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March 24 - Afternoon session


1 A F T E R N O O N S E S S I O N.

2 THE COURT: Please be seated, members of the jury.
3 . Please give your attention to the attorney for
4 John Reffsin, Mr. Wallenstein.
5 MR. WALLENSTEIN: Good afternoon. I will try to
6 keep you all awake after lunch.
7 You know, there's a couple of things that the
government didn't tell you about this case and Mr. White
9 is wrong about one thing, we do agree on a couple points
10 but he said we didn't agree on any. One of the things he
11 didn't tell you until the very end of his three hours and
12 some-odd minutes of summation he has to prove guilt beyond
13 a reasonable doubt. Those are four very important words. 14 You heard them in the beginning of this trial,
15 you'll hear them from me, I dare say you will hear them
16 from all of my colleagues when they get up and follow me,
17 and you will hear them from Judge Spatt more than once.
18 Every element of every crime charged in this indictment
19 and there are 69 counts in this indictment, every element
20 of every crime charged in this indictment has to be proven
21 to your unanimous satisfaction beyond a reasonable doubt
22 by the government. Not by me, not by Mr. Trabulus,
23 Mr. Jenks, Mr. Schoer, Mr. Nelson, Mr. Lee, Mr. Dunn,
24 Mr. Neville, Mr. Geduldig, not one of us has to prove a 25 single solitary thing. None of us has to do anything in


1 this trial except show up. I do not have to give you this 2 summation, none of them have to speak after me. We can 3 simply sit here and say by pleading not guilty, we've said
4 we didn't do it, it's the government's burden throughout
5 this trial to prove guilt beyond a reasonable doubt. Bear
6 that in mind throughout the summations, the charge and all
7 the way through your deliberations. You cannot, you
cannot on your oaths as jurors convict any defendant of
9 any crime unless all of you are convinced beyond a
10 reasonable doubt of guilt and convinced by the
11 government's proof. 12 Now, I say that specifically because my client 13 testified and I called two other witnesses, I called Jack 14 Hall and I called Vincent Rizino. I didn't have to do 15 that, I didn't have to put any case at all and Marty 16 Reffsin certainly didn't have to say anything to any of 17 you, but the fact that we chose to do so does not in any 18 way shift the burden from the government. I don't have to 19 prove that Marty Reffsin is innocent, he is presumed to be 20 innocent. He does not have to convince you by any 21 standard of proof that he did not commit the crimes he's 22 charged with, despite the fact that he testified, he 23 doesn't have to convince you of a thing. The government 24 has to convince you that he's guilty beyond a reasonable 25 doubt of every element of every crime that he is charged


1 with. 2 He's charged with obstruction of justice, one 3 count, because there are two counts in the indictment.
4 He's charged with acting along with Bruce Gordon with
5 aiding and abetting Bruce Gordon and the two of them are
6 charged, I give up with the numbers in the indictment, but
7 charged with one count for obstructing justify for putting
those phony logs in front of the bankruptcy court. I'll
9 deal with all of those things later.
10 There's a second count of obstruction that
11 Mr. Reffsin is not involved in. But he's charged with tax 12 evasion. He's charged with assisting in the filing of 13 false tax returns, three or four counts, if that, and he's 14 charged with conspiracy, conspiracy to impede the Internal 15 Revenue Service in the collection of Bruce Gordon's taxes. 16 What is this case really about? This case, the 17 tax case and the mail fraud case for that matter are about 18 greed. The case is about vanity, it's a bout narcism, it's 19 about Bruce Gordon living the high life at the expense of 20 everyone around him. As a result of Bruce Gordon's vanity 21 and greed, these people are on trial here, Reffsin, all of 22 the salespeople are on trial here because Bruce Gordon 23 lied to everybody from day one. 24 I agree with Mr. White about that. I obviously 25 don't agree with Mr. White about Mr. Reffsin's role in all


1 of this and I'll tell you why. But the fact is that Marty 2 Reffsin relied on his client to provide him with accurate 3 and complete information and to tell him the truth. Why
4 would a man lie to his accountant? The accountant is the
5 guy that can help him. The accountant is the guy that
6 will minimize legally his tax liability, the accountant
7 will be the guy that doeshis books. Why would you lie to
your accountant? Having heard all the evidence in this
9 case you heard why now, but he didn't know then.

10 In 1998 every one ever us in this room has 20-20
11 hindsight. In 1992 and 1993 and 1994, nobody knew --

12 well, not nobody, but Marty Reffsin didn't know.

13 Let's talk about some of the specific charges and 14 why the government has not proven guilt beyond a 15 reasonable doubt of all the elements of all the crimes

16 charged, and on that note Judge Spatt will instruct you

17 further on Thursday, if a crime has three or four or five

18 elements and the government convinces you of four out of

19 those five elements, that's not enough. You have to be

20 convinced of every element of the crime or you must acquit 21 the defendant, that's the law, that's what the Judge will

22 tell you and that's what you must follow.
23 The government says that Reffsin and Gordon 24 conspired to defraud the IRS. The government says that
25 because Marty Reffsin was Bruce Gordon's accountant for


1 years and years, that therefore he knew and therefore he's 2 just as involved as Bruce Gordon. And that I think 3 ignores the fact that Gordon didn't care what Reffsin
4 thought and didn't ask Reffsin's advice in advance.

5 Gordon did what Gordon wanted to do when Gordon wanted to

6 do it and how Gordon wanted to do it. And anybody who

7 worked for Gordon or who was an outside professional
employed by Gordon, wound up in the same boat, they did
9 what Gordon wanted them to do or they didn't work for

10 Gordon and they did it the way Gordon wanted it because
11 Gordon tailored the facts. Gordon told them what they

12 want to hear.

13 How do we know that? We heard it from the 14 witnesses here, we heard it from Marty Reffsin's own mouth 15 that Gordon told him of the things after the fact. Never 16 came to him in advance and said, Marty, what shall I do 17 now? He came to him and said, yeah, Marty, I did it, 18 clean up my mess. We know that's true because Debbie 19 Benjamin told us that that's what happened with Phil Peers 20 and Mr. White touched on that in morning. 21 Debbie Benjamin you will remember sent some 22 documents to Phil Peers, the attorney and lawyers don't 23 remember my business, I run my business, that's how he was 24 with Reffsin, that's how he was with every one of these 25 people. He ran it, he did what he wanted to do, he told


1 you what you thought you ought to know.

2 There is no evidence in this case that Marty 3 Reffsin had anything whatsoever to do with Bruce Gordon's
4 life-style. There is no evidence that Marty Reffsin knew
5 where Bruce Gordon was living let alone how he was
6 living. There is no evidence in this case that Marty
7 Reffsin ever was in Bruce Gordon's home, and the evidence
is to the contrary and the only evidence is from
9 Mr. Reffsin, of course.
10 Mr. White says that this whole case is about the
11 scheme to keep the IRS from getting the money that Bruce 12 Gordon owed them and to a certain extent he's right. But 13 the fact is that Bruce Gordon's tax liability to the IRS, 14 that 3 and-a-half million we talked about was just that, 15 Bruce Gordon's tax liability. It wasn't Marty Reffsin's 16 tax liability, it wasnt anyone else's liability except 17 Bruce Gordon's. He's the only one who had the problem

18 with the Internal Revenue Service and Mr. White is right. 19 Mr. Gordon had 3 and-a-half million reasons not to pay the 20 IRS. But there's not one reason in this case, there's not 21 one single shred of evidence that points to a motive for 22 Marty Reffsin to put his license, 20 years of practice and 23 his family and freedom on the line for Bruce Gordon. That 24 just doesn't make any sense. 25 For a couple of thousand in accounting fees, he's


1 owed money, you heard that. Will he risk his entire 2 career and freedom so that Bruce Gordon can get out from 3 under a three and-a-half million liability? I don't think
4 so and I don't think you think so either.
5 When Mr. White spoke this morning for about the
6 first hour and-a-half of his summation he spoke about the
7 tax case, but when you analyze what he said Mr. Reffsin is
an add-on. Mr. Reffsin is the afterthought because
9 everything that Mr. White said points to Bruce Gordon,
10 whether or not Gordon intended to defraud the IRS makes no
11 difference, whether there was a crime or wasn't a crime 12 Reffsin wasn't involved in it except to the extent he 13 prepared some returns, some documents. His people 14 balanced some books, did bank reconciliations. 15 Let's talk about the conspiracy now. The count 16 in the indictment charges that Gordon and Reffsin 17 conspired to impede the Internal Revenue Service, and the 18 Judge will read the entire count to you tomorrow and 19 explain all the terms to you, but basically it came down 20 to they got together, they made an agreement and in that 21 agreement they decided that they were going to beat the 22 IRS out of the money that Gordon owed to the IRS, and 23 there's no dispute but that Gordon owed the money to the 24 IRS, that's clear. 25 In order for there to be a conspiracy, though,


1 there has to be an agreement. There has to be a conscious 2 sharing of an intent to defeat the IRS. Reffsin must, 3 even if Gordon does intend to beat the IRS and I'll leave
4 Mr. Gordon's defense to Mr. Trabulus, but even if Gordon
5 intends to beat the IRS, if he doesn't have an agreement
6 with Reffsin, if Reffsin doesn't share that intent, then
7 there's no conspiracy and you can't find either of them
9 The government has to prove beyond a reasonable
10 doubt that Mr. Reffsin knowingly and willingly became a
11 member of a conspiracy to defraud the Internal Revenue 12 Service. 13 Now, everybody hates the IRS with the possible 14 exception of Mr. Jordan who works for them and that's not 15 a reflection on him. Nobody likes the IRS, those are the 16 last words you want to hear when that knock comes to the 17 door, hi, I'm from the IRS -- oh, no, I'm not home. 18 Because the IRS only wants one thing from you, they want 19 from you, just like they wanted from Mr. Gordon, just like 20 they want from Mr. Reffsin, just like they want from 21 everybody else, they want your money, the money that you 22 worked so hard to earn, they want it. And what do you get 23 in return? In return they get to send foreign aid to 24 Bosnia, things like that. None of us want to pay taxes, 25 all of us realize we have to and most of us are willing to


1 pay our fair share but the IRS wants your last dollar.

2 Now, how do we know that? 3 In this case we've talked about offers and
4 compromise and talked about collection statements and
5 we've heard testimony from collection people and from
6 examination people, revenue officers, revenue agents, all
7 of these people have one function in life, their life is
to part you from your money, that is what they do, not by
9 selling you something but by coming and saying if you
10 don't give it to me, I'm going to take it anyway. That's
11 how the IRS works. 12 Part of this alleged conspiracy is that the 13 government claims that in order to hide Bruce Gordon's 14 true assets and true income that he and Mr. Reffsin15 concocted this scheme whereby they would submit this false 16 collection statement and submit a false offer and 17 compromise. That's the allegation, that's what the 18 government says. The government has to prove that to you 19 beyond a reasonable doubt. 20 I'm going to keep saying that so get used to it, 21 I hope you will not tune it out. The reason I say that is 22 because when you think about it, when you think about what 23 I'm saying, when you think about what Mr. Trabulus will 24 say about it later and when you think about the evidence 25 that the government has adduced, that we have adduced, all


1 of the evidence in the case and you apply the law that 2 Judge Spatt gives you to that evidence, if you come away 3 saying, you know, I'm not sure, maybe, then you have a
4 reasonable doubt. If you have a reasonable doubt you must
5 acquit the defendant. You must. You have no options.
6 Now, the government spent a lot of money to try
7 this case and we've all been here together, what is this,
12 weeks? I lost count. Hundreds and hundreds of
9 exhibits. I lost count of witnesses after Mr. Gagliardi
10 and he was the second one and that was back in January,
11 you remember, in the winter we never had, and they brought 12 all of these people in here, lots of witnesses, hundreds 13 of exhibits, all of these great blowup charts. The little 14 one I put in is just so puny compared to them, but they 15 have all the money, we have no resources, the government 16 has everything. And because they've done that there's 17 going to be a certain feeling on your part, I fear, I hope 18 it's not there, but I think there might logically be a 19 certain feeling on your part that you will say, well, they 20 might have done something. Well, they might have, but 21 that's not enough. They might have done it is not proof 22 beyond a reasonable doubt and you can't come in here and 23 say the government spent that money, they must know things 24 we don't know so, therefore, we'll find these people 25 people guilty because they wouldn't have brought the


1 charge. That's not the way it works. 2 The way it works is the government presents their 3 evidence and make their arguments and they try to convince
4 you beyond a reasonable doubt that the defendants are
5 guilty. It's up to you as jurors to sift through that
6 proof, to weigh the evidence, to carefully examine the
7 evidence and to consider what's not here, to consider the
lack of evidence, the witnesses who did not testify, the
9 exhibits that were not presented because something that
10 you would have needed to dispel that reasonable doubt
11 that's not here, leaves that reasonable doubt and 12 therefore they will not have met their burden. But it is 13 their burden and it is your burden and your responsibility 14 as jurors to render a just and fair verdict based on what 15 you've heard and what you haven't heard. 16 The government has to prove in order to prove 17 this conspiracy charge that there was an agreement that 18 Marty Reffsin intended to defraud the IRS because they 19 claim that Bruce Gordon intended to defraud the IRS, but 20 if he alone intended to defraud the IRS that is not a 21 conspiracy. Reffsin would have to share his intent, would 22 have to share, would have to agree with him that this is 23 what they want to do. Now, that doesn't mean that 24 Mr. White has to bring somebody in here and say I heard 25 them conferring and I heard them say they agree, but there


1 must be sufficient evidence to convince you beyond a 2 reasonable doubt that Marty Reffsin agreed with Bruce 3 Gordon that they were going to engage in this massive
4 scheme, the government's theory, that over a five-year
5 period they were going to do this in order to defraud the
6 Internal Revenue Service, that that was their purpose. If
7 they can't convince you of that beyond a reasonable doubt
then you must find Mr. Reffsin not guilty of the
9 conspiracy.
10 The fact that Mr. Reffsin was Mr. Gordon's
11 accountant and had a long time accountant-client 12 relationship with him is not enough for you to be 13 convinced beyond a reasonable doubt that there was a 14 conspiracy to defraud the IRS. The fact that Mr. Reffsin15 and Mr. Gordon frequently had contact, frequently did 16 business together, the fact that Mr. Reffsin handled the

17 books of Who's Who Worldwide or handled Mr. Gordon's 18 personal tax affairs is not enough -- is not enough -- and 19 the Judge will so instruct you. That is not sufficient 20 proof to establish guilt of a conspiracy beyond a 21 reasonable doubt. 22 Conspiracy is a real sinister word, isn't it? It 23 doesn't have the same ring as "agreement." It doesn't 24 have the same ring as "joining together." It's a nasty 25 little word. It's a nasty little statute because it makes


1 people guilty of things that they are not guilty of simply 2 because they know and associate with other people. But 3 you'll not let that happen because you'll not convict
4 Marty Reffsin of conspiracy unless Mr. White convinces you
5 beyond a reasonable doubt that he shared Mr. Gordon's
6 intent that he conspired with Mr. Gordon to do this.
7 Now, where -- the government doesn't have to
prove any motive, but wouldn't you like to hear about
9 Mr. Reffsin's motive for this when you assess whether or
10 not he intended to defraud the IRS? What does he get out
11 of it? We know what Gordon gets out of it. Gordon gets 12 out of it a 3 and-a-half million tax liability. But what 13 does Reffsin get out of it? A couple of hundred 14 thousands. He has a family, he has a license, a practice 15 and he doesn't have them anymore if he gets involved in a 16 conspiracy with Bruce Gordon, but he has no motive to beat 17 the IRS. 18 Now, does he have an obligation as Gordon's 19 accountant to help him legally minimize his liability to 20 the Internal Revenue Service? Sure. Does he have a right 21 to do that? Absolutely. Does he have a right to say to 22 the IRS this is how you view these documents, this is how 23 you view these dollars, this is not income, these are 24 loans, he doesn't have to put that forward? Sure, he 25 does. That's his obligation and we know that. We know


1 that from a number of things in this case. 2 One thing we do know, and you'll know again on 3 Thursday when Judge Spatt gives you the law, is there is
4 no requirement for either Mr. Reffsin as the accountant or
5 for that matter Mr. Gordon as the taxpayer to make it easy
6 for the IRS. Lord knows they can take as much as they
7 want anyway, but you don't have to go with them with that
silver platter and say, here's everything I have, now
9 leave me alone because I have nothing left. You don't
10 have to do that. You don't have to make it easy for
11 them. That doesn't mean that you can commit a crime but 12 it does mean that you don't have to tell them anything 13 you're not required to tell them and it does mean that if 14 there are two interpretations of how a dollar amount 15 should be treated, whether it should be income or a loan 16 and there is a reasonable way for you to say it is a loan, 17 you can do it. You don't have to go along with what they 18 say it is. They have their interpretation, you have your 19 interpretation, you don't have to buy what they're 20 selling. 21 The government cannot convict Marty Reffsin with 22 conspiracy with Bruce Gordon to defraud the IRS unless 23 they can prove beyond a reasonable doubt, shared the 24 intent and acted together by deceitful and dishonest means 25 to hide their income from the IRS. If Marty Reffsin did


1 what was in good faith, if what he did was done on a 2 reasonable reliance on his understanding of the law, if 3 what he did was done without a dishonest intent, then he
4 is not guilty.
5 Now, let's talk about some of these documents
6 that the government puts forward to show that there's a
7 conspiracy, to show that they attempted to evade taxes, to
show that these returns are false. The big thing about
9 the false returns is that the government says that what
10 Gordon called a loan was really income. The government
11 says it's income because they didn't intend to pay it 12 back, that it's income because he took it and used it to 13 live on. Well, it's income if it's not a loan, I concede 14 that, but have they proven to you beyond a reasonable 15 doubt that these, all of these fancy charts that show 16 hundreds of thousands of dollars worth of experiences paid 17 by Who's Who Worldwide on behalf of Mr. Gordon, those are 18 the numbers that Revenue Agent Rosenblatt says was 19 income. That's the basis of the false return charge. 20 That's the basis of the charge against Mr. Gordon that he 21 filed the false returns and the basis of the charge 22 against Mr. Reffsin that he assisted in the filing of the 23 false returns. But there's two ways to look at it. 24 Now, Mr. Reffsin, of course, testified that those 25 amounts were loans. I grant you that Mr. Reffsin is a


1 defendant and I grant you that Mr. Reffsin has an interest 2 in the outcome of this proceeding more than any one of us, 3 I dare say. But just because Mr. Reffsin has an interest
4 in the outcome of the proceeding doesn't mean that he's
5 going to violate the oath that he took as a witness. He
6 took the same oath as every government witness took and he
7 swore to tell you the truth. I submit to you that he did
and I submit to you when you analyze his testimony and you
9 evaluate his demeanor using the tests that you use every
10 day in deciding whether somebody is telling you the truth,
11 you are using it now when you listening to me, I hope, you 12 used it this morning when you listened to Mr. White and 13 you used it every day of the last two and-a-half months, 14 listening to those witnesses and deciding which ones of 15 them were telling the truth, as I suggest that they 16 weren't all, but when you examine Mr. Reffsin's testimony 17 I think you will find that he's an honest man. 18 He came here and he told you the truth. Told you 19 his interpretation and his interpretation differs from 20 Mr. Rosenblatt and Mr. Rosenblatt is an honest man too, 21 but Mr. Reffsin's honestly-held belief, Mr. Reffsin's 22 honestly put forward position that these dollar amounts, 23 these expenses that were paid by the corporation for Bruce 24 Gordon that they were loans, you believe, and I suggest 25 you should, that his position, Reffsin's position with


1 respect to that is an honestly-held belief, then he has 2 acted in good faith and good faith is an absolute defense 3 in this case. The Judge will tell you that, he will give
4 you the elements and he will tell you how to evaluate that
5 and he will tell you one more thing.
6 He will tell you that we do not have to prove
7 that Mr. Reffsin acted in good faith. He will tell you
that Mr. White, that the government must disprove that,
9 the government must prove lack of bad faith, lack of good
10 faith, excuse me, beyond a reasonable doubt. The
11 government has to establish that Reffsin acted evilly. 12 The government has to establish that he acted not out of 13 good faith and they have to prove that to you beyond a 14 reasonable doubt. If they cannot do that then you must 15 acquit him. 16 Mr. Rosenblatt, I suggest, backs up our 17 position. Mr. Reffsin says they were loans. Why were 18 they loans? They were loans because the corporation paid 19 the expenses, Mr. Gordon intended to pay it back and in 20 fact there were repayments. There's that $235,000 21 repayment in January of 1993 from Grossman. That's a 22 repayment. That substantially reduced the then 23 outstanding loan balance, although it did increase later, 24 but that's a repayment and that's one of the factors. 25 You know, looking at it in 1998 and saying, well,


