5113 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK 2 - - - - - - - - - - - - - - X 3 UNITED STATES OF AMERICA, : CR 96 1016(S-1) 4 v. : U.S. Courthouse 5 Uniondale, New York BRUCE W. GORDON, WHO'S WHO 6 WORLD WIDE REGISTRY, INC., : STERLING WHO'S WHO, INC., 7 TARA GARBOSKI, ORAL FRANK : OSMAN, LAURA WEITZ, ANNETTE 8 HALEY, SCOTT MICHAELSON, : STEVE RUBIN, and MARTIN 9 REFFSIN, : TRANSCRIPT OF TRIAL 10 Defendants. :February 20, 1998 11 - - - - - - - - - - - - - - X 1:30 o'clock p.m.
12 BEFORE:
13 HONORABLE ARTHUR D. SPATT, U.S.D.J. and a jury 14 APPEARANCES: 15 For the Government: ZACHARY W. CARTER 16 United States Attorney One Pierrepont Plaza 17 Brooklyn, New York 11201 By: RONALD G. WHITE, ESQ. 18 CECIL SCOTT, ESQ. Assistant U.S. Attorneys 19 For the Defendants: NORM
AN TRABULUS, ESQ. 20 For Bruce W. Gordon 170 Old Country Road, Suite 600 21 Mineola, New York 11501
22 EDWARD P. JENKS, ESQ. For Who's Who Worldwide 23 Registry, Inc. and Sterling Who's, Who, Inc. 24 332 Willis Avenue Mineola, New York 11501 25 (cont'd)
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5114
1 APPEARANCES (cont'd):
2 GARY SCHOER, ESQ. For Tara Garboski 3 6800 Jericho Turnpike Syosset, New York 11791 4 ALAN M. NELSON, ESQ. 5 For Oral Frank Osman 3000 Marcus Avenue 6 Lake Success, New York 11042
7 WINSTON LEE, ESQ. For Laura Weitz 8 319 Broadway New York, New York 10007 9 MARTIN GEDULDIG, ESQ. 10 For Annette Haley 400 South Oyster Bay Road 11 Hicksville, New York 11801
12 JAMES C. NEVILLE, ESQ. For Scott Michaelson 13 225 Broadway New York, New York 10007 14 THOMAS F.X. DUNN, ESQ. 15 For Steve Rubin 150 Nassau Street 16 New York, New York 10038
17 JOHN S. WALLENSTEIN, ESQ. For Martin Reffsin 18 215 Hilton Avenue Hempstead, New York 11551 19
20 Court Reporter: HARRY RAPAPORT, CSR United States District Court 21 Two Uniondale Avenue Uniondale, New York 11553 22 (516) 485-6558
23 Proceedings recorded by mechanical stenography, transcript 24 produced by Computer-Assisted Transcription 25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5115
1 A F T E R N O O N S E S S I O N
2
3 (The following takes place in the absence of the
4 jury.)
5 THE COURT: Good afternoon.
6 MR. WHITE: Your Honor, good afternoon.
7 I want to put one thing on the record.
8 THE COURT: Sure.
9 Where is Mr. Wallenstein? Where is
10 Mr. Geduldig?
11 Someone go out to get them.
12 MR. TRABULUS: While they are doing that, I have
13 a Rule 17 subpoena, Rule 17(b) and (c) subpoena that I ask
14 you to sign.
15 THE COURT: Is everybody here now?
16 MR. WALLENSTEIN: Mr. Lee is on his way down.
17 THE CLERK: Geduldig is still missing.
18 THE COURT: You can all sit down.
19 (Whereupon, at this time there was a pause in the
20 proceedings.)
21 THE COURT: I am signing this subpoena. However,
22 it calls for information which may not be admissible at
23 the trial. It calls for mailing lists that were used by 24 Marquis Who's Who, in essence. 25 MR. TRABULUS: I was not trying to introduce the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5116
1 mailing lists themselves, just reference to their use.
2 THE COURT: Whatever, records or otherwise, I
3 don't know if it is admissible in this trial.
4 You better get some author
ity that says because
5 other people may commit frauds, I can do it, or that it is
11 custom and usage in the home improvement line to make
12 fraudulent bank loans. Does that make it admissible in
13 the trial and acceptable practice? Because the practice
14 itself is not legal, why should it be admissible.
15 In other words, is it a defense?
16 You better get some law on that. And here is the
17 subpoena.
18 MR. TRABULUS: Thank you.
19 THE COURT: Where is Mr. Geduldig?
20 I am going into the jurors and thank them that
21 they are here on time, and tell them I have held everybody
22 up.
23 Don't strike me down. 24 Any objection?
25 MR. TRABULUS: No.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5117
1 MR. NEVILLE: Thank you, your Honor.
2 MR. JENKS: Thank you; no.
3 MR. WHITE: No objection.
4 (The following takes place in the jury room.)
5 THE COURT: How nice to see all of you together
6 in this spacious, ample room, where you can have all the
7 space.
8 I have been tied up in something, and I will be
9 tied up a few more minutes. I want to thank you for being
10 prompt and punctual. Forgive me of keeping you waiting
11 for this period of time. I wanted to say hello to you and
12 welcome you again. I am very happy to have you.
13 A JUROR: We are happy to be here.
14 THE COURT: Good.
15
16 (Whereupon, at this time the following takes
17 place in open court.)
18 THE COURT: Good afternoon, Mr. Geduldig.
19 MR. GEDULD
IG: I apologize, Judge. I think this
20 is the first time I have ever been late, and it is today,
21 which is particularly bad.
22 THE COURT: The jurors buzzed at 25 after 1:00
23 that they were here and ready to go. We should be here 24 before time. I will not lecture. I am not a school 25 teacher, but because of the number of people, especially,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5118
1 it is important to be here on time. I don't like to keep
2 the jurors waiting. They are a very dedicated group.
3 They are entitled to this kind of courtesy.
4 MR. GEDULDIG: They are, Judge.
5 THE COURT: Bring in the jury.
6 MR. WHITE: Your Honor, earlier this week your
7 Honor asked the government to produce to the defense any
8 tapes Mr. West made in connection with the Garden City
9 hotel, in connection with the Oxford Who's Who
10 investigation. We retrieved that file from the closed
11 file of the postal inspection. We have the tapes. We
12 have a copy made for each of the defense attorneys. From
13 the way it looks, the sounds of things, Mr. West will be
14 here on Monday in any event.
15 THE COURT: Have you turned it over to them?
16 MR. WHITE: We just picked it up.
17 THE COURT: At a break show them what you have.
18 MR. WHITE: The one thing I wanted to ad was that
19 the tapes were all contained in the Oxford Who's Who file,
20 which was the enclosed files.
21 Some of them were either mislabeled or misfiled,
22 and in addition to Oxford employees, there are some people
23 on the tape who were former Worldwide employees as well. 24 THE COURT: Which you didn't know about? 25 MR. WHITE: Which I didn't know about. And I
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5119
1 listened to it last night at midnight.
2 THE COURT: You are now definitely turning it
3 over?
4 MR. WHITE: Of course.
5 MR. SCHOER: Tapes we have not seen?
6 MR. WHITE: Yes.
7 THE COURT: You will have an opportunity to see
8 them, certainly over the weekend, if not today. And you
9 can use it over the weekend if you wish.
10 MR. WHITE: Nothing pertaining to these
11 defendants.
12 MR. TRABULUS: Any other 3500 material relating
13 to Mr. West that might have been in that file other than
14 tapes? Things may be 3500 material relating to his own
15 business, or the tapes which we know now which is Who's
16 Who Worldwide?
17 MR. WHITE: The tapes were kept separate from the
18 paper files. The paper files are on their way. They were
19 separate. I understand they are not related, because
20 anything relating to We
st, was in the West Who's Who file,
21 not the Oxford file.
22 THE COURT: You didn't know anything about that
23 until now? 24 MR. WHITE: Yes, your Honor, and I was quite 25 perturbed.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5120
1 THE COURT: You are turning it over?
2 MR. WHITE: Yes.
3 THE COURT: Let me ask, are you students back
4 there?
5 A SPECTATOR: Yes.
6 THE COURT: What school are you from?
7 A SPECTATOR: Tuoro Law School.
8 MR. TRABULUS: The young man with the necktie is
9 my son. He wanted to see a portion of the trial. He has
10 the week off.
11 THE COURT: He is in Tuoro Law School?
12 MR. TRABULUS: No, he is in high school.
13 THE COURT: A future lawyer?
14 MR. TRABULUS: Maybe.
15 MR. JENKS: I can't believe he made him wear a
16 tie.
17 (Whereupon, the
jury at this time entered the
18 courtroom.)
19 THE COURT: Formally, and for the record, good
20 afternoon, ladies and gentlemen. I have already greeted
21 you and expressed my admiration for your dedication in
22 this trial, which is above and beyond.
23 You may proceed. 24 25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5121
1 S T E V E N W A T S T E I N ,
2 called as a witness, having been previously
3 duly sworn, was examined and testified as
4 follows:
5
6 THE COURT: You are previously sworn and you are
7 still under oath, Mr. Watstein.
8 THE WITNESS: Yes.
9 THE COURT: Mr. Geduldig, were you still
10 cross-examining?
11 MR. GEDULDIG: I think I was, Judge.
12 THE COURT: You are going to move along, right?
13 MR. GEDULDIG: I am.
14
15 CROSS-EXAMINATION (con
t'd)
16 BY MR. GEDULDIG:
17 Q Mr. Watstein, I think we had given you a copy of the
18 transcript we were looking at the other day?
19 A Yes.
20 Q I have handed up to you 1325, which is the transcript
21 of the conversation you had with Annette Haley on November
22 11th, 1994. If memory serves me correctly, where we
23 finished off yesterday, we were going through whether or 24 not a delicatessen owner was sufficiently prestigious to 25 be in the registry.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5122 Watstein-cross/Geduldig
1 Do you remember that?
2 A Yes, sir.
3 Q What I would like to do now is turn to page 9 of the
4 transcript.
5 I stand corrected, turn to page -- did we speak
6 about -- did you have a conversation with Ms. Haley on
7 this occasion concerning the benefits you would get as a
8 prosp
ective member?
9 A Yes, sir.
10 Q And we read that attribution at the very bottom of
11 page 6, where Annette tells you about the discounts on
12 long distance and international phone calls and such?
13 A I believe so.
14 Q Now, turn to page 7, a quarter of the way down, right
15 after you say, yeah, where there is an attribution to
16 Annette, where she says to you: But let me tell you, for
17 a five-year membership, it's $350 now.
18 Watstein, right.
19 Annette, and $99 in December of 1995 when the
20 registry is released.
21 You see that?
22 A Yes, sir.
23 Q This conversation is November of 1994; is that 24 correct? 25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5123 Watstein-cross/Geduldig
1 Q She is telling you, you pay 350 now and an additional
2 $99 in approximately 13 months; is t
hat right?
3 A Yes.
4 Q And it goes on.
5 Watstein, so, 350 and 99 --
6 Annette, you'll be in there until the year 2000.
7 Watstein, that's pretty good.
8 Annette, or if you want to be in there for the
9 rest of the your life, that's $550 now.
10 Watstein, I think five years is sufficient.
11 Annette, and $99 in December.
12 Watstein, gotcha.
13 You used that phrase a lot, gotcha?
14 A Yes, sir.
15 Q Were you sending a little subliminal message to these
16 people on the phone?
17 A No, sir.
18 Q And you go on with some of the benefits right after
19 the gotcha. Annette says: With the lifetime you will
20 have a choice of a second wall plaque or the CD-ROM
21 software package. It comes free with the lifetime.
22 Watstein, oh, I see.
23 Annette, otherwise, it's $99. If you buy it with 24 the five year it would be $99
. 25 Watstein, oh, I see, for $100 more I get the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5124 Watstein-cross/Geduldig
1 lifetime and --
2 Annette, exactly. And you'll get the CD-ROM with
3 it.
4 Watstein, so, lifetime is $550, plus $99?
5 Annette, $99 in December of 1995.
6 Watstein, gotcha.
7 You see that?
8 A Yes, sir.
9 Q She is telling you about the split billing, right?
10 A Yes.
11 Q You understood she was talking about split billing,
12 right?
13 A Not as it is defined, but, yes, sir.
14 Q There were going to be two payments?
15 A Yes, sir.
16 Q And she was telling you, if you joined and took the
17 five-year membership, the fee would be, I think she said
18 $550, plus 99, plus an additional charge if you wanted the
19 CD-ROM?
20 A That's correct, sir.
21 Q
Okay.
22 She was telling you if you took the lifetime you
23 would get the CD-ROM for free, or an additional plaque if 24 you chose? 25 A Yes, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5125 Watstein-cross/Geduldig
1 Q That was pretty clear?
2 A I think it was crystal clear, yes, sir.
3 Q Then you go on to a conversation about renewal rates
4 on page 8, virtually in the middle of the page, right
5 after Annette's uh-huh; do you see that?
6 A Uh-huh, yes.
7 Q And Annette says -- I lost it -- she says uh-huh.
8 Watstein, what's your renewal rate? How happy
9 are the members?
10 Annette, everybody.
11 Watstein, everybody renews?
12 Annette, everybody, in fact we do give the
13 people, say they take a five year membership.
14 Watstein, right.
15 Annette, within a year or two, we give them the
16 option of upgrading to a lifetime.
17 Watstein, right.
18 Annette, I would say 85 percent do.
19 Watstein, really?
20 Annette, yep?
21 Watstein, so you would say that in terms of the
22 renewal rate, 95 percent, 100 percent.
23 You saw that? 24 A Yes, sir. 25 Q And she said to you the renewal rate was 85 percent,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5126 Watstein-cross/Geduldig
1 didn't she?
2 A No, sir.
3 Q Well, she said to you, just above that -- go from the
4 bottom where it is you, Watstein, from the bottom up,
5 Watstein, Annette, Watstein, Annette, all right? So it is
6 the fourth attribution from the bottom. You see that?
7 A Yes.
8 Q Annette says, I would say 85 percent do; do you see
9 that?
10 A I believe it modifies --
11 Q I am asking you if you see it?
12 A Certainly.
13 Q And the next two attributions are just one word.
14 You say really.
15 She says, yep.
16 Then you come in, Watstein, so you would say that
17 in terms of the renewal rate, 95 percent to 100 percent.
18 On the next page Annette says 85 percent, right?
19 A Yes, sir.
20 Q And you heard her when you were talking with her on
21 the phone that day, November 11th, 1994, you heard her say
22 85 percent, did you not?
23 A Yes, sir. 24 Q And you responded by saying 95 to 100 percent; is 25 that right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5127 Watstein-cross/Geduldig
1 A Yes, sir.
2 Q Were you trying to mislead her?
3 A No.
4 Q Was there a reason that you purposefully misstated
5 the number she gave you?
6 A Yes.
7 Q You were trying to gotcha her?
8 A
No, sir.
9 Q And in any event, after you say 95 to 100 percent,
10 she corrects you and says 85 percent.
11 By the way, when you up that percentage, you
12 specifically mentioned renewal. You said, so you would
13 say in terms the renewal rate, 95 to 100 percent; correct?
14 A Yes, sir.
15 Q She corrects you to 85 percent; right?
16 A Yes, sir.
17 Q She doesn't say to you you are talking about
18 something different than I'm talking about, does she?
19 A No, sir.
20 Q She says 85 percent.
21 Watstein says 85 percent?
22 Annette, yeah.
23 Watstein, wow, that's really good. 24 Annette, renew their member -- in other words, 25 not even renew it, they, umm.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5128 Watstein-cross/Geduldig
1 Watstein, they pay their dues --
2 THE COURT: You have to slow down,
Mr. Geduldig.
3 You have to go much slower than that.
4 First of all, if someone was following you
5 without reading the transcript, as anybody can, they would
6 have a difficult time doing that. Is the reporter
7 certainly is having difficulty.
8 MR. GEDULDIG: I apologize.
9 THE COURT: You have to slow down. You want the
10 jury to hear it and understand it?
11 MR. GEDULDIG: I have been talking to
12 Mr. Trabulus too long. The two of us go, and it is wind.
13 THE COURT: When he is asked to, he does slow
14 down.
15 MR. GEDULDIG: And I will try, judgment I
16 apologize.
17 Let me pick it up with Watstein saying wow,
18 that's really good?
19 Annette, renew their number -- I am sorry,
20 member. In other words, not even renew it, they, umm --
21 Watstein, they pay their dues or whatever?
22 Annette, yeah, huh, they upgrade to a life
time.
23 Watstein, no kidding. 24 Annette, yeah, we given them the choice to 25 upgrade to a lifetime and almost everybody does.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5129 Watstein-cross/Geduldig
1 Watstein, 85 percent?
2 Annette, I would say at least.
3 Watstein, so maybe I should go for a lifetime up
4 front here, I guess.
5 Annette, well, it's up to you.
6 Do you see that?
7 A Yes, sir.
8 Q So, she is not even encouraging you to take the
9 lifetime. She is saying to you, do whatever you want to
10 do, it is your choice, right?
11 A That was the tactic, sir, yes.
12 Q She wasn't putting any high pressure on you?
13 A A tactic, yes.
14 Q She didn't say, a great idea, buy the lifetime, soak
15 some more money into this operation, did she?
16 A No, sir.
17 Q She said your choice, w
hatever you decide, you do,
18 right?
19 A Her tactic, sir.
20 Q Tactic.
21 Did you ever hear mention from the government or
22 anybody else about a man named Tinny, gray haired man
23 working for Grossman -- I am sorry, Swinney, 24 S W I N N E Y. 25 A There was a gentleman in the witness room with me
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5130 Watstein-cross/Geduldig
1 yesterday, might have been the same gentleman, with gray
2 hair.
3 Q Did he tell you he upgraded?
4 A No, sir.
5 Q He wasn't forced to, he did it on his own?
6 A I have no knowledge of it.
7 Q Upgrading is what she is talking about here, people
8 upgrade?
9 A She is discussing two concepts at the same time, sir.
10 Q Then we go on on the same page in the middle, you are
11 talking, and you say as follows: Yeah, I see.
12 And what does this plaque look like?
13 Before we go on there, had you seen the plaque
14 before you made the phone calls?
15 A I am not sure.
16 Q You can't recall now if you have seen the plaque?
17 A I can't recall.
18 Q You saw the plaque, you just can't recall when you
19 saw it?
20 A That's correct.
21 Q In any event, you go on to say, yeah, I see, and what
22 does this plaque look like? We had a terrible experience
23 here. 24 Annette, the plaque is beautiful. The plaque is 25 really beautiful. It's a marble laminate. It has our
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5131 Watstein-cross/Geduldig
1 seal on it, it would be engaged. It would say, awarded to
2 Chuck C. Sampson, distinguished member of Who's Who
3 Worldwide.
4 Watstein, right.
5 Annette, the member named above is included in
6 the Who's Who Registry.
7 Watstein, right.
8 Annette, and at the bottom of the wall plaque it
9 says: Memberships are limited to those individuals who
10 have demonstrated outstanding leadership and achievement
11 in their occupation, industry or profession. We get
12 letters on it.
13 Watstein, so it's made -- Annette, the wall
14 plaque is beautiful.
15 Watstein, it's made out of marble?
16 Do you see that?
17 A Yes, sir.
18 Q If you go up to where she starts talking about the
19 plaque, about a third of the way up from the bottom, she
20 says the plaque is beautiful, it's really beautiful, it's
21 a marble laminate. You heard her say that?
22 A I don't believe so. There was a pause in the tape at
23 that time. 24 Q It doesn't say pause in the tape? 25 A In the sound.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COUR
T REPORTER 5132 Watstein-cross/Geduldig
1 Q A pause in the sound?
2 A Yes.
3 Q You remember the conversation clearly enough now to
4 say there is a pause in the sound over the telephone,
5 that's why you didn't hear marble laminate?
6 A In that particular case, yes, sir.
7 Q It wouldn't be that you were trying to mislead
8 Annette to say, yes, it is a marble plaque?
9 A No, sir.
10 Q You wouldn't do that?
11 A No, sir.
12 Q It would be a gotcha, where you hear what they say
13 but misrepresent what they say, encouraging them to leads
14 you on to do things that you wouldn't want to do?
15 A Is that a question, sir?
16 Q Yes.
17 A The answer is no.
18 Q You didn't do that.
19 So, you didn't hear her say marble laminate, and
20 you said it was made out of marble by mistake, because you
21 had not heard wha
t Annette told you?
22 A My recollection is it wasn't clear, sir.
23 Q In any event, Annette having heard you say that it's 24 marble, she corrects you at the top of page 10 and says, 25 no, it's a marble laminate.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5133 Watstein-cross/Geduldig
1 Watstein, oh, I see.
2 Annette, marble would be too heavy to hang.
3 Watstein, I gotcha.
4 Annette, yeah, it's a marble laminate, it's
5 beautiful.
