CALDERWOOD & HARKNESS LLP Attorneys at Law
450 Park Avenue, 30th Floor New York, New York 10022
Telephone: (212) 884-7200 Facsimile: (212) 884-7201 www.calderwoodharkness.com
March 22, 2023
VIA EMAIL AND U.S. MAIL
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
Mr. Jonathan R. Caldwell 1140 Park Avenue, Apt. 14C New York, New York 10128
Re: Grand Jury Subpoena Response — Grand Jury No. 22-GJ-4481, U.S. District Court for the Southern District of New York Calderwood & Harkness Matter No. 1034-00001
Dear Jonathan:
1. Purpose of This Letter
The purpose of this letter is to provide you with a comprehensive closing status report on Calderwood & Harkness LLP's representation of you in connection with the federal grand jury subpoena duces tecum issued by the United States Attorney's Office for the Southern District of New York ("USAO-SDNY") on November 18, 2022, and served upon you at your residence on November 21, 2022. As you are aware, the subpoena was issued in connection with Grand Jury No. 22-GJ-4481 and relates to the ongoing federal investigation of Marcus W. Stavros and Aegean Realty Partners LLC. The investigation, as we have discussed at length, concerns allegations of bank fraud, wire fraud, and related offenses arising from transactions involving Mr. Stavros's real estate investment funds and certain lending institutions.
We are pleased to confirm that all document productions required under the subpoena have been completed in full. On March 3, 2023, the government acknowledged receipt of the final production and confirmed that it has no further requests of you at this time. This letter sets forth in detail the status of the matter, a summary of all productions made on your behalf, a final accounting of fees and costs, and important instructions regarding your continuing obligations. We encourage you to review this letter carefully and to retain it for your records.
2. Summary of Document Productions
2.1 Overall Production Statistics
Over the course of this engagement, the firm undertook a comprehensive collection and review of documents from all custodians and data sources identified as potentially containing materials responsive to the subpoena. The following is a summary of the overall production statistics:
The collection effort encompassed electronic and hard-copy documents from your personal files maintained at your residence at 1140 Park Avenue, your office at 590 Madison Avenue (the offices of Caldwell Capital Advisors LLC), and your email account (jrc@caldwellcap.com). All collected materials were processed, de-duplicated, and hosted on a secure review platform by our e-discovery vendor, Clearpath Document Solutions Inc. Each document was individually reviewed by members of the Calderwood & Harkness review team for responsiveness to the categories of documents specified in the subpoena, as well as for the application of the attorney-client privilege and work product doctrine.
2.2 Rolling Productions — Chronological Detail
In accordance with our negotiations with the USAO-SDNY, the responsive documents were produced to the government on a rolling basis in three separate productions. The details of each production are set forth below.
First Rolling Production — January 20, 2023
The first rolling production consisted of 1,842 documents, bearing Bates numbers CALDWELL-00001 through CALDWELL-01842. This production was transmitted to Assistant United States Attorney Miriam T. Goldfarb of the Complex Frauds & Cybercrime Unit, USAO-SDNY, One St. Andrew's Plaza, 500 Pearl Street, New York, New York 10007, via secure electronic transfer, with a corresponding transmittal letter delivered by hand and via email. This production was made on the negotiated extended return date. As you will recall, the original return date specified in the subpoena was December 9, 2022. Given the breadth of the subpoena's document requests and the volume of materials requiring collection and review, we sought and obtained an extension of the return date from AUSA Goldfarb. On December 8, 2022, AUSA Goldfarb agreed to extend the initial return date to January 20, 2023, with the understanding that the firm would produce documents on a rolling basis thereafter. The first production was made in accordance with that agreement.
Second Rolling Production — February 10, 2023
The second rolling production consisted of 1,375 documents, bearing Bates numbers CALDWELL-01843 through CALDWELL-03217. This production was transmitted to AUSA Goldfarb via secure electronic transfer, accompanied by a transmittal letter. This production was made pursuant to the second extension of time granted by AUSA Goldfarb on January 19, 2023, which provided for the completion of all remaining productions by February 28, 2023. This tranche of documents included the balance of the electronic mail records collected from your email account, as well as financial records and correspondence obtained from Thornberg & Whitfield CPAs with your authorization.
