Spanier Govt Response Binder2

8/17/2019 Spanier Govt Response Binder2

1/154

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28

LAURA E. DUFFYUnited States AttorneyJOSEPH J.M. ORABONAAssistant U.S. Attorney

California Bar No. 223317Office of the U.S. Attorney880 Front Street, Room 6293San Diego, California 92101Tel: (619) 546-7951

Attorneys for the United States

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA,

Plaintiff,

v.

JEFFREY SPANIER,

Defendant.

Case No. 12CR0918-JM

RESPONSE IN OPPOSITION TODEFENDANT’S MOTION TO DISMISSTHE INDICTMENT WITH PREJUDICE

The Plaintiff, UNITED STATES OF AMERICA, by and through its counsel,

Laura E. Duffy, United States Attorney, and Joseph J.M. Orabona, Assistant United

States Attorney, hereby files its Response in Opposition to defendant JEFFREY

SPANIER’s (“Spanier’s”) Motion to Dismiss the Indictment with Prejudice, with the

attached Exhibits 1 through 11.1 This Response in Opposition is based upon the

accompanying memorandum of points and authorities, exhibits, Spanier’s Presentence

Report (“PSR”), and the files and records of this case. For all of the following reasons,

1 Exhibit 1 has been submitted with a motion to seal and order thereon.

Case 3:12-cr-00918-JM Document 446 Filed 04/25/16 Page 1 of 16


2/154

2

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28

Response in Opposition 12CR0918-JM

Spanier’s motion to dismiss with prejudice should be denied. The Court should dismiss

the indictment without prejudice.

I

PRELIMINARY STATEMENT This is a complex fraud case involving a stock-loan fraud scheme where the

victims suffered actual losses in excess of $80 million. The defendants were originally

indicted in March 2012. While it took defense counsel more than a year to prepare to try

this complex case, the jury was deadlocked on the charges against Spanier and a mistrial

was declared in May 2013. Because a retrial date was set beyond the 70-days provided in

the Speedy Trial Act without the requisite findings by the district court excluding time,

the Ninth Circuit held that the Speedy Trial Act was violated. The Ninth Circuit

remanded the case for another judge to determine whether the Superseding Indictment

should be dismissed with or without prejudice. In making this finding, this court will

examine the seriousness of the offense, the facts and circumstances that led to the

violation of the Speedy Trial Act, the impact on reprosecution, and whether there was any

prejudice to the defendant. The fraud charges are extremely serious in this case. The

facts and circumstances show that the delay was not the product of neglect or intentional

conduct by the government. The government did not seek the delay for the purpose of

securing an immunized witness. In fact, Spanier’s counsel contributed to the initial delay

in June 2013 and the further delay in August 2013. The impact on reprosecution is

favored in light of the public’s interest in justice and the victim’s interest in restitution.

Finally, Spanier’s contention that he has suffered financial hardship and other out-of-

court impacts on his life does not warrant a finding of prejudice. The record in this caseis well-preserved given two sets of trial transcripts and trial exhibits. As such, these

factors weigh in favor of dismissal without prejudice.

/ /

/ /

/ /



3/154

3

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


II

RELEVANT FACTUAL/PROCEDURAL BACKGROUND

A. Spanier Participated in an $80 Million Stock-Loan Fraud Scheme 2

As charged in the Superseding Indictment, Spanier participated in a massive fraudconspiracy, with co-defendants Douglas McClain (“McClain”) and James Miceli

(“Miceli”) 3 in which borrowers (executives or affiliates of publicly traded companies)

were fraudulently induced to pledge stock in return for loans. Their fraudulent scheme

resulted in a loss to the victim-borrowers in excess of $80 million. 4 In reliance on these

representations, borrowers entered into loan agreements with these lenders in which the

borrowers pledged stock they owned in publicly traded companies as collateral for loans

allegedly made by the lenders. Unbeknownst the victim-borrowers, the stock pledged as

collateral was sold and used to fund the victim’s loan or to fund other victims’ loans –

similar to a Ponzi scheme. There was no independent source of cash to fund these loans.

Spanier and his coconspirators profited substantially from their fraud by pocketing the

difference between the sale price of the stock and the amount funded for the loan to the

victim-borrower. During the term of the loans, Spanier would collect interest payments

from the victim-borrowers, which was used to pay expenses to continue the fraudulent

scheme. When a victim-borrower wanted to repay his loan and get his stock back,

Spanier falsely promised the borrower that he would soon return the victim’s stock.

Despite repeated requests, borrowers who repaid their loans never received their stock.

2 The United States incorporates by reference herein the transcripts of the jury trialheld from December 10, 2013 through December 20, 2013 herein [docket nos. 397-404.]

These facts are also supported by the allegations in the Second Superseding Indictment,incorporated herein by reference and attached as Gov. Ex. 2 to this response.

3 Tragically, co-defendant Miceli committed suicide in January 2013.

4 Co-defendant McClain was found to be responsible for restitution totaling$81,731,879.98. See Judgment for McClain [docket no. 276]. This was the intended lossattributed to the conspiracy. PSR 10.



4/154

4

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


Through companies that Spanier controlled, including a company he controlled

with Manuel Bello (“Bello”), he solicited victim-borrowers to pledge their stocks as

collateral for loans funded by other companies he controlled and a company controlled by

McClain and Miceli. Spanier pitched these victims by claiming they could borrowsubstantial cash by pledging their publicly traded stocks as collateral rather than selling

them on the open market. This option was attractive because it allowed the victims to

obtain much needed cash while retaining the right to receive their stock once their loans

were paid in full. Some of the victims were restricted from selling their shares due to

securities regulations.

Despite the fact that Spanier told the victims their stock would not be sold and that

he was merely earning a 5% fee, these representations were false. Spanier omitted the

fact that his fees far exceeded the 5% representation. Despite repeated lawsuits and

complaints from the victim-borrowers that their stock had been sold, Spanier continued to

solicit victim-borrowers and represent that the company controlled by Miceli and

McClain had substantial cash to lend. Spanier knew, or was at least willfully blind to the

fact, that the stock was being sold.

B. The Procedural History

On March 12, 2012, a federal grand jury in the Southern District of California

returned a 35-count indictment charging Spanier, McClain, and Miceli with conspiracy,

mail fraud, wire fraud and securities fraud. See docket no. 1. A motion hearing was

scheduled for April 23, 2012. See docket no. 24. The hearing was continued to June 18,

2012 to obtain a status regarding discovery. See docket no. 54. Another status hearing

was scheduled for September 24, 2012. See docket no. 63. At the next hearing, thedistrict court scheduled a jury trial for March 5, 2013 and excluded time under the

Speedy Trial Act finding the case to be complex. See docket no. 92; Def. Ex. A.

Arguing that the case was complex, with voluminous amounts of discovery, defense

counsel appeared for a status hearing on December 14, 2012 and requested that the trial

be continued after March 5, 2013. See Gov. Ex. 3. The district court denied the request.



5/154

5

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


See id. At the motion hearing on January 23, 2013, defense counsel had filed motions to

continue to the trial and again requested a continuance – claiming the case was complex

and that they would not be prepared to try the case on March 5, 2013. See Gov. Ex. 4.

The district court again denied the request to continue the trial and continued the motionhearing to January 29, 2013. See id. At this hearing, the district court was persuaded by

defense counsel for McClain and Spanier that they needed additional time to prepare and

continued the trial to May 14, 2013. See Gov. Ex. 5.

The jury trial commenced on May 14, 2013, and the government called more than

17 witnesses – many of whom were from overseas. See docket nos. 217-18. On May 31,

the jury returned verdicts against McClain and Spanier. See docket nos. 184-212. A

mistrial was declared as to Spanier. See docket no. 213. A retrial date was not set

because Spanier wanted to know the numerical divide of the jury – which would not be

known until the forfeiture proceeding concluded against McClain. See Def. Ex. B. A

status hearing was set for June 10, 2013. See id. The forfeiture proceeding against

McClain was held on June 4, 2013, and the jury found in favor of the Government. See

docket no. 216. In between the forfeiture proceeding and the status hearing, the

Government received allegations of juror misconduct and began an investigation. See

Gov. Ex. 6 and 8. Spanier’s counsel addressed the forfeiture and juror misconduct issues

at the June 2013 hearing. Gov. Ex. 6. The district court, with both parties’ concurrence,

set the retrial date – to accommodate Spanier’s counsel’s vacation – for October 8, 2013.

See id. Spanier’s counsel indicated he was filing a motion to address the juror

misconduct investigation and the court set a hearing in August 2013. See id. No such

motion concerning the juror misconduct was filed by Spanier. See Gov. Ex. 1; passimdocket in this case. The district court held a status hearing on August 19, 2013. Gov. Ex.

7. The court was inclined to continue the retrial date by two weeks. Id. The government

opposed, but Spanier’s counsel indicated he did not oppose in order to have a real

vacation. Id. The court reset the retrial date from October 2013 to December 2013.

Following the superseding indictment, Spanier filed a motion to dismiss for a Speedy



6/154

6

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


Trial Act violation on November 20, 2013. See docket no. 289. The court heard the

motion on December 2, 2013. Gov. Ex. 8. The court denied the motion and the case

proceeded to retrial on December 10, 2013. Spanier was convicted and was sentenced to

10 years in prison. He was ordered to pay more than $20 million in restitution to victims.Spanier appealed his case. Gov. Ex. 11. The Ninth Circuit held argument in

October 2015, and dismissed the case finding a violation of the Speedy Trial Act in

January 2016. See id. This court is to decide whether dismissal of the superseding

indictment should be with or without prejudice.

III

MEMORANDUM OF POINTS & AUTHORITIES

A. The Legal Standard

A violation of the Speedy Trial Act requires dismissal of the indictment upon the

defendant’s motion. 18 U.S.C. § 3162(a)(2). A district court “has broad discretion

whether to dismiss with or without prejudice” for violation of the Speedy Trial Act.

United States v. Jordan , 915 F.2d 563, 566 (9th Cir. 1990) (citation omitted). That

discretion is to be guided by the following factors in particular:

[1] the seriousness of the offense; [2] the facts and circumstances of the casewhich led to the dismissal; and [3] the impact of a reprosecution on theadministration of [the STA] and on the administration of justice.

