6.14 haggerty forfeit

8/9/2019 6.14 Haggerty Forfeit

1/26

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

CYRUS R. VANCE, JR.,DISTRICT ATTORNEY OF NEW YORK

COUNTY,

Plaintiff-Claiming Authority,

-against-JOHN F. HAGGERTY, JR.SPECIAL ELECTION OPERATIONS, LLC,

Criminal Defendants.

AFFIRMATION IN SUPPORTOF A REQUEST FOR PROVISIONAL RELIEFPURSUANT TO CPLR ARTICLE 13A AND FOR ANORDER TO SHOW CAUSE

Index No.

Tara Christie Miner, an attorney admitted to practice before the Courts of this State,

affirms under penalty of perjury that:

1. I am an Assistant District Attorney, of counsel to CYRUS R. VANCE, JR., District

Attorney of the County of New York, the Plaintiff-Claiming Authority ("Plaintiff") in this action.

I make this affirmation in support of Plaintiff's application for (a) an Order to Show Cause and

(b) a Preliminary Injunction and Order of Attachment on Notice and Temporary Restraining

Order pursuant to sections 1312, 1316, 1333 and 1335 of Article 13-A of the Civil Practice Law

and Rules (CPLR), upon property held by JOHN F. HAGGERTY, Jr. and SPECIAL

ELECTION OPERATIONS, LLC (collectively, the Criminal Defendants).

2. Except as otherwise stated below, I make this affirmation upon information and

belief, based upon (a) my review of information contained in Plaintiff's files; (b) my

conversations with Assistant District Attorneys Eric Seidel and Vanessa Richards, who are

1


2/26

assigned to the criminal prosecution of this case; and (c) my review of the affidavit of

Supervising Financial Investigator Matthew Paul of the New York County District Attorneys

Office Rackets Bureau, appended as Exhibit B.

3. With the filing of the Summons and Verified Complaint, appended as Exhibit A,

Plaintiff has commenced a forfeiture action against the above-referenced Criminal Defendants

pursuant to the provisions of Article 13-A of the CPLR. This forfeiture action is based upon

information obtained from an investigation conducted by the New York County District Attorney

(this Office) into the Criminal Defendants illicit activities related to a fraudulent scheme to

obtain funds from New York City Mayor Michael R. Bloomberg (Bloomberg). Specifically, the

Criminal Defendants have been charged by Indictment with Grand Larceny in the First Degree, in

violation of Penal Law Section 155.42, a class B felony, Money Laundering in the Second

Degree, in violation of Penal Law Section 470.15, a class C felony, and Falsifying Business

Records in the First Degree, in violation of Penal Law Section 175.10, a class E felony. The

Indictment is attached as Exhibit C.

4. Plaintiff intends to seek forfeiture from the Criminal Defendants of certain property, to

wit, $1,100,000.00 (One Million One Hundred Thousand Dollars), which constitutes the

proceeds and substituted proceeds and instrumentalities of the felony crimes with which

the Criminal Defendants are charged. Alternatively, Plaintiff seeks a money judgment against

the Criminal Defendants for the value of the aforementioned property in the sum of

$1,100,000.00 (One Million One Hundred Thousand Dollars).

STATEMENT OF FACTS

5. This investigation focuses on, among other things, transactions between (a) Bloomberg,

(b) the Independence Party (the Party), and (c) Special Election Operations, LLC (SEO) and its

2


3/26

proprietor, John Haggerty, Jr. (Haggerty).

SUMMARY OF THE INVESTIGATION

6. During the 2009 election cycle, the Party was the third largest political party

in New York State.

7. SEO is a limited liability company organized in New York State, and

Haggerty is the sole owner.

8. Haggerty was a volunteer for Bloombergs 2009 re-election campaign (the

Campaign). Haggerty was experienced in the workings of elective politics in the State

of New York.

9. During the Campaign, Haggerty devised a scheme to steal Bloombergs

money by making false representations to his agents and others. In essence, Haggertys

plan was to falsely represent the contours and expenses of an Election Day ballot security

operation (the Election Day Operation) that he claimed he would organize, plan, and

run under the auspices of the Party.

10. In or about late October 2009, in furtherance of his plan to steal Bloombergs

money, Haggerty falsely represented in writing to Campaign workers and Bloombergs

agents that he would spend approximately $1,076,750 on the Election Day Operation.

Relying on Haggertys false representations, Bloombergs agents directed that

$1,200,000 of Bloombergs personal funds be wired to the Partys housekeeping bank

account (the Housekeeping Account) to pay for both the claimed costs of the Election

Day Operation and a $100,000 contribution to the Party, which was in addition to the cost

of the Election Day Operation. Before receiving Bloombergs $1,200,000, the

Housekeeping Account contained approximately $7,000.

3


4/26

11. Following the receipt of Bloombergs $1,200,000, the Party eventually wired

$750,000 to SEO.

12. The investigation has revealed that Haggerty provided virtually none of the services

outlined in the Election Day Operation, despite having personally been paid more than $750,000 by

the Party. Haggerty used this money not for ballot security, but to purchase a home in Forest Hills,

New York.

