Cane’s Futile Last-Ditch Efforts Before Trial

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With most of Kyleen Cane’s motions to sever her trial and dismiss counts against her denied, it seems she’s running out of options.

Involved in a scheme to manipulate trading in four microcap stocks between October 2012 and July 2014, trading patterns resembling illegal pump and dump strategies, Kyleen Cane and her associates’ backs are against the wall with time running out as the trial date nears.

Cane has submitted several last-ditch efforts to help in her case, including objecting to details of prior business dealings between Discala and Cane (citing an attorney-client relationship), arguing that the manipulation patterns of stock from other companies is irrelevant, denying that her direction of trading Cubed (one of the microcap companies) stock was legal, arguing for the admittion of additional intercepted calls and texts to paint the narrative her way, and wanting certain witness testimonies excluded, arguing they are mini-trials against her.

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Despite her desperate tactics, the mountain of evidence weighs heavily against her, from her incriminating text messages and calls to her use of escrow accounts to misrepresent stock to her history of manipulating the stock price and volume of other companies not part of this case.

Cane’s best hope now is jury selection, of which she hopes her proposed questionnaire will help her get a favorable jury. Of note is the request for the addition of a question asking if the potential juror has had any prior negative experiences with an attorney (such as Cane) that would affect their ability to hear the case.

Even Cane knows dealing with attorneys like herself would leave a bad taste in people’s mouths.

Cane and her co-defendants go to trial on April 2nd, 2018.

Cane Seeks to Sever Her Trial From Co-Defendants

Cane’s lawyers filed a pretrial motion on September 15th to, among other things, have her trial severed from her co-defendants, arguing that defendants DiScala and Josephberg are allegedly involved in four pump and dump schemes while Cane is only involved with one.

Referencing a Supreme Court case, Zafiro v. United States, Cane’s attorneys cited Rule 14 of the Federal Rules of Criminal Procedure to justify severing her trial:

If the joinder of offenses or defendants in an indictment…appears to prejudice a defendant or the government, the court may order separate trials of counts, sever the defendants’ trials, or provide any other relief that justice requires.

Cane’s camp further contends that most evidence used against DiScala and Josephberg would be irrelevant at her own individual trial, not to mention that DiScala and Cane will “blame the other for at least part of the allegations contained in the indictment…each will effectively act as a second prosecutor at a joint trial.”

In addition to calling for the sever to undermine the arguments against her, she has also asked for the dismissal of the counts against her, stating they are duplicitous. These counts include 1) Conspiracy to Defraud the United States; 2) Attempt and Conspiracy to Commit Mail Fraud; and 4) Manipulative and Deceptive Devices. The counts are felony-level offenses.

Cane is currently in Nevada and required to give 24 hours’ notice before leaving the state. She is due to appear in court on 12/8/2017.

Kyleen E. Cane's Possible Connection to the Panama Papers

In the recent weeks, news of the so-called “Panama Papers,” a leak containing documents listing the financial details of thousands of offshore companies, has been circulating around the media sphere. Big names, including Russian president Vladimir Putin, British Prime Minister David Cameron, and Argentine superstar footballer Lionel Messi, have been found among the documents, and while the ownership of offshore business entities isn’t illegal in itself, some of these entities listed are shell corporations likely involved in fraud.

Shell corporations…sound familiar?

Details from the papers are still surfacing, but it remains a fact that Kyleen Cane and her firm, Cane Clark, LLP, once did business with former Panamanian President Ricardo Martinelli, now hiding in Florida as a fugitive from the Panamanian government for corruption. Martinelli, through his brokerage, Financial Pacific (which he is the primary beneficiary of), transferred $50,000 to Cane Clark, LLP on February 1st, 2010 and another $50,000 on April 23rd of that same year. Given Cane’s current charges for securities fraud and Martinelli’s history of graft, one can only imagine where those funds were going, but the transfer in itself was illegal, as Panama law prohibits sending money to unidentified third parties.

The question remains: is there a deeper connection to other names and entities in the Panama Papers? We shall find out when the papers are released in early May.

As for Cane’s case, prosecutors are currently undergoing re-discovery (against Cane’s wishes) and combing through over 44,000 documents on her smartphone for evidence, which could be as damning as anything found in the Panama Papers.

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Feds Hand Down Superseding Indictment to Cane and Her Co-defendants.

Superseding Indictment Against Kyleen Cane

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On November 2nd, 2015, the Feds filed a Superseding Indictment against Cane and her co-defendants including among other charges conspiracy to commit mail and wire fraud.  The update to the indictment mainly included 3 additional professionals, who were also arrested.  The complexity, scope, and pervasive corruption of lawyers and brokers is par for the course of a fraud involving Kyleen Cane.   (20151102 US v Cane Information Sheet20151102 Application for Leave to File Document Under Seal20151102 Superseding Indictment US v Cane Case No. 14-cr-00399-ENV20151104 US v Cane Unsealing Order Superceding Indictment) On November 4th, the complaint was unsealed and on November 20th, new defendants arrested, old defendants were again arraigned and plead not guilty. (20151120 US v Cane Superceding Indictment Arraignment & Status Conference) Three defendants Marc Wexler, Matthew Bell, and Victor Azrak have already plead guilty (obviously  cooperating) and are awaiting sentencing.

An overview of the schemes and defendants is also discussed in the FBI Press Release. Another article also covering the additional arrests of another attorney and registered brokers can be found here.

Page 6 of the Superseding Indictment provided an overview of the conspiracy to commit securities fraud and the schemes the defendants employed: “In or about and between October 2012 and July 2014, the defendants ABRAXAS J. DISCALA, also known as “AJ Discala,” IRA SHAPIRO, CRAIG JOSEPHBERG, also known as “Jobo,” KYLEEN CANE, DARREN GOODRICH, DARREN OFSINK and MICHAEL MORRIS, together with others, agreed to defraud investors and potential investors in CodeSmart, Cubed, StarStream and Staffing Group (collectively, the “Manipulated Public Companies”) by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, inter alia: (a) false and misleading press releases; (b) false and misleading SEC filings; ( c) fraudulent concealment of the defendants’ and their co-conspirators’ beneficial ownership; (d) engineering price movements and trading volume in the stocks; and ( e) unauthorized purchases of stock in accounts of unwitting investors.” 20151102 Superseding Indictment US v Cane Case No. 14-cr-00399-ENV

Page 16 of the Superseding Indictment briefly cited Cane’s role in one of the schemes, “During four telephone calls that day, May 23, 2014, the defendant ABRAXAS J. DISCALA’s, also known as “AJ Discala,” control of the price of Cubed’s stock is apparent. During a telephone call that morning, DISCALA and the defendant KYLEEN CANE discussed the jump in Cubed’s price to $7 per share, and CANE stated, in part, “We need to keep it back down now. We need to keep it back down.” Later that day, during a telephone call between DISCALA and Co-Conspirator 2, DISCALA stated, in part, “I talked to Kyleen [CANE], and we, we don’t want this. We would want 6.35 today, 6.30, something like that, and then let, let news rip it next week.” DISCALA also called Co-Conspirator 3, a corrupt investor whose identity is known to the Grand Jury, to explain the trading in Cubed’s share price, and stated, in part, “Yeah like .. .it just looks stupid! It went up, and up, and then it came back, you know-it’s like, look, if we ended at 6.30, we’re good. I wanna bring it back up to 6.55; 6.55 on Tuesday, which I can, with some news, right? And just keep stepping it.” Finally, during a telephone call with the defendant DARREN GOODRICH, DISCALA stated, “So Kyle’s [CANE] re-tweaking this thing to 6.35, I just wanted to let you know.” 20151102 Superseding Indictment US v Cane Case No. 14-cr-00399-ENV

Will Kyleen Cane run? Will she go to trial? Will she commit suicide? Will she plea? It’s anyone’s guess. 

Slideshow and Bankruptcy 341 Examination Audio with Kyleen Cane’s Long Time Fraud Girlfriend in Federal Court!

What could be more exciting than to listen to Jan Jardine Wallace lie in federal court than to see it with a slideshow of her and her fraud friends in France? I don’t know and I don’t care, let’s get this video above 1,000,000 views just because its more exciting then an egg!

Kyleen Cane’s long time girlfriend perjuring herself.

Jan Wallace’s 341 Bankruptcy Examination

Cane’s long time fraud girlfriend could not help but misrepresent her assets at her bankruptcy 341 examination, listen for yourself.

Listen to Jan Wallace perjure herself.

Cane’s Reply to Travel to Scotland And The Stupid Arguments Made By Her Attorney

Cane’s reply to travel to Scotland is here: 20150601 Cane’s Reply Re Mtn to Travel (123110801776).  The idea that Cane “poses no flight risk” is flatly laughable. She is 60 years-old and facing 20-30 years in prison. Moreover, she has spent the majority of her career working with Juanita Jardine “Jan Wallace” and Chloe Rita Jardine-Cutler to hide money at LOM Securities in nominee bank accounts. She has plenty of money to leave any U.S. assets behind without blinking an eye.  Moreover, ask yourself this simple question: “would you give up $5 million for a chance to live 5 years if you were faced with 30 years?”

Cane’s attorney argues that because he has “personally represented” other clients who haven’t fled the country, then the Court should trust THIS client, Ms. Cane.  “Indeed, I can represent to the Court that I have personally represented at least ten defendants in this District accused of committing “financial crimes” – often very serious ones – and none of those defendants have ever fled prosecution despite the very serious allegations lodged against them. Therefore, to the extent history is any guide, it favors the defendant here.”

This is stupidest argument I’ve ever heard for modification of bond; I wonder how much Cane paid for this. He further writes, “The government has cited no facts to suggest that Ms. Cane will act any differently than the thousands of other defendants accused of financial crimes in this district and others who have not fled prosecution.”  This blog contains many facts which suggest that Ms. Cane will flee.

Ms. Cane’s attorney writes, “An opportunity to flee indeed exists. But the government offers no evidence that Ms. Cane is likely to flee this prosecution. Indeed, if she wanted to abscond, Ms. Cane does not need to travel to Scotland to do so. She could simply drive across the border into Mexico. Or she could fly her plane across the border. She has not done so, and that should give the Court confidence that she will not attempt to flee from Scotland if she is permitted to go there for a few days.” When Ms. Cane does abscond, it will be a sophisticated disappearance involving smoke and mirrors and deflection.

Kyleen Cane Seeks to Modify Conditions of Her Release to Leave the Country

I have to admit that I threw up in my mouth reading the pleadings in Cane’s Motion to Modify Conditions of Release to Permit Travel to Edinburgh, SCOTLAND! (20150526 Mtn to Modify Conditions of Release to Permit Travel to Edinburgh, Scotland)  (Exhibit A: 20150526 Exhibit A Cane Appearance Bond, Exhibit B: 20150526 Exhibit B Cane’s Passport Surrender Receipt, Exhibit C: 20150526 Exhibit C Recording Cover Page Confession of Judgment $1m Bond) In it, she argues that her son needs help moving his furniture into the dorm rooms. Since Cane has a plane and has been flying around the U.S. without incident and that since she posted $1m in property for her bond – she should be able to renew her passport and travel to Scotland to move furniture. Jesus.

The motion states that Cane has enrolled in microbiology courses for a new career “when the case is over”.  Sixty-year-old Cane, who has ruined the financial livelihood of so many people can be so callous to think about her “next career”. Her next career should be serving her sentence of 20-30 years, is that even enough?

To be clear Cane partners with Jan Wallace (Juanita Jardine) and her daughter Chloe Jardine-Cutler to cache money in Bermuda and Cayman Islands at LOM Securities.  (20120216 MP IRS Form 211 (all)) Chloe, of Chloe Group of Companies has even been staying with Cane.  Cane has been planning on escaping the U.S. when she is caught for securities fraud and has lined the pockets of Wallace-Jardine’s offshore shell companies for when that day comes.  That day is here.

How Cane is able to be released on pre-trial is beyond me: she has/flies a plane, she has tens of millions of dollars at her disposal, she has aided dozens of individuals commit wire fraud, money laundering, securities fraud, and tax evasion.  There are many people invested in helping Cane disappear than gambling with her turning evidence and negotiating a plea in exchange for a 5K1.1 (http://www.ussc.gov/guidelines-manual/2011/2011-5k11).  The government’s opposition states, “As described in the Indictment, Cane is charged with participating in a stock market manipulation scheme, and the evidence against her consists of, among other things, her own statements regarding coordinated purchasing of the manipulated stock captured over a court-authorized wiretap. If convicted, the government estimates that the applicable range of imprisonment under the current version of the United States Sentencing Guidelines for Cane would be 262 to 327 months, assuming Cane falls within Criminal History Category One.” (20150528 Opposition to Cane’s Mtn to Modify Conditions of Pre-Trial) Footnote, This sentencing range assumes a total offense level of 39, based on a base offense level of 7 (U.S.S.G. § 2B1.1(a)(1)), plus 28 levels for an intended loss of over $200,000,000, (U.S.S.G § 2B1.1(b)(1)(M)), plus 2 levels for the use of sophisticated means (U.S.S.G. § 2B1.1(b)(10)(C)), plus 2 levels for abuse of a special skill. The intended loss is based on the market capitalization of the manipulated stock at its peak of approximately $200 million.

262 to 327 months, 262 months is 21.83 years and 327 is 27.25 years. Cane’s birthday is October 22nd, 1954, she is 60 years old. Does anyone think that Cane will return to the U.S. facing 20-30 years? What is the consequence for Cane to try to run and at least live out 5 years or 10 years on the lam? She is going to die in prison, the time for her to run is now. 

The government argues, “At the detention hearing held in this district on July 29, 2014, the transcript of which is attached as Exhibit A, Magistrate Judge Reyes previously determined there are conditions of release that will reasonably assure the appearance Cane as required: those conditions included surrendering her passport, signing a $1,000,000 personal recognizance bond, co-signed by two others, and posting real property as collateral. Over the government’s objection, Cane has been permitted to travel freely in the United States, provided she provides advance notice to Pretrial Services in Nevada, and she is permitted to fly her own plane within the United States. Ex. A at 8-9.” (20150528 Exhibit A Transcript of July 29th, 2014 Arraignment of Kyleen Cane) If anyone thinks that an attorney under indictment has business to conduct in the U.S. that requires flying around, I’m disappointed in you.  Cane has certainly been planning movements of money, preparing where to flee to, and setting up who is to handle her affairs in the U.S..

What I found ridiculous and somewhat unbelievable is the following from the government’s opposition, “Also, when she was arraigned in New York, it appeared, based on her statements to Pretrial Services, that Cane had personal assets in excess of $5 million plus part ownership of business assets estimated to be worth more than $13 million. Ex. A at 7-8.  The one piece of real property that she posted to secure the $1 million bond appears to be worth less than $400,000. ”  If anyone believes that Cane does not have a significant stockpile of cash which she has secreted away with Wallace,  they are clearly unprepared for a rude awakening.  For Cane to have worked in dozens of publicly traded companies (penny stocks and otherwise), a decade long partnership with Wallace, and had a career amounting to $5million is simply not credible. The Davi Skin securities fraud alone was a $5m boon to LOM Securities nominee accounts. Cane architected a stockpile of funds, and the government has done nothing to prosecute money laundering co-conspirators Juanita Jardine and Chloe Jardine-Cutler and others that will help Cane when she is on the run.