Id . (quoting 18 U.S.C. § 3162(a)(2)). The Supreme Court has explained that Congress

intended “the presence or absence of prejudice to the defendant” to be a fourth factor

relevant to the determination. United States v. Taylor , 487 U.S. 326, 333-34 (1988).

B.

The Court Should Dismiss the IndictmentWithout

Prejudice 1. Seriousness of the Offense

Mail fraud, wire fraud, and securities fraud are serious offenses, especially in light

of the maximum sentences proscribed by Congress. See, e.g., United States v. Treadwell

593 F.3d 990, 1011 (9th Cir. 2010); United States v. Koerber , 813 F.3d 1262, 1274 n.19

(10th Cir. 2016); United States v. Howard , 218 F.3d 556, 561 (6th Cir. 2000); United



7/154

7

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


States v. Koory , 20 F.3d 844, 847 (8th Cir. 1994); United States v. McCrudden , 222 F.

Supp.2d 352, 355 (E.D.N.Y. 2002). Spanier was charged with 19 serious crimes. The

Superseding Indictment charged Spanier with: (1) one count of conspiracy to commit

mail fraud, wire fraud, and securities fraud – supported by 19 overt acts – in violation of18 U.S.C. § 371; (2) six counts of mail fraud in violation of 18 U.S.C. § 1341; (3) eleven

counts of wire fraud in violation of 18 U.S.C. § 1343; (4) one count of securities fraud in

violation of 15 U.S.C. §§ 78j(b) and 78ff; and (5) criminal forfeiture of property and

millions of dollars. Each count of mail fraud, wire fraud and securities fraud carries the

following maximum penalties: 20 years in prison, $250,000 fine, 3 years of supervised

release, criminal forfeiture, and mandatory restitution for the victims. The conspiracy

charge has maximum penalties of 5 years in prison, $250,000 fine, 3 years of supervised

release, criminal forfeiture, and mandatory restitution for the victims. The district court

sentenced Spanier to 10 years in prison and determined that restitution totaled

$20,669,379.98. See docket no. 369. In light of the number of serious offense charged,

the maximum penalties for each offense, the restitution ordered against Spanier

($20 million), and the sentence imposed (10 years in prison), this case is extremely

serious. To argue otherwise, as Spanier has done in his motion, is simply meritless.

The Sentencing Guidelines are instructive on measuring the seriousness of a fraud

case by the amount of loss. In particular, the Sentencing Commission has expressly

concluded that in the case of fraud, “loss serves as a measure of the seriousness of the

offense and the defendant’s relative culpability and is a principal factor in determining

the offense level under [USSG § 2B1.1 cmt. back’d.] The Ninth Circuit concurs with this

rationale. See Treadwell , 593 F.3d at 1011. Here, the intended loss suffered by thevictim-borrowers as a result of the conspiracy which Spanier participated exceeded $80

million – making this case extremely serious. PSR 10.

Spanier, without citation to a single case, argues that this was just an economic

crime and that it was not that serious. Def. Mot. 7-8. This argument is meritless in light

of the cases cited above. Moreover, this was not the run-of-the-mill fraud schemes – it



8/154

8

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


was sophisticated and complex. It involved the pledging of publicly traded securities in

exchange for loan agreements. The scheme extended over a 7-year period (2002-2009).

Even when Spanier was informed through lawsuits and complaints that the stock was

being sold, he endeavored to continue soliciting victim-borrowers and stealing theirmoney. Other courts have agreed that these types of complex fraud schemes are serious

crimes. See, e.g., United States v. Koerber , 813 F.3d 1262, 1274-75 (10th Cir. 2016). It

is the allegations in the indictment that factor into the seriousness of the offense; the

strength of the allegations or of the evidence against the defendant is irrelevant to this

factor. See 18 U.S.C. § 3162(a)(2); Koerber , 813 F.3d at 1275 (citing United States v.

Becerra , 435 F.3d 931, 936-37 (8th Cir. 2006)).

Spanier argues that the first jury struggled with issues which resulted in a mistrial

somehow diminishes the seriousness of the offense. Def. Mot. 8. Not true. The fact that

the jury in the first trial against Spanier was unable to reach a unanimous verdict does not

diminish the seriousness of the charges. See United States v. Thyfault , 2010 WL 2025376

(N.D. Ill. 2010) (unpublished).

Based on the foregoing, the offenses against Spanier were serious, and therefore,

this factor weighs in favor of dismissal without prejudice.

2. Facts and Circumstances Which Led to Dismissal

In analyzing this factor, the court may consider whether there was a demonstrably

lackadaisical attitude on the part of the government attorney in charge of the case or a

pattern of dilatory practices on the part of the government. Taylor , 487 U.S. at 338-39.

That did not happen in this case. The government attorneys were neither lackadaisical

nor dilatory about setting trial dates. For example, during the hearings in December andJanuary 2013, when the first trial was being set, the government repeatedly informed the

court that it was prepared to go to trial on the original date set – March 5, 2013. See Gov.

Ex. 3, 4, and 5. Moreover, when the mistrial was declared, there is no evidence in the

record that the government intentionally or in bad faith suggested a retrial date in

September 2013. See Def. Ex. B. In fact, the government attorney merely stated that she



9/154

9

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


was “thinking of a retrial date in September.” See id. at 241. Nevertheless, the Ninth

Circuit held that this mere suggestion of a retrial date beyond the 70-days warranted

dismissal. See Def. Ex. G.

But this does not end this court’s analysis of the complete facts and circumstancesthat led to dismissal. This court should also consider the reasons for the delay, defense

counsel’s own illicit contribution to the delay, and the length of the delay. See Bloate v.

United States, 559 U.S. 196 (2010); United States v. Fountain , 840 F.2d 509, 513 (7th

Cir. 1988); and United States v. Clymer , 25 F.3d 824 (9th Cir. 1994).

Here, the reasons for the delay were to accommodate defense counsel’s pre-paid

vacation and for counsel to file motions associated with the forfeiture and juror

misconduct issues. See Gov. Ex. 6 and 8. In addition, the trial transcripts had not yet

been prepared, and it is clear from the record that Spanier’s counsel had not yet

completed his review of the first trial transcripts by August 8, 2013. See Exhibit 1

(sealed). Lastly, the government and the district court did not consider the complexity of

the case to have dissipated with the close of the first trial. 5

Spanier’s counsel contends that the purpose of the delay was to secure Bello as a

witness. Def. Mot. 9. 6 This is simply untrue. The record reflects that Bello was

5 Spanier’s counsel relies on the September minute order. This reliance ismisplaced. He argues that the complexity of the case ended on January 23, 2013 becausethat is the minute order excluded time between September 24, 2012 and January 23, 2013on the basis of complexity. Def. Ex. A. However, the complexity of the case did notcease to exist after January 23, 2013. Spanier’s counsel contended that the case wascomplex (i.e., voluminous discovery; complex issues; witnesses from out of the country)

at the hearings in December 2012 and January 2013 when he was requesting that theoriginal trial date be continued. Gov. Ex. 3, 4, and 5. Had Spanier’s counsel believed thecase was no longer complex after January 23, 2013, there would have been no reason tocontinue the first trial from March 5, 2013 to May 14, 2013.

6 Contrary to Spanier’s contention, Bello was not a cooperating witness. He was awitness that required a grant of immunity before he would testify. This is an importantdistinction with a substantial difference.



10/154

10

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


identified as a witness in the first trial in May 2013. See Gov. Ex. 10 (witness no. 34).

Spanier was provided with the discovery well in advance of the second trial to enable him

to properly prepare his cross-examination of Bello without a need for a mid-trial recess.

Furthermore, Bello was one of many percipient witnesses in the case. See id. Eventhough Bello was not called to testify in the first trial, he was called to testify in the

second trial. Yet, Spanier has failed to identify how Bello’s testimony prejudiced him. In

fact, in Spanier’s closing argument, he argued that Bello “wouldn’t even say that he

conspired with Mr. Spanier or Mr. Spanier did anything wrong.” Gov. Ex. 11.

Spanier contends his case is similar to United States v. Hall , 181 F.3d 1057 (9th

Cir. 1999). However, Hall is inapplicable here. In Hall , the district court granted ends-

of-justice continuances to Hall’s co-defendant in order to allow him to negotiate a plea

agreement with the United States, which included testifying against Hall. Id. at 1060-64.

Since Hall was a co-defendant, his Speedy Trial clock was carried along with his co-

defendant while the plea negotiations were conducted. Id. at 1059-60. The Ninth Circuit

noted that the district court was on notice that Hall wished a speedy trial. Id. at 1063.

The Ninth Circuit noted that the district court should have severed the trial. Id. In

contrast, Bello was not co-defendant who carried Spanier along. Spanier never told the

district court that he wished a speedy trial (as discussed below). As such, this reason

does not weigh in favor of dismissal with prejudice.

The record is clear that Spanier did not assert his desire for a speedy trial. “A

defendant who waits passively while the time runs has less claim to dismissal with

prejudice than does a defendant who demands, but does not receive, prompt attention.”

Fountain , 840 F.2d at 513. The defendant’s own illicit contribution to the delay is aconsideration in analyzing this factor. See Bloate , 559 U.S. at 215 (citing Taylor , 487

U.S. at 343)). Here, Spanier’s counsel contributed to the delay by acquiescing and

agreeing to October 8 retrial date at the hearing in June 2013. Gov. Ex. 6 at 189. In fact,

Spanier’s counsel contended that he was “willing to retry this case any time after October

4th.” See id. Moreover, Spanier’s counsel admits, as he must, that he was more than



11/154

11

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


pleased to continue the retrial from October 2013 to December 2013 so he could have a

“real vacation.” Def. Mot. 4 n.3; Gov. Ex. 7 at 178-180. In fact at the August 19, 2013

hearing, the government opposed a continuance of the retrial from the October date and

the district court agreed to leave the retrial date as set. Gov. Ex. 7 at 179. Only then didSpanier’s counsel comment that he “wouldn’t mind a real vacation,” as opposed to

starting up the day he returned. Id. at 179-180. Thereafter, the district court moved the

retrial to December 10, 2013. Id. Spanier’s counsel acquiesced to the delays and

contributed to them.

Spanier argues that he requested an “earlier” date. Def. Mot. 3. This is a

misrepresentation of the record because counsel is taking his own statement out of

context and not referring to his statement in its entirety. The complete statement made by

Spanier’s counsel shows he requested a date “earlier in September,” not earlier than the

date when the Speedy Trial clock would have run. See id. The exchange was as follows:

THE COURT: . . . Now with regards to Mr. Spanier, I don’t know if the

defense is going to retry this or not or what your pleasure is. Do

you need additional time to decide, or what would you like for

me to do? I can set it for - - well, what is it the government

wants to do?

