B. Summer 2001 – Before the Department of Justice
178. In the summer of 2001, the Antitrust Division of the Department of Justice launched an investigation into whether the joint ventures MusicNet and pressplay restrained competition among the recording companies that were owned and controlled by Labels and Studios, or allowed the recording companies to impede the growth of the Internet as a channel for the authorized promotion and distribution of music, and thereby help the major labels solidify their central roles in the existing music market. My digital download technology, which calculated the discounted price that any given Internet customer was willing to pay, so that the discounted price could be advertised or promoted as a “special” low price to that given customer, provided TransWorld with access to retail sales data material to the Department of Justice investigation. I conveyed truthful information to the Department of Justice law enforcement officers relating to the possible commission of the federal offenses of criminal antitrust violations and securities fraud.
179. Boies-Schiller and Trans World knew full well that I had conveyed such truthful information to law enforcement officers because Boies-Schiller and Bill Duker witnessed and influenced the information I conveyed to law enforcement officers.
180. Boies-Schiller and Bill Duker both advised me not to answer any questions involving Trans World. Instead, Boies-Schiller and Bill Duker both advised me that Trans World would be providing its own information to the Department of Justice separately.
181. I expected that I could trust Boies-Schiller’s advice as my lawyers.
182. As a result, when the law enforcement officers of the Department of Justice asked me certain questions involving Trans World that were crucial to their investigation, such as, “Is there a benefit from licensing all at once through the joint ventures?”, I responded as I was advised to by Boies-Schiller and Bill Duker, “You’d have to ask Trans World that.”
183. I was prevented from providing my complete answer, which includes that the recording companies were colluding to use the joint ventures MusicNet and pressplay to prevent Trans World from performing its obligation to me under the securities purchase agreement for “obtaining permission from copyright owners, as applicable, for the use, distribution, licensing or sale of [music], and making any payments owed to the copyright owners in respect thereof,” in order to conceal a scheme of payment of kickbacks to Trans World.
184. Boies-Schiller’s advice to me that Trans World would provide information to the Department of Justice was false. As Robert Higgins and Bill Duker later admitted to me, Hilary Rosen, The President of RIAA several weeks earlier had directed Trans World and its chairman Robert Higgins by phone, “Let’s just work this out” – and this direction constituted a tacit agreement between Trans World and recording companies that Trans World would not provide information to the Department of Justice and would instead direct my employer to fire me and shut down my business in return for recording companies’ promise of increased payments of kickbacks to Trans World, and in turn rendering me insolvent.
185. In the course of this interview with the Department of Justice, Boies-Schiller did not disclose to me that Boies-Schiller was simultaneously representing my interests and the interests of Trans World as a defendant in a related antitrust action in the District Court of Maine.
