By: J.J. O’Hara
[This is Part 12 of a series of articles that I am writing about the pending prosecution of Frank Parlato (Frank’s trial is scheduled to start on May 19th). As usual, readers are encouraged to ask questions – which I will endeavor to answer on a timely basis.
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On March 17, 2015, Frank Parlato’s attorneys submitted a 21-page refutation of the various allegations that had been made against him by Clare and Sara Bronfman – and by Anthony M. Bruce, the then-Assistant U.S. Attorney for the Western District of New York (WDNY) who had already made it clear that he intended to indict Frank on something.
If nothing else, Bruce was a man of his word.
When he promised to indict someone, Bruce followed through on his promise – regardless of whether that someone had committed any crimes.
But let’s take a look at some of the information that Frank’s attorneys turned over to Bruce and his colleagues almost five years ago – and see if we can determine what the hell was going on.
The scene is March 2015 – almost 4 years after the FBI and the IRS began investigating Frank (Note: It has now been almost 9 years since this investigation was launched at the request of Bruce).
By that point in time, Frank had already turned over numerous documents and records to the federal investigators on a voluntary basis – i.e., without any subpoenas having been issued – because he knew he hadn’t committed any crimes and he believed that the truth would bring an end to the investigation.
Bruce had outlined what sort of criminal charges he was considering bringing against Frank – and Frank and his attorneys decided to basically show Bruce what their defense would look like if he moved forward with any of those charges.
It’s an unusual scenario – but it’s what actually happened.
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What Charges Were the Feds Considering?
At this stage, Bruce had not identified exactly what crimes he believed Frank committed.
But he asserted, in general terms, that Frank defrauded the Bronfman sisters and one of his business partners, Larry Reger – and that Frank also tried to avoid paying taxes that he owed to the federal government.
And so Frank’s attorneys put together a document “…with the intent of proving that Mr. Parlato did not commit any fraud or attempt to evade any taxes”.
Frank Report readers need to keep several important facts in mind regarding the circumstances that existed in March 2015.
These include the following:
– The Bronfman sisters had already initiated a civil lawsuit against Frank in an effort to get back the $1 million they wired to him in conjunction with the work he undertook to salvage their $26 million investment in a real estate development project in Los Angeles, CA (That lawsuit is still pending). They are represented in that lawsuit by William F. Savino, a local attorney who is a long-time friend of Anthony M. Bruce.
– Frank and the alleged victim, Larry Reger formed a company named Tourist Services in conjunction with their plan to renovate the abandoned Occidental Chemical building in Niagara Falls, NY – which Frank renamed One Niagara. (They each owned 50% of the company). And they had negotiated – and executed – an “Operating Agreement” that detailed their respective roles and responsibilities as regards the renovation project. Per the terms of that “Operating Agreement”, Frank was to be in charge of the day-to-day operations of the company.
– The alleged victim, Larry Reger never complained to the feds – or, for that matter, to anyone else – about his business partnership with Frank Parlato. He made a lot of money on the project. Unlike the usual case where a fraud victim loses money, this is one where the alleged victim made millions from his investment with the accused.
– Prior to Frank coming on board in the Niagara Falls project, Reger had lent $2.5 million to David Ho, the original developer of the abandoned building. Reger stood to lose every penny of that investment as Ho refused to pay him back. There was no equity in the project at that point in time.
– Frank made a deal with the original investor and Larry Reger was repaid.
– Frank and Larry [the alleged victim] jointly withstood a barrage of baseless lawsuits that had been initiated against them by a conman named Shmuel Shmueli who was trying to cut himself into a piece of the One Niagara project without investing any money in it (When all was said and done, their court record against Shmueli was 10-0). At one point, Shmueli was represented by the same William F. Savino who is still representing the Bronfman sisters in their pending legal action against Frank.
– The IRS had not filed any claims against Frank for any unpaid taxes (Nor, as it turns out, have they ever done so).
– Larry Reger died in 2015 prior to Frank being indicted – which is awfully convenient for the feds since he cannot testify.
– At the time of the indictment, the two alleged victims were the Bronfman sisters, [who later were dropped from the indictment when Clare was indicted as part of the Feds takedown of the NXIVM criminal enterprise] and a dead man who never complained or sued Frank.