MS. DEVINE: We were thinking of a retrial date in September.

THE COURT: Okay. Mr. Scott, is September okay with you? Do you

have any - -

MR. SCOTT: I have a - - I have a pre-planned vacation, starting on the - - on

Saturday the 21st

, that corresponds with my children’s fall break. And that’s the proverbial prepaid tickets and everything.

That is two weeks, starting September 21 st. If it’s earlier in

September , then I’m at the Court’s service.

See Def. Ex. B at 241 (emphasis added). Spanier’s counsel, too, was requesting a retrial

date outside of the 70-day clock.



12/154

12

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


Following the comment about counsel’s pre-planned vacation and retrying the case

“earlier in September,” the government attorney responded by saying: “In light of that,

and not wanting to impinge on Mr. Scott’s vacation, or some period thereafter, if Court

wanted to place it sometime in October, we have no opposition to that.” Id. at 241-42.Spanier’s counsel responded, “That would be outstanding, Your Honor. Perhaps mid-

October on, I’m wide open.” Id. at 242. The government attorney estimated the retrial

would take approximately four to five days. Id. Spanier’s counsel then made a

suggestion:

MR. SCOTT: This is just a suggestion, your Honor. But it strikes me that

often times, retrials and whether there is a retrial and

negotiations in the interim often depend on the numerical divide

of the jury. Perhaps if we set a status for after the smoke

cleared, and after the forfeiture proceedings for Mr. McClain

have taken place, perhaps the parties might have more

collective insight on how to proceed. I’m not trying to get

ahead of myself, I just think we might have more information --

THE COURT: You want me to hold off setting a date for retrial; is that what

you’re saying?

MR. SCOTT: That is my suggestion. Perhaps if we set a status in a week or

ten days, after the smoke clears from the jury, it might be a

more fruitful discussion, is my suggestion.

See id. at 243. As this court can discern from the plain record above, Spanier’s counsel

did not request an earlier date that was within the Speedy Trial clock. Rather, when thedistrict court was discussing setting a retrial date, it was Spanier’s counsel that suggested

a status hearing in ten days “after the smoke clears from the jury.” Id. Spanier was not

asserting his desire for a speedy trial. These facts favor dismissal without prejudice.

The Supreme Court has held that the length of the delay is a relevant consideration

in determining whether an indictment should be dismissed with or without prejudice.



13/154

13

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


Taylor , 487 U.S. at 340; see also United States v. Clymer , 25 F.3d 824, 831-32 (9th Cir.

1994). In Clymer , the indictment was pending for 522 days – and “giving the

government the benefit of every doubt, about five months of this period was not

excludable under the Act.” The Ninth Circuit held that this amount of delay supporteddismissal with prejudice. Unlike Clymer , the delay in this case was not as excessive.

Assuming the 70-day clock began to run on the date the mistrial was granted (May 31,

2013), the clock ran on August 9, 2013. The district court held a hearing 10 days later

and reset the existing trial date (October 8, 2013) – which was 60 days later – to

December 10, 2013. This was 63 days after October retrial date – an illicit delay

contributed to by Spanier. Gov. Ex. 7 at 178-180.

Finally, Spanier contends that the government’s positions contributed to the case

remaining on appeal for 15 months, and that this further “exacerbat[ed] the original

delay.” Def. Mot. 9. The cases cited by Spanier – United States v. Lopez-Avila , 678 F.3d

955 (9th Cir. 2012) and United States v. Kojayan , 8 F.3d 1315 (9th Cir. 1993) – do not

stand for the propositions for which they are cited. First, neither case addresses a

violation of the Speedy Trial Act. Rather, these cases address prosecutorial misconduct.

Nowhere does it state in Kojayan that the “government’s continued failure to appreciate

violation on appeal can be basis for dismissal with prejudice”). Kojayan dealt with a

clear cut misstatement by the government to the jury during closing argument that a

witness who had a cooperation agreement was not in fact cooperating with the

government. 8 F.3d at 1318-22. Moreover, Lopez-Avila dealt with a situation where the

government did not read the complete question to the jury and insinuated the defendant

was lying during her testimony. 678 F.3d at 958. Neither situation exists here. Thegovernment did not make any misstatements to the district court or to the Ninth Circuit in

opposing the motion to dismiss and defending the case on appeal. More importantly, no

such finding was made by the Ninth Circuit. Def. Ex. G.

The delay caused by the case pending on appeal is not a factor to be considered in

the dismissal calculus. No case holds as much. Even should this court consider this a



14/154

14

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


factor, both parties contributed to the delay on appeal. First, Spanier filed the appeal

(which was a decision he made). Second, Spanier’s counsel requested a delay to file both

his opening brief and reply brief. Gov. Ex. 9. Third, Spanier did not oppose the

government’s request for an extension to file its answering brief. See id. At the veryleast, this is again, another situation where Spanier’s counsel contributed to the delay. It

does not favor dismissal with prejudice.

Based on the foregoing considerations, the facts and circumstances that led to the

Speedy Trial Act violation and dismissal weigh in favor of dismissal without prejudice.

3. Impact of Reprosecution on the Administration of Justice

In evaluating this factor, the court will consider whether there was any bad faith or

pattern of neglect by the government. Here, there was no bad faith or intentional

conduct. The government’s suggestion to retry the case in September 2013 was based

upon its belief that the complexity of the case did not dissipate after the first trial. See

United States v. Hernandez , 863 F.2d 239, 244 (2d Cir 1988) (holding that “in the

absence of a factually supported finding of bad faith or pattern of neglect by the local

United States Attorney, an isolated unwitting violation of the Speedy Trial Act cannot

support a decision to dismiss with prejudice”). Second, Spanier has set forth no evidence

that there was a pattern of neglect by the government with respect to prosecuting

Spanier’s case because no such evidence exists. This was an unintentional and isolated

violation of the Speedy Trial Act in this case, which does not support dismissal with

prejudice to further the administration of justice.

Spanier has not argued that the violation of the Act prejudiced his ability to prepare

for trial (or retrial), and he does not address the Act’s purpose of protecting society’sinterests. This is an important consideration – the interests of the public and the victims

in this case. The Seventh Circuit explained that “[t]he ‘penalty’ imposed on the

prosecutor (and the rest of society) by dismissing with prejudice rises with the

seriousness of the crime.” Fountain , 840 F.2d at 512. The Speedy Trial Act seeks to

avoid unduly impairing the enforcement of criminal laws by allowing for dismissal



15/154

15

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


without prejudice in appropriate cases. This is such a case. Moreover, dismissal without

prejudice is “not a toothless sanction: it forces the Government to obtain a new

indictment if it decides to reprosecute, and it exposes the prosecution to dismissal on

statute of limitations grounds.” Zedner v. United States , 547 U.S. 489, 499 (2006).Dismissing the indictment without prejudice therefore imposes an additional burden on

the government, and it will not undermine the administration of the Speedy Trial Act or

of justice. This factor weighs in favor of dismissal without prejudice.

4. The Absence of Prejudice to the Defendant

The length of the delay “in some ways is closely related to the issue of prejudice to

the defendant. The longer the delay, the greater the presumptive or actual prejudice to the

defendant, in terms of his ability to prepare for trial or the restrictions on his liberty.”

Taylor , 487 U.S. at 340 (noting that the absence of prejudice weighs in favor of dismissal

without prejudice). The delay in this case has not impaired Spanier’s ability to prepare

for trial or restricted his liberty. The evidence in this case is preserved. See United States

v. Smith , 576 F.3d 681, 690-91 (7th Cir. 2009) (holding that an argument that defendant

suffered prejudice has less force where the defendant went to trial and he has the trial

record with which to work). There are transcripts from two trials with the witnesses’

statements. See id. The witnesses are available. See id. The trial exhibits and discovery

is preserved. See id. Spanier is not detained. See United States v. Killingsworth , 507 F.3d

1087, 1091 (7th Cir. 2007) (reversing the district court’s dismissal with prejudice due to a

violation of the Speedy Trial Act, eve where the defendant was detained during the

violation period); United States v. Johnson , 29 F.3d 940, 946 (5th Cir. 1994) (finding that

the facts and circumstances of the case – which included a violation of the Act by 118days, during which time the defendant had been detained – pointed slightly in favor of

dismissal without prejudice). He has remained on bond during the first trial, the retrial,

and the appeal. Spanier remains currently on bond, and therefore, his liberty has not been

restricted. The absence of bad faith by the government and the lack of prejudice to the



16/154

16

1

2

3

45

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

2324

25

26

27

28


defendant “nudge this factor in favor of dismissal without prejudice.” Killingsworth , 507

F.3d at 1091.

Spanier contends that he has suffered financial hardship and other out-of-court

consequences. However, the victims have suffered much more. Spanier fails toacknowledge that some of the victims that testified that the illegal sale of their stock

affected their retirement and caused economic hardship. The illegal sale of publicly

traded stock involving millions of dollars also has a serious economic impact on the

innocent investors in the marketplace. When balancing these competing prejudices, this

factor does not support dismissal with prejudice.

IV

CONCLUSION

Dismissal without prejudice is appropriate where – as here – Spanier has been

accused of serious crimes, has not been prejudiced, the government has not acted in bad

faith, the impact on reprosecution is favored to protect society and the victims, and the

circumstances of leading to the violation of the Act are unlikely to recur. Under these

circumstances, the purpose of the Act would not be served by imposing the maximum

sanction for this violation. For all the foregoing reasons, the United States respectfully

requests that the Court deny dismiss the Indictment without prejudice.

DATED: April 25, 2016 Respectfully submitted,

LAURA E. DUFFYUnited States Attorney

/s/ Joseph J.M. Orabona JOSEPH J.M. ORABONAAssistant United States Attorney



17/154

Exhibit 2

Case 3:12-cr-00918-JM Document 446-1 Filed 04/25/16 Page 1 of 17


18/154

Case 3:12-cr-00918-BEN Document 282 Filed 10/25/13 Page 1 of 16Case 3:12-cr-00918-JM Document 446-1 Filed 04/25/16 Page 2 of 17


19/154



20/154



21/154



22/154



23/154



24/154



25/154



26/154



27/154



28/154



29/154



30/154



31/154



32/154



33/154



34/154

Exhibit 3

Case 3:12-cr-00918-JM Document 446-2 Filed 04/25/16 Page 1 of 30


35/154


36/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

2

SAN DIEGO, CALIFORNIA, DECEMBER 14, 2012, 9:09 A.M.

