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Former President Juan Hernandez of Honduras Lookin’ at Extended Stay in US Jailhouse

Arrest warrant approved for ex-Honduras president Hernandez, wanted by U.S. on drug charges, as LIF continues to question the criminality of the Federal Judiciary in the US.

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Arrest warrant approved for ex-Honduras president Hernandez, wanted by U.S. on drug charges

Brother as well as former associate of Juan Orlando Hernandez have been convicted in trafficking cases

FEB 15, 2022 | REPUBLISHED BY LIT: MAR 10, 2022

Police arrested former Honduras President Juan Orlando Hernandez at his home Tuesday, a step toward fulfilling a request by the United States government for his extradition on drug trafficking and weapons charges.

The U.S. move came less than three weeks after Hernandez left office, a move that follows years of accusations about the Honduran leader’s alleged links to drug traffickers.

Hernandez exited his home flanked by police, shackled at the wrists and ankles, and wearing a bulletproof jacket. He got into a police vehicle and was driven away. A police helicopter that had been waiting nearby took flight, but appeared to just be escorting the caravan.

The Supreme Court of Justice designated a judge to handle the case and hours later the judge signed an order for Hernandez’s arrest, said court spokesman Melvin Duarte.

Honduran security forces surrounded Hernandez’s neighbourhood Monday night and on Tuesday the Supreme Court of Justice met to choose a judge to handle the extradition request.

Honduran Security Minister Ramon Sabillon, who was fired by Hernandez as head of the National Police in 2014, said Tuesday that Hernandez had conspired “with cartels to traffic [drugs] and corrupt many public institutions, which led to social deterioration and undermined the application of justice in Honduras.”

He said the main charges Hernandez faces in the U.S. were drug trafficking, using weapons for drug trafficking and conspiracy to use weapons in drug trafficking.

Two prosecutions in New York preceded extradition request.

Honduran criminal lawyer Marlon Duarte said that the extradition process against Hernandez, if it moves ahead, would take up to three months.

U.S. prosecutors in New York repeatedly implicated him in his brother’s 2019 drug trafficking trial, alleging that his political rise was fuelled by drug profits. That brother, Juan Antonio (Tony) Hernandez, was sentenced to life in prison on drug and weapons charges in March 2021.

He had also been named as a co-conspirator by New York prosecutors in the sentencing of Honduran Geovanny Fuentes in a drug trafficking case.

Nicole Navas, a spokesperson for the U.S. Department of Justice, declined comment about the U.S. extradition request.

Hernandez released an audio recording via Twitter early Tuesday saying he was “ready and prepared to co-operate and go voluntarily … to face this situation and defend myself” if an arrest order was issued.

The Supreme Court’s president, Rolando Argueta, is known to be close to Hernandez. All of the justices were selected to the court by the Congress in 2016, during Hernandez’s first presidential term. They serve seven-year terms.

The majority come from his National Party.

It was a long-awaited fall for a leader reviled in his home country, who enjoyed support from the Donald Trump administration but had been kept at arm’s length by Joe Biden’s White House, which is targeting Central America’s endemic corruption as a root cause of migration.

Last year, U.S. Sen. Patrick Leahy was one of a dozen senators who supported a bill that sought to isolate Hernandez by imposing sanctions on him.

He welcomed the arrest and appeared to take a shot at the Trump administration in a statement.

“Throughout the past eight years of decay, depravity, and impunity, successive U.S. administrations sullied our reputation by treating Hernandez as a friend and partner,” Leahy said. “By making excuse after excuse for a government that had no legitimacy and that functioned as a criminal enterprise, U.S. officials lost sight of what we stand for and that our real partners are the Honduran people.”

Hernandez left office on Jan. 27 with the swearing in of President Xiomara Castro. The same day he was sworn in as Honduras’s representative to the Central American Parliament.

His lawyer, Hermes Ramirez, told local media his client had immunity as a member of the regional parliament and said government forces were not following proper procedures.

Various contingents of the National Police, including special forces, as well as military police were present around Hernandez’s neighbourhood Monday night. Barriers at all of the entrances kept out media and even residents.

Members of the security forces entered the area with weapons, wearing balaclavas and with handcuffs dangling from their ballistic vests. Some neighbors said the house had been dark and they believe unoccupied.

Around midnight Monday, 56-year-old Jorge Arturo Vega, a supporter of President Castro’s Liberty and Refoundation party, stood outside a police barricade at Hernandez’s neighborhood, celebrating.

“This is a party we’ve been waiting a long time for,” Vega said, thinking back over the dozen years since Hernandez came up in the congress.

“We couldn’t stand this drug trafficker, criminal, killer in the presidential house any longer.”

US asks Honduras to arrest, extradite ex-President Hernández

FEB 14, 2022 | REPUBLISHED BY LIT: MAR 10, 2022

TEGUCIGALPA, Honduras (AP) — The United States has asked Honduras to arrest former President Juan Orlando Hernández for his eventual extradition to the U.S., officials confirmed Monday.

National Police and soldiers surrounded the neighborhood around Hernández’s home Monday night.

Honduras’ foreign affairs ministry initially said via Twitter that it had notified the country’s Supreme Court of Justice that the U.S. Embassy had formally requested the arrest of a Honduran politician for the purposes of extradition.

The ministry did not identify the politician. But Honduras’ current vice president, Salvador Nasralla, confirmed to The Associated Press that the request names Hernández.

