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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

) No. 2:18-cr-00422-DJH

Plaintiff, )

)

vs. ) Phoenix, Arizona

) October 23, 2023

Michael Lacey, et al. ) 9:07 a.m.

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE DIANE J. HUMETEWA, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

TRIAL - DAY A.M. SESSION

Official Court Reporter:

Hilda Elizabeth Lopez, RMR, FCRR

Sandra Day O'Connor U.S. Courthouse, Suite 312

401 West Washington Street, Spc 30

Phoenix, Arizona 85003-2151

(602) 322-7256

Proceedings Reported by Stenographic Court Reporter

Transcript Prepared by Computer-Aided Transcription

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UNITED STATES DISTRICT COURT

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A P P E A R A N C E S

For the Government:

UNITED STATES ATTORNEY'S OFFICE

By: Mr. Kevin M. Rapp, Esq.

Mr. Peter S. Kozinets, Esq.

Mr. Andrew C. Stone, Esq.

Ms. Margaret Wu Perlmeter, Esq.

40 North Central Avenue, Suite 1200

Phoenix, Arizona 85004

kevin.rapp@usdoj.gov

peter.kozinets@usdoj.gov

andrew.stone@usdoj.gov

margaret.perlmeter@usdoj.gov

For the Government:

UNITED STATES DEPARTMENT OF JUSTICE

By: Mr. Austin Berry, Esq.

1301 New York Avenue, NW, 11th Floor

Washington, DC 20005

austin.berry2@usdoj.gov

For the Defendant Michael Lacey:

LIPSITZ GREEN SCIME CAMBRIA, L.L.P.

By: Mr. Paul J. Cambria, Jr., Esq.

42 Delaware Avenue, Suite 120

Buffalo, NY 14202

pcambria@lglaw.com

For the Defendant Scott Spear:

FEDER LAW OFFICE, P.A.

By: Mr. Bruce S. Feder, Esq.

2930 East Camelback Road, Suite 160

Phoenix, AZ 85016

bf@federlawpa.com

- and -

KESSLER LAW OFFICE

By: Mr. Eric Walter Kessler, Esq.

6720 N. Scottsdale Road, Suite 210

Scottsdale, AZ 85253

eric.kesslerlaw@gmail.com

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UNITED STATES DISTRICT COURT

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For the Defendant John Brunst:

BIRD MARELLA BOXER WOLPERT NESSIM DROOKS

LINCENBERG & RHOW, P.C.

By: Mr. Gopi K. Panchapakesan, Esq.

Mr. Gary S. Lincenberg, Esq.

1875 Century Park E, Suite 2300

Los Angeles, CA 90067

gpanchapakesan@birdmarella.com

glincenberg@birdmarella.com

For the Defendant Andrew Padilla:

DAVID EISENBERG, P.L.C.

By: Mr. David S. Eisenberg, Esq.

3550 North Central Avenue, Suite 1155

Phoenix, AZ 85012

david@deisenbergplc.com

For the Defendant Joye Vaught:

JOY BERTRAND, ESQ., L.L.C.

By: Ms. Joy M. Bertrand, Esq.

P.O. Box 2734

Scottsdale, AZ 85252

joy@joybertrandlaw.com

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P R O C E E D I N G S

(The following proceedings took place outside the

presence of the jury.)

(Proceedings commence at 9:07 a.m.)

THE COURT: All right. Good morning. Please be

seated. All right. Let me just tell counsel that I have -- I

looked at the transcript. I looked at some of the cases with

regard to the Rule 29 motion, and I did take the matter under

advisement and I will reserve my decision on that motion as I

am permitted to do under Rule 29(b).

And so I want to this morning turn to the pending

motions regarding Defendant Brunst's motion to testify about

his state of mind and to which each of the defendants have

filed a joinder and put forth specific proffers of testimony,

and I'd like to go through that with you so that you can then,

as you had indicated, determine the extent of your case in

chief.

So I want to say that on my review on the totality of

the motions, the defendants basically take issue again with the

Court's prior ruling on the admissibility of advice-of-counsel

testimony and the Court's preclusion of past litigation related

to Backpage.

So as to the advice of counsel, I have already held

that evidence of attorney advice, even when used to negate

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UNITED STATES DISTRICT COURT

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scienter, still has to show certain things to be relevant and

not unduly prejudicial, as I've previously ruled, before it can

come into evidence. Before it can come into evidence. So let

me restate the rule. The defendants who claim a good-faith

basis on reliance of an attorney must show first that they made

a complete disclosure to the professional, complete disclosure

to the attorney, that they requested the professional's advice

as to the legality of the contemplated action; that they

received advice, that it was legal, whatever that contemplated

action was, was legal, and that then they relied in good faith

on that advice.

Now, if that showing is not made, you cannot rely on

the professional's advice to negate scienter. That was what

the Court ruled previously. I've reiterated that ruling at

various stages throughout the trial.

So as for Mr. Brunst's motion, Mr. Brunst says, quote,

he "rarely met with counsel who had handled litigation relating

to the adult advertising," end quote, but nevertheless wants to

introduce evidence that he relied on advice that counsel gave

to Backpage, quote, "on the lawfulness of Backpage's adult

advertising." I will allow Mr. Brunst an opportunity to

proffer the necessary foundation for this evidence.

So if Mr. Brunst can say that he made a complete

disclosure to an identified attorney, not just general

attorneys, throughout the course of the time period regarding

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UNITED STATES DISTRICT COURT

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the legality of publishing these or like ads on Backpage, and

he received advice from an attorney, not some unnamed person in

a law firm, that Backpage's publishing these ads were legal and

that he relied in good faith on that specific advice, then the

evidence will be relevant and admissible and relate to his

good-faith defense.

But here again, all of the prerequisites must be

satisfied, and that's because we risk jury confusion, and I've

already said that to permit otherwise some generalized

good-faith advice because we hired lawyers is prejudicial to

the government because they would have an opportunity to probe

who those lawyers were, what it was that those lawyers were

opining on, what they relied on in order to make their

determinations.

Now, so I guess just to make it pretty clear, even if

a complete disclosure was made, the testimony may be found

irrelevant if the lawyers weren't asked for advice on whether

Backpage's publication of escort ads like those in the

superseding indictment were lawful, or if they didn't follow

that attorney's advice. And so I adhere to the ruling, I

adhere to the prerequisites, and so if you can make a proffer

that you have met those prerequisites, then you can probe that

further with your client.