Third and Final Production — February 24, 2023
The third and final production consisted of 416 documents, bearing Bates numbers CALDWELL-03218 through CALDWELL-03633. This production was transmitted to AUSA Goldfarb via secure electronic transfer, accompanied by a transmittal letter. The final production was accompanied by the complete privilege log identifying all 214 documents withheld from production on privilege grounds. With this final production, all responsive, non-privileged documents within the scope of the subpoena were produced to the government, and the firm's document production obligations under the subpoena were fulfilled in their entirety.
2.3 Privilege Log
A privilege log containing 214 entries was delivered to AUSA Goldfarb on February 24, 2023, contemporaneously with the third and final document production. The privilege log was prepared in compliance with the requirements of the Federal Rules of Civil Procedure, as applicable by analogy in the grand jury context, and consistent with the practices and expectations of the USAO-SDNY.
The log identifies each withheld document by its assigned Bates number (from the internal review database), date of the communication or document, author, recipient(s), a brief subject matter description sufficient to enable the government to assess the privilege claim without revealing privileged content, and the specific privilege or protection asserted — namely, the attorney-client privilege and/or the work product doctrine.
The withheld documents consist primarily of two categories of communications:
(a) Communications between you and Whitmore & Kessler LLP, specifically attorney Patricia Sheldon, relating to the negotiation, drafting, and execution of the December 15, 2019 separation agreement between you and Marcus W. Stavros governing the dissolution of certain joint business interests, including interests in Stavros-Caldwell Industrial LLC and related entities; and
(b) Communications between you and Thornberg & Whitfield CPAs, specifically Helen R. Thornberg, CPA, involving tax advice rendered at the direction of counsel in connection with the tax treatment of distributions, carried interest allocations, and other financial matters arising from your investments in Aegean Realty Partners Fund III, Fund IV, and Fund V.
The firm expressly reserves all rights with respect to privileged and work-product-protected materials. No waiver of any privilege or protection is intended by any disclosure or description contained in the privilege log, this letter, or any prior correspondence with the government.
3. Government's Acknowledgment — No Further Requests
On March 3, 2023, AUSA Goldfarb acknowledged receipt of the final document production and the accompanying privilege log via email to the undersigned. In that communication, AUSA Goldfarb stated that the government has "no further requests at this time" with respect to your compliance with the subpoena. A copy of that email communication has been preserved in the firm's files for this matter.
As of the date of this letter, no challenge to any privilege assertion contained in the privilege log has been raised by the government. The government has not moved to compel the production of any of the 214 withheld documents, nor has it requested additional information or clarification regarding any entry on the privilege log.
Additionally, no testimony date has been scheduled for you before the grand jury. As you are aware, the subpoena as originally issued contained both a document production component (the subpoena duces tecum) and a testimonial component (the subpoena ad testificandum). During the December 12, 2022 telephone conference with AUSA Goldfarb — in which you participated at the firm's direction — the testimonial component of the subpoena was deferred by mutual agreement pending the government's review of the document production. AUSA Goldfarb agreed at that time that the government would not seek to compel your testimony before the grand jury until it had completed its review of the produced documents and determined whether testimony was necessary. That deferral remains in effect, and the government has not indicated any intention to schedule your testimony at this time.
We also wish to reiterate, as we have discussed on multiple occasions, that during the December 12, 2022 telephone proffer with AUSA Goldfarb, AUSA Goldfarb informally confirmed that you are considered a witness in the government's investigation — not a target or a subject. This is a significant and favorable characterization. It means that, as of the date of that confirmation, the government did not consider you to be a person as to whom there was substantial evidence linking you to the commission of a crime (which would make you a "target"), nor a person whose conduct was within the scope of the grand jury's investigation (which would make you a "subject"). We note, however, that no formal target or subject letter has been issued to you, and the government's characterization of your status could change as the investigation progresses. We will continue to monitor this closely.
4. Matter Status — Dormant / Monitoring
In light of the completion of all document productions required by the subpoena and the government's confirmation that it has no further requests at this time, the firm is placing this matter in dormant/monitoring status in its internal case management systems, effective April 1, 2023. This designation reflects the fact that the active phase of the engagement — namely, the collection, review, and production of documents — has been completed, and that there are no pending deadlines, requests, or proceedings requiring the firm's immediate attention.
Notwithstanding the transition to dormant status, the firm will continue to monitor the matter on your behalf. Specifically, the firm will conduct periodic status checks at approximately 90-day intervals (i.e., approximately quarterly) to monitor for any developments that may affect you or require reactivation of the engagement. These periodic checks will include monitoring for the following:
• Any new government contact or requests directed to you or to the firm on your behalf, whether from the USAO-SDNY, the Federal Bureau of Investigation, or any other federal or state law enforcement or regulatory agency;
• Public filings on the docket of the United States District Court for the Southern District of New York related to Grand Jury No. 22-GJ-4481, including but not limited to any indictment, information, plea agreement, or other charging instrument filed against Marcus W. Stavros, Aegean Realty Partners LLC, or any other individual or entity connected to the investigation;
• Any media reports, press releases, or public proceedings — including congressional hearings or regulatory actions — that may reference you, your business interests, or the broader investigation and that may affect your interests or require a response.
The firm will promptly notify you if any developments arise during these periodic status checks or at any other time. You will be contacted by telephone and email as soon as practicable following the identification of any material development.
It is important to understand what dormant status means from a billing perspective. Active billing on this matter will cease as of the date the matter is placed in dormant status. You will not receive further invoices for routine monitoring activities unless and until the engagement is reactivated in connection with a specific development requiring substantive legal work. However, the matter will remain open in the firm's systems, and the engagement letter executed on December 5, 2022 will remain in effect on a dormant basis, so that our representation can be reactivated promptly if and when circumstances require it.
5. Important Client Instructions — Ongoing Obligations
Although the active phase of this engagement has concluded, you have certain continuing obligations that are critically important. Please review the following instructions carefully and contact us immediately if you have any questions.
Preservation of Documents. You must continue to preserve all documents — in both electronic and hard-copy form — that are within the scope of the subpoena. As set forth in the subpoena and in the litigation hold notice that the firm issued to you on December 5, 2022, the categories of documents subject to preservation include all documents relating to Marcus W. Stavros; Aegean Realty Partners LLC and its affiliated investment funds, including Aegean Realty Partners Fund III, Aegean Realty Partners Fund IV, and Aegean Realty Partners Fund V; Westlake Fidelity Bank, N.A.; Harborview Trust Company; Pinnacle Appraisal Group LLC; 710 Flatbush Holdings LLC; and Stavros-Caldwell Industrial LLC, for the time period January 1, 2014 through December 31, 2021. The litigation hold notice issued on December 5, 2022 remains in full force and effect. No responsive documents — including emails, text messages, financial records, correspondence, contracts, memoranda, notes, or any other materials falling within the scope of the subpoena — should be destroyed, deleted, discarded, overwritten, or altered in any way. This obligation continues until you are advised otherwise by the firm. Failure to preserve documents subject to a grand jury subpoena may result in serious legal consequences, including potential obstruction of justice charges.
Contact the Firm Immediately If: You must contact the firm immediately — without delay — if you receive any further government contact of any kind. This includes, but is not limited to, the following:
• Receipt of a new grand jury subpoena, whether for documents or testimony, from the USAO-SDNY or any other federal or state prosecutor's office;
• Receipt of a letter or telephone call from the USAO-SDNY, including from AUSA Goldfarb or any other attorney in the Complex Frauds & Cybercrime Unit, or from any other division or office of the United States Department of Justice;
• Receipt of a target letter or subject letter from the USAO-SDNY or any other prosecutorial authority;
• Contact from the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Office of the Inspector General of any federal agency, the Securities and Exchange Commission, the New York State Attorney General's Office, the New York County District Attorney's Office, or any other federal, state, or local law enforcement or regulatory agency;
• Any request for an interview, voluntary statement, or testimony, whether formal or informal;
• Any contact from any attorney representing Marcus W. Stavros, including Victor A. Reddick of Reddick, Sorrento & Hale LLP, or from Mr. Stavros personally;
• Any contact from counsel representing any other party to the investigation, including but not limited to Catherine A. Falk of Graystone & Falk LLP, who represents Westlake Fidelity Bank, N.A., or counsel for any other entity or individual referenced in the subpoena;
• Any service of process in a civil action that appears to relate to the subject matter of the investigation or to any of the persons or entities referenced in the subpoena.
It is essential that you do not respond to any such contact before speaking with us. Even a seemingly innocuous inquiry can have significant implications in the context of an ongoing federal investigation.
Do Not Discuss the Investigation. You should refrain from discussing the substance of the investigation, the subpoena, or the document production with Marcus W. Stavros or with any other potential witness, subject, or target of the investigation. You should not discuss these matters with current or former employees, officers, or agents of Aegean Realty Partners LLC, Westlake Fidelity Bank, N.A., Harborview Trust Company, or any of the other entities referenced in the subpoena. If any person — including Mr. Stavros, his attorneys, or any third party — contacts you to discuss the investigation or the subpoena, you should decline to engage in any substantive conversation and instead direct such inquiries to the firm. This instruction is designed to protect your interests and to avoid any appearance of coordination, obstruction, or witness tampering.
6. Final Billing Summary
Set forth below is a complete summary of all professional fees, costs, and disbursements billed in connection with this matter, together with a record of all payments received.
6.1 Professional Fees
The following is a detailed breakdown of professional fees billed from the inception of the engagement on December 5, 2022, through the close of active work in March 2023:
Total Professional Fees: $287,450.00
Mr. Crawford's involvement in this matter was limited to advising on certain employment-related issues arising from your separation agreement with Mr. Stavros and the dissolution of Stavros-Caldwell Industrial LLC, and his time was billed at his standard hourly rate for non-litigation advisory work. Mr. Obi and Ms. Morrow were responsible for the day-to-day document review, the preparation of the privilege log, and the coordination of all productions with Clearpath Document Solutions Inc. Paralegal support was utilized for document organization, Bates-stamping verification, and administrative coordination with the USAO-SDNY.
6.2 Costs and Disbursements
The following costs and disbursements were incurred in connection with this matter:
6.3 Total Billed and Payments Received
Payments Received:
Outstanding Balance: $0.00
The initial retainer of $150,000.00 has been fully applied against invoiced fees and costs. The balance of the Calderwood & Harkness IOLA trust account attributable to this matter is $0.00. No further payments are due or outstanding. All invoices previously submitted to you have been paid in full, and the firm's accounts for this matter are closed for billing purposes.
7. Acknowledgments and Appreciation
We wish to express our sincere appreciation for your full cooperation throughout the course of this engagement. Your responsiveness during the document collection process — which required the assembly of materials from multiple locations, including your residence at 1140 Park Avenue, your office at 590 Madison Avenue (the offices of Caldwell Capital Advisors LLC), and your email account at jrc@caldwellcap.com — was instrumental in enabling the firm to meet all negotiated production deadlines and to complete the engagement in an efficient and timely manner. Grand jury subpoena compliance is an inherently demanding process, and your diligence in locating, gathering, and making available the necessary records materially facilitated the firm's review and production efforts.
We also wish to acknowledge your prompt responsiveness in addressing our requests for information and clarification throughout the review process, as well as your timely payment of all invoices. Your cooperation in these respects allowed the firm to devote its full attention to the substantive aspects of the engagement without the administrative complications that can sometimes arise in matters of this nature.
Finally, we note that the firm's handling of this matter was significantly facilitated by the cooperation of Thornberg & Whitfield CPAs, and in particular Helen R. Thornberg, CPA, in providing relevant financial records and tax-related documentation on a timely basis. Ms. Thornberg's office was responsive to our requests and provided the necessary records in organized fashion, which contributed meaningfully to the efficiency of the document review.
8. Reservation of Rights and Continuing Availability
The firm remains available to represent you in any further proceedings arising from this investigation, should such proceedings become necessary. This includes, but is not limited to:
• Responding to any additional subpoenas or document requests that may be issued by the USAO-SDNY or any other governmental authority;
• Preparing you for testimony before the grand jury or in any other proceeding, should the government ultimately seek your testimony;
• Addressing any challenges by the government to the privilege designations set forth in the privilege log;
• Representing your interests in any related civil litigation, regulatory proceeding, or enforcement action that may arise from or in connection with the subject matter of the investigation; and
• Providing counsel and representation in connection with any change in the government's characterization of your status in the investigation.