Later, the president of the Supreme Court of Justice called an urgent session of the full court for Tuesday morning to choose a judge to consider the extradition request from the United States.

Nicole Navas, a spokeswoman for the U.S. Department of Justice, declined to comment. The U.S. State Department referred requests for comment to the Justice Department.

CNN en Español first reported that the politician was Hernández, showing the communication from the ministry to the court naming Hernández.

Hernández’s attorney, Hermes Ramírez, accused authorities of being unfair to the former president. He said Hernández was inside the Tegucigalpa residence.

“At this time the secretary of security is violating the rule of law by wanting to execute an arrest order violating the procedure that is established by law,” the lawyer told local media. “We leave clear the abuse that my client ex-President Juan Orlando Hernández is the subject of.”

Various contingents of the National Police, including special forces, as well as military police were present around Hernández’s neighborhood Monday night. Barriers were set up at all of the entrances to keep the press and even residents out.

Members of the security forces entered the area with weapons, wearing balaclavas and with handcuffs dangling from their ballistic vests. Some neighbors said the house had been dark and they believe unoccupied.

Supporters of new President Xiomara Castro arrived as well, waving flags from her party and celebrating.

Over the weekend, Hernández had posted photographs of himself playing with his dogs in an apparent attempt to knock down rumors that he had fled the country.

Hernández left office Jan. 27 with the swearing in of Castro. The same day he was sworn in as Honduras’ representative to the Central American Parliament.

Ramírez said Monday night that Hernández had immunity because of his position in the regional parliament and insisted that he had a right to a presumption of innocence.

With a weak and co-opted Honduran justice system, Hondurans’ hope for justice had rested for years with U.S. federal prosecutors in New York, where a string of revelations against Hernández was closely followed back home.

Speculation had swirled for months over whether Hernández would be charged once he was no longer president, because U.S. prosecutors in New York repeatedly implicated him in his brother’s 2019 drug trafficking trial, alleging that his political rise was fueled by drug profits.

Hernández strongly denied any such activities.

The brother, Juan Antonio “Tony” Hernández, himself a former Honduran congressman, was sentenced to life in prison on drug and weapons charges in March 2021. At his sentencing, Assistant U.S. Attorney Matthew Laroche characterized the crimes as “state-sponsored drug trafficking.”

In an audio recording sent to his staff that day, the then president said his brother’s conviction “is hard for the family, hard for me personally.”

“I find it outrageous; I find it unbelievable that false testimony by confessed killers could have been heard and given weight in this way,” he continued, citing Honduras’ progress in reducing violence as evidence of his stance against organized crime.

U.S. prosecutors said Tony Hernández brokered large bribes from drug traffickers to his brother in exchange for protecting their shipments through Honduras. In some cases, members of the National Police and military escorted drug shipments, prosecutors said.

They said Juan Orlando Hernández received bribes while still a member of Honduras’ congress and directed bribes to other lawmakers so they would support him as the body’s president.

Hernández has long said that the accusations against him come from drug traffickers, who in some cases he extradited and who are now seeking revenge. He has denied any involvement with drug traffickers.

Hernández became president of the congress in early 2010. By 2013, he was campaigning to be Honduras’ president and allegedly solicited $1.6 million from a drug trafficker to support his campaign and those of other politicians in the National Party, according to U.S. authorities.

Tony Hernández also received $1 million from Mexican kingpin Joaquin “El Chapo” Guzmán to support his brother’s presidential campaign, prosecutors said. They said Tony Hernández had promised the Sinaloa cartel leader that if his brother won the presidency, they could protect Guzmán’s drug shipments through Honduras.

Juan Orlando Hernández took office Jan. 27, 2014. U.S. authorities allege he continued receiving drug profits while in office in exchange for allowing drugs to move through Honduras.

Hernández was also named as a “co-conspirator” in the case of convicted drug trafficker Geovanny Fuentes Ramírez. Witnesses in the two-week trial shortly before Tony Hernández’s sentencing told of Hernández accepting bribes from Fuentes Ramírez and other drug traffickers from his time as a presidential candidate up through at least 2019.

Hernández used a friendly Supreme Court to overcome Honduras’ constitutional ban on re-election and won a second term in 2017 in elections marred by irregularities.

He was a deeply unpopular president at a time that saw tens of thousands of Hondurans flee the country due to a lack of economic opportunity, street gang violence and natural disasters.

Hernández worked to curry favor with the Trump administration, which was focused largely on slowing immigration. The Trump administration was quick to recognize Hernández’s re-election victory in the disputed election. When accusations against Hernández emerged from trials in New York, Hernández would often use photo ops with U.S. officials to show that he had nothing to hide.

The Biden administration, however, worked to keep Hernández at arm’s length, frequently repeating that corruption was one of the root causes of migration in the region.

Hernández has focused his defense largely on his record of extraditing drug traffickers to the United States and Honduran security forces’ cooperation with U.S. authorities intercepting drug shipments.

Honduras changed its constitution in 2012 — while Hernández was president of the congress — to allow the extradition of Hondurans facing drug trafficking charges. And drug traffickers were extradited under Hernández. However, the U.S. government has complained that Honduras in recent years had not extradited others, including some alleged co-conspirators of Tony Hernández.

Last week, the U.S. State Department said it had quietly placed Hernández on a list of Central American officials suspected of corruption or undermining democracy last year.

