Nikola founder, Trevor Milton, recently resigned from his position as Executive Chairman of the Board after facing accusations of fraud. Before delving into the fraud allegations, it is important to understand the genesis of the company, which adds to the gravity of the situation. You may recall, last week we delved into the upcoming fraud trial for former Theranos CEO Elizabeth Holmes. We wanted to continue covering this topic of high profile fraud.
Milton built Nikola in 2014 hoping to reform the transportation sector. His plan in accomplishing this goal was to create mainstream battery-electric and hydrogen-powered vehicles from state-of-the-art zero-emissions technology. Establishing a company based on the same inventor and mission as another company, Tesla to be specific, is not the only suspicious act Milton has committed.
According to Business Insider, on September 10th, 2020, a report published by the Hindenburg Research investment firm contains evidence of Milton providing false statements about his products. More specifically, the report accuses Milton of exaggerating the viability of his products and thus misinforming investors, partners, and consumers. An example of these fraudulent statements is based on a video demo advertising Nikola’s debut semi-truck, the allegedly hydrogen-powered “Nikola One.” The report revealed an exchange of text messages from a Nikola employee developing a plan to roll the vehicle down a hill to manipulate the “high-speed” aspect of the truck. Nikola diverted from the issue by stating the prototype was discarded and therefore irrelevant. To add, they thought the Hindenburg report was released as sabotage considering Nikola’s partnership with General Motors was finalized two days prior. It should be noted, Hindenburg is a short-seller, so they were interested in seeing Nikola’s stock price decline. (Photo Source: Twitter @HindenburgRes).
The company started trading on June 4th, after a reverse merger with VectoIQ. VectoIQ is a publicly-traded special purpose acquisition organization led by Stephen Girsky, the former Vice Chairman of General Motors. Before the Hindenburg report, Nikola was performing well in the stock market. A CNBCarticle stated that shares of Nikola Corporation increased by 20% at the end of the month. According to the closing price, Nikola was valued at almost $28.8 billion, making the corporation more valuable than Ford. However, Nikola’s stock market surge stemmed from Milton’s announcement of the company’s new battery-electric fuel-cell truck, the Badger. He followed his announcement confirming the company’s partnership with General Motors, a necessary move to get the new truck to market. Nikola did not anticipate to generate income until 2021, but investors were willing to provide a hefty sum for promising vehicles.
Despite the incident that led to his resignation, analysts think Milton’s exodus is a positive and necessary step for the progression of both Nikola and General Motors. Whether the motive for resigning was personal or strictly business, with Milton absent there will be less negative publicity.
What does this mean for Trevor Milton? Along with his resignation, he agreed to relinquish $166 million of equity and a two-year $20 million consulting contract. However, Milton gets to possess $3.1 billion in stock due to a recently finalized separation agreement. He agreed to assist the corporation as an unpaid consultant, but his role in company operations and decision-making are paused for at least three years. In the aftermath of Milton’s resignation, Nikola’s shares decreased significantly in premarket trading, opening Monday, September 21st, at $24.97, the lowest opening price since the company went public in June. It ended the day, closing down 19% at $27.58. As he continues to defend himself against the Hindenburg Research report, Milton’s legal expenses are paid for by Nikola as long as they receive copies of evidence.
With Milton out of the picture, Stephen Girsky has been appointed chairman of the board. General Motors’ main priority is to plan production of the battery-powered Badger truck starting late 2021 or early 2022, ultimately continuing the partnership with Nikola. Although General Motors bears the responsibility for its creation, Nikola will remain in charge of marketing and selling the product upon its release. Because Nikola lacks the cushion of intellectual property and revenue, they heavily rely on the investor’s contribution through the stock market. Nikola’s tarnished reputation requires damage control in order to maintain enough revenue until the Badger is released.
Before Nikola and the Trevor Milton scandal, there was a prominent blood-testing startup called Theranos. Its founder, Elizabeth Holmes, currently faces a criminal fraud trial.
If you’ve been tuning into business news recently, the latest scandal with Nikola, a electric-powered truck manufacturer, and its founder, Trevor Milton, is no surprise to you.
For those who have not been following along, a quick summary is as follows: Nikola (NKLA) recently became a publicly traded company alleging they had hydrogen fuel cell (battery) technology that would revolutionize the trucking business. The stock did well after IPO. Nikola then did a multi-billion dollar deal with General Motors. The stock went higher. A few days after the GM deal, a short-seller released a report that accused them of a being an intricately constructed fraud. The founder, Trevor Milton, contested the accusations on social media and asked for time so he could rebut all of the allegations. Within a couple of days he went silent, was removed as executive chairman, and deactivated his social media accounts. It has been widely reported that both the SEC and DOJ are conducting investigations related to his actions and claims as founder and executive chairman.
I share that story because some news agencies have suggested Trevor Milton’s story is similar to that of Theranos founder and CEO, Elizabeth Holmes. Ms. Holmes is now facing a criminal fraud trial and she is the focus of our our post today. Stay tuned next week for some further discussion on the issues surrounding Nikola.
Elizabeth Holmes founded a privately held biotechnology company called Theranos. The company intended to revolutionize blood tests, with just a drop of blood. No more needles and vials, just a small drop of blood, and the tests results would be available rapidly. Ultimately, they failed to deliver tangible results and led consumers to believe false promises. After receiving more than $700 million in private investment, the company began falling apart.
In Spring 2018, Holmes was charged with fraud by the SEC, as reported by Bloomberg. This being a civil action, Holmes settled it without admitting any of the allegations. The settlement required her to relinquish her shares to the company and abstain from being an officer or director of a public company for a period of 10 years. There was also a fine, according to Barron’s. To the best of my recollection, Ms. Holme’s settled with the SEC on the same day she was charged.
In the Summer of 2018, the US Attorney’s office filed charges against Holmes’ for conspiracy and wire fraud, as reported by CNN. This criminal indictment is the inspiration for this blog post.
For more than 2 years, we’ve followed the developments in the criminal prosecution of Elizabeth Holmes, wondering if it would lead us to an interesting analysis from an expert witness perspective. In September of 2020, I found this article from the New York Daily News. It seems Ms. Holmes is preparing for the use of a “mental disease or defect” defense.
More specifically, the article from the New York Daily News, indicated the judge had assigned a neuropsychologist and psychiatrist to conduct a two-day, 14 hour evaluation of Ms. Holmes. Additionally, this evaluation is to be recorded. Now, I had never heard of psychological evaluation being this long and I worked in the mental health field for years before joining Experts.com.
To the best of my knowledge, I had not heard about the “mental disease or defect” defense since law school. I remembered it as a mitigating factor to a crime. Something we learned about when we learned about defenses and factors related to defenses.
So, I did what I usually do with these blog posts, and reached out to the experts. This time, I thought it would be good to get insights from a federal public defender and a psychiatrist.
First, let’s see get a view of the legal opinion…
Analysis from Federal Defense Attorney, Diego Alcalá-Laboy:
Diego Alcalá-Laboy is a criminal defense attorney with his own practice Defensoria Legal, LLC, in Puerto Rico, where he represents federal criminal defendants and advises startups. He is also an adjunct professor at the Inter-American University, School of Law and teaches the Federal Evidence and Federal Criminal Procedure courses at the University of Puerto Rico Law School’s Federal Bar Review.
Nick Rishwain: Why would one use a defense of “mental disease” and what impact might it have on the case?
Diego Alcala: A prosecutor must prove that a defendant intended to commit an act (mens rea), and that he committed the act (actus rea). And most crimes require that the defendant acted intelligently, knowingly, or willfully, and on some occasions recklessly or negligently. The type of “mens rea” a crime requires is defined by Congress and the interpretations given by the courts. On some occasions, an offense may not even require a mens rea, such as with strict liability offenses.
Crimes may have different elements, and a prosecutor may have to prove that the defendant had the required mens rea to commit each element of the offense. If the prosecutor cannot prove this, the defendant may be found not guilty.
