Case 3:06-cv-00056-PMP-VPC Document 833 Filed 09/03/08 Page 1 of 150

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UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA
BEFORE THE HONORABLE VALERIE P. COOKE, MAGISTRATE JUDGE
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DENNIS MONTGOMERY, ET AL.,

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Plaintiff,
-vsETREPPID TECHNOLOGIES,
ET AL.,

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Defendant.
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No. 3:06-cv-056-PMP-VPC
August 18, 2008
United States District Court
400 S. Virginia Street
Reno, Nevada 89501
VOLUME I

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TRANSCRIPT OF
CONTINUED SHOW CAUSE HEARING

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A P P E A R A N C E S:
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FOR THE PLAINTIFF:

Randall Sunshine
Ellyn Garofalo
Attorneys at Law

FOR DEFENDANT ETREPPID:

Stephen Peek
Jerry Snyder
Attorneys at Law

FOR COUNTER-DEFENDANTS:

Gregory Schwartz
Bridgett Robb-Peck
Attorneys at Law

FOR INTERESTED PARTY:

Carlotta Wells

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Proceedings recorded by mechanical stenography produced by

computer-aided transcript

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Reported by:
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KATHRYN M. FRENCH, RPR, CCR

NEVADA LICENSE NO. 392
CALIFORNIA LICENSE NO. 8536
KATHRYN M. FRENCH, RPR, CCR
(775) 786-5584

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Reno, Nevada, Monday, August 18, 2008, 1:30 p.m.

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THE COURT:

Please be seated.

THE CLERK:

This is the date and time set

for a Motion and Continued Show Cause Hearing in case number

3:06-cv-056-PMP-VPC, Dennis Montgomery, and others, versus

eTreppid Technologies, and others.

Present on behalf of plaintiff.

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Randall Sunshine, and Mark Gunderson.

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defendants, Stephen Peek and Jerry Snyder.

Ellyn Garofalo,

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Present on behalf of

Present on behalf of counter-defendant,

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Gregory Schwartz and Bridgett Robb-Peck.

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of interested party, Carlotta Wells.

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THE COURT:

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All right.

Present on behalf

Thank you very much.

As I indicated before the lunch recess,

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we do have just a few more items from the case management

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perspective that I would like to take up.

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First, there are two motions that have been fully

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briefed.

The first is the Montgomery parties' Motion to

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Compel Compliance with the January 22nd, 2008 order, and order

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to show cause why eTreppid should not be held in civil

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contempt, docket 684.

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through 687.

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parties replied at 767.

And then there are declarations 685

ETreppid opposed at 729.

And the Montgomery

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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So I'll go ahead and briefly -- I'm interested.

I've read all of the papers the parties have filed, and so I'm

interested in any comments that counsel would like to make in

support of their positions.

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So, Mr. Sunshine, is there anything you would like

to add, sir?

MS. GAROFALO:

THE COURT:

MS. GAROFALO:

Your Honor --

Ms. Garofalo.
-- I have spoken to Mr. Peek

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during the lunch break.

We have now received a good number

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of documents, purportedly, responsive to the books and

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records inspection requests.

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It has been a voluminous task.

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representations to the Court, or certainly to Mr. Peek, that

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everything has not been produced, when we cannot definitively

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identify documents, all the documents we have, the universe of

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documents, and identify documents that we think are missing.

We are having those reviewed.

I would not want to make

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I would, therefore, ask that the Court continue this

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motion until such time that we've had a chance to complete the

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review.

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motion, and we would respectfully withdraw it.

It may then be unnecessary to move forward with the

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THE COURT:

All right.

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Ms. -- how do you pronounce your name?

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MS. GAROFALO:

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THE COURT:

And how long -- and

Garofalo.

Garofalo.

Thank you very much,

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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Miss Garofalo.

undertake that review?

How long do you think you're going to need to

MS. GAROFALO:

Well, we have experts looking

at it.

They're complicated. It is taking a while.

There are, I believe, about 30 boxes of documents.

THE COURT:

Right.

That's fine.

What I'm

interested in doing is if you could just give me a date by

which you'll let the Court know one of two things.

thinking at the September status conference, maybe in your

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Case Management Report, you can simply report to the Court

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that you want this considered, or you want to withdraw it in

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about a month's time.

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MS. GAROFALO:

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THE COURT:

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MR. PEEK:

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THE COURT:

I'm

That would be fine, Your Honor.

Any objection to that, Mr. Peek?

No objection, Your Honor.
So, Miss Clerk, with respect to 684,

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the consideration of that motion will be deferred until the

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September Case Management Conference.

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And Miss Garofalo --

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MS. GAROFALO:

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THE COURT:

Garofalo.

-- Garofalo has indicated that

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their experts are reviewing that motion, and are going to

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determine whether they will proceed with it, or whether it

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will be withdrawn, and will so advise the Court in their Case

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Management Report for September.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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The next motion is docket 726.

This is the motion

of Opspring, LLC to compel production of tax returns of

Warren Trepp.

at docket 761, and a reply at docket 783 in support of

that motion.

Management Report, eTreppid took the view that certain

issues were raised in the reply that weren't addressed in

the original motion itself.

occurred.

And that drew an opposition from Warren Trepp

And I did note, I think, in eTreppid's Case

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So, Ms. Garofalo.

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MS. GAROFALO:

So, I am aware that that

Again, Your Honor, I'll keep this

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simple.

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returns are relevant and ought to be produced.

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that reason parallels, to some extent, the reason that the

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eTreppid parties are requesting that Mr. Montgomery produce

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his tax returns.

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and Mr. Trepp were members, are members of that LLC.

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there is a dispute relating to the copyright claims and as to

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whether or not Mr. Montgomery was indeed an employee subject

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to the Work For Hire Doctrine, or a partner, so to speak, a

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member of the LLC.

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There is really one reason why we believe the tax

ETreppid is and was an LLC.

And, actually,

Mr. Montgomery
And

One of the reasons that the eTreppid parties wanted

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to see Mr. Montgomery's tax returns was to see how he

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characterized his income; whether it was characterized as

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employee income, salary, or something else.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

We believe that

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we are entitled to the same information, relevant to being

Mr. Montgomery and Mr. Trepp had the same positions with the

company.

partner, a member of the LLC, as opposed to an employee,

that would be relevant and bear on Mr. Montgomery's argument

relating to the employee work for hire issue.

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If indeed Mr. Trepp characterized himself as a

THE COURT:

All right.

Mr. Snyder.
MR. SNYDER:

Thank you, Your Honor.

The sole reason stated here for relevancy of the tax

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returns is how Mr. Trepp's, as I understand it, employment

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status might impact the determination of Mr. Montgomery's

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employment status.

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argument is that somehow these two people were in an identical

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position, vis-a-vis eTreppid.

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income was characterized on his returns is relevant, to the

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same extent, Mr. Trepp's is.

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provided any factual support to suggest that.

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The factual basis for Montgomery's

Thus, the way Montgomery's

And I'm not sure that they have

The two individuals were both members of eTreppid,

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certainly, but that -- it doesn't follow from that,

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necessarily, that they were both employees or non-employees,

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or independent contractors, or something other.

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THE COURT:

And the --

Excuse me, Mr. Snyder.

Mr. Montgomery was a Chief Technology Officer.

And

Mr. Trepp -- and I haven't looked at all of the iterations of

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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the agreement -- was Chair of the Management Committee at one

time.

president or -- what was he?

I don't know if that changed.

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MR. SNYDER:

I think Mr. Frye was the

I don't recall Mr. Frye's position.

He was a secretary.

THE COURT:

MR. SNYDER:

Oh, all right.

And there are substantial

differences between the manner in which the two individuals

were compensated for most of the duration of eTreppid.

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Mr. Trepp did not draw a salary.

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did, for the entire, entire time.

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could be in his tax returns is really not relevant to Mr. --

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to whether or not Mr. Montgomery was an employee.

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Furthermore --

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THE COURT:

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MR. SNYDER:

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Mr. Montgomery, in contrast,

The information that

Well -- go ahead, sir.

I'd rather address your question

then go down a blind alley here.

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THE COURT:

Well, one of my questions is I

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think that the Montgomery parties say in their motion that

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there

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Montgomery parties asserted, that they feel bear on this

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issue of Mr. Trepp's tax returns, unclean hands, and so on

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and so forth.

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an excerpt from the amended -- from their complaint that, yes,

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at paragraph 42 of the Amended Complaint:

are also affirmative defenses that Mr. Montgomery, the

And, that I think they quote in their motion

"Improperly used

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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his majority interest to produce Montgomery shares, the value

of holdings, pay himself an exorbitant salary," and so on so

forth.

And so they say they're interested in looking at

Montgomery parties' affirmative defenses to these defenses

to eTreppid's claim for misappropriation of trade secrets.

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Would those affirmative defenses implicate

Mr. Trepp's tax returns and how --

MR. SNYDER:

Well, we have no idea because we

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have asked specific interrogatories to the Montgomery parties,

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asking that they articulate the basis for these claims.

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the responses we've gotten have not -- have been so devoid

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of detail, that we really can't evaluate whether or not

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Mr. Trepp's tax returns could impact that.

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see any reason that's before the Court to think that they

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would.

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I certainly don't

Furthermore, this motion is being brought by

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Opspring rather than Montgomery.

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Opspring has the same basis to assert that defense that

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Montgomery might.

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THE COURT:

Right.

And I'm not sure if

And I'm going to ask

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Ms. Garofalo about that, because I thought that was odd.

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I'm sure there's an explanation for it.

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MR. SNYDER:

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And

Okay.

And

The last point I would like

to make, quickly, is that, to the extent the Court is inclined

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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to grant the Motion to Compel and compel production of

Mr. Trepp's tax returns, we would ask that that production

be limited to reflect only information on those tax returns

showing income from eTreppid because, obviously, there is,

there is a number of sources of income.

When the Montgomery parties produce their tax

returns, we asked and the Court granted, that they be produced

without redaction.

seeking those for, one of the things they were relevant for,

Because one of the issues that we were

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is to find out whether Mr. Montgomery had been earning

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income from other sources, potentially, in violation of his

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contractual obligations to eTreppid.

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allegation here.

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There's no such

So if there's any sources of income that are

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non-eTreppid, they're certainly of no relevance at all to

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these proceedings.

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And those should be redacted.

THE COURT:

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Thank you, sir.

Ms. Garofalo.

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MS. GAROFALO:

Yes, Your Honor.

I think,

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actually, Mr. Snyder explained to the Court why it is

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relevant.

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any salary.

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was paid until we see his tax returns.

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relatively broad.

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Mr. Snyder said that Mr. Trepp did not receive

Of course, we have no way to know how Mr. Trepp
So, relevance is

And these tax returns go, again, to how Mr. Trepp

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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was paid, how he was treated.

The affirmative defenses

clearly set forth arguments, allegations that Mr. Trepp, who

controlled the company, treated himself differently, treated

himself in a way that might be in breach of his fiduciary

duties to his minority partners, and that Mr. Montgomery's

interests were diluted through these transfers of money and

so forth.

the tax returns.

information, nothing else that we could possibly rely on

All of that cannot be known unless we can review

Or there, really, is no equivalent

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to obtain the information that we need.

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THE COURT:

Why is, why is -- and I meant to ask

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you this -- why it Opspring making this request?

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Mr. Montgomery do it?

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MS. GAROFALO:

Why didn't

Your Honor, I don't know the

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answer to that.

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know why there's an anomaly and who made the request.

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don't know why it was done that way.

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find that out for the Court later this afternoon, but I cannot

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answer that question.

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We came into this fairly recently.

THE COURT:

I don't
And I

So I can certainly

All right.

Well, let me just say this.

I am mindful that both

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you and Mr. Sunshine are coming into this case, for you, at an

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unfortuitous time, given the volume of work that you're facing

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in getting up to speed.

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frustration that because of the number of lawyers prior to

But, I think I alluded earlier to my

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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your firm's involvement in the case but, also, subsequent,

that I will expect the answers to the questions the Court

poses to be answered.

expecting that.

that's going to be very important to the Court in terms of

how you proceed forward in this case.

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And I want to be reasonable in

I'm just giving fair notice to you that

Mr. Snyder, did you wish to say anything further?

And I'll give Mr. Garofalo the last word, of course.

MR. SNYDER:

Yes.

I just had a quick point to

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make.

Ms. Garofalo stated that there's no other potential

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source for this information.

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We've already produced every check eTreppid has ever written.

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That's a potential source for this information.

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W-2s or K-1s that eTreppid issued to Mr. Trepp is a potential

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source for this information.

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Well, of course there is.

Any 1099s or

The notion that his tax returns are the only

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potential source for this information is just not accurate.

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So there's certainly other less intrusive means, less invasive

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of Mr. Trepp's privacy, to obtain this information.

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some of those the Montgomery parties have already availed

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themselves of, and they have documents which would shed light

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on this.

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And

Some of them they have not.

So, I think it's not accurate to say that this is

the only way to get this knowledge.

THE COURT:

All right.

Miss Garofalo.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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MS. GAROFALO:

I would respectfully disagree

with Mr. Snyder.

the information that we are seeking.

stronger parallel to the case in which Mr. Montgomery was

required to produce his tax returns and the reason why.

There is information relating to transfers, relating to

characterization of compensation that can only be found in

Mr. Trepp's tax returns.

I think it is the only way to get some of

And, I think there is a

And on that basis, we'll submit, Your Honor.

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THE COURT:

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All right.

Thank you.

Well, first of all, my observation about

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some of this discovery litigation that we've had in this case

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is that it impresses the Court, on both sides, that there has

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sort of been this tit-for-tat, sort of back and forth about,

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well, you got this.

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cause.

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I'm hopeful that today marks a turning point in that process.

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I want this.

You got an order to show

We want an order to show cause, and so forth.

And

But that having been said, I'm not suggesting

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that this motion is not made without merit, and that I'm not

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seriously considering it.

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I'm, what makes sense to me, when I issued the order allowing

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Mr. Montgomery's tax returns to be disclosed, it was for the

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reasons that Mr. Snyder articulated, in that there -- that

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seems to the Court to really be tied closely to this whole

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copyright claim, and how his employment is characterized.

I most certainly am.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

I think what

And

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his tax returns, seems to me, to implicate whether he's an

employee or independent contractor.

a limited extent, that with respect to some of the claims

alleged in the Montgomery parties' Amended Complaint, that,

in turn, Mr. Trepp's tax returns may be a part of that.

But I, I do agree, to

It troubles me, however, that according to

Mr. Snyder, discovery has been taken to try to clarify and

learn what those claims are outlined in the first Amended

Complaint.

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And he's just represented to the Court that it's

so far not clear.

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I'm going to grant the motion in part and deny it in

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part.

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will be required to produce his tax returns.

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so far as, at this point, he will disclose -- produce those

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portions of his tax returns concerning any compensation that

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he's received from eTreppid.

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I'm going to grant the motion in so far as Mr. Trepp

But, only in

Now, what was -- what were the years -- Mr. Snyder,

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you might recall this -- the Court ordered disclosure of

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Mr. Montgomery's returns?

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MR. SNYDER:

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MS. GAROFALO:

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MR. SNYDER:

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MR. PEEK:

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Do you recall?
I believe it was '98 through 2005.

Was it six?
I believe it was six, because there

was a stub year, Your Honor.

THE COURT:

Six.

First part of January.

All right.

Then I'll do the same

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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for Mr. Trepp.

It will be the tax returns from 1998 through

2006.

those tax returns as it concerns income from eTreppid only.

But I am limiting, at this point, the disclosure of

Now, if that -- if you find, if Montgomery's counsel

finds, or Opspring, I should say, engages in discovery and you

want to renew your motion for more tax information, you have

leave to do that.

which I'm going to grant the relief requested.

be the Court's order.

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But, at this point, that's the extent to

MS. GAROFALO:

And that will

Your Honor, may I just seek

clarification --

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THE COURT:

Yes.

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MS. GAROFALO:

-- with respect to the term

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"compensation."

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that Mr. Trepp received certain, perhaps bonuses, perhaps cars

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were paid for, trips.

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of compensation.

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Court as to just what the Court means in its order as to

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compensation.

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I suspect, although, of course, I don't know,

I would include that in my definition

And I would like clarification from the

THE COURT:

All right.

Let's talk about how we

want to define compensation.

Mr. Peek.
MR. PEEK:

Your Honor, I certainly would expect

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that in the preparation of the books, the tax returns for

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eTreppid, LLC, there certainly would have been, if there was

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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income attributed to a car or some other -- something else

associated with the operation of eTreppid, that that would

have been passed through and would have been included in the

Court's request or in the Court's order.

would expect as I look through and review the tax returns,

that that would be included.

THE COURT:

MR. PEEK:

THE COURT:

So, I certainly

All right.
So, I mean, I understand that.
What I'm going to do is, I can't --

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I don't know what the universe of that compensation from

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eTreppid will be, but I'm going to order the parties to, when

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you review those tax returns, sir, you understand exactly --

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MR. PEEK:

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THE COURT:

I do.
-- obviously, what Montgomery --

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what Opspring has asked for.

And to the extent there are

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issues, I urge you strongly to work together to resolve them

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and clarify what constitutes compensation.

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be an issue, you can raise it at the September Case Management

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Conference.

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raise it.

And should there

Montgomery, and Opspring's counsel can certainly

And if you have a problem, we'll resolve it.

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MR. PEEK:

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THE COURT:

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your point is well taken, Ms. Garofalo.

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you want to work today to try to come up with a definition --

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I think I understand.
I don't know what more -- I think

MS. GAROFALO:

But unless the two of

I'm confident Mr. Peek and I can

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

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work out most if not all of the issues related to the tax

return order.

MR. PEEK:

And the Internal Revenue Service

tells us what it is, Your Honor.

Ms. Garofalo and I need to come up with a different

definition.

THE COURT:

MS. GAROFALO:

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MR. PEEK:

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MR. PEEK:

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Good for you, Mr. Snyder.

I know that probably doesn't mean

anything to Mr. Sunshine or Ms. Garofalo.

THE COURT:

Well, just don't get in trouble

because you'd come to this Court.

MR. PEEK:

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misdemeanors, don't you.

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THE COURT:

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MR. PEEK:

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May I have just a minute, Your Honor.

tells me three weeks, Your Honor.

