The Line To Lansky: Steinger Linked To Richard Ben-Veniste, Jewish Mafia - 9/11 Comissioner

[CrackSmokeRepublican]

The Line To Lansky: Steinger Linked To Ben-Veniste, Jewish Mafia

February 21, 2009 by The Boss

We know that Joel Steinger, the mastermind of the billion-dollar Mutual Benefits Ponzi scheme with ties to several Broward politicians (Steve Geller, Stacy Ritter, Ellyn Bogdanoff, and others), had connections to Colombian drug cartels.

Now we have evidence of another intriguing connection, this one to the so-called Jewish Mafia in Miami, including business mogul and The Forge owner Alvin Malnik and infamous gangster Meyer Lansky. Another old Steinger chum: Whitewater attorney and 911 Commission member Richard Ben-Veniste, who defended Steinger in his 1981 felony case and remained close friends with him. Two sources with close ties to Steinger say that Ben-Veniste always hangs with Steinger when he's in town from Washington and that Steinger facilitates good times for the nationally known attorney.

Ben-Veniste is now a partner with the high-powered international law firm Mayer Brown in D.C. Despite his impressive-seeming resume (he also played a significant role in Watergate), Ben-Veniste has always been rumored to have friends (and former law clients) in low places. Not sure if any go lower than Steinger, though.

Steinger, according to multiple sources, also knew Meyer Lansky and even received a puppy from a litter related to the mobster's prized shih tzu "Bruiser." Steinger, a long-time fraud artist and boiler room operator, is also close friends with Alvin Malnik, another reputed mob figure with big-time legitimate businesses, including major real estate holdings throughout South Florida. Reader's Digest rather famously dubbed Malnik as Lansky's "heir apparent" when the mobster died in 1983. Malnik, who lives in a multmillion dollar mansion in Ocean Ridge in Palm Beach County, has ties to unions, commercial property, Michael Jackson, Las Vegas, Hollywood — and just about anything else you want to name.

Malnik used to live at the Cricket Club in Miami. It was in the parking garage there that Malnik's brand new Rolls Royce was blown up in 1982. Malnik's ties to organized crime run deep and long, beginning with Lansky. In 1980, the New Jersey Casino Control Commission denied him a gambling license because they found he was a "person of unsuitable character and unsuitable reputation." While he still has vast business interests (including a rather remarkable kinship with the Saudi royal family) he's perhaps best known for his philanthropic role with the Make-A-Wish Foundation.

The link between Malnik and Steinger comes not only from those who know Steinger, but also from official Broward County records. As I reported this week in a piece on Steinger's bitter divorce, the Mutual Benefits mastermind recently received a $602,000 loan from Miami attorney David M. Goldstein. Goldstein has also represented several of Steinger's business interests. Goldstein is a right-hand man for Alvin Malnik, whom he's been working for for many years, along with Malnik's son, Shareef. Goldstein also represents Hollywood film producer Brett Rattner (Rush Hour, X-Men:The Last Stand), who is so close to Malnik that he calls Rattner his "11th son." Goldstein didn't return a phone call, so the reason for his giant loan to Broward's version of Bernie Madoff isn't known.

It should be noted that there is no evidence that Malnik, Goldstein, or Ben-Veniste were involved in Mutual Benefits itself. It's just interesting to know who one of the great rip-off artists in Florida history called his friends.

blogs.browardpalmbeach.com/pulp/2009/02/meyer_lansky_mutual_benefits_joel_steinger_richard_ben-veniste_alvin_malnik_jewish_mafia.php

[CrackSmokeRepublican]

Great coverage of this Corrupting, J-Tribe Scammer--CSR:

RICHARD BEN-VENISTE
 
Richard Ben-Veniste is linked in one way or another to almost every major conspiracy in the United States in the past four decades.
 
James Thompson and Richard Ben-Veniste
 
Richard Ben-Veniste and James Thompson have in common questionable dealings regarding investigations into the assassination of Martin Luther King, the Watergate scandal, the Tylenol murders, and the 9/11 terrorist attacks.
 
 
Richard Ben-Veniste and James Thompson were members of the 9/11 commission.
 
Richard Ben-Veniste received an LL.M. from Northwestern University School of Law in 1968. James Thompson received his J.D. from Northwestern University in 1959.
 
 
Ben-Veniste is a partner in the Chicago-based international law firm Mayer Brown.

    Tyrone Fahner, Illinois Attorney General and head of the Tylenol task-force that investigated the 1982 Tylenol murders, served on the Management Committee of Mayer Brown from 1985 to 2007. He was co-Chairman from 1998 to 2001, and Chairman of Mayer Brown (2001-2007).

 
What was Ben-Veniste up to between 1982 and 1990?

Richard Ben-Veniste
Partner at Mayer, Brown
 

Experience: Civil litigation • white collar criminal litigation • congressional investigations.  Achieved national prominence as one of the principal prosecutors of the Watergate Special Prosecution Force.

Employment: Mayer, Brown, Rowe & Maw LLP, Washington, D.C., 2002 to date  •  Weil, Gotshal and Manges, 1990-2002  •  Chief Counsel, (Minority) Senate Whitewater Committee, May, 1995-June, 1996  •  Ben-Veniste was a partner of the Washington, DC, law firm of Melrod, Redman & Gartlan (1975–1982)   •   In 1981 he opened an individual practice.

Ben-Veniste was Special Outside Counsel, Senate Subcommittee on Governmental Operations, 1976-1977  •  Chief, Watergate Task Force, Watergate Special Prosecution Force, U.S. Department of Justice, 1973-1975  •  Assistant U.S. Attorney, Southern District, New York, 1968-l973 and Chief, Special Prosecution Section, 1971-1973

Education: Columbia Law School, J.D., 1967; Harlan Fiske Stone Scholar • Northwestern University, LL.M., 1968 • Muhlenberg College, A.B. magna cum laude, 1964; Awarded honorary LL.D. by Muhlenberg College, 1975

Additional Information: Ben-Veniste is a presidential appointee to the , a group mandated to review and declassify documents relating to war crimes in the World War II era.Nazi War Crimes and Japanese Imperial Government Records Interagency Working Group

Ben-Venist is married to Donna Grell Ben-Veniste. His previous marriage was to Shelby Fischer. He has two daughters: Danielle and Olivia Ben-Veniste.

The biography of Richard Ben-Veniste from the official 911 Commission website leaves an even bigger gap (1977 to 1995) in Ben-Veniste's resume.

Richard Ben-Veniste

Commissioner

Richard Ben-Veniste is a partner in the Washington law firm of Mayer, Brown, Rowe & Maw. He served as assistant U.S. attorney, Southern District New York, from 1968 to 1973, which included service as chief of the Special Prosecution Section from 1971 to 1973. Mr. Ben-Veniste was chief of the Watergate Task Force of the Watergate Special Prosecutor's Office from 1973 to 1975 and Special Outside Counsel Senate Committee on Government Operations from 1976 to 1977.

From May 1995 to June 1996, Mr. Ben-Veniste was chief counsel (minority) of the Senate Whitewater Committee. Mr. Ben-Veniste received an A.B. from Muhlenberg College in 1964, an LL.B. from Columbia University Law School in 1967, where he was a Harlan Fiske Stone Scholar, and an LL.M. from Northwestern University School of Law in 1968 under a Ford Foundation fellowship grant. He is a member of the bars of New York and the District of Columbia.


