UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
LAS VEGAS DIVISION

UNITED STATES OF AMERICA,
Plaintiff,
vs.
MARCUS HUTCHINS,
Defendant.

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CASE NO:

2:17-MJ-0825-NJK
CRIMINAL

Las Vegas, Nevada
Friday, August 4, 2017
(3:00 p.m. to 3:22 p.m.)

CONTINUED INITIAL APPEARANCE IN RULE 5(c)(3) PROCEEDING

BEFORE THE HONORABLE NANCY J. KOPPE,
UNITED STATES MAGISTRATE JUDGE

Appearances:

See Next Page

Court Reporter:

Recorded; Liberty

Courtroom Administrator: A. Caytuero
Transcribed by:

Exceptional Reporting Services, Inc.
P.O. Box 18668
Corpus Christi, TX 78480-8668
361 949-2988

Proceedings recorded by electronic sound recording;
transcript produced by transcription service.
EXCEPTIONAL REPORTING SERVICES, INC

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APPEARANCES FOR:

Plaintiff:

DANIEL J. COWHIG, ESQ.
U.S. Attorney’s Office
501 Las Vegas Blvd. So.
Suite 1100
Las Vegas, NV 89101

Defendant:

ADRIAN LOBO, ESQ.
Lobo Law, PLLC
400 S. Fourth Street
Suite 500
Las Vegas, NV 89101

U.S. Pretrial Services:

Kelly Bowen
Erin Oliver

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Las Vegas, Nevada; Friday, August 4, 2017; 3:00 p.m.

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Call to Order

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THE CLERK:

Your Honor, we’re now calling United

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States of America versus Marcus Hutchins, Case Number

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2:17-mj-00825-NJK.

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Counsel, please state your name for the record.

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MR. COWHIG:

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THE COURT:

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MS. LOBO:

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THE COURT:

Got you, Mr. Cowhig.
Adrian Lobo on behalf of Mr. Hutchins.
All right.

THE DEFENDANT:

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THE COURT:

Good day.

This -- okay.

And Mr. Hutchins, just

make sure you speak up --

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THE DEFENDANT:

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THE COURT:

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Good afternoon, Ms. Lobo, and

good afternoon, Mr. Hutchins.

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Dan Cowhig on behalf of

the United States.

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Good afternoon.

Sorry.

-- into that microphone when you do talk,

okay?

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THE DEFENDANT:

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THE COURT:

Okay.

Thanks.

That’s okay.

All right.

So, we were

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here yesterday.

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initial appearance regarding whether you had an attorney.

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This case got continued in the middle of the

So, at this time, the Court has received the

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designation of retained counsel for Adrian Lobo which the Court

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will make a part of the record.
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Now, Mr. Hutchins, you have the right to an identity

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hearing in this district in which the Government will be

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required to show that you are in fact the person named in the

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indictment.

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that your name is Marcus Hutchins, but rather that you are in

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fact the person named Marcus Hutchins who is charged in the

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indictment.

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This identity hearing is not merely to establish

Now, the Court has been provided a waiver of that
identity hearing and preliminary hearing, and it has your name

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at the top and a signature at the bottom.

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that?

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THE DEFENDANT:

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THE COURT:

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I do.

Is that in fact your signature at the

bottom?

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THE DEFENDANT:

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THE COURT:

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Do you recognize

Yes.

And before you signed it, did you read

it?

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THE DEFENDANT:

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THE COURT:

And before -- Ari, are you picking him

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THE CLERK:

He’s a little low.

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THE COURT:

Okay.

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I did.

up?

You’re speaking a little softly,

but --

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THE DEFENDANT:

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THE COURT:

Sorry.

We’re recording this, that’s why I’m

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asking.

Okay?

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Now, before you signed it, did you have an

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opportunity to speak with your attorney so that she could

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explain to you what an identity hearing is and what a

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preliminary hearing is, as well as the pros and cons of waiving

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those hearings in this district?

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THE DEFENDANT:

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THE COURT:

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Yes.

And did you have an opportunity to ask

your attorney any questions you might have regarding what those

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hearings are as well as the pros and cons of waiving those

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hearings in this district?

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THE DEFENDANT:

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THE COURT:

I did.

And based on that discussion and based on

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the questions you asked and then the answers to them you

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received, is it your intent to knowingly waive your right to an

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identity hearing in this district?

