Lawyers for radio personality Craig Carton have laid out a possible defense for the WFAN host accused of wire and securities fraud, arguing he was potentially entrapped by a government witness as part of a larger investigation of convicted fraudster Joseph Meli.
On Monday (Oct 15), attorney Derrelle M. Janey with firm Gottlieb & Janey filed a motion (read it here) asking U.S. District Judge Colleen McMahon to force the Department of Justice to disclose whether Aramid Entertainment’s David Molner was a confidential informant for the government in its investigation of Joseph Meli, who pled guilty to one charge of fraud earlier this year and was sentenced to six-and-a-half years in prison. Janey also wants Molner to testify about his work with Meli — the Hollywood film financier, whose brother John is married to Katie Couric, was never criminally charged in the Meli investigation but was named in a lawsuit by a group of investors in New York who accuse Molner of collaborating with Meli to defraud them out of $825,000 to invest in what they thought were tickets for concerts by the Grateful Dead and Adele, but turned out to be part of a Ponzi scheme.
Carton’s attorneys accuse Molner of working closely with Meli to set up eight-figure loan deals with hedge funds and draft up phony ticket-buying agreements. Janey argues that at some point Molner — who was not indicted with Meli, Carton or other co-defendants in the case — likely made a deal with the government to serve as a confidential informant and potentially entrapped Carton in the final days and months before Meli was arrested.
“There is an overwhelming basis to conclude that Mr. Molner is a confidential government informant or cooperating witness because there is no other rational explanation for the fact that Mr. Molner was not charged with any crimes, if the Government believes a conspiracy existed for the conduct described in the Indictment,” Janey writes.
Throughout his 23-page brief, Janey lays out a complex story that puts Molner at the center of the Meli scandal, telling the court “upon review of more than seventy-eight thousand pages of discovery materials produced by the Government from Mr. Molner’s email accounts alone, it is evident that Mr. Molner was intricately intertwined with substantial aspects of Mr. Meli’s ticket resale business, Advance Entertainment.”
Janey argues that it was Molner who recruited potential investors for Meli and drafted fake documents showing agreements to buy tickets that didn’t exist. In one instance, Molner allegedly helped facilitate a $4.6 million loan from hedge fund Brigade Capital, using potentially fake agreements with AEG, New York’s Nassau Coliseum and Barclays Center. According to Janey, it was Molner who “acting at the direction and oversight of Mr. Meli, drafted and provided Mr. Carton with these agreements.”
If Molner was a confidential informant, Janey argues, and was the person that facilitated most of the transactions between Carton and Meli, then there is a case to be made that Molner and the FBI entrapped Carton, Janey says.
“If Mr. Molner was already working as an agent of the Government at the time of Mr. Carton’s recruitment into the Advance Entertainment ticket resale arrangement, there is every reason to believe Mr. Carton was set up by the Government through one of its agents, David Molner,” Janey writes. “Mr. Carton, being led to believe by Mr. Molner that Mr. Meli and his company, Advance Entertainment, to be a lawful and legitimate ticket reselling business would be shown to have lacked the requisite intent to defraud when he solicited the loan from Brigade.”
Carton is preparing his defense against accusations that he allegedly misappropriated $5.6 million from investors, promising to spend their money to buy and re-sell concert tickets, but instead allegedly used the funds to repay gambling debts and past investors.
Carton is also accused of deceiving the Barclays Center into facilitating a fraudulent wire transfer as part of an alleged scheme to steal $2 million. According to an SEC complaint, Carton used his connections at Barclays Center, which had a commercial relationship with his former employer WFAN radio, to trick Brigade Capital into handing over $2 million for the purchase of Barbra Streisand and Metallica tickets. After the transfer was complete, Carton allegedly contacted officials at BSE Global and convinced arena officials the wire transfer was accidentally sent to the wrong account and had them wire the money to a separate ticket brokerage he controlled.
In April, lawyers for Molner told Amplify the allegations against their client are false. Amplify reached out to Molner’s attorneys for comments on the Carton allegations but did not receive a response by press time.