We have seen the destruction of multiple companies by Bain Capital and Goldman Sachs Vulture Capitalists, including eToys, Toys R Us, KB Toys, and Fingerhut. Now, we can add Gymboree to that list. Over and over again it’s the same schemes that this reporter has been chronicling for the past 2 years.
In other words, it’s rinse wash repeat — companies are loaded up with debt so that the hedge fund can cash out then put through what’s known as a “leveraged buyout.”
As BoingBoing notes on Gymboree, it is the same story repeating because regulators and those who are supposed to be the figureheads of justice show willful blindness. In the case of Gymboree — just like eToys, Toys R Us and KB Toys — incompetent, inexperienced grifter CEOs, and sometimes those on the inside of the scheme, help run the company into the ground, then into liquidation. Afterward, those who helped run the company to the dumps get paid in retention bonuses and normal workers are formally out of a job and denied severance pay by the hedge funds.
Toys R Us employees are still fighting for severance pay and, sorry to be the bearer of bad news, but they will probably never get it, just like the millions of workers from other companies who have been systematically destroyed for ill-gotten gains.
To put it this way, If you stole loaves of bread, or sold bags of weed (legal now, in many places) you could get prison time.
However, if you rip off Mattel and other companies for billions casually destroying the retail toys industry (KB, Toys R Us and eToys) — it is okay, because you are Goldman Sachs personnel in cahoots with Bain Capital vultures.
When you are with Goldman Sachs and Bain Capital, destroying companies and doing Bankruptcy Frauds, you need not worry, because the Department of Justice and SEC won’t even investigate you (much less indict) the individuals involved in the crimes. Very rarely do we see anyone punished for financial crimes all over the world, as the previous iteration in this series entitled: “Big Banks Toxicity: A Global Plague” documents.
This type of behavior has happened all too often with Bain Capital and Goldman Sachs ripping off investors and employees alike in various schemes from Mattel’s failed merger deal to the illegal seizure of eToys by court-approved charlatan Paul Roy Traub robbing whistleblower Laser Haas of his position as CEO and liquidator, whom played both sides pretending not to know the auditor (liquidator) Barry Gold while working in “good faith” of investors.
In reality, Barry Gold and Paul Roy Traub were friends and colleagues. In fact, Barry Gold hired Paul Traub to work as the law firm for the bankruptcy case of Stage Stores, then he later went on to help Traub fleece eToys and KB Toys. Which in the case of KB Toys, Michael Glazer was simultaneously the CEO of Kb and Director of Stage Stores at the same time in 2000 through 2005 when all the crimes of eToys and KB took place. An obvious conflict of interest since Bain Capital was involved in the liquidation of KB Toys.
Bain Capital/KB via Michael Glazer moved over to buy eToys for $5.4 million, pretending to be opponents of Barry Gold, Paul Traub, and MNAT.
The crooks were able to circle around the entire case of eToys and KB by lying under oath, dozens and dozens of times, concealing the fact that Barry Gold and Paul Traub worked for Glazer at Stage Stores, and that MNAT handled the Delaware merger of The Learning Company, with Mattel, also owned by Romney and Bain.
Mattel was merged in Delaware where Colm Connolly was the federal prosecutor.
Then Colm Connolly switches sides to become a partner of MNAT and, coincidentally, the Delaware Department of Justice doesn’t pursue any investigation into Mattel’s public company billion-dollar losses!
Also, as a result of the merger of Learning Company with Mattel, Mitt’s contingency reportedly got 12 million shares of Mattel stock.
In 1997, Goldman Sachs aided Thomas Lee Partners, Mitt Romney and Bain Capital to get involved with “The Learning Company” through a private equity firm.
Two years later in May 1999, the MNAT law firm (working for Goldman Sachs and Bain Capital in various deals) assisted “The Learning Co” to merge with Mattel toys.
