FILED

Case 2:11-cv-03695-RDP-TMP Document 355 Filed 08/31/15 Page 1 of 36

2015 Aug-31 PM 03:42

U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
DRUMMOND COMPANY, INC.,
Plaintiff ,
vs.
TERRENCE P. COLLINGSWORTH,
individually and as agent of Conrad & Scherer,
LLP; and CONRAD & SCHERER, LLP,
Defendants .

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Case No. 2:11-cv-3695-RDP-TMP

Contains information designated as
Confidential Information under the
Protective Order.

DRUMMOND COMPANY, INC.S MEMORANDUM OF LAW REGARDING THE

CRIME-FRAUD EXCEPTION

William Anthony Davis, III (ASB-5657-D65W)

H. Thomas Wells, III (ASB-4318-H62W)
Benjamin T. Presley (ASB-0136-I71P)
STARNES DAVIS FLORIE LLP
P.O. Box 59812
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099

Sara E. Kropf
LAW OFFICE OF SARA KROPF PLLC
1001 G St. NW, Suite 800
Washington, DC 20001
(202) 627-6900

Attorneys for Drummond Company, Inc.

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TABLE OF CONTENTS
TABLE OF AUTHORITIES.................................................................................................................. iii
ARGUMENT .......................................................................................................................................1
I.

THE CRIME-FRAUD EXCEPTION APPLIES TO ILLEGAL OR FRAUDULENT CONDUCT

COMMITTED BY LAWYERS. ......................................................................................1

II.

DRUMMOND SHOULD BE ENTITLED TO EXPLORE THESE AREAS REGARDLESS OF

WHETHER THE CRIME-FRAUD EXCEPTION APPLIES.....................................................2

III. THE CRIME-FRAUD EXCEPTION AS APPLIED TO THIS CASE. .........................................4

A.

The Legal Framework .................................................................................4

B.

The first prong a prima facie case.............................................................6

C.
IV.

1.

Witness bribery and suborning perjury............................................8

2.

Fraud on the Court .........................................................................12

The second prong - related to the crime or fraud ...................................13

DEFENDANTS REBUTTAL ...................................................................................21

A.

Defendants were already afforded the opportunity to provide a reasonable

explanation for their conduct, and they utilized that opportunity to
perpetrate another fraud on this Court. ......................................................22

B.

Defendants explanation for their conduct is insufficient as a matter of

law and contradicted by a mountain of documentary evidence.................26

CERTIFICATE OF SERVICE ...............................................................................................................30

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TABLE OF AUTHORITIES
Cases

Page(s)

1100 West, LLC v. Red Spot Paint and Varnish Co., Inc.,
No. 1:05-cv-1670-LJM-JMS, 2009 WL 232060 (S.D. Ind. Jan. 30, 2009).........................6
AKH Co. v. Universal Underwriters Ins. Co.,
No. 13-2003-JAR-KGG, 2014 WL 2991130 (D. Kan. July 3, 2014) reconsideration
denied, No. 13-2003-JAR-KGG, 2014 WL 4097602 (D. Kan. Aug. 20, 2014)..................6
Blanchard v. EdgeMark Fin. Corp.,
192 F.R.D. 233 (N.D. Ill. 2000)...........................................................................................6
Chambers v. NASCO, Inc.,
501 U.S. 32, 111 S. Ct. 2123 (1991)....................................................................................4
Chevron Corp. v. Donziger,
No. 11 Civ. 0691(LAK), 2013 WL 1087236 (S.D.N.Y. Mar. 15, 2013).......................1, 27
Chevron Corp. v. Donziger,
974 F. Supp. 2d 362 (S.D.N.Y. 2014)..................................................................................1
Chevron Corp. v. Salazar,
275 F.R.D. 437 (S.D.N.Y. 2011) .........................................................................................1
Cleveland Hair Clinic, Inc. v. Puig,
968 F. Supp. 1227 (N.D. Ill. 1996) ......................................................................................6
Gutter v. E.I. Dupont De Nemours,
124 F. Supp. 2d 1291 (S.D. Fla. 2000) ......................................................................5, 7, 21
Handgards, Inc. v. Johnson & Johnson,
413 F. Supp. 926 (N.D. Cal. 1976) ......................................................................................3
In re Grand Jury (G.J. No. 87-03-A),
845 F.2d 896 (11th Cir. 1988) ...........................................................................................13
In re Grand Jury Investigation (Schroeder),
842 F.2d 1223 (11th Cir. 1987) .......................................................................4, 5, 6, 13, 14
In re Grand Jury Proceedings,
87 F.3d 377 (9th Cir. 1996) .................................................................................................7
In re Grand Jury Proceedings,
492 F.3d 976 (8th Cir. 2007) .............................................................................................27

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In re Impounded Case (Law Firm),

879 F.2d 1211 (3d Cir. 1989)...............................................................................................1
In re Katrina Canal Breaches Consol. Litig.,
No. CIV.A. 05-4182, 2008 WL 4401970 (E.D. La. Sept. 22, 2008) ...................................7
In re Murphy,
560 F.2d 326 (8th Cir. 1977) ...............................................................................................2
In re Sealed Case,
676 F.2d 793 (D.C. Cir. 1982) .........................................................................................5, 7
JTR Enterprises, LLC v. An Unknown Quantity of Colombian Emeralds, Amethysts & Quartz
Crystals,
297 F.R.D. 522 (S.D. Fla. 2013)..................................................................................21, 22
Major Tours, Inc. v. Colorel,
No. CIV 05-3091(JBS/JS), 2009 WL 2413631 (D.N.J. Aug. 4, 2009) ............................21
Matter of Feldberg,
862 F.2d 622 (7th Cir. 1988) ...............................................................................................7
Moody v. I.R.S.,
654 F.2d 795 (D.C. Cir. 1981) .............................................................................................2
Miccosukee Tribe of Indians of Fla. v. United States,
516 F.3d 1235 (11th Cir. 2008) .........................................................................................20
Nix v. Whiteside,
475 U.S. 157, 106 S. Ct. 988 (1986)....................................................................................9
Rambus, Inc. v. Infineon Tech. AG,
220 F.R.D. 264 (E.D. Va. 2004) ........................................................................................21
Sheehan v. Mellon Bank, N.A.,
No. CIV. A. 95-2969, 1996 WL 243469 (E.D. Pa. Apr. 23, 1996) .....................................6
Stern v. OQuinn,
253 F.R.D. 663 (S.D. Fla. 2008)..........................................................................................3
United States v. Bradberry,
466 F.3d 1249 (11th Cir. 2006) ...........................................................................................8
United States v. Jacobs,
117 F.3d 82 (2d Cir. 1997)...................................................................................................1

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Universal Oil Products Co. v. Root Refining Co.,

328 U.S. 575, 66 S.Ct., 1176 (1946)....................................................................................4
Wachtel v. Guardian Life Ins.,
No. CIV 01-4183 FSH, 2007 WL 1752036 (D.N.J. June 18, 2007)..................................21
Statutes and Rules

Page(s)

18 U.S.C. 201(c) .............................................................................................................4, 8, 9, 27

18 U.S.C. 1622..............................................................................................................................8
31 U.S.C. 5316(a)(1).....................................................................................................................8
31 U.S.C. 5324..............................................................................................................................8
Ala. Code 13A-10-121(a).........................................................................................................4, 8, 9
Ala. R. Prof. Cond. 3.3(a) ................................................................................................................8
Other Authorities

Page(s)

Wright & Miller, Fed. Prac. and Proc. 2026 (Supp. 1994) ...........................................................3
4 J. Moore, Federal Practice Proc. 26.64(4), at 26-447 (2d ed. 1975)..........................................3

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I.

