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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 1: There was a quarter of a million dollars for an

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Speaker 1: appearance by Leo DiCaprio, a nearly four hundred thousand dollar

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Speaker 1: bar tab, millions for paintings by Monet and Van Gogh.

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Speaker 1: These were just some of the expenses that high flying

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Speaker 1: Malaysian financier Joelo racked up and paid for with millions

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Speaker 1: siphoned off in the one MDB scandal. Joelo is nowhere

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Speaker 1: to be found, but former Goldman banker Roger In can

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Speaker 1: be found in the defendant's seat in a Brooklyn federal

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Speaker 1: courtroom on trial for conspiring to launder money and violate

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Speaker 1: anti bribery laws in a scheme that looted billions from

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Speaker 1: the Malaysian one MDB fund, and ng's former boss and

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Speaker 1: star Goldman banker, Tim Leisner can be found on the

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Speaker 1: witness stand. Now. The star witness in the prosecution's case

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Speaker 1: against Ing joining me is Michael Weinstein, chairman of the

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Speaker 1: White Color criminal practice at cole shots So. Right out

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Speaker 1: of the gate during opening statements, the defense started to

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Speaker 1: attack Leisner, calling him a double big amus, saying he

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Speaker 1: uses people and he's trying to using to get out

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Speaker 1: of jail time. Is that approach effective? Well, I think

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Speaker 1: they're trying to disrupt the narrative that the government has

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Speaker 1: tried to lay out. Specifically, they're trying to say that

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Speaker 1: his testimony can't be trusted. They're trying to make him

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Speaker 1: the fall guy. They want to point out that he's

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Speaker 1: motivated by self interest, and they're trying to undermine his

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Speaker 1: credibility as a whole. And by doing that, it enables

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Speaker 1: them to attack everything he says and essentially water it down,

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Speaker 1: so the jury doesn't give it as much weight as

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Speaker 1: you would expect. The jury is going to get a

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Speaker 1: picture of him, of this guy who lived this lavish lifestyle,

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Speaker 1: you meeting with kings and queens, marrying a former supermodel,

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Speaker 1: who turns against ing the man he called his best

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Speaker 1: friend to say himself. But does that make any difference

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Speaker 1: in whether they believe him or not. Not. Really, in

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Speaker 1: the world of criminal law, there are very few people

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Speaker 1: who end up not turning against other people. And so

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Speaker 1: the situation you have here is a boss who has

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Speaker 1: turned against one of his underlings and one of his associates.

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Speaker 1: In the context that we have here, where he was

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Speaker 1: asked and participated in this type of significant fraud. It's

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Speaker 1: not a surprise that he's turning against others to try

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Speaker 1: to save himself, and the jury honestly has to evaluate

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Speaker 1: whether they believe him or number two, whether they give

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Speaker 1: him credibility for coming forward acknowledging what he did was

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Speaker 1: wrong and all the while turning on his former associate.

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Speaker 1: The jury is going to look at him and ask

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Speaker 1: a couple of questions. Is he coming off the sincere

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Speaker 1: candid forthright? Is his recall of the facts and the

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Speaker 1: way he articulates the facts, sincere in how he presents

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Speaker 1: them so that they're credible. Does he just come off

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Speaker 1: as someone who's trustworthy? And those are all issues that

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Speaker 1: a jury is going to have to evaluate. You. Often

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Speaker 1: hear are similar attacks on the witnesses who flipped, but

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Speaker 1: it seems like most juries do end up believing them.

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Speaker 1: That's true. Often when someone flips, the prosecutor will preempt

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Speaker 1: the defense cross examination on just that very line of

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Speaker 1: questioning by saying to them, you're here today under a

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Speaker 1: cooperation agreement. You're here today cooperating because if you testify

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Speaker 1: honestly and truthfully, you help yourself, and obviously as someone

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Speaker 1: on the witness stand is going to say, yes, that's true.

