by Ziad K. Abdelnour – Founder & Chairman; Financial Policy Council and President & CEO Blackhawk Partners
Partly in adherence to the visions of Fredrick Hayek’s “The Road to Serfdom,” the Financial Policy Council is publishing a timely treaties, “The Road to Tyranny,” which in certain respects is the twenty-first century, updated and expanded version of the original, which argues that “Western democracies’ attraction to socialism will take them down a path to authoritarian dictatorships like those in Soviet Russia and Nazi Germany.”
Like Hayek, who was a brilliant observer of the human condition, the “Tyranny” reminds us that government bureaucracies are dangerous, in part because they tend not to attract “angels.” Indeed, the presumed self-serving ambitions of the bureaucrats were deemed by our Founders to be so potentially hazardous to the society that they erected a paradigm of the Separation of Powers, with a system of competing check-and-balances between the government branches. To quote James Madison: “Ambition must be made to counteract ambition…It may be a reflection on human nature that such devices should be necessary to control the abuses of government.”
The “Tyranny’s” remarkable merit resides in the fact that it exposes the vaunted Separation of Powers principle as nothing more than a fraudulent façade. To make its point, the “Tyranny” goes on a journey through an American judicial system from the perspective of an American citizen who had become an actual target of the over-ambitious bureaucrats, and whose sole “guilt” appears to have been his outstanding success. This real-life journey, which along the way encounters iconic personae like Simon Wiesenthal, Jack Nash, Paul Newman, among others, revels that the Road to Tyranny is much closer to its advertised destination than most assume, and it is largely due to the egregious failure of the judicial branch to fulfill its Constitutional mandate. As Charles de Montesquieu observed: “There is no crueler tyranny than that which is perpetuated under the shield of law and in the name of justice.”
According to the cited federal judge Rakoff: “The criminal justice system… has become a system of plea bargaining.” …. “We have tens of thousands of innocent people who are in prison, right now, for crimes they never committed because they were coerced into pleading guilty.” Other words, the American legal “Due Process,” in reality, has become a “Duress Process,” intended to bludgeon defendants into a plea deal, and pre-trial capitulation, with the judges, increasingly fostering the process. That is the very definition of “tyranny.” In its intent and tone, the “Tyranny” reminds of Emile Zola’s “J’ Accuse…!”. It is also an inspirational call to arms for all, with a guiding example of a protagonist patriot, who survived to expose the corrupt system. In channeling Thomas Paine’s spirit: “It is a duty of the patriot to protect his country from the government.”
“The Road to Tyranny”
By Stanford B. Silverman – Board Member – Financial Policy Council and Chairman & Founder – Minerva Capital Management
One of the things that attracts me to the Financial Policy Council (FPC), is its splendid mission of helping to guard the entrepreneurial America from the economic-vitality sapping, and the personal-liberty curtailing clutches of the meddling encroachment by the gargantuan government. As a director of FPC, it has been my privilege to help advance multiple educational and business initiatives that support the institution’s noble mission. And of course, my own education has also greatly benefited from the illuminating and inspiring exposure to the many accomplished individuals, who are likewise imbued with the FPC’s spirit and values.
The purpose of this essay is to impart just how urgent a need there is for an impactful, American liberty-sheltering organizations, such as FPC, given that, as discussed below, the institutions that most Americans assume will protect them from the government’s overreach, in reality appear increasingly to be little more than ineffectual, self-serving imposters. Although the foregoing may sound somewhat hyperbolic, in reality, as the story below depicts, it actually understates the existential crises that imperils our very freedom. By exposing the government’s misconduct, as perpetrated by any and all of its branches, as well as marshalling resources to redress injustice, the FPC also hopes to do its part to deter future abuses.
The Fallacy of Checks and Balances
At FPC we take pride in calling the facts as they objectively are, and not as we wish them to be. And we don’t bend our principles in supplication to the prevailing political zeitgeist, even if a given stance ruffles feathers. Our only agenda is an unvarnished, verifiable truth. Therefore, we have to hoot, howl and thunder at the hypocrisy that surfaced from the recent Office of Inspector General’s (OIG) report, prepared in connection to its inquiry into the FBI’s shady investigation of the Donald Trump’s presidential campaign. Most level-headed and reasonably informed Americans were not that surprised to learn from the report that the FBI, had yet again acted unethically, unlawfully, and brazenly disregarded its own official rules and procedures.
Yet the chief FISA judge Rosemary Collier, a federal judge of nearly two decades, who’s in charge of the court’s mandated with protecting citizens’ liberties from the abusive encroachment by the snooping federal agencies, appears be shocked that FBI had yet again violated the rights of American public. In her recent letter to the director of FBI – Christopher A. Wray – Judge Collier laments, pursuant to OIG revelations: “The frequency with which representations made by FBI personnel turned out to be unsupported or contradicted by information in their possession, and with which they withheld information detrimental to their case, calls into question whether information contained in other FBI applications is reliable.” Judge Collier portrays herself as dumbfounded to discover that the FBI (which many take to mean the: “Fabricators of Bogus Indictments”) had failed to live up to its “duty of candor.”
Judge Collier’s “surprise” at government agencies’ unethical and lawless conduct, at the minimum, sounds insincere. It reminds one of the classic “Casablanca” scene in which Captain Renault, after closing down Rick’s Café, pronounces himself to be “shocked, shocked!” to learn – what he has long known and tolerated – that various proscribed activities were flourishing on the premises.
Has Judge Collier forgotten that the very FISA courts she oversees were an upshot and consequence of the earlier government agencies’ snooping scandals, as became apparent from the “Church Commission” (chaired by Senator Frank Church) investigations in the mid-Seventies?
In a powerful declaration, circa 1976, Senator Church stated: “I know the capacity that is there to make tyranny total in America, and we must see to it that this agency (referring to NSA) and all agencies (including FBI, CIA and IRS) that possess this technology operate within the law and under proper supervision so that we never cross over that abyss.”
The Church Commission’s findings led directly to the formation of the FISA courts in the late Seventies, and their principal function was to provide the said “proper supervision,” over what was reasonably presumed to be an innately overreaching government personnel.
So what does the FISA courts’ now forty-plus year-record tell us about its effectiveness in the mandated “proper supervision” of the federal agencies? Certainly, while the OIG’s findings are dejecting, the unadorned reality is vastly more alarming than that suggested by the report. Consider that since FISA’s formation, according to its own publically disclosed information, the courts had received 41,222 (through 2017) applications by federal agencies for surveillance warrants. Of those, the FISA courts, for all practical purposes approved essentially all of them! (99.8% approval rate).
The Framers, as discussed below, would have likely bellowed “farce!” at this judicial rubber-stamping paradigm, given that such pro-government partisan posture by the courts, on its face, bespeaks judges’ utter faith and certainty that the government agents who were submitting those applications were all infallible “angels.”
