Secret Prosecutions and The Erosion of Justice - Law360

8/17/2015 SecretProsecutionsAndTheErosionOfJusticeLaw360
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SecretProsecutionsAndTheErosionOfJustice
Law360,NewYork(August12,2015,10:51PMET)Republicanpresidentialfrontrunner
DonaldTrumpisincreasinglythesubjectofheadlinecontroversy[1]abouthisbilliondollar
developmentdealwithsecretlyconvictedRICOfelonFelixSater.
Saterisinfamousforusingandbeingallowedbythegovernmenttouse
the illegal concealment of his racketeering conviction to evade millions of
dollarsofmandatoryrestitutionheowedtothevictimsofhisorganizedcrime
stockfraud.Byitselfthisisnosurprise,asitoccurredintheEasternDistrictof
New York, home to Jordan Belfort, the Wolf of Wall Street, and other
cooperators who, like Sater, got to keep the money and live in luxury while
theirvictimswerelefttorot.[2]
RichardE.Lerner
But what hasnt been explained before is that Sater also used and was
allowed by the government to use the concealment of his conviction to fraudulently induce banks,
partnersandinvestorsintopartingwithnearlyabilliondollarstofinanceTrumpbrandedprojectswhich,if
successful, would have paid the Trump Organization a hundred million dollars and laundered a quarter
billion dollars of the share of profits expected by Bayrock Group LLC (Sater's company) outside of the
countrytoevadetaxation.[3]
Much of the fraud took place between 2003 and 2010, with the chargeable knowledge and facilitation of
LorettaLynch,nowU.S.AttorneyGeneral[4]LeslieCaldwell,nowAssistantU.S.AttorneyGeneralforthe
CriminalDivisionandhernowdesignatedsecondincommandMarshallMiller,allofwhomcameoutofthe
EDNYU.S.AttorneysOffice,[5]andwiththeknowledgeandfacilitationofthefederaljudgesoftheEastern
andSouthernDistrictsofNewYorkandtheCourtofAppealsfortheSecondCircuit.
Its bad enough that Sater and others acting with him committed and were allowed to commit
hundreds of millions of dollars of bank, real estate, mail, wire and tax fraud, and money laundering and
extortionasarewardforhisostensiblecooperationinothercases.
Howmuchworseisitthat,evenafter2010,bywhichtimethegovernmentadmitsSatersusefulnessasa
cooperatorhadended,hewasallowedtocontinuetogetawaywithit,insofarastheauthor,hisclient,his
http://www.law360.com/articles/688835/print?section=appellate 1/29
clientsclients,andotherswholearnedthetruthofallthisalmostsixyearsagohavebeenthreatenedever
sincewithcriminalprosecutionifwetellanyonewhatwelearned,eventhoughwelearneditlawfully,from
privaterecordsSaterhadkeptathisfirmandthenabandonedwhenheleft,andfrompublicrecordswhich
couldntbemadetodisappearbecausetheywereinthecustodyofCongress?
Indeed, one such order, a hyperinjunction issued against us ex parte by the Second Circuit, not only
without a hearing but literally without findings, forbad us from telling Congress what we knew and from
tellingCongress(oranyoneelse)ofthatorderitself.[6]
Insum,foryearsTrumppartneredwithSater,throughTheTrumpOrganizationandBayrockGroupLLC,
respectively, while Sater, a secretly convicted racketeer, used the illegal concealment of his record to
defraudbanksintofinancingTrumpprojects,fromwhichTrumpwouldhavetakenenormoussumsandthe
U.S. Treasury would have been defrauded of like amount by profits laundered overseas. The crimes
committed,thencoveredup,arestaggering.Takeoneexample:TrumpSoHo,amonumenttoorganized
criminalactivityprotectedbyfederalcourtsandattorneyseventhough:

ItwasfinancedbyhundredsofmillionsofdollarsofloansprocuredfrombanksthatweredeceivedbecauseofSaters
fraudulentconcealmentofhisconviction.[7]
Sateradmittedhiscriminalmensrea,confessingtotheFBI,theU.S.Attorney,andJudgeLeoGlasser,EDNY,that
heddefraudedbanksforyearsviaBayrock,expressingonlyregretthathecouldntkeepdoingitafterrumorsspread
abouthisconviction.
SateradmittedthisathisOct.23,2009,sentencing[8],whichthegovernmentsayswasinopencourt,andthe
transcriptofwhichshowsheusedhisrealname,yetallrecordofhissentencingthendisappeared.Untilforcedpublic
bytheauthorandhisclient,alljudicialrecordsofthesentencing,requiredtobepublic,inwhichheconfessedthat
hedcommittedyearsofcrimesevenwhileostensiblycooperatinginothercases,thusviolatinghiscooperation
agreement,wereillegallyhidden.
ThiswasntthefirsttimethecourtsandgovernmentknewSaterwasusingthesecrecyofhiscasetodefraudfive
yearsearlier,forexample,hisinitialpresentencereportdisclosedthathewashidinghisconvictionfromBayrockand
thattheprobationofficerhadjoinedwiththecourtsandU.S.attorneyintheconcealment.
Beforeitcollapsedfinanciallyin2010,perhapstwohundredmilliondollarsofcondominiumshadbeensold,andevery
salewasfelonyfraudunderNewYorklaw(theMartinAct)forfailuretodisclosethatSaterownedmostoftheco
developer(BayrockGroupLLC)andwasaconvictedracketeer.
Thosesaleswereaviolationofcovenantsinthe$300millionconstructionloan,whichprovidedthatrealestatesales
fraudwouldmakebothTevfikArif,Bayrockschairman,andtheSapirfamily,itsfinancialpartnerinTrumpSoHo,
jointlyliablefortheentire,otherwisenonrecourse$300millionloan.
When,inlate2010,TrumpSoHodidcollapse,andiStar,thepubliccompanywhichhadlentthe$300million,was
abouttoforecloseontheloan,BayrockbailedoutArifandtheSapirsbyarrangingforCIM,aninvestmentfirm,tobuy
theloanfor$250millionbyconcealingfromCIMandiStarthetruthaboutSaterandtheabovecrimes,thoughbythen
Bayrockhadadmittedknowingthetruthinsworndocuments,filedundersealinSater'scase.
Bythen,dozensofbuyersweresuingforunrelatedfraudinanactionbeforeSDNYJudgeWood,asbuyersofTrump
InternationalweresuingforfraudinanactionbeforeafederaljudgeinFlorida.Noneknewtilltoolatethattheyhad
rightsofrescissionbasedonNewYork'sMartinActandFloridalawsprovidingsuchremediesforconcealmentfrauds
likeSaters.
Bayrock,Sater,SapirandiStarescapedtheconsequencesofthefraud,whilesettlingplaintiffsreceivedtensof
millionslessthantheyshouldhave,whileCIMpaidtensofmillionsmore,becausepleasoftheauthor,hisclientand
hisclientsclients,whodlearnedthetruthbuthadbeengaggedformonths,tojudgesinvolvedtoletustellitwere
ignoredandinsteadwewerethreatenedandstillarewithprosecutionifwetoldwhatweknew.
And,hadtheprojectnotfailed,theTrumpOrganizationwouldhavereceivedafortune,whilefederal,stateandcity
governmentswouldhavebeendefraudedoutofafortunebecauseupto$225millionofitsprofitsweresettobe
launderedoverseas.
Thats a lot to absorb. But this is a presidential election, the debates have started, and the leading
Republican candidate is implicated in a conspiracy of massive fraud and whether hes implicated as a
victimorasabeneficiaryisnotyetknown.ThereisnoevidencethatTrumpwasawareofSatersconviction,
uponhisguiltypleain1998ofengagingina$40millionRICOfraud.Trumpwouldhavehadnoreasonto
know,becausethecourtandthegovernmentillegallyhidSatersprosecutionbehindaJohnDoedocket
for15years.Forallthatisnowknown,TrumpwasasmuchavictimofSater,andthusavictimofthecourt
andthegovernment,asthosewholoanedorinvestedalmostabilliondollarsinSaterscompanyBayrock
Groupwithoutknowingthathehadpledguiltytodefraudinginvestorsof$40million.

WhyDidtheGovernmentandCourtsFacilitatetheCoverUp?
Whywerethegovernmentandcourtsfacilitating,andcoveringupfor,organizedcriminalsandbilliondollar
frauds,letalonebyusingillegalsecrecyandthreatsofprosecutionagainstthisauthorandhisclient?

