In December 2009, after Mr. Baker had spent five months in a German jail, United States marshals flew him to Chicago, where he was booked into the Metropolitan Correctional Center. Months passed as he awaited a trial date, and Mr. Baker learned the prison’s rhythms. The most important thing, he said, was to convince other inmates that he was not a child molester. He told them he was a Wall Street crook.
Prosecutors thought they had a clear-cut case against him. But in April 2010, the court-appointed receiver overseeing Lake Shore’s bankruptcy issued a report that said Mr. Kurgan was a part owner of Lake Shore and its affiliates and had played an official role at the companies. That clouded the prosecution narrative that Mr. Baker had acted on his own.
Clifford C. Histed, the lead prosecutor on the case, summoned Mr. Baker to discuss the report. Mr. Baker argued that it proved he did not deserve to be punished alone. And he said the commodities trading commission was making Lake Shore a scapegoat, flexing its enforcement muscles after failing to prevent other hedge funds from blowing up.
Mr. Histed told him to provide proof.
Mr. Baker, using a computer in the prison library, spent months sifting through electronic documents before presenting his case to Mr. Histed.
The prosecutor did not agree that Mr. Baker was the victim of a government conspiracy. But in Mr. Baker’s final plea agreement, prosecutors said Mr. Baker did have a partner, described as “Individual A,” who had misrepresented Lake Shore’s returns and misappropriated money. “Individual A” refers to Mr. Kurgan, according to a person involved in the investigation who was not authorized to speak publicly about the plea document.
Mr. Baker and his lawyer, Daniel L. Rashbaum, a former prosecutor, were running out of legal options. Then Mr. Baker remembered the Canadian treaty he had learned about in Germany.
Starting in the late 1970s, the United States had entered into a series of treaties that established protocols for cross-border prisoner transfers. One catalyst was the nonfiction book “Midnight Express,” the basis of a 1978 movie, about a young American imprisoned in Turkey.
From 2005 to 2010, the Justice Department rejected 97 percent of all transfer applications, according to a 2011 government report. One reason was that federal prosecutors often opposed transfers on the grounds that prisoners did not serve their full sentences if transferred.
That gave Mr. Rashbaum an idea. If he could get the United States attorney’s office to support a transfer to Canada, perhaps Justice Department officials in Washington would go along with it. And the Canadians, Mr. Rashbaum recalled thinking, were likely to let Mr. Baker out quickly. In that case, the length of his sentence in America wouldn’t matter.
Mr. Rashbaum approached Mr. Histed with a proposal: Mr. Baker would admit guilt and accept a 20-year prison sentence, with no chance for parole, if the prosecutors did not object to him being transferred to Canada.
Mr. Histed said in an interview that he knew the defense hoped the maneuver would result in Mr. Baker’s freedom, but he doubted it would work. And more important, he knew that going to trial would be time-consuming and risky for the government, in part because Mr. Baker could raise questions in front of a jury about why he alone was on trial.
So Mr. Histed agreed to the deal. “What mattered to us was that he be brought to justice in the United States,” he said in an interview.
On Aug. 24, 2011, Mr. Baker was presented a plea agreement to sign. He was nervous; his lawyer was terrified. “The horror of pleading someone to 20 years based on a creative plan scared the living daylights out of me,” Mr. Rashbaum said.
Mr. Baker took a deep breath and signed the document. Mr. Rashbaum walked out to the parking lot and vomited.
source : CNBC