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UNITED STATES DISTRICT COURT

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UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

_________________

United States of America, )

) No. 2:18-cr-00422-01-SPL

Plaintiff, )

)

vs. ) Phoenix, Arizona

) April 30, 2018

Michael Lacey, et al., ) 9:05 a.m.

)

Defendant. )

_____________________________ )

BEFORE: THE HONORABLE STEVEN P. LOGAN, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS

STATUS CONFERENCE

Official Court Reporter:

Robin G. Bobbie, RMR, CRR, FCRR

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

401 West Washington Street, SPC 37

Phoenix, Arizona 85003-2151

(602) 322-7248

Proceedings Reported by Stenographic Court Reporter

Transcript Prepared by Computer-Aided Transcription

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UNITED STATES DISTRICT COURT

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A P P E A R A N C E S

For the Plaintiff:

US ATTORNEY'S OFFICE - PHOENIX

By: Kevin M. Rapp, Esq.

Reginald E. Jones, Esq.

Margaret Wu Perlmeter, Esq.

Dominic W. Lanza, Esq.

40 N. Central Ave., Ste. 1800

Phoenix, AZ 85004

For the Defendant Lacey:

LIPTSITZ GREEN SCIME CAMBRIA, LLP

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

42 Delaware Ave., Ste. 120

Buffalo, NY 14202

HENZE, COOK, MURPHY, PLLC

By: Thomas Henze, Esq.

Janey Henze Cook, Esq.

4645 N. 32nd St., Ste. 150

Phoenix, AZ 85018

For the Defendant Larkin:

BIENERT, MILLER & KATZMAN, PLC

By: Thomas Bienert, Jr., Esq.

903 Calle Amanecer, Ste. 350

San Clemente, CA 92673

For the Defendant Spear:

FEDER LAW OFFICE, PA

By: Bruce S. Feder, Esq.

2930 E. Camelback Rd., Ste. 160

Phoenix, AZ 85016

For the Defendant Brunst:

KIMERER & DERRICK, PC

By: Michael D. Kimerer, Esq.

1313 E. Osborn Rd., Ste. 100

Phoenix, AZ 85014

For the Defendant Hyer:

BROWNE, GEORGE, ROSS, LLP

By: KC Maxwell, Esq.

101 California Street, Ste. 1225

San Francisco, CA 94111

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UNITED STATES DISTRICT COURT

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A P P E A R A N C E S (cont.)

For the Defendant Padilla:

PICCARRETA, DAVIS, KEENAN, FIDEL, PC

By: Michael L. Piccarreta, Esq.

2 E. Congress St., Ste. 100

Tucson, AZ 85701

For the Defendant Joye Vaught:

KARP & WEISS, PC

By: Stephen M. Weiss, Esq.

3060 N. Swan Rd.

Tucson, AZ 85712

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09:05:45

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UNITED STATES DISTRICT COURT

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P R O C E E D I N G S

(Proceedings begin, 9:05 a.m.)

COURTROOM DEPUTY: This is case number CR18-422,

United States of America v. Michael Lacey, et al., on for

status conference.

Counsel, please announce for the record.

MR. RAPP: Good morning. Kevin Rapp, Reginald Jones,

Peg Perlmeter, and Dominic Lanza, on behalf of the United

States.

THE COURT: Good morning to you all.

MR. CAMBRIA: Good morning, Your Honor. Paul Cambria

and Tom Henze and Janey Henze Cook on behalf of Mr. Lacey.

THE COURT: Good morning to you.

MR. BIENERT: Good morning, Your Honor.

THE COURT: I'm sorry. You need to speak into a

microphone, please.

MR. BIENERT: Good morning, Your Honor. My name is

Thomas Bienert appearing specially for defendant Larkin. I'm

in the process of being retained and will file our pro hac vice

papers, if not this afternoon, then tomorrow morning.

THE COURT: Thank you very much. Good morning to you.

MR. PICCARRETA: Hello, Judge. Mike Piccarreta on

behalf of Andrew Padilla, who is present, Your Honor.

THE COURT: I'm sorry. Who do you represent?

MR. PICCARRETA: Mr. Padilla.

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THE COURT: Good morning to you.

MR. WEISS: Good morning, Your Honor. Steve Weiss on

behalf of Joye Vaught.

THE COURT: Good morning.

MR. WEISS: She's present right here.

MR. KIMERER: Good morning, Your Honor. Michael

Kimerer on behalf of John Jed Brunst, and he is present, Your

Honor.

THE COURT: Good morning to you.

MR. FEDER: Bruce Feder for Scott Spear, who is also

present.

MS. MAXWELL: Good morning, Your Honor. KC Maxwell on

behalf of Daniel Hyer, who is present.

