UNITED STATES V. GREGORY BARTKO

EASTERN DISTRICT OF NORTH CAROLINA

This case has generated a lot of public interest since Bartko was convicted following a three week trialconducted in the Eastern District of North Carolina (“EDNC”) in November, 2010. Although from Atlanta, GA,

Bartko was indicted and convicted in North Carolina because his former client was responsible for a series of horrendous investment fraud schemes that bilked hundreds of investors out of over $30 million between 2000 and 2005. Bartko, a practicing lawyer for over thirty years, was retained by the perpetrator of the fraud schemes, Scott B. Hollenbeck (“Hollenbeck”), to defend his interests in a civil enforcement action filed against his client by the U.S. Securities and Exchange Commission (“SEC”). As it turned out, Bartko and a business associate he was partners with in a small private equity fund, were duped themselves into believing that the people they dealt with were legitimate and experienced investment professionals. As events ultimately unfolded in 2004-2005, Bartko’s client and others the client was associated with, were exposed as fraudsters, liars, and ultimately criminals. Bartko’s client, Hollenbeck and his de facto business partner, were also prosecuted and convicted two years before Bartko’s conviction arising from an investment scheme Hollenbeck was the lead salesman for years before Bartko became his lawyer.

Bartko drew the attention of federal authorities in the EDNC several years after his private equity funddiscontinued fundraising and returned all of the investors’ funds raised that were found to be tainted by Hollenbeck’s investment fraud. The only funds that were not able to be returned to investors were the six percent (6%) finders’ fees paid to the referral sources of the fund’s investors. For example, of the roughly $2.6 million raised by Bartko’s fund, all was returned to investors except $143,600 of the fees, most of which ended up in the hands of Hollenbeck in exchange for referring some of his investor clients to Bartko’s fund. Even though Bartkoengaged in a fully transparent process which resulted in a court supervised and approved method of returning funds to his investors, for reasons not totally clear, Bartko and his fund partner were targeted for federal prosecution in the EDNC.

As the federal investigators parsed through Bartko’s records related to the fund raising history of his privateequity fund, they found none of the usual luxury excesses often revealed in investment fraud prosecutions. There were no boats, planes, cars, hidden bank accounts, cosmetic surgeries or luxurious lifestyles. Investigators found legitimate companies that Bartko’s fund was working with that were engaged in due diligence and negotiations leading to funding designed to generate the returns contemplated by Bartko’s fund. Investigators also found that Bartko had willingly disclosed all of the fund’s investor communications and the refund process to the Atlanta District Office of the SEC, which office ultimately decided that Bartko had remedied the errors made in the fundraising process and there was no reason to continue an inquiry of Bartko or his fund. Why then was Bartko prosecuted and sentenced to federal prison for 23 years—a life sentence at his age?Some of the answers to these questions are unknown, but since his conviction and imprisonment, Bartko hasunearthed vindictiveness, concealment of evidence favorable to his innocence, serious professional misconduct by his lead AUSA, an abundance of perjured testimony by his former client, and outright obstruction of justice and false statements made to Bartko’s trial judge by Bartko’s lead AUSA. Before you conclude that most people convicted and sent to prison say the same thing, Bartko has demonstrated in his lengthy post-conviction proceedings in the EDNC that substantial evidence supports each of his assertions. Even Hollenbeck has since admitted under oath that he testified falsely during Bartko’s trial, committed perjury, and denied that he did so in order to curry favor with his own prosecutor who coincidentally was the same AUSA who engaged in a series of deceitful activities in Bartko’s own prosecution. In his recantation of his trial testimony (linked below as “Link 1”), Hollenbeck finally admitted that he was threatened by his prosecutor, given incentives to implicate Bartko in his own investment schemes, and did so in order to take advantage of his AUSA’s not so veiled indications that his cooperation would be rewarded with his own sentence reduction and his wife not being prosecuted as part of his investment schemes. For Hollenbeck, all of this came true. His 168 month prison sentence was reduced to a littleover nine years and his wife never had to face prosecution—all due to the prosecution’s satisfaction with
Hollenbeck’s testimony at Bartko’s trial.