I want to also just say with regard to Mr. Brunst's

motion, the same prerequisites will be required for the

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UNITED STATES DISTRICT COURT

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Sableman memo, which is proffered at Exhibit 5507, and any

transfer of that memo to the defendants; any communications or

advice given by Hemanshu Nigam, Liz McDougall, Don Moon,

Samuel Fifer, and this includes the exhibits that are noted in

Mr. Lacey's motion. No defendant has so far put forth any of

the four prerequisites, and I note that in all of your joinder

motions you've all relied on this good faith, I'm sorry, good

faith about general advice on nonrelated legal issues.

I noted that Mr. Brunst said, quote, "Mr. Brunst did

not have a lot of direct interaction with Mr. Moon, but was

familiar with Mr. Moons's advice on the First Amendment." And

again, he says this without saying what Mr. Moon was asked to

provide advice about and what he relied on in making that

determination.

Now, I don't think it's an advice-of-counsel issue for

Mr. Brunst, Spear and Lacey to testify that they were all aware

of the expenses that they paid for hiring lawyers that

represented Backpage. I want to also make clear because it was

mentioned in Mr. Lacey's motion that the Court here is not

saying that each defendant has to produce evidence that they

sought advice as to each of the 50 charged ads. The Court has

nowhere made that requirement in no prior order, but rather

that they asked for legal advice about permitting users to post

sex-for-money ads on Backpage, and that Backpage was profiting

from those sex-for-money ads. So I'm not limiting the defense

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UNITED STATES DISTRICT COURT

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in that way.

Similarly, I want to address again the motions raised

prior litigation and the defendant's reliance on prior

litigation. Let me just take a moment to say that indeed I did

look at one of the prior Court's rulings, and I have repeatedly

said that mention of Section 230, that the CDA does not -- is

not relevant here, but I noted in a prior ruling that as

Mr. Feder points out, and as I focused in on, there was a

limited ability to bring in testimony, and this was, quote,

"Testimony that Section 230 was meant to incentivize Internet

providers to engage in moderation practices will be allowed."

This is in response to motions in limine where the defendants

proffered an expert to talk about the CDA and Section 230. The

prior court basically prohibited any testimony or evidence of

the policy behind the CDA, hypotheticals related to whether or

not it would apply to this litigation, but did say very

clearly, "Testimony that Section 230 was meant to incentivize

Internet providers to engage in moderation practices will be

allowed."

The issue there really for me is one that the prior

court did not have the benefit of subsequent briefing by the

parties. And in looking over the time that followed and the

litigation that followed after the prior court made this ruling

on the motions in limine prior to the first trial, it, to me,

has become very crystal, crystalized, that to permit the

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UNITED STATES DISTRICT COURT

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defendants to do that would indeed lead to confusion for the

jury and it would essentially, in my view, what would end up

happening is, if you get someone, somebody, perhaps law

professor or whomever, maybe one of the defendants who can say

they were aware that Section 230 was meant to incentivize

moderation, then what ends up happening is we're going to have

to have some explanation of what Section 230 is and what the

CDA is, and we go down this rabbit hole of irrelevant testimony

that will lead to confusion.

And so because, again, I've pointed out that nowhere

have I seen case law that the CDA or Section 230 immunizes this

type of activity posting sex-for-money advertisements, I'm

going to adhere to my ruling and not permit that type of

evidence to come in.

Now, I want to put forward my findings with regard to

the state of mind evidence that the defendants have

collectively and individually proffered. I do find that some

of the proffered testimony would be admissible under the state

of mind exception to show good faith.

So for example, with regard to Mr. Brunst, he

certainly can testify that within the relevant time period that

no auditor ever told him they believed Backpage was unlawfully

facilitating prostitution or engaging in money laundering. He

can also testify as to his understanding of why banks withdrew

work from Backpage or did not withdraw their business from

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UNITED STATES DISTRICT COURT

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Backpage. He can testify that the auditors sought letters from

counsel on litigation risks doing business with Backpage, and

he can testify whether or not he referred those auditors to

counsel, Backpage counsel or other counsel, but he cannot

testify as to what the lawyers told the auditors because that

would be inadmissible hearsay.

Now, Mr. Brunst's understanding of why Backpage had to

seek overseas moderators and banking, that's all relevant, and

he can testify to his understanding about why they went

overseas. Testimony that Mr. Brunst, quote, was also "aware

that some state law enforcement attacked Backpage" and that

"He was also aware that none ever succeeded in their legal

threats or actions," however, is irrelevant because those legal

threats or actions are not relevant to the allegations here,

the indicted Travel Act violations.

Indeed, I want to point out in Mr. Brunst's motion, he

adds the caveat that they ever succeeded, and that testimony

will certainly open the door the litigation that the government

points out, which is contrary to that statement.

Testimony from Mr. Brunst, Spear, Padilla and

Ms. Vaught that they relied on statements from Mr. Ferrer,

Mr. Larkin and Mr. Lacey that the sex-for-money ads were

protected by the First Amendment or that they were not

promoting or facilitating prostitution by placing the

sex-for-money ads may also be introduced, but no defendant can

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testify that Mr. Lacey, Mr. Larkin or Mr. Ferrer told them that

that understanding came from legal counsel. Again, that would

be inadmissible hearsay.

Now, they can certainly put forward evidence of their

role and responsibility in Backpage. For example, Mr. Lacey

can certainly tell the jury that he was the editor in chief and

what all of those responsibilities entailed. He can also

testify that he oversaw the operation or the employees that he,

as he put it, oversaw the employees who created the content of

the publications. He can also testify as to his belief and

understanding that he was protected by the First Amendment in

publishing sex-for-money ads. But again, if he says that

Mr. Larkin told him that a lawyer told him that, then that's

inadmissible hearsay.

As for Mr. Padilla and Ms. Vaught, they certainly can

testify about their role as moderators, the supervisor, the

moderator, and they can also testify that they were encouraged

by their supervisors to work with law enforcement to attend

conferences on moderation or on law enforcement training. They

too are entitled to put forward an advice-of-counsel defense

only if they meet the first prerequisites, and until then they

can't say that they relied on advice of counsel. In

particular, Liz McDougall.

Now, Ms. Vaught certainly can testify that she went to

Liz McDougall's office one day, showed her one of the

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advertisements or a similar advertisement offering sex for

money with a link to the TER, and said to Liz McDougall, "Is

this illegal? Are we breaking any state, federal, regulatory

laws?" She certainly can do that. But we don't have the

foundation for that yet, and I don't know anything like that

has been produced in discovery.

As for Mr. Padilla, he can testify that he was told by

his supervisors, quote, "to remove entire ads rather than

merely stripping out terms," and that he was following that

directive. But he can't in a backdoor way say that Liz

McDougall was a lawyer hired to supervise moderation,

therefore, because she was a lawyer being licensed to practice

law forms the basis basically of his good faith. That is, as

we discussed ad nauseam, what the advice-of-counsel rule is for

to avoid that.

