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`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 1 of 7
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`
`
`GLENN B. McCORMICK
`Acting United States Attorney
`District of Arizona
`
`KEVIN M. RAPP (Ariz. Bar No. 014249, kevin.rapp@usdoj.gov)
`MARGARET PERLMETER (Ariz. Bar No. 024805, margaret.perlmeter@usdoj.gov)
`PETER S. KOZINETS (Ariz. Bar No. 019856, peter.kozinets@usdoj.gov)
`ANDREW C. STONE (Ariz. Bar No. 026543, andrew.stone@usdoj.gov)
`Assistant U.S. Attorneys
`40 N. Central Avenue, Suite 1800
`Phoenix, Arizona 85004-4408
`Telephone (602) 514-7500
`
`DAN G. BOYLE (N.Y. Bar No. 5216825, daniel.boyle2@usdoj.gov)
`Special Assistant U.S. Attorney
`312 N. Spring Street, Suite 1400
`Los Angeles, CA 90012
`Telephone (213) 894-2426
`
`KENNETH POLITE
`Assistant Attorney General
`Criminal Division, U.S. Department of Justice
`
`REGINALD E. JONES (Miss. Bar No. 102806, reginald.jones4@usdoj.gov)
`Senior Trial Attorney, U.S. Department of Justice
`Child Exploitation and Obscenity Section
`950 Pennsylvania Ave N.W., Room 2116
`Washington, D.C. 20530
`Telephone (202) 616-2807
`Attorneys for Plaintiff
`
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF ARIZONA
`
`
`
`
`
`United States of America,
`
`
`
`Plaintiff,
`
`
`v.
`
`
`Michael Lacey, et al.,
`
`
`
`Defendants.
`
`No. CR-18-422-PHX-SMB
`
`
`UNITED STATES’ MOTION RE
`BANK RECORDS AND SUMMARY
`EXHIBITS
`
`The United States files this motion in accordance with Federal Rule of Evidence
`104 to provide further explanation with respect to (1) bank records and (2) summary
`exhibits, in light of the Court’s recent Order (Doc. 1212). First, the government seeks a
`ruling on the 902(11) certifications for the bank records to help avoid needlessly extending
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`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 2 of 7
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`the trial through a parade of custodian witnesses. See Fed. R. Evid. 104(a). Second, the
`United States attaches its proposed summary exhibits and provides a list of each trial
`exhibit that is being summarized. The Court delayed ruling on the admissibility of the
`summary exhibits until after the United States provided the exhibits for inspection; by
`doing so with this motion, the government is attempting to streamline trial and avoid
`delays.
`Admissibility of Bank Records
`I.
`The United States seeks a pretrial ruling on the authentication of the bank records
`that will be marked as exhibits in the upcoming trial. The Court recently ruled that “the
`bank records may be admissible as business records subject to other objections at trial.”
`(Doc. 1212 at 12.) The Court also noted that “Defendants do not challenge the
`certifications for the bank records. Accordingly, as long as the records are accompanied
`by a proper certification pursuant to Rule 902(11), they may be admitted under the rule.”
`(Id.) The United States files this motion to clarify that there won’t be any future challenges
`to the 902(11) certifications for the bank records and that Defendants’ objections at trial
`will be limited to “relevance and prejudice under Rule 403.” (Id.)
`On February 14, 2020, the United States filed a notice of intent to offer business
`records pursuant to Federal Rule of Evidence 902(11). (Doc. 889.) That notice attached a
`table that listed the 902(11) certifications identified by subpoena number, financial
`institution, Bates number, and BEGDOC, which is the number used to locate the document
`in Relativity. (Id.; see also Doc. 889-A.) On September 11, 2020, the government filed a
`supplemental notice that included two additional 902(11) certifications. (Doc. 1057.) Rule
`902(11) provides that “[b]efore the trial or hearing, the proponent must give an adverse
`party reasonable written notice of the intent to offer the record—and must make the record
`and certification available for inspection—so that the party has a fair opportunity to
`challenge them.” The United States has complied with this rule.
