Profiting from the NFT Revolution: A Comprehensive Guide to Investors


As an experienced NFT investor, I have seen the explosive growth of non-fungible tokens (NFTs) over the past 5-10 years. NFTs have evolved from a niche concept to a mainstream asset class, attracting significant attention across various industries. The launch of CryptoKitties in 2017 sparked widespread interest in NFTs and media coverage. This blockchain-based game allowed users to collect, breed, and trade unique digital cats, leading to the development of NFT marketplaces like OpenSea, Rarible, and SuperRare. 

In 2021, NFTs experienced a massive surge in popularity, with high-profile sales such as Beeple’s $69 million digital artwork and Jack Dorsey’s $2.9 million tweet capturing global attention. The booming market attracted celebrities, athletes, and major brands, driving up media coverage and interest. NFTs’ use expanded beyond digital art and collectibles to virtual real estate, gaming, decentralized finance (DeFi), and more. Overall, the growth, use, and media coverage of NFTs have followed an upward trajectory, culminating in mainstream adoption and widespread interest in recent years. 

With increasing public interest and media coverage, investors are beginning to take notice of this new asset class. However, many of these investors have limited knowledge of NFTs, and even fewer have experience investing in them. This blog aims to provide a comprehensive overview of NFTs, exploring their potential as an investment opportunity and discussing how to monetize and achieve high returns on investment (ROI) within 2-3 years. 

Background and General Understanding of NFTs

NFTs are unique digital assets that represent ownership of a specific item, such as artwork, virtual real estate, or collectibles. Unlike cryptocurrencies like Bitcoin and Ethereum, which are fungible and interchangeable, NFTs are non-fungible, meaning each token has unique characteristics that set it apart from others. This makes them particularly suitable for representing ownership of rare or limited-edition digital assets (1). Fungible assets are items that can be easily exchanged for one another because they are identical in value. For example, a dollar bill is fungible because you can trade it for another dollar bill without losing any value. On the other hand, non-fungible assets are unique and cannot be simply exchanged for something else. For instance, a one-of-a-kind 1952 Mickey Mantle baseball card (Topps; #311) which sold for $12.6 million in August 2022, cannot be swapped for another Mickey Mantle 1951 Bowman Gum Company baseball card that sold for $750,000 without considering the individual value of each card. 

NFTs are primarily bought, sold, and traded on blockchain platforms such as Ethereum, which provide a decentralized and secure system for recording transactions and verifying ownership. This technology has enabled the creation of various NFT marketplaces, such as OpenSea, Rarible, and SuperRare, where users can buy, sell, and trade NFTs (2). 

The potential for high ROI in the NFT market is underscored by its similarity to Bitcoin, particularly in terms of its growth trajectory and the opportunities that arise from an immature market. Both Bitcoin and NFTs have demonstrated their capacity for substantial appreciation, attracting investors seeking lucrative returns. 

In the early stages of Bitcoin’s development, astute and involved investors who recognized the potential of this novel digital asset were able to reap substantial rewards. Investors who recognized the potential of Bitcoin in its early stages were able to reap substantial rewards. For example, if you had invested $100 in Bitcoin in 2010, that investment was worth over $100 million in 2021. Similarly, the NFT market is still relatively nascent, presenting numerous untapped opportunities with significant upside potential. For discerning investors who actively engage with the NFT ecosystem, this immature market offers a chance to capitalize on undervalued assets that should appreciate over time. 

The rapid expansion of the NFT market, driven by growing demand for unique digital assets, increased market adoption, and the inherent scarcity of certain NFTs, has resulted in considerable appreciation of select tokens. Just as Bitcoin’s value has soared due to its limited supply and rising demand, the uniqueness and rarity of NFTs can drive their value upward, generating high returns for investors. 

Moreover, speculative investing and hype have played a role in the appreciation of both Bitcoin and NFTs, as market sentiment and public perception can significantly influence asset prices. Astute investors who can identify market trends and capitalize on emerging opportunities have the opportunity to benefit from this dynamic. 

