A Platinum Vindication – Platinum Partners and Sufficient Evidence of Fraud

As the readers of this blog may remember, the Platinum Partners fraud was widely covered in and around 2016 and 2017. The coverage included years of research on the part of a small group of very dedicated people who collaboratively amassed a treasure trove of information regarding the Platinum Partners hedge fund, its activities, the defrauding of millions of dollars in investor money, bribery, securities fraud and the list goes on.

We attended hearings on the frauds related to Black Elk Energy in 2019 and, by all estimation and analyses, we had the partners dead-to-rights on, at the very least, the securities fraud. And then, in what we believed to be a shocking turn of events, Judge Cogan, an altogether brilliant member of the legal community, overturned a jury verdict and acquitted one of the partners and granted the other a new trial. Overturning a jury verdict is unusual. Acquitting a convicted man made our heads turn.

The Black Elk Energy deal, while complicated and nuanced, represented a clever, if not unimaginably creative manipulation of the rights of the unsecured bondholders against the secured bondholders, allowing the Platinum Partners (unsecured bondholders) to divest Black Elk of Millions and Millions of Dollars in valuable oil assets, thereby leaving the secured investors (those same voting shareholders) with nothing. You see, once the secured property is filtered out of any company, the secured holders of debt and financial obligations are left with nothing to secure. This can, if properly directed, reduce the secured bondholders to a position below the unsecured bondholders who, in the ordinary course, would have been paid out first. However, such a vote would have required the Platinum Partners responsible for that vote to have sat down and affirmatively orchestrated such a corporate action. This could not have lacked criminal intent, particularly when David Levy (who was acquitted on those grounds) was and continues to be, one of the largest beneficiaries of the Black Elk deal.

Taking a step back in time, the takeover of control of Black Elk, which began in 2007 when Platinum began investing in the Black Elk Energy company, was a corporate move that legends are made of, a slight of hand and a measure of serendipity. The slow bleed of that company of its assets and value, by the very partners who were supposed to be acting in the best interest of the company did not go unnoticed, at least by us. It was carefully orchestrated and it had a measure of well-honed finesse.

In simple terms convincing secured shareholders to vote on a measure which was framed to them as a vote in the best interest of the company, and ultimately paved the way for the Platinum Partners to drain assets, followed a pattern and practice of corporate behavior by Platinum’s Partners, at least for anyone keeping tabs of their activities.

And yet, at the end of it all Judge Cogan ruled that David Levy lacked criminal intent and Mark Nordlicht was entitled to a new trial. Sadly, we were left bereft by the miscarriage of justice. What occurred in the years leading up to that trial was more than criminally intentional, it was very dark. What has transpired since, is astounding.

The Partners have not starved, as one would think when a company goes from having $1.7 Billions of Assets under Management to nothing (at least nothing being reported). At the end of the day, the greatest beneficiaries of that vote, were the Platinum Partners, and despite contentions to the contrary, these men got very rich off their crimes.

And while Mark Nordlicht later filed for bankruptcy protection (in and around late 2019), anyone who looks hard enough will likely find that he siphoned off his personal assets to family members and offshore accounts and is really, not impoverished. Nor, might we add, is he entitled to bankruptcy protections.

On Thursday, November 5, 2021, a three panel U.S. Appeals Court, after 9 weeks of testimony, unanimously restored the convictions of Mark Nordlicht and David Levy. In a 102-page decision, they determined that the evidence supported the conviction of Mark Nordlicht and did not support a finding of David Levy’s lacking “criminal intent.”

A little vindication goes a long way. Murray Huberfeld’s dramatically reduced sentence remains a slap in the face for his victims in the Platinum Partners fraud. Hopefully David Levy and Mark Nordlicht and their high-priced legal team will not succeed in convincing a judge that they deserve a reduced sentence. They unequivocally do not.

See below for additional reading and a copy of he decision.

