While any form of misconduct by an attorney is highly problematic, misconduct by federal prosecutors is particularly egregious. As explained by the United States Supreme Court in 1935:
“The United States Attorney is the representative not of an ordinary party to a controversy but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, in a peculiar and very definite sense, he is the servant of the law, the two-fold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnestness and vigor — indeed, he should do so. But, while he may strike hard blows, he cannot strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as to use every legitimate means to bring about a just one.”
Prosecutorial Misconduct in the I2G Case
“In the case of United States vs. Maike and I2G participants, the government abused its powers, disregarded the law, and employed fraudulent methods to obtain wrongful convictions, which the Supreme Court prohibits.
The prosecutors committed fraud on the Court by repeatedly lying about statements made by data provider Jerry Reynolds to conceal $28 million in exonerating commissions paid to distributors deemed “alleged victims.” These commissions contradicted their claim that i2G operated as a pyramid scheme with a 96% loss rate. The false statements attributed to Reynolds were presented to the Court and the defense during the trial, as well as during restitution and sentencing hearings, in an attempt to undermine evidence that disproved their case.
The government preemptively informed the defense that the exculpatory data they were required to disclose was “problematic” and “inaccurate,” according to Reynolds. Reynolds later provided an affidavit repudiating Assistant District Attorney Madison Sewell’s false statements to the Court and affirming the validity of the exculpatory data. An evidentiary hearing is necessary so that Reynolds can provide sworn testimony to determine the willfulness, malice, and deliberation behind the prosecution’s actions, which occurred two weeks before the trial.
The government ordered seven spreadsheets (1011, 101F, 101D, 101G, 101G1, 101B, and 101A) to reflect i2G operations two weeks before the trial. However, the data “filtered out” $28 million in paid commissions to alleged victims and included two years of data known to have occurred after i2G ceased operations. This data belonged to a separate company, Xtg1, which was well-known to the prosecution. It is important to note that the indictment period for i2G ended on December 31, 2014. However, all seven critical spreadsheets used as primary evidence that i2G was a pyramid scheme with a 96% loss rate, extended until March 2017. These spreadsheets formed the foundation of Keep’s analysis and were used extensively throughout the trial.
In 2017, the government obtained data from Jerry Reynolds (7240) that included all I2G transactions. This data revealed a total product revenue of $40,398,505.71 and total commissions paid to I2G distributors amounting to $38,116,346.38. These figures contrasted sharply with the significantly lower numbers presented to the jury in cases 101i and 101F, which reported earned commissions of $9,512,603.52 and gains of only $7.5 million. Specifically, the accurate data from Reynolds indicated $28 million in “greater gains” and “lower losses” than those represented to the jury. Moreover, the commissions paid showed that I2G earnings were considerably higher than those typically in multi-level marketing companies.
The government “knew” the commission totals on spreadsheets it ordered to identify “victim investor” losses did not align with its “loss” narrative. Rather than disclose that the anticipated losses were non-existent, it attempted to impeach the exculpatory data to order new data “filtering out key commissions.” The paid commissions excluded included those used as “gift certificates to make their purchases.
Two weeks before the trial in 2022, the government met with Jerry Reynolds and subpoenaed new data that filtered out 80% of the commission payments to alleged “victim investors.” The “filtering out” of 28 million dollars in paid commissions, which Reynolds affirms, was a deliberate and egregious attempt to misrepresent I2G gains and losses.
Four key government witnesses falsely represented the “manipulated data” as total I2G gains and losses. The government’s failure to correct extensive false testimony by their key witnesses, which they knew was false, violated its obligation under Napue.
The data in 101i and 101f were used extensively with fourteen witnesses to create the illusion that many “victims” were losing money. In reality, every purchaser of Emperor products made significantly higher gains and lower losses than presented in 101i data. No representation of gains or losses associated with any Emperor distributor was accurate. The false losses in 101i and 101F extended to the improper summary charts 230 and 232, as presented by Agent McClelland. The government acknowledged that the summary charts were improper in their appeal brief but failed to disclose that the withheld “underlying data” amounted to 28 million dollars in commissions paid to “alleged victims.” The misconduct extends to the appellate attorneys, who failed to correct the falsehoods and used them as evidence in her brief.
