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EXHIBIT 1

By Aram Roston

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The Man Who Conned the Pentagon


Playboy Magazine

Jan./Feb. 2010

By Aram Roston

The weeks before Christmas brought no hint of terror. But by the afternoon of December 21, 2003,
police stood guard in heavy assault gear on the streets of Manhattan. Fighter jets patrolled the skies.
When a gift box was left on Fifth Avenue, it was labeled a suspicious package and 5,000 people in the
Metropolitan Museum of Art were herded into the cold.
It was Code Orange. Americans first heard of it at a Sunday press conference in Washington, D.C.
Weekend assignment editors sent their crews up Nebraska Avenue to the new Homeland Security
offices, where DHS secretary Tom Ridge announced the terror alert. Theres continued discussion,
he told reporters, these are from credible sourcesabout near-term attacks that could either rival or
exceed what we experienced on September 11. The New York Times reported that intelligence
sources warned about some unspecified but spectacular attack.
The financial markets trembled. By Tuesday the panic had ratcheted up as the Associated Press
reported threats to power plants, dams and even oil facilities in Alaska. The feds forced the
cancellation of dozens of French, British and Mexican commercial flights of interest and pushed
foreign governments to put armed air marshals on certain flights. Air France flight 68 was canceled,
as was Air France flight 70. By Christmas the headline in the Los Angeles Times was "Six Flights
Canceled as Signs of Terror Plot Point to L.A." Journalists speculated over the basis for these terror
alerts. Credible sources, Ridge said. Intelligence chatter, said CNN.
But there were no real intercepts, no new informants, no increase in chatter. And the suspicious
package turned out to contain a stuffed snowman. This was, instead, the beginning of a bizarre scam.
Behind that terror alert, and a string of contracts and intrigue that continues to this date, there is one
unlikely character.
The mans name is Dennis Montgomery, a self-proclaimed scientist who said he could predict
terrorist attacks. Operating with a small software development company, he apparently convinced the
Bush White House, the CIA, the Air Force and other agencies that Al Jazeerathe Qatari-owned TV
networkwas unwittingly transmitting target data to Al Qaeda sleepers.
An unusual team arrived in Reno, Nevada in 2003 from the Central Intelligence Agency. They drove
up Trademark Drive, well south of the casinos, past new desert warehouses. Then they turned into an
almost empty parking lot, where a sign read "eTreppid Technologies." It was an attractively designed
building of stone tile and mirrored windows that had once been a sprinklerhead factory.
ETreppid Technologies was a four-year-old firm trying to find its way. Some of its employees had
been hired to design video games. One game under construction was Roadhouse, based on the 1989
movie in which Patrick Swayze plays a bouncer in a dive bar. Other programmers worked on
streaming video for security cameras.

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He drove a $70,000 Porsche Cayenne GTS, and his home was near the gambling
tables at the Agua Caliente Casino, where he lost $422,000 in one day.

When the liaison team stepped into eTreppids office, the CIA man in charge introduced himself as
Sid but didnt give his last name. He was tall and in his 50s, with a well-ironed shirt, a paunch and a
mildly robotic politeness. We called him Sid Vicious, one eTreppid technician explained, because
he was anything but.
Sids team set up on the first floor in an unused office and had special cipher locks installed. Workers
carted in a heavy-duty paper shredder that could transform classified documents to dust in seconds.
They set up impenetrable safes with combination locks protected by privacy screens so bystanders
couldnt steal the code.
The CIA team was there to work with Dennis Montgomery, at the time eTreppids chief technology
officer and part owner. Then 50 years old, with a full head of gray hair, the street-smart Montgomery
stood at about five feet eight inches. Other eTreppid workers, hearing the buzz about the spooks in
town, peered through their blinds and watched as Montgomery worked at his desk at the north end of
the building. He wore his usual jeans and Tommy Bahama shirt.
He could be seen handing off reams of paper to Sid and the CIA. They would sit in the room and
review these numbers or whatever the heck Dennis was printing out, one former eTreppid employee,
Sloan Venables, told me. We called them Sids guys, and no one knew what the hell they did.
Montgomery called the work he was doing noise filtering. He was churning out reams of data he
called output. It consisted of latitudes and longitudes and flight numbers. After it went to Sid, it went
to Washington, D.C. Then it found its way to the CIAs seventh floor, to Director George Tenet.
Eventually it ended up in the White House. Montgomerys output was to have an extraordinary effect.
Ridges announcement, the canceled flights and the holiday disruptions were all the results of
Montgomerys mysterious doings.
He is an unusual man. In court papers filed in Los Angeles, a former lawyer for Montgomery calls the
software designer a habitual liar engaged in fraud. Last June Montgomery was charged in Las
Vegas with bouncing nine checks (totaling $1 million) in September 2008 and was arrested on a
felony warrant in Rancho Mirage, California. That million is only a portion of what he lost to five
casinos in Nevada and California in just one year. Thats according to his federal bankruptcy filing,
where he reported personal debts of $12 million. The FBI has investigated him, and some of his own
co-workers say he staged phony demonstrations of military technology for the U.S. government.
Montgomery has no formal scientific education, but over the past six years he seems to have
convinced top people in the national security establishment that he had developed secret tools to save
the world from terror and had decoded Al Qaeda transmissions. But the communications Montgomery
said he was decrypting apparently didnt exist.
He claimed he provided Cheneys office with new output data on terror that would
validate his work. He said the data, which had been encrypted in Al Jazeera, were the
keys
that allowed investigators to crack the liquid-bomb plot in London.

Since 1996 the Al Jazeera news network had been operating in the nation of Qatar, a U.S. ally in the
war on terror. Montgomery claimed he had found something sinister disguised in Al Jazeeras
broadcast signal that had nothing to do with what was being said on the air: Hidden in the signal were
secret bar codes that told terrorists the terms of their next mission, laying out the latitudes and

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longitudes of targets, sometimes even flight numbers and dates. And he was the only man who had
the technology to decrypt this code.
As strange as his technology appeared to be, it was nevertheless an attractive concept. Montgomery
was as persuasive as some within the intelligence community were receptive. Al Jazeera was an
inspired target since its pan-Arabic mission had been viewed with suspicion by those who saw an
anti-American bias in the networks coverage. In 2004 Secretary of Defense Donald Rumsfeld
accused Al Jazeera of vicious, inaccurate and inexcusable reporting. Will Stebbins, Al Jazeeras
Washington bureau chief, told The Washington Post, There was clearly an attempt to delegitimize Al
Jazeera that came during a period of a lot of national hysteria and paranoia about the Arabic
world. (It is unfortunate, an Al Jazeera spokesperson told Playboy when asked for comment, that
a select few people continue to drag up these completely false conspiracy theories about Al Jazeera,
which were generated by the previous U.S. administration.) Over the years Montgomerys
intelligence found its way to the CIA, the Department of Homeland Security, Special Forces
Command, the Navy, the Air Force, the Senate Intelligence Committee and even to Vice President
Dick Cheneys office.
Back in 2003, just before the terror alert caused by Montgomerys technology, eTreppid held a
Christmas party in a ballroom at the Atlantis Casino in Reno. Employees gathered at round tables to
dine and drink. Even a CIA man showed up, a lanky fellow wearing a button-down shirt with an
oxford collar. By the end of the night, employees noticed Montgomery and eTreppid chief executive
Warren Trepp talking closely. A photo snapped by an employee shows Montgomery with his jacket
off and a Christmas ribbon wrapped around his head like a turban with a rose tucked into it. He was
hugging Trepp, who sobbed into his shoulder. The festivities were a rare break for Montgomery, who
had been busy churning out terrorist target coordinates for the CIA.On Sunday, January 4, 2004 a
British Airways flight out of Heathrow was delayed for hours for security reasons, and FBI agents
demanded that hotels in Vegas turn over their guest lists. It was also the day a top CIA official flew to
the eTreppid office in Reno. There, on eTreppid letterhead, the CIA official promised the companys
name would not be revealed and that the government would not unilaterally use or otherwise take
Montgomerys Al Jazeera technology.
Back in Washington, few insiders in government knew where the intelligence was coming from.
Aside from Tenet and a select few, no one was told about eTreppids Al Jazeera finds. Even veteran
intelligence operatives within the CIA could only wonder. These guys were trying to hide it like it
was some little treasure, one former counterterrorist official told me.
Director of National Intelligence John Negroponte weighed in. What secretswhat
embarrassmentscould be exposed if Montgomery and Trepp were to depose
intelligence and military officials?

The reason the whole thing worked was because Montgomerys CIA contact was with the agencys
Directorate of Science and Technology. Thats the whiz-bang branch of the intelligence service,
where employees make and break codes, design disguises and figure out the latest gadgets. S&T was
eventually ordered by CIA brass to reveal its source to small groups from other parts of the agency.
And when some experienced officers heard about it, they couldnt believe it. One former
counterterrorism official remembers the briefing: They found encoded location data for previous and
future threat locations on these Al Jazeera tapes, he says. It got so emotional. We were fucking
livid. I was told to shut up. I was saying, This is crazy. This is embarrassing. They claimed they
were breaking the code, getting latitude and longitude, and Al Qaeda operatives were decoding it.
They were coming up with airports and everything, and we were just saying, You know, this is

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horseshit! Another former officer, who has decades of experience, says, We were told that, like
magic, these guys were able to exploit this Al Jazeera stuff and come up with bar codes, and these bar
codes translated to numbers and letters that gave them target locations. I thought it was total bullshit.
The federal government was acting on the Al Jazeera claims without even understanding how
Montgomery found his coordinates. I said, Give us the algorithms that allowed you to come up with
this stuff. They wouldnt even do that, says the first officer. And I was screaming, You gave these
people fucking money?
Despite such skepticism, the information found its way to the top of the U.S. government. Frances
Townsend, a Homeland Security advisor to President George W. Bush, chaired daily meetings to
address the crisis. She now admits that the bar codes sounded far-fetched. And, she says, even though
it all proved to be false, they had no choice but to pursue the claim. It didnt seem beyond the realm
of possibility, she says. We were relying on technical people to tell us whether or not it was
feasible. I dont regret having acted on it. The feds, after all, had a responsibility to look into the
technology. There were lots of meetings going on during the time of this threat, says Townsend.
What were we going to do and how would we screen people? If we werent comfortable we
wouldnt let a flight take off. Eventually, though Montgomery continued to crank out his figures,
cooler heads prevailed. The threat was ultimately deemed not credible, as Townsend puts it.
A former CIA official went through the scenario with me and explained why sanity finally won out.
First, Montgomery never explained how he was finding and interpreting the bar codes. How could
one scientist find the codes when no one else could? More implausibly, the scheme required Al
Jazeeras complicity. At the very least, a technician at the network would have to inject the codes into
video broadcasts, and every terrorist operative would need some sort of decoding device. What would
be the advantage of this method of transmission?
A branch of the French intelligence services helped convince the Americans that the bar codes were
fake. The CIA and the French commissioned a technology company to locate or re-create codes in the
Al Jazeera transmission. They found definitively that what Montgomery claimed was there was not.
Quietly, as far as the CIA was concerned, the case was closed. The agency turned the matter over to
the counterintelligence side to see where it had gone wrong.
Born in Mena, Arkansas, Dennis Montgomery graduated in 1971 from Grossmont College near San
Diego with a two-year associates degree in medical technology. He worked a few years as a hospital
medical technician. And then, it appears, he shifted gears. He says he designed technology to analyze
blood gas and became a consultant to some of the biggest companies in America. He maintains he
invented and secured copyrights for various technologies related to pattern recognition, anomaly
detection and data compression. Montgomery had attained some success with his mediacompression software.
By the late 1990s Montgomery was in Reno, where he had a meeting at the El dorado Hotel Casino
downtown with a financier named Warren Trepp. Trepp had been head trader at Drexel Burnham
Lambert in the 1980s, when it was led by junk-bond fraudster Michael Milken. During that time
Trepp was a big spender, riding around in his white Rolls-Royce Corniche. He sat at Milkens right
hand and eventually earned $25 million a year. In a 1997 SEC decision, an administrative law judge
described Trepps violations as egregious, recurring and intentional. But the case against Trepp
was dismissed, and by the time he met Montgomery, he was legally in the clear.

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Venables says the entire backup for the multimillion-dollar eTreppid operation
consisted of three CDs and two hard drives. Venables looked at the disks and drives
and turned back to Trepp. In seven years, thats all? Three CDs and two hard
drives? I said, Dont you think thats weird?

Montgomery convinced Trepp he had invented a remarkable technology. He could compress data, he
said, a whole movie to just a fraction of the space it took up on a drive. He impressed his patron with
his demonstration, using software to highlight images from the 1939 film Gunga Din. It was enough
for them to launch their operation. Montgomery contributed his technological breakthrough, and
Trepp invested $1.3 million to start. Montgomery soon hired Sloan Venables, a video-game designer,
as one of his first employees. Venables had helped design the Ted Nugent Wild Hunting Adventure
video game. From the beginning, Venables realized things were odd and doubted Montgomery knew
much about software programming. One day at a Chinese restaurant at the same Eldorado Hotel
Casino, Montgomery told him about the time hed been abducted by a UFO. He told me about his
encounter with aliens, Venables says. He went to his uncles or grandfathers or great uncles barn
in the middle of the night, and a spaceship descended on him. They wanted him to go with them, and
he was abducted. Then he came back with extra knowledge. Venables started laughing at the story,
he says.
Montgomery was prone to temper tantrums, according to Venables. Once he hurled a steak at a
waitress. As volatile as he was at times, Venables says, he was at other times warm and confiding.
When Venables threatened to quit after Montgomery threw a can of grape soda at him, Montgomery
took Venabless dying mother to dinner. Every Friday he would take all his employees skeet and
trapshooting at a desert range.
Venables brought in a childhood friend to work at eTreppid. Jim Bauder, who was in his 20s, was
soon working on the video games eTreppid was trying to design. Bauder and Venables say
Montgomery ran the place, and they saw little of Trepp but were aware of his background. They also
say they saw Milken at eTreppid. I saw him come in once, and he had this entourage of five or six
people with him, says Bauder. They came walking down the hallway, and he looked at me and
smiled, introduced himself and then went on down the hall.
ETreppid landed its first big contract from General Electric in 2002 for use of its video compression
technology in gaming surveillance. The company eventually got a contract with the Air Force dealing
with aspects of video shot by unmanned Predator drones. Montgomery claimed his software could
automatically recognize weapons and faces. In 2004 the U.S. Special Operations Command gave
eTreppid a $30 million no-bid contract for compression and automatic target recognition.
Venables and Bauder acknowledge they cant be certain that no anomaly detection or pattern
recognition software existed, but they doubt it did. In fact, eTreppid workers later told the FBI they
thought Montgomery had developed little if any original software.
Montgomery and eTreppid did, over time, receive five patents for various inventions and theoretical
methods related to video and data. These included a method and apparatus for storing digital video
content provided from a plurality of cameras and a method and apparatus for detecting and reacting
to occurrence of an event. But Montgomery said these patents had nothing to do with his government
work, and they never seemed to lead to business or profit.
FBI reports indicate Montgomery rigged tests to make government officials think his software could
detect weapons in video streams. Apparently it was all part of Montgomerys claim to have developed
automatic target recognition software. Imagine how useful it would be if a computer could pick out

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AK-47s in enemy hands. Thats how eTreppid got at least one contract. One former employee told
agents he helped fake as many as 40 demonstrations.
Venables and Bauder say Montgomery had his own way of classifying items at the
company. He had rolls of 'classified' stickers, Bauder says, and he would just put
them on random garbage.

Bauder says he helped once, unwittingly. He told his story to the FBI, and he told it to me. In his
demonstrations Montgomery often used a plastic toy bazooka that he said a computer could recognize
as a weapon. He would do the demonstration in scrubland behind eTreppids offices. Some military
guys were walking around the office, says Bauder. Montgomery suddenly came to him, he says,
and takes me back to his office. He closes the door and closes the blinds and was like, Need you to
do something for me. Dont worry; we are just doing a demo. Its all good. Bauder was concerned
about the secrecy. I was like, But whats with the doors and blinds? Montgomery looked up at
Bauder and told him it was okay. They would communicate via an open cell phone line. He told
Bauder to listen to the phone. When you hear the tone, I want you to hit the space bar on the
keyboard. Bauder, in other words, would be secretly communicating with Montgomery while the
military guys watched the supposed software demo on another computer.
Montgomery ran off to do his demonstration outside. Bauder watched the computer screen, seeing
what the camera saw. Montgomery held the toy bazooka in one hand while his other hand was hidden.
When Bauder heard the tone, he says, I hit the space bar. A little square encircled his image through
the camera on the screen. He was running around with the fake plastic bazooka. Bauder figured
Montgomery had rigged the computer screen so it seemed as if the square was tracking the bazooka.
In reality, the square was brought up on the screen when Bauder hit the space bar.
ETreppid needed security clearances to get classified contracts. In 2004 Venables was selected as the
firms facilities security officer. He flew to Baltimore for Department of Defense training. It was an
arduous process, with the Defense Security Service probing everyones background.
Montgomery received an interim secret clearance in May 2003, according to records later released
in a federal case. In February 2004 he got a top-secret clearance from the Defense Industrial Security
Clearance Office. At eTreppid, Montgomery appears to have taken a curious approach to secrecy.
Venables and Bauder say Montgomery had his own way of classifying items at the company. He had
rolls of 'classified' stickers, Bauder says, and he would just put them on random garbage.
The CIA was an eTreppid customer, as was SOCOM and the Air Force. Soon the Navy started
coming by. Montgomery said he had another filter to identify underwater submarines by scanning a
giant satellite photo of the ocean. Although Montgomery claimed he was using his software, Bauder
and Venables say he appeared to be doing it by eye.
The pattern recognition, anomaly detection and compression work were nice, but it was the Al Jazeera
stuffthe noise filteringthat had cash potential. Even though the CIA had abandoned
Montgomery in 2004 after determining the bar codes didnt exist, he and eTreppid continued to try to
sell it.
Trepp later told a judge in a federal lawsuit that hed asked the government for $100 million.
Montgomery has also cited that figure in sworn declarationsthough he also claimed Trepp wanted
$500 million for the decoding technology. He would tell his lawyers and investors that the money
was appropriated as part of the black budget. ETreppid did have powerful friends and lobbyists

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on Capitol Hill. It had strong connections on the House Permanent Select Committee on Intelligence.
The local congressional representative, Republican Jim Gibbonssoon to be governor of
Nevadawas on the committee. But by late 2005 things were falling apart between Montgomery and
Trepp. There were indications Montgomery was losing big at the blackjack tables. According to an
FBI investigation, he borrowed $275,000 from Trepp to pay down casino and other debts. Trepp
told FBI agents hed made him sign a note that hed pay it backTrepp had loaned him more than
$1.3 million over the years.
One eTreppid employee told the FBI that she notified Trepp about the faked bazooka tests. Evidently
Trepp hadnt known. She informed Trepp she didnt think Montgomery had written any significant
software for the company. Trepp heard from others that Montgomery didnt have the technical skills
he claimed to have. For his part, Montgomery was grumbling. Trepp had not adequately shared the
tens of millions in government funds he had made. Warren is screwing me out of the money,
Montgomery said to Venables. In January 2006 Montgomery left eTreppid. He asked Bauder to help
load his big Chevy twin-cab truck on a Saturday. When he left, according to eTreppid, the companys
software had been deleted and the source code wiped out. Even the surveillance videotapes were
blank. If eTreppid was a store, its inventory was gone. It couldnt do government contracts, video
games or compression.
Trepp believed he had backup. After all, Montgomery had assured him hed give him daily backups
of his material. So Trepp went to his outside safe where he kept whatever Montgomery had given
him. He gave the material to his security officer, Sloan Venables. Venables says the entire backup for
the multimillion-dollar eTreppid operation consisted of three CDs and two hard drives. Venables
looked at the disks and drives and turned back to Trepp. In seven years, thats all? Three CDs and
two hard drives? I said, Dont you think thats weird?
Venables ran the supposed backup files through his computer. There was nothing on them, he says.
There were a couple of zip files, and the hard drives had some source codes for an interface. It
wasnt anything that could run as a program
Trepp called the FBI. Not only was the company software gone and its tapes erased, but, he told them,
classified tapes were missing. In January 2006 the U.S. government suspended Montgomerys
security clearance. (Montgomery, however, later stated he was unaware his clearance had been
suspended.)
Montgomerys phone rang on February 16. The voice on the other end was someone he trusted: Paul
Haraldsen, an agent of the Air Force Office of Special Investigations. For years Haraldsen had
reassured him the government was still interested in the Al Jazeera intercepts. Hey, DennisPaul,
how are you? What Montgomery didnt know was that Haraldsen was working with the FBI on the
investigation and was recording the call. Montgomery railed against Trepp and bragged about his
bizarre intelligence work. I did something very good for this country, he said. Montgomery boasted
that even if the CIA didnt believe in him, the work he did was 100 percent accuratemore accurate
than people will ever know. (The agencys name is blacked out in the court transcript, but it is clear
what he means.) Haraldsen apparently tried to lure him in. Money might be available, he said. You
know, we had money loaded in a pipeline, Haraldsen said to Montgomery. He could go back to his
bosses in Washington and let them know whether to spend it or not.
Paul, Montgomery said, why does it have to stop because [Trepp] is a prick? The government
money could flow even if it went to him rather than to eTreppid. Haraldsen tried to egg him on with

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promises hed tell Washington to buy more of the Al Jazeera information. Where do I go from
here? Haraldsen asked. What do I tell the people back in D.C.? Do I tell them to forget about the
money and put it away? Absolutely not, Montgomery said.
Montgomery and Trepp were soon in a no-holds-barred federal lawsuit. Each sued the other. Trepp
obviously believed Montgomerys technology was real because he pursued the lawsuit with a
vengeance. Montgomery, on the other hand, accused Trepp of trying to steal his inventions.
Montgomery claimed he needed to bring the U.S. intelligence establishment into the case. He went so
far as to name the Department of Defense as a defendant.
Eventually Director of National Intelligence John Negroponte weighed in. What secretswhat
embarrassmentscould be exposed if Montgomery and Trepp were to depose intelligence and
military officials? Negroponte issued a declaration that warned of serious, and in some cases
exceptionally grave, damage to the national security of the United States. He invoked the state
secrets privilege. The judge in the case issued a protective order; the secrets of eTreppids government
business would remain untold.
Trepp had deep pockets and a collection of associates who could bankroll him, but Montgomery had a
new patron, someone with tremendous financial resources and connections in Washington, D.C. Her
name was Edra Blixseth, wife of billionaire developer Tim Blixseth. The Blixseths had made their
reputations as founders of the exclusive Yellowstone Club in Montana, a resort for the fabulously
wealthy. Membership cost a quarter of a million dollars, but once there, vacationers like Bill Gates or
Dan Quayle could enjoy private powder in the company of other elites.
The Blixseths lived in a $200 million estate called Porcupine Creek in Rancho Mirage, California. It
had a private golf course and a 30,000-square-foot mansion set among manicured gardens. This is
where Montgomery pursued the next stage of his career as a software programmer.
Trepp heard from others that Montgomery didnt have the technical skills he
claimed to have. For his part, Montgomery was grumbling. Trepp had not adequately
shared the tens of millions in government funds he had made.