U.S. appeals court restores Platinum Partners executives’ fraud convictions

NEW YORK, Nov 5 (Reuters) – A U.S. appeals court on Friday restored the fraud convictions of two former top executives at the now-defunct Platinum Partners hedge fund, saying a trial judge erred in acquitting one defendant and granting the other a new trial.

In a 102-page decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said sufficient evidence supported the July 2019 jury convictions of Platinum co-founder Mark Nordlicht and co-chief investment officer David Levy.

The appeals court returned the case to U.S. District Judge Brian Cogan in Brooklyn for sentencing. Platinum was based in Manhattan and once had about $1.7 billion of assets.

Appeals Court Reinstates Convictions of Platinum Partners Executives

Hedge fund founder Mark Nordlicht and co-chief investment officer David Levy were convicted in 2019 of securities fraud and other charges

Mark Nordlicht, the founder of defunct hedge fund Platinum Partners, leaving federal court in the Brooklyn borough of New York in 2019.

The U.S. attorney’s office for the Eastern District of New York, which prosecuted the case, appealed that decision.

In Friday’s ruling, U.S. Circuit Judge Robert Sack wrote that there had been sufficient evidence for a rational jury to convict the defendants, and neither an acquittal or new trial was warranted.

“It is accordingly only in exceptional circumstances, where there is ‘a real concern that an innocent person may have been convicted,’ that a court ‘may intrude upon the jury function of credibility assessment’ and grant a [motion for a new trial],” he wrote, quoting from another case.

Lawyers for Messrs. Nordlicht and Levy didn’t respond to requests for comment.  A spokesman for the U.S. attorney’s office declined to comment.

The Decision decided on November 5, 2021 by the 3 Member Appellate Panel

Crown Heights Chabad Lawyer to Plead Guilty

SCHEDULING ORDER as to Shimon Rosenfeld: The parties shall appear for a Guilty Plea via Video Remote on May 20, 2021 at 11:00 am. A link has been sent to all parties. Non party participants may dial into the conference at 11:00 a.m. on May 20, 2021, by dialing 1-650-479-3207 and entering pinn 160 000 0489. Ordered by Judge Kiyo A. Matsumoto on 5/6/2021. (Williams-Jackson, Sandra) (Entered: 05/06/2021)Attachments area

Chaim Stern – Steals Millions from His Own Workers and Blames a Substandard Education – Really?

Published 5.6.21

Dear Reader:

Almost as disturbing as the theft committed by an allegedly religious man stealing from his underpaid employees in a nursing home; is the “justification” used to manipulate the mercy of others, namely, a poor education. This excuse for bad behavior creates quite a conundrum.

The State of New York (and likely others to follow) has taken a laissez faire attitude about Yeshiva education, namely that parents should be permitted to choose if to educate (or deny education for) their children. If a Yeshiva educated child comes out with an extraordinary knowledge of Jewish law, little or no ability to properly speak English, little or no future prospects (except perhaps fraud – as Stern illustrates) New York deems this acceptable. Now, it would seem, that same disenfranchisement (educational neglect) is being used to justify and perhaps escape accountability for frauds committed by poorly educated but “observant” Jews.

Something is very wrong with this picture. Either Yesivah children must be educated in civics subjects (oh… and right versus wrong) or they must be held fully accountable when that inadequate education leads to a life of fraud, theft, money laundering, and the list… grows and grows. The Yeshiva community really should not be able to eat their rugalach and have it to.

Former nursing home owner gets 2.5 years in prison for stealing more than $4M from employees

A former Connecticut nursing home owner will spend the next 2 1/2 years in prison for stealing more than $4 million from staff members’ pension and health plans. 

Chaim Stern, 72, of Flushing, NY, was sentenced to 30 months in prison for embezzlement and tax offenses, the U.S. Attorney’s Office for the District of Connecticut announced this week. His prison time will be followed by three years of supervised release. 