1 he left us with a half a million worth of debt there, he 2 left us a half a million that he owes these companies, 3 that's not the situation as it existed back in 1991 or
4 1992 or 1993.
5 Let me show you my puny little chart. My puny
6 little chart which I know you can't see, but that's the
7 best I can do for now. You all have copies of this
someplace because I know we handed them out. But this
9 puny little chart shows that the loan balance at the end
10 of 1989 was all of 1,000 bucks, that it increased in 1990,
11 but not by that much, and in 1991 there's a big jump and 12 in 1992 there's another big jump, but then in 1993 there's 13 a tremendous payment, $235,000 is a lot of money. Then in 14 1994 there's another reduction, net for the year, it 15 leaves a big balance, but you have to remember that 16 there's a factor here. What comes into play now in 1994 17 when there's this big balance after these two big credits 18 is that Who's Who goals brought because of the Reed 19 litigation and when Who's Who goes bankrupt, everything 20 gets put on hold because the bankruptcy interferes with 21 the business of Who's Who Worldwide and then Reed's 22 attempt to insert a trustee into the picture makes it 23 worse. 24 I'm not going to go into detail about that 25 because I know Mr. Trabulus will cover all of that stuff


1 tomorrow, but what happens is once Who's Who goes bankrupt 2 they are scrambling, everything is under the control of 3 the bankruptcy court as far as Who's Who is concerned and
4 the loans that are on the books can now not be converted.
5 You will recall that Mr. Reffsin testified that it was his
6 intention, that he told Mr. Gordon in 1992 and 1993,
7 Bruce, you have to clean this up, you have to make some
payments back. We know they are loans, well, they are
9 loans. There is nothing wrong with taking the money out
10 of a corporation by borrowing it from the corporation as
11 long as you will pay it back at some point and you can pay 12 it back by physically putting money back into the 13 corporation or you can pay it back by calling it salary 14 and paying taxes on it at that point in time, making the 15 bookkeeping entry and in fact that was done at one point 16 in time. 17 At the end of the year there was $51,000. This 18 was at the end of 1993. At the end of 1993 there was a 19 $52,000 conversion of the outstanding loan balance to 20 income to Bruce Gordon, paid taxes on that money, Maria 21 Gaspar testified about that. There were no dollars that 22 changed hand at that point in time. That was simply a 23 recognition of income. Mr. Reffsin testified about that 24 as well and so did Agent Rosenblatt. 25 Agent Rosenblatt said that taking loans from the


1 corporation is very common, happens all the time. 2 "Question: Is it a common practice for a closely 3 held corporation to lend money to its officers or
4 shareholders?
5 "Answer: Yes, it's a common practice.
6 "Question: In fact, it's a way for officers or
7 shareholders to take compensation over and above W-2
compensation; is that correct?
9 "Answer: It's a way for them to get money.
10 "Question: So they take that loan and ultimately
11 either pay it back or call it what it really is --" 12 THE COURT: You have to slow down considerably if 13 you want the jury to understand what you are saying. 14 MR. WALLENSTEIN: Sorry. 15 "Question: So they take a loan and either pay it 16 back or call it what it really is which is salary and pay 17 taxes, correct? 18 "Answer: Yes. 19 "Question: And that's not uncommon, is it? 20 "Answer: No. 21 "Question: It's not improper either, is it? 22 "Answer: No." 23 So Rosenblatt says it is okay to do it that way. 24 Now, Mr. Rosenblatt says, among other things, 25 that his computation of this additional taxable income is


1 based on his belief that the items are income and he 2 agrees that other people might call it a loan and he said 3 so.
4 "Question: Would it be a fair statement that
5 there might be another revenue agent that would disagree
6 with you?
7 "Answer: Yes, that's possible.
"Question: Would it be a fair statement that
9 attorneys, accountants, tax preparers might disagree with
10 you?
11 "Answer: Yes, that's possible." 12 That's what he said. And he said if in fact 13 those items were determined to be loans they would not be 14 income to Bruce Gordon. He said, yes, that's correct. 15 I submit to you that Mr. Rosenblatt is an honest 16 man. He has an honestly-held belief that the money that 17 Bruce Gordon borrowed from Who's Who Worldwide is income 18 to Bruce Gordon. He's entitled to that belief. 19 Martin Reffsin is also an honest man and he has 20 an honestly-held belief that those funds borrowed by Bruce 21 Gordon from Who's Who Worldwide are a loan, applying some 22 of the same factors that Mr. Rosenblatt used. For 23 instance, repayments. 24 Well, we see the repayments. Well, you could if 25 you could see the chart, but you know there are


1 repayments, we've talked about them. One of the factors 2 that Rosenblatt talked about as being a key was the 3 passage of time so that in 1993 and 1994 you could not say
4 this is income because there's an insufficient passage of
5 time for you to say that he did not intend to pay it
6 back. Granted, it's a lot of money but he needs time to
7 pay back a lot of money, whether in small increments,
large increments or by recognition of income at the end of
9 a taxable year. Time is what is required and time is what
10 the government is not giving credit for because at the
11 time that the offers and compromise were submitted, at the

12 time that the collections were submitted, at the time that 13 the tax returns were filed, Marty Reffsin didn't have the 14 benefit of hindsight. He didn't have the benefit of 15 analyzing these books in 1996 or 1997. He's preparing 16 those returns in 1992, 1993, 1994. He's not looking at 17 them from 1997 and saying five years have past, where is 18 the money? He's looking at it in 1993-1994 saying six 19 months have past, he will pay it back. 20 He had a conversation with Bruce Gordon, he said, 21 Bruce, you have to clean this up. If by '94 you haven't 22 made some substantial payments here we'll start 23 recognizing this income so we can get this money paid 24 back. Does that sound like a co-conspirator? Does that 25 sound like a guy who is out to stick the IRS? That sounds


1 like an accountant who is saying to his recalcitrant 2 narcissistic client when he wants to do and does whenever 3 he wants to do it and takes what advice he wants to take,
4 that's a guy saying to Bruce Gordon, this is what you will
5 have to do, if you don't it is at your peril, but it
6 shouldn't be at Marty's peril (indicating.)
7 One of the things that the government says is a
bad act here, an act in furtherance of this conspiracy is
9 the submission of the offer and compromise. Now, the
10 offer and compromise is a concept that is foreign to most
11 of us. It's apparently foreign to Mr. Rosenblatt to some 12 extent as well because he says he didn't handle it. He 13 has always been in what the new consumer friendly IRS 14 calls the "examination division" but which we all 15 recognize as being the "audit division" which are the guys 16 that come in and tear your books apart looking for every 17 last penny. 18 Mr. Gagliardi, on the other hand, he's the guy 19 that handled the offer and compromise. And interestingly 20 enough Ms. Peters, do you remember her, January 14th, the 21 first witness who testified in this case, she was the 22 revenue officer who said that she handled the initial 23 collection information statement, the initial attempt to 24 collect the money, she is the one who made the $100 a 25 month agreement with Bruce Gordon and let me point out on


1 that score that Mr. Reffsin had nothing whatever to do 2 with that entire arrangement. He also had nothing 3 whatever to do with the collateral agreement with the
4 Justice Department. That was handled by some white shoe
5 law firm. They are the guys who made that deal with the
6 justice department. Can't leave it on Mr. Reffsin. He's
7 coming in after the fact saying this is the situation as I
find it, how can I present this in the best light for my
9 client?
10 By the way, Mr. Rosenblatt said that that is
11 perfectly appropriate and Mr. Rosenblatt, you will recall, 12 was qualified as an expert on federal tax matters, even he 13 said he never handled an offer and compromise, he knows 14 what they are, and he understands the role of an 15 accountant in dealing with the Internal Revenue Service. 16 And Mr. Rosenblatt said: 17 "Question: The accountant acts on behalf of the 18 taxpayer; is that right? 19 "Answer: That's correct, he represents the 20 taxpayer. 21 "Question: And what he's conveying to the IRS is 22 the taxpayer's position; is that correct? 23 "Answer: That's correct. 24 "Question: Basically it's the accountant who is 25 on his knees in your office saying please don't make him


1 pay at all; is that right? 2 "Answer: It could be that. 3 "Question: And in that circumstance, the
4 accountant, whoever is putting forth the taxpayer's
5 position, is an advocate, correct?
6 "Answer: Yes, that's correct.
7 "Question: And he's going to portray the
taxpayer's position in the best possible light for the
9 taxpayer so as to persuade the kindly IRS agent that he
10 really can't afford to pay the whole obligation, correct?
11 "Answer: Yes. 12 "Question: And in fact, that's his function, 13 isn't that so? 14 "Answer: Yes. He's supposed to be honest and 15 present the best possible case." 16 That's what Rosenblatt said. So it's clear that 17 wh at Reffsin did was exactly what he was supposed to have 18 done. 19 Now, let us talk for a minute about this offer 20 and compromise. What does it mean? It's an offer to the 21 Internal Revenue Service, that's what it is, it's an 22 offer, it's a negotiation, it's the first shot. It's I 23 owe you 3 and-a-half million but I'm 60 years old and in 24 order to pay 3 and-a-half million to the IRS I have to 25 earn $7,000,000, because I have to earn tax in addition to


1 paying 3 and-a-half million dollars, and I still have to 2 live, and that doesn't mean wearing Armani suits and that 3 means eating cat food, and that's what the IRS wants you
4 to do, eat cat food, that's their position, we want every
5 last dollar. That's why the 433 A's, the collection
6 information statements are not fraudulent. Because what
7 is on there or not on there is not material to the
issues. Let me tell you why.
9 In evidence you have Defendant's Exhibit EC,
10 those are the instructions for the offer and compromise
11 which we blew up and I think we all have copies. When you 12 look at them and read them it has some very, very 13 interesting language. It says here, "our goal is to 14 collect what we can at the earliest possible time with the 15 least cost to the government." It says "how to figure an 16 acceptable offer." They tell you how to figure it out. 17 Do you know what it says? It says, number one "we want 18 the liquidating value of your assets, the value if you are 19 forced to sell." What does that mean? It means give us 20 your house, it's going on the auction block. Your 21 $200,000 house is going to the highest bidder which will 22 be 50 grand, we'll take it, we'll apply it to your tax 23 liability and you still owe us the rest, unless we have a 24 compromise. That's what a forced sale is. It means the 25 IRS comes in, they slap a document on your front door that


1 says "seized" this is now the property of the Internal 2 Revenue Service. Take your kids, your dog and get out. 3 That's what it means. Now they sell the house. And that
4 value, this is how to figure an offer. They take that
5 value, what they could get if they threw you out of your
6 house tomorrow and they subtract from that debts against
7 specific assets that have priority over the IRS. Would
you like to guess how many debts have priority over the
9 IRS? Well, your mortgage is one. Maybe, maybe your car
10 loan, unless there is enough equity to pay off the loan
11 and still leave a couple bucks for the IRS. A judgment 12 against the specific asset, a debt secured by a specific 13 asset, we don't want to do a lecture on commercial law 14 here but there aren't that many. All of those debts to 15 American Express, everything you owe on charge cards, 16 everything you owe your ex-wife, everything you owe your 17 brother-in-law, everything you owe your company, all of 18 that comes after the IRS. They want your first dollar and 19 your last one and every one in between. That's how we'll 20 figure. What do I have here? I have $100,000 worth of 21 property and if you force me to sell it it will be worth 22 50 grand, so I'll take that number and I'll subtract from 23 that my mortgage which is $48,000, and I have $2,000 24 left. That's what I'll offer the IRS. 25 It says here specifically, "the following


1 examples are debts which you should not subtract because 2 the IRS has priority over them." What does that mean? In 3 English, which this form is supposed to be written in,
4 that means "we don't care. We're not interested in how
5 much you owe everybody else. We don't care what you owe
6 American Express, we don't care what you owe your
7 brother-in-law, we don't care what you owe to Who's Who
Worldwide. We care what you have, not what you don't
9 have. Not what you owe. What can we get." That's the
10 IRS, the friendly IRS.
11 Now, what shouldn't you subtract. "Amounts you 12 owe on credit cards." It's right there in plain English. 13 "Amounts you owe on credit cards." Don't bother tell 14 telling us about those. We do not care. 15 "Loans you secured" means you got them, "without 16 pledging assets as security." For instance, any money you 17 might have borrowed from a corporation, any money you 18 might have borrowed from your brother-in-law. Don't 19 bother telling us about that stuff, we don't care. Any 20 amount you borrowed after we recorded a notice of federal 21 tax lien. Well, there's no tax liens in this case, 22 there's an ancient one but it is not important. A tax 23 lien is where the IRS comes in and grabs what you have, 24 your bank accounts and your house and all of these things 25 and they put a lien on it. The lien says before you can


1 touch this, before your creditors can touch this, guess 2 who gets it? So if we put a federal tax lien against your 3 property or against your line of credit, anything you
4 borrow after that, we couldn't care less because we come
5 first, we're the IRS. They don't care. It's right here
6 in black and white. They don't care. They want to know
7 what you have.
You know how we know that? Robbie Peters said
9 that, Robbie Peters, that's the first witness back in
10 January, that's how you got off on this tangent, I asked
11 they are this specifically, I said, how far back are you 12 looking? And her answer was "I look for current 13 information. I'm in collection, I look for assets." We 14 don't care about debts, we don't care about liabilities, 15 we don't think what anybody else thinks you have to give 16 to them, we're the IRS, we come first. That's what this 17 is all about. That's why when you look at those 433s that 18 Mr. White blew up so beautifully, in fact, Agent Jordan, 19 would you be so kind. May I have one? 20 AGENT JORDAN: Sure. 21 MR. WALLENSTEIN: I don't know the exhibit 22 numbers, this is Exhibit 404. Of course he gave me the 23 one that Mr. Reffsin had nothing to do with, but that's 24 okay because the principal is the same. 25 When you start looking at liabilities, when you


1 are the accountant and you are looking at liabilities, 2 bank cards, all of that stuff and you're filling out the 3 collection information statement to go along with the
4 offer and compromise, you know, you know because you're an
5 accountant, a CPA for 20 years and you know what the IRS
6 is looking for and the IRS knows what they are looking for
7 to. They are looking to see what you have. They don't
care that you owe American Express, did I say that enough
9 times?
10 It doesn't matter what is here, it's not
11 material, and the reason it's not material is because the 12 IRS doesn't care. It doesn't have priority. The IRS 13 comes first. So it's not material. You could owe a 14 billion. If you owe them one buck and the billion is 15 unsecured, they get the first dollar. It's more likely to 16 be the other way around though. 17 Now, Mr. White says that the necessary living 18 expenses part here (indicating) is part of his conspiracy 19 and, in fact, Mr. Gordon is charged separately with filing 20 false collection information statements. Mr. Reffsin is 21 not charged with that, but they are charged as part of the 22 conspiracy. Of course the fact that Mr. Gordon is charged 23 with it separately means you will have to listen to 24 Mr. Trabulus who will tell you all of this tomorrow too. 25 But the fact is that in evidence here we have


1 Defendant's Exhibit ED. Now, what is that? That's 2 another IRS official form, "how to prepare a collection 3 information statement." Now, isn't it logical that when
4 you get a document from the Internal Revenue Service that
5 tells you how to fill out an Internal Revenue Service
6 form, that if you follow the instructions they give you,
7 that everything will be okay? Doesn't that make sense?
If they say to you, "this is how you figure an offer" and
9 you do it that way, what's wrong with that? If they say
10 to you, "don't include this, we don't care," have you done
11 something wrong by not including it? 12 When they say to you how to prepare a collection 13 information statement, wouldn't you assume this is how 14 they want you to do it? Doesn't that make sense? To bad 15 the record doesn't get the sarcasm. 16 "Necessary living expenses." The key word in 17 that phrase is "necessary." It says here "expenses must be 18 reasonable for the size of your family, your geographic 19 location and your unique circumstances" right there in 20 plain English. Now, what does that mean? Does that mean 21 tell us what you really spend or does that mean tell us 22 what's necessary? For a family of four you need more 23 money than a family of two, it makes sense. For a single 24 person you need less money than for a family of four. 25 To give you an example how they mean what she


1 say, right down here it says under item 48, "medical. 2 Show recurring medical expenses only. Do not include an 3 occasional medical expense." Like if you happen to get
4 your teeth fixed or you happen to go to a doctor because
5 you had a particular acute illness but the doctor gave you
6 this new medical drug that cured your illness in a week
7 and cost you $10,000, you can't put that down there as a
necessary living expense because it's a one shot deal.
9 It says "recurring medical expenses only." What
10 does that mean? It means your medical premiums you pay
11 every month, it means if you go to the doctor on a regular 12 basis, it doesn't mean a one shot deal. So you get sick, 13 go to the doctor once in three years, you can't put down 14 that 10 grand because that is not a recurring medical 15 expense. Does that make any sense? Is going to that 16 doctor in that circumstance necessary? Sure. But they 17 tell you don't put it down. That tells you that they 18 don't care. They don't care. They want to know what does 19 this mean, "necessary living expenses." Does that mean I 20 would like to live in a $20,000 a month mansion? No. 21 Necessary means you can live in a car, you can live in a 22 card board box, take a $100 a week room. Necessary means 23 that you can eat cat food because the rest of the money 24 has to go to the IRS. That may be a bit of an 25 overdramatization, oversimplification, but they don't


1 care. 2 If you spend $100,000 a month but you could live 3 on $5,000 a month, that document better show 5,000, not
4 100,000, because the rest of it is for the IRS. What do
5 you need to live, because we're taking the rest. That's
6 what that form means. "What do you need to live" because
7 anything you don't absolutely need is going to the IRS.
Sell the Cadillac, by a Hundai, maybe a Kia.
9 Now, Mr. Gagliardi testified. Mr. Gagliardi
10 talked about the offers and compromise and he talked about
11 all of these things and he said, you know, I didn't know. 12 Gordon said in the forms that Reffsin submitted, they said 13 he's only got this, he's only making that. They didn't 14 tell me about anything else. But you know what -- do you 15 have that offer and compromise (addressing Mr. White.) 16 Here's the offer and compromise, Exhibit 420. You can 17 take all of these exhibits with you, by the way. I'm not 18 sure that you want to, but you can. 19 He says, Gagliardi says, that he didn't know 20 about Who's Who Worldwide and he couldn't get Who's Who 21 Worldwide's income so he couldn't figure out, couldn't get 22 into the books of Who's Who Worldwide to know that Bruce 23 Gordon had access to money. But you know what? That's 24 just not so because attached to the compensation -- I'm 25 sorry, attached to the offer and compromise and part of


1 the offer and compromise which Mr. Gagliardi got was 2 number one, this collateral agreement with the Justice 3 Department that says, and Mr. White hammered on this this
4 morning, that the government gets half of every dollar
5 that Bruce Gordon gets over $50,000, and that agreement is
6 there, Gagliardi knew that, but in addition to that he had
7 the compensation agreement.
Now, you know I listened to Mr. White for three
9 hours this morning and I didn't hear those two words
10 together in the same sentence once. He never mentioned
11 the compensation agreement and the compensation agreement 12 that Mr. Gagliardi had as part of the offer and compromise 13 that they say was so fraudulent and hid all of his assets, 14 says very clearly. This is an agreement between Bruce

15 Gordon and Who's Who regarding his compensation for 16 functioning as president and chief executive officer, the 17 responsibility for running the day-to-day operations. 18 Does that tell you that Bruce Gordon is in control of 19 Who's Who Worldwide? 20 Now, we know, hindsight, 1998, having heard all 21 of these witnesses over the last two and-a-half months, we 22 know that Bruce Gordon ran every aspect of Who's Who and 23 it lays out what his compensation will be, how much money 24 he will get and so on and so on, so they knew, Gagliardi 25 knew that Gordon was in control and command of the


1 day-to-day operations of Who's Who. Why is that 2 important? It's important because Gagliardi said he did 3 all of these things in the investigation of the offer and
4 compromise. He researched data bases, went to the Motor
5 Vehicle Bureau, County clerk's office, and he dug deep but
6 he didn't get very deep, didn't get to the bottom of the
7 stack of the papers because he didn't see the compensation
agreement and if he did he ignored it.
9 He went to his house, there wasn't anybody home
10 but he went to the address that he had for Bruce Gordon.
11 And he said specifically, his testimony on page 308 of 12 this close to 10,000 page record that we have here, he 13 said that he understood that Bruce Gordon was in control 14 of Who's Who Worldwide, that he was the president, the 15 director, a shareholder and all of those things and he 16 said I couldn't get the Who's Who records. 17 Well, he didn't get the Who's Who records because 18 if he had gotten Who's Who tax returns he would have seen 19 the percentage attributed to Mr. Gordon on the corporate 20 returns, the percentage of stock and he would have seen 21 the income of Who's Who and he would have been able to 22 say, hey, I want some more. Your offer is not good 23 enough. Offer is the key word there. That's just what it 24 was. It was an offer. They didn't have to accept it. 25 Ultimately they didn't accept it, but they could have said


1 we'll take your $150,000 or they could have said, you know 2 where you can put your $150,000, we want the whole 3 3 and-a-half million or they could have wound up anywhere
4 in between, it was a negotiation.
5 Mr. Reffsin testified that he did not expect the
6 IRS to accept $150,000. He figured that it was going to
7 come out somewhere between $500 and $1,000,000 that Gordon
was ultimately going to compromise his liability for and
9 it was going to be paid out. But it's not his function
10 (indicating) to be an IRS agent, that's for Rosenblatt and
11 Gagliardi. It's not his function to take the IRS's 12 position, it's not his function to make it easy for the 13 IRS and he has no legal obligation to do so. He's got a 14 legal obligation to his client, to present his client's 15 position in the best possible light to the Internal 16 Revenue Service and Mr. Rosenblatt said too (indicating) 17 he's got a right to say, hey, all we'll give you is 150 18 grand, that's what we have. You have all the information 19 you need to evaluate this offer. 20 You've got 433 A's that follow your 21 instructions. You've got 433 A's that lay out what he 22 has, what he spends and what he owes in accord with what 23 Marty Reffsin believes, honestly and in good faith are the 24 things that the IRS is looking for. And we know that 25 because we've seen these instructions.


