Case 2:11-cv-03695-RDP-TMP Document 401 Filed 10/13/15 Page 1 of 19

FILED
2015 Oct-13 PM 07:19
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
DRUMMOND COMPANY, INC.,
Plaintiff ,
vs.
TERRENCE P. COLLINGSWORTH,
individually and as agent of Conrad & Scherer,
LLP; and CONRAD & SCHERER, LLP,
Defendants .

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Case No. 2:11-cv-3695-RDP

DRUMMOND COMPANY INC.S RESPONSE TO DEFENDANT

COLLINGSWORTHS POST-HEARING BRIEF
REGARDING CRIME-FRAUD EXCEPTION

William Anthony Davis, III (ASB-5657-D65W)

Sara E. Kropf
H. Thomas Wells, III (ASB-4318-H62W)
LAW OFFICE OF SARA KROPF PLLC
Benjamin T. Presley (ASB-0136-I71P)
1001 G St. NW, Suite 800
Washington, DC 20001
STARNES DAVIS FLORIE LLP
P.O. Box 59812
(202) 627-6900
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099
Attorneys for Drummond Company, Inc.

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TABLE OF CONTENTS
TABLE OF AUTHORITIES.................................................................................................................. iii
ARGUMENT .......................................................................................................................................1
I.

COLLINGSWORTHS BRIEF SHOULD NOT BE CONSIDERED BY THE COURT BECAUSE IT

VIOLATES THE COURTS ORDER AS TO THE SCOPE OF POST-HEARING BRIEFING.........1

II.

DEFENDANTS

THREE EXPERTS TESTIFIED TO HYPOTHETICAL FACTS AT THE

SANCTIONS HEARING AND DID NOT JUSTIFY THE FRAUD ON THE COURT OR THE
OTHER CRIMES COMMITTED HERE.. ...........................................................................2

III.

IN CAMERA REVIEW AND THE SECOND PRONG OF SCHROEDER ..................................8

A.

At an absolute minimum, there is sufficient evidence to warrant in camera

review under Zolin. ......................................................................................8

B.

All documents related to the crimes and fraud at issue are discoverable
under the crime-fraud exception. ...............................................................12

CONCLUSION...................................................................................................................................14
CERTIFICATE OF SERVICE ...............................................................................................................16

i
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TABLE OF AUTHORITIES
Cases

Page(s)

Brady v. United States,

373 U.S. 83 (1963)...............................................................................................................5
Cox v. Admr U.S. Steel & Carnegie,
17 F.3d 1386 (11th Cir.) opinion modified on rehg, 30 F.3d 1347 (11th Cir. 1994) .......15
Craig v. A.H. Robins Co.,
790 F.2d 1 (1st Cir. 1986)..................................................................................................12
Giglio v. United States,
405 U.S. 150 (1972).............................................................................................................5
Hamilton v. Southland Christian Sch., Inc.,
680 F.3d 1316 (11th Cir. 2012) ...........................................................................................2
In re Grand Jury Investigation (Schroeder),
842 F.2d 1223 (11th Cir. 1987) .....................................................................................8, 14
In re Grand Jury Subpoenas,
144 F.3d 653 (10th Cir. 1998) ...........................................................................................12
U.S. v. Levenite,
277 F.3d 454 (4th Cir. 2002) ...............................................................................................3
United States v. Thornton,
1 F.3d 149 (3d Cir. 1993) ....................................................................................................5
U.S. v. Wilson,
904 F.2d 656 (11th Cir. 1990) .............................................................................................5
United States v. Zolin,
491 U.S. 554 (1989)...........................................................................................................10

ii

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Defendant Collingsworths post-hearing brief merely rehashes the hundreds of pages of

existing briefing about the crime-fraud exception. The Court did not order briefing on this topic,
and Collingsworths brief should therefore be stricken as improperly filed. Even if the Court
considers it, Collingsworths arguments against the crime-fraud exception should be rejected
because the evidence presented at the sanctions hearing firmly establishes its application here.
ARGUMENT
I. COLLINGSWORTHS BRIEF SHOULD NOT BE CONSIDERED BY THE COURT BECAUSE
VIOLATES THE COURTS ORDER AS TO THE SCOPE OF POST-HEARING BRIEFING.

