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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

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

Plaintiff, )

)

vs. ) Phoenix, Arizona

) November 7, 2023

Michael Lacey, et al. ) 9:11 a.m.

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE DIANE J. HUMETEWA, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

TRIAL - DAY 29 - A.M. SESSION

Official Court Reporter:

Hilda Elizabeth Lopez, RMR, FCRR

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

401 West Washington Street, Spc 30

Phoenix, Arizona 85003-2151

(602) 322-7256

Proceedings Reported by Stenographic Court Reporter

Transcript Prepared by Computer-Aided Transcription

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A P P E A R A N C E S

For the Government:

UNITED STATES ATTORNEY'S OFFICE

By: Mr. Kevin M. Rapp, Esq.

Mr. Peter S. Kozinets, Esq.

Mr. Andrew C. Stone, Esq.

Ms. Margaret Wu Perlmeter, Esq.

Mr. Daniel G. Boyle, Esq. - Appears 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 Government:

UNITED STATES DEPARTMENT OF JUSTICE

By: Mr. Austin Berry, Esq.

1301 New York Avenue, NW, 11th Floor

Washington, DC 20005

austin.berry2@usdoj.gov

For the Defendant Michael Lacey:

LIPSITZ GREEN SCIME CAMBRIA, L.L.P.

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

42 Delaware Avenue, Suite 120

Buffalo, NY 14202

pcambria@lglaw.com

For the Defendant Scott Spear:

FEDER LAW OFFICE, P.A.

By: Mr. Bruce S. Feder, Esq.

2930 East Camelback Road, Suite 160

Phoenix, AZ 85016

bf@federlawpa.com

- and -

KESSLER LAW OFFICE

By: Mr. Eric Walter Kessler, Esq.

6720 N. Scottsdale Road, Suite 210

Scottsdale, AZ 85253

eric.kesslerlaw@gmail.com

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For the Defendant John Brunst:

BIRD MARELLA BOXER WOLPERT NESSIM DROOKS

LINCENBERG & RHOW, P.C.

By: Mr. Gopi K. Panchapakesan, Esq.

Mr. Gary S. Lincenberg, Esq. - Appears by telephone

1875 Century Park E, Suite 2300

Los Angeles, CA 90067

gpanchapakesan@birdmarella.com

glincenberg@birdmarella.com

For the Defendant Andrew Padilla:

DAVID EISENBERG, P.L.C.

By: Mr. David S. Eisenberg, Esq.

3550 North Central Avenue, Suite 1155

Phoenix, AZ 85012

david@deisenbergplc.com

For the Defendant Joye Vaught:

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

By: Ms. Joy M. Bertrand, Esq. - Appears by Zoom

P.O. Box 2734

Scottsdale, AZ 85252

joy@joybertrandlaw.com

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P R O C E E D I N G S

THE COURT: All right. Please be seated.

(Proceedings commence at 9:11 a.m.)

THE COURT: I was told that Mr. Kessler wanted to

speak with me about something.

MR. KESSLER: Good morning, Your Honor. If you can

bear with me for a moment. Yesterday during our call

Mr. Cambria raised an issue having to do with Mr. Berry's

closing argument, and I wanted to address that in more detail

this morning, about five minutes, if that's okay.

THE COURT: What is the form and fashion? Is this a

motion? Is this an objection? What is the procedural posture

that we are in?

MR. KESSLER: This is an oral --

THE COURT: We've had numerous opportunities. I've

given the parties numerous opportunities after the closing

arguments to make argument or objection, so I want to know

procedurally how is it that you're raising this now?

MR. KESSLER: Well, this is an oral motion to

reinstruct the jury on a couple points at a minimum.

THE COURT: You may make your record, but at this

juncture, the jury having been instructed, the parties having

relied on all of the instructions, including the First

Amendment, I'm not going to change any of the jury instructions

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unless you can present me with some sufficient case law that

tells me otherwise.

MR. KESSLER: I'm --

THE COURT: You may make your record, Mr. Kessler.

