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Lawyers Malign Loretta Lynch As Ploy in Kriss Billion-Dollar Strike Suit

By: Michael Bays, Esq., Attorney for Felix Sater

In an article entitled, ‘Questions for Loretta Lynch on secret dockets’ in thehill.com on January 28, 2015, attorneys Frederick M. Oberlander and Richard E. Lerner complain about the “concealment of criminal cases” to the detriment of “victims’ legal rights to seek mandatory restitution,” in the Eastern District of New York where Loretta Lynch is the U.S. Attorney.

In their single example, they rail against the case of Felix Sater, who pleaded guilty in 1998 to crimes he committed twenty years ago, and whose case was sealed by the courts. While the practice of sealing cooperators’ cases is lawful, prevalent and no secret whatsoever, what is a secret—and what the writers fail to mention—is Frederick Oberlander and Richard Lerner’s relationship to the Felix Sater case. In actuality, Oberlander and Lerner are the very lawyers who’ve been suing Sater for years.

They have sued him on behalf of a private party, Jody L. Kriss, who was Felix Sater’s junior partner. They have sued him along with numerous other defendants, including several high profile and deep pocket clients. They have been suing all of these defendants for millions and millions of dollars—currently the demand is for $1 billion—in the hopes of a get-rich-quick settlement, not a penny of which would go to anyone outside their group.

The Jody Kriss litigation is one massive, long-running extortion scheme … nothing more. It has nothing to do with Loretta Lynch or her qualification to be the next Attorney General. It has nothing to do with ‘victims rights’ or ’secret dockets,’ and everything to do with ‘hush money’ for Oberlander, Richard Lerner and Jody Kriss. In their current writing, Frederick Oberlander and Lerner have simply seized on Ms. Lynch’s confirmation hearings as a means to advance their extortionate litigation scheme and to profit from it. The fact that they are attempting to interfere with the confirmation hearings of Loretta Lynch—a dedicated public servant with a stellar reputation as a prosecutor—is further proof of their extortionate litigation tactics and strategy.

As a former Assistant U.S. Attorney who worked for Ms. Lynch in the U.S. Attorneys Office for the Eastern District of New York (2000 – 2005), and as an attorney for two of the defendants in the Jody Kriss litigations, I feel it necessary to set the record straight on a few matters.

Theft, Extortion And Criminal Contempt of Court

The Jody Kriss litigations have nothing to do with “secret dockets,” the First Amendment or Loretta Lynch, as Oberlander and Lerner would dishonestly suggest, and everything to do with Frederick Oberlander, Richard Lerner’s and Kriss’ use of stolen documents, relentless extortion campaigns and their repeated violations of court orders.

Jody Kriss and Frederick Oberlander illegally used documents—which the courts found to have been stolen from Felix Sater—which revealed Sater’s work on matters of national security. This was done in order extort a billion-dollar settlement in lawsuits brought by Jody L. Kriss in partnership with his attorneys against numerous well-known, deep pocket defendants.

The demands and threats were as simple as they were venal: ‘If you don’t pay us millions of dollars, we will expose him … and he might be killed.’ By contrast, if they received their desired ransom, Felix Sater’s safety would be ensured and the public would never know. As a result of their extortionate and improper tactics, Frederick Oberlander and Richard Lerner have been under investigation for criminal contempt of court for the past three years. So much for their disingenuous attempts to cast themselves as victims’ rights advocates and crusaders for public access to court proceedings.

Specifically, in May 2010, Frederick Oberlander filed a lawsuit on behalf of Jody Kriss in the Southern District of New York, attaching several documents in Felix Sater’s underlying criminal case to the complaint. Kriss v. Bayrock, 10 Civ. 3959 (LGS). The documents revealed details of Felix Sater’s cooperation with the U.S. government, including his work for the intelligence community on matters of high-level national security and in the war on terror. They had been sealed by court order, as is the common practice with government cooperating witnesses. And, they’d been stolen.