THE CRIME-FRAUD EXCEPTION APPLIES TO ILLEGAL OR FRAUDULENT CONDUCT

COMMITTED BY LAWYERS.
To the extent Defendants argue that the crime-fraud exception is inapplicable because the

Balcero plaintiffs were either unaware or uninvolved in Defendants crimes and frauds, their
argument is unavailing.

[T]he crime-fraud exception to work product protection and the

attorney-client privilege is established where there is probable cause to believe that a fraud or
crime has been committed by someone and that the communications in question were in
furtherance of the fraud or crime. Chevron Corp. v. Donziger, No. 11 Civ. 0691(LAK), 2013
WL 1087236, at **3, 28 (S.D.N.Y. Mar. 15, 2013) (quoting United States v. Jacobs, 117 F.3d
82, 87 (2d Cir. 1997)) (crime-fraud exception applied where there was probable cause that
Steven Donziger1 and two of his Ecuadorean local counsel engaged in criminal or fraudulent
acts). Thus, even though the privilege belongs to the client, it may be pierced by wrongdoing of
the attorney, even without the knowledge or intent of the client. Chevron Corp. v. Salazar, 275
F.R.D. 437, 452 (S.D.N.Y. 2011) (collecting cases standing for the proposition that crimes or
frauds committed by attorneys trigger the exception). The fact that Defendants are a lawyer and
a law firm does not render the crime-fraud exception inapplicable. Nor does the fact that their
unwitting clients in Balcero did not participate in their crimes and frauds.
Other federal courts agree. In re Impounded Case (Law Firm), 879 F.2d 1211, 1213-14
(3d Cir. 1989) (collecting cases and holding [i]t is not apparent to us what interest is truly
served by permitting an attorney to prevent this type of investigation of his own alleged criminal
conduct by asserting an innocent clients privilege with respect to documents tending to show

American lawyer Steven Donziger was recently found liable in a highly publicized civil RICO case premised on
his efforts to obtain a fraudulent judgment against Chevron through bribery and falsification of evidence in Ecuador.
Chevron Corp. v. Donziger, 974 F. Supp. 2d 362 (S.D.N.Y. 2014). He is one of Mr. Collingsworths fellow human
rights lawyers, from whom Mr. Collingsworth has solicited funds for litigation against Drummond. Doc. 118-2
(IRA Launch Party email).

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criminal activity by the lawyer. On the contrary, the values implicated, particularly the search for
the truth, weigh heavily in favor of denying the privilege in these circumstances.); Moody v.
I.R.S., 654 F.2d 795, 800 (D.C. Cir. 1981) (It would indeed be perverse, as appellant contends,
to allow a lawyer to claim an evidentiary privilege to prevent disclosure of work product
generated by those very activities the privilege was meant to prevent. [] An attorney should
not be able to exploit the privilege for ends outside of and antithetical to the adversary system
any more than a client who attempts to use the privilege to advance criminal or fraudulent
ends.); In re Murphy, 560 F.2d 326, 336 n.19 (8th Cir. 1977) (a court may conclude that
opinion work product is not immune if it contains inculpatory evidence of the attorneys own
illegal or fraudulent activities).
II.

DRUMMOND

SHOULD BE ENTITLED TO EXPLORE THESE AREAS REGARDLESS OF

WHETHER THE CRIME-FRAUD EXCEPTION APPLIES.

At the evidentiary hearing, the issue is what was done by the Defendants, their lawyers,
or both, in the course of repeatedly misrepresenting the facts to this Court. Drummonds motion
to compel set forth 9 areas of questioning relevant to this issue. Doc. 311 at 6-25. This Court
explained that with respect to . . . dealings with
I think
those are not attorney/client privilege. Those would be work product privilege. So we have to
adapt In Re: Grand Jury to deal with a work product assertion of privilege. Doc. 341 (Aug. 26,
2015 Hrg. Tr.) at 38:13-19.
This Courts analysis should begin with the fact that work-product is discoverable in
situations where there is no allegation that an attorney or law firm engaged in criminal or
fraudulent activity. In fact, the Court need not reach the crime-fraud exception to conclude that
the requested information is discoverable. It is hornbook law that information that would

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otherwise be protected must be produced if the knowledge, mental impressions, opinions, and
advice of a lawyer or law firm are at issue in a litigation to which the lawyer or law firm is a
party. Wright & Miller, Fed. Prac. and Proc. 2026 (Supp. 1994). Stated differently, when
the activities of counsel are inquired into because they are at issue in the action before the court,
there is cause for production of documents that deal with such activities, though they are work
product. 4 J. Moore, Fed. Prac. Proc. 26.64(4), at 26-447 (2d ed. 1975).
Federal courts across the country agree. Stern v. OQuinn, 253 F.R.D. 663 (S.D. Fla.
2008) (lawyer sued for defamation required to produce, over his objections and claims of workproduct, documents bearing on his subjective belief in the truth of the statements at issue);
Handgards, Inc. v. Johnson & Johnson, 413 F. Supp. 926, 931 (N.D. Cal. 1976) (Plaintiff's
success in the instant action depends upon a showing that defendants pursued the prior suits
knowing they would be unsuccessful on the merits. Since the lawyers who managed and
supervised the former litigation for the defendants are being called as witnesses to express their
opinions as to the merits of the prior suits and the validity of the underlying patents, plaintiff has
a particularized and compelling need for the production of the relevant work product of these
attorneys. Without discovery of the work product, plaintiff will be unable to ascertain the basis
and facts upon which the opinions of these witnesses are based.).
Here, the knowledge [and] mental impressions of Defendants and their counsel, Wright
& Miller, Fed. Prac. and Proc. 2026, are directly at issue at the sanctions hearing. Defendants
have utilized their counsel to file fraudulent pleadings and discovery responses, and to alter
documents to conceal evidence of witness payments. As this Court stated, the issue is
Doc. 311-2
(Collingsworth Dep.) at 351:22-25. Defendants cannot obstruct Drummonds efforts to find out

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the answer to these questions by claiming they acted in good faith, and then hide behind the
work-product doctrine when Drummond tries to test that claim.
III.

THE CRIME-FRAUD EXCEPTION AS APPLIED TO THIS CASE

A.

