UNITED STATES DISTRICT COURT

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

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

Plaintiff, )

)

vs. ) Phoenix, Arizona

) November 6, 2023

Michael Lacey, et al. ) 1:02 p.m.

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE DIANE J. HUMETEWA, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

IN-COURT HEARING

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

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 1 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

UNITED STATES DISTRICT COURT

2

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. - Appeared by Zoom

Mr. Peter S. Kozinets, Esq.

Mr. Andrew C. Stone, Esq.

Mr. Daniel Boyle, Esq. - Appeared by Zoom

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 Defendant Michael Lacey:

LIPSITZ GREEN SCIME CAMBRIA, L.L.P.

By: Mr. Paul J. Cambria, Jr., Esq. - Appeared by Zoom

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. - Appeared by Zoom

2930 East Camelback Road, Suite 160

Phoenix, AZ 85016

bf@federlawpa.com

- and -

KESSLER LAW OFFICE

By: Mr. Eric Walter Kessler, Esq. - Appeared by Zoom

6720 N. Scottsdale Road, Suite 210

Scottsdale, AZ 85253

eric.kesslerlaw@gmail.com

For the Defendant John Brunst:

BIRD MARELLA BOXER WOLPERT NESSIM DROOKS

LINCENBERG & RHOW, P.C.

By: Mr. Gopi K. Panchapakesan, Esq. - Appeared by Zoom

and Gary S. Lincenberg, Esq. - Appeared by Zoom

1875 Century Park E, Suite 2300

Los Angeles, CA 90067

gpanchapakesan@birdmarella.com

glincenberg@birdmarella.com

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 2 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

UNITED STATES DISTRICT COURT

3

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. - Appeared by Zoom

P.O. Box 2734

Scottsdale, AZ 85252

joy@joybertrandlaw.com

Appeared telephonically:

Michael Lacey

John Brunst

Scott Spear

Andrew Padilla

Joye Vaught

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 3 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:02:34

13:02:54

13:03:02

13:03:20

13:03:41

UNITED STATES DISTRICT COURT

4

P R O C E E D I N G S

(Proceedings commence at 1:02 p.m.)

COURTROOM DEPUTY: This is Case No. 18-422, United

States of America vs. Lacey and others, on for in-court

hearing.

MR. STONE: Good afternoon, Your Honor, Andy Stone and

Peter Kozinets here in court. AUSA Dan Boyle on Zoom. I think

AUSA Kevin Rapp is also Zoom or attempting to get on Zoom.

THE COURT: All right. Good afternoon.

MR. CAMBRIA: Good afternoon, Your Honor,

Paul Cambria, and Mr. Lacey is on the phone.

MR. EISENBERG: Good afternoon, Your Honor,

David Eisenberg on behalf of Andrew Padilla, and he is on the

phone.

THE COURT: Good afternoon. I see Ms. Bertrand

appears to be in a nice outdoor area.

MS. BERTRAND: Hi, Your Honor. Good afternoon. I am

still positive for COVID, so yes, I'm doing this from my

backyard. Ms. Vaught appears by phone.

THE COURT: Thank you, and good afternoon.

MR. PANCHAPAKESAN: Gopi Panchapakesan on behalf of

Mr. Brunst, who is present on the phone.

THE COURT: And good afternoon to you.

MR. KESSLER: Eric Kessler. Eric Kessler for

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 4 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:04:00

13:04:16

13:04:47

13:05:07

13:05:35

UNITED STATES DISTRICT COURT

5

Mr. Spear. I don't know if he's yet joined us by phone.

THE COURT: It appears he has.

All right. Anyone else?

MR. FEDER: Bruce Feder also here.

THE COURT: Was that Mr. Feder?

MR. FEDER: Yes.

THE COURT: All right. The primary purpose for

convening this is I wanted to double-check as to Ms. Bertrand's

status, and it does appear that she is still positive for

COVID, and I'm certain in isolation, and so what I wanted to do

then, Ms. Bertrand, for the benefit of you and your client is

to get assurances that you can appear tomorrow by video. And

I'm assuming that your client, Ms. Vaught, is not positive for

COVID; is that right?

MS. BERTRAND: That's my understanding. She's been

tested and just consistently not tested positive. My paralegal

has, Yadira, who you saw throughout the trial, but Ms. Vaught

is not.

