United States v. Edelman

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, v. Criminal Action No. 24-239-1 (CKK) DOUGLAS EDELMAN, Defendant. MEMORANDUM OPINION (October 28, 2026) Defendant Douglas Edelman faces a thirty-count indictment charging him with conspiring to defraud the United States from 2008 to 2021, making false statements to the Department of Justice in 2016, making false statements to the Internal Revenue Service in 2018, evading taxes on his income from 2006 to 2020, and filing false reports of his foreign bank accounts with the IRS from 2007 to 2012 and again from 2015 to 2020. Edelman has pled guilty to some, but not all, of these charges. At the parties’ request, the Court has agreed to proceed to sentencing on the charges to which Edelman has pled guilty while holding the remaining charges in abeyance. At sentencing, the counts to which Edelman has pled guilty will be grouped and treated as one. Edelman’s base offense level for this count will be determined by the “total tax loss” attributable to his offense. In determining the total tax loss attributable to Edelman’s offense, the Sentencing Guidelines direct the Court to consider the tax loss attributable to all of Edelman’s “relevant conduct,” which is defined in this context as “all conduct violating the tax laws” that is not “clearly unrelated” to his offense. The parties agree that courts routinely accept as relevant conduct facts relating to uncharged counts that are proven by a preponderance of the evidence. Where they disagree is the application of that practice here. 1  For all intents and purposes, the total tax loss attributable to Edelman’s offense will be a product of the loss stemming from Edelman’s failure to report profit distributions he received from the company Mina/Red Star, which he co-founded with a Kyrgyz national to sell jet fuel to the U.S. military. It is undisputed that Edelman failed to report profit distributions from Mina/Red Star in tax years 2006 through 2020, and he is charged with a count of tax evasion for each of these years. Based on this failure and associated deceptive conduct, Edelman has pled guilty to willfully evading taxes on hundreds of millions of dollars that he received as income from Mina/Red Star during tax years 2006 through 2012. Edelman does not dispute including any tax loss from 2006 through 2012 in the calculation of the total tax loss attributable to his offense. Edelman maintains his innocence, however, with respect to the charges of tax evasion for tax years 2013 through 2020. According to Edelman, he did not receive any profit distributions from Mina/Red Star from 2013 through 2020 because he “contributed” his ownership interest in the company to his wife’s trust—the Galactea Trust—in 2013. Edelman therefore argues that the Court should only consider the tax loss stemming from tax years 2006 through 2012 in calculating the total tax loss attributable to his offense. The Government disagrees. According to the Government, the Court should include any tax loss stemming from tax years 2013 through 2020 in its calculation because the Galactea Trust was a sham trust that did not change Edelman’s economic relationship to Mina/Red Star or its profit distributions. The Government, in other words, argues that Edelman continued to receive Mina/Red Star’s profit distributions as his income from 2013 through 2020, and that the Court should therefore calculate the total tax loss attributable to Edelman’s offense by tallying the loss stemming from Edelman’s admitted 2006–2012 tax evasion and his charged 2013–2020 evasion. 2  Accordingly, to calculate the total tax loss attributable to Edelman’s offense and thereby determine his base offense level at sentencing, the Court must first determine whether the Government has shown by a preponderance of the evidence that the Galactea Trust was a sham trust that did not change Edelman’s economic relationship to Mina/Red Star or its profit distributions. If the Government fails to show that the Galactea Trust was a sham trust, then the Court will only consider the loss stemming from tax years 2006 through 2012 when calculating the total tax loss attributable to Edelman’s offense. If the Government does show that the Galactea Trust was a sham trust, however, then the Court will consider whether the Government has shown by a preponderance of the evidence that Edelman willfully attempted to evade income tax on the profit distributions he received from Mina/Red Star for tax years 2013 through 2020. And if the Government makes this second showing, then the Court will consider the loss stemming from tax years 2006 through 2020 when calculating the total tax loss attributable to Edelman’s offense. Upon