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GARY M. RESTAINO

United States Attorney

District of Arizona

KEVIN M. RAPP (Ariz. Bar No. 014249, kevin.rapp@usdoj.gov) MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov) PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov) ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov) Assistant U.S. Attorneys

40 N. Central Avenue, Suite 1800

Phoenix, Arizona 85004-4408

Telephone (602) 514-7500

DAN G. BOYLE (N.Y. Bar No. 5216825, daniel.boyle2@usdoj.gov) Special Assistant U.S. Attorney

312 N. Spring Street, Suite 1400

Los Angeles, CA 90012

Telephone (213) 894-2426

NICOLE M. ARGENTIERI

Acting Assistant Attorney General Criminal Division, U.S. Department of Justice

AUSTIN M. BERRY (Texas Bar No. 24062615, austin.berry2@usdoj.gov) U.S. Department of Justice

Child Exploitation and Obscenity Section

1301 New York Avenue, NW, 11th Floor

Washington, D.C. 20005

Telephone (202) 412-4136

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America,

Plaintiff, 

v. 

Michael Lacey, et al.,

Defendants.

CR-18-422-PHX-DJH

UNITED STATES’ REPLY 

TO DEFENDANTS’ RESPONSE (Doc. 1803)

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Per the Court’s instructions, the United States submits this Reply regarding cases 

and arguments cited in Defendants’ Response (Doc. 1803 pages 7-9) to the Government’s 

objections to certain exhibits the defense intends to introduce during the cross examination 

of Carl Ferrer (Doc. 1801). In Section IV of their brief, Defendants argue that “[e]vidence 

of non-privileged attorney opinions or letters and a defendant’s awareness of that evidence 

is admissible to demonstrate defendants’ good faith and negate alleged intent.” (Doc. 1803 

at 7.) Defendants cite several cases, but none provide the support asserted. The United 

States addresses each case seriatim below.

United States v. Thomas, 32 F.3d 418 (9th Cir. 1994)

Thomas is distinguishable because—unlike here—the district court provided no 

detailed justifications for excluding the evidence at issue. Thomas was convicted of mail 

fraud for using false prices when brokering sales between produce growers and retail 

stores. The district court allowed victim-growers named in the indictment to testify at trial, 

but precluded as irrelevant (simply because they were not named in the indictment) 

testimony from other growers who may have been less hostile to the defendant. United 

States v. Thomas, 32 F.3d 418, 420 (9th Cir. 1994). The Ninth Circuit recognized that “the 

jury was faced with a difficult issue of the defendant’s subjective intent,” yet “[t]here were 

no substantial countervailing justifications for limiting the relevant evidence that the jury 

could consider by excluding testimony of other growers. See Fed. R. Evid. 403 (‘evidence 

may be excluded if its probative value is substantially outweighed by the danger of unfair 

prejudice, confusion of the issues, or misleading the jury, or by considerations of undue 

delay, waste of time, or needless presentation of cumulative evidence’).” Thomas, 32 F.3d 

at 421. Because “[t]he district court found no such justification,” the Ninth Circuit reversed. 

Id. Here, the Court has already made detailed, thoughtful rulings—in Doc. 1643 and other 

orders—concerning various categories of evidence that Defendants now seek to admit 

during their cross-examination of Mr. Ferrer. (See, e.g., Doc. 1801 at 2-5.) Thomas is 

unavailing.

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United States v. Smith-Baltiher, 424 F.3d 913 (9th Cir. 2005)

This case is irrelevant—it turned on the district court’s ruling that collateral estoppel 

could be used offensively against a criminal defendant in an illegal reentry prosecution. 

(Doc. 1803 at 7.) On appeal, the government conceded, and the Ninth Circuit held, that 

offensive collateral estoppel was improperly applied and “does not provide a basis for 

precluding Smith from contesting his alienage . . . or from asserting that he did not possess 

the mens rea necessary to support a conviction.” United States v. Smith-Baltiher, 424 F.3d 

913, 920 (9th Cir. 2005). The United States has made no similar argument—and the Court 

has applied no similar doctrine—here. 

