Disgraced NY Firm Leader Now Charged With Stealing $700 Million as New Victims Come Forth
The New York Law Journal by Mark Hamblett - March 18, 2009
Indicted attorney Marc S. Dreier sold more than $700 million in phony real estate development notes and fake pension plan notes during his four-year scam, according to a superceding indictment released yesterday. The new indictment, which adds a count of money laundering, also alleges a greater number of victims than initially thought. It accuses Mr. Dreier of selling notes to at least 13 different funds and three individuals between 2004 and 2008, with the purchase price wired to an attorney trust fund maintained by his firm. The overall loss to investors in Mr. Dreier's schemes remains roughly $400 million, but the realization that he sold as much as $700 million in bogus notes allowed the government to increase the amount it is now seeking in forfeiture.
In addition to the new money laundering charge, the former sole equity partner in the now defunct 250-member Dreier LLP faces charges of conspiracy to commit securities fraud and wire fraud, one substantive count of securities fraud and five substantive counts of wire fraud. The superceding indictment sheds some new light on the scope of Mr. Dreier's efforts. The money laundering count covers transfers he allegedly made "into and out of various Dreier LLP bank accounts in order to promote fraud in the sale of securities and wire fraud." In addition to the 13 different funds and three individuals who are now alleged victims of his scams, the indictment states that Mr. Dreier "enlisted financial professionals to assist him in finding purchasers of the fictitious promissory notes and paid those individuals a percentage of the proceeds received." It also states that Mr. Dreier "attempted to sell the notes to numerous additional potential investors and funds."
Mr. Dreier also represented himself as the lawyer for the issuers or holders of the promissory notes. "In order to carry out the fraud and to lend credibility to these representations, Dreier directed purchasers of the notes to wire the purchase price into the attorney trust account held in the name of Dreier LLP," the indictment states. Mr. Dreier has been free on bail since Feb. 13 following a two-month bail fight by Assistant U.S. Attorney Jonathan Streeter and Gerald Shargel, Mr. Dreier's lawyer. Southern District Judge Jed S. Rakoff approved a bail package on Feb. 5 that allowed Mr. Dreier, 58, to put up a $10 million personal recognizance bond and to pay $70,000 for round-the-clock armed guards at his Manhattan apartment. Mr. Dreier was arrested on Dec. 7 upon his return from Toronto, where he had been taken into custody for pretending to be an executive with the Ontario Teachers' Pension Plan who was pitching pension plan notes to a hedge fund.
The incident in Canada occurred as Southern District investigators were closing in on Mr. Dreier for selling in excess of $200 million in phony developer notes to hedge funds in New York City and Connecticut. That estimate of the out-of-pocket-loss for the hedge funds was later increased to $400 million, The indictment alleges a conspiracy that stretches from 2004 through Mr. Dreier's arrest in December. One alleged confederate in the conspiracy, Kosta Kovachev, was arrested Dec. 23 for posing as the controller of the Solow Realty and Development Co., the company Mr. Dreier pretended was issuing promissory notes that offered a good deal for the hedge funds. Others yet to be named are mentioned in the indictment also played the role of impersonator to help Mr. Dreier pull off the sales. Mr. Shargel said yesterday that the superceding indictment has not changed his view of the case. "The money laundering charge was not unexpected," he said. "This has been raised in discussions with the U.S. attorney's office." Mr. Shargel and Mr. Dreier are scheduled to appear before Judge Rakoff for a status conference tomorrow at 10 a.m.
Wednesday, March 18, 2009
Tuesday, March 17, 2009
Criminal Judge Drops Charges Against Federal Judge
Judge drops charges against federal judge James Peck accused of slapping his wife
The New York Daily News by MELISSA GRACE - March 16, 2009
The criminal case against a federal judge charged with slapping his wife was dismissed and sealed in a Manhattan courtroom Monday after she decided not to help prosecutors, officials said. James Peck, the bankruptcy judge overseeing the breakup of Lehman Brothers, hit his wife, Judith, in a dispute in their Park Ave. apartment, cops said. "I was defending myself," Peck, 63, told NYPD officers when they showed up at the couple's home. Manhattan Criminal Court Judge Michael Yavinsky, acting on a recommendation from prosecutors, tossed the charges. "On the motion of the people, the case is dismissed and sealed," he declared. Peck, who also briefly handled bankruptcy court proceedings in the case of Bernard Madoff, did not show up in court and his lawyer, Barry Bohrer, said that because the case was now sealed he could not comment.
Prosecutors moved to dismiss for "a number of reasons, including the complaining witness being uncooperative in this case," Assistant District Attorney Melissa Sussman told Judge Yavinsky. "We cannot prove the case beyond a reasonable doubt." The alleged violence erupted on a Saturday in January when Peck's wife of 42 years was late returning from the Hampton's, prompting an argument over a ladder she'd left in his closet. Peck told cops he was moving the ladder out when "she slapped me in the face ... I put the ladder down and slapped her back." Judith Peck, who cops said suffered "substantial pain," locked herself in a room and dialed 911. She was later treated at New York-Presbyterian Hospital, according to a police report. The judge faced a misdemeanor assault charge and a charge of harassment, a violation, and up to 90 days in jail. According to now-sealed court records, Peck told cops the two had been having problems since October. mgrace@nydailynews.com
Previous Story in The New York Times - FEBRUARY 2, 2009:
Judge in Lehman Case Is Charged With Assault
The federal court judge overseeing the bankruptcy case of Lehman Brothers was arrested on Saturday afternoon and charged with hitting his wife. United State Bankruptcy Judge James M. Peck, 63, is charged with third-degree attempted assault and second-degree harassment after a fight with his wife, Judith, in their Manhattan home, according to the complaint filed in New York State Supreme Court. It said Judge Peck slapped her in the face, causing bruising. Mrs. Peck was taken to a hospital for treatment. Judge Peck was released without bail and is scheduled to appear in court on March 16, a spokeswoman for the Manhattan district attorney, Robert M. Morgenthau, told DealBook. According to The New York Post, citing unnamed sources, Judge Peck told police that he and his wife began arguing after her late arrival from the Hamptons, in Long Island. The two then hit each other, before Mrs. Peck called police. By the time police arrived, The Post said, the two were in separate rooms. As the man overseeing the bankruptcy proceedings of Lehman, Judge Peck has gained an increasingly high profile. A former bankruptcy litigator at the law firms Schulte, Roth & Zabel and Duane Morris, Judge Peck is known for his patience in handling matters as complex as the Lehman case. He was sworn as a bankruptcy court judge in 2006, according to his biography at Web site for the Federal Bankruptcy Court for the Southern District of Manhattan. Judge Peck also briefly oversaw the bankruptcy proceeding of Bernard L. Madoff Securities, the trading operations run by the eponymous financier. But he recused himself from the case in late December, and it is now being handled by Judge Burton R. Lifland, also of the Southern District of New York. A native of New York, Judge Peck graduated from Dartmouth and New York University Law School –Michael J. de la Merced
The New York Daily News by MELISSA GRACE - March 16, 2009
The criminal case against a federal judge charged with slapping his wife was dismissed and sealed in a Manhattan courtroom Monday after she decided not to help prosecutors, officials said. James Peck, the bankruptcy judge overseeing the breakup of Lehman Brothers, hit his wife, Judith, in a dispute in their Park Ave. apartment, cops said. "I was defending myself," Peck, 63, told NYPD officers when they showed up at the couple's home. Manhattan Criminal Court Judge Michael Yavinsky, acting on a recommendation from prosecutors, tossed the charges. "On the motion of the people, the case is dismissed and sealed," he declared. Peck, who also briefly handled bankruptcy court proceedings in the case of Bernard Madoff, did not show up in court and his lawyer, Barry Bohrer, said that because the case was now sealed he could not comment.
Prosecutors moved to dismiss for "a number of reasons, including the complaining witness being uncooperative in this case," Assistant District Attorney Melissa Sussman told Judge Yavinsky. "We cannot prove the case beyond a reasonable doubt." The alleged violence erupted on a Saturday in January when Peck's wife of 42 years was late returning from the Hampton's, prompting an argument over a ladder she'd left in his closet. Peck told cops he was moving the ladder out when "she slapped me in the face ... I put the ladder down and slapped her back." Judith Peck, who cops said suffered "substantial pain," locked herself in a room and dialed 911. She was later treated at New York-Presbyterian Hospital, according to a police report. The judge faced a misdemeanor assault charge and a charge of harassment, a violation, and up to 90 days in jail. According to now-sealed court records, Peck told cops the two had been having problems since October. mgrace@nydailynews.com
Previous Story in The New York Times - FEBRUARY 2, 2009:
Judge in Lehman Case Is Charged With Assault
The federal court judge overseeing the bankruptcy case of Lehman Brothers was arrested on Saturday afternoon and charged with hitting his wife. United State Bankruptcy Judge James M. Peck, 63, is charged with third-degree attempted assault and second-degree harassment after a fight with his wife, Judith, in their Manhattan home, according to the complaint filed in New York State Supreme Court. It said Judge Peck slapped her in the face, causing bruising. Mrs. Peck was taken to a hospital for treatment. Judge Peck was released without bail and is scheduled to appear in court on March 16, a spokeswoman for the Manhattan district attorney, Robert M. Morgenthau, told DealBook. According to The New York Post, citing unnamed sources, Judge Peck told police that he and his wife began arguing after her late arrival from the Hamptons, in Long Island. The two then hit each other, before Mrs. Peck called police. By the time police arrived, The Post said, the two were in separate rooms. As the man overseeing the bankruptcy proceedings of Lehman, Judge Peck has gained an increasingly high profile. A former bankruptcy litigator at the law firms Schulte, Roth & Zabel and Duane Morris, Judge Peck is known for his patience in handling matters as complex as the Lehman case. He was sworn as a bankruptcy court judge in 2006, according to his biography at Web site for the Federal Bankruptcy Court for the Southern District of Manhattan. Judge Peck also briefly oversaw the bankruptcy proceeding of Bernard L. Madoff Securities, the trading operations run by the eponymous financier. But he recused himself from the case in late December, and it is now being handled by Judge Burton R. Lifland, also of the Southern District of New York. A native of New York, Judge Peck graduated from Dartmouth and New York University Law School –Michael J. de la Merced
Monday, March 16, 2009
Court-Appointed Corruption: A National Problem
Ahearn: How did it all go wrong?
The News-Record by LORRAINE AHEARN - November 2, 2008
The News-Record by LORRAINE AHEARN - November 2, 2008
"They treat me like I'm already dead."
We all get old; we all get sick. Lifelong factory worker Dorothy “Dot” Williams planned for that. She saved, signed a will with durable power of attorney, set up a $300,000 annuity and took out home health insurance to avoid having to go to a nursing home. Yet that’s where she was Friday — in a cramped, semiprivate room at Evergreens, where she shares a bathroom with three others and was hoping to be moved to her own room. Williams, 78 and widowed, built circuit boards for Western Electric and Lucent for more than 30 years. But now she is a ward of the state, diagnosed with Alzheimer’s and declared legally incompetent at the request of her estranged daughter, who had been removed from the mother’s will. And because her court-appointed guardian decided it was for the best, she has been placed in a nursing home despite paying for round-the-clock coverage for home health care. “I have never seen somebody get the treatment she’s gotten,” said her last home health aide, Melissa Tilley. “It’s sad to know she worked all of her life, and this is what happens.” Until recently, Williams had a neat, well-appointed room with a private bath, sun porch and closed-circuit camera for security at the home of her son, Randy Clark.
In 2007, Williams had given her son power of attorney, and he hired home health aides to take care of his mother 24 hours a day. Clark saw no problem in providing for his mother. “She’s been frugal all her life, never hurt anybody,” he said. “She always took care of me, and it was my turn to take care of her.” But things grew complicated once the court system got involved, after Williams was declared incompetent. Instead of her certified nursing assistants being paid through health insurance claims, according to accounting records filed at the courthouse in September, the certified nursing assistants and the son were reimbursed sporadically by personal check through a court-appointed estate guardian.
According to Williams’ last CNA, the paychecks became so unpredictable that Clark often paid out of pocket, and in several instances, the bank records show backlogs of multiple reimbursement checks from the guardian written on single dates. The court-appointed guardian of the estate, Greensboro attorney Wanda Daughtry, said she cannot discuss finances of clients, and in September petitioned to resign from the case at the request of Guilford County Clerk of Court David Churchill. Churchill said Friday that it would be more convenient to appoint a guardian in High Point to watch over the estate. But in the meantime, according to the letter of resignation filed with the court, guardian Daughtry blamed delays on lack of cooperation from Williams’ bank and holding company, slow payments from Social Security and missing tax documents.
The letter does offer a solution: “Sufficient funds have been identified to allow the placement of the ward in a care facility in High Point as requested and anticipated by this guardian since June 2008,” wrote Daughtry, who received a $5,830 commission. “Said placement is needed since the care providers found it increasingly difficulty (sic) to offer continuing quality care for the ward.” The son reluctantly acquiesced, having little legal standing. When Williams’ last CNA left on maternity leave, the son could not hire a replacement, unsure of when the worker would get paid. “It would have been a piece of cake,” Clark said of his mother’s wish to stay at home. “But if they’re not paying for your wages or your supplies, they’re basically starving you out. I have to be there basically 24/7.” The social worker assigned to Williams’ case by the county Department of Social Services could not be reached for comment, and calls to his supervisor were not returned. According to Churchill, the court clerk, DSS had to approve the nursing home placement. The only matter before Churchill now is whether Williams herself will have to pay the $14,830 in attorneys’ fees, including the services of a private detective, that her daughter incurred in getting Williams declared incompetent. The daughter, Dawn Johnson, could not be reached for comment Friday. Williams’ old friend, Mable Phillips, said Williams would not have wanted to live in a nursing home. She felt the problem grew out of a family dispute over money.
“It’s not right. She has property; she has money. She worked so hard to save for her children,” Phillips said. “Dot was always energetic, a go-getter. She was hilarious.” And isn’t it typical: We’ve recounted this whole story without hearing from “the ward” herself. Since last summer, when she sat for an interview and a photo on the sun porch at her son’s lakeside house, Williams has grown more confused. At the nursing home Friday, she no longer talked about trips to her favorite lunch counter, Carolina Diner, or to her hairdresser at Studio 13. She didn’t talk about the years at Western Electric, scrimping and saving, tearing paper towels in half before that was the thing to do, staying a few rows back on beach vacations, because it was cheaper. As the jukebox in the nursing-home lobby played oldies, Dot Williams’ eyes danced. But not with joy. “They treat me,” she said, “like I’m already dead.” Contact Lorraine Ahearn at 373-7334 or lorraine.ahearn@news-record.com
We all get old; we all get sick. Lifelong factory worker Dorothy “Dot” Williams planned for that. She saved, signed a will with durable power of attorney, set up a $300,000 annuity and took out home health insurance to avoid having to go to a nursing home. Yet that’s where she was Friday — in a cramped, semiprivate room at Evergreens, where she shares a bathroom with three others and was hoping to be moved to her own room. Williams, 78 and widowed, built circuit boards for Western Electric and Lucent for more than 30 years. But now she is a ward of the state, diagnosed with Alzheimer’s and declared legally incompetent at the request of her estranged daughter, who had been removed from the mother’s will. And because her court-appointed guardian decided it was for the best, she has been placed in a nursing home despite paying for round-the-clock coverage for home health care. “I have never seen somebody get the treatment she’s gotten,” said her last home health aide, Melissa Tilley. “It’s sad to know she worked all of her life, and this is what happens.” Until recently, Williams had a neat, well-appointed room with a private bath, sun porch and closed-circuit camera for security at the home of her son, Randy Clark.