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Speaker 1: So a juror is going to hear that and independently

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Speaker 1: still going to have to assess whether or not that

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Speaker 1: people are lying or whether or not they honestly made

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Speaker 1: a mistake, admitted to the mistake, and are testifying to

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Speaker 1: try to help themselves, because at the end of the day,

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Speaker 1: most jurors, just like most people, if they can help

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Speaker 1: themselves by throwing someone else under the bus, I suspect

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Speaker 1: people would do that. How important is it and how

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Speaker 1: does it play with a jury that he hasn't been

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Speaker 1: sentenced yet. Well, I don't think a jury is going

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Speaker 1: to think that's a significant factor. The judge will probably

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Speaker 1: explain to the juror there's reasons for that that you

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Speaker 1: don't need to focus on. I think what the jury

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Speaker 1: is really going to focus on is number one, is

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Speaker 1: he coming off as credible? Is he coming off as personal?

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Speaker 1: Is he acknowledging his own faults and his own wrongdoing,

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Speaker 1: And even though we don't know what his jail time

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Speaker 1: could be or is is that really relevant and does

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Speaker 1: that have an impact on what he's saying about his

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Speaker 1: knowledge about the situation. I don't think most jurors are

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Speaker 1: worry about whether the guy's going to jail for one

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Speaker 1: year or ten years. It may play some factor, but

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Speaker 1: I think the jurors just trying to assess the witnesses

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Speaker 1: testimony more broadly and more generally to see whether it

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Speaker 1: has some credibility to it more than you know, looking

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Speaker 1: at it, that he's going away for ten years and

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Speaker 1: therefore you can't trust him. So the juries heard about

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Speaker 1: the millions of dollars that were siphoned off and were

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Speaker 1: fretted away on lavish parties, yachts, jets, etcetera. But it

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Speaker 1: wasn't ng who was doing the spending. It was Joel. Correct.

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Speaker 1: So even though the defendant wasn't doing the spending, that

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Speaker 1: does not absolve him from responsibility because the issue in

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Speaker 1: the case is not that the spending was inappropriate. It

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Speaker 1: was how they got the money in the first place.

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Speaker 1: What happened, what transactions occurred, and what did the defendant

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Speaker 1: do or not do to facilitate and aid those transactions

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Speaker 1: which caused those hundreds of millions and billions of dollars

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Speaker 1: to flow through in order to be ultimately used in

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Speaker 1: the manner you just suggested. I think what the jury

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Speaker 1: is going to look at is did he get any money?

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Speaker 1: The answers yes, why did he get that money? And

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Speaker 1: did he get the money honestly by working legitimately or

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Speaker 1: did he get it because he was part of a

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Speaker 1: larger scheme. And I think that's the challenge that the

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Speaker 1: defense attorneys are going to have to come to and

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Speaker 1: answer that question and give a satisfactory answer to the

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Speaker 1: jury before they turn on their own clients. Some of

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Speaker 1: the other evidence they have is million dollars in his

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Speaker 1: wife's account, but his wife was never charged, So how

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Speaker 1: does that play right? So it can play both ways.

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Speaker 1: It's it's um two sides of the same coin. The

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Speaker 1: government's going to say it shows that the defendant was

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Speaker 1: knowledgeable enough about thirty five million dollars that he didn't

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Speaker 1: put it in his own name, and that shows his

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Speaker 1: recognition of the deception that he was trying to foster

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Speaker 1: in this situation. The defense is going to say, no,

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Speaker 1: he was entitled to that money and he put in

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Speaker 1: his wife's account and nothing untoward about that. The reason

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Speaker 1: that she wasn't charged is probably because she was not

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Speaker 1: aware of UM. The moneys. Even if she was aware

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Speaker 1: of it, her husband might have said to her, honey,

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Speaker 1: this is just as a result of me having a

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Speaker 1: banner year and me doing a series of transactions where

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Speaker 1: I got paid a lot of money. She may not

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Speaker 1: have known, and it's likely she did not know as

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Speaker 1: to the source of those funds and the fraudulent nature

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Speaker 1: that those funds originated with. I know you don't know

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Speaker 1: all of the evidence that the prosecution has, but does

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Speaker 1: it seem like the case will stand or fall based

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Speaker 1: on Leisner? I think he's going to have a significant

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Speaker 1: impact as to whether or not the narrative that the

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Speaker 1: government is trying to describe holes. And if his testimony

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Speaker 1: survives a very vicious cross examination and at the end

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Speaker 1: of the day, his view of the world and view

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Speaker 1: of the facts, and his ability to articulate the defendants

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Speaker 1: involvement in the scheme, I think that's going to set

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Speaker 1: the tone for the remainder of the trial. So the

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Speaker 1: defense lawyers have portrayed ing as of course he's Leisner's deputy,

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Speaker 1: a bookish banker, and he was the first to warn

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Speaker 1: Goldman Compliance about the financier Joel, So obviously he doesn't

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Speaker 1: have to take the stand. But is there a lot

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Speaker 1: of pressure on him to take the stand to explain

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Speaker 1: this all away. The answer is yes, there's always a

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Speaker 1: concern and a consideration that it defended the client is

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Speaker 1: going to take the stand. Sometimes clients say, I want

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Speaker 1: to take the stand, I want to tell my story.

