UNITED STATES DISTRICT COURT

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

) No. CR-18-0422-PHX-SMB

Plaintiff, )

)

vs. ) Phoenix, Arizona

) October 5, 2021

Michael Lacey, ) 11:02 a.m.

James Larkin, )

Scott Spear, )

John Brunst, )

Andrew Padilla, )

Joye Vaught, )

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE SUSAN M. BRNOVICH, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

STATUS HEARING

Official Court Reporter:

Christine M. Coaly, RMR, CRR

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

401 West Washington Street, Spc 37

Phoenix, Arizona 85003-2151

(602) 322-7248

Proceedings Reported by Stenographic Court Reporter

Transcript Prepared by Computer-Aided Transcription

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A P P E A R A N C E S

For the Government:

U.S. ATTORNEY'S OFFICE

By: Mr. Peter S. Kozinets

Mr. Kevin M. Rapp

Ms. Margaret Wu Perlmeter

Mr. Andrew C. Stone

40 North Central Avenue, Suite 1200

Phoenix, Arizona 85004

U.S. DEPARTMENT OF JUSTICE

By: Mr. Reginald E. Jones

1400 New York Avenue, NW, Suite 600

Washington, DC 20530

For the Defendant Lacey:

LIPSITZ GREEN SCIME CAMBRIA

By: Mr. Paul J. Cambria, Jr.

42 Delaware Avenue, Suite 120

Buffalo, NY 14202

For the Defendant Larkin:

BIENERT KATZMAN

By: Mr. Thomas H. Bienert, Jr.

Ms. Whitney Z. Bernstein

903 Calle Amanecer, Suite 350

San Clemente, CA 92673

For the Defendant Spear:

FEDER LAW OFFICE

By: Mr. Bruce S. Feder

2930 East Camelback Road, Suite 160

Phoenix, AZ 85016

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For the Defendant Brunst:

BIRD MARELLA BOXER WOLPERT NESSIM DROOKS

LINCENBERG & RHOW

By: Mr. Gary S. Lincenberg

1875 Century Park E, Suite 2300

Los Angeles, CA 90067

For the Defendant Padilla:

DAVID EISENBERG, PLC

By: Mr. David S. Eisenberg

3550 North Central Avenue, Suite 1155

Phoenix, AZ 85012

For the Defendant Vaught:

JOY BERTRAND, LLC

By: Ms. Joy M. Bertrand

P.O. Box 2734

Scottsdale, AZ 85252

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P R O C E E D I N G S

COURTROOM DEPUTY: On the record in CR 18-422, United

States of America versus Michael Lacey and others, before the

Court for a status hearing.

MR. RAPP: Good morning. Kevin Rapp, Reginald Jones,

Andrew Stone, Peter Kozinets, and Margaret Perlmeter on behalf

of the United States.

MR. CAMBRIA: Good morning, Your Honor. Paul Cambria

on behalf of Mr. Lacey, who is present.

MR. BIENERT: Good morning, Your Honor. Thomas

Bienert and Whitney Bernstein on behalf of Mr. Larkin, who is

present.

MR. FEDER: Bruce Feder for Scott Spear, who is also

present.

MR. LINCENBERG: Good morning, Your Honor. Gary

Lincenberg for Mr. Brunst, who is present in court.

MR. EISENBERG: Good morning, Your Honor. David

Eisenberg on behalf of Andrew Padilla. He is also present.

THE COURT: And on the phone.

MS. BERTRAND: Good morning.

Good morning, Your Honor. Joy Bertrand appears for

Ms. Vaught. We waive her appearance. And thank you for

allowing me to appear by phone this morning.

THE COURT: So, for the record, Ms. Bertrand e-mailed

my staff yesterday that she had an emergency that was going to

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prevent her from making it here, so I authorized her to appear

by phone.

Yesterday I asked my staff to e-mail counsel a

proposed calendar for trial.

Did the government receive that?

MR. RAPP: We did, Your Honor, and we have no

objection to it.

THE COURT: And did any of the defense not receive it?

(No response.)

THE COURT: Okay. Let's start with you, Mr. Cambria.

What's your position on the proposed trial?

MR. CAMBRIA: Mr. Bienert, Your Honor, is going to

indicate what the position is on the part of the defense.

THE COURT: Okay.

MR. CAMBRIA: If that's acceptable.

MR. BIENERT: Am I allowed to take the mask off to

talk? Should I do it here or there?

THE COURT: Why don't you come up to the podium so

you're away from --

MR. BIENERT: Your Honor, we're good with the dates,

but with a couple of caveats.

Number one, Mr. Lincenberg and I both are in the same

trial in front of Judge Hatter in Los Angeles Federal Court,

scheduled for February 15th. It's supposed to take about, I

would think, a month.