Congress also recognized that a defendant may show that because of a medical defect he was unable to appreciate the nature and quality of his or her acts because of a severe mental disease or defect. After the John Hinkley trial, Congress amended its statutes and eliminated the affirmative defense of diminished capacity but allowed a defendant the possibility to attack an element of an offense because of a mental condition.
This is a lot harder than it sounds. The Courts are the gatekeepers of the any scientific testimony intended to be presented at trial. Therefore, whenever a defense of mental defect is offered by a defendant, the Court must ensure that the evidence offered is grounded in sufficient scientific support. This scientific evidence then must be scientifically sound and must also show that the medical condition negates mens rea of an element of the offense. So, a defense of mental defect, if grounded on scientific basis, and shows that it negates an element of the charged crime, will clear the defendant from a particular case.
NR: Have you ever seen a “mental disease” defense used in a criminal fraud matter?
DA: I have never seen a mental disease defense presented before. But I did find some cases where the defense tried to introduce this type of evidence but was ruled inadmissible because it did not satisfy the Court that the proffered evidence: a) was based on sound scientific principles, or b) even if it was based on sound principles, it failed to negate mens rea for the element(s) of the offense. In fraud cases, a defendant is accused of committing some type of false representation. It follows that the evidence of mental disease must show that if his/her medical condition can be logically connected to a subjective belief that his/her assertions were not false, baseless, or reckless vis-a-vis the truth. I have not found a fraud case in which the defense has been able to overcome this burden.
NR: If it is established that Elizabeth Holmes is suffering from “mental disease,” can she still be held criminally liable for her actions?
DA: If a defendant presents a successful mental disease defense, the federal law states that she will be found not guilty. But a finding of not guilty does not necessarily mean that she is free to leave. A determination of not guilty by reason of mental defect will then place a defendant in a “suitable facility” and may be release only after showing that she is no longer a threat.
NR: Does a “mental disease” defense have much success in federal criminal trials?
DA: As mentioned, I have not found a successful case, and primarily the difficulty lies in the very narrow type of cases that may meet the discussed admissibility standard. Even if she can get this evidence into trial, it is still up to the jury to accept this defense.
Now that we have some idea of the application of the law for fraud in federal criminal cases, we need to review the science as outlined by Mr. Alcalá.
Analysis from Forensic Psychiatrist and Expert Witness Dr. Sanjay Adhia:
Dr. Sanjay Adhia is triple-Board-Certified in Forensic Psychiatry, Brain Injury Medicine, and Psychiatry. Dr. Adhia serves as a Psychiatrist and Brain Injury Medicine specialist at TIRR Hermann Memorial, a Rehabilitation and Research hospital treating those with brain and spinal cord injuries and psychiatric elements of their injury and recovery. In private forensic practice he conducts Independent Medical Examinations (IMEs), and renders his opinions by report and testimony. Dr. Adhia serves on the faculty of McGovern Medical School at UTHealth. You can visit his website at: forensicpsychiatrynow.com.
Nick Rishwain: According to the psychiatric community, what constitutes “mental disease” and “mental defect?”
Sanjay Adhia, MD: These are more legal terms rather than actual formal psychiatric definitions.
According to Merriam-Webster, the legal definition of “mental disease” is “an abnormal mental condition that interferes with mental or emotional processes and internal behavioral control and that is not manifest only in repeated criminal or antisocial conduct”.
Examples would include Schizophrenia, Schizoaffective Disorder and Bipolar Disorder which are considered Severe Mental Illness (SMI). These conditions may lead to psychiatric hospitalization. The conditions maybe associated with and loss of touch with reality and a lack of volitional control.
“Mental defect,” on the other hand, is defined by Merriam-Webster as a “an abnormal mental condition (as mental retardation) that may be of a more fixed nature than a mental disease”. “Fixed” disorders would include Intellectual Developmental Disorder (IDD; formerly known as mental retardation), Autism and Brain Injury. According to this definition, Antisocial Personality Disorder (ASPD) would be excluded. ASPD is marked by a tendency to lie, break laws, and act impulsively. It shares some features with psychopathy or sociopathy. A number of states do not permit the use of ASPD in the insanity defense. Allowing ASPD would have unintended repercussions. For example, it could potentially permit a defendant like Ted Bundy or Jeffrey Dahmer to avoid prison.
NR: In the court order, it limits the evaluation of Ms. Holmes to a 14 hour, 2-day, psychiatric examination. Is this out of the ordinary in a criminal matter?
SA: There is a wide range of exam times in criminal cases. It would depend on a variety of factors including the type of case, the jurisdiction, the funding available and the severity of the charge. Assessment time in a misdemeanor will not be identical to a capital case. Ms. Holmes’ case is not a capital case, but it helps to understand differences in how long the examination might take. The exam time in a Competency to Stand Trial for a misdemeanor trespassing case would likely be under two hours. I have seen some examiners spend 30 minutes for the interview in such cases. The other extreme would be Capital cases which could go over 8 hours or several days; this is especially true if neurocognitive testing is required, which can take an entire day.
Again, in a capital case the threshold and the stakes are very high—especially in death penalty cases that often go to the appeals court.
In misdemeanor cases, you may have a single mental health expert and the findings may be accepted without the need for an opposing expert. In Capital cases, the defense itself may retain several mental health and other medical experts (i.e. Fetal Alcohol Syndrome experts). In the Holmes case, the 14 hours is to be shared between a forensic neuropsychologist and a forensic psychiatrist.
As it is a high-profile case, it is possible that the court may allow additional funds or there maybe a willingness of the expert to work within a budget.
It is my experience that the examination in insanity cases take more time than other types of cases as you have to elicit a detailed account of the crime from the defendant and then determine the mental state at a time in the past and consider malingering (lying for secondary gain—like a lesser sentence). I suspect in the Holmes case, it is likely the charges are not limited to one circumscribed incident so it could take additional time. It is worth noting that time spent reviewing records and preparing a report could exceed twenty hours or more.
NR: What information might you need to establish or rebut an insanity defense?
SA: In addition to interviewing the defendant, it would be helpful to review medical records, legal records along with police records and videos. I often will interview collateral informants as well. In Ms. Holmes’s case there maybe, media accounts, if admissible, as well as financial records and corporate documents. Of course, an expert would review the other expert witness reports. Records in a violent crime could include an autopsy, or blood splatter expert reports, for example. In the Holmes case, there may be a forensic accounting or fraud expert report. Other sources of data could include polygraph testing, school records and employment records.
NR: In the Holmes case, the defense has retained a trauma expert. Is it common to successfully assert an insanity defense in cases of PTSD?
SA: Insanity defenses are more commonly associated with other diagnoses that are considered to be more severe forms of mental illness such as schizophrenia, bipolar disorder and IDD because they have a different impact on decision-making and regulating behavior. Although many individuals with PTSD do suffer with severe symptoms, they are generally able to maintain awareness of the nature of their acts and appreciate the wrongfulness of such acts. In jurisdictions that allow for the volitional prong, individuals with PTSD are generally considered to be able to behave lawfully. Of course, there are cases where PTSD is successfully asserted as an insanity defense. In cases where the defense attorney realizes the PTSD does not lend itself for an insanity defense, they may successfully utilize it for sentence mitigation.
United States v. Bennett,29 F. Supp. 2d 236 (E.D.Pa. 1997), aff’d 161 F.3d 171, 183 (3d Cir.1998), cert. denied, 528 U.S. 819, 120 S. Ct. 61, 145 L. Ed. 2d 53 (1999)
Remote depositions appear to be growing. As an expert witness, what should you do to improve your presentation and performance to maintain credibility and authority?