A document in Superior Court in Californianow unsealedreveals how Montgomery explained his


inventions and intelligence work for the U.S. government to Blixseth, her lawyers and her partners.
He would pull out his laptop, demonstrate his software and brag how he was decoding Al Jazeera
broadcasts and using it for other top secret programs. He found a new lawyer for his case against
Trepp. He told him he had been intercepting Al Qaeda target coordinates for proposed terrorist
attacks sent to its field operatives via digital Al Jazeera satellite TV network transmissions.
Montgomery also told his lawyer the Department of Defense paid approximately $30 million in
contracts and appropriated another $100 million in their black budget.
In July 2006 Montgomery and Blixseth pitched their technology to an aide to Vice President Cheney.
I met for several hours with Samantha Ravich, deputy assistant to the vice president in charge of
national security, Montgomery asserted in a sworn statement. His word may be suspect, but there is
corroborating evidence. Ravich listened to Montgomery and Blixseth, but she waseven in
Montgomerys recollectionunimpressed by his claims.
Still, Montgomery hailed his meeting as a victory. He claimed he provided Cheneys office with new
output data on terror that would validate his work. He said the data, which had been encrypted in Al

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Jazeera, were the keys that allowed investigators to crack the liquid-bomb plot in London. On August
9, 2006 British police rounded up two dozen suspects and announced theyd halted a plan to bomb
several transcontinental flights at once. Montgomery swore his warning was used in the disruption of
that threat. In another declaration he said he provided the output from [his] decoding programs,
without compensation, to our government in order to stop terrorist attacks and save American lives.
Montgomery was now making $100,000 a month as a software programmer. He worked for
companies with different names, but they all received funding from Edra Blixseth. Montgomery had a
home in a serene gated community in Rancho Mirage not far from Blixseths estate. He drove a
$70,000 Porsche Cayenne GTS, and his home was near the gambling tables at the Agua Caliente
Casino, where he lost $422,000 in one day.
Blxware, the company through which Blixseth was doing business, had lofty connections. With the
aid of Nevada senator Harry Reids office, Montgomerys technology found its way to the Senate
Intelligence Committee staff. This is no routine achievement: The committee staff, operating in a
special office of the Dirksen Senate building, constitutes an elite sector in Washington. Normal
lobbyists cannot walk in to see staffers because their offices are protected, with special access and
guards. When intel staffers talk, the intelligence community listens because they hold the reinsthey
control oversight.
Montgomery claimed he was reading secret messages about three Americans who had been grabbed
in the Sunni triangle. Signals were coming out related to the recent hostage-taking of our three
soldiers, Montgomery told the staffers. He warned them that something was up. The staffers didnt
know what to make of it.
In 2007 things were looking up for Montgomery. He finally got some interest, this time from an
agency he couldnt name in public. Reading between the lines, one can presume it was the National
Security Agency. But then Montgomery had a strange reaction. He had just purged the software, he
said, and it would take time to redo it. He wanted $4 million from the U.S. government to get started.
The FBI investigation of Montgomery went nowhere. First, his new lawyer challenged the FBI
searches, and the judge found in his favor. Then Montgomery went on the offensive, accusing his
accuser. He went public with allegations that Trepp had committed bribery by paying off Nevada
congressman Jim Gibbons. NBC News did an exclusive interview with Montgomery at Blixseths
house. He was dressed in a suit and tie and said he saw the bribe take place. He claimed Trepp had
given Gibbons casino chips and cash worth about $100,000. Montgomery backed this up with
e-mails he said hed taken off the eTreppid server. Trepp and Gibbons found themselves under a
grand jurys scrutiny. They, not Montgomery, were targeted. But Montgomerys allegations fell apart
after a forensic expert for eTreppid alleged in court papers that one crucial e-mail had been doctored.
The Department of Justice later dropped the case, and Gibbons was cleared.
By 2008 things seemed to have resolved themselves in the epic litigation between Montgomery and
his old moneyman Warren Trepp. There was a glitch at first: Montgomery was supposed to produce a
key CD with the breakthrough software he claimed hed invented, the very heart of this case. But he
couldnt find the disk, he said, and he claimed he couldnt re-create the lost and precious secret. He
lashed out at the FBI in a court document. It was the agents who had ruined everything anyway, he
said. The FBI had damaged and in some cases destroyed his property.
That backfired, but the parties all seemed to come to a temporary agreement. By the fall, Montgomery

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settled his long-standing suit with Warren Trepp. Terms werent released at the time, but Trepp let
Montgomery and his new financier, Edra Blixseth, keep the software. Court records indicate
Montgomery and Blixseth would now owe $26.5 million to Trepp.
One can only assume it hit Montgomery hard: Four days after the settlement he spent his day at
Caesars Palace on the Las Vegas Strip. He was a blackjack player by preference, according to all
accounts, and so he presumably sat at the high rollers blackjack tables on September 27. He was, in
the parlance of the gambling hall, a whale. He took out his checkbook and tore out check after
check, making them out to Caesars Palace Hotel and Casino, and buying cash and chips. The first
check was for $10,000, then $100,000 and on and on. Thats blackjack for you. In fact, Montgomery
bought a cool million dollars worth from the casino that day. Caesars wont comment on individual
players, but prosecutors say Montgomerys checks later bounced. (In October 2009 Montgomery
came up with $250,000 in restitution, which kept him from being prosecuted.)
But Montgomery and the U.S. government were apparently still working together. The CIA had
discredited the embarrassing Al Jazeera technology, but it was all still secret, still classified. Few
people even in the government knew about the old scandal. Montgomery and his patron somehow
found a new federal buyer willing to hand over taxpayer funds. In this case it was $3 million for
research, development, test and evaluation. It was written in the dense language of federal
procurement law and revived all the terms Montgomery had bandied about. The contract was so
heavily redacted that even the name of the Air Force office is blacked out. I read through a version of
the document, and at the end I found the nondisclosure agreement. This agreement is entered into
between the United States Air Force and Dennis Montgomery. He signed it January 29, 2009.
Montgomery did not cooperate with this story, but I managed to reach the Air Force program
manager, Joseph Liberatore. How do I want to say this? he said. We were testing some of the
software. We were just looking at it to see if there was anything there. If there is anything there we
wanted to make sure there was due diligence and it was looked at by the U.S. government.
I asked the Air Force how this could have happened. The chief of the Air Force press desk, Andrew
Bourland, said Blxware represented its software as innovative and transformational. But the results
of the evaluation were inconclusive and discussions were over. The first taxpayer transfer to Edra
Blixseths company was a $2 million payment on February 5, 2009. That same month, Blxware paid
Dennis Montgomery $600,000.
In June, four months after collecting all that money, Montgomery and his wife declared personal
bankruptcy. One of his assets, he claimed, was the $10 million value of his copyrightsall that
software. His bankruptcy lawyer tells me the technology Montgomery claimed to have invented is an
asset in the bankruptcy proceedings. Itll be between the government authorities and Dennis, he
says.
So in the end, was there ever any software designed by Montgomery? Sloan Venables and Jim Bauder
say they doubt it. They shrug and laugh. I never saw it, says Venables. But if its all bogus, why is it
still classified? And if Montgomerys claims have any truth, why cant anyone else find what he
found? Did that $100 million appropriation ever exist? And who will Dennis Montgomery reach out
to with his next scheme?

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February 19, 2011

Hiding Details of Dubious Deal,


U.S. Invokes National Security
By ERIC LICHTBLAU and JAMES RISEN

WASHINGTON For eight years, government officials turned to Dennis


Montgomery, a California computer programmer, for eye-popping technology
that he said could catch terrorists. Now, federal officials want nothing to do
with him and are going to extraordinary lengths to ensure that his dealings with
Washington stay secret.
The Justice Department, which in the last few months has gotten protective
orders from two federal judges keeping details of the technology out of court,
says it is guarding state secrets that would threaten national security if
disclosed. But others involved in the case say that what the government is
trying to avoid is public embarrassment over evidence that Mr. Montgomery
bamboozled federal officials.
A onetime biomedical technician with a penchant for gambling, Mr.
Montgomery is at the center of a tale that features terrorism scares, secret
White House briefings, backing from prominent Republicans, backdoor dealmaking and fantastic-sounding computer technology.
Interviews with more than two dozen current and former officials and business
associates and a review of documents show that Mr. Montgomery and his
associates received more than $20 million in government contracts by claiming
that software he had developed could help stop Al Qaedas next attack on the
United States. But the technology appears to have been a hoax, and a series of
government agencies, including the Central Intelligence Agency and the Air
Force, repeatedly missed the warning signs, the records and interviews show.
Mr. Montgomerys former lawyer, Michael Flynn who now describes Mr.
Montgomery as a con man says he believes that the administration has

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been shutting off scrutiny of Mr. Montgomerys business for fear of revealing
that the government has been duped.
The Justice Department is trying to cover this up, Mr. Flynn said. If this
unravels, all of the evidence, all of the phony terror alerts and all the
embarrassment comes up publicly, too. The government knew this technology
was bogus, but these guys got paid millions for it.
Justice Department officials declined to discuss the governments dealings with
Mr. Montgomery, 57, who is in bankruptcy and living outside Palm Springs,
Calif. Mr. Montgomery is about to go on trial in Las Vegas on unrelated charges
of trying to pass $1.8 million in bad checks at casinos, but he has not been
charged with wrongdoing in the federal contracts, nor has the government tried
to get back any of the money it paid. He and his current lawyer declined to
comment.
The software he patented which he claimed, among other things, could find
terrorist plots hidden in broadcasts of the Arab network Al Jazeera; identify
terrorists from Predator drone videos; and detect noise from hostile
submarines prompted an international false alarm that led President George
W. Bush to order airliners to turn around over the Atlantic Ocean in 2003.
The software led to dead ends in connection with a 2006 terrorism plot in
Britain. And they were used by counterterrorism officials to respond to a bogus
Somali terrorism plot on the day of President Obamas inauguration, according
to previously undisclosed documents.
It Wasnt Real
Dennis would always say, My technology is real, and its worth a fortune,
recounted Steve Crisman, a filmmaker who oversaw business operations for
Mr. Montgomery and a partner until a few years ago. In the end, Im convinced
it wasnt real.
Government officials, with billions of dollars in new counterterrorism financing
after Sept. 11, eagerly embraced the promise of new tools against militants.
C.I.A. officials, though, came to believe that Mr. Montgomerys technology was
fake in 2003, but their conclusions apparently were not relayed to the militarys

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Special Operations Command, which had contracted with his firm. In 2006,
F.B.I. investigators were told by co-workers of Mr. Montgomery that he had
repeatedly doctored test results at presentations for government officials. But
Mr. Montgomery still landed more business.
In 2009, the Air Force approved a $3 million deal for his technology, even
though a contracting officer acknowledged that other agencies were skeptical
about the software, according to e-mails obtained by The New York Times.
Hints of fraud by Mr. Montgomery, previously raised by Bloomberg Markets
and Playboy, provide a cautionary tale about the pitfalls of government
contracting. A Pentagon study in January found that it had paid $285 billion in
three years to more than 120 contractors accused of fraud or wrongdoing.
Weve seen so many folks with a really great idea, who truly believe their
technology is a breakthrough, but it turns out not to be, said Gen. Victor E.
Renuart Jr. of the Air Force, who retired last year as the commander of the
militarys Northern Command. Mr. Montgomery described himself a few years
ago in a sworn court statement as a patriotic scientist who gave the government
his software to stop terrorist attacks and save American lives. His alliance
with the government, at least, would prove a boon to a small company,
eTreppidTechnologies, that he helped found in 1998.
He and his partner a Nevada investor, Warren Trepp, who had been a top
trader for the junk-bond king Michael Milken hoped to colorize movies by
using a technology Mr. Montgomery claimed he had invented that identified
patterns and isolated images. Hollywood had little interest, but in 2002, the
company found other customers.
With the help of Representative Jim Gibbons, a Republican who would become
Nevadas governor and was a longtime friend of Mr. Trepps, the company won
the attention of intelligence officials in Washington. It did so with a remarkable
claim: Mr. Montgomery had found coded messages hidden in broadcasts by Al
Jazeera, and his technology could decipher them to identify specific threats.
The software so excited C.I.A. officials that, for a few months at least, it was
considered the most important, most sensitive intelligence tool the agency
had, according to a former agency official, who like several others would speak
only on the condition of anonymity because the technology was classified.

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ETreppid was soon awarded almost $10 million in contracts with the militarys
Special Operations Command and the Air Force, which were interested in
software that Mr. Montgomery promised could identify human and other
targets from videos on Predator drones.
In December 2003, Mr. Montgomery reported alarming news: hidden in the
crawl bars broadcast by Al Jazeera, someone had planted information about
specific American-bound flights from Britain, France and Mexico that were
hijacking targets.
C.I.A. officials rushed the information to Mr. Bush, who ordered those flights to
be turned around or grounded before they could enter American airspace.
The intelligence people were telling us this was real and credible, and we had
to do something to act on it, recalled Asa Hutchinson, who oversaw federal
aviation safety at the time. Senior administration officials even talked about
shooting down planes identified as targets because they feared that supposed
hijackers would use the planes to attack the United States, according to a
former senior intelligence official who was at a meeting where the idea was
discussed. The official later called the idea of firing on the planes crazy.
French officials, upset that their planes were being grounded, commissioned a
secret study concluding that the technology was a fabrication. Presented with
the findings soon after the 2003 episode, Bush administration officials began to
suspect that we got played, a former counterterrorism official said.
The C.I.A. never did an assessment to determine how a ruse had turned into a
full-blown international incident, officials said, nor was anyone held
accountable. In fact, agency officials who oversaw the technology directorate
including Donald Kerr, who helped persuade George J. Tenet, then the director
of central intelligence, that the software was credible were promoted, former
officials said. Nobody was blamed, a former C.I.A. official said. They acted
like it never happened.
After a bitter falling out between Mr. Montgomery and Mr. Trepp in 2006 led
to a series of lawsuits, the F.B.I. and the Air Force sent investigators to
eTreppid to look into accusations that Mr. Montgomery had stolen digital data
from the companys systems. In interviews, several employees claimed that Mr.
Montgomery had manipulated tests in demonstrations with military officials to

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make it appear that his video recognition software had worked, according to
government memorandums. The investigation collapsed, though, when a judge
ruled that the F.B.I. had conducted an improper search of his home.
Software and Secrets
The litigation worried intelligence officials. The Bush administration declared
that some classified details about the use of Mr. Montgomerys software were a
state secret that could cause grave harm if disclosed in court. In 2008, the
government spent three days scrubbing the home computers of Mr.
Montgomerys lawyer of all references to the technology. And this past fall,
federal judges in Montana and Nevada who are overseeing several of the
lawsuits issued protective orders shielding certain classified material.
The secrecy was so great that at a deposition Mr. Montgomery gave in
November, two government officials showed up to monitor the questioning but
refused to give their full names or the agencies they worked for.
Years of legal wrangling did not deter Mr. Montgomery from passing supposed
intelligence to the government, according to intelligence officials, including an
assertion in 2006 that his software was able to identify some of the men
suspected of trying to plant liquid bombs on planes in Britain a claim
immediately disputed by United States intelligence officials. And he soon found
a new backer: Edra Blixseth, a onetime billionaire who with her former
husband had run the Yellowstone Club in Montana.
Hoping to win more government money, Ms. Blixseth turned to some
influential friends, like Jack Kemp, the former New York congressman and
Republican vice-presidential nominee, and Conrad Burns, then a Republican
senator from Montana. They became minority stakeholders in the venture,
called Blxware.
New Pitches
In an interview, Mr. Burns recalled how impressed he was by a video
presentation that Mr. Montgomery gave to a cable company. He talked a hell
of a game, the former senator said.

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Mr. Kemp, meanwhile, used his friendship with Vice President Dick Cheney to
set up a meeting in 2006 at which Mr. Kemp, Mr. Montgomery and Ms.
Blixseth met with a top Cheney adviser, Samantha Ravich, to talk about
expanding the governments use of the Blxware software, officials said. She was
noncommittal.
Mr. Flynn, who was still Mr. Montgomerys lawyer, sent an angry letter to Mr.
Cheney in May 2007. He accused the White House of abandoning a tool shown
to save lives. (After a falling out with Mr. Montgomery, Mr. Flynn represents
another party in one of the lawsuits.)
But Mr. Montgomerys company still had an ally at the Air Force, which in late
2008 began negotiating a $3 million contract with Blxware.
In e-mails to Mr. Montgomery and other company officials, an Air Force
contracting officer, Joseph Liberatore, described himself as one of the
believers, despite skepticism from the C.I.A. and problems with the no-bid
contract.
If other agencies examined the deal, he said in a December 2008 e-mail, we
are all toast.
Honestly I do not care about being fired, Mr. Liberatore wrote, but he said he
did care about moving the effort forward we are too close. (The Air Force
declined to make Mr. Liberatore available for comment.)
The day after Mr. Obamas inauguration, Mr. Liberatore wrote that government
officials were thanking Mr. Montgomerys company for its support. The Air
Force appears to have used his technology to try to identify the Somalis it
believed were plotting to disrupt the inauguration, but within days, intelligence
officials publicly stated that the threat had never existed. In May 2009, the Air
Force canceled the companys contract because it had failed to meet its
expectations.
Mr. Montgomery is not saying much these days. At his deposition in November,
when he was asked if his software was a complete fraud, he answered, Im
going to assert my right under the Fifth Amendment.
Barclay Walsh contributed research.

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EXHIBIT 15

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November 18, 2010

Dennis Lee Mon t gomery

UNITED STATES BANKRUPTCY COURT


CENTRAL DISTRICT OF CALIFORNIA
In re: Dennis and Kathleen
Montgomery

)
)
)

Michael J. Flynn,

)
)

Plaintiff,

)
)

vs.

) case No.: 2:10-bk-18510-bb


)

Dennis Lee Montgomery and


Brenda Kathleen Montgomery,

)
)

