I'm gonna fight my battle. I'm gonna deliver.
I'm gonna fight the witch hud. I'm gonna take care of Clary my name, and I look forward to doing that. Republican Congressman George Santos came out swinging after pleading not guilty to a thirteen count federal indictment for what the US attorney described as an audacious scheme. Santos is accused of defrauding his donors, using political contributions to line his own pockets, claiming unemployment benefits unlawfully, and lying to Congress.
Many of the allegations have already been revealed as Santos's fabricated life story came to light, in which he lied about nearly everything from his family background to his education and work experience. Yet Santos seemed to be surprised at the indictment. It's a witch hut because it makes no sense that in four months, four months, five months, I'm indicted. My guest is former federal prosecutor Robert Mintz, Apart and McCarter and English, just how serious are these charges against Santos?
Federal prosecutors unsealed an indictment charging representative George Santos of New York with thirteen counts, including counts of money laundering, stealing public money, wire fraud, and making false statements to Congress.
These are very serious charges that carry with them long jail sentences, and when you take together all the allegations that are in this twenty page indictment, they paint a pretty damning portrait of someone who utilized various deceptions and schemes to help them get elected to Congress and to line his own pockets.
The indictment comes less than five months after the Eastern District of New York began their investigation, and Santo said, it's a witch hunt because it makes no sense that in four months, four months, five months, I'm indicted. How fast is that?
Well, that actually is pretty fast for prosecutors to put a case like this together. Often these cases can take more than a year as they go through complicated financial records to put this type of financial fraud or political
corruption case together. But here they did it in five months, which suggests to me that the evidence was fairly clear that prosecutors were able to put together a case that they believed was going to get them a conviction in a relatively short time, primarily going through bank records and financial statements, although it's also clear, based upon the allegations in the indictment that they also interviewed several victims of this scheme and they have some inside information not only
based upon the bank records, but also upon testimony of witnesses who we can expect to be central to the government's case at trial.
So let's go through the indictment tell us about the first alleged scheme and allegations of wire fraud and money laundering.
This indictment is very detailed and include seven counts of wire fraud, three counts of money laundering, two counts of making false statements to the House of Representative, and one count of best to public funds. The wirefraud of the money laundering actually overlapped the various schemes that are charged in the indictment, and basically this indictment comes down to
three schemes alleged by prosecutors. The first scheme alleges that mister Santos was involved in a fraudulent political contribution scheme. Prosecutors said mister Santos and an unnamed Queen's based political consultant induced donors to give money to a limited liability company he controlled. According to the indictment, he then used the money for personal expenses, such as buying designer goods
and to payoff personal debts. The allegations in the complaint don't identify by name the companies, the people, the investment firm, or the contributors involved. Prosecutors never named victims or companies that are alleged to be victims by name in indictments, so they referred to as company number one, person number one,
contributor number one, et cetera. But as this case continues, prosecutors will reveal who these individuals are, who these companies are that will come out in discovery, and some in the media have already figured out who these are based upon the generalized descriptions in the indictment. So it's clear that there is a lot going on here in this first scheme, and prosecutors seem to have a lot of evidence based on the allegations outlined in the indictment.
The unemployment fraud claim is new and surprising. He applied for unemployment insurance even though he was making one hundred and twenty thousand dollars in annual salary.
Yeah, this is a new allegation that had not yet come to light, despite a lot of media reports on many statements that, according to reporters, were faults that were made during the election and prior to the election. This is a new scheme where in the indictment he's charged
with unemployment insurance fraud. Federal prosecutors say that in June of twenty twenty, in the early months of the COVID nineteen pandemic, mister Santos applied for government assistance in New York even though at the time he was employed by a Florida based investment firm, which appears to be a company called Arbor City Capital, and he drew an annual salary of one hundred and twenty thousand dollars. This is one of those allegations that seem to be pretty clear cut.
It's something that prosecutors can fairly easily document because presumably they have records of mister Santos making this application for unemployment benefits. At the same time, they will have to prove that he was employed by Harbor City Capital and drawing the annual salary. That's the case. That's largely built on records, and we can presume that prosecutors have gone through those records and believe that this is a clear cut case that they won't have much difficulty proving a trial.
And yet Santos told a reporter outside the courthouse that this was inaccurate information, and I don't understand where the government is getting their information from. Well, the government is getting their information from documents, right.
