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Meet the Man Who Has Been Battling Romney and Bain’s Bankruptcy Fraud for 12 Years
There is something appealing to human beings about a small individual taking on a powerful adversary, and most people are aware of the David and Goliath story where a small insignificant boy took on and defeated a powerful giant because his unwavering faith gave him courage and conviction that right would overcome might. For the past eleven-and-a-half years, one American with unwavering faith in the judicial system has taken on a modern day giant without respite based on a belief that justice is due diligence and that in America, right overcomes might. However, in this circumstance, the system that exists to ensure justice prevails has conflated power with right and gave an already powerful giant a wall of separation from the law, and yet one small individual continues battling for justice against a behemoth.
The giant in this case is Willard Romney’s Bain Capital and their surrogate bankruptcy fraudsters, and the individual battling them for nearly twelve years is Stephen (Laser) Haas, the man hired to liquidate assets in the eToys bankruptcy case. As liquidator, Hass was an officer of the court and head eToys executive with authority to sell the company and its assets to satisfy debtors’ claims while leaving the creditors with no outstanding debt, and to give shareholders relief instead of losing their investments. However, in the course of his duties to maximize returns with minimum expense for the eToys bankruptcy estate, Haas discovered hidden overseas assets, unaccounted for inventory, and that most likely the company was not broke and should not be in bankruptcy.
As an eToys executive, Haas had a legal and fiduciary responsibility to report his discoveries to eToys estate managers and lawyers, and instead of gratitude for doing his job well, he was asked to betray his client for the sake of his future in the liquidation business. When Haas refused the offer to look the other way and allow eToys to be gutted and sold to Bain Capital for free, a Bain Capital surrogate installed his business partner and co-conspirator in other bankruptcies to replace Haas, and colluded to annul a court-approved contract to pay him. As an officer of the court, and 18 USC § 4 – Misprision of felony, Mr. Haas, having knowledge of the commission of a felony had a duty, as soon as possible, to make known the same to some judge or other person in civil authority and if he failed to do so, he risked being fined or imprisoned not more than three years, or both. Haas fulfilled his legal duty and reported the malfeasance to the proper authorities.
Shortly after reporting the crimes, in August 2001, George W. Bush appointed another Bain Capital lawyer as U.S. Attorney and he refused to investigate or prosecute the crimes throughout his tenure; despite the U.S. and former Bain attorney’s malfeasance, Haas continued fighting for eToys shareholders and to bring the criminals to justice. During his long battle, Haas discovered attorneys representing the creditors and debtors worked for the same giant (Bain Capital) in the eToys bankruptcy and committed perjury by deliberately failing the mandate to disclose conflict of interest. In what can conservatively be called racketeering, fraud on the court, and miscarriage of justice, the court failed to prosecute or report the crimes then, and continues protecting Bain Capital and its surrogates as recently as last week when the eToys judge postponed a hearing to remove the fraudulent eToys manager in another curious miscarriage of justice.
One might think that after over eleven years, Haas would give up his battle to see justice prevail and shareholders get their just recompense, but his quest for fairness prevents him from relenting. In America, whistle-blowers always pay a steep price for exposing malfeasance, and this case is no different regardless the law is in Haas’s corner. The judge in the bankruptcy case however, is not, and it is extremely suspicious that despite sworn confessions by Bain’s attorneys and surrogates that they committed perjury on the witness stand, the judge fails to hold them accountable, or fulfill her legal responsibility and report the crimes according to 18 U.S.C. §3057(a) . It says, “Any judge, receiver, or trustee having reasonable grounds for believing that any violation under chapter 9 of this title, or other laws of the United States relating to insolvent debtors, receiverships or reorganization plans on destruction of bankruptcy records; [§3284 on concealment of bankrupt's assets] has been committed, or that an investigation should be had in connection therewith, shall report to the appropriate United States attorney all the facts and circumstances of the case, the names of the witnesses and the offense or offenses believed to have been committed.” Bankruptcy judges cannot prosecute civil crimes, but they are required to report them. The eToys judge continues to shirk her legal duty and report the case regardless numerous egregious offenses of perjury and court approved destruction of eToys books and records. Despite Mr. Haas filing motion after motion pleading for the court to do its job, Bain Capital’s surrogates continue to go unpunished or even reported to the U.S. Attorney as required by law.
The eToys case is still ongoing and Laser Haas is still fighting for eToys shareholders without recompense out of his sense of duty to fulfill his role as an eToys executive, and his strong sense of justice. When this author first interviewed him, Haas said going up against the likes of Willard Romney, Bain Capital, and Goldman Sachs was like an “amoeba fighting a giant,” and yet he has persevered without rest for well over a decade. His resolve to see justice prevail, and not monetary gain, have been the motivating force behind his years’ long fight against a powerful adversary. It is noteworthy that Bain Capital’s attorney’s attempted to buy him off and further his professional career if he would just relent and allow the miscarriage of justice to go unimpeded, but he stayed true to his belief that justice is due diligence.
Due diligence means making every effort to find and rectify problems in business or criminal situations, and Haas fulfilled that role as eToys executive and officer of the court, and for eleven-and-a-half years he has continued as a private citizen. No-one can ever accuse Haas of not fighting for a fair resolution that satisfies shareholders, creditors, and debtors in the eToys bankruptcy, and for his trouble the court protected Bain Capital’s surrogates and helped thwart his efforts in spite of confessions of perjury, corruptions, and fraud giving the appearance the court has no interest in justice.
Some may view this story as a cautionary tale against reporting injustices in business or the courts, but it should embolden any American that one man can wage war against a giant like Bain Capital and advance the cause of justice. The fact the case is still active is a testament to Haas’s perseverance and his belief in the rule of law that appears to have failed him, but his faith in American justice has never wavered. Mr. Haas was encouraged that Willard Romney will not appoint an attorney general friendly to Bain Capital and Goldman Sachs to dismiss the case, and although Haas’s latest hearing has been postponed, he will have his day in court and hopefully it is a court that follows the law. Because there is no doubt that with a fair hearing in front of an impartial judge, one man with the law on his side is guaranteed a victory over a giant. After nearly a dozen years, a victory over Bain Capital, albeit long in coming, will be a victory for the rule of law and give every American confidence that in this country, a whistleblower with the law on their side can defeat a giant.