And so there is testimony that certainly could come in

from each of the defendants in terms of their role, their

responsibilities, what they understood they were doing, but

again, you have to be mindful that much of what you've

proffered so far includes layers of hearsay run afoul of advice

of counsel and so, therefore, I'm restricting any testimony in

that way.

I think I've addressed the majority of what you've put

forward, and let me just ask counsel for Mr. Brunst, are there

any remaining questions that you might have?

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MR. LINCENBERG: Thank you, Your Honor. First, let me

ask the Court, is the Court open to any argument? Government

counsel filed a brief yesterday morning. I had prepared to

respond to some of the points. I would propose to do it in the

context of the Court's tentative order or order on that, but I

first want to make sure that I'm understanding whether the

Court is going to permit argument.

THE COURT: Well, I think what I had indicated last

week was I would permit the government some time to respond,

and I thought, and maybe I didn't do this, I thought I didn't

permit a reply. I've looked at the government's response and

I've made my determination based on the totality of the filings

that are before me. I mean, Mr. Lincenberg, really, on the one

hand, I don't want to revisit anything related to advice of

counsel, the Communications Decency Act. Those matters in my

mind are settled. I don't want to hear argument about the Dart

litigation. I think I've settled that time and time again.

The proffered exhibits, for example, that you provided. But if

you feel compelled to make a record with regard to that, you

can, and if you feel like you have or need clarity as to what

I've just ruled, then certainly I will let you ask questions

for that purpose.

MR. LINCENBERG: Well, let me try to focus it then. I

think what I'd like to do is, I don't want to rehash my

arguments. I think we made them clearly. The Court, I think

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for the most part has issued a clear ruling. There's a couple

questions I have. Let me just hit one or two complete

misstatements in the government's opposition brief for the

record and then move on.

So one of them has to do with the Dart vs. Backpage

litigation, and it's been one the government's consistent

themes that these cases are irrelevant because people weren't

told about The Erotic Review. I note that we specifically

addressed that at page 10 of our motion on the bottom where we

said, "Allegations regarding 'sponsored ads,' an affiliate

program, and reciprocal links were a part of the Dart record."

We cited to Exhibit 5902 at page 480 and 491, which is the

appendix in the Dart appeal. Page 491, for example,

specifically lays out where the sheriff had talked about,

quote, "links to other well-known sex trafficking sites on its

website," some sites like myredbook, The Erotic Review, XC.net

and others, et cetera, et cetera.

So I wanted to point that out because it has been a

central part of their theme trying to distinguish these cases

as if that's relevant to notice when the government's entire

case has been putting in things like Attorney General letters

and so forth, which don't worry about what was or was not

present, this sort of general notice to the defense. But I

will move on. I wanted to make that point. I will move on.

Just with regard to the Court's statements this

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morning, first I would note, again, the Court started out

talking about the factors for advice of counsel. As we stated

many times, Mr. Brunst's defense is not an advice-of-counsel

defense. As the Court can see from our proffer, it's not an

advice-of-counsel defense, so I would respectfully suggest that

the Court's statements on this point are irrelevant unless the

Court is making a ruling that no defendant can argue good faith

based upon all the different factors in their mind unless they

first establish an advice-of-counsel defense.

Lawyers were one of the many parties that made

statements over the years in court cases that were part of

Mr. Brunst's brain when we're moving forward, and the, the

Court's ruling that, for example, there's a credit card

Armageddon, and then the jury is left to wonder, well, what is

Mr. Brunst doing after that? And when the answer is lawyers

are dealing with this where they should deal with it, which is

in a courtroom, and he's paying attention to that, that's out.

That, in our view, goes to good faith. Doesn't matter whether

he's part of a team that is sitting there going back and forth

with the lawyer as to what factors relate to this.

Second, the Court made a comment about the Sableman

memo, Exhibit 5507, and I think the Court mentioned that it

can't be discussed that this was transferred to defendants.

Just to refresh the Court's recollection, this was a memo that

was transferred to BMO in 2010 and the Court precluded us from

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bringing that out on cross-examination of Mr. Ferrer, and so

we're left with a record where the government is arguing that

there was a lack of transparency, lies, however they phrased

it, in connection with the dealings with BMO and the other side

of that is not in.

Third, with regard to where Your Honor indicated that

some state of mind evidence would be admissible, and Your Honor

is referencing, for example, Mr. Brunst can testify that no

auditor said that it was unlawful. As I understand the Court's

ruling, the testimony would simply be, "No auditor told me it

was unlawful," and not go into any of the bases for why that

might be reasonable or what steps were taken. Not simply that

they were referred to attorneys, but that auditors engaged with

attorneys. These were people that were reviewing litigation

coming to these determinations. As I understand, we can't

really get to the meat of what underpins why this would be

relevant to Mr. Brunst.

THE COURT: Well, the way that you characterize Mr.

Brunst's testimony was, well, he was arms length away from any

lawyer. He wasn't involved in any of those communications. So

the problem here is how then does he get to that information

but through what will amount to hearsay embedded in hearsay.

MR. LINCENBERG: Oh, it is hearsay.

THE COURT: Then you've got that hurdle to overcome.

The other part of this is, what is it that the

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auditors were told or shown or given to make their

determination? Now, certainly if Mr. Brunst can say, yes, I

pulled out a portfolio of either the charged ads or similar ads

and, oh, by the way, yes, I also told them about here's a link

that they can attach, and the link really is not -- the TER

link is really not necessary. He can just show them a Backpage

ad, a sex-for-money ad, then, sure, he can say, yes, this is

what I gave to the auditors, and they looked at it and in their

view then they took that to their lawyer. As far as I know,

then we maintained the contracts or whatever.

So that's the missing part here, and this -- these are

the layers of hearsay that you're going to have a difficult

time overcoming unless you can say that Mr. Brunst can get on

the stand and say, yes, I gave them a portfolio of our

sex-for-money ads.

MR. LINCENBERG: The hearsay is an easy issue to

overcome because it's not being offered for the truth. This is

being offered to show why he does whatever level of due

diligence he does, the feedback he gets to the auditors. The

way a CFO interacts with an auditor in connection with the

portfolio, the part of the audit reported that deals with

contingent liabilities is putting auditors in charge with -- in

touch with outside counsel.

