Thread by @meghanncuniff

I’m here at the federal courthouse in Santa Ana for the sixth day I’d testimony in Michael Avenatti’s wire fraud trial. The jury is due at 9. I’ll be posting updates on this thread here so stay tuned.
⚖️🧵⚖️

Remember, we ended yesterday with Judge Selna concluding Avenatti's cross exam of his paralegal has opened the door for prosecutor's to establish that some of her meetings with the government were about "other matters" aka New York cases.

AUSA Brett Sagel wants to go further and establish that the "other matters" involve other clients Avenatti defrauded (he’s talking about you, @StormyDaniels - and the Nike client). Selna won’t let him go that far, but he made clear “other matters” is fair game.

Avenatti filed this brief this morning trying to get the judge to change his mind. But a few minutes ago in court, Selna said, “I don’t see any reason to change the ground rules I laid down yesterday.” Google Drive link bit.ly/3rI9Lpd

Selna rejected Sagel’s request to expand further, saying the testimony should be about “other matters, how much time was spent on other matters.”
Avenatti: “I think your statements were crystal clear. They’re clear to me.”
Selna: “I try to make them clear."

Avenatti says “this is a highly sensitive issue” and he doesn’t believe “the government is entitled to get into any of this” because California prosecutors were in the meetings, and they had to be there for something involving the California case.

Selna says, “But sir, are you not trying to establish that Ms. Regnier spent a lot of meetings and a lot of time with the government?”
Avenatti: “Yes sir.”
Selna: “I think the government’s entitled to put that in perspective.”

So we'll see later today how Sagel fits this in, but it clearly is not good for Avenatti. A white-collar defense lawyer I've been talking to about the trial told me this morning, "This underscores how difficult it is to defend a high profile criminal case."

"Every question on cross has to be fully thought through, considering all implications of where it might lead or what doors it might open," the lawyer told me. "Plaintiffs’ PI work is easy by comparison."

And regarding opening the door, Avenatti told Selna he’s going to follow up with Regnier about the Kimberly Clark verdict discussed yesterday, to establish that Judge Gee reduced the $456 million verdict to $25 million.

But Avenatti doesn’t want prosecutors bringing up that the 9th gutted the entire verdict, because it happened after the alleged crimes. Judge Selna was not having it.

“You’re suggesting in your questioning that your firm really wasn’t in financial trouble because it obtained the Kimberly Clark judgment, among other things,” the judge said. Government and Avenatti are “entitled to establish what the reality of the situation is.”

One victory for Avenatti this morning: He’ll be able to elicit testimony from Regnier today about Andrew Stolper, who Avenatti says his friends with Sagel and has an axe to grind with Avenatti.

(Stolper represents Jason Frank, who’s owed about $15 million from Avenatti and the bankrupt law firm.)

Sagel objected and got in a few lines about Avenatti like, “I understand he’s an unlicensed lawyer who doesn’t have anything to lose” and “the only person who keeps making allegations of misconduct is the convicted felon who doesn’t have a law license.”

Quoting Bill Barr, Avenatti said he believes he was targeted for prosecution. Selna said he took issue with him using that term in his opening, and then the discussion got weird, w/ Avenatti blaming search warrants in his case on “Main Justice” aka the DOJ headquarters in D.C.

Avenatti asked, “When was the last time a helicopter,” referring to one being at Regnier’s home during the March 2019 raid, but Sagel interrupted repeatedly, “A news helicopter.” Selna concluded he still won’t allow targeting talk.

That was A LOT of really meaty pre-jury talk to get through this morning. Phew! Regnier is back on the stand now and Avenatti is questioning her. He just asked her about Andrew Stolper.

Avenatti asked Regnier if Stolper had just been pushed out of U.S. Attorney's Office for misconduct, and then Avenatti fired him in May 2016, along with Jason Frank and Scott Sims.

Avenatti asks Regnier about the circumstances of Stolper's departure from the U.S. Attorney's Office, but Selna agrees with Sagel it's irrelevant. So Avenatti is moving on. (That was pretty quick Stolper stuff and might not have landed well with jury.)

The 'misconduct' Avenatti talks about is a reference to the Broadcom case Stolper worked, which you can read about here. (OC Weekly story: bit.ly/3rLiM0v) Notable: That case was in 2009 and Stolper didn't leave USA until 2013.

