Dirtiest Trials of the 20th Century - The Who's Who Worldwide Registry Tragedy

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4594

22 (516) 485-6558
23 Proceedings recorded by mechanical stenography, transcript
24 produced by Computer-Assisted Transcription
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4596

1 M O R N I N G S E S S I O N
2 (Whereupon, the jury entered the courtroom.)
3
4 S T E V E N W A T S T E I N ,
5 called as a witness, having been previously
6 duly sworn, was examined and testified as
6 follows:
8
9 THE COURT: Good morning, members of the jury.
10 Please be seated.
11 When I heard at 10:00 a.m. not all of you were

12 there, I knew it was a mistake, that that was not so, that
13 even those who travel from as far away as Brooklyn would
14 get there on time, and I was absolutely correct, for which
15 I appreciate.
16 You may proceed.
17 MR. NELSON: Thank you, your Honor.
18
19 CROSS-EXAMINATION (cont'd)
20 BY MR. NELSON:
21 Q Good morning, Mr. West.
22 A Good morning.
23 Q Mr. West, I believe we left off yesterday afternoon
24 discussing the refund policy that was implemented by your
25 company.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4597
Watstein-cross/Nelson

1 Am I correct that your testimony yesterday was
2 that during a period of time you had instructed your sales
3 staff and other members of your staff to advise customers
4 who were seeking refunds that a refund could not be
5 provided as a result of the fact that their name had
6 already been engaged on their plaque when in fact such
6 plaque had not been prepared?
8 A That is correct, sir, during a brief period of time.
9 Q Am I also correct that during a period of time you
10 had instructed your staff to advise customers seeking
11 refunds that they would not be permitted to acquire their
12 refunds because their names had been included in the
13 registry which had already gone to print, when in point of
14 fact the registry had not yet been sent to the publisher?
15 A Yes, for a brief period of time, that's correct, yes,
16 sir.
17 Q Am I correct that there had been a period of time
18 when you actually had provided commissions to members of
19 your staff for preventing people from acquiring refunds?
20 A That is correct.
21 Q I believe yesterday Mr. Jenks showed you a number of
22 magazines, called Tribu te Magazines, defense Exhibits C
23 through G.
24 I would like to show you what is previously
25 introduced into evidence as Defendant's Exhibit D, which

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4598
Watstein-cross/Nelson

1 is a Tribute magazine from the winter of 1995.
2 Other than yesterday, have you ever seen such a
3 magazine, sir?
4 (Handed to the witness.)
5 A Yes.
6 Q Was this shown to you by the government?
6 A I am not quite sure where I had seen it.
8 Q But you have had an opportunity to see this magazine,
9 correct?
10 A Not to study it, but to see it.
11 Q I would like to turn to an area of the magazine and
12 go through it one at a time.
13 Do you notice here that Who's Who Worldwide
14 Executive Club provided a Master Card to members.
15 Did any of your entities provide a cost-free

16 Master Card to any of the members of your entities?
17 A No, we did not.
18 Q I would like to show you on another page a reduced
19 cost for Advantage calling card with the Who's Who
20 Executive Club embossation from Transnational
21 Communications, Inc., was any such benefit provided to any
22 member of U.S. Executives?
23 MR. WHITE: Objection.
24 THE COURT: What ground?
25 MR. WHITE: I have an application with respect to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4599
Watstein-cross/Nelson

1 this whole line of questioning.
2 THE COURT: What is your application?
3 MR. WHITE: My application is to preclude it.
4 THE COURT: You want a sidebar conference?
5 MR. WHITE: Yes, your Honor.
6 THE COURT: Come up.
6
8 (Whereupon, at this time the following took place
9 at the sidebar.)
10 MR. WHIT E: I didn't mean to delay things. I
11 wanted to make sure the ground rules are straight here.
12 They can question Mr. West about whatever his
13 company did. I think, so, if they are questioning
14 specifically and that pointedly as to the comparisons of
15 his company and Mr. Gordon's company for purposes of
16 showing the different things that Mr. Gordon offered, it
17 would open the door for the government to point out the
18 similarities.
19 If they want to cross-examine about untrue things
20 they said, fine. But the sole purpose of everything
21 Mr. Jenks went through yesterday and what Mr. Nelson
22 appears to be going through is to draw a positive
23 comparison that Mr. Gordon is so much better than
24 Mr. West. If that's the case, the door can't swing one
25 way, the government should be able to bring out the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL C OURT REPORTER
4600
Watstein-cross/Nelson

1 similarities.
2 MR. TRABULUS: Your Honor, the government brought
3 out all the similarities in the direct examination of
4 Mr. West.
5 THE COURT: Do you want to slow down,
6 Mr. Trabulus.
6 MR. SCHOER: It was over objection.
8 MR. TRABULUS: Over objection.
9 He brought it out and selectively identified a
10 variety of things that Mr. West did that paralleled some
11 of the evidence against Mr. Gordon.
12 Although this was ostensibly done in terms of
13 drawing the teeth on a witness who can be, by bad acts and
14 prior conviction discredited, but another purpose was to
15 impliedly show the jury these acts constituted bad acts
16 because this witness pled guilty to draw in the jurors'
17 minds that Mr. Gordon is guilty as well.
18 It is quite proper to show the jury how the
19 co nduct between the two companies differed.
20 MR. NELSON: Indeed the Court might recall at the
21 request of defense it was necessary for the Court to
22 provide a limiting instruction to the jury yesterday that
23 the conduct of Mr. West is such that it cannot be drawn
24 against these defendants based on any similarity.
25 THE COURT: I did. And I fully intend you to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4601
Watstein-cross/Nelson