The auditors -- everybody is well aware of similar

ads, quote-unquote, similar ads. It's all over the litigation

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that is going back and forth with auditors. It's all over

when -- if the auditors can be put in touch with counsel who

are doing this litigation, they can ask every question they

want, and Mr. Brunst is performing his role and that -- and

where his good faith stems from, it stems from the fact that

auditors -- he's doing what he should be doing. Auditors,

there is outstanding litigation, these are the lawyers you can

talk to. Auditors will take whatever steps they want to do,

which is fairly extensive because it's an audit, and then the

feedback is there is no going concern issues.

So without being able to get into the meat of why his

state of mind is one of good faith, to simply say no auditor

said it was unlawful adds a little bit, but it doesn't provide

any of the depth of why that is good faith.

All right. The next point I would make, Your Honor,

is the Court mentioned that if cases were brought in, the

government points out that some opinions were counter and it

would open the door. It would absolutely open the door. We

have no problem with opening the door.

THE COURT: I know you don't because it's unrelated

litigation, civil litigation.

MR. LINCENBERG: It's not unrelated.

THE COURT: It's unrelated litigation, and I already

held that.

MR. LINCENBERG: I would just say that the Court

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indicated it would open the door to litigation involving,

quote-unquote, prostitution ads, we welcome that discussion

because at the end of the day it shows my client to be innocent

if the jury understands that, but the Court has ruled and I

just wanted to note, if there is any doubt, we have no problem

with the government exploring this.

There is a lot of evidence that they can explore that

goes to weight. If they want to come in and cross-examine,

"Well, do you know what facts were disclosed to these lawyers?"

That's relevant cross-examination. That's fine. We would

welcome that.

The last point I would say, Your Honor, is, and this

is sort of a point of clarification, the Court, I think I just

missed some of what the Court said, the Court said something

about with regard to First Amendment protection that it can be

introduced but not that it came from counsel. Now, correct me,

I am not sure I heard it right. I just want to make sure I

understand what the Court's rulings are.

THE COURT: What I said was all of the defendants can

testify that they relied on statements from Mr. Ferrer,

Mr. Larkin, Mr. Lacey that the sex-for-money ads that they were

publishing were protected by the First Amendment, but that was

their mantra or their belief, and to continue to do it because

they were protected by the First Amendment. They just can't

come and say that Mr. Lacey, Mr. Larkin or Mr. Ferrer told them

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that their understanding came from lawyers because we get into

that advice-of-counsel prerequisite again.

So of course, if Mr. Padilla, for example, says:

Yeah, Mr. Lacey held a big meeting and he said, look, I showed,

you know, lawyer X, Y and Z the ad and I asked them

point-blank, "Is this against the law, any federal, state law

regulation," what have you, and "I gave them the ad and this is

the advice letter that I have back," then we're getting

somewhere, but beyond that they can't do that.

So certainly if Mr. Padilla says, "Yes, I relied on

good faith by my president, my CEO, my CFO, that what I was

doing was okay under the First Amendment," they can testify to

that.

MR. LINCENBERG: I'll have to leave to Mr. Lacey's

counsel what he may intend to do. Obviously as we've

proffered, my client is not in those discussions. His good

faith doesn't stem from that direct communication. It stems

from the memos that he passed on to him and he forwards to the

bank and so forth.

I would note that on a number of occasions in our

crosses of Mr. Ferrer the Court precluded us from getting into

First Amendment references.

THE COURT: No, I did not --

MR. LINCENBERG: If I --

THE COURT: No, I did not.

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MR. LINCENBERG: If I may finish.

THE COURT: No. I want to make sure I don't miss this

point. The only person I ever heard ask the question, and it

maybe was three times, was Mr. Cambria. He asked specific

questions related to the First Amendment. No other counsel

did. I listened and I waited for it, in fact, and so that's

not because I prohibited it.

In fact, Mr. Cambria did it and was permitted to do

it. So I just want to make the record clear on that.

MR. LINCENBERG: Okay. If I respectfully just can

finish.

THE COURT: Yes.

MR. LINCENBERG: I respectfully disagree, and I can

point to some examples. So, for example, one of the e-mails to

BMO where the government blacked out the Larkin e-mail, the

Court, number one, allowed it all to be blacked out. Number

two said, "Mr. Lincenberg, you can mention in there that Larkin

said the words 'free speech,'" it was like two or three words

in there, "but excluding the discussion of the First Amendment

there," and there's other examples of that. But I think also

relevant to this and where the Court has left us is, you know,

if you want to say that Larkin mentioned the First Amendment,

you can do that, but you can't give the meat of why that would

be good faith to rely on it; that is, after enumerable

discussions with counsel and legal cases.

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So I think that's where we're at and why we disagree

with the Court's ruling. Thank you, Your Honor.

THE COURT: Mr. Cambria.

MR. CAMBRIA: Good morning, Your Honor.

THE COURT: Good morning.

MR. CAMBRIA: I just wanted to add, I do agree --

THE COURT: Can you pull the microphone a little

closer to you? Okay. Thank you.

MR. CAMBRIA: Try to stop it. I do join in the

comments of -- is this ringing here? Maybe it's that.

I join in Mr. Lincenberg's arguments. But the problem

that I see is that what's been allowed so far are statements

without any particular foundation that the defendants are

violating the law from whatever group, religious or otherwise,

to negate good faith without allowing what the defendants were

told from other groups, individuals, lawyers, et cetera, that

they were not violating the law.

So it seems to me what's happened is we have a

situation where the government has introduced all of this

information and no particular foundation whatsoever that we're

acting in bad faith, if you will, and then we can't counter it

with statements of the same cannon, if you will, from others,

and I just think that's a fundamental problem that's been

created in this case.

Thank you.

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THE COURT: All right. Thank you.

Mr. Eisenberg.

MR. EISENBERG: Yes, Your Honor, I just want to be

clear on what Your Honor said just a moment ago. And that is,

Mr. Padilla can say, "I relied on Carl Ferrer, for example,

that what we were doing was legal," and that, did you also say,

Your Honor, that in the context of that discussion he would

have had to show Mr. Ferrer a specific ad?

THE COURT: No. I think what I said was not specific

to Mr. Ferrer, but with regard to the First Amendment because

Mr. Ferrer, as you know, is not a lawyer. So with regard to

any conversations related to his supervisors telling him, "You

know, we're protected under the First Amendment," he can say

that, but what I also said -- oh, on that point, you can

continue.

MR. EISENBERG: Well, so if there's a discussion not

relevant, not related to a specific ad, but simply in the

context of those two men meeting and this issue comes up, "Are

we doing this? Are we legal? Is what we're doing legal?" And

Mr. Ferrer says, in effect, "Yes," Mr. Padilla could testify to

that?

THE COURT: Yes.

MR. EISENBERG: Okay. All right.

THE COURT: Mr. Feder.