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Thank you, Mr. Sunshine.

Mr. Snyder is going to go to Burning Man, so he

THE COURT:

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Oh, right.

This will take some time to review.

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And my partner, Mr. Sunshine,

must be -THE COURT:

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That occurred to me, but --

just reminded me, could we have a date by which those returns

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I don't think that

That's right.

You get all the

We do.
So three weeks, Your Honor.

that date is from this date.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

Whatever

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THE COURT:

I think that's sufficient.

MR. PEEK:

THE COURT:

MS. GAROFALO:

Is that Labor Day?

Any objection, Ms. Garofalo?
No.

We would just like to have

the information before the depositions, before Mr. Trepp's

deposition.

THE COURT:

MR. PEEK:

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So that three weeks would be

September 8th, if I'm reading the calendar correctly.

THE COURT:

That's correct.

So, Monday,

September 8th, 2008.

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MR. PEEK:

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THE COURT:

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Right.

All right.

And we may do it sooner, Your Honor.

Right.

Very good.

The next issue I would like to take up

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is this question of the privilege log, which I apologize if I

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caused confusion earlier this morning about what I was talking

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about with respect to the July Case Management Report.

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This issue arose, as I think I indicated earlier

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this morning, as a consequence of the assertion by the

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Montgomery parties of a common interest agreement.

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Montgomery parties filed a Motion For Protective Order, which

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this Court denied without prejudice, and we had a discussion

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at the July Case Management Conference about this issue.

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And now this is my recollection, and I haven't -- I didn't,

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over the lunch hour, go back and listen to the tape, but my

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

The

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recollection was we had this -- the Court spent a great deal

of time coming to, trying to understand the Montgomery

parties' position, which is fine.

Then at the hearing, my recollection is that

Ms. Klar said, well, really, she thought it was something

that could be probably fairly easily worked out; that it

did not involve a large number of documents.

recall if she said just a handful.

characterization.

I don't

That might be an unfair

But my recollection was, look, it's not

10

going to be that many documents anyway, and so why don't we

11

prepare these privilege logs.

12

So, the idea was there were two privilege logs.

One

13

supplied in camera to the Court.

14

giving this Court more detail about the subject matter of the

15

items that were asserted the common interest agreement, I

16

guess was asserted -- well, I'll get to that in a minute.

17

And then a different, shorter version would be supplied to

18

everyone else, all of the other parties.

19

one I received.

20

And that privilege log was

And so that's the

And I, of course, read Mr. Snyder's concerns in

21

eTreppid's Case Management Report, which say there's no

22

description of materials withheld; no identity of the author;

23

the date it's written.

24

were versus authors, and the reasons held.

25

There's just -- who the recipients

So, I asked earlier this morning if I could take a

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19

look at that.

would like to make:

are the subject of this privilege log.

issue.

comment about my understanding, my impression from Ms. Klar,

that there would be far fewer that would be the subject of

the privilege log.

And

8
9

And I have.

And here are some comments I

That there are 244 communications that

That's the first

I make that comment in light of my earlier

Two, I'm assuming that, in both my in camera

version -- I can tell you this.

This is no secret.

I don't

10

think it's a big issue -- and in the one provided to counsel,

11

the privilege asserted is just attorney/client privilege.

12

Period.

13

said.

14

a long subject matter category which discusses, describes

15

more in detail the subject matter.

16

other counsel, did not get that.

17

eTreppid and the other parties received, does track, as far as

18

the dates and the participants in the communication.

19

I'm just letting everybody know that.

That's all mine says.

My in camera -- whoever that is needs to stop -- has

20
21

That's all everyone else's

And the other people,

But it does track the, what

And so

Here are some problems that I have as a practical

matter.

22

One, it's out of chronological order, which is --

23

just it gives me a headache with the number of pieces of paper

24

that all of us are trying to contend with.

25

to follow.

So, it's very hard

There are 2006 dates, and then there are 2007.

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20

Here on page 19, 11-15-06.

And that's not helping me.

The other issue that I have is there are, I counted

of the, in these 244 groups of communications, I count 24

people whom I don't believe were represented by Mr. Flynn.

Well, there's Mr. Flynn, that that 24 does not

include Ms. DiMare, Al Rava, but includes all of these other

people.

these people were, who nine of these people are.

of them.

And I did get a sheet that advised me who nine of

So, seven.

I knew two

But there are 13 people I don't know

10

who they are, and why the attorney/client privilege is

11

implicated.

12

And what I do note on these communications, is

13

that -- and so I'm really unclear about what we're doing here.

14

Of the 244 communications, I count four that are simply

15

between Mr. Flynn and Mr. Montgomery or local counsel.

16

four out of the 244.

17

no secret to anybody because the communication participant

18

list of the same -- Edra Blixseth and Michael Sandoval appear

19

on, with a few exceptions -- well, Michael Sandoval not quite

20

so much, but -- and then there are all these other people.

21

don't know who they are.

22

Just

But, I've got, there are lots -- again,

I don't know.

So my question, I guess, is is this the basis -- I'm

23

asking Montgomery's counsel, Montgomery parties -- are you

24

saying, well, these conversations are subject, all of these

25

conversations are subject to the attorney/client privilege

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and, even if they were waived, they're subject to the Common

Interest Doctrine, and so we shouldn't have to produce these?

So, that's my first question.

MS. GAROFALO:

It's my -- I have not reviewed

all of the documents that are listed on the list, but it was

my understanding that in preparation of the list, they focused

on documents that were perceived to be part of the common

interest privilege.

the attorney/client privilege, much the way a joint defense

10

And that was perceived as an adjunct to

agreement is in a criminal matter.

11

There is documentation to and from lawyers to an

12

interested group of people relating to the litigation itself,

13

in which they are all either parties, or have an interest.

14

is my understanding that that is what is reflected, or was

15

intended to be reflected on the privilege logs.

16

THE COURT:

Okay.

For example, just for an

17

example, you don't need to turn to the pages, but here's

18

May 4, '07, Dennis Montgomery, Michael Flynn, and Edra

19

Blixseth.

20

Edra Blixseth, Michael Sandoval, Carla DiMare, Al Rava.

21

In other words, Mr. Montgomery's lawyers are talking to

22

Mr. Sandoval and Ms. Blixseth.

23

It

Here's 12-1-06, Michael Flynn, Dennis Montgomery,

So, 9-27-06, Michael Flynn, Edra Blixseth,

24

Tim Blixseth, Jack Kemp -- the Congressman? -- Michael

25

Sandoval, Dennis Montgomery, Carla DiMare, Phillip Stillman,

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22

Al Rava.

parties are saying that they have with the inadequacy of the

privilege log as to them, I'm just not understanding where the

attorney/client privilege is on a lot of these communications,

and why there isn't a waiver.

the Common Interest Agreement applies.

does not shed any light.

people are.

I mean, so apart from the problems that the other

And if there is a waiver, why

And that is -- so this

And, I don't know who a lot of these

MS. GAROFALO:

Your Honor, what I would propose

10

to the Court is that we, again, table this perhaps until the

11

next hearing, at which time we will review the documents.

12

Mr. Sunshine and I will review the list, narrow it down, try

13

to work out any issues we can with Mr. Peek, and get the

14

Court something that at least makes sense for us to discuss,

15

if there still are outstanding issues.

16

THE COURT:

All right.

Well, the other

17

issue I have, just so you know, is one of the concerns

18

that -- and this is a problem with e-mail communications.

19

certainly -- you can have a seat -- is that in the olden days,

20

when people used to write letters, you had a letter to someone

21

and from someone.

22

so an e-mail might start out from person A to person B, then

23

C, D and E are copied.

24

there are these discussions.

25

And, nowadays, we have e-mail strings.

E responds to A.

And

And

And on it goes, and

So that's a problem, because it's hard -- I can't

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23

discern who the author of these documents is.

the benefit of the in camera longer subject matter, but I'll

just say part of that's not cutting it for me, the long

subject matter, description, in terms of why these shouldn't

be produced.

So what I'll do, unless counsel -- yes, sir.

7
8

And I have

MR. SCHWARTZ:

If I could be heard just briefly

on this issue.

THE COURT:

10

You may, sir.

MR. SCHWARTZ:

On behalf Atigeo, today is the

11

first day we've seen this privilege log in any form.

12

have a couple of concerns.

13

And I

It was not my understanding that the Court was going

14

to take the privilege log and rule on waiver as to specific

15

documents.

16

that the Montgomery parties moved for a protective order as to

17

a broad class of documents.

18

This, procedurally, is a little bit unusual, in

What I thought was happening here was that motion

19

was denied.

20

a privilege log.

21

opportunity to look at that.

22

disagree, sir, but let me just make a point.

23

The Montgomery parties were ordered to produce

And the other parties would then have an
If the -- well, you can

The eTreppid parties then have an issue as to any

24

particular document; or all of them, if necessary.

25

bring a Motion to Compel.

They can

But, there is no standing motion to

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24

compel any particular documents.

THE COURT:

That's true.

MR. SCHWARTZ:

You're correct, sir.

The reason I raised this is

Atigeo, and/or Michael Sandoval individually, may have

concerns with the production of specific documents.

may want to be heard, and we ought to have the right to be

heard, if there is going to be a motion to compel as to those

documents.

And we

I'm not representing to the Court that we do as to

10

anything specific because I've just seen this.

11

Court is going to rule as to production of specific documents,

12

I would like the opportunity for Atigeo and Sandoval to be

13

heard as to those documents.

14

But, if the

So I suggest that, after the revisions, if eTreppid

15

wants to move to compel production, why they're free to do so.

16

But that then allows everybody the ordinary opportunity to be

17

heard.

18

Thank you, Your Honor.

19

THE COURT:

20

MR. PEEK:

Thank you.
Your Honor, I respectfully disagree

21

with Mr. Schwartz, because I think what Mr. Schwartz is

22

looking at is the public privilege log that was supplied;

23

whereas, what the Court is looking at is the in camera

24

submission.

25

actually have the transcript.

And as I understood from the transcript -- and I

And I can certainly confirm to

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the Court that Ms. Klar told the Court, on page 107 of that

transcript, lines 5 through 7, she said:

enormous number of documents, and generally, what the subject

matter relates to" -- that was the in camera submission.

think the Court is addressing the in camera submission.

"That is not an

It was my understanding, contrary to Mr. Schwartz,

that there was a standing order, and what the Court was going

to do was review those in camera to determine whether or not,

one, there was a waiver of the attorney/client privilege;

10

and, two, if there was a waiver, are they covered by the

11

common interest privilege.

12

So I think, respectfully to Mr. Schwartz, I agree

13

with him perhaps the other privilege log which was given to

14

the parties, that may be the subject matter of more meet and

15

confer and motions to compel.

16

it was my understanding from reading the transcript, is that

17

that was a submission that was going to the Court, and the

18

Court was going to then rule on that in camera submission and

19

compel them or not compel them.

20

But, the in camera submission,

And with respect to the proposal that there be a

21

further submission, I'd certainly -- if Ms. Garofalo thinks

22

that she can narrow this down, I welcome that opportunity.

23

welcome the opportunity, certainly, to meet and confer with

24

her further.

25

log which you have in camera is insufficient.

But, what I would suggest is that the privilege

KATHRYN M. FRENCH, RPR, CCR

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26

and I hate to impose this on the Court, is the actual

documents themselves are the ones that should be submitted

in order for the Court to determine whether or not they are

the subject matter of the common interest privilege, and the

attorney/client privilege.

Court referenced for example, why is Congressman Kemp --

THE COURT:

MR. PEEK:

Because it's only then, as the

I don't know if that's who it is.

That's who it is, Your Honor.

represent to the Court that that is who it is.

I can

Why is he, why

10

is Tim Blixseth, who is now the estranged husband, and maybe

11

now the divorced husband of Edra Blixseth, there as well?

12

So, there's a lot of waiver issues.

And,

13

respectfully, Your Honor, as the Court knows from the

14

pleading, if you go back and look at the Request For

15

Production, and responses to the Request For Production,

16

there was no objection at all in that response to request

17

for production with respect to a common interest privilege.

18

That request was extant in November of 2007.

19

recently that, suddenly, an epiphany, a light bulb went off,

20

and they said, oh, by the way, we don't have to produce

21

because of this.

22

And it's only

Again, it's just one more of those indicia of delay.

23

And well, I didn't like -- we didn't get what we wanted here.

24

Let's try another round here.

25

the opportunity to meet with Ms. Garofalo or Mr. Sunshine to

And so I think that I welcome

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27

see if we can narrow it.

what the Court has.

THE COURT:

However, I don't have the benefit of

Well, what I'm noting, I'm just

looking at my court record, my docket 760.

after I say what we're doing, I say:

It just says,

"The Court notes for the record that notwithstanding

the production of the privilege log, the Court reserves its

determination whether the Montgomery parties have waived their

assertion of the Common Interest Doctrine."

10
11

I mean, that's all I -- and I might have said a lot

more.

12

MR. PEEK:

Well, but that's what I understood,

13

too, Your Honor, to say.

14

today, if we're here to address that.

15

to reserve that until it gets further opportunity to review --

16

THE COURT:

So that would result in a ruling

Well, right.

But if the Court wants

But one thing that

17

troubles me is what Mr. Schwartz has said, is he just got this

18

today.

19

Is that right?

20

MS. ROBB-PECK:

21

MR. SCHWARTZ:

22

THE COURT:

23

Yes, Your Honor.

Yes.

You just received the privilege log?

I thought everybody was supposed to receive it.

24

MS. ROBB-PECK:

25

THE COURT:

Your Honor, that was --

You asked for it, Ms. Robb-Peck.

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MS. ROBB-PECK:

I did.

I specifically asked.

And while I don't want to cast aspersions on anyone, the

discovery has been going hot and heavy between these parties

for a long time.

defendants get left out.

THE COURT:

You didn't get one either, Ms.

MS. WELLS:

No.

MR. SCHWARTZ:

And the government and the third party

Wells?
Not until this morning.
And, Your Honor, the issue is

10

also, specifically, it's not just that we don't have the

11

identification of the documents --

12

THE COURT:

13

MR. SCHWARTZ:

14

I know.

-- we need a chance to look at

these documents to the extent we have them.

15

THE COURT:

16

All right.

17
18

I know.

I get it.

MR. PEEK:
sets.

I know.

I know.

I understand.

But we're still dealing with two

We're dealing with the in camera --

19

THE COURT:

I understand.

20

MR. PEEK:

21

THE COURT:

22

MR. SCHWARTZ:

-- and the other set.

I understand.
With all due respect, Your Honor,

23

I don't think that's an accurate characterization.

24

Honor knows what happened at the last --

25

THE COURT:

What's not accurate?

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

But, Your

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29

MR. SCHWARTZ:

You've got two -- if I -- well,

I'll let the Montgomery parties respond to this, but you've

got two privilege logs.

4
5

One just has more detail.

THE COURT:
thing.

That's right.

They're the same

One has more detail.

MR. SCHWARTZ:

regarding production.

And --

We have a motion to assert a privilege.

THE COURT:

10

We don't have any standing order

That was denied without prejudice.

MR. SCHWARTZ:

Correct.

And so now if eTreppid

11

wants to move to compel something, they're certainly free to

12

do so.

13

my client can respond to.

14

But, there's nothing specifically on the table that

So, with that, I'll submit.

15

THE COURT:

I understand.

16

MR. SCHWARTZ:

17

THE COURT:

Thank you.

Okay.

First of all, this is --

18

there are, there's the government, and then there's

19

Mr. Sandoval and Atigeo.

20

that everyone else is given.

21

Ms. Robb-Peck made a specific request, please give

22

whatever everyone else is getting.

23

happen.

24

case.

25

They are to be given the

papers

In fact, at the July hearing,

us

And that, again, did not

This is the last time that's going to occur in this

And if it happens again, I will issue sanctions.
It's not fair -- Mr. Sandoval, in particular, his

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name is all over this privilege log.

that his attorneys saw it.

I mean, and I assumed

Yes, sir.

MR. SCHWARTZ:

I apologize for interrupting.

Just to be clear, Your Honor, I do welcome the Court's

admonition to the parties about including us, so we're not

the red-headed stepchild.

things from eTreppid.

Court's admonition is clear that all parties need to include

10

But, we have also not received

And so I want to be sure that the

us in whatever happens.

11

THE COURT:

Oh.

12

MR. SCHWARTZ:

13

MR. PEEK:

All right.

Thank you.

Your Honor, with respect to

14

Mr. Schwartz's comment that these are not the subject of a

15

motion to compel, I remind the Court that in eTreppid's

16

RFP two, request number 26, we asked for all communications

17

e-mails, et cetera, to Sandoval, Blixseth.

18

THE COURT:

19

MR. PEEK:

20
21

February 21st.

And that was ordered.

That was the Court's order

So -THE COURT:

And that, the Court -- the

22

Montgomery parties said we don't understand for sure what

23

you mean by that.

I'm just --

24

MR. PEEK:

Well, that was part of it.

25

THE COURT:

Well, wait, wait, wait.

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31

1
2

And so, on Friday, I said, no, produce everything in

their entirety.

And that is, that order is here.

But, listen, we need -- we have other business to

attend to.

This is what I'm going to do.

I am going give

the Montgomery parties one last opportunity to review the

documents they've identified in their privilege log.

have outlined the deficiencies the Court finds from the in

camera documents I received.

people are.

And I

I don't know who many of these

I don't know what Common Interest Agreement there

10

is.

11

I mean, I have obvious problems with what's been provided.

12

It's insufficient.

13

So if this is what is being provided, I'm not finding --

It is imperative that all the parties, henceforth,

14

receive everything everyone else does.

15

goes to everyone.

16

interest in the subject of the privilege log, so he should

17

have gotten it, long before now, as should the government.

18

There's just -- all right.

19

And so that admonition

And, obviously, Mr. Sandoval has an

So I'm going to -- it is my belief, as Mr. Peek has

20

stated, that with respect to e-mails in this litigation, the

21

Court has ruled on the e-mails, in so far as they are e-mails

22

that were the subject of requests for production number 26.

23

can't remember which set whether it was one or two.

24

MR. PEEK:

25

THE COURT:

RFP two, Your Honor.

Request For Production two.

