Why Would the State Department Rent a Townhouse out to Jeffrey Epstein? Is the Blackmail Story Even More Plausible?

The State Department Once Rented A Townhouse Seized From Iran To Jeffrey Epstein — Then Sued Him For Subletting It

The now-forgotten case — laid out in newspaper clips from the time and extensive court documents — offers a glimpse into a strange facet of Epstein’s life at the time, and constitutes an early example of Epstein popping up in the media as a rich and connected but mysterious New York figure.

Beginning in February 1992, Epstein rented a former Iranian government building that had been taken over by the State Department during the Iranian revolution, at 34 East 69th Street in one of Manhattan’s most expensive neighborhoods, and at a rate of $15,000 a month.

But things went sour when the government sued Epstein in the Southern District of New York, alleging that he had at one point failed to pay the rent on time and had violated the lease by moving out in early 1996 and subletting the place without the State Department’s permission. His subtenant was Ivan Fisher, a New York City criminal defense lawyer who had famously defended members of the French Connection and Pizza Connection drug rings. The government also sued Fisher.

A lawyer for Epstein did not respond to a request for comment, and attempts to reach Fisher were unsuccessful.

A New York Daily News article from the time, headlined “Lawyer Pays Not A Cent For Palatial East Side Digs,” said Fisher had stopped paying rent after learning that the State Department had terminated Epstein’s lease as a result of the conflict over Fisher’s subtenancy, and was thus living in the home for free.

“I’m the perfect tenant,” Fisher told the Daily News. The paper described the home’s opulence: “carved oak doors, a white marble foyer, three kitchens, three bedrooms, a library with floor-to-ceiling bookcases, a steam room, 19th-century chandeliers, brass sconces, and a white marble central staircase.” “I pray to God I can stay,” Fisher told the Daily News.

Epstein is described in the story as a “Palm Beach, Fla., financial advisor.” The incident is also briefly mentioned in Vicky Ward’s 2003 Vanity Fair profile of Epstein.

The government’s complaint rested on its assertion that Epstein had not received permission before installing Fisher as the subtenant, and its grievance with Epstein was only intensified by his charging Fisher $20,000 a month for the rent when State was charging $15,000 — netting Epstein a monthly profit.

The voluminous court documents in the case include a later-amended complaint by the government, which added more defendants to the suit — a clutch of other lawyers whom, the government alleged, were in turn subletting office space from Fisher. In a sworn statement, one of those lawyers, Lawrence Gerzog, told the court that he had given Fisher free legal services in exchange for office space, among several other lawyers.

The government eventually moved to evict Fisher, and the court ordered Fisher and Epstein — who in the course of the process were eventually involved in litigation against each other — to pay the back rent and to vacate the premises. An eviction order was served on July 16, 1998, and the marshal noted on the service receipt that the tenants had moved out.

Photo of a New York Daily News story

A story on the case in the New York Daily News, Dec. 23, 1997.

Getting there wasn’t an easy process for the State Department, which had begun by exchanging strongly worded letters with Epstein’s lawyer, Jeffrey Schantz. These were included in the court filings.

“As you are aware, Mr. Epstein’s apparent departure from the house and his failure to make timely rental payments in February and March of this year have been matters of serious concern to this office,” wrote Thomas E. Burns Jr., then the deputy director of the Office of Foreign Missions, in April 1996 in a letter attached to court filings. Burns wrote that the OFM had already found someone to take over the lease from Epstein, a developer named Xenophon Galinas, and that they would not approve the sublease to Fisher.

In June, Burns wrote again, this time directly to Epstein, to notify him that he had violated the lease by leaving the property and subletting it and give him 30 days to kick Fisher out and move in again himself. In August, Burns wrote again to tell Epstein that because Fisher was still there, the State Department was ending the lease. At the end of October, the government filed suit.

Epstein was accused of carrying out an effort to put someone else in the house in his stead without clearing it with the State Department. When Richard C. Massey, an OFM official who had been the point person for Epstein’s lease, was deposed in 1997 by the defendants’ lawyers, he told them Epstein had appeared to make a concerted effort to put someone else in the property without State knowing. “Mr. Epstein was shopping the property around town without our knowledge, all over town,” Massey said. “We had calls from real estate agents who asked us about it. I do not know how many people in the City of New York had a copy of Mr. Epstein’s lease.”

Massey was not able to be reached for comment.

What was Epstein up to? Why had he abandoned the decadent mansion so abruptly and moved out without getting permission to sublet? Epstein made it publicly known when he was moving out, telling the New York Times in January 1996 that the mansion on East 71st Street that would become famous in the context of his alleged crimes was now his. It belonged to Epstein’s client and mentor Les Wexner. It’s unclear how much Epstein paid for the house, if anything, as it was reportedly transferred without a purchase price from a trust linked to both him and Wexner to a company controlled by Epstein.

Fisher, who reportedly once counseled law students to look into a mirror and practice telling potential clients their retainer was $100,000, was banned from practicing in federal court in the Southern District of New York in 2013 after a court grievance committee ruled that he had stolen money from a client.

 

To read the Buzzfeed article in its entirety click here.

Was Jeffrey Epstein Running a Blackmail Scheme Under Cover of a Hedge Fund? Who Were His Investors?

Photo-Illustration: Intelligencer. Photos: Patrick McMullan via Getty Images

Long before Jeffrey Epstein pleaded guilty to prostitution charges in Florida more than a decade ago, his fellow Palm Beach resident and hedge-fund manager Douglas Kass was intrigued by the local gossip about his neighbor.

“I’m hearing about the parties, hearing about a guy who’s throwing money around,” says Kass, president of Seabreeze Partners Management. While stories about young girls swarming Epstein’s waterfront mansion and the sex parties he hosted for the rich and powerful were the talk of the town, Kass was more focused on how this obscure person, rumored to be managing billions of dollars, had become so wealthy without much of a track record.

Kass was well-connected on Wall Street, where he’d worked for decades, so he began to ask around. “I went to my institutional brokers, to their trading desks and asked if they ever traded with him. I did it a few times until the date when he was arrested,” he recalls. “Not one institutional trading desk, primary or secondary, had ever traded with Epstein’s firm.”

When a reporter came to interview Kass about Bernie Madoff shortly before that firm blew up in the biggest Ponzi scheme ever, Kass told her, “There’s another guy who reminds me of Madoff that no one trades with.” That man was Jeffrey Epstein.

“How did he get the money?” Kass kept asking.

For decades, Epstein has been credulously described as a big-time hedge-fund manager and a billionaire, even though there’s not a lot of evidence that he is either. There appears little chance the public is going to get definitive answers anytime soon. In a July 11 letter to the New York federal judge overseeing Epstein’s sex-trafficking case, Epstein’s attorney offered to provide “sealed disclosures” about Epstein’s finances to determine the size of the bond he would need to post to secure his release from jail pending trial. His brother, Mark, and a friend even offered to chip in if necessary.

Naturally, this air of mystery has especially piqued the interest of real-life, non-pretend hedge-funders. If this guy wasn’t playing their game — and they seem pretty sure he was not — what game was he playing? Intelligencer spoke to several prominent hedge-fund managers to get a read on what their practiced eyes are detecting in all the new information that is coming to light about Epstein in the wake of his indictment by federal prosecutors in New York. Most saw signs of something unsavory at the heart of his business model.

To begin with, there is much skepticism among the hedgies Intelligencer spoke with that Epstein made the money he has — and he appears to have a lot, given a lavish portfolio of homes and private aircraft — as a traditional money manager. A fund manager who knows well how that kind of fortune is acquired notes, “It’s hard to make a billion dollars quietly.” Epstein never made a peep in the financial world.

Epstein was also missing another key element of a typical thriving hedge fund: investors. Kass couldn’t find any beyond Epstein’s one well-publicized client, retail magnate Les Wexner — nor could other players in the hedge-fund world who undertook similar snooping. “I don’t know anyone who’s ever invested in him; he’s never talked about by any of the allocators,” says one billionaire hedge-fund manager, referring to firms that distribute large pools of money among various funds.

Epstein’s spotty professional history has also drawn a lot of attention in recent days, and Kass says it was one of the first things that raised his suspicions years ago. Now 66, Epstein didn’t come from money and never graduated from college, yet he landed a teaching job at a fancy private school (“unheard of,” says Kass) and rose through the ranks in the early 1980s at investment bank Bear Stearns. Within no time, Kass notes, Epstein was made a partner of the firm — and then was promptly and unceremoniously ousted. (Epstein reportedly left the firm following a minor securities violation.) Despite this “squishy work experience,” as Kass puts it, at some point after his quick exit, Epstein launched his own hedge fund, J. Epstein & Co., later renamed Financial Trust Co. Along the way, he began peddling the improbable narrative that he was so selective he would only work with billionaires.

Oddly, Epstein also claimed to do all the investing by himself while his 150 employees all worked in the back office — which Kass says reminds him of Madoff’s cover story. Though it now appears that Epstein had many fewer employees than he claimed, according to the New York Times:

Thomas Volscho, a sociology professor at the College of Staten Island who has been researching for a book on Mr. Epstein, recently obtained [a 2002 disclosure] form, which shows [Epstein’s] Financial Trust had $88 million in contributions from shareholders. In a court filing that year, Mr. Epstein said his firm had about 20 employees, far fewer than the 150 reported at the time by New York magazine.

Given this puzzling set of data points, the hedge-fund managers we spoke to leaned toward the theory that Epstein was running a blackmail scheme under the cover of a hedge fund.

How such a scheme could hypothetically work has been laid out in detail in a thread on the anonymous Twitter feed of @quantian1. It’s worth reading in its entirety, but in summary it is a rough blueprint for how a devious aspiring hedge-fund manager could blackmail rich people into investing with him without raising too many flags.

Kass and former hedge-fund manager Whitney Tilson both emailed the thread around in investing circles and both quickly discovered that their colleagues found it quite convincing. “This actually sounds very plausible,” Tilson wrote in an email forwarding the thread to others.

“He somehow cajoled these guys to invest,” says Kass, speaking of hypothetical blackmailed investors who gave Epstein their money to invest, but managed to keep their names private.

The fact that Epstein’s fund is offshore in a tax haven — it is based in the U.S. Virgin Islands — and has a secret client list both add credence to the blackmail theory.

So what did Epstein do with the money he did have under his management, setting aside the questions of how he got it and how much he had? One hedge-fund manager speculates that Epstein could have just put the client money in an S&P 500 index fund, perhaps with a tax dodge thrown in. “I put in $100 million, I get the S&P 500 minus some fees,” he says, speaking of a theoretical client’s experience. Over the past few decades, the client would have “made a shitload” — as would Epstein. A structure like that wouldn’t have required trading desks or analysts or complex regulatory disclosures.

Kass has kicked around a similar idea: Maybe Epstein just put all the client money in U.S. treasuries — the simplest and safest investment there is, and the kind of thing one guy actually can do by himself.

If the blackmail theory sounds far-fetched, it’s worth keeping in mind that it was also floated by one of Epstein’s victims, Virginia Roberts Giuffre. “Epstein … also got girls for Epstein’s friends and acquaintances. Epstein specifically told me that the reason for him doing this was so that they would ‘owe him,’ they would ‘be in his pocket,’ and he would ‘have something on them,’” she said in a court affidavit, according to the investigative series in the Miami Herald that brought the case back to the public’s attention late last year.

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Dealbreaker Nails It! The Platinum Partners’ Most Shocking Outcome

Least Shocking Hedge Fund Arrests Become Most Shocking Near-Exonerations

The Platinum Partners have beaten (most of) the rap.

Way back in the early days of the Platinum Partners scandal, a truly operatic adventure featuring alleged bribes paid via designer handbags, an FBI raid$1.17 billion in missing money, an alleged Ponzi scheme, and a succession of judges alternately bewildered and enraged, the latter due to some alleged witness and prosecutor intimidation, we mused: Wouldn’t it be funny if the thing that got Mark Nordlicht & co. in the end was the scuzzy if allegedly legitimate energy investments by which it made its name? Well, wouldn’t you know….

Mark Nordlicht, the founder of defunct hedge fund firm Platinum Partners, was found guilty on Tuesday of defrauding bondholders of an oil exploration company Platinum controlled, but cleared of charges he defrauded investors in Platinum’s hedge funds….

The three men were accused of lying to investors about the health and liquidity of the flagship Platinum Partners Value Arbitrage fund. Prosecutors said Platinum operated “like a Ponzi scheme” by using new money to fund redemptions by earlier investors, a practice referred to internally as “Hail Mary time.”

The jury, however, rejected those charges, finding all three men not guilty.

This is a truly shocking outcome, given the alleged bribe and all of that missing money and all of the things the Platinum execs did to avoid facing the music, from the aforementioned alleged witness intimidation to the alleged plan to spend the rest of their days safe from extradition in Israel, and also how relatively easy it is to win convictions on these sorts of things. And it could get yet more shocking still.

After the jury left, lawyers for Nordlicht and Levy moved to overturn the guilty verdicts. U.S. District Judge Brian Cogan ordered them to file papers in support of their motions and said he might hold a hearing to consider them.

“It’s not over yet,” the judge said.

To continue on Dealbreaker click here.

Toxic Taxi Medallion Loans and Bribery Charges, Melrose Credit Union

CEO of credit union that made toxic taxi medallion loans charged with accepting bribes

The CEO of a now-shuttered credit union was charged Thursday with accepting bribes from a taxi mogul in exchange for refinancing over $60 million in loans — the latest sign of a crackdown on a predatory industry accused of driving some cabbies to suicide.

Alan Kaufman ran Melrose Credit Union, which was one of the largest lenders of taxi medallion loans until it was closed last year. Among its many clients was President Trump’s personal attorney, Michael Cohen.

The new indictment appears to stem from charges brought by the watchdog National Credit Union Administration against Kaufman last year of unsafe business practices and “personal dishonesty.” Kaufman secretly took bribes from a taxi mogul, Tony Georgiton, as well as an unidentified media company, which sought more advertising from Melrose, according to the indictment.

The National Credit Union Administration’s charges identified the media company as CBS radio.

Both Kaufman and Georgiton face criminal charges for their alleged self-dealing,” Manhattan U.S. Attorney Geoffrey Berman said.

Kaufman, 60, faces bribery charges that carry a maximum sentence of 30 years in prison. He was released on $1 million bond. Georgiton, who has reportedly leased cabs to as many as 2,000 drivers through his company, Queens Medallion, also faces up to 30 years for alleged bribery of a financial institution officer. He was released on $500,000 bond.

The indictment claims that Kaufman lived rent-free for two years in Georgiton’s Long Island home starting in 2010. The following year he allegedly persuaded the credit union’s board to purchase the naming rights for a ballroom in Queens for $2 million. The “Melrose Ballroom” was owned by a company controlled by Georgiton, according to the indictment.

Meanwhile, Kaufman personally approved the refinancing of $60 million in loans to Georgiton’s company without disclosing its ties to Melrose’s board, according to the indictment.

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Epstein and Acosta… Acosta Resigns, Epstein’s Victims Still Entitled to Justice

Trump speaks after Labor Secretary Acosta resigns

Glencore, Human Rights, Gertler, Sanctions, the DRC and The Global Magnitsky Act’s Non-Enforcement

Where are Africa’s billions?

Photograph Credit: Transparency International

Who Oversees Enforcement of The Magnitsky Act and Dan Gertler’s Payments from Glencore Belie Enforcement

DISCLAIMER: The below Euractiv.com piece is an Opinion Post, republished in part without the permission of the author or the Euractiv.com Ltd. company and/or their website.

We are re-posting with links to the original.

This current interest comes at the heals of recent violence in the DRC: “The Congolese army has arrived at Glencore’s largest copper and cobalt mine following the deaths of over 40 informal miners on the site.” (The Financial Times) “The latest tragedy struck at a site owned by Kamoto Copper Company, a subsidiary of FTSE 100 giant Glencore. The company has reported incursions of up to 2,000 people a day on its giant mining concession, which, at 5,200 acres, is difficult to secure.” (The Telegraph)

For the purposes of the Global Magnitsky Act in the US, it is unclear within the context of the United States enforcement mechanisms who enforces the Global Magnitsky Act within the branches of US Government. The Sanctions against Dan Gertler, a former partner of Glencore, were issued by the Department of Treasury and Foreign Assets (OFAC); but Glencore’s announcements in 2018 that it would pay Gertler in a currency other than US Dollars to avoid triggering the sanctions or asset seizures was announced with a measure of glee in 2018. It would seem, therefore that even though the US has enacted the Global Magnitsky Act it lacks teeth or in the alternative, those with teeth are easily bought.

“Glencore said it believed payment of the royalties in a currency other than U.S. dollars to Africa Horizons Investments Limited and Ventora without the involvement of U.S. entities would address applicable sanctions obligations. It added it had discussed the matter “with the appropriate U.S. and Swiss government agencies”. [Reuters]

Based upon Glencore’s own comments, it would appear that they colluded with US and Swiss government agencies to avoid compliance, or rather to find loopholes in which payment would comply. Either way, this means that Gertler continues to get wealthier off the backs of the Congolese people and The Magnitsky Sanctions, intended to prevent exploitation of human rights are meaningless.

We believe that there is a connection to Gertler with high ranking officials in the United States government or with people who have the ear of US officials and with that, a means of guaranteeing that those who would be overseeing the sanctions simply look the other way.

We take the general position that the are no coincidences, everything is political and nearly everyone has a price. 

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Jeffrey Epstein, Alex Acosta, Cutting the Budget for Trafficking Investigations and How Many Children at Risk?

