Top Judge Speaks Out Again Over America For Sale

Citizens United Attacks From Justice Stevens Continue
The Huffington Post by Mike Sacks - May 31, 2012

WASHINGTON, DC -- A day after receiving the Presidential Medal of Freedom, retired Justice John Paul Stevens on Wednesday night backed President Barack Obama's suggestion during his 2010 State of the Union address that the Citizens United decision could lead to "foreign entities" bankrolling American elections.  He urged the U.S. Supreme Court to explicitly explain why the president's words were "not true," as Justice Samuel Alito famously mouthed on camera, breaking the justices' usual stoic appearance during the president's annual speech.  Stevens has been a trenchant critic of Citizens United since the court decided the case in January 2010. On the day the opinion was announced, he spent 20 minutes reading from the bench a summary of his 90-page dissent. Stumbling over some words that day convinced Stevens, now 92, to retire, but he continued to condemn the ruling in speeches, writings and even on the Colbert Report.

In a speech at the University of Arkansas' Clinton School of Public Service, Stevens challenged his former colleagues to defend Alito's "not true" moment by reconciling the court's sweeping language in Citizens United that the First Amendment "generally prohibits the suppression of political speech based on the speaker's identity," with its subsequent decision -- made without briefing, argument, or written opinion -- to uphold a ban on campaign spending by non-citizens.  Alito's reaction, Stevens said, "persuade[s] me that that in due course it will be necessary for the court to issue an opinion explicitly crafting an exception that will create a crack in the foundation of the Citizens United majority opinion." In doing so, he continued, "it will be necessary to explain why the First Amendment provides greater protection to the campaign speech of some non-voters" -- that is, domestic corporations -- "than to that of other non-voters" such as the Canadian Harvard Law School graduate who remains barred from making campaign contributions.  The lawsuit brought by the Canadian citizen "unquestionably provided the court with an appropriate opportunity to explain why the president had misinterpreted the Court's opinion in Citizens United. "[T]he court instead took the surprising action of simply affirming the district court without comment and without dissent."  The decision in that case, Bluman v. FEC, meant that "notwithstanding the broad language used by the majority in Citizens United, it is now settled, albeit unexplained, that the identity of some speakers may provide a legally acceptable basis for restricting speech," Stevens said.  But the court cannot forever evade a written reckoning with the logical conclusion of its Citizens United decision, Stevens said.  "I think it is likely that when the court begins to spell out which categories of non-voters should receive the same protections as the not-for-profit Citizens United advocacy group, it will not only exclude terrorist organizations and foreign agents, but also all corporations owned or controlled by non-citizens, and possibly even those in which non-citizens have a substantial interest," Stevens said, referencing a case in which he joined the Citizens United majority to hold that speech made or funded by terrorist groups have no First Amendment protection. "Where that line will actually be drawn will depend on an exercise of judgment by the majority of members of the court, rather than on any proposition of law identified in the Citizens United majority opinion."  The justices will soon have another opportunity to clarify the scope of Citizens United in a challenge to Montana's corporate spending limits brought by an out-of-state organization. Although Stevens did not explicitly reference this case, which the justices will discuss in private at their June 14 conference, he lambasted the Citizens United majority for overruling a precedent that allowed states to bar corporate spending from beyond their borders. For the states with such laws, "those corporate non-voters were comparable to the non-voting foreign corporations that concerned President Obama when he criticized the Citizens United majority opinion," Stevens said.  "If the First Amendment does not protect the right of a graduate of Harvard Law School to spend his own money to support the candidate of his choice simply because his Canadian citizenship deprives him of the right to participate in our elections, the fact that corporations may be owned or controlled by Canadians -- indeed, in my judgment, the fact that corporations have no right to vote -- should give Congress the power to exclude them from direct participation in the electoral process," Stevens concluded.

Top Judicial 'Ethics' Lawyer Tembeckjian Settles His Lack-of-Sex Lawsuit

Judicial 'Ethics' Chief Counsel Robert Tembeckjian's Sexless Money Grab
EXCLUSIVE - May 30, 2012

According to the wife of New York State's Commission on Judicial Conduct (the "CJC") Chief Counsel, the story involves the lack of sex to the top attorney at the state agency that oversees the ethics of all New York State judges.  Robert Tembeckjian's wife, New York Daily News reporter Barbara Ross, also says that the ordeal began near a Pizzeria Uno Restaurant and involved "filthy, black, slippery grease."

The lawsuit, Barbata Ross and Robert Tembeckjian v. Betty G. Reader Revocable Trust, et al., , was filed on July 5, 2007 in The New York Supreme Court in the Bronx (Index #17038-07). The additional defendants included Emigrant Business Credit Corporation, Uno Restaurant Holdings Corp; Individually and d/b/a Uno Chicago Grill, Pizzeria Uno Corporation, Individually and d/b/a Uno Chicago Grill, and NJC Carting Corporation, Individually and d/b/a Nicholas J. Cicale Carting. The plaintiffs were represented by Edward A. Steinberg of Leav & Steinberg, LLP with offices at 120 Broadway, 18th floor, New York, New York 10271. While the incident occurred in Manhattan, where the Tembeckjians live, the original complaint indicates that one defendant, NJC Carting Corporation, had an address at 2847 Dudley Avenue in the Bronx.  According to a source, the case settled in April of 2012.

The legal action, according to Ross and Tembeckjian, involved the lack of the defendants to adequately maintain the sidewalk near 391-395 Sixth Avenue in Manhattan. Apparently, Barbara found herself walking in front of the Pizzeria Uno but then suddenly sitting in filthy, black, slippery grease. Barbara described what happened under oath, saying, "I can only liken it to a bagel overstuffed with cream cheese; when you squish it, the stuff comes out on the side. My shoe, my left shoe, the inside of my left shoe, had a ridge of grease, and my clothes were covered with it, my hands were covered with it."

Robert Tembeckjian Claimed Lack of Sex From Barbara Ross

Robert Tembeckjian alleged in the lawsuit that his sex life had been adversely affected on April 6, 2006 when his wife Barbara Ross was, "lawfully traversing over and upon the sidewalk in front of premises 395 Sixth Avenue in the County, City and State of New York." Bob also asserted that his wife "was caused to slip and fall at the aforesaid place as a result of the negligence of defendants…. and without any negligence on her part contributing thereto."  Co-plaintiff Robert Tembeckjian further claimed, "….loss of services, companionship, society, and consortium of plaintiff Barbara Ross that would normally flow between a husband and wife."  Under oath, Barbara was asked if there had been any disruption in the sexual relationship between her and her husband as a result of the accident. "Yes…. we were monks, for months….until the end of August when I began to feel better…."  The good news, for those interested in the top judicial 'ethics' counsel Tembeckjian's sexual happiness, is, according to Barbara, that their sexual relations resumed, "after my shoulder got really better, so probably November of '06."

The Tembeckjians Couldn't Take State-Paid Trip to Hawaii

When asked where she had traveled to since the accident, Barbara mentioned outside Syracuse and San Diego. The San Diego trip, Ms. Ross said, was "vacation slash business, last summer," adding, "[b]ut we lost a trip to Hawaii, because I couldn't deal with -- we lost a -- my kid is still not letting me live it down. A trip to Hawaii, which substantially would have been paid for by my husband's job because it was a business trip. I couldn't, I couldn't do the flight." Ms. Tembeckjian also indicated that there was an "out-of-pocket loss" not only for her family but for friends who where going to accompany her daughter on that trip.  It is unknown whether either of the Tembeckjians had been asked if they knew how many state judges and their families had been provided with taxpayer-paid trips to Hawaii.

Bob Too Busy Selectively Enforcing Judicial Ethics to Peel Potatoes

During her April 4, 2008 deposition, Barbara indicated that there were "many, many meals" that she couldn't prepare, so they had, "a lot of eat-out," adding, "If you can peel a potato with one hand, I'll tell you how you do it, you put it between your knees and it takes you 45 minutes to do three pounds of potatoes."  Ms. Tembeckjian also said she stopped using her maiden name Boylan, opting for Ross, about two years out of college because, "I worked for another nut named Boylan and I didn't want them to think I was related." After clarifying that Ross had been her prior married name, Barbara indicated that she had been the power of attorney for an Edith Asbury from about April of 2006.

CLICK HERE TO SEE COMPLAINT and TRANSCRIPTS

More on this story soon........

More Background on 'Ethics' Top Counsel Tembeckjian

CLICK HERE TO SEE MORE STORIES ON New York's So-Called Judicial Ethics Commission

Questions on Gross Legal and Banking Ethical Failings

Two Big Questions for Thursday, May 31, 2012: How many 'officers of the court' will be involved in Manhattan District Attorney Cy Vance's $500 Million Dollar Mortgage Fraud Announcement, and what will Governor Cuomo do regarding the gross ethical failings of the legal and banking communities? 