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Bankers

When the World’s Bankers and Governments Are Behavin’ Like Thieves and Criminals, It Really Is Time to Object, Vociferously

The appalling greed and corruption is playing out live since 2008 and without any accountability to the people. One Percenters are completely immune and laughing At You.

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Ukrainian who made appearance in Trump impeachment saga accused by U.S. of stealing, laundering billions

AUG 6, 2020 | REPUBLISHED BY LIT: MAY 17, 2022

The Justice Department on Thursday accused a Ukrainian oligarch who has been considered an ally of Ukraine’s president of stealing billions of dollars from a bank he once owned, then using a vast array of companies to launder that money in the United States and all over the world.

In a civil forfeiture complaint seeking to seize commercial properties in Kentucky and Texas, the Justice Department alleged that Ihor Kolomoisky and his business partner, Gennadiy Boholiubov, stole so much from PrivatBank that Ukraine’s national bank had to give the institution a $5.5 billion bailout “to stave off economic crisis for the whole country.”

Kolomoisky, one of Ukraine’s richest men, has ties to Ukrainian President Volodymyr Zelensky, and he played a role in the events that led to President Trump’s impeachment last year. He made a fortune in the rough-and-tumble capitalism that swept Ukraine after the Soviet Union’s collapse, amassing assets including airlines and financial institutions, and created a larger-than-life image for himself, going by the nickname “Benya,” and keeping a shark aquarium in his office.

Kolomoisky and Boholiubov were the two major owners of PrivatBank before it was nationalized in response to the fraud, the Justice Department said, and the men basically used it as a personal account to build a business empire in the United States. They requested money from PrivatBank — which they always received because they were owners — then moved the funds through a network of companies to “thoroughly disguise their nature, source, ownership, and control,” the Justice Department alleged.

Experts have expressed increasing concern that U.S. real estate — including factories and facilities important to American industry — has become a magnet for foreign money, including proceeds of criminal activities abroad. Among Kolomoisky’s and Boholiubov’s purchases were more than 5 million square feet of commercial real estate in Ohio; steel plants in Kentucky, West Virginia and Michigan; a cellphone manufacturing plant in Illinois; and commercial real estate in Texas, the Justice Department alleged. The forfeiture complaints sought to seize a roughly 19.5-acre office park in Dallas and the PNC Plaza building in Louisville.

Michael J. Sullivan, a lawyer for Kolomoisky, said in an email: “Mr. Kolomoisky emphatically denies the allegations in the complaints filed by the Department of Justice.” The allegations, which are not criminal charges, are similar to those in a lawsuit filed by the bank in a Delaware court. A lawyer for Boholiubov did not reply to an email seeking comment.

In a statement written in Russian, Kolomoisky said all the money used to purchase the U.S. properties was his own, received through a deal made with a mining company in 2007 and 2008 and from other businesses that banked with Privatbank.

Kolomoisky also has long been facing a criminal probe by the U.S. attorney’s office in Cleveland for possible money laundering. As a part of that case, the FBI raided the office of Optima Management Group in downtown Cleveland on Tuesday, as well as an Optima office in the Southeast Financial Center building in Miami.

In court documents, the Justice Department alleged Thursday that two Miami-based business associates of Kolomoisky and Boholiubov’s — Mordechai Korf and Uriel Laber — helped acquire and manage the oligarchs’ holdings in the United States, which often bear some version of the name “Optima.” Optima Ventures at one point became the “largest holder of commercial real estate in Cleveland,” using stolen funds to buy major downtown office buildings and a hotel, the Justice Department alleged.

Last year, Marc Kasowitz, a New York lawyer who also represents Trump, signed on to represent Kolomoisky and Boholiubov in the Delaware case. He did not immediately respond to a request for comment Thursday.

Under Ukraine’s last president, Petro Poroshenko, the government nationalized Privatbank, alleging that Kolomoisky and one of his business partners had defrauded the bank of billions of dollars. Kolomoisky denied those charges but decamped from Kyiv to Israel, where he also holds citizenship. He retained political power in Ukraine through his business holdings, which include a major Ukrainian television station.

Kolomoisky is seen as an ally to Zelensky, who was an actor before his election, starring in a comedy show that aired on Kolomoisky’s network. Zelensky’s election was widely seen as a boon for Kolomoisky, particularly after the new president made Kolomoisky’s personal lawyer the head of his administration. Some in the United States were suspicious of Zelensky’s ties to the mogul, thinking the connection ran counter to Zelensky’s promises to pursue an anti-corruption and reformist agenda.

Since then, however, Zelensky has not supported returning control of Privatbank to the oligarch, and he fired that top aide. Still, Kolomoisky has been comfortable enough with Ukraine’s current leadership that he returned from a self-imposed exile in Tel Aviv and is again based in Kyiv, where he maintains connections to members of the presidential administration.

In spring 2019, when Trump’s personal attorney Rudolph W. Giuliani embarked on a mission to press Zelensky to assist Trump by opening politically charged investigations into former vice president Joe Biden and his son, Giuliani’s associates met with Kolomoisky to request that Giuliani get a sit-down with the rising Ukrainian politician.

Giuliani associates Lev Parnas and Igor Fruman met with Kolomoisky in April 2019 in Tel Aviv, and, by all accounts, the meeting did not go well.

