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By Matthew Russell Lee, Video, Alamy photos

SDNY COURTHOUSE, July 12 – When David L. Smith was presented on decade old tax fraud charges on July 12 he was in a white dress shift and slacks. When he left, it was in shackles with U.S. Marshals, bound for the Metropolitan Correctional Center until at least September 19.

  Smith in 1998 co-founded Private Capital Management Group which sold tax shelters. While co-defendants with Ernst & Young were indicted, Smith went to Canada. An Assistant US Attorney who arrived 40 minutes late on July 12 told U.S. District Court for the Southern District of New York Judge Sidney Stein that it had taken a decade to get Smith extradited from Canada and that he should now be detained. Despite his financial affidavit, the prosecutor said Smith might have access to up to $8 million.

  Smith's Federal Defender lawyer Amy Gallicchio, who earlier stepped out to try to get her client of glass of water, noted that he had obediently checked in with authorities in Canada, and that he had been within his rights to oppose extradition to the US.

  Judge Stein several times noted the Smith obviously "does not want to be here." He asked his law clerk - his usually hands on Deputy was not present this Friday at 4 pm -- to get the Marshals in case he ordered detention. And after a brief argument he did just that. Smith put his wrists forward and was handcuffed. And with that he was led into the cell block.

But here's someone who was bailed, just one day before on July 11: the CEO of Melrose Credit Union Alan Kaufman was arrested at 6 am on July 11 and presented on bribery charges before SDNY Magistrate Judge Henry B. Pitman at 4 pm. Wearing a red polo shirt, he pled not guilty.

 He agreed to a bail package of a $500,00 bond to be signed by his wife and his son, flying in on July 23 and, among other things, drug testing and treatment if needed. His co-defendant Tony Georgiton must post a $1 million bond and turn in not only his US but also his Greek passport. The next hearing is not until September 4 before SDNY District Judge Lewis A. Kaufman. It's good to be a banker.

  This was the press release: "Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that ALAN KAUFMAN and TONY GEORGITON were arrested today and charged with bribery of a financial institution officer.  KAUFMAN and GEORGITON were charged with participating in a scheme in which KAUFMAN, who was then the chief executive officer of Melrose Credit Union (“Melrose CU”), accepted free housing and financing for the purchase of his personal residence from GEORGITON in exchange for the approval of millions of dollars in loans to GEORGITON’s companies at favorable terms.  KAUFMAN is also charged with accepting lavish vacations, including to Paris and Hawaii, as bribes from a media company, in exchange for Melrose CU purchasing increased advertising with that company. In 2010, GEORGITON purchased a home in Jericho, New York (the “Jericho Residence”), and permitted KAUFMAN to live in that home rent-free for over two years.  While KAUFMAN was living rent-free at the Jericho Residence, KAUFMAN personally approved the refinancing of over $60 million worth of loans at Melrose CU held by a company owned by GEORGITON with favorable terms.  The head of Melrose CU’s loan department refused to sign off on the loans given to GEORGITON because, among other things, he believed that the terms were too favorable and did not comply with Melrose CU’s loan policy.     In 2011, KAUFMAN sought approval from Melrose CU’s board of directors for Melrose CU to purchase the naming rights to a ballroom under construction in Astoria, Queens (the “Melrose Ballroom”).  That ballroom was owned by a company owned by GEORGITON.  KAUFMAN did not disclose to the Melrose board that he was living rent-free in a house owned by GEORGITON at the time he sought board approval for the naming rights acquisition.  Over the next four years, Melrose CU paid approximately $2 million to GEORGITON’s company for the naming rights to the Melrose Ballroom.     In 2013, KAUFMAN purchased the Jericho Residence from GEORGITON, with financing that largely came from GEORGITON.  To purchase the Jericho Residence, KAUFMAN took out a $200,000 loan from Melrose CU co-signed by GEORGITON and secured by GEORGITON’s shares in Melrose CU.  GEORGITON also gave KAUFMAN a $240,000 unsecured personal loan.  GEORGITON has never made a demand for payment on that personal loan and KAUFMAN has never made a payment on that personal loan.     In addition, from in or about 2010 through in or about 2015, KAUFMAN solicited and accepted lavish vacations and other gifts worth tens of thousands of dollars from a media company located in New York, New York (“Media Company-1”), in exchange for KAUFMAN’s approval of increased advertising spending by Melrose CU with Media Company-1.  For example, in 2010, Media Company-1 paid for KAUFMAN and his girlfriend, who also worked at Melrose CU, to fly to Paris, France, and stay at the Four Seasons George V Paris.  In 2012, Media Company-1 paid for KAUFMAN and his girlfriend to fly to Maui, Hawaii, and stay at the Four Seasons in Wailea.  In 2013, Media Company-1 paid for KAUFMAN and his girlfriend to attend the Super Bowl in New Orleans.     KAUFMAN did not seek approval for these vendor-paid trips from the Melrose CU board, nor did he disclose these vendor-paid trips to the Melrose CU board, in violation of Melrose CU’s anti-bribery policy."