6 Watstein gotcha.
7 You see that?
8 A Yes.
9 Q She went back and corrected you?
10 A Yes.
11 Q And she didn't want to mislead you?
12 A In that instance, yes.
13 Q Going on the same page 10, talking about networking.
14 Watstein, these are all things by the way,
15 networking, plaques, the double-billing or B billing,
16 these are all things on the long ch
ecklist that you and
17 Biegelman worked out; is that right?
18 A I can't answer it with a yes or no, sir.
19 Q There was a long list of things we spoke about
20 yesterday, topics you want to bring up in these telephone
21 conversations, you recall that?
22 A Yes.
23 Q And these things we are going through the tape, the 24 transcript now, those things appear in the long list that 25 you and I talked about yesterday?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5134 Watstein-cross/Geduldig
1 A Partially.
2 Q I think everyone was on that list.
3 In any event, let's go on.
4 Watstein then says about a quarter of the way
5 down the page, starting after your last gotcha.
6 Annette, and every year it's a little different.
7 Watstein, umm, now let me ask you this: In terms
8 of networking, which is really what the reason
I called
9 you back --
10 Annette.
11 That computer package is the best. Now, say you
12 want to know every member in Michigan --
13 A place you are familiar with.
14 Watstein, right.
15 Annette, it would come up. Say you want to know
16 all the CFO's.
17 Watstein, right.
18 Annette, or say you may, don't want to go to the
19 CFOs, say you want to know all the directors that are in
20 Michigan.
21 Watstein, right.
22 Annette, okay. They would all come up. Then you
23 want to zero into a certain area. I want to know all the 24 areas in Michigan that are in the plastics industry. I 25 want to know then, the next one, I want to know all the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5135 Watstein-cross/Geduldig
1 members that are in Michigan, that are in the plastics
2 industry, that make plastic
screws, cause --
3 Watstein, really? No kidding.
4 Annette, different items. There could be plastic
5 bread boxes, plastic furniture. You want somebody that
6 makes screws. Then say you want to talk business on the
7 golf course. I want to know all the members that are
8 directors in Michigan that make plastic screws that play
9 golf.
10 Watstein, I see.
11 Annette, so you can zero in by any criteria with
12 that computer package. You know, how a CD-ROM works.
13 Watstein, oh, oh, sure, of course, of course.
14 She is explaining to you the CD-ROM?
15 A Yes.
16 Q And that's the item if you took the five-year
17 membership, you have to pay the $50 for and get free with
18 the five-year membership?
19 A All right.
20 Q Then you go to the other items we talked about the
21 other day, sucker mailing list.
22 You say at the top of page 1
1.
23 Watstein, let me ask you, in terms of the members 24 in general, am I going to end up on some kind of sucker 25 mailing list here?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5136 Watstein-cross/Geduldig
1 Annette, no. It is not in libraries, and
2 hopefully, you are not going to, but our members do get,
3 and receive a registry.
4 Let me stop for a second.
5 When you ran your Who's Who, you told prospective
6 customers that your book was in libraries, didn't you?
7 A That is correct.
8 Q And this Who's Who was telling people honestly,
9 truthfully and accurately, that their Who's Who was not in
10 libraries; is that right?
11 A I can't answer with a yes or no, sir.
12 Q That's what Annette just told you, didn't she?
13 A That individual person said that, yes.
14 Q You are saying Annette might say it this w
ay and
15 someone else might say it a different way?
16 A Yes, sir.
17 Q You go on, you say, well, the members, I don't mind.
18 Annette, every single person, we have Fortune
19 500, million dollar companies here. Everybody has to be
20 interviewed to be in this registry. Not one person. And
21 there are people you read about in the media, names that
22 you know, companies that you know, they weren't in here
23 unless they were interviewed. 24 Watstein, so even the famous people get 25 interviewed.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5137 Watstein-cross/Geduldig
1 Annette, yeah, everybody.
2 Watstein, really?
3 Annette, everybody.
4 Watstein, let me ask, in terms, so you're not
5 going to rent my name out to someone else?
6 Annette, no, definitely not.
7 Watstein, okay, okay, I just --
8
Annette, our organize -- no.
9 Watstein, we've had some bad experience being
10 telemarketed, people hocking us.
11 You were referring to your own company, I
12 suppose?
13 A No, sir.
14 Q That's the kind of things you did?
15 A We were engaged in telemarketing business in many
16 companies.
17 Q You were engaged in a criminal telemarketing
18 business?
19 A At that point in time, yes.
20 Q Annette goes on.
21 What can I say to you? If we do have a member --
22 Watstein, member, I don't worry about, cause they
23 will have been interviewed. 24 Annette, yeah, but, no, of course not, definitely 25 not, not with people we have, no.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5138 Watstein-cross/Geduldig
1 Now, when she says what can I say to you if, if
2 we do have a member, and then you cut her o
ff.
3 What she was going to tell you is members could
4 conceivably use the names and addresses in the registry
5 and do it as they will, but her company does not sell the
6 names of the members in the registry to outside mailing
7 lists; isn't that right?
8 A Is that a question, sir?
9 Q Yes, is that right?
10 A Was she asking me that, implying that?
11 Q She was about to say that to you when you cut her
12 off?
13 A I don't know what she was about to say.
14 Q You cut her off?
15 A Yes, sir.
16 Q Do you remember that clearly, cutting her off?
17 A Not totally, no, sir.
18 Q You remember the other part about the marble laminate
19 wall?
20 A Yes, sir.
21 Q My question is:
22 When you heard the information coming out of
23 mouth of a telemarketer, like Annette Haley, and knew the 24 conversation was being recorded,
and you knew you wouldn't 25 like what they were going to say because it wasn't going
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5139 Watstein-cross/Geduldig
1 to be a gotcha, did you purposefully interrupt the
2 conversation so they would not say the things that you did
3 not want to hear?
4 A No, under any circumstances, sir.
5 Q There was nobody listening to you. Mr. Biegelman was
6 not at your shoulder listening to these conversations when
7 you were having these tape recorded conversations, was he?
8 A No, sir.
9 Q You did it completely on your own?
10 A With the exception of one tape, yes, sir.
11 Q So you sat in a room someplace in Georgia, Florida,
12 or New Jersey, where you happened to be by yourself making
13 these calls?
14 A That's correct, sir.
15 Q And then we go on to seminars, another item on the
16 list.
17 Q This is almost the bottom of the page?
18 A What page?
19 Q Page 11, after the last attribution where Annette
20 said they don't sell the names to outside mailing lists.
21 Watstein, I see.
22 One other question, in terms of getting together
23 with other members -- Annette, yeah, we have business 24 seminars, we had one in December in Vietnam and Hong Kong. 25 Watstein, right.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5140 Watstein-cross/Geduldig
1 Annette, we, we were having one, I think. I
2 didn't hear anything about it, but I am sure it was a
3 success in South Carolina. We had a golf and tennis
4 tournament combined with some business seminars. So we
5 always have something.
6 Watstein, oh, really?
7 When was the one in South Carolina. That one I
8 would have attended.
9 And that
's a subject that you and Biegelman had
10 some discussions about, right?
11 A No, sir.
12 Q In any event, Annette goes on and says, yeah, that
13 was --
14 Watstein, Vietnam is too far for me.
15 Annette, months ago, it was months ago.
16 Watstein, months ago?
17 Annette, no, it was months ago. But I know
18 they're going to be having, you know, when you get that
19 quarterly magazine --
20 You say right.
21 Annette, always read that over. All the
22 information would be in there.
23 Do you see that? 24 A Yes, sir. 25 Q And she is telling you the information regarding
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5141 Watstein-cross/Geduldig
1 seminars and business conferences and golf outings is
2 printed in the publication, Tribute?
3 A Yes, sir.
4 Q And that's where you get your infor
mation, and she
5 gets her information?
6 A She didn't say that, sir.
7 Q Didn't she say read over the publication, the
8 magazine? She says, no, it was months ago, but I know
9 they are going to be having, you know, when you get that
10 quarterly magazine? She is talking about the Tribute
11 Magazine, right?
12 A Yes, sir.
13 THE COURT: You interrupt and she says always
14 read that over. All that information would be in there.
15 Isn't she referring to the seminars where the
16 company holding information about the seminars being
17 printed in the quarterly magazine?
18 A As far as me obtaining my information, yes, sir.
19 Q You don't know if she got the information from the
20 same place or not?
21 A That is correct, sir.
22 Q The information she gave you about the seminars could
23 well have come from the magazines? 24 A Possibl
y. 25 Q You go on talking about famous people.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5142 Watstein-cross/Geduldig
1 Watstein says, would it list some of the famous
2 people that are members there?
3 Annette, oh, yeah.
4 We have been doing a profile on 25 outstanding
5 members, umm, with their picture, you know, people that
6 maybe have started businesses, that really have
7 outstanding stories. Although we do have the president of
8 Izod -- although we do have the president of Izod, we have
9 the president of Viacom, you know, major, major companies.
10 Watstein, and all those people -- Annette, I'm
11 not supposed to be telling you those names, because it's
12 like marketing, or soliciting.
13 Watstein, no, we don't want you to do that.
14 That was a little tongue and cheek, right? You
15 really did want her to do
that?
16 A No, sir. I previously testified to that.
17 Q Annette says, but you will see for yourself.
18 Watstein, but all those people were interviewed
19 by in the same fashion?
20 Annette, yeah.
21 Watstein, no kidding.
22 Annette, everybody had to be interviewed in order
23 to be in the registry. 24 You see that? 25 A Yes, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5143 Watstein-cross/Geduldig
1 Q And going over to page 13, there is a conversation
2 where she is asking you for some personal information
3 about maybe a fifth, 20 percent, or a quarter of the way
4 down from the top of the page, Annette starts talking and
5 she says, all right, let me just go over a few more things
6 and then you can call me back with the credit number.
7 Watstein, sure.
8 Annette, do you want the lifetime?
9 Watstein, yes, please.
10 Annette, okay, all right. It's Chuck C. Sampson,
11 all right? I'll get the address later, but right now I
12 need the name of a famous business magazine. She coughs.
13 You see how she coughs there, they write it in?
14 A Yes.
15 Q And the parts about the pause you say about the
16 marble plaque, there was no cough there?
17 A I have the voice going down lower, sir.
18 Q Nothing in the transcripts about a malfunction or
19 pause or lowered voice?
20 A My recollection is it was lowered sir.
21 Q Going back to the page, we can look it up.
22 Watstein goes back to the say -- Watstein goes on
23 to say, I guess the Detroit Free Press is the closest I 24 come to. 25 Annette, excuse me?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5144 Watstein-cross/Geduldig
1 Watstein, Detroit Free Pres
s.
2 Annette that's --
3 Watstein, newspaper.
4 Annette.
5 Watstein says Detroit Free Press.
6 Annette, that's --
7 Watstein, a newspaper.
8 Annette, a newspaper.
9 Watstein, newspaper, yes.
10 Annette says, no, I wanted a magazine.
11 Watstein, you know, I really don't read any
12 business magazines. To tell you the truth -- Annette,
13 Success, Incorporated, CEO --
14 Watstein, put down whatever you want. Make it
15 up.
16 You wanted her to do that, didn't you?
17 A It had no importance, sir.
18 Q Of course it does. She puts it down, she is making
19 something up, it is just a shill, meaningless no, merit?
20 A No, sir, it is not a significant issue which magazine
21 a person read.
22 Q Why didn't you just give a magazine?
23 A Unimportant. 24 Q If we are trying to show how meaningless the registry
25 is, pointless the interview is, wouldn't it prove your
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5145 Watstein-cross/Geduldig
1 point if she asks for your favorite magazine, if you say
2 make it up, I don't care, and she does it?
3 A I don't think so.
4 Q You don't think so?
5 A No.
6 Q You didn't think to give her any magazine at all?
7 A Not in this case, it was unimportant.
8 Q You were not trying to gotcha, were you?
9 A No.
10 Q In any event, in response to what might be a
11 deceptive act on your part, she says, Fortune.
12 You say put down whatever you want. Make it up.
13 She continues, and says Fortune?
14 You say, you? And Annette says Fortune.
15 Watstein says, sure, make it up, sure.
16 You are insisting she make it up, right? You
17 will not let it go, will you?
18 A Sir, it was ins
ignificant, a waste of time.
19 Q Give her a magazine, make it up, Newsweek, the
20 Wharton Business Record or something?
21 A There is no such thing.
22 Q A good reason to give it. That's what you were in
23 the business of, making things up? 24 A No, sir. 25 Q Annette says, sure you can make it up, sure.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5146 Watstein-cross/Geduldig
1 She says I also need the name of a favorite
2 vacation place.
3 You respond, Iron Ridge in Oak, Michigan, is that
4 right?
5 A Yes.
6 Q And she takes some more information from you.
7 This is a conversation you were recording for
8 Mr. Biegelman?
9 A Yes, sir.
10 Q You were going to write a critique or summary of the
11 circumstances surrounding this tape recorded conversation
12 and send it along with the tape to Mr. B
iegelman?
13 A Not necessarily, sir.
14 Q Did you do it in this case?
15 A I have no recollection.
16 Q In any event, you hit virtually all the subjects that
17 you and I discussed, and you said were subject that you
18 were particularly interested in, right?
19 A You said that, sir.
20 Q Well, if I am wrong, say I am wrong.
21 We talked the other day about a list of subjects
22 that you like to bring up in these recorded conversations;
23 is that right? 24 A Part of the subjects, yes, sir. 25 Q And the subjects we mentioned were the percentage
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5147 Watstein-cross/Geduldig
1 accepted; is that right?
2 A Yes, sir.
3 Q And that was discussed here?
4 A I don't recall that.
5 Q The 85 percent, the five percent of the people who
6 were accepted, something l
ike that?
7 A Yes, sir.
8 Q And 85 percent renewal rate? We talked about that in
9 this conversation?
10 A Not on that list, sir.
11 Q Let's go down the list. We only hit one so far?
12 A Yes, sir.
13 Q And we talked how people are nominated?
14 A Yes, sir.
15 Q How people are in business?
16 A I don't believe we discussed that.
17 Q Is Who's Who Worldwide Financial stable, not
18 discussed in this tape?
19 A Right.
20 Q Was everybody interviewed was discussed?
21 A Yes, sir.
22 Q The plaque made of marble, was discussed?
23 A Yes, sir. 24 Q Benefits received was discussed? 25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5148 Watstein-cross/Geduldig
1 Q Is it prestigious, was discussed?
2 A I am not sure it was.
3 Q Remember, deli owners don't belong in the regis
ter?
4 A I don't know if we discussed it was prestigious.
5 Q Is that what you said, I am not going to find my name
6 here with a deli owner?
7 A I didn't phrase it that way.
8 Q Wasn't that conversation in this tape recording?
9 A Deli owner and prestige are two different words, sir.
10 Q I know that, you can't shine a light on it. You have
11 to be a little clever about it? You can't say to Annette
12 during the course of the tape recorded conversation,
13 listen, I am recording the conversation, I would like to
14 talk about how prestigious the list is, you did it in a
15 more subtle way?
16 A Not so, but one can think that.
17 Q When you said, I will not find my name among a bunch
18 of deli owners, what did you imply?
19 A Other causes of prestige, useless reference value,
20 for example.
21 Q I will let you explain useless reference value when
22 Mr. White asks you questions.
23 You discussed split billing with Annette? 24 A Yes, sir. Is that on my list? 25 Q I am reading the list to you, I can assure you.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5149 Watstein-cross/Geduldig
1 We talked about networking, that's in the
2 conversation?
3 A Yes.
4 Q We talked about seminars, and that's in here?
5 A Yes, sir.
6 Q And what we have here is Annette saying that five
7 percent of the people had an -- that apply become members?
8 A Yes, sir.
9 Q And we have Annette saying that there were seminars
10 held in Vietnam, Hong Kong and Hilton Head, and you should
11 read the magazine for the information on those seminars?
12 A Future seminars she said.
13 Q I don't think future. She said read the magazines
14 for the information on the seminars.
1
5 In any event, the transcript is what it is, but
16 there was that conversation as well; is that right?
17 A Yes, sir.
18 Q And for those otherwise, all the information she gave
19 you was pretty accurate on the money; am I right?
20 A No.
21 Q You don't think so.
22 In any event --
23 A Not at all, sir. 24 Q In any event, because of the five percent, and 25 because telling you about seminars that appear in the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5150 Watstein-cross/Geduldig
1 magazine, you are sitting here now today and you are
2 convinced that Annette Haley should be tried and convicted
3 of the crimes that you committed; is that correct?
4 MR. WHITE: Objection.
5 THE COURT: Can I hear that again, Mr. Reporter,
6 please.
7 (Whereupon, the court reporter reads the
8 requested material.)
9 THE COURT: Objection sustained.
10 MR. GEDULDIG: Judge, I have no other questions.
11 THE COURT: Mr. Neville, you may proceed.
12 MR. NEVILLE: Thank you, your Honor.
13
14 CROSS-EXAMINATION
15 BY MR. NEVILLE:
16 Q Hello. My name is Jim Neville, I represent Scott
17 Michaelson.
18 A Yes, sir.
19 Q You know Scott?
20 A Not personally, no.
21 Q You spoke to him on the phone?
22 A Yes, sir.
23 Q I wanted to ask you a few questions about the 24 catalogue from your company that you ran? 25 A Yes, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5151 Watstein-cross/Neville
1 Q I am referring to Defendant's Exhibit AO.
2 Is it really true you sold Lear Jets?
3 A If you bring me a copy of the catalogue, I will be
4 happy to respond to your question, sir.
5 (Handed to the witness.)
6 A Thank you.
7 Would you repeat the question, please, thank you.
8 Q Is it really true that you sold Lear Jets?
9 A I can't answer that with a yes or no, sir.
10 Q Is a Lear Jet one of the items in that catalogue?
11 A Yes, sir.
12 Q Is a Lear Jet for sale, one of the items in that
13 catalogue?
14 A Yes.
15 Q Is a Lear Jet for sale for some seven million plus
16 dollars in that catalogue for sale?
17 A Yes.
18 Q How many of those did you sell?
19 A We sold none of them, sir.
20 Q Did you have a stock from the Lear Jets?
21 A I had a conversation with Lear Jet and gained their
22 permission to have it for sale in the catalogue, sir.
23 Q Did you have a conversation with Lear Jet lately? 24 A No, sir. 25 Q Who is Edward Diamond in your business?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5152
Watstein-cross/Neville
1 A A name made up for the purpose of the catalogue, sir.
2 Q In the catalogue, I am looking, and I will show it to
3 you, if you can't remember, but did you make this
4 catalogue up? Did you have a hand in putting it together,
5 producing it, that kind of a thing?
6 A Yes, sir.
7 Q And there is a letter from the president, and it is
8 signed, Ed?
9 A Yes.
10 Q And that's Edward Diamond, the president?
11 A Yes, sir.
12 Q And there is a picture of a guy in the upper
13 right-hand corner, is that Ed?
14 A Ed Joseph, sir. If you show me a copy and bring it
15 up I will tell you.
16 (Handed to the witness.)
17 A Yes, sir. It is Ed Joseph and asked to be called Ed
18 Diamond in the catalogue.
19 Q Where is Ed Joseph now? Do you know?
20 A He passed away, sir.
21 Q Sorry to hear that.
22 S
ome of my colleagues were naive, but I heard you
23 were selling trips to the moon. Is that true? 24 A In a whimsical sense. 25 Q In a whimsical sense?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5153 Watstein-cross/Neville
1 A Yes.
2 Q How much did it cost for that whimsical trip to the
3 moon?
4 A You have to give me the catalogue and I will see.
5 What page is it on?
6 Q I don't know. I was told it was in there. I just
7 want to check with you?
8 A I don't readily see it, but it was done in a
9 whimsical sense.
10 Q What do you mean?
11 A In the same fashion that Neiman Marcus just sold two
12 twin elephants on the cover of the catalogue. There was
13 no intention to sell it. It was just created for an
14 ambiance for the catalogue.
15 Q I guess Senator Glen doesn't need your catalogue. He
16
is going into space without you; is that correct?
17 A I assume that's correct, sir.
18 Q To get this straight, and you have to take it slowly
19 with me, because I have trouble keeping up with you.
20 You were arrested when?
21 A In May of 1992.
22 Q The first time you got arrested you closed down the
23 business on Cutter Mill Road but then went to North Shore 24 Towers and get going with the business? 25 A Inaccurate, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5154 Watstein-cross/Neville
1 Q I am sorry, that's after the search warrant was
2 executed?