Oneansweris,itstheresultofconcertedeffortsofSecondCircuitcourtsandprosecutorstoprotecttheir
decadeslong operation of a covert criminal justice system of secret dockets, hidden convictions, and
protectedcooperatorsallowedtocommitcrimewithimpunity,solongastheyearntheirkeep.Butthatsno
answer,onlyarestatement.

Perhapsyourethinkingtheyreallybelievewhattheyredoingislegal.Thenconsiderthis:In2010,Loretta
Lynch revoked the cooperation agreement of another stock fraudfeasor and requested a severe sentence
becausethoughhedcooperatedforadecadehedusedthesecrecyofhisconvictiontodefraudhis
partnersandinvestorsbyhidingit.Lynchspapersfiledinthedistrictcourt,andthenintheSecondCircuit,
explainthatthesealingofacriminalcaseisnojustificationforfraudulentlyhidingonesconviction.[9]
Unlessyoureareallygoodcooperator,likeSater.Didtheythinkhis concealments were somehow legal?
AskCaldwell,nowAssistantAttorneyGeneraloftheUnitedStates,CriminalDivision.AsapartneratMorgan
Lewis&BockiusLLP,sherepresentedFelixSaterathis2009sentencingandheardhimconfesshisyearsof
bank frauds at Bayrock.[10] Six months later she was representing him when he was deposed in yet
anothersuitagainstBayrock.ReadthisexcerptfromSatersdepositionanddecideforyourselfifsheknew
thatconcealinghisconvictionwhileatBayrockwascriminal:

Q.Wereyoueverconvictedofacrime?
A.Yes.
Q.Whatwasthecrimeyouwereconvictedof?
A.Iwasconvictedofassaultone.
Q.Wereyoueverconvictedofanyothercrimes?
A.Ontheadviceofcounsel,IamnotgoingtoanswerthatquestionasIdon'thavetoincriminatemyselfOnthe
adviceofcounsel,Iwon'tanswerpastwhatIhavealreadyansweredMycounselisLeslieCaldwellfromMorgan
Lewis.
Q.Didsheknowyouwouldbeaskedthisquestion?
A.Yes.
Q.Didsheadviseyounottoanswerthisquestion?
A.Yes.
Q.Thegroundsbeingagain?
A.Nottoincriminatemyself
Unless Sater was perjuring himself, Caldwell told him that answering the question, Were you ever
convictedofanythingbesidesassault,couldincriminatehim.Ofcourse,sheknewthetruthfulanswerwas
"yes,"soifshewasadvisinghimingoodfaith,shehadtothinkthatthefactofhisRICOconvictioncould
incriminatehim.Andthatcouldonlymeanthatshethoughthehadcommittedacrimebydenyingit,which
would now be revealed. For example, if he lied on an application for a gun permit that he had no such
conviction,admittingthathedidwouldexposehimtoperjury.Thesamewithlyingonapplicationstobanks
forhundredsofmillionsofdollarsinloans.Hislieswouldbeexposed.Andsheknewaboutthebankfrauds
fromhisadmissionathissentencing.
Butwait...Ifthatsentencingwasreallyinopencourt,whydidCaldwelllethimopenhismouthandadmitit
there?Hewasadmittingthathe'dcommittedbankfraudwhilecooperating,inviolationofhiscooperation
agreementwhichprohibitscriminalconduct.Whywouldsheallowhimtoadmitthecrimeinopencourt,in
front of a judge, two U.S. Attorneys and four FBI agents? Didn't she risk his immediate arrest and
terminationofhiscooperation?And,ifitreallywasapublicproceeding,wasntapublictranscriptgoingto
comeoutsoonshowingallthis?
So obviously it really wasn't public, because clearly she cant have had good faith belief that he'd be
prosecuted for admitting it at a deposition after she'd sat six months earlier and watched him admit it
publicly in open court, right? One can only conclude that what she was really worried about was the
exposure that he had a hidden conviction, an illegally secret sentencing, and an illegal sentence for
avoidanceofrestitution.
ShestheheadofUnitedStatescriminaljustice.Sheshouldbemadetoexplain.

***
The full story may remain hidden. As mentioned, courts have threatened the author and his client with
prosecution if we talk, a threat now into its fifth year, because we had the temerity to challenge secret
prosecutionsintheSecondCircuitandthesecrecythatkeepsit,andcontinuingcooperatorcrime,covered
up.

Just recently, for example, the author, his client, and his clients clients were ordered by a federal
magistrate,whoacknowledgedhewasdoingsowithoutfindings,toturnintocourttheoriginals,obliterate
allcopies,thenneverspeakof,mostofthedocumentsandallworkproductandprivilegedcommunications
derivedtherefromwhichproveallthis,evenpapersthathadbeenfiledpubliclyintheU.S.SupremeCourt.
(Theorderhasbeenstayed).[11]
TheIllegalConcealmentofCriminalCasesintheSecondCircuit
There is no public list of sealed cases and documents within the Second Circuit so one can present only
anecdotes.(Butconsiderthatonerecentstudyestimatedthat469casesoverfiveyearswerehiddenoffthe
publicdocketsintheD.C.DistrictCourtalone.)[12]
ALongStandingCultureofSecrecy
In the Second Circuit, the secrecy is treated so matteroffactly, just the way business is conducted, its
even discussed in open court. For example, at the sentencing of hacker Hector Monsegur, his counsel,
federaldefenderCrossGoldenbergsaidinthepresenceofJudgeKimbaWood:
[I]nmanycases,becausemostcasesareresolvedwithaguiltypleathecooperationisneverpublicly
revealedandsomesentencingproceedingsandevensomecompletedocketsremainunderseal.This
couldhavebeensuchacase,becauseallofMr.Monsegur'scoconspirators,allofthecoconspirators,
pledguiltywithoutatrial.[13]
NoteddefenseattorneyandProfessorofCriminalLawGeraldShargelsaidoftheSecondCircuitsregimeof
secrecy:
In a system that celebrates transparency, I do not think that sealing is appropriate in the case of
cooperatorsIcannotimaginethattherecanbeablanketrulewherecourtswerepermittedtomake
generalizedfindingsthatallrecordsaresealedinthecasesofcooperatingwitnesses.Itwouldnever
passconstitutionalmusterWehaveopencourtproceedingsinthiscountry,anditcannotbeapolicy
totakeaparticularclassofdefendantsandsay,inthosecases,wearegoingtoseal.[14]
Howcanonesaytheproblemofsecrecyisopenlydiscussed?Isntthatacontradiction?No.Criminallawis
different. Its an open secret, indeed. The defense bar, dependent upon the goodwill of the government,
doesnt raise a fuss, because the secrecy benefits their clients. No one demands accountability, unless it
risestothelevelofWhiteyBulger.
Sowhen,incredibly,weeksagoanotherEDNYjudge,JohnGleeson,heldinDoev.U.S.,14MC1412,that
hehadtheinherentpowertoobliterateallfederaljudicialrecordsofacriminalcaseviaan"expungement"
order,nevermindsealthem,andthepowertoordertheexecutivebranchtodosotoothatis,toorder
theexecutivebranchtodefystatutesrequiringittodojusttheopposite,tomaintainandreportaccurate
recordsifthegeneralpublicthinksanything,itsprobablyGoodforhim.Judicialindependence.[15]
What they dont think, unless theyre constitutional lawyers, is, Wait, he held that he could do this for
humanitarianreasons?Buthecant,itcircumvents40yearsofSupremeCourtandappellateprecedenton
the public right of access to court records, and 226 years of the Supremacy Clause, and is in direct
repudiationofa90SupremeCourtcase[16]absolutelyprohibitingit?Whatisajudgedoingonthebench
decidinghehastheequityjurisdictiontoorderthecountrytonullifylawfulactsofCongress?

Sureenough,JudgeGleesondiditforacooperator.Thewomanwhosreceivingthislargesse,andothers,
were convicted of fraud on EDNY docket 00CR01274. But dont bother looking for it. It doesnt exist.
PACERwillonlytellyouitssealed.Awholedocketcontainingtheconvictionsofahalfdozenpersonsis
hiddeninacircuitwhichheldadecadeagoinHartfordCourantv.Pellegrino,380F.3d83(2dCir.2004),
thatthepublichasaFirstAmendmentrighttoaccessaccuratecourtdockets.

