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By Matthew Russell Lee

SDNY COURTHOUSE, Sept 13 – The nitty gritty aspects of Supervised Release, from dice game to "clean urine," were on display on September 13 in the U.S. District Court for the Southern District of New York courtroom of Judge Denise L. Cote.

  Supervisee Nehemiah Casey McBride was back before Judge Cote, with a series of positive urine tests for marijuana and having recently lost his job due playing dice on the premises, but outside his hours of work. He was found eligible for unemployment. Judge Cote urged him to find another job - he has seven children - and said, memorably, "I want to start seeing some clean urines," meaning negative drug tests.

  Judge Cote asked for a letter by October 18 about a new job training or license upgrade process, and said Yes when Probation offered to email her weekly about the drug tests. This is the nitty gritty of Supervision, as much social work as law. We'll have more on this.

Back in July before Judge Cote: sometimes a court fight from 60 Centre Street moves 50 yards over the Maya Lin statues from State to Federal law into U.S. District Court for the Southern District of New York. So it was on July 12 when Chris Kosachuk who had sued before NYS Judge Hagler bought his issue to SDNY Judge Denise Cote - who stayed it.

 It all goes back to a "Confession of Judgment" obtained in 60 Centre Street on February 22, 2012, for $5 million dollars. Kosachuk wants it vacated as a fraud on the court. But SDNY Judge Cote said, in essence, if you are pursuing this in another court where it is "sub judice," it will not proceed here.

 Judge Cote made a point of saying she could outright dismiss Kosachuk's Federal case, but was choosing instead to stay it, asking a letter - more probably two - two weeks after the state case is decided. And so it goes in the SDNY - and 60 Centre Street - in the wars in Foley Square.

Some prosecutions begin with a bang, in this case a murder charge, and end with the sealed whimper of a guilty plea to a much lesser charge, complete with cooperation agreement and ordered to seal the transcript.
 
  So it was in the SDNY on June 7, when Deandre Morrison of whom prosecutors said they might seek the federal death penalty for the murder of Daniel Delgado on East 153rd Street in The Bronx, quietly pled guilty with the promise of a so-called 5K letter and lesser sentence on three counts in an eighth superseding indictment that was not then online - and now is sealed by SDNY Judge Denise Cote.

   While Deandre Morrison has been linked to slashings in prison, and guards mocked by the tabloids for letting him walk free in a mental ward, Judge Cote found him competent on June 7.

  This despite him listing two psychotropic drugs he takes, as well as a third to sleep. This despite his defense attorney acknowledging how slow he speaks. What is going on here? Doesn't the public have a right to know?

  As if in another world - by in the same SDNY Daniel Patrick Moynihan courthouse only the day before on June 6, a businessman accused of defrauding the U.S. government of over $1 million in customs fees on children's clothing from China, Joseph Bailey, was brought in shackles into the SDNY Magistrates Court on June 6. As was the case for Deandre Morrison's subsequently sealed plea, Inner City Press was the only media there.

 The government agreed to a $1 million bond; his wife Lisa and his nearly identical son Morris, in the gallery, were given his medicines in a plastic bag.

There was a brief dispute before Magistrate Judge Gabriel W. Gorenstein about about Bailey's passport, set to expire in six months. His lawyer said he might need to hold on to it to apply for a new one. The government did not impose its usual "no new applications" condition, but did request that the still valid but expiring passport be turned over unless Bailey needs it for an interview for renewal. Interview?

  After the presentment the U.S. Attorney's Office issued a press release, including: "The conduct in this matter was first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act.... From in or about 2007 to in or about 2015, BAILEY and other employees of STARGATE engaged in a scheme fraudulently to understate the value of goods imported into the United States.  During the charged time period, STARGATE purchased much of its merchandise from a manufacturer located in China (“Manufacturer-1”).  Starting shortly after STARGATE began doing business with Manufacturer-1 in 2007, through approximately 2010, BAILEY and others at STARGATE engaged in a double-invoicing scheme by which STARGATE would receive two sets of invoices from Manufacturer-1 for the same shipment of goods.  One invoice, referred to as the “pay by” invoice, was significantly higher and reflected the actual price paid by STARGATE for the goods.  The second invoice reflected a significantly lower price for the goods and was presented to CBP.  This allowed STARGATE to pay a fraudulently lower amount of customs duties.    

In approximately 2010, BAILEY and other employees of Stargate began a new variation of the customs fraud scheme, involving invoices for “sample” goods, by which Manufacturer-1 would send two separate sets of invoices for a given shipment that together reflected the true price STARGATE actually paid to Manufacturer-1 for a particular shipment of clothing.  The first invoice, typically entitled the “commercial invoice,” described the goods purchased and was submitted to CBP.  The second invoice purportedly reflected amounts paid by STARGATE for “sample” goods and was not submitted to CBP.  Sample goods are not subject to customs duties.    

 BAILEY is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison, one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of falsely effecting the entry of goods into the United States, which carries a maximum sentence of two years.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  BAILEY, STARGATE, and RIVSTAR are also charged with civil claims under the False Claims Act, through which the Government may recover treble damages and civil penalties arising from his conduct."

  But how much might the whistleblower get? Watch this site, @InnerCityPress and the new @SDNYLIVE.

  In other SDNY news, a young woman who was pimped out and forced to quit high school testified on June 5 in a disturbing prostitution prosecution case proceeding before  Judge Paul G. Gardephe.

In a courtroom with an otherwise empty gallery, a witness whom Inner City Press will not name testified to being forced into oral sex by a pimp, whom she called Jay, who fired a gun from his roof and threatened her Irvington, New Jersey parents.

  On June 6 the trial continued, with a Special Agent Nelson testifying about IP addresses from which Backpage.com advertisements were taken out. The case is USA v. Claudius English a/k/a Jay Barnes a/k/a Brent English, 18-cr-492 (PGG).

 The conduct at issue - the shooting of a gun from the roof, the forced sex, the buying of advertisements and re-sale of Shitsu dog - took place in an apartment building on  Davidson Avenue in The Bronx. The payments were made through Comerica Bank.

  The witness, called Victim-1 in the initially sealed Complaint, for a time took the NYC subway and the PATH train to her high school in New Jersey, then stopped. She was forced to have sex with men, and was attacked for dating boys her own age. She lost her Shitsu dog.

  The defense, doing its job, ended June 5 questioning the quality of disclosure, no 3500 material about the witnesses interviews with prosecutors in The Bronx. Judge Gardephe told the US Attorney's Office to look into it.

  Later on June 5 Assistant US Attorneys Michael Krouse and Ni Qian wrote to Judge Gardephe that they had "spoke[n] by phone to the two relevant former Bronx ADAs, Lauren Di Chiara and Meagan Powers. Both stated they met with Sarah W. before she testified in the grand jury, but that they do not believe they took notes."

  Perhaps they should have - in the state case against him, Claudius English got part of the search warrants against him quashed, see NYS decision here. Perhaps it emboldened him to go to trial on the Federal charges rather that plea bargain. As the trial nears its end, the wisdom of that decision will soon be seen. Watch this site.

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