Of course, only a sham or utterly credulous court could act with such blind belief in the government personnel’s good faith, as this is not how life works in reality. Manifestly, this is not what James Madison observed of human nature when he averred in the Federalist No. 51: “If angels were to govern men, neither external nor internal controls on government would be necessary…”
We’re also in total agreement with The Wall Street Journal (December 18, 2019) on the matter of Judge Collier’s cynical posturing, which opined: “After the Horowitz (OIG) report, the court had no choice but to respond. It’s predictably pointing fingers at the FBI, but the court should itself account for its failure to provide more scrutiny, and its refusal to act when Mr. Nunes (Republican Congressman, Devin Nunes) first exposed the problem. The FBI is far from alone in this disgrace.”
Long ago, William F. Buckley cautioned that: “…the state is in the business of aggrandizing its power” …Thus unless it is effectively restrained by a functioning judiciary, the government tumor of tyranny will continue to metastasize until it suffocates its host body.
The broadening of the culpability, expanding from the government agencies to the courts, should reasonably be viewed as including all courts, and not just FISA. Whether the feds are seeking surveillance warrants, search warrants, arrest warrants, or any action by the courts, the lack of actual judicial oversight only emboldens the government agents, and, by arming the government agents with the court’s imprimatur, often fosters a still more egregious conduct.
The Wall Street Journal was on the money again, when it stated: “Congress created FISA in the late 1970s to protect against previous FBI wiretap abuses. Clearly it hasn’t worked….and now we know it [injecting judges into the process] abets abuse more than prevents it.”
The American Government: The Dream and the Nightmare
In order to present a large existential theme in a resonating manner, it often helps to present the experience from an individual, real life perspective. The rogue, unchecked and unaccountable government story below should be particularly pertinent to the FPC’s patrons, for a couple of contrasting reasons. While it certainly celebrates the type of entrepreneurial rugs-to-extraordinary-riches success story that was most likely to be realized in America, it also, terrifyingly, depicts how that very success put a bull’s-eye target on the entrepreneur’s back, for the judiciary-unchecked, self-serving government prosecutors to shoot at.
What makes this story particularly unique however, is not merely the fact that the law-disregarding, yet immune from prosecution prosecutors went spectacularly off-the-rails in a blind pursuit of their career-boosting conviction statistics. Sadly, there are countless instances of prosecutorial malfeasance, but those are usually in some context of an overzealous maneuvering in pursuit of actual, or at least likely criminals.
Here, however, the record plainly shows, that the prosecutorial perfidy reached a new pinnacle, as the only “crimes” committed were by the very prosecutors (based in Miami, Florida), who concocted a cockamamie entrapment scheme, calculated to ensnare essentially random citizens, who the prosecutors knew were innocent of any wrongdoing.
It gets worse. For as lawless and morally odious the conduct of the prosecutors was, the risk of such government gangsterism was splendidly foreseen by the Framers, as evidenced by their profound insight into the human nature. On this point, James Madison acknowledged his intellectual debt to the eighteen-century judge and a political philosopher, Charles de Montesquieu, who in his “The Spirit of the Laws” treatise observed: “There is no crueler tyranny than that which is perpetuated under the shield of law and in the name of justice.”
Madison, in drafting the Federalist Papers, particularly the Federalist No. 51 (which is one of the most human-nature-insightful discourses on the necessity of the Separations of Powers), makes manifest that the self-interested human beings, including those representing the state, are “no angels.” To cite the most salient and the essay-relevant excerpts from the Federalist No. 51: “….the great security against a gradual concentration of the several powers in the same department, consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others…. Ambition must be made to counteract ambition…It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary…”
In Federalist No. 75, Alexander Hamilton also feared that the unrestrained powers of the government office (in this case, presidential), might “… sacrifice his duty to his interest, which it would require superlative virtue to withstand.” Obviously, both Madison and Hamilton were seriously skeptical of the character and “virtue” of individuals who would control the all-powerful government bureaus, a legacy that should be incumbent on all of us.
The relevancy of Montesquieu, Madison and Hamilton is obvious here, but only in part because it is a story about a run amok prosecutorial corruption, perpetrated under the “shield (or ‘color’) of law.” Vastly more essential to the story is the petrifying reality that this utterly unconscionable conduct took place under the noses of the seemingly apathetic judges, who the likes of Montesquieu and Madison, had wrongly assumed would protect the public from the prosecutorial tyranny, as members of the all-powerful citizen-protecting judiciary branch (FISA’s failure is just one example). In fact, the court record in the relevant cases shows that the plainly unlawful judicial actions, which at times were blatantly barbaric towards the target of the unlawful prosecution, not only tolerated but also fostered further abuses by the executive-branch prosecutors.
Suffice it to say, if the due-process provisions guaranteed under the Constitution, are nothing more than a wishful dilution, as the protagonist of this story had learned, then the Constitution itself is a dead letter, and we’re well on a “road to tyranny.”
Read this essay in part as a channeling of Thomas Paine’s sprit, who said: “It is a duty of the patriot to protect his country from the government”
The Fallacy of the “Rule of Law”
Before discussing the specifics of the U.S. government’s unhinged and unchecked predatory conduct, which in this case commenced in 2001, it may be helpful to begin the tale in a reverse chronological order, by citing the would be story’s “climax” first. To wit, on April 27, 2011, a federal jury in Miami, after a trial, promptly exonerated the protagonist of the story (i.e., Michael Lauer). To be clear, Mr. Lauer, who had an impeccable professional and personal reputation before being arbitrarily targeted by the Miami based federal prosecutors (a jurisdiction with which he had no professional contact), stood accused of charges (alleged stock manipulation) that, if convicted, would have imprisoned him for the rest of his life. The sentencing guidelines for Lauer, who at the time was in his mid-fifties, called for 30+ years in prison. An emailed excerpt I examined from Mr. Lauer’s then attorney, stated: “Overall, the guideline range would be at least close to life. Let me know if you have any questions. Brian Feb. 10, 2010”. As a father of five very young daughters, the oldest one of whom was then 14 (youngest was 5), to Lauer, and more importantly, to his children (he was also a provider to, and a guardian of his then ailing, octogenarian mother), a sentence of “life” in prison would have been beyond catastrophic.
A slight digression at this point, for the sake of thorough disclosure. Nearly all of the information for this essay was obtained from the publicly available court records, related to the multiples cases the government, or its proxies had initiated. The records are voluminous as they are remarkable, given that they contain not only actual legal briefs and transcripts of the court proceedings, but also sworn declarations/affidavits by Lauer. The latter are particularly impressive, as the affidavits not only deny any wrongdoing by him or his firm (in addition to disclosing other salient facts), but they’re also submitted under oath. That means that Lauer was certain of the truthfulness of the assertions made therein, or he risked going to prison if he lied. Apparently, his government adversaries were also convinced in his truthfulness, as they never contested the affidavits, nor charged Lauer with perjury. Furthermore, in addition to sharing the PFC stage with Mr. Lauer on the hedge fund industry related themes, a topic on which he is an expert, I also spent many hours discussing with him the specifics of his extraordinary legal battles. Remarkably, in spite of his many and diverse personal and professional accomplishments, Lauer considers his unprovoked but eventually triumphant wars against the government as a gift from providence, which made possible his heretofore life’s “finest hour.”
