? For a period of eleven years, and its
true of cooperating generally, there is a kind of
psychological imprisonment and burden which they
carry over that long period of time. Their life is not
quite the same. They don’t have that same carefree
double mint care sense of life because they are worried
about when will that end. So in effect there has been a
sentence which already has been imposed.
It’s interesting in thinking about what I would do
this morning, I will use the word “redemption.” That in
a sense the remarkable assistance you have given to
them, which they told me about in a letter, Agent
Taddeo just elaborated on, in effect manifested a desire
in you, the harm you caused a lot of harmless peoplePage 95 App. who were thwarted by the likes of you and Aleks Paul
and Clarkson, Salamon, the whole group of thieves,
that’s essentially what they were. And the extent of
your cooperation overall of those years clearly
manifests that you have a very sincere and deep
respect for the law, at
[p.24]
least to this essence would suggest would be an
appropriate inference.
I’m not going to impose a term of incarceration, and
I’m not going to impose a sentence, but the statute, it
is interesting, the RICO statute provides that the
penalty shall be a fine or imprisonment. It doesn’t say
probation and it doesn’t make imprisonment
mandatory. It could be a fine or imprisonment. I have
a duty not only to you, Mr. Slater, to see that justice is
done to you, I have that obligation, and I also have an
obligation to the community which has in a sense put
you here, and some form of punishment, although it
comes very late, I think it is appropriate in the
discharge of my duty to put someone on some degree of
punishment, and I’m going to impose a fine of $25,000.
I’ve listened to and looked at the factors one should
consider in imposing the fine. They all clearly justify a
fine in that sum, which given the enormity of what you
did, although many years ago, I think is appropriate.
I think there’s only one count in the indictment.
MS. CALDWELL: That’s correct, your Honor. It was
a one count information.
THE COURT: According to the statute, the fine
should be paid immediately to the clerk of the court. IfPage 96 App. for some reason during the time it would be
inappropriate and an application is made to that, I will
consider it.
[p.25]
I think I’m also obliged to advise you that you have
a right to appeal the sentence. If you cannot afford to
pay the cost of that appeal, you can make an
application to have the cost waived.
I think there’s a forfeiture charge which was agreed
upon.
MS. CALDWELL: Your Honor, Mr. Slater forfeited
a house in the Hamptons as part of his cooperation
agreement.
THE COURT: In Hampton Bays?
MR. CALDWELL: Yes.
THE COURT: I think it was provided for the
cooperation.
I don’t think there’s anything else for me to do in
connection to this proceeding.
MS. CALDWELL: No. Thank you, your Honor.
MR. KAMINSKY: No, Your Honor.
THE COURT: I wish you well next time you go to
dinner with your wife drink more miserly, modestly.
I think these proceedings are concluded.Page 97 App.
APPENDIX F
U.S. District Court
Southern District of New York (Foley Square)
CRIMINAL DOCKET FOR CASE #:
1:94-cr-00248-CSH-Case title: USA v. Shereshevsky
Date Filed: 05/05/Date Terminated: 06/18/Pending Counts
18:371 BANK FRAUD
(1)
Disposition
Imprisonment: Time served. Defendant advised of his
right to appeal. Supervised release: 24 months. Special
assessment: $50, due in full immediately.
Date Filed
#
Docket Text
05/05/
WAIVER OF INDICTMENT
by Joseph Shereshevsky
(rag) (Entered: 05/06/1994)
05/05/
INFORMATION as to
Joseph Shereshevsky (1)
count(s) 1 (rag) (Entered:
05/06/1994)
***Page 98 App. 05/05/
PLEA entered by Joseph
Shereshevsky . Court
accepts plea. Not Guilty:
Joseph Shereshevsky (1)
count(s) 1 (rag) (Entered:
05/06/1994)
***
05/05/
PLEA entered by Joseph
Shereshevsky. Court accepts
plea. Guilty: Joseph
Shereshevsky (1) count(s) 1 .
(Plea filed under seal). (ph)
(Entered: 06/26/2002)
***Page 99 App. 09/24/
ORDER EXCLUDING
TIME UNDER THE
SPEEDY TRIAL ACT as to
Joseph Shereshevsky ...that
the request for a 30-day
exclusion from today,
September 17, 2001, purs. to
Title 18 U.S.C. Sec.
3161(h) (8) (A) is hereby
granted for all criminal
cases in which an
indictment or information
has been filed and is
pending,..., Continuing due
to Extraordinary
circumstances time is
excluded from 9/17/01 to
10/17/01 ( Signed by Chief
Judge Michael B.
Mukasey ); [Original filed in
M10-468 Document No. 22]
(ICMSUSER)
(Entered: 10/01/2001)
6/18/
Sentencing held Joseph
Shereshevsky (1) count(s) 1.
(ph) (Entered: 06/26/2002)
***Page 100 App.
APPENDIX G
Constitutional, Statutory and
Regulatory Provisions
The United States Constitution
Article III
Section The judicial Power of the United States, shall be vested
in one supreme Court, and in such inferior Courts as
the Congress may from time to time ordain and
establish. The Judges, both of the supreme and inferior
Courts, shall hold their Offices during good Behavior,
and shall, at stated Times, receive for their Services a
Compensation which shall not be diminished during
their Continuance in Office.
Section 2, Paragraph The judicial Power shall extend to all Cases, in Law
and Equity, arising under this Constitution, the Laws
of the United States, and Treaties made, or which shall
be made, under their Authority;—to all Cases affecting
Ambassadors, other public Ministers and Consuls;—to
all Cases of admiralty and maritime Jurisdiction;—to
Controversies to which the United States shall be a
Party;—to Controversies between two or more
States;—between a State and Citizens of another
State;—between Citizens of different States;—between
Citizens of the same State claiming Lands under
Grants of different States, and between a State, or thePage 101 App. Citizens thereof, and foreign States, Citizens or
Subjects.
***
Amendment I
Congress shall make no law respecting an
establishment of religion, or prohibiting the free
exercise thereof; or abridging the freedom of speech, or
of the press; or the right of the people peaceably to
assemble, and to petition the Government for a redress
of grievances.
***
Amendment VI
In all criminal prosecutions, the accused shall enjoy the
right to a speedy and public trial, by an impartial jury
of the State and district wherein the crime shall have
been committed, which district shall have been
previously ascertained by law, and to be informed of
the nature and cause of the accusation; to be confronted
with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to
have the Assistance of Counsel for his defence.
Theft or Alteration of Record or Process; False
Bail (18 USC § 1506)
Whoever feloniously steals, takes away, alters, falsifies,
or otherwise avoids any record, writ, process, or other
proceeding, in any court of the United States, whereby
any judgment is reversed, made void, or does not take
effect; orPage 102 App. Whoever acknowledges, or procures to be acknowledged
in any such court, any recognizance, bail, or judgment,
in the name of any other person not privy or consenting
to the same—
Shall be fined under this title or imprisoned not more
than five years, or both.
Imposition of a Sentence (18 USC § 3553 (c))
(c) Statement of Reasons for Imposing a
Sentence.— The court, at the time of sentencing, shall
state in open court the reasons for its imposition of the
particular sentence, and, if the sentence—
(1) is of the kind, and within the range, described in
subsection (a)(4), and that range exceeds 24 months,
the reason for imposing a sentence at a particular
point within the range; or
(2) is not of the kind, or is outside the range,
described in subsection (a)(4), the specific reason for
the imposition of a sentence different from that
described, which reasons must also be stated with
specificity in a statement of reasons form issued
under section 994 (w)(1)(B) of title 28, except to the
extent that the court relies upon statements
received in camera in accordance with Federal Rule
of Criminal Procedure 32. In the event that the
court relies upon statements received in camera in
accordance with Federal Rule of Criminal Procedure
32 the court shall state that such statements were
so received and that it relied upon the content of
such statements.
If the court does not order restitution, or orders only
partial restitution, the court shall include in thePage 103 App. statement the reason therefor. The court shall provide
a transcription or other appropriate public record of the
court’s statement of reasons, together with the order of
judgment and commitment, to the Probation System
and to the Sentencing Commission,, [3] and, if the
sentence includes a term of imprisonment, to the
Bureau of Prisons.
Order of Restitution (18 USC § 3663)
(a)
(1)
(A) The court, when sentencing a defendant
convicted of an offense under this title, section
401, 408(a), 409, 416, 420, or 422(a) of the
Controlled Substances Act (21 U.S.C. 841,
848 (a), 849, 856, 861, 863) (but in no case shall
a participant in an offense under such sections
be considered a victim of such offense under this
section), or section 5124, 46312, 46502, or of title 49, other than an offense described in
section 3663A (c), may order, in addition to or, in
the case of a misdemeanor, in lieu of any other
penalty authorized by law, that the defendant
make restitution to any victim of such offense, or
if the victim is deceased, to the victim’s estate.
The court may also order, if agreed to by the
parties in a plea agreement, restitution to
persons other than the victim of the offense.
***
(3) The court may also order restitution in any
criminal case to the extent agreed to by the
parties in a plea agreement.Page 104 App. Mandatory Restitution to Victims of Certain
Crimes (18 USC § 3663A)
(a)
(1) Notwithstanding any other provision of law,
when sentencing a defendant convicted of an offense
described in subsection (c), the court shall order, in
addition to, or in the case of a misdemeanor, in
addition to or in lieu of, any other penalty
authorized by law, that the defendant make
restitution to the victim of the offense or, if the
victim is deceased, to the victim’s estate.
***
(c)
(1) Notwithstanding any other provision of law (but
subject to the provisions of subsections
(a)(1)(B)(i)(II) and (ii), [1] when sentencing a
defendant convicted of an offense described in
section 401, 408(a), 409, 416, 420, or 422(a) of the
Controlled Substances Act (21 U.S.C. 841, 848 (a),
849, 856, 861, 863), in which there is no identifiable
victim, the court may order that the defendant
make restitution in accordance with this subsection.
(A) that is—
(i) a crime of violence, as defined in section 16;
(ii) an offense against property under this title, or
under section 416(a) of the Controlled Substances Act
(21 U.S.C. 856 (a)), including any offense committed by
fraud or deceit; orPage 105 App. (iii) an offense described in section 1365 (relating to
tampering with consumer products); and
(B) in which an identifiable victim or victims has
suffered a physical injury or pecuniary loss.
(3) This section shall not apply in the case of an offense
described in paragraph (1)(A)(ii) if the court finds, from
facts on the record, that—
(A) the number of identifiable victims is so large as to
make restitution impracticable; or
(B) determining complex issues of fact related to the
cause or amount of the victim’s losses would complicate
or prolong the sentencing process to a degree that the
need to provide restitution to any victim is outweighed
by the burden on the sentencing process.
Procedure for Issuance and Enforcement of
Order of Restitution (18 USC § 3664)
(a) For orders of restitution under this title, the court
shall order the probation officer to obtain and include
in its presentence report, or in a separate report, as the
court may direct, information sufficient for the court to
exercise its discretion in fashioning a restitution order.
The report shall include, to the extent practicable, a
complete accounting of the losses to each victim, any
restitution owed pursuant to a plea agreement, and
information relating to the economic circumstances of
each defendant. If the number or identity of victims
cannot be reasonably ascertained, or other
circumstances exist that make this requirement clearly
impracticable, the probation officer shall so inform the
court.Page 106 App. ***
(d)
(1) Upon the request of the probation officer, but not
later than 60 days prior to the date initially set for
sentencing, the attorney for the Government, after
consulting, to the extent practicable, with all
identified victims, shall promptly provide the
probation officer with a listing of the amounts
subject to restitution.
(2) The probation officer shall, prior to submitting
the presentence report under subsection (a), to the
extent practicable—
(A) provide notice to all identified victims of—
(i) the offense or offenses of which the
defendant was convicted;
(ii) the amounts subject to restitution
submitted to the probation officer;
(iii) the opportunity of the victim to submit
information to the probation officer
concerning the amount of the victim’s losses;
(iv) the scheduled date, time, and place of the
sentencing hearing;
(v) the availability of a lien in favor of the
victim pursuant to subsection (m)(1)(B); and
(vi) the opportunity of the victim to file with
the probation officer a separate affidavit
relating to the amount of the victim’s losses
subject to restitution; andPage 107 App. (B) provide the victim with an affidavit form to
submit pursuant to subparagraph (A)(vi).
(3) Each defendant shall prepare and file with the
probation officer an affidavit fully describing the
financial resources of the defendant, including a
complete listing of all assets owned or controlled by
the defendant as of the date on which the defendant
was arrested, the financial needs and earning
ability of the defendant and the defendant’s
dependents, and such other information that the
court requires relating to such other factors as the
court deems appropriate.
***
(5) If the victim’s losses are not ascertainable by the
date that is 10 days prior to sentencing, the
attorney for the Government or the probation officer
shall so inform the court, and the court shall set a
date for the final determination of the victim’s
losses, not to exceed 90 days after sentencing. If the
victim subsequently discovers further losses, the
victim shall have 60 days after discovery of those
losses in which to petition the court for an amended
restitution order. Such order may be granted only
upon a showing of good cause for the failure to
include such losses in the initial claim for
restitutionary relief.
***Page 108 App. (f)
(1)
(A) In each order of restitution, the court shall
order restitution to each victim in the full
amount of each victim’s losses as determined by
the court and without consideration of the
economic circumstances of the defendant.
***
(2) Upon determination of the amount of restitution
owed to each victim, the court shall, pursuant to
section 3572, specify in the restitution order the
manner in which, and the schedule according to
which, the restitution is to be paid, in consideration
of—
(A) the financial resources and other assets of
the defendant, including whether any of these
assets are jointly controlled;
(B) projected earnings and other income of the
defendant; and
(C) any financial obligations of the defendant;
including obligations to dependents.
***
(h) If the court finds that more than 1 defendant has
contributed to the loss of a victim, the court may make
each defendant liable for payment of the full amount of
restitution or may apportion liability among the
defendants to reflect the level of contribution to the
victim’s loss and economic circumstances of each
defendant.Page 109 App. ***
(j)
(1) If a victim has received compensation from
insurance or any other source with respect to a loss,
the court shall order that restitution be paid to the
person who provided or is obligated to provide the
compensation, but the restitution order shall
provide that all restitution of victims required by
the order be paid to the victims before any
restitution is paid to such a provider of
compensation.
***
(k) A restitution order shall provide that the defendant
shall notify the court and the Attorney General of any
material change in the defendant’s economic
circumstances that might affect the defendant’s ability
to pay restitution. The court may also accept
notification of a material change in the defendant’s
economic circumstances from the United States or from
the victim. The Attorney General shall certify to the
court that the victim or victims owed restitution by the
defendant have been notified of the change in
circumstances. Upon receipt of the notification, the
court may, on its own motion, or the motion of any
party, including the victim, adjust the payment
schedule, or require immediate payment in full, as the
interests of justice require.
(l) A conviction of a defendant for an offense involving
the act giving rise to an order of restitution shall estop
the defendant from denying the essential allegations of
that offense in any subsequent Federal civil proceedingPage 110 App. or State civil proceeding, to the extent consistent with
State law, brought by the victim.
(m)
(1)
(A)
(i) An order of restitution may be enforced by
the United States in the manner provided for
in subchapter C of chapter 227 and
subchapter B of chapter 229 of this title; or
(ii) by all other available and reasonable
means.
(B) At the request of a victim named in a
restitution order, the clerk of the court shall
issue an abstract of judgment certifying that a
judgment has been entered in favor of such
victim in the amount specified in the restitution
order. Upon registering, recording, docketing, or
indexing such abstract in accordance with the
rules and requirements relating to judgments of
the court of the State where the district court is
located, the abstract of judgment shall be a lien
on the property of the defendant located in such
State in the same manner and to the same
extent and under the same conditions as a
judgment of a court of general jurisdiction in
that State.
(2) An order of in-kind restitution in the form of
services shall be enforced by the probation officer.
(n) If a person obligated to provide restitution, or pay
a fine, receives substantial resources from any source,Page 111 App. including inheritance, settlement, or other judgment,
during a period of incarceration, such person shall be
required to apply the value of such resources to any
restitution or fine still owed.
(o) A sentence that imposes an order of restitution is a
final judgment notwithstanding the fact that—
The Crime Victims’ Rights Act (18 USC § 3771)
(a) Rights of Crime Victims.— A crime victim has
the following rights:
(1) The right to be reasonably protected from the
accused.
(2) The right to reasonable, accurate, and timely
notice of any public court proceeding, or any parole
proceeding, involving the crime or of any release or
escape of the accused.
(3) The right not to be excluded from any such
public court proceeding, unless the court, after
receiving clear and convincing evidence, determines
that testimony by the victim would be materially
altered if the victim heard other testimony at that
proceeding.
(4) The right to be reasonably heard at any public
proceeding in the district court involving release,
plea, sentencing, or any parole proceeding.
(5) The reasonable right to confer with the attorney
for the Government in the case.
(6) The right to full and timely restitution as
provided in law.Page 112 App. (7) The right to proceedings free from unreasonable
delay.
(8) The right to be treated with fairness and with
respect for the victim’s dignity and privacy.
(b) Rights Afforded.—
(1) In general.— In any court proceeding involving
an offense against a crime victim, the court shall
ensure that the crime victim is afforded the rights
described in subsection (a). Before making a
determination described in subsection (a)(3), the
court shall make every effort to permit the fullest
attendance possible by the victim and shall consider
reasonable alternatives to the exclusion of the
victim from the criminal proceeding. The reasons
for any decision denying relief under this chapter
shall be clearly stated on the record.
***
(c) Best Efforts To Accord Rights.—
(1) Government.— Officers and employees of the
Department of Justice and other departments and
agencies of the United States engaged in the
detection, investigation, or prosecution of crime
shall make their best efforts to see that crime
victims are notified of, and accorded, the rights
described in subsection (a).
(2) Advice of attorney.— The prosecutor shall
advise the crime victim that the crime victim can
seek the advice of an attorney with respect to the
rights described in subsection (a).Page 113 App. (3) Notice.— Notice of release otherwise required
pursuant to this chapter shall not be given if such
notice may endanger the safety of any person.
(d) Enforcement and Limitations.—
(1) Rights.— The crime victim or the crime victim’s
lawful representative, and the attorney for the
Government may assert the rights described in
subsection (a). A person accused of the crime may
not obtain any form of relief under this chapter.
(2) Multiple crime victims.— In a case where the
court finds that the number of crime victims makes
it impracticable to accord all of the crime victims
the rights described in subsection (a), the court
shall fashion a reasonable procedure to give effect to
this chapter that does not unduly complicate or
prolong the proceedings.
(3) Motion for relief and writ of mandamus.—
The rights described in subsection (a) shall be
asserted in the district court in which a defendant
is being prosecuted for the crime or, if no
prosecution is underway, in the district court in the
district in which the crime occurred. The district
court shall take up and decide any motion asserting
a victim’s right forthwith. If the district court denies
the relief sought, the movant may petition the court
of appeals for a writ of mandamus. The court of
appeals may issue the writ on the order of a single
judge pursuant to circuit rule or the Federal Rules
of Appellate Procedure. The court of appeals shall
take up and decide such application forthwith
within 72 hours after the petition has been filed. In
no event shall proceedings be stayed or subject to aPage 114 App. continuance of more than five days for purposes of
enforcing this chapter. If the court of appeals denies
the relief sought, the reasons for the denial shall be
clearly stated on the record in a written opinion.
(4) Error.— In any appeal in a criminal case, the
Government may assert as error the district court’s
denial of any crime victim’s right in the proceeding
to which the appeal relates.
(5) Limitation on relief.— In no case shall a
failure to afford a right under this chapter provide
grounds for a new trial. A victim may make a
motion to re-open a plea or sentence only if—
(A) the victim has asserted the right to be heard
before or during the proceeding at issue and
such right was denied;
(B) the victim petitions the court of appeals for
a writ of mandamus within 14 days; and
(C) in the case of a plea, the accused has not
pled to the highest offense charged.
This paragraph does not affect the victim’s right
to restitution as provided in title 18, United
States Code.
***
Pleas (Federal Rule of Criminal Procedure 11(b))
(b) Considering and Accepting a Guilty or Nolo
Contendere Plea.
(1) Advising and Questioning the Defendant. Before
the court accepts a plea of guilty or nolo contendere,
the defendant may be placed under oath, and thePage 115 App. court must address the defendant personally in
open court....
Sentencing and Judgment (Federal Rule of
Criminal Procedure 32)
I. Rule 32. Sentencing and Judgment
***
(c) Presentence Investigation.
(1) Required Investigation.
(A) In General. The probation officer must
conduct a presentence investigation and submit
a report to the court before it imposes sentence
unless:
(i) 18 U.S.C. §3593 (c) or another statute
requires otherwise; or
(ii) the court finds that the information in the
record enables it to meaningfully exercise its
sentencing authority under 18 U.S.C. §3553,
and the court explains its finding on the
record.
(B) Restitution. If the law permits restitution,
the probation officer must conduct an
investigation and submit a report that contains
sufficient information for the court to order
restitution.
***
(2) Interviewing the Defendant. The probation
officer who interviews a defendant as part of a
presentence investigation must, on request, give thePage 116 App. defendant’s attorney notice and a reasonable
opportunity to attend the interview.
(d) Presentence Report.
***
(2) Additional Information. The presentence
report must also contain the following:
***
(B) information that assesses any financial,
social, psychological, and medical impact on any
victim;
***
(D) when the law provides for restitution,
information sufficient for a restitution order;
(e) Disclosing the Report and Recommendation.
(1) Time to Disclose. Unless the defendant has
consented in writing, the probation officer must not
submit a presentence report to the court or disclose
its contents to anyone until the defendant has
pleaded guilty or nolo contendere, or has been found
guilty.
Injunctions and Restraining Orders (Federal
Rule of Civil Procedure 65(d))
Contents and Scope of Every Injunction and
Restraining Order.
(1) Contents. Every order granting an injunction
and every restraining order must:
(A) state the reasons why it issued;Page 117 App. (B) state its terms specifically; and
(C) describe in reasonable detail—and not by
referring to the complaint or other
document—the act or acts restrained or
required.
(2) Persons Bound. The order binds only the
following who receive actual notice of it by personal
service or otherwise:
(A) the parties;
(B) the parties’ officers, agents, servants,
employees, and attorneys; and
(C) other persons who are in active concert or
participation with anyone described in Rule
65(d)(2)(A) or (B).
Procedures to Promote Compliance with Crime
Victims’ Rights Obligations (28 CFR 45.10)
(a) Definitions. The following definitions shall apply
with respect to this section, which implements the
provisions of the Justice for All Act that relate to
protection of the rights of crime victims. See 18 U.S.C.
3771.
Crime victim means a person directly and
proximately harmed as a result of the commission of a
Federal offense or an offense in the District of
Columbia. In the case of a crime victim who is under years of age, incompetent, incapacitated, or deceased,
the legal guardians of the crime victim or the
representatives of the crime victim’s estate, family
members, or any other persons appointed as suitable
by the court, may assume the crime victim’s rights, butPage 118 App. in no event shall the defendant be named as such
guardian or representative.
Crime victims’ rights means those rights provided in
18 U.S.C. 3771.
Employee of the Department of Justice means an
attorney, investigator, law enforcement officer, or other
personnel employed by any division or office of the
Department of Justice whose regular course of duties
includes direct interaction with crime victims, not
including a contractor.
Office of the Department of Justice means a
component of the Department of Justice whose
employees directly interact with crime victims in the
regular course of their duties.
(b) The Attorney General shall designate an official
within the Executive Office for United States Attorneys
(EOUSA) to receive and investigate complaints alleging
the failure of Department of Justice employees to
provide rights to crime victims under 18 U.S.C. 3771.
The official shall be called the Department of Justice
Victims’ Rights Ombudsman (VRO). The VRO shall
then designate, in consultation with each office of the
Department of Justice, an official in each office to serve
as the initial point of contact (POC) for complainants.
***
(e) Disciplinary procedures.
(1) If, based on the investigation, the VRO
determines that a Department of Justice employee
has wantonly or willfully failed to provide the
complainant with a right listed in 18 U.S.C. 3771,Page 119 App. the VRO shall recommend, in conformity with laws
and regulations regarding employee discipline, a
range of disciplinary sanctions to the head of the
office of the Department of Justice in which the
employee is located, or to the official who has been
designated by Department of Justice regulations
and procedures to take action on disciplinary
matters for that office. The head of that office of the
Department of Justice, or the other official
designated by Department of Justice regulations
and procedures to take action on disciplinary
matters for that office, shall be the final decisionmaker regarding the disciplinary sanction to be
imposed, in accordance with applicable laws and
regulations.
(2) Disciplinary sanctions available under
paragraph (e)(1) of this section include all sanctions
provided under the Department of Justice Human
Resources Order, 1200.1.
Policy With Regard To
Proceedings (28 CFR § 50.9).
Open
Judicial
Because of the vital public interest in open judicial
proceedings, the Government has a general overriding
affirmative duty to oppose their closure. There is,
moreover, a strong presumption against closing
proceedings or portions thereof, and the Department of
Justice foresees very few cases in which closure would
be warranted. The Government should take a position
on any motion to close a judicial proceeding, and should
ordinarily oppose closure; it should move for or consent
to closed proceedings only when closure is plainly
essential to the interests of justice. In furtherance of
the Department’s concern for the right of the public toPage 120 App. attend judicial proceedings and the Department’s
obligation to the fair administration of justice, the
following guidelines shall be adhered to by all
attorneys for the United States.
(a) These guidelines apply to all federal trials, pre- and
post-trial evidentiary proceedings, arraignments, bond
hearings, plea proceedings, sentencing proceedings, or
portions thereof, except as indicated in paragraph (e) of
this section.
(b) A Government attorney has a compelling duty to
protect the societal interest in open proceedings.
(c) A Government attorney shall not move for or
consent to closure of a proceeding covered by these
guidelines unless:
(1) No reasonable alternative exists for protecting
the interests at stake;
(2) Closure is clearly likely to prevent the harm
sought to be avoided;
(3) The degree of closure is minimized to the
greatest extent possible;
(4) The public is given adequate notice of the
proposed closure; and, in addition, the motion for
closure is made on the record, except where the
disclosure of the details of the motion papers would
clearly defeat the reason for closure specified under
paragraph (c)(6) of this section;
(5) Transcripts of the closed proceedings will be
unsealed as soon as the interests requiring closure
no longer obtain; andPage 121 App. (6) Failure to close the proceedings will produce;
(i) A substantial likelihood of denial of the right
of any person to a fair trial; or
(ii) A substantial likelihood of imminent danger
to the safety of parties, witnesses, or other
persons; or
(iii) A substantial likelihood that ongoing
investigations will be seriously jeopardized.
(d) A government attorney shall not move for or
consent to the closure of any proceeding, civil or
criminal, except with the express authorization of:
(1) The Deputy Attorney General, or,
(2) The Associate Attorney General, if the Division
seeking authorization is under the supervision of
the Associate Attorney General.
(e) These guidelines do not apply to:
(1) The closure of part of a judicial proceeding where
necessary to protect national security information
or classified documents; or
(2) In camera inspection, consideration or sealing of
documents, including documents provided to the
Government under a promise of confidentiality,
where permitted by statute, rule of evidence or
privilege; or
(3) Grand jury proceedings or proceedings ancillary
thereto; orPage 122 App. (4) Conferences traditionally held at the bench or in
chambers during the course of an open proceeding;
or
(5) The closure of judicial proceedings pursuant to
18 U.S.C. 3509 (d) and (e) for the protection of child
victims or child witnesses.
(f) Because of the vital public interest in open judicial
proceedings, the records of any proceeding closed
pursuant to this section, and still sealed 60 days after
termination of the proceeding, shall be reviewed to
determine if the reasons for closure are still applicable.
If they are not, an appropriate motion will be made to
have the records unsealed. If the reasons for closure
are still applicable after 60 days, this review is to be
repeated every 60 days until such time as the records
are unsealed. Compliance with this section will be
monitored by the Criminal Division.
(g) The principles set forth in this section are intended
to provide guidance to attorneys for the Government
and are not intended to create or recognize any legally
enforceable right in any person.Page 123 App.
APPENDIX H
JEFFREY LICHTMAN
ATTORNEY AT LAW
[Letterhead]
October 10, BY TELEFAX: (718) 254-Eric O. Corngold, Esq.
Assistant United States Attorney
Eastern District of New York
1 Pierrepont Plaza
Brooklyn, New York Re: United States v. Coppa, et al.,
00 CR 196 (ILG)
Dear Mr. Corngold:
I am writing on behalf of defendant Daniel Lev to
follow up on our meeting of June 15, 2000 during which
I reviewed certain discovery materials pertinent to this
case. At our meeting, I noted my request for certain
exculpatory and impeachment materials included in
your general index which I believed to be Brady and/or
Giglio material, i.e., bank, phone and financial records
of Eugene Klotzman and Felix Sater; NASD/SEC
disciplinary and employment history for Klotzman and
Sater; customer complaints regarding Klotzman and
Sater; materials from People v. Sater; and any recorded
witness statements from these or any government
witness which serve to impeach them or excuplate thePage 124 App. defendant. United States v. Shvarts, 90 F. Supp.2d (E.D.N.Y. 2000)(Glasser, J.). Of course my request is
not limited to materials found in your general index.
Any other such materials within the government’s
possession or control is also requested.
Please contact me if you have any questions with
regard to this request.
Very truly yours,
/s/
Jeffrey LichtmanPage 125 App.
APPENDIX I
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
EOC: DBP
F. #1998r3500-1.wpd
136 Pierrepont Street
Brooklyn, New York
November 20, BY FEDERAL EXPRESS
Lawrence Ray
2 Cedar Ridge Lane
Warren, New Jersey Re:
United States v. Lawrence Ray,
Criminal Docket No. 00-196 (ILG)
Dear Mr. Ray:
Enclosed are copies of documents and audiocassette
tapes which the government is providing to you
pursuant to its obligations under the Jencks Act, which
is codified at Section 3500 of Title 18 of the United
States Code, and Rules 16 and 26.2 of the Federal
Rules of Criminal Procedure. As a courtesy, since you
are not an attorney, we also have enclosed copies of
Section 3500 and Rules 16 and 26.2.
As you will see, taken together, Section 3500 and
Rule 26.2 provide that after a witness called by thePage 126 App. government has testified on direct examination, a
defendant may ask the judge to order the government
to give the defendant copies of any written or recorded
statements of the witness in the government’s
possession relating to the subject matter about which
the witness testified. As a courtesy, this Office
generally does not wait for a defendant to make a
motion to receive such materials, nor do we wait until
the witness has testified on direct examination to
provide copies of such materials. We also generally
take a broad view regarding which statements “relate”
to the subject matter of a witness’s testimony.
With these principles in mind, we are providing you
with copies of (i) transcripts of prior testimony of
Professor Steven Thel, who will be called by the
government as an expert witness,1 (ii) copies of reports
of interviews of you by FBI Special Agents Gary Uher
and Leo Taddeo,2 both of whom the government expects
to call as witnesses, and (iii) audiotapes of recorded
conversations involving Joseph Polito and Felix Sater,
both of whom will be called by the government as a
cooperating witnesses.3 With regard to the audiotapes,
we do not intend to offer any of them into evidence at
The nature of Professor Thel’s expert testimony is detailed in a
separate letter to you dated today.
Copies of the Uher and Taddeo reports were provided to you
previously. We nonetheless provide you with additional copies as
a courtesy.
You were provided, under cover of a letter dated yesterday, with
copies of materials relating to the testimony of Polito and Sater,
along with copies of materials relating to another cooperating
witness, Salvatore Lauria.Page 127 App. trial and do not believe they will have any relevancy at
trial. However, for the reasons set forth above, we
provide them to you, in an abundance of caution, to
ensure that there is no question that we have satisfied
all of our obligations to you under Section 3500.
***Page 128 App.
APPENDIX J
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CR-98-[Dated February 5, 2004]
________________________________
UNITED STATES OF AMERICA, )
)
Plaintiff,
)
)
-against)
)
SALVATORE LAURIA,
)
)
Defendant. )
________________________________ )
United States Courthouse
Brooklyn, New York
February 5, 10:00 a.m.
TRANSCRIPT OF SENTENCING
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Plaintiff:
ROSLYNN R. MAUSKOPF, ESQ.
United States AttorneyPage 129 App. BY: ERIC CORNGOLD, ESQ.
Assistant United States Attorney
For the Defendant:
ROBERT G. STAHL, ESQ.
Court Reporter:
FREDERICK R. GUERINO, C.S.R.
225 Cadman Plaza East
Brooklyn, New York
(781) 613-***
[p.2]
THE COURT CLERK: Criminal cause for
sentencing: United States of America v. Salvatore
Lauria.
MR. CORNGOLD: Eric Corngold for the United
States.
MR. STAHL: Robert Stahl on behalf of Mr.
Lauria.
THE COURT: Ready to proceed?
MR. STAHL: Yes, Your Honor.
***
[p.3]
***
THE COURT: Mr. Stahl, do you want to be
heard beyond that?Page 130 App. MR. STAHL: Not on the legal argument. On the
sentencing, yes, Your Honor.
THE COURT: Go ahead.
PSR,
MR. STAHL: Your Honor, obviously between the
[p.4]
***
Mr. Lauria is someone whose family is here in
court today to show their support and it has not been
easy. As your Honor is aware, Mr. Lauria cooperated
fully with the government immediately and extensively
in bringing upon not only himself, which is not a
concern to Mr. Lauria in particular, but to his family,
and to make amends for the acts that he did. Mr.
Lauria cooperated not only against other brokers and
money launderers, but also against organized crime,
which I think is laid out in both our submissions. And
that led to a number of threats against Mr. Lauria and
his family, including against his young daughter.
But, in addition to that, Mr. Lauria was the
person at White Rock, State Street Capital that had
been legitimately involved in the stock market
business, had signed all of the leases, and put his name
personally responsible for all of the money, and has
settled with every investor who has filed a suit. He has
settled with the creditors of those companies, from the
phone systems to the furniture leases, has not walked
away from it, did not declare bankruptcy, and did not
say I just can’t do this. He saw that he had to live up to
his responsibilities, that hePage 131 App. [p.5]
had completely gone off course from his upbringing
from a very humble background, hard-working, family
oriented, to live up to those financial responsibilities,
as well as his family responsibilities. And he, unlike
some other individuals involved in this, went out and
did the best he could and settled with those people. So
anyone that filed an action against the companies, or
Mr. Lauria or others, Mr. Lauria has settled with, and
has left him, as you can see from the financials, in
difficult financial shape, and obviously leaving his
family in difficult financial shape.
***
[p.6]
***
THE COURT: Who are all of these people that
you say he settled with, who are they?
MR. STAHL: They were investors that filed
lawsuits.
THE COURT: How many were those?
20.
MR. STAHL: I would say about between 15 and
THE COURT: That’s just a minuscule
percentage of the number of investors who were
defrauded, who suffered substantial losses as a result
of Mr. Lauria’s activity. Fifteen to 20 is not even a drop
in the bucket.
MR. STAHL: Your Honor, I understand. I’m not
putting Mr. Lauria up for a commendation at all. Mr.Page 132 App. Lauria committed a complicated stock fraud, as we
have seen too many times in this courtroom, and when
I have been before you on other matters, people who
start out legitimately, become greedy. They go on a
slippery slope and the next thing they know they are
involved in this. That’s not excusable. But my point to
your Honor is, Mr. Lauria has done what he can within
his own financial means, and the people that sought
claims, people that lost money in the investments, and
[p.7]
companies that had leased equipment to Mr. Lauria’s
company is not just his companies, but the people who
were involved with Mr. Lauria, and none of the other
partners have taken any of this action. This is
something Mr. Lauria has done in an effort to live up
to his responsibilities.
***
In addition to that, he has settled with the
people that came forward. Obviously Mr. Lauria could
not go out and track down each and every individual
investor and offer them a penny on each dollar that
was lost. He was one part of a very large group of
individuals. Most of them have been before your Honor,
24, I believe, individuals that the government directly,
through Mr. Lauria’s cooperation, was able to indict, in
addition to all of the other cases, including ongoing
cases that he has cooperated and still cooperates to this
day with the United States.
***Page 133 App. [p.9]
***
THE COURT: Mr. Stahl made reference to
threats which I see no reference to in your letter.
What do you know about that?
MR. CORNGOLD: The threats, your Honor, Mr.
Lauria reported them. They are described in Mr.
Stahl’s letter. Agent Taddeo is here. I think the answer
is, well, we were never able to identify who made the
threats, and that doesn’t mean that we don’t believe
that what he described didn’t exist. We were just never
able to track them down.
Is that fair?
AGENT TADDEO: That’s correct.
MR. STAHL: Your Honor, first we know in
particular there was the initial approach by a private
investigator hired by Mr. Persico, and that was
someone that Mr. Lauria had grown up in the
neighborhood with. So that’s one of the individuals that
he was very concerned about, because Mr. Persico
viewed as the ultimate act of betrayal.
Second, Mr. Lauria, the telephone call, I’m
talking about to his wife talking about how cute their
daughter is,
[p.10]
was traced to a phone booth a mile and a half away,
and was reported to the local police, and of course was
reported to Agent Taddeo and his squad at the time,
and I believe that was all verified. Obviously, as Mr.Page 134 App. Corngold said, they were never able to trace who made
the call, but it was certainly a clear message to Mr.
Lauria and his family.
***Page 135 App.
APPENDIX K
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
00-CR-1005 (NGG)
[Dated June 20, 2006]
________________________________
UNITED STATES OF AMERICA )
)
-against)
)
MICHAEL SHEFEROFSKY
)
a/k/a Mikhail Sater
)
)
Defendant
)
________________________________ )
U.S. Courthouse
Brooklyn, New York
SEALED PROCEEDING
June 20, 9:30 a.m.
BEFORE:
HONORABLE NICHOLAS G. Garaufis
United States District Judge
APPEARANCES:
For the Government:
LORETTA E. LYNCHPage 136 App. United States Attorney
271 Cadman Plaza East
Brooklyn, New York BY: THOMAS ALAN FIRESTONE
Assistant U.S. Attorney
For the Defendant:
MALMAN, MALMAN & ROSENTHAL
4040 Sheridan Street
Hollywood, Florida BY: MYLES H. MALMAN
and
STAHL & HORBLIT
47 Maple Street
Suite Summit, New Jersey BY: ROBERT G. STAHL
***
[p.2]
Court Reporter:
RONALD E. TOLKIN, RPR, RMR, CRR
Official Court Reporter
225 Cadman Plaza East
Brooklyn, New York 718-613-***
THE CLERK: Criminal cause for sentences.
Counsel, please state your appearances.
MR. STAHL: Good morning, Robert Stall and
Myles Malman on behalf of Michael Sheferofsky.Page 137 App. THE COURT: Good morning.
MR. FIRESTONE: Thomas Firestone for the
government.
***
[p.13]
***
THE COURT: Is there any restitution here?
MR. FIRESTONE: No. I believe that is
addressed in the addendum to the -THE COURT: Let me just take a look.
[p.14]
THE COURT: You agree with Probation?
MR. FIRESTONE: Yes, absolutely.
THE COURT: I just needed to cover that. Since
this case deals with an extortion restitution is often
part of the sentence.
MR. FIRESTONE: It would be except for the fact
as indicated in the probation report, the victims are
either unidentifiable, dead or were extorted of money
which was itself the proceeds of criminal activity.
THE COURT: All right.
***Page 138 App.
APPENDIX L
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
04-CR-234 (CBA)
[Dated January 11, 2008]
________________________________
UNITED STATES OF AMERICA )
)
v.
)
)
SALVATORE D. ROMANO,
)
)
Defendant. )
________________________________ )
January 11, Brooklyn, New York
TRANSCRIPT OF CRIMINAL CAUSE
FOR SENTENCING
BEFORE THE HONORABLE CAROL B. AMON
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Government:
United States Attorney’s Office
BY: JEFFREY GOLDBERG, ESQ.
Assistant United States Attorney
225 Cadman Plaza East
Brooklyn, New York 11201Page 139 App. For the Defendant:
MICHAEL F. BACHNER, ESQ.
Bachner & Herskovits, P.C.
26 Broadway
New York, New York Court Transcriber:
CARLA NUTTER
TypeWrite Word Processing Service
356 Eltingville Boulevard
Staten Island, New York ***
[p.35]
THE DEFENDANT: Of course, Your Honor,
please. I’m not minimizing that number. I would never
do that. All I’m trying to say is I have the ability to pay
back $10 million. I’m forty years old, I can work, I’m
earning money in the last two years -- six figures. I
expect that to go to a high six figures. If this case is
about the victims and me paying it back the only shot
I would have is working. That’s the only way I can do
that.
THE COURT: Well, that’s another issue. Let me
just ask the government. I get letters here that say, you
know, restitution can’t be calculated.
MR. GOLDBERG: It really can’t, Judge, with
respect to the securities fraud. I think Probation put it
best when they cited the statute involving
impracticable calculation.
I will note that there is an outstanding
restitution with respect to Mr. Romano’s 1992 case. AsPage 140 App. of July it was $675,000.00 that he owed. I know he has
resumed actively making payments on that but that is
a number that’s out there that -THE COURT: So what are the financial
penalties available here?
MR. GOLDBERG: Well, Probation has concluded
that he is unable to pay a fine. He’s obviously -- I mean
that report was filed September 2006 and Mr. Romano
is apparently doing much better now. I don’t know
what Probation’s position on
[p.36]
that is but he does have this outstanding balance of
$675,000.00 minus whatever payments he has made in
recent months.
***
THE DEFENDANT:
***
[p.37]
We’re pillars in our community now because
we’ve been there for three or four years now and if I
lose any of that momentum, obviously, it’s going to hurt
the victims that lost $40 million because I’m going to be
unable to pay.
THE COURT: Well, nobody knows who they are
so you’re not going to be able to pay them anyway. I
guess you have the restitution from Judge Dearie’s case
that you could pay.
***Page 141 App. MR. BACHNER:
***
[p.38]
***
One of the problems because it was impractical
if not impossible to find out who the victims were, it
was really hard or impractical to even determine, you
know, if an investor invested money, did he sell the
stock for a profit, did he lose any of that money? ...
***
[p.45]
***
MR. GOLDBERG: And I was reminded by
Probation that I believe Your Honor is making the
finding about restitution being impracticable under
3665.
THE COURT: I have nobody to order restitution
to because the information hasn’t been provided to me
and I accept the representation that it’s too difficult to
do.
MR. GOLDBERG: Thank you, Your Honor.
***Page 142 App.
APPENDIX M
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98-CR-[Dated June 14, 2010]
________________________________
UNITED STATES OF AMERICA, )
)
v.
)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
U.S. Courthouse
Brooklyn, New York
June 14, 12:00 o’clock p.m.
TRANSCRIPT OF MOTION HEARING
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES SENIOR JUDGE
APPEARANCES:
For the Movant:
KELLY MOORE, ESQ.
BRIAN HERMAN, ESQ.Page 143 App. For the Respondent:
RICHARD E. LERNER, ESQ.
LAUREN ROCKLIN, ESQ.
For Non-Party Movant:
STAMATIOS STAMOULIS, ESQ.
Court Reporter:
Anthony M. Mancuso
225 Cadman Plaza East
Brooklyn, New York (718) 613-***
[p.3]
***
THE COURT:
***
[p.5]
***
Now, with respect to your inquiries as to the
order which may have been issued, there is no formal
order which I believe is not issued by virtually any
judge in this courthouse with respect to sealing. I
notice the letter I got from you says facsimile under
seal and to the extent that I so ordered it, I have tacitly
approved it.
***Page 144 App. So there is no formal order, and to the extent
that you want to know what that order said and to
whom it was
[p.6]
addressed it’s a request which has no merit. I can’t
make an order sealing a document and saying this
document is sealed and not to be looked at by Mr.
Lerner, Mr. Stamoulis. It’s a document which is placed
under seal. It’s filed under seal. And if anybody wants
to see what it is that has been filed under seal, the
procedure is to make an application to the court to
unseal it.
***
[p.9]
***
So when your letter asks me to show you what
order is directed to Mr. Oberlander, there isn’t any.
***Page 145 App.
APPENDIX N
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CV 98-[Dated July 20, 2010]
________________________________
)
)
IN RE: JOHN DOE,
)
)
________________________________ )
United States Courthouse
Brooklyn, New York,
July 20, 10:30 o’clock a.m.
TRANSCRIPT OF ORAL ARGUMENT
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Plaintiff:
MORGAN LEWIS & BOCKIUS, LLP
101 Park Avenue
New York, N. Y.
BY: KELLY MOORE, ESQ.
LESLIE R. CALDWELL, ESQ.
DAVID A. SNIDER, ESQ.
BRIAN A. HERMAN, ESQ.Page 146 App. For the Defendant:
WILSON ELSER MOSKOWITZ EDELMAN
& DICKER, LLP
150 East 42nd Street
New York, N. Y. BY: RICHARD LERNER, ESQ.
LAUREN J. ROCKLIN, ESQ.
Court Reporter:
Henry R. Shapiro
225 Cadman Plaza East
Brooklyn, New York
718-613-HENRY SHAPRIO
***
[p.11]
***
THE COURT: Excuse me. Just a minute. Is
there some presumption that an order -- assuming that
there is an order and you do not know whether the
order was or was not signed -- what you do know by
looking at the docket sheet is that this is a sealed file,
sealed by order of the court.
Is there some presumption that the order is
invalid because it was not signed, is that what I’m
hearing?
case--
MS. LERNER: I’m referring to the HartfordPage 147 App. THE COURT: Mr. Lerner, I am asking you what
I am understanding, is there is a presumption of the
invalidity of an order?
MS. LERNER: I think, your Honor stated on the
record that this is just matter of factly and indicated as
I recall it wasn’t even signed, it’s docket said is sealed.