MR. FEDER: A little further clarification. Exhibits

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have been admitted where a person named Steve Suskin, who was

the general counsel of Backpage, makes a presentation to

everybody regarding the legalities, characterized as the

legalities of Backpage. Is the Court saying he can testify as

to what he told everybody?

THE COURT: Mr. Suskin?

MR. FEDER: Yes.

THE COURT: If it relates to Travel Act violations.

If he was presenting something related to a question as to

Travel Act violations, prostitution ads, sex for money.

MR. FEDER: Well --

THE COURT: The statutes are the multiple statutes

that are charged in the indictment, Washington state, Arizona,

A.R.S., prostitution, so the question has to be presented to

him. And to the extent that he's opining on, "Are we breaking

any state laws that prohibit sex-for-money acts or

advertisement?" That to me is the critical part. No one has

provided that query to any lawyer whether they be employed

internal to Backpage or external. I have not seen that proffer

other than that far-removed memorandum by some unknown lawyer,

a junior associate someplace in New York, I have never seen any

evidence of documentation, e-mail questions posed to a lawyer,

"By the way, Mr. Suskin, will you cover whether or not we're in

violation of state laws that prohibit sex-for-money

advertisement or activity, prostitution?" So that's the layer

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that I'm looking for, yes.

MR. FEDER: Second, if Mr. Suskin or anybody else were

to circulate the Sableman memorandum.

THE COURT: Well, let's me look at that Sableman

memorandum because as my memory serves me, I saw a couple of

legal advice memos or letters and they were all over the board.

They were talking about First Amendment, Fourteenth Amendment,

search and seizure. They were talking about all kinds of

things, and so I'd like to see specifically what that

circulated memorandum was. And again, what prompted that

circulated memorandum? What was the advice being sought?

MR. FEDER: Well, there is two of them actually. Both

of them are exhibits.

THE COURT: Tell me what the exhibits are.

MR. FEDER: I don't -- we just gave you one of them.

Hold on one second. There is two of them that I think -- it's

probably 5507, 5508 or something like that, 'cause one of them

was to address the impending Washington state statute.

THE COURT: Well, here, like I say, here again it's

reference to Section 230.

MR. FEDER: It does. It's a general advice memorandum

from a prominent First Amendment lawyer in Missouri who's a

partner in a firm there. I mean, I think there's a preface in

there of what he's been asked to do and why.

THE COURT: Yes, I recall seeing this, and --

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MR. FEDER: There's two, Judge. I would have to find

the other one, but -- and one of these is the one that

Mr. Brunst, I believe, attached to send to the bank.

MR. LINCENBERG: That was the Sableman memo,

Mr. Feder. That was 5507, 5508, the Sableman memo.

MR. FEDER: There we go. Thank you.

THE COURT: So where is the request for work on this?

Who requested him to do this and what was the question that he

was asked?

MR. FEDER: You know, I can't tell you that I remember

seeing a letter, here's what we want you to do. One of them,

again, was to address the legality of the Washington, the

proposed Washington state statute.

THE COURT: Right, which has nothing to do with this

case or the allegations in them.

MR. FEDER: Well, but it does have to do with, I mean,

again, this is not hearsay, it is to give these folks advice on

what, on the effect this would have and its legality and how to

attack it, and it doesn't -- it's just giving them comfort that

what they are doing is proper versus the other evidence that

the Court has allowed over and over again which suggests that

they should have known, whoops, that they were doing something

wrong. This is the counter, and it's the comeback, and it

shows good faith.

THE COURT: But it's missing the layer because you're

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bringing in as advice of counsel, and what you're talking about

is sort of a backdoor way to avoid the advice-of-counsel

dilemma that you're faced with. And so certainly someone asked

him a question. Certainly somebody said and paid for this very

lengthy memorandum, which is all over the board. So if you can

produce to me what it was that was asked of him and that he

gave this advice, again, that's what you have to do, but you

just can't wave around memorandums that have generally talked

about the First Amendment, opined about pending state laws or

proposed state laws and not provide the Court or share with the

government what it was specifically that he was asked to base

his legal opinion on. And so it is, I mean, for me that is --

that's what you have to do in order to get Mr. Suskin, excuse

me, Mr. Sableman to come in and testify about what he was asked

to do or to get any one of your clients or the other defendants

to do that.

So that's kind of where we are, Mr. Feder. Anything

more?

MR. FEDER: I don't think so, Judge. I know the Court

hasn't had a chance to reread these memoranda, but my

recollection is, the preface is I have been asked to do --

Mr. Sableman writes: I've been asked to do A, B, C, to, for

instance, provide an analysis of proposed statute, Washington

statute such and such and so and so, and then he does the

analysis and it's pretty simple.

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THE COURT: Well, his analysis is with regard to,

again, a federal statute, and that federal statute being the

CDA.

MR. FEDER: There's not any question that he talks

about all of the reasons why this particular proposed

Washington state statute will fail because it's

unconstitutional under the First Amendment, because it is

protected by Section 230 of the CDA, and a variety of other

bases, but it -- it's not irrelevant, but it is the effect that

it had on these defendants that is the important part, and that

is relevant to good faith without it being advice. I mean, it

is kind of an advice of counsel. But I believe's there's been

some case law submitted to the Court where somebody went to a

seminar and listened to a lawyer give tax advice and was able

to present that to a jury.

So this is, again, we're --

THE COURT: The facts of that case were very distinct.

I remember that case. I remember reading it and found it

doesn't apply to your motion at that time. So anyway, that's

where we are, Mr. Feder.

MR. FEDER: Okay. Thank you.

THE COURT: Ms. Bertrand.

MS. BERTRAND: Thank you. Your Honor, I ask for one

point of clarification regarding an issue discrete to

Ms. Vaught.

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THE COURT: Yes.

MS. BERTRAND: Ms. Vaught testified before a federal

Grand Jury in Washington. In my review of her transcript it

appears that the investigation was very similar to the one that

ends up being brought here. I don't believe the transcript

shows the specific charges being investigated, but to have

federal jurisdiction they would have to have something like the

Travel Act. Is the Court allowing evidence that Ms. Vaught

testified before that Grand Jury in, I think, 2012? And then

nothing came of it, and from that she didn't think -- it has

nothing to do with what lawyers told her. It just has to do

with her own experience on a federal Grand Jury.

THE COURT: I guess the question then becomes, let's

say Ms. Vaught gets on the witness stand and says that in fact

she was required or subpoenaed to testify in the Western

District of Washington before a Grand Jury, the question then

becomes, was she the target or was she a subpoenaed witness?