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Speaker 1: I'm the best person, I'm the best advocate to tell

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Speaker 1: my side of things. But on the flip side, it's

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Speaker 1: not a one way street. When a client gets on

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Speaker 1: the stand or when the defendant gets on the stand,

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Speaker 1: you have to remember that the prosecutors, who are just

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Speaker 1: immersed in the facts of the case and who know

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Speaker 1: all the ins and outs and all the documents and

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Speaker 1: all the text messages and emails and what's app communications,

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Speaker 1: are going to come at him ferociously, just ferociously, And

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Speaker 1: as a result of that, his narrative, meaning the defendant's

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Speaker 1: narrative on the witness stand, as perfect in his own

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Speaker 1: mind as that may be, may actually backfire because the

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Speaker 1: prosecutor is able to pick that apart and really create

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Speaker 1: doubt as to how honesty is being in his story. So,

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Speaker 1: as a person who has been on both sides of this,

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Speaker 1: how do you decide whether or not to take that

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Speaker 1: risk with a defendant. Yeah, it's a lot of late nights.

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Speaker 1: It's a lot of reviewing what evidence has come in

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Speaker 1: prior to the time where you have to make the decision.

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Speaker 1: It is a game day decision as to whether or

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Speaker 1: not a defendant is going to take the stand. Some

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Speaker 1: of the things you look for is whether or not

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Speaker 1: your story your defense has come in through other people,

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Speaker 1: whether it's through cross examination of the government witnesses, or

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Speaker 1: whether or not you can put other witnesses on your

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Speaker 1: behalf on the stand to tell essentially your client's story,

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Speaker 1: but not having your client on the stand. Also for

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Speaker 1: purposes of documents that you challenge, Are you able to

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Speaker 1: challenge those documents before the jury in order to chip

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Speaker 1: away and articulate what your client's version of the world

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Speaker 1: is and to tell your client's narrative. It really is

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Speaker 1: one of the most difficult decisions and recommendations the defense

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Speaker 1: lawyer has is when you're sitting with a client and

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Speaker 1: they want to tell their story and you really have

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Speaker 1: to engage with them and evaluate whether or not they're

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Speaker 1: gonna do more harm than good as a result of

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Speaker 1: the testimony on the stand. It's a very difficult decision.

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Speaker 1: We always say it's so rare to have a defend

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Speaker 1: and take to stand. Yet in a couple of high

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Speaker 1: profile cases lately, we've seen the defendants take the stand.

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Speaker 1: In Elizabeth Holmes and the Pharaos trial took the stand

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Speaker 1: and the jury still convicted her. But then you had

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Speaker 1: Kyle Rittenhouse take the stand and got acquitted. So what

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Speaker 1: makes the difference defendant or is it the case? Well,

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Speaker 1: I think a defendant who's on the stand who really

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Speaker 1: truly shows raw, unbridled emotion, I think a jury just

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Speaker 1: being humans that that has an impact resonates with a

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Speaker 1: juror um. So I think with the written House trial,

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Speaker 1: you saw a young man who literally and figuratively could

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Speaker 1: not convey his story because he was so emotional about it,

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Speaker 1: and it came off as a very genuine um narrative

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Speaker 1: about his view of what happened. That was very compelling.

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Speaker 1: On the flip side, you have Elizabeth Holmes, who came

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Speaker 1: off as almost prepackaged, and she had done so many

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Speaker 1: interviews and in the previous ten years and had had

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Speaker 1: so many types of public speaking that her story um

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Speaker 1: was able to be picked apart by the prosecutor by

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Speaker 1: juxtaposing what she had said previously by what she was

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Speaker 1: saying on the stand. So I think when it comes

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Speaker 1: to people coming on the stand, you really have to

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Speaker 1: know the facts. They have to be genuine. They have

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Speaker 1: to look like they're not playing fast and loose with

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Speaker 1: the jurors. Be is of a juror feels like you're

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Speaker 1: playing fast and lose, they'll hurt you, they'll turn off,

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Speaker 1: and they'll condict you, you know, almost immediately. So ng

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Speaker 1: is the only one from Goldman, the only one standing

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Speaker 1: trial in this multibillion dollar fraud. The jury is going

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Speaker 1: to see Leisner, who is off the hook? Lisner's name

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Speaker 1: former Goldman executives who knew about the bribes and the kickbacks.