FILLING THE GAP IN RICHARD BEN-VENISTE'S RESUME

The Line To Lansky: Steinger Linked To Ben-Veniste, Jewish Mafia

We know that Joel Steinger, the mastermind of the billion-dollar Mutual Benefits Ponzi scheme with ties to several Broward politicians (Steve Geller, Stacy Ritter, Ellyn Bogdanoff, and others), had connections to Colombian drug cartels. - complaint

Now we have evidence of another intriguing connection, this one to the so-called Jewish Mafia in Miami, including business mogul and The Forge owner Alvin Malnik and infamous gangster Meyer Lansky.

Another old Steinger chum: Whitewater attorney and 911 Commission member Richard Ben-Veniste, who defended Steinger in his 1981 felony case and remained close friends with him. Two sources with close ties to Steinger say that Ben-Veniste always hangs with Steinger when he's in town from Washington and that Steinger facilitates good times for the nationally known attorney.

Ben-Veniste is now a partner with the high-powered international law firm Mayer Brown in D.C. Despite his impressive-seeming resume (he also played a significant role in Watergate), Ben-Veniste has always been rumored to have friends (and former law clients) in low places. Not sure if any go lower than Steinger, though.

Steinger, according to multiple sources, also knew Meyer Lansky and even received a puppy from a litter related to the mobster's prized shih tzu "Bruiser." Steinger, a long-time fraud artist and boiler room operator, is also close friends with Alvin Malnik, another reputed mob figure with big-time legitimate businesses, including major real estate holdings throughout South Florida. Reader's Digest rather famously dubbed Malnik as Lansky's "heir apparent" when the mobster died in 1983. Malnik, who lives in a multmillion dollar mansion in Ocean Ridge in Palm Beach County, has ties to unions, commercial property, Michael Jackson, Las Vegas, Hollywood — and just about anything else you want to name.

Malnik used to live at the Cricket Club in Miami. It was in the parking garage there that Malnik's brand new Rolls Royce was blown up in 1982. Malnik's ties to organized crime run deep and long, beginning with Lansky. In 1980, the New Jersey Casino Control Commission denied him a gambling license because they found he was a "person of unsuitable character and unsuitable reputation." While he still has vast business interests (including a rather remarkable kinship with the Saudi royal family) he's perhaps best known for his philanthropic role with the Make-A-Wish Foundation.

The link between Malnik and Steinger comes not only from those who know Steinger, but also from official Broward County records. As I reported this week in a piece on Steinger's bitter divorce, the Mutual Benefits mastermind recently received a $602,000 loan from Miami attorney David M. Goldstein. Goldstein has also represented several of Steinger's business interests. Goldstein is a right-hand man for Alvin Malnik, whom he's been working for for many years, along with Malnik's son, Shareef. Goldstein also represents Hollywood film producer Brett Rattner (Rush Hour, X-Men:The Last Stand), who is so close to Malnik that he calls Rattner his "11th son." Goldstein didn't return a phone call, so the reason for his giant loan to Broward's version of Bernie Madoff isn't known.

It should be noted that there is no evidence that Malnik, Goldstein, or Ben-Veniste were involved in Mutual Benefits itself. It's just interesting to know who one of the great rip-off artists in Florida history called his friends.


Ben-Veniste and Barry Seal

Richard Ben-veniste was attorney for both Barry Seals and Bill Clinton in the early 1980s.

<snip>

Seal agreed to organize a sting operation where he managed to get a photograph of Pablo Escobar helping Nicaraguan soldiers to load 1,200 kilos of cocaine on a C-123 military cargo plane. Soon afterwards Reagan went on television with the photograph to denounce the "Sandinistas as drug smugglers corrupting American youth".

As a result of Seal's cooperation in setting up this sting, the judge in Florida reduced his sentence from ten years to six months probation. The judge praised Seal for his work against the Sandinistas and pointing out that "when an informant puts his life on the line to help the forces of law and order, they deserve just compensation".

Seal also offered to provide information to the DEA implicating federal officials in the Iran-Contra scandal.

This included Richard Ben-Veniste, a Watergate prosecutor who played a crucial role in the successful fight to secure the secret Richard Nixon White House tapes. Ben-Veniste represented both Barry Seal and Bill Clinton in the early 1980s. Ben-Veniste served as chief counsel to the Senate Whitewater Committee. However, the authorities were not interested in this information.

Ten days before Seal was murdered, he had threatened to expose the gun-running and drug smuggling that was flourishing in Meena, Arkansas. The man he threatened? ...Then vice-president George H.W. Bush.

 

Barry Seal, the CIA, and the Mob

 

 

The massive black-hole of information related to a figure as notorious as Richard Ben-veniste speaks volumes about the power of his allies within the "secret government."

 

 

 

Late Fall, 1976: Frost Researchers Find Damning Transcripts of Nixon-Colson Conversations

The research staff for British interviewer David Frost, preparing for his upcoming interviews with former President Richard Nixon (see Early 1976), finds transcripts of two conversations between Nixon and his then-aide Charles Colson from February 1973 (see February 13, 1973 and February 14, 1973) in a batch of documents surrounding the prosecution of the Watergate burglars (see January 1, 1975).

Former Watergate prosecutors Richard Ben-Veniste and George Frampton, informally advising the Frost research team, are both keenly interested in the transcripts. "You've got something no one else has," Frampton says. "These transcripts must have been placed in the official exhibit by a clerical error."

The two explain the significance of the conversations between Nixon and Colson: they place Nixon directly in the plot to cover up the Watergate conspiracy six weeks before Nixon says he first learned of it. Frampton shows researcher James Reston Jr. just how he would have used the conversations against Nixon in court, while Ben-Veniste instructs Reston on how Frost should interrogate Nixon as a hostile witness.

Frost should ask something like, "Is it still your position, Mr. Nixon, that between 21 March and 30 April, 1973, you acted to stop the cover-up and prosecute the guilty?" When Nixon answers yes, Frost should follow, "But in fact, as late as 16 April, 1973, you were working out 'scenarios' with Ehrlichman and Haldeman to make John Dean the Watergate scapegoat, weren't you?" Other questions to ask include, "By what right were you offering campaign money for the defense of your associates who were charged in a criminal conspiracy?" and "Isn't it really true that you never made any effort before 21 March to learn the details of a criminal activity that you knew was going on all around you?" [RESTON, 2007, PP. 50-51]


Let's Meet the 9/11 Commission Members

Richard Ben-Veniste came to prominence in Washington as chief of the Watergate Task Force, and was later President Clinton's Senate-appointed lawyer in the Whitewater investigation. But Ben-Veniste also defended murky underworld figures with Clinton ties: Barry Seal and Truman Arnold. The later is especially significant, it links Ben-Veniste to Wally Hilliard, the owner of Venice Florida's Huffmann Aviation school were three of four 9/11 pilots trained.

Truman Arnold was the major Clinton fundraiser busted for renting out the Lincoln bedroom in 1995. According to FAA records, Arnold sold a $2 million airplane to Venice's Wally Hilliard for just one dollar, in 2002, shortly after the heat was on Hilliard because 45 pounds of heroin had turned up in one of his own planes.
 

