Unsealed Court Docs Reveal How Hamilton Was Bushwhacked
by Uri Dowbenko
Recently unsealed court documents in the Hamilton Securities case show that attorneys from the Department of Justice and HUD(Housing and Urban Development) lied repeatedly in court before US District Judge Stanley Sporkin.
In an outrageous example of judiciary malfeasance, Judge Sporkin (now in private practice with Weil Gotshall) himself coached the government attorneys on how they should proceed with their investigation and litigation strategy.
Prior to the lawsuit, Hamilton Securities, an innovative software company and its president Catherine Austin Fitts successfully completed an auction sale of defaulted HUD properties, which saved the government $2.2 billion in lost revenue.
Then Hamilton became a target. (See "Bushwhacked: HUD Fraud, Spooks and the Slumlords of Harvard." (www.conspiracydigest.com/bushwhacked.html)
In June 1996, John Ervin of Ervin Associates, a disgruntled HUD contractor, filed a secret qui tam lawsuit against Hamilton Securities, Goldman Sachs, and Blackrock PNC. He also filed a lawsuit against HUD and HUD officials.
Transcripts of the sealed hearings show that DoJ and HUD attorneys were clearly the strategic force behind Ervin's phony suit against Hamilton, running interference for Ervin in closed sessions with Judge Sporkin.
DoJ attorneys Barbara Van Gelder and Anthony Alexis, as well as HUD attorney Judith Hetherton, then managed to keep stalling the qui tam lawsuit against Hamilton for an astonishing four years. This was apparently a clear-cut effort to bleed Hamilton's financial resources. The time proscribed by law, by the way, for "investigations" of this type, is 60 days.
The coordination against Hamilton seems to have originated in the US Attorney's office in the District of Columbia, as well as the Lee Radek fiefdom of the Department of Justice, misnamed the "Office of Public Integrity."
Former CIA operative Lee Radek is a master of conspiracy cover-up and his office has a well-documented reputation for derailing criminal investigation of government insiders and coordinating reprisals against whistleblowers.
Hetherton was a former member of the District of Columbia's US Attorney's office, while Van Gelder worked for Eric Holder, the DC US Attorney who became the Assistant Attorney General under Janet Reno. Van Gelder also reported to Frank Hunger, Al Gore's brother in law, head of the Civil Division of the Department of Justice.
In essence, the qui tam lawsuit, filed by a bounty hunter (Ervin) on behalf of the government, alleged that the government had been harmed by bid rigging between Goldman Sachs, Black Rock, HUD and Hamilton Securities.
Court documents present a convincing case that the qui tam and the civil lawsuitS were themselves concocted by the DC US Attorney's team -- even though they knew it was completely without merit.
During the same time frame (four years), Judge Sporkin illegally kept the court documents sealed to further obfuscate DoJ's criminality.
In fact, the unsealed court transcripts reveal an astonishing disregard for evidence and normal court protocol by government attorneys as well as the judge.
It's clear that Judge Sporkin was guiding DoJ and Ervin attorneys in their "search" for non-existent evidence against Hamilton.
Sporkin, former CIA and SEC counsel under Bill Casey, repeatedly helped government attorneys by verbally nudging them toward some semblance of professional behavior.
Sporkin, by the way, took over the case from Judge Charles R. Richey who mysteriously -- and unexpectedly -- died after the first several hearings.
In the March 29, 1999 transcript, for example, Judge Sporkin asked US Attorney Anthony Alexis. "Where are we on this thing here? Where's the government going? Do they know yet?"
Alexis replies. "No." Sporkin, evidently frustrated by the US Attorney's inability to present a credible case against Hamilton, asks him, "You don't know where you want to go?"
Alexis answers, "I kind of know which direction I want to go in terms of who I want to speak to, but there's well, obviously the documents which Ms. Hetherton can speak to which is before the special master."
The case, by the way, was first heard on June 20, 1996, so the preceding conversation took place three years after the supposed "investigation," which yielded no evidence of wrongdoing by Hamilton.
Each time attorneys for DoJ and HUD appeared in closed session with the judge, they would, time and again, present no evidence, no affidavits, and no documents -- just a plea to postpone the case.