Stern’s sentencing comes three months after he pleaded guilty to the crimes that hurt three Connecticut nursing homes and led to the closure of one of them. 

Because of Stern, the facilities failed to pay employment taxes and pay its shares of employment taxes between January 2017 and March 2018. Stern’s crimes resulted in a total tax loss of about $4.3 million.

McKnights, to continue reading click here.

Philip Esformes – The Donald Commuted his Sentence – 6 Counts Short and the DOJ

Philip Esformes, a nursing home operator, was sentenced to 20 years in prison in a Medicare fraud case before President Trump commuted his sentence this week.
Philip Esformes, a nursing home operator, was sentenced to 20 years in prison in a Medicare fraud case before President Trump commuted his sentence this week.Credit…Rob Latour/Invision, via Associated Press

Dear Reader:

We applaud the decision on the part of the Department of Justice, which has announced that it intends to pursue the prosecution of the final 6 counts against Philip Esformes. The jurors failed to reach a conviction in April of 2019. The remaining counts were for “paying and receiving kickbacks, money laundering, bribery and obstruction of justice. A conviction on these counts would be a modicum of justice for the elderly and their families. While Esformes claims to be “spending most of his days studying with rabbis, working, reconnecting with his children, and taking care of his father…” In our opinion, there is no manner of decency Esformes can show that would compensate the hundreds of victims (and their families) of his crimes.

Donald Trump’s commutation of Esformes’ sentence was a deplorable act, in and of itself. The elderly and their families deserved better from their President at the time and they deserve justice now.

Feds Want Accused Medicare Fraudster Philip Esformes Confined Until Trial

May 4—Concerned that a convicted healthcare mogul freed by then-President Donald Trump might flee the country, Justice Department prosecutors urged a federal judge Tuesday to confine Philip Esformes to his South Florida home with an electronic ankle monitor and impose a $10.5 million bond to ensure his appearance for a new trial.

But their request was effectively rebuffed, at least for now.

U.S. District Judge Robert Scola instead granted a request by Esformes’ defense team to postpone the government’s bond proposal until mid-August, when it will be taken up again.

Justice Department prosecutors recently said they will pursue unresolved charges from Esformes’ healthcare fraud trial in 2019, when a federal jury deadlocked on the main conspiracy charge and five other offenses but found him guilty of 20 corruption-related counts. Scola sentenced Esformes to 20 years in prison and ordered him to pay $5.3 million in restitution to the taxpayer-funded Medicare program and a $38 million forfeiture fine.

“The trust that he broke was of epic proportions,” Allan Medina, the lead prosecutor in the $1 billion healthcare fraud case against Esformes, said at Tuesday’s hearing.

insurancenewsnet.com continue reading click here.

ADDITIONAL READING:

Continue reading

The Attorney and His “Flips” – Do your Due Diligence Before Investing!

U.S. Attorneys » Eastern District of New York » NewsSHAREDepartment of JusticeU.S. Attorney’s OfficeEastern District of New York


FOR IMMEDIATE RELEASEWednesday, January 27, 2021

Brooklyn Attorney Charged With Defrauding Real Estate Investors

Defendant Allegedly Misappropriated At Least $4 Million From His Victims

A criminal complaint was unsealed today in federal court in Brooklyn charging Shimon Rosenfeld, an attorney admitted to practice law in the State of New York since 1987, with defrauding multiple investors of at least $4 million by falsely claiming he was investing their funds in real estate opportunities.  Rosenfeld was arrested this morning and made his initial appearance this afternoon via videoconference before United States Chief Magistrate Judge Cheryl. L. Pollak.  The defendant was released on a $200,000 bond.

Seth D. DuCharme, Acting 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 Patrick J. Freaney, Deputy Special Agent-in-Charge, United States Secret Service, New York Field Office (USSS), announced the charge.