In 2007, Williams had given her son power of attorney, and he hired home health aides to take care of his mother 24 hours a day. Clark saw no problem in providing for his mother. “She’s been frugal all her life, never hurt anybody,” he said. “She always took care of me, and it was my turn to take care of her.” But things grew complicated once the court system got involved, after Williams was declared incompetent. Instead of her certified nursing assistants being paid through health insurance claims, according to accounting records filed at the courthouse in September, the certified nursing assistants and the son were reimbursed sporadically by personal check through a court-appointed estate guardian.
According to Williams’ last CNA, the paychecks became so unpredictable that Clark often paid out of pocket, and in several instances, the bank records show backlogs of multiple reimbursement checks from the guardian written on single dates. The court-appointed guardian of the estate, Greensboro attorney Wanda Daughtry, said she cannot discuss finances of clients, and in September petitioned to resign from the case at the request of Guilford County Clerk of Court David Churchill. Churchill said Friday that it would be more convenient to appoint a guardian in High Point to watch over the estate. But in the meantime, according to the letter of resignation filed with the court, guardian Daughtry blamed delays on lack of cooperation from Williams’ bank and holding company, slow payments from Social Security and missing tax documents.
The letter does offer a solution: “Sufficient funds have been identified to allow the placement of the ward in a care facility in High Point as requested and anticipated by this guardian since June 2008,” wrote Daughtry, who received a $5,830 commission. “Said placement is needed since the care providers found it increasingly difficulty (sic) to offer continuing quality care for the ward.” The son reluctantly acquiesced, having little legal standing. When Williams’ last CNA left on maternity leave, the son could not hire a replacement, unsure of when the worker would get paid. “It would have been a piece of cake,” Clark said of his mother’s wish to stay at home. “But if they’re not paying for your wages or your supplies, they’re basically starving you out. I have to be there basically 24/7.” The social worker assigned to Williams’ case by the county Department of Social Services could not be reached for comment, and calls to his supervisor were not returned. According to Churchill, the court clerk, DSS had to approve the nursing home placement. The only matter before Churchill now is whether Williams herself will have to pay the $14,830 in attorneys’ fees, including the services of a private detective, that her daughter incurred in getting Williams declared incompetent. The daughter, Dawn Johnson, could not be reached for comment Friday. Williams’ old friend, Mable Phillips, said Williams would not have wanted to live in a nursing home. She felt the problem grew out of a family dispute over money.
“It’s not right. She has property; she has money. She worked so hard to save for her children,” Phillips said. “Dot was always energetic, a go-getter. She was hilarious.” And isn’t it typical: We’ve recounted this whole story without hearing from “the ward” herself. Since last summer, when she sat for an interview and a photo on the sun porch at her son’s lakeside house, Williams has grown more confused. At the nursing home Friday, she no longer talked about trips to her favorite lunch counter, Carolina Diner, or to her hairdresser at Studio 13. She didn’t talk about the years at Western Electric, scrimping and saving, tearing paper towels in half before that was the thing to do, staying a few rows back on beach vacations, because it was cheaper. As the jukebox in the nursing-home lobby played oldies, Dot Williams’ eyes danced. But not with joy. “They treat me,” she said, “like I’m already dead.” Contact Lorraine Ahearn at 373-7334 or lorraine.ahearn@news-record.com
Sunday, March 15, 2009
Nasty, Corrupt Lawyer Facing Payback
Adams resigns as lawyer as legal problems mount
The Buffalo News by Patrick Lakamp - March 15, 2009
The Buffalo News by Patrick Lakamp - March 15, 2009
BUFFALO, NEW YORK - Anne E. Adams has resigned from practicing law and now is banned from appearing as an attorney. In a March 6 order, the Appellate Division struck Adams from the state’s roll of attorneys. Two weeks earlier, Adams had pleaded guilty to three misdemeanors for drunken driving and her role in trying to fix the case. But her legal problems went beyond drunken driving and trying to tamper with evidence.
The Attorney Grievance Committee for the State Supreme Court’s Eighth Judicial District was ready to recommend formal disciplinary charges over the way Adams dealt with a client in a divorce case, according to documents obtained by The Buffalo News. Adams, of Orchard Park, resigned before the committee’s scheduled March 26 meeting. “Her resignation has the same effect on her license as a disbarment, and, consequently, no further action will be taken by this office regarding your complaint,” Guy C. Giancarlo, the committee’s associate counsel, wrote Thursday in a letter to the client. “However, in submitting her resignation, Ms. Adams admitted all of the allegations related to your complaint.” John Elmore, the chairman of the Attorney Grievance Committee, would not comment on Adams’ case. James P. Harrington, Adams’ attorney, confirmed her resignation but had no other comment.
Among the client’s allegations, Adams:
• Was paid $15,000, but she never provided a bill — despite requests over six years — or an accounting of her time spent on the case.
• Did not deposit separate checks worth $2,000 and $4,000 into a client trust account but cashed the checks through a teller at a local bank.
• Falsely claimed the divorce case file was destroyed in a fire rather than produce the file when the former client pursued formal procedures to get some of her money back.
• Brought forth untrue information when she unsuccessfully appealed to a State Supreme Court judge to overturn an arbitration panel’s decision that she owed the former client a $4,775 refund. As part of the divorce settlement, the then-client received a $10,000 check from her former husband in August 2000. But Adams took it and said it would be held in a trust account until another of the client’s minor legal issues was resolved. The woman tried for six years to get some of that money returned.
“That check was meant to be a settlement award to me and not an award of attorney’s fees,” the former client said in her formal complaint to the grievance committee. “I turned to Ms. Adams for counsel and advice during a terrible time in my life — not expecting that a member of the legal profession would further victimize me.” The former client spoke only on condition of anonymity because she wants her privacy. The News agreed to her request because she has copies of court documents relating to the complaint that would not otherwise be available. The court system keeps them secret. The former client said she had never sought legal counsel before her divorce. She was in debt after her divorce and had an income of only about $22,000 a year. “To take the money that the judge granted me as a settlement only makes her conduct more despicable,” the former client told the grievance committee. In 2007, the former client won a nearly $5,000 refund from an arbitration panel, which heard the dispute between her and Adams. Adams then filed an appeal.
State Supreme Court Justice Kevin M. Dillon rejected Adams’ appeal and ordered Adams to pay the former client $4,825. In the end, the former client paid $9,000 in attorney fees for her divorce and slightly more than $1,000 for four to six hours of legal work on related civil matters. She said her former husband paid his divorce lawyer $3,000. She and her former husband did not have children, and she did not seek an interest in her former husband’s business. The former client also had to spend $1,800 in legal fees to contest Adams’ appeal.
The former client filed her complaint against Adams with the grievance committee after Adams lost the appeal. “At that point, it wasn’t a matter of money,” the former client told The News. “I pursued it so that vulnerable women like me, in duress, don’t fall victim to her unethical practices.” The former client said she decided to talk about her case — even after Adams’ resignation — because she does not want the public to think Adams’ legal problems stemmed from just the driving-while-intoxicated arrest last September. She also praised the work of the grievance committee, whose lawyers “restored my faith in the judicial system.” Adams pleaded guilty last month before Erie County Judge Sheila A. DiTullio to three misdemeanors: drunken driving, offering a false instrument for filing and attempted tampering with physical evidence. plakamp@buffnews.com
The Attorney Grievance Committee for the State Supreme Court’s Eighth Judicial District was ready to recommend formal disciplinary charges over the way Adams dealt with a client in a divorce case, according to documents obtained by The Buffalo News. Adams, of Orchard Park, resigned before the committee’s scheduled March 26 meeting. “Her resignation has the same effect on her license as a disbarment, and, consequently, no further action will be taken by this office regarding your complaint,” Guy C. Giancarlo, the committee’s associate counsel, wrote Thursday in a letter to the client. “However, in submitting her resignation, Ms. Adams admitted all of the allegations related to your complaint.” John Elmore, the chairman of the Attorney Grievance Committee, would not comment on Adams’ case. James P. Harrington, Adams’ attorney, confirmed her resignation but had no other comment.
Among the client’s allegations, Adams:
• Was paid $15,000, but she never provided a bill — despite requests over six years — or an accounting of her time spent on the case.
• Did not deposit separate checks worth $2,000 and $4,000 into a client trust account but cashed the checks through a teller at a local bank.
• Falsely claimed the divorce case file was destroyed in a fire rather than produce the file when the former client pursued formal procedures to get some of her money back.
• Brought forth untrue information when she unsuccessfully appealed to a State Supreme Court judge to overturn an arbitration panel’s decision that she owed the former client a $4,775 refund. As part of the divorce settlement, the then-client received a $10,000 check from her former husband in August 2000. But Adams took it and said it would be held in a trust account until another of the client’s minor legal issues was resolved. The woman tried for six years to get some of that money returned.
“That check was meant to be a settlement award to me and not an award of attorney’s fees,” the former client said in her formal complaint to the grievance committee. “I turned to Ms. Adams for counsel and advice during a terrible time in my life — not expecting that a member of the legal profession would further victimize me.” The former client spoke only on condition of anonymity because she wants her privacy. The News agreed to her request because she has copies of court documents relating to the complaint that would not otherwise be available. The court system keeps them secret. The former client said she had never sought legal counsel before her divorce. She was in debt after her divorce and had an income of only about $22,000 a year. “To take the money that the judge granted me as a settlement only makes her conduct more despicable,” the former client told the grievance committee. In 2007, the former client won a nearly $5,000 refund from an arbitration panel, which heard the dispute between her and Adams. Adams then filed an appeal.
State Supreme Court Justice Kevin M. Dillon rejected Adams’ appeal and ordered Adams to pay the former client $4,825. In the end, the former client paid $9,000 in attorney fees for her divorce and slightly more than $1,000 for four to six hours of legal work on related civil matters. She said her former husband paid his divorce lawyer $3,000. She and her former husband did not have children, and she did not seek an interest in her former husband’s business. The former client also had to spend $1,800 in legal fees to contest Adams’ appeal.
The former client filed her complaint against Adams with the grievance committee after Adams lost the appeal. “At that point, it wasn’t a matter of money,” the former client told The News. “I pursued it so that vulnerable women like me, in duress, don’t fall victim to her unethical practices.” The former client said she decided to talk about her case — even after Adams’ resignation — because she does not want the public to think Adams’ legal problems stemmed from just the driving-while-intoxicated arrest last September. She also praised the work of the grievance committee, whose lawyers “restored my faith in the judicial system.” Adams pleaded guilty last month before Erie County Judge Sheila A. DiTullio to three misdemeanors: drunken driving, offering a false instrument for filing and attempted tampering with physical evidence. plakamp@buffnews.com
Governor Right to Dump Useless Ethics Group
N.Y. investigation commission faces possible sunset
The Journal News by Valerie Bauman and Michael Virtanen
The Associated Press - March 15, 2009
ALBANY, NEW YORK - In the 1950s and '60s, the state Commission of Investigation put away mobsters nabbed at the 1957 clandestine gangland meeting in the Southern Tier town of Apalachin that confirmed the existence of the Mafia in America. Since the 1970s, it took on crooked judges, cops on the take, corrupt union bosses and politicians and drug labs. But, in a town known for some notorious lawbreakers among its 212 lawmakers, many say New York politics did what organized crime couldn't: It iced Albany's top cop. The Commission of Investigation, which hasn't fully investigated an elected state official in at least 30 years, will end March 31 unless the state Legislature that good-government groups say made it a shadow of its former self renews the SIC's enabling legislation.
Gov. David Paterson proposed saving $4.15 million in the next fiscal year by letting the SIC expire. "When it comes to political corruption, the SIC has been MIA," said Blair Horner, legislative director for the New York Public Interest Research Group. Horner believes the lack of action against lawmakers can be attributed, in part, to political influence. Commissioners are appointed by the state Senate majority leader, the Assembly speaker and the governor, making them less likely to investigate those who gave them their jobs, he said. They are paid $101,600 annually, except for Chairman Alfred Lerner, who is paid $109,800.
The commission, for example, didn't investigate then-Gov. Eliot Spitzer, who resigned in 2008, after he was named in a federal prostitution investigation; or then-Health Commissioner Antonia Novello, accused of using state workers to chauffeur her on shopping sprees; or then-Comptroller Alan Hevesi, who pleaded guilty in 2006 to using state workers as chauffeurs and companions for his wife. In the Legislature, the SIC hasn't investigated Assemblyman Anthony Seminerio, accused of selling access to fellow lawmakers; or the criminal case of state Sen. Hiram Monserrate, accused of assaulting his girlfriend with a broken glass; or Michael Boxley, counsel to powerful Assembly Speaker Sheldon Silver, who was taken out of the Capitol in handcuffs, charged with rape and eventually pleaded guilty to sexual misconduct. Also infamous, and untouched by the SIC, are the sexual exploits that led to a crackdown on the legislative intern program, and the many other lawmakers slapped with misdemeanors and felonies over the years. As for the current biggest political probe in Albany, former Senate Majority Leader Joseph Bruno, R-Brunswick, has been indicted by the federal government, accused of using his political position to reap millions of dollars as a consultant - claims the SIC found too flimsy to pursue.
"We don't go after anybody unless there is a complaint against someone," said George Friedman, one of six SIC commissioners. "We don't go looking for law violators." In some cases, other investigative bodies just get to the cases first, Friedman said. In Bruno's case, the commission was unable to investigate, due to a "very, very full plate," Friedman said. "You have to balance the availability of your employees, what assets you can devote to which investigations," Friedman said. "The ones that seem the flimsiest fall by the wayside and don't get attended to." "In New York City, where most of these things go on, you have five separate pros - district attorneys, full staffs - and they have the best police department in the world, fully staffed to invest in those activities," Friedman said. Whether the SIC survives, is combined with other agencies or disappears, good government groups argue that New York needs an entity monitoring lawmakers and the executive branch that's completely independent of political influence. If an effective, independent system were put in place, the broad powers the SIC has to issue subpoenas, and in some cases offer immunity in exchange for testimony, could be effective.
The Legislative Ethics Commission, for example, has fielded 13 complaints about lawmakers since 1995. Twelve ended in no violation and one is pending. The state Senate Standing Committee on Ethics has not investigated a single senator in the past 10 years. Over the same period, the Assembly Standing Committee on Ethics and Guidance has investigated four lawmakers and taken action against three. Only one had to resign - Democratic Assemblyman Roger Green of New York City in 2004 after 24 years in office. He pleaded guilty to three misdemeanors for stealing from the state by submitting fake travel claims for expenses he never incurred. "What we're trying to do is make sure that legislators are educated as to what is proper and what isn't," said Assemblyman William Magnarelli, co-chairman of the Legislative Ethics Commission. "There are some fine lines on things, believe it or not."
The commission often receives questions from lawmakers about potential private business ventures and other ethical issues. The commission gives recommendations on how to operate within the guidelines of public officers law. It also provides materials to new members about financial disclosure and legal statutes. At the SIC, commissioners can privately share any findings with the political figures who appointed them. Critics say that's another reason it's become a paper tiger. "They (the lawmakers who appointed them) have the power to make a suggestion to the commissioner they've appointed," Friedman acknowledged, but he said they don't have the power to halt an investigation. "Each of them has two appointments at this time. They can make suggestions to their two appointees, along the lines of 'Gee, I would really appreciate it if you could do something to avoid that investigation.'"