As the courts have found, Sater’s documents had been stolen, and Frederick Oberlander improperly obtained them. Jody Kriss’ complaint named nineteen defendants in that action, including Felix Sater, the Bayrock Group—which Sater founded and Kriss formerly worked—and four prestigious law firms, namely, Nixon Peabody LLP, Roberts & Holland LLP, Duval & Stachenfeld LLP, and Ackerman Senterfitt LLP, which had all done work for Bayrock. It even named one of the firms’ malpractice insurance carriers as a defendant, National Union Fire Insurance Co. of Pittsburg, PA.

In the months after filing the complaint, Frederick Oberlander, Richard Lerner and Jody Kriss made their true plan and motivation perfectly clear: to use Felix Sater’s sealed documents as leverage to extort a $105,000,000 dollar settlement from the other defendants—particularly the “deep pocket” defendants and reputable law firms who would demand money from their insurance carriers just to avoid the negative publicity of being associated with Felix Sater and his sensational past. Notably, Oberlander and Lerner even put their extortion strategy in writing.

In one letter, they made a written “demand for the payment of $105,000,000,” or later, “one billion dimes,” but added that they would “… favorably consider settling the entirety of all claims known and unknown for their actual damages of $35,000,000.” “This,” Frederick Oberlander wrote, “is the least amount which plaintiffs would be willing to accept for a quick settlement that avoids the dissemination” of Sater’s sealed documents. All along, they had been using Felix Sater’s sealed documents as a bargaining chip, since they knew their dissemination would expose Sater to grave danger. But, for the right amount of money, Frederick Oberlander, Richard Lerner and Jody Kriss would help conceal those documents from the public—the very matter which they now claim render Loretta Lynch unqualified to serve as U.S. Attorney General. [Oberlander October 18, 2010 letter to Herman].

In a separate letter, Oberlander told Felix Sater to “get out of the way” so he could extract a huge settlement from the other defendants and, in doing so, keep the case from public view: “If you wish Sater’s activities lawfully kept quiet … stand still, stop filing motions and get out of the way so Plaintiffs can try to resolve the case before everything … goes public. The only way to prevent worldwide notoriety will be … a global settlement… I can with confidence predict from the settlement discussions I’ve had that all the defendants will be delighted to keep this quiet … If this case is not settled quickly, it will surely go viral. If you obstruct the settlement instead of helping get there, everything will go public with clockwork inevitability … No power on earth will much longer prevent as much lawful and legal worldwide dissemination of this Complaint and every document attached thereto or referenced therein as the public and press doing the dissemination think its value justifies … Only a sealed confidential settlement agreement Plaintiffs find acceptable, executed very soon, can stop that… Always remember, if I can’t settle this in time now, you will have brought this about by your decisions, taking the tactical nuclear device I filed in SDNY and enhancing it beyond what even I could have, magnifying its yield to that of a strategic thermonuclear weapon by dragging in EDNY and that disaster… I see legal ways out for your client, which are in my clients’ interests to facilitate. You won’t see them. You need my help. Take it. Fast. Or Judge Buchwald will be presiding over World War III with coverage likely on the front page of the New York Law Journal.” [Frederick Oberlander November 9, 2010 letter to Herman].

Over the five years since the inception of the Jody Kriss lawsuits—of which there have been three almost identical to each other—Frederick Oberlander, Richard Lerner and Jody Kriss have engaged in all manner of illegal and improper conduct in furtherance of their extortion campaign.

In May 2010, Judge Buchwald in the Southern District of New York re-sealed the Felix Sater documents, which Oberlander had attached to the Jody Kriss complaint and so colorfully threatened to disseminate. Later that summer, Judge Glasser in the Eastern District of New York (who had presided over Sater’s underlying criminal case 20 years prior) ordered Oberlander and Richard Lerner to return Felix Sater’s pre-sentence report (“PSR”) and enjoined its further dissemination.

On appeal of that order in February 2011, the U.S. Court of Appeals for the Second Circuit enjoined Oberlander and Lerner from disseminating any of Sater’s documents or sealed information and ordered the appointment of a separate judge. Judge Cogan in the Eastern District of New York was to monitor their behavior and ensure their compliance with court orders. Both the Second Circuit and Judge Cogan specifically enjoined the attorneys from disseminating the sealed information to the public, press or to Congress, but time and time again, sometimes surreptitiously, sometimes overtly, Frederick Oberlander and Richard Lerner did just that.

