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eToys Cover-Up

eToys is one of the biggest and clearest bankruptcy fraud scandals involving BigLaw firms and DOJ officials. The story is not going away, and may very well be the straw that breaks the camels back of entrenched corruption in the U.S. legal system.

There are a number of documents featured below.

Documents are related to the eToys bankruptcy and frauds upon the Court, as well as the related cover-up including: conflict of interest by law firms which filed false declarations under oath, orders to disgorge fees by federal judges, communications regarding the failure to make mandatory referal for perjury / bankruptcy fraud regarding the false sworn declarations.

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For a decade plus, armed with confessions of intentional lies under oath, as the court appointed fiduciary over the eToys federal case, Laser Haas (“Laser the Liquidator”), has been blowing the whistle (see WSJ “eToys investors claim conflict”), all to no avail, on a million dollar bribe offer [to be a roaming manager of Bain Capital {like Jack Bush, Barry Gold or Michael Glazer}] and a billion dollar plus crime spree of The Learning Company, Kay Bee, Stage Stores and eToys.  & Goldman Sachs

What happens when your half of the quid pro quo turns out to be insufficient in light of a controversy that just won't go away?

What a difference a few years make indeed, but apparantly ROBERTA A. DeANGELIS and her boy toy Mark S. Kenney have seen the light, and the sound of a speeding train has them objecting to a blatant attempt to cover up the eToys crimes by covering up the settlement.  Well, the company was long ago liquidated, so who are they trying to protect?

Download  eToys_2013_US_Trustee_Objection_to_SEAL_case.pdf for free from BankruptcyMisconduct.com

A Cluster Funk of Senators

How'd you like to be invited to a gang bang when you're the Central Park Jogger and Goldman is woven to the confessors?

The Honorable Bernie Sanders, Carl Levin, Diane Feinstein, Chuck Grassley and Elizabeth Warren are now tied to the eToys cover up.  Not that they wanted to be associated with the unraveling corruption, but then again who would want to be associated with a string of crimes more blatant than Madoff's SEC run?

Download at no chargef from BankruptcyMisconduct the document eToys_April_16_2013_Letter_to_Senators-Bernie_Sanders-Carl_Levin-Diane_Feinstein-Chuck_Grassley-Elizabeth_Warren.pdf which binds a five-way of senators to one of the longest running willful Fed cover ups of hedge fund skulduggery.

Oh Brendan, it sucks to be you.

Download eToys_April9_2013_Brendan_McGuire_letter.pdf for free here on BankruptcyMisconduct.com

"There is no cannibalism in the British Royal Navy" claims Judith Appelbaum.  Yet another government lawyer with the effrontery to deny the systemic failure of the DOJ to prosecute the largest form of organized crime (and coincidentally the employer of highest paid DOJ alumnae and their relatives) - our corrupt financial institutions taking advantage of our corrupt legal system.

Leave it to Laser Haas to put Lady Judith in her place.  This letter is jam packed with juicy lines like:

 It is vexes me greatly, how our “Department” takes an entire month to contrive a boasting about inadequacies and stipulates that it is doing a good job; when other eToys victims and I are being Intimidated and Retaliated upon, in violation of 18 U.S.C. §§ 1512 & 1513.  In no small part, due to the “Department” duplicity (via rogue factions within [e.g. DeAngelis, Kenney, Colm F Connolly]).

This fantastic retort to the Fudge Fest also known as Appelbaum's Delusion is available as a free download here on BankruptcyMisconduct.

file icon Walrath's Opprobriumhot!Tooltip 11/01/2011 Hits: 6792

Federal U.S. Bankruptcy Court judge Mary F. Walrath is facing the gambler's conundrum.

Take the loss, or double down.

If past is prologue, this tired old sow will double down. Rather than start the unraveling of the mega bankruptcy case with perhaps the most obvious and undeniable web of conflicts and blatant coordinated frauds upon the court, Mary the Greek will likely seek to extend the leaning house of cards we all know as the eToys case.

Rest assured all you readers of BankruptcyMisconduct (this includes all of you at usdoj.gov, at BigLaw firms, from your vacations in the Caribean, and from Washington, D.C. including senate.gov & house.gov): We are humbled by your continuing and growing attention to the issues as presented on our site.

