In January, Janel Grant amended her lawsuit against Vince McMahon, John Laurinaitis, and WWE. The suit alleged McMahon both sexually assaulted and sexually trafficked her. At the time, she was an employee of WWE, and Laurinaitis became a participant while WWE knew what was going on. The amended suit can be read here.
AP News reports that the federal court of appeals ruled that a former attorney for McMahon was wrong to withhold some documents from a federal grand jury as they had investigated how the former WWE CEO/Chairman handled multimillion-dollar settlement agreements with two female employees. These two employees accused him of sexual abuse.
A federal appeals court in New York upheld a lower court’s decision, finding that certain documents were not protected by attorney-client privilege due to the “crime or fraud” exception. The three-judge panel of the 2nd U.S. Court of Appeals agreed that the exception applied, meaning the documents could be used. The identities of those involved in the case remain confidential. The following is from the AP News:
“The appeals court said the lower court judge found prosecutors had reasonable grounds to believe that McMahon and his lawyer illegally “circumvented” the WWE’s internal controls and created false records when they concealed the employees’ claims and settlement agreements from the company, and that they made false and misleading statements to the company’s auditors — even though McMahon paid the settlements with funds that did not come from the company.
The appellate panel said that while McMahon’s lawyer submitted many materials in response to a grand jury subpoena, they also submitted a log of 208 documents that were being withheld under assertions of attorney-client privilege.
When the lawyer withheld some of the documents claiming attorney-client privilege, prosecutors asked the lower court to compel production of the records — leading to the appeal decided Monday.
The appellate judges wrote, “Because the settlement agreements resolving the Victims’ claims were ‘structured and negotiated … to keep them hidden from (the Company),’ the district court found that ’all communications about the claims and settlement agreements were made in furtherance of the criminal scheme to keep (the Company) and its auditors unaware of the allegations.’”
McMahon settled his case with the SEC regarding undisclosed settlements as on January 10th, he agreed to pay a $400,000 civil penalty and reimburse WWE $1.33 million, which was after the SEC found that McMahon violated the Securities Exchange Act. While McMahon considers the matter closed, as he noted in a statement, the status of a separate grand jury investigation remains unclear.
