Miami U.S. Attorney’s Office accused again of spying; A ‘mole’ in the defense camp?

By Dan Christensen, FloridaBulldog.org 

Defense lawyers Marc Nurik, left, and J. David Bogenschutz

Defense lawyers Marc Nurik, left, and J. David Bogenschutz

For the second time this summer, Miami federal prosecutors stand accused of spying on the defense – this time in the case of an alleged $28-million, international sweepstakes fraud.

As described in court papers, the “invasion of the defense camp” appears to have begun in February when one of four defendants in the case cut a secret plea deal with the U.S. Attorney’s Office and began working undercover.

The informant, John Leon of Wilton Manors, participated in defense team strategy sessions for three months as a government “mole,” obtaining documents and listening to privileged discussions about witnesses and other sensitive defense matters and reporting back to the government, the documents say.

The fallout: defense accusations that the case has been irretrievably “tainted” due to constitutional violations of the attorney-client privilege.

“For a period exceeding two months, Leon, acting as a government informant with the government’s acquiescence, invaded the defense camp where he learned critical defense strategies by actively participating in numerous meetings, after already accepting a government plea and agreeing to cooperate,” say court papers filed by attorneys Marc Nurik of West Palm Beach, J. David Bogenschutz of Fort Lauderdale and Marshall Dore Louis of Miami.

Assistant U.S. Attorney H. Ron Davidson, while acknowledging that defendant Leon became a covert “government cooperator,” told U.S. District Judge Darrin P. Gayles in a July 8 pleading that Leon “never shared privileged information with the United States, the United States never asked for privileged information and the defendant’s motion lacks any merit.”

The judge, however, has sided so far with the defense. On Aug. 3, after an initial hearing, he ordered the government to turn over to the defense all “rough notes” of interviews of Leon by Internal Revenue Service agents who helped build the government’s fraud case. The defense had sought the agents’ notes, contending the government had “carefully sanitized” memos of interviews with Leon produced to the defense.

‘The ends of justice’

The same day, Judge Gayles also granted a continuance in the case and reset the trial date for Nov. 28, saying “the ends of justice outweigh the interests” of a speedy trial.

What’s expected to follow this fall is a full-blown hearing on whether felony charges of mail fraud, money laundering and conspiracy should be dismissed against the remaining defendants – Matthew Pisoni, Marcus Pradel and Victor Ramirez – due to government misconduct.

“An evidentiary hearing is exactly what is required to determine how to resolve these blatant [constitutional] violations, and the appropriate sanction for these pervasive violations,” attorneys Nurik and Bogenschutz said in court papers.

U.S. Attorney Wifredo A. Ferrer’s office declined Florida Bulldog’s request for comment.

In June, prominent Miami defense lawyer Howard Srebnick accused both the FBI and the U.S. Attorney’s Office of spying on the defense in a $55- million Medicare fraud case by illegally and obtaining copies of confidential defense documents. More specifically, it was alleged a government-approved copying service had surreptitiously provided agents with duplicates of documents culled by the defense team from 220 boxes of evidentiary records in preparation for trial.

The Florida Bulldog reported last month that those allegations of government misconduct dissipated weeks later when the U.S. Attorney’s Office abruptly gave all three defendants generous plea deals involving no prison time. The defendants had each faced lengthy jail terms if convicted.

The copying service, Imaging Universe, was fired. The U.S. Attorney’s Office conducted an internal inquiry, but declined to make public its findings. Srebnick withdrew his motion with the accusations after securing a deal for his client. Consequently, the judge never ruled on the merits.

The alleged scam

Pisoni was president of the now-defunct Mail Tree, Michael McKay, Spin Mail and other Florida companies that the government contends were used in the fraud. Pradel, Ramirez and Leon worked with him in the alleged scam.

The four were indicted together on May 7, 2015 for participating in a sweepstakes scheme that began in 2006. The indictment says victims were falsely notified by mail that they’d won a substantial prize, but needed to pay a fee of up to $50 to redeem their winnings.

Authorities have said the defendants collected more than $25 million from hundreds of thousands of victims in the U.S. and abroad, using shell companies and international bank accounts to lauder their loot.

Even before they were indicted, the four had learned they were under investigation “and circled the wagons in a Joint Defense Agreement,” the government said. A JDA is a contract in which defendants extend the attorney-client relationship among them to facilitate the sharing of privileged information.

But last winter, unknown to his fellow defendants, Leon and his Fort Lauderdale attorney, Omar F. Guerra Johansson, began plea negotiations that resulted in his Feb. 17 plea agreement with the government.

“His cooperation was kept covert because Leon was cooperating with the government against a non-charged defendant,” prosecutor Davidson wrote. “Moreover, the government specifically instructed Leon not to share privileged information.”

