“Prosecutors Expect More Arrests in Art-Fraud Scheme”

August 19, 2013

The New York Times on August 19, 2013 released the following:

By WILLIAM K. RASHBAUM

“Federal prosecutors handling the case against an obscure art dealer charged in one of the most audacious art frauds in recent memory told a judge on Monday that they expected more arrests in the continuing investigation. They also said they expected the case against the art dealer to be resolved soon.

The disclosures came at the arraignment of the dealer, Glafira Rosales, in United States District Court in Manhattan.

Ms. Rosales was arrested on money laundering and tax charges in connection with the scheme in May. She was arraigned Monday before Judge Katherine P. Failla on new charges contained in a superseding indictment that was handed up last week by a grand jury. She pleaded not guilty during the five-minute proceeding.

During the arraignment, Judge Failla asked one of the prosecutors, Jason P. Hernandez, an assistant United States attorney, if more arrests were expected.

“Yes,” he said.

Mr. Hernandez also said that the case against Ms. Rosales, which was the result of a lengthy F.B.I. investigation, was to be resolved in the coming weeks. He did not elaborate.

A lawyer for Ms. Rosales, Steven R. Kartagener, declined to comment on the new charges.

The charges issued last week revealed for the first time that all of the 63 phony art works at the heart of what prosecutors have described as a sweeping fraud scheme stretching over more than a decade were created by a single painter. The indictment identified him only as a painter who lives in Queens and said he had produced the canvases — purported to be by the hands of Modernist masters like Willem de Koonig, Jackson Pollock, Mark Rothko, Robert Motherwell and others — in his house and garage.

People briefed on the matter said he was Pei-Shen Qian, a struggling 73-year-old Chinese artist who came to the United States in 1981.

While he was paid a few thousand dollars for the canvases, they were later sold as works by Modernist masters for more than $80 million.

The indictment and other court papers said the painter who created the fake canvases was discovered selling his own art on the streets of Lower Manhattan in the early 1990s by Ms. Rosales’s boyfriend and business partner, an art dealer named Jose Carlos Bergantiños Diaz, who recruited him to make paintings in the style of celebrated Abstract Expressionists. The indictment does not name Mr. Bergantiños Diaz, but his identity is confirmed by other court records.

It is unclear whether Ms. Rosales has begun cooperating with the federal authorities since her arrest in May. But while the prosecutors handling her case initially argued then that she posed “a substantial flight risk” and that no bail conditions could assure her return to court, convincing a judge to detain her without bail, last week, after the new indictment was handed up, the prosecutors did not oppose her release on a $2.5 million bond.

Julie Bolcer, a spokeswoman for the office of Preet Bharara, the United States attorney in Manhattan, and an F.B.I. spokesman, James M. Margolin, declined to comment. Mr. Kartagener has refused to characterize his discussions with the prosecutors on the case, Mr. Hernandez and Daniel W. Levy.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Appeal in Insider Trading Case Centers on Wiretap

October 24, 2012

The New York Times on October 23, 2012 released the following:

“BY PETER LATTMAN

In March 2008, the Justice Department made an extraordinary request: It asked a judge for permission to record secretly the phone conversations of Raj Rajaratnam, a billionaire hedge fund manager.

The request, which was granted, was the first time the government had asked for a wiretap to investigate insider trading. Federal agents eavesdropped on Mr. Rajaratnam for nine months, leading to his indictment — along with charges against 22 others — and the biggest insider trading case in a generation.

On Thursday, lawyers for Mr. Rajaratnam, who is serving an 11-year prison term after being found guilty at trial, will ask a federal appeals court to reverse his conviction. They contend that the government improperly obtained a wiretap in violation of Mr. Rajaratnam’s constitutional privacy rights and federal laws governing electronic surveillance.