Image result for ALEX ACOSTA AND EPSTEIN

VIDEO: https://publish.dvlabs.com/democracynow/360/dn2019-0711.mp4?start=3214.0

Alex Acosta Enabled Jeffrey Epstein’s Sex Crimes. Now He’s Gutting Funding for Trafficking Victims 

During a press conference Wednesday, Labor Secretary Alexander Acosta dismissed calls for his resignation and defended the 2008 plea deal given to the billionaire serial child sex abuser Jeffrey Epstein while he was the U.S. attorney in Florida. Acosta has also come under fire for his proposal to cut funding for victims of sex trafficking. His 2020 budget proposal for the Department of Labor includes an almost 80% decrease in funds for the Bureau of International Labor Affairs, the office tasked with fighting child sex trafficking. Critics of the proposal argue it would effectively dismantle many programs aimed at preventing child sex trafficking and put large numbers of children at risk. We speak with Taina Bien-Aimé, executive director of the Coalition Against Trafficking in Women.

Transcript
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now! I’m Amy Goodman, with Nermeen Shaikh.

NERMEEN SHAIKH: Labor Secretary Alexander Acosta is rejecting calls to resign and is defending his role in a 2008 plea deal given to the wealthy serial child sex abuser Jeffrey Epstein. At the time, Acosta was a U.S. prosecutor in Florida. The Miami Herald has described the plea deal as, quote, “one of the most lenient deals for a serial child sex offender in history.”

AMY GOODMAN: Acosta has also come under fire for his proposal to cut funding for victims of sex trafficking. His 2020 budget proposal for the Department of Labor includes an almost 80% decrease in funds for International Labor Affairs Bureau. Acosta was questioned when he held an almost hour news conference to justify the extremely lenient deal he made with Epstein back in 2008 when he was the U.S. attorney in Florida. But this is what he said when questioned about the budget around sex trafficking.

YAMICHE ALCINDOR: As labor secretary, you’ve tried repeatedly to cut a program that deals with human trafficking in the Labor Department by up to 80%, going before Congress advocating for that. Why should people trust you to focus on human trafficking and protect victims, if you’ve done that? And I’d like a follow-up question.

LABOR SECRETARY ALEXANDER ACOSTA: So, you’re referring to grants that go to foreign countries, for foreign country labor-related work. As part of the budget every year, those grants have been removed, as have other grants for foreign countries. And let me just add, as part of the budget every year, those grants are put right back in by Congress. This is what happens in Washington. And I fully suspect that those grants will remain in this year.

AMY GOODMAN: To talk more about Alex Acosta’s record, we’re joined now by Taina Bien-Aimé, executive director of the Coalition Against Trafficking in Women.

We’re not as much talking right now about the case of Jeffrey Epstein, which we talked about over the last few days, but this issue of his cutting of the budget. Can you explain what this means?

TAINA BIEN-AIMÉ: So, the Department of Labor has a bureau called ILAB, which is the International Labor Affairs Bureau. And their primary responsibility is to combat forced labor, child trafficking, both labor and sex trafficking, and human trafficking in general. So, what Secretary Acosta is saying, that it goes primarily—that this money goes primarily to international programs, is correct, but it also goes to domestic programs.

So, if he slashes—so, he has a budget of $68 million. What he is proposing is for the bureau, ILAB, to be reduced by 80%, to $18 million. Congress will fight him on that; the Appropriations Committee will fight him on that. But what it means is that we are faced with an administration that wants to reduce its efforts to this very complex human rights violation called human trafficking. So, it’s not just jeopardizing the work that we are doing to combat child sex trafficking, but also child labor trafficking. So, many of—the State Department also works on human trafficking and also provides services and programs to combat it, but they rely on DOL, on the Department of Labor, and specifically for child labor trafficking.

So, for instance, cocoa production, right? So, there are three major U.S. companies—Hershey, Mars and Nestlé—that cannot even—they committed to ensuring to the consumers that no child labor trafficking is involved in the production of cocoa. What will happen to those commitments? Right? We don’t even know whether they are fulfilling their commitments to ensure that whenever you buy a bag of M&M’s or Skittles, that that doesn’t involve child trafficking.

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The “Righteous” Rebbitzin, “Limitless Horrors”, “Where’s the Kid” – Yael’s Case and Human Trafficking

Baby Trafficking and Follow Up Commentary –

From the Times of Israel

2. Where’s the kid? And without stealing a baby, which is allegedly what a couple in New York did in a case that was cleared for publication on Wednesday.

  • According to court documents and media reports, the wife of a rabbi from northern Israel was under investigation for her suspected role in having a pregnant woman identified only as “Yael,” who because of an unspecified mental condition was placed under the woman’s care, fly to New York for what she was told was a medical procedure. Instead, she was taken to a local clinic with ties to the local ultra-Orthodox community, where her baby was delivered by C-section and given to a childless couple, who returned with it to Israel.

  • Police believe Yael’s case is not an isolated one, and is part of a human trafficking network that has been operating in Israel’s ultra-Orthodox community for some time.

  • The case, called “where’s the kid,” was originally opened because of an expose in Yedioth, but gagged until the court responded to a request by the Walla news site to have the case files opened.

  • “I’ve seen a lot of bad cases and this is the worst. The worst of the worst,” an unnamed “professional” who is close to the case tells the news site.

  • Yedioth describes the case as “limitless horrors.”

  • Meanwhile, Maariv runs a headline quoting the lawyer for the rabbi’s wife calling her “righteous.” “There was no kidnapping,” the attorney is quoted saying.

Rebbetzin, Infant Trafficking, Child Abduction and Israel

REBBETZIN SUSPECTED OF INFANT TRAFFICKING

The affair of infant trafficking was revealed yesterday, after the Nazareth Magistrate’s Court partially lifted the gag order on the affair, which involved a rebbetzin from the northern region who served as guardian for a mentally ill Haredi girl who was at the time of advanced pregnancy.

Allegedly, the girl, with the assistance of the rebbetzin, was taken abroad and taken to a hiding place. After she gave birth to her baby, he was handed over to a foreign family.The main suspicion now is that the rebbetzin exceeded the “mandate” given to her by the court with regard to her guardianship, by smuggling her abroad and transferring her baby to strangers. Attorney Yali Shperling, who represents the suspected rabbi, was interviewed Thursday morning at the Army Radio and made it clear that his client denies any connection to the suspicions attributed to her.

“The Haredi girl was problematic. The rebbetzin was trying to help her and rehabilitate her. Bad people, and I say this gently, tried to get her to her nuclear family to take care of her. The rebbetzin, a virtuous and veritable woman, contacted the girl’s family in the United States, went with her there, and was with her at birth. It has nothing to do with adoption. In the United States, when there is someone who is mentally hurt, they take the child, she does not know about the adoption, and she has nothing to do with it.”

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“It has nothing to do with adoption and kidnapping. There was no kidnapping at all. There are things I can not talk about right now. The girl stayed in the US and returned only at a later stage. ” Yesterday it was reported that during the investigation it emerged that the adoptive parents were Israeli spouses from a well-to-do family, and the police believe that the rebbetzin reached them via intermediaries. The police and the State Prosecutor’s Office are still examining whether the case is being transferred to the criminal field, and this is also why in the last two years the affair was under a gag order.

Epstein – Court Ordered Check-In Skipped and NYPD Ambivalent

NYPD let convicted pedophile Jeffrey Epstein skip judge-ordered check-ins

Convicted pedophile Jeffrey Epstein never once checked in with city cops in the eight-plus years since a Manhattan judge ordered him to do so every 90 days — and the NYPD says it’s fine with that.

After being labeled a worst-of-the-worst, Level 3 sex offender in 2011, Epstein should have reported in person to verify his address 34 times before he was arrested Saturday on federal child sex-trafficking charges.

Violating requirements of the state’s 1996 Sex Offender Registration Act — including checking in with law enforcement — is a felony punishable by up to four years in prison for a first offense.

Subsequent violations carry a sentence of up to seven years each.

But the NYPD hasn’t required the billionaire financier — who owns a $77 million Upper East Side townhouse — to check in since he registered as a sex offender in New York over the controversial 2008 plea bargain he struck in Florida amid allegations he sexually abused scores of underage girls in his Palm Beach mansion.

Several current and former high-ranking NYPD officials were shocked to learn from The Post that the department had given Epstein a pass on his periodic check-ins, with one saying, “It makes no sense.”

“The NYPD can’t modify a court order,” a source said. “If the judge says he has to report here, he has to report here.”

Another source said Epstein was “supposed to go to SOMU,” an acronym for the NYPD’s Sex Offender Monitoring Unit, located in the Manhattan criminal courthouse at 100 Centre St.

“If he didn’t, then he’s in violation and they could have arrested him,” the source said.

The NYPD maintains that Epstein, 66, wasn’t required to check in with New York cops because he claims his primary residence is a private island, Little St. James Island, in the US Virgin Islands.

But state Supreme Court Justice Ruth Pickholz considered and rejected that very argument by defense lawyer Sandra Musumeci during the Jan. 18, 2011, hearing.

Musumeci insisted that Epstein wasn’t a “resident of New York” and that his seven-story townhouse at 9 E. 71st St. was a “vacation home” at which he had no plans to ever stay “longer than a period 10 days.”

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Esformes Must Forfeit Interests in Long-Term Care Companies, if Only Others Would Follow

Esformes must forfeit interest in long-term care operating companies, judge rules

Philip Esformes, the Florida assisted living and skilled nursing facility owner found guilty in April of more than 20 charges in a case that the federal government described as “the largest single criminal healthcare fraud case ever brought against individuals by the Department of Justice,” must forfeit his interest in seven operating companies related to his facilities, a federal court has ruled.

The decision, issued July 1 in the U.S. District Court for the Southern District of Florida, was a denial of Esformes’ motion asking the court to acquit a jury’s verdict that the assets were forfeitable. The judge’s order applies to Esformes’ interest in the operating companies for the following assisted living or skilled nursing properties: Eden Gardens in Miami, Fair Havens Center in Miami Springs, Flamingo Park Manor in Hialeah, Harmony Health Center in Kendall, North Dade Nursing and Rehabilitation Center in North Miami, Nursing Center at Mercy in Miami and the now-closed Oceanside Extended Care Center in Miami Beach.

“Esformes’s operating companies gave his business a facade of legitimacy as he used them to hold bank accounts and operate the various SNFs and ALFs engaged in the elaborate money laundering and kickback scheme,” U.S. District Judge Robert N. Scola Hr, wrote. “Accordingly, the Court finds that there is sufficient evidence to ‘permit a reasonable jury to conclude that the Government has proven, by a preponderance of the evidence, that the property is subject to forfeiture.’ ”

Scola also denied Esformes’ motions seeking acquittal and a new trial.

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A Comprehensive Hedge Fund Fraud Case Study on Platinum Partners

Photo: Business Insider

Abstract:

Platinum is a valuable precious metal, but it’s actually difficult to distinguish it from other materials, such as white gold and silver, by simply looking at them. However, platinum is harder to dent, not as soft as gold or silver, and weighs more than each of them. There is no bargain for platinum, either. With common sense and little knowledge, you can avoid buying fool’s platinum.

Platinum Partners is a New York-based hedge fund manager with more than a billion dollar assets under management — only a few people have heard of them and even fewer people enjoyed their stellar returns. Over the last 13 years of operations, its flagship Platinum Value Arbitrage fund generated 17% annualized return without having any negative year. However, Platinum Partners’ track record was nothing but fool’s platinum.

Case Profile:

Background

For years, a little-known New York hedge fund called Platinum Partners stood out for its stellar double-digit investment returns. Platinum Partners Value Arbitrage Fund, Platinum Partners’ flagship fund, generated 650%, or 17% p.a., over the 13 years since inception with only three months of greater than 2% loss. In sum, there was something uncomfortably consistent about their performance. It turned out that those returns were nothing but ‘fool’s platinum’.

Platinum Partners Value Arbitrage Fund

Source: The Corporate Prof

Mark Nordlicht (CIO) and Murray Huberfeld (President) co-founded Platinum Partners in 2001 and launched their flagship fund, Platinum Partners Value Arbitrage Fund (“PPVA”), in 2003. Their impeccable performance attracted money from investors and their assets under management stood $1.7 billion as of 2015, according to Platinum Partners’ last SEC filing. PPVA claimed a multistrategy investment approach which sought to generate consistent returns through several uncorrelated sub-strategies. According to the interview with Uri Landesmann in 2011, PPVA invested across seven strategies: Long Short Fundamental, Quantitative, Opportunistic/Macro, Energy Related Arbitrage, Asia Based Arbitrage, Event Driven and Asset Based Finance (Energy, General and Mining). In particular, the PPVA fund changed allocations among strategies dynamically over time based on the opportunity sets created by inefficiencies. The largest targeted allocation of the portfolio was Asset Based Finance, which represented 43% of PPVA’s net asset value.

Source: Risk.net

Nordlicht, 48, is a second-generation commodities-options trader. He started his career as a trader in the pits of the New York Cotton Exchange. In 1991, he founded Northern Lights Trading, a proprietary options firm based in New York. From 1997 to 2001, partially overlapping his time at Northern Lights, he was a founder and the managing partner of West End Capital, a New York-based money management firm that specialized in privately negotiated structured debt financing for small and mid-cap publicly traded companies. He also served as the Chairman and Director of Optionable Inc. from 2000 to 2007. Nordlicht earned a B.A. in Philosophy from Yeshiva University.

Huberfeld, the 55-year old son of a kosher restaurant owner in Brooklyn, traded penny stocks, and had a long history of legal troubles since 1992 according to court filings. Huberfeld took more of a back-seat role in the fund — connecting friends and community acquaintances, but was not the public face of the company.

In 2003, Huberfeld, David Bodner and their other friends helped Nordlicht to start Platinum Partners with $25 mm. Two years later, Huberfeld also started his own hedge fund called Centurion, whose name was later changed to Platinum Partners Credit Opportunities Master Fund.

Platinum Partners’ success made Nordlicht himself rich. According to the Form ADV filing with SEC, 23% of Platinum Partners’ total gross asset value, or $382 mm, belonged to the firm’s principals, majority of which was Nordlicht’s. Additionally, the most recent Department of Justice complaint against Platinum alleged that Platinum’s management had reaped over “$100 mm in fees alone” between 2011 to 2016 — the period in which the bulk of Platinum’s legal troubles stem from.

Source: SEC Form ADV

Problems

In June 2016, Huberfeld was arrested on charges of conspiracy and wire fraud. Prosecutors alleged he had bribed Norman Seabrook, the portfolio manager for a pension fund of a New York City correction officers’ union, with $60,000 — delivered “in a Salvatore Ferragamo bag” — in exchange for a $20 million investment in Platinum Partners’ hedge fund. Both Huberfeld and Seabrook pleaded not guilty to the scam, but in December, federal agents arrested Nordlicht and six others on counts related to a $1 billion “ponzi-like” scheme that started with over-inflating private assets, covering losses and eventually, covering redemptions with new inflows.

In particular, Platinum relied on capital from a network of wealthy Orthodox Jewish investors — including the Gindi family, owners of the Century 21 department-store chain, and real estate moguls Ruby Schron and Abraham Fruchthandler. As such, the collapse of Platinum Partners was a shock to the wealthy Jewish community in New York and Florida, which has not completely recovered from the damages stemming from the Madoff scandal less than a decade ago.

The problems of Platinum Partners emerged as early as 2012. On November 6th of that year in an email entitled “Current Redemptions Nov 5, 2012” regarding a $27 mm redemption, Nordlicht had stated that “If we don’t exceed this in subs from dec 1 and jan 1 we are probably going to have to put black elk in side pocket. i also need to pay back [loan from an individual] and an additional 4 million oct 31 and nov 30 so we are talking 40”. Replying, President of Platinum Uri Landesman said “we could sweep the table here, so far, think jan 1st is a possible for some, if not all”. In response, Nordlicht writes “it’s just very daunting. It seems like we make some progress and then reds are relentless almost. It’s tough to get ahead in subs if u have to replace 150–200 a year”. Landesman ended the email chain expressing “Didn’t take it as complaining, it is my job. Redemptions very daunting”.

Later on April 29,2014, Nordlicht sent an email to CFO Joseph SanFilippo stating: “Start paying down reds [redemptions] as u can. Between Blake and ppbe (additional 10million), should have decent short term infusion. Hopefully some may 1 subs [subscriptions] show up as well. Have a few more outflows to discuss but this is obviously the priority.” Things seemed to reach a crisis point in June 2014 when Nordlicht wrote “It can’t go on like this or practically we will need to wind down….this is code red,” Yet investors remained in the dark about the firm’s precarious liquidity position — even as the firm claimed quarterly liquidity with 90% of capital being able to be returned “in the first 30 days”. A month later, when an investor emailed to ask about the reliability of Platinum’s reported performance figures, Landesman wrote back, “The numbers are all kosher, they have had verbal input every month.”

A June 3, 2014 email from a Platinum employee to Nordlicht and others entitled “Cash Sheet” listed cash on hand of $96,000; “Pending Inflows” totaling $20,000,000; “Pending Outflows” totaling $16.75 mm and Redemptions of $500,000 for May and $9.5 mm for June, which thus resulted in a “Projected Cash” of negative $6.14 mm. Nordlicht forwarded this message to another staff member asking him to: “Take June reds off the list,” inferring that Platinum was unable to meet its June redemptions of $9.5 mm.

Platinum Partners’ hunt for cash eventually led to Norman Seabrook. Seabrook was a Portfolio Manager for the pension fund of the Correction Officers’ Benevolent Association (“COBA”), the largest NYC corrections officers’ union. Seabrook was noted in filings to be “frustrated with working hard to invest the pension money and receiving no reward”. In late December 2013, Platinum Partners formerly arranged for a meeting between New York’s Correction Officers’ Benevolent Association (COBA) and Platinum Partners. By January 2014, Seabrook was able to convince his Annuity Fund Board to invest in Platinum Partners. The first investment was made in March 2014 when COBA made an initial $10 mm subscription. In June another $5 mm was added. In return, Seabrook ended up taking $60,000 in payment. A further $10,000 was donated to charity Seabrook was involved and was honored at.