Leon’s plea deal became public on April 20 when the indictment against him was dropped and a single new conspiracy charge was filed. He’s now facing a maximum penalty of five years’ imprisonment. Before, like the others, he faced a maximum of 80 years in prison.

Accusations of spying by FBI, U.S. Attorney’s Office dissolve amid generous plea deals

By Dan Christensen, FloridaBulldog.org 

Defense attorney Howard Srebnick, left, and Assistant U.S. Attorney James V. Hayes

Defense attorney Howard Srebnick, left, and Assistant U.S. Attorney James V. Hayes

Weeks after being accused of spying on the defense in a $55-million Medicare fraud case, the Miami U.S. Attorney’s Office gave all three defendants generous plea deals that closed the case and made the misconduct accusations go away.

At the same time, the government quietly fired the Fort Lauderdale-based copying service at the center of the scandal. Imaging Universe had improperly supplied the government with duplicates of documents that defense lawyers cherry-picked out of 220 boxes of seized records while searching for evidence helpful to their clients.

The U.S. Attorney’s Office investigated the matter, but declined a request by FloridaBulldog.org to make public its findings.

Dr. Salo Schapiro, the 71-year-old former medical director of Biscayne Milieu Health Center, faced up to 100 years in prison and $55 million in liability when he was indicted for conspiracy and health care fraud in September 2014. But last June 20 – less than three weeks after the Florida Bulldog reported the story – prosecutors who once had trumpeted the case allowed psychiatrist Schapiro to plead guilty to a single count of making a false statement.

Schapiro’s punishment: a $10,000 fine. He continues his medical practice in Boca Raton, but no longer takes Medicare patients. His online biography does not mention his felony conviction.

Dr. Salo Schapiro

Dr. Salo Schapiro

Schapiro’s two co-defendants, indicted on similar charges, got similarly light treatment.

Nurse practitioner Marlene Cesar, 64, of Allentown, PA, pleaded guilty July 1 to stealing less than $1,000 in Medicare benefits and was fined $150. On July 28, 74-year-old mental health counselor Sonia Gallimore, who like Schapiro was from Broward, was placed on pretrial diversion for six months.

“The story is in the results,” said Schapiro’s Miami attorney, Howard Srebnick.

Srebnick and his associate, Rossana Arteaga-Gomez, raised the matter in court filings in late May. Their motion argued that the government had a practice of secretly obtaining copies of documents the defense had flagged as important and asserted it was not the action of “just one rogue [FBI] agent or prosecutor.” Rather, the motion said, it appeared to be “an office-wide policy” of both the U.S. Attorney’s Office and the FBI that has gone on for “at least 10 years.”

Several days of hearings, open and closed, were held before Miami U.S. District Judge Marcia Cooke. They culminated with Schapiro’s combined guilty plea and sentencing hearing June 20 on the reduced felony charge.

Credibility in question

After negotiating the plea deal for his client, attorney Srebnick withdrew his motion at the hearing. He said its allegations “were based solely on the statements and emails of the owner of the copy service, whose credibility, at a minimum, has come into question during this litigation.”

U.S. Attorney Wifredo Ferrer issued this statement:

“When we learned of the copy service issue, our prosecutors immediately notified the defense lawyers.  Unintended circumstances can arise — the test is what you do when faced with such circumstances.  Here, rather than resolve the matter privately, we were completely open and transparent.  We urged the defense to air it in public.  Ultimately, the defense counsel acknowledged that they had no information the prosecutors had looked at any of the materials in question and that the prosecutors in the case acted appropriately and ethically.”

U.S. Attorney Wifredo Ferrer

U.S. Attorney Wifredo Ferrer

The owner of Imaging Universe is Ignacio E. Montero. He did not return several phone messages seeking comment.

The motion said Montero told attorney Arteaga-Gomez that he’d provided the U.S. Attorney’s Office “duplicate copies of the discovery documents selected by defense counsel in other cases” for the past 10 years.

Court papers alleged that Imaging Universe and Montero gave the government CDs containing duplicates of documents Schapiro’s defense team had culled from the 220 boxes of records agents had seized from Biscayne Milieu. The records were stored at an FBI warehouse in Miramar, where defense lawyers who wanted copies of such records were required to use Imaging Universe.

The government later acknowledged that Imaging Universe did supply the FBI with duplicate CDs of what it had copied for Schapiro’s defense team, but said the discs “were never requested by any agent, prosecutor or anyone else on the government’s behalf.”

No ‘pervasive’ spying

Assistant U.S. Attorney James V. Hayes was the lead prosecutor on the case. He has said in court papers that he was unaware of the duplicate CDs until an FBI agent disclosed their existence in April. He and co-counsel Lisa H. Miller, a Justice Department fraud attorney, said they immediately told “Montero to stop and began an internal inquiry.” They also said “no pervasive practice of receiving or recording defense discovery” was found.

