SDNY COURTHOUSE, June 10 – On Day 2 of the US prosecution of Premium Point Investments hedge funders Anilesh Ahuja and Jeremy Shor, the government doggedly tried to show the jury the so-called sector spread and mid-bid mis-marking scams by which the two defendants allegedly overvalued their portfolios.
U.S. District Court for the Southern District Judge Kathleen Polk Failla requested permission to ask her own questions, as to to clarify for the jury the difference between the bid and "mid" price, between the bid and asked.
On June 9 Ajuha's lawyer Robert Finzi of Paul Weiss wrote to Judge Failla: "Although we are still reviewing the productions, they appear to include material directly relevant to our defense. So, for example, one of the WhatsApp conversations [REDACTED] (The relevant text is being submitted under seal as Exhibit A so that it is not available to Mr. Dole, who is on cross, or his counsel.) While we do not wish to further delay our cross-examination, and plan to proceed with it on Monday morning, we respectfully request that the Court order that (i) the government be precluded from using any material contained in these productions without notice to the defense and leave from the Court; and (ii) that Mr. Dole’s cross be kept open (such that the defense could re-call him for additional cross) until it has had time to review the newly-produced documents and determine what use, if any, it may make of them at trial."
Meanwhile, among the exhibits now made available is Gx 855, a message from Shor to Anish Dole and Majidi, "I’m done giving frank a BJ. Sorry to be crass boss. Back in 3." Watch this site.
Earlier on Sunday, June 9 the lawyers for Jeremy Shor submitted several sealed exhibits and a letter that began, with redactions, "We respectfully write on behalf of defendant Jeremy Shor to advise the Court that we may seek to introduce at trial testimony and evidence concerning what appear to be the Government’s efforts to influence the guilty plea allocutions of cooperating witnesses Amin Majidi and Frank Dinucci in a manner designed to eliminate exculpatory information for Mr. Shor and to avoid impeachment information regarding these witnesses. As Your Honor has recognized, the proposed plea allocution that Mr. Majidi’s counsel forwarded to the Government for review should have been disclosed previously under United States v. Triumph Capital Group, Inc., 544 F.3d 149 (2d Cir. 2008). Indeed, the proposed allocution is materially different from that which Mr. Majidi ultimately offered in court, and the language added after Government review seems designed to implicate Mr. Shor in alleged criminal acts. Over the weekend as part of its re-review of its files, the Government for the first time disclosed a proposed allocution for Mr. Dinucci that the Government asked to review and which was provided by his counsel [REDACTION.] As with Mr. Majidi, after the Government’s apparent tinkering, Mr. Dinucci allocuted in a manner that went well beyond the elements of the charged offenses and inculpated Mr. Shor with factual claims that did not appear in Mr. Dinucci’s proposed allocution. The proposed allocution included [REDACTION.] With respect to Mr. Majidi and Mr. Dinucci, the proposed allocutions would never have seen the light of day but for the Brady/Giglio issues that have arisen before and during trial and defense counsel’s repeated efforts to ensure compliance with the Government’s constitutional obligations."
On Saturday, June 8 Assistant US Attorneys Andrea M. Griswold, Joshua A. Naftalis and Max Nicholas filed a letter including that "Pursuant to our colloquy with the Court on June 6, 2019, we have reviewed our file, including archived emails, for all communications with attorneys for witnesses in this case, in order to determine if there were additional materials that should be disclosed pursuant to United States v. Triumph Capital Group, Inc., 544 F.3d 149 (2d Cir. 2008). In the course of this review, we produced to defense counsel, on June 7, a draft plea allocution that counsel for cooperating witness Frank Dinucci sent to the Government. We also produced on June 7 certain bank records that we received from counsel for cooperating witness Amin Majidi earlier that day relating to an account formerly held by Majidi; a document relating to Majidi’s citizenship; a memorandum of agreement relating to a subdivision of land owned by Majidi and his wife; and communications with counsel for Dinucci relating to travel requests. This evening, we produced to defense counsel additional communications with counsel for Dinucci relating to travel requests; communications with counsel for cooperating witness Ashish Dole relating to travel requests; communications with counsel for Majidi regarding a bail modification request; communications with counsel for Dinucci and the FBI regarding setting up an account for Dinucci to make recorded calls; and emails with counsel for James Nimberg regarding the production of documents.
Having completed our review and produced the materials described above, we believe that we have complied with our disclosure obligations under Triumph Capital and the related case law." The trial resumes June 10 and Inner City Press will be there, watch this site, @InnerCityPress and the new @SDNYLIVE.
The underlying Complaint in the case, from Paragraphs 25 to 40, does a fine job of explaining. But juror are not supposed to go online. So, lengthy testimony in a sure to be lengthy trial.
