Inner City Reporter's Bank Beat: Mergers, Community Reinvestment Act, Antitrust, Revolving Doors

SDNY Judge Berman Denies Halkbank Special Appearance Noting 2d Circuit Logic on Fugitives

SDNY COURTHOUSE, Dec 5 – Turkey's Halkbank was indicted for Iran sanctions violations and money laundering on October 15 in the U.S. District Court for the Southern District of New York. On October 21, Turkey named convicted former Halkbank executive Hakan Atilla as the new managing director of Borsa Istanbul.

On December 5 SDNY Judge Richard M. Berman issued a detailed order denying the application by King & Spalding to make a "special appearance" in this criminal case. Judge Berman last month in his courtroom asked if there is any Second Circuit Court of Appeals precedent. On December 5 he wrote and ruled:

"The Second Circuit recognizes that a defendant may become a fugitive when, “having learned of charges while legally outside the jurisdiction, [the defendant] ‘constructively flees’ by deciding not to return.” See United States v. Catino, 735 F.2d 718, 722 (2d Cir. 1984); see also United States v. Blanco, 861 F.2d 773, 779 (2d Cir. 1988) (“A person can be said to be a fugitive when, while abroad, they learn that they are under indictment and make no effort to return to the United States to face charges.”). It appears to the Court that this is what Halkbank – which is an important institution in Turkey – has done so far in this case. “The primary purpose of the fugitive disentitlement doctrine—promoting mutuality of litigation—is served both when a defendant flees the United States and when he chooses to remain outside the United States.” Miller, 166 F. Supp. 3d at 348; see also Martirossian, 917 F.3d at 890 (where the Court confirmed that “a defendant need not be Case 1:15-cr-00867-RMB Document 581 Filed 12/05/19 Page 26 of 27 27 present in and leave a jurisdiction to become a fugitive; the mere refusal to report for prosecution can constitute constructive flight”). Halkbank has failed to appear following the service of two summonses, with full knowledge and notice of the charges in the Indictment and of the related Atilla and Zarrab cases. See pp. 3–5 above. Halkbank has also been represented by U.S. legal counsel, Mr. Hruska of King & Spaulding LLP, for at least two years in connection with the U.S. criminal investigation of Halkbank’s alleged Iran sanctions evasion. See Gov. Letter, dated Nov. 4, 2019, at 1.

And, this Court has found that “Halkbank has willfully and knowingly disobeyed the Court’s order in the First Summons to appear at the First Conference.” Order, dated Oct. 23, 2019, at 3. The fugitive disentitlement doctrine exists to encourage compliance with the law and to protect against entities that “‘attempt to invoke from a safe distance only so much of a United States court’s jurisdiction as might secure . . . a dismissal while carefully shielding [itself] from the possibility of a penal sanction.’” Hayes, 118 F. Supp. 3d at 625–26 (brackets omitted) (quoting Collazos v. United States, 368 F.3d 190, 200 (2d Cir. 2004)); see also Niemi v. Lasshofer, 728 F.3d 1252, 1255 (10th Cir. 2013).

IV. Conclusion & Order For the reasons stated above, the Court denies Halkbank’s application, dated November 19, 2019, to make a special appearance."

Back on November 26 the US Attorney office opposed the special appearance, noting "Halkbank participates in a U.S. Department of Agriculture program that provides guaranteed financing for certain buyers of U.S. agricultural exports. In order to shield its access to these essential U.S. financial markets and facilities, Halkbank went to extraordinary lengths to conceal the scheme from Treasury officials. Because of Halkbank’s relationships with the Central Bank of Iran, NIOC, and other Iranian government and private entities, sanctions against the Government of Iran had particular significance for Halkbank and Treasury believed Halkbank was at particular risk of Iranian sanctions-evasion efforts. Accordingly, Treasury officials maintained continuous and in-depth communications with Halkbank’s top executives. These included in-person meetings held in Treasury’s Washington, D.C. offices and Halkbank’s Turkey offices; telephone calls between Halkbank executives in Turkey and Treasury officials in the United States; and letter and email correspondence." We'll have more on this.

King & Spalding's Andrew C. Hruska wanted to file by ECF without making a notice of appearance. Judge Berman said he believes a notice of appearance is required, and would not give legal advise on what should be written on it. King and Spalding said they will file on paper, presumably meaning their briefing.

After OneCoin Trial Tweets Venezuela Launder Links of Dilkinska Exposed By Inner City Press

SDNY COURTHOUSE, Nov 27 – As Inner City Press covered the OneCoin trial this month, a number of names of indicted co-conspirators emerged on which we are now following up.

