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Fast Guilty Verdict on Blakstad Illumina Insider Trading After Rare Waiver of 5th Amendment

By Matthew Russell Lee, Patreon  Podcast
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, June 28 – The insider trading trial of Donald Blakstad is ongoing in the U.S. District Court for the Southern District of New York, but the transcript of cooperator Martha Bustos' guilty plea is still sealed, as as she testifies, it emerged on June 16, see below.

Now on June 28, after less than two hours of deliberation, the jury found Blakstad guilty on all counts. Inner City Press live tweeted it here (and podcast here)

Judge Ramos: We received your note there is a verdict. Ms. Rivera, will you please now take the verdict?  "Guilty. Guilty. Guilty. Guilty. Guilty. Guilty. Guilty. Guilty. Guilty. Guilty."

Judge Ramos: Juror Number 1, is this your verdict? Yes.  And so forth. [This was fast]

Blakstad's (second) lawyer: We'd like post trial motion due on day of sentencing. AUSA: That's too late.

Judge Ramos: In two months, August 28.  AUSA: We want electronic monitoring with home confinement.

 AUSA: Blakstad faces 10 years minimum guideline, also perjury from the witness stand. And he's still apparently seeking financing for energy projects.

Judge Ramos: I'm not going to change the conditions of release.  We are adjourned.

See you at sentencing.

  On June 17 in the trial, the trades including of call options in Illumina by Sapphire Bay, Sutton View Equity Partners and even Mid-Continental Petroleum, Inc. of Las Vegas, Nevada were detailed, as to timing and amount, from the glassed-in witness box. The accented witness explained for the jurors being "out of the money" versus "deep in the money."

On June 22, the US Attorney's Office filed a letter opposing the introduction of DX-AG, which without submitting it described as a 97 page exhibit with "billing records issued by at least five separate law firms, including a law firm related in Israel." It said one "legal bill reflected the matter name 'Magic Jack' 'for legal services rendered, without describing what 'Magic Jack' is."

On June 25, closing arguments began but did not finish before the 2:30 pm cut-off. Inner City Press live tweeted it, here and below.

 On the morning of June 28, the defense and then the prosecution finished their summations, and the jury got the case. Inner City Press live tweeted it, here:

Blakstad's lawyer: You are the judges of fact. The case of yours. You must use reason and common sense. Consider if Ms. Bustos was so drunk that nothing she says can be taken as the truth? Or was it made up?

Blakstad's lawyer: If you find a witness testified falsely as to any material fact, you are free to reject their entire testimony. (Pause). She colored her testimony. Her aunt was in the hospital with cancer but Blakstad was still calling her for information.

 Blakstad's lawyer: Bustos quotes Blakstad saying he didn't call her because he was "on a date with a cute lady, I hit a home run." 7/16/2017, one week before the death of her aunt, though, she is reaching out to Blakstad to have dinner with her to give him info

 Blakstad's lawyer: Bustos quotes Blakstad, I hooked up with her, she's 23, 5 foot 8 [etc]. I suggest to you that was calculated to make Mr. Blakstad appear to be a callous, calculating person

 Blakstad's lawyer quotes Bustos, I hate my job, I have to smoke pot to go to work. He also questioned, Where are the receipts for the $12,000? Not even any dentist bills, the claims use of some of the funds. [Will this work?]

 Blakstad's lawyer: So what does this all prove? It proves that the government can make colored charts... I ask you to look into his soul and find him not guilty. Judge Ramos declares a break before government rebuttal summation. Thread will continue.

During the break with jury out, Judge Ramos asks Blakstad if he consents to lead counsel Eugene Iredale not sticking around for jury deliberations, to answer any jury notes. He does. [Q: Is he the Thurgood Marshall of insider traders, on to the next case?]

AUSA in rebuttal: Isn't it ironic that the defense is calling Martha Bustos a liar? When it was the defendant that took the stand and lied? Look at his demeanor: evasive, wouldn't answer basic questions.

 AUSA closed with request for guilty findings. Judge Ramos now delivering final instructions to jurors. "Only when all jurors are present do you constitute a jury."

