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Securities and Exchange Commission v. Bilzerian

November 1, 2010

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
PAUL A. BILZERIAN, ET AL., DEFENDANTS



MEMORANDUM OPINION ON RECUSAL

I. INTRODUCTION

This matter is here on Paul A. Bilzerian's Motion to Recuse Judge Lamberth. Mot.

Recuse, August 24, 2010, ECF No. 1106. Having considered the Motion to Recuse and the relevant law at length, the Court will deny the Motion for the reasons that follow.

II. BACKGROUND

This Court has summarized the background of this decades-old case many times and only repeats the facts relevant to this decision. A more detailed chronicling can be found at SEC v. Bilzerian, 613 F. Supp. 2d 66, 68--69 (D.D.C. 2009).

More than twenty years ago, a jury sitting in the United States District Court for the Southern District of New York convicted Bilzerian of securities fraud and conspiracy to defraud the United States. United States v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991) (affirming conviction). Bilzerian was sentenced to four years' imprisonment and fined $1.5 million. Id. The SEC then filed a civil suit against him, and this Court ultimately ordered him to disgorge $62 million in ill-gotten gains. SEC v. Bilzerian, 29 F.3d 689 (D.C. Cir. 1994) (affirming judgment) (ruling for the SEC in its civil suit against Bilzerian); SEC v. Bilzerian, 814 F. Supp. 116 (D.D.C. 1993) (ordering disgorgement of $33 million in profits), aff'd,29 F.3d 689 (D.C. Cir. 1994); SEC v. Bilzerian, 1993 WL 542584 (D.D.C. 1993) (ordering disgorgement of $29 million in prejudgment interest).

Seven years later, with the judgment still unpaid, this Court held Bilzerian in contempt of the disgorgement order, SEC v. Bilzerian, 112 F. Supp. 2d 12 (D.D.C. 2000), aff'd,75 Fed. Appx. 3 (D.C. Cir. 2003), established a receivership estate "for the purpose of identifying, marshalling, receiving, and liquidating his assets," SEC v. Bilzerian, 127 F. Supp. 2d 232, 232 (D.D.C. 2000), appointed a receiver, id., and sent Bilzerian back to prison for continued noncompliance, SEC v. Bilzerian, 131 F. Supp. 2d 10 (D.D.C. 2001). Undaunted, Bilzerian and his agents continued to abuse the judicial system in a concerted effort to interfere with this Court's attempts to establish the sources and amounts of his assets. Mem. and Order 5, November 27, 2001, ECF No. 560. To put an end to their frivolous lawsuits, which had made progress in this case all but impossible, this Court issued an injunction prohibiting Bilzerian and his cohorts from filing lawsuits in any other court without this Court's permission. Order 2, July 19, 2001, ECF No. 416. Since then, they have been held in contempt-repeatedly-for violating that injunction. See, e.g., Order, May 11, 2009, ECF No. 986 (holding Bilzerian and David E. Hammer in civil contempt); Order, July 13, 2010, ECF No. 1091 (holding Bilzerian, Hammer, and others in civil contempt).

In response to being held in contempt twice, one of Bilzerian's agents, David E. Hammer, filed a Declaration of Compliance explaining that he had ceased his contumacious behavior and distanced himself as far as possible from Bilzerian. Decl. Compliance, July 15, 2010, ECF No. 1093. In his Declaration, Hammer warns me of what he describes as Bilzerian's murder plans. Specifically, Hammer states, Bilzerian told me that if Bilzerian outlives his wife, Bilzerian intends to go to Washington, murder Judge Lamberth, seek a jury trial, admit the intentional killing, but seek an acquittal on the basis of justifiable homicide. Bilzerian believes that an all-black Washington, D.C. jury will acquit Bilzerian when Bilzerian tells his sob story of what the government and this Court supposedly did to Bilzerian and his family.

Id. at 12. He goes on to report a Skype message Bilzerian sent to him in which Bilzerian discusses his plans to appeal this case. According to Hammer, the message is a preview of what Bilzerian wishes he could use as the opening line in his brief to the Court of Appeals:

I would like to start the appeal as follows: This appeal is likely the last peaceful stage of an ongoing war being waged over the past twenty-three years by multiple branches and numerous agencies of the United States government against Paul Bilzerian and his family, friends and their attorneys. Over these twenty-three years, the United States has employed every non-violent means available to it- whether illegal, dishonest, unconstitutional, unscrupulous or unconscionable- while sparing no financial or human resource to bully and ruin Bilzerian and his family, friends and their attorneys.

Id. at Ex. K.

Bilzerian denies that he made any such threat and points out that nothing in the Skype message above threatens anyone at all. Bilzerian's Resp. to Hammer's Decl. Compliance and Mot. Strike from R. 4, July 23, 2010, ECF No. 1094; Mot. Recuse 1, August 24, 2010, ECF No. 1106. He further explains that he hopes to publish an account of his trials and tribulations (literally and figuratively), and regrets that some of the judges with whom he has dealt in the past are no longer alive to read and potentially to answer his allegations against them. Bilzerian's Resp. Hammer's Decl. Compliance and Mot. Strike from R. 4, July 23, 2010, ECF No. 1094. Accordingly, he claims not only that he would never murder me, but that he hopes I remain in good health for a long time so that I, too, can read and respond to his future publications. Id.

Bilzerian files this Motion for my recusal because he says that in light of the alleged threat against me, a reasonable person would question my impartiality in this case. ...


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