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Alphonse Mourad
125 West Street
Hyde Park, MA 02136

July 31,1998

Ms. Esther I. Estryn

Deputy General Councel U.S.
Department of Justice
Office of the United States Trustee
901 E Street, N.W.
Washington, D.C. 20530

Re: Misconduct in the Boston U.S. Trustee Office regarding the case ofV&M Management.

Dear Ms. Estryn:

I write you with regard to your letter dated July 23, 1998 which states that your agency is unable to perform an investigation of both Eric Bradford and Christopher Marshall's behavior in their capacity as US Trustees in the case of V&M Management.

Your letter suggests that this is due to the inherent jurisdictional conflict between your federal organization and the U.S. Bankruptcy Court in Boston. I have therefore taken the appropriate steps to dismiss the pending litigation: Motion to Compel The Court to Order The Resignation of Assistant U.S. Trustee Attorney. Eric Bradford, and Strike Bradford's Opposition to Mourad's Motion For Recusal. I moved to dismiss the above mentioned case without prejudice on July 30,1998 (exhibit #1). I trust this will eliminate any investigatory conflict previously present. I am therefore requesting that the U.S. Department of Justice, in particular the Office of the United States Trustee, perform an in-depth inquiry into the matters raised in the motions I submitted to your office during the past several months.

I would also like to call your attention to a new finding quite relevant to the investigation filed with your office. The Office of the Bar Councel was called upon to review the conduct of both Attorney Harold Murphy ofHanify & King (legal Councel to V&M) and court appointed trustee, Stephen Gray. In their findings, the Bar Councel states the following, " It does appear that trustee Gray filed two false, or at least grossly inaccurate disclosure statements with the Bankruptcy Court," (Exhibit#2). Not only was US Trustee Eric Bradford called upon to investigate my allegations of misconduct, in addition, Mr. Bradford was responsible for Mr. Gray's appointment to the position of Trustee in the case of V&M. Mr. Bradford refused to investigate all matters of potential fraud, misconduct, and falsity committed before the court by Mr. Gray and several others.

The findings from the Office of the Bar Councel confirm that foul play has occurred in the V&M case by Mr. Gray and leave me wondering what other injustices have gone unchallenged and ignored.

Page Two Dept. Of Justice Ms. Esther I. Estryn July 31,1998

At first glance, I am aware that the details of this case are complex and numerous. With this in mind, I have submitted a condensed version of the issues in the form of court briefs. I believe this will call your attention to the most critical issues. To this effect, I have also enclosed a copy of the dismissal filed on July 30, 1998 with several pertinent documents outlining the areas of key importance.

I believe the enclosed documents in conjunction with the materials previously submitted to your office, will substantiate my claim that Mr. Eric Bradford behaved in both an irresponsible and fraudulent manner. I would also like to call to your attention Mr. Marshall's refusal to discuss, consider, or investigate Mr. Bradford's highly questionable behavior. While Mr. Marshall acknowledged the receipt of my complaint on August 26, 1997 (Exhibit #3) he failed to investigate or pursue the case in even the most preliminary fashion.

It is my belief that Mr. Bradford and Mr. Christopher Marshall's actions have cost me my business and my livelihood. The collective actions of these two individuals have not only been fraudulent and vindictive, but also damaging to the vast numbers of creditors and family members who have invested scarce resources both in V&M and the bankruptcy litigation that began in January 1996.

Your courteousness and efficiency has made it a pleasure to work with both you and Ms. Sue-Ann Slates I thank you in advance for your attention to the matter at hand. As always, if I can provide you with any further information or documentation, please do not hesitate to contact me.

Yours sincerely,
Alphonse Mourad

LETTER 2

U.S. Department of Justice
Office of the United States Trustee
Executive Office
901 E Street, N.W.
Washington, D.C. 20530

July 23, 1998
Mr. Alphonse Mourad
125 West Street
Hyde Park, MA 02136

Dear Mr. Mourad:

This office is in the process of reviewing your concerns raised in your letter to the Director of the Executive Office for United States Trustees, regarding the actions of the United States Trustee's Office in Boston in the In re V & M Management. Inc. (V&M) bankruptcy case. The United States Trustee Program is a component of the Department of Justice responsible for supervising the administration of bankruptcy cases and trustees.