BALLOT SECURITY AND HAGGERTYS SCHEME

13. As detailed in the attached affidavit from the Investigator, in January 2009, Bloomberg

had begun his re-election bid for Mayor of New York City. In contrast to years past when he had

run as a Republican, Bloomberg initially ran as an Independent during this election cycle.

14. The Campaign needed ballot security and poll watching operations for Election Day, as

it had in elections past. These operations aimed to ensure that voters could exercise their right to

vote without interference by making certain that voting booths worked appropriately, opponents did

not campaign within poll sites, and voters were not discouraged from voting in any way.

15. Beginning in the summer of 2009, Bloombergs agents and Campaign staff discussed

ballot security and poll watching with Haggerty, who previously had worked on Bloombergs 2005

campaign.

16. By September 2009, based on representations by Haggerty, Haggerty and Bloombergs

agents and Campaign staff determined that Bloomberg would personally make a contribution to the

Partys Housekeeping Account,1 from which the Party would pay a vendor to execute the Election

Day Operation.

1 According to William McCann, Deputy Enforcement Counsel to the New York State Board of Elections, theHousekeeping Account may be established and used by any of the States major political parties for general supportof its party, including but not limited to get out the vote and ballot security measures taken on behalf of a partysticket.

4


5/26

17. According to a consulting agreement between the Party and SEO, dated October 15,

2009 (the Agreement), SEO was to be that vendor. The Agreement, which is attached as Exhibit

D, states that the Party was to pay SEO an unspecified sum not to exceed $1.1 million to create and

design a pollwatching/ballot security plan (the Plan) for the November 2009 General Election in

New York. SEO had sole discretion control judgment and approval of all aspects of the Plan

and its execution including but not limited to personnel, volunteers, transportation,

communications, catering, lodging, travel, training, printed and written materials, and electronic

databases and materials. The Agreement is signed by Haggerty as Sole Member of SEO.

18. The Agreement is startling in its brevity and lack of detail. Haggerty never provided

the Agreement to Bloombergs agents or Campaign staff. In fact, prior to Election Day,

Haggerty never revealed to Bloombergs agents or Campaign staff the identity of the vendor, let

alone disclosed that the vendor would be Haggerty himself. This behavior is consistent with

other steps that Haggerty took to conceal his association with SEO from the Bloomberg

campaign and the public. For example, SEO L.L.C.s Articles of Organization which were not

filed with the Department of State until almost two months after the Agreement was executed

list an Albany address for its place of business that has no connection to SEO. In truth, SEOs

bank records reveal the companys business address to be Haggertys home at 115 Greenway

North in Forest Hills, New York. These same papers list the organizer of the company as an

attorney, as opposed to Haggerty. Similarly, the New York State Department of State website

provides that SEOs filer is the same attorney and lists no registered agent.

19. In or about October 2009, Haggerty presented Bloombergs agents and Campaign staff

with a document, purporting to outline the Election Day Operation and its total cost figure as

compared to prior years. The document stated that, on Election Day, the citys various poll

5


6/26

locations would be organized into at least 200 routes, each of which would be assigned a mobile

poll watching team. Some members of these mobile poll watching teams would be paid, whereas

others would volunteer. Furthermore, the document suggested that some if not all of these

mobile teams would be provided with cars. Next, the document also stated that an additional 1,355

stationary poll watchers would be assigned to specific poll sites, where they would remain from the

opening to the closing of the poll on Election Day. According to this document, all of these

stationary pollwatchers would be paid.

20. Claiming that the Election Day Operation costs were in line with the 2001 and 2005

budgets for the same initiatives, Haggerty falsely represented to Bloombergs agents and Campaign

staff that approximately $1,100,000.000 (One Million One Hundred Thousand Dollars) would be

spent on the Election Day Operation. He explained in communications to Bloombergs agents and

Campaign staff that the operation would be funded with a Housekeeping contribution that will not

be reported until January 15, 2010, and added that high officers of the Party were aware of the

situation and would be fully cooperative. Haggerty then represented that the Election Day

Operation had already been partially executed and that payments were owed to various entities.

Specifically, he wrote to Bloombergs agents and Campaign staff that the project was started

several weeks ago and many of the contracts were signed then and the invoices are now due so we

need to do this as quickly as possible.

21. Throughout October 2009, Haggerty continued to request that Bloomberg make the

payment to the Party, explicitly stating that money was owed to outside vendors. Indeed, in one

email, he wrote to a Bloomberg agent, Need to get money to IP for ballot security. Im way out

there.

22. On October 30, 2009, Haggerty met with one of Bloombergs agents an individual

6


7/26

who oversaw his personal, political, and philanthropic contributions and another person who

worked for the Campaign. Haggerty presented them with three documents, one of which purported

to be a detailed budget outlining the costs that had been and would be accumulated from

September 14, 2009 through November 6, 2009. The total budget detailed $1,076,750 in

expenditures, of which $310,000 was allocated for payments for a seven person staff, rent for

offices in New York and Albany, various supplies, and an Absentee and Voter Tracking Program.