Judge Sporkin, time and again, acceded to their baseless request and postponed the case.
The chronology of illegal and bizarre behavior by Sporkin and government attorneys follows:
* July 1, 1996 -- Judge Richey extends the case for 60 days based on Barbara Van Gelder's unsubstantiated allegations that fraud was involved. Judge Richey tells Van Gelder he won't give them another extension. Then Judge Richey suddenly gets sick and dies.
* Aug 19, 1996 -- The new judge, Stanley Sporkin, extends the case another 90 days.
* December 19, 1996 -- Sporkin gives government attorneys another 90 day extension. He comments on the fact that John Ervin, the disgruntled government contractor-bounty hunter would get 15% to 30% of the settlement.
"Gee, I had one of these qui tams where the government recovered close to 30 million. And the relator I guess got -- what do they get, a third?" the judge asks. "Thirty percent," answers Wayne Travell, a Venable, Baetjer, Howard & Civilleti attorney, representing failed bounty hunter John Ervin.
* May 20, 1997 - US Attorney Barbara van Gelder lies once again regarding her lack of evidence in the case. She implies that if she's given more time, she'll definitely come up with something concrete.
When Sporkin asks her about consolidating the two cases, Van Gelder flirts with the judge and tells him, "Oh, it's always a pleasure to appear before you." The judge says, "You know how to butter me up, don't you? You and I go back many years..."
But Sporkin doesn't recuse himself.
Van Gelder then tells the judge, "The reason why we can't -- I believe that we can't have one case consolidated is that one judge would have total knowledge of the case and the problem is in the other case we are the defendant, and so with the United States being the plaintiff and the United States being the defendant..."
In other words the government is in the bizarre situation of being the Plaintiff AND the Defendant, since Ervin has also sued the government, specifically HUD and HUD officials. Sporkin is puzzled too. He asks her how the government can be both plaintiff and defendant in the case.
After Ervin and his counsel are referred to in court as "bounty hunters," Sporkin gives government attorneys another 90 days -- illegally. Again Van Gelder lies and tells the judge she needs an additional six months.
Sporkin replies, "...these are interesting cases. I've had one of these where the relator I think, he recaptured abut 30 million and I think 25 percent is tops."
Van Gelder says, "Twenty five is the top, right." Sporkin says, "And you figure 25 percent of 30 million is 7.5 million bucks."
The message between the lines is that Sporkin is wondering out loud what the patsy John Ervin is actually doing to "earn" his share of the loot -- 25% of the disputed $4.7 billion won by Goldman Sachs and their partners in the HUD loan sales.
* Sept 10, 1997 -- Sporkin recommends that Van Gelder use SEC investigators to figure out if the HUD loan sales can be construed as "securities." Van Gelder says that she wants to use SEC only in an advisory capacity. In essence, Sporkin the judge is advising Van Gelder the DoJ Attorney on litigation and investigation strategy. Improper? Sure. Has Sporkin and van Gelder been censured, fined or prosecuted? Not yet.
* October 1997 -- HUD Secretary Andrew Cuomo abruptly cancels the Hamilton Securities contract, despite the fact that Hamilton successfully auctioned off $10 billion worth of defaulted HUD mortgages thereby saving the government $2.2 billion.
HUD still owes Hamilton $2.5 million for contracted services.
* March 9, 1998 -- HUD and the FBI loot the Hamilton Securities office in Washington, DC. A sworn affidavit by a building custodian shows DoJ's intent to plant false evidence in the basement hoard of Hamilton documents in order to frame Hamilton -- and in turn, Goldman Sachs.
DoJ Attorney Tony Alexis appears and asks for another 120 day extension in the case.
* July 10, 1998 -- Tony Alexis lies again and claims Hamilton isn't giving them documents they have asked for. The Judge stalls the case again.
* Nov 19, 1998 -- Dan Hawke, Ervin's attorney, asks for another 90 days.
* Jan 29, 1999 - Tony Alexis, assistant US Attorney Civil Division, asks for the case to be sealed for 90 days.
* June 2, 1999 -- DoJ attorneys continue to mislead the court.
