In the proceedings conducted on Monday, a federal judge in Colorado declared a mistrial in the ongoing fraud case brought forth by prosecutors against employees accused of facilitating fraudulent activities for their employer’s clients. The judge, U.S. District Judge Raymond P. Moore, informed the jurors, selected the previous week, that their services were no longer required due to an unspecified hacking incident that occurred over the weekend.
This mistrial marks the second instance of trial disruption, as the proceedings were already delayed the previous week due to a burst water main that necessitated the closure of the federal courthouse.
Judge Moore expressed the unforeseen challenges faced during the trial, stating, “There’s a saying, ‘When it rains, it pours.’ It’s pouring again.” He elucidated that a cyberattack incident over the weekend had compromised the parties’ ability to proceed with the trial but did not provide further details regarding the nature of the hack or its specific targets. The judge announced the rescheduling of the trial for a later date.
Notably, Monday was originally slated for the commencement of opening arguments in the prosecution of Robert Reger and David Lytle, former employees of Epsilon Data Management. The charges against them pertain to wire fraud and mail fraud connected to their direct-to-consumer marketing activities for the company, where they allegedly provided marketing services for entities engaged in fraudulent schemes.
Epsilon Data Management had previously entered into a deferred prosecution agreement with the U.S. Department of Justice in 2021, resulting in $150 million in penalties and victim compensation.
The case has been beset by persistent delays, with the trial initially scheduled to commence in January of the preceding year. However, last-minute document production by Epsilon on the eve of the trial prompted a delay. Judge Moore subsequently ordered additional document production, invoking the crime fraud exception in response to the application of attorney-client privilege by Epsilon.
After finally selecting a jury on January 16 for the trial, the court experienced further disruptions. Following preliminary instructions to the jury on January 17, a fire alarm forced the evacuation of the building. Subsequently, the courthouse closure for the remainder of the week was announced due to a burst water main, affecting information technology and communication systems.
Judge Moore expressed gratitude to the jurors for their patience amidst the trial’s unusual circumstances, acknowledging the “delay, the strangeness of what was occurring last Wednesday, the on-again-off-again nature of the trial,” and their return to discover that the trial would not proceed as planned.
Representatives for the involved parties declined to offer comments.
The government is represented by Alistair Francis Reader, Ehren P. Reynolds, and Rachael L. Doud of the DOJ’s Antitrust Division and Civil Division, respectively, along with Rebecca Susan Weber of the U.S. Attorney’s Office for the District of Colorado.
Robert Reger is represented by Brian R. Leedy, Kevin M. McGreevy, and Gordon Mehler of Ridley McGreevy & Winocur PC and Walden Macht & Haran LLP.
David Lytle is represented by Melanie S. Morgan of Morgan Pilate LLC.
The case is USA v. Robert Reger, case number 1:21-cr-00192, in the U.S. District Court for the District of Colorado.
