Mayer Brown LLP Assists Companies With Securities Fraud and Bankruptcy Fraud Chicago, Illinois.
From the In re CFS litigation in the early 2000’s to the recent Refco litigation, Mayer Brown has made it a practice to hide the fraud of its clients and partners and to make it easy for rich executives to steal from the middle class.
Nothing shows this more than how the lawsuits were dismissed against MB and its partners in the Refco litigation and MB was not indicted in connection with the millions in fraud lost over Refco. Yet their opposers get indicted and harassed over pennies. They are in bed with the US Attorneys and they will gladly sacrifice a fall guy if they need to do so as part of the bargain.
Mayer Brown maintains control over presidential and state appointees and executives by offering them partnerships in their firm when their appointments end so long as they act in the interests of Mayer Brown’s clients while they are in office or employed.
They are an integral part of Corporate America and responsible for the downfall of America along with all of those banks, mortgage lenders and insurance companies that were bailed out to the tune of billions of dollars while everyday working men and women lost their jobs and homes and ended up on the street.
Mayer Brown partner charged with securities fraud
A senior Mayer Brown partner was indicted yesterday (18 December) on charges he helped Refco conceal from investors that a company owned by former chief executive Phillip Bennett owed Refco hundreds of millions of dollars, writes the New York Law Journal. Joseph Collins, head of the law firm’s derivatives group, was charged in the Southern District of New York with securities fraud and a host of other counts in connection with the 2004 sale of a majority stake in the financial services company and a 2005 initial public offering.
A senior Mayer Brown partner was indicted yesterday (18 December) on charges he helped Refco conceal from investors that a company owned by former chief executive Phillip Bennett owed Refco hundreds of millions of dollars, writes the New York Law Journal.
Joseph Collins, head of the law firm’s derivatives group, was charged in the Southern District of New York with securities fraud and a host of other counts in connection with the 2004 sale of a majority stake in the financial services company and a 2005 initial public offering.
US Attorney Michael Garcia said at an afternoon news conference that Collins furthered the fraud at Refco “by telling lies and deceptive half-truths and omitting material information”.
“He was not merely a lawyer whose client was committing fraud and who should have caught on,” Garcia said. “Collins instead played an active and crucial part in perpetrating the Refco fraud.”
At Collins’ arraignment Tuesday afternoon, he pleaded not guilty. Judge Leonard Sand accepted the recommendation of Assistant US Attorney Christopher Garcia and set a $1m (£500,000) personal recognizance bond. He is expected to post the bond by the end of the week.
After the proceedings, Collins’ attorney, William Schwartz of Cooley Godward Kronish, said: “Joe Collins is an innocent victim of the Refco fraud. This indictment should send a chill down the spine of every transactional lawyer who believes he or she is representing an honest client. We intend to fight these charges to acquittal.”
Schwartz had argued that Collins should be released without posting a bond. He told reporters that Collins is dedicated to clearing his name.
“The defendant is clearly here to fight and they know he is,” Schwartz said.
Collins, 57, who works out of the firm’s offices in New York and Chicago, was charged with two counts of securities fraud, three counts of making false filings with the Securities and Exchange Commission, three counts of wire fraud, and single counts of bank fraud, money laundering and conspiracy.
Collins, a 1975 graduate of New York University School of Law, was also sued civilly on Tuesday by the Securities & Exchange Commission (SEC) for aiding and abetting Refco’s violations of the antifraud provisions of the federal securities laws.
His indictment comes as lawyers for Bennett, former Refco owner Tone Grant and former Chief Financial Officer Robert Trosten are preparing for a March trial on similar charges to those now being faced by Collins.
Refco first revealed on 10 October, 2005, that it was owed approximately $430m (£213m) by the entity controlled by Bennett. The company’s stock price fell so low it was delisted by the New York Stock Exchange. The company filed for bankruptcy on 17 October that year.
According to the SEC, Collins joined what is now called Mayer Brown in 1994, bringing Refco with him as a client. Mayer Brown was Refco’s primary law firm for a decade and Collins was the billing partner until the October 2005 meltdown of the stock price.
