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United States District Court

CR-18-00422-PHX-SPL(BSB), July 20, 2018

 UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_______________ 

United States of America, )

)

 Plaintiff, ) CR-18-00422-PHX-SPL(BSB) 

 ) 

 vs. ) Phoenix, Arizona 

 ) July 20, 2018 

James Larkin, ) 1:29 p.m. 

 )

 Defendant. )

___________________________________) 

BEFORE: THE HONORABLE BRIDGET S. BADE, MAGISTRATE JUDGE

TRANSCRIPT OF PROCEEDINGS

MOTION HEARING

Transcriptionist: 

Elaine Cropper

Sandra Day O'Connor U.S. Courthouse 

401 West Washington Street, SPC 35 

Phoenix, Arizona 85003-2150 

602.322.7245/(fax) 602.322.7253 

Proceedings Recorded by Electronic Sound Recording 

Transcript Produced by Transcriptionist 

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Case 2:18-cr-00422-DJH Document 237 Filed 07/24/18 Page 1 of 40
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APPEARANCES

For the Government: 

 KEVIN M. RAPP, ESQ.

MARGARET PERLMETER,ESQ.

PETER KOZINETS, ESQ.

 U.S. Attorney's Office (Phoenix)

 40 N. Central, Ste. 1800 

 Phoenix, AZ 85004-4408

 602.514.7500/(fax) 602.514.7650

For the Defendant: 

 THOMAS H. BIENERT, JR., ESQ.

 Bienert, Miller & Katzman, P.L.C.

 903 Calle Amanecer, Ste. 350

 San Clemente, CA 92673

 949.369.3700/(fax) 949.369.3701

Also Present: 

 JUSTIN LAUBY, PRETRIAL SERVICES OFFICER

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Case 2:18-cr-00422-DJH Document 237 Filed 07/24/18 Page 2 of 40
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P R O C E E D I N G S

(Court was called to order by the courtroom deputy.)

(Proceedings begin at 1:29 p.m.)

(Defendant is present and released.)

THE COURT: Good afternoon. You may be seated. 

COURTROOM DEPUTY: Criminal docket 18-0422, United

States of America v. James Larkin, on for a motion hearing

regarding motion to modify conditions of release.

MR. RAPP: Good afternoon. Kevin Rapp, Peter

Kozinets, and Peg Perlmeter on behalf of the United States.

THE COURT: Good afternoon.

MR. BIENERT: Good afternoon, Your Honor. Thomas

Bienert on behalf of James Larkin who is present.

THE COURT: Good afternoon. 

And good afternoon Mr. Larkin.

THE DEFENDANT: Good afternoon.

THE COURT: The Court has received Mr. Larkin's

motion to modify conditions of pretrial release, Government's

response and Mr. Larkin's reply and has reviewed all of those

filings, and has also reviewed the docket and the order setting

the conditions of release. As you know, the order was entered

by Judge Boyle but the motion to modify was referred to me by

Judge Logan. Typically, the motion to modify an order would be

directed to the judge who entered the order and so I did review

the order to make sure I was familiar with its terms. I do

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Case 2:18-cr-00422-DJH Document 237 Filed 07/24/18 Page 3 of 40
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have to tell you I did not have time to go back and listen to

the recording of that hearing, although I believe because the

conditions were stipulated, that it's unlikely that there would

have been tremendous amount of helpful information in that

hearing.

So I think I understand the basic premise of the

motion, the Government's opposition, and where the parties

stand now unless things have changed since the time this was

fully briefed.

Have there been any changes in position since the

time the parties briefed the motion?

MR. RAPP: No, Your Honor.

MR. BIENERT: No, Your Honor.

THE COURT: Okay. So there was an initial dispute as

to whether there was statutory authority for the Court to

modify or revisit the conditions of release. And looking at

the statute and the cases the parties cited and just

considering, as a practical matter, how the Court addresses

release conditions, it seems to me that under the statute under

Section -- 18 USC, Section 3142(c)(1)(B) that the Court can

modify and amend conditions of release. The statute clearly

provides that authority.

As a practical matter, there's no reason why that

would happen without some change in circumstances. Otherwise,

we would have serial motions or serial hearings addressing the

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same issue repeatedly. Of course that would not promote

efficiency or preserve the Court's resources, so I will tell

you from my experience as a magistrate judge who was tasked

with detention issues on a regular basis that the way that

these matters are presented to the Court is really in three

ways.

One, there could be a petition to revoke. In those

circumstances, the person has been ordered detained and there's

an allegation that they violated their conditions or they

committed another criminal offense. And so a petition to

revoke conditions is filed under 18 USC, Section 3148 and then

of course the Government has to show by a preponderance of the

evidence that there has been a new criminal offense or by clear

and convincing evidence that there has been a violation of

conditions. Of course if there's been a violation of

conditions during a criminal offense, that is change in

circumstance that the Court can consider in deciding whether to

revoke pretrial release.

Another circumstance in which the Court might be

reconsidering the detention issue is if a defendant filed a

motion to reopen the detention hearing. And that is the

statute that the Government relies on which is 3142 -- I'm

sorry, I've cited them -- I'm sorry. 3142(c)(3). And that is

the statute with respect to new material circumstances. So, in

other words, a person has been detained but there are

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circumstances that have come to light that were not known by

the movant at the time of the detention hearing. So it's not

just a matter of failing to bring something to the Court's

attention when that information was available but of new

material information being available, again, you have a changed

circumstance that would give the Court a reason to revisit the

detention issue.