The introduction of this data violated Rule 702, which mandates the use of reliable evidence. To prove fraud, it must be demonstrated that there were actual losses directly resulting from a misrepresentation. In the i2G case, all alleged “losses” were fabricated by “excluding the actual “gains.” The government failed to rectify false testimony provided by four key witnesses on manipulated data, violating the Napue principle.
An affidavit from Reynolds confirmed that all the gains and loss data in document 101i was false. In its appeal brief, the government acknowledged that key commission data had been “filtered” out of 101i, but argued that it never claimed to show “truthful” losses. Instead, the government contended that the defense should have discovered the misleading data sooner. The prosecution misrepresented the $28 million in “filtered commissions” as “missing funds” in offshore bank accounts, which influenced the i2G Court to believe that these “missing funds” actually existed. These data manipulations were deliberate efforts to falsely inflate losses while concealing known gains, all to support the narrative of a “pyramid scheme.”
The government also “knowingly” presented non-I2G data as I2G data. Two years of critical data belonged to XtG1, a separate company that launched after i2G had closed. This included over $4 million in sales and 4000 distributor enrollments from XtG1. The government knew about xtg1, per its own exhibits and witness testimony. It knew that key seven spreadsheets admitted to the jury included data up to March 2017, two years After I2G ceased all operations.
The government pushed a “data-driven” case to prove a pyramid scheme, knowing it required accurate and dependable data. Government witnesses prove the government’s knowledge of its false data representations. For example, FBI Agent McClelland testified that Reynolds’ records indicated $40 million in paid commissions. The government shared the same knowledge with paid commissions totaling $38,116,346.38 and total product purchases amounting to $40,398,505.71. This data (7240) was subpoenaed and known seven years before the trial.
FBI Agent Sauber acknowledged many data inconsistencies during Maike’s sentencing trial. These inconsistencies included un-deducted gifted positions, unpaid transactions, unaccounted refunds, customer spots, waived auto-ships, and Xtg1 transactions outside the indictment timeline. These errors contributed to a staggering inflation of the loss figures presented in 101i at the trial. Sauber’s awareness of these issues reflects the government’s awareness. Ultimately, these data inconsistencies inflated losses by millions of dollars.
Reynolds provided an affidavit that the information in 101i was false. He acknowledged that he complied with the government’s request to exclude key commission data that substantiated these inaccuracies. Reynolds denied the false statements attributed to him about “problems” in the original data and confirmed that the original data (7240) was valid.
An evidentiary hearing is necessary to flesh out the extent of the government’s lies and clarify the significance of the filtered twenty-eight million dollars in paid commissions.
The government convicted defendants of federal crimes by knowingly misrepresenting a 96% loss rate while having evidence indicating the opposite: that 96% of total commissions were paid to distributors.
The data conforms with the mere 1.5 million claims, which occurred only with exceptional prompting. Had a 96% loss rate been valid, the resulting claims would have been thirty-eight million eight hundred thousand.
Additionally, the government engaged in extensive pre-trial witness tampering over seven years. Over 60 “fraud notifications” were sent to the I2G distributor base, indicating they were fraud “victims.” As a result of ongoing solicitations, witnesses at the trial, such as Margaret Alderdice, came forward. (Doc 699 #10263)
The government and its expert, Keep, emphasized his thorough and broad access to I2G data to support his pyramid scheme analysis. Dr. Keep stressed the importance of carefully analyzing accurate company data to identify a pyramid scheme, which must be studied over time. He testified that he “never had access to data like this.” The government deemed its data “golden” to its case. However, the government knew Keep’s pyramid scheme analysis and 96% loss rate were based on 2 years of unreliable xtg1 data and “filtered” commission data.
The government admits in its appeal response that the data was “incomplete,” contained “inconsistencies,” and did not include commissions and transactions. It argues that Dr. Keep did not make false statements because he was unaware of the inaccuracies in the data. However, the government knew Dr. Keep’s statements were false and had a duty to correct them under the Napue standard.
Additionally, the government committed numerous Brady, Giglio, and Jenks violations and witness tampering over seven years.
Finally, the prosecution misrepresented the law, distorted known facts, presented personal opinions as facts, and testified to facts not supported by the record.