consideration of the parties’ submissions, 1 evidence gathered from Edelman’s plea hearing, evidence gathered from the Court’s evidentiary hearing, the relevant legal authority, and the entire record, the Court concludes that the Government has made both showings. While the Galactea Trust was organized on paper in accordance with the applicable foreign law, the Government has shown that its purported structure did not change Edelman’s control over Mina/Red Star’s operations and the income it generated through profit distributions. The Court will therefore disregard the Galactea Trust, finding it is a sham trust. In addition, the Government 1 The Court’s consideration has focused on the transcript of Edelman’s May 21, 2025, plea hearing, Dkt. No. 79 (“Plea Hr’g Tr.”); Edelman’s Sentencing Memorandum, Dkt. No. 115 (“Def.’s Mem.”), and accompanying exhibits, including the Expert Report of John Machell, KC, Dkt. No. 119; the Government’s Sentencing Memorandum, Dkt. No. 116 (“Gov’t’s Mem.”), and accompanying exhibits, Dkt. No. 118; transcripts from the four-day deposition of Edelman’s longtime accountant Graham Collett, Dkt. Nos. 118-26–29; the Government’s Response to Edelman’s Sentencing Memorandum, Dkt. No. 125 (“Gov’t’s Resp.”); Edelman’s Response to the Government’s Sentencing Memorandum, Dkt. No. 126 (“Def.’s Resp.”), and accompanying exhibits; the Government’s additional exhibits, Dkt. No. 132; and the transcript of the Court’s April 29, 2026, evidentiary hearing, Dkt. No. 135 (“Evid. Hr’g Tr.”). 3 has shown that Edelman continued to willfully evade taxes on the Mina/Red Star profit distributions he received as income from 2013 through 2020 in much the same way he has admitted to evading taxes on the distributions he received as income from 2006 through 2012—namely, by obfuscating his ownership, making misrepresentations, and shielding his role in the spending of its income. Accordingly, at sentencing, the Court shall consider any tax loss stemming from tax years 2006 through 2020 when calculating the total tax loss attributable to Edelman’s offense. I. BACKGROUND A. Factual Background On May 21, 2025, Edelman entered, and the Court accepted, his partial plea in open court. See Plea Hr’g Tr., Dkt. No. 79. In doing so, Edelman pled guilty to conspiring to defraud the United States from 2008 through 2021 (Count One); making false statements to the Internal Revenue Service in October 2016 (Count Two); making false statements to the Department of Justice in March 2018 (Count Three); and willfully attempting to evade and defeat income taxes for tax years 2006 through 2012 (Counts Four through Ten). See id.; Indictment, Dkt. No. 1. All facts drawn from Edelman’s plea hearing are facts that Edelman has admitted to. Following Edelman’s plea, the Court held an evidentiary hearing to determine whether the Galactea Trust was a sham trust and, if so, whether Edelman willfully evaded taxes on his income for tax years 2013 through 2020. See Evid. Hr’g Tr., Dkt. No. 135. In preparation, the parties submitted briefs and introduced evidence into the record. See Def.’s Mem., Dkt. No. 115 (and accompanying exhibits); Gov’t’s Mem., Dkt. No. 116 (and accompanying exhibits); Def.’s Resp., Dkt. No. 126 (and accompanying exhibits); Gov’t’s Resp., Dkt. No. 125 (and accompanying exhibits). When referencing evidence drawn from the evidentiary hearing and the parties’ submissions, the Court shall identify the source of the evidence and indicate whether the evidence is undisputed, unopposed, or disputed. 4  1. The Rise of Mina/Red Star In the 1990s and early 2000s, Douglas Edelman was living and working as a commodities trader in Bishkek, Kyrgyzstan. Plea Hr’g Tr. at 17:19–18:13. Following September 11, 2001, the U.S. military began using the Manas Air Base near Bishkek to supply U.S. troops in the Middle East. Plea Hr’g Tr. at 17:19–18:13. This led to a need for jet fuel. Id. Drawing on his connections in the region, Edelman and a Kyrgyz national named Erkin Bek bid on and won a contract with the U.S. Department of Defense (“DOD”) to provide jet fuel to the U.S. military. Id. at 18:15–25. And so began the company that would come to be known as Mina/Red Star. Edelman and Bek won their initial contract with the DOD in the name of Red Star Enterprises Limited, which was a Canadian company owned by Bek. Id. Edelman invested hundreds of thousands of dollars to fund Red Star’s startup costs and early operations through two other companies that he owned: Aspen Wind Corporation and Bartol Limited. Id. at 19:3–21. Red Star grew quickly and continued to win contracts to supply the U.S. military with jet fuel. Id. In 2003, Edelman created a sister company to Red Star named Mina Corp