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Jan. 7, 2011
Montgomery v. eTreppid. Magistrate Judge Cooke issues an order denying, without prejudice (since Pham, and Klar appealed), Flynn’s Apr. 9, 2010 (a) Motion to Conform Magistrate Judge Cooke’s Mar. 31, 2009 Sanctions Order to Judge Pro’s Apr. 5, 2010 Order and (b) Motion for Sanctions (in light of Apr. 5 Order). ECF 1180.
Jan. 26, 2011
Montgomery v. IRS. The U.S. Tax Court issues an order in Montgomery's pending matter:
"Upon due consideration of respondent's status report, filed January 21, 2011, in the above-captioned case, and the recitals therein concerning the present status of the related bankruptcy proceeding, it is ORDERED that the parties shall, on or before July 26, 2011, file with the Court further written reports concerning the then present status of the related bankruptcy matter."
Montgomery v. IRS, Jan. 26, 2011 Order.
February 2011
Edra Blixseth’s bankruptcy is discharged. Thereafter, she “attempt[s] to start a new technology company with Montgomery.” According to Blixseth, “I thought he had some good new software. … He was in bankruptcy at the time but he formed Pacific Coast Innovations, Inc. ("PCI") to own and market the technologies with other partners.” See Blixseth v. Yellowstone Mountain Club LLC, et al., No. 12-35986 Doc 87-4 at 18 (9th Cir.).
Feb. 19, 2011
The New York Times publishes a lengthy article about Montgomery and his alleged activities relating to US national security. See Eric Lichtblau and James Risen, “Hiding Details of Dubious Deal, U.S. Invokes National Security,” New York Times, Feb. 19, 2011. That same day, the New York Times also publishes a timeline of significant events regarding Dennis Montgomery. See “Boom Time to Bankruptcy,” New York Times, Feb. 19, 2011.
Mar. 31, 2011
Montgomery Bankruptcy. James Rund (Bankruptcy Trustee) provides a “Procedural Summary Through March 31, 2011.” See In re Dennis Montgomery, ECF 247. This summary includes (among others) the following notations:
“The Trustee has been unable to complete the Meeting of Creditors because the debtors [i.e., Brenda and Dennis Montgomery] have asserted their Fifth Amendment rights not to incriminate themselves. In addition, the debtor's son-in-law, Istvan Burgyan, asserted his Fifth Amendment rights at his 2004 examination. The Trustee has made a total of three criminal referrals in this matter. The Meeting of Creditors is currently continued to April 6, 2011.”
April 18, 2011
Desert Palace Litigation. A Fifth Joint Status Report is filed in the Desert Palace adversary proceedings pending in Montgomery's bankruptcy. Per that report:
Update for April 26, 2011 Status Conference: Defendant continues to be unable to respond to Plaintiff's discovery for the [reasons set forth in May 13, 2010 Status Report - i.e., docs at issue "now in the possession of, and being reviewed by, the United States Department of Justice and others"]. ...
See Desert Palace v. Montgomery, ECF 23.
May
June 27, 2011
Flynn Bankruptcy Litigation. Flynn, Montgomery’s former attorney and now creditor, files in Montgomery’s bankruptcy proceedings, a “Motion For Summary Judgment or in the Alternative for Partial Summary Adjudication.” See Flynn v. Montgomery, ECF 84 (Bankr. C.D. Cal. June 27, 2011). In his Memorandum in Support of the motion, Flynn alleges that:
"[T]he undisputed evidence demonstrates the reason Mr. Montgomery has failed to satisfactorily explain what happened to his software technology under § 727(a)(5) is because he is presently attempting to defraud his bankruptcy estate and his creditors, in violation of 11 U.S.C. § 727(a)(2), by profiting from assets that should be property of his bankruptcy estate. For these reasons, the Debtors' discharge under § 727 should be denied.
If this Court does not deny the Debtors' discharge under § 727(a)(2) or (5), then the Court should nevertheless declare Mr. Montgomery's debt owed to Plaintiff pursuant to the Sanctions Order is non-dischargeable under 11 U.S.C. § 523(a)(6).
ECF 85, at 23. Montgomery will oppose the motion on Nov. 15, 2011. The Bankruptcy Court will later grant this motion, as to Dennis Montgomery, on Dec. 27, 2011.
July 29, 2011
Montgomery v. IRS. The U.S. Tax Court issues an order in Montgomery's pending matter: xxx
"Upon due consideration of respondent's Status Report, filed July 25, 2011, and the recitals therein concerning the present status of petitioners' related bankruptcy proceeding, it is ORDERED that, on or before January 25, 2012, the parties shall file further written reports apprising the Court of the then present status of the related bankruptcy proceeding."