THE COURT: All right. So what I would do then is

have her appear in person. You can appear remotely. And the

items that I wish to go through with the jury tomorrow will

only take a few minutes. I want to remind them of the jury

instruction about how they are to proceed with their

deliberations, the instruction related to selecting a

foreperson, to not contacting the Court except for in writing,

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 5 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:06:03

13:06:22

13:06:55

13:07:21

13:07:49

UNITED STATES DISTRICT COURT

6

telling them how to do that.

And what I also intend to do is also give them

alternative lengths of days to deliberate. Of course, Friday

is a federal holiday. The building will be closed. And so I'm

going to suggest to them if they could at least begin their

deliberations at 8:45, and at the latest 9:00 a.m., and if they

go to 4:30 or 5:00 o'clock each day. I'll suggest that to

them.

The other thing that I think is necessary is I want to

inform them that by Court order I will extend their service

date up through the 17th. Now, recall that this is a combined

jury. The original pool that was to have begun on the 8th of

August, and then a later pool that was drawn in, and so some of

them were only screened until their availability to the 9th. I

will inform them that the reason for this is that week that we

lost in the very beginning of trial due to COVID, as well as

the most recent days that we had to take off due to COVID.

I think at that point any juror who has a conflict, a

bona fide conflict, either prepaid travel or some work

commitment, then will have an ability to let us know if that

indeed is going to interfere. Of course, I will not at this

juncture indicate that they will be, if needed, retained for

the forfeiture proceeding, and I suspect at that point we will

know whether or not someone has a conflict. And if that is the

case, then those individuals will be selected as the

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 6 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:08:32

13:09:52

13:10:14

13:10:36

13:10:50

UNITED STATES DISTRICT COURT

7

alternates.

That's how I intend to proceed, and are there any

objections or concerns from the government, Mr. Stone?

MR. STONE: Your Honor, no objection. The only

thought, again, is --

THE COURT: What I would suggest, if someone has --

COURTROOM DEPUTY: Are one of you dialed in?

THE COURT: Can I ask those that are on the phone to

mute themselves? We're getting feedback. Let's test it.

Test. Okay. Can you still hear us?

MR. STONE: Your Honor, no objection. The only thing

we would note is that we still -- if there's nobody that does

have a conflict for that second week in terms of the jurors, we

would still urge that Juror No. 7, who watched the final two

summations via Zoom, be one of the alternates just in an

abundance of caution on that issue, but certainly if there are

other jurors who have a bona fide conflict, as Your Honor has

laid out, they would take precedent, take precedence to be

removed or to serve as alternates. But other than that, Your

Honor, the United States doesn't have any other issues.

THE COURT: Are there any issues or concerns by any

defense counsel? I will go first, Mr. Cambria?

MR. CAMBRIA: No, Your Honor.

THE COURT: Mr. Eisenberg.

MR. PANCHAPAKESAN: Your Honor, I don't think we can

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 7 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:11:04

13:11:21

13:11:42

13:12:05

13:12:17

UNITED STATES DISTRICT COURT

8

hear you on the Zoom. Is it just me or --

MR. FEDER: I could not hear.

MS. BERTRAND: I could not hear.

MR. BOYLE: Neither could I.

THE COURT: Could you hear me now?

MR. PANCHAPAKESAN: Yes.

THE COURT: The government offers -- I don't know if

you heard, Mr. Stone, they offered no objection to that

process, but they indicated that they would prefer that Juror

No. 7 be selected as an alternate should none of the others

have a conflict with extending through the 17th.

All right. So Mr. Cambria had no objection to that

process. Mr. Eisenberg.

MR. EISENBERG: Your Honor, I don't have an objection

to the process, but I do believe the Court previously indicated

that Juror No. 7 would not be considered an alternate, I think,

depending upon how she felt as the case went on.

And that leads me to a question of Your Honor. Has

the Court heard whether any of the other jurors are ill?

THE COURT: We have not received any word.

MR. KOZINETS: Your Honor, I just saw a note that you

may be muted at this point.

THE COURT: Am I muted? Can you hear me,

Mr. Panchapakesan?

MR. PANCHAPAKESAN: We can hear you, Your Honor.

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 8 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:12:37

13:13:05

13:13:25

13:13:47

13:14:04

UNITED STATES DISTRICT COURT

9

MR. BOYLE: We can hear you.

MR. EISENBERG: Those were my two concerns.