Limited. Id. at 19:22–20:4. Mina Corp was incorporated in Gibraltar. Id. In 2004, Edelman reincorporated the Red Star entity in Gibraltar as well. Id. These entities were known collectively as Mina/Red Star, which was owned in a 50/50 partnership between Edelman and Bek. Id. From the founding of Mina/Red Star through 2008, Edelman routinely executed bank documents showing that he was the ultimate beneficial owner (“UBO”) of his half of Mina/Red Star. Id. at 20:5–12. Edelman began receiving profit distributions from Mina/Red Star once it became profitable in 2005. Id. From 2005 to 2008, Edelman used Swiss bank accounts for his companies Aspen Wind and Bartol to receive profit distributions from Mina/Red Star. Id. These accounts were primarily with Credit Suisse. Id. Edelman used his profit distributions, among other things, to send money to his U.S. family members, invest in other businesses, and purchase 5 property around Europe, including a home in Ibiza, Spain. Id. at 20:15–21. The Government has introduced evidence showing that, from 2006 through 2008, the Swiss bank accounts for Aspen Wind and Bartol received approximately $50,000,000 in profit distributions from Mina/Red Star. Gov’t’s Mem. at 5 (citing Gov’t’s Ex. 25-1, Dkt. No. 118-9). Edelman does not dispute the accuracy of this evidence. Evid. Hr’g Tr., Dkt. No. 135 at 7:18–8:6. Although these Swiss accounts were not in Edelman’s name, Edelman was the ultimate beneficial owner. Plea Hr’g Tr. at 20:22–21:7. In November 2008, Credit Suisse notified Edelman’s longtime accountant Graham Collett that, due to U.S. law enforcement activity regarding the use of Swiss banks for tax evasion, Edelman had to either disclose to U.S. authorities that his accounts belonged to a U.S. person or close his accounts and transfer the balance elsewhere. Id. Edelman chose the latter. In December 2008 and January 2009, Edelman, with the assistance of Collett, moved his funds from Credit Suisse to an account he had recently opened at Bank Julius Baer in Singapore under the name of the Sunage Foundation. Id. 21:8–22:3. The Sunage Foundation was a Panamanian entity that Edelman created in April 2008. Id. The Government and Edelman’s counsel have both explained that, under Panamanian law, a “foundation” operates much like a trust. See Evid. Hr’g Tr., Dkt. No. 135 at 8, 23. The purported beneficiaries of the Sunage Foundation were Edelman’s French wife, Delphine Le Dain, and their children. Plea Hr’g Tr. at 21:8–22:3. But Edelman has admitted that this structure was a sham and that he was the ultimate beneficial owner of the Sunage Foundation. Id. Starting in 2009, Edelman began directing his Mina/Red Star profit distributions to the Sunage Foundation. Id. at 21:8–25. The Government has introduced evidence showing that, in 2009 and 2010, the Sunage Foundation account at Bank Julius Baer received approximately $48,000,000 in distributions from 6 Mina/Red Star. Gov’t’s Ex. 25-1, Dkt. No. 118-9. Edelman does not dispute the accuracy of these figures. Evid. Hr’g Tr. at 7:18–8:6. And he admits to being the ultimate beneficial owner of this account. Plea Hr’g Tr. at 21. In 2010, the House of Representatives’ Committee on Oversight and Government Reform, Subcommittee on National Security and Foreign Affairs (the “Subcommittee”), began investigating allegations of corruption in connection with Mina/Red Star’s contracts with the Department of Defense. Plea Hr’g Tr. at 22:4–13. As part of this inquiry, the Subcommittee became interested in the identity of Mina/Red Star’s owners. Id. At this point, Edelman had not filed U.S. tax returns to report the millions of dollars he had earned from Mina/Red Star and had not paid U.S. taxes on his income. Id. at 22:14–23:1. Edelman has admitted that, rather than disclose his ownership of Mina/Red Star, he caused his attorneys to tell the Subcommittee a false story that his wife, Le Dain, (i) founded Mina/Red Star with Bek, (ii) owned 50 percent of Mina/Red Star, and (iii) held her interests through the Sunage Foundation. Id. This false story was beneficial to Edelman because Le Dain’s French citizenship meant she had no U.S. tax obligations for her income earned outside the United States. Id. According to testimony from Edelman’s longtime accountant Collett, Edelman made it clear to those he worked with that this false story would be “the party line” going forward. See Collett Dep. (Feb. 4, 2025), Dkt. No. 118-27 at 86:2–13. Collett further admitted to going along with the party line even though it contradicted the documents he had seen and the experience that he had in his years of working on these businesses with Edelman. See Collett Dep. (Feb. 5, 2025), Dkt. No. 118-28 at 45:8–12. While