Spanier MTN Dismiss Binder2

Case 3:12-cr-00918-JM Document 445 Filed 04/04/16 Page 1 of 1
TIMOTHY A. SCOTT
California Bar No. 215074
2 LAW OFFICES OF TIMOTHY A. SCOTT, APC
1350 Columbia Street, Suite 600
3 San Diego, California 92101
Telephone: (619) 794-0451
4 Facsimile: (619) 652-9964
email: tscott@timscottlaw.com
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Attorneys for Jeffrey Spanier
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
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(HONORABLE JEFFREY T. MILLER)
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UNITED STATES OF AMERICA,

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Plaintiff,
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v.
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JEFFREY SPANIER,
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Defendant.
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Case No. 12-CR-00918-JM

Date: May 6, 2016
Time: 11:00 a.m.
Notice of Motion and Motion to:
1. Dismiss Indictment with Prejudice
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Mr. Spanier, by and through counsel, asks that the Court grant the above-captioned
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motion. This motion is based on the memorandum of points and authorities and exhibits,
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attached, and all files and records in this case.
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Dated: April 4, 2016
Respectfully submitted,
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s/ Timothy A. Scott
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TIMOTHY A. SCOTT
NICOLAS O. JIMENEZ
LAW OFFICES OF TIMOTHY A.
SCOTT, APC
Attorneys for Mr. Spanier
Case 3:12-cr-00918-JM Document 445-1 Filed 04/04/16 Page 1 of 13
TIMOTHY A. SCOTT
California Bar No. 215074
2 LAW OFFICES OF TIMOTHY A. SCOTT, APC
1350 Columbia Street, Suite 600
3 San Diego, California 92101
Telephone: (619) 794-0451
4 Facsimile: (619) 652-9964
email: tscott@timscottlaw.com
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5
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(HONORABLE JEFFREY T. MILLER)
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Plaintiff,
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v.
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JEFFREY SPANIER,
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Defendant.
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Case No. 12-CR-00918-JM

Date: May 6, 2016
Time: 11:00 a.m.
Memorandum of Points and Authorities in
Support of Defendants Motion to Dismiss
Indictment with Prejudice
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I.
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Introduction and Issue Presented
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The Speedy Trial Act required that Mr. Spanier be retried within 70 days after his
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first trial deadlocked. That did not happen. The Court now looks to the seriousness of
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the offense, the facts and circumstances of the dismissal, and the impact of any re-
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prosecution on the administration of justice to determine whether the indictment should
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be dismissed with or without prejudice. Because the government used the delay to
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secure an immunized witness against Mr. Spanier, because its litigation positions
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throughout the case have compounded the violation, and because of the considerable
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out-of-court impact of these proceedings on Mr. Spanier and his life, the indictment
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should be dismissed with prejudice.
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12-CR-00918-JM
II.
Statement of Facts
A.
Mr. Spaniers first trial ends in acquittals and a hung jury.

This case began more than four years ago, when a grand jury indicted Mr. Spanier
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and two codefendants, James Miceli and Douglas McClain, Jr., for mail fraud, wire
fraud, and related offenses. See Docket 1. Miceli and McClain ran the Argyll Group.
Argyll made loans to corporate executives, secured by the executives stock collateral.
Id. Mr. Spanier ran a company called Amerifund, which essentially connected
interested executives with Argyll in exchange for a percentage-based fee. Id.

The governments theory of the case was that Miceli, McClain, and Mr. Spanier
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defrauded the executives and stole the stock collateral. Argyll falsely represented that it
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had substantial independent sources of cash to lend and that it would not sell the stock
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pledged as collateral unless the borrowers defaulted on their loans. Id. But in reality,
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Argyll sold the borrowers stock to fund the loans. Id. Mr. Spanier, according to the
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government, participated in the fraud by luring borrowers into the scheme and then
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ignoring or deceiving them when confronted with evidence of Argylls wrongdoing. The
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government also pointed to undisclosed back-end fees that Mr. Spanier received from
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Argyll as evidence of his knowledge and acquiescence in the fraud. Mr. Spanier
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adamantly denied these allegations and prepared to defend the case at trial.
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Pretrial, the Court declared the case complex under the Speedy Trial Act, but
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limited excludable time from September 24, 2012 until January 23, 2013. See Exhibit A.
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Mr. Spanier and McClain went to trial on May 14, 2013.1 After a lengthy trial and five
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days of deliberations, the jury acquitted Mr. Spanier on six counts and deadlocked on the
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rest. See Docket 212. It convicted McClain on all counts. See Docket 211. McClain
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received a sentence of 15 years in custody. His conviction and sentence were affirmed
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on appeal.
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Sadly, defendant Miceli committed suicide while on pretrial release.

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B.
Mr. Spaniers second trial does not begin until well after the Speedy Trial
clock has expired.
The district court declared a mistrial as to the deadlocked counts on May 31, 2013.
The government suggested a retrial date in September of that year. See Exhibit B at
241.2 Defense counsel stated that he had a prepaid vacation for two weeks starting
September 21 but if the Court wanted to set the retrial on a different date, including
earlier, he was at the courts service. Id. The government suggested October. Id. at
242. The district judge commented that he thought he had a conference towards the end
of October, and the government stated if you want to do it on your return, that is fine
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with us. Id. The Court and the parties ultimately decided to set a status conference for
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June 10, 2013 to set a trial date. Id. at 243. There was no discussion of the Speedy Trial
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Acts 70-day limit to start the retrial, the complexity of the case, witness issues, or any
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parties need for additional time to prepare.

At the June 10 hearing, the government confirmed that it planned to retry the case.
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The district court initially thought that the parties had discussed a September trial date,
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but the government then mentioned late October or early November. See Exhibit C. The
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district court suggested the first week of October, but defense counsel reminded the
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district court that he was out of town at that time returning October 4 and could try the
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case immediately thereafter, as this case was his first priority and he would sweep
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everything else aside. Id. The district court set a retrial date of October 8, 2013 (which
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would have been immediately after counsels return from a family vacation). Id. Once
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again, there was no discussion about the Speedy Trial Act, the complexity of the case, or
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any difficulties with setting an earlier date. Two months later, after the Speedy Trial
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Mr. Spaniers references are to the page number used in the excerpts of record
of his appeal, located at the bottom center of the page.
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clock had expired, the district court reset the trial for December 10, 2013.3 Again neither
the government nor the defense objected to the date under the Speedy Trial Act.
On November 20, 2013, Mr. Spanier moved to dismiss the indictment under the
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Speedy Trial Act. See Docket 289. He argued that the 70-day speedy-trial clock began
to run on the date that the mistrial was declared, and had since elapsed. Id. The
government responded that the case had previously been declared complex before the
first trial, and that it had to secure the attendance of various witnesses for the retrial. See
Docket 290. But most importantly, the government confirmed that it had recently
reached a deal with a witness to testify against Mr. Spanier in exchange for
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immunityand that securing the new witness was exactly why it wanted the delay in
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the first place. See Exhibit D at 141-142; see also Docket 290.
But the Court denied Mr. Spaniers motion to dismiss. See Docket 297. Despite
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the fact that the Courts initial order excluding time due to the complexity of the case
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was limited to a discrete four-month period ending on January 23, 2013, and despite the
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fact that the Court had not contemporaneously provided any analysis justifying a retrial
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date outside the 70-day limit, the Court reasoned that the original complexity finding
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excused the delay for the retrial, citing the voluminous discovery, witnesses from outside
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the country, and the governments recent disclosure of a new witness willing to testify
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under immunity. Id. In essence, the Court retroactively reasoned that an earlier trial was
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not practical and asserted, without explanation, that a review of the CJA billing records
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reflected defense counsels need for more time to prepare for trial. Id.4 With respect to
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its complexity and ends-of-justice rationale, the Court explained: [T]he Court has not
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Defense counsel did not object to resetting the case in December, and in fact
preferred it, so that he could enjoy his vacation rather than preparing for trial.
By the time the date was reset, however, the Speedy Trial clock had long since
elapsed.
This reasoning proved to be problematic, as the district court did not have access
to those CJA billing records when setting the trial datethose vouchers were
submitted afterwards. Thus the district court purported to rely on facts that did
not yet exist in setting the trial date.
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detailed these findings on the record since the new Speedy Trial Act clock began to run
earlier this year. However, it is sufficient to detail these previously made-but-not-
announced findings on the record, now, in denying the motion to dismiss. Id.
C.
The government relies on the immunized witness to help secure convictions
against Mr. Spanier.
The second trial commenced on December 10, 2013. See Docket 312. Unlike the
first trial, the government presented the testimony of Manny Bello, a cooperating witness
whose immunized testimony had been secured shortly before the second trial. See
Exhibit E. Bello, who had pled guilty and cooperated with the government in a different
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fraud case in the 1990's, testified that he had briefly worked with Argyll as a broker and
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then started his own stock lending business. Id. at 112-20. He further testified that he
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did a series of stock loans in which Mr. Spanier served as the broker in the 2008-09 time
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period. He paid Mr. Spanier a fee shortly after the loans were issued, although his
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agreements typically stated that the obligation to pay the fee did not arise until the
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termination of the loan. Id. at 121-27. His loan agreements also usually contained
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language allowing him to sell the borrowers stock, but on at least one occasion in which
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Mr. Spanier served as the broker, a borrower negotiated a term prohibiting the sale of the
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stock. Id. at 129-31. Bello nonetheless sold a portion of the stock and testified that, on
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this occasion, he paid Mr. Spanier his fee when he sold the stock. Id. at 132-37.
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Mr. Spanier once again vigorously denied the governments allegations. As in the
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first trial, his defense was that Argyll had duped him as thoroughly as it had duped its
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investors. He testified, as before, that he did not know that Argyll sold stock to fund the
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loans. This time, the government was able to obtain convictions against Mr. Spanier on
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all counts and a special forfeiture verdict that included Mr. Spaniers family home. See
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Docket 323. The Court ultimately sentenced Mr. Spanier to 10 years in prison and
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ordered him to pay over $20 million in restitution. See Docket 367.
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D.
The Ninth Circuit vacates Mr. Spaniers convictions and sentence.

Mr. Spanier appealed. He argued, inter alia, that the district court had erred in
denying his motion to dismiss based on the violation of the Speedy Trial Act. He noted
that the contemporaneous record showed that the government had requested and
obtained a retrial date beyond the 70 days authorized by the Speedy Trial Act, and that
the district court had compounded the error through post-hoc rationalizations that were
belied by the record. Mr. Spanier argued that the severity of these errors required
dismissal of the indictment with prejudice.
In response, the government argued that the retrial date was delayed because
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defense counsel was not available earlier and needed more time to prepare for trial. See
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Exhibit F. The government also asserted that time was excluded because of the cases
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complexity, despite the district courts specific order that limited the complexity
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exclusion to a four-month period before the first trial. Id. Lastly, the government
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attempted to argue that a delay was needed so that the transcripts of the first trial could
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be prepared, for discovery issues to be resolved, and for the Court to address an alleged
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issue with the forfeiture of certain property, despite none of these claims finding any
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support in the record. Id.
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On January 21, 2016, fifteen months after Mr. Spanier filed his opening brief, the
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Ninth Circuit reversed his convictions and sentence. See Exhibit G. The Court noted
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that the district court in this case initially relied on the government to set a retrial date in
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September, a date outside the 70-day period. Id. at 3. The Court then rejected each of
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the proffered reasons for denying Mr. Spaniers motion to dismiss. The Court observed
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that the district courts explanation in denying Spaniers motion to dismiss, that the
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continuances were granted due to case complexity was, unfortunately, insufficient. Id.
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The Court further held that similarly, the courts proffered justification that the
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continuances were granted due to counsels need for time to prepare is belied by the
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record. Id. Indeed, the Court concluded that regrettably, the district courts practice in
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this case of retroactively characterizing a continuance to justify a violation of the Speedy
Trial Act was inconsistent with the language and policy of the Act. Id. at 4.
The Court of Appeals remanded for this Court to decide whether the indictment
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should be dismissed with or without prejudice. This motion follows.
III.
Discussion
The Speedy Trial Act enumerates three factors to determine whether dismissal
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should be with or without prejudice. The Act states: In determining whether to dismiss
the case with or without prejudice, the court shall consider, among others, each of the
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following factors: the seriousness of the offense; the facts and circumstances of the case
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which led to the dismissal; and the impact of a reprosecution on the administration of
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this chapter and on the administration of justice. 18 U.S.C. 3162(a)(2). But there is
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no preference for dismissals without prejudice: [T]he choice of whether to dismiss with
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or without prejudice depends on a careful application of the statutorily enumerated
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factors to the particular case, there is no presumption in favor of either sanction. United
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States v. Clymer, 25 F.3d 824, 831 (9th Cir. 1994). Here, each of these factors favors
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dismissal with prejudice.
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A.
The seriousness of the offense weighs in Mr. Spaniers favor based on the
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facts of this white-collar case.
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The first factor is the seriousness of the offense. It weighs in favor of dismissal
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with prejudice. The charges here involve economic crimes, which typically are
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considered less serious than others, like violent crime or major drug trafficking. Cf.
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U.S.S.G. 4B1.1. And while the government claims a substantial amount of loss, the
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Court recognized at the time of sentencing that the alleged victims were sophisticated
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and successful executives, often represented by counsel, who were actually given
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millions of dollars in loans; they were generally not particularly vulnerable victims who
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were rendered penniless by the defendants actions.
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Moreover, in considering Mr. Spaniers role in the alleged fraudulent conduct, the
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evidence at both trials clearly established that Miceli and McClain were primarily
responsible for Argylls scheme. Mr. Spanier simply negotiated with borrowers. In
contrast, Miceli and McClain presided over the numerous Argyll entities, managed the
stock collateral, controlled bank and brokerage accounts, transferred money, drafted the
contracts, defended lawsuits, negotiated settlements, renegotiated loan terms, forgave
interest payments, granted extensions, collected interest payments, and even allowed
certain defaults to be cured. See PSR, Docket 337, at 6-8. Mr. Spanier, even under the
governments version of events, did none of those things. He spoke with borrowers and
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nothing else. Id. Indeed, the jury at Mr. Spaniers first trial struggled with the issue of
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culpability, acquitting him on several counts and deadlocking on the rest. It is for that
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reason that the government opted to proceed at the second trial under an omissions
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theory of fraud combined with a willful blindness / reckless scienter. See Docket 331 at
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28. The governments evidence showed, at best, that Mr. Spanier had allegedly been put
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on notice about Argylls fraudulent conduct and decided to turn a blind eye. On balance,
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the seriousness of the offense weighs in Mr. Spaniers favor here.
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B.
The facts and circumstances that led to the dismissaland the governments
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litigation positions throughoutoverwhelmingly favor dismissal with
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prejudice.
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The second factor under 3162(a)(2) also favors dismissal with prejudice. The
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record is clear that the government requested and convinced the district court to set a
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retrial date beyond the 70 days authorized by statute. It did so because it was interested
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in securing an immunized witness to use against Mr. Spanier at trial. See Exhibit D at
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141-142. That process caused the retrial to begin approximately four months after the
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Speedy Trial clock had expired. In Clymer, 25 F.3d at 832, this Court found that an
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improper delay of five months weighed in favor of dismissal with prejudice under the
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second factor. This Court also reasoned that the delay in Clymer resulted in actual
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prejudice to the defendant. Id. at 832. Here the delay certainly prejudiced Mr. Spanier
by allowing the government to secure a key cooperating witness against him, one that
became a central part of the governments case-in-chief. See also United States v. Hall,
181 F.3d 1057, 1063 (9th Cir. 1999) (speedy trial delay prejudiced defendant by
allowing government to secure a cooperating witness).
The governments conduct during the appeal also weighs in favor of dismissal
with prejudice. Instead of recognizing the district courts clear violation of the Act, the
government defended the improper post-hoc rationalizations that defied longstanding
Ninth Circuit precedent. For example, the government claimed that the delay was proper
10
because defense counsel had requested a continuance to prepare for trial. But the record
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shows that in response to the governments request for a September 2013 date (which
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was already beyond the 70-day clock), defense counsel specifically stated that he was
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only concerned about his pre-paid vacation from September 20 to October 4, 2013, and
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that he could do the retrial earlier. See Exhibit B at 241.
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Further, the governments positions contributed to the case remaining on appeal
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for 15 months, further exacerbating the original delay. Today, nearly four years will
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have elapsed since Mr. Spanier was originally indicted, the last two years of the delay
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being directly attributable to the governments conduct before this Court and the Ninth
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Circuit. Dismissal with prejudice is proper in these circumstances. See, e.g., United
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States v. Lopez-Avila, 678 F.3d 955, 965-66 (9th Cir. 2012) (misrepresentations of the
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record may justify dismissal with prejudice); United States v. Kojayan, 8 F.3d 1315,
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1320, 1324-25 (9th Cir. 1993) (governments continued failure to appreciate violation on
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appeal can be basis for dismissal with prejudice).
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C.
The administration of the Act and of justice heavily favor dismissal with
prejudice.
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1. The district courts post-hoc reasoning in support of an ends-ofjustice

continuance favor dismissal with prejudice.
The third factor, which considers the impact on the administration of the Act and
the administration of justice, perhaps most strongly weighs in favor of dismissal with
prejudice. In finding that the third factor strongly weighed in favor of dismissal with
prejudice in Clymer, the Ninth Circuit cited the attempt by the district court and the
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government to retroactively implement an ends of justice continuance in violation of
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this Courts longstanding precedent. The Court explained: [W]e believe that the Acts
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most severe sanction is appropriate where the surrounding circumstances lead us to
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conclude that district courts and United States Attorneys offices have failed to recognize
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or implement our long-standing precedents. Clymer, 25 F.3d at 832.
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Importantly, in this case, the district court claimed that its post hoc rationalizations
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were actually made at the time it granted the continuances, and the government defended
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that claim despite the fact that it is defied by the timing of the events and the actual
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discussions on the record. If a district court believes that a prosecution should not be
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terminated, it can always dismiss the indictment without prejudice in accordance with the
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Act. The answer is not to flout the Act and diminish the credibility of the system
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through post-hoc rationalization. The Ninth Circuit has held dismissal with prejudice to
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be appropriate in similar circumstancessee Clymer, supraand so it should be here.
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2. The lead defendants have suffered devastating consequences while Mr.

Spanier still faces an active SEC civil action.
Dismissal with prejudice also serves the more general interest in the
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administration of justice. Clymer, 25 F.3d at 833. Like the defendant in Clymer, Mr.
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Spaniers codefendants were more central participant[s] in the scheme . . . . Id. at 833.
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Mr. Spanier was ranked third of the three defendants in the indictment. The lead
defendant, Miceli, committed suicide before trial, and the second defendant, McClain,
received a sentence of 15 years. See Docket 275. Thus, this case has had devastating
consequences for the main participants. Furthermore, Mr. Spanier still faces an active
SEC civil action, which can certainly exact restitution and penalties if justified. There
have already been two criminal trials, and [t]he administration of justice would be ill-
served by allowing yet another trial and probable appeal at this late date. Clymer,
supra.
3. The delay has substantially prejudiced Mr. Spanier because of his pretrial
restrictions on liberty.
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The Court should also account for the effect of the delay on Mr. Spanier due to his
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pretrial restrictions on liberty, which as noted above have now been in place for nearly
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four years. As the Supreme Court observed in United States v. Taylor, 487 U.S. 326,
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340 (1988), The longer the delay, the greater the presumptive or actual prejudice to the
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defendant, in terms of his ability to prepare for trial or the restrictions on his liberty:
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[I]nordinate delay between public charge and trial, ... wholly aside from possible
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prejudice to a defense on the merits, may seriously interfere with the defendants liberty,
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whether he is free on bail or not, and ... may disrupt his employment, drain his financial
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resources, curtail his associations, subject him to public obloquy, and create anxiety in
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him, his family and his friends. Barker v. Wingo, 407 U.S. 514, 537 (1972).
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(Emphasis provided).5
These collateral consequences have taken a heavy toll on Mr. Spanier in this case.
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Indeed, a person facing serious criminal charges is hardly freed from the states
control upon his release from a police officers physical grip. He is required to
appear in court at the states command. He is often subject, as in this case, to the
condition that he seek formal permission from the court (at significant expense)
before exercising what would otherwise be his unquestioned right to travel
outside the jurisdiction. Pending prosecution, his employment prospects may be
diminished severely, he may suffer reputational harm, and he will experience the
financial and emotional strain of preparing a defense. Albright v. Oliver, 510
U.S. 266, 278 (1994) (J. Ginsburg, concurring). See also United States v. Biggs,
419 F.Supp.2d 1277,1283 (D. Montana 2006).
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At the start of the case, the government seized Mr. Spaniers personal bank accounts and
his joint accounts with his wife Regina, which contained the entirety of Mr. Spaniers
income and savings. Mr. Spanier became indigent and has needed court-appointed
counsel since that time. Those accounts have remained frozen over the last four years.
See e.g., Docket 334. Mr. Spanier has been forced to borrow heavily from friends and
family to meet his daily obligations. His family home is facing foreclosure. He struggles
to make considerable periodic interest payments to the sureties that agreed to guarantee
the substantial bond obligations imposed the Court in this case. See Docket 335. It is
telling that Mr. Spanier has performed flawlessly on pretrial release over the last four
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years, despite these significant restrictions on his life and liberty.