As more professionals work from home, remote depositions will continue to rise in popularity and usage. But, the extent of the rise is hard to tell since there is a lack of any hard data on the subject. One of our contributors, Isaiah Leslie, has provided some anecdotal information on the subject. We know court hearings and administrative meetings are taking place remotely. In an article from the Fort Worth Star Telegram, we learn about what may be the first remote jury trial in the U.S., which occurred in Texas. With an increase in remote hearings, depositions, and even jury trials, we wanted to give you some information about presentation and performance as an expert witness in remote deposition.
There have been an abundance of articles discussing remote depositions, but none of them appear to cover best practices for the deponent and, relevant to Experts.com members, the expert witness. Instead, the articles discuss the law permitting remote depositions; the local rules to be followed; agreements between lawyers about sharing of discoverable information; procedures for exhibits; whether the deposition is going to be taken by video conference or the deposition is being video recorded; and operation of several of the remote video platforms. The information is important for all parties to a litigation, but none of it helpful to the deponent.
To this end, I had to do some digging and contact a bunch of folks for their insights. We received some great feedback from court reporters, court videographers, and live video marketing professionals. Below is a summary of suggested best practices for expert witnesses before and during a remote deposition, focusing on presentation, apparel, lighting, audio, video, and overall performance.
Increase in Remote Depositions:
One of our contributors, Isaiah Leslie, a co-founder and partner at Regal Court Reporting, provided us with the best data on the increase in remote depositions from his company’s personal experience. In March of 2020, only 2.6% of their depositions were remote. By April, all of their depositions were remote, increasing by 550%. Although remote depositions have not outnumbered their previous in-person deposition numbers, as Isaiah noted, the adoption is still significant.
The increase in remote depositions makes sense, given the shelter-in-place orders throughout the country. Many of those who adopted remote deposition by necessity have discovered its advantages. By no means am I suggesting remote depositions would replace in-person depositions entirely. However, as legal professionals become more comfortable with videoconferencing technology, it’s reasonable to anticipate continued growth in remote depositions even after COVID-19.
Legal system participants are likely to realize, if they have not already, the value of videoconferencing. It is convenient for all involved, as there is no need to travel to the deposition location. Reduced travel should lower litigation costs as parties will no longer have to pay for travel time and costs (for lawyers and expert witnesses). Most importantly at the present time, it provides the added benefit of being socially distanced.
With this expectation remote depositions will become more prevalent, even post-COVID-19, here are the suggestions from our contributors, to help you as a deponent, give your best presentation and performance.
Court Reporter Suggestions:
Isaiah Leslie and I have become friendly on Twitter, which for those who know me, is where I’ve made a significant number of professional relationships. Isaiah brought his partner and wife, Stephanie Leslie, into the conversation so we can get some outstanding suggestions direct from a court reporter who regularly participates in depositions.
As with other past blogs, I provided a variety of questions and Mrs. Leslie provided some outstanding responses (some edited for brevity and clarity).
Nick Rishwain: Have you experienced an increase in remote/virtual depositions during COVID-19?
Stephanie Leslie: We have certainly seen more remote depositions than usual, but unfortunately most law firms are still not jumping on board fully quite yet for a variety of reasons. One being their lack of comfort with the technology aspect of things. Once they try it, they typically schedule more after that. It’s just making the plunge.
NR: Based on your experience doing in-person video depositions and remote depositions, have you identified any best practices for deponent performance?
SL: The most crucial thing with remote depositions is abiding by the admonition to not talk over others. As a working reporter myself, I can attest to the fact that speakers talking over each other is always a nuisance and makes my job exponentially harder, but in remote depositions it is absolutely critical because remote platforms, such as Zoom, act similarly to a speakerphone, and it can only choose one voice to allow through the system, so if there is simultaneous speaking, I can usually hear no one. And then, to add insult to injury, if other speakers are talking, I cannot successfully interrupt and remind everyone to speak one at a time because no one can hear me either. I have found that even though it feels very tedious to go slowly and methodically, it actually makes the deposition go more quickly and smoothly.
NR: My customers are concerned with coming across as credible, knowledgeable, professional and authoritative in their field. What do you recommend for best remote deposition performance?
SL: I have taken several expert depositions recently, all remotely, and I don’t think the virtual aspect of the deposition makes much of a difference. I felt like it was any other expert deposition. It was very clear to me which experts were knowledgeable and confident about the subjects upon which they were opining, and others were obviously not as much. I think a great CV and clear opinions backed by evidence still come through clearly to all observers.
NR: Any suggestions on apparel, lighting, audio/video setup?
SL: I have seen some sharp solid-colored virtual backgrounds created with an expert firm’s logo placed in the top corner just to the side of the witness, and it is very professional looking and memorable while not detracting from the substance of the proceeding. Apparel — I suggest still making sure you’re completely professional on top. What’s on bottom is up to you! I use an inexpensive cube light to help illuminate my face, but if the room is well lit (not too much back light), I don’t think it’s particularly necessary. Audio is the most important thing. Please test your connection and audio quality beforehand!
NR: Any further suggestions I may not have asked?
SL: As usual (but even more important with remote), if you are able to provide any spellings or technical words to the stenographer before the deposition, that is always appreciated. We usually come into the case with little to no context on the facts and your background and role, so anything you can assist with along the way is invaluable!
Legal Videographer Suggestions:
Isaiah, continued to provide me with excellent access to his team and we got some outstanding feedback from Sean Malone, of Malone Video, who works primarily with Regal Court Reporting.
The same questions provided to Stephanie Leslie were also sent to Mr. Malone. His different experiences from a videographer perspective are equally beneficial to the expert witness.
Sean answered the questions in a slightly different format, which have been edited for brevity and clarity.
Nick Rishwain: Have you experienced an increase in remote/virtual depositions during COVID-19?
Sean Malone: Definitely. Though overall some attorneys are still hesitant to go remote, others have been willing to test, and even embrace remote depositions right now, due to the quarantine. As a legal videographer, before the quarantine I had done exactly zero remote depositions. Since the quarantine, I have done at least 2 to 3 per week, on various platforms, and all for clients that were mainly accustomed to in-person depositions before COVID-19.
For the following, questions 2-4, Sean answered the questions in aggregate. So, you don’t have to scroll up to find those questions again, I’ve added them below:
NR: Based on your experience doing in-person video depositions and remote depositions, have you identified any best practices for deponent performance?
NR: My customers are concerned with coming across as credible, knowledgeable and an authority in their field. What do you recommend for best remote deposition performance?
NR: Any suggestions on apparel, lighting, audio/video setup?
SM: As a legal videographer, the things that matter in an in-person deposition are the same things that matter for a remote deposition. For example, is the deponent well lit? Are they centered in frame? Can they be clearly seen and heard? I’d recommend a similar approach for everyone involved in a remote deposition: identify your best in-person deposition practices and translate those to the medium of video conference.
Just like in real life, the witnesses I’ve observed that come off well are the witnesses who:
Are professionally dressed.
Are well mannered/aware that they are the focus of the deposition and the video record.
Listen to and directly answer attorney questions.
One note on that last one: Just like in real life, we all know that deponents should let the taking attorney finish their question before starting to answer, and also pause a little so that the opposing attorney can get in their objections… But this is especially important during a remote deposition, because of that notorious split-second delay present in all video conferencing platforms.
To present yourself well and make the videographer love you, you can:
Make sure you are well lit, and not heavily backlit.
Make sure whatever is in the background behind you is relatively neutral and not distracting (in other words, maybe take that Backstreet Boys poster down before logging on).
Make sure the area around you is tidy and free from clutter.
Make sure the camera built into your computer is as close to your eye-level as possible. If the camera is too low, like on your lap for instance, everyone will view you (and the video record will capture you) from an unflattering, upward angle. Eye-level or at least face-level is the best idea for a flattering shot of you.
Ideal framing is you in the center of the frame, with your torso and head visible in frame, with a little bit of headroom on top (headroom is the small space between the top of your head and the top of the frame). See picture:
Make sure you are joining the video conference from a reliable device that has a decent camera and microphone built in.