In my view, in addition to embracing Lauer’s experience as an educational and an inspirational bequest, we should also behold it as a call-to-arms against the unchecked and unaccountable government tyrannical overreach, and the judiciary’s often fraudulent representation that it is doing anything to restrain it. Exceedingly few have the moral and physical courage, as well as the intellectual and emotional resources to fight, survive and prevail against the existential threat posed by an overbearing government. Thus Mr. Lauer’s remarkable battle and triumph should be a gift to all of us. And as his experience shows, if it happened to him, it could happen to any of us. Including the fact, that contrary to the popular truism, you can fight the government and win.
Only in America
Mr. Lauer’s personal and professional story was already partly memorialized by an extensive chapter in a book on hedge fund supremos in the early 2000’s, and there likely will be more books in the future, given that his life’s story became even more fascinating since. But in a nutshell, he was born in the Soviet Union, to medical-professional parents, who themselves survived the horrors of Hitlerism and the Stalinism, and never bent or compromised their integrity to those oppressive and murderous governments. When he was still a child, Lauer’s family moved from the Soviet Union to the then still communist Poland. At the beginning of the Seventies, when he was a teenager, after assuming enormous risks and sacrifices, he and his mother were very lucky to be able to escape Poland and eventually immigrate to the United States. Mr. Lauer and his mother had literally, less than zero upon their arrival in America, as they didn’t even speak English (all of his mother’s licenses, Soviet Union-issued academic and professional credentials were invalid in U.S.).
But the storybook realization of American dream was just commencing. Mr. Lauer held various jobs to support himself, and to finance his way through college, all while maintaining excellent academic standing. He also continued to actively participate in his life-long passions for boxing (continuing a family tradition) and ice hockey, among other pursuits. Motivated in part by his wish to counter the threat of the tyrannical communism his family experienced in the Soviet Union, after receiving his U.S. citizenship, he pursued a career as a Marine Corps aviator, by enlisting in Officer Candidate School. For a number of reasons, in the latter part of the Seventies, he redirected his professional ambitions to a career as an analyst with the Central Intelligence Agency. It was then, at the tail end of the decade, that his family’s close friend, the renowned Nazi-hunter Simon Wiesenthal, interceded and forcefully argued against Mr. Lauer’s then career choice. He also offered to make professional introductions, which would potentially offer other career vistas.
One of the individuals Mr. Wiesenthal introduced Mr. Lauer to was the financial services industry executive (then the CEO of Oppenheimer & Co) and eventually a hedge fund legend (Odyssey Partners), Jack Nash. That meeting, and Mr. Lauer’s own efforts led to a very successful career as a securities analyst and an investment banker, during which Mr. Lauer made his first fortune. In addition to becoming the largest financial supporter to Mr. Wiesenthal’s Nazi-hunting efforts by the late Eighties, Mr. Lauer also found time to pursue his passion for the world-wide travel, as well as flying, auto-racing, to name just a few.
In 1993, succumbing to his life-long entrepreneurial impulses, Mr. Lauer took another professional leap, by launching a hedge fund organization, which he named the Lancer Group. His vast stock-picking experience, honed during the preceding 13 years, including by providing investment advice to some of the industry’s most iconic hedge funds, suggested compelling odds for success. Mr. Lauer initially funded the Lancer Group with his own capital, but by the end of the decade, propelled by powerful performance and the strong investment appeal to other investors, the Lancer Group grew to well over one billion dollars in assets under management. This made Lancer one of the largest hedge funds at that time, and Mr. Lauer was its largest investor. As reported by the Lancer Fund’s independent auditors and administrators, the ten-year net returns for the organization’s flagship fund, averaged nearly 50% per year.
In addition to starting a family in 1997, by welcoming to the world his first (twin) daughters, his extraordinary American success financed the launch of other ventures. These included a professional boxing management company, which managed world class boxers, some to the world championships. He also substantially owned a film production company, which at times employed some of the greatest Hollywood stars, including cinematic icons like Kirk Douglass and Lauren Bacall. His aviation company provided aircraft for his own use, as well as for rental. But Mr. Lauer’s most consuming passion, aside from his family and Lancer, was his philanthropy and auto-racing. In these circles, he teamed with the greats like Paul Newman, who literally was Mr. Lauer’s, both auto-racing and philanthropic-activity teammate. Mr. Lauer’s deep sense of patriotism and great appreciation for America is reflected in understanding that this type of success story, all within a fraction of one generation, could have come to pass “only in America.”
A separate book could be written about Mr. Lauer’s Walter Mitty-type life and exploits, but even James Thurber (creator of “…Walter Mitty”) could not confabulate for a fictional character what “adventures” the Miami based government agents had contrived for its actual, real-life citizen. This is also where Mr. Lauer’s experiences become particularly relevant to us all, as they glaringly depict the level of moral depravity, unhinged lawlessness to which segments of the United States government have tumbled. And yes, these abuses take place precisely because the prosecutorial perpetrators are well aware that their oversight by courts is, at best, hollow.
The Government Gangsterism
Although the U.S. government’s arbitrary targeting of its citizens in various self-fabricated entrapment schemes is much more common than is generally recognized (more on that, below), one of the things that makes the instant story such an outlier, is that Mr. Lauer, once indicted, had refused to make any pretrial “plea deals” with the government, even though a plea deal would have likely entailed an incrementally a noncustodial sentence (…i.e.: “time served”). Instead, Lauer had literally wagered his life to uphold a moral principle, in defense of his and his family’s honor and reputation, and insisted on a trial on the merits. Lauer’s rejection of any plea deal consideration subverted the prosecutors’ assumption that he would capitulate pretrial, as do nearly 98% of defendants in federal courts.
A slight, but germane digression here. Much ink has been expanded in recent press on the Nissan’s CEO Carlos Ghosn’s legal adventures in the Japan’s judicial system (called “barbaric” by some). The most oft cited argument against the legitimacy and fairness of Japan’s judicial system is its nearly 99% historical conviction rate of the criminal defendants. If valid, then this skepticism-eliciting argument should also apply to the plea-bargain-driven American justice system, which at 98% sports a nearly identical conviction rate as Japan.
To continue; by summoning his parents’ survival instincts, Lauer refused to bow to the fraudulent system, as he knew that only a trial-test of the government’s supposed evidence would expose the prosecutors’ outrageous indictment bluff (i.e…the government’s assumption that it would terrorize him into a pretrial plea deal, and thereby obtain a conviction, without having to expose its empty evidence-hand against him). Lauer was certain that there was no wrongdoing (which is also why he left the vast majority of his funds co-invested with his clients), and thus no evidence of any unlawful conduct at his firm, by anyone. In fact, the record shows that when the government fabricated its unlawful entrapment scheme, it had no reason to even suspect that Lauer, or anyone at Lancer, would have been predisposed to any illegal conduct (…the law required a probable cause to launch a sting operation), given Lauer’s and his firm’s spotless long-standing reputation for professionalism and probity. It was therefore not surprising that even when the government’s undercover agents actively wooed Lauer into some presumed ersatz malfeasance, via the FBI-fabricated sting operation, he rebuffed all government-advanced lawlessness.
