Trump media insider trading: Schwarzman sentencing memorandum | Wilnesh News

The prosecutor is asking New York A federal court judge sentenced two brothers to several years in prison after they admitted to insider trading in securities before a blank-check company announced a planned merger. Trump Media.

Prosecutors want to sentence Michael Shvartsman, a Florida venture capitalist who made more than $18 million from illegal trades, to 46 to 57 months in prison next Thursday, according to a court filing.

They want his brother, Gerald SchwarzmanHe was sentenced to at least two years in prison for the illegal trade, which earned him $4.6 million.

The founder of the Florida furniture company will be sentenced on Wednesday by the same Manhattan federal court judge, Lewis Liman, as is his brother.

Both men pleaded guilty in the case in April.

The brothers could face deportation after serving their prison terms because of their criminal convictions because they are not U.S. citizens.

Michael Shvartsman, 53, was born in Ukraine when it was part of the Soviet Union. In 1974, his family moved to Italy and a year later to Toronto, Canada. Gerald Shvartsman, 47, was born in Canada.

The third defendant, Bruce Garelick, chose to stand trial and was convicted by a jury of insider trading in May.

Garelick will be sentenced on November 7 and faces a recommended sentence of 108 months to 135 months under advisory federal sentencing guidelines.

Gary Leake served as chief strategist at Rocket One Capital, Michael Shvartsman’s Miami-based venture capital firm.

In 2021, the Shvartsman brothers became a director of Digital World Acquisition Corp. after they were invited to invest in DWAC and another so-called special purpose acquisition company.

The brothers received nonpublic information from Garelick about Trump Media, whose primary owner is former President Donald Trump, and became a potential merger target after signing a nondisclosure agreement.

All three bought DWAC securities based on non-public information related to the effort, then sold their shares after news of a planned merger with the Trump Company, which owns the Truth Social app, soared.

Gary Lick made only $49,000 from the illegal trade.

The merger of Trump Media and DWAC has been delayed until March of this year. The combined company trades under the ticker symbol DJT.

U.S. Attorney’s Office, Manhattan, in sentencing memorandum The lawsuit filed late Thursday said Michael Schwarzman’s actions were “blatant, manipulative and motivated by pure greed.”

The office’s sentencing recommendation for him was consistent with the recommendations of the federal sentencing guidelines.

Michael Schwarzman defense lawyerAlan Futerfas and Dennis Vacco urged Judge Liman to sentence him within those guidelines, citing his admission of responsibility for the case.

“Mr. Schwarzman paid a high price for his insider trading,” the lawyers wrote.

“He lost his reputation and suffered personal and professional humiliation. He lost significant business due to the loss of banks, credit cards, customers and suppliers,” the attorneys wrote. “His wife and children suffered and he “

Michael Shvartsman agreed to turn over the Provocateur, a $14.7 million yacht, to the federal government to secure a money judgment without notifying prosecutors, prosecutors revealed in documents Thursday. In the case, a $14.7 million yacht “Provocateur” was chartered in the Mediterranean and has since been moved to the coast of Liguria, Italy, in violation of a court order.

Prosecutors also said Schwartman “failed to provide financial statements to the probation office” ahead of sentencing.

“In summary, Schwarzman exhibited a disturbing pattern of behavior as though he were above the law,” prosecutors wrote.

“Schwarzman’s sentence and supervised release must deter him from committing future crimes.”

Probation office officials recommended that Michael Shvartsman be sentenced to 46 months in prison, apparently because he refused to submit personal financial statements to the office, his defense attorney said.

The attorneys noted in sentencing materials that the $18.2 million judgment he was owed had been “paid in full” as of Monday, so there was no need to waive “Provocateur.”

Defense attorneys said they advised Schwarzman not to invoke his Fifth Amendment right against self-incrimination and to submit financial statements to probation.

The purpose of the personal financial statements is to determine a defendant’s ability to pay fines, these attorneys said.

But “there is no question that Mr. Schwarzman has the ability to pay the fine,” the attorneys wrote, noting that he has already paid the forfeiture ordered in the case.

Prosecutors wanted a minimum sentence of two years for Gerald Shvartsman, below the 37 to 46 months recommended by those guidelines.

The probation office recommended he be sentenced to one year and one day in prison.

“The defendant is a wealthy, successful businessman,” prosecutors wrote of Gerald Schwarzman, a married father of two.

“He earned over $600,000 a year and lived in a 6,000-plus-square-foot oceanfront mansion,” the documents said. “He had no need for the additional profits. He participated in this scheme out of pure greed.”

But, prosecutors wrote in explaining their recommendation against Gerald Schwarzman, “the government agrees that, relative to his co-defendants, defendant is the least culpable of the three defendants to be sentenced by the court.” .

Gerald Shvartsman’s attorney, Roland Riopelle, asked Liman for a sentence of no jail time.

Instead, Riopel asked the judge to sentence him to 18 months of home confinement.

Gerald Shvartsman did not have $4.6 million in liquid assets to surrender, attorneys wrote in the sentencing memorandum, “so the court should simply enter a judgment against him for forfeiture of this amount.”

Riopelle wrote that if Gerald Shvartsman is sentenced to a lengthy prison term, it is “very likely” that his furniture company “will go out of business and the more than 150 employees and independent contractors who work there will lose their jobs.”

The attorney also cited Gerald Schwarzman’s “serious health problems,” which included a “severe back injury,” Crohn’s disease, two surgeries to remove melanoma, and “an acute and severe form of psoriasis.” , requiring medications and special light therapy equipment.

Crohn’s disease requires “close monitoring and regular treatment,” the document said.

Like Michael Schwarzman’s attorney, Riopelle said Gerald’s possible deportation could harm his family.

“Judge Liman is a very serious and thoughtful judge, and we hope that the potential harm to others who were not involved in this crime will convince the judge that the sentence we recommend is a good one.” , “Leo Pell said in an interview.