The Legal Framework

The Eleventh Circuit employs a two-part test when applying the crime-fraud exception:
First, there must be a prima facie showing that the client was engaged in criminal
or fraudulent conduct when he sought the advice of counsel, that he was planning
such conduct when he sought the advice of counsel, or that he committed a crime
or fraud subsequent to receiving the benefit of counsels advice. Second, there
must be a showing that the attorneys assistance was obtained in furtherance of
the criminal or fraudulent activity or was closely related to it.
In re Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987).2 The parties
agree that the crime-fraud exception is triggered by statutory crimes and offenses, including
witness bribery under 18 U.S.C. 201(c) and Ala. Code 13A-10-121.3
Egregious fraud on the Court, which is what Drummond alleges Defendants have
perpetrated in both Balcero and in this case (see Docs. 174 & 190), also triggers the crime-fraud
exception.4 Defendants argument contravenes the overwhelming weight of authority. Those
cases establish that a fraud on the court triggers the crime-fraud exception and allows discovery
2

Defendants do not dispute that the crime-fraud exception applies to both the attorney-client privilege and the workproduct doctrine. Doc. 353 at 3 (The crime-fraud exception is one of the ways in which otherwise undiscoverable
attorney-client communications and work product can become discoverable.); see also Cox v. Admr U.S. Steel &
Carnegie, 17 F.3d 1386, 1422 (11th Cir.) opinion modified on reh'g, 30 F.3d 1347 (11th Cir. 1994) (The exception
applies to work-product in the same way that it applies to the attorney-client privilege.).

Drummond has consistently cited these statutes in its crime-fraud briefing since July 2014. See, e.g., Doc. 348-2
(Drummonds Crime-Fraud Brief) at 13 (Under both Alabama and federal law, it is a crime to offer, promise or
give anything of value to a person testifying in a legal proceeding with the intent of influencing the testimony of that
person. See 18 U.S.C. 201 and Ala. Code 13A-10-121(a).).
4

In addition to the crime-fraud exception, it is well settled that a court has the power to conduct an independent
investigation in order to determine whether it has been the victim of fraud. Chambers v. NASCO, Inc., 501 U.S. 32,
44, 111 S. Ct. 2123, 2132 (1991) (citing Universal Oil Products Co. v. Root Refining Co., 328 U.S. 575, 580, 66
S.Ct., 1176, 1179 (1946)). A litigant cannot frustrate a Courts use of its inherent power by improperly cloaking
evidence of its fraudulent conduct with the attorney-client privilege or work-product doctrine: The power to
unearth such a fraud is the power to unearth it effectively. Accordingly, a federal court may bring before it by
appropriate means all those who may be affected by the outcome of its investigation. Universal, 328 U.S. at 580.

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of all information relating to that fraud.

Indeed, the doctrine is called the crime-fraud exception, not the crime exception. In
re Sealed Case, 676 F.2d 793 (D.C. Cir. 1982), one of the cases cited by the Schroeder court
when enunciating the Eleventh Circuits prima facie standard, 842 F.2d at 1226, held that [t]he
possibility that Companys chairman lied to or attempted to mislead the IRS with his affidavit is
enough to create a prima facie showing and invoke the exception. Although it may not be
sufficient to convict Companys chairman or anyone else of any crimes, . . . [a]ll that is required
is that the likelihood of a violation be sufficient as a prima facie matter to warrant abridging any
work product privilege that would normally attach to documents relating to the possible
violation. In re Sealed Case, 676 F.2d at 815-16 and n.92.
The Gutter v. E.I. Dupont De Nemours case, cited extensively by Defendants, see Doc.
174-13 at 12-14 & 19-20, is also illustrative. 124 F. Supp. 2d 1291 (S.D. Fla. 2000). The Gutter
court cited, discussed and applied Schroeder, finding that the crime-fraud exception applied
where DuPont, through its attorneys, misrepresented the existence of certain documents in prior
litigation. 124 F. Supp. 2d 1291. In particular, the Southern District of Florida noted that
DuPont and its attorneys made deceptive representations and privilege logs, intentionally
failed to accurately respond to three motions to compel, misrepresented the status of the Alta
documents, engaged in a pattern of concealment, and had a common practice of nonproduction that extended over the totality of the discovery process in earlier litigation, thereby
justifying the application of the crime-fraud exception. Id. at 1313.
Like the DuPont defendants, Mr. Collingsworth and Conrad & Scherer engaged in a
pattern of concealment in Balcero and in this case, repeatedly making knowingly false
representations in pleadings, affidavits, correspondence, and open court, and employing a pattern

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of non-production with respect to their payments to witnesses and their relationship with Ivan
Otero. See Doc. 243 at 1-458. That is a massive fraud on this Court, and it is independently
sufficient to invoke the crime-fraud exception.5
B.

The first prong a prima facie case

Schroeder teaches that the first prong is satisfied by a showing of evidence that if
believed by a trier of fact, would establish the elements of some violation that was ongoing or
about to be committed. Doc. 341 (Aug. 26, 2015 Hrg. Tr.) at 25:10-13 (quoting In re Grand
Jury Investigation (Schroeder), 842 F.2d at 1226). The Eleventh Circuit described the evidence
in Schroeder that met this prong as follows:
Here there is no doubt that the first prong of the test is satisfied. The government
submitted a summary of the evidence as well as an I.R.S. Special Agents
summary of the testimony Schroeder provided in an interrogation by that agent.
Those submissions reveal that Schroeder reported a moderate income from 1978
to 1984, that he possessed cash in amounts grossly disproportionate to his
reported income, and that he purchased assets with values grossly exceeding his
reported income. For example, during one of the years under investigation,
Schroeder purchased a house with a value approximately ten times his reported
income for that year. He paid the entire purchase price of the house with a
cashier's check that he had purchased with cash. On the basis of those facts, the
district court did not abuse its discretion in finding that the government had
established a prima facie showing that Schroeder willfully made false statements
on his income tax returns by failing to report all of his income.

