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By Matthew Russell Lee, Exclusive; Video, pics

SDNY COURTHOUSE, June 25 – A sentencing of a defendant seeking time served, seemingly for cooperation with the government, was abruptly declared "sealed" by U.S. District Court for the Southern District of New York Judge Lorna G. Schofield on June 17. Despite requests, Inner City Press has yet to be informed even of the name of the sealed case.

By contrast, on June 25 Judge Schofield in open court sentenced a defendant Jonathan Huertas who brandished a gun in a Manhattan restaurant to 15 months in prison. Then she asked the U.S. Marshals to give Huertas time to say goodbye to his family and friends, his step-children and their mother, expecting his baby the next day, his lawyer Christopher Booth said.

  Huertas was initially sentenced to 32 months in prison for his role in an oxycodon conspiracy surrounding a clinic on Southern Boulevard in The Bronx, Astramed. That sentencing memo, headlined by then U.S. Attorney Preet Bharara and still Assistant U.S. Attorney Edward B. Diskant, asked for 87 to 108 months.

   Since Huertas' release, according to Diskant's June 22 letter, he robbed a store while saying he had a gun. The charge was dropped after he told Probation that the target owed him $3,900.

  Then on January 1, 2019, Diskant's letter says, Huertas brandished a black firearm in a restaurant in Upper Manhattan. Judge Schofield said she had seen the video (while her June 17 sentencing was, to the public and Press, unseen).

  For this, Diskant and the current U.S. Attorney Geoffrey S. Berman asked for a sentence of 24 months. Booth complained that Probation had only just informed him they were raising their recommendation from four to nine months. Schofield, after thanking those in the gallery which can sometimes be turned away from, settled on 15 months.

Earlier on June 25 Judge Schofield held a change of counsel proceeding in which she told defendent Carlos Rondon Moreno that while she would agree to change his lawyer once, from Federal Defender Jonathan Marvinny to a CJA lawyer, there would be no second change, no matter what. Rondon Moreno is charged with alien smuggling, and his pretrial motions were due on June 24. Now it's pushed back into August. But was least the case is public.

Back on June 17 Judge Schofield said she was going to seal the transcript, but that once this reporter walked into her open courtroom 1106 in 40 Foley Square, she moved the entire proceeding into her robing room, closed to the Press and public.

 Now on June 18 Inner City Press has requested the name and number of the case, and that all portions that do not need to be redacted or sealed be provided or placed in the docket, citing in support this its requests: sentencing proceedings are presumptively open in the Second Circuit.  See United States v. Alcantara, 396 F.3d 189, 196 (2d Cir. 2005) ("There is little doubt that the First Amendment right of access extends to sentencing proceedings."). 

Before closing a proceeding to which the First Amendment right of access attaches, the judge should make specific, on the record findings demonstrate that closure is essential to preserve higher values and is narrowly tailored to serve that interest.  See United States v. Haller, 837 F.2d 84, 87 (2d Cir. 1988). United States v. Cojab specifically dealt with hearings (in that case, a pretrial hearing) conducted in the robing room. 

 Inner City Press is pursuing this because it is a precedent and trend. On June 18 affable SDNY Magistrate Judge Sarah Netburn declared a proceeding in Courtroom 5A sealed with "delayed docketing;" in her two days in the Magistrates Court this week not a single filing has been made available on PACER. There's more - watch this site.

On June 17 when Judge Schofield, her Courtroom Deputy James Street and the shackled defendant, Assistant US Attorneys and US Marshals emerged twenty minutes later, Judge Schofield said only, "We're adjourned." There was no disclosure of the outcome of the proceeding - as Inner City Press walked in, the defendant's lawyer was asking for time served."

Then Judge Schofield said she wanted to "shake hands with our visitors" and proceeded to do just that with the two other people in the gallery. Inner City Press left.

  No one where on the electronic board in the SDNY lobby at 500 Pearl Street was any proceeding before Judge Schofield at that time list. Nor in the day's PACER calendar.

  So it is both a confidential sentencing, and a confidential case?

Judge Schofield's Rules for Criminal Cases, ironically, provide that there is a presumption that all sentencing submissions are public, and that if anything is redacted only those pages with redactions can be withheld from the public docket.

  But no such distinction is possible when an entire proceeding is moved into the judge's robing room barred to the press and public, with no notice or opportunity to be heard. Inner City Press will have more on this - see also @InnerCityPress and the new @SDNYLIVE.

   Before Judge Schofield: Steven M. Calk of FDIC-regulated Federal Savings Bank was presented and arraigned on May 23 for financial institution bribery for corruptly using his position with FSB to issue $16 million in high-risk loans to Paul Manafort in a bid to obtain a senior position with the Trump administration, namely Undersecretary of the Army.

  Back on May 23 Magistrate Judge Debra Freeman accepted the government's proposal of $5 million bond with no co-signer (although that is usually required for moral suasion) and travel allowed throughout the United States (though more defendants are usually confined to the Soutern and Eastern District of NY and one other district). Money talks.

  Afterward in front of the SDNY courthouse Inner City Press asked Calk's lawyers Daniel Stein and Jeremy Margoles about Manafort saying he had misstated his financial situation to get the FSB loans. When did Calk know? They did not answer. Video here, Facebook video here.  Inner City Press' Alamy photos here.

