Reno company seeks sanctions against software engineer

RENO - A software engineer at the heart of corruption allegations against Nevada Gov. Jim Gibbons was under scrutiny Tuesday by lawyers for a defense contractor who claim he's withheld evidence in violation of a court order in their ongoing civil lawsuit.

Lawyers for Warren Trepp, chief executive of eTreppid Technologies LLC, are asking a federal judge to impose sanctions and hold Dennis Montgomery in contempt of court.

Montgomery was an executive at the Reno company. He filed a lawsuit against his former employer in 2006, claiming he wasn't paid for his work.

Trepp, a former chief trader for convicted junk-bond dealer Michael Milken, accused Montgomery in a countersuit of stealing eTreppid property the company uses in its military defense work.

Montgomery maintains he owns the "source codes" at issue, which he says the U.S. military is using to fight terrorism, but eTreppid argues the codes were the company's property.

During Tuesday's hearing, which was continued from June 10, Trepp lawyer Stephen Peek questioned Montgomery on where and how he stored computer hard drives, documents and disks seized from Montgomery during a 2007 FBI raid.

The items were later returned to Montgomery after two judges ruled the raid was unconstitutional.

Montgomery said initially that some items were kept in a storage shed at Rancho Mirage, Calif., and others he took to his home and office in Washington state.

While originally stored in boxes labeled "FBI raided material," Montgomery said the materials were later co-mingled with other items when he moved back to California.

A judge in February ordered that copies of the materials be made available to Trepp lawyers.

But Peek said they have only received a handful.

"He had a duty to preserve evidence," Peek said. "This goes to the good faith and bad faith of Mr. Montgomery."

Montgomery countered that he turned over to his lawyers whatever materials he could find.

"I did that as soon as I was able to identify them," he said.

He said he brought about 100 more computer disks to court with him Tuesday.

One of his lawyers, Deborah Klar, told U.S. Magistrate Valerie Cooke that she would take the disks back to Los Angeles with her to have them copied.

The case drew national attention when Montgomery claimed Gibbons, while serving in Congress before his election as governor in 2006, secured lucrative contracts for Trepp in exchange for money, casino chips and Caribbean cruise.

Trepp, a longtime friend of Gibbons, contributed nearly $100,000 to his gubernatorial campaign.

Their relationship and Montgomery's allegations prompted an FBI and federal grand jury investigation into whether Gibbons abused his power while in Congress to benefit his friend, but Gibbons says the FBI has never questioned him about the allegations.

In February 2007, the Wall Street Journal reported that e-mails cited as evidence in the civil case involving Montgomery appear to show Trepp discussing payment or gifts to then-Rep. Gibbons.

At the time, Gibbons and Peek, Trepp's lawyer, questioned the authenticity of the messages.

Peek appeared to raise suspicion again during Tuesday's court hearing, saying that of more than 1.4 million computer files turned over by Montgomery from hard drives he had backed up at eTreppid, not one contained an e-mail.