The New York Times has a piece about the death of Robert Morvillo, who happens to have been the attorney for Anil Kumar, the McKinsey manager, whose “cooperation” with the Federal investigation into the Galleon Group insider- trading ring, dragged down perhaps the highest rank manager ever to be so convicted. That was Anil Kumar’s mentor and one-time friend, Rajat Gupta, three times director of global consulting behemoth McKinsey:
“Last spring, he represented Anil Kumar, a former senior executive at McKinsey & Company who was a key witness in the insider-trading trial of the former hedge fund manager Raj Rajaratnam.”
What made the case especially horrible, apart from appalling rulings from Judge Rakoff, was that so much of the charge of conspiracy made against Mr. Gupta relied on nothing more than circumstantial evidence and hearsay, in this case, the unreliable hearsay of Mr. Anil Kumar, a senior partner and director at McKinsey and a protege of the luckless Mr. Gupta.
Mr. Anil Kumar is a documented and admitted conspirator and criminal.
The Federal government rewarded him for his testimony by giving him probation.
If this “reward for cooperation” had been given by anyone outside the government, it would be called what it really is – bribery and perhaps suborning of perjury.
Meanwhile, we’ll never know what kind of bargaining went on between the government and Anil Kumar, because one crucial part of that history, his defense attorney, Robert Morvillo, is dead.
Curiously, Morvillo’s death occurred in December 2011, which is just around the time that Rajat Gupta was demanding to see government files relating to the prosecutor’s deals with cooperating witnesses.
Those files were denied him by Judge Rakoff’s ruling, so the government’s not talking, either.
The ruling and others like it resulted in an erroneous verdict.
Based solely on flimsy evidence that should never have taken him to a federal criminal trial, Gupta now faces five years on the conspiracy charge and twenty years each on the three securities fraud counts (two of which pertain to a single alleged trade).
Adding to the complete media dereliction in this case, the newspapers have almost uniformly reported this incorrectly, claiming that Gupta only faces twenty years in total.
The truth is he faces 65 years in prison. Given that he is sixty-three years old, that is a life sentence.
In spite of itself, though, the NY Times piece does do one good thing. It gives us a glimpse into the cozy web of connections between judges, defense lawyers, prosecutors, and corporations that has turned the courts into one of the most corrupt and tyrannical arms of the government:
“Mr. Morvillo was one of a group of lawyers who worked as federal prosecutors in the office in the 1960s under Robert M. Morgenthau’s leadership. He rose to become head of the office’s securities-fraud unit, which Mr. Morgenthau had formed. That unit, which had led to an increase in indictments against corporate executives, in turn created a need for white-collar defense. Later, Mr. Morvillo became chief of the office’s criminal division.
Today, many of the deans of New York’s criminal-defense bar, including Gary P. Naftalis and Charles A. Stillman, served with Mr. Morvillo as assistants under Mr. Morgenthau.”
To make the mix thicker, Judge Rakoff was a student of Morvillo’s:
“This past summer he was representing a defendant in a bribery case before Judge Rakoff, who as a federal prosecutor in the 1970s was supervised by Mr. Morvillo, then chief of the criminal division.”
The Manhattan D.A. also ended up a partner at Morvillo’s firm.
Cyrus R. Vance Jr., the Manhattan district attorney, was a partner at Morvillo Abramowitz for five years before his election in 2009.
Talk about a revolving door.
So Judge Rakoff, the presiding judge at the Galleon group trial, is an old friend and junior colleague of the defense attorney, Morvillo, whose firm is a cozy nest for ex-prosecutorial types. The judge is also an old friend and colleague of Rajat Gupta’s defense attorney, Gary Naftalis.
Naftalis, despite his stiff fees and reputation, actually failed to get even Judge Rakoff’s most ridiculous rulings overturned.
Robert Morvillo has a reputation, hinted at in the NY Times piece, as some kind of good guy.
But, if you read between the lines, another picture emerges.
What you see is a guy who, when he was working for government prosecutors, begins a nifty racket. He starts going after the biggest corporate scalps.
The NY Times frames can frame this as a concern for equal justice.
But anyone familiar with the games prosecutors play knows that the are seamier reasons to pursue high-profile cases – bigger targets add up to media clout for the prosecutor’s office, which adds up to bigger budgets, bigger salaries, and corporate or political office for an ambitious prosecutor.
“Ambitious prosecutor” would describe Rajat Gupta’s nemesis, Preet Bharara, the Indian-American (Sikh) prosecutor who took over the Galleon case, after B. J. Kang had laid all the ground work and was actually knocking on the door of the money0men who needed to be fingered – like mafia hedge-fund honcho, Steven Cohen.
The Cohen investigation mysteriously vanished off the table sometime in 2010, Kang vanished with it, and Batman Bharara shows up in full boot-strapping desi-wonderboy mode, going great guns after a relatively trivial expert-network run by dark-skinned yuppies yearning to play in the big-league with gora crooks.
This had zilch to do with the financial crisis, as even the gora crooks have admitted.
Thanks to Bharara, a product of the New Jersey political machine, the prosecution of a whole bunch of South Asians, in lieu of the mostly Euro-Semitic criminals who actually scammed the markets, didn’t raise the suspicions it would have otherwise.
That’s how the game is played and knowing that gives us some insight into Mr. Morvillo and his ilk.
In essence, what Robert Morvillo did while a prosecutor was to create a market for highly-paid criminal defense attorneys. He did this by going after senior managers with a vengeance.
Then, when he left the government, he fulfilled that need…earning big bucks in the process.
Perhaps he was a good guy, as the Times suggests.
But, from what is in the Times piece, he doesn’t seem to have saved any corporate scalps in need of it.
He didn’t help Martha Stewart.
If anyone deserved to have got off for ridiculous over-prosecution it was Martha Stewart. But Morvillo lost her case.
Yet, he managed to save Maurice “Hank” Greenberg, even though, if there was anyone who deserved not to get off, it was Greenberg, whose decades-long shady dealings at AIG and CIA-related Starr are the stuff of legend among 9-11 researchers.
[to be continued]