UNITED STATES DISTRICT COURT

1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

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

Plaintiff, )

)

vs. ) Phoenix, Arizona

) November 14, 2023

Michael Lacey, et al. ) 9:45 a.m.

)

Defendants. )

_____________________________ )

BEFORE: THE HONORABLE DIANE J. HUMETEWA, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

TRIAL - DAY 32 - A.M. SESSION

(JUROR QUESTION/EVIDENTIARY 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

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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 Boyle, Esq.

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.

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.

P.O. Box 2734

Scottsdale, AZ 85252

joy@joybertrandlaw.com

I N D E X

PLAINTIFF WITNESS: DIRECT CROSS REDIRECT RECROSS

QUOC THAI 35

By the Court 45 47

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P R O C E E D I N G S

(Proceedings commence at 9:45 a.m.)

THE COURT: Please be seated.

(All counsel present except for Mr. Kessler and

Mr. Berry.)

THE COURT: All right. Do we have all clients

present? All defendants are present; all counsel.

COURTROOM DEPUTY: I don't see Mr. Kessler.

MR. FEDER: Mr. Kessler just called me, but I haven't

had a chance to call him back. Yesterday he indicated he would

be in another court situation until 10:30.

THE COURT: Can you speak into the microphone?

MR. FEDER: Mr. Kessler just called me. I am not sure

if he is going to be able to make it. We talked last night.

He said he would be busy on something else until 10:30.

THE COURT: All right. All counsel, all defendants

are present. Government's counsel is present. We do have a

question from the jury. My law clerk has provided you a copy

of it. The question is dated today. It reads:

"If a defendant is found not guilty in charge #1, but

found guilty in charges #2-51, can the defendant be charged in

counts # 2-51."

The second question is, or statement is:

"The question was a concern due to page #27 lines

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10-11. Please provide clarity if allowed," or "permitted."

And it's signed Juror 15.

Page 27 is the Pinkerton instruction, and I'm assuming

they are referring to the second element that, "Second, that

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

indictment." The -- obviously the question probably meant to

ask, "Can the defendant be convicted in Counts 2 through 51?"

And that's the way that I intend to read it. The obvious

answer is yes, and I'm inclined only just to indicate that as

the answer.

I also considered referring them back to page 16,

which is related to the separate crime as charged in each

count.

I'll let you mull that over. Does the government wish

to give me their thoughts?

MR. STONE: Yes, Your Honor, I think "Yes" is the

perfectly fine answer here. It is the correct answer.

Pinkerton, my ability, is a separate theory of liability for

the jury to consider with these defendants in these charges.

The only other suggestion that we came up with was to point the

jury to page 30, which is the instruction on the Travel Act.

Defendants are charged in Counts 2 through 51, and it has the

elements there on what the jury would need to find has been

proven beyond a reasonable doubt to find any of the individual

defendants guilty of Counts 2 through 51. But "Yes" is clearly

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the answer here, Your Honor. Thank you.

THE COURT: Thank you. Who wishes to be heard from

the defense?

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

I disagree respectfully, Your Honor, with just simply

saying, "Yes." To me, the answer to this is found in the two

lines that the jury has quoted or, well, the note quotes, which

is 10 and 11, and it says, "Second, that person was a member of

the conspiracy."

So this is a bit, I wouldn't say, convoluted, but I

don't think the answer can merely be "Yes." I think we ought

to be -- to be referring them back to the very lines that they

are apparently concerned with, and that is, you have to be, or

whoever the defendant is, has to be a member of the conspiracy

charged in Count 1.

And with respect to the Travel Act, that's on page 30,

that Mr. Stone referenced. If -- to me, there again, on line

12, there's a reference to proving specific intent, and it

says: The government must establish that each defendant in

some significant manner associated himself or herself, so on

and so forth, and that really carries it back to the conspiracy

charge.

But I don't think that's really the relevant part

here. The relevant part is that very jury instruction they are

quoting. And I think to say "Yes" is not right, Your Honor,

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respectfully.

THE COURT: And it's not right why? I guess I am

missing that point.

MR. EISENBERG: Because there is an element in there

saying that person was a member of the conspiracy. So if they

find a person was not a member of the conspiracy as charged in

Count 1, then there is no -- that second element cannot be

fulfilled and, therefore, Counts 2 through 51 are not -- not a

part of the approach that they can take with respect to finding

a defendant or defendants guilty. You have to be a member of

the conspiracy as charged in Count 1.

MR. LINCENBERG: Your Honor, I would just add one

point.

THE COURT: Well, if you look at the first and second

elements taken together, I think the answer is "Yes." It's not

a prohibited conclusion certainly.

MR. EISENBERG: If -- may I speak, Your Honor?

THE COURT: Yes.

MR. EISENBERG: Fourth element says, "A defendant was

a member of the same conspiracy at the time the Travel Act was

committed."

Now, that would appear to me to be that the defendant

under consideration, whether it is whomever of our clients is

under consideration, that also underscores the idea that the

defendant or a defendant was a member of the same conspiracy.

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So I think it's unescapable. You have to be a member of the

conspiracy to be convicted, found to be a member of the

conspiracy before you can be found to be convicted of one of

the substantive acts in 2 through 51.

MR. STONE: Your Honor, if I may.

THE COURT: Yes.

MR. STONE: That's only if they are moving down the

Pinkerton theory of liability. That's a separate theory.

Instruction 30 and, you know, goes through, let's see, page 38,

the Travel Act, is the Travel Act instruction. And certainly

if the question was: If defendant is found guilty in charge

one, must he be found guilty in charges 2 through 51? I mean,

the answer is no. It's a separate evaluation for each count.

And the jury's determination as to Count 1 for one defendant

does not necessarily affect their decisions for Counts 2

through 51.

(Mr. Kessler is present.)

THE COURT: And that's the way that I read the

instructions and the superseding indictment, and the jury

instructions with respect to each of the counts being

separately considered. That's how I have always read those

instructions. And so I still believe the appropriate answer is

"Yes," and certainly I can refer them back to the Travel Act

elements, as well as the separate charge per separate defendant

requiring separate consideration.

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I think all of those things taken together would add

the most clarity. I'm not whetted to providing them the Travel

Act instruction. I think actually it's essential that they

understand that each count is a separate considered count.

Yes, Mr. Lincenberg.

MR. LINCENBERG: Thank you, Your Honor. Your Honor, I

think there's a second argument that supports what

Mr. Eisenberg is saying, which is that if a jury were to find

somebody not guilty on Count 1 and guilty on Count 2, it would

create an inconsistent verdict because of the way the

government presented this case. So the government did not put

on any evidence that --

THE COURT: Well, let me get to the point of the

answer. You're making an argument that probably can be made

later, but I'm only dealing with getting the jury the answer.

MR. LINCENBERG: Well, I'm --

THE COURT: Unless you have something to offer in that

regard.

MR. LINCENBERG: Well, my argument is in support of

Mr. Eisenberg's position that the Court should not direct the

jury's attention to page 16 or 30 because doing so presumes

that they could reach an inconsistent verdict because the proof

did not involve, for example, my client having seen any ads or

anything. It's based on a Pinkerton liability theory.

THE COURT: Well, that ship has sailed in terms of

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what the jury has in front of them. They have the

instructions.

MR. LINCENBERG: Right.

THE COURT: And so I don't necessarily find it harmful

for them to be redirected to those particular instructions that

tell them that they are to consider a separate charge per

separate defendant. It's basically what they've been told to

do.

All right. Anything further?

MR. FEDER: Judge, I don't think the Court can or

anybody else can presume to say that charges in Counts 2

through 51 meant to say "convicted." I think we have to tell

them that we can't understand the question or can't answer it,

or be consistent with what Mr. Eisenberg has said. I don't

think it's proper.

THE COURT: Well, you can't have it both ways,

Mr. Feder.

MR. FEDER: It's not proper to make an assumption on

what a question means by essentially changing the word that you

think they intended and then improperly focusing on other

instructions that follow that new interpretation.

THE COURT: Well, then under that interpretation my

answer would be "Yes," reading it clearly, "Can the defendant

be charged in Counts 2 through 51?" Yes, and indeed they are.

MR. FEDER: The "charged" changes the -- the "charge"

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in the second question changes the question, the first

question, to make it incomprehensible.

THE COURT: It's not incomprehensible, Mr. Feder.