Make sure that device is charged!
Some additional tips on your Internet connection. So that your testimony can be captured optimally by both the court reporter, and the videographer, make sure your Internet connection is as strong as possible. Office internet is more robust than home internet, but if you are at home, you can try:
Connecting your device via Ethernet cable rather than WiFi.
If you cannot connect via Ethernet cable, choose the spot in your home with the strongest WiFi signal.
Ask other members of your household to refrain from moderate or heavy Internet use that day (e.g. have them avoid streaming TV, playing online games, etc.)
NR: Any further suggestions I may not have asked?
SM: I always like to say that everyone in a deposition has a job to do. Therefore, I try to help others do their jobs well, by doing my job well. I think that approach can be helpful no matter what your job is!
As we feel this is going to be a growing experience for witnesses and expert witnesses, we wanted to create a blog post that is truly helpful to your presentation and performance. So, we brought in one more voice to help you nail that remote deposition!
Live Video Marketing Professional Suggestions:
As some of my readers know, I’ve been doing live video since about 2015. However, I do it as a hobby. Our next contributor does it professionally and has written a book on the subject. I’m just lucky enough to know her and call her a friend. Jennifer Quinn, is a leading consultant on Internet live-streaming. I reached out to her and asked her for her input regarding presentation and performance.
Here are the suggestions provided direct from Jenny. In this instance, I asked questions more generally and Jenny gave me us some outstanding suggestions, all of which should be considered for remote depositions.
NR: I’m looking for suggested best practices. How would you want an expert witness to be prepared for remote deposition? What best practices do you suggest?
Jennifer Quinn: The fastest way to build trust with someone is to show up the way they expect you to show up. Traditionally, as an expert witness, you would arrive, dressed professionally, sit upright, and be fully prepared for the deposition.
The question most expert witnesses have today is how to transfer that same level of authority, and trust one would have face to face or in-person to a video format.
There are a few quick and easy ways to convey instant authority and credibility when preparing for a video deposition.
Pay attention to your background – be sure it conveys professionalism.
Dress the same way you would dress if you were attending court in person.
Make virtual eye contact with the video viewers by looking directly into the lens of the camera. Yes, this will feel awkward; however, it is possibly the most crucial skill you can master if you want to instantly build trust in this new era of video. Looking directly into the lens of the camera simulates eye contact and conveys authenticity more powerfully than anything else you can do when recording video.
In my book, I reference the need to pay attention to L.A.V.S.: Lighting, Audio, Video, Stability.
Daylight – sit in front of the window with the light shining in on your face.
Ring light – clips on to your phone.
Box lighting – home office studio setup.
Turn off the overhead lighting in the room.
Earbuds with built-in mic.
Cell phone camera.
Keep the lens camera at eye level.
Look into the lens.
Prop phone up – at eye level (think books, boxes, etc.).
Tripod or mount.
Desktop/laptop – don’t bump desk or table.
There you have it. Four different individuals telling you how to up your remote deposition game as remote depositions have drastically increased in the last 90 days.
Throughout shelter-in-place, many lawyers and parties have experienced the benefits of remote depositions. It has proven both convenient and cost effective. We do not expect the trend in growth to wane any time soon. If anything, we could be witnessing a completely new shift in how the legal system communicates.
The last two years have been a whirlwind for those of us following the litigation response to the opioid crisis. Thousands of lawsuits have been filed throughout the country. Most notably, the National Prescription Opiate Litigation (a multi-district litigation).
So what is happening on next week? Well, one of the first major opioid trials took place in Oklahoma earlier this summer. When I say “opioid trial,” I mean the legal trial, not “clinical trial.” Forgive me, I had to make the joke. The trial took place and the judge is expected to deliver his ruling on Monday. Berkeley Lovelace, Jr., of CNBC, provides an in-depth analysis of the trial here.
The case was brought by the State of Oklahoma against Johnson & Johnson, et al. The Oklahoma attorney general is seeking damages in excess of $17 billion dollars. The state sued Johnson & Johnson claiming their sales and marketing practices fueled the opioid epidemic and created a public nuisance, resulting in approximately 6,000 overdose deaths. Any damages awarded, assuming there is not a settlement before the ruling, would be used for addiction treatment and preventative measures for the next few decades.
We, at Experts.com, have been following pharmaceutical litigation for a long time. In the last two years, we’ve been laser-focused on opioid litigation. We started to pay strict attention to the matter when we realized it was similar in magnitude as the civil lawsuits involving tobacco, in the 1990s. It meant we were going to see significant litigation for years to come.
With a database of expert witnesses, we set out to write multiple articles on the matter, in the form of question-and-answer-style blog posts. In addition, I’ve written a couple of guest blogs on the topic for other legal companies. This blog post is to recap these resources we’ve published over the last two years.
Unfortunately for our country, we expect to be writing about these lawsuits for years to come. What happens next week, may pave the way for more lawsuits and major settlements? We don’t know how it might end, but we’re pretty sure the pharmaceutical companies will end up paying a lot of money. If not in Oklahoma, in other lawsuits still to come.
Today, Cleveland County District Court Judge Thad Balkman ruled against Purdue Pharma LLP, Johnson & Johnson and others. He ruled the defendant’s in the first civil opioid trial are responsible for causing a public nuisance, and held them liable for abatement of the nuisance, in the amount of $572+ million.
Last week, The Daily Beast reported the Jeffrey Epstein criminal trial will have a million pages of evidence, which will include materials seized from several devices.
A million pages of evidence makes for a great headline. It feels overwhelming! However, after reading the article from The Daily Beast, I began to wonder if a million pages of evidence is a lot or a little? How many files are stored on a standard laptop or cell phone? How will the prosecution and defense identify those files admitted into evidence? These questions, obviously, got me thinking about digital forensics and eDiscovery issues present in the Epstein sex abuse trial.
Now, if you read the blog post from last week, you’re probably wondering if I’m going to constantly write about sex abuse issues. The answer is, no. However, when these topics fill our news and I have the ability to reach out to qualified expert witnesses to provide insights on issues of public import, I’m going to do so.
As of this writing, the Florida Governor has ordered a state criminal probe into the handling of the 2008 Jeffrey Epstein investigation. This new probe was reported by The Miami Herald, yesterday afternoon. Some credit for Epstein’s current predicament, is due to the “Perversion of Justice” exposé series, from Miami Herald reporter Julie K. Brown. She detailed the 2008 sex trafficking investigation and settlement. The series is worth a read!
Now, back to the million documents of evidence. I’ve been working with digital and ediscovery experts for nearly 10 years. That said, I’m a novice on their areas of expertise. I’m able to issue spot when an attorney needs a particular type of expert. With that said, I posed some foundational questions to one of our members.
Questions & Answers for expert witness C. Matthew Curtin, CISSP:
C. Matthew Curtin, CISSP, founder and CEO of Interhack Corp., is a Certified Information Systems Security Professional. An expert in computers and information technology, Mr. Curtin and his team at Interhack help attorneys and executives use data and computer technology in high-stakes situations.
NR: According to The Daily Beast article, the Epstein trial will have more than 1 million pages of evidence, found on multiple devices. How will the prosecution and defense retrieve all of these documents and collate them into usable evidence?
CMC: One million pages of computer evidence is no big deal. Consider that in a typical computer system you’re looking at anywhere from 100,000-500,000 files, including all of the software, operating system, and user data. By the time you get through to the things being used by the prosecution and defense as evidence, the vast majority has been thrown out, but if you’ve got a phone or two, a couple of computers, and a few online services, it’s pretty easy to get into those numbers. Ultimately it depends on how they’re counting, of course: Are these bates numbered pages for presentation, or are they the raw input? If these are the results that are turned into exhibits and so on, that’s pretty big but not huge.
NR: What is the process for identifying the usable documents from those that are unrelated to a litigation?