Giuliani associates claimed to have sway with both foreign billionaires and Trump administration officials

After the meeting, the two ­Florida-based business executives accused Kolomoisky of physically threatening them and filed a lawsuit against him in Ukraine. Parnas and Fruman, who assisted Giuliani in his Ukraine project, were charged in the United States with campaign finance violations last year. They have denied any wrongdoing.

Giuliani has said he provided legal advice to Parnas and Fruman in their fight against Kolomoisky. He also tweeted repeatedly about his displeasure with Kolomoisky in May 2019 just as he was pressuring Zelensky to assist Trump with a Biden investigation. At one point, Giuliani complained that Zelensky was being advised by “Kolomoisky’s representatives and enemies of President Trump.”

Meanwhile, a lawyer for Kolomoisky has told The Post that during the Tel Aviv meeting, Parnas and Fruman claimed that they could get top U.S. officials, including Vice President Pence and then-Energy Secretary Rick Perry, to travel to Ukraine around the time of Zelensky’s May 2019 inauguration — if Kolomoisky paid them several hundred thousand dollars. Kolomoisky did not pay the money, instead throwing the two men out of his office, his lawyer has said.

The attorney, Bruce Marks, told The Post that Kolomoisky had predicted to friends at the time: “This is going to end up in a bad scandal.”

Ukraine arrests ex-PrivatBank official as U.S. prioritizes criminal probe of former owners

FEB 26, 2021 | REPUBLISHED BY LIT: MAY 17, 2022

The National Anticorruption Bureau of Ukraine (NABU) has arrested the former deputy chairman of a Ukrainian bank at the heart of an FBI criminal investigation as he attempted to fly abroad in the latest sign Kyiv is taking steps to tackle corruption and lawlessness.

Volodymyr Yatsenko was detained at Boryspil Airport in Kyiv on February 22 after investigators forced the pilot of the private jet he was traveling on to land, the bureau announced in a tweet.

Mr. Yatsenko, who was on his way to Vienna after reportedly being tipped off about his arrest, was charged with the embezzlement of funds at PrivatBank, once the nation’s largest lender.

More arrests of management could follow, the Kyiv Post reported.

The FBI is investigating the two owners of PrivatBank – Ihor Kolomoisky and Gennadiy Boholiubov – in connection with accusations that more than $5 billion was stolen from the lender through fraudulent loans and that the money was then laundered.

In a move that made international headlines, Ukraine was forced to nationalize PrivatBank in 2016 and pump more than $5 billion into the lender in order to stave off its bankruptcy.

The U.S. accuses Messrs. Kolomoisky and Boholiubov of using some of the laundered proceeds to buy assets in the U. S., ranging from metals companies to commercial properties, with the help of two American associates based in Miami.

The Justice Department last year filed three civil forfeiture lawsuits in a Florida court against a U.S. real estate holding controlled by the two tycoons and run by the associates.

However, a judge agreed last week with a Justice Department request to temporarily suspend the civil forfeiture proceedings amid concerns it could harm the criminal investigation against the Ukrainian businessmen and their two American partners.

“Allowing [the tycoons] to conduct discovery would expose the identities of witnesses who have provided and will provide information and testimony in both the civil forfeiture actions and the criminal investigation,” the Justice Department said in its February 19 filing.

“If that occurs, the confidential informants may cease providing information, and, to the extent they are not reachable through process in the United States, they may make themselves unavailable for future testimony. Potential sources of information who have not yet been interviewed by the government would likely be deterred from coming forward” the Justice Department said in its filing.

The tycoons deny the accusations and neither Ukraine nor the United States has filed criminal charges against them.

Mr. Kolomoisky is one of the most influential tycoons in Ukraine and the U.S. government’s investigation into his activities is being closely followed.

The billionaire owns key media, energy, and metals assets and is believed to have outsized influence over the administration of President Volodymyr Zelenskyy.

Mr. Kolomoisky’s TV stations backed Mr. Zelenskyy’s successful presidential bid.

The U.S., one of Ukraine’s biggest backers financially and militarily, has repeatedly expressed concern about oligarchic influence over the nation’s government and economy.

Washington has also complained about the lack of investigations into corrupt tycoons and officials and has tied some aid to improvements in judicial reform.

The arrest of Mr. Yatsenko, who was flying on a private plane owned by Mr. Kolomoisky, is the latest in a series of moves by Kyiv to tackle cases that resonate with the U.S.

Mr. Zelenskyy last week approved sanctions on Viktor Medvedchuk, a tycoon and lawmaker with close ties to Russian President Vladimir Putin. Mr. Medvedchuk was sanctioned by the U.S. in 2014 for undermining democracy in Ukraine.

On February 2, Mr. Zelenskyy sanctioned three television stations believed to be owned by Mr. Medvedchuk. In late January he announced an investigation into Ukrainian individuals accused of interfering in the 2020 U.S. presidential elections.

The moves come after President Joe Biden was inaugurated on January 20. Mr. Biden knows Ukraine well, having served as the point man to Kyiv while serving as vice president from 2009 to 2017.

Political analysts say Mr. Zelenskyy is seeking to win over the Biden administration after a difficult relationship with the Trump administration caused by the 2019 impeachment investigation.

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Bankers

In 2008 Two Ukrainians Would Plan to Steal over $5.5B from their Private Bank and Launder Wads Via Miami

The DOJ Press Release combined with the 11th Cir. opinion and district court cases in Southern Fl. are well worth the read if you want to learn about power, politics, corruption to avoid jail.