Over the next year, they secretly leaked information to the press, enlisted members of the public to their cause, gave an interview and posed for a photograph on one occasion—all in violation of the Second Circuit and district court’s orders. As a result, in February 2012, Judge Cogan referred Frederick Oberlander and Richard Lerner to the U.S. Attorneys Office for criminal contempt of court, an investigation that is still pending three years later.

Meanwhile, in 2013, two new frivolous lawsuits became part of their extortion campaign. The first one, on behalf of nominee plaintiffs fronting for Jody Kriss, fraudulently named the estates of deceased Holocaust survivors. This has since been dismissed by the district court and is pending appeal. The second one is a re-tread of the Jody Kriss litigation—only this one brought in New York state court (since removed to federal court), naming additional high-profile defendants including Donald and Ivanka Trump and an Assistant U.S. Attorney, and increasing Jody Kriss’ demand tenfold from “one billion dimes” to one billion actual dollars (the “Kriss II litigation”).

Frederick Oberlander and Lerner’s opprobrious behavior is an embarrassment to the entire legal profession. In fact, Richard Lerner was thrown out of his former law firm, Wilson Elser, for his irrational, illegal acts, and criminal contempt charges. Indeed, even Jody Kriss himself has tried to distance himself from Frederick Oberlander and Richard Lerner’s maniacal, sometimes outlandish and extortionate tactics, apparently refusing to participate in the Jody Kriss II litigation that bears his own name. Query whether Oberlander and Lerner are fit, legitimate commentators on the Attorney General confirmation hearings.

Typical Opportunism

Seizing on Loretta Lynch’s confirmation process to advance the Jody Kriss litigation is nothing new for these plaintiffs. This is not even the first time they have tried to link their case to a national, newsworthy event.

In May 2011, they tried to derail Donald Trump’s bid for the presidency, based on the fact that Trump once had ties to Bayrock, the real estate company Felix Sater and Jody Kriss had worked for. In that case, they contacted The Daily Beast, provided the Kriss complaint and made the connection between Trump, Felix Sater, Jody Kriss and the sensational litigation involving the latter two (all in violation of the Second Circuit’s injunction against speaking to the press).

Similarly, in this case, they have tried to parlay their claims about secret dockets and victims’ rights, which all the courts have rejected, into a bid to derail Loretta Lynch’s confirmation for Attorney General. In both cases, they have seized on national news to hold a high-profile target for ransom, undoubtedly with the expectation someone would pay them to go away. This is one of their many dirty tricks, particularly where, as here, traditional litigation tactics have failed miserably for them.

The Plain Truth

Here are the real facts, which prove conclusively this has nothing to do with Loretta Lynch, or victims’ rights, and expose Frederick Oberlander, Jody Kriss and Richard Lerner’s strategy for what it really is … an extortion.

First, Loretta Lynch was not the U.S. Attorney in 1998 when Felix Sater plead guilty to his underlying, twenty-year-old crime.

Second, Ms. Lynch did not seal Felix Sater’s case in 1998. In general, prosecutors don’t seal cases. Judges do. Judge Glasser sealed Sater’s case in 1998.

Third, Felix Sater’s case was sealed for valid and lawful reasons. He spent the next 11 years after his conviction providing high-level information to the intelligence community on matters of national security at the highest levels, and against the world’s biggest terrorists and their threats against our country. The work he did exposed him to grave danger, and therefore his case should have been sealed. The cases of cooperating witnesses are typically sealed even in the most routine cases, and this is the practice throughout the federal courts, not just the federal courts of New York.

Fourth, Felix Sater’s 2009 sentence of no restitution and only a $25,000 fine was lawful, based on the fact that the victims were no longer identifiable, as well as showing a measure of gratitude by our courts for his work to protect our country.

Fifth, Frederick Oberlander and Richard Lerner do not represent ‘the victims’ as they would have the public believe. They simply represent a single private plaintiff, Jody L. Kriss, seeking to make money in a private litigation. None of ‘the victims’ they claim to represent would receive a penny of those funds.

