Ex-Fund Manager Seeks To Block Evidence On Gmail Account
September 21 2009 - 12:26PM
Dow Jones News
Lawyers for former Bear Stearns fund manager Matthew Tannin have
asked a judge to prohibit prosecutors from introducing evidence at
his criminal trial regarding the erasure of his personal email
account in 2008, calling it an "eleventh-hour smear."
In a letter Monday, Susan Brune, a lawyer for Tannin, said the
government's evidence has failed to establish "that Mr. Tannin
destroyed any documents" and Tannin and his counsel have preserved
all documents.
At a hearing last week, prosecutors from the U.S. Attorney's
office in Brooklyn said that they had received a letter from Google
Inc. (GOOG) indicating Tannin's Gmail account was erased in March
2008.
In a letter filed with the court on Saturday, prosecutors said
the account was erased "during the pendency of the criminal
investigation" and after having received a subpoena for documents
in a separate 2007 civil case by the U.S. Securities and Exchange
Commission.
"There is no requirement in law or in common sense that dictates
that a person under a subpoena must keep his personal email account
at a third-party email provider open in perpetuity," Brune said in
her letter. "That Google has apparently stopped maintaining the
emails that were available on its server for a lengthy period of
time after the collapse of the funds is not evidence of any
impropriety and is simply not relevant to any issue in trial."
Brune asked U.S. District Judge Frederic Block in Brooklyn to
reject the government's request.
A spokesman for the U.S. Attorney's office in Brooklyn declined
comment Monday.
Tannin and Ralph Cioffi, former managers of two high-profile
bond portfolios in Bear Stearns' asset-management unit, have been
charged with conspiracy, securities fraud and wire fraud. Cioffi
also has been charged with insider trading.
They have denied wrongdoing. Jury selection is set to begin in
their case on Oct. 13.
The July 17 letter from Google indicated there had been no
recent activity in Tannin's Gmail account and the account had been
deleted. A copy of the letter was filed as part of Brune's
submission.
"Therefore we are no longer able to extract the information
requested in the search warrant," the letter said.
In her letter, Brune said a user no longer has access to a Gmail
account after it is closed or the email messages in the account.
Google may maintain copies of the contents of the closed accounts
for up to 60 days on its active server and for unspecified periods
on its backup servers, said Brune, citing Google policy.
"Apparently, judging from the Google letter, in or about July
2009, more than two years after the collapse of the funds and
approximately 21 months after the government had been informed of
the account, the government obtained a search warrant directed to
Google," Brune said. "By that late date, as far as we can tell from
Google's letter, consistent with its published policies, Google had
removed the contents of the account from the Google servers."
Brune said Tannin's computers have been electronically copied
and preserved and the contents of any Gmail accounts or other
documents would likewise have been preserved.
"To suggest otherwise before a jury would be to mislead and to
intrude on Mr. Tannin's constitutional rights," Brune said.
The government has alleged Cioffi and Tannin encouraged
investors to continue to put money in the funds while privately
expressing concerns about their outlook months before their
collapse.
The funds - the Bear Stearns High Grade Structured Credit
Strategies Master Fund and the Enhanced Fund - imploded in June
2007 as credit markets contracted, costing investors more than $1
billion.
The closing of the funds marked the beginning of big problems
for Bear Stearns, which was forced to sell itself to JPMorgan Chase
& Co. (JPM) after being pushed to the brink of failure because
of a liquidity crunch in March 2008.
Shareholders approved the sale of the 85-year-old investment
house to JPMorgan Chase for just $1 billion in May 2008. Bear
Stearns had a market value of $20 billion in January 2008.
-By Chad Bray, Dow Jones Newswires; 212-227-2017;
chad.bray@dowjones.com