Prominent Lawyer’s Trial Will Test Crackdown on Unregistered Foreign Agents – The New York Times

WASHINGTON — Not long before Christmas 2012, Paul Manafort, then a foreign lobbyist, congratulated Gregory B. Craig, a well-known Washington lawyer, on the release of a report that Mr. Manafort had commissioned to help Ukraine’s pro-Russian president polish his image in the West.

“Well done,” Mr. Manafort wrote in an email to Mr. Craig after the lawyer had briefed American journalists on the report, which largely justified the criminal prosecution of the Ukrainian leader’s political rival.

Government officials in Kiev, Ukraine’s capital, “are especially happy with the way the media is playing it,” Mr. Manafort wrote, later adding, “You are ‘THE MAN.’”

“I am glad it went so well,” Mr. Craig replied.

Seven years later, that email exchange will be evidence in a criminal trial that has shaken Washington’s lobbying, consulting and public relations industry to its core. Mr. Craig, 74, is charged with deceiving Justice Department officials who sought to determine whether he should have registered under the Foreign Agents Registration Act, commonly known as FARA, for work that earned his law firm more than $4.6 million.

His trial, which starts Monday and is expected to last about two weeks, is widely viewed as a litmus test of the Justice Department’s growing effort to hold more foreign lobbyists criminally responsible for conduct the agency once treated as mere administrative infractions. Although Mr. Craig is charged with lying to federal law enforcement officials — not for failing to register as a foreign agent — defense lawyers said his indictment signified a sea change in the Justice Department toward those who failed to disclose their foreign lobbying work.

“The fact that there is a Greg Craig trial shows how much the atmosphere has changed,” said Matthew T. Sanderson, a defense lawyer who specializes in foreign lobbying cases at the law firm of Caplin and Drysdale. “The Justice Department is going after some high-profile scalps.”

In a video posted on YouTube after his indictment, Mr. Craig predicted he would be exonerated at trial. “I did not participate in a scheme to mislead the government or conceal material facts,” he said. “This prosecution is unprecedented and unjustified. I am confident that both the judge and the jury will agree with me.”

If convicted, Mr. Craig faces up to five years in prison, although recent defendants charged with the same offense have been sentenced to from two weeks to a month behind bars.

In the past two years, almost all of the high-profile cases against unregistered foreign agents sprang from the investigation by the former special counsel Robert S. Mueller III into Russian influence on the 2016 presidential election. Mr. Mueller’s team convicted three former aides to Mr. Trump of crimes that encompassed FARA violations: Mr. Manafort, who served as Mr. Trump’s 2016 campaign manager; Rick Gates, the former deputy campaign manager; and Michael T. Flynn, Mr. Trump’s first national security adviser.

But when the special counsel’s office closed up shop in May, the Justice Department signaled that its scrutiny of foreign lobbyists would continue. The department put one of Mr. Mueller’s prosecutors, Brandon L. Van Grack, in charge of a revamped FARA unit, declaring that the foreign lobbying disclosure act was “increasingly an enforcement priority.”

How far the prosecutors can push the once-obscure, 81-year-old statute is an open question.

Critics claim that the statute is as vague as it is broad, a problem already evident in the case against Mr. Craig, a former White House counsel under President Barack Obama. Days before his trial was to begin, Judge Amy Berman Jackson of the United States District Court for the District of Columbia dismissed one of two counts of false statements against Mr. Craig, saying the language of the FARA statute was too ambiguous to justify it.

The department’s enforcement drive is also hampered by a vast exemption for lobbyists who are paid by foreign commercial entities, even though business leaders are often stand-ins for foreign government officials who will pay millions to lobbyists to promote their interests in the West.

On the other hand, prosecutors often have an advantage in the courtroom when FARA cases make it that far. Juries are typically unsympathetic to consultants, lobbyists and lawyers who enrich themselves by working for a foreign power but hide their work from their own government. “It is hard to feel sorry for that cohort of people,” said Mr. Sanderson, the defense lawyer.

Consider the most recent case: the prosecution of Bijan Kian, who was accused of failing to disclose lobbying work for the Turkish government. Mr. Kian is a former business partner of Mr. Flynn, the former national security adviser who is awaiting sentencing on charges of filing false documents to Justice Department officials about the Turkish lobbying work, as well as lying to F.B.I. investigators about a different matter.

