Ex-CDR Chief Rubin Seeks to Avoid Prison for Bid RiggingPatricia Hurtado
CDR Financial Products Inc. founder David Rubin, who pleaded guilty in a municipal bond bid-rigging scheme, is seeking house arrest or community service instead of the more than 19 years in prison recommended by U.S. officials, according to court papers.
Rubin, 52, pleaded guilty on behalf of himself and his Beverly Hills, California-based firm in 2011, admitting he took kickbacks for running sham auctions for investments as part of a federal probe of bid and auction rigging in the municipal bond market.
Bank of America Corp., JPMorgan Chase & Co., UBS AG, Wells Fargo & Co. and General Electric Co. previously acknowledged in the U.S. government’s multiyear investigation of bid-rigging on investment contracts that former employees engaged in illegal activity. The companies paid $743 million in restitution and penalties.
Lawyers for the U.S. Justice Department’s Antitrust Division, which prosecuted the case, said in papers filed with U.S. District Judge Kimba Wood in Manhattan that Rubin should pay more than $11.5 million in restitution to at least 99 victims whose losses remain uncompensated. Prosecutors didn’t make public their sentencing letter to the court describing Rubin’s cooperation.
After he pleaded guilty, Rubin agreed to aid the federal probe and testified at the 2012 trial of former UBS managing director Peter Ghavami and two former colleagues. All three men were convicted of rigging bids for contracts for investing proceeds of municipal bond sales and sentenced to prison terms. Ghavami was sentenced to 18 months in prison.
“On Dec. 20, 2011, David accepted responsibility for his wrongdoing and entered guilty pleas,” his lawyer Bradley Simon said in a memo to the court filed on Jan. 31. “The guilty pleas are a black stain on an otherwise exemplary life.”
The defense lawyer urged the court to impose a sentence didn’t include incarceration. Descriptions of Rubin’s family life and unusual circumstances were redacted in the publicly filed document. Just before he pleaded guilty in December 2011, Rubin had unsuccessfully sought to have his trial postponed because his wife was in the final stages of terminal cancer.
“We respectfully ask your honor to impose a non-incarceratory sentence, whether that be probation, home confinement, a monetary fine, community service or any combination of the above -- any alternative sentence that the court deems appropriate,” Simon said in court papers.
Rubin is scheduled to be sentenced by Wood on March 6. Simon declined to comment on Rubin’s sentencing.
Rubin and CDR both pleaded guilty to two counts of conspiracy and one count of wire fraud, according to the government. Rubin, CDR’s sole shareholder, pleaded guilty for the company.
The case is U.S. v. Rubin/Chambers, Dunhill Insurance Services Inc., 09-cr-01058, U.S. District Court, Southern District of New York (Manhattan).