If there is a signed order, let us see it, because without
a signed order this proceeding is unconstitutional.
THE COURT: It may be, Mr. Lerner, that you
are correct. You are not answering the question.
MS. LERNER: I don’t have to make any
presumption. The United States Supreme Court has
held the appellate courts
[p.12]
do not have to presume there is a signed order in the
file when there is-THE COURT: If there is an order or docket entry
that says this has been sealed by order of the court, any
person is free to ignore that order and if by some
chance, some document in that file becomes available
to any person, that person is free to assume that the
order has no efficacy?
***
[p.13]
***
MS. LERNER: There is nothing in the record,
that we are aware of, because we cannot see the docket
sheet or the sealing order. There is nothing on the
order finding a more fundamental interest in the FirstPage 148 App. Amendment would be served by sealing this court file.
There is nothing on the record finding this was the
least restrictive alternative.
***
[p.14]
***
Now, your Honor, ordered -- the order itself
signed by your Honor incorporates Ms. Moore’s
arguments and it says for the reasons stated, but that
is constitutionally insufficient according to Amadao,
you must make independent findings to support a prior
restraint.
It must be the order itself. The TRO is a nullity.
Failing to make the requisite findings in the order to
show cause, in as much it constitutes a prior restraint,
renders that prior restraint unconstitutional.
***
[p.15]
***
MS. LERNER: Your Honor, you sealed the entire
docket, yet you indicated there are thirteen items in
the docket, six of which are sealed, which means there
are others which are not sealed and yet the entire file
has been sealed.
***
He returned, your honor, the original document
that he obtained from Mr. Bernstein.Page 149 App. Now, it may not be so clear in the record that he
-- those were actually the originals obtained from Mr.
Bernstein. If the Court would like a representation
from Mr. Oberlander to that effect, I would ask that he
give it. But those were the originals.
Your Honor can do nothing to stop the
dissemination of photocopies or electronic copies and
the selective enforcement or selective gag order
directed only at Mr. Oberlander and not, for example,
Business Week, ...
***
[p.16]
noted in our papers, has on its website an article which
states that it has a copy of the criminal -- the sealed
criminal complaint in this matter.
Your Honor, cannot selectively enforce a gag
order against Mr. Oberlander. You cannot gag him and
not gag Business Week.
If you’re going to take on a little guy you have to
take on a big guy. He’ll not sit here and accept that,
neither will I. We will fight this to the end. A
permanent injunction cannot be granted.
Thank you, your Honor.
***
THE COURT: Your application is granted to file
a supplemental brief.
There are a number of things, which are
troublesome in this case. Going back to the original
order to show cause, that document was troublesomePage 150 App. because it just said that there was a significant breach
in the processes of this Court with respect to criminal
dockets.
There was, as I think, indicated on that occasion,
I was very concerned about the integrity of the record
of this Court and that file. It turns out that the first
document on
[p.17]
that docket sheet is a notification by an assistant
United States attorney of the filing of an information,
which eventually evolved into an indictment.
There is no indication, that is docket number
one, which I obtained or had the clerk obtain from
Kansas city or wherever these files are shipped,
because it was no longer available in the courthouse.
There is not any indication in that document or in a
subsequent document that an application was made or
request was made in that document to seal that file.
Nor have I been able to find any order signed by me,
which directed that this file be sealed.
***
Let us assume for the moment that an order was
signed by me somewhere along the line, as it may have
been, directing that the file in this case be sealed. That
order is directed to whom? Who is bound by it? That
order, it would appear, is directed to the clerk of the
court who is informed that this document or this file is
sealed and is not to be made available, except upon an
order of the Court unsealing it.Page 151 App. into
When the order to show cause was first brought
[p.18]
this Court, it was a very serious concern as to whether
somebody in this courthouse unsealed that file or made
document which were sealed available to third parties.
That was a very significant concern.
A hearing, which we held some weeks ago,
makes it plain and, I think, it is beyond dispute that
these documents were not removed by John Doe, he
properly had them. The cooperation agreement was a
document which was in the possession of his then
attorney. His attorney had a perfect right, as did John
Doe, to have a copy of that cooperation agreement, had
a perfect right to have whatever document pertained to
his case, which may have been part of the file.
Assume that John Doe decided to make the
cooperation agreement, the proffer agreement available
to a third-party, would an order have been violated?
The answer is clearly, no. John Doe had these
documents, so the testimony has thus far revealed, Mr.
Bernstein has not submitted an affidavit nor has he
testified. You cannot find him for the purpose of
serving the subpoena.
What we have on the record is the testimony by
John Doe that he did not give those documents to Mr.
Bernstein, which gives rise to the legitimate inference
that Mr. Bernstein may have stolen them, may have
improperly obtained those documents.
What order of ...Page 152 App. ***
[p.19]
Those documents then came into the hands of Mr.
Oberlander. Mr. Oberlander knew that those
documents were sealed documents, contained very,
very serious information and his assertion or testimony
that, well, it wasn’t his words, it was his client’s words,
is remarkable for it’s disingenuous. To say that I am
not a criminal lawyer and I don’t know what it meant,
I have a sealed document, is preposterous. Particularly,
since he had the electronic filing information from the
Southern District that said if it’s a cooperation
agreement, be very, very careful before you use it.
Now, what happened, assuming that the
documents were in John Doe’s cabinet or in his desk, as
they had a perfect right to be, they were his documents,
and the documents were then wrongfully taken by Mr.
Bernstein. Mr. Bernstein is a converter, Mr. Bernstein
has no title to those documents, no legal right to those
documents, to that tangible document whether it would
be a piece of paper, whether it be a gold ring or
whatever it is, it was a tangible item which was
converted, given the testimony that I have by Mr.
Bernstein -MS. LERNER: John Doe, I believe. Bernstein did
not testify.
THE COURT: I am saying based on the
testimony. Mr. Bernstein then analogizing these events
to the fundamental principle of conversion, or larceny,
if you will, past it onto Mr. Oberlander.Page 153 App. [p.20]
Mr. Oberlander had no better right to those
documents than Mr. Bernstein had. If we were to
describe this change of events in terms of property
rights, title, Mr. Bernstein had no title and he had no
title to give to Mr. Oberlander.
Mr. Oberlander even if he were an innocent
purchaser for value, would not have acquired title to
those documents, because Mr. Bernstein had no title to
give him. If requests were made of Mr. Oberlander to
return those documents and Mr. Oberlander refused, it
may be that an action for conversion may be available
against Mr. Oberlander.
It may be that there is some disciplinary rule,
which might be applicable to Mr. Oberlander, who had
documents which he knew or perhaps should have
known may have been improperly obtained by
Bernstein and passed onto him.
It may be that there is some ethical principle,
which should have precluded Mr. Oberlander from
using those documents. Because the sensitivity of those
documents would have been apparent to any
reasonable person, particularly one who is trained in
the law ostensibly.
So the question is, yes, something bad was done,
something very bad and perhaps despicable was done
by the use of those documents annexed to a complaint
in the Southern District, in a civil case, but the
question is what order was violated?
***Page 154 App. [p.22]
***
What I have just declared is not to be understood
at this moment as a determination that injunctive
relief may not be appropriate, but I am troubled by the
issues as I have outlined them as to whether an order
signed by a judge on one of those sealing envelopes,
which says, not to be unsealed except by order of the
Court, is binding upon any third-party person, is
binding or is the procedure, which is intended by that
procedure, which informs any third-party who has
notice or will have notice by looking at a docket sheet,
looking at the ECF, this is a case under seal -- under
sealed or filed under seal-- make application to the
Court to unseal the document.
Whether having knowledge that the case was
one, which
[p.23]
has been filed under seal, whether an order was issued
or not, it is a case which is filed under seal, and clearly
indicates the content of that sealed file is not to be
disclosed, except upon order of the Court, whether that
can be ignored, whether that is presumptively
meaningless and has no binding effect upon anybody.
***
[p.25]
***
MS. MOORE: Your Honor, in light of Mr.
Lerner’s lastPage 155 App. [p.26]
submission, I would seek clarification with respect to
the PSR that it’s clear -THE COURT: Before you get to that. Am I
correct that the documents, at least Mr. Lerner’s last
submission says this whole proceeding now is moot
because the documents have been surrendered, turned
over to you, is that correct?
MS. MOORE: Not that I know of. I think, as I
understand his position, which I don’t agree with, he’s
entitled to keep all copies of the documents, as long as
he returned the originals, so, I believe, in his letter he
states that if at the court proceeding he marked as
exhibits the original versions of those documents, but
his client has maintained both electronic and hard
copies, so clearly the intent was not to give back, as
Judge Jones ordered in Visa, all copies as well. It
doesn’t get the originals back and are free to
disseminating copies.
THE COURT: I think, I indicated Mr.
Oberlander should not do that. I think it was in the
form of an order and that order, I believe, if I have not
done so, I am doing it now and if you want it in writing
until I resolve this issue.
MR. LERNER: You are issuing a further TRO?
THE COURT: Yes, I am.
I’m issuing a further TRO for the reasons that I
have indicated.
I think there is irreparable harm, which is
imminentPage 156 App. [p.27]
to Mr. John Doe, those documents contained
information which is highly, highly sensitive and if
disseminated it is discriminatively to a person that
should not get the information.
I think, it would put Mr. John Doe’s safety at
risk. The likelihood of success is or is not present.
Again, if Charmer Industies is being read correctly by
me and, I think, it is, I think, the burden with respect
to whether or not there is some need to maintain those
documents or to keep them should be shifted to you.
Until next week, okay.
I do not think we need any further hearing. You
will submit the briefs and I will make my
determination. The TRO is continued for another ten
days.
Is there anything further?
MS. MOORE: No, your Honor.
THE COURT: Thank you.
MS. MOORE: I do have one last application.
With respect to the transcript to have my client’s name
replaced with John Doe.
THE COURT: Yes.
MS. MOORE: Thank you.Page 157 App.
APPENDIX O
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-Tel: 212.309.Fax: 212.309.www.morganlewis.com
Morgan Lewis
COUNSELORS AT LAW
Kelly A. Moore
Partner
212.309.kelly.moore@MorganLewis.com
August 12, TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Court
225 Cadman Plaza East
Brooklyn, New York Re:
United States v. Doe, 98 CR 1101 (ILG)
Dear Judge Glasser:
We represent John Doe, the movant on an application
for injunctive relief with respect to certain sealed and
confidential documents.
We are in receipt of Mr. Lerner’s letter of this morning.
While we disagree with his characterizations, we agreePage 158 App. that, if the Court so-orders the standstill, a hearing
tomorrow is unnecessary.
We reserve our rights to seek clarification of the
Court’s orders in the event the standstill is terminated.
We also reserve our rights with respect to Josh
Bernstein’s non-compliance with the Court’s order.
Respectfully,
/s/Kelly A. Moore
Kelly A. Moore
cc: Richard Lerner, Esq. (by email)
Stam Stamoulis, Esq. (by email)
AUSA Todd Kaminsky (by email)
DBI/65437647.[Handwritten Note: The standstill agreement has been
“so ordered” and the hearing rescheduled for August
13th, 2010 is hereby adjourned [ ] So ordered I.L.
Glasser USDJ 8/14/10]Page 159 App.
APPENDIX P
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-Tel: 212.309.Fax: 212.309.www.morganlewis.com
Morgan Lewis
COUNSELORS AT LAW
Kelly A. Moore
Partner
212.309.kelly.moore@MorganLewis.com
August 12, TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Court
225 Cadman Plaza East
Brooklyn, New York Re:
United States v. Doe, 98 CR 1101 (ILG)
Dear Judge Glasser:
We represent John Doe, the movant on an application
for injunctive relief with respect to certain sealed and
confidential documents.
Enclosed please find a stipulation of standstill by and
among movant and respondents, which we respectfully
request that the Court so-order as soon as possible.Page 160 App. Respectfully,
/s/Kelly A. Moore
Kelly A. Moore
cc: Richard Lerner, Esq. (by email)
Stam Stamoulis, Esq. (by email)
AUSA Todd Kaminsky (by email)
DBI/65437647.1Page 161 App. UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101 (ILG)
FILED UNDER SEAL
________________________________
UNITED STATES OF AMERICA, )
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
STIPULATED STANDSTILL ORDER
WHEREAS Frederick M. Oberlander and Jody Kriss
(together with Michael Ejekam, “Respondents”), but
not Michael Ejekam, are in possession of paper (but not
originals) or electronic copies of certain documents (the
“Documents”) related to a certain criminal matter
referenced by Case No. 98-CR-1101 (the “Criminal
Matter”);
WHEREAS certain of the Documents and information
therefrom were appended to, cited, quoted or
referenced in a complaint (“SDNY Complaint”) filed in
a civil action captioned Kriss et al. v. Bayrock Group
LLC el al., No. 10 CV 3959 (the “SDNY Action”).
WHEREAS the Court has issued one or more orders, be
they temporary restraining orders (“TROs”) or
injunctions or other orders or decrees of whatever kind,Page 162 App. concerning the Documents and the Respondents have
appealed therefrom;
WHEREAS John Doe (the “Movant”) seeks further
relief from the Court concerning the Documents
including an injunction concerning dissemination (the
“Further Requested Relief”);
WHEREAS Movant contends that he has a right to the
return of the Documents and that Respondents may
not use the Documents or information therefrom;
WHEREAS Respondents contend that the current
orders and the Further Requested Relief are improper,
violate certain constitutional rights, and are
procedurally invalid;
WHEREAS the parties have submitted memoranda
and declarations in support of their respective
positions;
WHEREAS pursuant to an order of the Court, Movant
was scheduled to file a supplemental memorandum of
law (the “Supplemental Memorandum”) on July 27,
2010, which date was adjourned by agreement of the
parties;
WHEREAS counsel for Movant and Respondents are
engaged in discussions to achieve a mutually
acceptable resolution of proceedings before the Court
concerning the Documents and the Further Requested
Relief (a “Settlement”) prior to entry by this Court of an
order addressing the Further Requested Relief (the
“Order”);
WHEREAS counsel signing this stipulated standstill
order represent that they are authorized to enter thisPage 163 App. stipulated standstill order on behalf of their respective
clients;
NOW THEREFORE, Movant and Respondents, by and
through their undersigned counsel, hereby stipulate
and agree to, and request that the Court enter an order
providing for, the following:
1. Stay of Proceedings in this Action; Status Quo
Maintained:
a. Movant’s time to file the Supplemental
Memorandum is adjourned until September 27,
2010, unless this agreement is terminated
earlier pursuant to paragraph 4 below. If the
agreement is terminated prior to September 27,
2010, then the Supplemental Memorandum
shall be filed within one week of the termination
date;
b. The Court shall not issue the Order or any other
relief of any kind not presently in existence at
the time of execution hereof, prior to submission
of the Supplemental Memorandum;
c. Pending a Settlement or issuance of the Order,
Respondents (and their agents or anyone acting
at the direction of Respondents) may not
disseminate the Documents or information
obtained therefrom except as may be required
for purposes of Respondents’ pending appeal, in
which case the provisions of Paragraph 3.e shall
be applicable;
d. While this stipulated standstill order is in effect,
Respondents (and their agents or anyone actingPage 164 App. at the direction of Respondents) shall not file
any application to unseal the Documents;
2. The SDNY Action:
a. Judge Buchwald may be provided a copy of this
stipulated standstill order;
b. Respondents shall make an application to Judge
Buchwald for a 60 day extension of their time to
serve the SDNY Complaint on the defendants in
the SDNY Action;
c. Respondents reserve the right to provide each of
the defendants in the SDNY Action a redacted
copy of the SDNY Complaint. Movant and
Respondents shall promptly meet and confer in
good faith concerning the redactions. The
redacted version of the SDNY Complaint shall
not include the Documents as exhibits and shall
not include references to, quotations of or
information derived from the Documents;
d. In no event shall Respondents serve an
unredacted copy of the SDNY Complaint or the
Documents as exhibits prior to issuance of the
Order;
e. Nothing herein shall preclude Respondents from
filing and serving an amended complaint in the
SDNY Action that does not include the
Documents or references to, quotations of or
information derived from the Documents;
f. It is understood that in the further proceedings
before Judge Buchwald, Movant’s counsel will be
permitted to communicate directly withPage 165 App. respondent Oberlander, in his capacity as
counsel for respondents Kriss and Ejekam and
as counsel for those whom either or both may
represent in their derivative capacities.
3. Appeals
a. Respondents have filed a notice of appeal from
certain orders of the Court, and in the event the
Court grants the Order in whole or in part, it is
anticipated that Respondents may file additional
appeals;
b. In the event the Court denies the Order in whole
or in part, it is anticipated that Movant may file
an appeal;
c. The parties reserve their rights to make all
arguments on appeal, and nothing herein shall
constitute a waiver of any such rights;
d. Nothing herein shall prevent Movant from
seeking an order to preserve the status quo
pending any appeal;
e. If, during the pendency of this standstill,
Respondents determine that they are required to
submit the Documents or information derived
therefrom to the Second Circuit in connection
with their pending appeal, Respondents shall
provide reasonable advanced notice of any such
filing to Movant and to the United States
Attorneys Office for the Eastern District of New
York so that Movant and/or the United States
Attorneys Office for the Eastern District of New
York may make an application to have the
materials sealed.Page 166 App. 4. Termination of the Stipulated Standstill Order
a. Any party may terminate this stipulated
standstill order on 7 calendar days’ advance
written notice for any reason, which notice shall
be served on the undersigned counsel by
(a) overnight mail and (b) by facsimile or email.
b. Unless so terminated, this stipulated standstill
order shall terminate on September 27, 2010;
5. Reservation of Rights
a. Except as otherwise stated herein, the parties
reserve all of their respective rights, claims and
arguments;
b. No party will argue that, by entering into this
stipulated standstill order, the other party has
conceded the validity of any order of the Court or
the Further Requested Relief, or any argument
or claim raised by the other party, or waived the
right to make any argument or claim;
c. Movant will not argue that by entering into this
standstill Respondents implicitly agreed that
there was no emergency or waived or are
estopped from asserting any claim of emergency
for emergency or expedited appeal or
mandamus, the parties hereto agreeing that the
primary purpose of this agreement is to
accelerate resolution of this dispute without
waiting for further rulings and appeals.
6. This agreement shall become valid only upon the
execution by all three signatories hereto.Page 167 App. Dated: New York, New York,
July 8/12/,
MORGAN, LEWIS & BOCKIUS LLP
By: /s/Brian A. Herman
Brian A. Herman
Attorney for Movant John Doe
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
By:/s/Richard E. Lerner
8/11/
Richard E. Lerner
Attorneys for Respondent Fred Oberlander
STAMOULIS & WEINBLATT LLC
By:/s/Stamatios Stamoulis
8/12/
Stamatios Stamoulis
Attorney for Respondents Jody Kriss and Michael
Ejekam
SO ORDERED
/s/
8/12/DBI/65300802.4079191.1Page 168 App.
APPENDIX Q
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101 (ILG)
FILED UNDER SEAL
[Dated September 27, 2010]
________________________________
UNITED STATES OF AMERICA, )
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
AMENDMENT TO STIPULATED
STANDSTILL ORDER
WHEREAS John Doe (the “Movant”) and Frederick M.
Oberlander and Jody Kriss (together with Michael
Ejekam, “Respondents”) executed a Stipulated
Standstill Order so ordered by the Court on August 12,
2010 (the “Standstill Order”);
WHEREAS the Standstill Order is scheduled to
terminate on September 27, 2010;
WHEREAS the parties have agreed to extend the term
of the Standstill Order;Page 169 App. NOW THEREFORE, Movant and Respondents, by and
through their undersigned counsel, hereby stipulate
and agree to, and request that the Court enter an order
providing for, the following:
1. Paragraph “1.a.” of the Standstill Order is
amended to state as follows:
Movant’s time to file the Supplemental
Memorandum is adjourned until January 14,
2011, unless this agreement is terminated
earlier pursuant to paragraph 4 below. If the
agreement is terminated prior to January 14,
2011, then the Supplemental Memorandum
shall be filed within one week of the termination
date.
2. Paragraph “4.b.” of the Standstill Order is
amended to state as follows:
Unless so terminated, this stipulated standstill
order shall terminate on January 14, 2011.
3. All other terms in the Standstill Order remain
unchanged.
Dated:
New York, New York,
September 27,
MORGAN, LEWIS & BOCKIUS LLP
By:/s/Brian A. Herman
Leslie R. Caldwell
Kelly A. Moore
Brian A. Herman
Attorney for Movant John DoePage 170 App. WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
By:/s/Richard E. Lerner
Richard E. Lerner
Attorneys for Respondent Fred Oberlander
STAMOULIS & WEINBLATT LLC
By:/s/Stamatios Stamoulis
Stamatios Stamoulis
Attorney for Respondents Jody Kriss and Michael
Ejekam
SO ORDERED
/s/I.L.Glasser
USDJ
9/27/DBI/65634538.2Page 171 App.
APPENDIX R
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-Tel: 212.309.Fax: 212.309.www.morganlewis.com
Morgan Lewis
COUNSELORS AT LAW
Kelly A. Moore
Partner
212.309.kelly.moore@morganlewis.com
November 16, VIA FACSIMILE
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Judge
United States District Court
225 Cadman Plaza East
Brooklyn, New York Re:
United States v. Doe, 98 CR 1101 (ILG)
Dear Judge Glasser:
We represent the movant John Doe in the abovecaptioned matter. I am writing to advise Your Honor
that the Respondents have elected to terminate the
current standstill agreement in this matter effectivePage 172 App. November 17, 2010. Pursuant to the standstill
agreement, we have until November 24, 2010 to submit
a supplemental memorandum of law in support of our
application for relief, including an order directing the
Respondents to return or destroy all copies of the
sensitive and confidential documents in their
possession that were taken from our client without his
consent or knowledge and that relate to a sealed
criminal matter. I have spoken to AUSA Todd
Kaminsky and he has advised me that the government
also intends to file a submission in this matter by
November 24, 2010, setting forth its position that this
Court has the authority to order the return or
destruction of the documents and materials at issue.
Respectfully,
/s/Kelly A. Moore
Kelly A. Moore
cc: Richard Lerner, Esq.
Stam Stamoulis, Esq.
AUSA Todd Kaminsky
AUSA Peter Norling
DBI/66039901.1Page 173 App.
APPENDIX S
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
03cr[Dated November 17, 2010]
________________________________
UNITED STATES OF AMERICA , )
)
v.
)
)
MYRON GUSHLAK,
)
)
Defendant.
)
________________________________ )
U. S. Courthouse
Brooklyn, New York
November 17 , 11:15 p.m.
TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE
NICHOLAS G. GARAUFIS
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Government:
LORETTA E. LYNCH, ESQ.
United States Attorney
By: DANIEL SPECTORPage 174 App. Assistant U.S. Attorney
271 Cadman Plaza East
Brooklyn, New York For the Defendant:
ALAN FUTERFAS, ESQ.
Also Present;
Charles Linehan,
Assistant District
Attorney, NY County
Court Reporter:
Burton H. Sulzer
225 Cadman Plaza East
Brooklyn, New York (718) 613-Fax # (718) 613-***
[p.2]
(Open court-case called-appearances noted.)
THE COURT: Sorry for the delay.
This is a sentencing proceeding for Myron L.
Gushlak. Mr. Gushlak, are you satisfied with the
assistance that your attorney has given you thus far in
this matter?
THE DEFENDANT: Yes , sir.
***Page 175 App. [p.27]
***
THE COURT: The government offers three
grounds for concluding that the defendant has not
accepted. One is that it’s not warranted because of the
obstructive conduct, which we have already discussed,
and the second is that the Kealy e-mail in which he
stated that he has no criminal record and has never
had a run-in with the SEC constitutes a basis for
denying him acceptance of responsibility , and the third
is his involvement in the alleged German stock fraud.
So on the Kealy e-mail, could you just briefly
speak to that.
MR. SPECTOR: Certainly, your Honor.
THE COURT: Then I’ll hear briefly from the
other side -- briefly and briefly.
MR. SPECTOR: There are a number of
disturbing aspects to the Kealy e-mail.
First of all, the context in which it’s made in
which he not only says I have no criminal record but
attaches the dismissal order from the complaint in this
case is clearly intended to convey the false impression
that the charges in the case were dismissed.
***Page 176 App. [p.28]
***
THE COURT: What about the argument that
pursuant to his cooperation agreement he was not to
disclose the circumstances of his cooperation?
MR. SPECTOR: He should have contacted his
attorney and brought that to our attention and we
could have dealt with it appropriately.
That doesn’t give him a license to lie ...
***
Certainly, I can understand no one wants to be
a witness in any case, particularly an organized crime
case, but at the same time, the timing of this e-mail
suggests that his
[p.29]
real motive, or at least a major component of his real
motive, was to avoid public disclosure of the truth, that
is his criminal conduct, because if people who deal with
him in his business know the truth about him, they are
obviously going to be less likely to deal with him.
***
[p.57]
***
THE COURT: Then there is also the issue of thePage 177 App. [p.58]
amount of assets that’s available to pay a fine and for
restitution. Have you figured out whether restitution
can be ascertained as to the charges to which the
defendant pleaded guilty?
MR. SPECTOR: I believe it can.
Just so the court understands, there was
litigation about that in Appel. Our view then and now
is that Judge Gleeson incorrectly calculated restitution.
We’re prepared to address that issue, but our
view was, it wasn’t the best procedure, it sort of bogs
down what is a fairly bogged down proceeding by
adding that today when we can deal with it within days permitted by the statute. So that’s our
application.
THE COURT: All right.
***
[p.68]
***
THE COURT: He could have put them into
Commonwealth or Fidelity and they increased in value
too, but what he did is, he put them in a trust for the
benefit of his children beyond the reach of himself to
pay any fine or provide any restitution for the crimes to
which he’s pleaded guilty,
[p.69]
that’s all I’m saying.Page 178 App. This was a conscious choice to protect these
funds. He was just protecting the funds, he’s saying, for
the benefit of his children, but he was also protecting
the funds, in effect, to keep them out of the reach of the
court.
***
[p.87]
***
MR. SPECTOR: I appreciate that, Judge, thank
you. An analogy we often see where it does come into
play is, for example, a felon in possession case where
the defendant committed a murder somewhere else
that couldn’t be proven up or wasn’t proven up beyond
a reasonable doubt, but can be proven up by a
preponderance of the evidence at the
[p.88]
sentencing for the felon in possession.
This case shouldn’t be treated any differently
just because it’s a more complicated fact pattern. When
you looked at the facts as we discussed extensively this
morning, there are three witness statements who all
say the same thing, and that is the defendant
committed securities fraud.
When you asked the defense what they had to
counter that, their answer essentially was, well, he
hasn’t been charged in Germany, which really isn’t any
answer at all. So the German fraud by itself in our view
completely eviscerates the cooperation credit.Page 179 App. But, as you know, that is not the only problem.
There is also the Kealy e-mail, which the court has
already discussed, and there is also something we have
not talked with today and that his posting repeatedly
on his Website the GlobalNet Company as an example
of a company he helped to take public.
We attached printouts from the Website in our
sentencing submission. That by itself is another fraud.
That is a fraud in the inducement because if clients
really knew the truth about GlobalNet, they would be
very unlikely to deal with the defendant.
The reason this is so important when you try to
evaluate the cooperation credit is, you can imagine
what would have happened if we had put him on the
witness stand in some
[p.89]
of those cases we contemplated and this came out on
cross. It would have been a complete disaster; he would
have been total think discredited as a witness, he
wouldn’t be usable to us as a witness and a person like
that, who does these things essentially behind the back
of the government for years, is not entitled to any
credit for cooperation.
***
The second is the fine. As the court’s noted
already, he put $50 million outside the reach of this
court or, as far as I can tell, any court. Because those
two avenues are not available a higher range ofPage 180 App. imprisonment should be imposed than might otherwise
have been.
***Page 181 App.
APPENDIX T
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
11-[Filed May 18, 2012]
____________________________________________
UNITED STATES OF AMERICA,
)
Appellee,
)
)
—against—
)
)
MYRON L. GUSHLAK,
)
Defendant-Appellant )
____________________________________________ )
To Be Argued By:
DANIEL A. SPECTOR
On Appeal From The United States District Court
For The Eastern District of New York
BRIEF FOR THE UNITED STATES
LORETTA E. LYNCH,
United States Attorney,
Eastern District of New
York.Page 182 App. AMY BUSA,
Daniel A. Spector,
Assistant United States Attorneys,
Of Counsel.
***
[pp.9-10]
***
IV.
Gushlak’s Breach
Agreement
Of
His
Cooperation
While Gushlak provided the assistance to law
enforcement authorities noted above, he also breached
his obligations under the cooperation agreement in
numerous ways. After learning of Gushlak’s conduct,
the government summoned Gushlak to a proffer
session in December 2009 and confronted him with
evidence of his breach. Immediately after the proffer
session, the government sought to revoke Gushlak’s
bail. The district court conducted a bail revocation
hearing and denied the government’s application but
ordered the government to conduct a full investigation
and bring all relevant facts to the court’s attention at
sentencing. (JA 244, 294).
A. Gushlak’s Abuse Of The Secrecy Of His
Cooperation To Deceive Business Partners
Gushlak exploited the fact that his case remained
sealed by lying to business associates concerning his
criminal past. (JA 167).First , in an email exchange in
2007 with Bob Kealy, the case CEO of a company with
whom Gushlak was doing business, Kealy questioned
Gushlak concerning his criminal past. (JA 167-68). InPage 183 App. response, Gushlak attached a copy of the dismissal of
the Hy-Tech Complaint and continued as follows:
I have no criminal record in any country period.
Also please note that I have no SEC violations
nor have I ever crossed paths with the SEC ever.
Please have me removed from the report before
it goes anywhere and confirm this to me in
writing tomorrow .
***
In addition, a review of the website for Gushlak’s
company, Blue Water Partners, in December revealed that Gushlak listed Global Net (the stock
fraud for which he pled guilty in this case) as an
example of companies that Gushlak had “taken public
over the years.” (JA 233-37).
B. Allegations Of A German Stock Fraud
In approximately 2008, the government learned
that Gushlak was under investigation in Germany for
a stock fraud involving three companies traded in
Germany: Star Energy, Star Gold
***Page 184 App.
APPENDIX U
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
PN: EK: TK
F. #1998R
271 Cadman Plaza East
Brooklyn, New York November 23,
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Judge
Eastern District of New York
225 Cadman Plaza East
Brooklyn, NY Re:
United States v. Felix Sater
Criminal Docket No. 98 CR 1101 (ILG)
Dear Judge Glasser:
The government writes with respect to whether the
Court has the authority to order Frederick Oberlander,
Esq. to return the sealed documents in his possession
from the above-captioned case and to enjoin him from
disseminating those documents. The Court does have
such authority. Moreover, such an order is necessary to
prevent Mr. Oberlander from undermining the Court’s
orders, to protect Felix Sater and to prevent the abuse
of the sealing process in this district.Page 185 App. I. Legal Discussion
A. The Court Has Authority Over Mr. Oberlander
Pursuant to the All Writs Act
The All Writs Act provides that “[t]he Supreme
Court and all courts established by Act of Congress
may issue all writs necessary or appropriate in aid of
their respective jurisdictions and agreeable to the
usages and principles of law.” 28 U.S.C. § 1651(a).
Under the Act, a federal court possesses the power to
“issue such commands . . . as may be necessary or
appropriate to effectuate and prevent the frustration of
orders it has previously issued in its exercise of
jurisdiction otherwise obtained.” Pennsylvania Bureau
of Corr. v. U.S. Marshals Serv., 474 U.S. 34, 40 (1985)
(quoting United States v. New York Telephone Co., U.S. 159, 172 (1977)). The Act is to be used only when
necessary and when there is no applicable statutory
***Page 186 App.
APPENDIX V
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
MM: EK: TK
F. #1998R
271 Cadman Plaza East
Brooklyn, New York March 17,
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Judge
Eastern District of New York
225 Cadman Plaza East
Brooklyn, New York Re:
United States v. Felix Sater
Criminal Docket No. 98 CR 1101 (ILG)
Dear Judge Glasser:
The government writes in response to Mr. Lerner’s
letter, dated February 3, 2011, demanding that the
Court “immediately docket all events that have
occurred in this case, from its inception.” For the
reasons stated below, the government believes that
specific docket entries and documents that do not
directly reference the defendant’s cooperation may be
unsealed at this time. However, those documents in
which the defendant’s cooperation is made plain shouldPage 187 App. remain sealed in order to ensure the defendant’s safety,
among other reasons. The government will submit a
separate, sealed letter, available to the defendant but
not to the intervenors or the public, detailing each
docket entry and related document and making specific
recommendations as to each.***
Analysis
In essence, the Second Circuit’s cases concerning
sealing require the Court to balance the public’s
qualified First Amendment and common law right to
judicial documents against other compelling factors.
Here, the compelling factors at issue are the safety of
the defendant and his family and law enforcement’s
interest in procuring cooperation from other defendants
now and in the future. That the government revealed
the defendant’s criminal conviction in the March 2,
2000 press release necessarily influences that
balancing test. The government has no information
that any person has sought to harm the defendant or
his family since the press release was issued, nor that
the government’s ability to secure cooperation has been
Although an appeal of this Court’s permanent injunction with
respect to the Presentence Report (the “PSR”) is currently pending
before the Second Circuit Court of Appeals, this Court nevertheless
has the jurisdiction to issue rulings with respect to sealing that do
not concern the PSR. “[T]he filing of a notice of appeal only divests
the district court of jurisdiction respecting the questions raised and
decided in the order that is on appeal.” New York State Nat. Org.
for Women v. Terry, 886 F. 2d 1339, 1350 (2d Cir. 1989). If an
appeal is taken from a judgment that “does not determine the
entire action,” the district court “may proceed with those matters
not involved in the appeal.” Id.Page 188 App. negatively affected. Therefore, there is not a compelling
need for the continued sealing of those docket entries
and documents that reveal no more information than
was disclosed in the press release. Thus, the
government advocates the unsealing of those docket
entries and documents that merely reflect the fact that
Mr. Sater was a defendant in the Eastern District of
New York who pleaded guilty to participating in a
RICO conspiracy and was sentenced for the commission
of that offense. However, those docket entries and
documents that disclose the fact that the defendant
cooperated with law enforcement authorities should
remain under seal.
I. Documents and Entries to be Unsealed
Accordingly, the following entries and documents
should be unsealed: 1) the docket itself should be
unsealed as a necessary prerequisite to the disclosure
of all other items listed below; 2) the defendant’s name
on the docket sheet should be changed from John Doe
to Felix Sater; 3) the fact of the defendant’s conviction,
including the date of his guilty plea, the crime to which
he pleaded guilty and the criminal information should
all be unsealed. These entries and items do not
mention the defendant’s cooperation and reveal little
more than that which was previously revealed in the
press release. In addition, the public docket should
reflect the date of the defendant’s sentencing and the
sentence issued by the Court. As will be discussed
below, while several aspects of the defendant’s
sentencing should remain sealed, the public’s
understanding of how a particular defendant is
sentenced is “important to the proper functioning of . . .
judicial proceedings” and the public’s understanding ofPage 189 App. whether justice was properly meted out. See United
States v. Alcantara, 369 F.3d 189, 198 (2d Cir. 2005)
Also, while there is little support for the proposition
that scheduling orders enjoy a presumption of access
under the First Amendment, see United States v.
Sattar, 471 F. Supp.2d 380, 389-90 (S.D.N.Y. 2006), the
government does not object in this case to the
unsealing of those entries and documents that merely
reflect the scheduling of the case and other ministerial
requests and orders made and issued by the parties
and the Court.
***Page 190 App.
APPENDIX W
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98-CR-[Dated April 1, 2011]
________________________________
UNITED STATES OF AMERICA )
)
-against)
)
JOHN DOE,
)
)
DEFENDANT,
)
________________________________ )
U.S. Courthouse
Brooklyn, New York
April 1, 11:00 o’clock a.m.
TRANSCRIPT OF HEARING
BEFORE THE HONORABLE BRIAN M. COGAN
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Government:
LORETTA LYNCH
United States Attorney
147 Pierrepont Street
Brooklyn, New York 11201Page 191 App. BY: TODD KAMINSKY
Assistant U.S. Attorney
For John Doe:
MICHAEL BEYS, ESQ.
NADER MOBARGHA, ESQ.
For Mr. Roe:
RICHARD LERNER, ESQ.
DAVID SCHULZ, ESQ.
Court Reporter:
SHELDON SILVERMAN
Official Court Reporter
225 Cadman Plaza East
Brooklyn, New York (718) 613-***
[p.11]
***
MR. KAMINSKY: Very briefly. The Second
Circuit mandate does specifically entrust your Honor
with enforcing the district court’s orders. One such
order that still has not been complied with -- it is
baffling -- they still maintain the very orders that are
subject to the injunction and the TRO. The case that
was handed up to your Honor earlier before by Mr.
Beys, the in re contempt proceedings of Gerald
Crawford, specifically state that a litigant does not
have the ability to say “I’m going to violate the order,
hold on to this stuff and wait for the circuit to prove I’m
right.” He must hand over and/or place those
documents in some type of transitory place and wait forPage 192 App. the circuit to rule, but he still has them, in direct
contravention of the court’s order saying give them
back, give them to the U.S. Attorney’s Office. No one
gave anything.
THE COURT: The directive to give them back is
in Judge Glasser’s order, not the circuit, right?
MR. KAMINSKY: Right.
MR. LERNER: I would like to object to that
statement, your Honor. There is no order directing the
destruction of electronic copies or return of photocopies.
[p.12]
The original that was provided to Mr. Roe by Mr.
Bernstein, lawfully, at that, was handed up to court. It
is in the court’s possession. It was stated at the
hearings that the original has been returned.
Therefore, there is no further original to be returned
and there are only electronic copies.
THE COURT: Mr. Kaminsky, quote for me the
portion of the order upon which you are relying. Direct
me to that.
MR. KAMINSKY: The Second Circuit mandate
of yours or Judge Glasser’s order to them?
THE COURT: I assume you will agree with me
the Second Circuit’s order in and of itself does not
require the return of either originals or copies, right? It
incorporates Judge Glasser’s orders?
MR. KAMINSKY: That’s correct. It says you
have the limited mandate of implementing and
overseeing compliance with our orders and the previousPage 193 App. orders entered by Judge Glasser. That’s a quote. One of
those orders, your Honor, because I’m currently
immersed in drafting the appeal, I have two hearings
singed into my head and at the end of the July 20th
proceeding, Mr. Doe’s counsel at the time, Ms. Moore,
says specifically to Judge Glasser we would like you to
include in the TRO copies of the documents because
although Mr. Roe is telling you he’s given them back to
you, what good is that if he has the copies? The judge
said I agree. Mr. Learner’s response is are you issuing
a further
[p.13]
TRO? The judge says I am.
THE COURT: I need to see that. I’m sure you’re
not misrepresenting that but I need to see it.
MR. LERNER: There’s no specific directive by
the court -THE COURT: I’ll look at it and then I’ll see.
MR. BEYS: If the government doesn’t submit it,
we’ll gladly submit it to your Honor.
THE COURT: Does anybody have it here?
MR. BEYS: We don’t have the transcript here.
We have a joint appendix.
MR. KAMINSKY: I point you to, beginning on
line 4 of page 706 of the transcript.
THE COURT: Mr. Learner, you want to respond
to what the transcript says?
MR. LERNER: May I take my copy?Page 194 App. THE COURT: Sure. That’s our copy but you can
look at ours or we can trade, whichever you prefer.
(Pause.)
MR. LERNER: Page 706 of the joint appendix?
THE COURT: Correct, line 4.
(Pause.)
MR. LERNER: There’s no specific directive by
Judge Glasser to destroy the electronic copies of the
document and there’s been no dissemination of the
document. Therefore,
[p.14]
there’s been no violation of any TRO and we would
request further briefing before you wish to entertain
this issue.
THE COURT: No, it’s absolutely clear on its face
Judge Glasser intended you to destroy electronic copies
and to return any photocopies. If that is not done by the
end of Monday, I will hold your client in contempt.
***Page 195 App.
APPENDIX X
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
150 East 42nd Street, New York, NY 10017-Tel: 212.490.3000 Fax: 212.490.[Letterhead]
April 4, Filed in Camera but Requesting Unsealing and
Docketing
By Facsimile – 718-613-The Hon. Brian M. Cogan
U.S. District Court for the Eastern District
of New York
225 Cadman Plaza East
Brooklyn, New York Re:
Roe v. US v. Doe
2d Cir. Case No.: R o e v . U S v . D o e ,
10-2905 & 11-479-cr
EDNY Case No.: US v. Doe, 98-CR-(ILG)
Our File No.:
07765.
Application for Reconsideration of
Affirmative Injunction or Stay Pending
Submission of Application for Stay to the
Second Circuit
Dear Judge Cogan:Page 196 App. We represent attorney “Richard Roe.” We
respectfully request reconsideration of the affirmative
order you issued on April 1, 2011, directing Mr. Roe to
delete from the hard drive of his computer four
“documents” that were the subject of previous hearings
before Judge Glasser and to return any photocopies of
the documents in his possession. Alternatively, we
request a stay of the injunction pending submission of
an application for a stay to the Court of Appeals. The
request for an injunction was raised by the U.S.
Attorney’s office without advance notice and without
briefing, and we believe the April 1st injunction was
improvidently granted for the following reasons:
1. Mr. Kaminsky unexpectedly requested the
injunction under this Court’s remand authority to
oversee compliance with “orders previously entered
by Judge Glasser” (JA 1248),1 contending Judge
Glasser had orally ordered Mr. Roe to give all copies
of the documents to the U.S. Attorney at a hearing
on July 20,2010. As recounted by Mr. Kaminsky:
[A]t the end of the July 20th proceeding, Mr.
Doe’s counsel at that time, Ms. Moore, says
specifically to Judge Glasser we would like
you to include in the TRO copies of the
documents because although Mr. Roe is
telling you he’s given them back to you, what
good is that if he has copies? The judge says
I agree; Mr. Lerner’s response is, are you
issuing a further TRO? The judge says I am.
“JA” refers to the Joint Appendix for Mr. Roe’s pending appeal,
copy of which is in your Honor’s possession.Page 197 App. (April 1, 2011 Hearing Tr. at 12-13). That incomplete
description, however, was misleading. The exchange
paraphrased by Mr. Kaminsky followed an inquiry by
Judge Glasser as to whether the “whole proceeding was
moot because the documents have been surrendered?”
(JA 706:4-7.) Ms. Moore explained that it was not,
because only the originals had been returned, and
expressed the concern that Mr. Roe should not be
allowed to give just the originals back while remaining
“free to disseminating [sic] copies.” (JA 706:8-17.)
Judge Glasser immediately responded to her specific
concern about dissemination of copies by saying “I
think, I indicated [Mr. Roe] should not do that (JA
706:18-19; emphasis added). He continued: “I think it
was in the form of an order and that order, I believe, if
I have not done so, I am doing it now and if you want it
in writing until I resolve this issue.” (JA 706:19-22.)
At this point Mr. Lerner asked “You are issuing
another TRO?” and Judge Glasser responded, “Yes, I
am. I’m Issuing a further TRO for the reasons that
I have indicated.” (JA 706:23 to 707:1; emphasis
added).
In context, the “further TRO” Judge Glasser said he
intended to issue was the extension of the existing TRO
beyond the July 20 hearing. Leaving no doubt that this
“further order” was an extension of the existing TRO,
Judge Glasser concluded the exchange by stating: “The
TRO is continued for another ten days,” (JA 706:25 to
JA 707:15; emphasis added).
This Court’s injunction of April 1st overlooked that
there was only one “TRO” ever issued by Judge
Glasser, which did not require the destruction of all
copies of the documents, and his “further order” of JulyPage 198 App. 20 simply extended its term. The TRO issued by Judge
Glasser appears at page JA 5, and it provides:
“ORDERED, that pending said hearing, Messrs.
Kriss, Ejekam and [Roe] and their
representatives, employees and agents, and all
other persons acting in concert with them and
all other persons who have obtained the Sealed
and Confidential Materials, are restrained and
enjoined from disseminating the Sealed and
Confidential Materials or information therein
further[.]”
This Court misapprehended that there a specific order
from Judge Glasser for Mr. Roe to return all hard
copies of the documents and destroy all electronic
copies. There was not. The TRO was only intended to
preserve the status quo because that’s all a TRO can do
and Judge Glasser understood that a TRO could not
properly have ordered the destruction of all copies of
the documents because that was a part of the final
relief sought in the proceeding. (See JA 4)
(“ORDERED, that Jody Kriss, Michael Ejekam and
[Roe] show cause . . . why an order should not be issued
requiring [them] and any other persons who have
acquired the Sealed and Confidential Materials to
immediately return the Sealed and Confidential
Materials to Mr. [Roe].”) This was the ultimate relief
sought in the order to show cause, and no order was
ever issued granting this prayer for relief.
2. This Court’s April 1st order was also entered without
the benefit of the subsequent history in this proceeding,
which confirms that the July 20 extension of the TRO
was not an order to destroy all copies of the documents
in Mr. Roe’s possession. In a Stipulated Order enteredPage 199 App. by Judge Glasser on August 12, 2010 “[p]ending a
Settlement or issuance of [a further order]”, Mr. Roe
agreed not to “disseminate the Documents or
information obtained therefrom, except as may be
required for the purposes of [his] pending appeal . . . .”
(JA 717, ¶1c.) Plainly, as of August 12 Judge Glasser
understood that Mr. Roe retained copies and that he
would use them in arguing his appeal, and Judge
Glasser expressed no intent that the copies held by Mr.
Roe must be destroyed.
