Confessions of a Wall Street Insider

by Michael Kimelman

  I hung up and continued my slow walk home. After catching several stray bullets in the chest over the last two years, was it possible that I’d actually dodged one?

  The more I thought about it, the more my opinion changed. I almost had to hand it to the FBI. During the hearings, tapes, and various trials I’d attended, they always came off as humorless drones—modestly competent postal workers packing firearms. But holding their post-verdict party right in Zvi’s face, on his hometown turf? It was ballsy. Hell, I might have pulled it myself had I been on the other side.

  My one regret—I realized as my house came into view—was that I hadn’t be there to see Zvi’s reaction. To see how he’d actually handled it. Had he been surprised, or even cowed? Had he stayed defiant and brash? Had he maybe tried to start some shit with the agents after having a few? Anything was possible, I realized.

  Because I was dealing with a straight-up madman.

  CHAPTER EIGHTEEN

  AND JUSTICE FOR ALL

  ______________

  “Courts are the places where the ending is written first and all that precedes is simply vaudeville.”

  —Charles Bukowski

  THE BREAKFAST LINE AT THE SUBSIDIZED Federal Cafe on the eighth floor of 500 Pearl Street is an eclectic mix of defendants, clerks, prosecutors, functionaries, and administrators. It felt exactly how I expected it to feel … not completely real. It felt like a dream. Not actually happening to me, Michael Kimelman.

  The only one with whom I seemed to be able to share this absurdity was Moe. “Feels crazy, doesn’t it?” he remarked at one point.

  Oh yeah. You bet your ass it does.

  Moe understood the surreal horror such grievous stakes could conjure. Your mind doesn’t want to acknowledge that this can really be happening. That your future can really hang in the balance.

  Because of the nature of our case, Zvi, Nu, and I were being tried together—before the same judge and jury. We each had our own legal defense team, and each defense team got its own table in the courtroom. During jury selection, each of the three teams would get a few strikes to exclude jurors. (The prosecution and the judge would be able to exclude jurors too.) When the trial properly began, Zvi, as the head defendant, would go first, and it would round-robin from there. Zvi’s lawyer would make his opening statement. Then Nu’s lawyer. Then mine. It would be the same during any cross-examinations. When the prosecution brought up a witness, Zvi’s lawyers would get to do cross first, then Nu’s, then my guys. At the end of the trial, the government would get to make an initial closing statement, then it would go Zvi, Nu, me—with each of our lawyers giving closing statements—and then the government coming back to do one final rebuttal.

  As we had prepared for the trial to begin in earnest, Lisa had manifested her fear and anxiety in different way—by seeing everyone around her, with the exception of our children, as the enemy. The tension in the house over the last eighteen months was nothing compared to the trial. My parents flew in to stay with us, adding the more pedestrian “in-law tension” to the mix. They wanted to do nothing but help, to be there for us, and yet were only pure kindling, sending the flames of stress higher and higher.

  My dad arrived from LA the night before jury selection. After searching unsuccessfully for me in the courtroom, he returned to the Federal Cafe, where he recognized Zvi. And Zvi recognized him.

  Zvi introduced himself and said: “I’m really sorry for putting Mike through this.”

  My dad told me later that Zvi’s sentiment seemed genuine, but anger still rose furiously inside of me. I could picture the exact face that Zvi made—that Bill Clinton/Bart Simpson hangdog look where you want to believe that he’s truly, truly sorry. Deep down, you know he’s lying, but you believe him anyway because you want to, and because it’s easier than acknowledging the truth and what that cup holds.

  I had to set my dad straight.

  “Dad, here’s the deal. You don’t talk to him, his brother, his lawyers or his family. These people are not our friends. They’re not even on our side. That piece of garbage is the reason I’m here. If he was truly ‘sorry,’ he could have walked into 26 Federal Plaza and told the prosecutors that I was a dupe in his little conspiracy. He didn’t. He lied to me over and over again. He isn’t sorry. He’s just playing a game. There are fourteen people in jail, or waiting to go to jail, solely because of him.”