CMC: Finding relevant documents and conducting a forensic examination are two fundamentally different processes. Finding relevant documents is typically a matter of “indexing” (reading the files for their contents) and then making “queries” of the “index” to return the documents and pages that are responsive to the search. Typically an attorney will then look at the responses and make a decision as to whether something is material. It’s basic data processing: data in, data out for a lawyer to use.
In the case of a forensic examination, the raw data will be subjected to various tests and analysis, ultimately resulting in reports that will be submitted as evidence. For a phone, a complete “extraction report” can easily produce a 5,000 page PDF document, and many get much, much larger. In any case, all of these things will wind up going into some kind of expert report that will outline opinions and findings that might be challenged and should be subjected to scrutiny. This is expert data analysis, where the data processing is performed to be consumed by an expert to form a technical opinion or finding.
NR: How much time would it take a forensics expert to comb through multiple devices to determine which documents are appropriate for discovery and evidentiary purposes?
CMC: Methodology and the size of the source matter for how long it takes. Generally speaking, I tell people to figure that to run through a forensic image of a raw computer hard drive and prepare it for human review, you’re looking at three days if you want to recover deleted files, compute the mathematical “hash” values that allow us to distinguish among files, and so on. A human will then need to go through the results and that can take anywhere from another day to another week or more, depending on what’s found, and how much work needs to be done without automated tools to manage the process. In some cases, no one cares about deleted files. In other cases, they’re critical. The only rule of thumb that applies generally is that the time it takes to do the job is between two and eight times what a lawyer thinks it should take.
NR: Is a million documents a lot of digital documents for a trial? Or is that common when dealing with digital files?
CMC: I addressed this a bit in my first answer, but one million computer files isn’t a big deal.
NR: I’m sure many of my questions are rudimentary, please feel free to provide any additional information you think the public should know about digital forensics and e-discovery in this type of matter…
CMC: Something to add: when conducting forensic examination, we often see a law-enforcement view put forth: Suspect that X happened, so go search for evidence of X. Fail to find X, and you add “tampering” to the list of charges. The reality is, though, that it isn’t sound scientific process to go in search of confirmation of what you think is already happening. Various cognitive biases interplay to create serious problems with the results extracted this way. Far better to construct tests to look for the “null hypotheses,” the things that would disprove what you think is happening. At the very least, alternate theories of the case deserve exploration and there are plenty of cases that would not take the time and money put into them if they were given greater scrutiny.
For example, if someone is suspected of having illegal pornography on a computer—that is, possessing the material, knowing the character of its content—law enforcement will typically reconstruct deleted files, look at thumbnail image databases, and loose files found in caches and elsewhere on the disk managed by the computer operating system rather than the user directly. If they find material that looks like what they thought was there, in many places a prosecutor will go forward with charges. On the other hand, what if someone did get the files and not mean to have them? What other course would there be but to delete the material? If the material has been deleted, why would it be brought up in a prosecution? There are cases where it can be relevant to a legitimate legal question but we’re only in the last few years starting to see some sophistication in consuming these results and moving forward sensibly with discretion informed by understanding.
A huge thanks to C. Matthew Curtin for taking time to provide us with these excellent answers. Please check out his company at http://web.interhack.com/.
Yesterday, Olympian Ashley Wagner came forward with a story of her sexual assault by another figure skater, when she was only 17 years old. We reached out to a sport sexual abuse expert to gain insights.
For many, the Larry Nassar matter was an introduction to the abuse suffered by many of our greatest competitive athletes. In fact, there was a recently released congressional report about the institutional failures relating to Larry Nassar, as reported by CNN. I, for one, was completely unaware of the potential for abuse in Olympic athletics.
Unlike the Nassar matter, where an Olympic physician was convicted of abusing athletes, Ashley Wagner reported abuse by fellow figure skater, John Coughlin. She was 17 years of age, and Mr. Coughlin (now deceased), was 22 years old at the time of the offense. Ms. Wagner provided a video recording and transcribed statement to USA Today. You can view and read her statement here.
To get a better understanding of the power dynamics and power imbalances described in Ms. Wagner’s statement, I reached out our member Katherine Starr, who is an expert witness in the areas of school and sports-related sexual abuse and harassment. Ms. Starr is also a former Olympian. Please visit her website to learn more about her services and organization Safe4Athletes. Below are my questions and her answers.
NR: Yesterday, Ashley Wagner bravely told a story about a time in which she was sexually assaulted while away at a skating camp. How common are these types of attacks in athletic environments?
KS: Unfortunately, sexual abuse is a very common occurrence in athletics, especially at the elite levels. Training camps and international competition often lack any type of formal education and prevention modalities. The risk of sexual abuse to a minor athlete increases exponentially, as they are now susceptible to sexual abuse from an adult-athlete, program staff members and coaches. There are generally no safeguards in place with minimal resources and structures for an athlete to seek the help and protection they need.
Safe4Athletes did a survey on abuse in sport with a focus on elite athletes, the questions asked were in regard to frequency and duration of abuse, all forms of abuse. We found that abuse was more likely to occur over multi-years and multi-occurrence then a single occurrence of sexual abuse. We also found that over 25 % of the participants in the survey were sexual abused, 80% that responded to having been sexually abused had competed at the international level.
We also found that sexual abuse is common across sport, the level of accomplishment is what makes the athlete vulnerable to being targeted for sexual abuse.
NR: Ms. Wagner posted a video of her experience and went into great detail. In one part of the video, she discusses the “dynamics of my sport, where uncomfortable power imbalances thrive to this day.” Do sports-related sexual assaults usually involve power imbalances? And, can you expand on these imbalances for our readers?
KS: The power imbalance that Ms. Wagner has shared transpires across all sport and is a direct result of the talent of the athlete. The inherent structure of sport in itself is an imbalance of power. The imbalance of power first becomes exposed when the athlete reaches its “peak age of involvement” in the sport and the imbalance of power continues to widen as the talent reaches the top of its sport.
The power imbalance does not discriminate or change in regard to type of sport, what changes is the peak age of involvement in the sport. For example, gymnastics peak at around 13 and can compete in the Olympics as young as 13 and a typical elite career will last until 20’s. That sport is vulnerable to an abuse of power structure very young were in a sport like cycling the youngest age of Olympic competitor is 18, and last well in to their 30’s. In both instances, athletes are exposed to same abuse of power dynamic.
The imbalance of power and the dynamic develop at all talent levels and environment, often the star of the team is a target abuse. One of the other vulnerable structures is the group of athletes that are good but haven’t reached the great level, they show promise. It is the promise that is always in reach but never obtained.
NR: How can the athletic organizations improve athlete safety?
KS: First and foremost, implement effective policies, which have an external reporting structure.
Athletic departments should not do their own investigations, oversight and training modules. It appears as a conflict of interest. Seek outside help to set up structures that can actually address the power imbalance that is inherent in the system.
Most importantly, the oversight teams of these issues, needs to be educated and trained themselves to be able to understand how the voice of an athlete works.
NR: Often, it seems competitive athletic organizations fail to recognize the dangers. Or, they choose to “sweep it under the rug” when it comes to misbehavior. How should organizations respond to issues of abuse?
KS: As a result of this very issue, all our programs require an “Athlete Welfare Advocate” that is there for the athlete to seek the help they need, when they are ready. If the athlete doesn’t feel comfortable with that option, they always have the choice of speaking with Safe4Athletes directly to obtain the help and resources that they need to respond to the issue.
We customize policies for the sports environment (schools and sports programs), making sure the key ingredients are in place, to allow for an effective program to respond to the inherent abuse of power in the system.
NR: What steps can athletic organizations take to better protect athletes (many of whom are children, as Ashley Wagner was at the time of the incident)?
KS: Invest in athlete safety and protection equally as one would invest in the success of the athlete and the program. Provide the same vigor and fortitude that one puts into the athlete and the program a structure to combat these issues. One cannot have, a truly successful athlete and program without a system to address the inherent dangers that an athlete is susceptible to.