Avenatti really enjoys bringing up the Broadcom saga when anyone mentions Stolper. Check out this transcript from March 2019 judgment debtor exam, with Stolper questioning Avenatti. For an interesting time, search 'Broadcom' or 'Judge Carney' Google Drive: bit.ly/3BW0TRi

One notable thing about the Broadcom saga with Stolper is that Avenatti hired Stolper in 2014. So long after Broadcom happened.

Avenatti is back to Franks Sims Stolper questions, (that's the name of their new firm: lawfss.com/founders/) He's asking Regnier if she remembers they were contacting client Geoff Johnson without Avenatti. She doesn't. Avenatti trying to refresh her recollection w/ documents.

Regnier got a little testy with Avenatti just now, which is rare. She's very calm up there. But he's asking her specifics about what other attorneys were doing with cases at the firm, and she's answering that she doesn't know exactly what they were doing.

Avenatti has repeatedly said that Frank, Sims and Stolper were trying to steal cases from the firm to start their own venture, which is why he fired them. Obviously they dispute these details, but the point is this feud has been fueling some of Avenatti's judicial odyssey.

Regnier says, "I don't doubt that they were" regarding other attorneys at the firm communicating with clients including Greg Barela, a charged victim in this case, without Avenatti's knowledge.

Avenatti bounced back to questions about the firm's finances. More talk about "tens of millions of dollars" received for a settlement in a cemetery lawsuit. He mentions another settlement and Regnier says, "Yes but that wasn't the amount received." Selna strikes as nonresponsive.

Now Avenatti is asking Regnier about the Huettner family he represented who lost a son to an overdose in the home "of a very famous comedian." He's talking about this case with @NormMMacDonald bit.ly/3yfJAZf

Avenatti represented the Huettner family, working closely with them and securing a settlement. Regnier acknowledges this, but Sagel objects under Rule 403 (cumulative, repetitive etc) and Selna sustains. Avenatti moves on to other cases.

Avenatti has a transactions list displayed. He's asking Regnier about each. These include two $10 million wire transfers sent to Michelle Phan's LLC. Avenatti asks why it was two and not one $20M transaction, and whether Phan's biz manager wanted it that way. Regnier doesn't know

My latest @lawdotcom story looks at how Avenatti's cross exam tactics have prompted fights over defense discovery obligations. bit.ly/3rEVBFj

More qs about transactions related to Phan, seemingly aimed at Avenatti establishing how little Regnier understood about complex situation unfolding. Did she know Avenatti & Phan associate Long Tram flew to Bay Area as part of settlement talk? She knew Avenatti did, but not Tram

Avenatti: "Ms. Regnier did you fabricate this document?"
Regnier: "No it's a print out"
Avenatti: "You didn't create this document, correct?"
Regnier: "No I did not"
A little bit later, "Did you fabricate any of these pages?" No.
(These docs show financial transactions with Phan)

Avenatti moves to an arbitration he initiated related to fees Phan owed for her settlement. "Can you tell the jury generally what an arbitration is?" Private judging. (I learned through my @LADailyJournal days that it basically started in OC with Jack Trotter and JAMS.)

Now we're on a 15-minute break. Notable from this morning: We’ve lost our first juror. Man was dismissed after he told court last night his roommate is sick, fears it's covid. Neither side objected. So we’re down to 15 jurors now; three as alternates.

Avenatti just addressed this with Selna. He said he wants everyone notified if the now-former juror or the roommate get a positive Covid test, which they're apparently taking this weekend. Sounds like that was already the plan with Selna.

One other thing from this morning. Judge Selna wants attorneys to stop thanking him.
“I just think it sounds strange…like I’m granting someone a favor. I’m just making a rule of laws as I see.”

Judge Selna said prosecutors and Avenatti all do it, but “It seems to me to be inappropriate to thank me for doing my duty.” (As opposed to Judge Carter down on the 9th floor, who will thank himself on behalf of attorneys. 😊) Selna said he still gets to thank attorneys though.

We're back, and Avenatti is continuing his cross of his former paralegal, Judy Regnier. He's asking her about text messages she sent to federal investigators. Can she estimate how many? Just a number," Avenatti specified. No, she can't.
"Less than 10?"
"I really don't know."

