SDNY COURTHOUSE,
Sept 8 – Just after the
indictment of electric vehicle
maker Nikola's founder Trevor
Milton was unsealed on July
29, 2021 a press conference
was held in the Southern
District of New York
prosecutors' office. Inner
City Press went and asked
about the SEC complaint's
reference to Milton targeting
"Robinhood investors." Video
here.
US
Attorney Strauss and her SEC
colleague (on the job for all
of one week) both deferred
comment on particular
companies or phenomena like
Robinhood, or Elon Musk, or
SPACs. But it seems there will
be more prosecutions coming -
including in the
crypto-currency space?
On
September 15, 2021 the
assigned District Judge
Edgardo Ramos held an oral
argument. Milton wants to move
the case to Utah or Arizona,
with a sealed motion.
(Manafort's lender Steve Calk
asked the same, to move to
Chicago, which was denied). On
September 15 Inner City Press
live tweeted here
(and podcast here)
In March
2022, Milton withdrew his
Second Circuit appeal of
venue. On March 22, the US
Attorney's Office filed
a joint schedule: "Dear Judge
Ramos: The Government
respectfully writes to advise
the Court that the parties
have, following the dismissal
of the defendant’s
interlocutory appeal,
conferred and agreed to a
revised schedule with respect
to the exchange of certain
material and information prior
to and during trial pending
confirmation of the currently
scheduled trial of July 18,
2022, as a firm trial date by
the committee of the Southern
District of New York charged
with assigning trial dates. 1
The schedule is as follows:
June 6, 2022: The Government
provides to the defendant
material covered by 18 U.S.C.
§ 3500, including material
pursuant to Giglio v. United
States, 405 U.S. 150 (1972).
Full letter on Patreon here.
On August 30,
Milton's lawyers filed a reply
on lulling, including "
Defense counsel’s review of
discovery produced by the
government suggests that
the government’s allegation
related to the so-called
“lulling” conduct represents
an attempt to shore up a
basis for venue in the
Southern District of New York
for Count Four. Compare
with Kerik, 615 F. Supp. 2d at
270 (finding the government’s
attempt to categorize a
wire sent within the
limitations period as a “lull”
to be unpersuasive and
dismissing wire fraud
charge that relied upon the
“lull” to fall within the
statute of limitations as
time-barred). Mr. Milton
will establish at trial that
the purported victim, not Mr.
Milton, proposed the
Subsequent Transaction
and expressed a desire for
further transactions, which
makes the government’s
idea that Mr. Milton
used the Subsequent
Transaction to “lull” the
purported victim beyond
absurd." Full letter on
Patreon here.
On August 11,
Milton's lawyers filed: "to
invoke this Court’s power,
under Rule 26.2(c), F. R.
Crim. P., to “inspect” certain
materials in camera, and to
make rulings on the question
whether those materials
constitute, in whole or in
part, a “statement” of a
witness that the defense must
produce to the government. As
the Second Circuit has held:
“When it is doubtful whether
[certain materials] are
subject to discovery [under
Rule 26.2], the [party] should
submit them to the trial court
for an in camera
determination[.]” United
States v. Scotti, 47 F.3d
1237, 1249 (2d Cir. 1995). * *
* Mr. Milton has provided the
government with a list of
witnesses whom Mr. Milton
reasonably expects to call in
this case. That list includes
Dane Davis, formerly employed
as the Chief Technology
Officer at Nikola. On two
occasions in 2022, certain of
Mr. Milton’s counsel met with
Davis. Counsel did not take
notes during those meetings.
Mr. Milton now submits, in
camera, two attorney
memoranda, each of which (a)
was written by counsel after
the meeting, (b) runs to three
pages, and (c) reflects in
part the mental impressions of
counsel regarding those
meetings." Full letter on
Patreon here.
On August 18,
Milton had a similar request
with regard to Richard
Boardman, and also submitted
"t two related documents for
in camera review. One is
an unredacted email; the other
is an email chain, which we
have already redacted to
remove what constitutes, in
our professional judgment,
mental impressions,
personal beliefs, trial
strategy and/or legal
conclusions of the lawyers
involved in the meeting. We
now ask the Court to
inspect these two documents
and to reach the same
conclusion that we urge
above regarding the Boardman
Memorandum." Full letter on
Patreon here.
On August 23,
Judge Ramos denied both
requests: "Having reviewed the
defendant’s motions for a Fed.
R. Crim. P. 26.2(f) ruling,
Docs. 161 and 162, the
Court holds that the documents
submitted in camera need not
be produced. See Palermo v.
United States, 360 U.S. 343,
352–53 (1959) (“summaries of
an oral statement which
evidence substantial selection
of material, or which were
prepared after the interview
without the aid of
complete notes, and hence rest
on the memory of the agent,
are not to be produced.”).