Moreover, the damage to Mr. Spaniers reputation has been substantial. Despite
12
the fact that he has worked consistently since the start of this case, Mr. Spaniers
13
employment prospects have been severely limited by the ongoing and unresolved
14
litigation in this case. Background checks and internet searches reveal the details of the
15
case and even the restitution judgment that has now been vacated, creating issues with
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potential employers and creditors alike. Finally, the emotional strain of four years of
17
litigation on Mr. Spanier and his family cannot be underestimated. His children have
18
grown up wondering whether their father would see them graduate from high school and
19
college. His wife has had to live with the constant fear of seeing her husband remanded
20
into custody and losing Mr. Spaniers physical, emotional, and financial companionship.
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For these reasons too, the indictment should be dismissed with prejudice.
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IV.
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Conclusion
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This case involves a clear-cut violation of the Speedy Trial Act. The government
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used the delay to secure a key cooperating witness against Mr. Spanier. It then
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repeatedly misstated the record on appeal as it attempted to justify the district courts
27
post-hoc rationalizations for denying Mr. Spaniers motion to dismiss. These actions
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compounded the original four-month delay into more than twenty months. Mr. Spanier
has been physically, emotionally, and financially prejudiced by these actions. Based on
this record, the government should not be rewarded with a third attempt to secure a
conviction against Mr. Spanier. The public has diminished interest in a third trial, and
even if there is a conviction, another full appeal. The letter and spirit of the Speedy Trial
Act require dismissal of the indictment with prejudice.
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Dated: April 4, 2016
Respectfully submitted,
s/ Timothy A. Scott
TIMOTHY A. SCOTT
NICOLAS O. JIMENEZ
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LAW OFFICES OF TIMOTHY A.

SCOTT, APC
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12-CR-00918-JM
EXHIBIT
A
(346 of 573)
Case:
Case
Case14-50306,
3:12-cr-00918-JM
3:12-cr-00918-BEN
10/22/2014,
Document
Document
ID: 9287250,
445-2
94 DktEntry:
Filed
Filed09/25/12
04/04/16
10-2, Page
Page
Page
262
12ofof1276
2
MINUTES OF THE UNITED STATES DISTRICT COURT
U.S.A. vs
No.
JAMES T. MICELI (1), DOUGLAS MCCLAIN (2),

JEFFREY T. SPANIER (3)
l2CR09l8-BEN
The Court finds excludable delay, under the section indicated by check ( ~ ),
commenced on
and ended on
3l6l(h)
_ ( 1 ) (A)
Exam or hrg for mental or physical incapacity
_ _ (1) (8)
State or Federal trials or other charges pending
_ ( 1 ) (C)
Interlocutory appeals
_ ( 1 ) (D)
Pretrial motions (from flg to hrg or other prompt dispo)
_ ( 1 ) (E)
Transfers from other district
_ ( 1 ) (H)
Proceedings under advisement not to exceed thirty days
Misc proc:
FRCrP 20, 21 & 40)
Parole or prob rev, deportation, extradition
__ (1) (F)
Transportation from another district or to/from examination

or hospitalization in ten days or less
__ (1) (G)
Consideration by Court of proposed plea agreement
__ (2)
Prosecution deferred by mutual agreement
Unavailability of defendant or essential witness
___ (4)
Period of mental or physical incompetence of defendant to

stand trial
___ (5)
Superseding indictment and/or new charges
Defendant awaiting trial of co-defendant when no severance

has been granted
Continuances granted per (h) (7) -use "T" alone if more than
one of the reasons below are given in support of continuance
(3) (A)&(B)
(6)
_ _ (7)
(A)
& (8)
Tl
___ (7) (8) (i)
1) Failure to continue would stop further proceedings or

result in miscarriage of justice
-X....(7) (B) (ii)
2) Case unusual or complex
_ ( 7 ) (B) (iii)
3) Indictment following arrest cannot be filed in

thirty (30)
T3
4) Continuance granted in order to obtain or substitute

counsel, or give reasonable time to prepare
T4
(7) (B)
(iv)
___3161(8) (i) Time up to withdrawal of guilty plea
__18:3l61(b) Grand jury indictment time extended thirty (30) more days
~
Judge's Initials
260
EXHIBIT
B
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FOR THE SOUTHERN DISTRICT OF CALIFORNIA
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PLAINTIFF,
6
7
V.
DOUGLAS MC CLAIN AND JEFFREY
SPANIER,
8
9
DEFENDANTS.
. . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
NO. 12-CR-0918
MAY 31, 2013
2:38 P.M.
SAN DIEGO, CALIFORNIA
10
11
TRANSCRIPT OF JURY TRIAL, DAY 12

BEFORE THE HONORABLE ROGER T. BENITEZ
UNITED STATES DISTRICT JUDGE
12
APPEARANCES:
13
14
FOR THE PLAINTIFF:
U.S. ATTORNEY'S OFFICE

BY: MICHAEL WHEAT, ESQ.
BY: FAITH DEVINE, ESQ.
BY: JENNIFER GMITRO, ESQ.
880 FRONT STREET, ROOM 6293
SAN DIEGO, CALIFORNIA 92101
FOR THE DEFENDANT:
LAW OFFICES OF MARK F. ADAMS

BY: MARK F. ADAMS, ESQ.
964 FIFTH AVENUE, SUITE 335
FOR THE DEFENDANT:
LAW OFFICE OF TIMOTHY A. SCOTT

BY: TIMOTHY A. SCOTT, ESQ.
1350 COLUMBIA STREET, SUITE 600
15
16
17
18
19
20
21
22
23
24
25
COURT REPORTER:
DEBORAH M. O'CONNELL, RPR, CSR

333 W. BROADWAY, ROOM 420
SAN DIEGO, CALIFORNIA, 92101
REPORTED BY STENOTYPE, TRANSCRIBED BY COMPUTER
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I N D E X
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PAGE
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VERDICT
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SAN DIEGO, CALIFORNIA, MAY 31, 2013, 2:38 P.M.
1
2
* * * *
3
THE COURT:
GOOD AFTERNOON.
THE RECORD SHOULD
REFLECT WE'RE OUTSIDE THE PRESENCE OF THE JURY.
AND MR. MC CLAIN ARE PRESENT.
GOVERNMENT IS PRESENT.
8
9
BOTH COUNSEL ARE PRESENT.
DEFENSE COUNSEL IS PRESENT.
COUNSEL, I HAVE TWO QUESTIONS FROM THE JURY.

QUESTION IS AS FOLLOWS:
MR. SPANIER
THE FIRST
IF WE DECIDE THAT THE JURY IS HUNG ON
10
SOME OR ALL OF THE COUNTS, PLEASE ADVISE HOW WE ARE TO COMPLETE
11
THE FORM.
12
MY THOUGHT ON THAT IS TO TELL THEM, COMPLETE THE FORM IF
13
YOU HAVE REACHED A VERDICT ON ANY OF THE COUNTS, INDICATE WHAT
14
YOUR VERDICT IS, DO NOT FILL IN THE BLANKS ON THE OTHERS, AND
15
LET US KNOW THAT YOU'RE HUNG ON THE REMAINING COUNTS.
16
MR. SCOTT:
I AGREE.
17
MR. ADAMS:
I AGREE, YOUR HONOR.
18
THE COURT:
ALL RIGHT.
19
THANK YOU.
THAT WAS THE EASY ONE.
THEY ALSO SENT THE FOLLOWING QUESTION:
WE INITIALLY ASKED
20
YOU IF THE 5 PERCENT BACK-END FEE SHOULD BE DISCLOSED.
YOU
21
TOLD US YES, IF -- "IF" IS UNDERLINED -- THERE WAS A FIDUCIARY
22
RELATIONSHIP.
23
THERE WAS A FIDUCIARY RELATIONSHIP.
24
WAS A FIDUCIARY RELATIONSHIP.
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WHAT IS MATERIAL.
YOU SAID IT WAS UP TO US, THE JURY, TO DECIDE IF

WE HAVE DECIDED IF THERE
NOW WE NEED RE-INSTRUCTION ON
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SO I DID A LITTLE QUICK RESEARCH, AND THE BEST THAT I
COULD COME UP WITH IS AS FOLLOWS:
FOR WHAT IS MATERIAL IS THAT A CONCEALMENT OR MISREPRESENTATION
IS MATERIAL IF IT HAS A NATURAL TENDENCY TO INFLUENCE OR WAS
CAPABLE OF INFLUENCING THE DECISION OF THE PARTIES, OR THE
PERSON TO WHOM IT WAS ADDRESSED.
7
8
ANYBODY HAVE ANY OBJECTION TO MY TELLING THE JURY THAT?

IF NOT -MS. DEVINE:
9
10
THE COURT:
MISSED IT.
FRAUD.
IS IT?
I LOOKED FOR IT.
I PROBABLY
SO DIRECT ME TO --
MS. DEVINE:
13
14
WE THINK THAT IS A CORRECT STATE OF THE
LAW, AND I THINK IT IS IN THE JURY INSTRUCTION ALREADY.
11
12
THE MOST COMMON FORMULATION
I THINK IT WOULD BE UNDER THE MAIL
IT WILL SAY -- DO YOU HAVE THAT?
15
THE COURT:
16
THROUGH IT TOO FAST.
17
MS. DEVINE:
18
MR. WHEAT:
19
MS. DEVINE:
20
THE COURT:
DIRECT ME TO THAT.
I PROBABLY JUST WENT
IF YOU GO TO 8.101.
THAT'S THE OLD INSTRUCTION.
ON THE THIRD ELEMENT, WHERE IT TALKS -WAIT.
8.101.
I HAVE THE OLD MANUAL, SO
21
I DON'T KNOW IF THIS IS CONSISTENT WITH THE INSTRUCTION THAT I
22
GAVE.
23
MS. DEVINE:
24
MR. WHEAT:
25
MS. DEVINE:
IT IS GOING TO BE THE MAIL FRAUD.

THIRD ELEMENT.
IT'S THE THIRD ELEMENT, WHERE IT SAYS
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THIRD, THE PROMISES OR STATEMENTS THAT WERE MATERIAL, THAT IS,
THEY WOULD REASONABLY INFLUENCE A PERSON TO PART WITH MONEY OR
PROPERTY.
THE COURT:
4
5
SO I THINK THAT -I'M SORRY, WHAT WAS THAT INSTRUCTION?
WHAT NUMBER?
MR. WHEAT:
WE HAVE THE OLD BOOK, TOO.
THE COURT:
GLENN, PRINT THAT OUT.
8.101.
I SENT THE ONLY
COPY I HAD INTO THE JURY.
AND I'LL -- DOES ANYONE HAVE ANY PROBLEMS WITH MY USING THE
10
I'LL TELL YOU WHAT.
READ IT TO ME
NINTH CIRCUIT ON THAT?
11
MR. SCOTT:
ON MATERIALITY?
12
THE COURT:
YEAH.
13
MR. SCOTT:
I DON'T.
BUT I DO WANT THE RECORD TO
14
REFLECT MY EARLIER OBJECTIONS AND RECORD AS TO THE FIDUCIARY
15
ISSUE.
16
17
18
THE COURT:
I THOUGHT YOU WERE THE ONE THAT WANTED ME
TO GIVE THE FIDUCIARY INSTRUCTION?

MR. SCOTT:
INITIALLY, UNTIL THE GOVERNMENT DISAVOWED
19
AND SAID THEY WERE ONLY DOING AFFIRMATIVE MISREPRESENTATION.
20
AND THEN I SAID WE OUGHT TO INSTRUCT THEM THAT THERE IS NOT A
21
FIDUCIARY BASED ON THE GOVERNMENT'S POSITION AND ON THE STATE
22
OF THE RECORD.
23
THE COURT:
OKAY.
MR. ADAMS?
24
MR. ADAMS:
ME, TOO, YOUR HONOR.
25
THE COURT:
OKAY.
ALL RIGHT.
226
DO ME A FAVOR, BRING
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THE JURY IN.

(JURY ENTERS COURTROOM.)
2
3
4
THE COURT:
ALL RIGHT.
WELCOME BACK.
LET'S SEE, I HAVE A QUESTION FROM YOU THAT SAYS, WE
INITIALLY ASKED YOU IF THE 5 PERCENT BACK-END FEE SHOULD BE
DISCLOSED, AND YOU TOLD US YES IF THERE WAS A FIDUCIARY
RELATIONSHIP.
THERE WAS A FIDUCIARY RELATIONSHIP.
WAS A FIDUCIARY RELATIONSHIP.
10
11
YOU SAID IT WAS UP TO US, THE JURY, TO DECIDE IF

WE HAVE DECIDED IF THERE
NOW WE NEED REINSTRUCTION ON
WHAT IS MATERIAL.
LADIES AND GENTLEMEN, I GAVE YOU AN INSTRUCTION, I
12
BELIEVE, ON -- ENTITLED "MAIL FRAUD."
AND IF YOU LOOK AT THAT
13
INSTRUCTION, YOU WILL SEE THAT IT SAYS THE FOLLOWING:
14
OR STATEMENTS WERE MATERIAL IF THEY WOULD REASONABLY INFLUENCE
15
A PERSON TO PART WITH MONEY OR WITH PROPERTY.
PROMISES
OKAY.
16
SO THAT IS -- SO THAT IS THE DEFINITION OF "MATERIALITY."
17
NOW THEN, YOU ALSO ASKED ME THE QUESTION, IF WE DECIDE
18
THAT THE JURY IS HUNG ON SOME OR ALL OF THE COUNTS, PLEASE
19
ADVISE -- PLEASE ADVISE HOW TO COMPLETE THE FORM.
20
WELL, IF THAT IS THE CASE, THEN YOU SHOULD FILL OUT THE
21
FORM AS TO THOSE COUNTS THAT YOU HAVE REACHED A VERDICT, JUST
22
AS I INSTRUCTED YOU A FEW DAYS AGO.
23
AS TO THOSE YOU MAY NOT BE ABLE TO REACH A VERDICT ON,
24
LEAVE THE SPACE BLANK WHERE IT SAYS, WE THE JURY FIND THE
25
DEFENDANT GUILTY/NOT GUILTY.
LEAVE IT BLANK.
227
AND GIVE US A
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NOTE THAT SAYS, WE REACHED A VERDICT ON SOME OF THE COUNTS, ARE
UNABLE TO REACH A VERDICT ON THE OTHER COUNTS.
OKAY.
AND ONCE YOU'VE DONE THAT, IF YOU WOULD PLEASE RING THE
BUZZER AND LET MY BAILIFF KNOW, AND WE'LL TAKE CARE OF THAT.
5
6
IF THERE IS ANYTHING ELSE THAT I CAN DO TO HELP YOU,

PLEASE LET US KNOW.
(JURY ENTERS DELIBERATION ROOM.)
7
8
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THANK YOU.
THE COURT:
ALL RIGHT, COUNSEL, WE'LL LET YOU KNOW
WHEN WE HEAR FROM THEM.

MR. ADAMS:
WE'RE IN RECESS.
YOUR HONOR, WILL THE JURY BE EXCUSED AT
4:00 TODAY?
THE COURT:
YEAH, THEY WANTED TO BE EXCUSED AT 4:00.
13
SOMEBODY HAS A GRADUATION OR SOMETHING TO GO TO.
WHEN IT GETS
14
PRETTY CLOSE TO 4:00, IF THEY HAVEN'T REACHED A VERDICT, I'LL
15
BRING THEM IN HERE, GIVE THEM THE ADMONITION FOR OVER THE
16
WEEKEND, AND HAVE THEM COME BACK MONDAY MORNING, AT 9:00 A.M.
17
MR. ADAMS:
DID YOU WANT US HERE AT 4:00, THEN?
18
THE COURT:
IT'S UP TO YOU.
19
YOU WANT TO BE HERE, YOU'RE WELCOME TO BE HERE.

(RECESS TAKEN.)
20
21
22
23
I DON'T NEED YOU, BUT IF
THE CLERK:
REMAIN SEATED AND COME TO ORDER.
COURT
IS ONCE AGAIN IN SESSION.

THE COURT:
OKAY.
THE RECORD SHOULD REFLECT THAT
24
MR. SPANIER AND MR. MC CLAIN ARE PRESENT.
25
GOVERNMENT IS PRESENT.
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COUNSEL IS PRESENT.
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I HAVE A NOTE.
THE NOTE SAYS:
JUDGE, THE JURY HAS
COMPLETED ITS DELIBERATIONS.

I'M NOT SURE EXACTLY WHAT THAT MEANS.
BUT I SUSPECT THEY
HAVE EITHER REACHED A VERDICT OR VERDICTS OR DECIDED THAT THEY
CANNOT REACH A VERDICT OR VERDICTS.
6
7
DOES ANYONE HAVE ANYTHING THAT WE NEED TO TALK ABOUT

BEFORE I BRING THEM IN?
NO?
OKAY.
BONNIE, CRAIG, PLEASE BRING THE JURY IN.
(JURY ENTERS COURTROOM.)

THE COURT:
10
11
GENTLEMEN.
12
DELIBERATIONS.
13
14
15
16
OKAY.
WELL, WELCOME BACK, LADIES AND
I HAVE A NOTE THAT SAYS, THE JURY HAS COMPLETED ITS
IF YOU WOULD PLEASE DO ME A FAVOR, DELIVER THE ENVELOPE TO

MY BAILIFF, WHO WILL THEN HAND IT TO ME.
BONNIE, IF YOU WOULD DO ME A FAVOR, PLEASE TAKE THAT FROM
THE FOREPERSON.
VERDICT
17
THE COURT:
18
ALL RIGHT.
19
ME A FAVOR, PLEASE STAND.
20
THE VERDICT.
THE CLERK:
21
MR. MC CLAIN, IF YOU WOULD DO
I'LL HAVE MY COURTROOM DEPUTY READ
UNITED STATES DISTRICT COURT, SOUTHERN
22
DISTRICT OF CALIFORNIA, UNITED STATES OF AMERICA, PLAINTIFF,
23
VS. DOUGLAS MC CLAIN, JR., DEFENDANT, CASE NO. 12-CR-0918-BEN.
24
VERDICT:
25
ABOVE-ENTITLED CAUSE FIND THE DEFENDANT DOUGLAS MC CLAIN, JR.
AS TO COUNT 1 OF THE INDICTMENT, WE THE JURY IN THE
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GUILTY OF CONSPIRACY, IN VIOLATION OF TITLE 18, UNITED STATES
CODE, SECTION 371.
ABOVE-ENTITLED CAUSE, FIND THE DEFENDANT DOUGLAS MC CLAIN, JR.
GUILTY OF MAIL FRAUD, AND AIDING AND ABETTING, IN VIOLATION OF
TITLE 18, UNITED STATES CODE, SECTION 1341, AND TITLE 18,
UNITED STATES CODE, SECTION 2.
8
9
AS TO COUNT 3 OF THE INDICTMENTS, WE THE JURY IN THE

10
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12
13
14
15
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TITLE 18, UNITED STATES CODE, SECTION 1341, TITLE 18, UNITED
17
STATES CODE, SECTION 2.
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GUILTY OF WIRE FRAUD, AND AIDING AND ABETTING, IN VIOLATION OF
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TITLE 18, UNITED STATES CODE, SECTION 1343, TITLE 18, UNITED
STATES CODE, SECTION 2.
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9

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8
9

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GUILTY OF WIRE FRAUD, AND AIDING AND ABETTING, VIOLATION OF
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ABOVE-ENTITLED CAUSE FIND OF THE DEFENDANT DOUGLAS MC CLAIN,
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JR. GUILTY OF WIRE FRAUD, AND AIDING AND ABETTING, IN VIOLATION
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OF TITLE 18, UNITED STATES CODE, SECTION 1343, AND TITLE 18,
8
9

10
JR. GUILTY OF WIRE FRAUD, AND AIDING AND ABETTING, IN VIOLATION
11
OF TITLE 18, UNITED STATES CODE, SECTION 1343, AND TITLE 18,
12
13
14
15
GUILTY OF SECURITIES FRAUD, IN VIOLATION OF TITLE 15, UNITED
16
STATES CODE, SECTION 78(J)(B) AND 78(F)(F).
17
18
19
JR. GUILTY OF MONEY LAUNDERING, AND AIDING AND ABETTING, IN
20
VIOLATION OF TITLE 18, UNITED STATES CODE, SECTION 1957, AND
21
TITLE 18, UNITED STATES CODE, SECTION 2.
22
23
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GUILTY OF MONEY LAUNDERING, AND AIDING AND ABETTING, IN
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VIOLATION OF TITLE 18, UNITED STATES CODE, SECTION 1957, AND
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1
2

GUILTY OF MONEY LAUNDERING, AND AIDING AND ABETTING, IN
VIOLATION OF TITLE 18, UNITED STATES CODE, SECTION 1957,
7
8
9
DATED MAY 31, 2013, SAN DIEGO, CALIFORNIA.
SIGNED KENNETH
PAKENE, FOREPERSON OF THE JURY.

LADIES AND GENTLEMEN OF THE JURY, ARE THESE YOUR VERDICTS
10
AS PRESENTED AND READ AS TO THE DEFENDANT DOUGLAS MC CLAIN,
11
JR., SO SAY YOU ALL.
12
JURORS:
13
THE COURT:
MR. ADAMS, DO YOU WISH THE JURY POLLED?
14
MR. ADAMS:
YES, SIR, I DO.
15
THE COURT:
ALL RIGHT, IF YOU'D PLEASE BE SEATED.
16
THE CLERK:
JUROR NO. 1, ARE THESE YOUR VERDICTS AS
17
YES.
PRESENTED AND READ?
18
JUROR NO. 1:
19
THE CLERK:
20
PRESENTED AND READ?
21
JUROR NO. 2:
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THE CLERK:
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YES.
YES.
PRESENTED AND READ?
24
JUROR NO. 3:
25
THE CLERK:
YES.
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PRESENTED AND READ?
JUROR NO. 4:
THE CLERK:
YES.
PRESENTED AND READ?
JUROR NO. 8:
THE CLERK:
YES.
PRESENTED AND READ?
JUROR NO. 9:
THE CLERK:
10
YES.
PRESENTED AND READ?
11
JUROR NO. 15:
12
THE CLERK:
13
PRESENTED AND READ?
14
JUROR NO. 21:
15
THE CLERK:
16
PRESENTED AND READ?