One of them was Amer Abdulaziz Salman, see below. Another was and is Irina Dilkinska, who worked closely on OneCoin money laundering with detained and cooperating Konstantin Ignatov and now-convicted Mark Scott.

Today Inner City Press launches a series into another branch of OneCoin's laundering, perhaps not surprisingly with Venenzuela's PDVSA oil company which Inner City Press has separately been reporting on in the SDNY courthouse, here, and at the UN or at least in front of the $15 million mansion of involved UNSG Antonio Guterres while he bans the Press from the UN.

It starts with a contract between Bulgaria based ALECO and H&H Ca, registered to Ruja Ignatova's then right hand woman Irina Dilkinska. PDVSA lists the contract, for oil wells in Maracaibo. Even then it was noted that ALECO was registered in the country of origin, but it does not have physical offices, it is only a website so it is presumed to be a "briefcase company," a term applicable to many of OneCoin's money laundering schemes.

H&H CA ran afoul of even Venezuelan law: it said it was based in and working from the residential complex Villas Delicias, but the nation's contractor chamber states that companies must own their physical space. H&H CA had capital of 10 million Bolivars, with which it could not cover the investment established in the contracts with PDVSA. It was another OneCoin special, h/t Brazen Capitalist, now defunct but being followed up on by Inner City Press even as it pursues its FOIA request to the US Attorney's Office press office to stop withholding documents provided in other cases like those of 6ix9ine and Honduras. Other names in the H&H Ca / Venezuela web, laying out a marker for purpose of further crowdsourcing: Boris Hernández Vidal and and Michael Hernández Vidal, and ICOPVE CA. Watch this site. More on Patreon here.

As Inner City Press also exclusively reported on November 6, surprise cooperating witness Konstantin Ignatov brought up Amer Abdulaziz during his testimony, live-tweeted @InnerCityPress, and see here.

On November 24 those tweets were used without any credit in a derivative article by the Racing Post's Peter Scargill - apparently dodginess pervades this part of the industry.

Inner City Press has been contacted from Dubai of Sheikh Mohammed bin Rashid al Maktoum, from Amer Abdulaziz's native Bahrain and elsewhere by whistleblowers in the horse racing industry, with extensive information about Amer Abdulaziz's previous schemes and sudden windfall with OneCoin money.

In OneCoin Trial Amer Abdulaziz Named As Money Launderer Who Stole 100M Euro Still Horsing Around

SDNY COURTHOUSE, Nov 23 – As Inner City Press covered the OneCoin trial this month, a number of names of indicted co-conspirators emerged on which we will now follow up.

As Inner City Press exclusively reported on November 6, surprise cooperating witness Konstantin Ignatov brought up Amer Abdulaziz during his testimony, live-tweeted @InnerCityPress:

After a sidebar discussion, the Assistant US Attorney said "We'll come back to Mr. Aziz who stole at least 100 million Euros from OneCoin.

So in this US Federal trial, under oath and not contradicted by any of the cross-examination, Amer Abdulaziz was named as a launderer of money from criminal activity, who went beyond that and stole $100 million Euro from OneCoin and Ruja.

Meanwhile, through his Phoenix fund, Amer Abdulaziz has been buying up thoroughbred horses, but industry participants tell Inner City Press, not selling them. "It's the perfect front for money laundering," one of them told Inner City Press on condition of anonymity.

During the trial, Inner City Press tweeted its surprise the Amer Abdulaziz was, unlike Ruja Ignatova, living in plain sight. It has continued: he has re-tweeted as recently as November 20.

In OneCoin Trial BNY Mellon Describes Mark Scott Cayman Islands Business After David Pike Arrested

SDNY COURTHOUSE, Nov 15 – After OneCoin's Konstantin Ignatov got a stay of the civil case against him, his criminal case was said to have been kicked down the road for at least another two months.

It was a productive two months, at least for the U.S. Attorney's Office for the Southern District of New York.

Now Inner City Press can report that Mark Scott associate David R. Pike was arrested on OneCoin charges and quietly presented in and bailed by the SDNY Magistrate Court on September 12, 2019 by Magistrate Judge James L. Cott, based on a complaint signed sealed back on August 29 by this week's Magistrate Judge Katharine H. Parker.

Since then Special AUSA Julieta V. Lozano has asked for continuances, during the Scott trial, to figure out what to do with Pike afterward. Inner City Pres, cover this closely, will have more. More on Patreon here.

On November 15, on which the government had said it might rest its case, AUSA Christopher Demase questioned a witness from BNY Mellon about irregularities it found in Mark Scott's Fenero Funds' business with DMS Bank in Cayman Islands.

