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Freedom still elusive for U.S. defendant linked to Panama Papers

The Thurgood Marshall Courthouse in lower Manhattan, where former hedge fund manager, Chetan Kapur, once a Wall Street whiz who lost millions in his investors’ money, was to have been the venue for a status hearing on Kapur’s case. He’s spent more than a year in jail for not cooperating in a probe of his business.
The Thurgood Marshall Courthouse in lower Manhattan, where former hedge fund manager, Chetan Kapur, once a Wall Street whiz who lost millions in his investors’ money, was to have been the venue for a status hearing on Kapur’s case. He’s spent more than a year in jail for not cooperating in a probe of his business. McClatchy

A federal judge on Thursday delayed a key status hearing for the only person in the United States known to be prosecuted in connection with the Panama Papers.

The court action, taken at the request of the defendant, Chetan Kapur, means the India-born New York investment manager will stay behind bars at least until next month. He’s been held at a Brooklyn jail since July 2015 on contempt charges for refusing to cooperate with a judge over secret offshore accounts that lawyers say belong to him.

Those accounts and secret companies were revealed in a now-famous breach of internal documents from the Panamanian law firm Mossack Fonseca, also known as the Panama Papers.

Friday was supposed to be the third status hearing since the one-year anniversary of Kapur’s jailing, but U.S. District Judge Paul Engelmayer accepted a motion to postpone the hearing and set a new date for Nov. 9, one day after U.S. elections.

To date, Kapur has not shown that he has taken any efforts to comply with the Court’s Orders.

SEC letter to Judge Paul Engelmayer.

In a Thursday electronic filing to Judge Engelmayer, the Securities and Exchange Commission outlined a litany of orders from the judge that the agency said have been ignored by Kapur, and asked that Englemayer haul him back into the courtroom.

“The focus of the status conference is Kapur’s efforts to purge contempt (charges). Kapur’s appearance at the hearing can help his counsel provide answers to these questions,” Michael J. Roessner, the SEC’s assistant chief litigation counsel, argued in a letter to the judge. The SEC also filed a formal request for an order that would allow the U.S. Marshals Service to “use such force as is reasonably necessary to bring the defendant to Court for his appearances.”

Kapur, once a high-flying investment manager, had been led into the previous two hearings shackled and wearing jail garb.

His contempt jailing involves failing to make restitution to investors in a civil settlement he reached with the SEC in late 2011. The owner and operator of ThinkStrategy Capital Management, he has drawn the judge’s ire for failing to provide his email passwords for Google accounts and information contained on a cellphone that would enable the court to learn more of his offshore involvement.

Lawyers for investors who lost money with Kapur have told the court they think offshore companies found in the Panama Papers were used to help Kapur and his brother Kabir shield at least $4.3 million held in at least three bank accounts at the Swiss banks Bank Vontobel and Bank J. Safra Sarasin. Kapur has maintained he can’t make restitution because he lost money alongside his investors.

Leaked documents from Mossack Fonseca show that Kapur transferred ownership of some of the assets in 2012 to his brother after authorities brought criminal charges. The judge asked in July and September for Kapur to produce more information about the offshore companies, Swiss bank accounts and ordered him to provide access to his email records.

“The Commission has not received any more information from Kapur regarding his efforts to repatriate the assets held at Banks Vontobel and Sarasin,” Roessner argued in the Thursday letter to the judge.

Kevin G. Hall: 202-383-6038, @KevinGHall

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