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Peregrine Trial - January - Grimes & Warwick

Peregrine Trial – January

Comments by Bob Grimes and Dana Grimes

January 8, 2008

GOVERNMENT WITNESS LIST FOR HEARING ON JANUARY 14, 2008, REGARDING BLOG-READING WITNESSES

The defense has argued that any witness who has read this blog unknowingly violated the Court’s sequestration order which prohibited witnesses, other than the Government’s case agents and defendant’s families, from being present in the courtroom. The defense has moved to preclude those witnesses from testifying at the retrial. At the hearing on January 14, each witness will be examined regarding this blog, and the Court will determine if the witness will be allowed to testify at the second trial, which will begin January 29, 2008. The witnesses who will be present in court to testify on January 14 are:

Kelly Abbott
Ross Baldwin
John Benjamin
Brenda Cone-Gebbler
Mark Douglas
Michael Garcia
Matthew Gless
Inez Luna
Bill Moore
Leslie Romines
Steve Spitzer
Nancy Sanquist
Steve Trubiano
Peter Valentine
Pradeep Vancheeswaran

AUSA’s Eric Beste and Bill Narus filed a motion to allow certain non-local witnesses to testify at the January 14 hearing telephonically. The defense concurs as to four witnesses:

Gary Barton
Andrew Cotton
Alexander Johns
Brian Wycliff

The Government further requests that Mary Lou O’Keefe and Scott Vick be examined telephonically, or immediately prior to their testimony. The Government points out that O’Keefe testified at length at the first trial, and that she read the blog only after her testimony, which should not be considered a violation of the sequestration order. Vick also testified at length at the first trial regarding conversations that he had with Defendant Patrick Towle, and this topic would not be affected by anything that Vick may have read on this blog.

There has been a small change in the procedure for selecting the jury for the retrial. Originally, a jury panel was going to report to Judge Whelan’s courtroom on January 28 to fill out a jury questionnaire. Instead, the questionnaire will be provided to panel members beforehand, and the jury panel will report to Judge Whelan’s courtroom for voir dire by the court and the lawyers on January 29.

SEVERANCE MOTION BY DEFENDANT RICHARD NELSON

Nelson’s attorney, Bob Brewer, has filed a motion to be heard by Judge Whelan on January 28, 2008. Richard Nelson and Jeremy Crook and Eric Deller will be tried after the retrial of Gary Lenz, Patrick Towle, and Dan Stulac. The trial date has not yet been set, but Nelson is requesting that he be given a different trial date from Crook and Deller.

Lenz, Towle, and Stulac were named in the original indictment of October 2004. Nelson was not named as a defendant until the second superseding indictment in July 2006, and Deller was not named until the April 2007 third superseding indictment.

Bob Brewer argues that Nelson, a former legal officer of Peregrine, should not be tried along with defendants involved in sales or accounting. The majority of the counts in the third superseding indictment have nothing to do with Nelson, and his concern is that Nelson could be prejudiced in the eyes of the jury by the sheer weight of the evidence brought in to establish unrelated allegations against other defendants. He states that it is difficult to evaluate the mountain of so-called evidence produced by the Government, because the Government’s vague and ever changing case strategy. Brewer points out that the Government has cautioned that the retrial of Lenz, Towle and Stulac will look very different from their first trial, and says that the Government case against Nelson is even more nebulous.

January 14, 2008

MOTION HEARING

AUSA Eric Beste and Bill Narus appeared for the Government. Attorney Ken Miller, Tom Bienert’s partner, appeared with Gary Lenz. Kate Leff appeared with Patrick Towle, and Mike Attanasio and Aaron Arnzen appeared for Dan Stulac, who was not personally present.

The defense withdrew its motions to exclude testimony of the witnesses who read the Grimes & Warwick blog, which had been scheduled for today. The reason that these motions were withdrawn, and other remaining motions are trailed until the trial date, is the parties are engaged in very serious plea negotiations.

Gary Lenz apparently has reached a plea agreement with the Government, and will return on January 15, 2008 at 2:00 p.m., for a change of plea. Attorneys for Dan Stulac and Patrick Towle are also engaged in discussions with the Government regarding a possible resolution of the case for their clients.

The trial date is still set for January 29, 2008 at 9:00 a.m. AUSA Beste told Judge Whelan that the parties were trying to resolve the case prior to trial, and asked if they could contact the court’s clerk to calendar further hearings before trial. Judge Whelan responded “Try to do it before January 29.”

January 15, 2008

Gary Lenz, represented by his attorney Thomas Bienert, pled guilty to making a false statement to a federal officer. Mr. Lenz admitted that on July 23, 2004, he intentionally misstated his knowledge involving improperly booked sales at Peregrine during an FBI interview.

Judge Whelan accepted Gary Lenz’ guilty plea and noted that the maximum sentence is five years in custody with a maximum fine of $250,000 and a term of supervised release of at least two years, but not more than three (supervised release is essentially probation).

Because Lenz pled guilty to making a false statement (this is what Martha Stewart and Scooter Libby were convicted of) instead of the more serious charges in the indictment, he will receive a much lower sentence than would have been imposed had he been convicted at trial. Both sides have made concessions in this plea agreement. To avoid the costs and risk of going to trial again, Lenz has pled guilty to a felony charge. On the other hand, in agreeing to this lesser charge, the Government has acknowledged that a majority of the jurors who heard the first trial voted to acquit Lenz. Equally important is the fact that the Government has already obtained guilty pleas from 11 defendants in this case, including the ring leaders of the fraud at Peregrine.

Judge Whelan set Gary Lenz’ sentencing date on April 8, 2008 at 9:00 a.m.

Dan Stulac and Patrick Towle still are scheduled for trial on January 29, and it is not yet known if their lawyers will be able to reach agreements on plea bargains for them prior to trial.

Defendants Nelson, Crook, and Deller are scheduled for a status hearing on January 28, 2008. If their cases are not resolved by plea bargains, they will be given a trial date.