Christopher J. Alf, Appellant,v.The Buffalo News, Inc., Respondent.BriefN.Y.June 20, 2013To be Argued by: JOSEPH M. FINNERTY (Time Requested: 20 Minutes) Docket No. CA12-560 Erie County Clerk’s Index No. I-2008-11720 New York Supreme Court Appellate Division - Fourth Department CHRISTOPHER J. ALF, Plaintiff-Appellant, - against - THE BUFFALO NEWS, INC., Defendant-Respondent. BRIEF FOR DEFENDANT-RESPONDENT Of Counsel: JOSEPH M. FINNERTY, ESQ. KARIM A. ABDULLA, ESQ. HISCOCK & BARCLAY, LLP Attorneys for Defendant-Respondent 1100 M&T Center 3 Fountain Plaza Buffalo, New York 14203-1414 (716) 566-1300 Today’s settlement demonstrates the United States’ determination to ensure that contractors doing business with our military departments do not divert resources needed for the war effort into their own pockets through fraud,” said acting Assistant Attorney General Jeffrey S. Buckholtz, head of the Justice Department’s Civil Division. *** “This felony conviction, which includes the largest criminal and civil penalties ever imposed in the Western District of New York, makes it clear that dishonest corporate entities are not immune from bearing substantial consequences arising from their deliberate efforts to cheat the American public,” said U.S. Attorney Terrance P. Flynn. Source: United States Department of Justice Press Release, issued after the March 26, 2008 sentencing of plaintiff’s company, National Air Cargo, and commenting on the October 2007 resolution of the criminal and civil claims against and the company and Mr. Alf. See Record on Appeal at p. 436. TABLE OF CONTENTS Page TABLE OF AUTHORITIES ........................................................................................................... i QUESTIONS PRESENTED ............................................................................................................1 SUMMARY OF ARGUMENT .......................................................................................................1 The Trial Court’s Determinations ...................................................................................... 1 Plaintiff’s Argument ............................................................................................................ 4 COUNTERSTATEMENT OF FACTS ...........................................................................................6 The Buffalo News’ Reports ................................................................................................. 8 The Plea Agreement and the October 25 Plea Proceeding .............................................. 10 The Buffalo News’ October 26, 2007 Article .................................................................... 13 ARGUMENT .................................................................................................................................22 I. CONTRARY TO PLAINTIFF’S ARGUMENT, SUMMARY JUDGMENT IN FAVOR OF THE PRESS IS THE RULE, NOT THE EXCEPTION, IN DEFAMATION CASES ......................................................... 22 II. THE TRIAL COURT WAS CORRECT IN ITS DETERMINATION THAT THE PUBLICATIONS ARE ABSOLUTELY PRIVILEGED REPORTS OF OFFICIAL PROCEEDINGS UNDER CIVIL RIGHTS LAW § 74 .............................................................................................. 24 A. The Statutory Absolute Privilege: A Question of Law for the Court ......................................................................................................... 24 B. The Courts Apply a Liberal Standard in Making the “Fair and True” Determination, and the Trial Court was Correct in Holding that the Media Should not be Held to a Strict Standard in the Use of Legal Terms of Art ............................................... 25 C. The Statutory Privilege Allows the Media to Report in its Own Words and, if the Overall Report “Fairly Characterizes” the Proceeding, Even Accommodates Instances of Error ..................................................................................... 36 1. Simplification and Summarization: Use of Lay Parlance, Common Terms, Idiom and the Vulgate ........................ 36 2. Other Excusable Instances: Departures from Source Materials; Omissions; Even Outright Mistakes ............................. 38 3. Plaintiff’s Sparse Authorities Distinguished .................................. 41 4. This Court Should Modify and Correct the Trial Court’s Incorrect Characterizations and Interpretations of The News’ Coverage ............................................................................. 43 D. Application of the Privilege to the Headlines ........................................... 44 E. In Addition to the Statutory Privilege, the Headlines and Many of the Challenged Statements are Not Actionable Because They are Not “Of and Concerning” the Plaintiff ....................... 49 III. THE PLAINTIFF’S ARGUMENTS, AND SEVERAL OF THE TRIAL COURT’S DETERMINATIONS REGARDING THE ACCURACY AND INTERPRETATION OF THE BUFFALO NEWS’ REPORTS, ARE UNSUPPORTABLE ................................................... 51 A. Plaintiff’s Arguments and the Trial Court’s Finding that The News Erroneously Reported the Company’s Admissions and that Plaintiff had ‘Admitted Cheating the Government Over a Period of Years’ is Simply Incorrect ...................................................... 52 B. Plaintiff’s Arguments and the Court’s Conclusions Concerning The News’ Alleged Reliance on “Relevant Conduct” are Equally Unavailing ............................................................ 55 i. The Accuracy of The News’ Reporting is not Solely Reliant on “Relevant Conduct” ..................................................... 56 ii. Plaintiff’s Distortion of the Record and His Arguments Concerning NAC’s Admissions do not Withstand Scrutiny .......................................................................................... 58 iii. The News’ Reports, Even if Read Within the Confines of the Federal Sentencing Guidelines, Are “Fair and True” for Purposes of the § 74 Analysis ........................................ 62 IV. PLAINTIFF’S CROSS-MOTION WAS PROPERLY DISMISSED BECAUSE THE EDITORIAL IS NON-ACTIONABLE PROTECTED OPINION AND THE FACTUAL STATEMENTS IN THE ARTICLES AND EDITORIAL ARE ABSOLUTELY PRIVILEGED ....................................................................................................... 65 CONCLUSION ..............................................................................................................................70 i TABLE OF AUTHORITIES Page(s) Cases Aronson v Wiersma, 65 N.Y.2d 592, 493 N.Y.S.2d 1006 (1985) ................................................................................... 66 Balderman v. American Broadcasting Companies, Inc., 292 A.D.2d 67, 738 N.Y.S.2d 462 (4th Dep’t 2002) ............................................................... 66, 68 Becher v. Troy Publishing Company, Inc., 183 A.D.2d. 230, 589 N.Y.S.2d 644 (3d Dep’t 1992) ............................................................ passim Bresslin v. Sun Printing & Publishing Ass’n, 177 A.D. 92, 163 N.Y.S. 915 (2d Dep’t 1917) .............................................................................. 45 Brian v. Richardson, 87 N.Y.2d 46, 637 N.Y.S.2d 347 (1995) ................................................................................. 67, 68 Brown v. Johnson Newspaper Corp., 84 A.D.2d 636, 444 N.Y.2d. 493 (3d Dep’t 1981) ........................................................................ 45 Campbell v. New York Evening Post, Inc., 245 N.Y. 320, 157 N.E. 153 (1927) ............................................................................................... 46 Cancer Action N.Y. v. St. Lawrence County Newspapers Corp, 12 A.D.3d 880, 784 N.Y.S.2d 727 (3d Dep’t 2004) ...................................................................... 67 Carlucci v. Poughkeepsie Newspapers, Inc., 57 N.Y.2d 883, 456 N.Y.S.2d 44 (1982) ....................................................................................... 50 Chaiken v. VV Publishing Corp., 907 F.Supp. 689 (S.D.N.Y. 1995), aff’d, 119 F.3d 1018 (2d Cir. 1997), cert. denied, 522 U.S. 1149, 118 S.Ct. 1169, 140 L.Ed.2d 179 (1998) ......................................... 49 Cholowsky v. Civiletti, 16 Misc.3d 1138A, 851 N.Y.S.2d 57 (Sup. Ct. Suffolk Co. 2007), aff’d, 69 A.D.3d 110, 887 N.Y.S.2d 592 (2d Dep’t 2009) ..................................... 25, 33, 34, 35, 62 Church of Scientology International v. Time Warner, Inc., 806 F.Supp. 1157 (S.D.N.Y. 1992), 903 F.Supp. 637 (S.D.N.Y. 1995) and 932 F.Supp. 589 (S.D.N.Y. 1996), aff’d, 238 F.3d 168 (2d. Cir. 2001), cert. denied, 534 U.S. 814, 122 S. Ct. 40, 151 L. Ed. 2d 13 (2001) ................................................ 4 Cole Fisher Rogow, Inc. v. Carl Ally, Inc., 29 A.D.2d 423, 288 N.Y.S.2d 556 (1st Dep’t 1968), aff’d, 25 N.Y.2d 943, 305 N.Y.S.2d 154 (1969) ............................................................................ 45 ii Corso v. NYP Holdings, Inc., 2007 N.Y. Misc. LEXIS 6661 (Sup. Ct. New York Co. 2007)..................................................... 45 Dancer v. Bergman, 246 A.D.2d 573, 668 N.Y.S.2d 213 (2d Dep’t 1998), appeal dismissed, 92 N.Y.2d 876, 677 N.Y.S.2d 781 (1998) ........................................................ 67 DeLuca v. New York News, Inc., 109 Misc.2d 341, 438 N.Y.S.2d 199 (Sup. Ct. New York Co. 1981) ............................................ 23 Dibble v. WROC TV Channel 8, 142 A.D.2d 966, 530 N.Y.S.2d 388 (4th Dep’t 1988) ............................................. 5, 41, 42, 52, 53 Easton v. Public Citizens, Inc., 1991 WL 280688 (S.D.N.Y. 1991), aff’d, 969 F.2d 1043 (2d Cir. 1992) ............................... 25, 37 Ford v. Levinson, 90 A.D.2d 464, 454 N.Y.S.2d 846 (1st Dep’t 1982) ..................................................................... 39 Fraser v. Park Newspapers of St. Lawrence, Inc., 246 A.D.2d 894, 668 N.Y.S.2d 284 (3d Dep’t 1998) ........................................ 5, 41, 42, 52, 53, 56 Freeman v. Johnston, 84 N.Y.2d 52, 614 N.Y.S.2d 377 (1994), cert. denied, 513 U.S. 1016, 115 S.Ct. 576, 130 L.Ed.2d 492 (1994) ........................................... 23 Freeze Right Refrigeration & Air Conditioning Serv., Inc. v. City of New York, 101 A.D.2d 175, 475 N.Y.S.2d 383 (1st Dep't 1984) .................................................................... 26 Geiger v. Town of Greece and Gannett Company, Inc., et al., 2007 U.S. Dist. LEXIS 87466 (W.D.N.Y. 2007), reargument and reconsideration denied, 2007 U.S. Dist. LEXIS 87464 (W.D.N.Y. 2007), aff’d 2009 U.S. App. LEXIS 3358 (2d Cir. 2009) ............................... 30, 31, 32 George v. Time, Inc., 259 A.D. 324, 19 N.Y.S.2d 385 (1st Dep’t 1940), aff’d, 287 N.Y. 742 (1942) ............................. 25 Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997 (1974) .............................................................................................. 66 Glendora v. Gannett Suburban Newspapers, 201 A.D.2d 620, 608 N.Y.S.2d 239 (2d Dep’t 1994), lv. to appeal denied, 83 N.Y.2d 757, 615 N.Y.S.2d 875 (1994) .................................................... 39 Goetz v. Kunstler, 164 Misc.2d 557, 625 N.Y.S.2d 447 (Sup. Ct. N.Y. Co. 1995) ..................................................... 67 Gonzalez v. Gray, 69 F. Supp.2d 561 (S.D.N.Y. 1999), aff’d, 216 F.3d 1072 (2d Cir. 2000) .................................... 38 iii Grab v. Poughkeepsie Newspapers, Inc., 91 Misc.2d 1003, 399 N.Y.S.2d 97 (Sup. Ct. Duchess Co. 1977) ..................................... 40, 41, 45 Greenberg v. CBS, Inc., 69 A.D.2d 693, 419 N.Y.S.2d 988 (2d Dep’t 1979) ...................................................................... 22 Gross v. New York Times Co., 82 N.Y.2d 146, 603 N.Y.S.2d 813 (1993) ..................................................................................... 68 Guitar v. Westinghouse Electric Corp., 396 F.Supp. 1042 (S.D.N.Y. 1975), aff’d, 538 F.2d 309 (2d Cir. 1976) ....................................... 23 Gunder v. New York Times Co., 37 F.Supp. 911 (S.D.N.Y. 1941) .............................................................................................. 45, 46 Gunduz v. New York Post Co., Inc., 188 A.D.2d 294, 590 N.Y.S.2d 494 (1st Dep’t 1992) ............................................................. 45, 46 Gurda v. Orange County Publications Div. of Ottaway Newspapers, Inc., 81 A.D.2d 120, 439 N.Y.S.2d 417 (2d Dep’t 1981) (Mollen, P.J. and Titone, J., concurring in part and dissenting in part), rev’d on concurring and dissenting opinion below, 56 N.Y.2d 705, 451 N.Y.S.2d 724 (1982) ........... passim Hogan v. Herald Co., 84 A.D.2d 470, 446 N.Y.S.2d 836 (4th Dep’t 1982), aff’d, 58 N.Y.2d 630, 458 N.Y.S.2d 538 (1982) ...................................................................... 24, 25 Hollander v. Cayton, 145 A.D.2d 605, 536 N.Y.S.2d 790 (2d Dep’t 1988) .................................................................... 68 Holy Spirit Ass’n for Unification of World Christianity v. New York Times Co., 49 N.Y.2d 63, 424 N.Y.S.2d 165 (1979) ................................................................................ passim Holy Spirit Association v. Harper & Row Publishers, Inc., 101 Misc.2d 30, 420 N.Y.S.2d 56 (Sup. Ct. New York Co. 1979) ................................................ 22 Hotchner v. Castillo-Puche, 551 F.2d 910 (2d Cir. 1977), cert. denied, 434 U.S. 834, 98 S.Ct. 120, 54 L.Ed.2d 95 (1977) ..................................................................................................................... 23 Idema v. Wager, 120 F. Supp.2d 361 (S.D.N.Y. 2000), aff’d, 29 Fed. Appx. 676 (2d Cir. 2002) ...................... 25, 45 Immuno AG. v Moor-Jankowski, 77 N.Y.2d 235, 566 N.Y.S.2d 906 (1991), cert. denied, 500 U.S. 954, 111 S.Ct. 2261, 114 L.Ed.2d 713 (1991) ............................... 23, 66, 68 Ithaca College v. Yale Daily News Publishing Co., Inc., 105 Misc.2d 793, 433 N.Y.S.2d 530 (Sup.Ct. Tompkins Co. 1980), aff’d, 85 A.D.2d 817, 445 N.Y.S.2d 621 (3rd Dep’t 1981) ........................................................... 22 iv Jessel Rothman P.C. v. Sternberg, 207 A.D.2d 438, 615 N.Y.S.2d 748 (2d Dep’t 1994) .............................................................. 66, 69 Kamalian v. Reader’s Digest Association, Inc., 29 A.D.3d 527, 814 N.Y.S.2d 261 (2d Dep’t 2006) ...................................................................... 45 Karaduman v. Newsday, Inc., 51 N.Y.2d 531, 435 N.Y.S.2d 556 (1980), rearg. denied, 52 N.Y.2d 899, 437 N.Y.S.2d 1030 (1981) ............................................................ 23 Karp v. Hill & Knowlton, Inc., 631 F. Supp. 360 (S.D.N.Y. 1986) ..................................................................................... 25, 37, 44 Khan v. New York Times Co., 269 A.D.2d 74, 710 N.Y.S.2d 41 (1st Dep’t 2000) ................................................................. 22, 23 Komarov v. Advance Magazine Publishers, Inc., 180 Misc.2d 658, 691 N.Y.S.2d 298 (Sup. Ct. New York Co. 1999) ................................ 40, 41, 42 Kuan Sing Enterprises, Inc. v. T.W. Wang, Inc., 86 A.D.2d 549, 446 N.Y.S.2d 76 (1st Dep’t 1982), aff’d, 58 N.Y.2d 708, 458 N.Y.S.2d 544 (1982) ............................................................................ 66 Lawyers’ Co-Operative Pub. Co. v. West Pub. Co., 32 A.D. 585, 52 N.Y.S. 1120 (4th Dep’t 1898) ....................................................................... 44, 46 Lehman Brothers Commercial Corp. v. China International United Petroleum & Chemicals Co., Ltd., 1995 WL 608313 (S.D.N.Y. 1995) ................................................................................................ 38 Mann v. Abel, 10 N.Y.3d 271, 856 N.Y.S.2d 31 (2008), cert. denied, 555 U.S. 1170, 129 S.Ct. 1315, 173 L.Ed.2d 584 (2009) .............................................................. 66 Masson v. New York Magazine, Inc., 501 U.S. 496, 111 S. Ct. 2419, 115 L. Ed. 2d 447 (1991) ............................................................. 26 Mattingly v. News Syndicate Co., 192 Misc. 610, 81 N.Y.S.2d 30 (Sup. Ct. New York Co. 1948), aff’d, 277 A.D. 842, 97 N.Y.S.2d 914 (1st Dep’t 1950) ................................................................ 49 McDonald v. East Hampton Star, supra, 10 A.D.3d 639, 781 N.Y.S.2d 694 (2d Dep’t 2004) ...................................................................... 26 Milkovich v. Lorain Journal Co., 65 Ohio App.2d 143, 416 N.E.2d 662, cert. denied, 449 U.S. 966, 101 S. Ct. 380, 66 L. Ed. 2d 232 (1980) ........................................................................................ 68 v Millennium of Rochester, Inc. v. Town of Webster, 305 A.D.2d 1014, 758 N.Y.S.2d 582 (4th Dep’t 2003) ................................................................. 26 Mills v. Raycom Media Inc, 34 A.D.3d 1352, 824 N.Y.S.2d 845 (4th Dep’t 2006), app’l denied, 37 A.D.3d 1209, 828 N.Y.S.2d 226 (4th Dep’t 2007), app’l denied, 8 N.Y.3d 815, 839 N.Y.S.2d 453 (2007) ....................................................................................... 39 Millus v. Newsday, Inc., 89 N.Y.2d 840, 652 N.Y.S.2d 726 (1996), cert. denied, 520 U.S. 1144, 117 S.Ct. 1313, 137 L.Ed.2d 476 (1997) ......................................... 66 Misek-Falkoff v. American Lawyer Media, Inc. 300 A.D.2d 215, 752 N.Y.S.2d 647 (1st Dep’t 2002), leave to appeal denied, 100 N.Y.2d 508, 764 N.Y.S.2d 385 (2003), reargument denied, 100 N.Y.2d 616, 767 N.Y.S.2d 398 (2003), cert. denied, 541 U.S. 939, 124 S.Ct. 1693, 158 L.Ed.2d 360 (2004) ........................................... 26 Mondello v. Newsday, Inc., 6 A.D.3d 586, 774 N.Y.S.2d 794 (2d Dep’t 2004) ........................................................................ 45 Muscarella v. Berkshire Hathaway, Inc., 278 A.D.2d 854, 721 N.Y.S.2d 432 (4th Dep’t 2000), leave to appeal denied, 96 N.Y.2d 716, 730 N.Y.S.2d 31 (2001) ................................................. 37 Nekos v. Kraus, 62 A.D.3d 1144, 878 N.Y.S.2d 827 (3d Dep’t 2009) .................................................................... 53 Ortiz v. Valdescastilla, 102 A.D.2d 513, 478 N.Y.S.2d 895 (1st Dep’t 1984) ................................................................... 23 Paris v. New York Times Co., 170 Misc. 215, 9 N.Y.S.2d 689 (Sup.Ct., New York Co. 1939), aff’d, 259 A.D. 1007, 21 N.Y.S.2d 512 (1st Dep’t 1940) ........................................................ 44, 45 Pinero v. N.Y.P. Holdings, Inc., 17 Misc. 3d 1102A, 851 N.Y.S.2d 60 (Sup. Ct., New York Co. 2007) ................................... 67, 69 Polish American Immigration Relief Committee, Inc., v. Relax, 189 A.D.2d 370, 596 N.Y.S.2d 756 (1st Dep’t 1993) ................................................................... 69 Proskin v. Hearst, 14 A.D.3d 782, 787 N.Y.S.2d 506 (3d Dep’t 2005) ...................................................................... 54 Rinaldi v. Holt, Rinehart & Winston, Inc., 42 N.Y.2d 369, 397 N.Y.S.2d 943 (1977), rearg. denied, 42 N.Y.2d 1015, 398 N.Y.S.2d 1033 (1977), cert. denied, 434 U.S. 969, 98 S.Ct. 514, 54 L.Ed.2d 456 (1977) ........................................... 23, 66 vi Rubel v. The Daily News, supra, 2010 NY Slip Op. 32407U, 2010 N.Y. Misc. LEXIS 4273 (Sup. Ct. New York Co. 2010) ...................................................................................................... 39 Saleh v. New York Post, 78 A.D.3d 1149 (2d Dep’t 2010) ..................................................................................................... 4 Salisbury v. Union & Advertiser Co., 45 Hun 120 .................................................................................................................................... 46 Schermerhorn v. Rosenberg, 73 A.D.2d 276, 426 N.Y.S.2d 274 (1980) ..................................................................................... 50 Seldon v. Shanken, 143 A.D.2d 3, 531 N.Y.S.2d 264 (1st Dep’t 1988) ....................................................................... 46 Shulman v. Hunderfund, 12 N.Y.3d. 143, 878 N.Y.S.2d 230 (2009) .................................................................................... 26 Springer v. Viking Press, 60 N.Y.2d 916, 470 N.Y.S.2d 579 (1983) ..................................................................................... 50 Steinhilber v. Alphonse, 68 N.Y.2d 283, 508 N.Y.S.2d 901 (1986) ......................................................................... 66, 67, 68 Tenney v. Press-Republican, 2010 N.Y. Slip. Op. 6123, 2010 N.Y. App. Div. LEXIS 6214, 75 A.D.3d 868, 905 N.Y.S.2d 356 (3d Dep’t 2010) ................................................................ 26, 39 Trudeau v. Plattsburgh Pub. Co., 11 A.D.2d 852, 202 N.Y.S.2d 412 (3d Dep’t 1960) ................................................................ 46, 49 United States v. Barrett, 173 F.3d 682 (8th Cir. 1999) ......................................................................................................... 61 United States v. Granik, 386 F.3d 404 (2d. Cir. 2004) .................................................................................................... 61, 62 United States v. Harrison, 20 M.J. 710 (A.C.M.R. 1985) ........................................................................................................ 56 United States v. Lopez, 356 F.3d 463 (2d Cir. 2004)........................................................................................................... 61 United States v. Martinez, 122 F.3d 421 (7th Cir. 1997) ......................................................................................................... 61 United States v. Telesco, 962 F.2d 165 (2d Cir. 1992)........................................................................................................... 61 vii Washington Post Co. v. Keogh, 365 F.2d 965 (D.C. Cir. 1966), cert. denied, 385 U.S. 1011, 87 S.Ct. 708, 17 L.Ed.2d 548 (1967) ............................................... 23 White v. Berkshire-Hathaway, Inc., 10 Misc.3d 254, 802 N.Y.S.2d 910 (Sup.Ct., Erie Co., 2005) ......................... 37, 44, 45, 49, 50, 51 Statutes 18 U.S.C. § 1001(a)(2) ......................................................................................................................... passim Civil Practice Act § 337 .............................................................................................................................. 46 N.Y. Civ. R. Law § 74 (McKinney’s 2009) ......................................................................................... passim Other Authorities Sentencing Guideline § 1B1.3 .................................................................................................................... 64 Sentencing Guideline § 2B1 ....................................................................................................................... 58 Sentencing Guideline § 6B1.4 ................................................................................................................... 61 Sentencing Guideline § 6B1.4(a) ................................................................................................................ 61 Sentencing Guideline § 6B1.4(b) ................................................................................................................ 61 Sentencing Guideline § 8B1.1 .................................................................................................................... 63 Sentencing Guideline § 8C2.5(a) ................................................................................................................ 63 Sentencing Guideline § 8C2.5(b)(4) ........................................................................................................... 63 Sentencing Guideline § 8C2.5(e) ................................................................................................................ 63 Sentencing Guideline § 8C2.5(g) ...................................................................................................... 8, 28, 63 Sentencing Guideline § 8C2.5(g)(3) ........................................................................................................... 64 1 QUESTIONS PRESENTED 1. Was the Trial Court correct in its dismissal of plaintiff’s claims on the basis of New York Civil Rights Law § 74? Yes. The court below properly dismissed plaintiff’s Amended Complaint based on its correct conclusion that the defendant’s published reports were absolutely privileged pursuant to New York Civil Rights Law § 74. It also could have dismissed challenged statements as absolutely protected opinion or because they are not “of and concerning” the plaintiff. 2. Was the Trial Court correct in its determination that The Buffalo News’ reporter inaccurately relied on terms of art in the official proceedings and that the resulting reports, although privileged, were “not technically accurate”? No. A comparison between the official records and the publications leaves no doubt that The Buffalo News’ reporting was accurate in all material respects. SUMMARY OF ARGUMENT This case involves a series of Buffalo News reports regarding the federal criminal investigation of and felony guilty plea by National Air Cargo (“NAC” or the “Company”), plaintiff’s closely-held freight forwarding company located in Orchard Park, New York. The primary -- but not the sole -- basis for Defendant’s Motion was that the reports are protected by the absolute privilege afforded by Section 74 of New York’s Civil Rights Law (“§ 74”), which provides: A civil action cannot be maintained against any person, firm or corporation, for the publication of a fair and true report of any judicial proceeding, legislative proceeding or other official proceeding, or for any heading of the report which is a fair and true headnote of the statement published. N.Y. Civ. R. Law § 74 (McKinney’s 2009). The Trial Court’s Determinations Having before it a complete record of the official proceeding source materials and the entirety of The News’ reporting, the Trial Court (Hon. Gerald J. Whalen, J.S.C.) correctly held the reports were 2 indeed protected under § 74, dismissing plaintiff’s claims in their entirety and denying plaintiff’s Cross- Motion. R. 16. In doing so, the Trial Court made several determinations. First, Justice Whalen determined that “[i]t is clear that the allegedly libelous articles were reporting on a judicial proceeding and, as such, satisfy the first prong required for the privilege to apply.” R. 12. This was correct, and plaintiff has not challenged this determination. Second and consistent with well established law, the Trial Court held that “[i]n cases involving allegations of libel, courts are encouraged to decide motions for summary judgment early in the litigation. Allowing cases to proceed through discovery extends the time and expense associated with defending the claims and could result in an undesirable ‘chilling’ effect on news gathering organizations thereby implicating state and federal constitutional rights.” R. 13. This determination also was correct and the plaintiff does not challenge the ripeness of The News’ asserted defenses for determination. (See generally Plaintiff’s Brief at Point III.) Third and in response to plaintiff’s attack on The News’ reporting based on a hyper-technical parsing of the language of the written plea agreement (“Plea Agreement”), the in-court colloquy among Federal Judge William Skretny and counsel during the plea and subsequent proceedings, and the Federal Sentencing Guidelines, the Trial Court correctly concluded plaintiff’s arguments were “unpersuasive” and that “[t]o hold a newspaper reporter to such a standard as to require technical legal knowledge of specific terms used during a legal proceeding, such as federal sentencing, in order to submit an article for publication is unreasonable.” R. 15. Citing the Court of Appeals’ decision in Holy Spirit Association for the Unification of World Christianity v. The New York Times Company, 49 N.Y.2d 63, 424 N.Y.S.2d 165 (1979), Justice Whalen held that when undertaking a § 74 analysis, “newspaper accounts of legislative or other official proceedings must be afforded some degree of liberality … [w]hen determining whether an article constitutes a ‘fair and true’ report, the language used therein should not be dissected and analyzed with a lexicographer’s precision” Id. This is a correct and time-honored jurisprudential standard. While plaintiff has challenged these determinations on this Appeal (see, e.g., Plaintiff’s Brief at Point II), the Trial Court was correct to employ the standard and to dismiss the case. In any event, however, the 3 reporting concerning both the guilty plea and the attendant additional admissions of NAC was exactly correct, and the reporter’s articles were in all respects fair and accurate for § 74 purposes even if a lexicographically precise standard had been applied to them. See Argument at Point III, infra. Fourth, the Trial Court properly recognized that the “plaintiff concedes [that he] was the founder, sole shareholder and former president and chief executive officer of NAC [and] acknowledges that NAC is closely identified with [him] and that [his] personal identity and reputation were and are inextricably identified with NAC in the minds of the general public.” Decision at p. 9 (R. 14). Justice Whalen ultimately and correctly concluded that the reports are privileged, stating “[w]hen viewed in the totality of circumstances, the reporter’s factual account of what transpired is accurate enough to fall under the protection of § 74 of the Civil Rights Law.” R. 16. This determination is consistent with well established law, correct and should be upheld. See Counterstatement of Facts and Argument at Points II and III, infra. Before reaching this conclusion, however, the Trial Court incorrectly interpreted and characterized The News’ reporting, opining, among other things, that: “the reporter’s depictions of ‘relevant conduct,’ in the plea agreement and during the plea colloquy, as evidence of additional admissions by NAC and Alf is inaccurate” (R. 14); “The News’ articles inaccurately relied upon the terms of the plea agreement and the in-court colloquy at sentencing” (R. 16); and some of the statements in the articles were “not technically accurate” (R. 16). These conclusions are not supported by the evidence. The reporter faithfully and accurately reported the proceedings, fairly portrayed the Plea Agreement and the in-court statements of the parties’ counsel, and was correct in his interpretation of the import of these, as well as of the applicable federal guidelines. See Argument at Point III, infra. This Court should modify the Decision in this regard. Moreover, the Trial Court incorrectly interpreted the reporting to have expanded the scope of the charges and admissions of NAC and to have reported admissions or pleas by Mr. Alf personally that he never made. While Mr. Alf settled civil fraud allegations against him personally and authorized his Company’s criminal and civil plea, admissions and settlements, The News’ reporting carefully delineated 4 the Company’s actual limited guilty plea from its broader acknowledgement of conduct that harmed the government, and it reported not only that plaintiff had pleaded guilty to nothing, but that -- even though he owned and controlled the guilty Company -- the resolution his representatives achieved insulated him from personal criminal responsibility. Indeed, protected opinions of The News and others legitimately questioned the fairness of this resolution in the context of his sole ownership and control of the felonious Company. As demonstrated below, the publications are non-actionable as a matter of law because they are either fair and accurate reports of official proceedings (or, with regard to the headlines, a fair index of the articles), non-actionable opinion, not “of-and-concerning” Mr. Alf, are simply not demonstrably false, and/or a combination of the above. In considering the appeal, it is appropriate for this Court individually and contextually to analyze and dispose of each challenged statement. See, e.g., Church of Scientology International v. Time Warner, Inc., 806 F.Supp. 1157 (S.D.N.Y. 1992), 903 F.Supp. 637 (S.D.N.Y. 1995) and 932 F.Supp. 589 (S.D.N.Y. 1996), aff’d, 238 F.3d 168 (2d. Cir. 2001), cert. denied, 534 U.S. 814, 122 S. Ct. 40, 151 L. Ed. 2d 13 (2001); see also, e.g., Saleh v. New York Post, 78 A.D.3d 1149, 1152 (2d Dep’t 2010). (In this regard, see the exhaustively detailed analysis by the defendant tying each challenged statement to its underlying source material from the official proceedings as included in the Affidavit of Joseph M. Finnerty submitted in support of Defendant’s Motion. See the Finnerty Affidavit at ¶¶ 23-190 (R. 107- 163) and its Exhibits 3-33 (R. 173-471). See also the “Schedule” annexed to this Brief, a chart correlating in a visually efficient way each challenged statement to its basis in the federal documents and transcripts. This chart simply puts into graphic form the referenced content of the Finnerty Affidavit and was presented to the Trial Court in essentially this format as part of Defendant’s Memorandum of Law in support of its Motion for Summary Judgment.) Plaintiff’s Argument The stated foundation for plaintiff’s argument, both before the Trial Court and on this Appeal, is that The News’ reports were not ‘fair and true’ for purposes of the § 74 analysis because they falsely 5 expanded the scope of the charges against the Company and