Numerous courts have analyzed and applied the crime-fraud exception in situations involving frauds perpetrated on
courts. See Cleveland Hair Clinic, Inc. v. Puig, 968 F. Supp. 1227, 1241 (N.D. Ill. 1996) (invoking the crime-fraud
exception where the wrongful scheme included deceptive conduct in this Court violative of Rules 11 and 37 and 28
U.S.C. 1927, and sanctionable pursuant to this Courts inherent powers); Blanchard v. EdgeMark Fin. Corp., 192
F.R.D. 233, 241 (N.D. Ill. 2000) (collecting cases where the crime-fraud exception has been applied to attorneys
conduct that is unprofessional or unethical, an intentional tort, or sanctionable); 1100 West, LLC v. Red Spot Paint
and Varnish Co., Inc., No. 1:05-cv-1670-LJM-JMS, 2009 WL 232060 (S.D. Ind. Jan. 30, 2009) (crime-fraud
exception applied where defendants perpetrated a fraud on the court by misrepresenting the existence of responsive
documents); Sheehan v. Mellon Bank, N.A., No. CIV. A. 95-2969, 1996 WL 243469, at *2 (E.D. Pa. Apr. 23, 1996)
(crime fraud exception applies where a litigant perpetrate[s] a fraud on the court). See also AKH Co. v. Universal
Underwriters Ins. Co., No. 13-2003-JAR-KGG, 2014 WL 2991130, at *18 (D. Kan. July 3, 2014) reconsideration
denied, No. 13-2003-JAR-KGG, 2014 WL 4097602 (D. Kan. Aug. 20, 2014) (These facts, taken as a whole,
establish a prima facie case sufficient to invoke the crime-fraud exception to the attorney-client privilegefalse
representations made by Plaintiff as to a material fact or the suppression of facts which Plaintiff was under a legal or
equitable obligation to communicate and in respect of which [it] could not be innocently silent....).

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Id. at 1227. As the Schroeder opinion illustrates, Drummond need not prove, and this Court does
not have to find, that Defendants are guilty of a crime or fraud beyond a reasonable doubt. The
question here is not whether the evidence supports a verdict but whether it calls for inquiry.
Matter of Feldberg, 862 F.2d 622, 625-26 (7th Cir. 1988).
Courts uniformly hold that whether a crime has actually been committed is not the test
for piercing the privilege, rather all that is required now is the much lower threshold of
establishing a prima facie case. Gutter, 124 F. Supp. 2d at 1304 (quoting the Special Master);
see also In re Sealed Case, 676 F.2d at 815-16 & n.92 (it is not necessary to convict Companys
chairman or anyone else of any crimes, . . . [a]ll that is required is that the likelihood of a
violation be sufficient as a prima facie matter to warrant abridging any work product privilege);
In re Grand Jury Proceedings, 87 F.3d 377, 381 (9th Cir. 1996) (a party is not obliged to come
forward with proof sufficient to establish the essential elements of a crime or fraud beyond a
reasonable doubt); In re Katrina Canal Breaches Consol. Litig., No. CIV.A. 05-4182, 2008 WL
4401970, at **10-11 (E.D. La. Sept. 22, 2008) (stating that [t]he burden of establishing a prima
facie case of crime for this purpose in the civil discovery context is not great and is certainly less
than the standard that a district attorney or other prosecutor would use in pursuing criminal
charges and holding that Lafarges investigators admittedly entered into homes intentionally
and took something of value without the consent of the owners of the buildings or the
timepieces. Their intent to keep the timepieces permanently could be inferred from their actions,
which includes having kept the timepieces for almost three years without any attempt to locate or
notify the rightful owners. Centannis declaration that his investigators did not intend to keep the
timepieces permanently may be disregarded, according to the well established Fifth Circuit law
cited above. His denial of such an intent would certainly be a defense, but would be subject to a

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credibility determination by the factfinder.

At this stage, that credibility fact dispute is

inadequate to defeat the inference of criminal intent necessary to establish a prima facie case of
simple burglary or theft.).
1.

Witness bribery and suborning perjury 6

This Court has already stated that

. Doc. 341 (Aug. 26, 2015
Hrg. Tr.) at 22:5-7. Under both Alabama and federal law, it is a crime to offer, promise or give
anything of value to a person testifying in a legal proceeding with the intent of influencing the
testimony of that person. See 18 U.S.C. 201 and Ala. Code 13A-10-121(a). Both statutes
proscribe any payments to witnesses that exceed actual costs incurred as a result of testifying.
Subornation of perjury consists in procuring or instigating another to commit the
crime of perjury.
It is essential to subornation of perjury that the suborner should have known or
believed or have had good reason to believe that the testimony given would be
false; that he should have known or believed that the witness would testify
willfully and corruptly, and with knowledge of the falsity; and that he should have
knowingly and willfully induced or procured the witness to give such false
testimony.
United States v. Bradberry, 466 F.3d 1249, 1254 (11th Cir. 2006) (citations omitted). See also
18 U.S.C. 1622; Ala. R. Prof. Cond. 3.3(a). The Bradberry court went on to hold that [b]y
knowingly facilitating the presentation of false testimony before the court, a defendant does more
than just allow a witness to give perjured testimony; rather, he acts in a manner that obstructs the
6

Drummond limits its discussion of criminal violations in this brief to witness bribery and suborning perjury, as
those are the crimes that bear directly on the specific questions on which Drummond moved to compel responses.
In prior crime-fraud briefing, Drummond set forth evidence of other crimes committed by Defendants, including
illegally structuring currency transactions in violation of 31 U.S.C. 5316(a)(1) & 5324, as well as harboring a
fugitive from justice. See, e.g., Doc. 348-2 at 19-20. For example, Defendants structured a $20,000 cash payment
to a fact witness in violation of reporting requirements. Docs. 118 at 6-7; 109-1. Drummond does not discuss those
crimes herein, as the answers to the questions posed to Mr. Collingsworth during his deposition arguably do not
relate to these particular crimes. Drummonds omission of any discussion of those two crimes, or of any other
crimes or frauds, should not be construed as any type of tacit admission that there are not other crimes or frauds
perpetrated by the Defendants that are also sufficient to trigger the crime-fraud exception.

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administration of justice. Id. at 1255. An attorney who aids false testimony by questioning a
witness when perjurious responses can be anticipated risks prosecution for subornation of
perjury. Nix v. Whiteside, 475 U.S. 157, 169, 106 S. Ct. 988, 995 (1986).
Blanco, El Tigre, Samario, and Charris are fact witnesses, and they all received
payments from Defendants litigation team amounting to hundreds of thousands of dollars. See
Docs 243 at 21-74. As this Court already noted, those payments generally fall into one of
three categories:

Doc. 341 (Aug. 26, 2015 Hrg. Tr.) at 17:3-13. It is also undisputed that all of those witnesses
provided sworn testimony against Drummond in Balcero. These undisputed facts, on their face,
establish a prima facie case that these criminal statutes have been violated. 7
Even within the last week, there have been critical developments in Colombia that
conclusively establish a prima facie case of witness bribery and suborning perjury. As this Court
knows, in May and June of this year, Defendants strenuously objected to Drummonds

The undisputed evidence establishes beyond a reasonable doubt that the payments to Blanco violate 18 U.S.C.
201(c) and Ala. Code 13A-10-121. At least $120,000 was paid to Blanco, Docs. 174-2, 174-20 & 342-20, and Mr.
Collingsworth testified that these payments were
for his testimony against Drummond. Doc. 174-7
at 11. Mr. Collingsworth also admits that Blanco
Doc. 174-2 at 6.
That is precisely what the plain language of 18 U.S.C. 201(c) defines as a felony: Whoever . . . directly or
indirectly gives, offers or promises anything of value to any person, for or because of the testimony under oath or
affirmation, given or to be given, by such person as a witness . . . shall be fined or imprisoned up to two years, or
both. Accordingly, even if this Court were to take the unprecedented step of requiring Drummond to conclusively
prove beyond a reasonable doubt that every element of a criminal offense is satisfied in order to meet the first prong
of the crime-fraud exception, Drummond has made that showing with respect to the Blanco payments.