The remaining $766,750 was allocated for various Election Day expenses: $474,250 to pay $350 to

each of 1,355 stationary pollwatchers; $138,000 for 230 drivers; $12,500 for 25 election day

staffers; $25,000 for 220 rental cars; and another $25,000 for 240 Nextel rentals. The remaining

funds were purportedly budgeted for fuel, catering, hotel rooms, borough headquarters, buses,

training, and phone banks.

23. Based on this series of misrepresentations, Bloomberg and his agents caused Bloomberg

personally to contribute $600,000 to the Partys Housekeeping Account. On November 2, 2009,

Bloomberg made a second personal contribution of $600,000 to the Partys Housekeeping Account.

In total, Bloomberg paid $1,100,000.000 (One Million One Hundred Thousand Dollars) to the

Party, based upon defendant Haggertys misrepresentations. The $100,000.00 (One Hundred

Thousand Dollars) over and above the $1,100,000.00 (One Million One Hundred Thousand

Dollars) constituted a donation to the Party.

24. Notwithstanding Haggertys insistence that the Election Day Operation be funded as

soon as possible because vendors were requesting payment, neither of the two entities that would

make such payments the Party or SEO made any significant expenditures related to the Election

Day Operation at any time, let alone before Election Day.

25. In fact, only the Party made any payments that could have been related to the Election

7


8/26

Day Operation, and they are de minimis in comparison to the amount of money obtained from

Bloomberg by false pretenses:

a. On November 2, 2009, the Party issued a check for $5,856.50 to Multimedia

Communications for Nextel Radio rentals E-Day;

b. On November 3, 2009, the Party issued a check for $3,200.00 to Morris J.

Weinbach for Rent Oct + Nov 2009;

c. On November 9, 2009, the Party wrote checks for $18,480 to New Elegante

Car Service, Inc. (New Elegante) for cars for Election Day 2009 and for $500 to Jose

Viloria an officer of New Elegante for Election Day 2009;

d. On November 15, 2009, the Party issued a check for $3,720 to Paula Bloch

also for Rent for Albany -- JFH.

26. These are the only payments that could conceivably be legitimately attributed to the

Election Day Operation, and yet they totaled no more than approximately $32,000.

27. After Election Day, the remaining disbursements from the Partys Housekeeping

Account connected to this case were made to either Haggerty personally or to SEO. Specifically, on

November 24, 2009 and December 4, 2009, the Party wired $83,000 and $50,000, respectively, to

Haggertys personal account. Further, on December 11, 2009, the Party wired $750,000 to the SEO

account. This wire was sent after receiving a troublingly bare invoice submitted by SEO to the

Party demanding the $750,000 payment detailed above. The invoice, appended as Exhibit E, states

only Consultant Fees for November 2009 Election Poll Watcher Plan - $750,000.00. Please remit

promptly by wire. Thanks.

28. Yet, upon receipt of these payments, neither Haggerty nor SEO spent the money for any

purpose that could even vaguely be attributed to the Election Day Operation. Instead, he simply

8


9/26

pilfered it.

29. Haggertys personal account reflects expenditures for items that one would expect to

find in a personal account, such as payments for cable television, clothing, and food. While he

previously had written checks to both Paula Bloch and Morris Weinbach, he had paid those

individuals for years on an almost consistently monthly basis. The natural inference from these

payments is that Haggerty paid Bloch and Weinbach for his own personal rent.

30. For its part, SEO only made expenditures to cover Haggertys personal expenses. First,

it could not make any expenditure prior to or on Election Day, for any purpose including election

operations, because it did not yet exist. The company was not organized officially until December

3, 2009 and did not have a bank account until December 9, 2009.

31. In fact, the vast majority of the checks and wires from the Haggerty and SEO accounts

in November and December of 2009 are connected to Haggertys purchase of his home in Forest

Hills, New York.

32. In or about December 2009, Haggerty purchased a residential property located at 115

Greenway North in Forest Hills, New York (the Home). Haggerty purchased the Home from the

Estate of his late father, John Haggerty, Sr. (the Estate). Under the terms of his fathers will,

Haggerty and his brother Bart took equal ownership in the Home. The law firm of Gallagher,

Walker, Bianco, & Plastaras LP (Gallagher) represented the Estate in the transaction.

33. On the same days that Haggerty received the $83,000 and $50,000 payments from the

Party, he paid $80,000 to the Estate for a down payment and $50,000 to his brother, Bart.

34. Similarly, the SEO account records showed two wire transfers and only four checks

issued from that account. With respect to the wires, on December 15, 2009, SEO wired $546,545 to

Gallagher and on the next day, December 16, 2009, $52,000 was wired from the SEO account to

9


10/26

Bart Haggerty. With respect to the checks, three of them were issued to Haggerty personally: (a)

two dated December 18 and 23, 2009, both for $5,000 and (b) another check dated January 19, 2010

for $2,500. The fourth and final check drawn from the SEO account was issued to JJC Appraisals

for $425 on December 18, 2009.

35. Based upon the above facts, $1,100,000.00 (One Million One Hundred Thousand

Dollars) constitutes the proceeds and substituted proceeds and instrumentalities of the felony

crimes for which the Criminal Defendants are charged.

HAGGERTYS CONTINUED DECEPTION

36. Haggerty and SEO attempted to hide their crimes and conceal the fact that the funds

contributed by Bloomberg were not and were never intended to be used to execute the Election Day

Operation.

