Are the Feds Gunning for Civil RICO against Steven Cohen or SAC Capital?

The DOJ has a hard on for famed hedgie Stevie Cohen and the rest of the financial press has suddenly just figured this out. Cohen, a stock trader who founded Stamford-based SAC Capital, runs a trading company that is facing a pending SEC lawsuit. What the SEC would sue for we don’t actually know yet but my fellow journalist are speculating it’s for insider trading because six other people who once worked for Cohen have been arrested for such securities crimes.

I’ve covered Stevie Cohen since 2007 for Trader Monthly when we put him on a pedestal as a top 100 trader simply for the amount of money he made in a year. Cohen-ites (his loyal band of testosterone fueled stock jockey traders) live all around me in lower Fairfield County and I’ve interviewed countless people who have worked for him or are family related. The man has created a cult like mafia club who even when he kicks your rear out of his firm for one bad trade are still ultra loyal to him. I’m consistently told “No trader is ever going to try to cross Stevie Cohen”. So getting a trader like Mathew Martoma, who was arrested last week for one of the largest inside trading profits the DOJ has figure out yet,is going to be really tough for Federal prosecutors. I know as a fact Stevie became aware of the FBI investigating him personally for insider trading as far back as 2006 – based on conversations Stevie had with people I spoke with. That’s why we are seeing press reports about the number of compliance people he has at SAC because he amped up that division of the firm once he knew the feds were on to him.

The DOJ is playing a game of chicken with Cohen by throwing in a paragraph in their recent criminal case against a trader who worked from him saying ‘the hedge fund owner’ was on a call discussing getting out of the stock the Feds think was traded with inside info. There was really no legal reason to put that detail into the complaint since they haven’t charged Cohen but it’s clear they wanted the public to hear they are coming after him. Now nearly every one of the SAC traders I have spoken with simply think there is no way Stevie is that dumb to have a 20 minute conversation with Martoma that would included Stevie hearing Martoma say he wanted to get out of the trade because he was just leaked material non public information about a drug trial. In fact the person they think would be dumb enough to have that convo is the man who ran and partial owned CR Intrinsic Matt Grossman. Stevie is really slick about moving risk away from his direct line of fire and since the DOJ complaint doesn’t actually name who Martoma spoke with all we can do is speculate and hope the DOJ who is leaking a ton of info to reporters is telling the truth.

I only know of one sloppy practice Stevie has done in the past which could set him up for a co-conspirator in securities fraud – he would have weekly calls with traders who held large positions on Sunday nights to get a status of why they are in the trade. Cohen knew his traders used expert networks and according to firms that worked with SAC he encouraged his traders to use them. Still using an expert network isn’t illegal as long as you don’t get secret material non public info from them. That’s why I’m hearing from people who have been interviewed by the Feds about Stevie that a one time criminal charge for insider trading isn’t their goal. Instead it’s a non criminal suit–they want to charge him with Civil RICO.

Think about it – we know there is a pattern of behavior coming out of SAC Cap to get inside info to boost their trading gains. So if they want to get the leader of this pact why not try a suit that doesn’t need a full burden of proof jury to convict but just a majority who thinks he did this. They also need a pattern of about three crimes that followed the same amo and they basically already have that. With Civil RICO the DOJ can also go after Stevie’s personal assets if they can prove he bought them with money earned at SAC Capital. Given about half of the $14 billion in assets the firm manages are Stevie’s that sure gives the DOJ a big bucket of money to go after. The DOJ’s goal isn’t to get an inside trading charge on him with maybe a few years of jail time; they want to totally obliterate Cohen, shut down any chance of his trading again, and then take away his 36,000 sq ft palace in Greenwich and leave his wife Alex and daughters with nothing to live on.

Now this might be a pipe dream to the guys and gals running the DOJ financial fraud unit but I am quite confident after over six years of time and money spent on chasing Stevie Cohen they won’t give up with out a down and dirty fight. The problem is proving liability and their under paid lawyers and investigators have an uphill battle against the mind of Cohen and his cartel of other hedgies he’s helped turn into millionaires.