We promise you that judge Mary Walrath will be forever equated with the eToys frauds and cover-up, and her numerous decisions shall define judicial competence in the face of fraud upon the court as it existed at the start of this new, financially precarious century.

Scholarship award contestants should download a free copy of the eToys fraud upon the Court motion filed in October 2001 here: eToys_Oct31_2011_Fraud_on_Court_Brief_FINAL_one1.pdf

What not to wear on your face.   OK, simple summary.  Every official counsel in a bankruptcy case must affirmatively swear in a written pleading that they have no conflict of interest with any party in the proceedings, and list all potential conflicts.  These lawyers have an official duty to update the court if there is any change.

Well, how about a circumstance where one counsel had a secret partnership with a liquidator hired in the case?  Naw... couldn't ever happen.

Well, how about this smoking gun which even demonstrates scienter, in the context of a secret agreement which even contemplates the eventual filing of a bankruptcy case, as well as the parties intent to keep the financial relationship secret.

You can't make this stuff up.  But we thank Barry Gold and Paul Traub for having their special Audacity of Dope to actually have reduced their slime agreement to writing.  Did someone say eToys?


So much meat for a prosecutor to read in one place. Barry Gold, were you inspired by the eloquence of John Kerry (”I voted for it before I voted against it”) when you described how you first withheld information from the Court before you decided against withholding it? We can't make this stuff up (pages 2 - 3 emphasis added for humor affect):

In hindsight, Mr. Gold regrets not disclosing his involvement in ADA, not because he did anything wrong, but because there was, and is, no reason not to make such disclosure. Further, such disclosure would have avoided the need for Mr. Gold, and others, to respond to this Emergency Motion, which he believes has no basis.

Of course, Mr. Gold's thoughts are magically converted into lawyer speak, and surrounded by caveats which purport to describe the state of mind of Mr. Gold. What is most ludicrous is that the bankruptcy code does not allow any professional to decided what must be disclosed. The duty is to disclose, and then anyone else can decide whether to object.  There is plenty that Barry Gold and many lawyers that worked with him, literally, did wrong.  "Failing to disclose" understates the reality of a sworn statement "there are no other connections" which is actually a fraud on the court.

This file is available for free on Bankruptcy Misconduct by the name BG_Jan25th_EX_Hiring_Letter.pdf as well as other sites on the internet which refuse to allow the truth to be buried. The court documents contained in this file were filed under penalties of perjury and bankruptcy fraud and can also be found in the official records at the court houses in which they were filed, as well as from PACER.

Federal judge Mary Walrath agrees that there was a failure to make a disclosure in the eToys bankruptcy case, and orders disgorgement of fees from a lawfirm which failed in their disclosure duty.  However, in a perverse abuse of the concept of "professional courtesy", Judge Walrath, for the benefit of her fellow lawyers, ignores the simple fact that each of the failures to disclose were criminal acts.  The acts were criminal as they involved many dozens of false written sworn declarations by lawyers for the law firm.  Thus, Walrath straddles the reality of the conflict failure with one leg as she attempts to balance her own reluctance (refusal?) to refer the perjury & fraud upon the court to the appropriate district attorney.  You can't see one issue without seeing the other.  Such a referral is required by the Judicial Cannons, case law and statutes including explicity Title 18 U.S.C. § 3057.  Furthermore, the Judge is bound by ethical rules to refer the matter to the state bar.  "Prostitution" & "Pornography" may be appropriate labels to describe this outrageous lapse of duty by judge Mary F. Walrath.  In any event, we are compelled to state that we find her position rather unsightly, to see the least.  Yes Virginia, this is called a cover-up.  None other than renowned finance professor Lynn LoPucki at UCLA has done research on the bankruptcy industry and concluded that Federal bankruptcy judges are corrupt.  Just read his book.  Martha Stewart went to prison for  a single fib.  And yet, these lawyers made millions and are alleged to have helped channel some of the disappeared $8 Billion of value from the eToys estate to their own conflicted clients.  The Federal government stands to gain many billions of dollars if it only proceeds with a slam dunk RICO prosecution of the vast neo-sophisticated organized crime hedge funds and lawfirms which dominate and abuse the unique American bankruptcy system.
The DOJ gave an illegal grant of immunity to certain lawyers in the eToys bankruptcy case as described in detail by Laser Haas.
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