“Through this alleged scheme, Rosenfeld abused his position as an attorney and betrayed his victims’ trust for his own selfish gain,” stated Acting United States Attorney DuCharme.  “Those who commit fraud, including lawyers, must be brought to justice, and this Office will continue to work tenaciously to ensure integrity in the practice of law.”

“As alleged, Rosenfeld solicited investments based on his stated intent to purchase various real estate and ‘flip’ it for substantial profit.  In reality, he didn’t buy any properties, so there were none to sell.  Rather, Rosenfeld used the money he received to make his own financial trades and investments. Today, we’ve flipped the script on him and held him accountable for his fraudulent actions,” stated FBI Assistant Director-in-Charge Sweeney.

“The U.S. Secret Service remains dedicated to investigating those who commit financial fraud and would like to recognize the efforts of our law enforcement partners in helping bring them to justice,” stated USSS Deputy Special Agent-in-Charge Freaney. “This investigation exemplifies the success that law enforcement can achieve when working in a collaborative manner. In this instance, the defendant allegedly perpetrated a scheme to defraud and misappropriated funds from numerous victims for his own personal gain.”   

According to the complaint, between May 2014 and March 2018, Rosenfeld allegedly perpetrated a fraudulent scheme by soliciting and receiving approximately at least $4 million from various individuals (collectively, the “Victims”) based on fraudulent misrepresentations.  Specifically, Rosenfeld induced the Victims to invest their money with the defendant based, in part, on representations that he would purchase real estate and sell it to a prospective buyer at a higher price, also referred to as “flipping” the property.  Rosenfeld further told the Victims that he would split the profits from the real estate transactions with the Victims.  In reality, Rosenfeld misappropriated the investors’ money by directing the funds into bank accounts he controlled and using the money to trade securities out of his brokerage account. Rosenfeld falsely told the Victims that there were problems with the real estate transactions, such as title or appraisal issues, to explain why no properties had been purchased. 

If convicted of wire fraud, Rosenfeld faces up to 20 years’ imprisonment.  The charge in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Business & Securities Fraud Section.  Assistant United States Attorney Hiral D. Mehta is in charge of the prosecution.

The Defendant:

SHIMON ROSENFELD
Age:  59
Brooklyn, New York

E.D.N.Y. Docket No. 21-MJ-96Attachment(s): Download Rosenfeld ComplaintTopic(s): Financial FraudComponent(s): USAO – New York, EasternContact: John Marzulli United States Attorney’s Office (718) 254-6323

Brooklyn Attorney and $4M Real Estate Scam: Be Careful in Whom you Invest!

Brooklyn Attorney Charged In $4 Million Real Estate Scam: Feds

Shimon Rosenfeld is accused of using millions from real estate investors, including for a Crown Heights project, for his own trading.

BROOKLYN, NY — A Brooklyn attorney who scammed real estate investors out of millions of dollars has been charged with wire fraud, prosecutors announced.

Shimon Rosenfeld, 59, was arrested Wednesday after a federal investigation into his years-long scheme, which included at least $4 million “investments” in properties in Crown Heights, Greenpoint and in Philadelphia, Pa., according to court documents.

Rosenfeld told at least four investors that he would put their money into real estate projects, but instead ended up using the money for his own trades out of a brokerage account, prosecutors said. He is charged with wire fraud and could face 20 years in prison if convicted.

“Through this alleged scheme, Rosenfeld abused his position as an attorney and betrayed his victims’ trust for his own selfish gain,” stated Acting United States Attorney Seth DuCharme. Those who commit fraud, including lawyers, must be brought to justice, and this Office will continue to work tenaciously to ensure integrity in the practice of law.”

To continue reading, click here.

The Presidential Pardon… One of Many… Shulem a/k/a Sholem a/k/a Sholam Weiss

The below commentary has been published with the Permission of the Author. The following article on his site can be found at: https://larrynoodles.com/otisville-pardon-party/ Before posting, however, we have provided a backdrop.