Regnier says she doesn't still have them.
Avenatti "So your understanding is your text messages to the government in the last two years have been destroyed?"
No, she doens't know that. She's never looked for them. "They've never asked me to look for those text messages, correct."

Avenatti asks Regnier to name all the government agents she texted with. She names the lead agent, Ramoun Karlous, who's sitting with prosecutors Sagel and Wyman. But she doesn't remember anyone else.

Avenatti asks Regnier about Geoff Johnson's lawsuit against her. She's accused f lying to Social Security and playing a role in Johnson losing his settlement. "To the best of your knowledge, is Mr. Johnson telling the truth as it relates to that allegation?"
"No," Regnier answers

"Do you agree with Mr. Johnson that you committed intentional fraud against him, yes or no?" Avenatti asks.
"No," Regnier answers.
"Isn't it true that Mr. Johnson claims that you intentionally deceived him by making false statements" reading a big chunk from Johnson's lawsuit.

Regnier says she's represented by counsel and "I don't know what I can say about this."
Avenatti: "Have you been charged with any crimes as it relates to your role with Mr. Johnson, yes or no?"
Regnier: "No."
Avenatti reading Johnson's damages claim of $9.5 million.

Regnier has already read the names of all defendants in the lawsuit, who are Avenatti's old law partners, including the trio of Frank Sims & Stolper. (Remember, this settled and the three were cleared of wrongdoing. Google Drive: bit.ly/2TIrzUx )

Avenatti really goes after Regnier - Any money Avenatti is ordered to pay Johnson will reduce her financial exposure to Mr. Johnson, is that true?
Judge Selna: "I believe she has a right at this point to confer with her counsel." So we're on a 10-minute break while she does that.

Thread broke, continues here:

https://twitter.com/meghanncuniff/status/1420810340481179649

With the jury out, Avenatti asks Selna again about the discovery order (he called it "discovery sanctions") that he needs to tell prosecutors before hand what documents he's using in cross (My @lawdotcom story on this today: bit.ly/3rEVBFj

Judge Selna says Avenatti recited his order perfectly. And it still applies. AUSA Sagel: "It's not a wholesale exclusion like he keeps trying to say" if he properly IDs the documents to the USA in advance of the witness.

Avenatti says he's been precluded from using documents because he didn't comply with the December disclosure deadline.
Selna says if Avenatti can establish good cause for not meeting the deadline, he might allow them.

But the judge warns: “Sir, you’ve done this before. I’m not ordering the wholesale exclusion of documents…I’m excluding those documents from which you’ve not made timely compliance” with discovery deadlines.

Regarding court watchers today, we've got a real Orange County legal celebrity in our midst. Retired U.S. District Judge Andrew Guilford, now with Judicate West alternative-dispute resolution, sat down in the audience a bit ago. judicatewest.com/adr/andrew-gui…

Judge Selna's clerk is Guilford's old clerk, so it's like a family reunion in here right now. Guilford also presided over the federal corruption trial of ex-OC Sheriff Mike Carona in 2008, which AUSA Sagel worked.

We're back, and Avenatti is again asking Regnier if she thinks any money Avenatti is ordered to pay Johnson will reduce what she could owe Johnson. She says no. Avenatti asks if she knows why Greg Barela is suing her, but Sagel objects for relevance and Selna sustains.

Avenatti asks Regnier about the work the firm was doing for Barela, including an LLC Avenatti's law firm created in Delaware for Barela. Also asks about an affidavit Barela signed in connection with his case.

Regnier doesn't recall the purpose of Barela's affidavit, so Avenatti approaches with a document to refresh her recollection. She said it doesn't refresh her memory as to why, but she agrees he signed one. Now Avenatti is having her read emails about the affidavit.

Now Avenatti is asking Regnier about another office administrator who worked at the firm. As a paralegal, Regnier went to trial and Katherine Mosby held down the office.

Avenatti previews a possible defense witness by asking Regnier if she knows Mosby will say he didn't require everything at firm to be approved by him. Sagel objects and Selna sustains. So Avenatti bounces over to expert costs and fees for Johnson's case.