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The

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32

Court ruled on that, and ruled again on Friday.

get one last shot, the Montgomery parties, at revising their

privilege log, if they wish to assert these privileges.

to the -- now, if Mr. Sandoval -- if counsel for Atigeo and

Mr. Sandoval -- I don't -- was Atigeo a party when --

MR. PEEK:

So counsel

They were not, Your Honor.

And

When

the Court's orders were entered in February, they were not a

party.

THE COURT:

10
11

MS. ROBB-PECK:

MR. PEEK:

13

THE COURT:

15

We hadn't been served, I don't

believe.

12

14

Right.

That's correct.
Right.

I don't think you had been

served.
Well, let's see what happens with that.

And then

16

if you want -- what I want in September is the revised

17

privilege log that needs to be produced within two weeks.

18
19
20

What date is that, Miss Clerk?

THE CLERK:

Your Honor, that's actually, Monday,

September 1st, which is a holiday.

21

THE COURT:

Oh.

Well, make it the 2nd.

22

THE CLERK:

Tuesday, September 2nd.

23

THE COURT:

Tuesday, September 2nd, to all

24

counsel, the short form.

25

you have to identify who these people are.

But, it's got to be clearer.

And

And you have to,

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if you're asserting some attorney/client privilege, or you're

saying there's a Common Interest Doctrine, you have to say

why you're asserting it.

documents.

Otherwise, you're producing the

However, if Mr. Schwartz, on behalf of his counsel

has concerns and wants to move for a protective order, or

you feel that your client has some concerns that are being

implicated, you can bring a motion --

MS. ROBB-PECK:

10

THE COURT:

Thank you, Your Honor.

-- to raise that issue.

And then if

11

you can resolve it, fine.

12

And at the September Case Management Conference, I'll address

13

them.

14

MR. PEEK:

If not, you can all file reports.

Do I understand, Your Honor, that

15

there will be supplements to both?

16

privilege log, as well as the Court's in camera privilege log.

17
18

THE COURT:

Yes.

I'll call it the public

There will be supplements to

both that address the concerns I've outlined.

19

All right.

Ms. Garofalo, do you have any questions?

20

MS. GAROFALO:

21

THE COURT:

I don't, Your Honor.

Thank you.

Well, I think that concludes the

22

matters that concern the Court as to the case management

23

issues.

24
25

And we're now prepared, the Court is now prepared to

proceed with the Continued Order to Show Cause hearing.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

Just

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34

let me take a minute to let myself get organized.

All right.

The order I'm referring to, as

counsel get prepared, is my timekeeping order.

interested in keeping time.

It states:

I've become

The order is docket number 659.

"ETreppid shall have 6.5 hours to present evidence

and to call the following witnesses:

Warren Trepp; Jonathan Karchmer; and Len Glogauer.

Dennis Montgomery;

"The Montgomery parties shall have six hours to

10

present rebuttal testimony, including Dennis Montgomery;

11

Fulcrom inquiry representative; FTC consulting

12

representative."

13

So what I'm going to do is keep the time.

It does

14

not matter to me how counsel for the parties uses your time.

15

In other words, I'm assuming that you'll be calling all of

16

these witnesses.

17

know I'm keeping the time carefully.

18

up, your time is up.

19
20
21
22

But, it's up to you.

I'm just letting you

And when your time is

All right?

Mr. Peek.
MR. PEEK:

That's the full six-and-a-half hours,

whether I use it with one witness or three witnesses?

THE COURT:

Well, I'm assuming that your

23

representations to the Court were that you would have a

24

certain amount of time for Mr. Montgomery, and then you

25

planned to call these three others.

So, I mean, I would

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35

assume that's still the game plan.

MR. PEEK:

I'm going to attempt to finish

it in two hours.

two-and-a-half, I may just have to shorten somebody else.

5
6

THE COURT:

That's fine.

Short somebody else.

That's fine.

7
8

But to the extent that perhaps I go to

All right.

So are you prepared to proceed,

Mr. Peek?

MR. PEEK:

I am, Your Honor.

If I could just

10

have a moment to pass out -- so that we don't consume that

11

time -- the exhibits binders.

12

Court --

13

THE COURT:

14

MR. PEEK:

15

THE COURT:

16

MR. PEEK:

You may recall that the

Oh, yes.
Those were returned to us.
Go ahead.
So I'm just going to take a moment to

17

have those passed out to everybody.

18

for the Court.

19

other parties.

One for the clerk.

20

THE COURT:

21

MR. PEEK:

22

THE COURT:

I have six copies.

One

And then four for the

All right.
Ready, Your Honor.
Before you proceed, sir, I asked

23

the clerk of the court to let us know the status of the Court

24

exhibits, and any other exhibits that either were offered or

25

we need to have admitted.

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1
2
3
4
5
6
7
8
9

So, Miss Clerk, can you report on that, please.

THE CLERK:

Yes, Your Honor.

hearing, defendant's exhibit 1 has been marked, not admitted;

At the June 24th hearing, exhibit, defendant's
exhibit 6, 9, and 31 marked.

exhibits 1, 2, 3, 4, 5, 6, 7, 9, 12 and 16 have been admitted.

MR. PEEK:

I'd move for the admission of 1, 6,

9, and 31, Your Honor.

THE COURT:

11

MR. SUNSHINE:
to look back at those?

Any objection?
Your Honor, may we have some time

We can't remember those --

13

THE COURT:

14

MR. SUNSHINE:

15

Not admitted;

And at the same June 24th hearing, the Court's

10

12

At the June 10th

Sure.
-- by number.

Can we get back to

the Court on that?

16

THE COURT:

17

MR. PEEK:

18

THE COURT:

All right.

Yes.

They're the same number -They're defendant's, just so you

19

know, 1, 6, 9, 31 were marked, but not admitted.

So we can --

20

Miss Clerk, can you just remind us in the morning --

21

THE CLERK:

Yes, Your Honor.

22

THE COURT:

-- that we need to try again.

23

THE CLERK:

Yes.

24

THE COURT:

All right.

25

And, counsel, I'm going

to defer this to allow Mr. Sunshine and Ms. Garofalo until

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tomorrow morning to also look at this.

And also, Mr. Peek, and counsel, with respect to the

Court's exhibits, they're, I guess, exhibit, Court's exhibit

10, 11, 13, 14, 15, 17, and 18 were not admitted.

don't -- I anticipate there's no objection to that, but please

take this afternoon, this evening to check that out.

we'll report on that in the morning.

8
9
10

MR. PEEK:

I have no objection.

And I

And

I remember what

they are.
I'm reporting to the Court as well, Your Honor, and

11

I'll have to let Mr. Sunshine know, apparently, when we were

12

reprocessing and adding exhibits for today's hearing, that

13

there may have been a change to some of the numbering.

14

I apologize to the Court for that.

15

request for admission of 1, 6, and 31, until I can clarify

16

whether or not we changed those numbers.

17

THE COURT:

18

MR. PEEK:

19
20
21

All right.
Because I don't want Mr. Sunshine to

THE COURT:

Okay.

So we'll defer, and we'll

take care of this housekeeping matter in the morning.

MR. PEEK:

23

THE COURT:

25

So, I will defer my

say, well, I looked at 1, 6, 9, and 31 --

22

24

And

Okay.
All right.

So the time is 2:35.

You may call your witness.

MR. PEEK:

Mr. Montgomery is on the stand,

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Your Honor.

THE COURT:

Mr. Montgomery, please.

3
DENNIS MONTGOMERY,
called as a witness on behalf of the Defendant,
was sworn and testified as follows:

4
5
6
7

THE CLERK:

Please state your full name for the

record.

THE WITNESS:

THE CLERK:

10
11
12

Dennis Lee Montgomery.

Thank you.

Please be seated.

DIRECT EXAMINATION (resumed)

BY MR. PEEK:
Q

Mr. Montgomery, when we had left off on June 24th, I

13

had been discussing with you the e-mails that you had

14

produced that you claim, that you said were responsive to

15

our requests for all e-mails provided to media, whether it be

16

the Wall Street Journal, New York Times or NBC news.

17

Do you recall that from two months ago now?

18

Yes.

19

And that was Exhibit 9.

20

And then we certainly had Exhibit 9 and replaced and

21

redacted.

So if the clerk could hand him Exhibit 9.

22

in Volume II.

23

Okay.

What page?

24

Just the exhibit itself, sir.

25

All right.

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1
2

I'll be asking you some questions about it, but I just

wanted to have it available to you.

Some preliminary questions.

We all know that

there were e-mails delivered to the Wall Street Journal and

NBC News, do we not?

I believe so.

And your testimony has been that you don't know yourself

whether or not you delivered those to Mr. Wilke -- and I'm

just going to deal with Mr. Wilke first -- or whether

10

Mr. Flynn did that.

11

Is that correct?

12

Yes.

13

Have you had any opportunity to go back and review any

14

of your correspondence, or documents of these, particularly,

15

to determine whether or not it refreshed your recollection as

16

to whether it was you or Mr. Flynn who delivered those to the

17

Wall Street Journal?

18

No.

19

Okay.

And I think you told us, and I just want to make

20

sure that I'm correct, is that all of these e-mails came,

21

originally, from your computer.

22

Am I correct?

23

No.

24

Okay.

25

I don't believe I said that.

You said that they had been placed in some kind

of -- well, your commuter, or some other form of electronic

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media.

Is that correct?

I believe so.

In other words, Mr. Flynn didn't have these in his

5
6
7
8
9

possession at a time before you did?

A

Before I did?

Uh, I don't -- I don't think I understand

the question.
Q

Well, you had the e-mails in some electronic form, did

you not, before --

10

Yes.

11

-- Mr. Wilke ever came into the picture?

12

Yes.

13

Okay.

14

Yes.

15

And on what type of media or storage did you have the

16

And you had them in electronic form, did you not?

e-mails?

17

I think it was a disk storage.

18

And has that disk drive been produced?

19

No.

20

And where is that disk drive?

21

Well, I'm still going through the rest of the drives.

22

Okay.

So in the last two months -- well, actually, since

23

at least February -- or excuse me, since November, when the

24

request was sent out, you have still been unable to review all

25

of the hard drives to determine on what hard drives you may

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have kept the e-mails --

That's correct.

-- you received, or you took from eTreppid?

That's correct.

Okay.

6
7
8
9
10

And what is your explanation for not having done

that, despite the Court's orders?

A

Because I've been working on the protected information

under the Protective Order.

Q

Okay.

And I believe you have submitted some hard drives

to the government, with respect to that?

11

Yes.

12

Okay.

Do you still have the media -- excuse me, the hard

13

drives which contained all of the e-mails that were taken by

14

you and put on these hard drives?

15

I'm not certain if that's the case or not.

16

Okay.

17

And what would have happened to all of the

e-mails?

18

You mean the hard drives?

19

Yeah.

20

I mean, they could have fail.

21

Hard drives or whatever.

We have a number of drives

that are dead.

22

Okay.

23

I don't know.

There's a lot of information.

24

been a lot of drives.

25

have been in multiple people's hands.

There's

And as I've stated before, the drives

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1
2

Okay.

But you now have them in your hands, is

that correct?

Well, I think the one that --

I'm talking about all of the e-mails, the original

complete e-mails, PST files in native format; you have all

of those, do you not?

Have all of those e-mails?

Yes, sir.

No.

10
11
12

I didn't say that.

correctly.
Q

Okay.

Well, where did those e-mails originate that were

then provided to somebody to provide to Mr. Wilke?

13

Off a drive.

14

Okay.

15
16
17
18

If I did, I didn't say it

Off a drive.
And were those the complete, original e-mails, the

PST files in native format?

A

I don't understand.

I don't -- restate the question

again.

19

Do you know what a PST file is?

20

Yes, I do.

21

You know what a complete original is?

22

You mean a PST file?

23

Yes.

24

Okay.

25

And native format, you understand that?

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The PST file.

In native format; meaning it has all the metadata

associated with it.

Yeah.

Where are those?

The, uh -- I, I found one, one drive recently.

And I

was about to produce it, but I ended up doing the Source Code,

to try to get that part done today.

And when did you find that one drive?

10

Um, about two weeks ago.

11

And when did you begin to look for those drives that

12
13
14
15

contained the original PST files in native format?

A

Well, what I've been looking for is all the stuff under

the Protective Order.

Q

That's not what I asked for, sir.

16

When did you begin to look for the PST files in

17

native format that were the subject matter of the request to

18

produce?

19

In February.

20

So February, until today, you have only recently located,

21

in the last two weeks, a Drive that may contain some of those

22

original PST files in native format?

23

That's correct.

24

And do you have an explanation as to why you were unable

25

to locate it from -- in the last, well, six months?

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I've been going through the drives one by one.

Okay.

And you recently produced, I believe, 21 hard

drives.

You are aware of that, are you not?

Yes.

And were those hard drives that you produced hard drives

that had, that you obtained through your backing up of the

various computers at eTreppid?

These are not the FBI ones, I presume.

10

what -- I would say, yes.

11

that you're referring to.

12

Okay.

I, I don't recall

I think I, I understand the ones

So the 21 that were recently produced were, came

13

from backups that you had taken from the eTreppid computers,

14

is that correct?

15

They were backups that were made.

16

Backups that you made, or backups that others made?

17

I don't recall who, who made them.

18

Okay.

But somebody made them?

19

Yeah.

Yes.

20

And I think we went through this before, but I'll ask it

21

again, is that wouldn't you expect to see PST files on these

22

backups, these 21 hard drives?

23

No.

24

Why not?

25

Because most of the time the file was open and it was

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passed over.

And so most of the time, but not all of the time.

That's probably correct.

Okay.

So there should be some PST files in the backups,

should there not be?

Yes.

Okay.

And did you look through any one of these 21 hard

drives to determine whether there were or were not any PST

files?

10

Yes.

11

And did you find any?

12

No.

13

And did do you have an explanation as to why you found no

14

PST files from the 21 hard drives that you obtained from the

15

backing up of the various computers from eTreppid?

16

Restate that.

17

I'm sorry I'm insulting you to restate the question.

18

You're not insulting me.

19

But, well, you make faces every time I ask you a

20

question.

21

Well, it's because I think the question was clear.

22

Obviously, it wasn't clear to me.

23

I'll ask it again to make it clear to you.

24
25

And I'll ask

it exactly the same way I asked it before, if I can.

You told us that you took backups of all of the

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computers, correct?

I said I made backups.

You told us that during the course of the backups that,

from time to time, there would have been backups of the e-mail

folders which are PST files, correct?

That's correct.

What explanation do you have that, on the 21 hard

drives that you obtained from making backups of the eTreppid

computers, from time to time, why there are no PST files on

10
11
12
13
14

there?
A

Because at some point they may have been transferred onto

another drive.
Q

Well, is that they may have been, or they were

transferred to another drive?

15

I don't recall either way.

16

So the only explanation you have as to why there are no

17

PST files on these 21 hard drives recently produced, is that

18

they may have been transferred to another hard drive?

19

Yes.

And I told you I found one recently.

20

I understand you found one recently.

But I'm just trying

21

to understand, sir, that your only explanation for there not

22

being any on the 21 hard drives, is that you may have but --

23

you don't know whether you did, transfer PST files to another

24

hard drive?

25

I wouldn't say that's the only explanation.

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Well, what other one is there?

They've not been in my possession the entire time.

Are you suggesting that somebody may have deleted the PST

files from that?

I don't know that for a fact either way.

Okay.

through the list you gave me before.

8
9

And so, who, besides yourself -- well, let me go

One, they weren't in the possession of the FBI,

those 21 hard drives?

10

No.

11

That's correct?

12

That's correct.

13

Okay.

14

So the FBI wouldn't have done anything about them,

correct?

15

That's correct.

16

And I think the other people that you described to us,

17

from time to time, who may have had possession of these are

18

your lawyer, Michael Flynn -- that's one?

19

Yes.

20

Secondly, would be Michael Flynn, Junior?

21

That's correct.

22

And I don't believe there's anybody else that you told

23

us.

24

Yes.

25

Is that correct?

Nobody else?

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No.

Who is that?

Al Rava.

Excuse me, Al Rava?

There is another person.

That's a new name that we haven't

heard before.

Who a Al Rava?

Well, he was an associate of Mr. Flynn's.

So he was your lawyer?

That's correct.

10

Are you suggesting that any one of those three

11

individuals may have deleted the PST files from the 21

12

hard drives?

13

I'm not suggesting that either way.

14

Okay.

Well, you're suggesting that people who had

15

possession of it may have compromised those hard drives.

16

So the only --

17

You've asked me --

18

-- information is somebody deleted the PST files?

19

You asked me for another possibility.

20

Well, is that a possi -- just sort of a -- there's always

21

a possibility.

I gave you one.

Is there a real reasonable probability that --

22

I wouldn't rule out anything with Mr. Flynn.

23

Okay.

24
25

And when was it that you gave Mr. Flynn the

backups for the eTreppid computers?

A

You mean the backup drives that I had?

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1
2

The backups drives that you had, that should have

contained PST files.

A few days before the raid on my home.

Okay.

5
6

And then for how long did he have them in his

possession?
A

Um, that may not be accurate.

Can you ask the previous question again.

When did you give them to Mr. Flynn?

All right --

10

You said a few days before the raid.

11

It may have been before that.

It may have been -- some

12

of them may have been when I first met him in late January or

13

early February of '06.

14

Okay.

15

So sometime, again, prior to the raid.

And for how long did he keep them?

16

I would say five or six months.

17

Okay.

18

And then what happened to them after Mr. Flynn had

them in his possession?

19

Didn't we go through --

20

We did with respect to the FBI inventory.

21

I think you did.

22

I didn't go through it, however, with everything else

23

that you had.

24

I think you did, but I'm --

25

I went through it with respect to the hard drives; the

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terabyte and the 500 gigabyte.

with the more recent 21 hard drives you just produced.

3
4

But, I did not go through it

I don't -- what do you mean the terabyte?

I'm not

being --

You produced, sir, in May --

Oh, yeah.

-- one terabyte hard drive, and one 500 gigabyte hard

drive, sir.

You're right.

10

You told us, and I went through the examination with you

11

there --

12

Okay.

13

-- where the data had been.

14

And you gave us an

explanation.

15

So are you going to tell us that the same

16

explanation that you gave me and this Court, in the two

17

June hearings, would be the same explanation that you would

18

give today?

19

I'm trying to short circuit it, if I can.