I hear of office bets at Wall Street firms setting up pools on if Cohen gets arrested and most are betting indicted but not convicted. That’s how much power and smarts they think this trading titan has. I have no doubt that Stevie started his career at Gruntal using inside info to make money — in court filings with his ex-wife’s lawsuit his attorney never argues Stevie didn’t inside trade on RCA they just claim she can’t sue for it because it’s past the statute of limitations. (Patricia Cohen’s suit against her ex-husband Stevie Cohen is still ongoing in NY State Appellate Court) But what I have doubt in is the DOJ’s ability to get the mafiosi informant type of evidence they’d need to nail him…and that’s just a sad fact of our justice system.

Greenwich Hedgie Max Holmes now wants to be a Media Titan

A Greenwich hedge fund manager who ran a multi-billion dollar fund is quitting trading to getting into the media business. Max Holmes of Plainfield Asset Management, who was widely reported for being under regulatory investigation, has called his new venture EcQuant. Holmes started winding down his asset-back fund a few years ago after gating his investors money during the financial crisis for over three years. Regulators were investigating the hedgie for charging excessive fees on overvalued assets but no charges have been brought so far.

Holmes, who is also a part time professor at NYU’s Stern School of Business, claims to have a nifty new software that will “change the face and bones of the News Media market”. But what this means is a mystery as the rest of the company description is a gobbly-guke of pr spin claiming EcQuant’s ’20 developers’ can create monetary value for media content–with out explaining how. They even claim to be hiring!

It’s unclear how Holmes little after-hedgie-life company was funded but I’ve previously reported for DealFlow Media that Holmes took home at least $50 million in fees while his fund was gated and his pension fund investors earned nothing. Hopefully he’ll be a little more diligent with his staff this time and not hold recorded town halls that teach his crew how to hide information from the SEC.

If your a new client of EcQuant we’d love to hear from you. Max wouldn’t return an email for comment but if you want to reach Holmes he’s now at: max.holmes@ecquant.com or you can stop by his office at 60 Arch Street (2nd floor) in Greenwich.

Regulators Investigate Sun Trust Bank for Fraud

UPDATE 10-11-13: SunTrust was forced to settle with the government over the actions in this story which was first reported at Growth Capitalist. They had to pay over $1 billion dollars which lead to a negative 33 cent per share hit to earnings. It’s unclear if the whistleblowers will reap any reward from this sizable settlement.

UPDATE: You can see me talk about my Sun Trust investigation on RT’s top TV show Keiser Report today. Max Keiser also interviews me about the impact of the SEC investigation into JP Morgan – which I first reported on his show last year.

Original Text
A mid-size bank touted as a growth stock by analyst this year is under SEC investigation for selling billions of Alt-A loans labeled as Prime loans to Fannie Mae. I reported on the SEC investigation into SunTrust Bank on November 5th at Growth Capitalist.

According to whistleblowers, Atlanta-based SunTrust took advantage of a Fannie Mae program designed for the bank’s best of the best borrowers. They called it the Agency Shortcut Mortgage. In 2006, with pressure to keep earnings up as banks like Countrywide were laps head in earnings from resi mortgage origination, borrowers with good credit scores became a target for fraud by SunTrust. The bank needed high credit scores to get entry into the Agency Shortcut Mortgage program but after that SunTrust staff could manipulate the income and assets of the borrowers and force the GSE program to buy the loan. The whistleblower complaint alleges SunTrust did this in the billions from 06 to early 08.

Whistleblowers claim the highest level of management was directing the retail arm, wholesale, and outside mortgage brokers how to beat the Fannie Mae program and were encouraged to re-enter borrower income or assets over and over until the loan qualified. These whistleblowers say, once it was accepted in the Shortcut program underwriters were not allowed to ask for follow-up stated income docs like tax returns and bank statements. That’s because the Shortcut approvals were being done by SunTrust loan officers, branch managers, & mortgage brokers who were paid on volume instead of the bank’s underwriters who should have been hitting the approve button. These SunTrust interested parties basically circumvented the underwriting process by committing automated underwriting fraud. The result was Fannie thought it was buying tons of great prime loans from SunTrust.

