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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