THE COURT: With regard to Juror No. 7, the government

had asked that she be released rather than view the closing,

the two summation arguments by video, and released as an

alternate, and so at that juncture I denied that request.

But I think this is a little bit of a different kind

of request, as I understand it, but I certainly am going to be

making the first decision with regard to alternates as to those

individuals who may not be able to extend their service through

the 17th. That's going to be the priority.

All right. Mr. Panchapakesan, any objection?

MR. PANCHAPAKESAN: Your Honor, I just had one

question. I think the Court indicated about informing the jury

of the possibility of a forfeiture phase. I just wanted to get

a sense as to when you intended to do that?

THE COURT: Upon the return of a verdict, and that

may -- I'll cross that bridge when I get there.

MR. PANCHAPAKESAN: And then in terms of the

alternate, I don't know if Mr. Lincenberg wants to chime in,

but I don't think we have an objection.

THE COURT: All right. Ms. Bertrand.

MS. BERTRAND: I have nothing to add from what my

colleague just said.

THE COURT: And I would just ask, Ms. Bertrand, if you

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 9 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:14:22

13:14:31

13:15:01

13:15:21

13:15:48

UNITED STATES DISTRICT COURT

10

could chime in tomorrow a bit early so we can make sure that we

have your connection all ready to go.

MS. BERTRAND: Yes. Thank you. I will. Appear by

Zoom?

THE COURT: Yes. Yes.

MS. BERTRAND: Thank you.

THE COURT: Mr. Kessler.

MR. KESSLER: No objection, Judge.

THE COURT: All right.

Did I miss anyone?

All right. So the last thing I wanted to get clear

for my purposes, last week Mr. Boyle, I think, or Mr. Stone, I

can't remember who, you indicated that your two forfeiture

witnesses would be Mr. Ferrer and Mr. Quoc Thai; is that

correct?

MR. STONE: Yes, Your Honor.

THE COURT: Who are the anticipated defense witnesses?

MR. PANCHAPAKESAN: Your Honor, we're still conferring

amongst the group, but we may have one witness. We can inform

the Court of that by tomorrow, I think, if that's acceptable.

THE COURT: Yes, tomorrow morning you'll have those,

whomever it is that you anticipate calling as a witness. I did

receive your filings this morning. I will go through those.

And finally, I wanted to just clarify, with regard to

the listed property, is it the government's intention to call

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 10 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:16:07

13:16:38

13:16:54

13:17:03

13:17:28

UNITED STATES DISTRICT COURT

11

Mr. Quoc Thai for that purpose?

MR. STONE: Let me defer to AUSA Boyle on that

question.

MR. BOYLE: Yes, Your Honor, that is correct.

THE COURT: All right. And as I mentioned, I will not

inform the jury of future service in the event that we don't

need to, but I will certainly reserve that obligation upon

their return, and so that's how we will proceed. I think that

we -- I am hopeful that we should not get any jurors who have

to leave service, but certainly, in any event, not until the

end of the week, and we will, like I said, cross that bridge

when we get there.

All right. Is there anything more to be taken up from

the government's perspective?

MR. STONE: No, Your Honor. Thank you.

THE COURT: Anything from you, Mr. Cambria?

MR. CAMBRIA: No, Your Honor.

THE COURT: Mr. Eisenberg?

MR. EISENBERG: Yes, Your Honor. During the hearing

on Thursday the Court indicated that you had not heard from

myself and Ms. Bertrand concerning a couple of issues, and I

did want to note that I concur in my fellow defense counsel's

argument with respect to the summation, the concern about

shifting the burden to the defense. I'm not going to continue

to argue that.

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 11 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:17:44

13:18:06

13:18:23

13:18:45

13:19:05

UNITED STATES DISTRICT COURT

12

The other issue, though, is the 51 ads, and I do want

to be heard briefly on that, Your Honor. This has to do with

whether the specific -- the extent to which specific intent

applies here.

THE COURT: Well, I guess the problem I have,

Mr. Eisenberg, is I didn't -- I don't think the government

anticipated that you were going to argue with regard to the 51

ads. Are you -- is this a supplement to your Motion for

Directed Verdict, or what is this -- what is the form of your

argument?

MR. EISENBERG: It's a form of oral argument, Your

Honor, and it is in support of the dismissal of those counts.