The Clerk of Court is
respectfully directed to
terminate the motions, Docs.
161 and 162."
Also on August
22-23, the US filed a 24 page
opposition to Milton's motion
to dismiss count 4 or for a
bill of particulars, on
Patreon here.
Inner City Press
went to the September 8 final
pre-trial conference, taking
these notes:
Milton's
motion for a bill of particulars
denied. Motion to strike surplus-age
acknowledged as moot by Mukasey, and
withdrawn. Milton's motion for an
evidentiary hearing on the
government's filter team protocol is
denied, as based on speculation. And
finally, Milton's motion to dismiss
Count 4 is denied.
On
motions in limine: first the
US' motions, to exclude
Milton's expert Prof Kirkus
[or Kirfus?] on automotive
prototypes, battery
technology, hydrogen fuel
cell technology and
relations between automakers
and supplier, including
parts.
Judge
Ramos: These appear somewhat
relevant. Why should I
exclude them?
AUSA:
These facts are not
disputed. And there will be
witnesses from Nikola.
Mukasey:
It will not be as easy to
get the information out of
them. The case turns on the
use of words by Mr. Milton.
What does "build" mean? Prof
Kirkus will say you can
build a truck on a computer,
not hammer and nails. The US
is alleging vapor-ware.
Judge
Ramos: I don't think a truck
on a computer is a built
truck.
Mukasey:
You're reacting like a lay
person. In this field, built
can be on the computer.
There's a design element.
Judge
Ramos: What about hydrogen -
is he an expert?
Mukasey:
He knows more than a lay
person.
Judge
Ramos: Today's Daily is
about how far we are away
from rolling out these kind
of vehicles nationwide. I'll
defer on my decision on if
he is necessary. If so, we
can hold a Daubert hearing.
Next, on the proposed
financial expert, including
social media as relates to
Mr. Milton, and the effect
of social media on
investors.
AUSA
Roos: Our expert will be
speaking on social media, so
the defense expert can too.
But the defense has said
that a company's stock
performance is volatile, so
investment is risky. Our
concern is it gets close to
victim-blaming.
Judge
Ramos: But some investments
ARE more risky that others.
When we are shown a 401-K,
we are shown a buffet of
possible investments.
[As
social media is discussed,
Milton whips out his phone.]
AUSA
Roos: Plus, we don't have
discovery about these
experts.
Milton's
lawyer Bondy: When I speak
with experts, I don't take
notes. And we will not be
victim-blaming.
AUSA
Roos: With those assurance,
we're OK with this expert as
a witness.
Milton's
3d lawyer, Mr. Caruso: We
are not running an advice of
counsel defense. We are
running a good faith
defense. There's an email in
which the general counsel
tells Trevor Milton, Yes,
you walked the line,
apologies to Johnny Cash.
Judge
Ramos: I'm sure the lawyers
at these tables can walk the
line. Motion denied as moot.
AUSA: We
will have three or four
investors as witnesses.
Mukasey:
And we will be asking if
they are reasonable
investors.
AUSA:
That just means, Using
reasons. Not being, for
example, a Goldman Sachs
investor.
Judge
Ramos: I am granting the
government's motion to
exclude arguments that
investors acted negligently.
But the defense can ask
tough questions, we'll deal
with it... Now the motion to
exclude evidence about
income and purchases, this
is garden variety fraud
evidence. Why should I keep
it out?
Bondy:
It's prejudicial, and some
not tied to the acts
alleged.
AUSA: We
don't put in evidence of him
buying property before the
2020 period.
Milton's
4th lawyer, Ms. Young: We
oppose the testimony of Dina
Maslin, all she would talk
about are social media
posts, followers and the
like. People out in the
ether, chatting. It's
prejudicial.
AUSA
Roos: She's the dean of the
USC Marketing School. She
has a degree from MIT....
Let me give you a tutorial
about the Wall Street Bets
area of Reddit.
Judge
Ramos: Are you saying Nikola
became a meme stock?
AUSA:
Some investors would say so.
Mukasey:
This is junk science.
Judge
Ramos: I'm going to allow
her to testify.
The video of the
Nikola-1 truck rolling down
the hill WILL come in. As
will references to people
investing in Nikola during
COVID lockdown. Mukasey
recounts a decision by SDNY
Judge Seibel in White Plains
that COVID and PPE not be
mentioned in a bank fraud
case. But it's coming in.
Now just the logistics.
Meanwhile, Judge
Alvin K. Hellerstein has
stayed the SEC v. Milton
case...
Back on July 29
at 12:30 pm Milton was
presented before SDNY
Magistrate Judge Sarah
Netburn, and freed on consent,
on $100 million bond. Inner
City Press was in the
Magistrates Courtroom and live
tweeted it, here:
(and podcast here)
The case is
US v. Milton, 21-cr-478
(Ramos)
***
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