Again, after Mr. Roe withdrew his consent to the
standstill agreement in the stipulated order, and asked
Judge Glasser to proceed and issue a final order on his
right to use the documents, the U.S. Attorney on
November 23, 2010 specifically requested the court at
that point “to order Frederick Oberlander, Esq., to
return the sealed documents in his possession . . .”
(JA-728.) This request makes no sense if Mr. Roe was
already under order to return or destroy all copies of
the documents.
Mr. Doe’s own counsel had just written a similar letter
to Judge Glasser on November 16, 2010, acknowledging
that under the Stipulated Order “we have until
November 24, 2010 to submit a supplemental
memorandum of law in support of our application for
relief, including an order directing the Respondents to
return or destroy all copies of the sensitive and
confidential documents in their possessions that were
taken from our client without his consent and
knowledge and that relate to a sealed criminal matter.”
(JA-727; emphasis added). Thus we see that Doe also
understood that Judge Glasser had not ordered the
destruction of the documents, and was now seekingPage 200 App. such an order, Judge Glasser never issued any such
subsequent order.
Contrary to the unexpected about-face and
surprise posture they took last Friday, both the
government and Mr. Doe have previously
acknowledged that Mr. Roe was not under any
order to return or destroy all copies of the
documents at issue, facts not presented to the
court last Friday.
3. Due to the manner in which the issue was raised,
the court was also not presented with a number of legal
reasons why Judge Glasser’s oral order of July should not be enforced under the limited remand
jurisdiction granted by the Second Circuit, even if that
order had actually directed the destruction of all copies
of the documents. The order was not an order. It was
invalid. We are not here suggesting that it was
appealable (or not), or that Judge Glasser abused his
discretion in issuing it. We are instead saying it was
entirely dictum and thus not enforceable. The remand
cannot be read as requiring your honor to enforce
non-existent or unenforceable orders.
Oral, unwritten orders like Judge Glasser’s do not
comport with FRCP 52 (which requires express
findings of fact and conclusions of law when a court
issues an order) and FRCP 65. Oral orders violate the
form and content required by Rule 65, which is
“properly met by a written order,” document lacking
here.” Garcia v. Yonkers Sch. Dist., 561 F.3d 97, 104-(2d Cir. 2009). Here, Judge Glasser never issued a
written order directing the return or destruction of any
further documents. Moreover, the only written order
ever issued by Judge Glasser is the original TRO,Page 201 App. which was extended several times but is no longer in
force. (Although Mr. Roe has voluntarily continued to
behave as if the TRO were in force.)
Moreover, orders must have findings and all of
the FRCP 65 requirements must be selfcontained within the four corners of the
document. “For the reasons stated” cannot
suffice as there are no reasons stated in that
transcript and if there were it would not be clear
which ones Judge Glasser was referring to.
Indeed it is precisely for this reason, to avoid
argument on what is and isn’t a valid order, that
FRCP 65 requires a writing, There is no wiggle
room. As the Garcia court, which adopted the
clear reasoning of Bates v. Johnson, 901 F.2d
1424 (7th Cir. 1990) (“Oral statements are not
injunctions”), stated: “For many of the reasons
discussed supra Part II(B)(1), however, we
conclude that the District Court’s statements at
the September 15, 2004 hearing did not
constitute a temporary restraining order because
they did not detail the acts restrained or required
and were not reduced to a written order.”
(Emphasis added).
***
We regret the facts and law were not properly laid
out for the Court before it ordered the destruction of all
copies of the documents in Roe’s possession, but we
were not aware in advance that this issue would be
raised at the April 1st hearing. The full record compels
reconsideration and we urgently ask that the April 1st
injunction be withdrawn so it is not necessary to file aPage 202 App. further appeal to preserve Mr. Roe’s position on the
issues already before the Second Circuit.
The above should dispel any implication that Roe
has not scrupulously abided by the orders issued by
Judge Glasser. Roe has not simply disregarded
orders, as counsel repeatedly suggest.2 To the
contrary, he has always sought to abide by Judge
Glasser’s TRO, notwithstanding his belief that it is a
transparently invalid unconstitutional prior restraint
on his First Amendment rights. He will voluntarily
continue to abide by the non-dissemination directive of
the TRO during the pendency of the appeal, so there is
no risk that if this Court rescinds its injunction to
delete the documents from Mr. Roe’s computer that
they will then be freely disseminated. While the appeal
is pending, Mr. Roe will continue to seek guidance from
For example, in his letter requesting summary contempt, Doe’s
counsel accuses Roe of defying a May 14, 2010 order of Judge
Buchwald, which he knows full well was superseded by an
abeyance order a few days later, and he omitted any mention of
that abeyance from his letter to this court demanding summary
contempt findings.
Additionally, in the government’s argument to the court on April
1st, Mr. Kaminsky stated that Roe is in violation of some court
order, “[H]e still has them in direct contravention of the court’s
order saying give them back, give them to the U.S. Attorney’s
office.” The Court will note nothing on July 20 refers to the U.S.
Attorney’s office, and the documents themselves did not come from
that office, but from Bayrock. Please note that the order to show
cause before Judge Glasser sought the return of the documents at
issue to Mr. Doe, not to the government, and did not seek their
destruction. (See JA 4). The government never moved for recovery
of the documents, and thus lacks standing to assert that they
should be returned to it, much less destroyed.Page 203 App. this Court on what he may do with the information in
the disputed documents.
Accordingly, we respectfully request this Court:
A. Reconsider its oral order of April 1, 2010, and
withdraw its injunction that Mr. Roe delete the
documents at issue from the “c” drive of his
desktop computer by no later than April 4, 2011;
B. Failing that, we request a stay of the injunction
for two days, to afford the Second Circuit an
opportunity to consider a motion to stay this
Court’s order, and
C. Further request that this letter and the
proceeding of April 1, 2011 be unsealed and that
a public docket of these proceedings be
maintained.
Respectfully submitted,
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
/s/Richard E. Lerner
Richard E. Lerner
cc:
Via E-Mail:
Michael Beys and Nader Mobargha
– Counsel for Doe
Todd Kaminsky – US Attorney’s Office
David Schulz – Counsel for Roe
“Richard Roe”Page 204 App.
APPENDIX Y
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 Cr. 1101 (ILG)
[Filed April 4, 2011]
______________________________________
UNITED STATES OF AMERICA,
)
)
Plaintiff,
)
- against)
)
FELIX SATER,
)
)
Defendant. )
______________________________________ )
SEALED ORDER
The Court has reviewed Richard Roe’s motion for
reconsideration. It is denied. It was plainly the intent
of Judge Glasser to have those documents destroyed or
returned. There is no prejudice to Roe because in the
event he prevails in having the sealing order
overturned in the Circuit, he will again have access to
the documents.
SO ORDERED.Page 205 App. /s/ Hon. Brian M. Cogan
U.S.D.J.
Dated:
Brooklyn, New York
April 4, 2011Page 206 App.
APPENDIX Z
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Cr. No. 98-1101 (ILG)
[Filed January 26, 2012]
______________________________________
UNITED STATES OF AMERICA,
)
)
- against)
)
JOHN DOE,
)
)
Defendant. )
______________________________________ )
SCHEDULING ORDER
Upon the January 26, 2012 application of
LORETTA E. LYNCH, United States Attorney for the
Eastern District of New York, by Assistant United
States Attorneys Todd Kaminsky and Evan M. Norris,
and full consideration having been given to this matter,
IT IS HEREBY ORDERED that, in light of the
government’s withdrawal of its March 17, 2011 motion
to unseal and the reasons provided therefor, the only
issue ripe for decision following the remand of this case
from the United States Court of Appeals for the Second
Circuit is whether this Court should permanently
enjoin non-party Richard Roe from disseminating the
following sealed documents in his possession relating
to the defendant John Doe: (a) two proffer agreements,Page 207 App. (b) a cooperation agreement, (c) a criminal complaint
and (d) a criminal information;
IT IS HEREBY FURTHER ORDERED that the
parties file briefs setting forth their respective
positions with regard to the matter referred to above
pursuant to the following schedule:
1. The government shall file its brief on or before
February 7, 2012;
2. Doe and Roe shall file their responsive briefs on
or before February 21, 2012;
3. The government shall file any reply on or before
February 28, 2012; and
IT IS HEREBY FURTHER ORDERED that the
Court will hold oral argument on March 6 9th, 2012 at
11:00 AM.
SO ORDERED.
Dated:
Brooklyn, New York
January 26, s/ I Leo Glasser
____________________________________
THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT JUDGEPage 208 App.
APPENDIX AA
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
EK: EMN/TK
F. #1998R
271 Cadman Plaza East
Brooklyn, New York January 26,
By Hand
Submitted Under Seal and
Ex Parte as to Richard Roe
The Honorable I. Leo Glasser
United States District Judge
Eastern District of New York
225 Cadman Plaza East
Brooklyn, New York Re:
United States v. John Doe
Criminal Docket No. 98-1101 (ILG)
Dear Judge Glasser:
The government writes to respectfully request that
the Court issue the enclosed proposed order setting
forth a briefing schedule to resolve the matter that
remains to be decided in the above-captioned case
following the remand from the Second Circuit Court of
Appeals.Page 209 App. I. Background
A. John Doe’s Conviction and Cooperation
On December 10, 1998, John Doe pleaded guilty,
pursuant to a cooperation agreement, to an information
charging him with participating in a racketeering
enterprise, in violation of 18 U.S.C. § 1962. The RICO
predicate acts consisted of securities fraud in
connection with offerings and after-market
manipulation of the securities of multiple entities and
the unlawful laundering of the proceeds of these
schemes.***
Sections A through G of this Background section are largely
taken from the government’s April 11, 2011 brief filed with the
Second Circuit. For ease of reading, the citations included therein
to the parties’ joint appendix and the government’s appendix are
omitted.Page 210 App.
APPENDIX AB
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101 (ILG)
[Filed February 2, 2012]
______________________________________
UNITED STATES OF AMERICA,
)
)
Plaintiff,
)
)
- against)
)
JOHN DOE,
)
)
Defendant. )
______________________________________ )
ORDER
GLASSER, United States District Judge:
In a letter dated January 26th, 2012, the
government moved this Court for an Order that would
direct the designated parties to brief the issue
regarding whether Richard Roe should be permanently
enjoined from publicly disseminating the specifically
identified sealed documents in his possession. The
motion was granted and an Order styled “Scheduling
Order” was issued on that date. That Order is not
sealed. Oral argument is to be held on March 9th, at 11 a.m.Page 211 App. The letter motion in support of that requested
Order was “Submitted under Seal.” The Court
approved that submission, fully aware of the public’s
qualified First Amendment and common law right of
access and aware also of the limitation upon those
rights warranted by the factors discussed in United
States v. Amodeo, 44 F.3d 141, 147 (2d Cir. 1995).
Among those factors were the need to “preserve higher
values,” including the integrity of an ongoing
investigation and the safety of John Doe, which were
duly considered and found to weigh more heavily in the
balance.
A letter from Richard Roe, transmitted to the Court
by facsimile and dated January 31, 2012, “demanding”
the unsealing of the government’s January 26th letter
is denied. He also requests that the Court expand the
breadth of the issues to be considered at oral argument,
which is also denied. The discrete issue to be addressed
at oral argument is whether Richard Roe violated an
Order of this Court by publishing the specifically
identified documents in his possession and if he has,
should he be permanently enjoined from disseminating
them. The issue sought to be added will be scheduled
and heard in due course.
SO ORDERED.
Dated:
Brooklyn, New York
February 2, s/ILG
____________________________________
I. Leo GlasserPage 212 App.
APPENDIX AC
[SEAL]
U.S. Department of Justice
Office of the Solicitor General
Washington, D.C. March 19,
Honorable William K. Suter
Clerk
Supreme Court of the United States
Washington, D.C. Re:
Roe v. United States, No. 12-(scheduled for conference of March 22, 2013)
Dear Mr. Suter:
Yesterday afternoon, this office learned that the
district court on March 13, 2013, entered a public order
and a sealed opinion in this case. The district court’s
public order is attached to this letter. The United
States has prepared a motion to file under seal the
district court’s sealed opinion and is filing that motion
concurrently with this letter.
Sincerely,
Donald B. Verrilli, Jr.
Solicitor GeneralPage 213 App. cc: See Attached Service List
SERVICE LIST: 12-Richard E. Lerner
Attorney at Law
255 West 36th Street
New York, NY Joshua D. Liston
Beys, Stein & Mobargha LLP
405 Lexington Ave., 7th Floor
New York, NY ***
[Attachment Order of the United States Eastern
District of New York in 12 MC 150 (ILG), Filed
March 13, 2013 already reproduced in this Appendix]Page 214 App.
APPENDIX AD
From: Todd.Kaminsky@usdoj.gov
To: fred55@aol.com; richardlerner@msn.com
CC: Elizabeth.Kramer@usdoj.gov
Subject: Sealed Document
Date: Thu, 28 Mar 2013 00:40:30 +Dear Mr. Lerner and Mr. Oberlander:
During a telephone call with Mr. Oberlander, I was
informed that during the litigation over your petition
for certiorari, the Solicitor General’s Office
inadvertently sent you a sealed, ex parte document
issued by The Honorable I. Leo Glasser on March 13,
2013. As discussed, this document was sent to you in
error and was not intended to be viewed by you, as Mr.
Oberlander readily conceded that he understood during
the telephone call. We request that you return the
document, and any copies thereof, to the United States
Attorney’s Office for the Eastern District of New York
(attn: Todd Kaminsky) as soon as possible.
The document at issue and the information contained
therein are subject to a valid sealing order, as stated on
the face of the document. We remind you of the Second
Circuit’s order, issued on February 14, 2011, stating
that you are “enjoined from publicly distributing and
revealing in any way, to any person, or in any court,
proceeding or forum . . . any documents or contents
thereof subject to sealing orders in Docket No.
10-2905-cr or in any related proceedings before the
District Court for the Eastern District of New
York . . . .”Page 215 App. We appreciate your attention to our request.
Todd Kaminsky
Assistant United States Attorney
Eastern District of New York
271 Cadman Plaza East
Brooklyn, New York P: (718) 254-F: (718) 254-6669Page 216 App.
APPENDIX AE
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
Index No. __________________
_____________________________
SALVATORE LAURIA,
)
)
Plaintiff,
)
)
-against)
)
JODY KRISS,
)
)
Defendant.
)
_____________________________ )
COMPLAINT
Plaintiff Salvatore Lauria (“Lauria”) by and through
his attorneys, Beys Stein Mobargha & Berland LLP, for
his Complaint against Defendant Jody Kriss, alleges as
follows:
PRELIMINARY STATEMENT
1. This case is about a billion-dollar shakedown by
real estate developer Jody Kriss (“Kriss”), who made
millions of dollars as consigliere for the Russian mob.
Like Tom Hagen in “The Godfather,” Kriss and his
father, attorney Ronald Kriss, were the “front men” for
the Bayrock Group (“Bayrock”), a real estate
development company, owned and run by people Kriss
himself claims were mobsters. Kriss was the ChiefPage 217 App. Financial Officer (“CPO”) of Bayrock and his father
was the outside general counsel for what Kriss claims
was a mob outfit. In fact, his co-workers nicknamed
Kriss “VOR-TON,” a word play on “Wharton,” the
school he attended, and the Russian “vor-in-law”
(“thief-in-law,” as Russian mobsters are known),
because – as he used to brag – Kriss could steal more
using his Wharton degree than 100 gangsters
combined. Yet ultimately, because Kriss was
unsatisfied with the millions he made as Bayrock’s
front man, he
***
paragraph, 165-page complaint, and in both instances
only fleetingly. The first mention of Lauria’s name was
merely to state that he and others were involved with,
and pleaded guilty to, a Russian and Italian stock
brokerage “pump and dump” scheme prior to joining
Bayrock, a now 20-year old crime to which Lauria
already had pleaded guilty. The second mention of
Lauria’s name was the spurious allegation that he may
or may not have received kickbacks in connection with
Mafia investments at Bayrock. That is it. Nevertheless,
Kriss named him as a defendant in the $100 million
RICO action. The real purpose of naming Lauria was to
identify Lauria as an informant for the federal
government, to dredge up his past and expose him to
danger, so that the prestigious law firms and deeppocketed defendants would pay to get out of the case.
It was also payback for the $1.5 million commission
Lauria received in 2007.
35.
Thus, by illegally gathering and illegally
disseminating sealed confidential information, Kriss
had set in motion what would prove to be a persistentPage 218 App. pattern of conduct, aimed at emotionally, mentally,
physically, and financially harming Lauria.
The Second Frivolous Action concerns crimes
which Kriss and Ronald Kriss are guilty of
36.
Yet, the real irony in the Second Frivolous
complaint is that Kriss accuses Lauria and others of
crimes that Jody Kriss and his father Ronald Kriss, the
outside general counsel of Bayrock, are themselves
guilty of committing. The Second Frivolous Action
epitomizes the age-old adage of the pot calling the
kettle black.
37.
First, the complaint alleges, among other
things, that “Bayrock is substantially and covertly mob
owned and operated .... ” Kriss accuses Bayrock of
covering up the past of its convicted employees, and
asserts that no investor would partner with Bayrock
for any venture if this information were revealed.
However, simply by virtue of his positions as CFO,
COO, Director of Finance, and self-proclaimed cofounder of Bayrock, Kriss was the very name and face
of Bayrock. He was the front for Lauria and other
Bayrock employees, hiding their criminal histories and
ties to organized crime from Bayrock’s unsuspecting
investors and banks. And his father, Ronald Kriss,
Bayrock’s counsel, hatched, legally blessed, and
employed this hide-and-seek scheme. Indeed, both
Kriss and his father were well aware of what was
transpiring in the halls of Bayrock’s offices and the
aisles of the private jets they used to travel to Turkey
and Russia to expand their network of wealthy
criminals. They knew exactly who worked at Bayrock.
That was why they were there in the first place.Page 219 App. 38.
Second, in the complaint, Kriss accuses
Bayrock of filing “false condominium offering
documents.” However, it was Kriss who signed these
documents as CFO on behalf of Bayrock. Kriss
conveniently omits this crucial fact from his complaint.
39.
Third, Kriss claims in the complaint that one
employee took from Bayrock $8,000,000; another took
$4,000,000, and yet another took $15,000,000. Without
any explanation, he claims that the money
simultaneously came from “crime” and from Bayrock.
Again, conspicuously absent from the complaint is that
he was the Director of Finance and the CFO of
Bayrock. As such, he was in charge of the money that
entered and left Bayrock’s coffers. Consequently, it was
Kriss who was most familiar with Bayrock’s alleged
“criminal” financial sources, if any. And it was Kriss
who would have approved, or at least played a part in,
any improper distribution of revenues to Bayrock’s
employees.
40.
Fourth, Kriss claims that Bayrock – a
company he claims he founded and financially
managed – paid one of its employees a “million dollars
a year in unreported income” and “intentionally
understated [its] partnership taxable income, by at
least $50,000,000 to as much as $100,000,000.” Once
again, if that was the case, it was Kriss – the Director
of Finance and the CFO – who created and approved
the transaction and examined Bayrock’s tax returns
***Page 220 App. Kriss and his attorneys intentionally put Lauria’s
life in danger
47.
At one point in the midst of their frivolous
litigation campaign, Kriss and his rogue lawyers
decided to bypass the courts and the press and went
straight to the court of organized crime. They did the
unthinkable: they disclosed the judicially-sealed
information to a famous criminal lawyer who had
represented the very members of the mafia that Lauria
had cooperated against.
48.
The result of this disclosure was a violent one
for Lauria. In or about July 2012, one of the members
of the mafia tracked down Lauria in a restaurant in
Bay Ridge, Brooklyn, where Lauria was having lunch
with his current business colleagues. Undaunted by the
public scene, the mafia member beat Lauria in broad
daylight, menacingly telling Lauria, “you’re dead – I
am going to kill you and the fucking Russians. You’re
a rat. I did two years because of you.” Lauria knew how
serious the threat was. He had heard that the very
same family of this mafia member has a long history of
murder and violence. Consequently, immediately after
the encounter, Lauria sought the protection of the FBI.
***Page 221 App.
APPENDIX AF
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101(ILG)
TO BE FILED UNDER SEAL
________________________________
UNITED STATES
)
)
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
MOVANT JOHN DOE’S
SUPPLEMENTAL MEMORANDUM OF
LAW IN FURTHER SUPPORT OF
PERMANENT INJUNCTION
MORGAN, LEWIS & BOCKIUS LLP
101 Park Avenue
New York, New York Tel: 212.309.Attorneys for Movant John DoePage 222 App. PRELIMINARY STATEMENT
The Court has the power and authority under the
All Writs Act to order the Respondents to return or
destroy documents that were unlawfully taken from
John Doe and are part of a case that was sealed by the
Court. The First Amendment does not protect the
actions of the agent of a thief who threatens to publish
his ill-gotten gains to extort a settlement and put a
man’s life at risk.
FACTUAL BACKGROUND
The facts underlying this matter begin on May 10,
2010, when Respondent Oberlander, an attorney, filed
publicly in the United States District Court for the
Southern District of New York a civil RICO complaint
(the “SDNY Complaint”) that he knew contained
extraordinarily sensitive and sealed information about
John Doe which, if disclosed, would endanger not only
Mr. Doe’s life, but also the lives of Mr. Doe’s family.
Specifically, Mr. Oberlander knowingly attached as
exhibits to the SDNY Complaint certain documents
(the “Exhibits”) that, to this day, are part of or relate to
a sealed record in a Federal criminal case in which Mr.
Doe was a defendant and cooperating witness.1 The
Mr. Oberlander testified that the Exhibits were comprised of the
following (1) “five pages from the PSR” (i.e., excerpts from Mr.
Doe’s 2004 Presentence Report (the “PSR”)); (2) “two proffer
agreements” (i.e., Mr. Doe’s proffer agreements dated October 2,
1998 and October 29, 1998 (the “Proffer Agreements”)); and
(3) “the cooperation agreement’‘ (i.e., Mr. Doe’s cooperation
agreement dated December 10, 1998 between John Doe and the
government (the “Cooperation Agreement”)). 6/21 Tr. at 28-29. Mr.
Oberlander further testified that on or about March 3, 2010, thePage 223 App. SDNY Complaint contained countless references to the
***
PSR to be returned to the United States Attorney’s
Office. 6/21 Tr. at 88-92. The Court also modified and
extended the 5/18 TRO to include the Criminal
Complaint and the Information pending a decision on
the present motion.
At the July 20 hearing, the Court heard oral
arguments and made preliminary findings of fact with
respect to how the Sealed and Confidential Documents
were obtained. Specifically, the Court stated: “Mr.
Bernstein is a converter, Mr. Bernstein has no title to
those documents, no legal right to those documents, to
that tangible document whether it would be a piece of
paper, whether it be a gold ring or whatever it is, it
was a tangible item which was converted .... ” 7/20 Tr.
at 19. The Court further stated: “Mr. Oberlander had
no better right to those documents than Mr. Bernstein
following documents were transmitted to him via email (the “3/3/Email”) from Joshua Bernstein: the PSR, the Proffer Agreements,
the Cooperation Agreement, a criminal complaint in case number
98 CR 1101 (i.e., the Complaint and Affidavit In Support of Arrest
Warrants against, among others, John Doe (filed under Docket
number 98-754M) (the “Criminal Complaint”)), and a draft of an
information (the “Information”). 6/21 Tr. at 11-13. Mr. Oberlander
also testified that Arnold Bernstein, Joshua Bernstein’s father,
and Gerry Feinberg, an attorney representing Joshua Bernstein in
another matter (a civil case captioned Bernstein v. Bayrock Group
LLC Case No. 002579/2009), were addressees on the 3/3/10 Email.
6/21 Tr. at 14. The PSR, the Proffer Agreements, the Cooperation
Agreement, the Criminal Complaint, and the Information are
referred to hereinafter, collectively, as the “Sealed and
Confidential Documents.”Page 224 App. had. If we were to describe this change of events in
terms of property rights, title, Mr. Bernstein had no
title and he had no title to give Mr. Oberlander.” 7/Tr. at 20. The Court granted Mr. Doe’s application to
file a supplemental brief by July 27 and extended the
5/18 TRO pending a decision by the Court. After
counsel for Respondent Oberlander asserted his
position that the Court’s permanent order regarding
the presentence report applied only to the “original”
copy that Mr. Oberlander obtained from Joshua
Bernstein, the Court also issued a further TRO against
the dissemination of any copies of the PSR. 7/20 Tr. at
26-27.
On July 26, counsel for Mr. Doe sent a letter to the
Court advising that the parties were negotiating a
standstill agreement “with the goal of reaching a
consensual resolution to the proceedings before this
Court” and requesting an extension of the 5/18 TRO.
The Court extended the 5/18 TRO until August 3 and
further extended the TRO until August 13. On August
12, the parties agreed to a stipulated standstill order
(the “Standstill Agreement”), which the Court soordered that day. Among other things, the Standstill
Agreement provided that pending a settlement or
issuance of the an order granting or denying the relief
requested,
***Page 225 App.
APPENDIX AG
EOC:DP
F. # 1998rUNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
00 Cr 196 (ILG)
________________________________
UNITED STATES OF AMERICA )
)
- against )
)
DANIEL PERSICO,
)
)
Defendants.
)
________________________________ )
THE GOVERNMENT’S WITNESS LIST
1. Traci Manuel
2. Joseph Polito
3. Felix Sater
4. Special Agent Leo Taddeo
5. Professor Steven ThelPage 226 App. Respectfully submitted,
ALAN S. VINEGRAD
United States Attorney
Eastern District of New York
Eric C. Corngold
David B. Pitofsky
Assistant U.S. Attorneys
(Of counsel)Page 227 App. UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
00 CR 196 (ILG)
[Filed November 15, 2000]
________________________________
UNITED STATES OF AMERICA, )
)
- against )
)
DANIEL LEV, et al.,
)
)
Defendants.
)
________________________________ )
MEMORANDUM OF LAW IN SUPPORT OF
DEFENDANT DANIEL LEV’S
PRETRIAL MOTIONS
JEFFREY LICHTMAN
41 Madison Avenue
34th Floor
New York, New York (212) 689-Maranda E. Fritz
FRITZ & MILLER
565 Fifth Avenue
New York, New York (212) 983-Attorneys for Daniel LevPage 228 App. POINT IV
DEFENDANT DANIEL LEV IS ENTITLED TO
PRETRIAL DISCLOSURE OF ANY AND ALL
INFORMATION FALLING WITH THE
PURVIEW OF BRADY V. MARYLANDAND ITS PROGENY
As noted previously, Daniel Lev’s involvement in
the wide-ranging crimes charged in this Indictment are
limited to his single investment in U.S. Bridge.
According to the government, cooperating witnesses
Gennady Klotsman and Felix Sater served as the
solicitors of Lev for his investment. Therefore, the
lion’s share of proof against Lev will come from the
mouths of these cooperators. As such, the credibility of
these witnesses are of paramount importance to Daniel
Lev’s defense.
With this in mind, on March 27, 2000 the defendant
served a general discovery letter on the government
which requested disclosure of all Brady material
known to the government. In the government’s Rule letter of April 21, 2000, no mention was made of the
government’s possession of any Brady material. The
government’s May 24, 2000 “general index of the
documents available for inspection and copying”,
however, contains materials which clearly are
impeachment materials, i.e., “People v. Sater”
materials.
As these materials were not forwarded to the
defense, Lev served a more specific Brady demand
Brady v. Maryland, 373 U.S. 83 (1963).Page 229 App. pursuant to its letter of October 10, 2000. In this letter,
Lev requested:
bank, phone and financial records of Eugene
Klotsman and Felix Sater; NASD/SEC
disciplinary and employment history for
Klotsman and Sater; customer complaints
regarding Klotsman and Sater; materials from
People v. Sater, and any recorded witness
statements from these or any government
witness which serve to
***Page 230 App. JEFFREY LICHTMAN
ATTORNEY AT LAW
[Letterhead]
January 16, BY FEDERAL EXPRESS
May Ann Betts
United States Probation Officer
Eastern District of New York
75 Clinton Street
Room Brooklyn, New York 11201-Re: U.S. v. Lev, 00 CR 196 (S-1)(ILG)
Dear Ms. Betts:
As counsel for Daniel Lev, I am submitting,
pursuant to Rule 32(c) of the Federal Rules of Criminal
Procedure, his objections to the Presentence Report
(“PSR”). The objections are factual in nature and will
be addressed in the order stated in the PSR.
Paragraph 33:
The defendant rejects the claim that he was
involved in the U.S. Bridge Stock fraud. In addition, as
defendant Lev allocuted during his guilty plea, he
harassed Felix Sater’s father in an attempt to convince
him that he should dissuade his son from testifying in
the U.S. v. Coppa, et al. Case. As the government
knows, Mr. Lev was approached by Mr. Sater (not the
other way around) and never threatened or intimidated
him in any manner. In sum, Mr. Lev attempted toPage 231 App. influence Felix Sater from testifying against him and
anyone else in this case.
Furthermore, Daniel Lev’s guilty plea was not the
sole cause Felix Sater was not called as a witness in
this case. Sater was a witness against many other
defendants who ultimately pleaded guilty. In the
defendant’s estimation, the reason the RICO charges
against him were dropped is because the bulk of the
evidence against him – the testimony of government
witnesses Sater and Gennady Klotsman – was
unreliable.
***Page 232 App. ***
43.
Daniel Lev was arrested on March 2, 2000, and
provided no post-arrest statement. According to
the Government, while not an employee of White
Rock/State Street, Lev was involved in the
USBNY stock deal in that he lent $300,000 to
USBNY which was used to purchase 3 million
warrants (the right to busy stock). At the time of
the IPO of U.S. Bridge of New York, the
warrants were in Lev’s name, and White Rock’s
principals had arranged to purchase all of Lev’s
warrants at a low price for purposes of then
inflating the price and selling them at
substantial profit. During the summer of 2000,
following the arrests for the instant offense, Lev
confronted Felix Sater’s father and verbally
abused and harassed him with the objective to
get Felix Stater to not truthfully testify against
Lev. The Government did not provide
information related to the extent of the verbal
abuse and harassment, or whether there was
any express or implied threat of injury or
damage. Due to Lev’s guilty plea, Sater was not
called as a witness. No aggravating or
mitigating role adjustment appears warranted.
***Page 233 App. 11/1/2014 The Law Offices of Jeffrey Lichtman:
Experienced Criminal Defense Attorneys in Federal
and New York State Courts | Results
United States v. Russo, 00 CR 1289 (E.D.N.Y. 2004)
Defendant charged with possession with intent to
distribute heroin received downward departure from
78-97 months to a non-custodial sentence of supervised
release due to extraordinary family circumstances.
United States v. Fazio, 00 CR 1183 (S.D.N.Y. 2003)
PDF
Defendant convicted of laundering $2.5 million of
proceeds of illegal gambling operation received
downward departure at sentencing to 5 years probation
on grounds that he suffered significantly reduced
mental capacity during the commission of the crime
due to a pathological gambling disorder. Sentence was
extraordinary in that amended sentencing guideline
prohibiting such departure was due to go into effect the
next day.
United States v. Fares, 01 CR 1175 (S.D.N.Y. 2002)
PDF
Motion for severance of defendant and charges granted
in federal money laundering and structuring case.
United States v. Khmelnitsky, 01 CR 890 (S.D.N.Y.
2002)
Prior felon convicted of tax evasion received downward
departure to three months imprisonment due to
extraordinary family circumstances.
United States v. Lev, 00 CR 196 (E.D.N.Y. 2001)
Federal RICO charges (along with securities fraud and
money laundering charges) dismissed by government
after Mr. Lichtman’s investigation of government’sPage 234 App. linchpin witness revealed his repeated perjury and
fraud while cooperating with the government.
***
http://www.jeffreylichtman.com/results.html
2/2Page 235 App.
APPENDIX AH
The SCORPION and the FROG
***
CHAPTER NINETEEN
Of course, it didn’t end with that first de-briefing with
the FBI and the other law enforcement agencies after
my surrender. They kept after me, and what they kept
after was more about crooked stuff involving Danny.
Which I couldn’t give them because there wasn’t any to
give.
“Sure, I gave him IPO stock,” I told one of the two
FBI agents assigned to me. “Danny’s my best friend.
Obviously, you know that. He wasn’t my ‘protection.’ I
would go to him for advice.”
That was enough to trigger a leading question.
“Why would you go to him?”
As if there was any question there. Why would I go
to him? Because Danny was part of a family referred to
as “organized crime,” because he was a good person to
ask about dealing with critical issues that came up
involving persons in organized crime. But I didn’t say
that.
“Just because he was my friend.” I tried to make it
clear that I wasn’t the one in the company that dealtPage 236 App. with the sticky issues of conflicts with Mob-related
problems. That was Lex’s department.
“I was running the firm, guys,” I told the agents. “I
was wearing a suit, every day. I’d be going in and
building up the firm. Lex was the negotiator. When it
came to dealing with organized crime, he was the one
to do it.”
They didn’t like that, but that was all they were
going to get out of me, and they finally accepted that,
and sent me home. Danny, I hoped, was safe.
***
But because of my cooperation, they gave me the
courtesy of bringing myself in, in response to the
indictment. ...
***
As far as the real facts of the case went, they
already had what they needed. They got that from
Gene, who knew everything, and had apparently told
everything. They had Vlad, they had Andrew
Bressman. All these owners and dealers were already
cooperating, so there wasn’t anything important they
needed from me except Danny.
***
Then, in March 2000, they indicted the whole group,
nineteen people, in what was billed as one of the
biggest Mob-related indictments ever done on Wall
Street. I wasn’t part of that indictment, of course,
because I had already agreed to plead. That made the
FBI guys worry about my safety. The ones who werePage 237 App. indicted included some heavy Mob figures, and the fact
that I already had made a deal was a problem.
“You should leave your house,” the Feds told me.
“It’s not safe for you to stay here. Your buddy Danny is
furious. And if he’s what we think he is (meaning a
Mob guy), you’re in danger.”
I wasn’t worried about Danny, although I was
unhappy to hear that he was furious. ...
***
But then another issue came up, which was that it
didn’t sit okay with the authorities–the FBI, the
Justice Department, the whole prosecution team–that
I was living in a $2 million house. Forget the
agreement that I would be able to keep my primary
home. Some of these civil servants were men and
women who lived in developments, and it didn’t go
down for them to see me living where I was. So I had to
sell the house, and move into a rental house.
***
One day, I got a disturbing anonymous phone call.
It was a threat against my youngest daughter, and that
was a terrible experience. Then I learned that Danny’s
lawyer had hired a private investigator to find me. I
knew that because the PI showed up when I was out,
and spoke to Lynn, who was walking the dog. She told
him that I was out, and asked for his number, which
gave him the confirmation that I lived there. That
made me uneasy. But not really frightened, because
what was there for him to take action against me for?
If he read the case, which would show what my
voluntary testimony had been, he would see that I hadPage 238 App. not said anything against him. He already knew that
I was cooperating, but I was telling the truth. So there
was nothing I could say that would hurt him.
It was true that Danny had helped Andrew
Bressman, and had collected a payoff for doing it,
which I didn’t know until the Feds told me. That was
what got Danny into the indictment: the fact that after
going with me and John Diorio and Forty to face the
Mob guys who were threatening Andrew, Danny had
gone back to Andrew and hit him up for money. I had
told Danny not to do it, that I would give him stock
that would be worth more than any money he would
get out of Andrew. But he had gone anyway, and I
think he got $25,000 out of him. When Andrew was
pulled in, he gave them that information and it went
down as extortion against Danny, and that’s why he
was indicted with everybody else.
Still, I considered it my fault that Danny got in
trouble over that, because I brought him into the
situation with Andrew. But even before that incident,
I had discouraged Danny from coming around to my
company, because of the way I knew it appeared. It
looked like we were connected, which was not good for
either of us.
“It will hurt me,” I had told Danny, “It will hurt
you.”
When Danny did get indicted, he pleaded guilty,
and pulled a one-year suspended sentence on work
release. ...
***Page 239 App. Prosecutions continued throughout that year and
the next. In 2001, I was working in the new business I
had chosen, which was building houses. I was building
houses in the $800,000 to $1 million range, making
decent money at it. I figure that four houses would
realize a $1 million profit, which would let me buy
Lynn a house again. Until the tragedy of September 11,
the matter of my sentencing was a big weight hanging
over my head. It was very likely that I would do serious
time; the question was how much. But a few days after
September 11, I got a call from Lex, telling me that the
information we had provided about Osama bin Laden
was now being actively pursued, and our situation had
improved. Three days before the attack on the World
Trade Center, the Taliban or Al Qaeda had
assassinated the man we had hoped would be our
contact, Ahmad Shah Massoud, the man who had
become the Northern Alliance leader.
Lex had gotten a call from a boss of a new section in
the FBI who wanted to talk to him about the whole
Stinger deal. We had done a careful job of putting it
together, using connections Lex thought he had with
both sides in the Afghan War. We had provided the
actual serial numbers of the Stingers, which had been
available in ’98, and we had passed on what we
thought was an active cell phone number for bin
Laden.
To our way of thinking at the time, we had provided
a way to reach bin Laden that should have been
important to the U.S. government. Gene had fouled the
deal by raising our asking price for the Stingers from
$300,000 to $3 million. Now the information was
deemed important, even though the Stinger deal hadPage 240 App. not gone through. Lex, for all his other faults, was a
very patriotic guy and a diehard Republican, and he
was anxious to help the country any way he could–
particularly if it served his purposes.
Then the entire block of defendants indicted in my
case pleaded guilty, so it ended up that there was no
trial after all. Most of the guilty pleas brought one to
three-year sentences. I was grateful to Lex for
including me in the record of the details he gave the
FBI when they came to him about the Stingers and the
bin Laden contacts, because that improved my case.
The FBI and the prosecution wanted to suppress our
involvement as much as possible even after 9/11.
***
PDF Page 1
PlainSite Cover Page
PDF Page 2
NO.
14-676
In the Supreme Court of the United States
LORIENTON N.A. PALMER,
FREDERICK MARTIN OBERLANDER,
v.
Petitioners,
JOHN DOE 98-CR-01101, UNITED STATES OF AMERICA,
Respondents.
On Petition for a Writ of Certiorari to the
United States Court of Appeals for the Second Circuit
PETITION FOR A WRIT OF CERTIORARI
AND VOLUME 1 OF APPENDIX
Richard E. Lerner
Counsel of Record
The Law Office of Richard E. Lerner, P.C.
1375 Broadway, 3rd Floor
New York, New York 10018
Phone: 917.584.4864
Fax: 347.824.2006
richardlerner@msn.com
Counsel for Petitioners
Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001
PDF Page 3
i
QUESTIONS PRESENTED
1. Despite this Court’s holdings that the public has a
first amendment right to access criminal trials, the
Second Circuit uses a cooperator exception to allow
closure without proof of necessity, the mere fact of
cooperation sufficient. Does this violate the
constitution?
2. In a circuit conflict, the Second Circuit uses this
cooperator exception to allow blanket sealing of cases
without individual particularized reviewable findings,
while the Fourth Circuit has held blanket sealing
unconstitutional. May a court seal entire cases and
everything filed in them without particularized
findings?
3. The Second Circuit uses this cooperator exception to
defy victim rights and mandatory sentencing laws,
letting convicted cooperator–defendants evade
restitution by holding the fact of their cooperation
justifies not telling victims of the case, yet claiming
their secret sentencings are really public, which if true
requires victim notification. Does this violate the
constitution?
4. The Second Circuit uses this cooperator exception to
defy the first amendment by letting courts enjoin third
parties who learn of the secret case from telling
anyone, even victims of ongoing crimes involved, even
Congress, without evidentiary hearings or findings, or
other due process. Does this violate the constitution?
5. The Second Circuit upheld the district court’s
rulings maintaining the sealing of documents by a nonprecedential “summary order” it admitted violated its
own precedents but applied nonetheless to this “special
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ii
case.” Does a federal appellate court violate the
constitution when it purports to issue non-precedential
orders; that is, does Article III require appellate courts
to give precedential value to all their decisions?
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iii
TABLE OF CONTENTS
QUESTIONS PRESENTED . . . . . . . . . . . . . . . . . . . i
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . xi
DECISIONS BELOW . . . . . . . . . . . . . . . . . . . . . . . . 1
JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CONSTITUTIONAL, STATUTORY, AND
REGULATORY PROVISIONS INVOLVED . . . . . . 2
STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 3
I.
Everything Secret Degenerates – –
Especially the Administration of Justice . . . 3
II.
The Boston U.S. Attorney’s and FBI Offices
Facilitated and Covered-Up the Crimes of
Racketeer Whitey Bulger Because He Was an
Informant . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
III.
The Eastern District of New York U.S.
Attorney’s and FBI Offices Facilitated and
Covered-Up the Crimes of Racketeer Felix
Sater, a Respondent Here, Because He Was
a Cooperator – but Unlike the Bulger Case,
Here, the Federal Courts Knowingly Went
Along, Ultimately Causing $1B of Injury . . . 5
A. Sater’s 1990s racketeering and related
proceedings, 1998 to 2001, by which time
his conviction and cooperation had been
made public by the government, court, et
al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PDF Page 6
iv
B. Sater’s all-new racketeering and related
proceedings while cooperating or
informing, from 2002 through 2009 . . . . 10
C. Sater’s sentencing in 2009 . . . . . . . . . . . 11
IV.
Petitioner Oberlander Discovers the
Crimes and the Cover-Up and Sues to Stop
Them . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
V.
Procedural History I . . . . . . . . . . . . . . . . . . . 20
VI.
Procedural History II . . . . . . . . . . . . . . . . . . 25
REASONS FOR GRANTING THE WRIT . . . . . . . 33
I.
The Integrity of the Federal Court System
Depends on This Court’s Confirming That
Lower Courts May no More Defy Binding
Precedent or Wrongfully Infringe Upon
Fundamental Rights Than They May
Defy Mandatory Sentencing or Similar
Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
II.
A lower federal court’s core “inherent power”
does not include the power to refuse to
impose the lawful sentences Congress
mandates, including restitution . . . . . . . . . . 34
III.
Lower courts’ “inherent power” cannot
include the power to defy binding precedent;
moreover, the issuance of a purported nonprecedential “summary order” by a federal
appeals court, as the Second Circuit issuance
here, is unconstitutional . . . . . . . . . . . . . . . 36
PDF Page 7
v
IV.
Lower courts’ “inherent power” cannot
include the power to wrongfully
infringe upon enumerated or unenumerated
rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
APPENDIX
Appendix A
Summary Order in the United
States Court of Appeals for the
Second Circuit
(June 5, 2014) . . . . . . . . . . . . . App. 1
Appendix B
Order in the United States District
Court, Eastern District of New York
(May 17, 2013) . . . . . . . . . . . . App. 7
Appendix C
Order in the United States District
Court, Eastern District of New York
(May 15, 2013) . . . . . . . . . . . App. 11
Appendix D
Order in the United States District
Court, Eastern District of New York
(March 13, 2013) . . . . . . . . . . App. 15
Appendix E
Transcript of Sentencing Before
the Honorable I. Leo Glasser
United States District Senior
Judge in the United States District
Court, Eastern District of New York
(October 23, 2009) . . . . . . . . . App. 18
PDF Page 8
vi
Appendix F
Excerpts of Docket Entries
U.S. District Court Southern District
of New York (Foley Square)
Criminal Docket for Case #:
1:94-cr-00248-CSH-1 . . . . . . App. 40
Appendix G
Constitutional, Statutory and
Regulatory Provisions . . . . . App. 43
Appendix H
Letter from Jeffrey Lichtman to
Eric O. Corngold in No. 00 CR 196
(ILG)
(October 10, 2000) . . . . . . . . . App. 66
Appendix I
Letter [Excerpt] from the U.S.
Department of Justice to Lawrence
Ray in No. 00-196 (ILG)
(November 20, 2001) . . . . . . . App. 68
Appendix J
Transcript of Sentencing [Excerpt]
in the United States District Court
for the Eastern District of New
York in CR-98-1102
(February 5, 2004) . . . . . . . . App. 71
Appendix K
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 00-CR-1005 (NGG)
(June 20, 2006) . . . . . . . . . . . App. 78
Appendix L
Transcript of Criminal Cause for
Sentencing [Excerpt] in the United
States District Court for the
Eastern District of New York in 04CR-234 (CBA)
(January 11, 2008) . . . . . . . . App. 81
PDF Page 9
vii
Appendix M
Transcript of Motion Hearing
[Excerpt] in the United States
District Court for the Eastern
District of New York in 98-CR-1101
(June 14, 2010) . . . . . . . . . . . App. 85
Appendix N
Transcript of Oral Argument
[Excerpt] in the United States
District Court for the Eastern
District of New York in CV 98-1101
(July 20, 2010) . . . . . . . . . . . App. 88
Appendix O
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App. 100
Appendix P
Letter (with attachment) from
Morgan, Lewis & Bockius LLP to
Judge Glasser in 98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App. 102
Appendix Q
Amendment
to Stipulated
Standstill Order in the United
States District Court for the
Eastern District of New York in 98
CR 1101 (ILG)
(September 27, 2010) . . . . . App. 111
Appendix R
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(November 16, 2010) . . . . . . App. 114
PDF Page 10
viii
Appendix S
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 03cr833
(November 17, 2010) . . . . . . App. 116
Appendix T
Brief for the United States
[Excerpt] in the United States
Court of Appeals for the Second
Circuit, No. 11-1957, United States
of America v. Gushlak
(May 8, 2012) . . . . . . . . . . . App. 124
Appendix U
Letter from the U.S. Department of
Justice to Judge Glasser in No. 98
CR 1101 (ILG)
(November 23, 2010) . . . . . . App. 127
Appendix V
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(March 17, 2011) . . . . . . . . . App. 129
Appendix W
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 98-CR-1101
(April 1, 2011) . . . . . . . . . . . App. 133
Appendix X
Letter [Excerpt] from Wilson,
Elser, Moskowitz, Edelman &
Dicker LLP to Judge Cogan in No.