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Speaker 1: They haven't been pursued. Joe low has disappeared in the ether.

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Speaker 1: Doesn't in start to look like the scapegoat here? So

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Speaker 1: the answer that is, to a degree, I wouldn't say

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Speaker 1: Leisner is off the hook. He had a plea deal

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Speaker 1: and he's had to get back I think forty or

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Speaker 1: fifty million dollars. So I think the answer the question is,

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Speaker 1: you're right. I think the defense has to present the

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Speaker 1: that's the defense narrative. It's hard to argue though, because

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Speaker 1: that because Leisner, specifically yesterday detailed the involvement of the

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Speaker 1: defendant in many of these key meetings and decisions, and

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Speaker 1: so it's not as though the defendant had no involvement.

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Speaker 1: I guess the question is how much involvement. So yes,

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Speaker 1: they can make them out to a scapegoat, but I'm

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Speaker 1: just not so sure that's going to carry to day.

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Speaker 1: Would you rather be at the prosecutor or the defense

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Speaker 1: in this case? Well, I loved my you know, many

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Speaker 1: years being a federal prosecutor. I loved it. But I

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Speaker 1: think the challenge of the defense lawyer is unsurpassed. You

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Speaker 1: have a lot of flexibility, um, you have a lot

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Speaker 1: of a lot of tools you can work with, but

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Speaker 1: the power of the government is unrivaled. Just the amount

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Speaker 1: of resources at your disposal when you work for the

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Speaker 1: government is really remarkable. So both experiences were very rewarding.

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Speaker 1: I liked both. Any final thoughts, I think Goldman has

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Speaker 1: been dragged through the mud. Obviously. I think they paid

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Speaker 1: back a lot of money, and it will be interesting

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Speaker 1: to see how they try to rebound from this and

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Speaker 1: change their internal protocols and policies and procedures to really

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Speaker 1: prevent this from happening in the future. Thanks for being

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Speaker 1: on the show, Michael. That's Michael Weinstein, chairman of the

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Speaker 1: White Color Criminal Practice at cole Shots. This is Bloomberg

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Speaker 1: Law with June Brusso from Bloomberg Radio. My name is

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Speaker 1: Connie Dufree. I'm an exone who spent thirty years in

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Speaker 1: prison for a crime I did commit. I was locked

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Speaker 1: up for twenty two years, spent half of my life

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Speaker 1: basically in there from the age of I'm thirty five

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Speaker 1: years old and I just got exonerated after sixteen years

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Speaker 1: of wrongful of prisoner. The Innocence Project is well known

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Speaker 1: for getting people wrongfully convicted of crimes exonerate through DNA evidence.

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Speaker 1: But what happens to axonorees after their release from prison?

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Speaker 1: Do they get compensated for all the time they spent

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Speaker 1: behind bars? Well, lawsuits to get that compensation can be

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Speaker 1: a very long and a very expensive process. But now

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Speaker 1: litigation funders are making bets on wrongful conviction cases and

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Speaker 1: some are willing to give axonorees as much as one

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Speaker 1: million dollars in upfront cash. Joining me is Bloomberg Laws,

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Speaker 1: roy Strom Roy. In wrongful conviction cases, do the exonrees

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Speaker 1: have to prove their innocence or do they have to

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Speaker 1: prove the prosecution or police did something wrong. They do

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Speaker 1: have to prove that there was misconduct. The constitutional tortue

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Speaker 1: claim basically that their rights were taken away by wrongdoing

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Speaker 1: on the part of police or prosecutors, and it's a

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Speaker 1: pretty tough legal burden to hurdle. About twelve exonorees have

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Speaker 1: filed these types of civil lawsuits and about of those

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Speaker 1: received some type of monetary recovery, and about seven were unsuccessful.