Friedman and Commissioner Vincent Nicolosi were appointed by Assembly Speaker Sheldon Silver. Two others, Henry Nahal and Robert Price, were appointed by Bruno. Lerner and the newest commissioner, John Cahill, were appointed by Gov. George Pataki. They serve four-year terms. Asked about the SIC's fate, Sisa Moyo, spokeswoman for Assembly Speaker Sheldon Silver, said they were examining all options. She added that the Manhattan Democrat "absolutely" did not have special access to information about cases or complaints before the SIC from the two commissioners he appointed. A spokesman for state Senate Majority Leader Malcolm Smith, D-Queens, said no decision has been reached by the state Senate Democratic Conference. The SIC will be discussed as part of the budget process, Austin Shafran said. Right now the commission is making the case to combine itself with the Inspector General's Office and the Public Integrity Commission - the state's other watchdog - into one entity. If the SIC does dissolve, so will its broad investigative powers.
The Journal News by Valerie Bauman and Michael Virtanen
The Associated Press - March 15, 2009
ALBANY, NEW YORK - In the 1950s and '60s, the state Commission of Investigation put away mobsters nabbed at the 1957 clandestine gangland meeting in the Southern Tier town of Apalachin that confirmed the existence of the Mafia in America. Since the 1970s, it took on crooked judges, cops on the take, corrupt union bosses and politicians and drug labs. But, in a town known for some notorious lawbreakers among its 212 lawmakers, many say New York politics did what organized crime couldn't: It iced Albany's top cop. The Commission of Investigation, which hasn't fully investigated an elected state official in at least 30 years, will end March 31 unless the state Legislature that good-government groups say made it a shadow of its former self renews the SIC's enabling legislation.
Gov. David Paterson proposed saving $4.15 million in the next fiscal year by letting the SIC expire. "When it comes to political corruption, the SIC has been MIA," said Blair Horner, legislative director for the New York Public Interest Research Group. Horner believes the lack of action against lawmakers can be attributed, in part, to political influence. Commissioners are appointed by the state Senate majority leader, the Assembly speaker and the governor, making them less likely to investigate those who gave them their jobs, he said. They are paid $101,600 annually, except for Chairman Alfred Lerner, who is paid $109,800.
The commission, for example, didn't investigate then-Gov. Eliot Spitzer, who resigned in 2008, after he was named in a federal prostitution investigation; or then-Health Commissioner Antonia Novello, accused of using state workers to chauffeur her on shopping sprees; or then-Comptroller Alan Hevesi, who pleaded guilty in 2006 to using state workers as chauffeurs and companions for his wife. In the Legislature, the SIC hasn't investigated Assemblyman Anthony Seminerio, accused of selling access to fellow lawmakers; or the criminal case of state Sen. Hiram Monserrate, accused of assaulting his girlfriend with a broken glass; or Michael Boxley, counsel to powerful Assembly Speaker Sheldon Silver, who was taken out of the Capitol in handcuffs, charged with rape and eventually pleaded guilty to sexual misconduct. Also infamous, and untouched by the SIC, are the sexual exploits that led to a crackdown on the legislative intern program, and the many other lawmakers slapped with misdemeanors and felonies over the years. As for the current biggest political probe in Albany, former Senate Majority Leader Joseph Bruno, R-Brunswick, has been indicted by the federal government, accused of using his political position to reap millions of dollars as a consultant - claims the SIC found too flimsy to pursue.
"We don't go after anybody unless there is a complaint against someone," said George Friedman, one of six SIC commissioners. "We don't go looking for law violators." In some cases, other investigative bodies just get to the cases first, Friedman said. In Bruno's case, the commission was unable to investigate, due to a "very, very full plate," Friedman said. "You have to balance the availability of your employees, what assets you can devote to which investigations," Friedman said. "The ones that seem the flimsiest fall by the wayside and don't get attended to." "In New York City, where most of these things go on, you have five separate pros - district attorneys, full staffs - and they have the best police department in the world, fully staffed to invest in those activities," Friedman said. Whether the SIC survives, is combined with other agencies or disappears, good government groups argue that New York needs an entity monitoring lawmakers and the executive branch that's completely independent of political influence. If an effective, independent system were put in place, the broad powers the SIC has to issue subpoenas, and in some cases offer immunity in exchange for testimony, could be effective.
The Legislative Ethics Commission, for example, has fielded 13 complaints about lawmakers since 1995. Twelve ended in no violation and one is pending. The state Senate Standing Committee on Ethics has not investigated a single senator in the past 10 years. Over the same period, the Assembly Standing Committee on Ethics and Guidance has investigated four lawmakers and taken action against three. Only one had to resign - Democratic Assemblyman Roger Green of New York City in 2004 after 24 years in office. He pleaded guilty to three misdemeanors for stealing from the state by submitting fake travel claims for expenses he never incurred. "What we're trying to do is make sure that legislators are educated as to what is proper and what isn't," said Assemblyman William Magnarelli, co-chairman of the Legislative Ethics Commission. "There are some fine lines on things, believe it or not."
The commission often receives questions from lawmakers about potential private business ventures and other ethical issues. The commission gives recommendations on how to operate within the guidelines of public officers law. It also provides materials to new members about financial disclosure and legal statutes. At the SIC, commissioners can privately share any findings with the political figures who appointed them. Critics say that's another reason it's become a paper tiger. "They (the lawmakers who appointed them) have the power to make a suggestion to the commissioner they've appointed," Friedman acknowledged, but he said they don't have the power to halt an investigation. "Each of them has two appointments at this time. They can make suggestions to their two appointees, along the lines of 'Gee, I would really appreciate it if you could do something to avoid that investigation.'"
Friedman and Commissioner Vincent Nicolosi were appointed by Assembly Speaker Sheldon Silver. Two others, Henry Nahal and Robert Price, were appointed by Bruno. Lerner and the newest commissioner, John Cahill, were appointed by Gov. George Pataki. They serve four-year terms. Asked about the SIC's fate, Sisa Moyo, spokeswoman for Assembly Speaker Sheldon Silver, said they were examining all options. She added that the Manhattan Democrat "absolutely" did not have special access to information about cases or complaints before the SIC from the two commissioners he appointed. A spokesman for state Senate Majority Leader Malcolm Smith, D-Queens, said no decision has been reached by the state Senate Democratic Conference. The SIC will be discussed as part of the budget process, Austin Shafran said. Right now the commission is making the case to combine itself with the Inspector General's Office and the Public Integrity Commission - the state's other watchdog - into one entity. If the SIC does dissolve, so will its broad investigative powers.
Castigated Judge Known as Fair, Faithful Man
Castigated Judge Known as Fair, Faithful Man
Pr. George's Jurist Criticized for Freeing Murder Defendant Without Bond
The Washington Post by Avis Thomas-Lester - March 15, 2009
Pr. George's Jurist Criticized for Freeing Murder Defendant Without Bond
The Washington Post by Avis Thomas-Lester - March 15, 2009
In the courtroom, Judge Hassan A. El-Amin is known for delivering stern but respectful lectures. Some defendants get the "Rayful Edmond" speech, where they hear about the notorious drug kingpin serving a life sentence for running the area's largest crime organization. Others get the "this is why you are going to jail" speech. "He'll say something like, 'Your parents couldn't correct you, your teachers couldn't correct you, so now you're faced with a whole correctional system. You have to be corrected,' " said Sonsyrea Tate Montgomery, a longtime friend of the Prince George's County district judge. Although El-Amin's March 5 decision to release murder defendant Sean M. Sykes without bond has drawn criticism from police and prosecutors, acquaintances said his approach on the bench is informed by his Muslim faith, and several defense lawyers described him as a fair judge. "My clients walk away feeling like they had a fair hearing, whether they leave through the back door wearing handcuffs or walk out the front of the courthouse," said criminal defense attorney Antoini Jones. Sykes was arrested Thursday on a drug charge, a week after being released. Those critical of El-Amin's decision in the Sykes case could point to no specific cases that would prove a broad pattern of leniency toward defendants. Last March, however, El-Amin set bond at $50,000 for Arlen C. Garrett, another defendant charged with second-degree murder.
District judges in Prince George's rarely release murder defendants before trial. The few who are released usually post a high bond -- generally no less than $500,000. Garrett, then 22 and enrolled at Howard University, was accused, along with another man, of killing a teenager in Hyattsville over drugs. In court, Garrett had strong support from his father, an architect, and his mother, a teacher. After El-Amin set bond, Garrett's family paid 10 percent to a bondsman and Garrett was released. Garrett appeared at all court hearings and stayed out of trouble. He ultimately pleaded guilty to attempted armed robbery and a gun charge and was sentenced in January to eight years in prison. Defense lawyer Christopher Griffiths cited the case as an example of a judge exercising discretion properly. "Some judges have knee-jerk reactions when they see someone charged with murder," said Griffiths, who represented Garrett. "That's not what we want from members of the bench." El-Amin is a classical pianist and motorcycle enthusiast, a former defense attorney who coordinates an annual youth oratorical contest and who founded a chess program at a high school in Temple Hills.
Sykes is charged with second-degree murder in the Feb. 24 stabbing of Rene R. Belasco in Oxon Hill. Police allege that Sykes is a member of the Bloods gang and that, on the night of the slaying, he and another man threatened to kill a witness. Sykes was initially held on $1.5 million bond, but El-Amin released him to his mother after concluding that Sykes posed no danger to the community and was not a flight risk. Prosecutors are seeking to reverse the ruling, alleging in court papers that returning Sykes to the apartment building where he lives and where the stabbing occurred "places all residents in fear and all witnesses in potential danger." Belasco's stepfather called the judge's decision a "travesty." Prosecutors revived an earlier drug case against Sykes, and he was arrested Thursday for possession of marijuana with intent to distribute. He is expected to be in court tomorrow in that case. El-Amin, who was appointed to the District Court in 2000 by Gov. Parris N. Glendening (D), declined to speak for this story. Acquaintances said El-Amin's treatment of defendants in his courtroom is borne of a respect for individual rights that is a tenet of his Muslim faith. Born Vernon Jones in Charleston, W.Va., he attended Yale on a full scholarship before embracing Islam and going to law school.
For several years, El-Amin has coordinated a youth oratorical contest sponsored by the J. Franklyn Bourne Bar Association, an organization of mostly black lawyers in Prince George's and Montgomery counties. El-Amin, 61, helped found programs to provide educational enrichment to at-risk youths and to teach students about the consequences of drug and alcohol abuse. He started a chess program at Crossland High School, said attorney Betty Hewlett, who has known El-Amin for 27 years. "He is very bright, very studious, very dedicated and multi-talented," Hewlett said. "But his biggest commitment is to young people. He feels it is a responsibility . . . because we lose so many." The judge holds a patent for a device that pre-moistens bathroom tissue, records show. He has been married for more than 30 years and has adult children and grandchildren, acquaintances said. Steven Stosny, director of the Core Value Workshop, a treatment program for domestic-violence defendants, said his clients credit El-Amin for taking an interest in their progress and encouraging them to continue to improve. "He believes you can make a psychological difference in people's lives," Stosny said. "I find him to be compassionate and caring. When you give people the benefit of the doubt, there can be a margin of error."
Jones said the controversy surrounding El-Amin's decision in the Sykes case is likely to have a "chilling effect" on the willingness of other judges to exercise their discretion over whether to release defendants before trial. In a previous interview, El-Amin criticized the Maryland court system for failing to provide lawyers to defendants at bond hearings. He also said he takes seriously "the presumption of innocence." But some law enforcement officials said that the decision was wrong and that residents' safety should outweigh defendants' rights. "I appreciate his focus on the rights of the defendants, but the bigger group we deal with in the police department are victims," said Maj. Andy Ellis, spokesman for the county police. "What about the rights of our victims?" Staff writer Ruben Castaneda and researcher Meg Smith contributed to this report.
Saturday, March 14, 2009
Push for Madoff to Sing about Schumer-like Ties, Appeal Filed
Circuit Set to Hear Appeal on Madoff Bail
The New York Law Journal by Mark Hamblett - March 16, 2009
Bernard Madoff's lawyers will have a tough time convincing the U.S. Court of Appeals for the Second Circuit to order their client released on bail until he is sentenced June 16, because the standards for post-conviction release are high and hard to meet. Ira Sorkin and Daniel Horwitz of Dickstein Shapiro filed papers in the circuit Friday arguing that Southern District Judge Denny Chin should not have revoked Mr. Madoff's bail on Thursday, which sent him off to the Metropolitan Correctional Center following his guilty plea. Arguments are scheduled for this Thursday morning before Judges Dennis Jacobs, Richard Wesley and Robert Sack. The government is expected to submit its own papers by tomorrow, arguing that Judge Chin's decision should stand. Messrs. Sorkin and Horwitz will first try to convince the panel to quickly grant their motion to stay the remand order and their motion to reinstate the bail conditions that governed Mr. Madoff until he pleaded guilty to 11 felonies in the multi-billion dollar fraud he executed out of the offices at Bernard L. Madoff Investment Securities. If they are unsuccessful on those motions, the attorneys can still follow through with their appeal of Judge Chin's decision, albeit over a longer time period. Post-conviction detention is governed under 18 U.S.C. §3143, and the standards for determining bail are much stricter than those for pretrial bail under §3142, in part because the presumption of innocence no longer applies.
But the basic difference is that in the Bail Reform Act "there is no constitutional right to bail once a person has been convicted." These distinctions were made by Mr. Sorkin in papers filed during his successful effort in January to persuade Magistrate Judge Ronald Ellis to allow Mr. Madoff to remain out on bail pending a trial or a plea - a decision Judge Lawrence McKenna later left undisturbed on appeal. Release of a defendant pending sentencing, as opposed to pending appeal, is covered by §3143(a), a tough standard. The statute states the judge "shall order" a person be detained unless the judge finds by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any person or the community if released under §3142(b) or (c). These subsections lay out the standard for pretrial release. But if the defendant can make such a showing by clear and convincing evidence, the statute goes on to state that the judge "shall order" release.
Judge Chin's decision's will be reviewed by the Second Circuit under the clear error standard, another difficult hurdle for the defense team. When Mr. Madoff, 70, pleaded guilty last week, Mr. Sorkin tried to argue that other high-profile white-collar defendants have been allowed to stay out of prison post-conviction and pending sentencing. But when Assistant U.S. Attorney Marc Litt rose to give the counter-argument, Judge Chin said he did not need to hear the government's side. "The exposure is great, 150 years in prison," Judge Chin said. "In light of Mr. Madoff's age, he has an incentive to flee, he has the means to flee, and thus, he presents a risk of flight." In their papers, Messrs. Sorkin and Horwitz said Judge Chin "erroneously failed to release Mr. Madoff because the evidence clearly shows that Mr. Madoff is not a flight risk and does not pose a threat to the community."
The attorneys cite the Second Circuit case of United States v. Abuhamra, 389 F. 3d 309 (2004). Abuhamra states that if a defendant "can make the required evidentiary showing, the statute establishes a right to liberty that is not simply discretionary but mandatory." The Abuhamra court also notes the language in the statute that the judge "SHALL order the release of the person in accordance with §3142(b) or (c)." The lawyers say Judge Chin applied the wrong standard "because the Bail Reform Act does not require a showing that the defendant does not have an incentive to flee." Until Thursday, Mr. Madoff was out on $10 million bail but was confined to his Park Avenue penthouse, wearing an electronic monitoring bracelet. Initially, the government did not object to Mr. Madoff's bail package, but that changed when Mr. Madoff and his wife, Ruth, mailed $1 million in jewelry and other valuables in late December to family and friends. Mr. Sorkin and Mr. Horwitz claim Mr. Madoff's guilty plea does not change a thing. They remind the circuit that Mr. Madoff "confessed to his sons that he had committed fraud in the amount of $50 billion," and "voluntarily admitted his culpability to the FBI."