An evidentiary hearing is necessary to establish the record’s substantial prosecutorial misconduct, ensure the judicial system’s integrity, and deter future fraudulent actions by overzealous prosecutors.
The prosecutorial misconduct and ethical violations include:
- Direct Lies to the Court to Hide Exonerating Data
The prosecution falsely attributed statements to its key witness, Reynolds, to undermine data contradicting their case. They repeatedly claimed that Reynolds had deemed the exculpatory I2G data (7240) as “problematic” and inaccurate (doc 718 11354, 55). However, Reynolds confirmed the accuracy of the data (7240), which shows 28 million dollars in greater commission payments to alleged victims than represented at trial, and disproved the existence of a pyramid scheme with a 96% loss rate. In its appeal response, the government conceded that commissions were “filtered” out of 101i (doc 99, pg 74-75).
2.) Direct Lies to the Court about Xtg1 Data and Violations of Brady/Giglio and Jenks
The prosecution misled the court that Xtg1 data represented I2G data during two years when I2G was closed. Significant evidence, including Reynold’s and Anzalone’s testimony and the government timeline, proved its knowledge that I2G closed in 2015.
The government knew the dates were “hidden” on the data provided to the defense one week before the trial. Reynolds testified that he did not verify the dates in the data. The prosecution described the dates as “indecipherable,” requiring technical measures to render them readable. This situation left the defense unable to discover that the “i2G data” extended to March 2017 (specifically 101i, 101g1, 101b, 101a, 101d, and 101f) and did not belong to I2G. Instead, this two-year data span belonged to Xtg1, a Hong Kong-based entity that continued operations after I2G had closed.
The government introduced emails and data at trial that were outside the timeline of the indictment. Reynolds testified that I2G was closed by January 2015 (Doc 498 #4249, 4250). Despite his testimony, the government presented seven spreadsheets with data twenty-seven months AFTER I2G was closed. No data was used that was not compromised.
Key witness, Anzalone testified that I2G was closed in 2015 and that Maike moved on to other plans (Doc 504 #4494, 4495). Importantly, non-I2G data was deliberately used to support a case that relied on this data, and false statements made by key witnesses regarding the data were never corrected.
The government was aware of Xtg1. Nine meetings were held with Anzalone, who was associated with Xtg1. The Anzalone family gave prosecutors copies of their hard drives just before the trial. Anzalone emails confirmed their involvement with Xtg1 and its launch in 2015.
The government deliberately omitted references to Xtg1 in two exhibits (Exhibit 692) presented to the jury. This suggests an intentional effort to conceal the co-mingling of Xtg1, which contaminated and invalidated all data from 2015 to 2017. The government had a responsibility to inform the Court about these errors and to correct the false testimony provided by four key witnesses, as outlined in U.S. v. Napue.
Hosseinipour’s demand letter from November 2015 mentions Maike’s launch of Xtg1 (Exhibit 692), and Logan’s email from October 2015 also refers to the Xtg1 launch in 2015. Agent Sauber acknowledged Xtg1 during Maike’s sentencing hearing.
The government was aware that two years’ worth of Xtg1 data was included in seven spreadsheets that served as crucial evidence against the defendants. They had ample opportunities to disclose data errors and rectify false statements made by four key witnesses who misrepresented the data. Instead, the government chose to deliberately misrepresent the I2G data in order to uphold its narrative, compromising justice in the process. Their failure to correct the false statements made by their key witnesses constituted Napue violations.
Brady, Jenks, Giglio Violations
Additionally, impeachment materials on Anzalone’s computer were not turned over to the defense- violating Brady, Jencks, and Giglio. These included emails affirming Anzalone’s post-I2G involvement with the 750 million charged Ponzi Bitclub Network, correspondences with Bitclub Network investors’ investors, work with Joseph Abel, who pled guilty in the BitClub Network, work with Jason Syn in Vitaxel, accused of with being a Malaysian Bitcoin Ponzi and reported to the SEC by an investor who accused Anzalone of scamming his group of $300,000, and his subsequent corporate position with a bitcoin trading bot accused ponzi backed by Joseph Abel. Emails related to Anzalone’s post-i2G activities were impeachment materials held by the government on Anzalone’s computer that were never turned over to the defense. The fact that these circumstances may have influenced his plea cooperation deal and the defense were not given the materials possessed by the government to impeach him violated the principles of Brady and Giglio.