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The government has said in that case for a year that

it is going to supersede and they still haven't. And they're

kind of ignoring us, but everything about it suggests they're

going to supersede. We believe that it is highly likely that

trial will move, but it hasn't happened. We will reach out to

them. But I think it is, in my view, 75 to 80 percent likely

that that trial moves because of a superseding indictment, we

just haven't had it happen. So we just need to watch that and

address it accordingly, according to Your Honor.

Number two, and I am kind of forgetting a little, my

recollection is the dates we had scheduled in Your Honor's

proposed schedule were from, say, mid February to sometime

early in May, if I'm remembering correctly.

THE COURT: It was starting February 23rd.

MR. BIENERT: So subject to the trial in L.A., we're

fine with that. The only issue is on the back end. We had a

trial scheduled this November that the judge made very clear it

was reluctantly, because he was a little upset with us, moved

to May 24th because of our trial here. And I say that just

because he's not moving that trial again. He's made that very

clear.

We, obviously, are scheduled to be done by May 24th,

but it's, you know, it's a pretty -- it's an elaborate,

extensive case. I think we would need some time to prepare.

My only request is, we can do it within the framework, but what

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strikes me about our scheduling, and in light of kind of where

we were and where we are, I would like to think that the

government's presentation could be a little shorter if we tried

the case in February, than maybe originally thought, given some

of the evidentiary issues.

And my only hope would be that at some point we could

address scheduling with an eye towards, do we really need a

trial that's going to last 12 weeks, or 10 to 12 weeks, or can

this trial be maybe even as little as 8 to 10 weeks. So I just

flag for Your Honor that I think we need at least three weeks

to prepare for the May 24th trial, so I just, on the back end,

I think we need to be done by, you know, kind of May 1st-ish,

end of April. Seems very doable to me, but at least the way

Your Honor set it up, that could be a problem.

And then just, finally, I would -- I think we want to

have a briefing schedule or something. Four of us, those of us

who are retained, want to address with you money. The

government has seized, I think, over a hundred million dollars.

There are many arguments they seized trust account money, they

seized money that our clients had before Backpage even existed.

I think we've been back and forth with the government about

addressing, can we get money back, they're not agreeing, but I

think they agree that we can and should address that with you.

I can tell you that the four of us did this past trial

in the hole. And if we've got to do the trial again, we want

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to address with Your Honor whether or not -- because we don't

see how we can do a trial again for free. I know in my office

that's very difficult. There is a lot of money that I think

there are very good arguments -- I don't think we need to get

into now, unless you wanted me to -- for why we should be

allowed to access some of that money for defense fees and costs

for all four of the retained counsel. But we need to address

money, and we would at least like a briefing schedule to do

that with Your Honor.

I think the government has agreed -- because the money

issues go between here and the Central District of California

-- and I think the government and us agree that we should be

able to address whether we get release of some money for trial

through Your Honor, but they can confirm or not.

But, anyway, with those caveats, we think the

scheduling is as good as it gets, but those are our issues.

MR. LINCENBERG: I would like to add a little bit on

that.

THE COURT: Okay.

MR. LINCENBERG: First, if the trial is going to go in

February, I think -- following up on what Mr. Bienert was

saying -- it really needs to be with an understanding that the

trial will end mid April or so, so that -- I get it, it depends

on whether the government cuts things back, and we have to

leave probably three weeks for a defense case, two, three weeks

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for a defense case. So, if it's going to go in February, my

preference would be that it begin in earlier February.

Second, just to follow up on what Mr. Bienert was

saying about the case in San Diego. The Court may recall we've

mentioned this. This is Judge Curiel in San Diego. And,

actually, it wasn't until a hearing yesterday that Judge Curiel

officially continued the trial from late November to May 24th,

just so the record is clear. It was always clear that he

would, but with everything going on, it wasn't official. And

the government there, for the longest time, was opposing any

continuance, despite the conflicting schedules.

And with regard to the trial before Judge Hatter, I

don't know whether the government's going to supersede, whether

they have secretly superseded or not. I do believe that the

prosecutors in that case are pretty reasonable guys, and I

think that they'll go along with it, but, obviously, we can't

speak to it.

And I raise these because I can't commit to agreeing

to a February date when I have a February trial there right

now, and with all of the other scheduling conflicts. And I

also can't commit to it really until we have a sense as to

whether or not we're going to have any funds.

We, not only are in the hole, in terms of fees, but

we're putting out cost money renting -- you know, we all rented

a house for three, four months, that we're now eating that

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money. And we have to find something, and it's going to be

even more expensive, you know, given Phoenix in February, to

find things. So there is just a lot of moving parts why that

aspect of it is really important to see whether or not there

can be funds released.