* * * *

THE COURT: GOOD MORNING.

THE CLERK: ONE ON CALENDAR, CASE NO. 12-CR-0918, USA VS.

JAMES MICELI, ET AL., STATUS HEARING.

MR. ADAMS: GOOD MORNING, YOUR HONOR. MARK ADAMS, ON

BEHALF OF DOUGLAS MCCLAIN. HE'S NOT PRESENT, HIS PRESENCE

HAVING BEEN WAIVED.

MR. WARREN: GOOD MORNING, YOUR HONOR. JEREMY WARREN, FOR

MR. MICELI.

MR. SCOTT: GOOD MORNING, YOUR HONOR. TIM SCOTT, FOR MR.

SPANIER, ALSO NOT PRESENT, PER THE COURT'S ORDER.

MS. DEVINE: GOOD MORNING, YOUR HONOR. FAITH DEVINE, ON

BEHALF OF THE UNITED STATES.

MR. ADAMS: YOUR HONOR, THANK YOU FOR PUTTING THIS ON

CALENDAR TODAY. WE'VE BEEN WANTING TO COME IN SINCE EARLY

DECEMBER AND TALK TO YOUR HONOR ABOUT THE TRIAL DATE AND MOTION

DATES. THIS IS, AS YOUR HONOR KNOWS, IS A VERY COMPLICATED

CASE. IT HAS A LONG HISTORY. THERE ARE A NUMBER OF EVENTS

THAT HAVE TAKEN PLACE REALLY ALL AROUND THE COUNTRY. A LOT OF

THE WITNESSES ARE ALL OVER THE COUNTRY, AS WELL AS ALL OVER THE

WORLD, SOME IN MEXICO CITY, SOME IN CHINA, AND SO ON.

THERE HAS COME A CONFLICT IN OUR ABILITY TO GET AS READY

AS WE'D LIKE TO BE, AS WE NEED TO BE UNDER THE CONSTITUTION.



37/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

3

MR. SCOTT AND I HAVE BEEN REPRESENTING A CLIENT, A CLIENT,

CORPORATION, AND CLIENT INDIVIDUAL SINCE -- IN HIS CASE,

OCTOBER 1ST, 2011. IN MY SITUATION THERE, I STARTED

REPRESENTING THAT COMPANY AND THAT PERSON IN FEBRUARY OF 2011.

THE CASE WAS INDICTED, AND THE INDICTMENT WAS UNSEALED,

AND WE WERE ARRAIGNED ON THAT INDICTMENT ON AUGUST 23RD, I

THINK IS THE DATE OF THIS YEAR, AND ASSIGNED TO JUDGE BURNS.

WE WENT TO JUDGE BURNS FOR MOTIONS ON OCTOBER 9TH. AND HE

SHORT-SET US. WE'D ASKED FOR A STATUS HEARING EITHER AT THE

END OF THE YEAR OR EARLY NEXT YEAR GIVEN THE AMOUNT OF

DISCOVERY AND THE AMOUNT OF THE SERIOUS ALLEGATIONS IN THAT

CASE.

THE COURT: TELL ME ABOUT THE ALLEGATIONS IN THAT CASE.

WHAT IS IT ABOUT?

MR. ADAMS: IT IS A CONSPIRACY TO COMMIT WIRE FRAUD AND

BRIBERY OF PUBLIC OFFICIALS AND THEN SEVERAL SUBSTANTIVE COUNTS

OF BRIBERY OF PUBLIC OFFICIALS. AND THERE ARE A LOT OF

WITNESSES AND A LOT OF MOVING PARTS. AND JUDGE BURNS SET US

FOR A JANUARY TRIAL DATE. THAT WAS ON OCTOBER 9TH. AND SO

WHAT WE'VE TRIED TO DO IS MANAGE BOTH CASES AS EFFECTIVELY AS

WE COULD AND MOVE FORWARD WITH PREPARATIONS IN BOTH CASES. BUT

IT BECAME PRETTY APPARENT AFTER WORKING -- I CAN SPEAK FOR

MYSELF. I'VE BEEN WORKING, BASICALLY, SEVEN DAYS A WEEK SINCE

YOUR HONOR SET THIS TRIAL DATE, WITH THE EXCEPTION OF ONE OR

TWO DAYS. I EVEN FILED THINGS ON THANKSGIVING EVENING.



38/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

4

ALL OF THAT HAVING BEEN SAID, IT OCCURRED TO ME IN EARLY

DECEMBER, THERE WERE SIMPLY NOT ENOUGH MINUTES IN THE DAY TO

GET BOTH CASES READY AND TO MANAGE OTHER CASES THAT WE HAVE ON

OUR DOCKETS. AND SO I CALLED YOUR CLERK, ASKING TO COME IN AND

HAVE A STATUS HEARING LIKE THIS, TO TALK WITH YOUR HONOR ABOUT

THOSE DATES.

WE WERE GIVEN THE JANUARY TRIAL DATE, AND I THINK JANUARY

BEING BEFORE MARCH, WE FELT WE HAD TO GET READY FOR THAT CASE.

AND THE BULK OF MY EFFORTS I KNOW HAVE BEEN DEDICATED TO THAT.

THIS CASE HAS NOT BEEN OFF THE DOCKET. IN FACT, ON

NOVEMBER 13TH, I FILED A CJA FUNDING REQUEST WITH YOUR HONOR,

AND I HAVEN'T FOLLOWED UP ON THAT, BUT I HAVEN'T HEARD

ANYTHING, EITHER. SO THAT IS PENDING, AND THAT IS SOMETHING

THAT NEEDS TO BE RESOLVED IMMEDIATELY SO I CAN MOVE FORWARD

WITH CONTINUED PREPARATION.

THE COURT: WHEN DID YOU FILE THAT?

MR. ADAMS: NOVEMBER 13TH. AND I DON'T WANT TO GET INTO

THE SUBSTANCE OF IT, BUT IT'S A FUNDING REQUEST FOR NECESSARY

DEFENSE SERVICES, ANCILLARY SERVICES IN THE CASE.

THE COURT: I DON'T HAVE IT. DID YOU DELIVER IT TO MY

CHAMBERS, IS THAT WHAT YOU DID?

MR. ADAMS: NO. I'VE ALWAYS -- I TOOK IT TO THE CLERK'S

OFFICE. BUT THAT'S ANOTHER THING. I CAN DELIVER THAT TO

CHAMBERS LATER OR GIVE YOU A COPY OF IT RIGHT NOW IF YOU'D

LIKE.



39/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

5

SO ALL THINGS HAVING BEEN SAID, WE CAME TO THE REALIZATION

IN EARLY DECEMBER THAT THERE WAS NO WAY WE COULD GO FORWARD AND

HANDLE BOTH CASES. IN FACT, WE CAME TO THE REALIZATION THAT IN

THE OTHER CASE, THE CASE IN FRONT OF JUDGE BURNS, THERE WAS NO

WAY WE COULD GET THAT READY BY THE JANUARY TRIAL DATE. AND SO

WE WENT IN AND ASKED JUDGE BURNS FOR A COUPLE MORE MONTHS TO

GET THAT CASE READY.

IT IS NOW SET -- IT GOT SET ON FEBRUARY 12TH, WHICH IS

WHAT, I THINK, RAISED YOUR HONOR'S CONCERN ABOUT THIS DATE THAT

WE NEED TO MOVE UP ON THE MARCH 5TH, THE DATE THAT IS SET HERE.

AND SO WE WENT BACK TO JUDGE BURNS, AND IT'S BEEN MOVED

BACK TO THE 20TH OF FEBRUARY I THINK IS THE DATE WE'RE ON NOW

FOR THAT TRIAL. SO EVERYTHING HAVING BEEN SAID, EVEN IF I

STOPPED DOING EVERYTHING IN EVERY OTHER CASE AND CONTINUED TO

WORK SEVEN DAYS A WEEK, THERE IS NO WAY I COULD BE MEANINGFULLY

EFFECTIVE FOR MY CLIENT IN THIS MCCLAIN CASE. THERE IS SO MUCH

TO DO, AND EVERY EVENT THAT HAPPENED IN THIS CASE, EVERY

TRANSACTION, EVERY ONE THAT I'VE SCRATCHED THE SURFACE OF IN

TERMS OF INVESTIGATION, TURNS UP ANCILLARY LITIGATION IN --

OFTENTIMES, IN THE SAME TIME PERIOD. ONE OF THE CASES I LOOKED

AT TODAY, THERE IS A LAWSUIT FILED ALLEGING ALMOST THE SAME

KIND OF CONDUCT AND RAISING SECURITIES FRAUD CONCERNS AND THAT

SORT OF THING IN NEVADA.

SO ALL OF THESE UNDERLYING TRANSACTIONS ARE GOING TO HAVE

OTHER COMPLAINING PARTIES THAT HAVE TO BE INTERVIEWED AND



40/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

6

TALKED TO. AND THEY'RE LITERALLY ALL OVER THE COUNTRY. IN

FACT, THE MAIN -- ONE OF THE LARGEST TRANSACTIONS, THE

$23 MILLION TRANSACTION, IS OUT OF MEXICO CITY. THAT COMPANY

IS IN MEXICO CITY, AND THAT IS WHERE ALL THE WITNESSES ARE.

AND SO THERE IS A LOT OF WORK THAT NEEDS TO BE DONE THERE TO

GET THIS CASE READY FOR TRIAL.

SO ALL OF THAT HAVING BEEN SAID, THE LONG AND SHORT OF IT

IS, THERE IS NO WAY THAT I CAN BE READY TO GO TO TRIAL AND

DEFEND DOUG MCCLAIN IN THE WAY HE SHOULD BE DEFENDED ON

MARCH 5TH.

THE COURT: MR. WARREN, MR. SCOTT.