The questioning established the FDIC insurance, an element in bank fraud charges, applies not only to BNY Mellon but also other involved banks including TD Bank, JPMorgan Chase, HSBC and Northern Trust. The implications of the evidence in the case for these banks is not yet clear. More on Patreon here.

Near midnight on November 14 defendant Mark Scott's lawyer Arlo Devlin-Brown wrote to SDNY Judge Edgardo Ramos urging admission into evidence of two emails involving Scott.

Each email, it is argued, undermine the credibility of Konstantin Ignatov's testimony that in Ruja Ignatova's July 20, 2016 meet with Scott, Irina Dilkinska was present.

In the first, Dilkinska tell Scott she will be traveling that week. In the second she says, in essence, "Me too" - that she too is traveling.

By footnote, Devlin-Brown implied that Konstantin Ignatov embellished what he initially told the prosecutors, from that Ruja asked him to leave her meeting with Scott to that she instructed him, as her personal assistant, to make all OneCoin staff other than Dilkinska leave OneCoin's Sophia building during the meeting.

As of 2:30 am before the November 15 trial day starts at 9:30, Judge Ramos had not ruled on the request. But it is questionable if the two proffered emails, even if admitted, would undermine the rest of Konstantin Ignatov's extensive cooperating testimony, or the other evidence entered about Mark Scott's guilty knowledge. More on Patreon here.

On November 13 the prosecution and the defense both questioned the deputy Chief Operating Officer of Locke Lord, the law firm Mark Scott worked at from June 2015 through September 2016. Thread here.

E-mails were shown in which OneCoin's Ruja Ignatova told Scott, "I have some cash with me. About 220K GBP. Can you store it for me in London?" Other exhibits concerned a bank in Zimbabwe, a penthouse in London, and funds put into and quickly taken out of the law firm's escrow account.

There is also in evidence an e-mail from the defendant Mark Scott to now-cooperating witness Konstantin Ignatov, as his sister Ruja's personal assistant, stating that "I would prefer not meeting in Sophia as I don't want too many travels there on my flight list." More on Patreon here.

On November 12 Inner City Press obtained and put online here, on Scribd, Konstantin Ignatov's plea agreement, including "On the understandings specified below, the Office of the United States Attorney for the Southern District of New York (“this Office”) will accept a guilty plea from Konstantin Ignatov (the “defendant”) to the above-referenced four-count Superseding Information (the “Information")...

If the defendant fully complies with the understandings specified in this Agreement, he will not be further prosecuted criminally by this Office for any crimes, except for criminal tax violations, related to his participation in: (1) an international cryptocurrency fraud scheme known as “OneCoin” (the “OneCoin Scheme"), from in or about 2016, up to and including in or about 2019, as charged in Counts One and Two of the Information; (2) a conspiracy to defraud banks and other financial institutions worldwide by causing them to transfer proceeds of the OneCoin Scheme by misrepresenting and omitting material facts to those banks and financial institutions, from in or about 2016, up to and including in or about 2019, as charged in Count Four of the Information; and (3) a conspiracy to launder criminal proceeds derived from the OneCoin Scheme, and to transfer funds internationally to promote the OneCoin Scheme, from in or about 2016, up to and including in or about 2019, as charged in Count Three of the Information; to the extent that he has disclosed such participation to this Office as of the date of this Agreement.

It is understood that Ignatov's truthful cooperation with this Office is likely to reveal activities of individuals who might use violence, force, and intimidation against Ignatov, his family, and loved ones. Should Ignatov's cooperation present a significant risk of physical harm, this Office, upon the written request of Ignatov, will take steps that it determines to be reasonable and necessary to attempt to ensure his safety and that of his family and loved ones.

These steps may include application to the Witness Security Program of the United States Marshals Service, whereby Ignatov, his family, and loved ones, if approved, could be relocated under a new identity...

This Office will, however, bring the cooperation of the defendant to the attention of other prosecuting offices, if requested by him. It is understood that the sentence to be imposed upon the defendant is within the sole discretion of the Court.

This Office cannot, and does not, make any promise or representation as to what sentence the defendant will receive, and will not recommend any specific sentence to the Court. However, this Office will inform the Probation Office and the Court of (a) this Agreement; (b) the nature and extent of the defendant's activities with respect to this case and all other activities of the defendant which this Office deems relevant to sentencing; and (c) the nature and extent of the defendant's cooperation with this Office. In so doing, this Office may use any information it deems relevant, including information provided by the defendant both prior to and subsequent to the signing of this Agreement.

In addition, if this Office determines that the defendant has provided substantial assistance in an investigation or prosecution, and if he has fully complied with the understandings specified in this Agreement, this Office will file a motion, pursuant to Section 5K1.1 of the Sentencing Guidelines, requesting the Court to sentence the defendant in light of the factors set forth in Section 5K1.1(a)(1)-(5).