It wasn’t till early 2008–right before the Shortcut program was terminated–that Fannie Mae limited the number of times their DU system could be re-run for a particular borrower to fifteen. While fifteen seems high Fannie took into consideration the number of hands that touched a loan from origination to funding. Subtle changes are often made in the underwriting process but the goal of Shortcut was to cut down on the detailed document request underwriters usually did. What this highlights is the laddering of income and assets loan officers were doing on Shortcut loans to achieve the ‘right mix’ that tripped Fannie’s DU system into approving the Shortcut loan–an abuse that must have been clear to Fannie executives who oversaw Shortcut. This questions the very core of Fannie’s system of risk controls along with how much their CEO, Daniel Mudd, knew about the health of his bank and didn’t disclose to shareholders.

SunTrust whistleblowers worked for a year to find a lawyer to get their case in front of U.S. regulators. The thought that the bank intentionally planned to cheat Fannie’s computerized underwriting acceptance program so they could improve origination volume was hard to sallow for a bank that’s managed to escape regulatory sanctions so far. I’ve watched whistleblower complaints filed for years now and the SEC will often sit on them for a long time before they start to investigate but with SunTrust the regulator got involved within only a few months. That’s because the mortgage fraud task force was already aware of other large residential mortgage originators doing the same thing. We saw proof of this when the DOJ acted last month and sued Bank of America for the sins of Countrywide’s ‘Hustle program’ with the GSEs.

Banks cheating to earn profits isn’t a new concept for main street to understand but how the Government Sponsored Entities allowed themselves to be cheated opens a whole other can of worms. In my report , at Growth Capitalist, we show a former regulatory enforcement lawyer discuss how and why Fannie isn’t the innocent victim here. On top of that think of the mortgage insurance that was sold alongside these loans which didn’t factor in enough risk. Then there are the second loans place on top of these Shortcut loans that another lender would have thought they were lending against after a prime loan was issued but instead it was a lower quality loan.

SunTrust told investors in September they thought they were through GSE putbacks and added hundreds of millions more to their putback reserves. But my story at Growth Capitalist questions how that could be true when they are faced with an SEC settlement on billions in loans executed with fraud. The bank’s Q3 earnings presentation shows putpacks have been requested on over $6 billion of resi loans with most coming from the GSE.

Editors Note: My story at www.growthcapitalist.com is behind a paywall that only paid subscribers can read. Great investigate journalism is with worth paying for and there are a ton more details in the story that make the subscription worth it.

After Arrest Spongtech Fraudster Metter loaded Radio Stations with Debt: Greenwich’s WGCH facing Eviction

UPDATE 4:45pm: The head of the Greenwich DTC, Frank Farricker, tells me he’s been try to reach BTR’s receiver, Michael Craven, and his Delaware attorney at Morris James LLP to make an offer on the Greenwich Radio station but so far they’ve refused to call him back. Craven has also refused to return multiple request for comment.

Original Text
The Greenwich Radio Station, WGCH, run by alleged penny stock fraudster Michael Metter has been sued for eviction after racking up over $140k of unpaid management company bills. Court documents filed this week show Metter, who was arrested for criminal fraud in 2010, has racked up near a million of unpaid debt while the courts allow him to run the radio stations after he was released on bail.

Metter was removed as CEO of the Greenwich station last month and the former COO, Jeff Weber, was rehired as a consultant to run the stations while they are trying to be sold. A receiver, Michael Craven, was appointed to monitor the assets of WGCH’s parent Businesstalkradio.net. The stations were forced into sale after the SEC was able to claim BTR as a relief defendant in the securities fraud suit against Metter and his penny stock company Spongetech because the regulator claims Metter used the station for money laundering in his Spongetech scam.

Since Metter’s arrest he’s loaded up BTR with so much debt that they are also behind on paying Connecticut state taxes, federal taxes, the stations’ vendors, and even some employees–but court documents show Metter continued to pay himself between $16,000 to $18,000 a month over the last two years.

The total bill for BTR vendors and creditors is $991,900 of which the Greenwich Broadcasting Company owes $195,362.