Still, the government sent out notifications about what happened to lawyers for a number of unidentified defendants. Officials declined to say how many attorneys were notified.

Defense lawyers recently raised a similar issue “of government invasion of the defense camp” in at least one unrelated case involving an allegedly fraudulent sweepstakes scheme.

Prosecutor Hayes informed Srebnick on April 22 that FBI Agent Deanne Lindsey “had been surreptitiously receiving the CDs,” according to the defense motion. “Hayes proposed to immediately destroy the CDs,” but the lawyers instead asked that he give them to the defense, “which he did.”

“Covertly cloning defense counsel’s work-product to obtain a tactical advantage is nothing short of ‘shocking to the universal sense of justice,’ ” Srebnick and Arteaga-Gomez wrote.

Court records show that between June 8 and 16 U.S. District Judge Cooke held a series of open and closed hearings about the matter. Early on, the judge indicated she would make a ruling on the motion and even asked both sides what possible remedies were available should she find “pervasive” misconduct by the government.

But the judge never ruled on the merits of the defense motion. The matter became moot when Srebnick withdrew it after prosecutors offered Schapiro the plea deal and he accepted.

Miami U.S. Attorney’s Office, FBI accused of spying on defense in Medicare fraud case

By Dan Christensen, FloridaBulldog.org 

Judge Cooke has set a June 8 hearing to consider alleged wrongdoing by federal prosecutors and agents.

Judge Cooke has set a June 8 hearing to consider alleged wrongdoing by federal prosecutors and agents.

In a stunning twist in a long-running Medicare fraud case, both the Miami U.S. Attorney’s office and the FBI stand accused of spying on a defendant’s lawyer by illegally and secretly obtaining copies of confidential defense documents.

Court papers filed last week by attorneys for Dr. Salo Schapiro contend the secret practice was not the action of “just one rogue agent or prosecutor.” Rather, it was apparently an “office-wide policy” of both the U.S. Attorney’s Office and the FBI that’s gone on for “at least 10 years.”

The unwritten policy involves “surreptitiously copying defense counsel’s work product through the government-contracted copy service that the government requires defense counsel to use to obtain the discovery documents’’ needed to properly prepare for trial, according to court papers that seek either the dismissal of Schapiro’s indictment or the disqualification of the entire prosecution team.

Miami attorneys Howard Srebnick and Rossana Arteaga-Gomez represent Schapiro and filed the motion, which asserts that the U.S. Attorney’s Office has for several weeks been investigating itself in the matter.

Miami U.S. District Judge Marcia G. Cooke held an initial hearing Tuesday that was continued until June 8 at 1:30 p.m. The judge, in an order, has asked both parties to respond to this extraordinary question: “What remedies, if any, are available to the court were the court to find that the described conduct in defendant Schapiro’s motion is a systemic, consistent and/or pervasive practice of or on behalf of the United States Attorney’s Office?”

A spokeswoman for Miami U.S. Attorney Wifredo Ferrer would not be interviewed. However, late Thursday night prosecutors filed court papers confirming that an internal probe is underway and asserting that defense arguments are “based on erroneous accusations and insinuations.”

Howard Srebnick, left, and James V. Hayes

Howard Srebnick, left, and James V. Hayes

“Despite the charged language this is not a case about intrusion into the attorney-client relationship, eavesdropping or sneaking into the defense camp,” wrote Assistant U.S. Attorney James V. Hayes and Justice Department fraud attorney Lisa H. Miller.

Defense attorney Srebnick did not return a phone call seeking comment.

 Specifically, the court papers allege that Fort Lauderdale-based copying service Imaging Universe and president Ignacio E. Montero provided the government with CDs containing duplicates of documents Schapiro’s defense team culled from 220 boxes of evidentiary records in preparation for trial. Federal agents had seized those records from the mental-health clinic Biscayne Milieu, where Schapiro worked.

“Covertly cloning defense counsel’s work-product to obtain a tactical advantage is nothing short of ‘shocking to the universal sense of justice’ mandated by the Due Process Clause of the Fifth Amendment,” Srebnick and Arteaga-Gomez wrote. “To the extent that the prosecution team can infer from Dr. Schapiro’s selection of discovery documents his thought process, the government has violated his Fifth Amendment right not to be compelled to be a witness against himself. This intrusion into the attorney-client relationship has also violated Dr. Schapiro’s Sixth Amendment right to the effective assistance of counsel.”

The government responds

The government’s Thursday night response acknowledged that Imaging Universe did supply the FBI with duplicate CDs of what the company had copied for Schapiro’s defense team, but said the discs “were never requested by any agent, prosecutor or anyone else on the government’s behalf.”

