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For North Korea Crypto Currency SDNY Arrests Griffith While Withholding OneCoin Exhibits

By Matthew Russell Lee, Exclusive Patreon

SDNY COURTHOUSE, Nov 29 – While the US Attorney for the SDNY is getting bogged down in its attempted to prosecute Iranian banker Ali Sadr Hashemi Nejad with money laundering and violating US sanctions including through a Venezuelan infrastructure project, on November 29 his Office announced the unsealing of a criminal complaint charging VIRGIL GRIFFITH, a United States citizen, with violating the International Emergency Economic Powers Act (“IEEPA”) by traveling to the Democratic People’s Republic of Korea (“DPRK” or “North Korea”) in order deliver a presentation and technical advice on using cryptocurrency and blockchain technology to evade sanctions."

  This while the US Attorney's Office is withholding its own crypto-currency prosecution of Mark Scott / OneCoin exhibits, for weeks, requiring Inner City Press to file a FOIA request for them.

 GRIFFITH was arrested at Los Angeles International Airport on November 28, Thanksgiving, and it was said would be presented in federal court in Los Angeles "later" on November 29. Such timely didn't work for an ISIS suspect this week in SDNY but we'll have.               
  From the press release, U.S. Attorney Geoffrey S. Berman stated:  “As alleged, Virgil Griffith provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.  In allegedly doing so, Griffith jeopardized the sanctions that both Congress and the president have enacted to place maximum pressure on North Korea’s dangerous regime.”     Assistant Attorney General John Demers said:  “Despite receiving warnings not to go, Griffith allegedly traveled to one of the United States’ foremost adversaries, North Korea, where he taught his audience how to use blockchain technology to evade sanctions.  By this complaint, we begin the process of seeking justice for such conduct.”     FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “There are deliberate reasons sanctions have been levied on North Korea.  The country and its leader pose a literal threat to our national security and that of our allies.  Mr. Griffith allegedly traveled to North Korea without permission from the federal government, and with knowledge what he was doing was against the law.  We cannot allow anyone to evade sanctions, because the consequences of North Korea obtaining funding, technology, and information to further its desire to build nuclear weapons put the world at risk.  It’s even more egregious that a U.S. citizen allegedly chose to aid our adversary.”                 According to the Complaint unsealed today in Manhattan federal court[1]:                 Pursuant to the IEEPA and Executive Order 13466, United States Persons are prohibited from exporting any goods, services, or technology to the DPRK without a license from Department of the Treasury, Office of Foreign Assets Control (“OFAC”).                 In or about April 2019, GRIFFITH traveled to the DPRK to attend and present at the “Pyongyang Blockchain and Cryptocurrency Conference” (the “DPRK Cryptocurrency Conference”).  Despite that the U.S. Department of State had denied GRIFFITH permission to travel to the DPRK, GRIFFITH presented at the DPRK Cryptocurrency Conference, knowing that doing so violated sanctions against the DPRK.  At no time did GRIFFITH obtain permission from OFAC to provide goods, services, or technology to the DPRK.     At the DPRK Cryptocurrency Conference, GRIFFITH and other attendees discussed how the DPRK could use blockchain and cryptocurrency technology to launder money and evade sanctions.  GRIFFITH’s presentation at the DPRK Cryptocurrency Conference had been approved by DPRK officials and focused on, among other things, how blockchain technology, including a “smart contract,” could be used to benefit the DPRK.  GRIFFITH identified several DPRK Cryptocurrency Conference attendees who appeared to work for the North Korean government, and who, during his presentation, asked GRIFFITH specific questions about blockchain and cryptocurrency and prompted discussions on technical aspects of those technologies.     After the DPRK Cryptocurrency Conference, GRIFFITH began formulating plans to facilitate the exchange of cryptocurrency between the DPRK and South Korea, despite knowing that assisting with such an exchange would violate sanctions against the DPRK.  GRIFFITH also encouraged other U.S. citizens to travel to North Korea, including to attend the same DPRK Cryptocurrency Conference the following year.  Finally, GRIFFITH announced his intention to renounce his U.S. citizenship and began researching how to purchase citizenship from other countries.