  “I understand,” my dad said, looking down at his shoes.

  I’d come on too strong, and now I felt like an asshole. One of the three people in the world that would have literally done anything for me, and the first thing I’d done was scold him. I tried to explain myself.

  “Look, Dad, I didn’t mean to come on so strong. You didn’t do anything wrong. You didn’t know any better. Sommer already lectured me about appearances. We don’t know who in the Cafe might be a potential juror, or an FBI agent. If they see Zvi shaking hands and talking with you, they’re going to think we’re one big happy family—and for the next few weeks, perception is reality. I have to make everyone believe that we were business partners only, that he did all of his dirt before we went into business together, and that he lied to me about what he’d done.”

  “I understand,” my father said. “I know you’re just trying to protect us, and you’re under a lot of stress. This is torture for your mom and me, so it’s gotta be murder on you.”

  “That’s still no excuse for snapping at you like that. I’m sorry. You guys are the best, and I love you.”

  We both started tearing up. I didn’t know if it was good or bad to be seen crying with my family, so I excused myself and went to sit with Moe.

  “It’s too bad I’m not a praying man,” I said to Moe. “Now seems like the time to do that.”

  “I’ll get down on my knees with you here if you want to,” he responded, a slight smile on his face.

  “Naw,” I said.

  I thought back to the blessedly brief times my kids—or the kids of people I knew—had been in the hospital. Sylvie had once gotten sick, and was so small and dehydrated that the doctors couldn’t even find a vein to start an IV. Try holding down your screaming child while someone she doesn’t know sticks her over and over with a needle. And then there was Cam’s friend Leo, whom he adored, in a bed at Sloan-Kettering battling for his life against leukemia. Those are things you pray over.

  Just then Sommer arrived. He gave me a small smile but the mood stayed somber.

  “I just want to thank you for having the confidence in me,” he said as he sat beside me. “We’re going to do our best to show the jury and everyone else what we’ve known all along. But here’s the deal. Starting now, we’re always ‘on.’ You don’t talk to your codefendants, you don’t talk to jurors. No smiling or laughing. If something doesn’t go our way, no reaction whatsoever. If you’ve got a poker face, put it on and keep it on.”

  “If I’ve got a poker face? You want to play head to head for the last $150K of your bill?”

  “I believe that’s against the American Bar Association guidelines,” Sommer said. “Regardless, it’s game time. Be aware of everything, but react to nothing … unless I tell you to.”

  “Okay,” I said. “Done.”

  “Before Sullivan calls in the potential jury pool, he’s going to ask if we want to present anything else on the motion we submitted,” Sommer continued, referencing our request to show the jury the non-jail probation offer I’d received from the government. “We think it shows not only a ‘consciousness of innocence’ on your part—because you rejected it—but also the weakness of their case on the insider trading charge. Juries deserve to make their decisions with all the facts at hand. If I was a juror, knowing that the government had offered a defendant probation would probably have an effect on how I viewed the case and the evidence. If it might produce a little more skepticism, we want it in evidence.”

  “What do we do about the coverage this weekend in all the papers showing pictures of us and Raj together?” I
asked. “The headlines called him ‘the greediest man on the face of the earth.’ How is it possible for me to get a fair trial when the jury pool has been digesting that?”

  “I saw those headlines too, and that’s going to be our second motion,” Sommer assured me. “I’m going to ask for a delay of a week to let it pass. There’s a good chance the judge grants that one. But there’s also a chance he doesn’t, so we have to be prepared to continue if he denies.”

  “Why would he possibly deny it? Doesn’t the obvious risk of a biased jury far outweigh a one-week delay?”

  “Yes, but I don’t make the decision. And all judges hate when their schedules get upended. If he feels it’ll cause a domino effect with his other cases, he may try to ram through and keep going.”