However, it’s crucial for investors to exercise caution and conduct thorough research, as the appreciation potential of individual NFTs can vary significantly based on factors such as rarity, utility, community support, and market trends. By staying actively involved and employing a strategic approach, investors can leverage the similarities between Bitcoin and NFTs to optimize their ROI in this exciting and rapidly evolving digital asset space. 

Solving the Problem of Investing in an Unfamiliar Area

For investors, the unfamiliarity of NFTs can be both intimidating and discouraging. However, this lack of widespread understanding presents an opportunity for savvy investors willing to dedicate time and resources to learning about this emerging asset class. By staying informed and actively engaging with the NFT community, investors can gain valuable insights into market trends, identify undervalued assets, and potentially capitalize on the growing interest in NFTs. 

There are several reputable sources available for learning about NFTs, including major NFT organizations like the Blockchain Game Alliance (3), (4), and (5), as well as expert sources like Andreessen Horowitz’s blog (6), and the works of Tim Kang, a renowned NFT investor and educator (7). By regularly engaging with these sources, investors can stay ahead of the curve and make informed investment decisions. 

Finding Opportunities for Investment

NFT investments can be broadly categorized into two main types: collectibles and utility tokens. Collectibles, such as digital artwork and virtual trading cards, derive their value from scarcity and demand, while utility tokens, like virtual real estate and in-game assets, have inherent value due to their functionality within a digital ecosystem. 

To identify promising NFT investments, investors should look for assets that exhibit one or more of the following characteristics: 

  • Rarity: NFTs with a limited supply or unique attributes can command higher prices due to scarcity. 
  • Provenance: NFTs with a clear and verifiable history of ownership, especially those associated with well-known creators or brands, tend to be more valuable. 
  • Utility: NFTs that provide tangible benefits, such as access to exclusive content or membership in a virtual community, can attract greater demand and higher prices. 

By conducting thorough research and evaluating potential investments based on these criteria, investors can increase their chances of finding high-potential NFTs. 

Monetizing NFT Investments and Achieving High ROI

The primary means of monetizing NFT investments is through buying and selling tokens on NFT marketplaces. As demand for NFTs grows, investors may be able to sell their assets at a profit, achieving a high ROI. Additionally, some NFTs offer alternative revenue streams, such as royalties or staking rewards. 

For instance, certain NFT platforms allow creators and initial investors to receive a percentage of resale profits each time their artwork is sold to a new owner. This royalty system enables passive income generation over time. In some cases, NFTs can also be staked to earn rewards or participate in decentralized finance (DeFi) platforms, creating further opportunities for monetization. Staking tokens refers to the act of holding and locking up a certain amount of cryptocurrency tokens to participate in a proof-of-stake (PoS) blockchain network. In a PoS blockchain network, staking allows users to validate transactions and create new blocks on the blockchain, similar to mining in proof-of-work (PoW) blockchain networks. When a user stakes their tokens, they are essentially depositing them into a staking contract and agreeing to hold them for a specific amount of time. In exchange for staking their tokens, users can earn rewards in the form of additional tokens for validating transactions on the blockchain. The amount of rewards a user can earn is proportional to the number of tokens they have staked. 

To optimize ROI on NFT investments and create a cohesive investment strategy, investors can consider targeting undervalued assets by conducting thorough research and identifying NFTs with strong growth potential. This approach allows investors to buy low and sell high, maximizing profits. 

Another strategy is holding NFTs for long-term appreciation. Some NFTs may appreciate in value over time, especially those with a strong community or utility. Holding these assets for the long term can lead to higher returns. 

Additionally, engaging with the NFT community can provide valuable insights and opportunities. Active participation in the community can grant early access to new projects, collaborations, or partnerships that can enhance the value of an NFT investment. 

By combining these strategies, investors can increase their chances of monetizing NFT investments and achieving high ROI in the dynamic and evolving NFT market. 

NFTs can generate passive income through mechanisms like royalties or revenue sharing. For example, certain NFT platforms allow creators to receive a percentage of resale profits each time their artwork is sold to a new owner (8). 

To maximize ROI within 2-3 years, investors should consider employing the following strategies: 

  • Diversification: By investing in a diverse range of NFTs across different categories and industries, investors can mitigate risk and increase their chances of capitalizing on emerging trends. 
  • Active Management: Keeping a close eye on market trends and adjusting one’s portfolio accordingly can help investors stay ahead of the curve and capture opportunities as they arise. 
  • Networking: Engaging with the NFT community, attending conferences, and participating in online forums can help investors gain valuable insights, discover new opportunities, and potentially establish connections with creators and other investors. 