Cheek v. United States, 498 U.S. 192 (1991)

Defendants next cite Cheek v. United States, 498 U.S. 192, 203 (1991), arguing that 

the Supreme Court “blessed the admission” of certain evidence presented at trial, including 

evidence that the defendant attended seminars where attorneys gave their opinions on the 

tax code. (Doc. 1803 at 8.) That is incorrect. Cheek nowhere “blessed the admission” of 

such evidence at trial, but instead held that it was error for the district court to have given 

certain supplementary instructions to the jury in response to questions from the jury during 

deliberations. Specifically, the Supreme Court found that it was “error to instruct the jury 

to disregard evidence of Cheek’s understanding that, within the meaning of the tax laws, 

he was not a person required to file a return or to pay income taxes and that wages are not 

taxable income, as incredible as such misunderstandings of and beliefs about the law might 

be.” Cheek, 498 U.S. at 203. 

Thus, Cheek cannot be relied upon as authority for the proposition that Defendants 

are entitled to cross-examine Mr. Ferrer about attorney advice or opinions that he or any 

Defendants might have received. Instead, Cheek was merely a case about a trial court going 

too far in its supplemental jury instructions; it had nothing to do with the admissibility of 

the underlying evidence. Conspicuously absent from Defendants’ reliance on Cheek, 

however, is the Supreme Court’s additional holding: “a defendant’s views about the 

validity of the tax statutes are irrelevant to the issue of willfulness and need not be heard 

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by the jury, and, if they are, an instruction to disregard them would be proper.”1 Id. at 206. 

U.S. v. Munoz, 233 F.3d 1117 (9th Cir. 2000)

Defendants claim that in United States v. Munoz, 233 F.3d 1117 (9th Cir. 2000) “the 

Ninth Circuit expressly ruled that the evidence at issue—attorney opinion letters drafted 

by attorneys with whom the defendant never consulted and based on inaccurate facts—

were admissible” to support a good faith defense. (Doc. 1803 at 8.) But the Ninth Circuit 

did not “expressly rule” on the opinion letters’ admissibility—that issue was not litigated 

or decided on appeal. The Munoz defendants ran a Ponzi scheme; in perpetuating their 

fraud, they attracted investors with opinion letters, prepared by attorneys, stating that the 

contracts they marketed were not “securities.” Munoz, 233 F.3d at 1123. The parties did 

not dispute the letters’ admissibility; indeed, an attorney who prepared one of the letters 

“was a key witness for the government.” Id. at 1127-28. The court affirmed the defendants’ 

convictions and remanded for resentencing on a separate issue. Id. at 1122. Munoz does 

not support Defendants.2

United States v. Frame, 236 F. App’x 15 (5th Cir. 2007)

Frame similarly lends no support to Defendants. (Doc. 1803 at 8.) In that nonprecedential, out-of-Circuit case, the court rejected the defendant’s argument that the 

district court abused its discretion by not granting his requested jury instructions on good 

faith and advice-of-counsel. While it appears that the district court allowed the defendant’s 

attorneys to argue both theories to the jury, the only issue on appeal was the defendant’s 

request for specific jury instructions, which the Fifth Circuit found were properly denied.

And, as the Fifth Circuit observed, the defendant’s “counsel conceded, at the jury charge 

1 “It was therefore not error in this case for the District Judge to instruct the jury not to consider Cheek’s claims that the tax laws were unconstitutional. However, it was error 

for the court to instruct the jury that petitioner’s asserted beliefs that wages are not income and that he was not a taxpayer within the meaning of the Internal Revenue Code should 

not be considered by the jury in determining whether Cheek had acted willfully.” Cheek v. 

United States, 498 U.S. 192, 206–07 (1991).

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conference, that no evidence had been advanced showing that Frame had discussed this 

matter with his lawyers; counsel claimed only that ‘it appears clear that he did rely’ on 

lawyers who reviewed documents for him.” United States v. Frame, 236 F. App’x 15, 18

(5th Cir. 2007). 

Thus, Frame is not instructive here, except to the extent it reinforces the United 

States’ position that Defendants are not entitled to an advice of counsel jury instruction. In 

any event, it would be improper to rely on Frame as even persuasive authority for the 

argument that Defendants should be allowed to cross-examine Mr. Ferrer about attorney 

opinions or letters, regardless of whether those opinions or letters are non-privileged. 