Prosecutors Hayes and Miller also stated that they were unaware of the duplicate CDs until an FBI agent disclosed their existence in late April. They said that when they found out they immediately told “Montero to stop and began an internal inquiry.”

“To date it has found that there was simply no pervasive practice of receiving or recording defense discovery, and that it was not a widespread or institutionalized practice,” says the government’s response.

Nova Southeastern University constitutional law professor Robert Jarvis was skeptical of the defense’s sensational claims, but said that if the allegations prove true it could upend hundreds of criminal cases, free untold defendants and potentially result in criminal charges against government officials responsible for violating defendants’ rights.

“This opens a huge can of worms,” Jarvis said. “It’s potentially catastrophic for the government and I would think that the [U.S.] Attorney General would be swooping in on this. There are 95 judicial districts. If it happened in this office, you have to wonder if it’s happening in any others.”

Schapiro, 70, Sonia Gallimore, 74, both Broward residents, and Marlene Cesar, 64, of Allentown, PA., were indicted on charges of health care fraud and conspiracy and making false statements in September 2014. According to the indictment, they and other alleged co-conspirators submitted more than $55 million in phony Medicare claims through the Miami clinic, Biscayne Milieu, collecting more than $11 million. Previously, about 25 other owners and employees of the clinic pleaded guilty or were convicted of healthcare fraud.

On Tuesday, attorneys for Gallimore and Cesar filed paperwork seeking dismissal of their charges, claiming their clients’ rights were similarly violated by the alleged scheme.

The defense motion says that between late 2014 and last month, Schapiro’s lawyers repeatedly visited an FBI warehouse in Miramar where discovery documents are kept for review. During Arteaga-Gomez’s first visit to the warehouse federal agents told her that if she wanted to copy any documents she would have to use Imaging Universe, the motion says.

Since the indictment, Imaging Universe has charged Schapiro $8,200 to produce nine sets of discovery documents to his defense team. The motion identifies those records to include a dozen CDs containing approximately 1,140 PDF files, many with multiple pages.

The motion contends that company president Montero “lied” to Arteaga-Gomez about the copying process, and instead of making sure the government did not see the defense’s hand-selected files, provided FBI case agent Deanne Lindsey with duplicate copies.

Montero did not respond to a detailed voicemail message seeking comment.

Prosecutor discloses FBI received defense CDs

Hayes, the federal prosecutor on Schapiro’s case, first informed Srebnick and his associate that agent Lindsey “had been surreptitiously receiving the CDs” on April 22, according to the defense motion.

“Hayes proposed to immediately destroy the CDs,” but the lawyers asked instead that he give them to the defense, “which he did,” the motion says.

Hayes declined to be interviewed about the matter.

Arteaga-Gomez phoned Montero on April 25 to ask who had told him to provide copies of the CDs to the government. Montero, the motion says, answered that an “agent” told his office manager to do it. “Mr. Montero then stated that he had been providing to the U.S. Attorney’s Office for the past 10 years duplicate copies of the discovery documents selected by defense counsel in other cases.”

Montero also forwarded to Schapiro’s defense an April 21 email he sent to a healthcare-fraud paralegal in the U.S. Attorney’s Office, stating that he’d provided the Justice Department with duplicates of defense records “since 2006.” Montero added that both his old company, Xpediacopy, and Imaging Universe had done it.

If so, the alleged government misconduct spanned the administrations of three Miami U.S. Attorneys – Alex Acosta, who served from 2005-2009, Jeffrey Sloman acting U.S. Attorney from 2009-2010 and Wifredo Ferrer, who took over in May 2010.

Srebnick and Arteaga-Gomez wrote that they’ve recently had “multiple conversations” about the matter with Miami federal prosecutors and their supervisors.

“The U.S. Attorney’s Office has admitted that Agent Deanne Lindsey had been receiving copies of the CDs and had been keeping the duplicate CDs in a folder as she received them,” the motion says. Lindsey also “confessed to opening four of those duplicate CDs” looking for files, copying and pasting files onto her own CDs and providing “those new CDs to the government’s expert witness for trial preparation,” the motion says.

The prosecutors’ response sought to cast Lindsey’s contact with the records in less threatening way.

Prosecutors notified the defense last week that Montero had “confessed to lying to Rossana Arteaga-Gomez about the discovery process” in order to hide what was happening, the defense lawyers wrote.

“That the government-contracted copy service misled Ms. Arteaga-Gomez in order to cover-up the office-wide policy makes this case especially egregious,” the motion says.

Details about the size, terms and duration of Imaging Universe’s contract were not immediately available. The prosecutors’ response, however, said the contract is between Imaging Universe and the Government Publishing office.

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