Conclusion: Strengths, Weaknesses, Opportunities, and Threats of NFT Investments

As the NFT market continues to evolve, it’s essential for financial executives to be aware of the strengths, weaknesses, opportunities, and threats associated with investing in this asset class. 


  • Unique assets with potential for high returns 
  • Growing public interest and market size 
  • Opportunities for diversification and passive income 


  • Relatively new and unregulated market 
  • Potential for volatility and market fluctuations 
  • Steep learning curve for inexperienced investors 


  • Early involvement in an emerging asset class 
  • Ability to capitalize on technological advancements and trends 
  • Access to a global, decentralized marketplace 


  • Possible saturation of the market and diminishing returns 
  • Regulatory changes and potential legal issues 
  • Risks associated with digital asset security and fraud 

By staying informed, conducting thorough research, and leveraging the knowledge of reputable sources and expert advice, financial executives can navigate the NFT investment landscape and potentially achieve significant returns on their investments. 

In conclusion, non-fungible tokens (NFTs) represent a revolutionary new asset class with significant growth potential in the emerging digital economy. As an innovative form of digital ownership, NFTs have disrupted traditional investment paradigms, paving the way for a wide array of applications, including digital art, gaming, virtual real estate, and decentralized finance (DeFi). 

The rapid expansion of the NFT market has captured the attention of investors worldwide, with high-profile sales and celebrity endorsements fueling the momentum. This burgeoning interest and the continuous development of NFT technology present unparalleled opportunities for investors seeking to capitalize on this novel asset class. 

However, as with any investment, NFTs also come with risks that investors must be aware of and prepared to mitigate. To lower these risks and maximize returns, investors should approach NFT investments with astuteness and caution. This involves conducting comprehensive research, identifying undervalued assets, and diversifying one’s portfolio to spread the risk across various categories and industries. 

Moreover, engaging with the NFT community and staying up to date with market trends is essential for making informed decisions and uncovering valuable opportunities. By adopting a proactive and strategic approach, investors can navigate the complex and ever-evolving NFT landscape while minimizing their exposure to potential pitfalls. 

In summary, NFTs offer a unique and compelling investment opportunity that has the potential to transform the global economy and redefine digital ownership. Investors who can recognize and capitalize on this potential, while exercising prudence and adaptability, will be well-positioned to reap the rewards of this dynamic and exciting new frontier in the world of investments. 

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From Crisis to Opportunity: Transforming America’s Economy for the 21st Century


As Erich Fromm wrote, “Man is the only animal for whom his own existence is a problem which he has to solve.” 

Today, we face new and complex challenges that demand our attention and action. As entrepreneurial and concerned citizens, it is our responsibility to ask ourselves the tough questions – what kind of nation do we aspire to live in, work in, and raise our families in? What kind of America do we believe in?

We are a nation founded on the principles of innovation, hard work, and determination. Our entrepreneurial spirit is at the core of what makes America great. However, our government has been mired in political polarization, leaving the business of America behind. It is time for each of us to take a stand and make sure our country is not destroyed by apathy and inaction. Each of us must take an active role in the political realm if we want to restore our nation to its former glory.

We are at a crossroads in our nation’s history. The stakes are high, and the consequences of inaction are dire. In this series of thought-provoking blogs, I will be shedding light on the pressing issues that America is facing and offering solutions that will help us thrive in these turbulent times.

One of the most pressing issues in today’s world is America’s healthcare system. Despite having one of the highest per capita health care expenditures in the world, the US ranks 37th worldwide in the World Health Organization evaluation and last in Commonwealth Fund reports in terms of healthcare quality when compared to 11 other developed countries. 

As Americans, it is our duty to ensure that our healthcare system is effective and efficient, providing access to quality care for all. Unfortunately, our current system is failing us, with skyrocketing costs and limited access to care. It is time for a bold, capitalistic approach to solve this critical issue.