IT

The parties have filed hundreds of pages of briefing on whether the crime-fraud
exception applies here. On the last day of the sanctions hearing, the Court precisely defined four
issues to be briefed:
1.

If the Court decide[s that] the crime-fraud exception applies with respect
to Mr. Collingsworth, what steps should [the Court] take after that. Doc.
391 (Sept. 1-3 Hrg. Tr.) at 753:19-21.

2.

Again assuming that the crime-fraud exception is imposed against

Collingsworth, has Drummond met a lower threshold requirement . . . to
require[e] some type of in camera inspection of records of Conrad &
Scherer and what should that in camera inspection look like. Id. at
754:5-15.

3.

Assuming the crime-fraud exception applies to either or both Defendants,

how does that affect the assertion of work product privilege or attorneyclient privileged communications in . . . other cases. Id. at 754:16-23.

4.

Drummonds response to Defendants assertion that the alleged crimes or

frauds are over and fixed or ongoing. Id. at 769:16-18.

The Court did not order the parties to (re)brief the application of the crime-fraud
exception. Yet Collingsworths brief ignores the Courts order and does just that. See Doc. 392
generally. Because the Courts order does not authorize this brief, and because it does not
address any of the issues defined above, the brief should be not be considered by the Court.

1
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Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1319 (11th Cir. 2012) (refusing to
address case law cited in unrequested supplemental notice of authority).
II. DEFENDANTS THREE EXPERTS TESTIFIED TO HYPOTHETICAL FACTS AT
HEARING AND DID NOT JUSTIFY THE FRAUD ON THE COURT OR THE
COMMITTED HERE.

THE SANCTIONS
OTHER CRIMES

Even if the Court considers Collingsworths brief, its arguments should be rejected.
Collingsworth first argues that the witness payments were necessary, legal, ethical and morallyrequired.

Doc. 392 at 3.

He claims that the opinions of the three defense experts are

unrebutted and highly credible and that their opinions support his argument. Id.
As an initial matter, as the Court explained at the sanctions hearing, it is more focused in
on the nondisclosure and misrepresentations about these payments and is not convinced that it
must mak[e] any ruling on propriety of the payments at this particular time. Doc. 391 (Sept. 13 Hrg. Tr.) at 709:2-8. The Court need not decide whether these payments were appropriate to
apply the crime-fraud exception; Defendants non-disclosure of those payments is a fraud on the
court sufficient to apply the crime-fraud exception.1
And contrary to Collingsworths assertion, the opinions offered by these three experts
were not unrebutted and highly credible. The relevance and reliability of the opinions offered
by all three experts were called into serious question during cross examination and through the

Collingsworth repeatedly asserts that Drummond has not presented a prima facie case of any fraud or crime. Doc.
392 at 1, 2, 3 & 8. Drummond does not respond herein to this familiar and false contention for two reasons: First,
this issue has been briefed and argued ad nauseum since July 2014. See Docs. 348-2, 348-3, 348-4, 348-5, 348-6,
348-7 & 355. This Court, therefore, is well aware of Drummonds position with respect both the law and the facts
as they relate to whether the crime-fraud exception applies to both Defendants based on witness bribery, suborning
perjury and perpetrating a fraud on the Court. Second, Collingsworths argument is not even remotely responsive to
the specific questions identified by this Court on September 3rd for supplemental briefing.