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United States Files Civil Forfeiture Complaint for Proceeds of Alleged Fraud and Theft from PrivatBank in Ukraine

JAN 20, 2022 | REPUBLISHED BY LIT: MAY 17, 2022

The United States filed a civil forfeiture complaint today in the U.S. District Court for the Southern District of Florida alleging that more than $6 million in proceeds from the sale of commercial real estate in Dallas, Texas, which property was maintained and improved using the proceeds of embezzlement and fraud from PrivatBank in Ukraine, are subject to forfeiture based on violations of federal money laundering statutes.

This civil forfeiture action is the fourth such action filed in connection with the same alleged criminal activity.

In August 2020, the United States filed two actions in the Southern District of Florida alleging that commercial real estate in Dallas and Louisville, Kentucky, was acquired using funds illegally obtained from PrivatBank in Ukraine as part of a multibillion-dollar fraudulent loan scheme.

It filed a third suit in the same district in December 2020 alleging a property in Cleveland, Ohio, was similarly involved.

The four complaints allege that Ihor Kolomoisky and Gennadiy Boholiubov, who owned PrivatBank, one of the largest banks in Ukraine, embezzled and defrauded the bank of billions of dollars.

The two allegedly obtained fraudulent loans and lines of credit from approximately 2008 through 2016, when the scheme was uncovered and the bank was nationalized by the National Bank of Ukraine.

The complaints allege that they laundered a portion of the criminal proceeds using an array of shell companies’ bank accounts, primarily at PrivatBank’s Cyprus branch, before they transferred the funds to the United States.

As alleged in the complaints, Mordechai Korf and Uriel Laber, who were associates of Kolomoisky and Boholiubov operating out of offices in Miami, created a web of entities, usually under some variation of the name “Optima,” to further launder the misappropriated funds.

They purchased hundreds of millions of dollars in real estate and businesses across the country, including commercial towers located at 8787 North Stemmons Freeway in Dallas (Stemmons Towers), which are the subject of this action, as well as the office tower known as 55 Public Square in Cleveland, a Louisville office tower known as PNC Plaza, and a Dallas office park known as the former CompuCom Headquarters.

The newest action alleges that several of the Optima entities, including Optima Ventures LLC, Optima 7171 LLC and Optima Stemmons LLC, used profits from the CompuCom Campus, which had originally been purchased using embezzled funds from PrivatBank, to pay for the improvement and maintenance of Stemmons Towers.

Optima Stemmons then sold Stemmons Towers in 2019 using a seller financing agreement, under which more than $6 million in principal and interest is still owed to a specially-created entity owned by Optima Ventures named 87STE LLC.

The United States seeks to forfeit the promissory note and deed of trust related to that financing agreement, which includes the right to receive payments due pursuant to the deed and its associated sales contract.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Special Agent in Charge Eric B. Smith of the FBI’s Cleveland Field Office made the announcement.

FBI’s Cleveland Field Office is investigating the case with support from FBI’s International Corruption Unit and IRS Criminal Investigation.

Trial Attorneys Shai D. Bronshtein and Rachel Goldstein of the Kleptocracy Asset Recovery Initiative in the Criminal Division’s Money Laundering and Asset Recovery Section are handling these cases.

The Justice Department’s Office of International Affairs has provided substantial assistance in the investigation.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, who work to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.

In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov or https://tips.fbi.gov/.

A civil complaint is merely an allegation, and the government has the burden of establishing that assets are subject to forfeiture by a preponderance of the evidence.

Attachment(s):
Download PrivatBank Stemmons Complaint.pdf

Topic(s):
Financial Fraud
Component(s):
Criminal Division
Criminal – Money Laundering and Asset Recovery Section
Press Release Number:
22-47

United States v. The Promissory Note With a Principal Amount of $5.7 Million, Executed on December 19, 2019 by 8787 Ricchi, LLC, Payable to 87STE Lending LLC

(1:22-cv-20238)

District Court, S.D. Florida

 

Howard Milton Srebnick
Robert Tully Dunlap
Black Srebnick, P.A.
201 S Biscayne Blvd
Ste 1300
Miami, FL 33131

Shai Bronshtein
U.S. Department of Justice,
Criminal Division,
Money Laundering and Asset Recovery Section
1400 New York Ave., N.W.
Washington, DC 20005

In the United States Court of Appeals
For the Eleventh Circuit

[DO NOT PUBLISH – SURE!]

UNITED STATES OF AMERICA,
versus
REAL PROPERTY LOCATED AT 55 PUBLIC SQUARE, CLEVELAND, OHIO, URIEL LABER, et al.,

MAY 17, 2022 | REPUBLISHED BY LIT: MAY 17, 2022

Appeal from the United States District Court for the Southern District of Florida

D.C. Docket Nos. 1:20-cv-23278-MGC, 1:20-cv-25313-MGC

Before ROSENBAUM, JILL PRYOR, and GRANT, Circuit Judges.

PER CURIAM

This case arises out of an in rem civil-forfeiture action filed by the government against an office building in Cleveland, Ohio, allegedly bought as part of an international money-laundering scheme.

When the government filed its complaint, the building was under contract to be sold by the building’s owners (and alleged money-launderers) to an unaffiliated third party.

