Sat 12 May 2012

SEC Tells JP Morgan Enforcement Action Coming over Bear’s Mortgage Backed Securities Violations

Posted by Teri Buhl under Bank Fraud
[31] Comments

Fallout from JP Morgan trading losses, which led to rater Fitch downgrading their debt yesterday, aren’t the only financial worries the banking behemoth is facing. Nestled in that shocking 10-Q filed Thursday is an admission that their regulator, the Securities and Exchange Commission, thinks some of the details that lead to the explosive Ambac mortgage security fraud suit against the naughty stepchild of JPM, Bear Stearns/EMC, are worthy of an enforcement action. Yep- the SEC is giving or finally gave them a Wells Notice, which means according to their 10-Q (and their 10-K) in January 2012 the SEC’s investigation into the sins of Bear’s Mortgage team run by Tom Morano, Jeff Verschleiser, Mike Nierenberg and the subsequent cover up by JPM was worthy of a civil suit along with some penalties.

JPM’s 10-Q states “In January 2012, the Firm was advised by SEC staff that they are considering recommending to the Commission that civil or administrative actions be pursued arising out of two separate investigations they have been conducting… In both investigations, the Firm has submitted responses to the proposed actions.”

We see JP Morgan admit one of the Wells notices relates to the fraud actions first brought forward in the Ambac suit with this line from the 10-Q, “The second involves potential claims against Bear Stearns entities, JPMorgan Chase & Co. and J.P. Morgan Securities LLC relating to settlements of claims against originators involving loans included in a number of Bear Stearns securitizations.”

They are talking about a phrase I first coined called the ‘double dipping scheme’.

It’s black letter law that Wells submissions to the SEC are discoverable in civil litigation. So lawyers in the monoline suits against JPM/BEAR will surely be trying to get a copy of the wells notice via discovery.

I first reported the SEC started an investigation into these alleged securities violations (and possible criminal actions) after I saw the securities regulator approach the lawyers and whistleblowers in my Bear Stearns investigative report at The Atlantic the day after the story came out. Now a year later it appears all the ‘shitty deal’ emails, internal Bear Stearns documents, and over thirty whistleblowers who’ve come forward in the monoline suits lead by the New York office of law firm PBWT was enough to get the SEC to stand up to JPM and hopefully say ‘what you did violated securities laws and harmed investors’. Talk about another wave that could lead to tsunami style damage to Jamie Dimon’s ‘fortress balance sheet’.

How many billions in damages JP Morgan will have to pay out is not yet determined but inside their Mortgage-Backed Securities and Repurchase Litigation note on the 10-Q the bank tells us “There are currently pending and tolled investor and monoline claims involving approximately $120 billion of such securities.”

WOW that means investors think there was a heck of a lot of very bad mortgage securities that were packaged and sold and they want their money back along with some fines and are willing to spend a few million to pay expensive lawyers to sue for it. When I first reported on the Ambac case and went on RT’s The Keiser Report to explain what kind of financial trouble JPM could be in the damages in the monoline suits against Bear were only around $1.2bn. I told Max Keiser if fraud claims survived the suit that means punitive damages get lobbed on and who knows many billions JPM will have to pay out because allegedly emails showed Bear mortgage traders stole billions from their own damn clients. I threw out a number, $10bn, that JPM could be looking to pay. Now according to JPM’s latest SEC filings there are now “seven pending actions commenced by bond insurers that guaranteed payments of principal and interest on approximately $5 billion of certain classes of 21 different MBS offerings.”

The face value amount of securities tied to the monoline suits against JPM are significant because there was a recent ruling in a Countrywide RMBS suit that ruled if plaintiffs can prove there were miss-representations in the bonds then the entire amount of the bond has to be bought back…not just the amount that defaulted or caused a loss. Reuters legal columnist Alison Frankel explains the judge’s decision and impact here. It has a lot to do with the way insurance laws are structured in New York State, which is where all the monolines suing have headquarters.

So far we haven’t seen JPM settle any of these mortgage putback suits including the government’s housing regulator’s whopper of a suit filed this winter against a bunch of banks including JPM. The government’s outside counsel who filed the FHFA suit literally copied the fraud and breach of contract claims Ambac had laid out against JPM and since then we’ve seen a multiple of big boy institutional investors file similar suits. Thus the alarming $120bn number of possible rmbs repurchase litigation damages JPM was forced to detail in their recent 10-Q. A number which accompanies a series of motions their expensive lawyers at Sullivan & Cromwell and Greenberg Traurig have filed to slow down discovery and deny, deny, deny these aggressive fraud claims in the triple digit billions.

And now that the SEC is about to come out and stamp a ton of merit to these civil investor lawsuits via an enforcement action that hopefully says – you guys broke the law, abused free markets, and seriously broke investor trust — then it’s looking harder and harder for JPM not to settle these investor lawsuits in the mega billions. Just think if Ambac actually got to trial and a main street jury who’s pissed very few bankers have gone to jail for the financial crisis heard some of the whistleblower testimony about senior Bear executives telling underlings to make up mortgage info for the raters. Or the third-party due diligence reports Bear got them to fudge – reports investors relied on as due diligence rubber stamping the quality of the rmbs securities. I’d image punitive damages up the yin-yang would be awarded.

But the most telling sign JPM will have to payout big time is that HUGE jump in litigation reserves they snuck in this week. In the bank’s first quarter earnings press release, filed on April 13th, JPM told investors they were adding $2.5bn to existing litigation reserves for mortgage-related suits. And then three weeks later while all my jurno peers are focused on writing stories about what JPM’s trading screw up means to their reputation, their master public relations spin machine figures lets thrown in all the bad news we can cause we know the market will punish our stock. So they added on another $1.7bn in litigation reserves for a total hit to income of $4.2bn. That’s more than 4 times the net amount ($800 million) they claim they lost on their bad corporate bond trade.