37. On the morning of February 1, 2010, an attorney for the Campaign forwarded several

questions by email from a New York Post reporter to Haggerty about SEO. In that email, Haggerty

was asked if he could identify any of the poll watchers and provide payroll stubs for 2 or 3 of the

poll watchers.

38. In response, Haggerty wrote back that he was sole owner of SEO and that the Party

money was wired to SEO so that checks could be written out of the companys account. He further

wrote that if the total amount used was less than $750,000, the difference would be refunded to the

Party and if more than $750,000, the Party would pay the additional costs. He additionally falsely

represented that there were 300 stationary poll watchers, and offered to provide pay stubs or

paychecks for these poll watchers.

39. Hours after this email transmission, Haggerty faxed to the attorney the following: (a)

three checks, each for $500, written to three individuals written from the SEO bank account, (b) one

10


11/26

Party reimbursement form for food totaling $19.87, and (c) various other receipts totaling less than

$25.00.

40. The investigation, however, has revealed that, contrary to Haggertys representations,

the three checks were never cashed by the individual payees. Indeed, there are no markings or

endorsements on the checks to indicate that they were negotiated in any way. Furthermore, they

had not cleared the SEO account.

41. Additionally, all three payees revealed that, prior to Election Day, they never had any

expectation that they would be paid for their Election Day activities by Haggerty, SEO or any one

else. To this day, they have not been paid. Haggerty never distributed two of the three checks to

the purported payees and requested that the remaining payee return the third check back to

Haggerty.

42. An additionally suspicious fact is that the three checks were removed from the middle of

the SEO check book, leaving numerous blank checks remaining before and after these three. The

implication is that Haggerty, by providing checks with later numbers, wanted his audience to

believe that the previously numbered checks were used to pay for pollwatching expenses.

43. The Grand Jury has indicted Haggerty on three counts of Falsifying Business Records

in the First Degree based on the three bogus checks.

44. On January 26, 2010, after receiving press inquires and questions from the Campaigns

counsel, Haggerty decided to return $135,000 (which were the funds remaining from the earlier

$750,000 payment) to the Party. He did so by wiring the funds from his SEO account to his

personal account, and then back to the Partys Housekeeping account.2

2 The investigation has determined that a portion of the stolen funds was retained by the Independence Party. The

Plaintiff intends to demand the return of those funds from the Party once the Indictment is unsealed, which weanticipate will be on Monday, June 13, 2010. An copy of the letter that Plaintiff intends to send to the Party hasbeen included as Exhibit F. As a matter of discretion only, the Plaintiff has chosen not to seek forfeiture from theIndependence Party at this time, but rather to proceed by demand letter.

11


12/26

45. On February 2, 2010, Haggerty continued his misrepresentations when he emailed the

Campaigns attorney, stating that there is probably 100 to 125K left in the account. A few bills

(stragglers) left to pay and that each poll watcher received $500 for the day some received a

little more. He further listed line items of expenditures including headquarters for the Election Day

operations, staff, cars, travel, computers and training amongst other things. Yet, on February 2,

2010, the SEO account contained only $3,411.43. In addition, no apparent Election Day expenses

have been paid out of this account after the inquiries began.

46. Based upon the above facts $1,100,000.00 (One Million One Hundred Thousand

Dollars) constitutes the proceeds and substituted proceeds and instrumentalities of the felony

crimes for which the Criminal Defendants are charged. Alternatively, Plaintiff seeks a money

judgment against the Criminal Defendants for the value of the aforementioned property in the sum

$1,100,000.00 (One Million One Hundred Thousand Dollars).

PLAINTIFF IS ENTITLED TO THE PROVISIONAL REMEDY SOUGHT

47. Based upon the foregoing, Plaintiff has commenced an action against the Criminal

Defendants pursuant to Article 13-A of the CPLR, which authorizes District Attorneys in New

York to seek, in a civil proceeding, the forfeiture of the proceeds, substituted proceeds, and

the instrumentalities of a defendants crime. See CPLR 1311. (A copy of the Summons and

Verified Complaint that Plaintiff which is also being served on the Criminal Defendants is

annexed hereto as Exhibit A).

48. Although Article 13-A provides that forfeiture cannot occur until after a defendant

has been convicted of the felony that forms the basis for a forfeiture action, the statute expressly

12


13/26

provides that an action may be commenced, and a court may grant a provisional remedy . . .

prior to such conviction having occurred. See CPLR 1311(a).

49. I respectfully request that this Court grant the provisional remedy of a temporary

restraining order pending the determination of Plaintiffs motion for a preliminary injunction and

order of attachment to prevent the Criminal Defendants from defeating Plaintiff's right to forfeiture

by depleting, encumbering, removing, transferring, concealing, dissipating or otherwise disposing

of their assets before the merits of the action can be heard.

50. Under sections 1316, 1333 and 1335 of the CPLR, a court may, without notice to a

defendant, and upon a motion for a preliminary injunction and order of attachment, grant a

temporary restraining order prohibiting a garnishees transfer of its assets. By seeking an order to

show cause and a temporary restraining order instead of proceeding by notice of motion, Plaintiff

avoids alerting the Criminal Defendants to the pendency of this action which may cause them to

immediately begin disposing of their assets to which Plaintiff may be entitled.

