During the last few days, Felix Sater, whom I have written about extensively since 2012, has surfaced in the national news as an unlikely intermediary, who connected a rogue Ukrainian legislator with President Donald Trump’s personal counsel to hatch a proposal for “peace” in the Ukraine on terms highly favorable to Russia.
Much has been written since the New York Times broke that story about Sater’s unsavory past three days ago, which has included articles on his ties to the Russian mob and his past extensive relationship with Trump as a finder of possible real estate projects in Russia.
What has gone unremarked upon, however, has been the subject of my many articles revealing how the Second Circuit and its surrogate Eastern District Judge Brian M. Cogan have sought to have two New York lawyers cited for contempt. One of them is Richard Lerner, the son of now deceased Justice Alfred Lerner, who was a presiding justice of the Appellate Division in Manhattan after serving as administrative judge in Queens for many years. The other is Frederick Oberlander, a Long Island lawyer, who had received information from a sealed criminal file in a case where Sater was a defendant and cooperator in a $42 million stock fraud case.
Oberlander used the information from the sealed file to commence a civil action charging Sater with using the protection of court-ordered secrecy to carry out a second real estate fraud, which netted $500 million in illicit gains from investors, who were unaware of his criminal past.
U.S. Judge I. Leo Glasser, who presided over the stock fraud case in the federal court in Brooklyn, was outraged by the disclosures as was the U.S. Court of Appeals for the Second Circuit, both of whom slapped a series of gag orders on Oberlander and Lerner, who was defending him. The Second Circuit was so upset that it ordered the appointment of a judge to make sure its orders are enforced. The Circuit even took the highly unusual step of barring both attorneys from filing a petition with the U.S. Supreme Court for review of its orders without first getting the Second Circuit’s permission.
The Second Circuit panel specifically voiced its “exaspera[tion]” with the two lawyers and took the additional unusual step of threatening to treat them as pro se litigants (meaning the court would require them to get its permission before filing any more papers) unless they came to heal.
Oberlander and Lerner bypassed the Second Circuit’s order and filed a request directly with the Supreme Court, which granted them permission to seek review in the Court as long as any sensitive material was redacted. That was the subject of my first article (WiseLawNY, Aug. 8, 2012).
Five Year Battle
What ensued was a five year battle to hold the two lawyers in contempt even though any rationale for keeping the information secret had long since past. Much of the information in the real-estate fraud suit, as Lerner and Oberlander demonstrated to the Supreme Court, was already in the public record. Six months later, any claim to secrecy became laughable when the clerk of the court in Brooklyn mistakenly made the entire sealed file public, causing even Judge Glasser to recognize that “the cat is out of the bag.”
Indeed, all the basic facts had been in the public domain since 2007 when the New York Times published an extensive article revealing Sater’s dealings with Trump and his unsavory past. A book, written by a co-defendant in the stock swindle, Salvatore Lauria—The Scorpion and the Frog—detailed Sater’s extensive contacts with the Russian mob (Sater’s father was a Russian gangster) . But what Oberlander’s suit offered was proof of the reporting in the Times.
With Trump’s presidential quest kicking into high gear last winter, that proof was of paramount interest to the press, prompting the Associated Press to seek an order from Judge Cogan, authorizing the release of the sealed documents. Judge Cogan ordered the release of some of the documents, but insisted that the contempt investigation, now being conducted by the U.S. Attorney’s Office in Syracuse, continue, despite a show of lack of enthusiasm from the Northern District prosecutor at a hearing on May 10, 2016.
When Cogan pressed the prosecutor about how much time his office would need to wrap up its investigation, the prosecutor asked for six months. Cogan gave him there weeks. On the adjourned date, May 31, no one appeared in court and when I inquired I was told that the hearing had been canceled with no future date having been set.
At the May 10, hearing Cogan offered a bizarre theory that allowed him to order the release of some sealed documents to the AP but nonetheless justified his specifically enjoining Lerner and Oberlander from commenting upon them, even though he had just made them public.
The bottom line is 20 years after Sater agreed to cooperate and eight years after he pleaded guilty to a $42 million stock swindle, significant portions of his court file remain under court seal, and the two lawyers who battled to make the court records public remain under investigation.
As late as last May, I was made painfully aware that the Northern District was still pursuing its contempt investigation. Through an intermediary, I was informed that a prosecutor in the Northern District wanted to speak to me about my reporting on Lerner and Oberlander. The prosecutor, Richard Belliss, relayed his contact information and asked that I call him. Feeling strongly that contacts with any confidential sources are legally protected from disclosure (I am not acknowledging that there were any) I did not make the requested call and I have not heard anything further related to the inquiry.
Meanwhile, Lerner and Oberlander continue to have a criminal investigation hanging over their heads, while Sater, who continues to maintain that his life would be endangered by the release of the sealed information, has lived in the U.S. and not complained of any threatening incident arising out of the disclosure of such information. His claims of danger from his role as a cooperator and as a national security asset have not been born out. To the contrary, he became involved in an unauthorized attempt at a back-channel negotiation with the Trump Administration. This has resulted in publicity a gazillion times more massive than could have stemmed from the Second Circuit’s pique at him over the release of sealed information. Not only that, but apparently he has voluntarily talked to the New York Times about his role in the affair.