1 Gagliardi had what he needed. Did he get what he 2 needed? No. Why not? Got me. All he said was I could 3 not get the records of Who's Who Worldwide, but you know
4 what? It was another witness, Mr. Rosenblatt. And
5 Mr. Rosenblatt said:
6 "Question: If a revenue officials such as
7 Mr. Gagliardi feels he needs more documentation, does he
have the power to ask for it?
9 "Answer: Yes, he does.
10 "Question: And if he's not getting it from the
11 taxpayer, does he have the authority to obtain it from 12 other sources? 13 "Answer: Yes. 14 "Question: If, for instance, he needs a return 15 of a corporation in which the taxpayer is a shareholder or 16 an officer and the taxpayer refuses to produce the 17 returns, could he go to the corporation to get it? 18 "Answer: Yes. 19 "Question: Can he get them from the IRS's own 20 files? 21 "Answer: Yes. 22 "Question: Does he need any particular authority 23 to do that or can he simply say I need these in connection 24 with this investigation and therefore please provide these 25 copies?


1 "Answer: He has to have an open investigation to 2 be able to show that it's related." 3 He has an open investigation. He has a
4 compensation agreement submitted by the taxpayer that says
5 I'm in control. Does that make it related? Sure, it
6 does, by any stretch of the imagination, by any definition
7 of the term, it's related.
What does Gagliardi do? He does nothing. He
9 says, I didn't have the return so screw it. He doesn't
10 bother. You will send Marty Reffsin to prison because
11 Gagliardi didn't have to get the return that he didn't 12 bother to get and he didn't get that and says this whole 13 thing is a fraud. There's no crime here, there's no 14 conspiracy here. Reffsin and Gordon didn't get together 15 and decide to stick it to the IRS. Reffsin advocated 16 Gordon's position. Gordon's position is I owe the IRS a 17 ton of money, how can I pay less? Reffsin says, we'll 18 make an offer. We'll follow their instructions. Now, we 19 know that they are not interested in anything that they 20 don't have priority over and we know they are interested 21 in only necessary expenses. We'll put down that. I know 22 what they'll look at, what they are interested in. I'm 23 Mr. Peters, I'm in collections, I look for assets. 24 There's no crime here. The crime here is that Marty 25 Reffsin is on trial, that's the crime.


1 There's no conspiracy here to defraud the IRS and 2 do you know what, I have just demonstrated to you for the 3 last half-hour why there is no crime here, but I don't
4 have to do that. I don't have to do anything. Mr. White
5 has to prove to you that there is a conspiracy between
6 Marty Reffsin and Bruce Gordon to defraud the IRS or you
7 have to find Mr. Reffsin not guilty of that charge.
That's the law.
9 I've talked enough about the IRS. We all know
10 they're the bad guys. Let's talk about the obstruction of
11 justice counts. 12 Now, there's a count here of obstruction of 13 justice that pertains to Mr. Reffsin and it has to do with 14 the submission of the logs to the bankruptcy court. 15 Speaking of bankruptcy, Jack Hall testified, do 16 you remember him? He's the first witness I called. Jack 17 Hall is an attorney, a partner in the law firm of Shaw, 18 Licitra and a couple of other people and he's a bankruptcy 19 expert. He testified that he handled bankruptcies and 20 retained Marty Reffsin to assist him in bankruptcies and 21 he has referred Marty Reffsin to other attorneys and he 22 said that Marty Reffsin has a good reputation in the 23 professional community for honesty and for truthfulness. 24 Judge Spatt will give you an instruction on how 25 you view character evidence and he's going to tell you


1 that a character witness can help you assess Mr. Reffsin's 2 credibility, help you decide whether or not Mr. Reffsin 3 has been proven guilty beyond a reasonable doubt because

4 even if there's evidence that when you get together and
5 talk about it leads you to say, well, you know, I'm not
6 sure. Mr. White made some valid points. I think maybe
7 Reffsin, maybe he was involved with Gordon, maybe he did
conspire? Then you think about Jack Hall. You say wait a
9 minute, is Reffsin the kind of guy who would do that, is
10 that the type of person he is? If the testimony of that
11 witness, Jack Hall, makes you think twice and makes you 12 say you know, this guy has a good reputation, he's 13 respected in his field, I'm not sure he's the kind of guy 14 who would do that? What does that say? That says 15 reasonable doubt and reasonable doubt says you must 16 acquit. 17 I got off on that tangent because we were talking 18 about the bankruptcy court and the obstruction counts. 19 The only witness, the only witness who says that 20 Marty Reffsin obstructed justice by being involved with 21 the preparation of those admittedly phoney logs is Maria 22 Gaspar. In order for you to convict Marty Reffsin of 23 obstruction of justice, you would have to be convinced 24 beyond a reasonable doubt that Maria Gaspar is telling you 25 the truth, the whole truth and nothing but the truth and


1 that Jack Hall is not telling you the truth about Marty's 2 character and that Marty lied to you when he said he had 3 nothing to do with it. Because she is the only one who
4 says that he did. If you have a doubt, the slightest
5 reasonable doubt about Maria's veracity, about Maria
6 Gaspar to shade the truth, tell the truth or lie to you,
7 then you have to acquit Marty Reffsin. And having said
that I could sit down right now because I think her
9 testimony speaks for herself, of course I'm not going to
10 do that.
11 There's no dispute about certain of the facts 12 here. We know that the logs were ordered to be produced, 13 we know that the logs which are in evidence here -- do you 14 have those, Mr. White -- were, in fact, produced and we 15 know that they were created by Maria Gaspar in her own 16 handwriting. 17 She says in a nutshell and you can have all the 18 testimony if you want, she says that in the car on the way 19 from the bankruptcy court to Lake Success in Mr. Reffsin's 20 car with Mr. Reffsin's driving and Mr. Gordon in the front 21 seat and she in the back seat, both of them together 22 ordered her to produce these logs, to produce these phoney 23 logs and they gave her names and they gave her people and 24 they gave her dates and told her about the meetings. 25 That's what they say.


1 Now, the name that appears most often in here is 2 Bruce Gordon and certainly that is a name that Mr. Reffsin 3 knows. But I submit to you that Mr. Reffsin has no reason
4 to know any of the other names that appear in this log and
5 when pressed, when I asked Maria Gaspar what names did
6 Mr. Reffsin give you, she couldn't give me an answer. The
7 only name that she could attribute to Marty Reffsin was
Debra Benjamin. Yeah, he knows Debbie Benjamin but that's
9 the only one he knew and that's the only one that Maria
10 can give you. But she said Reffsin gave me names and the
11 names that appear here, Susan Konopka, she testified. She 12 said she doesn't know him (indicating.) Tracey Colletti, 13 she testified. She said she doesn't know him. Elizabeth 14 Sautter, she didn't testify. She is not sitting here. 15 Ask yourselves why not? 16 You've heard all about Elizabeth Sautter. In 17 fact, there was some testimony that she was the one who 18 kept the logs. How come she is not here? Either there or 19 there (indicating.) 20 Maria Gaspar, well, that's certainly a name that 21 Mr. Reffsin knows, and Maria Gaspar put her own name down 22 here. She said she was at a meeting that she wasn't at. 23 You don't see the name Marty Reffsin any place. Marty 24 Lamb, Tara Green, sales strategies. 25 Reffsin is an accountant, he has his own office,


1 his own practice, he's not an employee of Who's Who, he's 2 not there daily, he's there on a monthly basis to do the 3 bank recs. Most of the time it is his people. He doesn't
4 know these people except he's a codefendant. The only
5 reason he knows these people he has been thrown into this
6 indictment with them.
7 Gaspar again, Elizabeth Sautter again. Maybe
these are the ones that Elizabeth Sautter created. Maybe
9 Elizabeth Sautter is the one that gave Maria Gaspar these
10 names. If you have to ask yourselves these questions, you
11 have a reasonable doubt. 12 Are these names that Marty Reffsin would have 13 known that he would have given? No. I know you could 14 answer that yourselves but I thought it was important. 15 Margaret -- I don't even remember Margaret's last 16 name, there was some testimony about Margaret. 17 Susan, Tracey, Debra Benjamin, Michael Powers. 18 I'll give this to Mr. Neville, maybe he can find Carl 19 Roper in here. 20 Marty Reffsin doesn't know these names. He 21 didn't give Maria Gaspar those names, she lied. I did

22 what Mr. White said I would do, he said I would call her a 23 liar and I did. But she is, she lied. Why? Because she 24 made up that document. This is her handwriting. She 25 created this out of whole cloth. She didn't fax this to


1 Marty Reffsin for approval. He had no way of knowing 2 whether these meetings took place. 3 He saw one sheet of paper, you heard himself, I
4 saw a sheet of paper, it had a couple of names and dates
5 and I called her up and said, Maria, that's not what the
6 Court ordered, they want details. That's not enough. Now
7 she has waited a month. She has got to cover her butt
because she didn't do what she had to do. Why didn't she
9 do it? She didn't do it because she knew Bruce Gordon
10 didn't want it done. But is there any evidence that he

11 told her not to do it? Is there any evidence that Reffsin 12 told her anything with respect to the logs other than what 13 she said? 14 Marty testified that the car ride was five 15 minutes. It went from the bankruptcy court over here in 16 Westbury to Neil Flaum's office in Mineola. He remembers 17 that because Bruce didn't know where the bankruptcy court 18 was, didn't want to drive there. So Bruce has Maria drive 19 him to Neil's office and Marty, whose office is in 20 Jericho, meets them there and takes him over to the 21 bankruptcy court. 22 It's five minutes from Merrick and Old Country 23 Road to Old Country Road and Glen Cove where Neil Flaum's 24 office is, that's with the traffic from Fortunoff's. So 25 the 20 minute car ride that Maria is talking about is the


1 ride from Lake Success to Mineola. But Marty is not in 2 the car. It's Maria and Bruce. In the five minutes it 3 takes to get from the courthouse back to Flaum's office,
4 Bruce is ranting and raving. "I'm not giving them the
5 logs. I don't want to give them the logs." I'm sure that
6 the language was a bit more colorful than that. "I'm not
7 letting Reed Elsevier know what I'm doing in my business."
Reffsin's response is, Bruce, you have to. Does that make
9 him guilty of obstruction of justice? "You have to,
10 Bruce, the Court said do it, now just do it. Bite the
11 bullet." Marty gets out of the car, not privy to the rest 12 of the conversation, but you can all hear it, 20 minutes 13 from Neil Flaum's office to Lake Success, I'm not redoing 14 those -- you get the picture. You know where it is going. 15 You know, you know what that conversation is 16 like, I'm screaming and yelling, I'm not producing the 17 logs. So Maria knows she can either do the logs that she 18 heard the Court say do or she can keep her job. So she 19 doesn't do the logs. That's not on him. That's not on 20 Marty, he's got nothing whatever to do with that. Maybe 21 that's on Bruce, maybe that is on Maria, but that's not on 22 Marty Reffsin. 23 Now, now it's show time. The Court is saying 24 where are the logs? Now, Neil Ackerman who can't get 25 ahold of Bruce Gordon says to Marty Reffsin, Marty, where


1 are the logs? Bruce will not return my calls. Marty has 2 a conversation with Maria and he says, Maria, the logs are 3 due, they are due today. Where are they? And she faxes
4 over a couple of names and dates. And he calls her up and
5 says, what are you kidding? This isn't what they
6 ordered. They want to know who is at the meetings, what
7 the purpose of the meetings are and where the meetings
are? Now Maria has to scramble because she didn't do what
9 she was supposed to do was which keep a log all along. So
10 she creates them and she sends them to Neil Ackerman and
11 Neil Ackerman presents them to the bankruptcy court. How 12 is that on Marty Reffsin? That's the obstruction count 13 that he created those logs. 14 Now, you heard his testimony and you heard her 15 testimony. Why would Maria Gaspar come in here and lie? 16 Why would she come here and say all of these bad things 17 about my client if they weren't true? Let me tell you 18 why. Maria Gaspar thinks she is an accountant. Maria 19 Gaspar says she is an accountant. Maria Gaspar says in 20 Portugal I was the equivalent of a Certified Public 21 Accountant and I was hired as the chief financial officer 22 for Who's Who Worldwide. In fact, she testified under 23 oath at one time that she was responsible for all the 24 financial affairs of the corporation. That was a lie. 25 That was perjury because in here she said "I was never


1 responsible for the financial affairs. I was a 2 bookkeeper. He made me a clerk." She's angry, she is 3 bitter, she is not being used up to her potential. They
4 bamboozled her. They told her that she would be the CFO
5 and put that down on her resume' and she turns out to be a
6 bookkeeper. She said comptrollers, CFO, they make
7 decisions, I didn't make decisions. Didn't have signatory
authority on the checkbooks, Bruce Gordon was the one that
9 could sign the checks. She's mad. She's mad because she
10 wanted to be the CPA and she wasn't. Not only wasn't she
11 but here is the outside CPA who is a CPA, who is a well 12 respected man in his field who taught for the American 13 Institute of Certified Public Accountants and he comes in 14 and says, hey, you screwed up, lady. You made a basic 15 error, bookkeeping 101, debts to the left, credits to the 16 right, you reversed them. They taught you that. You're 17 not an accountant. He didn't use those words but that's 18 the tone, that's the gist, that's the relationship. Maybe 19 he didn't say it directly but Vince Resini did. 20 Vince Resini who is now Marty's partner, a CPA 21 for 20 years himself, Vince came in and Vince said she 22 wasn't much of a bookkeeper. Well, maybe that's why they 23 wouldn't let her be the CFO, but the bottom line is all 24 she knew is when the accountant came in, I'm nothing. 25 She's mad. She has a motive. She is pissed at Reffsin

1 because he's doing what she thinks she should be doing and 2 he is criticizing her work and she doesn't take kindly to 3 criticism. She doesn't take kindly to questions that have
4 to be answered yes or no or otherwise. She has got a very
5 selective memory, did you notice that? Does that give you
6 some doubts about her credibility? When she sits up there
7 and says, if I recall correctly, something tells me that
this is what I heard. What, you have a bird on your
9 shoulder? Either you remember or you don't remember. She
10 is making it up as she goes along.
11 Now, why else does she have a motive to lie 12 here? Because she has to tell you what the government 13 wants you to hear. She has to tell you that Marty Reffsin14 and Bruce Gord on told her to create those logs that she 15 created because if she doesn't tell you that, she is going 16 to jail. She is going to jail. 17 Let me ask you, does her testimony make sense to 18 you? Does it have the ring of truth to you? Does what 19 she said sound like what really happened? 20 Here's a woman, a mother, a wife, bookkeeper, 21 accountant, whatever it is she is doing, in the catering 22 hall, sitting in her office in the catering hall and who 23 comes in, the men in suits and badges. Federal agents. 24 Now, Mr. Jordan is a nice guy but he and somebody 25 else from the Internal Revenue Service Criminal


1 Investigation Division along with a postal inspector who 2 should probably remain nameless, come into her office and 3 she doesn't think anything of this? Give me a break.
4 The second meeting, she still has no clue. I
5 grant you she is not a rocket scientist but can she be
6 that dumb? Does she really think they are not
7 investigating her? Does she really have no clue what this
is all about? They are asking her questions about Who's
9 Who and they don't bring up the logs. Why not? Because
10 the only one who knows that the logs are phoney at that
11 point in time is Maria Gaspar. The government doesn't 12 know it, the government doesn't care, it's not an issue at 13 that point. Maria Gaspar knows that the logs are phony. 14 How does she know? She is the one who phonied them. So 15 now I'll lean it on her. Talk to me, tell me about all 16 the bad things that Bruce Gordon did. Tell me about all 17 the bad things that Marty Reffsin did. 18 She is sitting behind a desk in her own office 19 with three men, federal agents in suits with badges and 20 she is not intimidated? I don't think so. I'd be 21 intimidated. You'd be intimidated. They are not friendly 22 faces when they are out in the field doing investigations, 23 not like our smiling Special Agent here, and I'm not 24 putting him down in any way, shape or form because he's 25 doing his job and doing it well, but when he's sitting in


1 Maria Gaspar's office she is the target of that 2 investigation and now she will get out of it. Let me tell 3 you about these phoney logs that Gordon and Reffsin told
4 me to do, because she knows they want to hear about Gordon
5 and Reffsin. So she pins it on Gordon and Reffsin and
6 once she does that she has to stick with it because it's a
7 crime to lie to a federal agent. So once she has told
them that they have created these logs, if she doesn't
9 stick with that right through to here, she goes off to
10 jail and she knows it. She didn't call her lawyer until
11 the fourth meeting, maybe it was the third meeting, and 12 when they called her lawyer, who she just happened to 13 know, Vinnie Nicolosi, a criminal defense lawyer, she 14 picks up the phone, calls Nicolosi and what does she say? 15 Here, talk to Mr. White, I don't have a clue. Is that 16 real? Is that real? How about Mr. Nicolosi, help me, the 17 Feds are here, make me a deal. I think that's a little 18 more real. She knew what was going on here. She has 19 pinned it on them and she has to stick to it but her story 20 is not consistent. She lied. We know she lied because 21 she testified under oath that she told Susan Konopka, 22 Tracey Colletti and Debra Benjamin that they were in the 23 logs. She said I went into them, they were having lunch 24 and I said, hey, guys, just so you know you were at 25 certain meetings at certain times. Now, wouldn't that


1 evoke a response from Benjamin or Colletti or Konopka? A 2 response akin to Maria, what the hell are you talking 3 about? Or even, okay, Maria, how about giving us some
4 details, so if you need us to back you up we can back you
5 up? Either one of those responses would be appropriate,
6 and gie fact that Who's Who is in bankruptcy, given
7 the fact that people are attending meetings at the
bankruptcy court and other proceedings at the bankruptcy
9 court and gie fact that Maria Gaspar has now come
10 into the room and said in essence "I'm asking you to lie,"
11 don't you think that one of them would have remembered 12 that meeting? But not one of them did. Every one of them 13 said, no, I never had such a conversation with Maria 14 Gaspar. No, she never told me my name was in the logs. 15 Susan Konopka said that. She has got no reason whatever 16 to lie about anything to anybody or about anybody. 17 Tracey Colletti said the same thing. No, I never 18 had that conversation. 19 Debra Benjamin said, no, I never had that 20 conversation. And she would have been in a position to 21 know. She would have been in a position to understand why 22 that was necessary. She was an administrator. And we 23 don't know what conversation Maria may have had with 24 Elizabeth Sautter because Elizabeth Sautter is not here. 25 Maria Gaspar says, and Mr. White made a point of


1 this this morning, Debra Benjamin testified that Maria 2 came out of a meeting with Bruce and Marty and she was 3 upset, on the verge of tears. Well, she doesn't pin down
4 when the meeting was and there was no evidence of what
5 Maria said, only the fact that Maria was upset. We don't
6 know when it was, we don't know what was said inside the
7 office, we don't even know if Mr. Reffsin opened his mouth
or he was sitting in the corner doing a tax return or
9 working on a checkbook or something, we have no idea what
10 went on inside the room that Maria Gaspar was in because
11 she didn't say anything. Debra Benjamin says something. 12 So who knows. Maybe Bruce told her if she didn't shape up 13 he was going to fire her. Maybe Bruce was having a 14 tirade. We've heard some testimony here that he was 15 capable of that. Maybe he was angry about some other 16 reason. 17 Maybe, maybe Mr. Reffsin criticized her work 18 because she was incompetent. We don't know. All we know 19 is she was upset and Mr. White would have you believe that 20 because Debbie Benjamin said that Maria Gaspar was upset, 21 Marty Reffsin created the logs. There seems to be a gap 22 in that logic some place. I don't buy it. 23 At the very, very, very least there is reasonable 24 doubt and, therefore, Mr. Reffsin is not guilty of 25 obstruction of justice.