Indeed, as reported on February 12, 2015—in the article, ‘Loretta Lynch Responds to NRO’s Reporting on Allegations She Slighted Victims’ Rights’—Ms. Lynch confirmed the propriety of her actions with respect to Mr. Sater’s case, his extraordinary cooperation, and especially his unprecedented assistance regarding matters that involved our national security. Additionally, she emphasized that every court—right up to the Supreme Court—has rejected all claims of any impropriety with respect to Mr. Sater’s case.

In summary, it is obvious that Frederick Oberlander, Jody Kriss and Richard Lerner are simply leaching off the rights of victims they do not know or represent, for matters that have nothing to do with Ms. Lynch or Felix Sater, in an illegitimate effort to make noise that makes no sense, and make money they do not deserve.

Questionable Motives

One final point about Frederick Oberlander and Richard Lerner’s attack on Loretta Lynch … it should be remembered that Oberlander and Lerner are under criminal investigation—based on their conduct in the courts of the Eastern District of New York, and as referred for criminal prosecution by a judge (Judge Cogan) in that district.

It seems only logical they’d be concerned that they might one day be prosecuted by that district, which Ms. Lynch currently heads as U.S. Attorney. Therefore, one might ask if their attack on Ms. Lynch is a preemptive strike? If they are indeed prosecuted, they could then attempt to raise the defense that the prosecution is political, in retribution for their questioning of Ms. Lynch during the confirmation hearing. Perhaps they believe by making this preemptive attack, they can reduce the chances of being prosecuted for criminal contempt of court.

All in all, the reader should not be fooled. The ‘Questions for Loretta Lynch on secret dockets’ have nothing to do with Ms. Lynch or her qualification to be the next U.S. Attorney General. It is nothing more than the latest effort of serial extortionists to make a quick, undeserved buck and create an alibi and cover for that extortion.

A partner with Beys, Liston, Mobargha & Berland, LLP, Michael Beys is an experienced trial attorney focusing his practice primarily on commercial litigation, and white-collar criminal defense. From 2000 to 2005, he served as a federal prosecutor in the U.S. Attorneys Office for the Eastern District of New York where he was the lead counsel in over 100 federal prosecutions and investigations involving racketeering, bank and wire fraud, tax evasion, money laundering, material support for terrorism, interstate robbery conspiracy, narcotics trafficking and murder.


 Senate Judiciary Committee Ignores Attack on Loretta Lynch Confirmation

In a recent blog on thehill.com, attorneys, Frederick Oberlander and Richard Lerner, made claims that as U.S. Attorney in the Eastern District of New York, Loretta Lynch engaged in systematic prosecutorial misconduct. They alleged Ms. Lynch concealed criminal cases, such as that of Felix Sater, to protect fraudsters who cooperated with the government.

The attorneys claimed Ms. Lynch intentionally concealed information from purported fraud victims who may have been entitled to restitution. A letter from several right-wing groups, including the Tea Party Nation, also questioned Ms. Lynch’s nomination. The Senate Judiciary Committee declined to address any of those claims at their recent hearings.

In the February 12, 2015 article, ‘Loretta Lynch Responds to Reporting on Allegations She Slighted Victims’ Rights,’ Ms. Lynch confirmed the propriety of her actions with respect to Mr. Sater’s case, his cooperation, and his assistance regarding matters that involved national security. In a letter to Utah Senator Orrin Hatch—the most senior Republican Senator—Ms. Lynch stated that Sater’s assistance was critical to national security. Ms. Lynch also reported that every court—right up to the Supreme Court—has rejected all claims of any impropriety with respect to Mr. Sater’s case.

Attorneys for Felix Sater—Robert Wolf and Michael Beys—claim the real story behind the questioning is an illegitimate scheme that Frederick Oberlander and Richard Lerner and their client, Jody Kriss (a disgruntled former business associate whom Sater fired, and not an alleged victim), have concocted. Wolf and Beys say it involves an extortionate lawsuit—based on a 20- year-old crime—and a shakedown where one billion dollars is being sought against those who supposedly cooperated with Felix Sater—including Nixon Peabody, Morgan, Lewis & Bockius, Akerman Senterfitt, Donald and Ivanka Trump, iStar Financial and a federal prosecutor for the United States Attorney’s Office for the Eastern District of New York.