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emergency request that it be allowed to provide the Colombian Fiscalia with evidence of
Defendants witness payments. After receiving letter briefs, ordering the parties to meet and
confer, holding an emergency telephonic hearing, and an in-chambers conference, Docs 237 &
238, this Court entered an order on June 4, 2015 that allowed Drummond to provide information
to the Colombian Fiscalia. Doc. 239. Last Tuesday, the Colombian Fiscalia released a 50 page
order, finding that there was insufficient evidence to arrest Mr. Araujo for the union leader
murders. Ex. 1 (August 25, 2015 Fiscalia Opinion) at 49.
Particularly relevant for purposes of this brief, the Fiscalias August 25th opinion sets
forth in detail the contradictions in the sworn testimony provided by Defendants fact
witnesses to Colombian authorities with the testimony they have submitted to this Court. The
Fiscalia describes Defendants fact witnesses as wind vanes gyrating depending on how the
wind blows. Id. at 17. The opinion also repeatedly notes how the contradictions in the
witnesses testimony coincides with their contact with Mr. Collingsworth and his firm:
It has caught the eye of this prosecution office, how [Blancos] statements have
been changing radically throughout his different procedural declarations, finding
that, as the defense has pointed out, his statements changed from the moment he
was contacted by the U.S. attorneys, who seek to obtain diverse evidence to
present to the U.S. courts.
[. . .]
[Charris] omitted to state that he was contacted by U.S. attorneys, who seek to
obtain different evidentiary means to argue in U.S. court and which have
seemingly been paying him monthly sums of money through Western Union, on
behalf of GILMA YINETH BAEZA ACOSTA, who worked as an assistant to
the attorneys trying the case in U.S. courts. . . . These contradictions and
omissions are very serious, and they detract from the credibility of his
declarations, given that there is no consistency in what he reports, . . . The
foregoing is compounded by the fact that the collaboration provided by JAIRO
DE JESUS CHARRYS, who in the beginning seemed selfless and sincere, now
seems suspicious, because his purpose could be the securing of economic
benefits, as asserted by the defense

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[. . .]
As such, [Duartes] testimony also lacks credibility, since it seems like coming
out of the blue, and he is a witness without backing or mention by the other
declarants, who reports on aspects and circumstances that were proven untrue by
other evidence.
[. . .]
As seen, these versions have varied substantially, and every time, they are richer
in details, but at this time, the prosecution office questions [Samarios] credibility,
since, just like with the previous declarants, his narration has varied to the extent
his relation with the U.S. attorneys has become closer, and coincides with the
payments made by such law firm from the United States, to the family of the
declarant, since 2009, approximately. . . . Dr. IVAN ALFREDO OTERO
MENDOZA was [Samario and El Tigres] defense attorney in this process, which
attorney works in coordination with the counterpart of DRUMMOND in the U.S.
proceedings, as acknowledged by the law firm of Collingsworth. Otero works
with them since December 2008 and helps them in the case against Drummond in
the United States, in exchange for a success fee. . . . In this regard, this
prosecution office must mention that it shares the belief of the defense in the
sense that they variation in the testimony of [Samario] is suspect. He now
appears as a very suspicious witness, because his version is not selfless, but
instead, corresponds to a compensation or arrangement with the attorneys of the
U.S. law firm.
[. . .]
[I]t catches the eye of this prosecution office the fact that from the moment in
which civil proceedings were begun in the United States against Drummond, most
of the persons involved in this process began to render testimonies to submit them
as evidence in those proceedings, changing their initial statements but now these
new statements become biased, suspect and detached from reality.
Id. at 21, 25, 27, 35, 40.
The August 25th Fiscalia opinion also totally eviscerates Defendants story that their
witness security payments are simply business as usual in Colombia. Indeed, rather than
endorsing those payments, the Colombian Fiscalia has ordered an investigation:
To hear, in an expansion inquiry, the declaration of JAIME BLANCO MAYA,
LIBARDO DUARTE, ALCIDES MANUEL MATTOS TABARES, JAIRO
DE JESUS CHARRIS CASTRO, JOSE ARISTIDES PEINADO, OSCAR
DAVID PEREZ VERTEL, JHON JAIRO ESQUIVEL CUADRADO alias

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EL TIGRE, to inform everything related to the alleged sums of money they have
received from the U.S. attorneys who have filed suit against Drummond in the
United States.
Id. at 49. In light of the above evidence, Defendants cannot seriously argue that their selfserving statements disperse any inference that a crime or fraud has been committed. Doc. 341
(Aug. 26, 2015 Hrg. Tr.) at 39:24-25.
2.

Fraud on the Court

In its Proposed Findings of Fact, Drummond set forth over 50 specific misrepresentations
relating to the scope, nature and extent of their witness payments, as well as their relationship
with Ivan Otero, the criminal lawyer for most of Defendants fact witnesses. See Doc. 243 at
1-458. One of those misrepresentations was made in open court in response to a direct
question from this Court.

Doc. 123 (Apr. 21, 2014 Hrg. Tr.) at 30:1-31:19.

Critically,

Defendants do not dispute that those representations were made and, for the vast majority,
concede that they are

See, e.g., Doc. 282 at 278-281 (

or

).
As this Court has already recognized, there is ample evidence that Defendants repeatedly
and knowingly made false statements to this Court and Drummond in an effort to fraudulently
conceal the scope, nature and extent of their witness payments:

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Ex. 2 (May 21, 2015 Hrg. Tr.) at 21:9-23:1 (emphasis added). Defendants conduct is not
. Id. at 22:22-23. It is prima facie evidence of a fraud on the Court, and it
warrants the invocation of the crime-fraud exception.
C.

The second prong - related to the crime or fraud

[A] party can satisfy the second prong of Schroeder by showing that the
communication is related to the criminal or fraudulent activity established under the first
prong. In re Grand Jury (G.J. No. 87-03-A), 845 F.2d 896, 898 (11th Cir. 1988) (citation
omitted). Whether a document or communication is related to a crime or fraud should not be
interpreted restrictively. Schroeder, 842 F.2d at 1227.
The Schroeder case is once again instructive, and illustrates how the crime-fraud
exception applies to allow a litigant full discovery into the crime or fraud. The crime at issue
there was the defendants failure to accurately report income on his tax returns. In affirming the
district courts application of the crime-fraud exception, the Eleventh Circuit rejected the
defendants argument that the district applied the crime-fraud exception too broadly:

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Schroeder argues also that the material requested-the source of his income-is
unrelated to the matter being investigated-his failure to report income. He argues
that only the amount of his income, not its source, is relevant to showing the
failure to report income. To the extent Schroeder places this argument under the
relatedness prong of the crime-fraud exception, he is mistaken. That prong
requires only that the communication be related to the crime or fraud the client
seeks to perpetrate.
842 F.2d at 1228. The Schroeder court went on to hold that the crime-fraud exception applied
and that any legal assistance Kliston may have provided Schroeder in generating income or in
disposing of income was related to Schroeders failure to report income. Id. at 1227.
Schroeder recognizes that a litigant must be allowed full discovery into all surrounding
facts and circumstances in order to discover the true extent and purpose of a crime or fraud. As
this Court stated on August 17, 2015, in rejecting Defendants contention to the contrary,

Doc. 311-2 (Collingsworth Dep.) at 355:14-356:7.

