| MiMedx Jury Convicted Both
Petit and Taylor Now Both Move for Acquittal
in SDNY
By Matthew
Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- ESPN
SDNY COURTHOUSE,
Jan 8 –William Taylor and
Parker H. Petit were charged
with conspiracy and securities
fraud with respect to
MiMedx.
On October 5 U.S.
District Court for the
Southern District of New York
Judge Jed S. Rakoff held a
pre-trial proceeding. Inner
City Press covered it, below.
On November
19, on the fourth day of jury
deliberations the MiMedx jury
came back with guilty
verdicts, and not guilty
verdicts, for both Petit and
Taylor, who was found guilty
of conspiracy, not guilty on
securities fraud. That seemed
consistent with trial
testimony. Inner City Press
wrote then, appeals to
follow, one assumes.
And now on
January 8, yes it's true:
motions for acquittal from
both Petit and Taylor. Petit
argues that the US failed to
present sufficient evidence
that MiMedx's recorded revenue
did not comply with GAAP.
Taylor says the US' Last-Ditch
Shift to a new Theory of
Wrongdoing requires
Vacatur. Appeals to
follow, for sure.
Here's how the US
Attorney's Office, past 2 pm
back on November 19, put it:
"PARKER H. “PETE” PETIT, the
former chief executive officer
of MiMedx Group, Inc.
(“MiMedx”), a publicly traded
biopharmaceutical company, was
convicted of securities fraud,
and WILLIAM TAYLOR, the former
chief operating officer of
MiMedx, was convicted of
conspiracy to commit
securities fraud, to make
false statements in SEC
filings, and to mislead the
conduct of audits."
On October 26,
the trial began, and Inner
City Press live tweeted it.
Now here
and below.
On November
16, the US Attorney's Office
wrapped up their rebuttal and
Judge Rakoff stepped into the
witness box to give
instructions:
Judge Rakoff just
said he'll deliver his
instructions from(plexiglass)
witness box, so he can take
off his mask. A juror is
late...
OK - juror has
arrived and MiMedx trial final
argument by US Attorney's
Office has begun: "They lied
under oath... Why did they
corrupt their positions? Out
of greed, for the money. Pete
Petit had $38 million in
MiMedx stock.
AUSA: "Return
versus repurchase, it's all
nonsense. Bill Taylor admits
this is the right of return
email. He used the word
repurchase, it's just proof of
his guilty conscience. Don't
be fooled."
Then after one
admonition to wrap it up, the
jury instructions began. Watch
this site.
On
November 10, an Atlanta-based
auditor of MiMedx, then and
now working for Cherry
Bekaert, under government
questions said that a $200,000
payment to Mark Brooks,
characterized as a bribe,
should have been discounted
from the reported earnings,
according to GAAP.
But on
November 11 under cross
examination, the auditor
admitted that John Cranston
was his main contact at
MiMedx, and was shown that
Cranston was on the e-mail
chain about the payment to
Mark Brooks. So shouldn't
Cranston have told the
auditor?
Inner City
Press live tweeted the
afternoon session on November
11, here:
Gov witness,
seemingly the last, is SEC
Financial Economist Carina
Shambarry. There was another
sidebar with Judge Rakoff
before she started. AUSA: Did
you review MiMedx? A: Yes.
AUSA: Who asked you?
A: The US
Attorney's Office... I looked
at 2015 purchase orders
Shambarry: This
is the inflated revenue of
MiMedx for the 4th quarter of
2015... inflated by
$2,990,675... that is, by
6.12%. They still missed
guidance by about $600,000.
Now comes cross
examination of Carina
Shambarry. Q: So this stock
sale by Mr Taylor was before
any allegation of wrongdoing,
right?
AUSA: Objection!
Judge Rakoff: Lay a
foundation.
Q: Were you given
any info about purchase orders
before the end of June 2015?
A: No Now counsel says they're
about to move on to another
topic, suggests breaking for
the day.
Judge Rakoff: I'm
disappointed, but I'll bear
up. Come to the sidebar. After
a time, to jury: The gov will
wrap up tomorrow. The defense
will put on a couple of
witnesses.
Judge Rakoff:
We'll have the government's
closing tomorrow afternoon,
defense's on Friday. You can
start deliberating sometime on
Monday. We need to keep the
pressure on. See you tomorrow
at 9:45. [Jury leaves] Judge
Rakoff, to lawyer: Let's make
some motions.