Platinum Partners was involved with several suspicious transactions, which probably caused significant losses over the history of the firm. However, the biggest problem was the mismatch of liquidity and the lack of oversight for independent valuation of assets. While Platinum Partners promised investors that they could redeem their investments every month with 60 or 90 days’ notice and receive payment of 90% of their redemption request within 30 days thereafter, they started investing a significant amount of assets in illiquid investments — namely Asset Based Finance. As discussed previously, almost 43% of the PPVA’s portfolio was invested in this illiquid investment opportunities. The most notable illiquid investments were (1) Golden Gate Oil LLC, valued at around $170 mm, or 19% of PPVA’s total assets at the end of 2013, and (2) Black Elk Energy Offshore Operations LLC, representing 24% of PPVA’s total assets at the end of 2012. These two assets represented at least 20–30% of the portfolio between 2012 and 2014. At the end of 2014, almost 80% of fund assets at the end of 2014 was classified as “Level 3” assets. In late November 2015, Platinum Partners placed a majority of PPVA’s assets, all highly illiquid, in a “side pocket”, from which no redemptions were possible for three years.

PPVA’s Estimated Exposures to Golden Gate and Black Elk

Source: SEC v. Platinum Management (NY) LLC, et al

In addition to these two investments, Platinum Partners most likely experienced significant losses from exotic investments in so-called life insurance settlements, medical receivable financing and litigation financing. This is not completely confirmed as there is no overwhelmingly clear evidence in the public domain

  • Life insurance settlement: BDL Group, subsidiary of Platinum Partners was accused by SEC in 2014 for collecting personal information of terminally ill patients to benefit from investing in variable annuities. BDL raised approximately $56 mm for the scheme. It is not clear whether Platinum Partners lost money from this investment.
  • Medical receivable financing: Platinum Partners was reported as a victim of $287 million medical receivable financing Ponzi scheme orchestrated by Robert Feldman and Douglas Kuber in Florida. The scheme was operated from 2008 to 2010. The total amount of losses is not disclosed.
  • Litigation financing: Platinum Partners participated in Scott Rothstein’s $1.2 billion litigation financing Ponzi scheme through Banyon Capital, which essentially functioned as the scheme’s feeder fund. It is reported that Platinum Partners’ transactions totaled more than $400 mm. At the cost of other investors, Platinum Partners recovered some assets before the scheme collapsed, but eventually settled to pay $32 mm to the bankruptcy estate. The total amount of losses is not disclosed.

Platinum Partners increased its valuation of Golden Gate sharply while in actuality, the company’s performance was falling far below initial projections, with deeply disappointing oil production figures and heavy operating losses. On a process level, the company’s first development stage involved the drilling of seven wells, but such efforts bore heavy cost overruns and led the firm to consume the $18 million borrowed from Platinum Partners by the end of 2013. Golden Gate also faced heavy delays in obtaining needed permits — worsening problems further. Moreover, of the wells that were producing, such produced mostly water and many were shut down. The only consistently-producing well provided revenue representing less than 10% of initial projections. Resultantly, far from producing projected millions, Golden Gate netted $6 million losses in 2013.

Platinum Partners even tried to have Black Elk to purchase their stake in Golden Gate, but this potential transaction created a problem as Black Elk’s engineers who appraised Golden Gate’s oil reserves said preliminary estimates of Golden Gate’s reserve was merely 10% of Platinum’s prior valuation. In Sep 2014, Platinum Partners paid $3.2 million for the remaining 52% stake in the company and valued the entire stake in the company at $140 million. This transaction instantly generated $134 million paper profit, or a 16% return (in 2014, PPVA was up 10%).

Valuation of Golden Gate

Source: SEC v. Platinum Management (NY) LLC, et al

The relationship between Platinum Partners and Black Elk was even murkier and complicated, but Platinum Partners essentially controlled Black Elk and used it to manage its liquidity and inflated asset values. While holding substantial amount in Black Elk-related assets, Platinum Partners unlawfully extracted nearly $100 million out of Black Elk after Back Elk sold some of its core assets.

So murky was the relationship that a separate law-suit, a civil one, is also underway between third-party Black Elk bondholders and Platinum Partners. In this, creditors accuse Platinum Partners of using a “Trojan Horse” associated entity to bypass fair treatment of bondholder rules (that excuses Platinum from voting as a bondholder) to save Platinum’s preferred shares positioning and subordinate more senior, secured debt.

***

Formed in November 2007 as a limited liability company, Black Elk was an oil and gas company headquartered in Houston with all its producing assets located offshore in US federal, Louisiana and Texas state waters in the Gulf of Mexico. John Hoffman was Black Elk’s founder and CEO.

In 2009, Platinum invested in Black Elk across the capital structure through Series E Preferred shares, vote holding equity rights, and secured notes.

That investment initially seemed successful. In 2011, the Wall Street Journal reported that, helped in part by the ban on drilling in the Gulf of Mexico after the BP Macondo explosion and oil spill, Platinum’s Black Elk investment “was Platinum’s most successful last year, having contributed a significant portion of its high-teens return.”

From 2008 to 2011, Black Elk employed a buy-and-build strategy to develop its business.

To finance this, Black Elk issued $150 mm of senior secured notes on November 23, 2010. Simultaneously, the company entered into a Security Agreement in favor of The Bank of New York Mellon Trust Company, N.A. (“BNY”) as Trustee and Collateral Agent for the 13.75% Coupon Senior Secured Notes. Pursuant to such an agreement, the Senior Secured Noteholders were granted a first priority lien on substantially all of Black Elk’s assets.

At its peak of operations, Black Elk had approximately 457,065 gross (223,852 net) acres under lease in the Gulf of Mexico, 935 gross (444 net) wells and 58 production platforms.

PPVA was Black Elk’s principal lender and considered its position as one of its most profitable. At the end of 2012, Black Elk represented 24% of PPVA’s total assets. However, On November 16, 2012, though, an explosion occurred on an offshore Black Elk platform — killing three workers. The explosion caused huge legal headaches, which eventually led to spiraling legal costs, and suspensions of operations.

Black Elk was effectively insolvent by early 2014 — some trade creditors were paid, if at all, more than a year past their due dates.

Also by early 2014, Nordlicht and his associates dominated Black Elk’s management as its majority largest investor. The firm controlled its credit facility, controlling the majority of the Senior Secured Notes and also junior Series E preferred equity, and appointing and controlling the Black Elk Board and CFO. In early 2014, Platinum confronted the prospect of losing more than $100 mm if the company could not meet its debt schedule. In response, Platinum Partners looked towards selling of Black Elk’s assets and returning to the proceeds to itself, and not its senior noteholders.

This came about through the sale of Black Elk’s prime assets to Renaissance Offshore, LLC. Proceeds from that sale was to Platinum by redeeming its junior Series E preferred equity instead of the Senior Secured Notes, including those held by Platinum, which were in fact entitled to first call on those proceeds.

Thus, as Black Elk negotiated the sale of its prime assets to Renaissance, Platinum devised a method to seek noteholder approval to waive their rights to the sale through an amendment to the indenture. Understanding that it would be difficult to persuade truly unaffiliated and disinterested Secured Senior Note Holders to renounce their rights and that Platinum itself as an equity holder of Black Elk could not use its noteholder votes, Platinum had to find a way to rig the vote.

Taking into account Platinum’s ownership of most of the $150 mm in notes, $37 mm of said notes comprised a majority needed to waive the rights of the indenture.

As Platinum controlled Black Elk, this statement meant that the sum of all Notes held by Platinum, Platinum-affiliated entities and entities controlled by Platinum were to be subtracted from the $150 million Notes entitled to vote. Of the remainder, a majority had to consent.

Since it was blatantly obvious that truly unaffiliated and disinterested Senior Secured Note Holders would consent to writing-off their secured notes, Platinum this created a Trojan horse “friendly” consenter: secure the votes of a company or companies holding a substantial number of Notes that looked independent, but were in fact controlled by Platinum.

The ‘Trojan Horse’ was a group of Beechwood entities named in filings as B Asset Manager Fund and B Asset Manager Fund II. In addition to 68.9% ownership, Platinum assigned a number of Platinum employees to Beechwood, and installled a Platinum executive, David Levy, as the Chief Investment Officer of B Asset Manager. Levy still continued to use his Platinum Partners email address while “CIO” of Beachwood. Levy soon thereafter directed the Beechwood entities in early 2014 to purchase $37 mm of the Black Elk Senior Secured Notes. The Beachwood entities thus then voted to consent their Notes in favor of the Platinum proposal.

Only a few weeks after Beechwood’s vote, Levy left his position at Beechwood, and returned full time to Platinum. This manipulation of the Indenture vote secured $98 mm of the proceeds of the Renaissance sale to Platinum Partners.

Platinum’s approach was not entirely opaque. Black Elk Chief Executive Officer John Hoffman emailed Black Elk’s General Counsel and one of its retained counsel on June 26, 2014 that described his take on what was unfolding:

John Hoffman and the General Counsel eventually jumped ship from the company in August 2014.

Hoffman was also right about Black Elk’s eventual plan. In August 2015, Black Elks creditors had placed the company into involuntary Chapter 7 bankruptcy. The company had 20 days to respond, and it was successful in its motion to convert the case to a voluntary Chapter 11 case, according to court documents.

Later on in the year, the offshore energy driller filed for Chapter 11 bankruptcy.

At about the same time as creditors filed to put Black Elk in bankruptcy, federal prosecutors filed criminal charges against Black Elk related to a 2012 rig explosion in the Gulf of Mexico. The charges stemmed from an investigation conducted by the Bureau of Safety and Environmental Enforcement which ended with 41 citations relating to the fatal explosion. A year after the explosion, Black Elk had spent $12.4 mm trying to clear up the remains and deal with the blast’s legal aftermath.

The Black Elk senior debt in question in the Schmidt vs. Platinum October 2016 case. Source: Bloomberg

But the $98 mm transfer was not enough. Indeed, taking into account Platinum’s own bondholding position in Black Elk totaling $111 mm at face value, with $74 mm held by Platinum, and another $37 mm held through the Beachwood Entities — it is clear that even Platinum lost out from its own transfers. While perhaps the scheme with Black Elk helped shoulder losses and pass them disproportionately to bondholders, Platinum nonetheless suffered a great deal.

***

Platinum Partners’ external auditor, BDO, in early 2015 reported to it that “a material weakness exists in the Master Fund’s investment valuation process related to its Level 3 investments.” But, Platinum Partners did not disclose to its investors this important information. The auditor also identified a “very material” misstatement that required a large markdown of the valuation of one large, illiquid position, triggering a restatement of the fund’s year-end 2013 AUM. Platinum Partners, however, terminated that auditor. Still, the replacement auditor, CohnReznick, included in its 2014 opinion, which it did not issue until September 2015, an “emphasis-of-matter” stating that management’s estimated values for investment representing over $800 million rested on unobservable inputs, and that the amounts that might be realized in the near-term could differ materially from management’s valuations.

Platinum Partners used at least three valuation agents: Alvarez & Marsal Valuation Services, LLC, Sterling Valuation Group Inc. and DeGolyer and MacNaughton. There valuation agents were chosen by Platinum Partners and provided their valuation assessments based on the data provided by Platinum Partners. For example, they did not conduct onsite checks on the assets held by Golden Gate and Black Elk as they were not commissioned to do so.

SS&C Technologies, Inc. was a fund administrator for all three funds managed by Platinum Partners. For a portfolio of highly illiquid investments, a fund administrator’s ability to evaluate the value of the portfolio is limited since they rely on the inputs from the auditor and valuation agents.

It is difficult to conclude whether Platinum Partners started as an outright fraud from the very beginning, however, they could not keep up with their promises to investors and covered up problems with lies after lies. The scheme’s collapse was triggered by the bribery case, but Platinum Partners would eventually run out of cash.

Recommendation

Do Not Believe in the Unusually Stable Returns

It is almost impossible to run a hedge fund for over a decade without having a substantial draw-down. All investors should know this simple fact and avoid investing in any investment scheme showing a straight line. Platinum Partners’ investment scheme was also heavily involved with the energy-related investments and the falling oil price should have had material impact on the underlying investments even though they were structured as a secured lending. Instead, the fund only had superficial down periods lasting no more than two months. Indeed, out of 155 months of operation, only three months endured a loss of more than 2%,

Source: The Corporate Prof., Bloomberg

Be aware of risks involved with hard-to-value assets

Secured lending and private equity investments can deliver “stable” returns if operated properly, but the return stream is stable only on the surface. The lack of a market price makes it very difficult for an auditor and an administrator to assess valuation of a portfolio. Investors are exposed to this unobservable risk.

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The Uniqueness of Platinum Partners and the Web Prosecutors Could not Eloquently Unwind [Law360]

Law360 (July 10, 2019, 10:25 PM EDT) — Brooklyn federal prosecutors failed to convict top Platinum Partners executives on what they once described as “one of the largest and most brazen investment frauds perpetrated on the investing public,” and the charges they convicted on are now in the hands of a skeptical judge — a far cry from the case’s headline-grabbing origins.

Two and a half years after they were indicted, Platinum Partners co-founder Mark Nordlicht and former co-chief investment officer David Levy were convicted Tuesday of defrauding bondholders in portfolio company Black Elk Offshore Operations LLC. But the jury acquitted entirely on the crux of the case: that Nordlicht, Levy and others had run Platinum’s key fund like a Ponzi scheme.

Former Platinum CFO Joseph SanFilippo was also accused of the scheme to defraud investors, and he was found not guilty. In all, the jury acquitted on 15 counts and convicted on six.

Una Dean of Fried Frank Harris Shriver & Jacobson LLP said that while the case took a number of twists and turns, the acquittal on the investment fraud scheme is not a total surprise given U.S. District Judge Brian Cogan’s skepticism of the evidence.

“It’s not common, and it definitely signals something about the nature or sufficiency of the evidence in the case — as perceived by the court at least,” Dean said of the judge’s rulings.

Nordlicht, Levy, SanFilippo and two others were charged with committing a complex fraud on investors in the Platinum Partners Value Arbitrage Fund between 2012 and 2016, as a number of those investors sought to pull funds out of the PPVA. The fund was stocked with oil and gas assets that were still in the exploration stage, making them difficult to sell.

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The Virtual “Kidnapping” of Infants from Young Haredi Girls Impregnated out of Wedlock and the Trafficking of Babies [VIDEO IN HEBREW]

Trafficking of Babies Delivered by Unwed Religious Mothers – Sold to the Families in the US, Israel and Abroad

The following are a series of articles in English and Hebrew made pubic after the  lifting of an 18-month gag order on any press releases of information related to the story of a baby trafficking ring between Israel and the US and other countries.

In 2016 we suggested in articles, based upon information we had received from members of the Kiryas Joel community (n/k/a Palm Tree, NY), that there were/are similar situations that were or are occurring in Kiryas Joel. We had been told by members of the community that foreigners were being brought in as nannies and maids and then impregnated to increase family size and the genetic pool. The babies were then being adopted by the Haredi families, not necessarily with the consent of the foreign mothers who, as we understand, were threatened with deportation if they spoke up. We were told that if they cooperated they were able to raise their own children but under the auspices of the families in which they reside and of course the babies were born Americans and listed as children born to the family. As such these nannies would then never have claim to their children, an indentured servitude of sorts. We were not able to find anyone willing to speak out publicly so providing any more details than what we did at the time was not possible.

In a similar set of investigations, we had been told that babies were being “adopted” from unwed mothers throughout the Haredi community by families within the community, either in the US or abroad, who either wanted to increase their family size or who could not get pregnant. The details of the ‘arrangement’ ranged from babies being sold to babies being legitimately adopted. At the time, the costs of these “arrangements” were well into the hundreds of thousands of dollars.

The problem with young unwed mothers is not uncommon to all walks of life. However, within the insular ultra-Orthodox community it raises scandal. In vitro fertilization is not entirely accepted amongst all within the Haredi community and adopting Jewish babies out to non-Jewish or for that matter non-religious families is, was and will always be a non-starter when there is an unwanted pregnancy within the Haredi community, leaving limited options.

We have been told that babies in the ordinary course born into that community are often born by midwives; and it is not uncommon for families to deliver babies without the knowledge of doctors regarding the pregnancy, particularly where unwed mothers are concerned. Many midwives from within that community certify to the births; so finding midwives who would certify to slightly misrepresented facts is also not uncommon. The same holds true of a subset of hospitals or medical clinics within the community or regarded by the community as acceptable. As such, if a baby suddenly appeared, allegedly born at home, it would not be difficult to obtain a birth certificate or proper legal documentation, even if the baby was not born into the family as alleged.

The piece of the story we had not completed at the time was the child trafficking allegations,  instances where children were being stolen from unwed mothers and sold to families either in Israel or the US for a price, a “handling fee.” 

The attached video, in Hebrew, describes the scenario: a young girl got pregnant out of wedlock, she was kept from public eye through most of the pregnancy. At around the time when the baby was due, it was delivered by Cesarean section and then taken from her before she was conscious enough to ask question. All of the documents requiring her signature were signed while she was barely conscious. In her case, the baby was adopted for a “handling fee.” 

When asked by the journalist on the video if this is common, the guest said that he had access to the DNA of at least 9 instances in which this type of scenario played out but that he felt it was far more widespread. 

As described in the video this is a multi-milion dollar industry and it is suggested that this is fairly widespread within the Haredi community when young girls get pregnant in a manner that is not deemed to be kosher. The journalist was a bit surprised by the relative frequency described by the guest, Avi Lehrer.

According to information we have verified, the entire process is viewed as acceptable because it serves to prevent shame being brought upon the family, it is a lucrative business endeavor, the babies are sent to live with “reputable and religious families” and it is a relatively easy process given the ways in which children are born into the community (consistent with information provided to us in 2016/2017.