This resulted in instant, catastrophic losses, in the billions, transpired in what is known to be one of the worst corporate mergers of all time. As Andrew Cave of the Telegraph reported,
Haas notes that the large Mattel stock ownership is possibly how Bain Capital kept getting inside track to win auctions of KB, FAO, and eToys, as Bain Capital marched toward ownership of Toys R Us.
What’s more is with Wall St serial whistleblower Laser Haas we have immense proof because KB Toys went through bankruptcy multiple times and somehow always ended up back in Sachs’ and Bain’s hands (which if it didn’t go well the first time, it probably wasn’t going to be good the second time.) Haas was even asked to be a part of these Bankruptcy Rings and denied the invitation.
Laser was able to get Matt Taibbi to report on the KB case in the September 2012 Rolling Stone cover story, “Greed and Debt.”
Shortly after that, Lawrence Friedman (the Deputy Director of the DOJ who promised Laser to halt the crimes) resigned, and the crimes, cronyism, cover-ups, and retaliation (all RICO “predicate act” crimes) escalated against whistleblower Laser Haas to an even further extent.
Haas blew the whistle on the KB case fraud of Michael Glazer paying himself $18 million and also giving Bain Capital $83 million prior to KB CEO Glazer filing bankruptcy of KB.
[RELATED: Goldman Sachs Is Split In 2 – Corrupt Culture]
As a result of seeing how often Laser has nailed organized crimes and how many facts he has cited, this reporter refers to Laser Haas as a “serial” Wall St whistleblower. If not one of the only Wall St whistleblowers in history who has actually had an effect.
Mattel, Tom Petters (Petters Ponzi), Fingerhut, Marc Dreier, and eToys victims continue being ripped off, for 20 years, for billions of dollars. This reporter has written about those cases extensively for the past year – here, here, here and here.)
This reporter has done vast research on Laser’s allegations for more than a year. Of those efforts, I’ve published over a dozen articles that well documents Goldman Sachs and Bain Capital are partners in billions of dollars of unjust enrichment by Wall Street frauds.
Mitt Romney pretends like he has no idea these types of dealings going on, but the fact is that before he “retroactively retired” from crimes, Mattel was ripped off for billions of dollars in the Learning Company merger.
Sachs and Bain fleeced billions from the Learning Company merger with Mattel in 1999, and bankruptcy ring racketeering of the Fingerhut and eToys cases later on (here).
In each of those instances, Colm Connolly (now a federal judge in Delaware) was a Federal prosecutor who also switched sides, back and forth, as a partner with Sachs and Bain’s law firm of MNAT.
Both Haas and eToys were represented by MNAT’s partner, Greg Werkheiser.
Unfortunately, Greg Werkheiser and other MNAT law firm partners betrayed their court-approved clients while Colm Connolly betrayed the public’s trust to protect the success of the grand larcenies, as a gatekeeper preventing prosecution.
On the side of Goldman Sachs, the corrupt toxic culture that its CEO, David Solomon, seems to want to ignore is spreading rapidly with lack of accountability, despite several employee whistleblowers over the years stating the obvious facts about the shady nature of Sachs.
Both Gregory Smith and Tim Leissner are on public record stating that Goldman Sachs betrayal of a client’s trust is an encouraged “culture” for profit’s sake.
Goldman Sachs’ former executive, Greg Smith, resigned by riveting letter to The New York Times revealing Sachs’s toxicity.
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.[…]It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
If that’s not enough, in 2010 Goldman Sachs director Rajat Gupta told hedge-fund manager Raj Rajaratnam that famed investor Warren Buffet made an investment in the bank in 2008 before that information was made public; both were tied to an insider-trading scandal involving a $5 billion investment, NPR reported at the time.
