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Monday, July 15, 2024 | Back issues
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Alleged Ponzi Schemer Can’t Shield Legal Papers

(CN) - Prosecutors can use documents normally protected by attorney-client privilege in an ongoing trial over a scheme that allegedly conned a thousand investors out of $194 million, a federal judge ruled.

The government subpoenaed two law firms that represented former Oxford Global Advisors head Jason Bo-Alan Beckman regarding the executive's bid for a minority ownership in Minnesota Wild hockey team.

Documents pertaining to Beckman's foreign currency exchange business, which the government maintains was a giant Ponzi scheme, are also at issue.

A jury trial for Beckman and two alleged co-conspirators kicked off Thursday in Minneapolis, and is expected to last several weeks.

On the eve of the trial, Chief U.S. District Judge Michael Davis refused to quash the subpoenas against the firms, Briggs and Morgan and Willkie Farr & Gallagher.

The court-appointed receiver in charge of liquidating Oxford already waived all privilege for business conducted during Beckman's reign, the ruling states.

Though Willkie Farr acknowledged the receiver's waiver, it said privilege remained because Beckman had objected to any disclosure that might involve his personal interests.

The government countered that Willkie Farr represented Oxford, so there could be no separate privilege with Beckman. Davis agreed and ordered the Washington-based firm to produce the subpoenaed documents.

Beckman's local attorneys with Briggs and Morgan meanwhile must divulge certain materials under the crime-fraud exception to privilege, the court found.

Davis said prosecutors have sufficiently tied the work Briggs did for Beckman to an allegedly fraudulent attempt by Beckman to buy the Minnesota Wild.

In support of its claims, the government submitted an affidavit from Joel Barth, a principal with an accounting firm that the National Hockey League hired to perform financial due diligence on potential team owners.

Barth said that Briggs attorneys provided most of the documentation on Beckman's finances, and that the information "raised a number of red flags."

Following those red flags, Barth said he discovered that at least two of the assets Beckman claimed to control were in fact worthless.

In a meeting set up by Briggs, a foreign-exchange company that Beckman claimed to control, Crown Forex SA, allegedly told Barth that it had no serious financial problems.

But Barth said his investigation revealed that the Swiss Financial Market Supervisory Authority had frozen all of the firm's assets.

Barth said Briggs also provided him with documents meant to support Beckman's claim that he had more than $6 million in trading accounts at Peregrine Financial Group. But an investigation revealed that these accounts were also "worthless," according to Barth's affidavit.

Internal Revenue Service special agent John Tschida also submitted an affidavit fort the government on his review of Beckman's NHL application.

Tschida said Briggs provided the NHL with a redacted history of Beckman's legal troubles, left out five disciplinary actions with the National Association of Securities Dealers, and grossly misstated Beckman's personal net worth to the hockey league.

Judge Davis said he would personally review all of the Briggs documents before passing on relevant information to prosecutors.

Beckman also faces a parallel civil action from the Securities and Exchange Commission.

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