JudgeGleesonevenadmittedinhisdecisionthatayearago,inanotherhiddencasehesmaintaining,at
therequestofLorettaLynch,hefacilitatedthecontinuedworkasataxreturnpreparerofafelonhed
secretlyconvictedofataxcrimebyorderingthathecouldhidehisconvictionfromhisemployers.Inother
words,headmittedtheresasecretcaseintheEDNYwhereintheU.S.DepartmentofJusticeaskedforand
received leave for a convicted tax felon to continue preparing tax returns while defrauding clients by
concealing the material fact of his conviction. Gleesons opinion reads like a dare Dont appeal this
decision,becauseIknowwhereallthebodiesareburied.

So,forsolongasTrumpisnewsthecorruptionthatproducedSaterwillbenews,butthecorruptionthat
mayobliteratetheconvictionrecordsofJaneDoeandwhoknowshowmanyafterher(andcouldjustaswell
produce platoons of secretly convicted doctors, lawyers and teachers all allowed to remain in their
professionsdespitestatutorybars)willgoonunseen.

Atleastuntilsomefuturenewscyclewhensomeonefindsasecretlyconvictedchildpornographerteaching
ataschoolbecausehecooperatedsowasallowedtohidehisrecord.

***

Consider the docket of United States v. Shereshevsky, 94cr248 (SDNY). On May 5, 1994, he was
arraignedonachargeofbankfraud,plednotguiltyandwasreleasedonbail.Thatwaswhatthepublic
docketreflecteduntilJune26,2002.

Today,thedocketreflectsthatonthatdate,June26,2002,itwasenteredthateightyearsearlier,also
on May 5, 1994(the same date as the notguilty plea), Shereshevsky had actually pled guilty. The
SDNYkeptfalseinformationonapublicdocketforeightyears,defraudingthepublic.Onejudge,onSept.
24,2001,evenissuedaspeedytrialrulingonthedocket,tokeepuptheappearanceShereshevskyhad
plednotguilty.

Presumably,Shereshevskywasgiventhegiftofsecrecybecausehewasacooperator,andsureenoughhe
gotleniencytimeserved,supervisedrelease,andrestitutionof$39,000.Andwhatdidhedowithhimself
whilehewas,presumably,cooperating?LikeSateratBayrock,heperpetratedthemultihundredmillion
dollar WexTrust Ponzi scheme, according to the U.S. Securities and Exchange Commission raising $255
millionfrom1,196investorswithoutdisclosingthathewasaconvictedfelon.[17]
Meanwhile,thejudgewhoenteredthefraudulentspeedytrialruling,MichaelMukasey,likeLynch,wenton
tobecomeU.S.AttorneyGeneral.

OpenProceedingsOpenSentencingsMandatoryRestitution

Judicial proceedings and documents are presumptively open under commonlaw and First Amendment
principles. The sentencing of a defendant, to which there is a First Amendment right of access, must be
conducted in open court.[18] 18 U.S.C. 3553(c) U.S.v.Alcantara, 396 F.3d 189 (2d Cir. 2005). The
Mandatory Victims Restitution Act (MVRA) requires that defendants in certain crimes, including
racketeering,payrestitutiontothevictims.[19]TheCrimeVictimsRightsAct(CVRA)says:

Inanycourtproceedingthecourtshallensurethatthecrimevictimisaffordedtherightsdescribed
insubsection(a).Thereasonsforanydecisiondenyingreliefunderthischaptershallbeclearlystated
ontherecord.

Theserightsincludetherighttonoticeofandtobeheardatpubliccourtproceedingsinvolvingthecrime
therighttoconferwiththeattorneyforthegovernmentinthecasetherighttofullandtimelyrestitution
andtherighttoproceedingsfreefromdelay.[20]
Be assured: when a federal judge refuses to impose a mandatory sentence, unless its on Eighth
Amendment grounds, it is illegal. Ex Parte United States, 242 U.S. 27 (1916). And in Dolan v. United
States,103S.Ct.2553(2010),theSupremeCourtheldthatCongressmeantwhatitsaidintheMVRA,that
restitutionshallbeimposedatsentencingnotwithstandinganyotherprovisionoflaw.[21]
ThisisacopyofthepublicnoticeofSaterssentencing11yearsafterhewascharged:
Doesthatpubliccalendarnoticeofa"JohnDoe"sentencinggiveactualnoticetothepublicandtohisvictimsthatFelix
Saterwastobesentencedinpublic,consideringthewholecasedidntexist?ThatnoticewasavailableattheEDNY
website,alongwiththedailycalendarsforeveryjudgegoingback15years,untiltheauthortoldJudgeGlasserthatitwas
public.Itthendisappearedoffthepublicdocket.
Meanwhile,thenowpublictranscriptofhissentencing(98cr1101,No.202)shows(1)hewassentenced
under his real name, obviously linked with his criminal docket number, as the transcript contains the
captionandindexnumber(2)thespecificnatureofhiscriminalactswerediscussedand(3)hissentence
wasreadaloudthere.
And, within the last few years, the government and Judge Glasser have maintained that this sentencing
wasconductedinopencourt.
Thenwherewerethevictims?WhatstheexcusefortheEDNYU.S.Attorneyandthecourtnottellingthem
ofthecaseandtheopencourtsentencing?Evenifthecourtthoughtrestitutionwasexcused,itrepudiated
itsobligationtotellthevictimsandletthemcomeforwardinobjection.Rights,andthestandingtoenforce
them, given them by Congress. They are property for Fifth Amendment purposes. Yet they were denied
thembythecourt.Ifthisdenialwaslegal,whywasntitacompensablejudicialtaking?Ifitwasillegal,why
isnteveryoneinvolvedindictedorimpeached?

AllforOneandOneforAll:RestitutioninaCriminalSchemeorConspiracy
Wheremultipledefendantsareconvictedofaconspiracyorschemecrime,theirliabilityinrestitutionshould
bejointandseveral.[22]ItwouldbeoddifdefendantsA,BandChavingpledguiltytothesameRICO
crimes wound up with restitution imposed on C in one amount, on B in another, and on A not at all
becausenoonecouldfindvictims.
Felix Sater (98cr1101), Salvatore Lauria (98cr1102) and Gennady Klotsman (98cr313 98cr1069
02cr1313) all pled guilty to the same RICO crimes, according to a press release from the EDNY U.S.
AttorneysOfficeonMarch2,2000.[23]
According to April 10, 2004, and May 10, 2004, letters from Klotsmans counsel, Klotsman was already
servinga71monthsentence,andhadbeenorderedtopay[$40million]inrestitutionby[Glasser],as
confirmedbyhisjudgmentandconvictionorder.[24]
Meanwhile,LauriawassentencedonFeb.5,2004.Frompage5ofthetranscript:
THECOURT:Whoareallofthesepeoplethatyousayhesettledwith,whoarethey?

MR.STAHL:Theywereinvestorsthatfiledlawsuits.

THECOURT:Howmanywerethose?

MR.STAHL:Iwouldsayaboutbetween15and20.

THECOURT:That'sjustaminusculepercentageofthenumberofinvestorswhoweredefrauded,who
sufferedsubstantiallossesasaresultofMr.Lauria'sactivity.Fifteento20isnotevenadropinthe
bucket.

ButwhenSaterwassentenced(supposedlyinopencourt),howcomenoonecouldnotifyvictims?AUSA
Miller, there representing the government, now Caldwells chief deputy, was at the time the EDNY CVRA
complianceofficer.HecouldntatleasthavetoldProbationServicestonotifytheseknown15to20victims?

ItstimetomeetMyronGushlak.InU.S.v.Gushlak,[25]thedefendant,whodbeencooperating,hadhad
hisdocketsealed,solikeSatercouldanddidhidehisconvictionanddefraudnewinvestorsandpartners.
Eventuallywhenhewassentenced,thegovernment(LynchasU.S.Attorney)revokedhiscooperationand
askedfordenialofacceptanceofresponsibilitycreditashehadbeencooperatingonlytobeabletousethe
concealmenttodefraudagain.
Judge Garaufis sentenced him to six years, a fine of $25 million, and restitution of $17 million, the court
agreeingwithLynchthatitscriminalfraudtouseasealedcasethisway(unlesstheyreally,reallylikeyou,
likeSater).TheSecondCircuitaffirmed.

Now,Gushlakhad,likeSater,beenpumpinganddumpingstocks.Andhehadtwoequalcoconspirators,
RomanoandAppel,whoattestedtothat.[26]
All three pled guilty to the same securities fraud conspiracy, and admitted equal responsibility, so the
victimsandlosseshadtobethesame.