Members of 9/11 Commission Have Potential Conflicts fo Interest

Richard Ben-Veniste represents Boeing and United Airlines. [CBS NEWS, 3/5/2003] Ben-Veniste also has other curious connections, according to a 2001 book on CIA ties to drug running written by Daniel Hopsicker, which has an entire chapter called "Who is Richard Ben-Veniste?"

Lawyer Ben-Veniste, Hopsicker says, "has made a career of defending political crooks, specializing in cases that involve drugs and politics." Ben-Veniste has been referred to in print as a "Mob lawyer," and was a long-time lawyer for Barry Seal, one of the most famous drug dealers in US history who also is alleged to have had CIA connections. [HOPSICKER, 2001, PP. 325-30]
 
 
 
 
MAYER BROWN
 
Richard Ben-Veniste
Partner

Experience

Richard Ben-Veniste is a highly respected litigator who focuses on civil matters and white collar criminal cases. He also advises organizations and individuals involved in congressional investigations across a broad range of complex and sensitive areas.

Richard first achieved national prominence during the mid-1970s, when he served as one of the lead prosecutors on the Watergate Special Prosecution Force. Recognized as both a knowledgeable and experienced counselor and as a skilled and accomplished trial lawyer, he has been a key figure in some of the nation's most significant governmental activities at the intersection of law and politics. From 1995 to 1996, for example, he acted as Chief Counsel (Minority) of the Senate Whitewater Committee; from 1976 to 1977, he was Special Outside Counsel for the Senate Subcommittee on Governmental Operations; and from 1973 to 1975, he held the position of Chief of the Watergate Special Prosecutor's  Watergate Task Force.  Most recently, Richard served as one of ten commissioners on the bipartisan 9-11 Commission.  

Prior to joining Mayer Brown in 2002, Richard was a partner at Weil Gotshal & Manges LLP and Ben-Veniste and Shernoff.  

From 1968 to 1973 he served as Assistant US Attorney for the Southern District of New York where he was Chief of the Special Prosecutions Section.

Mr. Ben-Veniste has been listed in Who's Who in America since 1975, The Best Lawyers in America since 1983, and Washingtonian Magazine's Top Lawyers in Washington, DC since 1992, when the list first appeared.

Education
Columbia University Law School, JD, 1967; Harlan Fiske Stone Scholar • Northwestern University, LLM, 1968 • Muhlenberg College, AB, magna cum laude, 1964; Awarded honorary LLD by Muhlenberg College, 1975

Admitted

    * District of Columbia, 1975
    * New York, 1968

 
 
 
 
 

"Six Degrees of Richard Ben-Veniste"  

December 20—world exclusive
by Daniel Hopsicker
copyright MadCowMorningNews
may not be reprinted without permission

At the same time Wally Hilliard's Venice flight school was training dozens of terrorists to fly—including both pilots crashing into the World Trade Center—the owner of Huffman Aviation in Venice Florida was also involved in a murky aviation transaction with a multi-millionaire Texas oil-man who played a prominent role in the Whitewater Scandal.

Truman Arnold, chief fund-raiser for the Democratic Party in 1995 when the scandal broke, was investigated for a variety of  dubious money-raising schemes ranging from renting out the White House's Lincoln Bedroom to selling tickets on Air Force One. He was also fingered for procuring cash (read hush money) for convicted Clinton friend Web Hubbell.

Arnold, who played golf with Clinton regularly, coordinated payments to Webster Hubbell from businesses controlled by old friends of President Clinton and campaign donors that included the Lippo Group, organizers of a multibillion-dollar development in China that received the endorsement of the Clinton administration.

Now Truman Arnold's name has surfaced in connection with the investigation into the Venice FL flight schools made infamous by the September 11 terrorist attack.

In a curious aircraft transaction discovered while probing the tangled business affairs of Wallace J. Hilliard, 70, of Naples, FL, Truman Arnold appears to have 'loaned' Hilliard—for only a dollar—a Beechcraft King  Air 200 worth over $2 million.

Moreover, it wasn't until almost a year later that Hilliard finally got around to arranging financing to pay for the plane, according to documents obtained from the FAA by the MadCowMorningNews.
 

"Being connected means never having to say you're sorry."

On December 10, 2000, Truman Arnold engaged in his act of munificence with Wally Hilliard, owner of two flight schools which beginning in 1999 induced hundreds of Arab men to leave their desert kingdoms and come to American shores to learn to fly...

Wally Hilliard's newly-discovered association with a benefactor at the heart of the American political process raises anew questions about whether the appearance of Mohamed Atta and his terrorist buddies in Venice, FL. was—as the official story has it—just a matter of mere happenstance.

Wallace Hilliard, it is clear, has ties extending well into the upper reaches of American political circles, ties which may hold the answers to questions about how sophisticated operators like Hilliard and Dekkers were taken in by foreign student pilots demonstrating none of 'the right stuff.'

In another bizarre twist, Truman Arnold's lawyer during the Whitewater Investigation turns out to have been Democratic power-broker Richard Ben-Veniste, just nominated to serve on the 9/11 probe.

If Ben-Veniste client Truman Arnold's business dealings with terror flight school owner Wally Hilliard come under scrutiny in the 9/11 probe, the slick Washington lawyer may find himself involved in a major national scandal from two different sides.

If he does, for Ben-Veniste, it won't even be for the first time. He served as Majority Counsel to the Congressional Whitewater probe investigating the actions of Truman Arnold, and then went on to defend Arnold before Ken Starr's Whitewater grand jury, an action for which he was roundly criticized.
 

"Six Degrees of Richard Ben-Veniste"

Published reports at the time tarred the Democratic superlawyer for alleged misbehavior during the Whitewater investigation, claiming Ben-Veniste, while he was the Democratic counsel to the Whitewater Committee, had blocked inquiries about Webster Hubbell's hiring by the Lippo Group, and then turned around and defended a man he had just been (supposedly) investigating.

Addressing his critics Ben-Veniste wrote, "Truman Arnold's name never came up during the Whitewater investigation... because of the entirely collateral nature of the inquiry about Hubbell and Lippo... and given Arnold's total lack of involvement in any aspect of the matters before the Whitewater Committee, no honest argument can be made that my representation of Arnold transgresses professional guidelines."

Richard Ben-Veniste has been a 'utility player' in major American scandals in roles that are often not clearly-defined. Now Ben-Veniste, about to serve on his third major national investigative panel (Watergate, Whitewater, and 9/11), may be about to face the same criticism all over again.

But Ben-Veniste once again turning up at the 'scene of the crime,' is by no means the oddest thing about Truman Arnold and Wallace Hilliard's aviation transaction...

That distinction would have to go to the aircraft bill of sale which conveyed the plane from Arnold to Hilliard.

Although it is dated December 10,2000, the MadCowMorningNews has learned exclusively that it was not submitted to the FAA until almost a year later, on January 31,2002.
 

Bread crumbs along the paper trail

While the purpose of this arrangement is unclear, one possible reason, aviation sources indicate, is that had the plane come under law enforcement scrutiny during this time, the person coming under suspicion would have been—not Wally Hilliard, the man using the plane—but Truman Arnold, who was still the owner of record.

This is no small benefit, considering that the December 10, 2000 transfer date for the twin-engine King Air came right after Hilliard had lost his bid to retain possession of a Lear jet he owned which the DEA confiscated on the runway at Orlando Executive Airport in July of 2000 with 45 pounds of Columbian heroin aboard.

When that happened, Mr. Hilliard's name was 'mud,' at least with certain federal authorities.