Back on May 29 Noah Bank's Edward Shin, indicted for defrauding the U.S. Small Business Administrationwas, presented later  before Magistrate Judge James L Cott. Inner City Press was there, as it was for the previous week's presentment of bribing banker Stephen Calk, see below. In that case, the government agreed to Calk going free on $5 million bond with nationwide travel without notice, unlike for example Michael Avenatti.

  From the first statement: "the United States Attorney for the Southern District of New York, announced today the arrest of EDWARD SHIN, the CEO of a Pennsylvania-based bank (the “Bank”), for taking bribes in connection with the Bank’s issuance of loans that were guaranteed by the United States Small Business Administration (“SBA”).  SHIN was arrested pursuant to a criminal complaint charging him with taking bribes by siphoning off a portion of commissions on SBA-guaranteed loans and causing the Bank to issue SBA-guaranteed loans to companies in which SHIN had a secret interest."

  The bank is Noah Bank, and Shin has previously tried to sue the media for reporting on his misdeeds. And now?

  More: "      SHIN secretly solicited and received bribe payments in connection with SBA-guaranteed loans issued by the Bank and caused the Bank to extend SBA-guaranteed loans to companies in which SHIN had secret ownership interests.  Specifically, when the Bank issued a business loan involving a certain broker (the “Broker”), SHIN secretly arranged to receive a portion of the Broker’s fee.  On other occasions, when the Bank issued a business loan that did not involve the use of an actual broker, SHIN arranged to have the Broker inserted unnecessarily into the transaction solely to generate a broker fee that could be shared with SHIN; in fact, the Broker did no actual work to earn a commission on those transactions, but split the “broker’s fee” with SHIN as an illegal kickback.                

SHIN also arranged for the Bank to issue SBA-guaranteed loans to businesses in which he secretly retained an ownership interest, in violation of SBA regulations and procedures.  For example, in or about December 2010, the Bank issued an SBA-guaranteed loan for approximately $950,000 to a business in New York, New York.  Although documents submitted to the Bank for purposes of securing the loan did not mention SHIN’s ownership interest, the business was secretly operated as a 50-50 partnership between SHIN and the Broker.  After the loan was issued in or about October 2014, this loan went into default status, ultimately resulting in a loss to the SBA of approximately $611,491." Watch this site.

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 in the U.S. District Court for the Southern District of New York 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.

  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.)

  The indictment was unsealed the day after President Donald J. Trump lost his bid to stay the House of Representatives' subpoenas to two other banks, Capital One and Deutsche Bank. After the May 22 ruling in Trump v. Deutsche Bank by SDNY Judge Edgardo Ramos, Trump lawyer Patrick Strawbridge headed to the elevators in the windowless lobby outside the courtroom.

  He was disinclined to comment and even take questions from the press. When reporters got on the elevator with him, he got off, saying sacrastically but not bitterly, Much as I'd like to be asked questions in the elevator...

   Downstairs in front of the Thurgood Marshall courthouse there were demonstrators will a long Impeach Trump banner and the small black Congress Has A Right To Know signs, three of which had been quickly raised in the courtroom, and just as quickly taken down when Judge Ramos requested it.

  The SDNY Court Security Officers spoke to the sign holders but did not eject them, during the 10 minute recess Judge Ramos took to put the finishing touches on his 25-page decision.

   TV crews from CNN and Univision were set up across the street, and a gaggle of photographers set up on the sidewalk to wait for Strawbridge and the House of Representatives' lawyer Douglas Letter.  As time passed others passing the courthouse, and coming out of it, stopped to ask as so often happens, Who are you waiting for?

   While few had heard of Strawbridge and the House lawyer named Letter, the mention of Trump drew a range of reactions. The sight of long lens cameras -- Inner City Press had this day retrieved it, from the seemingly overflow Press Room in the basement of 40 Foley Square -- attracted others with cases in the SDNY.