Facing Down the Bankers

The New York Times by Annie Lowrey  -  May 30, 2012



WASHINGTON, D.C. — Sitting in a corner office high above K Street here, Dennis M. Kelleher, one of the most powerful lobbyists on financial regulatory reform, looks every bit the corporate lawyer and high-ranking Senate aide he formerly was: tailored suit, quick smile, assertive tone.  But Mr. Kelleher does not work for banks. He works against them.  “What is at stake is whether the American people are at risk of another Great Depression,” Mr. Kelleher, who is 54, said in a recent interview. “We exist to fight back against the forces trying to make us forget just how bad it was.”  Mr. Kelleher is the president of Better Markets, a nonprofit organization that pushes for a stringent interpretation of the Dodd-Frank financial regulatory law, which passed in 2010 but whose specific rules and regulations are currently the focus of an intense, complex and expensive behind-the-scenes battle.  Think of Better Markets as Occupy Wall Street’s suit-wearing cousin.  Mr. Kelleher, a Harvard Law School alumnus and a former partner at Skadden, Arps, Slate, Meagher & Flom — is a wisecracking, fast-talking operator who just happens to think that banks would devastate the economy if given the chance.  The financing for the K Street office comes not from small donations but from millions contributed by Michael Masters, an Atlanta-based hedge fund manager who believes that the markets are as imperfect as the people participating in them, and therefore need stricter rules.  Better Markets does not march against banks, or bring loudspeakers to their lobbies. It instead writes detailed comment letters to regulators, meets with them, files friend-of-the-court briefs, puts out studies and testifies before Congress.

The goal, Mr. Kelleher said, was to present an alternative argument to the one made by the banks and their small army of lobbyists. “For a long time, there had been no organization dedicated solely to going to toe-to-toe with the financial industry, on any issue, no matter how complex or obscure,” he said. “That’s what we do.”  Still, Better Markets and the handful of other advocates for the public interest — Americans for Financial Reform, the A.F.L.-C.I.O. and a few think tanks among them — remain seriously outmanned.  Take lobbying on the Volcker Rule, a controversial portion of the Dodd-Frank law that would prevent depository institutions from making certain speculative bets. From July 2010 to October 2011, financial institutions met with federal agencies to discuss it some 351 times, according to an analysis by Kimberly D. Krawiec, a law professor at Duke. Public interest groups, including Better Markets, held just 19.  “It’s David versus Goliath,” said Byron Dorgan, the former North Dakota senator and Mr. Kelleher’s former employer. “But at least David’s there.”  Since JPMorgan Chase announced that it had lost $2 billion or more on a failed hedge, Mr. Kelleher has made an effort to be everywhere: in its crisis, he saw his opportunity to stress that banks need tougher controls.  “Jamie Dimon’s poor fortune is good news for financial reform and taxpayers,” said Mr. Kelleher, referring to the bank’s chief executive. “Because, as it is unendingly noted, he’s the best banker in the world,” he said wryly. “The universe, maybe. It can get intergalactic with the compliments.”

He raced to New York for a television appearance. He spoke with more than two dozen reporters, and corresponded with several more. In Better Markets’ 16 months of existence, Mr. Kelleher has become a favorite source for the media, speaking in long, quotable peals and in a broad-voweled Massachusetts accent.  In his sound bites, the JPMorgan affair is a “debacle.” Investment banks need to remember the “hierarchy of guilt” for the crisis. (They are at the top.) A weak rule on swaps is an “indefensible retreat” from tougher regulation and a “poster child for the pernicious effect of industry’s army of lobbyists.”  He also met with the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission.  “It’s good to get some balance into the mix,” said Gary S. Gensler, the chairman of the commodities commission. “My mom and your mom don’t usually have somebody who’s going to spend the time reading the detailed rules, and do not necessarily have the same resources or desire to be into the minute details that the large financial interests on the other side of this debate do.”  The industry’s lobbyists argue that they, too, are on the side of reform — just not excessive reform. “The industry is in favor of better regulation,” said T. Timothy Ryan Jr., the president of the Securities Industry and Financial Markets Association.  Excessive regulation, he argues, would raise costs for businesses and individuals. “The banks are in much better shape, because many of them have been earning some money, retaining those earnings, and upping their capital,” Mr. Ryan said. “If we produce through regulations banks that make no money, it’s not going to strengthen the financial system.”

If any thread runs through Mr. Kelleher’s career, it is a knack for showing up just after a crisis. After growing up in modest circumstances in central Massachusetts, Mr. Kelleher enlisted in the Air Force and served as a crash rescue firefighter. As a corporate lawyer, he specialized in the legal cleanup after a scandal — as when an executive was caught committing fraud, or a company was caught cooking its books.  A partner in Skadden’s Boston office, he had been quietly involved in Democratic politics while working in corporate law. In 1996, he took a year off to work on one of Senator Edward M. Kennedy’s committee staffs. In 2004, he came back to Washington and never left, working for Senator Barbara A. Mikulski, the liberal aggressive Maryland Democrat and then Mr. Dorgan.  On Capitol Hill, Mr. Kelleher worked on a broad range of issues — Afghanistan, health care and safety-net programs. He won a reputation as loquacious and assertive, twisting arms for Mr. Dorgan and wearing down interlocutors in long negotiations.  “Dennis was generally acknowledged to be a star,” said Ted Kaufman, the former Delaware Senator who served as an adviser to Vice President Joseph R. Biden Jr. for years before taking his vacated Senate seat in 2009. “He was really, really smart, and really knew how to make an argument,” he said.  When Mr. Dorgan retired, Mr. Kelleher fielded calls from lobbyists and law firms, but decided to keep working for the public. Mr. Masters, the hedge fund manager who had met Mr. Kelleher when he testified on Capitol Hill, convinced him to help him start a nonprofit, Better Markets. Both Mr. Masters and Mr. Kelleher felt that there were too few public intellectuals or research groups capable of giving detailed counterpoints to the investment banks and other financial firms.  So Mr. Masters agreed to finance Better Markets for a minimum of five years. His financial contribution — the organization shows $3 million in financing in a 2010 regulatory filing — has raised speculation that he built the organization to soak up information in Washington or to influence the rule-writing process. (Hedge funds may reap the benefits if investment banks are strictly regulated, after all.)  But Mr. Masters said he had been shocked by the poor understanding of financial markets on Capitol Hill, and said the crisis proved the need for more regulation. He dismissed the notion that his motivations were financial. “If I wanted to alter my portfolio positions, I could do it in 24 hours,” he said.  The odds remain against Better Markets and fellow public-interest advocates, Mr. Kelleher concedes.  “It’s a battle in which the Wall Street lobbying and public-relations machine will have a decisive advantage,” said Mr. Kaufman, the former Delaware senator. “With the regulators, you don’t have to win. You just have to gum them up. And that is exactly what Wall Street has done.”

Cyrus R. Vance, Jr.

District Attorney, New York County  -  For Immediate Release
May 31, 2012
DA VANCE: ABACUS BANK AND 19 INDIVIDUALS CHARGED IN LARGE-SCALE MORTGAGE FRAUD CONSPIRACY

• Employees and Managers Charged With Routinely Submitting False Documents to Fannie Mae
• Prosecution Marks the First Time a Bank Has Been Indicted in Manhattan Since 1991