On top of that I’ve seen top housing analyst Mark Hanson tell hedges funds they might want look at how JPM repurchase risk will affect net income and thus the stock price. Francine McKenna, former Big 4 auditor and influential columnist for American Banker told me this is just the first phase. Accounting rules allow JPM to slowly add each quarter to litigation reserves and take smaller hits to net income than waiting for a big money suit to finalize and wipe-out a whole year’s earnings. Some financial editors like Joe Weisenthal at Business Insider allowed his team to write the $4.2bn addition to litigation reserves was due to trading loss but that’s not what the 10-Q explains. Number one these are reserve additions for events up to March 31st and JPM worrisome trading loss began in April. Number two the bank has to explain all the litigation that gets to that reserve number and there is not a word about suits from trading losses in their 10-Q litigation notes. Nope this big jump was from progress being made by rmbs plaintiffs and a looming SEC action which you see if you know how to read the litigation notes.

McKenna, founder of www.retheauditors.com says, “Banks tend to account in one lump litigation reserve number what they think they will have to payout from a suit but that’s really a disguise so that no one across the table from the litigation can see what they might be willing to settle for.”

There is another dirty accounting trick JPM is possibly playing with here. McKenna told me in an interview this week reserves are like a cookie jar, banks can increase and decrease this balance sheet number each quarter which shows up as a loss or earning to net income. So let’s say Jamie Dimon thinks the mark-to-market loss of $800 million he just took for the trading screw up is going to be a lot more when they are done unwinding the trade. The bank they could lower their litigation reserves and boom that trading loss doesn’t look so bad on next quarter’s net income. Then going into Q3, when say maybe they settle with the SEC and the rest of the Street wakes up to how many billions they will have to pay out for the sins of Bear Stearns RMBS fraud, JPM can just re-up the litigation reserves. Now of course their Big 4 auditor has to allow them do this by signing off on the SEC financial filings but part of the Abmac suit filed last January showed PricewaterhouseCoopers tried to stand up to JPM/Bear accounting tricks before and the bank just ignored it. A detail the lawyers at PBWT discovered for us. In that case it would be up to the SEC to say ‘Hey JPM your RMBS repurchase risk is more than you are accounting for and you’d better represent a more realistic number.” This in turn hurts JPM’s income and also can lead to additional downgrades by the raters, so an accounting scolding by the SEC on top of an enforcement action might not be something they’ll man up to. But clever analyst and hedge funds will see it and the result could be free market participants take a club to the CEO, who the financial press once hailed America’s angle banker, all on their own.

Editors Note: When my fellow financial reporters figure out I’ve reported JPM got a Wells Notice for mortgage securities no-no’s becuase of the Ambac ‘double dipping suit’ I’d like to remind them jurno standards mean you need to credit Teri Buhl for reporting this. Thanks in advance to Matt Taibbi at Rolling Stone and Max Keiser at RT who always link and mention the Bear RMBS fraud cheating their own clients news created a whopper of a problem for JPM, was a result of my original reporting at The Atlantic. Here is a shout out thanks from me to Daniel Indiviglio, my editor at The Atlantic, who understood the importantence of impact to the market in this story back in May 2010 and made sure it got published. And most important I’d like to recognize Nick Verbitsky, doc film maker of Confidence Game, a move now playing about the greed and fraud that lead to the downfall of Bear Stearns, for finding the first whistleblowers to speak out against the Bear Mortgage executives. Awareness of how these Wall Street titans cheated and stole damaging free markets was a result of investigative journalism and the PBWT attorneys not our regulators figuring it out first.

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Fri 27 Apr 2012

CGC’s Sherry Perlstein Ask State Attorney for Theft Case Delay to help Fundraise

Posted by Teri Buhl under Judicial Ethics
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Sherry Perlstein didn’t want the child center worker who embezzled $72,000 from her non-profit agency to get out jail without the label of felony imprinted on her forehead. Yesterday at Stamford, Conn. Criminal Court the 25 yr veteran executive director told Judge Povotator, Angela Crandon’s actions threatened the stability of the Child Guidance Center of Southern Connecticut program and she didn’t want the 35 yr-old woman to be able to make a deal for accelerated rehabilitation. AR would have allowed Crandon to get out of jail and have the felony charged erased after a certain period of time, restitution was paid, and some community service work. The State’s Financial Crime Unit prosecutor, Tamberlyn Conopask, had her guns locked and loaded to help Perlstein get her wish. But while Perlstein and Conopask were amping up their case to keep the former care coordinator employee in jail, they were also working hard to delay the AR hearing until after the non-profit’s big money benefit this Saturday.

You see it appears image is critical for Perlstein to keep her budget in the $4 million range and make sure Fairfield County fat wallet donations keeps rollin in. A reminder that a trusted 5-year employee under her watch got away with stealing $72,000 over 2 years and 10 months unnoticed by any supervisor isn’t exactly great PR right before financial titans and big law lawyers will have a chance to donate at her organizations circus-themed party in Greenwich tomorrow night. Managing the non-profit’s reputation is obviously part of her job but it’s not the responsibility of State Prosecutor Conopask. You see Perlstein told me in the halls of Stamford courthouse yesterday Conopask had tried to push Crandon’s attorney Frank DiScala to change yesterday’s AR hearing date till after the weekend’s benefit because it could affect fundraising. DiScala said no way as his client had already been in jail for nearly 5 months because she couldn’t make the $37,500 bail. This kind of behavior begs to question why is the State Attorney office so gung-ho to help a non-profit raise money? Is that even ethical?