The Greenwich station landlord served a notice to quit the property as a result of nonpayment on July 24th asking WGCH to vacate their station at 71 Lewis St in downtown Greenwich, Conn by the end of the month. WGCH didn’t do it. The landlord stated the monthly rent was $5,647. Harrison Management Company then sold the overdue 10-yr lease, signed in August 2006 to 100 Maison St LLC, on September 7th. Harrison is listed in court records as being owed over $140,000. The new landlord filed suit on September 26th to evict and BTR’s receiver says he is now trying to negotiation with them to stay in the property. A fact the Greenwich Time reporters could have easily picked up on when they reported that Jeff Weber had been brought back after Metter was removed as CEO the first week of October– but they didn’t.

Weber is also the president of the Greenwich Chamber of Commerce. The receiver’s creditor spreadsheet, filed in court, shows the Chamber is owed $950 and even Weber has a claim of $24,000 against the radio company he’s working for again.

I previously reported on some of the BTR assets finally being sold at trade publication Growth Capitalist. This money is intended to go to the SEC for victims of Metter’s penny stock fraud. The Brockton Mass. station sold for $250,000 but after deal fees and cost the deal only netted $100,268 which has been placed in a court escrow account. Now BTR’s receiver is asking he court for $50,000 of the sale proceeds to pay some back rent so the radio stations aren’t forced out by their landlords.

There is also a sale contract signed, but not closed, for the Vegas station (KNUU) in the amount of $950,000. But that station is also facing eviction because Metter didn’t pay the rent. The Greenwich and Pittsburg stations have no sale offers. Metter has previously stated in court documents filed in the SEC’s case against him that he thought BTR assets would be worth around $6mn and the Greenwich station was listed for sale at $1.25mn. It’s unclear how Weber or Metter ever thought the Greenwich station would fetch a million sale price considering WGCH was unable to operate during Hurricane Sandy’s power outages because Metter had not bought the station a working back-up generator.

Unfortunately, the SEC’s plan to use money from the sale of the four BTR stations as restitution for mom and pop Spongetech investors has hit a big snag. BTR receiver, Michael Craven, hired a forensic accountant to validate a third-party secured claim against the assets of BTR by a New Jersey hard money lender Solutions Funding LLC. Last week Craven filed court documents stating Solutions Funding claim of $3.08 million is valid–this means the third-party lender will get paid before the SEC can collect any money for investors. Craven actually settled with Solutions Funding for $2.5 million and is waiting court approval to make them the senior secured creditor.

Court documents show the Vegas station has the most assets so it’s not likely the Greenwich or Pittsburgh station would generate a $950,000 price tag like the Vegas station has (a deal that still isn’t closed). So far the net proceeds to pay off Solutions Funding from the sale of the Brockton, Mass. station is only $50,000. So it’s not looking like SEC’s move to get any dollars out of Businesstalkradio.net is going to work out. The regulator did succeed in forcing Metter to sale the stations but now we see the beneficiary is going to be a high-interest hard money lender. What’s unclear is why did the SEC not inspect how Metter was using cash flow at BTR till it was too late. Why was he allowed to receive a six-figure income while rent wasn’t paid? Isn’t it their job to weed out people who habitually abuse the markets and securities laws?

Where the SEC Puts the JP Morgan-Bear Stearns Settlement Matters

JP Morgan disclosed they reached an agreement with the SEC today for the double-dipping scheme run by Bear Stearns mortgage traders. This was where the traders under Tom Marano kept billions of dollars that were supposed to go back to RMBS investors when resi-loans defaulted in the first 90 days. The SEC hasn’t officially accepted the deal yet and a court still has to approve it so we have ZERO info on how much Jamie Dimon’s bank has to pay and if there are any punitive damages.

Unfortunately with SEC settlements the bank doesn’t admit any wrong doing. So what’s important to watch here is where the SEC slots the funds. Will they place millions in their general fund or will the money go into something called a ‘fair fund’. Sarbanes-Oxley actually gave the SEC a mechanism to create a fund for aggrieved investors so they can get some restitution dollars back. In all fairness any money the SEC gets out of JP Morgan should be put back into the RMBS trust and paid out according to the waterfall for each security. It would be a little complicated to do but hey it’s the SEC and I’m sure they can hire a forensic accountant to sort it out. If that happens then the state and federal judges ruling on $140 billion of rmbs civil suits against the bank (it went up $20 billion in Q3 according to their 10-Q filing) could see it as an admission of guilt, which would really bolster the civil suits with fraud claims who are subject to triple damages.

