Once deemed elite, U.S. attorney office Manhattan castigated for repeated abuses

Latest judge's ruling and admissions by U.S. attorney's office raise questions of 'serious and pervasive issues,' court filings show.

Updated: October 16, 2020 - 9:04am

The U.S. attorney's office in Manhattan has long been prized as one of the crown jewels of the Justice Department, a place where big Wall Street names are prosecuted and where prosecutors themselves can cement future advancement in politics and law.

The office has given rise to future presidential candidates like Thomas Dewey and Rudy Giuliani, a future FBI Director in James Comey and long-serving crime fighters like Robert Morgenthau and Robert Fiske.

But a string of recent rulings has stripped some of the luster off the U.S. Attorney's Office for the Southern District of New York, as frustrated judges have accused prosecutors and the FBI agents who worked with them of improper leaking, dishonesty, or failure to disclose evidence of innocence to defendants.

One of the more controversial rulings occurred on the watch of Obama-era U.S. Attorney Preet Bharara, whose office misled the court about FBI leaking in an insider stock case, Just the News recently reported.

But the latest — and among the most severe — such rulings came in the last month, when U.S. District Judge Alison Nathan blasted the prosecutor's office for its conduct in an Iran sanctions case that began under Bharara but mostly occurred under the Trump administration's stewardship of the office starting with a 2018 indictment.

The judge spared few words for the misconduct she uncovered in the prosecution of Ali Sadr Hashemi Nejad, accusing the office of "disclosure failures," "misstatements" and "sweeping the Government's repeated failures under the rug."

In then end, Nathan wrote, the problems are a sign of a much more systemically flawed office that likely is failing in other cases as well by exhibiting a win at all cost mentality.

"The manifold problems that have arisen throughout this prosecution — and that may well have gone undetected in countless others — cry out for a coordinated, systemic response from the highest level of leadership within the United States Attorney's Office for the Southern District of New York," Nathan wrote in a 34-page order on Sept. 16. 

Nathan was so offended that she has ordered the Acting United States Attorney to have all the prosecutors and special prosecutors read her opinion and demanded an investigation by the Department of Justice's Office of Professional Responsibility. 

Nejad was accused of violating Iran sanctions by using U.S. banks to send money to his family business and was convicted of five felonies. But his conviction was dismissed by Nathan after the misconduct came to light, and a new trial was ordered.

The judge ruled the U.S. attorney's office overstepped its boundaries by looking at evidence in a related state investigation without getting a warrant. She also found that federal prosecutors violated the Brady rule by not disclosing evidence of innocence to defense attorneys.

The prosecutors also misrepresented facts to the court, attempted to cover up their behavior, and even communicated among themselves about burying evidence, Nathan said. 

"In this case, federal prosecutors have by their own admission repeatedly violated their disclosure obligations, and at best, toed the line with respect to their duty of candor. Over the course of years in this prosecution — before, during, and after trial — the Government has made countless belated disclosures of arguably (and in one instance, admittedly) exculpatory evidence," the judge ruled. 

Nathan noted that the prosecutors provided plausible explanations for some late disclosures, no explanation at all for others, and when she pressed the prosecutors, they "made a misrepresentation to her court."

"This is a serious dereliction," she scolded, adding she fears there are "patterns that may extend beyond" the Nejad prosecution. 

"The serious and pervasive issues related to disclosure failures and misleading statements to the Court by at least one or more of the Government lawyers must be addressed separate and apart from the resolution of this case," she argued. 

After dismissing the indictment, Nathan demanded more evidence from the prosecutors and later learned there were more errors and new evidence of the government's handling of the earlier search warrants implicating violations of the Fourth Amendment, and problematic internal communications between the prosecutors when they realized in the middle of the earlier trial that they had not turned over a document to the defense. 

The court found internal communications among the prosecutors even suggesting "they bury the evidence."

Nathan noted the U.S. Attorney's office failed in leadership, and warned there were "patterns that may extend beyond this case and require systemic solutions."

In July — four months after the trial — prosecutors admitted to Nathan that the Manhattan District Attorney's Office was the first office to request a search warrant for evidence related to state crimes, and federal investigators took advantage of those state search warrants. 

"Federal investigators were mining the state search-warrant returns for federal crimes without authorization of a warrant," she noted, adding that "the FBI was investigating federal crimes rather than the state-law offenses at issue in the warrants, contrary to arguments [the Government] made during the suppression litigation." 

"This conduct was likely unconstitutional because review of search-warrant returns must be done in conformity with the warrants themselves," she added.

As dramatic and damning as Nathan's ruling was last month, the judge has signaled she is not finished and wants to know "who knew what when" while she warned she "retains the authority to sanction the prosecutors in this case." 

"If Government lawyers acted in bad faith by knowingly withholding exculpatory material from the defense or intentionally made a misleading statement to the Court, then some sanctions or referral to the Grievance Committee of the Southern District of New York would be appropriate," she wrote. 

You can read Nathan's ruling here: