The above is a chart designed by the Carlos Watson defense team showing the many conflicts Judge Eric Komitee had while he presided over the trial of Watson.
In July, Carlos Watson’s trial ended with his conviction on wire and securities fraud conspiracy and aggravated identity theft. US District Judge Eric R. Komitee of the Eastern District of New York presided. Watson’s alleged victims included Google, Goldman Sachs, and JP Morgan Chase.
Motion to Disqualify Judge Arises After Financial Disclosure
More than two months after the trial, on October 2, 2024, Judge Komitee’s annual financial disclosure for 2023 became available to the public. Based on the disclosure and an analysis of it, Watson, through his attorney Andrew J. Frisch, made a motion to disqualify Komitee from his case, vacate his conviction and dismiss the indictment. While presiding over Watson’s case, Judge Komitee had between $126,000 and $1.1 million invested through hedge funds in at least four of Watson’s victims – Goldman Sachs, Google, LiveNation, and JPMorgan Chase. Watson’s attorney attached a detailed financial analysis with his motion to disqualify and dismiss the case.
On November 1, 2024 the prosecution responded to the defense’s motion to disqualify Komitee, saying that the motion should be denied based on it being untimely and that Judge Komitee’s investments in various funds and prior relationships with the victims “do not warrant recusal.” Watson’s attorneys replied on November 3, 2024.
Historical Ties and Potential Conflicts of Interest
On March 6, 2023, more than a year before the trial, the US Attorney for the EDNY filed a “List of Interested Parties” to safeguard against conflicts of interest. Judge Komitee, referring to conflicts as “overlap,” said he “didn’t see any overlap between the people and entities listed there on the one hand, and my bio on the other hand.” Substituting “conflict” for “along those lines,” he asked the government “to confirm that [it didn’t] see anything along those lines either.” Using “meaningful” in place of “genuine conflict,” Judge Komitee said it would be “meaningful” if the government saw “the name Viking in anything.”
Judge’s Viking Connections Under the Microscope
He singled out Viking as a meaningful conflict because he had worked for Viking Global for ten years. Viking first hired Komitee in 2008 as general counsel. Komitee worked closely with Goldman and JP Morgan during his tenure since these companies were Viking’s prime brokers and qualified custodians. Viking’s most essential partner companies were JP Morgan and Goldman Sachs. Combined with Google, these three helped Viking become a significant competitor in the world of hedge funds.
Financial Growth and Judicial Integrity Concerns
Komitee personally earned tens of millions in salary, bonuses, dividends, and portfolio growth through Viking and its partnerships with Goldman, Google, and JP Morgan. Judge Komitee disclosed his net worth when he left Viking to become a judge in 2018 at $60 million. In the six years he has been on the bench, his net worth has grown to approximately $100 million. Komitee asked the prosecutors if the government had seen the name “Viking in anything,” in its list of potential victims. He did not ask if they saw the three companies closely associated with Viking, which helped make Komitee perhaps the wealthiest judge in America – Google, Goldman, and JP Morgan.
Close Ties with Key Figures in Watson’s Trial
Komitee’s friend, Patrick Carroll, was Goldman’s Global Head of the Monitoring and Assurance Group and Law Enforcement/Regulatory Liaison for Federal Crime Compliance. The top man at Goldman for investigating federal offenses like wire and securities fraud allegedly committed by people like Watson was Komitee’s best man at his confirmation hearing before the United States Senate Judiciary Committee in 2018. Komitee singled him out for mention before the Senators as one of his closest friends.
Board Membership and Investment Details Emerge
While he presided over Watson’s case, Komitee served on the board of Viking’s Global Foundation Inc. along with his old boss at Viking, Ole Andreas Halvorsen, and his former coworker, James Parsons, CEO of Junto Capital, where Komitee has invested between $5-25 million. (The judicial disclosure forms give judges a large latitude in disclosures of assets. Komitee checked the box for three of his hedge funds as having a value between $5,000,001 -$25,000,000. And a fourth between $1,000,001 and $5,000,000.)
