Eight years after the US Attorney for the Eastern District of New York announced that Stan Lee Media Co-Founder Peter Paul had been indicted for causing the collapse of Stan Lee Media and more than $25 million in shareholders’ losses to his company through his violation of SEC Regulation 10(b)5, the government admitted in federal court in New York on June 25, 2009 that it could not prove that Paul was responsible for any shareholders losses, let alone the collapse of Stan Lee Media.
After an extensive PR campaign begun on June 12, 2001 by the previous two US Attorneys for the Eastern District of New York, Vinegrad and Mauskopf, accusing Peter Paul of a “classic pump and dump” of his stock causing his dot com company with Spider Man creator Stan Lee to fail and causing millions in shareholder losses, the government quietly admitted in federal court at Paul’s belated sentencing on his 10(b)5 violation that
“There is no loss to those individuals (Stan Lee Media shareholders). Yes.”
Winston Chan is the fifth Assistant US Attorney to be assigned to USA v Paul, Gordon, Kusche, Pittsburg, since it was announced with great fanfare by US Attorney Alan Vinegrad at a press conference with FBI and US POstal Inspector officials in June, 2001.
Kenneth Breen was the Assistant US Attorney under Vinegrad who directed the indictment of Paul, and had him arrested by Interpol in Brazil on August 3, 2001 for extradition while Paul was cooperating with the Assistant Attorney General Chertoff in an investigation of Hillary Clinton campaign frauds, and while Paul was awaiting confirmation of Chertoff’s personal intervention into his prosecution in Hillary’s “home” state.
The New York indictment came a week before Paul filed a $10 million civil fraud suit against Bill and Hillary Clinton for business and FEC frauds he alleged they perpetrated on him when Bill Clinton induced him to become Hillary Clinton’s largest ($1.9 million) donor to her 2000 Senate campaign.
Paul’s two year extradition process was extended by Breen’s manipulation of Brazil’s extradition laws, and Breen’s subsequent refusal to allow Paul to cooperate with Noel Hillman, Director of the Dept of Justice’s Office of Public Integrity, in the prosecution of Hillary Clinton’s finance director, David Rosen, without Paul pleading guilty to the 10(b)5 indictment and posting a multi-million dollar bail Paul could not afford, compromised the Justice Department’s investigation into Hillary Clinton’s role in the offense her campaign finance director Rosen was indicted and tried for.
Paul’s ability to prove Hillary Clinton’s personal role in the frauds attributed solely to Rosen, for which her campaign Treasurer was later fined by the FEC, was further thwarted by Breen’s refusal to disclose or share a smoking gun video tape made by Paul in 2000 which Breen acquired from Paul’s offices in 2001, capturing Hillary Clinton admitting of her knowledge and participation in directing and accepting the $1.2 million donation Paul made to her campaign at Bill Clinton’s request as her agent.
After leaving the US Attorney’s office in 2005, Breen was coincidentally hired by the New York law firm Paul Hastings in February, 2007 after it discovered Paul was assisting shareholders of Stan Lee Media in filing a $1 billion suit against Marvel Entertainment, one of Paul Hasting’s largest clients, for defrauding Stan Lee Media of hundreds of millions in profits it derived from Stan Lee’s Marvel creations, which Lee assigned to Stan Lee Media.
During two hearings held in New York Federal Court in June and July, 2009, Mr Chan admitted to Federal Judge Leonard Wexler that the government could not prove Peter Paul caused ANY losses to shareholders.
When queried by the Court, Mr Chan said:
MR. CHAN: Mr. Conway [Peter Paul’s attorney] had suggested that the losses with respect to investors was not sufficiently quantifiable... And I took a look at the matter and I agreed with him.
THE COURT: Where does the government stand?
9 MR. CHAN: Whether or not the losses are due to the stock, the falling stock price, is ..the result of [Peter Paul’s] actions, is not something that we can prove.
17 THE COURT: Do you feel there is no loss?
18 MR. CHAN: There is no loss to those individuals. Yes.
Interestingly, the government withheld that admission and correction of its allegations from the probation office and the court for the four years since it announced that Paul’s guilty plea to violating one count of SEC Regulation 10(b)5 was an admission that Paul had caused more than $25 million in losses. It failed to disclose that its previous statements were not legally supportable until the day of Mr Paul’s sentencing.