  Now in May 28 letter to District Judge Lorna G. Schofield, the government has requested the motions directed of their indictment of Calk be filed by July 12. Judge Schofield granted it only in part, saying that by June 21 Calk "shall file a pre-motion letter with a briefing description of any motion(s) he intends to file." While the OCC has yet to sufficiently answer, and is trying to hinder Inner City Press' reporting, we will stay on this case.

  On May 23, still from the SDNY courthouse covering other cases including one involving the death penalty, Inner City Press reported finding no U.S. Home Mortgage Disclosure Act data for "Federal Savings Bank." But there's more.

The Federal Savings Bank's website, while providing a generic link to the FDIC, and a statement "Member FDIC," has no link for the U.S. Community Reinvestment Act. (Nor does it mention the indictment of Stephen Calk, simply listing his brother John Calk now as CEO and Vice Chairman. Who is the chairman?)

  It lists a loan production office on Avenue J in Brooklyn, and two deposit taking braches in Illinois. Did it see some exemption from the CRA and other consumer protection laws? From fair lending laws?

  Earlier on the morning of May 24 Inner City Press asked the FDIC, "Having covered yesterday's arraignment of the Chairman of The Federal Savings Bank in the SDNY courthouse, including the FDIC's involvement, I checked the bank's website and found "Member FDIC" but no mention of the Community Reinvestment Act."

  The FDIC's spokesperson David Barr, to his credit, responded quickly, writing to Inner City Press: "The Federal Savings Bank, Chicago, is regulated by the Office of the Comptroller of the Currency. They would be responsible for CRA and regulatory oversight. You should contact the OCC for more information."

  Now the OCC under Comptroller Joseph Otting has done everything possible to block the release of information, denying FOIA fees waivers and expedited treatment, refusing comments. But for now online the OCC has said this about The Federal Savings Bank: "While TFSB originated a substantial majority of its loans outside of its AAs; the bank’s business strategy is to operate as a mortgage banking entity with a nationwide presence and market place. Taking the bank’s business strategy into consideration the bank’s performance under this lending criterion is deemed reasonable." Reasonable? Bribery, too, seems to have been part of its business strategy, right under the nose of the OCC of Otting.

  Before 2 pm on May 24 Inner City Press in writing asked Otting's OCC: "This is a Press question for the OCC, from Inner City Press... Please confirm that The Federal Savings Bank is subject to HMDA, and/or if it is below a threshold, as I can find no data in its name on FFIEC.gov. Also, please today provide as an OCC response to the Press this OCC-regulated bank's CRA public file and other information in the OCC's possession concerning the bank's CRA and fair lending performance.   Is it normal for a bank not to mention these things on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC?     Please explain what steps the OCC is taking beyond Stephen Calk no longer being the CEO. What about his brother?"

  More than three hours later, even to the questions at the end, the OCC had only provided this:   "We are reviewing your questions, but we may not be able to respond by your deadline.     Regards,  Stephanie        Stephanie Collins  Manager, Media Relations  Public Affairs Operations  Office of the Comptroller of the Currency." This is the same OCC which has delayed FOR MONTHS providing basic information about a merger it has now already rubber stamped.

  On the morning of May 28 Inner City Press received from the OCC a statement that The Federal Savings Banks is subject to HMDA - how they are listed in the HMDA database remains a question - and this: "Question:  Is it normal for a bank not to mention these things [CRA and HMDA] on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC?  [OCC answer:] This question is best directed to the bank."

  So wait: Otting's OCC leaves it entirely up to the banks it ostensibly regulates whether to mention on their website and presumably branches CRA, HMDA or even the OCC where consumers could complain? We'll have more on this.

  Stephen Calk was quoted, at least in 2012, opposing regulation: "As Mr. Stephen Calk writes in the September 7, 2012 edition of Origination News: “Basel III is designed to level the playing field among major banking institutions that operate internationally. Force-feeding these same rules to community banks in the United States is unnecessary and in fact counter-productive, particularly in the current economic environment.” Basel III is one thing. But no Community Reinvestment Act?

The Federal Savings Bank lists locations - and bankers - in       Arizona - Scottsdale California - Irvine Colorado - Fort Collins Delaware - Selbyville Florida - Sarasota Illinois - Chicago Illinois - Lake Forest Illinois - Oak Brook Illinois - Park Ridge Indiana - Bloomington Indiana - Indianapolis Kansas - Overland Park Louisiana - Laplace Maryland - Annapolis Maryland - Timonium CD Massachusetts - Lawrence New Jersey - Hackensack New Jersey - Lakewood New York - Brooklyn New York - Melville New York - New York New York - Queens North Carolina - Raleigh Ohio - Columbus Rhode Island - South Kingstown Tennessee - Nashville Virginia - Alexandria Virginia - Fredericksburg Virginia - Newport News Virginia - Richmond Virginia - Vienna Virginia - Warrenton...  We'll have more on this.

  In the indictment press release, FDIC OIG Special Agent-in-Charge Patricia Tarasca said, “Today’s indictment charges Stephen Calk with misusing his position as Chairman and CEO of a bank for his own personal gain.  The FDIC Office of Inspector General remains committed to investigating cases where bank officials cause multimillion-dollar losses to a financial institution and undermine its integrity.” (The FDIC stands to be the lead regulator of BB&T whose money laundering enforcement action was just terminated by the Federal Reserve to facilitate merger with Suntrust, click here for that and Inner City Press' FOIA request and appeal.)

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