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documentary record 2, and some of the most important testimony they offered actually strongly
supports the conclusion that Defendants witness payments were unethical and illegal.
Javier Pea. Mr. Pea worked for the DEA in Colombia long before the witness
payments at issue here. Doc. 390 (Sept. 1-3 Hrg. Tr.) at 286:3-5, 288:4-7 (in Colombia from
1988 to 1994 and 1999 to 2001). Mr. Pea offered the opinion that it was legal for the DEA to
provide witness payments in Colombia in specific circumstances and subject to strict protocols.
Id. at 304:4-8. This opinion, however, does not support Collingsworths argument for several
reasons.
First, Mr. Pea testified that (1) the DEA payments to confidential informants were
legally authorized, and (2) that larger payments were approved by someone at the
headquarters level of the federal government. Id. at 313:7-13. Defendants witness payments
were neither authorized by statute nor approved by anyone in the federal government. See U.S.
v. Levenite, 277 F.3d 454, 460-464 (4th Cir. 2002) (extensively discussing the governments
authority to make payments to confidential informants and witnesses, holding there are several
statutes that allow the government to pay informants and witnesses for their cooperation, services
and testimony).
Second, Mr. Pea knows nothing about the actual payments that were made by
Defendants, such as their size, timing or justification. Nowhere in Mr. Peas testimony or his
declaration (Defendants Exhibit 295) does Mr. Pea offer the opinion that the payments made
by the Defendants were legal. Mr. Peas opinion that payments by the DEA are legal does not

For example, Drummond offered as an exhibit the declaration of expert witness R. Bernard Harwood. See
Plaintiffs Hearing Exhibit 44 (also filed with the Court as Doc. 88-6). Justice Harwood was provided with
information about the witness payments here and offers the opinion that these payments were unethical. Id. Justice
Harwoods report demonstrates that these experts testimony was not unrebutted. Notably, Justice Harwood
reached this conclusion even before the massive fraudulent concealment with respect to the payments to Blanco,
Samario and El Tigre was uncovered.

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answer the question of whether the payments by Defendants were ethical or legal. In fact, when
Mr. Pea was making statutorily-authorized payments to confidential informants in Colombia,
see Doc. 390 (Sept. 1-3 Hrg. Tr.) at 309:7-10, the AUC did not even exist.
Third, it is undisputed in this case that Mr. Collingsworth published the identity,
testimony and, in most cases, location, of each of the witnesses that were paid on IRAdvocates
website.

See Ex. 1 (IRAdvocates website screenshot).

When asked if he would ever do

something like that with respect to people that he was protecting, Mr. Peas answer was an
emphatic no:
Q When you were working with confidential informants back in the late 80s,
early 90s, you mentioned that the confidentiality of their identity was of utmost
importance?
A Yes, sir.
Q How many times have you posted the identities of your confidential informants
on the Internet?
A I have never done that.
Q That wouldnt be something you would do, would you?
A Of course not.
Q How about the names of their family members?
A I would never do that either.
Q How about the testimony that theyre going to be providing against the person
that may be allegedly trying to threaten them?
A That is all confidential. Those reports are locked in very secure places.
Q You would never put that on the Internet?
A No, sir.
Doc. 390 (Sept. 1-3 Hrg. Tr.) at 309:7-24.

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Fourth, Mr. Peas testimony was about the legality of payments to confidential
informants, not about payments to trial witnesses. This is a crucial distinction with respect to
disclosure. The confidential informants Mr. Pea described provided the DEA with information
about criminal organizations in Colombia3 but were not witnesses at trial. The government must
disclose information that affects the credibility of its witness at trial, including witness payments.
Giglio v. United States, 405 U.S. 150, 154 (1972) (When the reliability of a given witness may
well be determinative of guilt or innocence, nondisclosure of evidence affecting credibility falls
within this general rule.); Brady v. United States, 373 U.S. 83 (1963); United States v.
Thornton, 1 F.3d 149, 158 (3d Cir. 1993) (It is evident that the information [about DEA
payments to witnesses] that was not disclosed fell within the Brady rule, and should have been
disclosed by the government.); U.S. v. Wilson, 904 F.2d 656, 659 (11th Cir. 1990) (holding that
the government must not deliberately use, or encourage the use of, perjured testimony . . . there
must be a complete and timely disclosure of the fee arrangement . . . there must be adequate
opportunity to cross examine regarding the fee arrangement, and . . . a defendant is entitled to a
special cautionary instruction on the credibility of an accomplice or government informant).
Stephen TKatch. Mr. TKatch worked in the Department of Justices Witness Security
Program. Doc. 390 (Sept. 1-3 Hrg. Tr.) at 352:1-3. Like Mr. Pea, Mr. TKatch testified only
about the statutorily-authorized practices of federal law enforcement officers in criminal
investigations to protect witnesses or informants.