causing these false representations to be made to the Subcommittee, Edelman, with the assistance of Collett, caused the creation of false and backdated paperwork to corroborate Le Dain’s purported ownership of Mina/Red Star and remove his name from the Sunage bank account 7 at Bank Julius Baer. Plea Hr’g Tr. at 23:2–7; see also Gov’t’s Mem. at 7 (citing Collett Dep. (Feb. 4, 2025) at 9–60; Collett Dep. (Feb. 5, 2025) at 14–50)). During the solicitation of a contract worth hundreds of millions of dollars with the U.S. Department of Defense (“DoD”) in late 2010, the DoD asked Mina/Red Star for the identity of the company’s owners. Id. at 23:10–20. In response, Edelman caused Mina/Red Star to falsely certify that it was owned by Le Dain and Bek. Id. The DoD again asked Mina/Red Star to identify its owners during the solicitation of another contract worth hundreds of millions of dollars in 2011, and Edelman again caused Mina/Red Star to falsely certify that it was owned by Le Dain and Bek. Id. From 2010 through late 2012, Edelman continued to direct his profit distributions from Mina/Red Star into the Sunage Foundation account. Id. at 23:22–24:5. The Government has introduced evidence showing that, in 2011 and 2012, Edelman earned approximately $65 million in income from Mina/Red Star. Gov’t’s Mem. at 7 (citing Gov’t’s Ex. 25-1, Dkt. No. 118-9). This brought Edelman’s total income from 2006 through 2012 to over $168 million. Id. Edelman did not file any tax returns during this time, although he did consult a tax attorney in 2010. Id. (citing Collett Dep. (Feb. 4., 2025) at 64–5, 82–8). Edelman spent his income from Mina/Red Star in a variety of ways throughout 2006 to 2012. For instance, he has admitted to using his Mina/Red Star income from this time to make a variety of investments, including investments in a music television franchise in Eastern Europe, a land venture in Tulum, Mexico, and a farm in Kenya. Plea Hr’g Tr. at 23:22–24:5. He has also admitted to using his Mina/Red Star income from this time to make personal purchases, such as a luxury townhome in London. Id. Testimony from Edelman’s longtime accountant Collett—whom Edelman used to make many of these investments and purchases—provides additional examples. For instance, Collett testified that Edelman used income generated from Mina/Red Star to purchase 8 a ski chalet in Austria and a house in Ibiza, Spain. Collett Dep. (Feb. 4, 2025) at 128–37; Collett Dep. (Feb. 6, 2025) at 18–9. Collett also explained that Edelman purchased hundreds of thousands of dollars of Palantir shares. Collett Dep. (Feb. 4, 2025) at 135–8. Edelman also gave $580,000 to his son from a previous marriage. Collett Dep. (Feb. 3, 2025) at 122–24. “On paper we will structure it as a loan to his Company,” he directed Collett over email regarding the gift to his son, “This is mainly for his tax purposes, as I am really just giving him the money.” Id. at 123–24. In detailing how Edelman directed the transfer of funds from various accounts to pay for his purchases and investments, Collett explained that Edelman was careful not to own any of the property he purchased in his own name. See Collett Dep. (Feb. 4, 2025) at 101–44; Collett Dep. (Feb. 3, 2025) at 108. A 2008 email from Edelman to Collett provides a good example. See Gov’t’s Ex. 14-31, Dkt. No. 132-1. Edelman opened the email by asking Collett to “handle” his purchase of an $11 million house in London, adding that they “simply need[ed] to decide who is the best for ownership, for tax purposes // wife and kids maybe . . . i do have a foundation?” Id. Edelman then detailed some of his anticipated spending over the coming months—“at least 2 million” on a Billy Graham movie and “1 million or 1.5 million” to purchase MTV networks in Eastern Europe. Id.; Collett Dep. (Feb. 3, 2025), Dkt. No. 118-26 at 109. Edelman concluded by assuring Collett, who would be the one directing these payments, of the financials: there would be “another usd 5 million [arriving] to bartol in the next couple of days,” and if more was needed, Edelman “[had] other amounts [he could] lay [his] hands on pretty easily, so all should be ok.” Id. 2. The Restructuring of Mina/Red Star and the Galactea Trust As indicated above, Edelman admits that, in 2003 and 2004, he incorporated Mina/Red Star in Gibraltar and owned the business in 50/50 partnership with Erkin Bek until 2012. See Plea Hr’g Tr. at 19:22–20:4. He admits that, in 2010 and 2011, he spread the false narrative—to, among others, Congress and the Department of Defense—that his wife, Le Dain, founded Mina/Red Star 9 with Bek and owned it as Bek’s partner, and that he later helped create false, backdated paperwork and even attempted to change