MR. KESSLER: One of the offending statements in

Mr. Berry's closing rebuttal is found at page 50 on the

November 1st transcript, Day 28, where he states, "Next, the

defendants argue, well, they had new" -- and I think the

reporter meant to put "no" -- "knowledge of these specific 50

ads. Ladies and gentlemen, these ads are just a sample. We're

not going to charge them with a million counts based upon the

millions of ads. That's why there's a conspiracy charge

covering the statute, covering the 14-year life of the

conspiracy. What I am not -- what I'm not going to show

you" --

THE COURT: One second, Mr. Kessler. My Livenote has

timed out.

(A break was taken to address technical difficulties)

THE COURT: Okay. All right. Mr. Kessler, you may

continue.

MR. KESSLER: Thank you. Picking up pretty much where

I left off, which is in the middle of that paragraph, Mr. Berry

said, "What I am not -- what I am not going to show you is a

jury instruction that says we must prove that any defendant has

specific knowledge of these particular ads because it isn't in

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there. We don't have to do that. You won't see that

instruction."

The problem with that, Judge, is that it conflicts

with other instructions you've given this jury and does nothing

but misstate the law and confuse the jury.

For example, the Court's Travel Act instruction, which

I think is on page 30 of the jury instructions, is expressly

tied to the 50 charged acts. It says: Second, after doing so,

the defendant performed an act that did promote or -- or

facilitate the promotion of any business enterprise involving

prostitution offenses specifically by publishing on

Backpage.com the ads listed in Counts 2 through 51 of the

indictment.

That same instruction goes on to say: To prove

specific intent, the government must establish that each

defendant in some significant manner associated himself or

herself with the purpose of promoting or facilitating the

promotion of any business enterprise involving prostitution

offenses that the defendant knew to be unlawful under the

state -- under the state law, which then begs the question, if

Mr. Berry was correct in his argument, if not to any business

enterprise involving prostitution offenses in the 50 ads, with

whom are defendants significantly associating themselves?

The Court also instructed the jury on the Travel Act

conspiracy charge that says: First, beginning on or around

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2004 and ending on or about April 2018, there was an agreement

between two or more persons to commit at least one Travel Act

offense as charged in Counts 2 through 51 of the indictment.

So even the conspiracy instruction that the Court has

provided to the jury ties this case to the 50 charged ads, not

to the millions that came before it. Some time ago when Judge

Brnovich had this case, this issue was raised, and I am

referring to Document 946.

THE COURT: Yes, I read that.

MR. KESSLER: The important part of that is Judge

Brnovich said there, meaning the defendants, "main concern is

summed up in a question they pose to the Court: 'How could one

specifically intend to promote/facilitate a business enterprise

one does not know to exist?'" To answer defendants' question

posed to the Court, one cannot intend to promote or facilitate

a business enterprise one does not know exists.

What Mr. Berry's argument suggests is that the

defendants can be convicted absent any knowledge of the 50 ads

or any knowledge of the persons posting those ads, or what they

were doing simply is -- is inconsistent with the Court's ruling

in Document 946, as I just quoted, and the Court's jury

instructions that I have just quoted. I think it's fair to

characterize Mr. Berry's argument to mean that the government

believes that the defendants can be convicted based on general

intent as opposed to specific intent, and I believe it's fair

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or reasonable to say that this is the prosecution's call for

jury nullification; in other words, an invitation to convict

where there is no basis to do so.

So what, on behalf of Mr. Spear, I am asking this

Court to do this morning, not to change any of your

instructions, but to address the Court and inform the Court

that Mr. Berry's statement that they don't need to prove

knowledge by these defendants of the 50 charged ads is legally

erroneous, and the jury should refer to this Court's

instructions both with respect to the Travel Act and with

respect to the Travel Act conspiracy charge.

THE COURT: Well, I guess I don't -- I don't recall

specifically, but I don't know whether or not at the time that

Mr. Berry made that statement there was an objection. And if

there was not, then you've missed the opportunity. But in any

event, what I have consistently told this jury at this juncture

in the closing argument is that simply that, summation is

summation, it's not evidence, and that they are to follow the

instructions that the Court gave them.

And in my view, that's sufficient cure for that sort

of statement. And so you've made your record, Mr. Kessler, and

so I'll hear from the government.

