3.Waiver Objection and Ruling to Strike Karpeles Testimony
61 linesTHE COURT: Mr. Dratel, when you reach a stopping point, we're at 1:00 now.
MR. DRATEL: Okay. We can stop now.
THE COURT: I apologize, but we're going to take lunch now. I know we just started about 40 minutes ago. We'll come back at 2:00. We're still going to get you out on time today. We're not going to extend the day at all. You'll get out right as we had previously said, 5:00.
I want to remind you not to talk to each other or anybody else about this case. Thanks very much. See you after lunch.
(Jury excused)
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(In open court; jury not present)
THE COURT: The witness can be excused for lunch, as well.
(Witness temporarily excused)
THE COURT: Ladies and gentlemen, be seated for a moment. I have a matter in this room right now. I just want to raise one thing. You folks may want to raise something and let's do it quickly; otherwise, we'll take it up just before two.
What I want to raise is I see the government now is objecting a lot, as is your right to do if you believe the questions are objectionable. It is a difference from how things were being handled before.
I think you'll do what you need to do, but if there's anything that people believe they can do in terms of the formulation -- now, that you know, Mr. Dratel the government is going to object --
MR. DRATEL: On every question, yes.
THE COURT: In terms of form, you can refrain some of the questions and we can avoid some of that. That was not the way we were proceeding before. There was a little more leeway given to people to speak in sort of regular formed sentences, but I'm not suggesting the government doesn't have a right to object. You do. But we'll just all take into consideration as we figure out how whether it's going to continue to each question because it will take longer so you might want to pick a few.
MR. DRATEL: The government is free to do what it wants to do.
MR. TURNER: I don't want to go down the same road we went before.
THE COURT: I understand. I think that there are objections which are objections that you really need to make, and then there are objections where there certainly may be a legal basis for it, but the better part of valor is to stand down.
You'll make your decision and what I mean, Mr. Dratel, in terms of the government being free to do what it wants to do is only insofar as anybody can object when you folks believe that you need to do so to preserve the record, and that's an important thing for you folks to do. Everybody needs to do it if you believe it's important, but there are lots of objections that are neither here nor there ultimately. You guys will decide. The rules are no different from the government than they are for the defense.
Let's take our lunch break and we'll come back at 2:00.
(Luncheon recess)
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AFTERNOON SESSION 2:08 p.m.
(In open court; jury not present)
THE COURT: We are still waiting for one juror. Actually, I have one jury matter and I want to discuss with you folks how to deal with the struck testimony.
On the jury matter, there's one juror who has got apparently issues with her place of employment which will not -- their HR policy and whether or not we can overcome this is TBD, we're going to try to overcome this -- indicates that they can have two weeks paid for jury service and then after that it has to come out of her vacation. And that may or may not present certain issues for this juror. So we're trying to determine whether or not her place of employment would see fit to make an exception in that she's already been impanelled on a jury, and it's not going to end within the time frame that she's got.
If they say no, then we'll have to determine how we want to approach her about that. In discussions with counsel, the Court will discuss that with counsel, how people propose we should proceed and whether or not, if she is very concerned, whether or not on that basis we do anything about that, including replacing her with one of the alternates. That's to be determined. I just wanted to flag for you that that issue has come up today.
I have received from the government an email that was copied to counsel, all counsel, that has their proposal as to excerpts to be stricken based upon the Court's prior ruling.
Mr. Dratel had mentioned before that the Court had not yet entertained arguments as to waiver, and that is correct, or any other arguments other than rearguing the Court's evidentiary ruling. Also I need to know how soon we're going to have to deal with this when the redirect is likely to begin.
Mr. Dratel, let's take the last question first. How much more on cross do you have of Mr. Der-Yeghiayan?
MR. DRATEL: With the exception of one question that I'll ask the Court, which is whether I'm going to go at all into the second person, I'm not sure whether I'm allowed to go at all into the second alternative suspect, whether that's something --
THE COURT: The main issue that we had dealt with was with the mises.org piece.
