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Sater Wins $70 Million Tax Fraud Suit

Felix Sater, who is in the crosshairs of Special Prosecutor Robert Mueller, dodged a bullet on Wednesday when State Supreme Court Justice Charles E. Ramos booted a $70 million tax fraud case brought by his two longtime foes, New York lawyers Frederick Oberlander and Richard E. Lerner. The case had been brought as a private action under NY law, which authorizes a private citizen to sue to recover funds owed to the state and to retain a portion of any recovery (NY Fin. Law Sect. 187 et seq.)

My story was published on the WhoWhatWhy.org Blog. Here’s the link: /whowhatwhy.org/2017/09/28/key-figure-trump-russia-saga-dodges-legal-bullet/.

 

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Judge Makes Unfounded Accusation against Lawyers in Sater-Connected Case

Due to an  error on my part, a paragraph was dropped from the original version of this article,  which contained my disclosure that I am one of 13 amici, who have filed an amicus brief supporting the motion for disclosure of the Sater documents remaining under seal at the Second Circuit. I apologize for this oversight and have restored the omitted paragraph highlighted in GREEN  in this updated version of the story.

 

 

Eastern District U.S. Judge Pamela K. Chen made a very serious error in a report she prepared for the U.S. Court of Appeals in a case involving Felix Sater, a figure who stands at ground zero of Special Prosecutor Robert Mueller’s investigation of collusion between the Trump campaign and Russian efforts to undermine the 2016 Presidential election.

She erroneously accused two lawyers, who have been subject to gag orders issued by Eastern District Judge I. Leo Glasser in 2010 and the Second Circuit itself in 2012, of “knowing contravention” of a Second Circuit order requiring that any certiorari from the two lawyers to challenge the Second Circuit’s order “ be filed under seal.”

A review of the papers filed by the two lawyers with the Supreme Court and the Court’s docket in the matter reveals that accusation is incorrect.

The two lawyers are Frederick Oberlander, who disclosed sealed records from Sater’s criminal file in the Eastern District of New York and his lawyer, Richard Lerner, who is the son of former presiding justice of the Appellate Division, First Department, Alfred Lerner.

Oberlander drew the ire of Glasser and the Second Circuit when he used information from Sater’s sealed criminal file in a lawsuit brought in 2010 to accuse Sater of using the cover of his sealed record to perpetuate a fraud that dwarfed the one that led to his guilty plea and subsequent cooperation.

Sater’s 1998 guilty plea was to crimes arising from a $40 million pump-and-dump stock scheme. In his 2010 lawsuit, Oberlander accused Sater of involvement in a $400 million real-estate fraud in projects involving now President Donald Trump.

A review of the Supreme Court’s docket in connection with Oberlander’s cert petition reveals that on May 10, 2012 Oberlander filed a cert petition in tandem with a motion “for leave to file a petition for a writ of certiorari under seal with redacted copies for the public record.”

Approximately six weeks later (on June 25), the Court granted their motion to file redacted copies of the brief for certiorari, with leave to do so within 30 days. In an entry dated July 13, 2012 the docket states, “Petitioners complied with the order of June 25.” Read the Oberlander cert petition.

To dispel any doubt about that sequence of events, the Supreme Court’s clerk’s office affixed a date stamp of May 10, 2012 in the upper right hand corner of the motion for certiorari and added in a legend in extra-large type across the top of the motion, advising that it had been “Redacted in Accordance with the June 25, 2012 order of the U.S. Supreme Court.” View cover page.

Judge Chen, who sits in the Eastern District of New York, was appointed by the Second Circuit as a special master to sort through claims filed by Forbes Magazine and its star investigative reporter, Richard Behar, asking for the release of any documents remaining under seal under the gag orders it had issued in 2012 barring Oberlander and Lerner from referring* to any of the materials they had obtained from Sater’s sealed file. Forbes’ motion was supported by a group of amici, including former New York Times reporter, David Cay Johnson, Michael Moore and BBC (I am also one of the amici).

*Correction made in the last paragraph reflecting that neither Forbes or amici had asked that the injunctions against Oberlander and Lerner be lifted

©DanielJWise2017

 

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One Way to Dance Toward a Judgeship

About eight weeks ago, New York State Assemblyman Dan Quart, who had recently been hired as an associate by the law firm McManus, Ateshoglou, Adams, Aiello & Apostolakos, which is located on the 25th floor at 48 Wall Street, attended a fundraiser, which his new firm had organized to support future Quart political campaigns.