And, you know, part of this -- there is a lot of

reasons for it. We don't need to get into it. And part of it

was due to COVID and the extension and all the additional time

and monies that got eaten up with that. So I just -- I just

wanted to make clear for the record.

And then, with regard to the Court's scheduling, I

just want to put on the record, I have a short prepaid trip

March 25th to March 30th, it's -- that goes over a weekend. It

includes some other dates. You know, if we have the trial

scheduled, I will work with the Court. And, if the Court may

recall, we had a date when I had to be out, and I talked to the

prosecutors about who the witnesses were going to be.

Mr. Panchapakesan was able to cover that. We'll try to work

it. But I just want to have that on the record that I do have

that prepaid.

Thank you, Your Honor.

THE COURT: Your trial in L.A. with Judge Hatter, is

that a criminal or civil?

MR. LINCENBERG: Criminal case. It's set for --

THE COURT: And how many defendants?

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MR. LINCENBERG: Three defendants.

THE COURT: How old is it?

MR. LINCENBERG: That one is not as old as this one.

That one is, I think March 2020.

MR. BIENERT: Early 2020, February or March 2020.

MR. LINCENBERG: February/March 2020 was the

indictment.

And the Judge Curiel case -- I think this case was

indicted in maybe April or so of 2018. The Judge Curiel case,

I think, was the fall of 2018, maybe November or so.

MS. BERNSTEIN: It was October, indicted in October,

Your Honor.

THE COURT: And how many defendants are in that case?

MS. BERNSTEIN: Four.

MR. LINCENBERG: That case is four.

THE COURT: Okay. With respect to the start of the

trial, we could pick a jury on the 9th, 10th, and 11th of

February, and then start the actual trial on the 22nd, which

would, you know, advance us.

That following week I'm actually supposed to be

sitting with the Ninth Circuit in San Francisco, but we could

pick the jury and that would advance things a little bit.

MR. LINCENBERG: Right.

THE COURT: Mr. Eisenberg.

MR. EISENBERG: Thank you, Your Honor. I'll speak

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from here.

I have a case scheduled in front of Judge Tuchi on

February the 1st. It is an older case -- I mean, a more recent

case than this. It's CR 20-165. It's a complex case indicted

in, well, in 2020. Two defendants. However, Judge Tuchi

issued a minute order directing the parties to appear on Friday

coming to determine the likelihood of whether that case would

go forward as scheduled on February the 1st. There is one

defendant who is detained and my client is not. Two-defendant

case.

THE COURT: And how long is that supposed to last?

MR. EISENBERG: I saw that it was projected for three

weeks.

MR. STONE: Your Honor, if I may on that? That's my

case that Mr. Eisenberg is talking about.

MR. EISENBERG: It's your case? It's my case.

MR. STONE: From this side, it's my case. And there

was just a motion to continue the trial filed by the other --

the co-defendant last week, so I suspect that that trial is

going to get moved.

THE COURT: Okay. Anybody else?

MS. BERNSTEIN: Your Honor, I just want to note that

in the San Diego trial, we have a motion in limine hearing on

April 7th. And I feel that's important to put on the record,

because we got into a bit of a bind in San Diego because the

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government alleged we hadn't put those dates on the record

here. So I do want to put on the record that Thursday,

April 7, we have a motion in limine hearing in San Diego.

THE COURT: That's on the Curiel?

MS. BERNSTEIN: Correct. It's 18-CR-4683.

MR. LINCENBERG: And, Your Honor, we haven't gotten to

the issue of hearing dates for some motions. I don't know,

when the Court said, is there anything else, if the Court

wanted to get into that or hold off?

THE COURT: Not right now.

MR. LINCENBERG: Okay.

THE COURT: But I don't want what happened last time

with last-minute motions telling me that there is some other

conflict. So if you look over the calendar -- because I know I

just sent it to you yesterday -- but, in the next week, if you

look over your calendar and you see any other dates that have

conflicts, I want to know. After that, I'm not moving the

trial, I mean, other than your issue with Judge Hatter. But

I've jotted down the dates you're going to be out of town in

March and the April 7th, I have a note with your trial date

starting May 24th, the note about Judge Hatter.

Does the government have any issue with starting on

February 9th for jury selection, and then we'd have that

following week off and we'd start on the 22nd?

MR. RAPP: We don't have an issue with that.

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THE COURT: Okay. After a mistrial, of course,

defendants have a speedy trial right.

So, Mr. Bienert, does your client waive time?

MR. BIENERT: Yes, Your Honor --

THE COURT: Mr. Cambria?