Gibraltar’s public registration database to corroborate this false narrative. Id. at 22–24, 28. And he admits that, for tax years 2006 through 2012, he willfully evaded taxes on the hundreds of millions of dollars he earned as Mina/Red Star’s co-owner by (i) making false statements to U.S. authorities; (ii) using nominees to conceal income and assets; (iii) creating false documents; (iv) closing accounts and moving funds to avoid his name being disclosed to U.S. authorities; (v) providing false information to banks, attorneys, and tax return preparers regarding his income, assets, financial accounts, and the historical ownership of Mina/Red Star; and (vi) filing false tax returns. Id. at 29–30. Edelman also admits that he did not report income from Mina/Red Star on his returns for tax years 2013 through 2020. Id. at 26:22–27:25. But he does not admit to the charges of tax evasion for those years. That is because, according to Edelman, he did not owe any taxes on Mina/Red Star’s income after he “contributed” his 50% share in the company to a trust—the Galactea Trust—in 2013. See Def.’s Resp. at 3; Evid. Hr’g Tr. at 20. Edelman’s purported transfer of his 50% share in Mina/Red Star to the Galactea Trust coincided with a broader restructuring at Mina/Red Star that began in 2012—what Collett referred to as a “new regime.” Collett Dep. (Feb. 4, 2025) at 98; see also Gov’t’s Mem. at 9. Collett testified that, as part of this new regime, Mina/Red Star’s business was “transferred out” of the Gibraltar-based entities that Edelman formed in 2003 and 2004 and “into a new structure” that involved numerous layers of ownership. Id. At the core of this new structure was the new Mina Petroleum, now incorporated in the UAE, and the new Red Star Enterprises, now incorporated in Hong Kong—referred to collectively, again, as Mina/Red Star. Gov’t’s Ex. 4-5, Dkt. No. 118-1 at 16. The entities forming the new Mina/Red Star were owned by a BVI company called 10 Yellowstone Resources Management Limited (“Yellowstone”), which was in turn owned by a BVI partnership called Global Resources Worldwide LP (“Global Resources”), half of which was owned by a BVI company called Rosbelt International Limited (“Rosbelt”). Id. Through its ownership of Rosbelt, the Galactea Trust owned 50% of Mina/Red Star, at least on paper. Id. Edelman claims that he “contribut[ed]” his 50% share in Mina/Red Star to the Galactea Trust. See Def.’s Resp. at 3 (where Edelman argues that “[t]he government now bears the burden of proving that during 2013-2020, following his contribution of [Mina/Red Star] to his wife’s trust, all the income earned during those late years was actually his”); Evid. Hr’g Tr. at 20 (where Edelman’s counsel confirms that the phrase “his wife’s trust” means the Galactea Trust). But there is no evidence in the record of Edelman contributing his 50% share in Mina/Red Star to the Galactea Trust. Instead, the record shows that the law firm responsible for vetting the Galactea Trust—Mishcon de Reya—was told the same lie about Mina/Red Star’s ownership that Edelman had been telling since the congressional investigation in 2010: that Le Dain already owned 50% of Mina/Red Star through the Sunage Foundation. 2 See Gov’t’s Ex. 4-5, Dkt. No. 118-1 at 54 (Mishcon de Reya’s report regarding the organization of the Galactea Trust); Collett Dep. (Feb. 5, 2025) at 44–5 (where Collett testifies that Edelman lied to the outside attorneys that created the Galactea Trust by telling them that Le Dain had always been the 50% owner of Mina/Red Star). The record also shows that the firm responsible for organizing the Galactea Trust was told the same lie. See Def.’s Ex. 15, Dkt. No. 126-3. In other words, the record, at least in isolation, appears to render Edelman’s claim that he contributed his 50% share of Mina/Red Star to the 2 As the Government points out, this shows an additional falsity, as “[e]ven Edelman and Collett’s 2010 attempts to create backdated documents [for Mina/Red Star] only stated that Le Dain had been the owner, not the Sunage Foundation.” Gov’t’s Mem. at 10 n. 5 (citing Gov’t’s Ex. 14-50, Dkt. No. 118-4). While Edelman had discussed transferring his 50% ownership of Mina/Red Star to the Sunage Foundation in 2010, he ultimately decided not to do so because it would have “show[n] real time[] dates.” Gov’t’s Ex. 14-49, Dkt. No. 118-3. 