Note to Reader:

Before posting the below commentary we want to provide you with some political backdrop from the New York Times that may provide some color regarding the relationship between Weiss and the former US President.

845 Years in Prison, If the Authorities Can Catch Him; F.B.I. Says Fugitive Has a Flair For Fraud and Hiding Stolen Cash

Image
From the New York Times

OTISVILLE PARDON PARTY

Two days ago Otisville inmate Sholam Weiss was counting the days until the year 2738, the day he was scheduled to be released from Federal prison. Weiss got the longest sentence for white collar criminals in the history of the Republic, 600 years longer than Bernie Madoff, even though Weiss paid his $125 million restitution in full. Today, thanks to a Presidential pardon, Sholam Weiss danced with his family and friends in upstate New York. Sholam is the guy above with the white beard. Sholam and a few other guys scammed National Heritage Life Insurance Company, based out of Florida, out of $450 million.

Sholam, a member of the bearded Satmar sect, was clean shaven before he got COVID19 in Otisville. After COVID19 Sholam turned to religion. You won’t find any athiests in a foxhole. Sholam grew his Hasidic beard and survived the plague, and lived to see his 700 year prison sentence reduced to gornisht, nada, nothing. Sholam lived to see his day of freedom and redemption.

Sholam lived on the lam for a year in Europe with his stripper shiksa girlfriend hiding from the Feds before he was caught. Sholam’s long sentence was meant to deter others from fleeing from the long arm of the Justice Department. Sholam invested some of his ill begotten gains in Scores strip club in Manhattan. Sholam was partners at Scores with John Gotti Jr. and other mobsters. The party ended when the Feds raided the club and wired up a few guys who were connected to Sholam’s insurance company. The Feds in New York used these informants to bust the mob for extortion. The Feds in Florida used these same informants to bust Weiss and his assocites for the massive fraud they committed at National Heritage Life Insurance Company.

Weiss was locked up in the Otisville medium with Sholom Rubashkin, who got a commutation of his 27 year sentence a year ago. I was locked up in the Otisville camp, which was separated by the medium with a barbed wire fence. Every now and then I could look through the fence and see Rubashkin or Weiss, or Mordechai Samet, who got an early release this past September. Rubashkin and Weiss ran the chapel for the Jewish inmates locked up in the medium. Samet and Weiss were cellmates. I heard from guys in the medium that Weiss and Rubashkin didn’t get along. Weiss had shaved his beard and was not as religious as Rubashkin and Samet. Weiss, Samet and Rubashkin were the only religious Jews in the medium for several years. I used to watch Samet jog every day in the medium with an African American inmate.

There was never more than a dozen Jewish inmates in the Otisville medium. In the camp there was always about 80 or more Jewish inmates out of a total of 118 inmates. The medium had about 700 inmates. Today the camp probably has less than 30 Jewish inmates and around 65 total campers, due to COVID19. If you had under ten years you went to the camp, if you had more than ten years you went to the medium. The Otisville medium was not as violent as most medium prisons, State or Federal, but there were reformed gang members and lifers locked up there, as well as aging mafioso who were sentenced in the 1980s.

Otisville inmate Jonathan Braun was scheduled to be released in 2027. Braun was an international pot dealer. Braun got ten years. Braun is a very wealthy man. Braun ran a high interest money lending operation for years while he waited to be sentenced. Borrowers filed lawsuits against him for his strong arm collection practices. Braun is currently celebrating his pardon with his wife and children in his new house he purchased recently. Braun said goodbye to New York Democratic political power broker Sheldon Silver, who is still locked up in the Otisville camp. Silver has four years to go. Silver tried to get a pardon but was stymied by Republicans as well Democrat Andrew Cuomo, who called the Donald to object to 76 year old Silver’s early release. According to the New York Times, Cuomo suggested that “the Jewish community” was lobbying the Donald to pardon Silver. Cuomo would be called a racist if he said that Snoop Dogg and the African American community lobbied to get Death Row Records founder Michael Harris a commutation. Harris was doing a life sentence for conspiracy to commit murder and drug dealing. Harris was a model inmate after 25 long years in Federal prison. It was time to go home.