Such a ruling is considered a long shot, but a reversal would have broad implications. Not only would it upend Mr. Rajaratnam’s conviction but also affect the prosecution of Rajat K. Gupta, the former Goldman Sachs director who was convicted of leaking boardroom secrets to Mr. Rajaratnam. Mr. Gupta is scheduled to be sentenced on Wednesday.

A decision curbing the use of wiretaps would also affect the government’s ability to police Wall Street trading floors, as insider trading cases and other securities fraud crimes are notoriously difficult to build without direct evidence like incriminating telephone conversations.

“Wiretaps traditionally have been used in narcotics and organized crime cases,” said Harlan J. Protass, a criminal defense lawyer in New York who is not involved in the Rajaratnam case. “Their use today in insider trading investigations indicates that the government thinks there may be no bounds to the types of white-collar cases in which they can be used.”

More broadly, Mr. Rajaratnam’s appeal is being closely watched for its effect on the privacy protections of defendants regarding wiretap use. Three parties have filed “friend-of-the-court” briefs siding with Mr. Rajaratnam. Eight former federal judges warned that allowing the court’s ruling to stand “would pose a grave threat to the integrity of the warrant process.” A group of defense lawyers said that upholding the use of wiretaps in this case would “eviscerate the integrity of the criminal justice system.”

To safeguard privacy protections, federal law permits the government’s use of wiretaps only under narrowly prescribed conditions. Among the conditions are that a judge, before authorizing a wiretap, must find that conventional investigative techniques have been tried and failed. Mr. Rajaratnam’s lawyers said the government misled the judge who authorized the wiretap, Gerard E. Lynch, in this regard.

They say that the government omitted that the Securities and Exchange Commission had already been building its case against Mr. Rajaratnam for more than a year using typical investigative means like interviewing witnesses and reviewing trading records. Had the judge known about the S.E.C.’s investigation, he would not have allowed the government to use a wiretap, Mr. Rajaratnam’s lawyers argue.

Before Mr. Rajaratnam’s trial, the presiding judge, Richard J. Holwell, held a four-day hearing on the legality of the wiretaps. Judge Holwell criticized the government, calling its decision to leave out information about its more conventional investigation a “glaring omission” that demonstrated “a reckless disregard for the truth.”

Nevertheless, Judge Holwell refused to suppress the wiretaps, in part, he said, because they were necessary to uncover Mr. Rajartanam’s insider trading scheme. “It appears that the S.E.C., and by inference the criminal authorities, had hit a wall of sorts,” Judge Holwell wrote.

On appeal, Mr. Rajaratnam lawyers argued that the government’s lack of candor should not be tolerated. They described the government’s wiretap application as full of “misleading assertions” and “outright falsity” that made it impossible for Judge Lynch to do his job.

“The government’s self-chosen reckless disregard of the truth and of the critical role of independent judicial review breached that trust and desolated the warrant’s basis,” wrote Mr. Rajaratnam’s lawyers at the law firm Akin Gump Strauss Hauer & Feld.

In their brief to the appeals court, federal prosecutors dispute that they acted with a “reckless disregard for the truth.” Instead, they argue that omitting details of the S.E.C.’s investigation was at most “an innocent mistake rising to the level of negligence.” In addition, they said that the S.E.C.’s inquiry failed to yield sufficient evidence for a criminal case, necessitating the use of a wiretap.

Once Judge Lynch signed off on the wiretap application, the government’s investigation into Mr. Rajaratnam accelerated. The wiretapping of Mr. Rajaratnam’s phone, along with the subsequent recording of his supposed accomplices, yielded about 2,400 conversations. In many of them, Mr. Rajaratnam could be heard exchanging confidential information about technology stocks like Google and Advanced Micro Devices.

Three years ago this month, federal authorities arrested Mr. Rajaratnam and charged him with orchestrating a seven-year insider trading conspiracy. The sprawling case has produced 23 arrests of traders and tipsters, many of them caught swapping secrets with Mr. Rajaratnam about publicly traded companies.