The government agreed to go forward with the sale while the forfeiture case proceeded, and it filed a motion requesting the court’s approval for an uncontested interlocutory sale under Rule G(7)(b) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture.

The court authorized the sale, which closed in February 2021, and the sale proceeds were substituted for the building as the res in the forfeiture proceeding.

Appellant Law Offices of Cleveland (“Cleveland Law”), a tenant at the office building and a claimant in the forfeiture case, timely appealed the interlocutory sale order, seeking to set aside the sale as “void” for lack of compliance with, in its view, necessary procedural requirements.

After careful review, we conclude that Cleveland Law was not harmed by and so lacks standing to appeal the sale order.

We therefore dismiss the appeal.

I.

In December 2020, the United States filed an in rem civil- forfeiture action against the building located at 55 Public Square in Cleveland, Ohio.

In essence, the complaint alleged that 55 Public Square was purchased as part of a scheme to launder hundreds of millions of dollars misappropriated from PrivatBank, a Ukrainian bank, by two Ukrainian oligarchs, Ihor Kolomoisky and Gennadiy Boholiubov.

The government filed two other forfeiture actions arising out of the same scheme.

Several individuals and businesses claimed an interest in 55 Public Square.

On January 19, 2021, four entities and persons allegedly involved in the money-laundering scheme filed claims:

Optima 55 Public Square LLC, the record owner of the building;

Optima Ventures LLC, which owned Optima 55 Public Square;

and

Mordechai Korf and Uriel Laber, who partially owned Optima Ventures (collectively, the Optima entities).

On January 26, 2021, Cleveland Law, a tenant at 55 Public Square that subleases office space to small law firms and solo practitioners, filed a claim asserting a leasehold interest in the property.

A few days later, several other claimants who had been in litigation against the Optima entities filed a joint claim.

On Tuesday, February 9, 2021, the district court held a status hearing, at which counsel for Cleveland Law was present.

At the hearing, counsel for the Optima entities stated that there was “an anticipated closing on the sale of [55 Public Square] scheduled for … this week,” and that the funds from the sale would be held pending the outcome of the litigation.

The court asked the government if it objected, and counsel for the government responded that it did not object and would soon file a motion to approve the sale.

At no point during the hearing did counsel for Cleveland Law raise an objection to the sale.

Later that same day, the government filed an “Agreed Mo- tion to Authorize Interlocutory Sale” under 18 U.S.C. § 981(a)(1) and Supplemental Rule G(7), with supporting documentary evidence.

In certain circumstances, Supplemental Rule G(7) permits the district court to authorize the sale of real property before the forfeiture case is resolved.

Supp. Rule G(7)(b).

Ordinarily, such a sale “is governed by 28 U.S.C. §[] 2001,” among other provisions, which requires notice, a hearing, and appraisals before the court may approve a private sale.

Supp. Rule G(7)(b)(iii); 28 U.S.C. § 2001(b).

But the court may use other procedures for the sale if “all parties . . . agree to the sale, aspects of the sale, or different procedures.”

Supp. Rule G(7)(b)(iii).

Once the sale closes, the “[s]ale proceeds are a substitute res subject to forfeiture in place of the property that was sold.”

Supp. Rule G(7)(b)(iv).

The government’s motion sought the district court’s approval to proceed with the sale under the terms of the private purchase agreement, and without regard to § 2001, by agreement of the parties.

The government’s evidence showed that, before the forfeiture action, Optima 55 Public Square had entered into a contract with KD 55 Public Square LLC to sell the office building for approximately $17 million.

At that time, the building was in foreclosure and subject to outstanding taxes and penalties.

The government agreed to the sale because the buyer had no affiliation with the Optima entities and, in its view, a “prompt sale [was] the only way to protect the value of the equity in the building.”

According to a copy of the purchase agreement submitted by the government, the sale included the transfer of all leases at 55 Public Square, including “any and all amendments, modifications or supplements.”

The buyer further agreed to “assume[] and . . .be bound by and to perform and observe all of the obligations, covenants, terms and conditions to be performed or observed under the Assigned Property.”

It appears, in other words, that the buyer assumed and agreed to be bound by all existing leases without alteration.

On February 10, 2021, one day after the government filed its motion, Cleveland Law answered the forfeiture complaint.

That filing did not suggest any opposition to the sale.

Rather, Cleveland Law stated that, as an “innocent owner” of a leasehold interest under 18 U.S.C. § 983(d)(6), its permissible remedies included com- pensation “to the extent of Claimant’s ownership interest once a final order of forfeiture has been entered and the property has been reduced to liquid assets.”

The next day, February 11, 2021, the district court granted the “unopposed” motion to approve the interlocutory sale according to the terms of the purchase agreement.

In the weeks that followed, Cleveland Law did not submit any filing to prevent the sale from occurring.

Instead, after the sale closed, Cleveland Law filed a notice of appeal of the sale order on March 1, 2021.1

1 The parties agree, as do we, that an interlocutory order authorizing the immediate sale of real property in a forfeiture case is a collateral order subject to immediate appeal.

See, e.g., United States v. Real Prop. & Residence Located at 4816 Chaffey Lane, 699 3d 956, 959 (6th Cir. 2012)

(exercising jurisdiction over an interlocutory sale order in a forfeiture case under the collateral-order doctrine).