Nonetheless, Hilliard continued putting together a company, Florida Air Holdings, which planned to offer commuter air service, after briefly flying in the Spring of 2000, when it was touted by Florida political luminary Katherine Harris.

When it offered commuter service again, under the name Discover Air, it went out of business again after not one ticket was sold on its inaugural route. Notwithstanding this dismal record, another Florida political luminary, Gov. Jeb Bush, stepped forward to tour its facilities and praise its seemingly un-praiseworthy management.

Against this backdrop of inexplicable aviation activity by Hilliard in Florida the State Dept announced a change of policy in January, after President Bush's swearing-in, instructing the U.S. Ambassador to Columbia, Anne Hamilton (from DEA chief Asa Hutchinson's home of Fort Smith, Arkansas, just minutes by air from infamous Mena, home of the biggest narcotics trafficking operation in history during the 1980's) to urge Columbia to "stop its opium eradication activities in favor of eliminating coca."

When he found out, Republican Dan Burton was livid, and brought the matter before his House Govt. Reform Committee.

"In 2000 we saw initial success with the heroin strategy," Burton stated in the hearing. "Our allies and the Colombian National Police eradicated 9,200 hectares of opium poppy plants in Colombia's high Andes Mountains. This put a serious dent into the supply of heroin coming into the United States."

"It was then that the State Department chose to stop opium eradication," Burton fumed, "to, as Ambassador Patterson put it, 'take advantage of a historic opportunity to eradicate coca.'"

During hearings, Burton said that "Eradication of opium with the new Black Hawks that we gave them last year was stopped -- stopped while the coca eradication in the south took a priority. And the only problem is Colombia's cocaine is now increasingly headed in another direction: to Europe. And the opium poppy used to make more deadly Colombian heroin is almost exclusively headed to the United States of American and our East Coast."

"It's a small world after all."

What makes this digression into the politics of heroin of especial interest are two related facts:

    1. Richard Ben-Veniste represented notorious Contra-era drug smuggler and CIA pilot Barry Seal, covered (read the chapter here) in Barry & the 'boys.'" And

     

    2. The King Air 200 which passed from Truman Arnold into Wally Hilliard's hands was originally one of a number of special "mil-spec" planes produced in 1981 for use in the Contra adventure in Central America.

Barry Seal 'owned' one, which later became the favorite plane of then-Texas Governor George W. Bush.

Now Wally Hilliard 'owns' another.

Also of note is the fact that Barry Seal  had attempted to plea bargain himself out of trouble through the simple expedient of offering to 'roll' on his own attorney, Richard Ben-Veniste.

This novel approach caused a nervous Ben-Veniste to write a letter to Seal (reprinted in Barry & the boys from Seal's own archive) in which he says,

    "I have mentioned several times that I would appreciate your returning my two briefcases of legal materials which you have been holding as soon as possible."

Some observers detected a whiff of blackmail.

When we originally learned of this maneuver while writing "Barry & 'the boys,'" we thought, how odd.

Offering to roll on your attorney is odd. But rolling on someone else, slightly higher up in your particular criminal organization, like your boss...

That happens all the time.

Years later, well after Seal's assassination, the Wall Street Journal called him "the ghost haunting the Whitewater probe."

Richard Ben-Veniste may one day be known as "the ghost haunting the 9/11 investigation."

Today the Truman Arnold Company tops the Arkansas Business list of that state's largest private companies, after unseating Jackson Stephens Inc. of Little Rock, long unchallenged as the state's largest private company.

Jackson Stephens was often referred to by drug smuggler Barry Seal of the Mena drug smuggling operation as the "Old Man"

No doubt all of this is mere coincidence, without the slightest relevance to an understanding of what happened in America on September 11th, 2001.

According to the FBI, which should know, the 19 hijackers had no help from any outside organization while in this country.

They were a Lone Cadre.

Nothing to see here, folks.

Move along.
 
 
 
 
 
The Hideous Career of Richard Ben-Veniste
 
By: Tod Lindberg
Weekly Standard | Saturday, April 17, 2004

The Washington lawyer is the quintessential Washington type. He has the huge house in Wesley Heights or Potomac; the million-dollar partnership bonuses; the Rolodex with everyone's private number; the squad of young associates who do the grunt work and call him Godfather; the easy intercourse with pols and corporate chieftains seeking free advice or high-priced counsel--and, of course, the ego to go with all of the above. He slips and slides in and out and around government, usually making his reputation through political work he can then sell on the open market.

The Washington lawyer comes in a number of shapes and sizes, from the avuncular Bob Bennett, now representing Bill Clinton in the Paula Jones matter, to the cerebral Ted Olson, everybody's favorite Republican litigator. Perhaps the most interesting iteration is the attack dog--an in-your-face, take-no-prisoners type best represented these days by Richard Ben-Veniste.

A partner in the firm of Weil, Gotshal & Manges, Ben-Veniste did a recent tour of public duty as minority special counsel to the now-shuttered Senate Whitewater committee. There he served up enough disdain, contempt, and indignation to fortify the Democratic contention that the whole investigation was an overblown load of partisan hooey. By any measure, he did a good job. It was hardly his first star turn. Ben-Veniste made his reputation in his early thirties as a prosecutor working for Archibald Cox and Leon Jaworski on Watergate. In the course of the legal wrangling over Richard Nixon's secret tape recordings, Ben-Veniste often turned up on the front pages and the evening news.

After such a prominent role in what was one of the titanic legal battles of American history, the rest of a legal career might seem something of a letdown. But Ben-Veniste has never been shy about stepping into the lights, and he may be getting ready for another goround. His latest high-profile client is Truman Arnold, who was the chief money man at the Democratic National Committee for a critical five-month period in 1995 when the DNC was deeply in debt and reeling from the historic 1994 defeat at the polls. Arnold is also one of the select group of people who put Webster Hubbell on the payroll in 1994 between Hubbell's resignation as the Clintons' man at the Justice Department and his subsequent guilty plea to charges that he had defrauded clients and law partners. Ben-Veniste and his client thus find themselves at the red-hot center--the point where the Whitewater investigation of independent counsel Kenneth Starr and the unfolding Democratic fund-raising scandal are converging.

Ben-Veniste's causes from Watergate onward have been overwhelmingly liberal and Democratic. Indeed, he folded his own private practice to join Weil, Gotshal in 1990 because he was frustrated that the small size of his operation had kept him from taking on a client he really wanted to represent: Jim Wright, the Texas Democrat whose pocket-lining corruption in office cost him his House speakership and political career.

In the lawyering trade, it's considered bad form to judge an attorney by his clients. It's the quality of the representation that counts. By reputation, Ben-Veniste is nothing if not vigorous in that regard--tough and willfully abrasive, a pitiless interrogator, a bold strategist. But certain rules apply even to Washington lawyers. Some of those rules are enshrined in law, some by the canons of the profession, some by convention. And the same quality of representation that has elevated Ben-Veniste into the Washington pantheon--one of the Top 50 lawyers in town, in Washingtonian's reckoning--has also left a distasteful trail of ethical flotsam stirred up in the wake of his confrontational style. There are questions about the propriety of his conduct toward those who come up against him--and even toward those on his side. And his representation of Arnold raises questions about his compliance with a tough D.C. bar rule regulating government and private employment.