MR. SCOTT: YOUR HONOR, I JOINED MR. ADAMS' MOTION TO

CONTINUE THE SPANIER TRIAL DATE. AND THE REASON IS THAT I,

TOO, CANNOT BE CONSTITUTIONALLY EFFECTIVE BY MARCH 5TH. I WANT

TO ASSURE THE COURT THAT I'VE BEEN MAKING EVERY EFFORT TO

MANAGE BOTH OF THESE DIFFICULT AND COMPLEX CASES. AS MR. ADAMS

CORRECTLY SAID, I REPRESENTED THE OTHER LADY ON WHAT I'LL REFER

TO AS THE NAVY CASE, MEANING THE CASE IN FRONT OF JUDGE BURNS,

SINCE OCTOBER OF 2011. AND THIS CASE, I CAME TO IN A

PRE-INDICTMENT SETTING IN DECEMBER, JANUARY OF 2011, SLASH,

2012. AND THEN THIS CASE WAS INDICTED IN APRIL.

BUT THE NAVY CASE WAS THEN INDICTED IN AUGUST. AND AS

MR. ADAMS SAID --

THE COURT: WAIT. THIS CASE, OUR CASE, WAS INDICTED WHEN?

MR. SCOTT: THIS CASE WAS INDICTED -- I THINK THE



41/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

7

INDICTMENT WAS UNSEALED IN MARCH OF 2012, AND MR. SPANIER

FINALLY ARRIVED, VIA RULE 5, FROM FLORIDA IN APRIL.

THE COURT: THIS CASE WAS INDICTED WHEN?

MR. SCOTT: THE OTHER ONE WAS INDICTED IN AUGUST.

HOWEVER, I HAD REPRESENTED THAT CLIENT SINCE OCTOBER OF 2011,

THE NAVY CLIENT. AND I REPRESENTED THIS CLIENT SINCE DECEMBER

2011 OR JANUARY 2012.

SO THIS CASE WAS INDICTED FIRST, NO QUESTION ABOUT IT.

BUT MY POINT IS SIMPLY THAT THE OTHER ONE WAS ALSO A

PREEXISTING CASE. I KNOW, PERHAPS, THE COURT IS THINKING, AND

I'M COGNIZANT THAT THE COURT SAID, YOU HAVE TO TRY TO CONTROL

YOUR CALENDARS. AND I KNOW THE COURT IS MAYBE THINKING, WELL,

DON'T TAKE ON BOTH CASES. WELL, THE POINT IS, I ALREADY HAD

BOTH CASES. AND I ALSO WANTED TO SHARE WITH THE COURT THAT

I'VE NOT TAKEN AN APPOINTED CASE. I'VE STOPPED TAKING

APPOINTMENTS IN THIS COURTHOUSE. THE COURT MIGHT RECALL, I WAS

HERE TWO WEEKS AGO ON A 13 --

THE COURT: RIGHT.

MR. SCOTT: I HAD TO DECLINE THE APPOINTMENT. THE COURT

APPOINTED MR. ZUGMAN. SO WHAT I'M TRYING TO SHARE WITH THE

COURT IS, WE'VE BEEN DOING ALL WE CAN TO MANAGE A COMPLEX

WHITE-COLLAR JUDGE BURNS CASE AND A COMPLEX WHITE-COLLAR JUDGE

BENITEZ CASE. I THINK IT BEARS NOTE THAT WE DIDN'T -- I THINK

IT WOULD BE ONE THING IF WE SAID -- IF WE'D ALL STOOD HERE --

THE COURT: WHEN WAS JUDGE BURNS CASE SET FOR TRIAL?



42/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

8

MR. SCOTT: IT WAS ORIGINALLY SET FOR JANUARY 15TH.

THE COURT: SO YOU WEREN'T READY FOR THAT ONE, SO IT GOT

CONTINUED?

MR. SCOTT: IT DID.

THE COURT: ALL RIGHT.

MR. SCOTT: IT GOT CONTINUED TO FEBRUARY 20TH, ORIGINALLY

TO MARCH 5TH, WHICH WAS A MISSTEP. WE DIDN'T MEAN TO

DOUBLE-SET, SO IT WAS RESET TO FEBRUARY 20TH. BUT WE, BY

PREPARING --

THE COURT: HOW DID THAT HAPPEN?

MR. SCOTT: HOW DID THAT HAPPEN?

THE COURT: HOW DID THE RESETTING COME ABOUT?

MR. SCOTT: WELL, ABOUT THE SAME TIME IN EARLY DECEMBER,

WE REALIZED NOT ONLY CAN WE NOT GET THE SPANIER, MCCLAIN CASE

PREPARED BY THAT TIME, BUT WE ALSO CAN'T GET THE NAVY CASE

PREPARED BY THAT TIME.

AND SO WE STARTED THE PROCESS OF TRYING TO GET ADEQUATE

TIME TO BE EFFECTIVE ON EACH CASE. AS I UNDERSTAND IT, BECAUSE

MR. ADAMS TOOK THE LEAD WITH THIS, HE HAD MADE CONTACT WITH

CHAMBERS HERE IN THIS CASE, IN THE FIRST WEEK OF DECEMBER, TO

TRY TO GET ON CALENDAR TO DISCUSS THE CONTINUANCE. AND WE DID

A SIMILAR THING IN FRONT OF JUDGE BURNS.

NOW ULTIMATELY, WE ENDED UP IN FRONT OF JUDGE BURNS FIRST

BECAUSE IN THAT CASE, WHEN THE COURT SET US IN JANUARY, WITH

WHAT WAS ABOUT A FOUR-MONTH WINDOW BETWEEN INDICTMENT AND



43/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

9

TRIAL, THE COURT SAID, I'M SHORT-SETTING YOU, BUT TO ALLEVIATE

THAT, OR TO MITIGATE AGAINST THAT TIME PRESSURE, I'M GOING TO

ORDER THE GOVERNMENT TO PRODUCE WHAT IT DESCRIBED AS A ROAD MAP

OR AN OUTLINE OF THE GOVERNMENT'S CASE, SO SORT OF ABOVE AND

BEYOND EXTRAORDINARY DISCOVERY OBLIGATIONS.

SO THE GOVERNMENT OWED US THIS DETAILED MEMORANDUM,

LISTING ALL OF THEIR EXHIBITS AND ALL OF THEIR WITNESSES BY

COUNT AND BY OVERT ACT IN THE NAVY CASE. BECAUSE WE DIDN'T

WANT TO BE ACCUSED, OR GIVE THE APPEARANCE, OF TAKING THAT

EXTRAORDINARY DISCOVERY, THAT ROAD MAP, AND ONLY THEN ASKING

FOR A CONTINUANCE, WE ENDED UP IN FRONT JUDGE BURNS SHORTLY

BEFORE THE GOVERNMENT'S EXTRAORDINARY DISCOVERY WAS DUE IN THAT

NAVY CASE. SO THAT WAS PART OF THE TIMING.

AND THEN WHEN JUDGE BURNS SAID, HOW MUCH TIME DO YOU NEED,

THE HONEST ANSWER TO THAT QUESTION WAS, WORKING NIGHTS AND

WEEKENDS, AS WE HAVE BEEN, WORKING THROUGH THE HOLIDAYS,

WORKING AROUND THE CLOCK, WE THINK THAT WE COULD GET THIS, THE

NAVY CASE, PREPARED IN 60 DAYS. AND SO HE GAVE US THE

MARCH 15TH DATE, OR MARCH 12TH DATE. AND AT THAT POINT, I'LL

BE THE FIRST TO SAY, I SHOULD HAVE SAID, NOW, BEAR IN MIND,

YOUR HONOR, THAT MR. ADAMS AND I ARE ALSO SET IN FRONT OF JUDGE

BENITEZ, WE DESPERATELY NEED MORE TIME IN THAT CASE, AND WE'RE

IN THE PROCESS OF TRYING TO CONTINUE THAT. THAT IS WHAT SHOULD

HAVE HAPPENED, AND IT DIDN'T HAPPEN, AND THAT'S MY FAULT.

BUT I WANT TO TELL THE COURT AND THE GOVERNMENT THAT THERE



44/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

10

ARE NO ATTEMPTS TO MANEUVER OR BE DUPLICITOUS OR TO DO ANYTHING

BEHIND ANYONE'S BACK. SO I ACCEPT RESPONSIBILITY FOR NOT

TELLING JUDGE BURNS WHAT I SHOULD HAVE. BUT IT WAS AN

OVERSIGHT, NOTHING THAT WAS INTENTIONAL.

THE FACT REMAINS, YOUR HONOR, THERE ARE LITERALLY TENS OF

THOUSANDS OF SEC DOCUMENTS THAT HAVE BEEN DISCLOSED. THERE ARE

TENS OF THOUSANDS OF DOCUMENTS PRODUCED BY THE SO-CALLED -- OR

THE ALLEGED VICTIMS AND THEIR ATTORNEYS. THERE HAVE BEEN TENS

OF THOUSANDS OF DOCUMENTS SEIZED FROM THE VARIOUS COMPANIES AND

SEARCH WARRANTS IN THIS CASE, THE EQUIVALENT OF HUNDREDS, UPON

HUNDREDS, UPON HUNDREDS OF BANKER'S BOXES OF DISCOVERY. THERE

ARE HARD DRIVES, AFTER HARD DRIVES THAT HAVE BEEN ANALYZED BY

THE RCFL THAT WE NEED TO ALSO TRY TO ADDRESS.

MY OWN CLIENT HAS HIS OWN FILES, HIS OWN DOCUMENTS THAT

NEED REVIEW TO SEE IF THAT IS OF ANY ASSISTANCE. AT THE END OF

THE DAY, YOUR HONOR, I'M A SOLO PRACTITIONER. THE COURT HAS

GIVEN ME SOME LAW CLERK HELP IN THIS CASE. BUT IN THE JUDGE

BURNS CASE AS WELL, THERE ARE ALSO HUNDREDS AND HUNDREDS OF

BANKER'S BOXES OF DISCOVERY. AND THE SAME THING, THE SAME

LITANY, HARD DRIVES AND RECORDINGS AND SO ON.

