Case 1:08-cr FB Document 187 Filed 09/25/09 Page 1 of 6

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1 Case 1:08-cr FB Document 187 Filed 09/25/09 Page 1 of 6 U.S. Department of Justice JM:IJ:PSS:BS United States Attorney Eastern District of New York 271 Cadman Plaza East Brooklyn, New York September 25, 2009 By ECF The Honorable Frederic Block United States District Court Eastern District of New York 225 Cadman Plaza East Brooklyn, New York Re: United States v. Ralph Cioffi and Matthew Tannin Criminal Docket No (FB) Dear Judge Block: The government respectfully submits this letter in response to defendant Tannin's September 21, 2007 motion to exclude: 1) the testimony of Catherine Redlich, Esq., regarding her notice to Tannin's counsel of her intention to produce the April 22, 2007 G-Mail that Tannin sent to defendant Cioffi and to Ms. Redlich's client, Ray McGarrigal (the "G-Mail") to Bear Stearns a day before the G-Mail was produced to Bear Stearns by McGarrigal and Tannin; and 2) all evidence regarding Tannin's deletion, after the Government's investigation was well under way, of the entire G-Mail account from which he had sent the G- Mail. For the reasons stated below, both Ms. Redlich's testimony and Tannin's deletion of his entire G-Mail account are relevant and admissible. I. Ms. Redlich's Testimony is Relevant and Admissible As described in the government's related motion for a Curcio hearing with respect to Tannin's production of the G-Mail, the charges in this case resulted from parallel investigations by this Office and the Securities and Exchange Commission ( SEC ). Tannin's former employer, Bear Stearns Asset Management ("BSAM") also conducted its own investigation. BSAM cooperated with the

2 Case 1:08-cr FB Document 187 Filed 09/25/09 Page 2 of 6 government and voluntarily turned over documents to this Office and the SEC. Ms. Redlich's client, Ray McGarrigal, was a portfolio manager for the Funds. During their respective investigations in the summer and fall of 2007, both BSAM and the SEC requested documents from Mr. McGarrigal and the defendants. Ms. Redlich has told the government that Mr. McGarrigal gave her his copy of the G-Mail on November 6, Ms. Redlich has also told us that she called Tannin's counsel, Nina Beattie, Esq., that same day, advised her of the G-Mail's existence, and informed her that she intended to turn the G-Mail over to BSAM's counsel. According to Ms. Redlich, Ms. Beattie communicated that she was unaware of the existence of the G-Mail at the time of the call. 1 Later that day, Ms. Redlich and Tannin's counsel decided to jointly produce the G-Mail to BSAM, which they did the next day. BSAM subsequently provided the G-Mail to this Office and the SEC. 2 The government intends to introduce the G-Mail at trial. Tannin has argued that what he claims was his voluntary production of the G-Mail to BSAM mitigates its incriminating impact. See Tannin's September 21 Letter at 1 ("That Mr. Tannin... produced the Gmail the government has claimed is its most probative piece of evidence is a bad fact for the government's case..."). The chronology according to Ms. Redlich, however, shows that the production of the G-Mail to BSAM came only after she raised with Tannin's counsel both the existence of the G-Mail and her intention to produce it immediately to BSAM. Therefore, Ms. Redlich's testimony is directly relevant to rebut any offer of evidence or suggestion by Tannin that his supposedly voluntary production of the G-Mail is proof that he lacked criminal culpability, consciousness of guilt or fraudulent intent. Put 1 The copy of the G-Mail eventually produced by Tannin shows it was printed on October 31, Tannin "question[s] the government's basis for claiming that [Ms. Redlich] would give [this] testimony," Tannin's September 21 Letter at 2, because he has not received any witness statements by Ms. Redlich pursuant to 18 U.S.C There is no basis for such an inference. Nothing in the Jencks Act requires the government to create or to transcribe witness statements for the convenience of the defense. It only requires the government to produce witness statements that exist. -2-