20

No.

21

No?

22

Well, I don't have my exact explanation.

23

It was a different explanation.

See, the facial expressions really gets annoying.

24

I'm sorry it gets annoying to you, sir, but that's me.

25

Uh --

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Your evasiveness bothers me, too.

MR. SUNSHINE:

THE COURT:
Go ahead, Mr. --

THE WITNESS:

All right.

I'm not trying to be evasive,

THE COURT:

I know.

Mr. Peek was alluding to.

He's now clarified it.

ahead and answer the question, sir.

11

BY MR. PEEK:
Q

What happened to them after that?

A

I think -- I thought I said five.

15

THE COURT:

16

THE WITNESS:

17

You said five to six.

Okay.

you're referring to the father?

19

BY MR. PEEK:

21
22
23

Five to six months.

Uh, they were moved to Seattle -- well, Mike Flynn,

18

20

So, go

They were in Mr. Flynn's possession for six months.

13
14

All right.

I think we're -- you had some confusion about what

10

12

All right.

Your Honor.

Your Honor --

You said -- I thought you meant Mike Flynn, your

attorney, is who you gave them to -A

Yes.

But, he put them in a storage facility that was

under was Al Rava's name in San Diego.

24

Okay.

25

So I don't want -- at least that's what I was told it

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was.

I don't -- I really don't know that for a fact but, I

mean, that's what I was told they were.

Let me just ask a quick question then.

Yes.

Is that true then of all backup drives, including the

data that was produced to us on the terabyte drive and the

500 gigabyte drive, is they were put in a storage unit under

Al Rava's name in San Diego?

9
10
11
12
13

Uh, I'm thinking.

is that's correct.
Q

Okay.

16

Yes.

And then they, they stayed there for five to six

months?
A

I don't know.

14
15

I'm not -- I think the answer to that

I'm thinking.

It was roughly that amount of time.

Q

Okay.

So that would put us sometime in August, September

of 2006?

17

Six; that's correct.

18

Where did they go from there?

19

Seattle.

20

In your possession, or in somebody else's possession?

21

Uh, they were -- there were three scenarios.

One, there

22

was a storage facility in Seattle.

You know, a commercial

23

storage facility.

24

and kept them with him in a storage facility in Portland,

25

Oregon.

Michael Flynn, Junior took them originally,

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1
2

Okay.

So there are three locations, now, of these hard

drives at one time?

You mean -- not now.

You mean at the time.

At that time that they were returned to you from the

storage facility rented by Mr. Rava in San Diego, you said

they were returned, and then they wound up in three other

locations.

8
9
10
11

Was this all -- were they separated at that time

into three lots?
A

No.

I would just say, generally, they were separated.

Not necessarily for any specific reason.

12

I didn't suggest for any specific reason.

13

I, I --

14

You said there were three lots.

15

Well, they were originally, probably, put into, into --

16

when they were moved to Seattle, they were put into a storage

17

place originally.

18

into Portland, where I described to you.

19
20

And then Michael Flynn moved them himself

THE COURT:

Excuse me.

Was that Michael Flynn,

Junior?

21

THE WITNESS:

22

THE COURT:

23

THE WITNESS:

Junior.

Junior.

Thank you.
And, subsequently, they came back,

24

at some point, and were kept at the office.

25

BY MR. PEEK:

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Which office?

Opspring.

Where?

In Seattle.

In Bellevue?

Yeah.

You told us Bellevue, so I want to make sure that's

clear.

Yeah.

10

So they remained -- they went to a commercial storage

11

facility in Washington first, correct?

12

Yes.

13

And then all of the hard drives went to Mr. Flynn.

And

14

you believe he separated them and kept some in his home, and

15

some in the storage facility in Portland, Oregon, is that

16

correct?

17

But I'm -- I'm -- that's correct.

18

Okay.

19
20
21

And then sometime after that, they were all

returned back to you?

A

Right.

Well, they -- that's correct.

I moved back from

Seattle down into Palm Springs.

22

And that's --

23

Everything came back.

24

The Rancho Mirage?

25

Yes.

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When did that happen?

I believe August of '07.

THE COURT:

THE WITNESS:

5
6
7

Yes.

BY MR. PEEK:
Q

So since August of '07, these hard drives have been in

your custody and control, is that correct?

Yes.

Okay.

10

Be a year ago?

And when the hard drives were first created, did

they include PST files?

11

I don't recall if they did or not.

12

Well, you said that when you took backups, that there

13

were -- there should have been some PST files on some of the

14

hard drives?

15
16
17
18

Most of the time they were open, so they never got pack

backed up.
Q

Okay.

Yes.

20

Okay.

22

But some of the time they were not open, and you

took them?

19

21

I said that.

So there should be PST files on some of these hard

drives, should there not?

A

No.

You asked me for an explanation and I thought I

23

said there's a possibility they were moved, at one point, on

24

to another drive.

25

When did you transfer them to the other drive?

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I don't recall specifically when that happened.

Did you in fact transfer all of the PST files to

3
4
5
6
7

another drive?
A

I don't remember doing that.

I'm not saying it didn't

happen.
Q

Okay.

So you have no recollection of whether you did or

did not?

That's correct.

And when you then were going to find the e-mails that

10

were ultimately provided to the Wall Street Journal and

11

NBC News, where did you find those e-mails?

12

You mean where did I get them off of?

13

Yes.

14

Off a hard drive.

15

Okay.

16

And is that the hard drive to which you

transferred them?

17

I don't know if it was or not.

18

But you at least have a recollection that you transferred

19

from a hard drive, the original PST files, with -- in native

20

format?

21

Most.

22

Off of this hard drive on to some other --

23

Most all the files at some point were transferred, if not

24

once, more than once, because the drives -- the original, the

25

very original drive from '98 or '99 might be a 40 gig drive.

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And, obviously, at some point, it got transferred on to an

80 gig drive and upwards.

Okay.

So are you telling this Court that, from time to

time, the -- well, are the hard drives that you produced, are

they the ones that you took from the backups, or are they

copies of some other drives?

It could be either.

So you don't know.

Well, ask your question again, specifically, what you're

10
11

asking.
Q

Well, you were telling us that you don't know

12

what capacity the hard drives had at the time you were

13

doing the backups.

14

In 1999, obviously, there was no 300 gig drive.

15

I'm just asking about the hard drives that were produced

16

now.

17

Okay.

18

Those are the 21 that were produced that have no PST

19

files.

You said, at some time, they may have had PST files on

20

them, correct?

21

It's possible.

22

Okay.

23

Yes.

Because, at some time, somebody's e-mail may have

been closed, correct?

24

Yes.

25

Or you may have gone to somebody in the office, like

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Mr. Glogauer, and said, Mr. Glogauer, close your computer down

because I'm going to do a backup.

Not necessarily.

But do you remember doing that, from time to time, with

No.

Very rarely ever did that.

Mr. Glogauer?

No.

You testified that you didn't ever do it or --

I don't recall.

-- you just don't remember.

10
11

Okay.

Getting back now to the e-mails that were

provided to the Wall Street Journal --

12

Right.

13

-- and to the NBC News.

14

Those came off of a hard drive,

correct?

15

Yes.

16

And were those complete PST files in native format?

17

I don't know if they were or not.

18

They were originally, when you did backups of them, they

19

had complete PST files in native format, did they not?

20

Probably.

21

Okay.

Yes.

And are you telling us that that -- that they --

22

that those complete PST files in native format no longer

23

exist?

24

I don't know.

25

Okay.

And certainly because you did produce e-mails to

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NBC News and to the Wall Street Journal, one could conclude

from that that you had them on those backup drives, correct?

I didn't say I produced them.

Excuse me?

-- directly.

But somebody produced them to them.

10
11

When they were made available to somebody to give to

the NBC News, they came from you, did they not, sir?
A

No.

I wouldn't say that either, sir.

It could have been

Mike Flynn.

12
13

I'm not saying that

you produced them.

8
9

Meaning --

You asked me this question before -Q

No.

What I'm talking about is the original e-mail,

14

before it ever got to NBC News or the Wall Street Journal,

15

you had them in your possession on the hard drive, did you

16

not?

17

I'm not certain that's the case.

18

Well, where did the e-mails that were given to the Wall

19
20

Street Journal and NBC News, where did they come from, sir?
A

I think I know your what you're asking.

21

to be evasive.

22

had possession of them.

23
24
25

I'm not trying

What I'm trying to say is Mike Flynn may have

That's not what I'm asking, sir.

I understand that

Mike Flynn may have had possession.

I'm just saying, at some time, there were e-mail

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PST files on a hard drive, correct?

Yes.

And one would obviously conclude from the fact that you

gave, or that -- excuse me, that e-mails were provided to

NBC News and the Wall Street Journal, that they had to come

from you originally, correct?

No.

Those -- then did somebody else hack into the eTreppid's

system and take those e-mails off of the individual computers?

10

I don't know.

11

Go ahead --

12

Do you want -- very early on, Michael Flynn may have had

13

But I just told you, at some point --

possession.

14

Sir, that's not my question.

15

Well, then I don't, obviously, understand it.

16

Well --

17
18

THE COURT:
asking --

19

MR. PEEK:

20

THE COURT:

21
22

I thought it was simple, Your Honor.

All right.

Aren't you asking this

question, and then maybe we can -- this will be helpful.

Here are e-mails that come from eTreppid.

23

MR. PEEK:

24

THE COURT:

25

Well, let me -- Mr. Peek, aren't you

Correct.
And someone had those e-mails to

start with.

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1
2

MR. PEEK:

THE COURT:

MR. PEEK:

THE COURT:

That's not what -- yeah, yeah.

I know.

And you don't care about

that.

MR. PEEK:

THE COURT:

10

Down the road, other people might

have been given copies of those e-mails.

That's what I'm

trying --

3
4

That's right.

I don't care -You don't care who, down the road,

might have gotten them.

11

You said, in the beginning, there were these

12

e-mails.

And that's what you're -- when you talk about

13

possession of the e-mails, that's what --

14

MR. PEEK:

That's what I'm talking about.

15

THE COURT:

16

THE WITNESS:

Is that what you're talking about?

If you're asking me did I have

17

possession of PST files that may have contained those

18

e-mails --

19

MR. PEEK:

20

THE WITNESS:

21
22

Yes.
Yes.

BY MR. PEEK:
Q

Okay.

So all of the e-mails that we have in Exhibit 9

23

that you have in front of you, you had, at one time, the

24

complete PST file in native format, correct?

25

I believe so.

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1
2

Okay.

And not only did you have those e-mails, you had

other e-mails as well, did you not?

Yes.

Okay.

And those e-mails, you're telling the Court now,

today, may have been transferred from the 21 hard drives you

recently produced, and may be even off of the terabyte hard

drive and 500 gigabyte hard drive you produced, to another

hard drive, correct?

I don't know if that's accurate.

10

Okay.

11

Well, there was no terabyte drive at the time of

12

Well, then --

eTreppid.

13

I know that.

14

Okay.

15

But, the files that you transferred on to that one

So --

16

terabyte hard drive to produce, came from backups, did

17

they not?

18

Yes.

19

Okay.

20
21
22
23

And the hard drive that you produced, the 500

gigabyte, also came from the backups as well, did it not?

A

No, I -- you mean were backups put on those drives?

Is

that the question?

Q

The question is did they, did the data that appears on

24

the 500 gigabyte come from the backups that you performed from

25

time to time at eTreppid?

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Yes.

Okay.

And none of those hard drives that you produced

recently, the 21, nor the two that you produced in May,

contain PST files.

We've established that, correct?

Correct.

I want to know is it then your position that all of the

PST files were transferred on to another hard drive?

I would say it's possible.

10

Okay.

11

Well, what you're describing, if it is true, they

12
13

Is it just possible, or is it more probable?

obviously had to go somewhere.

Q

Okay.

Now when you -- so when you went to find the

14

e-mails to -- that were ultimately given to the Wall Street

15

Journal and to NBC News, did they come off of the backups, or

16

from the tape to the drive to which you transferred?

17

You don't mean tape.

18

I corrected myself.

19

I don't know that answer.

20

Who was it that -- and may be -- I'm trying to be as

I said hard drive.

21

clear as I can -- who provided the original source e-mails

22

to the person who gave them to the Wall Street Journal and

23

NBC News?

24

I don't know that specifically.

25

The question, really, I guess is who downloaded

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those

e-mails, then, to give to whomever gave them to the

Wall Street Journal?

I don't recall.

Well, who would that person be, other than yourself, sir?

Oh, Mike Flynn.

Did Mike Flynn then go onto your hard drives and access

There's a good source there.

your hard drives and download the PST and download the

e-mails?

You mean the drives he had in his possession?

10

Yes.

11

I don't know that.

12

Okay.

Well, do you recall that you in fact are the

13

one who downloaded the e-mails themselves, and then gave to

14

somebody -- gave them to somebody, who then in turn gave them

15

to the Wall Street Journal?

16
17

When you say download, you mean export.

You don't mean

download.

18

I'm not trying to be clever.

I just --

19

Export them into some form, hard copy form.

20

I'm not certain.

21

Did you do that or did Mr. Flynn do that?

22

I don't recall right -- specifically which one of us did

23
24
25

that, if that's the question.

Q

Okay.

Well, in August of '07, they were in your

possession, correct?

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August of '07.

They were in your possession.

Oh, because they'd all been returned.

They'd all been returned.

And August of '06, I

think you said they were either in Mr. Flynn, Junior's

or Mr. Flynn, Seniors' possession, is that correct?

7
8

Or were they in the commercial storage facility in

Washington?

In August of --

10

'06.

11

I've lost my train of thought.

12

remember.

13
14
15

I'm just trying to

August of '06, I believe, is when I, uh -- that was

'07 when I moved to -Q

Well, you told us in August of '06 they came back to

16

you from Mr. Flynn, Senior.

And that they were then taken

17

to a commercial storage facility in Bellevue, Washington,

18

where they resided for a time.

19

Mike Flynn, Junior, who then took them to Portland, where he

20

put some in his home and some in a storage unit.

And then they were given to

21

Okay.

22

The question is they were in your possession,

23

What's the question?

I'm sorry.

August of '06, were they not?

24

No.

No way.

25

In whose possession were they, sir?

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Mike Flynn's.

Well, you told us that Mr. Flynn had them for five or

six months.

Right.

Then you took them back, took them to a commercial

storage facility in Washington.

7
8

Do you remember that testimony from just about ten

minutes ago?

I know, but I'm trying to be --

10

Okay.

11

-- I'm trying to be as clear as possible.

12
13

In April of '06, I still lived in, uh, Reno, and I

moved from -- can I just take a break for a second?

14

In April of -- okay.

15

THE COURT:

16

MR. PEEK:

17

THE WITNESS:

In --

Just take your time.

Take your time.
There's a lot of movement

18

with a lot of things during that period of time.

19

be accurate.

20

THE COURT:

21
22
23
24
25

I want to

Take your time.

Go ahead.
BY MR. PEEK:
Q

I want you to be as accurate as you can be?

You told us your earlier recollection, so I just

want to be sure I captured it right?

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1
2

June, July -- August of '06, I was working in Washington,

Um, but I did not have a house there.

And for --

You had an office though?

Yes.

And you had a storage facility?

Some pieces I feel like I'm missing.

remember.

8
9

I'm trying to just

Uh, so the question is in August of '07, did I

have --

10

No, no.

11

You're asking then if I had them in my possession, sole

12

possession.

August of '06.

No.

13

Okay.

14

Well, I mean, Mike -- at some point, Mike Flynn gave them

15
16
17

back.
Q

Well, did you have joint possession?

And I'm guessing that's the time period.

That's what you said to us earlier.

You thought it was

five to six months after you gave them to him in February.

18

That's right.

19

And so all I did was take a mental calculation of --

20

And then moved them into a storage.

21

been a storage facility in Seattle.

22

office in Seattle.

23

Junior.

24
25

But, it could have

It could have been in my

It could have been with Mike Flynn,

I'm just trying to understand in whose possession they

were in in August of '06?

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It could have been one of three peoples; Mike Flynn,

Junior, myself, and the office.

Okay.

parties the complete PST files in native format?

When is it that you will produce to the eTreppid

Within a week.

So on or before August 25th, I will have all of the

original PST files in native format that were provided to the

Wall Street Journal and NBC News?

No.

10

Okay.

11

I --

12

What will I have in one week?

13

I said if I had a drive with PST files on that drive,

14
15

Well, will I have --

so -Q

Sir, what I want is what the Court ordered, which is the

16

production of complete PST files in native format of all

17

e-mails provided to the Wall Street Journal and NBC News.

18

When will I have those, sir?

19

When I find it.

20

Okay.

21

I mean I haven't gone through all the drives, remaining

22

So your answer is just when I find it?

drives.

23

And how many drives are there?

24

Probably five to -- I don't know if it's five or seven.

25

Between five to seven.

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Okay.

I received your 21 hard drives on Thursday.

And

by Saturday afternoon, I was able to determine that eight of

them had no PST files.

4
5
6
7

Why is it it takes you so long to open and then

determine whether there are PST files on those hard drives?
A

I just open the drive and do a search.

You must have a

much faster computer than I do.

all.

It's just a laptop.

I just load it on a laptop.

It was loaded on a laptop.

10

That's

Simple laptop.

Why does it take you so long?

11

Because I'm very slow at it.

12

Okay.

And so can you tell us when you will produce all

13

of the PST files in native format of the e-mails provided to

14

NBC News and the Wall Street Journal?

15

When I've gone through every single drive.

16

When will that be, sir?

17

Well, I've got -- I had two hearings.

18

One the Source

Code.

19

Just asking you when, sir.

20

Okay.

21

Just give me a date.

22

I can't give you a date because --

23

Okay.

24

-- I --

25

So you cannot give us a date, despite the Court order to

I'm explaining to you.

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1
2
3
4

do so?
A

Well, I'm still producing protective files for the

United States Government.

Q

Are any of the e-mails that were provided to the Wall

Street Journal and the NBC News protected by the State Secret

Privilege?

Yes.

And some of those we went over last time, didn't we?

No.

10

And the government took some of those?

11

I don't think so.

12

Well, if you gave them to the Wall Street Journal, you

13

I mean, whatever they took, I --

did not have a good faith belief --

14

That was --

15

Wait a minute, sir.