Set to testify against Ahuja is one time PPI portfolio manager Amin Majidi. Ahuja's lawyer on June 5 told the jury they will be shown how Majadi lied not once but three times to prosecutors about an account he owned. The case is USA v. Ahuja, et al., 18-cr-328 (Judge Failla).
First, Ahuja's Paul Weiss lawyer said, Majadi told the prosecutors he had set up the account to take money out of Iran but had never put anything in it. Then he said, yes, there was $900,000 in it from the sale of a property but he claimed he did not know how it got there. It turns out, the opening statement went, that the money was taken out of Iran through illegal money brokers: hawala. This should get interested.
Judge Failla told the jury they will be getting a 45 minute lunch break each day during the trial at around 12:45, and will knock off at 3 pm. She said she could get them breakfast and "heavy snacks." Some of the opening statements were drown out by disappointed attendees of the proceeding against the U.S. Census citizenship question, which SDNY Judge Jesse Furman restricted to setting a briefing schedule. But things in Special Courtroom 110, where in the past UN briber Ng Lap Seng was tried and convicted as reported daily by Inner City Press, should get interesting. Watch this site.
Back on May 14 former health care investment banks Sean Stewart appeared in the run-up to a September 9 re-trial on insider trading charges, now with pro bono counsel from Fried Frank, in the SDNYcourtroom of Judge Jed Rakoff. Things got off to a rocky start.
Judge Rakoff wanted to know why, for a retrial, it was taking so long. He asked, Why not do the trial in July? The Fried Frank lawyers said they were new to the case - although they had appeared, strangely, in a status conference on it before SDNY Judge Andrew Carter in March, Lawrence Gerschwer and Steven Witzel - and that they were reviewing discovery. Or really, that the "cavalry" would arrive next Monday, in the form of summer associates.
Stewart was previously represented by the Federal Defenders; Judge Rakoff said while Fried Frank might be good they could not match the Federal Defenders. (He smiled as it said it). The Assistant U.S. Attorneys Richard A. Cooper and Samson A. Enzer are also new to the case, which began under Judge Swain. Judge Rakoff seems determined to end it one way or the other. Judge Rakoff finished the proceeding with a shout-out to a Julia Green in the back of his courtroom, seemingly his law clerk in 2007 and now, after a corporate stint, with the SEC.
Judge Rakoff set deadlines and said that the September 9 trial date will not be changed, although the jury will not sit on the Thursday and Friday of the second week. The case is USA v. Stewart, 15-cr-287.
Back in April Sebastian Pinto-Thomaz was found guilty of insider trading, the same day the jury got the case. He was barely 30 years old but was publicly traded paint company Sherwin Williams' main contact at S&P when it moved to acquire Valstar in 2016. Mysteriously a hairdresser Abell Oujaddou linked to both Sebastian and to his mother Nathalie Pinto-Thomaz made large purchases of Valspar stock and options and fell under suspicious by FINRA. A Jeremy Millul made even larger trades, of options. On April 24 the defense was barred from putting Millul's mother on the stand, to testify about another bank account and more, Inner City Press was informed.
Late morning on April 26 in the SDNY courtroom of Judge Rakoff, the jury was read the elements of the crime and told that if they did not decide today, the next day would be Tuesday. The marshall was sworn, to take them to a "private and convenient place" - an adjacent room. Where well before the 2:30 pm knock off time for the more covered college basketball prosecution upstairs, the jury decided guilty. The sentencing will be in July. We'll have more on this.
On April 25 prosecutor Christine I. Magdo called the defense shatter-shot and desperate. She showed that Sebastian Pinto-Thomaz was in the WhatsApp and Viber contracts of jewerly dealer and Valspar options trader Jeremy Millul. But as defense lawyer Henry Mazurek pointed out after the jury was gone for the day, this doesn't prove that the two men communicated over the platforms, which when installed demand or trick a user into importing all of their contacts from email, for example.
Judge Rakoff said the jury could make a reasonable inference from the contacts information, adding that in the view of one reasonable observer Mazurek has engaged in his summation in gross speculation. Mazurek asked, Who is that reasonable observer? Rakoff shot back, you'll have to speculate. He will instruct the jury for a half hour on April 26 then they will deliberate. According to the government, the health and safety of the stock market is on the line. Watch this site - more here on Patreon.
Earlier on April 25 the defense put on the stand an IT consultant who showed charts he's made of hairdresser and tipee Abell Ajouddou's stock trades including Citigroup, JPM Chase and Bank of America, twice, and compare the volume of his communications, cell phone and text message, with the mother (65%) and son (35%).
The government counter-punched by noting that WhatsApp and Viber calls were not included, and that Bank of America, Sprint and Blackberry / RIM were double counted. It was a strange ending to the evidence. After summations, the jury will begin deliberating early on April 26. Watch this site, and @SDNYLIVE.