"Based on these actions, Mr. Madoff certainly understood that he faced essentially a life sentence at the time he made his confessions," they said. "Finally, that Mr. Madoff has now pled guilty does not alter the factual analysis regarding his risk of flight in any meaningful way," they said. "The district court ignored the fact that Mr. Madoff was always cognizant of the fact that he would die in prison - in essence, this was a foregone conclusion since the moment of his arrest on Dec. 11, 2008." Meanwhile, papers released Friday as part of the appeal states that Mr. Madoff has between $823 million and $826 million in assets. The papers, a statement of assets and liabilities assembled for the civil case brought against Mr. Madoff by the Securities and Exchange Commission, show that the bulk of the assets, $700 million, represented the net value of Mr. Madoff's businesses. Among the monthly expenses listed on the documents is $100,000 a month in legal fees. Mark.Hamblett@incisivemedia.com
The New York Law Journal by Mark Hamblett - March 16, 2009
Bernard Madoff's lawyers will have a tough time convincing the U.S. Court of Appeals for the Second Circuit to order their client released on bail until he is sentenced June 16, because the standards for post-conviction release are high and hard to meet. Ira Sorkin and Daniel Horwitz of Dickstein Shapiro filed papers in the circuit Friday arguing that Southern District Judge Denny Chin should not have revoked Mr. Madoff's bail on Thursday, which sent him off to the Metropolitan Correctional Center following his guilty plea. Arguments are scheduled for this Thursday morning before Judges Dennis Jacobs, Richard Wesley and Robert Sack. The government is expected to submit its own papers by tomorrow, arguing that Judge Chin's decision should stand. Messrs. Sorkin and Horwitz will first try to convince the panel to quickly grant their motion to stay the remand order and their motion to reinstate the bail conditions that governed Mr. Madoff until he pleaded guilty to 11 felonies in the multi-billion dollar fraud he executed out of the offices at Bernard L. Madoff Investment Securities. If they are unsuccessful on those motions, the attorneys can still follow through with their appeal of Judge Chin's decision, albeit over a longer time period. Post-conviction detention is governed under 18 U.S.C. §3143, and the standards for determining bail are much stricter than those for pretrial bail under §3142, in part because the presumption of innocence no longer applies.
But the basic difference is that in the Bail Reform Act "there is no constitutional right to bail once a person has been convicted." These distinctions were made by Mr. Sorkin in papers filed during his successful effort in January to persuade Magistrate Judge Ronald Ellis to allow Mr. Madoff to remain out on bail pending a trial or a plea - a decision Judge Lawrence McKenna later left undisturbed on appeal. Release of a defendant pending sentencing, as opposed to pending appeal, is covered by §3143(a), a tough standard. The statute states the judge "shall order" a person be detained unless the judge finds by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any person or the community if released under §3142(b) or (c). These subsections lay out the standard for pretrial release. But if the defendant can make such a showing by clear and convincing evidence, the statute goes on to state that the judge "shall order" release.
Judge Chin's decision's will be reviewed by the Second Circuit under the clear error standard, another difficult hurdle for the defense team. When Mr. Madoff, 70, pleaded guilty last week, Mr. Sorkin tried to argue that other high-profile white-collar defendants have been allowed to stay out of prison post-conviction and pending sentencing. But when Assistant U.S. Attorney Marc Litt rose to give the counter-argument, Judge Chin said he did not need to hear the government's side. "The exposure is great, 150 years in prison," Judge Chin said. "In light of Mr. Madoff's age, he has an incentive to flee, he has the means to flee, and thus, he presents a risk of flight." In their papers, Messrs. Sorkin and Horwitz said Judge Chin "erroneously failed to release Mr. Madoff because the evidence clearly shows that Mr. Madoff is not a flight risk and does not pose a threat to the community."
The attorneys cite the Second Circuit case of United States v. Abuhamra, 389 F. 3d 309 (2004). Abuhamra states that if a defendant "can make the required evidentiary showing, the statute establishes a right to liberty that is not simply discretionary but mandatory." The Abuhamra court also notes the language in the statute that the judge "SHALL order the release of the person in accordance with §3142(b) or (c)." The lawyers say Judge Chin applied the wrong standard "because the Bail Reform Act does not require a showing that the defendant does not have an incentive to flee." Until Thursday, Mr. Madoff was out on $10 million bail but was confined to his Park Avenue penthouse, wearing an electronic monitoring bracelet. Initially, the government did not object to Mr. Madoff's bail package, but that changed when Mr. Madoff and his wife, Ruth, mailed $1 million in jewelry and other valuables in late December to family and friends. Mr. Sorkin and Mr. Horwitz claim Mr. Madoff's guilty plea does not change a thing. They remind the circuit that Mr. Madoff "confessed to his sons that he had committed fraud in the amount of $50 billion," and "voluntarily admitted his culpability to the FBI."
"Based on these actions, Mr. Madoff certainly understood that he faced essentially a life sentence at the time he made his confessions," they said. "Finally, that Mr. Madoff has now pled guilty does not alter the factual analysis regarding his risk of flight in any meaningful way," they said. "The district court ignored the fact that Mr. Madoff was always cognizant of the fact that he would die in prison - in essence, this was a foregone conclusion since the moment of his arrest on Dec. 11, 2008." Meanwhile, papers released Friday as part of the appeal states that Mr. Madoff has between $823 million and $826 million in assets. The papers, a statement of assets and liabilities assembled for the civil case brought against Mr. Madoff by the Securities and Exchange Commission, show that the bulk of the assets, $700 million, represented the net value of Mr. Madoff's businesses. Among the monthly expenses listed on the documents is $100,000 a month in legal fees. Mark.Hamblett@incisivemedia.com
Friday, March 13, 2009
Another Lawyer Accused of Screwing With Property Deed
Lawsuit: Congers woman duped out of deed to home
The Journal News by James Walsh and Steve Lieberman - March 13, 2009
A 76-year-old Congers woman has accused Monsey attorney Ryan Karben and a New Jersey-based company of misrepresenting a real estate transaction in which she says she lost the deed to her home. The lawsuit filed in federal court in White Plains accuses Karben and a limited liability corporation called High Mountain Sanitation Haverstraw of engaging in a "scheme" to deprive Elizabeth DiGiacomo of a two-bedroom townhouse at 46 Leif Blvd. "She thought she was getting a $40,000 loan and giving back a mortgage," said Wayne Gavioli, a Nanuet attorney representing DiGiacomo, but instead she signed the property deed over to High Mountain Sanitation. Karben said the lawsuit was baseless. "I attended a closing, and that's the extent of my involvement in this," Karben said. "Any conjecture that I did anything improper is utter nonsense." He said that a son of DiGiacomo's attended the closing and appeared to be advising her throughout the transaction.
DiGiacomo needed the loan to pay her son's medical and business debts, Gavioli said. The deed filed at the Rockland County Clerk's Office on Dec. 12 stated that $260,000 was paid for the house, but Gavioli said DiGiacomo got only the $40,000. "My client said Ryan put the document in front of her and told her to sign," said Gavioli, who filed the lawsuit Monday. "She had no idea she was conveying over the property," Gavioli said. "When she later learned that, she almost had a heart attack." The lawsuit was filed under civil provisions of the federal Racketeer Influenced Corrupt Organizations Act, known as RICO. Citizens are allowed to initiate lawsuits using the statute if they believe they can prove they were victimized by a criminal enterprise. Neither Karben nor Gavioli knew the son's name or how to contact him. Gavioli said the son was undergoing treatments for cancer.
Karben would not discuss how he came to represent DiGiacomo, but later stated in an e-mail that "a local businessperson" asked if he would represent a friend's mother at the closing on Nov. 18. In a subsequent interview, Karben wouldn't name that businessperson. "It wouldn't be appropriate to discuss that because there's litigation going on," Karben said. "I'm not going to discuss other people." He said DiGiacomo's lawsuit "is utterly baseless. She reviewed the documents that she signed. She knew she was doing a real estate sale and that was that." Karben said he was not involved in the sale price or any negotiations with High Mountain Sanitation. He said he didn't know anyone connected with High Mountain, and no lawyer represented the company at the closing. By bringing the lawsuit, DiGiacomo sought "to vacate and set aside the deed as (a) false and fraudulent instrument induced by a scheme to deprive (DiGiacomo) of full ownership and title" to the property. DiGiacomo also wants $500,000 from the defendants.
The new owner
Public records did not provide the names of High Mountain Sanitation's principals or attorneys. A telephone call to Meister Abstract of Brooklyn, the title company involved in the transaction, was not returned yesterday. Incorporation records filed with the New York Department of State on June 15 gave the address of High Mountain Sanitation as 892 Belmont Ave., Prospect Park, N.J.
The street, though, does not extend into Prospect Park, and 892 Belmont is the North Haledon, N.J., location of the Puddingstone Group, a real estate business that last year proposed building apartments on the closed Ramapo landfill. Gershon Alexander, a member of the corporation, is a brother of Naomi Streicher, a Pomona real estate broker who had listed the sale of DiGiacomo's home. Streicher said she had been unaware of the deed transfer and had thought that only a lien was being put against the property so DiGiacomo could get the $40,000 loan. "The deal was that she was selling the house and that she'd get a loan until she sold the house," Streicher said. She said the transaction occurred in her office, but she wasn't present and was unaware until months later that the deed had changed hands. Streicher said she received no commission, and she removed the property from Multiple Listing Service on Feb. 12. Alexander said he knew nothing about High Mountain Sanitation Haverstraw or about the real estate transaction with DiGiacomo. He was not at his North Haledon office when a reporter went there yesterday morning, and he did not return messages seeking additional information from him.
She's still in the house
Gavioli said DiGiacomo hasn't moved from the house and while there were no attempts to evict her, she was staying with relatives in Massachusetts. He said she paid the mortgage and common charges until he advised her to stop a month ago. DiGiacomo went to Gavioli in February for advice about Medicare for her husband, Frank, who was in a long-term-care facility, and to have Gavioli represent her when she sold her house. Gavioli said he discovered the transferred deed while researching public records for the $40,000 lien. He said he sent copies of the lawsuit to the U.S. Attorney's Office in White Plains. A spokesman for the office, Herbert Hadad, would not say whether it knew of the lawsuit and would not confirm nor deny a potential investigation.
Karben, a Spring Valley deputy village attorney and special counsel for Suffern's urban renewal project, said he was surprised by DiGiacomo's charges. "I walked in there thinking it was a property sale and left thinking it was a property sale," Karben said. "I was shocked to learn Mrs. DiGiacomo did not think she was transferring title to their property." Karben is a former state assemblyman who resigned abruptly nearly three years ago. Last week, Suffern Mayor John Keegan and Deputy Mayor John Meehan proposed removing Karben and transferring his duties to Village Attorney Terry Rice. They were overruled by Trustees Dagan LaCorte, Patricia Abato and Andrew Haggerty. "My reason was that I'm fully confident the village attorney can take this project into the future," Keegan said, "and in these times we have to look at (eliminating) duplication of services." LaCorte, who's opposing Keegan in a mayoral primary, has seen Karben's continued work on the project as crucial to its success.
The Journal News by James Walsh and Steve Lieberman - March 13, 2009
A 76-year-old Congers woman has accused Monsey attorney Ryan Karben and a New Jersey-based company of misrepresenting a real estate transaction in which she says she lost the deed to her home. The lawsuit filed in federal court in White Plains accuses Karben and a limited liability corporation called High Mountain Sanitation Haverstraw of engaging in a "scheme" to deprive Elizabeth DiGiacomo of a two-bedroom townhouse at 46 Leif Blvd. "She thought she was getting a $40,000 loan and giving back a mortgage," said Wayne Gavioli, a Nanuet attorney representing DiGiacomo, but instead she signed the property deed over to High Mountain Sanitation. Karben said the lawsuit was baseless. "I attended a closing, and that's the extent of my involvement in this," Karben said. "Any conjecture that I did anything improper is utter nonsense." He said that a son of DiGiacomo's attended the closing and appeared to be advising her throughout the transaction.
DiGiacomo needed the loan to pay her son's medical and business debts, Gavioli said. The deed filed at the Rockland County Clerk's Office on Dec. 12 stated that $260,000 was paid for the house, but Gavioli said DiGiacomo got only the $40,000. "My client said Ryan put the document in front of her and told her to sign," said Gavioli, who filed the lawsuit Monday. "She had no idea she was conveying over the property," Gavioli said. "When she later learned that, she almost had a heart attack." The lawsuit was filed under civil provisions of the federal Racketeer Influenced Corrupt Organizations Act, known as RICO. Citizens are allowed to initiate lawsuits using the statute if they believe they can prove they were victimized by a criminal enterprise. Neither Karben nor Gavioli knew the son's name or how to contact him. Gavioli said the son was undergoing treatments for cancer.
Karben would not discuss how he came to represent DiGiacomo, but later stated in an e-mail that "a local businessperson" asked if he would represent a friend's mother at the closing on Nov. 18. In a subsequent interview, Karben wouldn't name that businessperson. "It wouldn't be appropriate to discuss that because there's litigation going on," Karben said. "I'm not going to discuss other people." He said DiGiacomo's lawsuit "is utterly baseless. She reviewed the documents that she signed. She knew she was doing a real estate sale and that was that." Karben said he was not involved in the sale price or any negotiations with High Mountain Sanitation. He said he didn't know anyone connected with High Mountain, and no lawyer represented the company at the closing. By bringing the lawsuit, DiGiacomo sought "to vacate and set aside the deed as (a) false and fraudulent instrument induced by a scheme to deprive (DiGiacomo) of full ownership and title" to the property. DiGiacomo also wants $500,000 from the defendants.
The new owner
Public records did not provide the names of High Mountain Sanitation's principals or attorneys. A telephone call to Meister Abstract of Brooklyn, the title company involved in the transaction, was not returned yesterday. Incorporation records filed with the New York Department of State on June 15 gave the address of High Mountain Sanitation as 892 Belmont Ave., Prospect Park, N.J.
The street, though, does not extend into Prospect Park, and 892 Belmont is the North Haledon, N.J., location of the Puddingstone Group, a real estate business that last year proposed building apartments on the closed Ramapo landfill. Gershon Alexander, a member of the corporation, is a brother of Naomi Streicher, a Pomona real estate broker who had listed the sale of DiGiacomo's home. Streicher said she had been unaware of the deed transfer and had thought that only a lien was being put against the property so DiGiacomo could get the $40,000 loan. "The deal was that she was selling the house and that she'd get a loan until she sold the house," Streicher said. She said the transaction occurred in her office, but she wasn't present and was unaware until months later that the deed had changed hands. Streicher said she received no commission, and she removed the property from Multiple Listing Service on Feb. 12. Alexander said he knew nothing about High Mountain Sanitation Haverstraw or about the real estate transaction with DiGiacomo. He was not at his North Haledon office when a reporter went there yesterday morning, and he did not return messages seeking additional information from him.
She's still in the house
Gavioli said DiGiacomo hasn't moved from the house and while there were no attempts to evict her, she was staying with relatives in Massachusetts. He said she paid the mortgage and common charges until he advised her to stop a month ago. DiGiacomo went to Gavioli in February for advice about Medicare for her husband, Frank, who was in a long-term-care facility, and to have Gavioli represent her when she sold her house. Gavioli said he discovered the transferred deed while researching public records for the $40,000 lien. He said he sent copies of the lawsuit to the U.S. Attorney's Office in White Plains. A spokesman for the office, Herbert Hadad, would not say whether it knew of the lawsuit and would not confirm nor deny a potential investigation.