accused him and the Company of admitting to conduct he claims they were neither responsible for nor ever admitted. See, e.g., Plaintiff’s Brief at pp. 13-14; see also Amended Complaint at ¶ 10 (R. 20). Accordingly and relying primarily on Dibble v. WROC TV Channel 8, 142 A.D.2d 966, 530 N.Y.S.2d 388 (4th Dep’t 1988) and Fraser v. Park Newspapers of St. Lawrence, Inc., 246 A.D.2d 894, 668 N.Y.S.2d 284 (3d Dep’t 1998), plaintiff claims Defendant’s § 74 defense should be rejected. See generally Plaintiff’s Brief at pp. 5, 19-26, 43-46. There are several fatal errors in this argument. First is the simple fact that plaintiff’s interpretation is a gross mischaracterization of the newspaper’s reporting. The newspaper clearly, correctly and repeatedly reported only that NAC (which, incidentally, is not a party this proceeding) -- and not the plaintiff -- had been charged with and pleaded guilty to a single-count criminal information of submitting a false statement. For example: • “Orchard Park company admits cheating U.S. military” (headline, October 26, 2007 Article, R. 34) (emphasis added); • “A local air cargo company […] took a guilty plea in Buffalo’s federal court on Thursday…” (October 26, 2007 Article, R. 34) (emphasis added); • “A felony guilty plea to one count of making a false statement was accepted late Thursday by District Judge William M. Skretny.” (October 26, 2007 Article, R. 34) (emphasis added); • “If Skretny decides to fine the company more than the $28 million agreed upon, National Air Cargo can withdraw its guilty plea and insist on going to trial.” (October 26, 2007 Article, R. 34) (emphasis added); • “An Orchard Park company that cheated the U.S. Defense Department out of millions of dollars…” (October 27, 2007 Article, R. 37) (emphasis added); • “Alf is the founder and owner of National Air Cargo, which took a corporate guilty plea in federal court Thursday, agreeing to pay more than $28 million in government fines and forfeitures.” (October 27, 2007 Article, R. 37) (emphasis added); • “The Orchard Park company that admitted overbilling the U.S. Defense Department…” (November 1, 2007 Article, R. 39) (emphasis added); • “Christopher J. Alf’s company was accused of cheating the government out of millions of dollars…” (March 2, 2008 Article, R. 42) (emphasis added); • “… National Air Cargo has agreed to pay fines and restitution totaling $28 million.” (March 2, 2008 Article, R. 42) (emphasis added); 6 • “The company pleaded guilty in October to a single count of falsifying records to say that a military shipment arrived on time when it was late.” (March 2, 2008 Article, R. 42). (Emphases added). Contrary to Plaintiff’s assertions, nowhere in any of the many newspaper reports did The Buffalo News overstate the charges against the Company. Nowhere did the newspaper ever report that plaintiff had been criminally charged. Nowhere did the newspaper ever report that plaintiff had pleaded guilty to any crimes. Accordingly, this most elemental basis of plaintiff’s argument plainly lacks merit. Second, the plaintiff’s myopic argument -- that The News’ reports of NAC having admitted cheating the government out of millions of dollars are not “fair and true” for purposes of the § 74 analysis -- ignores the basic facts of what actually happened in federal court: just as it is indisputable that NAC pleaded guilty to a negotiated single-count felony charge of submitting a false document to the Defense Department, it is equally indisputable that, pursuant to the terms of the Plea Agreement and as expressly confirmed orally in court on October 25, 2007 (the “Plea Proceeding”), NAC’s conduct resulted in an admitted multi-million dollar loss to the government which, in turn, formed the arithmetic basis of its criminal fine, penalty and restitution requirements. See Plea Agreement at ¶ 7 and 10 (R. 290, 291) and discussion infra. Plaintiff’s attempt to cloud the issue by asking this Court to ignore the record available to the reporter at the time the Articles were written and, instead, to refer the Court to self-serving arguments made and materials created or released after the Articles were published (see, e.g., Plaintiff’s Brief at pp. 16-19, 31-33, 35-36, 38-39, 42) is pure shell-game trickery, and plaintiff’s characterization of the record and his counsel’s application of a scalpel to the language of the controlling documents, statutes and guidelines simply does not withstand either legal or factual scrutiny. COUNTERSTATEMENT OF FACTS Following a multi-year investigation by the Defense Department’s Criminal Investigative Service, the Federal Bureau of Investigation and the United States Attorney’s office in Buffalo, NAC on 7 October 25, 2007 with plaintiff’s express authorization (R. 306-308) pleaded guilty to a negotiated single- count federal felony charge (also filed October 25, 2007 (see R. 173)) of submitting a falsified document to the Department of Defense. Contrary to Plaintiff’s claim that the Company’s dispute with federal investigators was limited to a disagreement concerning the interpretation of conflicting regulations (the “air-truck issue; see, e.g., Plaintiff’s brief at pp. 2, 9-10, 16-17), the felony in fact was wholly unrelated to this issue; instead it charged that the Company “did knowingly and willfully make a materially false statement of fact, in that [it] knowingly and willfully sent to the Defense Logistics Agency, an agency of the United States Department of Defense, a falsified proof of delivery (POD) document.” R. 173 (emphasis added). Moreover and as NAC admitted by pleading guilty, the felony charged that “[t]hat falsified POD document, which was submitted in response to an audit request by the Defense Logistics Agency for proof of timely delivery of shipments by [NAC], was altered to show a [sic] earlier delivery date, when in truth and in fact, as [the Company] well-knew, the true delivery date was later.” (R. 173-174, emphasis added.) (As later alleged by the Company and reported by The News (R. 451), NAC billed the government $400 for the delivery.) While the Criminal Information (R. 173-174) only formally charged the Company with a one-count criminal felony, the guilty plea and attendant Plea Agreement resolving the criminal charge, by its express terms, encompassed a much more sweeping pattern of misconduct: The guilty plea entered pursuant to this agreement is in satisfaction of (a) any and all federal offenses committed for the period of January 1999 to and including April 2005 by the defendant based on facts set forth in ¶ 4 of this agreement and (b) based on facts or documents known to the government or upon documents in the possession of the Office of the United States Attorney for the Western District of New York at the time a guilty plea is entered pursuant to this agreement that relate to (i) late delivery of freight, (ii) facts or documents which the government would allege constitute false claims or false statements relating to NAC’s carriage of freight for the United States, (iii) use by NAC of the PowerTrack [electronic billing] system; or (iv) facts relating to the mode or method chosen by NAC to perform work under a freight contract with the United States. R. 287 at ¶ 2. In this context, NAC agreed to a criminal restitution order “for the full amount of the victim’s loss, which is agreed to be $4,400,000.” R. 290 at ¶ 7. Additionally, the Court, based on the 8 admitted loss, imposed a criminal fine against the Company in the amount of $8,800,000, the maximum amount allowable by law. R. 292-293 at ¶ 19. Additionally and expressly, by the terms of the Plea Agreement (see ¶ 15 (R. 291)), NAC received the benefit of a one-point subtraction from its culpability score under the federal Guidelines. The acceptance of this “credit” specifically reflected its “… affirmative acceptance of responsibility for its criminal conduct” (Guideline § 8C2.5(g)) and its: … truthful admission of involvement in the offense and related conduct. Application Notes, Guidelines § 8C2.5(g). This is the precise language verbalized in open court during the Plea Proceeding (namely, “related conduct”) by the U.S. Attorney in discussing -- in Mr. Herbeck’s presence -- the parties’ Plea Agreement and the acknowledged $4.4 million loss to the country. Plea Proceeding Transcript at pp. 46-47 (R. 239-240). As part and parcel of the Plea Agreement (R. 286-308), plaintiff’s Company also settled a separate civil forfeiture claim (R. 175-181), agreeing to repay $7,429,000 (R. 300) “alleged to be the proceeds of specified unlawful activity, to wit, wire fraud, in violation of Title 18, United states Code, Section 1343.” (R. 176). At the same time, the Company also agreed “to pay a total of $7,371,000 in FCA [False Claims Act] damages and penalties” (R. 301) for alleged violations of the federal False Claims Act that had been asserted against both NAC and plaintiff personally. (R. 182-193). The Buffalo News’ Reports The Buffalo News’ reporting of the matter began in July 2006 -- over a year prior to the eventual guilty plea -- with an article headlined “Orchard Park air carrier probed over overcharges.” R. 438-439. This article -- for which plaintiff refused to comment and the accuracy of which he never challenged -- includes many of the same allegations plaintiff now claims are false and defamatory. Compare R. 438- 439 (the July 16, 2006 article) with R. 438-445 and R. 450-454 (the publications in this lawsuit). Between July 16, 2006 and December 28, 2009, a total of 18 articles, editorials and commentary pieces concerning the federal investigation and related lawsuits were published by The Buffalo News. 9 R. 438-471. Plaintiff’s claims in his Amended Complaint, however, were limited to twenty-eight (28) statements published in six articles (collectively “the Articles”) published between October 26, 2007 and March 5, 2008. See Decision and Order at R. 8-11; see also Plaintiff’s Amended Complaint at ¶ 19A-S, 19BB-JJ (R. 23-27). Of the twenty-eight challenged statements, twenty-one did not reference plaintiff; rather they referred to the allegations against, or the actions of, “the company” or “National Air Cargo.” R. 24-27. Journalist Herbeck, the reporter responsible for the statements in the Articles (R. 556 at ¶¶ 26- 27), is a veteran investigative reporter for The Buffalo News with over three decades of journalistic experience (R. 549 at ¶ 2). Plaintiff also claims eight (8) statements in a November 8, 2007 editorial headlined “Taxpayers are cheated” (the “Editorial”) (R. 445), were actionably defamatory. See Decision and Order at R. 10; see also Plaintiff’s Amended Complaint ¶ 19T-AA (R. 25-26). None of these statements expressly referred to plaintiff, either. R. 25-26. The Editorial writer, Kevin Walter, also has over three decades of experience as a journalist and editorialist. R. 558-559 at ¶¶ 3-7. The October 26, 2007 article (see R. 440-441) -- which formed the factual basis for the subsequent challenged reports -- advised the public of both the limited nature of NAC’s October 25, 2007 felony guilty plea as well as the related multi-million dollar criminal resolution and the “global settlement” of the civil forfeiture and False Claims Act claims. The Plea Proceeding occurred in open court before Judge Skretny. R. 109 at ¶ 25; R. 550-555 at ¶¶ 6-24. Mr. Herbeck personally attended. R. 109 at ¶ 25; R. 550 at ¶ 6. At its conclusion, he conducted interviews with the attorneys involved. R. 109 at ¶ 25; R. 551 at ¶ 7; R. 555 at ¶21. In preparing the article, the reporter had access to and reviewed a number of documents including the Criminal Information, Forfeiture Complaint, a press release issued by the U.S. Attorney, a brief statement issued by counsel on behalf of NAC and the complex, eighteen-page Plea Agreement itself. R. 109 at ¶ 25; R. 551 at ¶7. True and correct copies of these documents are included in the Record at R. 173-174, R. 175-181, R. 435, R. 532 and R. 286-308, respectively. Any other documents settling civil claims either were not in existence or were unavailable publicly prior to March 5, 2008, the date of the last article challenged by the plaintiff. R. 27. 10 The Plea Agreement and the October 25 Plea Proceeding At the Plea Proceeding, NAC, on Mr. Alf’s written authorization (R. 306-308), expressly admitted that it was guilty of violating 18 U.S.C. § 1001(a)(2), a federal criminal statute which makes it a crime to “… knowingly and willfully … [make] any materially false, fictitious or fraudulent statement or representation …” when dealing with the United States Government. R. 109 at ¶ 26; see also R. 286 (the Plea Agreement) at ¶ 1; and see Plea Proceeding at pp. 26-28 (R. 219-221). As stated above, the guilty plea expressly satisfied not only the charged felony count, but also “… in satisfaction of (a) any and all federal offenses committed for the period of January 1999 to and including April 2005 by the defendant based on facts set forth in ¶ 4 of this agreement and (b) based on facts or documents known to the government or upon documents in the possession of the Office of the United States Attorney for the Western District of New York at the time a guilty plea is entered pursuant to this agreement that relate to (i) late delivery of freight, (ii) facts or documents which the government would allege constitute false claims or false statements relating to NAC’s carriage of freight for the United States, (iii) use by NAC of the PowerTrack [electronic billing] system; or (iv) facts relating to the mode or method chosen by NAC to perform work under a freight contract with the United States. In connection with its plea, NAC expressly agreed and admitted its conduct caused a $4.4 million loss to the government and entitled the government to an order of restitution in that amount. R. 286-293 (Plea Agreement) at ¶¶ 1, 4(h), 7, 10, 12, 19 and 20; R. 238-244 (October 25, 2007 transcript) at pp. 45-46, 46-47, 50-51. A criminal fine of $8.8 million (the maximum allowable) also was imposed (R. 293 at ¶ 20), representing a doubling of the amount of the harm caused by the criminal fraud (R. 292-293 at ¶ 1). Penalties and civil forfeitures (related to forfeiture and False Claims Act proceedings) in the additional amount of $14.8 million (R. 298 at ¶31 and R. 299 at ¶34) also were included in the Plea Agreement based on government calculations of years of overbillings by NAC. The total amount NAC agreed to pay to resolve the criminal prosecution, forfeiture and False Claims Act claims was $28 million. The fact that NAC plainly and unequivocally admitted that its conduct cost the government millions of dollars is incontrovertible: in addition to the plain language of the Plea Agreement (“… the Court will enter a restitution order for the full amount of the victim’s loss, which is agreed to be 11 $4,400,000.” R. 290 at ¶ 7), the Assistant United States Attorney, Gretchen Wylegala (“Ms. Wylegala”) expressly stated and NAC’s “National Counsel,” F. Whitten Peters (“Mr. Peters”), expressly admitted during the Plea Proceeding that the monetary loss to the government resulting from the Company’s conduct was in the millions: THE COURT: And that given that, the base fine would be $4,400,000, which I guess is described as the pecuniary gain to the organization from the offense. Ms. Wylegala, is there agreement on that? MS. WYLEGALA: Yes. Or loss to the Government, a loss to the victim. THE COURT: Or loss to the victim. MS. WYLEGALA: Yes. THE COURT: Mr. Peters? MR. PETERS: We agree that the 4.4 is the loss to the victim, Your Honor …. R. 243-244 (emphasis added). Moreover, while it was acknowledged by the Court and NAC (and, indeed, repeatedly and accurately reported by The News (see, e.g. R. 35, 42, 48, 440, 446, 448, 451 and discussion supra)) that the formal guilty plea was to a “one-count information,” it was clear the government’s case against plaintiff’s Company involved not just a single instance of malfeasance, but rather multiple falsifications, proofs of delivery and other fraudulent behavior of NAC that spanned a period of years: MS. WYLEGALA: […] the investigation covered more than that one single charge and by agreement and after much consultation, the parties are agreed that the loss to the Government based upon similar and related conduct as is evidenced by what we are not going to prosecute further is the $4,400,000 lost to the United States Department of Defense. (R. 239-240) (emphasis added). * * * * * … we agree that National Air Cargo, its affiliated companies, and there is a understanding between the Government and counsel as to what companies those are, nor any present or former owners, directors, officers, or employees of National Air Cargo or its affiliated companies will be processed by my office or the office of the U.S. Attorney, Western District of New York for the criminal offenses that relate to the facts set forth in 12 ¶ 4 of the [plea] agreement, which are the falsifications, proofs of delivery sent as confirmation of delivery dates. THE COURT: Including relevant conduct? MS. WYLEGALA: Well, including conduct between January of 1999 until April of 2005 and, additionally, any Federal criminal offenses that are based upon the documents that are in our possession. (R. 255-256) (emphasis added) (note the plurals). As made clear to (and reported by) The News by then-United States Attorney Terrance P. Flynn: “The focus of the investigation was improper billing and submitting false documents to the Defense Department,” Flynn said. “Our goal was to try and make the American taxpayer whole, and to put a stop to the illegal activity. We definitely feel we’ve done that.” * * * * * “[w]e consider their conduct appalling. That’s why we pursued this investigation [and] got them to plead guilty to a felony.” R. 34-36; 440-441 (October 26, 2007 Article quoting Mr. Flynn). This was repeated by the Department of Justice itself, which publicly reported at the conclusion of sentencing: “Today’s settlement demonstrates the United States’ determination to ensure that contractors doing business with our military departments do not divert resources needed for the war effort into their own pockets through fraud,” said acting Assistant Attorney General Jeffrey S. Buchholtz, head of the Justice Department’s Civil Division. * * * * * “This felony conviction, which includes the largest criminal and civil penalties ever imposed in the Western District of New York, makes it clear that dishonest corporate entities are not immune from bearing substantial consequences arising from their deliberate efforts to cheat the American public,” said U.S. Attorney Terrance P. Flynn. R. 436 (emphasis added). Noticeably absent from the Plea Agreement and the Plea Proceeding is an express or implied declaration of innocence or a denial of liability on the part of NAC. Nowhere in the Plea Agreement does it state, and at no time during the lengthy Plea Proceeding did the Company or its many lawyers claim (as the plaintiff later asserted in other post-plea contexts and now asserts on this appeal, see, e.g., Plaintiff’s Brief at p. 2), that NAC was the innocent victim of confusing or conflicting regulations, or that the 13 settlement was a business decision made purely for economic reasons. To the contrary, by the express terms of the Plea Agreement and its open-court admissions, NAC expressly admitted that it perpetrated a fraud and that its conduct cost the government $4,400,000.00. See discussion, supra. Indeed, following the conclusion of the Plea Proceeding, the reporter contacted Mr. Alf’s office for comment. R. 555 at fn. 2. Plaintiff did not return Mr. Herbeck’s call; instead, the reporter received a short, cryptic email from one of the Company’s Washington, D.C. attorneys. Id; and see R. 531. Nowhere in this short statement (parts of which were quoted in the October 26, 2007 Article (see R. 441 and compare R. 531) did the Company (or plaintiff) deny any wrong-doing. R. 531. On the above, anyone attending the October 25, 2007 Plea Proceeding or reviewing the Plea Agreement would have heard or seen for themselves that: (a) while NAC was pleading guilty to a single felony count, the admitted losses to the government ran into the millions of dollars; (b) the conduct spanned a period of years; (c) as part of the Plea Agreement, the government agreed to not prosecute Mr. Alf and other Company officials for any of the “criminal offenses” committed during this period; and (d) as part and parcel of the Plea Agreement, the Company agreed to pay more than $13 million in crime-based sanctions, plus $7,429,000 to resolve the forfeiture claim and $7,371,000 to resolve the qui tam (False Claims Act) claims. The Buffalo News’ October 26, 2007 Article This is exactly what The News reported on October 26, 2007 and in subsequent reports. Indeed, a comparison between the challenged statements in the October 26, 2007 Article and the official- proceedings source material conclusively establishes the fairness and accuracy of The News’ reporting: “Orchard Park company admits cheating U.S. military” [Headline] (R. 24 at ¶ 19A.) • See Plea Agreement at ¶ 1 (R. 286 ) (stating that Company is pleading guilty to 18 U.S.C. 1001(a)(2): knowingly and willfully making a materially false or fraudulent statement); • See Transcript of Plea Proceeding at pp. 26-28 (R. 219-221) (in which the Court establishes, and NAC admits the knowing and willful submission of a materially false or fraudulent statement); 14 • See October 25, 2007 Department of Justice Press Release (R. 435) (in which government representatives emphasized that the guilty plea “resolved an ongoing multi-agency investigation into National Air Cargo’s domestic billing and shipping practices” and described the investigation as one of “fraud and abuse [] to ensure accountability and efficiency for the American taxpayer.”); • See also, Black’s Law Dictionary (St. Paul, Minnesota: Thomson/West 8th Edition 1999) (2nd Reprint 2007), p. 252 (which defines “cheating” as “The fraudulent obtaining of another’s property by means of a false symbol or token, or by other illegal practices. …the intentional obtaining of both the possession and ownership of money…by means of misrepresentations, with the intent to defraud.”). “A local air cargo company that delivers food, medicine and military equipment to soldiers in Iraq took a guilty plea in Buffalo’s Federal Court on Thursday, admitting it cheated the U.S. Defense Department out of millions of dollars.” (R. 24 at ¶ 19B.) • See Plea Agreement at ¶¶ 1, 4(h), 7, 10, 19 and 20 (R. 286, 289, 290, 291, 292-293) (setting forth the fact that the acknowledged loss to the government as a result of NAC’s conduct was $4.4 million); • See Transcript of Plea Proceeding at pp. 46-51 (R. 239-244) (NAC agrees in open court that the loss to the government as a result of its conduct was $4,400,000); • See Transcript of Plea Proceeding at pp. 50-51 (R. 243-244) (F. Whitten Peters, NAC’s “National Counsel” to Judge Skretny during plea proceeding: “We agree that the 4.4 [million dollars] is the loss to the victim, Your Honor ….”); • See also Transcript of March 6, 2008 hearing at pp. 34-35 (R. 356-357) (in which the United States Attorney states that this is a case involving “in very simplistic terms, overbilling of the government” and that “the agreed-upon loss to the government that is agreed by us, agreed by National Air Cargo, and agreed by the agencies involved in 4.4 million. And that’s - that amount will recompense the government for the subset of overcharges that we felt were part of the criminal conduct.”); • And see Verified Complaint for Forfeiture at ¶¶ 3-6 (R. 176-179) (setting forth the allegation that plaintiff’s company, NAC, through the illegal act of wire fraud, received for over a period of years over $17 million in payments from the federal government, that of that amount, “it is alleged $13,870,000 was 15 received by NAC in connection to false statements relating to the services that NAC provided” and that such false statements resulted in net proceeds to the Company of nearly $7.429 million. By the express terms of the Plea Agreement (see ¶¶ 33-38 (R. 299-301)), the Company agreed not to contest the forfeiture proceeding and immediately to forfeit the entirety of the $7.429 million). “Federal Prosecutors and the company emphasized that the crimes uncovered involved military shipments within the continental United States.” (R. 24 at ¶ 19C.) • See Plea Agreement at ¶ 1 (R. 286-287) (stating that the Company is pleading guilty to 18 U.S.C. 1001(a)(2), the felony offence of knowingly and willfully making a materially false or fraudulent statement) and ¶ 2 (stating that “The guilty plea entered pursuant to this Agreement is in satisfaction of (a) any and all federal offenses committed for the period between January 1999 to and including April 2005…”); • See Transcript of Plea Proceeding at p. 26 (R. 219) (in which the Court, in discussing the felony charge, expressly refers to “a factual basis that makes reference to a much more expansive series of transactions …”); • See Transcript of Plea Proceeding at pp. 46-47 (R. 239-240) (in which the United States Attorney states that “the investigation covered more than that one single charge and by agreement and after much consultation, the parties are agreed that the loss to the Government based upon similar and related conduct as is evidenced by what we are not going to prosecute further is the $4,400,000 lost to the United States Department of Defense”); • See October 25, 2007 Department of Justice Press Release (R. 435) (in which government representatives emphasized that the guilty plea, which “resolved an ongoing multi-agency investigation into National Air Cargo’s domestic billing and shipping practices,” included an agreement by the Company “to pay restitution to the United States in the amount of $4.4 million” and a “criminal penalty fine of $8.8 million.” The Press Release, which characterized the investigation as one of “fraud and abuse [] to ensure accountability and efficiency for the American taxpayer” expressly referred to Mr. Alf as the 16 Company’s owner and described the $28 million resolution as “the largest criminal monetary resolution in the history of the Western District of New York”) (emphasis added); • See also March 26, 2008 Department of Justice Press Release (R. 436-437) (in which government representatives stated: “[t]oday’s settlement demonstrates the United States’ determination to ensure that contractors doing business with our military departments do not divert resources needed for the war effort into their own pockets through fraud,” and “[t]his felony conviction, which includes the largest criminal and civil penalties ever imposed in the Western District of New York, makes it clear that dishonest corporate entities are not immune from bearing substantial consequences arising from their deliberate efforts to cheat the American public.”); • See Plea Agreement at ¶ 2 (R. 287) (stating that “The parties understand that the government’s allegations and investigation have focused solely on the transportation and shipment of freight within the continental United States (CONUS) by National Air Cargo, Inc., ….”); • See Transcript of Plea Proceeding at p. 43 (R. 236) (in which the Court emphasized “The caveat or the limitation here on behalf of the Government is that the parties set forth an understanding that the Government’s allegations and investigation have focused solely on the transportation and shipment of freight within the United States …, and not any other related activity, so outside the territorial United States is not within the ambit of this plea agreement as it included the investigation.”); • See Transcript of Plea Proceeding at p. 63 (R. 256) (in which the United States Attorney states investigation and the federal criminal offenses shown in the documents relate to NAC deliveries “within the continental United States” and that “the investigation did not cover outside the United States.”) (emphasis added); • See also Transcript of Plea Proceeding at pp. 43-44 (R. 236-237) (in which NAC’s “National Counsel,” Mr. Peters, acknowledged that while investigation could have included Company activities abroad, he wanted “make sure that everybody understood that the Government has not spent its focus on outside U.S. activities.”) 17 “According to court papers, the company repeatedly overcharged the Defense Department for military shipments within the United States from early 1999 until April 2005.” (R. 24 at ¶ 19D). • See Plea Agreement at ¶¶ 1, 4(h), 7, 10, 19 and 20 (R. 286, 289, 290, 291, 292-293) (setting forth the fact that the acknowledged loss to the government as a result of NAC’s conduct was $4.4 million); • See Transcript of Plea Proceeding at pp. 46-51 (R. 239-244) (NAC agrees in open court that the loss to the government as a result of its conduct is $4,400,000); • See Transcript of Plea Proceeding at pp. 50-51 (R. 243-244) (F. Whitten Peters, NAC’s “National Counsel” to Judge Skretny during plea proceeding: “We agree that the 4.4 [million dollars] is the loss to the victim, Your Honor ….”); • See Plea Agreement at ¶ 2 (R. 287) (stating that “The guilty plea entered pursuant to this Agreement is in satisfaction of (a) any and all federal offenses committed for the period between January 1999 to and including April 2005…”) (emphasis added); • See Plea Agreement at ¶ 29 (R. 297) (“The government agrees that neither the defendant National Air Cargo, Inc., its affiliated companies nor its present or former owners, directors, officers or employees will be prosecuted … for (a) any federal criminal offenses committed for the period between January 1999 to and including April 2005 based upon facts set forth in ¶ 4 related to its and their conduct within the continental United States.”) (emphasis added); • See Verified Complaint for Forfeiture at ¶¶ 3-6 (R. 176-179) (setting forth the allegation that NAC, through the illegal act of wire fraud, received over a period of years over $17 million in payments from the federal government, that of that amount, “it is alleged $13,870,000 was received by NAC in connection to false statements relating to the services that NAC provided” and that such false statements resulted in net proceeds to the Company of nearly $7.5 million); • See also Transcript of March 6, 2008 hearing at pp. 34-35 (R. 356-357) (in which the United States Attorney states that this is a case involving “in very simplistic terms, overbilling of the government” and that “the agreed-upon loss to the government that is agreed by us, agreed by National 18 Air Cargo, and agreed by the agencies involved in 4.4 million. And that’s - that amount will recompense the government for the subset of overcharges that we felt were part of the criminal conduct.”). (Emphasis added); “Millions of dollars in inflated bills were submitted to the government.” (R. 24 at ¶ 19E.) • See Verified Complaint for Forfeiture at ¶¶ 3-6 (R. 176-179) (setting forth the allegation that NAC, through the illegal act of wire fraud, received for the period of January 1, 1999 through March 29, 2002 over $17 million in payments from the federal government, that of that amount, “it is alleged $13,870,000 was received by NAC in connection to false statements relating to the services that NAC provided” and that such false statements resulted in net proceeds to the Company of nearly $7.5 million); • and see generally, discussion, supra. “The total dollar amount of the thefts, and the total amount of business National Air Cargo does with the government was not disclosed.” (R. 24 at ¶ 19F.) • See discussion, supra, and see Webster’s Third New International Dictionary, Vol.III (1981) at p. 2369 which defines “theft” as “the taking of property unlawfully (as by robbery, embezzlement, fraud…)” “Company officials said the illegal activity only involved a small portion of its business, and the government claimed that the company stopped cheating the government in 2005.” (R. 24 at ¶ 19G.) • See NAC Statement of October 25, 2007 (R. 531) (wherein NAC’s counsel at the conclusion of the Plea Proceeding issued a statement indicating that the Company was “pleased” to have resolved “a legal matter related to events that occurred within a small segment of our business years ago”); • See Verified Complaint for Forfeiture at ¶¶ 3-6 (R. 176-179) (setting forth the allegation that NAC, received for the period of January 1, 1999 through March 29, 2002 over $17 million in payments from the federal government, that of that amount, “it is alleged $13,870,000 was received by NAC in connection to false statements relating to the services that NAC provided” and that such false statements resulted in net proceeds to the Company of nearly $7.5 million); 19 • See also Plea Agreement at ¶ 29 (R. 297) (“The government agrees that neither the defendant National Air Cargo, Inc., its affiliated companies nor its present or former owners, directors, officers or employees will be prosecuted … for (a) any federal criminal offenses committed for the period between January 1999 to and including April 2005 based upon facts set forth in ¶ 4 related to its and their conduct within the continental United States.”); “The plea deal calls for National Air Cargo to pay a $7.37 million fine for violations of the False Claims Act, $13.2 million in other fines and restitution and $7.42 million in forfeitures to the government.” (R. 24 at ¶ H.) • See Plea Agreement at ¶¶ 1, 31, 34-35, 39 (R. 286, 298-301) (whereby NAC agreed to pay $13.2 million in restitution and penalties on the felony count, $7.371 million on the False Claims Act claims and $7.429 million on the forfeiture claim); • See October 25, 2007 Department of Justice Press Release (R. 435) (in which government representatives stated that plea deal included an agreement by the Company “to pay restitution to the United States in the amount of $4.4 million,” a “criminal penalty fine of $8.8 million,” and an agreement to “settle a related civil forfeiture claim with a payment of $7.429 million as well as an additional $7.371 million in settlement of a related civil qui tam action.” • See also Transcript of Plea Proceeding at pp. 66-69 (R. 259-262) (whereby NAC agreed to pay $13.2 million in restitution and penalties on the felony count, $7.371 million on the False Claims Act claims and $7.429 million on the forfeiture claim). In the pre-2008 judicial and criminal documents and materials available to The News, neither NAC nor plaintiff publicly professed their innocence nor did they publicly take the position that the guilty plea or the agreed loss calculation and attendant restitution were “without prejudice” or otherwise contrary-to-fact. Indeed, on being contacted by Mr. Herbeck for a comment on the Plea Agreement and Plea Proceeding, NAC through its counsel did not profess innocence, but rather merely issued the following statement: We are pleased that we have agreed to resolve a legal matter related to events that occurred within a small segment of our business years ago. National Air Cargo is 20 committed to complying with all ethical requirements, rules and regulations and does not and will not tolerate any form of misconduct. National Air Cargo’s highest priority continues to be providing superior freight movement services to our customers, including mission critical supplies and material for our men and women in the armed forces fighting in the Middle East. Resolving these issues in court would have meant a potential suspension of all of our government shipments pending resolution. We cannot let a prolonged legal battle interfere with our ability to serve our customers or threaten the livelihood of our many valuable employees. R. 531 (emphasis added). It was not until months after The News’ initial (i.e., 2007) reports concerning NAC’s plea that plaintiff (through his attorneys who provided written responses to The News’ inquiries (R. 532-541)), despite the clear language of the Plea Agreement and NAC’s counsel’s own words at the Plea Proceeding, publicly began to suggest a different spin, articulating to The News the position that neither he nor his Company really did anything wrong. When this happened, The News fairly, promptly and prominently reported plaintiff’s denial of wrongdoing and even included it in the sub-headline of the March 2, 2008 Article: “Orchard Park firm to pay $28 million in fines and restitution, as owner avoids jail time, insists he did nothing wrong.” R. 448 (emphasis added). In response to the above evidence, which demonstrates conclusively that The News’ reporting was “fair and true” for purposes of the § 74 analysis, plaintiff on this appeal relies heavily on proceedings held, positions taken and materials created or released after the publication of the March 5, 2008 Article (the last article on which The News was sued). See, e.g., Plaintiff’s Brief at pp. 16-19, 31-33, 35-36, 38- 39, 42 (referring to positions taken in or made during: (1) the March 6, 2008 hearing before Judge Skretny; (2) the March 12, 2008 Qui Tam (False Claims Act) Settlement Agreement (which was not filed until March 26, 2008 (see R. 143 at fn. 21); and (3) materials related to the now-vacated 2009 debarment decision and proceedings in the United States District Court for the District of Columbia). While these materials plainly should not be considered in the context of the § 74 analysis of the Articles and Editorial (each of which were published before the above-referenced materials), the following should be noted, particularly with regard to plaintiff’s presentation of the so-called ‘facts’ concerning the debarment proceedings. 