But when Romano came up for sentencing, the AUSA told the judge, Carol Amon, that there couldnt be
restitution because no one knew who the victims were, and in any event Romano had been a wonderful
cooperator, so would the judge please enter an order finding that no one could find the victims, so no
restitutioncouldbeawarded,andshedid.

Meanwhile, Appel was sentenced by yet a third judge, with the victims being awarded $2.9 million in
restitution. The difference between Appel and Gushlaks restitution can be explained by the two judges
disagreeinginmethodology.WhatcantbeexplainedthoughiswhyAppelsdocket04cr505hasalistof
the known victims and the amounts they lost dating back to 2008 when Romano was sentenced, and
Gushlaksdocketshowsthatthatwasconsideredinfixinghisrestitution,yetinRomanoscase,thesame
government,sameU.S.Attorney'soffice,didntknowwhothevictimswere,soaskedforanordertothat
effect,cuttingoffallvictimsrights,bycoincidence(nodoubt)sparingthewonderfulcooperator.

Isnt that weird? All these cases where everyone else gets an order of restitution payable to an existing
knownlistofvictims,butthereallygoodcooperatorisalwaysspared,thegovernmentclaimingthatnoone
knows who the victims are, and so no victims are told about the sentencing proceeding, though the
prosecutorisstatutorilyobligatedbytheCVRAtotellthem,andthusthevictimsaretherebydeprivedof
theirrighttoregistertheirpositionatsentencingthattheyareentitledtorestitution.Purefraud.

SchrdingersCourtroom

In2010,theHuffingtonPost reported unusual events in the courtroom of EDNY Judge Brian Cogan.[27]
Accordingtothestory,onDec.1,2010,mobsterSebbySaracinopledguiltyinopencourttoimmigration
fraud.Thenextday,tworeporterssawaJohnDoecasewiththesameindictmentnumberasSaracinos
on Judge Cogans docket. They went to Cogans courtroom and saw the same defense lawyer and same
AUSAElizabethGeddesfromthedaybefore.

WhenJudgeCogantookthebenchapparentlyunawarethattherewerereportersinthecourtroomhe
announcedthatthegovernmentsmotiontosealtheproceedingswasdeficient.However,theAUSAasked
forasidebar,andCoganthenannouncedthatthecourtroomwouldbesealed,topreventriskofharmtothe
defendant.

This is to say, the proceedings were to be public so long as no members of the public were actually
present. As soon as the prosecutor brought to the judges attention that there were reporters in the
courtroom,thecourtroomwassealed.Ofcourse,contrarytoSupremeCourtprecedent,therewasnoprior
publicnoticeofamotiontoseal.

Whatwentonthere?WenowknowthatSebbywasback,nowJohnDoe,thistimepleadingtoahalfdozen
actsofracketeering,likearson,murderandsoon.Why?BecausethishidfrombadguysthatSebbyhad
flippedagainsttheColombofamily.ButreadwhatColombobossTommyGioelisaidsoonafterinhisblog:
(Emph.added)

The number one rat in my case Dino Calabro is all over facebook without a care in the world. His
childrenareunafraidandunbothered.Hiswifehasaclearhead.Whydoyouaskaretheynotafraidof
thebigbadmanlikeme??Whydotheyannouncetheirnewaddressonfacebook?Becausetheyknow
thatthisbig,scary,meanfacethatthegovernmentpaintsmewithisallacharadedesignedbyour
government.WhydidAUSAElizabethGeddesnotconsideritamistaketosealthecourtroomforthe
pleadealwithSebastianSaracinowherehecommittedtoratonhisownbrother?Becausesheknew
thatnodangertoSebastianorDinooranyothergovernmentcriminalwitnessexists.Thelasttimea
criminal witness died a violent death was in episode 14 of the Sopranos on HBO. Mikey "Scars"
DeLeonardo(Rat)shopson18thAvenueinBrooklyn.JoeCampanella(Rat)stilllivesinthesamehome
wherehehaslivedbeforehebecameacriminalwitness.Overathousandofthesecriminalwitnesses
goabouttheirlivesunmolestedinanyway.ThegovernmentknowsthetruththatIamadangertono
one,unliketheirstarwitnesseswhoarepsychotickillers

BythewayJoe[Massino],keepallofthemillionsthatyourobbedandkilledfor.Oh, I forgot you

already get to keep it because when you join Team America all forfeitures, fines, and
restitutionstops.
Thepointis,partofthefraudistheconceptofsuperimposedcourtrooms.Thegovernmentandjudiciary
willclaim,asneeded,thatthesamecourtroomwasclosedoropenatthesametime,dependinguponwhom
theyrelyingto.Unlessyouthink,Wedontputalockonthedoor,wejustshutitdownwhenanyonewalks
iniswhatopencourtmeans.

CollateralEffects
Nor are the consequences of this limited to New York. A criminal conviction in the Ninth Circuit, U.S. v.
Kojayan,8F.3d1315(9thCir.1993),wasreversedbecauseofanSDNYcooperator,whowasnotdisclosed
tothedefendants.NotehowtheNinthCircuitexcoriatedtheentireU.S.attorneysoffice,notjustasingle
AUSA,andthenaskwhytheSecondCircuitemboldenswhattheNinthcondemns:

Troubled as we are by the prosecutor's conduct, we're more troubled still by the lack of supervision
and control exercised by those above him. The AUSA's superiors seem to have been unaware that
anythingatallwasamissuntilafteroralargumentinthiscourt.Itwasduringthatargumentthatthe
governmentfirstdisclosedNourian'sstatus:

[Q]:Wasthereacooperationagreement?

AUSA:Well,yourhonor,thatisnotsomethingthat'sintherecord.

[Q]:Iunderstand.Wasthereacooperationagreement?

AUSA:TherewasanagreementwiththeSouthernDistrictofNewYorkand[Nourian],yes.

How can a serious claim of prosecutorial misconduct remain unaddressed until oral argument in the
CourtofAppeals?Surelywhensuchaclaimisraised,someoneintheUnitedStatesAttorney'soffice
willtakeanindependent,objectivelookattheissue.
The prosecutorial misconduct in this case deprived the defendants of due process of law In a
situationlikethis,thejudiciaryespeciallythecourtbeforewhichtheprimarymisbehaviortookplace
may exercise its supervisory power to make it clear that the misconduct was serious, that the
government'sunwillingnesstoownuptoitwasmoreseriousstillandthatstepsmustbetakentoavoid
arecurrenceofthischainofevents.

StructuralErrorShouldCompelVacaturofSentencesforFailuretoDiscloseInformation
RegardingCooperators
Typical cooperation agreements stipulate that the defendant will have to make restitution and keep the
governmentapprisedofhisassets.SodidSaters.Theramificationsofallowinghimtokeepthemoneyhe
stolewhileaccumulatingfurthermillions,andtransferringthemintotrustsashedid,arestaggering.Ifthe
governmentknewthathewasdoingthatwiththemillionsheskimmedfromBayrock,andallowedit,thats
serious.Obtaininghis2009presentencereport,whichCongresscanforce,shouldtellthattale.
Butrelatedly,thedueprocessrightsofdozensofcodefendantsintheunderlyingandrelatedcaseswere
almostsurelyviolated,andthiscasemaybeonlyoneofmanysuch.Eachofthosecodefendantsmaywell
havearighttoseekvacaturoftheirpleas.
TheauthorassumesfamiliaritywithBrady,GiglioandJencks,harmlessversusprejudicialerror,andthat
structuralerrorisperseprejudicial,thatadefendantsdueprocessrightsalsoincludetherighttoatrial
presided over by a judge who has neither actual prejudice, bias or conflict, or the appearance of such,
violation of which is a structuralerror.[28] Indeed, the Supreme Court has held that a defendants due
process rights include the right to a trial presided over by a judge as to whom there is not even the
unconstitutionallyhighprobabilityofbias.[29]
In1998,aTenthCircuitpanelheldinU.S.v.Singleton[30]thataprosecutorspromiseofleniencyfora
cooperatorstestimonyviolatedafederalstatuteprohibitinggivinganythingofvalueinreturnfortestimony.
[31]Theremedywasexclusionofthetestimony.Thecasewasreversedaftersuasponteenbancreview.
Scores of other district and appellate courts chimed in,[32] holding that when a prosecutor offers a plea
bargainorleniency,whileitssomethingofvalue,hehasntviolatedthestatutesolongaswhatheoffersis
notillegalorultravires.
Butasentencethatwrongfullydoesnotincludemandatoryrestitutionbymeanscalculatedtohidethatfact
from victims is per se illegal and ultra vires. A sentence that wrongfully does not include mandatory
forfeitureisperseillegalandultravires.Thepromiseofsuchasentencemustalsobeperseillegaland
ultravires.[33]WithrespecttoSater,itisevident(attheleasttoastandardofunconstitutionalprobability)
that he was promised that, in exchange for cooperation, he could keep the money he stole and hide his
conviction. If so, the law was broken, because, as his nowpublic docket shows, he did receive that.[34]
This might explain why Glasser, the prosecutors and Saters counsel engaged in secret ex parte court
proceedingstodiscussmaintainingthesecrecy.[35]Inthatcasethereasongivenformaintainingsecrecy,
Saterssafety,wasallthemorepretextual,giventhathisidentityandcooperationweremademattersof
public record a decade ago, when Lynch issued the press release on March 2, 2000, saying that Sater,
LauriaandKlotsmanhadpledguiltytothe$40millionRICOfraud.
Theauthorsuggests,insum,thatSaterwasoffered,andaccepted,illegalgratuitiesforhiscooperation
viz., he was allowed to keep the money he admitted stealing. Of course, evidence of this is likely to be
circumstantialdontexpectaPerryMasonmomentofadmission.ButitiscuriousthatneitherLauriasnor
Satersinformationsincludeaforfeiturecharge,andthevoluntaryforfeituretheyadmitwasaninsignificant
fractionofwhatitshouldhavebeen.Butitismostcurious,becausethe2000Coppaindictmenti.e.,the
indictment of Saters and Laurias 19 coconspirators includes a forfeiture charge and the DOJ knows
perfectly well, and knew in 1998, that without such a charge a subsequent attempt to get a criminal
forfeitureorderaspartofsentencingwouldfail,eventhoughtheDOJsattempttoobtainsuchisrequiredby
themandatorysentencinglawsembeddedinsidetheRICOstatutes.