98 CR 1101 (ILG)
(April 4, 2011) . . . . . . . . . . . App. 138
PDF Page 11
ix
Appendix Y
Order in the United States District
Court for the Eastern District of
New York in 98-CR-1101
(April 4, 2011) . . . . . . . . . . . App. 147
Appendix Z
Order in the United States District
Court for the Eastern District of
New York in 98-CR-1101
(January 26, 2012) . . . . . . . App. 149
Appendix AA
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(January 26, 2012) . . . . . . . App. 151
Appendix AB
Order in the United States District
Court for the Eastern District of
New York in 98-CR-1101
(February 2, 2012) . . . . . . . App. 153
Appendix AC
Letter from the Solicitor General to
the Supreme Court of the United
States
(March 19, 2013) . . . . . . . . . App. 155
Appendix AD
Email from Todd Kaminsky
(March 28, 2013) . . . . . . . . . App. 157
Appendix AE
Complaint [Excerpt] in the
Supreme Court of the State of New
York County of New York . App. 159
PDF Page 12
x
Appendix AF
Movant John Doe’s Supplemental
Memorandum of Law in Further
Support of Permanent Injunction
[Excerpt] in the United States
District Court Eastern District of
New York . . . . . . . . . . . . . . App. 164
Appendix AG
Public Records [Excerpt] in U.S. v.
Coppa 00-CR-196 (EDNY) . App. 168
Appendix AH
The Scorpion and the Frog
[Excerpt] . . . . . . . . . . . . . . . App. 178
SEALED APPENDIX
Appendix AI Memorandum and Order in the
United States District Court, Eastern
District of New York (filed under seal)
(March 14, 2013) . . . . . . . . . . . App. 184
Appendix AJLetter [Excerpt] from Beys, Stein &
Mobargha LLP to Judge Cogan
(August 2, 2012) . . . . . . . . . . . . App. 203
Appendix AK
Transcript [Excerpt] in the United
States Court of Appeals for the
Second Circuit
(February 14, 2011) . . . . . . App. 207
1
DECISIONS BELOW
The Second Circuit published a Summary Order sub
nom In re Applications to Unseal 98-cr-1101 (ILG), 568
Fed.Appx. 68, 2014 U.S. App. LEXIS 10436 (June 5,
2014) (App.1) The order of the district court from which
the appeal was taken to the Second Circuit was issued
on March 14, 2013 and possibly remains under seal, if
it ever was lawfully sealed, though in any event certain
information contained therein is public. The sealed
order is submitted to this court in a separate sealed
appendix. (App.AI at 184.)
JURISDICTION
This appeal is from a final decision and order of the
Second Circuit Court of Appeals upholding an order of
a district court in the Eastern District of New York
which declined to “unseal” certain documents.
This Second Circuit order was entered on June 5,
2014, and by order of this court on petitioners’ motion,
the time to file this petition was enlarged to run
through and including November 3, 2014.
Statutory jurisdiction lies in 28 U.S.C. § 1254(1).
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2
CONSTITUTIONAL, STATUTORY, AND
REGULATORY PROVISIONS INVOLVED
U.S. Constitution, Article III
U.S. Constitution, Amendment I
U.S. Constitution, Amendment VI
18 U.S.C. § 1506, “Theft or Alteration of Record or
Process; False Bail”
18 U.S.C. § 3553(c), “Imposition of a Sentence”
18 U.S.C. § 3663, “Order of Restitution”
18 U.S.C. § 3663A, “Mandatory Restitution to Victims
of Certain Crimes”
18 U.S.C. § 3664, “Procedure for Issuance and
Enforcement of Order of Restitution”
18 U.S.C. § 3771, “The Crime Victims’ Rights Act”
Federal Rule of Criminal Procedure 32, “Sentencing
and Judgment”
Federal Rule of Civil Procedure 65(d), “Injunctions and
Restraining Order”
28 CFR § 45.10, “Procedures to Promote Compliance
with Crime Victims’ Rights Obligations”
28 CFR § 50.9, “Policy with Regard to Open Judicial
Proceedings”
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3
STATEMENT OF THE CASE
I.
Everything Secret Degenerates – –
Especially the Administration of Justice
The United States Court of Appeals for the Second
Circuit and district courts within, in active concert with
United States Attorneys, have created an
unconstitutional regime of secret criminal cases,
falsified dockets, illegal sentences, and prior restraints
in the name of “protecting” the safety of cooperators.
If this writ is granted, petitioners will ask this
Court use its supervisory powers to stop this defiance
of the Constitution and statutes, not only with respect
to the inferior courts involved, but also with respect to
the practice of law conducted before those courts by the
United States. Prosecutorial discretion and inherent
judicial power are extraordinary, but not infinite, and
not immune to the guarantees of enumerated and
unenumerated rights. Such discretion and power may
not be exercised corruptly, and as they have for too
long, they must be reined in by this Court.
Petitioners begin their explanation of the case by
analogizing it to the only thing like it in modern
history, the Whitey Bulger scandal in Boston.
II.
The Boston U.S. Attorney’s and FBI Offices
Facilitated and Covered-Up the Crimes of
Racketeer Whitey Bulger Because He Was
an Informant
In the 1970s, the Boston FBI office recruited local
mobster Whitey Bulger and others as informants,
beginning an infamous quarter-century partnership in
corruption wherein they gave the FBI information
PDF Page 18
4
about organized crime and in return the FBI ignored
their crimes, even their murders; allowed innocents to
be convicted in their place, and told them of witnesses
who might testify against them so the informants could
have them killed and maintain their cover.
The corruption lasted to 1994, when a corrupt FBI
agent warned Bulger and others that they’d been
indicted on racketeering charges and Bulger became a
fugitive from justice for twenty years until captured.
In 2003, the House Committee on Government
Reform released the report of its investigation into the
scandal, Everything Secret Degenerates: The FBI Use of
Murderers as Informants. Among its conclusions:
• The FBI perjured, and obstructed state and local
prosecutions, to help their informants.
• Persons as senior as the FBI Director knew.
• The FBI Office of Professional Responsibility
lied when it said no favors had been given the
informants and prevented the committee from
obtaining information that proved the lie.
• The U.S. Attorney committed perjury, and
admitted he’d been intimidated, threatened by
the FBI if he interfered with these informants.
• The DOJ impeded the committee by
withholding, editing, or claiming to have lost
papers.
• In response to suits filed by the victims of these
crimes, the DOJ used litigation tactics “contrary
to respect for the rule of law.”
PDF Page 19
5
*****
The August 19, 2014, headline in Time’s movie
section, reviewing a documentary on the scandal, was,
Who’s the Bigger Criminal, Whitey Bulger or the FBI?
*****
Notably, the report says of federal judge Mark Wolf,
whose landmark decision in U.S. v. Salemme, 91
F.Supp.2d 141 (D.Mass. 1999), started the oversight
process that led to the committee’s investigation, “He
is owed a significant debt of gratitude by everyone
devoted to law enforcement in a democratic society.”
III.
The Eastern District of New York U.S.
Attorney’s and FBI Offices Facilitated and
Covered-Up the Crimes of Racketeer Felix
Sater, a Respondent Here, Because He Was
a Cooperator – but Unlike the Bulger Case,
Here, the Federal Courts Knowingly Went
Along, Ultimately Causing $1B of Injury
In this case, like Whitey Bulger, respondent Felix
Sater, a career criminal and convicted racketeer,
became a cooperating witness and an informant in the
Eastern District of New York and in return was
covertly, and illicitly, not only allowed to, but
emboldened to, in fact facilitated in his efforts to,
commit a billion dollars of continuing predicate crime
during the ten years following his conviction.
And, like Bulger’s case, when one of the petitioners,
an attorney representing victims of those crimes,
discovered the corruption and sought to expose it to
bring Sater and those complicit with him to justice, the
Department of Justice did all it could, no matter how
PDF Page 20
6
corrupt, to cover it up and silence him and his clients,
actively working to prevent state, local, or private
prosecution of Sater.
But there all further resemblance to Bulger ends, as
there’s no Judge Wolf here. To the contrary, to use the
politic language of Caperton1, the evidence would
support the conclusion by an objective, well-informed
observer to a constitutionally intolerable degree of
confidence, that persons in the Department of Justice
were aided and abetted in keeping its corruption secret
by the collusion of Second Circuit district and appellate
judges, themselves implicated ab initio because of the
illegal concealment of Sater’s criminal case and the
illegal sentence he received, judges who, in creating or
upholding a cooperator exception to the constitution,
repudiated their oaths and abused the contempt power
to silence those who would tell the truth, falsified
judicial records, fabricated evidence, refused to afford
due process, and ultimately perpetrated direct fraud
not only on the institution of the court but on this
Court itself.
A. Sater’s 1990s racketeering and related
proceedings, 1998 to 2001, by which time
his conviction and cooperation had been
made public by the government, court,
et al.
Felix Sater has a long history of defrauding
investors and partners in his business ventures. For
1
Caperton v. AT Massey Coal Co., Inc., 556 U.S. 868 (2009),
quoting Withrow v. Larkin, 421 U.S. 35 (1975) (“probability of
actual bias…[by]…judge…too high to be constitutionally
tolerable”).
PDF Page 21
7
example, in 1998 he pled guilty to racketeering for
operating a “pump-and-dump” penny stock fraud in
partnership with other Russian and La Cosa Nostra
career criminals, bilking investors of at least
$40,000,000.
That should have signaled the end of his business
career and the possibility of restitution for the victims
of his crimes. Not so. Because he agreed to cooperate,
his entire criminal docket was not only “sealed,” but
“super-sealed,” indeed illegally so, infra, leaving his
victims and third parties unaware of his conviction.2
Apparently, from the time of his plea in 1998
through the end of 2001, Sater cooperated in the
investigation, arrest, and prosecution of his coconspirators in the stock fraud.3
While petitioners don’t know the details of his
cooperation (but take it on faith that there was at least
some), one thing they do know, because it is a matter of
public record, is that on and after March 2, 2000, by the
deliberate action of the government, the fact of Sater’s
conviction, and that of several of his co-conspirators
who also agreed to cooperate, like Sal Lauria, became
2
This court’s Richmond line of cases, with which familiarity is
assumed, all require procedural and substantive formality before
a proceeding or document in a criminal case may lawfully be closed
to public access. The judge in Sater’s criminal case stated on the
record many times that he never signed a sealing order, (App.M at
86-87), as is confirmed by the record, see U.S. v. Sater, 98-CR-1101
(E.D.N.Y.) (Glasser, J.), as is the fact that no record findings
capable of review to justify any such closure were made.
3
All relevant process in relation to his co-conspirators took place
sub nom. U.S. v. Coppa, 00-CR-196 (E.D.N.Y.) (Glasser, J.).
PDF Page 22
8
public property forever because Loretta Lynch, then
E.D.N.Y. U.S. Attorneys, Lewis D. Schiliro, NYC FBI
Assistant Director, Howard Safir, N.Y.P.D.
Commissioner, issued a worldwide press release
announcing the arrest of the Coppa defendants and
disclosing that Sater, Lauria, et al. had already pled
guilty to racketeering charges.4
Six months later, on September 13, 2000, the
release was placed in the Congressional Record during
House hearings, Organized Crime on Wall Street.
Arguably, there might be some debate whether the
press release itself effectively revealed that Sater et al.
were cooperating, for example given the fact that they’d
already pled, but any ambiguity on that score went
away within a year, because by 2001 the government,
Coppa defense attorneys, and the presiding judge
(Glasser, J.) had placed in the public files of the case,
thus making it public property, any number of
documents explicitly confirming Sater’s cooperation.5
4
The press release did travel around the world: “19 Charged in
Stock Scheme Tied to Mob,” The New York Times, March 3, 2000;
“40M Stock Scam 19 Said to Have Ties to U.S., Russian Mobs Are
Charged,” The New York Daily News, March 2, 2000; “Borscht
Boys & Goodfellas In $40M Stock Swindle: Feds,” The New York
Post, March 6, 2000 ; “Mob Influence Hit on Wall Street,” CNN
Moneyline News Hour, aired March 2, 2000; “19 Accused After
$40M Stock Fraud,” The Manchester Guardian UK.
5
The public court files of the Coppa case, which have always been
public (but which were hidden in the E.D.N.Y. for two years, infra)
contain: (1) The government’s witness list for the Coppa proceeding
against Daniel Persico, a captain in the Colombo crime family,
showing Sater set to testify as a government witness; (2) a
memorandum in support of Coppa defendant Lev’s request for
PDF Page 23
9
In short, by late 2001, anyone who cared to know,
certainly including the Coppa defendants and their
lawyers, knew Sater had pled and was cooperating, as
the information was public property and publicly
available – if you knew where to look.
Then why was there any legal basis to maintain the
“sealing” (illegal concealment) of his entire criminal
case (of course Sater had not yet been sentenced
himself)? Petitioners do not know, for this point has
never been answered despite their many times raising
it throughout the years of litigation, but a good guess
is that the FBI promised to do a favor for Sater after
the 9/11 attacks, and making his criminal record
disappear was the favor.6
additional information on “cooperating witnesses” Sater and
other(s); (3) An objection by Lev’s attorney, Jeffrey Lichtman, to
information in Lev’s PSR about his “threat” against Sater (see
next); (4) said PSR, discussing Lev’s threat; and excerpts from the
website of Jeffrey Lichtman describing how he had Lev’s charges
reduced from racketeering to harassing a government witness
(Sater) by showing that said witness was committing crimes of
fraud during his cooperation. (App.AG at 168-178).
6
In Lauria’s 2003 autobiography The Scorpion and the Frog, he
says he and Sater were resigned to imprisonment because their
attempt at freedom, buying Stinger missiles from Afghanistan, had
failed, but that right after 9/11 Sater called him excitedly to tell
him that they were now going to be the FBI’s new best friend
because of Sater’s Middle East contacts and that in return the FBI
would “suppress” Sater (and Lauria’s) connection to the Coppa case
“as much as possible.” (App.AH at 182-183).
PDF Page 24
10
B. Sater’s all-new racketeering and related
proceedings while cooperating or
informing, from 2002 through 2009
During the ensuing years of his cooperating and
informing, while not yet sentenced for the stock
racketeering so supposedly subject to incarceration and
revocation of his cooperation agreement if he
committed crime, Sater took advantage of the secrecy
by resuming his old tricks and defrauding new victims.
By 2002, he had infiltrated and largely controlled
Bayrock, a New York developer with ties to organized
crime, in the next several years using it to launder
hundreds of millions, skim and extort millions more,
and again swindle his investors and partners, for
example fraudulently inducing banks to lend hundreds
of millions to Bayrock by concealment fraud (hiding the
material fact of his conviction from them), threatening
to kill anyone at the firm he thought knew of the
crimes committed there and might report it.7,8
7
At least three Bayrock persons, one former employee and two
partners, have given sworn statements that Sater had threatened
to kill them if they ever complained about or revealed anything
Sater had been doing wrongfully at Bayrock.
8
It should be noted for the record that, while the Sater press
release was written up and publicized widely, oddly enough his
name was not used in any of that coverage, and so even to this day
searching on his name will not find it, except in the Congressional
record, where of course one would have to know to look in the first
place. Similarly, while the public Coppa records were always
available, one would have to think to look there. Thus, it’s
understandable that many persons, including at Bayrock, would
not know of his conviction, even though it was public property.
PDF Page 25
11
(By no means was Sater the only person committing
crimes at Bayrock; Julius Schwarz, it’s CEO and
General Counsel, was responsible as well because he
was aware of Sater’s secret conviction yet hid it.)
Supposedly, after taking a fortune out of the firm,
and arranging for much of it to be placed into trusts for
his family to remove it from the reach of his victims
(recall he had yet to be sentenced), Sater severed his
ownership in and other ties to Bayrock in 2008.
C. Sater’s sentencing in 2009
Finally, on October 23, 2009, more than a decade
after his guilty plea and long after his purported
cooperation and informing had ended, Sater stood
before federal district judge I. Leo Glasser in courtroom
8B of the Eastern District of New York to be sentenced.
It was over in less than an hour. Though Sater had
faced nearly 20 years of confinement, Judge Glasser9
imposed neither confinement nor probation. That, at
least, was within his discretion.
But, though Sater had also faced mandatory
forfeiture of $80,000,000, Judge Glasser imposed no
forfeiture, only a fine of $25,000, and though Sater had
further faced mandatory restitution of $40,000,000,
Judge Glasser imposed no restitution at all, in sum
9
Judge Glasser had years before gained notoriety for sentencing
“Sammy the Bull” Gravano to 4½ years’ time served as a reward
for cooperating against John Gotti, suggesting the 19 mob hits
Gravano had admitted couild be thought of as a public service.
PDF Page 26
12
letting Sater keep virtually all of the millions he’d
admitted receiving from the criminal scheme10.
The government might have been expected to
complain about its loss of $79,975,000. But that was
the last thing the government was going to do because
the government had intentionally fouled the criminal
information to which Sater had pled, making
imposition of a forfeiture sentencing order, though
mandatory, impossible, doing so to “protect” Sater from
receiving a sentence mandated by Congress11.
Those defrauded lenders might have been expected
to complain, since during his allocution Sater admitted
that he’d concealed his conviction from them because
he knew they wouldn’t have lent otherwise.12 After all,
most of the loans had been written off, many of the
lenders had become insolvent, and not one would have
lent a dime had they known the truth, as Sater had
just admitted. But those complaints were never going
to happen because even then the lenders still had no
idea of his conviction, thus had no idea of his
10
In his 2004 PSR, of which this Court allowed limited disclosure
by its order of June 25, 2012 on docket 12-112, the Officer states
that he did not ask Sater what he had done with the millions of
dollars of proceeds of the stock fraud he had admitted receiving.
11
The sentencing transcript says there was a bargained forefeiture
order in the cooperation as to a house in Hampton Bays. The
cooperation agreement does describe such a house but the public
property records do not show a transfer occurred. In any event,
whatever the truth, the house would have been worth perhaps
$420,000, or 1/200th the mandatory forfeiture order.
12
The sentencing transcript is in the Appendix. (App.E at 32).
PDF Page 27
13
sentencing, a situation everyone present in that
courtroom had every reason to perpetuate forever.13
Probation wasn’t going to say anything because five
years before, in the 2004 PSR they’d prepared when
Sater was first scheduled to be sentenced, fn.10, the
officer who wrote it admitted he’d participated with the
government in helping Sater conceal his conviction
from Bayrock and his partners at the firm, thus
facilitating and emboldening Sater’s crimes, including
the financial institution concealment fraud.
Thus, while the four FBI agents present, including
Leo Taddeo -- who as former head of the E.D.N.Y.
Russian organized crime squad and Sater’s handler
was well familiar with the crimes of Sater and his
father, a Mogilevich crime syndicate boss14 -- might
have been expected to arrest Sater once they heard him
confess bank fraud, that was the last thing they were
going to do because it had been part of the
government’s deal with him to facilitate, and ignore,
the crimes, and they would certainly have some
explaining to do how this all happened under their
noses.
13
One should note Sater’s allocution, where he complains that he
had been trying to turn his life around but because the NY Times
had “outed” him he had to leave “his” company (Bayrock) because
the banks would now no longer lend. Does this sound like someone
who expected that this would ever become public, or like someone
who had been promised it would all stay secret forever?
14
His father, Michael Sheferofsky, had his own criminal record and
corresponding secret docket in the E.D.N.Y. see infra.
PDF Page 28
14
Accordingly, the E.D.N.Y. AUSA’s present, Todd
Kaminsky and Marshall Miller, who might have been
expected to ask to adjourn to void Sater’s plea
agreement and ask his bail be revoked so he could be
held in custody while they sought to indict him for the
continuing racketeering he’d just admitted
(participating in the operation of Bayrock through a
pattern of bank fraud), weren’t going to do anything
because they, too, had compromised themselves by that
arrangement to help him hide his conviction – a
conviction that was already public property, remember.
The AUSA’s had another reason to keep this all
concealed, or rather 1,200 reasons, namely Sater’s
victims. Naturally all those victims of Sater’s stock
fraud, most of them elderly, some Holocaust survivors,
would have been expected to raise hell about his
minimal sentence and the nearly 15 years it took to get
there, and would have been expected to sue for an order
of restitution15. After all, at interest that $40,000,000
of mandatory restitution Sater should have been
sentenced to would have grown to $120,000,000 by
2009.
Moreover, his liability to his victims in civil RICO
wasn’t actionable until his conviction became final on
entry of a judgment and commitment order16, and by
2009 with accretion, treble damages, and attorneys’
fees, that liability likely exceeded $500,000,000.
15
Victims may petition for restitution if denied same, or denied
sufficient amounts thereof, at sentencing. 18 U.S.C. § 3771(d).
16
18 U.S.C. § 1964(d).
PDF Page 29
15
So indeed those victims might have been expected
to make themselves heard vociferously, but that, too,
was never going to happen because, like the banks, the
victims had never been told of Sater’s sentencing (or,
for that matter, even the existence of his case).
However, unlike the banks, the victims were the
express beneficiaries of a statutory right not only to be
told of it, but to be invited to participate in it17, and it
was the duty of the very same AUSA’s, Kaminksy and
Miller, to make that happen. And rather inevitably,
since there would have been little point in their saving
Sater from tens of millions in mandatory forfeiture only
to have him ordered to pay tens of millions in
mandatory restitution, those AUSA’s repudiated their
duty and completely ignored the victims, not even
bothering to find them beyond those on lists they
already had from the NASD; that this was a
repudiation of their duty there can be no doubt because
AUSA Miller was at the time the E.D.N.Y. victims’
rights compliance officer and so had to know perfectly
well what his duties were to the victims – and to the
law.18
Mr. Miller is now the fourth ranking official in the
Department of Justice, Principal Deputy Assistant
Attorney General for the Criminal Division to Leslie
Caldwell, Assistant Attorney General for the Criminal
Division, the third ranking official. Ordinarily one
17
18
18 U.S.C. § 3771(a).
Remember, their duty is to seek out the victims, inform them of
their rights, and see to it that they were treated with fairness and
dignity. Id. Intentionally failing to notify them of an open court
(public) sentencing proceeding is a serious transgression.
PDF Page 30
16
might wonder whether Ms. Caldwell knows that her
assistant participated in this dishonor of the victims,
and what that augurs for his fealty to victims’ rights,
rights of court access, and his respect for Congressional
mandate in his current position, but this case long ago
departed from the ordinary, and there is no need to
wonder whether she knows, because she does.
Of that there is no doubt, because Ms. Caldwell,
who at the time of Sater’s plea bargain and conviction
was herself an E.D.N.Y. AUSA and at the time of his
2009 sentencing was head of Morgan Lewis’s criminal
defense practice, was also right there in court at that
sentencing, appearing as Sater’s lead defense counsel.
One presumes Ms. Caldwell wouldn’t have wanted
this to see the light of day if, as seems quite likely, the
fees Sater was paying her firm had to be traceable to
money he’d taken from Bayrock19, thus further
traceable to the financing he’d procured by fraud, or to
money he’d kept from his earlier racketeering and had
been spared forfeiting; either way the money was
proceeds of specified unlawful activity.
(That she knew their provenance is without doubt
as well, because in March 2010, barely six months after
his sentencing, Sater gave deposition testimony in
which he said that Ms. Caldwell had advised him that
he should refuse to testify whether he’d concealed any
convictions while at Bayrock because if he admitted he
19
His 2004 PSR says Sater told his probation officer that he had a
negative net worth, and the only source of income anyone is aware
of over the ensuing years was from Bayrock.
PDF Page 31
17
had he’d be exposing himself to criminal liability20;
unless she was corruptly advising him to take the fifth
and so was guilty of obstruction, Ms. Caldwell was
obviously well aware that her client had committed
hundreds of millions of dollars of concealment fraud at
Bayrock, just as he’d allocated to at his sentencing.)
And finally, as to Ms. Caldwell, we must presume
that she normally did not allow her cooperator clients
to admit at their sentencing allocutions that they had
used the secrecy of their dockets to perpetrate bank
fraud while cooperating unless she knew in advance
that no one would be surprised and no one would care.
And that suggests the question, Why let him admit
it at all? If he’s in open court, admitting his
participation in a billion dollars of bank fraud, doesn’t
he risk having the banks go after him, or Bayrock?
But then of course he wasn’t in open court. Even
though the Second Circuit has held that there is a first
20
“On the advice of counsel, I am not going to answer that question
as I don’t have to incriminate myself…On the advice of counsel, I
won’t answer past what I have already answered…My counsel is
Leslie Caldwell from Morgan Lewis.”
“Did she know you would be asked this question?”
“Yes.”
“Did she advise you not to answer this question?”
“Yes.”
“The grounds being again?”
“Not to incriminate myself…”
PDF Page 32
18
amendment public right of access to sentencings21, and
other laws and rules provide the same22, nothing
anywhere in the (now public) Sater docket shows there
was any unsealing of the case before sentencing; quite
the contrary. So surely, albeit illegally, his sentencing
was not being held in public.
(Of course if it were in open court, the fact that the
transcript shows his real name used throughout would
eliminate any chance of his cooperation or his
conviction remaining secret, as both were disclosed.)
Finally, there is the judge presiding (Glasser, J.).
He, too, had a duty to the victims, or rather in his case
to ensure that the government discharged its duty to
them23, and the transcript shows he did nothing about
victims’ rights whatsoever. At a minimum, this is
consistent with a sealed, rather than public, sentencing
proceeding, because even if illegally sealed it might at
least explain why the victims hadn’t been told of it24.
IV.
Petitioner Oberlander Discovers the
Crimes and the Cover-Up and Sues to Stop
Them
Petitioner Oberlander is a New York attorney who
represents minority partners in Bayrock, one of them
Bayrock’s former Director of Finance, and also
21
U.S. v. Alcantara, 396 F.3d 189 (2d. Cir. 2005).
22
See, 18 U.S.C. § 3553(c) (court at time of sentencing shall state
“in open court” its reasons for imposing the particular sentence).
23
18 U.S.C. § 3771(b)(1).
24
18 U.S.C. § 3771(a)(2).
PDF Page 33
19
represents victims of Sater’s 1990s stock fraud. These
partners engaged petitioner on suspicion they had been
defrauded by other partners, including Sater and
Schwarz. Subsequently, they directed him to sue.
When petitioner began drafting a RICO complaint
in 2009, publicly available information showed Sater
was “connected to” organized crime. For example, a
1998 Business Week article, and a 2007 New York
Times article, discussed Sater’s involvement in the
aforementioned stock fraud. And it was widely believed
that Sater had been only an “unindicted co-conspirator”
who avoided prosecution by cooperating; he was indeed
listed as an unindicted co-conspirator in the public
Coppa docket.
There was, however, information from which one
could infer Sater had been prosecuted. For example, a
co-conspirator, Klotsman had told the Times Sater had
pled guilty. And the Times quoted Sater’s lawyer, who
didn’t deny it, but just challenged anyone to find it.
On March 1, 2010, these suspicions were confirmed
when unexpectedly, and without solicitation, petitioner
received documents from a whistleblower, a former
employee of Bayrock, who found them on the Bayrock
email servers during his prior work there.
The documents were Sater’s criminal complaint,
information, proffer, and cooperation agreement, all
from 1998, and a PSR from 2004, all from his secret
case, 98-CR-1101 E.D.N.Y., identifying Sater by his
true name, confirming he had pled guilty to
racketeering, and had been scheduled for sentencing in
2004.
PDF Page 34
20
Petitioner, concluding at least $750,000,000 of the
firm’s capital, had been procured with the fraudulent
concealment of Sater’s conviction, and that the firm’s
customers were being defrauded daily by sales of
condominiums pursuant to false and misleading
offerings, acted quickly.
On May 10, 2010, petitioner filed a civil RICO
complaint, 10-CV-3959, S.D.N.Y., charging Sater and
others with operating the firm through a pattern of
crime, including excerpts from the documents. Within
a day Courthouse News had the story and a copy of the
complaint with the excerpts online, available for
download. Additionally, upon receipt, the firm’s general
counsel disseminated the complaint to several named
defendants and attorneys on May 12, 2010.
V. Procedural History I
On May 18, Sater obtained an ex parte TRO from
the same judge who had secretly tried him, (Glasser, J.,
E.D.N.Y.), enjoining dissemination of the documents
and ordering a hearing to ascertain how petitioner got
them, making petitioner a respondent in his secret
criminal case, U.S. v. Sater, (recall he had been
sentenced only a few months before).
On June 14, the second of four days of hearings,
petitioner asked the court reveal any order purporting
to seal anything, or bind him. Judge Glasser
admitted “there is no formal order” and he
couldn’t “find any order signed by me, which
directed that this file be sealed,” and there was no
indication in the first filing “or in any subsequent
document that an application was made or
request was made in that document to seal that
PDF Page 35
21
file.” He further emphasized that there were no
orders ever issued that bound petitioner and there
were no sealing orders ever issued. (App.M at 85 et
seq.).
On July 20, Judge Glasser issued a permanent
injunction prohibiting dissemination of the PSR and
stated that while one could infer that the former
Bayrock employee who gave petitioner the documents
“may” have stolen them he still wondered “[w]hat order
of the Court was violated by that. Sater testified
briefly, but neither he nor other witnesses spoke of
any threat of harm they had encountered or had
reason to believe they would encounter if anyone
knew of Sater’s role in the stock fraud, nor did
anyone introduce non-parol evidence of it.
Judge Glasser issued TRO’s on the other
documents, claiming to have found a risk of harm to
Sater, but refused to state what that risk was or where
he had obtained the evidence of it, and never put any of
it on the record (we now know, because he had none).
Petitioner appealed, but it was delayed for months
because Judge Glasser refused to send the notices to
the Second Circuit, keeping them in chambers.
Finally, on their transmittal, the government moved
to seal the appeal and, prior to any hearings or
submissions, the Second Circuit issued sua sponte
ex parte gag orders barring petitioner and his
clients from revealing any documents filed in
related cases in the Eastern or Southern Districts
or the Second Circuit and expressly barred them
from telling Congress what they had learned.
PDF Page 36
22
At argument on the government’s motion to seal,
AUSA Kaminsky said Sater’s criminal case had
been secret since inception, (App.AL at 207 et seq.).
On questioning by the panel, Kaminsky said he
believed there was a serious risk of harm to Sater if
any of this got public.
Petitioner argued that none of these facts were in
the record, so were only argument, and that the First
Amendment required the appellate docket be public.
The court conceded that media organizations could not
have been enjoined had they come into possession of
the documents at issue, and such appellate proceedings
would be open, but petitioners could be gagged because
they’re not the media:
Judge Cabranes asked for assurance from the
government that: “[W]e are not talking about
preventing a news organization from publishing a
matter of public concern or impinging on editorial
discretion.”
Judge Pooler responded to petitioner’s First
Amendment arguments with: “We are not dealing here
with prior restraint of the press or media. That’s what
the Pentagon Papers case was about. [Newspapers
have a special charge in publishing information for
citizens. [Petitioner] doesn’t have any charge in making
this information available to citizens.”
The court then issued a summary order,
maintaining the appellate case under blanket seal,
noting “In light of the serious, indeed grave,
concerns expressed by the United States regarding
the possible consequences of unsealing these
documents, and the absence of any sufficiently
PDF Page 37
23
persuasive countervailing
expressed by [petitioner]...”
considerations
*****
The importance of the last pages to the maintenance
of a court system built upon fundamental fairness and
due process cannot be over-emphasized. Respectfully
we ask the Court to consider the following:
• Judge Glasser issued a permanent injunction on
dissemination without regard to the norms of
procedural and substantive due process.
• AUSA Kaminsky sat through four days of
district court hearings without introducing
evidence or asking a witness about risk of
harm…
• The Second Circuit blanket sealed an entire
appeal, to this day maintaining hundreds of
filings under seal, based on a record with no
evidence of any risk or reason to believe there
might be a risk based solely on Kaminsky’s
beliefs, which petitioner wasn’t allowed to
contest because it wasn’t done at a hearing.
• The government had made the conviction
public ten years before, by the press release,
but Kaminsky was there perpetrating fraud
on the institution of the court by lying,
saying the government had not (petitioner
hadn’t yet found the press release).
• When petitioner found the press release after
the hearing, and confronted Kaminsky with it,
the government asked to unseal Sater’s docket
PDF Page 38
24
by letter which admitted that the government
had not had any evidence for over ten years that
there had ever been any risk of harm or any
impediment to recruiting cooperators, which
meant Kaminsky knew he had no factual
basis to be opining and arguing before the
Second Circuit that there was grave,
imminent risk and cooperator recruiting
might be impaired. (App.V at 130).
• Kaminsky had been at Sater’s sentencing a
year earlier and had heard him admit the
bank fraud he perpetrated at Bayrock, and
was in possession of a copy of petitioner’s
May 10, 2010 RICO complaint and knew it
exposed the massive related crimes at
Bayrock, yet if petitioner had not found the
press release Kaminsky would have
prevailed in arguing that Sater’s hundreds
of millions of concealment frauds could
never be revealed because there might be a
threat to him. Forgive us for thinking the
threat would be a lot more to Kaminsky et
al. for allowing Sater to commit the frauds
at Bayrock.
• Finally, the government, Sater, the court,
all of them, knew there was a public Coppa
file in Lee Summit Archives for ten years
holding documents showing the public
revelation of Sater’s cooperation, not just
conviction. Why weren’t they admitting it?
Presumably, they knew he wouldn’t find it,
because when petitioner began requesting it
from Lee in November 2010, before the
PDF Page 39
25
Second Circuit hearing, he was told, and
would be told for years, that it had been
requested by, and then disappeared in, the
E.D.N.Y., while the E.D.N.Y. professed to
have no idea how they had misplaced it,
maintaining this lie for two years until it
turned up one day after Sater’s docket had
gone public.
VI.
Procedural History II
The Second Circuit eventually upheld the injunction
on the PSR, and this Court denied cert, but not before
granting petitioner’s motion, see docket 12-112, to be
allowed to disclose the contents of the PSR which he
felt showed government and judicial misconduct.
While the initial disclosure was, as ordered, without
use of Sater’s name, the press interest even before this
court’s order granting the motion had motivated
several persons, most prominently The Miami Herald
and petitioner Palmer, a private citizen, to join in the
attempt to unseal Sater’s case, and after an accident in
the E.D.N.Y. clerk’s office that exposed the entire
docket online for a week, Judge Glasser ruled he had
no choice but to unseal it permanently.
Judge Glasser then proceeded to hold hearings on
what documents on the docket would be unsealed and
what would remain sealed, or “sealed,” and those
hearings concluded in late 2012.
At the beginning of those hearings, Judge Glasser
ordered everyone but Sater and his counsel and the
government removed from the courtroom, including
movants (petitioners here), and announced that we
petitioners were prohibited from introducing any
PDF Page 40
26
evidence into the unsealing proceedings, that he would
rule based on his own knowledge of the case and what
the government gave him and what Sater gave him,
but would take evidence from no one else, even though
petitioners here had authored almost 75% of all the
documents in question during the prior years of
litigation and so already had access to them anyway.
Then, when petitioners sought to introduce evidence
by document, through motion for judicial notice, Judge
Glasser threatened quasi-criminal sanctions for
“vexatious litigation” and held the submissions out of
order.
Petitioners then appealed from the unsealing order,
as noted in the front of this petition, on the ground that
the entire proceeding had been structurally defective
because the failure to allow us to present evidence that
there never had been any risk and that it had all been
public for years anyway was Fifth Amendment
structural error.
The Second Circuit in a summary order upheld
Judge Glasser, held that even though we had not been
permitted to introduce evidence we had “made our
views known” [sic], whatever that means, and further
held that even though Judge Glasser had made no
record findings of risk (or anything else) capable of
appellate review, merely listing “risk” conclusorily as
his reason for each closure maintained, that because of
the “gravity” of Sater’s cooperation the binding
precedent that there must be such express, reviewable
evidentiary findings need not apply in this special case.
Petitioners seek cert therefrom.
PDF Page 41
27
VII.
Procedural History II
In the interest of expedience, petitioners will
accelerate the remainder of this petition to present the
points in bullet point list format rather than text.
• On March 19, 2013, a few days before
petitioner’s prior petition was due to be
conferenced, the Solicitor General forwarded a
“sealed,” secret, ex parte order of Judge
Glasser’s (App.AI at 184) to this Court which we
had never seen and which was never docketed
and which contained the statement (this is now
a matter of public knowledge) that Sater had
been sentenced in public, in other words in open
court.
In the prior pages, petitioners explained that it
was inconceivable that it was taking place in
open court because Sater was admitting a billion
dollars of fraud while cooperating. Petitioners
also explained that if in fact it was open court,
then that meant that Judge Glasser, Kaminsky,
and Miller had willfully and intentionally defied
their statutory obligations to the victims. Yet
there that order is.
Regrettably, it appears that that much of it was
a fraud directed at this Court, if so the first time
in known history that a sitting federal judge
perpetrated a fraud targeted at this very Court.
Equally if not more regrettable is that the order
also contains a ruling that one Danny Persico
had threatened the life of Sater in an attack on
Lauria soon after the unsealings began claiming
that he only then knew who had informed on
PDF Page 42
28
him. Persico is a member of organized crime and
was a co-conspirator of Sater and Lauria’s in the
stock fraud. But Persico is more than that. He is
a childhood friend of Lauria’s, and Lauria
admits in his own book that he himself told
Persico he informed on him and that while he
seemed to take it well, the FBI told him later
(this is 2002, remember) that Persico had been
making threats against him, a story he repeated
in his (Lauria’s) own sentencing allocution
before Judge Glasser in 2004.
Ordinarily, the ramifications of a sitting judge
participating in the fabrication of evidence like
this to justify the concealment he was
responsible for would be unthinkable, but on
May 15, 2011, Sater’s lawyers wrote petitioner
through counsel warning that they had an
agreement with Judge Glasser that he would not
take up any unsealing motion we made and
would ignore our arguments if he did25. Both
happened as they predicted, as noted already in
the refusal to allow us to admit evidence and, as
we mention in closing, with the ex parte, secret
withdrawal of the government’s March 17, 2011
letter motion to unseal, kept from us for six
months.
25
“Even if Judge Glasser decides to hold a hearing or oral
argument to determine whether to unseal specific docket entries
of Doe’s criminal proceeding, he will do so without considering your
arguments or appeals. If you believe you are driving the unsealing
issue, you are mistaken.”
PDF Page 43
29
And in view of the several ex parte merits
conferences Judge Glasser ordered with the
government and counsel for Sater, to petitioner’s
exclusions, and without petitioner’s knowledge,
all shown on the now unsealed docket of 98-CR1101, who wouldn’t believe this is all collusive,
at best.26
• Under no circumstances is this petition a claim
of error, and importantly we ask this Court to
understand that this problem of illegally secret
cooperator cases and cover-ups that make the
Bulger case, at least in terms of dollars, look like
an amateur operation is not limited to this one
case.
• At approximately the same time that Sater was
pleading guilty, three co-conspirators, Richard
Appel, Sal Romano, and Myron Gushlak, were
engaged in pump-and-dump fraud of their own,
involving a penny stock controlled by Gushlak.
As with Sater, they bribed brokers to push the
26
A Status Conference as to Felix Sater was held on 1/10/2012
before Senior Judge I. Leo Glasser: AUSA Todd Kaminsky and
Evan Norris appeared on behalf of the Government. Michael Beys
and Jason Berland appeared on behalf of John Doe. The Court
directed the government and John Doe to provide a detailed
chronological account with transcripts, of what the core issues
involving this case and how it evolved into a First Amendment
issue. The Court will issue an Order on Notice to Mr. Lerner
directing the parties to brief the issues before the Court. The
parties agreed to submit a Scheduling Order to the Court to be “So
Ordered.” (Court Reporter Charleane Heading.) (Francis, Ogoro)
(Entered: 01110/2012)
PDF Page 44
30
stock, in this case including brokers at a firm
called Montrose.
Eventually all three were caught and pled out
and became cooperators. That’s not the
interesting part. What’s interesting is that they,
each of them, openly admitted and stipulated
that they were co-conspirators in the scheme.
Accordingly, both for Pinkerton and restitution
purposes they had to have exactly the same set
of victims to whom they were liable.
When Romano came to be sentenced, the
government told the E.D.N.Y. judge, Carol
Amon, now chief judge of that district, that
Romano had been a great cooperator and that
sadly she could not order Romano to pay
restitution because the government simply had
no idea who they were. The government then
asked her to issue a finding to that effect, which
she did, thus for all practical purposes ending
any ability to get Romano to pay restitution.
When Appel came to be sentenced, surprisingly
enough all of a sudden the government knew
who the victims were, and sought and obtained
a $3,000,000 restitution order.
But when Gushlak came up for sentencing, his
restitution order was for $17,000,000, on top of
a $25,000,000 find. Why?
Because, as to restitution, the sentencing judge
held that as Gushlak, Roman, and Appel had coequal liability, and the government’s expert for
Gushlak’s trial had calculated $17,000,000 as
the aggregate loss for all of them, including all
PDF Page 45
31
the persons Appel had defrauded at Montrose to
further the scheme even though Gushlak had
never heard of them, Gushlak had to pay for all
of it.
Of course this is correct, but that’s not the point.
The point is, the victim loss sheets, as the
dockets reveal, were in the possession of FINRA
(blue sheets), and it is not possible that they
didn’t exist and so the victims couldn’t be found
for “wonderful” cooperator Romano but could be
found for the other two.
What’s even more impressive is that the reason
Gushlak was fined $25,000,000 and sentenced to
may years’ incarceration was that the judge
denied him acceptance credit. Why? Because the
government showed the judge that, just like
Sater, Gushlak had used his secrecy to defraud
investors, lenders and partners, just as Sater
admitted doing at Bayrock.
It’s very fascinating that what sends one man to
prison becomes something that is not to be
spoken about as to Sater, but petitioners will
speak, for what it is, more evidence that Sater,
like untold others, is benefiting from a covert,
and corrupt, promise to keep him “safe.”
• Finally we bring up two cases. One, Sheferofsky,
is a criminal case in the E.D.N.Y. where the
defendant admitted to running a scheme of
attempted extortion and extortion for ten years.
His entire docket was hidden for six years, with
no evidence of formality observed, but
importantly, when he got sentenced, the
PDF Page 46
32
government said there need be no restitution
because the victims were dead, criminals, or
unknown. The government had to know
perfectly well that the statute provides that
restitution is awardable to the representative of
a victim, too. It’s probably not irrelevant then to
note that Sheferofsky is, or was, Sater’s father,
and the dates on the closures of his docket
match the concealment of Sater’s.
• The other is United States v. Shereshevsky (no
relation), SDNY Docket No. 94-cr-248. On May
5, 1994, Shereshevsky was arraigned for bank
fraud, pled not guilty and was released on bail.
That was what the public docket reflected until,
June 26, 2002. The docket reflects that on that
date it was “entered” that eight years earlier, on
May 5, 1994 (viz. the same date as the docketed
not-guilty plea) Shereshevsky had actually pled
guilty to bank fraud. The Southern District
deliberately allowed false information to remain
on the public docket for eight years, a fraud on
the public.
Presumably, Shereshevsky was given the benefit
of secrecy because he was a cooperator, and
apparently got leniency – time served, two years
supervised release, and a restitution order off
$39,000. What did Shereshevsky do with himself
while “cooperating” with the government? He
perpetrated a multi-hundred million dollar
WexTrust Ponzi scheme.
One of the judges who, apparently, actively
falsified his docket, Michael Mukasey, went on
to become the Attorney General. On September
PDF Page 47
33
24, 2001, he issued a “speedy trial” ruling on the
docket, to keep up the false appearance that the
defendant had actually pled not guilty. (App. F
at 42).
REASONS FOR GRANTING THE WRIT
I.
The Integrity of the Federal Court System
Depends on This Court’s Confirming That
Lower Courts May no More Defy Binding
Precedent or Wrongfully Infringe Upon
Fundamental Rights Than They May Defy
Mandatory Sentencing or Similar Statutes
The factual history of this case is complex, but the
legal principles are not. Simply put, the Second Circuit
courts have seceded from the (juridical) union to form
their own state where the cooperator exception they
have invented of whole cloth trumps everything else,
including the enumerated and unenumerated
fundamental rights of liberty. And that is something
they cannot be permitted to do.
This case is not about judicial error. Indeed, taking
the word “error” literally, there may well be none.
What there is here, instead, is judicial defiance.
When a lower court decision conflicts with this
court’s binding precedent, ordinarily that’s “mere” error
and this court is not likely to grant a writ. But when
the conflict is so outside the norm of judicial decisionmaking that it requires intervention and review by this
court, that’s cert-worthy. And where, as in this case as
the record plainly shows, that great conflict, that great
deviation from the norm, is an intentional, blatant
disregard for that precedent then, petitioners submit,
this Court is compelled to act.
PDF Page 48
34
II.
A lower federal court’s core “inherent
power” does not include the power to
refuse to impose the lawful sentences
Congress mandates, including restitution
Of course, the lower federal courts have inherent
powers. But, save for a “core” subset, have long been
understood to be subject to Congressional override.27
Even that “core” exception proves petitioner’s point
here, because while Congress cannot interfere with the
ability of a lower court to decide a particular case, that
limitation does not apply at all to the authority of
Congress to set minimum sentences.