11 Galactea Trust an impossibility, as the Galactea Trust’s organizing documents show that those responsible for creating the Galactea Trust acted under the misrepresentation that Le Dain already owned 50% of Mina/Red Star. Edelman offered an explanation for this apparent discrepancy during the evidentiary hearing: “he had been lying about [his ownership of Mina/Red Star] before,” so “he continued that lie.” Evid. Hr’g Tr. at 20:17–21. More to the point, Edelman “agree[s] that he lied to [the Galactea Trust’s trustee] about whether he owned [Mina/Red Star,] [a]nd that is why the KYC documentation says his wife owned it.” Id. at 21:3–4. While this explanation raises additional questions about Edelman’s relationship with the Galactea Trust’s trustee, it aligns with the other evidence in the record. For instance, in January 2012, Edelman emailed Collett a litany of lies to “write and present” to Mina/Red Star’s general counsel “to put [him] into the picture” about Mina/Red Star’s restructuring, including: that Mina/Red Star “was seeded and has always been owned by Le Dain . . . and another shareholder”; that Edelman was “NOT the beneficial owner and has never been paid dividends”; that Edelman “did not operate the [Mina/Red Star] account at all and worked on an advisory basis to Le Dain”; that “those who filled out the various forms” at Mina/Red Star “mistakenly . . . used the name of douglas edelman . . . as the shareholder and true beneficial owner of the company”; and that “in fact [Edelman] was only fully recently advised that his name appears on the account.” Gov’t’s Ex. 24-1, Dkt. No. 118-8 (cleaned up). The deed of settlement for the Galactea Trust was executed on December 23, 2012, upon the false foundation that Le Dain owned 50% of Mina/Red Star and would be granting it to the Trust. See Def.’s Ex. 2, Dkt. No. 119-10 (the “Galactea Deed”). The deed identifies the grantor as Delphine Le Dain, Edelman’s wife. Id. at 2. It identifies the original trustee as Salamander Associates Limited, id., which was “a professional trust administration company organized under 12 the laws of the British Virgin Islands” that was “owned and operated” by Leonard O’Brien, Def.’s Mem. at 22. 3 And it identifies the original protector as Graham Collett, Edelman’s longtime accountant. Galactea Deed at 2. The Trust was governed by the laws of either the British Virgin Islands (BVI) or England & Wales during the relevant period. See Def.’s Mem. at 17; Def.’s Expert Rep., Dkt. No. 119-1. But the Government does not dispute whether the Galactea Trust was organized on paper in accordance with the requirements of the applicable foreign law. See Gov’t’s Resp. at 3. Rather, “the core of the government’s allegation is that Edelman intentionally created a complex web of foreign trusts and entities in order to hide behind, precisely so that he could obscure his income and ownership” of Mina/Red Star. Id. at 3–4. 3. Edelman and Mina/Red Star Post-Galactea Trust On paper, the Galactea Trust owned half of Mina/Red Star in partnership with Erkin Bek starting, at the latest, on December 23, 2012. See Galactea Deed, Def.’s Ex. 2, Dkt. No. 119-10. But the Government argues that “[t]he new trust structure did not change anything with respect to Edelman’s running the business, receiving distributions, and spending the funds.” Gov’t’s Mem. at 10. The Government’s argument finds support in the record, which shows that Edelman continued to exercise significant influence and control over Mina/Red Star’s operations following the restructuring. For instance, a January 2015 email chain shows Edelman, Bek, and their Mina/Red Star associate Steve Buscher—who was “engaged with [Bek] and [Edelman] is crafting a new BOD”—discussing whether to terminate Mina/Red Star’s CEO (Graham O’Donoghue) and 3 As Edelman explains, Salamander Associates acted as trustee of the Galactea Trust from 2012 to November 2019. Def.’s Mem. at 22. A November 2019 amendment replaced Salamander Associates with Salamander Corporate Services SA, which was a Swiss company also owned and operated by Leonard O’Brien. Id. When referring to the purported trustee of the Galactea Trust, the Court shall simply refer to Leonard O’Brien or “Salamander.” 13 CFO (Zack Friedman) and their potential severance packages. 4 Gov’t’s Ex. 25-2, Dkt. No. 118- 10 at 1. The discussion opens with Buscher reporting to Edelman and Bek—referring to them collectively as “D&E”—that O’Donoghue “seem[ed] . . . ‘weary’ from trying to fulfill your expectations.” Id. at 3. The conversation then moves to Friedman, with Buscher writing that O’Donoghue had told him that “D&E made it clear that if [Friedman] didn’t work out, it was on [O’Donoghue’s] shoulders, and [O’Donoghue would] take the heat if D&E want[ed] to get rid of [Friedman].” Id. at 2. The discussion ends with Edelman—writing from the email, “de@ledain.ch”— giving direction on next steps: “Let’s be fair and reasonable, let [Friedman] go for sure . . . [and] do right by [O’Donoghue] as I think despite everything he did a good job in organising [sic] and cleaning