Drummond Crime Fraud Response

FILED
Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 1 of 43
2015 Sep-29 PM 06:02

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

Contains information designated as
Confidential Information under the
Protective Order.
DRUMMOND COMPANY, INC.S BRIEF REGARDING THE ISSUES AND

QUESTIONS RAISED BY THE COURT ON SEPTEMBER 3, 2015
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
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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TABLE OF CONTENTS
TABLE OF AUTHORITIES.................................................................................................................. iii
ARGUMENT .......................................................................................................................................1
I.
APPLICATION OF THE CRIME-FRAUD EXCEPTION TO COLLINGSWORTH. .................3
II.
APPLICATION OF THE CRIME-FRAUD EXCEPTION TO CONRAD & SCHERER ..............4

A.
There is no legal basis for separating Conrad & Scherer from Mr.
Collingsworth for purposes of the crime-fraud exception. ..........................5
B.
There is sufficient evidence to independently justify the application of the

crime-fraud exception to the firm. .............................................................13
C.
III.
IV.
1.
Conrad & Scherer is deemed to have knowledge of the payments

to Blanco, El Tigre and Samario as a matter of law. .....................13
2.
Conrad & Scherer is equally responsible for the fraud on this

Court. .............................................................................................17
If this Court has any doubt as to the application of the crime-fraud

exception to Conrad & Scherer, it should conduct an in camera review of
documents to determine whether there is a prima facie case of the firms
involvement in the crimes and fraud at issue.............................................19
THE CRIME-FRAUD EXCEPTION APPLIES TO COMMUNICATIONS IN OTHER

LITIGATION INVOLVING DEFENDANTS....................................................................22
A.
Misrepresentations in other litigation ........................................................22
B.
Allegedly privileged communications from these state-court cases are

related to the crimes and fraud here. ......................................................23
DEFENDANTS CRIMES AND FRAUD ARE CERTAINLY NOT OVER AND FIXED
THEY ARE CONTINUING..........................................................................................26
CONCLUSION...................................................................................................................................35
CERTIFICATE OF SERVICE ...............................................................................................................36
ii
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TABLE OF AUTHORITIES
Cases
Page(s)
American Cent. Life Ins. Co. v. First Natl Bank,

90 So. 294 (Ala. 1921).........................................................................................................7
Beck v. Deloitte & Touche, Deloitte, Haskins & Sells, Ernest & Young, L.L.P.,
144 F.3d 732 (11th Cir. 1998) .............................................................................................9
Byrne v. Nezhat,
261 F.3d 1075 (11th Cir. 2001) ...........................................................................................6
Chevron Corp. v. Salazar,
275 F.R.D. 437 (S.D.N.Y. 2011) .......................................................................................12
Chudasama v. Mazda Motor Corp.,
123 F.3d 1353 (11th Cir. 1997) ...........................................................................................6
Connecticut Fire Ins. Co. v. Commercial Nat. Bank of San Antonio,
87 F.2d 968 (5th Cir. 1937) .................................................................................................3
Cox v. Admr U.S. Steel & Carnegie, 17 F.3d 1386 (11th Cir.)
opinion modified on rehg, 30 F.3d 1347 (11th Cir. 1994)................................8, 11, 20, 21
CPR Assoc., Inc. v. Se. Penn. Chapter of Am. Heart Assn,
No. CIV. A. 90-3758, 1992 WL 229296 (E.D. Pa. Sept. 9, 1992) ......................................6
Craig v. A.H. Robins Co.,
790 F.2d 1 (1st Cir. 1986)..................................................................................................24
Curtis, Collins & Holbrook Co. v. United States,
262 U.S. 215 (1923).............................................................................................................7
Curtis v. Innerarity,
47 U.S. 146 (1848).............................................................................................................11
Dussouy v. Gulf Coast Inv. Corp.,
660 F.2d 594 (5th Cir. 1981) ...............................................................................................8
Elle v. Babbitt,
259 Or. 590, 488 P.2d 440 (Or. 1971) ...............................................................................12
Fed. Deposit Ins. Corp. v. Braemoor Associates,
686 F.2d 550 (7th Cir. 1982) .............................................................................................12
iii
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First Ala. Bank v. First State Ins. Co., Inc.,

899 F.2d 1045 (11th Cir. 1990) ...........................................................................................8
Grand Union Co. v. United States,
696 F.2d 888 (11th Cir. 1983) ...........................................................................................12
Gutter v. E.I. Dupont De Nemours,
124 F. Supp. 2d 1291 (S.D. Fla. 2000) ...................................................................... passim
Haines v. Ligget Group,
975 F.2d 81 (3d Cir. 1992).................................................................................................21
Helton v. AT & T Inc.,
709 F.3d 343 (4th Cir. 2013) .............................................................................................17
In the Matter of Grand Jury (OO-2H),
211 F. Supp. 2d 564 (M.D. Pa. 2002) ................................................................................25
In re Chevron Corp.,
633 F.3d 153 (3d Cir. 2011)...............................................................................................20
In re Grand Jury (G.J. No. 87-03-A),
845 F.2d 896 (11th Cir. 1988) .............................................................................................3
In re Grand Jury Investigation (Schroeder),
842 F.2d 1223 (11th Cir. 1987) ...............................................................................3, 24, 25
In re Grand Jury Investigation,
974 F.2d 1068 (9th Cir. 1992) ...........................................................................................20
In re Grand Jury Proceedings in Matter of Fine,
641 F.2d 199 (5th Cir. 1981) .............................................................................................12
In re Grand Jury Subpoena,
No. 10-127-02, 2012 WL 5587438 (E.D. Pa. Nov. 13, 2012)...........................................20
In re Grand Jury Subpoenas,
144 F.3d 653 (10th Cir. 1998) ...........................................................................................24
In re Harmon,
435 B.R. 758 (Bankr. N.D. Ga. 2010) .................................................................................6
In re Impounded Case (Law Firm),
879 F.2d 1211 (3d Cir. 1989).............................................................................................13
iv
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In re Sealed Case I,
676 F.2d 793 (D.C. Cir. 1982) .............................................................................................3
In re Sealed Case,
754 F.2d 395 (D.C. Cir. 1985) ...........................................................................................25
McAndrew v. Lockheed Martin Corp.,
206 F.3d 1031 (11th Cir. 2000) .......................................................................................8, 9
Smith v. Grand Bank & Trust of Florida,
193 F. Appx 833 (11th Cir. 2006) ......................................................................................5
Strang v. Bradner,
114 U.S. 555, 5 S.Ct. 1038 (1885).....................................................................................14
Tindall v. H & S Homes, LLC,
757 F. Supp. 2d 1339 (M.D. Ga. 2011) .............................................................................20
United States v. Moazzeni,
906 F. Supp. 2d 505 (E.D. Va. 2012) ................................................................................25
United States v. One Parcel of Real Estate,
852 F. Supp. 1013 (S.D. Fla. 1994) ...................................................................................12
United States v. Suarez,
820 F.2d 1158 (11th Cir. 1987) ...........................................................................................1
United States v. Zolin,
491 U.S. 554, 109 S. Ct. 2619 (1989)................................................................................20
Winant v. Bostic,
5 F.3d 767 (4th Cir. 1993) .................................................................................................12
Wolters Kluwer Fin. Serv. v. Scivantage,
564 F.3d 110 (2d Cir. 2009).................................................................................................6
Xanadu of Cocoa Beach, Inc. v. Zetley,
822 F.2d 982 (11th Cir. 1987) .....................................................................................15, 16
Statutes and Rules
Page(s)
Ala. Code 10A-8-3.05(a) ............................................................................................................10

Ala. Code 10A-8-1.03.................................................................................................................10
Ala. Code 10A-8-3.01(1) ............................................................................................................10
v
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Fed. R. Civ. P. 11(c)(1)....................................................................................................................6

Fla. Stat. Ann. 620.615 ...............................................................................................................16
Fla. Stat. Ann. 620.8102(6).........................................................................................................10
Fla. Stat. Ann. 620.8104 Comments ...........................................................................................10
Fla. Stat. Ann. 620.8301(1).........................................................................................................10
Fla. Stat. Ann. 620.8305(1).........................................................................................................10
Other Authorities
Page(s)
3 William Meade Fletcher,

Fletcher Cyclopedia of the Law of Private Corporations 790 (1994)....................8, 9, 17
18B Am. Jur. 2d Corporations 1497 ..........................................................................................17
Mechem, A Treatise on the Law of Agency, 2d ed. vol. 2, 1802 (1982).......................................9
Partnership Law & Practice 8:34 (2014) .....................................................................................9
Wright & Miller, 8B Fed. Prac. & Proc. Civ. 2177 (3d ed.)......................................................17
vi
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We begin by noting that the privilege is not a favored evidentiary concept in the
law since it serves to obscure the truth, and it should be construed as narrowly as
is consistent with its purpose.
United States v. Suarez, 820 F.2d 1158, 1160 (11th Cir. 1987). Despite Defendants contentions
that the attorney-client privilege and work-product doctrines are so sacrosanct as to be
essentially impenetrable, see, e.g., Doc. 391 (Sept. 1-3 Hrg. Tr.) at 762, neither privilege is
favored under the law as they are both in derogation of the most sacred principle of the courts:
the search for the truth. Drummond has been attempting to discover the truth about Defendants
witness payments for over four years, only to be met with obfuscation and outright lies. What is
worse, this Court has been lied to repeatedly during that time.
The Court has already heard evidence on the crime-fraud issue, and Drummond submits
it is more than enough to invoke the crime-fraud exception. The Court did not request reargument as to whether a prima facie showing has been made concerning the crime-fraud
exception as it applies to Mr. Collingsworth, so Drummond does not present such argument
herein. Rather, Drummond writes to respond to the specific questions asked by the Court:
1.
Assuming the Court finds the crime-fraud exception applicable to Mr.

