SDNY COURTHOUSE, June 29 – In 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.
Now on Saturday, June 29 the lawyers for Shor have asked Judge Failla to allow in some evidence - this as other defendants are convicted, with assigned lawyers they say they don't trust, in trials lasting three days, covered here by Inner City Press. The new Shor filing: "Dear Judge Failla: We write on behalf of defendant Jeremy Shor to request the Court’s permission to introduce a single recorded statement made by Amin Majidi to Mr. Shor on December 22, 2015. Mr. Majidi’s statement is relevant to Mr. Shor’s state of mind as to why Mr. Shor continued to work at Premium Point Investments (“PPI”) following his meeting with the Chief Compliance Officer on December 15, 2015; specifically, the statement constitutes evidence that Mr. Shor was led to believe that the pricing practices at PPI were going to improve. We seek to introduce the recording through cross examination of Evan Jay by playing a portion of the audio (the statement by Mr. Majidi and the preceding non-substantive statement by Mr. Shor to identify him as the other participant in the conversation) to Mr. Jay who we believe will be able to identify the voices on the recording. Once verified, we seek to play Mr. Majidi’s statement in open court. We would play the approximately one-minute clip from the December 22, 2015 conversation during our cross examination of Mr. Jay:
[SHOR: You have a vacation coming; I’m starting vacation on Thursday, I’m in tomorrow… (to Mr. Jay only)]
MAJIDI: I mean even, even, even, even, even, you know, it’s, w-, w-, what kills me is that all that, you know, I, I have the ability to, I think to be human and, and fair about things and you know and see positivity in stuff. Like, even, even, like even the conversation you, you had with, with Evan, which, you know, one level, and you know I see you sitting there with the compliance guy, my, my, I’m pins and needles, and, s-, stomach acid is going crazy, then I get pulled into a three-hour meeting when I was coming out and joking and thanking and dreaming of sushi, I see positives come out of that. We, we fixed one trade, we show we’re making an effort, we’ll clean up the book, mark it down for the end of the year. So I’m appreciative of something that caused me a lot of distress, I, I know there’s something good will come out of it. So, what I’m, what I’m, again I’m disappointed that even despite, you know, the shitty year and stuff like that, I think your mindset is that we can’t, we can’t salvage. But, but, it’s like, shit, these, these things are, these careers and relationships are long term. Mr. Majidi’s statement to Mr. Shor constitutes relevant, admissible evidence for at least two reasons. First, Mr. Majidi’s assurances—that “something good will come out of” Mr. Shor’s actions and that his actions caused PPI to “fix[] one trade” and would cause PPI to “clean up the book” and “mark it down for the end of the year”—are relevant to Mr. Shor’s state of mind in December 2015 and thereafter because he was told that his concerns were going to be addressed. Through recent testimony, the Government has suggested to the jury that Mr. Shor is guilty of the charged offenses in part because he continued to participate in wrongful conduct after his meeting with Mr. Jay. Specifically, the following testimony was elicited during the redirect examination of Mr. Majidi: Q. Is Mr. Shor talking here about going to -- AOC is where Frank Dinucci worked; right? A. Yes. Q. What's PT short for? A. Performance Trust. Q. This is approximately a month after you saw him go into the compliance officer's office? A. Yes. Q. Did Mr. Shor mark the Mortgage Credit Fund for month end December 2015? A. Yes. Q. Did he also do so for January 2016? A. Yes. (Tr. 2844: 9-16.)
The Government also suggested yesterday through redirect examination of Mr. Dinucci that reporting issues to Compliance does not obviate past or continued criminal activity. (Tr. 3699: 6-11.) While that generally may be true, Mr. Majidi’s statement is relevant..." We'll have more on this.
Back on June 10, before some post jury arguments, Ahuja's lawyer after receiving a note from him via Lena at the defense table returned to questioning Ashish Dole about the fees that PPI left on the table, by not calling in all pledges and by returning some money they could have managed.
Now on June 11 Judge Failla has kept the case going with this ruling, beginning: "The Court has considered the motion of Defendant Jeremy Shor, which motion is joined by Defendant Anilesh Ahuja, (i) announcing an intention to cross-examine cooperating witnesses Amin Majidi and Frank Dinucci (together, the “Cooperating Witnesses”) regarding certain alterations identified between proposed plea allocutions and the actual allocutions given at their respective guilty plea proceedings; (ii) announcing an intention to call additional witnesses, including counsel for each cooperating witness, “to testify about the Government’s apparent efforts to influence the relevant plea allocutions…”; and (iii) requesting an adverse inference instruction from the Court regarding the timing of the Government’s disclosures. For the reasons set forth in the remainder of this Order, the Court precludes the two forms of testimony identified and denies the requested instruction. After obtaining clarification from counsel during oral argument this afternoon, the Court understands that there are two issues implicated by Mr. Shor’s request. The first issue concerns whether the Government acted improperly in seeking, obtaining, reviewing, and/or commenting on the proposed plea allocutions of the Cooperating Witnesses. On the record before the Court — which includes extensive questioning of those prosecutors with firsthand knowledge of the events — the Court finds no improper conduct. As suggested by its questioning, the Court does not believe that it is per se improper for a prosecutor to review, or even to comment on, a proposed plea allocution. Among other things, the Government has an interest in ensuring that the plea allocution suffices to state an offense. The conduct recalled by the prosecutors in this case was neither improper nor meriting of disclosure to the jury. There is nothing to suggest, for example, that the prosecutors compelled either witness to change his allocution, or that they suggested any modifications that were inconsistent with the substance of the witness’s proffer statements. More to the point, and paraphrasing Mr. Shor’s argument, there is nothing in this record to suggest that “the Government conveyed a message to [the cooperating witness’s] counsel that the proposed allocution should be revised to eliminate portions that would have been favorable to [Defendants] and inconsistent with the Government’s theory of the prosecution, and to replace them with statements that aligned with the Government’s prosecution theory and undercut [Defendants’] defense.” For completeness, the Court intends to inquire of the Cooperating Witnesses’ attorneys, Mr. Seth Rosenberg and Mr. Daniel Zinman, as to their recollections of their conversations with the prosecutors concerning the respective plea allocutions. The Court contemplates that such inquiry will take place outside of the presence of the jury, prior to the testimony of the witness. The Court emphasizes, however, that it intends to steer clear of questions that would implicate the attorney-client privilege held by each of the Cooperating Witnesses. "
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.