Among the thousands of calls were four that implicated Mr. Gupta, a former head of the consulting firm McKinsey & Company who served as a director at Goldman Sachs and Procter & Gamble. On one call in July 2008, the only wiretapped conversation between the two men, Mr. Gupta freely shared Goldman’s confidential board discussions with Mr. Rajaratnam. On another, Mr. Rajaratnam told a colleague at his hedge fund, the Galleon Group, “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share.”

Those conversations set off an investigation of Mr. Gupta. He was arrested in October 2011 and charged with leaking boardroom secrets about Goldman and P.& G. to Mr. Rajaratnam. A jury convicted him in May after a monthlong trial.

On Wednesday at Federal District Court in Manhattan, Judge Jed S. Rakoff will sentence Mr. Gupta. Federal prosecutors are seeking a prison term of up to 10 years. Mr. Gupta’s lawyers have asked Judge Rakoff for a nonprison sentence of probation and community service. One proposal by the defense would have Mr. Gupta living in Rwanda and working on global health issues.

Regardless of his sentence, Mr. Gupta plans to appeal. And because prosecutors used wiretap evidence in his trial, Mr. Gupta would benefit from a reversal of Mr. Rajaratnam’s conviction.

Yet a reversal would not affect the convictions of the defendants in the conspiracy who have pleaded guilty. As part of their pleas, those defendants waived their rights to an appeal.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Man Offers Guilty Plea, Upending Terror Case

June 14, 2012

The New York Times on June 13, 2012 released the following:

“By BENJAMIN WEISER

A terrorism case in Manhattan that raised key questions about government interrogation tactics ended abruptly on Wednesday after the defendant pleaded guilty to conspiring to support a Somali terrorist group.

The defendant, an Eritrean man named Mohamed Ibrahim Ahmed, admitted in Federal District Court that he trained in a camp run by the Somali group, Al Shabab, in 2009. The case had been seen as a potential test of the Obama administration’s strategy of interrogating terrorism suspects for both intelligence and law enforcement purposes.

Indeed, the plea came as the judge, P. Kevin Castel, was poised to rule on a motion by Mr. Ahmed’s lawyers seeking suppression of statements he had made to the Federal Bureau of Investigation while he was in custody in Nigeria; his lawyers argued that the statements had not been voluntary and, thus, were inadmissible.

“I have in my hand a 60-page draft of the decision on the motion to suppress,” Judge Castel, holding up a thick document, said in court before accepting Mr. Ahmed’s plea. The judge did not reveal how he would have ruled on the motion, but said that the ruling itself would “now be suppressed.”

Mr. Ahmed, 38, who had lived in Sweden, was scheduled for trial on July 9. He had been accused of providing material support to a terrorist group, receiving training and bomb-making instruction in Shabab military camps in Somalia in 2009 and using a firearm in a crime of violence. The firearm count alone carried a mandatory minimum sentence of 30 years and a maximum sentence of life in prison. As a result of Mr. Ahmed’s plea — to two conspiracy counts — he faces a maximum sentence of 10 years when he is sentenced on Nov. 2, the judge said in court.

Mr. Ahmed’s lawyer, Sabrina Shroff, said after the proceeding, “I’m sure Mr. Ahmed would have liked to have challenged the actions of the United States.” But, she added, given the difference between a maximum 10-year sentence and what could have resulted from a guilty verdict, it would have been a “humongous risk” to go to trial.

Preet Bharara, the United States attorney in Manhattan, said Mr. Ahmed had “traveled a long way from his home in Sweden to Somalia, where he took up the cause of Al Shabab, a deadly terrorist organization and sworn enemy of the United States and its people.”

Mr. Ahmed told the judge that in Somalia, he contributed 2,000 euros to Al Shabab and trained in one of its military camps, knowing that the United States considered it a terrorist organization.