It is understood that, even if such a motion is filed, the sentence to be imposed on the defendant remains within the sole discretion of the Court. Moreover, nothing in this Agreement limits this Office's right to present any facts and make any arguments relevant to sentencing to the Probation Office and the Court, or to take any position on post-sentencing motions. The defendant hereby consents to such adjournments of his sentence as may be requested by this Office.

It is understood that, should this Office determine either that the defendant has not provided substantial assistance in an investigation or prosecution, or that the defendant has violated any provision of this Agreement, such a determination will release this Office from any obligation to file a motion pursuant to Section 5K1.1 of the Sentencing Guidelines, but will not entitle the defendant to withdraw his guilty plea once it has been entered.

It is understood that, should this Office determine, subsequent to the filing of a motion pursuant to Section 5K1.1 of the Sentencing Guidelines and/or 18 U.S.C. Sec. 3553(e), that the defendant has violated any provision of this Agreement, this Office shall have the right to withdraw such motion."

On November 7 in the case against accused OneCoin money launderer Mark Scott Konstantin Ignatov for the third and last day took the witness stand, in prison blues with his neck and arm tattoos, as a cooperating witness.

Scott's lawyer Arlo Devlin-Brown zeroed in on Konstantin Ignatov's guilty plea to bank fraud, asking him to name which FDIC insured bank he had provided false information to.

Inner City Press has asked the US Attorney's Office when it was that Konstantin Ignatov pled guilty, since he gave no indication of such a plea in a September 6 status conference that Inner City Press covered, and has asked if it was before Judge Ramos, and if it was sealed.

The government's next witness was the anti money laundering expert Donald Semesky. Inner City Press will continue to cover the trial. November 7 thread here. More on Patreon here.

On November 6 Konstantin Ignatov testified that the bodyguards to took Ruja on her final public trip told him she was met by "Russian guys," and that Ruja had told him that in Russia she knew a rich and powerful person. More on Patreon, here.

In OneCoin Trial Konstantin Ignatov Pled To Bank Fraud So Defense Asks Which FDIC Bank

SDNY COURTHOUSE, Nov 7 – After OneCoin's Konstantin Ignatov got a stay of the civil case against him, his criminal case was said to have been kicked down the road for at least another two months.

Scott's lawyer Arlo Devlin-Brown zeroed in on Konstantin Ignatov's guilty plea to bank fraud, asking him to name which FDIC insured bank he had provided false information to.

The government's next witness was the anti money laundering expert Donald Semesky. Inner City Press will continue to cover the trial. November 7 thread here. More on Patreon here.

November 6 came to an end in the trial with Scott's lawyer Arlo Devlin-Brown cross examining Konstantin in detail about his one and only in person meeting with defendant Mark Scott, when he visited OneCoin's headquarters in Sophia, Bulgaria. Inner City Press will have more on this as the trial continues on November 7.

Back on November 4 before jury selection, in oral arguments Scott's lawyers asked Judge Ramos to not allow into evidence information and chats found on a Samsung Galaxy smart phone for which Mark Scott paid but was used by his wife, with a Russian keyboard. Judge Ramos declined to suppress it.

It also emerged that still-missing Ruja Ignatova rented space underneath cooperator Gilbert Armenta to listen in on him. More on that and on jury selection (which included questions on multi level marketing) is on Patreon, here.

On Monday, October 28 in a two hour pre-trial conference covered by Inner City Press, Judge Ramos said that the government can show photos of Scott with a yacht and cars that he purchased.

In OneCoin Trial Scott Again Urges Statement In About Pyramid Scheme Concern Trial in 2 Days

SDNY COURTHOUSE, Nov 2 – After OneCoin's Konstantin Ignatov got a stay of the civil case against him, then his criminal case was kicked down the road for at least another two months. Now the can looms closer, on November 4 before Judge Edgardo Ramos in the U.S. District Court for the Southern District of New York. Inner City Press will be live-tweeting it.

On Sunday, October 27 Mark Scott's lawyers asked Judge Ramos to allow in more of Scott's post arrest statement, a request that for example in the recent Honduras narco-trial the defense left until mid-trial but still got granted in five instances. More on Patreon here and here.

On Monday, October 28 in a two hour pre-trial conference covered by Inner City Press, Judge Ramos rejected most of the proposed supplements: five out of seven in full, and most of the other two. He also said that the government can show photos of Scott with a yacht and cars that he purchased.

