Black Elk’s “Rigged” Bond Vote – Orchestrated by Mark Nordlicht and David Levy, the Details

Ex-Black Elk Atty Gives ‘Painful’ Detail On Bond Vote

Law360 (May 31, 2019, 9:44 PM EDT) — A former attorney for defunct energy firm Black Elk walked jurors through a bond vote that the government alleges former executives at Platinum Partners rigged in their favor, with the prosecutor on the case getting into a level of detail that a judge called “painful” on Friday.

Former Black Elk outside counsel W. Robert Shearer gave a second day of direct testimony at the trial where Platinum co-founder Mark Nordlicht and former Platinum co-chief investment officer David Levy are accused of working with others to secretly control the bulk of $150 million in Black Elk bonds ahead of a vote in order to direct millions back to Platinum itself.

Now a partner at Akin Gump Strauss Hauer & Feld LLP, Shearer was at the time at BakerHostetler. While jurors had heard of Nordlicht’s involvement the day before, Friday’s direct testimony was centered mostly on email interactions between Shearer, former Platinum managing director Daniel Small and former Black Elk CEO Jeffrey Shulse. Shulse and Small are scheduled to be tried separately on related charges. The government has not accused Shearer of wrongdoing.

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Black Elk and the “Secret Sway” of Mark Nordlicht and David Levy to Wield Control – a Power Grab

Law360, New York (May 30, 2019, 9:59 PM EDT) — Jurors in the securities fraud trial of former top Platinum Partners executives on Thursday heard of how co-founder Mark Nordlicht floated plans to wield control over bonds of the hedge fund’s portfolio company Black Elk Offshore Operations LLC using Platinum affiliates, which prosecutors say was part of a scheme to defraud the oil and gas driller’s bondholders.

Prosecutors say Nordlicht, former Platinum co-chief investment officer David Levy and others used their secret sway over the majority of $150 million in Black Elk bonds to funnel the bulk of proceeds from a sale of the company’s assets back to Platinum, ahead of bondholders who had priority to the funds.

During the testimony of Black Elk’s former outside counsel at BakerHostetler, W. Robert Shearer, the jury heard of how a group of independent bondholders in late 2013 were threatening to push the bonds into default after Black Elk violated the indenture’s terms by exceeding its limits on capital expenditures.

Jurors were shown a February 2014 email from Nordlicht to a Black Elk executive, in which Nordlicht describes a plan to potentially deal with aggrieved bondholders by exerting majority control over the debt.

“FYI — I am close to buying 20 million bonds from [an independent bondholder]. It will at that point be [an] easy task to buy additional 25 if bondholders don’t behave and we can change covenants at any time by flipping our bonds to friendlies who will do right by the company,” Nordlicht said in the email.

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Nordlicht v. Federal Bureau of Prisons – FOIA Request for FBI Records

Are FBI Records Not Private? Mark Nordlicht Trying to Ascertain Whether Records Were Leaked to the Press?

 

To View these Records Click here.

Case Title NORDLICHT v. FEDERAL BUREAU OF PRISONS
District District of Columbia
City Washington, DC
Case Number 1:2018cv02626
Date Filed 2018-11-14
Date Closed 2019-04-03
Judge Judge James E. Boasberg
Plaintiff MARK NORDLICHT
Case Description Mark Nordlicht, who was one of the subjects of an investigation in the Eastern District of New York, submitted a FOIA request to the FBI for records concerning communications between five named individuals and the New York Post, the Wall Street Journal, Bloomberg News, or Reuters during 2016. The agency acknowledged receipt of the request and denied the request on the basis of Exemption 6 (invasion of privacy) and Exemption 7(C) (invasion of privacy concerning law enforcement records). Nordlicht then filed suit.
Complaint issues: Litigation – Attorney’s fees
Defendant FEDERAL BUREAU OF INVESTIGATION
Defendant FEDERAL BUREAU OF PRISONS
Documents Docket
Complaint
Complaint attachment 1
User-contributed Documents
 Docket Events (Hide)
Date Filed Doc # Docket Text

