Occupy Wilmington Not Wall Street

James Li has been on the run for eight years. His crime? Forging fake purchase orders to inflate his company’s sales and dumping 93 million worthless shares on the market.

How much did James Li and his partners take in? Over a billion dollars. Where is James Li now? You can find him but you can’t catch him. He was last seen in Taiwan but can’t be extradited and, in any case, the Attorney General never bothered to charge him with forgery.

Bloomberg had this story eight years ago. It was just a bad time to put it on the back page because one of James Li’s partners was on the front page. Roll back the clock to the crash of 2008 and the Madoff Ponzi scam and consider what would have happened if James Li and Citicorp were caught with a truck load of forged documentation they were trying to pass off as authentic and legitimate sales transactions.

This is all a matter of public record and the facts are easy enough to verify. Google should do the trick. James Li and Citicorp engaged in massive forgery and egregious fraud and tried to cover up the evidence of the Syntax-Brillian Ponzi scam by filing for Chapter 11 protection in Delaware’s infamous Bankruptcy Court.

When you’re trying to dress up a Ponzi scam in the garb of a legitimate company that can be reorganized, it takes more than two to tango. So you have to throw in the usual suspects – a diabolical Greenwich hedge fund managed by two ex-Goldman Sachs sharks and a legion of lawyers from the most influential law firms in the country. Then you’re good to go to Delaware where Bankruptcy judges are exceptionally ambivalent about forgeries.

Forgery is one of the simplest crimes to prove to a jury. Unfortunately, Bankruptcy courts have no juries and the judges who preside over corporate bankruptcy proceedings are only tasked with the administration of federal bankruptcy statutes. They don’t do forgery and they don’t do racketeering. But when they come across evidence of forgery, they are supposed to report it and refer the matter to the Attorney General.

The Chief Judge of the Bankruptcy Court in Delaware is one Brendan Shannon. Samples of the Syntax-Brillian forgeries have actually passed through his hand. I was there in Court when an independent examiner handed out copies of the forgeries and explained to the judge that they did not reflect actual sales and that hundreds of millions of dollars in company assets had been siphoned off to Taiwan. That was eight years ago.

The hard evidence of forgery didn’t matter to Shannon. He was answering to a higher law – the law that governs the Influentia – a class of Americans that operates by a different set of rules and is not subject to any scrutiny – a new breed of financial vultures that our governors have granted absolute immunity.

Forty percent of corporate bankruptcies are filed in Wilmington, a decaying city of 70,000 along the Brandywine River.  Wilmington is the largest city in Delaware and, at first glance, it is the last place you would think of as the corporate bankruptcy fraud capital of the free world.

One of the things that distinguishes Wilmington is that the Acela Express from New York actually stops there.  If you spend a morning at the Amtrak station, you’ll see some of the most distinguished corporate bankruptcy lawyers passing through the station on their way to 824 Market Street where they find Brendan Shannon presiding over a court where only the lawyers of the Influentia are expected to make an appearance. And if they appear with forged documents, they can count on Shannon to stamp them as authentic and be done with their business.

On July 8, 2009, Syntax-Brillian, a company that represented itself as a manufacturer of Olevia Branded HDTVs filed a Chapter 11 petition with hundreds of supporting documents. The next morning – a hearing was held before Brendan Shannon. James Li, the CEO who was the architect of the Ponzi scam was not present at the hearing. Li had been replaced a week earlier by Gregory Rayburn – an interim-CEO and a veteran of the bankruptcy fraud industry. Citibank didn’t make an appearance either – they just sent their lawyers who also represented Silver Point, a hedge fund run by Robert O’Shea and Edward Mule, two ex-Goldman Sachs partners who were no strangers to Wilmington’s bankruptcy court.

Aside from Gregory Rayburn, the interim-CEO, there were a dozen corporate bankruptcy lawyers from three of the largest law firms on Wall Street. Victoria Counihan, the lawyer who signed the Chapter 11 petition was a former colleague of Brendan Shannon. Counihan is now the Deputy Attorney General for the State of Delaware. Her signature was enough to seal the deal. The judge took less than an hour to accept whatever evidence the lawyers had concocted to cover up the forgeries and conceal the fact that Syntax-Brillian was a Ponzi scam.

In the big scheme of things, Syntax-Brillian was a small transaction. It was an expedited Chapter 11 petition and the plan was to wrap it up in nine weeks and leave shareholders out in the cold. And the authors almost got away with the plot until a few of the swindled shareholders showed up in Court to ask for an independent examiner. Three months later, an examiner was appointed and quickly discovered the forged documentation.  The Ponzi scam had unraveled in the midst of the bankruptcy proceeding but Brendan Shannon was not convinced.  The judge had embraced the forgeries and had signed off on multiple orders that he could not walk back. He fired the examiner and dismissed the evidence of forgery as “preliminary findings.”

A few months ago, Brendan Shannon was forced to recuse himself amid accusations that he had actively engaged in concealing and destroying forgeries in his legal custody.  It was the third time I tried to recuse him. Instead of confronting me in a recusal hearing, he re-assigned the case to another crooked Delaware judge, Kevin Carey. That’s how things work in an administrative court with no juries. Judges use their magic wands to convert forged documents into authentic documents and when they are confronted with the forgeries, they toss the case to another Delaware judge.

For eight years, Shannon has maintained the fiction that James Li never forged any purchase orders.  Shannon wouldn’t budge even after the Securities and Exchange Commission inspected copies of the forgeries and determined that James Li forged purchase orders representing $400 million to inflate the sales reported on SEC filings. And what did the SEC do with the evidence in their hands? They charged James Li with ignoring red flags – like the red flag that says “Don’t forge documents to falsify your books and records.” The SEC really had no choice in the matter. They had allowed a Ponzi scam to go public and file seven Quarterly reports with fabricated numbers backed up by forged documentation and then they had stepped aside and allowed the Ponzi scam to file a Bankruptcy petition with more fabricated numbers backed by more forged documentation.

Loretta Lynch and the DOJ are also fully informed of the forged documents and how the forgeries were used to pull off the Syntax-Brillian Ponzi scam and how Brendan Shannon covered up the scam by sweeping the forgeries under the carpet. Even the FBI has samples of the forged documents. So why hasn’t anybody been indicted for forgery? You can ask them but they’ll never tell you. If they told you, the corporate bankruptcy fraud industry would collapse and nobody wants that to happen – especially the Influentia.

Cui Bono?  Citibank for one. Edward Mule and Robert O’Shea, the hedge fund masters of the universe who manage Silver Point and the lawyers from Greenberg Traurig who filed the Chapter 11 transaction. If the name sounds familiar, Greenberg Traurig was the home of Allan Abramoff.

And who loses when judges break bad? Everybody. But some lose more than others. In the case of the Syntax-Brillian Ponzi scam, tens of thousands of innocent victims walked away without ever knowing they were victims of an international white collar criminal gang. Only the handful of the victims who followed the Syntax-Brillian bankruptcy proceedings have been informed that their money was stolen. The SEC takes the position that it doesn’t have to inform anybody about anything and the DOJ and the IRS don’t want to rock the boat and have rejected all appeals to send out letters to the victims.

Does it really matter if the victims know? Well, for one thing, Ponzi scam victims are entitled to instant tax relief. That might not make up for all their losses but in some cases the tax relief can be quite substantial. One dentist in New York managed to recover over $500,000 in tax relief. All it took for him to get the tax relief he was entitled to was a phone call to the Liquidation Trustee for a letter confirming that he was a victim of forgery and egregious fraud.

This is more than a story about unbridled greed; it is a story about how the Influentia can steal from middle class investors who don’t have a clue about what goes down in Delaware’s Bankruptcy Court right under the nose of the Attorney General and the SEC.

If you want to rattle Wall Street and cut the Influentia down to their natural size, occupy Wilmington. That’s where you can dig up enough dirt to nail Citicorp, Silver Point and the barons of the Bankruptcy Fraud industry and make them cough up tens of billions of dollars stolen from the accounts of hard working Americans and Canadians.

You won’t find this story in Bloomberg or the Wall Street Journal. The markets are not only rigged – you can’t even tell if you’re buying real shares or worthless Ponzi scam securities backed by a truck load of forgeries. I hope that someday, the Occupy Wall Street activists will take the fight to Wilmington.  That’s where we can literally bankrupt Citicorp and their hedge fund cronies. If you want a transfer of wealth back to the middle class – start with indicting Brendan Shannon and you’ll see billions of dollars trickle down to the victims of the Syntax-Brillian Ponzi scam. You can bet your last dollar that dozens of other Ponzi scams lie buried in the archives of Delaware’s Bankruptcy Courts.

Occupy Wilmington not Wall Street.

Ahmed Amr is the author of How to Steal a Billion Dollars – the Confessions of James Li. The initial draft is available free of charge on TooBigToSanction.com. He can be reached at: Montraj@aol.com. Read other articles by Ahmed.