The federal judge who presided over the trial complained that the evidence against Mr. Kian, who also goes by the name Bijan Rafiekian, was “very, very circumstantial.”

Jurors nevertheless deliberated only five hours before finding him guilty last month of working as an unregistered foreign agent and conspiring to violate FARA, including by submitting false documents. Whether the judge upholds that verdict or throws it out will help define the legal parameters of the department’s new enforcement effort.

Mr. Craig’s trial will focus on a now familiar narrative of how Mr. Manafort led a far-flung effort to burnish the reputation of Viktor F. Yanukovych, who served as Ukraine’s president from 2010 to 2014. Mr. Manafort is now serving a seven-and-a-half-year prison term for conspiracy and financial crimes, including some stemming from that work.

Seeking to shore up Mr. Yanukovych’s image in the West, Mr. Manafort recruited Mr. Craig’s law firm, Skadden, Arps, Slate, Meagher & Flom, to produce a report on the corruption case against a political rival of Mr. Yanukovych, the former Ukrainian prime minister Yulia Tymoshenko.

According to the indictment charging Mr. Craig, he wrote a memo for his own files stating that the evidence of Ms. Tymoshenko’s criminal intent was “virtually nonexistent.” But the report he spearheaded found that the evidence presented at her trial supported the conviction that led to her imprisonment.

The reaction of American journalists to the Skadden Arps report was of intense interest to Mr. Manafort, to public relations officials hired to spin the report’s conclusions, and to Mr. Craig, prosecutors say. Following a carefully calculated news media strategy, Mr. Craig delivered an advance copy to The New York Times and volunteered to be interviewed by Times reporters, court filings show.

After the report’s publication in December 2012, Justice officials asked Mr. Craig a series of questions, including how much the law firm had been paid and whether the firm’s lawyers had discussed it with journalists.

Mr. Craig insisted that he had discussed the document with journalists only after it had become public and purely to “correct misinformation,” according to court filings. He did not indicate that the law firm had been paid more than $4 million by a Ukrainian oligarch, whose funds were routed through offshore accounts, disclosing only a fraction of the firm’s payments, prosecutors claim.

Although Mr. Craig was well aware of FARA’s requirements, prosecutors say, he misled the Justice Department officials because he did not want to limit his future career prospects by registering as a foreign agent. They claim he repeated some of his misleading statements to the special counsel’s team, as well.

The government’s witness list includes Mr. Craig’s own former law partners. In January, the firm agreed to pay the Justice Department $4,657,568.91 to settle an investigation into FARA violations.

That amount represents precisely what it was paid for its Ukraine report.

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Former federal prosecutors explain where the Epstein investigation goes now and dismiss 'far-fetched' conspiracy theories

U.S. financier Jeffrey Epstein appears in a photograph taken for the New York State Division of Criminal Justice Services' sex offender registry March 28, 2017 and obtained by Reuters July 10, 2019.  New York State Division of Criminal Justice Services/Handout via REUTERS

Convicted sex offender Jeffrey Epstein’s death by apparent suicide early Saturday morning while in federal custody has made the future of already complex legal proceedings even murkier. 

The Southern District of New York charged Epstein with sex trafficking of minors and conspiracy to commit sex trafficking of minors in an indictment in July that accused him of sexually assaulting dozens of underage girls between at least the years of 2002 and 2005 in his Palm Beach, Florida, and Manhattan residences.

The US Attorney’s Office released a statement on Saturday saying that investigation, with emphasis on the charge of conspiracy, will continue. Epstein’s victims have been and continue to be urged to contact the FBI, which along with the SDNY and Office of the Inspector General is conducting an investigation into the circumstances surrounding Epstein’s suicide.

In examining what lies ahead for the prosecution, Epstein’s accusers, and the rampant conspiracy theories surrounding wealthy financier’s death, two former federal prosecutors shared their insight with Business Insider. Both cast doubt on the conspiracies, and suggested that his victims may sue his estate for damages.

Read more: Attorney General Barr announces investigation into Epstein’s death by suicide amid reports the convicted sex offender wasn’t on suicide watch when he died

“I think it’s far-fetched for somebody to say ‘I’m gonna kill off Epstein because I’m not charged yet, but maybe I will be,'” Laurie Levenson, who is now a professor of law at Loyola Law School, told Business Insider.