16

When you gave -- when they were given to the

17

Wall Street Journal, were provided by you to somebody that

18

ultimately gave them to the Wall Street Journal, did you

19

have any good faith belief they had State Secret Privileged

20

information on them?

21

No.

22

Are you --

23

Wait --

24

-- telling us today that you have a good faith belief

25

that there is State Secrets Privilege on them?

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The documents that you see in the binder were not all

given to the Wall Street Journal or to NBC.

only a few of them were given.

We'll look at that --

Okay.

6
7
8

To my knowledge,

I -- but you keep saying when you give all, when

they were all given.

Q

Okay.

So, you don't have a date when you will provide

them either to me or to the government?

As soon as I find them.

10

Is that correct?

11

Well, that's not true.

12

I just want a date, sir.

13

As soon as possible.

14

So you can't give us a date, is that correct?

15

Not today.

16

Okay.

17
18
19
20

I mean I -That's all I want.

And you're aware, of course, the Court's orders

that are outstanding require you to do that?

A

But the Court has ordered me to do a lot of things all

simultaneously, and you can't do them all at once.

Q

Well, that's not really true, is it?

The Court

21

didn't order -- the Court ordered you to produce these in

22

February 2007 -- excuse me, 2008, did they not?

23

Produce what.

24

Produce these e-mails.

25

Yes.

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And you haven't done that since then?

Well, I've been looking for protected information for

3
4

the United States Government.

Q

Okay.

So then I would suspect then from that, that you

would have found all of the e-mails, hard drives that have all

of the e-mails on them, and would have at least been searching

them.

8
9
10
11
12

Is that correct?
A

You can't search that many drives all at once.

Maybe you

can, but I can't.

Q

Okay.

But you've only opened one of them in the last

two weeks, is that correct?

13

One what?

14

One drive containing PST files.

15

I found a drive.

16

You found a drive.

17

No.

18

So, okay then.

So, you haven't even opened it?

But I saw there are PST files on it.

And you haven't even then made a diligent

19

effort to determine whether there is or is not State Secret

20

Privilege information on them?

21

At that point, I got another contempt order for the

22

Source Code.

I immediately stopped what I was doing to look

23

for the Source Code.

24

That's not my question.

25

Well, that's my answer.

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My question, though, is you didn't make any effort then

to look at that drive to determine whether or not you had a

good faith belief that there was or was not State Secret

Privilege on it.

On which drive?

The one you said had PST files on it.

Yes.

It did have state secrets, those files I peeled off

already.

Okay.

10

Yes.

11

When did you do that?

12

Thursday.

13

Thursday of what week?

14

This week.

15

Thursday of last week?

16

Well, I mean -- it was either Thursday or Friday.

17

And it's your testimony that those have actually been

18

And so you sent them to the government?

delivered to the government?

19

Yes.

20

Okay.

21

Maybe it was today.

22
23

I mean, I think it got there.

I mean it was shipped Fed Ex.

Same

way I've shipped them all.

Q

All right.

So then there, obviously, are some of the

24

e-mails that you would have looked at that didn't have state

25

secrets privilege on them, is that correct?

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Maybe I'm stating it wrong.

I don't know whether you were.

I said there were files on there.

4
5

I didn't say there

were e-mails.
Q

I'm talking about the PST, sir.

The subject matter

here is only the PST files of the e-mails provided to the

Wall Street Journal and NBC News.

Okay.

That's all I'm talking about.

10

I understand that now.

11

So you have not delivered any of the PST files with

12

I got it.

native, in native format to the government, have you?

13

That's correct.

14

Okay.

15

And you've only recently found one hard drive two

weeks ago, correct?

16

Yes.

17

And you have not opened it to see what's on there; that

18

also correct?

19

Well, I mean, I saw that there were PST files on there.

20

Okay.

21

Now, with respect to those e-mails that are the

subject of Exhibit 9 --

22

Uh-huh.

23

-- those, I think you told us, were put into an ASCII

24
25

format.
Was that the term that was used last time?

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Text format of some type.

A text format.

I don't think so.

Okay.

Mike Flynn.

Okay.

Who did it?

So Mike Flynn then created all of the text files

that we see in Exhibit 9.

Is that your testimony?

No, it's not.

10

Okay.

11

I may have.

12

Okay.

13
14
15
16
17

Did you, did you do any of the ones in Exhibit 9?

I don't recall if I did or not.

So was it a collaborative effort then between you

and Mr. Flynn?

A

No.

I mean, I don't recall how it actually happened at

the time, how they ended up in that exact compilation.

Q

Okay.

You don't remember how they ended up there.

You

just know they ended up that way.

18

That's correct.

19

Okay.

20

And did you do that?

Yes.

And do you have an explanation as to why they're

out of date order?

21

No.

22

Because we talked about that last time.

Typically, an

23

e-mail string has the most -- you said you never heard that

24

term before.

25

Yeah.

You are familiar with it today?

You informed me of it.

Yeah.

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Okay.

Uh-huh.

The most recent date at the top?

Uh-huh.

The earliest date is at the bottom.

The date --

And they're in

descending order, correct?

I'm listening.

They're -- that's typically what an e-mail string looks

like, correct?

10

It could be an ascending.

11

Could be reversed; ascending, meaning the latest is

12

at the top, and the last is at the bottom; either in

13

descending or ascending order, correct?

14

That would be two possibilities.

15

But, generally, it's in descending order; with the most

16

recent at the top, and earliest at the bottom, correct?

17

I'll take your word for it.

I, I --

18

You've never seen, even when you open your own e-mail,

19

when you receive e-mail at dmontgomery@ncoder.com, and you

20

have a string, does it come to you differently than it does

21

everybody else in the world?

22

What?

23

Do the e-mails that come to you at Montgomery@ncoder.com,

24

come to you differently than they do everybody else; which is

25

that the most recent is at the top, and the earliest is at the

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bottom?

I don't have that Montgomery@ncoder.com.

Do you have -- you have something at Dennis@ncoder.com?

No.

That's not you?

No.

Okay.

I'm sorry.

I thought that was your e-mail

address.

So you guys are the one that's been gettin' in it?

10

I haven't even -- whoah.

Wait a minute.

If it's not

11

your e-mail address, then who could get into it?

12

you know somebody's getting into it?

13

It's not ncoder.com.

14

What is it?

15

Ncoder.net.

16

Ah, excuse me.

17

How would

Ncoder.net, yes.

So you have, when you get things at ncoder.net,

18

then do they come to you differently than they do the rest of

19

the world, which is not with the latest at the top, and the

20

earliest at the bottom?

21

That's correct.

22

They come to you differently?

23

Yes.

24

How do they come to you?

25

Priority.

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2

Priority.

Okay.

But we did establish that in Exhibit 9,

there are many of the e-mails that are out of order.

Do you remember that?

Yes.

And you don't know whether you or Mr. Flynn put them in

those, in that different order, correct?

That's correct.

And do you know why it was that they were put into

different order in the text files?

10

I have no idea.

11

You have no idea.

12
13

Okay.

And I think you told us that you met with Mr. Wilke,
at least, on one occasion, correct?

14

Yes.

15

Was it more than one or just one?

16

You asked me the same question before, and I think I only

17

met him one time.

18

And where was it?

19

Same place you asked me before.

20

I didn't ask you before.

21

Yeah, you did.

22

Was it in Seattle?

23

Yes.

24

Okay.

25

You asked me was it in Seattle.

Now, when you met with NBC News, how many

different occasions did you meet with them?

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MS. GAROFALO:

MR. PEEK:

Objection.

Relevance.

Your Honor, just, again, it just goes

to the good faith and bad faith of Mr. Montgomery, and the

nature in which he's producing the documents.

connect it up with a clip from MSNBC News.

THE COURT:

The objection is overruled.

Go ahead.

8
9

And I will

THE WITNESS:

I think one time.

BY MR. PEEK:

10

And where?

11

Uh, Mr. Blixseth's residence.

12

Mr. Blixseth's residence where?

13

Porcupine Creek Ranch.

14

That's also now the residence of Edra Blixseth?

15

Yes.

16

And when?

17

I don't know the exact date.

18

Do you know the year?

19

2006, I think.

20

In fact, it was in November of 2006, was it not, sir?

21

It might have been.

22

Okay.

And it was just before -- just, I think either

23

right after or right before the article appeared in the

24

Wall Street Journal -- on November 1st, 2006, was it?

25

I don't think so.

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Okay.

Well, then, do you have a recollection that it was

maybe in October or December of 2006?

No.

And who was present during that interview with MSNBC,

I don't remember specifically when it was, but --

Lisa Myers?

Michael Flynn --

Okay.

-- Carla DiMare, myself, Lisa Myers.

person.

I don't recall his name.

10

Was it Poppin or something like that?

11

Yeah.

12

Popkin.

13

Yes.

14

Okay.

15

Jim Popkin.
He's from NBC News, is he not?

And do you -- before that interview started, did

you provide e-mails to Lisa Myers or Jim Popkin?

16

Before that day, is that --

17

Before the interview started, sir.

18

Yes.

19

There was another

I mean, they were provided.

I don't recall if I

did or Mr. Flynn did.

20

Okay.

21

I don't think so.

22

And you in fact downloaded them off your computer, onto a

23

And they were on your computer, were they not?

No.

thumb drive, and went out and printed them out.

24

They were printed.

25

They were printed at Porcupine Creek, were they not, sir,

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the day of the interview?

I think they were taken off Mr. Flynn's computer.

You think they were Mr. Flynn's computer, not yours, is

that your testimony?

I think so.

I don't recall specifically, but --

They were taken off of a computer and put onto a thumb

drive, and printed out at the Porcupine residence before the

e-mails were handed to Lisa Myers, were they not?

They might have been.

10

Might have been or they were?

11

I don't recall specifically if they were or not.

12

So you don't have a recollection, as you sit here today,

13

that in fact the e-mails were taken off of a computer, put

14

onto a thumb drive, and then that thumb drive was taken, and

15

the e-mails were printed out from there.

16

No.

17

You don't recall that?

18

No.

19

Okay.

But you do recall, though, do you not, that

20

e-mails were printed out and handed to Lisa Myers before the

21

interview.

22

Yes.

23

Okay.

24

not?

25

And those e-mails came off of a computer, did they

We're just going around in a circle.

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They came off of a computer, did they not?

You mean there?

Yeah.

brought, I don't recall.

You don't recall that?

No.

Okay.

They were -- or if they were

And from where did those e-mails originate that

were then provided to Lisa Myers and/or Jim Popkin?

I don't know.

You don't know.

10

Well, you're asking me --

11

Right.

12

Definite.

13

Well, do you recall generally, sir?

14

No.

15

Do you have any recollection at all, as you sit here

I don't recall specifically.

16

today, as to how the MSNBC personnel, Lisa Myers and

17

Jim Popkin, received the e-mails that they showed on their

18

show?

19

No.

20

So you don't know if they came from a hard copy that was

21

brought there, or an electronic media --

22

I don't recall.

23

-- that were brought there, and then downloaded -- or,

24
25

excuse me, exported.

A

Michael met ahead with -- Michael met with them ahead of

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me, so --

Okay.

-- okay.

I --

I'm just asking what you did.

Michael did.

I'm not asking what

I'm want to know what you did.

I just gave you my answer.

Okay.

Do you recall during the course of that interview

there were, all of those e-mails were out on a table in front

of you and Ms. Myers?

10

They might have been.

11

Okay.

12

MR. PEEK:

13
14

I don't recall.

Do we have that clip?

Your Honor, this is Exhibit 33.

BY MR. PEEK:

15

This is a clip of the portion of --

16

Yeah.

17

-- the interview.

18
19
20
21

(Exhibit 33, videotape played.)

BY MR. PEEK:
Q

Now, you saw all those e-mails that were on the screen

there?

22

Yes.

23

Who provided those to Lisa at Porcupine Creek?

24

I don't recall.

25

Okay.

You don't know, again.

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2

But, you know that they were provided to her?

A

Well, I'm not sure the ones you're seeing in that table

are all -- they're just not regular e-mails.

that for a fact, one way or the other.

I don't know

Well, do you think NBC News just sort of grabbed a bunch

of e-mail that were unrelated to this case and just panned on

the screen?

I don't want to say that.

The ones that were panned on the screen, are those the

10

That's not my position.

ones that were provided to NBC News?

11

I don't -- I don't know.

12

Okay.

13

I would like to take a break, if you could.

14

MR. PEEK:

15

That's up to the Court.

16
17

THE COURT:
is 3:32.

I don't have control over that.

Well, we convened at 1:30.

So, we'll take a ten-minute recess.

18

MR. PEEK:

19

THE COURT:

20

All right.

21

(RECESS TAKEN.)

I still have 58 minutes?

57 minutes?

3:32, sir.

We'll be in recess.

22

THE CLERK:

Court is again in session.

23

THE COURT:

Thank you.

24

Go ahead, sir.

25

The time

MR. PEEK:

Please be seated.

Thank you.

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2
3

BY MR. PEEK:
Q

Mr. Montgomery, in addition to e-mails that we saw in

that clip, we also saw a video of the cruise trip.

Did you see that?

Yeah.

And where did that come from?

I don't -- I, I don't know.

Well, did it come from Mr. -- did Mr. Flynn have it?

Yes.

I mean I just don't know.

mean did he get it from Mr. Trepp, or --

10

No.

11

You had possession of that video, did you not?

12

Yes.

13

And somehow it got to the NBC News, did it not?

14

I believe I gave all that to my attorney.

15

That's not what I asked.

16

Okay.

17

It got to the NBC News.

18
19
20
21

24
25

Not that I know of.

Well -So, it got from you to NBC News,

is that your testimony?

A

I don't know the exact method.

If you're asking me if

that's my video, I believe so.

Q

Okay.

22
23

So you had that video.

Where is that video today?

I believe on my, on my home computer.

It was on my home

computer prior to the raid on my home.

Q

Okay.

And what efforts have you made to search for that

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3

video?
A

Well, you've got a disk drive copy of the computer that

was taken from the raid at my home.

I believe it's on there.

So, is it your testimony that you produced it?

Well, if producing the drive that --

When did you produce that drive?

That was one of the 21 hard --

One of these 21?

Oh, wait.

10

At some point you must have gotten the drives that

11

were taken.

12

were taken.

13
14

No, no, no.

It might be those drives.

It was the drives that

Which drives were it on, and have you identified which

drive in response to your --

15

Nine eleven.

16

-- production?

17

Drive 911.

18

Drive 911; is that a serial number?

19

Yeah, the last three digits.

20

Okay.

21

So if I were to find that hard drive that has

serial number ending in nine one one, I would find that video?

22

I don't know if it's that exact one, but probably.

23

So is it your testimony to this court that you have

24
25

produced it?
A

Yes.

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2

Okay.

And you don't know when that hard drive was

produced?

Whenever you got them.

I don't know.

Well, I received a number of hard drives from you.

None

of which have said they were responsive to this Request For

Production as to all media -- all documents which would

include the video provided to NBC News.

8
9

On that particular drive that was taken from my home,

there were the pictures of the cruise.

10

the cruise.

11

was on there.

12
13

Okay.

A lot of other things, too, but that particular

But I was -- you were returned with that computer,

were you not?

14

I'm sorry?

15

That computer was returned to you.

16
17

There were videos of

Are you saying it was on the computer's hard drive

or a separate --

18

No.

19

And that computer was returned to you?

20

Yes.

21

And is it your testimony that you took an image of that

22
23

The computer's hard drive.

hard drive on your computer and produced it to me?

A

My testimony is that I produced the hard drive, which was

24

one of the, whatever they were, 21 drives to whoever copies

25

them.

And I don't.

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That's not my -- the testimony is did you -- is it your

testimony that the hard drive on your computer was copied, a

forensic image of that was made?

4
5
6

I don't know if they gave you the originals or the

forensic copy.
Q

Okay.

But it's your testimony that you provided to

somebody to produce to me the hard -- your computer.

somebody took an image of your hard drive and produced it

to me?

10

Yes.

11

That's your testimony.

Okay.

And

Because I, in the 21

12

hard drives, they did not say anything in the 21 hard drives

13

were responsive to this Request For Production.

14

responsive to one other, which is number 16.

15

Said it was

Well, all the pictures and the movies of all the cruises

16

I've been on, and, you know, family pictures and everything,

17

which we have all of it, is in there.

18
19

Okay.

So you've produced -- you produced that video

then?

20

Yes, I believe so.

21

I don't want -- I mean, I just want you to tell me yes or

22

no.

23
24
25

Have you done it?

A

I produced that drive that was taken from my home with

that information.

Yes.

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Okay.

I don't know.

When was your computer delivered to --

It wasn't my -- no.

You said it was on your computer, sir.

Listen, I'm trying to explain.

Okay.

When the FBI raided my home, illegally raided my home,

When was it copied?

I mean --

they took a lot of stuff out of my house.

One of the things

10

they took was that home computer in my house.

That home

11

computer had a hard drive in it that was running that home

12

computer.

That drive, I believe, ended in 911.

13

Is it an external hard drive --

14

No.

15

-- or an internal hard drive?

16

Internal.

17

Okay.

So then your testimony is you then took that home

18

computer and delivered it to somebody to copy, or somebody

19

came to your home and copied it?

20
21

No.

that drive.

22

Okay.

23

No.

24

Okay.

25

I took all of the drives that were taken, including

So you took the drive out of the computer?

Actually, Agent West did when he returned it.
So Agent West took the hard drive out of your

computer, and it became one of the hard drives that were

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returned to you, and it is now external to your computer.

2
3

Is that your testimony?

A

Yes.

When they -- when he returned the equipment, and

they were counting the drives, he took -- he opened the

computer.

of course, that's all been cutoff and --

It would be on the video of the entire return but,

What do you mean it's all been cutoff?

I was there four-and-a-half hours.

9
10

55 minutes of video.
Q

Okay.

11

by that.

12

55 minutes?

13
14

They gave me

So are you telling me then -- I'm sort of confused

You're aware of four-and-a-half hours; they gave you

I was at -- when they returned the stuff to me at the

FBI, I was there roughly four-and-a-half hours.

15

Correct.

16

And we asked them for a copy of the videotape showing the

17

And they gave you --

full return of all the equipment.

18

I'm not interested in that.

