EXHIBIT 1 1 0C64MCC1 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 UNITED STATES OF AMERICA 3 4 v. 09CR1136(WHP) 4 5 SEAN McCARTHY, 5 LARRY WARREN HOUGH, 6 Defendants. 6 7 ------------------------------x 7 8 New York, NY 8 December 6, 2010 9 10:10 a.m. 9 10 Before: 10 11 HON. WILLIAM H. PAULEY III 11 12 District Judge 12 13 APPEARANCES 13 14 PREET BHARARA 14 United States Attorney for the 15 Southern District of New York 15 DANIEL CHUNG 16 ELISHA KOBRE 16 Assistant United States Attorneys 17 17 MICHAEL SPORN 18 SCOTT MICHELMAN 18 JAY RORTY 19 Attorneys for Defendant McCarthy 19 20 JOHN C. MERINGOLO 20 Attorney for Defendant Hough 21 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 0C64MCC1 1 (Case called) 2 THE COURT: Good morning, I note the presence of the 3 defendant Mr. McCarthy at counsel table and I note the presence 4 of Mr. Hough as well. This matter is on for a hearing. Are 5 the parties ready to proceed. 6 MR. CHUNG: The government is ready. 7 MR. RORTY: We are, your Honor. There are two 8 preliminary matters I would like to discuss. 9 THE COURT: Go ahead. 10 MR. RORTY: The government filed a letter with this 11 court Friday afternoon, that is December 3. I wanted to make 12 sure the court has received that letter. 13 THE COURT: I have. 14 MR. RORTY: On Mr. McCarthy's behalf, we filed a 15 pleading, a motion to exclude extrinsic evidence of the defense 16 expert's conduct yesterday afternoon, a motion electronically 17 filed with two affidavits, I wanted to make sure the court 18 received that document. 19 THE COURT: I have not seen that. So, if you would be 20 kind enough to hand a copy up, I would appreciate it. 21 (Pause) 22 THE COURT: I assume I can review this as we proceed 23 or during a recess, but we are not going to get to this matter 24 immediately. 25 MR. RORTY: I think that's probably appropriate given SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 0C64MCC1 1 that the court has not had a chance to review it. We are 2 prepared to take up the issue at any time the court feels is 3 appropriate. Perhaps after the break or before Dr. Halpern's 4 testimony would be the best time after the court has had a 5 chance to review our document. 6 THE COURT: That's fine. 7 You said there was another matter. 8 MR. RORTY: Before we call our first witness, I would 9 like a few minutes to give the court a road map of what we 10 think will occur over the next couple of days, an introduction 11 to Mr. McCarthy's evidence in this matter. 12 THE COURT: That's fine. 13 MR. RORTY: At our previous hearing the government 14 argued that there was no need for this proceeding because in 15 2001, the United States Sentencing Commission heard testimony 16 and took substantial evidence regarding the harms of MDMA. The 17 government at that point argued that that settled the issue of 18 whether a post-Kimbro policy variance might apply in this case. 19 That argument can now be dismissed because we are having this 20 hearing. The fact that the commission held proceedings cannot 21 control the issue. 22 The question before this court is whether or not the 23 conclusions drawn by the commission in 2001 are still valid. 24 If they are, then the offense level controls and the guidelines 25 apply. If those conclusions have been undermined by the decade SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 0C64MCC1 1 of science that has occurred since that hearing, we would 2 submit that a variance in this case is necessary and 3 appropriate. 4 As the court will recall in notes from the papers, 5 the commission based all of its findings resulting in the 6 offense level on a couple of key assumptions. First, that MDMA 7 is extremely neurotoxic, that it causes cell death. Second, 8 that MDMA is more harmful than cocaine in several respects. 9 If at the end of this hearing the court concludes that 10 the commission erred in those assumptions and reaching those 11 conclusions, then we would say that pursuant to Kimbro, a 12 variance is necessary and appropriate in this case. We would 13 be talking then not about whether the court should vary but how 14 far. If the commission got it wrong, if those assumptions are 15 false, then the offense level is not appropriate and the 16 sentence commensurate with that offense level should not be 17 imposed, there should be a variance. 