Well, that does seem to be what this is based on, and it does answer the question why this indictment came about in only five months. It is largely based on financial records. It seems that prosecutors have gone through these bankqwreeks, have gone through these applications that were made to government agencies, and they put this together in a fairly solid way
so that they could bring this case quickly. Whenever prosecutors bring any case, particularly cases involving political corruption, they always want to proceed cautiously. They never want to pull the trigger too early because they know that these cases are going to get a lot of publicity. They know these cases are going to be vigorously defended, and so they don't want to move ahead until they believe they have all the evidence necessary in order to bring these charges.
The fact that prosecutors moved so quickly here suggests that they believe they have significant financial and documentary evidence that they will be able to use to prove their case, and that the defense will not be able to attack because the records are what they are, and to the extent the records conflict with one another, is going to be very typical for the defense to attack them.
And Santos is one of nearly three dozen Republicans sponsoring legislation clamping down on the abuse of unemployment insurance, the same type of fraud that Santos himself is now alleged to have committed. So that's a bit of irony. Now, the third scheme that Santos is accused of committing, lying on congressional financial disclosure forms, will also be based on records.
Yeah. The third scheme that's outlined in the indictment said that mister Santos misled the House of Representatives about his financial circumstances on disclosure statements required for federal candidates. Prosecutors essentially accused him of overstating during his unsuccessful twenty twenty campaign one source of income while failing to disclose the salary from an investment firm that he worked at at the same time. So he's basically accused of falsely reporting
his income in one case and overstating it in another. Again, that is a case where prosecutors should be able to show financial records in order to prove their case, and you would think that this would be a fairly straightforward case for prosecutors.
The congressman's lawyer, Joe Murray, told reporters that he wants to meet with prosecutors and quote, share what we've learned and what we have. We have information that I think they would be interested to see. Is that a likely scenario?
Well, I thought it was interesting that mister Santos in court was very deferential, very soft spoken, but when he left the court room, he stood out on the courthouse steps. I was really rather defiant. He said that he would use this as an opportunity to prove his innocence. He called the investigation a witch hunt. He said, I'm going to fight this battle, I'm going to deliver, And basically he pitched this as an opportunity that he'd been waiting for to clear his name so he could move forward.
Because remember, not only is he refusing to resign from a seat in Congress, but he's actively running for re election at this point, So he is pitching this as an opportunity to clear his name and trying to suggest that prosecutors are falsely going after him on some kind of witch hunt, although he's given no indication as to
why he would be singled out for this unfair treatment. Interestingly, his lawyer was much more circumspect in terms of where the case stands right now, and as you mentioned, he talked about meeting with prosecutors sharing information with them. That's kind of the standard playbook of the defense lawyer in a circumstance like this, to meet with prosecutors to try to flesh out the government's case a little more to
the extend, prosecutors will share that information. At this point, they do have to provide discovery, so they do have to really give the defense here an opportunity to see not only what the charges are, but how the government's going to prove those charges. They've got to provide the documents, the bank records, statements by witnesses. But at the same time, the defense has an opportunity to share with prosecutors what it believes are some of the weaknesses in the government's case.
Usually this kind of back and forth goes on before an indictment. Once it gets to this stage, prosecutors are going to move forward with this case. It's exceedingly rare that a defense lerner can ever go in there and convince prosecutors to drop a case, and particularly a case like this where there appears to be so much evidence in prosecutes. I have put together three separate schemes, all of which are standalone cases that they could bring really
without bringing the other cases. But here when they put them all together, it does pain the picture of a defendant who, according to prosecutors, would lie, would deceive, and did all of this in order to win a seat in Congress and also make money for himself at the expense of taxpayers.
It's always possible, But does it seem like a case where a plea deal could be reached.
Well, a plea is always possible, particularly if the defendant ultimately realizes that a conviction a trial is highly likely. Prosecutors always give defendants an opportunity to plead to something that is going to be more favorable than the outcome if they had gone to trial and get convicted of all counts. Now, at the end of the day, it's always up to the judge as to what the sentence will be, so prosecutors can never promise a particular sentence.
But generally speaking, if a defendant pleads guilty, they're going to get a slightly better deal than if they go to trial. Here, the charges are so serious that I would never expect prosecutors to put anything on the table that is not going to involve some significant jail time
that leaves the defendant in a difficult situation. Do they roll the dice, Do they try to win a trial and walk away with no jail time at all, or do they risk a trial where they would face even more jail time than if they take a plea deal.
Bob, what could his defense be? Does anything come to mind? I didn't know. I didn't understand.