up some situations that he walked into. I suggest we just get these figures clear and move it forward from there.” Id. at 1. A few months later, Edelman sent Bek a long email—this time from the email address, “worldnet44@yahoo.com”— expressing his concern over “how much cash we are burning every day,” particularly on employees. Def.’s Ex. 14, Dkt. No. 126-2 at 2. “Bottom line is we MUST run the business at a profit as it will make even more difficult to find loans and or potential buyer’s or investors,” Edelman wrote, adding, “Let’s review literally everyone .. I’m sure we will find loads of expenses we pay every day and every month that are not essential.” Id. Bek, responding in all caps, agreed regarding employee compensation. Gov’t’s Ex. 25-3, Dkt. No. 118-11 at 2 (“WE DEFINITELY NEED TO REVISE COMPENSATION PACKAGES.”). Bek also suggested that he and Edelman consolidate control over Mina/Red Star: “I WAS WONDERING FOR US TO CONSIDER AND DECIDE FOR SOMEONE BETWEEN YOU AND I TO TAKE ULTIMATE POWER SO WE CAN CUT OUT INEFFICIENCIES,” wrote Bek, “AND JUST 4 The Government represents that the individuals mentioned in these emails were Mina/Red Star’s CEO and CFO. Gov’t’s Mem. at 10. Edelman does not dispute this representation. 14 HAVE ONE DECIDER OF EVERYTHING, A CONTROLLING HOLDER.” Id. Bek further explained to Edelman that it “might be relevant for one partner to take out all his equity and lower stake to 25pct for instance and for the other controlling stakeholder to manage the company BECAUSE WE NEED SOME SERIOUS NO JOKING LEADERSHIP.” Id. Edelman agreed with his partner’s assessment: “You and I need to speak with a single voice and give serious solid directions and instructions to people asap,” he said, adding that he was going to ask one of Mina/Red Star’s employees for “deep accounting information” so he could “analyse [sic] it all.” Id. at 1. Edelman’s influence and control over Mina/Red Star appeared to extend beyond its internal business operations even after his half of the company was purportedly transferred to the Galactea Trust. In July 2016, Edelman—this time writing from the email address, “globalspec1@yahoo.com”—discussed selling Mina/Red Star with Bek, explaining that it would be “very difficult” to sell some of the company but that he had “an idea what I’d accept.” 5 Gov’t’s Ex. 25-4, Dkt. No. 118-12. Mina/Red Star’s employees also appeared to treat Edelman as the part- owner of Mina/Red Star even though Le Dain, through the Galactea Trust, was the part-owner on paper. When the DoD asked Mina/Red Star for the phone numbers of its owners in 2018, an employee emailed Erkin Bek and Edelman asking them to “share [their] respective cell numbers (ie, Erkin and Delphine 6).” Gov’t’s Ex. 25-5, Dkt. No. 118-13 at 1 (emphasis added). The employee appeared to apologize for requesting the phone numbers, explaining that they had “pushed as much as we could” and had the DoD agree to forgo other informational items “such as . . . ownership start date” before adding, “do not know if they will try calling the numbers, but 5 Edelman does make a passing reference to a trust in this exchange, writing that “their [sic] is a preference by the Trust to sell and enter into other things.” Id. at 3. 6 Le Dain’s first name. 15 better be ready in case someone does call.” Id. Edelman provided Le Dain’s landline in response, explaining that she “rarely uses” a cell phone. Id. As to the prospect of Le Dain receiving a phone call from the DoD, Edelman said that he was “not sure what she say [sic] if she got a call” because she was “so ‘not involved.’” Id. The record indicates that the restructuring of Mina/Red Star did not appear to change Edelman’s relationship with Mina/Red Star’s profit distributions, either. A February 2016 exchange between Edelman and Bek shows that Edelman was directing dividend distributions following the restructuring. “I like jerome or whomever to issue dividends . . . 2m each side” Edelman wrote to Bek, adding that they needed to “use credit lines and not be so lazy and quite [sic] using cash.” Gov’t’s Ex. 25-6, Dkt. No. 118-15. Moreover, Edelman admits that the Sunage Foundation—which Edelman admits was a “sham” trust that he used to receive Mina/Red Star distributions—continued to receive distributions from Mina/Red Star after the Galactea Trust was created and purportedly owned those distributions. Evid. Hr’g Tr. at 22–23. Specifically, the record shows that Edelman’s Sunage Foundation account at Bank Julius Baer received the following payments from Mina/Red Star after the Galactea Trust was created: an April 2013 transfer of $2,789,654.72 for “Dividends”; a December 2013 transfer of $15,000,000 for a “Shareholder Distribution”; a March 2014 transfer for $3,000,000 for a “Shareholder Distribution”; and another March 2014 transfer for $12,000,000, again for a “Shareholder Distribution.” See Gov’t’s Ex. 25-1, Dkt. No. 118-9 at 2. Edelman chalks this up to an accounting error. Id. at 23:21–23 (“. . . they messed around with the bank accounts and continued to send money out to Sunage . . .”). Whatever the reason, the record gives no indication that he attempted to correct this nearly $33 million accounting error. 