Karben, a Spring Valley deputy village attorney and special counsel for Suffern's urban renewal project, said he was surprised by DiGiacomo's charges. "I walked in there thinking it was a property sale and left thinking it was a property sale," Karben said. "I was shocked to learn Mrs. DiGiacomo did not think she was transferring title to their property." Karben is a former state assemblyman who resigned abruptly nearly three years ago. Last week, Suffern Mayor John Keegan and Deputy Mayor John Meehan proposed removing Karben and transferring his duties to Village Attorney Terry Rice. They were overruled by Trustees Dagan LaCorte, Patricia Abato and Andrew Haggerty. "My reason was that I'm fully confident the village attorney can take this project into the future," Keegan said, "and in these times we have to look at (eliminating) duplication of services." LaCorte, who's opposing Keegan in a mayoral primary, has seen Karben's continued work on the project as crucial to its success.
Thursday, March 12, 2009
Thug, Just Admonished by Judge, Arrested for Fraud, Wanted for Rape
Man charged with scamming NYC Transit wanted in rape
Newsday by ROCCO PARASCANDOLA - March 12, 2009
The Queens man called "a crook" by a civil court judge suspicious of his injury claims against New York City Transit has been charged with insurance fraud and grand larceny - and authorities say he's wanted for a rape in Pennsylvania. Newsday on Monday reported on the unusual case involving Paul Hightower, the 37-year-old mortgage company worker who said that in 2006 he had to quit work because of debilitating injuries suffered when the driver of the Q-85 bus in Springfield Gardens turned so sharply that he was thrown from his seat and into the exit well of the bus. Hightower sued. But last month, with the case close to trial, Judge Duane Hart sharply rebuked Hightower in court. He declared a mistrial, recused himself and referred the case to the Queens district attorney's office. "What I am saying is, in this case, and I am telling Mr. Hightower on the record, I am recusing myself because I think you are a crook," Hart said. "It seems like you live on files, claims for accidents, real or imagined or set up." Yesterday, the DA accused Hightower of fraud.
Hightower after the incident received $17,000 in insurance money from New York City Transit, a sum that was based on lost wages DA Richard Brown says were dramatically overstated. Paul J. Fleuranges, vice president of corporate communications for New York City Transit, said, "Individuals who engage in the prosecution of fraudulent or exaggerated claims of personal injury need be aware of the potentially severe consequences of their conduct." As Hightower was being processed in Queens on the fraud charge, authorities learned there was a warrant out for his arrest in Harrisburg, Penn. Authorities there could not be reached for comment yesterday, but Brown says Hightower was charged in 2002 with raping a minor. Hightower was arraigned Tuesday night and ordered held without bail. He refused to waive extradition on the rape charge. Hart and his lawyer did not respond to requests for comment. rocco.parascandola@newsday.com
Newsday by ROCCO PARASCANDOLA - March 12, 2009
The Queens man called "a crook" by a civil court judge suspicious of his injury claims against New York City Transit has been charged with insurance fraud and grand larceny - and authorities say he's wanted for a rape in Pennsylvania. Newsday on Monday reported on the unusual case involving Paul Hightower, the 37-year-old mortgage company worker who said that in 2006 he had to quit work because of debilitating injuries suffered when the driver of the Q-85 bus in Springfield Gardens turned so sharply that he was thrown from his seat and into the exit well of the bus. Hightower sued. But last month, with the case close to trial, Judge Duane Hart sharply rebuked Hightower in court. He declared a mistrial, recused himself and referred the case to the Queens district attorney's office. "What I am saying is, in this case, and I am telling Mr. Hightower on the record, I am recusing myself because I think you are a crook," Hart said. "It seems like you live on files, claims for accidents, real or imagined or set up." Yesterday, the DA accused Hightower of fraud.
Hightower after the incident received $17,000 in insurance money from New York City Transit, a sum that was based on lost wages DA Richard Brown says were dramatically overstated. Paul J. Fleuranges, vice president of corporate communications for New York City Transit, said, "Individuals who engage in the prosecution of fraudulent or exaggerated claims of personal injury need be aware of the potentially severe consequences of their conduct." As Hightower was being processed in Queens on the fraud charge, authorities learned there was a warrant out for his arrest in Harrisburg, Penn. Authorities there could not be reached for comment yesterday, but Brown says Hightower was charged in 2002 with raping a minor. Hightower was arraigned Tuesday night and ordered held without bail. He refused to waive extradition on the rape charge. Hart and his lawyer did not respond to requests for comment. rocco.parascandola@newsday.com
NYLJ: Lippman Shakes Up Court Administration
Lippman Shakes Up Court Administration
The New York Law Journal by Joel Stashenko - March 12, 2009
ALBANY, NEW YORK - Jonathan Lippman yesterday took what he called the first of many intended steps as chief judge to clear away "administrative clutter" in the upper echelons of New York state's court structure by reducing from five to two the number of deputy chief administrative judges. The new chief judge said that only the posts of deputy chief administrative judges for the courts in New York City and for the courts outside of New York City remain.
He announced that he has appointed Supreme Court Justice Fern Fisher, 54, as deputy chief administrative judge for courts in New York City. She succeeds Judge Joan B. Carey, the deputy chief administrative judge for New York City courts since 1997. Judge Carey, 69, will remain as interim administrative judge for the civil branch of Manhattan Supreme Court through the end of the year, when she retires. Judge Jan H. Plumadore, 66, is chief administrative judge for courts outside New York City. The titles of deputy chief administrative judges for matrimonial affairs, for justice initiatives and for court operations and planning will be eliminated and their former holders have either been reassigned to other duties or retired. Chief Judge Lippman also announced, as expected, that Ann Pfau would remain as chief administrative judge. Judge Pfau, 60, succeeded Judge Lippman as chief administrative judge in 2007, when Judge Lippman was appointed presiding justice of the Appellate Division, First Department.
In addition, Judge Juanita Bing Newton, the deputy chief administrative judge for justice initiatives, has been appointed dean of the Pace University-affiliated New York State Judicial Institute. Judge Newton, 58, will succeed Robert G.M. Keating, who became Pace's vice president for strategic initiatives last year. Judge Judy Harris-Kluger, 56, deputy chief administrative judge for court operations and planning, will head a newly created Office of Policy and Planning that will work with judges to improve the efficiency of the state's courts. The title of the fifth deputy chief administrative judge, for matrimonial matters, will be eliminated. It has been vacant since the Dec. 31 retirement of Jacqueline W. Silbermann. Chief Judge Lippman said the training and mentoring of matrimonial judges statewide will now be done through the Judicial Institute. He added that Judge Fisher will relinquish her job as citywide Civil Court administrator, Judge Kluger as citywide Family Court administrator and Judge Newton as citywide Criminal Court administrator as they take their new assignments.
Time to Reassess
He said with all three jobs open, it would be a good time to reassess the effectiveness of the positions as part of the overall analysis of supervisory and administrative judges statewide. Judge Lippman has been hinting at making significant changes in court leadership since Feb. 11, the day he was confirmed by the state Senate. Yesterday's announcements also represented his first significant break with operations of the courts as they developed during former Chief Judge Judith S. Kaye's 15-plus years as chief judge. Judge Lippman served for 12 of those years as chief administrative judge and, as he acknowledged yesterday, was in part responsible for developing the structure of the five deputy chief administrators at the top of the court system. Judge Lippman called Ms. Kaye "the greatest chief judge in the history of this state," but said it is time for changes. He said the grim state of New York's finances and of the state and national economies are in large part dictating the streamlining of the court leadership's flow chart.
"As chief judge, in my own right, just as Judge Kaye addressed the challenges that confronted her during her 15-year tenure, I think there are new challenges facing this state," Judge Lippman said yesterday in an interview. "Two that hit you square in the face - one is this judicial salary debacle that must be addressed and the other is a fiscal crisis of epic proportions facing this state and this country. That is the framework for the challenges that I am going to confront in the years ahead." He said the changes are designed to create a "clean, straight line from administration to the trial courts." "The idea is to put the focus on court operations, on the trial courts, and to streamline the administrative structure to allow that priority of the court system to shine through," Judge Lippman said. While he had no estimate of savings to the court system, he said the shift would ultimately free up resources that could be directed to the trial-level courts.
Judge Lippman said other changes are coming. The state courts' 56 administrative and supervising judges will be re-evaluated and bureaucratic changes at the Office of Court Administration are also under review. The courts have increasingly drawn criticism from within the Legislature in recent years, especially from the former chairman of the Senate Judiciary Committee, John DeFrancisco, R-Syracuse, for being top-heavy administratively and bureaucratically. Judge Lippman acknowledged the criticism and said the administrative structure grew because changes in the court system demanded administrators with new "portfolios" to respond to new stresses on the courts. The changes announced yesterday were made in consultation with the four presiding justices of the Appellate Division and went into effect immediately. Judge Lippman said that having a "leaner" administrative structure will not inhibit the courts' efforts to address the judicial pay raise controversy or respond to other challenges facing the courts, including the possibility of drug law reform, shortages of funding for indigent legal services in civil and criminal courts and the continuing need to improve town and village courts. Joel.Stashenko@incisivemedia.com
The New York Law Journal by Joel Stashenko - March 12, 2009
ALBANY, NEW YORK - Jonathan Lippman yesterday took what he called the first of many intended steps as chief judge to clear away "administrative clutter" in the upper echelons of New York state's court structure by reducing from five to two the number of deputy chief administrative judges. The new chief judge said that only the posts of deputy chief administrative judges for the courts in New York City and for the courts outside of New York City remain.
He announced that he has appointed Supreme Court Justice Fern Fisher, 54, as deputy chief administrative judge for courts in New York City. She succeeds Judge Joan B. Carey, the deputy chief administrative judge for New York City courts since 1997. Judge Carey, 69, will remain as interim administrative judge for the civil branch of Manhattan Supreme Court through the end of the year, when she retires. Judge Jan H. Plumadore, 66, is chief administrative judge for courts outside New York City. The titles of deputy chief administrative judges for matrimonial affairs, for justice initiatives and for court operations and planning will be eliminated and their former holders have either been reassigned to other duties or retired. Chief Judge Lippman also announced, as expected, that Ann Pfau would remain as chief administrative judge. Judge Pfau, 60, succeeded Judge Lippman as chief administrative judge in 2007, when Judge Lippman was appointed presiding justice of the Appellate Division, First Department.
In addition, Judge Juanita Bing Newton, the deputy chief administrative judge for justice initiatives, has been appointed dean of the Pace University-affiliated New York State Judicial Institute. Judge Newton, 58, will succeed Robert G.M. Keating, who became Pace's vice president for strategic initiatives last year. Judge Judy Harris-Kluger, 56, deputy chief administrative judge for court operations and planning, will head a newly created Office of Policy and Planning that will work with judges to improve the efficiency of the state's courts. The title of the fifth deputy chief administrative judge, for matrimonial matters, will be eliminated. It has been vacant since the Dec. 31 retirement of Jacqueline W. Silbermann. Chief Judge Lippman said the training and mentoring of matrimonial judges statewide will now be done through the Judicial Institute. He added that Judge Fisher will relinquish her job as citywide Civil Court administrator, Judge Kluger as citywide Family Court administrator and Judge Newton as citywide Criminal Court administrator as they take their new assignments.
Time to Reassess
He said with all three jobs open, it would be a good time to reassess the effectiveness of the positions as part of the overall analysis of supervisory and administrative judges statewide. Judge Lippman has been hinting at making significant changes in court leadership since Feb. 11, the day he was confirmed by the state Senate. Yesterday's announcements also represented his first significant break with operations of the courts as they developed during former Chief Judge Judith S. Kaye's 15-plus years as chief judge. Judge Lippman served for 12 of those years as chief administrative judge and, as he acknowledged yesterday, was in part responsible for developing the structure of the five deputy chief administrators at the top of the court system. Judge Lippman called Ms. Kaye "the greatest chief judge in the history of this state," but said it is time for changes. He said the grim state of New York's finances and of the state and national economies are in large part dictating the streamlining of the court leadership's flow chart.
"As chief judge, in my own right, just as Judge Kaye addressed the challenges that confronted her during her 15-year tenure, I think there are new challenges facing this state," Judge Lippman said yesterday in an interview. "Two that hit you square in the face - one is this judicial salary debacle that must be addressed and the other is a fiscal crisis of epic proportions facing this state and this country. That is the framework for the challenges that I am going to confront in the years ahead." He said the changes are designed to create a "clean, straight line from administration to the trial courts." "The idea is to put the focus on court operations, on the trial courts, and to streamline the administrative structure to allow that priority of the court system to shine through," Judge Lippman said. While he had no estimate of savings to the court system, he said the shift would ultimately free up resources that could be directed to the trial-level courts.
Judge Lippman said other changes are coming. The state courts' 56 administrative and supervising judges will be re-evaluated and bureaucratic changes at the Office of Court Administration are also under review. The courts have increasingly drawn criticism from within the Legislature in recent years, especially from the former chairman of the Senate Judiciary Committee, John DeFrancisco, R-Syracuse, for being top-heavy administratively and bureaucratically. Judge Lippman acknowledged the criticism and said the administrative structure grew because changes in the court system demanded administrators with new "portfolios" to respond to new stresses on the courts. The changes announced yesterday were made in consultation with the four presiding justices of the Appellate Division and went into effect immediately. Judge Lippman said that having a "leaner" administrative structure will not inhibit the courts' efforts to address the judicial pay raise controversy or respond to other challenges facing the courts, including the possibility of drug law reform, shortages of funding for indigent legal services in civil and criminal courts and the continuing need to improve town and village courts. Joel.Stashenko@incisivemedia.com
NY BigLaw Firm Lays Off 25 Attorneys
NY BigLaw Firm Lays Off 25 Attorneys
The National Law Journal by Leigh Jones - March 11, 2009
New York-based Chadbourne & Parke let go of 25 attorneys on Tuesday, according to a spokesman for the law firm. The cuts were made because of the economic downturn and will affect associates and counsel handling transactional work in its U.S. and overseas offices, according to Andrew Blum, media relations manager at the firm. In addition, the law firm will delay the start date for its first-year associates until January. It will pay those people a $13,000 "bar and expense" stipend, the spokesman said. The reductions will not affect Chadbourne & Parke's summer associate class, he said, adding that the firm does not expect additional layoffs. The spokesman declined to disclose the details of severance packages. In October, Chadbourne & Parke implemented a hiring freeze, as reported on the legal blog Above the Law. Before the layoffs, Chadbourne & Parke had about 480 attorneys in 13 offices, according to The NLJ 250, The National Law Journal¹s annual survey of the nation¹s largest law firms. Mr. Blum told Law Journal affiliate Legal Times that the layoffs were "an economic decision due to the recession." He says the associates who were affected were primarily in the firm's transactional practices. Blum says the affected lawyers who were in the office today have already been informed. He would not confirm whether anyone was laid off in the firm's Washington office, which has over 50 lawyers. The firm will be offering severance packages to those affected, but Blum says "the individual separation pay arrangements will not be disclosed." Additional reporting for this story was provided by Jeff Jeffrey, a reporter with Legal Times, a Law Journal affiliate based in Washington.
The National Law Journal by Leigh Jones - March 11, 2009
New York-based Chadbourne & Parke let go of 25 attorneys on Tuesday, according to a spokesman for the law firm. The cuts were made because of the economic downturn and will affect associates and counsel handling transactional work in its U.S. and overseas offices, according to Andrew Blum, media relations manager at the firm. In addition, the law firm will delay the start date for its first-year associates until January. It will pay those people a $13,000 "bar and expense" stipend, the spokesman said. The reductions will not affect Chadbourne & Parke's summer associate class, he said, adding that the firm does not expect additional layoffs. The spokesman declined to disclose the details of severance packages. In October, Chadbourne & Parke implemented a hiring freeze, as reported on the legal blog Above the Law. Before the layoffs, Chadbourne & Parke had about 480 attorneys in 13 offices, according to The NLJ 250, The National Law Journal¹s annual survey of the nation¹s largest law firms. Mr. Blum told Law Journal affiliate Legal Times that the layoffs were "an economic decision due to the recession." He says the associates who were affected were primarily in the firm's transactional practices. Blum says the affected lawyers who were in the office today have already been informed. He would not confirm whether anyone was laid off in the firm's Washington office, which has over 50 lawyers. The firm will be offering severance packages to those affected, but Blum says "the individual separation pay arrangements will not be disclosed." Additional reporting for this story was provided by Jeff Jeffrey, a reporter with Legal Times, a Law Journal affiliate based in Washington.