She would have known that if she received a target letter,

obviously. So I don't necessarily know then that it's relevant

if she testified and she was not charged. Do you see what the

dilemma is?

MS. BERTRAND: Sure.

THE COURT: Now, she certainly could say that she had

testified in proceedings about Backpage posting sex-for-money

ads. I don't know why you couldn't ask her, "What ever came of

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that Grand Jury investigation?" And if she says to her

understanding nothing, I mean, I don't find that to be

inadmissible --

MS. BERTRAND: Okay.

THE COURT: -- based on her knowledge.

MS. BERTRAND: I just want to make sure we have a

clear record as we are talking. I don't believe Ms. Vaught was

treated as a target in that investigation. I know she did

receive a proffer letter that's discussed in her testimony. I

guess the issue is, in terms of her state of mind, nothing came

of it, but she was also being asked about Backpage's practices.

So when she went back of the office and nothing came of it,

would that be evidence of good faith? "Apparently we're not

doing anything wrong. I went to Seattle and testified and told

them what I knew about Backpage, specifically talked about

moderation practices, and who were moderators, how they do it.

So looks like things are okay from my end."

That would be the kind of testimony that I think would

be -- I just want to make sure before we have any

misunderstandings that we're clear about that. It's not only

her conduct, the organization she was working for didn't get in

trouble, so she would have no reason to think what they are

doing is illegal.

THE COURT: It can come in in a limited fashion in

terms of what, in her mind, she relied upon, but again, in a

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limited fashion because what I don't want to do then is to

have -- to get into a position where the government is going to

have to produce evidence of what the Washington, Western

Washington District investigation was about and whether or not

it was related to a Travel Act violation charge or money

laundering charge or whatever it might be, because then it ends

up creating this mini trial within a trial, and that's -- I

don't want to waste the jury's time on that, and I don't want

to confuse the jury, and that's the dilemma that we get into

with that type of testimony, but she certainly can, in a

limited way, testify the effect it had on her in terms of

knowing she never heard about it again or whatever it was, and

she just went about her business. I mean, I think that's fine

and that's relevant to her.

MS. BERTRAND: Okay. Thank you for that

clarification.

THE COURT: All right. Who wishes to come forward if

there is anything in terms of clarification from the

government?

MR. KOZINETS: I do, Your Honor. Thank you. Thank

you. I just have a few brief points on all of this. First of

all, with respect to the discussion of the Sableman memorandum,

in addition to the other prerequisites of advice of counsel

that Your Honor talked about in connection with that memo, we

think paramount is the lack of a complete disclosure of all

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material facts. We discussed that on page 8 of our response

brief.

And as Your Honor noted, the memo discusses a link,

the CDA, which is precluded by the Court's prior orders,

getting into discussion of that. Then the memo makes

statements that indicate that there was in fact a lack of full

disclosure. So pages 13 and 16 of the memo talk about how

Village Voice doesn't promote or even acquiesce in ads for

illegal serves, but takes efforts not to promote or publish

those kinds of ads. We think that is really reflective of a

complete lack of full disclosure at the time.

And then on page 17, if Your Honor recalls the

argument we had on Friday morning, I mentioned the People vs.

Lurie case from the state of California, Mr. Sableman also

talks about that case in his memo on page 17. He says, "Well,

there are cases like Lurie where intent to promote prostitution

may be inferred in situations such as where a grossly

disproportionate volume of the company's business involves

prostitution or prostitution-related advertising or services."

He says, "These exceptions clearly do not apply to Village

Voice Media."

And as the trial evidence shows, that clearly did not

reflect a full disclosure of all material facts because we have

Mr. Brunst just a year after this memo co-authoring Exhibit 120

showing that 94 percent of the company's revenue came from the

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adult section, and we have, you know, presented witness after

witness and document after document showing that those ads were

prostitution ads.

So for all of these reasons, you know, we think that

that memo simply cannot come in.

A brief comment or two regarding the western district

matter that was just discussed. As Your Honor noted, Doc 1444,

that was the order that you issued on December 29th, 2021,

page 12, Judge Logan had considered the relevance of that

matter and had made clear that it was wholly separate from this

case. That's quoted in your order. The time frame of that

matter corresponds with the McKenna case, it predates the Dart

case, it's been about 2012. And we know that the evidence that

this case is based on predominantly comes from the internal

memoranda e-mails and other information that the company, that

Backpage was compelled to produce years later in 2016,

compelled by the U.S. Senate subpoena, compelled by the Arizona

Grand Jury investigation.

And so for those and other reasons that are reflected

elsewhere in the record, I think in sealed filings about orders

from that matter, that really was entirely separate from this

case. So --

THE COURT: Before you move on from that, though, but

I think although it may be wholly separate, and if it was a

2012 matter, nevertheless, the fact that Ms. Vaught was

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subpoenaed to testify and she came away from that experience of

testifying before a Grand Jury, which I'm sure by any measure

would be important for any individual and leave some sort of

impression upon them, she certainly can say that because

nothing came of it, or she was never informed of any, anything

that came of it, that goes to her state of mind, and I think

that is permissible.

Of course, you can come up and say, well, didn't that

take place very early on, and they were looking at activities

in 2010 or, you know, 2009 that had nothing to do with what

we're talking about here. You know, there's ways that you can

bring out the fact that this was a different case, a different

time, different statutes and so on.

MR. KOZINETS: Right. But I think as Your Honor

talked about, there is the danger of devolving into this kind

of mini trial and really going down a rabbit hole into matters

that are wholly separate and irrelevant to the matters that are

before the Court and the jury here, so --

THE COURT: And I will make sure not to do that. And

like I said, it's going to be very limited in terms of that

testimony to questions, I think, Ms. Bertrand proffered. You

can have two questions on cross, and that's how we will address

it.

Anything further?

MR. KOZINETS: Just one final point, Your Honor.

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There was some discussion from counsel for Mr. Brunst about a,

some sort of misrepresentation in the government's brief, and

we respectfully disagree with that. Mr. Brunst's counsel cited

Exhibit 5902, pages 480 and 491, for the proposition that there

was some sort of disclosure of Backpage's internal business

practices that had been made in the Dart litigation.

In fact, that document that was cited was nothing came

from Sheriff Dart. It was a civil complaint filed in District

Court in the District of Massachusetts in the Doe vs. Backpage

litigation, so there was just allegations in that civil

complaint.

And the one or two references to TER or sponsorship

ads there come nowhere close to the mountain of evidence that

subsequently emerged showing Backpage's internal practices,

internal communications, including testimony from Backpage

insiders that was not available in that litigation. So the

notion that the Dart litigation involved anything close to the

internal insider information we have here is simply not true.

