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Informer's Docket Sheet Likely to Become Public


August 22, 2012

Bowing to reality, Eastern District Judge I. Leo Glasser signaled at a court hearing yesterday that he would likely unseal the docket sheet at the center of a tense and bitter fight to make available the sealed criminal record of a government informer.

"The genie is out of the bottle," Judge Glasser told Assistant U.S. Attorney Todd Kaminsky. Keeping John Doe's guilty plea and cooperation secret "is no longer viable."

Judge Glasser held the hearing in response to the Miami Herald's motion to unseal the docket sheet in USA v. John Doe, 98-cr-1101. He said he would notify the parties of his ruling.

On Aug. 8, I posted an article about the controversy over John Doe's criminal file (see article below). At the time I did not identify John Doe by name because I had only read it in a 2007 article in the New York Times and two articles in the Miami Herald earlier this year.

But due to a slip up in the Eastern District clerk's office, the docket sheet was made available on the Internet through PACER, the court's system for making records available to the public. It remained publicly available on PACER from Aug. 10 to Aug. 16. During that time, I viewed the docket sheet and saw that John Doe was clearly identified as Felix Sater. (Parenthetically, the file was resealed after I made phone calls to the U.S. Attorney's offices in Brooklyn and Syracuse and to Mr. Sater's lawyers at Beys, Stein & Mobargha.)

One of the docket entries I copied into my notes from May 13, 2011, stated that "ORDER, as to Felix Sater, 'On October, 23, 2009,' John Doe, by his real name, 'was sentenced to probation and a $25,000 fine.' " The docket sheet also contained an entry on Dec. 10, 1998 stating that Mr. Sater had pleaded guilty on that date.

Judge Glasser cited an "inadvertent" error in the clerk's office for the publication of the docket sheet and its subsequent availability on WestLaw and Nexis as making the situation irretrievable. Moreover, he essentially confirmed Doe's identity as Mr. Sater by stating that it had been identified in articles in the New York Times and the Miami Herald, and twice noting that "John Doe's" picture had been run in the Miami Herald.

Fierce Battle

A fierce battle erupted more than two years ago when Long Island lawyer Frederick M. Oberlander filed a civil racketeering action in the Southern District of New York, claiming that Mr. Sater's ability to conceal his criminal record had enabled him to go on to engage in a $500 million real-estate fraud that included the development of posh condominium projects with Donald Trump's name on them in SoHo and Fort Lauderdale. As a part of that lawsuit, Mr. Oberlander annexed documents from Mr. Sater's criminal file including his cooperation agreement and pre-sentencing report. The lawsuite was derivatively on behalf of investors, lenders and customers of the real estate company Mr. Sater was associated with, Bayrock Group.

In short order, the government and Mr. Sater's lawyers at Beys, Stein & Mobargha, asked for and received orders sealing the file containing Mr. Sater's 1998 plea to a $40 million stock fraud as well at the Southern District civil RICO suit. Judge Glasser, who had taken the criminal plea, also barred Mr. Oberlander from any further dissemination of the documents from Mr. Sater's criminal case as did Southern District Judge Naomi Reice Buchwald in the RICO case.

On appeal, the U.S. Court of Appeals for the Second Circuit affirmed the lower court's sealing and injunctive orders, and added its own broad order directing Mr. Oberlander, and anyone associated with him, from "revealing in any way" to "any person, or in any proceeding and forum" any of the documents sealed in Doe's stock fraud case.

The circuit further ordered the appointment of an Eastern District judge to enforce its own, and Judge Glasser's, orders. Judge Brian M. Cogan, who was subsequently appointed to handle enforcement issues, asked that the Eastern District U.S. Attorney's Office investigate whether Mr. Oberlander should be cited for criminal contempt, according to a New York Times article about a hearing in February.

The circuit panel directed Mr. Oberlander to file any petition for review in the U.S. Supreme Court under seal, but the Supreme Court granted his motion to file a redacted version of his certiorari petition and the record on appeal, which provided the basis for my Aug. 8 story.

Lawyers Pressed

At the hearing, Judge Glasser pressed both AUSA Kaminsky and Mr. Sater's lawyer, Nader Mobargha, for reasons why the fact of Mr. Sater's plea and cooperation still, so many years later, needed to be kept out of public view. At the time of the plea in 1998, Judge Glasser said, he had approved the sealing of the docket sheet out of concern for Mr. Sater's "safety and that of his family."

Judge Glasser made clear that he was only referring to the unsealing of 167 entries listed in the docket sheet. A further examination of the documents referenced on the docket sheet would have to be undertaken before any determination could be made as to whether they should be released, he said. He also added that any issues relating to the release of the underlying document were not before him on the Miami Herald's motion for the unsealing of the docket sheet.

Both Mr. Kaminsky and Mr. Mobargha contended that Mr. Doe's cooperation could be gleaned from the length of time between certain actions reported on the docket sheet. They did not provide any details, nor did they state any further reasons why Mr. Sater remained in danger.

The New York Times story, dated Dec. 17, 2007, more than two years before Mr. Oberlander had filed the civil RICO suit, quoted an associate of Mr. Sater's, Gennady Klotsman, as saying that both of them had pleaded guilty in 1998, and Mr. Sater had cooperated with the prosecution. A subsequent indictment had been handed down in 2000, accusing 19 others of involvement in the "pump and dump" scam, the Times reported. Additionally, according to the article, Mr. Sater was named as an "unindicted co-conspirator" in the 2000 indictment.

Steven Leo D'Alessandro, of Holland & Knight, who represented the Miami Herald at the hearing, added that the U.S. Attorney's Office in Brooklyn had issued a press release in 2000, announcing the 19 arrests, and noting that Mr. Sater had previously pleaded guilty in the stock fraud. As I noted in the Aug 8 article, the Second Circuit, in its order dated, June 29, 2011, had confirmed the existence of the press release.