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In Bannon Case We Build the Wall and Kobach Lose Appeal of Restraining Order, May Seal

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SDNY COURTHOUSE, May 5 – The Southern District of New York courthouse, which Inner City Press has covered nearly alone this summer amid the COVID-19 pandemic, was jumping on August 20. Video here.  In the afternoon, Steve Bannon would appear in person before a judge. After pleading not guilty, he told the press as he left the courthouse, "This entire fiasco is to stop people who want to build the wall."

This came after more than two hours of chanting by three then six people with flags, pro-Bannon: "CCP violence, stop the killing." Inner City Press spoke with them, video here.

And see coverage of Guo case here, podcast here

 On August 31, U.S. District Court for the Southern District of New York Judge Analisa Torres held a proceeding, and Inner City Press live tweeted it, below.

  On December 17, Judge Torres held another proceeding, and Inner City Press live tweeted it, below.

On December 27-28 in the case, We Built The Wall and Kris Kobach have appealed: "Notice is hereby given that We Build the Wall, Inc., and Kris Kobach, nonparty movants in the above-captioned case, hereby appeal to the United States Court of Appeals for the Second Circuit from an Order denying their Motion to Modify a Post-Indictment Restraining Order, entered in this action on December 14, 2020."

Now on May 5, Judge Torres has denied the request without prejudice: "ORDER - Defendant Brian Kolfage moves for an order modifying the post-indictment restraining order issued on August 24, 2020, which prohibits the transfer of certain funds involved in his charged offenses (the "Restraining Order"), ECF No. 64. Alternatively, he requests a hearing to challenge the Courts finding that there was probable cause for the issuance of the Restraining Order, ECF No. 77. For the reasons stated below, Kolfage's motions are DENIED without prejudice. By May 19, 2021, Kolfage may submit evidence demonstrating that he meets the threshold for a Monsanto hearing, along with a motion to seal the affidavit from the public if desired. (Signed by Judge Analisa Torres on 5/5/21)."

More specifically, "In his declaration, Kolfage claims that he cannot pay his lawyer without We Build the Wall’s insurance. Kolfage Decl. ¶ 5. This “bare recitation” does not meet the required threshold. Bonventre, 720 F.3d at 128. Kolfage has stated that he is prepared to submit the required financial affidavit if required, Def. Mem. at 7, and the Court shall permit him to do so.

In addition, as Kolfage is seeking to unfreeze We Build the Wall’s funds to pay for his defense, the Court also requires evidence that We Build the Wall needs the restrained funds to pay the $125,000 and that We Build the Wall will, in fact, use the funds to do so. See Emor, 794 F. Supp. 2d at 149–50 (requiring information regarding a third-party employer whose frozen assets defendant asserted would pay for his legal fees, because “there is no reason to believe that due process requires a hearing whenever a third[ ]party wishes to cover a defendant’s legal expenses using seized assets in lieu of other, more readily available assets”). B. Request for Ex Parte Submission Kolfage requests he be permitted to submit the financial affidavit ex parte, or, if the Court declines to permit that, to “preclude the government from being able to use, directly or derivatively, any statements in the affidavit against” him. Def. Reply at 6. Kolfage contends that the Government may attempt to use such statements as proof of guilt, and permitting the Government to do so would put Kolfage in the untenable position of choosing between his Sixth Amendment right to counsel, and his Fifth Amendment right to not self-incriminate. Id. at 5–6. The Court is aware of “no cases that provide guidance on reconciling the tension between the Fifth Amendment and the Sixth Amendment . . . where Defendant would have to produce Case 1:20-cr-00412-AT Document 111 Filed 05/05/21 Page 10 of 13 11 financial data to prevail in his quest for the release of seized assets to hire counsel of his choice,” but the issue has arisen in the analogous circumstance of the affidavits used to establish a defendant’s eligibility for a lawyer appointed under the CJA. U.S. v. Bokhari, 185 F. Supp. 3d 254, 266 (D. Mass. 2016). Second Circuit defendants are not automatically entitled to make an ex parte submission when demonstrating that CJA eligibility might raise Fifth Amendment concerns. United States v. Harris, 707 F.2d 653, 662–63 (2d Cir. 1983). Courts generally “either permit[] the defendant to present financial information through ex parte, in camera proceedings with the information subsequently placed under seal, or conduct[] an adversarial proceeding but set[] specific limits on the subsequent use of any information presented by the defendant during the inquiry.” United States v. Hilsen, No. 03 Cr. 919, 2004 WL 2284388, at *4 (S.D.N.Y. Oct. 12, 2004). The Second Circuit has “expressly endorsed the latter option,” and set forth the “guiding principles” that “‘facts are best determined in adversary proceedings,’ the importance of which process outweighs any ‘speculative possibility of inadequate protection of defendant’s [F]ifth [A]mendment rights,’ particularly where those rights are otherwise protected by limitations imposed on the government’s use of information supplied by a defendant in aid of his or her application for appointed counsel.” Id. at *4, 8 (quoting Harris, 707 F.2d at 662–63). Accordingly, the Hilsen court concluded that, under Harris, unless the conflict between the Fifth and Sixth Amendments was “immediate and real” and there was more than the “the bare assertion that disclosure of this information would present a substantial hazard of selfincrimination,” a court should not permit an ex parte submission. Id. at *9–10.

