Stunning: Craig Carton's attorneys file motions to dismiss securities fraud charges & to suppress warrant


Gottlieb and Jeaney, attorneys at law on Broadway in NYC, filed 2 stunning motions Friday on behalf of client Craig Carton (above). The first is a memo supporting a Motion to dismiss the indictment of securities fraud for failure to state an offense.

Some highlights:

Count three (securities fraud) fails to allege an essential element - intent - to misappropriate investor funds at either the time Mr. Carton solicited the subject investment (i.e., the loan) from the Hedge Fund and/or when the loan agreement was made, and therefore fails to state an offense.

The indictment starts off with a broad statement about the Hedge Fund's investment into the legitimate ticket resale business without alleging any intent on the part of Mr. Carton to commit securities fraud at the time of the Hedge Fund's investment.

Over the course of Mr. Carton's business relationship with the Hedge Fund, thousands of tickets were sold. The hedge fund was given unfettered access to independently review an online third-party platform to check the corresponding ticket sales and financial results in real time. If anything the indictment describes a legitimate commercial arrangement for the financing of live event tickets to be resold into the secondary ticket market." (Further and from another motion filed by Mr. Carton, "The Government now concedes that Mr. Carton managed a legitimate ticket resale business and had purchased and sold these tickets for years.")

Which makes one wonder, if the hedge fund was able to track all sales and financial info in real time how could Craig be accused of intending to defraud them? The government accused Craig of not having any tickets and never selling any -- the fact that his attorneys say that he can prove he sold thousands of tickets would disprove the heart of the government's case and accusations against Carton, no?

Oh, and without intent...there cannot be fraud.

And for Boomer & Carton fans - If Carton had a legit business that sold thousands of tickets as Friday’s court documents suggest did anyone at CBS / Entercom ever ask Craig about the charges (or ask to see evidence from their employee that might just be proof of his innocence)? They could have actually backed him up and kept him employed if they had.

Here is the full motion to dismiss Carton's Securities Fraud charges. (And it's worth the long read as we did not reproduce all info here.)

On to the Motion to suppress the warrant for Craig Carton's iPhone:

Search warrant purports to establish Mr. Carton's alleged involvement in wire fraud and securities fraud by way of alleged communications involving Mr. Carton before March 2017. However, Mr. Carton did not acquire the subject IPHONE until in or about March 2017 - a fact acknowledged by Special Agent Sean Sweeney of The FBI. Special Agent Sweeney concedes that any purported basis to search and seize Mr. Carton's IPHONE predates March 2017.

The crux of the Search Warrant's basis for probable cause is pure conjecture.

The unconstitutional fishing expedition into Mr. Cartons IPHONE and his private life must not be permitted.

If the FBI Agent admits that the iPhone they searched was purchased after March and that the evidence they were looking for took place prior to March...it seems outrageous that they were allowed to search it in the first place. And those Boomer & Carton fans with good memories may recall the March 17, 2017 St. Patrick's Day broadcast from Connolly’s in Midtown. Carton's phone died that day during the program.

Here is the full motion calling on the court to suppress Craig Carton's phone search warrant.

Carton, of New York, New York, is charged with one count of conspiracy to commit securities fraud and wire fraud, one count of wire fraud, and one count of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. (The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.)

One can see -- if both, or even one of these motions is won...a large foundation of the government's case would disappear. Joon H. Kim was the acting United States Attorney for the Southern District of New York at the time charges were filed against Carton. Geoffrey S. Berman has since taken over. Have to wonder if he has reviewed the indictment and does Mr. Berman think the case is as strong as his predecessor...who put out the press release saying Carton never sold any tickets.

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