3 Case 1:08-cr FB Document 187 Filed 09/25/09 Page 3 of 6 simply, Ms. Redlich's testimony suggests that Tannin produced the G-Mail only after being advised that it was going to be produced anyway. The government's evidence will demonstrate that Tannin never disclosed the G-Mail until after Ms. Redlich's November 6, 2007 telephone call. Specifically, the government will offer Tannin's admissions in a September 12, 2007 interview with BSAM's counsel regarding his search for, and production of, relevant documents that: 1) he had searched for relevant documents, which was defined to include s and electronic files; 2) all of his files were in his office or in file cabinets right outside his office; 3) no other files existed outside his office; 4) he had conducted a comprehensive search for documents; 5) he was not aware of relevant documents that others might have had; and 6) he did not have a practice of automatically deleting s. Tannin did not mention the G-Mail, which at that time apparently still existed in electronic form in his G-Mail account. Ms. Redlich's testimony, particularly when corroborated by Tannin's admissions to BSAM, directly rebuts Tannin's argument that his supposedly voluntary production of the G-Mail to BSAM diminishes its probity or any tendency to establish culpability, consciousness of guilt and fraudulent intent on his part. Ms. Redlich's testimony therefore easily meets the Rule 401 "more probable or less probable" standard of relevance. Indeed, the relevance of this type of evidence has long been recognized by the Second Circuit. See, e.g., United States v. Massino, 546 F.3d 123, (2d Cir. 2008)(informant's testimony recalling co-conspirator's threats to murder cooperating witnesses' children relevant and admissible under Rules 401 and 403 to rebut argument by defense that informant's memory was unreliable); United States v. McClain, 108 Fed. Appx. 670, 2004 WL at *2 (2d Cir. 2004)(anonymous sent to defendant and others alleging defendant's investment program was a fraud relevant to rebut his claim of good faith); United States v. Khalil, 214 F.3d 111, 122 (2d Cir. 2000)(photographs of defendant brandishing a shotgun, wearing clothing associated with violent militants and assuming a posture of martyrdom relevant to rebut his claim of innocence); United States v. Loviti, 196 F.3d 322, 326 (2d Cir. 1999) (evidence of police officer-defendant's choking of another arrestee relevant to rebut his claim he unintentionally choked victim). Tannin's vague claim that Ms. Redlich's testimony is privileged is insufficient to meet his burden of showing the existence and applicability of a privilege. In re Grand Jury Investigation, 918 F.2d 374, 385 n.15 (3d Cir. 1990)(party -3-

4 Case 1:08-cr FB Document 187 Filed 09/25/09 Page 4 of 6 asserting privilege has burden of proving privilege's existence and applicability). Even assuming the validity of a joint defense agreement, nothing Ms. Redlich will say about her conversations with Tannin's counsel is subject to the attorneyclient privilege or the work product doctrine. 3 The facts about which Ms. Redlich will testify are not statements seeking or giving legal advice to a client, legal impressions, opinions or theories, or materials prepared in anticipation of litigation. Thus, there is no support for Tannin's claim that the government is trying to "muddy the waters by putting counsel's mental processes at issue." Ms. Redlich will not testify to any attorney mental processes protected by the work product doctrine. Similarly, the later agreement between Ms. Redlich and Tannin's counsel to produce the G-Mail to BSAM simultaneously is not subject to any privilege for the same reasons. Ms. Redlich's testimony is relevant and not subject to any privilege. It should be admitted. II. Evidence of Tannin's Deletion of His G-Mail Account is Relevant and Admissible On July 17, 2009, the government was advised by Google Inc. that on March 11, 2008 the user deleted the entire G-Mail account from which Tannin sent the G-Mail to Cioffi and McGarrigal. Tannin's September 21, 2009 Letter, Exhibit 1 at 3 (document obtained from Google stating in part "User deleted account on 11-Mar-2008"). Counsel for Google has confirmed that "User deleted account" means just that - that the G-Mail user or someone with access to the user's password deleted the G-Mail account. As a result, the contents of Tannin's account were gone when the court issued a search warrant for the account on the government's application. In the months preceding March 11, 2008, defendant Tannin knew that: 1) he was under investigation for violation of the federal securities laws; and 2) he was required to preserve 3 Ms. Redlich's testimony will establish this chain of events: 1) she was aware of an SEC request for production of relevant s from personal accounts; 2) that McGarrigal gave her the G-Mail on November 6, 2007; 3) that she spoke with Ms. Beattie on the telephone the same day to indicate her intention to produce the G-Mail to BSAM's attorneys; 4) that she had a second telephone call with Ms. Beattie later that day regarding the G-Mail; and 5) that she and Ms. Beattie together produced the G-Mail to BSAM's counsel on November 7,

