The Convoluted History of U.S. v. Parlato Began With the Bronfman Sisters

Joe O’Hara

[This is Part 2 of a series of articles that I am writing about the U.S. v. Parlato Et Al case. Along the way, I will detail what a sham this case is – and how it was orchestrated by two inner circle members of the NXIVM criminal enterprise, Clare and Sara Bronfman, and a conman named Shmuel Shmueli – all three of whom just happened to be represented by the same attorney, William F. Savino. I will also explain how many of the slimy tactics that were used to indict Frank have become the norm in the everyday operations of the U.S. criminal justice system. Readers are encouraged to ask questions – which I will endeavor to answer on a timely basis].

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Part 1: The Buffalo News Raises Questions About Frank Parlato’s Case – More Detailed Analysis Needed

Frank Parlato was indicted by the Office of the U.S. Attorney for the Western District of New York (WDNY) on November 20, 2015.

The 28-page indictment included nineteen (19) separate criminal counts plus two (2) forfeiture actions.

While the number of charges makes it appear that Frank is a major crime boss, a closer analysis of the indictment indicates that most of the charges are simply duplications and variations that are based on the same set of facts and circumstances.

Thus, when we look closer at the indictment, we see that it contains:
• One (1) charge of “impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service…in the ascertainment, computation, assessment and collection of…income taxes”.

• One (1) charge of corruptly endeavoring “…to obstruct and impede the due administration of the internal revenue laws.

• Seven (7) charges of making illegal wire transfers.

• One (1) charge of conspiring to commit wire fraud.

• Nine (9) charges of engaging in illegal monetary transactions.

In reality, the nineteen criminal charges mostly involve a handful of financial transactions that are described in different ways in order to allow the prosecution to load up the indictment with what it hoped were enough charges to cause Frank to accept a plea deal rather than risk going to trial.

This is a common tactic that is used by both federal and state prosecutors in order to gain an unfair advantage over defendants in criminal actions.

Indicting defendants for multiple crimes arising out of the same act – AKA “crime stacking” – has become a mainstay for many prosecutors.

In addition to transforming the legal battleground into an uneven playing field, crime stacking also gives judges an inordinate amount of power when meting out sentences.

One of the most common examples of crime stacking occurs when prosecutors charge a defendant with both committing a criminal act and conspiring to commit the same act – which, not coincidentally, was one of the “stacks” in Franks’ case.

In this regard, the U.S. Supreme Court has ruled that being simultaneously charged with a crime – and with a conspiracy to commit that same crime – are not the “same offense” for double jeopardy purposes even if the two charges are based on the same underlying facts and circumstances.

As a result, whenever two or more people are charged with a crime, they can be – and often are – also charged with conspiring to commit that same crime.

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Some Examples of Multiple Criminal Charges for the Same Criminal Act

Here are a couple of real-world examples of how a prosecutor can use crime stacking to put pressure on a defendant to take a plea deal

Example #1: A woman on a plane complained that she had life-threatening allergies and was having trouble breathing. There were two dogs in the cabin and she demanded that they be removed. Instead, the flight crew demanded that she leave. When she stubbornly refused to get up out of her seat, officers were called to remove her. One of them wrapped his hands around her waist and another grabbed her leg, and her pants ripped when they tried to physically lift her out of her seat. The incident was caught on cellphone video – and the woman was arrested and charged with five crimes: disorderly conduct, failure to obey a reasonable and lawful order, disturbing the peace, obstructing and hindering a police officer, and resisting arrest.
https://www.latimes.com/local/california/la-me-ln-southwest-airlines-woman-removed-20170927-story.html

Example #2: A man robbed a bank with a fake bomb that turned out to be a disguised sex toy. For that, he was charged with nine felony counts including aggravated assault, robbery, threatening to use a weapon of mass destruction, and possessing a facsimile weapon of mass destruction.
https://www.nbcnews.com/news/us-news/pittsburgh-man-charged-robbing-bank-sex-toy-n376096

Had the prosecutor in Frank’s case not chosen to utilize “crime stacking”, Frank’s indictment would have likely been limited to the following charges:
• One (1) charge of “impeding, impairing, obstructing, and defeating the lawful functions of the Internal Revenue Service…in the ascertainment, computation, assessment and collection of…income taxes”; and

• One (1) charges of making illegal wire transfers.