And I know it was argued briefly to the -- I believe it was

argued briefly to the Court the other day and Your Honor

indicated that you hadn't heard, Your Honor hadn't heard from

myself and Ms. Bertrand on either one of those two issues, so I

would like to be heard.

THE COURT: I guess I'm confused, Mr. Eisenberg. I

thought the issue that I didn't hear from you on was related to

a forfeiture issue.

MR. EISENBERG: Respectfully, Your Honor, no, that's

not how I read the minutes, and I indicated to your chambers

that we're not part of the forfeiture. Mr. Padilla, that one

property has been taken away. This has to do with something

else, and so that's what I was prepared to argue today.

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 12 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:19:21

13:19:46

13:20:04

13:20:24

13:20:49

UNITED STATES DISTRICT COURT

13

THE COURT: All right. I will give you a few minutes.

I have another calendar coming up.

MR. EISENBERG: All right, Your Honor. Briefly, what

it is is that with respect to these ads, the jury instruction

on them is helpful because to me it indicates that there has to

be knowledge by a defendant with respect to the publication of

the ad. And the jury instruction reads, "In order for the

defendants to be found guilty of Counts 2 through 51, the

government must prove for each count the following elements:

First, the defendant used any facility in interstate

commerce with the intent, specific intent to promote or

facilitate any business enterprise, et cetera.

Second, after doing so, the defendant performed an

act." And I will repeat that, "the defendant performed an act

that did promote or facilitate the promotion of any business

enterprise specifically by publishing on Backpage the ads

listed in Counts 2 through 51." And to my knowledge, there

hasn't been any evidence of that.

Finally, Your Honor, the Court gave a Pinkerton

instruction, that's on page 27 of the jury instructions, and

this has to do with finding a defendant guilty of the Travel

Act crime as charged in Counts 2 through 51. If the government

has proved each of the following elements, first, a member of

the conspiracy committed a Travel Act offense; and second, that

person was a member of the conspiracy charged in Count 1 of the

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 13 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:21:09

13:21:27

13:21:46

13:22:01

13:22:28

UNITED STATES DISTRICT COURT

14

indictment; and third, that the person committed the Travel Act

offense in furtherance of the conspiracy.

These elements, Your Honor, indicated to me that you

have to be a member of the conspiracy as charged. There are

five of us are charged, five remaining defendants have been

charged. Now, the government would extend that to other

conspirators, I suppose, but who has been named as another

conspirator who is involved in publishing of the ads? I do not

know, Your Honor. Certainly not any other moderator. And to

my knowledge, no one else who might be considered a conspirator

was involved in publishing any of the ads, so that's my

supplement, Your Honor. Thank you.

THE COURT: All right. Thank you, Mr. Eisenberg. All

right. Anyone else, Ms. Bertrand?

MS. BERTRAND: Your Honor, I join in my colleagues'

argument, and I joined in the argument that was made last week

that Mr. Eisenberg and I were not present for.

THE COURT: All right.

MR. CAMBRIA: I, if I might, Your Honor, also comment

on that. I join in what they've said. The thing that bothers

me was the way I read prior decision by Judge Brnovich, the

prosecution had to prove knowledge of the 50 ads, and in the

rebuttal part of summation the position was taken by the

government that they did not have to so prove, and I think that

that is an error that needs to be corrected.

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 14 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13:22:48

13:23:13

13:23:46

UNITED STATES DISTRICT COURT

15

THE COURT: All right. All right. We will reconvene

tomorrow promptly at 9:00. We will have the jury in, I will

read them the final instruction, and then leave them to their

deliberations.

And if we need to, I'll take up any of the forfeiture

matters. In particular, I just had a moment to glance at what

Mr. Panchapakesan submitted, and it's my understanding that

it's the defense's position that the government is required to

prove, or at least the jury is going to be asked in his

perspective to come up with some fraction or percentage of

alleged forfeiture amounts, and that's what I would like to

focus on if we can do that tomorrow.

And so if there's nothing further, then we will

reconvene tomorrow at 9:00 a.m. All right. We are adjourned.

(Proceedings concluded at 1:23 p.m.)

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 15 of 16
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

UNITED STATES DISTRICT COURT

16

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 7th day of November,

2023.

s/Hilda E. Lopez_______

HILDA E. LOPEZ, RMR, FCRR

Case 2:18-cr-00422-DJH Document 1963 Filed 11/07/23 Page 16 of 16