MR. KESSLER: Your Honor, I need to address one point

regarding your comments. I did make the objection. I showed

Mr. Berry the courtesy of allowing him to complete his

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rebuttal, his closing rebuttal. I immediately came to the

podium afterwards and lodged this objection and indicated that

it would be addressed in more detail at a later time. I made

the objection to preserve my ability to make this oral request

at this time.

I don't agree -- I can't imagine how telling the jury,

well, you know, read the instructions, disregard what they say

if you think they don't -- what the prosecutor says, if you

think it doesn't apply, or whatever --

THE COURT: Mr. Kessler, it happens all the time in

almost every trial that I've had.

MR. KESSLER: But this is such -- this is a statement

by the prosecution on the law that is a 180 degrees different

than not only what the law is, but the law of this case and the

other instructions that you have given this jury. How does a

jury reconcile that?

THE COURT: Well, they do it as I've instructed, to

read the instructions and apply the instructions to the facts.

MR. KESSLER: Well, my request is that the jury be

informed that Mr. Berry's statement of the law in that respect

was erroneous and simply refer the jury back to the early

instructions. It's such a big issue. I can't see a jury

working through this.

THE COURT: Well, the jury doesn't have a transcript.

The jury doesn't have a transcript of anyone's summation

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argument, and I think we've given enough information to this

jury that my sense is that not all of them are going to

remember your summations, whether or not you agree with that or

not. My goodness sake, that happened almost a week ago.

So in any event, I'll hear from the government and

then we'll bring the jury in.

MR. KESSLER: Thank you, Your Honor.

MR. STONE: Your Honor, respectfully, Mr. Kessler is

wrong with that argument. This is an issue that has been

litigated in this case time and time again.

I cited to the Court, Judge Brnovich's order 793 where

she went through all of the allegations in the superseding

indictment. Those allegations laid out what the evidence, the

evidence that's now been presented to this jury, which is

strategies that these defendants had to build their website and

strategies they had to maintain their website.

The same argument about this general intent versus

specific intent was made before and is now law of the case.

This Court has ruled in 793, 946, and in Your Honor's order on

the motions in limine 1643, that this case involves the

policies and the implementation of those policies by these

defendants which created this marketplace for promoting

business enterprises that were involved in prostitution

offenses.

There was no misstatement by Mr. Berry in his

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summation. We agree with Your Honor that, as you've told the

jury now probably a half dozen times, summation is just that,

and they need to analyze the evidence and the instructions, and

so we agree with that.

Similarly, we think that there were misstatements of

the law made by the defense, and Your Honor has rectified that

with the admonition to the jury. But this issue about the

defendants needing to know specifically about these 50 ads has

been asked and answered.

Doc 793 where Judge Brnovich says: Based on the

allegations, if those are proven true, then the defendants

could be found guilty of promoting prostitution business

enterprises.

So this is not a new issue. This is an issue that the

defense continually raises, and it's been put to bed, Your

Honor.

THE COURT: All right. Let's go ahead and have the

jury in. She is going to double-check. We had one that was

tardy, so anticipated being here at 9:30.

MS. BERTRAND: Your Honor, is the Court going to --

hi, this is Joy Bertrand. Good morning. Is the Court going to

tell the jury why I am appearing by Zoom?

THE COURT: I had --

MS. BERTRAND: Pressing on my --

THE COURT: Did you hear me? I had intended to. Are

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you on mute? Okay.

MS. BERTRAND: No.

THE COURT: We are still waiting for the arrival of

one of our jurors, and as soon as that juror comes in we will

proceed.

COURTROOM DEPUTY: All rise.

(Recess was taken at 9:37 a.m.)

(Proceedings reconvened at 9:42 a.m.)

THE COURT: Please be seated. It appears all of our

jurors are now present, and so we will have them come in.

(Jury is present)

THE COURT: All right. Please be seated. And the

record will reflect the presence of the jury, the presence of

government counsel, defense counsel.

Members of the jury, as you can see, we are joined by

Ms. Bertrand through Zoom. She too fell prey to illness during

the weekend, and so in an abundance of caution she is

isolating, but she is here this morning and will participate,

although her client is also present in the courtroom.

