“Ex-Congressman’s Insider Trading Sentencing Delayed Due to Last-Minute Notice of Conflict” —

• “U.S. District Judge Richard Berman of the Southern District of New York on Monday ordered a last-minute adjournment of former U.S. Rep. Stephen Buyer’s sentencing on insider trading charges, citing a potential conflict of interest issue that came to light in the days leading up to the scheduled proceeding.”
• “Berman said Buyer’s defense counsel, Orrick Herrington & Sutcliffe partner Henry Asbill, informed the court that Orrick also represents T-Mobile.”
• “Buyer, who was elected as an Indiana Republican and served from 1993 to 2011, was found guilty in March of insider trading in connection with the 2020 merger of Sprint and T-Mobile, along with a separate insider trader scheme involving the consultant firms Navigant and Guidehouse. He worked as a consultant for both T-Mobile and Guidehouse, according to his indictment.”
• “Assistant U.S. Attorney Kiersten Fletcher said Asbill represented that he was not aware of the potential conflict during Buyer’s trial.”
• “‘Mr. Asbill has represented that this was just brought to his attention in the last few days,’ Fletcher said.”
• “Asbill said attorneys at Orrick are working ‘as fast as we possibly can’ to sort out the issue and determine whether the conflict can be waived and whether negotiations ‘between us and Mr. Buyer or between us and T-Mobile’ will be required.”

“Judge Who Thought His Obvious Conflict Of Interest Wasn’t A Conflict Of Interest Told In No Uncertain Terms: Yea, It Was A Conflict of Interest” —

• “It has been a very long time since Alvin Hellerstein graduated from law school (67 years, to be precise), and it shows in at least one aspect of his jurisprudence: Conflicts of interests.”
• “As we’ve discussed, the aged Manhattan federal judge got more than his fair share of the voluminous proceedings emanating from ethically- and legally-challenged (albeit, on the latter, not quite as legally-challenged as prosecutors thought) hedge fund Platinum Partners.”
• “As it turns out, Hellerstein knew all about the Platinum mess, on account of the indictment and subsequent cooperation of his sort-of surrogate son, the hedge fund’s marketing chief, having advised the boy on his situation and options. None of that latter bit seemed to Hellerstein worth mentioning when first he landed the bribery trials of Platinum co-founder Murray Huberfeld and former New York City corrections union chief Norman Seabrook, and later the sentencing hearing for the literal leather bagman standing between the two, Jona Rechnitz.”
• “Seabrook was duly tried, convicted and sentenced to just a hair under five years in prison. In the meantime, Huberfeld pleaded guilty, with Hellerstein sending him up the river for five times as long as prosecutors asked. Finally, 10 months later, he got around to Rechnitz. In spite of prosecutors praising Rechnitz as ‘one of the single most important and prolific white collar cooperating witnesses’ and insisting he had no idea that Platinum was up to no good, ‘or even that it was a bad investment,’ Hellerstein rejected the Probation Office’s suggestion that Rechnitz pay only the $1.2 million the corrections’ and NYPD unions paid in management fees to Platinum and insisted on half the $19 million lost when Platinum eventually collapsed.”
• “Then Huberfeld found out about Hellerstein’s relationship to Andrew Kaplan, the ex-Platinum executive. Well-versed as he was in matters of facilitating them via bribery, that sounded an awful lot like a conflict of interest to Huberfeld.”
• “Meanwhile, Rechnitz got wind of Huberfeld’s reassignment, and decided he’d like a new judge, too. Just 16 days after decided not to resentence Huberfeld, however, Hellerstein said he saw no reason to hand off Rechnitz’s sentencing, even if he had given Kaplan a few pointers on how to negotiate with prosecutors and judges, and even if for unstated reasons he’d decided not to resentence Huberfeld. And even after Kaplan asked him to think it over a while, Hellerstein still said there wasn’t even the appearance of impartiality in Rechnitz’s restitution order, and what’s more he wasn’t allowed to appeal the matter to those nitpickers on the Second Circuit. And with good reason, ‘cuz when they heard about in spite of the lack of writ of mandamus, they were not pleased:
  • ‘We conclude that the district judge abused his discretion by not reassigning the case…. That relationship was not only remarkably close; it was with a person who was directly involved in Rechnitz’s bribery case. Kaplan was mentioned in Rechnitz’s testimony—both in the initial joint trial of Seabrook and Huberfeld and in the retrial of Seabrook before Judge Hellerstein—several times as one of the Platinum employees involved in securing the COBA investment. That relationship alone, in light of these factual circumstances, was sufficient to raise serious questions about the need for recusal.
  • ‘But the facts here are even more complicated. The district judge did not merely have a close personal relationship with Kaplan; he advised Kaplan on his criminal case arising out of the Platinum collapse…. This close relationship, and the district judge’s advisory role, is further problematic in light of the restitution question, because Kaplan and Rechnitz’s interests are plausibly adverse on that issue. COBA, of course, can recover its losses only once, even though two groups—those involved in the bribery scheme and those involved in the fraud—arguably caused them. It therefore remains uncertain from whom COBA will recover the $19 million it lost. Because Kaplan is a defendant in the Platinum case, it is possible that he will be ordered to pay restitution. There is thus a reasonable and apparent relationship between COBA’s recovery from Rechnitz, Seabrook, and Huberfeld (the defendants in the bribery case) and its possible recovery from the defendants in the Platinum case (including Kaplan): the more COBA recovers from the bribery defendants, the less it will need to recover from the Platinum defendants.'”