One motive for the government attorney to attempt to massage the judicial process could be this. The Child Guidance Center for Southern Connecticut has a lock on lucrative contracts from the State that makes them the lead referral for 211 calls (a hotline for when kids or women call if they are being abused). The non-profit also does all the Greenwich, Stamford, New Canaan, Darien forensic investigation in child abuse violations. You know the type of examines that help the police build their cases. The non-profit, known as CGC, 2011 IRS filings show they get about $1.7mn from state grants and near $1mn for fees from services. The rest of their $4mn budget comes in through individual and corporate donations from the likes of GE along with non-government grants. Public filings show CGC’s revenue has declined each year by a few hundred thousand since the financial crisis as their fundraising director Jeannine Edgorf told me one large hedge fund that went bust stopped donating and CT Governor Malloy has been cutting grant funding.

Angela Crandon’s scheme, to basically pay herself a bonus while siphoning off what would equal around $2,100 a month for 34 months, was painstakingly detailed by attorney Conopask in court yesterday. Crandon’s a smart cookie who received financial aid to earn a degree from esteemed Colby College and the State’s case showed a premeditated plan side stepping the few checks and balances the non-profit had in place. She was married and divorced while working for the non-profit. Conopask kept harping on the ‘services Crandon deprived families facing mental child problems’ from but an interview with Perlstein showed the 25 families effected by Crandon’s scheme were all given the chance to get the services/ Wal-Mart gift cards Crandon allegedly took from them after her crime was uncovered. You see what Crandon was doing was using her husband’s name, Jerome, and submitting an invoice that he was a youth mentor to families in need. According to GCG and the State Attorney she’d then sent in an invoice to the government program with a form that had her supervisor’s signature on it because she was cutting and pasting it for each invoice (a whopping 70 times). When the non-profit finally realized there was something funny with this Jerome guy being continually chosen as a mentor they started their own investigation and called the Stamford police. How Crandon’s supervisor didn’t realize it was her husband’s name listed as a mentor is still unclear.

Perlstein told me most of the fraudulent invoices were just that – made up- the families didn’t even need the mentoring services Crandon falsely billed the state for in the name of her husband Jerome. So in reality a lot of the 25 families didn’t really lose out on any services. In fact NONE of them showed up in court to tell the judge their woes via Crandon’s actions. What they did tell Crandon’s supervisor when she called to interview them about Crandon was “We love Angela. She was a big help to our family”, according to Perlstein. Who appears too lost out was the DCH state budget that the non-profit choose to pay back right away and then submitted an insurance claim and recovered all but their $1,000 deductible. Perlstein told me so far their insurance premium hasn’t gone up but could.

Attorney Conopask also told the judge a story about Crandon having a salary of $43,000 in 2008 when the larceny scheme began but what she left out was Crandon’s salary was cut the years following that. Perlstein confirmed for me Crandon’s salary cut and public IRS filings at Guidestar.org show the non-profit’s board actually cut a lot of salaries in the 2009-2010 fiscal year—to the tune of $383k with revenue down $180k compared to the previous 2008-2009 fiscal year. In fact, Perlstein who made $210,947 in 2007-2008 had her salary cut to $152,230 for 2009-2010. So it looks like someone on the board’s compensation committee got a conscious and thought salaries needed to be realigned to the organization’s revenues. CGC’s 2011 public tax filing shows Perlstein got her salary bumped up but only to $161,849 for 35 hours an average work week and Crandon’s former supervisor Elizabeth Schwartz made $105,405.

Perlstein’s fundraising director Jeannine Egdorf, who says she’s already got enough donations to pay for the cost of tomorrow’s fancy Greenwich party after she did a lot of the work in-house and stopped wasting money on things like fancy invites, expressed serious worry about not raising enough in private donations. Although after a few questions I learned her goal of $1.6mn by their June year end is almost met. So with Jeannie working hard and near the non-profits financial goal what’s the big worry about the news coming out before tomorrow benefit? Enough to see a State Attorney push to delay an AR hearing and keep a woman who hasn’t been sentenced yet in jail longer?

Conopask cozy relationship with the non-profit that does some of her boss David Cohen’s forensic work for them was evident in court yesterday. Conopask kept rolling her eyes when Crandon’s attorney DiScala would speak and I heard her apologize at least three times to Perlstein and a rep from the DCH for having to wait in the court room like the rest of the victims for their turn in front of the judge. I guess it’s good to have such ‘special friends’ in the State Attorney’s office.

Judge Povotator ended up ruling Crandon wasn’t going to get AR because he said the program was designed with the goal of granting accelerated rehabilitation if the state didn’t consider the crime very serious. Povotator said, “This was a case with issues of systematic exploitation of abuse of trust and public dollars”. Then the judge went on about kids being affected and said he ‘can’t grant a program that says this crime is not a serious matter.”

Attorney DiScala said after he heard the judge’s ruling, “I’m disappointed but think the judge issued a reasonable judicial decision and took our arguments to apply for AR seriously.”

Pearlstein said she was glad about her former employee not getting AR because she didn’t want Crandon to get out of jail and be able to apply for another job without a potential employer finding out about her stealing in a background check. She also told me, “maintaining the confidence of the community and confidence of the families her non-profit services was her first concern in the case.” Or as one mother who was in the court room said after the hearing “It looked like today was all about preserving the Executive Director’s image and that of her non-profit.”

Crandon’s next court date is May 24th where once again she’ll stand handcuffed in a Stamford courtroom while lawyers and judges debate her fate.