It appears that the only reason Lauer and his firm became a target of the Miami prosecutors, is that an indictment and ultimately a conviction notch against a large and successful hedge fund, would serve to advance the prosecutors’ careers. Otherwise, as discussed below, there were no operational red flags waving around Lancer, and certainly no legal transgressions, actual or even suspected.
Perhaps what may capture best Lauer’s character and unbreakable spirit most tellingly, are his own words as outlined in the legal motion he filed with the court in 2013, in one of the government-caused cases. It should be noted that he drafted and filed the briefs himself, as the courts had frozen all of his assets, before even a single hearing in the case, thereby restraining him from being able to hire an attorney.
Lauer boldly and righteously demanded the dishonest judge’s recusal, for blatant bias. Given that the judge caused the then pending case to be terminated, after letting them stew for a decade, while he tormented Lauer and his family in an attempt to strong-arm a settlement from him, only proves that the judge implicitly agreed with Lauer.
(from: MICHAEL LAUER’S MOTION AND AFFIDAVIT FOR JUDGE TO RECUSE)
The Defendant had endured enormous hardship at the Judge’s hands in his quest for a fair trial in the Lancer civil cases over the past decade. No American citizen enjoying the protection of the Constitution should go through such herculean (and Sisyphean) effort, just to obtain a fair hearing, in an impartial court. Certainly, this is not the version of the American Constitution Defendant took an oath to defend when he became a naturalized citizen in 1975, or when he entered the Marine Corps Officer Candidate School, a year later. Defendant had refused any and all settlement offers from the SEC and Receiver, because Defendant’s integrity and reputation are not negotiable. Indeed, because of the “blessing” of the criminal trial in 2011, Defendant had the privilege of rejecting all plea deals peddled by the prosecutors, and instead, literally wagered his life in defense of truth and justice. If need be, Defendant is ready to battle for justice over the next decade, but he is entitled to an impartial arbiter, who would preside from the neutral center of the ring, and not one tag-teamed with his adversaries.
WHEREFORE, Defendant respectfully requests the Court to grant the instant Motion to Recuse, and instruct the Clerk of the Court in Miami to submit the case for a random reassignment to another judge. Respectfully submitted, under oath, Michael Lauer pro se New York City, October 2013
Therefore, what Lauer’s battles with the government, and the eventual “trial” had exposed is that substantial elements of the American law enforcement is shockingly corrupt and morally muddled. Evidently, the essentially unaccountable prosecutors’ indictment consideration calculus, over which they exercise nearly complete discretion, is not based on whether the “evidence of wrongdoing is sufficient to prove the charges beyond a reasonable doubt,” as mandated by law.
Rather, the prosecutors’ principal animating consideration is whether “ a sufficiently coercive pressure could be brought against the targeted party, and whether a concurrently sufficiently attractive plea deal could be crafted, so that the presumably rational targeted party would be near-certain to accept the plea deal, and thus forgo the trial-test of the merits of the underlying case.” That being the case – as the record in Lauer’s case demonstrates – the Miami DOJ office was little more than a conviction extortion racket, driven primarily by the prosecutors’ own careerist agendas, with minimal judicial oversight. This reality should be terrifying to all righteous Americans, particularly since the prosecutors themselves enjoy a near total legal immunity for their blatantly lawless conduct.
The Department of Justice records show that prosecutorial targets strike plea bargains in approximately 98% of federal cases, and thereby not only forgo their rights to trial (and appeal), but also relinquish the rights to examine the government’s presumed evidence against them. As perceptively put by Harvey A. Silverglate in his 2009 book: “Three Felonies A Day; How the Feds Target the Innocent”: “Prosecutors are able to structure plea bargains in ways that make it nearly impossible for normal, rational, self-interested calculating people to risk going to trial.”………inescapable conclusion that the federal criminal justice system has become a crude conviction machine instead of an engine of truth and justice.” …Echoing Mr. Silverglate, Angela J. Davis (law professor at American University, and former federal public defender) writes in her book: “Arbitrary Justice; The Power of the American Prosecutor”: “Almost all criminal cases are resolved with a guilty plea by the defendant.” The highly regarded United States District judge (in NYC), the Hon. Jed Rakoff (a former criminal defense attorney and federal prosecutor) recently stated that: “The criminal justice system is nothing like you see on TV — it has become a system of plea bargaining.” Today, only 2 percent of cases in the federal system go to trial… As a result, accepting a deal from prosecutors — despite one’s guilt or innocence — has become a common choice for individuals accused of a crime.” Judge Rakoff continued: “Plea bargains have led many innocent people to take a deal.” ...“People accused of crimes are often offered five years by prosecutors or face 20 to 30 years if they go to trial. … ”…it’s a system of prosecutor power and prosecutor discretion. I saw it in real life as a criminal defense attorney, and I also know it in my work as a judge today.” “We have tens of thousands of innocent people who are in prison, right now, for crimes they never committed because they were coerced into pleading guilty. There’s got to be a way to limit this.”… “Until extraordinary action is taken, little will change.” ...according to Judge Rakoff.
To be sure, there’s a very real incentive for the ethically-challenged but creative prosecutors to fabricate schemes that cost-effectively and quickly boost their conviction statistics. And impressive conviction stats are the primary accelerating propellant of the prosecutors’ professional ascensions. This is exactly the type of self-interested, over-ambitious conduct that the Framers were concerned about, when drafting the Constitution, and mandated the judiciary with checking and restraining of the Executive Branch.
In the “The Myth of Moral Justice: Why Our Legal System Fails to Do What’s Right” Thane Rosenbaum (Fordham Law School – law professor and novelist) states: “Prosecutors are rewarded for their successful conviction rates – the ratio of assigned cases to convictions – and for making sure that defendants serve jail time”……and… “Of course, under the conventional legal paradigm, there are many people sitting in jail who are, in fact, innocent of any crime, but pleaded guilty under a plea arrangement in order to avoid the risk of a worse fate had they gone to trial.” In “The Conviction Factory: Trials Are Vanishing as the Rules of Court Procedure Tilt the Scales in Favor of the Government” Dr. Roger Roots, J.D., PhD (Professor of Criminal Justice at Jarvis Christian College in Hawkins, Texas), writes: “We often hear anecdotes about police traffic-ticket quotas around the country. But we rarely hear about prosecution quotas. At a Federalist Society symposium in Austin, Texas on March 2, a former federal prosecutor Julie Rose O’Sullivan (now an Associate Dean and Professor of Law at Georgetown University) admitted in public that federal prosecutors file charges simply get their “numbers up” by the end of the year. By increasing their “numbers” of prosecutions, O’Sullivan said, a U.S. Attorney’s Office gets more funding the following year. …… Today’s criminal courts – especially those at the federal level – are just barely adversarial. In practice, modern American criminal procedure grants an advantage to the prosecution that is comparable to that of the Spanish Inquisition courts of the 1300s.” ….“In essence, the legal profession has abandoned its commitment to adversarial technicalities and has embraced the greater efficiency of top-down inquisitorial justice”
Suffice it to say, no citizen is safe from the hyper-active and the judiciary-unchecked executive branch, as even the safeguards inscribed in the Constitution appear, at best, aspirational. The prosecutors now control the entire, the citizen-targeting-to-incarceration cycle, starting with the oft-arbitrary defendant targeting (through sting schemes), and culminating with a plea deal. As Lauer had learned from his battles (and OIG disclosed in connection with FISA), the judges, to whom the Constitution delegates the critical task of checking and restraining the Executive Branch’s excesses, have increasingly assumed a role of mere rubber-stamping robots, deferentially lending their imprimatur in the supplicant-service of the Executive Branch. This lack of accountability dangerously serves to further embolden prosecutors to intensify their abusive excesses.
