Remember Nevada Gov. Jim Gibbons (R)? Friend of defense contractors and foe to cocktail waitresses?

Prosecutors convened a grand jury this spring in Washington, DC to investigate whether Gibbons had accepted bribes from defense contractor Warren Trepp. Things have been pretty quiet since then, but last week, The Las Vegas Review-Journal reported that prosecutors had subpoenaed their first witness to testify to the grand jury.

The witness is Michael Flynn, the lawyer who used to represent Dennis Montgomery, Trepp's former business partner who has been the source of the accusations against Gibbons. In a lawsuit against Trepp and in an interview with NBC news, Montgomery laid it all out: he'd seen Trepp pass more than $100,000 in cash and poker chips to Gibbons. There was even an old fashioned briefcase full of cash in the mix. Trepp gave Gibbons the chips, Montgomery said, during a cruise (see picture below). He also produced an email from Trepp to his wife allegedly sent before the cruise, where he responded to his wife's request of "Please don't forget to bring the money you promised Jim and Dawn [Gibbons' wife]," with "Don't you ever send this kind of message to me! Erase this message from your computer right now!"

But it gets muckier. Flynn, who represented Montgomery on the copyright lawsuit against Trepp, says that Montgomery quit paying his bills this spring. So he withdrew from the case. And now he's suing Montgomery for the money -- and saying in a recent filing that his former client is a "pathological liar."

Or as he put it:

"Montgomery has told me so many different lies about so many things, it is virtually impossible to determine the 'true facts,' let alone what parts of his statements are outright false, partially false, misleading or have grains of truth..."

"He is a perfect example of the principle that if you tell a big enough lie, people will believe you."

That threatens to put somewhat of a damper on the government's case -- for their potential star witness to be called a "pathological liar." However, Flynn, walking the finest of lines, says that he doesn't doubt Montgomery's accusations of bribery, saying that Montgomery participated in the bribery himself. All this is likely to make Flynn's testimony before the grand jury rather interesting.

Trepp's attorney, somewhat optimistically, says he thinks the investigation is actually of Montgomery for being such a big fat liar, not Gibbons and Trepp. More likely, prosecutors are investigating whether Trepp's gifts led to the more than $100 million in defense contracts for software, which Flynn calls junk -- and whether their case can hold up.