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THE DEFENDANT:

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THE COURT:

It is.

All right.

So, the Court finds that the

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Defendant has knowingly waived his right to an identity hearing

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in this district, and he is identified as the named Defendant

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in the indictment and held to answer in the Eastern District of

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Wisconsin.

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Now, Mr. Hutchins, did you have a chance to speak to

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counsel today regarding what you are charged with in the

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indictment?
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THE DEFENDANT:

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THE COURT:

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Okay.

Do you need more time to speak to

your attorney?
(Pause; Defendant confers with his attorney)

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THE DEFENDANT:

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THE COURT:

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THE DEFENDANT:

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THE COURT:

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THE DEFENDANT:

No, thanks.

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THE DEFENDANT:

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THE COURT:

No, I don’t.

Okay.
Thanks.

Sorry, I’m having a little trouble

You’re a little soft-spoken.

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THE DEFENDANT:

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THE COURT:

Sorry.

No, that’s okay.

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nature of the charges against you?

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THE DEFENDANT:

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THE COURT:

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I don’t need more time.

You do need more time?

THE COURT:

hearing you.

No, thanks.

I’m sorry?

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A little bit.

Do you understand the

I do.

Do you understand the purpose of this

hearing?

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THE DEFENDANT:

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THE COURT:

I do.

Ms. Lobo, do you have any reason to

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question the competence of the Defendant to understand the

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charges against him or to assist in his defense?

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MS. LOBO:

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THE COURT:

No, your Honor.
All right.

Now, the Court has received a

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supplemental memorandum from Pretrial Services in addition to

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the report from yesterday.

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supplemental memorandum?

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MR. COWHIG:

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MS. LOBO:

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THE COURT:

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Okay.

And Mr. Cowhig, has that changed

the Government’s request?
MR. COWHIG:

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THE COURT:

It has not, your Honor.
All right.

Is the Government ready to

proceed?

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MR. COWHIG:

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THE COURT:

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Yes, your Honor.

Yes, your Honor.

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Have both parties received that

Yes, your Honor.
And Ms. Lobo, is the Defense ready to

proceed on the detention hearing?

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MS. LOBO:

Yes, your Honor.

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THE COURT:

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MR. COWHIG:

Okay.

Mr. Cowhig.

Thank you, your Honor.

Based upon the

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assessment yesterday from Pretrial Services, Mr. Hutchins, we

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still believe, is a risk of nonappearance and a danger to the

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community.

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In his interview following his arrest, Mr. Hutchins

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admitted that he was the author of the code that became the

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Kronos malware and admitted that he had sold that code to

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another.

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Among the evidence that the Government will present
at his trial will be that there are chat logs in which
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Mr. Hutchins discusses with an associate the sale of the Kronos

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banking trojan through his associate splitting the proceeds of

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the Kronos trojan with his associate, where he complains about

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the amount of money that he received for the sale of the

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banking trojan and where he received a request from that

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associate to update the Kronos banking trojan.

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in these chats is the person from whom the law enforcement

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agents purchased the Kronos trojan on AlphaBay as specified in

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the indictment.

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Mr. Hutchins is not -- not a local.

The associate

He does not have

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local ties.

He does not have a residence here in the United

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States.

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has financial means to travel outside the United States to flee

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the jurisdiction.

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here in Las Vegas.

He is a foreign national; has a foreign passport.

He

We don’t have any ties that would place him

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In addition to that, furthering the investigation as

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-- the Eastern District of Wisconsin continued to look at what

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has evolved since then.

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Mr. Hutchins, according to tweets that he made to his Twitter

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account under the handle of “Malwaretech”, Mr. Hutchins

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indicated that he had visited firearms ranges twice and used

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firearms here.

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During his time here in Las Vegas,

As a foreign national who’s not accepted under 18

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U.S. Code 922(y), he is a prohibited person for purposes of 18

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United States Code 922(g)(5)(B).

That is not included on the

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indictment; that’s a new development in the case.

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nonetheless we point that out to your Honor to indicate other

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developments in the case.

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But

The hearing for Mr. Hutchins initial appearance in

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the Eastern District of Wisconsin is set for August 8th.

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believe that detention based on these facts is most

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appropriate.

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conditions that were set by Probation or proposed by Probation

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in their recommendation today would be sufficient.