Ben-Veniste would not be interviewed for this article. In a letter, he said he had reached "the conclusion that the article will reflect a preconceived bottom line, regurgitating the sore-loser whining that certain former (and some present) participants in the Whitewater feeding frenzy have put forward from time to time." The rhetoric is vintage Ben-Veniste. Despite his talk of " regurgitation," however, Ben-Veniste's own conduct has gone remarkably unscrutinized--particularly given his own unquestioned ability and willingness to scrutinize his political opponents.

A special counsel to a congressional investigative committee is supposed to be a fact-finder first and foremost. But Richard Ben-Veniste's curiosity about the facts of Whitewater seems to have been a bit selective. In particular, he seems to have gone into overdrive to try to shut down what may have been the most potentially damaging line of inquiry Republican investigators were pursuing.

On February 7, 1996, majority counsel Michael Chertoff posed a series of eerily prescient questions to Webster Hubbell in a televised hearing before the Senate Whitewater committee. Chertoff asked Hubbell, who had been brought up from prison in Maryland to testify, about his employment prospects following his release from prison.

"Are you familiar with a group called the Lippo Group?" Chertoff asked. This was the first public inquiry into a matter that would, seven months later, break out into the Clinton campaign-finance scandal. In February 1996, no one outside the financial community knew much about the Indonesian conglomerate run by Mochtar Riady and his son James. And no one outside the Clinton Arkansas circle knew much about the many, many connections between Lippo and the Clinton crowd--connections apparently based on the flow of Lippo-linked cash into Democratic political operations and rewards for it from the Clinton team in the form of access and influence.

Hubbell responded that an affiliate of the Lippo Group had been a client of his between his resignation from Justice and his guilty plea.

"Did you have other clients?" Chertoff asked.

"Yes," Hubbell replied.

When Democratic senator Paul Sarbanes asked Chertoff what the relevance of all this might be, Chertoff said he was interested in knowing whether the money Hubbell received "may have had an impact on your degree of cooperation with the independent counsel or with us." (At Hubbell's sentencing after his plea agreement, Whitewater independent counsel Kenneth Starr had asked for no leniency--a clear signal that Starr didn't believe Hubbell was cooperating fully with his investigation.)

Hubbell protested vigorously, and committee chairman Alfonse D'Amato ruled that any further questions along these lines would be addressed in private depositions.

Who knew any of the details of Hubbell's financial arrangements? As we have since learned, a lot of people knew, and a lot of people were involved. Former White House chief of staff Mack McLarty and current chief of staff Erskine Bowles had called around to their friends in 1994 to try to find work for Hubbell. White House official and longtime Clinton fixer Bruce Lindsey knew Hubbell was working for Lippo. Now it appears the president and Hillary Clinton may have known as well. Hubbell even visited them at Camp David in this period, and he also met with another longtime Clinton insider working at the White House, Marsha Scott. Then, of course, there were all those (starting with the president himself) who knew just exactly how important the Lippo Group was.

Some Democrats may have had an inkling, but Republican staffers on the Whitewater committee, sources say, had no idea what a gold mine Chertoff had stumbled onto. Which is where Richard Ben-Veniste comes back in.

It wasn't until June 1996, about a week before the Whitewater committee's authorization would run out, that Republican investigators returned to the question of Hubbell's employment. Ben-Veniste put on an extraordinary show during a deposition of Bruce Lindsey in which he acted more like a defense counsel than an investigator, trying to run out the clock on an inquiry due to close up shop a week later.

Robert Giuffra, Jr., the committee's chief counsel, wanted to ask Lindsey what conversations he might have had with Lippo officials or others about Hubbell's financial circumstances and his employment in 1994. According to deposition transcripts (neither Giuffra nor Chertoff would comment for this article), Giuffra began by asking, "Which members of the Lippo Group have you had discussions with since January 20, 1993?"

Minority counsel Neal Kravitz instructed Lindsey not to answer the question. He argued that the question was outside the scope of the committee's mandate. Giuffra said Kravitz was seeking to narrow the mandate unfairly. "The committee is trying to ascertain whether the business relationship in some way has impacted upon what [Hubbell] has testified to before both the Senate and perhaps other forums," Giuffra said. "But to ask the simple question who he spoke, who Mr. Lindsey spoke to hardly seems to be going into a giant fishing expedition.

At this point Ben-Veniste stepped in. "Now there is a substantial difference of opinion as to the relevance of this matter, even as regards to Mr. Hubbell," he said. "To now expand this into some general inquiry inviting everyone who comes here to be questioned about this wholly collateral matter is inappropriate."

Lindsey went on to answer several narrower questions about Hubbell, but when Giuffra asked about any conversations Lindsey might have had about Hubbell's financial difficulties, Ben-Veniste shut the line of questioning down again.

    Giuffra: After Mr. Hubbell left the Department of Justice, did you ever have any conversations with anyone about financial difficulties he was experiencing?

     

    Ben-Veniste: Let me suggest this --

     

    Giuffra: Let him answer the question before you--

     

    Ben-Veniste: Let me suggest this. If you want to go into this area, you will get a ruling from the chairman. . . . I'm simply going to ask the witness not to involve himself in answers to questions where the subject matter is totally collateral to what he was advised he was coming here for. If you want to get the chairman to make a ruling on that, I'm prepared to discuss it.

     

    Giuffra: We have had testimony elicited that with regard to the Lippo Group that Mr. Lindsey had various information. The questions I'm asking go directly to that testimony. The whole subject of the Lippo Group is clearly relevant. The chairman believes it's relevant. The majority believes it's relevant. The minority may have a different view. We can get a ruling from the chairman. I want to have it on the record that Mr. Lindsey, you will be available to answer more questions about this once we get the ruling.

     

    Ben-Veniste: We will take the ruling first, scheduling second.

     

    Giuffra: No, I want to make sure he is available to answer the question. I know you want to--

And so on, for six more pages of transcript.

The transcript is altogether a remarkable document--not because of anything Lindsey said, but because it shows Ben-Veniste doing everything he could to shut down Giuffra's line of inquiry. Says a Democratic staffer who professes admiration for Ben-Veniste's performance in general, "When the administration was on the ropes, he'd throw them a life raft."

After the wrangling, D'Amato ruled that the four questions Giuffra tried to ask were indeed relevant. That afternoon Lindsey answered Giuffra's questions, and it turned out that Giuffra had hit pay dirt. Among the people with whom he had discussed Hubbell, Lindsey reported, was one John Huang. This was the first time Huang's name had come up, and, in a few months' time, the Lippo executive turned Commerce Department official turned Democratic National Committee fund-raiser would become the hinge figure in the Clinton campaign- finance scandal.

The depositions took place on June 8, 1996. The Senate Whitewater committee went out of business June 15. The relevance of the payments to Hubbell is no longer a matter of dispute. Nor is the relevance of the Lippo Group or John Huang. They have been the subjects of front-page headlines in all the major newspapers for months. They might have been so in June 1996 had Ben-Veniste devoted half as much energy to the pursuit of this line of inquiry as he did to shutting it down.

IN THEIR 1977 BOOK about Watergate, Stonewall, Ben-Veniste and co- author George Frampton, Jr. described Ben-Veniste's previous brush with celebrity by noting that Leon Jaworski and others

    were troubled by the fact that Ben-Veniste . . . had reaped such a huge amount of personal media coverage. Ben-Veniste's direct and irreverent personality was unlikely to assuage the special prosecutor's concern, particularly given the not inconsiderable ego possessed by Leon himself. Jaworski did not doubt our abilities; he just didn't fully trust the maturity of our judgment.