There's a couple things that defense lawyer will deal and look into this case. First of all, he will review the evidence, so look at the documents and see whether they are as clear cut as prosecutors claim, to see whether there's language in there that he may be able to exploit to suggest that this wrongdoing was not wilful. There may have been mistakes made, but the mistakes were not intentional, because prosecutors have to prove that all of
these crimes were done knowingly and wilfully. So that's one strategy defense lawyers will use. Another is whether or not somebody else may have been involved in submitting these falsified records. There have been talk of a treasurer who was involved
in the Santos campaign. It's possible that the defense will try to shift some of the blame onto others who were not charged in this case and suggest that while false documents were submitted to banks or possibly to the House of Representatives, that it was done without mister Santos's knowledge or complicity. So that's another area that a defense lawyer will take a look at and try to use
as a possible defense here. Remember, the burden is always on the prosecution to prove their case beyond a reasonable doubt. The defense doesn't have to put on any case at all. It bears no burden to prove its innocence, but they can try to poke holes in the government's case to at least raise a reasonable doubt in the mind of some jurors as to whether or not the government has met its burdens. So that also could be a strategy we could see employed if this case ever gets to trial.
If it goes to trial, could he defend himself without taking the stand or is this the kind of case where he really have to take the stand to establish his defense, even though of course a defendant always has the legal right not to testify.
Often the strategy is to try to convince durers that prosecutors have not met their burden of proof, to show that the evidence that the government has produced does not conclusively show that the defendant willfully and knowingly violated the law.
The difficulty here is that there's three separate schemes, and so they have to convince jurors that, in three different occasions, in three different schemes involving three different crimes, that all of them were cases where the government has failed to prove their case. That's going to be exceedingly difficult to do unless mister Santos takes the stand in his own defense.
But that comes with its own list of perils, because prosecutors have the opportunity to cross examine him and to ask him lots of difficult questions that he will have to try to look jurors in the eye and convince them that he's telling the truth.
I'll bet prosecutors would consider it a gift if they could cross examine Santos. Oh, we'll have to see what happens. How long before the case might go to trial.
Well, defense is entitled under federal law to a speedy trial. That means is the defense wants this trial to go within seventy days, they can force the government to try the case that quickly. Usually the defense wants more time to prepare their case, and judges will always give the defendants more time because they don't want to have a trial go forward and then have a court of appeals
find that the defense was not given adequate time to prepare. So, depending upon the volume of these financial records, what the evidence looks like, how much the defense has to go through in order to prepare for trial, I think we would not expect to see this case go to trial before a year and perhaps longer.
Prosecutors said that Santo's face is as many as twenty years in prison if convicted of the most serious charges, but his likely sentence if he's convicted would be much shorter than that, wouldn't it.
Yeah, So the way it works is that each of these separate charges have a statutory maximum. So, for example, wire fraud carries a maximum of twenty years in prison unlawful monetary transactions. The money laundering carries a range of a few years to decades in prison. Effect of public money is a maximum sense of one year in prison.
But the practical reality is that if a defendant pleads guilty, or of a defendant is convicted a trial, all of these charges merge together, and then the federal sentencing guidelines really control here, and that will wind up with a sentence that is much less than these statutory maximums. So we're not going to see a prison sentence of forty or
fifty years. Even if mister Santos is convicted a trial, it would likely be something much lower than that, maybe in the eight to ten year range if he goes to trial and loses, and something slightly less than that if he decides to take a plea deal. That's just an estimate because it really depends on lots of factors, how much money is involved, other aggravating factors that can push up the sentencing guidelines more. But typically these are
cases that are not ten twenty years. It's something between five and ten years in most of these political corruption cases.
So Santos, as you mentioned, said he doesn't plan to resign from Congress and that he is going to run for reelection next year. I know it's rare for someone to be kicked out of Congress, and it certainly won't happen before a verdict in the case. But if there's a guilty verdict, will he be kicked out of Congress?
Well, it's interesting that no law prevents mister Santos from continuing to serve in Congress even after this bombshell indictment. That is something that is ultimately up to the House of Representatives as to whether or not they want to expel a member of the House. The history here is that only twenty members since the beginning of the country
have actually been expelled from Congress. Five of those were House members, and a number of those were done during the Confederacy as a result of law or siding with the Confederacy during the Civil War. Article one, section five of the Constitution requires a two thirds vote to expel a member, So it's going to take more than just Republicans or more than just Democrats to remove them. It's
going to take a bipartisan vote to remove them from Congress. Historically, what's happened is that a member is removed from any committees they may be on once they're indicted. Now, in this case, mister Sanchez has already been removed from committees due to the false statements and the exaggerations that he made during his campaign, so they can't remove them from that. Usually what happens is once they're convicted, they either resign or the House of Representatives will move to expel them.