MR. FEDER: Okay. Objection made.

(Mr. Berry is present.)

THE COURT: All right. So my inclination then --

MS. BERTRAND: Your Honor, I'd like to be heard. It

will be short. My suggestion would be not to answer yes or no

because this question is -- we are filling in what we don't

know with what we think we know, but we may be wrong. I would

suggest the Court, instead of answering yes or no, simply refer

the jury to specific instructions, such as the Pinkerton

instruction and the specific Travel Act instruction. I think

that avoids us getting into any speculation about what's going

on. It is -- the referral back to the instructions is a proper

statement of law.

And if they have another question, they can ask us.

But I think if we're going to do anything, it has to be simply

send them back to the instructions and not give them an

affirmative yes or no answer on something that is ultimately

their decision.

THE COURT: Well, they already have the Pinkerton

instruction in mind in asking the question, so what I'm

inclined to do then is I will simply refer them back to jury

instructions at page 16 as well as the Travel Act instruction

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at page 30, and that's how we will resolve that.

MR. STONE: Your Honor, just a point of clarification,

are you going to answer the question "Yes" and then point them

to those instructions?

THE COURT: No.

MR. STONE: Okay. 'Cause I think your first

inclination is the correct one. This is a clear question with

a clear answer, and they are asking for clarity, and I do think

"Yes" would help them here. The instructions suggests that

each count is a separate consideration. And it is clear, as

the defendants, if the shoe were on the other foot here, would

certainly be arguing that the answer should be "Yes" if it was

the other way. So I think it really should be "Yes," and then

point them to the instructions. That's our position.

THE COURT: Well, on reconsideration, I do think

that's appropriate because there is a question that starts with

"Can," and the instructions clearly permit them to make that

decision. And so I will answer the question to begin with,

"Yes." And then refer them back to jury instructions at

page 16 and 30. And that's how it will be resolved.

All right. Can --

MR. EISENBERG: Your Honor, I am sorry, I do have a

question in how this was phrased by the juror. He or she says,

"Can the defendant be charged in Counts 2-51?" And perhaps

what that person meant is found guilty. Charged, yes, I

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suppose you could be charged, but this is where I think we are

confused. We don't really know what No. 15 meant by that. And

they are charged in -- everyone is charged in Counts 2 through

51.

THE COURT: Well, as I said before, I interpreted it

to mean convicted.

MR. EISENBERG: And I understand that, Your Honor.

THE COURT: And the answer, either way, would be the

same, "Yes."

MR. EISENBERG: Well, I would tend to agree with

Ms. Bertrand. We don't want to send a signal to them in terms

of what they should be considering or doing or emphasizing

anything in any way, and I think that by saying, "Yes," that

puts them down the road towards conviction.

THE COURT: In any event, because it's a responsive

answer to the question and because I think the answer, either

way, whether or not it be phrased "charged" or "convicted"

would be yes, it's a straightforward answer, something which

they are seeking. And so I will again respond: Yes. I refer

you to -- I refer you back to jury instructions on page 16 and

30.

All right. Anything further from the government?

MR. STONE: No, Your Honor.

THE COURT: Anything further from defense?

MR. EISENBERG: Not from me, Your Honor. Thank you.

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MR. FEDER: Over our objection -- I assume this is

noted over our objection that you're answering this?

THE COURT: You made a record. Yes, Mr. Feder, all of

the objections are on the transcript.

MR. STONE: Are we adjourned?

THE COURT: Yes.

Just to clarify, this afternoons proceedings are going

to be in my courtroom upstairs.

(Recess was taken at 10:06 a.m.)

(Proceedings commence at 2:50 p.m.)

THE COURT: Please be seated. We have all counsel

present from defense counsel. Where are they? No one is here.

Well, now the record will reflect the presence of defense

counsel. Government's counsel are all present as well.

We have provided to you two questions that the jury

submitted. In my review of the first question, which I will

refer to is the question on concealment. I also did some

research in terms of Ninth Circuit precedent, and there wasn't

any single sort of definition of concealment that I could find

that would be of any sort of use or clarity. I provided to

you, therefore, a Black's Law Dictionary definition of

concealment as well as a Webster's dictionary definition of

concealment. They seem to be the same.

MR. CAMBRIA: I have one.

MR. LINCENBERG: I haven't seen that, Your Honor.

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THE COURT: You haven't seen what?

MR. LINCENBERG: Your Honor indicated that you

provided us a Black's Law Dictionary definition.

THE COURT: Somebody has seen it.

MR. CAMBRIA: I haven't seen it.

MS. BERTRAND: I think it was a misunderstanding where

the source was.

MR. LINCENBERG: I just didn't get a copy of this.

THE COURT: Well, in any event, you have a Black's Law

definition and a Webster definition. They seem to be the same.

What I'm inclined to do is answer the question relating to the

Black's Law Dictionary term of concealment, "The act of

preventing disclosure or refraining from disclosing."

MS. BERTRAND: I only have the Black's Law Dictionary

printout. That's what I received from the Court's clerk and

handed out to my colleagues, and the proposed Allen charge.

THE COURT: I will read to you the Webster's

dictionary definition, "To prevent disclosure or recognition

of." I'll read it again, "To prevent disclosure or recognition

of."

Mr. Berry.

MR. BERRY: Yes, Your Honor. Sounds like what Your

Honor is suggesting is from the Black's Law just number one up

until it says: Especially.

That's what you're suggesting?

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THE COURT: Yes.

MR. BERRY: Okay. Yes, our suggestion was going to be

to go with Webster's, the first one, just because it was the

simplest, but I thought as much as I liked Mr. Garner, I was a

little bit worried about getting all of them, but I think the

one that you're suggesting is a simplified version of that, and

would be sufficient for the jury and would have no objection to

that being the instruction.

MR. LINCENBERG: Your Honor, the defense apologizes,

but we haven't considered this. We now have it. I am getting

handed one copy, but we just haven't looked at this.

THE COURT: At what?

MR. LINCENBERG: At the Court's proposed definitions,

and we'd like a little time to review it and compare it to the

jury instructions and so forth.

THE COURT: There is no jury instructions that defines

concealment. That's the dilemma. So they are asking for some

guidance on what "concealment" means. So that's the question.

So look at the definition. The -- they are very short. Take a

moment to look at them.

MR. LINCENBERG: I think we should discuss this.

Well, and Your Honor -- I think we should discuss it.

MS. BERTRAND: Your Honor, may I make a suggestion?

THE COURT: Yes. Sorry.

MS. BERTRAND: That's all right. My suggestion would

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be this: Perhaps we could address the Allen charge issue while

my colleagues look at the concealment language so we make the

most of our time. I think the more urgent question seems to be

the deadlock jury issue.

THE COURT: I'm happy to do that. My inclination,

because of the detailed statement of Juror No. 15, and I'll

read the question for the record, "It is unfortunate that we

have been in deliberations for days now and I feel that

people's personal feelings, emotions & what if opinions have

brought us to a standstill. There has only been (1) charge

that we have finally gotten all members of the jury to agree

on. I feel that this has become a hung jury & we were not able

to perform our required duties as jurors."

It's signed actually by Juror No. 15 and 3.

MR. LINCENBERG: 13.

THE COURT: Sorry, No. 13, yes. My inclination is to

give them the Allen charge, and the only modification to the

Allen charge that I would give them is to delineate, it begins,

"Members of the jury, you have advised that you've been unable

to agree upon a verdict," and I would insert, "on one or more

counts in this case." I would then include a pluralized

"verdicts" in the second sentence, or the, I guess it would be

the first sentence of the first paragraph. I would insert, "on

one or more counts" at the end of that paragraph after

"verdicts," and that's the only modification that I would make.

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All right. I will hear from the government.

MR. BERRY: Yes, Your Honor. On the Allen charge, it

appears that the current Ninth Circuit Model instruction on

that is 6.25, and it has a little bit different language than

what Your Honor is proposing here, and we --

THE COURT: I went into my historic Way Back Machine

for this.

MR. BERRY: I suspect there might have been a bench

book that might have been in the past knowing how this works.

Yes, it's very similar. I don't want to suggest that what

you've proposed is completely off base, but we would just

encourage the Court and request that the Court utilize the most

current Model instruction from the Ninth Circuit, which is 6.25

called Deadlocked Jury.

THE COURT: I'll have to get my --

MS. BERTRAND: Would the Court like a copy?

