A key government witness against former Brocade CEO Gregory Reyes has recanted her testimony, according to a defense motion for new trial filed Friday.
During trial, Brocade finance employee Elizabeth Moore told jurors that people in her department did not know about backdating at the company, because they had been deceived by Reyes and HR chief Stephanie Jensen. Moore was the only finance employee prosecutors called to the stand, Reyes' lawyers said in the motion.
But Moore has since told several people that her testimony was inaccurate: Moore knew about backdating at Brocade, as did several of her colleagues in the department -- and none of them believed there was anything wrong with it, according to the motion. The individuals who have spoken to Moore since the trial have filed declarations on behalf of Reyes' motion, which was penned by Richard Marmaro, a partner at Skadden, Arps, Slate, Meagher & Flom.
Reyes was convicted in August on 10 felony counts related to backdating stock options. In preparing for the subsequent Jensen trial, the government tried to interview Moore. But instead of coming in to talk, Moore met with her original lawyers at Wilson Sonsini Goodrich Rosati -- longtime corporate counsel for Brocade.
Wilson Sonsini subsequently withdrew from representing Moore. She hired Duane Morris partner George Niespolo instead, who indicated she would assert her Fifth Amendment rights in any interview for the Jensen case. She was not called at Jensen's trial, which ended in convictions for falsifying company books and conspiracy.
"As a result of revelations by Ms. Moore regarding her testimony at the Reyes trial, WSGR withdrew from representing Ms. Moore," Marmaro's motion states.
"The only reasonable inference from Ms. Moore's retention of new counsel and her invocation of her Fifth Amendment rights is the one consistent with her statements to [a witness]: that her testimony at the Jensen trial would have been materially different from her testimony at the Reyes trial," he wrote.
Assistant U.S. Attorneys Timothy Crudo and Adam Reeves led the Reyes and Jensen prosecutions. Reached for comment on the Reyes motion Monday, Crudo said little.
"We can and we will respond in writing, when we file our brief," Crudo said.
Niespolo confirmed that he had been recently retained by Moore, but declined to talk in detail about the substance or merits of the defense motion.
"I'm confident any suggestion Elizabeth Moore perjured herself is wrong," Niespolo said. "That's just not the case."
Motions for a new trial are usually shot down, said Robert Weisberg, a professor at Stanford Law School who teaches a class on white-collar defense. But Weisberg said he could see Judge Charles Breyer taking this one seriously -- at least enough to order a hearing.
"This is a doozy, I gotta admit," the professor said, adding that the government could argue that Moore already waived her Fifth Amendment rights because she testified at the first trial.
Reyes' lawyers contend that Crudo sent an e-mail to Marmaro and to Jensen lawyer Jan Little at Keker & Van Nest a week before jury selection in the Jensen case, informing them that Moore had asserted her Fifth Amendment rights. Marmaro said in the motion that he urged prosecutors to investigate.
"To date, defense counsel has not received a response from the prosecution, and significantly, Ms. Moore was not called to testify in the Jensen trial," the motion states.
Marmaro is urging Breyer to prod the government into granting Moore immunity, so she can discuss the matter.
Marmaro has contended in the past that former Brocade CFO Michael Byrd, who has been charged civilly by the SEC, was the actual mastermind of the backdating scheme.