In addition, it included exculpatory material proving the launch of xtg1 and Anzalone’s involvement with it (but not theirs), proving that their data after that timeframe was illegitimate. The government also possessed exculpatory direct correspondences with Hosseinipour asking Anzalone to stop promoting I2G after the FBI raid with appeals to his integrity, good character, and responsibility to others, proving her lack of criminal intent.
We ask the Court to order the Anzalone computer hard drive copies to be preserved for use in a prosecutorial misconduct evidentiary hearing.
3.) Subornation of Perjury Through Multiple Witnesses
The government suborned perjury through multiple vital witnesses, including Keep, Reynolds, McClelland, and Sauber, regarding total I2G gains/loss representation, which was central to the case. The government failed to correct each witness’s false statements as required.
a.) Keep falsely testified that document 101i represented “the value of all payments made,” payments made back to the individual in a spot, the value of their position, and whether or not that account had a net gain or loss (Doc 487 #3876). This was false. In Reynolds’ post-trial affidavit, he admitted that significant exculpatory payments to i2g distributors—amounting to $28 million—were “filtered out” of 101i. This amount was an 80% greater “value of payments made” than represented in 101i. The whole narrative of a pyramid scheme with a 96% loss rate was false when the losses were unfounded. The government admitted that commission “payments” were filtered out of 101i. 101i had no validity. Keep similarly misrepresented 101F as All I2G Gains and Losses despite being a mirror of 101i.
The government knew that Keep and Reynolds’ statements that 101i included “all payments to I2G distributors” were false, given the admission that payments were “filtered out” of 101i, which Reynolds’s affidavit affirms. Furthermore, FBI agent McClelland testified that Reynolds’s records indicated $40 million in commissions. The government knew the $8 million as total gains reported in 101i was false and manipulated.
b.) Keep and Reynolds falsely testified that all the government’s data (until March 201) belonged to I2G (Doc 498 #4164). However, Reynolds had previously testified that I2G was closed by 2015 (Doc 498 #4249, 50). Additionally, Reynolds falsely stated that he stopped working with Maike in 2015. The government knew these statements were untrue, as they possessed seven spreadsheets as proof that Reynolds worked with Maike until March 2017. Furthermore, emails between Reynolds and Maike confirm that Reynolds continued work with Maike after the closure of I2G, facilitated the launch of Xtg1 in September 2015, and managed the data until March 2017. (See Attached)
c.) Reynolds made false statements that 101i included all commissions earned by I2G distributors. (Doc 487 #3876) He later admitted that exculpatory commissions and transactions were “filtered” out of 101i. The government acknowledged the “filtered” commissions in 101i in its appeal response (Doc 99 pg 77, 78) yet failed to correct the false testimonies supporting its dramatically exaggerated I2G loss representations.
d.)Agent McLellan provided false testimony regarding i2G sales and commission totals on summary charts 230 and 232. His testimony indicates that he was aware of $40 million in commission payments to i2G distributors seven years before the trial (document 688, #9052). Reynolds’s affidavit supports the $40 million in total commissions (Exhibit 7240). Despite this data, the government falsely represented $8 million in total commission payments in 101i.
e.) Reynolds provided false testimony by stating that “gifted positions” would be marked as “unpaid” in his system. (Doc 498 #4170)
However, the truth was that “gifted” packages were displayed as “fully paid” in 101i, leading to millions of dollars in inflation of the loss figures. The government’s awareness of this discrepancy is evident from its detailed inquiries about “gifted position” and “gift certificate” purchases, as well as its references to 275 “gifted” emperor packages belonging to Jason Syn in its summary chart 229. Despite the assertion that these 275 packages were gifted, the government claimed $1,380,486.25 in losses for these same packages in 101i.
f.) The Government and Reynolds knew that Xtg1 contaminated the crucial I2G data until March 2017.