Empowering medical professionals to practice their professions without government interference is a start to improving patient-centered care. Physicians should be able to order tests and treatments without the need to meet certain criteria ordained by patients insurance companies. They should also be allowed to have open conversations with patients without the fear of being judged or punished. By finding this balance, we can improve patient outcomes and ensure that patients receive the best possible care.

Additionally, our healthcare system should encourage investment in artificial intelligence and machine learning, providing tax incentives to encourage innovation and improvement in the healthcare industry. To further promote investment in the healthcare industry, our government should offer tax incentives for hedge funds, family offices, high net worth individuals, and crowdfunding to invest in healthcare, as this will create new jobs and help drive up the GDP contribution of healthcare, which currently accounts for 17.9% of the US economy.

For example, AI and machine learning can be implemented to improve patient diagnosis and treatment plans, as well as help manage administrative tasks like appointment scheduling, billing, and even doctor-patient communication. This can lead to improved patient outcomes, increased efficiency, and lower costs. Additionally, investing in health data research through AI could help us better understand the causes and impacts of disease and predict and prevent disease outbreaks, providing us with valuable insights into the health of our population.

Implementing a national health insurance program is another initiative that can reduce costs and increase access to care, as evidenced by the success of such programs in other countries such as Canada and the UK. This program should provide comprehensive coverage without limiting choices or reducing quality of care and should be designed to be portable across state lines. To ensure competition and drive down costs, this program should be implemented by private, entrepreneurial insurance companies, doctor-run conglomerates, union, and community health co-ops. 

The government should also offer tax incentives to foster the growth and development of these organizations, such as providing tax breaks for small businesses offering insurance or offering credits for individuals and families who purchase health insurance. Additionally, we can reduce costs by implementing price transparency, allowing Medicare to negotiate prescription drug prices, and incentivizing value-based payments for healthcare providers to focus on providing quality care rather than quantity of services. This can be done by rewarding providers for achieving specific quality metrics, such as reducing readmission rates or increasing patient satisfaction. This shift away from fee-for-service models can help reduce costs while also improving patient outcomes.

Telemedicine is another key solution that can provide access to care in rural and underserved areas, providing patients with a sense of security and convenience as well as providing care to homebound or time constrained individuals in urban and suburban areas. By utilizing technology, patients can receive care from the comfort of their own homes, reducing travel costs, missed workdays, and unnecessary emergency room visits. 

Additionally, we must incentivize preventative care, invest in primary care, and improve coordination of care to ensure that patients receive the right care at the right time. This will help reduce costs by avoiding unnecessary treatments and tests, while also improving the patient experience by providing timely and appropriate care. Telemedicine will help reduce wait times, eliminating the need for patients to wait days or weeks to receive care. To ensure access in areas with limited internet connectivity, telemedicine can also be provided through mobile apps, online or telephone consultations. Improving access to care in rural and underserved areas will help reduce health disparities in those communities.

The use of new technologies such as virtual reality (VR), open AI, quantum computing, and wearable devices like pulse meters, medical watches, biofeedback devices, heart monitors, athletic monitors, etc., will allow doctors to inexpensively monitor patients from remote locations. Open AI can be used to analyze large amounts of medical data, which can improve patient outcomes and help doctors make better-informed decisions. Wearable devices like medical watches and heart monitors can track patients’ vital signs in real-time and alert doctors to potential problems.

Investors can also get involved in developing new technologies that allow patients to receive care at home. For example, telehealth companies like Teladoc and Doctor on Demand offer virtual consultations with doctors, while companies like Livongo and Omada Health offer digital coaching and monitoring for chronic conditions like diabetes and hypertension.

Another example is the company Biofourmis, which uses wearable devices and AI to monitor patients with chronic conditions, alerting doctors to potential problems before they become serious. By investing in these and other innovative technologies, we can improve access to care in rural and underserved areas, reduce costs, and improve patient outcomes.

As a patriotic American, it is important to consider the monetization opportunities for investors in addition to those listed above in this blog. Companies like CVS Health Corporation, Optum, and Humana are leading the charge in developing new technologies and implementing value-based payments, providing opportunities for growth and innovation. Athenahealth and Cerner are also providing technology solutions that enable better coordination of care and improved price transparency, creating a more efficient and effective healthcare system.

