EXHIBIT 1

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 1 of 17
 	


	
	


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Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 4 of 17
EXHIBIT 2

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 5 of 17
U.S. Department of Justice

United States Attorney

District of Arizona

Mike Piccarreta, Esq.

Piccarreta Davis Keenan Fidel PC

2 East Congress Street, Suite 1000

Tucson, AZ 85701

VIA EMAIL

Re: Your Letter of May 1, 2018

Dear Mike:

I wish to respond to a letter you sent on May 1, 2018, requesting the production of 

certain categories of documents. As an initial matter, and as discussed during our May 4 

meeting, the relevance of the materials you are requesting is unclear. The motion pending 

before the Court seeks to determine whether the DWT and HCM law firms have a conflict of 

interest. The materials you have requested do not, in many instances, have any apparent 

connection to that topic. We are happy to provide additional consideration to your request if 

you can articulate why they might be subject to discovery under the relevant rules of criminal 

discovery.

I would further note that it appears, based on the nature of your requests, that you 

believe it was improper for the United States to enter into a cooperation-based plea agreement 

with Mr. Ferrer because he was a member of a joint defense agreement (“JDA”) and/or you 

suspect the United States has improperly obtained JDA-protected information from Mr. Ferrer. 

Through this letter, I wish to explain why neither premise is valid. 

The courts have recognized that a JDA participant must retain the ability to plead guilty 

and cooperate and that the government has a strong, legitimate interest in considering such 

requests. For example, in United States v. LeCroy, 348 F. Supp. 2d 375 (E.D. Pa. 2005), the 

court recognized that “[a] JDA is not an escape-proof prison” and that “the right of the grand 

jury to get the facts, and the right of [a JDA participant] to decide to cooperate with the grand 

jury, are paramount.” Id. at 382, 386. The courts have further recognized that a JDA 

participant is free to disclose liability-generating matters in which he personally participated, 

even if those matters are also the subject of JDA-related sharing and discussion. See, e.g., In 

re Grand Jury Subpoena, 274 F.3d 563, 572 (1st Cir. 2001) (“[W]hat the parties call a ‘joint 

Two Renaissance Square Main: (602) 514-7500

40 N. Central Ave., Suite 1800 Main Fax: (602) 514-7693

Phoenix, AZ 85004-4408 Direct Fax: (602) 514-7450

May 14, 2018

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 6 of 17
May 14, 2018

Page 2 of 4

defense’ privilege is more aptly termed the ‘common interest’ rule. Even when that rule 

applies, however, a party always remains free to disclose his own communication.”); United 

States v. Balsiger, 2013 WL 3490873, *11 (E.D. Wisc. 2013) (“Balsiger and Currey cannot 

stop . . . another person . . . from waiving its privilege as to its own communications simply 

because the communication was shared with them or their counsel as part of the joint 

defense.”); United States v. Bekaert Steel Wire Corp., 1985 WL 25747, *3 (D. Md. 1985) 

(rejecting JDA-related claim where cooperator “Neri was not called before the grand jury to 

answer questions about what he may have learned through defense counsel; he was called to 

testify about events in which he had actively participated. . . . Neri participated in several 

meetings and had an ongoing relationship with the principals in the case for several years. It 

was that information that the government sought, not the substance of any communications 

between counsel.”).

For these reasons, the courts have stated that, when engaging in cooperation-related 

discussions with a JDA participant, the government should simply take reasonable steps to 

prevent the receipt of any JDA-protected information. See, e.g., United States v. Salvagno, 

306 F. Supp. 2d 258, 272-73 (N.D.N.Y. 2004). Here, the United States has taken extensive 

efforts to do so. The United States’ first meeting with Mr. Ferrer did not take place until the 

morning of April 5, 2018. The proffer agreement (enclosed as Exhibit A) specifically stated 

that Mr. Ferrer should not discuss JDA-protected material, this instruction was reiterated on 

several occasions during the proffer, and Mr. Ferrer’s attorneys have confirmed that no such 

material was discussed on April 5. The requirement not to disclose any JDA-protected 

material was also reiterated in the cooperation addendum to Mr. Ferrer’s plea agreement 

(which is currently under seal but will be produced to you in the future), and Mr. Ferrer’s 

counsel have confirmed that no JDA-protected material has been discussed during Mr. Ferrer’s 

subsequent interviews by the government. Finally, the government also has not received a 

copy of the actual JDA or any other common interest agreement (we have avoided doing so, 

in an abundance of caution, precisely because we wish to avoid any grey areas). 

Furthermore, even if (contrary to the government’s best efforts) Mr. Ferrer had 

somehow disclosed JDA-protected information during his discussions with the government, 

the timing of his proffer undermines any claim of prejudice. As noted, the United States did 

not meet with Mr. Ferrer, or receive a proffer of information from Mr. Ferrer’s counsel, until 

April 5, 2018. As a result, no information from Mr. Ferrer was used to obtain the March 28, 

2018 indictment or obtain any of the search warrants in this case. Moreover, as you know 

from our extensive “reverse proffer” to you in December 2017, the theory underlying the 

indictment has long been transparent. 

