Case 3:18-cr-04683-GPC Document 341 Filed 03/10/22 PageID.4430 Page 1 of 6
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`RANDY S. GROSSMAN
`United States Attorney
`MELANIE K. PIERSON
`SABRINA L. FEVE
`Assistant U.S. Attorneys
`California Bar No. 112520/226590
`Office of the U.S. Attorney
`880 Front Street, Room 6293
`San Diego, CA 92101
`Tel: (619) 546-7976
`Fax: (619) 546-0631
`Email:Melanie.Pierson@usdoj.gov/Sabrina.Feve@usdoj.gov
`
`CANDINA S. HEATH
`Senior Counsel
`Texas Bar No. 09347450
`Computer Crime and Intellectual Property Section
`U.S. Department of Justice
`Washington, D.C. 20005
`Tel: (202) 307-1049
`Email: Candina.Heath2@usdoj.gov
`
`Attorneys for Plaintiff
`United States of America
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`UNITED STATES OF AMERICA,
`Case No.: 18cr4683-GPC
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`UNITED STATES’ SECOND
`
`Plaintiff,
`NOTICE OF EXPERT
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`WITNESSES AND WITNESSES
`v.
`
`WITH EXPERTISE
`
`JACOB BYCHAK (1),
`MARK MANOOGIAN (2),
`ABDUL MOHAMMED QAYYUM (3), and
`PETR PACAS (4),
`
`
`Defendants.
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`
`COMES NOW the plaintiff, United States of America, by and through its counsel,
`Randy S. Grossman, United States Attorney, and Assistant United States Attorneys
`Melanie K. Pierson, Sabrina L. Fève, and Computer Crime and Intellectual Property
`Section Senior Counsel Candy Heath, and hereby files its Second Notice of Expert
`Witnesses and Witnesses with Expertise.
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`Case 3:18-cr-04683-GPC Document 341 Filed 03/10/22 PageID.4431 Page 2 of 6
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`INTRODUCTION
`Pursuant to Rule 16(a)(1)(G) of the Federal Rules of Criminal Procedure and Federal
`Rules of Evidence 702, 703, and 705, the United States hereby provides notice of its intent
`to elicit the testimony during its case-in-chief of two forensic accounting expert witnesses:
`(1) David E. Benkert, and (2) Jeffrey H. Kinrich. Copies of their curricula vitarum were
`provided to the defense in discovery on March 2, 2022. A summary of Mr. Kinrich’s and
`Mr. Benkert’s backgrounds and proposed testimonies are set out below. The United States
`reserves the right to offer additional testimony by these experts, or other expert witnesses,
`pursuant to Federal Rules of Evidence 701 through 705, and for these experts to amend or
`adjust their opinions and bases therefor, based on information perceived by or made known
`to the experts before or during trial.
`This case concerns the “use of fraudulently acquired IP addresses to send
`commercial email messages” in furtherance of a conspiracy to violate the CAN-SPAM and
`wire fraud statutes. ECF No. 1 at para. 2(c). In particular, according to the Indictment’s
`CAN-SPAM counts, the IP addresses listed in Counts 6 through 10 of the Indictment were
`used to send more than 2,500 commercial email messages during any 24-hour period,
`25,000 during any 30-day period, or 250,000 during any one-year period. Id.at para. 9.
`As evidence of the conspiracy’s use of IP addresses and motive for doing so, the
`United States intends to offer the testimony of Mr. Kinrich and Mr. Benkert. In 2019, Mr.
`Kinrich and Mr. Benkert helped Company A calculate that it generated approximately $4.9
`million from the company’s use of IP addresses that defendants identified via co-
`conspirator Daniel Dye and his employer, GetAds (hereafter, the “GetAds IPs”).1 Mr.
`Kinrich and Mr. Benkert’s findings are documented in their report, which the government
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`1 The government has not retained either Mr. Kinrich or Mr. Benkert, and each witness will
`appear and testify pursuant to a trial subpoena. In January 2020, Mr. Kinrich and Mr.