THE COURT: Yes. This is 6.25.

MS. BERTRAND: Yes, ma'am.

THE COURT: Yes.

MS. BERTRAND: Mr. Berry, sorry, I should have showed

that to you before I gave it to the Court.

MR. BERRY: I got it right here. Thank you.

THE COURT: Apparently they omitted the "equally

honest and conscientious juror" language.

MR. BERRY: I noticed that, Judge.

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THE COURT: We will have to explore that further. In

any event, is there an objection to giving the 6.25, Deadlocked

Jury, with the modification that I outlined indicating one or

more counts?

MR. LINCENBERG: Yes, Your Honor. Your Honor, the

commentary to 6.25 notes that the Court should not give an

Allen charge, it's inappropriate, where holdouts know or

believe that their identity is known to the Court, and it cites

to the case of U.S. vs. Williams, 547 F.3d 1187, Ninth Circuit

2008. Here we have a note in which it is signed by Jurors 15

and 13. And if Jurors 15 and 13, for example, are the

holdouts, then this is going to have an unduly coercive effect.

And the law, if the Court looks at the commentary, and

doesn't have to be black and white that it's absolutely clear

who the jurors are, but if the -- if they could interpret the

charge, quoting from Williams, if they could interpret the

charge as directed at them, then the instruction should not be

given.

I would also note a couple of other reasons why the

Allen charge is not appropriate here. Second argument is that

the jurors give pretty direct and strong language that they

have a hung jury, and it's their wording, and I think that that

would also suggest a coercive effect of an Allen charge.

Jurors have advised the Court where they stand. Judge is

saying, in the way they would view it as, I am not buying that;

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I am not accepting that.

Third, I think that where the note -- the note also

suggests potential juror misconduct. The juror is noting that

there are jurors in the room who are using "what if" opinions

and so forth, which would be inappropriate.

And fourth, in this case where the jurors have lived

with this case for 12 weeks, they have deliberated now 14 days,

it's some 13 days since they finished closing, they know this

case, they've had it for a long time, and I think we should

respect the note that they have been deadlocked on all counts

but one.

THE COURT: I don't know how you arrive at a

conclusion of holdouts or coerciveness from the note. I think

that's a bit of a stretch. And the commentary also instructs

the Court to look at the instructions in total, the duration of

the trial, the duration of time that they have been

deliberating, and they've been deliberating since last Tuesday

from 9:00 roughly to 4:30, although they left a little bit

early on Thursday, and we had a holiday on Friday. They

returned again this morning. We had the question.

Their questions have been thoughtful to this point,

and so I don't know how you arrive at this conclusion that

there is the indicia of coerciveness. I don't find that to be

present on the face of the note. And to be silent in the face

of this note, I think would not help them in their

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deliberations. I think it is appropriate at this juncture to

give them the charge.

Sorry, Mr. Berry, I didn't give you an opportunity.

MR. BERRY: You made my point for me. I would just

put a few things on the record here. I think Mr. Lincenberg is

certainly making some inferential leaps by suggesting that we

know that 15 and 13 are the holdouts. It could just as easily

be that 15 and 13, you know, very much in favor one direction

and that there's some others that they can't seem to persuade

that are the holdouts. There is absolutely nothing from the

face of this that would give this Court or any other any

indication that we know the identity of the holdout jurors, and

so Williams is completely inapplicable in that regard.

MR. LINCENBERG: Well, I would just respond with this:

We don't know that they are the holdouts. We don't even know

who the foreperson is. Our guess is probably No. 2 since we

now had two notes from No. 2. But if 15 and 13 are the

holdouts, and I think there's reasons to suspect that since

they jointly signed on to this note, they are going to

interpret the Allen charge as being directed at them, and this

is what I think the Ninth Circuit in cases like Williams are

concerned about is the coercive effect.

THE COURT: All right. I will give the Allen charge.

And let's move to the second note. I've heard the government's

position. They have agreed to give the Black's Law Dictionary,

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"The act of preventing disclosure or refraining from

disclosing." What is the collective agreement of the

defendants, if there's one? Ms. Bertrand.

MS. BERTRAND: Your Honor, I don't know that I'm the

proper person to comment on concealment because my client is

not contained in those charges.

THE COURT: Point taken.

MR. LINCENBERG: Your Honor, I would just ask for five

minutes to look at this because we just didn't have them. It's

an important instruction. I understand the Court is looking at

dictionary definitions. Mr. Eisenberg passed me, you know, for

example, the instructions which talk about concealing and

disguising. I'm not sure if it's appropriate to be giving a

definition of one versus the other. We just need a few minutes

to look at this.

THE COURT: I am not going to include a definition of

"disguising." It's not in the note.

MR. LINCENBERG: No. I'm just saying the Court

said --

THE COURT: I'll give you ten minutes, Mr. Lincenberg.

You and your counsel can move out into the hallway or into the

conference room to discuss it. We have a jury who is waiting

and we have other matters to attend to, so move forward,

please.

MR. LINCENBERG: Thank you, Your Honor.

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(Recess was taken at 3:09 p.m.)

(Proceedings reconvened at 3:16 p.m.)

THE COURT: All right. The record will reflect the

return of defense counsel. Let me read into the record the

jury questionnaire as it pertains to concealment. The question

reads: "Can we get a definition for concealment as it relates

to charges 53-62?" And it is signed by Juror No. 2. So what

position does the defense take?

MR. CAMBRIA: Your Honor, we think that the -- on the

Black's Law Dictionary one, the bottom, the bottom phrase where

it says, "The affirmative suppression or hiding, with the

intent to deceive or defraud, of a material fact or

circumstance that one is legally bound to reveal." I cut out

the language "(or sometimes morally,) I cut that part off, and

so that's what we would suggest. We think it's simple. This

is a specific intent crime. It seems that this definition

would be an appropriate one. So it would be, "The affirmative

suppression or hiding, with the intent to deceive or defraud,

of a material fact or circumstance that one is legally bound to

reveal."

MR. BERRY: Your Honor, if I could respond.

THE COURT: Yes. That's the definition of fraudulent

concealment per the Black's Law notation.

Yes, Mr. Berry.

MR. BERRY: Yeah, you're spot on. So those bottom

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definitions are sort of expounding on the idea of concealment

itself into various forms of concealment, and they've picked

the one that they find to be favorable to them.

I would point the Court and note for the record that

there are a couple of cases here in this circuit that support

what Your Honor is suggesting that we use. They actually use

the Black's Law Dictionary definition. One is in re: Lockwood

at 2007 Westlaw, 754 1005. It's a bankruptcy appellate

decision in the Ninth Circuit from August of 2007, and it uses

the definition Your Honor is suggesting.

Then there's a second decision from the Southern

District of California in a published decision, United States

vs. Nunez 419 F.Supp.2d 1258, pincite 1263, and that is, as I

said, the Southern District of California from 2005. Both of

those use the definition from Black's Law and specifically cite

to Black's Law for defining the term "conceal" or

"concealment."

And so we think that what Your Honor is suggesting by

saying, "The act of preventing disclosure or refraining from

disclosing" is the simpler and more used definition in terms of

cases in this circuit on that issue.

MR. CAMBRIA: I think if you're going to use that, it

should include all the language that's in there.

MR. FEDER: Those are money laundry cases, Mr. Berry?

THE COURT: I don't know what -- what was that

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question?

MR. BERRY: Mr. Feder is interrogating me.

MR. FEDER: Asking if these are money laundering cases

versus other type of cases.

THE COURT: Who are you directing the question to?

MR. FEDER: To Mr. Berry. We don't have the cases.

THE COURT: I think he mentioned one was a bankruptcy

fraud case. What was the nature of the case?

MR. BERRY: I honestly don't know, Your Honor. I

could figure it out quick.

MR. CAMBRIA: If you were going to use number one, I

would suggest that it include all the language of number one.

MR. BERRY: Sorry, Your Honor.

THE COURT: In response, when you say "all of the

language in number one," all the language in one includes "the

injurious or intentional suppression or nondisclosure of facts

that one is obligated to reveal." Is that what you're

suggesting, Mr. Cambria?

MR. CAMBRIA: Can I have a minute?

THE COURT: Yes.

MR. BERRY: Your Honor, Nunez, my quick read of it is

a bankruptcy fraud and money laundering case. The District

Court dismissed money laundering charges and the government

moved for reconsideration, and so this was the Court assessing

issues related to that.