Levenson said the federal prosecutors pursuing Epstein’s case will potentially seek charges against co-conspirators. Given the public pressure for someone to be held responsible for the charges against Epstein, she thinks “now is the time to worry” for those who were involved with Epstein’s alleged sex trafficking operation. 

“Frankly, I think if they had a strong case against other people, we might have already seen it,” Levenson said. “Maybe what the hope is, now that Epstein’s not around, the people will say ‘Someone has to be held responsible,’ and more people will come forward. So that’s a possibility. But right now it’s pretty theoretical.” 

fast facts jeffrey epstein case graphic

David Weinstein, an attorney who for 11 years served as an Assistant US Attorney for the Southern District of Florida, where Epstein was initially charged, told Business Insider that the non-prosecution agreement Epstein signed in 2008 may hamper the SDNY’s investigation into possible co-conspirators going forward, if they pursue the conspiracy charge against Epstein.

“There’s a particular specific paragraph that uses the words ‘the United States’ and then talks about named co-conspirators and then unnamed,” Weinstein said, referring to the controversial plea deal that led to its co-signer, former Labor Secretary Alexander Acosta, who was then US Attorney in Miami, to step down after the deal came under scrutiny.

“So there may be some leverage there that the unnamed co-conspirators can use to argue that the United States had given them immunity,” he said. “But it’ll be a little difficult because they’ll have to interpret the words on the page.”

Epstein’s victims will be able to identify co-conspirators going forward, Weinstein said, but depending on where the sexual assaults took place, some evidence may not be able to be included. Epstein owned at least one private jet and had global connections, and took some of his accusers on trips worldwide, where they allege they were also abused.

“It’ll also be interesting to see what they seized, both from his apartment in New York, off of his person when they arrested him at the airport, any bank accounts that they’ve subpoenaed, any logs that they’ve either subpoenaed or been provided from his planes, and whether or not that adds to the corroboration for any live witnesses they have,” Weinstein said.

Weinstein also suggested that, as reports emerge that Epstein was no longer on suicide watch at the time of his death, an examination by medical professionals must have occurred that determined suicide watch unnecessary.

“There have even been incidences where prisoners who were on suicide watch were still able to take their own lives,” Weinstein said. “There are 10 to 15 minute increments where there’s not somebody who’s specifically watching them, and that despite trying to keep everything away from them in their cells, they still find a way to take their own lives. I wouldn’t say it’s common but I don’t think that this is uncommon, it’s just rather infrequent.”

Read more: A Manhattan mansion, a ranch in New Mexico, a private jet, and a black stuffed poodle on a Steinway. Here’s a look at the assets of Jeffrey Epstein.

Both former federal prosecutors noted that conspiracists will continue to deny facts, even as new information is presented to them, but said that if ineptitude on the part of the detention facility is to blame, there should be consequences for those who did not do their jobs. 

“You’ve got power and politics and sex and open questions, and conspiracy theorists are going to run with this no matter what, but it’s important for all of us who are not looking for conspiracies to understand what happened,” Levenson said. “I think it could put the credibility of the criminal justice system on the line, and that’s so important.”

On the civil side of the investigation, lawyers representing Epstein’s accusers have called for the administrators of Epstein’s estate to freeze and hold his assets, so that victims can receive compensation. 

“It may result in more people wanting to come forward,” Levenson said. “Or it just may be that they realize that there’s an estate they can sue, and who knows what that estate will be? I don’t know whether they’ll fight all these claims, get the money on all these claims, that’s a big question mark to come.”

Since Epstein is dead, both Weinstein and Levenson said the current indictment against him will be dismissed, and Weinstein predicted the federal prosecution will meet with US District Judge Richard Berman within the next week to file a motion to dismiss it. The timeline for what could potentially include new criminal charges for co-conspirators, civil lawsuits, and investigations into Epstein’s suicide is unclear.

Levenson suggested that it will take several months just to sort out potential additional accusers, evidence, and information. She said concrete legal action probably won’t emerge for up to a year. 

“The interesting thing is how patient the public can be,” Levenson said. “I don’t know that they’ll have all the answers overnight. There are a lot of people to talk to, a lot of things to find out, and in some ways it would be bad for them to rush out a conclusion and then have that picked apart as well. There’s going to be a lot of pressure to investigate this very quickly, but the most important thing is that they be right.”

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