51. Pursuant to CPLR 1312(3)(a), this Court may grant an application for the

provisional remedies of a temporary restraining order, preliminary injunction and order of

attachment on notice in a forfeiture action when the following three elements exist:

a. There is a substantial probability that the Claiming Authority will prevailon the issue of forfeiture;

b. Failure to enter the order may result in the property being destroyed,removed from the jurisdiction of the court, or otherwise be unavailable forforfeiture; and

c. The need to preserve the availability of the property through the entry ofthe requested order outweighs the hardship on any party against whom theorder may operate.

13


14/26

52. Moreover, in order to obtain a temporary restraining order under CPLR 1335

pending a hearing on the motion for a preliminary injunction, Plaintiff must demonstrate that

immediate and irreparable harm may result unless such relief is granted.

53. For the reasons set forth below, Plaintiff submits that each of these elements has been

satisfied and that immediate provisional relief is entirsely appropriate.

SUBSTANTIAL PROBABILITY THAT PLAINTIFF WILLPREVAIL ON THE ISSUE OF FORFEITURE

54. There is a substantial probability that Plaintiff will prevail on the issue of forfeiture. In

order to do so, Plaintiff must show that it is substantially likely that the Criminal Defendants will be

convicted of a felony crime, and second, that the property Plaintiff seeks to enjoin the Defendants

from dissipating constitutes, by a preponderance of the evidence, the proceeds, substituted

proceeds, and/or instrumentalities of the felony crime or any common scheme or plan of which

those crimes are a part. See CPLR sections 1311(a) and (3)(a).

(a) L ikelihood Of Felony Conviction

55. Here, in light of the overwhelming evidence against the Criminal Defendants, there is no

reasonable doubt that the Criminal Defendants will not be convicted of a felony. Initially, the

Criminal Defendants have been indicted on Grand Larceny in the First Degree in violation of

Penal Law Section 155.42, a class B felony, Money Laundering in the Second Degree in violation

of Penal Law Section 470.15, a class C felony, and Falsifying Business Records in the First

Degree in violation of Penal Law Section 175.10, a class E felony. See Exhibit C.

56. Upon considering plaintiffs application for provisional relief and as noted in

Morgenthau v. Vinarsky, 21 Misc. 3d 1137A (Sup Ct. N.Y. Co., 2008) it is appropriate for a

court to inter alia give adequate weight to: [an]indictment regular on its face [which] must be

14


15/26

presumed to have been properly returned by the Grand Jury. People v. Smith, 128 N.Y.S.2d 90,

affd 283 AD 775 (1st Dept. 1954). Furthermore, Grand Jury proceedings carry a presumption of

regularity and to overcome that presumption, there must be a showing by the defendant of a

particular need or gross and prejudicial irregularity in the proceedings or some other similarly

compelling reason. People v. Lewis, 98 A.D.2d 853 [3rd Dept. 1983]. Morgenthau v. Khalil,

Index No. 401883/09, Dec. 29, 2009, Justice Martin Shulman, affd , --- N.Y.S.2d ----, 2010 WL

1851628 (1st Dept. May 11, 2010).

57. Moreover, the prosecution will present documentary evidence of the Criminal

Defendants activities in the form of business records and emails that were seized during search

warrants as well as records received as a result of subpoenas including banking records and

records from the Party. These records will clearly demonstrate that the Criminal Defendants

activities were designed to enrich themselves rather than to benefit Bloomberg.

58. In addition, the prosecution will present witnesses, such as Bloomberg agents and

Campaign staff, who will describe their understandings and communications with defendant

Haggerty as well as identify documents provided to them from defendant Haggerty. They will

testify that defendant Haggerty represented approximately $1,100,000 in specific services would

be performed and that they relied on those representations when transferring $1,100,000 to the

Party. The witnesses will further testify that no more than approximately $32,000 of these funds

paid for services connected to Election Day operations.

59. Therefore, there is no question that the Criminal Defendants will be convicted of the

felonies with which they are charged.

(b) The Property Constitutes Proceeds, Substituted Proceeds AndInstrumentalities Of The Defendants Crimes

15


16/26

60. Plaintiff can also establish the second element of the forfeiture cause of actionthat

the property which is the subject of the instant action is the proceeds, the substituted

proceeds and the instrumentalities of the criminal activity to which the Criminal Defendants

have been charged. See CPLR 1311(1)(a).

61. Article 13-A defines proceeds of the crime as any property obtained through the

commission of a felony crime. CPLR 1310(2). Substituted proceeds of the crime are defined

as any property obtained by the sale or exchange of proceeds of a crime, and any gain realized

by such sale or exchange. CPLR 1310(3). Instrumentality of a crime means any property,

other than real property and any buildings, fixtures, appurtenances, and improvements thereon,

whose use contributes directly and materially to the commission of a crime. CPLR section

1310(4).