18 We think based on Dr. Curran's, Dr. Halpern's, and 19 indeed on Dr. Parrott's and Dr. Hanson's, Mr. Hanson's 20 testimony, there will be some consensus that the commission got 21 it wrong and that the question is how far did they get it 22 wrong, how wrong were they, particularly about neurotoxicity 23 and cocaine. We will then at the end of the hearing be 24 discussing what is the harm of MDMA in relation to cocaine and 25 other drugs and how neurotoxic is it to the extent it is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 0C64MCC1 1 neurotoxic, that it causes cell death. 2 The court will hear some scientific disagreement with 3 respect to the extent and nature of neurotoxicity and the harm 4 relative to cocaine. But I suspect that discussion will be 5 predicated on an understanding that the commission got it 6 wrong, that the extraordinary neurotoxicity found by the 7 commission has been disproved, and that MDMA is not more 8 harmful than cocaine. At the end of the hearing we will be 9 asking the court to vary and arguing that the extent of the 10 variance should find that MDMA is approximately as harmful as 11 marijuana. But we expect that the scope of that argument at 12 the conclusion of the hearing will simply be about the extent 13 of the necessary variance called for in this case. 14 We are now prepared to call Dr. Valerie Curran. 15 Mr. Michelman will conduct that examination. 16 THE COURT: Very well. 17 HELEN VALERIE CURRAN, 18 called as a witness by the Defendants, 19 having been duly sworn, testified as follows: 20 DIRECT EXAMINATION 21 BY MR. MICHELMAN: 22 Q. Could you please tell the court your current title. 23 A. I am currently professor of psychopharmacology at 24 University College, London. 25 Q. Could you describe your main job responsibilities in that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 0C64MCC1 Curran - direct 1 role. 2 A. I am director of the clinical psychopharmacology unit. I 3 am an academic. I have students. I mainly do research. I 4 also am a clinical psychologist and a research lead at the 5 national health service, a series of clinics giving drug 6 treatment to addicts. 7 Q. Could you describe some of your professional associations 8 and activities? 9 A. Yes. I am a member of Council of British Association of 10 Psychopharmacology. I am a member of the U.K. Independent 11 Scientific Committee on Drugs. I am a member of several other 12 societies to do with addiction. I am also principal editor of 13 the major journal in the field, unfortunately also called 14 Psychopharmacology. 15 Q. Could you tell the court what degrees you hold. 16 A. I have a bachelor's and a master's degree from Cambridge 17 University and a PhD from London University and professional 18 qualifications from the British Psychological Society. 19 Q. Describe your area of research expertise. 20 A. My research concerns the cognitive and mood effects of 21 drugs acting on the brain. 22 Q. Tell us the sources of the funding for your research. 23 A. Yes. My current funding is mostly government, mainly the 24 Medical Research Council, also the Economic and Social Research 25 Council in the U.K. I also get money, small amounts of money SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 0C64MCC1 Curran - direct 1 from various charities, including the Beckley Foundation and 2 the Alcohol and Education Research Council. 3 Q. It sounds like the bulk of your funding is from the 4 government. 5 A. Yes, nearly all of it. 6 Q. Do you have any experience testifying in court? 7 A. I have only been in court twice, once with a mass 8 litigation for the crown against pharmaceutical companies 9 producing benzodiazepine, like Xanax and Valium, where a large 10 case was taken forward against companies that produced them, 11 and the second case was in the case of drug-assisted rape where 12 again I acted on behalf of prosecution. I have done a lot of 13 legal reports and I also sit on government committees such as 14 the Ministry of Defense Ethics Committee where my expertise on 15 drugs abuse is used. 16 Q. How long have you researched on MDMA? 17 A. MDMA, 14 years. 18 Q. How long have you researched on marijuana? 19 A. About 12 years. 20 Q. How long have you researched on ketamine? 21 A. On ketamine, 11 years.