Regarding the earlier tweets about Johnson's lawsuit, I misstated that Andrew Stolper was named as a defendant. He wasn't. Jason Frank and Scott Sims were. The judgment clearing them of wrongdoing came down in May: bit.ly/2TIrzUx

Judge Selna just sent the jury out for lunch. It's only an hour today because we're ending at 3:50 p.m. Judge is now addressing documents Avenatti wants to bring in on cross of Regnier but didn't disclose to USA.

Selna says defense made "no effort to comply" with the discovery order so exclusions appropriate. Now Avenatti says he'll ask for mistrial, based on Regnier's testimony this morning about her texts with government not being available.

"They are clear statements of a witness...We're entitled to them, and I want them immediately produced," Avenatti says, referencing Jencks. en.wikipedia.org/wiki/Jencks_Act "I was entitled to those documents before she took the stand."

"I would like over the break whatever text messages the government has from Ms. Regnier," Avenatti declares.
Judge Selna: "When we come back, the government shall affirm or explains its compliance with Jencks."
And now we're really on lunch.

We’re back, and prosecutors told Judge Selna they have no text messages between Regnier and the government. Avenatti takes issue with it, but Selna says it’s time to convene the jury. No more discussion.

Avenatti is back at lectern to continue cross of Regnier. Sagel alerts Selna to the fact that Avenatti is not wearing a mask or face shield, and Avenatti immediately goes to get a mask.
“People sometimes forget, as I did first thing this morning,” Selna tells jurors.

Avenatti asks about a call she had w/ Geoff Johnson's father, who wanted to know if there was a way to not give Geoff full control over the money to make sure it isn't wasted, citing Geoff's bipolar diagnosis. Regnier doesn't recall if Geoff's gambling problem was mentioned.

Avenatti asks if she haas a recollection that Mr. Johnson’s family was “incredibly appreciative” of Avenatti’s work, but Sagel objects as asked and answered and cumulative, and Selna sustains.

Avenatti tries again, asking if Regnier had a recollection about the family being glad the firm “worked tirelessly” on Johnson’s behalf, but Sagel again objects and Selna sustains.

Avenatti brings up the NFL settlement costs. Sagel objects, telling Selna: “He went over this and asked the same questions before lunch.”’
But Selna says no he didn’t and overrules.

For those wondering (and for those who aren't, too), here's a @CourthouseNews article from 2015 that explains the NFL settlement. bit.ly/375NpEj

Avenatti is asking Regnier about her PTSD, which she said stems from the federal raid at her home in March 2019. It felt random, and it was followed by: "Now you were not here for opening statements in this case, correct?" Avenatti asks.
"Correct," Regnier answers.

Avenatti has his flip chart next to him as he's questioning Regnier. (I can't see what's written on it because it's facing the witness.) I think it's the list of factors Avenatti says are part of settlement payment calculations, like costs and fees. He's going over it w/ Regnier.

Avenatti ends his questioning with a line of questioning about whether prosecutors/the government ever asked her about this calculation process. She says no. "Nothing further, your honor." Now Sagel is up for redirect.

Remember: Sagel gets to try to elicit testimony from Regnier about the fact that his meetings with the government were about "other matters." He starts off with another door Avenatti opened: the $456 million Kimberly Clark verdict.

"How much money did the firm get from the Kimberly Clark case?"
Avenatti objects as irrelevant, which is kind of hilarious considering it's part of the entire point of his defense. Selna overrules.

Zero. Sagel: If firm recovered zero and had substantial cross, how did verdict help?
"It didn't," Regnier says.
This is really not good for Avenatti.
Sagel moves onto the "18 meetings" Avenatti asked Regnier about yesterday.

Sagel points to a meeting date and says although he and lead investigator on this case were there, the discussion "wasn't about this case was it?"
Avenatti: "Objection, your honor. Court's prior ruling." (He's referring to Selna's 'other matters' language order.)

Selna overrules, and Sagel continues, asking Regnier if, of the 18 meetings Avenatti asked her about yesterday,
"were approximately five of them on another matter?"
"Yes, they were," Regnier answers.

Sagel: Neither Sagel, AUSA Andre or the lead investigator the California cases "were asking you questions in those interviews, correct?" Correct. "Other matters" gets repeated a lot. (But no actual details about Nike or @StormyDaniels cases.)

