With JM Out Of The Picture, Prosecution Proceeds Against Five Star

PHOENIX – One observer described the events taking place in Courtroom 604 of the Sandra Day O'Connor Federal Courthouse yesterday as "high drama," but that term barely scratches the surface.

The day began shortly after 8:30 a.m. with reported major tactical differences between Assistant U.S. Attorney Paul Rood and U.S. Department of Justice attorney Kenneth Whitted, both of whom have been active in prosecuting the case against Five Star Video LC, Five star Video Outlet LC and its employees, Chris Ankeney and Ken Graham, and JM Productions and its principal Jeff Steward. Voices were reportedly raised, but this reporter was not in the room to observe that.

Just a few minutes later, however, the government was ready to offer a deal. Since U.S. District Court Judge Roslyn O. Silver had ruled last week that the feds could not force Steward to take the witness stand to authenticate certain business records obtained from JM under subpoena, the government had a real problem on its hands to prove that JM had indeed shipped the four DVDs in question to Five Star, which DVDs eventually wound up in the hands of FBI Special Agent Tod Price in Falls Church, Va.

Therefore, once Judge Silver had convened court for the day, Rood proposed to offer Five Star a last-minute plea deal: In return for Ankeney's and Graham's cooperation in authenticating the JM records, the government would agree to let the corporation plead guilty to counts 1-4 of the indictment, which charged interstate transportation of obscene materials; dismiss the charges against Ankeney and Graham personally; accept a $20,000 fine from the corporation and place it on five years' probation, during which time it would agree to go out of business entirely; and immunize the corporation against having to face similar obscenity charges in Virginia, where the allegedly obscene DVDs had been received.

Judge Silver, however, was obviously none too happy. Trial was supposed to start on Tuesday, a panel of potential jurors had been chosen, and here the government was attempting to circumvent that process and possibly force a delay in the proceedings.

H. Louis Sirkin, counsel for JM Productions, was none too happy about the turn of events either.

"I can't oppose their [the government's] offer," Sirkin told the court, "but to go to trial at this time would prejudice my client."

Sirkin went on to explain that his defense strategy had been based on the fact that all of the defendants would be tried together, and that none of them would suddenly be transformed into witnesses for the government, even for the limited purposes of identifying business records.

"We came this morning prepared for trial in a certain way," he said. "We've been sandbagged."

Attorney Allan Gelbard, representing Jeff Steward personally, agreed.

"We haven't had a chance to interview" Ankeney and Graham, added Jennifer Kinsley, co-counsel for JM – a process she considered to be crucial for preparing an adequate defense.

Judge Silver inquired why the government was proposing this plea arrangement so late in the game?

Rood replied that it was because of the government's continuing problem with authenticating JM's business records – a fact that would take on crucial significance later that afternoon – and that he had not received permission from his superiors until that morning to extend the offer to Five Star.

Rood also noted that neither Ankeney nor Graham had been in trouble with the law before, and he suggested that accepting a plea from Five Star would send a message to other adult video retailers and distributors in the area that they should take another look at the types of videos they were selling.

Judge Silver was not convinced.

"This is a sad state of affairs for everyone," she stated. "There will be no pleas taken at this time by this court."

However, Judge Silver did agree to take the plea offer under advisement and rule on it later ... which created yet another problem for the JM defense.

"We don't know what direction to go in," Sirkin stated, adding that the specter of a possible plea agreement hanging over the proceedings was unfair to both his and Gelbard's clients. "We need to know ... what the evidence will show" in order to prepare a proper defense, he added.

"I am not inclined to accept plea agreements whatsoever," Judge Silver said finally, and prepared to begin picking a jury.

The remainder of the morning and early afternoon were then spent culling a jury panel of 15 from the 59 potential jurors – 12 jurors who would eventually decide the case and three alternates, any of whom would serve if one or more of the panel jurors were unable to fulfill his/her duties. All, however, would hear the evidence as it was presented.

Even the jury selection was not without its surprises, though. Judge Silver asked various questions of the panel, such as whether any of them had relatives in law enforcement, or whether they personally knew any of the parties involved, or whether any of them had been involved in criminal or civil legal proceedings themselves. Several identified themselves in response to some of the queries, but in each case, when the judge asked whether their previous experiences would affect their ability to decide the case fairly, each said it would not.

However, when Judge Silver told the potentials that it would be their job to judge the facts of the case and hers to judge the law and instruct them on that law and how to apply it, one juror objected.

He was, he said, a libertarian, and it was his understanding that the jury could be the judges of both the facts and the law of the case. However, when Judge Silver asked him if he could accept her instruction only to judge the facts and not the law, he said he could.

The principle to which that potential juror was referring is known as "jury nullification," a concept that was affirmed by Chief Justice John Jay in the 1794 case of State of Georgia v. Brailsford, where the Chief Justice wrote in his opinion, "It is presumed, that juries are the best judges of facts; it is, on the other hand, presumed that courts are the best judges of law. But still both objects are within your power of decision… you [juries] have a right to take it upon yourselves to judge of both, and to determine the law as well as the fact in controversy."

The jury selection proceeded fairly uneventfully, although several observers took note of the relatively large number who had been convicted of DUI, and the number who at some time had owned trucks which had either been stolen or burglarized.