THE COURT: Good morning to you as well.

I have document number 121, which is the notice of

filing of parties' proposed scheduling order.

Mr. Rapp, I couldn't help but notice your initial

compliance with Rule 16 discovery is the 3rd of December, 2018.

How much discovery has already gone out?

MR. RAPP: Well, no discovery formally has gone out

from the United States.

THE COURT: Why is that?

MR. RAPP: Well, we are in the process of assimilating

the discovery. We're using a database by the name of

Relativity. The discovery is being imported into that

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UNITED STATES DISTRICT COURT

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platform. We are going to provide the defense a hard drive

that will have all of the discovery --

THE COURT: Mr. Rapp, the reason I ask the question,

this is, I believe, it's 87 -- 93 counts, and these folks have

been charged with some very, very serious crimes. And to sit

around waiting for a half a year to see the evidence that the

Government has, I don't understand that.

Can you make some initial disclosures to the defense?

MR. RAPP: Yes. We have, if you'll see the footnote,

within 60 days we will provide them bulk of the discovery that

is contained -- that we have in our possession.

THE COURT: And how many witnesses do you anticipate?

MR. RAPP: Somewhere between 50 and 70 witnesses, and

we believe the trial will take anywhere from four to six weeks.

THE COURT: Why so long?

MR. RAPP: Well, there's a lot of counts. There are a

number of victims that are detailed. There are certainly a

number of transactions. And so we believe that to give the

Court a best possible idea of how much the Court should carve

out of its very busy schedule, we think four to six weeks is --

is an appropriate range for the trial.

THE COURT: So it's very difficult for the defense to

answer a question if I pose a question about how much time they

need because, obviously, they don't have discovery.

MR. RAPP: Well, true. But they -- they know with

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UNITED STATES DISTRICT COURT

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some certainty what they can expect. Two of these defendants

have been charged in California with somewhat similar charges.

They received discovery there. It's, essentially, the same

discovery. There is a lot of public source information that's

--

THE COURT: Mr. Rapp, you don't believe that. This is

a 61-page indictment, and just because someone was charged in a

different jurisdiction, it doesn't mean that they have a pretty

good idea about what's going on in the current case.

What's the fastest you can get this discovery together

on this new platform that you have?

MR. RAPP: Well, we think that within 60-days we could

provide them anywhere from 7 million to 9 million documents,

and those fall into various categories.

THE COURT: Did you say 7 million to 9 million

documents or pages?

MR. RAPP: Well, I think that's pages.

THE COURT: Go ahead.

MR. RAPP: Well, we think that -- that we have already

had some discussions with the Justice Department computer

people that are assisting us with assimilating this discovery,

and we think that they can have the bulk of the discovery

within 60 days.

There is a category of discovery that is subject to a

filter team analysis, and I think that is why we believe the

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UNITED STATES DISTRICT COURT

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December, 2018, date is more appropriate because that discovery

will come to them in waves as it makes its way through the

filter team.

THE COURT: Proffer for me what this filter team is

all about. What are they trying to filter out?

MR. RAPP: Well, much of the discovery involves

e-mails and exchanges between the defendants. There are some

of those exchanges that will include attorneys that were

working on behalf of Backpage, and we want to make sure that

the exchanges between the defendants and these attorneys fall

within the attorney-client privilege. And so, therefore, we

have a filter team based in D.C. that is reviewing these

documents.

THE COURT: Are there any wiretaps in this case?

MR. RAPP: Say again, Judge.

THE COURT: Are there any wiretaps?

MR. RAPP: There are no wiretaps.

THE COURT: Thank you very much, Mr. Rapp.

When I look through document number 121, which is a

four-page document, I generally don't have any issues with any

of the proposed dates, and I thank the parties for meeting and

conferring. However, I do see that the trial is scheduled for

the 7th of October, 2019. And, Mr. Rapp, I know -- I've known

you for decades at this point, do you -- do you think that that

date is actually realistic in light of having, whatever I think

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UNITED STATES DISTRICT COURT

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you said, 7 to 9 million pages of discovery?

MR. RAPP: Well, it's a year and a half out. We think

it's realistic.

THE COURT: What do you think, Mr. Lanza? You have

some experience with this, and you'll be sitting up here soon

enough. What do you think about that?

MR. LANZA: Seems realistic, Your Honor. I know that

Mr. Rapp has worked really hard with the defense team to really

think about these issues, and everybody in good faith thinks

this is a fair date.

THE COURT: Is there any defense counsel that does not

think it's a fair date? I see that there's a footnote that the

defense believes it would be better to try the case on the 15th

of January, 2020. Who holds that position?

MR. PICCARRETA: I hold it. Mike --

THE COURT: What's your name, sir?