1 What it comes down to is this. There's a lot of 2 exhibits, there's a lot of evidence, there's a lot of 3 testimony for you to sift through, the tax case, the mail
4 fraud case. There are a lot of things for you to
5 consider. We've been here a long time. Take your time,
6 sift through it all, reed back anything you want read
7 back. The reporter will never talk to me again. Ask for
it if you are not sure. If you don't think that I'm
9 accurate in my recollection of what the testimony was, ask
10 for it, it's in the record. Evaluate it. Judge it.
11 Apply your common sense, apply the life's skills we all 12 have. Every one of us makes important decisions, who consistently outproduce those around them - thanks to shortcuts. Every 13 day. Apply those skills, judge the credibility of the 14 witnesses. Apply the law that Judge Spatt gives you as he 15 gives it to you. He is supreme. What he says goes. 16 Apply that law to the facts that you find. You are the 17 fact-finders. 18 When you've done that for each defendant, each 19 one of these defendants here have to be considered 20 separately and individually as to each count, that's not 21 something you can do in a hurry. Evaluate the testimony 22 and the evidence as it applies to Mr. Reffsin. Evaluate 23 the Government's testimony. Evaluate Mr. Reffsin's 24 testimony, Mr. Resini's testimony, Mr. Hall's testimony, 25 but most of all remember that no matter who produced the


1 witness, no matter what the witness said, no matter what 2 the evidence is, the government has, had, and will have 3 the burden of proof. They must prove every element of
4 every crime as to every defendant beyond a reasonable
5 doubt. If you sit down and you say I don't know, then you
6 are saying "I have a reasonable doubt." If you are saying
7 that you must acquit.
Thank you.
9 THE COURT: All right. Members of the jury,
10 we'll take a ten-minute recess.
11 Please don't discuss the case. Keep an open 12 mind. Please recess yourself. 13 (Jury exits.) 14 THE COURT: Let the record indicate -- I'll put

1 5 it on the record some other time. 16 Have you got the revised indictment? 17 MS. SCOTT: Yes, Your Honor, I handed that to 18 you. 19 THE COURT: That's the finished product. 20 MS. SCOTT: Except for the one mistaken I told 21 you, the second to the last page. 22 THE COURT: I don't know about the mistake. Do 23 you want to fix it up for me? 24 MS. SCOTT: Yes. 25 THE COURT: Is this the one?


1 MS. SCOTT: It's on the second to the last page. 2 THE COURT: All right (handing.) You can take 3 your recess.
4 You will fix it up and return it to me, right?
5 MS. SCOTT: I am, Your Honor. I have to get to a
6 computer which I'll do tonight to fix that last page. It
7 is just one page.
THE COURT: Then you will give it to me tomorrow
9 morning.

10 MS. SCOTT: Yes.
11 (Recess taken.) 12 (Jury enters.) 13 THE COURT: Please be seated, members of the 14 justify. 15 Please give your attention to the attorney for 16 the defendant Tara Garbowski, Mr. Gary Schoer, Esq. 17 (Continued.) 18 19 20 21 22 23 24 25


1 MR. SCHOER: May it please the Court, my 2 colleagues, ladies and gentlemen, members of the 3 prosecution team, and ladies and gentlemen of the jury.
4 Good afternoon. We've now reached that stage of
5 the trial after so many weeks that I told you about at the
6 beginning of the trial, that time when I told you that I'm
7 going to have the opportunity to come here and to
demonstrate to you that the prosecution, the government
9 h as not proven beyond a reasonable doubt each and every
10 element of the crimes charged against Tara.
11 Before I begin, I would like to take this 12 opportunity to thank Judge Spatt, thank my colleagues for 13 the courtesies that they've given to me throughout this 14 trial, and on behalf of Tara I would like to thank each 15 and every one of you. I want to thank you for the careful 16 attention you've paid to this trial because I watched you 17 closely and I watched the careful attention you've given 18 to all the evidence and I've watched the seriousness to 19 which you've approached your duties. 20 This has been a long, long trial and I think we 21 all can agree what you've done is very admirable. 22 As I told you at the beginning of the trial, you 23 have a duty and a responsibility. You have a duty to 24 uphold the law, as Judge Spatt will give it to you. Now, 2 5 he will charge you after the summations are over. It


1 probably will be Thursday. Listen carefully to the law, 2 focus on it. Focus on what the prosecution has to prove 3 beyond a reasonable doubt to show that Tara knowingly was
4 part of and joined a conspiracy. Listen carefully to the
5 law that they have to prove beyond a reasonable doubt that
6 she knew that Who's Who Worldwide was doing something
7 illegal, that she knew Who's Who Worldwide was doing
something unlawful. They have to prove that beyond a
9 reasonable doubt.
10 Focus on whether the prosecution has proved
11 beyond a reasonable doubt that she was part of any sort of 12 scheme to defraud anyone, part of a plan to knowingly, 13 knowingly deceive people and take property from them. 14 Listen carefully to Judge Spatt's charge on the law with 15 respect to materiality, to what the prosecution has to 16 prove beyond a reasonable doubt with respect to what was 17 material to the bargain between Who's Who Worldwide and 18 its members. Most importantly, focus on the definition of 19 intent to deceive. Focus on the definition of good 20 faith. Listen carefully to those charges and what the 21 prosecution has to prove beyond a reasonable doubt with 22 respect to each of them and I submit if you really focus 23 carefully on the definitions of those elements of the 24 crimes charged and you analyze what has been presented, 25 you will find, and I'll demonstrate to you in this


1 summation, that despite all you've heard, despite the 2 weeks we've spent here, there is a lack of evidence in 3 this case, a lack of proof beyond a reasonable doubt with
4 respect to each and every element of the crimes charged as
5 against Tara Garboski.
6 Now, in doing that, in holding the prosecution to
7 its proof in following the law to its letter, you may be a
little bit uncomfortable. You may not be happy about
9 telling the government that dispute all the time and
10 effort and cost that they've expended, that they just
11 haven't proved a crime. You might be uncomfortable about 12 telling them that they just haven't proved that Tara 13 Garboski had anything to do with any criminal activity. 14 You might not like to be sent mail that you might consider 15 to be junk, you might not like telemarketers, about the 16 fact that Bruce Gordon earned a lot of money, but as a 17 matter of law you have to put all of those things aside 18 and you have to decide all of those things as I said at

19 beginning of the trial on the credible, believable 20 evidence that you've heard, that you've seen and upon the 21 law. It's easy to accuse, it's easy to indict, it's easy 22 to bring a whole bunch of charges into this courtroom but 23 it's another thing to prove those charges beyond a 24 reasonable doubt and that's their burden. 25 You have a duty and you have a responsibility.


1 Tara is entitled to every consideration that the law 2 allows. She is entitled to the same consideration that 3 you and I are entitled to under the laws and the
4 constitution of this country. Her life, her freedom is on
5 the line for performing a job, for earning a living, for
6 doing things for an employer whom she trusted and at the
7 time had no reason not to believe not to trust, for
selling a product that she and others strongly believed in
9 and in which she honestly believed was a service to those
10 people who became members. You hold her fate in your
11 hands and to say the least this case is vitally important 12 to Tara. It's not magic, this case isn't special. The 13 purpose of this trial and the purpose of every trial is to 14 determine whether the prosecution has proved beyond a 15 reasonable doubt each and every element of the crimes 16 charged. They must prove beyond a reasonable doubt that 17 crimes were committed at Who's Who Worldwide and that Tara 18 committed the crimes charged. And I submit to you they 19 haven't. 20 Now, during this statement I'm going to make 21 arguments to you, I'm going to present arguments to you 22 which I submit will be grounded in reason and logic which 23 will appeal to your common sense, but most important which

24 will be based upon the evidence you heard and based upon 25 the law as Judge Spatt will give it to you. After I'm


1 finished and after all my colleagues are finished, I think 2 the Judge told you the government has an opportunity to 3 get back up here, to make what is called a rebuttal
4 summation. The government will be able to have heard
5 everything that we've said. The government will be able
6 to have an opportunity to answer the arguments that we've
7 made. They have the luxury of having heard those
arguments. We just don't get the last word.
9 Now, we're experienced lawyers and we can
10 anticipate the arguments that they are going to make in
11 rebuttal. We're all human and I don't expect that I can 12 anticipate every argument that the government will be able 13 to make on rebuttal, so I just ask you to do this. When 14 the government makes an argument, and I haven't 15 anticipated it, just think, just think for a little while 16 about what I might have been able to say if I had a chance 17 to get back up here based upon the evidence and the law, 18 based upon the credible, believable evidence and you don't 19 have to accept what I would have said. I just want you to 20 think about it. I just want you to think whether or not a 21 reasonable doubt might arise if I had had an opportunity 22 to answer those arguments. That's all I can ask you to 23 do, that's all Tara can ask you to do. 24 Before I begin to analyze the evidence I want to 25 warn you again of a few things of vital importance to this


1 trial, things which the prosecution has ignored and in 2 which they want you to ignore. Not once during 3 Mr. White's statement did he use the words "my proof is
4 beyond a reasonable doubt." You have to listen to the
5 Judge's charge and if you do you will realize that you
6 can't ignore things that are fundamental to fairness,
7 things that are fundamental to impartiality, things that
preserve all of our rights, things that make sure that
9 each of us have a right to a fair trial in which the
10 accuser, the government has to prove and has to be tested
11 to ensure that there's no reasonable doubt that a person 12 might be convicted of a crime that the government just 13 couldn't prove was a crime or might be convicted of a 14 crime that the government couldn't proof he or she 15 committed, couldn't prove beyond a reasonable doubt. 16 Beyond a reasonable doubt, that's the burden of 17 proof and that always stays on the prosecution. Tara 18 doesn't have an obligation to present any evidence. She 19 has a right to rely on her presumption of innocence. She 20 pled not guilty and that's all she has to say. She didn't 21 testify, that was her constitutional right. The Judge 22 will tell you that. That was a decision she and I made 23 after assessing what the believable -- what we believed 24 was the believable credible evidence presented against her 25 and the lack of evidence. The Judge will tell you that


1 you can draw no inference, no inference at all from the 2 fact that Tara chose not to testify. That was her 3 constitutional right and it would be unfair and it would
4 be improper, it would be unAmerican for you to hold that
5 against her in any way.
6 I want to warn you as I did at beginning of the
7 trial and as the Judge has and will again tell you that
each of the men and women out there are to be considered
9 separately. They must be treated separately. The
10 credible evidence must be evaluated against each
11 separately. The first three weeks of this trial, if you 12 remember, most of the stuff had nothing to do with my 13 client, it had to do with things related to Bruce Gordon, 14 and the fact that she is here with others, even if it is 15 proven, even if it was proven it is conceded that she 16 worked with them is meaningless. Guilt by association is 17 intolerable. You can't hold against Tara things that 18 Mr. Gordon may have done. That's guilt by association. 19 The relative weight of what they proved or what they 20 didn't prove against Bruce Gordon or against any of the 21 other people on trial has no bearing on Tara. You are 22 required to make a decision on her solely on the proof 23 against her which I submit to you is lacking. 24 Remember that much of the evidence that was 25 introduced in this trial was not even introduced against


1 Tara. You heard the Judge tell you over and over again 2 that what you were hearing or the documents you were 3 seeing were being admitted solely against Mr. Gordon or
4 solely against the corporation or solely against Sterling
5 or against a particular person, not against Tara.
6 The government talked about statements in their
7 summation of people who were not on trial, statements of
people who didn't testify. People who weren't subject to
9 cross-examination here. None of those things that they
10 said were admissible against Tara and the Judge told you
11 that. You heard no evidence at all that Tara had anything 12 to do with Sterling. 13 Listen carefully to the Judge's charge on another 14 area of the law, it's called multiple conspiracies. The 15 government has chosen to lump together Who's Who Worldwide 16 and Sterling. That was their choice, that was their 17 election. But there is no proof that the people employed 18 at Who's Who Worldwide knew anything about what was going 19 on at Sterling, absolutely no proof. The government chose 20 to lump them together, and if you carefully listen to the 21 multiple conspiracy charge, I submit that you have to find 22 that the allegations in the indictment concerning a single 23 conspiracy, one conspiracy, just haven't been proven. 24 In any event, you have to separate the evidence, 25 the credible evidence presented and admitted against Tara



1 and only apply that evidence in reaching your verdict with 2 respect to her. Now, that may not be an easy task because 3 you heard a lot of things, but remember that as you
4 deliberate. You have to separate out the evidence with
5 respect to each defendant and you can only use the
6 evidence that was introduced against them in reaching your
7 verdict with respect to that particular defendant.
Now, nothing that I'm saying in this summation is
9 evidence, just as nothing that Mr. White said is
10 evidence. I told you before, and the Judge will tell you,
11 that the evidence comes from the witness stand, from the 12 exhibits that are introduced, but it is not just 13 everything that comes out of a witness' mouth. Your 14 decision has to be based on credible evidence, believable 15 evidence and Mr. Wallenstein spent some time on that on

16 showing you that certain witnesses were not credible. 17 Listen carefully to Judge Spatt's charge on how 18 to assess the credibility of a witness. There's no 19 magical test, it's your common sense. 20 You have to determine whether you would believe a 21 particular person's testimony if you had to rely upon it 22 in order to make an important decision in your life and 23 that's what you do in here. You are making an important 24 decision in Tara's life. When you listen carefully to the 25 charge, pay special attention to what the Judge says about


1 witnesses who the government claims are so-called 2 accomplices or those who received immunity or those who 3 have entered into cooperation agreements. You have to
4 scrutinize carefully with great care and particular cause

5 of action those peoples' testimony. You have to judge
6 their testimony more carefully than other witnesses.
7 But most importantly the evidence in this case is
not just the direct testimony, that's what the government
9 wants you to believe that only the direct testimony
10 counts, but you can't do that. You can't ignore
11 cross-examination. 12 You are required to evaluate all the testimony, 13 to assess the credible evidence and to apply the law. 14 You have to use that credible evidence, you have 15 to apply the law and you have to reach your determination 16 as to whether the prosecution has proven beyond a 17 reasonable doubt the elements of the crimes charged. 18 Remember that because that's your job. 19 So let's look at what they proved and what they 20 didn't prove. Let's look at how the law applies to the 21 credible, believable evidence that you have heard in this 22 courtroom. Despite the length of this trial, the issue in 23 this case is relatively simple as it applies to Tara. The 24 issue is did the prosecution prove beyond a reasonable 25 doubt that Tara Garboski knowingly and with the intent to


1 deceive was part of an agreement to commit a crime, and 2 did the prosecution prove beyond a reasonable doubt that 3 knowingly and with the intent to deceive that Tara
4 Garboski was part of a plan or scheme to take property of
5 others by knowingly making false statements that were
6 material to the bargain between Who's Who Worldwide and
7 its members? I submit to you that they haven't proven
that Tara agreed to do anything she believed was
9 criminal. I submit to you that they haven't proven that
10 false statements that were material to the bargain were
11 made and most importantly I submit to you that they 12 haven't proven that Tara ever intended to deceive anyone. 13 Let's look at what the government produced with 14 respect to Tara. Mr. White on his summation told you some 15 things, didn't seem to have very much to do with Tara 16 Garboski. They showed you that she was an employee of 17 Who's Who Worldwide for about four and-a-half years. The 18 evidence showed that she was first a salesperson and then 19 a group leader and that at times she handed out lead cards 20 to sale people. You heard that she interviewed people for 21 jobs, you heard that with a tape in the interview, where 22 she interviewed Eric Ihlenfeldt for a job. You heard she 23 hired people. You heard that she trained new employees 24 and you also heard that she monitored telephone calls, 25 that she listened in for the salespeople to make sure they


1 weren't lying. The government produced some tapes in 2 which she gave pep talks to the sales force but she always 3 told them if you listen to those tapes not to pressure the
4 potential member. She always told them it's not a hard
5 sell. You don't have to make a hard sell.
6 The government misleadingly played a tape in
7 which they contended that Tara told the sales staff not to
ask about educational background. Yeah, they played that
9 one little clip, but then on the defense case you heard
10 the entire training session. I played it, and she
11 explained in that training session, she was going through 12 the questions asked, she explained there that there are 13 two sides to the order form and you only ask certain 14 questions and she explained that education or background 15 wasn't included in the books so there was no need to ask 16 it. 17 There's many people who don't have a formal 18 education, like one of the richest businessman on earth, 19 Bill Gates, never graduated from high school. It doesn't 20 matter whether you have an education, it really doesn't 21 matter as to whether or not you are qualified to be in 22 this book, to be a member of Who's Who and that's what she 23 was telling the staff if you listen to the whole training 24 session. 25 They played another tape in which Tara told the


1 staff to push a potential customer to make a decision. 2 Yeah, get him to say yea or nay, push him to the wall, get 3 them to make a decision, but they didn't play the
4 conclusion to that and I had to play it for you. S he said
5 you have to ask for the order or you will never get it so
6 if you don't ask them, if you don't reach the point where
7 you say give me a decision, yea or nay, you're never going
to get an order. But she also said if they don't want it
9 that's nice, that's okay, say thank you, get off the phone
10 and make your next call.
11 Finally, they played a tape in which Tara told 12 the staff to use ego as a selling point to distinguish 13 between a regular and a gold membership. No one claims 14 that ego gratification wasn't part of what Who's Who 15 Worldwide was selling and the customers and Sandra Barnes 16 of Marquis told you there's nothing wrong with that. 17 That's what people wanted, they wanted their ego to be 18 gratified. Surely it is not criminal to sell a product 19 that appeals to someone's ego. You heard about that 20 throughout this trial. That's what Cadillac does, that's 21 what Armani does, that is what Patek Phillipe does when 22 they tell you wear our product, drive our car and you'll 23 be a better person. You'll be more recognizable. You'll 24 be -- your ego will be gratified by buying our product, 25 it's done every day. That's what the government has


1 proved. That's it. Those things that we've just 2 discussed. So what? 3 You can't infer from that beyond a reasonable
4 doubt from that limited evidence that Tara knowingly
5 entered this enterprise, this company, knowing it was
6 illegal, knowing that it was doing illegal things. You
7 can't infer that she knew material misrepresentations were
being made, that she intended to deceive people, that she
9 took their money deceitfully. From that evidence that the

10 government presented you can't infer that she didn't ask
11 in good faith. 12 It defies logic, it ignores the rest of the 13 evidence you heard, it ignores reality. And to believe 14 that that evidence, that limited evidence proves beyond a 15 reasonable doubt the government's case is enough to meet 16 their burden of proof, that ignores the law. Look 17 carefully what they claim they proved. Look carefully 18 what the rest of the evidence was. 19 Tara was first just a salesperson. She didn't 20 write any letters. She didn't draft any letters of 21 solicitation. She didn't write the pitches. They were 22 done before she ever was employed. They were done by 23 Bruce Gordon. The letters were his, the pictures were 24 his, the words were all his favorite children, he told you 25 that on tape. Tara had no reason to believe that what was


1 in the script might at sometime later in hindsight be 2 claimed by the government or anyone else to be materially 3 misleading or intentionally deceiving. She had no reason
4 to believe it was anything more, the pitch was anything
5 more than recognized, accepted salesmanship, puffing.
6 Bruce Gordon specifically told them it was true.
7 You heard the tape that I played. He's talking about that
one in six people and he specifically says to the people,
9 to his workers, to the employees, "and that's true, you
10 know." He told them "nominated" had many meanings. He
11 told that to Debra Benjamin and he told that to other 12 people too. He told them that it meant selected. Words 13 have many meanings. You heard that in the courtroom. 14 There is a big fight going over the word 15 necessary. Some people think it means one thing and other 16 people think it means something else, nominated can mean 17 lots of things. She was told by this man, this older 18 successful man who was autocratic, who was controlling and 19 who told them what they wanted them to know and there was 20 no reason for her to question it. No reason for her to 21 believe that it wasn't true, just as there was no reason 22 for Marty Reffsin to believe the things he was telling 23 them weren't true, just as there was no reason for his 24 brother and sister-in-law, he told you. There was no 25 reason to believe that Mr. Gordon wasn't telling them the


1 truth. Just as there was no reason for Maria Gaspar who 2 also told you she had no reason not to believe what 3 Mr. Gordon told her or Debra Benjamin who also testified

4 that she had no reason not to believe what Mr. Gordon told
5 them. Just as a smart attorney like Neil Ackerman, who is
6 a smart man, an attorney, who gets up on the witness stand
7 and said I had no reason not to believe Bruce Gordon when
he told me something. Tara had no reason not to believe
9 that the things in the pitch that he said were true were
10 not true. She didn't know about his tax problems. She
11 didn't know about his finances. He was her employer. She 12 was a worker. She didn't know about those things in this 13 trial, until you heard about. What he may have said to 14 the IRS, what he may have said about different things 15 about ownership of the company. She didn't know anything 16 about that. She had no reason to question his veracity. 17 You have to look back to what she knew at that 18 time when she was working there, not with hindsight. She 19 had no reason not to believe what Bruce Gordon told her. 20 But there's more than just his words that lead her to have 21 no reason not to believe the truth, there was that 22 separation of functions, that black door that she and the 23 salespeople were never allowed to enter. She is charged 24 with mail fraud and she never saw the letters, the 25 solicitation letters. She is charged with mail fraud and


1 she never knew what was in the mailings. She wasn't even 2 allowed to open the mail. You heard that, the mail was 3 opened, all the mail that came into this place was opened
4 by certain people in administration and no other people
5 were even allowed to even see it.
6 If you are not allowed to see the mail when it is
7 being opened or you are not allowed to open the mail, how
are you supposed to know what's coming in? How many lead
9 cards are coming in? You can't know it.
10 The solicitation letters were locked in a binder
11 in the administration office and you heard Mr. Saffer tell 12 you that if the salespeople entered the administration 13 office they would be fired, fired for going across that 14 black door. 15 Debra Benjamin, a person even higher up in the 16 company told you the only way the salespeople or even she 17 would have known about those percentages, the six in one, 18 the 16 percent, the 15 percent, if they were told by Liz 19 Sautter or Bruce Gordon and she also told you she was the 20 president of this company, that there was no reason, no 21 reason to question the numbers, the percentages that they 22 gave to the employees. Why? How was Tara to question? 23 How was Tara to know? 24 The government wants you to believe that Tara was 25 some sort of an insider. That's what they tried to say in