In conclusion, the US healthcare system is in dire need of an overhaul. It is expensive, complex, and inefficient, with costs rising faster than inflation and access to quality care becoming increasingly difficult to obtain. Furthermore, government regulations have led to a lack of patient-centered care and physician autonomy, leaving our healthcare system in disarray. A patriotic, capitalistic approach is necessary to address these issues.


Step Up Your Game, Increase Your Profit and Knock it Out of the Ball Park.


As an experienced veteran in the vocational for-profit higher education marketplace, I have worked with over 250 Vocational universities, colleges and schools in a marketing capacity as well as owning my own schools so I see both sides of the coin. I would like to share my experiences on how to step up your game, grow your gross revenue, increase EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins, and plan an exit strategy to cash in on your efforts. 

Let us start with the problem. Most owners whom I have met in my career have been individuals who had an entrepreneurial spirit and the desire to change the lives of their students and their communities. They were most often embraced at the beginning of their careers by an old-timer in the business who taught them the tricks of the trade of for-profit education during their tenure working as a subordinate. They learned from seasoned veterans who had boots on the ground, hands on experience and knowledge about the ins and outs of every department in their vocational institutions. 

These aspiring entrepreneurs reached a point in their career where they decided to strike out on their own and either buy their mentors school, as they were retiring, or start one of their own. Rarely did any these budding new owners have a understanding of what it meant to own and operate an institution of higher learning. Until that point in their careers, they never had “skin in the game” and did not know what it meant to put their house up and take a second mortgage so that they could pay their employees’ salaries and sustain their school during tough times. In the context of owning and operating a business, having skin in the game means putting one’s own money on the line, which can be a significant motivator to ensure the success and profitability of the business. This is a very important lesson to learn and it changes the way that people do business once they have this understanding. 

The beginning is always rough on the newly minted and these new owners were tried in the crucible of government regulation, Title IV funding, National or Regional (if they were fortunate) accreditor oversight, cash flow issues, employing marketing skills to achieve student growth, student retention, default rates, 90/10, composite scores and a host of other issues. As the years went on these owners developed their own teams, brought in new students, and they saw their schools grow. This was accomplished by blood, sweat and tears where the school became the central focus of these entrepreneurial owners lives. For new owners either you are all in or you are out and there is no middle ground that will lead to success. 

In many cases as the knowledge-base increased so did the revenue and the EBITDA. For those who were unable to surf the daily issues of vocational education they closed their schools and faded into the distant horizon. In almost all cases the owners depended on Title IV programs to stay alive and rarely considered other options for generating revenue. As the years passed the owners became legends in their own mind, resisted adding new people to their teams who would challenge them and kept the old cadre of employees who were their yes-men. The result was that revenue and EBITDA flat lined; no new programs were added and owners basked in their wealth believing that the $500,000 to $4 million they earned annually was a windfall brought about by their wisdom and there was no way that they could increase revenue without moving outside of their area of comfort to look at new programs and employees to step up their game. 

Please understand that there is nothing wrong with a gross income of $500,000 to $4 million annually as only about 1.4% of US households have an income of $500,000 or more, and only about 0.002% of households have an income of $4 million or more. The owners were revered by their vendors, employees, students and community. Owners became ego driven, adverse to new ideas, risk adverse and lazy, cutting back their work week from 80 to 40 hour weeks so that they could play golf or spend more time with their families. The growth of a business never occurs when an owner becomes myopic in their outlook and refuses to accept that there is a more effective approach to run a business. 

The most important factor in growing any business is to keep an open but focused mind, have an exceptional team and associate with other owners and consultants who have successfully broken through the frozen EBITDA and revenue barriers and have grown their schools through branching, new program introduction, vocational ESL programs, U.S. Department of Education career pathways programs, reignited marketing for student acquisition, increase articulation agreements, technological innovation to improve student outcomes, hard-core admissions evaluations and creating a culture that is conducive to increasingly positive outcomes of students. These will be discussed in greater detail in future blogs. 