JUROR NO. 22:
18
THE CLERK:
PRESENTED AND READ?
JUROR NO. 23:
21
THE CLERK:
YES.
PRESENTED AND READ?
23
JUROR NO. 26:
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THE CLERK:
25
YES.
20
22
YES.
17
19
YES.
YES.
PRESENTED AND READ?
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JUROR NO. 29:
THE CLERK:
YOUR HONOR, THE JURY HAS BEEN POLLED.
THE COURT:
ALL RIGHT.
4
5
6
7
8
9
YES.
MR. SPANIER, IF YOU WOULD
PLEASE RISE.
GLENN, IF YOU WOULD PLEASE READ THE VERDICTS THAT WERE
REACHED.
THE CLERK:
YES, YOUR HONOR.
UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF

CALIFORNIA, UNITED STATES OF AMERICA, PLAINTIFF, VS. JEFFREY T.
10
SPANIER, DEFENDANT, CASE NO. 12-CR-0918-BEN.
11
COUNT 7 OF THE INDICTMENT, WE THE JURY IN THE ABOVE-ENTITLED
12
CAUSE FIND THE DEFENDANT JEFFREY T. SPANIER NOT GUILTY OF MAIL
13
FRAUD, AND AIDING AND ABETTING, IN VIOLATION OF TITLE 18,
14
UNITED STATES CODE, SECTION 1341, AND TITLE 18, UNITED STATES
15
CODE, SECTION 2.
16
VERDICT:
AS TO
17
ABOVE-ENTITLED CAUSE FIND THE DEFENDANT JEFFREY T. SPANIER NOT
18
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20
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DATED MAY 31, 2013, SAN DIEGO, CALIFORNIA, SIGNED KENNETH

PAKENE, FOREPERSON OF THE JURY.
LADIES AND GENTLEMEN OF THE JURY, ARE THESE YOUR VERDICTS
19
AS PRESENTED AND READ AS TO THE DEFENDANT JEFFREY T. SPANIER,
20
SO SAY YOU ALL?
21
JURORS:
22
THE COURT:
MR. SCOTT, DO YOU WANT THE JURY POLLED?
23
MR. SCOTT:
NO THANK YOU, YOUR HONOR.
24
THE COURT:
THANK YOU.
25
YES.
YOU MAY BE SEATED.
DOES THE GOVERNMENT WANT THE JURY POLLED?
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MS. DEVINE:
THE COURT:
THANK YOU VERY MUCH.
TO GIVE YOU.
SAID YOU WANTED TO BE OUT OF HERE BY 4:00 TODAY, AND I'M GOING
TO BE PRETTY CLOSE TO THAT.
NO, YOUR HONOR.

ALL RIGHT.
WELL, LADIES AND GENTLEMEN,
I HAVE SOME GOOD NEWS AND SOME BAD NEWS
HERE IS THE GOOD NEWS.
THE GOOD NEWS IS THAT YOU
NOW THE BAD NEWS IS THAT I'M GOING TO ASK THAT YOU COME
BACK ON TUESDAY MORNING, AT 9:00 A.M.
THERE IS A SECOND
PORTION OF THIS CASE THAT HAS TO BE TRIED BEFORE YOU THAT COULD
10
NOT BE TRIED AT THE SAME TIME AS THE FIRST PART OF THE CASE.
11
SO WHEN YOU COME BACK ON TUESDAY MORNING, YOU WILL BE HEARING I
12
SUSPECT RELATIVELY BRIEF EVIDENCE.
13
DELIVER SUBSEQUENT CLOSING ARGUMENTS, AND THEN WE WILL SEND YOU
14
BACK FOR DELIBERATIONS, OKAY.
15
THE ATTORNEYS WILL THEN
WITH THAT, I DO WANT TO REMIND YOU, IT IS EXTREMELY
16
IMPORTANT THAT YOU NOT DISCUSS THE CASE AMONG YOURSELVES, OR
17
WITH ANYONE, AFTER THIS, AFTER I LET YOU GO.
18
PLEASE DO NOT DO ANY RESEARCH.

DO NOT FACEBOOK.
OKAY.
DO NOT BLOG.
DO NOT
19
TWITTER.
DON'T GO LOOKING ON THE INTERNET.
20
DON'T GO READING ANY NEWS ACCOUNTS OF THE CASE OR LISTENING TO
21
ANY NEWS REPORTS OF THE CASE.
22
PLEASE CONTINUE TO HAVE AN OPEN MIND, OKAY.
23
SO WITH THAT, I'M GOING TO SEND YOU HOME.
AND AGAIN, I
24
WOULD ASK THAT YOU BE OUT THERE PROMPTLY AT 9:00 ON -- I'M
25
SORRY, WAIT, I HAVE SOMETHING ON TUESDAY.
239
WHAT TIME?
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THE CLERK:
9:00 AND 9:30.
THE COURT:
I'LL ASK YOU TO BE BACK AT 10:00, NOT
3
4
9:00, OKAY.
7
8
9
THANK YOU.
COUNSEL, IF YOU'D PLEASE REMAIN.

(JURY EXITS COURTROOM.)
5
6
ALL RIGHT.
10:00 ON TUESDAY.
THE COURT:
ALL RIGHT, I BELIEVE THAT ALL JURORS HAVE
LEFT THE COURTROOM.

LET'S SEE, A COUPLE THINGS.
I GUESS ON TUESDAY MORNING,
WE WILL START WITH THE FORFEITURE ASPECTS OF THE CASE, WHICH I
10
BELIEVE THE DEFENSE ASKED FOR A JURY VERDICT -- I MEAN ASKED
11
FOR -- YEAH, FOR A JURY VERDICT ON THAT ISSUE.
12
IS STILL YOUR DESIRE, MR. ADAMS?
I ASSUME THAT
13
MR. ADAMS:
IT IS, YOUR HONOR.
14
THE COURT:
OKAY.
15
10:00 A.M. ON TUESDAY MORNING.
16
SENTENCING DATE AND A MOTIONS HEARING DATE FOR SEPTEMBER 9TH,
17
AT 9:00 A.M.
18
ACCORDANCE WITH OUR LOCAL RULES.
19
RULE 29 MOTION THAT WAS SUBMITTED.
20
BELIEVE THAT THE EVIDENCE WAS OVERWHELMING AND MORE THAN ENOUGH
21
FOR A REASONABLE JURY TO RETURN A GUILTY VERDICT BEYOND A
22
REASONABLE DOUBT.
23
SO WE WILL HAVE YOU BACK HERE AT

NOW I'M GOING TO SET A
PLEASE MAKE SURE THAT ALL MOTIONS ARE FILED IN

I BELIEVE THAT THERE WAS A
THAT MOTION IS DENIED.
WITH REGARDS TO MR. SPANIER, I ALWAYS THOUGHT THAT THIS
24
CASE WOULD BE MUCH CLOSER AS TO MR. SPANIER; HOWEVER, I DO
25
BELIEVE, FOR THE REASONS THAT I INDICATED PREVIOUSLY, THAT
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THERE IS SUFFICIENT EVIDENCE FOR A REASONABLE JURY TO RETURN A
GUILTY VERDICT BEYOND A REASONABLE DOUBT.

NOW WITH REGARDS TO MR. SPANIER, I DON'T KNOW IF THE
3
4
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?
GOVERNMENT WANTS TO DO?

MS. DEVINE:
8
9
WE WERE THINKING OF A RETRIAL DATE IN
SEPTEMBER.
THE COURT:
10
11
I CAN SET IT FOR -- WELL, WHAT IS IT THE
YOU?
OKAY.
MR. SCOTT, IS SEPTEMBER OKAY WITH
DO YOU HAVE ANY -MR. SCOTT:
12
I HAVE A -- I HAVE A PRE-PLANNED
13
VACATION, STARTING ON THE -- ON SATURDAY THE 21ST, THAT
14
CORRESPONDS WITH MY CHILDREN'S FALL BREAK.
AND THAT'S THE
15
PROVERBIAL PREPAID TICKETS AND EVERYTHING.
THAT IS TWO WEEKS,
16
STARTING SEPTEMBER 21ST.
17
I'M AT THE COURT'S SERVICE.

THE COURT:
18
IF IT'S EARLIER IN SEPTEMBER, THEN
I COULD GET YOU INTO A LOT OF TROUBLE IF
19
I INSISTED THAT WE HAVE A TRIAL OVER THE WEEK OF THE 21ST,
20
RIGHT?
21
22
MR. SCOTT:
I'M SCARED OF YOUR HONOR, BUT I'M
TERRIFIED OF MY WIFE, SO --
23
THE COURT:
OKAY.
24
MR. WHEAT:
IN LIGHT OF THAT, AND NOT WANTING TO
25
MR. WHEAT?
IMPINGE ON MR. SCOTT'S VACATION, OR SOME PERIOD THEREAFTER, IF
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THE COURT WANTED TO PLACE IT SOMETIME IN OCTOBER, WE HAVE NO
OPPOSITION TO THAT.
THE COURT:
MR. SCOTT?
MR. SCOTT:
THAT WOULD BE OUTSTANDING, YOUR HONOR.
5
6
7
8
9
10
11
12
PERHAPS MID-OCTOBER ON, I'M WIDE OPEN.

THE COURT:
GLENN, DO ME A FAVOR, GET ME MY TRIAL
CALENDAR, PLEASE.
CAN I ASK, NOW THAT WE'VE HEARD ALL THIS EVIDENCE, DOES
THE GOVERNMENT HAVE ANY IDEA HOW LONG YOUR CASE -- IF YOU RETRY
THIS, HOW LONG IT WILL TAKE YOU TO PUT ON YOUR CASE.
MR. WHEAT:
I WOULD SAY APPROXIMATELY WHAT IT TOOK IN
THIS CASE, YOU KNOW, FOUR TO FIVE DAYS.
13
THE COURT:
OKAY.
14
MR. WHEAT:
IF YOU LOOK AT THE COUNTS OF ACQUITTAL,
15
THOSE ARE COUNTS DEALING WITH MR. MICELI AND THE MICELI WIRES.
16
SO I DON'T SEE THAT MATERIALLY ALTERS THE EVIDENCE AGAINST
17
MR. SPANIER.
18
THE COURT:
THE REASON I'M ASKING IS, I'M PRETTY SURE
19
THAT I HAVE THE MDL CONFERENCE, WHICH IS SCHEDULED -- I THINK
20
IT IS EITHER THE THIRD OR FOURTH WEEK IN OCTOBER.
21
PRETTY MUCH OUT OF HERE THAT WEEK.
22
23
24
25
MR. WHEAT:
SO I'M
YOU WANT TO DO IT ON YOUR RETURN, THAT IS
FINE WITH US.

THE COURT:
NO, NO.
HOW ABOUT IF WE SET A
TRIAL-SETTING CONFERENCE A WEEK OR TWO OR WHATEVER YOUR
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PLEASURE MAY BE.
RIGHT NOW.
FIGURE OUT THE DATE OF THAT CONFERENCE PRETTY QUICKLY.
TO GO BACK TO MY CHAMBERS AND LOOK.
I'LL FIND -- UNLESS YOU WANT TO TAKE A BREAK
IF YOU WANT TO TAKE A BREAK, I COULD PROBABLY
MR. SCOTT:
I NEED
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.
FOR AFTER THE SMOKE HAS CLEARED, AND AFTER THE FORFEITURE
PERHAPS IF WE SET A STATUS
10
PROCEEDINGS FOR MR. MC CLAIN HAVE TAKEN PLACE, PERHAPS THE
11
PARTIES MIGHT HAVE MORE COLLECTIVE INSIGHT ON HOW TO PROCEED.
12
I'M NOT TRYING TO GET AHEAD OF MYSELF, I JUST THINK WE MIGHT
13
HAVE MORE INFORMATION --
14
15
16
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
17
A STATUS IN A WEEK OR TEN DAYS, AFTER THE SMOKE CLEARS FROM THE
18
JURY, IT MIGHT BE A MORE FRUITFUL DISCUSSION, IS MY SUGGESTION.
19
20
THE COURT:
WHY DON'T WE SET A STATUS TRIAL-SETTING
CONFERENCE IN TWO WEEKS.
21
MR. WHEAT:
THE 10TH, JUNE 10TH?
22
THE COURT:
YEAH, THAT WOULD WORK FOR ME.
23
24
25
HOW ABOUT YOU, MR. SCOTT?

MR. SCOTT:
MR. SPANIER?
IT WOULD, YOUR HONOR.
COULD I APPEAR FOR
COULD I WAIVE HIS PRESENCE FOR THAT?
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IN A HOTEL, AND JUST THE EXPENSE ALONE HAS BEEN VERY DAMAGING
TO HIM AND HIS FAMILY.
THE COURT:
ANYBODY HAVE ANY OBJECTION?
MR. WHEAT:
NONE.
THE COURT:
AS LONG AS YOU FILE AN ACKNOWLEDGMENT OF
RECEIPT OR ACKNOWLEDGMENT OF APPEARANCE WITHIN A WEEK --
MR. SCOTT:
WE'LL DO THAT.
THE COURT:
-- OF MY SETTING A TRIAL DATE; OTHERWISE,
I'LL ISSUE A BENCH WARRANT FOR HIS ARREST.
AGREED?
10
MR. SCOTT:
NO, WE'LL TAKE CARE OF IT, YOUR HONOR.
11
THE COURT:
ALL RIGHT.
12
IN THAT CASE, IS THERE
ANYTHING WE NEED TO ADDRESS AT THIS TIME?

MR. SCOTT:
13
YOUR HONOR, I THINK THIS IS IMPLICIT IN
14
THE WAY THIS UNFOLDED, BUT I WOULD ASK THAT YOUR HONOR FORMALLY
15
DECLARE A MISTRIAL FOR THE COUNTS THEY DID NOT REACH A VERDICT
16
ON.
17
18
THE COURT:
ANYTHING ELSE?
OKAY.
ALL RIGHT.
IF NOT, THANK YOU.
GOOD.
DONE.
APPRECIATE IT.
19
MR. WHEAT:
THANK YOU, YOUR HONOR.
20
THE COURT:
MR. ADAMS, MR. MC CLAIN, WE'LL SEE YOU
21
22
NEXT WEEK.
MR. ADAMS:
THANK YOU, YOUR HONOR.
23
(RECESS AT 4:06 P.M.)
24
---000---
25
244
EXHIBIT
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1
1
2
3
4
5

6
PLAINTIFF,
7
V.
8
JEFFREY SPANIER,
9
10
DEFENDANT.
. . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
NO. 12-CR-0918
JUNE 10, 2013
2:45 P.M.
11
12
13
TRANSCRIPT OF STATUS HEARING

14
APPEARANCES:
15
FOR THE PLAINTIFF:

BY: TODD ROBINSON, ESQ.
FOR THE DEFENDANT:
LAW OFFICE OF TIMOTHY A. SCOTT

16
17
18
19
20
21
22
COURT REPORTER:
23
DEBORAH M. O'CONNELL, RPR, CSR

24
25
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ALL RIGHT, LET'S GET BACK TO ISSUE NO. 1.
MY RECOLLECTION
IS THAT THE JURY INDICATED THAT ON AVERAGE, THEY WERE LEANING
NINE-THREE FOR CONVICTION ON THE COUNTS THAT THEY DID NOT
ACQUIT MR. SPANIER.
5
6
DOES THAT MEAN, MR. WHEAT, THAT THE GOVERNMENT WILL BE

RETRYING THIS CASE?
MR. WHEAT:
ABSOLUTELY.
THE COURT:
ALL RIGHT.
TRIAL DATE ON THIS CASE.
SO THEN WE NEED TO SET A
AND I SEEM TO RECALL, IF MY MEMORY
10
SERVES ME RIGHT, THAT WE WERE TALKING ABOUT SOMETIME IN
11
SEPTEMBER, BUT I DON'T KNOW -- AM I NOT -- NO?

MR. WHEAT:
12
13
NO.
I THINK WITH THE SCHEDULES, IT WAS
LATE OCTOBER, EARLY NOVEMBER, IS WHERE, I THINK, WE LEFT IT.
14
THE COURT:
OKAY.
15
MR. SCOTT:
AND THOSE DATES REMAIN FINE WITH ME, YOUR
17
THE COURT:
OKAY, LET'S DO THE FIRST WEEK OF OCTOBER.
18
MR. SCOTT:
I AM UNAVAILABLE UP UNTIL FRIDAY,
16
HONOR.
19
OCTOBER 4TH.
20
ELSE ASIDE, AND I'M WILLING TO RETRY THIS ANY TIME THE COURT
21
WANTS AFTER OCTOBER 4TH.
22
BUT ANY TIME AFTER THAT, I WILL SWEEP EVERYTHING
THE COURT:
CAN WE ANTICIPATE -- WELL, FIRST OF ALL,
23
LET ME ASK THIS:
MR. WHEAT, DOES THE GOVERNMENT REALLY INTEND
24
TO TRY ALL OF THE COUNTS?
25
JUDGE TURRENTINE ONCE SAYING, PICK YOUR THREE BEST AND TRY YOUR
I MEAN, IT IS REALLY -- I REMEMBER
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LITIGATE THE MERITS OF THIS, BUT IF THAT IS THE HEART OF THE
CONCERN THAT -- I FEEL COMFORTABLE GOING FORWARD WITH THIS
MOTION.
FBI AGENT AT MR. BRADDICK'S DOOR.

THE COURT:
5
6
THAT DOESN'T SEEM TO RISE TO THE LEVEL OF HAVING AN

I'D LEAVE IT AT THAT.
WELL, WHATEVER.
OKAY, GOOD.
SO I THINK WE NEED TO SET A TRIAL DATE.
ALL RIGHT.
AND I DISCOVERED
THAT I HAVE AN MDL CONFERENCE; IT IS THE WEEK OF THE 28TH AND
THE 30TH.
MR. SCOTT?
SO WHEN DID YOU SAY YOU WERE GOING TO BE BACK,
MR. SCOTT:
10
I'M AVAILABLE AGAIN -- ON OCTOBER 4TH, I
11
WILL BE BACK.
I THINK THAT IS A FRIDAY.
12
WEEK, THIS CASE IS THE FIRST PRIORITY.

THE COURT:
13
SO BEGINNING THE NEXT
I'LL MAKE ANY DAY --
OCTOBER 7TH WILL BE MOTIONS IN LIM.
14
TRIAL WILL START OCTOBER 8TH.
15
OKAY.
16
MAKE SURE THAT -- WE HAVE NOW TRIED THIS CASE ONCE.
17
SURE WE DON'T WAIT UNTIL THE TRIAL TO ADDRESS EVIDENTIARY
18
ISSUES THAT COULD BE ANTICIPATED WITH ANY REASONABLE DUE
19
DILIGENCE BEFORE WE GET TO THE TRIAL SO THAT WE CAN MINIMIZE
20
THE NUMBER OF BREAKS THAT WE HAVE TO TAKE AND TO HAVE THE JURY
21
SITTING AROUND WAITING FOR US, OKAY.
22
IT WILL START AT 9:30 A.M.,
PLEASE PLAN TO BE HERE OCTOBER 7TH, AT 2:00 P.M.
PLEASE
LET'S MAKE
I'D APPRECIATE IT.
LIKEWISE, I'D APPRECIATE THAT IF THERE ARE ANY OTHER JURY
23
INSTRUCTIONS THAT I HAVEN'T ALREADY SEEN THAT SOMEBODY WANTS TO
24
PROPOSE, PLEASE MAKE SURE THAT I GET THEM NO LATER THAN TWO
25
WEEKS BEFORE THE DATE OF THE TRIAL, OKAY.
220
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1
2
ALL RIGHT, GLENN, DO ME A FAVOR, PLEASE MAKE A COPY OF ALL

OF THIS FOR -- THERE YOU GO.
(RECESS AT 3:45 P.M.)
---000---
5
6
C-E-R-T-I-F-I-C-A-T-I-O-N
I HEREBY CERTIFY THAT I AM A DULY APPOINTED,
QUALIFIED AND ACTING OFFICIAL COURT REPORTER FOR THE UNITED
STATES DISTRICT COURT; THAT THE FOREGOING IS A TRUE AND CORRECT
10
TRANSCRIPT OF THE PROCEEDINGS HAD IN THE AFOREMENTIONED CAUSE;
11
THAT SAID TRANSCRIPT IS A TRUE AND CORRECT TRANSCRIPTION OF MY
12
STENOGRAPHIC NOTES; AND THAT THE FORMAT USED HEREIN COMPLIES
13
WITH THE RULES AND REQUIREMENTS OF THE UNITED STATES JUDICIAL
14
CONFERENCE.
15
DATED:
JUNE 27, 2013, AT SAN DIEGO, CALIFORNIA
16
17
18
_________________________________
S/DEBORAH M. O'CONNELL, CSR #10563
REGISTERED PROFESSIONAL REPORTER
19
20
21
22
23
24
25
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EXHIBIT
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1
1
2
3
4
5

6
PLAINTIFF,
7
V.
8
JEFFREY SPANIER,
9
10
DEFENDANT.
. . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
NO. 12-CR-0918
DECEMBER 2, 2013
2:44 P.M.
11
12
13
14
TRANSCRIPT OF MOTION IN LIMINE HEARING

15
APPEARANCES:
16
17
FOR THE PLAINTIFF:

BY: FAITH DEVINE, ESQ.
FOR THE DEFENDANT:
LAW OFFICES OF TIMOTHY A. SCOTT

18
19
20
21
22
23
24
25
COURT REPORTER:
DEBORAH M. O'CONNELL, RPR, RMR, CSR

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WHEN I SAW IT, I THOUGHT, MY INITIAL REACTION WAS, OH, MY
1
2
GOSH, SO ON THE ONE HAND, WE'RE BEING ASKED TO SET TRIAL IN A
SPEEDY FASHION; ON THE OTHER HAND, IT SEEMS TO ME IF I WAS THE
DEFENDANT, I WOULD WANT TO BE ABLE TO MAKE SURE I WAS ABLE TO
ADEQUATELY AND COMPETENTLY DEFEND THOSE CLAIMS.