Cf. Citibank, N.A. v. Data Lease Fin. Corp., 645 F.2d 333, 336–38 (5th Cir. May 1981)

(holding that “an order in a foreclosure proceeding that directs the immediate sale of specified property is in all respects a final order for purposes of appeal.”)

II.

Cleveland Law maintains that the private sale of 55 Public Square was “governed by” § 2001 because “all parties” did not “agree to the sale or different procedures” under Supplemental Rule G(7). It notes that the government never sought or obtained its agreement to the sale, despite its status as a claimant in the forfeiture case.

And it contends that the failure to comply with § 2001’s notice, hearing, and appraisal requirements rendered the sale “void” under the former Fifth Circuit’s decision in Acadia Land Co. v. Horuff, 110 F.2d 354, 355 (5th Cir. 1940)

(holding that the failure to comply with statutory notice, hearing, and appraisal requirements rendered a private sale “void because the court was lacking in jurisdiction to confirm it”).2

The government responds that Cleveland Law tacitly agreed to the sale or waived the issue by failing to object below, and that the appeal is moot because the sale to a good-faith purchaser cannot be undone.

It further argues that Cleveland Law was not actually harmed by the sale order, and that the sale would have gone forward in the same way had the government simply waited to initiate a forfeiture case until the sale closed.

Cleveland Law replies that it lacked a meaningful opportunity to object and that this Court can still grant effective relief.

2This Court adopted as binding precedent all Fifth Circuit decisions prior to October 1, Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).

III.

After this case was fully briefed, we asked the parties to submit supplemental briefs addressing Cleveland Law’s standing to appeal the interlocutory sale order.

Because standing implicates our jurisdiction, “we are obliged to consider standing sua sponte,” reviewing de novo.

AT&T Mobility, LLC v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 494 F.3d 1356, 1359–60 (11th Cir. 2007).

“Litigants must establish their standing not only to bring claims, but also to appeal judgments.”

Wolff v. Cash 4 Titles, 351 F.3d 1348, 1353 (11th Cir. 2003).

“To have appellate standing, a litigant must establish that he has suffered a concrete and particularized injury that is fairly traceable to the challenged conduct, and is likely to be redressed by a favorable judicial decision.”

United States v. Pavlenko, 921 F.3d 1286, 1289 (11th Cir. 2019).

The injury requirement means that “the appealed order must affect the litigant’s interests in an adverse way.”

Id.; see Knight v. State, 14 F.3d 1534, 1556 (11th Cir. 1994).

In other words, “

[o]nly a litigant who is aggrieved by the judgment or order may appeal.”

Wolff, 351 F.3d at 1354 (cleaned up).

Cleveland Law says it has standing because the sale order “modified [its] ownership interest in the property,” “disrupted its business operations,” and violated its due-process rights in the forfeiture proceeding.

It asserts that, while the sale order “purportedly” transferred its lease agreement, the order “fail[ed] to ensure all lease provisions went undisturbed.”

After the sale closed, according to Cleveland Law, the buyer attempted to terminate the lease agreement and then began converting the building to residential housing, causing significant disruption and violating a lease provision that limited use of the building to commercial purposes only.

The government responds that Cleveland Law lacks standing because the sale order kept Cleveland Law’s rights and remedies under the lease fully intact.

In the government’s view, Cleveland Law’s problems with its new landlord stem from the independent actions of a third party, not the sale order itself, and are “outside the ambit of this case.”

It notes that the court abandoned jurisdiction over the building once the sale proceeds were substituted for the building as the res.

It also contends that Cleveland Law received due process and was not prejudiced by any procedural deprivation because even if due process as Cleveland Law envisions it was entitled to had been afforded, the same result would have occurred.

Cleveland Law replies that the Supreme Court has rejected similar reasoning.

We agree with the government that Cleveland Law lacks standing to appeal.

The sale order did not adversely affect Cleveland Law’s leasehold interest in the property.

That order permitted the sale to go forward under the terms of the purchase agreement, which transferred all existing leases to the buyer.

The record contradicts Cleveland Law’s claim that the sale order failed to incorporate addenda to its lease or to document a few other lease provisions.

Under the purchase agreement, the lease transfer included “any and all amendments, modifications or supplements” to leases, and the buyer “agree[d] to be bound by and to perform and observe all of the obligations, covenants, terms and conditions to be performed or observed.”

So while Cleveland Law’s landlord changed, its lease did not.

Indeed, Cleveland Law did not raise any objection to the sale until after it had closed, indicating that its problem was with the new landlord, not the sale itself.

Cleveland Law therefore has not shown that the sale order affected its property interests in an adverse way.

See Pavlenko, 921 F.3d at 1289.

Nor are Cleveland Law’s grievances with its new landlord sufficient to provide standing to appeal the sale order.

To be sure, Cleveland Law appears to have been injured by the new landlord’s attempt to terminate the lease and disruptive renovations for residential housing, alleged to be in violation of a lease provision limiting use of the building to commercial purposes only.

But those injuries were caused by “the independent action of some third party not before the court,” and are not fairly traceable to the sale order itself.

See United States v. Windsor, 570 U.S. 744, 757 (2013)

(“[T]he injury has to be fairly traceable to the challenged action , and not the result of the independent action of
some third party not before the court.” (cleaned up)).

The sale order did not affect Cleveland Law’s property interest or authorize the buyer to take the actions of which Cleveland Law complains.