Effective programs understand the needs of “the athlete” coupled with the “level of participation” and are able to adopt and implement those nuances to respond effectively to issues and concerns.
There will be more to come on these matters. For parents with children involved in competitive athletics, please stay informed. Katherine Starr is a great resource!
When the news hands you a juicy story about wealthy celebrities, elite universities, college admissions, cheating, corruption, federal crimes, racketeering and conspiracy, it is really difficult to choose a title for the article.
If you are at all like me, when the news broke yesterday about wealthy celebrities bribing college officials to help get their children into elite schools, you were probably immediately angry with your parents for not doing the same! I kid. Sometimes, you just have to make light of these situations.
If you’re not up-to-date on “Operation Varsity Blues,” there is some good coverage here.
More likely, you were angry to read that one of the alleged criminals paid to have someone take an SAT for their daughter, scoring approximately 400 points higher than the child could score on their own merit.
Then you probably scrolled through the indictment to see another wealthy family is accused of bribing a crew coach (spending approximately $500,000 in bribes), to help their child be admitted as an athlete, when the child had no history of rowing competitively.
Those of us who have had to work hard to achieve our educational credentials, as a result of learning disabilities, were further angered by parents helping their children to fake disabilities to get more time on a test. This author struggled with school his whole life because of undiagnosed learning disabilities that were discovered only as an adult. I survived. I worked harder to excel. Needless to say, trying to cheat the system and fake a disability really bothered me because accommodations are meant to level the playing field, not give someone unnecessary an edge.
Most of us are aware students receive special benefits if parents or family members have previously gone to the university. We also know that the donating of a building or program often provides family members with special influence. We know this and we sort of accept it as part of society. Successful people work to help their families achieve success. Most of us have accepted this idea. However, when those efforts break the law, corrupt the education system, and displace truly qualified students, we cannot accept it and we should not accept it.
As a result of yesterday’s news, I reached out to one of our members’ to get some early insights on this matter. It is important to remember this story is still developing and what we learned yesterday, may change tomorrow or the next day.
Education Management Expert Witness Dr. Edward Dragan:
Dr. Edward Dragan, has over 40 years experience in education. He has been a special-education teacher, served as a public school principal and a superintendent, founded an alternative school with a group of disenchanted parents and students, and much more. After consulting with an attorney and testifying in court as an expert witness, Dr. Dragan decided he would best be able to help schools, children, and families by developing a practice where he could use his experience to review cases involving schools, education, and the supervision of children and provide expert opinions. Further, he has obtained a law degree with a specialty in education law and has consultation to plaintiff and defendant attorneys around the country and Canada more than 800 times on cases involving wrongful death, sexual harassment, negligent supervision, Title IX, and Section 1983 matters. Dr. Dragan has testified around the country over 125 times. You can learn more about his practice here: http://education-expert.com.
Nick: It seems some of the allegations in the college racketeering conspiracy involve bribing entrance exam administrators. Are there procedures for qualifying entrance exam administrators?
Dr. Dragan: There are no procedures for qualifying entrance exam administrators that would guard against the bribery charges. Unfortunately, even if there were procedures or license for such administrators this type of scam can still occur. When parents, especially privileged parents, want something for their child they usually find a way – and it can involve paying a gatekeeper to a college. It takes two dishonest individuals to engage in this conspiracy and, unfortunately, the honest parents and kids lose out.
Nick: Many of us have long heard the stories of someone posing as a student for the entrance exams. I always took it as “lore.” What policies and procedures are in place to prevent test-taking fraud?
Dr. Dragan: Test-taking fraud is controlled on site by monitoring identification including pictures on license, school identification, passports, etc. Even this method can be circumvented. But careful screening can help deter fraud. Off-site or computer initiated test taking presents unique problems.
Nick: Admittedly, it is early in the publicly available information, but what policy and procedure changes would you suggest to limit test-taking fraud in the future?
Dr. Dragan: I am not an expert in electronic fraud but I imagine that for those off-site test-taking experiences software design might be helpful.
Nick: Do you expect universities to take action against coaches and other school officials who allegedly accepted bribes?
Dr. Dragan: Yes, I do expect universities to take action against coaches and other school officials who are convicted of taking bribes. They should immediately be placed on leave – no work at the university – pending investigation. If there are criminal charges made and they are convicted they should be fired. Of course, employment contracts and other elements will need to be taken into account.
Nick: Is there anything else you wish to add. Comments, concerns, or otherwise…
Dr. Dragan: The education system, and the honest pursuit of education, is a privilege enjoyed by those who are eligible to “get into” the club. When parents circumvent honest endeavors of their children they are teaching their children, by example, how to be cheaters and how to lie to get what they want. This is shameful – and especially for those who fit high-profile status.
It should be noted that USC has already taken action against at least one coach and one school administrator for their alleged wrongful conduct. They fired two employees yesterday, according to the LA Times, while Dr. Dragan and I were communicating about this article. As the story develops, Dr. Dragan and I may return with a Part 2 on this topic!
A few weeks back, BuzzFeedNews wrote an in-depth article on the unreliability of date rape drug testing and how the tests harm investigations and often prevent prosecutions.
Reading the article angered me. I became frustrated over the additional harm done to victims from a lack of national testing standards. My gut feeling was our lack of national or even statewide standards and capabilities, results in victims being re-victimized after a rape.
As with many other blog posts, it forced me to dig a little deeper and communicate with experts to see who was available to comment on this topic, to continue the discussion. Hopefully, by continuing the discussion we might shine more light on the problem and bring it one step closer to a solution.
Without reliable testing standards, how do we preserve evidence for a future prosecution? Even worse, how do we even know if the victim was drugged? If we do not set a standard, how will medical facilities know which drugs to test for during a DFSA screening? Furthermore, we need a comprehensive testing protocol to determine the standard of care when drug-assisted rape is suspected.
Normally, I provide my “two-cents” on a subject before diving into the Q&A with an expert witness. With this subject, I want to hear directly from the medical professional, and I’m sure the readers feel the same.
Forensic Psychiatry Expert Witness Sanjay Adhia
Dr. Sanjay Adhia is triple-board-certified in psychiatry, brain injury medicine and forensic psychiatry. In addition to forensic/expert witness practice, Dr. Adhia is medical director of PACE Mental Health Clinic in the Houston area. His forensic practice focuses on the psychiatric impact of personal injury, abuse, competency, violence, and complicating mental illness. Dr. Adhia evaluates and treats psychiatric injury and disability in victims and alleged abusers. Dr. Adhia is among one of the few forensic psychiatrists who is board-certified in Brain Injury Medicine. To learn more about his forensic psychiatry practice, visit: https://www.forensicpsychiatrynow.com/.
Dr. Adhia: Common characteristics of many drugs used in Drug Facilitated Sexual Assaults (DFSAs) include the ability to incapacitate a victim and to cause anterograde amnesia (inability to recall the assault).
There are quite a few drugs commonly used in DFSAs. The most common and readily available drug is alcohol. Sedatives that are used by perpetrators include Ambien. Benzodiazepines, a class of medications used to treat anxiety, are often employed in DFSAs. They include Valium, Xanax, Ativan and Rohypnol (“Roofies”). Gamma-hydroxybutyrate (GHB), a recreational drug with stimulating and sedating properties, is preferred by some perpetrators as it leaves the body quite rapidly. Ketamine (an anesthetic), Ecstasy (MDMA) and Soma (muscle relaxant) are additional examples of date rape drugs.
Nick: According to the BuzzFeedNews article, there are no national standards with regards to drug testing for date rape drugs. Do you have any recommendations for testing standards?
