Thursday, June 16, 2016

Atty Contempt Hearing Set Over ID Of Trump-Linked Cooperator (RICO)

Law360, New York (June 10, 2016, 10:14 PM ET) -- A New York judge on Friday set a September hearing to decide civil contempt claims against a pair of lawyers who are accused of revealing the identity of a government cooperator who has been linked to Republican presidential nominee Donald Trump, conduct that may result in criminal prosecution.
The strange, secretive case involves allegations that attorneys Richard Lerner and Frederick Oberlander violated court orders by disclosing the identity of real estate developer Felix Sater as a government cooperating witness to the press and in court filings.

According to court documents, the lawyers are accused of disclosing a Racketeer Influenced and Corrupt Organizations Act conviction of Sater's, also referred to in court records as John Doe, as well as his cooperation with the Department of Justice in the prosecution of purported Mafia and Russian organized crime figures, information that had been ordered to be sealed.

Sater, a former member of Trump SoHo developer Bayrock Group LLC, sued for civil contempt, and U.S. District Judge Brian Cogan on Friday set a fall date for an evidentiary proceeding to decide the contempt allegations.

Judge Cogan has also taken the unusual step of referring the matter to New York federal prosecutors for consideration on whether criminal contempt of court charges should be brought against Lerner and Oberlander.

The judge on Friday noted that the office of the U.S. Attorney for the Northern District of New York informed him that it cannot advise him on where it stands regarding the conclusion of the criminal investigation.

Sater was convicted in 1998 of racketeering for a purported securities fraud scheme, but his conviction remained sealed for years because he became an informant for the government. It was during the time his conviction was sealed that Bayrock worked on real estate projects tied to Trump, according to court documents.

For his part, Lerner has claimed that Sater used the concealment of his conviction to execute a fraud on banks, investors and others by persuading them to sink nearly a billion dollars to finance Trump-branded projects. He maintains the fraud took place with the knowledge and facilitation of former U.S. Attorney for the Eastern District of New York Loretta Lynch, now the U.S. attorney general.

A separate lawsuit, originally filed by a Oberlander on a client's behalf, claims Bayrock entities and principals collaborated with Trump on hotel projects while concealing that Sater had been convicted of a felony related to organized crime and was allegedly skimming money.

In a statement provided to Law360 by Sater’s attorney, Robert S. Wolf of Moses & Singer LLP, he called Lerner and Oberlander “rouge lawyers” who have violated numerous district court and Second Circuit orders.

“As I stated on the record, our client seeks to have Oberlander and Lerner indicted by the government and prosecuted for their criminal contempt,” Wolf said. “Additionally, we will pursue all maximum sanctions including financial sanctions to recover the exorbitant legal costs incurred as a result of their outrageous and life threatening misconduct by Oberlander and Lerner identified in these proceedings.”

An attorney for Oberlander, Jeffrey C. Hoffman of Blank Rome LLP, said the contempt allegations are not based on sworn statement of facts, as there are no orders with unambiguous decretal language.

"In fact as to some of the alleged orders they do not exist but are 'presumed' to exist," Hoffman said, adding that it was Sater and his team that publicly filed sealed court documents in Israel, which resulted in their dissemination to the media.

In a joint statement, Oberlander and Lerner called the contempt proceedings fraudulent, and said they are being charged with contempt for writing an editorial critical of Lynch and for making a filing a U.S. Supreme Court petition, with a redacted version for the press.

"The only contempt here is the court’s contempt for half a millennium of Anglo-American law. Never before has a court thought it could be contempt to speak freely of matters in the public record. And while Mr. Sater is allowed to charge us with contempt for ‘revealing’ his 1998 RICO conviction in media interviews, no one seems to care that he himself has filed court papers claiming his conviction has been public since March 2000," they said.

Many of the records in the contempt proceeding remain sealed.

Oberlander is represented by Jeffrey C. Hoffman of Blank Rome LLP. Lerner is appearing pro se.

Sater is represented by Robert S. Wolf and Robert B. McFarlane of Moses & Singer LLP.

The case is In Re Motion for Civil Contempt by John Doe, case numbers 1:12-mc-00557 and 1:16-mc-00706, in the U.S. District Court for the Eastern District of New York.

--Additional reporting by Aebra Coe. Editing by Patricia K. Cole.

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