He explained that there was a rigorous

approval process including involving the criminal division of the Department of Justice, the
United States Marshals Service, and the Federal Bureau of Prisons. Id. at 370:3-7. Mr.

In Mr. Peas words, informants would provide information about what they were up to, what they were planning,
for example, trafficking routes . . . where the stash sites were at, where the cocaine labs were at. Id. at 294:16295:1.

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TKatch also described how the prosecutor would generally turn [information about witness
payments] over to the court and then to the defense attorney. Id. at 364:4-17. Sometimes, the
Department of Justice would request that the information be deemed attorneys eyes only and
not shared with the defendant.

Id.

He testified, however, that the fact of subsistence

[payments] would always be disclosed by the government to the court. Id. at 378:6-10.
Like Mr. Pea, Mr. TKatch knew nothing about the actual witness payments made here,
testifying that I have not delved into the facts, the underlying facts, of this case. Id. at 375:5-8.
As a result, he did not offer an opinion about the legality of the witness payments here, and his
opinion does not support Collingsworths argument.
If Defendants actually had evidence of the supposed threats against these witnesses or
their families or evidence of security measures provided to the witnesses or families, then one
would expect Mr. Pea or Mr. TKatch to opine on the seriousness of the threats and the
appropriateness of the security measures provided to the witnesses. Their failure to provide such
analysis speaks volumes as to the lack of that evidence here.
Charles Wolfram. Professor Wolfram purported to offer an expert opinion as to whether
Defendants witness payments were ethical. He opined that, in general, payments for security
could be ethically made. However, he admitted that he could not offer an opinion as to whether
the specific payments here were reasonable,4 because he didnt have even remotely enough
facts to reach a conclusion. Id. at 343:9-21. Therefore, Professor Wolfram does not offer an
opinion that the actual payments made by Defendants were ethical, and his opinion does not

Professor Wolframs report offers four guidelines for this analysis: (1) whether the cost of testifying (without
reimbursement) would dissuade a witness from testifying; (2) the size of the payment as compared to the witness
role of giving testimony and not compared to the testimonys value to the party paying the witness; (3) the size of
the payment should reflect actual costs to the witness; and (4) the size should not be unreasonably large or
exorbitant. Defendants Hearing Exhibit 322, 19. However, Professor Wolfram does not offer an opinion about
the results of any analysis of these guidelines applied to the facts of this case.

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support Collingsworths contention that they were. In addition, Professor Wolfram admitted that
witness payments should be disclosed before [the witnesses] give their trial testimony so that
they can . . . be cross-examined about that. Id. at 344:21-345:1.5
Professor Wolframs opinions do not justify Defendants actions. First, he made clear
that any such payments must be disclosed before trial testimony. Defendants, of course, did not
do so in Balcero. With respect to Gelvez, Charris, and Duarte, they affirmatively withheld this
information until after they obtained trial testimony and after discovery had closed. Doc. 280 at
93. And they never disclosed the payments to El Tigre, Samario and Blanco. Id. at 94.
Second, Professor Wolfram does not offer the opinion that Defendants witness payments here
were ethical because, again, he was not provided enough facts by Defendants to reach this
conclusion.
Because none of these three experts analyzed the actual payments at issue to determine if
they were either legal or ethical, their opinions have no relevance here. They do not support
Collingsworths argument that the payments made by Defendants were necessary, legal, ethical
and morally-required. Doc. 392 at 3. In fact, their testimony supports Drummonds argument
that Defendants committed a fraud on the court by failing to disclose the payments before these
witnesses offered trial testimony.
Moreover, Collingsworths argument that these payments were necessary, legal, ethical
and morally-required relies entirely on a self-serving and one-sided set of facts. Collingsworth
even asserts that [t]here is no dispute that the record is now complete, and all outstanding,
responsive information regarding witness assistance was provided to Drummond in compliance

Professor Wolfram also offered the remarkable opinion that it is permissible to affirmatively misrepresent to the
court and other parties the existence witness payments in an extreme case. Doc. 391 (Sept. 1-3 Hrg. Tr.) at
343:22-344:11. This opinion is nowhere supported by any rule of ethics, bar opinion or even common sense, and it
seriously calls Professor Wolframs credibility into question.