MR. DRATEL: Right.
THE COURT: If there are other aspects of it that I'm unaware of, we can take it step by step and see.
MR. DRATEL: So, between an hour, an hour and-a-half I guess.
THE COURT: So probably then, it's likely to be a time for break, but do you want to now preview your waiver argument? I think I understand just with the word "waiver" possibly the contour of what you're getting at, but I'd like to give you a chance to state it for the record. We can do it at the break if you'd rather not do it right now.
MR. DRATEL: I can do it at the break in a way that -- the waiver is really three parts: One is, they didn't object, and you can't put that genie back this the bottle in any respects. The second is, they're not objectionable in many respects even under the Court's ruling. And the third would be that, you know, it changes the whole nature of how an examination proceeds and that's one of the reasons why you have to object contemporaneously because then you can't go back and reconstruct it in a manner that then undoes things that you could have changed.
So all of that is a factor in the waiver argument and the Court said on Thursday that it was out there already, so, you know, --
THE COURT: The fact that Mark Karpeles exists as a potential individual as to whom there is some evidence that people can draw inferences from, that would not be gone from the case. Even with the government's suggestions, there is lots of evidence in terms of questions that you asked that was perfectly appropriate in that regard.
MR. DRATEL: Yes. And I think all appropriate in the context of -- not only in the context of alternative suspect, but also in the context of the conduct of the investigation, because at the end of the day, we're going to have a comparison with the investigation of Mr. Ulbricht and the conclusions that were drawn and the investigations of at least two other people and the conclusion that were drawn, and at the end of the day, the only thing that's going to be a factor for the government is something that no one can trust. That's part of the whole defense, and that's part of what these questions are about.
And it's perfectly appropriate to ask an agent and a law enforcement officer about the conduct of his investigation and how it proceeded and even --
THE COURT: I don't want to reargue the evidence.
MR. DRATEL: I know, I'm just saying, the notion that now that there's no waiver when these things come in and is just -- I mean, there has to be some notion of waiver in the context of a trial in the sense of what it means to have a contemporaneous objection and what it means not to have a contemporaneous objection.
THE COURT: Mr. Turner.
MR. TURNER: Your Honor, the trial has gone fast. You wish you had all the law at your fingertips. I think the Court was inclined to think a lot of the testimony was admissible, which after further review is now clearly inadmissible.
It's not too late for the defendant in that we're not past cross. We're still in the middle of cross. If the defense has further inquiry that's admissible that's proper about Mr. Karpeles, the defense can still pursue that, so there's no prejudice to striking the prior testimony.
And the problem with leaving it in is there's very clear circuit law that if hearsay like that comes in, the curative admissibility doctrine applies and the government can get equivalent hearsay in on redirect. So the government certainly would inquire of Special Agent Der-Yeghiayan in the same fashion that the defense inquired on cross about all the reasons that he now believes the defendant is guilty, and that would certainly be appropriate. And I think that was what your Honor wanted to avoid by striking the testimony that's objectionable that came in on Thursday.
THE COURT: So here is what we're going to do --
MR. DRATEL: Just one other thing.
THE COURT: Yes.
MR. DRATEL: They knew full well what was in the 3500. They cannot -- it cannot be that this was not on the radar for them, then to sit by and let it all come in and then completely eviscerate the defense after the fact is unfair, and that's a waiver.
They knew better than anyone what was in the context of my questions and what was in the context of Agent Der-Yeghiayan's answers.
THE COURT: Mr. Turner.
MR. TURNER: I would say never in a million years would I have imagined that the defense would be trying to allege that Mark Karpeles framed Dread Pirate Roberts. I don't think that was clear from the opening and that was not apparent to the government until the questioning came in that way. So the government I don't think was put on notice by the opening alone.
THE COURT: My basis for my ruling is not that the government should not have anticipated; that they may well have anticipated it. They should have objected, but they didn't. We are now where we are.