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THE COURT: All right. Well --

MR. CAMBRIA: The answer is yes. We think it should

include all the language that's listed under number one.

THE COURT: And I will let you have the final word,

Mr. Berry, as to that.

MR. BERRY: Sure. So I think that the "especially"

part would be inappropriate to give to the jury here. The

insurance definition under three would also be inappropriate to

give to this jury. That's not what this case is about. I

think if you want to give half here, you could read, "The act

of preventing disclosure or refraining from disclosing," or

"The act of removing from sight or notice." That would be a

more fulsome definition that would give the defense a little

bit of what they are asking without giving sort of

inappropriate definitions that are irrelevant or not related to

this case.

MR. LINCENBERG: But that leaves out, Your Honor, that

one is obliged to reveal, and the reason why the Black's Law

definitions are better is because they are looking at legal

situations as to whether one has a duty to reveal that. And we

think that's important and relevant here because the

government's case, Mr. Ferrer's testimony, was a lot of, these

were accurate, but they could have included more.

THE COURT: Well, what I'm inclined to do is I'm going

to give the concealment definition, "The act of preventing

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disclosure or refraining from disclosing" as the answer.

I will also proceed to the 6.25 instruction with the

modifications I made. So we will reconvene in the ceremonial

courtroom at quarter to the hour.

While I have all parties here and on the record

relating to this afternoon's hearing, which is now delayed, I

have this Motion to Preclude from the government, and indeed

the motion relates to AUSA Stone and Boyle. And quite frankly,

I was shocked to see their names listed on a defense witness

list. Understanding that there's rules and obligations that

anybody who calls an Assistant U.S. Attorney to testify, these

are frankly officers of the court. There's not a necessity to

list them on a witness list. The Court can question them as it

does in all matters and proceedings. What they say on the

record is an avowal to the Court, and so I frankly don't even

see the necessity to having filed this motion. It should never

have had to happen.

In any event, they will, in the hearing this

afternoon, answer a couple of questions from myself, and so I

actually will deny the motion as moot in my point.

And so we will reconvene in the ceremonial courtroom

and then we will come back here and at least try to begin the

proceedings. It's going to take some reorganization. We'll

bring the jury up.

MS. BERTRAND: To instruct them on 6.25?

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THE COURT: Yes, as well as provide them -- yes.

MS. BERTRAND: So we stay here?

THE COURT: Yes.

(Recess was taken at 3:25 p.m.)

(Proceedings reconvened at 3:41 p.m.)

THE COURT: Please be seated. And let's bring in the

jury.

(Jury is present)

THE COURT: All right. Please be seated. Members of

the jury, I welcome you to what is my courtroom.

You have reported that you have been unable to reach a

unanimous verdict on one or more counts in this case. I've

decided to suggest a few additional thoughts to you:

As jurors, you have a duty to discuss the case with

one another and to deliberate in an effort to reach a unanimous

verdict if each of you can do so without violating your

individual judgement and conscience. Each of you must decide

the case for yourself, but only after you consider the evidence

impartially with your fellow jurors. During your

deliberations, you should not hesitate to re-examine your own

views and change your opinion if you become persuaded that it

is wrong. You should not, however, change an honest belief as

to the weight or effect solely because of the opinions of your

fellow jurors or for the mere purpose of returning a verdict on

one or more counts.

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I also remind you that in your deliberations you are

to consider the instructions that I have given you as a whole.

You should not single out any part of any instruction,

including this one, and ignore others. They are all equally

important.

What I have just said is not meant to rush you or to

pressure you into agreeing on a verdict. Take as much time as

you need to discuss things. There is no hurry.

I ask that you now return to the jury room and

continue your deliberations with these additional comments in

mind.

Please all rise for the jury. Christine will escort

you back.

(Jury is not present.)

THE COURT: Please be seated.

MR. LINCENBERG: Your Honor, can I comment on the

instruction that the court just gave?

THE COURT: Yes.

MR. LINCENBERG: I thought Mr. Berry had noted that

the Court suggested instruction had been modified in 2023, and

I thought the Court was going to give the current instruction.

The Court included in what the Court stated to the jury the

part about what I have said is not meant to rush you. And

unless I'm wrong, maybe I'm wrong, I thought that was in the

old instruction.

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THE COURT: I read 6.25 as it is revised with the

modification of --

MR. LINCENBERG: Okay.

THE COURT: -- one or more counts.

MR. LINCENBERG: Sorry. You're correct.

THE COURT: All right. Now, let's proceed to the

hearing. And I, in my view -- and I will put on the record

that Christine will be delivering the definition of

"concealment" to the jury -- this is a very narrow focused

hearing.

The question before the Court is whether or not the

information that was provided to defense counsel last week,

what we listed as Exhibit A, whether it's Jencks material. And

so what I want is some information or testimony about whether

or not this falls under the definition of definition of

statement under Jencks, and a statement by a testifying

witness, and the only individuals that are contemplated here

are Quoc Thai and Carl Ferrer.

Second, whether it was adopted or approved by

Quoc Thai as an agent of the government. I think there is a

subquestion about whether or not it was intended as a final

report. Did Quoc Thai rely on this document, Exhibit A, and

what's included in it, for his testimony? And I also want to

understand whether there are portions of it or background

material from which it is derived that was given over in

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discovery. It's a very narrow inquiry. And I am going to

confine counsel to those points because that's the only

question before the Court.

The other question along those lines is whether or not

it constitutes Brady or Giglio material. So I want some

testimony or examination about whether or not the information

in here is exculpatory or favorable, and I want pincites to the

pages where you think it's favorable information, or whether

it's impeachment material. There was some indication that

there was potential impeachment.

Certainly I'm going to look at, and I've already been

told about how the production was made, but I will certainly

examine whether or not this was a willful suppression, or if it

was, or portions of it or background from it, has been produced

as the government indicated last week.

But really what I want to know in this analysis

regarding Brady is what part of it is exculpatory? What part

of it is favorable? And so that's how I intend to proceed. I

certainly am interested because on the second page of this

exhibit, the communication by Mr. Quoc Thai in the second line

it says, "I wanted to share with you the latest draft of the

tracing document that Lyndon and I put together years ago."

So there's an inference that he had a hand in creating

the document. So I want to know whether or not, therefore,

it's an adoption by him of what's in the document. And I also

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am interested in the qualifier "years ago." How has the

document changed, if it's changed? And so those are the

questions that I'm interested in.

There's a reference in the defendants' motion

regarding Prosperity Bank account, and there's an indication

about Posting Solutions LLC. I'm interested, Mr. Stone, in

where that was in the testimony, how that came about, and so

that's how we will proceed. And so really the question is, I

think, because Mr. Quoc Thai was the testifying agent, I need

to hear from him, his involvement in the development of this,

whether he adopted it and whether he relied on it in his

testimony.

MR. STONE: Here's what I would recommend, Your Honor:

Mr. Thai is here. I recommend, even though it's the

defendants' motion, we would put Quoc Thai on first and examine

him in the areas that you suggest, and so we would do that and

then, of course, the defense could cross-examine him.

MR. LINCENBERG: We disagree. This is our motion. We

are the movant. We should be able to examine Mr. Thai first,

Your Honor.

THE COURT: Well, it's an inquiry that's now in the

Court's hands, and I think procedurally it makes sense to lay

that foundation first and then you can examine him, and so

that's how we will proceed.

MR. STONE: Other thing, Your Honor, I just want to be

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clear on this, really the most important exhibit that we

attached yesterday was Exhibit 8. I don't know if Your Honor

has had an opportunity to go through it.

THE COURT: I have not. I have not go through all of

these exhibits.

MR. STONE: It's a lot of papers and it's about

26 hours ago that it was filed.

THE COURT: It's a small tree is what it is. All

right. I have Exhibit 8 before me, and you may --

MR. STONE: So Exhibit 8, I think, really goes, well,

Exhibit 8 is most important for all of these because it goes to

prejudice, but it certainly goes to Brady and Giglio. On the

left column, Your Honor, are all of the paragraphs that were

included in the document that was produced, the document that

was attached to Quoc Thai's e-mail on October 23rd. On the

right is language from previously-disclosed documents of which

we attached three. Two of them are civil seizure, I'm sorry,

seizure affidavits that were signed by Lyndon Versoza. One of

them was the, sorry, the civil seizure complaint out of CDC A

that was filed in 2020, and which the defense attorneys for the

who represent the money laundering count defendants here have

appeared.