Collingsworth, what steps should be taken in terms of review and production of
documents? Doc. 391 (Sept. 1-3 Hrg. Tr.) at 753:19-754:4.
2.
Assuming the Court finds the crime-fraud exception applicable to Mr.

Collingsworth, how does that impact claims of privilege relied upon by Conrad &
Scherer? Id. Alternatively, if a prima facie showing has not been made lifting the
privilege as to Conrad & Scherer, has the lower threshold showing been made
such that an in camera review should be done to assist the Court in determining
whether a prima facie showing can be made as to the law firm? Id. at 754:5-15.
3.
Assuming the crime-fraud exception applies, to either or both Defendants, how

does that impact the review of allegedly privileged documents from other
litigation where similar misrepresentations have been made? Id. at 754:16-23.
4.
And finally, the Court requested Drummond to respond to Defendants contention

that the alleged crimes or fraud at issue are over and fixed. Id. at 769:16-18.
Most of the questions posed by the Court deal with whether the crime-fraud exception
1
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should be applied to Mr. Collingsworth (the agent), but not Conrad & Scherer (the principal).
There is no dispute that the numerous representations regarding the scope of Defendants witness
payments were made by and on behalf of both Defendants.1 There is also no question that those
representations were categorically false.2 The question to be answered as it relates to Conrad &
Scherers fraud on the court is: under the law, did Conrad & Scherer, an artificial legal entity,
know those representations were false? The answer is a resounding, Yes.
There is no factual or legal basis on which to draw a line between the Defendants for
purposes of the crime-fraud exception. The undisputed evidence, discussed in detail below,
establishes that Collingsworth acted as an agent and partner of Conrad & Scherer at all times
relevant to the crime-fraud inquiry. Indeed, Collingsworth continues to act in that capacity to
this very day, and Conrad & Scherer has done absolutely nothing to separate itself from him. On
September 17, 2015, Collingsworth and Conrad & Scherer served Drummond with an
application for a sixty day extension of time in which to file a petition for certiorari with the
United States Supreme Court in the Balcero case. Ex. 1. In that petition, Collingsworth and
Conrad & Scherer will ask the highest court in this country to reverse this Courts dismissal of
the Balcero case. In doing so, Collingsworth and Conrad & Scherer will rely on an appellate
record that, because of the very fraud at issue, is completely devoid of any evidence that the
witnesses in that case were paid hundreds of thousands of dollars.
Collingsworth was and still is Conrad & Scherers designated agent for the purpose of the
1
Doc. 389 (Sept. 1-3 Hrg. Tr.) at 199:23-200:1 (Q Now,

again, this brief, like everything else in this case, every other filing has been filed on behalf of both defendants,
correct, yourself and Conrad & Scherer? A [Mr. Collingsworth] It appears to be so, yes.).
2
Doc. 372 (June 15, 2015 Hrg. Tr.) at 12:21-13:5 (with respect to the representations that there were only three
witnesses paid in the Drummond cases and it was only in response to a security threat, we now know that those
representations were categorically false); Doc. 390 (Sept. 1-3 Hrg. Tr.) at 454:3-4 (THE COURT: . . . Thats the
accurate way, I think, to characterize it. Its not a mistake. It was a misrepresentation.).
2
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Balcero case, and through this agency relationship Conrad & Scherer is still seeking to gain a
tremendous financial reward. The rule then to be applied is that the principal cannot take the
benefit of his agents act without taking also the burdens resulting from the agents knowledge
and intentions. Connecticut Fire Ins. Co. v. Commercial Nat. Bank of San Antonio, 87 F.2d
968, 969 (5th Cir. 1937) (citations omitted).
I.
APPLICATION OF THE CRIME-FRAUD EXCEPTION TO COLLINGSWORTH

The Court first requested briefing on the following question: First, if I decide the crime-
fraud exception applies with respect to Mr. Collingsworth, what steps should I take after that?
Doc. 391 (Sept. 1-3 Hrg. Tr.) at 753:19-21. The answer is relatively straightforward. All
allegedly privileged documents and communications in any way related to Defendants witness
payment scheme, and their representations to Drummond, this Court, and other courts about such
payments, should be reviewed in camera to identify documents that relate to the crimes and
fraud at issue.3 In re Grand Jury (G.J. No. 87-03-A), 845 F.2d 896, 898 (11th Cir. 1988)
(citation omitted). Whether a document or communication is related to a crime or fraud should
not be interpreted restrictively. In re Grand Jury Investigation (Schroeder), 842 F.2d 1223,
1227 (11th Cir. 1987).
Furthermore, the determination whether the requested material is
sufficiently related to the [crimes and fraud] must take into account that [Drummond] does not
know precisely what the material will reveal or how useful it will be. Id. (citing In re Sealed
Case I, 676 F.2d 793, 814 n.83 (D.C. Cir. 1982)).4
All documents related to witness bribery, suborning perjury, and Defendants fraud on
As stated previously, the specific crimes at issue are witness bribery and suborning perjury. The fraud at issue is
the egregious fraud on Drummond and the Court perpetrated by the Defendants in both Balcero and this case.
4
Drummond previously briefed the issue of what related to i.e., the second prong of the Schroeder test means
in the context of the crime-fraud exception. Doc. 355 at 13-21. Drummond does not reiterate those arguments here,
but rather incorporates them by reference.
3
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Drummond and the Court should be produced to Drummond over Defendants work product and
attorney-client privilege objections. Examples of documents that relate to the crimes and fraud
at issue include the following:
II.
All documents and communications relating to payments to witnesses, as well

as documents and communications relating to the allegations, testimony and
credibility of those witnesses.
This includes communications between
Collingsworth and third parties, such as Secure Pointe, Albert van Bilderbeek and
litigation financiers;
All documents and communications relating to Ivan Otero and Francisco

Ramirez and their dealings with witnesses (or their families, lawyers, agents,
representatives or intermediaries);
All documents and communications relating to the disclosure or non-disclosure

of witness payments in Balcero and this defamation case;
All documents and communications up to November 17, 2014 relating to the

disclosure or non-disclosure of the payments to El Tigre and Samario. This
includes communications between Collingsworth and his counsel in this case, and
specifically includes all communications concerning the redaction of documents
to hide these payments as well as communications regarding the deps in the can
email which was printed by Conrad & Scherer on June 25, 2014 and provided to
counsel;
All documents and communications up to January 9, 2015 relating to the

disclosure or non-disclosure of the payments to Blanco. This includes
communications between Collingsworth and his counsel in this case.
APPLICATION OF THE CRIME-FRAUD EXCEPTION TO CONRAD & SCHERER

The Court next requested briefing on the issue of whether a sufficient showing has been
made to invoke the crime-fraud exception as it relates to Conrad & Scherer, or, alternatively,
whether a sufficient showing has been made to trigger an in camera review to inform the Courts
decision on whether the crime-fraud exception applies as to the law firm. First, there is no
precedent for the proposition that, in the crime-fraud context, the hornbook law of agency no
longer applies. Rather, the knowledge, intent, and actions of Mr. Collingsworth (Conrad &
Scherers designated agent) are, as a matter of law, also the knowledge, intent, and actions of
4
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Conrad & Scherer for purposes of the crime-fraud analysis. Second, even if the Court were
inclined to look beyond Mr. Collingsworth, the evidence reflects substantial involvement by
numerous other members of Conrad & Scherer in the witness payments at issue, and the true
scope of the payments (which Conrad & Scherer undisputedly misrepresented to Drummond and
this Court) is apparent from the firms own business records. Third, at the very least, there has
been a sufficient showing as to Conrad & Scherer to merit an in camera inspection to inform the
Courts decision as to application of the crime-fraud exception.
A.
There is no legal basis for separating Conrad & Scherer from Mr.
Collingsworth for purposes of the crime-fraud exception.
Defendants will no doubt repeat their refrain that [b]ad faith cannot be imputed to the
law firm, which is a separate party in this case, Doc. 364 at 2, and therefore the application of
the crime-fraud exception to Collingsworth has no bearing on whether it also applies to the firm.
See also
Defendants are wrong for a multitude of reasons.

