The court case for those charged in a Ponzi scheme that allegedly bilked at least 200 people out of $72 million and resulted in eight people charged in a 204-count indictment one year ago continued its laborious pace through Lucas County Common Pleas court on Tuesday.
Testimony centered around ongoing issues the defense has raised about the searchability of more than 4.3 million pages of discovery provided by the state.
Judge Gary Cook heard from four witnesses, three for the defense and one for the state, about issues surrounding Relativity, the program used to manage the documents.
Patty Loo, a senior paralegal at Shumaker, Loop & Kendrick, testified as an expert witness about Relativity. She has been involved in this particular case for about a year.
She testified that the same searches conducted in January and again in April returned a different number of “hits.”
“When a search term was in a document, you can run the search, and it would not hit,” she said.
In March, officials learned 338 boxes of documents, more than 838,000 pages, had been uploaded as images, and were not content searchable in Relativity. The matter was fixed March 21.
“That was the essence of one of our discussions,” Judge Cook said. “Can defense counsel search it, make a defense? If that was not searchable, how can they put on a defense?”
“The unsearchability of those documents was discovered by the state, and the state fixed it on its own,” Drew Wood, one of two senior assistant attorneys general prosecuting the case, said.
Ms. Loo testified that “the data set was not reliable.”
She also found some documents did not load and others were password protected.
As for the approximately 1,600 password-protected files, Mr. Wood noted, “We don’t have access to them ourselves.”
According to Mr. Wood, they were password-protected on the various computers and drives the state seized as part of its investigation.
Ms. Loo said she never reported any of the issues to Relativity, but rather, to someone on her team.
When they informed Harvey McCloskey, a deputy attorney inspector for the Ohio Division of Securities' enforcement section, of the problems, Ms. Loo testified they were advised to speak to the vendor.
Jamie Adams, of Prime2 Consulting, testified as an information technology expert. He questioned why Relativity wasn’t used to host the documents directly. The company offers hosting services, but the state opted to use a third party, Novitas, to host the documents, he said.
According to Mr. Adams, the system needs to be maintained to ensure there are no performance issues.
“It doesn’t appear any maintenance was done,” he said, noting there were no notices of the system being unavailable for updates or weekly or monthly maintenance.
Relativity conducts weekly maintenance to prevent any issues, he said.
Mr. Adams conducted a number of performance tests, including timing the time it took to export 56 random files. It took about 16 minutes, which he deemed “about average, about reasonable.”
“I am not saying Relativity does not work. It is a great system,” Mr. Adams said. “These are issues that can be fixed. It will take a lot of time and a lot of money.”
Natalie Bargy, eDiscovery Manager at Shumaker, Loop & Kendrick, has also had extensive training with Relativity. She learned of problems with the discovery in January from her associate, Ms. Loo.
According to Ms. Bargy, even after the “fix” in March, they still encounter processing errors when conducting searches.
On cross-examination, Ms. Bargy said she did not know if problems were reported to Novitas, but she “would have expected Novitas to check their error logs.”
When asked by Judge Cook how to ensure good data, Ms. Bargy was blunt.
“I’m saying start over because we don’t know what we don’t know,” Ms. Bargy told the judge.
To conduct a complete review of all of the data, she estimated it would take six to nine months to review all of the documents.
Mr. Wood said the state has responded to requests from the defense as they are received, noting that on April 15, the search term reporting functionality was turned on when requested by the defense, and the highlighting function the defense reported was also working now.
Eric Lang, e-discovery project coordinator with VRC, the firm hired to process all of the discovery provided by the state, testified how his firm accomplished the task.
VRC started working on this case in 2022 when the state gave it 645 gigabytes of digital data from computers, flash drives, and other storage devices. The material was processed and given to Novitas. Novitas then brought the data into Relativity.
In March, when they learned all of the paper documents were not searchable, VRC converted 338 boxes of more than 838,000 pages of documents into tiffs and then into PDFs.
As part of the firm’s quality control efforts, staff reviews every single page that is scanned to see if the original was askew, torn, double-fed, or if it was an issue with their process. If they find an error, they rescan it.
“We verify the scanned image is correct,” he said.
Mr. Lang was taken aback by the challenges being reported by the defense.
“We have never had problems in the past with Novitas,” he said. Mr. Lang said he had never seen an error report from Novitas.
Tuesday’s hearing will continue on June 3.
Charged in the case are James DelVerne, 53, of Toledo; Doug Miller, 60, of Bowling Green; Colleen Hall, 65, of Sylvania; Gary Rathbun, 67, and Nancy Rathbun, 72, both of rural Wauseon; Adam Salon, 46, of Toledo; John Walters, 53, of Perrysburg, and Brad Konerman, 38, of the Cincinnati suburb of Norwood, Ohio.
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