Defendants.

~~~~~--~~~~~~--)

Videotaped Deposition of:


Dat e:
Report ed by:

DENNIS LEE MONTGOMERY


November 18, 2010
Stephanie P. Borthwick
c.s.R. NO. 12088

YATES COURT REPORTERS

800.669.1866

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November 18, 2010

Dennis Lee Montgomery


1

Deposition of DENNIS LEE MONTGOMERY, taken on

behalf of the Plaintiff, before Stephanie P.

Borthwick, a certified shorthand Reporter,

commencing at the hour of 9:20 a.m., Thursday,

November 18, 2010, at the offices of Yates court

Reporters, 74967 Sheryl Avenue, Palm Desert,

California.

APPEARANCES:

For the Plaintiff:

10

CONANT LAW, LLC

11

Attorneys at Law

12

BY:

13

730 17th Street

14

suite 200

15

Denver, Colorado

16

(303) 298-1800

17

For the Defendants:

CHRISTOPHER J. CONANT, ESQ.

80202

18

DION-KINDEM & CROCKETT

19

Attorneys at Law

20

BY:

21

LNR warner center

22

21271 Burbank Boulevard

23

suite 100

24

woodland Hills, California

25

(818) 883-4400

WILLIAM E. CROCKETT, ESQ.

91367-6667

Page 2
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Dennis Lee Montgomery


1

November 18, 2010

For the united states of America:

U.S. DEPARTMENT OF JUSTICE

CIVIL DIVISION

BY:

Federal Programs Branch

20 Massachusetts Avenue, NW

Room 7150

Washington,

(202) 514-4522

10

CARLOttA P. WELLS, Senior counsel

DC

20530

Also Present:

11

Michael J. Flynn, Esq.

12

Sharon Raya, Paralegal to Ms. wells

13

Tom (last name withheld), u.s. Government

14

Morgan (last name withheld), u.s.

15

Government

16

videographer:

17

Jesse Navarro, orravan Video Litigation

18

services

19

20
21
22
23
24

25

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Dennis Lee Montgomery


10:10:26

2006.

BY

4
10:10:34

MR. CONANT:
Q.

MR. CROCKETT:

counsel?

BY

10

Q.

13
14
10:11:03

15
16
17

10:11:30

20
21
22

10:11:41

when you wrote it, Mr. Montgomery.


That also assumes facts not

in evidence.
MR. CONANT:
Q.

I'm sorry, let me back up.

when you signed this document, was this a

truthful statement on your part?


A.

I'm going to assert my right under the

Fifth Amendment.
Q.

Mr. Montgomery, ,describe what this decoding

program is and what you -- sorry.


Describe what you mean on this line 1 by

18
19

The question is vague and ambiguous.

MR. CROCKETT:

11
12

At what point in time,

MR. CONANT:

10:10:44

Mr. Montgomery, is that a truthful

statement on your part?

November 18, 2010

"decoding programs."
A.

I'm going to assert my right under the

Fifth Amendment.
Q.

Mr. Montgomery, describe what you mean on

23

line 2, starting with the first full sentence on

24

line 2, quote, "My source codes."

25

Please describe to me what "my source


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Dennis Lee Montgomery


10:11:48

3
4
10:11:56

codes" refers to?


A.

Q.

they not the same source codes that you identified

on your bankruptcy schedules on -- and then turn

back to -- we have Plaintiff's Exhibit 1, which is

the bankruptcy schedules.


MR. FLYNN:

10

into the record?

11

BY MR. CONANT:

13

Q.

Before you answer that

question, let me go back, Mr. Montgomery.


A.

Go back to what?

15

Q.

We're going to go back to Plaintiff's

Exhibit
Stephanie, what Plaintiff's exhibit are we

17
18

on right now?

19

THE REPORTER:

3.

20

MR. CROCKETT:

Are we marking the

21

declaration?
MR. CONANT:

22
23
24
10:13:02

All right.

Did you read the whole thing

14

16

10:12:55

These, quote, unquote, "source codes," are

12

10:12:43

I'm going to assert my right under the

Fifth Amendment.

9
10:12:21

November 18, 2010

25

Yeah, start marking these

things.
Let me go -- can we go off the record here
for a second so

can get the exhibits straightened


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Dennis Lee Montgomery


10:14:57

BY MR. CONANT:
Q.

10:15:23

decoding programs without compensation to our

government in order to stop terrorist attacks and

save American lives.

decoding technology which derives from my 'ODS' are

what Trepp and several government officials were

attempting to steal from me when they raided my

10

MR. FLYNN:

code that was used to stop terrorist attacks?

13

BY MR. CONANT:

15
16
17

Q.

Mr. Montgomery, have you ever created any

source code that was used to stop terrorist attacks?


A.

I'm going to assert my right under the

Fifth Amendment.

18

MR. FLYNN:

19

MR. CONANT:

20
21
22

10:16:16

Did you ever create any source

12

14

10:15:49

My source codes for this

home.

11

10:15:37

And please follow along, Mr. Montgomery.


"I have provided the 'output' from my

10:15:07

November 18, 2010

Q.

All right.

All right.
I'm going to keep going.
Mr. Montgomery, turn with me

back to Plaintiff's Exhibit No. 2.


All right.

we'll go look at Request for

23

Production No. 1 where you are requested to produce

24

the source codes.

25

be marked as Plaintiff's Exhibit No .

I'm going to hand you what will

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Dennis Lee Montgomery


10:41:42

10:41:49

10:41:57

10:42:13

violate it, wouldn't I?

Q.

would want you to answer the question.

A.

just --

Q.

continue with your answer.

A.

I've answered it.

Q.

Mr. Montgomery, for the record, the

protective order --

MR. FLYNN:

MR. CONANT:

10

MR. FLYNN:

11

MR. CONANT:

12

MR. FLYNN:

All right.
Ask him if he gave -Let me
-- very specific intelligence

regarding decoding -- did he give that information.

14

Did he give that information.

15

BY

17

MR. CONANT:
Q.

19
20

Read with me, Mr. Montgomery, on page 4,

line 21, beginning with the first full sentence.


MR. FLYNN:

18

10:42:35

Don't go there.

13

16

10:42:23

November 18, 2010

BY

This the Cheney office.

MR. CONANT:
Q.

"I gave the appropriate authorities within

21

the u.s. Government accurate and very specific

22

intelligence regarding this terrorist plot from my

23

decoding software, as

24

prior to the arrests by the London authorities

25

without compensation."

have done in the past, weeks

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10:42:38

1
2

10:42:46

Did you give -- did you give the U.S.

that you're referring to here?

10

A.

--

this very specific intelligence

I'm going to assert my right under the

Fifth Amendment.
Q.

Isn't it true, Mr. Montgomery, that this,

quote, unquote, "decoding software" that you


reference on line 22 is just a complete fraud?

11

MR. CROCKETT:

12

Go ahead.

13

THE WITNESS:

14

Hold it.

I'm going to assert my right

under the Fifth Amendment.

15

I couldn't hear Mr. Flynn's question.

16

MR. CONANT:

17

THE WITNESS:

18
19

10:43:39

Q.

10:43:22

BY MR. CONANT:

Government this

10:43:14

Did you do that.

10:42:58

MR. FLYNN:

November 18, 2010

That's fine.

I'll repeat it.

okay.

BY MR. CONANT:
Q.

Beginning on line 21, going to line 24 and

20

a half where you reference this very specific

21

intelligence regarding the terrorist plot that you

22

got from your decoding software regarding these

23

arrests in London, isn't that the same information

24

you and Edra Blixseth provided to a person within

25

Dick Cheney's office?


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13:38:47

13:38:52

doing what he's doing and you're asking me

questions.

Q.

Mr. Montgomery

A.

I'm listening.

Q.

--

provide Blxware with any source code ever?


A.

I don't recall.

Q.

Isn't it true that you've never provided

Blxware with any sort of source code?

10

A.

No.

11

Q.

Isn't it true that the purpose of -- let me

12

strike that.
were you trying -- I'm sorry.

13
14
13:39:25

when you were at Blxware was Blxware

16

attempting to procure a hundred million dollar

17

contract from the united states Government?

19

13:39:43

Let me

strike that.

15

18

13:39:36

has Ms. Blixseth ever asked you to

9
13:39:05

November 18, 2010

20

A.

I'm going to assert my right under the

Fifth Amendment.
Q.

were you involved in trying to get a

21

hundred million dollar contract from the

22

united states Government?

23

A.

Going to assert my right under the Fifth

24

Amendment.

25

Q.

Didn't Blxware receive approximately


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13:39:45

$2.5 million from the United states Government,

Mr. Montgomery?
A.

3
4
13:39:52

Q.

paid as compensation to Blxware for fraudulent

software?

A.

I'm going to assert my right under the

Fifth Amendment.

10

Q.

Isn't it true that Blxware never had any

11

software that purported to do what Blxware was

12

representing it would do to the united states

13

Government?
A.

15

I'm going to assert my right under the

Fifth Amendment.
MR. CONANT:

16

13:40:35

wasn't that $2.5 million Blxware received

14
13:40:18

I'm going to assert my right under the

Fifth Amendment.

13:40:04

November 18, 2010

All right.

I'm going to hand

17

you what's going to be marked as Plaintiff's

18

Exhibit 15.

19

(Exhibit 15 was marked for identification.)

20

MR. CONANT:

21

MR. CROCKElT:

22

MR. CONANT:

23

Well, it's short and sweet.


Are you still looking at the

email?
MR. FLYNN:

24
25

If you can hand it back --

Try to get me to --

Ill
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13:41:30

1
2

13:41:40

BY

MR. CONANT:
Q.

of 2009, were you ever scheduled to have dinner with

the secret service?

A.

BY MR.

Q.

13:42:05

was Edra.

CONANT:

was Edra Blixseth ever scheduled to have

dinner with the secret service?


A.

11

Q.

can you, Mr. Montgomery, tell me about any

have no idea.

12

discussions you had with Edra Blixseth regarding the

13

Blxware software?

14

A.

what's the Blxware software?

15

Q.

wasn't elxware -- wasn't Blxware producing

some form of software product?

17

A.

Yes.

18

Q.

And did you ever have discussions with Edra

19
20
21

13:42:27

FLYNN:

10

16

13:42:18

Not that I recall.


MR.

13:41:50

Mr. Montgomery, in approximately February

Blixseth regarding that software?


A.

Which specific piece of software are you

referring to?

22

Q.

Any software.

23

A.

I'm sure at some point

24

Q.

was there any software that Blxware was

25

must have.

developing to decode Al-Jazeera communications?


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2
3

13 :42: 38

Fifth Amendment.
Q.

terrorist attacks?
A.

Q.

Now you chuckled there.

A.

well, because I'm tired of you making these

10

outrageous allegations against me.

11

getting old.
MR. FLYNN:

13

Fifth.

14

BY MR. CONANT:

15

Q.

It's really

Then why are you taking the

Then why are you taking the Fifth?


THE WITNESS:

16
17

Mr. Flynn?

18

BY MR. CONANT:

IS he asking me that or you,

19

Q.

It doesn't really matter.

20

A.

Yeah, it does.

I thought you were the

21

people asking me the questions but he keeps trying

22

to get me agitated and throw his weight around in

23

this deposition and cause a problem.

24
13:43:13

I'm going to assert my right under the

Fifth Amendment.

12

13:43:01

was there any software that Blxware was

purporting to develop that was to be used to detect

13:42:54

I'm going to assert my right under the

13:42:47

A.

November 18, 2010

25

Q.

Mr. Montgomery, we're just trying to get to

the truth here and when -- so however we get to


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13:51:16

A.

I didn't say either.

Q.

You didn't say either what?

MR. FLYNN:

THE WITNESS:

MR. CROCKETT:

Q.

Let's look at page 10, Plaintiff's Exhibit

A.

Yeah.

10

Q.

By June, September -- "By June through

11

September 2003 my ODS had attracted the interest

12

of," redacted, "in connection with using Predator to

13

detect and track specific al-Qaida operatives"

15

17

A.

where are we?

where are we?

MR. CROCKETT:
BY

I don't either.

MR. CONANT:
Q.

Page 10, paragraph 20.

19

A.

okay.

sorry.

Got it.

20

22

I don't know

where we're at.

18

21

13:51 : 55

Dennis.

16

13:51:47

Are you answering for me now?

No. 3, paragraph 20.

14
13:51:42

That he didn't recall.

BY MR. CONANT:

13:51:23

November 18, 2010

Q.

Paragraph entitled "Tracking al-Qaida,

USSOCOM and" blank.

23

A.

Yeah.

24

Q.

"By June through September 2003 my ODS had

25

attracted the interest of," blank, "and USSOCOM in


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13:52:02

13:52:14

connection with using Predator to detect and track

specific al-Qaida operatives in the field, including

al-zarqawi, and specific objects related to him,

such as cars and vans with live video feeds encoded

and scanning for objects and people in real time.


"My object tracking was placed on a

13:52:28

13:52:40

specific number of ov laptops and used by SOCOM

and," blank, "in the field.

regular basis with these operatives in the


connection with the use and application of my

11

technology.

12

"special servers were installed in the POC,

13

Predator operation command, at Nellis Air Force Base

14

and at Fort Bragg to look for, detect and track

15

specific objects which were, in fact, positively

16

i den ti fi ed."

17

Now is that true?

18

statement, Mr. Montgomery, that you


MR. FLYNN:

20

that.

21

BY MR. CONANT:

22
23
24

13:52:56

I interacted on a

10

19
13:52:51

November 18, 2010

25

Q.

Is that a true

-- had the technology that did

-- that you had the technology that did

that?
A.

It's very distracting when Mr. Flynn does

that and it's very hard to keep focused on your


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13:53:01

question when he keeps interrupting it and adding

his piece in the middle of it.

4
13:53:07

Q.

A.

13:53:42

13:54:29

read it.

Fifth.
I'm going to assert my right, Mr. Flynn,
under the Fifth.

10

MR. FLYNN:

11

MR. CONANT:

12

All right.
what~s

okay.
All right.

All right.

I'm going to hand you

13

the reporter,

14

Plaintiff's Exhibit No.

hand

going to be marked as

15

THE REPORTER:

16

MR. CONANT:

17

(Exhibit 17 was marked for identification.)

18

THE WITNESS:

19
13:54:11

Do you need to read line 13 through

I'm going to assert my right under the

8
9

okay.

to 20 again?

13:53:16

November 18, 2010

20

17.
17.

Thank you.

BY MR. CONANT:
Q.

All right.

Mr. Montgomery, I've handed you

21

what's been marked Plaintiff's Exhibit No. 17.

This

22

is an employment -- well, the first page, purports

23

to be an email from Patricia Yarborough to Jory

24

Russell says, "Hi, Jory.

25

agreement.

Here's Denni s's employment

Let me know if you need anything else."


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14:29:23

14:29:29

THE WITNESS:

MR. FLYNN:

Blixseth to an extent.

you're a fraud, Mr. Montgomery.

THE WITNESS:

14:30:20

MR. FLYNN:

And you conned me, sir, that's

why we're here.

13

okay.

Yeah.

No, it isn't.

I don't know if there was a question

on the table.
MR. CROCKETT:

15

17

Dennis, let's get through

this.

THE WITNESS:

16

You're outrageous, Mr. Flynn.

MR. CROCKETT:

12

14

You're a computer hacker and

You're outrageous.

10
11

14:30:07

u.s. Government. You conned Edra

conned the

14:29:48

I know you conned me and you

14:29:37

It's what your version is.

There isn't.

BY MR. CONANT:
Q.

Let's flip to Tab No. 3.

Mr. Montgomery,

18

let's take a break from the bank statement for a

19

second.
You recall signing a confession of judgment

20
21

where you -- a couple of confessions of judgment in

22

connection with the Nevada litigation?

23

A.

24

Fifth.

25

Q.

I'm going to assert my right under the

It's a public document, Mr. Montgomery.

Do
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15:15:04

15:15:10

A.

Q.

Generally speaking, did it have to do with

software?

A.

Q.

was it the decoding software for the

Al-Jazeera transmissions that were contemplated as

part of this agreement, Mr. Montgomery?

10

A.

I don't recall.

11

Q.

You just don't recall.

12

A.

That's correct.

14

MR. CROCKETT:

15

Q.

so in front of -- okay.
MR. FLYNN:

17

software even exist.

18

BY MR. CONANT:

19
20

There wasn't a question.

BY MR. CONANT:

16

15:15:54

was it encoding --

BY MR. CONANT:

13

15:15:37

I don't recall.

MR. FLYNN:

15:15:27

don't recall.

15:15:22

November 18, 2010

Q.

At the time did that decoding

At the time that you entered into this

agreement did the decoding software even exist?

21

A.

And

22

Q.

Did you ever satisfy your obligations under

invoke my right under the Fifth.

23

this agreement, Mr. Montgomery?

24

MR. CROCKETT:

25

conclusion.

well, that calls for a legal

There are multiple obligations set


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CERTIFICATE

OF

CERTIFIED SHORTHAND REPORTER

I, Stephanie P. Borthwick, certified

shorthand Reporter of the state of California, do

hereby certify:
That the foregoing deposition was taken

9
10

before me at the time and place therein set forth,

11

at which time DENNIS LEE MONTGOMERY was duly sworn

12

by me;

13

That the testimony of the witness and all

14

objections made at the time of the examination were

15

recorded stenographically by me and thereafter

16

transcribed, said transcript being a true copy of my

17

shorthand notes thereof, and a true record of the

18

testimony given by the witness.

19

20

In witness whereof, I have subscribed my


name this date:

December 7th, 2010.

21
22
23
24

STEPHANIE P. BORTHWICK, CSR

25

certificate No. 12088


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EXHIBIT 15

Case 1:15-cv-20782-JEM Document 52-17 Entered on FLSD Docket 05/15/2015 Page 2 of 19

November 18, 2010

Dennis Lee Mon t gomery

UNITED STATES BANKRUPTCY COURT


CENTRAL DISTRICT OF CALIFORNIA
In re: Dennis and Kathleen
Montgomery

)
)
)

Michael J. Flynn,

)
)

Plaintiff,

)
)

vs.

) case No.: 2:10-bk-18510-bb


)

Dennis Lee Montgomery and


Brenda Kathleen Montgomery,

)
)

Defendants.

~~~~~--~~~~~~--)

Videotaped Deposition of:


Dat e:
Report ed by:

DENNIS LEE MONTGOMERY


November 18, 2010
Stephanie P. Borthwick
c.s.R. NO. 12088

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November 18, 2010

Dennis Lee Montgomery


1

Deposition of DENNIS LEE MONTGOMERY, taken on

behalf of the Plaintiff, before Stephanie P.

Borthwick, a certified shorthand Reporter,

commencing at the hour of 9:20 a.m., Thursday,

November 18, 2010, at the offices of Yates court

Reporters, 74967 Sheryl Avenue, Palm Desert,

California.

APPEARANCES:

For the Plaintiff:

10

CONANT LAW, LLC

11

Attorneys at Law

12

BY:

13

730 17th Street

14

suite 200

15

Denver, Colorado

16

(303) 298-1800

17

For the Defendants:

CHRISTOPHER J. CONANT, ESQ.

80202

18

DION-KINDEM & CROCKETT

19

Attorneys at Law

20

BY:

21

LNR warner center

22

21271 Burbank Boulevard

23

suite 100

24

woodland Hills, California

25

(818) 883-4400

WILLIAM E. CROCKETT, ESQ.

91367-6667

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1

November 18, 2010

For the united states of America:

U.S. DEPARTMENT OF JUSTICE

CIVIL DIVISION

BY:

Federal Programs Branch

20 Massachusetts Avenue, NW

Room 7150

Washington,

(202) 514-4522

10

CARLOttA P. WELLS, Senior counsel

DC

20530

Also Present:

11

Michael J. Flynn, Esq.

12

Sharon Raya, Paralegal to Ms. wells

13

Tom (last name withheld), u.s. Government

14

Morgan (last name withheld), u.s.

15

Government

16

videographer:

17

Jesse Navarro, orravan Video Litigation

18

services

19

20
21
22
23
24

25

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10:10:26

2006.

BY

4
10:10:34

MR. CONANT:
Q.

MR. CROCKETT:

counsel?

BY

10

Q.

13
14
10:11:03

15
16
17

10:11:30

20
21
22

10:11:41

when you wrote it, Mr. Montgomery.


That also assumes facts not

in evidence.
MR. CONANT:
Q.

I'm sorry, let me back up.

when you signed this document, was this a

truthful statement on your part?


A.

I'm going to assert my right under the

Fifth Amendment.
Q.

Mr. Montgomery, ,describe what this decoding

program is and what you -- sorry.


Describe what you mean on this line 1 by

18
19

The question is vague and ambiguous.

MR. CROCKETT:

11
12

At what point in time,

MR. CONANT:

10:10:44

Mr. Montgomery, is that a truthful

statement on your part?

November 18, 2010

"decoding programs."
A.

I'm going to assert my right under the

Fifth Amendment.
Q.

Mr. Montgomery, describe what you mean on

23

line 2, starting with the first full sentence on

24

line 2, quote, "My source codes."

25

Please describe to me what "my source


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10:11:48

3
4
10:11:56

codes" refers to?


A.

Q.

they not the same source codes that you identified

on your bankruptcy schedules on -- and then turn

back to -- we have Plaintiff's Exhibit 1, which is

the bankruptcy schedules.


MR. FLYNN:

10

into the record?

11

BY MR. CONANT:

13

Q.

Before you answer that

question, let me go back, Mr. Montgomery.


A.

Go back to what?

15

Q.

We're going to go back to Plaintiff's

Exhibit
Stephanie, what Plaintiff's exhibit are we

17
18

on right now?

19

THE REPORTER:

3.

20

MR. CROCKETT:

Are we marking the

21

declaration?
MR. CONANT:

22
23
24
10:13:02

All right.

Did you read the whole thing

14

16

10:12:55

These, quote, unquote, "source codes," are

12

10:12:43

I'm going to assert my right under the

Fifth Amendment.

9
10:12:21

November 18, 2010

25

Yeah, start marking these

things.
Let me go -- can we go off the record here
for a second so

can get the exhibits straightened


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10:14:57

BY MR. CONANT:
Q.

10:15:23

decoding programs without compensation to our

government in order to stop terrorist attacks and

save American lives.

decoding technology which derives from my 'ODS' are

what Trepp and several government officials were

attempting to steal from me when they raided my

10

MR. FLYNN:

code that was used to stop terrorist attacks?

13

BY MR. CONANT:

15
16
17

Q.

Mr. Montgomery, have you ever created any

source code that was used to stop terrorist attacks?


A.

I'm going to assert my right under the

Fifth Amendment.

18

MR. FLYNN:

19

MR. CONANT:

20
21
22

10:16:16

Did you ever create any source

12

14

10:15:49

My source codes for this

home.

11

10:15:37

And please follow along, Mr. Montgomery.


"I have provided the 'output' from my

10:15:07

November 18, 2010

Q.

All right.

All right.
I'm going to keep going.
Mr. Montgomery, turn with me

back to Plaintiff's Exhibit No. 2.


All right.

we'll go look at Request for

23

Production No. 1 where you are requested to produce

24

the source codes.

25

be marked as Plaintiff's Exhibit No .

I'm going to hand you what will

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10:41:42

10:41:49

10:41:57

10:42:13

violate it, wouldn't I?

Q.

would want you to answer the question.

A.

just --

Q.

continue with your answer.

A.

I've answered it.

Q.

Mr. Montgomery, for the record, the

protective order --

MR. FLYNN:

MR. CONANT:

10

MR. FLYNN:

11

MR. CONANT:

12

MR. FLYNN:

All right.
Ask him if he gave -Let me
-- very specific intelligence

regarding decoding -- did he give that information.

14

Did he give that information.

15

BY

17

MR. CONANT:
Q.

19
20

Read with me, Mr. Montgomery, on page 4,

line 21, beginning with the first full sentence.


MR. FLYNN:

18

10:42:35

Don't go there.

13

16

10:42:23

November 18, 2010

BY

This the Cheney office.

MR. CONANT:
Q.

"I gave the appropriate authorities within

21

the u.s. Government accurate and very specific

22

intelligence regarding this terrorist plot from my

23

decoding software, as

24

prior to the arrests by the London authorities

25

without compensation."

have done in the past, weeks

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10:42:38

1
2

10:42:46

Did you give -- did you give the U.S.

that you're referring to here?

10

A.

--

this very specific intelligence

I'm going to assert my right under the

Fifth Amendment.
Q.

Isn't it true, Mr. Montgomery, that this,

quote, unquote, "decoding software" that you


reference on line 22 is just a complete fraud?

11

MR. CROCKETT:

12

Go ahead.

13

THE WITNESS:

14

Hold it.

I'm going to assert my right

under the Fifth Amendment.

15

I couldn't hear Mr. Flynn's question.

16

MR. CONANT:

17

THE WITNESS:

18
19

10:43:39

Q.

10:43:22

BY MR. CONANT:

Government this

10:43:14

Did you do that.

10:42:58

MR. FLYNN:

November 18, 2010

That's fine.

I'll repeat it.

okay.

BY MR. CONANT:
Q.

Beginning on line 21, going to line 24 and

20

a half where you reference this very specific

21

intelligence regarding the terrorist plot that you

22

got from your decoding software regarding these

23

arrests in London, isn't that the same information

24

you and Edra Blixseth provided to a person within

25

Dick Cheney's office?


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13:38:47

13:38:52

doing what he's doing and you're asking me

questions.

Q.

Mr. Montgomery

A.

I'm listening.

Q.

--

provide Blxware with any source code ever?


A.

I don't recall.