The commentator asked Mr. Lehrer if he believed that the adoptive parents know that the adoption is not legal and he said he felt fairly strongly that it is likely that adoptive parents know what they are getting into, in essence, purchasing babies. When asked by the commentator the value of each baby, Mr. Lehrer said $250,000.00.

The following are the articles that have reached the news as of today.

[updated 11.July.2019]

BABY TRAFFICKING

Police probe suspected baby trafficking ring

The Nazareth Magistrate’s Court has partially lifted a media gag order on a nearly two-year investigation into a suspected baby trafficking ring in the ultra-Orthodox community.

The police opened their investigation into the suspected adoption scheme in mid-2017 after an undercover investigation by the Yedioth Ahronoth daily detailed claims by an ultra-Orthodox woman who said her infant son was taken from her and given up for adoption against her will.

On Wednesday, the court revealed that police were probing the wife of a rabbi from northern Israel for her suspected role in kidnapping the newborn baby of the mother, who is identified in court documents as “Yael.”

Yael, who was placed under the legal guardianship of the rabbi’s wife due to an unspecified mental illness, told police that in 2016 when she was eight months pregnant, the rabbi’s wife persuaded her to travel to New York for a medical procedure.

After arriving at an unnamed local hospital linked to the ultra-Orthodox community, Yael said her baby boy was delivered via cesarean section, and immediately afterwards, she was pressured into signing documents she did not understand.

Yael said her son was taken away from her at the hospital and given to a childless ultra-Orthodox couple, who then returned to Israel. She says she has not seen her son since.

Yedioth reported in 2017 that Yael’s traffickers charged a $100,000-$150,000 “handling fee” for each adoption they facilitated.

In addition to investigating the adoption, the court documents showed that authorities are reviewing if the adoption was legal and if the boy, now 3, should be returned to his biological mother.

Police recently detained the rabbi’s wife along with two other suspects, but all three have since been released to house arrest.

The rabbi’s wife denied arranging Yael’s trip to New York, as well as any involvement in the child’s adoption.

However, police believe Yael’s case is not an isolated one, and is part of a human trafficking network that has been operating in Israel’s ultra-Orthodox community for some time.

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Police investigating Israeli baby trafficking case involving rabbi’s wife

After years of investigation, the Nazareth Magistrate’s Court allowed the partial publication of a case centering around a baby trafficking ring headed by the wife of a rabbi from northern Israel, Maariv reported.

The rabbi’s wife served as the guardian of a young Haredi woman who was in advanced pregnancy at the time.
The young woman was taken abroad by the rabbi’s wife and then brought to a hidden apartment where she gave birth. Her baby was then given to a foreign family. The main charge at the moment is that the rabbi’s wife used her court-given mandate as guardian of the young woman in order to take her abroad and to give the baby to strangers.
The rabbi’s wife has denied the charges and said she wasn’t involved in the transfer of the baby to adoption at all. She added that the trip abroad was in order to give the young woman a chance to redefine herself after being hospitalized in a psychiatric hospital in Israel, according to Maariv.
The adoptive family turned out to be an Israeli couple from an affluent family and the police figure that the rabbi’s wife made contact with them through agents. The police and prosecution are still debating whether or not the case is criminal and this is why the case was under a gag order for the past two years.
To continue reading click here.

ARTICLES IN HEBREW:

פרשת החטיפה והסחר בתינוקות: “החוטפים עדיין מסתובבים חופשי”

חדשות פלילים ומשפט

הותר לפרסום: נחשפה פרשה בינלאומית של סחר בתינוקות

https://www.maariv.co.il/news/law/Article-707590

The Integrity of a Case of a 7 Year-old Jewish Rape Victim is Being Questioned

Lawyer representing 7 year-old Jewish rape victim defends integrity of case

The lawyer representing the 7 year-old victim claiming rape answers questions throwing the case into doubt.

By World Israel News Staff

The lawyer for the 7-year-old Jewish girl, who claims a Palestinian raped her, spoke of some of the difficulties with the case on Israeli radio on Sunday.

The case, which made headlines last week, has been plagued by conflicting information.

According to the police report, the child was definitely sexually abused. However, due to the family’s delay in contacting the police for a week and the police neglecting to send the girl’s clothing to a forensic lab, there does not appear to be DNA proof of the attacker.

Forty-six year old suspect, Mahmoud Katusa, has been indicted on charges of kidnapping and rape. Katusa was a janitor at the school where the girl studied. According to the police, he was friendly to her and gave her sweets.

Additionally, the report says that two Arab workers helped to perpetuate the crime by holding the young girl down during the violent act. These suspects have yet to be found.

One issue plaguing the case is that the girl was apparently dragged through her ultra-Orthodox neighborhood in Samaria. Generally, streets in these areas are crowded with people.

The question being asked is how is it possible that no one stopped him if she was resisting the whole way as the report states.

Fried explained, “The school is in a mountainous area and we’re not talking about packed streets. The girl walked in unmarked paths and there, it seems, she was ambushed and kidnapped.”

There are claims that Katusa passed a polygraph test. However, Fried clarified that he only passed the standard beginning questions, such as his age, where he lives and his hobbies. Regarding questions relevant to the case, he was found to be lying.

More so, though Katusa has an alibi, the woman providing it “had a relationship of employment with him,” said Fried.

The attorney defended his client’s integrity by noting, “The girl provided testimony in four different interrogations, and she provided absolute identification of the guilty party,” he said. “This is a person who is familiar to her from school…She also gave exact details about the apartment, about the vase of flowers, and everything matches the scene.”

Fried added, “The girl told her version, and in my entire life I’ve never seen children lying in an interrogation. She has no motive for lying. She described things exactly as she saw them.”

Oversights have also complicated the investigation. Despite the fact that the pediatrician, who examined the child, did not report the crime to authorities or send her to the emergency room, the doctor did write the rape in her report.

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A Platinum Verdict – Black Elk Guilty, PPVA Scheme Not Guilty

MarkNordlicht

Jury finds Platinum Partners founder guilty in fraud trial

The verdict was handed up by a jury in federal court in Brooklyn following a nine-week trial. Platinum’s former co-chief investment officer, David Levy, was convicted of the same conspiracy and securities fraud charges.

A third defendant, former Chief Financial Officer Joseph SanFilippo, was cleared of all charges against him.

Prosecutors charged Nordlicht, Levy and SanFilippo with fraud in December 2016, saying they and others at Platinum bilked investors out of “millions and millions of dollars” in two different schemes.

In one scheme, the three men were accused of lying to investors about the health and liquidity of its flagship fund, Platinum Partners Value Arbitrage. Prosecutors said Platinum operated “like a Ponzi scheme” by using new money to fund redemptions by earlier investors, a practice referred to internally as “Hail Mary time.”

The jury, however, rejected those charges, finding all three men not guilty.

In the second scheme, according to prosecutors, Nordlicht and Levy defrauded bondholders in Black Elk, an oil exploration company Platinum owned, by diverting money from asset sales to Platinum ahead of Black Elk’s 2015 bankruptcy. The jury found them guilty of two counts of conspiracy and one count of securities fraud related to that scheme.

SanFilippo was not charged with taking part in the Black Elk scheme.

Lawyers for Nordlicht and Levy were not immediately available for comment.

Kevin O’Brien, one of SanFilippo’s lawyers, said in an email: “Joe is thrilled by the jury’s verdict of acquittal, which affirms what we have consistently maintained, that this case never should have been brought.”

Platinum’s assets are being liquidated under the oversight of court-appointed receivers.

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Epstein and Smerconish – When a Man’s Front Door is More Important than the Many Child Victims of a Sex Trade??

Michael Smerconish

Michael Smerconish calls out ‘the feds’ for damaging Epstein’s door

 

Radio host Michael Smerconish went on a bizarre tangent on his SiriusXM show Tuesday as he sparred with callers over whether the door of Jeffrey Epstein’s Upper East Side mansion should’ve been damaged in the raid by feds over the weekend.

Damaged caused to the front door of the home of Jeffrey Epstein.
Damaged caused to the front door of the home of Jeffrey Epstein.Christopher Sadowski

“The SDNY indictment and excellent reporting by @jkbjournalist are convincing that Jeffrey Epstein is bad guy who has done terrible things and needs to be severely punished,” tweeted Smerconish, who hosts “The Michael Smerconish Program” on Sirius’ POTUS Channel. “F him. But could the feds not have used a locksmith instead of a crowbar on those doors?”

Smerconish’s case for the preservation of the convicted pedophile’s home furnishings set off a firestorm Tuesday as callers dialed in to question whether his outrage was misdirected.

Enlarge ImageJeffrey Epstein
Jeffrey EpsteinREUTERS

“You are wasting too much time on the outrage of doors when there’s way more important things,” one caller said.

But the host doubled down on his comments saying, “I saw things that I thought was really odd or misplaced and I decided to comment.”

Smerconish insisted that he wasn’t defending Epstein but took issue with how the feds gained entry into his $77 million home at Nine East 71st St.

“I believed Jeffrey Epstein has slept in this house for the final time,” Smerconish said. “It’s not about him. It’s the case and how the government approached it.”

 

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Epstein and AG Barr – Another Connection in the Govt. to the Epstein Saga

AG Barr recuses himself from Jeffrey Epstein case, citing past legal work

Attorney General Bill Barr said Monday he has recused himself from the high-profile case against financier and registered sex offender Jeffrey Epstein, citing his past legal work.

Barr, during a visit to South Carolina on Monday, was asked whether he planned to get involved in the Epstein case, which involves accusations the 66-year-old hedge fund manager preyed on “dozens” of underage victims—some as young as 14. He has pleaded not guilty to sex trafficking.

“I’m recused from that matter because one of the law firms that represented Epstein long ago was a firm I subsequently joined for a period of time,” Barr told reporters.

Barr joined the law firm Kirkland & Ellis in 2009, which had represented Epstein during a separate case against him in 2008.

PELOSI CALLS FOR ACOSTA TO STEP DOWN OVER EPSTEIN PLEA DEAL, HITS TRUMP

But Barr is not the only Trump administration official faced with questions over the Epstein case—Labor Secretary Alexander Acosta has faced scrutiny over his handling of that 2008 case. Acosta, who was U.S. attorney for Florida at the time, helped Epstein to secure a plea deal that resulted in an 18-month sentence—he served just 13 months. The deal was criticized as lenient because Epstein could have faced a life sentence. Acosta negotiated a deal that resulted in two state solicitation charges, but no federal charges.

Acosta has defended the plea deal as appropriate under the circumstances, though the White House said in February that it was “looking into” his handling of the deal.

Epstein was charged this week with sex trafficking and conspiracy during the early 2000s. Epstein pleaded not guilty on Monday in New York City federal court.

“The victims described herein were as young as 14 years old at the time they were abused…and were, for various reasons, often particularly vulnerable to exploitation,” prosecutors wrote in court documents. “Epstein intentionally sought out minors and knew that many of his victims were in fact under the age of 18.”

Epstein allegedly created and maintained a “vast network” and operation from 2002 “up to and including” at least 2005 that enabled him to “sexually exploit and abuse dozens of underage girls” in addition to paying victims to recruit other underage girls.

BILL CLINTON ‘KNOWS NOTHING’ ABOUT EPSTEIN’S ‘TERRIBLE CRIMES’

Prosecutors also allege Epstein “worked and conspired with others, including employees and associates” who helped facilitate his conduct by contacting victims and scheduling their sexual encounters with the 66-year-old at his mansion in New York City and Palm, Beach, Fla.

Victims would be paid hundreds of dollars in cash by either Epstein or one of his associates or employees, according to prosecutors. The 66-year-old also allegedly “incentivized his victims” to become recruiters by paying the victim-recruiters hundreds of dollars for each girl brought to him.

Epstein was once friends with former President Bill Clinton, Britain’s Prince Andrew and President Trump. He was arrested Saturday after his private jet touched down from France.

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Labor Secretary Alexander Acosta and the Secret Settlement Allowing Epstein to Continue to Destroy Lives [VIDEO]

 

Published on Feb 22, 2019

A federal judge ruled Thursday that prosecutors led by current Labor Secretary Alex Acosta broke the law when he was U.S. attorney in Florida. Acosta’s team allegedly concealed a plea agreement from more than 30 underage victims who had been sexually abused by billionaire Jeffrey Epstein. Amna Nawaz talks to Julie Brown of the Miami Herald about the troubling details she heard from victims.
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A Teen Runaway – The Grooming of Victoria Roberts Jeffrey Epstein’s “Lolita Express” [VIDEO]

 

Published on Nov 30, 2018

Virginia Roberts was working at Mar-a-Lago when she was recruited by Ghislaine Maxwell to be a masseuse to Palm Beach hedge fund manager Jeffrey Epstein. She says she was groomed for sex with him and his associates, attorney Alan Dershowitz and Prince Andrew. Read our full Perversion of Justice investigation into the Jeffrey Epstein case.
Explore Epstein’s circle of powerful friends and associates: https://hrld.us/2Av4Z46
A timeline of the Epstein case: https://hrld.us/2AzbNNV

Two of the World’s Most Brilliant Legal Minds, Jeffrey Epstein, a Feud and the Underage Girls who were Victimized

miamiherald.clip.
https://www.miamiherald.com/news/local/article222091270.html

Dershowitz v. Boies: Jeffrey Epstein case unleashes war between two legal Goliaths

It’s a high-stakes war between two of the country’s most powerful lawyers. Their feud, simmering for years, involves accusations of extortion, surreptitious recordings, unethical conduct and underage sex trafficking.

Harvard lawyer Alan Dershowitz has filed four bar complaints in three states — all of which have been dismissed — in a quest to disqualify lawyer David Boies and one of his partners who represent a woman accusing Dershowitz of sexually abusing her when she was underage, newly filed court records show.

The pugnacious Dershowitz, 80, and the equally zealous Boies, 78, have been sparring for decades. In recent years, both have suffered damage to their storied legacies, making this latest clash between the two legal titans one of the most important of their half-century careers.

Dershowitz, professor emeritus at Harvard Law School and one of the nation’s most iconic civil libertarians, has defended such notorious clients as Claus von Bulow, Mike Tyson and O.J. Simpson. But after four decades of legal accolades, he is now facing a sex scandal and is forced to clear his own name at a time when he’s being confronted by a barrage of attacks on social media as one of the most fervent legal defenders of President Donald Trump.

Boies has embraced high-profile liberal causes and made history with landmark court cases: He represented Al Gore in the Florida recount dispute in the 2000 election, which he lost; successfully defended press freedom in a lawsuit involving “60 Minutes”; and in 2013 secured a Supreme Court victory overturning a California ban on same-sex marriage.

But Boies’ image has also been tarnished in recent years by his aggressive, and often ruthless, representation of controversial clients such as Hollywood film mogul and accused sex predator Harvey Weinstein and Elizabeth Holmes, founder of a blood-testing company that allegedly defrauded investors and clients.

Dershowitz’s bar complaints — disclosed here for the first time — provide a window into the behind-the-scenes legal drama between two of the world’s most brilliant lawyers. It also reveals new details about an explosive sex trafficking case involving Dershowitz’s former client, Jeffrey Epstein, a New York multimillionaire who, according to investigators, molested more than three dozen girls in Palm Beach in the years 1999 to 2006.

David%20Boies.jpg

David Boies’ fame was cemented by his advocacy in many high-profile cases, including arguing Bush v. Gore in front of the United States Supreme Court on behalf of the Democrat. He has also represented Virginia Roberts Giuffre, a victim of Jeffrey Epstein, who accused both Prince Andrew and Alan Dershowitz of having sex with her at Epstein’s direction. Andrew Harrer Bloomberg

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Epstein to Face Federal Underage Sex Trafficking Charges (Many Years too Late)

https://www.nbcnewyork.com/on-air/as-seen-on/Billionaire-Jeffrey-Epstein-to-Face-Judge-Monday_New-York-512327042.html

220px-Jeffrey_Epstein_mug_shot

Who Is Billionaire Jeffrey Epstein, Expected to Face Federal Underage Sex Trafficking Charges in NYC?

 

Investigators collected evidence from the Upper East Side home of billionaire Jeffery Epstein. Ida Siegal reports.

(Published Sunday, July 7, 2019)

Jeffrey Epstein’s background, his past guilty plea, his connections to high-profile U.S. and foreign government leaders and his federal non-prosecution agreement have been continually reported on for nearly a decade. But who is this billionaire, who owns an island and is expected to face federal underage sex trafficking charges in New York City? Here’s a primer on the man — and how we got here.

WHO IS JEFFREY EPSTEIN?

Jeffrey Epstein was born January 20, 1953, and has reportedly made his billions first as an options trader in the late 70s working for the now defunct Bear Stearns and later as an investor for his own financial management firm. One of his routes to success, according to an interview in Vanity Fair, was to be the primary investor and money manager for Limited Brands founder Leslie Wexner. (Limited Brands owns Victoria’s Secret, PINK, and Bath & Body Works). Epstein apparently parlayed his wealth and his success to go on to establish numerous political and social contacts in the Palm Beach area and across the globe.

Some of those political connections include President Donald Trump and former President Bill Clinton. Trump spoke of Epstein in a 2002 interview with New York Magazine saying, “I’ve known Jeff for fifteen years. Terrific guy, adding, “He’s a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side. No doubt about it – Jeffrey enjoys his social life.”

Billionaire Jeffrey Epstein Arrested: Sources

[NY] Billionaire Jeffrey Epstein Arrested: Sources

Jeffrey Epstein, a wealthy, politically connected Florida financier, was arrested in New York on Saturday evening on sex trafficking charges, sources tell NBC 4 New York.

(Published Saturday, July 6, 2019)

Former President Clinton flew on one of Epstein’s planes on several occasions according to flight records reviewed by NBC News.

Epstein maintains addresses on his own island in St. Thomas, the Upper East Side in New York City, Paris, New Mexico, and Palm Beach, according to his sex offender registration in the Florida Department of Law Enforcement index.

