| Multivision's Nazerali resumes defamation trial|
2015-06-15 20:17 ET - Street Wire
by Stockwatch Business Reporter
Aly Nazerali, the plaintiff in a libel trial against the Deep Capture website, returned to the stand Monday morning following a month-and-a-half-long scheduling break. He qualified remarks made earlier in the trial before turning the stand over to Floyd Wandler, a witness for the plaintiff. Mr. Wandler testified that he had terminated a potential deal with one of Mr. Nazerali's companies as a result of reading Deep Capture's "shocking" allegations.
The allegations in question were published in a series of chapters on the Deep Capture website in 2011. Mr. Nazerali's lawsuit complains that the chapters falsely linked him to Mafiosi, terrorists and other nasty characters, and also accused him of running a "pump-and-dump" of Imagis Technologies.
In addition to Deep Capture, the defendants include Patrick Byrne, who publishes the website, and Mark Mitchell, who wrote the allegedly defamatory chapters. Mr. Byrne is also the CEO of Overstock.com, an on-line retailer and yet another defendant.
The trial resumed Monday with Mr. Nazerali's lawyer, Dan Burnett, calling him to the stand for re-examination, in order to qualify testimony brought out by defence lawyer Roger McConchie during cross-examination in April. Many of the questions were for clarification purposes or to allow Mr. Nazerali to repeat denials of allegations made against him.
Mr. Burnett next called Mr. Wandler as a witness. Mr. Wandler testified that since 2003, he has been the chief executive officer of Protocol Environmental Solutions, a maker of sustainable environmental technologies. It was in this role that he met "Aly." Around mid-2011, explained Mr. Wandler, Protocol began thinking about vending two or three of its products into another company in exchange for cash flow. One of Mr. Nazerali's public companies -- Mr. Wandler could not recall the name -- became a candidate after the parties were introduced by one of Mr. Wandler's business associates.
The two sides talked for about 11 months, putting together cash flow projections, continued Mr. Wandler. He said it was around August or September, 2012, when he decided that it was time to make a case to his board of directors. At that point he also felt ready to do his first research on Mr. Nazerali.
What the research turned up was "shocking," testified Mr. Wandler. He said the Deep Capture material came up "right away" on multiple websites after a quick Google search. Allegations that he recalled reading included Mr. Nazerali's supposed "dealings with gangs," links to Al Qaeda and the Iranian government, and history of arms trafficking. "I thought I was reading a novel," stated Mr. Wandler.
Mr. Burnett asked how these on-line findings affected Protocol's potential deal with Mr. Nazerali's public company. Mr. Wandler testified that he showed the findings to Protocol's chief financial officer, who promptly put a stop to any possible transaction. Mr. Wandler said he then phoned Mr. Nazerali to explain the situation. He recalled telling Mr. Nazerali, "I could never take this my board," and, "Regrettably, whether it's true or untrue," the Deep Capture material meant that negotiations had to be terminated.
Mr. McConchie began his cross-examination of Mr. Wandler. His first line of questioning had to do with the business associate who had introduced Mr. Wandler and Mr. Nazerali. It was Nelson Skalbania, replied Mr. Wandler. (The name was familiar to the court because of Mr. McConchie's earlier cross-examination of Mr. Nazerali, who said he once shared an office with Mr. Skalbania, a Vancouver businessman. Then and today, Mr. McConchie did not put the name into any context related to Deep Capture. Previous filings by the defendants noted that Mr. Skalbania was convicted of theft and received a year in jail in 1997.)
Asked about his relationship with Mr. Skalbania, Mr. Wandler said, "I've known Nelson for years," describing him as a structural engineer and a past director of Protocol. By the time Mr. Skalbania introduced Mr. Nazerali, testified Mr. Wandler, he was not a director of Protocol anymore and was involved "only as a shareholder." He further testified that Mr. Skalbania did not participate in the talks between Mr. Nazerali and Protocol.
Mr. McConchie moved on. He brought up Mr. Wandler's past at an OTC-BB company called Savoy Resources Corp. Mr. Wandler testified that he was the interim president of Savoy for about six months, although he could not remember when. Mr. McConchie suggested that he took the position in January, 2004. In April, 2004, continued Mr. McConchie, Savoy signed a joint venture agreement with the Heilongjiang Geology and Mineral Development Bureau of China. Later on, a new president arrived and, by Mr. Wandler's recollection -- which was much sharper on this point -- wrongfully cancelled the shares of Mr. Wandler and other shareholders. Mr. Wandler testified that the shareholders sought a restraining order against the new president, but "it didn't do us any good." There was little elaboration and the point of this line of questioning was unclear. Mr. Wandler was excused from the stand.
In the last few minutes of the morning session, Mr. Burnett began reading from the Sept. 23, 2013, discovery examination of Mr. Byrne, the above-mentioned publisher of Deep Capture. One of the first questions was whether Mr. Byrne would describe himself as the editor in chief of the website. Mr. Byrne claimed to be unsure of the "legal doctrine" of the term. "[I] do the editing," he acknowledged, but said Deep Capture's journalists, Mr. Mitchell and Judd Bagley (another defendant), do not always have to listen to him. When asked if they had ever disobeyed his orders to take content down, Mr. Byrne said no.
The last few questions of the morning were about how the idea for the chapters on Mr. Nazerali got started. Mr. Byrne said it became a research project after a "pisher" (Yiddish for a nobody) "picked a fight" with him. As he began studying his opponent, he discovered that the pisher was in fact part of a "constellation working to undermine the West and bring it down."
Mr. McConchie represents all the defendants except for Overstock, which is represented by Vancouver lawyer Stephen Schachter.
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