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Special Investigation

Hundreds of hidden Long Island cases often sealed improperly

When investment adviser William Landberg appeared on Fox Business’ “Bulls & Bears” in 2009, he warned viewers against big gambles and described the careful approach of his firm, West End Financial Advisors.

“What we are looking at for our clients is to be only in spaces where our investors have a very high probability of getting not only a return of their capital,” he said, “but a return on their capital.”

Hidden in a Suffolk County records room was a lawsuit that strongly disputed Landberg’s claims of probity, charging him with being a deadbeat and fraud.

The lawsuit could have served as a warning to those who had entrusted their money to Landberg, many of whom would lose their life savings, but a judge’s faulty order sealed the case, preventing investors and the public from seeing the records.

The Landberg case is one of more than 300 identified by Newsday that Long Island judges sealed — often without justification — despite government agencies, hospitals and other entities key to the public’s welfare being parties.

Some cases involved matters more troubling than Landberg’s financial crimes, which landed him in federal prison and cost his investors $66 million.

Judges have sealed cases involving sexual abuse at a taxpayer-funded program for disadvantaged kids; a doctor alleged to have serially molested a mentally disabled woman at his medical office; a toddler who died at an unlicensed day care center; and nursing homes that evicted residents unable to pay for their beds.

Cases that involved allegations of misconduct by prominent local figures in finance, politics and law have also been sealed.

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Other names known beyond the region who have been party to sealed cases include the late John R. “Bunky” Hearst Jr., an heir to the Hearst fortune, and James H. Simons, a pioneering hedge fund investor and Long Island’s richest man. One recently sealed case is Fox News host Bill O’Reilly’s lawsuit seeking $10 million from his ex-wife, who he says had an affair with a Nassau County police detective.

In contrast to the Landberg case, judges’ sealing orders in most of these court actions led to concealment of all salient information — what was alleged, who may have been at fault, and whether case records involve matters of public significance. Details of the Landberg case emerged only because a Manhattan judge, ruling in a companion legal action, refused to go along with the investment adviser’s request for secrecy, unlike the judge in Suffolk.

Parties agreeing to seal the record presumably only take their own interests into consideration, and do not consider the interests of the public.
– Judge Paul G. Feinman

In his ruling, the Manhattan judge, Paul G. Feinman, repeatedly cited provisions of the state court rule governing sealing, which requires that judges consider the public’s right to know in making their determinations. He stressed that the power to seal a lawsuit belongs only to the judge, even in cases like Landberg’s where the collection agency had no objection to the investment adviser’s sealing request.

“Parties agreeing to seal the record presumably only take their own interests into consideration,” Feinman wrote, “and do not consider the interests of the public.”

Roots of the rule

Feinman was enforcing a state court rule that was established 25 years ago in part due to worries that a sealing order had hidden information on industrial contamination that threatened a community outside Rochester. The case heightened concern among state court leaders that confidentiality deals were warping case outcomes and that judges, eager to support areas of agreement and keep cases moving, were too often going along when both sides wanted a lawsuit hidden.

The rule bars judges from sealing cases “except upon a written finding of good cause, which shall specify the grounds thereof.” The same language was incorporated in the state’s mental health law, where it applies in cases involving whether a person is unable to care for him or herself and in need of a court-appointed guardian.

Court decisions have interpreted the rule to require that judges do two things: determine whether a party has a legitimate reason to seal a case, then weigh that party’s interest in confidentiality against the public’s interest in disclosure. Also, courts have found that when secrecy is justified, less is best: Judges should not shroud an entire case file when sealing a single record or redacting a name does the job.

Newsday’s examination of more than a decade’s worth of sealing orders found that Long Island judges routinely sealed cases with little or no regard for the rule or case law. Judges neglected to explain their decisions at all or offered boilerplate justifications, citing, for instance, the presence of “confidential and privileged information” in a case file. They also frequently sealed entire files when a more targeted approach would suffice.

For this story, Newsday identified 311 sealed cases that originated in Nassau and Suffolk state Supreme Courts over comparable 10-year periods. Two-thirds involved guardianships, the remainder a range of other civil actions.