He has a Rolls Royce, a Bentley, several Harley Davidson motorcycles, and nine Mercedes-Benzs registered or owned in his name, according to Florida law enforcement records reviewed by NBC News.

THE EPSTEIN INVESTIGATION

Jeffrey Epstein was formally put under investigation by the Palm Beach Police Department on March 15, 2005. According to a Palm Beach Police Department case file obtained by NBC News through a public records request,  investigators sought to charge Epstein, and his assistants Sarah Kellen and Haley Robson with crimes tied to Epstein’s alleged sexual behavior with underage girls at his home. According to the police files, Palm Beach investigators interviewed five victims and 17 witnesses.

The police files state that Epstein brought the women to his house under the guise that they would give him massages. Police say those massages would turn sexual. Some of the underage victims told police that Epstein would use sex toys on them while he received a “massage.” In another instance, one girl was allegedly paid to have sex with one of Epstein’s female assistants.

One witness stated that Epstein had a dozen roses sent to the local high school for one of the girls who allegedly had given Epstein a massage. According to the police files, a former housekeeper told law enforcement that  Epstein would receive three massages a day.

The files also state that Epstein would pay the victims $200-$1,000 per massage and that Epstein had several covert cameras installed in clocks in his residence.

Ultimately, by the spring of 2006, the Palm Beach Police Department sought to have Epstein arrested and charged with four counts of unlawful sexual activity with a minor and lewd and lascivious molestation.

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Chareidim in England and Education – Campaign Against Inspectorate Stopped

Charedi Activist Drops Campaign Against Ofsted

Charedi activist Shraga Stern has agreed to stop his public campaign against Ofsted.

London’s charedi community has been split over how to handle the inspectorate’s attitudes toward Jewish schools. Chinuch UK preferred a diplomatic approach toward the Department of Education and its inspectorate whereas Stern initiated a high-profile campaign accompanied by the threat of legal action.

Last week, Dayan Ephraim Padwa of the Union of Orthodox Hebrew Congregations asked Stern to back down from his campaign. Stern told The Jewish Press, “I’ve always worked under the direction of the senior rabbis of the charedi community. I continue to do so. At the moment I am ceasing campaigning on their instructions.”

He added that he was sure his high-profile campaign has borne fruit and “now is the time for open dialogue and round-the-table discussions.”

Stern’s tough stance, however, seems to have been taken up by educational consultant Michael Cohen, who called, in the Jewish Tribune, for the dismissal of Ofsted head Amanda Spielman, whom he accused of conducting an “anti-religious programme.”

He suggested Jewish schools should not allow Ofsted to inspect their schools; alternatively, they should or arrange school outings on inspection days. He wrote, “As any kind of trust and confidence in Ofsted has been destroyed, our schools and mosdos should become more strident and assertive in dealing with Ofsted inspections.”

Education in New York – Taxpayer Subsidizing Yeshiva Education Without Standards – PEARLS Statement

PEARLS: Statement on New Education Department’s Proposed Regulations

As the New York Department of Education continues to attempt to establish and enforce guidelines for private schools, PEARLS, which advocates for Frum Schools in NY has released the following statement:

The regulations proposed by the State Education Department disregard the concerns expressed by more than 1,000 private schools from every segment of the nonpublic school community.

The proposed regulations disregard the long history of success demonstrated by private schools across New York State, they undermine the choices made by parents who choose private schools for their children, and they substitute the education bureaucracy in Albany for the private school leadership sought by parents and students.

The regulations proposed today are nothing more than a repackaging of the guidelines that were opposed by the entire private school community last Fall and declared null and void by the Albany Supreme Court this Spring. It is disappointing that the State Education Department failed to engage in dialogue with private school leaders prior to issuing these proposed regulations.

We remain willing to work collaboratively with the State Education Department. But we will continue to oppose SED’s attempt to impose top-down mandates on hundreds of thousands of private school children across the State. These proposed regulations will not be any more successful than the failed and rejected guidelines they replaced. We therefore urge SED to work with the private school community in a manner that respects the success, autonomy, history and purpose of private schools.

The recreation of Jewish life and learning in the United States after the destruction of the Holocaust was nothing short of miraculous. In 1944, there were two dozen Jewish schools in New York, with no more than 5000 students. Today, there are 165,000 students enrolled in more than 400 Jewish elementary and high schools in New York. State regulations cannot be allowed to hinder our mission or hamper our growth.

 

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Yehuda Sabiner, the Gur Yeshiva Community Should be Proud – Chesed… Save One Person and Save the World

Yehuda Sabiner by the Forward

Meet Israel’s First Hasidic Med School Student

Does every Jewish mother want her son to become a doctor? Not always. If you’re a member of the ultra-Orthodox Jewish community in Israel, where many young men are expected to spend their days learning Torah full-time, many mothers in these communities would much rather say, “my son the rabbi” than “my son the doctor.”

And while there are ultra-Orthodox doctors, many of whom immigrated from abroad or found religion later in life, a Hasidic doctor who grew up in a local Hasidic community is as rare as a unicorn.

For Yehuda Sabiner, the path to medical school was an unorthodox one. The son of the dean of a Hasidic Gur yeshiva in Jerusalem, Sabiner, now a 29 year-old father of three, said that he has wanted to enter the medical profession since he was four years old, when he innocently asked his pediatrician what he would have to do to become an MD.

When he told his parents that he wanted to be a doctor, they saw it “as a cute thing that children say,” he recalled. But when he continued insisting on his chosen profession at age 16, it ceased being amusing and became a source of concern for members of his family.

“As I grew up, I saw you can do it as a religious mission, as hesed[lovingkindness], which is very important part of the Jewish tradition. My mother had tears in eyes and said ‘I thought we passed the hard times,’” Sabiner told the Forward. But as he continued in yeshiva, getting high marks in Talmud and appearing to be on track to eventually become a rabbi or a religious court judge, his parents began to relax, although he would occasionally bring up the subject of medicine throughout.

While the ultra-Orthodox world is anything but monolithic, its overall workforce participation is significantly lower than in the national-religious and secular sectors, and many members of the most fervent Haredi communities shun secular studies and higher education.

According to figures released by the Israel Democracy Institute in December, some 45 percent of Haredim live in poverty and just under half of Haredi men are unemployed. Employment figures tend to be lower among members of “Lithuanian” or non-Hasidic Haredim. Despite these figures, however, there has been an increase in the number of Haredim studying for professional careers and the average Haredi monthly income increased by eight percent between 2015-16, “reflect[ing] a rise in ultra-Orthodox salaries among those employed,” according to the IDI. These gains can be credited to the “rise in the number of well-educated members of the ultra-Orthodox community and the advancement of ultra-Orthodox workers in the labor market (as a result of a combination of appropriate skills and education, and government programs).”

Sabiner’s dreams did not fade after his marriage. When he again announced that he intended to become a doctor, his parents replied that it was an issue for him and his wife to handle, while his new bride broke out crying.

“It almost destroyed our marriage,” he recalled, describing how her wife had thought she was marrying a future rabbi.

However, she soon had a change of heart and “came to me with tears in eyes, still upset, and said she won’t be the one to destroy my dream.”

Enrolling in a academic preparatory program run by the Technion – Israel Institute of Technology, Sabiner worked hard to make up all of the education that he missed attending a Haredi school. “I didn’t know anything, even the ABCs, [certainly] not to write or read in English,” he said. Studying late into the night, his wife helping him, and he gradually began to approach the level of education necessary to undertake medical studies.

After he left the Technion’s Haredi program and integrated into their primary track together with secular students, social life was initially awkward but he was soon accepted by his peers as just another student.

“The beginning was very strange,” he recalled. “It already began in the entrance of the building. The guard stopped me and wouldn’t let me go in: ‘What are you doing here?’ Girls were terrified to sit next to me, but after two weeks the ice melted and I have probably the best fiends of my lifetime here.”

Back in the Hasidic community, Sabiner initially kept his studies secret, but after he let the cat out of the bag he said he was surprised by the response.

“I give classes in my shul about halacha and ethics and medicine,” he said. “I cannot say that I’ve had any problems in the last couple of years.”

And despite their initial reluctance to support his dream, once he had chosen his path, Sabiner said that his parents became his biggest supporters, both financially and emotionally, giving him the breathing room to finish his studies.

 

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NJ Enabling Irresponsible Budget from Wholly Unreliable Lakewood School District and its Overpriced Attorney

Lakewood schools reopen, banking on $36 million loan from NJ

LAKEWOOD – A shutdown that forced about 1,000 special education students to stay home Monday has ended and the Lakewood Public School District is open for business on the promise of a $36 million loan from the state.

The district was shuttered for a single day after the school board reversed course, unanimously voting to void a budget it had passed a week earlier to avert a shutdown. Without a budget, no money could be spent, according to school board attorney Michael Inzelbuch.

Inzelbuch blamed the shutdown on the state, but critics of the district are pushing back calling the closure a stunt.

Gov. Phil Murphy had slated an additional $30 million to go to Lakewood, but when the Legislature drafted its budget it axed the funding. District leadership refused to sign off on the $171 million budget without knowing where that $30 million would come from, saying it was necessary to provide a thorough education and balance the books.

But even without the $30 million, the district receives other revenue that it could have used to keep doors open Monday, according to David Sciarra, executive director of the Education Law Center. Among those other sources are $102 million in local tax levy and tens of millions in other state aid, according to the district’s budget.

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Evangelical-Funded Israel-Related Charity Head Resigns Amidst Sexual Harassment Allegations

IFCJ HEAD QUITS UNEXPECTEDLY AS SEXUAL HARASSMENT LAWSUIT TO GO AHEAD

A decision to proceed was handed down by a district court in Illinois last month after the IFCJ reportedly submitted an appeal to dismiss the case

In a shock move, the CEO of International Fellowship of Christians and Jews George Mamo has quit.

This comes following accusations that he sexually harassed two of his employees.
According to an article by Haaretz, his decision to resign comes just after a US court decision was made to move ahead with the sexual harrassment lawsuit brought forward by the two former employees.
A decision to proceed was handed down by a district court in Illinois last month after the IFCJ reportedly submitted an appeal to dismiss the case.
The court rejected the appeal.
Sources told Haaretz, that despite the pending lawsuit, it’s believed he was set to stay on as CEO for another two years.
The court documents say that the one of the women charged that he had “stared at her breasts… refused to promote her because she would not have sex with him,” while the other woman “reported similar conduct” and that he had fired her because she was a woman.
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ADDITIONAL READING:

George Mamo, CEO of the International Fellowship of Christians and Jews, is accused of harassing two female employees; IFCJ raises about $140 million a year for Israel

The CEO of the International Fellowship of Christians and Jews the largest private philanthropy active in Israel is stepping down unexpectedly. George Mamo s resignation comes on the heels of a U.S. court…

Jeff Ballabon – The Dangers to Secular Jews When those Secular Jews Agree that non-Orthodox are Not Really Jews, Trump

Trump’s Orthodox Whisperer

DURING A FOX BUSINESS INTERVIEW IN MARCH, Donald Trump’s former campaign advisor Jeff Ballabon called Minnesota Rep. Ilhan Omar “filth.” When host Stuart Varney suggested that, perhaps, “filth” might have been too strong a word for the Muslim congresswoman and Somali refugee, Ballabon doubled down. “She is a filthy disgusting hater,” he spat. It had been over a month since the start of the media fracas over Omar’s tweets criticizing the pro-Israel lobby, for which she faced calls to resign as well as death threats. By April, a 55-year-old Trump supporter was calling the congresswoman’s office and threatening to “put a bullet in her fucking skull.”

At first glance, Ballabon’s Fox appearance might seem like just another iteration of what has become a sad, dangerous routine in American politics—another Trump surrogate spewing invective and riling up the base on daytime TV. But Jeff Ballabon is not just another Trump surrogate.

A former media executive—he once headed communications for CBS News—and a veteran Republican operative, Ballabon has worked for roughly two decades to turn Orthodox Jewry into a mature political force allied with the Republican Party. Now, under Trump, that alliance has begun to pay big dividends—not only on Israel, long a focus of Orthodox politics, but on domestic issues as well. Indeed, never before has Orthodox Jewry, and the Jewish right more broadly, had such access to a president. 

With this increased power and influence has also come a change in political style—one that Ballabon’s comments in March, as well as his Twitter feed at all times, exemplify. Angry, vitriolic, even vulgar, contemptuous of “political correctness” and unafraid to traffic in racist tropes, this is Jewish politics in a new key—and Ballabon wants to be a leading composer. His transformation from behind-the-scenes campaigner to aspiring movement leader reflects the emergence of an assertive, aggressive Orthodox Jewish right that has already reshaped American politics—as well as intra-communal Jewish politics—and could continue to for years to come.

Ballabon’s path from political fixer to Trump proxy maps the Republican Party’s trajectory from the “compassionate conservatism” of the George W. Bush era to the gleeful cruelty of Trump. He began his career not on the fringes of the right but at its center—as legislative counsel for Missouri Sen. John Danforth, who by today’s standards would be considered a moderate. In the 1990s and early 2000s, Ballabon cultivated close ties with the Christian Right, then at the apex of its power, which he identified as both a potential model for a new Jewish politics and a more natural partner for Orthodox Jewry than liberals in the Democratic Party, which was (and remains) the political home for the majority of American Jews.

After Bush’s victory in 2000, Ballabon became, as the right-wing Jewish paper The Algemeiner put it, the administration’s “unofficial liaison to Orthodox Jews.” In 2004, he worked on the Bush-Cheney reelection campaign, during which he devised a strategy to turn the Orthodox into reliable Republican voters. He succeeded. In Long Island’s heavily Orthodox “Five Towns,” for instance, support for Bush jumped from less than 30% in 2000 to more than 60% in 2004; in the ultra-Orthodox Rockland County enclave of New Square, which went for Al Gore in 2000, Bush won in 2004 with roughly 98% of the vote. The Orthodox communities that shifted to the right in 2004 have, for the most part, heavily favored Republicans ever since

Having made his name as the keeper of the keys to the Jewish vote—Ballabon was the subject of a fawning 2005 New York Observer profile by Ben Smith, now the editor-in-chief of BuzzFeed News—he would go on to work for several Republican campaigns, among them Mitt Romney’s 2012 presidential bid.

Today, Ballabon has become one of President Trump’s most prominent Jewish surrogates, making regular appearances on various Fox News shows and weighing in on Jewish-related matters as an authentic, kippah-wearing spokesman. (Ballabon comes from a non-hasidic Haredi, or ultra-Orthodox, community.) He has appeared on the America First radio show hosted by Sebastian Gorka—a member of the Viteszi Rend, a racist Hungarian nationalist order founded by Hungary’s antisemitic, Nazi-collaborationist leader, Admiral Miklos Horthy—and he has defended Gorka from charges of antisemitism. While Instagram grifter Elizabeth Pipko has played the face of the bungled “Jexodus” initiative—which claims to be leading American Jews out of a Democratic Party turned irrevocably antisemitic—it is Ballabon who has led the astroturf movement from behind.

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More Rabbinical Insanity – From the “Council of Torah Sages” – Ultrasounds, If Only Men Carried the Babies…

Ultrasound

Haredi rabbi: Don’t do ultrasounds during pregnancy

Rabbi Shalom Cohen, President of the ‘Council of Torah Sages,’ says waiting for the doctor means there’s going to be a blow afterwards.

“Council of Torah Sages” President Rabbi Shalom Cohen on Tuesday told his followers not to do any ultrasounds during pregnancy, Kikar Hashabbat reported.

According to Kikar Hashabbat, former Sephardic Chief Rabbi Shlomo Amar was also present at the gathering, as were rabbis from the Bonei Olam organization, which helps couples pay for fertility treatments.

“G-d sends the cure before He sends the ailment,” the site quoted Rabbi Cohen as telling a gathering. “‘To send the cure before the ailment’ means that when you make the ‘cure’ ahead of time – you need to make sure that the ailment will not, G-d forbid, follow it.”

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Systemic Failures in Israel’s Handling of Sex Abuse Cases – Silent Complicity

Child advocates blast systemic failures in Israel’s handling of sex abuse cases

JERUSALEM (JTA) — In April, Israeli police announced the arrest of a 22-year-old man in Beit Shemesh accused of multiple counts of child sexual assault.

Short of celebrating the arrest of an abuser, local victims’ rights advocates took the authorities to task.

Shana Aaronson, head of the Israeli branch of the New York-based Jewish Community Watch organization, took to social media, describing in a Facebook post how authorities and the Beit Shemesh community ignored a disturbing pattern of behavior by the predator in question, who had previously served time for abuse.

“Shortly after he was released” — three years ago, after his first detention — “I started getting The Phone Calls,” she wrote.

“Numerous community members calling to share that he’s hanging out with kids, a lot, and they are very concerned. I encouraged them strongly to warn the parents. But, you know, it’s awkward. No one ever wants to be the killjoy calling up a neighbor to share the lashon hara [prohibited gossip] that the kindly young man who’s taken their kid under his wing is a convicted child molester. Then the next wave of phone calls started. He’s volunteering at local organizations, and using his status there to pick up kids.”

According to Aaronson’s telling, the young man even called her to volunteer at Jewish Community Watch, asking to “mentor children who had been sexually abused.”

The police, she explained to the Jewish Telegraphic Agency, knew he was dangerous but were restrained from acting because nobody with firsthand knowledge of the abuse had been willing to come forward. Israel, unlike the United States, does not keep a registry of sex offenders.

As a result, Aaronson wrote, for two years “it seems a community’s worth of people has been watching while a child molester strategically groom[ed] and prey[ed] on his victims.”

“But after all, nobody likes to be a killjoy.”

Israel has see an overall increase in reporting of incidents dating back to the beginning of the decade. But several recent incidents here have highlighted what advocates like Aaronson describe as a systemic failure of both the government and civil society to adequately deal with the issue of child sexual abuse.