Also happening that same year in 2010, the SEC filed a lawsuit against Goldman Sachs, stating Sachs vultures misled its client investors by selling them a subprime-mortgage investment that was secretly designed to lose value. Instead of the bank being shut down or investigated for fraud, Sachs sued the SEC saying the investigation was political. The SEC was later cleared of wrongdoing and Sachs agreed to pay $550 million to the Securities and Exchange Commission, one of the largest penalties ever paid by a Wall Street firm, to settle charges of securities fraud linked to the mortgage investments, The NY Times reported.
Three years later in 2013, former Goldman Sachs Vice President Fabrice Tourre nicknamed “Fabulous Fab” was found liable for fraud for his role in a wrecked 2007 mortgage deal that cost investors $1 billion. Fab was accused by federal regulators of misleading the investors about subprime mortgage securities that he knew were doomed to fail, NYDailyNews reported.
David Solomon made the mistake of publicly stating Goldman Sachs culture is cleaned up, but that remark doesn’t hold water.
Tim Leissner stated in his guilty plea, what he did was “very much in line of its culture of Goldman Sachs to conceal facts from certain compliance and legal employees.” (archived)
Leissner pleaded guilty to conspiring to launder money and violating the Foreign Corrupt Practices Act by paying bribes to Malaysia and Abu Dhabi officials, as well as circumventing Goldman’s internal accounting controls, according to prosecutors.
Leissner pleaded guilty to conspiring to launder money and violating the Foreign Corrupt Practices Act by paying bribes to Malaysia and Abu Dhabi officials, as well as circumventing Goldman’s internal accounting controls, according to prosecutors.
Laser Haas reported Colm Connolly, and others, for being corrupt federal agents, to the Public Corruption Task Force. The Complaint by Haas was filed/time-stamped on December 7, 2007 (see the actual filing – here).
Just before the California, United States Attorney was required to answer Laser Haas’s time-stamped Complaint, chaos ensued. Instead of answering the Complaint, the Public Corruption Task Force was shut down (as is reported by the Los Angeles Times March 2008 article “Shake-up roils federal prosecutors”).
As if that wasn’t bad enough, California U.S. Attorney, Tom O’Brien (a GW Bush Air National Guard fly-buddy), actually is reported to have threatened career federal prosecutors to keep their mouths shut, about the reasons why!
What we do know, is then-Senator Joe Biden blocked Colm Connolly from becoming a federal judge (nominated by GWB).
It is also a fact that this was the same time a never-ending-POTUS-wannabe was making his first attempt to get into the White House.
Furthermore, according to court papers, the Malaysia scheme began back just around after the shutdown of the Public Corruption Task Force.
In 2009, 1MDB began according to the Malaysia prosecutors. Then, between 2012 and 2013, Leissner conspired with two others (Roger Ng Chong Hwa, and one unnamed individual) to acquire and retain business from 1MDB for the benefit of Goldman Sachs.
They purportedly promised bribes and kickbacks to government officials in Malaysia and Abu Dhabi using misappropriated and embezzled proceeds from 1MDB bond transactions. Sachs’ new CEO David Solomon responded concerning the debacle, stating:
“We believe our culture and our processes around our due diligence and compliance was strong at the time and is even stronger today,” Solomon said in a year-end message recorded for Goldman’s employees. “While we understand the anger and skepticism, we do not believe that the criticism directed at us accurately reflects who we were then or who we are now.”
Whistleblower Laser Haas took great umbrage with Sachs’ new CEO defending the “culture” of the company. So Laser Haas sent David Solomon a letter that this reporter published.
[RELATED: Wall St Whistleblower Informs Goldman Sachs CEO Solomon Of Toxic Culture]
Haas contends that, for there to be a good faith culture at Goldman Sachs, then the company must split in 2 with its Machiavellian part that has been doing organized crimes and obstruction – for the last 20 years – and the goodie two shoes good culture boys who rip off companies legally!
Interestingly enough, following Laser’s letter, Sachs CEO reported that Goldman’s number one lawyer, Gregory Palm, quit!