`Defendants have now had over 18 months to challenge the government’s 902(11)
`certifications. They have not done so. (See Doc. 1139 at 18-19) (objecting to the admission
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`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 3 of 7
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`of bank records based only on potential relevance issues.) Because Defendants have not
`yet articulated any objection to the 902(11) certifications, they should be precluded from
`doing so at trial. If Defendants are permitted to raise challenges related to the
`authentication of the bank records at trial, then the proceedings may be delayed as the Court
`reviews the relevant certification(s). If the objection is sustained, then the government
`would need to identify and call a custodian of records to the witness stand. The applicable
`custodian may live in another state. This process will certainly cause an unnecessary delay
`for an already lengthy trial. If Defendants had specific objections to the 902(11)
`certifications listed in the government’s filings (Docs. 889 & 1057), they should have
`raised those challenges during the last 18 months. See Fed. R. Evid. 902(11), Advisory
`Committee Notes to 2000 Amendments (“The notice requirement in Rule 902(11) and (12)
`is intended to give the opponent of the evidence a full opportunity to test the adequacy of
`the foundation set forth in the declaration.”). The government would be prejudiced by
`Defendants waiting until trial before raising any such challenges. The Court should rule
`that the bank records have been authenticated under Rule 902(11) and are not excluded by
`the rule against hearsay in accordance with Rule 803(6).1
`
`
`
`
`1 See, e.g., United States v. Davis, 2021 WL 1931871, at *2-3 (D. Alaska May 13,
`2021) (granting pretrial motion finding 902(11) certifications properly authenticated
`certain business records); United States v. Way, 2018 WL 2470944, at *2 (E.D. Cal. June
`1, 2018) (granting government’s motion for pretrial authentication of business records
`under Rule 902(11) and finding that the records “have been properly authenticated and
`[]qualify for admission under the exception to the rule against hearsay set forth in FRE
`803(6)”); United States v. Taylor, 2017 WL 11458484, at *1 (D. Ariz. Nov. 2, 2017)
`(finding a business record supported by a 902(11) certification was “admissible, self-
`authenticating, non-hearsay evidence” because “a certification under Rule 902(11)
`provides sufficient foundation for the admissibility of business records”); United States v.
`Kuzmenko, 2014 WL 1334003, at *3 (E.D. Cal. April 3, 2014) (“Provided that, in the
`discovery given to Defendant, each FRE 902(11) certification is immediately followed by
`the corresponding bank, loan, and escrow files, the records are self-authenticating under
`FRE 902(11) and the Government need not call a custodian-witness to lay foundation for
`this evidence.”); United States v. Gardley, 2013 WL 4857691, at *1-2 (D. Nev. Sept. 10,
`2013) (“[T]he Court interprets the Government’s motion as merely a preliminary motion
`to determine if a custodian of records must be subpoenaed to authenticate each document.
`. . . [T]he Court hereby finds [exhibits] admissible as business records, are authentic, and
`are not barred by the hearsay rule pursuant to Rules 803(6) and 902(11).”).
`
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`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 4 of 7
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`II.
`
`The United States’ Summary Exhibits
`The Court articulated its reasons for not yet admitting the government’s summary
`exhibits in its recent order.
`[T]he government has clearly not met its burden to admit its summary
`exhibits under Rule 1006. First, the Court has not been given an opportunity
`to inspect the exhibits which makes it difficult to see what they are, what they
`are summarizing, whether they properly summarize voluminous records, or
`whether they are merely argument regarding the evidence as Defendants
`contend. In addition, the government merely states in a conclusory manner
`that the records on which the summary exhibits are based are admissible
`without explaining with specificity what the records are. . . . Accordingly,
`the Court will not admit the summary exhibits at this time but will consider
`them again at trial if the government seeks their admission.
`(Doc. 1212 at 21.)
`
`
`In an effort to streamline trial and optimize the jury’s time, the United States
`provides the Court with the summary exhibits it intends to admit and the exhibits relied
`upon in creating the summaries.
`United States’ Summary Exhibits
`A.
`The United States anticipates introducing the following nine summary exhibits at
`
`trial:
`
`- Trial Ex. 1479 – Money Laundering Counts Tracing, attached as Ex. A.
`- Trial Ex. 1480 – Backpage Gross Revenue by Ad Category, attached as Ex. B.
`- Trial Ex. 1481 – Annual Revenue for Business Entities, attached as Ex. C.
`- Trial Ex. 1545 – Website Technologies LLC Revenue Through GoCoin,
`attached as Ex. D.
`- Trial Ex. 1689 – Payments from Camarillo Holdings to Spear, attached as Ex.
`E.
`- Trial Ex. 1690 – Payments from Cereus Properties to Spear, attached as Ex. F.
`- Trial Ex. 1691 – Payments from Website Tech to Cereus Properties, attached as
`Ex. G.
`
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`Trial Ex. 1479 – Money
`Laundering Counts
`Tracing, attached as Ex.
`A
`Trial Ex. 1480 –
`Backpage Gross
`Revenue by Ad
`Category, attached as
`Ex. B
`Trial Ex. 1481 – Annual
`Revenue for Business
`Entities, attached as Ex.
`C
`
`Trial Ex. 1545 –
`Website Technologies
`LLC Revenue Through
`GoCoin, attached as Ex.
`D
`Trial Ex. 1689 –
`Payments from
`Camarillo Holdings to
`Spear, attached as Ex. E
`
`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 5 of 7
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`
`
`- Trial Ex. 1693 – Payments from Cereus Properties to Michael Lacey –
`1/11/2016-1/4/2017, attached as Ex. H.
`- Trial Ex. 1694 – Payments from Cereus Properties to James Larkin and Family
`– 1/11/2016-1/11/2017, attached as Ex. I.
`List of the Underlying Exhibits for the Summaries
`B.
`Here is a table that identifies the underlying exhibits that are summarized by each
`of the summary exhibits and why the underlying exhibits are admissible.