The real lesson here is don’t steal and if you do it from a non-profit tied into the State Attorney office that deals with kids judges in Connecticut are going to put you in jail and make sure you have a visible life-long record. Crandon whose most serious charge is a class-B Larceny felony faces up to 20 years in jail. And now that she could have a felony record it’s likely going to take a very long time to pay back the $71,000 the non-profit’s insurance company is out; as life after jail will likely equate to Crandon flipping burgers for a below poverty wage.

Editors Note: Angle Crandon is African American and very over weight. Her parents came in from Ohio to show support in court. No one from the Stamford Advocate who first reported on Crandon’s case this December bothered to show up in court to report out the rest of her story or investigate the State’s case. Even rookie court reporters know facts are often left out in police reports and shouldn’t be the sole source of any reporter’s story when a few questions or observations can deliver a bigger view to the reader. I don’t usually cover criminal cases but this non-profit has ties to HedgeFund Cares and has had hedge fund donors in the past. But what most alarmed me about this story was State Attorney Conoask attempt to delay Crandon right to a speedy trial to help a victim fundraise-that simply just doesn’t sit well with me.

Disclosures: I have never used the services or donated to CGC. I have used the legal services of BachandDiScala. If you are a defense attorney who has ever had a possible judicial problem with Attorney Conoask I’d love to hear from you-don’t worry I won’t tell her you called.

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Sat 14 Apr 2012

Who bailed out Mitch Vazquez New Canaan Threesome Assisant?

Posted by Teri Buhl under Hedge Fund Fraud, Police Ethics, Sex
[5] Comments

I got my first face to face glimpse of the personal assistant, New Canaan trader Mitch Vazquez had arrested, in Stamford Superior Court this week. Helen Kapoutsos’ court appearance was nothing more than a status hearing where the DA tries to get Helen to plea and nothing happens when she says no – so her case still sits on the pre-trial docket in limbo.

Helen was rail thin in her tan plaid pants and white crocheted sweater that hung off her frame—cloths that looked like they came off the racks of H&M. Her body and demure doesn’t give clues she’s an exotic dancer and registered escort when you stand besides her. But one thing’s for sure her mug shot ,linked to stories on the arrest, doesn’t reflect her stunning beauty. A glimpse of her doey big eyes and button like rounded features all blended in with this buttermilk white skin turned the guard’s head. This 28-year-old chocolate brown haired woman’s looks stand in contrast to Vazquez live-in 47-year old blondie girlfriend Pamela Chiesi.

Helen who is facing a larceny felony charge for allegedly stealing $170,000 from her ex-threesome partner/boss, continues to plead not guilty. Meaning it could be a year before the case gets to trial and we hear her side of the story– so for now most reporting on her case is a one-sided NCPD warrant report. That kind of coverage doesn’t offer readers much so I dug deeper and learned this nugget of info while researching my story about the active Swing Scene Vazquez is involved with in New Canaan. The question that kept coming up is who forked over her $10,000 bail and who’s paying her expensive legal defense. Her New Canaan police report says she was writing checks from Vazquez account to cover her rent at her West Hartford apartment. So I have to wonder if she could afford this legal defense on her own.

A clue could be in Helen’s response to the alleged stolen money when the New Canaan police interviewed her on the phone from California the first week of November before they arrested her. She says Mitch was ‘getting jealous’ of all the time she was spending with her boyfriend Jimmy and as a result he fired her. Mitch told the NCPD that Helen’s claim of firing her for ‘not spending enough time with him and Pam is ridiculous’. The warrant report is unclear about who actually paid the bail… So I showed up in court and posed this question to Helen this Thursday on the marbled first floor halls of the Stamford Court house but all I got was a bright eye stare without a response. Her lawyer Frank Bevilacqua barked back “No Comment”, as I kept walking beside them asking if Mitch had paid for her bail or if she was going back to him. Helen’s attorney then grabbed his client’s arm and jetted for a conference room. He actually booted out a women and her baby who were quietly waiting in the room so Helen could run away from my questions.

When they came out of the conference room I tried to snap of shot of Helen with my cell phone so readers could get a better image of the women Vazquez allegedly paid for over a year to have threesomes with but her lawyer grabbed my hand to yank my phone away and called for the Marshall to seize it. I’ve never covered a criminal case before and learned I actually have to get permission from the Court Administrator in Hartford to take a photo of a defendant in the courthouse. Luckily the head marshal gave the phone back when I proved an hour later I was a journalist but unfortunately visual footage of Helen will have to wait till the next time she’s scheduled back in court and I get approval. That is unless any of Helen’s other ‘escort clients’ want to send me some photos.

For now we don’t know who really paid for Helen’s bail or what the heck Mitch was thinking when he sat down with his attorney Mark Sherman and told the local cops a story about Helen stealing from him. Remember according to Helen’s warrant report Mitch had to subsequently tell the NCPD he omitted the details about their threesome sexual relationship because ‘he was embarrassed’.

There is an underbelly of complicated motives between the interpersonal relationships in this sex scandal that I’m still trying to wrap my arms around. It’s been cultivated in the new money atmosphere of this Wall Street bedroom community (New Canaan, CT). A town who boast it’s the ‘Next Station to Heaven’— whose town council holds Friday coffee talks worried about how news will affect its ‘families first’ image – yet has a substantial portion of its married couples sharing their partners sexually. So stay tuned as my upcoming explosive story on Vazquez and the swing scene will try peel back the onion and show there is a real storm brewing in New Canaan that’s even more sordid than what Ang Lee showed us in his epic film The Ice Storm.