3 A You have to rephrase the question, please.
4 Q When the Cutter Mill Road business was searched by
5 the government, you didn't get arrested then?
6 A No, sir.
7 Q You then began to run your business from North Shore
8 Towers after that, right?
9 A No, sir.
10 Q Did you ever run your business out of North Shore
11 Towers?
12 A Yes.
13 Q Was that after you were in Cutter Mill Road?
14 A They weren't contiguous, sir.
15 Q How come I can't get a straight answer out of you?
16 MR. WHITE: Objection.
17 THE COURT: Sustained.
18 Q You were arrested in May of 1992?
19 A Yes, sir.
20 Q And you started to cooperate with the government
21 when, about a month after that, or so?
22 A The initial discussions were in July of 1992. The
23 agreement was entered into in September of 1992. 24 Q All right. 25 The time frame when you were making the telephone
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5155 Watstein-cross/Neville
1 calls here when you spoke to a bunch of different people,
2 among them Scott Michaelson, was in 1994, right?
3 A By making the
telephone calls here? I am sorry.
4 Q In this case. You were here on this case. I am
5 sorry, if I am not as exact as you.
6 This case, Scott Michaelson, my client, phone
7 calls, does that all -- come to you?
8 A I understand the phrases, sir.
9 Q So, the phone calls you made that had to do with this
10 case, were in 1994, right?
11 A And 1995, yes, sir.
12 Q All right.
13 When was it again that you heard from your lawyer
14 about the Marquis Who's Who lawsuit against Mr. Gordon's
15 business?
16 A I believe it was 1994.
17 Q When in 1994?
18 A I don't have a clear recollection, sir.
19 Q Come on, spring, fall, winter?
20 A I believe it was the spring if you like me to guess,
21 sir.
22 Q So, you heard in the Spring of 1994 about the Marquis
23 Who's Who lawsuit against Mr. Gordon, right? 24 A That's correct, sir, if my g
uess is correct, yes. 25 Q And you then, after hearing from your lawyer about
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5156 Watstein-cross/Neville
1 the lawsuit, you then told Inspector Biegelman about it;
2 is that right?
3 A That is correct.
4 Q And Inspector Biegelman is not in the courtroom; is
5 that right?
6 A That is correct, sir.
7 Q You still keep in touch with him?
8 A I spoke to him briefly, sir. I ran into him, but I
9 didn't keep in touch with him.
10 Q Are you working on any cases presently?
11 A No, sir.
12 Q So, you told Inspector Biegelman about this lawsuit.
13 When was that?
14 A When did I tell him about it?
15 Q Yes?
16 A I previously told you I guessed it was in the Spring
17 of 1994.
18 Q I asked you when your lawyer told you about it?
19 A It would have been i
mmediately thereafter.
20 Q How immediately?
21 A It would have been within a day, sir.
22 Q You picked up the phone and called Inspector
23 Biegelman? 24 A I believe I sent a memo. I don't have a definite 25 recollection.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5157 Watstein-cross/Neville
1 Q Did you do any testifying at the Marquis Who's Who
2 trademark infringement suit?
3 A I was at the Court. I don't have a clear
4 recollection as to whether or not I did.
5 Q Were you subpoenaed to testify?
6 A I don't have a recollection as to that. I was
7 certainly in court and saw the proceedings.
8 Q You don't remember if you testified, but you were at
9 the court?
10 A Yes, sir.
11 Q You are sure of that?
12 A I am sure of that.
13 Q Why would you have been there if you didn't testify?
14
A I think the matter might have been heard on the
15 motion of papers and not witnesses. I could have been
16 incorrect about that.
17 Q Why would you be there? What would you have to do
18 with that unless you were called as a witness?
19 A I maintained an interest in the outcome of the
20 matter, certainly. Wouldn't that be logical?
21 Q Sure would. An intense interest, no?
22 A Yes, it was important.
23 Q Now, your lawyer told you about the lawsuit or the 24 results of the lawsuit between Marquis and Mr. Gordon's 25 business?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5158 Watstein-cross/Neville
1 A I believe there were several conversations about it.
2 It goes back many years ago. I am not quite sure.
3 Q Your lawyer tells you about it, and within a day you
4 call Marty Biegelman; is that right?
5 A No, sir.
6 Q I thought that's what you said?
7 A No, sir. Not what I said.
8 Q All right. Tell me what you said?
9 A I sent him a memo.
10 Q Within a day?
11 A Yes.
12 Q And you communicated with Marty Biegelman within a
13 day?
14 A Yes, sir.
15 Q You are absolutely right. I have to be more
16 precise.
17 Now, you don't remember if your lawyer told you
18 about the results of the case or just the fact that it was
19 pending; is that your testimony?
20 A My best recollection is there were two separate
21 matters, hearing about the lawsuit and the outcome was
22 separately attached. I am not quite sure then.
23 MR. NEVILLE: Do we have this memo? 24 Q When you sent this memo to Marty Biegelman, what did 25 you say? What was your interest in the case?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5159 Watstein-c
ross/Neville
1 A I will have to see the memo to have my memory
2 refreshed.
3 Q We can come back to that.
4 A Certainly.
5 Q After you sent the memo to Marty Biegelman, did he
6 contact you or get back to you?
7 A I believe he contacted my attorney and not me. I am
8 not quite sure.
9 Q Marty Biegelman heard about the lawsuit from you,
10 didn't know anything about it? Do you know?
11 A That is my guess on it, that might be. I am not
12 quite sure.
13 Q I will hand you what is marked as 3500-22-G, and ask
14 you if you recognize it.
15 (Handed to the witness.)
16 Q I know it is not the memo we have been referring to,
17 but is it a memo you sent to Marty Biegelman.
18 How many memos did you send to Marty Biegelman?
19 A About three over the years.
20 Q How many times did you speak to him over the phone?
21 A Ten or 15
over the years.
22 Q Ten or 15 times over a few years?
23 A Over the phone, yes, sir. 24 Q Did you ever have any conversations with any of the 25 Marquis Who's Who attorneys, a Mr. Bailey, for example?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5160 Watstein-cross/Neville
1 A Yes, sir.
2 Q How about Mr. Douglas?
3 A It wasn't a yes to Mr. Bailey. It was just a yes in
4 general.
5 Q All right.
6 Did you speak to Mr. Bailey?
7 A I don't have a recollection of that name, sir.
8 Q How about Mr. Skalka?
9 A The name doesn't ring a bell to me, sir.
10 Q But you did speak to some of their lawyers?
11 A In reference to litigation we had with Marquis, yes,
12 sir.
13 Q Did you ever have any discussions with those lawyers
14 after you found out about the trademark infringement
15 lawsuit brought by Marqu
is against Mr. Gordon?
16 A No, sir.
17 Q When you were facing Judge Mishler for sentencing you
18 didn't want to go to jail?
19 A That's true.
20 Q You weren't sure you would go to jail or not; is that
21 correct?
22 A Yes, sir, that's correct.
23 Q Correct me if I am mistaken, but you sent a letter or 24 a fax to Judge Mishler, pleading for leniency, didn't you? 25 A I think that's an accurate characterization, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5161 Watstein-cross/Neville
1 Q A normal thing for someone in your position to do,
2 nothing wrong with that?
3 A I don't know if it is normal or not. It is an
4 accurate characterization of the memo.
5 Q I would have done that certainly, too.
6 You didn't want to go to jail for many reasons.
7 A Yes, sir.
8 Q And one of the reasons it is not nice
to have someone
9 lock you into a room at night?
10 A Correct.
11 Q Your personal freedom is cut back?
12 A Correct, sir.
13 Q I bet one of the most or more important things that
14 weighed on your mind is what you going to jail would do to
15 your family?
16 A An accurate statement, yes.
17 Q Your children?
18 A Yes, sir.
19 Q Your sons?
20 A Yes.
21 Q And, in fact, you made it clear to Judge Mishler, one
22 of your sons specifically you were quite worried about?
23 A That's correct, sir. 24 Q Do you know anything about Scott Michaelson and his 25 kids?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5162 Watstein-cross/Neville
1 A No, I have no knowledge of Scott Michaelson at all.
2 Q When you were speaking to Scott Michaelson over the
3 telephone did you have any idea what he was all a
bout or
4 who he was?
5 MR. WHITE: Objection.
6 THE COURT: Well, you missed the last question.
7 That I would have sustained.
8 MR. WHITE: Mr. Neville was too quick for me,
9 sorry.
10 THE COURT: This one I will let go, overruled.
11 A Repeat it, please.
12 Q When you called in on this case, and spoke to Scott
13 Michaelson on the phone, did you have any idea of who he
14 was, or what he was about?
15 A Other than as he discussed with me, no, sir.
16 Q You spoke about your present employment. You do some
17 consulting for three different outfits?
18 A Yes.
19 Q Just Great Coffee?
20 A Yes, sir.
21 Q Larry Tucker?
22 A Yes, sir.
23 Q And Core State Bank; is that correct? 24 A Yes, sir. 25 Q Where is Just Great Coffee based?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5163 Wa
tstein-cross/Neville
1 A New Jersey, sir.
2 Q Who owns the company?
3 A Bruce Seitz, S E I T Z.
4 Q Is he an acquaintance of yours other than just in
5 business relations?
6 A He was initially, but has become an acquaintance of
7 mine, he wasn't initially.
8 Q He is not a family member?
9 A No, sir.
10 Q Anyone in your family work for that outfit?
11 A No, sir.
12 Q You told Mister -- what was his name, Seitz?
13 A Yes, sir.
14 Q You told him you are a convicted felon?
15 A That is correct, sir.
16 Q How about Larry Tucker, where is that located?
17 A Located in Saddle River, New Jersey, sir.
18 Q Who owns Larry Tucker?
19 A Larry Tucker.
20 Q You told Larry Tucker about the fact you are a
21 convicted felon?
22 A Yes, sir.
23 Q Nothing wrong with someone convicted of a felony 24 getting thei
r life back together, but certainly the 25 employers should know the facts when they hire somebody,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5164 Watstein-cross/Neville
1 right?
2 A As to an employer, yes, sir.
3 Q I can understand why you may want to hide that from
4 someone, but from an employer's perspective, you may
5 understand they may want to know that kind of a thing,
6 right?
7 A From an employer's standpoint, yes, sir.
8 Q Especially an employer like a bank; is that right?
9 A No, sir, the bank is not my employer, sir.
10 Q Does the bank pay you any money?
11 A It pays my company a consulting fee, sir.
12 Q In other words, the advice you give to Core State
13 Bank is not coming out of goodness of your heart?
14 A No.
15 Q And they don't expect it to come out of the goodness
16 of your heart, they exp
ect you -- to pay you for it?
17 A Yes, sir.
18 Q Core State Bank is in Philadelphia?
19 A Yes.
20 Q A big outfit?
21 A Yes, just acquired by a major bank, First Union Bank.
22 Q I will come back to the bank, but before I do that, I
23 will ask if you remember any of the conversations you had 24 with any of the other sales people at Who's Who Worldwide 25 or Sterling.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5165 Watstein-cross/Neville
1 Do you remember a person by the name of Ed
2 Shaffer, S H A F F E R?
3 A I believe so, yes, sir.
4 Q Do you see him here in the courtroom?
5 A No.
6 Q How about --
7 A I would not know him if he were here, sir.
8 Q How about Marilyn Pierce? Remember speaking with
9 her?
10 A That name is familiar, sir.
11 Q Do you see her?
12 A I wouldn't kn
ow her if I saw her.
13 Q How about Robert lamb?
14 A It doesn't ring a bell, but it is possible.
15 Q How about Bob, does that ring a bell?
16 A Possibly, but it doesn't ring a bell.
17 Q Michael Powers?
18 A Yes, sir.
19 Q Do you see him in the courtroom?
20 A I don't know Mr. Powers, sir.
21 Q How about Michael Esposito?
22 A That one doesn't ring a bell, sir.
23 Q Tom Randall? 24 A I believe so, sir. 25 Q Do you see him in the courtroom?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5166 Watstein-cross/Neville
1 A I don't know Mr. Randall, sir.
2 Q How about Carl Roper?
3 A That one doesn't ring a bell, sir.
4 Q How about Jill Barnes?
5 A Yes, sir, that name rings a bell.
6 Q Is she in the courtroom?
7 A I don't know her, sir.
8 Q Joe Parks?
9 A I am not sure, sir.
10 Q David Vine?
11 A I am not sure, sir.
12 Q As in a snake in the vine.
13 A I understand the spelling. I am not familiar with
14 the name. I am sure it is possible.
15 Q How about Madeline Bailey?
16 A That sounds familiar.
17 Q Do you see her here?
18 A I don't know Ms. Bailey, sir.
19 Q Tina Walsh?
20 A That sounds familiar.
21 Q Is she in the room?
22 A I wouldn't know Ms. Walsh, sir.
23 Q How about Larry Dodge, as in dodging going to jail? 24 MR. WHITE: Objection. 25 THE COURT: Sustained.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5167 Watstein-cross/Neville
1 A It doesn't ring a bell, sir.
2 THE COURT: You don't have to answer that. It is
3 stricken.
4 A Sorry.
5 Q Kevin McCarthy?
6 A It doesn't ring a bell, sir.
7 Q The names you used when you called
up on these
8 assignments -- okay if I call them assignments from
9 Inspector Biegelman?
10 A Acceptable, sir.
11 Q Where did you get those names? Where did they come
12 from?
13 A I made them up, sir.
14 Q Where did the name Edward X. Grimaldi,
15 G R I M A D L I, come from?
16 A I used the name from my imagination, sir.
17 Q Chuck Sampson, we spoke about that yesterday.
18 A Yes, sir, the answer to all these names would be the
19 same.
20 Q Like Sampson and Dalila?
21 A I am not sure where it came from, sir.
22 Q Jacob Cawfield?
23 A The same thing. 24 Q Any relation to Holden? 25 MR. NEVILLE: C A W F I E L D, I believe. I have
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5168 Watstein-cross/Neville
1 read some books.
2 Q Howard Lauter, L A U T E R?
3 A I merely created that n
ame as I previously testified.
4 Q Let's get back to Core State Bank.
5 A Yes, sir.
6 Q When you say that the Core State Bank pays your
7 company a consulting fee, am I correct that that means
8 that some of the money that Core State Bank has ends up in
9 your pockets?
10 A No, sir, it would not be an accurate statement.
11 Q Okay.
12 Does it mean some money from Core State Bank ends
13 up in a bank account, what was it, the beneficial interest
14 in?
15 A I can't answer with a yes or no, sir.
16 Q How much money did Core State bank pay, or maybe I
17 should say remit to your company for consulting fees in
18 the last year?
19 A Approximately $30,000.
20 Q What kind of consulting do you do for Core State
21 Bank?
22 A Marketing consulting.
23 Q Didn't I hear you say something about assets? 24 A They are in the asset base le
nding business, sir. 25 Q Asset base lending business, what is that?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5169 Watstein-cross/Neville
1 A Providing a loan secured by accounts receivable and
2 inventory of a company.
3 Q Wow. I have no idea what you just said, but I
4 believe you.
5 That has to do with some of the money that the
6 bank has that gets lent out to people who are going to
7 borrow it; right?
8 A Yes, sir.
9 Q Like, if I will buy a house, the bank lends me money
10 so I can buy the house, right?
11 A If you want to rephrase that question, I don't
12 understand what you are saying, sir.
13 Q Okay.
14 Can you give us an example of one of the
15 assignments you had with Core State Bank? What was one of
16 the assignments you worked on?
17 A To train their salespeople, sir.
18 Q Fo
r telemarketing stuff?
19 A No, for calling officer programs, C A L L I N G,
20 calling officer programs.
21 Q What is that?
22 A An officer who makes visits to potential borrowers.
23 Q What do you teach those people at the bank? 24 MR. WHITE: Objection. 25 THE COURT: Sustained.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5170 Watstein-cross/Neville
1 Q Do you teach them anything about puffing the drop?
2 MR. WHITE: Objection.
3 THE COURT: Sustained.
4 Q That book you wrote about the Power and Pleasure of
5 Sex.
6 A Yes.
7 Q It sounds like a must read?
8 MR. WHITE: Objection.
9 THE COURT: Is that a question or a statement,
10 Mr. Neville?
11 MR. NEVILLE: I don't know what it was, your
12 Honor. I will withdraw it.
13 THE COURT: The jury has been instructed a number
14 of times
that these statements are not evidence in the
15 case. You are totally to disregard them, whether humorous
16 or not. The fact that they may be humorous doesn't give
17 it any evidentiary standing whatsoever.
18 Q You do some consulting for Core State Bank?
19 A Yes.
20 Q And Core State has money?
21 A Yes.
22 Q Stock portfolios?
23 A I don't know if they do. 24 Q Mortgages, probably? 25 A I assume so. I am not involved in that aspect of
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5171 Watstein-cross/Neville
1 their business.
2 Q Now, marketing -- you are instructing people at the
3 bank to make sales, learning how to make sales?
4 A Yes, sir.
5 Q Do you know if Core State Bank has any pension funds
6 that are handled?
7 A I have no idea.
8 Q Individual retirement accounts?
9 A I assum
e so, I am not sure.
10 Q Credit unions?
11 A Perhaps.
12 Q Education loans?
13 A I have no idea.
14 Q Business loans?
15 A I assume so. An asset base loan is a business loan.
16 Q Say it again, sir?
17 A An asset base loan is a business loan.
18 Q Asset, like A S S E T?
19 A Yes.
20 Q Like having assets, like having money?
21 A No. Like inventory and accounts receivable.
22 Q So, would you agree with me, that you, helping to
23 train some of these people at Core State Bank to make 24 sales in their assets based division is a most important 25 affair at the bank?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5172 Watstein-cross/Neville
1 A No, sir.
2 Q Is it an important affair at the bank?
3 A I am a minor consultant of that company, yes, sir.
4 Q And whether you are minor or major, the
bank has an
5 assets based sales program because it considers it
6 important enough to spend time on it; is that right?
7 A Yes.
8 Q And whether your minor or major is an -- is as a
9 consultant, the assets based division of the bank involves
10 important affairs of the bank; is that right?
11 A Yes, sir.
12 Q Correct me if I am wrong, but the financial state of
13 the bank can be can be affected directly or indirectly in
14 how the assets of the bank are managed?
15 MR. WHITE: Objection.
16 THE COURT: Sustained.
17 Q You didn't tell anybody at Core State Bank you are a
18 convicted felon?
19 A Yes, sir, correct.
20 Q You did not tell anybody?
21 A Your statement is correct.
22 Q Can you say that, I did not tell them?
23 A I did not tell them, as previously testified, sir. 24 Q Now, who did you speak with at the bank to get the
25 consultant job?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5173 Watstein-cross/Neville
1 A Greg Pass.
2 MR. WHITE: Objection.
3 Q Mr. X, maybe Mr. Grimaldi?
4 MR. WHITE: Objection.
5 THE COURT: Sustained.
6 Q Do you think that Mr. X, knowing about your fraud
7 conviction, that that would have made him pause before
8 acting and hiring your company to do consulting work in
9 the assets based division of Core State Bank?
10 MR. WHITE: Objection.
11 THE COURT: Sustained.
12 MR. NEVILLE: Much to your dismay, your Honor, I
13 am not finished.
14 I will be now referring to
15 Government's Exhibit 1308-A.
16 Q Mr. Grimaldi -- I mean Watstein.
17 I am handing you what is marked as 1308-A.
18 The jurors all have it?
19 THE JURORS: Yes.
20 THE COURT: Please don't address the jurors,
21 Mr. Neville. At any time, don't do that.
22 MR. NEVILLE: I am sorry, your Honor. I
23 apologize. 24 Q Now, you see that exhibit? 25 A Yes, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5174 Watstein-cross/Neville
1 Q And that was a conversation between you, a/k/a, Ed
2 Grimaldi, right, and Scott Michaelson?
3 A Yes, sir.
4 Q And that conversation took place on the 27th of
5 October of 1994?
6 A Yes, sir.
7 Q And so, you stated earlier, you testified earlier,
8 that you heard about the Reed Elsevir, Marquis Who's Who
9 trademark infringement lawsuit against Mr. Gordon's
10 company in the Spring of 1994?
11 A That was my guess, yes, sir.
12 Q So, this telephone conversation takes place after you
13 found out about that lawsuit; is that right?
14 A To the best of my knowledge, yes, sir.
1
5 Q Without looking at the transcript, Mr. Watstein, do
16 you have an independent recollection of the phone call,
17 where you pose as Edward Grimaldi, the owner of a beauty
18 salon?
19 A I made 61 calls, I can't do it without looking at the
20 transcript.
21 Q I will let you look at it. I am asking if you
22 remember this one?