Newsday got copies of sealing orders in 261 of the 311 cases and found that:

  • Orders in half the cases that did not involve a guardianship simply declared a case sealed or cited the rule without providing any grounds for confidentiality. In these cases, some naming public agencies, financial firms and major health care providers as parties, judges’ orders clearly fell short of what the sealing rule demands.
  • In 200 orders, judges relied on generic phrases that were duplicated from one order to another. Most involved guardianships in Suffolk and used language lifted verbatim from the relevant law without reference to the cases at hand.
  • In only 14 instances — 5 percent of the 261 orders — did the judge make specific findings substantially tailored to the case being considered.
  • In 35 of the 311 cases, all but four of them in Suffolk, judges decided an even higher degree of secrecy was needed — they sealed the order sealing the case, making it impossible to know whether the rule was honored.

To assess the relevance to the public of concealed information, Newsday a month ago asked state court leaders to turn over the 35 sealed orders and to open up 45 cases that Long Island judges sealed improperly.

Court officials have yet to respond to Newsday’s requests.

Questions left unanswered

A dangerous doctor, a regulatory agency and a taxpayer-funded nonprofit were spared public scrutiny when judges seeking to protect the identity of young victims sealed entire case files rather than simply removing names and other personal identifying information from records, Newsday found.

Consider the case of Dr. Mohan Sharma, which has never been reported in the press. Police arrested Sharma in January 2013 on charges of forcibly touching a woman at his medical office. Sharma’s attorney reported the arrest to the state Office of Professional Medical Conduct, which regulates doctors.

Police arrested Sharma again in October 2013, this time on charges of having sexually assaulted a mentally disabled female patient at his office, a felony. Soon after, the medical conduct agency barred Sharma from practicing, records indicate, and by the end of the year he had sold his Nesconset practice.

The family of the disabled patient filed a lawsuit against Sharma in 2014, alleging that he had repeatedly drugged and assaulted the young woman, identified as Jane Doe.

With the case sealed, it’s impossible to know whether it holds any clues to why the medical conduct agency, in contrast to its actions in other criminal cases, allowed Sharma to continue seeing patients for nearly a year after his first arrest. An agency spokesperson declined interview requests, saying officials were barred from discussing investigations.

Knowledge of the hidden case could have been critical to Sharma’s patients in a variety of ways, from alerting them to the alarming charges against their doctor, to motivating them to step forward if they themselves had been victimized.

Ultimately, the criminal charges against Sharma were dropped, said his attorney David Besso, after several psychiatrists found that his client was suffering from a degenerative brain disorder. Besso said Sharma was not in a condition to answer questions from a reporter.

When he sealed the case, Nassau Judge Thomas Feinman gave no basis for doing so. After being contacted for this story, he amended his order to state that the public interest failed to prevail over confidentiality concerns because the case involved sexual assault in which both perpetrator and victim were of “diminished mental capacity.” He declined to be interviewed.

Allegations at a nonprofit

Another case in Suffolk involved Long Island Child & Family Development Services, a taxpayer-funded nonprofit known locally as Head Start. A mother charged that her daughter had been sexually abused at the program, which readies disadvantaged kids for school. Judge Emily Pines, in a 2010 order, sealed the case because it involved “allegations of sexual assault against a minor.”

Head Start attorney David Cohen said the case occurred before he began working for the nonprofit and he knew few details, but two children were involved and no adult Head Start employee was an alleged perpetrator.

The identity of children in such litigation, as well as trade secrets and personal medical histories, is information that few argue should ever be available to the public.

Pines, however, could simply have redacted the names of children and any other identifying details. With the whole file sealed, it’s impossible to assess the agency’s response to the alleged sexual assault of a child in its care or whether negligence by Head Start, which provides services to hundreds of low-income children at sites throughout Suffolk, played a contributing role in the incident.

In an interview, Pines, who is no longer a judge and serves as chief of staff to the Brookhaven town supervisor, said she could not recall specifics of the case and why she sealed the entire file.