Drummond reiterates8 below how each of the specific topics on which Mr. Collingsworth
was instructed not to answer relate to the crimes or frauds at issue within the meaning of the
crime-fraud exception.
8

Drummonds Motion to Compel Answers to Deposition Questions set forth in detail the questions posed on each of
these topics, Defendants counsels instructions not to answer, the reasons why Drummonds questions directly bear
on the issues at the evidentiary hearing, and an explanation of how the answers to those questions are related to
crimes or frauds. Doc. 311 at 6-25. See also Doc. 341 (Aug. 26, 2015 Hrg. Tr.) at 34:18-23 (stating that Drummond
was quite specific about 7 or 8 specific things in their briefing between pages 6 and 25, I think, where they lay out
what they want to go into, what the question that the privilege was asserted with respect to, and why what they are
asking goes to the fraudulent or criminal behavior or as related to it.). Accordingly, Drummond will not belabor
the Court with a full recitation of those arguments here.

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1.

2.

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3.

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4.

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5.

Drummond has served a subpoena duces tecum on Defendants counsel, Mr. Smith, and his firm, Clark, Hair &
Smith, P.C. Ex. 3. That subpoena commands their attendance at the September 1 evidentiary hearing, and also
requires them to bring all of their communications with the Defendants. Id. As Drummond has made clear to
Defendants counsel, it is not presently seeking to view those communications itself. Rather, Drummond has
requested that those communications be available to this Court for in camera review. What those communications
email and who all knew about it.
state is critical: they will show exactly what was said about the

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6.

7.

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8.

9.

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IV.

DEFENDANTS REBUTTAL
Drummonds research uncovered no Eleventh Circuit case holding that a party opposing

the crime-fraud exception is entitled, as a matter of law, to present rebuttal evidence once a
prima facie showing of a crime or fraud is made. Drummond acknowledges, however, that
district courts within the Eleventh Circuit have employed this burden shifting procedure to the
crime-fraud exception in the civil context. See, e.g., JTR Enterprises, LLC v. An Unknown
Quantity of Colombian Emeralds, Amethysts & Quartz Crystals, 297 F.R.D. 522, 527 (S.D. Fla.
2013) (Once the movant has made these showings, the burden of persuasion shifts to the party
invoking the privilege to provide a reasonable explanation of the conduct or communication to
rebut the prima facie showing.) (citing Gutter, 124 F. Supp. 2d at 1307).
Drummond is also cognizant of this Courts stated intent to allow Defendants to utilize
September 1st as an opportunity to rebut Drummonds prima facie showing. As this Court stated,

Doc.

341 (Aug. 26, 2015 Hrg. Tr.) at 39:24-25. Defendants must present evidence showing that their
conduct was legal and not fraudulent: If the court does not find the evidence is sufficient to
rebut the prima facie case, then the prima facie case still exists and the privilege is lost. In order
10

The crime-fraud exception allows discovery of communications and work product used in furtherance of the
spoliation of evidence. Wachtel v. Guardian Life Ins., No. CIV 01-4183 FSH, 2007 WL 1752036, at *2 (D.N.J.
June 18, 2007) (citing Rambus, Inc. v. Infineon Tech. AG, 220 F.R.D. 264, 283 (E.D. Va. 2004)). Also, [a]lthough
in general hold letters are privileged, the prevailing view, which the Court adopts, is that when spoliation occurs the
letters are discoverable. Major Tours, Inc. v. Colorel, No. CIV 05-3091(JBS/JS), 2009 WL 2413631, at *2 (D.N.J.
Aug. 4, 2009) (collecting cases).

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to carry its burden of persuasion, the party seeking to invoke the privilege has to show by a
preponderance of the evidence that the prima facie showing that the crime/fraud exception
applies should not be accepted. JTR Enterprises, LLC, 297 F.R.D. at 527. For the reasons that
follow, Defendants rebuttal does not defeat the application of the crime-fraud exception.
A.

Defendants were already afforded the opportunity to provide a reasonable

explanation for their conduct, and they utilized that opportunity to
perpetrate another fraud on this Court.

The parties first briefed the crime-fraud exception in July 2014. Drummond specifically
cited and discussed the crime of witness bribery as justifying the application of the crime-fraud
exception. Doc. 348-2 at 13-20. At that time, Drummond and this Court only knew about the
payments to Halcon, Duarte, Gelvez and Charris. In their crime-fraud briefing, Defendants
represented the following to this Court:

Doc. 174-13 (Defendants July 9, 2014 Crime-Fraud Br.) at 6 & 14-15. The Special Master
made it abundantly clear that Defendants briefing and their arguments to the Court at the July
23, 2014 hearing on the crime-fraud exception misled him into believing that all of Defendants
witness payments had been disclosed:

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Doc. 243-23 (March 24, 2015 Hrg. Tr.) at 137:25-138:10. Nowhere in their briefing or at the
hearing did Defendants disclose, much less provide a reasonable explanation for, the payments
to El Tigre, Samario and Blanco. In other words, Defendants reasonable explanation of their
criminal and fraudulent conduct was itself a fraud.
Not only was Defendants crime-fraud briefing fraudulent on its face, but recently
email proves that Defendants reasonable

discovered evidence regarding the

explanation was, without a doubt, an intentional fraud. Indeed, Defendants had

unequivocal documentary proof that El Tigre and Samario had
been paid before any of their demonstrably false crime-fraud briefing was submitted to this
Court. The timeline of that fraud is as follows:
Date(s)

Event

May 22, 2011

May 23, 2011

July 5, 2011

Mr. Collingsworth signs a sworn interrogatory response in Balcero. The

interrogatory called upon him to disclose anything of value offered or

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Date(s)

Event
given by Plaintiffs, or anyone acting on Plaintiffs behalf including
counsel, to any person disclosed on Plaintiffs Rule 26 disclosures, any
former paramilitary or any other potential witness in this litigation.
Mr. Collingsworths sworn response states Plaintiffs have provided
Duarte with hamburgers and other food on several occasions, which were
served during meetings to discuss the facts in his February 2011
Declaration. Additionally, Plaintiffs are providing reasonable
transportation, food, and lodging costs for Plaintiffs who will be deposed
in Alabama between July 18-23, 2011. Plaintiffs have paid to relocate
Plaintiff Claudia Balcero and her family after she and her family received
death threats as a result of participating in this lawsuit. Doc. 88-4.
There is no disclosure of any payments to Charris, Gelvez, Duarte,
Samario or El Tigre, all of which had received payments from the
Defendants.