23 A In a general sense, yes. 24 Q You remember the name Scott Michaelson? 25 A Yes, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5175 Watstein-cross/Neville
1 Q Okay.
2 Now, look at the transcript, if you will, and
3 let's go through it.
4 A Certainly.
5 Q Now, you call yourself to Who's Who here; is that
6 right?
7 A Yes, sir.
8 Q When you called, you had not really received any card
9 in the mail from them; is that right?
10 A That is correct, sir.
11 Q And when you called, your name was Steve Watstein, it
12 wasn't Ed Grimaldi, right?
13 A Yes, sir.
14 Q And just about halfway down that first page you start
15 to speak with Scott Michaelson; is that right?
16 A Yes, sir.
17 Q And one of the first things you ask Scott Michaelson
18 toward the bottom of the first page is to see if your name
19 is in on the computer; is that right?
20 A What line are you in, sir?
21 Q Toward the bottom, the second to last attribution to
22 E.G.
23 A Yes, sir. 24 Q You asked Scott if you were on the computer, right? 25 A Yes, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5176 Watstein-cross/Neville
1 Q You knew you wouldn't be on the computer, right?
2 A I would assume so.
3 Q Does that mean yes or does it mean no?
4 A It means I would assume so, sir.
5 Q Now, what you were doing there, weren't you, you were
6 trying to get Scott Michaelson to say, oh, yes, you are
7 right here on my computer, I have you right here? You
8 were trying to get Scott to say that?
9 A No, sir.
10 Q He didn't say that, did he?
11 A No, sir.
12 Q He didn't say that?
13 A Yes, sir, he didn't say that, sir.
14 Q You don't have to call me, sir.
15 A Okay.
16 Q At the bottom of the first page, Scott Michaelson
17 goes into quite an explanation as to why your name is not
18 on the computer; doesn't he?
19 A Yes, sir.
20 Q Scott says, yeah, because once you send back your
21 form, and if they don't conduct the interview to qualify
22 you, they wouldn't have your -- have you, excuse me, on
23 the database. Somehow, maybe they didn't receive your 24 card, or for some reason, I have no idea. 25 Is that what Scot
t Michaelson said to you?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5177 Watstein-cross/Neville
1 A Yes, sir.
2 Q And Scott Michaelson assumed, it appears, that you
3 had sent in some card, didn't he?
4 A I can't assume that he assumed anything.
5 Q Could you make an inductive leap and say that based
6 on Scott's words, he was believing you sent in a card?
7 MR. WHITE: Objection.
8 THE COURT: Sustained.
9 Q The top of the next page, the first attribution to
10 Scott there, he says, I don't know if we lost the card or
11 I have no idea.
12 He doesn't know what happened to the card, does
13 he?
14 A It appears to be the case.
15 Q And Scott was accurately stating to you that your
16 name was not in the computer?
17 A That is correct. That phrase is accurate.
18 Q Let's go down to the next part where Scot
t speaks,
19 where you explain you have to send back the form, where he
20 says, no, because you still have to send back the form.
21 There are a lot of people for, whatever reason, don't feel
22 they want to be in here, or they're retired.
23 Do you see that? 24 A Yes. 25 Q That's what Scott Michaelson told you, isn't it?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5178 Watstein-cross/Neville
1 A Yes, sir.
2 Q And Scott Michaelson then talks about 6,000 requests
3 each month, yes?
4 A Which line?
5 Q The next one down. Follow down. Believe me I will
6 do it in the simplest fashion.
7 A Okay.
8 Q 6,000 requests each month, and 1,000 are accepted; is
9 that right?
10 A That's what Scott says, yes.
11 Q Okay.
12 Now Scott then in his next statement after that
13 one says that just because
your card is back doesn't mean
14 you are automatically in the database.
15 Do you see where Scott says that?
16 A Yes, sir.
17 Q And he is still explaining to you here, isn't he,
18 that you would have to send a card in, because even though
19 someone sends a card in, it doesn't mean they are
20 automatically in the database? Is that what he says?
21 A Yes.
22 Q And what he is saying if someone sends a card back,
23 they have to get on the telephone to see if they qualify 24 to get into the registry; is that correct? 25 A Uh-huh.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5179 Watstein-cross/Neville
1 Q Does that mean yes?
2 A Yes.
3 Q And then Scott explains to you in the next
4 attribution to Scott, you still -- so, we go over the
5 information. We get your profile and then we go over the
6 membersh
ip with you.
7 And you say right after that, Ed Grimaldi, but we
8 know it is Steve Watstein, don't we?
9 A Yes, sir.
10 Q Okay, well, well, I got some questions. Why, why
11 don't you ask me whatever you like first, and then, then
12 I, I'll answer a few questions. Fire away.
13 Did Marty Biegelman tell you to say that?
14 A No.
15 Q Did you have a plan at this time when you called up
16 and spoke to Scott Michaelson?
17 A Yes, sir.
18 Q Did you have a written list of statements that you
19 were going to make and questions you were going to ask
20 Scott?
21 A No.
22 Q Just off the top of your head?
23 A Yes. 24 Q Winging it? 25 A I can't answer that question with a yes or no, sir.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5180 Watstein-cross/Neville
1 Q You didn't have anything writt
en down or prepared?
2 A That is correct.
3 Q Just doing it on the fly?
4 A Can I answer -- I can't answer with a yes or no,
5 sir.
6 Q Toward the bottom of the paper, after you say you
7 have some questions, and then you encourage Scott
8 Michaelson to fire away, Scott says, no, no, no. You
9 speak to me. You tell me what questions you have, in
10 words or substance, he says that, right?
11 A Uh-huh, yes.
12 Q Now, at the bottom, the last attribution to you at
13 the bottom of the page, you say, sure, sure. I'm a little
14 bit unconfident, unconfident, did you you say that word?
15 A Yes.
16 Q Unconfident, is that a word?
17 A A word I used in this mode, sir.
18 Q Because you were trying to come off as a dummy,
19 right?
20 A I can't respond yes or no to that question.
21 Q You know "unconfident" isn't an English word?
22
A Yes, correct, I know that.
23 Q You know it is not? 24 A Yes. 25 Q You were trying to come off as a dumb salon owner,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5181 Watstein-cross/Neville
1 weren't you?
2 A No, sir.
3 Q You were in role, weren't you?
4 A That is correct, yes, sir.
5 Q So, you were unconfident, because, you know, umm, one
6 thing back and followed up, and nothing happened, but,
7 umm, in terms of, umm, of your group, Scott. Can you help
8 me understand, what, what do you do exactly? Are you a
9 membership group or --
10 Now, Scott tells it how it is, doesn't he? He
11 explains what that company is all about, doesn't he?
12 A You have to read the sentence to see if he tells it
13 like it is, sir.
14 Q He tells about the number of members?
15 A Yes, he makes that statement.
16
Q He talks about how it is a Worldwide Registry, but at
17 that time it was mostly domestic. He says that, sir?
18 A You are skipping over what it says, sir.
19 Q Though it is still mostly domestic, am I reading it
20 right?
21 A Yes.
22 Q He is not trying to make you think that only the Shah
23 of Iran, or anybody else from South America are in this 24 registry, he makes you think it is mostly a domestic 25 publication?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5182 Watstein-cross/Neville
1 A Yes, sir.
2 Q You were in role when made this call?
3 A Yes, sir.
4 Q And Scott Michaelson was doing his job, wasn't he?
5 A It is an accurate statement.
6 Q At the bottom of the page, Scott talks about how each
7 member has a right to nominate up to two, three people in
8 the registry each year, do you know that?
9 A Have we skipped a prior phrase, sir?
10 Q I am asking you the questions, okay?
11 A I thought you were continuing. I am sorry.
12 Q It is all right.
13 A Thank you.
14 Q Let's go to the next page.
15 The first attribution to Scott on page 3, I
16 believe it is. He says, oh, I have -- at my level, I
17 wouldn't know specifically, because we also get people
18 from various trade magazines. If there is a nice article
19 about yourself we might go after you as well. But you
20 would have to be submitted or referred.
21 Do you see where Scott Michaelson says that?
22 A Yes.
23 Q Do you see where Scott says, oh, I have at my level, 24 I wouldn't know specifically? 25 A I see that portion.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5183 Watstein-cross/Neville
1 Q Am I reading it correctly?
2 A Certainly
are.
3 Q If I am reading it correctly, it means that what
4 Scott said?
5 A Yes, sir.
6 Q And that's what Scott said to you?
7 A That's correct.
8 Q You say in the next line, in other words, I am not on
9 some kind of mailing list somewhere or something?
10 Scott, says, umm, not that I know of, no.
11 Because I -- we have to reject more people than we
12 actually accept.
13 That's what Scott said to you?
14 A That's right.
15 Q The mailing list question -- withdrawn.
16 Did you agree when you were testifying at this
17 trial that you understand now, or you are under the
18 impression now that Marquis Who's Who uses mailing lists?
19 A Yes.
20 Q I just wanted to make sure that I heard that.
21 Then as Mr. Geduldig pointed out to you, your
22 next attribution is you say I gotcha, I gotcha; is that
23 what you said?
2
4 A Only said once. 25 Q I see it twice, I got you, I got you.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5184 Watstein-cross/Neville
1 A Got, not gotcha.
2 Q I got you, I got you?
3 A That's right.
4 Q Is that in there twice?
5 A Yes, sir, as phrased that way, yes, sir.
6 Q Scott goes on to talk about how you could
7 cross-reference the members, you could cross-reference via
8 the registry, or Scott says in the middle of the page, we
9 have it on a CD-ROM format for an IBM.
10 You say, I see.
11 Do you see where it says that?
12 A Yes.
13 Q And Scott goes to the rest of the presentation, we
14 provide services for our members. We list you in the
15 registry for the duration of your membership.
16 That means, if you are a three year member, you
17 are in there for three years, right? Isn't that what a
18 reasonable person would deduce from that statement by
19 Scott Michaelson?
20 A Yes, sir.
21 Q If you are a lifetime member you would be in there
22 for the rest of your life?
23 A Yes, sir. 24 Q And if it is in your case, you will live to be a 25 hundred?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5185 Watstein-cross/Neville
1 A I will try, sir.
2 Q Scott says, we provide you with a beautiful custom
3 engraved wall plaque, we send you the artwork, we send you
4 artwork of our seal, if you want to place it on your
5 business cards, uh-huh.
6 Do you see that?
7 A Yes.
8 Q And so, he is telling -- he is giving the
9 presentation, right?
10 A Yes.
11 THE COURT: Is this a good time to take a break,
12 Mr. Neville?
13 MR. NEVILLE: Sure.
14 THE COURT: Members of the jury,
we will take a
15 15 minute recess. Please do not discuss the case. Keep
16 an open mind. Please recess yourselves.
17 (Whereupon, at this time the jury leaves the
18 courtroom.)
19 THE COURT: You can step down, Mr. Watstein.
20 Where are the students? Come on up.
21
22 (Whereupon, a recess is taken.)
23 24 25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5186 Watstein-cross/Neville
1 THE CLERK: Jury entering.
2 THE COURT: Please be seated.
3 You may proceed, Mr. Neville.
4 MR. NEVILLE: Thank you.
5 Q Before we broke for the break, we were I believe, on
6 page four of the transcript, Mr. Watstein.
7 I was pointing out the attribution to Scott, a
8 little more than half way down the paper, where he is
9 explaining the different benefits; do you see that?
10 A Yes, sir.
1
1 Q And then Scott says in the next attribution to him,
12 then you can nominate two people a year into the
13 registry. It's all public relations, marketing,
14 cross-referencing the net members. It's independent
15 recognition.
16 Do you see that?
17 A Yes.
18 Q And then Scott says, after you say, I see, I see,
19 Scott says, and, we do have the best target audience,
20 probably in the entire world. We have Fortune Ten
21 executives in here, and we also have small business
22 consultants.
23 Do you see that? 24 A Yes. 25 Q And then Scott says, it's all according to their
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5187 Watstein-cross/Neville
1 distribution, the services, and of course, you know, their
2 years of experience in their industry.
3 And then you say, I see, so you would say it's
4 somewhat p
restigious?
5 Scott says, I had -- I would say it's very
6 prestigious, our quarterly magazine and newsletter that we
7 put out, it's called Tribute. Keeps you up-to-date, a lot
8 of our new benefits, but we also profile a lot of our top
9 executives, and that you might be familiar with.
10 Do you see that?
11 A Yes.
12 Q Salesmanship?
13 A I can't answer yes or no.
14 Q There is an interruption in the tape where someone
15 cuts into the conversation and says Larry Gatlin is
16 holding for you.
17 A Yes.
18 Q Do you see that?
19 A Yes.
20 Q Where were you when you made the phone call?
21 A 1000 West McNab Road, Pompano Beach, Florida.
22 Q In an office?
23 A Yes. 24 Q In your office? 25 A In a conference room.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5188 Watstein-cross/Neville
1 Q And then Scott goes on to say, so, we usually do up
2 to about ten people that we profile in our magazine. So,
3 yes, you are in some very good company. People that you
4 would read about and see in the newspapers. But, there is
5 also people that you wouldn't know. But it's a mixed
6 bag. But they are all members.
7 You see that?
8 A Yes.
9 Q Pretty straight statement?
10 A Yes.
11 Q Is it a question? Is it a pretty straight statement?
12 A I can't answer that with a yes or no. Sorry, sir.
13 Q Now, the conversation begins to get interesting at
14 this point, because you begin to talk about the beauty
15 salon. You see that?
16 A Yes.
17 Q And do you see where you drop that in there where you
18 say a little bit more down the page, or a third down the
19 page, where someone says, someone is calling me here in
20 the beauty
parlor, could you hold just one second? Do you
21 see that?
22 A Yes.
23 Q And you weren't in the beauty parlor? 24 A No. 25 Q The reason you are saying that is because you were
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5189 Watstein-cross/Neville
1 going to talk about how you are the owner of Ed's Beauty
2 Salon, and using words like unconfident, and things like
3 that, to try to trick Scott Michaelson into selling you a
4 membership that you really didn't deserve, right?
5 A No, sir.
6 Q Now, further down the page, about two-thirds of the
7 way down, in answering your question, where you say one
8 out of six people are accepted, and Scott says, no, we
9 have 6,000 requests each month for inclusion, and we only
10 accept about 1,000 new members, and you affirm that that
11 is one out of six, and Scott says, yes; do you
see that?
12 A Yes.
13 Q Now you start talking money, cost, toward the bottom
14 of the page?
15 A Yes.
16 Q Okay, Scott, what is all this going to cost?
17 And Scott says, okay, there are two memberships,
18 we have a lifetime membership and five year membership,
19 the five year membership, there is a one time charge of
20 $350. It includes your privileges, your services and your
21 custom wall plaque.
22 Then Scott says, doesn't he, your only options
23 are the registry, which is released every January, and our 24 CD-ROM disks, which is available now; do you see where 25 Scott says that?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5190 Watstein-cross/Neville
1 A Yes.
2 Q That's an option that you have; is that right?
3 A Yes, sir.
4 Q Yes, that means you pay extra for options?
5 A Yes.
6 Q When you buy a car and try to get an FM radio,
7 instead of AM, that's an option, right?
8 A Yes.
9 Q And you pay more money for it, don't you?
10 A Yes.
11 Q Then Scott talks at the bottom of the page, the
12 lifetime membership?
13 A Yes.
14 Q Talks about the one time charge of $750, right?
15 A Yes.
16 Q Talks about the CD-ROM and the wall plaques, yes?
17 A Yes.
18 Q Then you ask at the top of that next paper, and I
19 believe it is page 6, and how much was the -- I lost the
20 price on the first one, I am sorry.
21 Scott, the five year -- Scott says, the five year
22 is $350.
23 Then Scott says, and the lifetime is 750. 24 Do you see that? 25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5191 Watstein-cross/Neville
1 Q Now, Scott after that says to you, does he not, ab
out
2 between a quarter and a third of the way down the page,
3 the third attribution to Scott on this page, and after
4 your first year, your annual dues are only $49 per year.
5 That will maintain your benefits, it will include our
6 quarterly magazine, the Tribute, which I mentioned
7 before. If you have use for the CD-ROM, you feel that you
8 can benefit -- I assume he meant from it -- and you have
9 the hardware, then we suggest the lifetime duration. If
10 you really don't, then I would start with the five year
11 membership.
12 He is trying to sell you the most expensive
13 thing, isn't he? Isn't he?
14 A He is attempting to sell me something, yes, sir.
15 Q He is not trying to sell you the most expensive
16 thing, is he, Mr. Grimaldi -- Mr. Watstein?
17 A Would you repeat the question.
18 Q Scott Michaelson is giving you the option to buy
19
something cheaper, isn't he?
20 A That is correct.
21 Q Okay.
22 And then Scott says, doesn't he, almost halfway
23 down the page, cause it's less expensive, and you can 24 always upgrade. 25 Do you see that?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5192 Watstein-cross/Neville
1 A Yes, sir.
2 Q After that Scott says, if you want, in two years to
3 go to a lifetime membership, we would credit what you
4 paid. We would charge the difference.
5 It seems pretty fair, doesn't it?
6 A I can't comment with a yes or no, sir.
7 Q Does it seem unfair to you?
8 A I can't comment with a yes or no.
9 Q Now, we get to the meat of the conversation where you
10 are starting to ask Scott about whether or not you
11 qualify, right? Do you see that?
12 A Yes, sir.
13 Q And this is especially important because n
ot every
14 Joe should be able to get into this registry, right?
15 A I think it is an accurate statement.
16 Q Like somebody from Ed's Beauty Salon, right?
17 A Yes, sir.
18 Q Somebody uses the word "unconfident", right?
19 A Yes, sir.
20 Q Okay.
21 You say, I see, Scott, now, umm, let me see
22 whether I'm going to qualify or not. Why don't, ask me a
23 couple of questions. 24 Scott says, okay. 25 And then Scott asks your name, and you say
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5193 Watstein-cross/Neville
1 Edward, middle initial X, and the name of your company.
2 Do you see that toward the bottom of the page?
3 A Yes, sir.
4 Q And then you say, Ed's Salon?
5 A Yes.
6 Q Do you see that?
7 A Yes.
8 Q And the test, Larry Gatlin comes to the conversation
9 again?
1
0 A Yes.
11 Q Do you see that?
12 A Yes.
13 Q Ed's, title?
14 My title is owner.
15 Telephone numbers.
16 Then a third way down the page, Scott says, okay,
17 what does the company do, Mr. Grimaldi? Do you see that?
18 A Yes.
19 Q And do you see where Scott asks you that?
20 A Yes.
21 Q And you say, we are a beauty parlor; do you see that?
22 A Yes.
23 Q And then, let's look closely at what Scott says 24 next. 25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5194 Watstein-cross/Neville
1 Q Scott says, okay, beauty parlor, they really -- I
2 don't think they would put that into the registry.
3 The only thing they would offer, they would give
4 you like a two year duration there, because a beauty
5 parlor can't really benefit from the networking in the
6 registry.
7
And then what do you say after that after that,
8 Ed -- Steve?
9 Sure we could. That's one of those gotchas,
10 because you are not really Ed from the beauty salon, you
11 are Steven Watstein trying to get Scott Michaelson to go
12 to jail, right?
13 MR. WHITE: Objection.
14 THE COURT: Sustained.
15 Q And you say, Mr. Watstein, the middle of the page,
16 sure we could. Did you say that?
17 A Yes, sir.
18 Q And you are trying to give the impression that you
19 are the owner of a modest, humble, beauty salon that
20 shouldn't be in a registry like this, right?
21 A No, sir.
22 Q A guy who uses words like "unconfident," right?
23 A No, sir. 24 Q You don't have to call me, sir. 25 A I will try not to.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5195 Watstein-cross/Neville
1 Q You say, don't you.
2 Do you ever hear of a female executive?
3 Scott laughs. I am sorry?
4 You say, did you ever hear of a female
5 executive?
6 Then Scott says in his role as salesperson, oh,
7 no, and we have plenty of female executives, but what we
8 need is the people that are registering more or less, have
9 worldwide networking, or have a U.S. networking. You're
10 really a salon which is, I mean, I applaud you, I mean,
11 you're job is wonderful. But it's something that is
12 really not going to benefit from the entire registry as
13 far as members contacting you for products and things like
14 that in different areas.
15 Is that what Scott said to you?
16 A Yes, sir.
17 Q Then look at what Scott says after that. Why don't
18 you read what Scott says after that, Mr. Watstein.
19 A May I read the entire portion and not be stopped?
20 Q No.
21 A I
see.