Frederick Oberlander and Richard Lerner’s campaign has been described in court proceedings as “an effort to extort Mr. Sater, major law firms and others out of tens of millions of dollars, ostensibly to line their own pockets, not protect alleged victims entitled to restitution.” Wolf and Beys also claim that, as part of their scheme, Oberlander and Lerner have filed a series of frivolous lawsuits over the past six years—most of which have been dismissed—and have now upped the ante by going after Loretta Lynch herself with baseless claims.

Wolf and Beys believe Oberlander’s own words and actions—evidenced in court filings in several related litigations—prove extortion. Frederick Oberlander said that they would: ” … favorably consider settling the entirety of all claims known and unknown for their actual damages of $35,000,000 … [and it was] the least amount which plaintiffs would be willing to accept for a quick settlement that avoids dissemination.”

According to Wolf and Beys, Oberlander made clear that money was the only object stating that: “… the only way to prevent worldwide notoriety [would] be a globally stipulated sealed confidentiality order accompanying a global settlement.”

Oberlander and Lerner’s judicial misconduct has been uniformly condemned by the United States Court of Appeals for the Second Circuit and several Judges from the United States District Courts for the Southern and Eastern Districts of New York. Frederick Oberlander and Richard Lerner are currently under criminal investigation—based on their conduct in the courts of the Eastern District of New York, and as referred for criminal prosecution by Judge Brian M. Cogan, in that district.

Michael Beys has postulated that Oberlander and Lerner might have other motives in the questioning of Loretta Lynch. “They may be concerned that district—which Ms. Lynch currently heads as U.S. Attorney—could prosecute them. If they are indeed prosecuted, they could then attempt to raise the defense that the prosecution is political, in retribution for their questioning of Ms. Lynch during the confirmation hearing. Perhaps they believe by making this preemptive attack, they can reduce the chances of being prosecuted for criminal contempt of court.”

Republican Iowa Senator Chuck Grassley, the committee chairman, praised Ms. Lynch for being “engaging and confident” during her Senate Committee testimony. “There’s no question about her competence, what she’s done as far as her legal background, and her work as U.S. Attorney [in New York],” said Mr. Grassley.

In a statement after the hearing, Senator Hatch said, “The Justice Department is in dire need of new leadership. I plan to support her nomination.”


 

Loretta Lynch Answers Question Of Whether She Failed To Protect Victims’ Rights

After months of criticism by certain conservative special interest groups questioning her nomination for Attorney General, Loretta Lynch publicly responded to a question posed by Utah Senator Orrin Hatch—a Republican member of the House Judiciary Committee—in a recent article.

According to a spokesperson from Senator Hatch’s office, Ms. Lynch was not in a position to respond to the numerous allegations when these criticisms were initially raised and he wanted to give her a chance to answer the question of whether she had complied with federal laws that ensure restitution is provided to crime victims.

In 2013, law professor, Paul Cassell, had urged the House Judiciary Committee to review how Ms. Lynch’s office had handled a case involving Felix Sater. In 1998, Mr. Sater pleaded guilty to fraud charges, agreed to assist the government with issues of national security and was ultimately sentenced by the Court to pay a $25,000 fine justified on numerous grounds and seemingly in gratitude for his service to his country. In the interest of national security, the safety of Mr. Sater, and other reasons related to his government cooperation, the court sealed his records.

Ms. Lynch told Sen. Hatch in a letter that Felix Sater’s assistance was critical to national security, “The defendant in question, Felix Sater, provided valuable and sensitive information to the government during the course of his cooperation, which began in or about December 1998. For more than 10 years, he worked with prosecutors from my Office, the United States Attorney’s Office for the Southern District of New York and law enforcement agents from the Federal Bureau of Investigation and other law enforcement agencies, providing information crucial to national security and the conviction of over 20 individuals, including those responsible for committing massive financial fraud and members of La Cosa Nostra. For that reason, his case was initially sealed.”

Indeed, Ms. Lynch confirmed the propriety of her actions with respect to Mr. Sater’s case, his extraordinary cooperation, and especially his unprecedented assistance regarding matters involving our national security. Additionally, she emphasized that every court, right up to the U.S. Supreme Court has rejected all claims of any impropriety with respect to Mr. Sater’s case.