After the luncheon recess, the judge allowed Whitted and Kinsley to conduct a short voir dire (questioning) of the potential jurors for their respective sides.

Whitted asked which jurors had not lived in Arizona during 2005 and 2006, the years in which the current controversy had unfolded, and which jurors did not live within 50 miles of Phoenix. Those questions undoubtedly went to the issue of "community standards" – one of the three prongs for the Supreme Court's Miller test for obscenity – and suggested that the prosecution would maintain that anyone who had lived in Arizona during the years at issue and lived within 50 miles of Phoenix would be aware of the community values of Phoenix.

Kinsley asked whether any of the potentials had talked to a friend or family member while filling out their juror questionnaire – a series of questions which the judge had used to pre-screen potential jurors for obvious conflicts and problems – and whether any had had conversations about the subject matter of the trial? Interestingly, one of the panel admitted that she had discussed the case with a relative who worked "in a porn distribution business in Cleveland, Ohio."

Kinsley also asked whether any of the jurors would feel uncomfortable watching the DVDs at issue – Filthy Things 6, Gag Factor 15 and 18, and American Bukkake 13, which Kinsley noted would contain scenes of man/woman sex, fellatio, anal sex, multiple partners and several other sexual acts. Four jurors said they would be uncomfortable watching the material, but could do so if the judge required it, while one said she would be unable to watch the features at all.

Finally, a jury was chosen, consisting of nine women and six men, and the parties began their opening statements.

"This particular trial is about truth and standards," Witten told them. He said the "truth" would be the actions of the defendants, adding, "The evidence will show ... that the defendants distributed into your community materials that are obscene [and that] will depict sexual conduct that is ... vile, perverted and profane."

Whtted also described the process by which FBI agents surfed the Internet, found Five Star's retail site and ordered various DVDs to be sent to two "cover" names in the Falls Church, Va. area. He maintained that JM had shipped those DVDs to Five Star, and that Five Star had then sent the DVDs to Virginia – DVDs which he claimed contained depictions of "sexual conduct that we feel violate the obscenity laws of the United States."

"Five Star sold sexually explicit DVDs to a government agent; there's no question about that," announced Richard Hertzberg, attorney for Five Star Video, Five Star Video Outlet and Chris Ankeney. "The government has to prove that these movies are legally obscene – and that's where the action is in this case."

Hertzberg added that the government must prove what the community standards are in Phoenix, and that he would offer evidence of what those community standards are, including the fact, he said, that comparable features were being sold even at stores located in Phoenix's Sky Harbor International Airport.

Whitted objected to that statement, and the attorneys met at sidebar with the judge to discuss the issue, after which Hertzberg quickly completed his opening statement. Jeffrey Douglas, counsel for Ken Graham, declined to make an opening, as did Allan Gelbard for Jeff Steward. However, Sirkin made one which he said would be "short and sweet" – which it was.

"The government must prove that [JM] Productions transported obscene DVDs into the state," Sirkin stated. "The government can't prove that." He then took his seat.

At that point, the judge called a recess, and after the jurors left the room, Whitted made a surprising statement: The government was moving to dismiss all charges against JM Productions and Jeff Steward.

The issue was, once again, the authentication of JM's business records. Witten had maintained that the mere fact that the government had served a subpoena on JM, and that the company had allegedly turned over certain "business records" to the government in response to the subpoena should be sufficient for the government to claim that those records were in fact official business records of JM Productions.

Normally, in legal proceedings, any documents introduced into evidence must be authenticated by someone with personal knowledge of such documents, who can attest to their truth and accuracy; otherwise, the documents would be considered "hearsay" and be inadmissible.

One acknowledged exception to the hearsay rule is for business records, where records kept in the normal course of business can be introduced in a trial even though the person who prepared such records has not been called as a witness to say that he/she had prepared them. However, in such a case, someone must testify that the records at issue were in fact kept in the normal course of the business that's at issue in the proceedings – and the only person who could possibly do that in this case would be JM owner Jeff Steward.

However, Steward had steadfastly refused to so testify, maintaining that for him to be forced to do so would be a violation of his Fifth Amendment right not to be a witness against himself – and that's where the government's case against him and JM struck a wall. Earlier, the prosecution had tried to get around that problem by dropping the charges against Ankeney and Graham in exchange for their testimony that they had received copies of the records in question from JM, but the judge had scotched that tactic. And if Whitted and Rood couldn't prove that JM had shipped the DVDs at issue to Five Star, then the government had no case against him ... and therefore had to drop the charges.

"Un-fucking-believable!" was Steward's reaction to his new-found freedom, but neither he nor his attorneys were willing to discuss the development further at that point.

Judge Silver then brought the jury back into the room, noting that as they could see, there were fewer people at the defense table, but that they were instructed not to draw any inferences from that fact.

Rood called as his first witness FBI Supervisory Special Agent Tod Price, who described his actions in searching for sexually explicit material over the Internet, and ordering nine DVDs from Five Star's website, four of which ended up being charged in this case. He described how he had ordered them, by what means they were received – both by UPS and regular mail – and what happened to them once they were in the FBI's hands.

The remainder of the afternoon was taken up by playing for the jury the first hour of Exhibit 4A, also known as Filthy Things 6, and at roughly 4:30 p.m., the judge recessed the trial until 9 a.m. Wednesday morning.