I CAN TELL THE COURT THAT LAST SATURDAY, MR. ADAMS AND I

HAD A 6:00 A.M. TRIAL PREP SESSION IN MY OFFICE FOR THE WHOLE

MORNING. THE SATURDAY BEFORE THAT, MR. ADAMS AND I HAD A

6:00 A.M. TRIAL PREP MEETING IN MY OFFICE. SO WE REALLY, TRULY

ARE WORKING AS HARD AS WE CAN ON BOTH CASES. I'VE HEARD IT --



45/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

11

YOU KNOW, I HEAR IT SAID, AND THERE IS OFTEN DISCUSSION ABOUT

THE FEDERAL COMMUNITY AND THE SOUTHERN DISTRICT COMMUNITY. AND

THE REALITY IS, WE HAVE A JUDGE BURNS CASE AND JUDGE BENITEZ

CASE. AND AS MEMBERS OF THIS COMMUNITY, MR. ADAMS AND I, AND

MR. WARREN AS WELL -- I DON'T WANT TO SPEAK FOR THESE

GENTLEMEN, BUT I'M SPEAKING FOR MYSELF ONLY. AS MEMBERS OF

THIS COMMUNITY, WE'RE TRYING TO DO BOTH, AND WE'RE TRYING IN

GOOD FAITH TO DO BOTH. AND WE SIMPLY WANT TO BE

CONSTITUTIONALLY EFFECTIVE FOR EACH CLIENT. THE CLIENTS IN OUR

CASE ARE OUT ON BOND. WE'RE WILLING TO WORK WITH THE

GOVERNMENT TO ACCOMMODATE ANY SCHEDULING ISSUES THAT THEY HAVE.

BUT I LITERALLY AND FIRMLY CANNOT BE PREPARED BY

MARCH 5TH. I WANT TO BE, BUT I WILL NOT BE ABLE TO. I SIMPLY

DON'T HAVE -- THERE ARE NOT ENOUGH HOURS IN THE DAY; THERE IS

NOT ENOUGH MINUTES IN THE DAY.

I'M TREADING A LITTLE BIT LIGHTLY HERE, BUT IF EVEN ONE OF

THE JUDGES IN THESE TWO CASES WERE A DIFFERENT JUDGE, WE WOULD

HAVE SAID, WE'D LIKE A MOTION HEARING, TRIAL SETTING, I THINK

IF PAST IS PROLOGUE, ONE OF THE JUDGES WOULD HAVE GIVEN US A

MOTION HEARING, TRIAL SETTING, AND THEN WE WOULD HAVE BEEN ABLE

TO NEGOTIATE OUR DATES A LITTLE BIT BETTER. BOTH YOUR HONOR

AND JUDGE BURNS --

THE COURT: WHAT EXACTLY ARE YOU SAYING?

MR. SCOTT: WHAT EXACTLY I'M SAYING IS THAT BOTH YOU, YOUR

HONOR, AND JUDGE BURNS ARE KNOWN FOR HAVING AN EXPEDITED AND AN



46/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

12

AGGRESSIVE TRIAL CALENDAR. AND THAT'S AN ADMIRABLE THING.

IT'S ADMIRABLE TO WANT TO MOVE THE CASES ALONG AS WELL AS

POSSIBLE.

AND WHAT SPECIFICALLY I'M SAYING IS, THAT WE ASKED FOR A

STATUS TO BE ABLE TO PICK AND MANEUVER A DATE, AND THE COURT

SAID NO, I PREFER TO SET A MARCH TRIAL DATE IN THIS CASE.

WHICH CERTAINLY, THE COURT IS THE COURT, SO MARCH IT IS.

AND SIMILARLY, WHEN WE WERE IN FRONT OF JUDGE BURNS, WE

SAID, JUDGE BURNS, CAN WE PLEASE HAVE A MOTION HEARING, TRIAL

SETTING SO WE CAN PICK A REALISTIC DATE, AND JUDGE BURNS SAID,

NO, IT WILL BE JANUARY. AND, OF COURSE, THESE ARE THE COURT'S

DECISIONS. AND WE DO OUR BEST TO LIVE WITH THEM.

AND FOR THE PAST 60 DAYS, SINCE JUDGE BURNS SHORT SET US,

WE'VE BEEN TRYING TO FIGHT THE TWO-FRONT WAR. BUT THE REALITY

IS, AND I NEED TO BE CANDID ABOUT THIS, I HAVEN'T BEEN ABLE TO

DEVOTE MUCH OF ANY TIME AT ALL TO THIS CASE DESPITE MY BEST

EFFORTS, ONLY BECAUSE JANUARY COMES BEFORE MARCH ON THE

CALENDAR. AND I'VE BEEN TRYING TO -- WHEN YOU'RE FIGHTING A

TRUE FRONT WAR, YOU SORT OF HAVE TO LOOK FIRST AT THE FIRST

FRONT THAT IS GOING TO BE SHOOTING AT YOU. AND SO --

THE COURT: SO LET ME MAKE SURE I UNDERSTAND THIS. THE

JUDGE BURNS CASE WAS SET FOR TRIAL JANUARY 28TH, RIGHT?

MR. SCOTT: JANUARY 15TH, I BELIEVE IT WAS.

THE COURT: ALL RIGHT. ANYTHING ELSE?

MR. SCOTT: YES. I WAS JUST ASKED WHEN THE CASE IS



47/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

13

CURRENTLY SET NOW. AND NOW IT'S SET FOR FEBRUARY 20TH.

THE COURT: RIGHT.

MR. SCOTT: BECAUSE WE WENT BACK INTO JUDGE BURNS. JUDGE

BURNS DIDN'T WANT TO SET HIS CASE ON TOP OF YOURS. SO WE'RE AT

FEBRUARY 20TH.

THE COURT: SO YOU HAD A TRIAL DATE IN THE OTHER CASE, AND

IT WAS SET IN JANUARY?

MR. SCOTT: YES.

THE COURT: AND WE SET THIS TRIAL IN MARCH?

MR. SCOTT: CORRECT.

THE COURT: BUT NOW YOU'VE ASKED TO MOVE A TRIAL THAT WAS

SET IN JANUARY, JANUARY 15TH, AND NOW IT IS SET IN FEBRUARY?

MR. SCOTT: CORRECT.

THE COURT: AND SO NOW, BASICALLY WHAT YOU'VE DONE IS

YOU'VE CREATED THIS VERY SHORT WINDOW BETWEEN THAT TRIAL AND

THIS TRIAL.

MR. SCOTT: THAT WINDOW HAS BEEN CREATED. I DIDN'T WANT

TO CREATE THAT WINDOW. I WOULD LIKE TO CREATE A MUCH BIGGER

WINDOW. IF I HAD MY DRUTHERS, TO USE THE COURT'S HAND MOTIONS,

I WOULD HAVE MOVED BOTH CASES LIKE THIS MUCH FURTHER APART.

THE COURT: I KNOW. LOOK, OKAY --

ANYWAY, MS. DEVINE?

MS. DEVINE: YOUR HONOR, THE GOVERNMENT IS READY TO GO ON

MARCH 5TH. AND I JUST WANT TO AT LEAST CREATE A RECORD HERE.

THIS CASE WAS INDICTED IN MARCH OF 2012.



48/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

14

MR. SCOTT WAS REPRESENTING MR. SPANIER PRIOR TO THAT,

SIMILAR TO THIS OTHER CLIENT HE HAS IN FRONT OF JUDGE BURNS.

WE HAD A MOTION HEARING ON APRIL 23RD, 2012. AND I WISH I HAD

THE TRANSCRIPT. BECAUSE I SPECIFICALLY REMEMBER YOUR HONOR

TOLD EVERYBODY, IF YOU CAN'T DEVOTE THE TIME TO THIS CASE,

PLEASE LET ME KNOW NOW. AND I KNOW THAT SANJAY BHANDARI HAD

BEEN ONE OF THE ATTORNEYS, AND HE TOOK YOUR ADVICE AND ADVISED

THE COURT THAT HE DIDN'T THINK HE COULD DEVOTE THE TIME. AND

THEN MR. ADAMS WAS APPOINTED IN MR. BHANDARI'S PLACE.

WE THEN HAD ANOTHER TWO MONTHS, AND THEN WE CAME BACK AT

THE END OF JUNE, AND THE THREE COUNSEL HERE ASKED --

THE COURT: JUNE 18TH.

MS. DEVINE: JUNE 18TH, CORRECT. AND THEY ASKED FOR THE

ENTIRE SUMMER BECAUSE THEY WANTED TO REVIEW THE DISCOVERY.

OKAY. SO WE AGREED TO THAT. AND WE CAME BACK IN SEPTEMBER,

AND WE SET A TRIAL DATE. WELL, NO MENTION WAS EVER MADE THAT

THEY HAD THIS OTHER CASE THAT WAS INDICTED IN AUGUST AT THE

SEPTEMBER HEARING, WHEN WE SET THE TRIAL DATE.

THE OTHER THING IS, IS THAT THE DEFENSE ATTORNEYS WERE

VERY, VERY ADAMANT THAT THEY WANTED US TO PRODUCE ALL OF OUR

WITNESS STATEMENTS, ALL OF OUR JENCKS STATEMENTS, WHICH WE'RE

NOT REQUIRED TO PRODUCE UNTIL TRIAL, AND WE AGREED.

AND YOUR HONOR ASKED US IF WE WOULD PROVIDE THAT EARLY,

AND WE DID. WE ASSEMBLED IT ALL TOGETHER, AND WE PRODUCED ALL

OF OUR WITNESS STATEMENTS. SO THEY HAVE A ROAD MAP FOR THIS



49/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

15

CASE. THEY HAVE ALL THE WITNESS STATEMENTS. THEY HAD THEM IN

NOVEMBER. WE HAD THEM READY TO PRODUCE IN OCTOBER, BUT WE WERE

WAITING FOR THE COURT TO SIGN OFF ON A PROTECTIVE ORDER.

WE'VE COMPLIED WITH OUR DISCOVERY; WE'VE PRODUCED OUR

DISCOVERY. WE'VE GIVEN THEM AN AFFIDAVIT THAT WAS DONE IN

SUPPORT OF OUR SEIZURES OF ASSETS IN THIS CASE, WHICH REALLY

PROVIDES A REAL ROAD MAP TO THIS CASE AND EXACTLY WHAT THE CASE

IS AND WHAT THE EVIDENCE IS.

THE COURT: DO ME A FAVOR, FOR PURPOSES OF THE RECORD,

SUMMARIZE THIS CASE FOR ME, WOULD YOU.