Echoing Harris, courts in this circuit have almost uniformly denied requests to file a CJA affidavit ex parte, including where the defendants were charged with fraud. See, e.g., United  States v. Coniam, 574 F. Supp. 615, 617–18 (D. Conn. 1983); United States v. Hennessey, 575 F. Supp. 119, 120 (N.D.N.Y. 1983), aff’d, 751 F.2d 372 (2d Cir. 1984). In the one instance where a court granted the party an ex parte, in camera hearing, the defendant was requesting a CJA attorney for sentencing, where the defendant’s underlying conviction was for perjury on the court based on the defendant’s submission of false statements in an affidavit supporting his request for CJA counsel in a separate case. United States v. Jenkins, 130 F. Supp. 3d 700, 704–05 (N.D.N.Y. 2015), aff’d, 727 F. App’x 732 (2d Cir. 2018).3

Here, Kolfage claims that his Fifth Amendment concerns arise from the Government’s “hyper-critical” scrutiny of his finances, in which it “appears to consider every financial decision [Kolfage] has made [as] evidence of guilt,” and so he is “hesitant to provide the [G]overnment with additional information that, although innocent, the [G]overnment will most likely twist and contort to support the charges filed against him.” Def. Reply at 6. These concerns are speculative. Cf. Coniam, 574 F. Supp. at 618 (denying an ex parte submission where “[d]efendant has merely suggested that unsealing ‘may provide the government with access to information relevant to the prosecution which may be developed into inculpatory evidence beyond the scope of use immunity protection.’”); Hilsen, 2004 WL 2284388, at *1 (denying an ex parte submission despite [the defendant’s] assertion that “disclosure . . . would present a substantial hazard of self-incrimination in violation of the Fifth Amendment . . . because the facts to be set forth in the CJA 23 are directly related, if not identical, to the facts the government must establish at trial concerning the sole count of the indictment against [the defendant]”). 3 Courts have occasionally also permitted ex parte submissions for non-Fifth Amendment reasons. See United States v. Parker, No. 00 Cr. 53A, 2004 WL 2095684, at *4 (W.D.N.Y. Sept. 14, 2004), aff’d, 439 F.3d 81 (2d Cir. 2006) (attorney-client privilege); United States v. Venator, 568 F. Supp. 832, 836–37 (N.D.N.Y. 1983) (granting a temporary ex parte submission due to “the interests in a speedy and just disposition of this criminal matter,” where the case was scheduled to go to trial in two days).

 Accordingly, Kolfage’s request to submit an ex parte affidavit in support of his application for a Monsanto hearing is DENIED. However, the Second Circuit was clear that in disfavoring ex parte submissions to resolve the Fifth and Sixth Amendment tensions, it was not leaving the defendant in an untenable spot. See Harris, 707 F.2d at 662 (holding that “the rule that a defendant’s testimony at a pretrial hearing will not be admissible at trial on the issue of guilt unless he fails to object” is applicable to CJA affidavits). Kolfage’s affidavit shall be afforded the same scope of use immunity given with respect to CJA affidavits, meaning the protections and limitations of such immunity apply. See, e.g., United States v. Kahan, 415 U.S. 239, 242–43 (1974); U.S. v. Branker, 418 F.2d 378, 381 (2d Cir. 1969); Hilsen, 2004 WL 2284388, at *11. Therefore, the Government shall not be permitted to use in its direct case information contained in Kolfage’s affidavit that is not otherwise available. CONCLUSION For the reasons stated above, Kolfage’s motions are DENIED without prejudice. By May 19, 2021, Kolfage may submit evidence demonstrating that he meets the threshold for a Monsanto hearing, along with a motion to seal the affidavit from the public if desired." Watch this site.