In May, the state comptroller’s annual report revealed that 60 percent of Israelis jailed for sexual crimes ended up being released without undergoing any sort of therapeutic treatment to prevent recidivism.

The report also found that there was increased monitoring by police of offenders after their release. And while there were more investigations into incidents of pedophilia than in previous years, seven out of 10 cases ended up being shut down without an indictment.

Some advocates believe that part of the problem may be ingrained in Israel’s political culture. Tough slander laws here make it hard for victims to accuse their abusers publicly. Meanwhile, advocates have said that sentencing guidelines are inadequate. There has also been a strong taboo against reporting abuse among members of haredi Orthodox communities.

According to a recent investigation by Israel’s Channel 13, Deputy Health Minister Yaakov Litzman was alleged to have improperly intervened to aid at least 10 sex offenders from Israel’s haredi, or ultra-Orthodox, community. This comes after earlier reports that Litzman, who himself is haredi, had been questioned by police over suspicions that he had attempted to prevent the extradition of accused child molester Malka Leifer to Australia.

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The Remarkable Truths About Platinum Partners and the Traps Set to Ensnare Naive or Trusting Investors [Opinion]

“Rav Safra was approached to sell something he had and was offered a price which suited him, but he was unable at the time to signify his consent because he was reciting his prayers and was unable to interrupt them. The prospective buyer, under the impression that the rabbi had rejected his bid, kept on increasing the price but the rabbi insisted on selling for the original price to which he had consented “in his heart.” Naturally, this kind of exemplary conduct was not intended for all, otherwise it would not have been recorded for a saintly man like Rav Safra.
But the stern injunctions throughout Jewish literature against cheating and dishonesty in business affairs and in other areas of life are directed toward every Jew, as when the prophet says of his people: “They have taught their tongue to speak lies, they weary themselves to commit iniquity” (Jeremiah 9:4).”
https://www.myjewishlearning.com/article/truth-and-lies-in-the-jewish-tradition/

platinum letter judge-2_Page_1platinum letter judge-2_Page_2

The Illusions We Want to Believe About People – Platinum Parnters

Simply Because an Investment Manager is Invested in the Fund he Manages Does not Mean he Cannot Defraud Other Investors in the Same Fund –

[OPINION Edited 7.2.19 11:46am]

In his closing statement, Jose Baez, the attorney for Mark Nordlicht asked rhetorically, how Mark Nordlicht could have defrauded investors when he himself was invested. “For you to believe he defrauded them, he would have had to defraud himself,” Baez said.

Read more at: here.

But that is a far cry from the realities of our financial markets. That was the bait for the trap Nordlicht set for investors. Most hedge fund managers are also investors who have money invested in their own schemes, not enigmatic but rather a show of legitimacy intended to entice new money. If Nordlicht had not been invested, he would have lacked credibility and would not have attracted investors. 

Baez, an incredibly gifted attorney, presented a remarkably simplistic view of hedge funds and private equity funds to the jury. Fund managers don’t just invest and get returns on their investments. They earn (a loaded word in the case of Platinum) management fees and dozens of other benefits, depending upon how the fund is established. Nordlicht was well compensated during his Platinum tenure. There were so many funds, so many scams, so many left bereft of their financial futures and Nordlicht was enriched.

The fact that Mark Nordlicht had deferred compensation of $55,000,000.00 at the end of the day, which he allegedly lost as a result of the fall of his empire, does not speak to what money he had received up until that point – on the order of tens of millions. He had been paid management fees and other benefits that were not clearly elaborated during the trial. He had been enriched when the fund was prospering. The problem was, Nordlicht’s kingdom was made of glass.

Baez claimed that the government told lies, many investors made money. The fact that many investors profited from their investment is not mutually exclusive of those defrauded in the scheme. Were that to be the case, Madoff would be a free man.

Hedge Fund Managers nearly always invest in their funds. Investors frequently make money in fraudulent schemes, never the wiser to having been initially defrauded. This is not uncommon. Hedge fund managers can simultaneously defraud investors and have their own money locked up in the fund; and it is an absurdity of epic proportions to assume that because they are invested, they are judgement proof for the unthruths they tell their investors. Many of Madoff’s investors got very wealthy on Madoff’s trickery, whether they knew of frauds committed or otherwise. 

With respect to Platinum, the “deferred compensation” and the other money Nordlicht had tied in the fund, the role he played in keeping each entity wholly compartmentalized, the return of the money to the Holocaust survivor as a preferential withdrawal were all part of the show. These particulars, are evidence of guilt as opposed to innocence, they point to the premeditation involved. That they added a perception of honesty, credibility and integrity was an illusion created to ensnare new investors. And he should be held to account. 

When a hedge fund manager, a private equity company, an investment group defrauds investors it undermines the integrity of the entire financial investment culture. When Jewish hedge funds do it, they undermine the worldview of Judaism and Jewish morality. Both have unintended consequences and each must be addressed with an equal level of gravity. 

If the defendants are acquitted of the charges against them, both with respect to the Platinum Partners Value Arbitrage Fund and with respect to Black Elk, there will be little need to have a Securities and Exchange Commission in place because their acquittal will invite market participants to follow in the footsteps of the defendants in the current case. Moreover, an acquittal will pave the way for these men to do the same again, just in a different format. It will render each defendant now and in the future impervious, virtually untouchable. In addition, an acquittal will leave each defrauded investor with little recourse and it will set a bad example for the future of Jews, particularly those honest among us engaged with and perhaps more honestly, married to the financial world. 

In the late 1990’s Murray Huberfeld and David Bodner (two of the earliest investors in Platinum and their precursor entities) paid someone to take their SEC registration exams. To an outsider looking in, this payment was not only a sign  of a wholesale willingness to cheat the system but something more nefarious. It was a show of fundamentally and unequivocally morally bankrupt behavior. 

Huberfeld and Bodner were let off with little more than a slap on the wrist, setting an example for future generations, placing them in the bubble of the impervious, two of the untouchables. Nordlicht, Levy, SanFilippo and the others have been  disciples, learning a craft. The stage Huberfeld and Bodner set for all in their sphere of influence was a profoundly public license to skirt the laws, or more accurately to plow right through them. 

It is now nearly twenty five years since those events; and history repeats itself.  All of the men involved in these grand and elaborate schemes have mentored others. They, along with their Platinum understudies, have repeatedly exhibited a pattern and practice of skirting the laws, shared by so many Jewish men within their social sphere.

It is about time that the legal and judicial system put an end to it. The honest should not be forever left at the mercy of the half-truths of those who have no problem telling them, and have the money to defend themselves on the rare occasion they get caught.  

Lakewood, NJ – Interesting How the Board Voted to Continue Busing Yeshiva Kids to the Yeshivas – Post Shut Down

LAKEWOOD SCHOOLS SHUT DOWN WITHOUT $30M AID — REQUIRED SERVICES ONLY

LAKEWOOD — The school district shut down most operations Monday after Gov. Phil Murphy signed a budget without $30 million school officials were counting on — saying they couldn’t operate the district until a solution is found.

In an emergency meeting Monday, the district authorized funding for “only those programs mandated by the New Jersey Department of Education and required for health and safety until such time a budget is approved.”

Note: This story has been updated following the emergency board meeting. An earlier version discussed the situation as it stood before the board meeting, when all services were canceled.

The board also voted to continue its support of the Lakewood School Transportation Authority and to ensure that courtesy busing continue for public and non-public students. The LSTA had ceased to exist at 11:59 p.m. on Sunday with the lack of a budget. Those services weren’t provided on Monday, after the district warned parents depending on them to make other plans.

The board also approved continued funding for services for non-public students and those attending “schools for the disabled,” required by the superintendent and state monitor. That also includes security and access to trips, playground equipment, home instruction.

The board passed several resolutions including one that puts all non-essential staff on furlough until further notice.

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Lakewood, NJ – the financial Pillaging of a Bucolic Little Town’s School District Using the Ultra-Orthodox Yeshiva Handbook

education_sign_resized

Lakewood schools to close? Parents told to make ‘alternate plans’

Above: What can be done to improve relations between Orthodox and non-Orthodox communities?

LAKEWOOD — The township’s public schools may close Monday as a result of the financial pressures facing the district, where officials say money will run out before the end of the next school year.

Administrators said on the district website that parents should make “alternate plans” for their children. School leaders called it a “precautionary measure” due to the “unknown fiscal situation.” 

Last week, the Lakewood school board approved a 2019-20 budget that the district doesn’t have the money to fund. Its lawyer and several administrators also went to court Wednesday to plea for help, saying the district cannot afford to keep schools open beyond March.

Special education and transportation account for about 40 percent of the public schools’ expenses. The district enrolls about 6,000 students, but also is responsible for costs of transportation and certain services for Lakewood’s more than 30,000 private school children.

Administrators have sought Trenton’s help in closing the school district’s growing budget holes, using combinations of grants and loans.

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A Platinum Coated Story – To Believe He Committed a Fraud He Defrauded Himself? – Great Twist

Law360, New York (June 26, 2019, 9:31 PM EDT) — An attorney for Platinum Partners co-founder Mark Nordlicht on Wednesday sought to turn the tables on prosecutors in closing arguments, accusing the government of peddling more lies at trial than top executives at the defunct hedge fund are alleged to have told to investors.

The jury weighing the fate of Nordlicht, former Platinum co-chief investment officer David Levy and former Chief Financial Officer Joseph SanFilippo heard the first part of Nordlicht’s final pitch to escape fraud and conspiracy charges from his attorney Jose Baez, who argued that prosecutors have been eliciting misleading testimony and presented flawed and incomplete evidence from the start of trial.

“We agree this case is all about lies. It’s all about the lies of the government,” Baez told the jury. “They came in here and lied to you with a straight face.”

Prosecutors say Nordlicht, Levy and SanFilippo were part of a conspiracy stretching from 2014 to 2016 to defraud investors by lying about a liquidity crisis at Platinum’s signature fund, preferential redemption payments that were made to certain investors and high interest, interfund loans Platinum was arranging to keep the fund afloat.

Baez told jurors that Nordlicht had been forthright with his investors, and as the largest investor in Platinum’s flagship fund, Platinum Partners Value Arbitrage Fund, he stood side by side with the other investors.

“For you to believe he defrauded them, he would have had to defraud himself,” Baez said.

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A Platinum Roller Coaster and the Lies We Tell Ourselves about Misdeeds

Platinum CIO Says No Evidence Of Misdeeds In ‘Bogus’ Case

Law360, New York (June 27, 2019, 10:11 PM EDT) — Former Platinum Partners co-chief investment officer David Levy’s attorney told a New York federal jury on Thursday in the securities fraud trial of the hedge fund manager’s top executives that prosecutors’ case is “bogus and flawed to the core,” citing a lack of evidence that Levy engaged in any wrongdoing.

Michael Sommer of Wilson Sonsini Goodrich & Rosati PC began his closing arguments in U.S. District Judge Brian Cogan’s Brooklyn courtroom, saying prosecutors have failed to show that Levy ever deceived or lied to investors in Platinum’s signature fund, Platinum Partners Value Arbitrage Fund.

“The evidence related to David in this trial was almost nonexistent,” Sommer told the jury. “Many of the witnesses said they didn’t even know David.”

Prosecutors say Levy, Platinum co-founder Mark Nordlicht and former chief financial officer Joseph SanFilippo defrauded PPVA investors by lying about a liquidity crisis at the failing fund that left it unable to meet a flood of redemption requests. The executives also allegedly deceived investors about Platinum’s practice of making preferential payments to certain investors and high interest interfund loans that were being used to keep PPVA afloat.

Nordlicht and Levy are further charged with defrauding bondholders in oil and gas Platinum portfolio company Black Elk Offshore Operations LLC.

 

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Measles, Currently the Most Contagious Virus and the Misinformation Spread to Insular Communities

FEAR, MISINFORMATION, AND MEASLES SPREAD IN BROOKLYN

IT WAS OCTOBER 31, a balmy day in Brooklyn, and Alexander Arroyo was walking around his neighborhood dressed as an octopus, pushing his 2-month-old daughter in a carriage, as his wife chased their toddler through the after-school Halloween trick-or-treat crowd. As the family filled their bags with candy, Arroyo’s phone rang and he stopped to answer it, trying to hear over the din of excited children. Arroyo is the director of the pediatric emergency department at one of the biggest hospitals in Brooklyn, Maimonides Medical Center, and two days earlier, a 15-month-old girl had come to the ER with a fever and a rash. He’d been waiting for a call to confirm the diagnosis, and this was it. The test had come back positive: The girl had measles.

 

WHEN THE GIRL had arrived at the ER, she was put in a busy area, where children with earaches or broken arms typically sit. No one suspected measles, because, thanks to routine childhood vaccination, the disease was declared eliminatedin the United States in 2000. Although there had been localized outbreaks since then—among the Amish in Ohio, visitors to Disneyland in California, and the Somali American community in Minnesota—neither Arroyo nor most of his staff had seen a case firsthand. Suspecting ­measles was like thinking “maybe that’s a unicorn,” Arroyo says. “It doesn’t really cross your mind, because measles shouldn’t exist anymore.”

Still, several measles cases had been reported in a different part of Brooklyn. And after a few hours, Arroyo’s team began to worry that the child in their care might be another. They put a mask over her face and wheeled her into an isolation room, with two sets of doors and air circulating under negative pressure to prevent airborne particles from escaping.

By then, however, “the bomb had gone off,” Arroyo says. Measles is considered one of the most contagious diseases in existence. If a person with measles walks through a room with a hundred people who are not immunized, up to 90 of them will get the disease. The virus is spread through coughs and sneezes and lingers in the air for up to two hours. Some 122,000 ­people come through the Maimonides emergency room every year. The hospital, located in Borough Park, serves one of the most diverse patient populations in the country, from ultra-Orthodox Jews to immigrants whose first language might be Mandarin, Russian, Hindi, Punjabi, Arabic, or Uzbek. Many are working-class cab drivers, manual laborers, and restaurant workers who bring their children to the ER at night, when their shifts are done.

Dr. Alexander Arroyo in the waiting room of Maimonides Medical Center.

NATALIE KEYSSAR

Standing in the street that Halloween, Arroyo thought about the dozens of patients who might have been exposed—in the waiting room, the hallway, the exam rooms—from the time the girl came into the hospital until she was placed in isolation. He looked down at his daughter in the carriage, dressed as a clown fish, and thought, “She’s not vaccinated.” She was still too young, as were other babies who might have been in the ER. He knew that his team would have to figure out right away who, exactly, had been breathing the same air as the infected girl. He waved down his wife, who had been making her way down the street with their toddler, and asked her to take the baby carriage. Then he headed home to make phone calls. “I saw my life falling into a pit of measles,” he says.

Arroyo is an amateur kickboxer, lanky and athletic. He hurried down the street, talking by phone with the hospital’s infection-control nurse and mapping out a plan. At home he changed out of the octopus costume and logged on to the hospital’s electronic medical records to check what time, exactly, the girl with measles had entered the ER. He called the other doctors who had been on duty to see if they remembered any pregnant mothers or immunocompromised children who would have been especially at risk.

He also called the hospital’s IT department to help backtrack through medical charts. His team generated names of 55 children who had potentially been exposed to the disease, then asked the New York City Department of Health to cross-reference it with vaccination records. For the MMR vaccine (against measles, mumps, and rubella) to be effective, the immune system has to be mature enough to produce antibodies to the virus. Young babies’ immune systems are not sufficiently developed, so children generally receive an MMR vaccine at 1 year old and another at age 4 or 5; those who had come through the hospital but had not completed both doses were considered at risk.

On the Maimonides list were a 12-month-old, a 10-month-old, and three babies younger than 6 months, including one who was just 17 days old. All were vulnerable, and Arroyo realized he was already running out of time. To prevent infection, the children needed to receive MMR shots within 72 hours, and young babies would have to be given immunoglobulin, a form of temporary protection, within six days. The infection-control nurse began making calls to those babies’ parents.

 

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Yeshiva Kehilat Pupa, NYC’s $2M Measles Bill and an Armed Anti-Vaxxer Movement

One Williamsburg school ‘ignited’ NYC’s measles crisis

The outbreak has cost the city roughly $2 million.

June 25, 2019 Scott Enman
Yeshiva Kehilath Yakov Pupa in Williamsburg failed to bar unvaccinated children from attending class, Health Department officials said. Image via Google MapsYeshiva Kehilath Yakov Pupa in Williamsburg failed to bar unvaccinated children from attending class, Health Department officials said. Image via Google Maps

A single school’s decision to allow an unvaccinated child to attend class led to more than 40 measles cases and the eventual proliferation of the disease across New York City, a top health official said on Monday.

Demetre Daskalakis, deputy commissioner of the city’s Department of Health, revealed at a conference hosted by NYU Langone that Yeshiva Kehilath Yakov Pupa in Williamsburg was the catalyst for what would become the worst outbreak in decades — with 609 confirmed cases as of Monday.

“One school failed to exclude people in Williamsburg,” Daskalakis said. “We had one measles case in that school, and subsequently every unvaccinated child who was not excluded came down with the measles, creating really the spark that ignited Williamsburg and created a true fire of measles in that neighborhood.”

The infected child had the disease but had not yet begun showing symptoms when he showed up for class at the yeshiva, an ultra-Orthodox Jewish private school, in late January.

The school did not immediately respond to a request for comment.

The outbreak began spreading in the fall of 2018, when Health Department officials announced that six Brooklyn children had contracted the disease. The initial Brooklyn case was acquired by a child on a visit to Israel, where a large outbreak was taking place.

The epidemic has been contained mostly to the Orthodox Jewish communities of Williamsburg and Borough Park, with more than a dozen confirmed cases also in Sunset Park among the Latino population.