Q.

Isn't it true that you've never provided

Blxware with any sort of source code?

10

A.

No.

11

Q.

Isn't it true that the purpose of -- let me

12

strike that.
were you trying -- I'm sorry.

13
14
13:39:25

when you were at Blxware was Blxware

16

attempting to procure a hundred million dollar

17

contract from the united states Government?

19

13:39:43

Let me

strike that.

15

18

13:39:36

has Ms. Blixseth ever asked you to

9
13:39:05

November 18, 2010

20

A.

I'm going to assert my right under the

Fifth Amendment.
Q.

were you involved in trying to get a

21

hundred million dollar contract from the

22

united states Government?

23

A.

Going to assert my right under the Fifth

24

Amendment.

25

Q.

Didn't Blxware receive approximately


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13:39:45

$2.5 million from the United states Government,

Mr. Montgomery?
A.

3
4
13:39:52

Q.

paid as compensation to Blxware for fraudulent

software?

A.

I'm going to assert my right under the

Fifth Amendment.

10

Q.

Isn't it true that Blxware never had any

11

software that purported to do what Blxware was

12

representing it would do to the united states

13

Government?
A.

15

I'm going to assert my right under the

Fifth Amendment.
MR. CONANT:

16

13:40:35

wasn't that $2.5 million Blxware received

14
13:40:18

I'm going to assert my right under the

Fifth Amendment.

13:40:04

November 18, 2010

All right.

I'm going to hand

17

you what's going to be marked as Plaintiff's

18

Exhibit 15.

19

(Exhibit 15 was marked for identification.)

20

MR. CONANT:

21

MR. CROCKElT:

22

MR. CONANT:

23

Well, it's short and sweet.


Are you still looking at the

email?
MR. FLYNN:

24
25

If you can hand it back --

Try to get me to --

Ill
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November 18, 2010

Dennis Lee Montgomery


13:41:30

1
2

13:41:40

BY

MR. CONANT:
Q.

of 2009, were you ever scheduled to have dinner with

the secret service?

A.

BY MR.

Q.

13:42:05

was Edra.

CONANT:

was Edra Blixseth ever scheduled to have

dinner with the secret service?


A.

11

Q.

can you, Mr. Montgomery, tell me about any

have no idea.

12

discussions you had with Edra Blixseth regarding the

13

Blxware software?

14

A.

what's the Blxware software?

15

Q.

wasn't elxware -- wasn't Blxware producing

some form of software product?

17

A.

Yes.

18

Q.

And did you ever have discussions with Edra

19
20
21

13:42:27

FLYNN:

10

16

13:42:18

Not that I recall.


MR.

13:41:50

Mr. Montgomery, in approximately February

Blixseth regarding that software?


A.

Which specific piece of software are you

referring to?

22

Q.

Any software.

23

A.

I'm sure at some point

24

Q.

was there any software that Blxware was

25

must have.

developing to decode Al-Jazeera communications?


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13: 42: 34

2
3

13 :42: 38

Fifth Amendment.
Q.

terrorist attacks?
A.

Q.

Now you chuckled there.

A.

well, because I'm tired of you making these

10

outrageous allegations against me.

11

getting old.
MR. FLYNN:

13

Fifth.

14

BY MR. CONANT:

15

Q.

It's really

Then why are you taking the

Then why are you taking the Fifth?


THE WITNESS:

16
17

Mr. Flynn?

18

BY MR. CONANT:

IS he asking me that or you,

19

Q.

It doesn't really matter.

20

A.

Yeah, it does.

I thought you were the

21

people asking me the questions but he keeps trying

22

to get me agitated and throw his weight around in

23

this deposition and cause a problem.

24
13:43:13

I'm going to assert my right under the

Fifth Amendment.

12

13:43:01

was there any software that Blxware was

purporting to develop that was to be used to detect

13:42:54

I'm going to assert my right under the

13:42:47

A.

November 18, 2010

25

Q.

Mr. Montgomery, we're just trying to get to

the truth here and when -- so however we get to


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13:51:07

13:51:16

A.

I didn't say either.

Q.

You didn't say either what?

MR. FLYNN:

THE WITNESS:

MR. CROCKETT:

Q.

Let's look at page 10, Plaintiff's Exhibit

A.

Yeah.

10

Q.

By June, September -- "By June through

11

September 2003 my ODS had attracted the interest

12

of," redacted, "in connection with using Predator to

13

detect and track specific al-Qaida operatives"

15

17

A.

where are we?

where are we?

MR. CROCKETT:
BY

I don't either.

MR. CONANT:
Q.

Page 10, paragraph 20.

19

A.

okay.

sorry.

Got it.

20

22

I don't know

where we're at.

18

21

13:51 : 55

Dennis.

16

13:51:47

Are you answering for me now?

No. 3, paragraph 20.

14
13:51:42

That he didn't recall.

BY MR. CONANT:

13:51:23

November 18, 2010

Q.

Paragraph entitled "Tracking al-Qaida,

USSOCOM and" blank.

23

A.

Yeah.

24

Q.

"By June through September 2003 my ODS had

25

attracted the interest of," blank, "and USSOCOM in


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Dennis Lee Montgomery


13:52:02

13:52:14

connection with using Predator to detect and track

specific al-Qaida operatives in the field, including

al-zarqawi, and specific objects related to him,

such as cars and vans with live video feeds encoded

and scanning for objects and people in real time.


"My object tracking was placed on a

13:52:28

13:52:40

specific number of ov laptops and used by SOCOM

and," blank, "in the field.

regular basis with these operatives in the


connection with the use and application of my

11

technology.

12

"special servers were installed in the POC,

13

Predator operation command, at Nellis Air Force Base

14

and at Fort Bragg to look for, detect and track

15

specific objects which were, in fact, positively

16

i den ti fi ed."

17

Now is that true?

18

statement, Mr. Montgomery, that you


MR. FLYNN:

20

that.

21

BY MR. CONANT:

22
23
24

13:52:56

I interacted on a

10

19
13:52:51

November 18, 2010

25

Q.

Is that a true

-- had the technology that did

-- that you had the technology that did

that?
A.

It's very distracting when Mr. Flynn does

that and it's very hard to keep focused on your


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13:53:01

question when he keeps interrupting it and adding

his piece in the middle of it.

4
13:53:07

Q.

A.

13:53:42

13:54:29

read it.

Fifth.
I'm going to assert my right, Mr. Flynn,
under the Fifth.

10

MR. FLYNN:

11

MR. CONANT:

12

All right.
what~s

okay.
All right.

All right.

I'm going to hand you

13

the reporter,

14

Plaintiff's Exhibit No.

hand

going to be marked as

15

THE REPORTER:

16

MR. CONANT:

17

(Exhibit 17 was marked for identification.)

18

THE WITNESS:

19
13:54:11

Do you need to read line 13 through

I'm going to assert my right under the

8
9

okay.

to 20 again?

13:53:16

November 18, 2010

20

17.
17.

Thank you.

BY MR. CONANT:
Q.

All right.

Mr. Montgomery, I've handed you

21

what's been marked Plaintiff's Exhibit No. 17.

This

22

is an employment -- well, the first page, purports

23

to be an email from Patricia Yarborough to Jory

24

Russell says, "Hi, Jory.

25

agreement.

Here's Denni s's employment

Let me know if you need anything else."


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November 18, 2010

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14:29:23

14:29:29

THE WITNESS:

MR. FLYNN:

Blixseth to an extent.

you're a fraud, Mr. Montgomery.

THE WITNESS:

14:30:20

MR. FLYNN:

And you conned me, sir, that's

why we're here.

13

okay.

Yeah.

No, it isn't.

I don't know if there was a question

on the table.
MR. CROCKETT:

15

17

Dennis, let's get through

this.

THE WITNESS:

16

You're outrageous, Mr. Flynn.

MR. CROCKETT:

12

14

You're a computer hacker and

You're outrageous.

10
11

14:30:07

u.s. Government. You conned Edra

conned the

14:29:48

I know you conned me and you

14:29:37

It's what your version is.

There isn't.

BY MR. CONANT:
Q.

Let's flip to Tab No. 3.

Mr. Montgomery,

18

let's take a break from the bank statement for a

19

second.
You recall signing a confession of judgment

20
21

where you -- a couple of confessions of judgment in

22

connection with the Nevada litigation?

23

A.

24

Fifth.

25

Q.

I'm going to assert my right under the

It's a public document, Mr. Montgomery.

Do
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15:15:04

15:15:10

A.

Q.

Generally speaking, did it have to do with

software?

A.

Q.

was it the decoding software for the

Al-Jazeera transmissions that were contemplated as

part of this agreement, Mr. Montgomery?

10

A.

I don't recall.

11

Q.

You just don't recall.

12

A.

That's correct.

14

MR. CROCKETT:

15

Q.

so in front of -- okay.
MR. FLYNN:

17

software even exist.

18

BY MR. CONANT:

19
20

There wasn't a question.

BY MR. CONANT:

16

15:15:54

was it encoding --

BY MR. CONANT:

13

15:15:37

I don't recall.

MR. FLYNN:

15:15:27

don't recall.

15:15:22

November 18, 2010

Q.

At the time did that decoding

At the time that you entered into this

agreement did the decoding software even exist?

21

A.

And

22

Q.

Did you ever satisfy your obligations under

invoke my right under the Fifth.

23

this agreement, Mr. Montgomery?

24

MR. CROCKETT:

25

conclusion.

well, that calls for a legal

There are multiple obligations set


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November 18, 2010

CERTIFICATE

OF

CERTIFIED SHORTHAND REPORTER

I, Stephanie P. Borthwick, certified

shorthand Reporter of the state of California, do

hereby certify:
That the foregoing deposition was taken

9
10

before me at the time and place therein set forth,

11

at which time DENNIS LEE MONTGOMERY was duly sworn

12

by me;

13

That the testimony of the witness and all

14

objections made at the time of the examination were

15

recorded stenographically by me and thereafter

16

transcribed, said transcript being a true copy of my

17

shorthand notes thereof, and a true record of the

18

testimony given by the witness.

19

20

In witness whereof, I have subscribed my


name this date:

December 7th, 2010.

21
22
23
24

STEPHANIE P. BORTHWICK, CSR

25

certificate No. 12088


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EXHIBIT 16

Bogus analysis led to alert in 2003 - NBC Nightly News with Brian Willia... Page 1 of 2
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CIA experts saw a secret code on Al-Jazeera that wasn't there

By
Lisa Myers, Aram Roston and the NBC Investigative Unit
NBC News Investigative Unit
updated 6/27/2005 8:10:57 PM ET

WASHINGTON Christmas 2003 became a season of terror after the federal government raised the terror alert level from yellow to orange,
grimly citing credible intelligence of another assault on the United States.
"These credible sources," announced then-Secretary of Homeland Security Tom Ridge, "suggest the possibility of attacks against the homeland
around the holiday season and beyond."
For weeks, America was on edge as security operations went into high gear. Almost 30 international flights were canceled, inconveniencing
passengers flying Air France, British Air, Continental and Aero Mexico.
But senior U.S. officials now tell NBC News that the key piece of information that triggered the holiday alert was a bizarre CIA analysis, which
turned out to be all wrong.
CIA analysts mistakenly thought they'd discovered a mother lode of secret al-Qaida messages. They thought they had found secret messages on AlJazeera, the Arabic-language television news channel, hidden in the moving text at the bottom of the screen, known as the "crawl," where news
headlines are summarized.
Steganography suspected
U.S. officials tell NBC News that CIA experts technicians working for the Directorate of Science and Technology thought they had found
numbers embedded in the crawl signaling upcoming attacks; dates and flight numbers, and geographic coordinates for targets, including the White
House, Seattle's Space Needle, even the tiny town of Tappahanock, Va. What the analysts thought they had found was something called
"steganography" messages hidden inside a video image.
President Bush and Ridge were briefed on the Al-Jazeera analysis, U.S. intelligence sources say.
In an exclusive interview with NBC News, Ridge defended the government's actions, although he called the intelligence analysis "bizarre, unique,
unorthodox, unprecedented."
"Maybe that's very much the reason that you'd be worried about it, because you hadn't seen it before," recalls Ridge.
He says the administration had to take the suspected terror messages seriously, although "speaking for myself I've got to admit to wondering
whether or not it was credible."
Was he himself skeptical?
"Yeah, we weren't certain," says Ridge. "Still, in the context of everything else (intelligence chatter and a terror attack in Saudi Arabia), we could
not set it aside and dismiss it as not credible."
So the United States raised the alert level and canceled flights.
Critics question evaluation of the evidence
"I'm astonished," says author and intelligence expert Jim Bamford, "that they would put so much credibility in such a weak source of intelligence."
Bamford says the CIA shouldn't be criticized for considering the theory, but that analysts should have weighed how implausible it was.
"What you have to do is judge the intelligence versus what your actions are going to be. And this is the equivalent, basically, of looking at tea
leaves," Bamford says.

http://www.nbcnews.com/id/8380365/ns/nbc_nightly_news_with_brian_wil... 5/15/2015

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Intelligence sources say that even within the CIA, the analysis was a closely guarded secret. Still, they say, some top CIA officials who learned about
it were skeptical. Top officials at the Directorate of Operations, which conducts clandestine operations, and others who worked at the CIA
Counterterrorism Center, felt that the whole theory was implausible and was being taken far too seriously.
As discredited as the CIA's interpretation now is, experts say steganography is a valid subject for CIA analysis, and could be used by terrorists to
hide data in files on the Web, in still photographs or in broadcast television images.
"Steganography," says professor Nasir Memon of Polytechnic University in Brooklyn, N.Y., "is the art, if you will, of secret writing. And when two
parties want to talk to each other and not let anybody know they are indeed communicating, they would use steganography."
Memon is an expert in "steganalysis" using sophisticated software to locate hidden messages. He says such analysis is valuable but not always
reliable, because there are many "false positives." In general, he says, "it's not something I would bet the farm on because there is a significant
chance that it could be wrong."
TV networks commonly hide digital "watermarks" in their video broadcasts, a legitimate use of video encoding to pass along innocuous digital
information. The CIA's Al-Jazeera analysis is classified, and it is still unclear exactly what the CIA technicians were looking for in the network's
"crawl."
Ridge stands by alert
Regardless, Ridge told NBC News that the CIA analysis certainly did turn out to be wrong. He confirms there were no secret terror messages. He
also says there was no evidence that terrorists were actively plotting against aviation at the time.
But Ridge insisted it was not a mistake to raise the alert level or to cancel the flights.
"I think it was the right thing to do," he said.
Even if raising the alert level frightened a lot of people?
"We acted accordingly based on our best information and best conclusions and the information that we had at the time," Ridge said.
Ridge added that the faulty CIA analysis was a significant factor in raising the alert level, but not the only factor.
As for the CIA, a spokeswoman would not confirm or deny this report, but said it's the "agency's job to run all plausible theories to the ground,
especially when American lives could be at risk."
Lisa Myers is NBCs senior investigative correspondent and Aram Roston is an NBC investigative producer.

http://www.nbcnews.com/id/8380365/ns/nbc_nightly_news_with_brian_wil... 5/15/2015

Nevada Company's Capitol Ties - WSJ

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This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers
visit http://www.djreprints.com.
http://www.wsj.com/articles/SB117521830609454045

POLITICS AND POLICY

Nevada Company's Capitol Ties


Defense Contractor Paid Gov. Gibbons's Wife For Consulting Work
By JOHN R. WILKE
Updated March 30, 2007 12:01 a.m. ET
The wife of Nevada Gov. Jim Gibbons was hired as a consultant to a defense contractor at
the same time that her husband, who was then a member of Congress, helped the
company get funding for a no-bid federal contract.
Dawn Gibbons got about $35,000 in consulting fees in 2004 from Sierra Nevada Corp.,
of Sparks, Nev., the company said. Mr. Gibbons, a five-term Republican who served on
the armed services and intelligence committees, sought funding that year for Sierra
Nevada for a $4 million contract to develop a helicopter radar-landing system.
The consulting fees paid to Mrs. Gibbons could draw new scrutiny from federal
investigators already examining ties between Mr. Gibbons and another Nevada defense
contractor, eTreppid Technologies, and Warren Trepp, its majority owner. Mr. Trepp, a
big campaign contributor to Mr. Gibbons, is former chief trader for collapsed junk-bond
dealer Drexel Burnham.
A federal grand jury in Washington has begun to issue subpoenas for documents,
according to witnesses contacted in recent weeks. The case arose after a former business
partner sued Mr. Trepp over the ownership of valuable software algorithms; he also
alleged that the congressman helped eTreppid win secret defense contracts and that Mr.
Trepp gave Mr. Gibbons gifts including private jet flights, a Caribbean cruise and casino
chips, in addition to $90,000 in campaign contributions through firms he controls.

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Nevada Gov. Jim Gibbons and his wife, Dawn, celebrate after the governor's inaugural oath of office at the state
capital in January.

Mr. Gibbons and Mr. Trepp have denied the claims or have said that the gifts weren't
improper because of their long personal friendship. Mr. Gibbons has said that he will
cooperate with any inquiry.
A spokeswoman for the governor said that his work in Congress to help Sierra Nevada
and eTreppid was part of a broader effort to back Nevada companies that were
contributing to national defense. She said these efforts had the support of other members
of the Nevada congressional delegation, including Sen. Harry Reid, a Democrat who is
now Senate Majority Leader.
"The funding requests for Sierra Nevada were in no way connected to the first lady's
small contract with them," said Melissa Subbotin, the governor's spokeswoman.
An executive with Sierra Nevada, Renee Velasco, said the contract with Mrs. Gibbons was
for a market survey and demonstration of a hand-held emergency-communications
device for sale to casinos and state and local governments; the effort was ended in
December 2004. She said the contract didn't present a conflict of interest. "Everything
was done by the book," she said.

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DEFENSE CONTRACT
What's News: The wife of Nevada Gov. Jim
Gibbons was a consultant for Sierra Nevada, a
defense contractor that got federal work with the
help of her husband.
The History: Before becoming governor this year,
Mr. Gibbons was a member of Congress, on the
House armed services and intelligence
committees.
What's Ahead: Federal investigators, already
examining ties between Gov. Gibbons and
another Nevada defense contractor, eTreppid
Technologies, may study the Sierra Nevada
situation.

Abbe David Lowell, a defense attorney


recently hired by Gov. and Mrs. Gibbons,
said the governor's wife "had a preexisting relationship" with Sierra Nevada
that began long before Mr. Gibbons was
elected to Congress and had "no
knowledge" of the federal contract. In a
statement, Mr. Lowell said Mrs. Gibbons
was asked by the company to help launch
a pilot project to promote one of its
products. Mrs. Gibbons spent "numerous
hours setting up meetings, large press
conferences and pilot demonstrations, as
well as providing advice," according to the

statement.
Still, the payments are likely to draw critics in Washington and Carson City, the state
capital. "Having a family member on the payroll of a company that benefits from a
congressman's actions is a poster-child conflict," said Ryan Alexander, president of
Taxpayers for Common Sense, a Washington nonprofit that studies special-interest
spending. She said that Mr. Gibbons "obviously should have recused himself" from
seeking federal appropriations for any of his wife's clients.
One of the military contracts that Sierra Nevada got in 2004 was $2 million for research
on a "helicopter autonomous landing system," to help pilots land in "brownouts" of
blowing sand, a technology several firms were seeking to develop for the Pentagon.
House records indicate that Mr. Gibbons asked for $4 million, and got $2 million in the
final bill. In a June 22, 2004, news release, he hailed the project and a separate $3
million for eTreppid as "cutting-edge technology being developed in Nevada to improve
our defense systems."
In the next fiscal year, the helicopter program gained the support of Sen. Reid as well,
and funding rose to $7 million, House records show. Sierra Nevada also was a
contributor to Sen. Reid. In a statement, a spokesman for Mr. Reid said that Sierra
Nevada is a large employer in his state and he is "proud to have supported" its work.

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Sierra Nevada and eTreppid also got classified contracts that aren't individually listed in
congressional spending legislation. Internal documents and emails reviewed by The Wall
Street Journal show business ties between the two companies between 2003 and 2005,
including a subcontracting relationship on some of the classified work; its details aren't
disclosed in the documents.
The 2004 payments by Sierra Nevada to Mrs. Gibbons, a former Nevada state legislator,
were made through Politek Inc., a political and public-relations consulting firm she
created in 2003 after her last session in the state assembly. "Someone has to make some
money in this family," she said in a newspaper interview at the time. Her husband's takehome House salary was only $7,400 a month, she said.
Politek's biggest client: her husband's 2004 congressional campaign, which paid Politek
$93,424. A second client, Education First, a nonprofit group set up by Mr. and Mrs.
Gibbons, paid Politek an additional $18,000. In the Sierra Nevada contract, Mrs.
Gibbons received payments of $2,500 a month between November 2003 and December
2004.
The appearance of a second Nevada contractor, Sierra Nevada, with ties to Mr. Gibbons
marks a turn in a case that has drawn national attention because some contracts at issue
were part of the classified "black budget," which faces little scrutiny.
The case also had a cameo role in the controversy over the firing of eight U.S. attorneys
late last year, including Daniel Bogden, the U.S. attorney in Nevada.
Some Democrats have charged that Mr. Bogden may have been fired for investigating
Mr. Gibbons. However, Mr. Bogden wasn't involved in the Gibbons probe, which was
initiated by prosecutors in Washington, according to witnesses contacted by the
government in the course of the investigation. Mr. Bogden's office was investigating Mr.
Trepp's claim of trade-secret theft against Mr. Trepp's former business partner, software
designer Dennis Montgomery, who first raised corruption allegations against Mr.
Gibbons.
A federal judge in Reno ruled earlier this month the investigation of Mr. Montgomery,
overseen by Mr. Bogden, amounted to improper use of criminal authority in a civil
business dispute. He also unsealed an earlier ruling which found that U.S. officials in
Nevada had acted "with callous disregard for Mr. Montgomery's constitutional rights"
and that an FBI agent was an "unwitting pawn" of Mr. Trepp and an Air Force official
who urged the FBI to raid Mr. Montgomery's home.

http://www.wsj.com/articles/SB117521830609454045

3/11/2015

Nevada Company's Capitol Ties - WSJ

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Write to John R. Wilke at john.wilke@wsj.com

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copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

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3/11/2015

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November 3, 2008

Governor of Nevada Is Cleared in an Inquiry on


Gifts, His Lawyer Says
By RANDAL C. ARCHIBOLD

Gov. Jim Gibbons of Nevada has been cleared by the Justice Department of any wrongdoing
in connection with an inquiry into whether he helped a friend win military contracts in
exchange for gifts, Mr. Gibbonss lawyer said.
The lawyer, Abbe D. Lowell, said the lead prosecutor in the case informed him on Friday
that no charges would be filed and that the investigation, related to Mr. Gibbonss work as a
congressman before he was elected governor in 2006, had been closed.
A Justice Department spokeswoman, Laura Sweeney, said the department would not
comment.
Mr. Lowell said that Mr. Gibbons, a Republican whose first term as governor has been
dogged by legal, political and personal troubles, would make a statement on Monday.
The investigation spanned 18 months, Mr. Lowell said, and began when a former staff
member of a technology company run by a friend of the governor made accusations of
influence peddling.
The former staff member, Dennis Montgomery, told news media outlets that his boss,
Warren Trepp, the owner of eTreppid Technologies, had given Mr. Gibbons money, casino
chips and a Caribbean cruise to help eTreppid win military contracts.
Mr. Lowell called the accusations ridiculous and hogwash and said, The governor does
not even gamble.
Neither the governor nor I, Mr. Lowell added, have any problem with the Justice
Department having to investigate allegations, even if they are crazy, because he is a highranking public official and he knows the world he lives in.
They handled it in a way and a speed that was up to them. Though we wish it were sooner,
they came to the right conclusion.
Mr. Lowell said Mr. Gibbons had cooperated in the investigation and in recent months had
been interviewed by Federal Bureau of Investigation agents.