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Fri 30 Mar 2012

UPDATE: Swinging in New Canaan

Posted by Teri Buhl under Sex
[2] Comments

My crowdfunded story ‘Swinging in New Canaan’ is in the production stage now and I’ve hired an experienced documentary editor/cameraman for the video part of the story. Digital Editor Ben Churchill worked with actor Joey Pants on his PBS documentary and our first day of filming was a big success thanks to his skill with the camera and vision for bringing a print story to life. We raised $4000 for this project (via PMF & direct reader donations) but $250 is still not paid for. So I am calling for a few more donations this weekend before I need to pay Churchill to finish editing on Monday. Every donation no matter how small ($10) or large ($100) makes a difference and can be sent via paypal at teribuhl@gmail.com.

Vazquez recent reaction to my stories make it look like he’s worried about any reporting on the regulatory problems he’s experienced during his trading career and the Forex broker dealer he owns GCI Trading.

You see the New Canaan Millionaire took out a google ad that brings up a self-written bio of his life at the top of a search page when you google ‘Mitch/Mitchell Vazquez’. I noticed it after he withdrew his temporary injunction — an unsuccessful motion he tried to use to get his name out of goggle tags in my stories. You’ll notice Mitch leaves out the 5 year SEC enforcement action against him from his work at Bankers Trust. And his take on why the CFTC issued an enforcement action for another 5 years reads like a top public relations spin doctor wrote it for him.

The money readers have sent in already allowed me to get access to court documents that help support the alleged drug abuse and possible financial violations Mitch Vazquez is involved in. Actions which I believe help fund and fuel his life style as the “King of Swing”. Together we can get this important and interesting story to print.

So if there are people in New Canaan that want to express their view on camera about the active Swing Scene in New Canaan there is still time to get you on tape. Please contact me at teribuhl@gmail.com by Monday morning. All tips are confidential unless you choose to go on the record and I appreciate those that have.

Thanks in advance for your support and the help of Max Keiser and Lauren Lyster ,host at international television channel RT, for getting the word out about this story.

UPDATE 4-1-12: The digital editor is fully funded now. Thanks www.PiratemyFlim.com members and readers for your donations this weekend! Additional donations are always welcome and appreciated.

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Sun 25 Mar 2012

Is Steven Guynn’s New Canaan Mistress a Scammer?

Posted by Teri Buhl under Police Ethics, Sex
[10] Comments

UPDATE3-26-12: Longevity expert Daniel Vitalis has now backed out of doing Jeannette’s next Eco Tour in Peru. The one scheduled for August that she is desperately trying to sell. His assistant told me today, “Daniel has actually decided to cancel the Peru tour due to the recent unfolding of the story with Steven Guynn. Daniel personally had no idea that this was going on in the background and decided he would rather cancel a project that was being funded in such a way.”

Original Story
Another New Canaan finance bigwig is in the news for a sex scandal that involves extramarital sex and possible physical abuse. Wall Street lawyer Steven Guynn got slapped with misdemeanor assault and threatening charges last week when his long time mistress called 911 after a disagreement at her New Canaan love shack on Main Street.

The New York Post had a field day with the story publishing sexy photos of the European mistress Jeannette Schaefer and Guynn’s $3.2 million family home at 309 Laurel Rd where one of the alleged fights happen. Schaefer, a natural blond from the Netherlands who was also married when she first met Guynn, has played well into the role of victim here even though her claims of abuse tie her to an affair with a very married Mormon man who she admits taking money from. Guynn’s, been slaughtered by the press as the bad guy but a little digging shows his accuser has some questionable behavior of her own.

Steven Guynn 5 bed 5 bath New Canaan Home

In September an anonymous poster published a warning about Schaefer, who goes by Jeanette Kielo Dussel in her work as a raw food healer and tour guide, claiming she doesn’t have the new age training she advertises. When I asked Jeanette about the fraud claims on Friday, she shrugged it off as a vengeful move by her ex husband, William Schaefer, who sued her for alimony payments when she left him for married Guynn. She also didn’t seem too upset about the New York Post outing her name telling me in an interview she thought “Who Cares” after she read their story. This might be because any press is good press for the 41-year-old mistress who needs to sell wealthy travelers on shelling out coin to roam through a Mexican jungle and eat raw food on one of her ‘Eco Tours’ if she plans to support herself. You see in the last few months the mistress has been hitting up anyone with a celeb name to join her nature walks in what appears to be a move to add credibility to the operation – a company incorporated for her by Guynn in September 2009.

During the first week of March Jeannette showed up at a NuSkin event hosted by New Canaan’s New Balance store where 90210 TV star Ian Ziering was promoting the benefits of the company’s anti-aging products. Ian told me she chatted him up for a while trying to impress him with her knowledge of raw foods and tried to sell him to join one of her eco tours. He politely declined. A month before that Jeannette tried to get a well-known alternate healing medical practitioner, Dr. Klinghardt, to allow her to exhibit for free the eco tours at a paid medical training seminar he was hosting in New York City.

Debbie Floyd, Klinghardt’s business assistant for the Klinghardt Academy, told me Schaefer hasn’t completed the full training with their program and doesn’t have a certificate from the Academy. In fact last year she only attended half the training in New York and then according to Floyd had an emotional breakdown claiming a family death to get her money back from the seminar. Floyd told her she couldn’t attend this years training unless she paid for it after Jeannette called to try to sell her on getting Dr. Klinghardt to attach his name to her Eco Tours. But Jeannette doesn’t seem to take no’s well –after Floyd turned her down Jeanette showed up at the February event anyway. According to Floyd the mistress snuck in during a break making a beeline for the famed Doctor to try and charm him into joining the Eco Tour. When Floyd saw her chatting up her boss she says she politely pulled him away from Schaefer.

