Deposition discovery fails to delay USFIA Ponzi case
A joint-stipulation filed by the SEC and Steve Chen on September 30th had asked for a delay in proceedings of four months.
Judge Klausner has rejected the rescheduling and preserved the original January 10th trial date.
At the heart of the requested delay is ongoing issues with discovery.
The SEC and Steve Chen have been working to complete discovery within the current deadline but … will not be able to do so.
The USFIA Receiver has also yet to complete accounting, which means the ‘the scope of USFIA’s business‘ has yet to be determined.
Currently the Receiver estimates USFIA conducted $180 million in Ponzi fraud through 64,000 affiliates.
To date the SEC and Chen have deposed three of the four witnesses cited in the SEC’s TRO filing.
Chen is seeking additional time to conduct discovery on the basis he
believes (there) are inconsistencies between the deposition testimony of those witnesses and the Declaration of Peter Del Greco, one of the SEC’s trial counsel.
Chen is seeking to depose Del Greco and two agents from the FBI and IRS.
Chen is currently engaged in ‘ongoing discussions with the United States Attorney’s Office regarding these depositions‘.
It is unlikely that Mr. Chen will receive approval (or denial) of his request to depose the agent witnesses before the current close of discovery.
The SEC have already signaled they will oppose the deposition of Del Greco.
Expert discovery is also cited as a possible reason for delay.
Currently the SEC have indicated they wish to call “at least one expert witness”. Chen has indicated he ‘may call as many as four expert witnesses‘.
New dates proposed by the SEC and Chen are as follows:
- Exchange initial expert disclosures and reports – December 14, 2017 (I believe a typo, should be 2016)
- Exchange of rebuttal expert reports – January 4, 2017
- Expert discovery cut-off date – January 18, 2017
- Motion cut-off date – February 17, 2017
- Pretrial conference – April 10, 2017
- Jury trial – May 9, 2017
In a October 4th order, Judge Klausner set the following dates:
- Discovery cut-off – November 2nd, 2016
- Motion cut-off date – October 26th, 2016
- Pretrial conference – December 19th, 2016
- Jury trial – January 10th, 2017
The SEC are expected to file a protective order seeking to bar Chen’s deposition of Peter Del Greco early this week.
Update 17th October 2016 – A Joint Stipulation has been filed, in which the SEC argue to quash Del Greco’s deposition notice. Steve Chen argues for it.
A hearing on the matter has been scheduled for November 8th.