Usually they resign, but there have been many members of Congress who have been indicted who have continued to remain in Congress while they fight those charges, and I think that's what we're going to expect to see here.
It will be interesting to see how the case develops considering all the evidence that prosecutors have outlined in the indictment. Santos will be back at the courthouse on June thirtieth for another hearing and perhaps we'll learn more then. Thanks
so much for your insights, Bob. That's Robert Mints of maccarter and English Goldman Sachs is shelling out two hundred and fifteen million dollars to put an end to one of Wall Street's biggest gender discrimination cases, a class action where about twenty eight hundred female associates and vice presidents accused the finance giant of systematically underpaying and under promoting women.
The settlement came just a few weeks ahead of a trial that would have provided a window into the fabric of Goldman's workplace and a rare public forum for testimony about inequity inside the financial industry, where all but one of the six biggest US banks have only ever been run by men. It's been more than a decade of litigation in one of the highest profile lawsuits over paid disparity on Wall Street, where women have long complain that
unfair treatment can derail careers. Goldman denied wrongdoing and agreeing to settle, it did agree to engage an independent expert to conduct additional analysis on how it evaluates performance and its process for promotion. Joining me is Dominique Camacho Moran, head of the labor and employment practice at Faroh Fritz. So tell us about this class action lawsuit that's been going on since twenty ten.
So interestingly, in twenty ten the lawsuit was filed, but the action actually commenced before that when there was a charge filed with the Equal Employment Opportunity Commission. So this case has been around for a very long time. The
initial litigation began with a complaint. When it was filed in twenty ten, it was filed as a class action, and so as a result, there was an initial phase of discovery and court decisions regarding whether the complaint should proceed on on behalf of the one plaintiff who filed the litigation or on behalf of all female employees who were similarly situated. So as a result, it took longer
in that initial stage. Combine that with the pandemic and cases that were not going to trial were looking at a very lengthy window of discovery and preparation for.
A trial date and explain what the allegations are in the lawsuit.
So there were essentially three different kinds of allegations that women were not evaluated on their performance fairly, that they were not paid fairly, and that they were not promoted in a fair way. And so all three issues are similar but a little bit different. Women were paid less allegedly than their male counterparts. Women were evaluated more harshly allegedly than their male counterparts, and they were not promoted for the same reasons as their male caait parts.
The trial was scheduled for next month in New York, so it would have been a public forum for testimony about any quality inside the financial industry. The two sides were racing to settle before trial. I can see why the banks would want to settle before trial, but why did the plaintiffs want to settle before trial?
The plaintiff claim was not easy. When you look at a claim of pay disparity or some sort of promotion discrimination, the plaintiff has to establish that the reason why they were paid less, the reason why they were not promoted was because of their gender. That typically is not an easy thing to establish because there are often many reasons, and it's hard to establish that two employees are identical.
So not easy for the plaintiffs to go forward. It's hard to make the claim that there's a pattern or practice that Goldman intentionally was described dominating and intentionally paying women less. The other thing is in a big organization, the decision makers are likely numerous, and so the plaintiff also has to establish that all of those decision makers
were engaged in some sort of systematic discrimination. That's a hard thing for the plaintiffs to prove, and so to avoid the risk that they don't meet the threshold, a settlement was likely in their best interests.
And what do you think about the amount of the settlement. It's a big number, but the average payout may only be about forty seven thousand dollars for each plaintiff after deducting legal fees and costs.
So according to news reports, there's about twenty eight hundred women in the class. I think, based on the time that has lapsed, the number is a number that will allow meaningful dollars to go to each one of those class members. Again, I think the challenges on a pattern and practice case, which is what this was. It is difficult for any one of those plaintiffs to establish that the reason they were paid X and not hy was
solely based on their gender. The more important impact, though than the dollar number, is the other components of the settlement. Goldman has agreed that they will hire an expert to help them analyze their pay practices, to go through and analyze and to the extent necessary improve their performance review process to look at, analyze, and make recommendations regarding their
promotion practice. Those are valuable and key and meaningful for those that still work in the financial services industry.