21 The debarment proceedings began in May 2008, when “the Air Force proposed the debarment of [NAC, Mr. Alf and others] from government contracting ….” See generally July 30, 2008 Memorandum in Support of the Debarments of Christopher J. Alf, et al., R, 495-501; see also May 21, 2008 Memorandum in Support of the Proposed Debarments [of NAC, Mr. Alf and others], R. 472-476. By the District of Columbia’s October 29, 2009 District Court decision (the “Urbina Decision, R. 634-650), Mr. Alf initially succeeded in challenging his personal debarment on procedural grounds involving the methodology used by a hearing officer. As it had with the prior proceedings before Judge Skretny, The News fairly and accurately reported this development. R. 469-470. Whether Mr. Alf’s successful preliminary challenge to his debarment (the determination was made in an injunction-request posture) was merely a temporary procedural success or ultimately would have succeeded on the merits or on a more complete evidentiary presentation by the agency remains, however, a matter of speculation. What is clear, however, is that the federal government’s settlement with Mr. Alf subsequent to the October 2009 Urbina Decision did not reflect a diminishment of the Justice Department’s conviction that Mr. Alf was personally a perpetrator of NAC’s criminally guilty conduct in dishonestly dealing with the Defense Department; nor did it reflect a change in its belief that he deserved debarment. Indeed, in the Government’s Brief in Support of Renewed Motion to Vacate [the Urbina Decision], filed July 14, 2010 (the “Government’s Brief”) (R. 512-528), the government reiterated its contentions against Mr. Alf, including its belief that procedural irregularities frustrated its opposition to Mr. Alf’s challenge of his debarment and that: Had full briefing been permitted by the Court it would have demonstrated that late deliveries [by NAC] occurred frequently and were not excused, and that there was evidence in the record showing plaintiff’s [Mr. Alf’s] knowledge of or participation in the company’s misconduct. Governments Brief at p. 2 (R. 513). Moreover, in a section of the Government’s Brief entitled “Plaintiff’s [Mr. Alf’s] Knowledge of and/or Involvement in the Misconduct [of NAC],” the Justice Department reasserted its case against Mr. Alf: 22 It is not the Government’s intention to sling arrows at Plaintiff after a settlement agreement has been reached. However, the Court found it likely that the Government imputed NAC’s misconduct to Plaintiff solely because he was its CEO. The government respectfully points out that, with the opportunity for full briefing, it would have addressed the following record citations that support Plaintiff’s knowledge of or participation in the misconduct. See e.g. AR000216, 217, 219, 222, 224, 265, 765, 1357, 1385, 1392, 1518-1525, 1544. Again, because the parties have reached settlement, the Government does not characterize the record citations or malign Plaintiff and notes that the Air Force has entered into an administrative agreement with NAC that placed the company under heightened ethics and compliance monitoring but removed all restrictions upon Plaintiff’s involvement with NAC. Instead, the Government offers these citations to meet the Court’s request of explaining why the Government believes vacature is appropriate. Government’s Brief at p. 16 (R. 527). The Justice Department went on to conclude in its Brief that the Urbina Decision was so flawed and misguided that the Government believed “… that the current Order should not have precedential value or serve as a citation that would support the arguments made in Plaintiff’s filings before this Court.” Id. at p. 17. On December 13, 2010, on a joint request by both the government and the plaintiff, Judge Urbina formally vacated his own prior injunction enjoining Mr. Alf’s debarment. R. 529-530. ARGUMENT I. CONTRARY TO PLAINTIFF’S ARGUMENT, SUMMARY JUDGMENT IN FAVOR OF THE PRESS IS THE RULE, NOT THE EXCEPTION, IN DEFAMATION CASES. New York’s Constitutional, judicial and legislative vigilance and sensitivity to preserving a free press has fostered the New York policy of favoring summary judgment for media defendants in defamation actions as a means of protecting the media’s role in facilitating the “free and uninhibited debate of matters of public concern” without fear of protracted and expensive litigation. See Greenberg v. CBS, Inc., 69 A.D.2d 693, 700, 419 N.Y.S.2d 988 (2d Dep’t 1979). Indeed, so strong are the protections afforded the media that New York courts have proclaimed that “[s]ummary judgment is the rule, not the exception in defamation cases.” Holy Spirit Association v. Harper & Row Publishers, Inc., 101 Misc.2d 30, 34, 420 N.Y.S.2d 56, 59 (Sup. Ct. New York Co. 1979); Ithaca College v. Yale Daily News Publishing Co., Inc., 105 Misc.2d 793, 433 N.Y.S.2d 530 (Sup.Ct. Tompkins Co. 1980), aff’d, 85 A.D.2d 817, 445 N.Y.S.2d 621 (3rd Dep’t 1981); Khan v. New York Times 23 Co., 269 A.D.2d 74, 77, 710 N.Y.S.2d 41, 44 (1st Dep’t 2000), citing Freeman v. Johnston, 84 N.Y.2d 52, 614 N.Y.S.2d 377 (1994), cert. denied, 513 U.S. 1016, 115 S.Ct. 576, 130 L.Ed.2d 492 (1994), and Immuno AG. v. Moor-Jankowski, 77 N.Y.2d 235, 256, 566 N.Y.S.2d 906, 918 (1991), cert. denied, 500 U.S. 954, 111 S.Ct. 2261, 114 L.Ed.2d 713 (1991) (stating that “[c]ontrary to plaintiff-respondent’s argument that the usual summary judgment rules are applicable, summary judgment is particularly favored by New York courts in libel cases.”); Karaduman v. Newsday, Inc., 51 N.Y.2d 531, 545, 435 N.Y.S.2d 556, 563 (1980), rearg. denied, 52 N.Y.2d 899, 437 N.Y.S.2d 1030 (1981) (quoting Washington Post Co. v. Keogh, 365 F.2d 965, 968 (D.C. Cir. 1966), cert. denied, 385 U.S. 1011, 87 S.Ct. 708, 17 L.Ed.2d 548 (1967) (“[i]n the First Amendment area, summary procedures are even more essential. For the stake here, if harassment succeeds, is free debate ... .); Ortiz v. Valdescastilla, 102 A.D.2d 513, 478 N.Y.S.2d 895 (1st Dep’t 1984); and DeLuca v. New York News, Inc., 109 Misc.2d 341, 438 N.Y.S.2d 199 (Sup. Ct. New York Co. 1981). Moreover, the Court of Appeals has even directed that because of the chilling effect litigation has on First Amendment freedoms, the Court must err, if at all, on the side of free speech when the question is close. Rinaldi v. Holt, Rinehart & Winston, Inc., 42 N.Y.2d 369, 385, 397 N.Y.S.2d 943, 953 (1977), rearg. denied, 42 N.Y.2d 1015, 398 N.Y.S.2d 1033 (1977), cert. denied, 434 U.S. 969, 98 S.Ct. 514, 54 L.Ed.2d 456 (1977); see also, Gurda v. Orange County Publications Div. of Ottaway Newspapers, Inc., 81 A.D.2d 120, 133, 439 N.Y.S.2d 417, 425 (2d Dep’t 1981) (Mollen, P.J. and Titone, J., concurring in part and dissenting in part), rev’d on concurring and dissenting opinion below, 56 N.Y.2d 705, 451 N.Y.S.2d 724 (1982), citing Hotchner v. Castillo-Puche, 551 F.2d 910, 913 (2d Cir. 1977), cert. denied, 434 U.S. 834, 98 S.Ct. 120, 54 L.Ed.2d 95 (1977) (“in areas of doubt and conflicting considerations, it is almost always preferable to err on the side of free expression”); Guitar v. Westinghouse Electric Corp., 396 F.Supp. 1042, 1053 (S.D.N.Y. 1975), aff’d, 538 F.2d 309 (2d Cir. 1976). In this case there is no doubt: when comparing the factual statements in the Articles and Editorial to the records of the official proceedings, it is clear The Buffalo News’ reporting was “fair and true,” and 24 many of the statements were either non-actionable opinion, were not “of and concerning” the plaintiff, or were otherwise non-actionable. The Trial Court properly granted summary judgment. II. THE TRIAL COURT WAS CORRECT IN ITS DETERMINATION THAT THE PUBLICATIONS ARE ABSOLUTELY PRIVILEGED REPORTS OF OFFICIAL PROCEEDINGS UNDER CIVIL RIGHTS LAW § 74. Plaintiff challenges the Trial Court’s conclusion that The News’ reports were indeed privileged, arguing that Justice Whalen erred in: (1) finding the reports to be “accurate enough” under § 74; and (2) holding that the media should not be held to a strict standard regarding the use of legal terms of art. See generally Plaintiff’s Brief at Points I and II. As demonstrated below, plaintiff’s arguments are unpersuasive for several reasons. First, when making the “fair and true” determination (which is a question of law for the court - see Argument at Point II.A., infra), New York law accords newspaper reports of judicial and official proceedings a wide “degree of liberality.” See Argument at Point II. C., infra. Indeed, the statutory privilege allows the media to report on the official proceedings in its own words and, although not an issue in this case, is even broad enough to encompass errors and omissions. See Argument at Point II. D., infra. Second, the case law is well settled: newspapers “cannot be held to a standard of strict accountability for use of legal terms of art in a way that is not precisely or technically correct by every possible definition.” See Gurda, supra, 81 A.D.2d at 133, 439 N.Y.S.2d at 424-425; see also Argument at Point II. C., infra. Third, and perhaps most significantly for purposes of this case, a comparison of the statements with the official proceedings documents and transcripts establishes the reports, in fact and law, are “fair and true” within § 74. See Counterstatement of Facts, supra, at pp. 13-19, and the attached Schedule. A. The Statutory Absolute Privilege: A Question of Law for the Court. Section 74 is based on the theory that the publisher acts as the agent of the public, reporting “that which others could hear for themselves were they to attend the proceedings.” Hogan v. Herald Co., 84 A.D.2d 470, 477-478, 446 N.Y.S.2d 836, 841 (4th Dep’t 1982), aff’d, 58 N.Y.2d 630, 458 N.Y.S.2d 538 25 (1982). Whether a newspaper article is a “fair and true” report of an official or judicial proceeding is a question of law for the court. See, e.g., George v. Time, Inc., 259 A.D. 324, 19 N.Y.S.2d 385 (1st Dep’t 1940), aff’d, 287 N.Y. 742 (1942); Idema v. Wager, 120 F. Supp.2d 361 (S.D.N.Y. 2000), aff’d, 29 Fed. Appx. 676 (2d Cir. 2002); Karp v. Hill & Knowlton, Inc., 631 F. Supp. 360, 363 (S.D.N.Y. 1986); Easton v. Public Citizens, Inc., 1991 U.S. Dist. LEXIS 18690 at 3 (S.D.N.Y. 1991), aff’d, 969 F.2d 1043 (2d Cir. 1992). In the present case, everything that happened in court regarding NAC is in the Record. It is therefore a simple matter -- and plaintiff does not suggest otherwise, see Plaintiff’s Brief at p. 45 -- for this Court to compare The News’ published reports with this public record to ascertain the correctness of the reporting. It should sustain the Trial Court’s conclusion that the fair report privilege applies. B. The Courts Apply a Liberal Standard in Making the “Fair and True” Determination, and the Trial Court was Correct in Holding that the Media Should not be Held to a Strict Standard in the Use of Legal Terms of Art. When one compares the challenged statements with the source documents and transcripts of the official proceedings (see Finnerty Affidavit (R. 107-163) and its Exhibits (R. 173-471) and the related Schedule visualizing this comparison; see also the analysis of the October 26, 2007 Article (Counterstatement of Facts at pp. 13-19, supra)), it is clear they are accurate and privileged. New York law accords newspaper reports of judicial and official proceedings a wide “degree of liberality” when courts consider the “fair and true” determination. See, e.g., Becher v. Troy Publishing Company, Inc.,183 A.D.2d. 230, 234, 589 N.Y.S.2d. 644, 646 (3d Dep’t 1992) (“The case law has established a liberal interpretation of the ‘fair and true report’ standard of Civil Rights Law § 74 so as to provide broad protection to news accounts of judicial or other official proceedings.”); accord, Cholowsky v. Civiletti, 69 A.D.3d 110, 114, 887 N.Y.S.2d 592, 595 (2d Dep’t 2009). Accordingly and as stated by the Court of Appeals: [T]he language used [in the publication] should not be dissected and analyzed with a lexicographer’s precision. This is so because a newspaper article is, by its very nature, a condensed report of events which must, of necessity, reflect to some degree the subjective viewpoint of its author. 26 Holy Spirit Ass’n for Unification of World Christianity, supra, 49 N.Y.2d at 68, 424 N.Y.S.2d at 168. See also, Decision and Order at p. 10 (R. 15), citing the Holy Spirit decision; accord, Tenney v. Press-Republican, 2010 N.Y. Slip. Op. 6123, 2010 N.Y. App. Div. LEXIS 6214, 75 A.D.3d 868, 905 N.Y.S.2d 356 (3d Dep’t 2010); Millennium of Rochester, Inc. v. Town of Webster, 305 A.D.2d 1014, 758 N.Y.S.2d 582 (4th Dep’t 2003); Freeze Right Refrigeration & Air Conditioning Serv., Inc. v. City of New York, 101 A.D.2d 175, 183, 475 N.Y.S.2d 383, 389 (1st Dep’t 1984). This is consistent with the common law of libel, which “overlooks minor inaccuracies and concentrates upon substantial truth.” Shulman v. Hunderfund, 12 N.Y.3d 143, 150, 878 N.Y.S.2d 230 (2009), quoting Masson v. New York Magazine, Inc., 501 U.S. 496, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991). Like the defense of truth generally, all that is necessary for the privilege to attach is that the article be “substantially accurate.” Holy Spirit Ass’n, 49 N.Y.2d at 67, 424 N.Y.S.2d at 167 (“[f]or a report to be characterized as ‘fair and true’ within the meaning of the statute, thus immunizing its publisher from a civil suit sounding in libel, it is enough that the substance of the article be substantially accurate.”). See also, McDonald v. East Hampton Star, supra, 10 A.D.3d 639, 640, 781 N.Y.S.2d 694, 695 (2d Dep’t 2004) (“it is enough that the substance of the article be substantially accurate; a fair and true report admits of some liberality, the exact words of every proceeding need not be given if the substance is substantially stated”); Misek-Falkoff v. American Lawyer Media, Inc., 300 A.D.2d 215, 752 N.Y.S.2d 647 (1st Dep’t 2002), leave to appeal denied, 100 N.Y.2d 508, 764 N.Y.S.2d 385 (2003), reargument denied, 100 N.Y.2d 616, 767 N.Y.S.2d 398 (2003), cert. denied, 541 U.S. 939, 124 S.Ct. 1693, 158 L.Ed.2d 360 (2004). The facts and holding of Gurda, supra, are instructive on the breadth of the privilege. The newspaper reported on a civil lawsuit against the Gurdas (an attorney and his son), in which an insurance company had successfully set aside certain transfers of real property as “fraudulent conveyances” within the meaning of Debtor and Creditor law. The front page of the newspaper included an above-the- masthead headline reading “Judge: Gurdas, builder defrauded firm” referring the reader to the article within the paper. The article itself appeared under the headline “Gurdas, builder fined in fraud case,” and 27 reported that the Gurdas and a contractor were found by the court to have “defrauded” the insurance company. The article also included a quote from the insurance company’s attorney that the Gurdas were “guilty of intentional fraud.” The plaintiffs argued that the terms “fraud” and “defraud,” coupled with the reporter’s description of the award of attorneys’ fees as a “fine,” wrongfully implied they were engaged in, charged with, and found guilty of criminal conduct. The trial court granted defendants’ motion for summary judgment, but the Appellate Division majority reversed, stating the article crossed the “fine line” between being true and fair and meaningfully false and unfair; that “the terms ‘fraud’ and ‘defraud’ can connote criminal activity;” and that “a jury could well find that the ordinary meaning of the terms ‘fraud’ and ‘defraud’ is the criminal one.” 81 A.D.2d at 124, 439 N.Y.S.2d at 419-420. In their lengthy and well-reasoned opinion, the dissenting Appellate Division justices argued that “the plaintiffs’ actions against the Times Herald Record and its publisher are inconsistent with the guarantees of the First Amendment and with the letter and spirit of section 74 of the Civil Rights Law.” 81 A.D.2d at 126, 439 N.Y.S.2d at 421. Citing the Holy Spirit decision, supra, the dissent concluded: [Newspaper] accounts of legislative or other official proceedings must be accorded some degree of liberality. When determining whether an article constitutes a ‘fair and true’ report, the language used therein should not be dissected and analyzed with a lexicographer’s precision. This is so because a newspaper article is, by its very nature, a condensed report of events which must, of necessity, reflect to some degree the subjective viewpoint of its author. Nor should a fair report which is not misleading, composed and phrased in good faith under the exigencies of a publication deadline, be thereafter parsed and dissected on the basis of precise denotative meanings which may literally, although not contextually, be ascribed to the words used. Freedom of expression must have breathing space to survive. Newspapers cannot be held to a standard of strict accountability for use of legal terms of art in a way that is not precisely or technically correct by every possible definition. Were it otherwise, the narrow and confining application of the libel laws would entirely defeat the purposes of the First Amendment and statutes like section 74 of the Civil Rights Law, and the public’s right to know would be seriously threatened. Hence, in areas of doubt and conflicting considerations, it is almost always preferable to err on the side of free expression. Compelling the corporate defendants here to stand plenary trial for libel would, in our view, do violence to these fundamental principles. We therefore conclude that all the defendants were entitled to summary judgment dismissing the complaints and, accordingly, we would affirm the judgments appealed from in all respects. 28 Id. at 133, 439 N.Y.S.2d at 424-425 (citations omitted). On further appeal, the Court of Appeals unanimously rejected the restrictive approach of the Second Department majority, instead adopting in its entirety the dissenting opinion and reinstating the trial court’s award of summary judgment to the media defendants. 56 N.Y.2d 705, 708, 451 N.Y.S.2d 724 (1982). In the instant case, Mr. Alf’s company, NAC, was charged with and pleaded guilty to feloniously submitting a false billing; in its formal Plea Agreement and in courtroom appearances it admitted -- for purposes of quantifying the monetary criminal penalties to be imposed in lieu of possible jail time (see R. 223) -- that its conduct effected a multi-million dollar loss on the government during a time of war. Moreover, pursuant to ¶ 15 of the Plea Agreement and applicable federal policy, this agreed resolution constituted not only an “admission of involvement in the offense,” but also an admission of involvement in “related conduct.” See Federal Sentencing Guidelines § 8C2.5(g) and Application Note 14; and see in- court comments of Ms. Wylegala regarding “related conduct,” Argument at Point III.B.iii, infra. The newspaper printed exactly this, distinguishing the guilty plea from the related quantification admissions; and when the plaintiff finally through representatives spoke publicly to assert his personal innocence (which the government then and to this day disputes), the paper printed this too in its headlines and within its articles. This case accordingly presents a textbook example of “fair and true” real-time reporting. Becher v. Troy Publishing Company, Inc., supra, is equally instructive. Under headlines referring to the “Bribery Case,” the “Bribery Case Defendants,” or the “Bribery Trial,” the newspaper published several reports about a rape investigation in which the accused’s attorneys paid the victim to falsely recant her accusation. The plaintiff (one of the attorneys involved) claimed the headlines libeled him by reporting he had been indicted on felony bribery charges, when in fact he had been charged only with two misdemeanors related to making a false statement. 183 A.D.2d at 233, 589 N.Y.S.2d at 646. The media defendants moved for summary judgment. The trial court denied the § 74 motion as premature, holding that the “plaintiff was entitled to develop additional evidence through further discovery.” Id. The Appellate Division reversed, holding that plaintiff’s claims were barred under § 74. Specifically, the Court found that the body of each article correctly stated the specific charges against the 29 plaintiff. 183 A.D.2d at 236, 589 N.Y.S.2d at 648. (Compare with the facts of this case, in which The News also correctly reported both that the Company pleaded guilty to a single count of making a false statement and discussed the broader conduct recited in the Plea Agreement and in Court which had inflicted a multi-million dollar loss on the military and was a basis (along with the civil actions that also specified repeated transactional misconduct) of the plea and the historic criminal penalties and civil forfeitures and settlements imposed.) Moreover, the Court found that the use of “bribery” in the headlines was within the ambit of characterization afforded by the privilege because bribery or bribery-related offenses were clearly at issue in the case. Id. (Again, compare with the instant case: the newspaper’s headline reported that the Company admitted cheating the military: clearly, fraud and fraud related offenses were at issue in the case and, indeed, NAC admitted that it did defraud the government.) Thus, the Court concluded, “each of the complained-of pieces constituted either ‘a fair and true report of [a] judicial proceeding’ or a ‘heading of [a] report which is a fair and true headnote of the statement published’.” 183 A.D.2d at 233, 589 N.Y.S.2d at 646. Indeed, the newspaper’s reporting in Becher was held to be privileged even though there was a manifest error: one of the articles had erroneously mischaracterized the indictment as accusing “two Troy attorneys and four others … of bribing a reported rape victim.” 183 A.D.2d at 236, 589 N.Y.S.2d at 648. This error, however, did not change the outcome because of the liberal applicability of the § 74 privilege: The presence of such a misstatement in an article does not necessarily mean, however, that there is a triable issue of fact as to whether the article was false and unfair. The article as a whole may nevertheless be substantially accurate so as to qualify as a fair and true report. In each of the articles herein, at the point when plaintiff was specifically named as one of the defendants, the charges against him were accurately described and the defendants who were actually charged with the more serious bribery offenses were accurately and specifically identified. At most, therefore, the misstatements may have created some ambiguity in the mind of a reader, which would have been satisfactorily resolved for purposes of Civil Rights Law § 74 upon reading the full article where the charges against each named defendant, including plaintiff, were accurately treated in detail. 183 A.D.2d at 236-237, 589 N.Y.S.2d at 648. Again, compare the present case: there was no error of substance in The Buffalo News reports; they accurately identified the criminal charge, the criminal action, and the guilty plea to a one-count 30 criminal information; they were precise in delineating the elements of the fines, penalties and forfeitures as articulated both in the Plea Agreement and as glossed in open court; readers of each article and opinion in its entirety and in the context of the ongoing coverage would have been provided a coalescence of elements that yielded a fair and accurate portrayal of the official proceedings. Indeed and contrary to plaintiff’s claim that the articles attributed to him criminal liability he never admitted and was not charged with, a theme of the coverage and editorializing was precisely the opposite: that plaintiff had not been charged personally even though he owned and controlled the Company. Thus, this is a far more compelling case for the application of § 74 than was Becher. Geiger v. Town of Greece and Gannett Company, Inc., et al., 2007 U.S. Dist. LEXIS 87466 (W.D.N.Y. 2007), reargument and reconsideration denied, 2007 U.S. Dist. LEXIS 87464 (W.D.N.Y. 2007), aff’d, 2009 U.S. App. LEXIS 3358 (2d Cir. 2009), is particularly useful on this motion because for all intents and purposes it is factually “on all fours” with the present case. In Geiger, a citizen complained to the Town that plaintiff had overcharged for towing services. On investigation, the Town concluded plaintiff overcharged the citizen. It referred the matter to the New York Attorney General who concluded that plaintiff overcharged scores of consumers. The Town removed Plaintiff from its list of approved tow truck operators. (Compare with the facts of the instant case: a whistle-blower complained to authorities that NAC had overcharged the government for freight services; the government investigated and concluded the Company had do so on many occasions and debarred plaintiff personally from doing business with the government.) Subsequently, the Attorney General and plaintiff entered a settlement agreement that included “findings” of the Attorney General that “Respondent failed to charge consumers the towing fees established by the Towing Agreements for towing calls during the Relevant Time Period,” that “Respondent charged consumers a fee in excess of the fees established in the Towing Agreements” and that “[i]n addition to charging towing fees in excess of the fees established in the Towing Agreements, Respondent repeatedly charged consumers additional ‘clean up’ and ‘labor and waiting’ fees which he was not authorized to charge under the terms of the Towing Agreements.” 2007 U.S. Dist. LEXIS 87464 31 at *3. Under the agreement, the plaintiff paid thousands of dollars in restitution to eligible consumers as well as additional thousands in penalties. (Again, compare with the facts of the instant case: a settlement agreement terminating a case in which the government alleged a pattern of fraudulent conduct; the Company agreed to pay millions of dollars in restitution, plus additional millions in penalties, calculated on the basis of thousands of improper transactions with an agreed multi-million dollar value.) Mr. Geiger signed the settlement agreement on December 5, 2006. On February 5, 2007, the Attorney General issued a press release: Attorney General Andrew M. Cuomo today announced a settlement with a towing service operator in Monroe County that will provide refunds to consumers who were overcharged. The settlement requires Frederick G. Geiger, owner of Geiger Towing Service in the Town of Greece, to pay a total of $6,336.70 in refunds to 126 consumers who were overcharged for towing services provided by Geiger. Additional refunds will be made to consumers who file legitimate requests with the Attorney General’s office by March 5, 2007. Geiger also agreed to pay penalties and costs totaling $4,000. From April 2003 through August 2005, the Town of Greece contracted with Geiger to provide towing services on behalf of the town police department in instances where motorists’ vehicles were abandoned, disabled, or in need of towing due to an accident or arrest. The towing agreements required Geiger to charge towing fees pursuant to a negotiated fee schedule. Despite the agreements, Geiger repeatedly charged motorists towing fees that exceeded the maximum amount permitted. In some cases, unauthorized additional fees identified as clean up, labor, and waiting were charged as well. 2007 U.S. Dist. LEXIS 87466 at *7; 2007 U.S. Dist. LEXIS 87464 at *5-6. The next day, February 6, 2007, The Rochester Democrat and Chronicle published a report, “Towing service to repay charges,” which stated: Under a settlement reached Monday with the state Attorney General’s Office, a Greece towing service operator who routinely ripped off his customers must repay more than $6,000 to the people he overcharged. The Attorney General’s Office said Frederick G. Geiger, owner of Geiger Towing Service, 330 North Greece Road, will also pay more than $4,000 in penalties and other costs. Geiger’s company provided towing service to the Greece Police Department between April 2003 and August 2005, when police discovered that he was charging motorists unauthorized fees to get their cars back. Under Geiger’s contract with the town, he was to charge a flat fee for towing, plus storage. However, he was charging additional fees for “cleanup, labor and waiting,” according to the Attorney General’s Office. 32 Geiger agreed to repay 126 people a total of $6,336.70 to settle the case. Additional refunds will be made to consumers who file legitimate requests with the Attorney General’s Office by March 5. 2007 U.S. Dist. LEXIS 87466 at *9-10; 2007 U.S. Dist. LEXIS 87464 at *6-7. In his defamation suit against The Democrat and Chronicle, Mr. Geiger claimed the article did not fairly and truly report what happened. 2007 U.S. Dist. LEXIS 87466 at *12; 2007 U.S. Dist. LEXIS 87464 at *7. Specifically, he argued the statements “impute more serious conduct than that which was stated in the press release,” the wrongdoing described in the settlement agreement was merely an “allegation,” and he had not admitted any wrongdoing. 2007 U.S. Dist. LEXIS 87466 at *17. Moreover, plaintiff argued, the article was not privileged because the Attorney General’s press release did not state that he had “ripped off his customers,” he did not admit to “ripping off his customers,” nor was there a determination that he had “ripped off his customers.” Indeed, it was plaintiff’s position that he “simply made an economic decision that it was better to settle than pay attorney fees and get involved in probably protracted litigation.” 