It takes an interesting sense of self to write autobiographically in both the third person and the first-person plural. A Democratic staffer describes Ben-Veniste's ego as "well in the mainstream of high-profile Washington lawyers."

Opposing counsel usually aren't so kind. They think his behavior toward witnesses and others betrays a bullying manner bordering on abuse. Says one: " The way he comports himself is obnoxious and unprofessional."

Ben-Veniste's most outspoken critic is Mark R. Levin, the president of the Landmark Legal Foundation; Levin charges that Ben-Veniste's conduct toward one of Levin's clients, Jean Lewis, was outrageous. And Levin is right.

Lewis was the federal banking investigator who first started looking into the connection between the Clintons and a failed savings and loan whose owner was their partner in the Whitewater real-estate development. She filed criminal referrals mentioning the Clintons as witnesses and "possibly more than" witnesses. Democrats maintained that her investigation was driven by her political bias against Clinton. As one piece of evidence, they produced a February 1992 letter that predated her investigation in which she referred to candidate Clinton as a "lying bastard."

Levin says the way Ben-Veniste's minority staff developed this particular evidence of bias was tainted. The committee had issued a subpoena for "all records, regardless of format" related to Lewis's investigation. But the subpoena did not encompass everything Lewis may ever have said or written about Clinton, and so she deleted some material she deemed irrelevant from a computer disk before she turned it over to the Whitewater committee. Among the deleted material was the "lying bastard" letter, which was not a lengthy dissertation on Clinton, but a letter to a friend.

Producing such a disk was highly unusual in itself. Most people faced with similar subpoenas, staffers say, turned over only paper records, not electronic records. Says one majority staffer, "We asked the White House for disks, they laughed at us." Lewis's scrupulousness in turning over materials " regardless of format" would cost her.

Minority staff, by means that have yet to be explained, restored the letter Lewis thought she had erased--and did not tell majority staff what they had found or how they had found it. Instead, Ben-Veniste sprung the "lying bastard" remark on Lewis at a hearing. At first, she couldn't even place it, but when she did, she was alarmed; the letter featured derogatory remarks about a family member's veracity, which Ben-Veniste forced her to talk about on national television.

At the end of the hearing, Lewis had to be rushed off to a hospital; the stress had caused her blood pressure to skyrocket. Ben-Veniste had previously shown Lewis he would not be shy about inquiring into her private life. In one deposition, he had asked her the following questions unrelated to Whitewater: "Was there a fraud trial associated with some business matters in which you or your former husband was involved? . . . Were there any allegations made in connection with that general matter that you had made false or misleading statements?" Lewis said no.

Levin claims that Ben-Veniste's efforts to restore the deleted letter were a violation of Lewis's Fourth Amendment rights and an abuse of the subpoena process. He got nowhere with the Senate Ethics Committee, whose membership is equally divided between the two parties. "The Senate Ethics Committee obviously couldn't muster a majority vote to condemn the conduct," Levin says, "but I don't need the Senate to tell me when a lawyer is conducting himself in a sleazy manner."

The Ben-Veniste style may not be directed only at adversaries. In 1993, a young female associate left the Well, Gotshal litigation department Ben- Veniste runs after only eight months with the firm. She went on to file a sex discrimination and harassment suit naming Ben-Veniste as a defendant, citing the hostile environment toward her in the litigation department. Sources say the case was settled about two years later for an undisclosed sum. As part of the settlement, the entire case has been placed under seal, and the parties are bound to remain silent. ("I can't talk about that," the lawyer who filed the case says; she is now an associate in the Washington office of a large New York firm.) The details of the allegations involving Ben-Veniste have essentially been obliterated from the public record, consigned to a part of the U.S. justice system that remains secret.

PUSHING THE ENVELOPE is nothing new for Ben-Veniste. In Stonewall, he describes the tense environment in the week before Nixon ordered the firing of Watergate special prosecutor Archibald Cox (the "Saturday Night Massacre," as it came to be known). Lawyers on Cox's staff were very much uncertain what their future held. They were quite certain, however, that Nixon had engaged in a criminal conspiracy to cover up the Watergate break-in. To their minds, the question was how far a president and an administration that had come unmoored from the Constitution and the rule of law would go to stay in power.

Then, the hammer came down: Cox was out, and the FBI arrived at the special prosecutor's offices to confiscate documents. Either Nixon didn't think to order that Cox's staff be fired as well, or the order got lost in the chain of command; in any case, the junior prosecutors who were working on the case stayed on.

But had they been fired, Ben-Veniste and his coauthor note, they were ready: "Actually, copies of all potentially explosive documents had . . . been removed for safekeeping several days before. On the previous Thursday evening, members of the Watergate Task Force had made copies of key prosecution summaries and memoranda and spirited them away." Desperate times evidently require desperate measures, even if what you are doing runs the risk of violating rules governing grand jury secrecy and other prosecutorial conduct.

BEN-VENISTE'S DECISION to represent Truman Arnold, the former DNC finance chairman, in matters relating to the campaign-finance scandal raises questions about the lawyer's compliance with a key rule of the Bar Association of the District of Columbia.

Rule 1.11 of the D.C. Bar Association's Rules of Professional Conduct governs "successive government and private employment." It reads in part: "A lawyer shall not accept other employment in connection with a matter which is the same as, or substantially similar to, a matter in which the lawyer participated personally and substantially as a public officer or employee." The rules also note that this "absolute disqualification of a lawyer from matters in which the lawyer participated personally and substantially carries forward a policy of avoiding both actual impropriety and the appearance of impropriety."

Recall what happened when the Senate Whitewater committee's majority counsel began making inquiries into the money received by Webster Hubbell. Ben-Veniste worked to block inquiries into Hubbell's employment on the grounds that they were beyond the scope of the committee's investigative jurisdiction. Now Ben-Veniste is representing Arnold, who did employ Hubbell. Is Ben-Veniste in violation of the D.C. bar code because he has accepted "employment in connection with a matter which is the same as, or substantially similar to, a matter in which the lawyer participated personally and substantially as a public officer or employee"?

This is a serious matter. In fact, the D.C. bar counsel recently came down like a ton of bricks on former Bush State Department counsel Abraham Sofaer in relation to his conduct following the bombing of Pan Am Flight 103. At the time Sofaer served in the State Department, the chief suspect was Iran.

Sofaer was not much involved in the investigation. After he left office, the focus of suspicion shifted to Libya, which then retained Sofaer. Washington Post columnist Jim Hoagland wrote damningly about the matter, and though Sofaer quickly dropped his Libyan client, the bar counsel took his representation of Libya as a clear violation of its rule. Sofaer's appeal is still pending.

Edwin Williamson, a former legal adviser to the State Department who has filed an amicus brief in support of Sofaer, says Ben-Veniste's representation of Arnold gives rise to far more serious questions. The bar has set three conditions to establish a violation. First, the matter in question has to involve a specific party. "An investigation into Hubbell's legal fees for possible wrongdoing," says Williamson, a partner in the law firm of Sullivan and Cromwell, "would clearly be a matter involving a specific party or parties."