Late on October 31 Scott's lawyer Arlo Devlin-Brown of Covington tried again, with a request for reconsideration of a particular statement: "We write on behalf of Mark Scott, the defendant, to respectfully request that the Court reconsider its ruling from October 28, 2019, at least with respect to a single extremely problematic portion of the Government’s use of Mr. Scott’s post-arrest statement. The exchange is listed below, with the language the Government sought and obtained Court approval to remove in red and struck out. A copy of both versions is included on the CD filed directly with the Court as Exhibit A, with Exhibit A-1 the full statement and A-2 the redacted version. [Here, Inner City Press uses brackets]

8:18:14 Agent Eckel Ok. So you never heard of OneCoin besides reading about it in the press?

8:18:21 Scott No I heard about OneCoin. [That’s why, when I, at the beginning I like I said when I knew the relationship between her and OneCoin is when I basically asked for that opinion of which country or if at all any country OneCoin was illegal or, or, you know banned or whatever so then we wouldn’t do business with them.] You know there was rumors were going around, pyramid scheme and all that and we didn’t want to be involved with that.

"The central issue at trial will be whether or not Mr. Scott knew OneCoin was operating a criminal scheme. Agent Eckel asks Mr. Scott whether his knowledge of OneCoin is limited to the press. Mr. Scott replies in what is in actuality a single run-on sentence, though it is broken with periods in the Government’s draft transcript. Mr. Scott’s answer is quite clear, particularly on the audio as the words run together: he’d heard negative things about OneCoin and sought an opinion about OneCoin because he didn’t want to do business with any company operating a pyramid scheme."

But more than a business day later, on Saturday November 2 past 6 pm before the November 4 trial, there has been no reconsideration.

On the other hand Judge Ramos will not allow in the testimony of a so-called "attempted victim" who chose not to invest in OneCoin after thirty minutes of online research, and will not allow in evidence of the gun Scott was found with when arrested, using the word (too) "thuggish" in denying it.

Judge Ramos asked if the trial will go forward or if a pre trial resolution might still be reached. The government responded that it has made no plea offer. So it's on - and Inner City Press has arranged to live tweet the proceedings, which Judge Ramos said will be 9:30 to 2:30 Monday through Friday.

The government said the trial will take two to three weeks. There will be four alternate jurors. Jury selection is set for November 4. Inner City Press will be there - watch this site. And watch this Periscope video, for now. (Sorry it's 90 degrees off - working on that). More on Patreon here.

Defending BNP Bank Business With Genocidal Sudan Regime Cleary Gottlieb Uses Junior Associate

SDNY COURTHOUSE, Oct 24 – BNP Paribas bank has been sued for aiding and abetting genocide in Sudan.

On October 24 BNP's lawyers from Cleary Gottlieb including junior associate Katherine Lynch argued that the bank owed and owes no duty to the people in Sudan.

District Judge Alison J. Nathan of the U.S. District Court for the Southern District of New York peppered Carmine D Boccuzzi and to a less degree Ms. Lynch with questions about their position, along them and plaintiffs' lawyers to both go over time. Her rule to promote younger lawyers is laudable but cannot drown out the cries of those burned alive in Darfur amid BNP's cynicism in Switzerland and yes, New York.

As Inner City Press / Fair Finance Watch has shown to regulators, BNP Paribas in the United States has a disparate lending record. But violating sanction to lend to the Khartoum regime accused of genocide is something else.

As Spain Minister Nadia Calviño Talks 5G Inner City Press Asks of Huawei and Narco Hugo Carvajal

SDNY COURT / NYC, Oct 16 – When Spain's Economy Minister Nadia Calviño took questions in New York on October 16, on her way to Washington for the IMF - World Bank annual meetings, Inner City Press went and asked her two questions. On the question of Spain's refusal to extradite alleged narco money launder Hugo Carvajal -- Inner City Press has been covering the Honduras narco-politics trial in the SDNY courthouse -- she said "I will not make any remarks on an individual situation, of course." Video here, from Minute 44:25.

But in her opening dialogue with Rob Cox of BreakingViews, Minister Calviño had spoken of Spain's progress with 5G. Inner City Press asked her about Huawei's role and whether US sanctions against the company have had any economic impact.