MS. DEVINE: THIS CASE IS NOT AS COMPLEX AS THE DEFENSE

WOULD LEAD YOU TO BELIEVE. AND THE BEST ANALOGY THAT I CAN

MAKE IS THAT IT IS SIMILAR TO A PAWN SHOP. AND WHAT HAPPENED

IS, THE DEFENDANTS, WHAT THEY DID IS, THEY -- THEY WERE IN THE

BUSINESS OF PROVIDING LOANS THAT WERE SECURED BY STOCK. AND SO

WHAT THEY WOULD DO IS, THEY WOULD PROMISE TO LOAN INDIVIDUALS

MONEY IN RETURN FOR THEM PLEDGING THEIR STOCK.

AND SO WHAT THEY WOULD DO IS, THEY WOULD TAKE THE STOCK,

HAVE ALL THE STOCK PLEDGED TO THEM, AND THEN, UNBEKNOWNST TO

THE PEOPLE WHO WERE BORROWING THE MONEY AND PLEDGING THEIR

COLLATERAL, THEY WOULD SELL THE STOCK. AND THEN THEY WOULD

TAKE THAT MONEY AND USE THAT MONEY TO ACTUALLY FUND THE LOAN.

AND THE ANALOGY I HAVE IS TO A PAWN SHOP. IF YOU WANT TO

SELL A PIECE OF JEWELRY, OR YOU NEED MONEY, YOU TAKE IT TO THE

PAWN SHOP. AND THEY HOLD YOUR JEWELRY, AND THEN YOU COME BACK



50/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

16

WHEN YOU'RE READY TO REPAY, AND GET YOUR JEWELRY BACK.

WELL, WHAT THEY DID IN THIS CASE IS, THEY TOOK THE

JEWELRY. THEY SAID, COME BACK IN THREE DAYS, WE'LL GIVE YOU A

LOAN. THEY SOLD THE JEWELRY TO SOMEBODY ELSE, DIDN'T TELL

THESE PEOPLE, AND THEN GAVE THEM THAT MONEY, HOPING THAT THEY

WOULD NEVER COME BACK TO THE PAWN SHOP.

AND THAT IS REALLY, I MEAN, WHAT THIS CASE IS ABOUT. I

DON'T BELIEVE THAT IT'S AS COMPLEX, WITH ALL THE SECURITIES AND

SECURITIES LAWS AND ALL THAT. I JUST THINK IT'S A SIMPLE --

THE COURT: LET ME ASK YOU A SIMPLE QUESTION. HOW MANY

WITNESSES DOES THE GOVERNMENT INTEND TO CALL IN THIS CASE?

MS. DEVINE: WE PROBABLY -- I DON'T HAVE IT IN FRONT OF

ME, BUT IT'S ANYWHERE BETWEEN 30 TO 40 WITNESSES.

THE COURT: THAT IS A LOT OF WITNESSES.

MS. DEVINE: I DON'T BELIEVE THAT THEY'RE GOING TO BE

QUICK. I MEAN, I DON'T BELIEVE THEY'RE GOING TO BE LENGTHY

WITNESSES. I THINK IT'S SOMETHING THAT IS GOING TO GO QUICK.

BECAUSE ONCE WE'RE ABLE TO PUT ON ONE OF THE WITNESSES TO

DESCRIBE THE SCHEME, I THINK EVERY OTHER WITNESS -- IT'S GOING

TO BECOME APPARENT THAT THE SCHEME IS SIMILAR WITH RESPECT TO

EVERY WITNESS. AND SO I THINK IT WILL GO FAIRLY QUICKLY.

WE'RE ANTICIPATING TWO WEEKS.

THE COURT: FOR THE GOVERNMENT'S CASE?

MS. DEVINE: CORRECT.

MR. SCOTT: YOUR HONOR, VERY BRIEFLY BY WAY OF RESPONSE,



51/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

17

MS. DEVINE IS CORRECT, THAT THE COURT SAID, IF YOU DON'T HAVE

TIME, LET ME KNOW NOW. AND WE TRIED TO ABIDE BY THAT, BY NOT

TAKING NEW CASES. AS I SAID, THIS WAS A PREEXISTING CASE. AND

HAD I KNOWN IN SEPTEMBER THAT TWO WEEKS DOWN THE ROAD JUDGE

BURNS WAS GOING TO SET ME IN JANUARY, I WOULD HAVE SAID

SOMETHING ABOUT THAT. BUT THERE IS NO WAY TO KNOW THAT JUDGE

BURNS WAS GOING TO SHORT SET THAT CASE. MY ASSUMPTION WOULD

HAVE BEEN THAT IT WOULD HAVE BEEN SET OUT BEHIND THE CASE THAT

WE HAVE HERE.

SO THAT IS NOT SOMETHING THAT, I THINK, COULD HAVE BEEN

PLANNED FOR OR COULD HAVE BEEN PREVENTED. AND RESPECTFULLY, I

THINK IT'S A LIT BIT -- THE RECORD BELIES, AND THE FACTS BELIE,

MS. DEVINE'S STATEMENT THAT THIS IS NOT A COMPLEX CASE. IT'S

BEEN DEEMED COMPLEX AS A MATTER OF LAW FOR STARTERS. I MEAN,

THAT MOTION WAS GRANTED WITH NO OPPOSITION FROM THE GOVERNMENT.

THE GOVERNMENT DIDN'T HAVE A PROBLEM CALLING IT COMPLEX WHEN WE

MADE THAT MOTION NEAR THE BEGINNING OF THIS CASE. AND,

FRANKLY, I'M NOT FAMILIAR WITH NOT COMPLEX CASES THAT HAVE 40

WITNESSES. I MEAN, THAT JUST SEEMS -- THERE SEEMS TO BE SOME

TENSION THERE IN THE GOVERNMENT'S INDICTMENT, IN THEIR PLAN FOR

TRIAL, AND IN THE REPRESENTATION THAT THIS IS NOT COMPLEX.

THIS IS COMPLEX. THE DISCOVERY IS VOLUMINOUS. THERE ARE

35 COUNTS IN THE INDICTMENT. THERE ARE DIFFERENT TRANSACTIONS

LITERALLY ALL OVER THE GLOBE THAT ARE ALLEGED IN THE

INDICTMENT. AND IT NEEDS ADEQUATE INVESTIGATION. IT NEEDS



52/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

18

ADEQUATE PREPARATION, AND WE NEED TIME TO PREPARE FOR THE 40

WITNESSES.

AGAIN, THIS IS -- AS I WAS STARTING TO SAY, THIS IS

SOMETHING THAT WE'RE TRYING TO DO BOTH, BUT EACH OF US ARE SOLO

PRACTITIONERS, AND EACH OF US ARE WORKING AS HARD AS WE CAN,

BUT WE SIMPLY CANNOT BE EFFECTIVE FOR BOTH.

THE COURT: LET ME ASK YOU A QUESTION. GIVEN THAT THIS

CASE WAS INDICTED FIRST, AND HAS BEEN SET FOR TRIAL FIRST, WHY

IS IT THAT JUDGE BURNS SET HIS TRIAL IN FEBRUARY? DID YOU ASK

HIM FOR MORE TIME PAST MARCH?

MR. SCOTT: I THINK WE'VE BEEN PRETTY CLEAR THAT WE NEED

MORE TIME THAN WHAT WE'VE BEEN GIVEN. I MEAN, THAT'S WHY WE

ASKED FOR A CONTINUANCE, AND THAT'S WHY --

THE COURT: BUT WHEN YOU WEREN'T IN THE CONFLICT, THE

APPARENT OVERSIGHT, WHERE YOU HAD APPARENTLY SET TWO CASES ON

THE SAME DAY, DID YOU ASK JUDGE BURNS IF HE WOULD SET HIS CASE,

LIKE, IN APRIL OR IN MAY OR JUNE, RATHER THAN FEBRUARY?

MR. SCOTT: WHEN WE STARTED, JUDGE BURNS SAID, HERE IS

WHAT I'M GOING TO DO: I'M GOING TO BACK IT UP TO FEBRUARY.

AND SO THAT'S WHAT WE HAVE. THAT'S WHAT JUDGE BURNS' INTENTION

IS TO DO, AND I DON'T THINK HE'S COMING OFF OF THAT, EITHER.

THE COURT: DID YOU DECLARE THAT YOU WOULD BE UNABLE TO

ADEQUATELY REPRESENT YOUR CLIENT IN THAT CASE IF THE CASE WERE

TO GO TO TRIAL IN FEBRUARY, AS SET BY JUDGE BURNS?

MR. SCOTT: WE REPRESENTED THAT WE COULD NOT BE



53/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

19

CONSTITUTIONALLY EFFECTIVE IN JANUARY, AND WE ASKED FOR THE 60

DAYS. BECAUSE WE THINK THAT WE COULD BARELY BE

CONSTITUTIONALLY COMPETENT IN THAT CASE BECAUSE, AS I SAID,

THAT IS THE ONE THAT, CANDIDLY, I'VE BEEN DEVOTING MORE TIME TO

ONLY -- AGAIN, BECAUSE JANUARY COMES BEFORE MARCH.

THE COURT: I'M GOING TO TAKE A WILD GUESS HERE, LET ME

GUESS, I BET THAT CASE IS A RETAINED CASE.

MR. SCOTT: THAT CASE IS A RETAINED CASE. BUT LET ME BE

EQUALLY CLEAR, WHETHER THAT IS RETAINED, AND WHETHER THIS IS A

CJA CASE, DOES NOT MAKE JANUARY COME AFTER MARCH.

THE COURT: LOOK, I WAS A LAWYER FOR A LONG TIME. I

UNDERSTAND ECONOMICS; I KNOW HOW THEY WORK. OKAY, IS THE

MATTER SUBMITTED?

MR. SCOTT: ABSENT ANY OTHER QUESTIONS, YES, YOUR HONOR.

THE COURT: ALL RIGHT. WELL, LOOK, HERE IS THE PROBLEM:

THIS CASE HAS NOW BEEN PENDING, AND WILL BE PENDING, FOR

ALMOST, WELL, FOUR DAYS SHY OF A YEAR SINCE THE DATE THAT THE

CASE WAS INDICTED. I MADE IT PRETTY CLEAR WHEN WE STARTED DOWN

THIS ROAD, THAT I EXPECTED THIS CASE TO START AND TO GO TO

TRIAL EARLY, EVEN THOUGH IT WAS COMPLEX.

SEE, THERE IS A HUGE -- THERE IS A HUGE PROBLEM THAT

ARISES WITH THESE CASES THAT I FIND. AND THAT IS, SOMETIMES IT

SEEMS LIKE THE MORE TIME THAT WE GIVE, THE WORSE THE CASE GETS.

