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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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file icon Walrath's Opprobriumhot!Tooltip 11/01/2011 Hits: 6747

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

eToys is not a destination.  eToys is a process, the tip of the spear in a revolution by government attorneys and members of the Federal Judiciary against the corruption within which dared to attempt to taint the honor of scores of honest and just public servants, and which abused the freedom won for all U.S. Citizens by the sacrifices of our Veterans.

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?


The best short version of the eToys crimes with the assistance of the DOJ as described by Laser Haas on one of his websites.  Later sections contain other snippets during this "pre-blossoming" phase of this massive organized crime / public corruption saga, which to date has has drawn the interest of many DOJ employees outside of the Office of the U.S. Trustee as well as certain members of Congressional Committees.  This document snapshot resides here on bankruptcyMisconduct.com to make the evil efforts at censoring and silencing the whistle-blower just that much more difficult for the media control operations of the organized crime operators involved in the underlying eToys crimes and their Cover-Up.  We are also happy to help raise visibility and speed dissemination of the issues to students and concerned citizens.  The file is in .pdf format and can be searched or printed.

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.

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

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

"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.

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 certificate of service lists the cast of characters in the unfolding eToys scandal.  The eToys case is important because it illustrates how a Department Of Justice and Judiciary works too hard to protect their brothers lawyers, even when they are committing obvious crimes.  Whether these government lawyers are overtly corrupt and seeking personal quid pro quo for their families, or merely incompetent does not matter.  What matters is that the eToys scandal illustrates how government lawyers often protect financial crimes and fraud upon a Court when committed by other lawyers.  This conduct is exactly what has resulted in our current financial crisis.  None of the financial frauds could have become so large without the overt assistance and tacit approval of numerous lawyers at the DOJ, SEC, and judges sitting on the bench.  Only when the American people rise up and demand justice against all financial criminals, not just those unrelated to government lawyers, will the U.S.A. stand a chance at regaining its former glory.
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