22 Q Read what I ask you to read, please?
23 A Certainly, I can understand. 24 Q What does Scott say? 25 A We, we wouldn't take your money for it.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5196 Watstein-cross/Neville
1 Q We wouldn't take your money for it.
2 Blew your doors right off, didn't he?
3 A No. Read the balance of it.
4 Q Okay, so does that mean they would reject us or --
5 no, they wouldn't reject it.
6 Does that -- did Scott Michaelson say ain't small
7 businesses? Did he say that?
8 A He may have. I don't recall.
9 Q You are still at it, not you?
10 A No, sir.
11 Q Scott says at the bottom of the page, I will read
12 it.
13 A Good.
14 Q They wouldn't reject it. What you have is an
15 option. They have like a two year duration, in which they
16 would list your industry
. They would list your -- some of
17 your social information and your company, they would list
18 there. But it would only be for two years. They would
19 put in you a different section of the registry.
20 You teach people at Core State Bank to do
21 salesmanship on the phone, right?
22 A Right.
23 Q Salespeople try to make sales, right? 24 A Not at all times, sir. 25 Q Anything illegal about that, sir?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5197 Watstein-cross/Neville
1 A No, sir, not that I am aware of.
2 Q Would you agree with me that Scott did damn well with
3 you on the phone trying to nail him? He did pretty well,
4 didn't he?
5 MR. WHITE: Objection.
6 THE COURT: Sustained.
7 Q You expect a salesperson to turn down a sale?
8 A Yes, sir, if it is inappropriate.
9 Q You are going to tell me what
is inappropriate?
10 MR. WHITE: Objection.
11 THE COURT: Sustained.
12 Please don't argue with the witness,
13 Mr. Neville.
14 MR. NEVILLE: Excuse me.
15 Q All kidding aside, sir, what Scott Michaelson did was
16 reject what you were trying to do?
17 A No, sir. He reduced the unit of sale. That's what
18 he did.
19 Q Scott then -- this is on the next page, second
20 attribution down, I believe it is page 8 -- first
21 attribution to Scott.
22 Scott says, you would still be a member --
23 A I don't follow you. 24 Q I am on what I believe is page 8. At the top, the 25 first attribution to Scott.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5198 Watstein-cross/Neville
1 A Okay.
2 Q Scott Michaelson, remember him?
3 A Yes, sir.
4 Q Scott says, you'll still be a member, but you'll be
5 what they call an affiliate member, you are an associate
6 member.
7 Do you see that?
8 A Yes, sir.
9 Q And then Scott says, after you say uh-huh, Scott's,
10 you would be in a different section of the registry. You
11 would have the same wall plaque. You would have the same
12 option -- sow see that word, "option"?
13 A Yes, sir.
14 Q What does it mean, pay more money for it?
15 A He would sell me more things; is that right.
16 Q And you would have the same option of receiving the
17 registry, it will just be in a different area.
18 Mr. Watstein, what did you expect Scott
19 Michaelson to do as a salesperson, say, you know, Ed, you
20 are a loser? You shouldn't be in our registry, and hang
21 up on you? Is that what he should have done, and then he
22 wouldn't go to jail if he did that?
23 A I can't respond yes or no, sir, unless you like an
24 open-ended answer. 25 Q The middle of that page Scott goes on to talk about
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5199 Watstein-cross/Neville
1 the plaque, what it would say. Do you see that?
2 A Uh-huh, yes.
3 Q And you say in the middle of that page, umm,
4 unintelligible, that's not bad, and that would be 350 for
5 that?
6 No, Scott says, right after that, no, that was
7 for your five year. The two year duration for the
8 affiliate would be $97 now, and then the option to receive
9 the registry -- and then the option to receive the
10 registry in December.
11 There is that darn word "option" again. Do you
12 see that?
13 A Yes.
14 Q You were trying to get Scott to say, yes, that's 350
15 bucks, weren't you?
16 A Absolutely not.
17 Q Absolutely not.
18 The bottom of that paper,
Scott talks about some
19 of the members in the registry, right, in the
20 organization, after you ask him who is in the registry?
21 Do you see that, sir?
22 A Yes. You don't have to call me, sir.
23 Q Okay, I won't. 24 That was one of your little questions you asked 25 people, about who is in the registry, right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5200 Watstein-cross/Neville
1 A I don't understand your question, sir.
2 Q Do you remember when Mr. Geduldig was asking you
3 questions, and he was going down a list of things that you
4 targeted, that you mentioned in these calls where you were
5 trying to entrap these people?
6 MR. WHITE: Objection.
7 I am sorry, I was drinking a glass of water.
8 THE COURT: Sustained.
9 Q Remember the list of topics that you were covering in
10 these calls?
11 A Y
es.
12 Q That Mr. Geduldig was talking to you about?
13 A Yes.
14 Q Do you remember Mr. Geduldig?
15 A Yes.
16 Q Now, one of those items that you were -- one of the
17 items that you were going over in your different calls was
18 the kind of people in the registry, the kind of people who
19 had a membership; is that right?
20 A I don't believe it was exactly phrased as
21 Mr. Geduldig's list.
22 Q I could never phrase it as eloquently as he did. But
23 do you catch my drift? Do you follow me? 24 A I think so, in a sense, yes. 25 Q So, what you were trying to do when you were making
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5201 Watstein-cross/Neville
1 this call, is you were going down the list of topics that
2 you cover on these calls to see what the people would say,
3 right?
4 A As phrased that way
it is an accurate statement, yes.
5 Q Does that mean yes?
6 A It means yes, as phrased that way.
7 Q Now, Scott says at the bottom of the page, it would
8 be kind of tacky to member people, but he mentioned
9 someone from Sumner Redstone, do you know who that is?
10 A I know the name.
11 Q Who is that?
12 A A chairman of a major company.
13 Q Scott mentions Sumner Redstone, and he mentions it
14 because it is in Tribute, right, because it is public
15 knowledge?
16 A That's what he says.
17 Q Well, do you remember the case we are here on?
18 A I am very familiar with the case we are here on.
19 Q Do you have any idea why this conversation is part of
20 the case?
21 A Rephrase the question, sir.
22 Q No.
23 Do you have any idea why this conversation is 24 part of the case? 25 A This conversation with Scott and myself.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5202 Watstein-cross/Neville
1 Q Or Ed, whoever it was.
2 A Or your conversation with me.
3 Q The phone conversation, the tape.
4 A Yes, I have an understanding in my judgment, yes.
5 Q And you were a confidential informant, right?
6 A That's corrrect.
7 Q And you were working for Marty Biegelman; is that
8 correct?
9 A That is correct.
10 Q And he had you on a leash, right?
11 A Incorrect.
12 MR. WHITE: Objection.
13 Q So to speak?
14 A No.
15 THE COURT: Sustained, sustained.
16 Q You were under his tutelage? How is that for a
17 word?
18 MR. WHITE: Objection.
19 THE COURT: Sustained.
20 Q And the words that are uttered in these conversations
21 are very important, aren't they?
22 A An accurate statement, sir.
23 Q Does th
at mean yes? 24 A Yes. 25 Q And in fact, the way these questions are answered
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5203 Watstein-cross/Neville
1 could directly affect the outcome of this trial vis a vis
2 Scott Michaelson or anybody else in the room, right?
3 MR. WHITE: Objection.
4 THE COURT: Sustained.
5 Q Well, Mr. Watstein, you were asking these questions
6 for a reason, right?
7 A I can't answer with a yes or no.
8 Q Okay.
9 Now, let's look down a little further on the same
10 page, where Scott in his aggressive -- it is a quarter to
11 4:00. If you need to know the time, ask me?
12 A It is okay. Thank you.
13 Q Another instance where Scott was aggressively trying
14 to sell you more than you really wanted, and let's look at
15 it altogether.
16 Scott says in the middle of the page, with all
17 the other benefits, and then Scott says in his most
18 devious moment, I think as a salon, you really wouldn't
19 have use for it, because you really don't -- because you
20 don't really do any type of corporate networking. How
21 about that?
22 MR. WHITE: Objection.
23 THE COURT: Sustained. 24 Q Did you see that? 25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5204 Watstein-cross/Neville
1 Q Mr. Watstein, did you see that?
2 A I answered, yes, sir.
3 Q And you heard Scott say that because you were the one
4 on the phone with him, right?
5 A Yes.
6 Q And so, you didn't get a gotcha on that one, did
7 you?
8 MR. WHITE: Objection.
9 THE COURT: Sustained.
10 Q And then Scott says -- withdrawn.
11 Then you say, so, from the benefit stand by, are
12 there any benefits that
you can take of, with membership.
13 Scott says, well, that's basically it. I mean
14 the right to use our name on biographies and things like
15 that, and the wall plaque, and so, just to be affiliated
16 would be enough.
17 Does he say on there that the CD-ROM is thrown in
18 for good measure?
19 A I don't see that, no.
20 Q Does he say on there that you will get a Lear Jet?
21 A No.
22 Q A trip to the moon?
23 A No. 24 Q He tells you you could put the fact that you were in 25 Who's Who on a business card?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5205 Watstein-cross/Neville
1 A Amongst other things, yes.
2 Q And let's go to the next page.
3 The top of the page, the second attribution to
4 Scott, he talks about how you would get camera ready
5 artwork for your seal, of our seal.
6 Do you see
that?
7 A Yes.
8 Q And you ask him about sending the check or a bill,
9 because the fact that Scott Michaelson and the other
10 salespeople were instructed to make only credit card sales
11 makes them guilty, right?
12 MR. WHITE: Objection.
13 THE COURT: Sustained.
14 Q So you go and do that song and dance with the check
15 and credit cards, whatever that was for and --
16 MR. WHITE: Objection.
17 THE COURT: Sustained.
18 Q You don't have the credit card on you, you say. That
19 was a lie, right? That was a figment of your imagination,
20 right?
21 A It is part of the investigation by the U.S. post
22 office, sir.
23 Q Did Marty Biegelman give you one of those Sherlock 24 Holmes hats and one of those magnifying glasses for your 25 investigation?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5206 Watst
ein-cross/Neville
1 MR. WHITE: Objection.
2 THE COURT: Mr. Neville, do you have any
3 questions to ask to adduce relevant evidence?
4 MR. NEVILLE: Yes.
5 THE COURT: Proceed.
6 Objection sustained.
7 Q You didn't have any -- the rest of that conversation
8 was just about how you were going to call Scott back with
9 your credit card number and Scott gave you those
10 incriminatory statements, right?
11 MR. WHITE: Objection.
12 THE COURT: Sustained.
13 Q Now, let's look at the last question you asked,
14 Mr. Watstein, sir, to Scott, the bottom of that second to
15 last page.
16 Another one of your buzz words topics, how long
17 your company has been in business? Number three, one of
18 those topics, buzz words, yes?
19 A Is that on the list you are referring to, sir?
20 Q Number three, actually?
21 A It is on your list, y
es.
22 Q And you say at the bottom there, don't you, umm, I,
23 I, you guys, you guys, umm, been in business for a long 24 time? Do you see that? 25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5207 Watstein-cross/Neville
1 Q Why did you ask that question, sir?
2 A I wanted to determine if I would be receiving an
3 accurate answer or non-accurate answer. Part of my
4 evaluation --
5 Q Thank you.
6 A I am not finished.
7 Q I don't care if you are not finished. You answered
8 the question.
9 MR. WHITE: Objection.
10 THE COURT: Stop and answer the question.
11 A Mr. Rapaport, read back the question, please.
12 THE COURT: Don't talk to Mr. Rapaport, no one
13 talks to him except me.
14 THE WITNESS: I am sorry, would you read back the
15 answer, please.
16 THE COURT: Read it back, plea
se, Mr. Rapaport.
17 (Whereupon, the court reporter reads the
18 requested material.)
19 THE COURT: The question is why did you ask that
20 question. What is your answer?
21 THE WITNESS: I wanted to determine if I was
22 receiving an accurate answer or not. If the answer was
23 accurate I would have that information. If not I 24 wouldn't. Those were the instructions given to me by 25 Inspector Biegelman, just to get accurate information.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5208 Watstein-cross/Neville
1 Q What did Scott say to you? Could you read it,
2 please?
3 A Where are you now, sir? The last page?
4 Q Yes; the answer Scott gave you after you asked him
5 how long the company had been in business? What did Scott
6 say?
7 A We've been in business for five years.
8 Q Off with his head, right?
9 M
R. WHITE: Objection.
10 THE COURT: Sustained.
11 MR. NEVILLE: I have no further questions.
12 THE COURT: Anybody else?
13 MR. DUNN: Yes, your Honor.
14 THE COURT: You may proceed.
15 MR. DUNN: Thank you.
16
17 CROSS-EXAMINATION
18 BY MR. DUNN:
19 Q Good afternoon, Mr. Watstein.
20 A Good afternoon.
21 Q I am like the last defense lawyer over there.
22 A Thank god.
23 Q Sometimes it makes it hard because you may run out of 24 questions to ask. 25 Isn't it true that there have been times where
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5209 Watstein-cross/Dunn
1 you have given pep talks in a sense to real estate
2 salesmen? Is that correct?
3 A I believe that real estate salesmen attended my
4 seminars, but I don't believe I have done it with a
5 company itself, I may be mistake
n.
6 Q But you have had seminars since your arrest, where
7 you have given seminars on how to sell; is that correct?
8 A Yes, sir.
9 Q And you are still doing that today?
10 A Yes, sir.
11 Q And you were doing that while you were cooperating
12 with the U.S. Government; is that correct?
13 A Yes, sir.
14 Q Now, I represent a fellow who you may have spoken to
15 by the name of Steve Walden; does that ring a bell, that
16 name, to you?
17 A Yes, sir.
18 Q And do you recall that when you spoke to him, that
19 one of the job titles that you referred to was that you
20 were the director of consulting; is that correct? Does
21 that ring a bell?
22 A I would have to see a copy of the transcript to
23 refresh my memory, sir. 24 Q Okay. 25 Before I give you anything to refresh your
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COUR
T REPORTER 5210 Watstein-cross/Dunn
1 recollection, do you also recall at some time in a
2 conversation describing yourself as a national key account
3 manager?
4 A I think so, but I am not positive, sir.
5 MR. DUNN: If I may approach, your Honor?
6 THE COURT: Yes.
7 (Counsel approaches the witness stand.)
8 Q The first one I want to show you is marked as
9 Government's Exhibit 1333-A, and I direct your attention
10 to page 2 of that transcript, where --
11 A Thank you.
12 Q Looking at that does it refresh your recollection
13 that at one time you used the job description as director
14 of consulting?
15 A Yes, sir.
16 Q Is it fair to say that that is in a conversation
17 which has the exhibit with the name of Steve Walden on it?
18 A Yes.
19 Q And I would also like you to take a look at what has
20 been marked a
s what is in evidence as
21 Government's Exhibit 1330-A, and direct your attention
22 page 6 at the top, the first two lines. Does that refresh
23 your recollection about being a national account manager? 24 A The term is national key account. 25 Q Key account?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5211 Watstein-cross/Dunn
1 A Yes.
2 Q And is it fair to say in that transcript the name
3 Steve Walden appears?
4 A Yes.
5 Q And it is fair to say that's in a conversation you
6 had with Steve Walden; is that correct?
7 A Yes, sir.
8 Q Now, you also recall having a conversation with one
9 of the people who told you his name was Steve Walden, that
10 you stated at one time that I see where you got the
11 positive thinking from?
12 A I recall that phrase, yes.
13 Q And in fact, you stated after Mr. Walden
stated it to
14 you, I was crippled for three years, I was hit by a
15 drunken driver, and they told me I would never walk again,
16 and now I play racketball; do you remember that being
17 discussed?
18 A In a general sense, yes.
19 Q And after that you stated, I see where you get the
20 positive thinking from; is that correct?
21 A Yes, sir.
22 Q Yesterday Mr. Trabulus asked you a couple of
23 questions about the criminal complaint back where you were 24 arrested back in 1992; do you recall that, those 25 questions?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5212 Watstein-cross/Dunn
1 A No, I don't.
2 Q You remember reviewing a complaint in United States
3 of America against Steven Samuel Watstein; do you recall
4 that?
5 A Yes, sir.
6 Q And that's something you reviewed with your attorney;
7
is that correct?
8 A In a general sense, yes.
9 Q And, in fact, when you reviewed that document, I
10 think Mr. Trabulus mentioned it was 100 pages yesterday,
11 when you reviewed that 100 page document, isn't a fact
12 that you noted that there were a number of confidential
13 informants that had worked for your company that had given
14 information to the government?
15 A That's correct, sir.
16 Q In fact, there were 27 confidential informants; isn't
17 that correct?
18 A Yes, sir.
19 Q And you reviewed that and went over it with your
20 attorney; is that correct?
21 A Only in a general sense.
22 Q You read the document, is that correct?
23 A Not completely. 24 Q Well, sir, it is almost the equivalent of a book; is 25 that correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5213 Watstein-cross/Dunn
1 A It is a large document, yes, sir.
2 Q And you wrote eight books yourself; is that correct?
3 A Yes, sir.
4 Q And wouldn't you say this is probably the most
5 important book dealing with you that you ever had to deal
6 with?
7 A I can't answer that question with a yes or no.
8 Q Let me ask you this: Did you know that a person
9 identified as confidential ^ informant number one, also
10 referred to as CI's, do you remember the term CI?
11 A Yes, sir.
12 Q And that CI number 1 informed the government, and was
13 placed in your complaint that customer credit cards were
14 charged numerous times for the same order. Do you
15 remember that?
16 A The statement in the complaint?
17 Q Yes.
18 A I remember that statement, yes.
19 Q And that's something that happened in your company?
20 A I believe it happened five or ten times by one
21 salesperson, yes, sir.
22 Q And, sir, that was a -- it was an occasion that you
23 encouraged; is that correct? 24 A No, sir. 25 Q Isn't it a fact that this confidential informant,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5214 Watstein-cross/Dunn
1 who, by the way was in data processing and not a salesman;
2 do you recall that?
3 A I recall the entry in the complaint, yes, sir.
4 Q And the person it was a data processor. He was not a
5 salesman; is that correct?
6 A That's what is indicated, sir.
7 Q And this confidential informant said also that
8 duplicate checks were unwittingly remitted by a customer
9 in response to double billing, and that these checks were
10 cashed by the company; do you remember that?
11 A The statement or the incidents, sir?
12 Q The statement.
13 A Yes, sir.
14 Q Isn
't it a fact that there were occasions in the
15 company, your company, where customers would send in
16 checks for the same item, and you would go ahead and have
17 them cashed anyway; is that a fact?
18 A No.
19 Q And so, this confidential informant who was working
20 for the government at the time, was lying; is that
21 correct?
22 A I can't answer that with a yes or no, sir.
23 Q Now, there was a second confidential informant, a 24 data processing manager. And when you reviewed your 25 complaint with your attorney, were you aware of the fact
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5215 Watstein-cross/Dunn
1 that this confidential informant told the government that,
2 that sales would have slowed down to allow data entry to
3 catch up to the sales operation in order to put names
4 together in a form that made it possible to
print the
5 second edition of Who's Who in U.S. Executives, and that
6 you, Mr. Watstein, refused to slow down sales in response
7 to that request by the data processing people?
8 A Is that a question, sir? I am sorry.
9 Q That was true, correct?
10 A Totally correct, yes.
11 Q And there was also a confidential informant, wasn't
12 there, that was working with the government, that was in a
13 managing accounting position, in your company?
14 A I recall seeing it in the complaint, yes, sir.
15 Q And that was a confidential informant who told the
16 government in this complaint, that hundreds of customer
17 complaints were received per day, and that depending on
18 the persistence of a customer, a credit might be issued.
19 Do you remember seeing that?
20 A I have seen the statement, yes, sir.
21 Q And do you remember seeing that same confidential
22
informant said that for someone to issue a credit was,
23 quote, a death wish, by an employee, because of your 24 opposition to the practice; do you seeing that in the 25 complaint?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5216 Watstein-cross/Dunn
1 A I saw it in the complaint, yes, sir.
2 Q And do you remember a person named Debra Horowitz?
3 A Yes.
4 Q And that's a person who worked for your company?
5 A Yes, sir.
6 Q And you are aware that according to a confidential
7 informant, in the complaint it states that told Horowitz
8 to sit on the claims for refunds as much as possible? Are
9 you aware of that?
10 MR. WHITE: Objection.
11 THE COURT: What ground?
12 MR. WHITE: The whole procedure reading from a
13 document not in evidence.
14 MR. DUNN: If I may?
15 THE COURT: He is asking the witness wheth
er that
16 is true.
17 The document is not in evidence. The jury will
18 not see it. He is using it as a supply of questions for
19 him, which is all right. I will allow it. Overruled.