Due to those facts that are incontrovertible, this means that until Goldman Sachs new CEO, David Solomon, addresses the eToys related cases and talks to Laser Haas, any arguments about a new, clean, “culture” at Goldman Sachs is completely bogus.
Perhaps Solomon’s announcement of Gregory Palm quitting as Goldman Sachs top legal counsel, is the CEO’s way of beginning the cleaning of the house?
One thing is for sure, Gregory Palm was a SullCrom associate.
Another fact well known is SEC Chairman Jay Clayton was also a SullCrom associate.
SullCrom is the defense counsel of Goldman Sachs in the eToys case.
A racketeering eToys case with SullCrom, aiding Sachs, Bain Capital, MNAT and Paul Traub all lying under oath to keep Laser Haas out of federal court. Because of the blatant conflicts of interest having to do with the case that would make any reasonable faithful prosecutor jump at the case. Perhaps if they did then Toys R Us and Gymboree would still be solvent companies instead of going through bankruptcy/liquidation.
Laser’s letter to David Solomon focused on 20 years of fraud, cover-ups, and obstruction of justice by Goldman Sachs’ two major law firms of SullCrom (where SEC Commissioner Jay Clayton was a partner and Clayton refuses to address the eToys case.) The letter also mentioned Delaware Law firm MNAT (which is where newly confirmed Delaware District Court Judge Colm Connolly was a partner of MNAT).
As head of eToys, Laser Haas authorized a lawsuit against Goldman Sachs for Sachs orchestrating a classic pump-n-dump stock fraud scheme against eToys; which was reported on by New York Times reporter Joe Nocera in his March 2013 article titled “Rigging the I.P.O. Game.”
Nocera detailed the fact Goldman Sachs took eToys public for above $75 Per share; but eToys got less than $20.
A “spinning” ploy transpired where Goldman Sachs knew how high eToys stick would go (Nocera unearthed email proof that Saches exec Lawton Fitt made bets the stock would hit $80).
Then Goldman Sachs gave eToys under-priced shares to handpicked parties; who would – spin back – 50 percent of their windfall profits.
Nocera further reported that the documents on eToys, “clearly show that Goldman knew exactly what it was doing when it underpriced the eToys I.P.O. — and many others as well.”
Are any public or private companies – safe?
Making sure Goldman Sachs succeeded in the scheme, MNAT (secretly working for Sachs and Bain) deceived Laser, the courts, the eToys shareholders, and innocent creditors, through many lies under oath.
Then, MNAT perpetrated fraud after fraud to become and remain as eToys’ federal court-approved debtor’s counsel.
Subsequently, MNAT retaliated against Laser Haas by falsifying a HAAS Affidavit (that the crooks hid from Haas) whereby MNAT, Paul Traub and Barry Gold lied to the federal court stating that Laser “waived” millions of dollars in fees and expenses.
Despite the fact everybody else was in on fleecing and destroying the eToys public company, Laser was able to drive up the initial sales price of $5.4 million for all of eToys assets, into tens of millions of dollars.
It appears that the corruption was so heavy that Laser’s own daughter was abducted after Haas’s lawyer actually had the gall to email Laser a threat from Paul Traub’s partner, Susan Balashack – that Laser Haas is to “back off” pursuing justice – or else!
Shortly after that, as reported by The Wall Street Journal, Laser began to study the law at the Department of Justice websites, and that is when Haas discovered the two smoking guns that will eventually bring down this mile-high house of cards.
Due to those smoking guns, Paul Traub confessed his partnership with Barry Gold, and MNAT confessed it failed to disclose the conflict of interest of simultaneously representing Goldman Sachs and also being court-approved counsel to represent eToys against Goldman Sachs.
Here’s the problem though, as former USAG John Ashcroft is on the record there are “federal judges are in collusion with high ranking members of the United States Trustees program.”