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of ABACUS FEDERAL SAVINGS BANK (“ABACUS” or the “Bank”) and eleven of its former employees in a false document mortgage fraud scheme resulting in the sale of hundreds of millions of dollars worth of fraudulent loans to the Federal National Mortgage Association, commonly known as “Fannie Mae.” The District Attorney also announced that an additional eight former employees have already waived indictment and admitted their guilt in connection with this conspiracy. The 184-count indictment charges eleven individuals and ABACUS itself with residential mortgage fraud, securities fraud, grand larceny, conspiracy, and falsifying business records, among other related charges.[1] The defendants include former senior managers, as well as former employees who worked in various capacities for the Bank’s lending business. Each defendant faces charges related to his or her involvement in the criminal conspiracy, which the indictment charges occurred between May 2005 and February 2010.  “The lessons of the financial crisis are still being learned,” said District Attorney Vance. “The public must have confidence that when a bank issues a loan that it later re-sells to Fannie Mae, and by extension the nation’s investors, it will engage in honest and ethical practices and follow the rules set by regulators,” said District Attorney Vance. “Loan schemes based on fraud inevitably will unravel, as this one did. Today’s indictment re-affirms our commitment to transparency and straight dealing in the financial markets. We cannot settle for less.”  Steve A. Linick, Inspector General of the Federal Housing Finance Agency, said: “We are proud to have contributed to this effort, which to date has produced multiple indictments of individuals who allegedly engaged in this significant fraud scheme. My office is committed to ferreting out fraud throughout the housing system, and partnering with law enforcement agencies making a similar commitment.” Charles R. Pine, Director of Field Operations for IRS-Criminal Investigation, said: “The public has the right to expect security and integrity from the banks they entrust their money to, regardless of their size. The protection of the nation’s financial system remains a top priority for IRS-Criminal Investigation.” The indictment, representing the culmination of a two-and-a-half-year investigation, charges that ABACUS, its employees, and its managers engaged in a conspiracy involving the regular and systematic falsification of residential mortgage application documents. The defendants falsified these documents so that they could earn commissions and fees by ensuring that otherwise unqualified borrowers would receive loans, which ABACUS then sold to Fannie Mae pursuant to an ongoing agreement. After purchasing these fraudulent mortgages, Fannie Mae repackaged them into mortgage-backed securities and sold them to outside investors. As a result of the hundreds of millions of dollars in charged fraudulent loans, ABACUS earned many millions of dollars in loan origination, purchasing, and servicing fees over the five-year period covered by the indictment.  ABACUS is a federally-chartered deposit and lending institution headquartered at 6 Bowery Street in Chinatown. The Bank operates seven branches across New York City, New Jersey, and Pennsylvania, and primarily serves the Chinese-American community. The loan department at ABACUS consisted of three separate units: loan origination, processing, and underwriting. All of these units and several of the branches were implicated in the conspiracy. Charged in the indictment is YIU WAH WONG, who served as the Bank’s Chief Credit Officer, Vice President, and Underwriting Supervisor. WONG was the most senior Loan Department manager and reported directly to the Bank’s CEO. Also charged in the indictment is WAI HUNG “RAYMOND” TAM, the Loan Origination Supervisor. According to the indictment, these ABACUS managers trained lower level employees that the accuracy of loan application information was immaterial; what mattered was making sure that borrowers were able to obtain Fannie Mae-backed mortgages. Managers also encouraged loan officers and processors to be discreet by making sure that the falsified information would be believable in the eyes of the Bank’s regulator, the Office of the Comptroller of the Currency, as well as Fannie Mae. ABACUS loan originators, also called loan officers, are accused of regularly instructing prospective borrowers to make misrepresentations in their loan applications and often authored falsified documents themselves. According to the indictment, originators coached borrowers to inflate their income, assets, and job titles, and to falsify Verification of Employment forms. Loan officers are charged with creating false gift letters to obscure the source of the borrowers’ down payments and disguise borrowers’ liabilities as assets. The loan originators charged in the indictment were: WEN FANG “FANNY” WANG, YING CHUAN “SHELLEY” WANG, JIE QIONG “MICHELLE” NAN, CHI FUNG “DANNY” LAU, and PHOEBE LEE. Loan officers QIBIN “KEN” YU, RUO LAN “JULIE” CHEN, LIEN “LILY” QUACH, XIAOMIN “JANE” HUANG, and YIM “KATY” CHENG all previously pleaded guilty to felonies for their participation in this scheme. Loan officer JIN HUA “JENNY” ZHANG has been charged by felony complaint with Falsifying Business Records in the First Degree and related charges. Loan processors, including defendants WAI CHING “ALICE” WONG and YUK YIN “LORETTA” LAM CHENG, are accused of helping originators concoct inflated incomes for borrowers.  Specifically, processors manipulated loan origination software in order to calculate how much income borrowers needed to show in order to qualify for loans. According to the indictment, processors also facilitated the falsification of borrowers’ employment information by providing blank Verification of Employment forms to originators and loan applicants instead of mailing the forms directly to employers. Processor MICHELLE WONG LI previously pleaded guilty to Falsifying Business Records in the First Degree in connection with her conduct. According to today’s indictment, loan underwriters approved loans they knew contained falsehoods, and knowingly failed to conduct adequate scrutiny of obviously false documents. Former underwriters VICTORIA TSUI and YI YI ZHAO were charged in the indictment. ANDY CHEN, who served as an underwriter, previously pleaded guilty to Falsifying Business Records in the First Degree. Between 2005 and 2010, ABACUS is charged with selling hundreds of millions of dollars worth of fraudulent loans to Fannie Mae. Notwithstanding the fact that these loans were replete with misrepresentations and falsified information, ABACUS represented to Fannie Mae that the loan documents were accurate and truthful, a prerequisite for purchases made by Fannie Mae. ABACUS knew that once the loans were in Fannie Mae’s portfolio, the mortgages would be bundled together with other loans and sold by Fannie Mae as securities in the secondary loan market. Over the course of the fraud, ABACUS and its employees earned many millions of dollars in commissions, origination and servicing fees. The District Attorney’s investigation into this misconduct continues. Anyone with information should call the District Attorney’s Office at (212) 335-3600.  Assistant District Attorneys Edward Starishevsky, Senior Investigative Counsel, and Julieta V. Lozano led the investigation under the supervision of Polly Greenberg, Chief of the Major Economic Crimes Bureau, and Adam Kaufmann, Chief of the Investigation Division.  Investigative Analyst Steven Koch and Trial Preparation Assistants Marisa Calleja, Elisabeth Daniels, Melissa Brown, and Kathleen Dougherty assisted in the investigation.  In addition, Investigator Jason Malone of the District Attorney’s Investigations Bureau participated in the investigation under the supervision of Supervising Investigator Santiago Batista.  District Attorney Vance thanked the Office of Comptroller of the Currency, Fannie Mae, IRS Criminal Investigations, the Federal Deposit Insurance Corporation, Federal Housing Finance Agency, and the Federal Housing Finance Agency Office of the Inspector General, whose work on this matter was part of the Residential Mortgage-Backed Securities Working Group formed by President Obama and Attorney General Holder, for their respective contributions to this investigation.

Indicted Defendants:
ABACUS FEDERAL SAVINGS BANK
New York, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Violation of G.B. L. §352-C(5), a class E felony, 1 count
• Violation of G.B. L. §352-C(6), a class E felony, 27 counts
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 27 counts
• Falsifying Business Records in the First Degree, a class E felony, 100 counts
• Attempted Grand Larceny in the Second Degree, a class D felony, 1 count
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 14 counts
• Attempted Residential Mortgage Fraud in the Second Degree, a class D felony, 1 counts
YIU WAH WONG, D.O.B. 11/6/1950
Flushing, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Scheme to Defraud in the First Degree, a class E felony, 1 count
• Violation of G.B. L. §352-C(5), a class E felony, 1 count
• Violation of G.B. L. §352-C(6), a class E felony, 27 counts
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 27 counts
• Falsifying Business Records in the First Degree, a class E felony, 100 counts
• Attempted Grand Larceny in the Second Degree, a class D felony, 1 count
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 14 counts
• Attempted Residential Mortgage Fraud in the Second Degree, a class D felony, 1 counts
WAI HUNG “RAYMOND” TAM, D.O.B. 5/22/1955
Brooklyn, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 27 counts
• Falsifying Business Records in the First Degree, a class E felony, 100 counts
• Attempted Grand Larceny in the Second Degree, a class D felony, 1 count
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 14 counts
• Attempted Residential Mortgage Fraud in the Second Degree, a class D felony, 1 counts
WEN FANG “FANNY” WANG, D.O.B. 6/18/1972
Little Neck, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 9 counts
• Falsifying Business Records in the First Degree, a class E felony, 36 counts
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 5 counts
YUK YIN “LORETTA” LAM CHENG, D.O.B. 5/21/1948
Fresh Meadows, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 5 counts
• Falsifying Business Records in the First Degree, a class E felony, 12 counts
CHI FUNG “DANNY” LAU, D.O.B. 10/13/1983
Flushing, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
PHOEBE LEE, D.O.B. 6/13/1966
Flushing, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
JIE QUIONG “MICHELLE” NAN, D.O.B. 11/14/1980
Flushing, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 1 counts
• Falsifying Business Records in the First Degree, a class E felony, 3 counts
VICTORIA TSUI, D.O.B. 8/16/1975
Brooklyn, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 7 counts
• Falsifying Business Records in the First Degree, a class E felony, 30 counts
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 6 counts
YING CHUAN “SHELLY” WANG, D.O.B. 6/11/1968
College Point, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 2 counts
• Falsifying Business Records in the First Degree, a class E felony, 6 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 2 counts
WAI CHING “ALICE” WONG, D.O.B. 5/24/1958
Brooklyn, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 10 counts
• Falsifying Business Records in the First Degree, a class E felony, 44 counts
• Attempted Grand Larceny in the Second Degree, a class D felony, 1 count
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
Residential Mortgage Fraud in the Second Degree, a class C felony, 3 counts
Attempted Residential Mortgage Fraud in the Second Degree, a class D felony, 1 counts
YI YI ZHAO, D.O.B. 9/6/1964
Brooklyn, NY
Charges:
• Conspiracy in the Fourth Degree, a class E felony, 1 count
• Grand Larceny in the First Degree, a class B felony, 1 count
• Grand Larceny in the Second Degree, a class C felony, 6 counts
• Falsifying Business Records in the First Degree, a class E felony, 19 counts
• Residential Mortgage Fraud in the First Degree, a class B felony, 1 counts
• Residential Mortgage Fraud in the Second Degree, a class C felony, 3 counts
Jin Hua “Jenny” Zhang
• Charged by felony complaint with Falsifying Business Records in the First Degree and related charges.
Previously charged defendants who have pled guilty:
Andy Diansi Chen
• Pled guilty to one count of Falsifying Business Records in the First Degree, a class E felony.
Ruo Lan “Julie” Chen
• Pled guilty to one count of Falsifying Business Records in the First Degree and one count of Scheme to Defraud in the First Degree, both class E felonies.
Yim “Katy” Cheng
• Pled guilty to one count of Falsifying Business Records in the First Degree and one count of Scheme to Defraud in the First Degree, both class E felonies.
Xiaomin “Jane” Huang
• Pled guilty to one count of Falsifying Business Records in the First Degree, a class E felony.
Michelle Wong Li
• Pled guilty to one count of Falsifying Business Records in the First Degree a class E felony.
Lien “Lily” Quach
• Pled guilty to one count of Falsifying Business Records in the First Degree a class E felony.
Qibin “Ken” Yu
• Pled guilty to: one count of Grand Larceny in the Third Degree, a class D felony, one count of Falsifying Business Records in the First Degree, a class E felony and one count of Scheme to Defraud in the First Degree a class E felony.