AND I THINK THAT KIND OF TIES INTO THE COMPLEXITY.
6
7
BECAUSE THE CASE WAS COMPLEX BEFORE, BUT NOW YOU'VE ADDED THIS
LITTLE -- I'LL CALL IT "LITTLE."
IS.
10
I DON'T KNOW HOW LITTLE IT
BUT YOU'VE ADDED THIS WRINKLE TO THE CASE, WHICH SEEMS TO
MAKE THE CASE EVEN MORE COMPLEX.

MS. DEVINE:
11
I DON'T KNOW.
ONCE AGAIN, YOUR HONOR, YOU HAVE
12
ARTICULATED, I THINK, THE POSITION VERY WELL, AND I DON'T NEED
13
TO REPEAT IT.
14
COMPLEX AND WHY THERE NEEDED TO BE THIS ADDITIONAL TIME.
15
COMMENT ABOUT, THE INTRODUCTION OF THIS NEW ENTITY IS REALLY --
16
IT'S NOT -- IT'S ACTUALLY TWO ENTITIES.
17
ENTITIES WAS AN ENTITY THAT MR. SPANIER CREATED WITH MR. BELLO,
18
AND IT USES THE AMERIFUND NAME.
19
THAT IS EXACTLY THE REASON WHY THE CASE IS

THE
AND ONE OF THE
THERE WAS MENTION OF THIS OTHER LENDER IN THE FIRST TRIAL.
20
SO IT'S NOT SOMETHING NEW, BUT IT'S JUST THAT THERE HAS BEEN
21
SOME ADDITIONAL DISCOVERY AS A RESULT OF THE OTHER WITNESS
22
AGREEING TO TESTIFY.
23
IMMUNITY OR ANY TYPE OF AGREEMENT IN PLACE FOR THIS WITNESS TO
24
TESTIFY.
25
BECAUSE BEFORE, WE DID NOT HAVE AN
NOW THAT HE HAS AGREED -- WHICH, MR. SCOTT IS CORRECT,
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THAT THIS HAPPENED WITHIN THE LAST 30 DAYS.
HAPPENED, WE DID NOTIFY HIM.
3
4
THE COURT:
I SEE.
AS SOON AS IT
I TOLD HIM -SO THAT IS WHAT CAUSED YOUR
DELAY, WAS GETTING THE IMMUNITY FROM --
MS. DEVINE:
THE COURT:
EXACTLY.
I WAS WONDERING ABOUT THAT.
I WAS
WONDERING, WHY IN THE WORLD DID THEY WAIT ALL THIS TIME.
COULD HAVE GOTTEN THIS RESOLVED A LOT SOONER.
LET ME ASK A QUESTION.
WE
OKAY.
WHY COULDN'T YOU SPLIT THE COUNTS
10
TO ALLEGE -- BECAUSE MR. SCOTT IS ALLEGING THIS DUPLICITY.
11
COULDN'T YOU SPLIT THAT COUNT INTO TWO COUNTS, AND IF YOU DID
12
THAT -- LET ME JUST -- I'M KIND OF THINKING OUT LOUD HERE.
13
IF YOU DID THAT, THEN YOU WOULD HAVE A NEW COUNT, RIGHT?
14
THE NEW COUNT IS BASED ON NEW FACTS, AND, THEREFORE, DOESN'T
15
THE SPEEDY TRIAL CLOCK BEGIN TO RUN AT LEAST AS TO THAT COUNT?
16
SO EVEN IF, IN FACT, I WERE TO SAY, I'M GOING TO DENY
17
MR. SCOTT'S MOTION, UNDER -- TO DISMISS ON THE SPEEDY TRIAL
18
CLOCK GROUNDS, BUT IF YOU SPLIT THE COUNTS, IF I'M WRONG AS TO
19
PART OF THE COUNTS, I PROBABLY WOULD BE RIGHT AS TO PART OF THE
20
COUNTS AS WELL, RIGHT?
21
INDIVIDUALS, NEW POSSIBLE WITNESSES, AND THERE WOULD BE A NEW
22
SPEEDY TRIAL CLOCK STARTING FROM THERE, WOULDN'T THERE?
23
MS. DEVINE:
WHY
BUT
AND
BECAUSE IT ALLEGES NEW FACTS, NEW
I UNDERSTAND YOUR POSITION.
I JUST
24
DON'T BELIEVE THERE ARE TWO CONSPIRACIES HERE.
25
IS, ONE PERSON THAT IS REPRESENTING TO THE PUBLIC THAT HE IS
142
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3
4
5
6
PLAINTIFF,
7
V.
8
JEFFREY T. SPANIER,
9
10
DEFENDANT.
. . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
NO. 12-CR-0918
DECEMBER 11, 2013
9:06 A.M.
11
12
13
TRANSCRIPT OF JURY TRIAL, DAY 2

14
15
APPEARANCES:
16
17
FOR THE PLAINTIFF:
18
19

BY:
FAITH DEVINE, ESQ.
20
FOR THE DEFENDANT:
COLEMAN, BALOGH & SCOTT, LLP

COURT REPORTER:
DEBORAH M. O'CONNELL, RPR, RMR, CSR

21
22
23
24
25
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SURPRISED AT HOW BIG OUR APPETITE IS AND HOW MUCH MONEY WE'LL
MAKE YOU.
PLATFORM THE MONEYS WAY, AND YOU'LL NEVER HAVE TO CROSS YOUR
WORDS AGAIN.
FOR TOMORROW, BUT IF NOT, I'LL MAKE SURE YOU KNOW WHY.
WITH YOU IN THE MORNING, JEFFREY.
Q.
AGENT ROBERTS, DO YOU WHAT DVP IS?
A.
DVP IS AN ELECTRONIC MANNER WHICH FUNDS ARE TRANSFERRED.
Q.
T1, T3, AND T7?
10
A.
I DON'T KNOW EXACTLY, BUT I THINK IT RELATES TO HOW QUICKLY
11
THE FUNDS WILL FLOW.
12
13
WHEN THE DAY COMES, MAYBE YOU'LL SELL YOUR NETWORK
I'M SURE WE'LL HAVE THAT GOOD NEWS YOU'RE LOOKING
MR. WHEAT:
YOUR HONOR.
SPEAK
I HAVE NOTHING FURTHER OF THIS WITNESS,
THANK YOU.
14
THE COURT:
MR. SCOTT?
15
MR. SCOTT:
YOUR HONOR, I HAVE NO QUESTIONS FOR THIS
17
THE COURT:
THANK YOU, SIR.
18
THE WITNESS:
19
THE COURT:
20
MS. DEVINE:
16
WITNESS.
THANK YOU.
PLEASE CALL YOUR NEXT WITNESS.

THE UNITED STATES CALLS MANUEL BELLO.
21
22
23
24
25
YOU MAY STEP DOWN.
(WITNESS SWORN.)
THE CLERK:
STATE YOUR FULL NAME FOR THE RECORD,
SPELLING BOTH YOUR FIRST AND LAST NAME.

THE WITNESS:
BELLO, B-E-L-L-O.
MANUEL BELLO, M-A-N-U-E-L, LAST NAME IS
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DIRECT EXAMINATION
BY MS. DEVINE:
Q.
WOULD YOU LIKE SOME WATER, MR. BELLO?
A.
PLEASE.
Q.
GOOD AFTERNOON, MR. BELLO.
A.
GOOD AFTERNOON.
Q.
AND, MR. BELLO, ARE YOU ALSO REFERRED TO AS "MANNY BELLO"?
A.
YES, MA'AM.
Q.
AND WHAT IS IT THAT YOU -- WHAT IS YOUR OCCUPATION, SIR?
10
A.
I'M CURRENTLY THE MANAGING DIRECTOR MAVIN PARTNERS.
11
Q.
AND WHERE IS THAT LOCATED?
12
A.
IT IS IN ROCKEFELLER CENTER, NEW YORK.
13
Q.
AND WHERE IS -- WHERE DO YOU CURRENTLY RESIDE?
14
A.
CANALON, NEW JERSEY.
15
Q.
AND MAVIN PARTNERS, WHAT DOES MAVIN PARTNERS DO?
16
A.
WE'RE A PRIVATE EQUITY COMPANY.
17
COMPANIES.
18
Q.
HOW LONG HAVE YOU BEEN ASSOCIATED WITH MAVIN PARTNERS?
19
A.
I BELIEVE ABOUT TWO YEARS.
20
Q.
AND DO YOU HAVE A PRIOR HISTORY AS A BROKER IN THE
21
SECURITIES INDUSTRY?
22
A.
YES, I DO.
23
Q.
AND CAN YOU TELL US WHERE YOU'VE WORKED IN THE SECURITIES
24
INDUSTRY.
25
A.
WE INVEST IN PRIVATE
1986, I STARTED AT LEHMAN BROTHERS.
WENT, IN 1987, TO
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DREXEL BURNHAM LAMBERT.
TOOK A LITTLE BIT OF TIME OFF AND
BOUNCED AROUND AFTER THAT TO NUMEROUS SMALL BROKERAGE FIRMS.
WENT BACK TO LEHMAN BROTHERS, AND THEN AGAIN LEFT TO GO TO
OTHER SMALL BROKERAGE FIRMS.
Q.
AND DID YOU HAVE A SECURITIES LICENSE?
A.
YES, I DID.
Q.
DO YOU STILL HAVE THAT LICENSE?
A.
NO, I DO NOT.
Q.
WHAT IS THE HIGHEST GRADE IN SCHOOL THAT YOU HAVE REACHED?
10
A.
GRADUATED HIGH SCHOOL; WENT TO COLLEGE FOR THREE OR FOUR
11
YEARS.
12
Q.
YOU DON'T HAVE A BACHELOR'S DEGREE?
13
A.
NO, I DO NOT.
14
Q.
HAVE YOU EVER HEARD OF AN ENTITY CALLED ARGYLL?
15
A.
YES, I HAVE.
16
Q.
WHERE HAVE YOU HEARD IT?
17
A.
IN THE PAST, IN MY BUSINESS DEALINGS.
18
Q.
HAVE YOU HAD BUSINESS DEALINGS WITH ARGYLL BEFORE?
19
A.
YES, I HAVE.
20
Q.
AND APPROXIMATELY WHAT TIME FRAME DID YOU HAVE BUSINESS
21
DEALINGS WITH ARGYLL?
22
A.
23
BETWEEN 2005 WHEN I FIRST MET WITH ARGYLL.
24
Q.
25
ARGYLL.
NEVER GOT MY DEGREE.
I BELIEVE EITHER -- EITHER -- IT WAS EITHER LATE 2004, OR
AND TELL US WHAT WAS YOUR BUSINESS RELATIONSHIP WITH
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A.
I WAS A BROKER, WHO BROUGHT LOANS TO ARGYLL IN 2005.
Q.
AND WHEN YOU SAY "BROUGHT LOANS," ARE YOU REFERRING TO
STOCK LOANS?
A.
YES, MA'AM.
Q.
HOW IS IT THAT YOU GOT INTRODUCED TO ARGYLL?
A.
I WAS IN A BUSINESS TRANSACTION, WHERE ONE OF THE PEOPLE I
WAS DOING BUSINESS WITH, MR. JOSEPH SALVANNY, ALSO KNEW ANOTHER
ASSOCIATE -- I THINK HIS NAME WAS MR. CHIN, I BELIEVE.
KNEW JIM MICELI AND INTRODUCED US TO JIM MICELI.
AND HE
10
Q.
11
ACTUALLY WORK IN THEIR OFFICES IN SAN DIEGO?
12
A.
NO, I DID NOT, MA'AM.
13
Q.
WHERE DID YOU WORK?
14
A.
I HAD MY OWN OFFICE IN NEW JERSEY.
15
Q.
DID YOU VISIT THE OFFICE IN SAN DIEGO FREQUENTLY?
16
A.
I WOULD NOT SAY "FREQUENTLY."
17
HANDFUL OF TIMES AT MOST.
18
Q.
19
ARGYLL?
20
A.
I WAS A BROKER FOR ARGYLL FOR MAYBE SIX MONTHS.
21
Q.
IN THAT SIX-MONTH TIME FRAME, DID YOU LEARN ARGYLL WAS
22
SELLING STOCK IN ORDER TO FUND THEIR LOANS?
23
A.
YES.
24
Q.
HOW DID YOU LEARN THIS?
25
A.
ON ONE OF THE FIRST FEW LOANS THAT I DID, THERE WAS A
AND WHEN YOU SAY YOU WERE ASSOCIATED WITH ARGYLL, DID YOU
OKAY.
I VISITED, YOU KNOW, A
AND APPROXIMATELY HOW LONG WERE YOU ASSOCIATED WITH
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CLIENT WHO MADE MENTION IF WE WERE SELLING HIS SHARES, AND I
WENT BACK TO MR. MICELI, AND HE BASICALLY, YOU KNOW, SAID THAT,
YES, THERE WAS ACTIVITY THAT WAS INVOLVED WITH THE STOCK.
Q.
DID YOU RECEIVE A COMMISSION FOR REFERRING LOANS?
A.
I DID RECEIVE A COMMISSION.
Q.
AND HOW MUCH COMMISSION DID YOU RECEIVE?
A.
IT WAS BASED ON A PERCENTAGE OF THE ACTUAL LOAN AMOUNT.
Q.
AND WHAT PERCENTAGE WAS THAT?
10
A.
IT COULD HAVE BEEN ANYWHERE FROM 3 PERCENT TO 5, 7 PERCENT.
11
Q.
OKAY.
12
A.
I DO NOT RECALL RECEIVING A BACK-END STRUCTURE FEE.
13
Q.
DO YOU KNOW AN INDIVIDUAL BY THE NAME OF JEFFREY SPANIER?
14
A.
YES, I DO.
15
Q.
DO YOU SEE HIM IN THE COURTROOM TODAY?
16
A.
YES, I DO.
17
Q.
CAN YOU PLEASE IDENTIFY AN ITEM OF CLOTHING HE'S WEARING.
18
A.
HE IS WEARING A DARK SUIT.
19
Q.
WHAT COLOR SHIRT?
20
21
OKAY.
WHAT WAS YOUR COMPENSATION STRUCTURE WITH ARGYLL;
DID YOU RECEIVE A BACK-END FEE?
MR. SCOTT:
YOUR HONOR, WE WOULD STIPULATE THIS IS
MR. SPANIER.
22
THE COURT:
23
THE WITNESS:
24
BY MS. DEVINE:
25
Q.
OKAY.
GOOD ENOUGH.
MR. SPANIER IS THERE, (INDICATING).
SO DID YOU KNOW MR. SPANIER AT THE TIME THAT YOU WERE
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WORKING AT -- OR WORKING WITH ARGYLL IN 2004?
A.
NO, I DID NOT.
Q.
HOW IS IT THAT YOU MET MR. SPANIER?
A.
I BELIEVE OUR FIRST ENCOUNTER WAS AT A CONFERENCE IN MIAMI,
CALLED A "VALUE RICH CONFERENCE."
Q.
WHAT IS THE "VALUE RICH CONFERENCE"?
A.
CONFERENCE -- IT'S A CONFERENCE THAT WAS HELD BY A COMPANY
THAT HAD A MAGAZINE CALLED "VALUE RICH MAGAZINE."
FINANCE TYPE OF CONFERENCE.
IT WAS A
THEY WOULD BRING IN INVESTORS TO
10
COMPANIES THAT NEEDED INVESTORS, AND COMPANIES THAT WERE
11
FUNDERS.
12
Q.
AND WERE YOU THERE CONDUCTING BUSINESS?
13
A.
YES, I WAS.
14
Q.
WHAT WERE YOU DOING?
15
A.
I HAD A BOOTH; OUR COMPANY WAS THERE LOOKING FOR NEW
16
BUSINESS.
17
Q.
OKAY, AND AT THAT TIME, WHAT TYPE OF BUSINESS WERE YOU IN?
18
A.
STOCK LOANS.
19
Q.
OKAY.
20
STOCK LOANS?
21
A.
22
BELIEVE WAS A COMPANY SET UP BACK IN THE 90'S.
23
COMPANY WAS USED TO DO THE FIRST FEW LOANS.
24
THAT, I CREATED AYUDA FUNDING, AND I BELIEVE THAT WAS EITHER
25
2005 OR 2006.
AND SO WHEN DID YOU FORM YOUR BUSINESS THAT INVOLVED
THE ORIGINAL STOCK LOAN COMPANY, WHICH WAS M2B CORP.
BUT THAT
AND THEN AFTER
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Q.
OKAY.
AND WAS THIS AFTER YOU LEFT ARGYLL?
A.
YES.
Q.
DO YOU RECALL GENERALLY WHEN THIS VALUE RICH CONFERENCE
WAS; WAS IT IN 2007?
A.
WAS AROUND EASTER BECAUSE I SPENT TIME WITH MY FAMILY RIGHT
AFTER THAT.
Q.
AND DID YOU MEET MR. SPANIER AT THIS CONFERENCE?
A.
YES, I DID.
10
Q.
HOW IS IT THAT YOU WERE INTRODUCED TO HIM?
11
A.
HE CAME AND INTRODUCED HIMSELF TO ME.
12
Q.
AND WHAT DID HE SAY?
13
A.
IT WAS JUST, YOU KNOW, SUBTLETIES OF INTRODUCTION,
14
BASICALLY SAYS, I KNOW WHO YOU ARE, I'M JEFFREY SPANIER.
15
SHOOK HANDS, AND WE SPOKE, JUST PLEASANTRIES, YOU KNOW,
16
INTRODUCTIONS.
17
Q.
AND DID YOU DISCUSS DOING BUSINESS WITH MR. SPANIER?
18
A.
WE HAD PRELIMINARY CONVERSATIONS ABOUT POSSIBLY DOING SOME
19
BUSINESS IN THE FUTURE.
20
Q.
DID YOU AGREE TO FOLLOW UP WITH HIM AT THAT POINT?
21
A.
I DON'T RECALL IF I AGREED TO FOLLOW UP WITH HIM OR HE
22
AGREED TO FOLLOW UP WITH ME.
23
Q.
24
FROM MR. SPANIER FOR YOUR BUSINESS?
25
A.
I DON'T REMEMBER IF IT WAS 2007 OR '08.
OKAY.
I DO REMEMBER IT
WE
I DON'T RECALL.
DID YOU LATER, AFTER THAT, START ACCEPTING REFERRALS
YES, MA'AM.
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Q.
AND DID YOU START DOING LOANS WITH MR. SPANIER?
A.
YES.
Q.
OKAY.
HISTORY?
A.
CAN YOU REPEAT THE QUESTION.
Q.
DID YOU EVER DISCUSS WITH MR. SPANIER YOUR PAST HISTORY?
A.
I BELIEVE IN THE FIRST CONVERSATION, WHEN WE MET, THERE WAS
MENTION THAT, YOU KNOW, I LOOKED YOU UP, I KNOW YOUR PAST, BUT
YOU'RE A GOOD GUY AND EVERYONE SAYS YOU'RE A GOOD GUY.
10
Q.
11
DID YOU EVER DISCUSS WITH MR. SPANIER YOUR PAST
LET'S TALK ABOUT YOUR PAST.