This Court held precisely, and unanimously, so a
century ago in the Killits case, Ex Parte United States,
242 U.S. 27 (1916): When a federal court refuses to
27
The Fourth Circuit explained in ACLU v. Holder, 673 F.3d 245
(4th Cir. 2011) [citations and explanations omitted, emph. add.]:
The inherent power of…lower federal courts falls into
three…categories…[F]irst…core Article III power…the
ability of a lower federal court to decide a case over which
it has jurisdiction…once Congress has established lower
federal courts and provided jurisdiction over a given case,
Congress may not interfere with such courts by dictating
the result in a particular case…[S]econd…powers
“necessary to the exercise of all others”…these…are
deemed necessary to protect the efficient and orderly
administration of justice and…command respect for the
court’s orders, judgments, procedures, and
authority”…These…are subject to congressional
regulation…[T]hird…”those reasonably useful to achieve
justice”…Examples…”the power of a district court to
appoint an auditor to aid in litigation involving a complex
commercial matter”…Such are subject to congressional
regulation…
PDF Page 49
35
impose a mandatory sentence, it violates the law and
operates illegally. If there were any doubt that this
applies to a mandatory order of restitution, this Court
put that to rest in Dolan v. United States, 103 S.Ct.
2553 (2010), noting that when Congress said in the
restitution statute that such an order must be imposed
at sentencing notwithstanding any other provision of
law, 18 U.S.C. § 3663A, Congress meant it.
What about cooperator safety? Every filing by
respondent Sater and the government solemnly intones
that warning, arguing that the courts must hide all
this to keep Sater safe, even if, regrettably, he gets to
keep all the money he stole.
The reply must be, Where in Article III are federal
courts vested with police powers? Nowhere. And,
petitioners aver it to be common knowledge that, were
there even such a risk, the Federal Witness Protection
program has never lost a participant.
And frankly, the mere idea is simply nonsensical
that a felon like Felix Sater can assert a subjective
fear, decline witness protection, and as a result then be
allowed to evade restitution, keep the secret of his
conviction, and commit concealment frauds, again by
using that secrecy, and have the courts assert some
inherent power to protect him by enjoining even his
victims, those like petitioner’s clients, who found out
and would stop it.
PDF Page 50
36
III.
Lower courts’ “inherent power” cannot
include the power to defy binding
precedent; moreover, the issuance of a
purported non-precedential “summary
order” by a federal appeals court, as the
Second Circuit issuance here, is
unconstitutional
An elegant argument proving these points is in
Anastasoff v. United States, 223 F.3d 898, vacated en
banc, 215 F.3d 1024 (8th Cir. 2000) wherein a panel of
the Eighth Circuit, later reversed en banc held that a
federal appellate court’s issuance of non-precedential
decisions (summary orders) is unconstitutional.
Petitioners adopt it in its entirety.
IV.
Lower courts’ “inherent power” cannot
include the power to wrongfully infringe
upon enumerated or unenumerated rights
This, of all, is completely self-evident. And
therefore, petitioners submit respectfully, it was wrong
to deny them due process for all these years, both
procedural and, to the extent extant and not covered by
first amendment or other provisions, unenumerated
and thus substantive.
But as wrong as that was, and remains, it was even
more wrong to do that to the confederates of these
criminals, clueless as to the Brady violations that must
be rampant with undisclosed deals, and above all else
to the victims of these criminals, who have no voice
save that which the courts and the government are
tasked to give them. A mighty poor voice it is, indeed.
PDF Page 51
37
CONCLUSION
For all the foregoing reasons, it is most respectfully
requested that this petition for a writ of certiorari to
the United States Court of Appeals for the Second
Circuit be GRANTED.
Dated: November 3, 2014
Respectfully submitted,
Richard E. Lerner
Counsel of Record
THE LAW OFFICE OF
RICHARD E. LERNER, P.C.
1375 Broadway, 3rd Floor
New York, NY 10018
917.584.4864
347.824.2006 Fax
richardlerner@msn.com
Counsel for Petitioners
PDF Page 52
APPENDIX
PDF Page 53
i
TABLE OF CONTENTS
APPENDIX
Appendix A
Summary Order in the United
States Court of Appeals for the
Second Circuit
(June 5, 2014) . . . . . . . . . . . . . App. 1
Appendix B
Order in the United States District
Court, Eastern District of New York
(May 17, 2013) . . . . . . . . . . . . App. 7
Appendix C
Order in the United States District
Court, Eastern District of New York
(May 15, 2013) . . . . . . . . . . . App. 11
Appendix D
Order in the United States District
Court, Eastern District of New York
(March 13, 2013) . . . . . . . . . . App. 15
Appendix E
Transcript of Sentencing Before
the Honorable I. Leo Glasser
United States District Senior
Judge in the United States District
Court, Eastern District of New York
(October 23, 2009) . . . . . . . . . App. 18
Appendix F
Excerpts of Docket Entries
U.S. District Court Southern
District of New York (Foley
Square)
Criminal Docket for Case #:
1:94-cr-00248-CSH-1 . . . . . . App. 40
PDF Page 54
ii
Appendix G
Constitutional, Statutory and
Regulatory Provisions . . . . . App. 43
Appendix H
Letter from Jeffrey Lichtman to
Eric O. Corngold in No. 00 CR 196
(ILG)
(October 10, 2000) . . . . . . . . . App. 66
Appendix I
Letter [Excerpt] from the U.S.
Department of Justice to Lawrence
Ray in No. 00-196 (ILG)
(November 20, 2001) . . . . . . . App. 68
Appendix J
Transcript of Sentencing [Excerpt]
in the United States District Court
for the Eastern District of New
York in CR-98-1102
(February 5, 2004) . . . . . . . . App. 71
Appendix K
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 00-CR-1005 (NGG)
(June 20, 2006) . . . . . . . . . . . App. 78
Appendix L
Transcript of Criminal Cause for
Sentencing [Excerpt] in the United
States District Court for the
Eastern District of New York in 04CR-234 (CBA)
(January 11, 2008) . . . . . . . . App. 81
PDF Page 55
iii
Appendix M
Transcript of Motion Hearing
[Excerpt] in the United States
District Court for the Eastern
District of New York in 98-CR-1101
(June 14, 2010) . . . . . . . . . . . App. 85
Appendix N
Transcript of Oral Argument
[Excerpt] in the United States
District Court for the Eastern
District of New York in CV 98-1101
(July 20, 2010) . . . . . . . . . . . App. 88
Appendix O
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App. 100
Appendix P
Letter (with attachment) from
Morgan, Lewis & Bockius LLP to
Judge Glasser in 98 CR 1101 (ILG)
(August 12, 2010) . . . . . . . . App. 102
Appendix Q
Amendment
to Stipulated
Standstill Order in the United
States District Court for the
Eastern District of New York in 98
CR 1101 (ILG)
(September 27, 2010) . . . . . App. 111
Appendix R
Letter from Morgan, Lewis &
Bockius LLP to Judge Glasser in
98 CR 1101 (ILG)
(November 16, 2010) . . . . . . App. 114
PDF Page 56
iv
Appendix S
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 03cr833
(November 17, 2010) . . . . . . App. 116
Appendix T
Brief for the United States
[Excerpt] in the United States
Court of Appeals for the Second
Circuit, No. 11-1957, United States
of America v. Gushlak
(May 8, 2012) . . . . . . . . . . . App. 124
Appendix U
Letter from the U.S. Department of
Justice to Judge Glasser in No. 98
CR 1101 (ILG)
(November 23, 2010) . . . . . . App. 127
Appendix V
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(March 17, 2011) . . . . . . . . . App. 129
Appendix W
Transcript of Proceedings [Excerpt]
in the United States District Court
for the Eastern District of New
York in 98-CR-1101
(April 1, 2011) . . . . . . . . . . . App. 133
Appendix X
Letter [Excerpt] from Wilson,
Elser, Moskowitz, Edelman &
Dicker LLP to Judge Cogan in No.
98 CR 1101 (ILG)
(April 4, 2011) . . . . . . . . . . . App. 138
PDF Page 57
v
Appendix Y
Order in the United States District
Court for the Eastern District of
New York in 98-CR-1101
(April 4, 2011) . . . . . . . . . . . App. 147
Appendix Z
Order in the United States District
Court for the Eastern District of
New York in 98-CR-1101
(January 26, 2012) . . . . . . . App. 149
Appendix AA
Letter [Excerpt] from the U.S.
Department of Justice to Judge
Glasser in No. 98 CR 1101 (ILG)
(January 26, 2012) . . . . . . . App. 151
Appendix AB
Order in the United States District
Court for the Eastern District of
New York in 98-CR-1101
(February 2, 2012) . . . . . . . App. 153
Appendix AC
Letter from the Solicitor General to
the Supreme Court of the United
States
(March 19, 2013) . . . . . . . . . App. 155
Appendix AD
Email from Todd Kaminsky
(March 28, 2013) . . . . . . . . . App. 157
Appendix AE
Complaint [Excerpt] in the
Supreme Court of the State of New
York County of New York . App. 159
PDF Page 58
vi
Appendix AF
Movant John Doe’s Supplemental
Memorandum of Law in Further
Support of Permanent Injunction
[Excerpt] in the United States
District Court Eastern District of
New York . . . . . . . . . . . . . . App. 164
Appendix AG
Public Records [Excerpt] in U.S. v.
Coppa 00-CR-196 (EDNY) . App. 168
Appendix AH
The Scorpion and the Frog
[Excerpt] . . . . . . . . . . . . . . . App. 178
SEALED APPENDIX
Appendix AI
Memorandum and Order in the
United States District Court,
Eastern District of New York (filed
under seal)
(March 14, 2013) . . . . . . . . . App. 184
Appendix AJ
Letter [Excerpt] from Beys, Stein
& Mobargha LLP to Judge Cogan
(August 2, 2012) . . . . . . . . . App. 203
Appendix AK
Transcript [Excerpt] in the United
States Court of Appeals for the
Second Circuit
(February 14, 2011) . . . . . . App. 207
PDF Page 59
App. 1
APPENDIX A
13-2373-cv
In re: Applications to Unseal
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
No. 13-2373-cv
[Filed June 5, 2014]
______________________________________
IN RE APPLICATIONS TO UNSEAL
98 CR 1101 (ILG), USA V. JOHN DOE
98-CR-01101
------------------------------LORIENTON N.A. PALMER,
FREDERICK MARTIN OBERLANDER,
)
)
)
)
)
)
)
Movants-Appellants,
)
)
-v.)
)
)
JOHN DOE 98-CR-01101,
UNITED STATES OF AMERICA,
)
)
Respondents-Appellees.
)
______________________________________ )
SUMMARY ORDER
Rulings by summary order do not have precedential
effect. Citation to a summary order filed on or after
January 1, 2007, is permitted and is governed by
Federal Rule of Appellate Procedure 32.1 and this
PDF Page 60
App. 2
court’s Local Rule 32.1.1. When citing a summary order
in a document filed with this court, a party must cite
either the Federal Appendix or an electronic database
(with the notation “summary order”). A party citing a
summary order must serve a copy of it on any party not
represented by counsel.
At a stated term of the United States Court of
Appeals for the Second Circuit, held at the Thurgood
Marshall United States Courthouse, 40 Foley Square,
in the City of New York, on the 5th day of June, two
thousand fourteen.
PRESENT:
JOSÉ A. CABRANES,
ROSEMARY S. POOLER,
DENNY CHIN,
Circuit Judges.
FOR MOVANTS-APPELLANTS:
FREDERICK M. OBERLANDER (Richard E. Lerner,
Law Office of Richard E. Lerner, P.C., New York,
NY, on the brief), Montauk, NY.
FOR RESPONDENTS-APPELLEES:
EVAN M. NORRIS (Todd Kaminsky, Peter A. Norling,
Elizabeth Kramer, on the brief), Assistant United
States Attorneys, for Loretta E. Lynch, United
States Attorney for the Eastern District of New
York, Brooklyn, NY.
Jason H. Berland, Beys, Stein & Morbargha LLP,
New York, NY.
Appeal from orders, entered March 15, 2013, May
15, 2013, and May 17, 2013, of the United States
PDF Page 61
App. 3
District Court for the Eastern District of New York (I.
Leo Glasser, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY
ORDERED, ADJUDGED, AND DECREED that the
orders of the District Court are AFFIRMED.
Movants seek the unsealing of certain documents
relating to the cooperation of Felix Sater (formerly
known publicly only as “John Doe”) in a number of
criminal cases. This matter has already been before us
twice. See Roe v. United States, 428 F. App’x 60 (2d Cir.
2011); Roe v. United States, 414 F. App’x 327 (2d Cir.
2011). We assume the parties’ familiarity with the
underlying facts, procedural history, and issues for
review, to which we refer only as necessary to explain
our decision.
DISCUSSION
The Supreme Court has held that judicial
proceedings are presumptively open under the First
Amendment. See Richmond Newspapers, Inc. v.
Virginia, 448 U.S. 555, 573 (1980). It has also
recognized a common-law right of presumptive access
to judicial records and documents. See Nixon v. Warner
Commc’ns, Inc., 435 U.S. 589, 597 (1978). This right of
access is, of course, qualified, and documents may be
sealed in some cases. We have held, however, that
“[d]ocuments to which the public has a qualified right
of access may be sealed only if ‘specific, on the record
findings are made demonstrating that closure is
essential to preserve higher values and is narrowly
tailored to serve that interest.’” United States v. Aref,
533 F.3d 72, 82 (2d Cir. 2008) (quoting Press-Enter. Co.
v. Super. Ct., 478 U.S. 1, 13–14 (1986)). Such findings
PDF Page 62
App. 4
must be made “on the record for our review,” but “may
be entered under seal, if appropriate.” Id. (internal
quotation marks omitted).
After we last heard this case, our summary order
remanded to the District Court “with instructions (i) to
rule upon the government’s [then-pending] unsealing
motion of March 17, 2011,” and “(ii) to issue a final
determination regarding whether the dissemination of
the other (non-PSR) sealed documents in John Doe’s
criminal case, particularly those that refer to Doe’s
cooperation, should be enjoined.” Roe, 428 F. App’x at
68–69.
That procedure was ultimately modified when the
Clerk’s Office in the Eastern District of New York
inadvertently unsealed the docket sheet, revealing that
Sater was “John Doe” and a cooperator. Judge Glasser
then held a series of hearings, with only the
Government and Sater’s counsel present, and went
through the entire docket to determine which
documents should be unsealed. Thereafter, he issued
two orders—one sealed, one unsealed—detailing which
documents were to be kept sealed.
Movants first object that they were not allowed to
attend these proceedings, although they were parties to
the case. See Aref, 533 F.3d at 81 (holding that “a
motion to intervene to assert the public’s First
Amendment right of access to criminal proceedings is
proper”). This argument fails. Judge Glasser’s sealed
order is persuasive in concluding that the hearings
should be closed, because the contents of the documents
on their face implicate compelling interests. We have
expressly held that judicial findings justifying sealing
may be entered under seal. See Aref, 533 F.3d at 82.
PDF Page 63
App. 5
Moreover, it appears from the docket sheet that
Movants informed the District Court of their views in
written submissions. See, e.g., E.D.N.Y. No. 12-mc-150,
dkt. 97.
Movants next challenge the District Court’s
determination that a number of documents
(approximately 25% of them) would remain under seal,
in whole or in part. Judge Glasser’s sealed order lays
out the District Court’s basis for ongoing
sealing—generally, safety of persons or property;
integrity of government investigation and law
enforcement interests; and protection of cooperator’s
anonymity.
As a general matter, “[b]road and general findings
by the trial court . . . are not sufficient to justify
closure.” Matter of New York Times Co., 828 F.2d 110,
116 (2d Cir. 1987). And any such sealing must be
narrowly tailored. See Aref, 533 F.3d at 82 (“[I]t is the
responsibility of the district court to ensure that
sealing documents to which the public has a First
Amendment right is no broader than necessary.”).
Here, the District Court laid out each document
that was to remain sealed in a series of tables and
noted for each the basis for continued sealing. Where
possible, it limited the sealing to redactions on certain
pages. We have reviewed the District Court’s sealed
order. Given the extent and gravity of Sater’s
cooperation, we conclude that these findings are
sufficient.
PDF Page 64
App. 6
CONCLUSION
We have reviewed the record and considered
plaintiffs’ remaining arguments on appeal, and find
them to be without merit. For the reasons set out
above, we AFFIRM the District Court’s March 15,
2013, May 15, 2013, and May 17, 2013, orders.
This panel shall retain jurisdiction over any further
appeals from proceedings in the District Court.
The mandate shall issue forthwith.
FOR THE COURT,
Catherine O’Hagan Wolfe, Clerk of Court
PDF Page 65
App. 7
APPENDIX B
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
12 MC 150 (ILG)
[Filed May 17, 2013]
______________________________
In the Matter of the Motion to )
Unseal Docket No. 98-1101
)
_____________________________ )
ORDER
GLASSER, United States District Judge:
On May 15, 2013, the Court received via facsimile
from The Law Office of Richard E. Lerner, P.C., a five
page letter which, in bold type, is introduced with these
centered legends:
Request for Emergency Prerogative Quo Warranto
Relief From Prior Restraint With Respect to the Order
Docketed on March 13, 2013
That This Court Show Cause By What Authority It
Believes, If It Believes, It Has Lawfully Concealed
Said Judicial Document From the Public and
Enjoined Its Dissemination by Those Who Have It
He then begins as follows: “We write in receipt of a
May 8, 2013 letter from the U.S. Supreme Court
requiring (emphasis mine) we seek clarification from
your honor with respect to the March 13, 2013 order on
docket 12-MC-150 (No. 105) which the Supreme Court
PDF Page 66
App. 8
calls “apparently” sealed. The letter triggers a
jurisdictional fifteen days therefrom to obtain
clarification. We seek emergency relief from a certain
portion of the March 13th Order insofar as it unlawfully
(ultra vires) or invalidly (unconstitutionally) bears the
legend ‘FILED UNDER SEAL.”’ The letter was not
filed on ECF because, as he announces at the outset in
bold type, that he has not done so “so the court may
confirm the entirety of its contents is public property
and must be publicly uploaded without redaction
immediately.” His letter will be docketed and thus be
made available to the public. I will not venture to
summarize the letter or comment on its accusatory
tenor, e.g., “The court’s failure to follow the law . . . ” at
p. 4; his reservation of “the right to supplement this,
and invite the media, members of the public and Mr.
Sater’s many victims to join this application, at p. 5; his
reminder to the Court, the government and Mr. Sater
of 18 U.S.C. § 1505 which, in substance, makes it
unlawful to obstruct or impede any Congressional
inquiry on investigation, p. 3 n.3. The irrelevance of his
“reservation” and “reminder” ostensibly prompted by a
letter from the Clerk of the Supreme Court resonate
with a sinister ring.
Discussion
The May 8th letter from the Clerk of the Supreme
Court regards Lerner’s “petition for rehearing in this
case” and is attached as an Exhibit to the government’s
letter in Opposition, Docket No. 119. It reads in part:
On pages 4-7 of that petition, you quote from
a March 14, 2013, order from the United States
District Court for the Eastern District of New
York. Because the first page of that order clearly
PDF Page 67
App. 9
reflects it is under seal, it would appear that the
rehearing petition cannot be filed on the public
record. If you wish to file the petition, you may
ask the lower court to unseal those portions, or
you may file a motion for leave to file the
petition under seal with a redacted copy for the
public record.
Your rehearing petition will be deemed
timely if you take the corrective action within 15
days of this letter. Rule 44.6.
It plainly does not require him to “seek clarification”
of my order of March 13th. It explicitly advises him how
to proceed. It does not characterize that Order as
“apparently” sealed. It “clearly reflects it is under seal.”
His “Request” addressed to this Court in his May 15th
submission is a misrepresentation of that letter. The
emergency relief he seeks, he candidly states, is to have
that order declared unlawful or unconstitutional and
uses the Clerk of the Court’s letter as a pretext for yet
another attack on this Court’s Orders. His “Request” is
denied.
I would also note that his request for Emergency
Quo Warranto relief is misguided. As long ago as 1820,
Chief Justice Marshall wrote that “a writ of quo
warranto could not be maintained except at the
instance of the government, and as the writ was issued
by a private individual without the authority of the
government it could not be sustained . . . . ” Wallace v.
Anderson, 18 U.S. 291, 292 (1820). See also Johnson v.
Manhattan Ry Co., et al., 289 U.S. 479, 502 (1933),
where the Court wrote “Quo Warranto is addressed to
preventing a continued exercise of authority unlawfully
asserted, not to a correction of what already has been
PDF Page 68
App. 10
done under it or to a vindication of private rights. It is
an extraordinary proceeding, prerogative in nature,
and in this instance could have been brought by the
United States, and by it only, for there is no statute
delegating to an individual the right to resort to it.”;
Allah v. Linde, 2008 WL 1699441 (W.S. Wash.) (“Under
federal law, it appears that a quo warranto proceeding
can be brought only by the United States, and not by
private individuals.”)
I confess to being confounded as to how to respond
to his request that I show cause by what authority I
assume the right to issue Orders in this case. Perhaps
Article III of the United States Constitution is a
responsive start. In addition, I would incorporate by
reference, my Orders, docketed in 12 MC 150 and
numbered, 42, 62, 104, 106, 109 and 118, in response.
I would also add a few lines written by Judge Newman
in In re Application of the Herald Company, 734 F.3d
93, 100 (2d Cir. 1984) as follows: “The trial judge must
articulate the basis for appellate review. If such
articulation would itself reveal information entitled to
remain confidential, the basis for closure may be set
forth in a sealed portion of the record.” Reliance on that
teaching was placed in docket no. 106, my Order of
March 13, 2013.
SO ORDERED.
Dated:
Brooklyn, New York
May 17, 2013
/s/
I. Leo Glasser
PDF Page 69
App. 11
APPENDIX C
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
12 MC 150 (ILG)
[Filed May 15, 2013]
______________________________
In the Matter of the Motion to )
Unseal Docket No. 98-1101
)
_____________________________ )
ORDER
GLASSER, United States District Judge:
In a letter dated March 27th, 2013, Docket No. 108,
Frederick Oberlander and intervenor Lorienton Palmer
requested the Court to docket the sealed Memorandum
and Order (M&O) of March 15, 2013, mistakenly
referenced the “March 14 Order” and for permission to
move for a reconsideration of that M&O within 14 days
thereafter pursuant to Local Rule 6.3, mistakenly
referred to as 16.3. In an Order issued the following
day, March 28, 2013, learning that the sealed M&O,
Docket No. 106, was inadvertently sealed, it was
unsealed and the requested enlargement was granted,
Docket No. 109.
In a letter dated April 11, 2013, Docket No. 110,
which the movants requested partially sealed, they
requested an additional enlargement to file their
motion for reconsideration which the Court granted,
Docket No. 112.
PDF Page 70
App. 12
Local Rule 6.3 of the United States District Courts
for the Southern and Eastern Districts of New York
captioned “Motions for Reconsideration or
Reargument,” provides in relevant part:
There shall be served with the Notice of Motion
a memorandum setting forth concisely the
matters or controlling decisions which counsel
believes the Court has overlooked. (emphasis
mine).
On April 19, 2013, a nineteen page Joint Motion for
Reconsideration was filed, Docket No. 113.1 That
submission contains not a sentence, a word or even a
syllable which smacks of a matter or controlling
decision which counsel doesn’t even purport to believe
the Court overlooked to require reconsideration of its
March 15, 2013 Memorandum and Order.
In a letter response dated April 26, 2013, Docket
No. 115, to their motion to reconsider, the government
opposed it for essentially the same reasons.
Having made reference to the relevant Local Rule
and blatantly ignored it, they manifest as well an
indifference to the certification required by Rule
11(b)(1), Fed. R. Civ. P., that their motion was not
presented “for any improper purpose.” Their “Joint
Motion to Reconsider” is a transparent pretext for
airing, yet again, arguments they have repeatedly
1
On April 22, 2013, they filed a corrected version of their joint
motion which they represented made no substantive changes but
merely fixed typographical errors and added or removed a few
words. This version is docketed as #114-2. Page references made
infra are to the pages in the corrected version.
PDF Page 71
App. 13
made and scurrilous charges they have leveled at
judges, courts, prosecutors and other lawyers. Those
include, for example, “discussion must be made of the
intellectually dishonest EDNY history of attempting to
restrain the speech of the ‘little people’ who don’t buy
info by the barrel, most infamously in the context of
Zyprexa,” at p. 5; referring to the opinion in Zyprexa,2
“we assume the court knew perfectly well what was the
law and what it was doing and made a bet that the
individuals whose civil rights it was violating wouldn’t
or couldn’t, pay to appeal. That’s intellectual
dishonesty. Or judicial hubris. Either works.” at p. 6-7,
“We assert that U.S. v Doe, the 1995 2d Circuit case
around which too many judges in this district seems to
have built a cottage industry of sealing whatever the
government or cooperator wants on the mere
‘possibility’ of a threat is unconstitutional per se.” at
p. 10; this Court “illegally hid a felony conviction” at
p. 9.
The tenor of that submission and of countless others
to which the few excerpts above give barely a hint,
magnify the failure to obey the Local Rule and require,
if not compel, that their Joint Motion be and it is,
hereby denied. Their Joint Motion also respectfully
demands (emphasis mine), that the caption to case
numbered 98 CR 1101 (ILG) be changed to read United
States v. Felix Sater, instead of v. John Doe. To that
extent only, their motion is granted. Referring to Sater
2
No citation is provided to this case nor is the “court” named. I
provide just one citation in the body of which the history of that
litigation is given as “Appendix B, History of the Zyprexa Products
Liability Litigation, Case No. 04-MD-1596.” In re Zyprexa Products
Litigation, 260 FRD 13 (E.D.N.Y. August 17, 2009) (Weinstein, J).
PDF Page 72
App. 14
as “John Doe” no longer serves any useful purpose
since his role as the defendant in this case is now a
matter of public record. The Clerk of Court is to make
the necessary change accordingly.
In a letter dated May 10th, but not filed until
May 13th, Docket No. 117, the movants “request a one
week extension of time to reply to the government’s
letter of April 26th.” The government’s letter is plainly
a mirror reflection of my denial of their motion and to
which a reply is neither wanted nor warranted. Their
request is denied.
SO ORDERED.
Dated:
Brooklyn, New York
May 15, 2013
/s/
I. Leo Glasser
PDF Page 73
App. 15
APPENDIX D
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
12 MC 150 (ILG)
[Filed March 13, 2013]
______________________________
In the Matter of the Motion to )
Unseal Docket No. 98-1101
)
_____________________________ )
ORDER
GLASSER, United States District Judge:
In an Opinion and Order dated August 27, 2012,
Dkt. No. 42, familiarity with which is assumed, the
Court granted a motion to unseal the docket sheet only
in 98 CR 1101 and directed that a hearing will be held
thereafter on October 2, 2012 to determine whether
any document sealed and filed in that case should be
unsealed. A request by the government to adjourn that
hearing until October 9, 2012 was granted. At the
hearing held that day, I stated my belief that I was
obedient to the law in having notice of that hearing
docketed and the hearing itself open to the public. I
then stated that my determination of which documents
may remain sealed and which may be unsealed can
only be made upon a review of those documents. Given
my familiarity with this case, I found a substantial
probability of prejudice to the compelling interest that
inheres those documents that can only be protected by
a review of them in a closed courtroom. I stated those
PDF Page 74
App. 16
compelling interests to be, among other things, the risk
of harm to the defendant; the integrity of government
activity sufficient to trump the public’s common law
and First Amendment right of access to the Court. See
In re Herald, 734 F.2d 93, 100 (2d Cir. 1984); United
States v. Haller, 837 F.2d 84, 88 (2d Cir. 1988). I then
declared the proceedings to be closed and the
courtroom to be vacated. Hr’g Tr. 5-6, Oct. 9, 2012.
Hearings were subsequently held in camera on that
day, i.e., October 9th, 23rd, November 16th, 2012,
January 18th and on a conference call on the 14th, 2013.
Present at those hearings were counsel for Felix Sater
(John Doe) and the United States. It was their burden
to establish that there were compelling interests that
superseded the general common law and qualified First
Amendment right of access to those documents.
At the conclusion of those hearings, the Court finds
that their burden was not carried as regards the
following docket numbered documents which are
hereby directed to be unsealed in their entirety: 1, 2, 58, 10, 11, 13-15, 17, 18-25, 29-35, 37-39, 41-49, 51- 56,
58-61, 65-67, 69-75, 77, 78, 81-86, 89-99, 101-108, 110,
111, 113, 114, 116, 117, 120, 123-126, 128-131, 133-136,
139, 140, 143-152, 155-157, 159-168, 174-184, 186-190,
193, 198, 200-201.
The Court finds that the required burden of proof
was satisfied as regards the docket numbered
documents not included in those listed above and
should remain sealed in their entirety or remain sealed
as redacted. A Memorandum and Order providing the
bases for those findings, together with the documents
at issue and the sealed transcripts of the in camera
proceedings at which those findings were made will
PDF Page 75
App. 17
remain sealed and submitted to the Court of Appeals
for review and determination.
SO ORDERED.
Dated:
Brooklyn, New York
March 12, 2013
/s/
I. Leo Glasser
PDF Page 76
App. 18
APPENDIX E
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CR-98-1101
[Dated October 23, 2009]
_________________________________
UNITED STATES OF AMERICA, )
)
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant.
)
________________________________ )
United States Courthouse
Brooklyn, New York
October 23, 2009
10:00 a.m.
TRANSCRIPT OF SENTENCING
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT SENIOR JUDGE
PDF Page 77
App. 19
APPEARANCES:
For the Plaintiff:
BENTON J. CAMPBELL, ESQ.
United States Attorney
BY: TODD KAMINSKY, ESQ.
MARSHALL MILLER, ESQ.
Assistant United States Attorneys
For the Defendant:
KELLY MOORE, ESQ.
LESLIE CALDWELL, ESQ.
Court Reporter:
FREDERICK R. GUERINO, C.S.R.
225 Cadman Plaza East
Brooklyn, New York
718-330-7687
Proceedings recorded by mechanical stenography,
transcript produced by CAT.
[p.2]
THE COURT CLERK: Criminal cause for
sentencing, docket number 98-CR-1101, United States
v. John Doe.
Counsel, please approach and state your name for
the record.
MR. KAMINSKY: For the United States, Todd
Kaminsky and Marshall Miller.
Good morning, your Honor.
THE COURT: Good morning.
PDF Page 78
App. 20
MS. CALDWELL: Your Honor, for Mr. Slater, Leslie
Caldwell and Kelly Moore.
THE COURT: Good morning.
MR. KAMINSKY: We are joined by probation officer
Michelle Espinoza.
MS. ESPINOZA: Good morning, your Honor.
THE COURT: Are you ready to proceed?
MR. KAMINSKY: Yes, Your Honor.
MS. CALDWELL: Yes, your Honor.
THE COURT: Have you reviewed the presentence
report with your client?
MS. CALDWELL: Ms. Moore will address the issues
on the presentence report.
THE COURT: You took some exception to some
aspects of the presentence report. Why don’t we dispose
of that first.
MS. MOORE: Yes, Your Honor.
[p.3]
THE COURT: I think for the most part the
probation department was in agreement with your
observations. I think we start at paragraph 110. 23
should be changed to 20.
MS. ESPINOZA: Yes, Your Honor.
THE COURT: And in paragraph 115, 37 should be
changed to 34.
MS. ESPINOZA: Correct.
PDF Page 79
App. 21
34.
THE COURT: Paragraph 117, 41 should now read
Paragraph 121, 45 should read 38.
MS. ESPINOZA: Yes, your Honor.
THE COURT: Paragraph 123 should now read 1
instead of 0; paragraph 125 becomes 2 instead of 1;
paragraph 126 becomes 38; paragraph 128 becomes 40;
130 becomes 37; and 192 should read 37 on the first
line and 262 to 327 on the second line. On paragraph
201, the range should range from 20 instead of 25.
MS. ESPINOZA: Correct, your Honor.
THE COURT: I think that was all of it.
MS. MOORE: That’s right, your Honor.
THE COURT: I take it you received a
communication that I found on my desk this morning.
MS. CALDWELL: Yes, Your Honor. We received
that yesterday.
THE COURT: You want to be heard?
MS. CALDWELL: Yes, Your Honor. I will start with
[p.4]
that, since the court raised the issue.
Mr. Slater a couple of weeks ago was out with his
wife at a restaurant and had a little too much to drink
and was driving home. Mr. Slater realized that he had
too much to drink and pulled over into a park and was
actually sitting in his car. We have the police reports,
which we could provide to the court, if you like. He was
PDF Page 80
App. 22
sitting in his car with the engine running, but parked,
thinking that if he sat for half an hour or an hour he
would be able to drive again. He was only a couple of
miles from his home. The police officer asked him to get
out of the car, which he did, and he failed the field
sobriety test. I believe he tested .9 and .829 was the
state limit. That case is pending in Nassau County. We
really don’t think that case has any bearing on this
case or should have any bearing on this case, in light of
all of the other circumstances of this case, which I
would like to address now.
THE COURT: Go ahead.
MS. CALDWELL: Unless the court has any
questions about the DWI.
THE COURT: Does the government want to
comment in it now?
MR. KAMINSKY: No, Your Honor, other than the
fact that we think this incident, while unfortunate,
does not reflect in any way the extraordinary
cooperation Mr. Slater
[p.5]
provided starting in 1998 and continuing nearly up to
the present day.
THE COURT: All right.
MS. CALDWELL: Felix Slater was really a selfmade man, as you know from the presentence report
and letters. He was an immigrant from Russia. He
worked his way to Wall Street where he was very
successful. He was a young man who was working at
several at the time name brand brokerage firms,
PDF Page 81
App. 23
including Shearson Lehman, until one unfortunate
night in 1991, at age 25, he went to a bar, had too much
to drink, and got into an altercation with another
person. The other person suffered. Mr. Slater hit that
the other person, and that impulsive act resulted in a
criminal conviction for Mr. Slater. That had a cascade
of consequences for him. He lost his Series 7 brokerage
license. As a convicted felon, he was not really able to
get legitimate work. He was in need of money. He was
married and had a young child. He foolishly connected
with some friends from his boyhood who were operating
a securities brokerage firm.
As the court will recall in the mid-‘90s there were a
lot of pump-and-dump type brokerage firms, and Mr.
Slater foolishly connected with those individuals. He
left that business in 1996 of his own accord. He has not
engaged in criminal activity since 1996.
Mr. Slater was working in Russia when in 1998 the
[p.6]
New York City Police Department happened to stumble
upon a mini storage box that contained a cash of
documents, all described in the government’s letter,
that were linked to Mr. Slater. Again, this was not an
investigation that was pending or ongoing. There were
no charges brought. This was a box of documents, to
use the government’s word, “indecipherable,” but
connected to Mr. Slater.
Mr. Slater was in Russia working as a consultant
for AT&T at the time and heard that the F.B.I. was
looking for him. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
PDF Page 82
App. 24
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Mr. Slater provided, flew to the United States to
surrender to F.B.I. he began to cooperate, pled guilty in
1998, and he’s been cooperating ever since.
[p.7]
His cooperation has included the type of cooperation
that the court often sees which is against traditional
criminals, including people who worked at the
brokerage firm where Mr. Slater worked. Again, he
surrendered in 1998. No one had yet been prosecuted
in connection with the State Street brokerage firm
where he worked. But the government was able to
prosecute more than 19 people at various levels of that
operation, ranging from the brokers, to the people who
were transferring money, xxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxf that operation ranging from the brokers to
the people His cooperation has included the type of
cooperation that the court often sees which is against
traditional criminals including people who worked at
the brokerage firm where Mr. Slater worked. Again he
surrendered in 1998. No one had yet been prosecuted
in connection with the State Street brokerage firm
where he worked. But the government was able to
prosecute more than 19 people at various levels
[p.8]
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
PDF Page 83
App. 25
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxx
in
The government describes Mr. Slater’s cooperation
[p.9]
their letter as exemplary. He has worked with several
F.B.I. agents over the years. Four of those agents are
here in court today, and I understand, if the court
permits, at least one of them will address the court.
The government also says that Mr. Slater’s
cooperation was above and beyond what could be
expected of a cooperating defendant. If it is, that’s an
understatement, but Mr. Slater is somebody who
cooperated for ten years, your Honor. He’s somebody
whose life has changed dramatically since 1996. He is
somebody who legally turned his life around. He made
a stupid mistake in a bar fight, and again that had a
ripple effect which caused him to make another stupid
mistake. But really since 1996 he has been working
legitimate jobs, cooperating since 1998 with the
government. He has a very stable and healthy family
life, and his wife, his mother, and sister are all present
in court here today with him and are very supportive of
him. He has three young school-aged daughters who
he’s very dedicated to.
This is an individual who really has turned his life
around. You have the letters from his Rabbi describing
his involvement with the community, and we really
PDF Page 84
App. 26
think, you know, I’m hesitant to use the word in the
context of a criminal sentencing, I’m hesitant to use the
word “redemption,” but I think it fits Mr. Slater. I
think he has redeemed himself. He has made many,
many amends over the
[p.10]
last 13 years -- excuse me, the last eleven years since
he’s cooperating. He’s not going to - notwithstanding
the DWI incident - he’s not going to appear before this
court or any other court again in the context of a
criminal case.
We understand that to ask for a sentence of no jail
term and no probation is extraordinary, but we think
it is warranted in this case where Mr. Slater really has
been under a sort of defacto probation for the last ten
years. As he has worked very closely with the F.B.I.
agents, the government has not seen it necessary to
impose any kind of restrictions or conditions on Mr.
Slater over the last ten years. He has been traveling
freely and does travel to Russia in connection with the
real estate business he’s involved in, and the
government has not imposed any reporting
requirement on him over those last ten years.
THE COURT: You have to slow down a little bit for
the arms of our court reporter.
MS. CALDWELL: As I always did before.
In any event, your Honor, I think Mr. Slater is
really deserving of the full measure of leniency that
this court can impose, given the extraordinary
circumstances of his cooperation and the fact he has
PDF Page 85
App. 27
really rehabilitated himself in these last -- really since
1996. Thank you.
THE COURT: Mr. Kaminsky or Mr. Miller.
MR. KAMINSKY: I will address the court first.
[p.11]
While the underlying criminal conduct involved was
serious and real, I don’t think there’s any question that
Mr. Slater has prevented far more financial fraud than
he has caused. In a moment, your Honor, if the court
permits, I would like to ask Special Agent Leo Taddeo
to address the court. He is a senior F.B.I. agent who
first worked with Mr. Slater. What he could tell you
and what he will tell you is that Mr. Slater was really
the F.B.I.’s entry into the types of financial frauds that
were being perpetrated at the time in the mid to late
‘90s the criminal financial wizards were one step ahead
of law enforcement, and literally that was until Felix
Slater cooperated with the F.B.I.
The 19 other defendants in the United States v.
Coppa case that came before your Honor is certainly
the most concrete form of that. But far and beyond
those 19 defendants, Felix Slater explained to the
F.B.I. how these schemes operated. And then there are
instances far too numerous to mention in a 5K letter,
but they would take any given investigation they were
looking into at the time, bring it in front of Felix Slater,
and he would explain to them what was going on. He
clearly illuminated and elicited information to them
which brought countless arrests and halted the fraud
at the time. That would be enough, your Honor, for us
to stand here and tell you that Felix Slater went above
and beyond, but that was only the beginning.
PDF Page 86
App. 28
[p.12]
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Time and time again all agents here, and numerous
others who couldn’t be here today, have told the
government Felix Slater was one of the best
cooperators we worked with. There was nothing he
wouldn’t do. No task was too big. He was really helpful
and was the key to open a hundred different doors that
they couldn’t open prior to that time.
[p.13]
So, your Honor, if the court permits, at this time I
would like to ask Special Agent Leo Taddeo, who from
the inception worked with Felix Slater, address the
court and tell you about that experience.
THE COURT: All right. Let him come up.
A VOICE: Good morning, your Honor.
THE COURT: Good morning.
State your name.
A VOICE: Leo Taddeo. I’m the Assistant Special
Agent in the City of Baltimore’s Field Office.
Good morning, your Honor. First I would like to
corroborate and confirm the 5K letter and statements
made by Mr. Kaminsky and add a view observations, if
I could.
PDF Page 87
App. 29
I worked with Mr. Slater from the outset of this
stock fraud investigation and he was the epitome of
professionalism in our efforts to not only uncover the
scheme, but all of the different individuals involved. He
answered every single phone call I made to him. He
answered every question honestly. He did his best to be
truthful and not exaggerate. A person in his situation
would have easily believed that he could get more favor
from the F.B.I. by making a bigger story than what was
already apparent, but he didn’t exaggerate or try to
make himself anymore important than he already was.
I also observed his interaction with his family and
[p.14]
other individuals, and I can say he’s a dedicated family
man and actually a pleasure to work with.
In terms of the effects of his cooperation, in addition
to what is in the 5K letter, I just want to add in the
mid-‘90s, the F.B.I. was facing the probability of seeing
organized crime on Wall Street, but not being able to do
much about it. And given between success and failure
for us is often an effective cooperating witness. Felix
Slater was that cooperating witness.
THE COURT: He had Frank Coppa at one point,
too.
AGENT TADDEO: Your Honor? Your Honor, he
was instrumental bringing Frank Coppa in, and as a
result of his cooperation, caused further damage to the
Bonnano family. Without his cooperation, it would have
been a few more years where the F.B.I. would have
effectively removed La Cosa Nostra from the penny
stock business. And I would easily credit Felix not only
PDF Page 88
App. 30
his efforts, but the cascading efforts of bringing other
witnesses in to basically eliminate the threat on Wall
Street.
Once again, I know he worked with other agents,
and I heard nothing but similar comments from them
about the nature of his cooperation and his personality
and professionalism, and I’m here today on his behalf.
I hope that his family can get on with their lives, and
he can go on to be prosperous and a good dad and
husband. I know he is.
[p.15]
Those are my comments, your Honor.
I’m happy to answer any questions.
THE COURT: Thank you. Mr. Miller.
MR. MILLER: Your Honor, I don’t want to try the
court’s patience by repeating what has already been
said by Ms. Caldwell, Mr. Kaminsky, and Agent
Taddeo, but I did want to underline two things. One
was Mr. Slater’s cooperation to the office and the many
investigations he participated in. The length of his
cooperation is extraordinary. And I wanted to be here
to express from the office’s perspective just how capable
a cooperator he was, how important a cooperator he
was, and how effective he was.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
So those are the two points I wanted to make.
THE COURT: All right.
PDF Page 89
App. 31
Mr. Slater, what would you like to say to me this
morning?
THE DEFENDANT: I have been writing what I am
going
[p.16]
to say for eleven years, but I don’t want to read it.
I’m not proud of what I have done. I felt I was
trapped at the time I agreed to do it. I had a bar fight,
went to jail which something I never thought I would
ever do nobody ever thought I would go to jail for a bar
fight. I had to find money for an appeal that my lawyer
was trying to file and I didn’t have a job. I had a fourmonth-old daughter at that moment, legal bills
mounting, personal bills, and a childhood acquaintance
approached me with this scheme, which I subsequently
pled guilty to in front of your Honor.
THE COURT: Is that Clarkson?
THE DEFENDANT: Yes. Prior to that I never had
any run-ins with the law. I worked with very legitimate
firms, very honest. I had one complaint in the entire
time I worked on Wall Street prior to my criminal
activity.
During the two and a half years that I was involved
in this activity, I spent a year of those in jail. I hated
myself, despised myself for doing the things I was
doing while I was doing them, because my parents did
not sacrifice what they sacrificed to have me come to
this country and become a criminal. The acts that I
committed were despicable. They just weren’t financial
fraud. I took ability and opportunity and flushed them
PDF Page 90
App. 32
down the toilet. The bar fight and the acts that I took
afterwards are not a
[p.17]
justification. I’m just merely trying to explain the
circumstances under which I engaged in that activity,
what was happening to me at the time.
I quit of my own accord, approximately two years
before the government asked me, until I found out that
there was a case getting started or investigation. I quit.
I did not want to be involved in criminal activity. I
went to Russia to work in telecommunications to get
away from what I was involved with here.
Xxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
But more importantly because why I have continued all
of these years, why I was asked many times by various
agents, by various prosecutors, is it time yet to get
sentenced? I said no, I’m willing to continue working.
I did it because I want some redemption. Yes, I am a
criminal.
Yes, I am guilty of the things that I have done. The
worse thing that could happen, your Honor, despite
whatever sentence you impose upon me, I went into
real estate development and I built a very successful
real estate company right up the block, a Trump
project, built the whole thing. Years ago they wrote an
article in the newspaper, “executive with ties to Donald
Trump has a criminal past” the next month I had to
leave my company, the company that I built
[p.18]
with my own two hands, otherwise the banks would
have said there’s a criminal involved. I had to get out.
PDF Page 91
App. 33
At that moment I thought my life was over. Here I am
trying to rehabilitate myself and keep getting the rug
pulled out from under me. I thought that was the case
until a week later my daughter came home and said
the kids at school said my Dad is a terrorist.
I guess the worst thing that is going to happen and
is happening is the blight I put on my children, and I
will now in the past and in the future try to do good
deeds, try to be a positive member for my family and
for my community to in some way hopefully balance out
the mountain of garbage I heaped on my own life.
In closing, your Honor, I’m guilty of the things I
have done and I stand before you with no justification,
and I’m ready to accept any punishment you feel is
deserving for me to fulfill anything that I have done.
THE COURT: I frequently hear a phrase that Ms.
Caldwell used, literally hundreds of persons who stand
before me that do use, “I made a terrible mistake.” The
word “mistake” always intrigues me. Given what you
have done over the past eleven years raises a question
as how is it possible, given the character that you
exemplified those eleven years, how is it possible that
you became involved in an enterprise, which is what
the RICO prosecution was all
[p.19]
about, calculated a massive series of securities frauds,
which were conceived by a cadre of callous, corrupt
venisons of the security industry, who also enlisted the
assistance of the likes of Garafalo and Cochlin (ph), the
Persico and the Colombo families, and I have asked
myself countless times how has that happening? And I
have been able to answer that question by assuming
PDF Page 92
App. 34
and believing that most of us have a little voice inside
us which speaks to us when we think of or about to do
something wrong. It says to us, don’t do it, it is wrong.