All rights, objections, and privileges previously asserted or reserved in the production transmittal letters dated January 20, 2023, February 10, 2023, and February 24, 2023, are hereby expressly preserved and are not waived by the placement of this matter in dormant status or by any statement contained in this letter. The firm's engagement for this matter remains in effect on a dormant basis pursuant to the terms of the engagement letter dated December 5, 2022, and can be reactivated by mutual agreement at any time.
In closing, we wish to reiterate the critical importance of contacting the firm immediately upon receiving any form of government contact, any communication from Mr. Stavros or his counsel, or any other development that may relate to this investigation. Prompt communication will enable us to protect your interests effectively and to respond to any new developments in a timely manner.
Should you have any questions about this letter, the status of the matter, or any of the instructions set forth above, please do not hesitate to contact me directly:
Conrad Ashby Direct Telephone: (212) 884-7244
Email: cashby@calderwoodharkness.com
Alternatively, you may contact our lead associate on this matter:
Daniel Obi Direct Telephone: (212) 884-7312
Email: dobi@calderwoodharkness.com
We are grateful for your trust and confidence in Calderwood & Harkness LLP, and we stand ready to assist you at any time.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Conrad Ashby Partner, White Collar & Investigations 450 Park Avenue, 30th Floor New York, New York 10022
cc: Bernard Crawford, Esq. (Calderwood & Harkness LLP — Responsible Partner)
File (Matter No. 1034-00001)
Enclosures: None (All prior production transmittal letters, privilege log, and invoices have been previously delivered.)
| Category | Quantity / Detail | |||
| Total documents collected from all custodians and data sources | Approximately 14,200 documents (approximately 8.3 GB total data volume) | |||
| Documents reviewed for responsiveness and privilege | 14,200 | |||
| Total documents identified as responsive to the subpoena | 3,847 | |||
| Documents withheld on attorney-client privilege and/or work product doctrine grounds | 214 | |||
| Total documents produced to the government | 3,633 (i.e., 3,847 responsive documents minus 214 withheld on privilege) | |||
| Full Bates range of production | CALDWELL-00001 through CALDWELL-03633 | |||
| Production format | TIFF images with accompanying load files (concordance and Sterling Reach Software) | |||
| Timekeeper | Role | Hours | Rate ($/hr) | Total |
| Conrad Ashby | Partner, White Collar & Investigations | 98.5 | $1,350 | $132,975.00 |
| Bernard Crawford | Partner, Labor & Employment — Responsible Partner | 12.0 | $1,275 | $15,300.00 |
| Daniel Obi | Associate, Banking & Finance — Lead Associate | 112.0 | $825 | $92,400.00 |
| Lisa Morrow | Associate, Banking & Finance — Working Associate | 62.0 | $675 | $41,850.00 |
| Paralegal support (various) | Paralegal | 13.0 | $375 | $4,875.00 |
| 297.5 | $287,450.00 | |||
| Vendor / Category | Description | Amount | ||
| Clearpath Document Solutions Inc. | E-discovery processing, hosting, review platform, and production (flat fee per engagement agreement) | $47,500.00 | ||
| Courier, copying, and miscellaneous | Courier deliveries to USAO-SDNY (3 transmittals), photocopying, and miscellaneous office expenses | $2,340.00 | ||
| Total Costs and Disbursements | $49,840.00 | |||
| Category | Amount | |||
| Total Professional Fees | $287,450.00 | |||
| Total Costs and Disbursements | $49,840.00 | |||
| Total Billed (Fees + Costs) | $337,290.00 | |||
| Date | Description | Amount | ||
| December 7, 2022 | Initial retainer, deposited into Calderwood & Harkness IOLA trust account (Acct. No. 4401-8827-6650, Northern Capital Bank, N.A.) | $150,000.00 |
| February 1, 2023 | Second payment | $100,000.00 |
| March 15, 2023 | Final payment | $87,290.00 |
| Total Payments Received | $337,290.00 |