Wednesday, March 11, 2009
'Officer of Court' Admits to Bribery
Local Attorney Bribed Government Official
The Connecticut Law Tribune by Douglas S. Malan - March 11, 2009
Meriden attorney Sebastian S. Ciarcia has pleaded guilty to one count of bribing a government employee to obtain contracts for construction companies he managed. Ciarcia, 56, also pleaded guilty before Judge Donna F. Martinez in federal court in Hartford of one count of aiding and assisting in the preparation of a false tax return for the construction companies’ principal owner. Ciarcia, who had no prior disciplinary record, is a solo practitioner who has handled personal injury, real estate and family law cases. For a time, he also managed Escarnio Construction LLC of Meriden and Fischer Supply LLC of Wallingford. Both companies are now dissolved, according to state records.
From 2002 to 2005, Ciarcia bribed Kevin Malarney, a West Haven-based supervisor for the U.S. Department of Veterans Affairs, to steer VA contracts for services and supplies for the two businesses, according to the U.S. Attorney's office in Connecticut. Malarney, 56, was a construction and maintenance supervisor at the VA facility in West Haven. He pleaded guilty in June 2007 to one count each of bribery and filing a false income tax return. He awaits sentencing. Ciarcia's companies agreed to pay Malarney's mortgage, automobile loan, student loans, insurance policy premiums and credit card bills. They also paid for Malarney’s trips to St. Maarten and New York. The estimated value of the bribes: $45,600. In return, Malarney assisted in awarding 27 VA contracts worth approximately $303,000 to Ciarcia’s companies. Malarney also helped direct 48 payments totaling about $81,000 to Fischer Supply for services and supplies. When he is sentenced in May, Ciarcia, an Avon resident, faces up to 15 years in prison and a fine of up to $250,000 on the bribery charge. The false tax return charge carries maximum penalties of three years in prison and a $100,000 fine.
The Connecticut Law Tribune by Douglas S. Malan - March 11, 2009
Meriden attorney Sebastian S. Ciarcia has pleaded guilty to one count of bribing a government employee to obtain contracts for construction companies he managed. Ciarcia, 56, also pleaded guilty before Judge Donna F. Martinez in federal court in Hartford of one count of aiding and assisting in the preparation of a false tax return for the construction companies’ principal owner. Ciarcia, who had no prior disciplinary record, is a solo practitioner who has handled personal injury, real estate and family law cases. For a time, he also managed Escarnio Construction LLC of Meriden and Fischer Supply LLC of Wallingford. Both companies are now dissolved, according to state records.
From 2002 to 2005, Ciarcia bribed Kevin Malarney, a West Haven-based supervisor for the U.S. Department of Veterans Affairs, to steer VA contracts for services and supplies for the two businesses, according to the U.S. Attorney's office in Connecticut. Malarney, 56, was a construction and maintenance supervisor at the VA facility in West Haven. He pleaded guilty in June 2007 to one count each of bribery and filing a false income tax return. He awaits sentencing. Ciarcia's companies agreed to pay Malarney's mortgage, automobile loan, student loans, insurance policy premiums and credit card bills. They also paid for Malarney’s trips to St. Maarten and New York. The estimated value of the bribes: $45,600. In return, Malarney assisted in awarding 27 VA contracts worth approximately $303,000 to Ciarcia’s companies. Malarney also helped direct 48 payments totaling about $81,000 to Fischer Supply for services and supplies. When he is sentenced in May, Ciarcia, an Avon resident, faces up to 15 years in prison and a fine of up to $250,000 on the bribery charge. The false tax return charge carries maximum penalties of three years in prison and a $100,000 fine.
BigLaw Firm Ponies Up $10 Million to Settle Malpractice Suit
BigLaw Firm Ponies Up $10 Million to Settle Malpractice Suit
The San Francisco Recorder by Amanda Royal - March 11, 2009
SAN FRANCISCO, CA - Pillsbury Winthrop Shaw Pittman has reached a $10 million settlement in a malpractice dispute with bankrupt client SonicBlue, a court filing Tuesday shows. The firm will pay $7.6 million and forgo $2.4 million in outstanding fees to SonicBlue's estate, according to the filing, which awaits approval by a bankruptcy judge at a hearing slated for March 31. SonicBlue's estate had sued Pillsbury for malpractice and breach of fiduciary duty, demanding the firm return $4.2 million in fees and pay $11 million in damages. "The creditors committee is pleased with the terms of the settlement," said Ron Oliner, a partner at Duane Morris who represents the creditors committee in the bankruptcy.
Pillsbury General Counsel Ronald Van Buskirk declined to comment beyond pointing at language in the settlement saying the deal had been reached to the parties' mutual satisfaction. Pillsbury represented the SonicBlue estate from the filing of its bankruptcy petition in 2003 until 2007 when it came to light that the firm had failed to disclose to the court a 2002 pre-bankruptcy promise to creditors. The firm promised in a letter to three hedge funds, which had invested in a $75 million bond issue, that they would be repaid in full should SonicBlue enter bankruptcy protection. Pillsbury attorneys later described the letter as a "scrivener's error." The hedge funds threatened to sue for repayment in September 2006. In a 2005 internal e-mail sent by Pillsbury partner William Freeman about the retainer SonicBlue had paid, he told partner Craig Barbarosh that the firm had "major exposure here." Citing the potential conflicts, the bankruptcy judge removed Pillsbury from the case in March 2007. In early 2008, the bankruptcy trustee, Dennis Connolly of Alston & Bird, sued Pillsbury over the undisclosed promise, as well as a failure to disclose that it had received payments from SonicBlue within 90 days of the bankruptcy filing. Any firm that participates in a bankruptcy must disclose such "preference payments" because they can represent a conflict of interest and sometimes must be returned to distribute to other creditors.
The settlement comes as a result of mediation in February between the parties, which was ordered by Judge Marilyn Morgan of the U.S. Bankruptcy Court for the Northern District of California in San Jose. She denied Pillsbury a jury trial in November, and had set a bench trial for this fall in the event mediation failed. Howard, Rice, Nemerovski, Canady, Falk & Rabkin litigation chairman Bernard Burk, who represents Pillsbury, referred comment to Pillsbury's Van Buskirk. Another firm involved in SonicBlue's bankruptcy, Levene, Neale, Bender, Rankin & Brill, settled for $2.5 million in November, and forfeited $2.2 million in fees it was owed. The firm, which was accused of failing to disclose preference payments, did not have to pay back $1.2 million in fees it had already collected. The court-appointed trustee, Connolly of Alston & Bird, is out of the office for the week and could not be reached for comment. The SonicBlue estate paid out about $75 million to creditors last fall after a liquidation plan was approved.
The San Francisco Recorder by Amanda Royal - March 11, 2009
SAN FRANCISCO, CA - Pillsbury Winthrop Shaw Pittman has reached a $10 million settlement in a malpractice dispute with bankrupt client SonicBlue, a court filing Tuesday shows. The firm will pay $7.6 million and forgo $2.4 million in outstanding fees to SonicBlue's estate, according to the filing, which awaits approval by a bankruptcy judge at a hearing slated for March 31. SonicBlue's estate had sued Pillsbury for malpractice and breach of fiduciary duty, demanding the firm return $4.2 million in fees and pay $11 million in damages. "The creditors committee is pleased with the terms of the settlement," said Ron Oliner, a partner at Duane Morris who represents the creditors committee in the bankruptcy.
Pillsbury General Counsel Ronald Van Buskirk declined to comment beyond pointing at language in the settlement saying the deal had been reached to the parties' mutual satisfaction. Pillsbury represented the SonicBlue estate from the filing of its bankruptcy petition in 2003 until 2007 when it came to light that the firm had failed to disclose to the court a 2002 pre-bankruptcy promise to creditors. The firm promised in a letter to three hedge funds, which had invested in a $75 million bond issue, that they would be repaid in full should SonicBlue enter bankruptcy protection. Pillsbury attorneys later described the letter as a "scrivener's error." The hedge funds threatened to sue for repayment in September 2006. In a 2005 internal e-mail sent by Pillsbury partner William Freeman about the retainer SonicBlue had paid, he told partner Craig Barbarosh that the firm had "major exposure here." Citing the potential conflicts, the bankruptcy judge removed Pillsbury from the case in March 2007. In early 2008, the bankruptcy trustee, Dennis Connolly of Alston & Bird, sued Pillsbury over the undisclosed promise, as well as a failure to disclose that it had received payments from SonicBlue within 90 days of the bankruptcy filing. Any firm that participates in a bankruptcy must disclose such "preference payments" because they can represent a conflict of interest and sometimes must be returned to distribute to other creditors.
The settlement comes as a result of mediation in February between the parties, which was ordered by Judge Marilyn Morgan of the U.S. Bankruptcy Court for the Northern District of California in San Jose. She denied Pillsbury a jury trial in November, and had set a bench trial for this fall in the event mediation failed. Howard, Rice, Nemerovski, Canady, Falk & Rabkin litigation chairman Bernard Burk, who represents Pillsbury, referred comment to Pillsbury's Van Buskirk. Another firm involved in SonicBlue's bankruptcy, Levene, Neale, Bender, Rankin & Brill, settled for $2.5 million in November, and forfeited $2.2 million in fees it was owed. The firm, which was accused of failing to disclose preference payments, did not have to pay back $1.2 million in fees it had already collected. The court-appointed trustee, Connolly of Alston & Bird, is out of the office for the week and could not be reached for comment. The SonicBlue estate paid out about $75 million to creditors last fall after a liquidation plan was approved.
Tuesday, March 10, 2009
MADOFF CHARGED IN ELEVEN-COUNT CRIMINAL INFORMATION
United States Attorney Southern District of New York
FOR IMMEDIATE RELEASE MARCH 10, 2009
CONTACT: U.S. ATTORNEY'S OFFICE - YUSILL SCRIBNER, REBEKAH CARMICHAEL, JANICE OH
PUBLIC INFORMATION OFFICE - (212) 637-2600
FBI - JIM MARGOLIN, MONICA McLEAN - PUBLIC INFORMATION OFFICE - (212) 384-2720, 2715
DOL-EBSA - GLORIA DELLA - PUBLIC INFORMATION OFFICE - (202) 693-8666
BERNARD L. MADOFF CHARGED IN ELEVEN-COUNT CRIMINAL INFORMATION
LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), and ALAN D. LEBOWITZ, the Deputy Assistant Secretary of the United States Department of Labor, Employee Benefits Security Administration ("DOL-EBSA"), announced the filing today of a Criminal Information in Manhattan federal court charging BERNARD L. MADOFF with eleven felony charges including securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission ("SEC"), and theft from an employee benefit plan. There is no plea agreement between the government and the defendant. If found guilty of all counts, MADOFF, 70, faces a statutory maximum sentence of 150 years' incarceration. MADOFF is also subject to mandatory restitution and faces fines up to twice the gross gain or loss derived from the offense. The Criminal Information filed today also includes forfeiture allegations which would require MADOFF to forfeit the proceeds of the charged crimes, as well as all property involved in the money laundering offenses and all property traceable to such property. The statutory maximum sentences for each of the charged offenses are set forth in an attached chart.
Specifically, the Criminal Information alleges that:
BERNARD L. MADOFF is the founder, and served as the sole member and principal, of Bernard L. Madoff Investment Securities LLC, and its predecessor, Bernard L. Madoff Investment Securities, (collectively and separately, "BLMIS"). BLMIS was a broker-dealer, with its principal place of business in New York City, which engaged in three principal types of business: market making; proprietary trading; and investment advisory services. Madoff Securities International Ltd. ("MSIL") was an affiliate of BLMIS incorporated in the United Kingdom, which engaged principally in proprietary trading. MADOFF owned the majority of the voting shares of MSIL, and served as the Chairman of MSIL's Board of Directors. From at least the 1980s until his arrest on December 11, 2008, MADOFF perpetrated a scheme to defraud the clients of BLMIS by soliciting billions of dollars of funds under false pretenses, failing to invest investors' funds as promised, and misappropriating and converting investors' funds to MADOFF's own benefit and the benefit of others without the knowledge or authorization of the investors.
To execute the scheme, MADOFF solicited and caused others to solicit prospective clients to open trading accounts with BLMIS, based upon his promise to use investor funds to purchase shares of common stock, options, and other securities of large, well-known corporations, and representations that he would achieve high rates of return for clients, with limited risk. However, as MADOFF well knew, these representations were false. MADOFF failed to invest the BLMIS investment advisory clients' funds in securities as he had promised. Instead, notwithstanding representations that MADOFF made and caused to be made on tens of thousands of account statements and other documents sent to BLMIS clients throughout the operation of the scheme, MADOFF operated a massive Ponzi scheme in which client funds were misappropriated and converted to the use of MADOFF, BLMIS, and others. In connection with the Ponzi scheme, MADOFF accepted billions of dollars of investor money—cumulatively, from individual investors, charitable organizations, trusts, pension funds, and hedge funds, among others—and established on their behalf thousands of accounts at BLMIS.
Among the false representations he made to clients and prospective clients about his investment strategies, MADOFF marketed an investment strategy referred to as a "split strike conversion" strategy. Clients were promised that BLMIS would invest their funds in a basket of approximately 35-50 common stocks within the Standard & Poor's 100 Index (the "S&P 100"), a collection of the 100 largest publicly traded companies in terms of their market capitalization. MADOFF claimed that he would select a basket of stocks that would closely mimic the price movements of the S&P 100. MADOFF further claimed that he would opportunistically time those purchases, and would be "out of the market" intermittently, investing clients' funds in these periods in United States Government-issued securities such as United States Treasury bills. MADOFF also claimed that he would hedge the investments that he made in the basket of common stocks by using investor funds to buy and sell option contracts related to those stocks, thereby limiting potential losses caused by unpredictable changes in stock prices. Further, to induce new and continued investments by clients and prospective clients, MADOFF promised certain clients annual returns in varying amounts of up to approximately 46 percent per year. MADOFF also told certain clients that the fee for his services would be based on an approximately $0.04 per share commission on the stocks that MADOFF traded for such clients. Contrary to promises that he would use investor funds to purchase securities on their behalf and invest client funds pursuant to the strategies he had marketed, MADOFF used most of the investors' funds to meet the periodic redemption requests of other investors. In addition, MADOFF took some of these clients' investment funds as "commissions," which he used to support the market making and proprietary trading businesses of BLMIS, and from which he and others received millions of dollars in benefits.
MADOFF created and caused to be created a broad infrastructure at BLMIS to generate the impression and support the appearance that BLMIS was operating a legitimate investment advisory business in which client funds were actively traded as he had promised, and to conceal the fact that no such business was actually being conducted. Among other things, MADOFF hired numerous employees—many of whom had little or no prior pertinent training or experience in the securities industry—to serve as a "back office" for this investment advisory business. MADOFF directed those BLMIS employees to communicate with clients and generate false and fraudulent documents, including monthly client account statements and trade confirmations purporting to reflect the purchases and sales of securities which MADOFF claimed were conducted on behalf of BLMIS's clients. Furthermore, account statements and trade confirmations sent to clients reflected fictitious returns consistent with the returns that had previously been promised to them. Moreover, to support BLMIS's market making and proprietary trading businesses, between at least 2002 and about 2008, MADOFF caused more than $250 million of BLMIS investment advisory clients' funds to be directed, through a series of wire transfers, to the operating accounts that funded the operations of these businesses. Specifically, MADOFF caused those investor funds to be sent from a BLMIS account in New York City (the "BLMIS Client Account") to accounts held by BLMIS-affiliate MSIL in London, United Kingdom (the "MSIL Accounts"). He then further caused funds to be transferred from the MSIL Accounts to either the BLMIS Client Account or to another bank account in New York City, which was principally used to fund BLMIS's operations.