2018-11-14 1 COMPLAINT against FEDERAL BUREAU OF INVESTIGATION ( Filing fee $ 400, receipt number 4616095482) filed by MARK NORDLICHT. (Attachments: # 1 Civil Cover Sheet)(ztd); Modified on 12/4/2018 to correct Defendant’s name (ztth). (Entered: 11/16/2018)
2018-11-14 2 NOTICE OF RELATED CASE by MARK NORDLICHT. Case related to Case No. 18-403. (ztd) (Entered: 11/16/2018)
2018-11-15 SUMMONS (3) Issued as to FEDERAL BUREAU OF INVESTIGATION, U.S. Attorney and U.S. Attorney General (ztd) Modified on 12/4/2018 to correct Defendant’s name (ztth). (Entered: 11/16/2018)
2018-11-19 3 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed as to the United States Attorney. Date of Service Upon United States Attorney on 11/16/2018. ( Answer due for ALL FEDERAL DEFENDANTS by 12/16/2018.), RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed on United States Attorney General. Date of Service Upon United States Attorney General 11/16/18. (ztd) (Entered: 11/30/2018)
2018-11-26 4 RETURN OF SERVICE/AFFIDAVIT of Summons and Complaint Executed. FEDERAL BUREAU OF INVESTIGATION served on 11/20/2018. (tth) (Entered: 12/04/2018)
2018-12-17 5 ANSWER to Complaint by FEDERAL BUREAU OF INVESTIGATION.(Simon, Jeremy) (Entered: 12/17/2018)
2018-12-17 MINUTE ORDER: The Court ORDERS that the parties shall meet, confer, and submit a joint proposed briefing schedule by January 7, 2019. So ORDERED by Judge James E. Boasberg on 12/17/2018. (lcjeb2) (Entered: 12/17/2018)
2018-12-17 Set/Reset Deadlines: Joint Proposed Briefing Schedule due by 1/7/2019. (znbn) (Entered: 12/18/2018)
2019-01-04 6 MOTION to Stay in Light of Lapse in Appropriations by FEDERAL BUREAU OF INVESTIGATION (Simon, Jeremy) (Entered: 01/04/2019)
2019-01-07 MINUTE ORDER GRANTING 6 Motion to Stay. So ORDERED by Judge James E. Boasberg on 1/7/2019. (lcjeb1) (Entered: 01/07/2019)
2019-01-29 7 NOTICE of Restored Government Funding by FEDERAL BUREAU OF INVESTIGATION (Simon, Jeremy) (Entered: 01/29/2019)
2019-02-06 MINUTE ORDER: The Court lift the stay entered on 1/7/2019 and ORDERS that the parties shall submit a joint proposed briefing schedule by February 20, 2019. So ORDERED by Judge James E. Boasberg on 2/6/2019. (lcjeb1) Modified on 2/6/2019 (zlsj). (Entered: 02/06/2019)
2019-02-06 Set/Reset Deadlines: Joint Proposed Briefing Schedule due by 2/20/2019 (lsj) (Entered: 02/06/2019)
2019-02-19 8 Joint STATUS REPORT by FEDERAL BUREAU OF INVESTIGATION. (Simon, Jeremy) (Entered: 02/19/2019)
2019-02-19 MINUTE ORDER ADOPTING the parties’ 8 Joint Status Report. The Court ORDERS that: 1) Defendant’s Motion for Summary Judgment shall be due May 2, 2019; 2) Plaintiff’s Opposition shall be due May 23, 2019; and 3) Defendant’s Reply shall be due June 6, 2019. So ORDERED by Judge James E. Boasberg on 2/19/2019. (lcjeb1) (Entered: 02/19/2019)
2019-02-19 Set/Reset Deadlines: Summary Judgment motions due by 5/2/2019. Response to Motion for Summary Judgment due by 5/23/2019. Reply to Motion for Summary Judgment due by 6/6/2019. (znbn) (Entered: 02/21/2019)
2019-04-03 9 STIPULATION of Dismissal by FEDERAL BUREAU OF INVESTIGATION. (Simon, Jeremy) (Entered: 04/03/2019)
2019-04-03 MINUTE ORDER: Per the parties’ 9 Stipulation, the Court ORDERS that the case is DISMISSED WITH PREJUDICE. So ORDERED by Judge James E. Boasberg on 4/3/2019. (lcjeb1) (Entered: 04/03/2019)
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Black Elk, David Levy and “So What if it’s Fraud?” – The Black Elk Story Continued

David Levy, Black Elk and a Fraud Perpetrated Upon Shareholders in Brazen Fashion…

 

Dear Readers:

We told this story long ago and uncovering the fraud perpetrated upon the Black Elk shareholders has been one of the many things we have focused since our inception. We did not envision that the day would come when it would be laid out in black and white before the court. The below is a copy of the transcript, stating in pertinent part, everything we already knew. Read on.

David Levy Fraud, Black ElkDavid Levy Fraud, Black Elk_Page_1David Levy Fraud, Black Elk_Page_2.jpgDavid Levy Fraud, Black Elk_Page_3.jpgDavid Levy Fraud, Black Elk_Page_4.jpgDavid Levy Fraud, Black Elk_Page_5.jpg

A Platinum Partner – Mark Nordlicht, -Going to Jail – For Courthouse Temper Tantrum

Law360, New York (May 6, 2019, 5:25 PM EDT) — A New York federal judge revoked Platinum Partners co-founder Mark Nordlicht’s bail on Monday in the wake of an altercation the former hedge fund executive had last week with one of the female prosecutors of his securities fraud trial.At the end of the trial day on Monday, U.S. District Judge Brian Cogan ordered Nordlicht to be taken into custody and he was led away from the Brooklyn courtroom by U.S. Marshals. On Thursday, during a break in the trial, Nordlicht began yelling at prosecutor Lauren Elbert in a hallway outside the courtroom and “lunged at her,” according to the judge, prompting Nordlicht’s wife to intervene. After Judge Cogan was informed, he ordered a bond revocation hearing.For a reprint of this article, please contact reprints@law360.com.