Let us start at ground zero. The goal of a for-profit vocational school is to provide students with the training and education they need to get a good job in order to be successful in their chosen careers, while also generating revenue for the school’s owners and his stakeholders. To achieve this goal, schools typically charge tuition and fees, and may also offer financial aid options such as student loans or scholarships. Let’s be clear about this, just about every school from Harvard to Henry’s welding school receive Title IV funds since most students entering a higher education environment especially vocational school students come from lower socioeconomic backgrounds and do not have the wherewithal to pay the full fair themselves. Students receive financial aid from the federal government which they need to start repaying when they graduate and are gainfully employed. Most owners try to keep the price that they charge to students close to the amount that student receives from financial aid believing that a student who does not have the resources will not attend their school if the out-of-pocket ticket price is too high, so the owner settles for tuition cost which is competitive and inclusive. 

This is a big mistake brought about by a fundamental misunderstanding of the marketplace and what their students are willing to pay if the outcomes warrant they do so. If owners were more selective in the students that they accepted into their schools and to the programs that returned a much higher salary level for students upon graduation then the EBITDA, revenue and margins of return for the school would grow exponentially. Let’s be clear on this, most for profit vocational schools will accept a student regardless of a student’s motivation, maturity, level of literacy and math skills as long as they meet the admissions criterion. This strategy courts a never-ending downward spiral to disaster and needs to be reevaluated by each and every school. 

The strategy is motivated by the desire to succeed which can be translated into one word…Avarice, an excessive desire for wealth, possessions, or power beyond what is needed to live a comfortable life with a student centricity culture thrown out the door. Many for-profit school owners are driven by the pursuit of material wealth and often place their own interests above those of their students and staff. Don’t get me wrong there are also many school owners who care deeply about their students and employees. In some cases, some individual owners may engage in unethical or illegal activities to satisfy their desire for wealth or power, leading to harm to others or society as a whole. Closed schools such as ITT Technical Institute, Corinthian Colleges; Charlotte School of Law and Westwood College are names that will live in infamy for defrauding some students for their profit and are a testament to greed. 

To be very clear, students are customers, clear and simple, and need to be treated that way if a school is to succeed. Students need to be nurtured, upgraded, mentored, remediated, supportive, followed up on, encouraged, made interactive with faculty, staff and ownership, and most of all LOVED. Being student-centric means that a school or educational institution places the needs and interests of its students at the center of its decision-making and operations. This approach prioritizes the individual needs of each student and tailors the learning experience to meet those needs. A student-centric approach to vocational education recognizes that each student is unique, with their own strengths, weaknesses, interests, and learning styles. It involves providing personalized support and guidance to students to help them achieve their academic and personal goals. 

All students must be treated with the utmost respect regardless of their level of attainment at the time they enter the school. Educators at any vocational school must go down to the level of the student to communicate with them and then bring that student in increments up to the level of the teacher. That is the sign of a good school and a good teacher. There are no bad students, but there are bad teachers and schools. 

In a student-centric environment, the curriculum, teaching methods, and support services are designed to be responsive to the needs of the students. To make discriminative wealth in the school business requires that the customer be treated with utmost respect and dignity. This means that the school is constantly seeking feedback from students and making adjustments to ensure that the learning experience is engaging, relevant, and effective. Overall, a student-centric approach to education is focused on creating a supportive and inclusive environment where each student feels valued, supported, and empowered to achieve their full potential. 

A for-profit vocational school is similar to other service businesses in that it relies on providing high-quality services to attract and retain customers, in this case, students. The quality of service provided by a for-profit vocational school can have a significant impact on its reputation, as well as on its ability to attract new students and retain existing ones. Parenthetically, a good reputation can add $10 million to the sale price of a vocational school. Therefore, it is important that the school creates a positive and supportive learning environment that fosters student success. This can be achieved through a range of actions, such as providing personalized support and guidance, being responsive to student feedback, offering a range of support services, and creating a positive and inclusive learning environment. Ultimately, students are more likely to feel satisfied with their experience at a for-profit vocational school if they feel that the school cares about them and is committed to their success. This can lead to increased retention rates, positive word-of-mouth recommendations, and an overall better reputation for the school. 