And Cleveland Law’s injuries to its use and enjoyment of the property are redressable through an action against that third party.

Cleveland Law fails to explain how undoing the sale and requiring additional procedures under § 2001, related to ensuring a fair sale price, would remedy these injuries.3

See Pavlenko, 921 F.3d at 1289.

3 In its initial briefing, Cleveland Law also cited the protection of 18 U.S.C.§ 985, which states that “the owners or occupants of the real property shall not be evicted from, or otherwise deprived of the use and enjoyment of, real property that is the subject of a pending forfeiture action.”

But as the government points out, that protection “does not apply to forfeitures of the proceeds of the sale of [real property or interests in real property].”

18 U.S.C. § 985(f)(2).

In other words, § 985 no longer applied once the sale of the property closed and the proceeds were substituted as the res.

Finally, Cleveland Law’s alleged due-process injury is not enough on its own to create standing to appeal.

Because Cleveland Law has not shown that the sale order adversely affected its property interest in 55 Public Square, it likewise has not shown that it was harmed by any procedural deficiencies in relation to that order.

For these reasons, we conclude that Cleveland Law lacks standing to appeal the district court’s order authorizing the interlocutory sale of 55 Public Square.

We therefore dismiss the appeal for lack of jurisdiction.4

DISMISSED.

4 The government’s motion for summary affirmance or to dismiss on grounds of mootness is DENIED AS MOOT.

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Bankers

Florida Shrugs it Shoulders as Wall Street’s Goldman Sachs Acquires An Entire Community

Citizens remain impotent about challenging the US Government and Wall St. Owning a home will not be a financial option and renting will be very costly.

Published

on

Goldman Sachs-backed firm buys entire Florida community for $45 million

MAY 10, 2022 | REPUBLISHED BY LIT: MAY 11, 2022

Yun’s comments below are typical of  NAR – TOTAL BS – and sound like paid advertorials for real estate investment trusts and equity funds.

Wall Street investors are capitalizing on the current housing crisis by investing in rental properties in Florida.

As WESH reports, one of the latest deals involves Cypress Bay, a community of 87 single-family rental homes at the very southern edge of Brevard County in Palm Bay, Florida.

Two investment funds have purchased the community of homes for $45 million.

The funds are the Growth eREIT VII fund and the Fundrise Interval Fund, which were financially backed by New York-based investment bank Goldman Sachs Group Inc.

Dr. Lawrence Yun, the Chief Economist of the National Associate of Realtors, says the move is relatively new for Wall Street.

“The degree of large Wall Street money coming in fairly new. I think this is due to the unique circumstance of housing shortage,”

Yun said.

“Wall Street is able to generate money, private equity, hedge funds and others to say let’s go chase the rising rents and putting money into rental property development.”

“Investors come in and of course invest. Property just goes off the roof, which marginalizes a whole lot of people who just can’t afford it. Especially those in Brevard County who make less than $46,000 a year,”

Bishop Merton L. Clark of Truth Revealed International Ministries told WESH.

Goldman Sachs to pay $5bn for its role in the 2008 financial crisis

The settlement holds the bank accountable for its ‘serious misconduct’ in falsely assuring investors that securities it sold were backed by sound mortgages

APR 11, 2016 | REPUBLISHED BY LIT: MAY 11, 2022

Goldman Sachs will pay $5.06bn for its role in the 2008 financial crisis, the US Department of Justice said on Monday.

The settlement, over the sale of mortgage-backed securities from 2005 to 2007, was first announced in January.

Goldman Sachs, like other banks, had a tough year in 2015 due to plummeting oil prices, China’s economic slowdown and worries over the US interest rate hike.

“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,”

acting associate attorney general Stuart Delery said in a statement.

In January, Goldman said it expected the agreement to reduce its earnings for the fourth quarter by about $1.5bn after tax.

According to the Wall Street bank, the settlement will consist of a $2.385bn civil monetary penalty, $875m in cash payments, and $1.8bn in consumer relief.

Among other measures, the bank will offer a reduction in unpaid principal for affected homeowners and borrowers.

“We are pleased to have reached an agreement in principle to resolve these matters,”

Lloyd C Blankfein, chairman and chief executive of Goldman Sachs, said in January.

This is only the latest multibillion-dollar civil settlement reached with a major bank over the economic meltdown in which millions of Americans lost their homes to foreclosure.

Goldman Sachs and Morgan Stanley, which earlier this year agreed to pay $3.2bn, are two of the last big banks to pay up.

Bank of America agreed to pay the largest of the settlements, $16.6bn, in 2014.

A year earlier, JPMorgan Chase paid about $13bn.

Such settlements have been worked out by the Residential Mortgage-Backed Securities Working Group, which is co-chaired by New York’s attorney general, Eric Schneiderman.

New Yorkers will receive about $670m of the Goldman Sachs settlement, including $190m in cash and $480m in consumer relief such as mortgage assistance and principal forgiveness.

“Since 2012, my No1 priority has been getting New Yorkers the resources they need to rebuild,”

Schneiderman said on Monday.

“This settlement, like those before it, ensures that these critical programs … will continue to get funded well into the future, and will be paid for by the institutions responsible for the financial crisis.”

The deal, however, includes no criminal sanctions or penalties and is likely to stir additional criticism about the Justice Department’s inability to hold bank executives personally responsible for the financial crisis.

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