HAVE YOU BEEN CONVICTED OF SECURITIES FRAUD?
12
A.
YES.
13
Q.
HAVE YOU BEEN CONVICTED OF PERJURY?
14
A.
YES.
15
Q.
AND WAS THIS IN 2003?
16
A.
I BELIEVE THAT SOUNDS CORRECT.
17
Q.
CAN YOU JUST DESCRIBE WHAT IT IS THAT YOU WERE -- WHAT
18
CONDUCT YOU ENGAGED IN THAT RESULTED IN YOUR CONVICTION?
19
A.
20
TECHNICALLY WITH SECURITIES FRAUD.
21
PHONE SALES AND MANIPULATION OF STOCKS.
22
Q.
23
INDUSTRY?
24
A.
YES, MA'AM.
25
Q.
OKAY.
I WAS CHARGED WITH SECURITY -- I BELIEVE I WAS CHARGED

I ENGAGED IN HIGH PRESSURE
AND WAS THAT WHILE YOU WERE EMPLOYED IN THE SECURITIES
AND WERE YOU EMPLOYED BY A COMPANY CALLED LT
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LAWRENCE IN 1995?
A.
I BELIEVE THAT WAS THE DATES, BUT I WAS EMPLOYED BY THEM.
Q.
DID YOU ENGAGE IN THIS ACTIVITY WHILE YOU WERE EMPLOYED AT
LT LAWRENCE?
IN 1995 AT LT LAWRENCE?
A.
YES, MA'AM.
Q.
AND IS LT LAWRENCE AN INVESTMENT BANK?
A.
INVESTMENT BANKING FIRM, YES.
Q.
AND WHILE YOU WERE EMPLOYED WITH LT LAWRENCE, YOU ENGAGED
SO WE'RE CLEAR ON THE RECORD, WERE YOU EMPLOYED
10
IN SECURITIES FRAUD?
11
A.
YES, MA'AM.
12
Q.
AND DID YOU FAIL TO DISCLOSE COMMISSIONS?
13
A.
YES, MA'AM.
14
Q.
OKAY.
15
FRONT OF THE SEC?
16
A.
YES, MA'AM.
17
Q.
DID YOU LIE TO THE SEC AT THAT TIME?
18
A.
YES, I DID.
19
Q.
AND WERE YOU ALSO EMPLOYED WITH LLOYD WADE SECURITIES
20
BETWEEN 1998 AND 2000?
21
A.
YES, MA'AM.
22
Q.
AND DID YOU ALSO ENGAGE IN SECURITIES FRAUD WHILE EMPLOYED
23
IN THAT -- WHILE EMPLOYED AT LLOYD WADE?
24
A.
YES, MA'AM.
25
Q.
AND YOU WERE ARRESTED IN 2001 IN CONNECTION WITH THE
AND WERE YOU ASKED ABOUT YOUR CONDUCT IN 1998 IN
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FRAUDULENT ACTIVITY YOU'VE JUST TOLD US ABOUT?
A.
CONNECTION WITH THE CASE OF LT LAWRENCE AND COMPANY.
Q.
WITH THE GOVERNMENT, WHICH INCLUDED ALL THE OTHER CONDUCT THAT
YOU HAD ENGAGED IN, UP UNTIL THAT TIME PERIOD?
A.
YES.
Q.
SO THAT WOULD HAVE BEEN IN 2002?
A.
I BELIEVE IT WAS 2002.
10
Q.
OKAY.
11
WITH THE GOVERNMENT, IN WHICH YOU AGREED TO COOPERATE AND
12
PROVIDE TESTIMONY AGAINST OTHER INDIVIDUALS INVOLVED IN THAT
13
FRAUDULENT ACTIVITY?
14
A.
YES.
15
Q.
DID YOU, IN FACT, TESTIFY ON BEHALF OF THE GOVERNMENT?
16
A.
I DID.
17
Q.
AND THAT WAS -- WAS THAT IN 2003, OR WAS THAT -- WAS THAT
18
IN 2006?
19
A.
20
THINK THE TESTIFYING DIDN'T COME UNTIL MUCH LATER, WHICH I
21
BELIEVE COULD BE 2005 OR '06.
22
Q.
23
YOU ALSO AGREED TO PLEAD GUILTY TO PERJURY CHARGES THAT RELATE
24
TO TESTIMONY IN FRONT OF THE SEC THAT YOU JUST REFERRED TO BACK
25
IN 1998?
IN 2000 -- I BELIEVE JUNE OF 2001, I WAS ARRESTED IN
AND THEN, DID YOU ULTIMATELY ENTER INTO A PLEA AGREEMENT
AND IN 2003, DID YOU ALSO ENTER INTO AN AGREEMENT
I THINK -- THE AGREEMENT WAS 2003.
OKAY.
I DON'T THINK -- I
AND SO WHEN YOU ENTERED INTO THIS PLEA AGREEMENT,
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A.
YES, MA'AM.
Q.
AND YOUR PLEA AGREEMENT IN THAT CASE, YOU WERE FACING A
SENTENCE OF 27 TO 33 YEARS?
A.
I THINK IT WAS 27 TO 33 MONTHS.
Q.
AND ULTIMATELY, AFTER YOU TESTIFIED, THE GOVERNMENT
RECOMMENDED THAT YOU SERVE A TIME-SERVED SENTENCE; IS THAT
ACCURATE?
A.
YES.
Q.
SO GOING BACK TO YOUR MEETING WITH MR. SPANIER, WHEN YOU
120
10
DISCUSSED THE POSSIBILITY OF DOING LOANS WITH HIM, DID YOU
11
DESCRIBE TO HIM HOW YOUR LOAN PROGRAM WORKS?
12
A.
WE BOTH SPOKE ABOUT TERMS AND CONDITIONS OF THE LOANS.
13
Q.
AND THEN SO HOW DID THE RELATIONSHIP START?
14
YOU A LOAN INITIALLY?
15
A.
I BELIEVE THAT -- WE HAD A FIRST LOAN.
16
Q.
OKAY.
17
FUNDED THE LOAN THAT HE BROUGHT TO YOU, WAS THAT AYUDA FUNDING?
18
A.
YES, IT WAS.
19
Q.
DO YOU SELL THE STOCK AS PART OF YOUR LOAN PROGRAM?
20
A.
YES, I DO.
21
Q.
DO YOU HIDE THE FACT THAT YOU SELL THE STOCK?
22
A.
NO, MA'AM.
23
Q.
DO YOU KEEP IT A SECRET?
24
A.
NO.
25
Q.
AND SO HOW IS IT THAT YOU MAKE MONEY OFF OF THIS PROGRAM?
DID HE BRING
AND THE ENTITY THAT HE BROUGHT -- OR THE ENTITY THAT
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LET ME ASK IT THIS WAY:
121
CAN YOU DESCRIBE THAT FOR US.
WHY IS
IT THAT YOU NEED TO SELL THE STOCK IN ORDER TO MAKE MONEY?
A.
NOT LOSING MONEY.
HAVE TO PROTECT YOURSELF, AND THE ONLY WAY TO PROTECT YOURSELF
IN CERTAIN SECURITIES IS YOU HAVE TO SELL THE SECURITIES.
Q.
POSSIBILITY OF CREATING A DIFFERENT ENTITY BESIDES AYUDA
FUNDING TO DO THE STOCK LOANS THAT HE BROUGHT TO YOU?
THERE IS A NEED TO SELL THE STOCK TO PROTECT YOURSELF FROM
OKAY.
SO YOU ENTER INTO A TRANSACTION IN WHICH YOU
DID MR. SPANIER EVER DISCUSS WITH YOU THE
10
A.
11
ENTITY.
12
Q.
AND WHAT WERE THOSE CONVERSATIONS?
13
A.
THEY WERE MUTUAL CONVERSATIONS BETWEEN HIMSELF AND MYSELF,
14
WHERE WE WOULD CREATE AN ENTITY CALLED AMERIFUND CAPITAL.
15
DON'T REMEMBER THE EXACT TITLE.
16
HIM TO DO HIS LOANS AND NOT REALLY COMPETE -- OR HAVE TO
17
COMPETE WITH AYUDA FUNDING.
18
Q.
19
AYUDA FUNDING?
20
A.
21
ON A LOAN, AND THE COMPANY THAT WAS LOOKING FOR A LOAN, IF THE
22
BORROWER ALSO WAS USING ANOTHER AGENT, THAT AGENT WOULD COME TO
23
ME ALSO THROUGH ANOTHER ROUTE.
24
TERMS OUT THERE, SO IT WOULD ACTUALLY WOULD HURT JEFFREY.
25
HE NEEDED TO BE PROTECTED, SO IT HAD TO BE A DIFFERENT ENTITY.
THERE WAS CONVERSATIONS LATER ON ABOUT CREATING ANOTHER
OKAY.
BUT IT WAS BASICALLY TO ENABLE
AND WHY IS IT THAT HE DIDN'T WANT TO COMPETE WITH
BECAUSE IF -- IF JEFFREY WENT OUT WITH CERTAIN PARAMETERS
AND THERE WOULD BE DIFFERENT

SO
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BECAUSE IF A PERSON GOT A BETTER TERM FROM ANOTHER AGENT THEN
JEFFREY WOULD LOSE THAT BUSINESS.
Q.
POINT DONE UNDER THE AMERIFUND CAPITAL HOLDINGS ENTITY?
A.
POINT, THEN, EVERY LOAN WAS DONE UNDER AMERIFUND.
Q.
ARGYLL AT THE SAME TIME?
A.
OKAY.
SO WERE ALL THE LOANS THAT HE BROUGHT TO YOU AT SOME
THERE WAS -- THERE WAS A POINT IN TIME WHERE -- AT THAT
OKAY.
DID HE ALSO TELL YOU THAT HE WAS DOING LOANS WITH
DURING THE TIME THAT HE WAS DOING -- DURING THAT AMERIFUND
10
CAPITAL TIME?
11
Q.
YES.
12
A.
I DON'T BELIEVE HE TOLD ME THAT.
13
Q.
OKAY.
14
RELATIONSHIP WITH ARGYLL?
15
A.
16
NUMEROUS TIMES ABOUT ARGYLL.
17
Q.
18
HE EXPLAIN TO YOU WHY IT IS THAT HE WANTED TO DO BUSINESS WITH
19
YOU RATHER THAN ARGYLL?
20
A.
21
OF BURNT OUT.
22
CONCENTRATING ON OTHER THINGS, THEIR INVESTMENTS, AND I THINK A
23
BIOTECH DEAL THEY WERE WORKING ON.
24
DOING BUSINESS WITH US.
25
Q.
DID HE HAVE ANY DISCUSSIONS WITH YOU ABOUT HIS
DURING OUR TIME LINE OF WORKING TOGETHER, WE TALKED
WHAT DID HE TELL YOU ABOUT ARGYLL?
LET ME ASK THIS:
DID
I THINK ONE OF THE COMMENTS WAS MADE THAT ARGYLL WAS KIND
THEY WEREN'T DOING LOANS ANYMORE, AND THEY WERE
SO HE WANTED TO COME START
DID HE MENTION THAT ARGYLL WAS UNDER INVESTIGATION BY THE
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SEC?
A.
CAN YOU REPEAT THAT QUESTION.
Q.
DID HE MENTION THAT ARGYLL WAS UNDER INVESTIGATION BY THE
SEC?
A.
I DON'T RECALL HIM SAYING THAT.
Q.
NOW YOU TALKED ABOUT THIS AMERIFUND ENTITY.
DIFFERENT COMPENSATION STRUCTURE THAT YOU HAD WITH MR. SPANIER
WHEN YOU FORMED THIS AMERIFUND ENTITY?
A.
WAS THERE A
JEFFREY DID RECEIVE MORE COMPENSATION THAN MY OTHER
10
TRADITIONAL AGENTS.
11
THAT WERE THE BROKER FEES, HE WOULD RECEIVE ALL OF IT.
12
THAT WAS A LITTLE BIT DIFFERENT THAN WHAT WE HAD DONE WITH
13
OTHER PEOPLE ON THE STREET.
14
FEE, HIS STRUCTURE FEE, SOMETIMES HE RECEIVED ALL OF IT.
15
DON'T RECALL IF TOWARDS THE END, WE STARTED HOLDING BACK A
16
PORTION OF IT BECAUSE WE NEEDED SOME OF IT.
17
HE WOULD RECEIVE -- ON THE FRONT-END FEES

AND
AND THEN ON THE BACK-END STRUCTURE

I
BUT FOR THE MOST PART, HE DID HAVE A DIFFERENT STRUCTURE
18
FROM EVERYONE ELSE.
19
Q.
20
ELSE'S?
21
A.
22
HIM, SO HE NEEDED TO PAY THEM.
23
FRONT-END FEES.
24
FEE.
25
FEE.
AND WHY IS IT THAT HIS STRUCTURE WAS DIFFERENT FROM ANYONE
HE HAD AN OPERATION WHERE HE HAD MANY BROKERS THAT CAME TO

AND HE HAD TO PAY THEM THE
SO THEY, IN ESSENCE, TOOK ALL OF THE FRONT-END
SO JEFFREY'S ONLY MEANS OF COMPENSATION WAS THE STRUCTURE
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Q.
THAT FEE NEEDED TO BE DISCLOSED?
A.
YES.
Q.
AND WHAT WAS THAT DISCUSSION?
A.
THE DISCUSSION IS THAT IT HAD TO GO IN THE CONTRACT.
Q.
AND WAS HE OPPOSED TO THAT INITIALLY?
A.
I DON'T RECALL IF HE WAS OPPOSED TO IT.
QUESTIONS OF WHY.
RUN.
10
Q.
11
124
DID YOU HAVE A DISCUSSION WITH HIM ABOUT WHETHER OR NOT
THERE WAS
AND THAT'S THE WAY THE BUSINESS HAD TO BE
IS THERE A REASON WHY -- STRIKE THAT.

DO YOU KNOW AN INDIVIDUAL BY THE NAME OF JOHN COLSON?
12
A.
YES, MA'AM.
13
Q.
AND DID YOU DO A LOAN FOR MR. COLSON?
14
A.
YES, I DID.
15
Q.
DID MR. SPANIER BRING YOU THAT LOAN?
16
A.
YES, HE DID.
17
Q.
DO YOU RECALL WHAT MR. SPANIER TOLD YOU ABOUT MR. COLSON?
18
A.
YES.
19
Q.
WHAT DID HE TELL YOU?
20
A.
THAT THIS WAS A VERY GOOD GUY, WHO HAD MULTIPLE LOANS AT
21
ARGYLL, AND HIS -- HIS -- EITHER LOANS WERE COMING DUE, OR THEY
22
WERE -- THEY WERE IN A POSITION TO BE REFINANCED.
23
GOING TO BRING ALL OF THOSE LOANS OVER TO AYUDA.
24
Q.
25
YOU TAKE A LOOK AT THEM.
AND HE WAS
I'M GOING TO PLACE SOME EXHIBITS IN FRONT OF YOU AND HAVE
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DO YOU HAVE EXHIBIT 83 IN FRONT OF YOU?
A.
NO, I DO NOT.
Q.
DO YOU HAVE IT?
A.
NO.
82 IS THE LAST EXHIBIT.
MS. DEVINE:
CAN WE PUBLISH EXHIBIT 83, PLEASE.
BY MS. DEVINE:
Q.
RIGHT NEXT TO YOU IF THAT IS EASIER.
A.
YES, I CAN SEE THAT.
10
Q.
DO YOU RECOGNIZE THAT DOCUMENT?
11
A.
YES, I DO.
12
Q.
IS THAT MR. COLSON'S CONTRACT?
13
A.
IT LOOKS LIKE IT, YES.
14
Q.
DID YOU PROVIDE THIS CONTRACT TO MR. SPANIER?
15
A.
YES.
16
Q.
OKAY.
17
SIGN THE CONTRACT?
18
A.
YES.
19
Q.
DOES THIS CONTRACT ALLOW YOU TO SELL MR. COLSON'S SHARES?
20
A.
YES.
21
Q.
DID YOU SELL MR. COLSON'S SHARES?
22
A.
YES.
23
Q.
AND THIS CONTRACT THAT WAS GIVEN TO MR. COLSON, IS THAT
24
SIMILAR TO OTHER CONTRACTS THAT YOU WERE GIVING TO MR. SPANIER
25
WHEN YOU STARTED DOING TRANSACTIONS WITH HIM AFTER THAT VALUE
CAN YOU SEE THAT DOCUMENT, MR. BELLO?
THERE IS A MONITOR
AND DID MR. SPANIER ARRANGE TO GET MR. COLSON TO
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RICH CONFERENCE?
A.
IT LOOKS LIKE A STANDARD CONTRACT, YES.
Q.
AND DURING THAT TIME FRAME, WAS IT STANDARD PRACTICE FOR
AYUDA, OR AMERIFUND, TO HAVE THIS CONTRACT WHICH PROVIDES FOR
THE SALE OF THE SHARES?
A.
Q.
WAS -- DURING THE TIME FRAME, OR THE BEGINNING OF YOUR
RELATIONSHIP WITH MR. SPANIER, WAS IT THE GENERAL BUSINESS
PRACTICE OF AYUDA TO HAVE CONTRACTS THAT HAD LANGUAGE THAT SAID
10
YOU CAN SELL THE SHARES?
11
A.
YES.
12
Q.
AND SO THAT CONTRACT WAS PROVIDED TO MR. SPANIER EARLY ON
13
IN YOUR RELATIONSHIP?
14
A.
YES.
15
Q.
DID MR. SPANIER UNDERSTAND THAT YOU WERE SELLING THE
16
SHARES?
17
A.
18
Q.
DID YOU -- YOU PROVIDED THE CONTRACTS TO MR. SPANIER,
19
CORRECT?
20
A.
YES.
21
Q.
OKAY.
22
A.
AT THAT POINT THERE, YOU'RE ASKING ME A QUESTION ON WHAT HE
23
KNEW OR DIDN'T KNOW.
24
Q.
25
THE SHARES?
SO DID HE KNOW THAT YOU WERE SELLING THE SHARES?
FAIR ENOUGH.
I DON'T KNOW IF HE KNEW OR NOT.
DID YOU TELL HIM YOU WEREN'T GOING TO SELL
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A.
NO, I DID NOT.
Q.
DID MR. COLSON'S CONTRACT HAVE THE BACK-END STRUCTURE FEE
THAT YOU'RE REFERRING TO?
A.
I BELIEVE IT DID.
Q.
AND IS THE BACK-END STRUCTURE FEE SUPPOSED TO BE PAID UP
FRONT OR AT THE END OF THE LOAN TERM?
A.
THE CLIENT PAYS THE STRUCTURE AT MATURITY.
Q.
OKAY.
UNTIL THE END OF THE CONTRACT TERM TO PAY HIM HIS STRUCTURE
AND SO IN THE CASE OF MR. SPANIER, DID YOU WAIT
10
FEE?
11
A.
NO, I DID NOT.
12
Q.
WHEN DID YOU PAY IT TO HIM?
13
A.
I BELIEVE SHORTLY AFTER CLOSING.
14
Q.
SO DOES THE BORROWER KNOW THAT MR. SPANIER GOT THIS FEE
15
INITIALLY WHEN THE CONTRACT WAS SIGNED, WHEN THE SHARES WERE
16
DELIVERED?
17
A.
I DO NOT KNOW IF THE CLIENT KNOWS OR NOT.
18
Q.
WELL, MR. BELLO, THE CONTRACT SAYS THAT IT'S SUPPOSED TO BE
19
PAID AT THE END OF THE LOAN TERM; IS THAT RIGHT?
20
A.
CORRECT.
21
Q.
SO THE CLIENT DOESN'T KNOW THAT YOU'RE PAYING THESE FEES
22
INITIALLY?
23
MR. SCOTT:
OBJECT AS LEADING.
24
THE COURT:
NO.
25
THE WITNESS:
OVERRULED.
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BY MS. DEVINE:
Q.
END OF THE LOAN TERM, RIGHT?
A.
CORRECT.
Q.
SO THE BORROWER READING THE CONTRACT BELIEVES THAT THIS
MONEY IS GETTING PAID AT THE END OF THE LOAN TERM, CORRECT?
A.
LOAN TERM.
Q.
THE END?
10
A.
HE KNOWS IT'S AN OBLIGATION AT THE END.
11
Q.
AT THE END?
12
A.
YES.
13
Q.
BUT YOU PAID IT TO MR. SPANIER IN THE BEGINNING?
14
A.
CORRECT.
15
Q.
SO THE BORROWER DOESN'T KNOW THAT YOU PAID IT IN THE
16
BEGINNING?
17
A.
THAT COULD BE CORRECT, YES.
18
Q.
DID YOU SEND HIM A LETTER AND SAY, HEY, BY THE WAY, I JUST
19
PAID THIS STRUCTURE FEE?
20
A.
NO, I DID NOT.
21
Q.
NOW ARE YOU FAMILIAR WITH AN INDIVIDUAL BY THE NAME OF
22
RICHARD SELLERS?
23
A.
YES.
24
Q.
DID YOU DO A LOAN FOR MR. SELLERS?
25
A.
YES, I DID.
THE CONTRACT SAYS THAT THE STRUCTURE FEE GETS PAID AT THE
THE BORROWER KNOWS IT'S AN OBLIGATION AT THE END OF THE
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Q.
DID YOU DO MORE THAN ONE LOAN FOR MR. SELLERS?
A.
I BELIEVE I DID TWO.
Q.
DID MR. SPANIER BRING YOU THESE LOANS?
A.
I BELIEVE HE DID.
Q.
AND WAS HE THE REFERRING BROKER ON THAT TRANSACTION?
A.
YES.
Q.
DID MR. SPANIER RECEIVE BOTH A FRONT-END AND BACK-END FEE
ON THE TWO SELLERS' LOANS?
A.
I BELIEVE HE DID.
10
Q.
CAN YOU LOOK AT GOVERNMENT EXHIBIT 78, PLEASE.
11
(GOVERNMENT'S EXHIBIT 78 MARKED FOR IDENTIFICATION.)
12
BY MS. DEVINE:
13
Q.
14
A.
YES.
15
Q.
WHAT IS IT -- OR WHAT IS THE DOCUMENT?
16
A.
THIS IS AN INTERNAL STATEMENT CREATED AT OUR FIRM THAT
17
TRACKED THE HISTORY OF THE LOAN AND THE PROJECTED PROFIT AND
18
LOSS STATEMENT AND ALL OF ITS ACTIVITY AND WHEN MONEY WAS
19
DISBURSED AND TO WHO.
20
21
MS. DEVINE:
OKAY.
THE GOVERNMENT MOVES EXHIBIT 78
INTO EVIDENCE?
22
MR. SCOTT:
NO OBJECTION, YOUR HONOR.
23
THE COURT:
ALL RIGHT.
24
(GOVERNMENT'S EXHIBIT 78 RECEIVED INTO EVIDENCE.)
25
BY MS. DEVINE:
IT WILL COME IN.
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Q.
AND IF YOU TAKE A LOOK AT THE TOP THERE, IF WE CAN
HIGHLIGHT WHERE IT SAYS, LOAN AMOUNT, UNDER LOAN INFORMATION.
A.
THIS IS A LITTLE BLURRY, BUT IT LOOKS LIKE IT SAYS 82,500.
Q.
OKAY.
682?
A.
YEAH, THERE IS A SMUDGE.
Q.
SO DID YOU --
A.
IT LOOKED LIKE A DOLLAR SIGN.
Q.
DID YOU DO A LOAN TO MR. SELLERS IN MAY OF 2009 FOR
CAN WE HIGHLIGHT THAT A LITTLE MORE.
DOES THAT SAY
682,500.
10
$682,500?
11
A.
YES.
12
Q.
AND DID MR. SPANIER BRING YOU THAT CLIENT?
13
A.
ON THE BROKER FEE EXPENSES, IT SAYS THE BROKER IS AMERIFUND
14
CAPITAL FINANCE.
15
Q.
OKAY.
16
A.
YES, I DID.
17
Q.
DID YOU CHANGE YOUR CONTRACT TO PUT THAT YOU WOULDN'T SELL
18
MR. SELLERS' STOCK?
19
A.
YES.
20
Q.
AND WAS THAT CONTRACT CHANGED AT MR. SPANIER'S REQUEST?
21
A.
I BELIEVE IT WAS MR. SELLERS' ATTORNEY WORKING IN
22
CONJUNCTION WITH MR. SPANIER.
23
Q.
OKAY.
24
A.
ABSOLUTELY.
25
Q.
SO WHY DID YOU PUT THAT LANGUAGE IN THERE?
AND DID YOU SELL MR. SELLERS' STOCK?
BUT YOU STILL INTENDED TO SELL THE STOCK?
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A.
BECAUSE THAT'S WHAT THE CLIENT WANTED.
Q.
BUT SO, IT WAS, IN ESSENCE, SO YOU CAN MAKE THE DEAL?
A.
IN ESSENCE.
Q.
SO YOU PUT WHATEVER LANGUAGE WAS NECESSARY TO DO THE DEAL?
MR. SCOTT:
OBJECTION.
THE COURT:
NO, OVERRULED.
DO YOU UNDERSTAND IT?
THE WITNESS:
VAGUE.
NO, SIR.
BY MS. DEVINE:
10
Q.
11
TO DO THE DEAL, RIGHT?
12
A.
YES.
13
Q.
SO IF YOU DIDN'T PUT THAT LANGUAGE IN THAT MR. SELLERS
14
WANTED, HE WOULDN'T HAVE DONE THE DEAL; IS THAT FAIR?
15
A.
THAT IS FAIR.
16
Q.
AND IF WE GO DOWN TO THE BOTTOM THERE, DOES THAT SHOW THE
17
AMOUNT OF MONEY THAT MR. SPANIER MADE OFF THAT TRANSACTION?
18
A.
YES.
19
Q.
AND SO THAT TOTAL AMOUNT WAS $84,420?
20
A.
YES.
21
Q.
DO YOU SEE HOW IT SAYS THERE ARE TWO DIFFERENT ENTRIES
22
THERE, ONE IS A BROKER AND ONE IS A STRUCTURE FEE?
23
A.
YES.
24
Q.
AND IS THAT STRUCTURE FEE THIS BACK-END FEE THAT YOU WERE
25
TALKING ABOUT EARLIER?
SO YOU PUT THE LANGUAGE IN THE CONTRACT BECAUSE YOU WANTED
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A.
YES.
Q.
AND IF YOU LOOK AT THE DATE DOWN THERE --
MS. DEVINE:
132
CAN WE GO BACK TO HIGHLIGHTING THAT.
BY MS. DEVINE:
Q.
YOU RECEIVED THE SHARES, APPROXIMATELY?
A.
IT LOOKS LIKE THE FUNDING DATE HAPPENED ON 5/21.
Q.
OKAY.
MR. SPANIER'S COMPANY, AMERIFUND CAPITAL FINANCE, RECEIVED
SO THE LOAN IS FUNDED IN MAY -- AROUND MAY 18TH, 2009, WHEN
AND SO THEN 5/22, THERE IS AN ENTRY THERE, WHERE
10
$34,125?
11
A.
YES.
12
Q.
OKAY.
13
THAT IS JUNE 4TH, 2009?
14
A.
YES.
15
Q.
SO HE GOT THE STRUCTURE FEE 50,295 WITHIN A COUPLE WEEKS?
16
A.
YES.
17
AND THEN IF YOU LOOK IN THE NEXT ENTRY, IT SAYS,
MS. DEVINE:
AND IF YOU GO TO THE TOP, IF WE CAN GO
18
BACK UP TO WHERE --
19
BY MS. DEVINE:
20
Q.
21
SOLD MR. SELLERS' STOCK BETWEEN MAY 18TH, 2009, AND JULY 2009?
22
A.
YES.
23
Q.
OKAY.
24
FEE WAS TO BE PAID AT THE END OF THE LOAN TERM; IS THAT
25
CORRECT?
SO IF WE GO TO THE MIDDLE THERE, DOES -- DOES THIS SHOW YOU
BETWEEN THE 18TH OF MAY AND THE 2ND OF JULY.