1 bring out all the differences.
2 MR. NELSON: Thank you, your Honor.
3 THE COURT: I don't know why this conference was
4 necessary, because I agree with defense counsel that the
5 government attempted to show a lot of similarities.
6 That's why I sua sponte told the jury that that plea of
6 guilty had nothing whatsoever to do with this case. And
8 that was a personal decision made by him. If you recall,

9 that is what I said.
10 MR. NELSON: Yes, your Honor.
11 MR. TRABULUS: Yes, your Honor.
12 MR. WHITE: To put one thing in context of what
13 happened yesterday.
14 Obviously I brought out what Mr. West pled guilty
15 to. It was not done for the purpose of drawing a
16 comparison. It was unavoidable. That's what Mr. West
17 pled guilty to.
18 THE COURT: It helped a little bit.
19 MR. WHITE: Your Honor, may I put one thing in
20 context?
21 THE COURT: Yes.
22 MR. WHITE: The government didn't want to call
23 Mr. West. The defense attorneys all stipulated to the
24 authenticity of the tapes. But they insisted, insisted
25 that Mr. West be brought in here.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4602
Watstein-cross/Nelson

1 MR. TRABULUS: I didn't.
2 MR. WHITE: They wanted to go through all his bad
3 acts, so I don't want any imputation that I was doing this
4 so the jury can draw an improper conclusion.
5 THE COURT: I am not drawing any imputations.
6 MR. WHITE: Mr. Trabulus is.
6 THE COURT: I am saying what the average
8 reasonable juror could infer since he pled guilty to this,
9 and the defendants here doing the same thing are also
10 guilty. That's why I made the curative charge.
11 MR. WHITE: I thought it was appropriate and
12 didn't object.
13 THE COURT: I will not limit them or prohibit
14 them from showing differences.
15 MR. WHITE: On redirect can the government point
16 out the similarities?
17 THE COURT: You have pointed them out already.
18 If you have any other similarities, you will not go over
19 the same thing again. That would be prejudicial and
20 unnecessary. This jury heard the similarities.
21 MR. WHITE: Okay.

22 MR. TRABULUS: I would like to state that I did
23 not request that Mr. West testify. I did request other
24 confidential informants who recorded statements made by
25 Mr. Gordon, which Mr. West did not, be available to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4603
Watstein-cross/Nelson

1 testify.
2 MR. WHITE: That is not so. Mr. Trabulus said I
3 want the CI's there. He wanted West, Ihlenfeldt and
4 Zerring here. And they are here only because the defense
5 wanted them here.
6 MR. TRABULUS: I wanted Zerring and Ihlenfeldt.
6 MR. WHITE: You can't pick and choose.
8 THE COURT: You may continue, Mr. Nelson.
9
10 (Whereupon, at this time the following takes
11 place in open court.)
12 Q Mr. West, I would like to show you a page in the
13 magazine which indicates that Airborne Express discounts
14 up to 40 percent are provided to members of Who's Who
15 Worldwide. Did your entity provide such a benefit for its
16 members?
17 A No.
18 Q I would like to show you a section of the magazine
19 where there is an advertisement through Telecom,
20 T E L E C O M, International, for a discount of up to 70
21 percent on international telephone calls.
22 Was such a benefit as that provided to members of
23 your membership organization?
24 A No.
25 Q And similarly, I would like to show you on the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4604
Watstein-cross/Nelson

1 adjoining page, that domestic discounts were provided the
2 members of Who's Who Worldwide.
3 Was such a membership benefit provided to members
4 of your organization?
5 A It was proposed, but no one maintained interest in
6 it.
6 Q Was there a membership, the next page, for Executive
8 Club members for auto insurance provided to members of
9 your organization?
10 A No, sir.
11 Q Okay.
12 Am I correct that there was an advertisement in
13 this Tribute magazine for such a discount to members of
14 Who's Who Worldwide?
15 A That's correct.
16 Q Finally, do you notice on another page of the
17 magazine, there is a medical emergency card for a discount
18 on Med Jet assistance for members of Who's Who Worldwide.
19 Was such a benefit provided for members of your
20 organization?
21 A I believe it was proposed, but no one maintained an
22 interest in it.
23 Q Now, I believe you testified yesterday that at some
24 point in time you had attempted to use a nomination
25 procedure, but you dropped that; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4605
Watstein-cross/Nelson

