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CEO of Michigan election software firm seeks dismissal of charges

Stock Markets Oct 28, 2022 06:26AM ET
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By Nathan Layne

(Reuters) -The head of a Michigan election software company facing felony charges in California for allegedly storing poll worker data in China filed a motion on Thursday to dismiss the case, arguing the alleged conduct, even if true, is not criminal.

Eugene Yu, founder and chief executive of Konnech Inc, has been accused of violating the company's contract with Los Angeles County, which restricts the sharing of election workers' personal information to citizens and permanent residents inside the United States. He was charged with grand theft by embezzlement and conspiracy to commit a crime.

Yu's arrest earlier this month has been hailed by some right-wing organizations focused on voter fraud as a vindication of their warnings about the vulnerability of U.S. election systems, including to hacking by overseas adversaries.

The Los Angeles District Attorney's Office, which brought the charges, has said the investigation was triggered by a complaint from Gregg Phillips of True the Vote, a Texas nonprofit and prominent purveyor of debunked voter-fraud claims.

In a filing to the Superior Court of California, County of Los Angeles, Yu's lawyers asked for the complaint to be dismissed, arguing that prosecutors had wrongly sought to criminalize a run-of-the-mill contract dispute.

"This is a deeply misguided prosecution," attorneys Gary Lincenberg, Thomas Reichert, and Alexis Wiseley wrote. "This is a civil breach of contract case that has been dressed up in a costume that doesn't fit."

A spokesman for the district attorney declined to comment.

The filing is the latest development in a months-long saga between Konnech, a small company of about 20 people which makes software to manage payroll and scheduling for election workers, and the principals of True the Vote.

Phillips and Catherine Engelbrecht, founder of the organization, have made a series of claims about Konnech and Yu. They alleged the company was holding sensitive personal information on some 1.8 million poll workers on a server in China, and accused Yu, who immigrated to the U.S. decades ago, of being a Chinese operative.

Konnech has said the allegations are false and last month it sued Phillips, Engelbrecht and the organization for defamation.

That case is playing out in a federal court in Texas, where a judge on Thursday held Phillips and Engelbrecht in contempt for not complying with a court order put in place last month, according to John Kiyonaga, a lawyer for Engelbrecht and True the Vote. The court order had included the requirement that they disclose who facilitated access to the data in question.

Phillips had previously said that a man from Virginia, Mike Hasson, invited him to a Dallas hotel room in January 2021 to show and provide him with data he claimed to have discovered on a Konnech computer server located in China.

In testimony on Thursday, Phillips newly disclosed the presence of a third individual in the hotel room but declined to identify the person, saying the individual was a confidential informant to the FBI, according to a person familiar with the matter.

The FBI did not immediately respond to a request for comment.

U.S. District Judge Kenneth Hoyt gave Phillips and Engelbrecht until a hearing on Monday morning to disclose the person's name or be placed in jail.

"We were held in contempt of court because we refused to burn a confidential informant or our researchers," Phillips wrote on Truth Social, the social media platform backed by former U.S. President Donald Trump. "We go to jail on Monday unless we comply."

CEO of Michigan election software firm seeks dismissal of charges

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