AND MR. SELLERS' CONTRACT SAID THAT THE STRUCTURE
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A.
MR. SELLERS WAS TO PAY THE STRUCTURE FEE AT THE -- UNDER
THE LOAN TERM.
Q.
BUT YOU PAID MR. SPANIER THE STRUCTURE FEE UPFRONT?
A.
YES, I DID.
Q.
SO MR. SELLERS DIDN'T KNOW THAT MR. SPANIER WAS RECEIVING
THAT FEE UPFRONT?
A.
I DO NOT KNOW WHAT MR. SELLERS KNEW.
Q.
YOU KNOW WHAT MR. SELLERS' CONTRACT SAYS?
A.
MR. SELLERS' CONTRACT SAYS THAT HE'S NOT -- WE'RE NOT
10
ALLOWED TO SELL THE SHARES, AND THAT HE PAYS THE STRUCTURE FEE
11
AT THE END OF THE TERM.
12
Q.
THE END OF THE TERM, BUT NOT THE BEGINNING, RIGHT?
13
A.
MR. SELLERS IS OBLIGATED AT LOAN MATURITY TO PAY THE
14
STRUCTURE FEE.
15
Q.
16
THAT SAYS THAT YOU ARE PAYING MR. SPANIER A STRUCTURE FEE OF
17
$50,000 WITHIN A FEW WEEKS OF HIM PLEDGING HIS STOCK AS
18
COLLATERAL?
RIGHT.
IT IS AN OBLIGATION TO THE LOAN.
BUT MR. SELLERS, THERE IS NOTHING IN THE CONTRACT
19
THE COURT:
IS THAT A QUESTION?
20
MS. DEVINE:
21
LET ME ASK THAT AGAIN.
22
THE COURT:
CORRECT, YES.
YES, PLEASE.
23
BY MS. DEVINE:
24
Q.
25
YOU ARE PAYING MR. SPANIER $50,000 WITHIN A FEW DAYS AFTER
IS THERE ANYTHING IN MR. SELLERS' CONTRACT THAT SAYS THAT
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MR. SELLERS PLEDGED HIS COLLATERAL?
A.
I DON'T THINK SO.
Q.
OKAY.
134
CAN YOU LOOK AT EXHIBIT 79, PLEASE.

BY MS. DEVINE:
Q.
LOAN?
A.
IT LOOKS LIKE IT, YES.
Q.
AND DID YOU GENERALLY FOLLOW THE SAME PROCEDURE WITH THIS
IS THIS THE PROFIT AND LOSS SUMMARY FOR MR. SELLERS' SECOND
10
LOAN THAT YOU DID WITH THE PRIOR LOAN THAT WE JUST DISCUSSED?
11
A.
IT LOOKS LIKE IT.
12
Q.
SO DID YOU SELL MR. SELLERS' STOCK?
13
A.
I SOLD, IT LOOKS LIKE, A PORTION OF IT.
14
Q.
AND WAS MR. SPANIER PAID A STRUCTURE FEE FROM THE SALE OF
15
THAT STOCK?
16
A.
AMERIFUND CAPITAL FINANCE WAS PAID A STRUCTURE FEE, YES.
17
Q.
CAN YOU TAKE A LOOK AT EXHIBIT 80, PLEASE.
18
19
BY MS. DEVINE:
20
Q.
21
A.
YES.
22
Q.
IS THIS FROM YOUR BUSINESS RECORDS?
23
A.
YES.
24
MS. DEVINE:
25
MR. SCOTT:
GOVERNMENT MOVES TO ADMIT EXHIBIT 80.

NO OBJECTION.
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THE COURT:
135
ALL RIGHT.
BY MS. DEVINE:
Q.
DOCUMENT?
A.
AUGUST 5TH, 2009.
Q.
AND THIS IS AN E-MAIL FROM JEFFREY SPANIER TO YOU?
A.
YES.
Q.
AND CAN YOU JUST READ THAT OUT LOUD.
10
A.
MANNY, ANY UPDATE ON WHERE WE STAND WITH YOUR HEDGE WOULD
11
BE GREATLY APPRECIATED.
12
Q.
13
E-MAIL?
14
A.
15
HEDGED THE POSITION FAR ENOUGH THAT WE WERE COMFORTABLE.
16
Q.
WHEN YOU SAY "HEDGE," YOU MEAN SELL?
17
A.
"HEDGE" AND "SELL" ARE SYNONYMOUS WITH EACH OTHER.
18
Q.
DID HE EXPECT YOU TO SELL MR. SELLERS' STOCK IN ORDER TO
19
PAY YOU, SO YOU COULD PAY HIM THAT STRUCTURE FEE?
20
A.
CAN YOU REPEAT THE QUESTION, PLEASE.
21
Q.
DID MR. SPANIER EXPECT THAT YOU WOULD BE SELLING THE STOCK
22
IN ORDER TO PAY THAT STRUCTURE FEE?
23
24
25
WE CAN GO TO THE TOP THERE.
WHAT IS THE DATE ON THIS
AND SO WHAT DOES HE MEAN BY THAT?
WHY DID HE SEND YOU THAT
HIS STRUCTURE FEE WASN'T GOING TO BE PAID UNTIL WE HAD
MR. SCOTT:
OBJECTION.
LACKS FOUNDATION.
SPECULATION.
THE COURT:
YEAH, SUSTAINED.
CALLS FOR
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BY MS. DEVINE:
Q.
BACK-END STRUCTURE FEE PAID ON THE SECOND SELLERS' LOAN?
A.
CAN YOU GO BACK TO EXHIBIT 79.
136
ON WHAT DATE WAS THE
8/11/09.
MS. DEVINE:
THE COURT:
ANY OBJECTION?
MR. SCOTT:
THE COURT:
ALL RIGHT.
GOVERNMENT MOVES TO ADMIT EXHIBIT 79.
IT WILL COME IN.
10
BY MS. DEVINE:
11
Q.
12
WHICH HE'S ASKING FOR AN UPDATE ON THE HEDGE IS AUGUST 5TH,
13
2009?
14
A.
AUGUST 5TH, 2009.
15
Q.
IS THERE A RELATIONSHIP BETWEEN THE AUGUST 5TH, 2009
16
E-MAIL, AND THE PAYMENT ON 8/11 OR AUGUST 11, 2009?
17
A.
YES.
18
Q.
WHAT IS THAT RELATIONSHIP?
19
A.
AFTER HIM REQUESTING THAT I CHECK THE STATUS, I CHECKED
20
WITH MY DEPARTMENT TO SEE HOW MUCH WE HAD HEDGED.
21
WHAT I HAD HEDGED ON THIS LOAN AND THE PREVIOUS LOAN, I DECIDED
22
TO LET THE STRUCTURE FEE GO OUT.
23
Q.
WHEN YOU USE THE TERM "HEDGE," DO YOU MEAN SELL?
24
A.
IN THE CASE OF V-U-L-C, YES.
25
Q.
AND EXHIBIT 79 SHOWS THE DATES THAT YOU SOLD MR. SELLERS'
AND IF YOU GO BACK TO EXHIBIT 80, THE DATE OF THE E-MAIL IN
AND BASED ON
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STOCK?
A.
I BELIEVE SO.
Q.
CAN YOU TAKE A LOOK AT THAT AND --
A.
YES.
Q.
AND SO BETWEEN JULY 8, 2009, AND AUGUST 25TH, 2009, YOU
SOLD 345,000 SHARES, APPROXIMATELY, 345,000?
A.
AUGUST 25TH?
Q.
CORRECT.
A.
YEAH, 345,634 IT LOOKS LIKE.
10
Q.
AND MR. SPANIER'S STRUCTURE FEE WAS PAID ON AUGUST 11TH,
11
2009?
12
A.
YES.
13
Q.
DID YOU ALSO DO LOANS FOR DUNCAN TROY?
14
A.
YES, I DID.
15
Q.
WAS DUNCAN TROY ALSO ASSOCIATED WITH THE SAME COMPANY AS
16
MR. SELLERS?
17
A.
YES, HE WAS.
18
Q.
AND DID MR. TROY -- WAS MR. TROY'S CONTRACT ALSO CHANGED IN
19
A SIMILAR MANNER TO MR. SELLERS' CONTRACT?
20
A.
21
CONTRACT, OR HOW IT CAME ABOUT.
22
Q.
23
IMMUNITY BY THE GOVERNMENT?
24
A.
YES, I AM.
25
Q.
WHAT DO YOU UNDERSTAND THAT AGREEMENT TO MEAN?
IT SHOWS THE ACTUAL TRADE DATES.
I DON'T RECALL IF IT WAS CHANGED, OR WE USED THE SAME
MR. BELLO, ARE YOU TESTIFYING HERE TODAY UNDER A GRANT OF
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A.
THAT IF I SIT HERE TODAY AND TELL THE TRUTH OF ALL THE
QUESTIONS I'M ASKED TODAY, THAT THE GOVERNMENT WILL GIVE ME
IMMUNITY ON EVERYTHING I SAY TODAY.
Q.
INCLUDE WHETHER OR NOT YOU LIE OR COMMIT PERJURY?
A.
Q.
DO YOU UNDERSTAND THAT YOU COULD STILL BE PROSECUTED IF YOU
DON'T TELL THE TRUTH TODAY?
A.
YES.
10
Q.
CAN YOU TAKE A LOOK AT GOVERNMENT EXHIBIT 82, PLEASE.
AND DO YOU ALSO UNDERSTAND THAT THAT AGREEMENT DOES NOT
11
I DO KNOW THAT.
12
BY MS. DEVINE:
13
Q.
DO YOU RECOGNIZE THIS DOCUMENT?
14
A.
YES.
15
Q.
DOES THIS DOCUMENT SHOW ALL THE -- ALL OF THE TRANSACTIONS
16
AND FEES THAT YOU PAID MR. SPANIER'S COMPANY, AMERIFUND CAPITAL
17
FINANCE, BETWEEN DECEMBER 2008 AND JULY 2010?
18
A.
TO THE BEST OF MY KNOWLEDGE, THESE ARE ALL THE FEES.
19
Q.
AND THIS IS FROM YOUR BUSINESS RECORDS?
20
A.
THIS IS A BALANCE SHEET BREAKDOWN FROM MY ACCOUNTING
21
DEPARTMENT.
22
MS. DEVINE:
MOVE TO ADMIT EXHIBIT 82.
23
THE COURT:
ANY OBJECTION?
24
MR. SCOTT:
NO OBJECTION.
25
THE COURT:
IT WILL COME IN.
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BY MS. DEVINE:
Q.
THE NAME OF DONALD ADAMS?
A.
YES, I DO.
Q.
WAS DONALD ADAMS REFERRED TO YOU BY MR. SPANIER?
A.
YES, HE WAS.
Q.
CAN YOU TAKE A LOOK AT GOVERNMENT'S EXHIBIT 317-E.
DO YOU REMEMBER A TRANSACTION INVOLVING AN INDIVIDUAL BY
(GOVERNMENT'S EXHIBIT 317-E MARKED FOR IDENTIFICATION.)
10
BY MS. DEVINE:
11
Q.
12
A.
CAN YOU GIVE ME A MOMENT TO LOOK AT IT?
13
Q.
SORRY.
14
A.
YES.
15
Q.
WHAT IS THE DOCUMENT?
16
A.
THIS IS A LETTER THAT CAME FROM ONE OF THE LAW FIRMS THAT
17
MR. ADAMS HAD RETAINED IN CONJUNCTION WITH THE RETURN OF HIS
18
SHARES.
19
MS. DEVINE:
OKAY.
AT THIS TIME, THE GOVERNMENT MOVES
20
EXHIBIT 317-E INTO EVIDENCE.
21
THE COURT:
ANY OBJECTION?
22
MR. SCOTT:
23
THE COURT:
IT WILL COME IN.
24
(GOVERNMENT'S EXHIBIT 317-E RECEIVED INTO EVIDENCE.)
25
BY MS. DEVINE:
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Q.
AND IS THIS LETTER ADDRESSED TO -- WELL, CAN WE HIGHLIGHT
THAT, AND YOU CAN TELL US, WHO IS THIS LETTER ADDRESSED TO?
A.
HOLDINGS, TO AMERIFUND CAPITAL GROUP, LLC, IN NEVADA, AMERIFUND
CAPITAL GROUP, LLC, IN FORT LAUDERDALE, AND THEN TO JEFFREY
SPANIER, AMERIFUND CAPITAL FINANCE, IN BOCA RATON.
Q.
STOCK?
A.
I DON'T REMEMBER EXACTLY WHAT MR. ADAMS ACCUSED US OF.
10
Q.
DID YOU SELL HIS STOCK?
11
A.
I SOLD SOME OF HIS STOCK, YES.
12
Q.
DID YOU HAVE A CONVERSATION WITH MR. SPANIER ABOUT
13
MR. ADAMS' ALLEGATIONS?
14
A.
I THINK WE HAD A FEW CONVERSATIONS ON IT.
15
Q.
WHAT WERE THOSE CONVERSATIONS?
16
A.
THE EXACT DETAILS OF OUR CONVERSATIONS, I DON'T RECALL.
17
OBVIOUSLY, IT WAS QUITE SOME TIME AGO, BUT THE -- THE GENERAL
18
TERMS OF THE CONVERSATION WAS THAT WE HAD A LOAN HERE, WHERE WE
19
SOLD SOME SHARES.
20
WANTED TO BACK OUT OF THE LOAN.
21
AND THERE WERE NUMEROUS REASONS WHY HE DIDN'T WANT TO DO THE
22
LOAN, BUT I THINK ALL OF IT REALLY LED AND POINTED THAT THE
23
BORROWER REALLY DID NOT UNDERSTAND THE CONTRACT HE GOT INTO.
24
Q.
25
YOU KNOW?
TO MYSELF AT AYUDA, TO MYSELF AT AMERIFUND CAPITAL
AND DID MR. ADAMS ACCUSE YOU AND MR. SPANIER OF SELLING HIS
THE GUY ENTERED INTO A LOAN, AND NOW HE

HE DIDN'T WANT TO DO THE LOAN.
AND WHO WAS THE ONE THAT EXPLAINED THAT CONTRACT TO HIM; DO
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A.
IN THE BEGINNING?
Q.
IN THE BEGINNING.
A.
I DON'T KNOW.
BEEN ONE OF HIS AGENTS.
Q.
GEORGE COATES?
A.
YES, I DID.
Q.
DID MR. COATS COMPLAIN ABOUT HIS STOCK BEING SOLD?
A.
MR. COATS, WE TRIED TO DO A LOAN.
IT COULD HAVE BEEN JEFFREY.
141
IT COULD HAVE
DID YOU ALSO DO A LOAN FOR AN INDIVIDUAL BY THE NAME OF
WE NEVER REALLY -- WE
10
DID NOT OFFICIALLY DO A LOAN, BUT HE DID COMPLAIN ABOUT HIS
11
STOCK BEING SOLD.
12
Q.
13
MR. SPANIER?
14
A.
YES, IT WAS.
15
Q.
CAN YOU TAKE A LOOK AT EXHIBIT 318, PLEASE.
AND WAS THAT TRANSACTION ALSO REFERRED TO YOU BY
16
17
BY MS. DEVINE:
18
Q.
DO YOU RECOGNIZE THIS DOCUMENT?
19
A.
YES.
20
Q.
IS THIS AN E-MAIL FROM BARRY KAYE TO JEFFREY SPANIER IN
21
WHICH YOU RECEIVED A COPY?
22
A.
YES.
23
Q.
AND DO YOU KNOW WHO BARRY KAYE IS?
24
A.
YES.
25
Q.
WHO IS BARRY KAYE?
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A.
2
3
142
HE WAS THE CFO OF COATES INDUSTRY, I BELIEVE.