Sadley we are not expecting JP Morgan to be fined by the SEC anywhere near the billions they should be. The bank’s 10-Q shows they only added $700 million to their litigation reserves in Q3 for a total of up to $6bn over what they have already expensed.

A few naive reporters have written stories today that the SEC settlement shows JP Morgan is getting out of the woods from its rmbs fraud and putback suits but it’s actually the opposite. The SEC’s suit doesn’t affect the billions the NY AG is trying to suck out of JP Morgan for the same crimes—he did sue for around $22 billion. But JPM’s real worry comes in the hefty payout they will have to pay when they settle with the monolines, institutional investors, and even the FHFA who sued for Fannie Mae and Freddie Mac. JP Morgan has been fighting some of these rmbs fraud cases for five years now and a few are set for trial next year.

Today’s news is really about Jamie Dimon finally admitting Bear Stearns traders did something really wrong to its own investors and JP Morgan is going to have to pay a lot for it.

Update 11-13-12: The WSJ is still running PR for Jamie Dimon and yesterday tried to tell readers that Bear Stearns executives won’t and shouldn’t be charged criminally. This is beyond embarrassing for the WSJ reporters as viewers of RT’s Keiser Report know I’ve been explaining for two years how much evidence the DOJ would have if they wanted to charge Tom Marano and his team. Nick Verbitsky, documentary film maker of the Bear Stearns movie ‘Confidence Game‘ even commented on the absurd reporting by the WSJ. It’s clear we are not going to get any decent reporting or analysis out of the WSJ but Reuters legal columnist, Alison Frankel has a great analysis on why JP Morgan is likely to pay billions in RMBS putbacks because of Bear’s fraud. Read it and you’ll see why setting aside even $6 billion in litigation reserves isn’t enough for $JPM.

Told You So: SEC Wants JP Morgan to Pay for Bear Stearns Sins

Last night the Financial Times broke news Jamie Dimon is willing to admit that maybe the Bear Stearns mortgage traders really did break securities laws and he should settle with the Securities & Exchange Commission. What the FT forgot to mention was I was the lone reporter in late January 2011 who reported JPM was under SEC investigation for this. A story I continued to report and warned on for the last two years at DealFlow Media and on RT’s top financial news show Keiser Report.

Most of my peers in the financial press have been afraid to report on this story. Even when JP Morgan admitted in their own 1st quarter filling this year that they’d received a wells notice –which means their regulator told them they are going to be sued if they don’t settle. Once again a series of my reporting on a financial institution committing fraud was proven right. The only thing I don’t know is how many millions the SEC will accept as settlement for these crimes against Bears own investors. The amount of dollars JPM pays the SEC isn’t that important though because the simple fact that they are willing to admit it wasn’t ok for Bear Stearns traders, under Tom Marano, to steal billions from their own clients gives the $100 billionish in civil rmbs fraud suits, filed by investors, a huge negotiating advantage.

The WSJ wrote today that people close to the SEC settlement talks told them the investigation was over, “whether Bear Stearns got compensation from lender for bad loans it had purchased to bundle into mortgage-backed securities, but then failed to pass that money on to investors by putting it into the trust managing the securities.” The WSJ actually learned about this when I first went on Max Keiser’s show last year, multiple times, and told his millions of viewers this is what the SEC was investigating. Then the WSJ read my story in May about JPM getting a Wells Notice.

A sad fact to the state of journalism in covering this story is Tom Marano, Mike Nierenberg, and Jeff Verschielser’s attorneys have done a good job of keeping their names out of the press. The day I broke my first story on the subject at The Atlantic we actually reported an update to the story that the SEC was investigating. That’s because I was able to confirm the SEC called people involved in the situation and started to interview them the day I reported the story. It ran for about 24 hrs and then I watched a pr man from Bank of America, where Nierenberg is head of mortgages, run interference with The Atlantic’s top editors and the SEC update was taken down. A pathetic reaction by the senior editors at The Atlantic.