5 Case 1:08-cr FB Document 187 Filed 09/25/09 Page 5 of 6 all evidence relating to the hedge funds at issue in this case, particularly evidence relating to the G-Mail. By March 11, 2008, defendant Tannin had received: 1) an evidence preservation notice from BSAM on June 19, 2007; 2) an oral admonition from BSAM's law firm on June 27, 2007, to retain all documents related to the hedge funds at issue in this case; 3) a request from the SEC for personal s related to the hedge funds; 4) an evidence preservation letter from the SEC on November 14, 2007; and 5) a subpoena from the SEC, issued on December 12, 2007, for all s related to the hedge funds. In addition, on February 29, 2008, counsel for Tannin met personally with the United States Attorney for the Eastern District of New York and tried to persuade him not to charge their client. The opening topic on their agenda was the G-Mail. After numerous other aspects of the case were discussed, the to-be-continued meeting ended with counsel returning to the G-Mail and again attempting to downplay its probative value. Eleven days later, Tannin deleted the G- Mail account. Three days after Tannin's spoliation on March 14, 2008 Tannin's attorneys again met with prosecutors in the U.S. Attorney s Office to submit innocent explanations for their client s conduct at BSAM. Tannin's claim that he did not destroy any evidence because his counsel supposedly preserved the contents of the G- Mail account is nonsensical. Even if he did preserve the contents of the G-Mail account, he has refused to produce those contents to the government. The contents of the G-Mail account - which Tannin was on repeated notice to preserve and which he knew were significant - are unavailable now due to his spoilation. Had Tannin not deleted the G-Mail account, in contravention of the SEC's and BSAM's instructions, the government would have that evidence. Tannin's deletion of the G-Mail account is relevant and admissible to show his guilt and consciousness of guilt. See, e.g., United States v. Burrous, 147 F.3d 111, 117 (2d Cir. 1998)(defendant's throwing box containing stolen cash out a window while being arrested relevant to show consciousness of guilt and stolen nature of money); United States v. Osorio Estrada, 751 F.2d 128, 132 (2d Cir. 1984)(defendant's changing of relevant dates in passport relevant to show consciousness of guilt); United States v. Mastropieri, 685 F.2d 776 (2d Cir. 1982)(attorney's removal of documents from his office to render them unavailable in court-ordered search of office relevant to show guilt and consciousness of guilt). In a last, desperate attempt to exclude this evidence, Tannin has thrown up clouds of dust in the form of vague and -5-

6 Case 1:08-cr FB Document 187 Filed 09/25/09 Page 6 of 6 unsupported threats of "significant difficulties" of "act-ofproduction and attorney-client privilege issues" that supposedly would "raise potential error of constitutional dimensions." 4 Tannin's September 21 Letter at 3. It would be difficult, if not impossible, for the Court to render an informed decision on Tannin's motion on the basis of nothing more than such scattershot allegations. Tannin's threat of "potential error of constitutional dimensions" does not clarify the issue or help the Court. Tannin's vague claims demonstrate why courts place the burden of showing the existence and applicability of a privilege on the party asserting the privilege. In re Grand Jury Investigation, 918 F.2d at 385 n.15. Tannin has utterly failed to meet his burden here and the Court should not entertain his vague claims and veiled threats of reversal. Tannin's destruction of his G-Mail account is relevant evidence of his guilt and should be admitted. III. Conclusion For the foregoing reasons, the government requests that the Court deny Tannin's motion to exclude Ms. Redlich's testimony and his motion to exclude evidence relating to his destruction of his G-Mail account. Respectfully submitted, BENTON J. CAMPBELL UNITED STATES ATTORNEY By: James G. McGovern Ilene Jaroslaw Patrick S. Sinclair Brian Sano Assistant U.S. Attorneys cc: Defense Counsel (via ECF) 4 The government's Curcio letter of this date seeks to address the potential constitutional matters. -6-