By Matthew Russell Lee, Exclusive Patreon
Honduras - The Source - The Root - etc
SDNY COURTHOUSE, Sept 17 – Steven M. Calk of FDIC-regulated Federal Savings Bank was presented and arraigned on May 23 in the U.S. District Court for the Southern District of New York for financial institution bribery for corruptly using his position with FSB to issue $16 million in high-risk loans to Paul Manafort in a bid to obtain a senior position with the Trump administration, namely Undersecretary of the Army.
On April 23 SDNY Judge Lorna G. Schofield held an oral argument, by telephone with Calk himself on the line from Chicago. Inner City Press covered it, below.
On July 2, Judge Schofield held a proceeding. Inner City Press live tweeted it, below.
On September 4 a trial date was set, after review by the SDNY assignment committee made up of Judges J. Paul Oetken and P. Kevin Castel and White Plains-based District Judge Vincent L. Briccetti: "ORDER as to Stephen M. Calk. It is hereby ORDERED that the parties are advised that jury trials will resume, and the jury trial in this action shall commence on December 2, 2020."
But on September 11, the US Attorney wrote to Judge Schofield to put on the record the Illinois has been added to New York's (and the SDNY's) 14 day quarantine list, and says it may significantly impact the feasibility of a December trial. On September 17 Judge Schofield held a proceeding on this, and Inner City Press live tweeted it, here:
AUSA Zolkind: We made proposals to the defense to make a December trial feasible, but there is no agreement.
Defense: We don't agree to virtual witnesses. But it is not clear the quarantine won't continue. We don't want to give up the December slot.
Judge Schofield: The Illinois numbers seem to be trending down. So I would propose we keep the trial date and see how things develop. Maybe the quarantine won't be in place in December. What control date shall we have, as the drop dead date?
Defense: Mid-October.
AUSA Zolkind: We prefer early October. We think there will be logistical difficulties even if Illinois comes off the list. We have witnesses in other states like Florida and Indiana. It seems there will be no vaccine by December
Judge Schofield: I've done a video trial and it worked. But here, the defense would have to consent. We'll have to convene again and decide what we do. Let's re-convene Oct 15. I'll leave all dates in place.
Watch this site.
In August, the US Attorney's office acknowledged to Judge Schofield more discovery "oversights," even as they are grilled by Judge Alison Nathan in US v. Nejad (another banker) and by Judge Katherine Polk Failla in US v. Ahuja and Shor. On Calk they say: "Additional New Material from SCO’s Discovery Productions to Manafort The discovery of the 30,000 uncategorized Manafort-related files described above also led the Government to further review SCO’s discovery productions to Manafort to ensure that no additional materials had been inadvertently overlooked. The Government had previously understood, based on extensive communications with members of the SCO team and its own review of the SCO’s file storage system, that, with several immaterial exceptions, the SCO discovery productions to Manafort were drawn from the sources that the Government had independently searched, including the FBI’s files as described above. However, after further reviewing the SCO’s discovery transmittal letters and copies of certain of the SCO’s productions, the Government has realized that certain discovery that had been produced to Manafort was apparently not contained within the sources the Government had searched in this case... We currently expect to transmit these materials to the defense within the next week.8 The Government regrets that the materials described above were not identified and produced at a much earlier stage of this case and, as detailed herein, is taking extensive steps now to ensure that no additional documents from the Manafort Materials have been inadvertently overlooked." Another "the Government regrets." We'll have more on this.
Back on July 2: Assistant US Attorney Paul Monteleoni rattled off COVID bad news, to request trial later in 2021. He says Broadway is closed through 2020, indoor dining pushed back, possible outbreak in Rockland County.
AUSA Monteleoni floats the idea of a witness having to go into 2 week quarantine. Notes that incarcerated defendants will get first trials. US Attorney does not want December 2020.
Judge Schofield: This is complex. There are 26 active judges, and senior judges, many trials waiting. So, I think what I'll do at the moment is set a December trial date with the understanding that we all need to talk with each other. We'll take the earliest date. I'll set it for Tuesday, December 1. Take it with a grain of salt. I won't schedule a conference now. Let's move on to the motions that are at issue. The motions to compel...
AUSA: They've asked us for a document and we're working on it.
Judge Schofield: Let's move on to the issue of sanctions.
Calk's lawyer: Government wrote to you in August, for six weeks to give documents from the Special Counsel's office. They took longer; we did not complain. But in March we learned of millions of more pages. We only got the documents in April - but the government learned about them in December. We felt this was unfair, given the government an unfair tactical advantage for trial.
Calk's lawyer: "The government has put on its witness list Mr. Manafort, Gates and Kushner."
Judge Schofield: The defendant's motion for sanctions for US discovery violations is denied. Court's examine the culpability and prejudice to the defendant. Miranda, 2d Cir, 1975. Here, the government was untimely, the argument goes. But it was not intentional.
Inner City Press will stay on this.