And we went through paragraph by paragraph to show

that the information that was disclosed on that document that

was attached to Mr. Thai's e-mail has already been produced in

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many instances verbatim. And so this is -- and it was produced

in discovery with respect to the affidavits, and complaint, of

course, was filed on the public record. So this goes through

the entire document, and I would say all of the Brady

allegations in defense's motion are included here and are

almost word for word included in something that's already been

disclosed. So there is no Brady and no Giglio violations

because all of this information was previously disclosed.

Then --

THE COURT: Let me ask Mr. Lincenberg, who seems to be

the person who is leading the counsel on this, have you

received Exhibit 8?

MR. LINCENBERG: Yes, we have, Your Honor.

THE COURT: Have you examined it closely with regard

to the discovery that was produced?

MR. LINCENBERG: Somewhat. It's lengthy. There is a

lot of back and forth. I certainly looked at it with respect

to, for example, the parts involving Mr. Brunst. We think

Exhibit 8 is irrelevant to the point.

THE COURT: Well, then why are we here?

MR. LINCENBERG: We're here -- what do you mean why

we're here? Exhibit 8 --

THE COURT: Did you say -- sorry, there is an 8?

MR. LINCENBERG: Exhibit 8. What Mr. Stone just noted

as Exhibit 8 is irrelevant. Mr. Stone's point is to say, hey,

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you guys --

THE COURT: You can make your summation argument.

MR. LINCENBERG: Just responding to his argument.

THE COURT: Well, you can make it in summation. I am

more interested in the time, and we have a witness, and I can

continue your summation for tomorrow, but I was just inquiring

whether or not you saw Exhibit 8.

MR. LINCENBERG: Yes, I did.

THE COURT: All right. Let's bring the witness in.

All right. Mr. Quoc Thai, for the necessity of this

hearing, I'm going to have you sworn in. Please come forward

and be sworn.

QUOC THAI,

(Witness Sworn.)

THE COURT: Mr. Stone, you may proceed when ready.

MR. STONE: Liliana, am I connected here?

DIRECT EXAMINATION

BY MR. STONE:

Q. Good afternoon, sir.

A. Good afternoon.

Q. Do you remember sending an e-mail on October 23rd, 2023

that relates to this case?

A. Yes.

Q. In that e-mail you attached a document?

A. Yes.

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Q. Are you familiar with that document?

A. Yes.

Q. How are you familiar with it?

A. It was a document that Inspector Versoza produced and, you

know, wrote, and I assisted.

Q. Okay. You said you assisted, what does that mean?

A. I helped formulate -- adjust some formatting, basically

cosmetic changes.

Q. What do you mean by "formatting"?

A. Oh, I helped to put together a table of contents and adjust

some of the indentations and margins and stuff.

Q. Did you write any of that document?

A. No.

Q. Do you understand what the purpose of that document was?

A. I do.

Q. What was it?

A. To identify the assets for asset forfeiture.

Q. Do you know if that document was a final product?

A. It was not a final product.

Q. What do you mean?

A. It was a draft of the ongoing work that was being done by

Inspector Versoza.

MR. STONE: Liliana, could you try?

COURTROOM DEPUTY: Yes.

BY MR. STONE:

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Q. All right. And you just testified that the document wasn't

a final product?

A. That's right.

MR. LINCENBERG: Your Honor, we've marked this

document as Exhibit 6267 for purposes of this hearing and a

potential forfeiture trial. If we want, we can refer to it by

that number.

MR. STONE: We marked it as well. I haven't gotten to

that yet.

THE COURT: And I marked it as the original Exhibit A.

I think we will adopt my Exhibit A. It's easier to refer to.

But thank you for the notation as to your exhibit number.

MR. STONE: Liliana, could you take it off? Could you

take it off?

Liliana, you can put that back on.

BY MR. STONE:

Q. Okay. It wasn't a final document, and what was -- what was

it for?

A. It was just meant to be a sort of repository of our

information and our tracing work relating to the assets.

Q. Do you have an understanding for what Inspector Versoza was

going to use the document for?

A. It was the basis for some of his seizure warrants for the

assets.

Q. You have this draft in your possession, the draft meaning

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this Exhibit A, is it in your possession?

A. Yes.

Q. We're looking at an e-mail that we marked for

identification as Exhibit 4, and this is the e-mail that you

were testifying to earlier?

A. Yes.

Q. You wrote, "but I wanted to share with you the latest draft

of the tracing document that Lyndon and I put together years

ago," do you see that?

A. Yeah.

Q. What does that mean?

A. It was just -- when I say "put together," I mean Lyndon

wrote it and I helped to format it, and so we collaborated in

that way, but it was a document that was written in the past by

Lyndon and I helped to organize it.

Q. And "organize it" means what?

A. Just to make sure that, you know, all the -- it was

basically to put together the table of contents, which is, you

know, cosmetic in nature.

Q. And so organize, but through a table of comments to make it

easier for use?

A. Yeah, easier to access, easier to review.

Q. Do you have in your possession different versions of this

document?

A. I do, yeah.

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Q. Do you have an understanding of how many versions you have?

A. I think about seven or eight.

Q. This one that's attached, is this the latest version, is

this the last version that you have in your possession?

A. This is the last version I have in my possession.

Q. Do you have an understanding that Inspector Versoza may

have versions as well?

A. I think he does, yeah.

Q. And you also sent an e-mail to the prosecution attaching an

earlier version of this document in 2019; is that correct?

A. Yes, that's correct.

Q. And this is marked for identification as Exhibit 12, and

that's your e-mail down there?

A. It is, yes.

Q. "Hello Andrew. Jane, Lyndon and I previously put together

flow charts and notes for the seizure warrants."

Who is Lyndon?

A. Lyndon is Inspector Versoza.

Q. The inspector who wrote this document?

A. Yes.

Q. This draft?

A. Yes.

Q. Who is Jane?

A. Jane is an analyst at the JRIC, the Joint Regional

Intelligence Center.

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Q. Again, I think you used similar language, "put together,"

what does that mean?

A. You know, we collaborated in putting, like combining our

efforts to put together this document.

Q. And what was your role in putting it together?

A. My role was primarily just reviewing the documents for any

kind of grammatical issues and organizing the table of contents

and other things.

Q. You also wrote in this e-mail, "I thought those items would

be good to use as a basis for the summary charts," what do you

mean by summary charts?

A. Summary charts, my thinking was they would be future charts

used for trial and other things.

Q. And this is in 2019?

A. Yes.

Q. Do you have an understanding -- what was your role in the

investigation, in this investigation, compared to Inspector

Versoza's role?

A. Well, my role was focused on building out and proving up

the money laundering charges, charges 53 through 100.

Q. What about Inspector Versoza?

A. He was primarily focused on the asset forfeiture.

Q. This draft document that you attached, what did that refer

to or what did that relate to?

A. It was related to the asset forfeiture.

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Q. You write here, "but I wanted to format that material to

whatever you think would flow best," my question was, did you

actually use this draft document as a basis for the summary

charts?

A. No, I didn't.

Q. What did you use instead?

A. I went back and used the source material and built it up

from scratch, and then I identified the records I used and put

it into my own Master Table Excel spreadsheet.

Q. You see this spreadsheet I put on your screen, this is

identified as Exhibit 10a on the government's exhibit list?

A. Yes.

Q. What is this document?

A. This identifies the source documents and the sort of

underlying records that support all the flowcharts that I

created for the trial.

Q. Okay. This is a document you created?

A. Yes.

Q. And this is a document that Exhibit 10 reflects was

e-mailed to the defense counsel on February 11th, 2020. What

are we looking at? Just take us through what we are looking at

with this document, if you could?

A. Okay. So I wanted to organize everything as thoroughly as

I could, and so I initially started with the main tab, and that

tab identifies all the charges identified in the indictment,

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and then it identified the specific transactions. If I could

find a send and receive record for that transaction, and then

it identifies the file name that came in from the subpoena

records, and then the page number in which that specific item

was located and the type of item it was.

So for example, here with the BBT records, we find

that there's a signature card of Website Tech on page 1 and 2,

we have the bank statements which is, you know, a summary of

the bank records on pages 180, 181, and then we have the

specific item, which is the wire transfer on page 1274 of that

particular file.