Back on April 18, before the disenchantment, an issue arose after the jury left for lunch as to whether Oujaddou had told his then-lawyer Robert Anello to tell the government he had paid Sebastian Pinto-Thomaz about of a "tip fund" from his salon, or as he claimed earlier in the week from cash he and his wife kept in the apartment after the power outrages in Super Storm Sandy. Judge Rakoff asked for Anello's telephone number, dialed it and put him on speaker phone. There, with the consent of Oujaddou's current lawyer, Anello said, yes, his client had told him to convey that. So Oujaddou can be cross examined about that, and about the unredacted PSR report the government must now give to defense counsel. The jury will not sit on Good Friday, so things may come to a head on the afternoon on Thursday, April 18, between an equity analyst and a FINRA witnesses up from Baltimore. Watch this site.
the second day of the trial of Sebastian Pinto-Thomaz on four felony counts proceeded, with Oujaddou in the stand. Assistant U.S. Attorney Christine I. Magdo walked him through his Charles Schwab accounts, and photos from the Home Depot on 23rd Street where he said he handed Sebastian $7,500 in cash he kept in his apartment with his wife, since Hurricane Sandy.
But when the jury left, questions were raised. Oujaddou had been threatened with a lawsuit for sexual assault by a woman whom he fired from the salon, just before marrying his Superstorm Sandy co-hoarder wife. This information, who said on the record, was deemed too prejudicial for the jury to hear.
Sebastian's lawyer Henry Mazurek argued that it was relevant, that Oujaddou's need for hush money for the threatened lawsuit explained his trading. Even when this was denied, he made a point of saying that hush money is in the news, and that being an alleged sexual assaulter may not be so prejudicial, given that the current US President was elected. Judge Rakoff riffed, I am interested in your political analysis - but not as a lawyer. And thus ended Day Two of US v Pinto.
Career not destroyed, Sebastian Pinto-Thomaz asked the court this year to travel to Houston for a possible new job. But for two week he's set to be in Judge Rakoff's courtroom - and after that, nobody knows. At the lunch break on April 17 he was out in front of 500 Pearl Street working his cell phone. Watch this site.
Back on April 10 a defendant awaiting sentencing on hedge fund fraud appeared to change lawyers on April 10 before SDNYJudge William Pauley. First his outgoing lawyer Edward Little visited him in the green brick hallway outside the courtroom, then his prospective or potential replacement counsel, Jonathan Halpern, went into the hall to see him. When the defendant Nicholas Genovese was brought out in shackles he was thin and bespectacled, guarded by two marshals. In between the two counsel recounted their histories working in the U.S. Attorney's Office, Little from 1982 to 1990 then on Wedtech cases, Halpern from 1989 to 2004 (yes, they overlapped one year.) Still when Judge Pauley took the bench he said as early as April 18 he will appoint a CJA lawyer if the connection between Genovese - fees paid by his mother - and Halpern doesn't take. According to the U.S. Attorney, "NICHOLAS JOSEPH GENOVESE pled guilty today in Manhattan federal court to securities fraud for inducing investments in a hedge fund that he founded, Willow Creek Investments LP (“Willow Creek”), by misrepresenting his qualifications and professional background and concealing that he had prior felony convictions for fraud-related crimes. In February 2018, GENOVESE was charged and arrested for perpetrating this fraud. Today, GENOVESE pled guilty to one count of securities fraud before United States District Judge William H. Pauley III. As part of his guilty plea, GENOVESE agreed to forfeit more than $13 million of proceeds of the securities fraud, including his interest in two watercraft that GENOVESE purchased with funds that he obtained from his victims." Inner City Press will continue to follow this case, so different than another recent change of counsel in the SDNY.
On April 8 a defendant accused of four armed robberies of livery cab drives in The Bronx asked for bail - and when it was denied, he fired his lawyer, who told the court the defendant was bipolar and heard voices. It wasbefore SDNY Judge Paul Crotty, who denied bail and then assigned the defendant James Jackson a new CJA lawyer. Before the switch off, Jackson's Federal Defenders lawyer argued that Jackson has a friend who makes $100,000 a year working construction and would put up $5000, and that Jackson's mother said if he fled the U.S. Marshals wouldn't have to chase him down, she would. Crotty was unmoved. The Assistant US Attorney Thomas Wright told Crotty that Jackson had confessed to all four Hobbs Act robberies and to brandishing a weapon, which the government believes he still has access too.
Wright said Jackson during interrogation spoke of suicide and of hearing voices. His Federal Defender lawyer Philip Weinstein, before he learned he would be fired, said Jackson had swallowed bleach at age 20 and needed time on bail to say goodbye to his seven year old who does not live with him but whom he still fathers. Weinstein waved a plea offer then government has made with a deadline of May 3. That has now been pushed back at least until 8. Inner City Press will continue to follow this case.
