Benthos Master Fund, Ltd. v. Etra
- Valerie Caproni
- 1:20-cv-03384
- U.S. District Court · Southern District of New York
- 4
In Benthos Master Fund v. Etra, Judge Caproni denied Etra’s release motion without prejudice and ordered password and financial-document production.
Aaron Etra remains subject to the court’s custody and document-production requirements. Benthos Master Fund, Ltd. received additional forensic-examination and reporting-related directives, and Etra’s counsel was required to receive the device passwords and online-account information.
What happened
Benthos Master Fund, Ltd. v. Etra concerns Aaron Etra’s request to be released from custody after the court held him in civil contempt and ordered him to produce documents and pay Benthos Master Fund, Ltd. an amount subject to possible reduction.
The court said Etra had not tried to produce five categories of required financial and business records, including account information, escrow agreements, financial communications, and service-related documents. It also addressed Etra’s Fifth Amendment requests and the forensic examination of his laptop and phones.
Judge Valerie Caproni denied Etra’s release motion without prejudice. The court required any renewed motion to address all required production and show that money in a specified account belonged to a client, and ordered Etra to provide device passwords and online-account information by specified deadlines.
The detailed version
- Benthos Master Fund, Ltd. v. Etra · No. 1:20-cv-03384
- Valerie Caproni
- Aug. 29, 2023
Background
The court had previously held Respondent Aaron Etra in civil contempt. Civil contempt is a court order intended to compel compliance with a prior order. The court ordered Etra’s incarceration until he produced documents he had previously been ordered to provide and paid Benthos Master Fund, Ltd. $145,718.49. The payment obligation could be reduced if Etra showed that he could not pay or that some amounts were exempt from Benthos’s restraining notice.
The court had also ordered Etra to provide his laptop and cellphones to Benthos for a forensic examination. In a July 5, 2023 order, the court granted in part and denied in part Etra’s request to withhold documents and information under the Fifth Amendment privilege against self-incrimination. Some requests were denied without prejudice to Etra making a specific showing, in a private filing reviewed by the court, that particular information or records could incriminate him.
Motion for Release
On July 29, 2023, Etra moved for release from custody. He relied on his claimed substantial compliance with the contempt and Fifth Amendment orders and his claimed inability to pay Benthos. After a status conference on August 29, 2023, the court denied the motion without prejudice.
The court stated that Etra had made no effort to produce five categories of information and documents:
- An accounting of all funds received from legal, paymaster, escrow-related, or other services from August 1, 2017, through the present;
- Complete and final escrow agreements for the 41 identified clients;
- Communications about his finances and Benthos’s judgment from August 13, 2020, through December 14, 2022;
- Documents concerning his legal, paymaster, escrow-related, or other services from August 1, 2017, through the present; and
- A list of all financial accounts from August 1, 2017, through August 2, 2022.
The court required any renewed release motion to address all documents and information Etra had been ordered to produce. It also required evidence that the balance in Etra’s M&T -7045 IOLA account belonged to a client rather than to Etra.
Fifth Amendment and Forensic Examination
The court stated that, if Etra sought to submit private filings supporting a renewed request to withhold particular documents or information under the Fifth Amendment, the court would grant him use immunity for those filings. Use immunity generally means that the compelled material cannot be used against the person in a criminal case, subject to the scope stated by the court. The court said this immunity would match the protection described by the Supreme Court in Simmons v. United States.
The court also clarified that the forensic examination of Etra’s devices was not covered by the Fifth Amendment privilege for the reasons discussed in the earlier Fifth Amendment order.
Additional Orders and Disposition
The court ordered Etra, by September 15, 2023, to provide his counsel, Daniel McGuinness, with the passwords needed to unlock his laptop and phones and a list of his online accounts with usernames and passwords for the forensic examination.
The court ordered Benthos to file a status update by October 2, 2023, concerning the forensic examination and its availability for a follow-up conference. Benthos also had to provide Etra, by September 8, 2023, with no more than three business references for its proposed forensic examiner, Greg Kelley. The Clerk was directed to mail Etra a copy of the order and close the open motion at docket entry 344.
Judge Valerie Caproni therefore denied Etra’s motion to be released from custody without prejudice and entered the additional production and forensic-examination directives described above.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.