Mayor Bill de Blasio declared a public health emergency on April 9 requiring mandatory measles-mumps-rubella vaccinations for residents who live in the northern Brooklyn ZIP codes of 11205, 11206, 11211 and 11249.

Gov. Andrew Cuomo signed a bill on June 13 banning any non-medical exemption to vaccinations, including religious exemptions.

The outbreak has cost the city roughly $2 million, according to Daskalakis. He said that despite their greatest efforts to send out exclusion letters, monitor schools and audit them, the disease has still led to dire consequences, including 50 hospitalizations and 18 ICU visits.

“We’ve had a lot of close calls with kids who have been very very sick,” he said.

The panel on measles was held at NYU Langone. Eagle photo by Scott Enman
The panel on measles was held at NYU Langone. Eagle photo by Scott Enman

As of June 14, 11 institutions had been shuttered by the city for failing to adhere to the emergency order. (UTA of Williamsburg – Yeshiva Torah V’Yirah at 590 Bedford Ave. was closed twice.)

Daskalakis said that further exacerbating the outbreak, and likely influencing the operators of lone wolf yeshivas, was a highly sophisticated campaign of anti-vaxxersseeking to undermine the city’s order through misinformation.

Some residents were also deliberately attempting to have their children contract measles to build up a natural immunity to the infection. “Rather than the spark igniting the kindling, we had the kindling actually looking for the spark,” Daskalakis said.

Although the disease is primarily affecting the Orthodox Jewish community, Daskalakis wanted to break the myth that the general Orthodox Jewish community is resistant to vaccines. “It’s not true,” he said, citing the fact that after the outbreak was announced, vaccination rates in Williamsburg rose from around 70 percent to about 92 percent.

Pro-Vax Mom Ensnared in Measles Law When Youngest Not Medically Cleared to Vaccinate

NYC’s Measles Crackdown Snares Pro-Vax Mom With Sick Baby

On Tuesday, April 30th, at around 10 p.m., armed officers with the Kings County sheriff’s department showed up at the door of a Williamsburg apartment to serve an Orthodox Jewish woman with a summons for failing to vaccinate one of her nine children.

The woman, identified as Jane Doe at an administrative trial Wednesday morning, is the first person to appear before a judge since the city declared a public health emergency 11 weeks ago. The declaration required everyone over the age of six months who lived, worked, or attended school in four Brooklyn zip codes, including the one where Doe lives, to be vaccinated against measles or show that they are already immune.

But even though much of the blame for the city’s measles outbreak has fallen on people who refuse to vaccinate their children, Doe is pro-vaccine. She testified at the hearing that all of her other eight children are vaccinated for measles. The summons she received that night was for her youngest, her eight-month-old son, who’d been sick for several weeks with fevers and ear infections.

I’m a very responsible mother…I was very hurt about this whole thing,” she told Gothamist/WNYC. “I feel they’re coming very strong on me because of the public and because of the anti-vaxxers.”

Doe submitted medical records to Administrative Law Judge Didi Skaff showing she’d taken her son repeatedly to the doctor’s office in late March and April. Her pediatrician had recommended postponing the shot until he recovered, Doe testified. The baby was finally given his first dose of measles, mumps, and rubella vaccine last week, she said.

“I do think I got the summons very unfairly,” she said at the hearing. “All my children are vaccinated.”

In order to attend day care or nursery school, babies are required to get their first dose of the measles vaccine when they turn one year old, according to New York State’s immunization requirements. But the city’s emergency order in April applied to everyone above the age of six months. The change in the minimum age has also confused some day care facilities that said they were not directly notified about it.

Doe said until the sheriffs showed up at her door, she was not aware that children in her Williamsburg neighborhood younger than 12 months old were supposed to be vaccinated.

“We watch no TV. Most of [us] have no internet connection,” she said, speaking of her religious Orthodox Jewish community in North Brooklyn.

“None of my friends knew, none of my sisters knew,” she said. Nor did her doctor mention it when she took her baby there on April 20, 11 days after the emergency order went into effect, she said.

For days after she was issued the summons, her children were still asking why people had shown up at her apartment with guns.

“It’s ridiculous that you have sheriffs knocking at your door in the middle of the night,” she told the hearing officer. “The children were all really terrified.”

She eventually quelled their fears by telling them the men had come to sell furniture, she said: “That’s how I got them not to be afraid.”

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Ill Repute Puts All Jewish Charities at Risk – Chabad UK a Potential Fraud, Another Scheming Charity

Orthodox man convicted over £10 million charity scam

Edward Cohen, 67, illegally sold medication – including viagra – through Jewish charities

 

An Orthodox man has been convicted of laundering proceeds from the illegal sale of medication totalling more than £10 million through Jewish charities. 

Edward Cohen, 67, funnelled “huge sums of money” – from sales and charitable donations – through an international network of firms, bank accounts and currency exchanges.

Southwark Crown Court heard that the medication sold included Viagra, slimming pills and prescription medication.

Edward Cohen fled the country ahead of the start of the trial and was convicted in his absence. 

Edward Cohen’s son David, a 38-year-old teacher, was cleared of money laundering charges and supplying false information to the Charity Commission.

But he was convicted of providing false information for the purposes of obtaining benefits. 

David Cohen, of Ashbourne Avenue, in Temple Fortune, North London, was granted bail.

Both men will be sentenced on July 4. 

The trial partly concerns the financial activity of charity Chabad UK – which is entirely separate from Chabad Lubavitch UK, and not part of the official Chabad movement.

Data obtained by police investigators show that in one financial year – 2012/13 – Chabad UK’s income jumped from £1.26 million to just under £8 million, almost £7 million of which came from merchant accounts linked to sales.

The following year, Chabad received £2.85 million from merchant accounts, out of a total income of £3.4 million.

It contrasted with the period from 2008 until 2012, when merchant account proceeds accounted for 2.5 per cent of an income of £6.05 million.

The jury heard that Chabad UK’s premises, on Oldhill Street in Stamford Hill, North London, were raided by police officers on September 1, 2014.

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Platinum’s River of Lies and Nordlicht and Co’s Ability to Part the Red Sea – “the Gambit Worked” – [LAW360]

Law360, New York (June 25, 2019, 9:24 PM EDT) — A federal jury in Brooklyn on Tuesday heard of how the former top executives of Platinum Partners schemed with a dozen other co-conspirators tied to the hedge fund manager to defraud existing and prospective investors by telling lie after lie about a liquidity crisis at Platinum’s flagship fund.

Jurors heard the first part of closing arguments from Assistant U.S. Attorney Alicyn L. Cooley, who argued as cash flow problems left Platinum Partners Value Arbitrage Fund unable to pay all redemptions to investors, Platinum insiders mounted a campaign of deception to retain investor money and to raise new cash for the fund.

Platinum co-founder Mark Nordlicht, former co-chief investment officer David Levy and chief financial officer Joseph SanFilippo — who have been standing trial on fraud and conspiracy charges since late April — each played a critical role in the scheme, Cooley said.

“They chose the path of deception and by doing that they committed fraud,” Cooley told the jury.

Prosecutors say Nordlicht, Levy and SanFilippo were part of a conspiracy that stretched from 2014 to 2016 to defraud investors by lying about PPVA’s liquidity crisis, its practice of making preferential redemption payments to certain key investors and insiders as well as high interest, interfund loans Platinum was arranging to keep PPVA afloat.

Cooley further argued that the executives and their co-conspirators falsely told investors that PPVA was a diversified fund, when in reality its biggest investments were in failing oil and gas companies.

“By 2014, this diversified, liquid hedge fund did not exist,” Cooley said.

Despite painting a rosy picture of PPVA to existing and prospective investors, Cooley said the conspirators knew full well of the problems inside the fund. She cited a June 2014 email between Nordlicht and PPVA president and Platinum partner Uri Landesman — who was also charged but died before trial — in which Nordlicht cited the liquidity crisis at PPVA and said it was becoming impossible to manage the outflows of cash from the fund.

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Kushner Cos and The Distressed Properties it Owns in Manhattan – Reason to Stick with What You Know

Debt, Conflict and Vacancy Imperil Kushners’ Times Square Dream

Jared Kushner’s family averted disaster last year when a Canadian asset manager swooped in to buy their skyscraper in midtown Manhattan, which had been hemorrhaging millions of dollars. Now they’re facing a similar crisis a few blocks away.

At the former New York Times building on West 43rd Street, a graying property in Times Square, the pattern is uncannily similar: Buy at a steep price, pile on too much debt, run up big losses, fight with tenants and flirt with default.

It’s the latest example of overreach for a family that built a fortune on suburban rental properties, only to have its urban ambitions stymied. Kushner Cos. bought the first six floors of the Times building for $296 million in 2015, envisioning a multifloor amusement park in the heart of Times Square. Four years later, a toxic brew of debt, conflict and vacancies has put their investment in jeopardy.

Bright signage for several touristy attractions is displayed outside Kushner's building in Times Square.
Tenants at the Kushner-owned property include a bowling alley, a guitar store and an ocean-themed exhibit.
 Photographer: Jeenah Moon/Bloomberg

Think of the building as a vertical mall with three-story neon signs beckoning tourists. There are tenants the Kushners inherited: a sprawling sushi restaurant, a below-ground Guitar Center store and a two-story bowling alley with thumping music. And ones they brought in—in the basement, National Geographic Encounter, an exhibit about oceans with humpback whales and sea lions cavorting on digital screens; on the second floor, Gulliver’s Gate, featuring detailed miniatures of the Colossus of Rhodes, the Empire State Building, Jerusalem’s Western Wall and other famous sites, complete with miniature trains and glowing skyscrapers.

The Kushners’ new tenants have a few things in common, including ticket prices exceeding $30, underwhelming crowds and financial trouble. The National Geographic exhibit has paid only partial rent since August, and the Kushners are looking for a new tenant. Gulliver’s Gate paid irregularly, prompting a legal battle that resulted in its rent being cut by almost half this year. Take a walk around the back of the building, and there’s a dusty unfinished space meant for a champagne bar. It never opened. Kushner Cos. has traded lawsuits with the proprietor, an operator of airport restaurants that is alleging fraud, claims the Kushners have denied.

A spokeswoman for the National Geographic exhibit confirmed that the attraction wasn’t paying full rent, but she declined to provide details. Gulliver’s Gate founder Michael Langer said he was “happy we were able to work together for an amicable agreement.” A spokesman for OHM Concession Group, which leased space for the champagne bar, didn’t respond to requests for comment.

Leased tenants at 229 West 43rd St. at time of 2016 loan

Current tenants

Rental income lower than projected in 2016

Currently empty

Office Condo

4th floor

Bowlmor Lanes

After trading lawsuits, got rent cut by nearly half

3rd floor

2nd floor

Gulliver’s Gate

Haru Sushi

Ground

floor

Los Tacos No. 1

American Market

by Todd English

Never moved in

Cellar

floor

Replaced by The Ribbon

Guy’s American Kitchen+Bar

National Geographic Ocean

Encounter

Hasn’t paid full rent since August 2018

Subcellar

floor

Guitar Center

Sources: Loan prospectus, Bloomberg research

The missteps have added up. Kushner Cos. assumed that all these tenants would be paying rent when it piled $370 million of loans onto the building in an October 2016 refinancing, most of it from Deutsche Bank AG. In March, the company defaulted on one high-interest chunk of its debt to other lenders, and the property has often run at a loss after accounting for loan payments, according to data compiled from disclosures to investors. While there’s always room for improvement, spaces for so-called experiential retailers require custom designs and can take years to fill.

The story of how the Kushner family purchased a Times Square building only to see it founder during an economic boom is one of zealous overconfidence and a passion for trophy properties, according to more than a dozen people interviewed by Bloomberg News. It’s also a tale of how the real estate market encourages excessive risk-taking, rewarding those who use steep leverage on speculative properties even as they pass potential losses to others. Most of the debt on the Times building has been transferred to investors – it’s their problem now. Meanwhile, Kushner Cos. allocated some of the loan to pay itself $59 million, according to public filings.

Wells Fargo & Co., which manages the loan, has placed it on a watchlist for troubled debt and taken control of the property’s accounts. At one point, the building also drew the attention of federal prosecutors. The U.S. attorney for the Eastern District of New York subpoenaed records about the refinancing in 2017. What investigators were looking for, whether the Kushners were a subject and if the matter is ongoing is unclear. Spokesmen for Deutsche Bank and Wells Fargo declined to comment, as did Jared Kushner’s attorney, Abbe Lowell. Representatives for Kushner Cos. didn’t respond to numerous requests for comment.

teekay

 

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Top: National Geographic’s exhibit, where the fish are digital. Bottom: The shoe-rental counter at Bowlmor Lanes.
Photographers: Bryan Bedder/Getty and Yeong-Ung Yang/The New York Times

The former Times building and Kushner Cos. were both struggling when they came together in 2015. The 18-story landmark with a mansard roof had been the newspaper’s headquarters for almost a century, until the company moved a few blocks away in 2007. That same year, Africa Israel Investments Ltd. bought the building at 229 West 43rd St. for $525 million and began searching for a way to repurpose it, exploring everything from luxury condos to a Disney-themed hotel. When those plans fizzled, the company, led by Russian-Israeli diamond merchant Lev Leviev, decided to sell part of the site as a retail complex.

The rapid growth of internet shopping made many real estate investors skeptical. But Charles Kushner, founder of the company that bears his name and father of now-presidential adviser Jared Kushner, was still bullish on retail when Leviev’s brokers pitched him. He had reason for his optimism. In 2011, as Kushner Cos. was straining under a mountain of debt at its 666 Fifth Ave. skyscraper, selling the building’s stores for $1 billion helped pay off some of it and buy time.

Four years later, 666 Fifth Ave. was again operating at a loss. The Kushners were supposed to have improved the property and raised rents. Instead, they had been shopping a plan to knock it down and build a glittering high-rise twice as tall with a five-story shopping center at its base.

The Kushners needed an infusion of cash, and the bottom six floors of the Times building offered a tantalizing opportunity. Tens of thousands of peoplewalk by daily. The building was about half leased, but if the family could fill it quickly and bolster its rent rolls, Kushner Cos. could refinance at a higher valuation, taking any gains as profit.

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By Aiding Sexual Predators, Deputy Health Minister Yaakov Litzman is a Conspirator, a Predator

(R) Deputy health minister Yaakov Litzman seen during a press conference after meeting with president Reuven Rivlin at the President's Residence in Jerusalem on April 15, 2019. (Yonatan Sindel/Flash90); (L) A private investigator tagged Malka Leifer as she spoke on the phone, while sitting on a bench in Bnei Brak, on December 14, 2017. (Screen capture/YouTube)

Police said gearing up to indict minister suspected of aiding alleged pedophiles

 

The Israel Police are gearing up to recommend that Deputy Health Minister Yaakov Litzman be indicted for using his office to illicitly provide assistance to alleged sex offenders, according to a report released Friday by the Kan public broadcaster.

Israeli law enforcement intends to indict the United Torah Judaism party chairman in two cases, the report said.

The first case involves Malka Leifer, a former ultra-Orthodox girls’ school principal charged in Australia with 74 counts of child sex abuse. The police announced in February that they were investigating Litzman on suspicion that he pressured employees in his office to change the conclusions of their psychiatric evaluations to deem Leifer unfit for extradition.

In the second one, Litzman is accused of aiding other alleged sexual predators in a manner that was against the law, Kan reported.

Litzman has denied any wrongdoing, maintaining that he responds without prejudice to all pleas for assistance his office receives.

The deputy minister is also being probed in a third case, but the likelihood of him being charged appears slim, according to the public broadcaster. It gave no details on the case.

The police are slate to hand down their decision ahead of the September elections, but their recommendation to indict is expected to be pending a hearing, which would be held after Israelis head to the polls.

Last month, Channel 13 news reported that Litzman helped at least 10 serious sex offenders obtain improved conditions, including home visits and other benefits, by pressuring state psychiatrists and prisons service officials.

In March, Channel 13 news reported that police were investigating suspicions that Litzman and his chief of staff pressured a psychiatrist, Moshe Birger, to ensure that another imprisoned sex offender close to Litzman’s Gur sect was placed in a rehabilitation program. Participation in the program can lead to home visit rights and early release from prison.

Leifer is known to have links to the Gur community, having once taught at a school in Israel affiliated with the branch.

A Justice Ministry official told The Times of Israel in February that police had recordings of Litzman and officials in his office speaking to Health Ministry employees and pressing them to act on Leifer’s behalf.

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Edward Cohen, Money Launderer, Charity Manipulation and the Attempted Purchase of a Knighthood, Classy…

Money launderer, 67, who tried to buy a knighthood is convicted in his absence of £10million Jewish charities scam after going on the run

 

A fugitive who once tried to buy a knighthood has been convicted of laundering more than £10million, made from the illegal sale of sex pills, through a Jewish charities scam.

Edward Cohen, 67, set up a ‘bewildering’ network of companies, some of them promoting Orthodox Judaism and ‘helping the Jewish poor’.

He diverted vast sums of cash, alongside legitimate charitable donations, via foreign exchange firms before sending it overseas, Southwark Crown Court heard.

Cohen, who fled the country before his trial began, also used some of the proceeds to try and purchase a gong from the Queen, supposedly in recognition of his work with the sham charities.

Cohen’s teacher son David, 38, was also involved in the charities but was cleared of money laundering charges and supplying false information to the Charity Commission.

But he was convicted of failing to notify a change in circumstances when obtaining benefits and bailed ahead of sentence on July 4.

David told jurors his signature had been forged on charity documents and insisted he had no idea what his crooked father was up to.

He said: ‘If I had known that my father was involved in any sort of dirty money I would have run a mile. I would not have not asked for his help, no way Jose.

‘I am sure I am not the only child who does not know how their father makes money.’

Cohen denied but was convicted in his absence of a series of offences including supplying false information to the Charity Commission and money laundering offences after a two month trial.