Your recent submission of supplemental documents to this office included your motion dated June 30, 1998, in which you seek to remove the United States Trustee's staff attorney from the V&M case. In your motion, you raise all of the allegations raised in your letter to this office. Because your concerns are now the subject of pending litigation in the bankruptcy case, we are unable to comment any further.
In addition to your letter to this office regarding the V&M case, you have requested that this office provide you with advice on filing certain taxes. As Department of Justice employees, we are not permitted to provide you with legal advice or advice on tax matters.

Sincerely,

Esther I. Estryn, Deputy General Counsel

LETTER 3

U.S. Department of Justice
Office of the United States
Trustee Executive Office
901 E Street, N.W. Washington, D.C. 20530
Voice - (202) 307-1399 FBI-(202) 307-2397

November 4, 1998

Alphonse Mourad
125 West Street
Hyde Park, MA 02136

Dear Mr. Mourad:

This responds to your letters to the Executive Office for ted States Trustees, in which you raise a number of concerns arding the actions of the United States Trustee's Office in ton in the In re V & M Management, Inc. (V&M) bankruptcy case. Apologize for the delay in our response.

The United States Trustee Program is a component of the artment of Justice responsible for supervising the inistration of bankruptcy cases and trustees. In order to pond to your concerns, we communicated with the United States stee in Boston. We understand that you previously responded with the Boston office regarding some of your cerns. We also have reviewed the available relevant documents including correspondence, the examiner's report, pleadings, nscripts, court orders and opinions, and case docket sheets.

The delay in responding to you has been due in part to the ge amount of documents you continue to regularly submit. In addition, we were unable to comment on your concerns stantively until recently since they were the subject of ding litigation.

In the interim, you were advised to contact an attorney to ure that your individual interests have been protected. In [ition, we informed you on several occasions that if your ownership and management of Mandela Apartments, a 276-unit -income apartment complex that was an urban renewal project sidized by HUD and under the supervision of the Boston ivelopment Authority (BRA). Mr. Harold Murphy, of Hanify & ?, P.C., served as the debtor's counsel from February 14, 1996 October 10, 1996.

The record indicates that in February 1996, on the motion of, the court ordered the appointment of an examiner in the e. Mr. Joseph Braunstein, the examiner, prepared and filed an nded Report of Examiner on March 11, 1996. On April 1, 1996,
court ordered the appointment of a chapter 11 trustee after evidentiary hearing on the joint motion of BRA, City of ton, and Massachusetts Department of Revenue. Mr. Murphy eared at the April 1 hearing and opposed the motion. Pursuant the court's order, on April 2, 1996, the United States Trustee ointed and the court approved Stephen Gray to serve as chapter trustee. Mr. Gray retained Paul Moore, of Choate, Hall & wart, P.C., as counsel.

We understand that you, pro se, appealed the April 1, 1996, letterr appointing a chapter 11 trustee, and a February 5, 1997, ier denying reconsideration. Both appeals were dismissed by i district court. Any relief from these court decisions lies the judicial appellate process.

We learned that competing reorganization plans were filed in i case. A joint plan filed by Mr. Gray, Winter Hill, idela Residents Coop. Assoc., and Beacon Residential Property, and another plan filed by Gary Leroy and Mourad, Owens & Associates were circulated to creditors. The creditors bimately voted in favor of Mr. Gray's joint plan and on ptember 26, 1997, the court confirmed Mr. Gray's joint plan.

In your letter, you state that the United States Trustee's aff attorney should withdraw from the case because he has monstrated bias, did not protect creditors' interests, and pointed a chapter 11 trustee with a conflict of interest. rst, you state he is biased against you because at the April 1 aring on the appointment of a chapter 11 trustee, the staff torney referred to an article from The Boston Globe in which Ynn al.csn alleae that on December 23, 1996, he
:on Globe at the April 1 hearing. It appears from the iscript of the April 1 hearing that Mr. Murphy objected to the irence before the content of the article was mentioned and the ring proceeded to other matters.

You also state that the staff attorney has not protected the Brests of V&M's estate or its creditors because he did not mize a creditors' committee or dispute Mr. Gray's valuation :he property, and because he supported the chapter '11 stee's joint plan that offered to pay less to creditors than other plan. Further, you assert that the staff attorney had jty to dispute the chapter 11 trustee's alleged-mismanagement
ensure the highest possible dollar amount for creditors.

We are informed that the staff attorney on behalf of the ted States Trustee attempted to appoint a creditors' mittee. A letter was circulated to all creditors soliciting erest in the formulation of a creditors' committee, but only r creditors responded to the letter. According to the miner's report, all four had received voidable transfers from debtor totaling $342,000. See 11 U.S.C. งง 546-47. Based on finding, the United States Trustee determined they were not lified to serve on a committee and that there were ufficient creditors to form one.