Itsalmostcertainthisisnoaccident,thatabsenceofsuchachargeincriminalinformationsisabackdoor
wayforprosecutorstoarrangewithacooperatingdefendant,Wellfoulyourinformationsoyouwontsuffer
forfeiture.[36] If so, or if its so in other cases, that too must be structural error if not disclosed per
Brady/Giglio/Jencks.

PrecludingEvidencetoPreventRevelationofIllegalDealsinExchangeforCooperation
U.S.v.Basciano[37]isillustrative.There,thecourtbarredBascianosintroductionofevidenceofnotoriously
lenientsentencesEDNYcooperatorshadreceived,eventhroughcrossexaminationofcooperatorstestifying
againsthim,aslikelytocreateconfusion:

ThedefendanthasmovedfortheCourttopermitcrossexaminationofcooperatingwitnessesaboutthe
sentences that Salvatore Vitale, Sammy the Bull Gravano, and other cooperating witnesses have
receivedasaresultofcooperatingwiththegovernment,defendantsmotionisdenied.TheCourtfinds
thatsuchquestioningaboutcooperatorsimpressionsofthebenefitsofotherspecificcooperators,that
otherspecificcooperatorshavereceived,isnotessentialtoeffectivecrossex
aminationforbias.
TheCourtfurtherfindsthatsuchexaminationisbothprejudicialandlikelytocreateconfusion.

[For] the same reasons, the defense will not be permitted to reference the sentences spe
cific
cooperatingwitnesseshavereceivedduringtheiropeningstatement.[38]
Would the same hold where the defendant would introduce evidence of promising illegal sentences to
cooperators? Shouldnt the defense be told? Shouldnt defendants know that some defense lawyers,
especiallythose,likeSaters,whoareformerprosecutors,canmakesuchspecialdeals?

HowDidtheSecondCircuitGoAstray?

Sometimewithinthelast50years,theSecondCircuitbeganexperimentingwithexpedientconstitutional
analysis, an experiment authorized by no one, certainly not by the Framers, characterized by a
determinationtodowhatevertheDOJsaysisnecessarytofightorganizedcrime.

Thiscouldbeseenasfarbackasthe1970s,indecisionsallowinganonymousjuries,andsoonaftercouldbe
seenintheeasewithwhichEDNYandSDNYcourtsdisappearedentirecasesanddocketsofcooperators.
Interestingly, when this was first outed, the DOJ claimed that it was not done to protect cooperator
safety.[39]
Astosealingandclosure,thisseemstohavehititsnadir(onecouldhardlycallitazenith)oflawlessness
with the Second Circuits decision in U.S. v. Doe, 63 F.3d 121 (2d Cir. 1995),[40] wherein the court
circumventedtheSupremeCourtsdecadeslongdevelopmentoftheRichmondlineofconstitutionalaccess
jurisprudence.[41]Doeheldthat,yes,theSupremeCourtrequireddetailedfindingsofcompellinginterest
capableofappellatereviewbeforeclosureofaproceedingtowhichtherewasaqualifiedFirstAmendment
rightofaccess,butthenadded,toparaphrase:Well,theSupremeCourtneversaidwhencethosefindings
maycome,soasfarasthiscircuitisconcerned,itsOKbyusifacooperatingdefendantaskstohidehis
entire criminal case because he feels subjectively feels he might be at risk. No corroboration is
requiredinthiscircuit,evenifitsallinsecret,solongasthegovernmentdoesntobject.Andtheabsence
ofevidenceofriskcouldbeallthedistrictjudgeneedstosupportafindingofnecessityofclosure.[42]
This repudiates 85 years of First Amendment law, which requires particularized findings of otherwise
unavoidable,nearcertaingraveimminentharm.
Itisacontrivance,forthereisnooneinsuchacourtroomspeakingoutforthepublicobjectingtoclosure,if
these sealing proceedings are not even publicly docketed. And that this could purport to enable such
secretblanket sealing, let alone of decadeslong duration, as here, is beyond comprehension. When Doe
closures occur, there is no one who knows about it to object, no one who speaks for openness. And it is
provablethatmanydistrictcourtjudgesdontcare.

SecrecyIneluctablyLeadstoFraud
IntheSecondCircuitsJune29,2011,decisioninRoev.USA,anappealhandledbythisauthor,thecourt
stated:
The remainder of this cause is REMANDED to the District Court (I. Leo Glasser, Judge) for
proceedingsconsistentwiththisorderandwithinstructionstoruleuponthegovernment'sunsealing
motion.
BindingCircuitprecedentholdsthatsuchmotionsaretobetakenupexpeditiously.[43]Sohowshouldthe
publicfeelaboutthefact,revealedafterthedocketof98cr1101wasfinally,albeitinadvertantly,unsealed
in August 2012, that after the Second Circuit issued its instructions to Glasser to take up the March 17,
2011,motiontounsealthegovernmentmadeasecretexparteapplicationtowithdrawthatmotion?(98cr
1101No.120).Glasserssecretordergrantingthemotionstates:

FILEDUNDERSEAL
ORDER
A letter motion, dated August 24, 2011, has been made by the government seeking an Order that
wouldpermitittowithdrawanunsealingmotionmadeonMarch17,2011,withoutprejudiceandwith
leavetorefilethatmotionatalater,unspecifieddate.

Themotionisherebygranted.
SOORDERED.

/s/I.LeoGlasser

SentbyFaxto:
ToddKaminsky,[44]AUSA7182546669
MichaelBeys,Esq.,2123878229

What compelling interest was served by keeping secret from this author that the government was
withdrawingitsmotiontounsealthecase?IsntitlikeShereshevsky,wherethepublicdocketshowednot
guiltybutthesecretdocketshowedguilty?Howcouldthedistrictcourthavebelieveditpropertohave
keptfrompartiesandcounselsforeightmonthsthattheMarch17,2011,motionhadbeenwithdrawn,a
motionthatthegovernmenthadadvisedtheSecondCircuitanddistrictcourtthatitwasethicallyboundto
make?