[1]The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  ###


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New York County District Attorney | duggane@dany.nyc.gov| 212-335-9400

Judge Favors PD Culture of Corruption

Judge sides with LCG, LPD during first police corruption hearing 
The Advertiser by Nicholas Persac - May 29, 2012 
Plaintiff attorney vows to continue fight in Lafayette's 'Serpico' case 

Lafayette, LA - A 15th Judicial District Court judge ruled this morning in favor of the local government and police department during the first court hearing in a lawsuit filed by nine Lafayette Police Department officers who claim a culture of corruption has lead to physical threats and racial discrimination.  "All the judge did was dissolve the temporary restraining orders," Stephen Spring, an attorney for the nine LPD plaintiffs, said during a phone interview after this morning's court hearing. "Obviously I'm disappointed, but it's not over by a long shot. We're discussing our options right now, and the rest of the suit is still there. This is chapter two."  The case began when LPD officials launched an internal investigation to determine which employee may have leaked an Internal Affairs document.  The nine officers who filed the lawsuit argue the investigation into the leak unfairly targeted the plaintiffs and violated portions of the Policeman's Bill of Rights. Those officers accused the department of using such investigations as a way to punish officers who bucked the alleged culture of corruption within LPD.  Spring said one option he's already considering is filing an appeal to try to have today's decision overturned by a higher court.  Defense attorney Michael Corry asked Judge Kristian Earles to review secret audio recordings that Spring claimed bolstered his case and proved the LPD higher ups made threats against his clients.  During the two-hour hearing Tuesday morning, Earles first granted a brief recess so Corry and his defense team could examine one of the recordings. Earles then instructed Spring to play the tape, which recorded plaintiff LPD officer Gabe Thompson talking with LPD Patrol Division Commander Maj. George "Jackie" Alfred, before the court.

"When Judge Earles heard the entire 17 minute recording, he found the city was absolutely right and there was no irreparable harm, damage, loss or injury," Corry said outside the courthouse while talking with reporters. "Judge Earles did not even require the testimony of any witnesses. All he needed to do was hear the entirety of the tape, which he did, to find that the city should prevail."  Before Spring played the recording for the court, he and Corry questioned Thompson, who said he used a secret recording device disguised as a writing pen to tape the conversation he had with Alfred.  “I don’t care if they call it retaliation, and they can say whatever they want to say,” Alfred allegedly said on the recording, according to Spring. “This stuff has gotten personal, and when it becomes personal, a lot of stuff can happen … even fighting and shooting.”  Corry said the tape did not provide enough evidence of any real threat, pointing to the fact that Thompson laughed "no less than 22 times" during the conversation.  "There is nothing on that tape that is threatening," Corry said. "This isn't a smoking gun. This is simply an attempt to stop an investigation."  LPD officer Scott Poiencot, one of Spring's clients as a plaintiff, testified during today's hearing and said he loaned Thompson the spy-like pen without knowing what he was going to record.  In the lawsuit, Spring compares his clients to Frank Serpico — the NYPD officer who testified against police corruption and is portrayed by Al Pacino in a 1971 film. The reality of taking such a stand, Spring said, has left the officers with “genuine fears” of being physically assaulted, battered or even shot, in addition to facing “unlawful … disciplinary proceedings.”  Though Spring vowed to continue fighting his clients' case, Corry said today's decision should effectively end the "Serpico" case.  "What we do know is that Judge Earles has found their claim was completely baseless and meritless," Corry said. "There is nothing else to go forward. It's over."

Federal Judge Schedules Corruption Retrial

Judge Schedules Retrial for Former Senate Leader
The Associated Press  -  May 30, 2012

A federal judge has set Feb. 4, 2013, in Albany to start the retrial of former New York Senate Majority Leader Joseph Bruno on fraud charges and imposed a gag order on the lawyers.  Northern District Judge Gary Sharpe said yesterday the case will be tried in court, not the press, while acknowledging he imposed the same rule at the 2009 trial, where Bruno himself held daily press conferences on the courthouse steps to say he was innocent while his lawyers stood quietly by.  The retired 83-year-old has remained free while the U.S. Court of Appeals for the Second Circuit overturned his two convictions for so-called "honest services fraud," citing a U.S. Supreme Court ruling in another case that such convictions must show direct bribes or kickbacks (NYLJ, Nov. 17, 2011). Bruno was once one of the three most powerful officials in state government.

Federal Judges Direct Anderson in New Witness Tampering Filing

Federal Appeals Panel Directs Anderson to Judge Scheindlin in New Witness Tampering Filing
May 29, 2012

United States Court of Appeals for The Second Circuit
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on the 11th day of May, two thousand twelve.  Present: Chester J. Straub, Robert D. Sack, Gerard E. Lynch, Circuit Judges - FILED MAY 11, 2012

Appellant, pro se, moves to recall the mandate. Upon due consideration, it is hereby ORDERED that the motion is DENIED. Appellant has not made a showing of exceptional circumstances that would entitle her to the requested relief. See British Int'l Ins. Co. Ltd. v. Seguros La Republica, S.A., 354 F.3d 120, 123 (2d Cir. 2003). Moreover, the argument in Appellant's motion, which relies on "newly discovered evidence," is more appropriately raised in a Fed. R. Civ. P. 60(b) motion filed in the district court. See Fed. R. Civ. P. 60(b)(2); Standard Oil Co. of Cal. v. United States, 429 U.S. 17, 18-19 (1976) (holding that a party may pursue in the district court a Rule 60(b) motion to vacate a judgment that an appellate court has upheld, because the district court "is not flouting the mandate by acting on the motion" where "the appellate mandate relates to the record and issues then before the court, and does not purport to deal with later events"); DeWeerth v. Baldinger, 38 F.3d 1266, 1270 (2d Cir. 1994) (interpreting Standard Oil to stand for the proposition that "a district court may consider a Rule 60(b) motion when 'later events' arise that were not previously considered by the appellate court").  FOR THE COURT: Catherine O'Hagan Wolfe, Clerk

RELATED BACKGROUND STORY:

Attorney for Department Disciplinary Committee Sues Court System
The New York Law Journal by John Caher - May 16, 2012

An attorney for the Appellate Division, First Department's disciplinary committee alleges in a federal lawsuit that she was sexually harassed by two now-retired officials at the watchdog agency while a third retaliated against her for complaining. Nicole Corrado also suggests that after she lodged a complaint officials retaliated by targeting her attorney in an unrelated property matter. She claims that the committee launched an investigation into allegations of bribery and forgery against her attorney, and then suddenly dropped the matter when he abandoned her case. Additionally, Corrado claims she was punished for supporting a lawsuit brought against the court system by a colleague. Corrado v. New York State Unified Court System, 12-cv-1748, filed in the Eastern District on April 10, alleges violations of the Civil Rights Act of 1964. Corrado, who has served as a principal attorney at the disciplinary committee since 2006, claims she endured years of harassment by her supervisor, Andral Bratton, and that the committee's chief investigator, Vincent Raniere, touched her inappropriately and forcibly kissed her on several occasions. According to the complaint, when Corrado reported the "pattern of sexual harassment" by Bratton and Raniere in 2008, the court system referred the matter to its inspector general. However, only the allegations against Bratton were investigated, the complaint claims. The complaint states that Bratton admitted during the Office of the Inspector General probe that he was "smitten" with Corrado and crossed "an emotional boundary." Bratton was transferred to another unit at the same salary and Corrado was simply told to "avoid" him, according to the complaint. Corrado alleges that while her sexual harassment complaint was pending, she retained an attorney to represent her in an unrelated action involving a property dispute. She claims the disciplinary committee instigated an investigation into that attorney—who is not named in her complaint—involving allegations of bribery and forgery. Corrado contends that after the attorney withdrew from her case and her claim was dismissed, all of the ethical charges against her lawyer were dropped. She claims that because of her attorney's abrupt withdrawal, her civil case was dismissed and she was "ultimately forced to settle her case for a fraction of its value." Bennitta Joseph of Borrelli & Associates in Great Neck, who is representing Corrado in the civil rights claim, declined to identify the allegedly intimidated attorney who represented her client in Corrado v. East End Pool & Hot Tub. Corrado also claims in her complaint that she was retaliated against for supporting the claim of a colleague who accused the agency of racial discrimination.