The indictment unsealed Tuesday accused him of hiding Refco’s losses from the company’s auditors and drafting loan documents to help disguise the losses.
Collins represented Refco in 2004 when it sold a majority stake of the company to Thomas H Lee Partners in a leveraged buy-out. Collins, it is alleged in the indictment, prepared an offering circular that failed to mention that the entity controlled by Bennett owed hundreds of millions of dollars to Refco.
He was also accused in the indictment of conspiring with Bennett to conceal from buyers that an Austrian bank had injected more than $450m (£213m) into the company and received in return a 47% stake. And Collins was charged for helping to prepare the company’s stock registration statement for its initial public offering – a document that failed to mention key transactions.
Collins and Mayer Brown were named in a civil suit filed by investors in the Southern District in October. The class action lawsuit came on the heels of a suit filed by Refco’s bankruptcy trustee against the firm.
Garcia said Tuesday that Mayer Brown was cooperating with the investigation.
Mayer Brown released a statement saying Collins is on leave from the firm while the charges against him are pending. The firm also defended its own conduct in the matter.
“Our review of the evidence available to us shows that the firm acted in a professional, competent and ethical manner in its work on behalf of Refco,” the statement said.
The New York Law Journal is a US sister title of Legal Week.
Watchdogs: Garcia backed county deal with firm that gave son free legal defense
n July 2012, the Cook County Board approved a $100 million bond deal, handing the job of bond counsel on the deal to the law firm Mayer Brown LLP.
As a member of the county board, Jesus “Chuy” Garcia co-sponsored the measure, which gave the plum job of representing the county in the deal to the politically connected Chicago law firm.
Garcia — who’s now one of four challengers seeking to unseat Mayor Rahm Emanuel in the Feb. 24 city election — supported Mayer Brown despite a personal connection to the firm involving his adult son Samuel Garcia. Court records show Samuel Garcia had been arrested in 2007 on a felony charge, accused of attacking two off-duty police officers on the South Side — and lawyers from the downtown law firm represented him in the criminal case for free.
Attorney Marc Kadish of Mayer Brown said he and two younger lawyers he supervised at the firm represented Samuel Garcia in the case for roughly three years, from shortly after his arrest through his trial in 2010. Kadish said he could not determine what it would have cost to pay for the legal services provided for free to Samuel Garcia.
Garcia, now 31, ended up being convicted on a lesser, misdemeanor charge of criminal damage to property and given probation.
The elder Garcia — who’s been running second in the polls to Emanuel — said his son had told him the Mayer Brown firm represented him for free.
“I did not ask them to represent my son,” he said. “My son was an adult.”
Garcia said it “never entered my mind” to recuse himself from voting on the measure that gave the legal work on the bond deal to the firm.
He also said he never tried to contact the Cook County state’s attorney’s office about that case or another more recent criminal case involving his son, who was described by the police in court records after one arrest as an admitted gang member.
“My wife and I love our son,” said Garcia, who has made fighting gang crimes a key part of his mayoral campaign. “He’s had some trouble. We continue to love and support him. We are proud of the progress he has made in being a great father to the four children he has.”
Campaigning for mayor, Garcia has accused Emanuel of having “given up” on public safety and said that, if elected, “My main focus will be reducing gang and gun violence.”
Kadish said Matt Piers — the Garcia mayoral campaign’s lawyer — asked his firm to defend the younger Garcia on a pro bono basis in the 2007 case. Kadish said a committee at Mayer Brown that oversees pro bono decisions agreed the firm should represent Samuel Garcia free of charge.
Piers said he doesn’t remember who asked him to help Samuel Garcia.
“I’ve known Sammy since he was a baby,” said Piers, who was a top City Hall lawyer in the 1980s when Harold Washington was mayor. “I can’t honestly tell you who initially asked me if I could find a criminal defense lawyer — whether it was Sammy himself or Chuy or Sammy’s mother Evelyn.”
Piers said he thought the younger Garcia merited the free criminal defense work from the downtown firm because, “at the time, he was unemployed or only marginally employed.”
He said the county commissioner’s backing of the 2012 bond issue involving Mayer Brown “doesn’t come anywhere close to violating the county ethics ordinance” and that Garcia wasn’t required to recuse himself “from a completely non-controversial vote” on the deal.