2007 U.S. Dist. LEXIS 87466 at fn.4. (Compare again with plaintiff’s position in this case: Mr. Alf claims there was no gross misconduct, but rather a single $400.00 mistake by a low- level employee and that the remainder of the allegations against him and his Company were just that -- mere allegations -- and that neither he nor the Company ever admitted to any pattern of wrongdoing, nor was any ever proven. Additionally, and like Mr. Geiger, Mr. Alf also claims that the decision to settle the case was made purely for economic reasons.) The newspaper moved to dismiss Mr. Geiger’s defamation claim pursuant to § 74, arguing its article substantially mirrored the settlement agreement and the Attorney General’s press release. The Court agreed, dismissing the case prior to discovery. 2007 U.S. Dist. LEXIS 87466 at *16-19. In doing so, the Court rejected the plaintiff’s attempted after-the-fact revisionism (i.e., that there was no admission of guilt and the settlement was made purely for economic reasons), noting, among other things, that the settlement neither expressed Mr. Geiger’s profession of innocence nor that his agreement was not an admission of liability. (Compare again with the present matter: the Plea Agreement is equally devoid of 33 exculpatory or non-admission language; rather, it expressly admits felonious conduct; and during the Plea Proceeding NAC expressly again admitted that it had committed a crime, it acknowledged the multi-million dollar loss to the government, and it did not profess a reservation of innocence or non-liability. In this regard, while Mr. Alf makes reference to having “explicitly denied” any wrongdoing in an additional and separate agreement settling the False Claims Act complaint (see, e.g., Plaintiff’s Brief at pp. 12, 31-32, 34, 38), the Record establishes that this document (R. 616-633) was even not executed until March 12, 2008, a week after the March 5, 2008 publication of the last Article involved in this lawsuit. Plaintiff’s so-called ‘proof’ of vindication (see generally Plaintiff’s Brief at pp. 16-19, 32-33, 34) suffers from the same disingenuousness and infirmity: putting aside the fact that the referenced decision issued by the District Court of Columbia was, in fact, ultimately vacated (R. 529-530), the fact remains that this decision which lifted plaintiff’s debarment was not issued until October 29, 2009, a full 19 months after The Buffalo News’ March 5, 2008 Article. The Second Department reached a similar result in Cholowsky v. Civiletti, supra. The newspaper, The Times Review, published an article and editorial in December 2006 concerning the Department of Environmental Conservation’s 2004 permit for plaintiff to operate a sand mine and solid waste facility in Riverhead. 2007 N.Y. Slip Op. 51742U at *1, 69 A.D.3d at 111. The article reported that while plaintiff stated on his permit application that he had never been convicted of a crime involving fraud, bribery or an offense against public administration, he had in fact pleaded guilty in 1999 “to a felony count of conspiracy to defraud the United States and was sentenced to one year probation.” 2007 N.Y. Slip Op. 51742U at *2, 69 A.D.3d at 112. The article went on to report, among other things, that the plaintiff “admitted involvement in a bribery scheme to gain illegal access to the Brookhaven landfill” and that he “testified in 1999 that he paid bribes totaling $20,000” for the right to dump in another landfill. Id. The editorial stated plaintiff “testified in federal court that he bribed Brookhaven town officials to gain access to the landfill, where he dumped solid waste” and that “evidence gathered by federal investigators established that Provenzano [an individual involved in the alleged conspiracy] was using [the plaintiff’s] hauling permit to illegally dump hazardous waste at the Brookhaven landfill.” 2007 N.Y. Slip Op. 34 51742U at *2 - *3, 69 A.D.3d at 112. In preparing the article and editorial, the newspaper relied on public records of the criminal prosecution as well as prior reporting by Newsday. 2007 N.Y. Slip Op. 51742U at *3, 69 A.D.3d at 113. The plaintiff claimed he never engaged in bribery (rather, he said he was the victim of extortion by Brookhaven officials), never pled guilty to any “fraud” with regard to the United States or anyone else, and never dumped (or allowed anyone to use his permit to dump) any hazardous waste in the landfill. 2007 N.Y. Slip Op. 51742U at *3, 69 A.D.3d at 112-113. In lieu of answering the complaint, The Times Review moved to dismiss on the basis of § 74, arguing, among other things, that “public records which provided the defendants with plea transcripts, trial transcripts, docket reports and judgment transcripts … support every statement complained of, separately and independently of the Newsday articles.” 2007 N.Y. Slip Op. 51742U at *3. Comparing the statements in the reports to the record of the official proceedings and noting that the provisions of § 74 “are to be liberally applied” (2007 N.Y. Slip Op. 51742U at *5), the Court agreed that the reports were sufficiently fair and true to warrant dismissal: The transcript of the plaintiff’s plea shows that he pled guilty to the Class D felony of “Conspiracy to commit offense or to defraud United States” (18 U.S.C.S. § 371) and that the crime he conspired to commit was “Theft or bribery concerning programs receiving Federal funds.” (18 U.S.C.S. § 666). This alone provides a basis for stating that the plaintiff had pled guilty to a count of “conspiracy to defraud the United States” and that he pled guilty to “bribery.” It is true that a careful reading of the applicable sections of law and the supporting documents referred to above shows that the “conspiracy” was with regard to committing an offense against the United States rather than to defrauding the United States, although this section of law (18 U.S.C.S. § 371) includes both in its applicability, but it is within the realm of understanding that a lay person such as a reporter would look at the statute and not make this distinction. Indeed, “Newspapers cannot be held to a standard of strict accountability for use of legal terms of art in a way that is not precisely or technically correct by every possible definition.” And a careful reading of the section which comprised the offense which the plaintiff conspired to commit (18 U.S.C.S. § 666) only refers to two kinds of criminal acts; “theft or bribery.” Since the conduct was clearly not a “theft” that leaves only “bribery” as the applicable offense which, in this case, taking the plaintiff’s version as true, encompassed extortion payments rather than bribery payments. In any event, it was a reasonable interpretation - and perhaps the only reasonable interpretation in view of the language of this statute - to describe the plea as to “bribery” rather than “theft.” 35 In addition, at the plea proceeding, the judge presiding asked the Assistant United States Attorney in the presence of this plaintiff and his lawyer if the plea involved a “bribery charge” and a “general fraud charge” and the answer was, “yes.” And while it is true that the plaintiff’s lawyer made it clear to the court and the record that his client made payments as part of an extortion to be allowed the otherwise lawful access and use of the landfill rather than a bribery for the unlawful use of the landfill, the underlying sections which he pled guilty to as well as the colloquy referred to above provide a good faith basis for the statements complained of with regard to “bribery” and “defrauding the United States.” *** Moreover, a review of the public records relied upon by the defendants shows the following: The criminal Information to which this plaintiff pled guilty [c]ontains one count charging a conspiracy to “corruptly give and offer things of value” and lists four overt acts comprised of making payments to a Brookhaven official; and, the “Judgment” in the criminal case reflects the plea to a “Conspiracy to Make Corrupt Payments/A Class D Felony.” In short, based solely upon the criminal judicial proceedings and the relevant public records, there is support for statements as to “bribery” and defrauding the United States. 2007 N.Y. Slip Op. 51742U at *3 - *4 (citations omitted, emphasis added). Noting the historically “liberal interpretation” of the statute, the Second Department stressed that all that is required for the privilege to apply is “substantial” accuracy: “The case law has established a liberal interpretation of the ‘fair and true report’ standard of Civil Rights Law § 74 so as to provide broad protection to news accounts of judicial or other official proceedings.” “For a report to be characterized as ‘fair and true’ within the meaning of the statute, thus immunizing its publisher from a civil suit sounding in libel, it is enough that the substance of the article be substantially accurate.” “This is consistent with the common law of libel, which ‘overlooks minor inaccuracies and concentrates upon substantial truth.’” 69 A.D.3d at 114 (citations omitted). Consistent with the above authority, the Trial Court correctly dismissed the plaintiff’s claims. Counsel argues (see Plaintiff’s Brief at Point II, pp. 43-49) that Justice Whalen’s ruling creates an impractical and radical “subjective” standard of analysis for the § 74 inquiry that, if approved by this Court, would effectively stand the law of libel on its head. This argument is unsupportable. 36 First, the argument relies on findings of the Trial Court -- that the articles contain false reporting or are the result of inaccurate reliance on the official proceedings -- that are infirm. See Argument at Point III, infra. Second, it is counsel’s insistence on a hyper-technical, literal, ill-liberal application of the privilege that would stand the jurisprudence on its head. As the Court of Appeals has cautioned in language that should serve as a direct rebuke to plaintiff’s argument, “the language used should not be dissected and analyzed with a lexicographer’s precision.” Holy Spirit, 49 N.Y.2d at 68. News articles must not “…be thereafter parsed and dissected on the basis of precise denotative meanings which may literally, although not contextually, be ascribed to the words used.” Gurda, 81 A.D.2d at 133. Moreover, warned the Court: Newspapers cannot be held to a standard of strict accountability for use of legal terms of art in a way that is not precisely or technically correct by every possible definition. Were it otherwise, the narrow and confining application of the libel laws would entirely defeat the purposes of the First Amendment and statutes like section 74 of the Civil Rights Law, and the public’s right to know would be seriously threatened. Gurda, 81 A.D.2d at 133. In the final analysis, counsel ignores the artistry and nuance inherent in judging “fair and true” reports -- an analysis that always has accommodated and protected the individuality and, yes, subjectivity of news reporting. As expressly recognized by the Court of Appeals: “…a newspaper article…must, of necessity, reflect to some degree the subjective viewpoint of its author.” Holy Spirit, 49 N.Y.2d at 68. C. The Statutory Privilege Allows the Media to Report in its Own Words and, if the Overall Report “Fairly Characterizes” the Proceeding, Even Accommodates Instances of Error. Indeed, the manner in which New York jurisprudence consistently has applied the above principles demonstrates not only the expansive breadth of the privilege but the generous liberality of its application. 1. Simplification and Summarization: Use of Lay Parlance, Common Terms, Idiom and the Vulgate. In this spirit, the courts have affirmed the accepted media practice of using its own words and common lay parlance to capture the essence of often legally complex or technical official proceedings. 37 For example, in Muscarella v. Berkshire Hathaway, Inc., 278 A.D.2d 854, 721 N.Y.S.2d 432 (4th Dep’t 2000), leave to appeal denied, 96 N.Y.2d 716, 730 N.Y.S.2d 31 (2001), this Court applied the § 74 privilege to The News’ use of “tried to pocket” in describing the conduct of a public employee based on federal auditors’ findings that he had submitted vouchers to receive $3,050.00 in checks for house inspections he conducted, a practice the audit said was improper because the inspections were part of his salaried duties, even though the employee never cashed the checks. 278 A.D.2d at 854, 721 N.Y.S.2d at 433. In White v. Berkshire-Hathaway, Inc., 10 Misc.3d 254, 255, 802 N.Y.S.2d 910, 912 (Sup.Ct. Erie Co., 2005) (Hon. John P. Lane, J.S.C.), the court applied § 74 to insulate The Buffalo News article headlined “Unscrupulous operation gouges nursing home,” that reported, among other things, that a HUD audit of the plaintiff’s nursing home revealed that its owners and operators were “shrewd businessmen who paid themselves handsomely while contending there was not enough cash to improve the nursing home …” Similarly, in Easton, supra, the privilege applied to the publisher’s statement -- “that it is relatively easy to steal funds from public programs for people with serious mental illnesses” (1991 WL 280688 at 5) -- characterizing a Commission Report that read “the principals have reaped exorbitant profits through less-than arm’s length real estate transactions, potential Medicaid fraud, and questionable charitable deductions on income taxes.” Id. (Compare the instant case: a criminal investigation was conducted and a representative criminal charge was filed against Mr. Alf’s company, which admitted its guilt to the selected criminal charge of submitting a false statement to the government to obtain payment for a level of service it did not render; in the same plea instrument and in court it admitted that its conduct effected a multi-million dollar loss to the government. On the basis of Easton, the newspaper’s characterization that, among other things, the official proceedings contained an admission of cheating the nation out of millions of dollars is accurately descriptive of what happened in Court and is well within the privilege and the judicial precedents applying it.) See also Karp, supra, 631 F. Supp. 360 at 364. (“Thus, even when the term fraud is not part of the judicial record, the courts will permit its use if it fairly 38 characterizes some aspect of a [ ] proceeding.”); Gonzalez v. Gray, 69 F. Supp.2d 561 (S.D.N.Y. 1999), aff’d, 216 F.3d 1072 (2d Cir. 2000) (husband’s comment “he killed her,” regarding doctor who unsuccessfully treated his wife, held privileged); Lehman Brothers Commercial Corp. v. China International United Petroleum & Chemicals Co., Ltd., 1995 WL 608313 (S.D.N.Y. 1995) (statements that the defendant was “welshing” and “stiffing people” were privileged characterization of claim that defendant failed to honor contracts). The above decisions illustrate that an official or judicial proceeding need not be quoted verbatim for the report to be privileged. The compression or condensation -- and the lay expression of the logical and practical conclusions inherent in sculpted legal plea deals -- based on the facts, allegations, findings, admissions and resolutions of proceedings is inherent in newspaper publishing and is judicially accepted within the § 74 latitude. 2. Other Excusable Instances: Departures from Source Materials; Omissions; Even Outright Mistakes. Section 74 not only protects abbreviated reports and simplification of terms, it is sufficiently expansive to protect reports involving, for example, omissions, departures from source materials and even errors. Departures from Source Materials. For example, in Holy Spirit Ass’n, supra, the plaintiff claimed he was libeled by a series of New York Times articles stating he was connected to the Korean Central Intelligence Agency. The paper based the articles on three intelligence documents compiled and released by a Congressional investigative committee. 49 N.Y.2d at 65, 424 N.Y.S.2d at 166. The documents included disclosures by an allegedly unreliable informant and were labeled in the intelligence documents as “unevaluated,” but the Times reported that the information had been “confirmed and elaborated on” and was otherwise legitimate. Id. at 67, 424 N.Y.S.2d at 167. On summary judgment, the Court of Appeals held the articles were privileged, stating that while they may have ascribed “a sense of legitimacy which, in hindsight, could be characterized as imprudent given the unverified nature of the reports, this observation does not, in and of 39 itself, render the newspaper articles unfair.” Holy Spirit Ass’n, 49 N.Y.2d at 68, 424 N.Y.S.2d at 168. See also Ford v. Levinson, 90 A.D.2d 464, 454 N.Y.S.2d 846 (1st Dep’t 1982). Omissions. Many plaintiffs, like Mr. Alf in this case, have complained that media coverage did not tell the “whole story” (translate: did not tell their side of the story). This argument is also unavailing on the application of the statutory privilege. See Tenney, supra; Mills v. Raycom Media Inc, 34 A.D.3d 1352, 824 N.Y.S.2d 845 (4th Dep’t 2006), app’l denied, 37 A.D.3d 1209, 828 N.Y.S.2d 226 (4th Dep’t 2007), app’l denied, 8 N.Y.3d 815, 839 N.Y.S.2d 453 (2007); see also, e.g., Glendora v. Gannett Suburban Newspapers, 201 A.D.2d 620, 608 N.Y.S.2d 239 (2d Dep’t 1994), lv. to appeal denied, 83 N.Y.2d 757, 615 N.Y.S.2d 875 (1994) (newspaper article a fair and true report of a previous lawsuit between plaintiff and defendant, despite its omission of plaintiff’s side of decision and the fact that the plaintiff appealed); accord, Rubel v. The Daily News, supra, 2010 NY Slip Op. 32407U at *17, 2010 N.Y. Misc. LEXIS 4273 at **24-25 (Sup. Ct. New York Co. 2010) (holding that the plaintiff’s assertion that the article only provided one side of the story did not deprive the defendants of § 74 immunity). In the present case, plaintiff argues The News effectively misreported what happened in Court because it “entirely omitted any mention or discussion of relevant conduct …” Plaintiff’s Brief at p. 41. (In this regard, plaintiff’s arguments are schizophrenic: one the one hand, plaintiff claims that the newspaper’s failure to discuss “relevant conduct” removes the reports from the ambit of § 74 (Plaintiff’s Brief at pp. 41-42); on the other hand, he says the newspaper should have ignored the “relevant conduct” when reporting the official proceedings (see, e.g., Plaintiff’s Brief at pp. 29-31)). The fallacy of this argument, however, is that it pre-supposes that The News’ reporting relied exclusively on the concept of “relevant conduct.” As discussed below (see Argument at Point III), “relevant conduct” is not, as the plaintiff argued to the Trial Court, the sine qua non of the paper’s entitlement to the privilege. To the contrary, The News’ argument that the reports are privileged is based on a comparison of the reports with the entirety of official proceedings available to the reporter at the time of publication. The detailed analysis, see Argument at Point III. B. iii, infra, is merely “icing on the cake,” demonstrating that even a 40 technical parsing of the Plea Agreement, Federal Sentencing Guidelines and in-court colloquy regarding related and relevant conduct supports the conclusion that Mr. Herbeck’s coverage was accurate. Plaintiff also asserts that The News failed to report the purpose behind NAC’s guilty plea: that, despite the fact that NAC settled the government’s criminal and civil cases against NAC and him by admitting guilt and paying record fines, penalties and forfeitures, his Company was really innocent and that the alternative, he now claims, would have been to litigate forward to a phyrric victory -- phyrric because an interim debarment would have destroyed the Company before its ultimate vindication. See generally, Plaintiff’s Brief at p. 42. However, this after-the-fact revisionism is: (a) at odds with the record of the proceedings; (b) contrary to the sworn and formal admissions of NAC’s in-court witness and legal counsel; (c) was a position never articulated in Court; and (d) was a claim of innocence or assertion of non-liability never reserved in the Plea Agreement. See Finnerty Affidavit, fn. 21 (R. 143). Moreover, the NAC statement emailed directly to Mr. Herbeck on the day of the guilty plea (a portion of which was quoted in October 26, 2007 Article - see R. 35 and compare R. 531) acknowledged in that context multiple “events” had happened at the Company that informed its plea. R. 531. Outright Mistakes. Indeed, even publications containing express errors have been found to be within the scope of the statutory privilege. See, e.g., Grab v. Poughkeepsie Newspapers, Inc., 91 Misc.2d 1003, 399 N.Y.S.2d 97 (Sup. Ct. Duchess Co. 1977): the newspaper reported plaintiff had been convicted of bank robbery and sentenced to prison (91 Misc. 2d at 1004, 399 N.Y.S.2d at 97); in fact, he pleaded guilty, was sentenced as a youthful offender and did not serve his sentence in prison (91 Misc. 2d at 1004, 399 N.Y.S.2d at 98); but the court granted the newspaper summary judgment, finding the article to be a “fair and accurate report of a judicial proceeding” (91 Misc. 2d at 1004-1005, 399 N.Y.S.2d at 98). See also, Komarov v. Advance Magazine Publishers, Inc., 180 Misc.2d 658, 661, 691 N.Y.2d 298, 301 (Sup. Ct. New York Co. 1999) (the court ruled that “none of [the] departures from the exact language used by the FBI in its report and affidavit serve to remove the magazine article from the protection of Civil Rights Law § 74.”) 41 3. Plaintiff’s Sparse Authorities Distinguished. The courts’ decisions in Fraser v. Park Newspapers, 246 A.D.2d 894, 668 N.Y.S.2d 284 (3d Dep’t 1998) and Dibble v. WROC TV Channel 8, 142 A.D.2d 966, 967, 530 N.Y.S.2d 388, 389 (4th Dep’t 1988), the two primary cases relied on by plaintiff, are inapposite to the instant case and distinguishable from the line of authority set forth above because the reports at issue in both Fraser and Dibble contained gross errors (unlike, for example, Grab and Komarov, which included simple errors, and the present case, which included no errors of substance at all). In Fraser, the newspaper’s very brief, single article erroneously reported that plaintiff had pleaded guilty to a charge of public lewdness when in fact he had been granted an ACOD (acquittal in contemplation of dismissal). He had not pleaded guilty to anything. Mr. Fraser entered no plea at all and never signed a plea of guilt to his criminal charge (whereas NAC not only pleaded its felony guilt but also acknowledged its similar or related conduct), and the ACOD contemplated there would never be a conviction. On these facts, the Third Department affirmed the trials court’s denial of the defendant’s motion for summary judgment. (Compare with the facts of this case: The Buffalo News did not report that the plaintiff had been charged with, or pleaded guilty to anything; rather, the newspaper accurately reported that NAC, on plaintiff’s written authorization, pleaded guilty to a single federal felony charge and, in doing so, expressly and repeatedly admitted that its conduct resulted in millions of dollars in losses to the government.) Similarly, in Dibble, the television station, in an extremely abbreviated report broadcast during the evening news telecast, erroneously reported that the plaintiff, an attorney, had been “indicted on charges of fraud, embezzlement and securities violations” and was “accused of misuse of clients’ escrow accounts and stock fraud.” In fact, Mr. Dibble had only been charged with one count of larceny. 142 A.D.2d at 966, 530 N.Y.S.2d at 388. On these facts, the courts found the broadcast was not a substantially accurate report of the charges and granted the plaintiff’s motion to preclude the statutory privilege defense. 142 A.D.2d at 967-968, 530 N.Y.S.2d at 389. (Compare with the facts of this case: The Buffalo News did not over-report the charges against NAC or, indeed, the plaintiff; rather, the 42 newspaper accurately reported that NAC, on plaintiff’s written authorization, was charged with and pleaded guilty to a single federal felony charge.) In the present case, of course, no such gross error occurred. Indeed, there has been no error at all: nowhere did the newspaper report that Mr. Alf had been charged with, or pleaded guilty to a single charge, let alone multiple ones. Rather and as detailed above, NAC in fact pleaded guilty to the felony charge, in fact admitted that it committed the specific felony, in fact was given credit under the Sentencing Guidelines for accepting responsibility for not only the specific conduct underlying the single-count felony but also “related conduct,” in fact executed a Plea Agreement which expressed that its foundation was both the single billing incident specified and the related years-long conduct, and in fact admitted and agreed that the loss to the government as a result of its conduct was in the millions of dollars. And, of course, its plea and admissions culminated in conviction, sentencing and payment of the largest criminal and civil penalties ever imposed in Western New York history. A further distinction can be drawn on the basis of the fact that -- in stark contrast to the single, brief publication and broadcast at issue in Fraser and Dibble -- the Buffalo News’ reporting in this case consisted of an extensive series of thorough, lengthy, well-researched reports which, when read in their entirety and in context, present the reader with an absolutely accurate account of the official proceedings and the parties’ respective positions. In this regard, the case law is clear: even in cases involving inaccuracies (which, defendant’s submit, did not happen in this case), the reports can nonetheless be privileged under § 74 when read in context and their entirety. See, e.g., Becher, supra, 183 A.D.2d at 236-237, 589 N.Y.S.2d at 648 (misstatements regarding criminal charges “would have been satisfactorily resolved for purposes of Civil Rights Law § 74 upon reading the full article where the charges against each named defendant, including plaintiff, were accurately treated in detail.”); accord, Komarov, supra. As the Court in Gurda stated: [A] fair report which is not misleading, composed and phrased in good faith under the exigencies of a publication deadline, [should not] be thereafter parsed and dissected on the basis of precise denotative meanings which may literally, although not contextually, be ascribed to the words used. 43 81 A.D.2d at 126, 439 N.Y.S.2d at 421. This is precisely what the plaintiff would have the Court do in this case: parse and dissect The News’ reports without any regard for the overall content or context, and without regard for the controlling authority cited above. On the authority presented above, it is clear that the Trial Court was correct in its recitation of well established legal principles restating that all that is required for the privilege to apply to a report of an official proceeding is that the report be “accurate enough” (i.e., substantially accurate) and that reporters will not be held to a strict standard concerning the use of legal terms of art. See Decision and Order at pp. 10-11 (R. 15-16). 4. This Court Should Modify and Correct the Trial Court’s Incorrect Characterizations and Interpretations of The News’ Coverage. As detailed above and below, it is respectfully submitted that the Trial Court’s determination that The News’ reporting was ‘technically inaccurate’ (see Decision and Order at pp. 9, 11 (R. 14, 16) is not supported by the evidence, and that this Court should correct the record in this regard. As demonstrated above and below (see factual discussion, supra, the Finnerty Affidavit at ¶¶ 23-189 (R. 107-163) and the attached Schedule), The Buffalo News’ reports fall squarely and comfortably within the core of the § 74 privilege: the reports were indeed accurate -- technically and otherwise. In this case, The Buffalo News from the outset and consistently thereafter reported the distinction between the single-count felony and the far more extensive conduct of NAC underlying the criminal plea and the False Claims Act and forfeiture proceedings; it reported the financial and no-jail aspects of the Plea Agreement unerringly; and it used simple, summary lay-terminology with definitional accuracy and with substantial faithfulness to the gist of the conduct, the charges, the legal resolution and courtroom discussions. Indeed, The News’ reporting in this respect is not significantly different from -- and in context is a good deal more complete and balanced than -- the official government statements that summarized the NAC/Alf proceedings in an official Press Release: 44 “Today’s settlement demonstrates the United States’ determination to ensure that contractors doing business with our military departments do not divert resources needed for the war effort into their own pockets through fraud,” said acting Assistant Attorney General Jeffrey S. Buchholtz, head of the Justice Department’s Civil Division. * * * * * “This felony conviction, which includes the largest criminal and civil penalties ever imposed in the Western District of New York, makes it clear that dishonest corporate entities are not immune from bearing substantial consequences arising from their deliberate efforts to cheat the American public,” said U.S. Attorney Terrance P. Flynn. R. 436. (Emphasis added.) In the context of the formal elements in the record and official statements like this from the authors of the official proceedings, The Buffalo News’ reportage of the criminal and civil actions and resolution is unquestionably “fair and true” and, thus, privileged under § 74 even without the benefit of the liberality and breathing room required under the jurisprudence. (See discussion supra, the Finnerty Affidavit at ¶¶ 23-189 (R. 107-163) and the attached Schedule.) D. Application of the Privilege to the Headlines. “A headline should be concise, descriptive of the text, and arresting.” Paris v. New York Times Co., 170 Misc. 215, 218, 9 N.Y.S.2d 689, 692 (Sup.Ct. New York Co., 1939), aff’d, 259 A.D. 1007, 21 N.Y.S.2d 512 (1st Dep’t 1940). *** The final clause of § 74 applies specifically to headlines (or “headnotes”) of news reports of official proceedings, expressly including headings within the purview of the absolute privilege: A civil action cannot be maintained … for any heading of the report which is a fair and true headnote of the statement published. N.Y. Civ. Rights L. § 74 (McKinney 2009). Given the compressed, condensed nature of a headline, the courts apply an even greater degree of liberality in determining if it is “a fair and true headnote” than the demonstratedly generous reading they give to the fuller (though also condensed) report of the proceeding it accompanies. Indeed, all the law requires is a determination that the heading is a “fair index” of the accompanying report. In making this 45 determination, the text of the article can even be read to clarify, correct or qualify a headline that is ambiguous, exaggerated, incomplete or even just plain wrong. Whether a headline is a fair index or “fair and true headnote” is a determination for the court, Karp, supra, 631 F.Supp. at 362, to be made by considering both of them together. See, e.g., White v. Berkshire-Hathaway, Inc., supra, 10 Misc.3d at 255, 802 N.Y.S.2d at 912 (citations omitted): In order to determine whether the headline of a news article is defamatory in nature, “the court must initially determine whether the headline was a fair index of the article within which it appears.” This threshold question is one of law for the court, not a question of fact for a jury. See also, e.g., Gunduz v. New York Post Co., Inc., 188 A.D.2d 294, 590 N.Y.S.2d 494 (1st Dep’t 1992); Becher, supra; Lawyers’ Co-Operative Pub. Co. v. West Pub. Co., 32 A.D. 585, 52 N.Y.S. 1120 (4th Dep’t 1898); Gunder v. New York Times Co., 37 F.Supp. 911 (S.D.N.Y. 1941); Cole Fisher Rogow, Inc. v. Carl Ally, Inc., 29 A.D.2d 423, 426, 288 N.Y.S.2d 556, 561 (1st Dep’t 1968), aff’d, 25 N.Y.2d 943, 305 N.Y.S.2d 154 (1969); Paris, supra, 170 Misc. at 218, 9 N.Y.S.2d at 692; Bresslin v. Sun Printing & Publishing Ass’n, 177 A.D. 92, 94, 163 N.Y.S. 915, 916 (2d Dep’t 1917). The headline of an article cannot be read on its own; rather, it “must be read and evaluated in conjunction with the text it precedes.” White, supra, 10 Misc.3d at 256, 802 N.Y.S.2d at 912; Corso v. NYP Holdings, Inc., 2007 N.Y. Misc. LEXIS 6661 at *7 (Sup. Ct. New York Co. 2007); see also, e.g., Kamalian v. Reader’s Digest Association, Inc., 29 A.D.3d 527, 528, 814 N.Y.S.2d 261, 263 (2d Dep’t 2006); Brown v. Johnson Newspaper Corp., 84 A.D.2d 636, 444 N.Y.2d.493 (3d Dep’t 1981); Cole Fisher Rogow, supra, 29 A.D.2d at 426, 288 N.Y.S.2d at 561. A headline that is a fair index of a substantially true article is simply not actionable as a matter of law. White, supra, 10 Misc.3d at 255, 802 N.Y.S.2d at 912 (“If the headline is indeed a ‘fair index’ of the related news article, it is not actionable as a matter of law.”); Mondello v. Newsday, Inc., 6 A.D.3d 586, 774 N.Y.S.2d 794 (2d Dep’t 2004); Corso, supra at *7 (“[i]f the headline is a fair index of an accurate article, it does not give rise to a cause of action.”); Lawyers Co-op, supra, 32 A.D. at 590, 52 N.Y.S. at 1123 (“[d]efamatory head lines are actionable though the matter following is not, unless they fairly 46 indicate the substance of the matter to which they refer, and...unless they are a fair index of the matter contained in a truthful report.”); Salisbury v. Union & Advertiser Co., 45 Hun 120, 122; see also, Campbell v. New York Evening Post, Inc., 245 N.Y. 320, 328, 157 N.E. 153, 156 (1927); Gunder, supra, 37 F.Supp. at 913. A headline that fairly indicates the gist (or an element of interest in) or the “sting” of its article is entitled to all of the same privileges and defenses as the article itself. Thus, if the article is privileged under § 74, so is the fair-index headline. See, e.g., Gunduz, supra; Becher, supra; Lawyers’ Co-Op, supra. In addition, an ambiguous, exaggerated, or even erroneous headline may be clarified and thus considered a non-actionable fair index when read with the accompanying text. See, e.g., Gunduz, supra, Becher, supra, and Gurda, supra. See also, Seldon v. Shanken, 143 A.D.2d 3, 5, 531 N.Y.S.2d 264, 266 (1st Dep’t 1988) (headlines held to be fair indices of their respective articles as the “accurate description in the text of the article dispelled any possible misleading meaning of the headlines”); Idema, supra, 120 F.Supp.2d at 363 (any ambiguities created by the headline “Militant Sues Red Hook” would be resolved for the reader by perusing the article); Lawyers’ Co-op, supra (court took into consideration that allegedly libelous headline was “explicitly explained in the body of the article” and therefore privileged under Section 337 of the Civil Practice Act, the predecessor to Civil Rights Law § 74.); Grab, supra, 91 Misc.2d at 1004, 399 N.Y.S.2d at 98 (headline reference to “young robber” was explained by article, and article was itself substantially true and a fair and accurate (and therefore privileged) account of an official proceeding); Paris, supra (headline that was ambiguous, at best, when read alone, was fully explained by the text of the article and therefore a fair index); Salisbury, supra, 45 Hun. at 122 (“The heading states a question which, standing alone, might be construed as libelous. But connected with what follows it appears to be [privileged as] a question presented by a judicial proceeding.”); Trudeau v. Plattsburgh Pub. Co., 11 A.D.2d 852, 202 N.Y.S.2d 412 (3d Dep’t 1960) (incorrect headline which wrongfully referred to marijuana arrest, when plaintiff had been arrested for disorderly conduct, non-actionable because reading the text clarified that the headline was misplaced). 