And then the third way is when the parties reach an

agreement for modification or the Pretrial Services officer

approaches the Court with a recommendation to modify

conditions, and then the Court will consider, possibly amend

conditions at that point.

So I think it's acceptable for the defendant to file

a motion and seek that the Court reconsider conditions of

release. We're doing that now. It has been filed. We're

having a hearing; but I think as a practical matter in

addressing this, there really needs to be a reason why the

Court would be changing what had occurred before. And as I

understand the reason, it is that Mr. Larkin didn't fully

appreciate how having an electronic monitor and travel

restrictions would impact his ability to support his teenage

daughter and his wife.

So he's found that those conditions are more

difficult or more cumbersome than he believed they would be and

he wishes to have the Court remove those restrictions. So that

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was what I gleaned from the motion and the reply as to the

basis for changed circumstances.

And the reason I'm running through this is I want to

give counsel an opportunity to respond to it so you know how

I've reacted and what I'm thinking now, which doesn't mean I've

made a decision, but I want you to be informed as to how what

you have presented to me has been received.

So my reaction to that argument is that those are not

changed circumstances because he clearly knew that his daughter

was attending high school in San Francisco at the time he

stipulated to the release conditions. So on April 16, 2018,

when the order was entered with those conditions of release, he

knew all of that information. He knew those facts. So what

you've described or what it appears to me that you've described

is that he's having second thoughts, that he, after having

entered into this agreement, realizes that he doesn't like it.

That to me is not a changed circumstance. I'll be glad to hear

your argument as to why that is and why that would justify

changing the release conditions.

The other thing I think you should know that the

Court views is problematic is that this was done by

stipulation. And so there wasn't a full detention hearing

before the Court. That is important and I think that's

reflected in the way the parties have briefed this motion in

that they both dedicated numerous pages to the merits of the

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underlying charges which happened in other cases, the weight of

the evidence, and whether Mr. Larkin is a flight risk or a

danger. That would have been addressed at a detention hearing.

And by entering a stipulation to orders of

conditions -- with conditions of release, the stipulation

presents this issue in such a fashion that that information

wasn't presented to the Court. In other words, the Government

did not make a fulsome presentation about why they believe

there's danger or flight risk. The parties just didn't present

that to the Court. Instead they reached an agreement to

resolve those issues so now we're sort of backtracking and

looking at that possible issue again.

And here's another wrinkle for you to consider as

you're responding. The condition in the order actually says

that location monitoring is imposed at the discretion of the

Pretrial Services Officer. Now, the Government says in their

response that for them, the condition would be by GPS and that

that was something they insisted upon, the defendant agreed

upon, but that's not the actual condition that was entered.

And I have always interpreted these conditions and understood

this to mean when I was ordering location monitoring at the

discretion of the Pretrial Services officer that the officer

could use GPS or they could use RF or they could even use no

location monitoring at all if they decided it wasn't necessary.

So that makes me wonder unless I'm completely

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misunderstanding what transpired here what the officer told the

parties why we have to change the conditions if this is a

situation that is in the officer's discretion, why Mr. Larkin

can't present to the officer why he needs to be relieved from

location monitoring or not have location monitoring imposed so

that he could travel and see his wife and daughter or even why

those conditions could not be lifted temporarily so he could

travel and then reinstated when he returns to Phoenix.

Okay. So I've given you an earful of how I've

reacted to the issues presented and I'm glad to hear what you

have to say about it. Please go ahead.

MR. BIENERT: Can I speak from here or would you like

me at the podium?

THE COURT: Wherever you're comfortable. Seems as if

the microphone is picking you up there. If you would like to

stay there, you can stay there.

MR. BIENERT: Thank you, Your Honor.

First of all, I'll take the top -- the two issues

you've raised, two of the three, in reverse order. Number one,

it is our view that because the evidence was never presented to

the original Magistrate Judge, and I understand we have been

now sent to Your Honor, I don't think there really was a

detention hearing, so I think that it puts us in sort of a

quirky procedural issue as it relates to whether or not we have

met or have to meet, even if there is a requirement about there

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being a basis to reconsider. But I'm just saying that for the

record. We think there is a basis to reconsider.

THE COURT: Let me stop for a moment because I think

I agree with you to the extent that we are here. We're having

the discussion. The Court just didn't deny the motion out of

hand and say that you can't reopen detention. I don't think

that this is a circumstance under 3142 in which a person has

been detained is and seeking to reopen based on new

information. I know you're seeking to reopen or amend an order

on the provision that the Court can amend its prior order. I

think the Court can amend its prior order; but my point is, why

would it do so? And how does that make sense for the Court to

just have serial hearings to reconsider circumstances that have

not changed?

So as a practical matter, there needs to be a reason

to change the conditions.

MR. BIENERT: Absolutely. So moving to what was your

first issue, the reality is there was a practical change and

that is it is the relationship with his wife but primarily his

daughter and there are several things that at the time that the

stipulation was reached, my client didn't know and would not

have been able to appreciate. Number one, remember -- and, by

the way, Your Honor and I are in somewhat similar positions in

that we're learning all of this anecdotally. I was not counsel

at the time and I've only come in since then and reading a

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transcript and have read pleadings.