ConsidercarefullythisstatementintheSecondCircuitsJune29,2011,decision[Emph.add.]:

AfteranitembyitemreviewofthespecificinformationthatRoewishedtopubliclyreleaseincluding
(a) John Doe's real name, linked with his criminal docket number, (b) the specific nature of the
predicateactsleadingtohiscriminalconviction,and(c)thesentenceimposedbytheDistrictCourt
JudgeCoganconcludedthattheinformationeitherwasnotpublicatallorwasnotpublictotheextent
and with the level of detail that Roe intended to disclose. Accordingly, he denied Roe's request for
permissiontoreleasetheinformation.Order,UnitedStatesv.Doe(E.D.N.Y.May13,2011).Uponour
own independent review, we agree with Judge Cogan that Roe's proposed disclosures would have
violatedourtemporaryinjunctionofFebruary14,2011andthesealingordersofJudgeGlasser.
JudgeCogan'sorderofMay13,2011isaffirmed.
When the docket of this 1998 case was finally made public by the EDNY in August 2012, and only then
becauseitwasinadvertentlymadepublicbytheclerkofthecourt,itconfirmedwhatJudgeGlasserhad
saidontherecordtwoyearsearlierinopencourt,thathehadneverissuedanysealingorderinthecase,
thattherewerenonesignedbyhim.[45]
TheSecondCircuitcouldnotpossiblyhaveconductedanindependentreviewofthesealingordersofJudge
Glasser, unless it can read invisible ink. And how could Judge Cogan have concluded, and the Second
Circuithaveaffirmed,thatthisinformationwasnotpublic?AndhowcouldtheSecondCircuithaveagreedit
wasnonpublic,baseduponitsownindependentreview?

AndWhatoftheRuleofLaw?

Agovernmentoflawsexiststoupholdjustice,andnotmerelytosellittothehighestbidder[46]Howmuch
didSaterpayforhisdeal?Howmuchwouldaconvictedracketeerpaytohidetheconviction,keepthe
money,andknowhewillbeprotected,emboldenedtocommitfuturecrimesbecauseifanyonefindsouthe
candragthemintosecretcourtproceedingstoshutthemup?

Asthisiswritten,RoyAgeloff,aformerassociateofSaters(theypumpedstockstogether,heatGenovese
connected Hanover Sterling, Sater at Genoveseconnected State Street) is in, or was recently released
from,federalprisonformoneylaunderingbecausebeginningin1998,whenhedecidedtopleadguiltyin
the EDNY to crimes similar to Saters, he had his friends, family and lawyer hide $3.5 million of criminal
proceedstoevaderestitutionandforfeiture.[47]
Now,Saterscooperationagreementprovidedthathewouldinformthegovernmentofhisassets,andthat
100 percent could be taken to pay any restitution order the court were to impose. So how is it that for
Agelofftohideproceedsofillegalactivity(stockfraud)toevaderestitutionismoneylaunderingandaticket
to prison, yet the same thing done by Sater, hiding proceeds of illegal activity (restitution fraud on his
victimsandconcealmentfraudonBayrock,nottomentionthemultimilliondollarskimsthathetookfrom
thefirm),isnot?Hestuffedmuchofitintotrustsbeforehissentencing(theyalldo)totrytoprotectit,just
incase.Andhowisitthattheauthorandhisclientwererestrainedfromreportingthathedidso?Thevery
ideaofagovernment,republicaninform,impliesarightonthepartofitscitizenstomeetpeaceablyfor
consultationinrespecttopublicaffairsandtopetitionforaredressofgrievances.[48]Thatis,therightto
reportcrimeisaninalienable,naturalright,precedingtheexistenceoftheConstitution.

WhatSatergotfromthegovernmentinexchangeforhiscooperationtheright,ifyouwill,tokeepthe
moneyhestole[49]isofutmostimportance,sinceatthetimeofsentencing(andthereafter)hewas
represented by Leslie Caldwell, who is now the Assistant Attorney General of the United States, Criminal
Division, and Caldwell appointed Marshall Miller of the EDNY U.S. Attorneys Office to be her secondin
command.AtSaterssentencing,theywerebothpresentinthecourtroom.
CaldwellwasalsotheheadofMorganLewisswhitecollarpracticegroupwhenitmovedinMay2010togag
my client from revealing information showing that Sater had been convicted of RICO fraud and that in
exchangeforhiscooperationhehadbeenallowedtokeepthemoneyhestole.Caldwellappearedincourtin
SatersbehalfinfrontofGlassertoshutdownanypublicmentionthatSaterhadactuallybeenconvictedof
participatingina$40millionRICOfraud.

Yet his sentencing transcript (which was not made public until March 14, 2013) and remember the
sentencingwasOct.23,2009,onlyeightmonthsbeforeCaldwellaskedforagagordershowsthathis
realnamewasusedthroughout,andasthegovernmentandJudgeGlassernowmaintainthatitwasheldin
opencourt,thenonemustpresumethateitherthegovernmentandJudgeGlasserarelying,oritwasin
opencourt.Eitherway,Caldwellwouldhavetohaveknownwhethershewasinopencourtorclosedcourt.

So,assumingitwasinopencourt(asthelawrequired),whywasCaldwellincourtin2010arguingthatany
publicmentionofSaterssentencingmustbeenjoined?Sincethatsentencingoccurredinopencourt,itwas
indeedofficiallyandpubliclyacknowledgedthatSaterwasacooperator.Thebelatedlyunsealedtranscriptof
thisallegedlyopencourtproceedingshowsthefollowing:

MS.CALDWELL(counselforSater):UnlessthecourthasanyquestionsabouttheDWI.

THECOURT:Doesthegovernmentwanttocommentonitnow?

MR. KAMINSKY: No, Your Honor, other than the fact that we think this incident, while unfortunate,
doesnotreflectinanywayontheextraordinarycooperationMr.Saterprovided,startingin1998and
continuingnearlyuptothepresentday.

***

Mr.SaterflewtotheUnitedStatestosurrendertotheFBI.Hebegantocooperate,pledguiltyin
1998,andhesbeencooperatingeversince.

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. Sater worked.
Again,hesurrenderedin1998.NoonehadyetbeenprosecutedinconnectionwiththeStateStreet
brokeragefirmwhereheworked.Butthegovernmentwasabletoprosecutemorethan19peopleat
variouslevelsofthatoperation,rangingfromthebrokers,tothepeoplewhoweretransferringmoney
...
***

MS.CALDWELL:InanyeventyourHonorIthinkMr.Saterisreallydeservingofthefullmeasureof
leniencythatthiscourtcanimposegiventheextraordinarycircumstancesofhiscooperationandthe
facthehasreallyrehabilitatedhimselfintheselastreallysince1996.Thankyou.

***

[MR.KAMINSKY]:Timeandagainallagentshere,andnumerousotherswhocouldntbeheretoday,
have told the government Felix Sater was one of the best cooperators we worked with. There was
nothinghewouldntdo.Notaskwastoobig.

FBIAgentTaddeotestifiedatthenowpubliclydocketedOct.23,2009,sentencing,againinopencourt,as
toSaterscooperation:

AGENT TADDEO: [H]e was instrumental [in] 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
pennystockbusiness.

MarshallMiller,whowasthentheAUSAresponsibleforvictimrestitution,nextstated:

MR.MILLER:YourHonor,Idontwanttotrythecourtspatiencebyrepeatingwhathasalreadybeen
saidbyMs.Caldwell,Mr.Kaminsky,andAgentTaddeo,butIdidwanttounderlinetwothings.One
wasMr.Saterscooperationwiththeofficeandthemanyinvestigationsheparticipatedin.Thelength
ofhiscooperationisextraordinary.AndIwantedtobeheretoexpressfromtheofficesperspective
justhowcapableacooperatorhewas,howimportantacooperatorhewas,andhoweffectivehewas.

MillerfailedtorequestthatanorderofrestitutionbeimposeduponSaterorattheleastthatthevictimsbe
told what was going on, though it was his duty as the Crime Victims Rights ombudsman in the EDNY
prosecutorsofficetodoso.

And,inasmuchasthesentencingwasopentothepublic,Caldwell,byseekingeightmonthslatertogag
information that was publicly disclosed in open court viz. Saters conviction and cooperation had
engagedinanactualfrauduponthecourts.

***

InLorettaLynchsresponsetoSenatorOrrinHatchswritteninquiry,requestingthatshedetailheroffices
compliancewiththeMVRAandCVRA,shestatedthattheinformationastoSatersrestitutionremainsunder
seal.

Thisshouldbeimpossible,becausethevictimsareentitled,undertheCVRA,tobetoldoftheirrestitution
rights. Unfortunately its almost certainly a lie, as the author and his client have definitive orders from
Glassersupposedlylistingeverythingstillunderseal,andnothinglikethatisonthelist,notevenremotely
close.