47 Applying these principles and considerations to this case, the challenged headlines from the October 26, 2007, November 8, 2007, March 2, 2008, and March 3, 2008 Articles, when read in the context of each of the Articles, are fair indices of the text and are therefore privileged. October 26, 2007 Headline Among other things and as demonstrated more fully above and in the Record, the October 26 Article accurately reported on the federal investigation and prosecution of, and plea deal taken by, NAC whereby the Company pleaded guilty to a felony count of defrauding the military and admitted in open court that the loss to the government as a result of its conduct was over four million dollars. The Article also accurately recited that NAC agreed to pay over $28 million to resolve all of the government’s allegations, including $7.37 million for False Claims Act claims and $7.42 million in forfeitures, a global recovery that United States Attorney Terrance Flynn described as the “largest criminal recovery … in the history of Western New York.” Additionally the Article accurately reported that, as part of the plea deal, none of the Company’s officials would be prosecuted. See generally, Counterstatement of Facts at pp. 13-19, supra. These facts were succinctly and summarized under a headline and sub-headline: Orchard Park Company admits cheating U.S. military Air cargo executives will avoid jail but must pay over $28 million in fines. See R. 34, R. 440. Given the substance of the Article (which, as demonstrated above, is a fair and accurate report of official proceedings), this headline is privileged under § 74 because it is unquestionably a “fair and true headnote of the statement published.” The same conclusion can be drawn with regard to the other headlines. November 8, 2007 Headline Plaintiff complains about the headline (“Taxpayers are cheated”) of the November 8, 2007 Editorial. (See Amended Complaint ¶ 19T, R. 25.). In addition to being absolutely true (NAC did, in fact, plead guilty to knowingly and willfully submitting a materially false statement to the government for payment, i.e., “cheating” the government - see discussion, supra), this headline is unquestionably a “fair and true headnote” because the Editorial accurately recounted that NAC had “overcharged the Defense 48 Department for military shipments within the continental United States between early 1999 and April 2005” and had agreed to “pay more than $28 million in fines, restitution and forfeitures.” See R. 41, R. 445. March 2, 2008 Headline The March 2, 2008 Article, like that of October 26, 2007, recounted the investigation and prosecution of the Company and the resulting plea deal. The four leading paragraphs accurately reported: Christopher J. Alf’s company was accused of cheating the government out of millions of dollars by falsely billing his best customer, the U.S. Defense Department. But when Alf’s company, National Air Cargo of Orchard Park, is sentenced in the case, perhaps as soon as Thursday in the U.S. District Court, neither Alf nor anyone in his company will go to jail. Instead, National Air Cargo has agreed to pay fines and restitution totaling $28 million. The company pleaded guilty in October to a single count of falsifying records to say that a military shipment arrived on time when it was late. See R. 42, R. 448. The Article continued, accurately reciting that the plea deal required NAC to pay $4.4 million in restitution, $8.8 million in fines, over $7 million in forfeitures, and over $7 million to resolve the False Claims Act claims. Id. Moreover, the Article also quoted the written responses provided by one of the Company’s several attorneys, Paul J. Cambria, to the newspaper’s written questions. As with the October 26 Article, the newspaper accurately summarized its report under this headline and sub-headline: Soft landing for cargo company Orchard Park firm to pay $28 million in fines and restitution, as owner avoids jail time, insists he did nothing wrong. Id. Again, all of these published statements are demonstrably true, fair and accurate (see discussion, supra) and this headline also is privileged. March 3, 2008 Headline Plaintiff’s claim regarding this headline, “‘Dream team’ wins no-jail plea deal” (Amended Complaint ¶ 19GG, R. 27), also must fail. This Article (like many that preceded it) accurately reports that as part of the plea deal, no Company officials would face any jail time (see discussion, supra.) See R. 48, 49 R. 450-451. Moreover, the Article accurately states that the Company was represented at the October 25, 2007 Plea Proceeding by a cadre of attorneys, whose ranks included not only a former secretary of the United States Air Force under President Clinton, but also a prominent Washington attorney whose clients included then-Vice President Cheney. Id. Both attorneys are partners at Williams & Connolly, a Washington, D.C. firm identified in the Article as one of the Capitol’s “most powerful law firms,” (id.) a characterization that is not in dispute. The Article also reported that the legal team for the Company and its officials included a number of Buffalo’s “top attorneys” (Paul J. Cambria, Rodney O. Personius, Terrence M. Connors, Joel L. Daniels and Daniel J. Henry, Jr.). These defense counselors consistently appear in Western New York’s most high-profile criminal cases. The article concluded that NAC was being represented “by some of the best lawyers in the country.” Again, these descriptions and characterizations are not in dispute. Given the substance of the Article, the headline “‘Dream team’ wins no-jail plea deal” is unquestionably a privileged “fair and true headnote of the statement published.” As in the above-cited cases: the Articles were based on official proceedings; the Articles were hard-hitting and critical; the Articles carried equally strong headlines that, read in the context of their Articles, are “fair indices” and privileged. E. In Addition to the Statutory Privilege, the Headlines and Many of the Challenged Statements are Not Actionable Because They are Not “Of and Concerning” the Plaintiff. In addition to the statutory privilege, New York law holds that, if a headline does not name the plaintiff, it simply is not separately actionable. See, e.g., White, supra; Chaiken v. VV Publishing Corp., 907 F.Supp. 689 (S.D.N.Y. 1995), aff’d, 119 F.3d 1018 (2d Cir. 1997), cert. denied, 522 U.S. 1149, 118 S.Ct. 1169, 140 L.Ed.2d 179 (1998) (headline “In the Realm of Perfect Faith: Israel’s Jewish Terrorists” not independently actionable as it did not specify the plaintiffs); Trudeau, supra, 11 A.D.2d at 852, 202 N.Y.S.2d at 412 (incorrect headline “Man Arrested for Carrying Marijuana” not actionable as it did not include the plaintiff’s name); Mattingly v. News Syndicate Co., 192 Misc. 610, 81 N.Y.S.2d 30 (Sup. Ct. New York Co. 1948), aff’d, 277 A.D. 842, 97 N.Y.S.2d 914 (1st Dep’t 1950) (headline “Some Professors in Favor of Ignorance” not separately actionable as it did not identify plaintiff); and compare 50 Schermerhorn v. Rosenberg, 73 A.D.2d 276, 283, 426 N.Y.S.2d 274, 287 (1980) (headline “Schermerhorn Says NDDC Can Do Without Blacks” held to be separately actionable because: it was not a fair index; the subject (a senator) did not make the racist statement -- indeed, the reporter fabricated it; and standing alone it was defamatory of and concerning the plaintiff because it expressly named him). In White v. Berkshire-Hathaway, Inc., supra, for example, the newspaper (The Buffalo News) published an article headlined “Unscrupulous operation gouges nursing home.” The article reported on the many financial and health-care related improprieties found by government officials, concluding that the operators of the nursing home -- which included the plaintiff -- made millions of dollars while its residents were left living in conditions so deplorable that the State Department of Health threatened to revoke the home’s Medicaid charter. The Court (Hon. John P. Lane, J.S.C.) dismissed the plaintiff’s claims in their entirety, noting in pertinent part: It is significant that plaintiff was not named in the headline at issue. Unlike Schermerhorn where a racial slur was attributed directly [in the headline] to that plaintiff’s speech, the headline here fails not only to specifically refer to plaintiff by name, it omits a reference to any person whatsoever. Instead, it speaks to an “operation” rather than an “operator.” A headline that does not directly name the plaintiff is not independently actionable. White, supra, 10 Misc.3d at 256, 802 N.Y.S.2d at 912 (citations omitted). This is consistent with the laws of defamation in general, which require that, in addition to proving falsity and fault, a plaintiff in a defamation action must prove the complained-of statements were “of and concerning” him. See, e.g., Carlucci v. Poughkeepsie Newspapers, Inc., 57 N.Y.2d 883, 456 N.Y.S.2d 44 (1982); Springer v. Viking Press, 60 N.Y.2d 916, 470 N.Y.S.2d 579 (1983). The Court may determine whether a complained-of statement is “of and concerning” the plaintiff. Carlucci, 57 N.Y.2d at 884, 456 N.Y.S.2d at 45; Springer, 60 N.Y.2d at 917, 470 N.Y.S.2d at 580. In this case, none of the four challenged headlines referred to the plaintiff by name: from the October 26, 2007 Article, the headline “Orchard Park company admits cheating U.S. military” (See Amended Complaint at ¶ 19A, R. 24.); from the November 8, 2007 Editorial, the headline “Taxpayers are cheated” (See Amended Complaint ¶ 19T, R. 25.); from the March 2, 2008 Article, the headline “Orchard 51 Park firm to pay $28 million in fines and restitution, as owner avoids jail time, insists he did nothing wrong” (see Amended Complaint ¶ 19BB, R. 26); and from the March 3, 2008 Article, the headline “‘Dream team’ wins no-jail plea deal” (see Amended Complaint ¶ 19GG, R. 27). However, none of these statements expressly names the plaintiff (and even the March 2 reference to an “owner,” cf., White, supra, includes his self-proclamation of innocence). Accordingly, his claims with regard to these statements should be dismissed as a matter of law. Indeed and as set forth above, not only do these headlines not name the plaintiff, the vast majority of the challenged statements within the bodies of the Articles and the Editorial also do not name or refer to Mr. Alf: none of the challenged statements in the October 26, 2007 Article mentioned Mr. Alf by name; rather, they referred to the “company” or “National Air Cargo” (which is NOT a party to this litigation) (see Amended Complaint at ¶¶ 19A-H, R. 24). Many of the complained-of statements from the subsequent reports similarly do not refer to Mr. Alf, either by name or title (see Amended Complaint at ¶¶ 19I, K (The October 27, 2007 Article), R. 24-25; ¶¶ 19M, N, O, P, Q, R (The November 1, 2007 Article), R. 25; ¶¶ 19T, U, X, Y, Z (The November 8, 2007 Editorial), R. 25-26; ¶¶ 19GG (The March 3, 2008 Article), R. 27; and ¶¶ 19II, HH (The March 5, 2008 Article), R. 28. Because these statements do not name the plaintiff, the Trial Court’s dismissal of plaintiff’s claim as premised thereon is sustainable on this basis as well. III. THE PLAINTIFF’S ARGUMENTS, AND SEVERAL OF THE TRIAL COURT’S DETERMINATIONS REGARDING THE ACCURACY AND INTERPRETATION OF THE BUFFALO NEWS’ REPORTS, ARE UNSUPPORTABLE. The plaintiff argues that The News reports should not have been found to be privileged because, as stated in his “Question Presented” they “falsely expanded the scope of an admission in a criminal proceeding and led readers to conclude that Plaintiff-Appellant had admitted to cheating the government over a period of years.” In doing so, the plaintiff relies heavily on those portions of the Trial Court’s opinion which questioned the technical accuracy of The News’ reporting. As the plaintiff notes, Justice Whalen opined that: 52 • “It is clear from a review of the entire record that Alf did not admit to cheating the government over a period of years.” (R. 13); • “… a fair reading of the articles leads the reader to inaccurately conclude that NAC and Alf admitted to cheating the government over a period of years.” (R. 14); • “The News relied upon certain ‘relevant conduct,’ also referred to as ‘related conduct.’ Plaintiff correctly argues that the reporter’s depictions of ‘relevant conduct,’ in the plea agreement and during the plea colloquy, as evidence of additional admissions by NAC and Alf is inaccurate.” (R. 14); • “The News’ articles inaccurately relied upon the terms of the plea agreement and the in-court colloquy at sentencing.” (R. 16); • While, The News’ reports were, on the basis of the Criminal Information, Plea Agreement, Transcript of the Plea Proceeding, Forfeiture Complaint, False Claims Act Complaint, October 25, 2007 Department of Justice Press Release and the October 25 statement, “fairly” reported for purposes of § 74 (see R. 16), they were “not technically accurate” (R. 16). See, e.g., Plaintiff’s Brief at pp. 3, 4, 20. The Trial Court’s conclusions -- and plaintiff’s dependent arguments -- are not supported by the evidence. The reporter faithfully and accurately reported the proceedings, fairly portrayed the Plea Agreement and the in-court statements of counsel, and he correctly interpreted them and the applicable federal guidelines. This Court should accordingly modify the Decision in this regard. A. Plaintiff’s Arguments and the Trial Court’s Finding that The News Erroneously Reported the Company’s Admissions and that Plaintiff had ‘Admitted Cheating the Government Over a Period of Years’ is Simply Incorrect. Plaintiff’s argument is premised on the core foundational assumption that The News’ reporting was inaccurate because it falsely reported charges against him and attributed to him admissions he did not make. See, e.g., Plaintiff’s Brief at p. 5 (“The News falsely reported admissions by Alf and falsely reported charges against him.”); see also, e.g., Plaintiff’s Brief at pp. 5, 21-22, 25-26 (relying on Dibble and Fraser, discussed and distinguished supra, cases in which the media either mis-reported the charges 53 against the criminal defendant (Dibble) or erroneously reported that the defendant had pleaded guilty when no such plea had been entered (Fraser)). The Trial Court erroneously agreed with the plaintiff’s reading of the Articles, concluding not only that “[i]t is clear from a review of the entire record that Alf did not admit to cheating the government over a period of years” (R. 13), but also that “… a fair reading of the articles leads the reader to inaccurately conclude that NAC and Alf admitted to cheating the government over a period of years” (R. 14). These arguments and conclusions are, quite simply, a gross mischaracterization of the newspaper’s reporting: nowhere did the newspaper ever report that plaintiff had been criminally charged; nowhere did the newspaper ever report that plaintiff had pleaded guilty to any crimes; and, indeed and although NAC is not a party to the proceeding, nowhere in any of the many newspaper reports did The Buffalo News overstate the charges against the Company. Rather, the newspaper clearly, correctly and repeatedly reported only that NAC -- and not the plaintiff -- had been charged with and pleaded guilty to a single-count criminal information of submitting a false statement. See Summary of Argument at p. 5, supra. Moreover, while the newspaper did report that the Company admitted cheating the government over a period of years, as demonstrated above, this is fully supported by the Record. See Counterstatement of Facts and Argument, supra. Plaintiff also argues that the newspaper reported that he “either admitted violating or was found in court to have violated the False Claims Act, the basis of the qui tam action.” See e.g., Plaintiff’s Brief at p. 14. Again, this is a mischaracterization as no such statements were published by The News: nowhere did the newspaper report that either the Company or Mr. Alf had admitted to violating or were found in court to have violated the False Claims Act; rather, and consistent with the terms of the Plea Agreement and statements made during the Plea Proceeding, the newspaper reported that “[t]he plea deal calls for National Air Cargo to pay a $7.37 million fine for violations of the False Claims Act, $13.2 million in other fines and restitution and $7.42 million in forfeitures to the government.” See discussion, supra. Plaintiff repeatedly complains (see, e.g., Plaintiff’s Brief at pp. 14, 23, 24, 40) that the newspaper’s statement that “the company [or couple] maintains it stopped cheating the government in 54 2005” is improper because it implies admissions by NAC and Alf that they had been cheating the government prior to 2005. See, e.g., Plaintiff’s Brief at p. 40 (“These attributions, even while reporting denials, all share the same phrasing implying admissions by NAC and Alf that they had been cheating the government at an earlier time.”) Plaintiff’s complaints are unavailing. First, as plaintiff’s counsel recognizes, the published statements on their face plainly report denials of wrongdoing by the Company and Mr. Alf. Thus, it is, at best, a stretch for plaintiff to claim that the statements are even false and/or defamatory, a point conceded by counsel wherein he states that the statements merely imply admissions. As a general matter, New York disfavors claims for libel by implication or innuendo. See, e.g., Proskin v. Hearst, 14 A.D.3d 782, 787 N.Y.S.2d 506 (3d Dep’t 2005); Nekos v. Kraus, 62 A.D.3d 1144, 878 N.Y.S.2d 827 (3d Dep’t 2009). Moreover and consistent with the authority cited above, any conceivable misimpression arising from the use of the term “couple” in the October 27 Article would have been clarified conclusively by the balance of The News’ many articles, including without limitation, the prior day’s detailed story (R. 34-36, 440-441) which clearly limited the plea and admissions to the Company and also the Sunday, March 2, 2008 front-page story with its headline trumpeting Mr. Alf’s insistence that “…he did nothing wrong” (R. 448). Second, and as set forth above, the government’s case against the Company -- and the resolution embodied by the Plea Agreement -- encompassed criminal conduct alleged to have occurred between 1999 and 2005. See, e.g., Plea Agreement at ¶ 2 (R. 287) (stating that “The guilty plea entered pursuant to this Agreement is in satisfaction of (a) any and all federal offenses committed for the period between January 1999 to and including April 2005 …”) (emphasis added); Plea Agreement at ¶ 29 (R. 297) (“The government agrees that neither the defendant National Air Cargo, Inc., its affiliated companies nor its present or former owners, directors, officers or employees will be prosecuted … for (a) any federal criminal offenses committed for the period between January 1999 to and including April 2005 based upon facts set forth in ¶ 4 related to its and their conduct within the continental United States.”) (emphasis added); Verified Complaint for Forfeiture at ¶¶ 3-6 (R. 176-179) (setting forth the allegation that plaintiff’s company, NAC, through the illegal act of wire fraud, received over a period of years over 55 $17 million in payments from the federal government). In this context, the Company -- on Mr. Alf’s written authorization -- expressly admitted in the Plea Agreement and in open court that: (a) by virtue of its guilty plea, it had engaged in criminal fraudulent conduct prior to 2005; and (b) the loss to the government as a result of its conduct during the period of time covered by the investigation (1999-2005) was $4,400,000. Accordingly, it is indisputable that the Company -- with the express authorization of its sole owner and controller, Mr. Alf -- did admit to “cheating the government at an earlier time.” B. Plaintiff’s Arguments and the Court’s Conclusions Concerning The News’ Alleged Reliance on “Relevant Conduct” are Equally Unavailing. The plaintiff argues -- and the Trial Court incorrectly agreed -- that the newspaper’s alleged mis- reliance on the concept of “relevant conduct” resulted in inaccurate reporting of the official proceedings. See, e.g., Plaintiff’s Brief at p. 4; see also the Trial Court’s Decision and Order at pp. 9, 11 (R. 14, 16) (“The News relied upon certain ‘relevant conduct,’ also referred to as ‘related conduct.’ Plaintiff correctly argues that the reporter’s depictions of ‘relevant conduct,’ in the plea agreement and during the plea colloquy, as evidence of additional admissions by NAC and Alf is inaccurate;” “The News articles inaccurately relied upon the terms of the plea agreement and the in-court colloquy at sentencing, including the references to ‘relevant conduct.’”) The crux of plaintiff’s argument is that “relevant conduct” is, in essence, ‘irrelevant’ for purposes of the fairness of The News’ reporting (see, e.g., Plaintiff’s Brief at pp. 29-30) and that failing to report the meaning, basis and import of the term, The News’ § 74 analysis must fall (id at p. 42: “By failing to explain that the settlement payments were negotiated and associated with unproven and unadmitted ‘relevant conduct,’ […] the News rendered its reporting unfair and untrue.”). These arguments are infirm for several reasons. First, the accuracy of The News’ reporting was not dependent solely on the concept of “relevant conduct,” but rather was based on and reflective of the entirety of the official documents and in-court proceedings that were available at the time. Indeed and as demonstrated above and summarized below, one of the core statements of which the plaintiff complains (i.e., that NAC “admitted to cheating the 56 government out of millions”) is defensible without reference to “relevant conduct.” See Argument at Point III.B.i., infra. Second, plaintiff’s argument relies on a distortion of the record that simply does not withstand scrutiny. See Argument at Point III.B.ii., infra. Third, The News’ reports, even if read within the confines of the Federal Sentencing Guidelines (i.e., “parsed with a lexicographer’s precision”), are “fair and true” for purposes of the § 74 analysis. See Argument at Point III.B.iii., infra. i. The Accuracy of The News’ Reporting is not Solely Reliant on “Relevant Conduct” As both the Verified Complaint and Plaintiff’s Brief make clear, a key component of plaintiff’s claim is The News’ reporting that NAC “admitted cheating the military out of millions of dollars.” See e.g., Amended Complaint at paragraphs 10 and 18; see also Plaintiff’s Brief at pp. 3, 25, 26, 28, 29, 33. This is exactly what happened, and the newspaper’s reports were fair, accurate and true, even without reference to “relevant conduct.” “Admitted cheating the government …” It is unquestionable that NAC, with the express authorization of Mr. Alf, executed a Plea Agreement and voluntarily entered a guilty plea to the charged felony in federal court. (Compare and contrast with the facts of Fraser, supra, relied on by plaintiff and discussed above, in which the criminal defendant did not enter any plea, but rather was granted an adjournment in contemplation of dismissal.) It is thus incontrovertible that NAC in fact “admitted” to perpetrating a felony offense. Equally clear and incontrovertible is that NAC’s admitted criminality was against the government: the statute which NAC admitted and in fact pleaded guilty to violating was 18 U.S.C. §1001(a)(2), the purpose of which is to “punish those who render positive false statements designed to pervert or undermine functions of governmental departments and agencies.” United States v. Harrison, 20 M.J. 710 (A.C.M.R. 1985). In his attempt to circumvent the well-established liberal application of § 74, plaintiff seeks to invent falsity by taking issue with The News’ use of the term “cheating” to describe NAC’s activities, arguing that “NAC only admitted submitting a single false statement to the government, a charge that 57 does not encompass ‘cheating’ as a necessary element.” Plaintiff’s Brief at p. 26. This argument is patently absurd (if not frivolous), not only because it ignores the plain meaning of “cheat,” the language of the statute at issue and the facts of the case, but also because it asks this Court to impose on the newspaper a legally impermissible standard for reporting. Plaintiff’s technical parsing of the language used by The News violates the New York legislative mandate and the State’s liberal judicial tradition in interpreting, analyzing and protecting press reports. As the Court of Appeals stated in Holy Spirit Ass’n for Unification of World Christianity v. New York Times Co.: When determining whether an article constitutes a “fair and true” report, the language used therein should not be dissected and analyzed with a lexicographer’s precision. This is so because a newspaper article is, by its very nature, a condensed report of events which must, of necessity, reflect to some degree the subjective viewpoint of its author. Nor should a fair report which is not misleading, composed and phrased in good faith under the exigencies of a publication deadline, be thereafter parsed and dissected on the basis of precise denotative meanings which may literally, although not contextually, be ascribed to the words used. 49 N.Y.2d 63, 68, 424 N.Y.S.2d 165, 168 (1979). On this basis alone, plaintiff’s effort to create an issue of falsity by challenging The News’ use of specific terms (such as “cheating”) should fail in the context of the federal court proceedings and the entirety of the paper’s coverage. Factually, plaintiff’s argument is equally unsustainable. The statute to which NAC pleaded guilty, 18 U.S.C. §1001(a)(2), makes it a felony to “knowingly and willfully” make a “materially false, fictitious, or fraudulent statement or representation” to the government. NAC in the Plea Agreement and during the October 25 Plea Proceeding admitted that it knowingly and intentionally falsified a delivery document. See Plea Agreement at paragraph 4(g) (R. 289); see also Transcript of Plea Proceeding at pp. 27-28 (R. 220-221). This was done in order to justify its receipt of a payment from the government for a “timely” delivery which, in fact, was not timely. This is practically the textbook definition of cheating: Merriam Webster’s Collegiate Dictionary includes the following in its definition of “cheat:” • to deprive of something valuable by the use of deceit or fraud; • to influence or lead by deceit, trick, or artifice; 58 • to practice fraud or trickery; and • to violate rules dishonestly. Moreover, NAC itself in the Plea Agreement agreed that § 2B1 of the Sentencing Guidelines applied to its felonious conduct. R. 290. This section of the Guidelines applies to sentencing in cases involving “theft, embezzlement, receipt of stolen property, property destruction and offenses involving fraud or deceit.” On these bases, there can be no question that The News’ characterization of NAC having “admitted cheating the government” was appropriate, fair, accurate and, accordingly, privileged. “… out of millions of dollars” As much as plaintiff would like to re-write history in this regard, it is equally clear, as it was plain to the veteran reporter who reviewed the Plea Agreement and attended the Plea Proceeding, that the Company unequivocally admitted that the loss to the government as a result of its conduct was in the millions of dollars. This fact was agreed to by NAC in both the Plea Agreement and in open court. See, e.g., the Plea Agreement at ¶ 7 (R. 290) (NAC expressly agreed that “the victim’s loss” was $4,400,000); see also, e.g., the statement of NAC’s counsel during Plea Proceeding (R. 243-244) (“We agree that the 4.4 [million dollars] is the loss to the victim.”) and see discussion, supra. The above thus establish the fairness and accuracy of The News’ October 26, 2007 and subsequent reporting that NAC “admitted cheating the government out of millions of dollars.” ii. Plaintiff’s Distortion of the Record and His Arguments Concerning NAC’s Admissions do not Withstand Scrutiny. Despite the plain, unequivocal language of the Plea Agreement and the in-court statement of NAC’s counsel, plaintiff would now have this Court believe that the acknowledged multi-million dollar loss to the government that resulted from NAC’s conduct was not really an admission, but rather merely related to “relevant conduct” and that NAC’s counsel had in fact challenged the amount of the loss (see generally, Plaintiff’s Brief at p. 17) all along. These arguments are patently disingenuous, particularly with respect to the 2007 proceedings and attendant coverage. 59 As stated above, it is clear from the language of the Plea Agreement the acknowledged loss was not merely a construct related to “relevant conduct,” but was part of NAC’s guilty plea itself: “[t]he parties agree that for purposes of relevant conduct and for this plea agreement that the loss to the United States has been estimated by the government to be the sum of $4,400,000 for the time period … .” (Plea Agreement at ¶ 4(h) (R. 289) (emphasis added). See also Plea Agreement at ¶ 7 (R. 290) (NAC, in the context of its consent to an order of restitution, expressly and unqualifiedly agreed that “the victim’s loss” was $4,400,000); and see Plea Agreement at ¶ 10 (R. 290-291) (NAC agreed that the “offense level” for its felonious conduct should be increased from level 6 to level 24 “because the agreed upon loss was greater than $2,500,000 and less than $7,000,000.”). There is no equivocation in these statements, and Mr. Herbeck was absolutely entitled to rely on them in his reporting. Despite this plain language (and, indeed, the express agreement of counsel during the Plea Proceeding of a multi-million dollar loss (see discussion, supra)), plaintiff claims that he and his Company’s counsel never agreed with, and in fact challenged in court, the amount of the government’s alleged loss (see, e.g., Plaintiff’s Brief at p. 17, directing the Court to R. 365-366 and stating that had the “contradictory” regulations been resolved sooner, “there would have been no dispute and the government’s estimated ‘loss’ in the colloquy about ‘relevant conduct’ would diminish to the amount NAC consistently asserted: zero.”). This is seriously misleading: while it is true that in the cited colloquy, NAC and Mr. Alf’s “National Counsel,” Mr. Peters, expressed during this March 6, 2008 hearing a disagreement with the $4.4 million loss calculation (an expression which occurred, notably, only after publication of every single one of the challenged News reports), neither plaintiff nor the Company previously had ever publicly expressed such a position. Plaintiff’s presentation of this event glosses over this temporal dislocation, misleadingly presenting it as if it could have and should have affected news coverage that had already occurred. The inescapable fact is that this type of equivocation was neither part of the Plea Agreement nor stated by NAC’s counsel during the Plea Proceeding. At that proceeding, Mr. Peter’s statement was unequivocal: “We agree that the 4.4 [million dollars] is the loss to the victim.” 