And there were times that I have come to know that
there are some persons who don’t have that little voice.
They never hear it, never listen to it. And there are
some who do. I guess you exemplify that category; you
heard that voice. You weren’t listening to it at the time
when Clarkson invited you to join them.
I’m required, although it is an oxymoron, to consider
the guidelines which are unconstitutional, but I’m to be
guided by them, and if I do disregard them drastically,
an appellate court will tell me I did something
unreasonable, although semantically I never
understood why if a judge has discretion, how could it
be abused by definition. He has the privilege of doing
whatever he believes to be right.
One of the greater judges of our country, Judge
Friendly, attempted to resolute that years ago and
concluded when the Court of Appeals says a district
court judge abuses
[p.20]
discretion, all they are saying is we disagree with him.
That becomes relevant in connection with your
sentence because I’m obliged to consider the nature and
circumstances of the offense and the seriousness of the
offense. The seriousness of offenses I guess for most
people who automatically define offenses which inflict
serious physical harm, murder, rape, burglary, assault,
but the offense with which you were involved was also
extremely serious because one can’t measure how
many, literally hundreds of persons, bought Fun Time,
PDF Page 93
App. 35
Hydrock, Holly, United States Bridge, worthless stock,
lost money which they have set aside for retirement.
Lost money which they set aside for their children’s
education. And the harm with which that kind of crime,
characterized as white collar crime, is in many respects
far more serious than the floating infliction of a serious
act. So I’m obliged to consider the seriousness of the
offense.
I’m obliged to consider the sentence achieving
promotion and respect for the law. It is a rather curious
factor for the court to consider, promote respect for the
law. What does that mean? Obviously it doesn’t mean
that I can administer a credible injection into your
head and instantaneously instill respect for the law.
What it means is to convey an understanding - which
at this point I believe is irrelevant for me to covey convey an understanding that
[p.21]
when the law makes certain conduct illegal, it means
it. That’s what promoting respect for the law means,
believe what the law means when it says securities
fraud is a crime. Don’t do it. And the arm of the law is
pretty long. It eventually will catch up to you.
The most difficult task of that statute, 3553(a),
which the court is obliged to consider imposing just
punishment, and there is no mathematical, scientific,
or any other guide to determine what just punishment
is, I sometimes like to think of a question that
somebody said was asked about God. Somebody asked
whether God prays. And the response was, that’s a
remarkable silly question, God prays? What would God
pray for? And the answer was that God prays that his
PDF Page 94
App. 36
sense of mercy will overcome his desire for justice, and
naturally would be factored into what is just
punishment in your case.
What is interesting and difficult about your case,
literally hundreds of cases like it, judges tend to
become cynical and mindful. So with cooperators. We
understand in most instances there’s a very quick cost
benefit analysis which is made. A person is
apprehended for having committed a crime, and rather
quickly decides that perhaps the best way to minimize
my sentence is to begin to cooperate. And the other
troublesome and interesting aspect of this phase of
sentencing in this case is the more sophisticated and
[p.22]
knowledgeable the criminal, the more valuable is his
cooperation, and the more benefit he can obtain, and
offset the punishment which might otherwise have
been imposed. We see that all of the time, low-level
drug dealers, couriers, have no information they can
give to the government which would provide any
assistance, so they suffer the sentence which the law
requires. A person who was higher-up on the ladder,
drug trade or a securities fraud has a lot of knowledge
and information to convey to the government, is
obviously in a much better position.
So really getting down to the crux of this, to what
extent should your very valuable cooperation offset the
guideline sentence, which statutorily for RICO is 20
years, and for guideline, 262 to 300-some-odd-months,
to what extent does your cooperation offset that
enormous amount of time? I don’t think anybody truly
suspects that a sentence of 20 years or 262 months
PDF Page 95
App. 37
would be imposed, except the newspapers like to trump
the numbers, facing a jail term of 120 years and so on.
But there’s another factor which I regard as quite
relevant, in a very real sense, I think and you said it.
You have be writing your little allocution to me for
eleven years. I’ve often wondered why it takes the
government eleven years or twelve years to bring a
cooperator in for sentencing. In your case they were
aware of your assistance,
[p.23]
the quality and extent of it. They didn’t have to wait to
call upon you to testify, have your sentence first, and
thought maybe you would refuse to testify in a case
thereafter because you had already been sentenced.
For eleven years I would suspect you had gone to
bed every night or every other night sleeping a little
restlessly and wondering what your sentence is going
to be. Then when the day of punishment comes, what
will be my fate? For a period of eleven years, and its
true of cooperating generally, there is a kind of
psychological imprisonment and burden which they
carry over that long period of time. Their life is not
quite the same. They don’t have that same carefree
double mint care sense of life because they are worried
about when will that end. So in effect there has been a
sentence which already has been imposed.
It’s interesting in thinking about what I would do
this morning, I will use the word “redemption.” That in
a sense the remarkable assistance you have given to
them, which they told me about in a letter, Agent
Taddeo just elaborated on, in effect manifested a desire
in you, the harm you caused a lot of harmless people
PDF Page 96
App. 38
who were thwarted by the likes of you and Aleks Paul
and Clarkson, Salamon, the whole group of thieves,
that’s essentially what they were. And the extent of
your cooperation overall of those years clearly
manifests that you have a very sincere and deep
respect for the law, at
[p.24]
least to this essence would suggest would be an
appropriate inference.
I’m not going to impose a term of incarceration, and
I’m not going to impose a sentence, but the statute, it
is interesting, the RICO statute provides that the
penalty shall be a fine or imprisonment. It doesn’t say
probation and it doesn’t make imprisonment
mandatory. It could be a fine or imprisonment. I have
a duty not only to you, Mr. Slater, to see that justice is
done to you, I have that obligation, and I also have an
obligation to the community which has in a sense put
you here, and some form of punishment, although it
comes very late, I think it is appropriate in the
discharge of my duty to put someone on some degree of
punishment, and I’m going to impose a fine of $25,000.
I’ve listened to and looked at the factors one should
consider in imposing the fine. They all clearly justify a
fine in that sum, which given the enormity of what you
did, although many years ago, I think is appropriate.
I think there’s only one count in the indictment.
MS. CALDWELL: That’s correct, your Honor. It was
a one count information.
THE COURT: According to the statute, the fine
should be paid immediately to the clerk of the court. If
PDF Page 97
App. 39
for some reason during the time it would be
inappropriate and an application is made to that, I will
consider it.
[p.25]
I think I’m also obliged to advise you that you have
a right to appeal the sentence. If you cannot afford to
pay the cost of that appeal, you can make an
application to have the cost waived.
I think there’s a forfeiture charge which was agreed
upon.
MS. CALDWELL: Your Honor, Mr. Slater forfeited
a house in the Hamptons as part of his cooperation
agreement.
THE COURT: In Hampton Bays?
MR. CALDWELL: Yes.
THE COURT: I think it was provided for the
cooperation.
I don’t think there’s anything else for me to do in
connection to this proceeding.
MS. CALDWELL: No. Thank you, your Honor.
MR. KAMINSKY: No, Your Honor.
THE COURT: I wish you well next time you go to
dinner with your wife drink more miserly, modestly.
I think these proceedings are concluded.
PDF Page 98
App. 40
APPENDIX F
U.S. District Court
Southern District of New York (Foley Square)
CRIMINAL DOCKET FOR CASE #:
1:94-cr-00248-CSH-1
Case title: USA v. Shereshevsky
Date Filed: 05/05/1994
Date Terminated: 06/18/2002
Pending Counts
18:371 BANK FRAUD
(1)
Disposition
Imprisonment: Time served. Defendant advised of his
right to appeal. Supervised release: 24 months. Special
assessment: $50, due in full immediately.
Date Filed
#
Docket Text
05/05/1994
1
WAIVER OF INDICTMENT
by Joseph Shereshevsky
(rag) (Entered: 05/06/1994)
05/05/1994
2
INFORMATION as to
Joseph Shereshevsky (1)
count(s) 1 (rag) (Entered:
05/06/1994)
***
PDF Page 99
App. 41
05/05/1994
PLEA entered by Joseph
Shereshevsky . Court
accepts plea. Not Guilty:
Joseph Shereshevsky (1)
count(s) 1 (rag) (Entered:
05/06/1994)
***
05/05/1994
PLEA entered by Joseph
Shereshevsky. Court accepts
plea. Guilty: Joseph
Shereshevsky (1) count(s) 1 .
(Plea filed under seal). (ph)
(Entered: 06/26/2002)
***
PDF Page 100
App. 42
09/24/2001
ORDER EXCLUDING
TIME UNDER THE
SPEEDY TRIAL ACT as to
Joseph Shereshevsky ...that
the request for a 30-day
exclusion from today,
September 17, 2001, purs. to
Title 18 U.S.C. Sec.
3161(h) (8) (A) is hereby
granted for all criminal
cases in which an
indictment or information
has been filed and is
pending,..., Continuing due
to Extraordinary
circumstances time is
excluded from 9/17/01 to
10/17/01 ( Signed by Chief
Judge Michael B.
Mukasey ); [Original filed in
M10-468 Document No. 22]
(ICMSUSER)
(Entered: 10/01/2001)
6/18/2002
Sentencing held Joseph
Shereshevsky (1) count(s) 1.
(ph) (Entered: 06/26/2002)
***
PDF Page 101
App. 43
APPENDIX G
Constitutional, Statutory and
Regulatory Provisions
The United States Constitution
Article III
Section 1
The judicial Power of the United States, shall be vested
in one supreme Court, and in such inferior Courts as
the Congress may from time to time ordain and
establish. The Judges, both of the supreme and inferior
Courts, shall hold their Offices during good Behavior,
and shall, at stated Times, receive for their Services a
Compensation which shall not be diminished during
their Continuance in Office.
Section 2, Paragraph 1
The judicial Power shall extend to all Cases, in Law
and Equity, arising under this Constitution, the Laws
of the United States, and Treaties made, or which shall
be made, under their Authority;—to all Cases affecting
Ambassadors, other public Ministers and Consuls;—to
all Cases of admiralty and maritime Jurisdiction;—to
Controversies to which the United States shall be a
Party;—to Controversies between two or more
States;—between a State and Citizens of another
State;—between Citizens of different States;—between
Citizens of the same State claiming Lands under
Grants of different States, and between a State, or the
PDF Page 102
App. 44
Citizens thereof, and foreign States, Citizens or
Subjects.
***
Amendment I
Congress shall make no law respecting an
establishment of religion, or prohibiting the free
exercise thereof; or abridging the freedom of speech, or
of the press; or the right of the people peaceably to
assemble, and to petition the Government for a redress
of grievances.
***
Amendment VI
In all criminal prosecutions, the accused shall enjoy the
right to a speedy and public trial, by an impartial jury
of the State and district wherein the crime shall have
been committed, which district shall have been
previously ascertained by law, and to be informed of
the nature and cause of the accusation; to be confronted
with the witnesses against him; to have compulsory
process for obtaining witnesses in his favor, and to
have the Assistance of Counsel for his defence.
Theft or Alteration of Record or Process; False
Bail (18 USC § 1506)
Whoever feloniously steals, takes away, alters, falsifies,
or otherwise avoids any record, writ, process, or other
proceeding, in any court of the United States, whereby
any judgment is reversed, made void, or does not take
effect; or
PDF Page 103
App. 45
Whoever acknowledges, or procures to be acknowledged
in any such court, any recognizance, bail, or judgment,
in the name of any other person not privy or consenting
to the same—
Shall be fined under this title or imprisoned not more
than five years, or both.
Imposition of a Sentence (18 USC § 3553 (c))
(c) Statement of Reasons for Imposing a
Sentence.— The court, at the time of sentencing, shall
state in open court the reasons for its imposition of the
particular sentence, and, if the sentence—
(1) is of the kind, and within the range, described in
subsection (a)(4), and that range exceeds 24 months,
the reason for imposing a sentence at a particular
point within the range; or
(2) is not of the kind, or is outside the range,
described in subsection (a)(4), the specific reason for
the imposition of a sentence different from that
described, which reasons must also be stated with
specificity in a statement of reasons form issued
under section 994 (w)(1)(B) of title 28, except to the
extent that the court relies upon statements
received in camera in accordance with Federal Rule
of Criminal Procedure 32. In the event that the
court relies upon statements received in camera in
accordance with Federal Rule of Criminal Procedure
32 the court shall state that such statements were
so received and that it relied upon the content of
such statements.
If the court does not order restitution, or orders only
partial restitution, the court shall include in the
PDF Page 104
App. 46
statement the reason therefor. The court shall provide
a transcription or other appropriate public record of the
court’s statement of reasons, together with the order of
judgment and commitment, to the Probation System
and to the Sentencing Commission,, [3] and, if the
sentence includes a term of imprisonment, to the
Bureau of Prisons.
Order of Restitution (18 USC § 3663)
(a)
(1)
(A) The court, when sentencing a defendant
convicted of an offense under this title, section
401, 408(a), 409, 416, 420, or 422(a) of the
Controlled Substances Act (21 U.S.C. 841,
848 (a), 849, 856, 861, 863) (but in no case shall
a participant in an offense under such sections
be considered a victim of such offense under this
section), or section 5124, 46312, 46502, or 46504
of title 49, other than an offense described in
section 3663A (c), may order, in addition to or, in
the case of a misdemeanor, in lieu of any other
penalty authorized by law, that the defendant
make restitution to any victim of such offense, or
if the victim is deceased, to the victim’s estate.
The court may also order, if agreed to by the
parties in a plea agreement, restitution to
persons other than the victim of the offense.
***
(3) The court may also order restitution in any
criminal case to the extent agreed to by the
parties in a plea agreement.
PDF Page 105
App. 47
Mandatory Restitution to Victims of Certain
Crimes (18 USC § 3663A)
(a)
(1) Notwithstanding any other provision of law,
when sentencing a defendant convicted of an offense
described in subsection (c), the court shall order, in
addition to, or in the case of a misdemeanor, in
addition to or in lieu of, any other penalty
authorized by law, that the defendant make
restitution to the victim of the offense or, if the
victim is deceased, to the victim’s estate.
***
(c)
(1) Notwithstanding any other provision of law (but
subject to the provisions of subsections
(a)(1)(B)(i)(II) and (ii), [1] when sentencing a
defendant convicted of an offense described in
section 401, 408(a), 409, 416, 420, or 422(a) of the
Controlled Substances Act (21 U.S.C. 841, 848 (a),
849, 856, 861, 863), in which there is no identifiable
victim, the court may order that the defendant
make restitution in accordance with this subsection.
(A) that is—
(i) a crime of violence, as defined in section 16;
(ii) an offense against property under this title, or
under section 416(a) of the Controlled Substances Act
(21 U.S.C. 856 (a)), including any offense committed by
fraud or deceit; or
PDF Page 106
App. 48
(iii) an offense described in section 1365 (relating to
tampering with consumer products); and
(B) in which an identifiable victim or victims has
suffered a physical injury or pecuniary loss.
(3) This section shall not apply in the case of an offense
described in paragraph (1)(A)(ii) if the court finds, from
facts on the record, that—
(A) the number of identifiable victims is so large as to
make restitution impracticable; or
(B) determining complex issues of fact related to the
cause or amount of the victim’s losses would complicate
or prolong the sentencing process to a degree that the
need to provide restitution to any victim is outweighed
by the burden on the sentencing process.
Procedure for Issuance and Enforcement of
Order of Restitution (18 USC § 3664)
(a) For orders of restitution under this title, the court
shall order the probation officer to obtain and include
in its presentence report, or in a separate report, as the
court may direct, information sufficient for the court to
exercise its discretion in fashioning a restitution order.
The report shall include, to the extent practicable, a
complete accounting of the losses to each victim, any
restitution owed pursuant to a plea agreement, and
information relating to the economic circumstances of
each defendant. If the number or identity of victims
cannot be reasonably ascertained, or other
circumstances exist that make this requirement clearly
impracticable, the probation officer shall so inform the
court.
PDF Page 107
App. 49
***
(d)
(1) Upon the request of the probation officer, but not
later than 60 days prior to the date initially set for
sentencing, the attorney for the Government, after
consulting, to the extent practicable, with all
identified victims, shall promptly provide the
probation officer with a listing of the amounts
subject to restitution.
(2) The probation officer shall, prior to submitting
the presentence report under subsection (a), to the
extent practicable—
(A) provide notice to all identified victims of—
(i) the offense or offenses of which the
defendant was convicted;
(ii) the amounts subject to restitution
submitted to the probation officer;
(iii) the opportunity of the victim to submit
information to the probation officer
concerning the amount of the victim’s losses;
(iv) the scheduled date, time, and place of the
sentencing hearing;
(v) the availability of a lien in favor of the
victim pursuant to subsection (m)(1)(B); and
(vi) the opportunity of the victim to file with
the probation officer a separate affidavit
relating to the amount of the victim’s losses
subject to restitution; and
PDF Page 108
App. 50
(B) provide the victim with an affidavit form to
submit pursuant to subparagraph (A)(vi).
(3) Each defendant shall prepare and file with the
probation officer an affidavit fully describing the
financial resources of the defendant, including a
complete listing of all assets owned or controlled by
the defendant as of the date on which the defendant
was arrested, the financial needs and earning
ability of the defendant and the defendant’s
dependents, and such other information that the
court requires relating to such other factors as the
court deems appropriate.
***
(5) If the victim’s losses are not ascertainable by the
date that is 10 days prior to sentencing, the
attorney for the Government or the probation officer
shall so inform the court, and the court shall set a
date for the final determination of the victim’s
losses, not to exceed 90 days after sentencing. If the
victim subsequently discovers further losses, the
victim shall have 60 days after discovery of those
losses in which to petition the court for an amended
restitution order. Such order may be granted only
upon a showing of good cause for the failure to
include such losses in the initial claim for
restitutionary relief.
***
PDF Page 109
App. 51
(f)
(1)
(A) In each order of restitution, the court shall
order restitution to each victim in the full
amount of each victim’s losses as determined by
the court and without consideration of the
economic circumstances of the defendant.
***
(2) Upon determination of the amount of restitution
owed to each victim, the court shall, pursuant to
section 3572, specify in the restitution order the
manner in which, and the schedule according to
which, the restitution is to be paid, in consideration
of—
(A) the financial resources and other assets of
the defendant, including whether any of these
assets are jointly controlled;
(B) projected earnings and other income of the
defendant; and
(C) any financial obligations of the defendant;
including obligations to dependents.
***
(h) If the court finds that more than 1 defendant has
contributed to the loss of a victim, the court may make
each defendant liable for payment of the full amount of
restitution or may apportion liability among the
defendants to reflect the level of contribution to the
victim’s loss and economic circumstances of each
defendant.
PDF Page 110
App. 52
***
(j)
(1) If a victim has received compensation from
insurance or any other source with respect to a loss,
the court shall order that restitution be paid to the
person who provided or is obligated to provide the
compensation, but the restitution order shall
provide that all restitution of victims required by
the order be paid to the victims before any
restitution is paid to such a provider of
compensation.
***
(k) A restitution order shall provide that the defendant
shall notify the court and the Attorney General of any
material change in the defendant’s economic
circumstances that might affect the defendant’s ability
to pay restitution. The court may also accept
notification of a material change in the defendant’s
economic circumstances from the United States or from
the victim. The Attorney General shall certify to the
court that the victim or victims owed restitution by the
defendant have been notified of the change in
circumstances. Upon receipt of the notification, the
court may, on its own motion, or the motion of any
party, including the victim, adjust the payment
schedule, or require immediate payment in full, as the
interests of justice require.
(l) A conviction of a defendant for an offense involving
the act giving rise to an order of restitution shall estop
the defendant from denying the essential allegations of
that offense in any subsequent Federal civil proceeding
PDF Page 111
App. 53
or State civil proceeding, to the extent consistent with
State law, brought by the victim.
(m)
(1)
(A)
(i) An order of restitution may be enforced by
the United States in the manner provided for
in subchapter C of chapter 227 and
subchapter B of chapter 229 of this title; or
(ii) by all other available and reasonable
means.
(B) At the request of a victim named in a
restitution order, the clerk of the court shall
issue an abstract of judgment certifying that a
judgment has been entered in favor of such
victim in the amount specified in the restitution
order. Upon registering, recording, docketing, or
indexing such abstract in accordance with the
rules and requirements relating to judgments of
the court of the State where the district court is
located, the abstract of judgment shall be a lien
on the property of the defendant located in such
State in the same manner and to the same
extent and under the same conditions as a
judgment of a court of general jurisdiction in
that State.
(2) An order of in-kind restitution in the form of
services shall be enforced by the probation officer.
(n) If a person obligated to provide restitution, or pay
a fine, receives substantial resources from any source,
PDF Page 112
App. 54
including inheritance, settlement, or other judgment,
during a period of incarceration, such person shall be
required to apply the value of such resources to any
restitution or fine still owed.
(o) A sentence that imposes an order of restitution is a
final judgment notwithstanding the fact that—
The Crime Victims’ Rights Act (18 USC § 3771)
(a) Rights of Crime Victims.— A crime victim has
the following rights:
(1) The right to be reasonably protected from the
accused.
(2) The right to reasonable, accurate, and timely
notice of any public court proceeding, or any parole
proceeding, involving the crime or of any release or
escape of the accused.
(3) The right not to be excluded from any such
public court proceeding, unless the court, after
receiving clear and convincing evidence, determines
that testimony by the victim would be materially
altered if the victim heard other testimony at that
proceeding.
(4) The right to be reasonably heard at any public
proceeding in the district court involving release,
plea, sentencing, or any parole proceeding.
(5) The reasonable right to confer with the attorney
for the Government in the case.
(6) The right to full and timely restitution as
provided in law.
PDF Page 113
App. 55
(7) The right to proceedings free from unreasonable
delay.
(8) The right to be treated with fairness and with
respect for the victim’s dignity and privacy.
(b) Rights Afforded.—
(1) In general.— In any court proceeding involving
an offense against a crime victim, the court shall
ensure that the crime victim is afforded the rights
described in subsection (a). Before making a
determination described in subsection (a)(3), the
court shall make every effort to permit the fullest
attendance possible by the victim and shall consider
reasonable alternatives to the exclusion of the
victim from the criminal proceeding. The reasons
for any decision denying relief under this chapter
shall be clearly stated on the record.
***
(c) Best Efforts To Accord Rights.—
(1) Government.— Officers and employees of the
Department of Justice and other departments and
agencies of the United States engaged in the
detection, investigation, or prosecution of crime
shall make their best efforts to see that crime
victims are notified of, and accorded, the rights
described in subsection (a).
(2) Advice of attorney.— The prosecutor shall
advise the crime victim that the crime victim can
seek the advice of an attorney with respect to the
rights described in subsection (a).
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App. 56
(3) Notice.— Notice of release otherwise required
pursuant to this chapter shall not be given if such
notice may endanger the safety of any person.
(d) Enforcement and Limitations.—
(1) Rights.— The crime victim or the crime victim’s
lawful representative, and the attorney for the
Government may assert the rights described in
subsection (a). A person accused of the crime may
not obtain any form of relief under this chapter.
(2) Multiple crime victims.— In a case where the
court finds that the number of crime victims makes
it impracticable to accord all of the crime victims
the rights described in subsection (a), the court
shall fashion a reasonable procedure to give effect to
this chapter that does not unduly complicate or
prolong the proceedings.
(3) Motion for relief and writ of mandamus.—
The rights described in subsection (a) shall be
asserted in the district court in which a defendant
is being prosecuted for the crime or, if no
prosecution is underway, in the district court in the
district in which the crime occurred. The district
court shall take up and decide any motion asserting
a victim’s right forthwith. If the district court denies
the relief sought, the movant may petition the court
of appeals for a writ of mandamus. The court of
appeals may issue the writ on the order of a single
judge pursuant to circuit rule or the Federal Rules
of Appellate Procedure. The court of appeals shall
take up and decide such application forthwith
within 72 hours after the petition has been filed. In
no event shall proceedings be stayed or subject to a
PDF Page 115
App. 57
continuance of more than five days for purposes of
enforcing this chapter. If the court of appeals denies
the relief sought, the reasons for the denial shall be
clearly stated on the record in a written opinion.
(4) Error.— In any appeal in a criminal case, the
Government may assert as error the district court’s
denial of any crime victim’s right in the proceeding
to which the appeal relates.
(5) Limitation on relief.— In no case shall a
failure to afford a right under this chapter provide
grounds for a new trial. A victim may make a
motion to re-open a plea or sentence only if—
(A) the victim has asserted the right to be heard
before or during the proceeding at issue and
such right was denied;
(B) the victim petitions the court of appeals for
a writ of mandamus within 14 days; and
(C) in the case of a plea, the accused has not
pled to the highest offense charged.
This paragraph does not affect the victim’s right
to restitution as provided in title 18, United
States Code.
***
Pleas (Federal Rule of Criminal Procedure 11(b))
(b) Considering and Accepting a Guilty or Nolo
Contendere Plea.
(1) Advising and Questioning the Defendant. Before
the court accepts a plea of guilty or nolo contendere,
the defendant may be placed under oath, and the
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App. 58
court must address the defendant personally in
open court....
Sentencing and Judgment (Federal Rule of
Criminal Procedure 32)
I. Rule 32. Sentencing and Judgment
***
(c) Presentence Investigation.
(1) Required Investigation.
(A) In General. The probation officer must
conduct a presentence investigation and submit
a report to the court before it imposes sentence
unless:
(i) 18 U.S.C. §3593 (c) or another statute
requires otherwise; or
(ii) the court finds that the information in the
record enables it to meaningfully exercise its
sentencing authority under 18 U.S.C. §3553,
and the court explains its finding on the
record.
(B) Restitution. If the law permits restitution,
the probation officer must conduct an
investigation and submit a report that contains
sufficient information for the court to order
restitution.
***
(2) Interviewing the Defendant. The probation
officer who interviews a defendant as part of a
presentence investigation must, on request, give the
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App. 59
defendant’s attorney notice and a reasonable
opportunity to attend the interview.
(d) Presentence Report.
***
(2) Additional Information. The presentence
report must also contain the following:
***
(B) information that assesses any financial,
social, psychological, and medical impact on any
victim;
***
(D) when the law provides for restitution,
information sufficient for a restitution order;
(e) Disclosing the Report and Recommendation.
(1) Time to Disclose. Unless the defendant has
consented in writing, the probation officer must not
submit a presentence report to the court or disclose
its contents to anyone until the defendant has
pleaded guilty or nolo contendere, or has been found
guilty.
Injunctions and Restraining Orders (Federal
Rule of Civil Procedure 65(d))
Contents and Scope of Every Injunction and
Restraining Order.
(1) Contents. Every order granting an injunction
and every restraining order must:
(A) state the reasons why it issued;
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App. 60
(B) state its terms specifically; and
(C) describe in reasonable detail—and not by
referring to the complaint or other
document—the act or acts restrained or
required.
(2) Persons Bound. The order binds only the
following who receive actual notice of it by personal
service or otherwise:
(A) the parties;
(B) the parties’ officers, agents, servants,
employees, and attorneys; and
(C) other persons who are in active concert or
participation with anyone described in Rule
65(d)(2)(A) or (B).
Procedures to Promote Compliance with Crime
Victims’ Rights Obligations (28 CFR 45.10)
(a) Definitions. The following definitions shall apply
with respect to this section, which implements the
provisions of the Justice for All Act that relate to
protection of the rights of crime victims. See 18 U.S.C.
3771.
Crime victim means a person directly and
proximately harmed as a result of the commission of a
Federal offense or an offense in the District of
Columbia. In the case of a crime victim who is under 18
years of age, incompetent, incapacitated, or deceased,
the legal guardians of the crime victim or the
representatives of the crime victim’s estate, family
members, or any other persons appointed as suitable
by the court, may assume the crime victim’s rights, but
PDF Page 119
App. 61
in no event shall the defendant be named as such
guardian or representative.
Crime victims’ rights means those rights provided in
18 U.S.C. 3771.
Employee of the Department of Justice means an
attorney, investigator, law enforcement officer, or other
personnel employed by any division or office of the
Department of Justice whose regular course of duties
includes direct interaction with crime victims, not
including a contractor.
Office of the Department of Justice means a
component of the Department of Justice whose
employees directly interact with crime victims in the
regular course of their duties.
(b) The Attorney General shall designate an official
within the Executive Office for United States Attorneys
(EOUSA) to receive and investigate complaints alleging
the failure of Department of Justice employees to
provide rights to crime victims under 18 U.S.C. 3771.
The official shall be called the Department of Justice
Victims’ Rights Ombudsman (VRO). The VRO shall
then designate, in consultation with each office of the
Department of Justice, an official in each office to serve
as the initial point of contact (POC) for complainants.
***
(e) Disciplinary procedures.
(1) If, based on the investigation, the VRO
determines that a Department of Justice employee
has wantonly or willfully failed to provide the
complainant with a right listed in 18 U.S.C. 3771,
PDF Page 120
App. 62
the VRO shall recommend, in conformity with laws
and regulations regarding employee discipline, a
range of disciplinary sanctions to the head of the
office of the Department of Justice in which the
employee is located, or to the official who has been
designated by Department of Justice regulations
and procedures to take action on disciplinary
matters for that office. The head of that office of the
Department of Justice, or the other official
designated by Department of Justice regulations
and procedures to take action on disciplinary
matters for that office, shall be the final decisionmaker regarding the disciplinary sanction to be
imposed, in accordance with applicable laws and
regulations.
(2) Disciplinary sanctions available under
paragraph (e)(1) of this section include all sanctions
provided under the Department of Justice Human
Resources Order, 1200.1.
Policy With Regard To
Proceedings (28 CFR § 50.9).
Open
Judicial
Because of the vital public interest in open judicial
proceedings, the Government has a general overriding
affirmative duty to oppose their closure. There is,
moreover, a strong presumption against closing
proceedings or portions thereof, and the Department of
Justice foresees very few cases in which closure would
be warranted. The Government should take a position
on any motion to close a judicial proceeding, and should
ordinarily oppose closure; it should move for or consent
to closed proceedings only when closure is plainly
essential to the interests of justice. In furtherance of
the Department’s concern for the right of the public to
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App. 63
attend judicial proceedings and the Department’s
obligation to the fair administration of justice, the
following guidelines shall be adhered to by all
attorneys for the United States.
(a) These guidelines apply to all federal trials, pre- and
post-trial evidentiary proceedings, arraignments, bond
hearings, plea proceedings, sentencing proceedings, or
portions thereof, except as indicated in paragraph (e) of
this section.
(b) A Government attorney has a compelling duty to
protect the societal interest in open proceedings.
(c) A Government attorney shall not move for or
consent to closure of a proceeding covered by these
guidelines unless:
(1) No reasonable alternative exists for protecting
the interests at stake;
(2) Closure is clearly likely to prevent the harm
sought to be avoided;
(3) The degree of closure is minimized to the
greatest extent possible;
(4) The public is given adequate notice of the
proposed closure; and, in addition, the motion for
closure is made on the record, except where the
disclosure of the details of the motion papers would
clearly defeat the reason for closure specified under
paragraph (c)(6) of this section;
(5) Transcripts of the closed proceedings will be
unsealed as soon as the interests requiring closure
no longer obtain; and
PDF Page 122
App. 64
(6) Failure to close the proceedings will produce;
(i) A substantial likelihood of denial of the right
of any person to a fair trial; or
(ii) A substantial likelihood of imminent danger
to the safety of parties, witnesses, or other
persons; or
(iii) A substantial likelihood that ongoing
investigations will be seriously jeopardized.
(d) A government attorney shall not move for or
consent to the closure of any proceeding, civil or
criminal, except with the express authorization of:
(1) The Deputy Attorney General, or,
(2) The Associate Attorney General, if the Division
seeking authorization is under the supervision of
the Associate Attorney General.
(e) These guidelines do not apply to:
(1) The closure of part of a judicial proceeding where
necessary to protect national security information
or classified documents; or
(2) In camera inspection, consideration or sealing of
documents, including documents provided to the
Government under a promise of confidentiality,
where permitted by statute, rule of evidence or
privilege; or
(3) Grand jury proceedings or proceedings ancillary
thereto; or
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App. 65
(4) Conferences traditionally held at the bench or in
chambers during the course of an open proceeding;
or
(5) The closure of judicial proceedings pursuant to
18 U.S.C. 3509 (d) and (e) for the protection of child
victims or child witnesses.
(f) Because of the vital public interest in open judicial
proceedings, the records of any proceeding closed
pursuant to this section, and still sealed 60 days after
termination of the proceeding, shall be reviewed to
determine if the reasons for closure are still applicable.
If they are not, an appropriate motion will be made to
have the records unsealed. If the reasons for closure
are still applicable after 60 days, this review is to be
repeated every 60 days until such time as the records
are unsealed. Compliance with this section will be
monitored by the Criminal Division.
(g) The principles set forth in this section are intended
to provide guidance to attorneys for the Government
and are not intended to create or recognize any legally
enforceable right in any person.
PDF Page 124
App. 66
APPENDIX H
JEFFREY LICHTMAN
ATTORNEY AT LAW
[Letterhead]
October 10, 2000
BY TELEFAX: (718) 254-6180
Eric O. Corngold, Esq.
Assistant United States Attorney
Eastern District of New York
1 Pierrepont Plaza
Brooklyn, New York 11201
Re: United States v. Coppa, et al.,
00 CR 196 (ILG)
Dear Mr. Corngold:
I am writing on behalf of defendant Daniel Lev to
follow up on our meeting of June 15, 2000 during which
I reviewed certain discovery materials pertinent to this
case. At our meeting, I noted my request for certain
exculpatory and impeachment materials included in
your general index which I believed to be Brady and/or
Giglio material, i.e., bank, phone and financial records
of Eugene Klotzman and Felix Sater; NASD/SEC
disciplinary and employment history for Klotzman and
Sater; customer complaints regarding Klotzman and
Sater; materials from People v. Sater; and any recorded
witness statements from these or any government
witness which serve to impeach them or excuplate the
PDF Page 125
App. 67
defendant. United States v. Shvarts, 90 F. Supp.2d 219
(E.D.N.Y. 2000)(Glasser, J.). Of course my request is
not limited to materials found in your general index.
Any other such materials within the government’s
possession or control is also requested.
Please contact me if you have any questions with
regard to this request.
Very truly yours,
/s/
Jeffrey Lichtman
PDF Page 126
App. 68
APPENDIX I
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
EOC: DBP
F. #1998r01996
3500-1.wpd
136 Pierrepont Street
Brooklyn, New York 11201
November 20, 2001
BY FEDERAL EXPRESS
Lawrence Ray
2 Cedar Ridge Lane
Warren, New Jersey 07059
Re:
United States v. Lawrence Ray,
Criminal Docket No. 00-196 (ILG)
Dear Mr. Ray:
Enclosed are copies of documents and audiocassette
tapes which the government is providing to you
pursuant to its obligations under the Jencks Act, which
is codified at Section 3500 of Title 18 of the United
States Code, and Rules 16 and 26.2 of the Federal
Rules of Criminal Procedure. As a courtesy, since you
are not an attorney, we also have enclosed copies of
Section 3500 and Rules 16 and 26.2.
As you will see, taken together, Section 3500 and
Rule 26.2 provide that after a witness called by the
PDF Page 127
App. 69
government has testified on direct examination, a
defendant may ask the judge to order the government
to give the defendant copies of any written or recorded
statements of the witness in the government’s
possession relating to the subject matter about which
the witness testified. As a courtesy, this Office
generally does not wait for a defendant to make a
motion to receive such materials, nor do we wait until
the witness has testified on direct examination to
provide copies of such materials. We also generally
take a broad view regarding which statements “relate”
to the subject matter of a witness’s testimony.
With these principles in mind, we are providing you
with copies of (i) transcripts of prior testimony of
Professor Steven Thel, who will be called by the
government as an expert witness,1 (ii) copies of reports
of interviews of you by FBI Special Agents Gary Uher
and Leo Taddeo,2 both of whom the government expects
to call as witnesses, and (iii) audiotapes of recorded
conversations involving Joseph Polito and Felix Sater,
both of whom will be called by the government as a
cooperating witnesses.3 With regard to the audiotapes,
we do not intend to offer any of them into evidence at
1
The nature of Professor Thel’s expert testimony is detailed in a
separate letter to you dated today.
2
Copies of the Uher and Taddeo reports were provided to you
previously. We nonetheless provide you with additional copies as
a courtesy.
3
You were provided, under cover of a letter dated yesterday, with
copies of materials relating to the testimony of Polito and Sater,
along with copies of materials relating to another cooperating
witness, Salvatore Lauria.
PDF Page 128
App. 70
trial and do not believe they will have any relevancy at
trial. However, for the reasons set forth above, we
provide them to you, in an abundance of caution, to
ensure that there is no question that we have satisfied
all of our obligations to you under Section 3500.
***
PDF Page 129
App. 71
APPENDIX J
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CR-98-1102
[Dated February 5, 2004]
________________________________
UNITED STATES OF AMERICA, )
)
Plaintiff,
)
)
-against)
)
SALVATORE LAURIA,
)
)
Defendant. )
________________________________ )
United States Courthouse
Brooklyn, New York
February 5, 2004
10:00 a.m.
TRANSCRIPT OF SENTENCING
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Plaintiff:
ROSLYNN R. MAUSKOPF, ESQ.
United States Attorney
PDF Page 130
App. 72
BY: ERIC CORNGOLD, ESQ.
Assistant United States Attorney
For the Defendant:
ROBERT G. STAHL, ESQ.
Court Reporter:
FREDERICK R. GUERINO, C.S.R.
225 Cadman Plaza East
Brooklyn, New York
(781) 613-2503
***
[p.2]
THE COURT CLERK: Criminal cause for
sentencing: United States of America v. Salvatore
Lauria.
MR. CORNGOLD: Eric Corngold for the United
States.
MR. STAHL: Robert Stahl on behalf of Mr.
Lauria.
THE COURT: Ready to proceed?
MR. STAHL: Yes, Your Honor.
***
[p.3]
***
THE COURT: Mr. Stahl, do you want to be
heard beyond that?
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App. 73
MR. STAHL: Not on the legal argument. On the
sentencing, yes, Your Honor.
THE COURT: Go ahead.
PSR,
MR. STAHL: Your Honor, obviously between the
[p.4]
***
Mr. Lauria is someone whose family is here in
court today to show their support and it has not been
easy. As your Honor is aware, Mr. Lauria cooperated
fully with the government immediately and extensively
in bringing upon not only himself, which is not a
concern to Mr. Lauria in particular, but to his family,
and to make amends for the acts that he did. Mr.
Lauria cooperated not only against other brokers and
money launderers, but also against organized crime,
which I think is laid out in both our submissions. And
that led to a number of threats against Mr. Lauria and
his family, including against his young daughter.
But, in addition to that, Mr. Lauria was the
person at White Rock, State Street Capital that had
been legitimately involved in the stock market
business, had signed all of the leases, and put his name
personally responsible for all of the money, and has
settled with every investor who has filed a suit. He has
settled with the creditors of those companies, from the
phone systems to the furniture leases, has not walked
away from it, did not declare bankruptcy, and did not
say I just can’t do this. He saw that he had to live up to
his responsibilities, that he
PDF Page 132
App. 74
[p.5]
had completely gone off course from his upbringing
from a very humble background, hard-working, family
oriented, to live up to those financial responsibilities,
as well as his family responsibilities. And he, unlike
some other individuals involved in this, went out and
did the best he could and settled with those people. So
anyone that filed an action against the companies, or
Mr. Lauria or others, Mr. Lauria has settled with, and
has left him, as you can see from the financials, in
difficult financial shape, and obviously leaving his
family in difficult financial shape.
***
[p.6]
***
THE COURT: Who are all of these people that
you say he settled with, who are they?
MR. STAHL: They were investors that filed
lawsuits.
THE COURT: How many were those?
20.
MR. STAHL: I would say about between 15 and
THE COURT: That’s just a minuscule
percentage of the number of investors who were
defrauded, who suffered substantial losses as a result
of Mr. Lauria’s activity. Fifteen to 20 is not even a drop
in the bucket.
MR. STAHL: Your Honor, I understand. I’m not
putting Mr. Lauria up for a commendation at all. Mr.
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App. 75
Lauria committed a complicated stock fraud, as we
have seen too many times in this courtroom, and when
I have been before you on other matters, people who
start out legitimately, become greedy. They go on a
slippery slope and the next thing they know they are
involved in this. That’s not excusable. But my point to
your Honor is, Mr. Lauria has done what he can within
his own financial means, and the people that sought
claims, people that lost money in the investments, and
[p.7]
companies that had leased equipment to Mr. Lauria’s
company is not just his companies, but the people who
were involved with Mr. Lauria, and none of the other
partners have taken any of this action. This is
something Mr. Lauria has done in an effort to live up
to his responsibilities.
***
In addition to that, he has settled with the
people that came forward. Obviously Mr. Lauria could
not go out and track down each and every individual
investor and offer them a penny on each dollar that
was lost. He was one part of a very large group of
individuals. Most of them have been before your Honor,
24, I believe, individuals that the government directly,
through Mr. Lauria’s cooperation, was able to indict, in
addition to all of the other cases, including ongoing
cases that he has cooperated and still cooperates to this
day with the United States.
***
PDF Page 134
App. 76
[p.9]
***
THE COURT: Mr. Stahl made reference to
threats which I see no reference to in your letter.
What do you know about that?
MR. CORNGOLD: The threats, your Honor, Mr.
Lauria reported them. They are described in Mr.
Stahl’s letter. Agent Taddeo is here. I think the answer
is, well, we were never able to identify who made the
threats, and that doesn’t mean that we don’t believe
that what he described didn’t exist. We were just never
able to track them down.
Is that fair?
AGENT TADDEO: That’s correct.
MR. STAHL: Your Honor, first we know in
particular there was the initial approach by a private
investigator hired by Mr. Persico, and that was
someone that Mr. Lauria had grown up in the
neighborhood with. So that’s one of the individuals that
he was very concerned about, because Mr. Persico
viewed as the ultimate act of betrayal.
Second, Mr. Lauria, the telephone call, I’m
talking about to his wife talking about how cute their
daughter is,
[p.10]
was traced to a phone booth a mile and a half away,
and was reported to the local police, and of course was
reported to Agent Taddeo and his squad at the time,
and I believe that was all verified. Obviously, as Mr.
PDF Page 135
App. 77
Corngold said, they were never able to trace who made
the call, but it was certainly a clear message to Mr.
Lauria and his family.
***
PDF Page 136
App. 78
APPENDIX K
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
00-CR-1005 (NGG)
[Dated June 20, 2006]
________________________________
UNITED STATES OF AMERICA )
)
-against)
)
MICHAEL SHEFEROFSKY
)
a/k/a Mikhail Sater
)
)
Defendant
)
________________________________ )
U.S. Courthouse
Brooklyn, New York
SEALED PROCEEDING
June 20, 2006
9:30 a.m.
BEFORE:
HONORABLE NICHOLAS G. Garaufis
United States District Judge
APPEARANCES:
For the Government:
LORETTA E. LYNCH
PDF Page 137
App. 79
United States Attorney
271 Cadman Plaza East
Brooklyn, New York 11201
BY: THOMAS ALAN FIRESTONE
Assistant U.S. Attorney
For the Defendant:
MALMAN, MALMAN & ROSENTHAL
4040 Sheridan Street
Hollywood, Florida 33021
BY: MYLES H. MALMAN
and
STAHL & HORBLIT
47 Maple Street
Suite 206
Summit, New Jersey 07901
BY: ROBERT G. STAHL
***
[p.2]
Court Reporter:
RONALD E. TOLKIN, RPR, RMR, CRR
Official Court Reporter
225 Cadman Plaza East
Brooklyn, New York 11201
718-613-2647
***
THE CLERK: Criminal cause for sentences.
Counsel, please state your appearances.
MR. STAHL: Good morning, Robert Stall and
Myles Malman on behalf of Michael Sheferofsky.
PDF Page 138
App. 80
THE COURT: Good morning.
MR. FIRESTONE: Thomas Firestone for the
government.
***
[p.13]
***
THE COURT: Is there any restitution here?
MR. FIRESTONE: No. I believe that is
addressed in the addendum to the -THE COURT: Let me just take a look.
[p.14]
THE COURT: You agree with Probation?
MR. FIRESTONE: Yes, absolutely.
THE COURT: I just needed to cover that. Since
this case deals with an extortion restitution is often
part of the sentence.
MR. FIRESTONE: It would be except for the fact
as indicated in the probation report, the victims are
either unidentifiable, dead or were extorted of money
which was itself the proceeds of criminal activity.
THE COURT: All right.
***
PDF Page 139
App. 81
APPENDIX L
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
04-CR-234 (CBA)
[Dated January 11, 2008]
________________________________
UNITED STATES OF AMERICA )
)
v.
)
)
SALVATORE D. ROMANO,
)
)
Defendant. )
________________________________ )
January 11, 2008
Brooklyn, New York
TRANSCRIPT OF CRIMINAL CAUSE
FOR SENTENCING
BEFORE THE HONORABLE CAROL B. AMON
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Government:
United States Attorney’s Office
BY: JEFFREY GOLDBERG, ESQ.
Assistant United States Attorney
225 Cadman Plaza East
Brooklyn, New York 11201
PDF Page 140
App. 82
For the Defendant:
MICHAEL F. BACHNER, ESQ.
Bachner & Herskovits, P.C.