So, instead of facing a 19-count indictment, Frank would be facing a 2-count indictment.

Just imagine what a different impression that will make on the 12 jurors who are selected to hear his case.

“Mr. Parlato has been charged with nineteen felonies” sounds a whole lot different than “Mr. Parlato has been charged with two felonies”.

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Clare Bronfman’s Perjury Leads to Superseding Indictment

One of the key elements of the original indictment – and, indeed, the allegation that was the basis for the FBI to start investigating Frank – concerned Sara and Clare Bronfman.

The criminal complaint filed by Clare [l] and Sara [r] Bronfman led to a 5-year FBI investigation of Frank Parlato.
As set forth in the original indictment, it was alleged that on January 6, 2008, the Bronfman sisters wire-transferred the sum of $1,000,000 into the bank account of Johnston and Peach, a company that was owned and operated by Frank.

What the indictment doesn’t reveal is that Clare Bronfman perjured herself when she testified before the grand jury that ended up indicting Frank.

More specifically, Clare testified that she and Sara had entered into a binding contractual agreement with Frank regarding the work he was to undertake for them with regard to a real estate development project in Los Angeles, CA in which they had invested $26 million.

Clare told the grand jury that she and Sara had signed the agreement.

The lead prosecutor in the case, then-Assistant U.S. Attorney Anthony Bruce, claimed that he had a copy of the signed document – and promised to provide Frank’s attorneys with a copy of it.

The problem was that neither of the Bronfmans had ever signed any such agreement.

The bigger problem for Clare – and for which she should have been prosecuted for perjury – is that she had also sworn, under oath, in a California case involving the same real estate project, that she and Sara had NOT signed any contractual agreement with Frank.

In addition, Clare had also sworn under oath in a civil lawsuit that she and Sara initiated in 2012 against Frank that the sisters had “loaned” $1 million to Frank “without a written agreement”. That’s another perjury charge that was never brought against Clare.

And so it was that the prosecution had to drop the Bronfman-related charge against Frank in a superseding indictment that was presented to a new grand jury that was impaneled on November 3, 2017.

Because it was a new grand jury, no one on it likely knew anything about the original indictment. And it is extremely unlikely that the prosecution mentioned anything about the fact that it had wrongly charged Frank with a crime related to his business dealings with the Bronfmans.

The new grand jury issued a superseding indictment that was filed on May 23, 2018 – just a couple of months AFTER Keith Raniere was indicted and a couple of months BEFORE Clare Bronfman was indicted in the Eastern District of New York.

The new indictment against Frank – which contains eighteen counts – entirely omits any reference to Frank’s dealings with the Bronfman sisters.

To offset that, however, it also contains more allegations concerning the same activities that were included in the original indictment – which amounts to nothing more than additional crime stacking.

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More To Follow On U.S. v. Parlato Et Al

Many more facts will emerge as we dive deeper into the pending charges against Frank.

But one thing that will never change is Frank’s insistence that he has not committed any crimes.

Frank Parlato

It has already been proven that the original basis for launching an investigation into Frank’s businesses – that he had defrauded the Bronfman sisters – was based on Clare Bronfman’s perjured testimony before a federal grand jury.

Had Clare not made her fallacious allegation, it is quite possible that Frank’s business dealings would never have been investigated.

And so it is that Frank is still facing eighteen felony charges – and, as currently scheduled, will go to trial on May 19, 2020.

As Frank said, “Now we shall go to trial and I will have my chance at last to establish my innocence. The prosecution, in prepping for this case, will soon have to examine the ‘evidence’ of this case that AUSA Anthony Bruce left them with. Then they will understand they have no case, that this was all manufactured to please the Bronfmans and possibly others. It might have worked.

“Normally people who are indicted take a plea deal. But I will never take a plea deal admitting to something I never did – even if the penalty is ZERO. The reason for that is that I cannot in good conscience enable this corrupt system of overcharging or falsely charging people knowing they won’t risk trial and will take a plea deal, even to something they did not do.

“As Americans, we have a tradition of standing up to oppression. That even includes the government even if it has the Orwellian name of ‘the Department of Justice.’”

 


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J.J. O'Hara

41 Comments

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  • Joe, I’m not a lawyer, nor do I play one on TV, so I have a question.