Compounding that issue is the ability of Goldman Sachs to get “planted” deep state agents into our watchdog systems (like Jay Clayton, Colm Connolly, James Lackner, Maryellen Noreika, Clifford White III, Andy Vara and Ellen Slights).
This willful blindness is displayed by the shutdown of the Justice Department’s Public Corruption Task Force in 2008 – and threatening of career federal prosecutors to keep their mouths shut, about the reasons why (see March 2008, L.A. Times article “Shake-up roils federal prosecutors”).
Outrageously, that major case unit’s shutdown occurred only a few weeks after Laser Haas armed with smoking gun proof of Colm Connolly’s résumé, filed an 18 U.S.C. § 3057(a) Complaint, with the Public Corruption Task Force, in Los Angeles.
And Trump has given that crook a lifetime judgeship!
It took 20 years to take down Tom Petters, Allen Stanford, and Bernie Madoff; and now it would appear that Sachs is on the precipice of similar peril, with Laser reaching near the 20-year mark.
Goldman Sachs’ stock price has plummeted due to the Malaysia (1 Malaysia Development Bhd) 1MDB scandal and Sachs numero uno counsel, who holds a majority of the shares out of anyone at Goldman – Gregory Palm – has now decided to retire. 1MDB has so far seen two former Goldman Sachs bankers charged including Tim Leissner and Roger Ng Chong Hwa.
Goldman’s former Southeast Asia chairman Tim Leissner pleaded guilty to conspiring to launder money and violating the Foreign Corrupt Practices Act by paying bribes to Malaysia and Abu Dhabi officials, as well as circumventing Goldman’s internal accounting controls, and another banker according to prosecutors.
According to court papers, the scheme dates back to at least 2009, prosecutors said. Between 2012 and 2013, Leissner conspired with two others (Roger Ng Chong Hwa, and one unnamed individual) to acquire and retain business from 1MDB for the benefit of Goldman Sachs by promising bribes and kickbacks to government officials in Malaysia and Abu Dhabi using misappropriated and embezzled proceeds from 1MDB bond transactions.
Meanwhile, Goldman has also suspended its former co-head of Asia investment banking, Andrea Vella, over his role in the firm’s involvement with the case, pending a review of allegations, Bloomberg reported.
Thus far it seems like the SEC and United Trustees has gifted Sachs and Bain Capital a Gymboree of get out of jail free cards and no one has done anything about the rackets which as this writer has said previously. “If you can break the law with no worries, then it is only logical that the crooks steal bigger and faster, from as many as they can.”
It may come as no surprise to the reader but further, Paul Roy Traub, was named as the "Control" of Tom Petters Ponzi and Traub was also involved with convicted fraudster Marc Drier. Yet, Traub has still not been prosecuted despite being visibly linked to parties or directly involved in more than $50 billion dollars in frauds of - Fingerhut, Stanford, Okun 1031 Tax Group, Stage Stores, Mattel/Learning, Wells Fargo, Rothstein/Discala, Palm Beach Links Capital, Frank Vennes/Metro Gem, Kay Bee, Lancelot/ SkyBell and eToys.
[RELATED: Meet Mitt Romney’s Frank Nitti: Paul Traub]
Sachs CEO, Henry Paulson, was gifted the task of bailing out the banks (including Goldman Sachs) from any harms resultant of the mortgage frauds/ title crisis; but handpicked Colm Connolly buries the Mattel, Traub/Dreier, Fingerhut, Traub/ Petters and eToys fraud cases. Then Blankfein comes along, gifted the bailouts and cover-ups, as Sachs partnership with Bain Capital continued to Obstruct Justice in the same cases. Blankfein then took the impunity and added Germany, Puerto Rico and Malaysia debacles; whilst continuing the Obstruction in the Mattel and eToys related cases – that was dumped into David Solomon’s lap. This leaves only two choices for Solomon. Admit the Obstruction in the Mattel and eToys related cases (that helped kill Toys R Us), or continue the Obstruction and cover ups with hand picked Jay Clayton as head of SEC and corrupt fed prosecutor turned Delaware judge, Colm Connolly.