1 their opening statement but they couldn't prove it because 2 it just wasn't true. She received a salary. She didn't 3 even receive a commission. She had no financial interests
4 in this business other than her paycheck and you saw that
5 was, that was $1,200 at the end of this whole time
6 period. She wasn't earning the most. Debra Benjamin was
7 earning $300 more a week, just like Maria Gaspar who the
government holds out as having no financial interest in
9 this business other than her paycheck, Tara Garboski had
10 no financial interest in this business other than her
11 paycheck. She had no reason, the same way the government 12 argues that Maria Gaspar had no reason to falsify 13 documents, Tara Garboski had no reason to try and deceive 14 people. It was a job. She had jobs before, she'll have 15 jobs after, she has jobs after. She had no reason to 16 deceive anyone. She didn't have a company car like some 17 other people, she didn't receive perks like travel 18 payments like some other people. She wasn't second, third 19 in command. She didn't even have a key to the office. 20 She couldn't get in there unless Liz Sautter let her in or 21 Bruce Gordon let her in. 22 But the higher-ups, Liz Sautter, Debra Benjamin, 23 they weren't even arrested. The people who really knew 24 about the entire operation, they weren't even arrested. 25 Tara only knew what she was told and she was told that


1 there was a screening process before she got the cards. 2 That is what she was told. She was told that there was a 3 screening process at time of the mailings. She didn't
4 know anything about the mailing lists, but she knew there
5 was a screening process at that time. That's what she was
6 told and she was told there was another screening process
7 after the cards came back and she often observed that and
people in the conference room sorting cards behind the
9 locked door. This is what she saw.
10 She knew that there was another level of
11 screening that her people, the salespeople were being told 12 to screen the cards. I'll give you the cards, hand them 13 back to me if the people don't qualify. You heard that on 14 the tapes over and over again. If they don't qualify even 15 before you call them, hand them back to me, I'll give them 16 new cards. You will not lose your chance for 17 commissions. After you talk to them on the phone if they 18 don't qualify, hand the cards back. She knew that the 19 sales force was doing that. Most importantly she was told 20 that there was a last level of review even after the 21 orders were written, it was Wendi Springer. Wendi 22 Springer told you it was her primary job, primary job to 23 review those orders and make sure people qualified and 24 that's what Tara was told. That's her job. She's in 25 there. She's working eight hours a day. She was


1 reviewing orders to make sure people qualify. Contrary to 2 the government's argument, Wendi Springer did reject 3 people, she told you that, and Debra Benjamin also told
4 you that Wendi Springer on a weekly basis would come to
5 her and ask her about cards, about particular cards. Does
6 this person qualify? But it was even more than what she
7 was being told, even more than the screening process that
lead Tara to believe that the script wasn't materially
9 misleading. Lead Tara to not even deceive him. She knew
10 about the Rolls Royce, she knew about the Cadillac of the
11 industry, she knew about Marquis, and she knew that 12 Marquis set the standards for the industry. That's why we 13 called Sandra Barnes because Marquis set the standard for 14 this industry. 15 Tara knew that the use of the term "Who's Who" 16 wasn't exclusive to Marquis. There were hundreds of Who's 17 Whos. She knew just as Debra Benjamin told you, just as 18 Alan Saffer told you he knew that Marquis used mailing 19 lists. Everybody in Who's Who Worldwide knew Marquis used 20 mailing lists. And they knew that most of the people that 21 Marquis solicited came from maiming lists. 22 Look at Marquis' own document, I sort of blew up 23 one of the pages from FK. This is Who's Who in Finance 24 and Industry. It's one day's mailing. 205 mailings and 25 out of -- I'm sorry, 205,000 mailings, 205,000 mailings.


1 Look at how many nominations there were, 276, the bulk of 2 what Marquis did was mailings, mass mailings, mailings to 3 people on mailing lists. Business Monthly Magazine.
4 Look at some of these others, Industry Week, the
5 Journal of Commerce, Cranes Business, these are
6 newspapers. These people aren't any more qualified to be
7 in a Who's Who, but that's what Tara knew. We don't claim
as the government tried to say and that's basically all
9 they did say in their summation that Tara didn't know
10 there were mailing lists. We haven't claimed that.
11 The point is she didn't think she was deceiving 12 anyone by using mailings. Marquis did it and Tara knew 13 also that not only did Marquis use mailing lists but that 14 Marquis used letters to people whose names came from a 15 mailing list where they say "Dear Marquis Who's Who 16 nominee." They used the word "nomination." 17 There's another letter, the one to Mr. Gordon 18 that says you've been nominated and that's the letter that 19 Mr. Gordon flashed around to all the employees. She knew 20 that Marquis did that, used the word nominated from people 21 who came from mailing lists and she also knew that Marquis 22 really didn't tell people their names came from a mailing 23 list. They danced around it. You heard what they have in 24 their brochures and you heard what Mr. Dunn read from the 25 trademark trial what Sandra Barnes said about whether or


1 not they told people they were on mailing lists, only if 2 it was vitally important. That's the only time they told 3 somebody they were on a mailing list, and Mr. White brings
4 in this one brochure out of six boxes full, one brochure
5 that says something about using subscriptions. He was
6 supposed to bring in every brochure and he doesn't show
7 you one that even mentions anything remotely close to a
mailing list, but the reality of the situation is that
9 that brochure was prepared if you look at it and it's
10 copyrighted in 1990. In 1994 they are using brochures
11 like this in Who's Who in American Law. They are sending 12 a brochure like that to a letter addressed to "Dear 13 professional," who they got from a mailing list and read 14 what it says. Why was I chosen to be considered for 15 inclusion? We contacted you because we believe your 16 accomplishments to be of significant reference value. How 17 do they know that from a mailing list? Could they? You 18 are part of a core group of highly qualified individuals 19 who are prominent because of their leadership positions. 20 How do they know that from a mailing list? 21 Sandra Barnes told you that this is what they 22 sent to people whose names they got off of mailing lists 23 and not only that, read the next question. "Is my 24 inclusion guaranteed?" They get your name from a mailing 25 list and now here's the question, "is my inclusion


1 guaranteed?" "Unfortunately there are a few instances, a 2 few instances where you are not accepted if your name came 3 from a mailing list." That's what Marquis, that's what
4 the Cadillac of the industry did, that's what Tara
5 Garboski knew. It's puffery, it's sales puffery, just as
6 Suzanne Konopka told you, institutionalized lying, not any
7 different saying that a watch is a piece of work of art or
a mark of distinction or that a car is a oasis of
9 serenity. It's salesmanship, puffing, it's what the
10 government does in their own ads for the Army. Be all
11 that you can recognize, you will not recognize yourself in 12 four years. It's all puffery, salesmanship, it's not a 13 crime. 14 Tara also knew what she saw. She saw the book, 15 she saw that the people in the book were from upper and 16 upper middle management. 17 I've got another exhibit, Defendant's Exhibit 18 AI. Look at this. These are the percentages of people in 19 high level positions that were in Who's Who Worldwide. 20 She knew that people were getting what they bargained for 21 to be in a membership organization that was selective, 22 that included major players, Russian presidents, CEO's, 23 officers of major corporations. It didn't matter how the 24 company got their names. Didn't matter if the president 25 of whatever company, whatever company we talked about in


1 the Tribute magazine, what mattered is that they were in a 2 group of selected people. 3 Tara knew that people were getting what they were
4 bargained for, knew they were getting a nice plaque, knew
5 the great benefits if they took the trouble to use them,
6 networking, discounts, planned conferences, cocktail
7 parties, knew about the meeting facilities, knew about
this great little magazine Tribute. Look at these
9 things.
10 Susan Konopka, Tracey Colletti, Debbie Benjamin,
11 they were proud of these and they had every reason to be 12 proud of them and all the employees were proud of these 13 magazines. Debra Benjamin told you that that's what Tara 14 wanted most. She wanted to make the product better on a 15 daily basis and the product was being made better and the 16 services were expanding and everything was becoming more 17 valuable to the members until the government raided Who's 18 Who Worldwide, closed the place down and Tara was 19 arrested. 20 Tara also saw some other things that are 21 extremely important, things that show she didn't intend to 22 deceive. She knew that members were happy. She heard 23 that. She heard that from members. On the tapes she told 24 you that. The Tribute magazine there were letters from 25 members saying how happy they were. There were numerous


1 people upgrading their membership. 2 THE COURT: Mr. Schoer, please start to conclude 3 your summation.
4 MR. SCHOER: Yes, Judge.
5 There were a minimum of complaints, you heard
6 that. You heard testimony that out of 70,000 members
7 before the government got their hooks in the membership,
before they told them their theory, there were only 20 to
9 30 complaints out of 70,000 members. The government
10 argues that you saw customers come in who said they didn't
11 get what they paid for, but most of those customers if you 12 listen to them, they were upset about the B balance. They 13 didn't understand the B balance. And you heard all of 14 those tapes. There's not one tape where the B balance was 15 not mentioned. 16 The members who came in here, their 17 dissatisfaction arose after the government told them that 18 they, the government, believed that Who's Who Worldwide 19 wasn't injured. Listen carefully to the Judge's charge. 20 It's whether or not Tara had valued accounts. Whether or 21 not Tara believed the statements in the scripts, about 22 nominations, percentages, concerned about the quality, 23 adequacy and price of the product. It's what they 24 believed, caveat emptor, let the buyer beware, that's 25 business. That's what we learn early in life, it's not a


1 crime. 2 In any event, the most telling evidence that 3 people were satisfied, that people were happy is right
4 here in a company where there were returns, refunds, given
5 gladly, a policy. 1.1 percent of the total sales, that's
6 minuscule, people who asked for refunds or got chargebacks
7 on their credit cards. Minuscule.
Most importantly, Tara saw a thriving business
9 that was spending a tremendous amount of money,
10 4 and-a-half million. This was no fly by night
11 organization, this was no Eric Ihlenfeldt little hole in 12 the wall where people making telephone calls on bridge 13 tables. You saw the videotapes. This is no place where 14 people were standing over them telling them lie, lie, lie, 15 like Eric Ihlenfeldt's operation. There was no intent to 16 deceive here. People were fired for lying. Every 17 ex-employee who testified, all of them were government 18 witnesses, stated they did not believe they were 19 committing a crime when they worked at Who's Who 20 Worldwide. Every one of them said they didn't intend to 21 deceive anyone and that they didn't think their actions as 22 employees deceived any members. The government 23 informant, Elliot Zerring who worked there for six weeks, 24 curiously they didn't ask him whether he believed he was 25 deceiving people, he never told you that. And maybe they


1 didn't ask him because they didn't want to hear the answer 2 that he would have been given. 3 Even Alan Saffer said and if you really evaluate
4 his credible testimony, he said that he didn't think he
5 was deceiving people. He had worked at West, he knew West
6 double billed, refused to give refunds. He was told by
7 the postal inspectors in 1990 that West is bad, don't get
involved in a similar operation and he goes and starts
9 working at Who's Who Worldwide and he works there for five
10 years and he doesn't think anything about it. He thinks
11 everything is going good and it's not until he's arrested, 12 until he's terrified by being arrested. It's not until he 13 faces going to jail for two to four years that he decides 14 well, maybe I better do something to help myself to take 15 away that possibility that I might go to jail. 16 He didn't want to take the chance of enduring 17 what these people have endured for the last several years 18 and the trial for the last 10 or 11 weeks. He didn't want 19 to take the chance about standing up for his rights, so he 20 caved in and now he tells you what the government wants to 21 you hear. Now he tells you what he thinks he wants the 22 government to hear. They weren't trying to deceive 23 anybody. If they were, why refer people to Biegelman? 24 Why sign up people from Hard Copy? There was no intent to 25 deceive. Debra Benjamin told you that. She told you that


1 she didn't believe that the company deceived members by

2 saying the organization was highly selective. 3 Tara never intended to deceive, she never
4 intended to defraud anyone. She acted in good faith based
5 upon what she was told, what she knew and what she saw.
6 In fact, there is no proof that she made any
7 representation to any customer over the telephone. All
those tapes and there's not one word from her mouth that
9 could be considered a misrepresentation to any member of
10 the public. All of those tapes and not one where she or
11 anyone else is telling the people to lie, to say that 12 names didn't come from mailing lists. There's not one 13 tape that says that and Zerring was taped for 10 weeks 14 wearing a tape every day. 15 You didn't hear all the tapes but there is no 16 tape that exists that showed that. There is no evidence 17 that she caused misrepresentations to be made. You heard 18 to the contrary. You heard the tapes that I played, 19 follow the script verbatim. Credibility is important, 20 accuracy is important, you must qualify potential members 21 through the interview process. You can't accept certain 22 people. You heard her say that. You heard her say "we 23 feel that we have to sell our membership. The product 24 itself is good enough that we don't have to drop anybody's 25 name. The pitch has to be followed verbatim. We're


1 legitimate. We want to stay that way." That's what Tara 2 said. And the only way we can do it is by monitoring you 3 and what you're saying, so the pitch has to be followed.
4 You have to tell the truth. Don't make stuff up. It's
5 not even worth it.
6 And there's another tape that I played which is
7 very curious. It's someone telling her, one of these new
people telling her, well, can we say something that isn't
9 in the script? And she says, that's why we don't want
10 people lying because people know. And the person says,
11 that's not lying, that's not lying. And Tara says, it's a 12 lie, it's a blatant lie. The script, that's the only 13 answer. 14 And in another part of that same tape someone 15 says, "can we say that the package enclosed with the 16 plaque gives them the 800 number for the discounts?" And 17 she says on something so inconsequential as that, she 18 says, "no, you can't tell them that, I don't know whether 19 they do that. I don't know if they are sending out 20 applications or not. Don't give people misinformation." 21 And the most telling tape is the one where Eric 22 Ihlenfeldt came in for an interview. She didn't know that 23 he had a tape-recorder. What does she say to him? She 24 says, "that's basically what it is. We have a set 25 presentation and we do require that it is followed to


1 protect your own credibility. By following the script, 2 first of all, you will not confuse them, you will not lie 3 to them, you will not stretch the truth and you'll close
4 because it's all mapped out for you." Don't lie. Those
5 are the words of Tara.
6 The government wants you to rely on the words of
7 the tape when it suits them but they want you to ignore
Tara's words. Those were her words that she didn't know.
9 Those were her words when she didn't know she was being
10 taped, words, words which demonstrate that she believes
11 strongly in the product of Who's Who Worldwide, words that 12 demonstrate that she did not believe she was engaged in 13 any criminal activity. Words that demonstrate that she 14 didn't intend to deceive or defraud anyone. Words that 15 demonstrate that she acted in good faith in her 16 employment. Words that clearly demonstrate the government 17 has not proven beyond a reasonable doubt the elements of 18 the crimes charged, have not proven beyond a reasonable 19 doubt that there was a crime and have not proven beyond a 20 reasonable doubt that Tara was involved in any criminal 21 activity. 22 I told you at the beginning of the case that I 23 would return and that I would demonstrate that the 24 government didn't prove their case, didn't prove what they 25 were required to prove by law. They have not. I showed


1 you that and I urge you to reach the only conclusion that 2 you can based upon the credible evidence, the lack of 3 evidence and the law in this case and that is that Tara
4 Garboski is not guilty.
5 Thank you.
6 Thank you, Judge.
7 THE COURT: Members of the jury, please give your
attention to counsel for the defendants Who's Who
9 Worldwide Registry, Inc. and Sterling Who's Who, Inc.,
10 Edward Jenks, Esq.
11 Mr. Jenks. 12 MR. JENKS: Thank you, Your Honor. 13 Judge Spatt, Mr. White, Ms. Scott, Counsel, 14 ladies and gentlemen of the jury. This has been a 15 relatively long trial and I too like counsel want to thank 16 you for the attention that you paid during the last 10 or 17 11 weeks that we've been here in this courtroom. This 18 morning at 6 a.m. I got up and I said to my wife this 19 morning, it looks like I'm going to give my summation 20 today in the Who's Who case, any advice? She said to me, 21 yeah, I have. I've seen a few of your summations and 22 nobody has ever complained about them being too short. 23 With that in mind I promise you that I'm going to 24 go to the point, I'm going to be brief and I'm going to 25 give you a broad overview, a broad brush painting as I


1 think -- what I think you should take with you into the 2 jury room. 3 You know that a jury trial is in fact a search
4 for the truth, it's a rational and civilized way with
5 which we in the United States, a great country, go about
6 looking for proof or lack of proof. I want to give you a
7 blueprint, so to speak. There's a simple issue in this
case. This mail fraud case, this conspiracy is really a
9 very simple case. Did the government prove to you beyond
10 a reasonable doubt that Who's Who Worldwide, Sterling
11 Who's Who and the other defendants conspired to commit 12 mail fraud along with other defendants, and did they in 13 fact commit the crimes of substantive mail fraud? As you 14 can see there's two separate trials going on here. 15 There's a mail fraud going on, there's a tax case going 16 on. The corporations that I represent are not charged in 17 the tax fraud case at all. 18 As the representative of the corporations, I said 19 to myself, why am I here? Maybe that's what you should 20 ask Mr. White when he gets back up here on his rebuttal 21 summation. Why are the corporations here? One 22 corporation Who's Who Worldwide is in Chapter 7 23 liquidation. It's dead. The assets have been sold off. 24 Sterling Who's Who is a defunct corporation, not 25 operating and hasn't been operating since 1995. So why


1 are the corporations in the indictment? They are here, I 2 respectfully submit to you, so that the government was 3 able to get documents into evidence to try to prejudice
4 these defendants in this case with evidence that otherwise
5 wouldn't have come in.
6 I submit to you that despite that there are many
7 reasonable doubts in this case for you to latch your hats
on with respect to all of these defendants and with
9 respect to the corporations. That's why as I told you in
10 my opening statement there's going to be no plea bargains
11 here, no deals, no rolling over playing dead for Mr. White 12 and Ms. Scott. 13 In this summation it's essentially my turn in the 14 barrel, if you will, to address the evidence in the case 15 or the lack of evidence. Unfortunately me as a criminal 16 defense lawyer I'm not at my best in a case of this type

17 because this is really a civil case. This is not a 18 criminal case. It should have never been a criminal 19 case. When you get into the jury room I ask you don't 20 check your logic and your common sense at the door, if you 21 can't remember something, if you forgot something about a 22 portion of the testimony you have an absolute right for us 23 to find it for you and to have the court reporter read it 24 back. 25 Now, during the trial if I said something you


1 don't like, please don't hold it against the corporations 2 or against any individual defendant in the courtroom. 3 Occasionally as you know you've watched me for 11 weeks,
4 I'm a little rough on the edges. I'm just doing my job.
5 I am in a unique position in this criminal trial. I don't
6 have a defendant whose freedom is at stake here. I'm
7 almost like a freebie, I get to give a free summation here
and say whatever I want. I don't have a live human being
9 as a client. And that takes a tremendous amount of
10 pressure off a lawyer. This is, frankly, the first time
11 in any criminal case I've been in a criminal case without 12 a live person as a client, but I'm going to be here and in 13 this summation I'm going to help my colleagues, colleagues 14 that I've been proud to work with during these 10 weeks. 15 You know all of us in this country are pretty 16 much fed up with crime. I mean, over this weekend you saw 17 the tragic death of this Asian Colombian law student, 18 Ms. Hong at Columbia Law School. I'm not here defending 19 crime, I'm not standing up here telling you crime is good, 20 I'm policing the system, I'm making sure that overzealous 21 prosecution by young prosecutors are not bringing 22 indictments and destroying peoples' lives in the process 23 without them having the opportunity to be heard. 24 The government claims that these people here, 25 these salespeople and these managers are criminals and


1 they're felons, that's what the government claims. These 2 people are not criminals, Mr. White. They are your 3 neighbors. You know what this case is, Ms. Scott, the
4 mail fraud against these salespeople, it's a disgrace.
5 That's what this case is. These people sitting here are
6 not criminals. They are your neighbors too. You want to
7 see criminals? You want to see mail fraud? You want to
know what mail fraud is at its finest? Look at Watstein,
9 look at Zerring, look at Ihlenfeldt. You, Mr. White, and
10 you Ms. Scott, you should be prosecuting these people
11 Zerring, Ihlenfeldt and Watstein instead of getting up 12 here and vouching for them as if you knew them since they 13 were born. Those are people that are involved in mail 14 fraud, in conspiracy to commit mail fraud, in theory. You 15 should be putting them in jail for as long as possible. 16 They are long-term professional conartists, ladies and 17 gentlemen, you saw them in this case. They cheated 18 literally tens of thousands of people out of dollars. 19 Zerring cheated insurance companies which comes 20 out of your pocket and mine for a quarter of a century and 21 drove a Rolls Royce and a boat while he did it. 22 Watstein, he speaks for himself, he's the 23 quintessential definition of a leopard who hasn't changed 24 his spots. Here's a guy who comes here and testifies and 25 has the arrogance to show up in the courthouse in a white