  “Great. Expediency over justice. Not quite ‘in veritas’ but I can see its appeal.”

  “Don’t worry,” Moe said, trying to cheer me up, “I’ll wager at least half of the jury pool hasn’t read a newspaper their entire lives.”

  I smiled at him because I knew he wasn’t joking.

  The morning session opened with Sommer arguing why my no-prison probation offer should heard by the jury and why a small delay of a week was the only fair and logical outcome in light of the deluge of negative press regarding Raj’s conviction.

  There was a back and forth in which Sullivan, the judge, appeared to be leaning our way. He seemed annoyed that the government hadn’t put forward a more forceful argument against the admission of the plea offer or delay.

  Then, out of the blue, Sullivan suddenly announced he’d decided against both.

  That was when it finally dawned on me how these things actually worked. The judge was going to do what he wanted, no matter what. When he wanted to rule in favor of the government, he was going to. But he expected the government to give him enough of a show that he might be able to give the appearance of having been swayed by what they’d said. If they gave him very little or nothing, he would still side with them, but he would be annoyed with them.

  During our motion for summary judgment over a year ago, AUSA Reed Brodsky had forcefully stated on the record that “Mr. Kimelman was only being charged with conspiracy, not a substantive crime.” Both Sommer and Judge Sullivan had to embarrassingly remind him that I was indeed being charged with a substantive trade of 3Com as well according to the indictment. Sullivan went the additional step of scolding him and appearing to consider dismissing the charge but relented after sternly admonishing Brodsky.

  Then, during the wiretap admission hearing several months ago, Judge Sullivan heard from Sommer how the FBI and prosecutors had violated nearly every wiretapping rule in the books by failing to minimize sensitive personal conversations that weren’t related to the investigation, and by continuing to tape and listen in on calls that were protected by two of the most serious privileges afforded under the Constitution—those between defense lawyers and their clients (attorney-client privilege) and husbands and wives (marital privilege).

  Sullivan appeared to be furious, delivering a vicious tongue-lashing to AUSAs Brodsky and Fish and to the FBI agents involved in the wiretaps. Calling the government’s actions “disgraceful,” he actually looked for a second like he was going to toss the tapes. He frowned. He shook his head.

  And then he ruled in the government’s favor. Again.

  After the operatic “sound and fury” of the summary judgment motion, the wiretap motion, and now the plea and delay of trial motions, I realized how this game worked. This was purely political theater, dramaturgic farce. Sullivan was never going to actually rule against the government, but he had to make it seem like it was a difficult decision, a “close call” if you will, before handing the government the decision. We were the Washington Generals, and the government was the Harlem Globetrotters. That was how it was going to be.

  Those familiar with the Globetrotters know the Generals are their steadfast opponents, always winning early and looking as if this time they just might pull an upset and beat the legendary crowd favorites, the Globetrotters. But lo and behold, the Globetrotters pull something special out of their bag of tricks and ultimately prevail. Apparently, it was no different in federal court. No matter the argument, no matter the issue, Sullivan had to make it appear as if he just might hand this one to us, before giving the US Globetrotters a narrow victory. At least I knew better now than to get my hopes up at trial when it seemed like the judge was actually leaning toward deciding an issue in our favor.

  But this was not the most terrifying part.

  After Sullivan denied all of our motions, there was a break during which we were allowed to talk to one another. During that break, I overheard multiple members of the jury pool talking. Already, they were scoffing at my lawyer and what he was trying to do. I heard things like “They don’t arrest you for nothing” and “Where there’s smoke, there’s fire.”

  I could hardly believe it.

  Next, after collecting responses to a series of written jury questions, Sullivan proceeded with the oral part of the juror interview process. The responses were likewise horrifying to me.

  How many people here have a negative view of Wall Street? You would’ve thought Sullivan asked how many people were interested in a free iPad. Hands shot up high and fast.