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Charges Regarding the One Niagara Project
Back in 2015, prior to the indictment, based on what they had been told by Bruce, Frank’s attorneys understood that the charges that the Feds were considering bringing against Frank with regard to the One Niagara project revolved around the Feds’ belief that:
– Larry Reger had not been repaid on a $1.4 million promissory note that had been memorialized in the “Operating Agreement” for Tourist Services;
– Frank had allegedly taken funds from the Tourist Services company that were not reported to Larry Reger; and
– Frank had not been transparent with Larry Reger and his agents.
Even before we look at the refutational evidence that Frank’s attorneys provided to Bruce and his colleagues regarding this matter, one thing should be perfectly clear to Frank Report readers.
If any of the Feds’ allegations regarding the One Niagara renovation project were true, Larry Reger would have undoubtedly initiated a civil lawsuit against Frank. Reger was, after all, a very experienced and sophisticated businessman and investor and he had attorneys and accountants who reviewed – and monitored – every one of his investments.
Bur Larry Reger never initiated any such civil lawsuit.
Nor did he ever complain to the Feds – or anyone else – about his business dealings with Frank.
So, you ask, then why the hell was Bruce inserting himself – without having been requested by anyone to do so – into the private dealings of two experienced businessmen?
Well, as I already noted, Anthony M. Bruce was a man of his word – and when he committed to indicting someone, he was damn well going to indict that person even if there was no basis whatsoever for doing so.
An indictment alone is enough to destroy most people’s lives. It destroys reputations – and it bankrupts people as they pay lawyers to defend themselves. Most people who are indicted lose their jobs or various business opportunities. An indictment alone is – for most people – a financial and personal disaster.
This is why NXIVM paid bonuses to its consultants and attorneys upon the issuance of indictments against its enemies. Convictions weren’t necessary for NXIVM to cripple its enemies.
Bruce very likely assumed that Frank would take a plea deal – and it would never go to trial. After all, that’s what 97% of federal defendants end up doing.
Several plea deals have, in fact, been offered to him. He has flatly refused every one of them.
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Refutational Evidence Regarding the One Niagara Renovation Project
But let’s go back to March 2015 – eight months before Frank was indicted.
During a meeting with Bruce, Frank’s attorneys began by pointing out that the feds were simply confused regarding several aspects of the business dealings of Frank and Larry Reger.
They noted, for example, that the promissory note involving Tourist Services was for $500,000 rather than for $1.4 million, as the feds mistakenly thought.
And they pointed out that Larry Reger had previously testified, under oath, that the $1.4 million promissory note cited by the feds was, in his own words, “completely independent” of Tourist Services.
Frank’s attorneys also provided evidence that Tourist Services’ $500,000 obligation to Larry Reger had been paid in full on or about September 10, 2007 – a fact that Larry Reger also confirmed while testifying, under oath, in another [Shmueli] matter.
In addition, Frank’s attorneys provided documentation to prove that Larry Reger had agreed not to be paid anything on the $1.4 million note unless/until the One Niagara property was sold (He and Frank had signed a “Forbearance Agreement” that ensured interest would continue to accumulate on the debt during the interim period.)
And, lastly, Frank’s attorneys provided detailed documentation to prove that Larry Reger had received payment-in-full for all of Tourist Services’ financial obligations to him. Interestingly enough, that same documentation also showed that as of March 2015, Frank had only received half of what he was owed by the company.
But none of that evidence mattered.
Because Anthony M. Bruce was a man of his word.
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A Crime Without a Victim
Bruce’s insistence that Frank had somehow defrauded Larry Reger was utterly without basis – and totally contrary to what the alleged victim had to say about his business dealings with Frank.
In essence, Bruce was alleging that Frank had committed a crime where there was no victim.
To underscore just how ridiculous this situation was, let me add one other fact that I think is extremely important to the analysis of Bruce’s allegations against Frank.
Per the “Operating Agreement” that Frank and Larry Reger had signed at the time they established Tourist Services, if Larry Reger was not paid in full the total amount he was contractually entitled to – he had the sole and absolute right to remove Frank from his day-to-day management of the company and become co-manager with Frank of the property. This provision was to ensure he got a handsome profit from the project under Frank’s management. If he wasn’t satisfied, he could step in at any time and co-manage the project with Frank.
And guess what? Larry Reger never exercised that right – or even threatened to do so.