`Benkert assisted Company A with a review that ultimately led to Company A forfeiting
`$4,939,526 to the government in May 2020 as fraudulent proceeds generated by sending
`over 10 billion electronic email messages from the GetAds IPs.
`2
`Government’s Second Notice of Experts and
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`Witnesses with Expertise (Benkert/Kinrich)
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`Case 3:18-cr-04683-GPC Document 341 Filed 03/10/22 PageID.4432 Page 3 of 6
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`produced to defendants, along with the materials upon which their report relied, on July 8,
`2020.
`The experts used their specialized knowledge to calculate the amount of revenue
`derived from the GetAds IPs. To do so, they segregated “external email” revenue from
`“internal email” revenue, because Company A only used the GetAds IPs for internal email
`campaigns.2 After calculating the percentage of internal email sent using the GetAds IPs,
`and multiplying that percentage against the relevant period’s internal email revenue, they
`concluded the proceeds were approximately $4.5-$5 million.
`Through Mr. Kinrich and Mr. Benkert’s testimony, the government will show that
`the GetAds IPs obtained by defendants were used to make millions of dollars sending
`billions of commercial email messages. This testimony is relevant and material to both the
`CAN-SPAM and wire fraud counts insofar as it will help show that the conspiracy arranged
`to send the requisite volume of commercial emails and provided a motive for the fraudulent
`scheme.
`A. David E. Benkert
`Overview of Relevant Background
`Mr. Benkert is a Senior Managing Director in Ankura Consulting’s Disputes and
`Economics practice. For over three decades, he has advised clients on financial, regulatory,
`and compliance oversight issues. These activities have included financial accounting
`investigations, expert witness testimony, damage calculations, disclosures, and financial
`performance reviews. Mr. Benkert has provided these services for organization
`management, boards of directors for public, non-public entities and not-for-profit
`organizations. Mr. Benkert has provided deposition, trial testimony, and presentations to
`Federal and State Regulators. Mr. Benkert is a Certified Public Accountant and certified in
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`2 As will likely be established through the testimony of past and present Company A
`employees, “external email” refers to commercial email sent by Company A affiliates and
`“internal email” refers to commercial email sent by Company A.
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`Government’s Second Notice of Experts and
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`Witnesses with Expertise (Benkert/Kinrich)
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`Case 3:18-cr-04683-GPC Document 341 Filed 03/10/22 PageID.4433 Page 4 of 6
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`Financial Forensics. Additional details are available in Mr. Benkert’s C.V., which has been
`produced in discovery.
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`Summary of Testimony
`Mr. Benkert, based on his specialized knowledge, will explain how he calculated the
`amount of Company A’s internal revenue pool, which was used to determine the revenue
`generated from use of the GetAds IPs. The government anticipates that Mr. Benkert will
`explain that he analyzed Company A financial statements, general ledger records, and
`records stored and managed using software called “Direct Track” and “CAKE” to establish
`the internal email revenue. The government anticipates that Mr. Benkert will explain that
`he identified the time frame during which Company A used the GetAds IPs to generate
`revenue and then estimated the internal email revenue generated during this time. In
`particular, the government anticipates that Mr. Benkert will testify that Company A used
`the GetAds IPs to generate revenue from June 2011 through March 2014.
`The government also anticipates that Mr. Benkert will testify that he determined the
`internal email revenue by subtracting external email revenue from the general ledger
`records, rather than calculating them directly, because Company A did not directly track
`internal email revenue throughout the relevant period. The government anticipates that Mr.
`Benkert will testify that, during the June 2011 through March 2014 period, Company A’s
`general ledger data showed total email revenue of $317,253,029, its affiliate tracking
`records showed total external email revenue of $219,710,703, and, through basic
`subtraction, the total internal email revenue for this period would have been $97,542,326.
`The government anticipates that Mr. Benkert will further testify that he was able to attribute
`the total internal email revenue figure of $97,542,236 to four specific time frames,
`specifically: $49,096,047 in June 2011 through February 2012; $33,418,691 in March 2012
`through December 2012; $12,895,297 in January 2013 through December 2013; and
`$2,132,291 in January 2014 through March 2014.