The complaint does not identify that employee, but Joseph confirmed in an interview that it was Christine Anderson, a former staff attorney who alleged she was wrongfully discharged in June 2007 on a pretext of insubordination after she revealed that the panel was protecting well-connected attorneys. A jury rejected her claims, and the U.S. Court of Appeals for the Second Circuit affirmed the verdict (NYLJ, Oct. 30, 2009). Corrado contends that after she agreed to corroborate Anderson's allegations of "racial discrimination and other improper conduct" by the disciplinary committee, Alan Friedberg, the committee's chief counsel, threatened her and gave her an unreasonable workload. Additionally, Corrado says Bratton threatened her. In light of Corrado's complaint, Anderson has asked the Second Circuit to reinstate her claim. Anderson contends in her petition that Corrado, who testified on her behalf at a deposition but not at trial, "was threatened and chilled into not testifying" at her trial, constituting a "manifest attack on our system of law and a clear denial of appellant's right to a fair trial." Corrado claims that because of the anxiety and stress from the harassment she endured at the disciplinary committee she took a two-year unpaid leave of absence between 2009 and 2011, returning only after Bratton, Raniere and Friedberg had left. According to the Office of Court Administration, all three took advantage of an early retirement incentive in the fall of 2010. "She feels like she has to do something," Joseph said. "She took a two-year leave of absence because the environment had become so toxic, and then once all the offending parties left, she came back." Raniere said the allegations are false. "I didn't do a damned thing," he said. Friedberg declined to comment. Bratton could not be reached. David Bookstaver, a spokesman for the Office of Court Administration, declined to respond, noting that the court system does not comment on pending litigation. John Caher can be contacted at jcaher@alm.com.

Westchester Lawyer-District Attorney Accused of Welfare Fraud

DA improperly got her maid welfare: probe
The New York Post - EXCLUSIVE - by Chuck Bennett - May 29, 2012

Westchester County District Attorney Janet DiFiore pulled strings to get her family’s live-in housekeeper food stamps, cash assistance and Medicaid benefits, according to an internal report from the county’s Department of Social Services. For the past year, Social Services has been probing how DiFiore’s housekeeper was suddenly approved for welfare benefits after having been previously denied three times for inconsistencies in her applications, The Post has learned. “Okay we got to the bottom of this case. This was a political favor for Janet DiFiore’s maid. It is COMPLETELY UNACCEPTABLE,” Dhyalma Vazquez, a county anti-fraud investigator, wrote in an internal e-mail June 30, 2011. Vazquez, who also chairs the Yonkers Independence Party, alleged in the e-mail to Department of Social Services Commissioner Kevin McGuire that DiFiore’s housekeeper, Jamaican immigrant Marina Buchanan, should never have received benefits. In a series of e-mails from June and July of last year, Vazquez claimed that DiFiore, a Republican-turned- Democrat, had Buchanan’s case file improperly re-opened after the Yonkers branch office denied benefits. Buchanan, 58, was paid $200 a week in cash by DiFiore and got $315 a month in Social Security disability benefits, according to documents obtained by The Post. It is unclear from the documents if Social Security taxes were paid on Buchanan’s wages. Buchanan, who claimed she was a nanny and housekeeper for DiFiore since 1987, also didn’t disclose receiving the Social Security disability benefits while still working up to 18 hours a week for the DA. Further, she had a credit card with a $55,000 limit, sources said, yet still sought county benefits. “The question is why the special favor. Why are cases being opened in Central Office . . . Just because she is the District Attorney does not mean she is above the law!” Vazquez wrote. County investigators are looking at the actions of a former Social Services official who is active in local Democratic politics, sources said. Reached by phone, Vazquez, who has been with Social Services for 20 years, cited the ongoing investigation and declined to comment. DiFiore’s spokesman, Lucian Chalfen, said, “It is a personal issue that is related to her and her husband and I can’t comment.” Her three children are now all in their 20s. It’s unclear if Buchanan still works for DiFiore, who was first elected DA in 2005. Buchanan, who could not be reached for comment, wrote in documents that she left the DA’s employ in May 2010. chuck.bennett@nypost.com

U.S. Supreme Court Broadens Right To Effective Assistance of Counsel

Supreme Court Broadens Right to Effective Assistance of Counsel
The New York Law Journal by Barry Kamins  -  May 25, 2012

Two months ago, the U.S. Supreme Court decided three cases representing a significant shift in the court's regulation of the criminal justice system. In Missouri v. Frye1 and Lafler v. Cooper,2 the court turned its attention to discrete areas of the plea bargaining process. In Martinez v. Ryan,3 the court addressed the constitutional right to counsel in state collateral proceedings attacking the validity of a conviction. This column will discuss these decisions and their possible impact on New York criminal procedure.  In the past, the court has devoted less attention to the plea bargaining process than the trial itself when defining the role of counsel, even though the court had noted on occasion the significance of the plea bargaining process as a component of the criminal justice system.4 Two years ago, however, the court held that a defendant has a right to the effective assistance of counsel during plea negotiations. In Padilla v. Kentucky,5 the court held that counsel has an obligation, under the Sixth Amendment, to give accurate advice about the immigration consequences of a proposed guilty plea.  In Frye, the court further examined the role of counsel during plea negotiations by addressing, for the first time, deficient legal representation that results in the rejection of a favorable plea offer. The court announced that, in order to provide effective assistance of counsel, defense counsel has the duty to communicate accurately the terms of a plea offer. In other words, the constitutional right to counsel now extends not only to guilty pleas that are accepted, but to the negotiation and consideration of plea offers that lapse or are rejected.  The court was persuaded that the time has come to recognize and accept a fact of life in the criminal justice system: Our system is a system of pleas and not trials. According to statistics kept by the Department of Justice, 94 percent of state convictions in this country are the result of guilty pleas.6 Acknowledging that plea bargains are essential to the administration of the criminal justice system, the court concluded that the responsibilities of defense counsel at various stages of the plea bargaining process must also meet the Sixth Amendment's standard of effective assistance of counsel.

In Frye, the lawyer for the state of Missouri, however, argued that the plea bargaining process is often in flux, with no clear standards of timeliness and with no judicial supervision of the discussions between prosecution and defense. Thus, it was argued, it was unfair to subject the state to the consequences of defense counsel's inadequacies at this stage of the process.  In Frye, defense counsel did not advise his client that the prosecutor had offered a choice of two plea bargains, one of which would have resulted in a 90-day jail sentence following a plea to a misdemeanor. The offer expired, and ultimately the defendant pled guilty to a felony and was sentenced to a three-year prison sentence.  Applying the two-part test in Strickland v. Washington,7 the court initially concluded that the failure to communicate the plea offer constituted ineffective assistance of counsel under the first, i.e. performance, prong. Under the second prong, the court wrestled with the issue of prejudice: what must a defendant demonstrate in order to establish that prejudice resulted from counsel's deficient performance under these circumstances?  The court formulated a three-step approach to determine whether the defendant suffered any prejudice from counsel's errors in the plea-bargaining process. First, a defendant must demonstrate a reasonable probability that he would have taken a plea offer. That can be done in many cases by establishing that the defendant ultimately pleaded guilty to a more serious charge with a harsher sentence.  Second, the defendant must establish a reasonable probability that the offer would have been adhered to by the prosecution and approved by the court.8 Third, the defendant must establish a reasonable probability that the plea offer would have been more favorable than the ultimate outcome of the case.