MS. DEVINE:
OKAY.
GOVERNMENT MOVES TO ADMIT
EXHIBIT 318.
MR. SCOTT:
THE COURT:
ALL RIGHT.
MS. DEVINE:
IT WILL COME IN.
COULD WE GO TO THE TOP THERE.
BY MS. DEVINE:
Q.
WHAT IS THE DATE ON THAT DOCUMENT?
10
A.
AUGUST 26TH, OF '09.
11
Q.
DID YOU RECEIVE A COPY OF THIS E-MAIL?
12
A.
I BELIEVE IT WAS FORWARDED TO ME, YES.
13
Q.
COULD YOU JUST READ THE CONTENTS OF THAT E-MAIL.
14
A.
HI JEFFREY, I HAD REQUESTED IN YESTERDAY'S E-MAIL BELOW
15
THAT YOU PLEASE CONFIRM BY THE END OF THE DAY, YESTERDAY, THAT
16
MR. COATES' SHARES WERE BEING RETURNED WITHOUT DELAY.
17
ADVISE IMMEDIATELY WHAT ACTION YOU HAVE TAKEN ON THIS REQUEST.
18
SINCE YOU CONFIRMED TO ME THAT YOU WOULD NEVER ENGAGE IN ANY
19
TRANSACTIONS WITH THESE SHARES WHICH WERE DEPOSITED WITH YOU IN
20
GOOD FAITH, IN ANTICIPATION OF DOING BUSINESS TOGETHER, THEY
21
SHOULD BE READILY AVAILABLE FOR IMMEDIATE TRANSFER BACK BY
22
DWAC, TO MR. COATES' BROKERAGE ACCOUNT.
23
THE LACK OF COMMUNICATION ON THIS REQUEST IS CAUSING US SOME
24
CONCERN ABOUT YOUR CONTROL AND POSSESSION OF THESE SHARES.
25
THIS CAN BE IMMEDIATELY OVERCOME BY YOUR RESPONSE TO THIS
PLEASE
PLEASE UNDERSTAND THAT
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REQUEST.
THANK YOU, BARRY C. KAYE, CHIEF FINANCIAL OFFICER.
Q.
AND THAT E-MAIL IS ADDRESSED TO MR. SPANIER?
A.
YES.
Q.
DID MR. SPANIER ALSO REFER TO YOU ANOTHER LOAN TRANSACTION
FOR AN INDIVIDUAL BY THE NAME OF SCOTT WOLSTEIN?
A.
I BELIEVE HE DID.
Q.
DID YOU EVER DO A LOAN WITH MR. WOLSTEIN?
A.
WE TRIED AND WE DID NOT SUCCEED, DID NOT DO A LOAN.
Q.
DO YOU KNOW WHY YOU DIDN'T DO A LOAN?
10
A.
I WOULD BE SPECULATING.
11
Q.
WERE THERE NEGOTIATIONS WITH YOUR ATTORNEY CONCERNING THIS
12
LOAN?
13
A.
YES.
14
Q.
WHAT IS THE NAME OF YOUR ATTORNEY?
15
A.
I BELIEVE MY ATTORNEY WAS CHRISTOPHER GEES.
16
Q.
OKAY.
17
LENDING PRACTICES?
18
A.
YES.
19
Q.
DO YOU RECALL THE TIME FRAME THAT THAT HAPPENED?
20
A.
SOMETIME LATER, MID TO LATE THIRD QUARTER OF '09, EARLY
21
FOURTH QUARTER '09, SOMETIME AROUND THERE.
22
Q.
WHAT CHANGE DID YOU MAKE IN YOUR LENDING PRACTICES?
23
A.
WE WOULD NOT SELL ANY SHARES OF ANY STOCK THAT WAS AN
24
AFFILIATE.
25
Q.
I DON'T REMEMBER WHY.
DID THERE COME A POINT IN TIME THAT YOU CHANGED YOUR
WHAT DO YOU MEAN BY THE TERM "AFFILIATE"?
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A.
IF SOMEONE WAS AN OFFICER OR DIRECTOR OF A PUBLICLY-TRADED
COMPANY, OR WAS A CONTROL PERSON, OR HAD MORE THAN 5 PERCENT
OWNERSHIP, WE COULD NOT SELL THOSE SHARES INTO THE OPEN MARKET.
WE WOULD HAVE TO USE DIFFERENT TYPES OF HEDGING STRATEGIES.
Q.
OPTION?
A.
YES.
Q.
OKAY.
MR. SPANIER AT THE TIME?
SO WERE YOU ABLE TO ACTUALLY OFFER AFFILIATES A STOCK LOAN
DID YOU COMMUNICATE THIS CHANGE IN YOUR POLICY TO
10
A.
YES.
11
Q.
WAS HE HAPPY ABOUT IT?
12
A.
I DON'T THINK HE WAS HAPPY OR ANY OF THE AGENTS WERE HAPPY.
13
Q.
DID THAT MEAN THAT THERE WOULD BE LESS BUSINESS COMING?
14
A.
YES.
15
Q.
DID MR. SPANIER STOP REFERRING LOANS AFTER THAT?
16
A.
I DON'T RECALL.
17
AFTER THAT.
18
Q.
19
GETTING A LOAN FROM A DIFFERENT LENDER?
20
A.
I CAN'T SPECULATE THAT.
21
Q.
AND TO THE EXTENT THAT YOU WERE HAVING A HARD TIME WITH
22
YOUR MEMORY, WOULD GOVERNMENT EXHIBIT 82, DOES THAT SHOW ALL OF
23
THE TRANSACTIONS IN 2009 WITH MR. SPANIER'S COMPANY?
24
A.
25
Q.
SO TO THE EXTENT YOU'RE HAVING DIFFICULTY REMEMBERING DATES
OKAY.
I THINK WE MAY HAVE DONE ANOTHER LOAN
DO YOU KNOW WHETHER OR NOT MR. WOLSTEIN ENDED UP
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OF TRANSACTIONS, AND WHETHER LOANS WERE REFERRED TO YOU AFTER
YOU CHANGED YOUR LENDING PRACTICES, WOULD GOVERNMENT EXHIBIT 82
HELP YOU REMEMBER WHEN THESE TRANSACTIONS OCCURRED?
A.
DOLLAR AMOUNT.
NEXT TO IT, SO I COULDN'T --
Q.
ENTRY THERE FOR DECEMBER 24TH, 2009.
A.
UH-HUH.
10
Q.
BROKER FEE, 111,187.50.
11
THAT MR. SPANIER HAD DONE A TRANSACTION WITH YOU PRIOR TO
12
DECEMBER 24TH, 2009?
13
A.
THAT IS WHAT IT LOOKS LIKE.
14
Q.
SO IS IT FAIR TO SAY THAT WITH RESPECT TO EACH ENTRY, THAT
15
A LOAN HAD BEEN REFERRED AND A TRANSACTION HAD CLOSED SOMETIME
16
BEFORE THE PAYMENT WAS MADE?
17
A.
YES.
18
Q.
OKAY.
19
MR. SPANIER BETWEEN DECEMBER 4TH, 2008, AND JULY 6TH, 2010?
20
A.
THE DOCUMENT SAYS 1,054,300.68.
21
Q.
DID YOU EVER BORROW MONEY FROM MR. MICELI?
22
A.
YES, I DID.
23
Q.
AND DID YOU LOAN HIM MONEY?
24
A.
YES, I DID.
25
Q.
DID YOU LOAN HIM MONEY IN FEBRUARY OF 2011?
THIS EXHIBIT JUST SHOWS THE ACTUAL FEE THAT WENT OUT, A
OKAY.
IT DOESN'T CORRELATE WITH AN ACTUAL TRANSACTION
SO IF YOU LOOK AT PAGE 2, FOR EXAMPLE, THERE IS AN
DOES THAT MEAN THAT YOU HAD --
WHAT WAS THE TOTAL AMOUNT OF MONEY THAT YOU PAID
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A.
YES, I DID.
Q.
HOW MUCH DID YOU LOAN HIM?
A.
$250,000.
Q.
WHY DID YOU LOAN HIM $250,000?
A.
HE HAD SOME LOANS THAT HE NEEDED TO DO HE SAID TO ME, AND
THAT HE WAS SHORT MONEY, AND HE NEEDED MY HELP.
ONE-MONTH PROMISSORY NOTE WITH A PROMISE THAT AS SOON AS HE
SOLD THE SECURITIES, AND THEY SETTLED, HE WOULD PAY ME BACK.
Q.
AND HE DID A
DID YOU TELL MR. SPANIER THAT YOU HAD LOANED MR. MICELI
10
MONEY?
11
A.
LATER ON.
12
Q.
AND AT SOME POINT, DID YOU LEARN THAT THE OFFICES OF ARGYLL
13
WERE SEARCHED BY THE FBI IN APRIL OF 2011?
14
A.
15
THAT HE'D GOTTEN SEARCHED, OR THEY HAD GOTTEN CHARGED.
16
RECALL, YOU KNOW, EXACTLY WHICH ONE OF THE TWO IT WAS.
17
Q.
18
ACTIVITY AT THE ARGYLL OFFICES?
19
A.
EVENTUALLY, YES.
20
Q.
DID MR. SPANIER ATTEMPT TO DO BUSINESS WITH YOU AFTER THAT?
21
A.
I BELIEVE HE DID.
22
Q.
WHAT DO YOU RECALL?
23
BUSINESS WITH YOU?
24
A.
25
I DON'T RECALL IF THEY WERE -- IF THEY WERE -- IF IT WAS -I DON'T
BUT YOU LEARNED THAT THERE WAS SOME TYPE OF LAW ENFORCEMENT
HOW WAS IT THAT HE WANTED TO DO
I BELIEVE HE WAS GOING TO SHOW US MORE LOANS.

MS. DEVINE:
THANK YOU.
I HAVE NOTHING FURTHER.
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THE COURT:
MR. SCOTT?
MR. SCOTT:
YES, PLEASE, YOUR HONOR.
147
CROSS-EXAMINATION
BY MR. SCOTT:
Q.
GOOD AFTERNOON, SIR.
A.
GOOD AFTERNOON.
Q.
SO YOU ARE IN THE STOCK LOAN BUSINESS?
A.
I WAS IN THE STOCK LOAN BUSINESS.
Q.
YOU WERE IN THE STOCK LOAN BUSINESS?
10
WHEN YOU WERE WITH YOUR COMPANY, AYUDA, YOU WERE IN THE
11
STOCK LOAN BUSINESS?
12
A.
YES.
13
Q.
AND BEFORE THAT, YOU WORKED WITH ARGYLL IN THE STOCK LOAN
14
BUSINESS?
15
A.
CORRECT.
16
Q.
AND IN THE STOCK LOAN BUSINESS, PEOPLE WOULD PLEDGE STOCK
17
TO YOU AS COLLATERAL, RIGHT?
18
A.
CORRECT.
19
Q.
COLLATERAL FOR LOANS THAT YOU WOULD THEN GIVE TO PEOPLE?
20
A.
CORRECT.
21
Q.
YOU DID THIS BOTH AT AYUDA AND WERE FAMILIAR WITH THIS SAME
22
PROCESS AT ARGYLL?
23
A.
YES.
24
Q.
NOW YOUR TESTIMONY TODAY IS THAT SOMETIMES AT AYUDA, YOU
25
SOLD SOME OF THE STOCK THAT HAD BEEN PLEDGED AS COLLATERAL FOR
EXHIBIT
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C.A. No. 14-50306

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
__________________________________________
UNITED STATES OF AMERICA
Plaintiff-Appellee,
v.
JEFFREY SPANIER,
Defendant-Appellant.
___________________________________________
Appeal from the United States District Court
For the Southern District of California
Honorable Roger T. Benitez, District Judge
BRIEF FOR APPELLEE UNITED STATES
LAURA E. DUFFY
United States Attorney
BRUCE R. CASTETTER
Assistant U.S. Attorney
Chief, Appellate Section
Criminal Division
FAITH A. DEVINE
Assistant U.S. Attorney
880 Front Street, Room 6293
San Diego, California 92101-8893
Telephone: (619) 546-6784
Attorneys for Plaintiff-Appellee
United States of America
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Although the Act is clear that the findings must be made, if only in the
judges mind, before granting the continuance.., the Act is ambiguous
on precisely when those findings must be `set forth, in the record of
the case. However, this ambiguity is resolved, at the very least the
Act implies that those findings must be put on the record by the time a
district court rules on a defendants motion to dismiss under
3162(a)(2).
Id.
As explained below, the district court complied with Zedner and Bryant
when it issued a written order setting forth its previous ends-of-justice findings to
support the trial continuances it granted from the date of the mistrial to the date
now set for trial. [ER 88-95; SER 1620-1623.] The district court did not invoke
the ends-of-justice exclusion retroactively in order to manufacture a justification
for the exclusion. The record demonstrates that the ends-of-justice findings set
forth in the district courts order were facts that were known to the district court at
the time that it granted each of the continuances.
4.
The December 5, 2013 Exclusion Order Tolled the Speedy

Trial Clock Between May 31, 2013 and December 10, 2013
There is no dispute that a new Speedy Trial clock began to run on May 31,
2013 when the district court declared a mistrial. However, the district courts
Order dated December 5, 2013, tolled the Speedy Trial clock between May 31,
2013 and December 10, 2013. In that order, the district court acknowledged that it
had granted continuances of the trial date based upon the ends-of-justice
exclusion in the Speedy Trial Act. [ER 93.] It also acknowledged that it had not
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announced those previously made findings on the record since the new Speedy
Trial clock began to run, but that it was sufficient to detail those findings when it
ruled on Spaniers Motion to Dismiss. [Id.] In its order, the district court relies on
the Supreme Courts decision in Zedner noting that the findings must be made, if
only in the judges mind, before granting a continuance but that those findings
must be put on the record by the time a district court rules on a defendants motion
to dismiss under 3162(a)(2). [Id.]
The district courts order complies with Zedner by putting its previously
made findings on the record when it ruled on Spaniers Speedy Trial motion. The
exclusion order also complies with Ninth Circuit precedent. The procedure
followed by the district court in this case is identical to the procedure followed by
the district court in Bryant. In Bryant, the district court had granted four prior
continuances based on complexity, but did not set forth its reasons for granting the
continuances until it ruled on the defendants speedy trial motion. Bryant, 726
F.2d at 511. This court held that the district court was not required to prepare the
record at the precise moment it granted the continuances. Id. Therefore, the
district court here did not commit error when it waited to detail its findings until it
ruled on Spaniers Speedy Trial motion.
The district courts order also satisfied both of the requirements this Court
has held must be present to justify an ends-of-justice exclusion. See Clymer, 25
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F.3d at 828; Jordan, 915 F.2d at 565-66. First, it is limited in time. The order
refers only to the continuances from the date of the mistrial to the date now set for
trial. The order is not open ended nor does it bootstrap any prior exclusion order.
The district court specifically acknowledged that the Speedy Trial clock began to
run on May 31, 2013, the date of the mistrial. Therefore, it is clear that the
December 5, 2013 order only excludes time from May 31, 2013. Furthermore, the
exclusion is limited to the date now set for trial and did not continue indefinitely.
Second, the order justifies the continuances by referencing the facts that
were known to the district court when it granted the continuances. Spaniers
principal argument is that the district court references facts learned after the
Speedy Trial clock had expired. However, Spaniers argument is premised upon a
misinterpretation of the district courts order. The order references ends-of-justice
findings that were made to support more than one continuance.
[Id.]
comparison of the trial record with the findings announced by the district court
demonstrates that the facts relied on by the district court were known to the district
court when it granted each of the continuances.
a.
The Speedy Trial Act Was Tolled Between May 31, 2013
and October 8, 2013
The first continuance supported by the exclusion order was granted on

June 10, 2013 when the district court set a trial date of October 8, 2013. In its
December 5, 2013 order, the district court first noted that this case had been
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previously declared complex upon agreement of all sides. [ER 91.] The district
court further noted the complexity continued, that the case still involved a
complex scheme of conspiracy and fraud involving complicated stock pledging
agreements and multiple entities over a period of at least seven years, that there
have been complex issues of law and fact, and that the government still plans to
have witnesses return for trial from across the globe. [ER 92.]
The district court specifically noted that [I]mmediately following the trial,
the government learned of an issue regarding juror conduct, that an investigation
was conducted, and that a briefing schedule was issued by the district court for the
month of July 2013 to address this issue. [Id.] The district court also referenced
the voluminous filings in the case and the excess fees paid to Spaniers counsel
based upon the cases complexity. [Id.] All of these facts were known to the
district court on June 10, 2013 when it granted the first continuance.11
The case was first declared complex on April 23, 2012. [SER 67-68.] After
that date, Spaniers counsel repeatedly argued to the district court that the case was
complex, and that he needed additional time to prepare. [SER 77-79, 84-85, 99,
Although not referenced in the exclusion order, the district court also stated
on the record that the unavailability of the transcripts was another reason for the
ends-of-justice continuance. [ER 97-99.] Since the transcripts were ordered in
July and not filed until July 25, 2013, the district court knew that the transcripts
were not available when it granted the first continuance on June 10, 2013.
11
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112-123, 133.] On December 14, 2013, Spaniers counsel told the district court
that this case is deemed complex as a matter of law. [SER 99.]
From May 14, 2013 to June 4, 2013, the district court presided over the first
trial in the case. When the mistrial was declared, Spanier did not inform the district
court that he no longer believed that the case was complex. The district court
asked the parties when they wanted to retry the case. [ER 241-243.] At Spaniers
suggestion, the district court set a status hearing for June 10, 2013 because Spanier
wanted to know the divide of the jury.
Because there was second phase of the trial relating to the co-defendant
McClain, the jury was not dismissed until June 4, 2013. As noted by the district
court, after the jury was dismissed, the United States was informed of an issue
regarding contact between Spaniers investigator and a juror. [ER 91, 192-220.]
This issue was brought to the district courts attention.
[Id.]
That event
precipitated an investigation to determine whether or not the conduct impacted the

integrity of the trial, including the jurys guilty verdict against McClain. [ER 91;
SER 204.]
At the June 10, 2013 hearing to set a trial date, Spaniers counsel spent the
majority of the hearing informing the district court about his objections to the
investigation relating to the juror contact, and told the district court that he
intended to file a motion. [ER 192-220.] Spaniers counsel also made a discovery
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request which asked that the Government produce all discovery relating to its
investigation. [ER 209, 216-217.] Spaniers counsel also informed the district
court that he objected to the forfeiture order. [ER 185-188.]
In addition to addressing the juror contact and forfeiture issues, the district
court addressed the issue of setting a trial date. By that time, the district court had
presided over the trial, seen the evidence, personally observed the complexity of
the issues, and heard from witnesses that traveled from across the globe. There
were no new circumstances, at that point, which could have possibly changed the
district courts prior finding that the case was complex. In fact, as noted by the
district court, the juror and forfeiture issues that were raised between May 31, 2013
and June 10, 2013 added to the complexity and demonstrated that Spaniers
counsel was not prepared to retry the case on the 68th day after the mistrial.
[ER 93.] Indeed, as evidenced by the CJA voucher attached to the order, Spaniers
counsel spent that time period doing precisely what he told the district court he
intended to do at the June 10, 2013 hearing focusing on the juror and forfeiture
issues that arose after the trial.
[SER 1620-1623.] Spanier argues that the district
court relied on this bill to make post-hoc rationalizations. However, this argument
is again premised upon a misinterpretation of the district courts order. The order
merely attached the voucher to corroborate the facts that were told to him by
Spaniers counsel on June 10, 2013.
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What the record up to this date shows is that, in the judges mind, the entire
case was in a flux because of the pending juror issue, which added to the
complexity that already existed. The record also shows that the district court
reasonably believed that Spaniers counsel was not prepared to retry the case by
August 7, 2013. Relying on these facts, which were known to the district court on
June 10, 2013, the retrial was set for October 8, 2013. Before setting the date, the
district court asked the parties about their availability. Spaniers counsel stated
that he was unavailable until after October 4. [ER 189, 220.]
Following the June 10, 2013 hearing, the district court set a briefing
schedule to address the juror and forfeiture issues. [SER 202.] This schedule set
deadlines from July 1, 2013 up to July 29, 2013. The fact that the district court set
a month-long schedule shows that he believed the issues raised by Spaniers
counsel were complex. Given all of these facts, it was reasonable for the district
court to assume in his mind that an ends-of-justice continuance of the trial date
to October 8, 2013 was justified due to the complexity of the case. Therefore, the
first continuance granted on June 10, 2013 operated to toll the Speedy Trial clock
until October 8, 2013.
Spanier claims that he told the district court that he was available to retry the
case at the courts leisure. However, that statement was made on May 31, 2013
before he was aware of the juror and forfeiture issues.
33
[ER 241-243.]
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transcript of the June 10, 2013 hearing shows that his position changed
significantly by then. When asked again about a trial date, he told the district court
that he was unavailable until after October 4. [ER 189, 220.] As noted by the
district court, Spanier admits that neither he nor his counsel objected to setting the
trial beyond August 9, 2013. [ER 90.]
Furthermore, Spaniers counsel did not tell the district court that he elected
not to file a motion relating to the jury issue until August 5, 2103. [SER 242-244.]
However, he did file an extensive motion relating to the forfeiture issue.
[SER 205-241.] The district court asked Spaniers counsel whether he needed to
address the forfeiture motion, and Spaniers counsel stated that the district court
could do so at a later date in an ancillary proceeding. [SER 242-244.] The district
court specifically refers to the pending forfeiture issues to support its complexity
findings. [ER 92.] Again, Spanier did not inform the district court at the August 5,
2013 hearing that he no longer believed the case was complex and that he wanted
an earlier trial date. Thus, in the judges mind, on August 5, 2013, the case
remained complex and Spaniers forfeiture motion was still pending.12
Spaniers forfeiture motion was filed on August 1, 2013. It remained

pending up to the December 10, 2013 trial date. Therefore, assuming that the
Speedy Trial Clock was not tolled after the first continuance granted on June 10,
2013, it was tolled when Spanier filed his forfeiture motion. See, 18 U.S.C.
3161(h)(10)(D) (excluding delay resulting from any pretrial motion, from the
filing of the motion through the conclusion of the hearing on, or other prompt
disposition of, such motion).
12
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b.
The Speedy Trial Clock Was Tolled Between October 8,

2013 and December 5, 2103
The second continuance supported in the district courts December 5, 2013

exclusion order occurred on August 19, 2013. On that date, the district court set a
status hearing on its own motion because it thought it might not be able to proceed
on October 8, 2013. After hearing from counsel, and after the Court indicated
that it would proceed to trial on the original date set, it was [Spaniers] counsel
who argued for a further continuance. [ER 91, 176-181.] Spaniers counsel told
the district court that he had a planned vacation and would not return until a few
days before the trial was to begin. Spaniers counsel told the district court that the
continuance would allow him to have a real vacation. [ER 178-180.] The district
court interpreted his request for a continuance as needing additional time to
prepare, which justified a further ends-of-justice continuance.
[ER 91.]
The
district court then continued the trial date from October 8, 2013 to December 10,
2013.
Spanier filed his Speedy Trial motion on November 20, 2013, which was
only 43 days after October 8, 2013. The filing of this Speedy Trial motion tolled
the Speedy Trial clock from November 20, 2013 to December 5, 2013 when the
district court ruled on the motion. See 18 U.S.C. 3161(h)(1)(D) (exclusion of
time from Speedy Trial Act from the filing of pre-trial motion to prompt
disposition). The trial commenced on December 10, 2013. Therefore, any further
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ends-of-justice exclusions were unnecessary because the Speedy Trial clock had
not expired between October 8, 2013 and December 10, 2013.
c.
The Speedy Trial Clock Was Tolled Between