So but my understanding of things is that at the time

that stipulation was reached, my client has been arrested here

in Phoenix at the airport. He had been in custody -- he wound

up being in custody 10 or 11 days. I forget when they reached

the stipulation in that time period. So he would not have been

aware, number one, that his daughter was traumatized by the

fact that when the law enforcement knew he was out of the

country and was waiting for him at the airport, they also did a

search of his house; and, you know, in a typical safety

precaution entry but with guns out and the only person there

was the 17-year-old daughter who wound up staring down the

barrel of guns. She was traumatized by that which adds in to

other things that he learned later

Number two -- and, by the way, I would -- as I'm

relating to certain aspects of the proffer and I would

reference to the Government, I would want to just seal a small

portion of the proffer. And I think everyone here is

Government but I noticed someone walked in since then. I don't

know if we're all Government here or lawyers for parties or

not. What I would want to do is speak from here and seal it

THE COURT: Well, here's the difficulty. Because in

a magistrate judge courtroom we use a recording system rather

than a court reporter, we cannot just easily switch between

sealed and unsealed proceedings. If we go into a sealed

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proceeding, we need to adjourn this proceeding, go back on the

record, place it under seal and then the recording is then

under seal so it's not publicly available. Otherwise, we would

have a recording that the Court would not have any ability to

seal sections of it in the middle of other discussions.

So if you want to make that proffer, I think perhaps

the way we would have to do that is to save that for the end

and then perhaps have you address that separately if it's a

proceeding that needs to be sealed.

MR. BIENERT: Fair enough Your Honor.

So the point is, we'll bookmark that and then the

third fact that he would not have been aware of -- obviously

this is a many-defendant case. We have a trial schedule that

was all arrived at after these bond hearings and the trial

schedule now sets trial for I think it is January of 2020 so a

year and a half away. So at the time the stipulation was

reached, he would not have realized that he was facing a trial

a year and a half away which I think significantly is fully

after the time that his remaining teenage daughter is gone from

the house, presumably she'll move out and go to college, that

sort of thing.

So I would submit to Your Honor that based on,

through no fault of anyone, just the circumstances, there are

things that are different in the practical reality of trying to

be a husband and father when he is limited or confined to

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Phoenix with a wife and daughter who are in the Bay area. And

so I would submit to Your Honor that those are certainly

appropriate bases to re-raise with the Court whether or not the

bond conditions that are in place are the minimal that is

necessary as is the standard to assure his appearance or not.

As to the third issue, just so I'm addressing it and

Your Honor knows, frankly, I never thought of it. I think it's

a very astute point you raised. I will tell you, and I believe

Mr. Lauby is here and assuming it's all right with Your Honor's

practices, I certainly welcome him to state his comments or

views on that. In my one or maybe two -- I think it was only

one discussion with Mr. Lauby, who was very professional and

polite, what I took from it was that he just viewed it as he

didn't really take a position on whether or not he should -- my

client should or shouldn't have the electronic monitoring but

as long as that was in the order, he felt like that's what he

was supposed to do. I don't want to speak for him and if I'm

wrong, I want to be stood corrected.

But I can tell you I never addressed it as, "Hey

Probation Office, are you comfortable making the decision and

would you be comfortable with him being able to travel to San

Francisco without electronic monitoring?" Obviously, if

Probation would be comfortable with that, so would we. And I

think that all the reasons why we have pointed out in our

various briefing and that I, of course, can high point here,

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they would all apply to why I would think the Probation

Department should feel comfortable that he can be properly

monitored through phone calls or check-ins when he's in the Bay

area than here.

And I think, finally, while I think my client

understood that there would need to be permission given to get

the anklet situation addressed to be able to go to San

Francisco, I don't believe he realized or appreciated that it's

a full week's notice, which is what we are led to understand is

because of the case load and all the different things that have

to be done because of the anklet, it's a week's notice. So as

a practical matter, what that means is not only can he not just

on his own choose to go to San Francisco and be with his wife

and daughter when he would like; but if something comes up that

would be unexpected, a need, an issue that a normal patient

should be able to address, he's not able to do that because we

have a week lead time.

So I would submit to Your Honor that at least for

sake of, in essence, a jurisdictional issue or can Your Honor

consider this, I would submit that those are valid bases to

consider it. The simple reality is, there is a practical issue

that bears on my client's appropriate right as a father and a

husband to address his family and with the -- at least with the

imposition of the anklet, limited to Maricopa County that is

very, very difficult to accomplish. And, obviously, I can talk

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more on the merits. I'm not sure if Your Honor wants me to or

just confine it to these topics for now.

THE COURT: Well,I don't want to go off into a

discussion on the strength of the evidence. That was what

quite a bit of the briefing was devoted to. I do recall that

the parties referenced the transcript of the hearing at which

Judge Boyle imposed the conditions; and so as I said, I didn't

listen to the recording so what I would like to know from

counsel having read the transcript is, what Judge Boyle said

when he was imposing the conditions. Because there are times

when the wrong box gets checked on the form; but I assumed when

I read the order and it said location monitoring at the

discretion of the officer, that when he reviewed the conditions

with Mr. Larkin, that is what he would have explained rather

than active GPS. Now of course there could have been confusion

if he actually said "active GPS" but inadvertently "at the

discretion of the officer" was checked.