In Lafler v. Cooper, the plea offer was communicated to the defendant but defense counsel was ineffective nonetheless. The matter reached the court after the parties had conceded that defense counsel's advice with respect to a plea offer had been deficient. The defendant was charged with assault with the intent to murder, after firing a gun and hitting the victim in the buttock, hip and abdomen. Although the defendant was offered a sentence of four to seven years in jail in exchange for a guilty plea, the plea was rejected; counsel convinced the defendant that the prosecution would not be able to establish the defendant's intent to murder because the victim had been shot below the waist. The defendant proceeded to trial, was convicted, and received a sentence of 15 to 30 years in jail.  Based upon the inept advice given to him by his attorney, the defendant established that his attorney's ineffectiveness caused the rejection of a plea, leading to a conviction after trial with more serious consequences. The court then formulated an elaborate scheme to determine an appropriate remedy under these circumstances. First, the defendant must establish that, but for counsel's deficient performance, there was a reasonable probability that he would have taken the plea and the court would have accepted it.  Upon that showing, a court can determine whether the defendant should receive the term of imprisonment offered in the plea, the sentence he received at trial, or something in between. In fashioning a remedy, the court noted that a court might order the prosecution to re-offer the plea agreement and, assuming the defendant accepts, the trial court could then exercise its discretion in vacating the conviction after trial and resentencing the defendant pursuant to the plea agreement.  Dissenting in both cases, Justice Antonin Scalia was troubled by these proposed remedies which, he opined, will lead to "further constitutional litigation that will burden the criminal process."9 Justice Samuel Alito, in a separate dissent, expressed some skepticism in giving lower courts the discretion to determine a proper remedy: he cautioned that only "[t]ime will tell how this works out."10

Impact of 'Frye' and 'Lafler'

What impact will Frye and Lafler have on New York practice? The New York Court of Appeals has not directly addressed the issue of whether counsel will be held constitutionally deficient for failure to convey a plea offer.11 However, numerous appellate courts around the state have concluded that the failure of counsel to advise their client of a plea offer, or the failure of counsel to advise a client on the merits of a plea offer, constitutes ineffective assistance of counsel.12 The Court of Appeals has held that in order to prevail on this claim, a defendant has the burden to demonstrate that a plea offer was made, that defense counsel failed to inform him of that offer, and that the defendant would have been willing to accept the offer.13  The U.S. Court of Appeals for the Second Circuit, in Boria v. Keane,14 held that counsel has a constitutional duty to discuss with a client a proposed plea bargain and the advisability of accepting it. Thus, failure to do so violates a defendant's right to the effective assistance of counsel.  In Boria, the defendant was indicted for a class A-II felony. After the arraignment, the prosecution advised defense counsel that the prosecutor would accept a guilty plea with a jail sentence of one to three years but warned that if the offer was rejected, there would be a superseding indictment for a class A-I felony that would make any similar plea impossible. Counsel allowed the defendant to reject the offer but did not give him any advice as to the wisdom of doing so. The defendant was ultimately indicted for the A-I felony, convicted after trial, and sentenced to 20 years to life.  After determining that the defendant had been denied the effective assistance of counsel, the Second Circuit held that there was a reasonable probability that, had the defendant been made aware of the plea offer, he would have accepted it. In structuring a remedy, the court determined that it would not be feasible, under the circumstances, to put the defendant back in a position of being able to plead to the original indictment. Instead, the court ordered the defendant's sentence reduced to the time he had served, i.e., six years, and discharged the defendant from custody, leaving the conviction intact.

In light of Frye and Lafler, it remains to be seen how New York courts will grapple with fashioning a remedy for a defendant who has received deficient legal representation during the plea bargaining stage. In certain cases, there may not be an easy solution.  For example, in People v. Hoffman,15 the defendant was never told that there was a plea offer of two class D and E felonies after he had been indicted for manslaughter in the second degree, a class C felony. The indictment was later dismissed and, upon re-presentment, the defendant was indicted for murder in the second degree. He was convicted after trial and sentenced to 25 years to life imprisonment.  The defendant later moved to set aside the conviction. The trial court noted the procedural problems in fashioning a proper remedy: "…assuming arguendo the correctness of defendant's factual claims, the court is asked to overturn a jury verdict and the sentence imposed, dismiss a validly obtained indictment, reinstate a previously dismissed indictment and then force the District Attorney to offer a reduced plea…[t]his court believes there are statutory and constitutional obstacles to that request."16 The court also questioned the right of any court to direct a prosecutor to re-offer a plea.  The remedy was ultimately fashioned by the federal district court in the habeas proceeding.17 It directed that the defendant be released from jail after he had served the maximum period of incarceration he could have received under the initial plea offer. In the past, this has been the nature of the remedy fashioned by federal habeas courts under similar circumstances.  Clearly, Frye and Lafler have set forth challenging procedural issues for courts when they must devise a remedy for deficient representation during the plea bargaining process. Whether courts will be able to fashion more ambitious remedies as suggested by the Supreme Court remains to be seen.

Collateral Proceedings

The third case decided by the court, Martinez v. Ryan,18 addresses the right of counsel in a different context—the right to effective assistance of counsel in collateral state post-conviction proceedings. The Supreme Court has always drawn a bright line between direct appeals, in which the right to counsel has been recognized, and collateral challenges, in which no right to counsel has been recognized.19  Martinez presented the court with an opportunity to determine whether there is a constitutional right to effective counsel in collateral proceedings when it is the first occasion to raise a claim of ineffective assistance at trial. The court chose not to answer that question. It held instead that when states, such as New York, do not provide counsel for an initial-review collateral proceeding involving ineffective assistance of trial counsel, i.e. CPL 440.10, or when an attorney is ineffective in such a proceeding, the defendant can establish "cause" in a federal habeas proceeding to excuse the defendant's failure to challenge the ineffectiveness of trial counsel.  The court made clear that its holding was equitable rather than constitutional in nature. By permitting a federal habeas court to hear a claim of ineffective assistance of trial counsel, under these circumstances, the court acknowledged that, as an equitable matter, an initial-review collateral proceeding without the benefit of counsel may not be sufficient to ensure that proper consideration was given to a substantial claim.  The court noted that the nature of its equitable ruling afforded states a choice. First, they could choose to appoint counsel in initial-review collateral proceedings. This would eliminate many claims in federal court that trial counsel was ineffective because, if appointed counsel does not properly raise the claim in state court, it would be procedurally barred in federal court. In the alternative, states could choose not to appoint counsel but would be required to defend the ineffective assistance of counsel claims on the merits in federal habeas proceedings.

What effect, if any, will Martinez have upon New York proceedings? From a constitutional perspective, the decision will have no effect. Twenty years ago, the Supreme Court held that the federal constitution does not mandate that states appoint counsel to indigent defendants in collateral proceedings.20 Nor is there a state constitutional right to counsel in a CPL 440 proceeding.21 The Supreme Court has now also made it clear in Martinez that it was not creating a constitutional right to effective assistance of counsel in collateral proceedings in which a defendant can raise for the first time a claim of ineffective assistance at trial.  Notwithstanding the lack of any constitutional foundation, Martinez may still have an impact in New York from a public policy perspective. Indeed, Scalia, in his dissent, makes such a prediction. He opines that the decision in Martinez will have the practical effect of forcing states to appoint counsel in all cases lest, "the State be propelled into federal habeas review of the adequacy of trial-court representation that occurred many years ago."22  Whether that happens in New York, of course, remains to be seen. But, clearly, Martinez will stimulate a dialogue on when attorneys should be assigned in New York to handle ineffective-assistance claims in collateral proceedings. As the court in Martinez noted, there are three systems in place by which states assign attorneys to these claims. New York utilizes the most restrictive method: appointing counsel only if a claim requires an evidentiary hearing.  Some have argued that New York should utilize a less restrictive system: appointing counsel if the claims have some merit to them or the court deems the record worthy of further development. The New York City Bar Association has recommended amending County Law §722(5) to authorize compensation to attorneys who are already assigned to handle the direct judgment appeal pursuant to Section 18-B of the County Law. Under the amendment, these attorneys would also be paid to investigate meritorious post-conviction CPL 440 motions and file papers in support of such motions.  As part of the dialogue that will take place, a number of issues will need to be discussed. For example, will the new "equitable rule" announced in Martinez be limited to ineffective assistance of trial counsel cases or will the rule include other cases in which the initial-review proceeding will be the first opportunity for a particular claim to be raised, e.g. Brady issues, prosecutorial misconduct, etc.?23 Economically, would it be more feasible for New York to assign attorneys at the initial-review hearing rather than expend the time, energy and resources to defend more of such claims on the merits in federal district court?  In its trio of recent decisions, the Supreme Court has focused on areas of the criminal justice system that had escaped the attention of the court until now. It is fair to say that New York courts will be grappling with the numerous procedural and policy issues that these decisions have raised.  Barry Kamins is an acting Supreme Court Justice, Administrative Judge, Criminal Court of the City of New York, and Administrative Judge for Criminal Matters in Brooklyn Supreme and Criminal Courts.