    You have explained that some of Frank’s charges related to the Bronfman sisters were dropped, but that the remaining charges are still related to his business dealings with them. Can Frank’s attorneys subpoena the sisters testify in court? As hostile witnesses I guess?

    That could be a bad look for the government, with one sister who pleaded guilty (and possibly appealing her sentence) and the other sister desperate not to enter the United States. Would Sara try to be deposed in France, if she was unable to evade service? Would the jury be privy to such machinations? Would Clare’s criminal history, or at least her history of perjury, be admissible?

    If these are worthwhile questions, perhaps you might be willing to address them in a future post.

    • In the civil suit, you take depositions. And yes, they will be called as witnesses, and convictions come into play. How many lawsuits someone previously filed may be relevant. Sometimes, even opposing counsel can be deposed if there’s evidence of wrongdoing.

      You can also file a motion to disqualify an attorney, which is a great way to create a record of that wrongdoing.

      You can file a Rule 11 safe harbour letter for sanctions down the road. Especially if there’s vexatious litigation.

      Most importantly, you can send a Rule 68 offer of judgment, to help secure reimbursement of attorney fees in the event you win.

      Just speaking in generalities and not to this case in particular.

    • All of the allegations regarding the Bronfman sisters were dropped in the superseding indictment. But the reality remains that it was their allegations against Frank that were the primary reason why the Feds started investigating him and his businesses. The other reason had to do with allegations by Schmuel Schmueli, a con-man who just happened to be represented by the same attorney who was representing the Bronfman Brats, Wee Willie Savino, a Buffalo attorney who has the worst dyed hair I’ve ever seen (It has to be DIY product). While I think the Bronfmans should be called as witnesses, it will ultimately be the presiding judge who will decide that issue.

      Even if the judge allows Frank to call both sisters, I doubt that Sara can be compelled to appear as a witness – either in the U.S. or France. Usually, extradition treaties only cover situations where the person in question has been charged with a crime as opposed to when they’re being subpoenaed as a witness.

      Even if the judge allows Frank to call Clare, she will likely claim Fifth Amendment protection from answering any questions about her perjured testimony to the Grand Jury that issued the original indictment. I have not researched whether she could be compelled to answer those questions if the applicable statute-of-limitations has already run out but I don’t think so.

      The jury will not hear about any of these matters.

  • Should we be commenting or sharing ideas, if some of us are attorneys, if Frank is represented by counsel…..?

    No one wants to overstep.

    • I don’t think there’s anything wrong with a lawyer commenting on Frank’s case – or, for that matter, on any other case. Your opinion may be somewhat limited by your knowledge of the details of the case but that’s pretty much always the situation other than cases you’re working on. So, by all means, comment away!

  • O’Hara, he jury will probably not hear anything about the original charges versus the current charges, anything about Bronfman, etc. The judge will probably rule all of that information as inadmissible. So, while you’ll get some sympathy on this website, it has NOTHING to do with the reality in a court of law.

    • Scott, I think you are wrong here. The entire case – following the money, etc. – is inextricably tied into the Bronfmans. Despite the mistake the Feds made by charging me with “stealing” from these “innocent victims”, they are interwoven into the case and I certainly plan to call Clare and Sara Bronfman as [hostile] witnesses and, of course, I plan to call Keith Raniere. I plan to subpoena him.

  • Joe isn’t it illegal to have so many Bank accounts? If it wasn’t illegal why did the government call it whack a mole? . and the reporter say a dizzying amount of bank accounts and companies? It seems like that is illegal.

    • No, there is no law that prohibits anyone from having as many bank accounts as they want. Many people have multiple bank accounts because the FDIC insurance limit is $250,000 per account. Others do so because they prefer to keep their various businesses separate from one another.

      In Frank’s case, he had a very sound business reason for opening multiple accounts – and did so per the advice of his attorney. And, as I mentioned in a prior reply, every one of those accounts was registered under his name and his social security number.

      Using the term “whack-a-mole” to describe Frank’s business activities is just one way that the prosecution likes to “set the stage” for a trial. Newspapers readily print that type of defamatory descriptions without taking into consideration the negative impact they may have on prospective jurors. You can expect much more of this type of stage-setting as the trial gets closer.