In many instances, such as the 33 sealed cases Newsday identified that involved government agencies, the identities of the litigants alone suggest that judges concealed matters of public concern. One case from 2007 appears to involve the Suffolk Police Department’s hiring practices. Another from 2008 is a Suffolk election law case in which the Democratic Party sought to oust a maverick contender, Jimmy Dahroug, from the ballot.

Attorney Jerry Goldfeder, an election law practitioner for 35 years who has written and taught on the subject, said it’s “extraordinarily rare” for a judge to seal such a case and that he knew of only one other instance in the state.

In an interview, Dahroug said he did not ask for the case to be sealed.

“I think the judge took it upon himself to do it,” he said. “I don’t know what his reasoning was.”

Neither does the public, because the judge, Jeffrey Arlen Spinner, gave no explanation in his order for why he sealed the case, as required. The same is true of the police department hiring case, which Spinner also heard.

Another 2008 action involved an anonymous John Doe and the Suffolk Board of Ethics. Judge Thomas F. Whelan did not issue a written sealing order in that case but simply declared the matter confidential from the bench at the apparent urging of an assistant county attorney. Whelan gave no basis for his decision, according to a transcript of the hearing.

Both Whelan and Spinner declined to be interviewed.

Other government agencies named in cases that judges sealed include the state Department of Health and the state’s Office of Children and Family Services, the Village of Freeport, the Suffolk Department of Social Services and four school districts.

A death at a day care

Though personal privacy was often given as a justification for sealing, Newsday’s examination found that judges sealed cases even when details were already public.

In 2009, for instance, 2-year-old Olivia Raspanti choked to death on a carrot at Carousel Day School, a Hicksville day care center. The case was widely covered in the press, and Carousel’s owner and an assistant director pleaded guilty to running an unlicensed day care center and reckless endangerment, respectively.

Nassau Judge Bruce Cozzens in 2012 sealed a civil case that arose from the death because it was in the “best interests of the estate.” Cozzens did not mention the public’s interest in the case, particularly that of parents who may want to learn more when deciding whether to send their kids to the day care, which continues to operate and is now properly licensed. Cozzens declined to be interviewed.

Carousel Day School and the Raspanti family’s attorney did not respond to interview requests.

Another case involved Dennis McCormack, a self-described Catholic bishop who held services in Latin in a Plainview American Legion hall. McCormack was convicted in 2010 of committing a sex act with a parishioner under the age of 17. His arrest was covered in the press, though his victim was not named.

In 2010, a lawsuit was brought anonymously against McCormack and several Catholic organizations, including the Legion of Christ, a target of Vatican criticism that year for its handling of a sex abuse scandal involving its founder. McCormack attended a legion seminary from 1986 until 1990, said Legion of Christ spokesman Jim Fair.

Judge Thomas Adams, now Nassau’s chief judge, sealed the case in 2011 based on a provision of the state civil rights law meant to protect the identity of sex abuse victims. It’s often used to allow victims to bring lawsuits anonymously, but Adams used the provision to seal the entire file. As a result, what the Catholic groups named in the lawsuit may have known about prior incidents or allegations of abuse, if any, by McCormack and their responses to his crime are hidden.

Fair said he had no details on the lawsuit and could find no indication of abuse problems concerning McCormack, who declined to discuss the case.

Another case, in 2003, involved a former executive at Wyckoff Heights Medical Center in Brooklyn who alleged she was fired after attempting to alert medical authorities that she believed negligence by the hospital had contributed to patient deaths. The case made news, but with all files sealed, it’s hard for the public to gauge the culpability of Wyckoff Heights or whether the hospital retaliated against a whistleblower who had leveled serious charges.

A spokeswoman for the hospital said she could not comment because the case is sealed.

Newsday found 55 sealed actions involving nursing homes and hospitals, including large regional institutions like Nassau University Medical Center and North Shore-LIJ Health System, which now operates as Northwell Health.

A more recent example involves Bill O’Reilly of Fox News.

In May, the erstwhile news and gossip website Gawker reported that O’Reilly planned to sue his ex-wife seeking upward of $10 million in damages. O’Reilly had sought to anonymously file the lawsuit, which alleges that his ex-wife “fraudulently induced” him into a consensual divorce “to obtain money and real property to finance an existing extramarital relationship.”