Then,tryingtodistanceherselffromtheSatermatter,LynchstatedinherwrittenresponsetoSen.Hatch
that [t]he initial sealing of the records related to Sater which predated my tenure as United States
Attorney occurred by virtue of a cooperation agreement under which Sater pled guilty and agreed to
serveasagovernmentwitness.WhatsheevadedisthefactthatshesignedSaterscriminalinformationin
hercapacityasActingUnitedStatesAttorney.(98cr1101,No.18).[50]
Andnow,Lynch,whoseAUSAsspentfiveyearsfightingtokeepthisstoryfrombeingtold,hasbecomethe
United States Attorney General, joining former EDNY Assistant U.S. Attorneys Leslie Caldwell, Marshall
MillerandAndrewWeissmann,allofwhomhaveparticipatedinconcertwiththejudgesoftheEDNYand
the Second Circuit in the conduct and coverup of Saters prosecution, conviction and sentencing,
wherebyhewasallowedtokeepthemoneyhestole.

Conclusion
TheofficialunsealingofthedocketonAug.27,2012,shouldhaveendedanyjustificationforcontinued
secrecy,asitwasofficialthatDoewasSater.Yetthegovernmenthascontinuedtothisdaytorepudiate
itsobligationstotellSatersvictimsofthecase,theirrights,andthattheyvebeendeprivedofthem.And
thedistrictcourtandSecondCircuitcontinuetorepudiatetheirobligationtoensurethatthegovernment
does.

The author challenges the United States Court of Appeals for the Second Circuit and the district courts
withinthecircuittoacknowledgethattheyhavecreatedanunconstitutionalregimeofjudicialnullificationof
theConstitutionandstatutebytheillegalconcealmentofcriminalcasesandwithittheimpositionofillegal
sentences,withripplingeffectsthathavecausedbillionsandbillionsofdollarsofharmtothepublic.

Theauthorchallengesthem,andtheDOJ,toexplainwhySaterscooperationagreementwasnotrevoked
on the spot, and why he was not denied acceptanceofresponsibility credit, when at his sentencing he
confessedtohavingusedthesecrecyofhisconvictiontocommitbankfraudforyearsatBayrock.Whywas
hetreateddifferentlythanGushlak?Whatoftheruleoflaw?

Therewillbenoapologyforthetoneofthisarticleattorneyshavethesamerighttocriticizethejudicial
branchastheothertwo,bluntlywithoutfearofreprisal.Infacttheyhavespecialobligationstodosowhen
theyobservemisconduct.Anynotionthatberobedjudgesmeritunboundeddeference,thatlawyersmust
treatjudgesasahigherorderofbeingthanlegislatorsandexecutives,isrejected.AsJohnMiltonwrote,
Assuredlywebringnotinnocenceintotheworld,webringimpuritymuchratherthatwhichpurifiesusis
trial,andtrialisbywhatiscontrary.Judgesshouldunderstandunlesstheyhavebeenfartoocloistered,
fartoolongthatcriticismofthem,notwithoutdustandheat,servestopurifythem,sotospeak,andis
presentedforthegoodofthepublic,andindeedfortheirowngood.
ByRichardE.Lerner,TheLawOfficeofRichardE.LernerPC
RichardE.LernerisaNewYorkbasedattorney,formerlyapartnerwithWilsonElserMoskowitzEdelman&
DickerLLP,wherehepracticedformorethan20years.TheauthorwouldliketothankattorneyFrederick
Oberlanderforuncoveringmuchofthejudicialandprosecutorialmisconductdiscussedinthisarticle.
DISCLOSURE: The author represents attorney Frederick Oberlander in efforts to expose secret
criminal cases in the EDNY. Through these efforts, Saters John Doe docket and most of the
documentsinitweremadepublic.TheauthoralsorepresentedMr.Oberlanderonpetitionfora
writ of certiorari (Supreme Court Docket 12112), which petition, unsealed by the High Court,
madepublicthattheEDNYhadletthis"JohnDoe"usethesecrecyofhiscasetocommitfurther
frauds for a decade. Mr. Oberlander represents parties seeking restitution in the matters
discussedinthisarticle.
TheopinionsexpressedarethoseoftheauthoranddonotnecessarilyreflecttheviewsofPortfolioMedia
Inc.,oranyofitsaffiliates.Thisarticleisforgeneralinformationpurposesandisnotintendedtobeand
shouldnotbetakenaslegaladvice.

[1]See,e.g.,ThereWillNeverBeaPresidentTrump,Hiaasen,TheMiamiHerald,July11,2015(Trumps
roleinfraudinTrumpInternational,aFloridaprojectonwhichhedpartneredwithSater,whereinvestors
werenttolditwasnotTrumpsashedonlysoldhisname)UnderOath,DonaldTrumpShowsHisRaw
Side,BarbaroandEder,TheNewYorkTimes,July28,2015(similar).

[2] Such cooperator deals is not just a Second Circuit problem DOJ Inspector General Horowitz just
releasedareportfindingthatthegovernmenthasprovidedillegalassistancetodruginformants.SeeDrug
Traffickers who Cooperate with the Government Have it Pretty Good Too Good," Watchdog Says,
WashingtonPost,July27,2015,http://www.washingtonpost.com/blogs/federaleye/wp/2015/07/27/drug
traffickerswhocooperatewiththegovernmenthaveitprettygoodtoogoodwatchdogsays/.

[3]TheTrumpOrganizationwasnotaparticipantinthistaxfraud.

[4] Others have noted problems in Lynchs office: Federal prosecutors in New York's Brooklynbased
EasternDistrictpursuedcasesagainstsecret,unnamedJohnDoedefendants58timessinceLorettaLynch
became head prosecutor in May 2010. Two of the 58 are terrorism cases. Loretta Lynchs Secret
Prosecutions,JohnnyDwyer,February26,2015,http://www.nbcnews.com/news/usnews/lorettalynchs
secretprosecutionsn294666.

[5]AndrewWeissmann,nowtheChiefoftheCriminalFraudSectionintheU.S.AttorneysOffice,wasone
oftheoriginalprosecutorsintheEDNYcaseagainstFelixSater,discussedinfra.

[6]ThismaybethefirstcaseinhistorywhereacourtdirectedAmericancitizensnottoreportprosecutorial
andjudicialmisconducttothepublic,themediaorCongress.(Theorderitselfremainsunderseal,though
itscontentsweredisclosedbytheSupremeCourtin2012.)

[7]FactssetforthinthisbulletpointlistarefromadocumentthatFelixSaterhimselfmadepublicasan
exhibittoalawsuithefiledinIsrael,seehttps://www.scribd.com/doc/272670738/SaterTelAvivExhibit,
aswellasfromSaterssentencingtranscriptandtheU.S.SupremeCourtspublicdocketofthecase,and
otherpublicdocuments,discussedinfra.
[8]EDNYdocket98cr11,entry202(unsealedonMarch14,2013).infra.

[9] See Stock Promoter Myron Gushlak Gets 6Year Prison Term,
http://www.bloomberg.com/news/articles/20101118/stockpromotermyrongushlakgetssixyear
prisontermformanipulation.SeealsodiscussionofU.S.v.Gushlak,infra.

[10]SeeSater'sOct.23,2009sentencingtranscript,EDNYdocket98cr1101,entry202(unsealedMarch
14,2013).https://wiselawny.files.wordpress.com/2013/09/satersentncetranscrpt.pdf,andPDFpage75,
etseq.ofthePetitionforaWritofCertiorariinthe14676filedintheU.S.SupremeCourtinPalmerand
Oberlander v. Doe, http://c10.nrostatic.com/sites/default/files/PalmerPetitionforawritofcertiorari14
676.pdf

[11] See April 30, 2015 order of Magistrate Maas, 10cv3959.

http://ia800301.us.archive.org/10/items/gov.uscourts.nysd.362805/gov.uscourts.nysd.362805.142.0.pdf,
and pages 4143 of the transcript of April 14, 2015 proceedings,
http://ia600301.us.archive.org/10/items/gov.uscourts.nysd.362805/gov.uscourts.nysd.362805.140.0.pdf

[12]DisappearingDockets,TheNewsmedia&TheLaw,Winter2006.

[13]http://cryptome.org/2014/05/monsegursentencing.htm.Pp.78.

[14]CooperationandPleaAgreements,79FordhamL.Rev.65(2011).pp.6970.

[15]http://ccresourcecenter.org/wpcontent/uploads/2015/05/DoevUS.pdf:

[16]ExParteUnitedStates,242U.S.27(1916).

[17]Seehttp://www.sec.gov/litigation/complaints/2008/comp20678.pdf.