Although several Conservative groups supposedly raised the questions about Ms. Lynch, there is supposition by Felix Sater’s legal team that this could be a legal ploy by attorneys for Jody Kriss—who is currently suing Mr. Sater along with numerous companies, law firms and other high profile, deep pocket defendants, to manufacture a defense for themselves in order to elude potential prosecution on criminal contempt charges.

These baseless claims against Ms. Lynch are also part of a failed attempt to glorify the otherwise corrupt efforts of lawyers, Paul Cassell, Frederick Oberlander and Richard Lerner to expose the alleged impropriety of the sealing of Mr. Sater’s case, and his $25,000 fine, as part of a claimed victims rights’ crusade. This was designed to conceal from the public the true motive of Oberlander and Lerner’s campaign—described in court proceedings as an effort to extort Mr. Sater, major law firms and others by seeking one billion dollars ostensibly to line only their own pockets and not give one dollar to or protect alleged victims entitled to restitution.

Jody Kriss along with his attorneys, Frederick M. Oberlander and Richard E. Lerner, have engaged in a contemptuous seven-year legal battle, which has included the filing of a slew of frivolous lawsuits, and attempts to use Mr. Felix Sater’s stolen court sealed files. It has also resulted in a Federal Judge referring Oberlander and Lerner to the Department of Justice for criminal contempt investigation.

Mr. Sater’s counsel believes Oberlander and Lerner have now attacked Loretta Lynch as a pretext to attempt to mask their possible criminal prosecution as retaliation for questioning Ms. Lynch’s nomination.

Read on:


 

Felix Sater Statement on Loretta Lynch Nomination

NEW YORK, Feb. 17, 2015 /PRNewswire/ — After months of criticism by certain conservative special interest groups questioning her nomination for Attorney General, Loretta Lynch publicly responded to a question posed by Utah Senator Orrin Hatch—a Republican member of the House Judiciary Committee—in a recent article.

According to a spokesperson from Senator Hatch’s office, because Ms. Lynch was not in a position to respond to the numerous allegations when these criticisms were initially raised, he wanted to give her a chance to answer the question of whether she had complied with federal laws that ensure restitution is provided to crime victims.

In 2013, law professor, Paul Cassell, had urged the House Judiciary Committee to review how Ms. Lynch’s office had handled a case involving Felix Sater. In 1998, Mr. Sater pleaded guilty to fraud charges, agreed to assist the government with issues of national security and was ultimately sentenced by the Court to pay a $25,000 fine justified on numerous grounds  and seemingly in gratitude for his service to his country.  In the interest of national security, the safety of Mr. Sater, and other reasons related to his government cooperation, the court sealed his records.

In a letter to Senator Hatch, Ms. Lynch stated that Sater’s assistance was critical to national security: “The defendant in question, Felix Sater, provided valuable and sensitive information to the government during the course of his cooperation, which began in or about December 1998. For more than 10 years, he worked with prosecutors from my Office, the United States Attorney’s Office for the Southern District of New York and law enforcement agents from the Federal Bureau of Investigation and other law enforcement agencies, providing information crucial to national security and the conviction of over 20 individuals, including those responsible for committing massive financial fraud and members of La Cosa Nostra. For that reason, his case was initially sealed.”

Indeed, Ms. Lynch confirmed the propriety of her actions with respect to Mr. Sater‘s case, his extraordinary cooperation, and especially his unprecedented assistance regarding matters involving our national security.  Additionally, she emphasized that every court, right up to the  U.S. Supreme Court has rejected all claims of any impropriety with respect to Mr. Sater‘s case.

Although several conservative groups supposedly raised the questions about Ms. Lynch, there is supposition by Felix Sater‘s legal team, headed by Robert Wolf at Moses & Singer LLP.

These claims Ms. Lynch are also part of a failed attempt by Paul Cassell, Frederick Oberlander and Richard Lerner to expose the alleged impropriety of the sealing of Mr. Sater‘s case, and his $25,000 fine, as part of a claimed victims rights’ crusade. Jody Kriss along with his attorneys, Frederick M. Oberlander and Richard E. Lerner, have engaged in a contemptuous seven year legal battle. It has also resulted in a Federal Judge referring Oberlander and Lerner to the Department of Justice.

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