1 stretch limousine. No jail sentence, none at all despite 2 the fact that he was looking at 70, 76, 78 months. What a 3 world this is. Watstein, a professional liar, a person
4 who could teach a course in lying at Harvard or maybe I
5 should say the University of Pennsylvania because that's
6 where Watstein was from.
7 My personal favorite of all is Mr. Ihlenfeldt,
smooth, calm, relaxed, but don't let him near your credit
9 card number. He cheated simple decent hard-working people
10 out of $249 each day, day in and day out in three separate
11 companies. 12 I just ask you as an overview in evaluating what 13 they said, ask yourselves would you socialize with those 14 three people? Would you let them watch your children or 15 your grandchildren? Would you bring them to your house? 16 Would you go to the movies with them? Would you go out on 17 a date with any of them? If not, why would you even take 18 their testimony? Why would you accept their testimony? 19 Why would you dignify it? You are free to reject all of 20 their testimony and their tapes if you so choose. You 21 have that awesome power. You have the power of deciding 22 the faith of these people, not Judge Spatt, not Mr. White 23 or Ms. Scott and not any of the defense counsel. 24 I submit to you that you should reject their 25 testimony. Isn't it incredulous that a man could call up


1 with 60 different identities and make a tape of each call 2 with a different identity and do it the way he did it? 3 I submit to you you should reject his testimony.
4 You know what this whole criminal case really

5 comes down to here in a nutshell, really boils down to its
6 finest points, the use of the word nominate and the use of
7 mailing lists. That's the whole case.
We heard in the trial that nominate means
9 selected, chosen or appointed, has a variety of
10 definitions. Not one solicitation letter in this case
11 says anything is sent from the corporations that any 12 perspective member was nominated by an existing member or 13 in fact how specifically that individual was nominated. 14 Now, I have a duty to represent the corporations, 15 but I'm representing all of these people. But let's look 16 at what these people and the corporations provided. Well, 17 they provided much more than a listing in a book and you 18 saw the registry and you are free to look at it, they are 19 all evidence. They provided much more than this. There 20 was a magazine, Tribute. There was a plaque, there was a 21 credit card, there was a CD ROM, a conference center in 22 New York, cocktail parties, promotional seminars that were 23 planned by the company but did not take place. Refunds 24 were given to members when requested. The company spent 25 in 1993, Who's Who Worldwide, 4 and-a-half million. We


1 know in 1994 Who's Who Worldwide was up and running and 2 Sterling Who's Who was up and running until March of '95. 3 Look at these numbers. They are mind-boggling. These are
4 expenses.
5 The company was spending four and-a-half million
6 in 1993. The complaint that the companies had, 30 to 40
7 in the five years out of 70,000 members. If the business
is a scam and designed to steal and the corporations
9 intended to deceive people and these people intended to

10 deceive people, why in the world would you have officers
11 at Sterling Who's Who that looked like they were good 12 enough for King Farouke to sit in? Why would you put an 13 office in a waterfront Brooklyn warehouse under the water 14 in the BQE in the basement and make the calls from there? 15 These corporations, they never intended to 16 deceive the members. What they intended to do was please 17 the members, to add more and more benefits, to grow the 18 corporations, to make the members happy members, to 19 provide services for those members. 20 Ladies and gentlemen, I'm taking a look here and 21 I want to talk about what I consider to be the most 22 critical witness in the case concerning the mail frauds 23 and that was Debra Benjamin. The number two person at the 24 company was she. 25 She really gave you a sneak peek, if you will, as


1 to the intent of the companies and the intent of the 2 employees that worked inside those companies. What do we 3 know from her? We know from the fall of '92, right up to
4 March of 1995 she was the director of marketing, the
5 number two person in charge and the executive editor of
6 Tribute. They oversaw the production of the solicitation
7 letters along with Gordon and the obtaining of the
selective, and you use the word selective mailing lists
9 that were in fact used.
10 Nomination ballots she told us were distributed
11 to members in 1993. She put together seminars, brochures 12 she put into new member packets to send out. She tried to 13 said up Vietnam, Hilton Head for 1994. 600,000 a year 14 according to Debra Benjamin to produce Tribute magazine. 15 That is logical for a company who has only the intent to 16 scam and deceive people, that they would spend $600,000 to 17 produce a mapping when that $600,000 could be stolen out 18 of there? Do you think Eric Ihlenfeldt, if he was running 19 Who's Who Worldwide would have bothered to print Tribute 20 magazine? I don't think so. 21 She told us that they bothered to do profiles on 22 members so other members could read. She told us about 23 Gordon. Sure, Gordon had an aggressive selling technique 24 and aggressive sales tactics but so does every Ford 25 showroom in America when you walk in there. Do you think


1 there is not pushing that takes place in a dealership? If 2 you don't take this black Ford today you'll have to wait 3 two months to get them when he has 400 of them in a lot in
4 the Bronx. Do you not think that happens? Perhaps the
5 government should indict those people too.
6 Gordon, stick with the pitch. If you lie, you're
7 out of here. Debra Benjamin told us that Gordon told
them, the salespeople, not to lie. Benjamin: Four layers
9 of the acceptance process, even after a sale Wendi
10 Springer had to approve the entry. Springer said many
11 orders had to be returned to the sales reps. Benjamin 12 said the mailing lists used were extremely selective. 13 The government's contention, ladies and 14 gentlemen, that anybody could get by their way into the 15 registry is actually disproved by the actual contents of 16 the registry. Take a good hard look as to the kinds of 17 quality of people that are in there. There's a chart in 18 evidence which shows the break down of people, but the 19 most telling thing about Benjamin that you should consider 20 when you get into that jury room is that she started out 21 as their witness with immunity. They called her 22 (indicating.) When she got off the stand it was like the 23 defendants called her (indicating.) She became our 24 witness. She told you what went on there. She said she 25 believed as the number two person that no crime was ever


1 committed when she was at the center of everything. 2 Trabulus in cross-examining her and I'm just 3 going to read to you a small blush. "Isn't it correct
4 that --" I'm sorry, withdrawn.
5 "Question: And isn't it correct that during the
6 time you worked at Who's Who Worldwide you did not believe
7 that you were committing any crime?
"Answer: Absolutely.
9 "Question: That's correct?
10 "Answer: That's correct.
11 "Question: Indeed, when agents, when postal 12 inspectors came, you initially spoke to them without an 13 attorney present; is that correct? 14 "Answer: That's correct. 15 "Question: And that's because you felt no crime 16 was done by you there; is that correct? 17 "Answer: Of course. 18 "Question: As you sit here today, you believe 19 that you committed no crime? 20 "Answer: Absolutely. 21 "Question: And you were involved in arranging 22 for mailings in mailing lists; is that correct? 23 "Answer: That's correct. 24 "Question: And mailings to people who were going 25 to get solicitation letters that said they were nominated;


1 is that correct? 2 "Answer: That's correct. 3 "Question: And you knew the peoples' names came
4 from mailing lists; is that correct?
5 "Answer: Yes.

6 "Question: And you knew the solicitation --"
7 THE COURT: You have to slow down a little bit,
Mr. Jenks.
9 MR. JENKS: Sorry.
10 "Question: And you knew the solicitation letter
11 would say "nominated," correct? 12 "Answer: Yes. 13 "Question: Is it also correct that none of the 14 solicitation letters ever told any member -- withdrawn. 15 Is it correct that none of the solicitation 16 letters actually said that the recipent had been 17 nominated by another member of Who's Who Worldwide, that 18 they always left open another possibility? 19 "Answer: To the best of my recollection, yes." 20 If the number two person at the company could 21 make those statements under oath after being immunized by 22 the government and given a free walk, she was the second 23 person in charge. How could you possibly hold these 24 salespeople and these managers responsible? 25 Bruce Gordon, she said, gave instructions that he


1 didn't want certain types of people in the registry. You 2 remember the K-Mart tape, of course, where he says I don't 3 want any manager of an individual at K-Mart. You remember
4 the tape, if you lie you're out of here. She said, he
5 believed, as far as she could tell, the use of nomination
6 in solicitation letters was appropriate. I submit to you
7 that there was good faith on the part of the
corporations. Marquis did it. "Dear Marquis nominee,"
9 when the name came, according to Ms. Barnes from a
10 professional society roster association, annual report or
11 directory, which is just all fancy words for mailing 12 lists. Do you think for a moment that a professional 13 society roster is any different than a mailing list? 14 Marquis, Mr. White said, is the complete -- did the 15 complete opposite of Who's Who Worldwide. Is he Marquis' 16 lawyer, Mr. White? What is in the pipe that he's smoking 17 to make that statement? 18 Marquis did exactly the same thing that Gordon 19 did. They got peoples' names from mailing lists and they 20 sent out letters, you've been nominated as Defendant's Z 21 which Gordon got which is in evidence and the letter "Dear 22 Prospective Marquis Nominee," when it is clear from that 23 letter if you look at it it is no different in actuality 24 from the Gordon letters and you knew those names came from 25 a mailing list.


1 She said, Debra Benjamin, that Gordon told her 2 that Marquis uses the word "nomination" in describing the 3 process by which somebody was selected, although the
4 person may have been gotten from a mailing list.
5 Refunds. If a member -- she also tells us that
6 "if a member didn't want membership or was unhappy for
7 any reason, a refund was issued pretty immediately." Is
that the intent of the corporation that just wants to
9 deceive and scam people to issue refunds? How many
10 refunds do you think Watstein issued? How many refunds do
11 you think Ihlenfeldt gave? Those people are guilty of 12 mail fraud, not these people. 13 The companies had simply delivered what they 14 promised and then some. The members were happy with the 15 services they were provided. If you intended to deceive 16 people why would you invite them to cocktail parties and 17 do profiles about them in a magazine? Look at all the 18 positive feedback letters that are in those Tribute 19 magazines. The companies are a scam and they take a woman 20 from Hard Copy to profile it in a magazine? 21 Benjamin also said that she believed the 22 companies were being selective with respect to the members 23 it chose to include. 24 Good faith is a full and complete defense to mail 25 fraud. You've heard that from my co-counsel. There's


1 been good faith on the part of Who's Who Worldwide and on 2 the part of Sterling. The issue of materiality, you will 3 listen to that as part of Judge Spatt's charge. If there
4 was any materiality to any of this puffing or alleged
5 misrepresentations that Mr. White claims were made to
6 members, why did many of the members upgrade their
7 membership? Does that show a level of dissatisfaction of
the customers?
9 23 customers out of 70,000 were brought here,

10 they were flown in from all over the country. There are
11 6,000 members in New York here alone, how many of them did 12 we see? Why did the government drag all of these people 13 from all over the country? 14 If any people were misrepresenting at any 15 company, they were acting outside the scope of their 16 employment in ultra vires acts, acts that were not 17 authorized and permitted by the corporation, acts which 18 were outside the scope of the pitch, acts which were not 19 authorized by the corporations or by Gordon. 20 Ladies and gentlemen, I'm going to take a few 21 more moments of your time and I'm just going to ask you a 22 few questions to consider. Where is the architect of this 23 arrest, Biegelman? Why isn't he here? Why didn't the 24 government call Marty Biegelman? In this case Biegelman 25 was the architect of the arrests in this case, okay, of


1 these people. Why isn't he here? They flew somebody in 2 from California to testify that she received a letter for 3 three minutes addressed to "Dear Ms. Ass." Certainly Marty
4 Biegelman, the case agent in charge of this prosecution,
5 the same agent that was up there a week before the actual
6 close down of the corporation speaking to Benjamin and
7 Gordon, certainly he could be made available to testify.
Was he in bed with Marquis? Was he their boy? I submit
9 to you that he was.
10 Marquis had Biegelman do their dirty work after
11 the civil trial by convincing Biegelman and Mr. White to 12 take on this case and bringing a prosecution. Now, 13 Mr. White and Ms. Scott wants you to do their dirty work 14 by convicting these people here in this case and letting 15 Marquis just exist and have the monopoly they wanted. 16 Biegelman is not here, ladies and gentlemen, I 17 submit to you, that you could read between the lines if 18 you so choose. He's not here because he participated in a 19 conspiracy, driven hardest by Reed, a publisher whose 20 interests were competitive to Who's Who Worldwide. Reed 21 started the litigation with Gordon. They couldn't handle 22 this upstart, stealing 70,000 potential members. You 23 think Reed was happy about these kind of numbers 24 (indicating)? Reed brought a civil suit and instigated 25 the government to bring a criminal case because it's like


1 David and Goliath. 2 The big corporation, Reed, the multi-billion 3 dollar foreign corporation with officers here in the
4 country convinces these people to go after the small
5 upstart Who's Who because they are taking a bite out of
6 their business and with these kind of numbers Reed is
7 feeling the pain.
Sandra Barnes. You don't think Sandra Barnes and
9 Biegelman spoke? You don't think Tom Bailey after the
10 litigation with Gordon spoke to Biegelman? Everybody was
11 so interested in getting Who's Who, Watstein even took the 12 transcript from his lawyer to Biegelman. They knew where 13 to go, take it to Biegelman. 14 He's conspicuously absent. Why is he 15 conspicuously absent? The real victims in this case, 16 besides these people sitting here, ladies and gentlemen, 17 are the membership, the 70,000 members who paid, some of 18 them for 10 years, for life, for five years, who can't 19 receive what they paid for, an updated registry, a CD ROM, 20 the magazine, the ability to perhaps go to a cocktail 21 party and network, more victims, 140 employees suddenly 22 out of work without a warning, treated roughly and put out 23 of jobs by government agents. The United States 24 Government, a victim, millions of dollars in payroll and 25 corporate taxes lost as a result of Marty Biegelman and


1 Ron White. 2 You don't think for a moment these customers that 3 came in here when they received those vindictive
4 questionnaires, those questionnaires that hinted or
5 suggested to the 49,000 members that perhaps Who's Who
6 Worldwide was a scam?
7 You don't think those people saw those
questionnaires and formed an opinion before they got
9 here? Those questions and the way they were designed
10 almost intimate to an individual that the United States
11 Government and the United States postal inspectors

12 believed that these companies were involved in a fraud. 13 THE COURT: Mr. Jenks, please start to conclude 14 your summation. 15 MR. JENKS: If the government really believed, 16 ladies and gentlemen, that the salespeople puffed to make 17 a living, why didn't Biegelman and Pagano tell Gordon that 18 they had tapes of the salespeople and let them hear them 19 the week before they arrested these people so he could 20 discipline or fire. Just one week before the raid they 21 were up there playing the game with Debra Benjamin and 22 Bruce Gordon. 23 The real winner here, ladies and gentlemen, is 24 Reed. They got a monopoly in the Who's Who business and 25 they will continue to have a monopoly and they will


1 continue to send people letters with the word "nominate" 2 in them when they got them from a mailing list and nobody 3 is going to do anything about it and nobody from Marquis
4 is, let alone, will go to jail, nobody from Marquis will
5 get indicted or investigated.
6 You have to wonder as the representatives of
7 these two corporations that I represent, if Reed did not
sue Who's Who Worldwide to put it out of business because
9 Who's Who Worldwide was siphoning off so much of Reed's
10 business, you would have to wonder whether or not we'd
11 even be sitting here right now. 12 Ladies and gentlemen, in summation and in 13 conclusion, the defendants in this courtroom are fighting 14 for their rights and they are fighting for their liberty, 15 they are fighting for the whole country basically. The 16 government has put 140 people out of work. They've lost a 17 fortune in corporate payroll taxes. What these people 18 did, ladies and gentlemen, to this company can happen at 19 the company that you work at, can happen at the company 20 where your relatives work, can happen at the company where 21 your children work, where your friends work. 22 THE COURT: Mr. Jenks, please don't do that. 23 Don't impose on the jurors anything. 24 MR. JENKS: Ladies and gentlemen, I submit to you 25 the ball is now in your court. You have the option to do


1 what you want to do with this indictment. You have the 2 ability to stand up and to say not guilty. 3 I submit to you that the proof in this case has
4 demonstrated that the correct verdict, the reasonable
5 doubt verdict on the issue of the mail frauds and the
6 conspiracies, the conspiracy to commit mail fraud is not
7 guilty and I ask you to return that verdict on behalf of
all the defendants.
9 Thank you.
10 THE COURT: Members of the jury, I would like to
11 hold one more summation which is an hour in length. The 12 reason I'm going to do that rather than tomorrow is 13 because there's been a request by one of the jurors to 14 leave by 6 o'clock and I'm going to grant that request one 15 way or the other. So, therefore, if no one has any 16 objection, let's proceed with one more summation. 17 Not hearing any objection, let's proceed. 18 Members of the jury, please give your attention 19 to the summation of counsel for the defendant Oral Frank 20 Osman. 21 Wait, don't say anything. 22 All right. We'll take a five-minute recess. 23 (Jury exits.) 24 (Recess taken.) 25 (Jury enters.)


1 THE COURT: Please give your attention to the 2 counsel for the defendant Oral Frank Osman, Mr. Nelson. 3 MR. NELSON: Thank you, Your Honor.
4 If it please the Court, fellow brethren,
5 Co-counsel, members of the prosecution team, members of
6 the jury. I know the hour is late.
7 THE COURT: You take your time. They will do
what they have to do. They will be patient. They've said
9 so.
10 MR. NELSON: I would like to thank you very much
11 for your patience and consideration. This has been a long 12 trial and it has taken up a great deal of your valuable 13 time. However, despite the sometime seemingly endless 14 questioning of witnesses, the direct examination and the 15 cross-examination and the redirect and the recross and the 16 re-redirect of witnesses, the reason why that's done and 17 the reason why the questioning is conducted is so that you 18 may determine whether or not the government has sustained 19 their burden of proof, proof beyond a reasonable doubt 20 against all of the defendants individually for the charges 21 that they have brought against each defendant. 22 You are being called upon to a make collective, 23 as a juror, factual determination that will affect the 24 remainders of the lives of each of these people here 25 before you. I know you will face that task with the same


1 degree of diligence and attentiveness you have provided 2 throughout the trial and I would like to thank you very 3 much for that and I would like to take this final
4 opportunity to review with you the evidence that has been
5 presented during the course of this trial.
6 Ladies and gentlemen, the defense has no burden
7 of proof. We have to prove absolutely nothing. The
burden is entirely upon the government. They must prove
9 each and every element of each and every crime charged
10 beyond a reasonable doubt. Oral Frank Osman, known to all
11 of us as Frank Martin, is charged with conspiring to 12 commit mail fraud. The government claims that Mr. Martin, 13 Frank, as we've heard in all of the tapes the government 14 has spoken about in his capacities as an employee of Who's 15 Who Worldwide participated in a scheme designed to defraud 16 the customers of Who's Who of their money. They claim 17 this was done by making false statements to the customers, 18 to entice them to become members. The government must 19 demonstrate to you that Mr. Osman knowingly, willfully and 20 with the specific intent to deceive the customers of Who's 21 Who Worldwide made or caused false representations to be 22 made. 23 In other words, the government must demonstrate 24 that Mr. Osman knew the company was engaging in a scheme 25 to defraud the customers and he knowingly participated in


1 that scheme for the specific purpose of causing some loss 2 to the customers, and the government must prove that 3 beyond a reasonable doubt.
4 By Mr. Martin's plea of not guilty he denies that
5 he knowingly participated in any scheme designed to
6 defraud the customers of Who's Who. Frank Martin is a
7 salesperson. That's what he did at Who's Who Worldwide.
He trained other persons to be salespersons and that's
9 what he always done. He denies he ever intended to
10 defraud anyone and that puts the government to their
11 burden of proof to prove beyond a reasonable doubt. I 12 want to examine with you the evidence that has been 13 presented as it relates to Frank Martin. 14 Frank Martin worked at Who's Who Worldwide at two 15 different times and in two different capacities. He 16 worked there from late November 1991 until late November 17 of 1992. Then he left the company. He was out of the 18 employ of the company for close to two years and then he 19 returned to the company in late November of 1994 and was 20 arrested working at Who's Who when the search warrant was 21 issued there in late March of 1995, in other words, about 22 four additional months. He commenced his initial 23 employment at Who's Who Worldwide after returning to New 24 York from Florida in 1991. He came back because he's an 25 only child and his mother had just sustained a heart


1 attack. It's stated right there in the interview with 2 Steve West, the 1993 interview. 3 He had been in Florida and he returned after he
4 had just assisted in establishing a successful private
5 drug screening company, sales, that had always been
6 Mr. Martin's career. That's what he had always done, and
7 when he came back assisting his mother he sought a job and
he became a salesperson and after two months he became a
9 group leader at Who's Who Worldwide in approximately
10 January of 1992 after they had already moved from their
11 Port Washington offices to the Lake Success offices. 12 As the testimony of Alan Saffer clearly 13 reflected, during the period of time that he worked as a 14 group leader which is approximately a ten-month period of 15 time from January of '92 to November of '92, his job was 16 to train and supervise the new sales staff, new people who 17 came into work at the company along with a number of other 18 group leaders who were working there at the time. He was 19 instructed by Bruce Gordon to teach the new sales staff 20 members to follow the sales presentation, to follow it 21 verbatim and to not deviate from it on penalty of being 22 terminated. 23 Now, Frank Martin didn't write the presentation, 24 it was given to him by Bruce Gordon. The presentation was 25 used as we know to speak to customers who returned cards.


