Based on What They Now Know, Where Do the Feds Go From Here in US v. Parlato?

By: J.J. O’Hara

[This is Part 15 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.

*****

Over the course of the past two months, I’ve been writing about different aspects of the pending U.S. v. Parlato Et Al criminal case.

Along the way, I’ve focused a good deal of attention on Anthony M. Bruce, the former Assistant U.S. Attorney for the Western District of New York (WDNY) – who, after promising to indict Frank, set about to do just that.

Before we move on to the next part of this strange and disturbing case, let’s pause to consider what options are currently available to the Feds in order to extricate themselves from the pile of shit that Bruce left behind for them to clean up.

*****

The Bronfman Connection

The problem began when Bruce decided to initiate an investigation into Frank’s business dealings with Clare and Sara Bronfman, the two Seagram’s heiresses who became involved in – and eventually became leaders in and the primary funders for – the NXIVM criminal enterprise.

That investigation later expanded to include Frank’s business dealings with Larry Reger, a well-regarded developer in Niagara Falls, NY who had previously [before Frank got into the project] invested millions of dollars into what became known as the One Niagara Project.

The Bronfman-related part of the investigation came about when William F. Savino, a local attorney who had previously represented the two sisters in pursuing baseless claims against several other individuals who had been targeted as “enemies” by Keith Raniere, contacted Bruce about the Bronfmans’ business dealings with Frank.

Savino approached Bruce, a long-standing friend, sometime after he had already filed a civil lawsuit against Frank on behalf of the Bronfman sisters. Initiating a criminal complaint in order to advance a pending civil claim is not allowed in New York State – but that’s exactly what Savino did here.

Worse yet, the Bronfmans’ criminal complaint against Frank was premised on Clare Bronfman’s perjured testimony before a Buffalo grand jury.

And worst of all, both Savino and Bruce knew that Clare had perjured herself during her grand jury testimony – and did nothing about it.

Indeed, had Clare not been indicted on unrelated matters in the Eastern District of New York (EDNY), I think federal law enforcement officials in the WDNY would have been quite content to continue prosecuting Frank for his alleged malfeasance against her and her sister, Clare’s perjury notwithstanding.

But just shortly before Clare was indicted, the WDNY sought – and obtained – a superseding indictment against Frank that removed all references to his business dealings with the Bronfman sisters.

Since then, Clare has been indicted and pleaded guilty to two federal felonies – and Sara has fled the country to avoid a similar outcome (Sara just recently fled her hiding place in France – and is now living in Portugal).

*****

The Reger Connection

As untoward as the Bronfman-related part of the investigation was, the Reger-related part was even worse.

That’s because Larry Reger never filed any sort of complaint against Frank.

On the contrary, Larry fought side-by-side with Frank against Shmuel Shmueli, a long-time conman who was trying to force them to give him a piece of the One Niagara Project (Shmueli filed ten different legal actions against Frank and Larry – and lost every one of them).

And despite numerous attempts on the part of Bruce to convince him that he had been duped by Frank, Larry Reger refused to assert any criminal claims against Frank (Reger also never initiated any civil claims against Frank).

During the course of Bruce’s investigation of Frank, Larry Reger died, never having once complained or sued Parlato. In fact, he objected to being called a victim by Bruce – and just two weeks before he died, he testified, under oath, that Parlato was a good partner to him.

Just the opposite of Bruce’s crazed allegation that Parlato had swindled him, Reger testified that Parlato had made him a great deal of money.

Happily for Bruce though and his work for the Orwellian named Department of Justice, Reger was dead.

Now, he could not testify that he wasn’t a victim.

Which allowed Bruce to alternatively claim that Reger did not know he was a victim – and that Reger did know he was a victim.

Bruce could say anything he wanted because Reger was dead and couldn’t dispute it.

So, when all was said and done, former AUSA Anthony M. Bruce had the FBI undertake a multi-year investigation of Frank based on the perjured testimony of Clare Bronfman – and the non-claims of the late Larry Reger.

Bruce had given his word that he would do everything he could to ensure that Frank was indicted.

And if nothing else, Bruce is a man of his word.

*****

Making a Mountain Out of Nothing

We often use the idiom “making a mountain of a molehill” to describe over-reactive, histrionic behavior where a person makes too much of a minor issue.

But Anthony Bruce’s actions in his pursuit of Frank Parlato went well beyond that.

He made a mountain out of absolutely nothing.

But the cunning Mr. Bruce is not a stupid man.

For he knew that if he could get an investigation started – even one that was premised on a false allegation by the Bronfman sisters and no allegation by the late Larry Reger – he might be able to find a way to indict Frank.

Which is exactly what he did.

Based on the allegations of the Bronfman sisters and Shmuel Shmueli – all of whom just happened to be represented by Bruce’s friend and confidante, William F. Savino – Bruce was able to obtain numerous bank and business records concerning the One Niagara Project operations (Most of these were voluntarily turned over by Frank; others were given in response to subpoenas).