All of the case information described above is fully documented in Bartko’s case records available for publicviewing in the EDNC and the Fourth Circuit Court of Appeals. These records include most all of the trial testimony, including Bartko’s own testimony, from his 13-day trial. Even on appeal, the Fourth Circuit found that Hollenbeck had in deed testified falsely at trial and that Bartko’s prosecutors withheld evidence from Bartko that they were required to disclose. But, on appeal, Bartko’s conviction was affirmed because the appellate court gave great deference to the opinion authored by Bartko’s trial judge denying his efforts to obtain a new trial due to the AUSA misconduct. But the Fourth Circuit took steps that are rarely seen in an appellate decision. The court forwarded copies of Bartko’s decision to the U.S. Attorney General’s Office and the Office of Professional Responsibility (“OPR”) of the Department of Justice (“DOJ”). The referral was made in August, 2013. Bartko has never heard from the Attorney General’s Office and only recently, after six years of litigation under the Freedom of Information Act with the OPR, Bartko gained access to the results of the investigation of his AUSA. The distinction between the misconduct known to exist at the time of Bartko’s appeal and during the investigation and what misconduct has been exposed since then, is compelling. Although it has taken Bartko over seven years of effort under the FOIA to gain access to investigatory case materials which reveal the egregious misconduct engaged in by Bartko’s lead AUSA, Bartko’s efforts have produced solid documentary evidence of just how prosecutors in the EDNC convicted a man who committed none of the offenses for which he stood trial.

Even after practicing law for over 30 years, Bartko is still learning a great deal about serious flaws in our criminal justice system. You can’t see these flaws on the nightly news or even on any number of popular true crime dramas on television. You have to experience it from where Bartko sits which is one of the reasons for the creation of this website. Federal prosecutors are well aware that if they can secure a conviction, either by trial or following entry of a plea, misconduct or wrong doing they may have engaged in to secure the conviction is almost never discovered nor are they ever held accountable. Courts routinely fail to scrutinize or even criticize government prosecutors.

Following his conviction and the discovery that the lead AUSA on his case withheld immunity/proffer agreements from Bartko’s defense team entered into with Hollenbeck and his wife, Bartko sought a new trial on the basis of the government’s blatant violations of the Brady Doctrine. In opposing Bartko’s efforts to secure a new trial, his lead AUSA gave an explicit declaration under penalty of perjury. The declaration unequivocally stated that the AUSA had no discussions with Hollenbeck or his lawyer concerning any sentence reduction or other benefits for his cooperation, until Bartko’s jury began deliberations on November 18, 2010. These statements are false and would ordinarily be subject to perjury prosecution since Bartko has uncovered sealed filings made in Hollenbeck’s criminal case which reveal that Bartko’s lead AUSA not only had discussions with Hollenbeck’s lawyer about a sentence reduction, he attended an in chambers hearing with Hollenbeck’s lawyer where possible sentence reductions for Hollenbeck were the subject. Contrary to statements in the AUSA’s declaration these events took place over 18 months before Bartko’s verdict. During Bartko’s trial when this subject came in Hollenbeck’s testimony, he lied by denying that he had received any promises or benefits from the government. The lead AUSA sat in the courtroom, heard this false testimony and did nothing. All of this same information has been simply disregarded by Bartko’s trial judge and the United States Attorney’s Office in the EDNC. If the government misconduct at trial gives rise to a reasonable probability that a jury verdict is no longer entitled to confidence, the trial judge generally must set aside a conviction and grant the accused a new trial. This is a difficult result to achieve, especially when a trial judge is perceived to be pro-prosecution. There are strong forces that compel the judiciary as well as prosecutors to do what they can do to preserve convictions.

All during more than eight years that Bartko continues to challenge his wrongful conviction, he has collected a body of published material that describes the flaws in our federal prosecutorial system. These materials are available at various links at the end of this article and will add considerable substance to Bartko’s own experiences since these materials are authored by authoritative and knowledgeable sources.