A flyer for the fundraiser  prominently featured Athanasia Apostolakos, one of the name partners at McManus Ateshoglou, asking donors to purchase tickets at a price of $250, $500 or $1,000 to support “Dan Quart For New York City,” a political fundraising vehicle created under New York City’s Campaign Finance Law. According to filing, required by the law, Quart for NYC raised $31,000 in March and April of this year.

That would have been unexceptional but for the fact that just a few weeks later, Suzanne Adams, who is also a name partner of the McManus firm, would appear for an interview with a screening panel set up by the Lexington Democratic Club, seeking its approval to run for one of two seats open this year within the 9th Civil Court District in Manhattan.

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My Joining a Group Founded by Accomplished Investigative Reporter Russ Baker

Dear Followers and Friends of WiseLawNY,

I am pleased to inform you that I have been invited to join WhoWhatWhy.org, a consortium of 100 reporters, editors and other professionals with the skills necessary to produce hard-hitting, meticulously-sourced investigative journalism. My first article, which was published today on WhoWhatWhy’s website is a collaboration with Russ Baker, the group’s founder and guiding light.

Over the course of two decades, prior to founding WhoWhatWhy, Russ did work for many of the world’s leading news outlets, including the New Yorker, Village Voice, Nation, Columbia Journalism Review, Times of London, Esquire, Vanity Fair, etc. He’s also the author of the best-selling investigative history of the Bush dynasty, Family of Secrets.

I very much look forward to working with Russ and the other journalists he has brought together at WhoWhatWhy on stories of national interest. I will continue to write stories on WiseLawNY of interest to judges, lawyers and interested observers of the legal scene in the New York metropolitan area.

Russ’ and my collaboration draws upon two stories that WhoWhatWhy and WiseLawNY published within four days of each other in late March. The WhoWhatWhy story sifted through many coincidences and relationships suggesting that the Trump organization had often been in close proximity to both Mafia families and Russian criminals in New York. It also further identified, Felix Sater, a convicted felon, who was a government informant for more than a decade starting in 1998, as having both business dealings with Trump and deep ties to Russia where he was born.

The WiseLawNY post added to that mix a statement made by a prosecutor in a sealed 2011 court proceeding, which only recently became public, that the informant Sater had produced valuable information about “Russian organized crime.”
Click here to read the story: http://whowhatwhy.org/2017/04/27/government-must-tell-trump-associate-russian-mob-ties/

Regards,
Dan

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Prosecutor Told 2nd Circuit in 2011 Sater Cooperation Included ‘Russian Organized Crime’

Forbes magazine  and one of its top investigative reporters late Wednesday, March 22, asked the U.S. Court of Appeals for the Second Circuit to unseal its records in the case of a government cooperator, Felix Sater, who acted as a go-between for a rogue Ukrainian legislator, who was promoting a pro-Russian peace plan to end the fighting in eastern Ukraine, and President Donald Trump’s personal counsel.

In seeking the release of the records, Forbes’ unsealing motion at p.2 cites “significant public interest in understanding President Trump’s connection to Sater and Sater’s connections to Russia,” especially so because of the ongoing investigations into Russian interference in the 2016 presidential election.

“Documents critical to the public understanding [of those connections] sit sealed on [the Second Circuit’s] docket, wrote Forbes’ lawyers from the prominent First Amendment law firm, Levine Sullivan Koch & Schulz, and a student  clinic at Yale Law School, specializing in prying loose documents hidden from public view.

Moreover, Forbes’s motion reveals at p. 9 that, when the Second Circuit first reviewed the sealing of Sater’s criminal file in 2011, the government’s lead prosecutor informed the court during an oral argument, conducted under a shield of court-ordered secrecy, that Sater’s cooperation “involves violent organizations such as Al Qaeda, it involves foreign governments, it involves Russian organized crime.”

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Did OCA Place Top Prudenti Aide With Legal Services Agency?

On July 28, 2015, the Office of Court Administration swiftly swung into action to accommodate one of its own when then Chief Administrative Judge A. Gail Prudenti announced her plan on July 28, 2015 to retire two days later to head up a student clinic at Hofstra University School of Law. A month later Prudenti’s chief of staff, Eugene Myers, was in place as the top non-lawyer administrator at Mental Hygiene Legal Service for the Second Department, whose 80 lawyers represent persons confined in mental institutions and sex offenders the state wants to civilly commit after they have served their prison terms.