19

Well, that was --

20

I'm just interested in whether or not the video clip that

21

we saw --

22

Yes.

23

Okay.

24
25

It's been provided.

So I will need -- if I have it, tonight, I will

see and look if that's on there.

A

Along with everything else.

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But no PST files, right?

I wouldn't say that, no.

Well, the eight drives we've opened, there's no PST files

Not on my home computer.

on any of the eight we've been able to open.

Well, there's more than eight, isn't there.

Well, there's 13 that were corrupted.

No, they weren't corrupted.

They were brand-new drives,

sealed in a bag, that had never been opened.

in the picture, or 11.

Those are the 13

I don't remember.

10

Can you explain the 13 I received were corrupted?

11

Well, when you say cor -- I can't -- what do you mean

12
13
14

corrupted?
Q

They were useless.

the data.

15

No.

16

Okay.

17

They couldn't -- you couldn't open

They were damaged.

Now, there's also a photograph shown there.

Where

is that photograph?

18

On my computer.

19

So it's also on that same hard drive that ends in serial

20

number 911?

21

I believe so.

22

You believe so, or you know so?

23

It's there.

24

Okay.

25

That's correct.

Now when you provided your, the 21 hard drives --

let me do this a different way.

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Uh, did you think before you produced the photograph

to the NBC News, that there were at least five or six minor

children in that photograph?

MS. GAROFALO:

THE COURT:

MR. PEEK:

THE COURT:

8
9

Objection.

Relevance.

Mr. Peek.
I'll move on, Your Honor.
The objection is sustained.

BY MR. PEEK:
Q

Now, we heard your counsel tell us this morning that all

10

of the CDs that were seized by the FBI will be provided to us

11

within the next week.

12

Why haven't they been produced before that?

13

I've given them to my attorneys.

14

When did you give them to your attorneys?

15

By stating that, am I giving up attorney/client

16

privilege?

Waiving it?

17

No.

There's no objection.

18

I don't remember specifically.

19

I don't recall.

20

But --

21
22
23
24
25

It was a few weeks ago.

I mean, I don't know specifically.

Recently.

So only recently then you have provided all of the CDs,

is that correct?
A

No.

I think it was more -- what was the date of the last

hearing?
Q

June 24.

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Sometime in July.

So sometime in July, you provided all of the CDs to your

counsel to produce, is that correct?

All the ones I found.

Okay.

I don't recall.

Is one of them the Warren's old e-mails?

That was one of them.

Sill that one.

10

I think I was short two.

Which two were you short?

Okay.

Which other one?

11

There was another one.

I don't recall.

12

When you reported to the Court back in June, you said

13

that there were a five you couldn't find.

14

found three more.

15

Yes.

16

Okay.

17

So you, apparently,

What search have you made for these last two,

including the one that's labeled Warren's old e-mails?

18

Very diligently.

19

So you looked every place you possibly could?

20

Well, as you know, there's been a lot of places they've

21

been.

22

I understand it's been a lot of places.

23

I made a pretty good effort to look for them.

24

So that one has been lost along the many moves that you

25

made?

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Yeah.

Well, I'm -- I haven't found it yet.

Okay.

And why didn't you produce those before July to

be copied as the Court had ordered it to be copied?

MS. GAROFALO:

MR. PEEK:

Objection.

The foundation is, Your Honor, that

he didn't produce them until July.

February that you do it by March 14th.

The first time he did it was in July.

THE WITNESS:

10

There was a court order in

The objection is overruled.

Go ahead.

12

THE WITNESS:

I thought I was just to produce

13

the faces of them originally, copies.

14

BY MR. PEEK:

15
16

Okay.

And you received that information along the way

by, what, reading the court order?

17

MS. GAROFALO:

Objection, to the extent it calls

18

for attorney/client communications.

19

BY MR. PEEK:

20
21

It hasn't happened.

I thought --

THE COURT:

11

Lacks foundation.

Somehow you learned, did you learn that from reading the

court order?

22

I don't -- I don't know.

23

Are you aware that the Court order requires you to

24
25

produce the copies of the CDs?

A

At what date?

I thought it was -- I had originally

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produced the front covers.

supposed to produce the ones that said eTreppid on them.

somehow, it got to everything.

No.

And then I thought I was only

The Court order was you were to produce those that

bore indicia -- all of the face sheets of all CDs.

that bore indicia of ownership by the Court -- excuse me,

ownership by eTreppid, you were to produce copies.

the February 21st, 2008 order.

9
10

12

MR. PEEK:

THE COURT:

15

MR. PEEK:

16

THE COURT:

17

MR. PEEK:

18

THE CLERK:

19

MR. PEEK:

No.

Is that a question or --

I'm actually -- I'm going to try

It is Exhibit 9.
Thank you.
Court's Exhibit 9.
May I hand it to him?
We don't have another copy of it.
Your Honor, I'll just hand him my

binder with it.

21

23

Right.

get the exhibit, so we can just follow along.

14

22

And that's

the February 21st order?

THE WITNESS:

20

And those

And, Your Honor, I think you made that an exhibit,

11

13

And,

THE COURT:

All right.

BY MR. PEEK:
Q

Let me show you what has been marked and admitted into

24

evidence as exhibit, court Exhibit 9.

25

proceedings, February 21st, 2008.

It's Minutes of

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May I approach, Your Honor?

2
3

THE COURT:

MR. PEEK:

THE COURT:

Oh.
I apologize.

That's May.

It is, pardon me, it's Exhibit 2.

MR. PEEK:

Court Exhibit 2.

May I approach?

11

Actually, that's the

wrong one.

10

I'm sorry.

THE COURT:

You may.

BY MR. PEEK:
Q

Here are the court's Exhibit 2, Mr. Montgomery.

12

you -- you saw that with the Court.

13

you on that in, on June 10th of this year.

14

Have

And the Court examined

Do you recall that?

15

Yes.

16

And let me turn you -- may I again approach, Your Honor?

17
18
19
20

THE COURT:

You may.

BY MR. PEEK:
Q

Let me turn you, I think it's item 13 on page 6 of 7.

And it's the second paragraph.

21

Would you read that aloud to the Court.

22

The second paragraph?

23

Yes.

24

Request number six and seven also pertain to the computer

25

disks -- in quote CDs -- the FBI seized.

And the Montgomery

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parties shall, one, make a photocopy of the face of the CD

seized by the FBI; and

Two, produce a copy of every CD the FBI seized which

bears an eTreppid, or is understood to be eTreppid-related

property, and/or work routinely performed by eTreppid.

Is that in anyway unclear you were to produce a copy --

No.

-- of the CD?

Right.

10

And you knew that, even when the Court read it to you on

11
12

June 10th, didn't you?

A

The problem is I didn't know which CD it was, because I

13

didn't have -- they were commingled.

14

the photographs to show me the ones that were taken, so I

15

could match them up to the ones that I had.

16

didn't get until late.

17

Okay.

Okay.

And I needed a copy of

And, that, I

So you -- there was a lack of an

18

understanding on your part.

First you said only the face

19

sheets were to be produced.

Now when you read the Order,

20

you understand that the copies were supposed to be produced.

21

Did you know that in February of 2008, that the

22

copies were to be produced, copies of the CDs?

23

when that order was issued that --

Did you know

24

I don't remember right then if I did or not.

25

When did you become aware that you were to --

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You've asked me this.

-- make copies of the CDs?

Sometime in March.

Okay.

And then you were unable to produce them, those

copies, because your testimony is that you didn't know what

the FBI seized.

Is that your testimony?

That's correct.

Okay.

10
11
12
13
14

And then you got photographs of those, I think, in

the June hearing, correct?

A

I don't know if it was the June hearing, or it was right

before it actually.
Q

Okay.

Right before that.

And then it took you another

month, plus or minus, to locate them and copy them?

15

I don't think -- I didn't copy them anyway.

16

Okay.

17

I don't think it took a month, and I, I -- they were

18

produced pretty quick.

19

they've taken now, if you're telling me, I don't know that

20

answer.

21

Okay.

I can't tell you the exact date.

But, in any event, your lawyer has said he's going

22

to produce them within a certain period of time.

23

week, by next Friday.

24

July?

25

Why

I think next

But, you didn't give them to him until

No -- you keep saying that.

I gave them to -- as soon as

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I got the photographs and I could identify which CDs went with

which photographs, I produced them shortly thereafter.

And the reason why you didn't produce them previously

is you had commingled them and lost the integrity of the FBI

raided material, is that correct?

I don't know what, quote, integrity --

Well, you lost the discrete description because you said

you put them in boxes and then commingled them later on.

didn't preserve them, did you?

10

They -- at some point they got commingled, yes.

11

Okay.

12

You

Now, how did -- let me back up a minute, if I may.

When was the FBI seized material returned to you?

13

In May of, I believe, May of '07.

14

May of '07?

15

That might be sooner.

16

Okay.

17

I think so.

18

And that's what you got back, your hard drive that had

19

May of '07?

the video on it, is that correct?

20

Yes.

21

Okay.

22

I don't --

The Lisa Myer interview was in December of '06,

was it not?

23

Yes.

24

And you had the video then, did you not?

25

Well, obviously, I did, but --

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Obviously, you did.

2
3

Yes.

Where did you have it?

A

I have no idea.

I may have had a copy of that drive of

my own computer, or backup of my own computer, I don't know,

at the time.

6
7

Have you produced that backup because you were required

to produce all copies?

All copies of what?

Of anything provided to the media.

10

I don't -- I don't know if I -- I'm sorry again.

11
12
13

Anything?

Ask me

the question again.

Q

Have you provided -- you said that you must have had a

backup some place, correct?

14

Well --

15

Because --

16

I --

17

Here's what you told us earlier --

18

Yeah.

19

You told us that that video was on your home computer

20

on your hard drive; that that hard drive was removed by the

21

FBI and placed into Segregated Way?

22

Right.

23

And that that was, that was where that video came from.

24
25

That's what you said, and has now been produced to us -A

I --

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1
2

Now you're telling us you had a copy of that video before

that?

I don't know if that was the original or the copy.

I don't even know if you had one on your home computer,

Mr. Montgomery, because I don't know what to believe.

MR. SUNSHINE:

MR. PEEK:

Your Honor, who's going to make the

objections?

shouldn't be both of them.

Mr. Sunshine or Mrs. Garofalo?

10

THE COURT:

11

MR. PEEK:

12

THE COURT:

13

16
17
18
19
20

All right.

Because it

Please let us move on.

I will move on, Your Honor.

And one of you be in charge of your

objections for the Montgomery parties, please.

14
15

Your Honor, objection.

Go ahead.
BY MR. PEEK:
Q

So have you produced this copy, or the video that you

provided to NBC News; that specific discrete video?

A

Well, if you have the drive on it that was taken from the

FBI -Q

No.

I'm talking about the one that was provided to the

21

FBI, that was on -- that you said that was some place else,

22

because you had it and gave it to Lisa Myers in November

23

of '06.

24

that specific discrete video?

25

I want to know where that is, and have you produced

I, I don't know if that video was given to her at that

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time she was there, or they did not look for it sometime

thereafter.

that story came out, that it was taken off of that drive.

4
5

And that after being -- I don't remember when

So then are you telling us that you provided it to

Lisa Myers at a date later than November of '06?

I don't recall.

You don't remember.

8
9
10

To be honest with you, I don't know.

Okay.

Now, the CDs that are the subject matter of the

motion, and that you're now going to produce, where did you
get those?

11

What do you mean?

12

Where did you get them?

13

Where did you get the data on

those CDs?

14

I'm missing the point.

15

On the CDs, there's electronic data, is there not?

16

Yes.

17

Where did that come from?

18

Any variety of sources.

19

Okay.

20

My laptop, home computers.

21

How did you get it before it went on your laptop or on

22

What are the variety of sources, sir?

your home computer?

23

The video?

24

No, no, no.

25

I --

I'm talking about all the CDs, the hundred

and some odd CDs that were seized, 170, plus or minus CDs,

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that were seized by the FBI.

Where did you get those?

Are you talking the physical media, or are you talking --

I'm talking about the physical, the electronic --

Well, can --

-- the electronic media that's on the CDs.

6
7

bought the CD, not the store.

A

Quite a number of those CDs were dated prior to '97, so I

presume work that I had done in the past.

do about eTreppid.

10
11
12
13
14
15

Not where you

It had nothing to

I'm talking about the ones that have to do with eTreppid.

Where did you get those?

A

It may have been just something that I had and I burnt a

CD of it at home or anywhere.
Q

So, I mean, it's something you had at the offices of

eTreppid?

16

They surely could burn CDs there.

17

And you burned a CD there, is that correct?

18

I have burned CDs there.

19

Okay.

Yes.

Remember your testimony at the preliminary

20

injunction hearing where you said you took no electronic

21

media from eTreppid.

22

Do you remember that testimony?

23

Yes.

24

So that's false testimony?

25

No.

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Okay.

Well --

So, then you took the CDs.

4
5
6
7

You took that data and put it

on a CD, and took it out of the premises, did you not?

A

Everything I took out of there, Mr. Trepp knew I was

taking out.
Q

So are you saying, then, that you downloaded or you,

excuse me, copied data from eTreppid, put it on a machine,

burned it on to a CD, and then asked permission to take it?

10

No.

11

Well, how did you get -- tell us the form in which you

12

I don't recall that specifically like that.

received permission to take eTreppid's property?

13

I can't tell you.

I thought I was eTreppid.

14

Pardon me?

15

I mean, I own stock in the company.

16

So you took it because -- I'm just talking about the

I thought --

17

testimony you gave us when you said you took no electronic

18

data from --

19

The way that question was asked to me, I thought that

20

was meaning taking it illegally, or without somebody's

21

permission.

22

The question was have you taken anything?

23

I --

24

You said no.

25

No.

So, that was false testimony.

I don't know.

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Okay.

2
3

Now, you also testified that the FBI seized

material may or may not contain State Secret Privilege.

Do you recall that testimony.

The FBI --

The FBI seized material may or may not contain State

Secrets Privilege?

Yes.

And that's been one of the reasons why you haven't

10

produced it, isn't that correct?

11

Are you talking about the 21 hard drives?

12

21 hard drives, the CDs, everything that the FBI seized.

13

From time to time, you claimed that it contains FBI -- excuse

14

me, State Secret Privilege.

15

a loss on how to get it produced quickly.

16
17
18

And you have, therefore, been at

That's not necessarily true.

I mean, I don't know where

you're going, so -Q

I'm just going by your testimony.

You said that one of

19

the reasons why you hadn't produced a lot of the documents

20

that were required to be produced is because you had a concern

21

that the State Secret Privilege may be implicated on some of

22

that electronic media you had.

23
24
25

Do you remember that testimony from June 10th and

June 24th?
A

Yes.

Yes.

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Okay.

Yes.

Okay.

That was your position then, was it not?

You've taken a contrary position before, have you

not, that there's no State Secret Privilege on any of the

seized material?

Seized material?

Yes.

I think, originally, that was the position.

And that was the position you took in a sworn

10

declaration, was it not?

11

Yes.

12

Okay.

I remember signing something.

Let's look at that sworn declaration, which is --

13

if I may have just a minute to find it.

14

moment.

15

If I may have the Court's indulgence.

16
17

Hang on just a

THE COURT:

You may.

BY MR. PEEK:

18

Would you take a look at Exhibit 19.

19

In this binder I have?

20

THE COURT:

21

MR. PEEK:

22

25

No.

I believe it would be in another

binder.

23
24

Is it --

THE COURT:

Is it the Court's exhibit or your

exhibit?
MR. PEEK:

No.

It's not a court exhibit.

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THE COURT:

THE WITNESS:

MR. PEEK:

find it.

BY MR. PEEK:

6
7
8

Okay.

Double-sided, Your Honor.

document, paragraph six.

A

Yes.
THE COURT:

I'm sorry, sir.

MR. PEEK:

12

THE COURT:

Thank you.

13

MR. PEEK:

In Volume V.

14

THE COURT:

Thank you.

16
17

Could you tell me

what exhibit.

11

15

I couldn't

Would you take a look, I think it's page 5 of that

9
10

Black binder.

It's Exhibit 19, Your Honor.

BY MR. PEEK:
Q

Now, you submitted this declaration in this proceeding,

did you not, as docket number 228?

18

I presume my attorneys did.

19

Well, but you actually -- want to turn to the last page

20

and did you sign it?

21

I'm sure I did.

Yes.

22

And did you sign it?

23

Well, mine has two pages.

24

I'm just looking at the last page?

25

One is signed and one is not signed.

Mine has two --

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1
2
3
4
5
6

Well, I'm looking at the last page.

last page to it, sir, where your signature appeared?

A

The last page, the one that's the January 12th, 2004

letter from the government?

Q

No.

The second to last page with your signature on it.

I'm just looking for the one with your signature.

THE COURT:

MR. PEEK:

12
13

Page 22.
Page 22 and 23.

Is that your signature?

10
11

Does yours have a

THE WITNESS:

Yes.

BY MR. PEEK:
Q

Did you declare under penalty of perjury that the

statements you made are true and correct?

14

Yes.

15

And then read what you said in paragraph six of that

16

declaration under penalty of perjury.

17

Do you want me to read it, or read it out loud?

18

I want you to read it out loud, that first sentence.

19

"The government has now held my computers in storage

20

and media for over six months, knowing I do not have any

21

possession of any classified information, and knowing that all

22

Source Code used in special government contracts worked on by

23

me at eTreppid are owned by me."

24
25

And when you gave that declaration, you were stating,

were you not, that you did not have possession of any

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classified information in the FBI seized material?

That's correct.

And then in this court, you know, on June 10th and

June 24th, you told me and the Court, from time to time, the

reason you were having difficulty producing is because you

were concerned about State Secrets Privilege information that

was on the FBI seized material, correct?

I don't believe I said the FBI.

Well, you were talking about the seized material.

10

When?

11

June 10th and June 24th.

12

No.

13

Okay.

14

When was that?

Well, part of the seized material were the CDs,

were they not?

15

Yes.

16

And you told the Court, at least that the reason why you

17

were having trouble providing the CDs was, in part, that it

18

may have State Secret Privilege on it, correct?

19

Yes.

20

And that's different than what you told the Court under

21

penalty of perjury when you filed this declaration on 8-3,

22

207, wasn't it?