As a threshold matter, none of the cases Defendants cited in support of this proposition
address the crime-fraud exception.
Doc. 282 (Defs Corrected Responses to Drummonds
Proposed Findings of Fact) at pp. 224-226. Two of the cases do not even discuss the imputation
of bad faith to a firm for actions of one of its partners. The two cases that do contain such a
discussion involve law firms or partners in the practicing context, not as parties: 5
Even in the context of practicing attorneys and sanctions (as opposed to the applicability of the crime-fraud
exception to an attorney and law firm involved as parties to a litigation), the Eleventh Circuit has found significant
in the analysis of the bad faith of the law firm that the violating attorney was the only attorney from the firm
involved in the case and was terminated from the firm during the litigation. Smith v. Grand Bank & Trust of
Florida, 193 F. Appx 833, 838-39 (11th Cir. 2006). This is a far cry from the facts of this case, as numerous
Conrad & Scherer attorneys and employees were involved in the payments to Balcero witnesses, and Mr.
Collingsworth is still Conrad & Scherers designated agent for prosecuting the Balcero case. Notably, despite
Defendants argument to the contrary, courts in the Eleventh Circuit have imputed the bad faith misconduct of a
5
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Byrne v. Nezhat, 261 F.3d 1075, 1123 (11th Cir. 2001), held that sanctionable
conduct by an attorney cannot automatically be imputed to that attorneys client
where there was no evidence that the client knew that her attorney was pursuing a
frivolous or baseless claim. There is no discussion whatsoever of the imputation
of bad faith to a law firm based on the conduct of one of its partners. This is also
inconsistent with the law of the crime-fraud exception, which can be applied to
vitiate the attorney-client privilege even if the client did not know the attorney
was engaging in a crime or fraud. See pp. 12-13, infra.
Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1371 (11th Cir. 1997),
reversed terminating sanctions against a defendant because the district court failed
to recognize that compliance with the discovery requests at issue was literally
impossible for Mazda. There is no discussion whatsoever of the imputation of
bad faith to a law firm based on the conduct of one of its partners.
Wolters Kluwer Fin. Serv. v. Scivantage, 564 F.3d 110, 114 (2d Cir. 2009),
affirmed a sanction against a senior partner representing the plaintiff for the
improper use of a Rule 41 voluntary dismissal and disregard of a Protective
Order, but reversed the imposition of sanctions against the firm because the
district court did not make a finding that the firm acted in bad faith.
CPR Assoc., Inc. v. Se. Penn. Chapter of Am. Heart Assn, No. CIV. A. 90-3758,
1992 WL 229296, at *11 (E.D. Pa. Sept. 9, 1992), again in the practicing context,
the court found that neither the attorney (Mr. Wiles) nor his firm (Stevens & Lee)
should be sanctioned under Rule 37 or the courts inherent power because the
court did not find that they had acted in bad faith. The court did impose sanctions
against Wiles under Rule 11, but noted that Defendants do not seek Rule 11
sanctions against the law firm of Stevens & Lee. Id. at *5.6
Defendants have not cited any authority holding that Collingsworths actions and knowledge are
not attributable to the firm for purposes of the application of the crime-fraud exception.
lawyer to his law firm in the practicing context. See In re Harmon, 435 B.R. 758, 765 (Bankr. N.D. Ga. 2010) (In
light of the Local Bankruptcy Rules and based on the parties testimony, the Court finds that Ms. Hong and Mr.
Black acted in bad faith and that their actions should be imputed to the Semrad law firm.). But as this Court has
recognized, the issue of Conrad & Scherers bad faith for purposes of sanctions is not yet before the Court. The
Court is determining the crime-fraud exception, and deciding what additional documents can be discovered and used
to inform the Courts future analysis of Conrad & Scherers bad faith. Doc. 390 (Sept. 1-3 Hrg. Tr.) at 464:15-465:6
(THE COURT: . . . Mr. Collingsworth [was] kind of the one running the show, even on behalf of the parties. MR.
WELLS: On behalf of the firm. THE COURT: Yes, the parties, the firm and himself. Now, that does implicate
the firm. I understand your point there. That may implicate the firm as far as crime-fraud. It may not implicate the
firm as far as sanctions. I just dont know. But were not there yet. What Im trying to do is bifurcate this process
where we decide crime-fraud first, and if youre entitled to that discovery, that informs you better about your
argument about sanctions. . . .).
6
The CPR Assoc. case was also decided prior to the 1993 amendments to Rule 11, which now provides that
[a]bsent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its
partner, associate, or employee. Fed. R. Civ. P. 11(c)(1) (emphasis added).
6
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Indeed, such a proposition is wholly contrary to well-established principles of agency. It

is hornbook law that the knowledge and intent of an agent who commits a fraud while acting in
the line and scope of his agency are imputed to the principal. See Curtis, Collins & Holbrook
Co. v. United States, 262 U.S. 215, 222-24 (1923) (knowledge and intent of agent who secured
fraudulent titles was imputed to his principal regardless of whether, as between him and the
company, in securing fraudulent titles for the company, he was violating his instruction);
Gutter v. E.I. Dupont De Nemours, 124 F. Supp. 2d 1291, 1312 (S.D. Fla. 2000) (knowledge and
intent of agents was fully imputable to their principal, Dupont, in finding the crime-fraud
exception applied to Dupont); American Cent. Life Ins. Co. v. First Natl Bank, 90 So. 294, 294
(Ala. 1921) ([W]hen, in the course of his employment, an agent acquires knowledge or receives
notice of any fact material to the business he is employed to transact, his principal is deemed to
have notice of such fact.). Mr. Collingsworth committed the underlying acts that form the basis
for the application of the crime-fraud exception witness payments and misrepresentations to
this Court while acting within the line and scope of his employment at Conrad & Scherer.
Accordingly, a finding that the crime-fraud exception applies to Collingsworth means that it also
applies to Conrad & Scherer. Id.
The Gutter case illustrates exactly why Defendants argument to the contrary is
unavailing.
Defendants new
position that Mr. Collingsworths conduct cannot be imputed to Conrad & Scherer for purposes
of the crime-fraud exception is not only unsupported, it is irreconcilable with the exact opposite
position Defendants argued to this Court a year ago.
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Similar to Conrad & Scherer in this case, the defendant in Gutter Dupont argued that
the knowledge and fraudulent intent of both its in-house counsel and its outside attorneys could
not be imputed to it for purposes of the crime-fraud exception:
DuPont argues that the Special Master erred by setting forth theories of
potential fraud based on erroneous legal principles of imputed knowledge.
Specifically, DuPont contends that the Special Masters discussion of the
imputation of [DuPonts outside counsel at Alston & Bird, LLP]s knowledge and
of in-house counsels knowledge to other attorneys and to DuPont, as discussed
on pages 13 15 of the October 13, 1998 Report and Recommendation, is legally
flawed.
Gutter, 124 F. Supp. 2d at 1309. Relying on basic principles of agency, the Gutter court rejected
this argument, and held that the crime-fraud exception applied to allow discovery of DuPonts
purportedly privileged communications and documents:
Under basic agency principles, the acts of a corporations agents are considered to
be those of a single legal actor. McAndrew v. Lockheed Martin Corp., 206 F.3d
1031, 1036 (11th Cir. 2000) (citing Dussouy v. Gulf Coast Inv. Corp., 660 F.2d
594, 603 (5th Cir. 1981)). Generally, a corporation (principal) will be vicariously
responsible for the wrongful acts of its employees (agents) when the acts are: (1)
related to and committed within the course of employment; (2) committed in
furtherance [of the business] of the corporation; and (3) authorized or
subsequently acquiesced in by the corporation. Cox v. Administrator United
States Steel & Carnegie, 17 F.3d 1386, 140607 (11th Cir. 1994) (discussing
respondeat superior liability under RICO). Thus, a corporation is charged with
constructive knowledge, regardless of its actual knowledge, of all material facts of
which its officer or agent receives notice or acquires knowledge while acting
within the course of employment and within the scope of his or her authority,
even though the officer or agent does not in fact communicate the knowledge to
the corporation. See 3 William Meade Fletcher, Fletcher Cyclopedia of the Law
of Private Corporations 790 (1994). The law conclusively presumes that the
agent has disclosed the knowledge or information to his or her principal, and
charges the principal accordingly. Id. One of the justifications advanced for this
rule is that the agent, while acting within the scope of his agency is, as to matter
embraced within the agency, the principle himself or the alter ego of the principal.
See Holmes, The Common Law, 232 (1890). First Ala. Bank v. First State Ins.
Co., Inc., 899 F.2d 1045, 1061 n.8 (11th Cir. 1990). Courts impose constructive
knowledge upon a principal to avoid the injustice which would result if the
principal could have an agent conduct business for him and at the same time
shield himself from the consequences that would ensue from knowledge of
conditions or notice of the rights and interests of others had the principal
8
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transacted his own business in person. See id. (citing Mechem, A Treatise on the
Law of Agency, 2d ed. vol. 2, 1802 (1982)). The knowledge necessary to
adversely affect the corporation need not be possessed by a single corporate
agent; the cumulative knowledge of several agents can be imputed to the
corporation. 3 Fletcher, Fletcher Cyclopedia at 790. Without such an
interpretation, corporations could avoid the adverse implications of the rule by
restricting the intracorporate flow of information. Id.
Id. See also Beck v. Deloitte & Touche, Deloitte, Haskins & Sells, Ernest & Young, L.L.P., 144
F.3d 732, 736 (11th Cir. 1998) ([T]he knowledge of a corporate officer whose fraud or
misbehavior brings short-term gain to the corporation, or merely injures a third party, is imputed
to the corporation, even if the officers misbehavior ultimately causes the corporations
insolvency.); McAndrew v. Lockheed Martin Corp., 206 F.3d at 1039 ([T]he original purpose
of the corporate entity fiction was to expand rather than shrink corporate responsibility by
making a corporation answer for the negligent acts of its agents. [. . .] The fiction was never
intended to prohibit the imposition of criminal liability by allowing a corporation or its agents to
hide behind the identity of the other.) (citations omitted).
Although often discussed by courts in the context of corporations, these same principles
of agency apply equally to a partnership such as Conrad & Scherer. See United States v. A & P
Trucking Co., 358 U.S. 121, 126-27 (1958) (finding the same principles applicable to corporate
criminal liability for acts of their agents apply to partnerships: The business entity cannot be
left free to break the law merely because its owners, stockholders in the Adams case, partners in
the present one, do not personally participate in the infraction. . . . We hold, therefore, that a
partnership can violate each of the statutes here in question quite apart from the participation and
knowledge of the partners as individuals.); Partnership Law & Practice 8:34 (2014) (Because
each partner is a general agent of the partnership, a partners knowledge is treated, in most cases,
as knowledge by the partnership. If a partner acts for the partnership with knowledge, that
9
{B2062211}
knowledge is imputed to the partnership. . . . [K]nowledge acquired while a partner, even if not
then present to his mind, is imputed to the partnership.) (emphasis added).7
Assuming that the crime-fraud exception applies to Collingsworth, the undisputed
evidence establishes that Collingsworth was, at all relevant times, acting in the line and scope of
his authority as a partner at Conrad & Scherer. Doc. 282 at 76 (undisputed that Collingsworth
has been the Managing Partner of the firms Washington, D.C. office since 2008); Doc. 390
(Sept. 1-3 Hrg. Tr.) at 413:8-21; 414:17-24. The firm specifically delegated to him the authority
to prosecute Balcero.
Id. at 423:17-21 (Q. And you said that you delegated to Mr.
Collingsworth responsibilities in that case primarily, to be primarily responsible? A. More than