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The investigation, Mr. Lowell said, might have been slowed by a civil lawsuit between Mr.
Montgomery and eTreppid, which was settled last month.
Blxware LLC, the company where Mr. Montgomery now works, said the terms of the
settlement were confidential, but the company, based in Bellevue, Wash., disclosed that the
agreement included a payment to Mr. Trepp as compensation for certain allegations made
against him in the news media. Blxware was a party in the lawsuit.
The closing of the investigation provides welcome news to Mr. Gibbons in a trying period.
A former cocktail waitress filed a lawsuit against him last month, alleging that he pushed her
and threatened to rape her after a night of drinking in Las Vegas just before the November
2006 election. Mr. Gibbons denied the accusation, and criminal charges were not filed.
Mr. Gibbons, 63, and his wife, Dawn, 54, began divorce proceedings this year after 22 years
of marriage. The news media in Nevada have made much of her accusation of adultery and
the disclosure of hundreds of text messages he sent to a woman he has said was a friend but
who Ms. Gibbonss lawyers suggest was a mistress.
A state employee filed a lawsuit last month claiming that she was removed from her post on
the belief that she had leaked the messages.
Copyright 2008 The New York Times Company
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Nev. governor may sue accuser over federal


probe
Posted 11/3/2008 10:35 PM | Comment

| Recommend

Videos you may be


interested in

E-mail | Print |

By Brendan Riley, Associated Press Writer


CARSON CITY, Nev. Nevada Gov. Jim Gibbons, cleared by the Justice Department in a corruption
investigation that clouded half of his first term, said Monday his "thoughts remain open" to suing the person whose
accusations led to the probe.
The investigation of the former Republican congressman involved claims that he improperly received gifts from a
software company that received military contracts while he was in Congress.

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The allegations proved to be "baseless, and there's not a shred of evidence that I did anything wrong," Gibbons
said at a news conference.

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"This certainly took a lot longer than I wanted to be resolved. I wish it would have been resolved a year ago, two
years ago," he said. "But this is good news, and it doesn't matter to me when the good news comes, even a day
before an election."
His attorney, Abbe Lowell, of Washington, said Sunday that the Justice Department told him Gibbons wouldn't be
charged. A law enforcement official close to the case, who spoke anonymously because authorities never officially
acknowledged the probe, confirmed the substance of Lowell's statement.
Gibbons, who was elected governor in 2006 after five terms in Congress, had steadfastly denied any wrongdoing
despite claims by Dennis Montgomery that eTreppid Technologies LLC founder Warren Trepp lavished Gibbons
with money and a Caribbean cruise in exchange for help winning contracts for his company.
Montgomery's credibility was put in doubt after a computer expert questioned the authenticity of e-mails
Montgomery claimed proved Gibbons was accepting gifts.
Gibbons said defending himself against the allegations cost about $200,000 in legal fees. He had to solicit
contributions to help cover those costs.
Asked if he would consider suing Montgomery now that the Justice Department and FBI have ended the
investigation, Gibbons said: "You know, some days you're harmed and the doors to the courthouse should remain
open. And let me say that my thoughts remain open."
An attorney for Montgomery, Mark Gunderson in Reno, didn't return a call seeking comment Monday.
The governor said he had been the target of "bogus charges trumped up by certain biased individuals," mentioning
the eTreppid case as well as a claim by a state Democratic Party official that he pressured a county assessor to
get an unwarranted property tax break.
A state Ethics Commission panel concluded in September that there was no evidence to support the tax break
claim.
Along with the federal investigation, Gibbons has seen his approval ratings drop following a budget crunch, a
messy divorce that is still pending and lawsuits involving his private and public activities.
Gibbons still faces a lawsuit from a woman claiming he threatened to rape her. He's also being sued by a
government staffer who claimed she was forced from her job because he thought she was leaking information
about his personal use of a state cell phone.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten
or redistributed.

Posted 11/3/2008 10:35 PM

E-mail | Print |

To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the
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difference. Read more.

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3/12/2015

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The Nevada gambler, al-Qaida, the


CIA and the mother of all cons
Chris McGreal in Washington
Wednesday 23 December 2009 16.47EST

The intelligence reports fitted the suspicions of the time: al-Qaida sleeper
agents were scattered across the US awaiting orders that were broadcast in
secret codes over the al-Jazeera television network.
Flights from Britain and France were cancelled. Officials warned of a
looming "spectacular attack" to rival 9/11. In 2003 President Bush's
homeland security tsar, Tom Ridge, spoke of a "credible source" whose
information had US military bracing for a new terrorist onslaught.
Then suddenly no more was said.
Six years later, Playboy magazine has revealed that the CIA fell victim to an
elaborate con by a compulsive gambler who claimed to have developed
software that discovered al-Jazeera broadcasts were being used to transmit
messages to terrorists buried deep in America.
Dennis Montgomery, 56, the co-owner of a software gaming company in
Nevada, who has since been arrested for bouncing $1m worth of cheques,
claims his program read messages hidden in barcodes listing international
flights to the US, their positions and airports to be targeted.
The CIA took the information seriously, working with Montgomery at his
offices and paying him an undisclosed amount of money. The "intelligence"
Montgomery claimed to have found was passed on to the White House and
homeland security where it kickstarted an alert that bordered on panic.
According to Playboy, Montgomery's claims caused the cancellation of
British Airways and other flights supposedly mentioned in the codes.

http://www.theguardian.com/world/2009/dec/23/dennis-montgomery-cia-al-j... 3/8/2015

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Some officials were not at all surprised to hear the allegation that al-Jazeera
was involved. The then defence secretary, Donald Rumsfeld, later vilified
the station for "vicious, inaccurate and inexcusable" reporting of the US
invasion of Iraq.
For months, the source of the information was kept under wraps within the
CIA but once it became more widely known in the agency it immediately
came under question. Playboy quotes one former counterterrorism official
who attended a briefing on the source as being furious. He said: "I was
saying: 'This is crazy. This is embarrassing.' They claimed they were
breaking the code, getting latitude and longitude, and al-Qaida operatives
were decoding it. They were coming up with airports and everything, and
we were just saying: 'You know, this is horseshit!' "
Frances Townsend, a homeland security adviser to Bush, defended the
decision to work with Montgomery. "It didn't seem beyond the realm of
possibility. We were relying on technical people to tell us whether or not it
was feasible. I don't regret having acted on it," she told Playboy.
But the doubts began to prevail as Montgomery refused to reveal how he
was finding the barcodes, when no one else could, and he demanded
$100m for the software. The CIA also began to wonder why al-Qaida didn't
use emails and web pages to communicate with its agents.
More news

Topics
CIA
Al-Qaida
Air transport
Middle East and North Africa
Nevada
Al-Jazeera

http://www.theguardian.com/world/2009/dec/23/dennis-montgomery-cia-al-j... 3/8/2015

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http://www.theguardian.com/world/2009/dec/23/dennis-montgomery-cia-al-j... 3/8/2015

Man that accused Governor Gibbons arrested - Henderson Clark County Li... Page 1 of 3
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NEWS / POLITICS / DEMOCRAT

Man that accused Governor


Gibbons arrested
July 22, 2009
8:55 PM MST

Dennis Montgomery, the man who accused Nevada


Governor Jim Gibbons of taking bribes has been arrested.
Montgomery was arrested on July 16 near Palm Springs
California. Clark County authorities issued a warrant for his
arrest back in June, for allegedly passing around $1 million
worth of bad checks at Caesars Palace back in 2008.

Dennis Montgomery

http://www.examiner.com/article/man-that-accused-governor-gibbons-arrested 3/8/2015

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He is on the docket to be arraigned in a Las Vegas court on August 17th. He has not
responded to e-mails or phone calls seeking a comment. Montgomery is a former chief
technical officer for the Reno-based software company e Treppid. E Treppid is a company
who has won military contracts for video compression and target recognition software.
During Gibbons reelection bid back in 2006, Montgomery accused the governor of
accepting bribes from e Treppid, to help them secure the military contracts they were then
awarded. Court papers showed that he alleged the governor took $100,000 worth of
casino chips and cash during a week long cruise in the Caribbean.
Later in 2007, the FBI opened an investigation into the bribe allegations. The Department of
Justice also investigated the allegations and subsequently cleared the governor of any
wrong doing. Reports of Montgomery having a gambling problem first surfaced back in
2006, after the federal government and the United States Air Force began investigating him
as part of an investigation they were doing into economic espionage and intellectual
property claims.
Warren Trepp, who is Montgomery's former business partner, told authorities back in 2006
that Montgomery borrowed somewhere north of $1.3 million. The money was in part to pay
off casino debts Montgomery had incurred in the amount of $300,000. This is according to
OSI, the Air Force's Office of Special Investigations. When Tripp made the allegations
against Montgomery, the two were locked in a dispute over the ownership of e Treppid
software that was being used by the military.
E Treppid was awarded a no-contract bid for a maximum value of $30 million dollars for

http://www.examiner.com/article/man-that-accused-governor-gibbons-arrested 3/8/2015

Man that accused Governor Gibbons arrested - Henderson Clark County Li... Page 3 of 3
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Ruben Sarmiento

Clark County Liberal Examiner

2006-2015 AXS Digital Group LLC d/b/a Examiner.com

http://www.examiner.com/article/man-that-accused-governor-gibbons-arrested 3/8/2015

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news.com.au

Technology

Playboy undercover with Dennis


Montgomery, who 'fooled CIA over Al-Jazeera
codes'

Man claims to have conned CIA


Claimed mesages hidden in Al-Jazeera
Report contained in Playboy expose
PEOPLE who say they read Playboy magazine for the articles might be telling the truth, after it published
an account of an elaborate scam that had the CIA believing Al-Jazeera was sending coded messages for
Al-Qaeda.
The con artist convinced the CIA and other US agencies that he could decode secret messages sent by alQaeda through Al-Jazeera broadcasts in 2003, Playboy magazine reported.
Duped by claims that "bar codes" on Al-Jazeera television contained targeting information for al-Qaeda attacks,
former president George W. Bush's administration raised the terror alert and cancelled several transatlantic
flights in December 2003, the report said, citing former CIA officials.
The swindler at the centre of the scam was Dennis Montgomery, head of a small software company in Reno,
Nevada.
He persuaded the Central Intelligence Agency and the Department of Homeland Security that his technology
could decipher messages with flight numbers and longitudes and latitudes meant for al-Qaeda operatives.
With assistance from French intelligence, CIA officials eventually concluded there were no secret messages in
Al-Jazeera television broadcasts, said the report, published in the magazine's latest edition.
"A branch of the French intelligence services helped convince the Americans that the bar codes were fake," it
said.
CIA and French officials asked another technology company to find or re-create codes from Al-Jazeera
transmissions and "found definitively that what Montgomery claimed was there was not," it said.
But even after the CIA stopped cooperating with Mr Montgomery, he succeeded in convincing other government
agencies that he had valuable code-breaking technology.
In January 2009, he signed a $US3 million ($3.39 million) research contract with the US Air Force, according to

http://www.news.com.au/technology/playboy-goes-undercover-with-dennis-... 3/8/2015

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Playboy.
"We were testing some of the software. We were just looking at it to see if there was anything there," Joseph
Liberatore, an Air Force program manager, told the magazine.
Mr Montgomery has faced a number of lawsuits and last year was charged with bouncing nine checks worth a
total of one million dollars in Las Vegas.
Playboy ran the story online with a gallery of "military-themed nude pictorials".
- with AFP

http://www.news.com.au/technology/playboy-goes-undercover-with-dennis-... 3/8/2015

Software fraudster 'fooled CIA' into terror alert The Register

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Software fraudster 'fooled CIA' into terror alert

Security

Spooks 'f*cking livid'

Related topics

24 Dec 2009 at 11:58, Christopher Williams

Nsa, Cryptography, Cia

98

63

A con man fooled US spooks into grounding international flights by selling them "technology" to decode
al-Qaeda messages hidden in TV broadcasts, it's claimed.
A long and highly entertaining Playboy article explains that in 2003, 50-year-old Dennis Montgomery was
chief technology officer at Reno, Nevada-based eTreppid Technologies. The firm began as a video
compression developer, but Montgomery took it in new and bizarre directions.
He reportedly convinced the CIA that he had software that could detect and decrypt "barcodes" in
broadcasts by Al Jazeera, the Qatari news station.
The Company was apparently impressed enough to set up its own secure room at the firm to do what
Montgomery called "noise filtering". He somehow produced "reams of data" consisting of geographic
coordinates and flight numbers.
In December 2003, it's claimed CIA director George Tenet was sufficiently sold on Montgomery's data to
ground transatlantic flights, deploy heavily armed police on the streets of Manhattan and evacuate 5,000
people from the Metropolitan Museum of Art.
Homeland Security secretary Tom Ridge told the press the terror alert was the result of "credible sources
- about near-term attacks that could either rival or exceed what we experienced on September 11".
In fact, according to evidence from his former lawyer, Montgomery, the "credible source", was a "habitual
liar engaged in fraud".
Montgomery worked with the CIA's Directorate of Science and Technology - its Q Branch - engaged in
exotic research and intelligence gathering. According to Playboy, one counter-intelligence official briefed
on the programme said: "We were fucking livid. I was told to shut up. I was saying, 'This is crazy. This is
embarrassing.'"
Eventually a branch of French intelligence helped the CIA prove that the Al Jazeera "messages" never
existed. Files were handed over to counter-intelligence to investigate the scam.
The FBI uncovered a series of frauds by Montgomery, who was a compulsive gambler. As well as his
"noise filtering" technology, he had rigged video software to convince officials it could detect weapons.
Following a dispute with eTreppid's financial backer, Montgomery took off with his "technology" and tried
to win more government contracts alone. By now though, the officials he was trying to sell to were part of
the FBI investigation. It reportedly "went nowhere", however.
By 2008, the financial dispute had come to court. Montgomery said he was still doing classified
government work, for $3m. In June this year however, his gambling led to personal bankruptcy, listing his
still-classified "technology" as a $10m asset.

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http://www.theregister.co.uk/2009/12/24/cia_montgomery/

3/8/2015

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I ain't afraid of no GHOST securo-bods

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Phoenix - News - Valley Fever - Print Version

Page 1 of 11

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Joe Arpaio's Investigating Federal Judge G.


Murray Snow, DOJ, Sources Say, and Using
a Seattle Scammer To Do It
By Stephen Lemons
Published Wed., Jun. 4 2014 at 1:18 PM

AP Photo/Matt York

Sheriff Joe Arpaio, during a 2012 press conference about his ludicrous birther investigation

The most
revealing part
of Phoenix
filmmaker
Randy
Murray's
recent
documentary
The Joe Show
was a strategy
meeting during
Sheriff Joe
Arpaio's 2012
re-election
campaign that
included
Arpaio, his top
flack, Lisa
Allen, Chief
Deputy Jerry
Sheridan, and
campaign
manager Chad

Willems.
The group huddled in the back of a Fountain Hills restaurant to discuss how to spin
Joe's negatives -- the misspending of more than $100 million, the deaths in the jails,
the scores of millions in lawsuit payouts -- for the public.

http://blogs.phoenixnewtimes.com/valleyfever/2014/06/joe-arpaio-investiga... 3/12/2015

Phoenix - News - Valley Fever - Print Version

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At some point, Arpaio's "birther" investigation came up. You know, the one in which
President Barack Obama's birth certificate gets investigated by both the Maricopa
County Sheriff's Office's Cold Case Posse, a nonprofit organization, and MCSO Deputy
Brian Mackiewicz, whom Arpaio flew to Hawaii as part of this snipe hunt, at a cost of
nearly $10,000 to taxpayers.
Arpaio's March 2012 press conference -- in which the sheriff and the Cold Case Posse's
"lead investigator," ex-used-car salesman Mike Zullo, declared Obama's birth certificate
to be a forgery -- was in the planning stage when the scene was filmed.
At the mere mention of the birther investigation and the future press event, Allen and
Willems practically rolled their eyes.
Willems called the birther probe "nuts."
Allen said the sheriff might as well go the press conference "in big ol' clown shoes."
Arpaio shrugged, literally.
"There ain't gonna be no damage control," Arpaio promised Willems. "You'll get more
money [in campaign contributions] than you'll know what to do with."
Wilier than the cartoon coyote, Arpaio had tapped into a nationwide right-wing antigovernment, anti-Obama feeding frenzy with his birther probe and with his tirades
against the U.S. Department of Justice, which was investigating him for abuse of power
and other issues and is now suing him in federal court.
"The DOJ is a hot item everywhere," Joe told his flunkies.
See, whenever Arpaio's never-ending political campaign sends out an e-mail blast
begging for loot from Obama-haters, it reels in contributions from retired, far-right
ofays all over the country.
Willems essentially admitted as much in another scene from the film.
"Now, with Arpaio going to battle with Barack Obama," Willems said, "it's meant
literally millions of dollars for his campaign."
As everybody knows, Arpaio was re-elected in 2012, but the investigation into Obama's
birth certificate continues apace, according to both Arpaio and Cold Case Posse
"commander" Zullo.
At the beginning of May, Arpaio mentioned the birther probe during a speech before a
group of Silicon Valley conservatives.

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Around the same time, he appeared on The Right Side, a conservative cable-access
show in Mountain View, California. He told host Chris Pareja that the inquiry into
Obama's birth certificate was going strong.
"I'm not done with that yet," Arpaio insisted. "People think I surrendered. No . . . I'm
trying to find out who's behind it now. That's the key. You can always have a crime to
investigate, but I think you would like to know who did it."
The sheriff said he was after whoever created this "forged, fraudulent document,"
meaning a computer scan of the president's long-form birth certificate, released by the
White House in April 2011.
Arpaio's statements have paralleled assurances from Zullo during periodic interviews
with Florida pastor/radio host Carl Gallups that new revelations concerning the Obama
birth certificate are on the way.
Critics of birthers regularly mock Zullo's vague pronouncements on Gallups' show as
never resulting in any "new" finds.
Why, even the information disclosed during Arpaio's two birther-themed press
conferences in 2012 were a rehash of debunked conspiracy theories.
But during a February interview with Gallups, Zullo caused an Internet kerfuffle when
he told Gallups' audience that there were now two investigations: the original birther
one and an offshoot of the birther probe, this one a criminal investigation.
Moreover, the second investigation was using two MCSO detectives and, presumably,
county money.
"I don't know how this is all going to play out," Zullo said. "I know that [in] the criminal
investigation that we're working on now, Sheriff Arpaio has dedicated resources and
two full-time Maricopa County Sheriff's Office detectives."
He added, "These are seasoned pros [who] are working this. These are the guys that go
hunt down the really bad guys."
Zullo promised to release "universe-shattering" results of these investigations in March,
a deadline Zullo since has extended indefinitely.
Blogger Mitch Martinson of arizonaspolitics.com was the first to query the MCSO on
Zullo's claim, and the first to report that Sheriff's Office spokesman Brandon Jones
kinda-sorta had confirmed it.

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"We have two sheriff's detectives assigned to look into other issues surrounding the
birth certificate," Jones told Martinson, in a blog item posted February 10. "However,
they are not investigating the birth certificate issue itself."
Later, Jones walked back his comments to Martinson, sending the blogger an e-mail,
which Martinson used in a screen shot to a follow-up post.
"Mitch, I was misinformed," Jones stated. "The detectives are not working on anything
regarding the birth certificate. Not even surrounding. Mr. Zullo was incorrect: They are
working on other serious cases not even related."
Who were these two detectives, what were they up to, and why is Zullo, a mere posse
member, privy to it?
Based on information given to me by longtime sources, the two detectives mentioned
are Brian Mackiewicz, the same deputy who made a taxpayer-funded run to Hawaii in
May 2012, and Sergeant Travis Anglin, once a lieutenant with the notorious Maricopa
Anti-Corruption Effort who was demoted after an MCSO investigation into his private
security company and its use of MCSO detectives.