23
24
25

Well, considering I didn't have the CDs that they took

from me and -Q

Well, you gave this declaration under penalty of perjury,

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knowing what the CDs that were seized were, did you not?

No.

Oh, you didn't know what the FBI seized?

No.

You did not?

You didn't have the inventory?

No.

Okay.

Okay.

So when you said this under penalty of perjury,

that was false?

10

No.

Just what I believed at the time to be accurate.

11

And you changed that position at a later date, correct?

12

No.

13

Well, are you -- I mean, which is it?

Are you claiming

14

that there is or is not State Secret Privilege on the FBI

15

seized material?

16

I don't know if classified information and the State

17

Secrets Privilege, and the protective order are all the same

18

thing.

19

So you make a distinction amongst those categories.

20

Classified, did you understand classified to be

21

information that to be covered by State Secret Privilege?

22

I don't -- what's the question.

23

Did you know that classified would include information

24
25

that would be covered by a States Secrets Privilege?

A

I don't know if it would or wouldn't.

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Okay.

Do you think there's something other than a

category or classified information that would be covered by

the State Secrets Privilege?

I don't understand.

Well, let me ask a different way.

6
7

Is it your position that when you gave this

declaration, that you didn't have any classified information?

That's correct.

Okay.

10

And you actually gave this declaration in the

Buckthorne proceedings, did you not?

11

What do you mean the Buckthorne --

12

The Buckthorne search and seizure proceedings.

13

Oh, yes.

14

This declaration was submitted in the Buckthorne search

15

and seizure, was it not?

16

I don't know which document.

17

Well, the original signature on that is in October

18
19
20
21

I'll believe you, yes.

of '06, is it not?
A

So that was -- okay.

I know which one it is.

Yes.

remember now.
Q

Okay.

And you gave this declaration to this court to

22

persuade this court that you did not have any classified

23

information?

24

No.

25

Correct?

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No.

Well, it wasn't one of the issues in that Buckthorne

proceeding, an issue whether you did or did not have

classified information.

I believe there were nine hard -- well, I, I believe

there -- that there was an allegation that I had taken nine

hard drives from Nellis Air Force Base with classified

information on them.

Nellis Air Force Base.

10
11

And I never had nine hard drives from

And my understanding was some time

later, eTreppid found the nine hard drives.

Q

No.

I'm just talking here that you said that the seized

12

material that they had, the computers and storage media for

13

over six months, you say they took it knowing you did not have

14

possession of classified information, correct?

15

That's correct.

16

And now you've taken the position that there is

17

classified information on that seized material, correct?

18

No.

I believe it's States Secrets Privilege.

19

Okay.

20

I don't know the distinction between the two.

21

Okay.

Not classified information.

I want to ask another few questions.

I believe

22

that there is a request to you that requires you to produce

23

all efforts to market, sell your -- or sell the Source Code

24

for the data compression, anomaly detection and the like.

25

Right.

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1
2
3
4
5
6

And I think you said no such documents exist, is that

correct?
A

That's correct.

Other than the documents that I know

that were produced.

Q

Okay.

Well, that would be on the 21 hard drives and on

the one terabyte and the 500 gigabyte hard drive?

What?

Are those the documents -- those are the only documents

you've produced.

10

I -- is that a question.

11

Yeah.

12

Is that where it's contained, all that data is on

that one, is that right?

13

Possibly.

14

Okay.

15

Yes.

And I believe that you have said that that is

contained on those hard drives, correct?

16

I don't remember if I did or not.

17

Okay.

Now did you have any communications, after

18

February of 2006, with any customer or prospective customers

19

regarding the data compression, anomaly detection, object

20

tracking, and pattern recognition?

21

I might have.

22

Have you produced that?

23

Well, you have my hard drive from my home that they

24
25

I'm not certain.

seized.
Q

Well, I'm talking about after 2006, sir.

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Oh, after.

After February 2006 is what I'm asking for, because the

order requiring you to produce it was from the date in '06,

February of '06, all the way to the present.

5
6

Have you produced any of that?

A

Right.

I believe --

MS. GAROFALO:

MR. PEEK:

Objection.

Lacks foundation.

I don't know what the foundation is.

I'm just asking has he produced it from that date to the

10

present, as he was required to do under request for production

11

16, under Request For Production in the first one, and request

12

for production 27.

13

I can go over that, if I have to, Your Honor.

14

MS. GAROFALO:

Your Honor, he's assuming

15

there are writings to be produced, rather than just oral

16

communications.

That fact hasn't been established.

17

THE COURT:

18

MR. PEEK:

19

All right.
I said have you produced any

documents, Your Honor.

20

THE WITNESS:

I believe the documents, the ones

21

I know that were produced, were the Opspring documents.

22

BY MR. PEEK:

23
24
25

Okay.

Other than the Opspring documents, have you

produced any others?

A

No.

I don't believe there are.

KATHRYN M. FRENCH, RPR, CCR

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There are no others that exist?

No.

You wouldn't have any?

You mean, other attempts to what?

To market.

I don't have any.

Okay.

No.

None?

10

No.

11

None whatsoever?

12

None.

13

Okay.

14

No.

15

Doesn't ring a bell with you.

16

No.

You don't have any on Dennis@ncoder.net?

Now do you know a Steve Visconte?

Doesn't ring a bell.

You are Dennis@ncoder.com, are you not?

17

Am I -- I have no e-mail address.

18

Or dot net.

19

Yes.

20

You are Dennis@ncoder.net, are you not?

21

Yes.

22
23
24
25

Excuse me.

MR. PEEK:

Could I have this marked as, I think,

45.
(Whereupon, exhibit 45 -- a document, was marked for
identification only.)

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1
2
3

BY MR. PEEK:
Q

Take a moment, if you would, and look at this e-mail

string, which actually starts with me at the top.

(Witness complies.) Yes.

It came to me from Mr. Trepp.

And it came to Mr. Trepp

from Mr. Visconti.

And what I actually want you to look at is

Mr. Chris Shockey, the Mr. Chris Shockey e-mail.

Okay.

Do you see that?

10

I see what you're describing, yes.

11

Okay.

12

An employee at Blixware.

13

And then do you see the CC there?

14

Yes.

15

And do you see that it lists that Dennis@ncoder.net is

16

Who is Mr. Shockey?

copied on this e-mail?

17

Yes.

18

So do you have this e-mail?

19

No.

20

Why not?

21

I may have seen it, and that was it, it was gone.

22

Okay.

23

it?

24

I mean --

25

Did you delete it, sir?

So, this was in August of 2007.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

So you deleted

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I don't know if I did or not.

Well, did you make a search for it?

On, on, uh -- on my ncoder.net, it -- yes.

4
5
6

But, I don't

ever remember seeing this.

Q

Okay.

Does this e-mail between Mr. Shockey and

Greg

King at King Charter refer to video compression?

Yes.

And that's data compression, is it not?

Yes.

10

Where is this e-mail?

11

I don't have it.

12

You don't have it, is that what you're saying?

13

That's correct.

14

Did you make a search for it?

15

Yes.

16

Where?

17

On Dennis.net there isn't one.

18

There isn't one?

19

No.

20

So are you telling then, this Court, that when you looked

21

for e-mails that may have come to you at Dennis dot -- excuse

22

me, Dennis@ncoder.net, that you could find no such e-mails?

23

That's correct.

24

And why not?

25

I mean, it doesn't keep them permanently.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

It only keeps

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them for so many days.

Is ncoder.net an internet provider --

No.

-- like AOL?

What is it?

No, no, it's just -- uh --

It's you, isn't it?

Yes, it's me.

9
10
11
12
13
14
15

service on a server somewhere.

18

I don't hold them or contain

them.
Q

So are you telling us that your e-mail service, where you

house your e-mail server, didn't preserve these?

A

I don't have an e-mail server.

I don't house an e-mail

server.
Q

I apologize.

16
17

But, always I did was take an e-mail

I misunderstood your answer.

What is ncoder.net?
A

It's just an e-mail address on a virtual server somewhere

on the web.

19

Is it like G-mail or AOL?

20

Those are specific e-mail services for a lot of people.

21

This is an e-mail service that is set up for one person.

22

Okay.

23

I did.

24

Okay.

25

So who set this up for you?

So there's someplace where, at least, the media

goes, correct?

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Yes.

And this electronic media, are you telling us is wiped as

soon as it's read?

Yeah.

It's only kept for a day; 24 hours.

Okay.

So all of the e-mails that would have been

responsive to request number 16 in the first one, and request

number 27 in the second set, that came to you at ncoder.net,

are all lost?

Wiped out?

Deleted?

I didn't get that many to that.

10

Well, you -- certainly I have seen some in other --

11

Right.

12

-- filings in this Court to Dennis@ncoder.net?

13

I don't even know the person that he's referring to in

14
15

I understand.

this.
Q

Well, why is it, you suppose, that Chris Shockey would

16

e-mail you at Dennis@ncoder.net, as opposed to

17

Dennis@blixware, Dennis@opspring, or some place else?

18

I don't know.

19

Well --

20

Somebody gets an old e-mail address and just keeps it.

21

So you think that Chris just had an old e-mail address

22

for you and he just used that one, as opposed to that was

23

the one that you provided to the employees at Blixware, and

24

the employees at Opspring?

25

I don't think that's the case.

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1
2

And what about the ones you received from Mr. Flynn at

Dennis@ncoder.net?

Yes.

Well, you received those there.

What about them?

Is that the only address

he had for you?

I don't know if that is --

Well, what other e-mail addresses did you have other than

Dennis@ncoder.net, sir?

When?

10

At anytime.

11
12
13

Let's say, in the year 2006, what were your

e-mail addresses?
A

I don't think I had that -- if it was in 2006, it was

late.

14

When did you get Dennis@ncoder.net?

15

I think it was mid 2006 or later.

16

Okay.

17

Ncoder@earthlink.net.

18

Okay.

19
20
21
22
23

What was your e-mail address before that?

And then what other e-mail addresses have you had

after you obtained ncoder.net?

A

I think I had Dennis@opspring.com at some, one point.

don't know if I ever used it.

Q

When did you have that -- oh, you don't think you ever

used it?

24

I mean it wasn't used that often.

25

Pardon?

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It wasn't used that often.

It wasn't used that often.

3
4

Okay.

So then what e-mail were you using in the

'06, '07 period of time?

I think it was ncoder@earthlink.net.

So for how long a period of time, in '06, were you using

ncoder@earthlink.net?

I'd had that e-mail address for quite a number of years.

For what period of time did you continue to use it after

10
11

2006?
A

You said sometime in mid '06, you'd gotten ncoder.net?

If somebody had that old e-mail -- I never terminated the

12

address.

So if somebody had the old address, e-mail would

13

have went to it.

14

So when did you set up ncoder.net?

15

I think it was sometime in '06.

16
17
18

I would say -- I don't

know.
Q

Was that your primary e-mail address for the outside

world then?

19

No.

20

What was your primary e-mail address for the outside

21

world after you setup Dennis@ncoder.net?

22

I had -- I don't think so.

23

What was your primary e-mail address after you setup

24
25

Dennis@ncoder.net in mid 2006, sir?

A

Probably Dennis@opspring, I think.

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You said you didn't use that very often.

I didn't get that many e-mails.

Okay.

I'm an employee.

You're Chief Scientist at Opspring --

Yes.

-- are you not?

And you are Chief Scientist at Opspring?

Yes.

And those e-mails at Opspring are

under your care, custody, and control, are they not, as

Chief Scientist?

10

No.

11

They're not?

12

Yes.

13

Okay.

14

I didn't get that many.

15

Well, whatever ones you got, you could have made copies,

16

Are they available to you?

And you could have made copies of those?

could you not?

17

In '06?

18

'06, '07, '08.

All the way from the time that the

19

request was asking you to produce them, which is from the,

20

you know, I believe February of '06, all the way to present

21

time.

22

I mean I may have printed them out.

I --

23

Well, where -- I haven't seen them.

Where are they?

24

I don't know.

25

You don't know.

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1
2
3

What efforts have you made to search for them, sir?

A

Up until -- I was trying to think of the date.

through my storage.

At Opspring?

I don't think it has one anymore.

I looked

I mean, I looked when

I was up there.

Okay.

When did you do that?

January and February of '07.

Okay.

Now, in August of 2006, you were sent a request to

10

produce, which is number 16, which is -- and it's a continuing

11

request:

12

products, and/or research and development efforts, including,

13

not limited to all marketing documents, business plans,

14

PowerPoint presentations, white papers correspondence, and/or

15

notes of customers or potential customers."

"All documents related to eTreppid's technology,

16

When was this?

17

In August of 2006, sir.

18

When did you --

19

Wasn't there a stay on?

20

There may have been a stay, but it didn't give you the

21

right to delete e-mails?

22

Well, no.

23

You are under an obligation to preserve.

24
25

There may have been a stay.

I understand that.

But, did you preserve any of your e-mails that would have

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been responsive to that?

Probably.

And where are they then?

Mr. Flynn probably has them.

Okay.

6
7

Yes.

So, Mr. Flynn has them.

Now, in November of '07, you had a similar type of

request, request number 27.

Okay.

"Please produce any and all documents, including but not

10

limited to correspondence, e-mails, calendar notes, journal

11

entries, PowerPoint presentations, marketing materials, or

12

phone messages memorializing any communication between you,

13

or anyone acting on your behalf, or any customer or potential

14

or prospective customer of Opspring or Azmeth."

15
16
17
18
19

Where are those e-mails?

A

I wasn't involved in any of that, marketing.

you just read.

Q

Now, Mr. Shockey seems so think you're involved because

he copied you on this?

20

Yeah.

21

You don't know --

22

He may have just done that.

MS. GAROFALO:

23

speculation.

24

BY MR. PEEK:

25

Whatever

Objection.

I have no idea why.

Calls for

Well, Mr. Shockey copied you on this, did he not?

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Obviously.

So Mr. Shockey must have had some reason to do so, would

he not?

4
5

MS. GAROFALO:

you?

10
11

Well, do you know why Mr. Shockey would have included

I don't even remember it, so -- you're the one who just

provided this to me, so -Q

Well, I'm just trying to find out where all these e-mails

are, sir; whether you got the one which we have here.

12

Right.

13

Or, you got others.

14

Same objection.

BY MR. PEEK:

That's what that piece of paper says.

Where are they, because you've

produced none to date.

15

THE COURT:

16

The objection is overruled.

Go ahead.

17

THE WITNESS:

I'm not certain.

I don't want to

18

say something to give up my privilege, my -- I'm not certain

19

I haven't given some to my attorney.

20

But, I'm not --

21

BY MR. PEEK:

I'm not saying I have.

22

So it's your attorney's fault then?

23

No.

24
25

I'm not blaming my attorney.

I'm talking about

Debra.
Q

Oh, so now we're he blaming Debra?

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No.

I see.

I --

I just want to know where they are.

5
6
7
8
9
10
11

Okay.

That's all I want to

know.
A

I'm not certain, but I will make a diligent effort to

find out.
Q

Okay, but you've been ordered to do so since February

of this year.

What efforts have you made since February of

this year to do that?

A

You can give me a hundred orders.

But if it takes a 20

12

hours a day to do them, and you do it every single day, you

13

can't get them all done.

14
15
16
17
18
19
20
21
22

So you can just ignore the Court's order because of your

own personal -A

Considering I can't show it to my attorneys.

discuss it my attorneys.
Q

Wait a minute.

stuff.
A

I can't

I can't --

That's the States Secrets Privilege

This is just correspondence related to marketing.

But all that other work I've had to do related to the

other stuff.
Q

I'm just talking about the documents that are not covered

23

by the States Secrets Privilege that are covered by Request

24

For Production number 16, in the first request, and by number

25

27 in the second request?

It has nothing to do with the State

KATHRYN M. FRENCH, RPR, CCR

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1
2
3
4
5

Secrets Privilege, does it?

A

But I don't have anything to do with marketing or the

things that you described.

Q

I understand, sir, but somebody thought you had something

to do with the --

But that's one e-mail.

-- the sale of the products of data compression that

8
9
10

somebody had, whether it be Blixware or Opspring?

A

I can't speak for them.

I've never seen the e-mail so --

you know, this is the first time I've seen it.

11

Well, that's not the first time you've seen it, is it?

12

Okay.

13

No.

have -- maybe.

Because I got this, doesn't mean I -- I could

I don't know.

I've not seen this one e-mail.

14

And there are probably more, aren't there?

15

Have I got more than one e-mail in my life?

16

Okay.

17

Yes.

And there are probably more that would be

responsive to request number 16.

18

I doubt it.

19

And -- sorry.

20

Well --

21

You doubt it?

22

-- 16 is the one that's related to the marketing?

23

Right.

24

No.

25

You think you only got one and this is the one?

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1
2

I wasn't -- I'm not -- wasn't and am not involved in that

part of it.

Who is?

Nick Rhodes would be.

Okay.

Yeah.

Nicholas Rhodes?

Yep.

Okay.

10

I believe so.

11

Well, is he or isn't he?

12

I honestly, for certain, I don't know.

13
14
15
16

Is he on this?

I don't know.

I --

18

MR. PEEK:

19

THE COURT:

20

MR. PEEK:
Honor.

25

Objection.

Lacks foundation.

Is somebody names Nicholas -No.

She's interposed an objection.

I apologize.

I'll move on, Your

I'll withdraw that.

22

24

But -- I don't know.

then?

MS. GAROFALO:

23

He might be an

So then Nicholas Rhodes would have all of these documents

17

21

He's at Yahoo.com.

And is he an employee of Opspring?

independent contractor.
Q

He is.

THE COURT:

All right.

BY MR. PEEK:
Q

Is Nicholas Rhodes somebody with whom you have contact

from time to time?

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Yes.

Did you ask him whether or not he had any such e-mails?

I believe I did.

And what did he tell you?

I thought they did.

You thought that they did.

Yeah.

And did you say then, well, produce them to me?

Well, I thought -- I said pro -- they have to be produced

10
11
12

to the attorney.
Q

Not necessarily to me.

Well, do you know whether they were produced to the

attorney?

13

I don't know.

14

Okay.

So is it your testimony then -- just so we

15

can sort of close this -- there's only one e-mail, if any,

16

that may cover exhibits -- excuse me, request 16, of

17

correspondence, notes of meetings, PowerPoint presentations,

18

business plans, and marketing documents?