Again, Frame merely affirmed the trial court’s decision to not grant a jury instruction on 

advice of counsel and good faith; nothing more or less.

United States v. Way, 2018 WL 3062159 (E.D. Cal. June 19, 2018)

Defendants’ reliance on this case—where the defendant complied with the 

requirements for asserting an advice-of-counsel defense—is also misplaced. (Doc. 1803 

at 8.) Way was charged with violating the Analogue Act for his involvement in a business, 

ZenBio, that sold products containing the substance XLR11. Way sought to introduce into 

evidence that he directed an employee to file away letters written by an attorney that had 

analyzed and concluded that XLR11 was legal under federal law. United States v. Way, 

2018 WL 3062159, at *8 (E.D. Cal. June 19, 2018). The court in Way found that evidence 

regarding the letter and Way’s awareness of its contents were admissible on the question 

of whether Way acted with a culpable state of mind. Id..

Here, the “non-privileged attorney opinions or letters” are not evidence of 

Defendants’ state of mind as to violating the Travel Act because the attorney opinions and 

letters do not address federal criminal prosecutions or 18 U.S.C. § 1952. Because the 

attorney opinions that Defendants seek to admit do not address the Travel Act, they are not 

relevant, and introducing them would be misleading and confusing to the jury. Way does 

not apply to the facts here, and the attorney opinions and letters should be precluded. 

Additionally, in Way, the parties litigated the advice of counsel issue pretrial, and 

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“[t]he court previously directed defendant to provide a pre-trial offer of proof as to the 

elements of advice of counsel defense. In response, defendant provided the court with 

several documents ex parte, although the court understands that those documents have now 

been made available to the government.” Way, 2018 WL 3062159, at *7. In other words, 

the defendant in Way actually complied with the law regarding advice of counsel by 

waiving privilege and providing relevant documents to the United States. 

Here, despite repeated opportunities, Defendants have done no such thing. Instead, 

Defendants want to have their cake and eat it too. That is, they want to admit into evidence 

attorney opinions that Backpage.com was not violating the law so that they can argue good 

faith reliance on that advice of counsel to the jury, but they do not want to reveal what they 

told their attorneys, which is a prerequisite to the defense. Accordingly, Defendants are not 

entitled to the same latitude that the defendant in Way was given regarding any attorney 

letters. 

United States v. Brandner, 2016 WL 354866 (D. Alaska Jan. 28, 2016)

The Alaska district court’s decision also does not support Defendants. (Doc. 1803 

at 8-9.) The Brandner court—in denying defendant’s motion to set aside the guilty 

verdict—found that defendant wasn’t entitled to an advice-of-counsel instruction. United 

States v. Brandner, 2016 WL 354866, at *2 (D. Alaska Jan. 28, 2016). The defendant had

asked for the instruction based on his argument that he relied on the advice of a government 

witness. The court refused because the evidence was “essentially uncontroverted” that the 

government witness “was not a licensed attorney; that he did not hold himself out to Dr. 

Brandner to be an attorney; and that he was not serving in the role of Dr. Brandner’s legal 

advisor regarding the wire transactions.” Id. Further, the defendant argued that the court 

should have given the advice-of-counsel instruction because he relied in good faith on the 

advice of an accountant. Id. at *3. But the court found that “a prerequisite to that defense 

is that the defendant disclose all pertinent facts to the accountant” and there was no 

evidence that “Dr. Brandner disclosed any pertinent facts . . . to his accountant.” Id. at 

*3. Brandner doesn’t advance Defendants’ argument because, as in that case, Defendants 

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have failed to waive the privilege and disclose what if, anything, they told any attorney 

who provided legal advice.

United States v. Napoli, 2011 WL 1302317 (N.D. Cal. April 5, 2011)

Defendants’ argument that United States v. Napoli “demonstrates that attorney 

opinions and letters are admissible” is also misplaced. Napoli involved a motion for 

reconsideration of the district court’s order disqualifying defendant’s attorney [Green]. In 

affirming its disqualification order, the court found: “there is a significant risk that Mr. 

Green will (1) act as an unsworn witness at trial, (2) act as both witness and advocate in 

connection with an advice of counsel defense, and (3) be operating with an actual 

unwaivable conflict.” United States v. Napoli, 2011 WL 1302317, at *3 (N.D. Cal. April 

5, 2011). . The “unwaivable conflict” was that Green was a government target who could 

be indicted for the same scheme as Napoli. Id. at *6.