Sagel asked a question that was something like, does Regnier think client trust fund accounts are places where clients can trust their funds will be safe. 🧐 Now he's going over listed fees/costs for Johnson's case at the time the $4 million settlement came in.

According to the @Quickbooks entry for Johnson's case, fees were about $400k and change, Regnier confirms to Sagel. Now Sagel is going over care center expenses that Avenatti brought up, and showing that the expenses weren't actually all paid.

Sagel goes over entries that say the $4 million settlement is to be paid in quarter 1 of 2015. He also asks Regnier about the other cases Avenatti asked her about, and asks if Johnson was involved in any of them. No, he wasn't.

Sagel is asking about the transactions related to the purchase of the jet, which was done with Alexis Gardner's settlement money. He's trying to establish that Avenatti took steps to shield the true source of the money even from Regnier.

We just had a little dustup over Sagel displaying transactions that apparently have info about purchases that Avenatti thinks violate the pretrial ruling excluding lifestyle evidence. Avenatti sprang up, telling Judge Selna it's inappropriate and should be taken down.

Judge Selna was not having Avenatti's attitude.
"Sir, you will not tell people what's appropriate. I will tell people what's appropriate," the judge told Avenatti.

Selna spent a few minutes reviewing, then concluded defense never asked for document Sagel is displaying to be redacted. So we're moving on.

Sagel is following Avenatti's cross about payments to Huettner family in case involving @normmacdonald, and he points out the payments came from another client trust account. He's also pointing out that earlier numbers Avenatti asked about don't actually match the fee agreements.

Sagel, trying to refute Avenatti's "but the costs and fees!" defense, asks Regnier "Why were lawyers not charging for their hours in contingency cases?"
Because it's a contingency case.

"So all the back and forth, and all the time it took
to resolve Greg Barela's case in mediation, that wouldn't change the cost and fees at all would it?" Sagel asks.
No, it wouldn't, Regnier answers.

Sagel says, based on monies going out of Barela's trust account, "Does it appear that Gregory Barela's settlement money is behind held in trust?" Avenatti objects for speculation, but Selna overrules.
"No," Regnier answers.

Oops. Sagel said this morning the helicopter at Regnier’s house during the 2019 raid was a news helicopter, but Regnier just said it was an @OCSheriff chopper.

Sagel asks, “It wasn’t the Internal Revenue Service was it?”
Regnier said she doesn’t think they have helicopters.
“They barely have cars,” Sagel said.
Avenatti objects and Selna orders the comment stricken.

Re: my tweet yesterday about the dogs' names, I realized dogs never came up in direct, so Brett never had a chance to ask names. However, he just asked Regnier about the dogs in re-direct, and he did NOT get the names. So the tweet from yesterday stands.

https://twitter.com/meghanncuniff/status/1420449837951053826

Sounds like Sagel is wrapping it up. He's asking Regnier about Avenatti's two-day cross and "how many questions did he ask you about paying Mr. Johnson his portion of the settlement fees?"
Avenatti objects, but Selna overrules.
"None," Regnier answers.

Sagel asked similar questions like "how many documents did he show in which he paid Mr. Johnson his portion of the settlement fees?" and repeated them for the other clients and settlements. Regnier's answer was of course always no. Sagel's done, and now we're on a 15-minute break

Avenatti is up for re-cross with Regnier, and he starts by trying to draw from Sagel's final line of questioning from re-direct.
"How many questions did Mr. Sagel ask you about the data for QuickBooks?" None.

"Mr. Sagel still hasn't asked you to look at any of the electronic data from QuickBooks or Tabs?" Avenatti asked.
"No, he has not," Regnier answers.

Avenatti: "Have you ever heard the phrase, 'many a slip between the cup and the lip?'"
Regnier: "No."
Avenatti: "You know from your experience that until the money comes in, no settlement is complete, do you not?"
Regnier: "Yes."

Avenatti asked about Regnier's lack of expertise on client trusts. Then he asked about Ellen Pansky, an ethics attorney who Avenatti says worked with the firm. (She also represented Avenatti in his California State Bar hearings, but Avenatti doesn't mention that to the jury)

Sagel objects for relevance and Selna sustains, so no more questions about Pansky. Avenatti moves into the Kimberly Clark settlement and asks Regnier if the verdict had been gutted to zero before his arrest? She says no, it had't been.

