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.]
The case is US v. Petit et al., 19-cr-850 (Rakoff)
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