Frederick Oberlander outside U.S. District Court in Brooklyn.

Frederick Oberlander, a New York lawyer who is fighting federal prosecutors over a long-running criminal contempt investigation related to his threats to expose businessman Felix Sater's cooperation with the government, succeeded Wednesday in getting government subpoenas voided before the U.S. Court of Appeals for the Second Circuit.

A three-judge panel of the Manhattan-based federal appeals court ruled that the subpoenas, which date back to 2017, were unenforceable because they had not been issued by sitting grand juries, and a district court judge had lacked the ability to enforce a later, validly issued subpoena after a grand jury's term had expired.

The ruling came as prosecutors in the Northern District of New York continue a criminal contempt investigation into Oberlander's use of sealed material in litigation involving the Bayrock Group, a real estate company where Sater worked.

Sater, who pleaded guilty in 1998 to participating in a "pump and dump" securities fraud scheme involving the La Cosa Nostra organized crime families, initiated a civil contempt proceeding against Oberlander, alleging that he had intentionally violated an earlier Second Circuit ruling barring him from publicly disclosing any sealed information.

U.S. District Judge Brian Cogan of the Eastern District of New York in 2012 referred the matter for a criminal investigation, which is now being handled by the U.S. Attorney's Office for the Northern District.

Cogan accused prosecutors the following year of taking a lax approach to a case where it seemed one of their informants was being put in danger. Still, no charges have been brought. A recording of a recent argument before the U.S. Court of Appeals for the Second Circuit, however, made clear that an investigation is still ongoing.

Oberlander complied with portions of the government's subpoenas but still withheld some documents he said were privileged under the First and Fifth Amendments to the U.S. Constitution.

Oberlander, who is representing himself, argued before the Second Circuit in August that the grand jury that issued one subpoena of his firm had been disbanded, freeing him of any obligation to turn over records. He also challenged a lower court judge's ruling that imposed civil contempt sanctions of $1,000 per day because a second grand jury had also expired.

Judge Richard J. Sullivan, writing for the panel, on Wednesday agreed with Oberlander on both points.

"The fact that the district court ordered Oberlander to produce the documents to the government directly is of no moment, since the government is not authorized to stand in the shoes of the grand jury," he wrote in a 31-page opinion.

But, Sullivan noted, the district court did not stand "powerless in the face of Oberlander's recalcitrance and repeated violations of court orders."

"On remand, the district court is certainly free to consider whether to initiate criminal contempt proceedings against Oberlander," Sullivan said.

A new, subsequently issued subpoena, however, did tee up Oberlander's constitutional claims on a motion to quash the document demands, which all seek substantially the same information. Sullivan, who was joined in the decision by Judges Rosemary S. Pooler and Ralph K. Winter Jr., rejected those arguments, finding that the subpoenas themselves were not overly broad or issue for an improper purpose.

Reached by phone Wednesday Oberlander said, "I am obviously of mixed feelings about all of this. At the end of the day, we confirmed you can't be put in jail for failing to comply with subpoenas that do not have a grand jury beneath them."

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