Max Keiser at international TV network RT trusted my reporting and printed on his website the SEC was now investigating for all the illegal actions I’d just reported. Then my editors at DealFlow Media encouraged me to continue to report out the Bear Stearns traders story at their trade publication The Distressted Debt Report. Jody Shenn at Bloomberg copied some of my reporting on the subject but then dropped off the story. In fact it was really only me and a talented legal columnist at Retuers, Alison Frankel, who continued to report on the impact of the rmbs fraud litigation against JP Morgan.

Still we have no criminal charges filed against Tom Marano’s team and they keep beating motions to add them individually as defendants in civil litigation. I remember feeling a little shocked when I first called Mike Nierenberg’s pr people at BofA to tell them about all the dirty emails and whistleblower testimony I had showing how Mike and Jeff executed this fraud and Mike came back saying ‘I’m not worried about it’. Yep that’s the mindset of Wall Street’s top mortgage executives — it just a cost of doing business and the bank will have to pay for their sins.

JP Morgan was Bear Stearns clearing agent before they bought the bank in March 2008. That means they saw all the toxic rmbs Bear was selling – so I don’t buy the argument that it’s not fair for JP Morgan to pay for Bear’s bad boys. Remember JP Morgan had the chance to settle with the monolines who’d sued for only a little over one billion dollars when they bought Bear in 2008 but choose to rack up millions in legal cost for the last five years and fight these charges. Even after Bear had previously told the monolines ‘ok you kind of caught us’ so we’ll pay back what we stole at cost. Seriously read the Ambac complaint and you’ll see this spelled out. So Jamie Dimon crying wolf that he’s a victim of the US government forcing him to buy Bear Stearns is line of total BS and any reporter who prints that line is only writing pr statements for the nation’s largest bank. Why is it so hard for my peers in the financial press to admit these guys did something really really wrong?

Justice in Fairfield County? Morgan Stanley Banker Hate Crime Case Had Flaws

William Bryan Jennings, a Morgan Stanley Executive, had to wait nearly nine months before Connecticut admitted they didn’t have the evidence to litigate a hate crime case against the Darien, CT native. Felony charges were brought against the banker in February after a New York cabbie told the Darien police he’d been assaulted by Jennings over a dispute about the price of a cab fare from New York City last winter. The Queens-native cabbie was Muslim, the banker rich & white—a scenario that created an easy target for supervisory assistant state’s attorney Steven Weiss and his boss, David Cohen, to show Main Street they’ll prosecute bad behaving Wall Streeters. Except in this case the banker became the victim.

A review of the request for a warrant, Darien police notes the night of the incident, Jennings signed statement, and a motion challenging the process the local cops and states attorney went through to get to an arrest show significant evidence was left out of the judicial process. Most of the information in Jennings own statement to the Darien police, signed on January 28th, was not in the warrant request filed by Darien Detective Chet Perkowski. Attorney Weiss claimed when he dropped the charges against Jennings it was because the cabbie, Mohamed Ammar, had not been honest about having the weapon, a pen knife, this whole time. A fact Weiss actually learned in May but waited till mid-October to disclose in open court.

The 2 ½ inch pen knife was allegedly used by Jennings to stab the cabbie in his right hand when the cabbie abducted Jennings after he wouldn’t pay the fare because he said it was over the usual rate. Darien’s Captain Komm told me they searched cab the night of the stabbing but never found the knife. In Jennings sworn statement he said he didn’t have the knife and thought the cab driver had it. Detective Perkowski actually mentioned this in his police notes but left this detail out in the warrant report which the judge used to sign for Jennings arrest.

Who had the knife was important because there was a he said-he said debate if the cabbie grabbed the knife out of Jennings hand and caused the cuts to his hand or if Jennings actually used the knife to purposely assault the cabbie.
“I told the driver that I had a knife in my possession and that I expected him to pull his car over and allow me to get out of it at this point. He again refused and I showed him the knife so it was clear to him that I had one in my possession. At no point did I attempt to make contact with the driver (with the knife or otherwise). The driver reached towards my hand in an aggressive manner and attempted to grab the knife from me. I released my grip on the knife and, at this point, I believed he had the knife in his hand,” wrote Jennings in his police statement.