And the other thing counsel is what I always tell

people, and this is the reason why really one of these issues

should go back to the judge who handled the previous order, I

always advise defendants that Pretrial Services needs two

weeks' notice and I tell them that at the time when I'm

explaining the travel restrictions to them because that's what

I've understood from Pretrial Services is necessary for them to

be able to sufficiently process a request for travel.

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So a week would be quick from my experience. I would

have expected Judge Boyle to say that but maybe not. His

practice may not be the same as mine but in any event, did you

find in the transcript --

MR. BIENERT: I have the transcript and if Mr. Rapp

has it, he can recite the portions.

MR. RAPP: Sure.

The Court: Mr. Larkin, let me tell you as well that

you are to submit to location monitoring indicated

and that you will be location monitoring technology

at the discretion of Pretrial Services, so you have

to abide by electronic monitoring. Essentially, it's

to track your whereabouts here in Maricopa County

because you have no other restrictions. You can

travel within Maricopa County. If you wish to travel

outside of Maricopa County, you have need permission

from Pretrial Services, but you do not have to abide

by electronic monitoring.

Do you understand that?

The Defendant: Yes, I do.

Do you have any questions at all?

No.

THE COURT: Okay. So it sounds like what Judge Boyle

referenced was location monitoring at the discretion of the

officer rather than active GPS. And he didn't make any

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statement with how much lead time was required to seek

permission for travel. All right. So you're really proffering

the circumstances under which he entered the stipulation and

although he knew his daughter was residing in San Francisco and

attending school there, he didn't know how traumatized she

would be by a search of their home and then his absence. When

did the search occur? Did the search occur before April 16,

2018?

MR. BIENERT: It did. I believe the search -- I

believe it occurred the same day as the arrest, which I think

was in around April 6, and then my client was in custody here

until he was released on bond which I think was around the 20th

or 22nd. 16th.

THE COURT: So he was arrested I believe on the

ninth.

MR. BIENERT: I thought it was the sixth at the

airport.

THE COURT: Arrested on the sixth. There's a search

on the sixth. Approximately ten days later the stipulation is

entered and the Court enters the order with the conditions of

release.

In that period of time he never spoke with his wife

or his family about what had occurred or how his daughter was

reacting to the search?

MR. BIENERT: Well,I believe he spoke to his wife and

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I think there was a lot of emotion and chaos about what

occurred but it is not about what happened, the specifics.

There's a whole lot of specifics about the search that he's

learned since.

THE COURT: All right.

Mr. Lauby, Pretrial Services' position on electronic

monitoring? Perhaps I'm mistaken and if I am, it's a good

thing I'm finding it out now; but I've always assumed if I put

that in, the discretion of the officer, the officer could not

impose electronic monitoring.

PRETRIAL OFFICER: No, Your Honor, because the whole

discussion was about him -- originally, the Government's

position was going to be that he be on home detention. I

actually talked to them about making it Maricopa County but

being on GPS because otherwise we have no way to track that he

is staying within Maricopa County.

THE COURT: But that's not what the order says. It

says Maricopa County but it doesn't say GPS. So I understand

if I enter an order that orders radio frequency monitoring or

passive GPS or active GPS and Pretrial Services is going to

administer that but I issue an order that says location

monitoring at the discretion of the officer, it could be any of

those types of monitoring.

PRETRIAL OFFICER: The only way that we can monitor

that he stays within Maricopa County is GPS. RF does not do

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anything other than track him in and out of the house so he

could leave the house and drive to New York and we would not

know that.

THE COURT: Well, but that's a separate condition

which is the not travel outside of Maricopa County. We often

have travel restrictions without location monitoring.

PRETRIAL OFFICER: Correct, but it's --

THE COURT: We find out not because we're monitoring

them but perhaps they are arrested somewhere else or they note

that they have gone somewhere else. I see the two as a little

different. Perhaps it was discussed as joint but it's not what

the order says.

PRETRIAL OFFICER: It was, Your Honor. We all met,

defense agreed at the time that he would be on GPS and tracked

in Maricopa County. I was being nice and not having him on

home detention and I think I burned myself now.

THE COURT: Well, I think -- I don't think that

anybody did anything inappropriate. I think maybe it was just

sort of lesson learned that if the discussion and the agreement

was that it would be GPS and the ideas was so that we could

enforce a travel restriction, then the proposed conditions

should have said GPS and a box for GPS should have been

checked.

Mr. Rapp?

MR. RAPP: The only thing I wanted to add is there's

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another portion of this transcript that is from the start of

it.

The Court says: I reviewed it. I've copied it.

That's even been signed by Mr. Larkin of the release

conditions. Let me review those with you. 

And I'll return to Mr. Larkin. The request that is

added to this case is that he not travel outside of

Maricopa County and that he be subject to electronic

monitoring. The electronic monitoring would not have

the standard curfew home detention or home

incarceration, but would it monitor his whereabouts

in Maricopa County.

Any requests regarding electronic monitoring other

than that, Mr. Rapp?

No.

