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In SDNY Prosecution of PPI Hedge Funder Ahuja US on Saturday Says It Has Disclosed Enough

By Matthew Russell Lee, Periscope, Photos

SDNY COURTHOUSE, June 8 – On Day 2 of the US prosecution of Premium Point Investments hedge funders Anilesh Ahuja and Jeremy Shor, the government doggedly tried to show the jury the so-called sector spread and mid-bid mis-marking scams by which the two defendants allegedly overvalued their portfolios.

   U.S. District Court for the Southern District Judge Kathleen Polk Failla requested permission to ask her own questions, as to to clarify for the jury the difference between the bid and "mid" price, between the bid and asked.

  On Saturday, June 8 Assistant US Attorneys Andrea M. Griswold, Joshua A. Naftalis and Max Nicholas filed a letter including that "Pursuant to our colloquy with the Court on June 6, 2019, we have reviewed our file, including archived emails, for all communications with attorneys for witnesses in this case, in order to determine if there were additional materials that should be disclosed pursuant to United States v. Triumph Capital Group, Inc., 544 F.3d 149 (2d Cir. 2008). In the course of this review, we produced to defense counsel, on June 7, a draft plea allocution that counsel for cooperating witness Frank Dinucci sent to the Government. We also produced on June 7 certain bank records that we received from counsel for cooperating witness Amin Majidi earlier that day relating to an account formerly held by Majidi; a document relating to Majidi’s citizenship; a memorandum of agreement relating to a subdivision of land owned by Majidi and his wife; and communications with counsel for Dinucci relating to travel requests. This evening, we produced to defense counsel additional communications with counsel for Dinucci relating to travel requests; communications with counsel for cooperating witness Ashish Dole relating to travel requests; communications with counsel for Majidi regarding a bail modification request; communications with counsel for Dinucci and the FBI regarding setting up an account for Dinucci to make recorded calls; and emails with counsel for James Nimberg regarding the production of documents.

Having completed our review and produced the materials described above, we believe that we have complied with our disclosure obligations under Triumph Capital and the related case law." The trial resumes June 10 and Inner City Press will be there, watch this site, @InnerCityPress and the new @SDNYLIVE.

  The underlying Complaint in the case, from Paragraphs 25 to 40, does a fine job of explaining. But juror are not supposed to go online. So, lengthy testimony in a sure to be lengthy trial.

  Set to testify against Ahuja is one time PPI portfolio manager Amin Majidi. Ahuja's lawyer on June 5 told the jury they will be shown how Majadi lied not once but three times to prosecutors about an account he owned. The case is USA v. Ahuja, et al., 18-cr-328 (Judge Failla).

   First, Ahuja's Paul Weiss lawyer said, Majadi told the prosecutors he had set up the account to take money out of Iran but had never put anything in it. Then he said, yes, there was $900,000 in it from the sale of a property but he claimed he did not know how it got there. It turns out, the opening statement went, that the money was taken out of Iran through illegal money brokers: hawala. This should get interested.

 Judge Failla told the jury they will be getting a 45 minute lunch break each day during the trial at around 12:45, and will knock off at 3 pm. She said she could get them breakfast and "heavy snacks." Some of the opening statements were drown out by disappointed attendees of the proceeding against the U.S. Census citizenship question, which SDNY Judge Jesse Furman restricted to setting a briefing schedule. But things in Special Courtroom 110, where in the past UN briber Ng Lap Seng was tried and convicted as reported daily by Inner City Press, should get interesting. Watch this site.


Back on May 14 former health care investment banks Sean Stewart appeared in the run-up to a September 9 re-trial on insider trading charges, now with pro bono counsel from Fried Frank, in the SDNYcourtroom of Judge Jed Rakoff. Things got off to a rocky start.

   Judge Rakoff wanted to know why, for a retrial, it was taking so long. He asked, Why not do the trial in July? The Fried Frank lawyers said they were new to the case - although they had appeared, strangely, in a status conference on it before SDNY Judge Andrew Carter in March, Lawrence Gerschwer and Steven Witzel - and that they were reviewing discovery. Or really, that the "cavalry" would arrive next Monday, in the form of summer associates.