It is revealing that in more than a decade after the U.S. government had commenced its unsuccessful campaign to obtain a conviction against Lauer, via the FBI-manufactured entrapment scheme (code-named “Bermuda Short”), and after spending well over $100 million (of U.S. taxpayers and the Lancer investors’ own funds), the government’s case against Lauer was exposed during the April 2011 trial to be so hollow and devoid of any evidence of wrongdoing that the government was not even able to present an “expert witness” who would, in exchange for substantial remuneration, offer some colorable inculpating testimony in support of the government-cobbled theory of the alleged wrongdoing. The trial record also shows that the government had failed to present as evidence a single document that would have suggested any improper securities trading transactions. This fact is particularly revealing of the government’s defective nature of claims given that unlawful trading activity was the government’s principal charge. Also remarkable is that the prosecutors could not present a single stock broker/market-maker as a witness who would testify that some improper trades were ever executed, or even requested on the behalf of Lauer’s hedge fund. Consequently, the government’s case proved so groundless that shortly after the jury commenced its deliberations (within an hour), it sent a note to the then presiding judge, asking, in sum and substance, as to: “what’s illegal here?” The judge in the criminal case appeared puzzled himself, and the jury’s exonerating verdict of “not guilty” followed shortly thereafter.
To further illustrate the government’s bad faith and hypocrisy, it is telling that while the DOJ and the SEC’s websites boastfully trumpeted to the public Lauer’s indictment in March of 2008 (which remain posted to this day on the respective websites), neither of the government’s agencies’ websites had the moral fortitude, integrity or a sense of fair play to inform the public about the outcome of Lauer’s actual trial, namely, the jury’s speedy rejection of all of the government’s claims, and consequent swift exoneration.
The outline of the government’s misconduct follows below, but to encapsulate, the U.S. government agents’ malfeasance began with an unlawful targeting for criminal prosecution, via a government-manufactured entrapment scheme (circa 2001 through 2003), of an upstanding American citizen, in spite of the fact that the government had no reason, or probable cause, to believe that Lauer (or anyone at his firm) had ever engaged in any criminality (Lauer’s and his Lancer colleagues’ professional and personal legal records were unblemished); or that he would have been predisposed to such. In fact, after Lauer had spurned multiple attempts by the government’s undercover entrapment teams (which was comprised of FBI agents, teamed with white-collar felons, with the latter vying for sentencing leniency in unrelated convictions) to ensnare him in ostensibly illegal conduct, the government must have known that Lauer was not only not corrupt, but also incorruptible, under any circumstances.
Yet, this failure to entrap would not do for the blindly over-ambitious Miami-based law enforcement bureaucrats, and with the benefit of relevant facts that have emerged over the past decade, it is clear that for the conviction scalp-hunting prosecutors, Lauer represented an attractive career-boosting target of opportunity. An indictment/conviction of a high-profile investment manager, of a large and successful hedge fund, would have been fodder for newspapers’ headlines, and would have certainly supercharge the prosecutors’ professional prospects.
In a conversation with Lauer, he told me that before having been targeted by the Miami DOJ, he believed that a state’s strategy of targeting innocent individuals first, with justification for the overreaching action as an afterthought, was a relic of governments with less stellar democratic credentials, such as the former Soviet Union. He cited Stalin’s notorious head of NKVD, Lavrenty Beria, who said: “Show me the man and I’ll find you the crime.”
To continue, when the DOJ’s Miami-based entrapment team failed to ensnare anyone at Lancer into its ersatz securities fraud scheme, it then, starting in about March of 2003, unlawfully recruited its Miami based colleagues at the Securities and Exchange Commission, for the purpose of obtaining documents from Lauer’s private hedge fund. The Miami DOJ’s intention was to use the Miami SEC branch to concoct a semblance of a civil case against Lauer, so that with its help a criminal indictment could be cobbled, while using the vastly more liberal rules of civil discovery to obtain evidence. Of course, it is unlawful for a criminal law enforcement agency, such as the DOJ, to utilize SEC (civil enforcement agency) as its discovery engine, which is precisely what was done here. To be clear, this was not a case of “parallel,” independent investigations by the Miami SEC and DOJ branches, which would have been legally permissible. Rather, the Miami-based DOJ affirmatively recruited and then utilized the Miami-based SEC office as its “cat’s paw” to surreptitiously circumvent the statutory federal rules of evidence discovery. It should also be noted that neither Lauer nor his hedge funds had ever any legal issues with any of the New York based federal or state law enforcement agencies (which arguably would have jurisdiction over the Lauer and his organization). Moreover, neither Lauer nor his hedge funds had any business dealings in Florida, so any ostensible connection between the Florida-based law enforcement agencies and Lauer, which was necessary for the government to establish for the purposes of claiming regional jurisdiction, was also brazenly fabricated by the overreaching Miami-based DOJ/SEC staffers. During a court hearing in 2010, the head of Miami SEC enforcement division admitted under oath that the Miami SEC’s regional jurisdiction extended only to Florida, Mississippi and Louisiana (as is also confirmed by the branch’s website).
The then newly recruited (by Miami DOJ) Miami SEC branch, before even starting a formal investigation of Lauer or his hedge funds (in fact, the funds were in an offshore jurisdiction of British Virgin Islands, where the U.S. government has no jurisdictional reach), or communicating any of its supposed concerns to Lauer, or to the funds’ independent directors, or anyone else at the funds, hastily filed a civil complaint (based solely on the voluntarily-provided documents by the funds’ attorney), in a Florida district court. Lauer, the investment companies and the funds’ attorneys, as well as its directors were kept completely in the dark regarding the Miami SEC’s complaint-filing intentions, and not even a customary “Wells Notice” was provided (SEC’s Wells Notice provides targets of investigations an opportunity to respond to SEC’s concerns, before a complaint is filed). A day after the filing of the complaint, there was an ex parte district court hearing (July 10, 2003) requested by the SEC, of which neither Lauer nor the directors were informed. From the subsequently obtained transcript of the ex parte hearing, it is evident that it was little more than a perfunctory proceeding, lasting approximately twenty minutes, and the Miami SEC attorneys’ factual representations made to the judge were riddled with outrageous fabrications. Notwithstanding, the then presiding judge granted all of the SEC’s requests, including appointment of a “receiver” over the hedge funds, which effectively shuttered the then decade old organization. The judge also ordered a blanket freeze on all of Lauer’s business and personal assets.
