INetGlobal Disputes Government Assertion That Attorney Should Be Disqualified From Case; Says Lawyer Not ‘Necessary Witness’

Attorney Mark Kallenbach should remain as counsel for INetGlobal because he is not a “necessary witness” as the prosecution claimed last week, an attorney for INetGlobal owner Steve Renner said today.

Prosecutors moved last week to have Kallenbach disqualified, arguing that he was attempting to be both a lawyer and a witness in the Ponzi scheme case because he had filed an affidavit that outlined what he described as his “investigation” into INetGlobal’s business practices.

Kallenbach did not enter his notice of appearance as INetGlobal’s attorney until April 5 — 11 calendar days after he filed the affidavit, prosecutors said. They asserted he was attempting to wear two hats in the case, arguing that Kallenbach’s court filings might create a conflict with the Minnesota Rules of Professional Responsibility, a local rule of U.S. District Court in Minnesota and the “Court’s inherent supervisory authority over its bar.”

Not so, said Renner attorney Jon Hopeman.

“Mr. Kallenbach is not a necessary witness as required for disqualification by Minnesota Rule of Professional Conduct 3.7,” Hopeman said in a brief today.

The filing of the affidavit by Kallenbach does not not “give rise to a claim for disqualification, because the Affidavit did not waive the attorney-client privilege,” Hopeman said. “Rather, the Affidavit presents unprivileged facts, and information contained in non-privileged documents or available on public web sites. Nowhere does the Affidavit disclose any attorney-client communication. Further, the Affidavit s disclosure of facts which, of course, are not in themselves privileged, does not waive the attorney-client privilege.”

Kallenbach’s affidavit, Hopeman said, “presents facts that can be proven in other ways, including through other witnesses, by the introduction of documents, or by reference to publicly available information.

Hopeman urged the Court to be “mindful of potential for misuse when the Government seeks to classify an attorney as a necessary witness as a crippling litigation strategy.”

He argued that the government “has not shown the disclosure of any attorney-client communication, and has not come close to meeting its burden of showing a waiver
of the attorney-client privilege.”

Kallenbach joined Hopeman in today’s brief.

Attorney-client privilege also may be an issue in the AdSurfDaily autosurf Ponzi scheme case. In an appeals brief, ASD President Andy Bowdoin, through counsel, referenced two cases filed “under seal.”

Bowdoin’s brief suggests that prosecutors subpoenaed at least two attorneys involved in the defense of ASD’s assets to appear at a grand-jury proceeding — and that a federal judge ordered the attorneys to appear.

See story on prosecutors’ motion to disqualify Kallenbach.