Mr. Ahmed was taken into custody by Nigeria in 2009 under suspicion of being an agent for Al Qaeda. He was later interrogated by separate groups of American officials, known colloquially as “dirty” and “clean” teams.

The first team questioned him for intelligence purposes, without advising him of his rights, prosecutors have said. About a week later, a second team, of F.B.I. agents, read him his rights, which he waived, and he began to make incriminating statements, the government says. An issue before the judge had been how separate the American officials kept the two interrogations.

A prosecutor, Benjamin Naftalis, told Judge Castel that had the case gone to trial, the evidence would have included Mr. Ahmed’s statements and testimony from cooperating witnesses. Prosecutors have said a former Shabab military commander has been cooperating; although he has not been identified, his description resembles that of Ahmed Abdulkadir Warsame, a Somali captured by the United States military last year and questioned aboard a naval vessel for about two months.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Detail by Detail, Gupta’s Lawyer Deconstructs Goldman Testimony

June 11, 2012

The New York Times on June 11, 2012 released the following:

“BY AZAM AHMED AND PETER LATTMAN

It had to have been among the least productive weeks of Lloyd C. Blankfein’s six-year tenure as the chief executive of Goldman Sachs.

For the better part of three days this week, Mr. Blankfein testified at the trial of Rajat K. Gupta, the former Goldman director who is facing charges that he leaked the bank’s secret boardroom discussions to the hedge fund manager Raj Rajaratnam from 2007 to 2009.

Though Mr. Blankfein appeared at ease in the courtroom, he had to clear his busy calendar. He could not monitor the volatility in the financial markets. He could not even check his BlackBerry, to which he has acknowledged something of an addiction. In short, he could not do his job.

Instead, Mr. Blankfein, who has spent most of his career in the fast-paced environment of a trading floor, had to sit still on the witness stand and respond to hours of often-monotonous questions. Lawyers on both sides had him discuss Goldman’s inner workings, from the contents of board meetings to his relationship with his lieutenants.

Goldman has played a starring role in the trial of Mr. Gupta, which wrapped up its third week in Federal District Court in Manhattan before Judge Jed S. Rakoff. The prosecution rested its case on Friday, and the defense began to put on its own witnesses.

Late Friday, after the jury had gone home for the weekend, Gary P. Naftalis, a lawyer for Mr. Gupta, said it was “highly likely” that Mr. Gupta would testify in his own defense next week.

Mr. Naftalis spent much of Friday cross-examining Mr. Blankfein to try to show that some of the information Mr. Gupta is accused of leaking was known by the market and thus not “material nonpublic information” under the insider trading laws.

The line between public and private information is critical in the case, and Mr. Naftalis worked hard to try to erase that line. He showed Mr. Blankfein two reports from analysts who followed Goldman during the 2008 financial crisis. The reports, written by analysts at Merrill Lynch and Oppenheimer, raise the prospect of Goldman buying a retail bank. Both reports came after meetings with top Goldman officials.

“GS Bank & Trust?” pondered one report. “Don’t rule it out.”

A rationale for putting the reports before the jury was to minimize damage from the only phone conversation between the two recorded by a Federal Bureau of Investigation wiretap. During that call, in July 2008, Mr. Gupta tells Mr. Rajaratnam that Goldman’s board is considering buying a bank.

A jury convicted Mr. Rajaratnam, who ran the now-defunct Galleon Group hedge fund, of orchestrating an extensive insider trading conspiracy last year.

At times, Mr. Naftalis and Mr. Blankfein often seemed to fight for the jury’s affection. While Mr. Blankfein was being presented with a batch of news pieces about Goldman’s possible purchase of a bank, an article flashed on the overhead screen with a photograph of Mr. Blankfein resting his face on his left hand. This prompted laughter from the jury and spectators.

Mr. Blankfein, seizing the moment, mimicked the pose from the witness stand, leading to more cackling in the courtroom.