Riverside County Sheriff's Department

Dennis Montgomery, in a mugshot from a 2009 arrest

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My sources -- one of whom is a former detective with the MCSO's Special Investigations
Division and is well-acquainted with SID and those in it -- say Anglin and Mackiewicz
were involved in an odd investigation dating back to October 2013.
Moreover, they say, the deputies have used as a confidential informant a notorious
scammer in the Seattle area.
What have they been investigating? According to my sources, Mackiewicz, Anglin, and
the informant are focused on U.S. District Court Judge G. Murray Snow, the Justice
Department, and a bizarre conspiracy theory that the DOJ and Snow have conspired to
somehow "get" Joe Arpaio.
The person who purportedly convinced Arapio of this paranoid fantasy, the sources say,
is computer fraudster Dennis L. Montgomery, the subject of a 2010 Playboy expos
titled "The Man Who Conned the Pentagon."
In that article, investigative reporter Aram Roston detailed how, in the wake of the 9/11
attacks, Montgomery snookered the CIA, the White House, the Department of
Homeland Security, and the Air Force into believing he had software that could decode
secret messages to terrorists, supposedly embedded in broadcasts of the Al Jazeera
Media Network.
As crazy as this now sounds, Roston, using unsealed court documents, reported that
eTreppid Technologies, the Nevada software company Montgomery co-owned, scored
multimillion-dollar contracts for computer software touted by Montgomery.
In fact, Roston wrote, the United States went to Code Orange, the DHS' second-highest
terror alert, in 2003 based on data supplied to the CIA by Montgomery.
International flights were delayed, sometimes canceled, because of Montgomery's work.
Based on Montgomery's "intelligence gathering," Homeland Security Secretary Tom
Ridge told reporters at the time about the threat of "near-term attacks" that could "rival
or exceed" those of 9/11.
"Montgomery calls the work he was doing noise filtering," Roston wrote. "He was
churning out reams of data he called output. It consisted of latitudes and longitudes
and flight numbers."
This data was given to then-CIA Director George Tenet, according to Roston, and
"eventually ended up in the White House."
There was one big problem, Roston reported: "The communications Montgomery said
he was decrypting apparently didn't exist."

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Roston wrote that Montgomery's eTreppid colleagues questioned his computer skills.
Company employees also claimed that Montgomery had faked demonstrations of
weapons-recognition software for representatives of the U.S. military.
With the help of a "branch of the French intelligence services," the CIA finally got wise
to Montgomery, realizing that there were no secret messages to bad guys in the Al
Jazeera broadcasts.
Montgomery left eTreppid, wrote Roston, and went on to work for software companies
backed by a wealthy heiress; to accuse Nevada Governor Jim Gibbons of taking a bribe
(Gibbons later was cleared of wrongdoing); to lose big at a Rancho Mirage, California
casino ($422,000 in one day); and to declare bankruptcy.
Now, Montgomery lives in Yarrow Point, Washington, a short drive from downtown
Seattle.
My sources report that MCSO detectives Anglin and Mackiewicz have spent a lot of time
this year in Seattle with Montgomery, who, the sources say, has convinced the sheriff
that he has information suggesting an anti-Arpaio conspiracy between Judge Snow and
the DOJ.
These sources say there is no report number assigned to the case, that Arpaio himself is
running it, and that the investigation has been financed with funds for confidential
informants, RICO funds.
Montgomery has been assigned a "confidential informant number" or "control
number," the identity of which is known only to Arpaio, a few MCSO brass, and those in
Special Investigations, according to my sources, who claim Montgomery has been paid
about $100,000 to date by the MCSO.
The situation gives Arpaio and the MCSO a degree of deniability because the
department is allowed to keep the identities of confidential informants secret in most
instances.
Though there should be MCSO paperwork associated with such payments, it would
show a payment to a control number, not a name.
The MCSO's official policy on "informant management" states that control numbers
must be maintained in a confidential-informant log "monitored by the [Special
Investigations Division] commander or his designee."
It further states that all informant files be kept in a "secured area within the SID."
The policy notes that the MCSO "will protect these sources through all available and
reasonable legal means."

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Such "informant files" are retained as "permanent records" of SID, "unless the division
commander determines that the records may be purged."
My sources say Mackiewicz has received, to date, $50,000 in overtime pay and Zullo
has gotten about $5,000 in payments.
Zullo's role is unclear, though he currently is involved in the investigation, according to
these sources, as well as the perpetual birther probe.
Additionally, they say the MCSO made about a $50,000 purchase of computer
equipment for Montgomery sometime this year from a store in Washington state.
According to the MCSO's policy regarding "Undercover and Investigative Funds
Accountability," an expenditure of up to $6,000 for undercover and investigative work
can be approved by a division commander.
Anything over $6,000 must be approved by a bureau commander.
As for funds specifically paid to confidential informants, the reins are even tighter.
Payments to a CI of more than $300 must be approved by a division commander "prior
to the expenditure of the funds," according to the MCSO's informant-management
policy.
The amount of money involved in detectives Anglin and Mackeiwicz's Seattle quest has
raised red flags with MCSO accountants, I've been told.
These same MCSO accountants reportedly have expressed concern internally about the
procurement of the computer equipment, excessive CI payments, the amount of
overtime involved, and the money spent on airfare and stays in Seattle.
In several broadly worded public-records requests sent to the MCSO in February, I
asked for any and all e-mails traded among the players involved, as well as any and all
records regarding MCSO employees' trips to Seattle, payments of informant funds to
Dennis Montgomery, and Mackiewicz's overtime requests.
In each case, I was advised by MCSO spokesman Jones that "this is an ongoing
investigation . . . no records can be released at this time."
In March, I called Zullo at his home phone number. I asked him about the work he was
said to be doing with Montgomery.
He claimed not to know what I was talking about. When I pressed him, he said all such
inquiries should go through the MCSO.

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"I have no comment to make, especially to the New Times," he told me before hanging
up.
The opportunity to question Arpaio about the Montgomery caper came as he munched
on cheese at a recent fundraiser for embattled Arizona Attorney General Tom Horne at
the University Club in Phoenix.
I asked the sheriff about Montgomery and the work that my sources tell me he has done
for the MCSO.
At first, he played dumb, asking if I meant County Attorney Bill Montgomery.
"No, Dennis Montgomery," I replied. "The computer guy in Seattle who is helping you
investigate Judge Snow and the DOJ. You are investigating Snow and the DOJ, aren't
you?"
As he hit the cheese platter again, Arpaio looked over his shoulder at me with a grin.
But he said nothing.
I kept after him, asking why deputies Mackiewicz and Anglin had spent so much time in
Seattle.
"I dunno, maybe they like the weather up there," he said over his shoulder, "or the snow
crab."
True to form, the sheriff was cagey, but there was no denial.
The ex-Special Investigations source I know tells me that the joke around Arpaio's
office is that Montgomery's referred to as "Snowden," after Edward Snowden, the
American computer geek responsible for a massive 2013 leak of classified documents
from the National Security Agency that exposed Orwellian surveillance programs run
by the U.S. government.
"[Montgomery] says he worked for the CIA on a project called Hammer [and] collected
data similar to Snowden's," the source says. "[Montgomery] claims he can prove there
was a conspiracy between [U.S. Attorney General] Eric Holder and Judge Snow . . . a
conspiracy against Arpaio."
Montgomery, who is middle-aged and stocky with a shock of white hair, is no Snowden.
Whatever you think of Snowden, at least the information he released generally has been
confirmed as legitimate.
As with the gibberish Montgomery reportedly gave the CIA in the early 2000s, he has,
according to my sources, produced many printouts for the MCSO that seem off point,
with dates going back to 1999 and earlier.

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Obviously, that's long before Arpaio took up the cause of illegal immigration, long
before he was investigated or sued by the DOJ, and long before he became the subject
of the ACLU's big racial profiling lawsuit Melendres v. Arpaio.
One source informs me that at least one underling told Arpaio recently that what
Montgomery provided the MCSO is worthless, that Joe is getting played -- which
caused the sheriff to erupt into a fit of anger.
When Montgomery was approached by a freelance reporter on behalf of New Times in
April, he was nonplussed.
Montgomery came to the door of his Yarrow Point home, a cell phone at his ear, talking
to someone about computer equipment.
The reporter identified himself, and Montgomery asked for a card, which the reporter
presented.
"I really don't wanna talk to you," Montgomery said, ending his call.
"Okay, about Phoenix . . .," the reporter began.
"No comment," Montgomery shot back.
"Arizona . . .," the reporter started again.
"No comment," Montgomery repeated. "Who sent you up here?"
"Phoenix New Times," the reporter explained.
"Yeah," growled Montgomery.
"Have you done any work for Joe Arpaio?" the reporter asked.
"I, I, I have no comment," Montgomery said, moving away. "I'll call you later. I'll think
about it."
Montgomery went back into his house and shut the door, ending the conversation on a
mysterious note.As with Arpaio, there was no denial.
Is Dennis Montgomery Joe Arpaio's Snowden? I cannot say absolutely.
But it's not far-fetched to think that Arpaio would investigate any powerful public
official. He continues to investigate the president. He and now-disbarred former
County Attorney Andrew Thomas investigated Superior Court judges perceived to be
thwarting their anti-undocumented-immigrant policies.

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That is, it fits a pattern cultivated over his reign of more than 20 years.
Among Arpaio's bogus investigations have been:
One targeting former Arizona Attorney General Terry Goddard for alleged bribery.
The probe began in 2007 and didn't seem to end until Goddard left office.
One that brought the 2008 indictment of then-county Supervisor Don Stapley on 118
criminal counts related to his allegedly not properly disclosing sources of income. All
counts were dismissed ultimately.
An infamous December 2009 RICO suit brought by Arpaio and Thomas against the
entire Board of Supervisors, various county employees and certain Superior Court
judges. Supposedly, they all were part of a conspiracy involving the county's new court
tower. The suit was a disaster that finally got dismissed by Thomas himself.
A probe resulting in the filing of false bribery charges in 2009 against former Superior
Court Judge Gary Donahoe. Arpaio and Thomas ginned up these charges as retaliation
against Donahoe for adverse rulings and to make Donahoe vacate a hearing that Arpaio
and Thomas didn't want to take place.
And now Judge Snow, who in 2013 found the MCSO guilty of racial profiling and
assigned a monitor to make certain that Arpaio was obeying court orders on reforming
and re-educating deputies so that the agency does not profile Latinos or any other
minority again?
As for Holder, the DOJ remains engaged in a lawsuit accusing Arpaio of abuse of power
and prejudiced policing.
At age 82, the sheriff faces the ignominy of ending his law enforcement career as a
disgraced political colossus.
All -- in his mind -- because of Snow and the DOJ.
Why not attempt an investigation aimed at discrediting his perceived nemeses?
Though there never will be any pink handcuffs in Snow's or Holder's future, Arpaio's
racist, wing-nut supporters would consider it an act of bravery that their hero is
investigating federal officials getting in the way of keeping despised Latinos in their
place.
Meaning more money in the sheriff's perpetual re-election kitty and proving that bogus
investigations continue to pay off.

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My dream, of course, is that Snow blows a gasket and perp-walks the aged autocrat.
We'll see.
Rick Anderson in Seattle contributed to this story.

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SUBSCRIBE

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A PROGRAMMER WHO

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POINT OF VIEW

Here's How the US Should Fight ISIS With Social Media


3 HOURS

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Hillary Clinton Says Her Email Was Secure; She Can't Know
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Email Was
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1 DAY

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Report: CIA Has Tried for Years to Break Into Apple Gear
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Googlers' Epic Hack Exploits How Memory Leaks Electricity


2 DAYS

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CYBERSECURITY

Cyberespionage Is a Top Priority for CIA's New Directorate


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EXHIBIT 19

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EXHIBIT 20

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Michael J. Flynn, Admitted Pro Hac Vice


One Central Plaza, Suite 240
Boston, MA 02108
Telephone: 858-775-7624
Facsimile: 858-759-0711
Email: mike@mjfesq.com
Attorney for Timothy Blixseth
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MONTANA
In re:

Case No. 08-61570-11


)

Yellowstone Mountain Club, LLC, )


et al.,

)
)
Debtors.
)
_________________________________________________________________
AFFIDAVIT OF MICHAEL J. FLYNN
__________________________________________________________________

I, Michael J. Flynn depose and state that I have personal knowledge of the facts
contained in this affidavit, unless stated to be based upon information and belief. Where facts
are stated to be based on information and belief, I believe them to be true and accurate to the best
of my knowledge.
1. I am an attorney licensed in Massachusetts appearing in this matter pro hac vice on
behalf of Timothy Blixseth.
2. Attached hereto as Exhibit 1 is a true and correct copy of a financial statement of
Edra Blixseth dated August 15, 2008, two days after CIP Yellowstone Lending, LLC, (CIP
YC) loaned Edra Blixseth $35 Million Dollars (the Predatory Loan) on August 13, 2008
represented by two 48 day promissory notes secured by Community assets she received from

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the Blixseth Marital Settlement Agreement (MSA) on August 13, 2008. The secured
Community assets are Porcupine Creek, (PC), and the Family Compound at the
Yellowstone Club, (YC). I first received Exhibit 1 from Gary Peters shortly before the
commencement of phase 1 of the AP 14 trial. I am informed and believe that this document
was subsequently recovered from the Edra Blixseth computers in the possession of Jory Russell,
(hereinafter the Russell computers). On said financial statement, Edra Blixseth (EB) records
the current market value of PC to be $207 M; the Family Compound at $40 M; Farcheville
at $63 M; and the YC to be $500 M, for a total of $ 810 M.

EB states that except for the

Family Compound these assets are owned by BGI. EB states her Net Worth, based on her
sole ownership of BGI, on Exhibit 1 as $849.5 M, and her projected net cash flow for 12
months at $40. 4 M, derived from PC, YC, Big Springs Realty, Blixware and BFI
revenues. As hereinafter recited, I believe that Exhibit 1 may be based, in part, both on the
control exercised by SB and his entities based on the Predatory Loan; and the lending
advisory control exercised by SB in the planning and implementation of the Predatory Loan.
3. Attached hereto as Exhibit 2 is a true and correct copy of a Post -Settlement
financial statement dated July 15, 2008. I am informed and believe that Exhibit 2 was recovered
from the Russell computers and that the Post-Settlement reference relates to EBs financial
status after the scheduled closing on the MSA based on the division of marital Community assets
based on the executed MSA on June 26, 2008, which closing was originally scheduled for July
3. 2008; and which closed on August 13, 2008. I am informed and believe based upon emails
recovered from the Russell computers that Exhibit 2 or a similar financial statement was given to
Samuel Byrne (SB), and or Cross Harbor Capital Partners, (CHC), and / or CIP YC, before,

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on, or after July 15, 2008. I believe based on recovered documents from the Russell computers,
and inferences derived from said documents that there are deleted or destroyed documents from
the Russell computers that may be in the possession of SB or his entities, CIP YC and CHC; and
that said deleted documents may relate to Exhibit 2, or a similar version thereof, as part of the
Deal between EB and SB to use the $35 M Predatory Loan to plan, implement and transfer
control of the YC to SB and CHC. Exhibit 2 states an EB Net Worth of $1.3 B based on a
YC value of $900 M. I believe that the $900 M Post- Settlement value on the YC may be
based on the Total Net Value Credit Suisse appraisal method, previously condemned by the
court in its Interim Order.

4.

Attached as Exhibit 3 is a Discussion Memo between Edra/YC Entities and

Cross Harbor Capital Partners dated August 1, 2008, approximately two weeks before the MSA
and Predatory Loan closing. Exhibit 3 states on p. 3 that CHC has RECEIVED All divorce
settlement related documents; required Detailed, updated financial statements for EB (the
inference is that EB had previously provided financial statements and updates were needed);
required All underwriting materials provided to PEM, Archer and other Potential Sources of
Capital establishing that CHC required complete and thorough knowledge and possession of
All documents relating to EBs financial status based on her submissions to other lenders (the inference, coupled with several emails, is that Exhibit 2 had been submitted to other lenders
and was also possessed by CHC before the closing). Significantly, CHC required full
recognition of its existing rights through the execution of the previously agreed upon Letter
Agreement. I am informed and believe that said Letter Agreement has not been recovered

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from the Russell computers and remains concealed or destroyed. Exhibit 3 states on p. 4 that
CH Will control distributions of YC working capital. This establishes SB control over
the YC as a component of the Predatory Loan. Exhibit 3 also establishes SB and his entities
assumption of a position as a Lending Advisor to EB as contained in numerous statements in
their Discussion including: (i) who, why, the amount, and how to Secure additional financing
from Archer Capital Management ($55.1MM,net) and how it gets paid; (ii) the sale of
Farcheville and to whom and how to distribute the proceeds and make Additional EB
Investment directly into YC with the CH estimates to cover current accounts payable and
projected operations through 10/31/2008"; and the planning of a YC Preferred Equity Offering
and YC Governance based on a detailed joint venture essentially controlled by SB and his
entities with detailed provisions subsequently contained in the Agreement to Form. Exhibit 3
states that based upon the SB and CHC analysis, planning, and implementation control
mechanisms, early stage analysis indicates future net cash flow to EB of $600 + MM.
The compelling inference, particularly based upon the last representations of CHC is that SB /
CHC were using their insider Predatory Loan position as of August 1, 2008 to take
complete control of YC with full knowledge of EBs financial position, and representing a $600
M net cash flow to EB in order to obtain control. I am informed and believe that based upon
existing case law, and related facts inferred from existing emails and documents recovered from
the Russell computers, that documents remain concealed or destroyed relating to said
representations by CHC; and that SB and CHC made said representations, specifically the $600
M net cash flow to EB, based upon concealed and / or destroyed documents with knowledge
of EBs financial status based upon her liabilities disclosed in Exhibits 1 and 2; and contained in

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the UNDERWRITING MATERIALS referenced in Exhibit 3. I am further informed and


believe that most of the emails between CHC lawyers and EB lawyers have not been found on
the Russell computers. I am further informed and believed that based upon recovered
emails and documents the Letter Agreement referenced in Exhibit 3 was analyzed by
EBs lawyers in the context of mutual releases between EB, the YC and CHC, Said emails
and releases have not been produced to Tim Blixseth.
5.

Attached as Exhibit 4 is an email chain between EBs consultant Jim Goldfarb, Jory

Russell and EB lawyers from the Liner law firm handling the Predatory Loan transaction,
stating that as of July 21, 2008, ten days before the creation of Exhibit 3, CHC was able to
exercise control over EBs lending status with PEM through the CHC mortgage on the
Family Compound, which is not reflected on the July 15, 2008 financial statement prepared with
Goldfarb and Liner just six days before. The only lien listed is LeMond. According to Exhibit
1, after the closing on August 13, 2008, CHC owned a first mortgage ($13 M), LeMond a second
($13.5 M) and CHC a third ($22 M) for a total of $48.5 M on the Family Compound then valued
at $40 M. The inferences are that there exist emails between either the Liner lawyers and / or
Goldfarb on the one hand, and the SB lawyers on the other, during the period between June,
2007 - the date of the LOI to sell the YC to SB and the present, particularly in the summer of
2008, which emails have not been recovered - or produced before phase 1 of the trial.
6. Attached as Exhibit 5 is a internal MEMORANDUM dated September 5, 2008,
by and among SB and CHC principals and lawyers, circulated just weeks after the CHC
Predatory Loan, based on an analysis of the Credit Suisse Predatory Loan, and inferring that
said analysis predated the CHC Predatory Loan, based upon other emails and documents.

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Significantly, the MEMORANDUM is dated just 4 days after EB had already defaulted on
September 1, 2008 on an interest payment inserted into the Predatory Loan thereby causing an
almost contemporaneous event of default on the promissory note and deed of trust. Exhibit 5
contains graphs planning and implementing total control over the YC and EB based on her
already defaulted loan status; but more importantly its control is based on their pre-planned
default" of YC under the Credit Suisse loan by making their Predatory Loan to transfer control
and ownership from Tim Blixseth to EB.

Paragraph number 2 on page 3 of Exhibit 3 states:

Restrictions on Change of Control (Sections 5.19) That Section refers to the Credit Suisse
Predatory Loan requiring that BGI or Tim Blixseth must at all times directly or indirectly
control the YC; and own, directly or indirectly, 51 % of the YC , and then references a
proposed Executive Committee controlled by CHC as being a breach of the Credit Suisse loan.
Exhibit 5 then states: Note that while the 51% ownership test will be met as to YC and YD,
this is not the case now with respect to Big Sky Ridge, LLC. I believe that the effect of CHCs
own analysis is an admission that CHC knew when it made its Predatory Loan to EB it was
creating a default on the Credit Suisse loan permitting it to put the YC into bankruptcy; and
CHC knew that EBs financial status was such based on Exhibits 1-3 and subsequent Exhibits
herein that she would default as of September 1, 2008 thereby obtaining complete control over
the YC. Mr. Blixseth requires the production pursuant to his subpoena to CHC and SB of all
emails and documents relating to Exhibit 5.
7. Attached as Exhibit 6 is the loan closing document reflecting complete control by
CHC of the use of virtually all of the Predatory Loan proceeds.

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8.

Attached as Exhibit 7 is an email chain between EB, and SB and others, starting on

March 11, 2008, just two weeks before SB terminated the YC sale on March 26, 2008, and
while EB had her agent Gary Peters were negotiating with SB to make their own deal with SB.
EB writes: Thanks so much for the follow-up. I will wait to hear from you what you come up
with both in regard to your (and group) interest in moving forward on something and/or
CrossHarbor/Sam. The March 25, 2008 email between TB and SB references SBs bankruptcy
plan. The Harris, Arenson, Kidd email dated October 15, 2008, a month before the YC
bankruptcy filing demonstrates CHC control with its agent, DLC, based on DLCs plan. Two
days later, SB tells his agent, Joseph Harris that SB is going to write the plan tonight to solve
the entire YC debacle. It could be brilliant. Harris then says it is possibly evil and it could be
worth over a billion dollars....I hope it includes the dip and filing by Friday. There are no
emails and documents in which Byrne sent the evil plan. Just 4 days before said emails, on
October 21, Chris Wright, a present member of the ad hoc Committee, having votes on the
Liquidating Trust, emailed EB stating But right now we arent even mentioning bankruptcy or
a DIP loan. Upon information and belief, I believe said not mentioning refers to a plan
between CHC and SB not to disclose to the members the planned bankruptcy reflecting control
over all aspects of the planned filing by CHC; and the complete relinquishment by EB who
states: thats a good point....i dont care you all decide the when of this. Based on this email
chain and other emails referencing emails that have been destroyed or concealed, including the
unproduced Letter Agreement referenced in Exhibit 3 hereto, I believe that both SB and CHC
are in possession of emails and documents relating to a separate deal between EB and SB and
CHC which occurred between March 11, 2008 and the CHC Predatory Loan. The compelling

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inference is that EB gave up control and ultimately ownership to SB and CHC of over $700 M in
assets based on the values in Exhibit 1 of the YC and PC for a Predatory Loan of $35 Million
Dollars. In addition to the $600M net cash flow to EB representations made in Exhibit 3, the
compelling inference is that Samuel T. Byrne made undisclosed promises to EB for her to
forfeit over $650 Million Dollars of Blixseth marital Community assets.
9. Attached as Exhibits 8 through 11 are true copies of emails representing just a
sampling of numerous emails containing evidence that: (a) EB planned to falsely accuse Tim
Blixseth, and hit him from all sides and obtain control of the YC in violation of Los Angeles
Superior Court Orders now merged into the final judgment of divorce; (b) EB and SB
misleading the B shareholders; (c) an email with an unrecovered attachment with EB stating
never tell that I am sending you all this as part of EBs interference with Los Angeles Superior
Court orders now merged into the final judgment of divorce. To my knowledge we have not
recovered the missing attachment. These issues relating to bad faith collusion between EB and
SB are now on appeal.
10.

