SDNY COURTHOUSE, August 1– Two REIT executives were arraigned on charges of fraud involving shopping malls on August 1 before U.S. District Court for the Southern District of New York Chief Judge Colleen McMahon. Brixmor CEO Michasel Carroll put up as collateral for $1 million bail his $5 million apartment in Manhattan.
Co-defendant Michael Pappagallo's Connecticut house was valued at $850,000 but served to security his $1 million bond. Unlike most defendants in the SDNY both were allowed to travel around the country without pre-approval (Paul Manafort's banker Stephen Calk got this treatment too).
Judge McMahon said discovery, approximately 250,000 documents, is due by the end of August and the parties will reconvene on November 5 after what should be for Judge McMahon of day of presiding over a trial. But much can happen by then. Two other co-defendants have pled guilty, each before a different SDNY judge. From the US Attorney's press release: "Steven Splain, 57, of Cheshire, Connecticut, pled guilty on July 16, 2019, before United States District Judge Vernon S. Broderick to one count of conspiracy to commit securities fraud and to make false filings with the SEC, and one count of securities fraud. The conspiracy charge carries a maximum prison term of five years and the securities fraud charge carries a maximum prison term of 20 years. Michael Mortimer, 49, of Yardley, Pennsylvania, pled guilty on July 10, 2019, before United States District Judge Valerie E. Caproni to one count of conspiracy to commit securities fraud and to make false filings with the SEC, and one count of securities fraud. The conspiracy charge carries a maximum prison term of five years and the securities fraud charge carries a maximum prison term of 20 years."
Inner City Press will follow this and other cases in the SDNY, like the one(s) below. Watch this site.
Near the end of the now-concluded criminal ERISA trial that began with jury selection and an argument to quash subpoenas, on July 25 the government in its summation acknowledged that its witness Zeynep Ekemen not only was arrested for shoplifting and lied to them about being a US citizen but also was unfaithful to her husband with the defendant. But Ekemen, who participated in the scheme but got a non prosecution agreement, is not mentioned in the U.S. Attorney Press release celebrating a victory that was only announced this way, with no exhibits uploaded: "Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that a federal jury found SHIVANAND MAHARAJ guilty of honest services wire fraud, paying kickbacks in connection with an employee benefit plan, and conspiracy, following a two-week trial before U.S. District Judge John G. Koeltl. MAHARAJ’s co-conspirator, ENRICO RUBANO, a/k/a “Rick Rubano,” who was a director of information technology at a large union pension and health benefit fund (the “Funds”), pled guilty in connection with the same crimes shortly before trial. Manhattan U.S. Attorney Geoffrey S. Berman said: “For years, Shivanand Maharaj bribed an insider at a pension and health fund to approve hundreds of invoices for information technology work that was never done at all. He now stands rightly convicted for depriving hardworking individuals out of millions of dollars of health and retirement benefits.” According to the allegations contained in the Indictment and evidence presented during the trial in Manhattan federal court: From 2009 through 2015, RUBANO was the co-head of information technology for the Funds and had the authority to approve the payment of invoices from third-party vendors. Beginning in at least 2009, and continuing through 2015, MAHARAJ and RUBANO devised a scheme in which three different companies MAHARAJ owned or controlled submitted to the Funds invoices for millions of dollars in information technology services that were never performed or that had, in fact, been performed by employees of the Funds or other vendors. RUBANO, in his position as co-head of information technology, approved these fraudulent invoices and received kickbacks from MAHARAJ. MAHARAJ, by submitting hundreds of invoices and recruiting another co-conspirator to receive additional criminal proceeds, fraudulently received in excess of $2 million through this scheme.
MAHARAJ, 39, of Cresskill, New Jersey, was convicted of one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years; one count of giving kickbacks to influence the operation of an employee benefit plan, which carries a maximum sentence of three years; and conspiracy to give kickbacks to influence the operation of an employee benefit plan, which carries a maximum sentence of five years. MAHARAJ will be sentenced by Judge Koeltl on December 6, 2019. RUBANO, 50, of Tappan, New York, who engaged in additional kickback and fraud schemes with other co-conspirators, pled guilty to three counts of conspiracy to commit wire fraud, each of which carries a maximum sentence of 20 years in prison." So what about Ekeman? Why no exhibits uploaded? Why no notice when the jury came back with the verdict? We'll have more on this.
The defense in closing called Ekemen a "cold hearted... shoplifter" whose testimony should be thrown in the garbage. The moment when Ekemen cried and said she had not gone to her father's testimony in Turkey not because she could not get back into the US but because she was sick in bed. How will the jury take it? Why did Ekemen get a non prosecution agreement? Where does it stand now? Watch this site.