Now, members of the jury, when we last met the parties

had given you their closing arguments and so it has been some

time since you have been instructed. And as I mentioned

previously, you will have copies of the final jury instructions

in the jury deliberation room to guide you in your

deliberations.

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I do want to just remind you of two instructions. And

so if you will bear with me, I think this will help you get

started in your deliberations. I am going to read you an

instruction on your deliberations.

Now, members of the jury, "When you begin your

deliberations, elect one member of the jury as your foreperson

who will preside over the deliberations and speak for you here

in court.

You will then discuss the case with your fellow jurors

to reach agreement if you can do so. Your verdict, whether

guilty or not guilty, must be unanimous.

Each of you must decide the case for yourself, but you

should do so only after you have considered all of the

evidence, discussed it fully with the other jurors, and

listened to the views of your fellow jurors.

Do not be afraid to change your opinion if the

discussion persuades you that you should. But do not come to a

decision simply because other jurors think it is right.

It is important that you attempt to reach a unanimous

verdict but, of course, only if each of you can do so after

having made your own conscientious decision. Do not change an

honest belief about the weight and effect of the evidence

simply to reach a verdict.

Perform these duties fairly and impartially. You

should also not be influenced by any person's race, color,

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religious beliefs, national ancestry, sexual orientation,

gender identity, gender, or economic circumstances. Also, do

not allow yourself to be influenced by personal likes or

dislikes, sympathy, prejudice, fear, public opinion, or biases,

including unconscious biases. Unconscious biases are

stereotypes, attitudes, or preferences that people may

conscientiously reject, but may be expressed without conscious

awareness, control or intention.

It is your duty as jurors to consult with one another

and to deliberate with one another with a view towards reaching

an agreement if you can do so. During your deliberations, you

should not hesitate to" reconsider "your own views and change

your opinion if you become persuaded that it is wrong.

If it becomes necessary during your deliberations to

communicate with me, you may send a note through the Courtroom

Deputy signed by any one or more of you. No member of the jury

should ever attempt to communicate with me except by a signed

writing, and I will respond to the jury concerning the case

only in writing or here in open court. If you send out a

question, I will consult with the lawyers before answering it,

which may take some time. You may continue your deliberations

while waiting for the answer to any question. Remember that

you are not to tell anyone -- including me -- how the jury

stands, numerically or otherwise, on any question submitted to

you, including the question of the guilt of the defendant,

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until after you have reached a unanimous verdict or have been

discharged."

Now, I want to raise one final matter with you,

members of the jury, as you know and as you will recall, we

have had to postpone trial September 5th through the 8th for

illness, then again essentially two days last week for those

same reasons. So though you were informed that your service

was to have ended on Thursday, November the 9th, and remember

that Friday November the 10th is a federal holiday, so the

building will be closed, I have determined to extending your

service Tuesday, November 14th through next Friday,

November 17th. That in no way suggests that your deliberations

are subject to any time limit. It is only meant to give you

the time needed to carefully consider the matters that are

before you.

So at this time I would like to hear from any of you

who may have a reason that you feel might prevent you, if

necessary, from deliberating, excuse me, from Tuesday

November 14th through November 17th, if necessary. Is there

any one of you who has a conflict?

And I will also remind you that it is generally

important that you adhere to the trial schedule; in other

words, when you deliberate, you should begin deliberations when

you are all present, and you should aim to be present at

9:00 a.m. and work through to at least 4:30. Of course, giving

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yourself breaks throughout the day and a lunch break, and we

will have lunch brought in for you.

I will issue then, having not heard of any, anything

that will prevent any of you, I will issue an order so that you

may, if you need to provide that to whomever may need to know

about your service.

Now, at this time I am going to select two of you as

alternate jurors. The law requires only 12 to deliberate and

to return a unanimous verdict. But as you have seen, a jury

trial with this length of time also comes with additional

issues that individuals confront, emergency situations at home,

illness or the like, and so it is necessary that we select two

alternates.

The two alternates who are going to be randomly

selected will not participate in the jury deliberations,

however, you will remain on standby if you are selected as an

alternate, and you are going to continue to adhere, all of you,

to the admonition not to discuss the case with anyone, not to

conduct any research.