We have had an objection that we have now talked about extensively, and I will strike the testimony that is indicated in the government's email to the Court, but not right now. I say that to you folks so that you can plan the remainder of your cross and the government can plan its redirect as appropriate.
I do not, however, plan to point the jury to the specific Q and A's that I'm striking, unless you folks make arguments that that's what I should do.
My intent, which I intend to do not right now, is to give the jury a general instruction about suspicions and conclusions that the agent reached are struck from the record and then to provide clear indication by line to the court reporter and to everyone here as to what is struck from the record, but I don't think it stands in anyone's interest to have it be put on to the screen in terms of exactly what's struck from the record. That seems to indicate taking away and giving more weight to it all at the same time. So I think it actually has issues where it compounds the problem.
But we can deal with that, the method, at another time. And when I say another time, it won't be a long time, but in terms of being able to understand what to proceed with right now, people should proceed with that view and to construct the remainder of your cross.
If it goes on longer than you were anticipating, Mr. Dratel, as a result, then I understand.
MR. DRATEL: I don't know that I'm prepared to do it for this reason: First of all, there are facts here and factual answers and factual questions that the government has included that should not be stricken under any circumstances.
THE COURT: I have reviewed them and I do believe that what they indicated they would strike is consistent with my ruling. There are pieces that are around it, and I assume you've got the same shaded portions that I have --
MR. DRATEL: Yes.
THE COURT: -- that are not struck and appropriately so, and that would remain in terms of MtGox and Mark Karpeles. I mean, he's not eliminated from the record. And you'll certainly be able to argue whatever inferences you think you can argue.
MR. DRATEL: But there are other aspects of this that are simply not -- that are factual, such as citizenship, such as the part on page 506 and 507, which is about the conduct of the investigation. It has nothing to do with --
THE COURT: I believe the government has, consistent with my lengthy ruling this morning, cabined the material appropriately. So I'll look at each of the individual Q and A's again, but you should proceed right now as if those pieces are going to be struck from the record.
MR. DRATEL: I'm not sure I can proceed on this level because now I have to go back and reconstruct all this material that was unobjected to. I have to go back and look at parts of the cross that were already finished and done and then reconstruct it. I can go on with my cross right now, but then I'd like a break until tomorrow.
THE COURT: No. I'm done with this issue. If the government had objected timely at the first Q and A, we wouldn't be having this issue right now because it would have been highlighted on the basis of suspicion, conjecture and belief right then as opposed to going on.
MR. DRATEL: And I would have rephrased the question.
THE COURT: I'm saying go back and you can rephrase at the questions right now.
MR. DRATEL: But I need time to look at this. This is seven or eight different pieces.
THE COURT: We have been dealing with the possibility that this very information could be struck since Thursday night.
MR. DRATEL: No. They didn't identify this until 20 minutes ago.
THE COURT: No. It was obvious to me and it should have been obvious to you folks that when we were dealing with an objection about a type of testimony, that one potential result, particularly in light of the government's letter when they made an application to strike, is that certain things would be struck. The only question was what.
And therefore, this should not be a big shock in terms of what's being struck. I'm not suggesting that you should like it or agree with it, but it's how we're going to proceed.
MR. DRATEL: I want the equivalent so that -- I just want it to be equivalent, that's all, so that they can sit on their hands after providing all the 3500 material knowing exactly where the examination is going, they don't have to do that and now on the fly I have to do this. I don't think that's equivalent, your Honor. I'm sorry.
THE COURT: I think we have the way we're going to proceed in mind.
Do we have a full jury?
COURT CLERK: We do.
THE COURT: Let's bring out the jury. Let's get Mr. Der-Yeghiayan back in the courtroom. Mr. Der-Yeghiayan, can you folks get him.
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(In open court; jury present)
THE COURT: When you get to your seat, let's all be seated.
Mr. Dratel, you may proceed, sir.
MR. DRATEL: Thank you, your Honor.