From Inner City Press' December 17 thread:

Judge Torres: I understand that for Mr. Bannon, Mr. Burck [of Quinn Emanuel] is withdrawing, and Mr. Costello is making his appearance?

Burck: Yes. Judge Torres: You are relieved. Will the [remaining] attorneys make their appearances?

AUSAs Moe, Roos and Sobelman

Judge Torres now reading script of the new Due Process Protection Act signed by President Trump in October, amending Federal Rule of Criminal Procedure 5(f).

AUSA: The discovery is very extensive. We loaded the drives, at least the ones the defendants provided

Judge Torres: When will you be finished?

AUSA: It takes a while. A device [phone] has to be imaged, then a privilege team, then to prosecutors. I could give you an update in a few weeks or a month. 

Judge Torres: Done by end of January? AUSA: Not with every device.

Judge Torres: How about February 22, 1 pm, as a control date, to know if the defense will be making motion?

AUSA: Fine with the government.

 Defense: Can't predict, not having seen anything. [Apparently Costello for Bannon]

Costello for Bannon: Any Brady material?

AUSA Sobelman: we can do this offline, rather than in this public forum. Mr Costello never raised this to us, when we spoke. Judge Torres: OK, discussion offline. I'd like to wish you happy holidays. Adjourned.

Then, after the judge and others hang up, still on the line, among those with speaking roles: "Federal Judge appointed by Obama... This is pure political persecution of Trump." Watch this site.

 On November 5, co-defendant Tim Shea asked for a transfer to Colorado: "PLEASE TAKE NOTICE, that upon the accompanying papers, any exhibits attached thereto, and upon proceedings heretofore had, Timothy Shea, by his attorneys, John Meringolo Esq., will move this Court, before the Honorable Analisa Torres, in the United States District Court for the Southern District of New York, for an Order granting Mr. Shea’s motion to transfer venue of this proceeding to the United States District Court of Colorado and any other relief the Court deems just and proper. Dated: November 5, 2020 New York, NY."

Judge Torres has directed the US to reply: "ORDER as to Timothy Shea: On November 5, 2020, Defendant Shea filed a motion to transfer. ECF No. 44. By November 12, 2020, the Government shall reply to this motion. The Government shall be prepared to state its position on the motion at the status conference scheduled for November 9, 2020. (Responses due by 11/12/2020) (Signed by Judge Analisa Torres on 11/5/2020) (ap)." Watch this site.

  Now in September, a protective order in the case with this: "The parties, the parties’ counsel, and Designated Persons shall not disclose Protected Materials to members of the media, nor shall the parties, the parties’ counsel, and Designated Persons post any Protected Materials on any Internet or network site (such as Facebook, Twitter, Instagram, and other social networking and media sites and applications) to which persons other than the parties, the parties’ counsel, and Designated Persons have access." The US Attorney's Office is asking for his more and more - even in a case about a man falsely calling 9-1-1. It should not stand.

William Burck, Allison McGuire and Daniel Koffman for Bannon and finally, after unmuting, Maringolo for Tim Shea. 

Judge Analisa Torres: Good afternoon. [Asks Kolfage's lawyer to come out from the darkness - has light behind him]

 Bannon has already been arraigned, but other three have not. Judge Torres asks, "Have you been provided with the indictment?" Kolfage: Yes. Badalato: Yes. Shea: Yes. None of them want indictment read out loud in court. Kolfage: Not guilty. Badalato: Not guilty.

AUSA Moe: For Mr. Kolfage we propose $500,000 bond... & prohibition against raise funds for We Built The Wall. No guns. Badalato & Shea: $250,000 bond each, no contact with No Build the Wall-ers except for wife. Judge Torres warns condition must be complied with

 Judge Torres: We need to pick a trial date. Here in SDNY we have only a few courtrooms prepared for COVID pandemic. May 24, 2021 is the day I'd like to set. [Pause]. I haven't heard objections, so that's the date. Please tell me about discovery.

 AUSA Moe: We intend to seek a protective order before providing discovery, given the sensitive nature of the material. We will then provide search warrants and returns, a January search warrant for emails, all within 3 weeks after the protective order.

Judge Torres: I'm going to expect protective order by Sept 8, and first wave of discovery by Sept 29.

AUSA Moe: In July and August we requested more emails, and devices. We haven't seen it all yet. We'll then provide it, on a rolling basis.

 Judge Torres: All by Oct 30? AUSA Moe: We don't know which devises we'll be able get into. We can do status letters. Judge Torres: So status conference on Oct 26 at 1 pm. And yes, I would like to hear about discovery. Now I'll turn to Mr. Kolfage's social media.