Dr. Adhia: I would recommend national standards. These standards could establish certification requirements for labs, lab staff and physicians who interpret the tests. For, example there are physicians who are certified to be an MRO (Medical Review Officer). They have expertise in interpreting drug tests. The standards should include time-specific criteria for the various samples to be tested (blood, urine or hair). There should be a list of drugs that are required to be tested. Recently, I was involved in a case where the sample was destroyed after a year and GHB was not included in the testing battery. The standards should establish reliable methodology and concentration cut-offs for each tested substance. Ideally, there should not be any false-negatives or false-positives. Confounding factors could be considered in national standards.
Nick: In the past, I only ever heard it referred to as “date rape.” I understand it is now called Drug-Facilitated Sexual Assault (DFSA). Is there a national committee working to create standards for addressing DFSA cases?
A National Protocol for Sexual Assault Medical Forensic Examinations, 2nd Edition was published by the Department of Justice Office of Violence Against Woman. It includes a section on drug and alcohol testing. (Refer to https://www.ncjrs.gov/pdffiles1/ovw/241903.pdf page 107).
Internationally, the United Nations has published “Guidelines for the forensic analysis of drugs facilitating sexual assault and other criminal acts.”
Nick: In your forensic psychiatry practice, how do you go about treating those suffering the aftermath of DFSA? For example, victims often cannot remember the attack, so what approaches are used? With what issues are victims likely to suffer after DFSA (i.e. depression, anxiety)?
Dr. Adhia: Drug-induced amnesia is not protective of PTSD and other disorders that can occur after a DFSA. For example, some of Bill Cosby’s DFSA victims reported symptoms indicative of PTSD in their victim-impact statements. Many of his victims had life-long effects such as a reduced ability to trust men and form relationships, panic attacks, and nightmares. In DFSAs, there can be a sense of shame and self-blame. A victim could be at increased risk for substance abuse or suicide.
The treatment for PTSD and other co-occurring disorders such as depression or anxiety disorders include medications and counselling. Two medications often used in PTSD include anti-depressants and a blood pressure medication that helps reduce the nightmares. Occasionally, mood-stabilizers and anti-psychotic medications are used to target associated symptoms such as irritability. Counselling includes individual and group psychotherapy.
Nick: Any other comments on concerns you wish to share about this crime…
Dr. Adhia: With increasing awareness, the hope is victims act promptly to preserve evidence for prosecution. Many of these drugs will exit the body in under three days or less. A victim can save his or her urine in a clean and closed container and refrigerate it promptly. A rape kit should be performed as soon as possible. The National Sexual Assault Hotline can be called at 800.656.HOPE to find a medical center for a sexual assault forensic exam with urine and blood testing for drugs.
Prompt treatment of the medical and psychiatric sequelae of DFSA is critical. A victim should be monitored and treated for any drug toxicity. There have been unfortunate cases of overdose such as with Tammy Homolka who choked on her vomit after being drugged with halothane in the course of a DFSA committed by her sister, Karla Homolka and Paul Bernardo. Emergency birth control and STD treatment is often indicated after sexual assaults.
Victims should be evaluated and treated for psychiatric disorders soon after the assault. The hotline number above can be contacted to provide referrals.
Again, the National Sexual Assault Hotline phone number is: 800.656.HOPE. The hotline is maintained by RAINN (Rape, Abuse & Incest National Network). They also have live chat options available on their home page: https://www.rainn.org.
On Friday night, February 2, 2019, my Twitter feed exploded with news of the “power outage” at the Metropolitan Detention Center, Brooklyn. There were protesters and news stories trending about inmate health and safety.
It appears the New York Times broke the story, with the headline “No Heat for Days at a Jail in Brooklyn Where Hundreds of Inmates Are Sick and Frantic.” The frantic nature of the story was certainly increased by the protesters outside the facility advocating for inmate rights. Additionally, we were at the tail end of an incredibly cold week, referred to as the “Polar Vortex.” So, the stars had aligned for an uncomfortable and scary incident for those incarcerated. I’m certain I’d experience fear in the same circumstance.
As the New York Times reported, most of the accounts were described to them by Federal Public Defenders who represent the inmates. The inmates were limited in communication with the outside world, but were able to communicate with defense counsel in some instances. It appears heat was the primary complaint, although there were claims of limited hot water access.
In the article above there seems to be a disagreement between different stakeholders (i.e. warden, union officials, public defenders, and inmates) as to whether there was an electrical or heating problem and which one was causing the problem. For our purposes, the cause of the event does not matter. We’re interested in response.
On Monday, February 4th, a lawsuit was filed against the Federal Bureau of Prisons (FBOP) and warden, as described in this article from NBCNews, “claiming the jail kept inmates in “inhumane” and unconstitutional conditions during a dangerously cold week.”
Did you expect a lawsuit would not be filed? This is a legal blog. Of course a lawsuit was filed. Many questions arise. Was the treatment inhumane? Was it as frigid in the facility as reported? Did prison officials fail to provide humane care? It is hard to say from the publicly reported facts. We are unlikely to know, until a FBOP investigation is completed and/or discovery made public.
Nevertheless, I thought it would be helpful for us to get a better understanding of jail and prison policies and procedures from a correctional expert witness.
Jail Management Expert Witness Donald Leach:
Donald L. Leach, II, is a Jail / Corrections Management expert with over 30 years of experience. He has 20 years of consulting experience on jail management issues nationally, focusing on Risk Management for jails and jail operational methodology. Mr. Leach has served as an expert witness for 5 years, in both State and Federal court. His services are available to counsel for both Plaintiff and Defense and include case review, testimony, and consultation for jail and prison issues. You can learn more about his practice at: https://www.dlleach.me/.
As I often do, I posed several questions to Mr. Leach, and he provided answers to those questions. I have posted them verbatim below.
Nick: Are there health and safety requirements for jails/prisons when experiencing inclement weather?
Mr. Leach: The same requirements for providing humane living conditions exist regardless of weather. The Court has not specified what those conditions have to be, unless addressing an individualized case, but they have to fall within a general range of adequate conditions of confinement. This is in a normal situation. When inclement weather, such as the cold hits, then more leeway is typically given because it involves a relatively short period of time.
Nick: Do jails/prisons have policies and procedures in place for responding to a loss of electricity/heat?
Mr. Leach: More likely than not, FBOP has policies and procedures for managing the loss of electricity and heat. These are generally short-term events and are addressed as such. A close reading of the news articles coming out indicates that while conditions may be unpleasant they are far from life threatening. Depending on the facility design, adequate light may be obtained from natural sources-such as daylight. Evening hours may involve the use of lanterns placed in common areas. Again, these are typically short term events and like you address them when the lights at home go out, jails and prisons have similar policies. Additionally, I would be surprised to find that there are no emergency generators that provide general lighting and power life safety systems.
Nick: Assuming a lack of heat and electricity occurs in a jail/prison, while temperatures outside are below freezing, how should correctional personnel address the issue?
Mr. Leach: I would recommend issuing extra blankets, sheets. If additional clothing is available for issuance, provide that. If the weather has not significantly impacted commerce, then possibly an emergency purchase of thermal tops and bottoms. Extra materials would be issued to the female inmates who seem to suffer from the cold more than the males.
Nick: There were concerns about certain at-risk inmates (elderly and those with medical needs). How would you address medical concerns in a similar situation?
Mr. Leach: The administrator may have to consider temporarily transferring those inmates to neighboring facilities. We would do this on a regular and common enough basis, lasting only until the situation is rectified. Agencies will typically work together to overcome these situations. Today it’s freezing temps but tomorrow it may be plumbing!
Nick: Based only on the publicly available reporting (i.e. NYTimes & ABAJournal), what recommendations would you have for other institutions who may face similar issues in the future?
Mr. Leach: There has to be some prior planning for emergency situations such as this. A general outline of actions to take would be appropriate. The details would be decided based upon available resources and issues. For example, you can plan on transferring the elderly and medically fragile but what if the roads are closed. Keeping a stock of emergency supplies, such as extra blankets may be appropriate, or in dry areas it may be pallets of water. This is going to be geographically determined.