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with the Courts October 15, 2014 Order. Doc. 392 at 2. That contention is simply not true.
The record is nowhere close to complete. Defendants have withheld hundreds of documents
relating to witness payments as privileged, refused to answer questions based on privilege, and
spoliated several years of Collingsworths email, all of which would allow Drummond to further
contradict Defendants characterization of these payments. Indeed, if it were undisputed that
the record was complete, the parties would not be litigating the applicability of the crime-fraud
exception. In any event, this Court does not need to conclusively hold that the payments at issue
were bribes for the crime-fraud exception to apply, which is the issue presently before this Court.
Rather, all that Drummond is required to do is present evidence that, if believed by a trier of fact,
In re Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987), could cause a
reasonable person to believe that Defendants witness payments were not for security, but
rather to purchase testimony. Drummond has met this burden.
III. IN CAMERA REVIEW AND THE SECOND PRONG OF SCHROEDER
A.

At an absolute minimum, there is sufficient evidence to warrant in camera

review under Zolin.

Collingsworths final argument is that Drummond has not made a sufficient showing that
the documents it seeks are in furtherance of the fraud on the court. Doc. 392 at 8-14.
Specifically, Collingsworth argues that there cannot be an in camera inspection because
Drummond has not shown evidence that documents in furtherance of any alleged fraud on the
court exist. Id. at 13.6

But this Court has already stated its intention to conduct such a review

to determine the related to prong of the crime-fraud analysis. Doc. 390 (Sept. 1-3 Hrg. Tr.) at

In his supplemental crime-fraud brief filed just a few weeks ago, Collingsworth argued just the opposite. He
contended that [i]n order to determine whether the communication was in furtherance of a crime or fraud, the
Court must review the communication at issue in camera. Doc. 353 at 13 (emphasis added). Collingsworth should
not be permitted to change course merely because he now realizes the likelihood that the crime-fraud exception will
be applied against him.

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471:13-19 & 473:13-474:3.

Additionally, Collingsworths arguments regarding in camera

review ignore entirely this Courts directions regarding post-hearing briefing, which made clear
that the parties were to assume that the crime-fraud exception applied to Collingsworth.
More importantly, there are mountains of documentary evidence of Collingsworths
direct involvement in witness payments and Defendants fraudulent concealment thereof. See
Doc. 293 at 10-11; Doc. 355 at 14-22 & 28-29. Indeed, Drummond identified and discussed nine
categories of documents or information that are in furtherance of the crimes or fraud, including
answers to deposition questions about Ivan Otero, documents related to the deps in the can
email, communications with counsel related to the improper redaction of the Blanco payment
documents and communications related to drafting pleadings that misrepresented the number of
witnesses being paid. Doc. 311 at 6-25. Drummond has made its showing that these categories
of documents and communications are directly related toand in furtherance ofthe
crimes and fraud on the Court here. 7
C&S similarly argues that that there is only innuendo and speculation of its
involvement in the crimes and fraud at issue, Doc. 395 at 25, and therefore in camera review of
documents is not warranted. But Drummond has presented volumes of evidence consisting of
documented correspondence involving every member of the management team at the firm, as
well as its CFO, firm business records, firm bank records, and regular monthly emails involving
numerous C&S partners and employees involved in the processing and sending of witness
payments. See Doc. 393 at Sections I & II. This evidence proves that countless representations

Many of the documents and communications that would be related to or in furtherance of the crimes and fraud
perpetrated by Defendants postdate January 2013, and have neither been logged nor submitted for in camera review
by the Defendants. As explained infra on pages 10-11, at the time this Court entered its October 15, 2014 Order on
Privilege Logs (Doc. 151), Defendants were blatantly misrepresenting the scope, nature and extent of their witness
payments to both Drummond and the Court, and had not yet disclosed that Samario, El Tigre and Blanco had all
been paid.