`
`Summary Exhibits
`
`Exhibits Relied Upon for
`Summary
`Bank records listed in Doc. 889-
`A (Trial Exs. 1248-1431)
`
`Reason for
`Admissibility
`902(11) Certifications
`(Trial Ex. 1247 & Doc.
`889-A)
`
`Backpage Ad Revenue
`Spreadsheet (Trial Ex. 1482,
`DOJ-BP-0002724567)
`
`Certified IRS Income Tax
`Returns (2012-2015) for John E.
`Brunst; Michael Lacey; James
`Larkin; Medalist Holdings; Scott
`Spear (Trial Exs. 1432-1460)
`
`Revenue Documents from Carl
`Ferrer (Trial Exs. 1461-1468)
`Spreadsheets produced by
`GoCoin (Trial Exs. 1532-1544)
`
`Bank records from National Bank
`of Arizona (Trial Ex. 1321)
`
`902(11) Certification
`from Carl Ferrer
`(USAO-BP-0033766-
`USAO-BP-0033767),
`attached as Ex. J
`Certified IRS income
`tax returns are self-
`authenticating
`
`
`
`902(11) Certification
`from Carl Ferrer, Ex. J.
`Spreadsheets produced
`by Go Coin (Trial Ex.
`1268) with a 902(11)
`Certification (Trial Ex.
`1247 & Doc. 889-A)
`902(11) Certification
`(Trial Ex. 1247 & Doc.
`889-A)
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`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 6 of 7
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`
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`Summary Exhibits
`
`Exhibits Relied Upon for
`Summary
`Bank records from National Bank
`of Arizona (Trial Ex. 1321)
`
`Reason for
`Admissibility
`902(11) Certification
`(Trial Ex. 1247 & Doc.
`889-A)
`
`Bank records from Branch
`Banking and Trust Co (Trial Ex.
`1313)
`
`902(11) Certification
`(Trial Ex. 1247 & Doc.
`889-A)
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`Bank records from Arizona Bank
`of Trust (Trial Ex. 1248)
`
`902(11) Certification
`(Trial Ex. 1247 & Doc.
`889-A)
`
`Bank records from Arizona Bank
`of Trust (Trial Ex. 1248)
`
`902(11) Certification
`(Trial Ex. 1247 & Doc.
`889-A)
`
`Trial Ex. 1690 –
`Payments from Cereus
`Properties to Spear,
`attached as Ex. F
`Trial Ex. 1691 –
`Payments from Website
`Tech to Cereus
`Properties, attached as
`Ex. G
`Trial Ex. 1693 –
`Payments from Cereus
`Properties to Michael
`Lacey – 1/11/2016-
`1/4/2017, attached as
`Ex. H
`Trial Ex. 1694 –
`Payments from Cereus
`Properties to James
`Larkin and Family –
`1/11/2016-1/11/2017,
`attached as Ex. I
`
`The Underlying Exhibits Are Admissible
`C.
`The United States has prepared these nine summary exhibits to assist in proving the
`content of over 165,000 pages of financial records. (See Jan. 13, 2020 Letter from R. Jones,
`attached as Ex. K.) The United States does not presently anticipate introducing the
`underlying bank records as trial exhibits. Rather, the government plans to introduce these
`summary exhibits in accordance with Rule 1006 to “prove the content of voluminous
`writings . . . that cannot be conveniently examined in court.” Fed. R. Evid. 1006. The
`Court has articulated the standard for a party to admit summary exhibits: “A proponent of
`a summary exhibit must establish a foundation that (1) the underlying materials on which
`the summary exhibit is based are admissible into evidence, and (2) those underlying
`materials were made available to the opposing party for inspection.” (Doc. 1212 at 23)
`(citations omitted.)
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`Case 2:18-cr-00422-SMB Document 1223 Filed 08/19/21 Page 7 of 7
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`The chart above demonstrates that both elements for admitting summary exhibits
`have been satisfied. All the underlying documents are “admissible,” and all the materials
`were produced to Defendants.
`Summary Exhibits Should Be Admitted
`D.
`Based on the foregoing, the nine summary exhibits the government intends to
`introduce at trial should be admitted.
`Respectfully submitted this 19th day of August, 2021.
`
`GLENN B. McCORMICK
`Acting United States Attorney
`District of Arizona
`
`s/ Andrew C. Stone
`KEVIN M. RAPP
`MARGARET PERLMETER
`PETER S. KOZINETS
`ANDREW C. STONE
`Assistant U.S. Attorneys
`
`DAN G. BOYLE
`Special Assistant U.S. Attorney
`KENNETH POLITE
`Assistant Attorney General
`U.S. Department of Justice
`Criminal Division, U.S. Department of Justice
`REGINALD E. JONES
`Senior Trial Attorney
`U.S. Department of Justice, Criminal Division
`Child Exploitation and Obscenity Section
`
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`CERTIFICATE OF SERVICE
`I hereby certify that on this same date, I electronically transmitted the attached
`
`document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a
`Notice of Electronic Filing to the CM/ECF registrants who have entered their appearance
`as counsel of record.
`
`s/ Marjorie Dieckman
`U.S. Attorney’s Office
`
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