Second, it has to involve the personal and substantial participation of the lawyer. "If Ben-Veniste played an important role in deflecting the committee's further investigation into the source and purpose of Hubbell's fees," Williamson says, "that would clearly constitute personal and substantial participation in the 'particular matter.'" Third, the subsequent matter has to be substantially related. "His representation of a payer of Hubbell's fees," Williamson says, "would be the same as or 'substantially related' to the 'particular matter' in which he 'personally and substantially participated' while he was minority counsel."

Stephen Gillers, a professor of legal ethics at New York University, emphasizes that nothing so far constitutes proof of a violation of the bar rule. On the other hand, he notes, "If Ben-Veniste's work as a government lawyer encompassed payments to Hubbell, then [the bar rule] wouldn't allow him to represent someone being investigated for payments to Hubbell."

But, Gillers notes, the involvement in the first instance "has to be hefty," not just a matter of something crossing a desk or, as perhaps in this case, a manifestation merely of a general effort to circumscribe the majority's exposure to information by interpreting the committee's reach narrowly. "The conclusion depends on the minutiae," Gillers says. One would have to know whether Ben-Veniste strategized with others on the question of how to deal with payments to Hubbell.

Given that the bar counsel moved decisively to investigate Sofaer, don't the circumstances of Ben-Veniste's representation of Arnold warrant an inquiry?

"That's the bar counsel's decision," Gillers says.

So it is. And it will, indeed, be interesting to see whether the liberal, overwhelmingly Democratic D.C. bar comes down on liberal Democrat Richard Ben- Veniste with the same fury as it came down on conservative Republican Abraham Sofaer. Or if that old pattern going back to the Watergate days will continue to assert itself--with Richard Ben-Veniste as a force unto himself, the righteous doer of partisan Democratic deeds, and never mind such petty concerns as fair play or appropriate conduct.

Tod Lindberg is editorial-page editor of the Washington Times and a frequent contributor to these pages. His article on the FBI's child-pornography investigation appeared in last week's issue.

Correction appended 4/28/1997: Tod Lindberg writes: I want to correct an error in my article on Richard Ben-Veniste in last week's issue. I noted that the first time the name of John Huang--the Lippo Group official turned Commerce Department official turned DNC fund-raiser--came up in an investigative context was at a June 8, 1996, deposition of Bruce Lindsey before Senate Whitewater committee lawyers. That was correct. But Lindsey did not, as I wrote, testify that he had discussed former Justice Department official Webster Hubbell with Huang. Instead, Lindsey was responding to a question about whom he had spoken with from the Lippo Group since the beginning of the Clinton administration.
 
 
 
 
 
FRIENDS OF RICHARD BEN-VENISTE
 
 
Mutual Benefits czar Joel Steinger manipulated local politicians and the state legislature. But divorce court too?
 
By Bob Norman
published: February 19, 2009
 
Joel Steinger is a shrewd operator who gained great sway over local politicians and the Florida Legislature while he perpetrated one of the greatest frauds in South Florida history.
 
His billion-dollar Ponzi scheme, Mutual Benefits Corp., was busted in 2004. This past December, the feds indicted him on fraud and money-laundering charges. But that hasn't kept Steinger from living like a king at his $9 million mansion on the New River in Fort Lauderdale.
 
And that has been made possible in part due to his success at a whole new game: divorce court.
 
When his wife, the mother of his 7-year-old son, sued him for divorce, Broward Circuit Judge Susan Greenhawt allowed the 59-year-old Steinger to keep full ownership of his lavish waterfront estate and let him off without having to pay alimony or child support.
 
Curiously, Greenhawt also sealed the felon's financial documents from public view, leading some to complain that she was actually protecting the criminal from scrutiny.
 
The contentious, expensive, and often ugly battle came after a six-year marriage. The couple had been regulars at exclusive charity balls, and they were known for throwing lavish parties attended by the political elite, notably Broward Mayor Stacy Ritter and former state Sen. Steve Geller.
 
Joel Steinger poured hundreds of thousands of dollars into the political process, fostered a friendship with Geller, and hired Ritter's lobbyist husband, Russ Klenet — all moves that helped him continue operating his fraudulent company with the Legislature's nascent blessing.
 
Court documents show that while Steinger was ripping off Mutual Benefits investors, he was also accepting millions of dollars from Colombian drug cartels to fund the business and hiding illicit profits in bogus companies and offshore accounts.
 
The Securities and Exchange Commission shut down Mutual Benefits in 2004 and ultimately forced Steinger and his underlings (including his two brothers) to pay about $30 million in penalties. A government-sponsored receivership is now running what's left of Mutual Benefits and is going after any assets it can find that are connected to Steinger, including tens of millions he had invested in racehorses and an Ocala farm.
 
The only major known asset he has left is the Fort Lauderdale estate, which is protected from creditors. Not surprisingly, the mansion was the central issue in the divorce.
 
Diana Steinger, an attractive woman born to a wealthy family in Venezuela, originally filed for divorce in 2005 and also got a restraining order against her husband, alleging verbal and physical abuse. She sought child support and for the house to be put in a trust fund for their son, whose custody is split between his parents.
 
Both sides employed high-powered lawyers for the dispute, which continues today. Last April 8, Judge Greenhawt issued a final order allowing Joel Steinger to keep the estate. The judge gave Diana Steinger and their son just six days to move out of the 8,500-square-foot home with her possessions in tow.
 
Greenhawt, who was appointed judge by former Gov. Jeb Bush in 2003, declined to comment for this article, citing the ongoing divorce. But the judge made it clear in the order how she felt about Diana Steinger.
 
"The husband thought he was getting a beautiful wife, but she turned out to be smoke and mirrors," Greenhawt wrote in her order.
 
"The wife thought she was getting a wealthy husband, but the business collapsed."
 
Harsh words for a now-single mother, especially considering that Florida is a "no-fault divorce" state. But Greenhawt didn't even write the order; it was actually composed by Joel Steinger's attorney, prominent divorce lawyer Karen Amlong.
 
At the bottom of the document is a line of computer code indicating that Greenhawt's order originated from Amlong's computer.
 
Amlong says she wrote the order at the judge's request, but she says it was consistent with Greenhawt's pronouncements in court. Amlong says Diana Steinger has several divorces in her past and was never interested in a long-term marriage.
 
"What is amazing is that the wife owes [the law firm] Baker & McKenzie over $1 million for representing her — all to walk away with her jewels and secondhand furniture and her designer clothes," says Amlong. "It was a short-term marriage."
 
The truth is that Diana Steinger, according to the order, wasn't allowed to take any furniture, only personal possessions that she owned before the 2000 wedding. Diana Steinger declined to comment, but a close friend said she was mischaracterized by Joel Steinger and his attorney in court.
 
At one point, said the friend, Amlong intimated that Diana Steinger was an exotic dancer, a laughable allegation since the only dancing she has done is ballet.
 
"She's a good mother and good person," said the friend, who spoke on the condition of anonymity. "And she has gone through hell."
 
Backing up the friend's characterization is the fact that Diana Steinger is receiving a humanitarian award from the Florida Grand Opera for her volunteer work.
 
Amlong says the ruling was fair in part because Joel Steinger took on the brunt of the millions in debt he'd accumulated.
 
The judge, not surprisingly, echoed that sentiment. Greenhawt wrote in the order that forgiving Diana Steinger her husband's debt, which he'd acquired in a criminal enterprise, "resulted in a vastly disproportionate distribution in favor of the wife."
 