In OneCoin Case Ignatova Communications Deemed Admissible Under Crime Fraud Exception

SDNY COURTHOUSE, Oct 9 – After OneCoin's Konstantin Ignatov got a stay of the civil case against him, then his criminal case was kicked down the road for at least another two months. Now on October 9 from SDNY Judge Ramos, this: "ORDER as to Ruja Ignatova. It is hereby ORDERED that Any attorney-client privilege held by the Affected Parties in connection with the communications described below (collectively, the Subject Communications) is deemed waived: Communications between OneCoin Ltd., OnePayments Ltd., OneNetwork Services Ltd., OneAcademy, OneLife, and RavenR Capital Limited, and attorneys for those entities; and Communications between Ruja Ignatova, Frank Ricketts, Manon Hubenthal, Irina Dilkinska, International Marketing Services GmBH, International Marketing Services Singapore Pte, International Marketing Strategies Ltd., and B&N Consult EOOD, and attorneys for those individuals and entities, regarding OneCoin-related financial transactions and the continued operation of the OneCoin scheme. The Subject Communications fall within crime-fraud exception to the attorney-client privilege, and are therefore non-privileged not withstanding the waiver described above. (Signed by Judge Edgardo Ramos on 10/9/2019)." Inner City Press will continue to cover this case.

On September 6 Inner City Press was rushing to the SDNY courthouse for a 10 am conference in the case when the subway simply stopped for 15 minute: "unruly passenger," they called it. Once in Foley Square Inner City Press ran into Ignatov's lawyer who politely answered that the short conference was already over, with the case delayed two months due to discovery and the civil case.

Deutsche Bank Petition To Undo Mexican Injunction Rejected Then Resurrected in SDNY

SDNY COURTHOUSE, Oct 4 – It's not over until it's over. The adage from baseball, and opera, was on display on October 4 in an oral argument between lawyers for Deutshce Bank Mexico Holdings S.a.r.l and Accendo Banco, S.A. before Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York.

Accendo Banco had obtained a Mexican court injuction against Deutsche Bank selling its Mexican assets to anyone else; there is an ICC emergency arbitration set for argument next Tuesday with decision scheduled for October 14.

Judge Hellerstein after hearing arguments from Simpson Thacher's Jonathan K. Youngblood for Deutshce Bank, then Quinn Emanuel's Marc Greenwald for Accendo, orally denied Deutsche Bank's petition to undo the Mexican court's injunction, saying it wasn't his place to get involved in another sovereign country's law. But then after some apparently post-decision arguments from Deutsche Bank lawyer Youngblood, Judge Hellerstein abruptly left the bench and went into his robing room with his law clerks. Emerging fifteen minutes later, Judge Hellerstein said he would reserve decision and issue a written ruling later. The he asked the parties if they both wanted him to not act until after the arbitrator does.

Youngblood consulted with his client, four Deutshce Bank officials in the gallery otherwise empty but for Inner City Press, then returned with essentially an offer for Accendo or its counsel.

Banks Accused Of Fixing Bond Prices Dispute Drug Conspiracy Analogy Before Judge Rakoff

SDNY COURTHOUSE, Sept 27 – Plaintiffs including Pennsylvania Treasurer Joseph M. Torsella are suing more than a dozen banks for allegedly fixing the price of housing bonds.

On September 27 the courtroom of U.S. District Court for the Southern District of New York Judge Jed S. Rakoff was again overflowing with bank lawyers and, standing in a corner by the window next to the jury room, Inner City Press.

Since July 23, when there had been a chair, little had changed. The plaintiffs amended their complaint with 19 more chats. Skadden Arps for JPMorgan Chase argued that two of the three theories of liability should be thrown out. While the plaintiffs' lawyer cited the "law of the case," Judge Rakoff reminded her of a judge's right to change his mind, "since we are infallible." There was laughter from the suited throng in the courtroom.

Interestingly, Judge Rakoff brought up drug conspiracy law by analogy. The Skadden Arps attorney said he is less well versed in that type of conspiracy - which causes more harm to society, we note, is an open question - but that the scheming in this case only involved new issues, not off-the-run bonds.

Judge Rakoff to his credit disputed the total disconnection of Wall Street and drug conspiracy jurisprudence, saying that conspiracy is a subset of agency theory and that the law is a seamless web. Now if only there were the same focus on Wall Street executives as, only this week, Bronxites understating their income to keep their Section 8 apartment, we'd be getting somewhere. We'll continue to cover his and other cases before Judge Rakoff and elsewhere.

Last time Goldman Sachs' lawyer from Sullivan & Cromwell Richard C. Pepperman II urged Judge Rakoff to adopt the "rule of reason" standard, and repeatedly said that he would bet his daughter's college tuition on this or that proposition. She's going to have to take out so many loans, Judge Rakoff parried back.

"If the right candidate wins in 2020, the loans will all be forgiven," Pepperman as progressive, faux or not, replied.

