A gaffe by the U.S. Solicitor General’s Office could work to the advantage of two New York lawyers, who are facing contempt charges for their handling of information from the sealed file of a government cooperator.
At the prompting of a U.S. judge in Brooklyn, federal prosecutors are examining whether Frederick Oberlander and Richard Lerner should be charged with criminal contempt for violating court orders protecting the file of the cooperator, Felix Sater, who had pled guilty in 1998 to a $40 million stock swindle. As a part of the plea deal, his criminal file was sealed.
A few weeks ago, Lerner, at my request, provided me with a copy of an e-mail sent from the Solicitor General’s Office, which could provide new ammunition for the two lawyers in fending off contempt proceedings. Sater’s lawyers at Beys Stein Mobargha & Berland are also seeking to hold the two lawyers in civil contempt.
The Solicitor General’s Office had inadvertently attached a copy of a sealed order to the e-mail, which happened to be dated March 22, 2013, the same day that the U.S. Supreme Court was scheduled to take up the two lawyers’ petition for certiorari. In their petition, Oberlander and Lerner were asking the Court to review an order issued by the U.S. Court of Appeals for the Second Circuit in 2011, which had upheld a series of orders restraining the two lawyers from divulging anything from the contents of Sater’s file.
The Solicitor General’s e-mail, which was intended to give the two lawyers notice of a recent government filing related to their petition for certiorari, stated that attached to it was “a copy of the Under Seal document from the District Ct. of EDNY.” Lerner removed the attached sealed order from the copy of the email he sent me. Click here to read e-mail from the Solicitor General’s Office.
An e-mail, sent a few days later by a U.S. prosecutor in Brooklyn made it clear that the sealed order had been attached to the e-mail in error. Eastern District prosecutor Todd Kaminsky wrote to Lerner requesting the return of the order, which “was sent to you in error and was not intended to be viewed by you.” Click here to read Kaminsky’s e-mail, which was also provided by Lerner to me at my request.
Lerner held on to the e-mail.
Robert Nardoza, a spokesman for the Eastern District U.S. Attorney’s Office declined to comment. Neither the Solicitor General’s Office, nor the U.S. Justice Department press office, on its behalf, responded to requests for comment.
Was Sater’s Sentencing ‘Open’?
In a brief filed with the Second Circuit in July, Lerner claimed that in the sealed order Eastern District Judge I. Leo Glasser, who presided over Sater’s criminal case in the Brooklyn federal court, had characterized Sater’s sentencing in 2009 as being “open” to the public.” Click here to read the brief (see p.3). If that is a correct reading of Judge Glasser’s sealed order, it would cast doubts upon restraining orders aimed at Lerner and Oberlander, which had been issued by Judge Glasser and the Second Circuit in 2010 and 2011.
The earliest that any claim can be made that either lawyer had made public sealed information from Sater’s criminal file is May 2010 when Oberlander filed a $500 million civil racketeering suit, charging that Sater had concealed his criminal past from investors in a real-estate venture where he was the number two executive. Oberlander’s complaint, which was filed in the Southern District in Manhattan, drew heavily from information in Sater’s sealed file and had annexed to it portions of documents in the file, including Sater’s cooperation agreement and pre-sentencing report.
Within days of Oberlander’s filing, revealing Sater’s prior fraud conviction and his cooperation with the prosecution, both Judge Glasser and the Southern District judge to whom the civil racketeering case was assigned, issued restraining orders barring Oberlander from revealing any information from Sater’s criminal file. Lerner entered the case as Oberlander’s lawyer in opposing the entry of the gag orders.
The Second Circuit affirmed Judge Glasser’s orders in June, 2011, and the litigation came to a close when the Supreme Court issued its order denying the two lawyers petition for certiorari on March 25, 2013.
Eleven days before the denial of certiorari, on March 14, Judge Glasser had issued a pair of orders, one public and one sealed, determining that about 120 of the 200 documents in Sater’s sealed file should be released to the public. In addition, he ruled, that portions of some of the 80 documents remaining under seal could be made public.
The Solicitor General’s blunder was in transmitting the sealed March 14 order to Lerner along with its e-mail notifying him of the government’s most recent filing in opposition to the lawyers’ petition for certiorari. Judge Glasser explained in the public order that he was sealing the second order in which he had identified those documents that should remain under seal and put forth his reasons for so ruling.
How potent is Lerner and Oberlander’s argument that any injunctive orders issued after Sater was sentenced in “open” court on Oct. 23, 2009 are invalid. It is hard to tell because the two lawyers could not directly quote Judge Glasser’s language in the sealed order without running a risk of triggering another contempt claim.
Several documents Lerner and Oberlander have publicly filed have bearing on the question, however. Judge Glasser’s public calendar for the day of Sater’s sentencing masked his real name with the pseudonym “John Doe.” Click here for a copy of the calendar. But Sater’s docket sheet, which became public in August, 2012 does not list an order closing the courtroom for the sentencing. Likewise, a transcript of the sentencing proceeding makes frequent references to Sater’s real name and his cooperation, but it was shielded from public view until Judge Glasser ordered it released in his March 14 orders.
In the 25-page transcript, prosecutors praised Sater’s cooperation as being instrumental in securing the convictions of 19 others involved in the pump-and-dump stock scheme and in ridding the securities industry of mob inroads. Citing that level of cooperation, Judge Glasser fined Sater $25,000 but imposed no prison sentence, probation or requirement for restitution. Click here for a redacted transcript of Sater’s sentencing.
Sater’s docket sheet had become public because of a second mishap, which had been caused by personnel in the Eastern District’s clerk’s office. As a result of the error, Sater’s docket sheet was available on the Internet for seven days in August 2012. Click here for details in prior WiseLawNY story.
Judge Glasser’s actual words and the circumstances surrounding Sater’s sentencing will have to be weighed in determining whether to credit Oberlander and Lerner’s claim that the judge, by acknowledging that the sentencing was “open,” had erased the only basis upon which he could have continued to enjoin the dissemination of Sater’s criminal record and his cooperation with prosecutors.
From a public relations vantage point, it was most unfortunate that the Solicitor General’s e-mail containing the sealed order was sent to Lerner on the same day as the Supreme Court took up his and Oberlander’s certiorari petition. Lerner received the e-mail at 12:41 p.m., more than four hours after the Court had begun—and possibly concluded its calendar for March 22, 2013. The Court convenes for its weekly Friday morning conferences at 9:30 a.m.
Under those circumstances, how could Oberlander and Lerner’s counsel at the Supreme Court, Paul D. Clement, have responded meaningfully to the Solicitor General’s 11th hour filing? The following Monday, March 25, 2013, the Court released its order denying certiorari.