That's all I have, Your Honor.

THE COURT: All right. Thank you.

MR. KOZINETS: Thank you.

THE COURT: Now, let me -- let me just make an

inquiry. I think the government was asked to revise the form

of verdict. Have you been able to accomplish that?

MR. STONE: Yes, Your Honor, and I believe we sent the

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e-mail last night to chambers.

THE COURT: And I will give defense counsel an

opportunity to review that. We made the revision as requested

by defense counsel, but otherwise we're going to use the

proposed form of verdict that the government presented for the

reasons that I did agree, after looking at it a little bit more

carefully, the defense proposal included what amounted to mini

instructions, and so I removed that verbiage and we'll use this

sort of box description that the government had in its proposed

form with modification taking out those descriptions of the 50

ads.

The other question that I left was the jury

instructions. And upon further review, there were only a few

of them that really needed to be perfected, and what I intend

to do is I'd like to, I note defendants wish to meet with their

individual counsel to determine then what the next steps are.

I think, if I remember correctly, defendants had produced a

witness list of some five individuals.

MR. STONE: I believe it's up to seven, Your Honor.

THE COURT: All right. And those are seven

individuals that do not include your respective clients; is

that correct? Hearing yes from Mr. Cambria.

So what we will do then is we have our jury coming in

at 1:00 o'clock and we can resume the trial with whomever is --

who is the first witness that you're intending to call?

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MR. EISENBERG: Mr. Snyder, Your Honor.

THE COURT: Mr. Snyder. Okay. And the witness,

Mr. Snyder, do you have an idea of how long direct examination

of that witness will go?

MR. EISENBERG: I will say not very long, Your Honor.

I can't put it in minutes, but he will be straight to the

point.

THE COURT: And then who is the second witness?

MR. CAMBRIA: I believe it's Mr. Becker, Your Honor.

THE COURT: And do you have an idea, Mr. Cambria, I'm

just trying to get an idea as to how the afternoon will go, do

you have an idea of the --

MR. CAMBRIA: I think it will probably take me

30 minutes to 45 minutes to put that in.

THE COURT: All right. And then I think what we can

do is give you the overnight to meet and confer with your

clients to determine whether or not what course you wish to

take with them, but then resume trial tomorrow with the

remainder of your three or -- doing the math wrong -- who is

our math major?

MS. BERTRAND: Wasn't a major --

MR. CAMBRIA: Not Mr. Feder.

THE COURT: The five remaining witnesses that you

have -- sorry. Did I say five or seven, were there seven or

five?

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MR. CAMBRIA: There was one witness that I had named

Dougherty, and Mr. Stone indicating they were objecting. The

history on that is apparently when the Court said to us, is

there any way you can indicate that you can trim down your

witness list, both sides, the government gave a purported list,

we gave one, and what had happened was Dougherty apparently was

originally listed for Larkin, and so automatically anybody

listed for Larkin came off that list.

Subsequent to that, however, I interviewed

Mr. Dougherty, and it was my opinion that he had relevant

evidence as to my client. So I properly noticed that.

And Mr. Stone, I believe it was, said, "Well, you took

him off the first list, so we are going to object because you

took him off the first list." I think we took him off because

he was a Larkin witness and we just automatically took off all

the Larkin witnesses, but I believe that he's relevant. And I

just recently spoke to him and came to that conclusion, and I

did give him the appropriate notice. So I feel that I should

be able to call him. He won't be very long. There aren't any

exhibits in connection with him, and so I'd like to have that

clarified so I can schedule him.

THE COURT: Well, if you think he has relevant

evidence to --

MR. CAMBRIA: I do.

THE COURT: -- to your client, then he should be

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permitted to testify. It can't be a surprise to the government

that he was on the witness list. Certainly you've been noticed

of him for months now. And so in any event, he can testify.

MR. CAMBRIA: Thank you.

THE COURT: Just one moment. All right. We will

leave your jury instructions for later, but I do want to just

tell you that, give you my thoughts again. I opined on this

before. To the extent that you put in the testimony that I've

discussed earlier regarding good faith, you certainly could

have the good-faith instruction. It might be modified a bit,

but I'll keep that in for now.

I always had the question about deliberate

indifference, and I think depending on how the testimony goes

in the defense case, and depending on whether or not there's

testimony about reliance on others, I think it might, it might

come in, it might be used, but I'll make that determination

later.

We've already addressed some of the issues. There was

an outstanding issue that, Mr. Cambria, you raised about the

definition of the New York State prostitution offenses that

were proposed by the government in their instruction, which at

that time is, or I think at this point is 18.1, and I permitted

you to provide the Court with additional briefing on your

argument, but I never received that. I don't know if that's

something you wanted to raise or revisit, but I never received

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any briefing and so I just wanted to point that out.

MR. CAMBRIA: I didn't realize that we were invited to

do that. I appreciate that, and we'll --

THE COURT: Well, let me just remind you that I told

you you could do that back on July the 30th.

MR. CAMBRIA: I'm not disputing that, Your Honor. I

just don't remember.

THE COURT: All right. So in any event, I wanted to

mention that.

As I understand it, you all, the defense, have

submitted your Revised Proposed Jury Instructions this morning

and I have not seen the government's, but I wanted to make sure

that you understood where we were. There were two other

instructions that were lingering out there that I didn't really

see any argument about or response to. There was an

August 18th filing of the Government's Proposed Forfeiture Jury

Instruction, and I frankly didn't see that on the docket.

I think we addressed the objection, the August 24th

defendant's objection to the government's proposed limiting

instruction, and that was at Document 1730, so look at that and

make sure that I resolve that.

Now, in prior rulings in the prior court, she did make

a finding that the money laundering counts remain even if the

jury determines that a Travel Act offense fails. And because

of that ruling and because that is the law, at least with

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respect to Sections 1956(C) and 57(C), 1957(C), I wonder if

there needs to be some short instruction to the jury about

that. And so I throw that out to you for your consideration

and we can revisit that.

And so I'll take a look at the Revised Proposed

Instructions that the defendants have provided. Again, I'm not

going to revisit any of the ones I previously settled upon.

There were just some of these that were out there and I had not

made a final ruling on, and we can take that up in a manner

that is conducive to keeping the trial moving along.

So with that --

MR. STONE: Two quick things. We submitted a filing

yesterday about 4:00 o'clock on jury instructions.

THE COURT: Okay.

MR. STONE: I just pointed out a few minor issues.

THE COURT: Okay.

MR. STONE: Just to make sure you had that.

THE COURT: Okay.