  Stewart was previously represented by the Federal Defenders; Judge Rakoff said while Fried Frank might be good they could not match the Federal Defenders. (He smiled as it said it). The Assistant U.S. Attorneys Richard A. Cooper and Samson A. Enzer are also new to the case, which began under Judge Swain. Judge Rakoff seems determined to end it one way or the other.  Judge Rakoff finished the proceeding with a shout-out to a Julia Green in the back of his courtroom, seemingly his law clerk in 2007 and now, after a corporate stint, with the SEC.

 Judge Rakoff set deadlines and said that the September 9 trial date will not be changed, although the jury will not sit on the Thursday and Friday of the second week. The case is USA v. Stewart, 15-cr-287.

Back in April Sebastian Pinto-Thomaz was found guilty of insider trading, the same day the jury got the case. He was barely 30 years old but was publicly traded paint company Sherwin Williams' main contact at S&P when it moved to acquire Valstar in 2016. Mysteriously a hairdresser Abell Oujaddou linked to both Sebastian and to his mother Nathalie Pinto-Thomaz made large purchases of Valspar stock and options and fell under suspicious by FINRA. A Jeremy Millul made even larger trades, of options. On April 24 the defense was barred from putting Millul's mother on the stand, to testify about another bank account and more, Inner City Press was informed.

  Late morning on April 26 in the SDNY courtroom of Judge Rakoff, the jury was read the elements of the crime and told that if they did not decide today, the next day would be Tuesday. The marshall was sworn, to take them to a "private and convenient place" - an adjacent room. Where well before the 2:30 pm knock off time for the more covered college basketball prosecution upstairs, the jury decided guilty. The sentencing will be in July. We'll have more on this.

On April 25 prosecutor Christine I. Magdo called the defense shatter-shot and desperate. She showed that Sebastian Pinto-Thomaz was in the WhatsApp and Viber contracts of jewerly dealer and Valspar options trader Jeremy Millul. But as defense lawyer Henry Mazurek pointed out after the jury was gone for the day, this doesn't prove that the two men communicated over the platforms, which when installed demand or trick a user into importing all of their contacts from email, for example.

  Judge Rakoff said the jury could make a reasonable inference from the contacts information, adding that in the view of one reasonable observer Mazurek has engaged in his summation in gross speculation. Mazurek asked, Who is that reasonable observer? Rakoff shot back, you'll have to speculate. He will instruct the jury for a half hour on April 26 then they will deliberate. According to the government, the health and safety of the stock market is on the line. Watch this site - more here on Patreon.

  Earlier on April 25 the defense put on the stand an IT consultant who showed charts he's made of hairdresser and tipee Abell Ajouddou's stock trades including Citigroup, JPM Chase and Bank of America, twice, and compare the volume of his communications, cell phone and text message, with the mother (65%) and son (35%).

  The government counter-punched by noting that WhatsApp and Viber calls were not included, and that Bank of America, Sprint and Blackberry / RIM were double counted. It was a strange ending to the evidence. After summations, the jury will begin deliberating early on April 26. Watch this site, and @SDNYLIVE.

Back on April 18, before the disenchantment, an issue arose after the jury left for lunch as to whether Oujaddou had told his then-lawyer Robert Anello to tell the government he had paid Sebastian Pinto-Thomaz about of a "tip fund" from his salon, or as he claimed earlier in the week from cash he and his wife kept in the apartment after the power outrages in Super Storm Sandy. Judge Rakoff asked for Anello's telephone number, dialed it and put him on speaker phone. There, with the consent of Oujaddou's current lawyer, Anello said, yes, his client had told him to convey that. So Oujaddou can be cross examined about that, and about the unredacted PSR report the government must now give to defense counsel. The jury will not sit on Good Friday, so things may come to a head on the afternoon on Thursday, April 18, between an equity analyst and a FINRA witnesses up from Baltimore. Watch this site.

the second day of the trial of Sebastian Pinto-Thomaz on four felony counts proceeded, with Oujaddou in the stand. Assistant U.S. Attorney Christine I. Magdo walked him through his Charles Schwab accounts, and photos from the Home Depot on 23rd Street where he said he handed Sebastian $7,500 in cash he kept in his apartment with his wife, since Hurricane Sandy.