Comparing Mr. Blankfein’s pose against the photograph, Mr. Naftalis instructed the chief executive to move his hand “down and a little to the left.”

As he left the courtroom, Mr. Blankfein acknowledged the jury with a nod and a smile.

Before resting their case on Friday, prosecutors played several secretly recorded short voice mail messages left by Mr. Gupta on Mr. Rajaratnam’s cellphone. During one on Oct. 10, 2008, a time of market turmoil during the financial crisis, Mr. Gupta says: “Hey Raj, Rajat here. Just calling to catch up. I know it must be an awful and busy week. I hope you are holding up well. Uh, and I’ll try to give you a call over the weekend just to catch up. All the best to you, talk to you soon. Bye bye.”

Mr. Gupta’s lawyers have said that by October 2008, Mr. Gupta had lost his entire $10 million in a Galleon fund and had a falling-out with Mr. Rajaratnam and thus had no interest in passing along insider tips. The friendly tone of the voice mail message was the prosecution’s effort to debunk that theory. Reed Brodsky, a prosecutor, rested the government’s case after playing the recordings.

For the last 45 minutes of the day, the jury watched the defense’s videotaped deposition of Ajit Jain, a top lieutenant at Berkshire Hathaway and a top contender to succeed Warren E. Buffett, Berkshire’s chief executive.

Mr. Jain, a friend of Mr. Gupta’s, testified about the acrimony that had developed between Mr. Gupta and Mr. Rajaratnam. He said that during a lunch in January 2009 at an Italian restaurant in Stamford, Conn., Mr. Gupta told him about the bad blood.

“He told me that he had $10 million invested and he had been gypped, swindled and cheated by Raj and had lost his $10 million.””

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Bout Asks Judge to Throw Out Conviction

March 28, 2012

The New York Times on March 28, 2012 released the following:

“By BENJAMIN WEISER

Updated 11:30 a.m. | Viktor Bout, a former Soviet Air Force officer who was convicted in November of conspiring to sell anti-aircraft missiles and other weapons to men he believed were terrorists intending to kill Americans, apparently believes that he does not deserve the mandatory minimum sentence of 25 years — or any sentence, for that matter.

Mr. Bout’s lawyer has filed court papers asking a judge to refuse to sentence him next week in Federal District Court in Manhattan.

The lawyer, Albert Y. Dayan, argued in a 14-page memorandum filed on Wednesday morning that Mr. Bout’s prosecution by the United States government was “the product of malice” and “private politics” stemming from “the then White House,” a reference to the Bush administration; Mr. Bout was taken into custody in Thailand in March 2008, and later sent to the United States.

His arrest followed a lengthy undercover sting operation run by the Drug Enforcement Administration, which relied on cooperating informants who posed as members of the Colombian terrorist group, the Revolutionary Armed Forces of Colombia, or the FARC.

Under the law, Mr. Bout faces at least 25 years behind bars when he is to be sentenced on April 5, but Mr. Dayan, calling his client innocent and saying that his prosecution was the product of “outrageous, inexcusable” government conduct, called such a sentence “way too much under the facts and circumstances of this case.”

He asked that the judge, Shira A. Scheindlin, dismiss the indictment. A spokeswoman for the United States attorney’s office had no comment.

After a three-week trial, Mr. Bout was convicted of conspiring to kill American nationals, as well as officers and employees of the United States; to acquire and use anti-aircraft missiles (the count that carries the mandatory 25-year minimum term); and to provide material support to a foreign terrorist organization. He could face up to life in prison on some counts.

In February, Judge Scheindlin did agree to a request by his lawyer that Mr. Bout be transferred from solitary confinement into the general prisoner population in the Metropolitan Correctional Center, where he had been held for 15 months.

The judge, who held a hearing into the matter, ruled that she could not “shirk my duty under the Constitution” and Supreme Court precedent “to ensure that Bout’s confinement is not arbitrary and excessively harsh.””