There may come a time, for example, if a deliberating

juror gets called away, we will have to call one of you back

who is the named alternate by random selection, and then you

will begin deliberations with the jurors that have been

deliberating.

If you are selected as an alternate, please leave your

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notebooks on your chairs. We're going to gather those and keep

them in a safe place in the event that you get called back.

So at this time I'll have the Courtroom Deputy

randomly draw the two alternate jurors.

COURTROOM DEPUTY: Juror No. 12, Juror No. 2.

THE COURT: Juror No. 12 and Juror No. 2, you are

selected as the alternate jurors. And again, I remind you not

to discuss the case, not to do any research about the case,

turn away if you hear something on the news, anything of the

sort, because again, there may come a time when you get called

back to join in the deliberations and we want to make sure that

you adhere to the admonition.

And at this time, if I could have my Career Law Clerk

and my Courtroom Deputy come forward. Please raise your right

hand.

(Career Law Clerk and Courtroom Deputy are sworn in.)

THE COURT: All right. With that, we will excuse the

alternates and we will excuse the jurors to begin your

deliberations. Liliana will bring in lunch order forms for

you, and so you may get yourselves organized. Again, take

breaks as needed, lunch break as needed.

All rise for the jury.

(Jury is not present.)

THE COURT: All right. Please be seated. Now, I want

to make sure that everyone has provided to Liliana their

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contact information so that she may readily reach you -- she

may readily reach you if the jury does have a question.

Well, the twists and turns continue. Juror No. 16 has

indicated illness, and she is inquiring as to whether or not

she could be designated as an alternate. Having had the random

draw, I've never been in these waters before. My sense is

that, well, she's the individual at the very end who has the

mask on, and she's been here everyday diligently, but I'm

assuming that if she's reporting illness to the Court, that she

feels it necessary that she take care of herself and not

participate in deliberations.

We have Jurors 12 and 2 who are the alternates.

MS. PERLMETER: Your Honor, if Juror 16 is now ill, we

have no objection to her becoming an alternate, and then

between the recently or the just designated alternates who are

Jurors No. 2 and 12, we suggest the Court flip a coin.

THE COURT: Mr. Eisenberg.

MR. EISENBERG: Your Honor, I'll speak for the

defendants. We also have no objection to the release of 16.

As far as reselecting an alternate, rather than flip a coin, I

should think that the two -- two certificates or whatever they

are -- the coins, just be reselected at random.

THE COURT: We will insert 12 and 2 back into the hat

and we will select the alternate along with Juror No. 16.

MR. EISENBERG: Your Honor, I'm suggesting that one of

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the two alternates be put back in as a juror by random

selection.

THE COURT: Yes.

MR. EISENBERG: Oh, okay.

MR. FEDER: Judge, I don't want to throw a kink in it.

THE COURT: Why not, Mr. Feder?

MR. FEDER: I do have a coin just in case. I thought

yesterday we had -- you were going to designate 7, the woman

who is sick, as an alternate.

THE COURT: No. The government asked that. I did not

say that I would do that.

MR. FEDER: Okay. All right.

COURTROOM DEPUTY: 2.

THE COURT: Juror No. 2 will replace Juror No. 16.

COURTROOM DEPUTY: Bring them back out?

THE COURT: No. I don't think so.

Well, all right, I wanted to address an issue related

to the forfeiture proceeding, and I do understand that

Mr. Boyle is going to join us through the technology. We'll

have to wait for Liliana to come back in order for that to

occur, so we can stand in recess while we wait for that.

(Recess was taken at 9:59 a.m.)

(Proceedings reconvened at 10:25 a.m.)

THE COURT: All right. Let's move to -- I know I had

indicated -- please. I'm sorry. I indicated that I wanted to

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address the recent filings by the defendants regarding the

forfeiture jury instructions and the form of verdict. I have

two, well, I have a couple of questions, but I think further

briefing is going to be necessary because there's a particular

issue that I'm not familiar with with respect to the two types

of forfeiture that are potentially at issue, the property and

the money.

As I read the law, with regard to the property issues,

there remains this issue of ancillary proceedings related to

any third-party interests. My understanding of the procedure

is that, and Mr. Boyle, you can correct me if I'm wrong,

Mr. Panchapakesan, is that at a later time if the jury returns

a verdict that permits them to go back and look at the

forfeiture proceeding, that with regard to the property then

the Court later determines the ancillary interests.