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made by both Defendants to Drummond and this Court are unequivocally false, is far more
evidence than courts have found sufficient to apply the crime-fraud exception, and is multitudes
more than has been required to justify in camera review under Zolin.
Moreover, as this Court stated, you cant look at it as those facts in a vacuum. You look
at the entire case. Doc. 390 (Sept. 1-3 Hrg. Tr.) at 470:15-16. Thus, when determining whether
there is a prima facie case of witness bribery or fraud on the court, this Court should look not just
at the payments themselves, but also other factors such as (1) the fraudulent concealment of
those payments, (2) the shifts in the witnesses testimony associated with those payments, (3) the
lack of objective documentation showing that the money was actually used for security, and
(4) Defendants act of publishing witness identities and testimony on the Internet, which is
something their own expert admitted was totally inconsistent with protecting a witness.
In light of the above evidence, Defendants cannot legitimately argue that Drummond has
failed to set forth evidence that is sufficient to support a reasonable belief that in camera review
may yield evidence that establishes the exceptions applicability. United States v. Zolin, 491
U.S. 554, 574-75 (1989) (emphasis added); see also Doc. 393 at Section II-C (collecting cases).
Significantly, none of Defendants communications with their counsel have yet been
logged or produced to the Special Master, as Defendants contend they do not fall within the
scope of this Courts October 15, 2014 Order. Doc. 151. But at the time the parties were
negotiating the privilege log obligations in September 2014, and at the time this Court ultimately
entered its October 15, 2014 Order on Privilege Logs, Defendants were blatantly lying
regarding the true nature, scope and extent of Defendants witness payments. Indeed, just five
days before Drummond submitted its proposed privilege log limitations, Ex. 2 (Sept. 17, 2014
Wells Ltr.), Defendants sent a letter to Drummond and the Special Master that contained

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numerous misrepresentations regarding their witness payments, including the blatantly false
representation that Defendants have done its [sic] best to produce or log all responsive
documents which evidence or refer to security payments to witnesses associated with the human
rights cases against Drummond. Doc. 243-24 (Sept. 12, 2014 B. Smith Ltr.) at p. 7 of 8. This
was nearly three months after Billy Scherer had printed out and forwarded the deps in the can
email to both Bill Scherer and counsel in this defamation case. Yet, Defendants did not disclose
their payments to El Tigre and Samario until over two months later, on November 17, 2014, see
Doc. 174-6, and did not disclose the payments to Blanco until January 9, 2015. Doc. 174-2.
Accordingly, Drummond was unaware that all of Defendants prior representations that only
three witnesses had been paid were categorically false. Obviously, had Drummond known the
true state of the facts, Drummond would have insisted on Defendants logging and producing in
camera their communications with their counsel in this case.
Defendants should not be allowed to benefit from their fraudulent misconduct. As stated
previously, Drummond respectfully submits that this Courts in camera review should include
communications between Defendants and any of their counsel between January 1, 2013 and
January 9, 2015, and requests entry of an order directing the Defendants to produce those
communications to the Special Master for his review. Doc. 393 at 22. For the reasons
explained in both prior briefing and herein, those communications are critical evidence that will
bear directly on, inter alia, the issues of (1) who knew about the misrepresentations made to this
Court, (2) when they knew it, (3) why the May 2014 redactions (which concealed the payments
to El Tigre and Samario) were made and by whom, (4) whether Mr. Collingsworth truly forgot
about witness payments, and (5) the veracity of Defendants contention that they moved Heaven

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and Earth to disclose the true scope, nature and extent of their witness payments just as soon as
they could.
B.

