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Gavel REUTERS Cohen Magen

Judge calls filing in unsealing of swindler case 'vexatious'

11/13/2012 COMMENTS (0)

By Jessica Dye

NEW YORK, Nov 13 (Reuters) - A federal judge ordered two lawyers on Tuesday to show why they should not be sanctioned for a "vexatious" 742-page court filing containing dozens of documents related to a sealed criminal proceeding.

The order to show cause, which was issued by U.S. District Judge Leo Glasser against attorney Richard Lerner and his lawyer-client Frederick Oberlander, was the latest twist in a legal battle to unseal documents in a 1998 criminal case against convicted swindler Felix Sater.

Sater, a cooperating witness in the 1998 case, which involved a $40 million stock swindle, was supposed to have remained a "John Doe." But Oberlander identified Sater in a civil action brought against Sater in 2010 on behalf of individuals allegedly defrauded by him.

Oberlander in February moved to unseal the docket sheet and underlying documents in the criminal case. Judge Glasser in August unsealed the docket sheet but is reviewing which documents, if any, should be made public.

In the 742-page filing, Oberlander and Lerner said that hundreds of pages of court documents, including a presentence report for another defendant, had identified Sater before Oberlander brought his lawsuit. Oberlander and Lerner attached these documents to the filing.

On Tuesday, Glaser said the filing and attachments were irrelevant to the "discrete pending issue of document sealing" and ordered Oberlander and Lerner to show cause why they shouldn't be sanctioned.

He scheduled a hearing for Nov. 19.

The filing "clearly had nothing to do with what was pending that day in front of Judge Glasser," said Michael Beys, a lawyer for Sater.

Lerner vowed to continue fighting to unseal the documents in Sater's case.

"We've kicked the hornet's nest and the Eastern District obviously doesn't like that," he said. "But we will not back down."

The case is In Re Applications to Unseal 98-cr-1101, U.S. District Court for the Eastern District of New York, No. 12-150.

For Oberlander: Richard Lerner.

For John Doe: Michael Beys, Jason Berland and Nader Mobargha of Beys Stein & Mobargha.

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