Unlike many of Prudenti’s staffers who either retired or sought work elsewhere with her departure pending, the former Chief Administrative Judge said Myers wanted to remain with OCA until he could qualify for a full pension. Also, tired of the lengthy commute to OCA headquarters in lower Manhattan, she added, he wanted a post closer to his home in Suffolk County.

The Mental Hygiene Legal Service (MHLS), which has its headquarters in Mineola, had an opening for a deputy director, but there was one very substantial obstacle: the job could only be filled by a lawyer and Myers is not an attorney.

To clear that hurdle, court administrators reclassified the deputy director position to eliminate the requirement that the applicant be admitted to the bar, according to a document released in response to my Freedom of Information Law (FOIL) request. In a cover letter, Shawn Kerby, OCA’s FOIL officer explained that the new position was designated as “Special Programs Coordinator” rather than as Deputy Director, Mental Health Legal Service. Despite that designation, Mr. Kerby stated that Myers currently uses the working title of “Deputy Director of Administration.”

The last time the deputy director position was posted in 2011, the job posting required that applicants be admitted to the New York bar.

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Ukrainian “Peace” Emissary Coasts Free While Lawyers Who Outed Him Face Contempt Charges

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.

©DanielWise2017

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Judge Nixes Lender Move to Escape 6 Year Bar in Foreclosure Cases

A Supreme Court justice in Brooklyn has forcefully rejected a bid by one of the nation’s largest mortgage lenders to avoid application of New York’s six-year statute of limitations in foreclosure cases.

In a 42-page opinion, Justice Dawn Jimenez-Salta ruled that Wells Fargo bank could not use a Brooklyn homeowner’s participation in a federal program created to help financially strapped homeowners to escape the six-year bar on new foreclosure lawsuits.

Frenkel Lambert Weiss Weisman & Gordon, the firm that represented Wells and its client, U.S. Bank, in the litigation over the statute of limitations did not respond to an inquiry as to whether the decision would be appealed. Neither did Woods Oviatt Gilman, the firm that now represents the two.

Unless reversed, the Oct. 31 ruling leaves Wells Fargo’s client with no recourse to collect on the $639,000 loan at a 7.5 percent interest rate, which was issued to Alberto Martinez in 2005 to finance the purchase of his home in the Ditmas Park section of Brooklyn. In this instance, the owner of the loan was a mortgage-backed investment fund and Wells was acting as its agent in its dealings with Martinez. Most of the nation’s largest banks have affiliated businesses handling dealings between lenders and property owners whose home purchases they have financed.

The ruling is one of a handful of trial-court rulings  to hold that homeowners’ ultimately unsuccessful efforts to obtain lower monthly mortgage payments under the federal Home Affordable Modification Program (HAMP) do not provide lenders with a way to escape New York’s statute of limitations.

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Courthouse Confidential: Brooklyn Dems’ Chief Boosted Lawyer for Court Job

According to knowledgeable sources, Kings County Democratic Leader Frank R. Seddio is referring job seekers for positions at the Supreme Court at 360 Adams Street in downtown Brooklyn. Information to that effect has leached out and become widely known within the courthouse in the case of a lawyer, who was recently appointed as a law assistant to a judge handling civil cases, including foreclosures.

The lawyer, whom Seddio is said to have helped, was Alexis Riley, who had spent the last two years as a “court appearance attorney” handling foreclosure cases for one of the most active lender firms, Rosicki, Rosicki & Associates, according to her LinkedIn profile, and for a second real-estate firm, now known as Friedman & Bartolo. I am aware of at least two persons, who have spoken to Riley about the help that Seddio gave her.

As recounted to me, Riley, who was accompanied by a court officer, had a chance encounter with Seddio at the courthouse earlier this year. Upon bumping into Seddio, the court officer introduced Riley and told Seddio that she would like to work for the courts. Seddio responded by asking whether she would like to work for Justice Kenneth Sherman and asked her to meet him at party offices soon afterwards.

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Panel Sources: One Member Balked at Applying Correct Standard for Review of Ling-Cohan

Update: Ling-Cohan was elected without opposition at the Manhattan Democrats judicial nominating convention Thursday night’s (Sept.22).

 

The screening of Manhattan Justice Doris Ling-Cohan for a second term on the bench was marred by a panel member who openly stated that, rather than following the 22-member panel’s rules, she would vote “my conscience.”

