Ex-SEC enforcement chief Khuzami named No 2 NY prosecutor

NEW YORK • US President Donald Trump’s Justice Department pressed ahead with a leadership makeover atop the federal prosecutor’s office that oversees Wall Street, naming a former Securities and Exchange Commission (SEC) enforcement chief to the No 2 post in the US Attorney’s office in Manhattan.

The appointment of Robert Khuzami as deputy US attorney was announced last Friday by Geoffrey Berman, whose instalment as interim Manhattan US attorney two days earlier drew criticism from Democratic lawmakers.

Khuzami previously spent 12 years as a Manhattan federal proscutor, including three as chief of the securities fraud unit, until 2002.

Earlier in their careers, Khuzami and Berman worked as federal prosecutors in Manhattan and remain close friends.

The Manhattan office handles major financial, public corruption and international terrorism cases, making it perhaps the US Justice Department’s most elite outpost. Berman’s appointment, announced on Jan 3, has stirred criticism because it didn’t follow the traditional path of Senate nomination and confirmation, and raised questions about whether he could act independently from the Trump administration.

The office’s role overseeing the global financial capital of New York — and the president’s hometown — creates potentially tricky situations. It is involved in several investigations potentially affecting Trump, including one of Deutsche Bank AG, where Khuzami worked from 2002 to 2009 as general counsel of its Americas unit.

Respected Veteran

In bringing back a veteran of the office and a respected enforcement figure, Berman’s move may assuage many of those concerns. At the SEC from 2009 to 2013, Khuzami, 61, helped overhaul the agency after it was battered for lax enforcement leading up to the financial crisis, expanding investigators’ power and creating specialised units to police Wall Street.

During his years as a federal prosecutor, Khuzami was known for a series of high-profile terrorism cases, including that of Sheikh Omar Abdel-Rahman, the Egyptian cleric tied to the 1993 World Trade Centre bombing. Khuzami was awarded one of the Justice Department’s highest honours for his work on the case. In 2000, he helped convict Pat- rick Bennett, the former CFO of Bennett Funding Group Inc, in an equipment-leasing fraud that sent him to prison for 22 years.

Since 2013, Khuzami has been a partner in the government and internal investigations practice at law firm Kirkland & Ellis. He didn’t immediately respond to a message left at his law office.

It’s unclear whether Khuzami would be involved in cases involving Deutche Bank. The bank is the subject of a long-running criminal probe by Manhattan prosecutors and the Justice Department into trades that US authorities have said helped move some US$10 billion (RM39.9 billion) out of Russia from 2011 to 2015. The investigation promises to be the last and potentially biggest reckoning for the bank over trades that the UK, US and New York state regulators have already faulted for lax money-laundering controls. — Bloomberg