Murray Huberfeld and a Platinum Laden 45 Pages, He Should be Sharing a Cell with Madoff, Not Given Leniency

huberfeld submission 7 million restitution_page_01
huberfeld, submission, 7 million restitution

Respectfully Submitted, Platinum Was a Ponzi Scheme and Huberfeld is a Serial Fraudster, a Pattern and Practice that Began in the 90’s

https://www.sec.gov/litigation/litreleases/lr15826.txt

We began reporting on Murray Huberfeld and his involvement with the Platinum Partners fraud in 2016. He defrauded investors, full stop. He defrauded a pension fund, COBA. His willingness to repay $7M back to COBA, as set forth in the 45 page call for leniency by his attorneys, is not an act of generosity. In fact, it is a slap on the wrist for someone who has turned defrauding investors, siphoning off money and then starting again into an art form. He admitted to a very minor offense in comparison to what charges could have been served. Moreover, we think the repayment to COBA may very well represent an admission to a different crime. He does not seem to have admitted to defrauding the COBA investors.

The above is a link to the 45 page submission provided by Mr. Huberfeld’s attorneys to the Judge in his sentencing hearing. It makes for nauseating reading, and that is being quite kind. It includes pages and pages of statements by family and friends. It is worth noting that at least two of those friends, included in the myriad of support he received, are convicted felons. If we are defined by the company we keep?

The sprawling display of creative lawyering speaks of apologies and humility and the unusual circumstances of this particular fraud. What made this one different? Murray Huberfeld got caught. He should be punished for a pattern and practice of criminal behavior, one that has defined his life, at least since the 90’s. Murray Huberfled should not be rewarded for his hollow attempts at restitution and alleged quasi-generosity.

He is not living a life of “tsinius” by any means.

Like the others in his litany of Madoff-like Ponzi schemes, he will likely escape unscathed, only to begin another. Contrary to comments by his attorneys, Marty Huberfeld is a criminal mastermind. He is a brilliant architect of intricate schemes. He is well versed in energy regulatory structures, diamond mining, real estate, healthcare and nursing homes. The man is not the naive fool as alleged by his attorneys. Quite the contrary. Well crafted fraudulent schemes are his modus operandi. Platinum partners was just one in a non-exhausted serial of enterprises: Broad, Centrion, Viridian, Black Elk, COBA, and the list goes on and on and on. 

Make no mistake, Murray Huberfeld is no Robin Hood and, contrary to the eloquence of his attorneys, he does not have integrity sweating from his pores as that 45 pages would have us believe. He has used charity to provide the cover of philanthropy and altruism; and we would argue, to launder money. Whatever financial benefit he has given away has not been based upon altruism and bleeding heart generosity. It has been a ruse to cover up behavior far darker, a serial pattern and practice of fraud and lies.

Sadly, Mr. Huberfeld’s plea by his attorneys includes letters and statements, testaments of beneficiaries of Huberfeld’s supposed generosity. He is supported by his friends and family which include other convicted felons. His attorneys have painted a picture of unicorns and rainbows; and it is all remarkably ill-gotten.   

We ask: what about his victims? Do they not matter? What about the family fortunes and lives ruined by his crimes? What about government institutions, the SEC, the tax authorities, the Federal Energy Regulatory Commission, the laws of the land? They have been and continue to be demeaned and disgraced by his actions? Are those to be ignored because one life ruined is outweighed by the 45 pages of fluff provided by his attorneys? 

Those 45 pages are insultingly absent the clarity that Mr. Huberfeld is a serial fraudster. He began in the 1990’s by paying someone else to sit for his SEC licensing exams. He was given a pass, one which paved the way for him to perfect his ability to outwit law enforcement. That should not go unnoticed. We contend that if the past speaks to the future it will not end here.

Murray Huberfeld would not be truly sorry for the depth of the damage he has caused, not only to individual investors, the victims of each of his schemes, but to the integrity of the markets, unless he were given the harshest possible sentence.

We hope the Judge in the case has the moral fortitude and good sense to do just that, to overlook the statements of his supposed beneficiaries, those who were afforded nothing more than the benefits of dirty money, and to finally give him more than a simple slap on the wrist.  