Emails confirm that Reynolds knew about Xtg1, helped launch it in September 2015, and stored the data until March 2017. Despite this, Reynolds testified that he stopped working with Maike before January 2015. The government knew Reynolds’s testimony was false as it subpoenaed Maike’s emails, revealing his ongoing relationship with Reynolds, leading to the “new project” launch in August 2015 and running until March 2017. The government misled the court by allowing Reynold’s testimony and insisting that Xtg1 data between 2015 and 2017 belonged to I2G. The government encouraged false testimony by allowing Reynolds to testify on I2G data extending to 2017, despite his earlier statement that I2G was closed by January 2015.
g.) McClelland misrepresented summary data in his summary charts (230, 232).
The government and the district court acknowledged that the sales summary charts (230, 232) were improper, and no underlying data supported the assumptions and calculations (Docs 99, 102, 103). Specifically, the profit and loss representations in 232 omitted $28 million in paid commissions, even though McClelland testified that Reynold’s records showed $40 million in commission payments. (Doc 699, #9052). The government admitted that commissions unfavorable to their profit and loss calculations were “filtered” out of 101i just one week before the trial. The same commission data was filtered out of summary charts 230 and 232.
The extensive testimony based on this false data indicates the government’s involvement in suborning perjury. They continued to support McClelland’s false summations (Exhibits 230, 232), fully aware that significant commissions had been excluded. Furthermore, the government allowed the presentation of known false summary charts (230, 232) and testimony provided by an FBI agent.
4.) Manipulation of Exonerating Data
The government manipulated data to hide $28 million in commission payments to alleged victims to support a false 97% loss in 101i. Despite its acknowledgment that the commission data was filtered out of 101i and 101F (Doc 99, pp. 77, 78), multiple prosecutors have conspired to maintain the false 97% loss rate narrative.
5.) Brady Violations
—Anzalone’s computers turned over to the government contained emails that could have proven the innocence of Hosseinipour and Barnes, as they showed the establishment of a separate company, XTG1, in which the two were not involved. The trial data included over two years of information from XTG1, when I2g was closed, making it impossible for them to have been part of any ongoing conspiracy as represented. Since these emails were exculpatory, failing to disclose them constituted a Brady violation. In addition, significant impeachment evidence about Anzalone’s post-I2G involvement in three Ponzi schemes and before striking his plea deal conceivably influenced his plea deal. The impeachment emails were required to be turned over. Failure to turn these over to defense were Brady, Giglio and Jenks violations.
6.) Witness Tampering For Seven Years
The government claims that it calculated losses using sources other than 101i. However, after a seven-year campaign involving witness tampering, which included over 60 fraud notifications sent to distributors before the trial, and two highly biased FBI surveys labeling I2G as fraudulent (Doc 701#1, 53, 54, 56), only $1.5 million in direct claims (Doc #2, #3) were reported. This amount is significantly less than the $5 million in losses claimed through 101i (Doc 718#3). If the 97% loss rate were accurate, the total claims received should have exceeded $38 million.
The prosecution’s fraudulent actions are not a matter of speculation. This was a data-driven case, so all of its misrepresentations are disproven through the data. Additionally, Reynolds’ sworn statement supports data manipulation and perjury subornation. Despite ample opportunity to do so, the prosecution never corrected the false data. The convictions could not have existed without the false statistical representations that dominated the trial.
False Evidence Fraud on the Court
Long ago, the Supreme Court made clear that deliberate deception of a court and jurors by presenting known false evidence is incompatible with “rudimentary demands of justice.” Mooney v. Holohan, 294 U.S. 103, 112 (1935). In Napue v. Illinois, 360 U.S. 264 (1959), the Supreme Court reiterated that a conviction obtained through the use of false testimony, known to be such by representatives of the State, is a denial of due process. The Court further ruled that there is also a denial of due process when the State, though not soliciting false evidence, allows it to go uncorrected when it appears. In cases involving false or misleading testimony, a new trial is required if “the false testimony could . . . in any reasonable likelihood have affected the judgment of the jury . . . .” Napue, 360 U.S. at 271.
The Government conceded false evidence in its appeal answer.
The government affirmed false data and “inconsistencies” in 101i and other data Keep relied upon for his analysis (appeal Doc 99, pp. 75, 77). Agent Sauber acknowledged Xtg1 as a company Maike started after I2G closed (Doc 663 #6572). He acknowledged 4,000 unique entries and over $4 million in sales processed after I2G was closed (Doc 663 6562).