All documents related to the crimes and fraud at issue are discoverable
under the crime-fraud exception.

C&S and Collingsworth both argue that the crime-fraud exception does not apply to
communications regarding past or completed frauds. Doc. 395 at 27; Doc. 392 at 10-12. While
that language can be found in the case law, Defendants interpretation of it misses the mark. For
example, a criminal defendant is entitled to have privileged discussions with his attorney in
furtherance of his defense against charges for a criminal offense. But this principle does not
apply to circumstances where there is the initial criminal and fraudulent conduct (payment of
witnesses and the concealment of the same in Balcero), and then an ongoing fraudulent cover-up
of those payments as occurred throughout this case. See, e.g., In re Grand Jury Subpoenas, 144
F.3d 653, 660 (10th Cir. 1998) (crime fraud exception does apply if the assistance was used to
cover up and perpetuate the crime or fraud.); Craig v. A.H. Robins Co., 790 F.2d 1, 4 (1st Cir.
1986) ([C]ontinuing fraudulent misrepresentation and cover-up vitiates not only any attorneyclient privilege but also any work product immunity.). That type of cover-up is precisely what
happened here.8
So Defendants cannot plausibly argue that communications Conrad & Scherer had with
Collingsworth or its outside counsel in this case in June 2014 would not be in furtherance of
the completed fraud on the court. Nor would Conrad & Scherers internal privileged
communications or communications with its outside counsel in the [Wichmann] Florida state
court case. Doc. 395 at 28; see also Doc. 392 at 12 (any work product that could be subject to
production to Drummond as a result of application of the crime-fraud exception would have to
8

Moreover, Defendants are still paying Charris, El Tigre and Samario. Doc. 280 at 29 & 71. The crime of
witness bribery, at least as it relates to these three witnesses, is ongoing.

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be communications before Mr. Collingsworths statements to the Court [on April 14, 2014]).
Not only does that assertion ignore the fact that a cover-up of past crimes or frauds is sufficient
to invoke the crime-fraud exception, it also relies on the demonstrably false assumption that
Defendants fraud on this Court was completed by June 2014. In reality, their fraud was far
from completed in June 2014.
In July 2014, both Defendants submitted to this Court briefs on the crime-fraud exception
which included some of the most forceful (and categorically false) representations regarding
their witness payments, and also attacked Drummond and its counsel. See Docs. 174-13 & 17414. This briefing and their arguments at the July 23, 2014 hearing misled the Special Master into
believing that all witness payments had been fully disclosed. Doc. 283-23 (Mar. 24, 2015 Hrg.
Tr.) at 137:25-138:10.
Also in July 2014, Defendants submitted a supplemental privilege log that completely
omitted the deps in the can email, which, had it been logged and provided to the Special
Master, would have instantly revealed Defendants crime-fraud briefing to be, itself, a massive
fraud. Doc. 280 at 381. It is now known that over two weeks before that privilege log was
served, Billy Scherer had located, printed out, and provided to both Bill Scherer and Defendants
counsel in this case the deps in the can email. Docs. 389 & 390 (Sept. 1-3 Hrg. Tr.) at 195:7197:12; 397:22-398:12; 407:5-408:6.
In August 2014, Collingsworth perjured himself in a sworn declaration regarding the
scope, nature and extent of his witness payments. Doc. 280 at 440-451.
In September 2014, Defendants again made misrepresentations in the Wichmann case
regarding their witness payments, id. at 438-451, as well as in correspondence sent to
Drummond and the Special Master. Id. at 424-437. And in November 2014, Defendants

