On Wednesday, federal agents arrested disgraced former Brooklyn State Supreme Court Justice Edward Harold King and Brooklyn businessman Yechiel "Sam" Sprei on criminal wire fraud charges stemming from what the feds describe as "multiple schemes to defraud real estate investors." This is a major development related to alleged multimillion dollar scams that Hell Gate has been following closely and which could ensnare the alleged serial fraudster Sprei, Brooklyn judges, and the local Democratic Party officials who play a hand in appointing them.
Sprei and King were arraigned in federal court on Wednesday afternoon (we were there, and we'll have more on that soon), but on Tuesday, one day before the indictment, Sprei's voice memos were being played in Brooklyn State Supreme Court, introduced as evidence in a civil case brought by an entirely different set of investors from the ones referred to in the federal complaint, but who also claim that Sprei took their money.
The recordings appear to reveal Sprei orchestrating the recusal of multiple Brooklyn judges, boasting of contacts inside the courthouse and inside knowledge of court operations, and directing multiple lawyers—including Brooklyn Democratic Party powerbroker Frank Seddio—to file false documents in what seems an evident effort to disguise the ultimate location of the $2 million that international investors contemplating a partnership with Sprei had placed in an escrow account at Sprei's request.
The audio evidence was introduced in the course of a long-running hearing on whether to issue sanctions against the escrow agent, David Graubard, and one of his lawyers, Israel Goldberg. (A separate sanctions hearing against Seddio is scheduled to begin later this month.) Lawyers for the international investors are seeking the sanctions, alleging Graubard, Goldberg, and Seddio abused the court process with frivolous litigation to obscure the fate of the missing millions.
Taking the stand on Tuesday was Yeshaya Gorkin, who served as Graubard's lawyer in the state litigation for several months last year. But as Gorkin's testimony made clear, while Graubard was his nominal client, he was paid by, and received his legal instructions from, Sprei.
Gorkin testified that he was hired as Graubard's lawyer the night before a hearing in the case, and was immediately informed that he'd be paid by Sprei and that Sprei was empowered to direct his legal representation of Graubard. It was an unusual arrangement, because Gorkin also knew that Sprei was the man behind the plaintiff in the case, the LLC suing Graubard to stop the money from being returned to the investors.
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