20 MR. DUNN: Thank you, your Honor.
21 Q I will repeat that.
22 A Thank you.
23 THE COURT: Members of the jury, you know a 24 complaint -- if you don't know, I am telling you -- a 25 complaint in a criminal case, like an indictment is an
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5217 Watstein-cross/Dunn
1 accusation. It has no evidentiary weight. You pay no
2 attention to it.
3 It is just an accusation.
4 Q Mr. Watstein, according to confidential informant
5 number 5 in the complaint, it states that Watstein told
6 Horowitz to sit on the claims for refunds as much as
7 possible.
8 Do you remember that?
9 A Do I
remember it in the complaint, sir?
10 Q Yes.
11 A Yes, sir.
12 Q And do you remember that that confidential informant
13 said that Horowitz told customers a credit had or would be
14 issued and then did not process the credit; do you
15 remember that?
16 A I remember the statement in the complaint, yes, sir.
17 Q It is something you authorized; is that right?
18 A No, sir.
19 Q Is it a fact you were the head guy in the company?
20 A Yes.
21 Q And Horowitz worked for you?
22 A Yes, sir.
23 Q And you told her to sit on these things? 24 A That's statement as made is inaccurate. 25 Q This confidential informant giving information to the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5218 Watstein-cross/Dunn
1 government was giving inaccurate information; is that
2 correct?
3 A Only partially, sir.
4 Q Do you recall in the complaint that this confidential
5 informant stated that Horowitz told customers requesting
6 credits that she would pull their file and get back to
7 them, which she routinely did not do?
8 A I recall it in the complaint, sir.
9 Q That's a fact, sir, correct?
10 A Totally accurate.
11 Q Horowitz would get the calls and tell people she
12 would pull the file and never did it?
13 A Totally accurate.
14 Q Based on your instruction, was it?
15 A No, sir.
16 Q Now, you recall also there was a confidential
17 informant working for you a clerk in your customer service
18 area?
19 A No, sir, I don't.
20 MR. DUNN: If I may approach?
21 (Counsel approaches the witness stand.)
22 Q Look at page 47 at the top, CI-11, and read the first
23 sentence or so and see if it refreshes your recollection. 24 (Whereupon, at
this time there was a pause in the 25 proceedings.)
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5219 Watstein-cross/Dunn
1 Q Does that refresh your recollection about the
2 customer service person?
3 A Not totally, but it is certainly in the complaint,
4 yes, sir.
5 Q And that's the complaint that you reviewed with your
6 attorney; is that correct?
7 A As I indicated, reviewed it in a general sense, yes.
8 Q This case when you were arrested was important to
9 you; is that correct?
10 A Yes, sir.
11 Q You paid a lot of money for attorneys?
12 A Yes, sir, and, therefore, I accepted their judgment,
13 yes.
14 Q And this 100 page book was important to you, correct?
15 A Yes, sir.
16 Q Isn't it true that this person in the customer
17 service area informed the government that numerous
18 complaints w
ere received alleging the failure to render --
19 meaning to give over, by your company, ordered
20 merchandise?
21 A That that person said that? Yes, sir.
22 Q Yes.
23 In fact, there was merchandise that was ordered 24 from your company that you never did produce; is that 25 correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5220 Watstein-cross/Dunn
1 A An accurate statement, sir, yes.
2 Q And that confidential informant also informed the
3 government there was a failure on your company's part to
4 make refunds as promised; is that correct?
5 A Partially correct, yes, sir.
6 Q That was something that you insisted on; is that
7 correct?
8 A I cannot answer with a yes or no, sir.
9 Q And that confidential informant also told the
10 government, isn't it true that you instructed him and
11 others to false
ly tell customers that their ordered
12 merchandise had already been sent to them; isn't that true
13 that that was in the complaint?
14 A It was in the complaint, yes, sir.
15 Q And it is true; correct?
16 A I don't have a recollection of that conversation,
17 sir, no.
18 Q And so, this is another confidential informant?
19 A It was partially inaccurate only.
20 Q That was partially inaccurate?
21 A Yes, sir.
22 Q And that confidential informant also told the
23 government that your company stated in reference to 24 refunds, that your check is in the mail; is that correct, 25 in reference to the complaint?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5221 Watstein-cross/Dunn
1 A The company stated that?
2 Q Some representative of the company?
3 A I am sure it is accurate, sir.
4 Q It is something you bas
ically told your people to
5 say; is that correct?
6 A No, sir.
7 Q Never told them to say the check is in the mail just
8 to get them off the phone?
9 A No, sir.
10 Q Another inaccuracy in the complaint; is that correct?
11 A Another partial inaccuracy, yes, sir.
12 Q Partial inaccuracy as contrasted with an inaccuracy;
13 is that right?
14 A As contrasted with a total inaccuracy, sir.
15 Q Something is either inaccurate or it is not; is that
16 correct?
17 A Not if it has sub components to it, sir.
18 Q That's like the sub-sets in math; is that right?
19 A I don't know, sir.
20 Q Isn't it a fact that that complaint, in that
21 complaint the confidential informant also said that you
22 said that customer complaints were not a priority. Is
23 that in the complaint? 24 A Yes, sir. 25 Q That's a fact, is it not?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5222 Watstein-cross/Dunn
1 A A partially accurate statement, sir.
2 Q I bet this confidential informant didn't get a walk
3 if he is so inaccurate?
4 A I don't understand the question, sir.
5 Q I will withdraw it.
6 A Thank you.
7 Q That confidential informant said to the government,
8 sets forth to the government, that customers paid by
9 credit card were falsely told that a refund would be
10 given, when in fact this was not possible due to the
11 cancellation of the customer's credit card accounts? Is
12 that in the complaint, sir?
13 A Yes, sir.
14 Q Is that partially inaccurate?
15 A Totally accurate, sir.
16 Q Totally accurate?
17 A Totally accurate, sir.
18 Q And your company had what would be known as merchant
19 accounts with banks; is that correct?
20 A Yes, sir.
21 Q And that's something where you get a merchant account
22 with a bank, so you as a company can take credit cards
23 from individuals; is that right? 24 A Yes, sir. 25 Q And there is a thing called charge backs, or pay
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5223 Watstein-cross/Dunn
1 backs?
2 A Yes.
3 Q And that's something where someone would have
4 something charged to their accounts and maybe changed
5 their mind, and say, I don't want that paid, and that
6 would be the equivalent of a charge back; is that correct?
7 A Not quite accurate, sir, but in a general sense it is
8 accurate.
9 Q And isn't it accurate that a bank handling a merchant
10 account would frown -- strike the question.
11 Isn't it fair to say in your dealings with banks
12 concerning merchant accounts that if there w
ere a lot of
13 charge backs, that the bank might decide that we can't
14 deal with this company any more; is that fair to say?
15 A Yes, sir.
16 Q And your merchant account was cancelled; is that
17 correct?
18 A Eventually, yes, sir.
19 Q Now, there was another confidential informant that
20 worked if the mail room, and was also a chauffeur for
21 you. Do you remember that?
22 A No, I don't.
23 Q Do you remember somebody in the mail room was also a 24 chauffeur? 25 A I don't have the recollection, but it is quite
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5224 Watstein-cross/Dunn
1 possible.
2 Q When you reviewed the complaint, do you remember that
3 one of the employees working in the mail room was also a
4 confidential informant?
5 A I don't have a recollection, no.
6 Q Let me show you this
on page 48 and see if it
7 refreshes your recollection, and I direct your attention
8 to the bottom of the page, where it says CI-12.
9 (Handed to the witness.)
10 Q If you read the two lines on that page and the couple
11 of lines on the following page.
12 (Whereupon, at this time there was a pause in the
13 proceedings.)
14 A Yes.
15 Q Does it refresh your recollection after reviewing
16 that --
17 A Yes.
18 Q It does?
19 A Yes, thank you.
20 Q Does it refresh your recollection that the person was
21 not only a mail employee, mail room employee, but also a
22 chauffeur for you?
23 A Yes. 24 Q By the way, when you were in this business, did you 25 have a tendency to use limousines?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5225 Watstein-cross/Dunn
1 A Yes, sir.
2 Q And when
was the last time you used a limousine?
3 A This morning.
4 Q What kind of limousine was it?
5 A A Lincoln limousine.
6 Q How big was it?
7 A I don't know, sir.
8 Q More than a regular sedan?
9 A Yes. That's normally the size of limousines.
10 Q That's the equivalent of a stretch limousine?
11 A Yes, sir.
12 Q And that's something you used to come to court today?
13 A Yes, I received it for nothing.
14 Q You received it for nothing?
15 A Yes.
16 Q It brings back memories of the good old days?
17 A Yes, sir, an accurate description.
18 Q Do you recall when you reviewed the complaint that
19 that confidential employee, the mail room employee who was
20 a chauffeur at times, stated he saw about 100 customer
21 complaint letters a day, up to 100?
22 A Is the phraseology up to 100?
23 Q Up to. 24 A Yes, sir.
2
5 Q Maybe 96, maybe 99, up to?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5226 Watstein-cross/Dunn
1 A Yes, sir.
2 Q Now, do you remember there is a confidential
3 informant 14, in a clerical position, and later in
4 customer service and in operations, and he told the
5 government, and it was put in the complaint, that he saw
6 many complaints relating to the failure to render. Do you
7 remember that?
8 A No. But I believe it is accurate.
9 Q The failure to render means failure to render
10 merchandise; is that correct?
11 A Yes, sir.
12 Q And also complaints about inferior products; is that
13 correct?
14 A Was there a number in front of that, sir?
15 Q Just inferior products?
16 A I am sure there were complaints about that.
17 Q And that's accurate, correct?
18 A I am not sure if it is accurate or not
, no.
19 Q And --
20 A It is accurate there were complaints, inferior or
21 not, I am not sure, sir, no.
22 Q By the way, Mr. Watstein, this limousine, that you
23 got out of today, did you get out of it on the courthouse 24 property? 25 A No.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5227 Watstein-cross/Dunn
1 I parked it farther not to offend anyone, sir.
2 Q You want us to have not seen that?
3 A It would cause a controversy perhaps and a diversion
4 in the trial.
5 Q And we wouldn't want any diversions, would we?
6 A I believe not, sir.
7 Q Now, your Who's Who had some kind of biographies in
8 it; is that correct?
9 A Yes, sir.
10 Q And is it fair to say that this confidential
11 informant number 14, told the government about wrong
12 biography being included in the directory; is that
13 correct?
14 A Yes, sir.
15 Q Is that happened?
16 A Yes, sir.
17 Q Now, did you have people actually saying that
18 pictures would be placed in the directory?
19 A Yes, sir.
20 Q And it is also stated that no pictures were placed in
21 the directory, that's what some of the complaints are
22 about?
23 A Yes, sir. 24 Q And also the confidential informant talks about 25 failure to refund; is that right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5228 Watstein-cross/Dunn
1 A I believe it is accurate, there was a failure to
2 refund.
3 Q There was a person named Cathy -- if I am
4 mispronouncing it, let me know, Shkinder, S H K I N D E R;
5 is that correct?
6 A Yes, sir.
7 Q And Linda Zeitzer, Z E I T Z E R?
8 A Yes, sir.
9 Q Is it is it fair to say they were in customer
10 service?
11 A Yes.
12 Q And isn't it true in this complaint this confidential
13 informant number 14 states that Shkinder and Zeitzer
14 stated a customer had to mail or fax his credit card
15 statement in order to be eligible for a refund? That's in
16 the complaint?
17 A Yes, sir.
18 Q And that happened?
19 A I believe they said that, yes, sir.
20 Q It is something you instructed them to do; is that
21 correct?
22 A No, sir.
23 Q Was that done to double-bill? 24 A No, sir. 25 Q Now, there was another confidential informant, number
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5229 Watstein-cross/Dunn
1 16, that is described as a secretary for you? You can
2 recall that the secretary said that you told the secretary
3 many times to tell the customers that the book had been
4 sent to th
em; you remember that being in the complaint?
5 A Yes, sir.
6 Q That's a fact?
7 A I am not sure if I did or not, but it is very
8 possible, sir.
9 Q And this secretary, it is put in the complaint, that
10 the customer service personnel routinely hung up on
11 disgruntled customers, that's in the complaint?
12 A Yes.
13 Q And it is accurate?
14 A Yes. I think it is accurate, yes.
15 Q And this Linda Zeitzer refused to talk to customers
16 on the telephone; is that correct?
17 A Yes, sir.
18 Q There was another confidential informant who
19 states -- it is referred to in the complaint that Shkinder
20 and Zeitzer hung up on customers and sometimes would not
21 accept customers' phone calls, would not return customers'
22 calls and threw away their messages. That's in the
23 complaint? 24 A Yes, sir. 25 Q It is accurate?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5230 Watstein-cross/Dunn
1 A Yes.
2 Q And they worked for you?
3 A Yes, sir.
4 Q The complaint also states from a confidential
5 informant 19, that at your direction he, the confidential
6 informant, threatened customers with loss of credit rating
7 if they did not pay their bill. That's in the complaint,
8 correct?
9 A Yes, sir.
10 Q And that is something you reviewed with your
11 attorney; is that correct?
12 A I don't believe so, no.
13 Q The statement is accurate, correct?
14 A No, the statement is not accurate, sir.
15 Q You never told that to this person?
16 A That is correct, I never told it to that person is
17 that correct.
18 Q Or anybody else?
19 A Not that's I can recall, sir.
20 Q So, this fellow is inaccurate?
21 A That's co
rrect.
22 Q There was another confidential informant, number 20,
23 who states that you sent out collection letters to people 24 who had not ordered merchandise. That's in the complaint, 25 correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5231 Watstein-cross/Dunn
1 A Yes, sir.
2 Q And that's inaccurate?
3 A I can't answer that with a yes or no, sir.
4 Q One of those partial inaccuracies?
5 A I can't answer with a yes or no. If you want to ask
6 a question I will be happy to respond to.
7 Q Mr. White will be up here in a few minutes, and he
8 can ask you those questions?
9 A Okay. Thank you, sir.
10 Q Confidential number 20, it is set forth in the
11 complaint, saw multiple invoices for the same customer.
12 That's in the complaint, correct?
13 A Yes, sir.
14 Q And that's accurate, correct?
1
5 A I am sure it happened a couple of times, yes, sir.
16 Q Just a couple of times?
17 A Yes, sir.
18 Q And these were multiple invoices for people who
19 already paid their bill; is that right?
20 A No.
21 Q And that would not be accurate if the confidential
22 informant said that he saw multiple invoices for the same
23 customer who had already paid, that would be inaccurate? 24 A To the best of the my knowledge, yes, sir. 25 Q This confidential informant apparently also told the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5232 Watstein-cross/Dunn
1 government, when this was mentioned to you, you replied
2 you didn't want to hear about it. Do you remember seeing
3 that in the complaint?
4 A No, I don't, sir, but I am sure it was in the
5 complaint.
6 Q And I guess it is totally inaccurate; is that
7 correct?
8 A I don't have a recollection of that at all, sir.
9 Q This confidential informant states that -- it is
10 stated in the complaint, that customers complain that they
11 received credit card refund slips, but no credit from the
12 merchant bank.
13 That's in the complaint; is that correct?
14 A Yes, sir.
15 Q And that is accurate; is it not?
16 A Yes, sir.
17 Q And so, your company was sending back refund slips to
18 customers; is that correct?
19 A That is correct.
20 Q And these customers apparently, it was the intention
21 to have them believe that they were getting credit; is
22 that right?
23 A I can't answer that with a yes or no, sir. 24 Q They weren't getting credit though -- they were 25 getting credit from the merchant bank; is that right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5233 Watstein-cro
ss/Dunn
1 A They should have, yes, sir.
2 Q But this person stated to the government that that
3 didn't happen?
4 A I can't respond to your question with a yes or no.
5 Q This must be one of those other totally inaccurate
6 statements by a confidential informant; is that correct?
7 A No, sir, it is partially accurate.
8 Q But the part that is totally accurate though, is the
9 one where you intended to mislead the customers?
10 A I don't understand the question. Can you rephrase
11 it?
12 Q You don't understand the question?
13 A No. Rephrase it.
14 Q See if you can refresh my recollection.
15 You went to the University of Pennsylvania?
16 A Yes, sir.
17 Q The Wharton School of Business, isn't that like the
18 most elite school of business in the country?
19 A It is one of them.
20 Q If not the number one?
21 A Yes.
22 Q You need me to rephrase the question I just asked
23 you? 24 A Out of hundred you ask me. 25 Q Partially -- it is partially because I am blinded by
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5234 Watstein-cross/Dunn
1 the partially, total stuff that is confusing. I will try
2 to be guided in my questions.
3 MR. WHITE: Objection.
4 THE COURT: It is a statement and not a
5 question. I have already instructed the jury several
6 times that statements are not evidence. Statements made
7 now, statements made in opening statements, statements
8 made in summations are not evidence.
9 Of course, the opening and summations you have to
10 pay attention to and listen to carefully, and consider
11 them.
12 Of course, that's the lawyer's view of evidence,
13 but these statements, the gratuitous remarks made in
14 m
oments perhaps of anger or frustration, or delight, or
15 anything else, pay no attention to them. I will let the
16 lawyers every once in a while say this. It can't be
17 helped. It will not affect you, I know.
18 Q And that same confidential informant, number 20, sir,
19 isn't it a fact in the complaint that he told the
20 government that you directed that a check payable to
21 Marquis Who's Who be deposited in your company account?
22 A Absolutely not.
23 Q Totally not accurate? 24 A Totally, sir. 25 Q Never happened?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5235 Watstein-cross/Dunn
1 A Never happened, sir.
2 Q The same confidential informant in the complaint said
3 that you directed Debra Horowitz to re-bill credit card
4 customers who had already received charge backs. And
5 that's in the complaint. And that's acc
urate also,
6 aside -- that is an accurate event, sir?
7 A Yes, sir, it is.
8 Q And it was also confidential. Number 21, who saw a
9 customer -- saw customer complaints about double-billing
10 on credit card accounts.
11 Do you remember that in the complaint?
12 A No, I don't, but I am sure it is in there.
13 Q Is it accurate?
14 A Accurate in there?
15 Q Is it an accurate fact that it happened in your
16 company?
17 A On one occasion by one salesperson, yes.
18 Q Single occasion?
19 A One occasion on five or six different incidents by
20 one salesperson.
21 Q This complaint uses the plural, double-billing on
22 credit card accounts?
23 A Yes, sir, more than one account, but one single 24 salesperson. 25 Q Was there a person working for you named Lee
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5
236 Watstein-cross/Dunn
1 Moskowitz?
2 A Yes.
3 Q And you remember there was a confidential informant
4 number 23, who apparently told the government that Lee
5 Moskowitz has been caught processing unauthorized orders
10 A Moskowitz was caught in processing improper credit
11 cards.
12 Q Sir, I am asking you, use your own terminology, is it
13 totally accurate, partially accurate?
14 A The sequence is inaccurate.
15 Q But, again, this confidential informant who was
16 working for the government was inaccurate about the
17 sequence; is that right?
18 A That is correct. But not about the facts.
19 Q Do you know that there was a second confidential
20 informant, a number 27
, that in the complaint it says:
21 Lee Moskowitz openly acknowledged charging customer credit
22 cards multiple times, when Watstein learned of this
23 Moskowitz was not terminated. Instead, he was later 24 promoted. 25 Do you remember that in the complaint?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5237 Watstein-cross/Dunn
1 A Yes, sir.
2 Q And this is a second confidential informant; is that
3 correct?
4 A Yes, sir.
5 Q And that's referring to the same thing; is that
6 right?
7 A Yes.
8 Q Again, that person is wrong on the sequence; is that
9 right?
10 A The facts are correct, sir.
11 Q But the sequence is wrong according to you; is that
12 correct?
13 A Yes, sir.
14 Q So, these two confidential informants were wrong on
15 their sequences; is that right?
16 A But not on th
eir facts.
17 Q Yesterday you mentioned you made 60 or 61 calls; is
18 that correct?
19 A 61, sir.
20 Q And you were asked questions about split billing; do
21 you remember that?
22 A Yes, sir.
23 Q I will withdraw it and try to put it in proper 24 context. 25 You were asked questions about discussing split
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5238 Watstein-cross/Dunn
1 billing -- I shouldn't say discussed, but being informed
2 by -- about split billing by people who worked at Who's
3 Who Worldwide; is that correct?
4 A Yes, sir.
5 Q Correct me if I am wrong, but it was your testimony
6 that 50 percent or more of those calls you were not
7 advised about split billing; is that correct?