And even though those business records did not reveal any criminal activity, Bruce was able to slice-and-dice them into eighteen separate felony counts against Frank Parlato.

That’s what a devious mind – and the prosecutorial tactic known as “crime stacking” – can do in a situation like this.

By documenting the fact that Frank Parlato had established fifteen different business entities – and opened up fifty different bank accounts – over a 12-year period, Bruce was able to convince a grand jury that Frank had engaged in a variety of criminal activities.

Indeed, as of right now, Frank is facing the following charges:
• One (1) count of “Conspiracy to Impede, Obstruct and Impair the IRS and to Commit Wire Fraud”;
• Seven (7) counts of “Wire Fraud”; and
• Ten (10) counts of “Engaging in Monetary Transactions in Property Derived From Specified Unlawful Activity”.

*****

Frank Blew up Bruce’s Plans

Bruce’s plan was fairly simple: indict Frank on as many charges as possible – and then get him to take a plea deal to much-reduced charges.

That’s how the federal criminal justice system usually works (97% of federal defendants end up taking plea deals rather than go to trial).

But Frank didn’t react the way that Bruce thought he would.

Instead of copping a plea in order to avoid the uncertainty of a trial – and the possibility of a very long prison sentence – Frank insisted on going to trial.

That means that in about three months, the Feds are going to have to present all the “evidence” they have of Frank’s wrongdoing.

Fortunately for Frank, there is no evidence to show that he committed any crimes – and plenty of evidence to explain why he had established multiple companies and opened up multiple bank accounts (Although he was provided with all this evidence back in March 2015, Bruce chose to ignore it).

So, instead of introducing documents and other evidence that will prove – beyond a reasonable doubt – that Frank engaged in criminal activities, the Feds will have to convince the 12 jurors that the only reason why someone would own multiple companies – and have multiple bank accounts – is because they were engaged in some sort of criminal activity.

Unfortunately for the Feds, every company in question was legitimately set up with its own Federal Employer Identification Number (FEIN) – and a legitimate business address. And every bank account in question was set up under Frank’s Social Security Number and his home address.

Not exactly a lot of subterfuge or treachery here.

In fact, none at all.

*****

So, What Can the Feds Do to Get Out of This Mess?

At this point, the Feds have to think long and hard whether they want to try and convict a man who they know is innocent because if they decide to proceed to trial, they run the very real risk of Frank being acquitted on all charges.

And that sort of outcome can be deadly for career-minded prosecutors.

Especially in a place like the WDNY – where losing like that doesn’t happen very often (In Federal Fiscal Year 2018, the WDNY only lost one case that went to trial).

So, what else can the Feds do?

Well, the easiest – and most honorable – option would be for them to dismiss all the pending charges against Frank. While somewhat rare, such dismissals happen on a regular basis (The WDNY did that 8 times in FFY 2018 – out of a total of 376 cases).

Dismissing the charges in Frank’s case might be even easier than usual because the people who were in charge when Frank was first indicted – AUSA Anthony M. Bruce and U.S. Attorney William J. Hochul, Jr. – both resigned from their offices in 2016.

Bruce is now “Of Counsel” to the Andreozzi Bluestein LLP law firm.

And Hochul – the husband of New York State Lt. Governor Kathy Hochul – now serves as Senior Vice President, General Counsel and Secretary for Delaware North, an international company that specializes in hospitality and food service [and ironically a company that Frank often criticized in his newspaper, The Niagara Falls Reporter].

It would be easy enough for the current U.S. Attorney for the WDNY, to simply announce that after thoroughly reviewing the matter, he had decided to dismiss all the pending charges against Frank “in the interest of justice”.

No bad mark for losing a case – and really no taint at all for the WDNY.

But if the case goes to trial and Frank is acquitted, the onus will fall entirely on the WDNY.

So, at this stage, the WDNY has at least two very good reasons to drop all the charges against Frank – and to move on to bigger and better cases.

First, it would be the right thing to do – and the just thing to do.

And second, it would eliminate the possibility of Frank being found “Not Guilty” of all the pending trumped-up charges against him.

The only question now is whether the WDNY will do what it should do.

******************************************************************************
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 8: Why Did Anthony Bruce’s Boss Not Intervene in the Case of the U.S. v. Parlato? – Governor Cuomo’s Lt Governor Was Married to the US Attorney at the Time!

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

Part 12: Frank Parlato’s Attorneys Refuted Allegations but That Didn’t Stop Anthony M. Bruce From Moving Forward

Part 13: F—k the Facts – Full Steam Ahead With False Indictment of Frank Parlato – With AUSA Tony Bruce Suborning Perjury

Part 14: Parlato Case: For Anthony M. Bruce, Complexity = Criminality

J.J. O'Hara