Judge Ramos: You may now retired to deliberate on the case.  Jury leaves

From June 25: AUSA: Blakstad went out for $7000 dinners, with money stolen from investors. There are receipts. Blakstad cannot deny it happened... Remember Blakstad traded on August 1, 2017 and met Patty Bustos after and he handed over cash? 3 cash withdrawals, 5, 6 and 7 thousand

AUSA: [NFL player Corey] Liuget hasn't gotten his money back to this day [$150,000]

Now Blakstad's defense lawyer. "The prosecution's closing was good. But it was not fair." China has a Constitution that looks good on paper. The problem with this case is that the prosecution came into the case with a template.

Blakstad's counsel: They walk about CC-4, excuse me for using this jargon. It's Co-Conspirator Number 4, whom they say is Cipriani. [It's 2:15 now, & Judge Ramos has said there's a hard-stop at 2:30. So US Attorney's Office final argument will be after the weekend

 Blakstad's lawyer hits 2:30 pm cutoff slamming prosecutors paying witness Hinton, and essentially telling him what to say. Multiple uses of the word "lie." Judge Ramos: OK, we're done for the day.

    Back on June 16, Bustos was on the witness stand for the second day, now facing cross examination including quotes from her plea allocution before SDNY Chief Magistrate Judge Gabriel W. Gorenstein.  

 Inner City Press, live tweeting the cross examination here and below, went into the docket of Bustos' case, 19-cr-482.

But there things ended on February 28, 2021 with a deleted document; previously there was an order "placing this matter under seal /delayed docketing."  

  Delayed for how long? It is no long a secret that Bustos is a cooperator. The last substantive entry in her docket is the waiver of indictment, now on Patreon here. It has it was subject to delayed docketing, but we have it. So where are the documents after that? We'll have more on this.

Here was some of the thread: now in insider trading trial of US v. Donald Blakstad , government witness Martha Patricia Bustos formerly of Illumina is being cross examined. The question are about the trip to New York that the witness testified about yesterday.  On cross, she's being asked if she was hung-over. 

Q: Were you taken off the email distribution on this?  A: It was late 2018 I was taken off.

[From July 2019: "the unsealing of charges against MARTHA BUSTOS, a CPA formerly employed by Illumina, who pled guilty on June 28, 2019, and is cooperating with the Government.] 

 Q: Did you consider the internal mood to be confidential information? A: Yes.

 Q: You would ask Mr. Blakstad his opinion on whether you should sell you stock? A: Not that I recall specifically. Q: Did you ask Mr. Blakstad if you should quit your job there? A: Don told me, Don't quit, it's a really good company.

Q: You did discuss selling or buying Illumina stock in your chats, right? A: I may have.

Q: You talked about the price of the stock. In texts, like "I sold so much at $160," in 2018? A: I may have.

 Q: And he said he had sold at $200 a share earlier in the year? 

Q: Ms. Bustos, you pled to conspiracy? Bustos: Yes. 

Q: With an overt act in October 2016, receiving inside information? Bustos: I don't recall. Q: In your plea you admitted to being part of a conspiracy, right? Bustos: I don't recall. 

Q: What about CC-1 and CC-2? You did not look at the mention of other persons? Bustos: I know there were other people involved. 

Q: Let me discuss with you the entry of your guilty plea, in open court, before Magistrate Gorenstein. You were asked questions... 

Q: You said you received a trip to New York, right? Bustos: That I received gifts and entertainment. 

Then Inner City Press went to read the transcript Bustos is being asked about -- and in her case, it is still sealed. 

The US Attorney after the verdict chimed in that "following a two-week trial presided over by U.S. District Judge Edgardo Ramos, and approximately one hour of deliberations, DONALD BLAKSTAD, the owner and principal of a California-based investment firm, was found guilty on all counts for committing insider trading and a securities offering fraud scheme.  BLAKSTAD’s offenses yielded more than $7 million in criminal profits. .. BLAKSTAD is scheduled to be sentenced before Judge Ramos, who presided over the trial, on October 28, 2021, at 11:00 a.m."

This case is US v. Blakstad, 19-cr-486 (Ramos)


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