I then subsequently identified the subpoena number

that I drew that file from, as well as the location of that

record on Relativity.

Q. And you did this for each money laundering count?

A. Yes, I did. I went back and for Counts 53 through 100 I

would batch the counts together and then further sort of

identified and supported all of the supporting transactions

that flowed through to the identified count.

Q. And then at the bottom here the counts are broken into

clumps?

A. Yes, that's right. That's right.

Q. And that has similar information in the spreadsheet?

A. Yes, that's right.

Q. And you used this spreadsheet as the basis to prepare your

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summary exhibits, which you testified at trial about; correct?

A. Yes, that's right.

Q. You testified that you didn't rely on Exhibit A, the draft

document for your trial testimony, why not?

A. It wasn't thorough enough for my purposes, and it just -- I

was focused on the money laundering charges, and that was kind

of an asset forfeiture document.

Q. And who was heading up the investigation in the asset

forfeiture?

A. Inspector Versoza.

Q. After your trial testimony in this trial several weeks ago,

did you begin to prep for asset your asset forfeiture

testimony, or your potential asset forfeiture testimony?

A. Yes, that's right.

Q. And when you sent that e-mail in October and attached the

draft asset forfeiture document, why did you -- why were you

referencing that at that time?

A. Because that was the most recent version that I had of that

document.

Q. And there's been -- we have talked about the e-mail you

sent in 2019 and the e-mail you sent in 2023, and those

attached different versions of the same document; is that

right?

A. Yes.

Q. And do you know if there were any changes that you made

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from the version that you had in 2019 to the version in 2023?

A. The only change that I made was a notation at the front

page of it that changed the date that said "latest version" and

the new date, which was a date in 2021.

Q. When did you do that?

A. Around November of 2021 after the first trial.

Q. After the mistrial?

A. Yeah.

Q. Why did you make that change from the version?

A. I was preparing to leave my work in the government and I

wanted to make sure that I notated to myself which version was

the latest version to reference back for myself in the event

that I would need to testify again.

Q. Did you make any changes between November 2021 and October

of 2023 to that document?

A. No. No.

Q. And did you rely on that when you were working to prepare

for your trial testimony?

A. No.

Q. Which document did you rely on?

A. This document here, my Master Table.

THE COURT: Was that Exhibit 10a, is that what that

is?

MR. STONE: Yes, Your Honor 10a, and I think we,

because it's too difficult to print out a spreadsheet, we have

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it on a CD.

THE COURT: Yes, I received it. Thank you.

BY MR. STONE:

Q. On Exhibit A, which was the draft document that you've

testified about, did you make any substantive changes to that

document?

A. No. No.

Q. Did you review all the language that Inspector Versoza put

in to ensure that it was all correct?

A. No. I just reviewed it for grammatical errors and any kind

of flow issues. I didn't go back into the record to review the

specific statements made in the record.

Q. So if there's some sort of misstatement in there, you

wouldn't have known about it?

A. No.

MR. STONE: That's all I have, Your Honor, unless Your

Honor has questions. I was hoping to address everything you

said at the beginning of the hearing.

EXAMINATION

BY THE COURT:

Q. I am -- if you know, because obviously there was another

individual involved, Mr. Versoza, in this e-mail communication

from you to Mr. Boyle and Mr. Stone is copied, I wanted just to

get clarification, it says, "but I wanted to share with you the

latest draft of the tracing document." When you say "the latest

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draft," what's your understanding of that time frame?

A. It was the -- I had previous drafts and it was my version

of the latest draft that I had. There, you know, there was a

universe of other drafts, and I just wanted to specifically

identify that that was the latest draft that I had.

MR. STONE: Could I ask a follow-up question, Your

Honor?

BY THE COURT:

Q. Yes. I am just curious about -- and that's, I guess, and I

will ask you this question, is that what you mean when you

referenced "that Lyndon and I put together years ago"?

A. Uh-huh. Yes, ma'am.

Q. If you know, do you know whether or not this what, we're

referring to as Exhibit A, what is called the Asset Tracing

Master Document Draft, was this -- was the content of it, to

your knowledge, if you know again, was it incorporated into any

other affidavits or warrants?

A. I don't know, Your Honor.

THE COURT: All right.

Yes, Mr. Stone, you had more.

CONTINUED DIRECT EXAMINATION

BY MR. STONE:

Q. You testified that you had sent this similar document to

prosecutors in 2019; correct?

A. Yes.

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Q. And the only difference between the version in 2019 and the

version you sent in 2023, I believe, was you just changed the

date; is that correct?

A. Yes, that's correct.

MR. STONE: Nothing further, Your Honor.

THE COURT: All right. I am assuming Mr. Lincenberg.

MR. LINCENBERG: Yes, Your Honor.

I was discussing with Mr. Stone because we heard from

the Court yesterday, we're working off of hard copies. If the

Court or Mr. Thai wants to view one of the exhibits on the

screen, I was suggesting if the government wanted to put it up,

we could do that, otherwise we'll work off the hard copies.

THE COURT: Does he have hard copies in front of him?

MR. LINCENBERG: We supplied the copies of our

exhibits, and I think that he should.

THE COURT: There are files before him.

MR. LINCENBERG: Okay. Hi, Mr. Thai.

CROSS-EXAMINATION

BY MR. LINCENBERG:

Q. Mr. Thai, you testified a moment ago that you sent the copy

of Exhibit A, the 2021 report, to Mr. Stone when you began

prepping for the asset forfeiture testimony; is that right?

A. That's right.

Q. So you understood that you would be given that testimony,

not Mr. Versoza; is that right?

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A. That's right.

Q. And did you understand that there was a relationship

between the money laundering counts and the asset forfeiture

claims?

A. I mean, yeah.

Q. Okay. And when you sent the report to Mr. Stone, you had

reviewed it; correct?

A. Yeah.

Q. And when you reviewed it, you believed that it was accurate

as far as you understood; correct?

A. I reviewed it, but I, you know, didn't review it deeply.

Q. And the goal was for you and Mr. Stone to be able to work

with each other in anticipation of further testimony, which you

would be giving, which would translate if there were

convictions on the forfeiture counts on the money laundering

counts into potential forfeitures; correct?

A. Yes.

Q. And when you mentioned that there was only one change from

the earlier versions, and as far as you understand, the

November 2021 report, which is Exhibit A for purposes of this

hearing, is the last final copy of that report; correct?

A. That's the last filed copy of the report that I have in my

possession.

Q. Okay. Did anybody ever at the time that you sent it to

Mr. Stone, did anybody ever correct you on that?

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A. No.

Q. Okay. And now, looking at the e-mails for a moment that

you sent over, so first you in 2019 sent an e-mail which I

believe the government has marked as Exhibit 12, the defense

has marked as 6270, so this is a 2019 e-mail, do you have it in

front of you? I will read from it. You should be okay, but if

you want to look at it, it's the government's Exhibit 12 there.

A. Twelve. Okay.

Q. So this is an e-mail that you sent to Mr. Stone in 2019

where you say, "Jane, Lyndon and I previously put together flow

charts and notes for the seizure warrants."

Do you see that?

A. Yes.

Q. Is that true that you had previously put together

flowcharts and notes for the seizure warrants?

A. Yes.

Q. And that related to the earlier version which sounds like

it's fairly identical to what's now Exhibit A; correct?

A. Yes.

Q. All right. And then in 2023 in what the government has

marked as -- well, I am not sure if they had a different note

on it. It may be part of Exhibit A. It's the e-mail

transmitting the report, you write to Mr. Stone, "I wanted to

share with you the latest draft of the tracing document that

Lyndon and I put together years ago."

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Do you see that?

A. I don't know which one it is, but I recall it, yes.

Q. All right. Well, we also had marked that.

MR. STONE: It's Exhibit 4.

MR. LINCENBERG: We also marked it as 6266. Do you

have those documents? Okay.

BY MR. LINCENBERG:

Q. And is that true what you wrote that this was a document

that you and Lyndon put together years ago?

A. Yes.

Q. Now, I want to take a look at -- well, let me go back and

focus on a couple of things that the Court was asking about.

First, sir, we've marked as 6269 a transcript of your trial

testimony, and you may or may not need to look along as I go

through a few points on it, but I want to make sure I have it

handy there.