The government acknowledged that exculpatory commissions were filtered from 101i profit/loss calculations (Doc 99, pp. 75-77). The exclusion of 28 million dollars in distributor gains dramatically inflated losses. Reynold produced data after the trial showing 40 million dollars in commissions paid to I2G distributors, corresponding with paid commission data from (ex7240), which the Government pulled in 2015, and with McClelland’s statements.
The government failed to disprove Reynolds’s or Keep’s false statements. Instead, its appeal answer admits to false evidence to deflect from its subornation of perjury. The government argued that Keep did not offer “false testimony” because he relied on “false evidence.” The government admits the data provided to Keep was “inaccurate” and “incomplete” (doc 99 pg 75). It acknowledged 101 inconsistencies but argued that it never claimed that 101 included all the “relevant data.” It admitted that exculpatory commissions were excluded (Doc 99 pg 74, 75) to prove that Keep and Reynolds’ statements were not false. This does not disprove the false statements; it only demonstrates the government’s knowledge of 101i’s unreliability and why the Court’s decision to allow 101i and all the tainted spreadsheets was an error (Ref: R.681:#8311; R.498:#4164).
The government admits its duplicity by arguing that Keep “only analyzed the data they gave him and did not opine on the accuracy or completeness of the underlying data.” (id) However, Keep did “opine” on the accuracy of the data or when he claimed that certain I2G determinations would depend on “which data” you looked at. (Doc 487 #3956, #3958) and that 109F data was “wrong.”(Doc 487 #3956, #3958) Keep’s acknowledgment of “false data” refutes the government’s argument that he did not opine on it.
Despite admitting to false I2G data, Dr. Keep emphasized the necessity of accessing a company’s data to conclude a pyramid scheme (Doc 487 #3926). He stated that he never had access to data like this before (Doc 487 3808, 497#3995,96, 98). Reliance on the “data” was referenced over 100 times (Doc 487 3747, 52, 3805, 3826, 27, Doc 487 #3844, 45, 47, 70, 73, 84, 85, 3808, 3925, 26). Since the government admitted the data given to Keep was false, and Keep acknowledged I2G data was false, his pyramid scheme analysis and entire testimony were unreliable and invalid.
The government acknowledged that Reynolds provided false testimony regarding “all commission types” included in 101i. This acknowledgment came when they admitted that “commissions” and “transactions,” necessary for accurate gains/loss representations, were excluded from 101i (document 99, pages 74-75). They conceded that 101i is false. “This exchange made clear that Reynolds’s system did not track all transactions, and thus it was possible that Exhibit 101i did not account for all gains and losses by I2G participants” (id).
The government argues that the data’s falsehoods or “incompleteness” was always disclosed and that they never claimed to make complete disclosures in 101i. The illogical arguments to disprove the subornation of perjury only argue the unreliability of 101i. (id) The point is moot. Reynolds admits that his statement at trial was false in his affidavit, proving that the government suborned perjury.
In his affidavit, Reynolds confirmed two types of commissions were excluded from 101i. 1.) commissions used via “gift certificates” to purchase products 2.) commissions transferred to other distributors (for initial product purchase or other)
These commission types included an additional $28 million paid to the alleged victims, which was 80% greater than represented at trial. The deliberate discrediting of this data allowed the government to freely portray non-witness promoters as victims while concealing their actual substantial commission payments. For example, nonwitness Pepito allegedly lost over $100,000 (Document 718, #1) when she received and withdrew $90,000 (Document 718, #3 ex 7240). This crucial information was withheld from the jury, with no opportunity to cross-examine non-witnesses (based on McClelland hearsay) about their commission payments. The court and the jury were falsely influenced, as evidenced by the court’s description of Pepito as a “big deal” and “a poor lady who got suckered out of a lot of money” (Document 718, #2, p. 48). The data in 7240 or the 1099 statements contradict the reported losses of every alleged victim investor.
The government admits that commissions were “filtered” but claims that does not prove that they asked Reynold to “filter” it. However, Reynold testified that he pulled data as requested “until the day you asked for it” (Doc 497 #4062, Doc 497#4067). Even the Court recognized the self-serving purpose of the “replacement data” (101F) because it was “much, much more helpful to you because it showed what you wanted” (Doc 718 #11345).