8 A That's my best guess and recollection, yes, sir.
9 Q I would like to direct your attention, if I may, to
10 Government's Exhibit 1300-A, page 4.
11 Do you have a copy of that?
12 A No, sir.
13 Q I will come up to you.
14 MR. WHITE: You say it is 1300?
15 MR. DUNN: 1300-A.
16 Q Now, 1300-A is in evidence, so we can read from it.
17 Is it fair to say where it says Scott, he says,
18 okay, we have two memberships, we have a lifetime
19 membership and a five-year membership, which is split
20 billed. A lifetime membership is 490 now and 137 in
21 December when the registry is released. A one time -- it
22 says unintelligible, the five-year membership is 290 now,
23 and then 137 in December. 24 After the first year your annual dues are only 25 $49 a year. That includes everything, the registry, the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5239 Watstein-cross/Dunn
1 wall plaque, all your benefits and privileges.
2
The only difference between the membership is the
3 CD-ROM disk is also unintelligible, lifetime versus five
4 year, unintelligible.
5 Is that an accurate reading of that section of
6 the transcript?
7 A Totally.
8 Q It is fair to say that split billing was being
9 discussed by Scott?
10 A In that instance, yes, sir.
11 Q And that Scott is -- it is hard to read, but on my
12 copy it is Scott Michaelson; is that correct?
13 A Yes, sir.
14 Q I would like to direct your attention to
15 Government's Exhibit 1324-A, where the participants are --
16 did I get you?
17 A Yes.
18 Q Sorry about that.
19 A You have been trying that for a while.
20 MR. TRABULUS: What number is that?
21 MR. DUNN: 1324-A.
22 Q Government's Exhibit 1324-A, shows the participants
23 are Steven West, and a/k/a Brian Schnably, S C H N A B L Y, 24 an
d Laura Winters, and in parenthesis Laura; is that 25 right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5240 Watstein-cross/Dunn
1 A Yes, sir.
2 Q And if I direct your attention to page 4 of that
3 transcript, 1324-A, at the bottom, and is it accurate
4 where it says at the bottom, Laura, and that is, you know,
5 it depends on the cost. Let's say right now there is a
6 five-year membership. And this other person, it is
7 attributed I guess to you, and it says BS.
8 A Yes.
9 Q And it says right?
10 A Yes.
11 Q And Laura, which is 350. And the BS says right.
12 A Yes.
13 Q And Laura says, and then, is 99 -- and this will be
14 for December of '95 when the registry is released.
15 Is that accurate?
16 A Totally accurate.
17 Q Referring to split billing; is that correct?
18 A In that instance, yes,
sir.
19 Q And I would like to direct your attention now to
20 Government's Exhibit 1325-A, which is the next
21 Government's Exhibit in the book.
22 A What was the previous number before that one?
23 Q 1324. 24 A Thank you. 25 Q In 1325-A, it says the participants are Steven West,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5241 Watstein-cross/Dunn
1 a/k/a Chuck Sampson, and the next no name is -- known name
2 is Annette Haley; is that right?
3 A Yes, sir.
4 Q And I would like to direct your attention in the
5 transcript to page 7, the sixth attribution which starts
6 with Annette.
7 But let me tell you, for a five-year membership,
8 it is 350 now, and CS says right.
9 And Annette says, and 99 in December of 1995 when
10 the registry is released.
11 Then at the bottom of the page, the fourth
12
attribution from the bottom, CS says, so lifetime is 550
13 plus 99.
14 Annette, 99 in December of 1995.
15 CS, gotcha.
16 That was split billing that was discussed there;
17 is that correct?
18 A Totally accurate, yes, sir. I used the phrase,
19 gotcha, did I, to an accuracy? I see.
20 MR. SCHOER: Objection. Ask it be stricken. It
21 is unresponsive to the question.
22 THE COURT: Motion granted. Strike out the last
23 response by the witness, and the jury is instructed to 24 disregard it. 25 Q I would like to also now direct your attention to
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5242 Watstein-cross/Dunn
1 Government's Exhibit 1351-A, which -- is it fair to say
2 that it has the name Steven West and also has the name
3 Scott Michaelson; is that fair to say?
4 A Yes, sir.
5 Q And now I would like
to, in that Exhibit 1351-A,
6 direct your attention to page 15, the fifth attribution
7 from the top, where it says Scott. And what is attributed
8 to Scott is, but also, they have a ten-year membership,
9 which is $295 a month, which is billed again three
10 consecutive months.
11 And BI goes umm umm, uh-huh.
12 Scott, they have an additional balance of $99 in
13 December when the registry is released, and that's a one
14 time charge.
15 After that are annual -- our annual dues of $49
16 per year, which maintains your benefits and quarterly
17 magazine.
18 Split billing discussed there, sir?
19 A Absolutely.
20 Q That's accurate?
21 A Accurate.
22 Q I will show you Government's Exhibit 1330-A, which is
23 on the one I have, has the name Steve Walden on it. 24 Is that fair to say? 25 A Yes, sir.
HARRY RAPAPORT, CS
R, CP, CM OFFICIAL COURT REPORTER 5243 Watstein-cross/Dunn
1 Q I direct your attention to page 23, the fourth
2 attribution from the top, where it says Steve Walden, and
3 it starts, umm, with the lifetime gold it's split bill.
4 And then further down, after you skip the male
5 voice, it says, the lifetime gold, they will bill you 1250
6 now.
7 Male voice, right.
8 Steve Walden, then 99 next to -- next December
9 when the registry itself is released.
10 A That's correct, sir.
11 Q I would also like to direct your attention now to
12 Government's Exhibit 1333-A, and direct your attention to
13 where it says the parties are Steven West, a/k/a Scott
14 Goldberg, and a Steve Walden; is that correct?
15 A Yes, sir.
16 Q And I direct your attention to the top of page 15
17 where the first attribution refers to a Steve, where it is
18 st
ated, now, right now we have a ten year gold and
19 lifetime gold memberships available. The initiation for
20 the lifetime gold membership is only 1250 now, and then 99
21 next December when the registry in a gold bound edition is
22 released; is that accurate?
23 A Yes. 24 Q And then it goes on to discuss in the next 25 attribution of -- we cut down to the third sentence, the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5244 Watstein-cross/Dunn
1 ten-year gold membership is the -- the initiation is only
2 950 now and 99 next December.
3 Is that talking about split billing?
4 A Yes, sir.
5 Q And you say the majority of your calls, sir, more
6 than 50 percent, no split billing; is that correct?
7 A To the best of my recollection of the 61 tapes, the
8 50 percent did not mention it.
9 Q And those four individuals that I hav
e shown you,
10 Annette Haley, Laura, Scott Michaelson, Steve Rubin, those
11 four salespeople are sitting in this courtroom. They
12 talked to you about split billing?
13 A Yes, sir.
14 Q Other salespeople didn't tell you about split billing
15 apparently; is that correct?
16 A Yes, sir.
17 Q You are good at what you do, correct, sir? Teaching
18 people how to speak?
19 A I think so, sir.
20 Q You played a role in this case; is that correct?
21 A I assisted the post office, correct.
22 Q It was a role, correct?
23 A Partially correct. 24 Q You were acting a role, like an actor; is that right? 25 A Partially correct.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5245 Watstein-cross/Dunn
1 Q You had a script you were working off, correct?
2 A No, sir.
3 Q You created it yourself?
4 A There
was no script, sir.
5 Q It calls for a yes or no. Did you create anything
6 yourself?
7 A No, sir.
8 Q You just did it off the top of your head?
9 A Yes, sir.
10 Q You talked with Biegelman about what to say on the
11 phone; is that correct?
12 A Only to a limited extent.
13 Q Sir, you talked with him about mailing lists; is that
14 correct?
15 A No, sir.
16 Q Didn't he tell you that mailing lists are really
17 important? Did he tell you that?
18 A No, sir.
19 Q He never said that to you?
20 A No, sir.
21 Q He didn't tell you we are going to march people in
22 here and tell them about mailing lists, and that's why
23 everybody is upset? He didn't tell you that? 24 A Not at all, sir. 25 Q He didn't tell you it is important to say, hey, man,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 52
46 Watstein-cross/Dunn
1 I am on the sucker list or something?
2 A No, sir.
3 Q Never discussed that?
4 A Never discussed that.
5 Q Your goal was to get out of jail -- withdrawn.
6 Your objective was to make sure you didn't go to
7 jail?
8 A I can't answer it yes or no.
9 Q There is an answer out there where you can explain
10 it?
11 A Would you like to ask the question?
12 Q I am saying is there an answer out there that
13 explains that; is that correct?
14 A Yes, sir.
15 Q You wrote a book, you wrote a book on how to live to
16 be 100 years of age; is that correct?
17 A That's correct, sir.
18 Q You didn't write a book to live 100 years of age if
19 you had to spend any time in jail; is that correct?
20 A I can't answer that question, sir.
21 Q Inaccurate, partially inaccurate, totally
22 inaccurate?
23 I will withdraw the question. 24 A Thank you. 25 THE COURT: All right.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5247 Watstein-redirect/White
1 Have we covered all the defense attorneys now?
2 Any redirect?
3 MR. WHITE: Yes, your Honor.
4
5 REDIRECT EXAMINATION
6 BY MR. WHITE:
7 Q Mr. West --
8 THE COURT: Wait a minute now.
9 We will take a five-minute recess.
10 Members of the jury, please do not discuss the
11 case and keep an open mind.
12 Please recess yourself.
13
14 (Whereupon, a recess is taken.)
15
16 THE COURT: Let the record indicate that the
17 defendant Laura Weitz left the courtroom, I am sure for
18 some emergency, and I had to recess the jury until she
19 returned. Now I am bringing her back. And I see that the
20 defendant Laura Weitz is back
in the courtroom.
21 Is everybody else here?
22 MR. NELSON: Yes, Judge.
23 THE COURT: All right. 24 THE CLERK: Jury entering. 25 (Whereupon, the jury at this time entered the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5248 Watstein-redirect/White
1 courtroom.)
2 THE COURT: Please be seated, members of the
3 jury.
4 You may proceed, Mr. White.
5 MR. WHITE: Thank you, your Honor.
6
7 REDIRECT EXAMINATION (cont'd)
8 BY MR. WHITE:
9 Q Mr. West, you were cross-examined for three days
10 about your prior crimes.
11 Does any of that change what the defendants said
12 to you on the tapes that you made?
13 A No, sir.
14 Q Mr. Geduldig asked you about the money you made in
15 connection with your crimes.
16 Does any of that change what the defendants said
17 to you on the tape
s that you made?
18 A No, sir.
19 Q We have heard constantly about the refunds that your
20 company did or didn't give.
21 Does any of that change what the defendants said
22 on the tapes you made?
23 A No, sir. 24 Q Whether or not you paid your taxes. 25 Does it change what the defendants said on the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5249 Watstein-redirect/White
1 tapes you made?
2 A No, sir.
3 Q Whether or not you put property in your wife's name.
4 Does that change what the defendants said on the
5 tapes you made?
6 A No, sir.
7 Q Does whether or not -- does how much your suit cost
8 change what the defendants said on the tapes you made?
9 A No, sir.
10 Q Did you force or make any person you talked to to
11 give you a particular answer to the questions you asked?
12 A No, s
ir.
13 Q Now, you were asked repeatedly about names and
14 occupations you assumed in connection with these calls; do
15 you recall that?
16 A Yes.
17 Q And you were asked repeatedly as to whether or not
18 you thought they were lies; do you remember that?
19 A Yes.
20 Q And can you explain why you don't think they were?
21 A Phone calls were made in conjunction with a postal
22 investigation, and the identities I assumed, the questions
23 I asked were all part of a postal investigation. It would 24 have been most not appropriate for me to have indicated 25 anything to the contrary. And in no way did I force any
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5250 Watstein-redirect/White
1 of the responses from the recipients.
2 As a practical matter, some answers were honest,
3 and some were not honest.
4 Q Now, if
someone acting at the government's direction
5 operated undercover to catch a criminal, does that mean
6 they are lying?
7 A No, sir, not in my judgment.
8 MR. SCHOER: Objection.
9 MR. JENKS: Objection.
10 THE COURT: Sustained. Strike out the answer.
11 Q Now, in connection with the calls you made, were you
12 given any instructions by either Inspector Leonard or
13 Inspector Biegelman?
14 A Yes, sir.
15 Q And did they give you any instructions as to whether
16 or not you were to seek any incriminating information on
17 the tapes?
18 A None whatsoever, sir.
19 Q Tell us what they told you on that subject?
20 MR. NELSON: Objection.
21 THE COURT: Overruled.
22 A Inspector Biegelman gave me two instructions
23 initially. The instructions were to be honest and 24 truthful, and I would receive credit no matter the 25 outcome.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5251 Watstein-redirect/White
1 Q How many tapes total did you make in connection with
2 these tapes?
3 A 61, as relating to the phone calls, plus the calls
4 from the Garden City Hotel.
5 Q Now, did you provide Inspector Biegelman with all the
6 calls you made in connection with the Who's Who Worldwide
7 case?
8 A Yes, sir, each and every tape.
9 Q And some of the defense attorneys showed you tapes
10 where the defendants were truthful; is that right?
11 A Yes, sir.
12 Q Did you turn those over to Inspector Biegelman?
13 A Yes, sir.
14 Q So the defense attorneys have them now because you
15 turned it over to the government; is that right?
16 A Yes, sir.
17 MR. GEDULDIG: Objection, your Honor.
18 THE COURT: Overruled.
19 MR. GEDULDIG: I ask for an instruc
tion. They
20 turned it over to us under an obligation.
21 THE COURT: Yes.
22 The government is obligated to turn over all that
23 material before the trial. 24 MR. WHITE: Let me rephrase the question then. 25 Q The government had all those tapes because you turned
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5252 Watstein-redirect/White
1 it over to Inspector Biegelman; is that right?
2 A That is correct.
3 Q Now, did you receive any instructions from the postal
4 inspectors regarding tapes that you made that might
5 exonerate people?
6 A I don't understand the question, Mr. White.
7 Q Did you receive any instructions from the postal
8 inspectors, regarding the possibility that your tapes
9 might exonerate people?
10 A Yes, sir.
11 Q Tell us what you were told.
12 A I was told by Inspector Biegelman that
I was
13 prepared -- give him each and every tape without
14 exception. And I would receive, in quotes, credit,
15 regardless of the outcome of those tapes, no matter what
16 the parties had to say on the phone.
17 Q Did you participate in investigations which resulted
18 in individuals under investigation in fact being
19 exonerated?
20 A Yes, sir.
21 Q You were asked frequently about a list of questions
22 you had raised in these conversations; do you remember
23 that? 24 A Yes. 25 Q And tell us where you got that list of questions and
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5253 Watstein-redirect/White
1 subjects from?
2 A From my experience in my own Who's Who.
3 Q And those questions that you were asked a few days
4 ago now, as to whether those questions were designed to
5 elicit a specific ans
wer, were they?
6 A No.
7 Q And what do you mean by that?
8 A The folks that I spoke to could have either answered
9 honestly or dishonestly based on what they chose to
10 respond.
11 Q Mr. West, let me show you
12 Government's Exhibit 3500-22-I that you were shown over
13 the last few days.
14 (Handed to the witness.)
15 Q Now, that's the letter that the government wrote to
16 the judge advising him of your cooperation; is that right?
17 A Yes, sir.
18 Q And you were asked about two passages, at least two
19 passages there, if you look on page 4.
20 A Yes, sir.
21 Q The third paragraph.
22 A Yes.
23 Q You were asked about the portion of the last sentence 24 where the government refers to, quote, your long-term 25 criminal and fraudulent conduct; is that right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5254 Watstein-redirect/White
1 A Yes, sir.
2 Q So, is it correct that at your sentencing the
3 government advised the Court of your long-term criminal
4 and fraudulent conduct?
5 A That is correct, sir.
6 Q And if you look at the next paragraph, you were asked
7 questions about that, where it refers to the, quote, tens
8 of thousands of people he has victimized, unquote.
9 Do you see that?
10 A Yes, sir.
11 Q And were the facts regarding the victims of your
12 crimes made known to the judge at your sentencing?
13 A Yes, sir.
14 Q Now, if you could review that 5K letter, and tell us
15 if in that letter the government recommends any specific
16 sentence to the Court?
17 A No, sir.
18 Q Does that letter recommend that you get house arrest?
19 A No, sir.
20 Q Does it recommend that you receive probation?
21
A No, sir.
22 Q And you ultimately received house arrest and
23 probation; is that right? 24 A Yes, sir. 25 Q Who decided you get that sentence?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5255 Watstein-redirect/White
1 A Judge Mishler.
2 Q Did the government decide that you get that sentence?
3 A No, sir.
4 Q Tell us your understanding if whether, after
5 receiving that letter, if Judge Mishler could have
6 sentenced you to the original 70 months in jail?
7 A My understanding is that it freed Judge Mishler from
8 the guidelines, but gave him full discretion what sentence
9 he would give me.
10 Q Your original sentence it was in the range of 70
11 months?
12 A Yes, sir.
13 Q Could he have given you 70 months after the letter?
14 A Yes, sir.
15 Q Could he have given you 35 months?
16 A Yes,
sir.
17 Q Could he have given you 12 months?
18 A Yes.
19 Q And he decided that; is that correct?
20 A That's correct.
21 Q Now, you were asked an awful lot about your
22 cooperation with the government, correct?
23 A That's correct. 24 Q Did Judge Mishler ask you to do anything with respect 25 to your cooperation?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5256 Watstein-redirect/White
1 A He asked me to continue my cooperation, yes, sir.
2 Q Was that made a condition of your probation?
3 A Yes, sir.
4 Q And all the cooperation you were asked about as to
5 whether or not you were entrapping people, Judge Mishler
6 actually asked you to continue that; is that right?
7 A Yes, sir.
8 Q Take a look at Exhibit 3500-22-K for King, the
9 transcript of your sentencing; isn't that right?
10 A Yes, sir.
11 Q Do you recall being asked about a man named Donald
12 Fletcher?
13 A Yes, sir.
14 Q And refresh our memory who Donald Fletcher was?
15 A He was a sales manager for my Who's Who, who was
16 subsequently fired by me, in addition, was arrested and
17 pled guilty, as I understand it.
18 Q Now, Mr. Fletcher is the one who wrote to Judge
19 Mishler at your sentencing; is that right?
20 A Yes.
21 Q Where he said you are a big liar; is that correct?
22 A Yes, sir.
23 Q And during this time -- by the way, during the time 24 period from 1994 to 1991 -- 1984 to 1991, were you a big 25 liar?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5257 Watstein-redirect/White
1 A Absolutely, unfortunate, yes.
2 Q And take a look at
that transcript, page 3, line 17.
3 MR. JENKS: Mr. White, what page?
4 MR. WHITE:
Page 3, line 17.
5 MR. JENKS: I will object to what the Court said
6 in the record at the time of his sentencing, your Honor.
7 MR. WHITE: I am asking him to read it to
8 himself.
9 THE COURT: As of now -- did I interrupt you?
10 MR. JENKS: I am finished, your Honor.
11 THE COURT: As of now all counsel said was to
12 look at it himself. We will see what happens after that.
13 We want to have a little bit of a mystery in this once in
14 a while.
15 A Yes, sir.
16 Q All right.
17 If you could also take a look at that transcript
18 at page 13, lines 13 and 14.
19 A Yes, sir.
20 Q Now, without reading from it, can you say what, if
21 anything, Judge Mishler said at your sentencing with
22 regard to Mr. Fletcher?
23 MR. TRABULUS: Objection. 24 MR. JENKS: Objection. 25 THE COURT: Sustained.
HARRY RAPAPORT, CS
R, CP, CM OFFICIAL COURT REPORTER 5258 Watstein-redirect/White
1 The mystery didn't last too long.
2 Q Now, you were asked yesterday by Mr. Trabulus about
3 whether or not you had engaged -- whether or not you knew
4 at the time you were doing these things, these crimes,
5 that you were engaged in a scheme to defraud. Do you
6 remember those questions?
7 A Yes, sir.
8 Q And you answered at least twice, you did not, due to
9 your, quote, ignorance; do you remember that?
10 A Yes, sir.
11 Q And are you an attorney?
12 A No.
13 Q Do you have any legal training of any kind?
14 A No.
15 Q And are you familiar -- were you familiar at that
16 time with the federal mail fraud statute?
17 A No, sir.
18 Q Were you familiar at that time of the elements of the
19 crime of mail fraud?
20 A No, sir.
21 Q Now, when you
told people in your Who's Who business,
22 that when they were nominated, when they really came from
23 mail business, did you believe it was misleading? 24 A Yes, I did. 25 Q Did you believe it was dishonest?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5259 Watstein-redirect/White
1 A Yes.
2 Q Did you believe it was wrong?
3 A Absolutely.
4 Q Did you know that you shouldn't be doing it?
5 A Yes, sir.
6 Q When you told people there was a committee that
7 considered applications at your Who's Who business, did
8 you believe that was misleading?