Floyd noticed something else this weekend while reviewing Jeannette’s RawFlora website. She says the mistress has a proprietary food cocktail of Klinghardt’s posted on the site and re-sells the expensive supplements to make it. The problem is Klinghardt does extensive training with real medical doctors to subscribe the alternate medicine recipe because not all patients need all the supplements – supplements he claims help with problems like Lyme disease. In fact Floyd told me the cocktail Jeannette has posted on the site is actually outdated and not the one Dr. Klinghardt current subscribes.

In our interview on Friday Jeannette told me she had done training with the Klinghardt Academy and advertises she can also administer ATR therapy. Autonomic Response Testing was trademarked and created by Klinghardt and is practiced at his Academy of Neurobiology. Jeannette would not return a follow up request for comment when I asked if she could show me a certificate of training from Klinghardt.

The anonymous site “Jeannette Kielo Dussel is a Fraud” writes:

Do NOT take health-related advice from this charlatan, and especially beware of any products, tinctures, or other “remedies” she offers, She has endangered the health and lives of dozens of victims in her very brief “career” as a health “authority” — she is no such thing; just a greedy grifter and predator!

There are no names of injured parties from her raw food business or comments on the site from others claiming they’ve had a bad experience with Jeanette. She list a few testimonials on the RawFlora site but also took down her bio page detailing her training this weekend.

Guynn’s attorney Christopher Young posted a comment on the site asking for anyone who has been a victim of Jeannette to contact him. It will be interesting to see if the New Canaan Police have once again lobbed on criminal charges, with possible damaging effects to this Big Law attorney’s career at King & Spalding, without doing enough background investigation into the source of the complainant.

When Jeannette was asked if she is trying to hire a civil lawyer to sue her boyfriend for the alleged assault which gave her a black eye she told me she never do that. But people familiar with the drama say Jeannette tried to contact a lawyer in New Haven to file a civil claim against Guynn but the lawyer wouldn’t take her case. Even though she asked for a full no-contact order on Guynn, Jeannette told me she’s been in contact with Guynn’s attorneys. It’s unclear if it’s to try to get some form of monetary payment from her now ex-boyfriend or maybe she’s backing down from her statements to the New Canaan Police about Guynn’s physical attacks. The case has been moved to the domestic violence docket which means Guynn may never have to plea and a deal for anger management classes along with a continued no contact order could be negotiated.

Guynn’s attorneys at Gulash & Riccio had no official comment for this story.

Jeannette told me in an email Friday, “I’m not really angry with Steve. His violence is a conflict within himself.”

Allegations of physically abuse are usually scaring and typically a traumatic life event for women but Jeannette’s breeze comments during our interviews showing little care for being outed as a mistress of a high powered man who beat her –she seems dismissive of the event like it’s a shrug off. One thing’s for sure – the culture of sex outside of marriage by Wall Street titans in this town keeps popping up in a very public way these days. A theme I’ll be reporting on soon in my crowdfunded investigation on Swingers in New Canaan.

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Mon 19 Mar 2012

O’Hora’s New Canaan GOP Leadership is still ‘My Way or The Highway’

Posted by Teri Buhl under Politics
1 Comment

UPDATE 4.20.12: CT GOP Executive Director Brian Cafferelli wrote to former NCRTC executive Roy Abramowitz this week informing him the State Central GOP wasn’t going to form a dispute committee to investigate the methods O’Hora used to not fill a vacant RTC seat last month.Abramowitz had filed a complaint in March with State Central after O’Hora wouldn’t let RTC members vote on him filling the vacant seat. A former NCRTC member who had encouraged Abramowitz to file the complaint said upon reading Cafferelli’s letter the State GOP is understaffed these days and doesn’t have the bandwidth to deal with local RTC disputes. Abramowitz who was visibly dishearten by the lack of CT GOP action told other New Canaan Republicans in an email this week, “I now understand why the Democrats control this state. We have leadership without backbone upstate.” The outspoken former RTC treasure was voted to be a State GOP delegate last month and said he’ll continue to serve that role.

Original Text
The red-faced chairman of the New Canaan Republican Town Committee, James O’Hora, was re-elected unopposed last week. Apparently no one else would do the volunteer job which involves political hob-knobbing with other people’s money. O’Hora who was the subject of a campaign finance violation story I previously reported, showed he would continue the same style of leadership this term – which means making up rules to fit his agenda best.

After Wall Streeter Patrick Swearingen backed out of taking his new seat on the NCRTC, a week before confirmation, O’Hora was faced with his nemesis, RTC Treasurer Roy Abramowitz, being inline to fill the vacant seat. A notion O’Hora apparently couldn’t stomach because instead of following an election protocol he set precedent on; he just rallied his buddies (newly elected RTC members) to come up with a game plan to make sure Abramowitz wasn’t back on the RTC challenging the way he blew through about $80,000 in donated GOP funds. Why Swearingen suddenly bailed on the job using a year old Dodd-Frank conflict of interest excuse is kind of odd but maybe he just didn’t want to be part of O’Hora’s gavel slamming leadership.

The local paper got wind of the tussle and reported some of the facts around O’Hora’s move to allow Betty Lovastick to take the vacant sent because she was next in line from the January GOP caucus vote. But Lovastick apparently didn’t want to have anything to do with a RTC run by O’Hora and wouldn’t accept the seat. The next candidate with the highest votes after Lovastick was none other than Abramowitz.