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Gupta Faces New Charges in Insider Trading Case

February 1, 2012

The New York Times on January 31, 2012 released the following:

“BY PETER LATTMAN

Federal prosecutors expanded their case against Rajat K. Gupta on Tuesday, filing a new indictment that broadens what they claim was an insider trading conspiracy between the former director of Goldman Sachs and Raj Rajaratnam.

In a new charge, the government contends that Mr. Gupta called in to a Goldman board meeting in March 2007 from Mr. Rajaratnam’s offices at the Galleon Group hedge fund. Minutes after the call, he leaked secret information about the bank to Mr. Rajaratnam, the government says.

Gary P. Naftalis, a lawyer for Mr. Gupta, denied the new accusations, saying, “As we have stated from the onset, the government’s allegations are totally baseless.”

Last October, the government charged Mr. Gupta with leaking to Mr. Rajaratnam boardroom secrets about Goldman and Procter & Gamble, where he also served as a director. It was a stunning blow to Mr. Gupta, who as the former global head of the consulting firm McKinsey & Company was one of the world’s most respected businessmen.

His trial is set for April 9 before Judge Jed S. Rakoff in Federal District Court in Manhattan. Mr. Rajaratnam, who was convicted by a jury last May of leading a huge insider trading ring, is serving an 11-year prison term.

The new charges seem to counter one of Mr. Gupta’s main lines of defense. At pretrial hearings, Mr. Gupta’s lawyers have said that the relationship between Mr. Gupta and Mr. Rajaratnam, once close friends and business associates, had soured by 2008, which is when the government said that Mr. Gupta leaked corporate secrets to Mr. Rajaratnam. The lawyers attribute the falling out to a $10 million loss on an investment with Mr. Rajaratnam.

By stretching the conspiracy back to 2007, when the markets were still soaring and Galleon’s investments were performing well, the government appears to be countering the defense that Mr. Rajaratnam had fallen out of Mr. Gupta’s good graces.

In addition, the accusation that Mr. Gupta participated in a Goldman board call from Galleon’s offices suggests a coziness between the two men that Mr. Gupta’s lawyers have sought to debunk.

The additional charges against Mr. Gupta involve both Goldman and Procter & Gamble.

In one new count, prosecutors assert that Mr. Gupta, then a Goldman director, participated in a telephone meeting of the board’s audit committee in March 2007 from Galleon. Mr. Gupta heard a preview of Goldman’s earnings, which were strong and set for release the next morning, the government contends. About 25 minutes after the call, Galleon bought at least $70 million worth of Goldman shares, allowing the fund to profit when the bank’s shares rose the next morning.

In the other added charge, the government asserts that Mr. Gupta called Mr. Rajaratnam from Switzerland after participating in a Procter & Gamble board call and leaked information about the company’s coming earnings release.

Separately, Richard J. Holwell, the federal judge who presided over the trial of Mr. Rajaratnam, is retiring from the bench, according to two people with direct knowledge of the matter who requested anonymity because they were unauthorized to discuss it.

The timing of Judge Holwell’s retirement is unclear, but he is expected to return to private practice. He was a partner at the law firm White & Case before becoming a judge in 2003.

Judge Holwell did not respond to a request for comment.”

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Hearing on Terror Suspect Explores Miranda Warning

December 13, 2011

The New York Times on December 12, 2011 released the following:

“By BENJAMIN WEISER

Almost two years ago, a Federal Bureau of Investigation agent was in Nigeria to question an Eritrean man who was in custody on suspicion of supporting terrorism. The suspect, Mohamed Ibrahim Ahmed, had already been interrogated by other American officials for intelligence-gathering purposes, without having been read his rights.

The F.B.I. agent was there for a different purpose: a “clean” interrogation. He would apprise Mr. Ahmed of his Miranda rights — including the right to remain silent and to have counsel — and then interview him, in hopes of winning a confession that could be used in a prosecution in civilian court.

