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Paul takes the fall? Accused of securities and bank fraud, colorful Hollywood promoter Peter Paul says he was targeted as the bad guy at Stan Lee Media Inc. to protect, among others, Bill and Hillary Clinton and the fund-raisers of the Democratic Party

1 Comment | Insight on the News, Oct 1, 2002 | by Paul M. Rodriguez

What do Bill and Hillary Clinton, alleged mobsters, Stan Lee, presidential pardons, federal indictments for fraud, the Democratic Party and Hollywood luminaries such as Barbra Streisand, John Travolta, Cher and Diana Ross have in common?

The answer is a man charged with robbing Peter to pay Paul through an elaborate scheme of alleged securities and bank fraud that involve the creator of Spiderman and the X-Men comic superheros, securities firms such as Merrill Lynch and Spear Leeds & Kellogg, political heavyweights David Rosen, Aaron Tonken and Terry McAuliffe.

Now, the 54-year-old Peter Paul, aka Eric Becket, aka Solomon Posnack, who claims to have been Sen. Hillary Clinton's (D-N.Y.) single largest donor, sits in a prison in Silo Paulo, Brazil. Paul is awaiting extradition to the United States, he has said in interviews with INSIGHT, to defend himself against two multicount federal indictments and at least one class-action lawsuit brought by shareholders of now-bankrupt Stan Lee Media Inc. (SLM).

As the New York Post reported in April, Paul has been in negotiations with Department of Justice (DOJ) officials about a possible plea deal. INSIGHT has confirmed that DOJ sent investigators to Brazil to speak with Paul and that his lawyers in Washington and New York are in contact with senior prosecutors who sources say are conducting a high-level inquiry into possible money-laundering and campaign-law violations.

What ties all this together is Paul himself and his attempts during the summer of 2000 to wheel and deal in the rarified atmosphere of Washington politics. He says he entered the fund-raising business to promote and protect the company he cofounded with legendary comic-book-hero creator Stan Lee. His goal was to get outgoing President Clinton interested in joining the board of SLM.

To do this, according to Paul, he was courted and then snookered by Democratic Party bigwigs into playing host to and paying for increasingly expensive political events, luncheons, dinners--and then a star-studded Hollywood tribute to Bill Clinton in August 2000 that was twinned with a massive fund-raising drive for Hillary Clinton's senatorial bid in New York.

All in all, based on volumes of bank ledgers, canceled checks and securities margin-account statements reviewed by INSIGHT, Paul spent nearly $2 million to entice political heavyweights to promote SLM. This included at least one luncheon at Spago's, the trendy Hollywood restaurant where he played host to Hillary Clinton.

To pay for such extravaganzas, Paul tapped into margin accounts he held at Merrill Lynch that were collateralized by about 3 million shares of SLM stock he had acquired as a cofounder of the company, an Internet startup that promoted and distributed new products by pop-culture artist Lee.

As with countless other startups in the go-go Clinton era, hype generated interest that attracted some of the brightest and wealthiest to SLM. Banks and securities dealers such as Merrill Lynch and Spear, Leeds & Kellogg eagerly embraced the venture. Now, of course, after the bursting of the tech bubble and exposure of corporate scandals involving Enron, WorldCom, Global Crossing and others, fingers are pointing among officers and directors of boards, banks, securities firms and accounting companies.

No doubt it appears to shareholders that those caught up in this debacle are saying that it's everyone's fault except that of the millionaires and former millionaires who ran these companies or were supposed to scrutinize and ensure responsible finance. Not only the company managers but the securities firms through which billions of dollars flowed, often through margin accounts pumped up with stock that quickly became worthless, have drawn investor ire and fallen under intense scrutiny.

Questions being asked include: where were the controls, who was in charge and didn't anybody examine the books? These also are questions that entrepreneurs such as Paul are raising about their own lost companies and legal peril.

