Ex-SEC Enforcement Chief Khuzami Named No. 2 N.Y. Prosecutor

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  • Khuzami spent 12 years as Manhattan federal prosecutor
  • Appointment could address concerns of prosecutor’s conflicts

The Trump Justice Department pressed ahead with a leadership makeover atop the federal prosecutor’s office that oversees Wall Street, naming a former Securities and Exchange Commission enforcement chief to the No. 2 post in the U.S. Attorney’s office in Manhattan.

The appointment of Robert Khuzami as deputy U.S. attorney was announced Friday by Geoffrey Berman, whose installment as interim Manhattan U.S. Attorney two days earlier drew criticism from Democratic lawmakers.

Khuzami previously spent 12 years as a Manhattan federal prosecutor, including three as chief of the securities fraud unit, until 2002. Earlier in their careers, Khuzami and Berman worked as federal prosecutors in Manhattan and remain close friends.

The Manhattan office handles major financial, public corruption and international terrorism cases, making it perhaps the U.S. Justice Department’s most elite outpost. Berman’s appointment, announced Jan. 3, has stirred criticism because it didn’t follow the traditional path of Senate nomination and confirmation, and raised questions about whether he could act independently from the Trump administration. 

New York Senator Kirsten Gillibrand called the appointment of Berman -- a member of President Donald Trump’s transition team and a partner of Trump confidant Rudy Giuliani at the law firm Greenberg Traurig -- “deeply disturbing considering the conflicts of interest inherent by his potential jurisdiction on matters that could affect the president personally.” She pointed to press reports that Trump had personally interviewed Berman -- an unusual move that raised eyebrows among critics.

The office’s role overseeing the global financial capital of New York -- and the president’s hometown -- creates potentially tricky situations. It is involved in several investigations potentially affecting Trump, including one of Deutsche Bank AG, where Khuzami worked from 2002 to 2009 as general counsel of its Americas unit.

Respected Veteran

In bringing back a veteran of the office and a respected enforcement figure, Berman’s move may assuage many of those concerns. At the SEC from 2009 to 2013, Khuzami, 61, helped overhaul the agency after it was battered for lax enforcement leading up to the financial crisis, expanding investigators’ power and creating specialized units to police Wall Street.

During his years as a federal prosecutor, Khuzami was known for a series of high-profile terrorism cases, including that of Sheikh Omar Abdel-Rahman, the Egyptian cleric tied to the 1993 World Trade Center bombing. Khuzami was awarded one of the Justice Department’s highest honors for his work on the case. In 2000, he helped convict Patrick Bennett, the former chief financial officer of Bennett Funding Group Inc., in an equipment-leasing fraud that sent him to prison for 22 years.

Since 2013, Khuzami has been a partner in the government and internal investigations practice at law firm Kirkland & Ellis. He didn’t immediately respond to a message left at his law office.

It’s unclear whether Khuzami would be involved in cases involving Deutche Bank. The bank is the subject of a long-running criminal probe by Manhattan prosecutors and the Justice Department into trades that U.S. authorities have said helped move some $10 billion out of Russia from 2011 to 2015. The investigation promises to be the last and potentially biggest reckoning for the bank over trades that U.K., U.S. and New York state regulators have already faulted for lax money-laundering controls. 

A 1983 graduate of Boston University School of Law, Khuzami spoke at the 2004 Republican National Convention calling for the extension of the Patriot Act and supporting the re-election of President George W. Bush.

— With assistance by Matt Robinson, and Greg Farrell

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