Craig Carton is 0-3 in his upcoming criminal trial after a string of legal defeats this month. The losses could make it difficult for Carton’s attorney’s to mount their planned defense as jury selection begins today (Oct. 29) in Carton’s trial on charges that he operated a Ponzi scheme that stole millions from a hedge fund.
Last week the judge overseeing his case said Carton could not introduce a letter he had received from the U.S. Attorney’s office labeling him a victim in the Joe Meli case. Authorities later said they initially identified Carton as one of dozens of victims of Meli’s, who pled guilty to charges of fraud and is serving a six-and-a-half year prison sentence, but now believe Carton was Meli’s co-conspirator.
Carton received the victim letter because of sloppy work by Assistant US Attorney Elisha Kobre, who didn’t remove Carton’s name from a victim’s list just days after indicting him, a move the judge called “a silly, inexcusable and easily avoidable mistake.”
Kobre failed to review the victims’s list before forwarding it to the Victim Impact team, US District Court Judge Colleen McMahon said, and “compounded the error by referring to the entries on the spread sheet as ‘victims’ rather than as ‘potential victims’ in his cover email,” she writes. “But there is not a scintilla of evidence that could lead this court to conclude that AUSA Kobre did anything other than make a regrettable mistake.”
Earlier in the week, the same judge struck down seven subpoenas Carton had attempted to serve on a hedge fund, a law office and BSE Global, which operates the Barclays Center in Brooklyn and Nassau Coliseum on Long Island. Judge McMahon also upheld a number of motions by the government, restricting how Carton could defend himself against charges he operated a Ponzi scheme with convicted fraudster Meli and Michael Wright, who also pled guilty to fraud charges and is expected to testify he helped Carton steal $5 million from Brigade Capital, telling investors the money was supposed to be used to purchase tickets for resale, but was instead diverted to old investors and allegedly used to pay off gambling debts.
The three losses are bad news for Carton who is desperate to show jurors that he operated a legitimate ticket resale business, with an inside track to buy tickets for concerts by Barbra Streisand directly from Barclays Center officials.
Federal prosecutors don’t deny that Carton may have had a deal to buy tickets from BSE Global, but say the claims aren’t relevant to the case, which, they argue are fairly straight-forward, alleging that Carton induced a hedge fund to give him millions and then diverted the money to accounts controlled by Carton, Meli and Wright. In one instance officials with Brigade Capital wired $2 million to Barclays Center, thinking the money would be used to buy tickets. After learning the funds had been wired, authorities say, Carton called a senior executive at the arena and told him the wire had been accidentally sent to the wrong person and convinced the executive to forward the funds onto Carton.
Earlier this month, Judge McMahon rejected an attempt by Carton to subpoena three years of records from the arena, saying the requests “are broad fishing expeditions, not narrowly targeted subpoenas” and noted that “evidence of noncriminal conduct to negate the inference of criminal conduct is generally irrelevant.” McMahon also said she was perplexed why Carton was seeking to subpoena his own communications with staff from Barclays Center, where he did have a working relationship because of his radio hosting responsibilities at WFAN, where he no longer works.
“Carton offers no explanation as to why these communications are ‘not otherwise procurable’ from another source — namely, his own records,” she writes. Later, McMahon admonishes Carton for trying to obtain the personnel file of a BSE Global executive, saying the request “should also be rejected because it is intended to harass a potential Government witness, seeks irrelevant material, and is patently a fishing expedition.”
After the ruling came down, Carton’s attorney filed a motion asking the judge to reconsider the decision, saying his “prior relationship and dealings with Barclays” could “provide the jury with the necessary background and context to explain his conduct.”
Carton claimed he had personal relationships with Barclays Center CEO Brett Yormark and Fred Mangione, who served as chief of staff at BSE before joining the New York Jets last year.
As a result of that relationship, in or around the spring of 2015, before the start of the alleged conspiracy, Mangione and Yormark offered Mr. Carton the opportunity to “buy blocks of tickets at Barclays for resale,” attorney Derrelle M. Janey writes. “At that point, Mr. Carton provided his American Express credit card information to Barclays and, pursuant to his business deal with the company, began to purchase tickets, which he resold on the secondary ticket market.”
It’s important the jury know about this relationship, Janey argues, so they understand Carton’s intent when he took millions from a hedge fund.
“If Mr. Carton is not permitted to discuss the full context of his relationship with Barclays, the jury will be left with an incomplete and misleading impression about his conduct and intent during the relevant time frame,” Janey writes. “This context, Mr. Carton submits, tends to show that he did not intend to deceive Brigade about the arrangement he had in place with Barclays, and that his use of a personal credit card to purchase tickets — or blocks of tickets — under this arrangement was part of a prior acceptable course of dealing.”