62. The entire amount of proceeds or substituted proceeds is subject to forfeiture, not merely

the net profits. Cf. Morgenthau v. Clifford, 157 Misc. 2d 331, 342 (Sup. Ct. N.Y. Co. 1992) (loan

given as commercial bribe constituted the amount of proceeds that was forfeitable, and the sale

price of the stock which was acquired with the loan was forfeitable as substituted proceeds; no

reduction allowed for direct costs of sale such as repayment of loan, interest, commissions and

capital gains taxes); District Attorney of Kings County v. Iadorola, 164 Misc. 2d 204, 214 (Sup. Ct.

Kings Co. 1995) (proceeds in an illegal gambling forfeiture case are the total amount wagered).

63. CPLR 1311(8) limits the total recovery against a criminal defendant to the value of

the proceeds, substituted proceeds and instrumentalities of the crime. There is no

requirement that a particular criminal defendant receive the proceeds or benefits of the proceeds.

CPLR 1310; Kuriansky v. Shoe Corp., 133 Misc.2d 489, 497 (Sup. Ct. Westchester County 1986).

16


17/26

64. Moreover, there is no requirement that a particular criminal defendant actually receives

the proceeds or the benefit of those proceeds in order to be held liable. Morgenthau v. Citisource, 68

N.Y.2d 211 (1986); Morgenthau v. Clifford, 157 Misc. 2d 331, 342 (Sup. Ct. N.Y. Co. 1992);

Kuriansky v. Natural Mold Shoe Corp., 133 Misc.2d 489, 497 (Sup. Ct. Westchester Co. 1986)

modified on other grounds, 136 Misc. 684 (Sup. Ct. 1987).

65. Indeed, where the criminal proceeds originates from misdemeanor crimes of unlicensed

check cashing, some charged and some uncharged, but is related to a larger common scheme or plan

in which a felony of falsifying business records relating to the previously committed unlicensed

check cashing, is a part, the total face value of the checks involved is arguably the fruit of the

broader criminal scheme, and therefore may constitute forfeitable proceeds. Morgenthau v. Khalil,

--- N.Y.S.2d ----, 2010 WL 1851628 (1st Dept. May 11, 2010).

66. Nor is a criminal defendants forfeiture liability limited only to the share of proceeds

equivalent to his ownership interest in the criminal enterprise. Rather, he has joint and several

liability. Kuriansky v. Shoe Corp., supra; Morgenthau v. Clifford, 157 Misc.2d 331, 342 (Sup. Ct.

N.Y. Co. 1992). Concerted action liability rests upon the principle that [a]ll those who, in

pursuance of a common plan or design to commit a tortious act, actively take part in it, or further

it by cooperation or request, or who lend aid or encouragement to the wrongdoer, or ratify and

adopt his acts done for their benefit, are equally liable with him. Prosser, Torts [4th ed], 46,

at 292; see also Restatement, Torts 2d, section 876.

67. Finally, the amount of proceeds is not rendered speculative or uncertain merely because

the amount cannot be computed with absolute exactness. Where illicit proceeds are, as the case is

here, obtained, maintained, and transferred covertly, all that is required in determining the amount is

a reasonable basis of computation. See Urban v. Dunn Paper Co., 392 F.Supp. 953, 956 (S.D.N.Y.

17


18/26

1975)(construing Article 62 of the CPLR); Valentine Dolls, Inc. v. McMillan, 25 Misc.2d 551 (Sup.

Ct. Kings Co. 1960). Indeed, opinion evidence as to the amount of proceeds will be competent

when other information is not readily available. Under the factual scenario presented by this case,

all that is required in determining the amount of proceeds is a reasonable basis of computation. See

Urban v. Dunn Paper Co., 392 F. Supp. 953, 956 (S.D.N.Y. 1975) (construing Article 62 of the

CPLR); Valentine Dolls, Inc. v. McMillan, 25 Misc.2d 551, 202 N.Y.S.2d 620, 623 (Sup. Ct. Kings

Co. 1960).

68. Here, the $1,100,000.00 (One Million One Hundred Thousand Dollars) calculation is

entirely reasonable. As explained in the Investigators affidavit, this amount is the total amount of

money given by Bloomberg in reliance on Haggertys misrepresentations. The amount can be

specifically proved through live testimony and banking records.

69. In short, the $1,100,000.00 (One Million One Hundred Thousand Dollars) identified

is an accurately determined amount of the criminal proceeds of the Criminal Defendants unlawful

activities.

A FAILURE TO GRANT PROVISIONAL RELIEF MAY RESULT IN THEDEFENDANTS ASSETS BEING UNAVAILABLE FOR FORFEITURE.

70. 006100000The second element of proof for a provisional remedy requires that Plaintiff

demonstrate a need to preserve forfeitable property for fear that the property may be removed from

the Court's jurisdiction or otherwise rendered unavailable for forfeiture. This element, too, has been

clearly established by Plaintiff's papers.

71. In civil non-forfeiture matters, the CPLR requires the plaintiff to support his application

for provisional relief by showing that the defendant, with intent to defraud his creditor or frustrate

18


19/26

the enforcement of a judgment, has encumbered, secreted or otherwise disposed of his property or

is about to do so. See CPLR 6201(3)(a).