Former Otisville inmate 43 year old Helle Nahmad was granted a post prison pardon. Helle did about 6 months in the Otisville camp for his role in a high end illegal sports betting ring, which also included Molly Bloom, who was the main character in the movie “Molly’s Game.” The Nahmad family is worth billions of dollars and owns the largest collection of Picasso paintings in the world. I was locked up with Helle. I taught Helle how to mop a floor in Otisville. Apparently billionaires don’t teach their children how to mop. Al Capone’s nickname at Alcatraz was “the wop with the mop.” Helle’s nickname at Otisville was “H’ell.” Helle was a decent guy. Helle regaled us with stories about the high life, where he partied with the rich and famous. Helle’s best friends were Leonardo DiCaprio, Tom Brady and Tom’s wife supermodel Gisele. Everyone wanted to be Helle’s friend. But Helle didn’t like phonies. Helle liked to spend every night playing backgammon with a heavy set Italian guy from Maine, who was missing a few teeth, named Sonny. Sonny told everyone that Helle and him were besties and Helle was going to set him up in the art business when he got out. Sonny ended up getting shipped out of Otisville because he failed to pay a big gambling debt he had with another inmate. Sonny almost had a heart attack in my cell. Helle kept in touch with some of the guys after he got released, but he was not the type to give away money to ex-cons. He was a businessman. He sometimes compained about people on the outside who tried to rip him off. Helle had one of the actors from the Wolf of Wall Street visit him in Otisville.

45 year old real estate fraudster Eliyahu Weinstein was locked up in Fort Dix and was scheduled to be released on December 25, 2033 when he got a commutation of his sentence. Eli operated a real estate investment scheme out of Lakewood, NJ, and scammed Jewish investors in Lakewood out of a half a billion dollars, if not close to a billion. Eli is celebrating his freedom in Lakewood, but he will be back in Fort Dix if he violates his probation and starts up new scams. I predict that Eli will end up back in prison in a couple of years. Guys like Eli are addicted to crime.

Two Otisville guys who tried to get pardons and commutations apparently didn’t make the cut, Hassan Nemazee and Rabbi Mendel Epstein. Iranian-American Hassan Nemazee was a big time fundraiser for the Democratic Party. Nemazee was close to the Clintons, but not close enough to get pardoned by the Democrats. Nemazee was able to scam Citibank out of $200 million dollars by submitting a few phony brokerage statements of his net worth. Nemazee got ten years in Otisville. I was locked up with Nemazee. Nemazee was an arrogant old man. Nemazee was the Persian prince. Nemazee finished his sentence a couple of years ago. Before Nemazee got released he got in a physical fight with another old man. The guards laughed at them and threw them in solitary. I assume the Donald rejected Nemazee for the same reason that the Donald rejected Democrat Sheldon Silver, which is strange because there is speculation that the Donald will form his own political party. 75 year old Rabbi Epstein is locked up in Butner, after getting transferred out of Otisville for medical reasons. Epstein got COVID19. Epstein is scheduled to be released in 2024. I don’t know why the Donald passed over Epstein. Epstein and Nemazee may have better luck with Joe Biden.

A video of Shulem Weiss a few hours after his release from Otisville was posted on Youtube. Weiss, along with the other guys who were pardoned, were very wealthy and had big time political connections. Its not fair that they got released while hundreds of thousands of other guys are still locked up in animal cages. But anyone who has ever been locked up for a substantial period of time is celebrating their release. Nobody forgets the day of their liberation. The punishment does not always fit the crime. I met hundreds of guys in Otisville. I only know of two guys who ended up back in prison.

Sholem Weiss in the Otisville prison parking lot after his release today