`//
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`Government’s Second Notice of Experts and
`Witnesses with Expertise (Benkert/Kinrich)
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`Case 3:18-cr-04683-GPC Document 341 Filed 03/10/22 PageID.4434 Page 5 of 6
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`B. Jeffrey H. Kinrich
`Overview of Relevant Background
`Mr. Kinrich has over four decades of consulting experience with business clients and
`individuals on engagements involving applications of financial and economic analysis,
`accounting, business valuation, and statistics. Mr. Kinrich specializes in damage
`quantification and valuation in the areas of commercial litigation and intellectual property.
`Mr. Kinrich has testified frequently on damages, valuation, and accounting issues in
`numerous state and federal courts. He is a Certified Public Accountant and holds an
`Accreditation in Business Valuation. Additional details are available in Mr. Kinrich’s C.V.,
`which has been produced in discovery.
`
`Summary of Testimony
`Mr. Kinrich’s testimony, based on his specialized knowledge, will explain how he
`calculated Company A’s estimated revenue from use of the GetAds IPs. The government
`anticipates that Mr. Kinrich will explain that he analyzed data from Company A’s monthly
`operational reports, which the company and its employees referred to as “BlackMail
`reports.” The BlackMail reports documented the volume of internal emails delivered by
`specific IP blocks from Company A’s mailing system.3 The government anticipates that
`Mr. Kinrich will explain that he used the BlackMail reports, in conjunction with the internal
`email revenue calculations, to estimate the revenue from the GetAds IPs.
` The government anticipates that Mr. Kinrich will testify that, prior to March 2012,
`there was either no BlackMail data or only incomplete data. The government anticipates
`that Mr. Kinrich will explain how he calculated the volume of internal email sent via the
`GetAds IPs during the June 2011 through February 2012 time frame without the BlackMail
`reports. The government anticipates that Mr. Kinrich will testify that, for the March 2012
`through March 2014 time frame, he calculated the volume of internal email sent via the
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`3 The government has previously produced to the defense the approximately 18,715
`BlackMail reports that it obtained via grand jury subpoena from Company A. As a
`courtesy, an electronic index with the bates numbers of these BlackMail reports will be
`provided to the defense along with this notice.
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`Government’s Second Notice of Experts and
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`Witnesses with Expertise (Benkert/Kinrich)
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`18cr4683-GPC
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`Case 3:18-cr-04683-GPC Document 341 Filed 03/10/22 PageID.4435 Page 6 of 6
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`GetAds IPs using the BlackMail reports data. The government anticipates that Mr. Kinrich
`will testify that he applied these volume calculations against the overall internal email
`revenue calculations to calculate the revenue generated through use of the GetAds IPs as
`follows:
`Internal Email Rev. GetAds IPs % Use GetAds Revenue4
`Time Period
`$49.096 million
`~3.3%
`~$1.620 million
`6/2011 – 2/2012
`$33.419 million
`~3.3%
`~$1.275 million
`3/2012 – 12/2012
`$12.985 million
`~11.7%
`~$1.514 million
`1/2013 – 12/2013
`$2.132 million
`~27.9%
`~$480,000
`1/2014 – 3/2014
`The government further anticipates that Mr. Kinrich will testify that Company A
`business records, including the BlackMail reports, show that Company A used the GetAds
`IPs to send over 1.3 billion commercial emails in January 2014, and over 493,000
`commercial emails in February 2014.
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`DATED: March 10, 2022
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`Respectfully submitted,
`
`RANDY S. GROSSMAN
`United States Attorney
`
`/s/Melanie K. Pierson
`Assistant United States Attorney
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`/s/Sabrina L. Fève
`Assistant United States Attorney
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`/s/Candy Heath
`Senior Counsel
`Computer Crime and Intellectual Property Section
`Department of Justice, Criminal Division
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`4 At trial, the government anticipates that Mr. Kinrich’s testimony will describe the revenue
`and volume calculations as a range.
`Government’s Second Notice of Experts and
`Witnesses with Expertise (Benkert/Kinrich)
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`18cr4683-GPC
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