The question that I have that relates to,

Mr. Panchapakesan, your proposed form of verdict is the request

that the jury parse out specific amounts related to the money,

and I am not entirely clear that with regard to the money that

the procedure isn't the same for property; in other words,

wouldn't it be helpful then to have an ancillary proceeding to

determine what the interests in that money is?

The way that I read the statute, it assumes that the

money alleged in the forfeiture proceeding is to be forfeited,

and so that really is the question that I have.

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And this second part has to do with the procedural

posture of any forfeiture trial. Because it is a quasi-civil

matter, my inclination is, I understand the government is only

producing two witnesses, and my inclination is to limit the

time in which you can examine that witness on direct much like

I do in any civil trial, limit your examination, for example,

to two hours, and a rebuttal exam to half an hour. I won't

limit cross-examination.

The same would be true of the defendants who, by the

way, Mr. Panchapakesan, did you file your, or did you provide

the Court with your anticipated witness?

MR. PANCHAPAKESAN: No, but I can do so now.

THE COURT: And again, here's the question that I pose

to you. We'll have to have that witness' name before the jury,

and was that a person that was listed on your original witness

list?

MR. PANCHAPAKESAN: Neither of them were. I can

provide the name.

THE COURT: I can't hear you.

MR. PANCHAPAKESAN: Neither of them were on the

original witness list, but I can provide those names now.

THE COURT: All right. Give me -- give Liliana the

witnesses. I'm assuming you gave those over to the government.

MR. PANCHAPAKESAN: I haven't yet, but I can do that

now.

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THE COURT: And so there's two questions, and if you

need time to further brief the first, I understand that. I too

want to look at some matters. And it would be helpful if you

cite to Ninth Circuit case law, and so one having to do with

the ancillary nature of I think what you're requesting in the

verdict form, and the second being the Court's ability to limit

your presentment in terms of time for your respective case in

chief.

Mr. Boyle, do you have any immediate thoughts with

regard to any of that?

MR. BOYLE: With respect to the second issue raised,

Your Honor --

THE REPORTER: I can't hear.

THE COURT: You're very mute. I don't know if it's

our audio or if it's yours.

MR. BOYLE: Better, Your Honor?

Just wait one second.

MR. BOYLE: Yes, Your Honor.

COURTROOM DEPUTY: Speaking again.

MR. BOYLE: Yes, Your Honor, hopefully this is better.

THE COURT: Yes, it is.

MR. BOYLE: Thank you, Your Honor. With respect to

the second issue you raised as to timing, we would have no

objection to the time limits you suggested. I suspect those

would be entirely reasonable for what we intend to present.

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THE COURT: All right. So let me ask

Mr. Panchapakesan with respect to that.

MR. PANCHAPAKESAN: We have no objection to the Court

setting time lines.

THE COURT: All right. So in your direct examination

to our limit, no limit for cross-examine, 30 minutes for any

redirect.

And then with regard to the, I guess what I'll refer

to as an ancillary proceeding, with regard to the money

forfeiture allegations, do you have any immediate thoughts,

Mr. Boyle?

MR. BOYLE: I think Your Honor has accurately

described the procedure in that the question for the jury is

whether there's a connection between the asset and the offense.

Your Honor is correct, whether there are third-party interests,

that will be determined by the Court at a later date. I am

aware of some case law saying the jury can assess how much of a

connection there is, but I agree that is a complicated

question.

And in particular with respect to something like real

property, I don't think it's appropriate to have the jury try

to parse out the equity in that.

THE COURT: And I think, as I have read the case law,

that with respect to property, that's the procedure. I'm more

focused on the money assets and whether or not those are to be

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treated the same in terms of a later ancillary proceeding.

MR. BOYLE: I believe there would be a later ancillary

proceeding, Your Honor, to the extent a third party -- well, if

I might back up briefly. To the extent this issue goes before

the jury, the jury would render a verdict. The government, if

that verdict said there was a nexus, the government would then

file a preliminary application of forfeiture with Your Honor

and that would trigger the ancillary proceeding for any third

party that claims they have an interest to show up.