Jennings goes on to state the cabbie actually stopped the taxi in the middle of Post Road (that runs through Darien town center) and got out of the driver side door.
“I feared that he now had my knife and that he had the opportunity and intent to harm me physically so I grabbed my belonging and ran as fast as possible up Leroy Avenue,” wrote Jennings.

These statements were never seen in the warrant report or the multiple news stories about the attack but could be found by any public citizen or journalist if they went to the Stamford court house and request the file on the case – like I did.

Officer Perkowski appeared to want to build a case against Jennings with the logic of Jennings not coming to them first to report the crime so he must be hiding something. Perkowski stated in his warrant report that when he sat in the cab he thought it would have been impossible for the cabbie to reach back through the partition and grab the knife from Jennings. If true that would make Jennings statement not credible. But when Jennings attorney, Gene Riccio, inspected the cab he said it would have been possible. He also stated in a motion to dismiss that State’s attorney Weiss also came to this conclusion. In an interview with Darien Captain Komm he told me attorney Weiss had actually never seen the inside of the cab only photos so there are unanswered questions on if Weiss thought officer Perkowski was mistaken. Weiss has refused to answer reporters’ questions about the case and only made comments in court. Komm told me he thought Weiss stood by the police work in the warrant report yet he dropped the charges?

The level of injury was also miss-stated in the warrant report. Medical records of cabbie Ammar show he only had stitches on the middle part of his right index finger and not his palm. Darien Officer Whyte, the first officer on the scene, wrote in his police notes “the night of the incident Ammar said he was stabbed multiple times in his right hand.” Whyte did note he saw the cabbie’s right hand was bleeding and “had small slice wounds that would have been caused by a sharp object”. Whyte stated the EMTs cleaned and bandaged Ammar’s wounds but he refused further medical treatment. Ammar later told the Darien police he went to New York’s Roosevelt hospital to get treated and needed 6 nylon stiches in his right finger. Medical records show Ammar’s doctor wrote there was no visible tendon or bone and he had full sensation and motor function intact. The cabbie left the hospital with a bill, before insurance, of $1169.52.

Ammar’s wounds were reported as a violent stabbing in the press. A media interpretation Jennings attorney had problems with. Attorney Riccio wrote in his motion to dismiss this June, “Does probable cause to arrest exists where the description of the assault and the injury sustained by Mr. Ammar are not supported by the medical records and photographs of the injury?”

The state’s attorney had used statements the cabbie said Jennings made to get the felony charge for ‘intimidation by bias’. The warrant report shows Ammar telling Darien cops Jennings yelled, “Mother fucker I’m going to kill you, you should go back to your own country.” This was allegedly said after Ammar  overcharged him for the fare and then drove off with Jennings locked in the car when he refused to pay $300—the NY taxi rate chart shows the fare should be $204. Ammar also said Jennings made threatening statements about paying $10,000 in taxes to the town so the cops wouldn’t do anything if Ammar called them. Town records show Jennings actually is assessed to pay $29,852 in taxes on his home.

The problem is Officer Whyte’s police notes, taken at the scene, don’t have a word about hate statements being made by Jennings. Yet those alleged facts, witnessed only by Ammar and Jennings, made it front and center in the warrant report filed weeks later. You see Darien police records show somehow Ammar remembered these hate statement when Detective Perkowski did a follow up interview. Jennings consistently maintained he didn’t say anything like that. Court records show Jennings had no prior disturbance of the peace or hate-like charges filed against him in the past. There is nothing in his FINRA broker check record that shows prior criminal actions.