primary, but, yes, he ran the case. It was his case.); id. at 424:19-21 (Q. Mr. Collingsworth
was given that authority by you as managing partner and by the law firm? A. Yes, sir.). He
was therefore unquestionably acting within the scope of his agency when paying witnesses, and
concealing those payments, in his prosecution of the Balcero case. Collingsworth was acting for
the benefit of the firm by prosecuting claims against Drummond which, if successful, will result
in a financial benefit for the firm. Id. at 423:1-16; 425:3-6. In that capacity, Collingsworth
offered, confirmed and facilitated payments to witnesses, including Blanco, Samario and El
Tigre, and he therefore indisputably possessed knowledge of the fact that Blanco, Samario and El
Tigre were paid. That knowledge is also the knowledge of Conrad & Scherer, which as an entity
can only act through its agents.
Indeed, the partnership acts of both Florida and Alabama explicitly state that principals of agency apply to
partnerships. Fla. Stat. Ann. 620.8104 Comments (The principles of law and equity supplement RUPA unless
displaced by a particular provision of the Act. [. . .] These supplementary principles encompass . . . the law of
agency); see also Fla. Stat. Ann. 620.8301(1) (Each partner is an agent of the partnership for the purpose of its
business.); Ala. Code 10A-8-3.01(1) (same); Fla. Stat. Ann. 620.8305(1) (partnership liable for the misconduct
of its partners acting in the ordinary course of business); Ala. Code 10A-8-3.05(a) (same); Fla. Stat. Ann.
620.8102(6) (knowledge of a partner is effective immediately as knowledge of the partnership); Ala. Code 10A8-1.03 (same).
10
{B2062211}
Moreover, Conrad & Scherer has done absolutely nothing to separate itself from
responsibility for Mr. Collingsworths actions as its agent. To the contrary, Conrad & Scherer is
still allowing Mr. Collingsworth to act as its agent in continuing to prosecute the Balcero case in
the highest court in the land. Regardless of whether the Court believes Conrad & Scherer had its
head buried in the sand previously, it is now indisputably aware of Mr. Collingsworths conduct
in Balcero and in this case, but it is still maintaining, and hoping to benefit from, the agency
relationship.8 A principal cannot ratify a transaction of his agent in part, and repudiate it as to
the rest. Curtis v. Innerarity, 47 U.S. 146, 162 (1848); see also Cox v. Admr U.S. Steel &
Carnegie, 17 F.3d 1386, 1409 (11th Cir.) opinion modified on rehg, 30 F.3d 1347 (11th Cir.
1994) (A reasonable jury could infer that the Unions failure to act, after having been placed on
notice of the negotiators betrayal by the allegations, constituted ratification of their
misconduct.).
Under these circumstances, Conrad & Scherer is charged with constructive knowledge,
regardless of its actual knowledge, of all material facts of which its officer or agent receives
See Doc. 390 (Sept. 1-3 Hrg. Tr.) at 425:3-12 (Q. And Mr. Collingsworth and you and other members of the firm
were going to benefit in the event there had been a recovery [in Balcero]? A. Thats right. Q. But in the event Mr.
Collingsworth does something wrong, it is not the firm or you. Its only Mr. Collingsworth. Is that what youre
saying? A. Sir, with respect to sanctions and bad faith? Q. Yes. A. Yes, thats exactly right.).
11
{B2062211}
notice or acquires knowledge while acting within the course of employment and within the scope
of his or her authority, even though the officer or agent does not in fact communicate the
knowledge to the corporation.
Gutter, 124 F. Supp. 2d at 1309.
Stated differently,
[k]nowledge of or consent to an illegal act may be imputed to a partnership or corporation only

when the knowledge was obtained or the consent given by an agent acting within the scope of his
employment and for the benefit of the partnership or corporation. United States v. One Parcel
of Real Estate, 852 F. Supp. 1013, 1039 (S.D. Fla. 1994) (citing Grand Union Co. v. United
States, 696 F.2d 888, 891 (11th Cir. 1983)). Applying these well-settled legal principles to the
facts, a finding that the crime-fraud exception applies to Collingsworth necessarily means that it
also applies to the firm.9
Finally, federal courts uniformly hold that the crime-fraud exception is not defeated by
the claimed or actual ignorance of the crime or fraud by one holder of the privilege. For
example, the crime-fraud exception applies even where an attorney is totally ignorant of the
clients intent to commit a crime or fraud. See In re Grand Jury Proceedings in Matter of Fine,
641 F.2d 199, 203 (5th Cir. 1981) (crime-fraud exception applies to pierce the attorney-client
privilege regardless of whether the attorney knows his clients true motivations). Similarly,
the crime-fraud exception applies where a lawyer commits a crime or perpetrates a fraud without
the knowledge of his or her client. Chevron Corp. v. Salazar, 275 F.R.D. 437, 452 (S.D.N.Y.
2011) ([E]ven though the privilege belongs to the client, it may be pierced by wrongdoing of
9
Other federal circuit courts are in accord. See Winant v. Bostic, 5 F.3d 767, 775 (4th Cir. 1993) (Therefore any
fraud committed by Bostic while carrying out the ordinary course of the partnerships business is imputable to Page
who is thus liable for damages to the same extent that Bostic is.); Fed. Deposit Ins. Corp. v. Braemoor Associates,
686 F.2d 550, 557 (7th Cir. 1982) (This is not to say that the actual violation of the Illinois Banking Act was
authorized; we accept the district courts finding that the other venturers did not know of any such violation. But
section 13 of the Uniform Partnership Act requires only that the partner who commits the wrong be acting with the
authorization of his partners when he does so - not that the violation itself be authorized, see Elle v. Babbitt, 259 Or.
590, 488 P.2d 440, 446-47 (1971) - and Paul Bere was acting with that authorization when he committed the
violation; he was not off on some frolic of his own.).
12
{B2062211}
the attorney, even without the knowledge or intent of the client.) (collecting cases); In re
Impounded Case (Law Firm), 879 F.2d 1211, 1213-14 (3d Cir. 1989) (It is not apparent to us
what interest is truly served by permitting an attorney to prevent this type of investigation of his
own alleged criminal conduct by asserting an innocent clients privilege with respect to
documents tending to show criminal activity by the lawyer. On the contrary, the values
implicated, particularly the search for the truth, weigh heavily in favor of denying the privilege
in these circumstances.); see also Doc. 355 at Section I. Conrad & Scherer cannot defeat the
application of the crime-fraud exception by claiming ignorance of crimes or fraud perpetrated by
Collingsworth the Managing Partner of its Washington, D.C. office.
It is undisputed that Mr. Collingsworth and Conrad & Scherer made innumerable
misrepresentations to this Court regarding their witness payments. The only question is: who
knew what and when. To allow Conrad & Scherer, an artificial legal entity, to disclaim the
knowledge of its designated agent would be to turn the law of agency and imputed knowledge on
its head.
For all of these reasons, a finding that the crime-fraud exception applies to
Collingsworth necessarily equates to a finding that it applies to Conrad & Scherer.10

B.
There is sufficient evidence to independently justify the application of the

crime-fraud exception to the firm.
Assuming for the sake of argument that more than Mr. Collingsworths knowledge must
be shown to apply the crime-fraud exception to Conrad & Scherer, there is nevertheless
overwhelming independent evidence warranting its application to the firm.
1.
Conrad & Scherer is deemed to have knowledge of the payments to

Blanco, El Tigre and Samario as a matter of law.
As explained supra in Section II-A, the law conclusively presumes that whatever
10
Indeed, if Conrad & Scherer were the sole defendant, the law certainly would not exonerate the partnership for the
misconduct that has occurred here.
13
{B2062211}
knowledge Collingsworth acquires regarding firm business while acting in the line and scope of
his duties as a partner in the firm is imputed to the firm. See Strang v. Bradner, 114 U.S. 555,
561, 5 S.Ct. 1038 (1885) (denying a discharge in bankruptcy to two innocent partners of a
fraudulent businessman because if, in the conduct of partnership business, and with reference
thereto, one partner makes false or fraudulent misrepresentations of fact to the injury of innocent
persons who deal with him as representing the firm, and without notice of any limitations upon
his general authority, his partners cannot escape pecuniary responsibility therefor upon the
ground that such misrepresentations were made without their knowledge). But Collingsworth
was not some rogue agent. He explicitly informed the firm who he was paying and how much.
And the firm executed upon those instructions. The undisputed facts show that in May 2011,
when the payments to El Tigre and Samario were being set up, Mr. Collingsworth gave Bill
Scherer Conrad & Scherers Managing Partner and his son Billy Scherer (also a partner)
written notice that Samario and El Tigre were being paid. Doc. 174-6 (the deps in the can
email). Bill Scherer billed time in the Balcero case for reviewing this written notification. Doc.
390 (Sept. 1-3 Hrg. Tr.) at 421:9-422:12.11 Billy Scherer commissioned a legal memo on the
propriety of paying witnesses, which he received five days after his receipt of the deps in the
can email. Doc. 391 (Sept. 1-3 Hrg. Tr.) at 705:18-707:6.
The firms Chief Financial Officer and Firm Manager Richard Drath was also
provided with this written notification of the payments to El Tigre and Samario. Doc. 174-6.
11
Defendants have withheld

hundreds, if not thousands, of documents relating to witness payments on claims of privilege or work product.
Drummond fully expects that those documents will further belie Defendants claim that they paid witnesses for
security, and will instead show that they were paid for the substance of their testimony against Drummond.
14
{B2062211}
see also Doc.