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Speaker 1: The remaining suits are still pending. Give us a refresher

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Speaker 1: course on what litigation funding is and how much of

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Speaker 1: it there is out there. The litigation funding is basically

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Speaker 1: when investors put money into a lawsuit and a type

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Speaker 1: of deal where they'll be compensated really well if that

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Speaker 1: case wins, and typically they won't get anything back if

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Speaker 1: the case loses. And it's a very attractive asset class.

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Speaker 1: At the moment, it currently has nearly twelve billion dollars

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Speaker 1: in aspects under management among the big group of these

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Speaker 1: litigation funding companies, and how long have they been funding

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Speaker 1: wrongful conviction cases. People I've spoke with that that it's

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Speaker 1: become much more popular recently that wrongful conviction cases attract funding.

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Speaker 1: One of the reasons is there's just a lot more

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Speaker 1: of them being filed to the number of axonaries has

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Speaker 1: spiked since And it's the type of lawsuit that garner's

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Speaker 1: interest because the plaintiffs, these wrongful convictions victims have a

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Speaker 1: need for money, and their cases go on for a

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Speaker 1: long time, and there is the prospect of a big

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Speaker 1: settlement or verdict at the end of the day. So

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Speaker 1: in most cases do they give an initial payout to

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Speaker 1: the axon e e Yes, Usually the axonary will receive

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Speaker 1: some form of upfront payment. The numbers I heard could

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Speaker 1: range as high as a million dollars upfront. Other funders

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Speaker 1: were more likely to give a smaller number. One company

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Speaker 1: is giving a hundred thousand dollars upfront and charging a

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Speaker 1: much lower interest rate. But other funders will provide monthly

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Speaker 1: or you know, every other month sort of stipend to

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Speaker 1: help these people live. I know there can be some

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Speaker 1: spectacular multimillion dollar war words. Still, a million up fronts

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Speaker 1: strikes me as very high. Definitely, a million dollars is

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Speaker 1: a lot of money, and I think if a funder

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Speaker 1: gives someone a million dollars, they're pretty confident the case

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Speaker 1: will resolve in an award. Some of the funders I

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Speaker 1: spoke with said that they would not give that type

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Speaker 1: of money, in part because they didn't want to be

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Speaker 1: involved in handing someone a million dollars who's just coming

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Speaker 1: out of prison and might not know what to do

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Speaker 1: with it, or who would be better served in their

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Speaker 1: mind by having installments of payments rather than just a

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Speaker 1: giant lumpson. If the exonary loses his case or her case,

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Speaker 1: what happens to that initial payout. They keep the money,

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Speaker 1: If the case loses, they get to keep whatever it

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Speaker 1: was that they got up front. I take it the

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Speaker 1: interest rates very a lot, so the cost of the

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Speaker 1: money is really what I found to be one of

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Speaker 1: the bigger sort of controversies in the area, which is

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Speaker 1: that funders can request two to three times their initial investment.

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Speaker 1: So in the example, but where exonery receives a million

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Speaker 1: dollars up front, if they get an award, they might

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Speaker 1: be paying three million back. Some funders think that's too much,

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Speaker 1: and one funder I spoke with said they can't be

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Speaker 1: return at a hundred percent or less than a hundred

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Speaker 1: percent of their investment if there's an award. And then

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Speaker 1: there was a new company that was getting into this

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Speaker 1: as a sort of charity that would give a hundred

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Speaker 1: thousand dollars up front, and no matter how long it took,

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Speaker 1: if the case was successful, they'd only ask for eight

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Speaker 1: percent interest on that, So they would only get back

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Speaker 1: a hundred and eight thousand dollars regardless of the time

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Speaker 1: or the monetary award that was Ultimately one hundred thousand

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Speaker 1: dollars goes to thee. Do they give out more money

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Speaker 1: than that to fund the litigation itself? No. Most of

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Speaker 1: the lawyers who do this work operate on a contingency

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Speaker 1: CE basis, so the lawyers too aren't sentivized to win

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Speaker 1: um and the money from the funders typically goes directly

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Speaker 1: to the plaintiffs the exonoree. You know, some of these

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Speaker 1: cases are more than ten years old, and they're having

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Speaker 1: to go back and get evidence that's old people's memories, fade.