These points must be stressed, as the massive and irreparable damage to the hedge funds, caused by the U.S. government/judge, via the Miami’s SEC’s ex parte action, took place before the SEC had even started its formal investigation, and in spite of the fact that the hedge funds had unqualified audits from top auditors (PricewaterhouseCoopers). Thus, pursuant solely to a cursory ex parte hearing, removed from proper regional and personal jurisdiction, the then ten-year old, $1 billion + hedge fund organization was shuttered and effectively ceased to exist. All of the funds’ directors and employees were immediately terminated by the receiver (without severance, or any other benefits…), even though, with exception of Lauer, none were ever charged with any wrongdoing. As a result, Lauer’s impeccable professional reputation, built over a quarter of a century in the investment business, was ruined pursuant solely to a 20 minute-long, ex parte court hearing, conducted by another rubber-stamping judge.
By obtaining a freeze on all of Lauer’s assets, the SEC, among other things, also made it nearly impossible for him to hire legal counsel to litigate SEC’s claims. Furthermore, as per its original intent, the Miami SEC staff immediately delivered the “confidential” documents (which were voluntarily provided by Lancer’s attorney for the SEC’s eyes only) to their colleagues at the Miami DOJ office. As noted earlier, this type of collusion between the government’s criminal and civil agencies is unlawful, as it makes mockery of the separation between the criminal and civil rules of discovery. Nevertheless, using the Lancer-provided documents, the Miami-based FBI, obtained a search warrant (another judge-rubber-stamping formality, with nearly 99% approval rate) and raided Lancer’s offices in New York City (in the Seagram’s Building) and Stamford, Connecticut, on June 12, 2003.
It should be noted here that pursuant to a Freedom of Information Act request by Lauer, the SEC released some, highly redacted information regarding the initiation of the SEC’s enforcement action. The information released by the SEC indicates, among other things, revealed that the five SEC Commissioners had never authorized an enforcement action against the hedge funds, as they were required to do, according to the SEC’s own procedures, before an enforcement action is to be launched. Among multiple other improprieties exposed by the FOIA-obtained SEC’s documents, was that the enforcement action against Lauer (not the hedge funds) was incongruously authorized on the same day as the approval of the start of a formal investigation. This obviously is absurd, as SEC’s formal investigations, which may or may not lead to an eventual Commissioners’ authorization of an enforcement action (usually with multiple interim steps, such as the issuance of the Well’s Notice), customarily take many months, and in some cases, years.
To continue, after learning of the SEC’s enforcement action on July 11, 2003, Lauer immediately, denied any wrongdoing in his “Answer” to the complaint, and pleaded with the court for an Expedited Trial. Lauer insisted on an early trial, even though he understood that because of the asset freeze he may have to represent himself – pro se – at trial, without the benefit of legal counsel, against the combined forces of the U.S. government, as well as the court appointed (the SEC selected) adversarial receiver.
Another slight digression; the institution of “receiver” in this case has also been remarkably corrupt and inept. While ostensibly an impartial party, mandated as an extension of the court, the receiver here (in fact, a commercial litigator, with no hedge fund experience) had shown himself to be little more than an extension of the DOJ and SEC (thus also violating Constitutionally mandated Separation of Powers), endeavoring to justify the government’s action, and thereby also perpetuate its own parasitic existence, and the scandalously stratospheric legal bills – financed by the investors’ funds. In total, the receiver’s fees exceeded $80 million.
Revealingly, the SEC vigorously opposed any early trial dates demanded by Lauer, which is also inconsistent with what the Miami SEC lawyers had represented to the judge during the July 2003 ex parte hearing, namely, that the government had an open-and-shut case against, from the outset. If that were true, then presumably the SEC would have welcomed an early trial, particularly against the hapless pro se defendant. Instead, the SEC pleaded for an essentially open-ended continuance of the trial (which Lauer opposed), with the judge consistently obliging the government. While denying Lauer a trial, the judge also refused to modify the asset freeze against him and his family, in any practical manner. Thus, Lauer was left in a position that not only denied him access to all of his assets (after losing his business) to pay for legal and living expenses, but he was also denied an opportunity to within a reasonable period of time clear his name at trial.
In fact, the then presiding judge’s rulings were so overtly biased against Lauer, plainly intended to place him under unbearable duress, thereby bully him into a settlement with the government, that Lauer in May of 2004 filed a motion for the judge (William Zloch) to disqualify himself from further proceedings. In his meritorious motion to recuse the judge, Lauer cited judge’s blatant bias, as well as judge’s expressed prejudgment of the case (and other violations of Judicial Code of Conduct), in the SEC’s favor. All of the judge’s devastating rulings were executed before any evidence was presented in court, or even discovery completed!
Remarkably, while the judge did in fact disqualify himself shortly after Lauer’s motion to recuse, instead of submitting the case to a mandatory random reassignment to another judge, the departing judge, after making additional prejudicial rulings against Lauer, hand-picked the succeeding judge, who presided in an adjoining Ft. Lauderdale courtroom. Of course, skirting of the mandatory random judge-selection procedures, as was done here, was absolutely unlawful. Unsurprisingly, the new presiding judge adopted all the disqualified judge’s prior prejudicial rulings, without holding a single hearing on the merits. What followed in the SEC case, under the administration of the new presiding judge, is an unabashed “shock-and-awe” – type retributive judicial heavy-handedness, plainly intended to punish Lauer for effectively having the courage and intellectual honesty to accuse (in his motion to recuse) the judge of misconduct, as well as judge’s attempt to bludgeon Lauer into relinquishing his right to a trial, and thereby capitulate to the government.
To offer an example of the Florida judge’s unreasonable bullying, before holding a single hearing on the merits of the SEC case, the judge ordered Lauer to sell his home and condominiums (in Greenwich and Manhattan) in which his large family resided, and then the judge also imposed a freeze on the proceeds of the sales (even though none of these assets were related to any alleged wrongdoing, given that they were acquired long before the alleged misconduct). It was not clear where the judge expected Lauer and his family to live prior to the trial, or on what resources.
Thus, between approximately July of 2003 and February of 2008, Lauer was litigating, pro se, against the SEC, while refusing to entertain any settlement, short of the SEC’s admission of error in filing its rushed and baseless (and out of jurisdiction) complaint, as well as SEC’s comprehensive financial restitution for damages caused. Lauer was also forced by the court to litigate the SEC-selected receiver, who had filed four separate, although plainly duplicative lawsuits. It should also be noted that the receiver, who understood the coercive force of the asset freeze, had offered to “help” Lauer with obtaining relief from the asset freeze (in March of 2004), but only in exchange for his settlement of the cases, and what would have to be an untruthful, incriminating testimony against the presumed “deep pockets,” namely, the hedge funds’ prominent service providers, such as the Bank of America, PricewaterhouseCoopers, GGK-American Express, Citco, International Funds Services….etc. Understandably, Lauer rejected the receiver’s criminal attempt to suborn perjury (federal felony), as he had done with the government’s earlier attempts to entrap him. It should also be emphasized that all of the hedge funds’ service providers, as well as independent directors, had unvaryingly denied any wrongdoing related to the hedge funds’ activities, and, none of the independent auditors and/or administrators had either amended nor rescinded their past calculations of the Lancer Funds’ Net Asset Value (which the government had falsely alleged were somehow defective).