390 (Sept. 1-3 Hrg. Tr.) at 436:12-19 (A. [. . .] They are firm expenditures that were approved.
[. . .] the firm has paid those as part of its business.). 12
Yet, Defendants claim the fact that the firm was paying over $30,000 a year to El Tigre
and Samario was of so little consequence that it did not even register with Bill Scherer. They
then extrapolate that incredible position to argue that the firm, as a legal entity, had no
knowledge of these payments, and therefore could not have known the representations to this
Court concerning the payments were not true.
. This
finds no support in the law.

Knowledge of or notice to a partner pertaining to a matter concerning partnership
affairs is imputed to the partnership. Xanadu of Cocoa Beach, Inc. v. Zetley, 822 F.2d 982, 985
12
Other Conrad & Scherer employees involved in processing the monthly payments to El Tigre and Samario include
Victoria Ryan (Mr. Collingsworths former Legal Assistant at Conrad & Scherer), Doc. 174-5, Susanna Tellez,
id., Janette Perez, id., Lorraine Safarti, id., and Catherine Salomon. Id.; see also Doc. 390 (Sept. 1-3 Hrg. Tr.) at
440:6-7 (identifying Catherine Salomon as an employee . . . in the accounting department at Conrad & Scherer).
15
{B2062211}
n.1 (11th Cir. 1987) (quoting Fla. Stat. Ann. 620.615). Not only did Mr. Collingsworth know
that El Tigre and Samario were being paid, but at least two other partners of the firm did as well:
Managing Partner Bill Scherer and his son, Billy Scherer. The firm CFO was also informed in
writing of the payments, and approved the payment of firm funds on a monthly basis for years.
Defendants have not provided, and likely cannot provide, the Court with any legal authority
finding that a partnership is able to disclaim the knowledge of its partners and other agents in
circumstances like these.
For substantially the same reasons, the firm is also deemed to have knowledge of the
payments to Blanco.
Again, acting in the scope of his agency in prosecuting Balcero,
Collingsworth arranged, facilitated and confirmed at least three payments totaling $120,000 to
Blanco, and Collingsworth received written notification of each of those payments. See Doc.
174-20; Doc. 342-20.
And other Conrad & Scherer lawyers, employees and

agents (who were also members of Defendants litigation team in Balcero) were indisputably
aware of the payments to Blanco at the time they were being made, including
; see also Doc. 342-20 at CS_TC 12447 (Leete emailing Ivan Otero confirmation of the
16
{B2062211}
$60,000 payment to Blanco in September 2011).13

The knowledge necessary to adversely affect the corporation need not be possessed by a
single corporate agent; the cumulative knowledge of several agents can be imputed to the
corporation. Gutter, 124 F. Supp. 2d at 1309 (citing 3 Fletcher, Fletcher Cyclopedia at 790).
Thus, the firm is presumed to have knowledge of the payments to Blanco, as well.
Finally, it is not as if the knowledge of these payments only existed in the heads of a few
lawyers (although that is sufficient in and of itself to impute the knowledge to the firm). The
proof of all of these payments is found in the firms own business records. See Helton v. AT & T
Inc., 709 F.3d 343, 356 (4th Cir. 2013) (because corporations are charged with knowledge of
information known to their officers and because officers are charged with knowledge of
information in corporate books and records, corporate entities also have constructive knowledge
of the contents of their records); 18B Am.Jur.2d Corporations 1497 (Directors have been
regarded as chargeable with knowledge of facts which the corporate books and records disclose.
Indeed, they have a duty to consult such books and records.); see also Wright & Miller, 8B Fed.
Prac. & Proc. Civ. 2177 (3d ed.) (In answering interrogatories, a party is charged with
knowledge of what its agents know, or what is in records available to it).
For all of these reasons, it would be contrary to foundational legal principles to allow
Conrad & Scherer to disclaim knowledge of payments made by its agents, using its funds, and
documented in its business records, and thereby avoid the ramifications of the fraudulent conduct
that has occurred.
2.
Conrad & Scherer is equally responsible for the fraud on this Court.
13
Christian Levesque is a senior associate at Conrad & Scherer,

, and
counsel of record in Baloco, Balcero and Melo. Susanna Tellez is Collingsworths administrative assistant.
Lorraine Leete was a member of Defendants litigation team whose salary was paid by Conrad & Scherer. Ex. 4.
17
{B2062211}
The fraud on this Court started in Balcero and has continued throughout this case, to this
very day. With respect to Balcero, it is undisputed that Defendants did not disclose their
payments to Gelvez, Duarte and Charris until after those witnesses provided their trial testimony
and after discovery had closed. Doc. 282 at 93. It is also undisputed that the payments to
Blanco, El Tigre and Samario were never disclosed. Id. at 94.
That fraud continued in this case, wherein every pleading filed by the Defendants has
been filed on behalf of both Defendants, and the representations in those pleadings were made by
both Defendants.
. And until January 9, 2015, every interrogatory response in this case was signed by
Collingsworth on behalf of both himself and Conrad & Scherer. Doc. 282 at 77. Between July
1, 2013 and November 17, 2014, both Defendants falsely represented on dozens of occasions, in
both discovery responses and pleadings, that they had been open and clear about their witness
18
{B2062211}
payments and that only three witnesses had been paid. Doc. 243 at 115-458.14 As explained
above in Section II, Conrad & Scherer is conclusively presumed to have knowledge of the fact
that Samario, El Tigre and Blanco were paid, and therefore the firm knew that the statements in
their pleadings and interrogatory responses were utterly false.
Under these facts, both
Collingsworth and the firm are responsible for the fraud perpetrated on this Court.
Furthermore, although both Bill Scherer and Billy Scherer received written notification in
May 2011 of the payments to El Tigre and Samario, it is now known that both of them reviewed
the same email again in June 2014, at which time Billy Scherer provided it to counsel in this
case. Docs. 389 & 390 (Sept. 1-3 Hrg. Tr.) at 195:7-197:12; 397:22-398:12; 407:5-408:6.
Nevertheless, Conrad & Scherer still continued misrepresenting to this Court and other courts
that neither El Tigre nor Samario had been paid. At the absolute least, and as explained in the
next section, the Court should conduct an in camera review of all allegedly privileged
communications surrounding this time period in making its determination of the application of
the crime-fraud exception to the firm.
C.
If this Court has any doubt as to the application of the crime-fraud exception
to Conrad & Scherer, it should conduct an in camera review of documents to
determine whether there is a prima facie case of the firms involvement in the
crimes and fraud at issue.
Both the United States Supreme Court and the Eleventh Circuit hold that in camera
review of documents is appropriate to determine whether the crime-fraud exception applies in
cases where the district court has doubt as to whether the proffered evidence of the crime or
fraud is sufficient to make a prima facie showing. The Supreme Court has held that a lesser
evidentiary showing is needed to trigger in camera review than is required ultimately to
14
As explained infra in Section IV, Defendants only recently admitted that these representations were false when
they drastically changed their story from parsing discovery requests to I forgot for Mr. Collingsworth and we
never knew for Conrad & Scherer.
19
{B2062211}
overcome the privilege. The threshold we set, in other words, need not be a stringent one.
United States v. Zolin, 491 U.S. 554, 572, 109 S. Ct. 2619 (1989). Citing Zolin, this Circuit has
defined the threshold showing that warrants in camera review:
Before engaging in in camera review to determine the applicability of the crimefraud exception, the judge should require a showing of a factual basis adequate to
support a good faith belief by a reasonable person that in camera review of the
materials may reveal evidence to establish the claim that the crime-fraud
exception applies. Once that showing is made, the decision whether to engage in
in camera review rests in the sound discretion of the district court.
Cox, 17 F.3d at 1417 (quoting Zolin, 491 U.S. at 572) (internal citations and quotation omitted).
Clearly, a lesser evidentiary showing is needed to trigger in camera review than is
required to ultimately overcome the privilege. Tindall v. H & S Homes, LLC, 757 F. Supp. 2d
1339, 1353 (M.D. Ga. 2011) (holding that the evidence produced by Plaintiff illustrates a
suspect time-line suggesting that there may have been fraudulent transfers, and that this was all
that was needed to justify in camera review); see also In re Chevron Corp., 633 F.3d 153, 167
(3d Cir. 2011) (However, even if the party seeking to invoke the crime-fraud exception to the
attorney-client privilege cannot make out a prima facie case sufficient to overcome the privilege,
it still may be entitled to have a court make an in camera review of the documents in issue to
determine if those documents and the evidence placing the documents in context establish the
applicability of the crime-fraud exception to the privilege.); In re Grand Jury Investigation, 974
F.2d 1068, 1073 (9th Cir. 1992) (There is an important difference between showing how
documents may supply evidence that the crime-fraud exception applies and showing directly that
the exception applies. This difference results in a considerably lower threshold for conducting in
camera review than for fully disclosing documents.); In re Grand Jury Subpoena, No. 10-12702, 2012 WL 5587438, at *4 (E.D. Pa. Nov. 13, 2012) (holding that the Zolin standard for in
camera review is significantly lower than the prima facie showing needed to apply the crime-
20
{B2062211}
fraud exception).
In analyzing whether this lower threshold has been met, this Court should not consider
any of the Defendants explanations of their conduct. As explained by the Gutter court, the
decision to engage in in camera review involves a more lenient standard of proof than the
determination to apply the crime/fraud exception, and [f]or this purpose, the court may
consider only the presentation made by the party challenging the privilege. 124 F. Supp. 2d at
1306 (citing Haines v. Ligget Group, 975 F.2d 81, 96 (3d Cir. 1992)).
Simply put, the evidence before this Court is unquestionably adequate to support a good
faith belief by a reasonable person that in camera review of the materials may reveal evidence to
establish the claim that the crime-fraud exception applies to the firm. Cox, 17 F.3d at 1417
(emphasis added); see also pages 13-19, supra. Therefore, in camera review of documents
relating to the firms involvement in the crimes or frauds at issue is warranted.
With respect to the fraud perpetrated by the Defendants, this Court has recognized that
Doc. 311-2 (Collingsworth

