US Supreme Court won't review Ponzi scheme case

MINNEAPOLIS (AP) -- The U.S. Supreme Court says it won't take up the case of Minnesota businessman Tom Petters.

In documents made public Tuesday, the nation's highest court denied Petters' request to review his 2009 conviction on charges he orchestrated a $3.65 billion Ponzi scheme.

Petters' attorney Jon Hopeman says he wasn't surprised by the court's decision, which marks the end of the direct appeals process.

Hopeman says Petters is optimistic and doesn't give up easily, and he may pursue other legal remedies.

Petters is serving a 50-year sentence at a federal prison in Leavenworth, Kan. He says he's innocent.

His attorneys had argued that the trial judge barred them from presenting evidence about the criminal past of a key prosecution witness who they say was the scheme's real mastermind.

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US Supreme Court won't review Petters' conviction

MINNEAPOLIS (AP) -- The U.S. Supreme Court says it won't take up the case of Minnesota businessman Tom Petters.

In documents made public Tuesday, the nation's highest court denied Petters' request to review his 2009 conviction on charges he orchestrated a $3.65 billion Ponzi scheme.

This means the lower court decision upholding his conviction will stand.

Petters is currently serving a 50-year sentence at a federal prison in Leavenworth, Kan. He continues to proclaim his innocence.

His attorneys argued on appeal that the trial judge barred them from presenting evidence about the criminal past of key prosecution witness Larry Reynolds, who they say was the real mastermind of the scheme.

They also said Petters' sentence was disproportionate to those of his counterparts.

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No delay in review of $20 million BofA directors' pact

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Judge to review moving hundreds of Madoff cases

By Grant McCool

NEW YORK (Reuters) - In the sprawling litigation to recover money related to Bernard Madoff's fraud, a federal judge said he would decide whether a 2011 U.S. Supreme Court ruling prevents a bankruptcy court from resolving hundreds of lawsuits brought by the Madoff firm's trustee.

Defendants in those cases have sought to transfer their cases to district court from bankruptcy court, citing the U.S. Supreme Court decision involving the estate of former Playboy model Anna Nicole Smith that limited the power of bankruptcy judges to review claims.

In an order published Friday, U.S. District Judge Jed Rakoff said he will review how that decision affects cases brought by the trustee, Irving Picard, against people he believes benefited improperly from Madoff's fraud.

Rakoff consolidated 341 cases in his order and gave the defendants until June 11 to appoint lead counsel to argue on their behalf. He scheduled oral argument for June 18.

Smith, who died of a drug overdose in 2007, had waged a long legal battle to get part of the fortune left by her late Texas oil baron husband, J. Howard Marshall, whom she had married in 1994 when she was 26 and he was 89.

Picard was appointed in December 2008 to recover money for victims of Madoff, a financier who ran a multibillion-dollar investment fraud over several decades, swindling investors large and small across the globe.

Madoff pleaded guilty in March 2009 to what prosecutors and the trustee have described as the biggest investment fraud in history. Madoff, 73, is serving a 150-year prison sentence.

Picard, who filed his cases in bankruptcy court, says he has recoveries and settlement agreements totaling $9.068 billion, but $6.4 billion of that is unavailable due to appeals and reserves. Picard says Madoff defrauded customers of about $20 billion.

In the latest settlement last month, Rakoff oversaw a deal between Picard and the principal owners of the New York Mets Major League Baseball team, Fred Wilpon and Saul Katz, who were longtime friends with Madoff as well as investors.

The case is Securities Investor Protection Corporation v Bernard L. Madoff Investment Securities LLC, U.S. District Court for the Southern District of New York, No. 12-mc-0115.

(Reporting By Grant McCool; Editing by Dan Grebler)

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Judge orders NYC to release review of 911 system

NEW YORK (AP) -- New York City must release a consultant's review of the city's 911 system and emergency response times that Mayor Michael Bloomberg's administration has been fighting to keep private, a civil court judge decided Monday.

Saying his decision stemmed from a belief in open government and transparency, Supreme Court Justice Arthur F. Engoron said that the taxpayer-funded consultant's report and all its drafts belong to the people of New York City.

"The city's not the only interest group here. And the city's not infallible," Engoron said after comparing the city's claim that the report should be private to President Richard Nixon's claims of executive privilege during the Watergate scandal.

Lawyers for the city had argued that the review, commissioned after a massive blizzard in December 2010 that stranded ambulances and backed up the emergency call system, is still in draft form. They claimed that an order to release the documents could have a chilling effect on city employees, who might become reluctant to freely express their opinions.

"If policymakers felt they could not give or receive blunt or candid feedback without it being publicized, the entire public would be at a detriment," said city lawyer Gail Mulligan.

But the judge sided with lawyers for unions representing city firefighters, who argued that it was in the interest of their clients — and of the public — to learn about any problems with the 911 system that could be delaying response times and putting lives at risk.

"They could label this a draft in perpetuity," said Joshua Zuckerberg, a lawyer for the Uniformed Fire Officers Association. "It's a cover up ... plain and simple."

Kate O'Brien Ahlers, a spokeswoman for the city's Law Department, said the city was very disappointed with the ruling and would consider appealing. Last week, Bloomberg questioned whether the current version of the report was accurate. City officials had said they planned to make the final version of the report public soon.

The mayor argued Monday that the ruling set a dangerous precedent.

"I don't know how any government would be able to function if you had to put out every single paper, even at the beginning of a study and all through the study," he said. "If the courts say you have to publish this, you have to publish everything."

Under the judge's decision, the documents must be released within seven days to the unions, which may then decide whether to submit them into evidence during a public arbitration hearing scheduled for April 20. There is no mandate forcing the Uniformed Fire Officers Association and the Uniformed Firefighters Association to make the documents publicly available, and the unions' lawyers on Monday stopped short of promising to do so.

The unions contend that the city's recent overhaul of the 911 system has led to delays that have been concealed by a change in how the city calculates its fire response times. Administration officials say the overhaul has modernized an out-of-date system and eliminated inefficiencies, improving response times.

At the center of the dispute is the fire department's average response time to structural fires, which dropped 6 seconds in fiscal year 2010, shortly after the city changed its emergency dispatch procedures. Under the new system, 911 operators collect more information before starting the response-time clock. City officials testified they had never tracked how long callers are on the line before the clock begins, leading critics to question the validity of the city's numbers.

Bloomberg announced plans to overhaul the city's decades-old 911 system following a blackout in 2003 that largely immobilized the city.

Last month, the city's comptroller issued an audit criticizing the city for its handling of the project, saying it was $1 billion over-budget and seven years behind schedule. Deputy Mayor for Operations Cas Holloway attacked the report as misleading, disputing the figures and arguing that most of the cost increase was due to a strategic decision to build a backup call center from the ground up.

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Follow Samantha Gross at www.twitter.com/samanthagross

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