1 These lead cards that we've heard all about. 2 Now, ladies and gentlemen, we know that mailing 3 lists were used. That's not something what has been in
4 dispute during the course of this trial and we know what
5 the presentation says and we know what the objections
6 sheets say. Mr. White has told us all about it, over and
7 over again and I'm sure we'll hear about it tomorrow once
again. However, ladies and gentlemen, under the mail
9 fraud statute, even a false statement or an admission of a
10 material fact does not amount to a criminal fraud unless
11 done with fraudulent intent, a statement. A statement is 12 not fraudulent if made in good faith and unless the maker 13 believes it is material to the bargain. 14 The evidence clearly demonstrates that Frank 15 Martin and the entire sales staff at Who's Who were told 16 there were levels of screening conducted, levels of review 17 of the qualifications of candidates before these lead 18 cards ever reached them in their capacity in the sales 19 staff. We know from the testimony of Wendi Springer, 20 Debra Benjamin and Alan Saffer that the sales staff knew 21 that Bruce Gordon, Liz Sautter and others reviewed those 22 lead cards before they were handed out.

23 We also know from the testimony of Debra Benjamin 24 the selective criteria used in acquiring the mail lists in 25 the first instance. They came from specified industries,


1 from specified publications to start with. They were 2 selective in scope. They targeted specific portions of 3 those lists.
4 Ms. Benjamin testified that the lists themselves
5 were what she called segmented lists. All they sought in
6 those lists were CEO's, presidents, vice-presidents,
7 nothing below that. That's how the selection procedure
began at company. Bruce Gordon also instructed the sales
9 staff, not once, not twice, but every single day that
10 there's criteria you have to follow. We heard on the tape
11 and I played for you the Elliot Zerring tape. Look at the
12 transcript that I introduced. He will not take people who 13 are not presidents or vice-presidents. He doesn't want 14 the owner of K-Mart, doesn't want one manager, it has to 15 be somebody who is a regional manager. He indicated to 16 you he doesn't want any teachers, doesn't want any people 17 in law enforcement. He made it very clear to the sales 18 staff the type of criteria he sought. More significantly 19 he told them if you get a lead card and he's not certified 20 based upon what my criteria is, give back the card. We'll 21 give you another one. You go out there and only call 22 qualified people. 23 The significant portion of this, ladies and 24 gentlemen, is it goes to the question of intent. What the 25 people in the company believed, what the sales staff


1 believed in doing their job. Now, the government will get 2 up and say in rebuttal, but these aren't nominations, they 3 are just names off of a list, they are not as exclusive as
4 the company claimed they were. That missed the point,
5 folks. The company is not. Was the company as exclusive
6 as they claimed, that's the issue you must determine, the
7 issue that the government has to prove beyond a reasonable
doubt is has the government proved that Frank Martin made
9 any representations with the intent to defraud? And the
10 uncontradicted evidence demonstrates that not only were
11 the sales staff members lead to believe that they were 12 indeed multiple levels of screening employed by the 13 company, the uncontradicted testimony demonstrates that 14 such procedures were in fact implemented by the company, 15 the knowledge of the sales staff. 16 That, ladies and gentlemen, demonstrates their

1 7 good faith belief in the selectivity of the company and 18 negates a specific intent to defraud. It's against that 19 backdrop that I would like to examine the evidence as it 20 relates to Frank Martin. Frank Martin's job at the 21 company was twofold. First, he tried to teach the 22 salespersons how to be good sales persons, how far to 23 follow the presentation without sounding like they were 24 reading from a prepared text, and second, he watched them 25 like a hawk to make sure they followed the presentations,


1 to make sure they didn't make any form of 2 misrepresentations. 3 Now, why would Frank Martin demand that the
4 workers stick to the presentation? Why would he watch
5 them like a hawk to make sure they did so? And why would
6 he demand that they make no misrepresentations on the
7 phone if he believed that the presentation itself
contained a material falsehood that would subject himself
9 or the company to some form of difficulties? Ask yourself
10 that question.
11 Mr. White got up here and said to you that the 12 presentation itself is lies and everybody knew it. Well, 13 why for God's sake would they have him monitoring 14 everybody and what was in that presentation like a hawk if 15 he knew or had reason to believe that the presentation 16 itself could have gotten him into trouble? The answer is 17 obvious, folks. Frank Martin never believed the 18 presentation contained a material misrepresentation. He 19 at no time believed that the company was engaged in a 20 scheme to defraud. He never had any specific intent to 21 defraud anyone. 22 How do we know that? From Alan Saffer's 23 testimony and from Frank Martin's o wn words during that 24 interview on January 20, 1993. His interview with Steven 25 West.


1 Let's first look at transcript of the recording 2 Steven West made of Frank Martin on January 20, 1993, less 3 than two months after he first left Who's Who Worldwide.
4 Now, you recall Steve West. I will not go over who or
5 what he's all about, just listening to him for a week made
6 us all sick to our stomachs. But remember this, Mr. West
7 had entered into a cooperation agreement with the
government in September of 1992 where it was mandatory
9 that he go to prison for 70 months unless he provided
10 substantial assistance to law enforcement personnel. As
11 he told us the only cooperation that he had provided as of 12 the time of the interview with Frank Martin in that hotel

13 room was against people who had formerly been his 14 employees. 15 Now, Mr. West is certainly no dummy, he knew 16 giving up his employees was nowhere near enough 17 cooperation to be put in a letter to Judge Mishler who was 18 going to be the Judge sentencing him to keep out of jail. 19 He had to get other fish to fry, certainly as big as him. 20 He had to go fishing. In fact, we heard from him, he 21 literally brought his own bait with him. 22 West came up with the idea of running an ad in 23 the local papers. He came up with the concept of having 24 people come in for job interviews in a company that he was 25 purportedly going to set up where he would interview


1 people from other companies that were formerly his 2 competitors in order to attempt to get dirt against those

3 companies for the purpose of benefiting himself. He came
4 up with a scheme, he paid for the ads, he paid for the
5 hotel room and came up with the script and the questions
6 to tried to ensnare those people in order to benefit
7 himself.
We heard from him when I questioned him. He knew
9 nothing about those companies, never worked there, never
10 seen the solicitation letters, never even seen their sales
11 presentations at the time he conducted the interviews of 12 people in December of 1992 and January of 1993. But the 13 knowledge of how he operated his company, he figured he 14 could get dirt on them. It's against that backdrop in 15 evaluating the recording that I ask you keep three things 16 in mind. 17 One, West's intention was solely one thing. To 18 get dirt on other people so he could possibly keep himself 19 out of jail. 20 The second o ne, Frank Martin believed he was at a 21 job interview. He was told, he was being interviewed for 22 a job where he's going to be paid between 50 and $75,000 a 23 year. 24 And, third, Frank Martin was specifically advised 25 that it was West's intention to make certain that the


1 business operated completely within the bounds of the 2 law. West was very explicit about that. He made clear to 3 Frank Martin on page 22 of that transcript, and you can
4 look at it because it is something that aids you during
5 the course of your deliberation, where he tells Frank,
6 "the trauma I went through taught me quite a lesson."
7 With these three things in mind, let's look at
the actual transcript starting on page 6.
9 Frank Martin tells West, he watched the new
10 employees like a h awk to make sure that they stuck to the
11 presentation. Why he tells West? One, it works. Two, 12 all those postal inspectors and other bad guys are out 13 there monitoring telemarketing companies. You have to 14 stay with the script. Stay within the bounds of the law. 15 You can't have anyone making up stuff on the phone. It 16 will get the company in trouble. Now, that statement by 17 Frank Martin demonstrates, folks, that in 1993, just about 18 two months after he first left the employ of Who's Who 19 Worldwide, he believed, and after he completed his first 20 tenure there, he believed the presentation which he 21 trained the workers at Who's Who to follow verbatim was 22 truthful, accurate and honest. Why would Frank Martin 23 knowing the postal authorities monitor telemarketing 24 demand that the sales staff stick to scripts and not 25 deviate if he had any reason to bel ieve it contained false


1 and misleading statements? Because he had no reason to 2 believe the statement also contained in the presentation 3 were false or misleading. Remember, Frank Martin never
4 once saw those solicitation letters that were sent out.
5 He knew the company was providing, was aware that the
6 company was engaged in predistribution screening prior to
7 the time he received the letters that went out and he knew
the company was providing the product promised, the
9 plaque, registry were sent to all of the people who
10 joined.
11 We heard from every single witness on the witness 12 stand here that the government called who was a customer 13 that their name was in that registry. Every person who 14 paid for that book, every person who paid for that plaque

15 got what they paid for and he knew it at the time that he 16 left that company clearly this statement of Frank Martin's 17 during the course of that interview with Steven West 18 demonstrates that he had no reason to believe that the 19 company while he was working there in '91-'92 was 20 defrauding anyone. 21 Now, the government has pointed to certain 22 passages of this transcript, the claim that Frank Martin 23 knew he was making false statements and intent to defraud 24 others. Let's look at some of these statements, folks. 25 On page 9, Steve West states to Frank Martin,


1 I've seen a lot of puffing in the presentation. Now, 2 Judge Spatt is going to tell you during the course of his 3 instruction puffing is not a crime, folks. The government
4 has to prove a material misre presentation that goes to the
5 value of the bargain. And more significantly it has to
6 prove beyond a reasonable doubt that the statement was
7 made with the specific intent to defraud the customer out
of his or her money.
9 West goes on to ask Frank Martin during the
10 course of the interview where was it, meaning the
11 presentation, inconsistent with reality? Now, you heard 12 me question Mr. West and you listened to the tape as I 13 played it to him as I went through it. After pausing a 14 full six seconds, Frank Martin states to Mr. West, "he 15 suspects the major flaw was telling other people they were 16 recommended by others." Let's dissect that for a moment, 17 folks. 18 First of all, what's going on here and don't 19 forget Frank Martin is in a job interview and the guy who 20 is interviewing him is saying, well, tell me what is 21 wrong, tell me what is a problem, I want to hire you but 22 tell me what you think is problematic. So Frank is 23 thinking, what can I tell this guy? So I can get myself a 24 job. I want to work here, I would like to make 50 to 25 $75,000 a year in a company that Steve West has told me


1 will be completely legitimate and aboveboard and is going 2 to be the kind of company that I just came from doing a 3 similar type of job, that I'm well qualified to do. What
4 can I tell him? So he tells him "he suspects it's telling
5 people they were recommended by others."
6 You know I think we heard the word "nomination"
7 so many times during the last ten weeks that it is coming
out of our ears. Frank Martin doesn't use that word,
9 talks about recommending to others. What does he focus
10 on, not that it is improper, but, you know it would be a
11 great idea to actually have members nominate other 12 members, good for business, ensures quality of the people 13 who come into there. 14 Does Frank Martin state here he thinks they are 15 misleading the customer by saying this? Does he say he 16 thinks it affects the customer's desire to purchase the 17 product in any way? No. Well, why not? Because Frank 18 Martin did not believe the statement affected the value of 19 the product in any material way. He did not have an 20 intent to defraud anyone in making the statement. How do 21 we know that? Well, there is significant evidence to 22 demonstrate that nobody else thought it was deceptive 23 either. Let's start with the government's star witness, 24 Alan Saffer. 25 Mr. Saffer specifically stated that from the day



1 he started at Who's Who Worldwide until sometime in 1994, 2 he had at no time believed he was making any form of 3 misrepresentation. He testified that at no time up to
4 that date that he believed he made any misstatement for
5 the script, telephone sheet or telephone discussions with
6 the specific intent to defraud anyone. Well, Saffer came
7 to work at Who's Who Worldwide before Frank Martin did and
he stayed there well after he left the company. If
9 Saffer, the government's own witness, tell us that at no
10 time during the course of Frank Martin's first tenure at
11 Who's Who Worldwide did he believe he was acting with the 12 intent to defraud anyone, how could Frank Martin have been 13 doing so? And why is it that Alan Saffer didn't think he 14 was committing a fraud? Well, the answer is simple, 15 folks, and it is demonstr ated by the evidence. Alan 16 Saffer knew, as did Bruce Gordon, as did Frank Martin, as 17 did every single one of the people here in this courtroom 18 who are salespeople and sales managers who are on trial 19 here at this time that it was the custom and practice in 20 the industry as established by the practices of the leader 21 in the industry, Reed Elsevier, the owner of Marquis Who's 22 Who, to send letters to prospective members telling them 23 they were nominated when in fact their names were acquired 24 from mailing lists. How do we know it? Sandra Barnes 25 from Reed told us exactly that. Marquis sent letters to


1 prospective customers telling them they were nominated 2 when in fact their names had been culled from mailing 3 lists.
4 And Bruce Gordon we know received a let ter from
5 Marquis. It was Defense Exhibit Z which had been
6 introduced by Mr. Trabulus dated December 20, 1989. As
7 Debra Benjamin told us, there was a letter that he
received saying that he had been nominated and Debra
9 Benjamin told us that Bruce Gordon told the staff that
10 Marquis used the mailing lists and he told Debra Benjamin
11 about the nominating letter he had received when she 12 questioned him about the use of the word "nominate" in the 13 company's solicitation letter. So the sales staff was 14 aware of Marquis' custom and practice. 15 Now, I'm not telling you, ladies and gentlemen, 16 that because Reed does that that it's okay. That's not 17 what we're doing here, folks. We are not trying to 18 compare or determine whether or not Reed is better than 19 Who's Who or Who's Who is better than Reed. That was a 20 civil lawsuit that took place a few y ears ago. 21 The point is the government must prove beyond a 22 reasonable doubt that Frank Martin made or instructed 23 others to make false representations regarding nominations 24 with the intent to defraud. If he in good faith believed 25 that there was nothing improper about making such a


1 representation, then the government cannot demonstrate 2 that he specifically intended to defraud anyone. The 3 custom and practice by Reed is the reason why Saffer and
4 Bruce Gordon and hence Frank Martin and the rest of the
5 sales staff believed there was nothing improper about such
6 a representation. If the Cadillac of the industry Reed
7 can do it with impunity, certainly it must be okay.
To Frank Martin's state of mind the
9 recommendation wasn't the central issue, that wasn't the
10 central component as it related to the product. It was
11 the product's value to the customer that was the central 12 point and he believed the value of the product. As He 13 tells Mr. West during this January 20th interview on page 14 22, he believes in the product. He believes in its 15 value. 16 Now, the next portion of this transcript 17 Mr. White pointed to during the course of his summation 18 was on page 17 saying that this demonstrates an intent to 19 defraud. West is real cute here and you remember how far 20 I went through this line-by-line with him during the 21 course of my cross-examination. He asks, well, was anyone 22 accepted here, I mean, if a person can breathe, I mean, I 23 believe those were his words and you can listen to the 24 tape again. West of course wants Frank Martin to say, 25 yes, but Frank calls him up, he tells him, we'll not take


1 a porno shop or something like that here and that's how he 2 starts off his response. West cuts him off. 3 You remember the questions that went back and
4 forth between Larry Flint that was brought up being inside
5 of there, you know maybe a multimillionaire like Larry
6 Flint did come in although I engaged on some form of
7 pornography on some multinational basis.
Certainly he can state that he's marketing with
9 and networking with. If you look at the registry you will
10 see that he didn't get in there until after the '93-'94
11 registry until after Martin left the company. Martin goes 12 on to say, not that Mr. White didn't bring up conveniently 13 and as we go through these transcripts we will go through 14 the selected portions that we try to paint his picture.

15 He goes on to say that, you know, a used car dealer could 16 be turned around. Recall how I asked West about Wayne 17 Huzinger. West acknowledged that what Frank Martin was 18 talking about was how the CO's telephone screening 19 interview facilitates screening and selectivity. When we 20 speak to these people we find out what he's really all 21 about. He's talking about the fact that he truly believes 22 talking to the people on the telephone is a way of finding 23 out about them and ensures the form of selectivity into 24 this registry that's required and that he feels is 25 appropriate. But Mr. West, not liking what he hears as


1 the answer there because after all all of these things are 2 being recorded, he twists the words and we saw how adept 3 he was in twisting. 99 percent are accepted, is that what
4 you are saying. Martin says, yeah, as long as they are
5 not outright, he's cut off by Mr. West, they start to
6 laugh. Mr. West comes up with his most appropriate and
7 favorite line we've heard over and over again, I got
9 Well, that's what West was up to here, folks. He
10 was trying to ensnare whoever he could in order to keep
11 himself out of jail, but don't forget this, folks. Frank 12 Martin thought he was at a job interview. He was puffing, 13 trying to say during the interview what he thought Mr. 14 West wanted to hear, that he was certainly suggesting to 15 him in order to try to get a job. And what West wants to 16 hear is what can keep him out of jail. What West doesn't 17 ask Frank Martin, what isn't raised during the course of 18 the interview is the fact that Frank Martin was aware on 19 January 20, 1993, of the multiple levels of screening of 20 people who come in which were employed by the company. 21 Frank Martin's only discussing here the 22 percentage of people accepted from lead cards after 23 predistribution screening and before the order forms were 24 reviewed by Wendi Springer's department. And Wendi 25 Springer told us she was there working full-time in that


1 capacity in 1990. I ask that you keep the interview in 2 context when you review it. Who the person is who said 3 it, what the circumstances were under which it was said.
4 I also ask that you look at certain other
5 portions of that same transcript regarding other
6 statements made by Frank Martin that the government didn't
7 talk about but which were fully corroborated by the
record. First the record is uncontradicted that Frank
9 Martin received no commission, he had no ownership
10 interest in the company, he received a separate salary of
11 maximum of $1,200 per week and that he had no added 12 incentives for more sales by his staff, for example, he 13 had no insensitive to have the staff accept anyone and 14 everyone. 15 In fact, on page 13 of that very same transcript 16 Frank Martin states he agrees that there should be no 17 incentives for extra sales because it defeats the concept 18 of exclusivity. That's a clear indication of Frank Martin 19 truly believed both in the product, it's value and most 20 significantly it's exclusivity. 21 Folks, that negates a specific intent to 22 defraud. 23 Finally, I ask that you look to two other 24 portions of this transcript before I move on. 25 On page 5 Frank Martin tells West this is a very


1 unique concept. It gets away from the boiler room 2 concept. They are looking for very intelligent people to 3 begin with and the very last thing he says to him before
4 the tape dials out on page 23, he says what he likes about
5 Who's Who Worldwide is the concept. He thinks it's sound,
6 he thinks it's viable, profitable if it is used properly.
7 Are those the words of someone who thinks the company is a
scam or are those the words of a person who truly believes
9 in the value of what Who's Who is intending to provide and
10 intends to provide in the future?
11 I submit to you that the interview does not 12 demonstrate an intent on the part of Frank Martin to 13 defraud, nor does it demonstrate proof by any agreement by 14 Frank Martin to participate in a scheme by the company to 15 defraud others. And you k now what, the clear irrefutable 16 proof of that are the actions or rather the lack of 17 actions by the government with respect to Frank Martin or 18 Who's Who Worldwide following the recording on January 20, 19 1993. 20 As we heard from Mr. West, he had recorded the 21 employees of another company at or around the same time. 22 That was Oxford Who's Who. And we heard from Mr. West how 23 that summer a few months after West recorded Frank Martin, 24 the former employees of Who's Who were arrested, Oxford 25 Who's Who was shut down, by the postal authorities for


1 mail fraud and then an investigation continued from the 2 date of those recordings right up to the point in time 3 where oxford was shut down and arrests were made in the
4 summer of 1993. That didn't happen with respect to Who's
5 Who Worldwide. We have heard absolutely no evidence that
6 any investigation into the conduct of Who's Who Worldwide
7 was conducted after April of 1993 by the postal
9 To the contrary, what we heard is that Inspector
10 Biegelman was at Who's Who Worldwide and met with Bruce
11 Gordon numerous times during that period of time. We 12 heard from Alan Saffer that not only Who's Who Worldwide 13 given a clean bill of health by the postal authorities, he 14 and the other sales staff were instructed by Bruce Gordon 15 to forward complaints from customers about the company 16 directly to Inspector Biegelman. Now, if Bruce Gordon or 17 the sales staff believed they were defrauding their 18 customers, would they have been inviting Inspector 19 Biegelman to investigate them? Would they be referring 20 customers with complaints to him? No. The evidence 21 directly contradicts any intent on the part of the 22 employees of Who's Who to defraud anyone during this 23 period of time. In fact, the first time we hear about any 24 investigation into Who's Who Worldwide being renewed comes 25 once again from the lips of Steven West.