Dep.) at 351:22-25. At present, none of the Defendants communications with their counsel in
this case have been submitted to the Court for in camera review. Drummond did serve a
subpoena on Mr. Smith and his firm, however, commanding the production of those
communications to this Court for its review. Ex. 2. Those communications will play a crucial
role in shedding light on who knew what and when they knew it. Specifically, to the extent those
communications discuss the scope, nature and extent of Defendants witness payments, they
clearly relate to the fraud at issue, and bear directly on Collingsworths claim that he forgot
about the payments, as well as the firms claim that it was completely unaware of them and that
21
{B2062211}
it moved Heaven and Earth to disclose their witness payments just as soon as we could.
Doc. 390 (Sept. 1-3 Hrg. Tr.) at 392:23-393:1. Accordingly, 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.
III.
THE CRIME-FRAUD EXCEPTION APPLIES TO COMMUNICATIONS IN OTHER LITIGATION

INVOLVING DEFENDANTS.
The Court also asked the parties to brief whether the application of the crime-fraud
exception in this litigation requires the disclosure of Defendants communications with counsel
in other litigation. The answer is yes.
In at least two other state-court cases, Defendants have made misrepresentations to the
court and opposing parties about their payments to Colombian witnesses. Any communications
they had with counsel in those cases about witness payments fall within the crime-fraud
exception for two reasons. First, Defendants misrepresentations in other cases were intended to
cover up the criminal or fraudulent activity here and are therefore related to that activity.
Second, courtsincluding in this Circuitroutinely apply the exception to order disclosure of
purportedly privileged communications in other litigation.
A.
Misrepresentations in other litigation
The first state-court case is in California. In that case, Mr. Collingsworth and Conrad &
Scherer allege that Dole Food Company collaborated with Colombian paramilitaries.
See
Emperatriz Marina Mendoza Gomez, et al. v. Dole Food Company, Inc., et al., Case No.
BC412620 (Los Angeles County Superior Court).
In May 2014, Defendants represented to the California court that the contention that
Defendants had paid witnesses was scandalous and completely false and malicious. Doc.
22
{B2062211}
243-20 at 11-12 (Defendants May 30, 2014 filing in Dole). Defendants went on to state that
they had provided security assistance to family members of three of the many witnesses in
the Drummond matter.
Id. (emphasis added).
Of course, as the Court is well aware,
Defendants knew that every Balcero witness who had testified against Drummond had received
payments, not just three of them.
The second state-court case is in Florida. It was filed by Conrad & Scherer against a
former partner of the firm. Conrad & Scherer, LLP v. William J. Wichmann, et al., Case No. 09011600(5) (Circuit Court of the 17th Judicial Circuit, Broward County, Florida). On September
23, 2014, Conrad & Scherer filed a brief in the case. Doc. 243-25 (Conrad & Scherers Sept. 23,
2014 filing in Wichmann).
Included with that filing was the sworn affidavit of Mr.
Collingsworth purporting to explain the payments made to witnesses in the Drummond cases.
In that filing Conrad & Scherer represented to the Florida court that Defendants had made
payments only to Charris, Duarte, Gelvez, Halcon and Claudia Balcero. Id. at 20-26 (pages
155-158 of 325). After describing the payments to Charris, Duarte, Gelvez, and Halcon, Mr.
Collingsworth falsely testified that Claudia Balcero was the final individual who received
security measures. Id. As of the date this declaration was signed and submitted to the Florida
state court, however, Defendants had been making monthly payments to Samario and El Tigre
for more than three years, and they had offered, facilitated and confirmed at least three payments
to Jaime Blanco from Albert van Bilderbeek. Moreover, these representations were made by
Conrad & Scherer to the Florida court more than 3 months after Bill Scherer, Billy Scherer, and
Conrad & Scherers outside counsel had all located the deps in the can email proving these
representations were false.
B.
Allegedly privileged communications from these state-court cases are

related to the crimes and fraud here.
23
{B2062211}
To order disclosure under the crime-fraud exception, the Eleventh Circuit requires that
the privileged communications be related to the criminal or fraudulent activity established under
the first prong of the exceptions test. In re Grand Jury Investigation, 842 F.2d at 1227.
According to the Eleventh Circuit, the requirement that the legal advice must be related to the
clients criminal or fraudulent conduct should not be interpreted restrictively. Id. Significantly,
efforts to conceal a crime or fraud are related to the wrongful activity. 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 attorney-client privilege but also any work product immunity.).
The misrepresentations in these two state-court cases are part of Defendants scheme to
cover up and perpetuate the fraud herethat is, Defendants scheme to hide the true extent of,
and reason for, their witness payments. Had Defendants told the truth in the other casesthat
they had paid every single Balcero witness rather than just a few of themthen their
misrepresentations in this case would have been laid bare. Moreover, the misrepresentations in
the Dole and Wichmann cases mirror the misrepresentations here (that Defendants had paid only
three witnesses and that the payments were for security), demonstrating that those
misrepresentations are related to the fraud in this case. In re Grand Jury Investigation, 842
F.2d at 1227. Because the fraud in those cases is related to the fraud alleged here, the Court
should conclude that any communications with counsel about witness payments in those cases
fall within the crime-fraud exception.
The Eleventh Circuit has never limited the crime-fraud exception only to permit
disclosure of privileged communications between a party and its counsel in the current litigation.
24
{B2062211}
As noted above, In re Grand Jury Investigation requires only that the privileged communications
be related to the crime or fraud at issue. 842 F.2d at 1228. The focus of the inquiry, then, is
whether the legal advice is related to the alleged crime or fraud, not whether the advice was
offered during the course of the litigation before the court.
The Gutter case is once again illustrative of this point. 124 F. Supp. 2d 1291. In that
case, the defendant (DuPont) failed to disclose certain expert soil analysis in litigation in Georgia
federal court. In a second piece of litigation in Hawaii state court, DuPont produced the analysis.
The Gutter court applied the crime-fraud exception and ordered the disclosure of DuPonts
communications with its counsel relating to the soil analysis in the prior two pieces of litigation.
Id. at 1294, 1316-17. The court expressed no concern with the fact that the documents being
produced were from litigation other than the one directly before the court.15
Cases from other jurisdictions follow Gutters approach and regularly order the
disclosure of documents from litigation other than the one in which application of the crimefraud exception has been requested. See, e.g., In re Sealed Case, 754 F.2d 395, 401 (D.C. Cir.
1985) (applying crime fraud exception to order disclosure of defendants privileged
communications from prior civil litigation to government in grand jury investigation, concluding
that defendant had committed an ongoing fraud in litigation in which it was represented by a
specific law firm); United States v. Moazzeni, 906 F. Supp. 2d 505 (E.D. Va. 2012) (applying
crime fraud exception and ordering disclosure of defendants privileged communications from
prior bankruptcy litigation to government in grand jury investigation); In the Matter of Grand
Jury (OO-2H), 211 F. Supp. 2d 564, 565, 567 (M.D. Pa. 2002) (applying crime fraud exception
15
The Gutter opinion noted that DuPont was adequately put on notice that the prima facie case of fraud included
the full range of findings by the Hawaii Circuit Court and Supreme Court as well as their incorporation of evidence
from the [Georgia] case. Id. at 1307. Likewise, here, Defendants have been on notice that their representations in
these other cases are part of Drummonds argument concerning the scope of their fraudulent scheme. See, e.g., Doc.
243 (Drummonds Proposed Findings of Fact), at 359-67 (Dole litigation) and 438-51 (Wichmann case).
25
{B2062211}
and ordering disclosure of defendants privileged communications from prior civil litigation to
government in grand jury investigation).
There is no reason to draw a distinction between Defendants communications with
counsel in this litigation that sought to conceal these witness payments and Defendants
communications with counsel in other litigation that sought to do the same thing. Such a
distinction is not supported by the law in this Circuit and would only serve to allow Defendants
to benefit from their wrongdoing.
To be clear, Drummond is not requesting all of Defendants communications with
counsel in these other cases. Rather, Drummond requests only those communications with
Defendants counsel related to (1) Defendants direct or indirect payments to Colombian
witnesses, or (2) the disclosure of these witness payments to opposing counsel or to the court.
These categories of communications are related to the ongoing fraud or crimes that Drummond
has alleged in this litigation and therefore fall squarely within the crime-fraud exception.
IV.
DEFENDANTS CRIMES AND FRAUD ARE CERTAINLY NOT OVER AND FIXED THEY
ARE CONTINUING.
The final post-hearing briefing question identified by the Court is whether Defendants
crimes and fraud are over and fixed. Doc. 391 (Sept. 1-3 Hrg. Tr.) at 769:16-18. They are not.
Defendants would have this Court believe that as soon as they discovered that El Tigre,
Samario, and Jaime Blanco had been (and in the case of El Tigre and Samario, were still being)
paid, they made full disclosure of the true facts.
Doc. 390 (Sept. 1-3 Hrg. Tr.) at 417:3-9. The record evidence proves otherwise.
As the Court is well aware, the deps in the can email unequivocally shows that El Tigre
and Samario were paid, and were being paid on a monthly basis. Putting aside the undisputed
fact that Conrad & Scherers Managing Partner (Bill Scherer), its CFO, and Billy Scherer (Bill
26
{B2062211}
Scherers son who is another partner in the firm) all received this email in May 2011 when the
payments were being set up, both Bill Scherer and Billy Scherer reviewed this email again in
June 2014. Bill Scherer testified that Billy Scherer located this email when searching for witness
payment documents to produce in the Wichmann action pending in Florida state court, and
immediately sent it to counsel in the defamation case.
; Doc. 390 (Sept. 1-3 Hrg. Tr.) at 397:16-398:12; 418:24-419:21.16
Despite this, in the months that followed, Defendants continued misrepresenting in this
case that El Tigre and Samario had not been paid, see Doc. 282 at 368-451, while
simultaneously representing that [i]n an amazing show of audacity, Drummonds counsel, in
accusing Mr. Collingsworth of fraud on the Court, is itself attempting to mislead the Court. Id.
at 396. Furthermore, on September 23, 2014, Conrad & Scherer represented to the Florida
court in the Wichmann matter that no payments had been made to El Tigre and Samario. Id. at
438-451. It was not until after Parker Waichman produced the deps in the can email to this
Courts Special Master for in camera review that the truth finally started to come out. Id. at
452-454. But even then, it was not the whole truth.
In November 2014, Defendants finally produced the deps in the can email to
Drummond, and amended their prior false interrogatory responses to state that El Tigre and
Samario had been paid. Id. at 454; Doc. 174-7. But there was no disclosure that Jaime Blanco,
too, had been paid. In fact, in these amended interrogatory answers, Defendants claimed that
there was merely a discussion of payments to Blanco, but no actual payments. Doc. 174-7.
16
The Courts in camera review should reveal who else received a copy of this email
and communicated with Mr. Scherer about it around June 2014, which will be very instructive on the extent to
which Defendants misrepresentations and non-disclosure were immediately fixed.
27
{B2062211}
This Courts in camera review should shed light on this