19

That are in my possession.

20

In your possession.

21

We went through who the "you" is.

Want me to go back to that; who the "you" is?

22

But I wasn't involved in any of the marketing plans.

23

That's not my question.

24

only one that exists?

25

involved in it.

My question is, is this the

I understand you say you weren't

But, for some reason, Mr. Shockey thought

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it was important to copy you on the e-mail.

had some belief that you were involved in the sale of data

compression?

MS. GAROFALO:

THE WITNESS:

there are any others.

BY MR. PEEK:

Objection.

What diligent efforts have you made?

I went through my storage.

10

Okay.

That was number one.

You went through your storage.

No.

13

Does it have stuff after 2006?

14

Yes.

15

Okay.

17
18
19
20

Your storage only

includes information pre-2006, does it not?

12

16

Asked and answered.

I'll diligently look to see if

11

So, he must have

I mean --

So when you went to that storage, you looked for

all these e-mails?

A

Yes.

But, like I said, I believe my prior attorney may

have some of this.

Q

Not these -- not this (indicating).

of '07.

This was August

Mr. Flynn was gone by then, wasn't he?

21

I'm not sure he's ever been gone.

22

I understand the flippant sarcastic remark but, at this

23

time, in August of '07, would Mr. Flynn have had this e-mail,

24

sir?

25

Yes or no.
I don't know.

I doubt it.

I -- no.

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1
2

And were you also required to produce that e-mail in

native format as well?

Have you -- can you do that?

Which e-mail?

The e-mail that's Exhibit 45.

The one you just handed me?

Yeah.

No.

And that's because it's been destroyed, correct?

You have a printout of this.

10

That's because it's been destroyed?

11

No, no.

12

Well, where is it?

13

I don't know.

14

Where is the e-mail in native format, sir?

15

I don't know.

16

So when you produce it, you will produce it in native

17

Can you do that?

Yes or no.

format?

18

I'll produce whatever I have in any format.

19

Now, one of the other requests that you were asked to

20

give was a request regarding any and all payments made by

21

either Blixseth, Opspring, Azmeth, Michael Sandoval, or

22

Atigeo.

23

correct?

24
25

And I think your response was you gave an affidavit,

Well, you have all my bank statements, and I only have

one bank account.

So, you have all the --

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So it's in all the bank statements then?

I only --

It's in -- that's the one bank account where?

The Wells Fargo account.

So that would have all of the evidence of payments?

Yes.

Why didn't you produce that to us as opposed to your

affidavit?

Because the FBI took them.

10

The FBI took your papers, payments, evidence of payments

11

by Opspring, Azmeth, Atigeo, or Sandoval?

12

No.

13

I know it's not correct.

14

You're right.

15
16
17

That can't be correct.

You're right.

Uh, I was thinking that was before the time that -Q

Well, you gave an affidavit.

I wanted to see the

payments.

18

Yeah.

19

Where are those?

20

Well, the -- I don't have a copy of the check that I got,

21

so wouldn't Opspring have that copy?

22

I'm asking what you have, sir.

23

The bank statements.

24

You would have a bank deposit.

25

So, you don't have --

You would have a bank

statement.

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1
2
3

Where are those?

A

I don't know if I would have a bank deposit slip because

it may have been wired in.

Okay.

In which case, the --

Did you get a copy of a -- I mean, when I -- all my

checks go in in electronic deposit.

check.

No.

10

You don't get copies.

11

But, I get a copy of the

I don't get copies of checks.

bank statement.

Okay.

But I get then, also, a

And it shows --

12

Yes.

13

-- and that shows I got a debit to my account, I think is

14

the right word, or a deposit.

15
16

Where are those?

A

I thought I ordered my bank statements at the time this

17

was asked of me.

18

well, they just got them from the bank directly.

19

Okay.

And then I don't know if somebody said,

Now are there any contracts, to your knowledge,

20

that Opspring has for the sale of the -- sale of any of the

21

video compression, pattern recognition, anomaly detection?

22

No.

23

Any proposals?

24

I don't know.

25

You're unaware of that.

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I'm not involved in that.

You're not involved in that.

Who is is that?

That's Nick Rhodes?

Yes.

Is he the only person?

I would say he's the main person.

Okay.

8
9

THE WITNESS:

Yes.

I really need to use the restroom.

I don't know how much longer this is going to go today.

10

THE COURT:

Well, it's quarter of 5:00.

I'm not

11

interested in -- we can take a quick two-minute break, but I

12

want to use this time.

13

THE WITNESS:

14

THE COURT:

15

THE WITNESS:

16

THE COURT:

17

MR. PEEK:

18

Your Honor, so --

19

BY MR. PEEK:

20

Okay.

Well, I mean --

And I mean quick, so -Well, I'll wait.

All right.
Okay.

Let's go.

Go ahead.

I think I'm just about done,

Now the e-mails that are the subject matter of the

21

Court's review, and that are the subject matter of the

22

privilege log that you received, where you were copied, what

23

was the e-mail address on those?

24

What does that mean?

I'm not --

25

Well, there was a privilege log that we talked about.

KATHRYN M. FRENCH, RPR, CCR

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You were in court when we talked about that today?

I heard about it.

Well, it's a privilege log of all communications

I don't understand what it is.

between --

Attorneys and so forth?

-- attorneys and others.

Uh-huh.

And on that privilege log, it shows you as being either

authored or copied --

10

Right.

11

-- or addressee.

12

Do you remember that?

13

No.

14

You remember discussing that.

15

But, I mean, I remember you discussing that.

I just want to know what the e-mail address is for

16

Montgomery, on those e-mails that are about 200 -- I think the

17

Court said 244 e-mails.

18

Those are all my communications?

19

Well, the ones that are your communications, what's the

20

e-mail address?

21

Either ncoder@earthlink, or Dennis@ncoder.net.

22

Before that privilege log was prepared, did you provide

23

those documents for your counsel, for them to make the

24

privilege log?

25

I believe they have the attorney, ones between me and

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2

them.
Q

I mean, Mike Flynn, I can't speak for.

No -- just a moment.

3
4

I don't think this is a court exhibit, Your Honor.

I will mark my copy.

Is this 46?

THE CLERK:

7
8

identification only.)
THE COURT:

MR. PEEK:

It's the one that was given to

counsel, Your Honor, that I provided to the Court.

13

THE CLERK:

14

MR. PEEK:

15

It's the privilege log that you

received, correct?

11
12

46.

(Whereupon, exhibit 46 -- a document, was marked for

9
10

I know we had one.

Do you need it?

No.

Go ahead.

BY MR. PEEK:

16

Do you see that privilege log?

17

Yes.

18

Do you see that there are communications referenced

19

there, and that you're listed as the recipient --

20

Yes.

21

-- on many of those.

22

them.

I see those.
In fact, I think almost all of

I can represent that to ya.

23

Okay.

24

And what's the address on those e-mails?

25

I believe it -- if they're Mike Flynn, it's either

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ncoder@earthlink, or Dennis@ncoder.
Q

But if it's not Mike Flynn but, say, just Edra and

others, what would it be?

Dennis@ncoder.

If it was Sandoval, who would it be, what would it be?

I don't communicate with him.

You don't communicate with Mr. Sandoval in any way?

None.

None.

10

And you haven't at all since February of 2006, or

you don't currently?

Which is it?

11

No, no.

12

At all.

13

I mean, I don't remember if that was the date, February

14
15

or March.
Q

Okay.

I -- at all.

It was March.

Mid March.

So from February through March to the present, are

16

you telling this court that you have never ever communicated

17

in any way, shape, or form, in writing, to Mr. Sandoval?

18

Since that split up?

19

Since February of 2006, sir.

20

Oh, you said seven.

21

No.

22

I said -- if I did, I misspoke.

I apologize.

February 2006.

23

Yes, yes, yes, yes.

24

Have you communicated with Mr. Sandoval at all during

25

that period of time?

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Yes.

Okay.

And then there was some split up after that?

Yeah.

That's the time I thought you were referring to.

Okay.

Now before that split up time -- when was that

Yes.

split up time, by the way?

I thought it was March of '07.

Okay.

I've seen an e-mail of July of '07, in which

you're copied --

No.

10

-- involving you and Mr. Sandoval on that e-mail.

11

So, you're saying you weren't communicating with

12

him?

13

14
15

It was long before that.

Whenever the split up was, which I think was mid March of

'07, I have not communicated.

Q

I might have my dates wrong, so that -- so what was the

16

e-mail address from Mr. Sandoval in that period of time, from

17

February '06 through, uh, whenever that split up was.

18
19
20

Yeah.

Dennis@opspring, of which that mail server resided

at Michael's building.
Q

And were there any e-mails between you and Mr. Sandoval,

21

or ones which you were copied where the e-mail address was

22

Dennis@ncoder.net?

23

It's not -- it's possible.

24

Okay.

25

And those e-mail addresses that are the subject

of -- the e-mail address for Dennis, the subject matter of

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that privilege log, is that either Dennis@ncoder.net, or

Dennis@opspring.com?

Yes.

So when you say you didn't use it very often, you were

using it for communications with Edra, Michael?

Well, I --

Go ahead?

Dennis@opspring was kept on Michael's servers between

whatever the date, April -- up until March of '07 when they

10

split up.

11

kept it.

12
13

That e-mail server did go with Opspring.

Okay.

Michael

And then so that was the split up in the spring

of '07?

14

Yeah.

15

March of '07?

16

Yes.

17

So was there then no longer an Opspring.com e-mail

18

I think it was March.

Yes.

address for Dennis?

19

There was but, you know, I wasn't using it.

20

You weren't using it?

21

Or Earthlink.

22

Pardon me?

23

Or Earthlink.

24

Which one?

25

Either.

You were using the ncoder.net?

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Okay.

Dennis@ncoder.

Thank you.

Which one were you giving out to the public?

Now, I think you told the Court that there are --

the only response that you have with respect to documents

that relate to your attempt to sell, license, distribute, or

otherwise exchange for value in any interest in software or

other technology in the fields of data compression, object

tracking, Pattern Recognition, or Anomaly Detection, from

10

January 18th to 2006 to the present, you produced in the form

11

of those proposed agreements, is that that correct?

12

Yes.

13

And are you telling us that there were no e-mails at

14

all?

15

In that time period, which was --

16

Well, from January 18th, 2006 to the present.

17

Well, between January -- I told you that Michael has the

18

e-mails that were kept on his server between the period of,

19

whatever, April of '06.

20

Let's just talk about before that, because I think all

21

those licensing agreements are in April of '06 that you

22

produced.

23

That's what I thought we were talking about.

24

So before -- between January 18th, 2006, and the

25

execution of those agreements that you produced to us that

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you say are the only documents that you have that are

responsive, are you telling us there were no e-mails?

Well, there were e-mails I had on my home computer

because, obviously, I had no eTreppid account.

Dennis@ncoder.

I had no

That was taken from me by the FBI.

Where were those e-mails?

I believe on that computer.

And why didn't you produced those?

Because I don't want to say I don't have the drive.

10

just -- I just haven't looked.

11

I say that is that, I gave the drives -- I had to give the

12

drives up to have them copied and everything else.

13

you were getting a copy of the whole drive.

14

QuickBooks, the last ten years of checks I've written.

15

got everything.

16
17

Okay.

I mean when I say that, when

And

You got my
You

So are you telling us you produced all those

e-mails there?

18

I think they're on those drives, yes.

19

You think or you know that they are?

20

Sir, that's important to me, because I don't have

21

anything that, in your response to request to produce, that

22

says you produced documents that are responsive to request

23

number 30.

24

Which is what?

I don't --

25

In response to production number one?

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Just read it.

I'll read it again to you, sir.

Yeah.

"All documents that relate to any attempt, parentheses,

either successfully or unsuccessfully, close parentheses,

by you to sell, license, distribute, or otherwise exchange

for value, any interest in software or other technology in

the fields of data compression, object tracking, pattern

recognition, from January 18, 2006 to the present."

10

First is I don't think there are any.

11

Okay.

12

He second is the FBI took a lot of documents from my

13

home.

I mean, they -- and there were, obviously, a lot of

14

shredded documents.

15

So you're saying the FBI shredded documents?

16

I believe they have.

17

Okay.

18

Right.

19

Okay.

Yes.

And we'll hear about that on September 8th.

But whatever -- whether they shredded or not, they

20

gave you back everything in at least March of 2007, did they

21

not?

22

Yes.

23

And whatever they gave you back --

24

Right.

25

-- we'll hear that motion later.

Yes.

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Have you produced those e-mails?

Which e-mails.

That we've --

Well, I know, but I --

That relate for request -- do you want me to read it

6
7
8
9
10
11
12
13
14

again?
A

I believe they're on the same computer that has the --

have I personally?
Q

Okay.

No.

So you have not produced documents in response to

request number 30, is that correct?

A

Well, I produced the drive that would have contained

them.
Q

Okay.

So then when I find this 911, then I'll find all

of those e-mails?

15

I believe so.

16

And what if I don't?

17

I guess I'll be on the stand again.

18

Okay.

19

Uh, maybe not.

But, I just want to make sure that you then went to

20

that computer, searched that computer, and said that I have

21

documents that are responsive to request number 30.

22

I don't have anything that says that.

23

the hard drives that were produced to me, the 21, say they're

24

responsive to the request number 16, which relates to white

25

papers --

Because

All I have is that

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What I --

-- and the like.

I -- when you say 21, that is the non-FBI hard drives.

Correct.

That's where you said you gave them.

where 911 is.

I thought there was more than 21.

Okay.

And so then you're talking about the ones that

were produced by the FBI seized material.

subset?

That's a different

10

Yeah.

11

That's the one that has 911, nine one one?

12

Yeah.

13

Well, I don't have 28.

14

That's

That's --

I think there's 28 of those.

been provided 28.

15

I haven't received -- I haven't

I was told there was 30.

I received 17.

Where are those other 11 or 13?

16

Well --

17

Where are they?

18

Okay --

19

I don't even know that I have the one that ends in 911?

20

Well, I produced it to the attorneys.

21
22

Okay.

I believe there are 28 hard drives.

the shrink wrap ones.

15 were non-shrink wrapped.

23

Okay.

24

You say that you didn't get them or whatever.

25

13 were

know why that is.

KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

I don't

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Well, what I, what I don't know is that I -- I wasn't

told that on 911 are the documents responsive to request

number 30.

Right.

You're telling me it is.

I think they are.

7
8
9

And 911 was the home computer that was

in my house, seized by the FBI.

Q

And you're also telling me there were 28 hard drives.

And I have not been provided 28 hard drives.

10

To my knowledge, they were produced.

11

Ms. Klar said there were 30 at one of the hearings.

12

Those have not all been produced.

13

received 17.

14

We paid for it, but we only

The FBI produced a list, that I was given, of the 28

15

serial numbers.

And that was the ones that I produced.

It

16

was also the list that was produced in a motion to quash in

17

D.C.

18

I believe it was the same list.

Well, when you were asked previously by this court, on

19

June 10th, about whether or not there were any documents that

20

relate to any attempt to you to sell, license, distribute or

21

otherwise exchange for value any interest in software or the

22

technology in the fields of data compression, object tracking,

23

pattern recognition, or anomaly detection from January 18th to

24

present, you told this Court that the only thing that you had

25

were the formation documents of Opspring?

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That's correct.

And I just said, a minute ago, I don't

think there are anymore.

And I'm saying that they would have to be on that drive

because --

But you said where is the e-mails?

Did you search for them?

My question is did you search

for them?

I mean, I shouldn't -- I shouldn't be -- Mr.

Montgomery, it's not my obligation to search through all of

the, frankly, millions and millions of files that you have

given me.

You have the obligation, sir, to produce documents

10

that are responsive to this request, and tell me where they

11

are, Bate number, or do something --

12

I believe they're on drive 911 or --

13

MS. GAROFALO:

14

Argumentative.

15

answer before interrupting.

16
17
18
19

Okay.

Objection.

And he should let the witness complete his

THE WITNESS:

I believe it's on drive 911.

BY MR. PEEK:
Q

Okay.

Have you filed a pleading that says they're on

drive 911?

20

I'm not the lawyer in this case.

21

Then why did you tell this Court, on June 10th, that they

22
23
24
25

were on drive nine one one?

A

I can't remember every single detail.

You're -- I --

you just acknowledged there are millions of files.

Can you remember what was on all of those millions?

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I'm not being argumentative.

I thought I did.

I'm

telling you there's a good possibility that they should be on

there.

them.

I will do due dil -- I will do whatever I can to find

Believe me.

And why haven't you done so before today?

I have.

And what have you found in the form of documents that

are responsive to this request number 30, when you were

brought before the Court on June 10th, June 24th, and now

10
11
12
13

today?
A

And I've produced another, what, two million, three

million files since then.

THE COURT:

All right.

It is now five o'clock,

14

and we are going to conclude for the evening.

15

commence the Continued Order to Show Cause hearing at

16

nine o'clock a.m.

17

We will

And I would ask counsel, with respect to exhibits,

18

to take a look at the exhibits and see which ones you will,

19

to which you'll stipulate their admission, and any about

20

which you have questions.

21

few minutes early so you can tell the clerk of court if there

22

are stipulations.

23

So, you might want to arrive a

So, I'll see everyone tomorrow morning.

24

THE WITNESS:

25

MR. PEEK:

Can I ask a question, Your Honor?

Your Honor --

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THE WITNESS:

Am I going to go on the stand

right at 9:00 again?

THE COURT:

Yes.

THE WITNESS:

THE COURT:

(Court Adjourned.)

Of course.
Thank you.

We're in recess.

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8
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-o0o-

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I certify that the foregoing is a correct

transcript from the record of proceedings
in the above-entitled matter.

15

\s\

Kathryn M. French

August 29, 2008

KATHRYN M. FRENCH, RPR, CCR

Official Reporter

DATE

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DEFENSE'S WITNESSES:
1)

PAGE:

DENNIS MONTGOMERY (resumed)

Direct Examination By Mr. Peek

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I N D E X

O F

E X H I B I T S

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EXHIBIT NUMBER:

MARKED

Exhibit 45 -- document

115

Exhibit 46

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-- document

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KATHRYN M. FRENCH, RPR, CCR

(775) 786-5584

RECEIVED