All of that compounded should answer the ubiquitous question Plains All American Pipeline, L.P. asked in a recent article: “Is There A Resounding Lack Of Confidence In The Goldman Sachs Group, Inc?”
The bigger story here, is the betrayal of the public’s trust by people like SEC Chair Jay Clayton, United States Trustee Director Clifford White III, Fed prosecutor Colm Connolly rewarded with Judgeship by duplicitous Donald Trump. Instead of doung their job, Colm Connolly’s Assistant United States Attorney, Ellen Slights, has Delaware FBI Agent, Scott Duffey, threaten Laser Haas with prosecution, unless he “backs off”.
Our system of justice is very screwed up when federal agents break the law trying to intimidate victims and witnesses.
The most common defenses of white-collar crimes, is that it is victimless.
However, would the public find the crimes victimless when they learn their – tax paid watchdogs – are helping Racketeers? Would the public say they are victimless with Toys R Us and Gymboree dead? Would the public find them victimless when they learn eToys shareholder Robert Alber had to shoot and kill an assassin Michael Sesseyoff, after he turned down Johann Hamerski’s bribe? Or that Marty Lackner was found dead in his closet after his brother, federal prosecutor James Lackner, learned Laser Haas was talking to Marty and friends? Had those – tax paid public servants obeyed their oath of office (instead of betraying it) – maybe several people would still be alive, along with the corporations Toys R Us and Gymboree.
In other words, the book The Chickenshit Club by Pulitzer Prize-winning journalist Jesse Eisinger which remakes the DOJ into a bunch of “Chickenshit” actors who aid in obstruction of justice by failing to prosecute the too big to fail bankers, is far more accurate then even Eislinger could have imagined.
Obviously, until Goldman Sachs stops its Obstruction in the Mattel, Fingerhut and eToys related cases, then the “come clean” contentions of CEO David Solomon has zero merit.
Therefore, the bigger question remains large. Is the Justice Department going to continue to be willfully blind to Goldman Sachs racketeering partnership with Bain Capital? Which means the Gymboree rip-offs are going to continue; and that Goldman Sachs will remain untrustworthy.
Wall St Fraud Exposure Series:
1. [Does Wall Street Bully or Bribe Prosecutors? Revolving Doors At The DOJ]
2. [How Goldman Sachs And Bain Capital Defrauded Mattel Investors And Got Off Scot-Free]
3. [DOJ Gifts Romney’s Bain Unlimited Get Out Of Jail Free Cards]
4. [WHISTLEBLOWER: DOJ Wall Street – Get Rich Quick – Revolving Door$]
5. [Meet Mitt Romney’s Frank Nitti: Paul Traub]
6. [Will Bankruptcy Venue BILL Bankrupt Delaware?]
7. [WHISTLEBLOWER: Trump Nominates Racketeer for Federal Bench]
8. [WHISTLEBLOWER: Trump Nominates Racketeer for Federal Bench PT2]
9. [Protecting Bad Faith Nominees FBI Threatens Whistleblower]
10. [Trump’s Administration Obstructs Justice in Goldman Sachs Cases]
11. [Senators Fight Wall Street Corruption With Kid Gloves]
12. [Shady MNAT Firm Gets Two Judicial Nominations]
13. [PART 1: Retroactive Racketeering — Romney Kills Toys R Us]
14. [PART 2: Retroactive Racketeering — Romney Kills Toys R Us]
16. [ Why is Trump’s Administration Obstructing Justice vs. Goldman Sachs & Romney’s Bain Cap?]
17. [ Wall St Whistleblower Informs Goldman Sachs CEO Solomon Of Toxic Culture]
18. [Goldman Sachs Is Split In 2 – Corrupt Culture]
19. [Big Banks Toxicity: A Global Plague]
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