"Why should I get the short end of the stick while people who were officers of Stan Lee Media, the board of directors, the supervisors at Merrill Lynch and the accountants get off scot-free?" Paul asks. There were no answers when INSIGHT asked these questions to learn how Paul could have been allowed to conduct affairs virtually single-handed that, according to prosecutors, led to the collapse of SLM and a class-action shareholder lawsuit.

Interestingly enough, in none of the documents produced by federal prosecutors in statements or indictments, or in the shareholder class-action case, is there any mention of Paul's significant political activities, including the expenditure of the nearly $2 million to play host to and fund events on behalf of the Democratic Party, President Clinton and Hillary Clinton's Senate campaign. Nor is there so much as a hint of Paul's claim that he was offered a pardon for past crimes in return for political donations.

While the indictments allege that all of Paul's companies and activities were part of a conspiracy to defraud SLM, not a single event or financial transaction involving his voluminous political gift-giving is mentioned. Neither is there mention of audit-control failures at SLM or possibly Merrill Lynch, for example, to catch the alleged illegal activities. Former SLM officers have said Paul snookered them, while Merrill Lynch reportedly was surprised by the fraud because of misbehavior by a now-fired (and indicted) employee. The stories in the aftermath, in short, are similar to those being told again and again throughout the world of the former go-go promoters when asked where the money went.

 
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    08/09/09 | Report as spam

    PETER PAUL TAKES THE FALL

    Former Stan Lee Media Executive to Start Serving a 10-year Sentence on September 30, 2009 After Pleading Guilty to Securities Fraud

    Beverly Hills, CA ? Peter Paul, the controversial disbarred attorney, convicted felon and former executive of Stan Lee Media was recently sentenced to ten years in prison (United States District Court, Eastern District of New York, Case No. CR 01-00636(S-2)-01 (LDW)). The court imposed restitution in the sum of $3,828,057.56 to be paid to Merrill Lynch as well as $7,650,977.76 to Spear, Leeds & Kellogg. Peter Paul was ordered to self-surrender to the US Marshals on September 30, 2009 to start serving his sentence in federal prison. The media largely ignored this latest development in an overdrawn legal saga involving legendary Stan Lee, Peter Paul?s extradition from Brazil, as well as generous side helpings of accusations against the Clintons and criticism of a federal judge A. Howard Matz, a Clinton-appointee.

    While the mainstream media grew tired of the subject matter, Peter Paul and his associate Doug Cogan (whose online moniker is ?Doug from Upland?), continue to flood the Internet with series of blogs and postings pertaining to endless legal battles that could best be described as Peter Paul vs. The World. In one of their latest narratives, they describe Paul?s sentencing hearing as ?surreal?. That is quite an accurate description for the events surrounding litigation over the rights to Spider-Man and other Marvel superheroes, brought about by Peter Paul?s affiliates.

    Stan Lee called those copyright claims bogus and accused Peter Paul of masterminding the litigation in question. Relevant legal filings show that Peter Paul?s associate John Petrovitz is soliciting funding for the lawsuits against Marvel and Stan Lee, by shopping litigation financing proposals to prospective investors. These solicitations, adorned with full regalia of Stan Lee?s signature, logo and other trademarked/copyrighted images claim that ? Stan Lee Media Inc is the owner of all IP Rights and Claims ever created by Stan Lee during his 60 year career with Marvel Comics ... including Spider Man, X-Men, The Incredible Hulk, Ironman, Fantastic Four among many others? and state that ?Stan Lee Media is seeking to obtain the resources necessary to maximize its legal recovery against Marvel Entertainment?.

    To bolster the group?s attempts to garner financial backing for their lawsuits, Peter Paul and Doug Cogan appear to be leading the effort to put a positive spin on the litigation in question through Internet blogs and forum postings.