So let me just ask as a general matter, sir, during

your testimony, do you recall testifying that you were the one

who identified key individuals and key accounts, and that you,

that you knew had funds that you were interested in

investigating?

A. Yes.

Q. All right. And that you were the one who was trying to

link those accounts through transactions across the various

accounts, do you recall that?

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A. Yes.

Q. And that you were the one who ran searches through the

various accounts; correct?

A. Yes.

Q. And that work you did, running searches through the various

accounts, is work that showed up in both the Exhibit A as well

as Exhibit 1479, which was your trial summary charts; right?

A. So that is incorrect. My work, when it came to running

searches, started after I worked on preparing the financial

documents received through subpoenas, I reorganized them

according to subpoenas, sent them through, and made sure that

they had 902(11) certifications. I then sent them up to

Relativity, reorganized them with regard to the, you know, like

the text capture.

Q. Right.

A. And from there I built up my Master Table. So that work

was separate from Mr. Versoza, Inspector Versoza's work, which

was primarily focused on asset forfeiture.

Q. I understand that, but the subpoenas and the documents that

you got from the subpoenas and looking at the different

transfers was work that made its way into both reports; right?

A. No. No, because Inspector Versoza and I started with

receiving the records from the various financial institutions.

Inspector Versoza had his own version, and then because I was

tasked with the job of certifying the 902(11)s, I copied and

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made sure that I had my version. And from that version I

reorganized it and I drew from the reorganized version that was

uploaded into Relativity. That allowed for me to reference it

in the Master Table and allowed for me to identify the Bates

number on Relativity, which I also identified on the table.

Q. Did you ensure that the work you were doing was consistent

with what was in Exhibit A?

A. What? Say again.

Q. Did you ensure that the work that you were doing in tracing

through the accounts was consistent with what was in Exhibit A,

which is the 2021 tracing of assets document?

A. No.

Q. Completely independent?

A. Independent.

Q. Okay. And so when you also testified that you were the one

who reviewed the financial records and made connections between

the various accounts and identified key financial transactions,

it's your testimony that there were two people who

independently did the same thing?

A. Yes.

Q. And were you working with Inspector Versoza during the time

period when the report was being prepared on those matters?

A. The report, are you referring to the Master Table or your

Exhibit A?

Q. Exhibit A.

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A. No. He -- at the time Inspector Versoza and Analyst Jane

Chung, they were -- they had been on the case for quite a few

months, and I was just transitioning in initially with

reviewing the bitcoin records, but in that -- at that time when

these, this Exhibit A was being produced, I was acquiring

records for them by, you know, they would identify accounts

that they needed. I would write the subpoenas, I would reach

out to the banks, serve up those subpoenas, acquire those

records, digitize them, and provide Inspector Versoza with

those records.

So Inspector Versoza was working on the asset

forfeiture matters separate from me at the time. You know,

later on as I was working on the, you know, the counts relating

to the money laundering charges, I did what I said earlier that

I did, which was absorbed the body of money laundering records,

then reorganized them, Bates stamped them, uploaded them. And

from that body, I reviewed -- so there were two separate bodies

of records. They come from the same source. But because I

reorganized them, I drew from my own because it was easier for

me to keep track of them.

Q. So why did you send to Mr. Stone last month a copy of the

Exhibit A in anticipation of your testimony?

A. Because it was the most convenient summary of financial

records relating to the asset forfeiture.

Q. All right. And the asset forfeiture was also related to

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the money laundering; right?

A. Yeah, I guess.

Q. And Exhibit A was a document that you had fully reviewed

and understood it to be accurate as best you knew; correct?

A. Well, see, that was a starting point for me.

Q. Let me just ask; is that correct?

A. So can you ask that again?

Q. Did you ever point out any errors to Inspector Versoza in

Exhibit A?

A. No, I didn't identify errors.

Q. Now, in -- let's take a look at Exhibit A. So in Exhibit A

on page 1, for example, it talks about tracing for Prosperity

Bank account, and in connection with the tracing for Prosperity

Bank account, first you see in the first paragraph it notes

that the president, CEO and sole signatory of the account was

Michael Gage, do you see that?

A. So let me just make sure. Your reference to Exhibit A is

my item number 12 on my records?

Q. It's --

A. Exhibit 12.

Q. It's what we're referring to as Exhibit A.

A. I want to stay --

Q. Government's Exhibit 5. Do you have that? It's also

defense 6267.

A. Give me a second. Exhibit 5, yes.

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Q. Okay. So focusing on -- let's focus on pages 1 and 2 for

the moment, tracing for Prosperity, and this was an account,

bank account involving for Posting Solutions; right?

A. Yes, it appears that way, yes.

Q. And it notes that M.G., Michael Gage, was the sole

signatory and president, do you see that?

A. Yeah, I see it.

Q. And that the Posting Solutions listed Backpage for the P.O.

Box application and listed the names of several of the Backpage

operators, including Ferrer, do you see that?

A. Yes.

Q. And then it talks about records of wire transfers from

countries outside of the U.S. deposited into that account;

right?

A. Yes.

Q. And so did you understand that there were actually foreign

wires being used to come into a Backpage affiliated entity,

Posting Solutions?

A. You know, when I reviewed -- I separately reviewed the

Prosperity Bank account records and I did not focus on like

these international wires.

Q. Well, let me ask you, did you focus on paragraph four on

page 2 where it says, "A substantial percentage of outgoing

payments from Prosperity account '7188 are payments for the

operation of Backpage"?

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A. One of the things I was trying to tell you earlier was

that --

Q. Let me ask you if you focused on that?

A. No, I didn't.

Q. Do you recall testifying at trial that the Cereus

Properties account was used, appeared to be an entity used to

pay the various payroll expenses relating to Backpage, and I am

looking at what we have marked as 6269, page 136, the

transcript, but I can read it to you.

A. Sure.

Q. "Cereus Properties appears to be an entity used to pay the

various payroll expenses of the -- of the activity relating to

the Backpage.com."

A. Yeah.

Q. And in fact, you understood, because you had, in your

words, at least reviewed the Exhibit A that the -- that the

account that was being used to pay some of these Backpage

operating expenses was a Posting Solutions Prosperity account;

right?

A. Well, no, when it came to looking at the Cereus bank

accounts, I identified incoming transfers from Website Tech and

other similar spots and I noticed almost immediate outgoing

payments to the Backpage owners, and --

Q. You mean to the Cereus owners?

A. Well, to the defendants, yeah. And I thought its function

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seemed primarily as a payroll account. And so I didn't rely on

this at all. I concluded that based on just looking at the

financial records that that was functionally a payroll, you

know, entity.

Q. Well, payroll for Cereus maybe, but not for Backpage;

right?

A. Well, no, because like, you know, Website Tech money comes

in, Cereus money goes out. I think the records show that the

funds come from Backpage.com, so...

Q. Well, let me ask you this --

THE COURT: Well, let me stop you there,

Mr. Lincenberg. I want to remind you not to go too far afield.

The question before the Court is whether or not this is a

statement of the witness, whether it was adopted or approved by

him, whether it was material that he relied upon for his

testimony. And what I've seen in the last couple of questions

that you've asked related to the document, he's struggling to

answer because he's not the author and he didn't create it. So

I don't necessarily find that to be useful in my inquiry.

So if you would focus your questions related to the

Jencks question, that would be helpful.

MR. LINCENBERG: Sure, but his statements in his

e-mails is that he did co-create it. One of the things --

THE COURT: His statement under oath in testimony is

that he formatted it and he --

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MR. LINCENBERG: Right.

THE COURT: -- put some cosmetic changes to it.

That's what I'm basing my directive on.

MR. LINCENBERG: We understand that his testimony is

different from the e-mails, but one of the areas the Court

asked us to look into was relating to whether there's

exculpatory or favorable or impeachment materials, and so the

reason why I am going into this area is this is one area in

which a prior report we believe was, as he stated in his

e-mails, prepared by Mr. Thai and Mr. Versoza. But whether

it's that he prepared it, either way, he adopts it. He's

sending it to Mr. Stone for use in the forfeiture part of the

case.

THE COURT: Well, maybe --

MR. LINCENBERG: There is contradictory information in

here from his testimony at trial.