One panelist, who requested anonymity, had a firm recollection of what happened. In response to the reading of the standard that applied to the panel’s deliberations, a second panelist, whom the source identified as Brenda Gill, quoted her as saying, “I don’t care what the standard is, I am voting my conscience.”

Gill declined to comment upon the other panelists’ remarks, stating this matter “has been blown way out of proportion with political factions pushing their agenda, misstating facts and coloring things to support their versions of the facts.”

Under the Manhattan Democratic Party’s rules, the panel must measure judges against their own record and determine that it “merits continuation in office.” Candidates, vying for an open seat, face a more exacting test in that they must show that they are the most highly qualified within the pool of aspirants for the post.” NY Co. Dems Rules, p.6. Highlighted para. (4).

A second panelist confirmed the essential outlines of what the first reported Gill as saying. The second panelist reported checking with yet a third panelist, who recalled the incident with more specific detail.

The second panelist, however, described Gill’s remarks as “off-hand” and “inconsequential.” Gill consistently voted against candidates, who had temperament problems, that source said, warning that some factions were spinning what happened during the deliberations to their advantage.

The two panelists, who spoke to me directly, also reported that Cyril K. Bedford, the panel’s administrator, let Gill’s remark stand uncorrected and made no effort to ascertain whether she would, in fact, follow the applicable standard. Bedford did not respond to requests for comment.

Normally, panel deliberations are confidential, but after the controversy over the disapproval of Ling-Cohan on Aug. 30 became public, and the source of heated controversy, Manhattan’s Democratic Party County Leader Keith Wright and Curtis Arluck, the chair of the Manhattan Judiciary party, issued statements releasing the panelists from their confidentiality obligation.

These latest developments have surfaced with the party’s nominating convention poised to vote this evening on which of 21 eligible candidates will receive the party’s nomination for six open seats on the Manhattan Supreme Court. In  a rare move tacitly accepted to by the party’ executive committee, Ling-Cohan’s name is being permitted to be put before the convention’s 84 delegates even though she has not received the screening panel’s approval.

Clear-Cut Violation of Rule

Whether Gill’s remark was casual or reflected an intent to defy the correct standard for evaluating an incumbent candidate is inconsequential. Here’s why.

What makes Gill’s reported statement so significant is that it runs directly afoul of a clear-cut party rule, forbidding the appointment of a panelist, who “shall not have agreed to follow the guidelines established by the Committee.” NY Co. Dems Rules, p. 5 Highlighted para. (2). The rule is stronger than a “guideline” issued by the County Party’s Committee because it is a part of the New York County Democrats official rules on file with the New York City Board of Elections.

Further, under the official rules, the panel’s report must be submitted to the Judiciary Committee “immediately” for a determination that the report complies with “these Rules and the Guidelines established by the Committee.”NY Co. Dems Rules, p.6, Highlighted para. (5) .

The Judiciary Committee promptly accepted the panel’s report, and a public rally was held on Sept. 6 denouncing Ling-Cohan’s rejection. Curtis Arluck, a co-chairman of the party’s Judiciary Committee, was quoted in news articles published the next day, Sept. 7 that the decision was final but that the Judiciary Committee would explore whether it could be overturned.

Over the next two weeks, the Judiciary Committee took no action to overturn the ruling, and, to the contrary, relied upon a party rule that expressly states that the panel “shall have no power to make any change in its report after the final meeting.” NY Co.Dems Rules p.6, Highlighted para. (5).

The problem here is that the Judiciary Committee DID ACCEPT the report and has steadfastly refused to examine the merits of many of the improprieties alleged by Ling-Cohan and a substantial majority of the panel members in letters written to the Judiciary Committee in letters dated Sept. 7Sept. 11 and Sept. 14.

Further, the party’s rules are quite clear that the report may not be accepted unless they “comply” with all applicable rules. NY Co. Dems Rules, p.6. Highlighted para. (5). Many alleged departures from the rules have been cited in the three letters sent by panel members to the Judiciary Committee. The Sept. 7 letter, which contains the substance of the panelists’ concerns, mentions that at “least one panel” member, who was not identified, stated he or she would not follow the guidelines.

Not following the required standard for review stands in direct and unambiguous conflict with members’ required commitment to follow the rules. The convention will vote as planned tonight and party insiders are confident that Ling-Cohan will be elected without opposition.

That is good for her, but not good for the panel system, which is pretty much in tatters after more than two-weeks of heated controversy. There is no time to conduct an inquiry before the vote takes place, which makes it all the more imperative that the party conduct a full investigation and make public its findings and recommended remedial measures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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