July 5, 2011
through the close
of discovery in
Balcero in July
2012

Defendants submit pleadings and continue to serve sworn interrogatory

responses in which they fraudulently conceal their payments to witnesses.
See Doc. 174-21 (Balcero Pltfs Nov. 8, 2011 Brief) at 9; Doc.88-5 (May
16, 2012 Balcero Plfs Irog. Resp.). Conrad & Scherers Managing
Partner, Bill Scherer, was counsel of record in Balcero and admitted in his
deposition testimony that those interrogatory responses were false. Doc.
348-9 (Scherer Dep.) at 186:5-20.
Defendants elicit false testimony from witnesses regarding whether they
had been paid. Balcero Doc. 396-15 (Blanco Dep.) at 16-17.
Mr. Collingsworth represents to the Court that Llanos Oil has no
relationship to Balcero, Doc. 174-23 (Mar. 8, 2012 Hrg. Tr.) at 8:20-9:7,
despite the fact that Albert van Bilderbeek had already paid $95,000 to
Jaime Blanco in exchange for his testimony against Drummond. Docs.
342-20; 174-20. The payments were made at Mr. Collingsworths
request, and he confirmed every single one of them. Id.
Defendants make these misrepresentations despite the fact that this Court
ordered them on March 8, 2012 to disclose those payments. Doc. 174-22
(Mar. 8, 2012 Balcero Mem. Opinion) at 6-7.
Defendants never disclose the payments to Charris, Duarte, Gelvez,
Samario, El Tigre or Blanco.

August 2012 and

January 2013

After discovery closes in Balcero, and after all of Defendants fact

witnesses have provided letters rogatory testimony, Defendants produce
documents reflecting payments to Halcon, Charris, Duarte and Gelvez.
There is no disclosure of the payments to El Tigre, Samario and Blanco.

July 1, 2013

Drummond files its motion to compel (Doc. 43), arguing that Defendants

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Date(s)

Event
should be compelled to produce all information and documents relating to
witness payments.

July 2013 through

April 2014

Defendants repeatedly represent to this Court in pleadings, sworn

discovery responses, affidavits and in open court that they have disclosed
all of their witness payments. Defendants seek sanctions against
Drummond in other federal courts for serving subpoenas for documents
relating to witness payments, calling those subpoenas duplicative and
representing that Drummond is an abusive litigant that is demanding the
production of information they have already disclosed. See Doc. 243
(Drummonds Proposed Findings of Fact) at 115-342.

April 2, 2014

Drummond moves for sanctions against the Defendants after third parties
start producing documents relating to witness payments that Defendants
previously represented did not exist. Doc. 101.

April 14, 2014

Defendants file their response, calling Drummonds motion maliciously

false and representing that [t]here is absolutely no issue of the propriety
of Defendants searches or the completeness of their production. Doc.
114 at 1.

April 21, 2014

In response to a direct question from this Court asking what witnesses had
been paid, Mr. Collingsworth volunteers to answer, prefacing his response
with the shortest way to the truth is to ask me the question. He then lies
and states that exactly three witnesses were paid. Doc. 123 (Apr. 21,
2014 Hrg. Tr.) at 30:1-31:19.

May 22 and 27,

2014

Defendants produce documents that have been redacted to hide the $2,700
monthly payments to El Tigre and Samario. Docs. 174-10, 174-11, 17418 & 174-19.

June 25, 2014

July 9, 2014

Defendants file their Principal Crime-Fraud Brief, falsely representing

that only three witnesses were paid and claiming that they have provided a
reasonable explanation in response to Drummonds prima facie case of
witness bribery. Doc. 174-13.

July 18, 2014

Defendants file their Crime-Fraud Reply Brief. The phrase three

witnesses appears nine times in that brief. They again falsely represent

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Date(s)

Event
that only three witnesses were paid, claiming that they have provided a
reasonable explanation in response to Drummonds prima facie case of
witness bribery. Doc. 174-14.

September 12,
2014

In a letter copying the Special Master, Defendants represent as follows:

Defendants have done its [sic] best to produce or log all responsive
documents which evidence or refer to security payments to witnesses
associated with the human rights cases against Drummond. Doc. 243-24
(Sept. 12, 2014 B. Smith Ltr.) at 5.

September 23,
2014

Conrad & Scherer submits a filing in Florida state court styled Conrad &
Scherers Memo Re: Document Production and Privilege Logs,
attaching the sworn declaration of Mr. Collingsworth. Docs. 243-25 &
243-26 (Conrad & Scherers Sept. 23, 2014 Brief in the Wichmann case).
In that sworn declaration, Doc. 243-25 at pp. 152-164 of 170, Mr.
Collingsworth testifies that Charris, Gelvez, Duarte, Halcon and Claudia
Balcero have been paid. He falsely testifies that Claudia Balcero is the
final individual who received security measures. Id. at p. 159 of 170.

October 9, 2014

Parker Waichman, LLP produces to the Special Master for in camera

inspection the documents it has withheld on privilege grounds. Included
in those documents is the
email,

November 17,
2014 at 11:17 p.m.

Defendants produce the

email to Drummond, as well as
other documents that had been produced in May 2014 that have now been
unredacted to reveal the $2,700 monthly payments to El Tigre and
Samario.

The above timeline speaks for itself and proves that both Conrad & Scherer and Collingsworth
were intimately involved in perpetrating a fraud on this Court. Defendants cannot cite law from
any jurisdiction that permits a party to attempt to rebut a prima facie showing of a crime or fraud
by knowingly committing an additional fraud, and when that fails, be allowed additional bites at
the apple. Defendants conduct is unconscionable. They lied to the Court in a hearing on a
motion for sanctions about lying to the Court. Then, after this Court ordered the parties to brief
the crime-fraud exception, Defendants knowingly submitted briefing to the Court that was itself
a massive fraud. The question then becomes: how many chances do Defendants get?

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B.

Defendants explanation for their conduct is insufficient as a matter of law

and contradicted by a mountain of documentary evidence.