We understand that no one tested the decision not to appoint a committee in the case. eover, although no creditors' committee was formed, many ditors continued to take an active role in the confirmation cess. The creditors themselves voted for Mr. Gray's joint n, which was confirmed by the court.

It is the chapter 11 trustee, not the United States Trustee, is responsible for operating the debtor's business. See 11 .C. ง 1106(a). Similarly, while the United States Trustee ervises the administration of chapter 11 cases and trustees, lacks the legal capacity to file a disclosure statement and n of reorganization, and has no authority to exercise the .er duties and responsibilities of a chapter 11 trustee. See U.S.C ง 586(a); 11 U.S.C. งง 307, 1121. Thus, the Boston 'ice's limited involvement in the business operations in this ;e is consistent with its statutory mandate and does not istitute bias one way or another.

The record indicates that Patriot Paper filed a voluntary :er 11 reorganization case on March 17, 1993. The case was ^tarily converted to chapter 7 on May 17, 1994. Stephen Gray appointed chapter 7 trustee on May 18, 1994, pursuant to the i rotation. Mr. Gray moved the court to employ Mr. Murphy as sel on May 20, 1994, and the court endorsed the motion as 3wed" on May 23, 1994. The court record shows that on 1 11, 1996, Mr. Murphy filed, on behalf of Mr. Gray, a tement of Trustee Respecting Motion for Relief From Automatic " in the Patriot Paper case.

We learned that in the V&M case, Mr. Gray filed with "the ruptcy court a verified statement dated April 5, 1996, and ugh his attorney, Mr. Moore, filed an amended verified ement dated April 10, 1996, stating that Mr. Gray had -no .ection with the debtor, or its respective attorneys. We are 'rmed that Mr. Gray's omission in his verified statements .rding his connection with Mr. Murphy was an oversight.

We are informed that the United States Trustee's staff irney was unaware of Mr. Gray's connection with Mr. Murphy in Patriot Paper case when he filed the "Application for and :ificate of Appointment of Chapter 11 Trustee," seeking to )int Mr. Gray in the V&M case on April 2, 1996.

In addition, ire informed that the staff attorney did not even learn of s until you raised it in your letter to this office and in a Lon to recuse the bankruptcy judge and a motion to remove our iff attorney filed in June 1998, which was over nine months sr a plan was confirmed in this case. We have no evidence 3h indicates otherwise.
The other conflict which arose in regard to Mr. Murphy's e as counsel to V&M and his simultaneous representation of Gray as chapter 11 trustee in the Rhode Island bankruptcy e of In re American Shipyard Corp was litigated in the V&M e.1 A hearing was held on November 19, 1997, on a joint ion of several creditors and parties in interest to revoke the tember 19, 1997, confirmation order, remove Mr. Gray, and er attorney's fees returned for the undisclosed conflict.

In December 8, 1997, memorandum opinion, the court evaluated the .flict issues and concluded that as a matter of law, section did not require the chapter 11 trustee to disclose the :ed information in conjunction with confirmation of the plan. 5 V & M Management. Inc.. 215 B.R. 895, 902 (Bankr., D. Mass. ) . Moreover, the judge stated that the conflict of interest 3t itself fraud and ended on October 10, 1996, when Mr. ny of Hanify & King withdrew from the case. Mr. Murphy's drawal occurred six months before the first plan of ganization was filed in this case, well before the irmation process began. Id. at 904. Again, redress from this cial decision would be through the appellate process.

Finally, you complain that the United States Trustee did not stigate your complaints and reprimand the staff attorney. se be assured that we take very seriously allegations rding the conduct of Program attorneys. We are informed that esponse to your earlier letters, the United States Trustee ewed and discussed your allegations and concerns with the f attorney. The United States Trustee concluded that it was opriate for the staff attorney to remain on the case. From review of the circumstances, the United States Trustee acted opriately.
We recognize that you may remain dissatisfied with the ilts achieved in the administration of this bankruptcy case. iver, our review of the available information does not .cate that the Office of the United States Trustee acted )propriately. To the extent that you still have concerns irding any tax obligations, we again urge you to consult with attorney, who can advise you and protect your interests this :er, or contact a legal aid organization.
We trust this information will be of some assistance.

Sincerely,

J Esther I. Estryn
Deputy General Counsel