MR. STONE: Second thing, Your Honor, this ties in

with the forfeiture jury instructions. The defendants have the

right to elect, should there be a conviction here, whether to

try the forfeiture part of this trial to the jury or to Your

Honor, and we really need to know that sooner rather than

later, like maybe by today, so that we can get all -- so that

we make sure we are not wasting the jury's time. We have

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finalized jury instructions, finalized verdict form, and a

number of things that we with would roll right into that

presentation, should there be convictions, that would cause the

forfeiture aspect of the case to move forward.

If they elect to go before Your Honor, I think it

could be done through motions and you wouldn't have the time

pressure because the jury could be excused, but if they are

electing to try that aspect of the case to the jury, we need to

know.

THE COURT: Well, you have that question to deal with

too. I'll give you until tomorrow morning to make that

determination. Tomorrow morning at 9:00 you can let the

government know what you elect to do with regard to that.

And anything more?

MR. RAPP: Just a couple housekeeping matters. One of

the witnesses that is not proposed by the defense is

Carl Ferrer, and I believe you gave until this morning whether

or not they were going to alert us to that so that we could

coordinate that, so I would like to have him released from his

subpoena.

The second issue is if some or all the defendants

choose not to take the stand, there has to be some time carved

out for that questioning by the Court on that issue, and I am

not sure when that's going to take place.

THE COURT: Well, I'm sorry if I wasn't clear. I gave

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counsel until tomorrow. I gave them this evening to meet and

confer with their respective clients so that they can make that

determination and certainly let me know at the earliest

convenience.

Now, to be fair, a named defendant could change their

mind and I have no control, and I think they are permitted to

do that. So to the extent they know, then I'd like you to give

that information over to the government by tomorrow so that we

understand what our timing looks like with this jury. I feel

comfortable that we are within a good time frame that we have

this jury committed to, but I don't want to make that cause for

delay. So you have -- you have at least until overnight to

meet with your respective clients and come to some

determination, at least to let the government know and to let

them prepare for that, and that should be done by tomorrow at

9:00 a.m.

Anything further from the government?

MR. RAPP: No.

THE COURT: Anything further from defense?

MR. CAMBRIA: Yes. We submitted a specific First

Amendment memo, Your Honor, yesterday with regard to our belief

as to the appropriate instructions that the Court should give,

so we did that so that you'd have in front of you the

authorities and the arguments in writing and you would be able

to take that as you wish.

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THE COURT: And really, I will say that I did read it.

I reread it because it was familiar to me. I remembered it,

and it is essentially a reurging of my prior ruling on the

First Amendment, and at this point I don't find the legal basis

on which to do so.

And in fact, because of the, and I should say,

Mr. Cambria, even though you made it in the Motion for

Acquittal, as a legal proposition now at least there is some

evidence in the record that really distinguishes this case from

those cases that were cited in that memorandum, which in my

view makes them controlling but also bolster the Court's prior

order, and so I'll just say that about it, and I may have more

to say.

MR. CAMBRIA: One of the discrete things is that the

Ninth Circuit cases which we've cited there specifically do not

authorize a "related to" language. The cases clearly require

that the speech necessarily on its face be such that it's not

protected by the First Amendment as opposed to the language

which is included in your proposed instruction which talks

about "related to." And that is a very glaring departure from

what the Ninth Circuit said, and we laid those cases out, Your

Honor.

THE COURT: Thank you, Mr. Cambria.

Anything further from defense?

MR. CAMBRIA: No.

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MR. EISENBERG: Yes, Your Honor, I do, and this is a

housekeeping issue. I think the Court is pretty clear about

the fact that the scheduling is somewhat in flux because

counsel and client have to consult about whether the client is

going to testify, and I am raising it in the context about oral

arguments or final arguments to the jury. It's pretty hard to

determine now when that will take place, but it appears to me

it would be sometime by the end of this week, but it's

impossible to really predict. I just don't want to be caught

suddenly with having the arguments the very same day that we

perhaps find ourselves with no witnesses and no one else is

going to be testifying. That would be a hardship. I know we

can't predict that at this point.

THE COURT: Well, you know, you're right. It -- there

is going to have to be built in some flexibility to do that.

And as I recall at the opening of the case, the opening

arguments really amounted to almost two days when you look at

all the hours put together, and so I understand that we're

going to have to build that in. We're also going to have to

build in time for me to read voluminous instructions to them

before those closing arguments, and the two should not be

separated. That's my view. And I will try to work the

schedule such that that doesn't happen because I want them to

have those instructions fresh in their minds when they are

listening to your arguments, and then the government's rebuttal

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close.

So I think if we carve out two days for that process,

that's probably the safer choice. So I'll look at and think

about the timing, excuse me, in that regard, but that is not to

say that you are to have your witnesses prepared and ready to

go, those that you have provided to the government and the

Court, promptly on time 9:00 a.m. tomorrow, 1:00 o'clock today,

so that we can keep on track to the best that we can.

If we need to adjourn early on Friday in order to

accommodate that not only perfecting those instructions but

reading them to the jury and then permitting you to go forward

with your closing arguments, then we can do that. We can move

that next week, if necessary, but let's just see how it goes

today and midday tomorrow and then we can make those decisions.

MR. EISENBERG: Thank you, Your Honor.

MR. BERRY: I just want to be clear that -- this is

Austin Berry speaking. Sorry, Your Honor. We just received

notice this morning of a list of additional witnesses that the

defense intends to recall. You may recall back on Friday that

we asked for them to provide us whoever they were going to be

called on Wednesday by Sunday. We received that this morning.

I wanted the Court to be aware of that. They gave us a list

of, I don't know, ten plus witnesses and zero exhibits with any

of those witnesses, and I just want the Court to be aware of

that.

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THE COURT: Well, it sounds like the case is getting

longer, not shorter, Mr. Eisenberg. Turn over those exhibits

not only to the government, but let Liliana know what you

intend to use with those witnesses. It's a reciprocal

arrangement that I have between the two of you. Adhere to it.

All right. If there's nothing further, we are

adjourned until promptly 1:00 o'clock.

(Proceedings concluded at 10:34 a.m.)

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UNITED STATES DISTRICT COURT

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C E R T I F I C A T E

I, HILDA E. LOPEZ, do hereby certify that I am duly

appointed and qualified to act as Official Court Reporter for

the United States District Court for the District of Arizona.

I FURTHER CERTIFY that the foregoing pages constitute

a full, true, and accurate transcript of all of that portion of

the proceedings contained herein, had in the above-entitled

cause on the date specified therein, and that said transcript

was prepared under my direction and control.

DATED at Phoenix, Arizona, this 25th day of October,

2023.

s/Hilda E. Lopez_______

HILDA E. LOPEZ, RMR, FCRR

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