So there was from the outset discussion about

electronic monitoring within Maricopa County and the reason for

it. I think -- I don't want to jump to something else here but

I think part of it was the location of the house. Maybe GPS

was not viable. There or --

PRETRIAL OFFICER: No. And just as Judge Boyle

stated, he wanted him to be monitored in Maricopa County and

not leave and GPS is the only way we can do that, so I was

doing what Judge Boyle asked Pretrial to do.

THE COURT: All right. And sounds as if defense

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counsel viewed this as GPS as well. Nobody raised this except

for me and that is I think one of the maybe advantages or

disadvantages to having a new set of eyes come along and look

at an order, that I saw it differently than the parties

understood it and so I'm just going to proceed as the parties

have described, that the understanding and the agreement and

the order was intended to require active GPS and so that is the

restriction that Mr. Larkin is asking me that the Court remove

and also remove the restriction that he may not travel outside

of Maricopa County so that he can travel to California.

I'm not saying what I'm going to do but with change

that you're requesting, are you have requesting that his

restriction be travel to Arizona and California and nowhere

else, or are you saying no travel restrictions?

MR. BIENERT: No. We're limiting this to his ability

to travel -- we would like in Arizona but right now it's

Maricopa, that's the lesser of the issues, but in the State of

California. And here's why we're saying the state: His wife

and his daughter are in the Northern District of California,

the Bay area. My office as counsel, I'm in the Central

District of California; and his other case, Your Honor, which

we reference is in Sacramento which is the Eastern District of

California. So there is no doubt that the priority is his wife

and daughter in the Northern District of California. But given

how much is going on in that is case, certainly there will

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be -- I come here a lot, Your Honor, but I could see times

where we would like to get him there. We can clearly plan that

in advance as a general matter. But our position would be to

be practical, he should be able to travel throughout California

and either Maricopa County or the State of Arizona. We're not

asking for the rest of the country without permission from

Probation.

THE COURT: All right. Another thing that's

interesting about the travel restriction here is I don't want

to say usually because usually is what I do, not what other

people do, but usually when I impose a travel restriction, it's

except for court purposes, meeting with lawyers, that sort of

thing. So what you've described is his case is pending in

three different districts in California. I would not have

restricted travel for that purpose; but Judge Boyle's order, by

it's plain language, does. So that is an issue with respect to

the travel.

Let me hear from Mr. Rapp and then we can try to

figure this out.

MR. RAPP: Well, I talked to Mr. Bienert about this

and he is at a little bit of disadvantage because we negotiated

this over a fairly lengthy time period and we, as you know, we

filed a detention motion and it was extensive and they replied.

But this was an important condition for us and we conceded some

conditions that I don't think we had to and one was that the

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property that was posted to secure his attendance was property

that we viewed as being purchased with or being maintained with

tainted funds and they had no other assets seemingly to post as

a property bond, so we sort of conceded that.

Basically, what I'm hearing is he doesn't like the

deal they cut and they want to revisit it. The fact that he,

his attorneys were in California was known to the Court.

Mr. Bienert is in southern California. His other attorney is

in northern California. It was presented to Judge Boyle by

Mr. Cassman, his original attorney, that he had a daughter in

California, that she was attending high school. His Larkin can

go -- can still go and see them. He just has to get

permission.

So we thought we had a deal and so we're sort of

surprised when they came back and said, "Oh, now we want this

taken off." There really isn't any changed circumstances that

were discussed certainly with the United States and presented

to the Court at the time of the original terms that were

imposed.

The only changed circumstances from the United

States' standpoint is -- and I know the Court has read the

pleadings is the case is -- frankly, has gotten quite a bit

better on Mr. Larkin and the level of evidence against him has

increased thereby giving him more of an incentive to flee. So

we really think these conditions are fair. He gets to see his

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daughter. In this day and age of electronic communication,

there is Facetime and so many other ways in which to

communicate with people. We just don't see the basis for this

changed circumstance, for this change of the conditions.

THE COURT: Mr. Bienert?

MR. BIENERT: Couple of things. First of all, while

I don't have the full history, I'm a little surprised that

Mr. Rapp says he's surprised because one thing that I did

directly discuss with Mr. Rapp before filing this motion was

this issue and Mr. Rapp confirmed to me what prior counsel,

Mr. Cassman, had told me which was when they were negotiating

the stipulation, they specifically talked about lifting the

anklet at some point. Mr. Rapp told me that he thought that he

should reconsider that more at the six-month mark and he felt

like I was raising it earlier than he would have envisioned and

I just said, "Well, these are the reasons why I want to raise

it now."

So I don't believe -- and he can certainly correct me

if I'm saying is inaccurate -- but I believe that it was part

of the discussions while my client was in custody that the

anklet issue would be revisited at some point. I am doing it

now and, frankly, a month ago because of the issues that have

arisen, that my client did not know about during the ten days

that he was in incarceration and that is just a different

scenario. So that's just addressing that point.