Montgomery v. IRS, July 29, 2011 Order.
Aug. 11, 2011
Desert Palace Litigation. A Sixth Joint Status Report is filed in the Desert Palace adversary proceedings pending in Montgomery's bankruptcy. Per that report:
Update for August 23, 2011 Status Conference:
Plaintiff has recently secured and (submitted to counsel for Defendant) documents attendant to Defendant's Request for Production of Documents. As these documents (17 pages) utilize internal codes promulgated by Plaintiff, it is possible that Defendant may need some time to digest this information. It is also possible that counsel for Plaintiff may need to assist counsel for Defendant in analyzing this material.
The problems counsel for Plaintiff has experienced in securing the material attendant to his Request for Production of Documents is an entirely different story and, without a doubt, is getting more ridiculous by the minute."
See Desert Palace v. Montgomery, ECF 23 at 4. Desert Palace then describes the immense challenges he is facing and the daunting prospect of reviewing 100+ boxes of documents currently stored in a warehouse in an attempt to find potentially responsive materials, before concluding:
Counsel can not even predict how long it will take to examine 100+ boxes under these conditions (days?; weeks?), however if there is no other way to obtain the documents he requires, he will have to do it.
Id. at 4 (and next added page).
Aug. 29, 2011
Montgomery v. eTreppid. The Ninth Circuit hearing the Pham/Klar appeal of Judge Pro's Apr. 5, 2010 order (re: sanctions) issues an order that submission of case is deferred in light of fact that the parties agreed to mediation during oral argument. ECF 1185 (referencing Ninth Circuit Nos. 10-15958 and 10-15960) .
Sept. 29, 2011
Desert Palace Litigation. The California bankruptcy judge issues an order "Granting Order assigning matter to mediation program and appointing Mediator" in Desert Palace's adversary proceeding against Montgomery. Desert Palace v. Montgomery, ECF 32.
October 2011
According to a declaration he will file in November 2011, Dennis Montgomery “suffer[s] a ‘mini’ stroke. I also suffer from a brain aneurism. I am currently under a neurosurgeon and other doctor's care. I am undergoing testing and treatment.” See Flynn v. Montgomery, ECF 105 at 3 (Nov. 15, 2011).
Nov. 15, 2011
Flynn Bankruptcy Litigation. Montgomery files his Opposition to Flynn’s June 27, 2011 Motion for Summary Judgment. See Flynn v. Montgomery ECF 103. In his Declaration filed in support of the Opposition, Montgomery asserts (among other things) that he asserted the Fifth Amendment during his deposition because of threats made by Flynn:
3. I have asserted my Fifth Amendment privilege not to testify on certain issues, only because I was informed by my counsel that Mr. Flynn stated that the U.S. Attorney in Montana was investigating me for reasons unknown, and that a grand jury indictment was likely.
4. I have heard nothing from any government official on this, and now believe it was a lie perpetrated by Mr. Flynn to prevent me from being able to adequately defend myself. I will now testify on the matters relevant to this adversary proceeding without asserting the Fifth Amendment, except as to matters involving casino-related proceedings in Las Vegas, Nevada, and given the constraints of the United States Protective Order ("US Protective Order"), a true and correct copy of which is attached hereto as Exhibit "A" and incorporated herein by reference.
See Flynn v. Montgomery, ECF 105 at 2. Montgomery also asserts that he turned over the technology at issue to his prior counsel (Liner Yankelvitz) and,
“To the best of my knowledge, the U.S. government is in possession of the software technology. They took, and currently have possession of, several hard drives, CDs and documents from Liner. Mr. Flynn is aware of this. A true and correct copy of an email I received from Mr. Eisenberg, my bankruptcy counsel, with attachments, is attached hereto as Exhibit "B" and incorporated herein by reference. This document shows that the U.S. Government took certain files, CDs and hard drives from Liner, this is only a partial list. If the government did not take it, I understand that it may also be in storage maintained by the Chapter 7 Trustee. I have not reviewed what is in the possession of the Chapter 7 Trustee because we were informed that we had to pay the Trustee for someone to monitor our inspection of documents, and we have not had the money to do so. I have been unemployed for an extended period of time at times and we lost our home to foreclosure.”