60 Plaintiff’s distortion of the Record is not limited to the above example. Another instance occurs on pp. 16-17 of his Brief when he contends that his and his Company’s dispute with federal authorities was limited to a disagreement over the mode of transport of freight shipments allegedly arising from confusing regulations (in plaintiff’s terms, the “air-truck” issue). Again, this is a gross distortion of the Record. The plain language of the Criminal Information and Plea Agreement establishes that the government’s case against NAC was not limited to the air-truck issue. In fact, the air-truck issue was only one of four specified bases for the government’s investigation of NAC; the others had to do with malfeasance and outright fraud: NAC’s late delivery of shipments; false claims or false statements made by NAC; and the Company’s fraudulent use of the PowerTrack system. As the Plea Agreement stated: 2. The guilty plea entered pursuant to this agreement is in satisfaction of (a) any and all federal offenses committed for the period between January 1999 to and including April 2005 by the defendant based on facts set forth in ¶ 4 of this agreement and (b) based upon any facts or documents known to the government or upon documents in the possession of the Office of the United States Attorney for the Western District of New York at the time a guilty plea is entered pursuant to this agreement that relate to (i) late delivery of freight, (ii) facts or documents which the government would allege constitute false claims or false statements relating to NAC’s carriage of freight for the United States, (iii) use by NAC of the PowerTrack system; or (iv) facts relating to the mode or method chosen by NAC to perform work under a freight contract with the United States. Plea Agreement at ¶ 2 (R. 287). See also Transcript of Plea Proceeding at pp. 63-64 (R. 256-257): Ms. Wylegala expressly stated to the court that the “manner of shipment” had nothing to do with, among other things, the government’s claims regarding NAC’s (mis)use of the PowerTrack system. Indeed, the felony charge NAC pleaded guilty to makes absolutely no mention whatsoever of the air-truck issue; rather, it relates solely to a late delivery and NAC’s intentionally falsified documentation that deliberately concealed that lateness. And NAC pleaded guilty to that charge. Accordingly, plaintiff’s suggestion that the government’s case was limited to the air-truck issue is nonsense, as is his contention that, but for the confusing regulations on the air-truck issue, there would likely have been no dispute. Plaintiff’s claim that the expressed, admitted, multi-million dollar loss to the government should not be viewed as such is especially outrageous considering that the Sentencing Guidelines specify the 61 requirements for factual stipulations in plea agreements: any factual stipulations “shall,” among other things, “set forth the relevant facts and circumstances of the actual offense conduct and offender characteristics” and “not contain misleading facts.” Policy Statement, Sentencing Guidelines § 6B1.4(a). Moreover, “to the extent that the parties disagree about any facts relevant to sentencing, the stipulation shall identify the facts that are in dispute.” Id. § 6B1.4(b) (Policy Statement); see also United States v. Telesco, 962 F.2d 165, 168 (2d Cir. 1992) (quoting Sentencing Guidelines § 6B1.4 and warning that prosecutors “may not compromise on factual issues when they have a good faith disagreement with the defense” or “sign a stipulation unless they have a good faith belief that the evidence supports the facts stated in the stipulation.”). Nowhere in the Plea Agreement is there any indication that there was a dispute concerning the amount of loss to the government. Indeed, while a stipulation in a plea agreement as to the amount of loss does not fix the amount as a matter of law, such a stipulation “will generally govern the resolution of that issue … [i]t is essentially a promise by the government and the defendant not to contest the stipulated amount and to represent to the court their joint view that the amount is accurate.” United States v. Granik, 386 F.3d 404, 411 (2d. Cir. 2004) (emphasis added). The sentencing court is charged with determining the amount of loss (the stipulation itself does not bind the sentencing court to the amount of loss; rather, the court must find the loss amount as a fact at sentencing): such a finding is based on the record as a whole, including the affirmation by the defendant of the accuracy of the plea agreement and any other evidence before the court. See Sentencing Guideline § 6B1.4. Moreover and regardless of whether the factual stipulations are binding on the court, they are binding on the criminal defendant and government prosecutors. See, e.g., United States v. Martinez, 122 F.3d 421, 422-423 (7th Cir. 1997) (holding that factual stipulations in a plea agreement are binding while the plea agreement remains in force); see also United States v. Barrett, 173 F.3d 682, 684 (8th Cir. 1999) (holding that a criminal defendant may not challenge an application of the Sentencing Guidelines to which he agreed in a plea agreement); United States v. Lopez, 356 F.3d 463, 469 (2d Cir. 2004). As the Court observed in Granik: 62 [F]actual stipulations are bargaining chips in the hands of defendants. Indeed, virtually every provision of a plea agreement -- agreements not to argue for a downward or upward departure, to drop charges, to concede the defendant’s role in the offense -- is a bargaining chip in the hands of either the government or the defendant. Such bargaining chips can be exchanged for concessions from the other party only if they are enforceable. If defendants are not held to their factual stipulations, therefore, the government has no reason to make concessions in exchange for them … binding a defendant to factual stipulations regarding a crime requires only an understanding of the obvious: facts admitted in a plea agreement can, and usually will, be accepted by the sentencing court as true. 386 F.3d at 412-413. Accordingly, plaintiff’s self-serving distortions of the Record are wholly unsustainable. iii. The News’ Reports, Even if Read Within the Confines of the Federal Sentencing Guidelines, Are “Fair and True” for Purposes of the § 74 Analysis. As shown above and contrary to plaintiff’s argument, The News’ reporting is privileged without reliance on the concept of “relevant conduct,” thus removing the foundational basis of the plaintiff’s challenge to and the Trial Court erroneous interpretation of the accuracy of the reporting. In any event, by asking this Court to take the “relevant conduct” definitional bait (arguing that the phrase is a “legal term of art”), plaintiff seeks to impose on the media an improperly hypertechnical standard for reporting that has been expressly rejected by the New York judiciary (including, correctly, by the Trial Court in this case) and is antithetical to the liberal analysis the courts of this State apply to § 74 determinations. See, e.g., Gurda, supra (“Newspapers cannot be held to a standard of strict accountability for use of legal terms of art…”); see also Cholowsky, supra, 16 Misc.3d 1138A at *3. Plaintiff’s argument is thus defective on its face. In any event, the plaintiff’s and the Trial Court’s conclusions regarding the accuracy of The News’ reporting when read in the context of the Federal Sentencing Guidelines simply does not withstand scrutiny: by the very terms and policies of the Federal Sentencing Guidelines underlying the Company’s guilty plea, NAC effectively admitted to and took responsibility for conduct above and beyond the single charged instance to which it technically pleaded guilty. 63 As an organization, NAC was sentenced under Chapter 8 of the Guidelines. See Plea Agreement at paragraph 6. The Introductory Commentary to Chapter 8 sets forth the chapter’s general principals, providing in pertinent part (emphasis added): First, the court must, whenever practicable, order the organization to remedy any harm caused by the offense. The resources expended to remedy the harm should not be viewed as punishment, but rather as a means of making victims whole for the harm caused. * * * Third, the fine range for any other organization should be based on the seriousness of the offense and the culpability of the organization. The seriousness of the offense generally will be reflected by the greatest of the pecuniary gain, the pecuniary loss, or the amount in a guideline offense level fine table. Culpability generally will be determined by six factors that the sentencing court must consider. The four factors that increase the ultimate punishment of an organization are: (i) the involvement in or tolerance of criminal activity; (ii) the prior history of the organization; (iii) the violation of an order; and (iv) the obstruction of justice. The two factors that mitigate the ultimate punishment of an organization are: (i) the existence of an effective compliance and ethics program; and (ii) self-reporting, cooperation, or acceptance of responsibility. The Introductory Commentary to Part B of Chapter 8, concerning, among other things, remediation of the harm resulting from the criminal conduct, similarly provides in pertinent part that: As a general principle, the court should require that the organization take all appropriate steps to provide compensation to victims and otherwise remedy the harm caused or threatened by the offense. In the present case and in accordance with the above principles (and, indeed, the specific provisions of Guideline § 8B1.1), NAC in the Plea Agreement agreed to the entry of a “restitution order for the full amount of the victim’s loss, which is agreed to be $4,400,000.” Plea Agreement at ¶ 7. NAC’s culpability score was determined by the government to be “7,” enhanced by the government from an initial score of “5” on the basis of either condoned conduct or the willful ignorance of plaintiff, an enhancement with which NAC disagreed. See Plea Agreement at ¶ 13; see also Sentencing Guideline § 8C2.5(a) and § 8C2.5(b)(4). The government agreed to not assert a three point obstruction of justice increase. See Plea Agreement at ¶ 14; see also Sentencing Guideline § 8C2.5(e). Notably, under ¶ 15 of the Plea Agreement NAC received a 1 point decrease of the culpability score pursuant to Sentencing Guideline § 8C2.5(g)(3). This provision allows for such a reduction “[i]f the 64 organization clearly demonstrated recognition and affirmative acceptance of responsibility for its criminal conduct.” (Emphasis added.) As is made clear in the Application Notes to the chapter (specifically, Note 14), in order for a criminal defendant to receive a decrease under § 8C2.5(g), it must truthfully admit involvement not only in the charged offense, but also related conduct: Entry of a plea of guilty prior to the commencement of trial combined with truthful admission of involvement in the offense and related conduct ordinarily will constitute significant evidence of affirmative acceptance of responsibility under subsection (g) … . (Emphasis added). In this case, “related conduct” (also referenced in the Background notes to Sentencing Guideline § 1B1.3 concerning “relevant conduct”) was a term expressly used by Ms. Wylegala herself during the Plea Proceeding: THE COURT: All right. And, here, this referenced to more than just a single incident that was charged in the criminal information? MS. WYLEGALA: Well, there’s a reference to relevant conduct. The facts set forth here refer only to the single instance that is the criminal charge to which the Defendant corporation is pleading guilty to, but there certainly is--the investigation covered more than that one single charge and by agreement and after much consultation, the parties are agreed that the loss to the Government based upon similar and related conduct as is evidenced by what we are not going to prosecute further is the $4,400,000 lost to the United States Department of Defense. Plea Proceeding Transcript at pp. 46-47 (R. 239-240) (emphasis added). On the above, there can be no doubt that, when viewed in the precise context of the Federal sentencing Guidelines, The News’ reports of the Company having admitted to conduct beyond the single negotiated felony charge were, in all respects and contrary to the Trial Court’s conclusion, technically accurate. Against this, plaintiff merely argues that “relevant conduct” as it pertains to the Federal Sentencing Guidelines can include “unadmitted, unproven, uncharged and incompetent evidence,” “hearsay evidence,” “facts not proven beyond a reasonable doubt” and “acquitted and dismissed indictment counts.” Plaintiff’s Brief at pp. 29-30. Plaintiff’s argument is deficient, however, because it ignores a fundamental difference between the facts of this case and the facts of his cited authority. In this case NAC acknowledged its relevant conduct and specifically agreed to both an increase in the offense level and the enhanced sentence resulting therefrom; NAC also expressly agreed to the multi-million 65 dollar loss figure recited in the Plea Agreement and at no time during the Plea Proceeding did NAC or its counsel challenge the amount of the loss; most significantly, perhaps, in availing itself of the 1 point decrease in its culpability score, NAC by the terms of the Federal Sentencing Guidelines admitted to involvement in not only the charged offense but also to the “similar and related conduct” which resulted in a $4.4 million dollar loss to the government. By contrast, plaintiff’s authority presents cases in which the criminal defendant objected to and disagreed with the enhanced sentence resulting from the increased offense level as occasioned by the “relevant conduct.” Simply stated, this is not, as plaintiff would have the Court believe, a case in which the prosecutor and sentencing court imposed on the criminal defendant a sentence on the basis of unproven “relevant conduct” with which the criminal defendant disagreed. This is a case in which the parties agreed to, and the Court imposed on NAC, a sentence based on conduct acknowledged by NAC and the United States Attorney: “the investigation covered more than that one single charge and by agreement and after much consultation, the parties are agreed that the loss to the Government based upon similar and related conduct as is evidenced by what we are not going to prosecute further is the $4,400,000 lost to the United States Department of Defense.” Plea Proceeding Transcript at pp. 46-47 (R. 239-240). There can be no question not only that The News’ reports are fair and true for purposes of the § 74 analysis, but also that the Trial Court’s was incorrect in opining that the reports were in any way technically inaccurate or misleading in this respect. IV. PLAINTIFF’S CROSS-MOTION WAS PROPERLY DISMISSED BECAUSE THE EDITORIAL IS NON-ACTIONABLE PROTECTED OPINION AND THE FACTUAL STATEMENTS IN THE ARTICLES AND EDITORIAL ARE ABSOLUTELY PRIVILEGED. As set forth above, the factual statements in the Articles and Editorial are privileged and non- actionable under § 74, thus defeating plaintiff’s cross-motion to dismiss defendant’s § 74 defense and rendering moot those aspects of plaintiff’s cross-motion that pertain to falsity. Insofar as plaintiff’s claims and cross-motion concerning the Editorial are concerned, it is well settled that “expressions of opinion, whether false or not, libelous or not, are constitutionally protected 66 and may not be the subject of private damage actions.” Steinhilber v. Alphonse, 68 N.Y.2d 283, 286, 508 N.Y.S.2d 901, 901 (1986), quoting Rinaldi, supra, 42 N.Y.2d at 380, 397 N.Y.S.2d at 950; and see Kuan Sing Enterprises, Inc. v. T.W. Wang, Inc., 86 A.D.2d 549, 446 N.Y.S.2d 76 (1st Dep’t 1982), aff’d, 58 N.Y.2d 708, 458 N.Y.S.2d 544 (1982). This is so because “[u]nder the First Amendment, there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.” Gertz v Robert Welch, Inc., 418 U.S. 323, 339-340, 94 S.Ct. 2997, 3007 (1974). In this case, the Editorial is certainly not false: indeed, the ‘non-opinion’ content within it is as “fair and true” as the prior privileged reporting it invokes; and the non-factual statements within it are constitutionally protected opinion based on accurately stated and reported facts. It is, therefore, in its entirety not actionable. See Finnerty Affidavit at ¶¶ 23-189 (R.107-163) and the attached Schedule in which each challenged factual statement and each challenged non-factual statement within the November 8, 2007 Editorial is analyzed in detail. Whether a particular statement constitutes an opinion or an objective fact is a question of law for the Court to decide. See, e.g., Mann v. Abel, supra, 10 N.Y.3d 271, 276, 856 N.Y.S.2d 31 (2008) cert. denied, 555 U.S. 1170, 129 S.Ct. 1315, 173 L.Ed.2d 584 (2009), citing Rinaldi, supra, 42 N.Y.2d at 381; see also, Millus v. Newsday, Inc., 89 N.Y.2d 840, 842, 652 N.Y.S.2d 726 (1996), cert. denied, 520 U.S. 1144, 117 S.Ct. 1313, 137 L.Ed.2d 476 (1997); and see, Jessel Rothman P.C. v. Sternberg, 207 A.D.2d 438, 439, 615 N.Y.S.2d 748, 749 (2d Dep’t 1994), citing Aronson v Wiersma, 65 N.Y.2d 592, 593, 493 N.Y.S.2d 1006, 1007 (1985); and see Balderman v. American Broadcasting Companies, Inc., 292 A.D.2d 67, 72, 738 N.Y.S.2d 462, 466 (4th Dep’t 2002). Thus, the Court of Appeals repeatedly has held that allegedly defamatory matter must be read in context to test its effect on the average reader and to determine whether it would be read as opinion (as opposed to fact). Immuno A.G., supra, 77 N.Y.2d at 250, 566 N.Y.S.2d at 914. In making this determination, the Court must not isolate particular phrases; rather, it must consider the publication as a whole. Id. 67 In determining whether a statement is protected opinion, the context is particularly important because it is only within the “larger context in which the statements [are] published, including the nature of the particular forum” (Brian v. Richardson, 87 N.Y.2d 46, 51, 637 N.Y.S.2d 347, 351 (1995)), as well as from the report’s full content, tone and apparent purpose (see Steinhilber, supra, 68 N.Y.2d at 293, 508 N.Y.S.2d at 906; Goetz v. Kunstler, 164 Misc.2d 557, 561, 625 N.Y.S.2d 447, 451 (Sup. Ct. N.Y. Co. 1995)), that the court can determine whether the reasonable reader would believe the statements conveyed facts about the libel plaintiff or were merely non-actionable expressions of the author’s opinion. See Immuno A.G., 77 N.Y.2d at 254, 566 N.Y.S.2d at 917 (citing Steinhilber, supra); see also, Dancer v. Bergman, 246 A.D.2d 573, 668 N.Y.S.2d 213 (2d Dep’t 1998), appeal dismissed, 92 N.Y.2d 876, 677 N.Y.S.2d 781 (1998) (editorial concerning need for additional oversight of harness racing industry, in light of one particular harness racer’s apparent misfeasance, held to be opinion since reasonable reader, when considering the editorial as a whole--including its location in the paper and general tenor--would conclude that it was the author’s opinion). For this purpose, “context” includes the placement of the article or report within the larger publication. In this case, the Editorial appeared on The Buffalo News’ editorial page, under the banner headline “Opinion” and the subhead “EDITORIALS” (R. 445), a contextual placement that creates a strong presumption that material it contained is opinion, as opposed to fact. As the Court of Appeals stated in Brian v. Richardson, supra: In this case, the statements in dispute were made in an article that was published on the Op Ed page of a newspaper. Like the “letters to the editor” section in which the Immuno publication appeared, the Op Ed page is a forum traditionally reserved for the airing of ideas on matters of public concern. Indeed, the common expectation is that the columns and articles published on a newspaper’s Op Ed sections will represent the viewpoints of their authors and, as such, contain considerable hyperbole, speculation, diversified forms of expression and opinion. Thus, the “broader context” in which [the editorial] was published provided some signals to the reader that its contents were expressions of opinion. 87 N.Y.2d at 53, 637 N.Y.S.2d at 351; accord, Cancer Action N.Y. v. St. Lawrence County Newspapers Corp, 12 A.D.3d 880, 881, 784 N.Y.S.2d 727, 729 (3d Dep’t 2004); Pinero v. N.Y.P. Holdings, Inc., 17 Misc. 3d 1102A, 851 N.Y.S.2d 60 (Sup. Ct. New York Co. 2007). 68 In order to further help distinguish between opinion and fact, the Court of Appeals has provided the following factors to be considered: (1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to signal … readers or listeners that what is being read or heard is likely to be opinion, not fact. Brian v. Richardson, 87 N.Y.2d 46, 51, 637 N.Y.S.2d 347 (1995), quoting Gross v. New York Times Co., 82 N.Y.2d 146, 153, 603 N.Y.S.2d 813 (1993), quoting Steinhilber, supra, 68 N.Y.2d at 292 [internal quotation marks omitted]). Within this governing construct and taking into account the context and placement of the published statements, the key issue to decide with regard to whether an opinion is actionable is if the challenged statements reasonably appear to contain “assertions of objective fact.” Immuno A.G. v. Moor-Jankowski, supra, 77 N.Y.2d at 243). The issue of whether an objective fact is asserted is resolved by deciding if the statement is verifiable as true or false. The approach involved in making this decision is to look at the meaning of the statement by examining the language used in its immediate context and in its full context, and to evaluate the purpose of the whole communication: if a statement is not verifiable, then a plaintiff cannot prove it false, and the statement cannot be actionable (see generally, Milkovich v. Lorain Journal Co., 65 Ohio App.2d 143, 416 N.E.2d 662, cert. denied, 449 U.S. 966, 101 S.Ct. 380, 66 L.Ed.2d 232 (1980)). Applying these principles, many courts have found that statements that call into question the decency, morals, ethics and honesty of a person or entity or question whether the public was taken advantage of (compare Amended Complaint at ¶¶ 19.U., V., X., Y., Z. and AA. (R. 25-26)) are inherently subjective and unverifiable, and are therefore non-actionable statements of opinion. See, e.g., Hollander v. Cayton, 145 A.D.2d 605, 606, 536 N.Y.S.2d 790, 791 (2d Dep’t 1988) (statements describing physician as “immoral” and “unethical” held to be non-actionable opinion); Balderman v. American Broadcasting Companies, Inc., supra, 292 A.D.2d at 72, 738 N.Y.S.2d at 467 (statements that plaintiff doctor “wasn’t representing where he had finished” and was “not being upfront” with patients with regard to a surgical 69 scorecard published by the New York State Department of Health held to be non-actionable opinion); Jessel Rothman v. Sternberg, supra, 207 A.D.2d at 439, 615 N.Y.S.2d at 749 (statement accusing plaintiff attorney of “unethical business practices” held to be non-actionable opinion); Pinero v. N.Y.P. Holdings, Inc., supra, (statement in Op-Ed piece questioning how plaintiff and an associate “got away scot free for their involvement in the tax scandal, yet others were ferociously prosecuted for their involvement,” particularly when read in the context of an underlying article, held to be non-actionable opinion.); Polish American Immigration Relief Committee, Inc., v. Relax, 189 A.D.2d 370, 596 N.Y.S.2d 756 (1st Dep’t 1993) (statements contained in an interview and a letter published in a Polish magazine asserting that plaintiff, a Polish immigrant relief organization, was a “madhouse” made up of “false do-gooders” and “thieves who should have been put to prison long ago” held to be constitutionally protected opinion). The Articles in this case, which served the purpose of alerting the public to serious issues of public interest and concern based on a federal criminal investigation, guilty plea to felony dishonesty and related conduct of a local Company that cost the government millions of dollars, clearly warranted the publication of the Editorial opinion of the newspaper. See Walter Affidavit at ¶¶ 11-13 (R. 559-560). And there can be no question that the Editorial was clearly the expression of the institutional opinion of the newspaper as expressed by its author. See Walter Affidavit at ¶ 19 (R. 561); Finnerty Affidavit at ¶ 163 (R. 154): • It was published on the editorial page of The News, a space reserved for opinion commentary. See Walter Affidavit at ¶¶ 8, 11 (R. 559, 560); see also R. 445; • A banner headline (“Opinion”) and subheadline (“Editorials”) proclaimed the nature and intent of its content, and it was surrounded by other articles expressing both institutional and individual opinions. R. 445; • The content, context and tone of the Editorial -- which questioned why, given the deplorable conduct of NAC and the federal government’s investigation and prosecution thereof, no Company officials faced any jail time in a case described by federal prosecutors as involving “the largest criminal recovery, in terms of dollars, in the history 70 of Western New York” -- provide clear indication that the Editorial represented the newspaper’s opinion. See Walter Affidavit at ¶ 19 (R. 561); Finnerty Affidavit at ¶¶ 163- 189 (R. 154-163); and • Its concluding paragraphs express the newspaper’s disappointment in the conduct of the Company and its operators, conduct characterized in precisely the types of terminology courts routinely have protected. See cases cited supra. Indeed, while the Editorial expressly references and includes true and accurate facts, previously reported in the Articles and restated in the Editorial for the purpose of demonstrating a basis for the opinions asserted and questions raised, it is replete with expressions that are so obviously subjective that they could only be construed by the reasonable reader as statements of opinion: they call into the question the decency, morals, ethics, honesty and patriotism of a Company that admittedly defrauded the government, admitted that the government lost $4,400,000 as a result of its conduct, and agreed to pay the government more than $28,000,000 in restitution, fines, penalties and forfeitures. The Editorial accurately within the parameters of the § 74 privilege recited the facts on which it was based (thereby giving readers a basis to question or disagree with the newspaper’s opinion) (see Walter Affidavit at ¶ 16 (R. 560); Finnerty Affidavit at ¶ 169 (R. 157-158); and see the attached Schedule) and manifested its author’s sincerely held opinion as a fair comment on newsworthy events (see Walter Affidavit at ¶ 19 (R. 561). Accordingly, the Editorial is absolutely privileged and not actionable under both the statutory and opinion privileges. CONCLUSION On the applicable legal principles discussed above, and on the facts and evidence in the Record, this Court should determine that The Buffalo News’ reports are privileged pursuant to § 74 and/or are otherwise non-actionable opinion, should affirm the Trial Court’s granting of summary judgment to The News’ dismissing the Amended Complaint in its entirety on the merits and with prejudice, and should affirm the dismissal of the plaintiff’s Cross-Motion in its entirety as well. DATED: June 6, 2012 TO: John J. Walsh, Esq. Michael Plumb, Esq. Karim A. Abdulla Joseph M. Finnerty, Esq. Karim A. Abdulla, Esq. 1100 M&T Center Three Fountain Plaza Buffalo, New York 14203 Telephone: (716) 566-1471 Attorneys for Defendant The Buffalo News, Inc. CARTER, LEDYARD & MILBURN, LLP 2 Wall Street New York, NY 10005 Telephone: (212) 732-3200 Richard T. Sullivan, Esq. HARRIS BEACH PLLC 726 Exchange Street, Suite 1000 Buffalo, NY 14210 Telephone: (716) 200-5050 Attorneys for Plaintiff SCHEDULE S- 1 SC H E D U L E Su m m ar y C ha rt of F in ne rty A ff id av it C on te nt s ( R . 1 07 -1 63 ) C or re la tin g th e C ha lle ng ed S ta te m en ts w ith th e C on te nt s o f t he R ep or te rs ’ S ou rc e M at er ia l Th e O ct ob er 2 6, 2 00 7 A rti cl e C ha lle ng ed S ta te m en t Ex am pl es o f O ff ic ia l P ro ce ed in gs a s S ou rc e “O rc ha rd Pa rk co m pa ny ad m its ch ea tin g U .S . m ili ta ry ” [H ea dl in e] (A m en de d C om pl ai nt ¶ 19 A .) “a dm its c he at in g” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 (R . 2 86 ) ( w hi ch st at es th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) ; • An d se e ne xt C ha rt en try im m ed ia te ly b el ow . “A lo ca l a ir ca rg o co m pa ny th at d el iv er s fo od , m ed ic in e an d m ili ta ry e qu ip m en t to s ol di er s in I ra q to ok a g ui lty p le a in B uf fa lo ’s F ed er al C ou rt on T hu rs da y, ad m itt in g it ch ea te d th e U .S . D ef en se D ep ar tm en t o ut o f m ill io ns o f d ol la rs .” (A m en de d C om pl ai nt ¶ 1 9B .) “g ui lty p le a” “ ad m itt in g it ch ea te d” • Fi nn er ty A ff id av it at ¶ ¶ 42 -7 1 ( R . 1 14 -1 25 ); se e al so t he P le a A gr ee m en t at ¶ 1 ( R . 2 86 ) (w hi ch s ta te s th at C om pa ny i s pl ea di ng g ui lty t o 18 U .S .C . 10 01 (a )( 2) : kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); • Se e al so , e .g ., Pl ea A gr ee m en t a t ¶ 1 5 (R . 2 91 ) (w he re in th e C om pa ny r ec ei ve d a on e- po in t de cr ea se in it s cu lp ab ili ty s co re p ur su an t t o Fe de ra l S en te nc in g G ui de lin e §8 C2 .5 (g )( 3) . In o rd er to S- 2 re ce iv e su ch a c re di t, th e cr im in al d ef en da nt m us t n ot o nl y de m on st ra te “ … a ff irm at iv e ac ce pt an ce o f re sp on si bi lit y fo r its c rim in al c on du ct ” (§ 8C 2. 5( g) (3 )) , b ut a ls o m us t m ak e a “t ru th fu l a dm is si on o f in vo lv em en t i n th e of fe ns e an d re la te d co nd uc t” (A pp lic at io n N ot es , § 8 C 2. 5( g) ). “a dm itt in g it ch ea te d” “ m ill io ns o f d ol la rs ” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 45 -4 6, 4 6- 47 , 5 0- 51 (R . 2 38 -2 44 ) ( N A C a gr ee s i n op en c ou rt th at th e C om pa ny d id , i n fa ct , d o w ha t i s cl ai m ed a nd th at th e lo ss to th e go ve rn m en t a s a re su lt of it s c on du ct is $ 4, 40 0, 00 0) ; • Fi nn er ty A ff id av it at ¶ 1 56 (R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3 /6 /2 00 8 pr oc ee di ng s at p . 3 6 (R . 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at “ th e ag re ed -u po n lo ss to th e go ve rn m en t t ha t is a gr ee d by u s, ag re ed b y N at io na l A ir Ca rg o, a nd a gr ee d by th e ag en ci es in vo lv ed is 4 .4 m ill io n. A nd th at ’s - th at a m ou nt w ill r ec om pe ns e th e go ve rn m en t f or th e su bs et o f ov er ch ar ge s th at w e fe lt w er e pa rt of th e cr im in al c on du ct .” ); • F. W hi tte n Pe te rs , N A C ’s “ N at io na l C ou ns el ” to J ud ge S kr et ny d ur in g pl ea p ro ce ed in g: “ W e ag re e th at th e 4. 4 [m ill io n do lla rs ] i s th e lo ss to th e vi ct im , Y ou r H on or … .” S ee T ra ns cr ip t o f P le a Pr oc ee di ng a t p p. 5 0- 51 (R . 2 43 -2 44 ). “F ed er al P ro se cu to rs a nd t he c om pa ny em ph as iz ed t ha t th e cr im es u nc ov er ed in vo lv ed m ili ta ry s hi pm en ts w ith in t he co nt in en ta l U ni te d St at es .” (A m en de d C om pl ai nt ¶ 1 9C .) “c ri m es ” • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) ( st at in g th at “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is A gr ee m en t i s in s at is fa ct io n of ( a) a ny a nd a ll fe de ra l of fe ns es c om m itt ed fo r th e pe ri od b et w ee n Ja nu ar y 19 99 to a nd in cl ud in g Ap ri l 2 00 5… ”) ( em ph as is ad de d) ; • Fi nn er ty A ff id av it at ¶ 6 1 (R . 1 20 ); se e al so t he T ra ns cr ip t o f Pl ea P ro ce ed in g at p . 2 6 (R . 21 9) ( in w hi ch t he C ou rt, i n di sc us si ng t he f el on y ch ar ge , e xp re ss ly r ef er s to “ a fa ct ua l ba si s th at m ak es re fe re nc e to a m uc h m or e ex pa ns iv e se ri es o f t ra ns ac tio ns ”) (e m ph as is a dd ed ); S- 3 • Fi nn er ty A ff id av it at ¶ 6 5 (R . 1 21 -1 22 ); se e al so th e Tr an sc rip t o f 1 0/ 25 /2 00 7 Pl ea P ro ce ed in g at p p. 4 6- 47 (R . 2 39 -2 40 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at “ th e in ve st ig at io n co ve re d m or e th an t ha t on e si ng le c ha rg e an d by a gr ee m en t an d af te r m uc h co ns ul ta tio n, t he p ar tie s ar e ag re ed th at th e lo ss to th e G ov er nm en t b as ed u po n si m ila r an d re la te d co nd uc t a s is e vi de nc ed b y w ha t w e ar e no t g oi ng to p ro se cu te fu rt he r is th e $4 ,4 00 ,0 00 lo st to th e U ni te d St at es D ep ar tm en t o f D ef en se ”) (e m ph as is a dd ed ); “w ith in th e co nt in en ta l U ni te d St at es ” • Fi nn er ty A ff id av it at ¶ ¶ 44 , 7 5 (R . 1 14 -1 15 , 1 25 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) (s ta tin g th at “ Th e pa rti es u nd er st an d th at th e go ve rn m en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e co nt in en ta l U ni te d St at es (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ); • Fi nn er ty A ff id av it at ¶ 7 6 (R . 1 26 ); se e al so t he T ra ns cr ip t o f Pl ea P ro ce ed in g at p . 4 3 (R . 23 6) (i n w hi ch th e C ou rt em ph as iz ed “ Th e ca ve at o r t he li m ita tio n he re o n be ha lf of th e G ov er nm en t is th at th e pa rti es s et fo rth a n un de rs ta nd in g th at th e G ov er nm en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e U ni te d St at es … , a nd n ot a ny ot he r re la te d ac tiv ity , so o ut si de t he t er rit or ia l U ni te d St at es i s no t w ith in t he a m bi t of t hi s pl ea ag re em en t a s i t i nc lu de d th e in ve st ig at io n. ”) ; • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t p. 6 3 (R . 