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served joint interrogatory responses falsely swearing that there was merely a discussion about
paying Jaime Blanco. See Doc. 174-7. They did not disclose those payments until January 9,
2015. Doc. 174-2.
Both Defendants have represented to this Court that they acted in good faith in disclosing
their witness payments as soon as possible after they learned that Samario, El Tigre and Blanco
were paid. See Doc. 395 at 31 (When Conrad & Scherer learned that misstatements may have
been made and incorrect information provided to the Court, it moved Heaven and Earth to
correct the problem.). Neither this Court nor Drummond is required to accept that contention at
face value, and Defendants cannot be allowed to manipulate privilege and work product to
hamstring Drummond in its efforts to test this contention. Defendants communications amongst
themselves, and with any outside counsel, relating to the true facts of their witness payments
(and the disclosure of the same) are unquestionably related to the fraud on this Court, as they
will bear directly on who knew what, when they knew it, and what prompted the Defendants to
make the undisputed misrepresentations they did.9
CONCLUSION
Even if the Court considers the arguments in Collingsworths improperly-filed brief, each
fails. Defendants three expert witnesses did not provide testimony to support Collingsworths
argument that these payments by Defendants in Balcero were ethical or legal, nor did they offer
testimony to address the overwhelming evidence that Defendants improperly concealed these

C&S bizarrely argues that the crime-fraud exception is not a discovery device to obtain communications and
information that would relate to a crime or fraud. Doc. 395 at 28. That assertion is contradicted by the plain
language of Schroeder: The second prong is satisfied by a showing that the communication is related to the
criminal or fraudulent activity established under the first prong. 842 F.2d at 1227 (holding that, where there was a
prima facie case of tax fraud, the crime-fraud exception allowed discovery of any legal assistance Schroeder
received in generating income he did not intend to report and any legal assistance Schroeder received in disposing
of income he did not intend to report, as both were related to his tax evasion); see also id. at 1228 (any
communications Schroeder made in connection with legal advice Kliston may have provided that was related to
Schroeders tax evasion would not remain privileged).

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payments from Drummond and the Court.

payments, if made, must be disclosed.

In fact, Defendants experts agreed that such

Their uniform opinion on this point renders the

Defendants nondisclosure of their witness payments all the more damning. As stated by the
Eleventh Circuit, [a] jury could find it strange that those who insist that their conduct was
proper and their intent pure went to such great lengths to hide it all from the light of day. From
such secrecy much may be inferred. Cox v. Admr U.S. Steel & Carnegie, 17 F.3d 1386, 1402
(11th Cir.) opinion modified on rehg, 30 F.3d 1347 (11th Cir. 1994).
Likewise, Drummond has made a sufficient showing that the requested documents are
related to the crimes and fraud at issue, and may yield additional evidence of those crimes and
fraud.

Respectfully submitted,

/s/ H. Thomas Wells, III

William Anthony Davis, III (ASB-5657-D65W)
H. Thomas Wells, III (ASB-4318-H62W)
Benjamin T. Presley (ASB-0136-I71P)
STARNES DAVIS FLORIE LLP
P.O. Box 59812
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099

/s/ Sara E. Kropf

Sara E. Kropf
LAW OFFICE OF SARA KROPF PLLC
1001 G St. NW, Suite 800
Washington, DC 20001
(202) 627-6900

Attorneys for Drummond Company, Inc.

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Case 2:11-cv-03695-RDP-TMP Document 401 Filed 10/13/15 Page 19 of 19

CERTIFICATE OF SERVICE
I hereby certify that on October 13, 2015, I electronically filed the foregoing with the
Clerk of the Court using the CM/ECF system which will send notification of such filing to the
following:
Special Master T. Michael Brown, Esq.
Ms. Carly Miller, Esq.
Bradley Arant Boult Cummings, LLP
One Federal Place
1819 Fifth Avenue North
Birmingham, Alabama 35203
mbrown@babc.com
camiller@babc.com
Robert Spotswood
William K. Paulk
SPOTSWOOD SANSOM & SANSBURY, LLC
One Federal Place
1819 Fifth Avenue North, Suite 1050
Birmingham, Alabama 35203
rks@spotswoodllc.com
wpaulk@spotswoodllc.com
Walker Percy Badham, III
Badham & Buck, LLC
2001 Park Place, Suite 500
Birmingham, AL 35203
pbadham@badhambuck.com

/s/ H. Thomas Wells, III

H. Thomas Wells, III (ASB-4318-H62W)

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