It is a fortunate thing for the government that the alleged victim is dead or they might not have even a semblance of a pretend case to try to bluff Frank into taking a plea deal.
But if this case goes to trial, the prosecution still has a serious evidentiary problem. Their victim is dead. While they could allege anything in the world before a puppet grand jury and get Frank indicted, they’ll have a problem proving any of it before a trial jury of 12, where evidence beyond a reasonable doubt is required.
And just as Reger is not alive to testify on Frank’s behalf that he was not a victim, neither can he be called to say that he was a victim.
The written record shows Reger never complained about Frank Parlato.
In fact, within days of the time Frank’s lawyers were showing Bruce evidence that Frank did not defraud the Bronfmans or Larry Reger – Reger testified in the last and final lawsuit of Shmuel Shmeuli against Reger and Frank.
Reger testified that Frank was a good partner.
Within two weeks, Larry, who was in his 80s, suffered a head injury from an auto accident and died.
While the government is aware of Reger’s death, they are probably unaware of his supportive testimony of Frank – essentially his last public statement, under oath and for the record.
On top of that, Larry was repeatedly interviewed by the FBI – and never once accused Frank of cheating him.
Bruce even tried to persuade Reger he was a victim but he couldn’t produce any evidence to back up that assertion. If Reger had been cheated, it would have been the perfect time for him to make a criminal complaint. With Bruce already gunning for Frank, the feds would have welcomed Larry’s claims.
But unlike the Bronfman sisters. Reger declined to file a false criminal complaint against Frank.
When Reger refused to file a criminal complaint against Frank, Bruce shifted to making the case that Reger – a self-made man, whose net worth was estimated to be around $500,000,000 – did not know that he had been cheated by Frank. Bruce tried to tell Frank’s attorneys that Reger just wasn’t savvy enough to realize he had been cheated and then he died.
Unfortunately for the DOJ WDNY, Bruce left them with a case where there is absolute evidence that Reger was not cheated and got every dime he was entitled to.
It’s too bad for them that Frank Parlato refused to take a plea deal no matter how light the sentence is.
It’s a matter of principle, Frank has said.
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In my next post regarding the matter of the U.S. v. Parlato Et Al, I will review more of Anthony M. Bruce’s allegations against Frank Parlato – and detail the evidence that Frank’s attorneys provided to refute those allegations back in March 2015.
What I will not do, however, is try to explain why this travesty of justice is still ongoing.
Anthony M. Bruce retired shortly after Frank was indicted – which means he’s no longer able to pull the strings on this case.
Surely, there must be someone in the U.S. Department of Justice who can put an end to this bullshit right now.
A well-publicized acquittal would be good for the government b ecause it would show that in the end, the system can be fair.
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Previous posts in this series can be accessed at:
Part 1: The Buffalo News Raises Questions About Frank Parlato’s Case – More Detailed Analysis Needed
Part 2: The Convoluted History of U.S. v. Parlato Began With Bronfman Sisters
Part 3: The Federal Case Against Frank Parlato – a Prosecution in Search of a Crime
Part 4: What Are the Charges in U.S. v. Parlato — and What Do They Mean?
Part 5: The Conman Cometh – Schmuel Schmueli – Who, Combined With the Bronfmans, Led to Parlato’s Indictment
Part 6: Fate Brings Conman Shmuel Shmueli Into Frank Parlato’s Life
Part 7: Why Frank Parlato Established Several Companies and Multiple Bank Accounts
Part 9: The Persecution of Frank Parlato: What Have We Learned so Far?
Part 10: Where’s the Beef? Feds Will Try to Convict Parlato on Insinuations Rather Than Facts
Part 11: Feds Refused to Accept Proof of Frank Parlato’s Innocence – Pushed Ahead With Indictment
It goes without saying that Bruno’s icon is offensive. I hesitate to even comment on a thread wherein it’s displayed. Images speak louder than words. Again, I’m baffled as to why anyone fighting to prove their innocence would allow it. At least, speak to that Frank. What’s the point of the Koo-koo clan conehead invasion here, including Johnson’s drivel?
It is interesting that the balless left wing blowhards don’t comment on these Parlato threads, whether to either defend him or state for the Government against him. His case parallels the bogus impeachment case against the President in amazing fashion. We know where these left wing bigots stand on that matter.
Frank, how do I find that picture of Bruce lying in bed with Savino and Bronfman? Someone down at the court house mentioned it. I want to see for myself.