Endnotes:

1. Missouri v. Frye, 566 US—,132 SCt 1399 (2012).
2. Lafler v. Cooper, 566 US—,132 S Ct 1376 (2012).
3. Martinez v. Ryan, 566 US—,132 S Ct 1309 (2012).
4. Blackledge v. Allison, 431 US 63, 71 (1977); Brady v. United States, 397 US 742, 752 (1970).
5. Padilla v. Kentucky, 559 US—, 130 SCt 1473 (2010).
6. Missouri v. Frye, 132 SCt at 1402.
7. Strickland v. Washington, 466 US 668 (1984).
8. The court remanded the case to the Missouri appellate court to determine whether the plea offer would be adhered to by the prosecution and accepted by the trial court since the appellate court did not address this issue in the first instance. Missouri v. Frye, 132 SCt at 1403.
9. Lafler v. Cooper, 132 SCt at 1392 (Scalia, J., dissenting).
10. Id. at 1390 (Alito, J., dissenting).
11. However, the court has held that the failure to give correct advice about the immigration consequences of a guilty plea does constitute ineffectiveness of counsel. To establish prejudice, the defendant must establish a reasonable probability that, but for counsel's errors, he would not have pleaded guilty and would have proceeded to trial. People v. McDonald, 1 NY3d 109 (2003). See also, People v. Perron, 287 AD2d 808 (3d Dept 2001).
12. People v. Reed, 152 AD2d 481 (1st Dept. 1989); People v. Sherk, 269 AD2d 755 (4th Dept 2000); People v. Howard, 12 AD3d 1127 (4th Dept. 2004).
13. People v. Fernandez, 5 NY3d 813 (2005).
14. 99 F3d 492 (2d Cir. 1996).
15. 173 Misc. 2d 529 (Cattaraugus County Ct 1997).
16. Id. at 531.
17. Hoffman v. Herbert, 2006 US Dist Lexis 46186 (WDNY 2006).
18. 132 S Ct. 1309 (2012).
19. Pennsylvania v. Finley, 481 US 551 (1987).
20. Id.
21. People v. Richardson, 159 Misc 2d 167 (Sup Ct Kings Co 1993).
22. Martinez v. Ryan,132 SCt at 1322 (Scalia, J., dissenting).
23. See Id. at 1321 (Scalia, J., dissenting).

Fulfilling the Court's Core Mission in the New Reality

Fulfilling the Court's Core Mission in the New Reality
The New York Law Journal by 
A. Gail Prudenti  -  April 10, 2012

Having recently marked my 100th day as chief administrative judge of the courts of New York, I wanted to take this opportunity to look back on our early progress and, more importantly, focus on where we are headed and where we need to go.  Since beginning my term in December, we have presented and achieved passage of the judiciary's budget in the Legislature, expanded e-filing and begun laying the groundwork to achieve Chief Judge Jonathan Lippman's top legislative aims in the areas of juvenile justice and wrongful convictions. Above all, I am so pleased that the hard work and dedication of our phenomenal judges have now been recognized by the first adjustment to their salaries in 13 years.  As I promised when I assumed this role, I also used my first months in office as a chance to take a good hard look at court operations to learn how we as a judiciary can better serve the people of our state. The chief judge and I are very pleased that with the recent passage of our budget as submitted, we can begin to gradually alleviate some of the harshest consequences of this past fiscal year's budget cuts.  Our top priority will be to keep the courthouses open during regular business hours, which is so essential to serving the people who come to the courts seeking justice at some of the most difficult times in their lives. We have heard the concerns expressed by the bar, judges, practitioners and litigants, and are closely monitoring case trends and existing backlogs. It will take a significant period of time to recover from the cuts necessitated by the economic crisis, but whether we are in good fiscal times or bad, our constitutional mandate remains the same. We are duty-bound to hear each and every case that comes before us with fairness, wisdom and speed.  Over the past few years, businesses and organizations throughout the world have had to adapt to the new economic reality of our times by finding ways to continue producing goods and providing services with fewer resources. In order to continue to fulfill our own constitutional mission, we in the New York courts must do the same.  Despite double-digit increases in filings, the court system today is operating with the same level of staffing we had a decade ago. Yet we must embrace this new reality, band together, and turn obstacles into opportunities. We must rethink and reinvent the way we do business. Waiting around for better times to arrive is not an option. Not only is our primary responsibility to deliver justice far too important, but we have it within our power to bring about positive change thanks to the many talented and committed judges and court staff who understand and support the need to pursue local operational reforms to improve our performance.

With this in mind, and accepting the new reality that government must make ever wiser and more efficient use of limited public resources, it is time to develop a plan of action. My experience has taught me that a prescribed, uniform plan for the entire court system is unrealistic and unworkable, and that only a front-line perspective and an individualized approach, tailored to the unique challenges and culture of each locality and court, can be truly effective. Throughout my years in the legal system—as an intake clerk in Surrogate's Court, as a prosecutor in the district attorney's office, as a private practitioner, as a surrogate, as a Supreme Court justice sitting in a matrimonial and guardianship part, as a former administrative judge, and as the presiding justice in one of the busiest appellate courts in the nation—I have learned that the people in each district know best what works in their particular courts, and that the right solution for the Supreme Court in Erie County may be the wrong solution for the Supreme Court in Kings County.

My years in the courts have also shown me, time and again, that the best ideas, programs and operational successes often originate at the local court level.  As a result, I have developed far too much respect for every segment and every player in the judicial system to believe that a "top-down" strategy is the best way for our institution to overcome the many challenges we face. And those challenges are formidable. A look at the case trends over the past decade reveals that the inventory of older cases has increased significantly, and that today's numbers are far from where we would like them to be.  These statistics are certainly important because they shine a light on the health and efficacy of our system, but we must never forget that behind every index number is a real, aggrieved litigant seeking justice in our courts. Yes, we must count cases, but more importantly, we must make sure that every case counts. That is why I am working with our talented administrative judges in each judicial district to formulate individualized strategies and find effective and innovative ways to fulfill our core mission of adjudicating cases in the new reality.  The administrative judges are currently developing concrete plans with realistic goals tailored to the specific courts and case types in their respective districts. We will support their efforts and continuously monitor and track their progress.  These plans will include initiatives such as setting up "triage" parts to resolve the oldest cases or assign them out for immediate trial, improving coordination and working relationships with key stakeholders, instituting best practices, commencing juror outreach efforts, and clearing databases and calendars of lingering cases that have long-since been resolved.  We will work together to identify those districts and courts most in need of assistance, and shift our resources accordingly wherever possible. It is also time to take a fresh look at the standards we use to measure how well we are managing our massive and diverse caseloads.

The court system and the legal profession have changed dramatically since we first adopted the Standards and Goals measures for evaluating the timeliness of case dispositions. We have seen the growth of problem-solving courts, the emergence of unprecedented caseload trends such as the ongoing mortgage foreclosure crisis, a dramatic increase in the number of unrepresented litigants in our courts, and the introduction of new legislative requirements, such as the recently expanded reliance on DNA testing. These are just a few of the complex dynamics affecting how cases are processed in the state courts today.  As our court system evolves, so too must the tools by which we measure our performance. Accordingly, we will be carefully scrutinizing the current system to determine how we can set time tables that are appropriate and realistic in this new era. In confronting the difficult issues surrounding case backlogs, I have received invaluable assistance from Judge Lawrence Marks, who has undertaken an in-depth study of caseload trends, logjams and the overall efficiency of our court system.  His efforts will help us fully understand the problems we face as we begin to take action in collaboration with each administrative judge. It is reassuring to know that Judge Marks, in his new role as the first deputy chief administrative judge, will be overseeing this critical project.  He is a proven and effective administrator who fully grasps the intricacies of case management and resource deployment within our vast organization, and he has the expertise and credibility to bring people together and achieve meaningful change. Passage of the judiciary budget will also enable us to take gradual but significant steps to reduce case inventories.  While it is not fiscally possible to re-institute the entire judicial hearing officer (JHO) program, the budget may allow us to bring back some of our dedicated JHOs, and we will use their talents and experience in targeted ways to manage pressing caseloads. The budget will also enable us to give the administrative judges more discretion in the use of overtime when exigent circumstances demand that a trial or hearing continue past normal working hours, such as the need to complete an expert witness's testimony.