72. The Legislature, however, deliberately chose to lessen the plaintiffs burden on this issue

in Article 13-A civil forfeiture cases. An actual assignment or dissipation of the property is not

necessary. Holtzman v. Samuel, 130 Misc.2d 976, 983 (Sup. Ct. Kings Co. 1985). Indeed, the

courts have explicitly stated that a high degree of proof is not necessary to prove that the failure to

enter the order may result in the property being destroyed, removed or otherwise unavailable for

forfeiture. Kuriansky v. Natural Mold Shoe Corp., 133 Misc.2d 489, 492, 494 (Sup. Ct.

Westchester Co. 1986) (emphasis added). Clearly, the standard for Article 13A actions is markedly

lower than that found in the routine civil case. Under Article 13A, a Plaintiff is required simply to

show that a failure to enter such an ordermay result in the property being destroyed, removed from

the jurisdiction of the court or otherwise unavailable for forfeiture, CPLR 1312(3)(a), not that the

Plaintiffmustshow the defendant has already done so or is about to do so, see CPLR 6201(3)

(emphasis added).

73. Here, the Criminal Defendants behavior and method of operation plainly show that they

will not hesitate to dissipate forfeitable property and conceal their assets in order to frustrate any

judgment favorable to the plaintiff. Haggerty created SEO to hide the fact that he was to be the

recipient of the funds Bloomberg gave to the Party. Haggerty obscured the ownership of SEO

through the use of misleading names and addresses.

74. Haggerty attempted to hide his crime by creating false documents -- such as bogus

checks -- when press inquiries surfaced, as well as making numerous misrepresentations to various

interested parties. In addition, Haggerty has already made the stolen funds more difficult to recover

by converting it into real estate.

19


20/26

75. Based on the foregoing facts, there is a legitimate concern that the Criminal Defendants

would take steps to hide the money they have obtained during their criminal dealings in such a

manner that will preclude the Plaintiff from attaching those assets upon a conviction. Thus,

plaintiffs concern that the Criminal Defendants may dissipate their assets is entirely

reasonable.

THE NEED TO PRESERVE THE PROPERTY OUTWEIGHS THE HARDSHIPON ANY PARTY AGAINST WHOM THE ORDER MAY OPERATE

76. Plaintiffs need to preserve the property for forfeiture also far outweighs the hardship, if

any, placed upon any party against whom the requested order would operate. Here, there simply is

no legally cognizable hardship. First, the Criminal Defendants are not entitled to benefit from the

fruits of their crime. After all, it was the Criminal Defendants blatant disregard of the law,

motivated solely by greed, that illegally enriched them. The provisional remedies requested serve

Article 13-As purpose of taking the profit out of crime by preserving the property to be forfeited.

See Morgenthau v. Citisource, 68 N.Y.2d 211, 218 (1986).

77. Second, by this motion, Plaintiff is seeking merely to restrain the Criminal Defendants

propertynot immediately confiscate it. A defendants property that is in a bank or brokerage

accounts, for instance, remains essentially untouched. Moreover, any claims of hardship based on

the lack of available funds to pay for basic needs such as reasonable living expenses and attorneys

fees is also untenable. Although a defendants assets are frozen, the defendant is generally given

access to these funds for such expenses so long as they comply with the strictures of CPLR

1312(4). In short, the provisional relief Plaintiff seeks is the equivalent of a forced savings plan for

the Criminal Defendants pending the disposition of the criminal case.

20


21/26

78. On the other hand, without a provisional remedy, the Criminal Defendants will be able

to dissipate their assets, and nothing will be left for the salutary governmental uses of forfeited

money set forth in CPLR section 1349. Under the circumstances, any inconvenience to the

Criminal Defendants is clearly outweighed by Plaintiffs interest in preserving the property pending

the disposition of the underlying criminal case.

79. In sum, the Criminal Defendants cannot, in equity and good conscience, carry their

burden of establishing a hardship argument. The balance of hardships, therefore, favors the

preservation of the Criminal Defendants assets for forfeiture. Accordingly, I submit that

immediate relief is warranted pending the hearing of Plaintiffs application for a preliminary

injunction and order of attachment.

STATEMENT PURSUANT TO UNIFORM COURT RULE 202.07(f)

80. Uniform Court Rule 202.07(f) states that Any application for temporary injunctive

relief, including but not limited to a motion for a stay or a temporary restraining order, shall

contain, in addition to the other information required by this section, an affirmation

demonstrating there will be significant prejudice to the party seeking the restraining order by

giving of notice.

81. Since Plaintiff is attempting, in this suit, to recover the proceeds of the Criminal

Defendants unlawful acts, the giving of notice to the Criminal Defendants prior to the restraint

of their assets would enable the Criminal Defendants to hide or secrete those assets. Since the

Criminal Defendants have already engaged in criminal conduct with the sole purpose of

enriching themselves at the expense of Bloomberg, as well as additional conduct designed to

hide the evidence and assets of their crimes, it is highly unlikely that the Criminal Defendants

21


22/26

could be counted upon to safeguard their assets prior to the issuance of a provisional remedy, if

given notice.