So for years Goldman and its peers have pledged to diversify their ranks, but only twenty nine percent of Goldman's current partners and managing directors are women. That may be an improvement, but it's nowhere near equity.
One of the really difficult things when you're looking at diversifying employees at a variety of levels in an organization is it takes time to build the people that are qualified, and so it's hard to say that in any one moment we have the group of people ready to go
who meet our diversity goals. It is, though, important that we are looking at what is every individual organization's path to promotion and helping organizations and employers learn to articulate what is the path to promotion will ultimately yield better diversity.
So what do you think this settlement stands forward?
I think it is a reminder for every employer that we need to be thoughtful and intentional about pay, promotion and performance decisions. Too often in organizations, people that are well liked to get very strong performance reviews, not that they're not great performers, but it's critical that we are evaluating everyone on the same criteria. So this decision should be a reminder to every organization we need to establish intentional practices when it comes to pay, promotion and performance.
I do think New York has taken steps towards making sure that employers are intentional by passing the Pay Transparency Law. That law is already enforced in New York City, it will be enforced in New York State. That allows every applicant for employment to know what is the range of pay. That should allow the applicant and employees to have better information about whether their employer is paying them fairly.
Mandatory arbitration agreements are all over the place, certainly in this industry. Are you seeing an increasing wave of litigation in this area rather than arbitration?
So interesting that that issue sort of has a wave, And so over the course of my there have been moments where private arbitration was very popular and moments where it's not. Generally speaking, private arbitration benefits all of the parties who don't want their claims to become a cause celeb They want to address the issues that have harmed them, and they are much less interested in creating new law or any sort of lasting conversation or narrative around the issue.
I am at the moment, arbitration is back in vogue. Lots of people would like to do private arbitration. Today, it is more of a choice because most organizations wait until there is some sort of claim before having an agreement to privately arbitrate. Again, that is a consequence of New York State's sexual harassment law. In the aftermath of the last Me Too movement, there was a move to
make arbitration more difficult. If you agree at the beginning of employment to they at the end of employment, you can agree that if we have a dispute, we'll go to arbitration. It's quicker, it's less expensive, and it's private.
I know you represent employers, but usually the complaint from plaintiff's attorneys is that plaintiffs don't fare as well in arbitrations as they would before a jury.
I don't think there are studies that would say that that is the case. I certainly understand that could be a perception, but for all the parties the speed with which issues get resolved, and arbitrators are subject to doing and following the law. And while their decisions are not appealable just because they got it wrong, an arbitrator that
gets it really wrong is subject to review. And so for plaintiffs they are within the scope of they should bear the same and they should be better served by the speed with which their issues are resolved.
You mentioned the Meat too movement. How is the Meat two movement influenced this area?
In the last five years, we have seen a push with new legislation that benefits women in the workplace, and we're seeing improvement. It's not the kind of improvement everybody would like to see overnight, but the pay disparity is smaller today than it was five years ago. And in the aftermath of Me Too, we saw changes to the sexual harassment law that gave employees more power when it came to arbitration. It gave employees more power when it
came to confidentiality agreements. We also have seen in the wake of that movement this move on pay transparency and pay equity. Pay transparency is designed to address pay inequity and so that will allow us another step. We also saw a change in the law that precludes employers in New York City from asking about salary history. That too,
was designed to address pay inequity. So the me Too movement was the start of another wave of strong legislation designed to address the issues that women face in the workplace.
And what are you advising companies to do in this area?
So Goldman is an opportunity for every organization to step back to evaluate pay practices, and I ask employers to do a self audit regularly. That might not be every month, but certainly on an annual or a biannual basis. We want them to look at job classifications, what they're paying people and make sure there's no disparity or pattern that means any one group of people is being paid less than another. The second thing is training of supervisors, managers,
and executives. That's the key to avoiding promotion and performance discrimination. We need to educate those supervisors and executives on how to be consistent and intentional in what they are evaluating. One of the things that we sometimes forget is promotions oftentimes are based on someone's prior performance. Just because someone has been a great performer, doesn't mean they're a great manager.
So we need to make sure we're doing the training and giving those new managers the tools to ensure they are engaging in intentional practices when it comes to pay, performance and promotion.
Thanks so much for being on the Bloomberg Law Show. That's Dominique Camacho Moran, a partner Farah Fritz, and that's it for this edition of the Bloomberg Law Show. Remember you can always get the latest legal news by listening to our Bloomberg Law Podcast. I'm June Grosso and you're listening to Bloomberg