by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Feb 29 – As the third of four insider trading prosecutions announced on June 29, 2023 by the US Attorney for the Southern District of New York, Michael Shvartsman, Gerald Shvartsman, and Bruce Garelick were charged with making more than $22 million dollars in illegal profits by trading in securities of Digital World Acquisition Corporation based on MNPI about DWAC’s planned but not yet public business combination with a media company founded by former President Donald J. Trump.
The four prosecutions come a week after the conviction in SDNY of Brijesh Goel, formerly of Goldman Sachs. Goel testified on his own behalf in a trial covered by Inner City Press, which is also reporteding weekly on the SDNY prosecutors murky deal with Sam Bankman-Fried to agree to extradition from the Bahamas apparently in exchange for not seeking detention (unlike on Avi Eisenberg) and now with the China bribe charges severed or dropped.
GARELICK was given a seat on DWAC’s board of directors, which gave him access to valuable MNPI about DWAC’s plans to merge with Trump Media. After learning MNPI through his role on DWAC’s board, GARELICK provided updates to his alleged co-conspirators — which he called “intelligence” — about the status of the merger negotiations and the timing of a public merger announcement.
In violation of the non-disclosure agreements that they had signed, and in contravention of GARELICK’s duties and responsibilities as a board member, the defendants bought millions of dollars of DWAC securities on the open market before the news of the Trump Media business combination was public.
In addition to their own purchases, the defendants also passed DWAC’s confidential information to their friends on a trip to Las Vegas, to MICHAEL SHVARTSMAN’s neighbors, and to GERALD SHVARTSMAN’s employees at a furniture supply store.
On July 5, the case was assigned - wheeled out - to Judge Lewis J. Liman: "NOTICE OF HEARING as to Michael Shvartsman, Gerald Shvartsman, Bruce Garelick: An Arraignment and Initial Conference is scheduled for July 20, 2023 at 12:00 PM in Courtroom 15C, 500 Pearl Street, New York, NY 10007 before Judge Lewis J. Liman."
Inner City Press was there on July 20 and live tweeted, thread
Trial will be March 18, 2024.
On December 29 as part of omnibus pre-trial motions Shvartsman filed copies of DHS reports of investigation, including audio recordings of Shvartsman saying he would open an LLC in Belize which would buy assets... and ultimately provided funding for the 'Truth Social' media platform. It also names the agents who brought the arrested defendants to the Wilke D. Ferguson Jr. Federal Courthouse and the Marshals...
Late on January 12 the US filed papers including the CBP notes when Bruce Garelick returned from Cancun, "subject claims to have met girlfriend Deirdre Oshea on a dating app, he owns a home with his wife he is currently divorcing.. the deal came from Ramon Orlando."
On February 6, Garelick through counsel said he may call at the hearing, after hearing CBP Officer Gonzalez, FBI Special Agent Troaino who, he says, made a "false statement that the government did not know Garelick's passcode" - but will not question him about it.
On February 29, co-defendant Michael Shvartsman filed a motion seeking to move the two added money laundering / yacht purchase counts, and the forfeiture count, to the Southern District of Florida.
Inner City Press will continue to cover the case(s
This case is US v. Shvartsman, et al., 23-cr-307 (Liman)
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