On June 16 Judge Schofield ruled, "WHEREAS the parties have fully briefed Defendant’s motion for an order compelling the government (i) to identify its anticipated trial exhibits, any Brady material and trial witnesses; and (ii) to certify to the Court that its discovery production is now complete, and for any other relief as the Court may deem just and proper. It is hereby ORDERED that the parties appear for oral argument on July 2, 2020 at 10:50 a.m. The parties are advised that the Court may issue an oral ruling following argument." Some pre Fourth of July fireworks. Watch this site.
Calk's lawyer said the loan to Manafort was at 7.25%, a subprime rate.
Judge Schofield asked the government, There were certain interviews done that never made their way into any corrective affidavit to get the search warrant.
The Assistant US Attorney replied, It's hard for me to check my handwritten notes which are in my office and I don't have access to...
Judge Schofield continued, The warrant was signed on June 26 and was supposed to be executed on the 27th, but wasn't until the 28th?
AUSA: We at SDNY didn't get any detailed download of the interviews with the bank officials until days later. One interview was in California; we were involved in coordinating Federal Saving Bank approaches. The plan was to extract Mr Calk's phone.
Judge Schofield concluded, on this, Why don't you get me a sworn statement, in two weeks. I assume we are all in our homes.
Calk's lawyer said, We want your Honor to look at the Grand Jury material, in camera. Because we understand that Mr Manafort told the Grand Jury he proposed Mr Calk for the job not because of the loan but on the merits. This is a very unusual case
Judge Schofield concluded, I will reserve decision. I will issue a short order about what I'd like from the government. Is everyone available September 3rd for trial? Motions in limine July 27, voir dire on August 3; Final Pre Trial Confernce on August 27 - depending on your vacations, of course.
AUSA Paul Monteleoni intoned, We do not plan vacations in August, we are not sure it will be safe to travel. But we're not sure about this time, given social distancing requirements.
Judge Schofield: I'll be cognizant of that, safety. We're adjourned. Inner City Press will continue to cover this case.
Back on Friday, November 8 Calk filed a motion to move the case to his hometown of Chicago, arguing in part that his "business" there will be disrupted if the case is not transferred. He says he "remains an owner of TFSB." But as Inner City Press noted on November 8, he ignores the New York connections of his Manafort loans.
Now on February 12, Calk's motion to move the case has been denied: "OPINION AND ORDER as to Stephen M. Calk: As the location of the Defendant is the only factor that weighs in favor of transfer, and that factor is not dispositive, Platt, 376 U.S. at 24546; accord Parrilla, 2014 WL 1621487, at *14, Defendant's motion for transfer is DENIED.The Clerk of Court is respectfully directed to close the motion at Docket No. 33. (Signed by Judge Lorna G. Schofield on 2/12/2020)." Inner City Press will continue to follow this case.
An August 26 filing in the case says that the SDNY prosecutors have as discovering "produced in excess of 1.2 million pages to date, the majority of which were from files of this Office" - in New York.
Perhaps in response the SDNY prosecutors will more directly link Calk's case to wider Trump inquiries? Inner City Press, which has followed this case and the weak regulation of for example of Comptroller of the Currency Joseph Otting, will continue on this case. Watch this site.
In these documents, more details of rogue banker Calk's pursuit of the "SECARMY" job have become public. They put the loose regulation of FRB by U.S. Comptroller of the Currency Joe Otting - how did he get that job, by the way? - into focus.
On Dec. 5, 2016 Calk e-mailed Manafort, “President Elect Trump will be in Michigan on Friday. Should we arrange a meeting while he is near by? Do you think we are making any progress re: SECARMY?” Manafort shot back, “He is not doing meetings on the road on these types of matters. I will be calling you later today with updates.”
A cynic made add, to what was found in Calk's iPhone, "Oh and give me another loan" (under Otting's wink and nod).
Calk wrote to Jim, presumably Mattis, that "I believe that Steve Bannon will be speaking to you again about me today." Then two days after a 10 January 2017 interview at Trump Tower Calk wrote to Mattis' assistant, "I know that Anthony Scaramucci and others will be reaching out on my behalf as well.”
One can only imagine Calk's communications to his regulators at the OCC - literally, only imagine since the OCC under Otting now reflexively denied and hinders FOIA requests from Inner City Press.
Back on May 23 SDNY Magistrate Judge Debra Freeman in the U.S. District Court for the Southern District of New York accepted the government's proposal of $5 million bond with no co-signer (although that is usually required for moral suasion) and travel allowed throughout the United States (though more defendants are usually confined to the Southern and Eastern District of NY and one other district). Money talks.
Afterward in front of the SDNY courthouse Inner City Press asked Calk's lawyers Daniel Stein and Jeremy Margoles about Manafort saying he had misstated his financial situation to get the FSB loans. When did Calk know? They did not answer. Video here, Facebook video here. Inner City Press' Alamy photos here.
