New York has replaced the Bill of Rights with the Martin Act. People who do any business in New York are subject to a loss of their Constitutional rights. They have no right to counsel, they can’t plead the fifth and if they appear to be out of sync with common honesty, they can go to jail for decades and be sued in civil court. If you think I am making this up, read on, because I am not – it’s the law.
Businessweek reported that Obama’s DOJ and New York’s AG, Eric Schneiderman, will form a new unit to investigate possible mortgage fraud (more government bureaucrats). This is a political response to union complaints that no one of significance has gone to prison for the near collapse of the U.S. economy. The government has only nabbed some low-level and middle management mortgage brokers and borrowers (scapegoats for the most part).
Schneiderman will investigate banks to determine if they illegally bunched hundreds of billions in home loan bonds – a good cause. He will have access to federal investigations and he will also operate under the Martin Act and that’s where the problem arises. I agree this investigation is needed but not at the cost of our constitutional rights.
The Martin Act, by gentleman’s agreement, was not used for 75 years, until Elliot Spitzer dusted it off in 2002 and threatened to use it against Hedge fund and Mutual fund managers.
This law is so broad that it is not safe in anyone’s hands for any reason, no matter how laudable the goal.
The purpose of the Martin Act is to arm the New York attorney general to combat financial fraud. It empowers him to subpoena any document he wants from anyone doing business in the state; to keep an investigation totally secret or to make it totally public; and to choose between filing civil or criminal charges whenever he wants. People called in for questioning during Martin Act investigations do not have a right to counsel or a right against self-incrimination. Combined, the act’s powers exceed those given any regulator in any other state.
Now for the scary part: To win a case, the AG doesn’t have to prove that the defendant intended to defraud anyone, that a transaction took place, or that anyone actually was defrauded. Plus, when the prosecution is over, trial lawyers can gain access to the hoards of documents that the act has churned up and use them as the basis for civil suits. “It’s the legal equivalent of a weapon of mass destruction,” said a lawyer at a major New York firm who represents defendants in Martin Act cases (and who didn’t want his name used because he feared retribution by Spitzer). “The damage that can be done under the statute is unlimited.”
The only guideline for the Martin Act is that it covers “all deceitful practices contrary to the plain rules of common honesty and all acts tending to deceive or mislead the public, whether or not the product of scienter or intent to defraud.” There is no definition of “plain rules” or “common honesty.” Read here: American Criminal Law Review
In other words, anyone who did business of any kind who appears to be a liar to prosecutors can go to jail for decades should the AG decide it’s so. Obviously, vendettas and corruption are invited to walk through this wide open door at any time.
This will do wonders for business in New York – we’re so business-friendly here.
The Martin Act eliminates the fifth and sixth amendments of the Constitution and probably others but I’m not a Constitutional lawyer –
Fifth Amendment –
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
Sixth Amendment –
For more information: The Martin Act