For Bank Fraud Messiah Ortiz Gets A Year And A Day From SDNY Judge Broderick As Boricua College Cited

SDNY COURTHOUSE, Sept 16 – Messiah Ortiz pled guilty to bank fraud and on September 16 got a year and a year from U.S. District Court for the Southern District of New York Judge Vernon S. Broderick. This runs concurrent with a two year prison bid for New York State charges involving a gun. Judge Broderick at the September 16 sentencing in his temporary courtroom 905 was very concerned that the sentence and the supervision be concurrent. Messiah Ortiz's lawyer Dawn Florio, seen later in the day at the opening arguments in the trial involving Daniel Hernandez a/k/a Tekashi #6ix9ine whom she has also represented, ably argued that Messiah Ortiz has taken classes at Boricua College. His girlfriend / fiance was in the courtroom. Judge Broderick said he hopes he never sees him again.

On his way in at 2:37 pm, Inner City Press commented, New digs. Judge Broderick amiably responded, It's temporary, and also, Takes some getting used it. Yes, it does.

In SDNY Iranian Banker Sadr Wants Ankle Bracelet Off and New Emails Excluded After Curio

SDNY COURTHOUSE, Sept 9 – Iranian banker Ali Sadr Hashemi Nejad, charged with money laundering and violating US sanctions including through a Venezuelan infrastructure project, wants his curfew extended to midnight and his GPS ankle bracelet removed.

The requests were made by Sadr's lawyer Reid Weingarten of Steptoe & Johnson after a scripted "Curcio hearing" on September 9 before U.S. District Court for the Southern District of New York Judge Alison J. Nathan. While adding prior Steptoe clients Citibank, UBS and Commerzbank to Steptoe's script, Nathan found the Sadr knowingly waived all conflicts of interest.

Then a surprise: Assistant US Attorney Michael K. Krouse acknowledged that yet to be turned over are e-mails from seven custodian other than Sadr, somehow lost in the cracks of the case. Judge Nathan gave Krouse a week to provide a status update, with full production to be completed in two weeks and a response by Steptoe a week after that. They will be seeking to exclude these e-mails.

Reverse Mortgage Fraud Defendant Hild Given Nationwide Travel Pass Unlike Others in SDNY

SDNY COURTHOUSE, Sept 5 – Michael Hild was arraigned for fraud on Live Well Financial's reverse mortgages and home equipy conversion mortgages by U.S. District Court for the Southern District of New York Judge Ronnie Abrams on September 5. It was a routine proceeding except that this alleged white collar criminal was allowed to travel nationwide, seemingly automatically, while other defendants in the SDNY are restricted to the Southern and Eastern Districts of New York.

The same "travel nationwide" pass was given, for example, the banking fraudster and Manafort lender Stephen Calk. Why this two tier system of justice?

Jammal Trust Bank of Lebanon Is Hit With US Sanctions And Pompeo Speaks After Earlier Lawsuit in EDNY

SDNY & UN GATE, August 29 – Back on January 8 while reporting from the U.S. District Court for the Southern District of New York Inner City Press noted that Riad Salameh, Governor of the Banque Centrale du Liban (BDL), said that a civil lawsuit by approximately 1,200 plaintiffs has been brought against 11 Lebanese banks for assisting Hezbollah. The plaintiffs, all US citizens, filed the lawsuit in court in New York. The defendants in the lawsuit include the following banks, including now sanctioned Jammal Trust Bank and Bank Audi 2. Bank of Beirut 3. Bank of Beirut And The Arab Countries (BBAC) 4. Banque Libano-Française (BLF) 5. BLOM Bank 6. Byblos Bank 7. Fransabank... 9. Lebanon And Gulf Bank (LGB) 10. Middle East Africa Bank (MEAB) 11. SGBL.

Now on August 29 the US has hit Jammal Trust Bank with sanctions over alleged support of Hezbollah, senior administration official said on a White House conference call. One of the officials said that Jammal Trust Bank knowingly provided support to Hezbollah. "It's role as Hezbollah's bank of choice is prominent... Jammal Trust has knowingly provided financial services to Hezbollah's financial counsel and U.S. entities affiliated with Hezbollah."

After the call, US Secretary of State Mike Pompeo said, "The U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned today Lebanon-based Jammal Trust Bank SAL (Jammal Trust) for supporting Hizballah’s illicit financial and banking activities. Jammal Trust has a longstanding relationship with a key Hizballah financial entity and provides financial services to the Martyrs Foundation and companies controlled by Hizballah’s Executive Council. Jammal Trust’s misconduct undermines the integrity of the Lebanese financial system. Today’s designation reflects our determination to counter Hizballah’s terrorist and illicit activities in Lebanon. We will continue to target individuals and entities involved in financing and providing support to Hizballah while working closely with the Central Bank of Lebanon and other Lebanese institutions which work to preserve the integrity and stability of Lebanon’s banking system." We'll have more on this, including if and how it impacts the civil case.