Abramowitz, who knew O’Hora as gunning to keep him out of the RTC, attended the March 12th meeting as the Treasurer of the then-seated NCRTC to deliver his last executive spending report. The meeting was also a place where newly elected RTC members were suppose to be sworn in. But instead it turned into a pissing match of old v. new RTC members trying to determine how the vacant seat would be filled. What the local paper doesn’t come out and explain is O’Hora basically blew Abramowitz off as already being out of office. The Chairman did this when his nemesis tried to move through due process explaining why he should be next in line to take a seat on the new RTC pursuant to O’Hora’s own election protocol that he’d just established by letting Lovastick take the vacant seat. Once again the RTC Chairman wanted to write his own rules making sure his buddies on the new Town Committee would elect the replacement candidate. This magical interpretation of their bylaws suddenly sets up a committee of new RTC members to vote on the vacant seat; basically side-stepping the rest of the town Republicans who’d already voted for RTC members they wanted to represent them. O’Hora told the New Canaan Advertiser, “the new committee would be taking its time and interviewing candidates before voting to fill the seat.”

Which really means O’Hora will ignore the problem till no one is talking about it and then they can fill the seat with someone who’ll fall in line with the O’Hora agenda.

State Central Republican Committee executive Bob Lutts, their rules expert, did offer this detail about the process O’Hora would have to go through if he had moved forward placing Betty or Roy into the seat. “While they might have practiced this in the past there is no set rule on filling vacant seats with candidates who didn’t get the full confirmation votes from the last election. If O’Hora had moved forward with Betty or Roy he would still have to get the majority of the current members at the last RTC meeting to confirm one of them,” said Lutts.

Abramowitz told me he actually tried to call for that vote with the 8 old RTC members present but O’Hora started yelling there would be no vote at the meeting for the vacancy.

O’Hora did not respond for comment for this story.

The New Canaan Advertiser reporter Matt Dalen told Abramowitz he wanted to write ‘a fair piece’ about the vacancy and possible rule violations but I found it odd he didn’t source or call the State’s Republican expert on election law and RTC rules, Bob Lutts. Instead we saw some kind of ‘expert opinion’ from a trusts and estate lawyer, Bill Osterndorf, who’d just buddied-up to O’Hora and got Abramowitz former job as RTC Treasurer. It’s interesting to note O’Hora publicly supported Osterndorf when he ran and lost for probate judge in 2010. The rest of the New Canaan RTC actually didn’t want to publicly support one Republican against the other for probate judge and opposed giving money for an Ostrerndorf endorsement. A move, according to former RTC members, O’Hora was pissed off about.

Abramowitz isn’t the type of person to take much lying down. Republicans have told me it’s too bad there is so much ill will within GOP leadership but I also watched a few encourage Abramowitz to take this up the food chain and file a complaint with the State GOP. Unfortunately none of them would come on the record with their names to publicly denounce O’Hora’s railroading. So now an Article two Section 10 appeal was sent off last night by Abramowitz who now gets to wait and see if the Connecticut Republican State Central Committee takes this situation seriously — or just blows it off as local infighting by a bunch of puffy chest New Canaan egos .

In-kind donations, I previously reported were not properly accounted for under O’Hora’s last term, still haven’t been dealt with says Abramowitz. It will be interesting to see if the new Treasurer uses NCRTC money to make the donations right or follows O’Hora’s prior leadership and figures no one but the local Dems will complain about their consistent finance campaign violations. In addition to that we have a local paper, owned by the town’s Republican treasurer Hersam, that picks and chooses which facts to report—rarely holding New Canaan Republican’s accountable for any miss-conduct. Now if they wanted to step-up their reporting they could look into the current debate on how many of O’Hora’s Hartford cronies he’s trying to comp for the NCRTC’s main fundraising event, the Lincoln Dinner. A fundraiser that O’Hora has now turned into a retirement party for State Rep John Hetherington. I’d be asking why the fancy dinner ticket price went up from $125 to $150 – is Chairman O’Hora expecting wealthy New Canaan Republicans to cover the dinner’s funding shortfall? To me, it sounds like another plan to amp up O’Hora’s personal political piggy bank again, also known as the NCRTC budget.

Why Abramowitz still keeps coming back to the fight –attempting to make local spending fiscally responsible when some of his GOP peers just keep mudslinging his character is beyond me—but I’m sure more than a few New Canaanites seeing him publicly try to voice concerns about his own damn party think it sure is refreshing and fun to watch.

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Mon 5 Mar 2012

Crowd Funding Mitch Vazquez Story gets Strong Start – New Canaan Trader Worried?

Posted by Teri Buhl under Hedge Fund Fraud
[4] Comments

UPDATE 3.10.12: You can see me on RT’s popular show The Keiser Report with Max Keiser and Stacy Hebert today talking about the battle to get this story published. We are close to our fundraising goal. Your donations no matter how small or large are greatly appreciated.

Surprise Surprise. I learned asking readers to help pay for a hard-hitting piece of investigative journalism, via crowd funding, works. We raised half of the $3,000 project cost in the first 48 hours and as of today 2/3 of the project is funded. Now an AOL publication, New Canaan Patch, has caught wind of my legal battle with this Wall Street bad boy, Mitch Vazquez, and wants to write a story about it.

As I previously reported, Vazquez attempted to get a temporary injunction against me for a popular story I wrote on him this January. I’ve given my lawyer permission to be interviewed by the Patch journalist and even agreed to give them a few juicy direct quotes for their story. But considering I just reported a story that got the last New Canaan Patch removed as editor (they still let Devlin write food reviews) I’m not counting on the Patch story to resemble quality unbiased journalism. (But hey maybe they’ll surprise us.) So I’d like to expand on the moves Vazquez and his expensive lawyer Mark Sherman made to get a temporary injunction against me. The rare legal action was an attempt to get the original story on Vazquez alternate sex life and regulatory actions pulled down.

The Patch reporter on the story, Chandra Johnson-Greene, emailed me Friday saying, “When speaking with Mark Sherman, he told me that the injunction was withdrawn only after you posted an update to your original post, which corrected the statements Vazquez found to be libelous.”