There is a federal law that mandates States track all reported hate crimes even if it’s only a verbal threat. In 2010 Darien had no assault hate crimes reported but its poorer neighbor city, Norwalk, shows eight were reported. In 2011 Darien had one hate crime based on race filed and Norwalk had five. In 2010 for all of Connecticut only one assault hate crime was reported against a Muslim, 37 were reported against Jewish people. The report filed by Commissioner Ruben Bradford says in 2010 there were 72 hate crimes reported against people (they also track property that is vandalized) of which only 8 were with an injury that needed treatment. In 2011 only 9 out of 82 people were assaulted with an injury that needed treatment. The report shows in both years about 20% of the hate crimes happened on a highway/road/street. Jennings faced up to ten years in jail if convicted of the assault because a hate crime was attached to it. With no weapon and a he-said he-said series of statements why did Stamford’s state attorney go so gung-ho with pursuing these charges against a rich banker? It’s a case with a lot of holes in the State’s attorney’s process of justice that is still answered.

When I asked Darien’s Captain Komm if he ever remembered a hate crime charge in the town, that was headed for trial, during his long tenure on the force he said no. He also said the Darien police asked state’s attorney Weiss if they could charge the cabbie with abduction and he said “no only go after Jennings”. Not surprisingly the State’s Attorney office is mum about how many hate crimes they’ve brought that had to be dropped.

Court filings show attorney Weiss knew since the early summer the cabbie’s statements were not adding up. So why did he wait till the weekend before the October trial was set to start to tell the cops he was going to nullify the charges. Darien PD told me Weiss even spent the state’s money issuing subpoenas for the cops and cabbie to testify at trial. Jennings lawyer filed at least three motions to dismiss which piled on the banker’s attorney cost. Weiss was likely trying to bluff Jennings into taking a plea deal after Judge Provodator ruled their Franks Motion would not go forward and Jennings couldn’t put the cops on the stand before trial to question them about their shoddy police work. But Jennings held to his not guilty plea and even requested a bench trial(judge rules without a jury) to speed up a trial date.

Weiss statement to Judge Provodator that he was not going to try the case because the cabbie mislead him about having the knife reads like bull shit. Jennings attorney Riccio is not talking about what he thinks motivated the charges being dropped and only made statements questioning the media’s pre-trial guilty verdict against his client based on one Darien cops warrant report. Most metro reporters are taught by their editors on day one “the cops lie and the perps lie your job is to find the middle”. But the wide variety of international reporters who covered this case wrote their stories copying other reporter’s work which hardly checked out the facts in the warrant report. Darien Times metro reporter David DesRoches was a rare exception and continued to follow the story with details presented by Jennings attorney that questioned the info in the Darien Police warrant report.

After the charges were dropped the Muslim cabbie cried race again and eluded to feelings that this was a white rich man getting off and an injustice occured. Ammar even said he’d ask the DOJ to follow up and charge Jennings but that isn’t likely to happen. He also told the Darien Times he was considering a civil suit against Jennings but a search in New York and Connecticut court records show nothing has been filed. The person who likely has a viable case to sue civilly is actually Jennings. He can’t sue the state’s attorney but can sue the town of Darien for the cops’ violations of his civil liberties via a false arrest.

Seasoned civil rights lawyer Norm Pattis told me, “It’s hard to build a case proving the police built a case that didn’t get to probable cause but this case sure has unusual facts. It’s troubling to see the State’s attorney use politics in the wheels of justice here.”

“It looks like this was a race to court house steps, whoever reports to cops first becomes the victim, and Ammar did that,” said Pattis. “Civil remedies are definitely worth a look here as it turns out the defendant became the victim.”

Bloomberg reported unnamed people who worked at Morgan Stanley saying Jennings no longer worked there. The investment bank, where he was co-head of U.S. bond underwriting, said at the time of his arrest this February he’d been put on indefinite leave. Jennings isn’t answering questions about where he works now. His $3 million home at 39 Knollwood Lane (4 beds, 5 baths, 6,484 sqft) is still listed in his family’s name so it appears they are still living in Darien. His attorney wouldn’t comment on questions if Jennings wants to sue the town.

So what’s left, Jennings avoids a criminal charges and goes on with his life but every time someone Googles his name the hate crime charge will come up. Attorney Weiss gets off without a solid explanation of how Connecticut dragged this man’s name through the mud and failed to build a viable case. The Darien cops go unchecked unless Jennings files a suit against them. I guess that’s how justice works in Connecticut’s gold coast of Fairfield County.