  Accompanied by a trio of children in wheelchairs on a day when the disabled entrance on Pearl Street to the Thurgood Marshall courthouse was closed were lawyers in Abrams et al v. Carranza, one in a series of Federal lawsuits against campaigning NYC Mayor Bill De Blasio's Education Chancellor RIchard Carranza. They had a flier and expressed hope that SDNY Judge Alison Nathan would, as indicted, issue a ruling in their case within the week.

  Other litigatants were less media savvy or directed. Those in a criminal trial before Judge Vernon Broderick admitted the case made it hard for even them to stay awake -- Inner City Press has tried several times -- but noted that the U.S. Attorney's office promotes the prosecution each morning in an e-mail.

  The plaintiff side in an employment discrimination trial in front of Judge Valerie Caproni came out (the defense may have been less willing to approach the press), then Judge Broderick himself, down to earth as ever. It was growing late.

  To put its camera back in the 40 Foley press room, Inner City Press climbed the stairs only to be told, We close at five. Explaining that there is a Press Room next to the cafeteria and that the Trump case had done later was at first to no avail. Finally a supervisor was called who did not acknowledge any right to enter, but said he would allow it this one time. We may have more on this: even in the small strokes, press access rights are important, particularly in a courthouse.

Earlier, before issuing his ruling Judge Edgardo Ramos had asked the lawyers for the two banks that got the subpoenas, Deutsche Bank and Capital One, if they wanted to speak. They did not. This even as House counsel Strawbridge detailed Deutsche Bank's long history with money laundering (and theft during the Holocaust, which didn't come up). Capital One is a rough, too, on predatory auto lending and the Community Reinvestment Act. But the banks lay low.

  Now under Judge Ramos' 25-page ruling, the banks become required to respond to the subpoenas in seven days, on May 29. That's the time during which the House has agreed not to enforce the subpoena, and the time during which Trump's lawyers seem certain to file an appeal and ask again for a stay from the Second Circuit Count of Appeals higher up, in both senses, in 40 Foley Square.

Earlier still in the May in the SDNY, Congressman Christopher Collins (R-NY) waived his right to be present for a May 3 hearing in the criminal insider trading case against him held past 5 pm in the SDNY courtroom of Judge Broderick. On May 10, Judge Broderick started on l'affaire Collins at 2 pm, after a case against BuzzFeed (Inner City Press coverage here). Early in the proceeding, before two shackled inmates were led in leading to a brief suspension of the white shoe SEC Congressman matter, Broderick made a joke about Donald Trump and evasive legal moves. I'm not going there, said one of the participants in Collins, who was an early endorser of Trump. Broderick said, "I should have either - but it is what it is."

   Three hours later, during which Inner City Press in full disclosure went one story down in the courthouse to cover a Fatico hearing about threats in the MCC, Judge Broderick was setting the time for Collins' lawyers to make motions. He arrived on four weeks after he rules on discovery, with the SEC to provide whatever he directs to the defense one week after the ruling. I'm not saying you're going to get anything, Judge Broderick said. Collins' lead lawyer said he is a optimist. More on Patreon; watch this site. 

  Collins' team of lawyers have made a slew of suggestions to Judge Broderick on what discovery to seek from the U.S. Attorney's office, from communications with the SEC to information about real estate, Cameron Collins and Lauren Zarsky and their sales of Immunotherapeutics stock after MIS416, aimed at secondary multiple sclerosis, failed the Drug Trial and Rep Collins made his calls from the White House Congressional picnic.

   On May 3 Judge Broderick was urging wide disclosure by the government, whether characterized as 3500 material or under Brady or Giglio. The notes to be produced, he said, didn't have to been entirely contemporaneous. He had a series of questions for the U.S. Attorney which he did not get through as it approached 6 p.m. and his courtroom deputy had gone for the day.

  Collins' lead lawyer from BakerHostetler, Jonathan R. Barr, directed Broderick to a decision by SDNY Judge Jed Rakoff during the Gumpta case, and Broderick said that he would read it. He confessed he had himself looked up applicable cases on Westlaw, adding that he might have missed some cases.  This case is  USA v. Collins, et al., 18-cr-00567 (VSB). More on Patreon, here.

  Judge Broderick told Collins' lawyers to expect to come back in a week's time on Friday, May 10. One of them said he would only be returning to the United States that morning; another said that he then would be leaving for the same place his colleague had been: Argentina.

 Thus is big money, and big politics, law done in the SDNY.

 Inner City Press and @SDNYLIVE will be there.

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