Schools need to treat students as customers and to be selective in the students they accept into their schools and programs. Saying no and being selective of students that are accepted is essential to growth and profitability. When a school reaches an inflexion point where their reputation, programs offered, job placement at high salaries, and employer involvement in externships are solidified they can raise tuition by 100% to 150% and still have a waiting list of students who want to attend the school. This increases the gross revenue of a school dramatically with EBITDA margins increasing by 100+%. Profit in vocational higher education is all about student centricity and I will continue this blog as it is the 1st of a 6-part series in the Step Up Your Game, Increase Your Profit and Knock It Out of The Ball Park series of blogs. 

In summary, to be successful in the for-profit vocational school business, owners need to understand the challenges and opportunities, be open to new ideas and approaches, and prioritize student-centricity to create a positive and supportive learning environment that fosters student success which increases Revenue, EBITDA, and R.O.I. (Return On Investment). 


Financial Independence and Wealth Generation Starts with Due Diligence


 If you want to find a real prince you need to kiss a lot of frogs! The problem that most wanna-be entrepreneurs experience is that they have to go through a lot of failures and disappointments before they find what they are looking for, but finding something valuable always requires persistence, patience, and the willingness to learn from your mistakes and they don’t have the balls, brains or guts to achieve the success that they aspire to achieve. 

An entrepreneur needs to take risks and make mistakes along the way, and failure is a necessary part of the journey on the road to success for anyone hell bent on victory. My advice to would be dreamers is Never, Never ever surrender your reverie of finding a pot of gold at the end of the rainbow, no matter how difficult the path may seem, believe in yourself, work hard and smart and never be afraid to fall flat on your face, for it is only through the gate of failure that you discover, mature and achieve the greatest triumphs. 

I have spent decades involved in the higher for- profit vocational education sector and I want to share with you the foundation of finding, evaluating, buying, fixing and building for profit vocational schools and then exercising an exit strategy after 3-5 years with 30-40 times returns on your leveraged investment. Starting with a $1 million investment and with 8-times leverage your ROI will be $240 to $320 million in 3-5 years if you play your cards right. I do not know anywhere else that these returns are possible and the best part is that it is accomplished with infinite attention to compliance, student centricity, staff harmony and a professional team that serves students no matter what their level of academic performance was when they started at a vocational school of higher education. 

The best chance for success in the higher education sector necessitates that you have a minimum of 5-10 years boots on the ground experience and can assemble a AAA class team to work with you. The game starts with your “skin in the game” so be prepared to have 10% of the purchase price in the bank before you deal yourself in to being an entrepreneur in the higher education sector. 

Every investor that you approach will want to see your Benjamin’s and access the strength of your team! The project vocational institution that you want to acquire is important, but the most carefully thought-out plans can fail due to unforeseen circumstances or events beyond our control and an investor, your investor wants to minimize his risk and increase his ROI, so your team needs to be flexible and adaptable in the face of change. 

During your working career it is important for you to network with smart and contrarian people that you can learn from and I cannot think of a better organization for you to bond with than the Financial Policy Council ( Here you will meet entrepreneurial men and women who have made it or are making it now and they can help guide you when you have problems and introduce you to investors for your project. 

You have the skin in the game, the team, and advisors so it is time for you to select your target acquisition. Higher Education Vocational education is a small vertical market. In 2019-2020 there were approximately 900 for-profit vocational schools in the United States. If you have spent your networking years well you should know at least one hundred people in the industry that can advise you if a school they now work at of have friends working at may be for sale. Listen to them closely and research the schools that they have provided to you. It is also in your best interest to purchase an entity that is not currently on the market for sale. You will establish the market where one did not exist by your interactions and reputation. This will lead to a shorter time to complete an acquisition, cut out the brokers, advisers and banks and increase your student outcomes, their retention rates, student and employee satisfaction, impact on society as a whole and your exit ROI. I have also found that owners who have not put their vocational schools up for sale are usually more involved, better operators with less to hide in the due diligence process. 

In future blogs I will explain how to target a school, meet its owner, and establish a rapport, estimate a purchase price and an enterprise value and start the process of negotiation to purchase the entity. While my directives are targeted for vocational for-profit institutions of higher learning, the principles are basically the same for whatever silo your acquisition falls into. 