A warrant has been issued for his arrest and he will be sentenced in his absence on July 4.

Edward Cohen, 67, set up a ‘bewildering’ network of companies that he used to launder money through. He diverted vast sums of cash, alongside legitimate charitable donations, via foreign exchange firms before sending it overseas, Southwark Crown Court heard

 

Edward Cohen, 67, set up a ‘bewildering’ network of companies that he used to launder money through. He diverted vast sums of cash, alongside legitimate charitable donations, via foreign exchange firms before sending it overseas, Southwark Crown Court heard

 

Earlier James Dawes, QC, prosecuting, said Cohen set up a ‘bewildering variety of companies and they either put themselves or their family members as directors’.

‘The companies were simply vehicles. Either the Revenue was told these companies were dormant or they made no returns.’

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The Alter Egos of Platinum Partners – “In Pari Delicto” [LAW360]

Law360 (June 24, 2019, 4:19 PM EDT) — A New York federal judge on Friday kept alive portions of Platinum Partners‘ liquidators’ lawsuit over the hedge fund’s collapse, finding in part that a Second Circuit rule doesn’t protect alter egos of Platinum from liability.

U.S. District Judge Jed Rakoff agreed with the liquidators that alleged Platinum alter ego Beechwood Capital Group LLC — a set of reinsurance and asset management companies — is not protected from liability by the Second Circuit’s 1991 ruling in Shearson Lehman Hutton Inc. v. Wagoner, which established that a plaintiff lacks standing to sue third parties over misconduct for which it shares equal blame.

Beechwood argued in April that, under Wagoner, the liquidators, as successors-in-interest to Platinum Partners Value Arbitrage Fund LP, can’t now attempt to recover funds from outsiders for the alleged $1 billion fraud carried out by Platinum’s top management and officers. But the liquidators countered that the Wagoner rule and a similar “in pari delicto” defense, Latin for “in equal fault,” don’t protect corporate insiders or alter egos, as Beechwood is alleged to be.

“As this court has explained, the rationale behind the insider exception is that ‘it would be absurd to allow a wrongdoing insider to rely on the imputation of his own conduct to the corporation as a defense,'” the court said Friday. “This rationale applies with equal force to alter egos of insiders, to whom the conduct is also imputed.”

Judge Rakoff said he doesn’t consider as insiders executives at Beechwood entities including Mark Feuer, Scott Taylor and Dhruv Narain, and other individuals allegedly involved in misconduct such as Michael Nordlicht, Kevin Cassidy, Seth Gerszberg and Michael Katz.

For nearly all of those individuals, however, the court said another exception to the Wagoner rule related to the abandonment of corporate interests applies, and refused to dismiss certain claims against them. Of these individuals, only Katz escaped the allegations entirely, with the court finding it would need to engage in inappropriate speculation to keep aiding-and-abetting claims against him alive.

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The Magic of Platinum Partners and the Wand of the Magicians Involved – and the Great Tragedy to Jews Everywhere

Great liars are also great magicians.

Adolf Hitler

[Opinion 6.24.19]

Platinum Partners’ Feats of Magic and the Potential for a Great Escape –

The Existential Threat to All of Judaism

The anti-Semitism of Eastern Europe in the mid-1900’s was perpetuated by fear. The prominent Jewish families of Eastern Europe were financiers, bankers, jewelers, clothiers and well-known figures in art and antiquities collection. In whatever form of religious observance our family members took, they were feared because of their successes not because of their improprieties. Hitler’s hold on his own supporters was dominated in large part by a culture of fear shared by Bavaria and surrounding German areas, of the possibility of losing their German Arian identity to Jews, who did not inspire trust, not because they were untrustworthy but because they were gloriously successful at everything they did. Our family members were accomplished.  There were very few who exchanged education for Talmud even in the most religious families of the time. Rather for many families, mastery of life encompassed an aptitude at religious and non-religious subjects and a strong mentality of self-sufficiency. And, the Jewish identity of perseverance and tenaciousness inspired unfounded mistrust, xenophobia and anti-Semitism. As such, Hitler gained power and Jews were slaughtered.

Fast-forward fifty, sixty, seventy years and the world is seeing an increase in anti-Semitism. Unlike in the past, however, it is not a blind mistrust, it is one based upon what feels almost like a culture of fraud and deceit ingrained in so much of the Jewish Zeitgeist that it is tainting all Jews. It can almost be said that the mistrust is justified, based in Ponzi Schemes, privatized, inadequate education to the detriment of non-Jews and secular Jews and an uncanny ability to circumvent laws. Everything from vaccines and education to financial accountability and governmental regulations, are not outside the scope of subject the pubic Jewish collective is trying to manipulate.

Those of us willing to call out wrongs are relegated to courtrooms and lawsuits with no end in site. As such, anti-Semitism is far more difficult to counter than it was in the times immediately preceding Hitler’s power and during the war. And if our Jewish brothers are not held to account, Jews everywhere will be castaway as pariahs.

The Platinum Partners Ponzi Scheme, the Madoff Ponzi Scheme, the Philip Esformes conviction are so deeply rooted in the Jewish run ethos, they are leaving far more than financial ruin in their wake. They are increasing the breadth of a community of people who hate Jews because we are viewed in the unfavorable light these Jewish fraudsters shine on our community. That these frauds are perpetrated with such grace and ease by members of the Jewish community is a travesty.  That the moral compass of the community supporting them is so skewed it is unwilling to even acknowledge that the acts of Platinum’s Partners’ partners were calculated, orchestrated and choreographed like any great magic show.

And if Platinum Partners’ partners do not get convicted, the result could be catastrophic for Jews everywhere. If we are incapable of bringing swift and harsh justice against those Jews who commit wrongs, we will all suffer the consequences. That fraud is with increasing frequency seeping into the “Jewish identity” and is damaging that identity for everyone. The Platinum Partners case is a blight on our community and it should be viewed as such, whispered like the big C-Word (cancer) when our parents talked at the Shabbos table about a friend diagnosed days before. Jewish orchestrated fraud is a cancer, a blight, a disease of the worst form and if not stopped, it will spread. This is not anti-Semitic but an honest view of the dangers that rampant fraud within our community creates.

The Magic of the Platinum Partners’ Ponzi Scheme was the ease with which it was orchestrated, the complexity of the scheme and the corresponding complications involved in painting a clear picture for a jury such that the jurors can convict. The case was and continues to be simply too chaotic, too scattered, too unintelligible and we opine that this is by design, a master creation by a brilliant defense team.

If the Judge does not rule a mistrial, we believe there is a significant likelihood that this jury will come back without the clarity necessary to convict. Like the crimes themselves, a mistrial or a failure to convict will be deeply unjust for those defrauded, for future victims, for public trust and most importantly, for Jews everywhere and the world’s perception of us. We will once again be viewed as having a magical ability to escape unscathed.

It is very likely that when the Defendants sat with their team of lawyers, negotiated their joint defense agreements, and strategized, it was clear that the first thing they needed to manipulate was the jury. They did not trust their fates to fellow Jews, a jury of their peers, but to the diametric opposite, a mostly African America pool of jurors likely inexperienced in the private equity investment world.

Mark Nordlicht, David Levy and Joseph SanFilippo are smart, savvy and well-educated. They are the epitome of privilege and money. Nordlicht comes from a polished, Jewish, observant Yeshiva-related upbringing. Levy is much the same. These are not men who have ever had to live from paycheck to paycheck. These are not men who have experienced racism or the African American experience, a far cry in fact. And the jury, with all respect due to each of the jurors, most likely knows little about what it is to be born with a silver spoon in one’s mouth. The Defendants are, have been and will always be men of privilege. The jury, as a matter of profiling by appearance alone, does not share this providence.

The breadth of the evidence that was admitted, or excluded, was a remarkable play of legal defense gamesmanship, cleverly manipulated to share as little damaging information as possible. This is not unusual. But anyone who thinks that this was not calculated as the financiers of Platinum’s top brass were defrauding their investors is either naive or stupid. We believe, based upon previous experiences of some of that brass and their closest confidants, that Platinum Partners knew what to expect if their fiefdom fell. And as they were performing their magical feats of financial optical illusions, they set the stage for a worst-case-scenario.

Very early on the Judge presiding over the case ruled that Murray Huberfeld’s conviction for bribery, the avalanche that set in motion the public unraveling of Platinum Partners, was not permissible evidence in the case against Nordlicht, Levy and SanFilippo. The fact that Huberfeld was acting in consort with the partners at Platinum to bribe Norman Seabrook and entice COBA money was deemed to be outside the scope of the presentation that the government could make to the jury. As such, the corresponding testimony of Jonah Rechnitz in the previous trials was also not admissible evidence. The legal maneuvering was brilliant, awe inspiring.

Huberfeld acted as an Agent of Platinum Partners when he convinced Seabrook to invest. He was one of Platinum Partners’ alter egos. His actions and the resulting convictions could have set the stage for a clear picture for the jury regarding the maneuvering to bring in investors.

But it was deemed inadmissible.

The judge has already dismissed the count of “Fraudulent Investment Scheme” from the indictment.  Why? Because the government proved no match for the defense team. They failed ingloriously to use the same arguments the judge made for dismissal, as proof of guilt, namely that Platinum Partners’ partners calculated what needed to be put in place to cover their collective asses, the “CYA” term of endearment. The hiring of a valuation team was not a sign of care and compliance, quite the opposite. It was a distraction to mislead the government into believing that the valuations were conducted honestly.

 

B. Fraudulent Investment Scheme
As to the fraudulent investment scheme, defendants’ motion for a judgment of acquittal under Rule 29 is granted as to the allegation that they overvalued level 3 assets but otherwise denied.
The indictment alleges that defendants overvalued Platinum’s level 3 assets, but none of the Government’s witnesses challenged the accuracy of Platinum’s valuations of these assets. The Government has not even introduced witnesses who purport to be qualified to challenge these valuations, let alone attempted to introduce expert witnesses who could have guided the jury through assessing the values of level 3 assets – which are, by definition, difficult to value.

Case 1:16-cr-00640-BMC Document 752 Filed 06/17/19 Page 4 of 9 PageID #: 10473
5
Nor has the government shown that Platinum’s process for obtaining these valuations is so deeply flawed that the jury can fairly infer that the valuations were false, and fraudulently so. To the contrary, the testimony has shown that Platinum hired third parties to confirm its valuations; hired an experienced director of valuations; and maintained a valuation committee. There is insufficient evidence for a reasonable juror to conclude that defendants have falsified any valuations, let alone evidence that would support defendants’ conviction for fraudulently overvaluing assets.

Contrary to the Judge’s comments, Level 3 assets are not difficult to value if you mark them against the market in which they are traded. The government simply needed to find a market against which to mark the assets.

Justice will not be served because the perpetrators of the crimes have far greater knowledge of their craft than the government prosecutors. The brilliance of the defense attorneys in making it all look so complicated is not by chance. Platinum’s partners took their precautionary measures when they placed a value on the assets well above their market. They had a team of quasi-conspirators in place.

The government needed to bring in a valuation expert to counter what Platinum was suggesting, that the valuation team was evidence they they acted admirably and honestly. Our analysis is that the Defendants breached their fiduciary duty to their investors by over-valuing assets, that they had taken all the necessary precautions to make it look kosher and that this was choreographed with remarkable dexterity. In reality, the magicians at Platinum had performed what is known as “CYA” and had done so with the skill commensurate with their experience, what any good hedge fund manager would have done.

Platinum Partners’ partners knew what they were doing. The very argument that the judge makes regarding Platinum’s valuation team should be the argument that substantiates the fraud: that Platinum hired the people who would paint a rosy picture to cover up financial impropriety. They brought in Picasso and commissioned him a painting, and paint he did.

Platinum knew its assets were worth far less than they were being valued and created a charade. The told “a tale, full of sound and fury” (Shakespeare) but for them, it is signifying exactly what they wanted it to… everything. 

But we digress. As the Judge rightly pointed out, a reasonable juror would likely not have concluded that the Defendants falsified valuations.

We believe, however, that it is not because the charge is wrong but because the government did not understand that the very act of hiring a valuation committees and valuations’ experts was just part of the magic, the optical illusion.

Platinum Partners’ victims are many, a vast range of people, mostly from their own community. Their victims are also COBA members who deserve the best the government has to offer and is not getting their justice.

The Defendants’ seats in the courtroom are full, almost every day while the Plaintiff’s seats are comprised mostly of victims, their lawyers, journalists and those most curious. It is a sad state of affairs for the greater Jewish collective.

For a parent, a child can do no wrong so it is understandable that the Defendants’ families would be making a show of support. But, an acquittal poses an existential threat to the greater Jewish identity.  Not only do we surmise that these men are likely already planning their next major magic show, but we fear the darkness that would come of an acquittal.

Justice should be served. The victims are entitled to justice and the greater Jewish collective deserves the optics of an equitable distribution of accountability, only accomplished by a conviction. But the government will need to start pulling better punches, or a rabbit from a hat.

LM

Skyline’s Wreckage, The US Healthcare Travesty – Help Wanted – Frank Romano Taking Care of Skyline’s Patients

Losing money and struggling to find workers, a nursing home operator feels the squeeze

Nursing assistant Rachael Moreau (right) helped resident Katherine Lapre at Brandon Woods home in Dartmouth.
Nursing assistant Rachael Moreau (right) helped resident Katherine Lapre at Brandon Woods home in Dartmouth.(JONATHAN WIGGS/GLOBE STAFF)

DARTMOUTH — When five Skyline nursing homes shut their doors last month, Frank Romano came to the rescue. He accepted more than three dozen old and frail residents at a pair of nursing homes he owns here and in neighboring New Bedford.

Now he’s scrambling to find nurses to care for them, along with more kitchen, laundry, and maintenance workers. As he looks for help, he’s struggling to operate the properties profitably in a Massachusetts long-term care sector that’s been losing money for years.

“They’re human beings, and I want to do the right thing,” said Romano, 76, chief executive of Essex Group Management, which owns six nursing homes and two assisted living residences. “But for every Skyline resident I took in, I’m losing $37 a day.”


Romano’s homes boast distinctive features — a Japanese koi pond and red British phone booth brighten the grounds of his Brandon Woods home here — but they face the same financial squeeze that’s weakened most of the state’s remaining 386 skilled nursing facilities.

Thirty nursing homes have shuttered in the past 18 months — and 214 since 2000 — a little noticed 35 percent shrinkage that has uprooted many of the state’s most vulnerable residents.

After a state court appointed a receiver to manage the shutdown of the five South Coast homes operated by Skyline Healthcare, residents were moved with little notice — or choice about their destination.

“They said, ‘We’re closing up shop and you’re going,’” recounted John Pine, 88, one of about 15 residents sent to Brandon Woods in Dartmouth. “Some went here, some went somewhere else. . . . They just put you where they want.”

In all, 245 residents were displaced from the five Skyline nursing homes in New Bedford, Fall River, and Dighton after their New Jersey-based operator surrendered its licenses earlier in the spring. Many of their residents are disabled or suffer from dementia, and most need help with daily activities such as getting out of bed, eating, and using the toilet.


The circumstances behind the Skyline closings are under investigation by the state attorney general. A pending lawsuit by the state of Florida accuses the company of deducting money from employee paychecks for insurance that wasn’t provided. Former employees and operators who took over Skyline homes in other states have said the company bounced checks.

John Pine recently was relocated to Brandon Woods home in Dartmouth, where he was assisted by unit manager Christine Cabral.
John Pine recently was relocated to Brandon Woods home in Dartmouth, where he was assisted by unit manager Christine Cabral.(JONATHAN WIGGS/GLOBE STAFF)

Its unraveling was only the latest setback for the Massachusetts nursing home industry.

Romano, a gregarious businessman who greets many of the residents and employees of his homes by name, can tick off the pressures facing operators.

They’ve gotten only small payment adjustments from MassHealth, the state Medicaid program that covers two-thirds of nursing home residents. The adjustments don’t keep pace with rising labor costs and expenses such as utilities and real estate taxes.

At the same time, employers such as Amazon, which opened a massive warehouse in Fall River two years ago, woo nursing home workers with slightly higher wages.

Romano said he can’t find enough workers to staff his properties here or in Tewksbury, Milford, and Worcester. It’s especially tough to recruit certified nursing assistants. He offers base pay of $15 an hour — plus a differential for evening and overnight shifts, along with overtime and bonuses to cover weekend shifts — but still finds it hard to compete with Amazon, which a spokeswoman said pays warehouse workers as much as $18.25 an hour.


“They’re offering higher wages, he said. “That’s where people are going.”

New federal restrictions on immigrants, who make up about 40 percent of nursing home employees, further aggravate the crisis. Early next year, the US government is set to end temporary protected status granted to Haitians who came here to work after the country’s 2010 earthquake. That means Haitian nursing home workers, including those at Romano’s homes, will be forced to return to the island.

“These are the workers who never call in sick or come in late,” said Tara Gregorio, president of the Massachusetts Senior Care Association, a Waltham-based trade group for the state’s nursing home operators. “These are the workers we can least afford to lose.”

Nursing home operator Frank Romano is having a hard time finding employees.
Nursing home operator Frank Romano is having a hard time finding employees.(JONATHAN WIGGS/GLOBE STAFF)

Romano said he has taken out advertisements seeking American citizens to work at some of the jobs being vacated. “None of them even want to apply,” he said.

In response, Romano sought and received permission from Puerto Rico, a US territory, to bring 150 workers to his Massachusetts properties over the next year. They include nurses, nurse assistants, personal care aides, housekeepers, and mechanics. But to make sure they can afford to live in a high-cost state, he’ll also have to provide housing for them.

He’s counting on the state government to boost MassHealth reimbursements for nursing home residents, which would in turn increase his revenue. State lawmakers have recommended modest payment increases for the coming fiscal year, but thus far the Baker administration has budgeted no new funding.

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