    These articles would lead you to believe that Stan Lee is the true villain in this story, Peter Paul is an innocent ?fall guy? and that the group of Stan Lee Media shareholders is prevailing in the ongoing litigation. Interestingly enough, court rulings show that Doug Cogan and John Petrovitz are not (and never have been) either shareholders or officers of Stan Lee Media. In fact, all legitimate directors and officers of SLMI had resigned and the corporation was dissolved. Additionally, according to court filings, ?SLMI has no interest whatsoever in any creation of Stan Lee.? Petrovitz and Cogan have unsuccessfully attempted to revive the corporation and to appoint themselves as its new directors, even though they never had any standing in the company.

    That bumpy ride ended when the court determined that Stan Lee Media remains a dissolved corporation, since Petrovitz and Cogan ?did not properly revive and assume control? of the company and ?were not properly elected its directors and officers?. Judge Stephen V. Wilson further ruled that Petrovitz, Cogan and Paul ?have no legal right to utilize any assets of SLMI? (United States District Court, Central District of California, Case No. 07-CV-00225-SVW (SSx)).

    In the same case, Stan Lee charges Peter Paul, John Petrovitz and Doug Cogan with copyright infringement, trademark infringement, federal trademark dilution and cybersquatting. The complaint states that ?Cogan, Blumen, and Petrovitz ? aided and abetted by Paul?have among other things: (a) falsely and fraudulently masqueraded as controlling officers of SLMI-CO?(b) misappropriated, infringed and interfered with copyrights, trademarks, publicity rights and contract rights owned exclusively by Stan Lee and his companies; and (c) asserted bogus claims in the name of SLMI regarding co-ownership of other valuable copyrights, such as copyrights in the characters Spider-Man, The Incredible Hulk, The Fantastic Four, and many others, all of which are claims that ?Cogan, Blumen and Petrovitz knew, or ?should have known, through one of their co-horts (Paul) are false.?

    Stan Lee?s lawsuit states that ?Paul is a convicted felon and is the mastermind behind the Individual Defendants? actions?Paul approached various individuals?and offered inducements?soliciting money to finance?an illegal attempted takeover of SLMI and the scheme to misappropriate valuable copyrights and other assets?Petrovitz was made ?president? of Stan Lee Studios, a company improperly formed by Defendants to exploit Stan Lee?s name?likeness and creations, including, but not limited to, Stan Lee?s trademarked sign-off ?Excelsior!? Petrovitz?is raising money to fund their counsel, and is raising money to fund their scheme to steal intellectual property rights of Stan Lee and his companies by selling bogus licenses of his creations to other media and entertainment people and entities. Indeed, Petrovitz?has been publicly peddling a piece of literature?designed to raise additional money to fund their illegal activities. This piece is false ? and Individual Defendants know it?Petrovitz?has illegally created an entity called ?Stan Lee Media Studios, ? and has issued business cards showing Stan Lee?s likeness on the back of the cards along with Stan Lee?s sign-off ?Excelsior!??Stan Lee never authorized nor knew of Defendant Petrovitz? knowing usurpation of his name or likeness until June 4, 2008, when he became aware of Petrovitz?s acts?At no time have Plaintiffs authorized Individual Defendants, or any of them, to copy, distribute, license or exploit in any way the marks or Properties described above.?

    It?s hard to tell what impact Peter Paul?s impending imprisonment will have on the ongoing litigation, especially since on 04/27/2009, Judge Paul A. Crotty terminated Petrovitz and Cogan as Plaintiffs in the lawsuit against Marvel and Stan Lee (United States District Court, Southern District of New York, Case No. 09-CV-0715 (PAC)).

    It?s also difficult to predict whether in his absence Paul?s associates will continue their attacks against Bill and Hillary Clinton, which stooped so low as to include vulgar slurs and sleazy accusations waged against Chelsea Clinton. The same modus operandi of attacking innocent family members was applied by the group in unsuccessfully suing Stan Lee?s wife and daughter. Every super hero story needs a super villain. Stay tuned for future updates.

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