There it is folks! I’ll try to be ahead of the curve on the next major story to likely result in litigation.
What are divorcing couples to do with digital property? How does one party even locate these assets? How do you know if the other party is hiding community property in cryptocurrency? Once located, how do you divide it?
Cryptocurrency is a hot topic in the news, particularly on a slow news day. The financial media especially loves to discuss cryptocurrency at two specific times: 1) when the price of Bitcoin is skyrocketing; 2) when the price of Bitcoin is crashing.
It is certainly of greater interest to those of us who pay attention to advances in technology. I was a little late to the game as I started learning about crypto in 2015. This was earlier than many, but far later than early adopters. When I look at historical charts, it would have been nice to have invested in 2015. Alas, I did nothing of the sort. Luckily, I didn’t invest when it went crazy in 2017. When armchair pundits started saying “it’s still cheap,” I had flashbacks of the dot-com bubble when people would say things like “normal economic principles no longer apply.” Turns out, normal economic principles did apply in both scenarios.
When Bitcoin increased in value to nearly $20,000 per coin in late 2017, it became a household name. Many folks jumped in to cryptocurrency investing in the hopes of striking it rich quick. Some succeeded. Others did not. As of this writing, Bitcoin is priced at $3,415.00 according to Coinbase (chart linked so you can see how it has changed by the time you read this post).
Even off of its highest values, Bitcoin, Ethereum, Litecoin, and other cryptocurrencies still have value. They are an investment vehicle like many others, although they have experienced some tremendous volatility.
For purposes of this article, we’re looking at them as an investment to be divided upon divorce. Or, as an investment intended to hide assets from a spouse.
What is Cryptocurrency?
Don’t worry, this is not a detailed explanation of cryptocurrency. There are about a million other articles online where you can find detailed analysis of the Blockchain (on which cryptocurrency is built). In fact, one of our internet technology experts wrote an article last year that provides some interesting insights on the Blockchain.
According to Investopedia, in relevant part, “A cryptocurrency is a digital or virtual currency that uses cryptography for security. Many cryptocurrencies are decentralized systems based on blockchain technology, a distributed ledger enforced by a disparate network of computers.” The ledger is kept on various different computers around the world, so that there is no centralized computing system. Also, cryptocurrency is not (at least not yet) currency issued by a central government.
As such, cryptocurrencies like Bitcoin, were used to hide money from tax authorities and participate in illegal transactions online. Especially in the early days of the currency, before it was more commonly understood.
Although hiding from the tax man and participating in illegal activity is still occurring, many users are now investing in cryptocurrency as though it is any other security. However, because it is not kept in a standard bank, but rather a digital wallet, some are using the currency to try and hide assets from their spouse (or soon-to-be ex).
What to look for as a forensic accountant?
This article from the New York State Society of Certified Public Accountants (NYSSCPA), provides some excellent advice from an accounting perspective when having to find cryptocurrency in divorce litigation.
Most importantly, the NYSSCPA provides seven questions to ask the client in the client intake interview. The questions are as follows:
1. Is the spouse very tech savvy?
2. Has the spouse ever owned cryptocurrency?
3. If so, did he or she buy and sell on an exchange, or did he or she receive cryptocurrency for goods and services?
4. If so, how did the spouse store and transact in cryptocurrency?
5. Did the spouse use cryptocurrency as part of their trade or business?
6. Where does the spouse keep their important records? Does the client have access to them?
7. What electronic devices does the spouse own?
8. Does the client still have physical access to his or her spouse’s electronic devices, such as computers, phones, and tablets?
This is incredibly important for a forensic accounting expert. You are going to want to identify all the possible records and other forms of documentation that might lead you to assets hidden in cryptocurrency.
If the spouse is tech savvy, they may do a really good job of hiding their use of cryptocurrency exchanges, software wallets, and keys to access funds.
The NYSSCPA also points out other information gathering options for the forensic accountant. You are going to need access to bank statements, tax returns, the public Blockchain, a physical inspection of the marital home, and the spouses electronic devices.
The article also points out you may have to subpoena records from cryptocurrency exchanges. Many of them are not located in the United States and may not be helpful. The exchange mentioned above with the chart, Coinbase, is the most popular and is located in the United States. If the spouse is extra savvy, they may look for exchanges located offshore.
To get further insights on this topic, I normally bring in an expert witness. Today, however, I wanted to provide the readers with some insights from a practicing family law attorney.
Erin Levine, Esq. – Family Law Attorney and Legal Technology Entrepreneur
Erin Levine is a certified family law specialist with more than 14 yeas of experience practicing family law in the East Bay. She has her own law firm, Levine Family Law Group, where she offers full-scope representation, limited-scope representation, mediation, and more.
Additionally, Erin is the founder of Hello Divorce. Hello Divorce is a service that empowers you to conveniently manage the divorce process online with easy to follow, step-by-step guidance and affordable access to our top-notch lawyers. They break down the extremely complicated California divorce process into discrete, manageable steps. Hello Divorce is helping spouses to uncouple without the outrageous costs of the classic contested divorce.
Here are my questions to Erin and her responses:
Nick: As a family law lawyer, when do you employ a forensic accountant?
Erin: We use forensic accountants in about 10% of our divorce cases. Usually we hire a forensic expert to assist with valuing an asset(s), analyzing financials that the other party has provided, determining the separate or community interest in an asset such as a house or business, sorting out complex financial information, and/or determining “income available for support.”
Nick: Have you had the issue of a spouse hiding assets in cryptocurrency?
Erin: Kind of. We’ve had a couple people fail to provide information in the initial disclosure documents evidencing cryptocurrency. We have fortunately (so far) always been able to obtain that information in discovery or a request for further disclosures. What’s made it easier on me is that my client was aware that cryptocurrency existed and in the two cases where the other spouse didn’t initially disclose – we were aware that he had received crypto as part of his compensation package so it was possible to subpoena documentation. In another case, my forensic accountant determined by looking at joint tax returns that there was a significant asset not yet disclosed. That “asset” was determined to be cryptocurrency later in the divorce.
Nick: What usually indicates, to you and your forensic accountant, to start looking for hidden cryptocurrency assets?
Erin: Well the biggest change we’ve made to our in-house process is that we’ve added cryptocurrency to our financial intake process. In other words, we explain to our clients what it is and ask questions designed to help them determine whether or not their spouse has cryptocurrency in one form or another. There are certain professions and/or lifestyles that definitely put us on high alert and require us to look a little closer at a given case to see if there might be something more there. Fortunately, we haven’t had to hard of a time yet.
Nick: What steps can you take to account for the cryptocurrency (marital property)?
Erin: Well, if you are the “out” spouse – meaning, you do not have access to all of the property, debt and/or asset information that your spouse has, you should ask for it. In California, spouse’s owe each other a fiduciary duty to disclose all assets/debts and a duty of the highest good faith and fair dealing. In other words, if one spouse is hiding an asset from the other, and it is later found, the aggrieved spouse has a strong legal claim to recover 100% (not just half) of that asset. I believe many other states have similar laws. Whether you are in a marriage or currently dissolving it, you should make sure you have a copy of all estate planning documents including the initial intake form. I find that when spouse’s are not in “war,” they are much more candid about what they own. By taking the time to look through that early intake form or your previous tax returns, you may be able to discover cryptocurrency. If it’s not immediately apparent, follow the investment/cash. As an example, maybe your spouse sold stock in 2017. Trace those funds. Where did they go? Were they used to purchase a new home? Did they disappear? If so, you have a right to request information and/or subpoena documents to determine where that cash went.
A special thanks to my friend, Erin Levine, for her insights on this topic. Also, I want to thank Allen Rodriguez of ONE400 who gave me the idea for this blog post. This is just an entry into the cryptocurrency issue for divorce. We may be writing about this subject in the future.