That request was struck down, Gawker reported, but on June 1, Nassau Judge Roy Mahon sealed the case, making records that had been public confidential. Gawker has challenged Mahon’s sealing order in court, but since the news site closed in August, it’s unclear what will become of the effort. A successor entity to Gawker may continue the legal fight to open the case.

O’Reilly’s lawyer, Fredric F. Newman, did not return calls.

Newsday has asked state court leaders to provide the sealing order in the O’Reilly matter to determine whether it complies with the rule, as it has in 35 similar cases.

Though records in the O’Reilly case are sealed, the electronic case management system at the Nassau clerk’s office still catalogs the lawsuit. Search by party name or the case number at public computer terminals and a docket entry appears, as it did for the other sealed cases that Newsday identified.

Some cases in Nassau, however, have not left even this modest trace. Clerk’s office records state that from 2002 through this year, four cases have been completely withheld from the public docket due to “security restrictions.” Newsday has asked state court officials to explain what is meant by the term and to justify maintaining what appears to be a secret docket of civil actions. They have yet to respond.

Jane E. Kirtley, a professor at the University of Minnesota and director of its Silha Center for the Study of Media Ethics and Law, said court leaders “need to have a good explanation for this.”

“Court dockets are supposed to be, historically have been and are presumed to be public, for good reason,” Kirtley said. “It’s their responsibility to justify the deviation from the norm. Meaningless phrases like ‘security restrictions’ are not sufficient.”

Judges differ on seal

The sealing rule was designed in part to fix a problem: judges sealing cases just because one or both parties want it to happen and without considering whether confidentiality best serves the public. Despite the rule’s intent, Long Island judges repeatedly cited the desire of parties to seal as sufficient reason.

That is what happened in the Landberg case. When Judge Gary Weber in Suffolk sealed the lawsuit against the investment adviser, which sought to recover a $461,000 debt and alleged that he had engaged in fraud to dodge creditors, Weber’s two-sentence order noted that “no opposition was submitted” to Landberg’s request.

Portions of Judge Feinman’s 10-page ruling in Manhattan denying Landberg’s sealing application read like an unwitting rebuke to Weber. “Sealing is a decision for the court,” Feinman wrote, “regardless of the wishes of the parties.”

While Weber’s ruling makes no mention of the public’s interest, Feinman was unequivocal in his decision: “The investing public has a right to know of any alleged wrongdoing by investment firms, even if that wrongdoing is unfounded, given that investing money requires as much information as possible.”

Weber and Feinman, who made their contrasting decisions in 2007, declined to be interviewed.

Landberg pleaded guilty to securities fraud in 2011, said goodbye to his Hamptons home and luxury Fifth Avenue apartment, and went to federal prison. None of the $66 million his investors lost has been repaid, court records state. Landberg was released from prison a year ago. Attempts to contact him were unsuccessful.

Michael Raounas of Southampton, who lost nearly $5 million, his entire life savings, as a result of Landberg’s crimes, expressed disbelief that judges responded so divergently to the investment adviser’s sealing requests.

“If in the legal system, one judge says A, another judge says B, it’s a contradiction,” said Raounas, 73. “The judges in New York are different than the judges in Suffolk County? I don’t understand it.”

Methodology

For this story, Newsday identified 311 sealed cases that originated in Nassau state Supreme Court from 2003 to 2014 and Suffolk state Supreme Court from 2005 through early 2015. Newsday did not look at sealing in town, village or district courts.

Neither Nassau nor Suffolk Supreme Court formally track sealed cases. The 311 cases were identified using a code for sealing orders in Nassau’s electronic case management system and notes that clerks made to case minutes in Suffolk’s system, but there is no way to be sure that all sealed cases were found.

Newsday found portions of some sealed cases attached as exhibits in other lawsuits, allowing the curtain to be pulled back a bit. In other instances, despite sealing orders, partial files were available on the state court system’s website. Some sealing orders also offered a glimpse into a case, though in many instances the order was so vague it was impossible to tell what a case was about.