These facts are wholly divorced from Defendants’ argument. Napoli had apparently 

“made a complete disclosure” to Green, which is a fact that Defendants haven’t proffered 

here. Doc. 1643 at 12. Green was also likely to testify. Id. at *4. So, any evidence about 

the purported advice from an attorney would be placed into evidence by the attorney who 

offered that advice. Here, Defendants want to examine Carl Ferrer about “attorney opinions 

and letters” without first demonstrating the following necessary factors outlined by the 

Court: “[that] (1) they made a complete disclosure to counsel; (2) they requested counsel’s 

advice as to the legality of the contemplated action; (3) they received advice that it was 

legal; and (4) they relied in good faith on the advice.” Doc. 1643 at 12. Napoli is 

inapposite.

United States v. Miell, 2008 WL 5101313 (N.D. Iowa Nov. 25, 2008)

Defendants’ citation to United States v. Miell also fails to provide any support for 

their argument. 2008 WL 5101313, at *4 (N.D. Iowa Nov. 25, 2008); (Doc. 1803 at 9). In 

Miell, the defendant wanted to present evidence wholly unrelated to an attorney’s advice. 

In fact, Miell involved insurance fraud charges and the defendant sought to introduce 

evidence that he had reached an agreement with the insurance company that would negate 

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his culpability. Id. at *4. The district court thought the evidence was “laughable” based on 

the government’s contention that it would present evidence that was directly to the 

contrary. Id. This out-of-Circuit district court case provides no support for Defendants’ 

argument.

* * *

In sum, Defendants’ cases are distinguishable and thus unpersuasive. As the United 

States anticipated through its motion in limine and additional arguments before this Court, 

Defendants clearly intend to make reliance on attorneys a key feature of their defense. The 

United States is fully willing to meet that defense head-on if Defendants advance such a 

defense fairly, i.e., by complying with this Court’s Order on the issue and Ninth Circuit 

precedent. (See Doc. 1643 at 11-12.) But rather than engage in a fair fight on this issue, 

Defendants are attempting an end-run around this Court’s clear rulings. 

Indeed, on September 12, 2023, during a hearing outside the presence of the jury, 

Defendant Lacey’s attorney revealed that Defendants plan to introduce evidence, possibly 

in the form of testimony elicited from Mr. Ferrer, that Mr. Ferrer hired “professionals” who 

gave advice. The relevant portion of that hearing is excerpted below:

Court: The law in the circuit is you do not get to raise the advice of counsel 

unless you show a specific waiver as to a particular issue and what that advice 

was particularly sought. No one on the defense side has done that. There has 

been no waiver of the privilege that I know. If you're willing to do that at this 

late date, that's fine, but at this juncture, that has not been done, and under 

the circuit precedent I'm not going to permit it.

Mr. Cambria: This isn't a situation of somebody getting specific advice from 

one of these lawyers that Carl Ferrer hired. This is simply people observing 

the fact that this is being run professionally, and that is a fact that is relevant. 

It goes to good faith. That isn't a situation of a specific lawyer Carl hired gave 

advice to X. That isn't that at all. He is running a professional operation with 

individuals who supposedly know how to do so, and that's a relevant fact. 

That's what I'm saying.

Court: There has not been any other information related to advice of counsel 

that I have seen in which any defendant has sought a specific clarifying 

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question to a lawyer, and it's -- and if you haven't provided notice at this 

point, I'm not going to allow it.

Cambria: Two different things. One, I am not talking about advice of counsel. 

I am talking about establishment of the facts, and that there was a 

professional, appeared to be, organization created by Mr. Ferrer; that these 

individuals should be able to rely on just like they say a bad look can be 

demonstrated by certain things that they want to put in; a good look can also 

be demonstrated. That's different. That's not advice of counsel. That is 

presence of a professional organization, and they are the ones who are saying: 

Do this, do that.

Court: I don't understand the terminology that you're using, “professional 

organization.”