December 5, 2013 and December 10, 2013
Finally, since Spanier filed his motion to dismiss on November 20, 2013 and
a hearing was held on December 5, 2013, the district courts order placed
additional findings on the record to support a third continuance from that date up to
the date of the trial. In support of that continuance, the district court noted that
discovery was still being produced relating to a cooperating witness that was
willing to testify. [ER 92.] Although the district courts order refers to this
witness as being new, the record clarifies that the witness was not actually new,
but was a witness that was named by the United States in the first trial. [ER 141;
SER 193-201.] The witness also was not a cooperating witness but a witness
who required a grant of immunity before he would testify. [Id.]
In the first trial, the United States notified Spanier that it intended to call
Manny Bello as a witness. [SER 185-192.] The United States provided 350 pages
of discovery relating to Bello in the first trial. [SER 200.] Spanier filed a motion
to exclude Bello because he had not received any reports of interviews conducted
by the FBI of Bello. [SER 184-192.] The United States informed the court that
Bello would not agree to testify without immunity, and that he had invoked his
Fifth Amendment rights. [SER 193-201.] Because Bello had invoked his Fifth
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Amendment right not to speak, there were no prior statements made by Bello to the
United States that could be produced to Spanier. [Id.] The United States also
informed the district court that a hearing would be necessary to determine if Bello
had a legitimate basis to assert the Fifth Amendment. [Id.] Spaniers counsel
insisted that if Bello testified, he would request a mid-trial continuance in order to
properly prepare his cross-examination since he did not have the benefit of any
prior statements made by Bello to the United States. [Id.] The United States
elected not to call Bello in the first trial.
A month before the December 2, 2103 hearing, the United States granted
immunity to Bello. [ER 139.] Discovery was provided to Spanier well in advance
so that he could properly prepare his cross-examination of Bello without having to
request a mid-trial continuance. [Id.] The district court noted this new factual
circumstance added to the complexity of the case. [Id.] It also noted that Spaniers
counsel, in order to be effective, needed time to review the additional discovery
related to this witness. [ER 139-141.] As explained above, this additional ends-ofjustice continuance was unnecessary because the first continuance that was granted
tolled the Speedy Trial clock to October 8, 2013 and the clock did not expire
between October 8, 2013 and December 10, 2013.
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5.
The District Courts Exclusion Order Complies With Supreme

Court and Ninth Circuit Precedent
Spanier argues that Lloyd, Frey, Jordan, and Clymer, support his argument
that the district court violated the Speedy Trial Act. These cases are inapposite,
because, unlike this case, the district courts did not satisfy either the time
specificity or justification on the record requirements.
For example, in Lloyd, the district court entered an exclusion order which
was based solely on the need for continuity of counsel provision in 18 U.S.C.
3161(h). 125 F.2d at 1267. This Court was not satisfied with the findings made
by the district court because the district court relied on vague statements of one
partys lawyer regarding scheduling conflicts and did not inquire about
the
scheduling conflicts or general desires for a continuance of the other parties. Id.
Here, the district courts exclusion order is based upon more detailed complexity
findings. Furthermore, unlike Lloyd, the district court here conducted an inquiry
from all parties about scheduling. The district court specifically accommodated
Spaniers counsels request to continue the trial a second time so he could have
more time to prepare when he returned from vacation.
In Frey, the district court waited until after the defendants conviction was
vacated on appeal to make the ends-of-justice findings. Frey, 735 F.2d at 352-353.
By doing so, there was no dispute that the district court made the findings nunc pro
tunc. Here, the record demonstrates that the ends-of-justice findings were based
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on, among other reasons, the post-trial jury conduct investigation, the forfeiture
motions, the unavailability of the trial transcripts, and Spaniers request for the
second continuance in order to have more time to prepare after he returned from
his vacation.
These facts were discussed at each of the hearings when the
continuances were granted.

Jordan also does not support Spaniers argument. In Jordan, the district
court entered an open ended exclusion order at the beginning of the case based
upon complexity.
915 F.2d at 564-565.
The court also set an indefinite
continuance of the trial date. Id. However, after that general exclusion order was
entered, the case was severed based upon the fact that the severance would
simplify the trial. Id. This Court noted that the district court never addressed the
effects of this intervening factor on its original complexity finding.
Id.
Furthermore, when the district court denied the defendants speedy trial motion, it
did not set forth any findings and instead relied on the original order. Id.
Here, unlike Jordan, there were no intervening circumstances which changed
the original complexity finding. Indeed, the post-trial issues raised at the June 10,
2013 hearing, and other facts cited by the district court in its order, demonstrate
that the case became more complex. Furthermore, unlike Jordan, the district court
set specific time limits on the order. Most importantly, the district court here,
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unlike Jordan, set forth detailed findings on the record when it ruled on Spaniers
Speedy Trial motion, and did not simply refer to the prior complexity designation.
Clymer is also not applicable here. In Clymer, this Court found that two
continuances granted by the district court did not satisfy the requirements for an
ends of justice exclusion.
Clymer, 25 F.3d at 828.
The first objectionable
continuance was open ended and did not specify the period of time for the
exclusion. Id.
Here, the district courts order sets a specific period of time from
the date of the mistrial to the date now set for trial. [ER 93.] The district court
here also noted in it is order that the time period amounted to 190 days. [ER 91.]
The second objectionable continuance in Clymer occurred nine months after
the trial was over. Id. Similar to Frey, the record in in Clymer demonstrated that
the post-trial complexity finding was undertaken for the first time subsequent to
the original grant of a continuance. Id. Here, however, the district court, in its
mind, made these findings based on the facts before the district court at the time,
but waited to make the record until he ruled on the Speedy Trial motion.
This Court in Bryant upheld the same procedure as the district court
followed here. Bryant is still good law and is cited by this Court in Frey, Jordan,
and Clymer. Furthermore, the procedure upheld in Bryant complies with the
Supreme Courts decision in Zedner which acknowledges that a district court may
wait to place its ends-of-justice findings on the record until it decides the speedy
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trial motion. While it would have been preferable for the district court to announce
its findings at the time the continuances were granted, it did not commit reversible
error.
Finally, Spanier argues that this case is similar to the Fourth Circuit case
United States v. Henry, 538 F.3d 300 (4th Cir. 2008). Henry is also not applicable
here. In Henry, the district court granted a continuance at an earlier status
conference hearing but waited to place its findings on the record until it ruled on
the defendants Speedy Trial motion. Henry, 538 F.3d at 304. When the district
court did place its findings on the record, the stated reason for the continuance at
the time was that counsel needed time to prepare. Id. However, the transcript of
the earlier status hearing established that the district court granted the continuance
because it relied on speedy trial waivers by the defendant which, post-Zedner, were
no longer valid. Id. Thus, similar to Frey and Clymer, the record demonstrated
that the justification for the continuance was not based upon facts before the
district court at the time it granted the continuance. Here, however, the transcripts
of the relevant hearings support all of the findings made by the district court in its
December 5, 2013 exclusion order.
For all these reasons, the speedy trial clock was tolled between May 31,
2013 and December 10, 2013, and the Speedy Trial Act was not violated.
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5.
Assuming Error Is Found, Any Dismissal of the Superseding

Indictment Should Be Without Prejudice
In deciding whether this case should be dismissed with prejudice, this Court
considers the following three factors: (1) the seriousness of the offense, (2) the
facts and circumstances of the case which led to the dismissal, and (3) the impact
of a reprosecution on the administration of [the Speedy Trial Act] and on the
administration of justice. Clymer, 255 F.3d at 831. Here, none of these three
factors weigh in favor of dismissal with prejudice. First, Spanier was convicted by
a jury for engaging in a complex securities fraud scheme involving the sale of
publicly traded stock in multiple public companies.
The losses in this case
involved millions of dollars. Spanier suggests that because some of the victims
may have been able to absorb the losses, that makes the case less serious.
However, Spanier fails to mention the impact on the market and to the public when
the stock was sold. [SER 1027-1029.] Furthermore, he fails to acknowledge that
some of the victims testified that the illegal sale of their stock affected their
retirement and caused economic hardship. [SER 707, 717, 733.] The illegal sale
of publicly traded stock involving millions of dollars is a serious crime which
weighs against dismissal with prejudice.
Second, Spanier contends that the district courts conduct weighs in favor of
dismissal with prejudice. However, in this case, the district court acted properly.
The original indictment was returned on March 13, 2012.
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commenced within 14 months even though Spaniers counsel insisted that he

needed more time to prepare due to the complexity of the case. After the mistrial
was declared, Spaniers counsel wanted to wait to set the retrial until he learned of
the jury divide.
In the interim, an investigation was conducted to determine
whether there was inappropriate contact between a juror and Spaniers investigator.
That investigation put the entire case in flux.
The district court held a hearing on June 10, 2013 to set the trial date. When
asked when he wanted to retry the case, Spaniers counsel stated that he was
unavailable until after October 4. The district court set an October 8, 2013 trial.
It also set a briefing schedule for the month of July to insure that the juror conduct
issue was resolved before the October 8 trial date. Given all of these facts, the
district court acted appropriately when it set a trial date after the conclusion of the
briefing on the juror conduct issue.
The record demonstrates that from the beginning of the case to the retrial,
the district court was diligent about setting dates and keeping the case moving
forward. This case does not present the same length of delay issue that this Court
was concerned about in Clymer.13 Indeed, even Spaniers counsel commented to
the district court that [b]oth you, your honor, and Judge Burns are known for
Spanier argues that the delay in Clymer was five months. However, the
delay was 522 days. See Clymer at 824.
13
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having an expedited and an aggressive trial calendar . . . [i]ts admirable to want to

move cases along as well as possible. [SER 93-94.]
This is not a case where the district court simply delayed setting the trial.
Each continuance was justified and based upon facts indicating that Spaniers
counsel legitimately needed more time to prepare. Furthermore, Spanier has failed
to demonstrate any prejudice from the delay since he has remained free on bond
throughout both trials and on appeal.
Spanier argues that he was prejudiced by allowing the government to secure
Bello as a witness. However, the record demonstrates that Manny Bello was
identified as a witness in the first trial, and that Spanier was provided with
discovery well in advance of the second trial to enable him to properly prepare his
cross-examination of this witness without the need for a mid-trial recess.
Furthermore, Manny Bello was one of many percipient witnesses in the case.
Spanier fails to identify how the testimony of this one witness prejudiced him. In
fact, in closing, Spanier argued that Bello wouldnt even say that he conspired
with Mr. Spanier or Mr. Spanier did anything wrong. [SER 1492.]
Spanier suggests that this case is similar to United States v. Hall, 181 F.3d
1057 (9th Cir. 1999). However, Hall is not applicable here. In Hall, the district
court granted ends-of-justice continuances to Halls co-defendant in order to allow
him to negotiate a plea agreement with the United States, which included testifying
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against Hall. Id. at 1060-1064. 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 1059-1060. This Court noted that the district court was on
notice that Hall wished to assert his Speedy Trial rights. Id. at 1063. This Court
further noted that the district court should have severed Halls trial rather than
delaying the trial so that his co-defendant could continue her plea negotiations. Id.
Here, Manny Bello was not a co-defendant who carried Spanier along. Spanier
never told the district court that he wished to assert his Speedy Trial rights. To the
contrary, he filed an acknowledgement that the October 8, 2013 date was
acceptable.
Third, neither Spaniers role in the conspiracy, or the fact that a civil lawsuit
is pending against him justify a dismissal with prejudice to serve the general
interest in the administration of justice. Spaniers reliance on this Courts decision
in Clymer to support dismissal with prejudice is misplaced. In Clymer, this Court
concluded that the fact that the Mr. Clymer had been detained for almost five years
showed that he has already paid a significant debt to society and that the
administration of justice would be ill-served by allowing another trial. Clymer,
25 F.3d at 833. Here, unlike Clymer, Spanier was not detained, and has remained
free on bond.
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Relying on Lloyd, 125 F.3d 1263 and United States v. Hernandez-Meza,

720 F.3d 760 (9th Cir. 2013), Spanier argues that, if this court elects to remand to
the district court, it should reassign the case to a different district court judge.
Neither of these cases support remand to a different judge for retrial. First, in
Hernandez-Meza, this Court noted that that the Speedy Trial violation was
questionable but did not rest its decision to remand solely on the Speedy Trial
violation. Second, in Lloyd, this Court remanded to a different district court judge
solely for the purpose of making the remedy determination, and that, if any other
proceedings occur, they may be handled by the district judge who handled the first
two trials. Lloyd, 125 F.3d at 1272. In this case, any reassignment should be
conducted similar to Lloyd.
B.
THE DISTRICT COURT PROPERLY INSTRUCTED THE JURY

ON THE ELEMENTS OF CONSPIRACY, MAIL FRAUD, WIRE
FRAUD AND SECURITIES FRAUD
1.
Introduction
Spanier contends that, when instructing the jury, the district court erred by:
(1) not giving a fiduciary duty instruction; and (2) not properly instructing the jury
on the requisite scienter. These arguments lack merit. This case is not based upon
a pure omissions theory. The United States was not required to prove the
existence of a fiduciary duty. Furthermore, the Ninth Circuit Model Instructions
and this Courts decision in United States v. Tarallo, 380 F.3d 1174 (9th Cir. 2004)
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FILED
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
JAN 21 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT

Plaintiff - Appellee,
No. 14-50306
D.C. No. 3:12-cr-00918-BEN-3
v.
MEMORANDUM*
JEFFREY SPANIER,
Defendant - Appellant.
Appeal from the United States District Court

for the Southern District of California
Roger T. Benitez, District Judge, Presiding
Argued and Submitted October 22, 2015
Pasadena, California
Before: RAWLINSON and NGUYEN, Circuit Judges and PONSOR,** Senior
District Judge.
Appellant Jeffrey Spanier (Spanier) challenges the district courts denial of
his motion to dismiss. Spanier contends that the district court violated the Speedy
Trial Act.
*
This disposition is not appropriate for publication and is not precedent

except as provided by 9th Cir. R. 36-3.
**
The Honorable Michael A. Ponsor, Senior District Judge for the U.S.
District Court for Massachusetts, sitting by designation.
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In criminal cases where a mistrial has been declared, the Speedy Trial Act
contemplates that the [new] trial shall commence within seventy days from the
date that the action occasioning the retrial becomes final. . . . 18 U.S.C.
3161(e). It is undisputed that the speedy trial clock began running on May 31,
2013, when the district court declared a mistrial. See United States v. Pitner, 307
F.3d 1178, 1182 n.3 (9th Cir. 2002). There is also no dispute that the district court
set Spaniers retrial date for more than 70 days after the mistrial. The question
before this Court is whether the district court erroneously set the retrial date
outside the 70-day period, or instead properly granted several ends of justice
continuances due to the complexity of the case, thereby tolling the speedy trial
clock. 18 U.S.C. 3161(h)(7). A review of the contemporaneous record reveals
that, at the time continuances were granted, the district court did not make the
requisite findings that the ends of justice served by taking such action outweigh
the best interest of the public and the defendant in a speedy trial. 18 U.S.C.
3161(h)(7)(A).
The Speedy Trial Act is not crystal clear on when a district court must place
its findings on the record. We have held that it is permissible for a court to grant
ends of justice continuances for case complexity and subsequently set forth
sufficient facts to support its finding. See United States v. Bryant, 726 F.2d 510,
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511 (9th Cir. 1984). However, it is impermissible for a district court to set a trial
date outside the prescribed speedy trial period and subsequently perform the
requisite balancing test for the first time. See United States v. Frey, 735 F.2d 350,
351-53 (9th Cir. 1984). A district court err[s] by making nunc pro tunc findings
to accommodate its unwitting violation of the Act[,] and dismissal of an
indictment is required. See id. at 353. The district court in this case initially relied
on the government to set a retrial date in September, a date outside the 70-day
period. There was no discussion at that time or at any of the subsequent
proceedings about an ends of justice continuance.
The district courts explanation in denying Spaniers motion to dismiss, that
the continuances were granted due to case complexity was, unfortunately,
insufficient. See United States v. Jordan, 915 F.2d 563 (9th Cir. 1990) (rejecting
reliance on earlier ends of justice order). [E]nds of justice continuances must
be specifically limited in time and [contain] findings supported by the record to
justify each ends of justice continuance. Id. at 565.
Similarly, the courts proffered justification that the continuances were
granted due to counsels need for time to prepare is belied by the record. While the
need for extra time to prepare is an appropriate factor to consider, the court was
required to:
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conduct an appropriate inquiry to determine whether the

. . . parties actually want and need a continuance, how
long a delay is actually required, what adjustments can be
made with respect to the trial calendars or other plans of
counsel, and whether granting the requested continuance
would outweigh the best interest of the public and the
defendant in a speedy trial.
United States v. Lloyd, 125 F.3d 1263, 1269 (9th Cir. 1997) (citation, alteration,
and internal quotation marks omitted). The district court did not conduct an
inquiry as Lloyd requires. Rather, the court acknowledged that it assumed
Spaniers counsel needed time to prepare because he did not object to the delays.
Regrettably, the district courts practice in this case of retroactively characterizing
a continuance to justify a violation of the Speedy Trial Act was inconsistent with
the language and policy of the Act. Frey, 735 F.2d at 352.
Speedy Trial Act violations require dismissal of a defendants indictment.
See 18 U.S.C. 3162(a)(2). It is our normal practice to remand and allow the
presiding judge to determine whether the operative indictment should be dismissed
with prejudice. See Lloyd, 125 F.3d at 1271. However, reassignment in this case
is necessary to maintain the appearance of justice. Natl Council of La Raza v.
Cegavske, 800 F.3d 1032, 1045 (9th Cir. 2015). Given the district courts stated
views on this circuits Speedy Trial Act precedent, the appearance of fairness
warrants the exercise of independent judgment with respect to the selection of the
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remedy. . . . Lloyd, 125 F.3d at 1271. We therefore remand for the assignment of
a different judge solely to make the dismissal determination. Any further
proceedings may be handled by the district court judge who presided over the first
two trials. See id.
Although we grant relief on Spaniers Speedy Trial Act challenge, we reject
his challenge to the district courts jury instructions. The district court acted well
within its discretion in using the model jury instructions, and Spanier has cited no
persuasive authority holding otherwise. See United States v. Stapleton, 293 F.3d
1111, 1119 (9th Cir. 2002) (affirming mail and wire fraud conviction where
instructions substantially mirror[ed] the Ninth Circuit Manual of Model Jury
Instructions).
AFFIRMED IN PART; INDICTMENT DISMISSED, and CASE
REMANDED WITH INSTRUCTIONS TO REASSIGN FOR LIMITED
PURPOSE OF DETERMINING WHETHER DISMISSAL IS WITH OR
WITHOUT PREJUDICE.
Page 5 of 5
CERTIFICATE OF SERVICE
I hereby certify that I am over the age of eighteen and am not a party to this action.
On todays date, I filed a true and correct copy of the attached document through this
3 Courts Electronic Filing System (ECF), and the system indicated that the filing had been
received successfully. By virtue of the ECF system, the AUSA assigned to this case and
4 all interested parties were served electronically upon filing of this document.
2
I declare under penalty of perjury that the foregoing is true and correct, dated:
April 4, 2016.
s/ Timothy A. Scott
7
8
TIMOTHY A. SCOTT
Attorney at Law
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Case 3:12-cr-00918-JM Document 445 Filed 04/04/16 Page 1 of 1

Attorneys for Jeffrey Spanier

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

(HONORABLE JEFFREY T. MILLER)

UNITED STATES OF AMERICA,

Case No. 12-CR-00918-JM

attached, and all files and records in this case.

Dated: April 4, 2016

Case 3:12-cr-00918-JM Document 445-1 Filed 04/04/16 Page 1 of 13

Attorneys for Jeffrey Spanier

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

(HONORABLE JEFFREY T. MILLER)

UNITED STATES OF AMERICA,

Case No. 12-CR-00918-JM

Introduction and Issue Presented

prosecution on the administration of justice to determine whether the indictment should

should be dismissed with prejudice.

Case 3:12-cr-00918-JM Document 445-1 Filed 04/04/16 Page 2 of 13

Mr. Spaniers first trial ends in acquittals and a hung jury.

interested executives with Argyll in exchange for a percentage-based fee. Id.

Sadly, defendant Miceli committed suicide while on pretrial release.

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clock has expired.

parties need for additional time to prepare.

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earlier this year. However, it is sufficient to detail these previously made-but-not-

The government relies on the immunized witness to help secure convictions

against Mr. Spanier.

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The Ninth Circuit vacates Mr. Spaniers convictions and sentence.

dismissal of the indictment with prejudice.

support in the record. Id.

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this case of retroactively characterizing a continuance to justify a violation of the Speedy

should be dismissed with or without prejudice. This motion follows.

or without prejudice depends on a careful application of the statutorily enumerated

dismissal with prejudice.

facts of this white-collar case.

were rendered penniless by the defendants actions.

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contracts, defended lawsuits, negotiated settlements, renegotiated loan terms, forgave

the seriousness of the offense weighs in Mr. Spaniers favor here.

litigation positions throughoutoverwhelmingly favor dismissal with

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allowing government to secure a cooperating witness).

government defended the improper post-hoc rationalizations that defied longstanding

that he could do the retrial earlier. See Exhibit B at 241.

Further, the governments positions contributed to the case remaining on appeal

appeal can be basis for dismissal with prejudice).

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1. The district courts post-hoc reasoning in support of an ends-of- justice

government to retroactively implement an ends of justice continuance in violation of

most severe sanction is appropriate where the surrounding circumstances lead us to

or implement our long-standing precedents. Clymer, 25 F.3d at 832.

be appropriate in similar circumstancessee Clymer, supraand so it should be here.

2. The lead defendants have suffered devastating consequences while Mr.

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years, despite these significant restrictions on his life and liberty.