A federal appeals court ruled that a former attorney for Vince McMahon improperly withheld documents from a grand jury investigating McMahon’s handling of multimillion-dollar settlements with two female employees who accused him of sexual abuse.
The 2nd U.S. Court of Appeals upheld a lower court’s decision, finding the documents were not protected by attorney-client privilege due to a “crime or fraud” exception. The identities of those involved were not disclosed.
The Associated Press reported the following:
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.’”
On January 10, McMahon settled SEC charges over undisclosed settlements, agreeing to pay a $400,000 civil penalty and reimburse WWE $1.33 million for violating the Securities Exchange Act. He stated at the time, “the case is closed.”
The status of the grand jury investigation remains unclear, and the U.S. attorney’s office in Manhattan has declined to comment.
On January 31, former WWE employee Janel Grant filed an amended lawsuit against McMahon, John Laurinaitis, and WWE, introducing new evidence just over a year after the original filing.