Moreover, we hope to fill a limited number of critical non-judicial positions throughout the state that are absolutely essential to maintaining effective court operations. Through these combined efforts, I have every confidence that 2012 will be a year in which we make real progress in reducing delays and speeding the disposition of cases.  In keeping with our call to do what it takes to fulfill our core mission, I will ask my colleagues in the Appellate Division to volunteer when they are not in session to sit in trial courts that are most in need of assistance to clear backlogs. These volunteer Appellate Division judges will travel to trial parts in other departments and either settle or try the oldest cases. In certain areas of the state, I will also call upon our surrogates to volunteer to sit in the Supreme Court to provide assistance, and will further recruit court attorneys from our Law Departments to help clear motion backlogs in other courts.  I am truly fortunate to have worked with so many dedicated and experienced judges and lawyers throughout my career who have repeatedly gone above and beyond the call of duty. Inspired by their example, I am proud to join my colleagues in this volunteer effort and plan to sit on the bench in the Supreme Court of Suffolk County this summer.  While pursuing these initiatives within the court system itself, I also recognize that fulfilling our core mission of delivering justice is at its heart a very interdependent endeavor. Our judicial system is a complex one, with many moving and interlocking parts. It cannot function at its best without the cooperation and support of key stakeholders—district attorneys, local municipalities and their agencies, legal aid and public defender offices, private firms and bar associations, and so many others.  All of these constituencies undoubtably are facing their own challenges in these difficult times, but we are truly in this together, and I call upon all members of our justice community—from judges and law clerks to individual practitioners and law firms—to join in our efforts to rethink and rework how we do business for the sake of better serving the public, our ultimate constituent.  I have the utmost confidence that if we combine our creativity and talents and work cooperatively, as we have so many times in the past, we can successfully bridge the gap between the resources we have and the services we are called upon to provide for the people of our state.  In my first months as chief administrative judge, I have been so heartened and inspired by the hard work and dedication of the judges and the court staff who have been working in crisis mode for so long, delivering justice despite tough fiscal constraints and a constantly growing workload.  Their perseverance and determination assures me that the challenges we face can be surmounted and turned into opportunities to strengthen our court system for the future.  As chief administrative judge, I see my role as chief resource coordinator, and I want to assure the judges and non-judicial employees of our court system that I stand fully committed to supporting their efforts and initiatives in the days ahead.  The New York Judiciary has always been a national model for innovation and reform and I know that the challenges of this new reality will spark the creativity of the brilliant and talented individuals who make up our judicial community.  In the weeks and months ahead, I look forward to reporting on further details of our plans and our progress toward re-engineering and revitalizing the state court system.  A. Gail Prudenti is chief administrative judge of the New York State Unified Court System.

SEC Lightly Slaps Attorney in Allen Stanford Swingle

SEC Bars Dallas Attorney From Practicing in Front of Commission, Citing His Failure to Stop Allen Stanford's Swindle
The Dallas Morning News by Robert Wilonsky  -  May 25, 2012

Spencer Barasch — or, at least, his attorney — has always maintained he did nothing wrong by doing nothing at all to stop R. Allen Stanford from building his financial empire on a Ponzi scheme. Time and again there were allegations: The 54-year-old Barasch, once the head of enforcement at the Securities and Exchange Commission’s Fort Worth office, repeatedly looked the other way as the evidence mounted that Stanford was on well on his way to swindling investors out of $7 billion.  In April 2010, the SEC kicked out a 151-page report that said “over a seven-year period Barasch rebuffed repeated pleas from agency staff to investigate Stanford’s offshore bank and his oversized investment claims,” as Eric Torbenson and Dave Michaels wrote at the time. The report said Barasch could have put a stop to Stanford’s misdeeds as early as 1998. There was even talk of the feds prosecuting Barasch for his refusal to take action, and for his role in representing Stanford following his departure from the SEC in ’05.  In 2011, investors sued the SEC and Barasch; a year later, Barasch agreed to cough up $50,000 to make the SEC’s conflict-of-interest allegations go away. At which point his attorney, former U.S. Attorney for the Northern District of Texas Paul Coggins, told The News that “for over 17 years, Spencer Barasch served the SEC and his country with integrity and distinction, and he has carried the same high standards of ethics and achievement into private practice.”  But the SEC still isn’t buying it: Barasch, now the head of downtown Dallas-based Andrews Kurth’s corporate governance and securities enforcement team, was barred yesterday from appearing and practicing before the SEC for one year. Said the commission in its release:  The bar was imposed in an order instituting an administrative proceeding and resolves allegations involving Barasch’s representation of Stanford Group Company after Barasch went into private practice. Barasch consented to the Commission’s action without admitting or denying the Commission’s allegations.  In the order that follows, the SEC explains why it imposed the sanctions against Barasch. Says SEC Associate General Counsel Richard Humes, “This action shows that the Commission takes seriously ethical lapses by attorneys who appear and practice before it, and that such violations will result in serious disciplinary action.” Meanwhile, his bio touts his considerable experience successfully representing clients being investigated by the SEC.  rwilonsky@dallasnews.com

Selective Justice Continues

Corzine shows there’s no justice on Wall St.
The New York Post by Terry Keenan  -  May 27, 2012
What does it take to get prosecuted in this town?

Just how many federal regulators have pored over financial documents and calling records, dissected trading ledgers for suspicious money movements and probed years of voice mails and e-mails, to no avail?  Oh, to be sure, a few investigations have resulted in civil fines being paid with the caveat of not admitting or denying any wrongdoing. It’s less than a slap on the wrist.  All of which brings us to the latest prosecutorial pronouncements.  Just last week, we had federal regulators of all stripes tripping over themselves to launch investigations into Jamie Dimon’s handling of a possible $5 billion in trading losses at JPMorgan’s London derivative-trading operation, and James Gorman’s Morgan Stanley and its handling of the Facebook IPO and whether the firm provided differing information to its clients on the social medium’s revenue prospects in the near term.  Will anything come of these investigations? Will Dimon and his reckless band of traders face any real punishment? Will Morgan Stanley execs face a court for allegedly duping the average investor?  Not likely.

I can say this after reading two headlines this past week. One announced that Securities and Exchange Commission investigators have concluded their probe of Lehman Brothers and likely will not recommend any enforcement actions against former Lehman executives including Dick Fuld.  The second said that disgraced former New Jersey Gov. and Sen. Jon Corzine took home more than $3 million in the last year as he was running MF Global into the ground. In what may be the 2011 prize for chutzpah, Corzine made it a point that he would not press for $12.1 million in severance payments from what is now a corpse of a company. Gee, thanks, Jon.  In case you’re counting, it’s been seven long months since Corzine’s firm was forced to file for bankruptcy, leaving 3,200 people without jobs. That’s about the number who work at Facebook.  Since then, not a penny of the billion-plus in “missing” funds has been recovered. Mr. “I Don’t Know Where the Money Is” hasn’t even been hit with civil charges, after he assured Congress late last year that he “never intended” to break any rules.  Perhaps not. But in the commodities pits in Chicago, the anger is palpable. “Someone at MF Global made the decision to swipe customer money,” John Roe, head of the Commodities Customer Coalition, told the Financial Times. “If nothing happens, this means people can misuse customer funds and have no criminal liability.”  If Corzine didn’t order the transfer of assets, he should be forced to testify about who did and why he didn’t supervise the transactions.  Many industry executives have now resigned themselves to the idea that there will be no charges forthcoming, despite the massive losses incurred by upwards of 30,000 customers.

Little wonder. Corzine, who is considered one of President Obama’s most effective “bundlers” of campaign contributions, used his influence with laser-like focus before the firm’s demise.  So it’s not a big stretch to imagine Corzine continuing to do the same now that MF Global is no more. Not only did Corzine work his connections to help MF become a primary dealer of Uncle Sam’s debt obligations (a growth business if there ever was one), but also a recent PBS “Frontline” program reports that Corzine personally lobbied for permission to let MF borrow from customer accounts through internal repurchasing agreements. This was so he could fund all his firm’s leveraged bets on things like the prospect of the improving health of Europe’s economy. The gamble on that boneheaded assumption is why thousands have lost so much money.  Time was, not so long ago, when accusations of such blatant fraud by a CEO weren’t swept under the rug. It’s a thought that must enter Corzine’s mind at least once in a while when he walks through the lobby of 950 Fifth Ave. The building — one of the most exclusive in the city, with just seven apartments and drop-dead views — will live in infamy as the address where former Tyco CEO Dennis Kozlowski hung his artwork and his $6,000 shower curtain.  It was the artwork, not the shower curtain, that led to Kozlowski’s downfall. When the Manhattan DA’s office launched an investigation into whether the Tyco tycoon paid sales taxes on his art (he did not), the probe led to a broader prosecution of corporate fraud on the part of Kozlowski and his CFO, Mark Swartz. They were found guilty by a New York jury.  This weekend, Kozlowski is in a halfway house on 110th Street, 34 blocks from his former palatial digs. He hopes for parole next year, after serving seven years.  In 2019, seven years from now, it will be interesting to see if those who showed similar reckless hubris in the wake of the global financial meltdown will find themselves in the same situation as Kozlowski is now. I fear the answer is no.