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In terms of, you know -- I'll just say this about the

case which, as I think Your Honor would hopefully recognize

from the case law of the factors you consider on the merits of

flight risk, the strength of the case, the charges are

considered one of the lesser ones but here's the bottom line on

that: The Government filed I think a 16-page opposition and

they devote 10 pages to trying to rebut our statement that of

the nine courts that have addressed this issue about whether or

not a publisher can be held responsible for the actions of

clients, all nine of them that have addressed the contested

issues have ruled they can't. And so the bottom line on all of

this is, unlike most cases where Your Honor would preside

where, frankly, whether the client did the crime or not is an

issue, but whether or not what's alleged is a crime is not an

issue. This is one of those rare cases where whether or not

this is even a crime is a huge issue. The pending case in

Sacramento where my client has appeared at every single

appearance, most of which he had zero bond conditions, and now

he has a $250,000 bond and he appears, he's traveled

internationally and gone back to that Court. That Court

dismissed the prostitution charges.

The bottom line is, Your Honor will be seeing a lot

of motion practice that, you know, depending on your bent about

constitutional law and things like that, will at least be

interesting. So all I'll say about the merits of the case is

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this case is a novel new approach by the Government where they

are for the first time going to have to see if they can get a

tried verdict or finding in a contested case, whether this can

even be a crime. So that certainly is not a reason why Your

Honor should say that he is a flight risk.

Now we get to the more traditional reasons, which I'm

hard-pressed to think of a case where there is a stronger basis

to say that somebody is not a flight risk.

THE COURT: Okay. Let me stop you, Mr. Bienert. So

here's what I was trying to outline at the outset of the

hearing. And perhaps the cynical view but everything you're

arguing is what I would have expected counsel to argue at a

detention hearing: The weight of the evidence, whether the

person has been placed on supervision in another Court or has

appeared or whether they have failures to appear in their

history, whether they have ties to the community, whether they

have ties in another country, whether they have other

incentives or flight, whether they have the resources to fly,

all of those sorts of things would have been presented at a

detention hearing and all were fully within counsel's knowledge

at the time this happened.

Your predecessor knew all of these things, knew

everything you've argued to me, everything, everything about

what you're going to argue about whether there was a crime, and

what's happened in other courts. None of this is new, nothing

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is that different.

With all of that information, and based on their

negotiations with the Government and the position I'm sure the

Government told them they were going to take with respect to

detention, Mr. Larkin decided that he would negotiate and enter

a stipulation and have the Court enter conditions of release

and the Government in that agreement did not present what they

would have presented with respect to detention.

So the cynical view of what has occurred from what

you've described to me is that defense counsel told Mr. Rapp

and the other AUSAs that he wants to revisit this issue sooner

rather than later and he said I think it would be appropriate

in six months. You entered the deal, then after the order is

entered, five, six weeks later, file a motion seeking to

revisit it.

So it seems as if the circumstances are that nothing

that has happened was not known at the time the parties entered

their agreement and advised the Court of how they wished to

proceed. Instead, Mr. Larkin and counsel do not like the

circumstances and so made the agreement to forego any risk of

actually being detained and then now want the Court to change

it. I can't see anything that's changed.

As you've told me, the search occurred at the time of

the arrest. He spoke to his wife about it. Everything you

relayed about how traumatized his daughter may have been from

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that search would have been known to him. He was in

communication with his family. Now, he can speak with them on

the phone or through Skype. He can travel to see them if he

gets permission and they can travel here to see him. So I

don't see a reason why the Court should change that condition

that the parties agreed upon within weeks after entering the

agreement.

I think what -- what I understand the Government's

position to have been, based on what you have relayed and in

fairness the Government hasn't explained third position, but

what you've described is fairly typical in circumstances where

a person is under supervision for a pretty significant period

of time, six months or so, and they are subject to the color

line, to random drug testing, and they never have a positive

test and they always show up for the test and they always

report in and the parties agree we don't need the substance

abuse testing. We don't need random testing any more then come

to the Court and ask the Court to change it.

So it sounds to me what Mr. Rapp was describing is

let's see how it goes and if he's in compliance for a

reasonable amount of time and a sufficient period of time that

gives us assurance that he's not going to flee, then we'll be

open to going before the Court and asking to change the

conditions.

That is how I understand what he was saying to you

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and that Mr. Larkin's reaction or counsel's reaction was, well,

the Government is taking a position now. I don't know that

they, at that time, consciously thought, "Okay, we'll go with

this but we'll seek to change it later," but that's exactly

what they did, whether they decided or had second thoughts

within a few weeks of the agreement and they didn't want to

wait, as the Government had said would be their position. That

is what happened.

I mean, if defense counsel had responded to the

Government and said, "No, we want to have this revisited in one

month," probably the Government would have taken a different

position. They probably would have said based on what they

have represented in their response that this was important to

them, well, let's have a detention hearing. They had already

briefed that. They had filed a very significant brief, which

is unusual, so they were serious about it.

So that's not what transpired, so I don't see a basis

to change that condition. There may be in some period of time,

maybe that the Government is satisfied and that the parties can

agree or that it's not necessary because Mr. Larkin has been in

compliance with these conditions. In meantime, he can still

travel to see his family and they can travel to see him. He

just needs permission for that travel is the way the conditions

are now imposed.

So one way to address this might be to -- well, I

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think we need to address the issue of the Court appearances and

meeting with his attorneys and how frequently he needs to do

that and how much notice he needs to be able to do that. And I

haven't heard the Government address the issue of California

travel with respect to court appearances and what, if anything,

could be done to facilitate that so that he could appear in

court as required in those three districts.