Attached as Exhibit 12 is an email whereby Byrne and DLC are agreeing that EB

committed perjury before this court regarding issues relating to CHC and DLC control of the
YC.

As seen above in Exhibits 1 - 3, SB and CHC did in fact obtain control over the YC

through the SB Predatory Loan; and thus, SB and DLC knew she was committing perjury in
order to have this Court approve their bankruptcy plan including the Liquidating Trust to sue
Tim Blixseth.

SBs knowledge of said post petition perjury by EB involves issues relating to

bad faith and exculpation, and Tim Blixseths rights to cross-claim against SB, CHC and
Credit Suisse, al of which issues are now on appeal.

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11.

Attached as exhibit 13 is an email EB sent to Gary Peters, My Guy, to negotiate

and make a separate deal with SB on March 21, 2008, five days before SB terminated the YC
sale, and in violation of Los Angeles Superior Court Orders and in contradiction of her sworn
testimony to said Court on that same date that she was not interfering with the sale. These issues
are now on appeal relating to SB exculpation and bad faith.
12.

Attached as Exhibits 14 and 15 are two fabricated Grand Jury Target Letters.

Upon information and belief, these letters were fabricated by Dennis Montgomery acting in
collusion with his partner, EB; and used by EB with the media and SB after January 15, 2008,
the date the YC sales contract was signed. They were used by EB to interfere with and
ultimately to kill the YC sale in violation of Los Angeles Superior Court Orders, now merged
into the Final Judgment.
13.

Upon information and belief, the following facts and events contained in the

following chronology are true. This chronology relates to the Target Letters and how they
were used to interfere with the YC sale by TB to SB. The chronology also relates to the EB and
Dennis Montgomery relationship and how that relationship impacts the current case issues,
including the computer hacking by Montgomery into Tim Blixseths and Michael Flynns
computers throughout these proceedings thereby interfering with the attorney client relationship
warranting dismissal of all of the claims against Tim Blixseth. This Court previously denied said
motion but new evidence is emerging relating to said computer hacking. Finally, the
chronology relates to the pattern of fraudulent loans procured by Edra Blixseth to finance a plan
to obtain control of the YC, including the fraudulent Wachovia loan as it relates to
Montgomerys technology, now publicly exposed as involving a massive fraud on the U.S.

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government. The fraudulent technology is owned by EBs company, Blxware. The Blxware
valuation on EBs financial statements is approximately $22 M. This is fraudulent. Based upon
personal knowledge, and information and belief, Blxware possesses no marketable technology,
the technology as represented does not exist, it was subject to an injunction when EB pledged it
to Wachovia; and Ms. Blixseth knew throughout the period in which she submitted loan
applications and financial statements to the various lenders that the purported Blxware
technology did not exist, and that Montgomery was engaged in computer hacking for her benefit
. EB paid Montgomery almost $6 Million dollars between April, 2006 and February, 2009 for
non-existent technology, which raises the inference that it was paid to perform computer
hacking.
March 1, 2006:

The FBI raided Dennis Montgomerys house searching for certain noise
filtering and compression software and hard drives he took from
eTreppid Technologies, and alleged classified information, involved in
then pending litigation in Reno, NV. Later, in June, 2007, when
Montgomery was subpoenaed to produce certain bribery emails before
a Washington D.C Grand jury, which he claimed proved that Warren
Trepp bribed NV Governor Gibbons, Montgomery took the boxes of
software and hard drives to EBs residence, Porcupine Creek. The
compelling inference is that Montgomery took approximately 23 boxes
filled with hard drives from eTreppid to conceal his fraud on the U.S.
government over the previous several years, because the hard drives may
have proved Montgomerys lack of source codes with respect to

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purported noise filtering technology; and may have contained evidence


as to how Montgomery perpetrated the fraud through hundreds of
parallel web-sites and email addresses he used as part of his computer
hacking scheme. These matters are now at issue in the Nevada litigation.
EB and Montgomery confessed $26.5 M in judgments to avoid, inter alia,
production of the stolen hard drives.
March - April, 2006: EB and Montgomery, and Michael Sandoval concluded a deal for
Montgomery to turn over the software to their new company, Opsprings now Blxware. Edra paid Montgomery approximately $3.8 M including a
$100K per month salary between April 1, 2006 and July 1, 2007; and
continued to pay him $100,000 per month until July, 2008 when they were
concealing the hard drives from the Nevada court. Then, in February,
2009 for non-existent technology and after years of computer hacking,
she made a final pay-off to Montgomery of $753,000. EB also paid
Sandoval, who allegedly knew, according to his chief scientist, that the
technology did not exist; and that Montgomery was a con, approximately
$20 Million dollars. Much of this money came from the Credit Suisse
loan. The evidence supports an inference that EB paid Montgomery to
hack into TBs computers, which has interfered with TBs ability to
defend this case because of their interception of attorney client
communications; and to try to perpetuate the fraud on the U.S.
Government.

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April, 2006 September , 2006:

EB attempted to get the U.S. Gov to buy the software using her purported
political contacts with Cheney and others in the Bush Administration in
order to obtain a government contract. EB isolated Tim Blixseth from the
deal. Cheney and the Bush Admin rejected EB and Montgomery. EB
then planned and implemented a media campaign against Gibbons and
the Republicans through her contacts at the Wall Street Journal and
NBC in order to pressure the Bush White House using Montgomerys
fabrication of two purported bribery emails allegedly evidencing
Warren Trepps bribery of Gibbons to get government contracts. These
are the same media contacts, EB and Montgomery contacted when she
used the fake Grand Jury Target Letters to kill YC sale in March, 2008.
The FBI in DC later concluded (in 2009) that Montgomery fabricated the
emails and dropped the investigation of Gibbons and Trepp. EB
employed the law firm of Skadden Arps to deal with the bribery email
Grand Jury and the required production of the bribery emails. The same
law firm represented Credit Suisse in the Montana bankruptcy
proceedings

September December, 2006:

Montgomery gave the bribery emails and other documents to EBs


contacts at the Wall Street Journal (WSJ) and to Lisa Meyers of NBC.
EB had NBC video tape an interview of Montgomery at Porcupine Creek

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in early November 2006, the weekend before the elections. The WSJ
published a front page article on Nov. 1, 2006 just before November
elections in which Gibbons was running for Nevada governor. The WSJ
later published two more articles based on the alleged bribery using
Montgomery documents. Said evidence supports EBs use of the media to
get what she wants. In March - April, 2008 as supported by the emails
attached hereto, she used the media to attack Tim Blixseth resulting in
damages to the YC.
December, 2006:

EB and Tim Blixseth (TB) separated and filed for divorce. TB


attempted to distance himself from EBs involvement with Montgomery;
and later gave EB the software company, Blxware, as a marital
Community asset, in which the marital Community had invested
approximately 20 million dollars much of which EB received from the
Credit Suisse loan.

January April, 2007:

TB negotiated and planned the sale of Yellowstone Club to Sam Byrne


and Cross Harbor Capitol. EB hired Deborah Klar and the Liner firm to
kill the sale and take over Blixseth Group, Inc., (BGI), the owner of the
Yellowstone Club, (YC). TB also planned the sale of Porcupine Creek
in order to achieve an equal division of Community assets and to pay off
the Credit Suisse loan and other debts.

April, 2007:

EB learned TB had made a tentative deal with Sam Byrne (SB) to sell

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Yellowstone Club. EB and Deborah Klar, a purported bankruptcy


expert, began planning to kill the sale by first filing a law suit to control
BGI. There is evidence in April, 2007 that Montgomery was hacking
into TBs computers and giving information to EB and Klar.
May 1, 2007:

Klar filed a Cal. Civil action and subsequently numerous motions to


effectively take control of BGI, the owner of YC and Porcupine Creek in
order to undermine TBs negotiations with SB. The case was dismissed
and motions denied.

June, 15, 07 August 08:

EB borrowed 13 M from Western Capitol Partners through the Story


Mills project. There is evidence of fraud. While representing to the
lender that she had a separate net worth of almost a billion dollars, and
could pay her debts as they matured, and had never filed bankruptcy, she
was filing sworn, sealed affidavits in the divorce proceedings that she
was millions of dollars in long overdue debt which she was unable to
pay. In fact, EB had previously filed bankruptcy; and her net worth was
based on the total net value appraisal method condemned by the
Montana bankruptcy court.

June 28, 2007:

TB signed Letter of Intent to sell YC bulk assets to Sam Byrne / Cross


Harbor Capital for $470 -510 million dollars. SB began due diligence.

July

2007:

EB through Klar and Jaffee filed motion to enjoin sale of YC claiming


inadequate price and lack of knowledge of sale. The inadequate price was

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based on their sworn affidavits that the YC was appraised at 1.2 Billion.
This was based on the Total Net Value appraisal method. Klar admitted
dealing with LeMonds counsel, who was then suing Tim Blixseth and the
YC. Klar knew LeMonds interests were adverse to the marital
community.
August 14, 2007:

EB / Klars motion to enjoin sale was denied by divorce court judge. EB


was ordered NOT to interfere with sale. There is evidence that EB and
Klar began a scorched earth litigation scheme seeking to have TB
investigated and indicted while cooperating with LeMond; and which
scorched earth scheme was also pursued in the Nevada eTreppid
litigation to conceal the hard drives and crush EBs opponents,
including the affiant. See Nevada Sanctions Order. at 2009 U.S. Dist.
LEXIS 35543 (D. Nev. March 31, 2009).

August November, 2007:

EB borrowed approximately $7 M from American Bank based on


questionable financial statements. (TB has not yet received the American
Bank loan documents which have been delivered to the counsel for the
Liquidating Trust.)

January 15, 2008:

TB and SB signed $455 M contract for sale of YC. SB claimed to have


spent $4 plus M in due diligence.

Jan. 15, 2008March 21, 2008:

During this time frame, SB informed Robert Sumpter that he knew about,

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and /or had seen, and /or had possession of the fake Target Letters.
Sumpter called TB and told him of the SB conversation relative to the fake
target letters. TB immediately called SB and demanded an explanation and
source of the letters. SB initially refused to disclose, and upon being
pressed, stated that EB has read them over the phone to SB. SB told TB
that this was a big problem as he was obligated to advise his lenders which
could kill the deal. SB sought adjustments and reduction in price. SB
advanced plan to put the YC into bankruptcy.
March, 2008:

EB borrowed $5 Mil from Wachovia Bank; and $8 Mil from First Bank &
Trust. The Wachovia loan documents evidence extensive and intentional
fraud including affirmative falsehoods about her involvement in litigation
adversely impacting her financial status. EB also directly concealed the
fact that the collateral she pledged for the loan was in fact subject to a
preliminary injunction in the concealed litigation. EB and her lawyers and
bookkeeper, Jory Russell used financial statements claiming an $800 M
net worth based on the TNV appraisal method while negotiating with
Byrne to put YC into bankruptcy.

March 21, 2008:

EB sent Gary Peters to meet with SB in his Boston office to make a separate
deal while she appeared in divorce court on that very day testifying that she
was not interfering with the sale; and was again ordered not to interfere with
the sale.

March 26, 2008:

SB terminated the YC. Sale. Two days later EB planned a massive media

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campaign and attempted to intervene in the LeMond litigation to oust TB


as Manager of the YC.. They failed BUT YC equity was devastated from
the media campaign, as admitted by SB. There is evidence that EB
orchestrated the media campaign; and submitted false affidavits to the
Montana court to oust TB and obtain control of the YC.
June, 2008:

EB borrowed $3 M more from Wachovia. There is extensive evidence of


fraud, including concealment of litigation in which the security pledged
for the loans was then subject to an injunction. EB rewrote loan with
Western Capitol including fraudulent concealment of litigation. EB
rewrote and increased by $2.5 M the loan with American Bank. There is
evidence of fraud.

March August 13, 2008:

EB and SB negotiated, made and consummated deal to have SB / CHC


loan her $35 M to take over YC in divorce proceedings and transfer
control of YC to SB and CHC. According to Montgomery, EB and SB
made a secret deal for EB to receive $3 M per year for 10 years. In YC
bankruptcy, SB stated under oath that the loan to Edra on Porcupine
Creek and the LeMond payment was unrelated to the YC bankruptcy, Its
got nothing to do with me and had nothing to do with us See April 9,
2009 deposition pages 96-104 attached hereto as Exhibit 16. There is
evidence that this testimony is false. See Exhibit 3 hereto wherein CHC is
not only controlling EB and the YC through the Predatory Loan, it is

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actually acting as her Lending Advisor. In other words, all of these


matters had EVERYTHING to do with Mr. Byrne
November, 2008:

EB and SB put YC in to bankruptcy subject to SBs brilliant plan to act


as the DIP.

March, 2009:

EB filed personal bankruptcy having effectively transferred the bulk of her


assets to Mr. Byrne in one form or another..

June 24 - July 8, 2009: EBs bookkeeper, Jory Russell was caught under oath destroying Edras
files on two computers. Later, some of the files are forensically
recovered and provide evidence of concealed or destroyed documents.
See below.
September October, 2009:

Montgomery informed TB that he has evidence against EB including the


fake Target Letters, the concealment of documents, the concealment of a
server containing all the documents, (not yet produced) and the
concealment of the secret deal between EB and SB .

October, 2009:

On verge of going to jail for writing 1.9 M in fraudulent checks in


Nevada, Montgomery gave TB the target letters. Montgomery claimed he
also has a Kinkos fax cover sheet and / or copies of the letters with an
unredacted fax header from Kinko's in Boston relating to SBs possession
of the letters. Within a day of getting the letters, TB and I contact and
send them to the DOJ, the FBI, and the U. S. Attorneys office in
Washington D.C. and Montana.

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December, 2009:

TB located numerous web-sites and email addresses that parallel or


mirror sites and addresses of EBs opponents . Montgomery tells TB
that he has the same type of parallel sites for TB and the affiant. On
investigation by a computer expert, who determined that the sites are
registered to a domain company called Network Solutions all registered to
an entity owned or controlled by Montgomery called Off Shore Ltd.
with Porcupine Creeks address. Some but not all of these sites are:
Cross Harbor Capital.net; Tim Blixseth.com. JessicaBlixseth.com
to name a few. Based on statements of Montgomery, and my prior
knowledge of Montgomerys fraud on the U.S. Government, the evidence
suggests that Montgomery used these sites and addresses to hack into
computers and as part of their technology scam to sell fake technology to
the U.S. Government.

December, 2009 January, 2010:

TB and his technology expert continue to recover deleted emails from the
Russell computers, including Exhibit 3 to this Affidavit.

THE RUSSELL COMPUTER SPOLIATION


14.

On May 14, 2009, on the motion of Western Capital Partners, this Court ordered

the 2004 exam of Jory Russell, Edra Blixseths primary financial assistant. Pursuant to said
Order, Russell was ordered to produce electronic and paper documents including complete
copies of computer hard drives and other electronic storage media relating to Edra Blixseth as

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described in the Motion for Rule 2004 Examination.


15.

On June 13, 2004 Russell was served with a subpoena requiring his attendance on

June 23, 2009 for examination under oath; and the production of all documents, emails,
financial records and statements, bank records relating to Edra Blixseth; and specifically
including complete copies of computer hard drives and other electronic storage media which
contain any and all accounting, email, and financial information relating to Edra Blixseth in
Russells possession as described in the subpoena and in the Order incorporating the Motion.
16.

Within a day or two after receiving the subpoena, Russell spoke to both Gary

Deschenes, Ms. Blixseths personal bankruptcy lawyer, and to Edra Blixseth. (Tr. 11.1.09, p.
30, L. 18-20. He informed them that he had received the subpoena, that he possessed documents
stored on computers responsive to the subpoena; and that I was printing off the documents.
(Id p. 30 L. 11 to p. 33, L. 11). Russell testified that during the week before his attendance I
would read the subpoena and then print out responsive documents including emails. (Id p. 35 L.
8-15). He printed out about a foot and a half of responsive documents before he ran out of
paper. (Id. P. 36 L. 12-16). He had possession of two computers containing materials responsive
to the subpoena, a lap top and a desktop, but only printed from his desktop before the June 24,
2009 exam. (Id. P. 38 L. 8-12)
17. Mr. Deschenes did not file a motion to quash or for a protective order.
18. Mr. Deschenes did not represent Russell at any time in these matters. He represented
Edra Blixseth at all times material herein. Thus, at no time did his instructions to Russell as
recited herein fall within the attorney client privilege.
19. Russell first testified on June 24, 2009. That volume was designated Vol. 1 in the

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Edra Blixseth bankruptcy proceedings. There are also two additional volumes of his testimony
in the Edra Blixseth bankruptcy dated July 8, 2009 and August 5, 2009; and designated Vol. II
through III. There is a fourth day of deposition taken on November 1, 2010 in AP 14. In this
Affidavit, each volume is designated by date. In the June 24, 2009 examination, as he later
admitted on July 8, 2008, neither he, nor Mr. Deschenes, nor Ms. Blixseth, disclosed his then
possession of either the lap top or the desk top, or the foot and a half of documents he had
printed out from the desktop, although he knew they were in his possession and responsive to
the Courts Order. (Tr. 8.8.09, p. 13 L. 7 to p. 14, L. 16). He also knew there was a scheme in
place to conceal the computers and the responsive documents orchestrated by Mr. Deschenes.
Id. P. 13 - 30. See specifically Tr. 8.8.09 at p. 15, L. 21 to p. 18 L. 18 for the possession and
non-production of the subpoenaed documents. As hereinafter recited, Russell only produced
about 4" of documents from his wifes computers which were virtually the entire subject of his
short 52 page deposition permeated with attorney client privilege assertions designed to conceal
the un-produced computers and documents.
20. On the night of June 23, 2009, in preparation for his deposition, Russell picked up
Mr. Deschenes at the airport and drove him to Ms. Blixseths estate, Porcupine Creek.
According to Russell, he informed Mr. Deschenes and Edra Blixseth that evening that he had in
his possession in the trunk of his car the lap top and a bankers box with about a foot and a
half of documents that he had printed out during the previous week from his desktop. In his
July, 8 2009 testimony, he swore that there were different documents on his desktop and lap top
that were subject to the subpoena; that he only printed from his desktop; and the lap top and
desktop were not synched. Tr. 7.8.09, p. 23, L 14 - 22.

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21.

On the night of June 23, 2009, Mr. Deschenes then requested Russell to give them

the lap top and the printed documents because I was told that was not my property. Tr. 7.8.09,
p. 35 L. 3 -22. The desktop was still at his home; (Tr. 11.1.09, p. 51 L. 24-25; from which he
had printed about a foot and a half of documents that he knew were responsive but he gave to
Mr. Deschenes and Edra Blixseth the evening before his deposition on June 24th; but now
wasnt sure if the computers were synched; or who told him not to produce the documents and
computers, Mr. Deschenes or Ms. Blixseth. Tr. 11.1.09 p. 38 L. 8-15; p. 52, L. 4 to p. 54 L. 24.
22.

Russell makes a series of remarkable admissions and contradictions in his

testimony between July 8 and November 1. He admits that he was at Porcupine Creek, one or
two days before Mr. Deschenes arrived printing off documents off Edra Blixseths printers that
were also not produced on June 24th, but were supposedly part of the foot and a half. Tr.
11.1.09 p. 55, L. 14-25. But in his November 1 testimony, he said that he had told Blixseth and
Deschenes on the night of June 23, 2009 before his deposition that the stack of documents
representing the foot and a half in the bankers box from his trunk were from the lap top.
Tr. 11.1.09, p. 54, L. 7 to P. 55 L. 13. In his three days of testimony after June 24, 2009, July 8,
August 5 and November 1, 2009, Russell gives conflicting testimony on what he destroyed and
when. On August 5, 2009, he testified that he destroyed everything pertaining to Edra Blixseth
on the desktop; and I deleted copies of everything that were on Edras lap topor yeah,
Edras lap top, the lap top that I was using. Tr. 8.5.09 280:10 to 282: 1.
23.

The first mention of being accused of theft of the documents came up in Mr.

Deschenes presence. Tr. 11.1.09 , p. 56 L. 5-20. Russell testified he had no recollection of any
plan to shut down his deposition the following day being discussed but he remembers a John

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Roselli showing up at his deposition to put his deposition on hold.. Tr. 11.1.08 p. 57, L. 14 to
p. 59 L. 5. The next day he deleted documents off his desktop. Tr. P. 59, L. 6-11. Mr. Russell
then asked for a break. Id at p. 61, L. 18.
24.

Russell relied on Mr. Deschenes not to produce the documents or the computers

on June 24 at his deposition. Tr. 66 L. 3 to p. 67 L. 3. Neither Russell, nor EB, nor Mr.
Deschenes disclosed on June 24, 2009, that just a month before that, on May 19, 2009, five days
after the court order, EBs business partner, Montgomery, delivered a server at Porcupine
Creek, called the Blxware/Blixseth.com and related domain names containing thousands of
emails, and with what Russell now claims contains everything from both computers in his
possession. Tr. 11.1.09. That server has never been produced; and apparently, has
disappeared..
25.

Russell also destroyed two USB hubs by throwing them in the garbage

containing accounting software provide by Pat Yarborough, EBs bookkeeper, and also
documents responsive to the Western Capital subpoena that were on the lap top. Tr. 11.1.09 p.
70 L. 10 to p. 71, L. 13.
26.