Judge Torres: Let me give you an example of statements lawyers in cases here can't make: statements about past criminal record, or refusal or failure of the accused to make any statement.  If public statements by the defendants, Local Rule 23.1 allows me to rule

Judge Torres: If any party in this case makes statements that could prejudice a jury, I will issue such a statement. Do you understand, Mr. Kolfage? Yes. Mr Bannon: Yes... Kolfage's lawyer: By definition 23.1 does not apply to defendants unless you hold a hearing

Kolfage's lawyer cites US v. Gotti, 2004 case. "The government issued a press release, approved by the US Attorney herself, she says he 'used the funds for his lavish lifestyle.' That has nothing to do with the case. It violates Number 7. He's called a fraudster

 Kolfage's lawyer: The US violated the rule, they are being repeated by the press. It reminds me of the bully who picks on the weakest then when hit back, bully runs to the teacher. Rule 23 doesn't apply to defendants. Under 1(h) you'd have to hold a hearing.

Kolfage's lawyer: I have not help my client craft any statements. But we can't have the US calling my client a fraudster, and when he replies, they come and complain. Judge Torres: I'll hear from the US. AUSA Moe: We're not asking for an order at this time.

 AUSA Moe: Our press release was standard and commonplace in this District. We did not hold a press conference. What troubles us is defendant's statement to witnesses & donors telling them the government will target them.

 AUSA Moe: We have raised to Mr. Bannon's lawyer there may be a conflict of interest with his lawyer at Quinn Emanuel, which previously represented We Build The Wall. We may ask for a Curcio hearing.

Bannon's lawyer: 2 lawyers at our firm did some work for We Build the Wall, six & eight hours, by people not on the trial team. We would not object to a Curcio hearing. We don't think it's a significant issue.

Judge Torres: Time is excluded under Speedy Trial Act. This bring our conference to a close. I wish you all good health. Adjourned.

The U.S. Attorney's Office  announced "the unsealing of an indictment charging BRIAN KOLFAGE, STEPHEN BANNON, ANDREW BADOLATO, and TIMOTHY SHEA for their roles in defrauding hundreds of thousands of donors in connection with an online crowdfunding campaign known as “We Build the Wall” that raised more than $25 million.  The defendants were arrested this morning.  KOLFAGE will be presented today before U.S. Magistrate Judge Hope T. Cannon in the Northern District of Florida.  BANNON will be presented today in the Southern District of New York.  BADOLATO will be presented today before U.S. Magistrate Judge Thomas Wilson in the Middle District of Florida.  SHEA will be presented today before U.S. Magistrate Judge Kristen L. Mix in the District of Colorado.  The case is assigned to U.S. District Judge Analisa Torres in the Southern District of New York."

  At 4 pm Bannon in a mask had a presentment and arraignment in before on-duty SDNY Magistrate Judge Stewart D. Aaron. Inner City Press live tweeted it:

Appearances: Bannon is represented by Quinn Emanuel. Mag Judge Aaron is in black robe. AUSAs Roos and Moe "for the US."

Judge Aaron: When was defendant arrested?

AUSA: On a yacht off the coast of Connecticut this morning.

Judge: We may have a bail hearing until a package  has been agreed to. [Without irony:] If you are not a citizen you have of the right to notification of the consulate

Judge: Is your client prepared to enter a plea? Defense lawyer: Not guilty.

 Judge: Bail, detention or release?

AUSA Roos: We have an agreement on release. I'll read the conditions. A bond in the amount of $5 million secured by $1.75 million in cash or real property  ...two financial responsible co-signers. Travel restricted to SDNY and EDNY; DC, Maryland and the EDVA, and CT for work. No international travel. No private planes or yachts without permission. No contact with We Built The Wall except with counsel.

AUSA: No raising money for We Built The Wall or moving its money. Release today with whatever time to comply.

 Judge Aaron: I usually set a week. Defense?

William Burck for Mr Bannon: We would ask for 2 week because COVID situation is unclear.

Judge: Seems reasonable. US objection?

AUSA: No. 

Judge Aaron: I've reviewed pre-trial services report and find these conditions reasonably assure his return for future court appearances. I approve. Has Judge Torres set any conference date?

AUSA: Aug 31, 1 pm

AUSA: We have put a notice on our website for victims. And we believe the defense may have a conflict of interest.

Judge Aaron: You do not need to give me the specifics at this point. We are adjourned.

The overall case is US v. Kolfage et al., 20-cr-412 (Torres).


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