issue.
Also, when Defendants finally disclosed the El Tigre and Samario payments in this case,
they improperly stamped the interrogatory responses and all documents revealing this fact as
Confidential under this Courts Protective Order. Doc. 212 at 9; Doc. 174-7. So while
Defendants were making partial disclosures in this Court, their improper claims of
confidentiality allowed them to continue their misrepresentations to other courts on the same
subject. The representation in the Wichmann case was made just two months before these
interrogatory responses were signed, but the Wichmann court was not informed that Conrad &
Scherers September 2014 filing was false. Drummond has not seen any filing in the Wichmann
case, even to this day, revealing that El Tigre or Samario were paid.
Similarly, in the Dole case, Defendants represented in May 2014 that the only witnesses
to have been paid were Charris, Duarte, and Gelvez.
Defendants did not fix that
misrepresentation to that court until June 2015, after this Court learned of the misrepresentation
and indicated its intention to call the Dole judge. On June 15, 2015, this Court held a hearing
during which the representation to the Dole court was discussed, and this Court made clear that it
was categorically false. Doc. 372 (June 15, 2015 Hrg. Tr.) at 12:21-13:5. This Court then
asked for the name and telephone number of the Dole judge. Id. at 22:19-23:6. Three days later,
Defendants finally fessed up to the Dole court that they had misrepresented the scope of their
witness payments. Doc. 283-6 (June 18, 2015 Dole Filing) at 13. This is yet another example of
28
{B2062211}
Defendants continuing in their misrepresentations until they are forced to disclose the truth.
Even after Defendants began disclosing to this Court that more witnesses had been paid
than previously represented, Defendants continued to misrepresent the reasons for their nondisclosure. Once it was known that El Tigre, Samario, and Blanco had been paid, revealing that
Defendants had been lying to Drummond and this Court for years, Drummond filed a renewed
motion for sanctions in February 2015. Defendants response to this motion was simply a
continuation of the fraud.
Defendants repeatedly represented that the reason they never disclosed the payments to
El Tigre and Samario prior to November 17, 2014 was because they deliberately interpreted
discovery requests and this Courts Orders to exclude those payments:
Mr. Collingsworth was slicing too close to distinguish between the direct
payments Conrad & Scherer made to assist witnesses in this dangerous
environment and the indirect payments made either through Otero, who had sole
discretion on the matter, or the van Bilderbeeks as assisted by Mr. Collingsworth.
...
As the parties entered the April 2014 hearing on Drummonds motion for
sanctions, defendants had outstanding objections to Drummonds definition of
payments and, thus, the scope of which payments were discoverable had not
been settled. If Drummond had attempted to meet and confer on defendants
objections, rather than leapfrogging to a motion for sanctions, the parameters of
which payments were discoverable could have been clarified much earlier.
Because it did not meet and confer or file a motion to compel, however, those
parameters were still unclear during the April 2014 hearing.
And, because those parameters were still unclear, when defendants stated in their
opposition to the motion for sanctions that they were in full compliance with
the Courts discovery order, Doc. 114 at 2, they werebased on their
interpretation of payments to witnesses as direct payments by either Conrad
& Scherer or Mr. Collingsworth to a witness or a witnesss family.
It was not until the Court issued its October 15, 2014 Order on Privilege Logs that
Drummonds definitions of payments to witnesses and Colombian witnesses
became the operative definitions in the case. Accordingly, as soon as humanly
possible following issuance of the October 15, 2014 Order, defendants produced
documents in accordance with the new definitions of payments to witnesses and
Colombian witnesses.
29
{B2062211}
[. . .]
Prior to this extremely broad definition being adopted in the Courts October 15,
2014 Order, defendants had a good faith basis for objecting on this ground and
construing payments to witnesses narrowly as only those payments flowing
directly from Conrad & Scherer to a witness or a witnesss family.
Doc. 187 at 3, 19-20 (emphasis added).
Not once in their opposition brief did Defendants make the incredible assertion that
Collingsworth simply forgot about the payments, or that Conrad & Scherer was totally
oblivious.
Indeed, Defendants claim was that they intentionally interpreted the discovery
requests not to call for disclosure of this information, and it was not until this Courts October
15, 2014 sea change Order that there was any obligation for these disclosures. If Conrad &
Scherer did not know about the payments, as they now claim, it is factually impossible for the
October 15, 2014 Order (Doc. 151) to have been any sort of sea change.
The fraud continued in Defendants surreply to Drummonds renewed motion for
sanctions, wherein they continued to represent that their nondisclosure of payments to El Tigre
and Samario was not a result of Mr. Collingsworths selective amnesia or Conrad & Scherers
lack of knowledge, but rather due to their interpretation of discovery requests and this Courts
orders: Drummond certainly cannot claim that defendants merit the ultimate sanction of a
default judgment because they have failed to go back and correct statements that, while accurate
at the time they were made, have since become false based on subsequent discovery rulings
made by this Court. Doc. 210 at 9.
In advance of the September 1-3 hearing, this Court directed the parties to exchange
proposed findings of fact, with the goal of narrowing the disputes of fact to be resolved at the
hearing.
Surely it would be at this point that the facts behind Defendants fraudulent
concealment would be made known to the Court. They were not. In their Corrected Response to
30
{B2062211}
Drummonds Proposed Findings of Fact, Defendants again repeatedly represented that the reason
for their nondisclosure was that they were parsing or narrowly interpreting orders and
discovery requests. See Doc. 282 at 81 (Mr. Collingsworth interpreted this interrogatory
literally to only include direct payments by defendants to witnesses, not to their family members.
To the extent Mr. Collingsworths narrow interpretation resulted in responsive information not
be[ing] produced, such information has been supplemented and the record corrected.); at 89
(to the extent Mr. Collingsworths narrow interpretation of discovery requests and reliance on
objections resulted in responsive information not be[ing] produced, such information has been
supplemented and the record corrected. Mr. Collingsworth did not intend to mislead the Court.);
at 312 (Defendants did not interpret Drummonds third interrogatories and requests for
production as including payments made to Ivan Otero for the benefit of a witnesss family); at
401 (UNDISPUTED that payments made to Blanco or payments made to the families of El
Tigre and Samario had not been disclosed. Mr. Collingsworth simply made a mistake in parsing
discovery requests too finely. But, when the Court issued its October 15, 2014 Order clarifying
and broadening the scope of discovery, Mr. Collingsworth and Conrad & Scherer supplemented
any and all discovery responses and privilege logs necessary to fix the problem and come into
complaint [sic] with the Courts Order.) (emphasis added).
In explaining why their response to Drummonds interrogatory in this case requesting
disclosure of witness payments was not false, Defendants claimed:
!
Mr. Collingsworth interpreted this request literally (as written) to include only
payments made directly to witnesses or their families (or to paramilitaries or their
families) without carefully considering that other, potentially responsive
witnesses existed. And, documents reflecting such payments (made directly to
the families of Charris and Duarte) had already been produced. Defendants did
not interpret this interrogatory as including payments made to Ivan Otero for the
benefit of a witnesss family. . . . To the extent Mr. Collingsworths narrow
interpretation and/or reliance on objections resulted in responsive information not
31
{B2062211}
be[ing] produced, such information has been supplemented and the record
corrected. Id. at 303.
!
The representation [that all witness payments had already been disclosed] is not
false based on defendants reasonable (and literal) interpretation of the
interrogatory. Id. at 304; see also 305 (same).
The word forgot does not appear once in Defendants Reponses to Drummonds Proposed
Findings of Fact. And nowhere in that filing did Conrad & Scherer disclaim knowledge of the
payments to El Tigre and Samario.
But if the testimony presented by the Defendants during the September 1-3 evidentiary
hearing is to be believed, all of the above explanations are unequivocally false. According to
that testimony, Defendants were not parsing or narrowly interpreting discovery requests.
Collingsworth failed to remember, and no one at Conrad & Scherer knew, that El Tigre and
Samario had been paid approximately $100,000:
Q When you did disclose payments, whether in response to this interrogatory or
some other request, you didnt disclose the payments to El Tigre or Samario, did
you?
A As Ive already testified and expressed regret for in January of 2013 when we
did answer the question regarding family members, we initially disclosed only the
payments to Charris, Gelvez, and Duarte.
Q And thats because you forgot?
A By then I had, yes.
Q So from January 2013 -- let me ask you this. How far before January of 2013
did you forget?
A I can just only repeat: I dont really know.
Q I think we can agree from at least January of 2013 through midway through
2014, you say you forgot that you were paying El Tigre and Samario, right?
A It did not cross my mind, yes.
Q And so we dont have to trudge through all of them right here right now, you
will agree that any time you made a representation either in a discovery response,
32
{B2062211}
sworn declaration, statement to this Court, that it was only three witnesses that
had been paid, thats because you forgot about El Tigre and Samario?
A We can say that, as I previously testified, I replicated the mistake by primarily
cutting and pasting and going forward, and I just did not think about it again.
Q Since you had forgotten, I guess you were not thinking about the payments and
thinking, you know what, these are subject to some sort of outstanding objection
in Balcero; therefore, I can say I produced all responsive nonprivileged,
nonobjectionable documents. You didnt go through that mental process, did you?
A When I initially produced the documents in January of 2013 for Gelvez,
Charris, and Duarte, I thought I had produced all responsive documents on that
issue.
Q And you were not asserting an objection over the payments to the family
members anymore?
A Clearly not. We had resolved our meet-and-confer process and I provided the
information about the three witnesses that I had the information on and that I was
clear on.
[. . .]
BY MR. WELLS:
Q So for every disputed representation in this proposed findings of fact that
repeats this verbatim language -- and I can tell you, its a lot of them thats not
really the reason you didnt disclose it; its because you forgot; thats what the
facts are?
MR. NIEWOEHNER: Your Honor, we have an objection. There are multiple
bases in what -- I think you mentioned the libel case.
THE COURT: His question is this. And let me rephrase his question, but I
understood his question, but it may be helpful for the record to rephrase it.
Starting in January of 2013 when the objection was withdrawn after the meet and
confer and there was an agreement to answer the interrogatory, to the extent that
on multiple occasions you did not disclose El Tigre and Samario, it was because
you forgot, not because of some then pending objection?
THE WITNESS: Thats correct, Your Honor, and Ive testified to that.
Doc. 389 (Sept. 1-3 Hrg. Tr.) at 164:19-166:8 & 168:11-169:5.
So this Court is once again left in the position to decide which of Defendants
irreconcilable factual representations is true. Of course, the simplest inference from the evidence
33
{B2062211}
is that neither explanation is true, and that Defendants were intentionally concealing these
payments. As this Court astutely noted at the close of the evidentiary hearing, a finding that Mr.
Collingsworths I forgot excuse is not credible means that the Defendants fraud on this Court
is continuing to present day:
THE COURT: I hear what youre saying. What about I forgot. Because thats
going on now. He didnt get on the stand and say, youre right; my hand was in
the cookie jar, but I put all the cookies back in. He said the reason I didnt
disclose this is I forgot. Why isnt that a continuing fraud on the Court if I
discredit that testimony and say there is no way he forgot.
MR. McNEIL: Because its not continuing.
THE COURT: Sure it is. Its continuing right now. He is misrepresenting to me
in this hearing the basis for nondisclosing in the first place. He presumably will
get on the stand at trial and give exactly the same testimony under oath, and if he
is asked why he didnt disclose these payments or why he misrepresented
information about these payments: I simply forgot about those two payments; I
would have made the disclosures if I had remembered.
Why isnt that continuing all the way to trial? And now we have to step behind
the curtain and see is that really what occurred here. Is he using counsel or using
the work product doctrine to carry out a fraud that has been going on for a while
and still is ongoing in at least some form and fashion now.
Doc. 391 (Sept. 1-3 Hrg. Tr.) at 767:4-768:1.
Defendants crimes and fraud are nowhere near over and fixed. Defendants are still
paying witnesses. They are still giving inconsistent and irreconcilable explanations to this Court
about why they fraudulently concealed their witness payments.
Perhaps most importantly,
Defendants are still pressing their false claims in the highest court in this land relying on a record
in Balcero that is marred by their fraud.
Two weeks after Defendants counsel represented to this Court that Defendants crimes
and frauds were over and fixed, Doc. 391 (Sept. 3, 2015 Hrg. Tr.) at 769:14 (MR. MCNEIL: .
. . it is over . . . it is fixed), Defendants filed an application for an extension of time to petition
34
{B2062211}
the United States Supreme Court for a writ of certiorari in Balcero. Ex. 1.17 The record that will
be presented to the Supreme Court is devoid of any evidence of the hundreds of thousands of
dollars paid to every witness upon whose testimony the judgment on appeal was based. The
Supreme Court will be presented with the testimony of Jaime Blanco, which has now been
proven to be perjury. As this Court observed:
THE COURT: . . . And even if, assuming arguendo, the payments in Colombia
were not for the purpose of suborning perjury and even if they were not for the
purpose of procuring testimony, i.e. bribery, there was a fraudulent
misrepresentation to the Court, arguably, because there was an indication when
those witness statements were being put into the record and relied upon, that they
were not -- that there was not any compensation related to them.
In fact, just the question posed to Mr. Blanco, have you received any
threats or promises; I have not received any threats. Have you received a promise
of -- and I dont have the language. . . . And he said no, none of any kind
whatsoever; no, no kind whatsoever.
Doc. 391 (Sept. 1-3 Hrg. Tr.) at 762:25-763:15.
Defendants crimes and frauds are not over. And their fraud was not voluntarily
fixed Defendants were simply caught. Their contention to the contrary should be given no
weight in this Courts determination of the applicability of the crime-fraud exception.
Conclusion
Drummond respectfully submits that it has met its burden of showing a prima facie case,
making the crime-fraud exception applicable to both Defendants.
Drummond respectfully
requests that the Court undertake an in camera review of Defendants allegedly privileged
documents for the purpose of determining which documents relate to the prima facie crimes
and frauds and therefore which should be produced to Drummond and incorporated into this
Courts determination of sanctions.
17
And on the very same day Defendants told this Court that their crimes and fraud are over and fixed, they filed
a petition for certiorari with the United States Supreme Court in Baloco, asking the Supreme Court to overturn this
Courts dismissal of that case.
35
{B2062211}
Respectfully submitted,
/s/ H. Thomas Wells, III