MR. BIENERT: -- due to the complexity of the case and

the issues.

THE COURT: Okay.

MR. CAMBRIA: On behalf of Mr. Lacey, yes, Your Honor.

THE COURT: Okay. Mr. Feder?

MR. FEDER: On behalf of Mr. Spear, yes, Your Honor.

One other thing, in the area of trying to shorten the

trial, will the Court entertain further motions in limine? I

mean, we will talk to the government initially, but in regard

to trying to shorten some things and keep some things out that

we believe precipitated the mistrial to begin with.

THE COURT: No. I mean, you guys file them anyway. I

mean, that's part of the delay in the trial is we constantly

had to stop for new filings, so I don't think that the

government is causing all of the delay, and, quite frankly, all

of the issues have been brought up many times. I can't imagine

that there is something new.

Mr. Lincenberg, does your client waive time?

MR. LINCENBERG: Yes, Your Honor.

THE COURT: Mr. Eisenberg?

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MR. EISENBERG: As does Mr. Padilla, Your Honor.

Thank you.

THE COURT: Okay. And, Ms. Bertrand?

MS. BERTRAND: Yes, she waives time. Thank you.

THE COURT: All right. So it is ordered resetting

trial for February 9th, and excluding time between now and

then. So our plan will be for jury selection the 9th, 10th,

and 11th, and then trial will start on February 22nd.

I'll fix a new calendar and e-mail it out with notes

about the motion in limine hearing and other things. And then

once you look at that, if I don't -- I think it can be done by

e-mail to my staff, cc-ing everybody else if you have other

conflicts -- but if I don't receive any further notices of

conflict regarding those dates, I mean, I know things come up,

but I want to firm up the calendar as much as possible. So let

me know within a week after you've reviewed it some more.

Mr. Feder.

MR. FEDER: Judge, when do you anticipate sending out

the jury questionnaires?

THE COURT: Okay. Well, before we get to that, I

wanted to ask if anybody after jury selection and review of the

questionnaires thought there were any questions that were

problematic and should be reworded, or if you're all happy with

sending the same questionnaire?

Mr. Rapp.

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MR. FEDER: Can we have a couple of days to get back

to the Court?

THE COURT: Yes. So if the parties propose any

changes to the jury questionnaire, let's see, those should be

submitted by October 12th, so that's a week from today.

And then, I'm sorry, Mr. Feder, what were you asking

me, the timing?

MR. FEDER: Yes. I mean, last time, as the Court

knows, we had a time where we got the questionnaires and had

some meetings.

THE COURT: So I'd like to plan to get them back by

January 28th, and then we can have a --

Elaine.

(Off-the-record discussion between the Court and the

courtroom deputy.)

THE COURT: All right. So I have trials around this

time, so maybe I'll ask the jury office to get them back by the

27th. And then on the 31st we can have a conference to discuss

excusing jurors for cause or hardship -- I'm sorry, hardship.

And then you'll have the questionnaires for a sufficient time

before we start on the 9th.

So on the 31st -- does everybody have their

calendar -- on the -- that took a long time, so let's start at

9:00 a.m.

MR. LINCENBERG: By Zoom?

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THE COURT: Yeah, we can do it by Zoom.

Does anybody have a conflict with 9:00 a.m. on the

31st?

MR. RAPP: The government does not.

MR. BIENERT: No, Your Honor.

MR. CAMBRIA: No.

THE COURT: All right. My courtroom is not a Zoom

courtroom, so I'll have to just confirm that I can reserve a

different courtroom for that, but we'll tentatively set it for

the 31st at 9:00, otherwise we may have to do it

telephonically, which is difficult because there is so many

people. So I'll try to do a Zoom or we might have to move the

date, but, for right now, does the 31st work for everybody?

MR. CAMBRIA: Yes.

MR. RAPP: Yes.

THE COURT: Okay. Any other questions from the

government regarding trial schedule?

MR. RAPP: No.

THE COURT: Anything else, Mr. Bienert?

MR. BIENERT: No, Your Honor.

THE COURT: Anybody else?

MR. LINCENBERG: No, Your Honor.

THE COURT: And I'll let you know as we get closer

whether we're going to -- you know, the COVID rules change all

the time, so we'll either be downstairs or we'll be back up

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here. Downstairs is much more comfortable, I'm assuming, but

I'll have to see if we can do that.

All right. We're at recess. Thank you.

(Proceedings concluded at 11:24 a.m.)

* * *

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C E R T I F I C A T E

I, CHRISTINE M. COALY, 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 8th day of February,

2022.

/s/ Christine M. Coaly_______

Christine M. Coaly, RMR, CRR

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