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Speaker 1: It sounds very difficult, but yet there have been a

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Speaker 1: lot of winning cases. There have been, and in part

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Speaker 1: it's because a lot of the evidence gets collected during

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Speaker 1: the stage of this person's criminal background where they've been

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Speaker 1: trying to get out of prison. So a lot of

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Speaker 1: times the evidence was collected and that's the evidence to

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Speaker 1: get them out, and that's the evidence that will ultimately

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Speaker 1: be used in the civil case. So some of these

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Speaker 1: exoneries will go to lawyers and they'll have a pretty

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Speaker 1: solid case set up already. Others it's a bigger battle

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Speaker 1: if they are in the position of needing to collect

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Speaker 1: that evidence or find people who will buttress their testimony

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Speaker 1: that the police did them wrong. Are the litigation funders

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Speaker 1: giving the exonrerees better deal then they normally give in civilification.

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Speaker 1: So the funders in civilifigation, a lot of the returns

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Speaker 1: are similar. In the wrongful convictions space, they asked for

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Speaker 1: a pretty uh, pretty much the same return, and some

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Speaker 1: funders I spoke with that that they weren't willing to

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Speaker 1: cut deals with exonrerees based on the fact that they're

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Speaker 1: really a sympathetic figure. It's still an investment opportunity there's

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Speaker 1: still too much risk for them, and so they do

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Speaker 1: ask for similar returns. Let's say a corporation would get

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Speaker 1: if if they invited an investor into, say a patent

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Speaker 1: infringement lawsuit. Fernando Bermudez use litigation funding, and he eventually

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Speaker 1: received about two fifteen thousand in advances from the litigation

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Speaker 1: finance companies. He said he ended up paying back more

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Speaker 1: than four hundred thousand. He got more than twelve million

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Speaker 1: dollars eventually from lawsuits. But yet he said that he

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Speaker 1: he felt exploited. Why does he feel exploited when you know,

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Speaker 1: obviously it worked out so well, right, Well, his case

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Speaker 1: ultimately worked out well. He did make a lot of

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Speaker 1: money down the line, um, but it took six or

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Speaker 1: seven years for him to get that money, and in

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Speaker 1: the meantime he was released from prison. New York State

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Speaker 1: fought his compensation claims for spending time behind bars that

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Speaker 1: he never should have. So he was forced to turn

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Speaker 1: to these litigation funders, and he was in a state

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Speaker 1: where that was his only option. And it's more expensive

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Speaker 1: money than you might get on regular loan, and he

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Speaker 1: felt that it was more expensive than he should have

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Speaker 1: been asked to pay, even though he acknowledged it was

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Speaker 1: really his his best option, the terms were still pretty high,

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Speaker 1: and there were also states that have compensation systems set up.

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Speaker 1: That's right, So there's thirty six states, and there's a

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Speaker 1: federal law that provides money to asonaries in sort of

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Speaker 1: a no fault way. Those laws provide much less than

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Speaker 1: these civil lawsuits that end up sometimes in these multimillion

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Speaker 1: dollars figures. These laws in many states provide maybe fifty

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Speaker 1: thou dollars for every year spent in prison. But those

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Speaker 1: two are not a guarantee. They require a lot of

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Speaker 1: administrative work, and they do require you to prove a

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Speaker 1: legal term called actual innocent and in the end, a

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Speaker 1: study from a law professor, Jeffrey Guttman, found that about

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Speaker 1: half of the years that agonnaries spent in prison in

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Speaker 1: states with those types of laws ended up not being

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Speaker 1: compensated for because the person couldn't prove their actual innocence,

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Speaker 1: or because they served so little time that it wasn't

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Speaker 1: sort of worth it for them to go for the

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Speaker 1: money um or in some cases the state bought the claims,

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Speaker 1: like in the case of Fernando Bermudez. These states aren't

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Speaker 1: always willing to admit that they owe these people the money.

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Speaker 1: Thanks Roy, That's Roy Strom of Bloomberg Law, and that's

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Speaker 1: it for this edition of The Bloomberg Law Show. Remember

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Speaker 1: you can always get the latest legal news honor Bloomberg

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Speaker 1: Law Podcast. You can find them on Apple Podcasts, Spotify,

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Speaker 1: and at www dot Bloomberg dot com, slash podcast, Slash Law,

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Speaker 1: and remember to tune into The Bloomberg Law Show every

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Speaker 1: week night at ten BM Wall Street Time. I'm June

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Speaker 1: Grosso and you're listening to Bloomberg