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We

Were Mr. Hutchins to flee, we don’t believe the

The Kronos banking trojan continues to exist out

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there in the wild.

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the Internet, he may have the ability to take actions that

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would either obfuscate some of the evidence related to that.

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His other codefendant is still at large.

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conditions that are set out would prevent Mr. Hutchins from

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carrying out those acts if he were so inclined.

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If Mr. Hutchins were able to gain access to

We don’t believe the

Your Honor, we ask that Mr. Hutchins be detained as a

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risk of flight and a danger to the community, and directed to

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be delivered to the Marshals in the Eastern District of

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Wisconsin.

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THE COURT:

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MS. LOBO:

All right.
Yes.

Ms. Lobo.

Your Honor, today we are going to be

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seeking the release of Mr. Hutchins and here’s why.

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the Government’s argument that he is a flight risk and a danger

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to the community, that is just simply not true in this case.
EXCEPTIONAL REPORTING SERVICES, INC

As far as

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Mr. Hutchins is not a danger to the community

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contrary to presenting this 922(g)(5)(B) allegation.

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received a copy of the tweets from the Government.

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looking at them and talking to Mr. Hutchins, I am under the

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impression that it -- this is only being sought for the

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purposes of -- that this is a high-profile case and that they

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are trying to do anything to keep him in the custody of the

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Government.

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And I

And after

That being said, Mr. Hutchins traveled to the United

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States for purposes of a conference.

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employed, and when he was in -- at this conference, he chose to

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go to a gun range, as many tourists do when they’re visiting

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Las Vegas.

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That passport was a British passport.

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inside of that passport.

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authorizing him to shoot the guns that were at that range.

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for the Government now to say that to be prosecuted or like

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that this is now somehow a 922(g)(5)(B), you know, offense,

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then leads me to believe that, well, I don’t see that the

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Government is going after and prosecuting business owners who

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are marketing this for tourists in the international hub that

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Las Vegas is.

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He’s rightfully gainfully

He went to the gun range, he showed his passport.
It contained his age

He signed all of the paperwork
And

That being said, he’s not a danger to the community.

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He doesn’t have any substantial -- any criminal history for

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that matter.

And he’s somebody who has never been in trouble
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with the law here, obviously, in the United States or in

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Britain as well.

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He has contacts and tremendous community support

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abroad, international, and locally here.

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Court, and if I may show these to the Court, there’s at least

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12 to 15 letters from family members, from other people in the

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security community, and from, I believe, employers as well.

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I can have you --

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THE COURT:

You may.

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MS. LOBO:

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THE COURT:

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MR. COWHIG:

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I brought to the

If

Has the Government seen that?

Yes, they have.
Yeah.
We have, your Honor.

We have no

objection.

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THE COURT:

Okay.

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MS. LOBO:

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As far as him being a flight risk.

Okay.

Yes, you may.
Thank you.
Yes, he does not

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live here; he’s not a citizen.

He is a foreign national.

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However, that being said, he does work as a contractor and the

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individual who’s identified in the Pretrial Services report,

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I’m going to mess his last name up, Selene Ninuno (phonetic),

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who as mentioned has said that he will procure housing and that

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he will make sure that Mr. Hutchins, if he is granted release,

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is given a place to stay and that he will comply with all of

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the directives as ordered by this Court, and that he will make

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his way to Wisconsin; that he will arrive there on time.
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I spoke to family in the U.K. prior to coming to

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Court today and they are looking at getting any sort of rental,

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vacation rental, a short-term lease, so that way he can be out

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of custody, whether it be here in Las Vegas or it’s in

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Wisconsin.

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appropriate for his release.

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He’ll comply with whatever the Court deems

And with that, your Honor, I’m going to submit it on

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those conditions as outlined within the Pretrial Services

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Investigation reports.

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THE COURT:

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at these letters.

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(Pause)

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All right.

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MS. LOBO:

All right.

I’m just taking a quick look

Ari, if you can pass these down.
And if I may add one other -- if your

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Honor is inclined or not inclined to release him for any

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reason, your Honor, is that we were asking that if you won’t

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allow the family to procure a residence here, that he be

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released to a halfway house pending his transport to Wisconsin.

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THE COURT:

Okay.

All right.

Anything else from the

Government?

