| Security Fraud Trial of
MiMedx Starts With Saudi Contract Timing of
Revenue and Prostate
By Matthew
Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- ESPN
SDNY COURTHOUSE,
Oct 26 –William Taylor and
Parker H. Petit were charged
with conspiracy to commit
securities fraud with respect
to MiMedx.
On October 5 U.S.
District Court for the
Southern District of New York
Judge Jed S. Rakoff held a
pre-trial proceeding. Inner
City Press covered it, below.
On October 26, the trial
began, and Inner City Press
live tweeted it, here:
Assistant US
Attorney Daniel Tracer's open
statement explains "revenue..
ladies and gentlemen, hitting
the guidance was critical to
the defendants. So they
cheated and lied to make sure
they met their guidance.
MiMedx sold skin patches to
distributors...
AUSA Tracer: They
report the revenue before they
get it. They recognized the
revenue as soon as they
shipped. It's allowed but only
if certain requirements are
met. If not met, you can't -
and it's a crime to lie to
auditors.
Now Pete Petit's
lawyer says, When you look at
the world through windows that
are dirty, everything looks
dirty. But this is far from a
typical fraud case. All you'll
see is the sale of real
products, for real money.
Defense lawyer:
Pete Petit is a self made man.
But he is not an accountant.
He came back into business in
2009 to rescue MiMedx. He
probably met the definition of
a workaholic. He pressed the
staff to meet sales goals. He
was tough and demanding.
Now it's Bill
Taylor's lawyer: The US claims
my client, not an accountant,
should go to jail for the
timing of revenue recognition.
They don't even say he got
money on the side. You're
going to be here for a long
time over complex accounting
rules. He's innocent.
NOTE: Taylor's
lawyer is describing a
contract MiMedx had with the
Saudi Arabia government. Inner
City Press' interest in this
trial is even more piqued...
Now on the
witness stand: former
Comptroller of MiMedx, who
came from Lilly. AUSA:
Why did you take the position
if the compensation was lower?
Witness: It fit
where I wanted to go in my
career. I was interviewed by
Pete Petit.
Judge Rakoff is
letting the Petit jury go for
the day at 3:40 (he has a
sentencing scheduled for 4
pm). He asks for a sidebar
with Counsel. "Juror Number 4
wants to inform us of further
information."
The issue
involves bathroom breaks;
Juror 4 says his prostate
condition requires use of
bathroom every 15 minutes
which wasn't done today.
Both sides say, Let's wait and
see.
Judge Rakoff: 30
years ago I was giving a
summation in Alexandria,
Virginia, a juror raised his
hand and asked to go to the
bathroom. Defense asks that
government witnesses not dial
in. OK
At the final
pre-trial conference Judge
Rakoff answered more than 30
questions, ranging from
whether paper exhibits will be
accepted (they are not favored
but will be accepted on
cross-examination) to if the
defense lawyers could bring
food in.
Judge
Rakoff noted that the SDNY
cafeteria is open, and he
doesn't expect lawyers to
bring food into his courtroom.
He said to expect an audio
feed - as it should be,
despite a recent audio-less
sentencing in EDNY, here - but
not a defense lawyer's "war
room" like T-Mobile had in
their antitrust bench trial
last year.
At the end of the
proceeding it emerged that
there may be a request to put
off the whole thing.
Judge
Rakoff said he wouldn't
prejudge it. But Inner City
Press wrote that would not bet
on this motion being granted.
And it was not.
On October 23
Judge Rakoff held another
final pre-trial proceeding. He
mulled sanctions against the
defense lawyers but demurred.
He asked why they wanted a
special table and was told
about a trial consultant.
Judge
Rakoff asked, A lawyer on your
team?
That wasn't
answered, except by reference
to who will be in the "hot
seat." Judge Rakoff said that
the name of any trial or jury
consultant would have to be
disclosed. This wasn't
answered either. Judge Rakoff
predicted picking a jury in an
hour and a half, and said he
or his deputy have pooled 300
juries and have learned that
overly long opening statements
are unhelpful. So the cap is
30 minutes.
The case is US v.
Petit et al., 19-cr-850
(Rakoff)
***
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