It is a work of art by Marie White. I will add it to the post at the bottom – for yours – and I hope Savino and Bruce’s delectation.
Frank should get convicted. He may be innocent of the charges but he is guilty of attacking Toni Nataiie.
A religious sect kidnaps 15 people in Panama and they find in their territory a mass grave with six minors and one pregnant indigenous.
The finding came during an operation of the Special Forces of the National Police to dismantle the religious sect.
Bruno Balenciaga I don’t know if you watch and listen to OG Shadow on YouTube but have a feeling that you might appreciate this journalist as much as I do. He has a wealth of firsthand information, particularly about the Mexican cartels, many, many specific details, things that don’t make “the news.” Every day. He is right there now, living in Sinaloa, and I listen to him every day. He doesn’t disclose any details until he has established what the facts are, from several sources.
He has a wife and little children, and he invested in a water filtration system, which he works from his house, so that he can sell clean water very inexpensively and make an honest living. (He learned the hard way.)
More than one cartel has put higher prices on local clean water by “taxing” it, so essentially if someone buys their household water from stores, they have to pay the cartels’ “illegal and unrepresentative taxation,” just to be able to drink, to cook or to bathe. Forget laundry and housekeeping; dirty water gets used for that stuff. What a world.
It is insane what our neighbors in Mexico have to go through, just to have access to a minimal amount of water for their families’ simplest needs, unless you happen to be in a tourist mecca. Just saying, OG Shadow is an amazing source, if you’re interested. He helps me so much, with his information and insights, frequently packed with mind-blowing, hard facts.
Occasionally Shadow is a little bit of a challenge to understand, because, no dummy, he wears various masks. Anyhow respect, Bruno!
Our legal system gives a great deal of discretion to judges in sentencing and to prosecutors for bringing cases in the first place.
And unless outright corruption can be proved, there is little that anyone, even Congress, can do about it.
And a criminal organization like NXIVM can flourish for years by corrupting the court system.
Shadow,
If you only look at the NXIVM case in isolation, then it’s easy to look past a lot of these issues I’ve been raising in my posts about some of the inequities that exist in our criminal justice system (e.g., I’m not particularly bothered by the fact that the courtroom was tilted decidedly in favor of the prosecution in Raniere’s case, that Clare is going to get sentenced for much more time than she thought she had bought for her $6 million, or that Raniere is likely going to be used and abused while he’s in prison). The problem, of course, is that these same issues affect hundreds of thousands of other defendants who don’t deserve to be mistreated in the same way.
Based on my discussions with lots of people over the years, I’ve come to realize that many Americans are simply unaware of some of the things that go on in our courts – and in our prisons – on a daily basis. That’s why I’m trying to raise some of these issues – and to, hopefully, get people to think about them and discuss them with their friends and family.
I firmly believe that we have the best system of government that has ever existed. And I believe just as strongly that there are lots of areas where changes are needed.
There were aspects of the NXIVM prosecution that bothered me.
Anyone reading the Frank Report knew that there was a good probability that the case would ultimately involve pedophilia charges.
The female defendants all knew that they were enabling a notorious pedophile.
The Feds probably had the incriminating video for months.
But the formal charges were brought up very late in the game in the second superseding indictment.
In other words the defendants were sandbagged.
I see a similar sandbagging in the Trump impeachment trial where Nancy Pelosi threatens new charges and new evidence to further damage President Trump.
This threat of new charges comes after three years of non-stop investigations.
Nancy Pelosi will damage the Presidency by a thousand paper cuts.
While America has Rule of Law right now all it takes is a few unscrupulous prosecutors and biased judges to make political Show Trials a common occurrence.
By all means punish wrongdoing harshly but be open and above board about it and play by some rules.
How did Bruce profit from being a Bronfman hyena?
A good question.
I personally think you and Frank are brilliant writers. Claviger, you’re easy to comprehend and Frank you crack me up. You throw those hilarious visuals between paragraphs along with your witty humour. Seriously, Lauren’s testimony, and the way you’re presenting it, is very clever. I wish the others testified for us to study.
Forgive me, Don Parlato, but perhaps, Clav, you should (also) publish your fine work on behalf of Americans of all race, creeds and colors on blogs that do not feature KKK icons and assholes like Johnson in their comments section?