The judge didn't mention that the home, under the state's homestead laws, is protected from those judgments and creditors.
 
The comparison to Bernie Madoff, who is accused of masterminding a $50 billion Ponzi scheme, is unavoidable. While thousands of investors have lost their savings, Steinger is so far doing just fine. Today, Joel Steinger continues to live in his mansion. He's under house arrest but is free to towel off in his two-story pool house, lounge at his mahogany bar, and use any of the eight bathrooms in the giant abode.
 
And the victims don't think the house should belong to the husband, the wife, or the child — they think proceeds from its sale should go to them.
 
"It's sickening," says Larry Scartz, whose parents lost most of their nest egg in the Mutual Benefits scam and who has been assisting victims around the country. "I don't understand it. It makes no sense."
 
County records indicate Steinger isn't hurting for cash. There are still many millions of dollars unaccounted for in the Mutual Benefits fraud. It's unknown if Steinger has access to any of that, but county records show that just ten weeks after Greenhawt's final order was issued, he received a $602,000 loan from longtime friend and Miami attorney David Goldstein.
 
Listed as collateral for the loan is the Fort Lauderdale estate, which is still in dispute. The ex-wife is appealing the judge's ruling. Her current attorney, Barry Finkel, argued at a hearing before Greenhawt on January 9 that Diana Steinger deserves her portion of the home's equity.
 
There, Finkel argued that the house — or at least the $800,000 portion of the equity in it deemed a marital asset — should be shared with the ex-wife and argued that Greenhawt excused Joel Steinger "from paying child support because of his past and pending criminal conduct."
 
Amlong countered that the judge had no obligation to alter her ruling and that the house could be used by Steinger for bond in light of the indictment.
 
Greenhawt denied Finkel's request, prompting Diana Steinger to complain that her son's private school is threatening to expel him because Joel Steinger had failed for several months to pay his half of the tuition.
 
"Maybe you should take care of your child instead of your appeal, ma'am," Amlong sniped at the mother.
 
And with that, Diana Steinger left the hearing the way she'd arrived: empty-handed.
 
 
 
 
 
 
Chasing the death dividend
 
July 4, 2004
 
When the U.S. Coast Guard raided a Russian fishing vessel on the Pacific Ocean in 2001, investigators hit a jackpot: more than 12 tons of chalky powder hidden beneath a mountain of frozen squid, the largest haul of cocaine ever intercepted at sea.
 
At the time, they had no idea they also had tapped in to what federal authorities call another massive deception.

Agents tracing the source of the cocaine and probing possible money laundering eventually seized files that led deep into one of the financial industry's darkest corners: investing in the life spans of old or dying people, transactions known as viaticals.

Based on those records, federal authorities are investigating Mutual Benefits Corp. of Florida and filed a civil complaint two months ago that the Ft. Lauderdale-based viatical seller made false promises of extraordinary profit as it reeled in $1billion from 29,000 investors.

But a Tribune investigation found that Mutual Benefits is just one example of alleged deception in the rapidly growing viatical industry, a loosely regulated, often-misunderstood world that is riddled with fraud.

Dozens of companies selling viaticals maintain stellar regulatory records and have been consistently profitable. But since 1998, more than 100 companies have run afoul of state laws and regulations, records show.

The Tribune reviewed thousands of court files, analyzed government enforcement records from across the country and studied 400 current and defunct companies, piecing together a troubling portrait of an evolving industry.

In a viatical transaction, a person with, for example, a $100,000 life insurance policy might sell it for $50,000--though that figure could be lower or higher--and the investor is entitled to the full amount, minus commissions. The cold calculus is inescapable: The quicker the original policyholder dies, the better the investment.

But those profits often have proved elusive, while the industry has proved resistant to reform.
 

The Tribune investigation found that:

    - Despite the industry's problems, a dozen states have failed to adopt laws restricting viatical businesses. Two dozen other states, including Illinois, rely only on vague regulations that serve to provide haven to troubled companies. Mutual Benefits was banned from doing business in five states but continued to operate in Florida--and in Illinois.

     

    - Since 1995, at least 56 industry executives have been convicted of felonies for activities ranging from elaborate pyramid schemes--companies selling non-existent policies--to recruiting terminally ill patients to apply for multiple policies without disclosing their conditions, state and federal court records show.

     

    - At least half a dozen doctors have been accused of manipulating medical diagnoses in attempts to assure investors that policyholders were near death. In most cases, these doctors delivered life expectancies without consulting with patients or their doctors.

     

    - Companies commonly ply investors with complex contracts that downplay financial risks and obscure key disclosures, more than a dozen state investigations found. Behind advertisements guaranteeing safe and secure investments is the reality that investors may be responsible for premiums if the policyholder lives beyond life expectancy. Over time, that means investors could lose part of their principal.

"This is not a certificate of deposit," said William Scott Paige, the Florida founder of Wm. Paige & Associates, one of the country's oldest viatical companies. "No one can ever accurately predict life expectancy. They can make estimates and projections. But that's all they are."

Viaticals, which got their name from a Latin word meaning "provisions for a long journey," have gained in popularity in the past decade. When executed honestly, the deals can benefit everyone involved.

Policyholders gain a tax-free influx of cash that can be used to feather their last days in comfort, from dream vacations to new medicines.

Investors can receive rates of return double or triple that of safer investments, such as certificates of deposit or mutual funds. And the companies and brokers typically profit by taking a commission out of the money investors pay.

Eager to shed its image of shady deals, the industry now refers to its wares as life settlements. And instead of focusing on terminally ill policyholders, companies have expanded their reach to include most any older person.

But that has not been enough to reform the industry.

"We are very vulnerable to fraud and bad players," said Doug Head, director of the Viatical and Life Settlement Association of America, an Orlando-based trade group. "States don't know how to grapple with us. We are in deep need of standards."

Lawyers for Mutual Benefits say the company ran into problems not because of fraudulent business tactics or low standards in the industry but because regulators were overaggressive, which led to the raid on the company's offices.

"It's not a Ponzi scheme," said Jon Sale, a Miami attorney representing one of the company's officers. "Evidence will show that there's $200 million in escrow to pay [insurance] premiums with, which the company was not required to do."

He also disputed the Securities and Exchange Commission's claim that phony life-expectancy estimates were given to investors before they purchased a policy.

"Of course there are a lot of fraudulent viatical companies," Sale said. "But this isn't one of them."

AIDS afforded opportunities

Viatical companies grew quickly in the 1980s as the AIDS crisis presented an opportunity to buy large numbers of policies from dying patients. Mutual Benefits was founded later, in 1994, but still focused on AIDS patients and rapidly expanded to be one of the nation's largest buyers of benefits.

By the late 1990s, as medical advances prolonged the lives of many AIDS patients, payouts from Mutual Benefits' investments slowed down drastically. But the company didn't reveal this to future investors, according to SEC charges.

The company was formed in the mid-1990s by Leslie and Joel Steinger; their brother Steven, who goes by the last name Steiner; and Peter Lombardi, a family friend, according to a deposition from Steiner last month. All but Steiner have been named in the SEC civil complaint, though his consulting company was included.

The SEC's civil complaint accuses Mutual Benefits of improperly using investors' money. In response to the commission's request, a federal judge froze the company's assets and put it

[Whaler]

I wonder when HBO is going to make a Jewish mafia series?   (Like the Sopranos.)