Judge Sporkin begins to show his frustration at the ineptness of government attorneys. You can imagine how he feels after more than three years of no results. He says, "Let me tell you what you've got to do here. What you've really got to do, because this thing is dragging on, get a team together of some very knowledgeable people. You might have to bring them in from the outside. There's a big pool of people over there at Securities and Exchange Commission you could use. And I don't know whether you're permitted to go outside of the SEC to bring in some people that are knowledgeable in Wall Street and how these things work and get into that end of it. And I don't know whether HUD has that -- the Inspector General has those skills. I don't know. I really, I think it's dragging on. And the longer you wait, the harder it's going to be to reconstruct things because what you're going to have to do is reconstruct your market."
Translation: I'm really really frustrated with the incompetence of all you government attorneys. Why can't you just do the job?
Sporkin then continues leading them, trying to motivate them to bring him something -- anything with some kind of perceived value. Sporkin says, "I think you've really got to get a team together that's knowledgeable in this area of the law and can, you know, can go into it and see if these allegations are true or not. I don't know how you're going to do it, but you've got to get -- I don't know -- is the Inspector General carrying this on or do you have anybody from Justice working on this?"
The transcripts show that the Hamilton bushwhack was a setup, a story of dirty politics within the DoJ and HUD.
The transcripts also implicate DoJ Attorneys, the HUD Inspector General Susan Gaffney and HUD Secretary Andrew Cuomo in criminal collusion, if not conspiracy, against Hamilton Securities.
Andrew Cuomo, the mob-connected son of former Governor Mario Cuomo, is currently running for Governor of New York. While he was the director of HUD, HUD Inspector General Susan Gaffney revealed in March 2000 that $59 billion of HUD monies had been "lost" and the accounting could not be reconciled. Computer "error" was initially blamed for the shortfall, but this ludicrous and laughable cover story did not stand.
Furthermore it becomes clear that --
1. DoJ designed the construct and rationale for Ervin to file the lawsuit against Hamilton on behalf of the government.
2. DoJ taught Ervin how to get the ultimate kickback as a "bounty hunter." Incidentally Ervin was actually paid several million dollars when he agreed to withdraw his lawsuit against HUD and HUD officials, an obvious backdoor payoff.
3. Judge Stanley Sporkin's egregious behavior and improper conduct is evidence of criminal conspiracy. Well-trained in dirty tricks and spooky "tradecraft," Sporkin,like Lowell Jensen and Lawrence Silberman,was "appointed to the federal bench to defuse any litigation arising from the October Surprise or its many tentacles," according to whistleblower Rodney Stich in his magnum opus "Defrauding America."
So was Hamilton Securities just another domino used by insiders to try to knock down Goldman Sachs?
Or was Hamiton and its innovative software a serious threat to insiders who wanted to cancel the sales of defaulted loans to hide the rampant fraud at HUD?
Were they so afraid that Hamilton's open auction and bid optimization software would cut them out and destroy their covert revenue streams and money laundering capability through HUD?
And, given the well-documented fraud at HUD, why was the Department of Justice so afraid of getting the Securities and Exchange Commission involved in the investigation?
Other more serious questions also remain.
Why did HUD Secretary Andrew Cuomo and Al Gore's brother-in-law, Frank Hunger, head of the Civil Division of DoJ, try to frame Goldman Sachs during the Clinton impeachment, despite the fact that Goldman Sachs was a major contributor to the Democrat Party?
Was this the aftermath of a failed palace coup by Al Gore, Frank Hunger and Hillary Clinton against Bill Clinton himself?
Timing, after all, is everything.
Hamilton Securities and Catherine Austin Fitts continue to struggle under the burden of a meritless lawsuit by Ervin with continuous support from the Department of Justice.
Hamilton has still not been paid on its invoices for $2.5 million -- unquestionably and undeniably owed by HUD.
Gored and bushwhacked, software pioneer Catherine Austin Fitts has paid dearly for her company's innovations. Nevertheless she's ready to begin her new project -- "The Solari Spirit: How to Create Local Prosperity in a Global Economy" (www.solari.com) -- as soon as this outrageous case is settled...
© 2001, Uri Dowbenko. All rights reserved.
This aricle is included in the new book
by Uri Dowbenko
"Bushwhacked: Inside Stories of True Conspiracy"
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