But suppose the suspect, who was also known as Talha, refused to waive his rights and answer questions? The agent proposed an idea in an e-mail to his colleagues and to prosecutors.

“We’ve planned that in the event that T does not waive his rights, we could continue as another ‘dirty’ interview,” the agent wrote in an e-mail at 11:54 a.m. on Jan. 3, 2010.

In the debate over using civilian trials for terrorists, one of the key issues — the ability to first question a suspect to gain critical intelligence on terrorist cells or plots and still pursue a criminal prosecution — is getting an early test in Mr. Ahmed’s case in Federal District Court in Manhattan.

Lawyers for Mr. Ahmed have asked a judge to suppress statements that the United States government has said he made after waiving his Miranda rights and being interrogated by the F.B.I. in Nigeria. They claim that any such waiver was not voluntary and thus any statements he made are inadmissible.

The hearing on the defense motion, which began on Thursday, has provided an unusually revealing look at how American officials are carefully navigating through a kind of hybrid version of Miranda, first trying to get intelligence through “dirty,” or un-Mirandized, interviews and then having different “clean team” interrogators read the same suspects their rights in the hopes that they will waive them and continue to talk.

One issue is how much distance American officials kept between the “dirty” and “clean” interviews, and whether the line between the two was blurred, possibly tainting any waiver of his rights.

Mr. Ahmed, 37, who has been living in Sweden, has since been indicted in Manhattan on charges that include providing material support to Al Shabab, a terrorist group based in Somalia. The indictment says that Mr. Ahmed received jihad training and bomb-making instruction in Shabab military camps in Somalia in 2009, and that when he was taken into custody in Nigeria in November 2009 on an immigration violation, he was found with bomb-making documents.

His interrogations, first by the Nigerians, then by unspecified American officials for intelligence purposes, and finally by the F.B.I. “clean team” agents, took place over the next few months, according to court testimony and statements by a prosecutor.

He was finally sent to Manhattan for arraignment in March 2010.

The agent’s e-mail referring to a “dirty” interview is not public. But as the suppression hearing began last Thursday, the judge, P. Kevin Castel, directed that a prosecutor read parts of the e-mail into the record during a discussion about how much of it could be made available to Mr. Ahmed’s defense lawyers.

The prosecutor, Jocelyn E. Strauber, said that by “dirty,” the F.B.I. agent was simply referring to an un-Mirandized interview.

In describing the Jan. 3, 2010, e-mail, Ms. Strauber explained to the judge that its author, Special Agent Maged Sidaros, was engaging in an internal discussion with other F.B.I. personnel and federal prosecutors, presumably in Manhattan, about “the possibility of a different kind of interview should his interview not proceed as planned.”

She also read briefly from an earlier e-mail from the agent, in which there appear to be questions about whether he is to participate in a Mirandized or un-Mirandized interview.

“We discussed the fact that Jim and I were of the impression that we were the ‘dirty’ team,” he wrote, according to what Ms. Strauber read in court. Then subsequent clean team interviews “would be conducted by others,” the agent added.

Ms. Strauber noted that when Agent Sidaros arrived in Nigeria, he received a summary of the statements Mr. Ahmed had made to Nigerian officials, but was given only scant information about the un-Mirandized interview of Mr. Ahmed by the Americans, which occurred on Dec. 31, 2009.

“Just the fact that it occurred, that it took about three hours, and who participated in it, at least on the U.S. side,” Ms. Strauber said.

The agent would testify, she said, that he specifically requested that the Mirandized interviews be conducted “in a different place, involve different people, and be spaced apart in time from the Dec. 31 interview.”

The spacing had been about five days, she added, and Judge Castel indicated that he wanted an even more precise time. “I may need to know what time on Dec. 31 it ended,” he said.

Prosecutors declined to comment, as did Mr. Ahmed’s lawyers and the F.B.I.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.