82. Moreover, the Criminal Defendants are not currently aware that they are about to be

arrested. Giving the Criminal Defendants notice that injunctive relief is being sought in

connection with a criminal case will alert them to the pending arrests, and will seriously damage

the success of the pending criminal matter, as well as give them an opportunity either to flee

before the temporary restraining order is operative, or to secrete their assets so as not to be found

before these remedies are in place.

83. The refusal to issue a TRO pending a hearing on notice, will all but eviscerate the

asset forfeiture statute and create the likelihood that there will be no assets remaining for the

laudatory purpose of law enforcement. Thus, it is necessary that the temporary restraining order

be obtained without notice to the Criminal Defendants.

SUPPLEMENTAL AFFIRMATIONPURSUANT TO CPLR 3102

84. I make this affirmation in support of my request for pre-action disclosure under

CPLR 3102(c).

85. This affidavit should be filed with and made a part of the District Attorneys request

for an Order of Attachment and Temporary Restraining Order, to which it is attached.

86. The District Attorneys Office has sought, in its request, to compel all parties served

with the Temporary Restraining Order issued in the above captioned case, to reveal and disclose

to the District Attorneys Office, any and all information regarding property belonging to the

Criminal Defendants.

22


23/26

87. The Criminal Defendants, as outlined in the previously submitted affirmation, have

been engaged in the fraudulent theft of funds. In the course of conducting their illegal activities,

they have obtained proceeds in the amount of $1,100,000.00 (One Million One Hundred

Thousand Dollars). The Criminal Defendants have conducted their activities in violation of New

York State Law, specifically having committed the crimes of Money Laundering, Grand Larceny

and Falsification of Business Records which constitute felony crimes.

88. In order to truly effectuate the Courts Temporary Restraining Order, it is imperative

that the District Attorney discover the existence of all property belonging to the Criminal

Defendants so that the party in possession of that property can be served with the Order, thus

preserving the property for the laudatory purpose of taking the profit out of crime under Article

13A.

89. With regard to discovery regarding property by which the person served may be in

possession, it is necessary for the District Attorneys Office to be made aware as to the quantity,

nature and value of the property frozen so as to prevent overreaching by the District Attorneys

Office through unwittingly freezing more of the Criminal Defendants property to which Plaintiff

is entitled.

90. With regard to discovery regarding the Criminal Defendants property of which the

person served is only aware of and not in possession of, that too is necessary. It is our

experience, for example, that many financial institutions sell products belonging to other

companies, in the same fashion as an insurance broker. Thus a bank may sell life insurance

annuities belonging to a life insurance company. Since the bank is not technically in possession

of those products, they are under no obligation and indeed, are unable to, freeze those assets

pursuant to the Temporary Restraining Order they have been served with. Without Court-

23


24/26

Ordered disclosure of those assets, the Criminal Defendants, who are already committed crimes,

may dissipate those assets prior to the District Attorney becoming aware of their existence and

taking the necessary actions to preserve the property.

91. Further, since these particular Criminal Defendants are facile with financial

transactions and have the ability to move money quickly and surreptitiously, it is even more

imperative that discovery be ordered to help prevent the dissipation of assets.

JOINT AND SEVERAL LIABILITY

92. The Criminal Defendants worked in tandem for the illegal purpose of stealing

Bloombergs funds. Indeed, SEO was created by and controlled by Haggerty for the sole

purpose of committing this theft. Thus the Defendants should be jointly and severally liable.

24


25/26

CONCLUSION

93. Based upon the foregoing facts, Plaintiff respectfully urges that under the applicable

standards, its application for a temporary restraining order be granted pending a hearing on

Plaintiffs motion for a preliminary injunction and order of attachment. Plaintiff further requests

that its motion for a preliminary injunction and order of attachment be granted.

94. No previous application has been made to this or any other court for the relief sought

herein. Nor has Plaintiff secured or sought in this action any other provisional remedy against

the Criminal Defendants.

WHEREFORE, I respectfully urge that Plaintiffs application for (a) a temporary

restraining order be granted pending the Courts determination of Plaintiffs motion for a

preliminary injunction and order of attachment; (b) for an order to show cause as to why

Plaintiffs motion for provisional relief should not be granted; and (c) for such other and such

further relief as to this Court may seem just, proper and equitable.

DATED: New York, New York Cyrus R. Vance, Jr.June 14, 2010 District Attorney, New York County

Plaintiff-Claiming Authority

By:____________________________________

Tara Christie MinerAssistant District AttorneyAttorney for Plaintiff-Claiming AuthorityOne Hogan PlaceNew York, New York 10013(212) 335-4114

25


26/26

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

CYRUS R. VANCE, JR.,

DISTRICT ATTORNEY OF NEW YORK COUNTY

Plaintiff-Claiming Authority,

-against-

JOHN HAGGERTY,

SPECIAL ELECTION OPERATIONS,

Criminal-defendants,

AFFIRMATION IN SUPPORT OF PLAINTIFF'S

APPLICATION FOR PROVISIONAL RELIEF (CPLR ARTICLE

13A) AND FOR AN ORDER TO SHOW CAUSE

Index No.

Cyrus R. Vance, Jr.,

District AttorneyNew York County

One Hogan Place

New York, New York 10013

(212) 335-9000

6.14 haggerty forfeit

Documents