Bank of China Asks To Appeal Being Accused Of Terrorism Finance With Iran and Hamas

FEDERAL COURTHOUSE, August 19 – Bank of China is being sued for cooperating with and wiring money for Hamas and Iran, resulting in terrorist attack and death. The complaint states that the Chinese government was informed but the wiring continued. Now Bank of China has hired the Dorsey lawfirm which argued on July 19 that it is all OK, to US District Court for the Southern District of New York Judge Katherine Polk Failla.

In a July 19 oral argument at which Inner City Press was the only media, Bank of China through counsel argued that there is no way they can control or be responsible for whom they move money for. Then they argued that the most they could do is file a Suspicious Activity Report or SAR. But did they do so, for the wiring of money by S.Z.R. Al-Shurafa through two accounts at its branch in Guangzhou? This was not answered.

Now on August 19 Bank of China's lawyer Lanier Saperstein at the Dorsey firm has asked Judge Failla to extend its time to propose discovery structure, saying that it wants reconsideration or the right to appeal her earlier decision. Bank of China cites "bank confidentiality under PRC law, the AML privilege under PRC law, state secrets under PRC law" - but of course Chinese law would offer such a privilege, as for example CEFC China Energy, for the government, offered bribes at and through the UN. We'll have more on this.

While China cites terrorist as the justification for locking up a million Uighurs in Xinjiang, its desire to put deals in the Middle East and Persia with oil producing states produces incongruous results. But will this case every get to trial? Not if the Dorsey firm, and China, have anything to say about it. More on Patreon here.

Now in August, Judge Failla has denied Bank of China's motion and directed that discovery go forward: " Defendant’s motion for judgement on the pleadings is DENIED. The Clerk of Court is directed to terminate the motion at Docket Entry 36. On or before August 30, 2019, the parties shall submit separate letters outlining how Plaintiffs and Defendant respectively believe discovery should be structured." Watch this site.

The Bangladeshi Central Bank which was hacked for $81 million in February 2016, on January 31 sued in the SDNY. The first pre-trial conference in the case was held on May 21; now on July 19 Bangladesh Bank has opposed the defendant's motions to dismiss for forum non conveniens and lack of subject matter jurisdiction.

Bangladesh Bank writes that "[t]he robbery was in New York City, not a foreign country, attacking a decades-old account in the New York. It involved the New York Fed, perhaps the most critically important bank in New York City. The conspirators also needed New York-based correspondence accounts to accomplish the theft." In its other brief it adds, "Since 1973, the Bank has held its foreign reserves at the New York Fed in order to conduct Bangladesh’s international transactions in U.S. dollars. Id. ¶¶ 37-40. Today, the Bank conducts 85% of its international transactions in the U.S. dollar, through its New York Fed account, that holds a daily average of $1.5 billion."

Back in March Inner City Press submitted a request under the US Freedom of Information Act to the US Federal Reserve about its role in and action on the Bangladesh Bank heist. After four months of delay from the Fed, and an appeal by Inner City Press of their constructive denial, the Fed finally ruled on June 27 - releasing only one page, a two paragraph cover letter.

CIT Group Bid For Mutual of Omaha Echoes Its Fraudulently Promoted Deal For OneWest of Otting

August 13, Michigan: Level One Bancorp, Inc. and Ann Arbor Bancorp, Inc., announced today the signing of a definitive merger agreement...

August: Landmark Bank, Texas County’s largest banking organization, is proposes to be sold to Pine Bluff, Ark.-based Simmons First National Corp. Based in Columbia, Landmark Bank parent company, The Landrum Company, has more than $3 billion in assets and 39 locations in Missouri, Oklahoma and Texas. Simmons has $17.6 billion in assets and more than 200 locations in Arkansas, Colorado, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The deal is valued at $434 million in Simmons Bank stock...

August 12, Florida: Professional Holding Corp. and Marquis Bancorp, both of Coral Gables, jointly announced today the signing of a definitive agreement to merge in which Marquis Bank will combine with Professional Bank. Subject to shareholder and regulatory approvals, the combined banking institution will have approximately $1.6 billion in assets, making it the 12th largest community bank in Florida and the 4th largest in South Florida.

Kansas: Option Bank, headquartered in Osawatomie, Kansas, proposes to acquire Pony Express Community Bank...

August 12, Illinois credit unions: The boards of Schaumburg-based Andigo Credit Union and Consumers Credit Union, based in Gurnee, have already voted to attempt the merger. A combined organization would serve more than 156,000 members and have more than $2.1 billion in assets...