  • Frank, 3 issues you need to contend with:

    1. You’re in the land of Buffalo Billions. Your community just went through that, and they are skeptical about everything;

    2. Nxivm and all its connotations;

    3. Multiple llcs never look good to the average joe sitting on a jury

    Just an opinion. Not meant to be construed as advice.

    • You’re 100% correct that the Buffalo Billions scandal will still be on the minds of at least some jurors. Hopefully, they’ll view that case for what it really was: a prime example of the corruption in government these days.

      As I mentioned in an earlier reply, Frank had very sound business reasons for setting up the multiple companies and bank accounts – and was also acting per the advice of his attorney when he did so. In addition, all of these activities occurred over a 10-year period – and, most importantly, every bank account was registered under Frank’s name and Social Security Number (He would not have done that if he was trying to hide anything).

      What we have here is a case where the government is trying to convict via insinuation rather than proving that any real crime occurred. And the prosecutors are counting on the fact that multiple bank accounts and multiple companies will sound suspicious to the average juror – when, in fact, there is absolutely nothing illegal about either.

    • 1. They should be skeptical, it was “free” money from the corrupt state;
      2. I doubt anything related to NXIVM will allowed to be presented in court; and
      3. If it’s common for real estate folks to have multiple LLCs and they are all in Frank’s name/SS#, a paralegal should be able to present evidence that’s it’s no problem.

      Just the facts. Not meant to be construed as an overactive imagination.

  • So all the different llcs etc–was that with bronfman money? Why were there so many different llcs and bank accounts?

    What exactly was the source of the funds, the intended use, and the reason for the whack a mole llcs??

    • I will be addressing this issue in detail in a later post – and Frank may respond to your questions before that. For now, let me say that Frank had very sound business reasons for setting up the multiple companies and bank accounts – and that he was also acting per the advice of his attorney when he did so. In addition, all of these activities occurred over a 10-year period – and, most importantly, every bank account was registered under Frank’s name and Social Security Number (He would not have done that if he was trying to hide anything).

      What we have here is a case where the government is trying to convict via insinuation rather than proving that any real crime occurred. And the prosecutors are counting on the fact that multiple bank accounts and multiple companies will sound suspicious to the average juror – when, in fact, there is absolutely nothing illegal about either.

      • It is not at all uncommon to form numerous LLCs (and have a bank account/EIN for each), particularly in the world of commercial real estate. That way, it allows each property to be treated as a separate business. One of the advantages of doing this is that each property can be insured individually and no property will cause/be a liability on another. All monies that go into/out of the property are tied to the LLC and not intermingled with other LLCs (when done legally). Further, it makes it far easier to market the properties down the road. The IRS is fully aware of this type of business structure, and they even provide information on how to set one up so it can be taxed appropriately. I sure hope your attorneys can convey this to a jury, Frank.

        • I didn’t make it sound that way at all, Scott. I just have very little faith in juries understanding financial cases. The prosecutors have already shown they are willing to spin this to make it look worse than it already is. Plus, have you read some of the comments from some of the folks here? They seem to think multiple LLCs/accounts might be a crime too. This is what Frank is facing. Don’t be flippant that this will be easy for his attorneys. It’s going to be a hard-fought (and hopefully won) battle.

          • My comment was directed to O’Hara. Many of the commenters don’t have a clue what they’re talking about. I didn’t say it would be easy, but it would be easy to bring in multiple witnesses and experts to back up Frank’s position. I can’t say whether it will be easy or hard, I haven’t seen hardly any of the evidence. Unlike others on this website, I don’t make a flippant decision without knowing what I’m talking about.

          • “Many of the commenters don’t have a clue what they’re talking about.”

            You are among those commenters, Johnson.

About Frank Parlato

About Frank Parlato

Frank Parlato is an investigative journalist.

His work has been cited in major publications all over the world, including The New York Times, The Daily Mail, VICE News, CNN, Fox News, Rolling Stone, People Magazine, and more.

Frank Parlato was the lead investigator and coordinating producer of Investigation Discovery's 2 hour blockbuster special 'The Lost Women of NXIVM.'

Frank Report is dedicated to Frank's investigative journalism and the pursuit of truth.

Read more about Frank Report's mission.

If the whole world stands against you sword in hand, would you still dare to do what you think is right?

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