A federal judge has postponed sentencing of two former CDR Financial Products Inc., employees until after the bid-rigging trial against former Bank of America executive Phillip Dennis Murphy, which is slated to start Feb. 3, 2014.
Daniel Moshe Naeh and Douglas Goldberg, who pleaded guilty in 2010 to participating in a conspiracy to rig bids for municipal bond investment contracts, will now be sentenced on March 20, 2014, according to a March 4 order from Judge Harold Baer of the U.S. District Court for the Southern District of New York.
The postponement will allow Naeh and Goldberg to testify in the trial against Murphy before being sentenced, U.S. attorneys said in court papers.
Murphy, who was Bank of America’s managing director of municipal derivatives products, was indicted in July 2012 for his role in the scheme and charged with fraud and conspiracy.
“The requested [postponement] will allow Mr. Goldberg and Mr. Naeh to fulfill the terms of their cooperation agreement and enable to government to present the court with all the facts relevant to their sentencing,” the U.S. attorneys said.
Goldberg and Naeh were among six cooperating witnesses slated to be sentenced April 11.
The others are former UBS AG banker Mark Zaino and former CDR employees Zevi Wolmark, Evan Andrew Zarefsky and Matthew Adam Rothman.
U.S. attorneys said they do not wish to postpone any other sentencing hearings.
According to court papers, prosecutors told Judge Baer at a meeting in December that they intend to call some of the six defendants to testify as witnesses in the trial against Murphy.
They therefore requested that Baer postpone sentencing of any possible cooperating witnesses. Baer denied the request, but allowed prosecutors to make the request again after Murphy’s trial was scheduled, say court papers.
On Feb. 26, Judge Max Cogburn of the U.S. District Court of the Western District of North Carolina in Charlotte set Murphy’s trial date for Feb. 3, 2014.
Since 2010, 13 individuals have pleaded guilty to participating in the scheme and six were found guilty by juries in 2012.
Murphy is the only one of the 20 who have not pleaded guilty or been found guilty.
Prosecutors alleged that the CDR staffers gave employees at dealer firms “last looks” at other firms’ bids on investment contracts, allowing certain dealers to win bids at artificially-low prices. In return, dealers paid kickbacks to CDR in the form of fees, said prosecutors.
In addition to the four former CDR employees to be sentenced April 11, CDR founder David Rubin and his firm are to be sentenced March 22.
Other upcoming sentencing hearings include those for former Bank of America employees Douglas Campbell and Brian Zwerner, which are scheduled for March 15 and July 19, respectively.
Former J.P. Morgan Chase & Co., employee James Hertz is also slated for sentencing on March 15. No date has been set another J.P. Morgan employee, Alexander Wright.
Martin Kanefsky, a former chief executive of Kane Capital Strategies Inc., is set for sentencing April 3 and three former UBS bankers found guilty last year, Peter Ghavami, Michael Welty and Gary Heinz, are to be sentenced March 19.
Four defendants have already been sentenced to jail time.
They include Steven Goldberg, Peter Grimm and Dominick Carollo, former executives at GE Funding Capital Market Services Inc., who were found guilty by a jury last May. Goldberg received four years in prison and Carollo and Grimm each received three years. They are all appealing the verdict.
Cooperating witness Adrian Scott-Jones, who worked as a consultant to Tradition (North America) and EuroBrokers, was sentenced to 18 months in prison in early January.