This Court has already acknowledged that [t]here is evidence that if believed by the trier
of fact would establish the elements of bribery and subornation of perjury. Doc. 341 (Aug. 26,
2015 Hrg. Tr.) at 22:5-7. Defendants rebuttal argument that the payments to El Tigre,
Samario, Gelvez, Charris and Duarte were for security is supported by their self-serving
statements, and nothing else.11 Defendants have not produced any objective documentation
supporting their claim that these payments were for security, such as invoices from security
companies to the witnesses showing the provision of protection services, contracts between the
witnesses and any security company, or even emails with the witnesses outlining what protection
will be provided. Defendants have never disclosed any communications with or approval from
any Bar Association or any other authority regarding these payments. Moreover, there are no
police reports or other complaints or requests to Colombian authorities regarding the need for
security assistance. The only evidence that these payments were for security are Defendants
self-serving statements.
When this Court directly asked what evidence the Defendants had that their payments
were for security, Defendants agreed that the evidence would be [Mr. Collingsworth]s stated
purpose for why the payment was made. Doc. 123 (Apr. 21, 2014 Hrg. Tr.) at 26:2-9. For
purposes of the crime-fraud exception, however, a finding of probable cause is not negated by
an innocent explanation which may be consistent with the facts alleged. Chevron Corp. v.
Donziger, 2013 WL 1087236 at *25 (citations omitted); see also In re Grand Jury Proceedings,
492 F.3d 976, 984-85 (8th Cir. 2007) (affirming application of the crime-fraud exception where

11

The payments to Blanco had nothing to do with security and, as explained supra in note 6, violate 18 U.S.C.
201(c).

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[t]he clients rebuttal evidence appears to consist primarily of statements by the client and
others that essentially convey the clients innocent explanations for his conduct). Defendants
self-serving explanation of why they paid members of a terrorist group who testified against
Drummond hundreds of thousands of dollars is inadequate. Indeed, if a partys self-serving
explanation were sufficient to defeat the crime-fraud exception, it would be meaningless.
Moreover, Defendants reasonable explanation is contradicted by a mountain of
documentary, objective evidence that shows those payments had nothing to do with security,
but rather were made to procure false testimony against Drummond. See Doc. 341 (Aug. 26,
2015 Hrg. Tr.) at 18:10-19:10; 20:25-22:9 (citing evidence showing that Defendants witness
payments constitute bribery and suborning of perjury). That evidence includes the following:

Rather than disclosing these payments or their relationship with Ivan Otero,
Defendants fraudulently concealed them. See Doc. 243, generally; see also pages
24-27, supra. As stated by the Eleventh Circuit, [a] jury could find it strange
that those who insist that their conduct was proper and their intent pure went to
such great lengths to hide it all from the light of day. From such secrecy much
may be inferred. Cox, 17 F.3d at 1402;

Collingsworth told his cohorts that Defendants needed to pay El Tigre and
Samario until they get the
Doc. 174-6;

Collingsworth stated to other lawyers that Jaime Blanco would say Drummond
had nothing at all to do with it if he was not paid. Doc. 101-15;

The payments to Jaime Blanco had absolutely nothing to do with security, but
rather were made
for his testimony. Doc. 174-7 at 11. Defendants
admitted that Blanco
. Doc. 174-2 at 6;

There is documentary evidence that Defendants have a pattern and practice of

paying fact witnesses in Colombia for the substance of their testimony. See
Doc. 109-1 (Collingsworth discussing paying a fact witness $20,000 in cash and
stating that if we dont like what we see, we dont pay);

Collingsworth knowingly elicited perjured testimony from Blanco on the subject

of witness payments, asking him Have you had any benefits or gifts provided to
you?, to which Blanco responded No. No kind whatsoever. Doc. 243 at
106-108;

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Paul Wolfs testified that he was

Doc. 62-5 (Wolf Decl.) & Doc. 174-3 (Wolf Dep.) at 40:1346:21;

Defendants own internal documentation describes the purpose of their witness

payments as for support or
, payments for fieldwork, a
payment for the initial draft of the information, or a monthly allowance.
Docs. 62-3, 88-7, 109-1, 44-10, & 174-8;

there are serious questions

regarding the reasonableness of the amounts paid to these witnesses. According
to statistics compiled by DANE, Colombias statistics agency, in 2009 almost half
of Colombias population lived below the poverty line, which is defined as
earning less than $143 per month. The average Colombian household in 2009
earned $287 (or 560,409 Colombian pesos) per month. In the United States, by
contrast, the average household income for 2009 according to the U.S. Census
Bureau was $6,152 per month.12 So, for example, when Defendants promised to
pay Charriss family 1,500,000 Colombian pesos per month, it was the promise of
a salary approximately 2.68 times that of the average household in Colombia.
Offering the same deal to a witness in the United States would roughly equate to a
tax-free salary of $16,487.36 per month (or almost $200,000 per year).

As discussed more fully above is III-B-1, and Ex.1, before they started receiving
money from Mr. Collingsworth and his team, these witnesses have told different
stories, under oath, to Colombian authorities.13

Respectfully submitted,

/s/ H. Thomas Wells, III

William Anthony Davis, III (ASB-5657-D65W)
H. Thomas Wells, III (ASB-4318-H62W)
Benjamin T. Presley (ASB-0136-I71P)
12

/s/ Sara E. Kropf

Sara E. Kropf
LAW OFFICE OF SARA KROPF PLLC
1001 G St. NW, Suite 800

Available at http://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf.

13

Drummond fully expects that many of the 13,000 documents Defendants have withheld on claims of privilege
or work product and which are presently being reviewed in camera by the Special Master will further contradict
their story to this Court that their witness payments were for security.

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Case 2:11-cv-03695-RDP-TMP Document 355 Filed 08/31/15 Page 35 of 36

STARNES DAVIS FLORIE LLP

P.O. Box 59812
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099

Washington, DC 20001
(202) 627-6900

Attorneys for Drummond Company, Inc.

CERTIFICATE OF SERVICE
I hereby certify that on August 31, 2015, I electronically filed the foregoing with the
Clerk of the Court using the CM/ECF system which will send notification of such filing to the
following:
Bradley J. Smith, Esq.
Eric D. Bonner, Esq.
Clark, Hair & Smith, P.C.
1000 Urban Center Drive
Suite 125
Birmingham, Alabama 35242
Christopher S. Niewoehner
Kendall Enyard
Savannah E. Marion
STEPTOE & JOHNSON, LLP
115 S. LaSalle Street
Suite 3100
Chicago, IL 60603
Tel: (312) 577-1240
Special Master T. Michael Brown, Esq.
Ms. Carly Miller, Esq.
Bradley Arant Boult Cummings, LLP
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama 35203
mbrown@babc.com
camiller@babc.com
Kenneth McNeil
SUSMAN GODFREY
1000 Louisiana, Suite 5100
Houston, Texas 77002-5096
kmcneil@SusmanGodfrey.com

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Case 2:11-cv-03695-RDP-TMP Document 355 Filed 08/31/15 Page 36 of 36

Robert Spotswood
William K. Paulk
SPOTSWOOD SANSOM & SANSBURY, LLC
One Federal Place
1819 Fifth Avenue North, Suite 1050
Birmingham, Alabama 35203
rks@spotswoodllc.com
wpaulk@spotswoodllc.com
Walker Badham, III
Badham & Buck, LLC
2001 Park Place, Suite 500
Birmingham, AL 35203
pbadham@badhambuck.com

/s/ H. Thomas Wells, III

H. Thomas Wells, III (ASB-4318-H62W)

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