THE COURT: Well, maybe it's an issue of this is not

the appropriate witness to question about that. Because if

you're going about it in terms of the document that he didn't

prepare, that he only cosmetically did some work on, and that

he had not seen since November of whenever it was, 2021, I

don't think it's a good use of time to question this witness

with regard to what might be or may not be exculpatory

information in an exhibit that he didn't prepare, nor did he

rely upon. So perhaps this is a question of this is not the

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appropriate witness.

MR. LINCENBERG: The Court has apparently concluded

that he didn't prepare it. We accept his e-mails that he was

one of the people who prepared it, and we accept his testimony

that he reviewed it and found no mistakes in it and sent it

over to the prosecutor to use in helping to prepare his

testimony, and we think that makes it Jencks material.

I will, if the Court doesn't want me to go through

further differences between his testimony and the report to

show why this is important impeachment material and

exculpatory, I can pass and just argue that later.

THE COURT: Well, again, I am not foreclosing you from

bringing that forward. I don't think this is the appropriate

witness in which to do so with this exhibit, because of the --

and I will agree with you, Mr. Lincenberg, what I've heard so

far is that he didn't adopt this Exhibit A. He didn't rely

upon it in preparing for his testimony. He in fact is

unfamiliar with some of the paragraphs in here that you've

questioned him about that further bolsters his testimony under

oath that he didn't rely on it, nor did he prepare for it, and

there were apparently two individuals who were tasked with two

very distinct things.

While they may have some overlap, it appears that this

Mr. Versoza was doing his own investigation and doing his own

linkages separate and apart from Mr. Quoc Thai here.

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So I think if you wish to explore further, if there's

exculpatory material in here that is inconsistent with what was

in the record at trial, then I think you should probably call

somebody else.

MR. LINCENBERG: Well, one of the government's

argument as to why this is not Jencks material, and I looking

at page 9 of the government's brief, they say: Second, the

draft didn't relate to Mr. Thai's trial testimony. Did not

relate to the money laundering counts that he testified about

at trial.

And so what I did to prepare for this hearing, Your

Honor, in response, was to go through and find many parts of

Exhibit A which related to his trial testimony, and so it's

Mr. Thai who gave the trial testimony and it relates to that.

If the Court doesn't want me to use Mr. Thai, ask him the

questions which point out those differences, then that's --

then the Court can indicate as much, but that is something that

I was intending to do is go through why the government's

argument is incorrect through Mr. Thai's testimony about what

he testified to.

I'll give the Court just one example that's pretty

obvious. Take, for example, Count 100 --

THE COURT: Well, let's be very clear about what the

government said. You only took a portion of it, and I am

looking at page 9. "The document as evidenced by its use

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exclusively in supporting the seizure warrants and civil

forfeiture complaint did not relate to the money laundering

counts." That's a different sentence than what you just said,

so let's be very clear in terms of the record and the

pleadings.

MR. LINCENBERG: Well, the point that the Court added

doesn't change the statement that the draft -- that the

government is saying the draft didn't relate to Thai's trial

testimony, period. That's the first sentence. That's what I

quoted for the Court, and that is incorrect. And there's

numerous examples of Exhibit A relating to Mr. Thai's trial

testimony.

THE COURT: Well, you listed those examples, some of

them in your motion, but I will say this: That in my view it

blurs the lines. This is, of course, a money laundering

indictment. There are assets that are being traced for

potential seizure, but the question here is, again, I think we

all agree that all of this information was related to the

investigation that led to the charges in the superseding

indictment relating to money laundering, ultimately relating to

the complaints of seizing of assets.

However, here too, as Mr. Thai has just testified, he

did not rely on the information here. He relied on what they

call a master document that he provided and that he was shown.

And so that's, I guess that's to me the fine point.

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MR. LINCENBERG: Well, look, with all due respect to

Mr. Thai, if the Court seems to be reaching the conclusion

different from common sense, in my opinion, respectfully, and

different from what he puts in his e-mails --

THE COURT: Mr. Lincenberg, you try my patience on

numerous occasions. I have never, ever in my career on the

bench been told I defy common sense, and I take umbrage. And

your reputation goes beyond these four walls. You understand

that? And at some point I may ask Mr. Panchapakesan to take

over your representation as lead counsel or co-counsel.

And I ask for silence in the courtroom.

MR. CAMBRIA: I didn't say anything. I didn't say

anything.

THE COURT: You will demean yourself as a professional

in my courtroom. And I know you take umbrage with my rulings,

everyone does on both sides from time to time, but do not

disrespect the Court in that way. It's not becoming,

Mr. Lincenberg, of a person of your caliber in litigation.

MR. LINCENBERG: Your Honor, I do not mean any

disrespect to the Court, and I apologize for that. I am making

an argument on common sense as counsel to my client, that

common sense would suggest that when -- when IRS agents are

working up a case dealing with money laundering and forfeiture

and they are working together, and Mr. Thai is sending e-mails

accurately stating that this is a document we prepared

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together, and Mr. Thai is present as part of Ferrer interviews.

A lot of work went into this investigation. Respectfully, my

view is that as a matter of common sense, we know that they are

working together; they are sharing information; they are

relying on it; they are putting together reports. Mr. Thai is

sending over.

I apologize to the Court. This has been a vigorously

fought case. I know that the Court has not appreciated some of

my arguments and so forth, and I apologize for that, but I do

think I should be able to just make an argument of what I

believe common sense would show here, and that's all I'm trying

to do. I apologize for any disrespect that my comments have

shown to the Court.

THE COURT: Do you wish to question the witness

further?

MR. LINCENBERG: Yes. Before going further, if the

Court doesn't want me to be going through with this witness

further examples of inconsistencies between testimony in

Exhibit A, if the Court doesn't believe this is the appropriate

witness, then I won't pursue that further.

THE COURT: I don't find it to be a useful time

exercise. Again, the reasons being, this witness under oath

indicates he did not draft the document. He formatted it and

he did not rely on it in his testimony. He's going to struggle

to look at the paragraphs, as he's done a few moments ago, not

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understanding and not even knowing what those paragraphs are

about. It's not a valuable use of my time. It's not going to

aid in my decision.

So if you have another witness that you wish to pursue

this avenue of questioning, I would suggest we do that,

Mr. Lincenberg, and I can make time for you to do that

tomorrow.

MR. LINCENBERG: Okay. I think, Your Honor, I have

completed the examination of this witness. Thank you.

THE COURT: Who will be the witness that you would

call tomorrow?

MR. LINCENBERG: Well, I need to discuss it with

counsel. What we did is, I believe Mr. Cambria is going to

deal with Mr. Ferrer; Mr. Feder was going to deal with

Mr. Versoza, if we called him.

And so the Court's aware, we did not -- we put

Mr. Stone and Mr. Boyle on the witness list not because we

intended to call them, but because in light of the Court's

inquiry, and we were -- we weren't sure what the Court was

going to inquire about and we wanted to make sure that they

were in court so if the Court had questions for them. We did

not intend to put them under oath.

THE COURT: Well, I won't comment any further. I

think my fuse is at an end, but it really defies

professionalism when you can't pick up the phone or e-mail

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Mr. Stone and Mr. Boyle and say, "Hey, are you going to be

there," rather than putting them on a public witness list.

In any event, my chambers will be in contact with you.

I have a hearing tomorrow morning, I believe, at 9:30, and we

can resume after had hearing is complete. So I would just ask

counsel to be prepared, have your witnesses prepared to be here

at least by -- we will pick up at 11:00 tomorrow.

MR. STONE: For the record, we don't have any further

witnesses.

THE COURT: All right. Thank you.

Sir, you may step down.

MR. BERRY: Your Honor, could I ask if it would be

okay if I appeared telephonically tomorrow for any hearing or

questions from the jury? If it's inconvenient to the Court, I

understand. Obviously my colleagues are perfectly capable, but

I won't be here tomorrow. I'd like to attend in whatever

format the Court would allow.

THE COURT: We will try to find a Zoom link. My sense

is we'll be here in the morning and will be otherwise down in

the SPC.

MR. BERRY: Even if it's just the phone, whatever is

most convenient for the Court.

THE COURT: We will stand at recess.

MS. BERTRAND: 11:00 here tomorrow?

THE COURT: Yes.

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(Proceedings concluded at 4:48 p.m.)

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UNITED STATES DISTRICT COURT

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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 15th day of November,

2023.

s/Hilda E. Lopez_______

HILDA E. LOPEZ, RMR, FCRR

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