MADOFF directed these funds transfers, in part, to give the appearance that he was conducting securities transactions in Europe on behalf of the investors when, in fact, he was not. MADOFF also directed the transfer of funds from the MSIL Accounts to purchase and maintain property and services for the personal use and benefit of MADOFF, his family members, and associates. To conceal his scheme, MADOFF, among other things, withheld information from regulators and repeatedly lied to the SEC in written submissions and in sworn testimony. In furtherance of the scheme, MADOFF caused fraudulent certified financial statements for BLMIS, including balance sheets, statements of income, statements of cash flows, and reports on internal control, to be created. MADOFF further caused such fraudulent financial statements to be sent to clients and prospective clients and to be filed with the SEC. MADOFF knew that the certification attached to the BLMIS financial statements falsely averred that those statements had been prepared in accordance with Generally Accepted Auditing Standards and Generally Accepted Accounting Principles.
As of November 30, 2008, BLMIS had approximately 4,800 client accounts. On December 1, 2008, BLMIS issued account statements for the calendar month of November 2008 reporting that those client accounts held a total balance of approximately $64.8 billion. In fact, BLMIS held only a small fraction of that balance on behalf of its clients. MADOFF is expected to appear at a plea proceeding on March 12, 2009, at 10:00 a.m. before United States District Judge DENNY CHIN in Manhattan federal court. Pursuant to an order issued by Judge CHIN on March 6, 2009, any individual who wishes to be heard during that proceeding must send notice via e-mail to the U.S. Attorney's Office for the Southern District of New York at usanys.madoff@usdoj.gov by 10:00 a.m. on March 11, 2009. Mr. DASSIN praised the investigative work of the FBI and the DOL-EBSA. Mr. DASSIN also thanked the SEC for its assistance.
"The charges reflect an extraordinary array of crimes committed by Bernard Madoff for over twenty years. While the alleged crimes are not novel, the size and scope of Mr. Madoff's fraud are unprecedented. As a result, Mr. Madoff faces one hundred fifty years in prison, mandatory restitution to the victims of his crimes, forfeiture of his ill-gotten gains, and criminal fines. The government has not entered into any agreement with Mr. Madoff about his plea or sentencing," said Acting United States Attorney LEV L. DASSIN. "The filing of these charges does not end the matter. Our investigation is continuing." Assistant United States Attorneys MARC LITT, LISA A. BARONI, WILLIAM J. STELLMACH, BARBARA A. WARD, and SHARON FRASE, are in charge of the prosecution. The charges and allegations contained in the Criminal Information are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
09-054 ###
STATUTORY MAXIMUM SENTENCES
United States v. Bernard L. Madoff
Count - Charge - Maximum Penalties
FOR IMMEDIATE RELEASE MARCH 10, 2009
CONTACT: U.S. ATTORNEY'S OFFICE - YUSILL SCRIBNER, REBEKAH CARMICHAEL, JANICE OH
PUBLIC INFORMATION OFFICE - (212) 637-2600
FBI - JIM MARGOLIN, MONICA McLEAN - PUBLIC INFORMATION OFFICE - (212) 384-2720, 2715
DOL-EBSA - GLORIA DELLA - PUBLIC INFORMATION OFFICE - (202) 693-8666
BERNARD L. MADOFF CHARGED IN ELEVEN-COUNT CRIMINAL INFORMATION
LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), and ALAN D. LEBOWITZ, the Deputy Assistant Secretary of the United States Department of Labor, Employee Benefits Security Administration ("DOL-EBSA"), announced the filing today of a Criminal Information in Manhattan federal court charging BERNARD L. MADOFF with eleven felony charges including securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission ("SEC"), and theft from an employee benefit plan. There is no plea agreement between the government and the defendant. If found guilty of all counts, MADOFF, 70, faces a statutory maximum sentence of 150 years' incarceration. MADOFF is also subject to mandatory restitution and faces fines up to twice the gross gain or loss derived from the offense. The Criminal Information filed today also includes forfeiture allegations which would require MADOFF to forfeit the proceeds of the charged crimes, as well as all property involved in the money laundering offenses and all property traceable to such property. The statutory maximum sentences for each of the charged offenses are set forth in an attached chart.
Specifically, the Criminal Information alleges that:
BERNARD L. MADOFF is the founder, and served as the sole member and principal, of Bernard L. Madoff Investment Securities LLC, and its predecessor, Bernard L. Madoff Investment Securities, (collectively and separately, "BLMIS"). BLMIS was a broker-dealer, with its principal place of business in New York City, which engaged in three principal types of business: market making; proprietary trading; and investment advisory services. Madoff Securities International Ltd. ("MSIL") was an affiliate of BLMIS incorporated in the United Kingdom, which engaged principally in proprietary trading. MADOFF owned the majority of the voting shares of MSIL, and served as the Chairman of MSIL's Board of Directors. From at least the 1980s until his arrest on December 11, 2008, MADOFF perpetrated a scheme to defraud the clients of BLMIS by soliciting billions of dollars of funds under false pretenses, failing to invest investors' funds as promised, and misappropriating and converting investors' funds to MADOFF's own benefit and the benefit of others without the knowledge or authorization of the investors.
To execute the scheme, MADOFF solicited and caused others to solicit prospective clients to open trading accounts with BLMIS, based upon his promise to use investor funds to purchase shares of common stock, options, and other securities of large, well-known corporations, and representations that he would achieve high rates of return for clients, with limited risk. However, as MADOFF well knew, these representations were false. MADOFF failed to invest the BLMIS investment advisory clients' funds in securities as he had promised. Instead, notwithstanding representations that MADOFF made and caused to be made on tens of thousands of account statements and other documents sent to BLMIS clients throughout the operation of the scheme, MADOFF operated a massive Ponzi scheme in which client funds were misappropriated and converted to the use of MADOFF, BLMIS, and others. In connection with the Ponzi scheme, MADOFF accepted billions of dollars of investor money—cumulatively, from individual investors, charitable organizations, trusts, pension funds, and hedge funds, among others—and established on their behalf thousands of accounts at BLMIS.
Among the false representations he made to clients and prospective clients about his investment strategies, MADOFF marketed an investment strategy referred to as a "split strike conversion" strategy. Clients were promised that BLMIS would invest their funds in a basket of approximately 35-50 common stocks within the Standard & Poor's 100 Index (the "S&P 100"), a collection of the 100 largest publicly traded companies in terms of their market capitalization. MADOFF claimed that he would select a basket of stocks that would closely mimic the price movements of the S&P 100. MADOFF further claimed that he would opportunistically time those purchases, and would be "out of the market" intermittently, investing clients' funds in these periods in United States Government-issued securities such as United States Treasury bills. MADOFF also claimed that he would hedge the investments that he made in the basket of common stocks by using investor funds to buy and sell option contracts related to those stocks, thereby limiting potential losses caused by unpredictable changes in stock prices. Further, to induce new and continued investments by clients and prospective clients, MADOFF promised certain clients annual returns in varying amounts of up to approximately 46 percent per year. MADOFF also told certain clients that the fee for his services would be based on an approximately $0.04 per share commission on the stocks that MADOFF traded for such clients. Contrary to promises that he would use investor funds to purchase securities on their behalf and invest client funds pursuant to the strategies he had marketed, MADOFF used most of the investors' funds to meet the periodic redemption requests of other investors. In addition, MADOFF took some of these clients' investment funds as "commissions," which he used to support the market making and proprietary trading businesses of BLMIS, and from which he and others received millions of dollars in benefits.
MADOFF created and caused to be created a broad infrastructure at BLMIS to generate the impression and support the appearance that BLMIS was operating a legitimate investment advisory business in which client funds were actively traded as he had promised, and to conceal the fact that no such business was actually being conducted. Among other things, MADOFF hired numerous employees—many of whom had little or no prior pertinent training or experience in the securities industry—to serve as a "back office" for this investment advisory business. MADOFF directed those BLMIS employees to communicate with clients and generate false and fraudulent documents, including monthly client account statements and trade confirmations purporting to reflect the purchases and sales of securities which MADOFF claimed were conducted on behalf of BLMIS's clients. Furthermore, account statements and trade confirmations sent to clients reflected fictitious returns consistent with the returns that had previously been promised to them. Moreover, to support BLMIS's market making and proprietary trading businesses, between at least 2002 and about 2008, MADOFF caused more than $250 million of BLMIS investment advisory clients' funds to be directed, through a series of wire transfers, to the operating accounts that funded the operations of these businesses. Specifically, MADOFF caused those investor funds to be sent from a BLMIS account in New York City (the "BLMIS Client Account") to accounts held by BLMIS-affiliate MSIL in London, United Kingdom (the "MSIL Accounts"). He then further caused funds to be transferred from the MSIL Accounts to either the BLMIS Client Account or to another bank account in New York City, which was principally used to fund BLMIS's operations.
MADOFF directed these funds transfers, in part, to give the appearance that he was conducting securities transactions in Europe on behalf of the investors when, in fact, he was not. MADOFF also directed the transfer of funds from the MSIL Accounts to purchase and maintain property and services for the personal use and benefit of MADOFF, his family members, and associates. To conceal his scheme, MADOFF, among other things, withheld information from regulators and repeatedly lied to the SEC in written submissions and in sworn testimony. In furtherance of the scheme, MADOFF caused fraudulent certified financial statements for BLMIS, including balance sheets, statements of income, statements of cash flows, and reports on internal control, to be created. MADOFF further caused such fraudulent financial statements to be sent to clients and prospective clients and to be filed with the SEC. MADOFF knew that the certification attached to the BLMIS financial statements falsely averred that those statements had been prepared in accordance with Generally Accepted Auditing Standards and Generally Accepted Accounting Principles.
As of November 30, 2008, BLMIS had approximately 4,800 client accounts. On December 1, 2008, BLMIS issued account statements for the calendar month of November 2008 reporting that those client accounts held a total balance of approximately $64.8 billion. In fact, BLMIS held only a small fraction of that balance on behalf of its clients. MADOFF is expected to appear at a plea proceeding on March 12, 2009, at 10:00 a.m. before United States District Judge DENNY CHIN in Manhattan federal court. Pursuant to an order issued by Judge CHIN on March 6, 2009, any individual who wishes to be heard during that proceeding must send notice via e-mail to the U.S. Attorney's Office for the Southern District of New York at usanys.madoff@usdoj.gov by 10:00 a.m. on March 11, 2009. Mr. DASSIN praised the investigative work of the FBI and the DOL-EBSA. Mr. DASSIN also thanked the SEC for its assistance.
"The charges reflect an extraordinary array of crimes committed by Bernard Madoff for over twenty years. While the alleged crimes are not novel, the size and scope of Mr. Madoff's fraud are unprecedented. As a result, Mr. Madoff faces one hundred fifty years in prison, mandatory restitution to the victims of his crimes, forfeiture of his ill-gotten gains, and criminal fines. The government has not entered into any agreement with Mr. Madoff about his plea or sentencing," said Acting United States Attorney LEV L. DASSIN. "The filing of these charges does not end the matter. Our investigation is continuing." Assistant United States Attorneys MARC LITT, LISA A. BARONI, WILLIAM J. STELLMACH, BARBARA A. WARD, and SHARON FRASE, are in charge of the prosecution. The charges and allegations contained in the Criminal Information are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
09-054 ###
STATUTORY MAXIMUM SENTENCES
United States v. Bernard L. Madoff
Count - Charge - Maximum Penalties
- ONE - Securities Fraud - 20 years in prison; 3 years' supervised release; fine of the greatest of $5 million or twice the gross gain or loss from the offense; and restitution
- TWO - Investment Adviser Fraud - 5 years in prison; 3 years' supervised release; fine of the greatest of $10,000 or twice the gross gain or loss from the offense; and restitution.
- THREE - Mail Fraud - 20 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution.
- FOUR - Wire Fraud - 20 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution.
- FIVE - International Money Laundering to Promote Specified Unlawful Activity - 20 years in prison; 3 years' supervised release; fine of the greatest of $500,000 or twice the value of the monetary instruments or funds involved, or twice the gross gain or loss from the offense; and restitution.
- SIX - International Money Laundering to Conceal and Disguise the Proceeds of Specified Unlawful Activity - 20 years in prison; 3 years' supervised release; fine of the greatest of $500,000 or twice the value of the monetary instruments or funds involved, or twice the gross gain or loss from the offense; and restitution
- SEVEN - Money Laundering - 10 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution.
- EIGHT - False Statements - 5 years in prison; 3 years' supervised release; fine of the greatest of $250,000 or twice the gross gain or loss from the offense; and restitution.
- NINE - Perjury - 5 years in prison; 3 years' supervised release; fine of the greatest of $250,000, or twice the gross gain or loss from the offense; and restitution.
- TEN - Making a False Filing with the SEC - 20 years in prison; 3 years' supervised release; fine of the greatest of $5,000,000 or twice the gross gain or loss from the offense; and restitution.
- ELEVEN - Theft from an Employee Benefit Plan - 5 years in prison; 3 years' supervised release; fine of the greatest of $250,000, or twice the gross gain or loss from the offense; and restitution.
Madoff to Plead Guilty in Largest U.S. Ponzi Schem
Madoff to Plead Guilty in Largest U.S. Ponzi Scheme
Bloomberg News by David Glovin, Erik Larson and David Voreacos - March 10, 2009
March 10 (Bloomberg) -- Bernard Madoff will plead guilty in two days to fraud charges related to the largest Ponzi scheme in U.S. history, his lawyer Ira Sorkin said in a court hearing. Madoff, 70, will admit on March 12 that he directed the fraud, his lawyer said. Prosecutors said today in Manhattan federal court that it totaled as much as $64.8 billion. The government will seek forfeiture from Madoff of as much as $170 billion. Madoff, free on $10 million bail, faces 150 years in prison. The guilty plea had been expected since March 6, when Sorkin said his client would agree to be prosecuted without a grand jury indictment. Sorkin said Madoff would plead guilty during a hearing today on whether the lawyer faced a conflict of interest. “There is no plea agreement,” Assistant U.S. Attorney Marc Litt said at the hearing, meaning Madoff must plead guilty to 11 counts that he now faces in a criminal information filed today. Madoff is charged with securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan, Litt said.
Two Issues
U.S. District Judge Denny Chin said at today’s proceeding that there will be only two issues at the March 12 hearing -- whether he will accept the guilty plea and whether Madoff will be sent to jail that day. Chin said victims who wish to speak about the jail term Madoff receives will have to wait until sentencing. Madoff promised investors returns of as much as 46 percent, prosecutors said. He “repeatedly lied to the SEC” and sent documents showing fictitious returns, they said. Madoff had about 4,800 client accounts as of Nov. 30, prosecutors said. Madoff was arrested on Dec. 11 and charged with fraud for using billions of dollars from new investors to pay off old ones. The day before, he told relatives that his business was “one big lie,” prosecutors said in court papers. Thousands of investors with Madoff’s New York-based firm, Bernard L. Madoff Investment Securities LLC, have reported about $43 billion in losses, according to Bloomberg’s tally of disclosures, news reports, and court filings. The alleged Ponzi scheme may have cost investors $50 billion, Madoff said before his arrest, according to court papers.