  But when the jury left, questions were raised. Oujaddou had been threatened with a lawsuit for sexual assault by a woman whom he fired from the salon, just before marrying his Superstorm Sandy co-hoarder wife. This information, who said on the record, was deemed too prejudicial for the jury to hear.

   Sebastian's lawyer Henry Mazurek argued that it was relevant, that Oujaddou's need for hush money for the threatened lawsuit explained his trading. Even when this was denied, he made a point of saying that hush money is in the news, and that being an alleged sexual assaulter may not be so prejudicial, given that the current US President was elected. Judge Rakoff riffed, I am interested in your political analysis - but not as a lawyer. And thus ended Day Two of US v Pinto.

 Career not destroyed, Sebastian Pinto-Thomaz asked the court this year to travel to Houston for a possible new job. But for two week he's set to be in Judge Rakoff's courtroom - and after that, nobody knows. At the lunch break on April 17 he was out in front of 500 Pearl Street working his cell phone. Watch this site.

Back on April 10 a defendant awaiting sentencing on hedge fund fraud appeared to change lawyers on April 10 before SDNYJudge William Pauley. First his outgoing lawyer Edward Little visited him in the green brick hallway outside the courtroom, then his prospective or potential replacement counsel, Jonathan Halpern, went into the hall to see him. When the defendant Nicholas Genovese was brought out in shackles he was thin and bespectacled, guarded by two marshals. In between the two counsel recounted their histories working in the U.S. Attorney's Office, Little from 1982 to 1990 then on Wedtech cases, Halpern from 1989 to 2004 (yes, they overlapped one year.) Still when Judge Pauley took the bench he said as early as April 18 he will appoint a CJA lawyer if the connection between Genovese - fees paid by his mother - and Halpern doesn't take. According to the U.S. Attorney, "NICHOLAS JOSEPH GENOVESE pled guilty today in Manhattan federal court to securities fraud for inducing investments in a hedge fund that he founded, Willow Creek Investments LP (“Willow Creek”), by misrepresenting his qualifications and professional background and concealing that he had prior felony convictions for fraud-related crimes. In February 2018, GENOVESE was charged and arrested for perpetrating this fraud. Today, GENOVESE pled guilty to one count of securities fraud before United States District Judge William H. Pauley III. As part of his guilty plea, GENOVESE agreed to forfeit more than $13 million of proceeds of the securities fraud, including his interest in two watercraft that GENOVESE purchased with funds that he obtained from his victims." Inner City Press will continue to follow this case, so different than another recent change of counsel in the SDNY.

  On April 8 a defendant accused of four armed robberies of livery cab drives in The Bronx asked for bail - and when it was denied, he fired his lawyer, who told the court the defendant was bipolar and heard voices. It wasbefore SDNY Judge Paul Crotty, who denied bail and then assigned the defendant James Jackson a new CJA lawyer. Before the switch off, Jackson's Federal Defenders lawyer argued that Jackson has a friend who makes $100,000 a year working construction and would put up $5000, and that Jackson's mother said if he fled the U.S. Marshals wouldn't have to chase him down, she would. Crotty was unmoved. The Assistant US Attorney Thomas Wright told Crotty that Jackson had confessed to all four Hobbs Act robberies and to brandishing a weapon, which the government believes he still has access too.

  Wright said Jackson during interrogation spoke of suicide and of hearing voices. His Federal Defender lawyer Philip Weinstein, before he learned he would be fired, said Jackson had swallowed bleach at age 20 and needed time on bail to say goodbye to his seven year old who does not live with him but whom he still fathers. Weinstein waved a plea offer then government has made with a deadline of May 3. That has now been pushed back at least until 8. Inner City Press, the only media in Judge Crotty's courtroom, albeit still without electronics, will continue to follow this case.