Now Mark Sherman is a pretty good attorney, so I’m surprised he’d give a factually incorrect statement like that to another journalist. (If Sherman’s name sounds familiar to you it might be because his father, Celeb Greenwich lawyer Mickey Sherman, plead guilty to tax evasion in 2010.)

Vazquez temporary injunction against me was filed on January 28th. The aggressive legal motion asked a Connecticut State judge to force me to remove Vazquez name from the ‘tags’ in the story so it wouldn’t come up in a google search of the New Canaan trader. It also ask for a few paragraphs in the story that described Vazquez’s SEC and CFTC enforcement actions to be removed because Vazquez thinks they are libelous and are causing “devastating effect on his personal and professional reputation”.

Now Mr. Sherman and I actually had a conversation about the story, on January 7th, weeks before his client filed his frivolous lawsuit. He tried to get the whole story taken down which I declined. We then debated a few sentences about regulator actions against Vazquez Forex trading business. I agreed to update the story and add an editor’s note which is seen at the bottom of the story. At no time did I say or admit any of the sentences I wrote were libelous. I emailed Mark after the update was live and never heard back from him.

Then boom weeks later I’m hit with the temporary injunction and libel suit. Sherman once again asked for the whole story to be taken down and I declined. It wasn’t till the weekend before our hearing ,scheduled for February 14th ,that I informed Sherman I’d secured a pro bono attorney from Bingham to take the case. Thus trying to squeeze or scare me with legal fees to stop reporting on his client wasn’t going to work. Mark Sherman than told me he’d likely drop the temporary injunction because I now had ‘fancy lawyers’ and he didn’t want to waste his clients money. And sure enough the day before the hearing I get an email that he’s filing to remove the temporary injunction claim in Stamford Court. The libel/defamation claim continued though.

I never complied with the temp injunction request to remove Vazquez name from the ‘tags’ in the story. Sherman argued ‘the complaint respects Buhl’s First Amendment rights and only restrict her free speech rights to the extent she is publishing defamatory material about him.’ Of course there hadn’t been a hearing yet to decide if anything I published about Vazquez was even considered defamatory so I (and the Harvard Digital Media Law Project who stepped in to help find counsel to fight the action) both thought this was nothing more than a very rich Wall Streeter Giant trying to bully an independent journalist. But this time the Giant backed off first and thanks to my readers generous donations this week we are now two-thirds funded to report the next story on Vazquez alleged misconduct.

Of course Vazquez or his attorney Mark Sherman could pull another slick-wilily legal move to try to stop this important story. I learned team Vazquez actually had some kind of ‘swingers fundraiser’ this Saturday at a hotel in Rye, New York. It’s unclear if it was to raise money for his lawsuit against me or simply fund more swinger events but with your support I plan to fight his efforts till the story is in big bold print.

If you haven’t already made a contribution you can do so at PirateMyfilm or donate via paypal at teribuhl@gmail.com. Thanks in advance for supporting independent investigative journalism!

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Wed 29 Feb 2012

New Canaan Threesome Trader Sues to prevent further Investigative Reporting

Posted by Teri Buhl under Hedge Fund Fraud, Police Ethics
[8] Comments

UPDATE 3.10.12: You can see me on RT’s popular show The Keiser Report with Max Keiser and Stacy Hebert today talking about the battle to get this story published.
We are close to our fundraising goal and your donations no matter how small or large are greatly appreciated.

Mitch Vazquez, the New Canaan trader who police reports show allegedly paid his personal assistant for threesomes and then got her arrested for stealing, has tried to squash future stories about his Forex business and alternate sex life. In a rare move Vazquez and his attorney Mark Sherman filed a temporary injunction against me at the end of January along with a defamation suit that also names CNBC as a defendant for writing about my first report on his SEC and CFTC enforcement actions.

Luckily when I told the Harvard Digital Media Law Project about the aggressive legal filings they jumped right in to help; securing a pro bono top media lawyer, Carol Head, for me from Bingham McCutchen LLP. If a temporary injunction was granted it would have prohibited me from reporting on Vazquez past regulatory bans and possibly his current problems in his foreign Forex broker dealer BEFORE a judge had ruled if anything I’d previously reported was even defamatory. In the view of many media lawyers I spoke with this type of action violates the core foundations of free speech.

So after Vazquez’s attorney learned I have a big law firm willing to defend my first Amendment rights to bring my readers the truth, they suddenly withdrew the temporary injunction motion the day before our hearing in Stamford, Conn. civil court. The New Canaan trader is still suing me and CNBC for defamation – in what I see has a scare tactic to stop the next investigative report I’ve been working on. A story that could make the movie The Ice Storm look like kiddy play as I’ve now uncovered Vazquez at the center of an active Swing life in New Canaan partially funded by millions made off companies Vazquez controls- specifically his Forex trading companies who regulators and foreign governments questioned looting of clients accounts and more possible illegal actions.

This type of investigative reporting takes time and money. I still have to pay expenses for copies of legal filings I’ve reviewed, travel for interviews, and a cameraman – so I am asking my readers to help crowd fund this story. I think it’s a story that will serve the public interest of citizens who live around Vazquez’s New Canaan and New York City homes; along with the foreign mom and pop investors who say they’ve lost their savings doing business with any of Vazquez’s trading broker dealers. With the considerable reporting and research expenses in this type of story I’m trying to raise $3,000 for this report and not allow a millionaire trader to use a lawsuit to squash the truth from coming out. You can make private donations at PayPal using my email: TeriBuhl@gmail.com or email me to arrange payment. Even donations of $10-$25 go a long way when thousands of readers get together to support investigative journalism. My goal is to print the story next month.

You can also join Piratemyflim, created by famed TV Journalist Max Keiser, to donate for this story.

Thanks for reading!

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