The government attributed false statements to Reynolds that exculpatory 7240 data “had problems” and was not good. (doc 718 11354, 55) Reynolds’s affidavit affirms he never said that.
The government failed to refute Reynolds’ false testimony that a “gifted position” would result in a 0 in the “ValueAll Purchases” in 101i (Doc 497 #4062) or would reflect that no purchase occurred. This was false. Hundreds of “gifted” emperor packages that could have “no loss” appeared as a“fully paid” loss of $5019.95. This dramatically inflated losses in 101i. This contradicted his previous statement that his system would not track gifted positions (Doc 497 #4034).
The government argues that Hosseinipour should have cross-examined Keep and Reynold about the spreadsheet falsehoods despite its claims that the data was so complicated that only “Jerry Reynolds” could interpret them correctly, but laypersons like the defendants could not understand it (Doc 718 #11354 11343)
The Government 101i was produced as US-126786 on 6/28/22, days before trial with others with “hidden dates” (Doc 498#4232,4116, 4226). Maike’s defense objected that they had no time to verify the over 23,000 entries for accuracy. (doc 497 #4079) Reynold testified that he did not have time to validate the exhibits for dates. (Doc 497#4079, 4082) However, the government was aware of the dates of its data requests, which exceeded the indictment timeline by over two years when I2G was closed.
The Government argued that Hosseinipour should have discovered the false evidence sooner. However, the government should not be rewarded for its duplicity. Hosseinipour alerted the court to false evidence in her motion to stay pending appeal (doc 635) and her restitution filing. Barnes alerted the court in his sentencing memorandum and restitution filing.
The government validated Reynold’s 7240 data (Doc 718 11343, 44) as an exhibit it planned to introduce. It stated that Jerry Reynold’s data was not the issue, but the defense could not interpret it without Reynolds. (Doc 718 #11345) The government’s references to“uncorroborated credits” and “unsubstantiated” in its appeal response are dishonest and self-serving in light of Reynold’s corroborating affidavit, which substantiates it. The court even recognized the duplicity in replacing 7240 with a spreadsheet 101F, as it was “much much more helpful to you because it showed what you wanted.” (Doc 718 #11345)
MR. SEWELL: — is that it’s not that this data is incorrect. It is that Mr. Meyer’s interpretation of the data is incorrect. If there’s anything we learned from the trial is that Jerry Reynolds’ spreadsheets are not for, you know, the layperson to come in and say, “Well, I think it means this.” So this data can come from someone like Jerry Reynolds explaining what all these code numbers mean (Doc 718 #11354)
THE COURT: Well, if this data has been aggregated in a form that is usable — or understandable by me, I’ll consider it, but so far I don’t — I haven’t — I understand the concept. (doc 718 11354, 55)
MR. SEWELL: He’s not here, but, I mean, if we need to get an affidavit from him and get him through. But the important point is that that document was, at trial, turned into 101-F, because in the meetings with Jerry Reynolds — we had meetings with Jerry Reynolds and were preparing for trial. That 7240 was going to be an exhibit, and Jerry Reynolds noted again and again that his staff had prepared the document without his involvement. That was an early subpoena that was issued. And he said, “This document needs to be corrected. This document has problems.” And so we didn’t get into all the details. He produced the corrected version that was much, much more helpful, and that was 101-F that was used at trial.
THE COURT: It was much, much more helpful because it showed what you wanted. Listen, I’ll consider what their arguments are from the document. If you can produce an affidavit from Mr. Reynolds that says this — that 7240 is inaccurate and instead 101-F is more reliable or is accurate, then that’s fine, but — MR. SEWELL: And I think — THE COURT: Look, I’m going to ask then, somebody for the defense, explain to me — show me what 7240 is and explain what your argument is about what this document shows. Doc 718 #11345)
Witness Tampering For Seven Years
The government claims that it calculated losses using sources other than 101i. However, the loss calculations and witness statements were compromised due to a seven-year campaign of witness tampering. Biased FBI surveys were sent to the distributors, labeling I2G as a fraud. An email campaign was also conducted to persuade distributors that they were defrauded, including 60 “Victim” Notifications sent to I2G distributors before the trial (Doc 701#1, 53, 54, 56). Despite this, only $1.5 million in direct claims (Doc #2, #3) were received, far less than the $5 million in losses indicated claimed through 101i (Doc 718#3). If the 97% loss rate were accurate, the claims received should have been over $38 million, not a mere 1.5 million prompted by ongoing influence.