I am jumping ahead to the guts of this blog which is a synopsis of the due diligence process which every acquisition requires. Every prince or princess has pimples so don’t fall in love with your acquisition/seller and maintain a composed and rational demeanor, not putting too much trust or faith in what you are told by a seller. “Accept but Verify” to strike a balance between being too skeptical and too trusting. Being overly skeptical and suspicious can lead to missed opportunities, misunderstandings, and strained relationships. On the other hand, being too trusting and gullible will lead to being taken advantage of, making poor decisions and have a direct relationship to your exit strategy. 

Due diligence is an essential process for anyone considering investing in or partnering with a for-profit vocational higher education institution. It involves a comprehensive review of the institution’s financial, academic, and operational performance to identify any potential risks, red flags, or areas of concern. 

The due diligence process helps to identify potential risks associated with buying, investing in or partnering with a higher for-profit education institution. I use a list of 150+ touch points in my due diligence process which covers the essential information that I need to understand the institutions culture, potential for growth, the path to an exit strategy and the anticipated ROI. (I will cover these touch points in future blogs.) 

The extensive due diligence process that I employ identifies financial threats, regulatory perils, legal threats, and reputational hazards to name just a few of the touch points on my list. It is the sine qua non imperative to evaluate the financial performance of an institution, including its revenue, profitability, and cash flow. This provides insight into the institution’s financial health and its ability to generate returns on investment. 

The due diligence process also evaluates the quality of academic programs offered by the institution. This includes reviewing the institution’s accreditation status, faculty qualifications, student outcomes, and other relevant factors. Parenthetically, it is most important to evaluate the competitive landscape of the institution, including the strength of its brand, reputation, and market position. 

Last but not in any way least is the evaluation of an institution’s compliance with regulatory requirements, legal obligations, and ethical standards. 

Compliance is extremely important in the for-profit education sector, as it is in any industry that is heavily regulated. For-profit education institutions must adhere to a complex set of laws and regulations governing their operations, including regulations related to accreditation, financial aid, student outcomes, marketing, and more. 

Non-compliance with these regulations can result in significant legal and financial consequences, including fines, loss of accreditation, loss of eligibility for federal financial aid, and reputational damage. These consequences can be particularly severe in the for-profit education sector, where institutions are often heavily reliant on federal Title IV financial aid to fund their operations. 

In addition to the legal and financial risks associated with non-compliance, failing to adhere to regulations can also lead to poor student outcomes, such as low graduation rates and poor job placement rates. This can harm students and damage the reputation of the institution, making it more difficult to attract new students and remain competitive in the market. 

For these reasons, compliance is always my top priority in purchasing and running for-profit education institutions. It requires a dedicated and ongoing effort by an astute team to monitor and ensure that all aspects of the institution’s operations are in compliance with the relevant laws and regulations. This often involves significant investments in staff, systems, and processes to manage compliance and mitigate risks. 

The results of due diligence will impact the selling multiples based on EBITDA (earnings before interest, taxes, depreciation, and amortization) in several ways. If the due diligence process reveals positive results, such as strong financial performance, high-quality academic programs, and a positive institutional culture, the selling multiple based on EBITDA may be but will not necessarily be higher. On the other hand, if the due diligence process reveals negative results, such as poor financial performance, low-quality academic programs, and compliance issues, the selling multiple based on EBITDA will be appreciable lower. I always look for schools with some compliance issues as that lowers the EBITDA multiple for a purchase and I know from experience that most compliance issues can be corrected with an astute team of managers. 

In summary, due diligence is important in higher for-profit education to evaluate the institution’s financial, academic, and operational performance and identify potential risks and opportunities. The results of due diligence can impact the selling multiple based on EBITDA, depending on the strength of the institution’s performance and compliance with relevant standards. The objective of my due diligence is to get the information that I need to find the untapped potential of an acquisition, estimate its intrinsic value, purchase it at a low EBITDA multiple, have my team do their magic through branching, new program introduction, better marketing, reduced student turnover and the sell the entity in 3-5 years at a 30-40 time returns on my investment. In my next blog I will address the issue of finding the best entity to purchase and convincing an owner to sell his school to you. 


The Road to Tyranny

By: and

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.       


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.