1 How was it renewed? What we hear is this 2 investigation into Who's Who is renewed in June of 1994, a 3 full one and-a-half years after his interview with Frank
4 Martin, more than one and-a-half years after Frank Martin
5 had left the company. How was it renewed? Steve West
6 calls Inspector Biegelman to tell him, guess what, that
7 civil lawsuit brought by Reed against Who's Who, Reed won
the lawsuit. West advises Biegelman this is an opportune
9 time to go after Who's Who Worldwide again.
10 He suspected once Reed won the lawsuit he will
11 meet financial difficulties as a result of paying the 12 litigation and as we heard as a result of the judgment 13 Who's Who Worldwide was indeed forced to declare 14 bankruptcy. West hoped that Who's Who's financial 15 difficulties would affect its ability to deliver its 16 product to its customers just as it happened to him. 17 Remember he told us that he didn't think he was 18 defrauding anybody until he couldn't deliver a product. 19 Now he thought that Who's Who as a result of this 20 litigation was going to be in some kind of financial 21 straits so he wouldn't be able to deliver a product and 22 that would the basis for a mail fraud prosecution. He 23 hoped that the financial difficulties at Who's Who would 24 allow a new investigation to bear fruit, to put another 25 notch or paragraph into his cooperation letter that was


1 eventually going to go in front of the Judge that was very 2 shortly going to be sentencing him. 3 I want to stop here for a moment, folks, and I
4 want to look at two things other than West's continued
5 need to cooperate that were taking place between January
6 of 1993 which is when Mr. Martin left the company, and the
7 time of the renewal of the investigation in June of 1994.
First, Who's Who was continuing a business. It
9 was growing. It was improving. It was providing a
10 greater array of membership benefits, and it had
11 implemented what Frank Martin suggested during that hotel 12 interview with Steve West back on January 20th, a 13 full-blown nomination procedure which was receiving more 14 and more responses by the day. 15 Alan Saffer told us 2 percent of the sales came 16 from nomination ballots. 17 If you examine Defendant's Exhibit FT which 18 Mr. Schoer had put up and shown you which reflects Who's 19 Who in Finance and Industry which is the Marquis' 20 publication which was the direct competitor of Who's Who 21 Worldwide, the percentages are identical. 2 percent of 22 the total people came from nominations, 98 percent of them 23 came from mailing lists. However, we know that the 24 percentage of nomination ballots at Who's Who Worldwide 25 was actually a lot higher than the number Mr. Saffer gave


1 us. How do we know that? The college student working at 2 Sterling during the summer of '94, Ellery Pierre told us 3 in the three months he worked there he received close to
4 100 nomination ballots. If a summer intern was receiving
5 those many nomination ballots, certainly isn't it
6 reasonable to assume more experienced sales personnel were
7 receiving a much greater and ever increasing percentage of
nomination ballots?
9 The second thing I ask for you to do is keep in
10 mind during this period of time was that Frank Martin was
11 not employed at Who's Who Worldwide in '93 into '94. His 12 second tenure at Who's Who is less than four months and he 13 comes back in late November of 1994 until the time of the 14 raid. 15 As I asked you during my opening statement, I 16 asked that you compare Who's Who as Frank Martin described 17 it to West during the January 20, 1993 interview with the 18 company as he perceived it operated when he returned in 19 November of 1994 as an outsider coming to work there in 20 the company. The evidence shows that when he returned he 21 was aware that the nomination procedure which he called 22 for which he considered "the major flaw" in the 23 presentation, had indeed been implemented. He had been 24 aware that nomination ballots were in Tribute magazine and 25 that four separate editions had been sent out to the


1 $50,000 members. He was aware that the additional 2 benefits, the credit cards, medjet insurance and all the 3 other benefits you heard about were in existence and were
4 being provided to the customers.
5 In summary, when Frank Martin agreed to return to
6 Who's Who Worldwide based upon what he objectively saw and
7 that's objectively demonstrated, folks, by the amount of
money 4.5 million that was being expended in 1993 to
9 provide membership benefits to members, as well as the
10 representations that were made to him by Bruce Gordon that
11 the company had a clean bill of health from Inspector 12 Biegelman, what he saw was anything but a fraudulent 13 operation to him, everything that he helped the company 14 could become when he left in 1992, did had indeed 15 achieved. This was a true membership organization as he 16 perceived it. 17 In summary, when Frank Martin returned to Who's 18 Who Worldwide in November of 1994, he believed he was 19 entering a business that was fully reaching the potential 20 he believed it had when he left. What he didn't know and 21 certainly it would have been impossible for him to become 22 aware of was that starting three months before his return, 23 at the instigation of Steve West and fueled by the desires 24 of Reed Elsevier, the government had started a full court 25 press against the company.


1 Let's look at their investigation for a moment, 2 folks. Biegelman puts West on the phone to make these 60 3 telephone calls into Who's Who in order to get employees
4 to make false representations. Now, remember, Frank
5 Martin is not on a single one of these 60 recordings.
6 Biegelman then recruits another pillar of society, Eric
7 Ihlenfeldt to go work at Sterling to record
representations being made by employees at that company.
9 Now, we heard about Ihlenfeldt, he's the guy who worked in
10 his office, lies, lies, lies, tell him all lies. He's the
11 person who Biegelman takes him off one case and puts him 12 in Sterling. That doesn't work and gets fired after a 13 poor employee put him on the phone. Ihlenfeldt told us 14 not only did he make calls at the specific instruction of 15 Inspector Biegelman into Who's Who Worldwide, Biegelman 16 told him exactly what to ask and Biegelman told him who 17 specifically to target. 18 I ask you folks, what's going on here? How far 19 can you go? When do the means no longer justify the end? 20 We get a picture of how far this manipulation by Biegelman 21 can get in the one recording Ihlenfeldt makes of Frank 22 Martin. 23 In Government's Exhibit 1359 Ihlenfeldt calls 24 into Who's Who Worldwide looking for Alan Saffer who we 25 know Biegelman has already targeted. Saffer is not there


1 so he speaks to Martin Graham, also known as Martin 2 Gross. We find out during my cross-examination of 3 Ihlenfeldt that Gross was another informant Biegelman had
4 planted in Who's Who World Wide. We have one government
5 agent lying to another government agent, both of whom were
6 working for Biegelman, trying to get evidence against
7 Who's Who Worldwide. I mean, this is pretty incredible
when you think about it. But it goes even further than
9 that, folks. Gross realizes after the third planted
10 question, what's going on? So he gets a supervisor, he
11 puts Frank Martin on the phone. Gross sets him up for 12 this telephone recording that the government is talking 13 about that is so clearly reflective on an intent to 14 defraud on the part of Frank Martin. The one time Frank 15 Martin speaks to Ihlenfeldt is when one government agent 16 sets him up to speak to another government agent. The 17 government tells you it doesn't matter who they are or who 18 they employ or what means they are employed, what matters 19 is what is said on the tapes. That's what controls. 20 Let's look at what Martin tells Ihlenfeldt. 21 Before you do that I want you to keep in mind this. At 22 the time of this recording Frank Martin had been back at 23 Who's Who Worldwide for approximately two weeks. The 24 recording is made on December 16, 1994. He returned 25 around Thanksgiving of 1994. Frank Martin was focused on


1 the fact that there was now a fully implemented nomination 2 procedure, that there was a public affairs office that was 3 going through screening of people and they have all of the
4 membership benefits in place when they came back for the
5 company.
6 What the government characterizes as a
7 misrepresentation by Frank Martin evincing his intent to
defraud is Frank Martin telling the informant he wasn't
9 selected from a mailing list, that's not the way it would
10 go. Look at that in context. First Frank Martin tells
11 the informant not once but twice, generally speaking, most 12 members are nominated and he sets forth the alternative 13 means of the company's acquisition of names through the 14 public affairs office perusals of magazines and 15 periodicals. 16 Now, I ask you, how does that differ from what 17 Sandra Barnes told us Marquis tells its customers when 18 they ask how their names were acquired? You heard 19 Mr. Dunn read to Ms. Barnes her prior testimony given 20 during the lawsuit brought by Reed against Who's Who. She 21 testified about Reed's policy when a potential customer 22 called to ask how his or her name was acquired. She 23 stated that only if the customer insisted would they know 24 -- would they even give them the time of day to attempt 25 to answer the question. And what would Reed tell them if


1 they provided an answer? What they would say is your name 2 came from "a selective professional roster as reviewed by 3 our research staff." Come on, folks. Whose fooling who?
4 The procedures that Marquis followed didn't
5 differ one iota from what Frank Martin's statements were
6 when he was speaking there on the phone and the government
7 sanctions Marquis' statements. If the government
sanctions it why can't Frank Martin rely upon that custom
9 and policy as well? Folks, that negates a specific intent
10 to defraud and the government has to prove that Frank
11 Martin made representations with a specific intent to 12 defraud customers out of their money. 13 Second, and most significantly when we look at 14 this recording, Frank Martin doesn't attempt to sell 15 Ihlenfeldt anything. He doesn't ask him to buy. He never

16 solicits him. This is the one conversation that 17 Ihlenfeldt made clear where he was never asked to make a 18 purchase, he was never accepted as a member and there was 19 no solicitation made to him at any point in time by 20 Mr. Martin. How can the government possibly claim that 21 the statement was made with the intent to defraud if Frank 22 Martin isn't asking to call him to buy anything? It shows 23 nothing with respect to intent to defraud. He's simply 24 providing information about the value of the product. 25 Look at the transcript, folks, look at it yourself.


1 Now, the final evidence introduced against 2 Mr. Martin are the recordings of Elliot Zerring. We heard 3 Mr. Zerring testify here in the Court. He was literally
4 working for Biegelman seven days a week to try to work off
5 the jail sentence he was looking at and quite a sentence
6 he must be looking at.
7 Remember Mr. Zerring, he defrauded the insurance
companies out of millions and millions of dollars in
9 inflated claims. He sanctioned claims before they even
10 occurred. He knew his clients were going to either cause
11 water damage or potentially burn down buildings that he 12 was prepared to accept claims for. 13 Now, the government will tell you that maybe he's 14 a bad person, they have to take the witnesses as they find 15 them. It doesn't take anything away from what the tapes 16 say. Well, it doesn't take anything away from the fact 17 that the government is prepared to help somebody like him 18 avoid jail, to put someone like Frank Martin or any of 19 these poor souls into jail. 20 THE COURT: Mr. Nelson, please start to conclude 21 your summation.
22 MR. NELSON: Mr. Zerring made more in one week 23 than Frank Martin made in the total of 15 months he worked 24 in Who's Who Worldwide, but yet for the government to 25 facilitate this prosecution is prepared to give him a


1 sentence by Mr. West, six months by his Florida mansion by 2 the pool. 3 Getting back to what the government says, getting
4 back to the tapes, ladies and gentlemen, yes, it doesn't
5 take anything away from what the tapes say and on this
6 score I partially agree with the government. Let's look
7 at those recordings, not the ones introduced by me, the
ones introduced by Mr. Schoer and myself.
9 Remember Mr. Zerring worked in the company from
10 December 6, 1994, to February 15, 1995, he made over 350
11 hours of recordings. What does the government introduce? 12 Maybe an hour's worth of recordings. In fact, we 13 introduced more recordings than the government introduced 14 with respect to what took place there. And he doesn't 15 testify with respect to a single word that is stated while 16 he's working inside of Who's Who Worldwide. Why is that, 17 folks? Well, let's look at some of the those tapes 18 quickly. 19 The first tape that the government points to is 20 1399. This is a sales meeting during which Frank Martin 21 goes through the written sales presentation which is 22 provided to him by Bruce Gordon. He goes through it 23 line-by-line with Zerring. He tells the salespeople how 24 to find out information about that. There's no intent to 25 defraud in finding out what a person does, that is


1 required to complete the order form. 2 In the middle of page 2, Frank Martin states that 3 they received 6,000 recommendations and only 1,000 are
4 accepted. Now, this ratio comes from the script. This is
5 not something Frank Martin is making up, it's what Bruce
6 Gordon has told him to be a true state of affairs, as the
7 testimony of Benjamin, Alan Saffer and Wendi Springer
makes very clear the date to support those statistics was
9 something the sales staff was not privy to. Recall their
10 testimony about the compartmentalization of the company
11 into the different departments, how far the sales 12 department couldn't go into the black door. 13 THE COURT: You have to go a little slower. 14 MR. NELSON: I'm trying to fit in my last 15 statement. 16 THE COURT: That's inconsistent, but I'll give 17 you a chance. Slow down. 18 MR. NELSON: They relied upon Bruce Gordon's

19 representations on these points and relied upon the 20 screening procedure that the company had implemented. 21 Remember Frank Martin didn't write the presentation, Bruce 22 Gordon in fact as some of the other transcripts made clear 23 he complained about many of the changes Bruce Gordon 24 made. 25 Now, on the top of page 4 Frank Martin discusses


1 split billing and how the sales staff must advise the 2 customers of it. We heard a lot about the split billing 3 and we heard the customers complaints. The bottom line is
4 Frank Martin always advised sales staff that they must
5 advise the customers about it. He says it here and he
6 says it to West in his 1993 interview. How could he be
7 held accountable for any customer misunderstandings about
split billing? He's training people, this is a training
9 session.
10 What other transcripts did the government
11 introduce? I'm going to look very briefly at a couple of 12 them. There's a tape introduced, 1397, I ask you look at 13 the transcript. He's telling the staff compared to when 14 he started in 1991, there is a full complement of benefits 15 to supplement the registry, plaque and networking 16 capability. What kind of proof is it to say to the sales 17 staff we have a lot more to offer towards intent to 18 deceive. He's telling him the company has improved and 19 believes it has improved. 20 The next transcript is 1401, look at this one 21 very closely. In this one Frank Martin tells the sales 22 staff if you are not writing it means you are not sticking 23 to the script. Michael Maxes, an old-timer who based upon 24 the testimony of Alan Saffer and Wendi Springer, was fired 25 f or not sticking to the script goes on to say "when you


1 write that means that you are not staying with the script, 2 when you stick to the script you don't write." 3 The transcript goes on to say that Frank Martin
4 and Maxes has a discussion which is conveniently off of
5 the tape and Maxes is out of the room. How come? Because
6 Martin kicked him out of the room, he was telling him that
7 differentiated from company policy and didn't want nothing
to do with it. He tells the sales staff, stay with the
9 pitch. He's telling the staff to ignore bad advice.
10 What I would like to point out now is some of the
11 other tapes, the tapes that I introduced as it relates to 12 Frank Martin, not the ones that the government chose to 13 introduce but rather the ones they purposely avoid from

14 providing you, the ones I introduced are EZ 15 where Bruce 15 Gordon tells the staff they will be fired if they deviate, 16 follow the presentation verbatim. 17 At the bottom of page 1 of the transcript Frank 18 Martin states there is absolutely no reason to 19 misrepresent in any way, shape or form because the package 20 is all inclusive. He states there is no reason to 21 embellish and he tells the sales staff he cringes when he 22 hears people go off of the presentation. What does that 23 tell you? It tells you that he fully believes in the 24 legitimacy of the presentation and in the value of the 25 product.


1 I also played for you a number of the other tapes 2 and ask that you review the transcript. The substance of 3 those transcripts are that he and Ed Schaeffer tell the
4 sales staff what we have here is a membership, a concept,
5 a full-blown organization with continuing benefits, that
6 he truly believes in these benefits and he believes in the
7 value of those benefits.
Finally, I played for you a recording of another
9 sales meeting conducted on January 25, 1995. Frank Martin
10 again says to the staff, stay with the script verbatim, if
11 they stay away from the script and Gordon hears them, they 12 are history. The membership is only offered to select 13 people. That they are not selling this to anyone. Why 14 does he say it? Because he believes it, folks. He 15 believes in the four levels of screening that was mocked 16 by Mr. White but was implemented and existed and the 17 members of the sales staff knew existed, the selective 18 match of the mailing list, precard screening, interview 19 procedure itself and Wendi Spr inger's subsequent review of 20 order forms. In fact, the last thing he tells the sales 21 staff is stay with the presentation. Burn these people 22 off every now and then, it's not for everybody. If they 23 can't appreciate the value of what we have to offer, they 24 don't deserve to be a member and Frank Martin says he 25 really feels that way.


1 I ask you, ladies and gentlemen, is that the 2 statement of a person who agreed to participate in a 3 scheme to obtain money from others by false
4 representations or is it proof of Frank Martin's honest
5 heart felt good faith belief and the truth and value of
6 the membership offered by Who's Who? The tapes do speak
7 for themselves and what they show, what they make
abundantly clear is that the government cannot demonstrate

9 that Frank Martin knowingly, willfully and with the
10 specific intent to defraud the customers of Who's Who made
11 or taught others to make false representations with the 12 specific intent of defrauding them out of their money and 13 they must prove that beyond a reasonable doubt. To do 14 that, the government has resorted to tactics that they put 15 in its most favorable light are deplorable. 16 If Biegelman thought there was a reason to 17 believe there was a problem in the company in '93, why 18 didn't he tell them to stop? If they thought there was a 19 problem in the company in '94 when West had them renew the 20 investigation, why didn't he tell them to stop? No. What 21 he did instead is he brought in West, Ihlenfeldt, 22 Marchisoto, Graham, Zerring and who knows how many other 23 planted informants both inside and outside of this company 24 to bring this case aga inst who, Frank Martin as compared 25 to Zerring and West.


1 What kind of value judgment is the government 2 making here? If they felt the statements were improper, 3 why did Biegelman just come in and ask them to stop?
4 Sometimes the means no longer justify the ends. The
5 government had to go to these lengths, to these extremes
6 to attempt to demonstrate an intent on the part of these
7 people to defraud and I submit to you that despite the
length that they went to, the government has failed to do
9 so.
10 Simply put, the government failed to demonstrate
11 beyond a reasonable doubt that Frank Martin intended to 12 defraud anyone. I beseech you to hold the government to 13 their burden. Examine not what the disgruntled customer, 14 overreaching agent, competing multi national conglomerate 15 or overambitious prosecutor thinks Frank Martin's 16 intentions were. 17 Examine the evidence, if you do so you will 18 clearly find that the government cannot clearly 19 demonstrate it was the intention of Frank Martin to 20 defraud the customers of Who's Who. 21 Frank Martin is a salesperson, he trained other 22 salespersons. He honestly believed in the representations 23 he was making regarding the value of membership in Who's 24 Who Worldwide. His intentions weren't to defraud. His 25 intentions were to do his job and to do it well. To train


1 the sales staff, to sell a concept and a product, 2 membership in Who's Who. Something he truly believed in. 3 I ask you to do justice. To find Frank Martin
4 not guilty of conspiracy to commit mail fraud and mail
5 fraud.
6 Thank you.
7 THE COURT: All right.
Members of the jury, we're going to recess now
9 until 9 a.m. tomorrow morning. We'll start early and
10 we'll try to finish earlier and certainly as I said we'll
11 get out of here by 6 o'clock because I'm making that 12 commitment to one of the jurors. So in the meantime, it's 13 very important, you continue not to discuss this case 14 either among yourselves or with anyone else. 15 Keep an open mind. Don't start making 16 decisions. Wait until you're in that jury room 17 deliberating. Come to no conclusions. 18 Have a nice whatever is left of the evening and 19 we'll see you at 9 o'clock. Have a nice evening. 20 (Jury exits.) 21 THE COURT: I want to recess until 8:45 22 tomorrow. 23 May I have my copy back? 24 MS. SCOTT: Your Honor asked me to take it from 25 you.


1 THE COURT: But you have another one. 2 MS. SCOTT: Yes, I do. 3 THE COURT: I want to keep that one in the
4 meanwhile to take a look at it. I haven't seen the rest
5 of it. You will have the new one tomorrow morning.
6 MS. SCOTT: That's right, Your Honor.
7 THE COURT: I want you to give to counsel and
review it and approve it. While I can't get the revised
9 verdict sheet down because my secretary is working on the
10 charge, I will tell you tomorrow how it will be, that part
11 about the lesser included. So we'll see you all tomorrow 12 at 8:45. 13 MS. SCOTT: Your Honor, for the Court's 14 information I made this clear this morning, the indictment 15 handed out this morning to all counsel is only going to 16 have one change made on it on 39. That is I'm going to 17 take out the reference to the tax. If they want to get a 18 head start in reviewing the indictment they can do it 19 tonight. 20 THE COURT: Tomorrow morning at 8:45. 21 (Proceedings adjourned.) 22

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March 24th AM session


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This site is concerned with The Illicit Smashing of Who's Who Worldwide Excecutive Club, and the double scandal of government and judical corruption in one of the Unholy Federal Trials and the concomitant news media blackout regarding this incredible story.

Sixteen weeks of oft-explosive testimony, yet not a word in any of 1200 news archives. This alone supports the claim that this was a genuinely dirty trial; in fact, one of the dirtiest federal trials of the 20th century.

Show your support for justice, for exoneration of the innocent, and perhaps most importantly, government accountability, by urgently contacting your Senator, the White House, and the U.S. Department of Justice.

The Illicit Smashing of Who's Who Worldwide Excecutive Club
How Thomas FX Dunn proved himself the worst attorney in America

Unholy Federal Trials  - The Illicit Smashing of Who's Who Worldwide Excecutive Club

Worst Lawyer Of All Time; - The Who's Who Worldwide Registry Tragedy
Thomas FX Dunn demonstrates some thirty-eight discrete reasons to qualify himself
over and again as perhaps the worst lawyer of all time