  How many people are familiar with the Raj Rajaratnam Galleon case? Maybe a quarter raised their hands. It was still a giant number considering every paper in the area had blanket coverage and pictures of us with the “greediest man alive.”

  Walking in that morning, I’d thought I had a coin flip shot on the conspiracy charge and a slam dunk on the phantom insider trading 3Com charge. Now I was seriously contemplating faking a heart attack to give me twenty-four hours to reconsider the government’s plea offer.* This wasn’t a slightly hostile “away” crowd, it was Jesse Owens walking into Berlin ’36.

  Dinner that night was quiet. My parents tried to be positive, or at least feign normalcy. I was trying my best to, somehow, remain optimistic, with “level” as a fallback, but deep down I knew I was in trouble. And “I” meant Lisa, and our children too. When the best-case scenario is you’re still bankrupt, and your name comes up at the top of a Google search for insider trading, it’s tough to stay genuinely optimistic.

  As we got ready for bed, I turned on the TV to distract our thoughts and strangle the silence. The tightness in my throat and chest seemed to be blocking my ability to breathe or think.

  “Do you want to talk?” Lisa asked hesitantly.

  “Sure.”

  Did I really?

  “How do you feel it went today?” she asked. Lisa was trying to be understanding, even sweet. She knew my heart felt like bursting from stress, and she probably didn’t feel much different herself.

  “I think … I think we did okay,” I said measuredly. “It wasn’t an ideal jury, but nothing’s ever ideal. I would’ve liked to have had at least one black juror. Maybe it’s a stereotype, but I feel like black people are the most cynical about law enforcement. And there’s also no one like … us, is there? There’s not a single person on that jury that I think has a friend or has ever met someone like me, or that we would ever grab a drink with, or engage in a conversation with unless we were trapped in an elevator together. Nobody who feels like our kind of people. That kind of scares me. Maybe the young girl. I could see her getting drunk at a bar in Hoboken.”

  I had noted a young Snooki type, albeit more attractive and less sloppy, who had made the cut. She was the only one on the jury that any of us were likely to have interacted with in the last five years.* The rest were just … different.

  “You don’t like them? You’re not happy with the choices?”

  I wasn’t. But what could I do about it? Moreover, what should I say? If I told Lisa no, she’d just sink lower, and I knew she was trying to stay upbeat. She needed to maintain. We all did.

  “I think the jurors are basically all right,” I eventually told her. “They’ll either get it or they
won’t. But remember, all we need is one.”

  I looked away and winced, realizing I’d just parroted some of Zvi’s idiocy.

  “At this point, we’ve got to play the hand we’ve been dealt,” I went on. “We’ve been dealt eleven people whom you and I would likely never meet during any sort of social situation.”

  “So they won’t be sympathetic to you?” she asked.

  “We don’t need them to be sympathetic, although it would help. We just need them to listen, to apply the law. The government has to meet the burden of proof, to prove beyond a reasonable doubt that I committed securities fraud and that I was in a conspiracy. They can’t do the first one. It’s impossible. So they have to focus on the conspiracy charge.”

  “I still don’t understand conspiracy.”

  “Neither do I,” I said. “Not fully. But here’s the thing. As long as they look at me as an individual, and not just as Zvi’s partner, I’ll be okay.”

  Lisa seemed sated by this, but I didn’t even know if I believed it myself. I popped an Ambien, finished off my third (large) glass of wine, and climbed under the covers with her to watch reruns of The Sopranos until the pill kicked in and extinguished another day of pain and anxiety.

  The jury walked in silently, several of them making eye contact with me for a split second before averting their eyes. I had a creeping feeling that if Sullivan were to conduct a straw poll right now—guilty or not guilty—before a single word or piece of evidence was submitted, a majority would raise their hand to convict. It was more than a feeling; I knew it.

  “Burden of proof and presumed innocent,” Moe whispered to me, as if he knew what I was thinking. “We got this. Stay confident.”