9 A Yes, sir.
10 Q Did you believe it was dishonest?
11 A Yes.
12 Q Did you believe it was wrong?
13 A Yes, sir.
14 Q Did you believe that you shouldn't be doing it?
15 A Yes.
16 Q When you told customers these things, did you believe
17
you were getting money from them under false pretenses?
18 A Yes.
19 Q Can you explain what you meant yesterday in answer to
20 Mr. Trabulus' questions about your ignorance of the law at
21 that point in time?
22 MR. TRABULUS: Objection, your Honor, to form.
23 THE COURT: Sustained. 24 Q Can you explain what you meant yesterday regarding 25 the ignorance that you referred to?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5260 Watstein-redirect/White
1 MR. TRABULUS: Objection, your Honor.
2 THE COURT: Sustained.
3 MR. WHITE: With respect to the form of the
4 question?
5 THE COURT: No. Substance.
6 MR. WHITE: The witness cannot explain his answer
7 from yesterday? I am puzzled.
8 THE COURT: The witness can explain some of his
9 answers. If I find they are not admissible, he cannot
10 explain others. Yes, th
at's right.
11 MR. WHITE: Okay.
12 Q Mr. Trabulus asked you whether or not you had an
13 intent to defraud anyone at the time you were
14 committing -- you were running your Who's Who business?
15 A Yes, sir.
16 Q And you answered no?
17 A Yes, sir.
18 Q Can you explain what you mean or what you meant by
19 that?
20 MR. TRABULUS: Objection.
21 THE COURT: Overruled.
22 MR. WHITE: I got it right that time.
23 THE COURT: That one you got right. 24 A I didn't understand the legal significance of that 25 question.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5261 Watstein-redirect/White
1 It was clear that I intended to take advantage of
2 people, to mislead them, to take their money and do things
3 that were improper. I just didn't have the technical
4 knowledge of the law as of that moment.
5 In May of 1990, when the law was explained to me,
6 I realized in fact that my defrauding of the people was in
7 fact improper and illegal.
8 MR. SCHOER: Judge, may we have an instruction
9 that this witness' interpretation of the law is not
10 binding on the jury, and that your Honor will instruct
11 them as to what the law is, and what is and what is not a
12 crime?
13 MR. WHITE: Then maybe Mr. Trabulus shouldn't
14 have asked about it yesterday.
15 THE COURT: This is going to be the last, because
16 one of the jurors has to leave at 5:15, as I am advised.
17 Therefore, let me tell you that this witness'
18 view of the law is not the law. You are to pay no
19 attention to his view of the law.
20 The only reason I allowed this is because it was
21 brought up on cross-examination. This is his view of what
22 he was doing in a similar business. But as far a
s the
23 law, what mail fraud is, what intent to deceive is, that 24 you will wait to hear from me. 25 Therefore, this witness' view of the law is to be
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5262 Watstein-redirect/White
1 disregarded by you.
2 His intent to do what he was doing is another
3 matter.
4 We are going to take a recess at this point.
5 You may step down, Mr. Watstein.
6 (Whereupon, at this time the witness left the
7 witness stand.)
8 THE COURT: We are going to recess until 9:30 on
9 Monday.
10 Please do not discuss the case among yourselves
11 or anyone else. Keep an open mind.
12 Enjoy the weekend. We will recess until 9:30.
13 Whoever is getting to an appointment, drive
14 carefully.
15 We will see you on Monday morning.
16 (Whereupon, at this time the jury left the
17 courtroom.)
18 THE COURT: What is going to happen on Monday?
19 MR. WHITE: One moment, your Honor.
20 (Whereupon, at this time there was a pause in the
21 proceedings.)
22 MR. WHITE: I guess -- Monday is when we go to
23 3:15; is that right, your Honor? 24 THE COURT: Yes. 25 MR. WHITE: There is Mr. Watstein, obviously to
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5263
1 continue for a while.
2 We have two customers from out of town.
3 THE COURT: I forgot to tell the jury we are
4 quitting at 3:15, but I did tell them the other day.
5 MR. WALLENSTEIN: Yes.
6 MR. WHITE: The two customers from out of town
7 are Karen Wood, and Charles Smith, if we can insert them.
8 THE COURT: Then you will put Mr. Watstein back
9 on?
10 MR. WHITE: That's my plan. I am not letting
11 them go, letting him go, y
our Honor, based on what
12 happened the last time.
13 THE COURT: What happens after Mr. Watstein? The
14 government rests?
15 MR. WHITE: I wish.
16 MR. TRABULUS: So do we.
17 MR. GEDULDIG: From your mouth to God's ears.
18 MR. WHITE: There are more customers and more
19 tapes.
20 THE COURT: Who are you bringing in next then?
21 MR. WHITE: I have to tell you I don't know yet.
22 We are juggling a lot of customers' schedules.
23 THE COURT: Among what customers are you bringing 24 in? 25 MR. WHITE: Let me consult.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5264
1 (Whereupon, at this time there was a pause in the
2 proceedings.)
3 MR. WHITE: Your Honor, in addition to the people
4 I mentioned, on deck for next week sometime will be
5 Richard Searle, S E A R L E, Thomas Skonie, S K O N I E,
6 Fred Simmen, S I M M E N. And that's what we got lined
7 up. That's potentially for next week.
8 THE COURT: Very well.
9 MR. WHITE: I am getting a note here from
10 Mr. West, he is having a problem on Monday. Perhaps a
11 direction from you will go further than mine.
12 THE COURT: Bring him in.
13 MR. DUNN: While I am doing that, my client asked
14 me to inform the Court, he just wants to let you know he
15 is not showing any disrespect for the Court when he gets
16 up. His condition is somewhat worsening.
17 THE COURT: That's Mr. Rubin?
18 MR. DUNN: Yes.
19 THE COURT: I know that. You told me that
20 before. We have been told that.
21 MR. DUNN: He wanted me to let you know about it
22 again.
23 THE COURT: No disrespect. Sorry he needs to go 24 through all of that. 25 MR. DUNN: Thank you.
HARRY RAPAPORT, CSR, CP, CM O
FFICIAL COURT REPORTER 5265
1 MR. SCHOER: If I can speak to the issue of the
2 witnesses, I am looking at my list --
3 THE COURT: Before you do that, please.
4 Mr. Watstein, you are still on the witness stand
5 being questioned. You will have to return on Monday.
6 Now, I understand you will have some kind of
7 problem?
8 MR. WATSTEIN: I am going to Alabama this evening
9 and Florida. I will be arriving in Florida beyond
10 midnight on Sunday. It is physically impossible to be
11 here on Monday.
12 THE COURT: You will have to cancel your flight
13 to Alabama, or whatever you are going to do, and I am
14 directing you to be back here on Monday. Sorry,
15 Mr. Watstein. We are not going to extend your testimony
16 any further. You will cancel your flight or have someone
17 cover it or do whatever you want to do.
18 MR. WATSTEIN: May
I speak?
19 THE COURT: Yes.
20 MR. WATSTEIN: This is my son's one day in
21 school, a special school, that I can see him one day a
22 year. I sacrifice today, I will not be able to see my son
23 for several months. 24 THE COURT: When is the day that you are going to 25 see him?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5266
1 MR. WATSTEIN: Tomorrow, sir.
2 THE COURT: Why can't you leave on Saturday
3 night?
4 MR. WATSTEIN: The date runs from tomorrow to
5 10:00 o'clock on Sunday. There are no flights available
6 coming back. I will attempt to do it. But I don't
7 believe it is possible.
8 THE COURT: What makes you believe you can come
9 back on Tuesday?
10 MR. WATSTEIN: Normally it is easier to get back
11 from the south to the north on a Monday.
12 THE COURT: What school is your son in?
13 MR. WATSTEIN: Painted Rock, your Honor.
14 THE COURT: What kind of school is that?
15 MR. WATSTEIN: A school for children with
16 difficulties. There is only a limited amount of
17 visitations permitted. It is the only one permitted for
18 quite a while. He has been anticipating it.
19 With your permission I will do everything I
20 possibly can to come back. I am sure I can come back on
21 Tuesday. Leaving Sunday night I am told it is physically
22 impossible, no flights available from the south to the
23 north. 24 THE COURT: All right. 25 Do you want to step outside for a minute?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5267
1 MR. WATSTEIN: Yes, sir.
2 (The witness leaves the courtroom.)
3 THE COURT: Anyone oppose that application to put
4 him on Tuesday, if he can't come back Monday?
5 MR. DUNN: No
opposition.
6 THE COURT: I was going to do it anyway.
7 MR. WALLENSTEIN: I am flattered you asked.
8 THE COURT: I have to ask you. You have a due
9 process right to be heard at every stage.
10 Call Mr. Watstein.
11 MR. WHITE: That has a domino effect before you
12 do that.
13 If Mr. Watstein is not going to testify on
14 Monday, we may then put Mr. Saffer, S A F F E R, who is
15 also cooperating. And it would break up his testimony,
16 which we will do if necessary. But I know there was
17 objections raised before.
18 THE COURT: Can't you put other people on who
19 will not be on on Monday instead? You have so many
20 witnesses. Can't you get some of the others in?
21 MR. WHITE: I will try. And we have tapes to
22 play and everything. And I will try to do that. If push
23 came to shove, and we needed Mr. Saffer, I didn't want 24 screaming t
hat we didn't give notice. 25 THE COURT: You bring in enough witnesses to
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5268
1 cover the eventuality of Mr. Watstein not being here,
2 because it looks like he will not be here on Monday, even
3 if you have to start with the other cooperator, which I
4 don't think is a smart thing to do.
5 MR. WHITE: I didn't want to do it.
6 THE COURT: Whatever. But we will finish
7 Mr. Watstein on Tuesday morning, if we can.
8 MR. WHITE: Okay.
9 (Whereupon, at this time there was a pause in the
10 proceedings.)
11 THE COURT: Mr. Watstein, make every effort to
12 get back here on Monday. If not we will expect you on
13 Tuesday.
14 MR. WATSTEIN: Thank you very much, sir.
15 MR. TRABULUS: One other matter.
16 THE COURT: I think Mr. Schoer was talking about
17 something.
18 MR. TRABULUS: I am sorry.
19 MR. SCHOER: I am looking at the list of
20 witnesses from the 3500 material that we were provided,
21 and based on the indictment as I understand it, there are
22 still 44 witnesses who need to be called with respect to
23 receiving mail on the substantive counts. 24 Of the five people he just named as the next 25 witnesses, two of them are not even in that 44 group.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5269
1 There are other customers that are not even related to the
2 indictment.
3 I submit their testimony is cumulative. If we
4 are going to have 44 more, why do we have to have
5 additional ones?
6 THE COURT: Maybe you will not have 44 more. I
7 assume the government is not going to call all these
8 witnesses who are on the list.
9 MR. WHITE: I am not, your Honor. I do not
10 intend at this point to call them. I am trying to shorten
11 it to cut out people.
12 Also, I think Mr. Schoer --
13 THE COURT: You just added two.
14 MR. WHITE: Which two?
15 THE COURT: Mr. Schoer said you added people.
16 MR. WHITE: They were all on the list.
17 MR. SCHOER: I am not saying we were not given
18 notice of them. They are members, or relate to membership
19 issue. But they are not one of the named people in the
20 counts of the indictment.
21 MR. JENKS: Substantive counts.
22 MR. TRABULUS: In the substantive count. If we
23 are going to have 44 more in the substantive counts, I 24 believe some relating to the substantive -- not relating, 25 they are cumulative.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5270
1 MR. WHITE: Mr. Schoer is legally mistaken. I
2 don't have to bring in a custom
er to prove the mailing, I
3 can prove that independently of that. I don't have to
4 have that customer come in. I have to prove a scheme to
5 defraud and mailing.
6 It so happened the way I drafted the indictment
7 was that each mailing related to a particular victim. I
8 don't have to have that person come in, if I can prove
9 that the mailing was made and it was in furtherance of the
10 scheme to defraud without them.
11 THE COURT: As to the substantive counts you have
12 to proof each one of those.
13 MR. WHITE: Yes, but I have to prove that the
14 mailing was in furtherance of the scheme. I can prove
15 that that mailing was made without necessarily calling the
16 customer in.
17 THE COURT: The mailing, yes.
18 MR. JENKS: Don't you have to prove that the
19 mailing was received, the customer actually received the
20 mailing?
21 MR. WHIT
E: It depends what it is. I have to
22 prove that it was mailed.
23 THE COURT: As to all of these counts in the 24 pages 14 through 18 of the indictment. 25 How do you intend to prove these counts?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5271
1 MR. WHITE: A, there was a scheme to defraud. B,
2 that those mailings, A, were made, and from what they are,
3 and the other testimony, although the customer is not
4 here, there is sufficient evidence that it was in
5 furtherance of the scheme.
6 For example, if I have 25 customers come in and
7 say that these are the cards, or this is the lead card I
8 got in the mail, or the letter I got in the mail, and we
9 have cooperators and others testifying about the scheme to
10 defraud, if the mailings are admitted, most of them have
11 postmarks on them, which is proof of the mailing.
12 THE COURT: How do you prove that the mailing is
13 tied up with any particular defendant?
14 MR. WHITE: That can be done through the other
15 documents.
16 In other words, each purchase is in a packet that
17 relates the order --
18 THE COURT: You are going to do it by documentary
19 evidence?
20 MR. JENKS: That's what I want to ask.
21 MR. WHITE: Yes. I didn't mean to belabor the
22 point.
23 MR. SCHOER: For example, there are invoices 24 here. How do you prove the invoices were ever actually 25 mailed unless he calls the member who received that?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5272
1 MR. JENKS: Take count 38, that's the point,
2 Judge, if you take count 38, it says that on 11/12/93 an
3 invoice was in fact mailed from Who's Who Worldwide.
4 How do you prove an invoice was in fact mailed?
5 There is no postal stamp or mark on the invoice. How do
6 you prove that?
7 THE COURT: I don't know.
8 MR. WHITE: Testimony from an employee of the
9 company saying it was the regular practice to send this
10 out, this type of document by mail is sufficient, your
11 Honor.
12 There is a variety of different types of mailings
13 set forth.
14 THE COURT: You better -- what you better do is
15 try to assemble a chart of some type to show all of this
16 for me at least. Because it is getting very confusing at
17 this point. I think you ought to take a look at United
18 States against LaBarbara, and I was just -- several of the
19 mail counts were reversed where I tried a case involving
20 union labor racketeering. And they -- several counts of
21 the mailings were dismissed. I am not sure it is similar
22 to this. But you ought to take a look at it.
23 MR. WHITE: I will. 24 THE COURT: I assume you have evidence of a 25 conspiracy in this case. I have not heard it yet.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5273
1 MR. WHITE: We have cooperators who will testify
2 in addition to Mr. West.
3 THE COURT: A word to the wise, that's all.
4 MR. WHITE: It is coming.
5 MR. SCHOER: I want to get back to the point of
6 objecting to the introduction of witnesses who are
7 cumulative, and particularly on the list we were reviewing
8 just now, Mr. Skonie and/or Mr. or Ms. Searle, who do not
9 relate to the substantive counts. I think there has to
10 come a time that the Court has to tell the government that
11 these people are cumulative and that they shouldn't be
12 called.
13 MR. WHITE: Their argument is contradictory.
14 They are saying in order to prove these counts
I have to
15 bring everybody in.
16 MR. SCHOER: They are not in those counts.
17 THE COURT: One at a time, please.
18 MR. SCHOER: I am sorry.
19 MR. WHITE: Putting as I should that argument,
20 what the government alleged is a five year scheme to
21 defraud.
22 So far we have heard from about a dozen
23 customers. I don't think it is excessive to have a couple 24 of people not listed specifically in the indictment as 25 proof of the scheme to defraud there on in.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5274
1 THE COURT: I don't either, not when there are
2 50,000 people or members in the organization. I certainly
3 don't think it is cumulative. And, therefore, I deny your
4 motion to limit those two witnesses.
5 Anything else, Mr. Schoer?
6 MR. SCHOER: No, Judge, thank you.
7 MR. TRABULUS: Your Hon
or, in giving the limiting
8 instruction that Mr. Schoer had requested before, your
9 Honor used the term similar business, or similar
10 businesses in making, I guess, a comparison of Mr. West's
11 business, and the business of Who's Who Worldwide and
12 sterile.
13 Although certainly they were similar since they
14 were both Who's Who, it could be read by the jury to
15 involve further similarities.
16 THE COURT: You might be right, what do you
17 suggest I say?
18 I could mention to them when I mentioned Friday
19 the witness Watstein was in a similar business, in no way
20 did I make a determination, which is, of course, yours to
21 make if there is such similarity. And you are not to
22 consider my statement.
23 The only reason I made the statement is because 24 they were both in Who's Who. 25 You conform any curative charge you want.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5275
1 MR. TRABULUS: I will work on wording similar to
2 what your Honor said, and perhaps there is an appropriate
3 time in the redirect or the recross where that instruction
4 can be given.
5 THE COURT: I will wait until there is an
6 appropriate time so it will not stand out as badly as if I
7 did it immediately.
8 I think you are right. I will do it. But you
9 give me the wording you want.
10 MR. TRABULUS: Thank you.
11 THE COURT: I put the burden on you,
12 Mr. Trabulus.
13 MR. TRABULUS: It is all right.
14 MR. NELSON: Based upon the offer Mr. White had
15 made with respect to the order of witnesses he might be
16 presenting on Monday, I have some objection or qualms with
17 respect to the presentation.
18 The interruption of Mr. West's testimony for the
1
9 calling of another cooperating witness.
20 I have no problem for accommodating the customers
21 coming out of town to testify or accommodating Mr. West,
22 but I believe it might interfere with the jury's ability
23 to what is taking place in the course of the trial. In 24 that sense the right of the confrontation of each of the 25 defendant's in the case, to have one cooperating witness
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5276
1 testimony interrupted for another cooperating witness, and
2 then going to the redirect and recross for the first
3 cooperating witness and turning back for the second.
4 I would suggest there are at least 60 tapes. We
5 heard four or five so far. But that between live
6 customers testifying on Monday, and the recordings that
7 the government is in a position, and I assume will play,
8 that it could qui
te well fill Monday and not present the
9 problem for the Court.
10 THE COURT: It is a reasonable alternative. Why
11 can't you do that instead of starting with another
12 cooperative witness, which is more of a major witness, and
13 we'll try not to break it up. Although I don't believe
14 there is anything prejudicial about it. In fact,
15 sometimes it is very helpful, but the lawyers have more
16 time to prepare. There is always an upside on everything.
17 MR. WHITE: That is my preference to do it the
18 way Mr. Nelson suggests.
19 THE COURT: Do you have enough tapes to play that
20 would last the rest of the day in addition to the two
21 witnesses? Or perhaps you can bring in three or four of
22 those witnesses. I would prefer that rather than start
23 with another cooperating witness. 24 MR. WHITE: Considering it is a short day, it is 25 more likely we c
an.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5277
1 While there are a lot of tapes, not all of them
2 are going to be played in full.
3 THE COURT: Why don't you figure out over the
4 weekend what tapes you will play and play them.
5 MR. WHITE: Your Honor, that's my -- that was my
6 original intent. I only brought up the other cooperator
7 because I wasn't sure if we would run out. I know your
8 Honor doesn't want us to run out.
9 THE COURT: I think it would be better and fairer
10 not to start with the other cooperator until we get
11 through with Mr. Watstein, so we can more or less go
12 through.
13 I don't mind an interruption from time to time.
14 I don't believe it is depriving anybody of the right to
15 confrontation, but it would be better for everybody,
16 continuity wise, to do it at one time.
17 MR.
WHITE: I will endeavor to do that.
18 As a general matter, it is not so simple to move
19 customers in and out. 90 percent are from out of town.
20 They need a little lead time at a minimum to make plane
21 reservations.
22 THE COURT: You have been doing a good job.
23 Continue to do it. After all, you have the power that 24 defense counsel all say you have, the overwhelming mighty 25 power.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5278
1 MR. WHITE: I am not sure about that when you try
2 to convince someone to get on a plane the next day.
3 THE COURT: I hear it in every case, the great
4 power of the federal government.
5 MR. WHITE: I hear about it, too.
6 THE COURT: Well, use it.
7 MR. WHITE: I also have the two cases on prior
8 consistent statements from the other day that you asked me
9 to make copies of
.
10 MR. WALLENSTEIN: Perhaps we can borrow
11 Mr. Watstein's limousine to bring the customers in.
12 (Case on trial adjourned until 9:30 o'clock
13 Monday, February 23, 1998.)
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20
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22
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HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 5279
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