Cambria: All I'm saying is I should be able to say to Mr. Ferrer: “Okay. You 

hired X, and X gave you advice on the website. What was the advice? And it 

is: Don't put this in, don't put that in, you can take that out, take that out, 

whatever it was.” That to me is a fact that’s relevant to the good faith intent 

knowledge on the part of our clients. . . First of all, I’m not relying on advice 

of counsel. What I’m doing is saying that this was a professional organization 

and there are certain assumptions that people can reasonably make when 

there is a professional organization.

Court: Before you do that, you’re going to have to get an express waiver of 

the privilege from the particular counsel...And the particular counsel whose 

name that was, and the particular advice sought, and the particular

information given by that counsel, Mr. Cambria. That's how advice of 

counsel works...You don’t get it both ways. My order stands.

Now, in their response brief, Defendants are again trying to get it both ways by

insisting that they be allowed to introduce advice of counsel in yet another form, this time 

by making the distinction without a difference that “non-privileged” advice of counsel is 

somehow exempt from the same rules as “privileged” advice of counsel. Yet no case cited 

by Defendants says even remotely such. Whether Defendants call it “professional” advice 

or “non-privileged” advice, they should not be allowed to insinuate to the jury that they 

engaged in good faith reliance on advice of counsel by questioning Mr. Ferrer about advice

or opinions he received from people who are lawyers by qualification. Instead, Defendants 

should comply with this Court’s clear and unequivocal rulings that are consistent with 

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Ninth Circuit law on the matter. 

Moreover, Defendants should not be allowed to raise the specter of reliance on 

advice of counsel without testifying themselves to establish the foundation necessary for 

the invocation of that defense. In other words, Defendants are seeking to establish that they 

each relied on advice of counsel without affirmatively stating such. In fact, Defendants 

argue in their brief that “the non-privileged documents drafted by attorneys that were 

known to the Defendants are admissible.” (Doc. 1803 at 9.) (emphasis added) Even if that 

were true in the abstract, the foundation for their knowledge of such attorney work product 

must come from Defendants, or possibly the attorneys who provided such advice after 

receiving a complete disclosure of the facts from Defendants. The required foundation 

cannot come from the mere existence of such work product as introduced through Mr. 

Ferrer. 

Indeed, each Defendant must show that he or she made a full disclosure to his or 

her attorney, not that Mr. Ferrer made some disclosure to some attorney that was employed 

or hired by the company of Backpage or Village Voice Media. See United States v. Bush, 

626 F.3d 527, 539 (9th Cir. 2010) (“An advice-of-counsel instruction requires the 

defendant show that he made a full disclosure of all material facts to his attorney and that 

he then relied “in good faith on the specific course of conduct recommended by the 

attorney.”) (emphasis added) (quoting United States v. Ibarra–Alcarez, 830 F.2d 968, 973 

(9th Cir. 1987); see also Way, 2018 WL 3062159, at *8 (quoting same) (cited by 

Defendants in Doc. 1803 at 8). In other words, just as this Court has required the United 

States to tether evidence to a specific defendant, so too should this Court require that each 

defendant establish their own full disclosure to the attorney that defendant seeks to rely 

upon. Moreover, showing that some attorney work product was merely known to 

Defendants is not the same as demonstrating each Defendants’ full disclosure to that 

attorney, much less each Defendants’ good faith reliance—and evidence of their reliance 

cannot come through Mr. Ferrer.

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Conclusion

For these reasons, and for the reasons set forth in the prior rulings of this Court 

(including Doc. 1643), the United States’ objections in Doc. 1801 should be sustained.

Respectfully submitted this 23rd day of September, 2023.

GARY M. RESTAINO

United States Attorney

District of Arizona

NICOLE M. ARGENTIERI

Acting Assistant Attorney General Criminal Division, U.S. Department of Justice

s/Austin M. Berry AUSTIN M. BERRY

Trial Attorney

KEVIN M. RAPP

MARGARET PERLMETER

PETER KOZINETS

ANDREW STONE

DANIEL BOYLE

Assistant U.S. Attorneys

CERTIFICATE OF SERVICE

I hereby certify that on September 23, 2023, I electronically transmitted the attached 

document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a 

Notice of Electronic Filing to the CM/ECF registrants who have entered their appearance 

as counsel of record.

s/ Austin M. Berry

Austin M. Berry

Trial Attorney

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