William Anthony Davis, III (ASB-5657-D65W)
Benjamin T. Presley (ASB-0136-I71P)
STARNES DAVIS FLORIE LLP
P.O. Box 59812
(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.
CERTIFICATE OF SERVICE
I hereby certify that on September 29, 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
pbadham@badhambuck.com
36
{B2062211}
/s/ H. Thomas Wells, III

37
{B2062211}

Drummond Crime Fraud Response

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FILED

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 1 of 43

2015 Sep-29 PM 06:02

IN THE UNITED STATES DISTRICT COURT

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

DRUMMOND COMPANY, INC.S BRIEF REGARDING THE ISSUES AND

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

Attorneys for Drummond Company, Inc.

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 2 of 43

APPLICATION OF THE CRIME-FRAUD EXCEPTION TO COLLINGSWORTH. .................3

APPLICATION OF THE CRIME-FRAUD EXCEPTION TO CONRAD & SCHERER ..............4

There is sufficient evidence to independently justify the application of the

Conrad & Scherer is deemed to have knowledge of the payments

Conrad & Scherer is equally responsible for the fraud on this

If this Court has any doubt as to the application of the crime-fraud

THE CRIME-FRAUD EXCEPTION APPLIES TO COMMUNICATIONS IN OTHER

Misrepresentations in other litigation ........................................................22

Allegedly privileged communications from these state-court cases are

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 3 of 43

American Cent. Life Ins. Co. v. First Natl Bank,

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 4 of 43

First Ala. Bank v. First State Ins. Co., Inc.,

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 5 of 43

Ala. Code 10A-8-3.05(a) ............................................................................................................10

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 6 of 43

Fed. R. Civ. P. 11(c)(1)....................................................................................................................6

3 William Meade Fletcher,

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 7 of 43

Assuming the Court finds the crime-fraud exception applicable to Mr.

Assuming the Court finds the crime-fraud exception applicable to Mr.

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

And finally, the Court requested Drummond to respond to Defendants contention

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 8 of 43

Doc. 389 (Sept. 1-3 Hrg. Tr.) at 199:23-200:1 (Q Now,

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 9 of 43

APPLICATION OF THE CRIME-FRAUD EXCEPTION TO COLLINGSWORTH

Furthermore, the determination whether the requested material is

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 10 of 43

All documents and communications relating to payments to witnesses, as well

All documents and communications relating to Ivan Otero and Francisco

All documents and communications relating to the disclosure or non-disclosure

All documents and communications up to November 17, 2014 relating to the

All documents and communications up to January 9, 2015 relating to the

APPLICATION OF THE CRIME-FRAUD EXCEPTION TO CONRAD & SCHERER

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 11 of 43

Defendants are wrong for a multitude of reasons.

Doc. 282 (Defs Corrected Responses to Drummonds

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 12 of 43

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 13 of 43

Indeed, such a proposition is wholly contrary to well-established principles of agency. It

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 14 of 43

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 15 of 43

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 16 of 43

Collingsworth responsibilities in that case primarily, to be primarily responsible? A. More than

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 17 of 43

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 18 of 43

Gutter, 124 F. Supp. 2d at 1309.

[k]nowledge of or consent to an illegal act may be imputed to a partnership or corporation only

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 19 of 43

Collingsworth necessarily equates to a finding that it applies to Conrad & Scherer.10

There is sufficient evidence to independently justify the application of the

Conrad & Scherer is deemed to have knowledge of the payments to

Case 2:11-cv-03695-RDP-TMP Document 393 Filed 09/29/15 Page 20 of 43

Defendants have withheld