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MR. COWHIG:

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THE COURT:

No, your Honor.
Okay.

All right.

The Court notes

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initially that the indictment itself, the most recent charge in

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the indictment is in July of 2015.

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Defendant has been free to roam the world during that period of

That’s two years ago.

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The

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time, and so, if he is a risk of non-appearance, the Court is

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unsure as to why it took two years to -- and a danger to the

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community, why it took two years to indict him.

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he has no criminal history.

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Additionally,

Regarding the gun range, the Court agrees with

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Ms. Lobo.

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about shooting at the range.

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People are, of course, charged with knowing the law.

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shooting guns at a range in Las Vegas is very different from

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People -- there are advertisements in the airport
And he showed his passport.
However,

carrying guns on the street in Las Vegas.

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The Court does not find that that means this

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Defendant is a danger to the community, and the Court is

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persuaded by the lack of criminal history, the fact that the

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indictment -- the activities alleged in the indictment occurred

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two years ago, more than two years ago.

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At this point, and before that, he does seem to have

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a great deal of family support and support from friends.

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Therefore, the Court finds that conditions can be fashioned.

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Now, Mr. Hutchins, I want you to listen very

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carefully to all of the conditions that the Court is going to

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impose on you.

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THE DEFENDANT:

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THE COURT:

Yes, your Honor.

It is very important that you follow each

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and every one of these conditions exactly as it is imposed on

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you.

If you violate even one of these conditions, you could be
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brought back before the Court and you could face ramifications

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including detention pending trial.

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THE DEFENDANT:

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THE COURT:

Do you understand that?

I understand, your Honor.

All right.

So, the Court is going to

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order that Mr. Hutchins is released on a $30,000 bond secured

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by cash with these conditions of release.

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You are subject to Pretrial Services supervision.

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You shall use your true name only, and you shall not use any

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false identifiers.

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fraudulent access devices.

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You shall not possess or use any false or

THE DEFENDANT:
means.

Ma’am, I’m not really sure what that

Could you elaborate, please?
THE COURT:

All right.

You can -- you can speak to

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your attorney, and if you have any questions about it, you can

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speak to the Pretrial Services officer to make sure, because

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the Pretrial Services officer will go over this again with you,

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and will go over it so that you understand exactly.

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THE DEFENDANT:

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THE COURT:

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All right?

Thank you.

But you do understand that that is a

condition, correct?

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THE DEFENDANT:

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THE COURT:

Yes.

All right.

You shall surrender any

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passport and/or passport card to Pretrial Services or your

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supervising officer.

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passport card.

You shall not obtain a new passport or

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You shall abide by the following restriction on your

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travel.

And this is a condition that may be modified depending

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on where the residence is located, but for the moment, your

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travel is restricted to Clark County, Nevada, which is where we

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are right now.

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Wisconsin for court purposes.

And you may travel to the Eastern District of

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Now, the Court will modify that condition depending

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on where this residence will be once the residence is secured

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if it is not in Clark County.

If, for example, it is in

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Wisconsin, then the Court will restrict your travel to the

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Eastern District of Wisconsin.

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condition.

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But for right now, this is the

You shall maintain your residence at a halfway house

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until that residence is secured and the residence is approved

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by Pretrial Services.

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You shall pay all or part of the cost of residing in

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the halfway house based upon your ability to pay as Pretrial

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Services or the supervising officer determines.

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You shall avoid all contact directly or indirectly
with any codefendants unless it is in the presence of counsel.
You shall participate in home detention.

You are

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restricted to your residence at all times except for

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employment, education, religious services, medical, substance

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abuse or mental health treatment, attorney visits, court

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appearances, court ordered obligations, or other activities
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preapproved by Pretrial Services or the supervising officer.
You shall submit to GPS monitoring technology and

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abide by all of the program requirements and instructions

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provided by Pretrial Services or the supervising officer

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related to the proper operation of that technology.

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You shall not tamper with, damage, or remove the

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monitoring device, and you shall charge the equipment according

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to the instructions provided by Pretrial Services or the

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supervising officer.

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You shall pay all or part of the cost of the location

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monitoring program based upon your ability to pay as determined

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by Pretrial Services or the supervising officer.