All considered, the five-year period between 2003 (the commencement of the Miami SEC’s action) and February of 2008, although clearly challenging, appeared practically a picnic in comparison to what the United States government had in store for Lauer and his family next.
In about the second week of February of 2008, while Lauer was visiting Kiev, Ukraine, he was informed by the Ukrainian federal security services (“SBU”) agents that FBI had contacted them, seeking some “compromising” information on him (there wasn’t any). Understandably concerned, Lauer promptly canceled his remaining (business development) travel plans in Europe and immediately flew back to New York. While going through the customs at the JFK airport, he was arrested (on Feb. 16, 2008) by an FBI team, on an arrest warrant originating from the Department of Justice branch in Miami.
What followed was a remarkable two-plus-month odyssey, through three federal detention centers around the country. The government-arranged journey, ostensibly intended for the U.S. Marshals to deliver Lauer for an arraignment hearing in Miami, instead took him for an approximately two-week stay at the Metropolitan Detention Center in Brooklyn, where Lauer befriended a number of his co-detainees, who were mostly the “Gambino” crime family crew members, apprehended in an FBI sweep, approximately a week earlier. Then, Lauer was flown on the fed’s “Con-Air” aircraft (purpose-reequipped, aging Boeing 727) for a two-week detention at the fed’s facility in Oklahoma (at the time, predominantly populated by Mexican drug-trafficking gangs, as well as several members from various Aryan Brotherhood affiliates). After that, another Con-Air flight, for an approximately one-month stay in the Miami’s detention center. The latter experience was particularly fascinating as the feds had arranged for Lauer to be assigned to the facility’s “C West” ward, which was internally known as “Charlie Worst.” The moniker was well-earned, as it housed the institution’s most challenging inmates, including the criminally insane. It is not clear why Lauer was assigned to what might have been viewed as a particularly menacing “Charlie Worst” ward, but it’s reasonable to assume that the prosecutors intended to soften Lauer’s resolve in regard to his apparently unwavering insistence on testing the government’s case at trial, rather than capitulating, via a plea deal. If so, the prosecutors’ scheme backfired, as the ill-treatment had precisely the opposite effect, and it only served to strengthen Lauer’s resolve to persevere.
Once Lauer was arrested and imprisoned, the prosecutors fought fervently to keep him incarcerated pre-trial, even resorting to outright falsehoods and evidence fabrication. For example, the prosecutors falsely represented to the judges that Lauer was a “flight risk,” principally because he had multiple, previously “undisclosed bank accounts in Poland,” which purportedly held “tens of millions of dollars.” This representation was utterly false, and no supporting evidence was ever presented, even though Lauer implored the government and receiver to provide any evidence. While the judges were made aware of the prosecutors’ falsehood regarding the alleged “foreign accounts,” the courts never sanctioned or even admonish the prosecutors for their willful fraud-on-the-court. And this, in spite of the fact that the government-concocted allegations deprived Lauer of three years of his pre-trial liberty (after being released on bond from the Miami’s detention center in April of 2008, he was held under house arrest in New York, until his trial in Miami in April of 2011). The court also did not sanction the prosecutors for various other egregious offenses, including, for example, the FBI agents’ unlawfully confiscating Lauer’s laptop computer after his arrest at JFK; or for FBI warrantless (thus unlawful) copying of the contents of his iPhone (there was nothing incriminating on either the laptop or the iPhone). The judges’ outright indifference to the prosecutors’ brazen misconduct was indefensible, particularly given that the magistrate had found earlier that an FBI agent who had testified in regard to the unauthorized search and seizure of Lauer’s iPhone, was untruthful, while under oath.
Shortly after having been arrested, Lauer attempted, via a motion to court, to obtain access to even a fraction of his court frozen personal assets (his net worth at the time was well into $nine-figures) to hire an attorney with experience in securities fraud cases to represent him at his upcoming criminal trial. Incredibly, the judge (from the SEC case, who was hand-picked by the judge who had recused earlier) refused to release any of his frozen funds, thereby, among other things, also obliterating Lauer’s Sixth Amendment rights (…right to an attorney of his choice). Consequently, Lauer went to trial, against the combined forces of the DOJ’s “Economic Crimes” strike force, further buttressed by the SEC, as well as dozens of the receiver’s lawyers, represented only by a local “public defender,” who had never tried a hedge fund securities case.
While Lauer awaited the criminal trial, the judge in the SEC proceeding, in September of 2008, without holding a single hearing on the underlying facts pertaining to SEC’s allegations, granted the SEC’s motion for summary judgment. Therefore, in what must be one of the most egregious examples of abdication of judicial functions, as a checking-and-balancing force against the executive branch, the judge – Kenneth Marra – quite literally, merely scanned a copy of the SEC’s summary judgment motion (MSJ), thereby also reproducing MSJ’s many typos, and without acknowledgment of any of the controverting and exonerating facts presented by Lauer in his response to the SEC’s MSJ, merely rechristened the SEC’s MSJ as his own “Opinion and Order.”
Although all of the objective legal experts who had reviewed the judge Marra’s conduct in the SEC case had found it to be inexcusably reprehensible, the unprincipled judge’s rubber-stamping of the SEC’s MSJ probably should not have been that surprising. This is so because, as noted earlier, a criminally indicted individual in the U.S. is nearly certain to capitulate and accept a plea deal offer from the prosecutors (with essentially the same probability as in Japan), as the existential risk of going to trial and losing (a life in prison, in this case) would have been deemed as unreasonably draconian. Judge Marra simply assumed that once Lauer would have accepted a plea deal, the SEC proceeding would be academic, as the civil-case liability would have attached automatically upon the criminal conviction.
It is because of this apparent assumed irrelevancy of the civil proceeding (in light of the expected criminal conviction) that judge Marra improperly imposed a disgorgement liability against Lauer, totaling approximately $40 million, a figure essentially invented by the Miami SEC, without any evidence. Still more absurdly, even though it was undisputed that Lauer had no access to his funds during the pendency of the case because of the blanket asset freeze, and that all the procedural delays were – as the court record verified – caused either by the plaintiffs or the judge, Lauer was also fraudulently slapped with $20 million prejudgment interest bill (this outrage would strain even Kafka’s and Orwell’s imagination). And if that were not enough, Marra also, in complete disregard to law, also denied Lauer a trial on the SEC-demanded penalty award, which during an earlier hearing, Marra (correctly) informed the partiers that the would have to go to a jury trial for adjudication. Suffice it to say, Marra yet again willfully denied Lauer’s demanded “penalty” trial, further debasing and dishonoring the federal judicial bench.