Id. at 3-4. Exhibit B, attached to Montgomery’s declaration is, apparently, an email chain that includes an email from Rapheal Gomez* of the US DOJ stating in part as follows:
As we orally have informed you, the United States has conducted an initial review of the 210 boxes of former counsel files at the Liner firm. All 210 boxes of materials, minus the documents and media pulled for further security review, require no further review by the United States.
Please find attached an inventory of the hard copies, hard drives, and CD's/DVD's that have been pulled from boxes 101 through 210 (please note that the first 100 boxes were discovery produced by eTreppid to Montgomery in the eTreppid case and were released by the United States in late January 2010).
We will forward a projected date for completion of the review of the pulled hard copies, hard drives and CD's/DVD's.”
ECF 105-2 (Ex. B). The attached inventory appears to reflect that the materials included
- 100+ hard drives
- 400+ CDs/DVDs
- 200+ boxes of documents (most of which were released; a limited number of Flynn emails and letters, Montgomery emails, and draft litigation documents were not released).
See id. at Exhibit B. Flynn will file his Reply to this Opposition on Nov. 22 (ECF 112), and the Court will grant Flynn's motion as to Montgomery on Dec. 27, 2011.
*Note: Rapheal O. Gomez will appear on behalf of the United States in the Melendres proceedings. See, e.g., Transcript of July 20, 2015 Proceedings, Melendres, ECF 1186 at 4, 8-9, 42-44.
Nov. 23, 2011
Desert Palace Litigation. Desert Palace and Montgomery file a stipulating agreeing to dismissal of the Desert Palace adversary proceeding. Desert Palace v. Montgomery, ECF 33.
December 2011
According to a later filed declaration, Edra Blixseth has raised “about $200,000” from investors to fund Montgomery personally and professionally, in connection with his new venture as Pacific Coast Innovations, Inc. ("PCI"), which he had formed to own and market his technologies with various partners. Blixseth v. Yellowstone Mountain Club LLC, et al., No. 12-35986 Doc 87-4 at 18 (9th Cir.).
Dec. 3, 2011
Desert Palace Litigation. The California bankruptcy judge overseeing the Desert Palace adversary proceeding against Montgomery (in his bankruptcy) dismisses the proceedings, per the parties' Nov. 23 stipulation. Desert Palace v. Montgomery, ECF 34.
Dec. 27, 2011
Flynn Bankruptcy Litigation. The California bankruptcy judge issues the following orders in the adversarial proceeding filed by Michael Flynn against Montgomery (and his wife):
1. Plaintiff’s Motion for Summary Judgment is denied as to Debtor Brenda Montgomery;
2. Plaintiff’s Motion for Summary Judgment as to Debtor Dennis Montgomery seeking a denial of discharge under 11 U.S.C. § 727(a)(5)* is granted;
3. Plaintiff’s Motion for Summary Judgment seeking to declare under 11 U.S.C. § 523(a)(6) that the Judgment in the amount of $204,411.00 entered in favor of Plaintiff and against Debtor Dennis Montgomery in [Montgomery v. eTreppid] is nondischargeable is granted.
4. Plaintiff is the prevailing party against Dennis Montgomery and is to be awarded costs pursuant to Federal Rule of Bankruptcy Procedure 7054 and Local Rule 7054-1.
See Flynn v. Montgomery, ECF 119 (emphasis added). Additionally, the court enters judgment in favor of Flynn:
1. The judgment in the amount of $204,411.00 entered in favor of Plaintiff Michael J. Flynn and against Debtor Dennis Montgomery in [Montgomery v. eTreppid] is hereby declared non-dischargeable under 11 U.S.C. § 523(a)(6).
2. Debtor Dennis L. Montgomery is hereby barred from obtaining a discharge pursuant to 11 U.S.C. § 727(a)(5).
See Flynn v. Montgomery, Dec. 27, 2011 Order, ECF 120 (emphasis added).
*Note: 11 U.S.C. § 727(a)(5) provides that: “The court shall grant the debtor a discharge, unless—... the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor’s liabilities[.]” 11 U.S.C. § 727(a)(6) provides that: “The court shall grant the debtor a discharge, unless—the debtor has refused, in the case—(A) to obey any lawful order of the court, other than an order to respond to a material question or to testify; (B) on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after the debtor has been granted immunity with respect to the matter concerning which such privilege was invoked; or (C) on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify[.]”
Montgomery Bankruptcy. The Court overseeing the Montgomery family bankruptcy issues a Notice of Order Denying Discharge, with respect to Dennis Montgomery. In re Dennis Montgomery, ECF 194.
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