Defense: We do
have motions to make. Can we
take a five minute break?
Judge Rakoff: Sure. We'll deem
that these motions are being
made at the end of the
government's case. Thread will
continue.
Defense returns
with a Second Circuit
citation, 971 F.3d 380, about
when making further objections
would be unavailing - asks
Judge Rakoff if that's the
case here. It seems so. Talk
turns to how the jury should
be told about the power to
grant immunity.
AUSA arguing that
the evidence supports an
instruction on conscious
avoidance...
Judge Rakoff:
Some judges don't like counsel
to quote principles of law in
summation. I am not one of
those. Just make sure you
quote my instructions, and not
something you make up.
Judge Rakoff: You
can says, the Government
didn't meet its burden because
no evidence of X or Y. What
you cannot say is, They didn't
call Mr. Jones as a witness...
It's been a long day, and I
still have to teach at
Columbia."
On the
morning of November
12, the defense got
Ms. Shambarry to admit she
had not reviewed how bonuses
were paid to Petit
and Taylor in
2013 and 2015 - that is,
whether they would have
gotten the same bonus whether
or not they early-recognized
revenue. The cross
examinations were punctuated
by objections, many of them
sustained. But still
the point was made. Next up:
closing arguments.
Watch this
site.
On November
9, after the AUSA said now the
government might close its
case on November 11, Veterans
Day, Judge Rakoff said he had
noticed - and that he had
notice that the jurors did not
appear bored by focused. He
congratulated both sides'
lawyers and told them to keep
it up. So will we as the trial
winds down.
On the
morning of November 6, Bill
Taylor's lawyer cross examined
a government witness about why
he had not complained
internally if he thought the
deal with Mark Brooks' company
was wrong. It all got reported
to Pete [Petit], he answered,
adding that MiMedx General
Counsel Lexi Hayden did
whatever Petit said.
The
government on re-direct tried
to rehabilitate him, that he
had been afraid of Petit's
retaliation and had a family
to support. But what about
Taylor?
On the
afternoon of November 6, talk
turned to an informal
application for a loan from
Capital One by Jerry Morrison,
whose business was said to be
the sale of human tissue (for
medical purposes). After a
cooperator, or witness with a
Non Prosecution Agreement, the
AUSA said the government may
rest its case by the end of
next week. Judge Rakoff said
he'll draft jury instructions
and that the charging
conference shouldn't take more
than 72 hours, "bring your
sleeping bag." We'll continue
on this.
On the
morning of November 5, cross
examination of a government
witness who worked for
previous witness Carlton
continued, focusing on his
role as an "advocate" for Mark
Brooks, and his
characterization of the
$200,000 payment to Brooks as
being a bribe.
There were
diversions into a text message
about pizza -- "I like pizza
too much, that's my problem,"
the witness said, perhaps
ingratiating him to the jury.
Judge Rakoff told the jurors
to take 11 am to 12:05
pm for lunch, as he gave
a Zoom speech to NYU; he told
the lawyers to return at
12:01.
Day
5, Oct 30: Witness:
Brooks had a lot of
complaints, so I don't
remember what was per se
settled... We got the order
afterwards. Defense: Call up
Gov Exh 1018. Take a look at
this. This is an email from Mr
Petit to Mark Brooks, right?
Witness: Right.
We're back.
Carlton still on the stand. Q:
You see Mr. Carlton this email
says Mr Brooks had to forego
the stock, for the $200,000?
Carlton: Yes. Q: And Mr. Petit
was on the email, as you were,
and said - Judge Rakoff (to
jurors) This is for state of
mind
Q: You wrote that
the $200,000 to Mr. Brooks was
for lost business? Carlton:
Not the case. It was for the
stock.
Q: So you sent
Bill [Taylor]'s email to
Bassam? Carlton: Yeah because
he missed the first one.
Q: But Mr
Taylor's email said repurchase
the product. It does not say
returned.
AUSA:
Objection! Asked and answered!
Judge Rakoff:
I'll let it go for now... Have
a good weekend.
[On the
morning of October 30, Inner
City Press formally asked for
access to the government
exhibits in this US v. Petit
case. Watch this site.]
Day
4
The case is US v.
Petit et al., 19-cr-850
(Rakoff)
***
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