  Back on March 27 a defendant brought before SDNY Judge Crotty also wanted to change lawyers. Then he told Judge Crotty that his outgoing lawyer had taken his Honduran passport and ID and he wanted it returned. The matter was not resolved on the record; the lawyer being relieved, seeing Inner City Press with a reporter's notebook, came over and asked, Why are you covering this? Well, there is an absolute right to cover the courts. And when the allegation is that legal identity documents are taken and not returned, it should be pursued. To belatedly answer the inappropriate question of the lawyer being replaced, who after Inner City Press' answer of "Here I am" went and whispered with the judge, there was a break in the jury instructions in a case elsewhere in the courthouse that Inner City Press is covering. But really there is no need for the press or public to answer. Rather, where are the documents? After a long trial for a Bronx murder 22 years ago in 1997, on March 27 U.S. District Court for the Southern District of New York Judge Kevin Castel read instructions for the jury and told them, "And with that, you may discuss the case among yourself." After the jury went into their room, with marshal in the hall outside, Judge Castel told the seven lawyers they were all welcome to come back and appear before him. He said only a grueling work load for lawyers on trial keep the jury trial system going, so the jury service is tolerable in terms of length. Then he added his eight minute rule - that they should not go back to their offices (except maybe the prosecutors, to St. Andrew's Place), so they can return to court on eight minutes' notice in case the jurors send a note out. The US v. Latique Johnson trial Inner City Press has been covering or trying to cover across Pearl Street in 40 Foley Square, it remains unclear if the exhibits will be put online or notice given. Earlier this week Inner City Press dropped by and asked one of the defense lawyers, the one who waved a gun around during summation, if there had been jury notes. Yes, he said. But what did they say? In the Bronx cold case, two days before on on March 25 a government witness described how his van was shot at on Thanksgiving 1997 as he drove away from a disco he found too crowded. The defense quizzed him if he had been selling drugs on 26 March 1999 and 29 January 2000 and 2 February 2001 before being deported to the Dominican Republic. "I would just sell them when I needed a couple of bucks," he said. As to who killed his brother, witness Ventura said, "I know who did it." While Inner City Press had to leave to cover the Michael Avenatti presentment 12 stories higher in the SDNY courthouse, a person watching the entire trial marveled to Inner City Press that "the defendants wife came, she works for Immigration, how is that possible." We'll have more on this ongoing trial. Back on March 21 a former NY police officer now working in Florida testified about stopping a white van with a gun in it on 188th Street and the Grand Concourse on 29 August 1991 and, along with Officer Serge Denecko, arresting for men in the van. Earlier a woman who was shot at and grazed on the chin described seeing a gun sticking out the passenger's side, and that Hinton, her ex boyfriend, sold drugs on 149th Street under the direction of "Rob," presumably the defendant Roberto Acosta a/k/a Mojica. More and more facts are coming in - maybe too many? Back on March 20 a now elderly man who had moved tens of kilos of cocaine in 1998 was cross examined about how much times he has met with the prosecution to prepare this testimony. It got repetitive, as pointed out by U.S. District Court for the Southern District of New York Judge Kevin Castel. Did he meet Detective Vasquez on January 26, 2018? He couldn't remember the date but yes, many times. Did Detective Vasquez drive him around and take photographs of the sights and stash-houses he pointed out (presumably including 156th and Broadway)? Yes. Later on March 20 there were two forms of testimony about University Avenue in The Bronx. There was the double murder, on 22 December 1997, Carlos Ventura and another. By 1999 there were payments into the prison commissary account of Jose Diaz a/k/a Cano, a full $200 from Joyce Pettaway who lived in Apartment 4-G of 2769 University Avenue from September 1992 to November 5, 2001, according to a stipulation by the landlord Jonah Associated. There was a long sidebar about an objection to double hearsay; there was a reference to two cassette tapes of recorded conversations between Robert Acosta a/k/a Mojica and a person whose name was redacted, and a description of how evidence is destroyed. Two days before, the now-old man testified about picking drugs up in Jackson Heights, Queens and Lodi, New Jersey and cooking it into crack in an an apartment on the aforementioned (and photographed) 156th Street and Broadway in Manhattan. At day's end under cross examination he described in detail buying a kilo of coke for $40,000 and selling it for $125 a gram - a mark up for nearly 300%. The goal seemed to be to get the jury to see the witness as a predator, not exactly difficult, despite how he has aged.

  He said he would fly to Miami and buy the cocaine from " a Colombia gentleman" named Jose Picardo; he described without objection "un africano" named Mike and two Dominican women paid $10,000 each to flying into Newark from the Dominican with heroin strapped to their bodies. The money to pay them exchanged hands in a restaurant on 155th Street and Edgecombe Avenue, "on the way to Yankee Stadium." Where the old Polo Grounds used to be...


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