Even though Lauer was completely exonerated in the criminal case, he insists on bringing to light the litany of the government’s malfeasance displayed in that case. For example, Lauer had filed a Freedom of Information Act (FOIA) request with the Department of Justice, to review the documents related to the supposed grand jury (GJ) proceeding that led to his indictment in early 2008. The DOJ had refused earlier to provide the responsive documents voluntarily, its cynical claims to commitment to “transparency” notwithstanding. Lauer reasonably demanded to see the GJ documents because, given the record, there are multiple reasons to believe that there was a massive government grand jury misconduct. For example, it appears that it inexplicably took the Miami based prosecutors, at least four separate GJ’s, over a period of approximately five years, to secure an indictment. Suffice it to say, “grand jury shopping” is unlawful. Furthermore, the prosecutors were never able to present a GJ foreperson-signed copy of the purported indictment, at any time (and the GJ’s foreperson’s name of the alleged signature was redacted). This apparent non-existence of a signed indictment is very odd, and likely unprecedented, given that, even as per prosecutors’ own representations during one of the court hearings on this matter, there should have been at least three signed copies on record. Certainly, the U.S. Attorney branch in Miami should have had one, with the other signed copies held on record by the DOJ’s central office in Washington D.C., and still another copy with the court in Miami, where the trial took place. Yet, inexplicably, none of these parties were in possession of even a single copy of a signed indictment. Further aggravating the grand jury irregularity was the fact that the local Miami prosecutor was unable to present (either for a hearing or at trial) a witness(es) who had presumably testified during the purported GJ proceeding, which then presumably would have led to the February 2008 indictment. The prosecutors did not even present the presumed GJ’s foreperson to confirm that the 2008 GJ proceeding even took place. Interestingly, the final GJ, the one that purportedly indicted, supposedly took place just days before, even by the prosecutors’ own self-serving calculations, the 5-year statute of limitation would have barred any legal action. Thus, there was very real urgency for the prosecutors to concoct an indictment, and hence a motive to take another unlawful shortcut.
To present another example of DoJ’s unchecked Stalinist/Gestapo like tactic in this case, consider what the Miami prosecutors did to its “star witness” – Bruce Cowen – (Cowen was an independent consultant, who lived and worked in California) who was coerced to fabricate inculpating testimony against Lauer. Yet at trial, Cowen was unable to cite even a single illegal act that he might have witnessed, and tellingly no evidence of any unlawful trades were presented by the prosecutors to refresh Cowen’s recollection. But more revealingly, in a court hearing before the trial, Cowen testified under oath as to why he pleaded guilty in his own case (indicted in 2002), as summarized by the then presiding judge (Jordan) in the criminal case: Case: 1:08-cr-20071-AJ Document #: 647 Entered on FLSD Docket: 06109/2010)
“At the evidentiary hearing, Mr. Cowen testified that he had believed that he was innocent ….. and intended on fighting the charges against him. He also explained that he had pled guilty because the government took a “sucker punch” at him by threatening to prosecute his wife, Kathryn, who in his opinion had not done anything wrong……. As Mr. Cowen recalls, the prosecutors told him ……. that if he did not plead guilty he and his wife would not see their young son for 20 years. “The government’s threats, said Mr. Cowen, were the ‘driving force’ behind his plea.”
The fact that the prosecutors had engaged in such barbarically coercive conduct, which to most Americans may be mostly familiar from Alexander Solzhenitsyn’s writings about the Stalinist era, is abhorrent, and obviously illegal. Yet the fact that the judge did not even sanction the prosecutors for their terrorist tactics, and instead permitted the witness to testify on the government’s behalf, is beyond unconscionable. Clearly, the federal judiciary increasingly acts as little more than prosecutors’ handmaidens, while the public and the Fourth Estate remain largely indifferent or uninformed. By abdicating their constitutionally-mandated roles of restraining the overreaching executive branch, the increasingly acquiescent judiciary is instead emboldening the prosecutors, thereby indirectly aiding and abetting in the prosecutorial predation.
One final thought. It should not be ignored that when the government’s law enforcement bureaucrats choose to divert limited public resources from investigating and prosecuting actual crimes, in favor of the self-fabricated, conviction stats-boosting entrapment schemes, as the Miami-based DOJ office does routinely, the general public, and not just the specifically-targeted citizen is aggrieved. For example, at the very time the Miami DOJ branch diverted the taxpayers’ resources to the “Bermuda Short” entrapment scheme discussed above, the southern district of Florida was metastasizing into the America’s epicenter for healthcare and mortgage fraud (in words of The Miami Herald journalist – Carl Hiaasen: Miami is the “sleazebag capital of America” – July 18, 2010). It’s also where Bernard Madoff was perpetrating substantial parts of his colossal fraud and where Alan Stanford schemed $billions from the unsuspecting public (apparently with the Miami SEC’s knowledge and blessings!), with hundreds of his reps operating out of Miami office, short walking distance from the Miami DOJ/SEC own quarters. In fact, at the very same time the Miami DOJ/FBI tag-team was attempting to unsuccessfully to entrap Lauer in New York, the perpetrators of the greatest crime against America, the three of the 9/11 hijacker-pilots, Mohamed Atta, Marwan al-Shehhi and Ziad Jarrah, were attending, unobstructed, their simulator-based flight-training lessons in southern Florida. The inept Miami-based authorities (including FBI), provided the terrorists with all the necessary credentials for legal residency.
But the “Road to Tyranny” does not no begin nor end with the rogue government elements in Florida. The entire nation should be on guard, as we’re all in peril. It is increasingly the norm for the courts, and the media in general, to deny citizens the presumption of innocence, as they rush judgment, condemnation and punishment, before any semblance of judicial due process takes place. James Madison and Alexander Hamilton would have been horrified.
To quote the great jurist, Louis D. Brandeis: “Our government… teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.”
What is to be Done
There’s a clear and present existential danger to the public, emanating from the government. Many of the malign actors in Lauer’s prosecution, from both the Executive and Judicial branches remain in their jobs, and likely continue to victimize other Americans. They need to be exposed and confronted, if only to contain current and deter further malfeasance.
But there’s no need for new laws, just sincere and scrupulous adherence to the existing ones. Since, as the empirical evidence convinces, the overambitious members the Executive Branch will follow the law only when it serves their purpose, the judiciary has to step up and start performing the functions intended for them by the Framers.
Unlike the OIG’s vigorous actions in the Trump investigation, when Lauer delivered his well-documented complaint and affidavit to the SEC’s Office of Inspector General over a decade ago, demanding an investigation, all he received was a cryptic confirmation of its receipt, but no follow up action. It is not acceptable that the OIG hops only when the underlying matters pertain to a sitting president of the United States.
I’m in agreement with Justice Louis D. Brandeis, who said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” I too believe we need more exposure and transparency of what the federal agencies, including the courts, are actually doing. To that end, I was very impressed and moved by the multiple-award winning film “Spotlight” several years ago. The picture depicts a true story of how persistent Boston Globe journalists exposed the naked horridness of child abuse, as perpetrated by a shockingly large number of perverts, clad in black robes. To the vulnerable faithful, the symbolism of those robes represented an honorable and trustworthy Catholic institution, but in reality that safe-harbor icon served only to bamboozle and ensnare thousands of children into the clutches of the most hideous of men.
We must likewise expose the corrupt, incompetent and evil black-robed judges, because of their extraordinary power, and a concurrent minimal oversight. In the Lauer’s case, the judges made mockery of the Judicial Code of Conduct, yet there is no realistic recourse to their misconduct, other than perhaps the “spotlight” of the political pressure brought about by the outraged public opinion. Here, the offices and efforts of the FPC brethren will endeavor to play a role, to the ultimate benefit of all America loving and law abiding citizens.