Courts have concluded that when (as here) the government establishes that it has taken 

steps to avoid the disclosure of JDA-protected information, the cooperator’s counsel has 

averred that no such disclosure has occurred, and the defendant merely suspects 

(notwithstanding those avowals) that he was prejudiced by an improper disclosure, there is no 

entitlement to an evidentiary hearing. See, e.g., United States v. Aulicino, 44 F.3d 1102, 1117 

(2d Cir. 1995) (affirming district court’s denial of evidentiary hearing, where defendants 

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 7 of 17
May 14, 2018

Page 3 of 4

alleged that government had obtained JDA-protected information from a cooperator, because 

the “government presented evidence of the steps it took to insulate the [prosecutors] from any 

knowledge gained by [the cooperating witness] from his contact with the codefendants after 

he agreed to cooperate” and the defendants “did not present any evidence to suggest that [the 

cooperating witness] revealed any privileged information to the government”); Salvagno, 306 

F. Supp. 2d at 272 (“[T]he court denies defendants’ motion requesting an order directing an 

evidentiary hearing. Defendants have failed to allege specific facts that indicate 

communication of privileged information to the Government and prejudice resulting 

therefrom. Moreover, the government avers that it neither sought nor accepted any [such] 

information.”); United States v. Anderson, 288 F.3d 335, 338 (7th Cir. 2002) (affirming denial 

of evidentiary hearing, where defendant alleged that cooperators shared privileged information 

with the prosecution, because the defendant had “not alleged with sufficient detail, 

definitiveness, or specificity” the privileged matters that were allegedly disclosed).

Finally, to the extent your letter reflects a belief that the government’s decision to file 

the disqualification motion was somehow improper, that belief is incorrect. The potential 

conflict-of-interest issues in this case did not even come to my attention until April 8, during 

a phone call with Mr. Larkin’s former attorneys (who simply inquired if the government had 

any concerns about the anticipated representation arrangements in the case). We did not 

initially recognize the seriousness of those issues, as evidenced by the fact that the government 

did not object when the HCM firm represented Mr. Lacey during various hearings on the week 

of April 9-13 or when various DWT lawyers filed notices of appearance during the week of 

April 9-13.

Once the conflict-of-interest issues became more apparent to us, we conducted legal 

research. This research confirmed that the DWT and HCM firms were, in fact, laboring under 

deep conflicts of interest. Nevertheless, due to the sensitivity of the issues, we sought to 

engage in a meet-and-confer process before filing anything with the Court. Among other 

things, we mentioned our concerns to Mr. Cambria and Ms. Henze Cook during a phone call 

on April 23, sent an email to Mr. Cambria and Ms. Henze Cook on April 24 identifying the 

various cases and ethical rules supporting our concerns, and participated in a conference call 

with you and other members of the defense team on April 25. During this call, we specifically 

asked if there were any written agreements in which Mr. Ferrer had agreed to waive the DWT 

and HCM firms’ conflicts of interests so they could represent Messrs. Lacey and Larkin. None 

were mentioned. 

The case law makes clear that prosecutors should bring conflict-of-interest issues to the 

Court’s attention as soon as they become apparent, and courts have faulted prosecutors (and 

reversed convictions) for failing to do so or waiting to do so until the eve of trial. See, e.g.,

United States v. Iorizzo, 786 F.2d 52, 59 (2d Cir. 1986) (“We add a final note. The reversal 

here is the direct result of the prosecution’s using defense counsel’s conflict of interest as a 

means of affecting the evidence going before the jury instead of moving for his disqualification 

before the trial. . . . We trust that this decision will ensure that a pretrial disposition of such 

issues will occur in the future.”); United States v. Henke, 222 F.3d 633, 638 (9th Cir. 2000). 

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 8 of 17
May 14, 2018

Page 4 of 4

That is simply what we have done here. Indeed, before filing the motion, the United States 

consulted with Mr. Ferrer’s counsel, primarily to confirm that the factual representations 

contained in the motion were accurate. During these discussions, Mr. Ferrer’s counsel stated 

that Mr. Ferrer did not wish to be a party to the motion. As a result, the United States filed the 

motion on its own behalf, in the interest of protecting the integrity of the trial. See, e.g., United 

States v. Kight, 2017 WL 4619024, *13 n.19 (N.D. Ga. 2017) (“[T]he Court rejects Kight’s 

argument that the Government, without Lankford’s permission, is precluded from seeking 

Armstrong’s disqualification or that Lankford was required to join in the Government’s 

Motion.”); United States v. Culp, 934 F. Supp. 394, 399 (M.D. Fla. 1996) (granting 

government’s disqualification motion and stating that defense counsel’s “argument that the 

Government lacks standing to raise the issue of a potential conflict gives short shrift to the 

respective interests of the Government and the Court in ensuring that judgments remain intact 

on appeal. . . . [Counsel’s] challenges to the Government’s standing betray a conception of 

the interests at stake in this motion which is both unduly narrow and overly simplistic.”).

KMR/zs

Sincerely,

ELIZABETH A. STRANGE

First Assistant United States Attorney 

District of Arizona

/s Kevin Rapp

KEVIN M. RAPP

Assistant U.S. Attorney

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 9 of 17
EXHIBIT A

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 10 of 17
Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 11 of 17
Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 12 of 17
Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 13 of 17
EXHIBIT 3

Case 2:18-cr-00422-DJH Document 176-1 Filed 06/06/18 Page 14 of 17