26 Broadway
New York, New York 10004
Court Transcriber:
CARLA NUTTER
TypeWrite Word Processing Service
356 Eltingville Boulevard
Staten Island, New York 10312
***
[p.35]
THE DEFENDANT: Of course, Your Honor,
please. I’m not minimizing that number. I would never
do that. All I’m trying to say is I have the ability to pay
back $10 million. I’m forty years old, I can work, I’m
earning money in the last two years -- six figures. I
expect that to go to a high six figures. If this case is
about the victims and me paying it back the only shot
I would have is working. That’s the only way I can do
that.
THE COURT: Well, that’s another issue. Let me
just ask the government. I get letters here that say, you
know, restitution can’t be calculated.
MR. GOLDBERG: It really can’t, Judge, with
respect to the securities fraud. I think Probation put it
best when they cited the statute involving
impracticable calculation.
I will note that there is an outstanding
restitution with respect to Mr. Romano’s 1992 case. As
PDF Page 141
App. 83
of July it was $675,000.00 that he owed. I know he has
resumed actively making payments on that but that is
a number that’s out there that -THE COURT: So what are the financial
penalties available here?
MR. GOLDBERG: Well, Probation has concluded
that he is unable to pay a fine. He’s obviously -- I mean
that report was filed September 2006 and Mr. Romano
is apparently doing much better now. I don’t know
what Probation’s position on
[p.36]
that is but he does have this outstanding balance of
$675,000.00 minus whatever payments he has made in
recent months.
***
THE DEFENDANT:
***
[p.37]
We’re pillars in our community now because
we’ve been there for three or four years now and if I
lose any of that momentum, obviously, it’s going to hurt
the victims that lost $40 million because I’m going to be
unable to pay.
THE COURT: Well, nobody knows who they are
so you’re not going to be able to pay them anyway. I
guess you have the restitution from Judge Dearie’s case
that you could pay.
***
PDF Page 142
App. 84
MR. BACHNER:
***
[p.38]
***
One of the problems because it was impractical
if not impossible to find out who the victims were, it
was really hard or impractical to even determine, you
know, if an investor invested money, did he sell the
stock for a profit, did he lose any of that money? ...
***
[p.45]
***
MR. GOLDBERG: And I was reminded by
Probation that I believe Your Honor is making the
finding about restitution being impracticable under
3665.
THE COURT: I have nobody to order restitution
to because the information hasn’t been provided to me
and I accept the representation that it’s too difficult to
do.
MR. GOLDBERG: Thank you, Your Honor.
***
PDF Page 143
App. 85
APPENDIX M
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98-CR-1101
[Dated June 14, 2010]
________________________________
UNITED STATES OF AMERICA, )
)
v.
)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
U.S. Courthouse
Brooklyn, New York
June 14, 2010
12:00 o’clock p.m.
TRANSCRIPT OF MOTION HEARING
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES SENIOR JUDGE
APPEARANCES:
For the Movant:
KELLY MOORE, ESQ.
BRIAN HERMAN, ESQ.
PDF Page 144
App. 86
For the Respondent:
RICHARD E. LERNER, ESQ.
LAUREN ROCKLIN, ESQ.
For Non-Party Movant:
STAMATIOS STAMOULIS, ESQ.
Court Reporter:
Anthony M. Mancuso
225 Cadman Plaza East
Brooklyn, New York 11201
(718) 613-2419
***
[p.3]
***
THE COURT:
***
[p.5]
***
Now, with respect to your inquiries as to the
order which may have been issued, there is no formal
order which I believe is not issued by virtually any
judge in this courthouse with respect to sealing. I
notice the letter I got from you says facsimile under
seal and to the extent that I so ordered it, I have tacitly
approved it.
***
PDF Page 145
App. 87
So there is no formal order, and to the extent
that you want to know what that order said and to
whom it was
[p.6]
addressed it’s a request which has no merit. I can’t
make an order sealing a document and saying this
document is sealed and not to be looked at by Mr.
Lerner, Mr. Stamoulis. It’s a document which is placed
under seal. It’s filed under seal. And if anybody wants
to see what it is that has been filed under seal, the
procedure is to make an application to the court to
unseal it.
***
[p.9]
***
So when your letter asks me to show you what
order is directed to Mr. Oberlander, there isn’t any.
***
PDF Page 146
App. 88
APPENDIX N
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
CV 98-1101
[Dated July 20, 2010]
________________________________
)
)
IN RE: JOHN DOE,
)
)
________________________________ )
United States Courthouse
Brooklyn, New York,
July 20, 2010
10:30 o’clock a.m.
TRANSCRIPT OF ORAL ARGUMENT
BEFORE THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Plaintiff:
MORGAN LEWIS & BOCKIUS, LLP
101 Park Avenue
New York, N. Y.
BY: KELLY MOORE, ESQ.
LESLIE R. CALDWELL, ESQ.
DAVID A. SNIDER, ESQ.
BRIAN A. HERMAN, ESQ.
PDF Page 147
App. 89
For the Defendant:
WILSON ELSER MOSKOWITZ EDELMAN
& DICKER, LLP
150 East 42nd Street
New York, N. Y. 10017
BY: RICHARD LERNER, ESQ.
LAUREN J. ROCKLIN, ESQ.
Court Reporter:
Henry R. Shapiro
225 Cadman Plaza East
Brooklyn, New York
718-613-2509
HENRY SHAPRIO
***
[p.11]
***
THE COURT: Excuse me. Just a minute. Is
there some presumption that an order -- assuming that
there is an order and you do not know whether the
order was or was not signed -- what you do know by
looking at the docket sheet is that this is a sealed file,
sealed by order of the court.
Is there some presumption that the order is
invalid because it was not signed, is that what I’m
hearing?
case--
MS. LERNER: I’m referring to the Hartford
PDF Page 148
App. 90
THE COURT: Mr. Lerner, I am asking you what
I am understanding, is there is a presumption of the
invalidity of an order?
MS. LERNER: I think, your Honor stated on the
record that this is just matter of factly and indicated as
I recall it wasn’t even signed, it’s docket said is sealed.
If there is a signed order, let us see it, because without
a signed order this proceeding is unconstitutional.
THE COURT: It may be, Mr. Lerner, that you
are correct. You are not answering the question.
MS. LERNER: I don’t have to make any
presumption. The United States Supreme Court has
held the appellate courts
[p.12]
do not have to presume there is a signed order in the
file when there is-THE COURT: If there is an order or docket entry
that says this has been sealed by order of the court, any
person is free to ignore that order and if by some
chance, some document in that file becomes available
to any person, that person is free to assume that the
order has no efficacy?
***
[p.13]
***
MS. LERNER: There is nothing in the record,
that we are aware of, because we cannot see the docket
sheet or the sealing order. There is nothing on the
order finding a more fundamental interest in the First
PDF Page 149
App. 91
Amendment would be served by sealing this court file.
There is nothing on the record finding this was the
least restrictive alternative.
***
[p.14]
***
Now, your Honor, ordered -- the order itself
signed by your Honor incorporates Ms. Moore’s
arguments and it says for the reasons stated, but that
is constitutionally insufficient according to Amadao,
you must make independent findings to support a prior
restraint.
It must be the order itself. The TRO is a nullity.
Failing to make the requisite findings in the order to
show cause, in as much it constitutes a prior restraint,
renders that prior restraint unconstitutional.
***
[p.15]
***
MS. LERNER: Your Honor, you sealed the entire
docket, yet you indicated there are thirteen items in
the docket, six of which are sealed, which means there
are others which are not sealed and yet the entire file
has been sealed.
***
He returned, your honor, the original document
that he obtained from Mr. Bernstein.
PDF Page 150
App. 92
Now, it may not be so clear in the record that he
-- those were actually the originals obtained from Mr.
Bernstein. If the Court would like a representation
from Mr. Oberlander to that effect, I would ask that he
give it. But those were the originals.
Your Honor can do nothing to stop the
dissemination of photocopies or electronic copies and
the selective enforcement or selective gag order
directed only at Mr. Oberlander and not, for example,
Business Week, ...
***
[p.16]
noted in our papers, has on its website an article which
states that it has a copy of the criminal -- the sealed
criminal complaint in this matter.
Your Honor, cannot selectively enforce a gag
order against Mr. Oberlander. You cannot gag him and
not gag Business Week.
If you’re going to take on a little guy you have to
take on a big guy. He’ll not sit here and accept that,
neither will I. We will fight this to the end. A
permanent injunction cannot be granted.
Thank you, your Honor.
***
THE COURT: Your application is granted to file
a supplemental brief.
There are a number of things, which are
troublesome in this case. Going back to the original
order to show cause, that document was troublesome
PDF Page 151
App. 93
because it just said that there was a significant breach
in the processes of this Court with respect to criminal
dockets.
There was, as I think, indicated on that occasion,
I was very concerned about the integrity of the record
of this Court and that file. It turns out that the first
document on
[p.17]
that docket sheet is a notification by an assistant
United States attorney of the filing of an information,
which eventually evolved into an indictment.
There is no indication, that is docket number
one, which I obtained or had the clerk obtain from
Kansas city or wherever these files are shipped,
because it was no longer available in the courthouse.
There is not any indication in that document or in a
subsequent document that an application was made or
request was made in that document to seal that file.
Nor have I been able to find any order signed by me,
which directed that this file be sealed.
***
Let us assume for the moment that an order was
signed by me somewhere along the line, as it may have
been, directing that the file in this case be sealed. That
order is directed to whom? Who is bound by it? That
order, it would appear, is directed to the clerk of the
court who is informed that this document or this file is
sealed and is not to be made available, except upon an
order of the Court unsealing it.
PDF Page 152
App. 94
into
When the order to show cause was first brought
[p.18]
this Court, it was a very serious concern as to whether
somebody in this courthouse unsealed that file or made
document which were sealed available to third parties.
That was a very significant concern.
A hearing, which we held some weeks ago,
makes it plain and, I think, it is beyond dispute that
these documents were not removed by John Doe, he
properly had them. The cooperation agreement was a
document which was in the possession of his then
attorney. His attorney had a perfect right, as did John
Doe, to have a copy of that cooperation agreement, had
a perfect right to have whatever document pertained to
his case, which may have been part of the file.
Assume that John Doe decided to make the
cooperation agreement, the proffer agreement available
to a third-party, would an order have been violated?
The answer is clearly, no. John Doe had these
documents, so the testimony has thus far revealed, Mr.
Bernstein has not submitted an affidavit nor has he
testified. You cannot find him for the purpose of
serving the subpoena.
What we have on the record is the testimony by
John Doe that he did not give those documents to Mr.
Bernstein, which gives rise to the legitimate inference
that Mr. Bernstein may have stolen them, may have
improperly obtained those documents.
What order of ...
PDF Page 153
App. 95
***
[p.19]
Those documents then came into the hands of Mr.
Oberlander. Mr. Oberlander knew that those
documents were sealed documents, contained very,
very serious information and his assertion or testimony
that, well, it wasn’t his words, it was his client’s words,
is remarkable for it’s disingenuous. To say that I am
not a criminal lawyer and I don’t know what it meant,
I have a sealed document, is preposterous. Particularly,
since he had the electronic filing information from the
Southern District that said if it’s a cooperation
agreement, be very, very careful before you use it.
Now, what happened, assuming that the
documents were in John Doe’s cabinet or in his desk, as
they had a perfect right to be, they were his documents,
and the documents were then wrongfully taken by Mr.
Bernstein. Mr. Bernstein is a converter, Mr. Bernstein
has no title to those documents, no legal right to those
documents, to that tangible document whether it would
be a piece of paper, whether it be a gold ring or
whatever it is, it was a tangible item which was
converted, given the testimony that I have by Mr.
Bernstein -MS. LERNER: John Doe, I believe. Bernstein did
not testify.
THE COURT: I am saying based on the
testimony. Mr. Bernstein then analogizing these events
to the fundamental principle of conversion, or larceny,
if you will, past it onto Mr. Oberlander.
PDF Page 154
App. 96
[p.20]
Mr. Oberlander had no better right to those
documents than Mr. Bernstein had. If we were to
describe this change of events in terms of property
rights, title, Mr. Bernstein had no title and he had no
title to give to Mr. Oberlander.
Mr. Oberlander even if he were an innocent
purchaser for value, would not have acquired title to
those documents, because Mr. Bernstein had no title to
give him. If requests were made of Mr. Oberlander to
return those documents and Mr. Oberlander refused, it
may be that an action for conversion may be available
against Mr. Oberlander.
It may be that there is some disciplinary rule,
which might be applicable to Mr. Oberlander, who had
documents which he knew or perhaps should have
known may have been improperly obtained by
Bernstein and passed onto him.
It may be that there is some ethical principle,
which should have precluded Mr. Oberlander from
using those documents. Because the sensitivity of those
documents would have been apparent to any
reasonable person, particularly one who is trained in
the law ostensibly.
So the question is, yes, something bad was done,
something very bad and perhaps despicable was done
by the use of those documents annexed to a complaint
in the Southern District, in a civil case, but the
question is what order was violated?
***
PDF Page 155
App. 97
[p.22]
***
What I have just declared is not to be understood
at this moment as a determination that injunctive
relief may not be appropriate, but I am troubled by the
issues as I have outlined them as to whether an order
signed by a judge on one of those sealing envelopes,
which says, not to be unsealed except by order of the
Court, is binding upon any third-party person, is
binding or is the procedure, which is intended by that
procedure, which informs any third-party who has
notice or will have notice by looking at a docket sheet,
looking at the ECF, this is a case under seal -- under
sealed or filed under seal-- make application to the
Court to unseal the document.
Whether having knowledge that the case was
one, which
[p.23]
has been filed under seal, whether an order was issued
or not, it is a case which is filed under seal, and clearly
indicates the content of that sealed file is not to be
disclosed, except upon order of the Court, whether that
can be ignored, whether that is presumptively
meaningless and has no binding effect upon anybody.
***
[p.25]
***
MS. MOORE: Your Honor, in light of Mr.
Lerner’s last
PDF Page 156
App. 98
[p.26]
submission, I would seek clarification with respect to
the PSR that it’s clear -THE COURT: Before you get to that. Am I
correct that the documents, at least Mr. Lerner’s last
submission says this whole proceeding now is moot
because the documents have been surrendered, turned
over to you, is that correct?
MS. MOORE: Not that I know of. I think, as I
understand his position, which I don’t agree with, he’s
entitled to keep all copies of the documents, as long as
he returned the originals, so, I believe, in his letter he
states that if at the court proceeding he marked as
exhibits the original versions of those documents, but
his client has maintained both electronic and hard
copies, so clearly the intent was not to give back, as
Judge Jones ordered in Visa, all copies as well. It
doesn’t get the originals back and are free to
disseminating copies.
THE COURT: I think, I indicated Mr.
Oberlander should not do that. I think it was in the
form of an order and that order, I believe, if I have not
done so, I am doing it now and if you want it in writing
until I resolve this issue.
MR. LERNER: You are issuing a further TRO?
THE COURT: Yes, I am.
I’m issuing a further TRO for the reasons that I
have indicated.
I think there is irreparable harm, which is
imminent
PDF Page 157
App. 99
[p.27]
to Mr. John Doe, those documents contained
information which is highly, highly sensitive and if
disseminated it is discriminatively to a person that
should not get the information.
I think, it would put Mr. John Doe’s safety at
risk. The likelihood of success is or is not present.
Again, if Charmer Industies is being read correctly by
me and, I think, it is, I think, the burden with respect
to whether or not there is some need to maintain those
documents or to keep them should be shifted to you.
Until next week, okay.
I do not think we need any further hearing. You
will submit the briefs and I will make my
determination. The TRO is continued for another ten
days.
Is there anything further?
MS. MOORE: No, your Honor.
THE COURT: Thank you.
MS. MOORE: I do have one last application.
With respect to the transcript to have my client’s name
replaced with John Doe.
THE COURT: Yes.
MS. MOORE: Thank you.
PDF Page 158
App. 100
APPENDIX O
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-0060
Tel: 212.309.6000
Fax: 212.309.6001
www.morganlewis.com
Morgan Lewis
COUNSELORS AT LAW
Kelly A. Moore
Partner
212.309.6612
kelly.moore@MorganLewis.com
August 12, 2010
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Court
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
United States v. Doe, 98 CR 1101 (ILG)
Dear Judge Glasser:
We represent John Doe, the movant on an application
for injunctive relief with respect to certain sealed and
confidential documents.
We are in receipt of Mr. Lerner’s letter of this morning.
While we disagree with his characterizations, we agree
PDF Page 159
App. 101
that, if the Court so-orders the standstill, a hearing
tomorrow is unnecessary.
We reserve our rights to seek clarification of the
Court’s orders in the event the standstill is terminated.
We also reserve our rights with respect to Josh
Bernstein’s non-compliance with the Court’s order.
Respectfully,
/s/Kelly A. Moore
Kelly A. Moore
cc: Richard Lerner, Esq. (by email)
Stam Stamoulis, Esq. (by email)
AUSA Todd Kaminsky (by email)
DBI/65437647.2
[Handwritten Note: The standstill agreement has been
“so ordered” and the hearing rescheduled for August
13th, 2010 is hereby adjourned [ ] So ordered I.L.
Glasser USDJ 8/14/10]
PDF Page 160
App. 102
APPENDIX P
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-0060
Tel: 212.309.6000
Fax: 212.309.6001
www.morganlewis.com
Morgan Lewis
COUNSELORS AT LAW
Kelly A. Moore
Partner
212.309.6612
kelly.moore@MorganLewis.com
August 12, 2010
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Court
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
United States v. Doe, 98 CR 1101 (ILG)
Dear Judge Glasser:
We represent John Doe, the movant on an application
for injunctive relief with respect to certain sealed and
confidential documents.
Enclosed please find a stipulation of standstill by and
among movant and respondents, which we respectfully
request that the Court so-order as soon as possible.
PDF Page 161
App. 103
Respectfully,
/s/Kelly A. Moore
Kelly A. Moore
cc: Richard Lerner, Esq. (by email)
Stam Stamoulis, Esq. (by email)
AUSA Todd Kaminsky (by email)
DBI/65437647.1
PDF Page 162
App. 104
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101 (ILG)
FILED UNDER SEAL
________________________________
UNITED STATES OF AMERICA, )
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
STIPULATED STANDSTILL ORDER
WHEREAS Frederick M. Oberlander and Jody Kriss
(together with Michael Ejekam, “Respondents”), but
not Michael Ejekam, are in possession of paper (but not
originals) or electronic copies of certain documents (the
“Documents”) related to a certain criminal matter
referenced by Case No. 98-CR-1101 (the “Criminal
Matter”);
WHEREAS certain of the Documents and information
therefrom were appended to, cited, quoted or
referenced in a complaint (“SDNY Complaint”) filed in
a civil action captioned Kriss et al. v. Bayrock Group
LLC el al., No. 10 CV 3959 (the “SDNY Action”).
WHEREAS the Court has issued one or more orders, be
they temporary restraining orders (“TROs”) or
injunctions or other orders or decrees of whatever kind,
PDF Page 163
App. 105
concerning the Documents and the Respondents have
appealed therefrom;
WHEREAS John Doe (the “Movant”) seeks further
relief from the Court concerning the Documents
including an injunction concerning dissemination (the
“Further Requested Relief”);
WHEREAS Movant contends that he has a right to the
return of the Documents and that Respondents may
not use the Documents or information therefrom;
WHEREAS Respondents contend that the current
orders and the Further Requested Relief are improper,
violate certain constitutional rights, and are
procedurally invalid;
WHEREAS the parties have submitted memoranda
and declarations in support of their respective
positions;
WHEREAS pursuant to an order of the Court, Movant
was scheduled to file a supplemental memorandum of
law (the “Supplemental Memorandum”) on July 27,
2010, which date was adjourned by agreement of the
parties;
WHEREAS counsel for Movant and Respondents are
engaged in discussions to achieve a mutually
acceptable resolution of proceedings before the Court
concerning the Documents and the Further Requested
Relief (a “Settlement”) prior to entry by this Court of an
order addressing the Further Requested Relief (the
“Order”);
WHEREAS counsel signing this stipulated standstill
order represent that they are authorized to enter this
PDF Page 164
App. 106
stipulated standstill order on behalf of their respective
clients;
NOW THEREFORE, Movant and Respondents, by and
through their undersigned counsel, hereby stipulate
and agree to, and request that the Court enter an order
providing for, the following:
1. Stay of Proceedings in this Action; Status Quo
Maintained:
a. Movant’s time to file the Supplemental
Memorandum is adjourned until September 27,
2010, unless this agreement is terminated
earlier pursuant to paragraph 4 below. If the
agreement is terminated prior to September 27,
2010, then the Supplemental Memorandum
shall be filed within one week of the termination
date;
b. The Court shall not issue the Order or any other
relief of any kind not presently in existence at
the time of execution hereof, prior to submission
of the Supplemental Memorandum;
c. Pending a Settlement or issuance of the Order,
Respondents (and their agents or anyone acting
at the direction of Respondents) may not
disseminate the Documents or information
obtained therefrom except as may be required
for purposes of Respondents’ pending appeal, in
which case the provisions of Paragraph 3.e shall
be applicable;
d. While this stipulated standstill order is in effect,
Respondents (and their agents or anyone acting
PDF Page 165
App. 107
at the direction of Respondents) shall not file
any application to unseal the Documents;
2. The SDNY Action:
a. Judge Buchwald may be provided a copy of this
stipulated standstill order;
b. Respondents shall make an application to Judge
Buchwald for a 60 day extension of their time to
serve the SDNY Complaint on the defendants in
the SDNY Action;
c. Respondents reserve the right to provide each of
the defendants in the SDNY Action a redacted
copy of the SDNY Complaint. Movant and
Respondents shall promptly meet and confer in
good faith concerning the redactions. The
redacted version of the SDNY Complaint shall
not include the Documents as exhibits and shall
not include references to, quotations of or
information derived from the Documents;
d. In no event shall Respondents serve an
unredacted copy of the SDNY Complaint or the
Documents as exhibits prior to issuance of the
Order;
e. Nothing herein shall preclude Respondents from
filing and serving an amended complaint in the
SDNY Action that does not include the
Documents or references to, quotations of or
information derived from the Documents;
f. It is understood that in the further proceedings
before Judge Buchwald, Movant’s counsel will be
permitted to communicate directly with
PDF Page 166
App. 108
respondent Oberlander, in his capacity as
counsel for respondents Kriss and Ejekam and
as counsel for those whom either or both may
represent in their derivative capacities.
3. Appeals
a. Respondents have filed a notice of appeal from
certain orders of the Court, and in the event the
Court grants the Order in whole or in part, it is
anticipated that Respondents may file additional
appeals;
b. In the event the Court denies the Order in whole
or in part, it is anticipated that Movant may file
an appeal;
c. The parties reserve their rights to make all
arguments on appeal, and nothing herein shall
constitute a waiver of any such rights;
d. Nothing herein shall prevent Movant from
seeking an order to preserve the status quo
pending any appeal;
e. If, during the pendency of this standstill,
Respondents determine that they are required to
submit the Documents or information derived
therefrom to the Second Circuit in connection
with their pending appeal, Respondents shall
provide reasonable advanced notice of any such
filing to Movant and to the United States
Attorneys Office for the Eastern District of New
York so that Movant and/or the United States
Attorneys Office for the Eastern District of New
York may make an application to have the
materials sealed.
PDF Page 167
App. 109
4. Termination of the Stipulated Standstill Order
a. Any party may terminate this stipulated
standstill order on 7 calendar days’ advance
written notice for any reason, which notice shall
be served on the undersigned counsel by
(a) overnight mail and (b) by facsimile or email.
b. Unless so terminated, this stipulated standstill
order shall terminate on September 27, 2010;
5. Reservation of Rights
a. Except as otherwise stated herein, the parties
reserve all of their respective rights, claims and
arguments;
b. No party will argue that, by entering into this
stipulated standstill order, the other party has
conceded the validity of any order of the Court or
the Further Requested Relief, or any argument
or claim raised by the other party, or waived the
right to make any argument or claim;
c. Movant will not argue that by entering into this
standstill Respondents implicitly agreed that
there was no emergency or waived or are
estopped from asserting any claim of emergency
for emergency or expedited appeal or
mandamus, the parties hereto agreeing that the
primary purpose of this agreement is to
accelerate resolution of this dispute without
waiting for further rulings and appeals.
6. This agreement shall become valid only upon the
execution by all three signatories hereto.
PDF Page 168
App. 110
Dated: New York, New York,
July 8/12/,2010
MORGAN, LEWIS & BOCKIUS LLP
By: /s/Brian A. Herman
Brian A. Herman
Attorney for Movant John Doe
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
By:/s/Richard E. Lerner
8/11/10
Richard E. Lerner
Attorneys for Respondent Fred Oberlander
STAMOULIS & WEINBLATT LLC
By:/s/Stamatios Stamoulis
8/12/2010
Stamatios Stamoulis
Attorney for Respondents Jody Kriss and Michael
Ejekam
SO ORDERED
/s/
8/12/10
DBI/65300802.1
4079191.1
PDF Page 169
App. 111
APPENDIX Q
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101 (ILG)
FILED UNDER SEAL
[Dated September 27, 2010]
________________________________
UNITED STATES OF AMERICA, )
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
AMENDMENT TO STIPULATED
STANDSTILL ORDER
WHEREAS John Doe (the “Movant”) and Frederick M.
Oberlander and Jody Kriss (together with Michael
Ejekam, “Respondents”) executed a Stipulated
Standstill Order so ordered by the Court on August 12,
2010 (the “Standstill Order”);
WHEREAS the Standstill Order is scheduled to
terminate on September 27, 2010;
WHEREAS the parties have agreed to extend the term
of the Standstill Order;
PDF Page 170
App. 112
NOW THEREFORE, Movant and Respondents, by and
through their undersigned counsel, hereby stipulate
and agree to, and request that the Court enter an order
providing for, the following:
1. Paragraph “1.a.” of the Standstill Order is
amended to state as follows:
Movant’s time to file the Supplemental
Memorandum is adjourned until January 14,
2011, unless this agreement is terminated
earlier pursuant to paragraph 4 below. If the
agreement is terminated prior to January 14,
2011, then the Supplemental Memorandum
shall be filed within one week of the termination
date.
2. Paragraph “4.b.” of the Standstill Order is
amended to state as follows:
Unless so terminated, this stipulated standstill
order shall terminate on January 14, 2011.
3. All other terms in the Standstill Order remain
unchanged.
Dated:
New York, New York,
September 27, 2010
MORGAN, LEWIS & BOCKIUS LLP
By:/s/Brian A. Herman
Leslie R. Caldwell
Kelly A. Moore
Brian A. Herman
Attorney for Movant John Doe
PDF Page 171
App. 113
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
By:/s/Richard E. Lerner
Richard E. Lerner
Attorneys for Respondent Fred Oberlander
STAMOULIS & WEINBLATT LLC
By:/s/Stamatios Stamoulis
Stamatios Stamoulis
Attorney for Respondents Jody Kriss and Michael
Ejekam
SO ORDERED
/s/I.L.Glasser
USDJ
9/27/10
DBI/65634538.2
PDF Page 172
App. 114
APPENDIX R
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-0060
Tel: 212.309.6000
Fax: 212.309.6001
www.morganlewis.com
Morgan Lewis
COUNSELORS AT LAW
Kelly A. Moore
Partner
212.309.6612
kelly.moore@morganlewis.com
November 16, 2010
VIA FACSIMILE
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Judge
United States District Court
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
United States v. Doe, 98 CR 1101 (ILG)
Dear Judge Glasser:
We represent the movant John Doe in the abovecaptioned matter. I am writing to advise Your Honor
that the Respondents have elected to terminate the
current standstill agreement in this matter effective
PDF Page 173
App. 115
November 17, 2010. Pursuant to the standstill
agreement, we have until November 24, 2010 to submit
a supplemental memorandum of law in support of our
application for relief, including an order directing the
Respondents to return or destroy all copies of the
sensitive and confidential documents in their
possession that were taken from our client without his
consent or knowledge and that relate to a sealed
criminal matter. I have spoken to AUSA Todd
Kaminsky and he has advised me that the government
also intends to file a submission in this matter by
November 24, 2010, setting forth its position that this
Court has the authority to order the return or
destruction of the documents and materials at issue.
Respectfully,
/s/Kelly A. Moore
Kelly A. Moore
cc: Richard Lerner, Esq.
Stam Stamoulis, Esq.
AUSA Todd Kaminsky
AUSA Peter Norling
DBI/66039901.1
PDF Page 174
App. 116
APPENDIX S
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
03cr833
[Dated November 17, 2010]
________________________________
UNITED STATES OF AMERICA , )
)
v.
)
)
MYRON GUSHLAK,
)
)
Defendant.
)
________________________________ )
U. S. Courthouse
Brooklyn, New York
November 17 , 2010
11:15 p.m.
TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE
NICHOLAS G. GARAUFIS
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Government:
LORETTA E. LYNCH, ESQ.
United States Attorney
By: DANIEL SPECTOR
PDF Page 175
App. 117
Assistant U.S. Attorney
271 Cadman Plaza East
Brooklyn, New York 11201
For the Defendant:
ALAN FUTERFAS, ESQ.
Also Present;
Charles Linehan,
Assistant District
Attorney, NY County
Court Reporter:
Burton H. Sulzer
225 Cadman Plaza East
Brooklyn, New York 11201
(718) 613-2481
Fax # (718) 613-2505
***
[p.2]
(Open court-case called-appearances noted.)
THE COURT: Sorry for the delay.
This is a sentencing proceeding for Myron L.
Gushlak. Mr. Gushlak, are you satisfied with the
assistance that your attorney has given you thus far in
this matter?
THE DEFENDANT: Yes , sir.
***
PDF Page 176
App. 118
[p.27]
***
THE COURT: The government offers three
grounds for concluding that the defendant has not
accepted. One is that it’s not warranted because of the
obstructive conduct, which we have already discussed,
and the second is that the Kealy e-mail in which he
stated that he has no criminal record and has never
had a run-in with the SEC constitutes a basis for
denying him acceptance of responsibility , and the third
is his involvement in the alleged German stock fraud.
So on the Kealy e-mail, could you just briefly
speak to that.
MR. SPECTOR: Certainly, your Honor.
THE COURT: Then I’ll hear briefly from the
other side -- briefly and briefly.
MR. SPECTOR: There are a number of
disturbing aspects to the Kealy e-mail.
First of all, the context in which it’s made in
which he not only says I have no criminal record but
attaches the dismissal order from the complaint in this
case is clearly intended to convey the false impression
that the charges in the case were dismissed.
***
PDF Page 177
App. 119
[p.28]
***
THE COURT: What about the argument that
pursuant to his cooperation agreement he was not to
disclose the circumstances of his cooperation?
MR. SPECTOR: He should have contacted his
attorney and brought that to our attention and we
could have dealt with it appropriately.
That doesn’t give him a license to lie ...
***
Certainly, I can understand no one wants to be
a witness in any case, particularly an organized crime
case, but at the same time, the timing of this e-mail
suggests that his
[p.29]
real motive, or at least a major component of his real
motive, was to avoid public disclosure of the truth, that
is his criminal conduct, because if people who deal with
him in his business know the truth about him, they are
obviously going to be less likely to deal with him.
***
[p.57]
***
THE COURT: Then there is also the issue of the
PDF Page 178
App. 120
[p.58]
amount of assets that’s available to pay a fine and for
restitution. Have you figured out whether restitution
can be ascertained as to the charges to which the
defendant pleaded guilty?
MR. SPECTOR: I believe it can.
Just so the court understands, there was
litigation about that in Appel. Our view then and now
is that Judge Gleeson incorrectly calculated restitution.
We’re prepared to address that issue, but our
view was, it wasn’t the best procedure, it sort of bogs
down what is a fairly bogged down proceeding by
adding that today when we can deal with it within 90
days permitted by the statute. So that’s our
application.
THE COURT: All right.
***
[p.68]
***
THE COURT: He could have put them into
Commonwealth or Fidelity and they increased in value
too, but what he did is, he put them in a trust for the
benefit of his children beyond the reach of himself to
pay any fine or provide any restitution for the crimes to
which he’s pleaded guilty,
[p.69]
that’s all I’m saying.
PDF Page 179
App. 121
This was a conscious choice to protect these
funds. He was just protecting the funds, he’s saying, for
the benefit of his children, but he was also protecting
the funds, in effect, to keep them out of the reach of the
court.
***
[p.87]
***
MR. SPECTOR: I appreciate that, Judge, thank
you. An analogy we often see where it does come into
play is, for example, a felon in possession case where
the defendant committed a murder somewhere else
that couldn’t be proven up or wasn’t proven up beyond
a reasonable doubt, but can be proven up by a
preponderance of the evidence at the
[p.88]
sentencing for the felon in possession.
This case shouldn’t be treated any differently
just because it’s a more complicated fact pattern. When
you looked at the facts as we discussed extensively this
morning, there are three witness statements who all
say the same thing, and that is the defendant
committed securities fraud.
When you asked the defense what they had to
counter that, their answer essentially was, well, he
hasn’t been charged in Germany, which really isn’t any
answer at all. So the German fraud by itself in our view
completely eviscerates the cooperation credit.
PDF Page 180
App. 122
But, as you know, that is not the only problem.
There is also the Kealy e-mail, which the court has
already discussed, and there is also something we have
not talked with today and that his posting repeatedly
on his Website the GlobalNet Company as an example
of a company he helped to take public.
We attached printouts from the Website in our
sentencing submission. That by itself is another fraud.
That is a fraud in the inducement because if clients
really knew the truth about GlobalNet, they would be
very unlikely to deal with the defendant.
The reason this is so important when you try to
evaluate the cooperation credit is, you can imagine
what would have happened if we had put him on the
witness stand in some
[p.89]
of those cases we contemplated and this came out on
cross. It would have been a complete disaster; he would
have been total think discredited as a witness, he
wouldn’t be usable to us as a witness and a person like
that, who does these things essentially behind the back
of the government for years, is not entitled to any
credit for cooperation.
***
The second is the fine. As the court’s noted
already, he put $50 million outside the reach of this
court or, as far as I can tell, any court. Because those
two avenues are not available a higher range of
PDF Page 181
App. 123
imprisonment should be imposed than might otherwise
have been.
***
PDF Page 182
App. 124
APPENDIX T
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
11-1957
[Filed May 18, 2012]
____________________________________________
UNITED STATES OF AMERICA,
)
Appellee,
)
)
—against—
)
)
MYRON L. GUSHLAK,
)
Defendant-Appellant )
____________________________________________ )
To Be Argued By:
DANIEL A. SPECTOR
On Appeal From The United States District Court
For The Eastern District of New York
BRIEF FOR THE UNITED STATES
LORETTA E. LYNCH,
United States Attorney,
Eastern District of New
York.
PDF Page 183
App. 125
AMY BUSA,
Daniel A. Spector,
Assistant United States Attorneys,
Of Counsel.
***
[pp.9-10]
***
IV.
Gushlak’s Breach
Agreement
Of
His
Cooperation
While Gushlak provided the assistance to law
enforcement authorities noted above, he also breached
his obligations under the cooperation agreement in
numerous ways. After learning of Gushlak’s conduct,
the government summoned Gushlak to a proffer
session in December 2009 and confronted him with
evidence of his breach. Immediately after the proffer
session, the government sought to revoke Gushlak’s
bail. The district court conducted a bail revocation
hearing and denied the government’s application but
ordered the government to conduct a full investigation
and bring all relevant facts to the court’s attention at
sentencing. (JA 244, 294).
A. Gushlak’s Abuse Of The Secrecy Of His
Cooperation To Deceive Business Partners
Gushlak exploited the fact that his case remained
sealed by lying to business associates concerning his
criminal past. (JA 167).First , in an email exchange in
2007 with Bob Kealy, the case CEO of a company with
whom Gushlak was doing business, Kealy questioned
Gushlak concerning his criminal past. (JA 167-68). In
PDF Page 184
App. 126
response, Gushlak attached a copy of the dismissal of
the Hy-Tech Complaint and continued as follows:
I have no criminal record in any country period.
Also please note that I have no SEC violations
nor have I ever crossed paths with the SEC ever.
Please have me removed from the report before
it goes anywhere and confirm this to me in
writing tomorrow .
***
In addition, a review of the website for Gushlak’s
company, Blue Water Partners, in December 2009
revealed that Gushlak listed Global Net (the stock
fraud for which he pled guilty in this case) as an
example of companies that Gushlak had “taken public
over the years.” (JA 233-37).
B. Allegations Of A German Stock Fraud
In approximately 2008, the government learned
that Gushlak was under investigation in Germany for
a stock fraud involving three companies traded in
Germany: Star Energy, Star Gold
***
PDF Page 185
App. 127
APPENDIX U
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
PN: EK: TK
F. #1998R01996
271 Cadman Plaza East
Brooklyn, New York 11201
November 23, 2010
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Judge
Eastern District of New York
225 Cadman Plaza East
Brooklyn, NY 11201
Re:
United States v. Felix Sater
Criminal Docket No. 98 CR 1101 (ILG)
Dear Judge Glasser:
The government writes with respect to whether the
Court has the authority to order Frederick Oberlander,
Esq. to return the sealed documents in his possession
from the above-captioned case and to enjoin him from
disseminating those documents. The Court does have
such authority. Moreover, such an order is necessary to
prevent Mr. Oberlander from undermining the Court’s
orders, to protect Felix Sater and to prevent the abuse
of the sealing process in this district.
PDF Page 186
App. 128
I. Legal Discussion
A. The Court Has Authority Over Mr. Oberlander
Pursuant to the All Writs Act
The All Writs Act provides that “[t]he Supreme
Court and all courts established by Act of Congress
may issue all writs necessary or appropriate in aid of
their respective jurisdictions and agreeable to the
usages and principles of law.” 28 U.S.C. § 1651(a).
Under the Act, a federal court possesses the power to
“issue such commands . . . as may be necessary or
appropriate to effectuate and prevent the frustration of
orders it has previously issued in its exercise of
jurisdiction otherwise obtained.” Pennsylvania Bureau
of Corr. v. U.S. Marshals Serv., 474 U.S. 34, 40 (1985)
(quoting United States v. New York Telephone Co., 434
U.S. 159, 172 (1977)). The Act is to be used only when
necessary and when there is no applicable statutory
***
PDF Page 187
App. 129
APPENDIX V
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
MM: EK: TK
F. #1998R01996
271 Cadman Plaza East
Brooklyn, New York 11201
March 17, 2011
TO BE FILED UNDER SEAL
The Honorable I. Leo Glasser
United States District Judge
Eastern District of New York
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
United States v. Felix Sater
Criminal Docket No. 98 CR 1101 (ILG)
Dear Judge Glasser:
The government writes in response to Mr. Lerner’s
letter, dated February 3, 2011, demanding that the
Court “immediately docket all events that have
occurred in this case, from its inception.” For the
reasons stated below, the government believes that
specific docket entries and documents that do not
directly reference the defendant’s cooperation may be
unsealed at this time. However, those documents in
which the defendant’s cooperation is made plain should
PDF Page 188
App. 130
remain sealed in order to ensure the defendant’s safety,
among other reasons. The government will submit a
separate, sealed letter, available to the defendant but
not to the intervenors or the public, detailing each
docket entry and related document and making specific
recommendations as to each.1
***
Analysis
In essence, the Second Circuit’s cases concerning
sealing require the Court to balance the public’s
qualified First Amendment and common law right to
judicial documents against other compelling factors.
Here, the compelling factors at issue are the safety of
the defendant and his family and law enforcement’s
interest in procuring cooperation from other defendants
now and in the future. That the government revealed
the defendant’s criminal conviction in the March 2,
2000 press release necessarily influences that
balancing test. The government has no information
that any person has sought to harm the defendant or
his family since the press release was issued, nor that
the government’s ability to secure cooperation has been
1
Although an appeal of this Court’s permanent injunction with
respect to the Presentence Report (the “PSR”) is currently pending
before the Second Circuit Court of Appeals, this Court nevertheless
has the jurisdiction to issue rulings with respect to sealing that do
not concern the PSR. “[T]he filing of a notice of appeal only divests
the district court of jurisdiction respecting the questions raised and
decided in the order that is on appeal.” New York State Nat. Org.
for Women v. Terry, 886 F. 2d 1339, 1350 (2d Cir. 1989). If an
appeal is taken from a judgment that “does not determine the
entire action,” the district court “may proceed with those matters
not involved in the appeal.” Id.
PDF Page 189
App. 131
negatively affected. Therefore, there is not a compelling
need for the continued sealing of those docket entries
and documents that reveal no more information than
was disclosed in the press release. Thus, the
government advocates the unsealing of those docket
entries and documents that merely reflect the fact that
Mr. Sater was a defendant in the Eastern District of
New York who pleaded guilty to participating in a
RICO conspiracy and was sentenced for the commission
of that offense. However, those docket entries and
documents that disclose the fact that the defendant
cooperated with law enforcement authorities should
remain under seal.
I. Documents and Entries to be Unsealed
Accordingly, the following entries and documents
should be unsealed: 1) the docket itself should be
unsealed as a necessary prerequisite to the disclosure
of all other items listed below; 2) the defendant’s name
on the docket sheet should be changed from John Doe
to Felix Sater; 3) the fact of the defendant’s conviction,
including the date of his guilty plea, the crime to which
he pleaded guilty and the criminal information should
all be unsealed. These entries and items do not
mention the defendant’s cooperation and reveal little
more than that which was previously revealed in the
press release. In addition, the public docket should
reflect the date of the defendant’s sentencing and the
sentence issued by the Court. As will be discussed
below, while several aspects of the defendant’s
sentencing should remain sealed, the public’s
understanding of how a particular defendant is
sentenced is “important to the proper functioning of . . .
judicial proceedings” and the public’s understanding of
PDF Page 190
App. 132
whether justice was properly meted out. See United
States v. Alcantara, 369 F.3d 189, 198 (2d Cir. 2005)
Also, while there is little support for the proposition
that scheduling orders enjoy a presumption of access
under the First Amendment, see United States v.
Sattar, 471 F. Supp.2d 380, 389-90 (S.D.N.Y. 2006), the
government does not object in this case to the
unsealing of those entries and documents that merely
reflect the scheduling of the case and other ministerial
requests and orders made and issued by the parties
and the Court.
***
PDF Page 191
App. 133
APPENDIX W
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98-CR-1101
[Dated April 1, 2011]
________________________________
UNITED STATES OF AMERICA )
)
-against)
)
JOHN DOE,
)
)
DEFENDANT,
)
________________________________ )
U.S. Courthouse
Brooklyn, New York
April 1, 2011
11:00 o’clock a.m.
TRANSCRIPT OF HEARING
BEFORE THE HONORABLE BRIAN M. COGAN
UNITED STATES DISTRICT JUDGE
APPEARANCES:
For the Government:
LORETTA LYNCH
United States Attorney
147 Pierrepont Street
Brooklyn, New York 11201
PDF Page 192
App. 134
BY: TODD KAMINSKY
Assistant U.S. Attorney
For John Doe:
MICHAEL BEYS, ESQ.
NADER MOBARGHA, ESQ.
For Mr. Roe:
RICHARD LERNER, ESQ.
DAVID SCHULZ, ESQ.
Court Reporter:
SHELDON SILVERMAN
Official Court Reporter
225 Cadman Plaza East
Brooklyn, New York 11201
(718) 613-2537
***
[p.11]
***
MR. KAMINSKY: Very briefly. The Second
Circuit mandate does specifically entrust your Honor
with enforcing the district court’s orders. One such
order that still has not been complied with -- it is
baffling -- they still maintain the very orders that are
subject to the injunction and the TRO. The case that
was handed up to your Honor earlier before by Mr.
Beys, the in re contempt proceedings of Gerald
Crawford, specifically state that a litigant does not
have the ability to say “I’m going to violate the order,
hold on to this stuff and wait for the circuit to prove I’m
right.” He must hand over and/or place those
documents in some type of transitory place and wait for
PDF Page 193
App. 135
the circuit to rule, but he still has them, in direct
contravention of the court’s order saying give them
back, give them to the U.S. Attorney’s Office. No one
gave anything.
THE COURT: The directive to give them back is
in Judge Glasser’s order, not the circuit, right?
MR. KAMINSKY: Right.
MR. LERNER: I would like to object to that
statement, your Honor. There is no order directing the
destruction of electronic copies or return of photocopies.
[p.12]
The original that was provided to Mr. Roe by Mr.
Bernstein, lawfully, at that, was handed up to court. It
is in the court’s possession. It was stated at the
hearings that the original has been returned.
Therefore, there is no further original to be returned
and there are only electronic copies.
THE COURT: Mr. Kaminsky, quote for me the
portion of the order upon which you are relying. Direct
me to that.
MR. KAMINSKY: The Second Circuit mandate
of yours or Judge Glasser’s order to them?
THE COURT: I assume you will agree with me
the Second Circuit’s order in and of itself does not
require the return of either originals or copies, right? It
incorporates Judge Glasser’s orders?
MR. KAMINSKY: That’s correct. It says you
have the limited mandate of implementing and
overseeing compliance with our orders and the previous
PDF Page 194
App. 136
orders entered by Judge Glasser. That’s a quote. One of
those orders, your Honor, because I’m currently
immersed in drafting the appeal, I have two hearings
singed into my head and at the end of the July 20th
proceeding, Mr. Doe’s counsel at the time, Ms. Moore,
says specifically to Judge Glasser we would like you to
include in the TRO copies of the documents because
although Mr. Roe is telling you he’s given them back to
you, what good is that if he has the copies? The judge
said I agree. Mr. Learner’s response is are you issuing
a further
[p.13]
TRO? The judge says I am.
THE COURT: I need to see that. I’m sure you’re
not misrepresenting that but I need to see it.
MR. LERNER: There’s no specific directive by
the court -THE COURT: I’ll look at it and then I’ll see.
MR. BEYS: If the government doesn’t submit it,
we’ll gladly submit it to your Honor.