Wife’s Lawyer
Sorkin and Madoff appeared in court today with another lawyer, Peter Chavkin. Chavkin said he may be a “potential counsel” for Madoff’s wife, Ruth, in future related litigation. Madoff’s years-long scheme unraveled in early December amid a rush of investor redemptions. On Dec. 9, he told his son Mark, 42, who ran Madoff’s proprietary trading business, and Andrew, 40, who was a director of that unit, that he wanted to pay bonuses two months earlier than usual, according to the FBI complaint and to the sons’ lawyer, Martin Flumenbaum. Neither is accused of wrongdoing. The conflict of interest involved an investment that Sorkin’s now-deceased father had with Madoff. Also, in 1992 Sorkin represented a Florida investment firm, Avellino & Bienes, that invested with Madoff.
Father’s Investment
The investment by Sorkin’s father came to light last month with the filing of a list of Madoff clients in federal court. The elder Sorkin opened an individual retirement account that he left to the attorney’s mother in 2001, Sorkin said. When Sorkin’s mother died in 2007, the IRA was cashed out. Madoff’s alleged Ponzi scheme, which would be the largest in history, went back at least to the 1980s, prosecutors said. Sorkin represented Fort Lauderdale-based Avellino & Bienes in 1992 after it was sued by the SEC. The unregistered firm invested more than $441 million in client money with Madoff, according to court papers. The firm agreed to close the business and refund the money, the regulator said. Michael Bienes told the Sun Sentinel of Fort Lauderdale, Florida on March 8 that he lost millions of dollars and was wiped out after investing with Madoff. The criminal case is U.S. v. Madoff, 08-mj-2735, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net; David Voreacos in New York federal court at dvoreacos@bloomberg.net; Erik Larson in New York federal court at elarson4@bloomberg.net.
Bloomberg News by David Glovin, Erik Larson and David Voreacos - March 10, 2009
March 10 (Bloomberg) -- Bernard Madoff will plead guilty in two days to fraud charges related to the largest Ponzi scheme in U.S. history, his lawyer Ira Sorkin said in a court hearing. Madoff, 70, will admit on March 12 that he directed the fraud, his lawyer said. Prosecutors said today in Manhattan federal court that it totaled as much as $64.8 billion. The government will seek forfeiture from Madoff of as much as $170 billion. Madoff, free on $10 million bail, faces 150 years in prison. The guilty plea had been expected since March 6, when Sorkin said his client would agree to be prosecuted without a grand jury indictment. Sorkin said Madoff would plead guilty during a hearing today on whether the lawyer faced a conflict of interest. “There is no plea agreement,” Assistant U.S. Attorney Marc Litt said at the hearing, meaning Madoff must plead guilty to 11 counts that he now faces in a criminal information filed today. Madoff is charged with securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan, Litt said.
Two Issues
U.S. District Judge Denny Chin said at today’s proceeding that there will be only two issues at the March 12 hearing -- whether he will accept the guilty plea and whether Madoff will be sent to jail that day. Chin said victims who wish to speak about the jail term Madoff receives will have to wait until sentencing. Madoff promised investors returns of as much as 46 percent, prosecutors said. He “repeatedly lied to the SEC” and sent documents showing fictitious returns, they said. Madoff had about 4,800 client accounts as of Nov. 30, prosecutors said. Madoff was arrested on Dec. 11 and charged with fraud for using billions of dollars from new investors to pay off old ones. The day before, he told relatives that his business was “one big lie,” prosecutors said in court papers. Thousands of investors with Madoff’s New York-based firm, Bernard L. Madoff Investment Securities LLC, have reported about $43 billion in losses, according to Bloomberg’s tally of disclosures, news reports, and court filings. The alleged Ponzi scheme may have cost investors $50 billion, Madoff said before his arrest, according to court papers.
Wife’s Lawyer
Sorkin and Madoff appeared in court today with another lawyer, Peter Chavkin. Chavkin said he may be a “potential counsel” for Madoff’s wife, Ruth, in future related litigation. Madoff’s years-long scheme unraveled in early December amid a rush of investor redemptions. On Dec. 9, he told his son Mark, 42, who ran Madoff’s proprietary trading business, and Andrew, 40, who was a director of that unit, that he wanted to pay bonuses two months earlier than usual, according to the FBI complaint and to the sons’ lawyer, Martin Flumenbaum. Neither is accused of wrongdoing. The conflict of interest involved an investment that Sorkin’s now-deceased father had with Madoff. Also, in 1992 Sorkin represented a Florida investment firm, Avellino & Bienes, that invested with Madoff.
Father’s Investment
The investment by Sorkin’s father came to light last month with the filing of a list of Madoff clients in federal court. The elder Sorkin opened an individual retirement account that he left to the attorney’s mother in 2001, Sorkin said. When Sorkin’s mother died in 2007, the IRA was cashed out. Madoff’s alleged Ponzi scheme, which would be the largest in history, went back at least to the 1980s, prosecutors said. Sorkin represented Fort Lauderdale-based Avellino & Bienes in 1992 after it was sued by the SEC. The unregistered firm invested more than $441 million in client money with Madoff, according to court papers. The firm agreed to close the business and refund the money, the regulator said. Michael Bienes told the Sun Sentinel of Fort Lauderdale, Florida on March 8 that he lost millions of dollars and was wiped out after investing with Madoff. The criminal case is U.S. v. Madoff, 08-mj-2735, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net; David Voreacos in New York federal court at dvoreacos@bloomberg.net; Erik Larson in New York federal court at elarson4@bloomberg.net.
FORMER CONGRESSIONAL AIDE PLEADS GUILTY TO HONEST SERVICES FRAUD
The United States Department of Justice
FOR IMMEDIATE RELEASE - TUESDAY, MARCH 10, 2009
www.doj.gov - CRM - (202) 524-2007 - TDD (202) 514-1888
FORMER CONGRESSIONAL STAFFER PLEADS GUILTY TO CONSPIRACY TO COMMIT HONEST SERVICES FRAUD
WASHINGTON, D.C. – A former congressional staffer pleaded guilty today to conspiring with others to commit honest services fraud, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced. Ann Copland, 52, pleaded guilty before U.S. District Judge Richard W. Roberts in the District of Columbia. According to the factual basis filed with the court, Copland worked on the staff of a U.S. senator from 1979 until 2008. From 2002 through 2004, Copland worked as an assistant on legislative and administrative matters, particularly those legislative matters involving Native American tribes. In her plea agreement, Copland admitted being lobbied by Jack Abramoff, Todd Boulanger and another lobbyist on matters involving a Native American tribe located in Mississippi. Copland admitted that she took and agreed to take a variety of official actions beneficial to the lobbyists and their clients, including the Mississippi tribe, at the request of Abramoff, Boulanger and others, based in part on the fact that she was receiving and wanted to continue receiving thousands of dollars in tickets to concerts, sports and other entertainment events, from the lobbyists. Specifically, Copland admitted to receiving more than $25,000 worth of tickets, meals and drinks from March 2002 through May 2004, during which time she understood that the lobbyists were giving her those things of value in order to influence her in the performance of her official actions. The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Boulanger pleaded guilty on Jan. 30, 2009, for his role in the scheme. Nineteen individuals, including lobbyists and public officials, have pleaded guilty or are awaiting trial as a result of the investigation, including Abramoff, who was sentenced in September 2008 to 48 months in prison. This case is being prosecuted by trial attorneys M. Kendall Day and Peter C. Sprung of the Public Integrity Section, headed by Section Chief William M. Welch II. The investigation is being conducted by the FBI.
FOR IMMEDIATE RELEASE - TUESDAY, MARCH 10, 2009
www.doj.gov - CRM - (202) 524-2007 - TDD (202) 514-1888
FORMER CONGRESSIONAL STAFFER PLEADS GUILTY TO CONSPIRACY TO COMMIT HONEST SERVICES FRAUD
WASHINGTON, D.C. – A former congressional staffer pleaded guilty today to conspiring with others to commit honest services fraud, Acting Assistant Attorney General Rita M. Glavin of the Criminal Division announced. Ann Copland, 52, pleaded guilty before U.S. District Judge Richard W. Roberts in the District of Columbia. According to the factual basis filed with the court, Copland worked on the staff of a U.S. senator from 1979 until 2008. From 2002 through 2004, Copland worked as an assistant on legislative and administrative matters, particularly those legislative matters involving Native American tribes. In her plea agreement, Copland admitted being lobbied by Jack Abramoff, Todd Boulanger and another lobbyist on matters involving a Native American tribe located in Mississippi. Copland admitted that she took and agreed to take a variety of official actions beneficial to the lobbyists and their clients, including the Mississippi tribe, at the request of Abramoff, Boulanger and others, based in part on the fact that she was receiving and wanted to continue receiving thousands of dollars in tickets to concerts, sports and other entertainment events, from the lobbyists. Specifically, Copland admitted to receiving more than $25,000 worth of tickets, meals and drinks from March 2002 through May 2004, during which time she understood that the lobbyists were giving her those things of value in order to influence her in the performance of her official actions. The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Boulanger pleaded guilty on Jan. 30, 2009, for his role in the scheme. Nineteen individuals, including lobbyists and public officials, have pleaded guilty or are awaiting trial as a result of the investigation, including Abramoff, who was sentenced in September 2008 to 48 months in prison. This case is being prosecuted by trial attorneys M. Kendall Day and Peter C. Sprung of the Public Integrity Section, headed by Section Chief William M. Welch II. The investigation is being conducted by the FBI.
Serpico on Today's Corruption
March, 2009, Frank Serpico, "...The system has not changed. Somehow, we keep electing these ego-driven, capitalist, greedy people to office." Frank Serpico is the man who inspired the 1973 Al Pacino film "Serpico" about corruption and intimidation in the New York City Police Department. "We can't just stand by and let them run us into the poorhouse. The government, people have to realize, is the most corrupt in the world. If you're gonna quote me on anything, that should be it. Why do people refuse to believe that the people we entrust with our nation's safety are not all trustworthy people?"
Growing Epidemic: NY Judges Bucking Old Corrupt Club Rules
The trend is only undesirable to the blood-sucking bar's number one rule: legal fees. In a return to the rule of law, a growing number of judge's are doing what's right, and speaking their conscience. Give judges a long-overdue raise, and return integrity and respect to every judicial position. Support judges who buck the corrupt 'orders' of spineless political hacks. The Legal System should NOT be about legal fees, but about Fairness, Due Process and Equal Justice--- for everyone, including judges.
The New York Law Journal by Mark Fass - March 10, 2009
A Brooklyn judge has recused himself from a receivership case where the plaintiff is represented by a law firm that employs two state lawmakers, one of whom voted against a judicial pay raise. In a scathing 10-page decision, Supreme Court Justice Arthur M. Schack (See Profile) wrote that it would be improper for him, as a petitioner in an action against the Legislature seeking raises for judges, to adjudicate an action in which the firm has a stake. "To avoid any potential appearance of impropriety in the instant case, since both Senator Craig M. Johnson and Assembly Member Marc S. Alessi are both of counsel to Jaspan Schelsinger Hoffman . . . I must recuse myself," Justice Schack wrote in JPMorgan Chase v. Bergen Plaza, 126/09. The Brooklyn Supreme Court decision will be published Thursday. "I hope that Mr. Johnson and Mr. Alessi would allow the judges of this state to receive their first pay raise in this century. Thanks to our legislators . . . our New York State judges are the 'Rodney Dangerfields' of government. A pay raise would help to give us a little respect, instead of, as recently said by Chief Judge Kaye, 'the disdain with which we are treated.'"
Justice Schack's recusal order is yet another salvo in the fight for pay increases for New York's approximately 1,300 trial judges, who have not received a raise since 1999, when the Legislature bumped their salaries to $136,700 a year. No state has gone longer without raising judicial pay; according to one study, New York ranks 48th in judicial pay when adjusted for the cost of living. Last May, then-Chief Judge Judith S. Kaye, a leading advocate for judicial raises, e-mailed the entire state judiciary, advising her fellow judges that they may recuse themselves as a matter of "individual conscience," but that a "strategy" of recusals could "hurt our cause" (NYLJ, May 2, 2008).
Two weeks later, the state Commission on Judicial Conduct warned that judges who recuse themselves to protest legislative inaction could face disciplinary actions. The County Judges Association of the State of New York then adopted a resolution supporting "the recusal of any New York State Judges, as a matter of personal conscience, in regard to their ability to be fair and impartial due to the controversy surrounding Judicial compensation." Though no one keeps an official count of the recusals, Steven W. Schlesinger told the Law Journal last year that in a three-month period about 20 judges recused themselves from cases involving his firm. Yesterday, he did not return a call for comment. In one such case, Trump on the Ocean, LLC v. Cortes-Vasquez, 5329-08, then-Nassau Supreme Justice Leonard B. Austin granted a potential intervenor's motion for recusal.
"The integrity of the judicial process requires that all attorneys and their clients believe that the decisions of this or any other court are based upon the facts and the law and not some issue in an unrelated matter which can be perceived as affecting the Court's impartiality or sense of fairness," Justice Austin wrote. Last week Justice Austin was appointed to the Appellate Division, Second Department. In the present action before Justice Schack, JPMorgan Chase, the plaintiff, sought the appointment of a receiver for a bankrupt Brooklyn shopping plaza. Justice Schack recused himself, citing his status as a plaintiff in Maron v. Silver, 06-021984, which seeks an increase in judicial salaries to $169,300. He wrote that it would neither be proper nor appear proper for him to rule on a case involving Jaspan Schlesinger, where both Mr. Johnson and Mr. Alessi are counsel. Mr. Alessi voted against the raises; the issue has not come to a vote before the Assembly.
"Both Senator Johnson and Assemblyman Alessi have the right to earn additional income, unlike judges," Justice Schack wrote. "It is high time for [them] to realize that the approximately 1300 New York State judges are working people who deserve their first pay raise in more than a decade." According to a spokesman for the Office of Court Administration, JPMorgan Chase will now go to Justice Abraham Gerges, Brooklyn's administrative judge, for reassignment. Antonia Donohue of Jaspan Schlesinger represented the plaintiffs, JPMorgan Chase. She declined to comment. The defendant, Bergen Plaza, did not answer the complaint. Its phone has been disconnected and no one responded to an e-mail requesting comment. The judges' pay-raise suit, Maron, is not faring well. In December 2007, Albany Supreme Court Justice Thomas J. McNamara dismissed all but one claim (NYLJ, Dec. 3, 2007). The Appellate Division, Third Department, affirmed 4-1, and the judges are now seeking leave to appeal (NYLJ, Nov. 14, 2008).
There are two other lawsuits seeking higher pay for judges. Larabee v. Silver, 112301/07, was filed in Manhattan Supreme Court in September 2007 on behalf of the New York City Family Court Association, the state Family Court Judges Association, the New York City Civil Court Judges Association and the New York City Criminal Court Judges Association. In Kaye v. Silver, 400763/08, filed in April 2008, Judge Kaye claimed the Legislature denied the judges their constitutional right to an adequate salary. Manhattan Supreme Court Justice Edward Lehner is now considering a motion for summary judgment and a motion to dismiss in Kaye. Justice Lehner's denial of the government's motion for summary judgment in Larabee has been appealed to the Appellate Division, First Department. Mark.Fass@incisivemedia.com
CLICK HERE TO SEE RELATED STORY, HERO JUDGE OF THE DAY, "Judge Cuts Firm's Fees for Receiver Role by 20 Percent"
CLICK HERE TO SEE RELATED STORY, "Hero Judge of the Day: Hon. Joseph W. Bellacosa"
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