Mr. Rapp?

MR. RAPP: Well, Mr. Bienert can correct me if I'm

wrong but I sort of understood that his appearance is waived

for most of the Court appearances in California. And my

discussions with the prosecutor in California is there's very

limited Court appearances. Just so that the Court understands

the posture of the case in California, it is not post-charging.

They proceed by a complaint. There has to be a preliminary

hearing. We harken back to the OJ Simpson case where they had

a preliminary hearing in the State of California. That hasn't

even taken place there yet.

So in terms -- I don't even think Mr. Bienert is

going to suggest to the Court that Mr. Larkin has numerous

court appearances in California. I think most of those he can

waive his appearance.

So I really don't think that the Court in Sacramento

is an issue. I just think he wants to go see his family most

and Mr. Bienert is in California and to the extent he has to go

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meet with him there, you know, certainly he can get permission.

Our real issue here is, as the Court identified, it's not

uncommon that you enter these conditions and you see how it --

we'll see what happens and that was my discussion with

Mr. Cassman. We'll see what goes on here.

The problem for Mr. Larkin is we have -- it's known

that on April 5, the CEO of the company pled guilty, began

cooperating with the Government and the case has gotten

substantially stronger on Mr. Larkin. There are seven people

indicted in this indictment. And in the Government's view, the

strength of the evidence on Mr. Larkin is the greatest. He's

all over these emails. He was managing this company post-sale

in 2015 and was at every meeting and directed a lot of the

content of the conversation, to the extent their argument is

relevant in a federal criminal prosecution, what Mr. Larkin was

doing clearly as detailed in our pleadings undermines that

argument.

And so I'm not sure we would agree to take the --

agree to the removal of the electronic monitoring because

Mr. Larkin has an enormous incentive to flee the country given

the level of evidence against him.

So that's our position.

THE COURT: Mr. Bienert?

MR. BIENERT: Several things. First of all, as to

Your Honor's comments, I see it and I think this is the

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framework you started with. I think there are two separate

issues, Your Honor. Number one is whether or not we can

address this with Your Honor for whatever basis you conclude we

can or can't, whether we need to show changed circumstances or

don't, but that --

THE COURT: That's sort of water under the bridge

because I've set the hearing and I'm considering it. So I

didn't just deny your motion out of hand.

The second issue is, now that we're here, what

standard should the Court employ and on what basis should the

Court decide to modify the conditions?

MR. BIENERT: Well, I think that's right and I think

that's where I see it a little differently than at least I

think I understood you to be saying, and that is once we're

here and we're arguing why the change that we are seeking, in

this case removal of the electronic monitoring and the ability

to travel not just within Maricopa but within certainly the

Northern District of California, we need justify why that meets

the standard and is the least restrictive accommodations

involved. 

And so in order to meet that proof, we have to cite

the reasons why he's not a flight risk, he's not a danger,

because otherwise we're, in essence, not able to say anything

and then Your Honor has no basis to even consider it. So to

the degree that you're saying what we're doing is we're arguing

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things that could have been argued earlier, that's right. They

weren't argued earlier. They were fully briefed. Not only did

the Government file its position --

THE COURT: So Mr. Bienert, what you're arguing for

are serial detention hearings. Same circumstances, let's just

present them over and over again and see what the Court will do

this time. Let's judge shop. Let's get a different judge.

Let's appeal to the district judge. Now, you didn't

intentionally do that but that's what happened, is you now have

a different judge looking at this issue. But, nonetheless, I

don't -- you want to go back and revisit all the issues of

flight and danger and the things that would be decided at a

detention hearing.

Well, I understood your agreement. The stipulation

would be that Mr. Larkin was acknowledging that he posed a

flight risk and that is why he was agreeing to conditions.

MR. BIENERT: I don't think that's what somebody does

at all when they stipulate to conditions. He was stipulating

that he would meet those conditions. I don't think that's an

assertion that somebody is saying, "I'm a flight risk."

THE COURT: So he was stipulating to waive his right

to have a detention hearing and present argument and evidence

and proffers, but he did not pose any risk of flight or danger

and he shouldn't be on any conditions. He should be released

on his own recognizance, so he stipulated to waive that, came

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to the Court and waived that detention hearing and didn't

present that issue.

MR. BIENERT: Based on those conditions, absolutely.

THE COURT: And the Court would not enter an order

placing somebody under conditions if they posed no risk of

flight or danger. So going into that process, the assumption

is there's an acknowledged risk of flight and danger and these

are the conditions that the parties have agreed upon are

sufficient to address those risks and the Court is willing to

accept them as well.

Because clearly at that point, if Judge Boyle had not

thought the conditions were sufficient and he could have added

a condition, he could have changed a condition, but you're

coming before the Court and Court has a two-level decision, the

first being, is there risk of flight or danger? If so, are

there any conditions that can address it? If you get to the

first point and you say there's no risk, you don't go to

conditions. Before you even reach conditions, there has to be

a risk of flight or danger. 

We don't put ankle bracelets on people who pose no

risk of flight or danger to the community. We don't send

people to random drug testing if they pose no risk of flight or

danger. This is not the circumstance where there is no risk

presented and there's no presumption from what has occurred to

the parties' stipulation that Mr. Larkin is at least a flight

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risk.