THE COURT: Does anybody have it here?
MR. BEYS: We don’t have the transcript here.
We have a joint appendix.
MR. KAMINSKY: I point you to, beginning on
line 4 of page 706 of the transcript.
THE COURT: Mr. Learner, you want to respond
to what the transcript says?
MR. LERNER: May I take my copy?
PDF Page 195
App. 137
THE COURT: Sure. That’s our copy but you can
look at ours or we can trade, whichever you prefer.
(Pause.)
MR. LERNER: Page 706 of the joint appendix?
THE COURT: Correct, line 4.
(Pause.)
MR. LERNER: There’s no specific directive by
Judge Glasser to destroy the electronic copies of the
document and there’s been no dissemination of the
document. Therefore,
[p.14]
there’s been no violation of any TRO and we would
request further briefing before you wish to entertain
this issue.
THE COURT: No, it’s absolutely clear on its face
Judge Glasser intended you to destroy electronic copies
and to return any photocopies. If that is not done by the
end of Monday, I will hold your client in contempt.
***
PDF Page 196
App. 138
APPENDIX X
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
150 East 42nd Street, New York, NY 10017-5639
Tel: 212.490.3000 Fax: 212.490.3038
[Letterhead]
April 4, 2011
Filed in Camera but Requesting Unsealing and
Docketing
By Facsimile – 718-613-2236
The Hon. Brian M. Cogan
U.S. District Court for the Eastern District
of New York
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
Roe v. US v. Doe
2d Cir. Case No.: R o e v . U S v . D o e ,
10-2905 & 11-479-cr
EDNY Case No.: US v. Doe, 98-CR-1101
(ILG)
Our File No.:
07765.00155
Application for Reconsideration of
Affirmative Injunction or Stay Pending
Submission of Application for Stay to the
Second Circuit
Dear Judge Cogan:
PDF Page 197
App. 139
We represent attorney “Richard Roe.” We
respectfully request reconsideration of the affirmative
order you issued on April 1, 2011, directing Mr. Roe to
delete from the hard drive of his computer four
“documents” that were the subject of previous hearings
before Judge Glasser and to return any photocopies of
the documents in his possession. Alternatively, we
request a stay of the injunction pending submission of
an application for a stay to the Court of Appeals. The
request for an injunction was raised by the U.S.
Attorney’s office without advance notice and without
briefing, and we believe the April 1st injunction was
improvidently granted for the following reasons:
1. Mr. Kaminsky unexpectedly requested the
injunction under this Court’s remand authority to
oversee compliance with “orders previously entered
by Judge Glasser” (JA 1248),1 contending Judge
Glasser had orally ordered Mr. Roe to give all copies
of the documents to the U.S. Attorney at a hearing
on July 20,2010. As recounted by Mr. Kaminsky:
[A]t the end of the July 20th proceeding, Mr.
Doe’s counsel at that time, Ms. Moore, says
specifically to Judge Glasser we would like
you to include in the TRO copies of the
documents because although Mr. Roe is
telling you he’s given them back to you, what
good is that if he has copies? The judge says
I agree; Mr. Lerner’s response is, are you
issuing a further TRO? The judge says I am.
1
“JA” refers to the Joint Appendix for Mr. Roe’s pending appeal,
copy of which is in your Honor’s possession.
PDF Page 198
App. 140
(April 1, 2011 Hearing Tr. at 12-13). That incomplete
description, however, was misleading. The exchange
paraphrased by Mr. Kaminsky followed an inquiry by
Judge Glasser as to whether the “whole proceeding was
moot because the documents have been surrendered?”
(JA 706:4-7.) Ms. Moore explained that it was not,
because only the originals had been returned, and
expressed the concern that Mr. Roe should not be
allowed to give just the originals back while remaining
“free to disseminating [sic] copies.” (JA 706:8-17.)
Judge Glasser immediately responded to her specific
concern about dissemination of copies by saying “I
think, I indicated [Mr. Roe] should not do that (JA
706:18-19; emphasis added). He continued: “I think it
was in the form of an order and that order, I believe, if
I have not done so, I am doing it now and if you want it
in writing until I resolve this issue.” (JA 706:19-22.)
At this point Mr. Lerner asked “You are issuing
another TRO?” and Judge Glasser responded, “Yes, I
am. I’m Issuing a further TRO for the reasons that
I have indicated.” (JA 706:23 to 707:1; emphasis
added).
In context, the “further TRO” Judge Glasser said he
intended to issue was the extension of the existing TRO
beyond the July 20 hearing. Leaving no doubt that this
“further order” was an extension of the existing TRO,
Judge Glasser concluded the exchange by stating: “The
TRO is continued for another ten days,” (JA 706:25 to
JA 707:15; emphasis added).
This Court’s injunction of April 1st overlooked that
there was only one “TRO” ever issued by Judge
Glasser, which did not require the destruction of all
copies of the documents, and his “further order” of July
PDF Page 199
App. 141
20 simply extended its term. The TRO issued by Judge
Glasser appears at page JA 5, and it provides:
“ORDERED, that pending said hearing, Messrs.
Kriss, Ejekam and [Roe] and their
representatives, employees and agents, and all
other persons acting in concert with them and
all other persons who have obtained the Sealed
and Confidential Materials, are restrained and
enjoined from disseminating the Sealed and
Confidential Materials or information therein
further[.]”
This Court misapprehended that there a specific order
from Judge Glasser for Mr. Roe to return all hard
copies of the documents and destroy all electronic
copies. There was not. The TRO was only intended to
preserve the status quo because that’s all a TRO can do
and Judge Glasser understood that a TRO could not
properly have ordered the destruction of all copies of
the documents because that was a part of the final
relief sought in the proceeding. (See JA 4)
(“ORDERED, that Jody Kriss, Michael Ejekam and
[Roe] show cause . . . why an order should not be issued
requiring [them] and any other persons who have
acquired the Sealed and Confidential Materials to
immediately return the Sealed and Confidential
Materials to Mr. [Roe].”) This was the ultimate relief
sought in the order to show cause, and no order was
ever issued granting this prayer for relief.
2. This Court’s April 1st order was also entered without
the benefit of the subsequent history in this proceeding,
which confirms that the July 20 extension of the TRO
was not an order to destroy all copies of the documents
in Mr. Roe’s possession. In a Stipulated Order entered
PDF Page 200
App. 142
by Judge Glasser on August 12, 2010 “[p]ending a
Settlement or issuance of [a further order]”, Mr. Roe
agreed not to “disseminate the Documents or
information obtained therefrom, except as may be
required for the purposes of [his] pending appeal . . . .”
(JA 717, ¶1c.) Plainly, as of August 12 Judge Glasser
understood that Mr. Roe retained copies and that he
would use them in arguing his appeal, and Judge
Glasser expressed no intent that the copies held by Mr.
Roe must be destroyed.
Again, after Mr. Roe withdrew his consent to the
standstill agreement in the stipulated order, and asked
Judge Glasser to proceed and issue a final order on his
right to use the documents, the U.S. Attorney on
November 23, 2010 specifically requested the court at
that point “to order Frederick Oberlander, Esq., to
return the sealed documents in his possession . . .”
(JA-728.) This request makes no sense if Mr. Roe was
already under order to return or destroy all copies of
the documents.
Mr. Doe’s own counsel had just written a similar letter
to Judge Glasser on November 16, 2010, acknowledging
that under the Stipulated Order “we have until
November 24, 2010 to submit a supplemental
memorandum of law in support of our application for
relief, including an order directing the Respondents to
return or destroy all copies of the sensitive and
confidential documents in their possessions that were
taken from our client without his consent and
knowledge and that relate to a sealed criminal matter.”
(JA-727; emphasis added). Thus we see that Doe also
understood that Judge Glasser had not ordered the
destruction of the documents, and was now seeking
PDF Page 201
App. 143
such an order, Judge Glasser never issued any such
subsequent order.
Contrary to the unexpected about-face and
surprise posture they took last Friday, both the
government and Mr. Doe have previously
acknowledged that Mr. Roe was not under any
order to return or destroy all copies of the
documents at issue, facts not presented to the
court last Friday.
3. Due to the manner in which the issue was raised,
the court was also not presented with a number of legal
reasons why Judge Glasser’s oral order of July 20
should not be enforced under the limited remand
jurisdiction granted by the Second Circuit, even if that
order had actually directed the destruction of all copies
of the documents. The order was not an order. It was
invalid. We are not here suggesting that it was
appealable (or not), or that Judge Glasser abused his
discretion in issuing it. We are instead saying it was
entirely dictum and thus not enforceable. The remand
cannot be read as requiring your honor to enforce
non-existent or unenforceable orders.
Oral, unwritten orders like Judge Glasser’s do not
comport with FRCP 52 (which requires express
findings of fact and conclusions of law when a court
issues an order) and FRCP 65. Oral orders violate the
form and content required by Rule 65, which is
“properly met by a written order,” document lacking
here.” Garcia v. Yonkers Sch. Dist., 561 F.3d 97, 104-06
(2d Cir. 2009). Here, Judge Glasser never issued a
written order directing the return or destruction of any
further documents. Moreover, the only written order
ever issued by Judge Glasser is the original TRO,
PDF Page 202
App. 144
which was extended several times but is no longer in
force. (Although Mr. Roe has voluntarily continued to
behave as if the TRO were in force.)
Moreover, orders must have findings and all of
the FRCP 65 requirements must be selfcontained within the four corners of the
document. “For the reasons stated” cannot
suffice as there are no reasons stated in that
transcript and if there were it would not be clear
which ones Judge Glasser was referring to.
Indeed it is precisely for this reason, to avoid
argument on what is and isn’t a valid order, that
FRCP 65 requires a writing, There is no wiggle
room. As the Garcia court, which adopted the
clear reasoning of Bates v. Johnson, 901 F.2d
1424 (7th Cir. 1990) (“Oral statements are not
injunctions”), stated: “For many of the reasons
discussed supra Part II(B)(1), however, we
conclude that the District Court’s statements at
the September 15, 2004 hearing did not
constitute a temporary restraining order because
they did not detail the acts restrained or required
and were not reduced to a written order.”
(Emphasis added).
***
We regret the facts and law were not properly laid
out for the Court before it ordered the destruction of all
copies of the documents in Roe’s possession, but we
were not aware in advance that this issue would be
raised at the April 1st hearing. The full record compels
reconsideration and we urgently ask that the April 1st
injunction be withdrawn so it is not necessary to file a
PDF Page 203
App. 145
further appeal to preserve Mr. Roe’s position on the
issues already before the Second Circuit.
The above should dispel any implication that Roe
has not scrupulously abided by the orders issued by
Judge Glasser. Roe has not simply disregarded
orders, as counsel repeatedly suggest.2 To the
contrary, he has always sought to abide by Judge
Glasser’s TRO, notwithstanding his belief that it is a
transparently invalid unconstitutional prior restraint
on his First Amendment rights. He will voluntarily
continue to abide by the non-dissemination directive of
the TRO during the pendency of the appeal, so there is
no risk that if this Court rescinds its injunction to
delete the documents from Mr. Roe’s computer that
they will then be freely disseminated. While the appeal
is pending, Mr. Roe will continue to seek guidance from
2
For example, in his letter requesting summary contempt, Doe’s
counsel accuses Roe of defying a May 14, 2010 order of Judge
Buchwald, which he knows full well was superseded by an
abeyance order a few days later, and he omitted any mention of
that abeyance from his letter to this court demanding summary
contempt findings.
Additionally, in the government’s argument to the court on April
1st, Mr. Kaminsky stated that Roe is in violation of some court
order, “[H]e still has them in direct contravention of the court’s
order saying give them back, give them to the U.S. Attorney’s
office.” The Court will note nothing on July 20 refers to the U.S.
Attorney’s office, and the documents themselves did not come from
that office, but from Bayrock. Please note that the order to show
cause before Judge Glasser sought the return of the documents at
issue to Mr. Doe, not to the government, and did not seek their
destruction. (See JA 4). The government never moved for recovery
of the documents, and thus lacks standing to assert that they
should be returned to it, much less destroyed.
PDF Page 204
App. 146
this Court on what he may do with the information in
the disputed documents.
Accordingly, we respectfully request this Court:
A. Reconsider its oral order of April 1, 2010, and
withdraw its injunction that Mr. Roe delete the
documents at issue from the “c” drive of his
desktop computer by no later than April 4, 2011;
B. Failing that, we request a stay of the injunction
for two days, to afford the Second Circuit an
opportunity to consider a motion to stay this
Court’s order, and
C. Further request that this letter and the
proceeding of April 1, 2011 be unsealed and that
a public docket of these proceedings be
maintained.
Respectfully submitted,
WILSON, ELSER, MOSKOWITZ, EDELMAN &
DICKER LLP
/s/Richard E. Lerner
Richard E. Lerner
cc:
Via E-Mail:
Michael Beys and Nader Mobargha
– Counsel for Doe
Todd Kaminsky – US Attorney’s Office
David Schulz – Counsel for Roe
“Richard Roe”
PDF Page 205
App. 147
APPENDIX Y
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 Cr. 1101 (ILG)
[Filed April 4, 2011]
______________________________________
UNITED STATES OF AMERICA,
)
)
Plaintiff,
)
- against)
)
FELIX SATER,
)
)
Defendant. )
______________________________________ )
SEALED ORDER
The Court has reviewed Richard Roe’s motion for
reconsideration. It is denied. It was plainly the intent
of Judge Glasser to have those documents destroyed or
returned. There is no prejudice to Roe because in the
event he prevails in having the sealing order
overturned in the Circuit, he will again have access to
the documents.
SO ORDERED.
PDF Page 206
App. 148
/s/ Hon. Brian M. Cogan
U.S.D.J.
Dated:
Brooklyn, New York
April 4, 2011
PDF Page 207
App. 149
APPENDIX Z
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Cr. No. 98-1101 (ILG)
[Filed January 26, 2012]
______________________________________
UNITED STATES OF AMERICA,
)
)
- against)
)
JOHN DOE,
)
)
Defendant. )
______________________________________ )
SCHEDULING ORDER
Upon the January 26, 2012 application of
LORETTA E. LYNCH, United States Attorney for the
Eastern District of New York, by Assistant United
States Attorneys Todd Kaminsky and Evan M. Norris,
and full consideration having been given to this matter,
IT IS HEREBY ORDERED that, in light of the
government’s withdrawal of its March 17, 2011 motion
to unseal and the reasons provided therefor, the only
issue ripe for decision following the remand of this case
from the United States Court of Appeals for the Second
Circuit is whether this Court should permanently
enjoin non-party Richard Roe from disseminating the
following sealed documents in his possession relating
to the defendant John Doe: (a) two proffer agreements,
PDF Page 208
App. 150
(b) a cooperation agreement, (c) a criminal complaint
and (d) a criminal information;
IT IS HEREBY FURTHER ORDERED that the
parties file briefs setting forth their respective
positions with regard to the matter referred to above
pursuant to the following schedule:
1. The government shall file its brief on or before
February 7, 2012;
2. Doe and Roe shall file their responsive briefs on
or before February 21, 2012;
3. The government shall file any reply on or before
February 28, 2012; and
IT IS HEREBY FURTHER ORDERED that the
Court will hold oral argument on March 6 9th, 2012 at
11:00 AM.
SO ORDERED.
Dated:
Brooklyn, New York
January 26, 2012
s/ I Leo Glasser
____________________________________
THE HONORABLE I. LEO GLASSER
UNITED STATES DISTRICT JUDGE
PDF Page 209
App. 151
APPENDIX AA
[SEAL]
U.S. Department of Justice
United States Attorney
Eastern District of New York
EK: EMN/TK
F. #1998R01996
271 Cadman Plaza East
Brooklyn, New York 11201
January 26, 2012
By Hand
Submitted Under Seal and
Ex Parte as to Richard Roe
The Honorable I. Leo Glasser
United States District Judge
Eastern District of New York
225 Cadman Plaza East
Brooklyn, New York 11201
Re:
United States v. John Doe
Criminal Docket No. 98-1101 (ILG)
Dear Judge Glasser:
The government writes to respectfully request that
the Court issue the enclosed proposed order setting
forth a briefing schedule to resolve the matter that
remains to be decided in the above-captioned case
following the remand from the Second Circuit Court of
Appeals.
PDF Page 210
App. 152
I. Background
A. John Doe’s Conviction and Cooperation
On December 10, 1998, John Doe pleaded guilty,
pursuant to a cooperation agreement, to an information
charging him with participating in a racketeering
enterprise, in violation of 18 U.S.C. § 1962. The RICO
predicate acts consisted of securities fraud in
connection with offerings and after-market
manipulation of the securities of multiple entities and
the unlawful laundering of the proceeds of these
schemes.1
***
1
Sections A through G of this Background section are largely
taken from the government’s April 11, 2011 brief filed with the
Second Circuit. For ease of reading, the citations included therein
to the parties’ joint appendix and the government’s appendix are
omitted.
PDF Page 211
App. 153
APPENDIX AB
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101 (ILG)
[Filed February 2, 2012]
______________________________________
UNITED STATES OF AMERICA,
)
)
Plaintiff,
)
)
- against)
)
JOHN DOE,
)
)
Defendant. )
______________________________________ )
ORDER
GLASSER, United States District Judge:
In a letter dated January 26th, 2012, the
government moved this Court for an Order that would
direct the designated parties to brief the issue
regarding whether Richard Roe should be permanently
enjoined from publicly disseminating the specifically
identified sealed documents in his possession. The
motion was granted and an Order styled “Scheduling
Order” was issued on that date. That Order is not
sealed. Oral argument is to be held on March 9th, 2012
at 11 a.m.
PDF Page 212
App. 154
The letter motion in support of that requested
Order was “Submitted under Seal.” The Court
approved that submission, fully aware of the public’s
qualified First Amendment and common law right of
access and aware also of the limitation upon those
rights warranted by the factors discussed in United
States v. Amodeo, 44 F.3d 141, 147 (2d Cir. 1995).
Among those factors were the need to “preserve higher
values,” including the integrity of an ongoing
investigation and the safety of John Doe, which were
duly considered and found to weigh more heavily in the
balance.
A letter from Richard Roe, transmitted to the Court
by facsimile and dated January 31, 2012, “demanding”
the unsealing of the government’s January 26th letter
is denied. He also requests that the Court expand the
breadth of the issues to be considered at oral argument,
which is also denied. The discrete issue to be addressed
at oral argument is whether Richard Roe violated an
Order of this Court by publishing the specifically
identified documents in his possession and if he has,
should he be permanently enjoined from disseminating
them. The issue sought to be added will be scheduled
and heard in due course.
SO ORDERED.
Dated:
Brooklyn, New York
February 2, 2012
s/ILG
____________________________________
I. Leo Glasser
PDF Page 213
App. 155
APPENDIX AC
[SEAL]
U.S. Department of Justice
Office of the Solicitor General
Washington, D.C. 20530
March 19, 2013
Honorable William K. Suter
Clerk
Supreme Court of the United States
Washington, D.C. 20543
Re:
Roe v. United States, No. 12-112
(scheduled for conference of March 22, 2013)
Dear Mr. Suter:
Yesterday afternoon, this office learned that the
district court on March 13, 2013, entered a public order
and a sealed opinion in this case. The district court’s
public order is attached to this letter. The United
States has prepared a motion to file under seal the
district court’s sealed opinion and is filing that motion
concurrently with this letter.
Sincerely,
Donald B. Verrilli, Jr.
Solicitor General
PDF Page 214
App. 156
cc: See Attached Service List
SERVICE LIST: 12-112
Richard E. Lerner
Attorney at Law
255 West 36th Street
New York, NY 10018
Joshua D. Liston
Beys, Stein & Mobargha LLP
405 Lexington Ave., 7th Floor
New York, NY 10174
***
[Attachment Order of the United States Eastern
District of New York in 12 MC 150 (ILG), Filed
March 13, 2013 already reproduced in this Appendix]
PDF Page 215
App. 157
APPENDIX AD
From: Todd.Kaminsky@usdoj.gov
To: fred55@aol.com; richardlerner@msn.com
CC: Elizabeth.Kramer@usdoj.gov
Subject: Sealed Document
Date: Thu, 28 Mar 2013 00:40:30 +0000
Dear Mr. Lerner and Mr. Oberlander:
During a telephone call with Mr. Oberlander, I was
informed that during the litigation over your petition
for certiorari, the Solicitor General’s Office
inadvertently sent you a sealed, ex parte document
issued by The Honorable I. Leo Glasser on March 13,
2013. As discussed, this document was sent to you in
error and was not intended to be viewed by you, as Mr.
Oberlander readily conceded that he understood during
the telephone call. We request that you return the
document, and any copies thereof, to the United States
Attorney’s Office for the Eastern District of New York
(attn: Todd Kaminsky) as soon as possible.
The document at issue and the information contained
therein are subject to a valid sealing order, as stated on
the face of the document. We remind you of the Second
Circuit’s order, issued on February 14, 2011, stating
that you are “enjoined from publicly distributing and
revealing in any way, to any person, or in any court,
proceeding or forum . . . any documents or contents
thereof subject to sealing orders in Docket No.
10-2905-cr or in any related proceedings before the
District Court for the Eastern District of New
York . . . .”
PDF Page 216
App. 158
We appreciate your attention to our request.
Todd Kaminsky
Assistant United States Attorney
Eastern District of New York
271 Cadman Plaza East
Brooklyn, New York 11201
P: (718) 254-6367
F: (718) 254-6669
PDF Page 217
App. 159
APPENDIX AE
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
Index No. __________________
_____________________________
SALVATORE LAURIA,
)
)
Plaintiff,
)
)
-against)
)
JODY KRISS,
)
)
Defendant.
)
_____________________________ )
COMPLAINT
Plaintiff Salvatore Lauria (“Lauria”) by and through
his attorneys, Beys Stein Mobargha & Berland LLP, for
his Complaint against Defendant Jody Kriss, alleges as
follows:
PRELIMINARY STATEMENT
1. This case is about a billion-dollar shakedown by
real estate developer Jody Kriss (“Kriss”), who made
millions of dollars as consigliere for the Russian mob.
Like Tom Hagen in “The Godfather,” Kriss and his
father, attorney Ronald Kriss, were the “front men” for
the Bayrock Group (“Bayrock”), a real estate
development company, owned and run by people Kriss
himself claims were mobsters. Kriss was the Chief
PDF Page 218
App. 160
Financial Officer (“CPO”) of Bayrock and his father
was the outside general counsel for what Kriss claims
was a mob outfit. In fact, his co-workers nicknamed
Kriss “VOR-TON,” a word play on “Wharton,” the
school he attended, and the Russian “vor-in-law”
(“thief-in-law,” as Russian mobsters are known),
because – as he used to brag – Kriss could steal more
using his Wharton degree than 100 gangsters
combined. Yet ultimately, because Kriss was
unsatisfied with the millions he made as Bayrock’s
front man, he
***
paragraph, 165-page complaint, and in both instances
only fleetingly. The first mention of Lauria’s name was
merely to state that he and others were involved with,
and pleaded guilty to, a Russian and Italian stock
brokerage “pump and dump” scheme prior to joining
Bayrock, a now 20-year old crime to which Lauria
already had pleaded guilty. The second mention of
Lauria’s name was the spurious allegation that he may
or may not have received kickbacks in connection with
Mafia investments at Bayrock. That is it. Nevertheless,
Kriss named him as a defendant in the $100 million
RICO action. The real purpose of naming Lauria was to
identify Lauria as an informant for the federal
government, to dredge up his past and expose him to
danger, so that the prestigious law firms and deeppocketed defendants would pay to get out of the case.
It was also payback for the $1.5 million commission
Lauria received in 2007.
35.
Thus, by illegally gathering and illegally
disseminating sealed confidential information, Kriss
had set in motion what would prove to be a persistent
PDF Page 219
App. 161
pattern of conduct, aimed at emotionally, mentally,
physically, and financially harming Lauria.
The Second Frivolous Action concerns crimes
which Kriss and Ronald Kriss are guilty of
36.
Yet, the real irony in the Second Frivolous
complaint is that Kriss accuses Lauria and others of
crimes that Jody Kriss and his father Ronald Kriss, the
outside general counsel of Bayrock, are themselves
guilty of committing. The Second Frivolous Action
epitomizes the age-old adage of the pot calling the
kettle black.
37.
First, the complaint alleges, among other
things, that “Bayrock is substantially and covertly mob
owned and operated .... ” Kriss accuses Bayrock of
covering up the past of its convicted employees, and
asserts that no investor would partner with Bayrock
for any venture if this information were revealed.
However, simply by virtue of his positions as CFO,
COO, Director of Finance, and self-proclaimed cofounder of Bayrock, Kriss was the very name and face
of Bayrock. He was the front for Lauria and other
Bayrock employees, hiding their criminal histories and
ties to organized crime from Bayrock’s unsuspecting
investors and banks. And his father, Ronald Kriss,
Bayrock’s counsel, hatched, legally blessed, and
employed this hide-and-seek scheme. Indeed, both
Kriss and his father were well aware of what was
transpiring in the halls of Bayrock’s offices and the
aisles of the private jets they used to travel to Turkey
and Russia to expand their network of wealthy
criminals. They knew exactly who worked at Bayrock.
That was why they were there in the first place.
PDF Page 220
App. 162
38.
Second, in the complaint, Kriss accuses
Bayrock of filing “false condominium offering
documents.” However, it was Kriss who signed these
documents as CFO on behalf of Bayrock. Kriss
conveniently omits this crucial fact from his complaint.
39.
Third, Kriss claims in the complaint that one
employee took from Bayrock $8,000,000; another took
$4,000,000, and yet another took $15,000,000. Without
any explanation, he claims that the money
simultaneously came from “crime” and from Bayrock.
Again, conspicuously absent from the complaint is that
he was the Director of Finance and the CFO of
Bayrock. As such, he was in charge of the money that
entered and left Bayrock’s coffers. Consequently, it was
Kriss who was most familiar with Bayrock’s alleged
“criminal” financial sources, if any. And it was Kriss
who would have approved, or at least played a part in,
any improper distribution of revenues to Bayrock’s
employees.
40.
Fourth, Kriss claims that Bayrock – a
company he claims he founded and financially
managed – paid one of its employees a “million dollars
a year in unreported income” and “intentionally
understated [its] partnership taxable income, by at
least $50,000,000 to as much as $100,000,000.” Once
again, if that was the case, it was Kriss – the Director
of Finance and the CFO – who created and approved
the transaction and examined Bayrock’s tax returns
***
PDF Page 221
App. 163
Kriss and his attorneys intentionally put Lauria’s
life in danger
47.
At one point in the midst of their frivolous
litigation campaign, Kriss and his rogue lawyers
decided to bypass the courts and the press and went
straight to the court of organized crime. They did the
unthinkable: they disclosed the judicially-sealed
information to a famous criminal lawyer who had
represented the very members of the mafia that Lauria
had cooperated against.
48.
The result of this disclosure was a violent one
for Lauria. In or about July 2012, one of the members
of the mafia tracked down Lauria in a restaurant in
Bay Ridge, Brooklyn, where Lauria was having lunch
with his current business colleagues. Undaunted by the
public scene, the mafia member beat Lauria in broad
daylight, menacingly telling Lauria, “you’re dead – I
am going to kill you and the fucking Russians. You’re
a rat. I did two years because of you.” Lauria knew how
serious the threat was. He had heard that the very
same family of this mafia member has a long history of
murder and violence. Consequently, immediately after
the encounter, Lauria sought the protection of the FBI.
***
PDF Page 222
App. 164
APPENDIX AF
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
98 CR 1101(ILG)
TO BE FILED UNDER SEAL
________________________________
UNITED STATES
)
)
Plaintiff,
)
)
-against)
)
JOHN DOE,
)
)
Defendant. )
________________________________ )
MOVANT JOHN DOE’S
SUPPLEMENTAL MEMORANDUM OF
LAW IN FURTHER SUPPORT OF
PERMANENT INJUNCTION
MORGAN, LEWIS & BOCKIUS LLP
101 Park Avenue
New York, New York 10178
Tel: 212.309.6000
Attorneys for Movant John Doe
PDF Page 223
App. 165
PRELIMINARY STATEMENT
The Court has the power and authority under the
All Writs Act to order the Respondents to return or
destroy documents that were unlawfully taken from
John Doe and are part of a case that was sealed by the
Court. The First Amendment does not protect the
actions of the agent of a thief who threatens to publish
his ill-gotten gains to extort a settlement and put a
man’s life at risk.
FACTUAL BACKGROUND
The facts underlying this matter begin on May 10,
2010, when Respondent Oberlander, an attorney, filed
publicly in the United States District Court for the
Southern District of New York a civil RICO complaint
(the “SDNY Complaint”) that he knew contained
extraordinarily sensitive and sealed information about
John Doe which, if disclosed, would endanger not only
Mr. Doe’s life, but also the lives of Mr. Doe’s family.
Specifically, Mr. Oberlander knowingly attached as
exhibits to the SDNY Complaint certain documents
(the “Exhibits”) that, to this day, are part of or relate to
a sealed record in a Federal criminal case in which Mr.
Doe was a defendant and cooperating witness.1 The
1
Mr. Oberlander testified that the Exhibits were comprised of the
following (1) “five pages from the PSR” (i.e., excerpts from Mr.
Doe’s 2004 Presentence Report (the “PSR”)); (2) “two proffer
agreements” (i.e., Mr. Doe’s proffer agreements dated October 2,
1998 and October 29, 1998 (the “Proffer Agreements”)); and
(3) “the cooperation agreement’‘ (i.e., Mr. Doe’s cooperation
agreement dated December 10, 1998 between John Doe and the
government (the “Cooperation Agreement”)). 6/21 Tr. at 28-29. Mr.
Oberlander further testified that on or about March 3, 2010, the
PDF Page 224
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SDNY Complaint contained countless references to the
***
PSR to be returned to the United States Attorney’s
Office. 6/21 Tr. at 88-92. The Court also modified and
extended the 5/18 TRO to include the Criminal
Complaint and the Information pending a decision on
the present motion.
At the July 20 hearing, the Court heard oral
arguments and made preliminary findings of fact with
respect to how the Sealed and Confidential Documents
were obtained. Specifically, the Court stated: “Mr.
Bernstein is a converter, Mr. Bernstein has no title to
those documents, no legal right to those documents, to
that tangible document whether it would be a piece of
paper, whether it be a gold ring or whatever it is, it
was a tangible item which was converted .... ” 7/20 Tr.
at 19. The Court further stated: “Mr. Oberlander had
no better right to those documents than Mr. Bernstein
following documents were transmitted to him via email (the “3/3/10
Email”) from Joshua Bernstein: the PSR, the Proffer Agreements,
the Cooperation Agreement, a criminal complaint in case number
98 CR 1101 (i.e., the Complaint and Affidavit In Support of Arrest
Warrants against, among others, John Doe (filed under Docket
number 98-754M) (the “Criminal Complaint”)), and a draft of an
information (the “Information”). 6/21 Tr. at 11-13. Mr. Oberlander
also testified that Arnold Bernstein, Joshua Bernstein’s father,
and Gerry Feinberg, an attorney representing Joshua Bernstein in
another matter (a civil case captioned Bernstein v. Bayrock Group
LLC Case No. 002579/2009), were addressees on the 3/3/10 Email.
6/21 Tr. at 14. The PSR, the Proffer Agreements, the Cooperation
Agreement, the Criminal Complaint, and the Information are
referred to hereinafter, collectively, as the “Sealed and
Confidential Documents.”
PDF Page 225
App. 167
had. If we were to describe this change of events in
terms of property rights, title, Mr. Bernstein had no
title and he had no title to give Mr. Oberlander.” 7/20
Tr. at 20. The Court granted Mr. Doe’s application to
file a supplemental brief by July 27 and extended the
5/18 TRO pending a decision by the Court. After
counsel for Respondent Oberlander asserted his
position that the Court’s permanent order regarding
the presentence report applied only to the “original”
copy that Mr. Oberlander obtained from Joshua
Bernstein, the Court also issued a further TRO against
the dissemination of any copies of the PSR. 7/20 Tr. at
26-27.
On July 26, counsel for Mr. Doe sent a letter to the
Court advising that the parties were negotiating a
standstill agreement “with the goal of reaching a
consensual resolution to the proceedings before this
Court” and requesting an extension of the 5/18 TRO.
The Court extended the 5/18 TRO until August 3 and
further extended the TRO until August 13. On August
12, the parties agreed to a stipulated standstill order
(the “Standstill Agreement”), which the Court soordered that day. Among other things, the Standstill
Agreement provided that pending a settlement or
issuance of the an order granting or denying the relief
requested,
***
PDF Page 226
App. 168
APPENDIX AG
EOC:DP
F. # 1998r01996
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
00 Cr 196 (ILG)
________________________________
UNITED STATES OF AMERICA )
)
- against )
)
DANIEL PERSICO,
)
)
Defendants.
)
________________________________ )
THE GOVERNMENT’S WITNESS LIST
1. Traci Manuel
2. Joseph Polito
3. Felix Sater
4. Special Agent Leo Taddeo
5. Professor Steven Thel
PDF Page 227
App. 169
Respectfully submitted,
ALAN S. VINEGRAD
United States Attorney
Eastern District of New York
Eric C. Corngold
David B. Pitofsky
Assistant U.S. Attorneys
(Of counsel)
PDF Page 228
App. 170
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
00 CR 196 (ILG)
[Filed November 15, 2000]
________________________________
UNITED STATES OF AMERICA, )
)
- against )
)
DANIEL LEV, et al.,
)
)
Defendants.
)
________________________________ )
MEMORANDUM OF LAW IN SUPPORT OF
DEFENDANT DANIEL LEV’S
PRETRIAL MOTIONS
JEFFREY LICHTMAN
41 Madison Avenue
34th Floor
New York, New York 10010
(212) 689-8555
Maranda E. Fritz
FRITZ & MILLER
565 Fifth Avenue
New York, New York 10017
(212) 983-0909
Attorneys for Daniel Lev
PDF Page 229
App. 171
POINT IV
DEFENDANT DANIEL LEV IS ENTITLED TO
PRETRIAL DISCLOSURE OF ANY AND ALL
INFORMATION FALLING WITH THE
PURVIEW OF BRADY V. MARYLAND4
AND ITS PROGENY
As noted previously, Daniel Lev’s involvement in
the wide-ranging crimes charged in this Indictment are
limited to his single investment in U.S. Bridge.
According to the government, cooperating witnesses
Gennady Klotsman and Felix Sater served as the
solicitors of Lev for his investment. Therefore, the
lion’s share of proof against Lev will come from the
mouths of these cooperators. As such, the credibility of
these witnesses are of paramount importance to Daniel
Lev’s defense.
With this in mind, on March 27, 2000 the defendant
served a general discovery letter on the government
which requested disclosure of all Brady material
known to the government. In the government’s Rule 16
letter of April 21, 2000, no mention was made of the
government’s possession of any Brady material. The
government’s May 24, 2000 “general index of the
documents available for inspection and copying”,
however, contains materials which clearly are
impeachment materials, i.e., “People v. Sater”
materials.
As these materials were not forwarded to the
defense, Lev served a more specific Brady demand
4
Brady v. Maryland, 373 U.S. 83 (1963).
PDF Page 230
App. 172
pursuant to its letter of October 10, 2000. In this letter,
Lev requested:
bank, phone and financial records of Eugene
Klotsman and Felix Sater; NASD/SEC
disciplinary and employment history for
Klotsman and Sater; customer complaints
regarding Klotsman and Sater; materials from
People v. Sater, and any recorded witness
statements from these or any government
witness which serve to
***
PDF Page 231
App. 173
JEFFREY LICHTMAN
ATTORNEY AT LAW
[Letterhead]
January 16, 2002
BY FEDERAL EXPRESS
May Ann Betts
United States Probation Officer
Eastern District of New York
75 Clinton Street
Room 405
Brooklyn, New York 11201-4201
Re: U.S. v. Lev, 00 CR 196 (S-1)(ILG)
Dear Ms. Betts:
As counsel for Daniel Lev, I am submitting,
pursuant to Rule 32(c) of the Federal Rules of Criminal
Procedure, his objections to the Presentence Report
(“PSR”). The objections are factual in nature and will
be addressed in the order stated in the PSR.
Paragraph 33:
The defendant rejects the claim that he was
involved in the U.S. Bridge Stock fraud. In addition, as
defendant Lev allocuted during his guilty plea, he
harassed Felix Sater’s father in an attempt to convince
him that he should dissuade his son from testifying in
the U.S. v. Coppa, et al. Case. As the government
knows, Mr. Lev was approached by Mr. Sater (not the
other way around) and never threatened or intimidated
him in any manner. In sum, Mr. Lev attempted to
PDF Page 232
App. 174
influence Felix Sater from testifying against him and
anyone else in this case.
Furthermore, Daniel Lev’s guilty plea was not the
sole cause Felix Sater was not called as a witness in
this case. Sater was a witness against many other
defendants who ultimately pleaded guilty. In the
defendant’s estimation, the reason the RICO charges
against him were dropped is because the bulk of the
evidence against him – the testimony of government
witnesses Sater and Gennady Klotsman – was
unreliable.
***
PDF Page 233
App. 175
***
43.
Daniel Lev was arrested on March 2, 2000, and
provided no post-arrest statement. According to
the Government, while not an employee of White
Rock/State Street, Lev was involved in the
USBNY stock deal in that he lent $300,000 to
USBNY which was used to purchase 3 million
warrants (the right to busy stock). At the time of
the IPO of U.S. Bridge of New York, the
warrants were in Lev’s name, and White Rock’s
principals had arranged to purchase all of Lev’s
warrants at a low price for purposes of then
inflating the price and selling them at
substantial profit. During the summer of 2000,
following the arrests for the instant offense, Lev
confronted Felix Sater’s father and verbally
abused and harassed him with the objective to
get Felix Stater to not truthfully testify against
Lev. The Government did not provide
information related to the extent of the verbal
abuse and harassment, or whether there was
any express or implied threat of injury or
damage. Due to Lev’s guilty plea, Sater was not
called as a witness. No aggravating or
mitigating role adjustment appears warranted.
***
PDF Page 234
App. 176
11/1/2014 The Law Offices of Jeffrey Lichtman:
Experienced Criminal Defense Attorneys in Federal
and New York State Courts | Results
United States v. Russo, 00 CR 1289 (E.D.N.Y. 2004)
Defendant charged with possession with intent to
distribute heroin received downward departure from
78-97 months to a non-custodial sentence of supervised
release due to extraordinary family circumstances.
United States v. Fazio, 00 CR 1183 (S.D.N.Y. 2003)
PDF
Defendant convicted of laundering $2.5 million of
proceeds of illegal gambling operation received
downward departure at sentencing to 5 years probation
on grounds that he suffered significantly reduced
mental capacity during the commission of the crime
due to a pathological gambling disorder. Sentence was
extraordinary in that amended sentencing guideline
prohibiting such departure was due to go into effect the
next day.
United States v. Fares, 01 CR 1175 (S.D.N.Y. 2002)
PDF
Motion for severance of defendant and charges granted
in federal money laundering and structuring case.
United States v. Khmelnitsky, 01 CR 890 (S.D.N.Y.
2002)
Prior felon convicted of tax evasion received downward
departure to three months imprisonment due to
extraordinary family circumstances.
United States v. Lev, 00 CR 196 (E.D.N.Y. 2001)
Federal RICO charges (along with securities fraud and
money laundering charges) dismissed by government
after Mr. Lichtman’s investigation of government’s
PDF Page 235
App. 177
linchpin witness revealed his repeated perjury and
fraud while cooperating with the government.
***
http://www.jeffreylichtman.com/results.html
2/2
PDF Page 236
App. 178
APPENDIX AH
The SCORPION and the FROG
***
CHAPTER NINETEEN
Of course, it didn’t end with that first de-briefing with
the FBI and the other law enforcement agencies after
my surrender. They kept after me, and what they kept
after was more about crooked stuff involving Danny.
Which I couldn’t give them because there wasn’t any to
give.
“Sure, I gave him IPO stock,” I told one of the two
FBI agents assigned to me. “Danny’s my best friend.
Obviously, you know that. He wasn’t my ‘protection.’ I
would go to him for advice.”
That was enough to trigger a leading question.
“Why would you go to him?”
As if there was any question there. Why would I go
to him? Because Danny was part of a family referred to
as “organized crime,” because he was a good person to
ask about dealing with critical issues that came up
involving persons in organized crime. But I didn’t say
that.
“Just because he was my friend.” I tried to make it
clear that I wasn’t the one in the company that dealt
PDF Page 237
App. 179
with the sticky issues of conflicts with Mob-related
problems. That was Lex’s department.
“I was running the firm, guys,” I told the agents. “I
was wearing a suit, every day. I’d be going in and
building up the firm. Lex was the negotiator. When it
came to dealing with organized crime, he was the one
to do it.”
They didn’t like that, but that was all they were
going to get out of me, and they finally accepted that,
and sent me home. Danny, I hoped, was safe.
***
But because of my cooperation, they gave me the
courtesy of bringing myself in, in response to the
indictment. ...
***
As far as the real facts of the case went, they
already had what they needed. They got that from
Gene, who knew everything, and had apparently told
everything. They had Vlad, they had Andrew
Bressman. All these owners and dealers were already
cooperating, so there wasn’t anything important they
needed from me except Danny.
***
Then, in March 2000, they indicted the whole group,
nineteen people, in what was billed as one of the
biggest Mob-related indictments ever done on Wall
Street. I wasn’t part of that indictment, of course,
because I had already agreed to plead. That made the
FBI guys worry about my safety. The ones who were
PDF Page 238
App. 180
indicted included some heavy Mob figures, and the fact
that I already had made a deal was a problem.
“You should leave your house,” the Feds told me.
“It’s not safe for you to stay here. Your buddy Danny is
furious. And if he’s what we think he is (meaning a
Mob guy), you’re in danger.”
I wasn’t worried about Danny, although I was
unhappy to hear that he was furious. ...
***
But then another issue came up, which was that it
didn’t sit okay with the authorities–the FBI, the
Justice Department, the whole prosecution team–that
I was living in a $2 million house. Forget the
agreement that I would be able to keep my primary
home. Some of these civil servants were men and
women who lived in developments, and it didn’t go
down for them to see me living where I was. So I had to
sell the house, and move into a rental house.
***
One day, I got a disturbing anonymous phone call.
It was a threat against my youngest daughter, and that
was a terrible experience. Then I learned that Danny’s
lawyer had hired a private investigator to find me. I
knew that because the PI showed up when I was out,
and spoke to Lynn, who was walking the dog. She told
him that I was out, and asked for his number, which
gave him the confirmation that I lived there. That
made me uneasy. But not really frightened, because
what was there for him to take action against me for?
If he read the case, which would show what my
voluntary testimony had been, he would see that I had
PDF Page 239
App. 181
not said anything against him. He already knew that
I was cooperating, but I was telling the truth. So there
was nothing I could say that would hurt him.
It was true that Danny had helped Andrew
Bressman, and had collected a payoff for doing it,
which I didn’t know until the Feds told me. That was
what got Danny into the indictment: the fact that after
going with me and John Diorio and Forty to face the
Mob guys who were threatening Andrew, Danny had
gone back to Andrew and hit him up for money. I had
told Danny not to do it, that I would give him stock
that would be worth more than any money he would
get out of Andrew. But he had gone anyway, and I
think he got $25,000 out of him. When Andrew was
pulled in, he gave them that information and it went
down as extortion against Danny, and that’s why he
was indicted with everybody else.
Still, I considered it my fault that Danny got in
trouble over that, because I brought him into the
situation with Andrew. But even before that incident,
I had discouraged Danny from coming around to my
company, because of the way I knew it appeared. It
looked like we were connected, which was not good for
either of us.
“It will hurt me,” I had told Danny, “It will hurt
you.”
When Danny did get indicted, he pleaded guilty,
and pulled a one-year suspended sentence on work
release. ...
***
PDF Page 240
App. 182
Prosecutions continued throughout that year and
the next. In 2001, I was working in the new business I
had chosen, which was building houses. I was building
houses in the $800,000 to $1 million range, making
decent money at it. I figure that four houses would
realize a $1 million profit, which would let me buy
Lynn a house again. Until the tragedy of September 11,
the matter of my sentencing was a big weight hanging
over my head. It was very likely that I would do serious
time; the question was how much. But a few days after
September 11, I got a call from Lex, telling me that the
information we had provided about Osama bin Laden
was now being actively pursued, and our situation had
improved. Three days before the attack on the World
Trade Center, the Taliban or Al Qaeda had
assassinated the man we had hoped would be our
contact, Ahmad Shah Massoud, the man who had
become the Northern Alliance leader.
Lex had gotten a call from a boss of a new section in
the FBI who wanted to talk to him about the whole
Stinger deal. We had done a careful job of putting it
together, using connections Lex thought he had with
both sides in the Afghan War. We had provided the
actual serial numbers of the Stingers, which had been
available in ’98, and we had passed on what we
thought was an active cell phone number for bin
Laden.
To our way of thinking at the time, we had provided
a way to reach bin Laden that should have been
important to the U.S. government. Gene had fouled the
deal by raising our asking price for the Stingers from
$300,000 to $3 million. Now the information was
deemed important, even though the Stinger deal had
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App. 183
not gone through. Lex, for all his other faults, was a
very patriotic guy and a diehard Republican, and he
was anxious to help the country any way he could–
particularly if it served his purposes.
Then the entire block of defendants indicted in my
case pleaded guilty, so it ended up that there was no
trial after all. Most of the guilty pleas brought one to
three-year sentences. I was grateful to Lex for
including me in the record of the details he gave the
FBI when they came to him about the Stingers and the
bin Laden contacts, because that improved my case.
The FBI and the prosecution wanted to suppress our
involvement as much as possible even after 9/11.
***