By Matthew Russell Lee, Exclusive Patreon Doc
Honduras - The Source - The Root - etc
SDNY COURTHOUSE, Nov 19 – An insider trading defendant, Dov Malnik, was whisked before a Magistrate Judge and pleaded guilty, with no advance notice, on June 25, 2021. There's a back story, below - and a document.
On November 19, District Judge Victor Marrero sentenced Malnik, and Inner City Press again covered it. Malnik apologized and spoke about his young son. Judge Marrero, beyond the $1.5 million in forfeiture, imposed a sentence of thirty months. He was willing to recommend Allenwood, but not get into the minimum security level at Otisville.
Bryan Cohen, a Goldman Sachs banker charged with insider trading on January 7, 2020 pleaded guilty to conspiracy to commit securities fraud. Inner City Press covered it, here.
The US Attorney's Office did not publicize that proceeding or its 30 to 37 month plea deal, but Inner City Press was in the U.S. District Court for the Southern District of New York Magistrates Court, and spoke afterward with Cohen's defense lawyer Benjamin Brafman. More on Patreon here.
On July 2, 2020 SDNY Judge Denise L. Cote sentenced another defendant in the scheme, Telemaque Lavidas. Inner City Press live tweeted it, here. Lavidas got a year and a day.
Earlier in the proceedings, Inner City Press and others reported on John Dodelande as CC-3, here. Now a copy of Lavidas' June 8 sentencing memorandum, obtained by Inner City Press, shows the deal that Dodelande got. Photos here.
Now on June 25, the US Attorney's Office "announced the unsealing today of a 15-count superseding indictment charging DOV MALNIK and TOMER FEINGOLD with offenses relating to their roles as securities traders in a wide-ranging international insider trading ring who made millions of dollars in illicit profits by trading based on misappropriated inside information. MALNIK, a citizen of Israel and Lithuania, was arrested in Switzerland on October 7, 2020, was extradited on June 10, 2021, from Switzerland, and pled guilty today before U.S. Magistrate Judge Stewart D. Aaron. FEINGOLD remains at large. The case is assigned to U.S. District Judge Victor Marrero."
We return to the Lavidas memo, now putting it on Inner City Press' DocumentCloud, here. It says, at page 33; "Demane testified that he shared Ariad information with Yomi Rodrig, Dov Malnik and Tomer Fiengold, all of whom paid him for the information and traded on it. Id. at 337:22-338:1; 341:5-342:10; 347:23-348:4;" and
at page 39: "none of the other 'downstream tippees' presented at trial, about whom Telemaque had no knowledge, including George Kordakis, Steve Makris, Yannis Xylas, Yomi Rodrig, Dov Malnik and Tomer Fiengold, have been prosecuted." No longer true.
This case is US v. Fiengold and Malnik, 19-cr-714 (Marrero).
The Lavidas sentencing memo also says: "[T]he government entered into a non prosecution agreement with John Dodelande, pursuant to which he will not be prosecuted, he will serve no jail time, he will not forfeit any of the $12 million, and he will not even have a felony on his record. (Ex. S)."
While page 52 of the Lavidas sentencing memo is redacted, the unredacted version says that "If prosecuted, Dodelande’s Sentencing Guidelines range would be over 100 months and he would be required to forfeit the $12 million in cash he received for tips. Instead, the government entered into a non-prosecution agreement with John Dodelande, pursuant to which he will not be prosecuted, he will serve no jail time, he will not forfeit any of the $12 million, and he will not even have a felony on his record. (Ex. S). In addition, the government entered into a non-prosecution agreement with John Dodelande’s brother, Kevin Dodelande. (Ex. T). Kevin also served as a middleman who passed inside information from inside sources to traders as part of Demane’s larger scheme. (Ex. U). He too was paid millions of dollars by Demane and others for inside information. Id. And, like his brother John, the government entered into an agreement with him pursuant to which he will not be prosecuted, will not serve any jail time, will not forfeit any of the millions in cash he was paid for inside information, and will not even have a felony on his record. (Ex. T). The fact that the government has extended such leniency to Demane, John Dodelande, and Kevin Dodelande, all three of whom are unquestionably much, much more culpable than Telemaque." Only the portion in italics was NOT redacted in the memo. Inner City Press has also obtained Exhibits S and T, among other documents.
Exhibit S is a February 14, 2018 letter to John Dodelande's lawyer A. John Pappalardo. Exhibit T is a similar letter re Kevin Dodelande, with the same lawyer, both signed on February 23, 2018.
The case is US v. Lavidas, 19-cr-716 (Cote).
Back on January 6, the trial of Lavidas began before Judge Cote. Assistant US Attorney Daniel Tracer in a short opening statement described it as an open and cut case, which will include cooperating witness Marc Demane.
Lavidas' lawyer John Streeter told that jury Demane is simply trying to reduce his sentence and has no first hand information. Here's some of how it went, live-tweeted here.
Hours after the opening statements, the US Attorney office asked Judge Cote to ban discussion of how it conducted its investigation: "Based on the contents of defense counsel’s opening statement, the Government respectfully requests a ruling in limine precluding the defense from introducing evidence about investigative techniques that the Government employed during the course of the investigation. As set forth below, such evidence improperly suggests that the jury shift its attention from the charges against the defendant to the conduct of the investigation, and is irrelevant and misleading. 1. Background In opening statements, defense counsel on two separate occasions engaged in a recitation of the Government’s investigation and the various investigative steps that have been taken with respect both to this defendant and other individuals. For example, defense counsel said: The third thing is that you are going to learn that the government gathered millions and millions of e-mails and text messages and electronic devices, phones and computers and all kinds of evidence from this huge network of people who were engaging in insider trading – from Demane, from Nikas, from their whole network. And you are also going to learn that they gathered e-mails, and phones, and computers and all kinds of other evidence from Mr. Lavidas. (Tr. 32). Later in his opening, defense counsel returned to the same topic: The third thing that I mentioned is that the government has been investigating this case for years. They have collected millions of e-mails and text messages. And they have collected Mr. Lavidas’s phones, his iPad, his computer, his documents. They have collected a long list of phones, computers, disc drives from Mr. Nikas. They collected a long list of those same things from Mr. Demane. And they collected those same things secretly, for years, from Google and other companies where their e-mail accounts were.... The Government respectfully requests that the Court preclude the defendant from introducing evidence about investigative techniques that the Government employed during the course of the investigation."
The US Attorney doesn't want the jury to hear about this. And the public? Inner City Press will continue to cover these cases.
This one is US v. Fiengold and Malnik, 19-cr-714 (Marrero).