MR. PICCARRETA: Mike Piccarreta.

THE COURT: Sir, why do you believe January date is

more realistic?

MR. PICCARRETA: Well, it is clearly more realistic

because we have a schedule with certain dates --

THE COURT: Okay. First of all, somebody's phone is

going off.

Is that someone's client? Who was that?

MR. HENZE: That was Mr. Lacey, Your Honor.

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THE COURT: Okay. Can you make sure that your client

checks his phone and everyone -- well, sir, you don't need to

go out there. We usually have people escorted out of

courthouse when their electronic devices go off. It interferes

with our abilities to do our jobs up here, specifically the

court reporter. So if you can kindly let him know to read the

sign outside of the courtroom, that would be very, very

helpful.

Sir, my apologies for interrupting you. Go ahead.

MR. PICCARRETA: When we looked at this, it's without

the benefit of receiving the disclosure, and in particularly,

disclosure that is of particular interest are, obviously, the

302s, witness statements, the stuff that has tangible

information, in addition to all of the documents. It was, the

Court requested to give us a date, and so it was my view that

the earliest possible date was January. And the reason I

picked that is, perhaps I'm being optimistic, but I thought it

would be a good idea to have some period of time after we work

through this schedule to have the lawyers be able to manage the

case, simplify the case, and put it together for trial, because

it's a pretty breakneck pace. And I have found that a trial

that's set maybe --

THE COURT: How is this a breakneck pace? A year and

a half to try a case?

MR. PICCARRETA: Well, discovery is not a breakneck

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pace, but it's a breakneck pace when you start looking once

discovery comes. For example, after we get the Jencks, he have

90 days to provide our information, and that's -- that's a lot

in a big case where there's lots of documents, and getting

witness statements at that stage.

So, and as they indicated, there's going to be

somewhere 50 to 70 witnesses. I'm uncertain as to how many

witnesses we're going to have, but we have a lot of defendants.

The other wrinkle --

THE COURT: So the only issue that the defense has a

problem with is the trial date. Everything else is fine?

And are you the spokesperson for the other defense

counsels?

MR. PICCARRETA: Well --

THE COURT: I'm shocked that Mr. Feder is not taking

the lead, but go ahead.

MR. PICCARRETA: We'll let him.

THE COURT: If you're speaking for the rest of them,

go ahead.

MR. PICCARRETA: Well, I'm speaking for myself, but I

think they agree. And if someone has something different to

say --

THE COURT: Is there any defense counsel that

disagrees with that?

MR. CAMBRIA: No, Your Honor.

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THE COURT: If you disagree, that's fine. Just let me

know.

Go ahead, sir.

MR. PICCARRETA: There's a caveat. The Government has

indicated there may be a superseding indictment. A superseding

indictment may add information, and if that occurs, then we

have a footnote in here that we reserve the right to approach

you and explain to you the changed circumstances. Plus if

there are new people involved, I'm sure their counsel are going

to want additional time, so that's sort of the footnote there.

We are shooting for the January schedule, but there

are variables that we're simply just not aware of now. But I

think that's a, from what we know now, realistic date, but

circumstances may change after we review all the disclosure

witnesses, Your Honor.

THE COURT: Sir, I appreciate that. Mr. Lanza, is it

realistic that if the United States Government, and I know you

can't see into the future, but if you plan to supersede, will

it be in the next six months?

MR. LANZA: Yes, Your Honor.

THE COURT: That will give you plenty of time, plenty

of time. So what I'm going to do is I'm going to adopt

document number 121 and all of the dates. The only change will

be the trial, the firm trial, will be scheduled to start the

15th of January of 2020. Everything else will remain the same.

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Is there anything else from the United States

Government?

MR. RAPP: Judge, how would you like me to -- would

you like me to provide a Word document so that --

THE COURT: Yes.

MR. RAPP: -- with that date change?

THE COURT: Yes. All you need to do, since I'm

granting the -- well, there's no motion to grant, but I -- I

agree with the defense that a more realistic date will be

January of 2020.

Mr. Rapp, if you can just file an amended 121, I don't

know what the number will be, but just amended joint proposed

scheduling order with that one change, or I'm sure Miss

Perlmeter is probably doing all the work, if you can do that,

Miss Perlmeter, that would be very, very helpful. I really

appreciate that.

Is there anything from any defense counsel?

That's a negative response. The hearing is adjourned.

(Proceedings conclude, 9:18 a.m.)

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C E R T I F I C A T E

I, ROBIN G. BOBBIE, 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 2nd day of May, 2018.

s/Robin G. Bobbie

Robin G. Bobbie, RMR, CRR, FCRR

Case 2:18-cr-00422-DJH Document 137 Filed 05/02/18 Page 14 of 14