In his July 8th testimony, Russell admitted destroying documents off both the lap

top and desktop and that they were not synched. Tr. 7.8.9, p. 38, L. 11 to p. 39, L. 18.
27.

He also stated that on the night of June 23, he then proceeded to print out more

documents from the lap top that evening while in the presence of Mr. Deschenes and Ms.
Blixseth, and after printing for some time, he stopped. At some time during this entire episode
of spoliation, he also put additional documents on a USB hub which he filled; and later threw in
the garbage.. Tr. 11.1.09 p.70, L. 10 top p. 81 L. 13. It is unknown what happened to the

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printed documents printed out the evening of June 23, 2009; and the chain of custody of the
foot and a half is unknown..
28.

At the June 24, 2009 exam, Mr. Deschenes engaged in what can only be called an

intentional charade using Russell as a dupe. Neither Russell or Mr. Deschenes ever mentioned
the two computers, or the foot and a half of documents given to him the night before by
Russell, or the 3' of documents printed out the night before from the lap top given to Blixseth /
Deschenes that evening. Instead, Mr. Deschenes had Russell produce about 4 inches of
emails mostly relating to attorneys, which he claimed were from his wifes computer, which
Deschenes then asserted the attorney client privilege on. (Tr, 6.24.09 pp. 1-51). The production
of the 4" of printed documents from the wifes computer constitutes an admission that Russell,
Mr. Deschenes and EB had a duty to produce the other computers and printed documents.
29.

Mr. Deschenes then carried on this Roselli charade in the context of the 4" of

produced documents, the attorney client privilege, and a privilege log in what is shocking
deception relating to the subpoenaed computers, the subpoenaed foot and a half of documents
that Russell actually possessed, all given to him the night before while using the 4" of
documents as a cover, and the subsequent destruction of the contents of the computers the
following day. Tr. 6.24.09 p. p. 4o to 50. Specifically, under the cover of the 4" of emails
relating to the attorney client privilege and not providing the non- privileged documents, with
Western Capitals lawyer who were demanding that they be given to the court reporter at the
June 24th deposition, Mr. Deschenes stated at p. 46 L. 10-12:
No. Were not going to give them to you today because of the other deal. We dont
want to have these things produced if were....

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The other deal is the Roselli charade. The compelling inference is that Mr. Deschenes knew
that the entire June 24th charade with Roselli , and the 4" of documents produced after Russell
had produced everything the night before, was a cover for the violation of the subpoena and the
court order in order to give Blixseth and Russell time to destroy evidence, which he admittedly
did. The Western Capital lawyers heard Edra Blixseth state words to the effect that Sam is ok
with the deal inferring that Sam Byrne was the source of funding to buy out the Western
Capital note. Additionally, EBs partner, Dennis Montgomery, apparently then in conflict
with EB, on June 25, 2009, the day after the deposition, called Tim Blixseth and told him that
the Roselli intrusion into the deposition was a charade to destroy evidence off the computers,
which Mr. Blixseth immediately reported to her trustee, Mr. Samson. Montgomery also texted
TB during that time frame that they engaged in the foregoing conduct so they could buy time to
erase emails. Without this tip from Montgomery, it is unlikely that the concealment of the
computers and subsequent destruction would have been uncovered.
30. The evidence suggests that the Rosselli / Byrne charade of buying off Western
Capital Partners was a scheme to buy time to conceal and destroy evidence. According to
Russell in a conversation with the affiant, and according to Montgomery in a conversation with
TB, Byrnes Vice-president, Matthew Kidd was present at Porcupine Creek throughout the June
24, 2009 deposition and subsequent meetings. The inference and circumstantial evidence is that
there was no real intention to pay Western Capital Partners. Following the suspension of the
deposition, Russell admittedly spent the next day destroying documents on his desktop and
his lap top. (Tr. 7.8.08 p. 23 L. 14 - p. 24 L. 12; Tr. 8.5.09, supra). Contrary to his testimony on
November 1, 2009 that he only printed from his desktop, (see above), on July 8, 2009 he had

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testified that he printed from his lap top. (Id p. 25 L. 4-24)


31.

Beginning on at least June 18, and continuing on June 22, and 23, 2009, at least

three days after informing Mr. Deschenes and Ms. Blixseth of what he was doing to respond to
the subpoena, Russell may have also began deleting, concealing or destroying electronically
stored files.
32.

Between the date of the Courts Order on May 14, 2009 and June 24, 2009, Russell

had possession, custody and control of at least the lap top computer and the desktop computer
containing hundreds of thousands of electronically stored documents relating to Edra Blixseth
and required to be produced pursuant to the subpoena. Neither he, nor Mr. Deschenes, nor
Ms. Blixseth complied with the courts order or the subpoena. At the time he only took
advice from Mr. Deschenes. And Ms. Blixseth.
33. According to his testimony, Mr. Russell was the Vice President of Business
Development for Ms. Blixseths software company, Blxware, and the Director of Business
Operations for Edra Blixseth personally, who took direction from Edra Blixseth on all
matters. (Tr. 11.1.09 p.25 L3-4). Russell had not worked for Ms. Blixseth for about 3 or 4
months before the deposition; but he still possessed the lap top computer and the desk top
computer containing materials sought in the subpoena. (Id p.32 L. 3-20).
34. . Russells testimony as to who owned, and /or had the right to possess the lap top
computer as of June 24, 2009, and the instructions he received from Mr. Deschenes and Ms.
Blixseth on these issues evidences concealment, destruction and obstruction; ( Id 37-57).
35 . The Russell testimony is very specific that one or both of them told him not to
produce either the foot and a half of documents or the lap top for his deposition the following

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day; (Id. 52 L. 9-25) ; and that the documents (Id 56 L. 9-12) was [sic] no longer my
property and I shouldnt have it. (Id. L. 19-21). Gary Deschenes specifically told him that the
lap top was not Russells property the night before he was obligated by Court order to produce
copies of its hard drive. Mr. Deschenes knew that the Order to produce copies made both
the actual ownership and possession of the lap top irrelevant because copies were required,
and regardless of who had the right to possess the laptop - Ms. Blixseth or Russell, he obstructed
the discovery process. The fact that the destruction of material on the computers occurred the
next day nails the coffin shut on their collective intent.
36.

Neither the desktop or lap top computers belonged to Ms. Blixseth. They

belonged to YCW and Blxware. No objection or motions to quash were filed by either entity.
Russell was properly in possession of both. They each contained material required to be
produced. . Russell printed out the entire foot and a half from the desktop which did not belong
to Ms. Blixseth. Russells conflicting testimony as to what computers from which he printed
unproduced documents evidences concealment and mens rea. Mr. Deschenes did not represent
either Blxware or YCW.
37. Prior to the night of June 23, 2009, neither Ms. Blixseth, nor Mr. Deschenes, nor
Blxware, nor YCW , or its Trustee, or anyone representing EB, had requested the turnover of the
computers, or any documents relating to Edra Blixseth, notwithstanding Russells direct, routine
and consistent assistance for the previous nine months in assisting Blixseth and her lawyers in
finding documents and providing them to her lawyers, including Mr. Deschenes, and also to Mr.
Byrne and his lawyers and to the lawyers in the YC bankruptcy. (Exhibits to Russell deposition
and emails sought to be destroyed by Russell which have been forensically retrieved from the lap

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top and desktop will be produced at an evidentiary hearing.)


38. Given M. Blixseths critical role with Samuel Byrne in obtaining ownership of the
Yellowstone Club in the Blixseth divorce, and the subsequent control over the YC bankruptcy
proceedings by both Mr. Byrne and Ms. Blixseth through the $35 Million dollar Porcupine
Creek loan, as recently admitted by Mr. Byrne - but previously the subject of contradictory
testimony by Mr. Byrne, as herein recited, the aforesaid evidence relating to the concealment of
evidence before July 17, 2009, in and of itself should support a finding of bad faith in the YC
bankruptcy proceedings, prior to plan confirmation on July 17, 2009.

Signed under the pains and penalties of perjury this 13th day of January, 2010 under the
laws of the United States.

_____/S/ Michael J. Flynn_____________


Michael J. Flynn

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EXHIBIT 27

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UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
Case No. 15-cv-20782-MARTINEZ/GOODMAN
DENNIS L. MONTGOMERY,
Plaintiff,
v.
JAMES RISEN, HOUGHTON MIFFLIN
HARCOURT PUBLISHING CO., HMH
HOLDINGS, INC.,
Defendants.
_______________________________________/
DEFENDANTS INITIAL DISCLOSURES
Defendants James Risen (Risen), Houghton Mifflin Harcourt Publishing Company
(HMH), and Houghton Mifflin Harcourt Company (HMHC), improperly sued as HMH
Holdings, Inc. (together HMH Companies), through undersigned counsel, hereby provide their
Initial Disclosures under Federal Rule of Civil Procedure 26(a)(1)(A) and this Courts scheduling
order (ECF No. 16). These Initial Disclosures are made upon information currently and
reasonably available to Defendants as of the date of this disclosure and Defendants reserve the
right to supplement or amend their disclosures as additional information becomes available.
A.

Potential Witnesses and Individuals Likely to Have Discoverable


Information

Based upon information known to Defendants as of this date, the following individuals
are potential witnesses or are likely to have discoverable information that Defendants may use to
support their defenses:
1. Dennis Montgomery.
1

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Subjects of Discoverable Information: the factual basis for his claims and asserted
damages in the Complaint, including, but not limited to: whether the software he
provided to the federal government was a hoax; whether he staged phony
demonstrations of his software to government officials; whether he was an
incorrigible gambler; Montgomerys residences in Nevada, California, Washington,
and Florida; Risens interview of Montgomery; employment or contractor positions
and opportunities from 2008 to the present; information about Montgomerys
interview with Lisa Myers from NBC News about Gibbons; Montgomerys health
claim of damages.
2. Brenda Montgomery.
Subjects of Discoverable Information: the Montgomery residences in Nevada,
California, Washington, and Florida; Montgomerys health claim of damages.
3. James Risen. Risen may be contacted through Defendants counsel, Davis Wright
Tremaine LLP.
Subjects of Discoverable Information: newsgathering regarding Chapter 2 of Pay Any
Price: Greed, Power, and the Endless War (Chapter 2); Risens reliance on court
records, reputable news reports, interviews with sources, including Montgomery, for
statements about Montgomery; Risens belief in the truth of the statements in Chapter
2 about Montgomery.
4. Bruce Nichols, Senior Vice President, Trade & Reference at HMH. Nichols may be
contacted through Defendants counsel, Davis Wright Tremaine LLP.
Subjects of Discoverable Information: information regarding HMHs editorial review
of Chapter 2 on Montgomery and information about Risens independent contractor
status.
5. John Brennan, Director of the CIA, former head of the Terrorist Threat Integration
Center, located in or near Washington, D.C.
Subjects of Discoverable Information: the Terrorist Threat Integration Centers use of
Montgomerys information and decision to pass Montgomerys information on to
senior government officials; senior government officials use of Montgomerys
information; and the basis for testimony in his confirmation hearings for Director of
the CIA that Montgomerys software was determined not to be a source of accurate
information. (Chapter 2 at 47.)
6. Jose Rodriguez, former head of the CIA Counterterrorism Center, located in or near
Washington, D.C.
Subjects of Discoverable Information: information showing that Montgomerys
software was revealed to be a hoax, and that the Counterterrorism Center very
skeptical of Montgomerys intelligence and viewed it as crazy.
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7. Saxby Chambliss, former U.S. Senator and vice chairman of the Senate Intelligence
Committee, and relevant former staff members.
Subjects of Discoverable Information: information regarding written questions
Senator Chambliss sent Brennan in his confirmation hearings about Montgomerys
intelligence and documents the senator and staff reviewed showing that CIA
officials derided Montgomerys information and that Montgomerys intelligence was
bogus.
8. George Tenet, former Director of the CIA, located in or near Washington, D.C.
Subjects of Discoverable Information: information showing that Montgomerys
software was revealed to be a hoax; that senior government officials considered
shooting down passenger jets based on the software; and that Tenet allowed
[scientists] to circumvent the CIAs normal reporting and vetting channels, and
rushed the raw material fed to the agency by Montgomery directly to the president.
(Chapter 2 at 43-44, 46.)
9. Samantha Ravich, former advisor to Vice President Dick Cheney, located in or near
Washington, D.C.
Subjects of Discoverable Information: information about her meeting with
Montgomery about his software, and information showing that Risen interviewed her.
(Chapter 2 at 51.)
10. Frances Townsend, former counterterrorism official on the National Security Council.
Subjects of Discoverable Information: information showing that Townsend discussed
with a National Security Council lawyer that the president had authority to shoot
down airplanes believed to be terrorist threats and that Townsend considered whether
it might have been time to exercise that authority in late 2003 based on
Montgomerys intelligence. (Chapter 2 at 45.)
11. Current and former staff members, U.S. Senate Select Committee on Intelligence.
Subjects of Discoverable Information: information showing that committee staff
contacted the CIA about Montgomerys technology and the CIA was very skeptical
of it at the time.
12. Current and former CIA officials, located in or near Washington, D.C.
Subjects of Discoverable Information: information about working with Montgomery
regarding his purported software and the use of Montgomerys information;
information showing that that the purported software was fake; and that senior
government officials considered shooting down passenger jets based on the software.
13. Current and former U.S. Special Operations Command officials.

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Subjects of Discoverable Information: information about working with Montgomery


regarding his purported software; information showing that that the purported
software was fake; information showing that Montgomerys technology did not meet
the requirements for U.S. Special Operations Command.
14. Current and former Pentagon officials, located in or near Washington, D.C.
Subjects of Discoverable Information: information about working with Montgomery
regarding his purported software; information showing that that the purported
software was fake; and information showing that the Air Force awarded a contract to
Montgomerys company in 2009.
15. Lisa Meyers, former NBC Senior Investigative Correspondent.
Subjects of Discoverable Information: information about Meyers interview of
Montgomery regarding then Congressman Jim Gibbons and Montgomerys company,
eTreppid Technologies.
16. Eric Lichtblau, Washington, D.C. bureau reporter for the New York Times, located in
or near Washington, D.C.
Subjects of Discoverable Information: the newsgathering efforts, interviews,
documents relied upon by Risen and Lichtblau for their New York Times article about
Montgomery that served as the basis for Chapter 2 and their belief that the article was
accurate.
17. Steve Crisman, filmmaker who oversaw business operations for Montgomery and a
former business partner.
Subjects of Discoverable Information: information regarding his belief that
Montgomerys technology was not real and information confirming that he was a
source and quoted in the New York Times article regarding Montgomery.
18. Conrad Burns, former U.S. Senator.
Subjects of Discoverable Information: information regarding Montgomerys
presentation about his software Senator Burns observed; information confirming that
that Burns was a source and quoted in the New York Times article regarding
Montgomery.
19. Asa Hutchinson, former Undersecretary for Border & Transportation Security at the
U.S. Department of Homeland Security, Governor of Arkansas.
Subjects of Discoverable Information: information regarding the governments
decision to ground airplanes and raise the terror alert around Christmas 2003 in
response to Montgomerys intelligence; and information confirming that he was a
source and quoted in the New York Times article regarding Montgomery.

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20. Aram Roston, former Playboy and Defense News reporter, located in Washington,
D.C.
Subjects of Discoverable Information: information regarding the Playboy and Defense
News articles about Montgomery and his software, including, but not limited to,
whether those articles were subject to retraction.
21. Michael Flynn, Montgomerys former lawyer, located in California.
Subjects of Discoverable Information: information showing that Montgomerys
software was revealed to be a hoax; that Montgomery staged phony demonstrations of
his software to government officials, that Montgomery was a fraud and conman; and that he provided information to Risen before publication. (Chapter 2 at
36.)
22. Tim Blixseth, located in Washington.
Subjects of Discoverable Information: his belief that Montgomerys software was not
real; his observation of a demonstration of Montgomerys software in Palm Springs,
California; and information showing that he provided information to Risen before
publication. (Chapter 2 at 50-52.)
23. Edra Blixseth, Montgomerys former business partner in Blxware, located in
California.
Subjects of Discoverable Information: Blixseths business dealings with Montgomery
and information showing that Montgomerys software was revealed to be a hoax.
(Chapter 2 at 50-52.)
24. Paul L. Haraldsen, Special Agent, Air Force Office of Special Investigations.
Subjects of Discoverable Information: information regarding the investigation by the
Air Force Office of Special Investigations into Montgomerys software at eTreppid.
25. Thomas A. Smith, Special Agent, Air Force Office of Special Investigations.
Subjects of Discoverable Information: information regarding the investigation by the
Air Force Office of Special Investigations into Montgomerys software at eTreppid.
26. Michael A. West, FBI Special Agent.
Subjects of Discoverable Information: information regarding the FBI investigation
into Montgomerys software at eTreppid
27. Warren Trepp, Montgomerys former partner in eTreppid.

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Subjects of Discoverable Information: interviews with the FBI and Air Force Office
of Special Investigations discussing the phony demonstrations Montgomery staged
for government officials and his belief that Montgomerys software was not real.
28. Sloan Venables, former e-Treppid employee.
Subjects of Discoverable Information: interviews with the FBI and Air Force Office
of Special Investigations discussing the phony demonstrations Montgomery staged
for government officials and his belief that Montgomerys software was not real.
29. Patty Gray, former e-Treppid employee.
Subjects of Discoverable Information: interviews with the FBI and Air Force Office
of Special Investigations discussing the phony demonstrations Montgomery staged
for government officials and her belief that Montgomerys software was not real.
30. Jesse Anderson, former e-Treppid employee.
Subjects of Discoverable Information: interviews with the FBI and Air Force Office
of Special Investigations discussing the phony demonstrations Montgomery staged
for government officials and his belief that Montgomerys software was not real.
31. James Bauder, former e-Treppid employee.
Subjects of Discoverable Information: interviews with the FBI and Air Force Office
of Special Investigations discussing the phony demonstrations Montgomery staged
for government officials.
32. Joseph Liberatore, Air Force official, located in or near Washington, D.C.
Subjects of Discoverable Information: information about the government contracts
Montgomery received from the Air Force, and information regarding Montgomerys
purported software. (Chapter 2 at 52.)
33. Donald Kerr, former chief of the CIAs Science and Technology Directorate any
Deputy Director of National Intelligence, located in or near Washington, D.C.
Subjects of Discoverable Information: information regarding Montgomerys
purported software. (Chapter 2 at 42.)
34. Jim Gibbons, former member of the House Intelligence Committee and Governor of
Nevada.
Subjects of Discoverable Information: information regarding Gibbons early
advocacy for Montgomerys software; Montgomerys charges of bribery against
Gibbons in connection with the sale of Montgomerys software (from which Gibbons
was cleared); and the email Montgomery allegedly fabricated to support his
allegations against Gibbons. (Chapter 2 at 38-39, 49-50.)
6

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35. Abbe Lowell, former Congressman Jim Gibbons attorney, located in Washington,
D.C.
Subjects of Discoverable Information: Montgomerys charges of bribery against
Gibbons in connection with the sale of Montgomerys software (from which Gibbons
was cleared); and the email Montgomery allegedly fabricated to support his
allegations against Gibbons. (Chapter 2 at 50.)
36. Porter Goss, former chairman of the House Intelligence Committee, former CIA
Director, located in or near Washington, D.C.
Subjects of Discoverable Information: meetings with Gibbons to discuss eTreppid and
Montgomerys technology. (Chapter 2 at 39.)
37. Letitia White, a lobbyist, located in Washington, D.C.
Subjects of Discoverable Information: information regarding her work for eTreppid to
obtain government contracts for Montgomerys software. (Chapter 2 at 38.)
38. Any individual disclosed by Plaintiff Dennis Montgomery as a potential witness or
person who may have discoverable information in this matter.
Defendants reserve the right to amend or supplement the foregoing response with the
names and addresses of additional individuals likely to possess discoverable information that
may be used to support Defendants defenses and whose identities may be revealed during the
course of discovery.
B.

Documents Supporting Defenses

Based upon information known to Defendants as of this date, the following categories of
documents or tangible things in Defendants possession, custody or control may be used to
support their defenses:
1. Exhibits attached to Defendants motion to dismiss or transfer for lack of personal
jurisdiction, motion to dismiss or transfer for improper venue, motion to transfer
under 28 U.S.C. 1404(a), motion to dismiss for failure to state a claim, and special
motion to dismiss. (ECF Nos. 25, 25-1 to 25-24, 26)
2. Documents Risen relied upon to write Chapter 2 and the 2011 article in the New York
Times about Montgomery, which include: court records; news reports; emails with
sources; emails among and between individuals mentioned in Chapter 2; emails with
Lichtblau; interview notes; and other documents obtained in newsgathering. These
documents are being retained by Risen and/or Davis Wright Tremaine LLP.
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3. Court records, news reports, and publicly available statements about or by


Montgomery or his software. These documents are being retained by Davis Wright
Tremaine LLP and are publicly-available on PACER or other websites.
4. HMH editorial documents regarding Chapter 2 on Montgomery and documents
evidencing that Risen is an independent contractor. These documents are being
retained by HMH.
Defendants reserve the right to amend or supplement the foregoing response with other
categories of documents or tangible things which may be revealed during the course of
discovery.
C.

Computation of Damages

Defendants do not claim damages.


D.

Insurance Agreement

HMH Companies insurance agreement relevant to this proceeding is attached hereto and
hereby produced under Fed. R. Civ. P. 34.

Dated: April 24, 2015


Respectfully submitted,
HOLLAND & KNIGHT LLP
By: s/ Sanford L. Bohrer
Sanford L. Bohrer
Brian W. Toth
701 Brickell Avenue, Suite 3300
Miami, Florida 33131
Tel.: (305) 374-8500
Fax: (305) 789-7799

DAVIS WRIGHT TREMAINE LLP


By: s/ Laura R. Handman
Laura R. Handman (admitted pro hac
vice)
Micah J. Ratner (admitted pro hac vice)
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1919 Pennsylvania Ave., NW, Suite 800


Washington, D.C. 20006
Tel.: (202) 973-4200
Fax: (202) 973-4499
Counsel for Defendants

Case 1:15-cv-20782-JEM Document 52-30 Entered on FLSD Docket 05/15/2015 Page 11 of


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CERTIFICATE OF SERVICE
I certify that on April 24, 2015, I served this document on all counsel of record by email.
s/Micah J. Ratner

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