25 6) ( in w hi ch t he U ni te d St at es A tto rn ey s ta te s in ve st ig at io n an d th e fe de ra l c rim in al o ffe ns es s ho w n in th e do cu m en ts re la te to N A C de liv er ie s “w ith in th e co nt in en ta l U ni te d St at es ” an d th at “ th e in ve st ig at io n di d no t c ov er o ut si de th e U ni te d St at es .” ); • Fi nn er ty A ff id av it at ¶ 7 7 (R . 1 26 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 4 3- 44 (R . 23 6- 23 7) ( in w hi ch N A C ’s “ N at io na l C ou ns el ,” M r. Pe te rs , a ck no w le dg ed t ha t w hi le i nv es tig at io n co ul d ha ve in cl ud ed C om pa ny a ct iv iti es a br oa d, h e w an te d “m ak e su re th at e ve ry bo dy u nd er st oo d th at th e G ov er nm en t h as n ot sp en t i ts fo cu s o n ou ts id e U .S . a ct iv iti es .” ). S- 4 “A cc or di ng to co ur t pa pe rs , th e co m pa ny r ep ea te dl y ov er ch ar ge d th e D ef en se D ep ar tm en t fo r m ili ta ry sh ip m en ts w ith in th e U ni te d St at es fr om e ar ly 1 99 9 un til A pr il 20 05 .” (A m en de d C om pl ai nt ¶ 1 9D .) “r ep ea te dl y ov er ch ar ge d” • Fi nn er ty A ff id av it at ¶ 6 5 (R . 1 21 -1 22 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 4 6- 47 (R . 2 39 -2 40 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at “ th e in ve st ig at io n co ve re d m or e th an th at o ne s in gl e ch ar ge a nd b y ag re em en t a nd a fte r m uc h co ns ul ta tio n, th e pa rt ie s ar e ag re ed th at th e lo ss to th e G ov er nm en t b as ed u po n si m ila r an d re la te d co nd uc t a s is e vi de nc ed b y w ha t w e ar e no t go in g to p ro se cu te f ur th er i s th e $4 ,4 00 ,0 00 l os t to t he U ni te d St at es D ep ar tm en t of D ef en se .” (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 1 56 ( R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3/ 6/ 20 08 p ro ce ed in gs a t p p. 36 , 3 8 (R . 3 56 , 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at th is is a c as e in vo lv in g “i n ve ry si m pl is tic te rm s, ov er bi lli ng o f t he g ov er nm en t” a nd th at “ th e ag re ed -u po n lo ss to th e go ve rn m en t t ha t is a gr ee d by u s, ag re ed b y N at io na l A ir C ar go , a nd a gr ee d by th e ag en ci es in vo lv ed in 4 .4 m ill io n. A nd th at ’s - th at a m ou nt w ill re co m pe ns e th e go ve rn m en t f or th e su bs et o f ov er ch ar ge s th at w e fe lt w er e pa rt of th e cr im in al c on du ct .” ) ( em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶ ¶ 4, 4 (g ) a nd 6 (R . 1 76 -1 79 ) ( se tti ng fo rth th e fa ct th at A lf’ s C om pa ny , N A C , re ce iv ed fo r t he p er io d of Ja nu ar y 1, 1 99 9 th ro ug h M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in p ay m en ts fr om th e fe de ra l go ve rn m en t, th at o f th at a m ou nt , “i t is a lle ge d $1 3, 87 0, 00 0 w as r ec ei ve d by N A C i n co nn ec tio n to f al se s ta te m en ts r el at in g to t he s er vi ce s th at N A C p ro vi de d” a nd t ha t su ch f al se st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; “w ith in th e U ni te d St at es ” • Fi nn er ty A ff id av it at ¶ ¶ 44 , 7 5 (R . 1 14 -1 15 , 1 25 ); se e al so th e Pl ea A gr ee m en t at ¶ 2 (R . 2 87 ) (s ta tin g th at “ Th e pa rti es u nd er st an d th at th e go ve rn m en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e co nt in en ta l U ni te d St at es (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ); “1 99 9 un til A pr il 20 05 ” • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) ( st at in g th at “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is A gr ee m en t i s in s at is fa ct io n of ( a) a ny a nd a ll fe de ra l of fe ns es c om m itt ed fo r th e pe ri od b et w ee n Ja nu ar y 19 99 to a nd in cl ud in g Ap ri l 2 00 5… ”) ( em ph as is ad de d) ; S- 5 • Fi nn er ty A ff id av it at ¶ 5 5 (R . 1 18 ); se e al so t he P le a A gr ee m en t at ¶ 22 ( R . 2 94 ) (w hi ch sp ec ifi ca lly r ef er s to t he d is m is sa l of c ha rg es e nc om pa ss ed w ith in t he c on du ct u nd er ly in g th e pl ea ag re em en t an d its “ gl ob al s et tle m en t” a nd s pe ci fie d “… a ny o th er c rim in al o ff en se i nv ol vi ng o r re la te d to th e im pr op er s ub st itu tio n of tr uc k se rv ic e or a ir se rv ic e or th e fa ls ifi ca tio n of d el iv er y da te s fo r t he p er io d Ja nu ar y 19 99 to A pr il 20 05 … .” ) ( em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 1 00 (R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 (R . 2 97 ) ( “T he go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es n or it s pr es en t o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny f ed er al cr im in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b as ed up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ). “M ill io ns o f do lla rs i n in fla te d bi lls w er e su bm itt ed to th e go ve rn m en t.” (A m en de d C om pl ai nt ¶ 1 9E .) “M ill io ns o f d ol la rs in in fla te d bi lls ” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 4 5- 46 , 46 -4 7, 5 0- 51 ( R . 23 8- 24 0, 2 43 -2 44 ) (N A C a gr ee s in o pe n co ur t th at t he l os s to t he go ve rn m en t a s a re su lt of it s r el ev an t c on du ct is $ 4, 40 0, 00 0, in cl ud in g, sp ec ifi ca lly a t p p. 4 6- 47 w he re th e U ni te d St at es A tto rn ey st at es th at “ th e in ve st ig at io n co ve re d m or e th an th at o ne si ng le c ha rg e an d by a gr ee m en t an d af te r m uc h co ns ul ta tio n, t he p ar tie s ar e ag re ed t ha t th e lo ss t o th e G ov er nm en t ba se d up on si m ila r a nd re la te d co nd uc t a s is e vi de nc ed b y w ha t w e ar e no t g oi ng to p ro se cu te fu rt he r is th e $4 ,4 00 ,0 00 lo st to th e U ni te d St at es D ep ar tm en t o f D ef en se .” ) ( Em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 1 56 ( R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3/ 6/ 20 08 p ro ce ed in gs a t p p. 34 , 3 6 (R . 3 56 , 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at th is is a c as e in vo lv in g “i n ve ry si m pl is tic te rm s, ov er bi lli ng o f t he g ov er nm en t” a nd th at “ th e ag re ed -u po n lo ss to th e go ve rn m en t t ha t is a gr ee d by u s, ag re ed b y N at io na l A ir C ar go , a nd a gr ee d by th e ag en ci es in vo lv ed in 4 .4 m ill io n. A nd th at ’s - th at a m ou nt w ill re co m pe ns e th e go ve rn m en t f or th e su bs et o f ov er ch ar ge s th at w e fe lt w er e pa rt of th e cr im in al c on du ct .” ) ( em ph as is a dd ed ); S- 6 • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt at ¶ ¶ 4, 4 (g ) an d 6 (R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) . “T he t ot al d ol la r am ou nt o f th e th ef ts , an d th e to ta l am ou nt of bu si ne ss N at io na l A ir C ar go do es w ith th e go ve rn m en t w as n ot d is cl os ed .” (A m en de d C om pl ai nt ¶ 1 9F .) “t he fts ” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t ¶ 1 (R . 2 86 ) (w hi ch s ta te s th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) ; • Fi nn er ty A ff id av it at ¶ ¶ 61 -7 1 (R . 1 20 -1 25 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 26 -2 8 (R . 21 9- 22 1) ( in w hi ch t he C ou rt es ta bl is he s, an d N A C a ck no w le dg es , b ot h th e “e xp an si ve se rie s o f t ra ns ac tio ns ” an d th e kn ow in g an d w ill fu l s ub m is si on o f a m at er ia lly fa ls e st at em en t); • Se e al so F in ne rty A ff id av it at ¶ 1 1 (R . 1 03 -1 04 ); an d se e D ep ar tm en t o f J us tic e Pr es s R el ea se , da te d M ar ch 2 6, 2 00 8 (R . 4 36 ) (in w hi ch g ov er nm en t re pr es en ta tiv es s ta te d: “ [t] od ay ’s s et tle m en t de m on st ra te s th e U ni te d St at es ’ de te rm in at io n to e ns ur e th at c on tra ct or s do in g bu si ne ss w ith o ur m ili ta ry d ep ar tm en ts d o no t d iv er t r es ou rc es n ee de d fo r t he w ar e ff or t i nt o th ei r o w n po ck et s th ro ug h fr au d, ” an d “[ t]h is f el on y co nv ic tio n, w hi ch i nc lu de s th e la rg es t cr im in al a nd c iv il pe na lti es e ve r im po se d in th e W es te rn D is tri ct o f N ew Y or k, m ak es it c le ar th at d is ho ne st c or po ra te e nt iti es a re n ot im m un e fr om b ea rin g su bs ta nt ia l co ns eq ue nc es a ris in g fr om t he ir de lib er at e ef fo rts t o ch ea t th e A m er ic an p ub lic .” ); S- 7 • An d se e W eb st er ’s T hi rd N ew I nt er na tio na l D ic tio na ry , V ol .II I (1 98 1) a t p. 2 36 9 w hi ch de fin es “ th ef t” a s “ th e ta ki ng o f p ro pe rty u nl aw fu lly (a s b y ro bb er y, e m be zz le m en t, fr au d… )” . “C om pa ny of fic ia ls sa id th e ill eg al ac tiv ity o nl y in vo lv ed a s m al l p or tio n of i ts b us in es s , an d th e go ve rn m en t cl ai m ed th at th e co m pa ny st op pe d ch ea tin g th e go ve rn m en t i n 20 05 .” (A m en de d C om pl ai nt ¶ 1 9G .) “i lle ga l a ct iv ity o nl y in vo lv ed a sm al l p or tio n of it s b us in es s” • H er be ck A ff id av it at ¶ 2 1 an d fo ot no te 2 ( R . 5 55 ) r eg ar di ng h is re ce ip t o f s ta te m en t o n be ha lf of N A C ; a nd s ee R . 5 31 ( “N A C S ta te m en t” s en t O ct ob er 2 5 fr om N A C c ou ns el to M r. H er be ck b y el ec tro ni c m ai l s ta tin g: “ W e ar e pl ea se d th at w e ha ve a gr ee d to re so lv e a le ga l m at te r r el at ed to e ve nt s th at o cc ur re d w ith in a sm al l s eg m en t o f o ur b us in es s y ea rs a go .” ) ( em ph as is a dd ed .); “s to pp ed c he at in g th e go ve rn m en t i n 20 05 ” • se e ab ov e en tri es in di ca tin g tim ef ra m e of c on du ct b et w ee n 19 99 -2 00 5. “T he p le a de al c al ls f or N at io na l A ir C ar go t o pa y a $7 .3 7 m ill io n fin e fo r vi ol at io n of th e Fa ls e C la im s A ct , $1 3. 2 m ill io n in ot he r fin es an d re st itu tio n an d $7 .4 2 m ill io n in fo rf ei tu re s t o th e go ve rn m en t.” (A m en de d C om pl ai nt ¶ H .) “$ 7. 37 m ill io n fin e fo r vi ol at io n of t he F al se C la im s A ct , $1 3. 2 m ill io n in o th er f in es a nd re st itu tio n, $ 7. 42 m ill io n in fo rf ei tu re s” • Fi nn er ty A ff id av it at ¶ ¶ 57 , 9 4- 95 (R . 1 18 -1 20 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 3 1, 3 4- 35 , 3 9 (R . 2 86 , 2 98 -3 01 ) ( w he re by N A C a gr ee d to p ay $ 13 .2 m ill io n in re st itu tio n an d pe na lti es o n th e fe lo ny c ou nt , $ 7. 37 1 m ill io n on t he F al se C la im s A ct c la im s an d $7 .4 29 m ill io n on t he f or fe itu re cl ai m ); • Fi nn er ty A ff id av it at ¶ 1 0 (R . 1 03 ); se e al so th e Tr an sc rip t P le a Pr oc ee di ng a t p p. 6 6- 69 ( R. 25 9- 26 2) (I d. ). S- 8 Th e O ct ob er 2 7, 2 00 7 A rti cl e “A n O rc ha rd Pa rk C om pa ny th at ch ea te d th e U .S . D ef en se D ep ar tm en t ou t of m ill io ns o f do lla rs b ec am e an is su e Fr id ay in th e ra ce fo r E rie C ou nt y ex ec ut iv e. ” (A m en de d C om pl ai nt ¶ 1 9I .) “c he at ed ” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 (R . 2 86 ) ( w hi ch s ta te s th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) ; • Fi nn er ty A ff id av it at ¶ ¶ 61 -7 1 (R . 1 20 -1 25 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 26 -2 8 (R . 21 9- 22 1) ( in w hi ch t he C ou rt es ta bl is he s, an d N A C a ck no w le dg es , b ot h th e “e xp an si ve se rie s o f t ra ns ac tio ns ” an d th e kn ow in g an d w ill fu l s ub m is si on o f a m at er ia lly fa ls e st at em en t); • Se e al so , B la ck ’s L aw D ic tio na ry (S t. Pa ul , M in ne so ta : T ho m so n/ W es t 8 th E di tio n 19 99 ) ( 2n d R ep rin t 2 00 7) , p . 2 52 (w hi ch d ef in es “ ch ea tin g” a s “ Th e fr au du le nt o bt ai ni ng o f a no th er ’s p ro pe rty b y m ea ns o f a fa ls e sy m bo l o r t ok en , o r b y ot he r i lle ga l p ra ct ic es . … th e in te nt io na l o bt ai ni ng o f b ot h th e po ss es si on a nd o w ne rs hi p of m on ey … by m ea ns o f m is re pr es en ta tio ns , w ith th e in te nt to d ef ra ud .” ); “m ill io ns o f d ol la rs ” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t S- 9 pp . 4 5- 46 , 46 -4 7, 5 0- 51 ( R . 23 8- 24 0, 2 43 -2 44 ) (N A C a gr ee s in o pe n co ur t th at t he l os s to t he go ve rn m en t a s a re su lt of it s r el ev an t c on du ct is $ 4, 40 0, 00 0, in cl ud in g, sp ec ifi ca lly a t p p. 4 6- 47 w he re th e U ni te d St at es A tto rn ey st at es th at “ th e in ve st ig at io n co ve re d m or e th an th at o ne si ng le c ha rg e an d by a gr ee m en t an d af te r m uc h co ns ul ta tio n, t he p ar tie s ar e ag re ed t ha t th e lo ss t o th e G ov er nm en t ba se d up on si m ila r a nd re la te d co nd uc t a s is e vi de nc ed b y w ha t w e ar e no t g oi ng to p ro se cu te fu rt he r is th e $4 ,4 00 ,0 00 lo st to th e U ni te d St at es D ep ar tm en t o f D ef en se .” ) ( em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶ ¶ 4, 4 (g ) a nd 6 (R . 1 76 -1 79 ) ( se tti ng fo rth th e fa ct th at A lf’ s C om pa ny , N A C , re ce iv ed fo r t he p er io d of Ja nu ar y 1, 1 99 9 th ro ug h M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in p ay m en ts fr om th e fe de ra l go ve rn m en t, th at o f th at a m ou nt , “i t is a lle ge d $1 3, 87 0, 00 0 w as r ec ei ve d by N A C i n co nn ec tio n to f al se s ta te m en ts r el at in g to t he s er vi ce s th at N A C p ro vi de d” a nd t ha t su ch f al se st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) . “U nd er th e te rm s of a p le a de al , w hi ch sp ar es A lf an d ot he r co m pa ny of fic ia ls f ro m s er vi ng a ny j ai l tim e, N at io na l A ir C ar go ad m itt ed th at it ch ea te d th e D ef en se D ep ar tm en t by ov er ch ar gi ng f or d el iv er ie s of m ili ta ry su pp lie s w ith in th e co nt in en ta l U ni te d St at es .” (A m en de d C om pl ai nt ¶ 1 9J .) “s pa re s A lf an d ot he r c om pa ny o ff ic ia ls fr om se rv in g an y ja il tim e” • Fi nn er ty A ff id av it at ¶ 1 00 (R . 1 32 -1 33 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 6 2- 63 ( R . 2 55 -2 56 ) (in w hi ch th e U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , i ts a ff ili at ed co m pa ni es , a nd th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s to w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r f or m er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s o f N at io na l A ir C ar go o r its a ff ili at ed c om pa ni es w ill b e pr oc es se d by m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r t he c rim in al o ff en se s th at re la te to th e fa ct s se t f or th in p ar ag ra ph 4 o f t he ag re em en t, w hi ch a re th e fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ); • Se e al so t he P le a A gr ee m en t at ¶ 2 9 (R . 11 0) ( “T he g ov er nm en t ag re es t ha t ne ith er t he de fe nd an t N at io na l A ir Ca rg o, In c. , i ts a ff ili at ed c om pa ni es n or it s p re se nt o r f or m er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny f ed er al c rim in al o ff en se s co m m itt ed f or th e pe rio d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b as ed u po n fa ct s se t f or th in ¶ 4 re la te d to its a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); “c he at ed ” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 (R . 2 86 ) ( w hi ch s ta te s th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); S- 10 • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) • Fi nn er ty A ff id av it at ¶ ¶ 61 -7 1 (R . 1 20 -1 25 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 26 -2 8 (R . 21 9- 22 1) ( in w hi ch t he C ou rt es ta bl is he s, an d N A C a ck no w le dg es , b ot h th e “e xp an si ve se rie s o f t ra ns ac tio ns ” an d th e kn ow in g an d w ill fu l s ub m is si on o f a m at er ia lly fa ls e st at em en t); “o ve rc ha rg in g” • se e en tri es a bo ve r eg ar di ng p ro se cu to r’ s in -c ou rt st at em en ts t ha t th e C om pa ny r ep ea te dl y “o ve rc ha rg ed ” or “ ov er bi lle d” ; “w ith in th e co nt in en ta l U ni te d St at es ” • Fi nn er ty A ff id av it at ¶ ¶ 44 -7 5 (R . 11 4- 12 5) ; se e al so t he P le a A gr ee m en t at ¶ 2 ( R . 28 7) (s ta tin g th at “ Th e pa rti es u nd er st an d th at th e go ve rn m en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e co nt in en ta l U ni te d St at es (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ). “N at io na l A ir Ca rg o sa ys it s up pl ie s 75 pe rc en t of t he c om m er ci al a ir c ar go se rv ic e us ed b y th e m ili ta ry in I ra q an d A fg ha ni st an , an d th e co m pa ny i ns is ts th at n on e of it s cr im in al c he at in g to ok pl ac e in th e M id dl e Ea st .” (A m en de d C om pl ai nt ¶ 1 9K .) “7 5 pe rc en t o f t he c om m er ci al a ir c ar go ” • Fi nn er ty A ff id av it at ¶ ¶1 02 -1 06 (R . 1 34 -1 35 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p . 41 (R . 2 34 ) ( at w hi ch th e N A C ’s c ou ns el a ck no w le dg es th e vo lu m e of b us in es s th e C om pa ny d oe s in Ira q an d A fg ha ni st an : “ Th is c om pa ny p ro vi de s a bo ut 7 5 pe rc en t o f t he c om m er ci al li ft in si de Ir aq a nd A fg ha ni st an , w hi ch is a bo ut 2 5 pe rc en t o f t he to ta l a irl ift b ei ng u til iz ed b y th e U ni te d St at es in th os e w ar z on es … ”) . S- 11 “c ri m in al c he at in g” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 (R . 2 86 ) ( w hi ch s ta te s th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); “n on e… to ok p la ce in th e M id dl e E as t” • Fi nn er ty A ff id av it at ¶ ¶ 44 , 7 5 (R . 1 14 -1 15 , 1 25 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) (s ta tin g th at “ Th e pa rti es u nd er st an d th at th e go ve rn m en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e co nt in en ta l U ni te d St at es (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ); • Fi nn er ty A ff id av it at ¶ 7 6 (R . 1 26 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p . 4 3 (R . 23 6) (i n w hi ch th e C ou rt em ph as iz ed “ Th e ca ve at o r t he li m ita tio n he re o n be ha lf of th e G ov er nm en t is th at th e pa rti es s et fo rth a n un de rs ta nd in g th at th e G ov er nm en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e U ni te d St at es … , a nd n ot a ny ot he r re la te d ac tiv ity , so o ut si de t he t er rit or ia l U ni te d St at es i s no t w ith in t he a m bi t of t hi s pl ea ag re em en t a s i t i nc lu de d th e in ve st ig at io n. ”) ; • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t p. 6 3 (R . 25 6) ( in w hi ch t he U ni te d St at es A tto rn ey s ta te s in ve st ig at io n an d th e fe de ra l c rim in al o ffe ns es s ho w n in th e do cu m en ts re la te to N A C de liv er ie s “w ith in th e co nt in en ta l U ni te d St at es ” an d th at “ th e in ve st ig at io n di d no t c ov er o ut si de th e U ni te d St at es .” ) ( em ph as is a dd ed ). “T he co up le al so m ai nt ai ns th at it st op pe d ch ea tin g th e go ve rn m en t in 20 05 .” (A m en de d C om pl ai nt ¶ 1 9L .) “s to pp ed c he at in g th e go ve rn m en t i n 20 05 ” • Fi nn er ty A ff id av it at ¶ ¶ 44 -4 5, 6 8, 1 07 (R . 1 14 -1 15 , 1 23 , 1 35 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) ( st at in g th at “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is A gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al o ffe ns es c om m itt ed fo r th e pe ri od b et w ee n Ja nu ar y 19 99 to a nd in cl ud in g Ap ril 20 05 … ”) (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 5 5 (R . 1 18 ); se e al so t he P le a A gr ee m en t at ¶ 2 2 ( R . 2 94 ) (w hi ch sp ec ifi ca lly r ef er s to t he d is m is sa l of c ha rg es e nc om pa ss ed w ith in t he c on du ct u nd er ly in g th e pl ea ag re em en t a nd it s “g lo ba l s et tle m en t” a nd s pe ci fie d “… o th er c rim in al o ff en se in vo lv ed o r r el at ed to th e im pr op er s ub st itu tio n of tr uc k se rv ic e or a ir se rv ic e or th e fa ls ifi ca tio n of d el iv er y da te s fo r th e S- 12 pe rio d Ja nu ar y 19 99 to A pr il 20 05 … .” ); • Fi nn er ty A ff id av it at ¶ 9 2 (R . 1 28 -1 29 ); se e al so th e N A C ’s e m ai l, da te d O ct ob er 2 5, 2 00 7 to M r. H er be ck (R . 5 31 ) (w he re in N A C it se lf in d ire ct r es po ns e to a r eq ue st f ro m M r. H er be ck f or a st at em en t on t he e ve o f th e C om pa ny ’s g ui lty p le a st at ed “ W e ar e pl ea se d th at w e ha ve a gr ee d to re so lv e a le ga l m at te r re la te d to e ve nt s th at o cc ur re d w ith in a s m al l s eg m en t o f ou r bu si ne ss y ea rs ag o. ”) (E m ph as is a dd ed ).; • Se e al so F in ne rty A ff id av it at ¶ ¶ 10 4, 1 08 a nd fo ot no te s 1 7 an d 18 (R . 1 34 , 1 36 ). S- 13 Th e N ov em be r 1 , 2 00 7 A rt ic le “T he O rc ha rd Pa rk co m pa ny th at ad m itt ed o ve rb ill in g th e U .S . D ef en se D ep ar tm en t b y m ill io ns o f d ol la rs w ill co nt in ue d oi ng b us in es s fo r t he fe de ra l go ve rn m en t, at le as t f or n ow .” (A m en de d C om pl ai nt ¶ 1 9M .) “a dm itt ed o ve rb ill in g th e U .S . D ef en se D ep ar tm en t b y m ill io ns ” • Se e pr io r e nt rie s re ga rd in g N A C ’s fo rm al a dm is si on , g ui lty p le a, a ck no w le dg em en t o f s im ila r an d re la te d co nd uc t, re le va nt c on du ct , co nc ur re nc e w ith U .S . ca lc ul at io n of l os s, an d pr os ec ut or ’s st at em en ts re ga rd in g “o ve rc ha rg in g” a nd “ ov er bi lli ng ;” s ee a ls o Pl ea A gr ee m en t a nd P le a Pr oc ee di ng Tr an sc rip t i n th ei r e nt ire ty a nd a s c ite d ab ov e; “c on tin ue d oi ng b us in es s” • Fi nn er ty A ff id av it at ¶ ¶ 10 4- 10 5 (R . 1 34 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p . 4 1 (R . 2 34 ) ( at w hi ch th e C ou rt an d N A C ’s c ou ns el a ck no w le dg e th at th e C om pa ny w ill c on tin ue w ith it s bu si ne ss o pe ra tio ns : T H E C O U R T : N ow , t he re qu es t o n th e 11 (c ) ( 1) (C ), an d I j us t s ay th at b ec au se w er e go in g to g et in to it a li ttl e bi t m or e in d et ai l, bu t i t i s t ha t t he re b e no p ro ba tio n im po se d as p ar t o f t he se nt en ce a nd I s up po se th at th at ’s s om eh ow re la te d to th e sc ru tin y th at th e co rp or at io n w ill b e un de r o nc e th er e is a fin al re so lv e an d if it re m ai ns a v ia bl e co m pa ny g iv en th is c on vi ct io n, th er e w ill b e hi gh sc ru tin y of it s bu si ne ss p ra ct ic es f or p ur po se s of a ny a ct iv ity t ha t it w ill c on du ct w ith t he G ov er nm en t sh ou ld i t co nt in ue c on tra ct w ith th e G ov er nm en t a nd d o bu si ne ss w ith th e G ov er nm en t, co rr ec t? T H E W IT N E SS : Y es . T H E C O U R T : T ha t’s y ou r u nd er st an di ng ? T H E W IT N E SS : Y es . T H E C O U R T : M r. Pe te rs ? M R . P E T E R S: Y es , Y ou r H on or . W e’ ve a lre ad y st ar te d th os e di sc us si on s … w e’ ve b eg un th os e di sc us si on s w ith g en er al c ou ns el f or th e D ep ar tm en t o f D ef en se a nd a pp ro pr ia te o ff ic ia ls in th e A ir Fo rc e. ”) . S- 14 “T he D ef en se D ep ar tm en t w ill no t be gi n to r es ea rc h po ss ib le d eb ar m en t un til a fte r a ll le ga l p ro ce ed in gs a re o ve r in t he c om pa ny ’s f ra ud c as e a fe de ra l de pa rt m en t s po ke sm an sa id .” (A m en de d C om pl ai nt ¶ 1 9N .) “p os si bl e de ba rm en t” • Fi nn er ty A ff id av it at ¶ ¶ 11 2- 11 6 (R . 1 38 -1 39 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 5 (R . 2 95 - 29 6) (w he re by th e go ve rn m en t, in re tu rn fo r t he g ui lty p le a, a gr ee d th at “ it w ill ta ke n o po si tio n w ith an y Fe de ra l E xe cu tiv e A ge nc y co nc er ni ng th e pr es en t r es po ns ib ili ty o f d ef en da nt N at io na l A ir C ar go , In c. , or a ny c om pa ny a ff ili at ed w ith N at io na l A ir C ar go , In c. , or i ts p re se nt o r fo rm er o w ne rs , di re ct or s, of fic er s, or e m pl oy ee s. T hi s ag re em en t, ho w ev er , do es n ot l im it th e ab ili ty o f th e go ve rn m en t, co ns is te nt w ith th e pr ov is io ns o f R ul e 6 of th e Fe de ra l R ul es o f C rim in al P ro ce du re , t o pr ov id e in ve st ig at iv e m at er ia ls c on ce rn in g th os e en tit ie s an d pa rt ie s m en tio ne d ab ov e to a ny fe de ra l Ex ec ut iv e Ag en cy w ho re qu es t s uc h in fo rm at io n fr om th e go ve rn m en t.” ) ( em ph as is a dd ed ); “f ra ud c as e” • Fi nn er ty A ff id av it at ¶ 4 3 (R .1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 ( R . 2 86 ) ( w hi ch s ta te s th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t) (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) ; • Fi nn er ty A ff id av it at ¶ ¶ 61 -7 1 (R . 1 20 -1 25 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 26 -2 8 ( R . 2 19 -2 21 ) (in w hi ch th e C ou rt es ta bl is he s, an d N A C a ck no w le dg es , b ot h th e “e xp an si ve se rie s of t ra ns ac tio ns ” an d th e kn ow in g an d w ill fu l su bm is si on o f a m at er ia lly f al se o r fr au du le nt st at em en t) (e m ph as is a dd ed ); “d ep ar tm en t s po ke sm an sa id ” • Fi nn er ty A ff id av it at ¶ 1 15 ( R . 1 39 ); se e al so N ov em be r 1 , 2 00 7 ar tic le (R . 3 9, 4 43 -4 44 ) S- 15 ex pr es sl y id en tif yi ng sp ok es m an so ur ce . “T he c om pa ny is o ne o f t he m ai n ca rg o co m pa ni es us ed to sh ip fo od , m ed ic in e, m ili ta ry eq ui pm en t an d ot he r es se nt ia ls to so ld ie rs in Ir aq a nd A fg ha ni st an , a ut ho rit ie s sa id . B ut t he co m pa ny ’s p le a de al l as t w ee k on ly in vo lv ed f ra ud ul en t bi lli ng w ith in t he co nt in en ta l U ni te d St at es .” (A m en de d C om pl ai nt ¶ 1 9O .) “m ai n ca rg o co m pa ni es u se d to s hi p fo od , m ed ic in e, m ili ta ry e qu ip m en t an d ot he r es se nt ia ls t o so ld ie rs in Ir aq a nd A fg ha ni st an ” • Fi nn er ty A ff id av it at ¶ ¶ 10 2- 10 6 (R . 1 34 -1 35 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p. 4 1 (R . 2 34 ) ( w he re in N A C ’s c ou ns el s ta te s “T hi s co m pa ny p ro vi de s ab ou t 7 5% o f t he c om m er ci al lif t i ns id e Ira q an d A fg ha ni st an , w hi ch is a bo ut 2 5% o f th e to ta l a ir lif t b ei ng u til iz ed b y th e U ni te d St at es in th os e w ar z on es … ); “f ra ud ul en t b ill in g” • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) ; • An d se e pr io r en tri es re ga rd in g N A C ’s fo rm al ad m is si on an d gu ilt y pl ea re ga rd in g “f ra ud ul en t” s ta te m en t, its a ck no w le dg em en t an d th e C ou rt’ s re co gn iti on o f th e si m ila r an d re la te d co nd uc t u nd er ly in g th e pl ea , N A C ’s c on cu rr en ce w ith U .S . c al cu la tio n of lo ss , a nd th e pr os ec ut or ’s st at em en ts re ga rd in g “o ve rc ha rg in g” a nd “ ov er bi lli ng ;” • Se e al so P le a A gr ee m en t a nd P le a Pr oc ee di ng T ra ns cr ip t i n th ei r e nt ire ty a nd a s c ite d ab ov e; “w ith in th e co nt in en ta l U ni te d St at es ” • Fi nn er ty A ff id av it at ¶ ¶ 44 , 7 5 (R . 1 14 -1 15 , 1 25 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R . 2 87 ) (s ta tin g th at “ Th e pa rti es u nd er st an d th at th e go ve rn m en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e co nt in en ta l U ni te d St at es (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ); S- 16 • Fi nn er ty A ff id av it at ¶ 7 6 (R . 1 26 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p . 4 3 ( R . 23 6) (i n w hi ch th e C ou rt em ph as iz ed “ Th e ca ve at o r t he li m ita tio n he re o n be ha lf of th e G ov er nm en t is th at th e pa rti es s et fo rth a n un de rs ta nd in g th at th e G ov er nm en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e U ni te d St at es … , a nd n ot a ny ot he r re la te d ac tiv ity , so o ut si de t he t er rit or ia l U ni te d St at es i s no t w ith in t he a m bi t of t hi s pl ea ag re em en t a s i t i nc lu de d th e in ve st ig at io n. ”) ; • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t p. 6 3 ( R . 25 6) ( in w hi ch t he U ni te d St at es A tto rn ey s ta te s in ve st ig at io n an d th e fe de ra l c rim in al o ffe ns es s ho w n in th e do cu m en ts re la te to N A C de liv er ie s “w ith in th e co nt in en ta l U ni te d St at es ” an d th at “ th e in ve st ig at io n di d no t c ov er o ut si de th e U ni te d St at es .” ). “T he c om pa ny h as n ev er c he at ed t he go ve rn m en t o n sh ip m en ts to th e M id dl e Ea st w ar z on es , s ai d Pa ul J . C am br ia , a n at to rn ey fo r t he c ar go fi rm .” (A m en de d C om pl ai nt ¶ 1 9P .) • Se e di sc us si on a nd e nt ri es , su pr a, e st ab lis hi ng t ha t th e go ve rn m en t’s i nv es tig at io n an d pr os ec ut io n fo cu se d on N A C ’s d el iv er ie s an d op er at io ns w ith in th e co nt in en ta l U ni te d St at es , a nd n ot on it s o ve rs ea s b us in es s. “N at io na l A ir C ar go a dm itt ed t ha t it ov er bi lle d th e go ve rn m en t b y m ill io ns of d ol la rs f or m ili ta ry s hi pm en ts in th e ye ar s 1 99 9 to 2 00 5. ” (A m en de d C om pl ai nt ¶ 1 9Q .) “a dm itt ed th at it o ve rb ill ed th e go ve rn m en t b y m ill io ns o f d ol la rs ” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 45 -4 6, 4 6- 47 , 5 0- 51 (R . 2 38 -2 40 , 2 43 -2 44 ) ( N A C a gr ee s in o pe n co ur t t ha t t he C om pa ny d id , i n fa ct , do w ha t i s c la im ed a nd th at th e lo ss to th e go ve rn m en t a s a re su lt of it s c on du ct is $ 4, 40 0, 00 0) ; • Se e pr io r e nt rie s re ga rd in g N A C ’s fo rm al a dm is si on , g ui lty p le a, a ck no w le dg em en t o f s im ila r an d re la te d co nd uc t, re le va nt c on du ct , co nc ur re nc e w ith U .S . ca lc ul at io n of l os s, an d pr os ec ut or ’s st at em en ts re ga rd in g “o ve rc ha rg in g” a nd “ ov er bi lli ng ;” • Se e al so P le a A gr ee m en t, Pl ea P ro ce ed in g Tr an sc rip t an d Fo rf ei tu re C om pl ai nt i n th ei r S- 17 en tir et y an d as c ite d ab ov e; “1 99 9 to 2 00 5” • Fi nn er ty A ff id av it at ¶ ¶ 44 -4 5, 6 8, 1 07 (R . 1 14 -1 15 , 1 23 , 1 25 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) (s ta tin g th at “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is A gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al o ffe ns es c om m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g Ap ril 20 05 … ”) (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 5 5 (R . 11 8) ; se e al so t he P le a A gr ee m en t at ¶ 2 2 ( R . 29 4) ( w hi ch sp ec ifi ca lly re fe rs to th e di sm is sa l o f c ha rg es e nc om pa ss ed w ith in th e co nd uc t u nd er ly in g th e pl ea ag re em en t a nd it s “g lo ba l s et tle m en t” a nd s pe ci fie d “… o th er c rim in al o ff en se in vo lv ed o r r el at ed to th e im pr op er s ub st itu tio n of tr uc k se rv ic e or a ir se rv ic e or th e fa ls ifi ca tio n of d el iv er y da te s fo r th e pe rio d Ja nu ar y 19 99 to A pr il 20 05 … .” ). “T he c om pa ny m ai nt ai ns th at it st op pe d ch ea tin g th e go ve rn m en t i n 20 05 .” (A m en de d C om pl ai nt ¶ 1 9R .) “s to pp ed c he at in g th e go ve rn m en t i n 20 05 ” • Fi nn er ty A ff id av it at ¶ ¶ 44 -4 5, 6 8, 1 07 ( R . 1 14 -1 15 , 1 23 , 1 35 ); se e al so th e Pl ea A gr ee m en t at ¶ 2 ( R . 2 87 ) ( st at in g th at “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is A gr ee m en t i s in s at is fa ct io n of (a ) a ny a nd a ll fe de ra l o ffe ns es c om m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g Ap ril 20 05 … ”) (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 5 5 (R . 1 18 ); se e al so t he P le a A gr ee m en t at ¶ 2 2 ( R . 2 94 ) (w hi ch sp ec ifi ca lly r ef er s to t he d is m is sa l of c ha rg es e nc om pa ss ed w ith in t he c on du ct u nd er ly in g th e pl ea ag re em en t a nd it s “g lo ba l s et tle m en t” a nd s pe ci fie d “… o th er c rim in al o ff en se in vo lv ed o r r el at ed to th e im pr op er s ub st itu tio n of tr uc k se rv ic e or a ir se rv ic e or th e fa ls ifi ca tio n of d el iv er y da te s fo r th e pe rio d Ja nu ar y 19 99 to A pr il 20 05 … .” ) ( em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 9 2 (R . 1 28 -1 29 ); se e al so th e N A C ’s e m ai l, da te d O ct ob er 2 5, 2 00 7 to M r. H er be ck (R . 5 31 ) (w he re in N A C it se lf in d ire ct r es po ns e to a r eq ue st f ro m M r. H er be ck f or a st at em en t on t he e ve o f th e C om pa ny ’s g ui lty p le a st at ed “ W e ar e pl ea se d th at w e ha ve a gr ee d to re so lv e a le ga l m at te r re la te d to e ve nt s th at o cc ur re d w ith in a s m al l s eg m en t o f ou r bu si ne ss y ea rs ag o. ”) (e m ph as is a dd ed ). S- 18 “U nd er t he t er m s of i ts c or po ra te p le a de al , no ne o f th e of fic er s in vo lv ed i n th e fr au d co m m itt ed b y N at io na l A ir C ar go w ill g o to ja il. ” (A m en de d C om pl ai nt ¶ 1 9S ) “f ra ud ” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 ( R . 2 86 ) ( w hi ch st at es th at t he C om pa ny i s pl ea di ng g ui lty t o 18 U .S .C . 