Now in May 28 letter to District Judge Lorna G. Schofield, the government has requested the motions directed of their indictment of Calk be filed by July 12. Judge Schofield granted it only in part, saying that by June 21 Calk "shall file a pre-motion letter with a briefing description of any motion(s) he intends to file."
As of the morning of June 25, there is nothing in the docket in the case before SDNY Judge Schofield (who, as Inner City Press has noted and is inquiring into, unilaterally seals such proceedings as criminal sentencings, here.)
While the OCC has yet to sufficiently answer, and is trying to hinder Inner City Press' reporting, we will stay on this case.
On May 23, still from the SDNY courthouse covering other cases including one involving the death penalty, Inner City Press reported finding no U.S. Home Mortgage Disclosure Act data for "Federal Savings Bank." But there's more.
The Federal Savings Bank's website, while providing a generic link to the FDIC, and a statement "Member FDIC," has no link for the U.S. Community Reinvestment Act. (Nor does it mention the indictment of Stephen Calk, simply listing his brother John Calk now as CEO and Vice Chairman. Who is the chairman?)
It lists a loan production office on Avenue J in Brooklyn, and two deposit taking braches in Illinois. Did it see some exemption from the CRA and other consumer protection laws? From fair lending laws?
Earlier on the morning of May 24 Inner City Press asked the FDIC, "Having covered yesterday's arraignment of the Chairman of The Federal Savings Bank in the SDNY courthouse, including the FDIC's involvement, I checked the bank's website and found "Member FDIC" but no mention of the Community Reinvestment Act."
The FDIC's spokesperson David Barr, to his credit, responded quickly, writing to Inner City Press: "The Federal Savings Bank, Chicago, is regulated by the Office of the Comptroller of the Currency. They would be responsible for CRA and regulatory oversight. You should contact the OCC for more information."
Now the OCC under Comptroller Joseph Otting has done everything possible to block the release of information, denying FOIA fees waivers and expedited treatment, refusing comments. But for now online the OCC has said this about The Federal Savings Bank: "While TFSB originated a substantial majority of its loans outside of its AAs; the bank’s business strategy is to operate as a mortgage banking entity with a nationwide presence and market place. Taking the bank’s business strategy into consideration the bank’s performance under this lending criterion is deemed reasonable." Reasonable? Bribery, too, seems to have been part of its business strategy, right under the nose of the OCC of Otting.
Before 2 pm on May 24 Inner City Press in writing asked Otting's OCC: "This is a Press question for the OCC, from Inner City Press... Please confirm that The Federal Savings Bank is subject to HMDA, and/or if it is below a threshold, as I can find no data in its name on FFIEC.gov. Also, please today provide as an OCC response to the Press this OCC-regulated bank's CRA public file and other information in the OCC's possession concerning the bank's CRA and fair lending performance. Is it normal for a bank not to mention these things on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC? Please explain what steps the OCC is taking beyond Stephen Calk no longer being the CEO. What about his brother?"
More than three hours later, even to the questions at the end, the OCC had only provided this: "We are reviewing your questions, but we may not be able to respond by your deadline. Regards, Stephanie Stephanie Collins Manager, Media Relations Public Affairs Operations Office of the Comptroller of the Currency." This is the same OCC which has delayed FOR MONTHS providing basic information about a merger it has now already rubber stamped.
On the morning of May 28 Inner City Press received from the OCC a statement that The Federal Savings Banks is subject to HMDA - how they are listed in the HMDA database remains a question - and this: "Question: Is it normal for a bank not to mention these things [CRA and HMDA] on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC? [OCC answer:] This question is best directed to the bank."
So wait: Otting's OCC leaves it entirely up to the banks it ostensibly regulates whether to mention on their website and presumably branches CRA, HMDA or even the OCC where consumers could complain? We'll have more on this.
Stephen Calk was quoted, at least in 2012, opposing regulation: "As Mr. Stephen Calk writes in the September 7, 2012 edition of Origination News: “Basel III is designed to level the playing field among major banking institutions that operate internationally. Force-feeding these same rules to community banks in the United States is unnecessary and in fact counter-productive, particularly in the current economic environment.” Basel III is one thing. But no Community Reinvestment Act?
The Federal Savings Bank lists locations - and bankers - in Arizona - Scottsdale California - Irvine Colorado - Fort Collins Delaware - Selbyville Florida - Sarasota Illinois - Chicago Illinois - Lake Forest Illinois - Oak Brook Illinois - Park Ridge Indiana - Bloomington Indiana - Indianapolis Kansas - Overland Park Louisiana - Laplace Maryland - Annapolis Maryland - Timonium CD Massachusetts - Lawrence New Jersey - Hackensack New Jersey - Lakewood New York - Brooklyn New York - Melville New York - New York New York - Queens North Carolina - Raleigh Ohio - Columbus Rhode Island - South Kingstown Tennessee - Nashville Virginia - Alexandria Virginia - Fredericksburg Virginia - Newport News Virginia - Richmond Virginia - Vienna Virginia - Warrenton... We'll have more on this.
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