The county paid Mayer Brown $89,000 for its work on the bond deal, according to a spokeswoman for Cook County Board President Toni Preckwinkle.
Attempts to reach Samuel Garcia were unsuccessful. Phone numbers listed for him no longer work. He did not respond to requests for comment by email and Facebook.
At the time of the 2007 arrest, his father, a former Chicago alderman and state senator, was running a not-for-profit organization in Little Village. He was elected to the Cook County Board in 2010, 12 years after he lost his Illinois Senate seat.
The 2007 criminal case was the first of two in which Samuel Garcia was charged with a felony in an attack on off-duty Chicago cops. In each case, it happened on the South Side, and Garcia ended up being convicted of a lesser charge, a Class A misdemeanor, and given probation, court records show. The second case was in 2013.
In the earlier case, Garcia and a second man were arrested on June 24, 2007, at 4218 W. Ogden, accused of aggravated assault with a gun, knife or other dangerous weapon and criminal damage to property.
According to a police report, Garcia, apparently referring to his street-gang affiliation, “shouted, ‘Two-Six motherf – – – – – -, we’re gonna f – – – you up,’ while holding a hammer.”
The police said Garcia then threw the steel-headed hammer and his co-defendant tossed an aluminum baseball bat at a car in which two off-duty officers sat.
Garcia “freely stated after he was read his rights, ‘I’m glad that car belonged to a cop. I wish I could have f – – – – – it up more,” according to court records.
In court filings, Samuel Garcia’s lawyers said that he mistakenly thought the off-duty officers in the car were gang members who would “try to kill him in retaliation for his assistance to the Chicago police in apprehending” two gang members who shot a boy to death. The lawyers wrote that, in a Sun-Times article about the killing, Garcia was “identified but not named” by the police as having helped solve the crime.
A police source with knowledge of the case said Friday that wasn’t true. “Samuel Garcia was not instrumental in solving the murder,” the source said.
After Garcia was found guilty of only the misdemeanor at a bench trial in June 2010, a judge gave him one year of probation, with the condition that he complete 30 days in the Sheriff’s Work Alternative Program within six months.
But Garcia worked just 17 days for SWAP and, as a result, was found to have violated probation in June 2011. He completed his sentence in August 2011.
In the February 2013 case, he tried to crash into the car of an off-duty officer while flashing gang signs and yelling a racial slur, according to a police report that said he shouted, “F – – – you n – – – a king killa b – – – -.”
When the officer identified himself as a Chicago cop and unzipped his jacket to reveal his blue uniform, Garcia replied, “I don’t give a f – – – if you CPD. CPD killa n – – – a,” records show.
At one point in the confrontation, Garcia pulled over, exited his vehicle and threw a cup of an unidentified liquid at the officer before speeding away, according to the police, before eventually coming to “a sudden stop” at 3932 W. 31st, getting out of his car and placing his hand on his waistband, “motioning as [if] having a gun.”
“I don’t give a f – – – who you are. I’ll shoot your a – -!” he said, according to the police.
The arrest report in that case said Garcia “is a self-admitted member of the Two-Six street gang (Darkside faction)” — a Hispanic gang that is a rival of the Latin Kings.
Samuel Garcia initially was charged with felony aggravated assault and aggravated battery to a police officer.
Garcia’s lawyer in that case — Brendan Shiller, whose mother, Helen Shiller, served on the Chicago City Council in the 1980s with Garcia’s father — maintained in court filings there was evidence from 911 calls that Garcia believed “a civilian was chasing him.”
The case was set to go to trial when Cook County State’s Attorney Anita Alvarez’s office offered a plea bargain to the younger Garcia, whose father was then in his first term as a county commissioner.
Alvarez spokeswoman Sally Daly said prosecutors did not know Samuel Garcia was the son of a county commissioner and that they offered the plea bargain “with the consent of the victim.”
Samuel Garcia agreed to plead guilty to a misdemeanor charge of reckless conduct in February 2014 and got 18 months of probation.
Contributing: Brian Slodysko, Frank Main