And this condition seems to be directed at flight

because clearly on electronic monitoring bracelet on your ankle

wouldn't prevent person from committing a violent act. I'm not

talking about Mr. Larkin. I'm just speaking in general terms

here. So electronic monitoring is not usually imposed for

danger unless it's the type of monitoring where you have

restrictive fields and places where a person couldn't go, you

make sure they don't go to, say, the alleged victim's residence

or workplace but that wasn't what was imposed here. What we

have is pretty classic GPS monitoring to deal with flight risk

and that's the risk that the Government has articulated.

So just to cut to the bottom line here, what has

happened is the parties stipulated to release conditions and to

resolve the motion that was pending before the Court and waived

a detention hearing, entered the conditions that address

everything that has been said to the Court today, everything

was known at that time, and then within weeks, not months,

weeks, Mr. Larkin is back before the Court asking the Court to

change that. Let's just redo it. Let's reopen. And as I said

before, the cynical view is that presents this issue to the

Court without the Government having made its presentation that

it would have made on flight and danger.

I don't know of a provision that is complete do-over.

I don't know of a statutory provision that says let's just

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wheel it back. We're going back to April 16. We withdraw the

stipulation in its entirety and let's start over and do a

detention hearing.

I think that's what you're asking me to do is just

decide that either he's not a flight risk and if you're not

saying that, that you're saying that this condition isn't

necessary to address any flight risk, you know, location

monitoring is not reasonable, it's not necessary in these

circumstances to address any risk of flight. But nothing has

changed since April 16 that would make the Court reach that

conclusion. If it were April 16 next year, if it were maybe

December 16 this year, there could be some changed

circumstances or some reason for the Court to think that maybe

that condition is no longer necessary.

So I am not going to modify the conditions. I am

denying the motion. I think it's reasonable for him to have a

travel restriction that allows him to travel with prior

permission. One week's notice is reasonable.

It sounds as if he doesn't have unexpected and

immediate needs to be in California. Court dates, that that's

all scheduled sometime in advance. There aren't a lot of

hearings, his appearance is waived and he can communicate with

his attorneys and his family in many ways if he needs to on

short notice, short of getting on an airplane or in a car and

going to California with one week's notice. So I don't see any

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reason to change those conditions at this point.

I am concerned, just for clarity, that the order says

location monitoring and the officer's discretion rather than

GPS active monitoring.

So what I am inclined to do is enter an order that

modifies the order only to that extent. Because what has been

presented to me by you, Mr. Bienert and by Mr. Rapp and

Mr. Lauby is that that was the agreement, that it would be GPS

active monitoring and so the order should say that.

Mr. Bienert, you wanted to present -- well, you

wanted to present an issue under seal; correct?

MR. BIENERT: Yes, Your Honor.

THE COURT: All right.

So what I propose we do is adjourn this portion of

the proceedings and then convene again under seal.

So we would need everyone to leave the courtroom

other than the defendant, his counsel, Government's attorneys

as the case agent.

MR. RAPP: The people on this side are with the

Government, with the office.

THE COURT: All right. So they can remain and of

course the Pretrial Services officer can remain.

(Recessed at 2:16; resumed at 2:16.)

THE COURT: We are not under seal at this point.

PRETRIAL OFFICER: Are we on the record, Your Honor? 

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CR-18-00422-PHX-SPL(BSB), July 20, 2018

THE COURT: We are. Okay. 

PRETRIAL OFFICER: Justin Lauby with Pretrial

Services. I don't know if this is something that

defense/defendant may want to consider but to file a motion

allowing for the conditions that Pretrial can transfer his

supervision to California. Because at this point, it seems he

wants to spend more time in California than Arizona. If he

wants to reside in California and come back to Arizona for

court matters, we can transfer his supervision to California,

although he's going to be expected to reside there because at

this point, he's wanting to go to California for two, three

weeks, come back to Arizona for a few days and back with which

with the standards that we have for contacts, which come from

the Administrative Office out of Washington D.C., we are not

able to meet those and it's going to become an issue. So if he

would rather live in California, defense could file a motion

asking for the travel conditions to be changed, that Pretrial

can transfer his supervision to the District -- Northern

District of California.

THE COURT: All right. So that is an option. We do

place people under courtesy supervision in other districts but

nobody has asked the Court to do that, so I'm not going to just

do that unless that were requested. And I don't think other

defense counsel or the Government has really had an opportunity

to fully think through that and how they would want to proceed,

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so that may not be something to try to deal with today but

certainly something to think about today. So thank you,

Mr. Lauby.

All right. So now we'll go off the record and then

we're going to seal the proceeding.

(Proceedings concluded at 2:17 p.m.)

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Case 2:18-cr-00422-DJH Document 237 Filed 07/24/18 Page 39 of 40
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United States District Court

CR-18-00422-PHX-SPL(BSB), July 20, 2018

C E R T I F I C A T E 

I, ELAINE M. CROPPER, court-approved transcriber, 

certify that the foregoing is a correct transcript, to the 

best of my skill and ability, from the official electronic 

sound recording of the proceedings in the above-entitled 

matter. 

DATED at Phoenix, Arizona, this 24th day of July,

2018.

s/Elaine M. Cropper 

________________________ 

 Elaine M. Cropper 

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