 

 

ADDITIONAL READING:

https://www.haaretz.com/us-news/.premium-jewish-hedge-fund-execs-charged-in-1-billion-ponzi-scheme-1.5477337

scores-obstfeld-grin-and-more

https://www.institutionalinvestor.com/article/b150xwhg75tcth/platinum-to-manage-centurion-fund

 

Their Platinum Wives: Dahlia Kalter – Kalter Gilad Cook Islands Trust, OBH 2308 LLC, RRR

uri-landesman

Please, dear reader read carefully. The irony cannot be lost on you that every penny that disappeared from the various Platinum entities, wound up in the wives’ funds, accounts, trusts, real estate holdings, jewelry foundations etc.

Mark Nordlicht has all but convinced the courts that he is penniless. That’s probably true. But Dahlia Kalter Nordlicht? She has way more than 2 nickles to rub together.

Have you forgotten about the Herbert Stettin case from 2011? Have you not considered the defendants in that case and the connections among them?

See for yourselves: 

https://www.law360.com/articles/268406/rothstein-trustee-goes-after-hedge-fund-heads-for-40m

Fast-forward to 2016 and The Talk of the Sound:

Two New Rochelle Men Among Seven Indicted In A $1 Billion “Ponzi-esque” Investment Fraud

The Wall Street Journal reported that Platinum’s investors were focused in the observant Jewish community. Nordlicht and his wife Dahlia Kalter-Nordlicht are active members of Young Israel of New Rochelle, both are board members of the Westchester Torah Academy located in New Rochelle, NY and endowed The Fred Kahane Technological High School, an Americans for Israel and Torah (AMIT) school in Ashkelon Israel.

Three of those arrested attended Yeshiva University, according to The Commentator, the school’s official student newspaper,  Mark (Meir) Nordlicht graduated from Yeshiva University in 1990 with a bachelor’s in philosophy. Uri Landesman attended Yeshiva University in the 1980s. David Levy graduated from Yeshiva University in 2006.

According to news reports, Mark Nordlicht was considering taking out a second $7.5M mortgage on his home.

As the New York City-based hedge fund began to go under in December 2015, Nordlicht wrote that he was thinking about using $7.5 million from a second mortgage on his home to try to keep it afloat, the papers say. He also was considering fleeing the country, they say.

That property could not have been his primary residence in New Rochelle which is estimated to be worth about $1.5 million and is held in a trust. As Platinum Partners faltered, some time between 2012 and 2016, the property at 245 Trenor Avenue was transferred from Dahlia Kalter, Nordlicht’s wife and a past employee of Platinum Partners, to Kalter Gilad Cook Islands Trust Limited.

The property may have instead been one in Florida owned by OBH 2308 LLC, a limited liability company which owns 10295 Collins Ave Unit 2308 at One Bal Harbour Ritz Carlton. The 5,266 square foot apartment, with 4 bedrooms and 5 bathrooms overlooking the ocean, is currently listed for sale at $9,995,000, The realtor describes the property as “the largest unit for sale in the building”.

The Principal of OBH 2308 LLC is Dahlia Kalter.

Nordlicht, Levy, Landesman, SanFilippo and Mann are charged with securities fraud, investment adviser fraud, securities fraud conspiracy, investment adviser fraud conspiracy and wire fraud conspiracy for defrauding investors through, among other things, the overvaluation of their largest assets, the concealment of severe cash flow problems at Platinum’s signature fund, and the preferential payment of redemptions. Nordlicht, Levy, Small and Shulse are charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy for defrauding Black Elk’s independent bondholders through a fraudulent offering document and diverting more than $95 million in proceeds to Platinum by falsely representing in the offering document that Platinum controlled approximately $18 million of the bonds when, in fact, Platinum controlled more than $98 million of the bonds.

Nordlicht, Levy, Landesman, SanFilippo, Mann, Small and Shulse will be arraigned later today before United States Magistrate Judge Lois Bloom at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. Shulse’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 515 Rusk Avenue, Houston, Texas.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Philip Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS).

“As alleged, Nordlicht and his cohorts engaged in one of the largest and most brazen investment frauds perpetrated on the investing public, earning Platinum more than $100 million in fees during the charged conspiracy. Platinum Partners purported to be a standard bearer in the hedge fund industry, reporting annual average returns of more than 17 percent since inception in 2003. In reality, their returns were the result of the overvaluation of their largest assets, which eventually led to Nordlicht and his co-conspirators operating Platinum like a Ponzi scheme, where they used loans and new investor funds to pay off existing investors,” stated United States Attorney Capers. “The charges and arrests announced today reflect our steadfast commitment to holding accountable hedge funds on Wall Street who rip off investors for personal gain.”  Mr. Capers thanked the Securities and Exchange Commission, New York Regional Office (SEC) for their significant cooperation and assistance during the investigation.

 

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