Meanwhile Nejad / Sadr has his case being pushed forward by lawyer Reid Weingarten of Steptoe & Johnson and, on November 25 by Brian M. Heberlig before U.S. District Court for the Southern District of New York Judge Alison J. Nathan.

   Heberlig argued at length for the suppression and return of emails seized, saying that looking for emails about money laundering was too broad. He insisted that his clients project in Venezuela was pure business, and that the government should have have been looking into his trips to Iran.

  As a civil libertarian, the arguments were attractive. In a courthouse where less affluent defendants are processed through in much different ways, less so.

  The government has two weeks to go page by page through their May 2018 420 PDFs; the defense got the same two weeks to pick out their seven or so worst examples of overreach. Two senior AUSA who sat through most of the argument left before Heberlig's final barrage. For those keeping score, the government ceded most ground in this hearing. Meanwhile in the Magistrates Court on less fancy crimes they are requesting detention in nearly every case. Inner City Press will have more on this.

   At the earlier Curcio hearing while adding prior Steptoe clients Citibank, UBS and Commerzbank to Steptoe's script, Nathan found the Sadr knowingly waived all conflicts of interest.

  Then a surprise: Assistant US Attorney Michael K. Krouse acknowledged that yet to be turned over are e-mails from seven custodian other than Sadr, somehow lost in the cracks of the case. Judge Nathan gave Krouse a week to provide a status update, with full production to be completed in two weeks and a response by Steptoe a week after that. They will be seeking to exclude these e-mails.

  On the bracelet removal request, Judge Nathan said she saw no reason to do it. Weingarten replied that Pre-Trial favors it, and that he wants to meet with Sadr until midnight. The government's position will be known in a week and more from Steptoe if the government opposes either. It's good to have money, in essence. This is not how lower income defendants are often treated in the SDNY. The case is USA v. Nejad,  18-cr-00224 (Nathan). More on Patreon here.

The most recent arguments were in a conference on August 15 before U.S. District Court for the Southern District of New York courtroom of Judge Alison J. Nathan.

  Hasheminejad's lawyer Brian M. Heberlig said he can't begin a trial for months since he also represents Huawei. His fellow Steptoe & Johnson lawyer Reid Weingarten made a point of saying that he too had a trial, now tragically canceled. He was referring to Jeffrey Epstein - although minutes later when asked a question about Epstein by the elevators he said, I can't believe you're asking me that. Who raised it? You can't have it both ways - except in the SDNY.

 The case was re-assigned to Judge Nathan because Judge Andrew Carter recused himself due to JPMorgan Chase connections. That should disqualify Steptoe as well, as they may have to cross examine JPMC which is also their client.

  A so-called Curcio hearing is scheduled on the issue for September 9 at 10 am. The trial is tentatively scheduled for January 2020 but that, of course, depends on Huawei if no longer on Jeffrey Epstein. Who else might they represent? More on Patreon, here. Watch this site.

Also in front of Judge Nathan on July 30, before Robert Pizarro was given his pre-ordained sentence of life plus 14 years after being convicted by a jury of kidnapping and killing a Federal informant, he turned to friends and family of the victim to told then, I didn't do it.

 Judge Nathan. She told Pizarro to turn and face her, and said she understand that he will appeal. And why not? Life plus 14 years is a long time.

  The government's sentencing submission recited how Pizarro and his co-defendant Juan Rivera staked out the Bronx auto body shop of Robert Bishun, intent on robbing the narcotics proceeds they were convinced he had. (In fact, the government says, "by the time of his murder, Bishun had not only ceased dealing drugs, but he had become a cooperating witness with federal authorities."

   After losing at trial, Pizarro fired his lawyers and was assigned a new one, Mark DeMarco. On July 30 DeMarco asked, given the mandatory minimums of life and seven years, what he was supposed to say. Just prepare the appeal is the answer. The case is US v. Pizarro, 17-cr-151 (AJN).



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