Investment Relationships and Trial Testimonies
Also on the Viking Global Foundation board with Komitee is Daniel Sundheim, Viking’s former Chief Investment Officer and now CEO of D1. Komitee and Sundheim left Viking in the summer of 2018. Komitee became a judge, and Sundhiem founded D1. Komitee has $5-25 million with D1. From 2010 to 2018, during a remarkable period of growth for Viking, four men were at the helm: Halvorsen, Parsons, Sundheim, and Komitee.
Venture Deals and Witness Testimonies During Trial
In 2010, CEO Halvorsen promoted Komitee to Viking’s Management Committee, to take on “greater responsibility for the day-to-day management of the firm.” Viking held stock positions worth hundreds of millions of dollars during that rise, sometimes surpassing one billion in Google, JP Morgan, and Goldman Sachs. In addition to the roles of prime broker, custodian, and investment in the companies’ stock, Viking co-invested with Google, Goldman, and JP Morgan more than a dozen times. One of those investments closed on June 11, 2024, in the middle of Watson’s trial. Viking and the venture arms of Google, Goldman, and JPMC co-invested in a $650 million deal with AlphaSense.
Prosecution’s Position and Judicial Recusal Debate
During the next few days, Google representatives testified for the prosecution in Komitee’s courtroom in the Watson trial. Goldman representative Allison Berardo testified on June 13, 2024; Google representative Donald Harrison, testified on June 13; Google representative Alex Piper testified on June 13 and June 14; Google CEO Sundar Pichai testified on June 14; Goldman’s Hillel Moerman testified on June 14. The government says the judge has no reason to disqualify himself. They say Komitee’s investments in the victims through hedge funds account for a tiny percentage of the ownership in the giant corporations Google, JP Morgan, and Goldman Sachs.
Judicial Ownership and Appellate Considerations
During Watson’s case, Judge Komitee’s ownership of the victims’ stock through his hedge funds was worth as little as $126,000 to more than $1 million, depending on the financial quarter. While the prosecution might feel the amount is too little to matter, the appellate court might disagree. Earlier this year, the United States Court of Appeals for the Second Circuit ruled that another federal judge, Lewis J. Liman, should have recused himself in a case that included numerous defendants, including Charles Swab, because Liman’s wife owned $15,000 worth of stock through a retirement account at Schwab, though she divested herself of the Schwab stock before Judge Liman ruled to dismiss the case against Schwab. See Litovich v. Bank of America, Corp.
Impartiality Checks and Pending Sentencing Decision
Before jury selection, the government filed a list of potential witnesses or names about which the jury might hear during the case to ensure that jurors had no conflicts and could be fair and impartial. Judge Komitee’s financial disclosure for 2024 is not due for several months, and additional circumstances may justify disqualifying the judge. Judge Komitee has set sentencing for Watson on December 13. The prosecutors say the estimated sentencing guidelines for his crime of conviction are 24-29 years. It remains to be seen whether Judge Komitee will disqualify himself and dismiss the case, or whether the 2nd Circuit will decide.
Appeal Prospects and Potential Judicial Disqualification
If the judge does not voluntarily dismiss the case, Watson will surely appeal, and based on a 2nd Circuit decision with Judge Liman, the Watson case will be dismissed. It is common for a judge to stay sentencing until the appeal is resolved. Therefore, it may be months before Watson, 55, currently on home confinement at his home in San Francisco, will find out whether he will spend twenty or more years in prison or become a free man based on the appearance of a biased judge who made millions off the same companies Watson was supposed to have victimized.
Final Insights on Alleged Victim Losses and Charges
As a final fact to impart to those interested in the case: while the prosecution called Google, JP Morgan, and Goldman Sachs “victims” of Watson, evidence at the trial proved none of these victims lost a dime because of Watson. This is likely why the prosecution charged Watson with conspiracy to commit wire fraud and securities fraud and not the substantive crimes of wire fraud and securities fraud.