The Government Knew its Data Exceeded the Indictment Timeline
The government admits to false evidence but argues that it cannot be proven that it knew the data was false. However, Agent Sauber acknowledged many “inconsistencies” that the government knew would compromise the reliability of the data (Doc 663 6571-6593).
The Court repeatedly questioned the relevance of exhibits that breached the indictment timeline. (doc 498 4097,98, Doc 663 6593) For example, An XTG1 enrollment from Sept 29th, 2015, was represented as an i2G member who received “favorable placement” despite being a “late-joiner.” (Doc 498 #4097,98) The Court admitted that the timeline breached exhibits long after I2G was closed because the government claimed it belonged to I2G. Objections for speculation, relevance, and falling outside the timeline were denied. Similarly, XTG1 entries, packages, and sales activity after I2G was closed were represented as belonging to i2G.
The government clearly understood “gifted positions” (Doc 497#4034 Doc 663 6570-71), “gift certificate commissions,” and “fund transfer commissions” (Doc 498 #4220, 21 4216 Doc 663 6572). Reynolds described “gift certificates” as”commissions” that were “advantageous” and could be used to “pay for orders or use for other things” (Doc 498 #4216). The government admitted to excluding these commissions from 101i, which they knew would inflate losses and hide gains.
The government’s deception is proven through its exhibits. Exhibit 229 claims that Syn had 275 “gifted” packages. However, in 101i, all 275 of Syn’s “gifted” packages were represented as losses of $5019.95 each, totaling $1,380.486.25 in false losses in 101i.
The Government understood the “inconsistencies” that would inflate losses in 101i, including a.) excluded refunds (Doc 663 #6568, Doc 497 4061, 62), b.) waived auto-ships that appeared as paid (Doc663 #6573, 74, Doc 505#4550), c.) customer positions, d.) unpaid corporate positions (Doc 498 #4104), e.) customer frauds (Doc 663 #6577), and e.) XTG1 company launched in 2015 (Doc 663 6572). Agent Sauber affirmed each inconsistency..
The Government Knowledge of XTG1/ Brady Violations
The government’s exhibits demonstrated its knowledge of XTG1. An email from Hosseinipour to Maike in November 2015 expressed anger over the launch of Xtg1. An email from Logan to Susan Anzalone voiced outrage over the launch of XtG1. Emails obtained from Richard and Susan Anzalone’s computers documented Xtg1’s launch, which was never turned over to the defense.
The September 2015 launch of XtG1 occurred after I2G closed. Therefore, two years of data presented at the trial belonged to XTg1 and was unrelated to I2G. Since Hosseinipour and Barnes were not part of XTG1 and the emails were never disclosed, this constituted a Brady violation. One such XTG1 launch email discovered by Hosseinipour was submitted with her restitution brief.
Similarly, Xtg1 compromised the data (from 101d, 101b, 101f, and 101g) and falsified every statistical i2G representation, including total distributors (Doc 487 # 3849, #4139), total sales (Doc 487 #4057), distributor levels (Doc 487 3848,#4138), and product packages (Doc 487 #4056, pg 47).
The trial was marred by the pervasive use of false data, invalidating all of Keep’s pyramid scheme analysis and government representations and tainted every witness’ testimony.
The conviction should be reversed under Napue and in the interest of justice. If the Government had not presented false testimony and evidence and concealed exonerating information, all of its claims would have been disproven, and the trial outcome would have been different.
The FTC is the only sanctioned body intended to determine whether an MLM company is a pyramid scheme through the administrative process required under the FTC Act. Pyramid schemes are categorized under the FTC Act as deceptive business practices, which require notice to MLM companies and allow them to respond and make necessary changes. Congress did not intend for the DOJ to manipulate statutes to create new criminal laws and bypass the FTC regulatory process. The government further invented a conspiracy crime based on mlm distributors “staying with an MLM company.” This dangerous legal invention could entrap any of millions of innocent MLM distributors.