16  Collett testified that Edelman also continued to direct where Mina/Red Star’s distributions would be sent following the creation of the Galactea Trust. In 2013, Bank Julius Baer—the bank housing Edelman’s Sunage Foundation account—was acquired by the American bank Merrill Lynch. See Collett Dep. (Feb. 3, 2025), Dkt. No. 118-26 at 144–45. A representative from Bank Julius Baer informed Edelman and Collett that this had “changed the whole philosophy” of the bank, and that these “changes could have consequences in terms of disclosure.” Id. Collett testified that this representative advised Edelman to move his money to Mirabaud Bank in Dubai, where the representative would be joining, and that Edelman did so. Id.; see also Collett Dep. (Feb. 4, 2025), Dkt. No. 118-27 at 104–05. Evidence in the record shows that, starting in 2014, Mina/Red Star’s dividends stopped going to the Sunage Foundation account at Bank Julius Baer and were instead sent to an account at Mirabaud Bank in the name of Rosbelt International. See Gov’t’s Ex. 25-1, Dkt. No. 118-9. The record shows that, from February 2014 to September 2016, approximately $60,825,306 in “Dividends” went to the Rosbelt International account at Mirabaud Bank. Id. Edelman does not dispute the accuracy of this evidence. Evid. Hr’g Tr. at 7:18–8:6. Starting in 2016, Mina/Red Star’s distributions stopped going to the Rosbelt account at Mirabaud Bank and instead began flowing to another Rosbelt account at Banque J. Safra Sarasin (“Safra Sarasin”) in Luxembourg. See Gov’t’s Ex. 25-1, Dkt. No. 118-9. Collett testified that Edelman made the decision to close the Mirabaud Bank account and move the funds to the Safra Sarasin account because one of Edelman’s agents had “negotiated arrangements” with Safra Sarasin. Collett Dep. (Feb. 5, 2025), Dkt. No. 118-28 at 79–80. An email exchange between Edelman and Collett in late 2015 corroborates Collett’s testimony regarding Edelman’s relationship to the Galactea Trust and the decision to leave Mirabaud Bank in favor of Safra Sarasin. See Gov’t’s Ex. 11-5, Dkt. No. 118-2. The exchange opens with an email from the 17 aforementioned representative of Mirabaud Bank to Edelman, Collett, and Leonard O’Brien (the trustee of the Galactea Trust) in which the representative expresses concern over their failure to meet their investment obligations, writing: It’s this time of the year that the management looks at the accounts to see if they are in line with the strategic objectives of the bank. As you may recall, earlier this year I sent numerous emails noting that the account has not fulfilled the fund investment objective agreed with the principal and mandated by Yves Mirabaud in summer 2014 as a condition for account acceptance. Effectively, all my requests to top up the fund positions have been ignored for the last 12 months and we are now USD10.5mn short of the agreed fund investment level. Not only are we not in line with the original agreement by a large margin (only 2.5m invested so far), but you are also sitting on cash and missing out on returns. I kindly request you to treat this email with the utmost urgency and revert to me by Friday, Nov 13th, with regards to fulfilling the investment criteria. Id. at 1. Collett then emails Edelman directly—removing O’Brien, the trustee, from the email chain—to ask for a catch-up call, explaining that “we have some big cash calls coming up” before adding: “I have been watching the RS position quite closely with particular regard to the loan and possible shareholder distributions going forward. Will elaborate more when we speak. Meanwhile we have 30m in total reserves right now.” Id. Edelman responds by listing a variety of investments he was considering before directing Collett to “open today or next week asap the new accounts and we just leave mirabaud.” Id. Collett ends the conversation by agreeing about Mirabaud— explaining that “they are getting too pushy”—before reemphasizing that he was “quietly seeing what we can possibly get out of RS in the short term.” Id. Collett testified that “RS” referred to Red Star Enterprises. Collett Dep. Tr. (Feb. 5, 2025) at 77–78. Edelman does not dispute the accuracy of the evidence in the record showing that, from 2016 t