Sayonara, Cyber Ninjas: Dubious "audit" firm shutting down after judge imposes $50,000 daily fine

Company behind sham Arizona "audit" is now "insolvent" despite millions in donations from Trump supporters

By Igor Derysh

Managing Editor

Published January 7, 2022 2:09PM (EST)

Contractors working for Cyber Ninjas, who was hired by the Arizona State Senate, examine and recount ballots from the 2020 general election at Veterans Memorial Coliseum on May 1, 2021 in Phoenix, Arizona. The Maricopa County ballot recount comes after two election audits found no evidence of widespread fraud. (Courtney Pedroza/Getty Images)
Contractors working for Cyber Ninjas, who was hired by the Arizona State Senate, examine and recount ballots from the 2020 general election at Veterans Memorial Coliseum on May 1, 2021 in Phoenix, Arizona. The Maricopa County ballot recount comes after two election audits found no evidence of widespread fraud. (Courtney Pedroza/Getty Images)

Cyber Ninjas, the Florida-based company hired to conduct a Republican-backed "audit" of the election results in Arizona's Maricopa County, said Thursday it is shutting down after a judge imposed a $50,000 per day fine for failing to turn over records.

"Cyber Ninjas is shutting down. All employees have been let go," Rod Thompson, a representative for the company, told NBC News.

Republican lawmakers released the results of the so-called "audit" of Arizona's most populous county in September, showing that President Joe Biden had defeated former President Donald Trump by 360 more votes than previously reported. Trump supporters instead seized on findings of potential irregularities in the election, but the Republican-led Maricopa County Elections Department on Thursday released a 93-page report debunking the review's "faulty and inaccurate conclusions."

Cyber Ninjas has been locked in a legal battle with the Arizona Republic, a newspaper that sued for the release of the company's records in the audit last summer. A Maricopa County judge on Thursday found the company in contempt of court and ordered it to pay a fine of $50,000 a day fine if fails to turn over the records, according to the Arizona Republic.

Cyber Ninjas' attorney Jack Wilenchik said in court that the company is insolvent and has not even been able to pay his legal fees. Wilenchik tried to remove himself from the case on that basis, but Judge John Hannah refused and rejected the company's claims.

"The court is not going to accept the assertion that Cyber Ninjas is an empty shell and that nobody is responsible for seeing that it complies," Hannah said, adding that the newly-announced shutdown "adds to the body of facts suggesting here that there is an intention to leave the Cyber Ninjas entity as an empty piñata for all of us to swing at."

Hannah said the company has presented no evidence that it is insolvent and noted that the company received millions of dollars in donations to conduct the review from Trump supporters.

RELATED: A second insurrection: The real mission behind Republicans' absurd Arizona "audit"

The Republic's lawyers asked the judge to impose a $1,000 per day fine against the company but Hannah said the number was "grossly insufficient" and ordered the firm to pay 50 times that amount. He said that the sanctions needed to be high enough to get the company to comply, adding that they are "intended to be coercive, but not punitive." Hannah said he also wanted to "put Cyber Ninjas on notice" that if the company does not comply, he will issue orders directly against the individuals responsible for turning over the records.

"It is lucidly clear on this record that Cyber Ninjas has disregarded that order," Hannah said. "I don't think I have to find Cyber Ninjas is not acting in good faith. All I have to do is find they are not complying, and their noncompliance is not based on good faith and reasonable interpretation of the order. I think the variety of creative positions Cyber Ninjas has taken to avoid compliance with this order speaks for itself."

Hannah repeatedly sparred with Wilenchik during Thursday's hearing. Wilenchik accused the judge of being biased against him after he refused to allow him to withdraw from the case.

"There's nobody to pay me. That's just not the way the world of lawyers works, OK. I need to make a living," Wilenchik said, before accusing the judge of smiling during his complaints.

"I'm smiling because I'm thinking of the accusations against me that you made in the motion to recuse me for cause that you did not appeal," Hannah said. "Where you said I'm biased against conservatives and on information and belief a Democrat. I smile every time I think about it because I'm not a Democrat."

Wilenchik continued to complain about Hannah throughout the hearing, arguing that Hannah's August ruling did not actually order Cyber Ninjas to turn over the records and therefore the company could not be held in contempt.

"Mr. Wilenchik you're, you really, you are trolling me, and it's getting very close to direct contempt," Hannah shot back.

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Hannah's ruling came just three days after the Arizona Court of Appeals ordered Cyber Ninjas to pay more than $31,000 in legal fees to the Arizona Republic over its failed appeal of the earlier decision to turn over the records. Wilenchik on Thursday appealed to the Arizona Supreme Court to block Hannah's order, but the motion was rejected.

Wilenchik also tried to remove himself as the company's attorney in a different lawsuit brought by the government watchdog group American Oversight against the Arizona Senate and Cyber Ninjas for the company's records. But Judge Michael Kemp, like Hannah, rejected his request.

"The Court will not consider granting a withdrawal until, at a minimum, the public records have been turned over to the Senate Defendants and CEO Doug Logan has been deposed," Kemp wrote on Thursday, adding that, "there are no significant legal services necessary for counsel to oversee the transfer of public records to the Senate defendants and be present for the deposition of Doug Logan."

Maricopa County officials, who are on the hook for nearly $3 million to replace voting machines officials decertified after they were seized by Cyber Ninjas in the "audit," concluded on Thursday that nearly every claim made by Cyber Ninjas in its "audit" report was "demonstrably false," misleading or based on "flawed or misstated analysis."

 "After an in-depth analysis and review of the reports and presentations issued by the Senate's contractors," the county's report said, "we determined that nearly every finding included faulty analysis, inaccurate claims, misleading conclusions, and a lack of understanding of federal and state election laws."

Read more on the GOP snipe hunt for voter fraud:

By Igor Derysh

Igor Derysh is Salon's managing editor. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

MORE FROM Igor Derysh

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