[18]18U.S.C.3553(c)U.S.v.Alcantara,396F.3d189(2dCir.2005).

[19]18U.S.C.3663A

[20]18U.S.C.3771,(b)(1).

[21]18U.S.C.3663A.Theonlyexceptionisifthenumberofvictimsissolargeorthecalculationoflosses
wouldcomplicatetheproceedings.Eventhen,thegovernmentmustgiveeachvictimnoticeofproceedings
sotheycanobjectbysuingforit.SeeinInreWRHuff,409F.3d555(2dCir.2005)(governmenthadduty
tonotifytensofthousandsofvictimsofRigasfrauds.)

[22]18U.S.C.3663A(a)(2).

[23] Organized Crime on Wall Street, House Committee on Commerce, Sep. 13, 2000, p.199 fn.2.
http://www.gpo.gov/fdsys/pkg/CHRG106hhrg67115/pdf/CHRG106hhrg67115.pdf

[24]ThejudgmentonthedocketwassealeduntilMarch13,2015,onapplicationofvictimBrianVodicka
however,itwasdocketedonarelatedcasedocket.ThemainKlotsmandocket,98cr1069,remainssealed.
Anditissealedeventhoughtheinformationispublic,readilyavailableinarchivesoftheCoppacase,but
alsoreportedintheDecember17,2007NewYorkTimesarticle,RealEstateExecutiveWithHandinTrump
ProjectsRoseFromTangledPast.Howcouldamanhavebeensenttoprison,yetnomemberofthepublic
wouldevenknowbecausehisdocketremainedsealed?Howwashesentencedinopencourt?Howarehis
victims receiving restitution? And given that there was a restitution order, doesnt that mean that the
governmenthasalistofthevictims,anditwouldnotbeundulycomplicatedtocalculatethelossescaused
bySaterandLauria?

[25]495Fed.Appx.132(2dCir.2012).

[26]See03cr833,Nos.701and703.

[27]WiseguyFlipsBlunderbyUSAttorneysOfficeGivesItUp.

[28]Ajudgesinvolvementinaschemeofillegalsentencingisobviouslynecessarytoitsfulfillment:onlya
judge can impose sentence. Where, as here, the illegality is not extrinsic (e.g. the defendant bribes the
prosecutor for a downward departure recommendation), but intrinsic (the sentence imposed is facially
illegal), the judges involvement and mensrea must be presumed. And leniency conferred under a plea
agreementissubjecttotheapprovalofthedistrictcourt.FedR.Crim.P.11.
[29]Capertonv.A.T.MasseyCoalCo.,556U.S.868(2009).

[30]144F.3d1343(10thCir.1998),revdenbanc165F.3d1297.

[31]Thecase(s)presumedtheabsenceofcorruptionthus,thetermispaymentofanillegalgratuity.18
U.S.C.201(c)doesnotrequirecorruptness,butonlytheinreturnforexchange.

[32]CourtsRushtoExtinguishSingleton,butAretheEmbersofthePanelsDecisionStillGlowing?,27Fl.
St.L.Rev.325(1995).

[33]18U.S.C.201(c)criminalizesgiving,promising,oroffering.Theresultherewouldbethesameevenif
onlytheperformanceofthepromisewereillegal.

[34]U.S.v.Kinlock,174F.3d297(2dCir.1999).

[35]See,e.g.,EDNY98cr1101docketentryofJanuary10,2012:AStatusConferenceastoFelixSater
washeldon1/10/2012beforeSeniorJudgeI.LeoGlasser:AUSAToddKaminskyandEvanNorrisappeared
onbehalfoftheGovernment.MichaelBeysandJasonBerlandappearedonbehalfofJohnDoe.TheCourt
directedthegovernmentandJohnDoetoprovideadetailedchronologicalaccountwithtranscripts,ofwhat
thecoreissuesinvolvingthiscaseand how it evolved into a First Amendment issue. The Court will
issueanOrderonNoticetoMr.LernerdirectingthepartiestobrieftheissuesbeforetheCourt.Theparties
agreed to submit a Scheduling Order to the Court to be So Ordered. That is, Glasser held an ex parte
conferencetodiscussthecoreissuesraisedbytheauthorinbehalfofMr.Oberlander,anditisonlybecause
theclerkaccidentlymadethedocketpublicthatsuchmisconductbecameknown,whichinadvertencewas
discovered by reporter Dan Wise. See https://wiselawny.wordpress.com/2012/09/11/thejohndoeback
storyareportersdilemma/

[36]LauriastellallaccountofhisRICOconspiracy,TheScorpionandtheFrog,discussesquiteexplicitlyhis
illicitnegotiationswiththegovernment,andabouthowmuchoftheproceedsofhiscrimeshewouldgetto
keepifheweretocooperate.

[37]EDNYDocketNo.05CR00060(EDNY).

[38]Id.,TrialTr.at450708(Apr.11,2011).

[39] Secret Pleas Accepted by U.S. Attorney in City, NewYorkTimes, April 23, 1982 Audit Criticizes
U.S.ProsecutoronSecretPleas,NewYorkTimes,July4,1983.

[40]Naturally,thearchivefileofthisSecondCircuitcaseisnonexistent.

[41]RichmondNewspapersv.Virginia, 448 U. S. 555 (1980) PressEnterprise Co. v. Superior Court of

Cal,464U.S.501(1984)PressEnterpriseII,478U.S.1(1986).

[42] This is how the Second Circuit put it: [I]n some circumstances it might be within a district court's
discretiontograntclosurewithoutevidenceofadirectthreatorotherevidencecorroboratingadefendant's
subjective fears. The problem of retaliatory acts against those producing adverse testimony is especially
acuteinthecontextofcriminalorganizations,suchastheoneinwhichDoeallegedlyparticipated.Hence,a
district court in such a case might attribute the lack of a direct threat to the very confidentiality that the
defendantorwitnessseekstopreserve.Thedistrictjudgealsomightrecognizethatadirectthreatmay
notalwaysbeforthcoming.Inanyevent,thelackofaspecificevidentiaryconfigurationneednotconstrain
thedistrictcourt'sdiscretion.63F.3dat130.

[43]Lugosch v. Pyramid Co., 435 F.3d 110 (2d Cir. 2006) ([T]he district court erredin failing to act
expeditiouslythedistrictcourtmustmakeitsfindingsquickly.Ourpublicaccesscasesandthoseinother
circuitsemphasizetheimportanceofimmediateaccesswherearighttoaccessisfound.)

[44]FormerAUSAKaminskywasrecentlyelectedtotheNewYorkAssembly,representingsouthernNassau
County,andmayrunfortheNewYorkSenate.

[45]See98cr1101transcriptofJuly20,2010,p.17.

[46]UnitedStatesv.Singleton:AWarningShotHeardRoundtheCircuits?40B.C.L.Rev.897(1999).

[47]U.S.v.Ageloff,08cr32(MDFL).

[48]UnitedStatesv.Cruikshank,92U.S.542,552(1876).

[49]GiventhatwenowknowthatSaterwasnotsentenceduntilOctober23,2009,andthatanupdated
PSRwasdraftedbytheProbationOfficeamonthpriorthereto,itisrathercuriousthathewasonlyordered
to pay a $25,000 fine, and no restitution after all, Saters W2s for 2007 show he had an income of $6
million.Ofcourse,theywerecompletelyfalsified,partoftherampanttaxfraudatBayrock,butSaterwould
nothaveadmittedthattoProbationServices.Thenagain,ifhedidandtheysaidnothingaboutittoanyone,
thatsanotherissue,isntit?

[50] See, Loretta Lynch Caught in Deceptive Disclaimer, New York Observer, Sydney Powell, March 3,
2011, http://observer.com/2015/03/breakinglorettalynchcaughtindeceptivedisclaimer/ and note
Lynchs signature on Saters criminal information:
http://ia600300.us.archive.org/10/items/gov.uscourts.nyed.166709/gov.uscourts.nyed.166709.18.0.pdf
AllContent20032015,PortfolioMedia,Inc.

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Unlessyoureareallygoodcooperator,likeSater.Didtheythinkhis concealments were somehow legal?

BythewayJoe[Massino],keepallofthemillionsthatyourobbedandkilledfor.Oh, I forgot you

[11] See April 30, 2015 order of Magistrate Maas, 10cv3959.

[41]RichmondNewspapersv.Virginia, 448 U. S. 555 (1980) PressEnterprise Co. v. Superior Court of

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