So that would be the procedure, Your Honor, jury

verdict, application that Your Honor, the Court, would

consider, and then an ancillary proceeding.

THE COURT: All right. Let me hear from

Mr. Panchapakesan.

MR. PANCHAPAKESAN: So my understanding, Your Honor,

with respect to the ancillary proceeding, is that it's a

proceeding to determine whether some third party not present in

the courtroom has an interest in one of the bank accounts or

pieces of real property that's forfeited, which I think is

distinct from the interests that is forfeited as to a

defendant; right?

So for example, if you have, let's say, a million

dollars in a bank account, and the government is seeking to

forfeit that, let's assume nobody else is in interest except

for, say my client, then what we're asking is a jury to

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determine what amount of assets be forfeited.

And I think the ancillary proceedings deals with a

second question, which is a bank account with a million dollars

and there is two other owners of it, then the ancillary

proceeding will determine to what extent do those third parties

have an interest, should they be able to retain those

interests, which I think is distinct from the defendant who is

on trial and they own bank account and are the only ones who

own it, and what portion or percentage of that should be

forfeited.

THE COURT: All right. Well, I'll give you 24 hours.

If you want to give me something in terms of a briefing, I'll

look at what I can to determine how these matters have

proceeded with regard to any sort of money forfeiture and a

defendants' specific interest in the percentage.

I frankly think that it's a very difficult question to

put before the jury in terms of the individual accounts. There

are, I think I recall something in the neighborhood of 41 total

pieces of property and bank accounts.

And so I'll give you until tomorrow, I would say close

of business, to provide me any sort of additional briefing or

guidance that you may have on it.

In the meantime, I'll look through your proposed jury

instructions and let you know if I have any questions or issues

with regard to that.

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Is there anything further to be taken up by the

government?

MR. RAPP: No, Your Honor.

MR. BOYLE: From the government, Your Honor. My

apologies, Your Honor, the Court directed the government and

defendants to meet and confer and to think about what we would

do if the jury can't be retained. My understanding from

speaking to co-counsel is it sounds like the jury is available

next week, but we're still prepared to make a filing this

afternoon if the Court wishes that.

THE COURT: Yes, I think you should. You know, we've

lost another juror yet to illness, so you don't know what's

going to happen. I certainly can't predict what's going to

happen, and so I think you should do that, in any event.

And one of the things that I hope you thought about,

because I thought about this, because, again, this is a

quasi-civil proceeding, that I don't know that it's necessary

to retain all 12. I think we can certainly have 11 jurors

deliberate on something like this, and possibly even six, but

hopefully we won't have to make that determination, but I'll

appreciate any guidance you could provide me.

All right. Anything further from defense?

Mr. Cambria?

MR. CAMBRIA: No, Your Honor. No, Your Honor.

THE COURT: I assume, Ms. Vaught -- sorry,

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Ms. Bertrand. I am looking at Ms. Vaught and I am calling

her -- looking at Ms. Bertrand and calling her Ms. Vaught.

MS. BERTRAND: Nothing from me. Thank you.

THE COURT: I hope you're feeling better.

MS. BERTRAND: Thank you. I'm working on it.

THE COURT: Mr. Panchapakesan?

MR. PANCHAPAKESAN: No, Your Honor.

THE COURT: Mr. Kessler?

MR. KESSLER: No.

THE COURT: Mr. Eisenberg?

MR. EISENBERG: No, Your Honor.

THE COURT: We will stand in adjournment. As I

mentioned, please do give Liliana your contact information and

don't leave town. All right. Thank you. We will stand in

adjournment.

(Recess was taken at 10:39 a.m.)

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C E R T I F I C A T E

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

appointed and qualified to act as Official Court Reporter for

the United States District Court for the District of Arizona.

I FURTHER CERTIFY that the foregoing pages constitute

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

the proceedings contained herein, had in the above-entitled

cause on the date specified therein, and that said transcript

was prepared under my direction and control.

DATED at Phoenix, Arizona, this 8th day of November,

2023.

s/Hilda E. Lopez_______

HILDA E. LOPEZ, RMR, FCRR

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