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And you shall not have access to computers or

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connecting devices which have Internet, instant messaging, IRC

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servers, and/or the worldwide web including but not limited to

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PDAs, cellphones, iPods, iPads, tablets, ereaders, Wii

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PlayStation, Xbox, or any such devices at home, your place of

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employment, or in the community.

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Do you understand those conditions?

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THE DEFENDANT:

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THE COURT:

I understand.

All right.

And the next hearing is set

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for August 8th in the Eastern District of Wisconsin.

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have an address of that courthouse, Mr. Cowhig?

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MR. COWHIG:

Yes, your Honor.

Do you

August 8th at

9:30 a.m. before Magistrate Judge William E. Duffin, in
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Courtroom 242.

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Wisconsin Avenue, Milwaukee, Wisconsin.

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The U.S. District Court is located 517 East

THE COURT:

All right.

there for that hearing.

Do you understand that?

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THE DEFENDANT:

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THE COURT:

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I understand.

All right.

Is there anything else on

this matter?

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MR. COWHIG:

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MS. LOBO:

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You will be required to be

THE COURT:

No, your Honor.

No, your Honor.
All right.

Thank you everyone.

(Pause)

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MS. LOBO:

Judge?

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THE DEFENDANT:

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MS. LOBO:

Sorry.

If we could recall, briefly.

He doesn’t

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have I.D. to travel to U.S. because his passport has been -- to

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Wisconsin.

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THE COURT:

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MR. SPEAKER:

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MS. LOBO:

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THE COURT:

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MS. LOBO:

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Three days to get there should be --

It’d take, yeah.
Right.
But he’s going to need that to fly to

Wisconsin.

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THE COURT:

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MS. LOBO:

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Oh.

Okay.

Let’s recall this.

Sorry.

(Pause from 3:19 to 3:20 p.m.)
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THE COURT:

Mr. Cowhig.

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THE CLERK:

Mr. Cowhig.

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THE COURT:

We’re going to recall the last case.

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THE CLERK:

Your Honor, we’re now recalling United

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States of America versus Marcus Hutchins, Case Number 2:17-mj-

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00825-NJK.

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Counsel, please state your name for the record.

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MR. COWHIG:

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Dan Cowhig, your Honor, on behalf of the

United States.

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THE COURT:

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MS. LOBO:

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THE COURT:

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MS. LOBO:

All right, Mr. Cowhig.
Adrian Lobo on behalf of Mr. Hutchins.
Ms. Lobo.
Your Honor, I asked that the case be

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recalled to address the issue of his I.D.

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British passport, and he is going to be -- presumably he’s

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going to be purchasing tickets to fly to Wisconsin and set up

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residence there as well.

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stipulation that the passport only be used for purposes of

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domestic flights and procuring the residence here, I would ask

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that the Court reconsider that option.

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THE COURT:

He only has a

So, if there is any sort of

Does Mr. Hutchins have any sort of U.K.

Driver’s License that could be used?
THE DEFENDANT:

Yeah, I did have one, but it was

stolen last week.
THE COURT:

All right.

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THE DEFENDANT:

I may be able to get a new one mailed

out, but I’m not sure yet.

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MR. COWHIG:

Your Honor, assuming Mr. Hutchins will

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be flying to Wisconsin, there are -- there are ways to get him

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on that aircraft without the passport.

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THE COURT:

have to leave pretty quickly for this particular flight.

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There are ways; however, he’s going to

MR. COWHIG:

Yes, your Honor.

The passport will not

be required for his flight to -- within destinations within
CONUS.

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Without going into too much detail on the record,

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this is something we discussed already with TSA and the

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immigration folks.

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aircraft and fly to Wisconsin.

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THE COURT:

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MR. COWHIG:

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Mr. Hutchins will be able to board an

MS. LOBO:

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THE COURT:

Okay.

Yes, your

Very well.

All right.

Then that will -- then the

conditions will remain as they were stated before.

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MS. LOBO:

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THE COURT:

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Without the British passport.

Honor.

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Without his identification.

All right.

Thank you.

All right.

(This proceeding was adjourned at 3:22 p.m.)

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EXCEPTIONAL REPORTING SERVICES, INC

 CERTIFICATION

I certify that the foregoing is a correct transcript from the
electronic sound recording of the proceedings in the aboveentitled matter.

August 10, 2017_

TONI HUDSON, TRANSCRIBER

EXCEPTIONAL REPORTING SERVICES, INC