10 01 (a )( 2) : kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly “ fa ls e” o r “ fr au du le nt ” st at em en t); “n on e of th e of fic er s… w ill g o to ja il” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 ( R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ). S- 19 Th e N ov em be r 8 , 2 00 7 E di to ri al “T ax pa ye rs a re c he at ed .” [H ea dl in e] (A m en de d C om pl ai nt ¶ 1 9T .) “c he at ed ” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 ( R . 2 86 ) ( w hi ch st at es th at t he C om pa ny i s pl ea di ng g ui lty t o 18 U .S .C . 10 01 (a )( 2) : kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly “ fa ls e” o r “ fr au du le nt ” st at em en t); • Fi nn er ty A ff id av it at ¶ 4 4 (R . 1 14 -1 15 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R .2 87 ) (w hi ch st at es “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is a gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al of fe ns es c om m itt ed fo r t he p er io d of Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 b y th e de fe nd an t b as ed on f ac ts s et f or th i n ¶ 4 of t hi s ag re em en t an d (b ) ba se d on f ac ts o r do cu m en ts k no w n to t he go ve rn m en t o r up on d oc um en ts in th e po ss es si on o f t he O ff ic e of th e U ni te d St at es A tto rn ey f or th e W es te rn D is tri ct o f N ew Y or k at th e tim e a gu ilt y pl ea is e nt er ed p ur su an t t o th is a gr ee m en t t ha t r el at e to ( i) la te d el iv er y of f re ig ht , ( ii) fa ct s or d oc um en ts w hi ch th e go ve rn m en t w ou ld a lle ge c on st itu te fa ls e cl ai m s or fa ls e st at em en ts re la tin g to N A C ’s c ar ria ge o f f re ig ht fo r t he U ni te d St at es , ( iii ) u se b y N A C o f th e Po w er Tr ac k [e le ct ro ni c bi lli ng ] sy st em ; or ( iv ) fa ct s re la tin g to t he m od e or m et ho d ch os en b y N A C to p er fo rm w or k un de r a fr ei gh t c on tra ct w ith th e U ni te d St at es ”) ; • Fi nn er ty A ff id av it at ¶ ¶ 61 -7 1 (R . 1 20 -1 25 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 26 -2 8 ( R . 2 19 -2 21 ) (in w hi ch th e C ou rt es ta bl is he s, an d N A C a ck no w le dg es , b ot h th e “e xp an si ve se rie s of t ra ns ac tio ns ” an d th e kn ow in g an d w ill fu l su bm is si on o f a m at er ia lly f al se o r fr au du le nt st at em en t e ff ec tin g m ill io ns o f d ol la rs o f l os s o n th e go ve rn m en t). “T he pl ea de al gi ve n to a se ri al ly un pa tr io tic c om pa ny in O rc ha rd P ar k is th e ki nd o f th in g th at m ak es o bs er ve rs be lie ve th at a di ff er en t st an da rd if ju st ic e ap pl ie s to th e po lit ic al ly co nn ec te d. ” (A m en de d C om pl ai nt ¶ 1 9U .) “s er ia lly u np at ri ot ic ” • Fi nn er ty A ff id av it at ¶ ¶ 61 -7 1 (R . 1 20 -1 25 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 26 -2 8 ( R . 2 19 -2 21 ) (in w hi ch th e C ou rt es ta bl is he s, an d N A C a ck no w le dg es , b ot h th e “e xp an si ve se rie s o f t ra ns ac tio ns ” an d th e kn ow in g an d w ill fu l s ub m is si on o f a m at er ia lly fa ls e st at em en t); • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t S- 20 pp . 4 5- 46 , 46 -4 7, 5 0- 51 ( R . 23 8- 24 0, 2 43 -2 44 ) (N A C a gr ee s in o pe n co ur t th at t he l os s to t he go ve rn m en t a s a re su lt of it s r el ev an t c on du ct is $ 4, 40 0, 00 0, in cl ud in g, sp ec ifi ca lly a t p p. 4 6- 47 w he re th e U ni te d St at es A tto rn ey st at es th at “ th e in ve st ig at io n co ve re d m or e th an th at o ne si ng le c ha rg e an d by a gr ee m en t an d af te r m uc h co ns ul ta tio n, t he p ar tie s ar e ag re ed t ha t th e lo ss t o th e G ov er nm en t ba se d up on si m ila r a nd re la te d co nd uc t a s is e vi de nc ed b y w ha t w e ar e no t g oi ng to p ro se cu te fu rt he r is th e $4 ,4 00 ,0 00 lo st to th e U ni te d St at es D ep ar tm en t o f D ef en se .” ) ( em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶¶ 4 , 4 (g ) an d 6 ( R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; “p ol iti ca lly c on ne ct ed ” • Se e al so O ct ob er 2 7, 2 00 7 ar tic le d et ai lin g N A C a nd M r. A lf’ s fin an ci al s up po rt of p ol iti ca l of fic e ho ld er s (R . 3 7- 38 , 4 42 ); • Se e al so A rg um en t a t P oi nt IV , r eg ar di ng st at em en ts o f o pi ni on . “S pe ci fic al ly , w hy in th e na m e of de ce nc y sh ou ld t he l ea de rs o f N at io na l A ir C ar go e sc ap e pe rs on al p un is hm en t fo r ch ea tin g th e U .S . D ef en se D ep ar tm en t - an d, t he re fo re , A m er ic an tro op s an d ta xp ay er s -- du rin g w ar tim e? ” (A m en de d C om pl ai nt ¶ 1 9V .) “e sc ap e pe rs on al p un is hm en t” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 (R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he S- 21 fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ); “c he at in g” • Se e al so P le a A gr ee m en t a t ¶ 1 ( R . 2 86 ) a nd T ra ns cr ip t o f P le a Pr oc ee di ng a t p p. 2 6- 28 ( R . 21 9- 22 1) a nd d is cu ss io n, s up ra , r eg ar di ng a dm is si on o f f ra ud ul en t s ta te m en t a nd a ck no w le dg m en t o f si m ila r r el at ed c on du ct in o bt ai ni ng p ay m en t; • Se e al so A rg um en t a t P oi nt IV , r eg ar di ng st at em en ts o f o pi ni on . “N o on e fr om N at io na l A ir C ar go w ill se e th e in si de o f a ja il fo r re pe at ed ly ov er ch ar gi ng t he D ef en se D ep ar tm en t fo r m ili ta ry sh ip m en ts w ith in th e co nt in en ta l U ni te d St at es be tw ee n ea rl y 19 99 a nd A pr il 20 05 .” (A m en de d C om pl ai nt ¶ 1 9W .) “N o on e fr om N at io na l A ir C ar go w ill se e th e in si de o f a ja il” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 ( R .2 55 -2 56 ) (in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ); “r ep ea te dl y ov er ch ar gi ng ” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 45 -4 6, 4 6- 47 , 5 0- 51 (R . 2 38 -2 40 , 2 43 -2 44 ) ( N A C a gr ee s in o pe n co ur t t ha t t he C om pa ny d id , i n fa ct , do w ha t i s c la im ed a nd th at th e lo ss to th e go ve rn m en t a s a re su lt of it s c on du ct is $ 4, 40 0, 00 0) ; S- 22 • Se e al so F in ne rty A ff id av it at ¶ 1 56 (R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3 /6 /2 00 8 pr oc ee di ng s at p p. 3 4, 3 6 (R . 3 56 , 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at th is is a c as e in vo lv in g “i n ve ry s im pl is tic t er m s, ov er bi lli ng o f th e go ve rn m en t” a nd t ha t “t he a gr ee d- up on l os s to t he go ve rn m en t t ha t i s ag re ed b y us , a gr ee d by N at io na l A ir C ar go , a nd a gr ee d by th e ag en ci es in vo lv ed in 4 .4 m ill io n. A nd t ha t’s - t ha t am ou nt w ill r ec om pe ns e th e go ve rn m en t fo r th e su bs et o f ov er ch ar ge s t ha t w e fe lt w er e pa rt of th e cr im in al c on du ct .” ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶¶ 4 , 4 (g ) an d 6 ( R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; • Se e pr io r e nt rie s re ga rd in g N A C ’s fo rm al a dm is si on , g ui lty p le a, a ck no w le dg em en t o f s im ila r an d re la te d co nd uc t, re le va nt c on du ct , co nc ur re nc e w ith U .S . ca lc ul at io n of l os s, an d pr os ec ut or ’s st at em en ts r eg ar di ng “ ov er ch ar gi ng ” an d “o ve rb ill in g; ” se e al so P le a A gr ee m en t, Pl ea P ro ce ed in g Tr an sc rip t a nd F or fe itu re C om pl ai nt in th ei r e nt ire ty a nd a s c ite d ab ov e; “w ith in th e co nt in en ta l U ni te d St at es ” • Fi nn er ty A ff id av it at ¶ ¶ 44 , 7 5 (R . 1 14 -1 15 , 1 25 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 ( R . 2 87 ) (s ta tin g th at “ Th e pa rti es u nd er st an d th at th e go ve rn m en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e co nt in en ta l U ni te d St at es (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ); • Fi nn er ty A ff id av it at ¶ 7 6 (R . 1 26 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p . 4 3 ( R . 23 6) (i n w hi ch th e C ou rt em ph as iz ed “ Th e ca ve at o r t he li m ita tio n he re o n be ha lf of th e G ov er nm en t is th at th e pa rti es s et fo rth a n un de rs ta nd in g th at th e G ov er nm en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e U ni te d St at es … , a nd n ot a ny ot he r re la te d ac tiv ity , so o ut si de t he t er rit or ia l U ni te d St at es i s no t w ith in t he a m bi t of t hi s pl ea ag re em en t a s i t i nc lu de d th e in ve st ig at io n. ”) ; • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t p. 6 3 ( R . 25 6) ( in w hi ch t he U ni te d St at es A tto rn ey s ta te s in ve st ig at io n an d th e fe de ra l c rim in al o ffe ns es s ho w n in th e do cu m en ts re la te to N A C de liv er ie s “w ith in th e co nt in en ta l U ni te d St at es ” an d th at “ th e in ve st ig at io n di d no t c ov er o ut si de th e S- 23 U ni te d St at es .” ); “b et w ee n ea rl y 19 99 a nd 2 00 5” • Fi nn er ty A ff id av it at ¶ ¶ 44 -4 5, 6 8, 1 07 (R . 1 14 -1 15 , 1 23 , 1 35 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 (R . 2 87 ) (s ta tin g th at “ Th e gu ilt y pl ea e nt er ed p ur su an t t o th is A gr ee m en t i s in s at is fa ct io n of (a ) an y an d al l f ed er al o ffe ns es c om m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g Ap ril 20 05 … ”) (E m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 5 5 (R . 11 8) ; se e al so t he P le a A gr ee m en t at ¶ 2 2 ( R . 29 4) ( w hi ch sp ec ifi ca lly re fe rs to th e di sm is sa l o f c ha rg es e nc om pa ss ed w ith in th e co nd uc t u nd er ly in g th e pl ea ag re em en t a nd it s “g lo ba l s et tle m en t” a nd s pe ci fie d “… o th er c rim in al o ff en se in vo lv ed o r r el at ed to th e im pr op er s ub st itu tio n of tr uc k se rv ic e or a ir se rv ic e or th e fa ls ifi ca tio n of d el iv er y da te s fo r th e pe rio d Ja nu ar y 19 99 to A pr il 20 05 … .” ). “U nd er th e te rm s of a c or po ra te fe lo ny pl ea d de al , t he c om pa ny w ill p ay m or e th an $ 28 m ill io n in f in es , re st itu tio n an d fo rf ei tu re s, an d w hi le t ha t m ig ht st in g so m e, it ’s h ar dl y a di si nc en tiv e to th e ne xt c om pa ny t ha t th in ks i t ca n m ak e m ill io ns of ex tr a do lla rs by ta ki ng ad va nt ag e of th e pl ig ht of A m er ic an se rv ic em en a nd w om en .” (A m en de d C om pl ai nt ¶ 1 9X .) “c or po ra te fe lo ny p le a de al ” • Fi nn er ty A ff id av it at ¶ 4 3 (R . 1 14 ); se e al so th e Pl ea A gr ee m en t a t ¶ 1 ( R . 2 86 ) ( w hi ch st at es th at C om pa ny is p le ad in g gu ilt y to 1 8 U .S .C . 1 00 1( a) (2 ): kn ow in gl y an d w ill fu lly m ak in g a m at er ia lly fa ls e or fr au du le nt st at em en t); “m or e th an $ 28 m ill io n in fi ne s, re st itu tio n an d fo rf ei tu re s” • Fi nn er ty A ff id av it at ¶ ¶ 57 , 9 4- 95 (R . 1 18 -1 19 , 1 29 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 3 1, 34 -3 5, 3 9 ( R . 2 86 , 2 98 -3 01 ) ( w he re by N A C a gr ee d to p ay $ 13 .2 m ill io n in re st itu tio n an d pe na lti es on t he f el on y co un t, $7 .3 71 m ill io n on t he F al se C la im s A ct c la im s an d $7 .4 29 m ill io n on t he fo rf ei tu re c la im ); • Fi nn er ty A ff id av it at ¶ 1 0 (R . 1 03 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p p. 6 6- 69 (I d. ) ( R . 2 59 -2 62 ); “e xt ra d ol la rs ” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll S- 24 am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 4 5- 46 , 46 -4 7, 5 0- 51 ( R . 23 8- 24 0, 2 43 -2 44 ) ( N A C a gr ee s in o pe n co ur t th at t he l os s to t he go ve rn m en t a s a re su lt of it s r el ev an t c on du ct is $ 4, 40 0, 00 0, in cl ud in g, sp ec ifi ca lly a t p p. 4 6- 47 w he re th e U ni te d St at es A tto rn ey st at es th at “ th e in ve st ig at io n co ve re d m or e th an th at o ne si ng le c ha rg e an d by a gr ee m en t an d af te r m uc h co ns ul ta tio n, t he p ar tie s ar e ag re ed t ha t th e lo ss t o th e G ov er nm en t ba se d up on si m ila r a nd re la te d co nd uc t a s is e vi de nc ed b y w ha t w e ar e no t g oi ng to p ro se cu te fu rt he r is th e $4 ,4 00 ,0 00 lo st to th e U ni te d St at es D ep ar tm en t o f D ef en se .” ) ( em ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ 1 56 ( R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3/ 6/ 20 08 p ro ce ed in gs a t p p. 34 , 3 6 (R . 3 56 , 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at th is is a c as e in vo lv in g “i n ve ry si m pl is tic te rm s, ov er bi lli ng o f t he g ov er nm en t” a nd th at “ th e ag re ed -u po n lo ss to th e go ve rn m en t t ha t is a gr ee d by u s, ag re ed b y N at io na l A ir C ar go , a nd a gr ee d by th e ag en ci es in vo lv ed in 4 .4 m ill io n. A nd th at ’s - th at a m ou nt w ill re co m pe ns e th e go ve rn m en t f or th e su bs et o f ov er ch ar ge s th at w e fe lt w er e pa rt of th e cr im in al c on du ct .” ). (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶¶ 4 , 4 (g ) an d 6 ( R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; “t ak in g ad va nt ag e” • Se e D ep ar tm en t of J us tic e Pr es s R el ea se , M ar ch 2 6, 2 00 8 ( R . 43 6) ( w he re in g ov er nm en t pr os ec ut or s st at e “T od ay ’s s et tle m en t de m on st ra te s th e U ni te d St at es ’ de te rm in at io n to e ns ur e th at co nt ra ct or s do in g bu si ne ss w ith o ur m ili ta ry d ep ar tm en ts d o no t d iv er t r es ou rc es n ee de d fo r th e w ar ef fo rt in to th ei r ow n po ck et s th ro ug h fr au d, ” an d “T hi s fe lo ny c on vi ct io n, w hi ch in cl ud es th e la rg es t cr im in al a nd c iv il pe na lti es e ve r im po se d in th e W es te rn D is tri ct o f N ew Y or k, m ak es i t c le ar t ha t di sh on es t c or po ra te e nt iti es a re n ot im m un e fr om b ea rin g su bs ta nt ia l c on se qu en ce s ar is in g fro m th ei r de lib er at e ef fo rt s t o ch ea t t he A m er ic an p ub lic ”) (e m ph as is a dd ed ); • Se e al so A rg um en t a t P oi nt IV , r eg ar di ng st at em en ts o f o pi ni on . S- 25 “W ha t N at io na l A ir Ca rg o di d is no th in g ne w . C on tra ct or s ha ve t ak en ad va nt ag e of t he g ov er nm en t du ri ng w ar tim e ev er si nc e th er e w er e go ve rn m en ts a nd w ar s.” (A m en de d C om pl ai nt ¶ 1 9Y .) “t ak en a dv an ta ge o f t he g ov er nm en t d ur in g w ar tim e” • Se e D ep ar tm en t of J us tic e Pr es s R el ea se , M ar ch 2 6, 2 00 8 ( R . 43 6) ( w he re in g ov er nm en t pr os ec ut or s st at e “T od ay ’s s et tle m en t de m on st ra te s th e U ni te d St at es ’ de te rm in at io n to e ns ur e th at co nt ra ct or s do in g bu si ne ss w ith o ur m ili ta ry d ep ar tm en ts d o no t d iv er t r es ou rc es n ee de d fo r th e w ar ef fo rt in to th ei r ow n po ck et s th ro ug h fr au d, ” an d “T hi s fe lo ny c on vi ct io n, w hi ch in cl ud es th e la rg es t cr im in al a nd c iv il pe na lti es e ve r im po se d in th e W es te rn D is tri ct o f N ew Y or k, m ak es i t c le ar t ha t di sh on es t c or po ra te e nt iti es a re n ot im m un e fr om b ea rin g su bs ta nt ia l c on se qu en ce s ar is in g fro m th ei r de lib er at e ef fo rt s t o ch ea t t he A m er ic an p ub lic ”) (e m ph as is a dd ed ); • Se e al so A rg um en t a t P oi nt IV , r eg ar di ng st at em en ts o f o pi ni on . “F or s om e pe op le , th e te m pt at io n to m ak e a qu ic k, d is ho ne st b uc k -- or m an y m ill io n of t he m -- is si m pl y irr es is tib le . B ut th er e’ s no la w th at s ay s co m pa ni es a nd t he ir le ad er s ca n’ t be m or al , et hi ca l, pa tri ot ic an d pl ai n ho ne st .” (A m en de d C om pl ai nt ¶ 1 9Z .) “d is ho ne st ” an d “m an y m ill io n” • Se e, e .g ., di sc us si on , s up ra , r eg ar di ng th e co nt en ts o f th e Pl ea A gr ee m en t a nd th e st at em en ts m ad e du rin g th e Pl ea P ro ce ed in g; • Se e al so , F in ne rty A ff id av it at ¶ 1 56 (R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3 /6 /2 00 8 pr oc ee di ng s at p p. 3 4, 3 6 (R . 3 56 , 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at th is is a c as e in vo lv in g “i n ve ry s im pl is tic t er m s, ov er bi lli ng o f th e go ve rn m en t” a nd t ha t “t he a gr ee d- up on l os s to t he go ve rn m en t t ha t i s ag re ed b y us , a gr ee d by N at io na l A ir C ar go , a nd a gr ee d by th e ag en ci es in vo lv ed in 4 .4 m ill io n. A nd t ha t’s - t ha t am ou nt w ill r ec om pe ns e th e go ve rn m en t fo r th e su bs et o f ov er ch ar ge s t ha t w e fe lt w er e pa rt of th e cr im in al c on du ct .” ). (e m ph as is a dd ed ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶¶ 4 , 4 (g ) an d 6 ( R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; • Se e al so A rg um en t a t P oi nt IV , r eg ar di ng st at em en ts o f o pi ni on . S- 26 “S ad to sa y, fo r th e co m pa ny ’s em pl oy ee s an d W es te rn N ew Y or ke rs in ge ne ra l, th e le ad er s of N at io na l A ir C ar go di dn ’t m ea su re up . T he y fa ile d A m er ic a, an d A m er ic a’ s ta xp ay er s.” (A m en de d C om pl ai nt ¶ 1 9A A .) • Se e di sc us si on , s up ra ; • Se e al so A rg um en t a t P oi nt IV , r eg ar di ng st at em en ts o f o pi ni on . S- 27 Th e M ar ch 2 , 2 00 8 A rt ic le “O rc ha rd P ar k fir m t o pa y $2 8 m ill io n in fin es an d re st itu tio n, as ow ne r av oi ds j ai l t im e, in si st s he d id n ot hi ng w ro ng .” [H ea dl in e] (A m en de d C om pl ai nt ¶ 1 9B B .) “$ 28 m ill io n in fi ne s a nd re st itu tio n” • Fi nn er ty A ff id av it at ¶ ¶ 57 , 9 4- 95 (R . 1 18 -1 19 , 1 29 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 3 1, 34 -3 5, 3 9 ( R . 2 86 , 2 98 -3 01 ) ( w he re by N A C a gr ee d to p ay $ 13 .2 m ill io n in re st itu tio n an d pe na lti es on t he f el on y co un t, $7 .3 71 m ill io n on t he F al se C la im s A ct c la im s an d $7 .4 29 m ill io n on t he fo rf ei tu re c la im ); • Fi nn er ty A ff id av it at ¶ 1 0 (R . 1 03 ); se e al so th e Pl ea P ro ce ed in g at p p. 6 6- 69 ( Id .) (R . 2 59 - 26 2) ; “o w ne r a vo id s j ai l t im e” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 ( R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ). “C hr is to ph er J. A lf’ s co m pa ny w as ac cu se d of c he at in g th e go ve rn m en t ou t of m ill io ns o f do lla rs b y fa ls el y bi lli ng hi s be st cu st om er , th e U .S . D ef en se D ep ar tm en t. B ut w he n A lf’ s co m pa ny , N at io na l A ir C ar go of O rc ha rd P ar k, i s se nt en ce d in t he c as e, pe rh ap s as s oo n as T hu rs da y in U .S . “a cc us ed o f c he at in g” • Se e C rim in al In fo rm at io n, C as e N o. 1 :0 7- C R -0 02 54 , d at ed 1 0/ 25 /0 7 (R . 1 73 -1 74 ); “f al se ly b ill in g” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of S- 28 D is tri ct C ou rt, n ei th er A lf no r an yo ne in h is c om pa ny w ill g o to ja il. ” (A m en de d C om pl ai nt ¶ 1 9C C .) N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so th e Pl ea P ro ce ed in g at p p. 4 5- 46 , 4 6- 47 , 50 -5 1 ( R . 2 38 -2 40 , 2 43 -2 44 ) (N A C a gr ee s in o pe n co ur t t ha t t he C om pa ny d id , i n fa ct , d o w ha t i s cl ai m ed a nd th at th e lo ss to th e go ve rn m en t a s a re su lt of it s r el ev an t c on du ct is $ 4, 40 0, 00 0) ; • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶¶ 4 , 4 (g ) an d 6 ( R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; “n ei th er A lf no r a ny on e in h is c om pa ny w ill g o to ja il” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 (R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ). “A lf w ill c on tin ue t o m ak e a fo rt un e of f a w ar h al f a w or ld a w ay .” (A m en de d C om pl ai nt ¶ 1 9D D .) “m ak e a fo rt un e” • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶ 6 ( R . 1 76 -1 79 ) ( al le gi ng th at A lf’ s C om pa ny , N A C , r ec ei ve d fo r t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in p ay m en ts f ro m t he f ed er al go ve rn m en t, an d th at o f th at a m ou nt $ 13 ,8 70 ,0 00 w as r ec ei ve d by th e C om pa ny in c on ne ct io n w ith S- 29 fa ls e st at em en ts re nd er ed b y th e C om pa ny re la tin g to se rv ic es p ro vi de d by N A C , a nd th at su ch b ill in g re su lte d in p ro fit s o f n ea rly $ 7. 5 m ill io n) ; “A lf is o ne o f th e A m er ic an s w ho h av e be en m ad e w ea lth y by a n Ira q W ar w ho se c os ts a re n ow a pp ro ac hi ng $ 3 tri lli on .” (A m en de d C om pl ai nt ¶ 1 9E E. ) “m ad e w ea lth y” • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R . 11 0- 11 1, 1 44 , 14 6, 1 51 ); se e al so t he Fo rf ei tu re C om pl ai nt a t ¶ 6 ( R . 1 76 -1 79 ) ( al le gi ng th at A lf’ s C om pa ny , N A C , r ec ei ve d fo r t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in p ay m en ts f ro m t he f ed er al go ve rn m en t w ith r eg ar d to f al se s ta te m en ts r en de re d in c on ne ct io n w ith d om es tic s hi pm en ts a lo ne , an d th at su ch b ill in g re su lte d in p ro fit s o f n ea rly $ 7. 5 m ill io n) ; “H ow d id h e do it ? H ow d id A lf ke ep th e go ve rn m en t in ve st ig at or s aw ay fr om h im se lf an d hi s em pl oy ee s? H e go t th e be st la w ye rs m on ey co ul d bu y. ” (A m en de d C om pl ai nt ¶ 1 9F F. ) “k ee p th e go ve rn m en t i nv es tig at or s a w ay ” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t at ¶ 2 9 (R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 ( R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ) “t he b es t l aw ye rs m on ey c ou ld b uy ” • St at em en t o f op in io n (“ he g ot th e be st la w ye rs m on ey c ou ld b uy ”) - s ee A rg um en t a t P oi nt IV . Th e ar tic le sp ec ifi es a s i ts b as is fo r t he o pi ni on th at th es e at to rn ey s i nc lu de d lo ca l c ou ns el R od ne y Pe rs on iu s, Te rr en ce C on no rs a nd P au l C am br ia ; in a dd iti on , A LF a nd N A C w er e re pr es en te d by a fo rm er s ec re ta ry o f t he A ir Fo rc e an d pa rtn er in a m aj or , p ow er fu l D is tri ct o f C ol um bi a la w fi rm a nd th en - V ic e Pr es id en t D ic k C he ne y’ s pe rs on al l aw ye r w ho a ls o ha d be en G en er al C ou ns el t o th e U .S . D ef en se D ep ar tm en t. S- 30 Th e M ar ch 3 , 2 00 8 A rt ic le “‘ D re am te am ’ w in s no -j ai l pl ea de al .” [H ea dl in e] (A m en de d C om pl ai nt ¶ 1 9G G . “d re am te am ” • St at em en t of o pi ni on ( “D re am t ea m ”) - s ee A rg um en t at P oi nt I V . T he t w o- da y Sp ec ia l R ep or t sp ec ifi es a s th e ba si s fo r th is o pi ni on t ha t th es e at to rn ey s in cl ud ed l oc al c ou ns el R od ne y Pe rs on iu s, Te rr en ce C on no rs a nd P au l C am br ia ; in a dd iti on , A LF a nd N A C w er e re pr es en te d by a fo rm er s ec re ta ry o f t he A ir Fo rc e an d pa rtn er in a m aj or , p ow er fu l D is tri ct o f C ol um bi a la w fi rm a nd th en - V ic e Pr es id en t D ic k C he ne y’ s pe rs on al l aw ye r w ho a ls o ha d be en G en er al C ou ns el t o th e U .S . D ef en se D ep ar tm en t; “n o- ja il pl ea d ea l” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 ( R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ). “A n o- ja il pl ea d ea l fo r an a lle ge d m ul tim ill io n- do lla r cr im e w as on e se ve ra l si gn ifi ca nt br ea ks th e U .S . Ju st ic e D ep ar tm en t ga ve to A lf. Th er e w er e ot he rs : * Th e go ve rn m en t de ci de d to fo cu s i ts p ro be o n on e sm al l p or tio n of A lf’ s bu si ne ss , m ili ta ry “n o- ja il pl ea d ea l” • Fi nn er ty A ff id av it at ¶ 1 00 ( R . 1 32 -1 33 ); se e al so th e Pl ea A gr ee m en t a t ¶ 2 9 ( R . 2 97 -2 98 ) (“ Th e go ve rn m en t a gr ee s th at n ei th er th e de fe nd an t N at io na l A ir C ar go , I nc ., its a ff ili at ed c om pa ni es no r its p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s or e m pl oy ee s w ill b e pr os ec ut ed … f or ( a) a ny fe de ra l c rim in al o ff en se s co m m itt ed fo r t he p er io d be tw ee n Ja nu ar y 19 99 to a nd in cl ud in g A pr il 20 05 ba se d up on fa ct s s et fo rth in ¶ 4 re la te d to it s a nd th ei r c on du ct w ith in th e co nt in en ta l U ni te d St at es .” ); S- 31 sh ip m en ts w ith in t he c on tin en ta l U ni te d St at es . Th e bi gg es t pa rt of A lf’ s bu si ne ss - - ar ra ng in g m ili ta ry sh ip m en ts to Ir aq a nd A fg ha ni st an -- w as n ot sc ru tin iz ed . * N o in di vi du al s w er e ch ar ge d an d th e co m pa ny w as a llo w ed t o pl ea d gu ilt y as a n en tit y. ” (A m en de d C om pl ai nt ¶ 1 9H H .) • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t pp . 62 -6 3 ( R . 25 5- 25 6) ( in w hi ch t he U .S . A tto rn ey s ta te s “W e ag re e th at N at io na l A ir C ar go , its a ff ili at ed c om pa ni es , an d th er e is a n un de rs ta nd in g be tw ee n th e go ve rn m en t a nd c ou ns el a s t o w ha t c om pa ni es th os e ar e, n or a ny p re se nt o r fo rm er o w ne rs , d ire ct or s, of fic er s, or e m pl oy ee s of N at io na l A ir C ar go o r i ts a ff ili at ed c om pa ni es w ill be p ro ce ss ed b y m y of fic e or th e O ff ic e of th e U .S . A tto rn ey , W es te rn D is tri ct o f N ew Y or k fo r th e cr im in al o ff en se s th at r el at e to t he f ac ts s et f or th i n p ar ag ra ph 4 o f th e ag re em en t, w hi ch a re t he fa ls ifi ca tio ns , p ro of s o f d el iv er y se nt a s c on fir m at io n of d el iv er y da te s.” ); “a lle ge d m ul tim ill io n- do lla r c rim e” • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) ( se tti ng fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s c on du ct w as i n th e m ill io ns o f do lla rs : “ t he c ou rt w ill e nt er a r es tit ut io n or de r fo r th e fu ll am ou nt o f t he v ic tim ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )) ; • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 45 -4 6, 4 6- 47 , 5 0- 51 ( R . 2 38 -2 40 , 2 43 -2 44 ) ( N A C a gr ee s in o pe n co ur t t ha t t he C om pa ny d id , i n fa ct , do w ha t i s c la im ed a nd th at th e lo ss to th e go ve rn m en t a s a re su lt of it s c on du ct is $ 4, 40 0, 00 0) ; • Fi nn er ty A ff id av it at ¶ ¶ 30 , 12 8, 1 34 , 15 2- 15 3 (R .1 10 -1 11 , 14 4, 1 46 , 15 1) ; se e al so t he Fo rf ei tu re C om pl ai nt a t ¶¶ 4 , 4 (g ) an d 6 ( R . 1 76 -1 79 ) (s et tin g fo rth t he f ac t th at A lf’ s C om pa ny , N A C , re ce iv ed f or t he p er io d of J an ua ry 1 , 19 99 t hr ou gh M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in pa ym en ts fr om th e fe de ra l g ov er nm en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to fa ls e st at em en ts re la tin g to th e se rv ic es th at N A C p ro vi de d” a nd th at s uc h fa ls e st at em en ts re su lte d in n et p ro ce ed s t o th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; “s m al l p or tio n of A lf’ s b us in es s” • Se e N A C st at em en t, da te d 10 /2 5/ 07 to M r. H er be ck ( R . 5 31 ) ( “… e ve nt s t ha t o cc ur re d w ith in a sm al l s eg m en t o f o ur [N A C ’s ] b us in es s … ”) “m ili ta ry sh ip m en ts w ith in th e co nt in en ta l U ni te d St at es ” • Fi nn er ty A ff id av it at ¶ ¶ 44 , 7 5 (R . 1 14 -1 15 , 1 25 ); se e al so th e Pl ea A gr ee m en t at ¶ 2 (R . 28 7) ( st at in g th at “ Th e pa rti es u nd er st an d th at t he g ov er nm en t’s a lle ga tio ns a nd i nv es tig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t of f re ig ht w ith in t he c on tin en ta l U ni te d St at es S- 32 (C O N U S) b y N at io na l A ir C ar go , I nc ., … .” ); • Fi nn er ty A ff id av it at ¶ 7 6 (R . 1 26 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p . 4 3 ( R. 23 6) (i n w hi ch th e C ou rt em ph as iz ed “ Th e ca ve at o r t he li m ita tio n he re o n be ha lf of th e G ov er nm en t is th at th e pa rti es s et fo rth a n un de rs ta nd in g th at th e G ov er nm en t’s a lle ga tio ns a nd in ve st ig at io n ha ve fo cu se d so le ly o n th e tra ns po rta tio n an d sh ip m en t o f f re ig ht w ith in th e U ni te d St at es … , a nd n ot a ny ot he r re la te d ac tiv ity , so o ut si de t he t er rit or ia l U ni te d St at es i s no t w ith in t he a m bi t of t hi s pl ea ag re em en t a s i t i nc lu de d th e in ve st ig at io n. ”) ; • Se e al so t he T ra ns cr ip t of P le a Pr oc ee di ng a t p. 6 3 (R . 25 6) ( in w hi ch t he U ni te d St at es A tto rn ey s ta te s in ve st ig at io n an d th e fe de ra l c rim in al o ffe ns es s ho w n in th e do cu m en ts re la te to N A C de liv er ie s “w ith in th e co nt in en ta l U ni te d St at es ” an d th at “ th e in ve st ig at io n di d no t c ov er o ut si de th e U ni te d St at es .” ). S- 33 Th e M ar ch 5 , 2 00 8 A rt ic le • A fe de ra l j ud ge h as d el ay ed se nt en ci ng fo r N at io na l A ir C ar go -- w hi ch w as s ch ed ul ed t o pa y $2 8 m ill io n Th ur sd ay i n an o ve rb ill in g ca se f or m ili ta ry c ar go it s hi pp ed - - af te r l as t-m in ut e sn ag s de ve lo pe d in ne go tia tio ns w ith th e w hi st le -b lo w er w ho f irs t c om pl ai ne d to a ut ho rit ie s. (S ee A m en de d C om pl ai nt ¶ 1 9I I.) “o ve rb ill in g” • Fi nn er ty A ff id av it at ¶ ¶ 57 , 9 4- 95 (R . 1 18 -1 19 , 1 29 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 3 1, 3 4- 35 , 3 9 ( R . 2 86 , 2 98 -3 01 ) (w he re by N A C a gr ee d to p ay $ 13 .2 m ill io n in r es tit ut io n an d pe na lti es o n th e fe lo ny c ou nt , $ 7. 37 1 m ill io n on th e Fa ls e Cl ai m s A ct c la im s a nd $ 7. 42 9 m ill io n on th e fo rf ei tu re c la im ); • Fi nn er ty A ff id av it at ¶ 1 0 (R . 1 03 ); se e al so th e Tr an sc rip t o f Pl ea P ro ce ed in g at p p. 6 6- 69 ( Id .) (R . 2 59 -2 62 ); • Fi nn er ty A ff id av it at ¶ ¶ 30 , 1 28 , 1 34 , 1 52 -1 53 (R . 1 10 -1 11 , 1 44 , 1 46 , 1 51 ); se e al so th e Fo rf ei tu re C om pl ai nt a t ¶ ¶ 4, 4 (g ) a nd 6 ( R . 1 76 -1 79 ) ( se tti ng fo rth th e fa ct th at A lf’ s C om pa ny , N A C , r ec ei ve d fo r th e pe rio d of J an ua ry 1 , 1 99 9 th ro ug h M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in p ay m en ts f ro m t he f ed er al go ve rn m en t, th at o f t ha t a m ou nt , “ it is a lle ge d $1 3, 87 0, 00 0 w as re ce iv ed b y N A C in c on ne ct io n to f al se st at em en ts r el at in g to t he s er vi ce s th at N A C p ro vi de d” a nd t ha t su ch f al se s ta te m en ts r es ul te d in n et pr oc ee ds to th e C om pa ny o f n ea rly $ 7. 5 m ill io n) ; • Fi nn er ty A ff id av it at ¶ 5 2 (R . 1 17 ); se e al so th e Pl ea A gr ee m en t a t ¶ ¶ 1, 4 (h ), 7, 1 0, 1 2, 1 9 an d 20 (R . 2 86 , 2 89 , 2 90 , 2 91 a nd 2 93 ) (s et tin g fo rth th e fa ct th at lo ss to th e go ve rn m en t a s a re su lt of N A C ’s co nd uc t w as in th e m ill io ns o f do lla rs : “ th e co ur t w ill e nt er a r es tit ut io n or de r f or th e fu ll am ou nt o f t he vi ct im ’s lo ss , w hi ch is a gr ee d to b e $4 ,4 00 ,0 00 .” (¶ 7 )); • Fi nn er ty A ff id av it at ¶ ¶ 64 -6 7 (R . 1 21 -1 23 ); se e al so th e Tr an sc rip t o f P le a Pr oc ee di ng a t p p. 4 5- 46 , 4 6- 47 , 5 0- 51 (R . 2 38 -2 40 , 2 43 -2 44 ) ( N A C a gr ee s i n op en c ou rt th at th e C om pa ny d id , i n fa ct , d o w ha t is c la im ed a nd th at th e lo ss to th e go ve rn m en t a s a re su lt of it s c on du ct is $ 4, 40 0, 00 0) ; • Se e al so F in ne rty A ff id av it at ¶ 1 56 (R . 1 52 -1 53 ); an d se e Tr an sc rip t o f 3 /6 /2 00 8 pr oc ee di ng s at pp . 3 4, 3 6 (R . 3 56 , 3 58 ) ( in w hi ch th e U ni te d St at es A tto rn ey s ta te s th at th is is a c as e in vo lv in g “i n ve ry si m pl is tic te rm s, ov er bi lli ng o f t he g ov er nm en t” a nd th at “ th e ag re ed -u po n lo ss to th e go ve rn m en t t ha t i s ag re ed b y us , a gr ee d by N at io na l A ir C ar go , a nd a gr ee d by th e ag en ci es in vo lv ed in 4 .4 m ill io n. A nd th at ’s - th at a m ou nt w ill re co m pe ns e th e go ve rn m en t f or th e su bs et o f o ve rc ha rg es th at w e fe lt w er e pa rt of th e cr im in al c on du ct .” ); • Fi nn er ty A ff id av it at ¶ ¶ 15 9- 16 1 (R . 1 53 -1 54 ); se e al so T ra ns cr ip t o f 3/ 06 /0 8 pr oc ee di ng s at p p. 4- 5 (R . 32 6- 32 7) w he re in N A C m ov ed t o de la y its o w n se nt en ci ng t o al lo w i t to r ev ie w l as t-m in ut e S- 34 ch an ge s i n se ttl em en t w ith th e “w hi st le -b lo w er .” • Th e B uf fa lo N ew s, w hi ch re po rte d th e pl ea d ea l in a t w o- da y se rie s th is w ee k, l ea rn ed t ha t th e fe lo ny pl ea N at io na l A ir C ar go en te re d in O ct ob er ca m e af te r pr os ec ut or s co nd uc te d a fe de ra l gr an d ju ry in ve st ig at io n in to c la im s th at t he c om pa ny o ve rb ill ed t he go ve rn m en t by at le as t $1 3. 8 m ill io n. (S ee A m en de d C om pl ai nt ¶ 19 H H ) “c la im s t ha t t he c om pa ny o ve rb ill ed th e go ve rn m en t b y at le as t $ 13 .8 m ill io n” • Fi nn er ty A ff id av it at ¶ ¶ 30 , 1 28 , 1 34 , 1 52 -1 53 (R . 1 10 -1 11 , 1 44 , 1 46 , 1 51 ); se e al so th e Fo rf ei tu re C om pl ai nt a t ¶ 6 ( R . 1 76 -1 79 ) ( al le gi ng th at A lf’ s C om pa ny , N A C , r ec ei ve d fo r t he p er io d of J an ua ry 1 , 19 99 th ro ug h M ar ch 2 9, 2 00 2 ov er $ 17 m ill io n in p ay m en ts fr om th e fe de ra l g ov er nm en t, an d th at o f t ha t am ou nt $ 13 ,8 70 ,0 00 w as r ec ei ve d by th e C om pa ny in c on ne ct io n w ith f al se s ta te m en ts r en de re d by th e C om pa ny re la tin g to se rv ic es p ro vi de d by N A C .