AND, I MIGHT ADD, NOT THAT IT'S A DETERMINATIVE CONSIDERATION,

BUT IT CERTAINLY IS A CONSIDERATION THAT, I THINK, THE COURTS



54/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

20

HAVE TO TAKE INTO ACCOUNT, AND THAT IS THAT THE CASES GET MORE

EXPENSIVE. THE MORE YOU CONTINUE THEM, THE MORE EXPENSIVE THEY

GET. AND YOU KNOW, AS WE KNOW, WE HAVE A, WHAT IS IT, $16

TRILLION DEBT OR SOMETHING, RIGHT. SO WE HAVE TO BE COGNIZANT

OF ECONOMICS IN THAT REGARD AS WELL.

SO AS TIME GOES BY, THESE CASES DRAG ON, THEY DRAG ON.

THE EXPENSE GOES UP. AND SOMEHOW, SOMETIME, SOMEONE HAS TO

SAY, OKAY, ENOUGH. NOW, IN THIS CASE, I HAD ORIGINALLY -- I

MEAN, I GAVE YOU A MARCH 5TH TRIAL DATE, WHICH WAS QUITE AWAYS

AWAY, AS I RECALL. LIKE JUDGE BURNS -- JUDGE BURNS AND I VERY

MUCH AGREE TO A GREAT CONSENT. FOR EXAMPLE, WHEN WE GET TO

THESE CASES, WE ASK THE GOVERNMENT TO GIVE YOU, ESSENTIALLY, A

ROAD MAP, AND WE TRY TO SIMPLIFY YOUR LIFE, TRY TO MAKE DEFENSE

COUNSEL'S LIFE EASIER AND MINIMIZE THE COST IF WE CAN.

AND THE PROBLEM, OF COURSE, MR. SCOTT, AS I'M SURE BOTH

YOU AND MR. ADAMS AND MR. WARREN KNOW IS, LOOK, ANY TIME WE

CONTINUE A TRIAL, IF WE'RE TALKING ABOUT A TWO- OR THREE-DAY

TRIAL, IT'S USUALLY NO BIG DEAL BECAUSE WE CAN GENERALLY

SQUEEZE THAT IN SOMEWHERE. BUT WHEN WE'RE TALKING ABOUT A CASE

LIKE THIS, ANY TIME WE CONTINUE THAT, THAT JUST HAS AN

EXPONENTIALLY ADVERSE EFFECT ON THE REST OF OUR CALENDARS.

AND AS YOU KNOW, WE HAVE -- I THINK WE'RE THE FOURTH

BUSIEST COURT IN THE NATION. AND SO, YOU KNOW, IT'S HARD FOR

ME TO SAY, OKAY, LET'S CONTINUE THIS TRIAL DATE, AND WE'LL SET

IT SOMEWHERE ELSE. AND ALL THAT DOES IS, IT JUST CREATES A



55/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

21

TIDAL WAVE THAT JUST SORT OF MOVES DOWN THE ROAD.

I THINK I'VE SAID A LOT MORE THAN I NEED TO SAY, TO BE

HONEST WITH YOU. BUT I WANT YOU TO KNOW WHERE I'M COMING FROM.

BECAUSE I ALSO DON'T WANT TO BE DIFFICULT. I THOUGHT I WAS

BEING REASONABLE WHEN I SAID TO YOU FOLKS, LOOK, DON'T TAKE

THIS CASE IF YOU CAN'T BE PREPARED, IF YOU CAN'T BE READY,

DON'T TAKE IT. AND I MEANT IT, AND I SET THE TRIAL DATE FAR

ENOUGH AWAY TO GIVE YOU AN OPPORTUNITY TO DO THAT. NOW THE

FACT THAT YOU HAVE THIS OTHER CONFLICT, WELL, I CAN'T HELP

THAT. I DON'T KNOW HOW THAT WORKS.

I'M NOT GOING TO CONTINUE THE TRIAL DATE. I'M SORRY YOU

GUYS ARE GOING TO HAVE TO WORK -- I THINK YOU HAVE A PARALEGAL.

IF I'M NOT MISTAKEN, MR. ADAMS HAS A PARALEGAL? NO?

MR. ADAMS: NO, YOUR HONOR, NOT IN THIS CASE.

MR. SCOTT: FOR THE RECORD, I DON'T HAVE A PARALEGAL. THE

COURT GAVE ME SOME LAW CLERK HOURS ON THIS CASE.

THE COURT: THAT'S RIGHT. I GAVE YOU A LAW CLERK TO WORK

ON THESE CASES. AND I KNOW YOU HAVE -- YOU HAVE AN ASSOCIATE,

RIGHT?

MR. SCOTT: I HAVEN'T HAD AN ASSOCIATE SINCE JULY OF 2012.

I'M A SOLO PRACTITIONER.

THE COURT: WELL, THERE ARE A WHOLE BUNCH OF PEOPLE OUT

THERE LOOKING FOR WORK.

MR. SCOTT: WILL THE COURT PAY FOR THEM? I'LL TAKE YOU UP

ON THE OFFER IF YOU WANT --



56/154


57/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

23

INSTRUCTIONS, ETC.

I UNDERSTAND THAT AS THE EVIDENCE COMES IN, WE MIGHT HAVE

TO CHANGE OR MODIFY OR ADD TO THE JURY INSTRUCTIONS, BUT I

THINK WE CAN GET A JUMP ON IT AND GET STARTED.

SO, ANYTHING ELSE? MR. ADAMS?

MR. ADAMS: YOUR HONOR, I UNDERSTAND THAT THE COURT MAY BE

TIME SCREENING A POSSIBLE JURY PANEL?

THE COURT: YEAH. WE WILL DO THAT. WE DON'T WANT JURORS

THAT AREN'T GOING TO BE ABLE TO SERVE ON THE PANEL SO --

MR. ADAMS: I THINK WE WOULD LIKE TO HAVE ACCESS. I KNOW

I WOULD LIKE TO HAVE ACCESS TO THOSE MATERIALS. SO IF THERE

ARE ANY OBJECTIONS -- IN OTHER WORDS, SOME PEOPLE WILL WRITE

EXCUSES THAT MAY INVOLVE A JUDGMENT CALL, AND WE MAY WANT TO

WEIGH IN ON THAT JUDGMENT. WOULD WE BE ABLE TO BE PART OF THAT

PROCESS?

THE COURT: WELL, YOU KNOW, I'LL TELL YOU WHAT WE CAN DO,

I JUST WON'T SCREEN THEM. I'LL BRING THEM IN HERE, AND THEN

I'LL ASK THEM IF THEY HAVE ANY PROBLEMS SERVING ON A TRIAL OF A

GIVEN DURATION. AND THEN I'LL TURN TO YOU AND ASK IF YOU HAVE

ANY OBJECTION TO MY EXCUSING THEM, AND IF YOU DO, THEN WE'LL

KEEP THEM. AND IF YOU DON'T, WE'LL EXCUSE THEM. HOW DOES THAT

WORK? OKAY, GOOD ENOUGH? THAT WAY WE DON'T HAVE TO PROVIDE

ALL OF THAT TO YOU AHEAD OF TIME.

MR. ADAMS: OKAY.

THE COURT: ANYTHING ELSE?



58/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

24

THE CLERK: WHEN ARE THE MOTIONS IN LIMS DUE BY?

THE COURT: MOTIONS IN LIM ARE DUE BY JANUARY 7TH, OKAY.

MR. SCOTT: YOUR HONOR, I THINK I HAVE A REQUEST PENDING

EX PARTE FOR AN INVESTIGATOR. AND I THINK IT HAS BEEN PENDING

FOR SOME TIME. AND ONE HAS NOT BEEN HIRED YET ON THE CASE.

THE COURT: YOU KNOW, THE PROBLEM I'M HAVING ON THIS, I

HAVE AN IN-BOX, AND MY -- IN MY CHAMBERS, WHERE THESE ARE

DELIVERED, THAT ARE PUT. AND I GO THROUGH THAT BOX AT LEAST

ONCE A WEEK. AND I DO NOT REMEMBER -- I KNOW MR. ADAMS SAID HE

HAD SOMETHING THAT HE SUBMITTED. COUNSEL, I JUST HONESTLY

DON'T -- IN FACT, IF YOU'LL GIVE ME A MINUTE, I'M GOING TO TAKE

A MINUTE, I'M GOING TO GO BACK AND LOOK AT MY BOX AND SEE WHAT

IS BACK THERE. SO SIT TIGHT FOR A MINUTE, OKAY.

MR. SCOTT: YES, YOUR HONOR. THE ONE I'M THINKING OF IS

FILE STAMPED RECEIVED, I THINK, APRIL 17TH OR SOMETHING, AND

IT'S A REQUEST FOR INVESTIGATOR HOURS FOR STEVEN BELIZZI,

B-E-L-I-Z-Z-I, FOR 100 INVESTIGATOR HOURS IS WHAT I'M ASKING

FOR.

THE COURT: YOU KNOW WHAT, LET ME GO LOOK. THE FILE STAMP

MEANS IT WAS RECEIVED BY MY CHAMBERS?

MR. SCOTT: BY THE CLERK'S OFFICE. IT WAS FILED EX PARTE

WITH THE CLERK, WHICH IS WHAT I UNDERSTAND TO BE THE PROCEDURE

TO FILE SOMETHING EX PARTE.

MR. ADAMS: AND MINE, YOUR HONOR, IS NOVEMBER 13TH. AND I

HONESTLY DON'T WANT TO SAY ON THE RECORD WHAT IT'S FOR. BUT



59/154

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

25

IT'S FOR ANCILLARY SERVICES.

THE COURT: LET ME -- I'M NOT GOING TO -- LET ME SAY THIS

ABOUT THAT, FOLKS, IF YOU FILE A MOTION, AND YOU DON'T GET A

RESPONSE, IF YOU FILED SOMETHING BY APRIL 13TH, AND YOU HAVEN'T

GOTTEN A RESPONSE, LET ME SUGGEST TO YOU THAT YOU SHOULDN'T BE

SHY ABOUT CALLING MY CHAMBERS AND ASKING OR INQUIRING ABOUT --

I KNOW OTHER LAWYERS DO THIS, SO IF YOU WOULD

Date post:	06-Jul-2018
Category:	Documents
Upload:	adam
View:	222 times
Download:	0 times

Spanier Govt Response Binder2

Documents