Avenatti asks if she has "any idea" how the 9th overturning the verdict well after his arrest could be relevant to firm's finances related to his indictment.
"It was up on appeal, so we received more money."

Avenatti: "We could borrow money on results from cases, couldn't we?"
Regnier: "Yes."
Avenatti is now onto Regnier's meetings with prosecutors, emphasizing that he didn't have a chance for "dress rehearsals" with Regnier.

Regarding this tweet from a minute ago,

https://twitter.com/meghanncuniff/status/1420866662648061955?s=20

The bottom quote from Regnier should say, "It was up on appeal, so we received no money." No money, not more money.

Avenatti's back on the @OCSheriff copter above Regnier's house during the March 2019 raid. "Do you think it was just a coincidence that a sheriff's helicopter happened to be there as Mr. Sagel and his federal agents" went into your home?
Selna sustains Sagel's relevance objection

Avenatti tries again: "Ms. Regnier, do you know how the sheriff's helicopter Mr. Sagel asked you about got there?"
Sagel has the same objection, and Selna again sustains.

Avenatti ends by asking Regnier a series of questions about the feds not asking her about her QuickBooks data, and other information from the firm. Now he's done, and Sagel calls his next witness. It's Jeremy Weiner, a lawyer at @KattenLaw in Los Angeles. bit.ly/3rGf34p

Excuse me - Weiner just said he's actually based in Century City, not LA. (They all want to work in Century City so they can live on west side and avoid downtown traffic.) Weiner's client was NBA player Hassan Whiteside, Alexis Garder's ex and the source of her settlement.

Sagel asked Weiner who Avenatti is and he said the opposing counsel in the Whiteside case. Avenatti stood up as this was happening, and Sagel turned to him asked him to please sit down. Avenatti did so, saying he thought he was about to be ID'd.

Weiner is going over the case and the mediation efforts. I think I've shared this before, but witnesses aren't wearing masks during testimony. They're behind plexiglass and are wearing clear face shields so everyone can see their expressions.

The mediation went until 10, 11 or midnight. "Late," Weiner explains. This was with retired judge Louis Meisinger from @SigResolution, who we heard about yesterday. They settled, and Weiner is reading the agreement aloud now.

$3 million settlement. Payments scheduled to be made to client trust. Weiner gave his client copy of agreement.
"Would that have been your custom and practice to do so?" Sagel asks, an obvious reference to Avenatti not giving clients settlement agreements.
"Yes," Weiner answers.

We just heard a voicemail Avenatti left for Weiner. It was 1 p.m. "We haven't seen a wire in our account. I sent you an email this morning. I didn't get a response back," Avenatti says in the message.

Avenatti's voicemail for Weiner continues: "I want to make sure that there's no issues related to the settlement and if it's going to be funded, because if there are I need to know about it immediately."

Sagel asks Weiner if anything was going on tripping up the settlement payments. No. "He was just anxious to get the payment," Weiner said. Another voicemail from Avenatti is played for the jury.

In this one, Avenatti tells Weiner "we are growing increasingly anxious that thing thing's going to fall apart." Says something about needing to start doing it "yesterday." Sagel asks Weiner if anything was actually tripping up the settlement then. No, there wasn't, Weiner says.

And we're done for the day. (We're ending 40 minutes early today for a reason not publicly disclosed; Judge Selna probably has an appointment.) Back tomorrow at 8:30, with the jury due at 9. Sagel's direct of Weiner will continue then.

No time for outside-the-jury arguments this afternoon; Selna says he'll take anything like that up tomorrow morning. So that's it! Jury has filed out and attorneys are packing up.

Thanks for following along today. Check back tomorrow about 8:30 for another thread, and stay tuned for more @lawdotcom coverage. Also, read my latest from today: bit.ly/3rEVBFj

Dang - I just noticed the typo in this first tweet. “I’m here at the federal courthouse in Santa Ana for the sixth day of testimony in Michael Avenatti’s wire fraud trial.”
There. Fixed it.

New filing from prosecutors tonight: "The Court should reject any further attempts by defendant to
wait to request redactions until the government has offered the exhibit for admission with a witness on the stand before the jury." Google Drive: bit.ly/375cqjc

@threadreaderapp Please unroll. Thank you!