1 A That is correct.
2 Q Okay.
3 Did your company at any point in time provide to
4 existing members nomination ballots for them to nominate
5 other members for inclusion in your organization?
6 A I can't answer that question with a yes or no, sir.
6 Q Well, you were the owner of the company. Did you
8 ever have a printing company draw up and prepare a
9 nomination ballot that you would have had to expend money
10 to send to members, to then have given to other people for
11 membership benefits?
12 A It was not called a nomination ballot. It was called
13 something else, to achieve a similar result.
14 Q Did you ever expend funds for the preparation of a
15 document which would be sent to members of your
16 organization so, that if they so chose, they could prepare
17 that document and send it back to your company for the

18 purpose of nominating other people, yes or no?
19 A Yes. But to the best of my recollection we did for a
20 brief period of time. But there was no interest in the
21 members in utilizing such ballots.
22 Q How many hundreds of thousands of ballots did you
23 have sent out to your members?
24 A I don't know the number, sir.
25 Q Did you send a hundred?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4606
Watstein-cross/Nelson

1 A I don't want to guess. I don't know the number.
2 Q Did you send five?
3 A You are asking me to guess, and I don't want to
4 guess.
5 Q You were the owner and principal of your company; is
6 that correct?
6 A Yes, that's correct.
8 Q Did you send any form of mailing to your members for
9 them to nominate other people? Yes or no?
10 A Sir, my recollection is yes, we did. I cannot give

11 you an exact count. It was done for a brief period of
12 time, and there was no interest or response from the
13 members to the best of my recollection.
14 Q Did you implement any type of a procedure or policy
15 at your company for the purpose of screening those
16 nomination ballots so you could act upon them?
17 A Yes, sir.
18 Q And what was that procedure?
19 A The procedure and policy that was established in May
20 of 1990 was that for someone to be qualified for our Who's
21 Who, they had to --
22 Q I am talking about nomination solely.
23 A It applied to both.
24 Q I am asking about nominations only.
25 A As to nominations, nominations would not be accepted

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4607
Watstein-cross/Nelson

1 unless the individual had five years experience in his or
2 her field and had the title of manager or director or
3 higher.
4 Q And can you tell us how many nomination ballots were
5 received by your company?
6 A As I previously testified, sir, there was no strong
6 interest in that. It was not a substantial number.
8 Q Can you tell us how many were mailed by your number?
9 A I don't know the answer. I previously testified to
10 that, sir.
11 Q Can you tell us whether or not they were mailed in a
12 publication, along with a letter, or whether or not they
13 would just shift as an individual ballot?
14 A I don't have a clear recollection. It might have
15 been included with the plaques that were shipped, the
16 books that were shipped, but I am not sure.
17 Q You as principal of the company don't know how or in
18 what manner these nominations were sent out; is that
19 right?
20 A I don't recall that, sir. Yes, that's correct .
21 Q Now, I believe it is your testimony as relating to
22 the possibility of networking for members of your
23 organization, you intended to have some seminars at
24 various different locations, but none of them came
25 through?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4608
Watstein-cross/Nelson

1 A At a singular location, sir.
2 Q You attempted to do it one time?
3 A That's right.
4 Q It didn't come through?
5 A No one maintained an interest in that consequence,
6 sir.
6 Q Did you at any point in time prepare or have
8 implemented an interactive CD-ROM or any other form of
9 software which could have been utilized by members for
10 interfacing with other members?
11 A As I previously testified, sir, in 1989, 1990,
12 CD-ROMs were not in use.
13 Q But there were computers in those days, right?

14 A Yes.
15 Q And in those days you were also able to have disks;
16 is that correct?
17 A The technology existed, yes, sir.
18 Q Did you do anything like that?
19 A No, sir.
20 Q And did your organization maintain any form of
21 conference facilities that facilitated members to have
22 conferences on your premises?
23 A As I previously testified, sir, the answer is no to
24 that question.
25 Q And -- withdrawn.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4609
Watstein-cross/Nelson

1 As I previously stated with respect to networks,
2 as a contention, attempts to hold a seminar on one
3 occasion that did not occur, there was no reason or
4 facility for members to network with other members?
5 A You are not correct, sir.
6 Q They would be able to look inside the registry in
6 order to find that; is t hat correct?
8 A Yes. Because we had phone numbers in our directory,
9 yes, sir.
10 MR. NELSON: I ask that it be stricken as not
11 responsive.
12 THE COURT: That answer is stricken as not
13 responsive. The jury is instructed to disregard it.
14 Q Would I be correct in stating in summary you
15 eventually entered a guilty plea in March of 1993, where
16 you admitted you defrauded literally thousands of
17 customers out of close to 14 million dollars?
18 A Yes, sir.
19 Q You were arrested on that charge on May 20th, 1992;
20 is that right?
21 A As I previously testified, yes, sir.
22 Q I would like to go back in time a little bit.
23 Am I correct that as far back as 1990 you were
24 aware that you were under investigation by postal
25 authorities, because a search warrant was executed on your

HARRY RAPAPORT, CSR, CP, CM OFFICIAL CO URT REPORTER
4610
Watstein-cross/Nelson

1 Cutters Mill Road offices in June of 1990?
2 A I was aware prior to that, sir.
3 Q Despite the fact of your awareness, a search warrant
4 was executed in June of 1990 at your principal place of
5 business; is that correct?
6 A Yes.
6 Q And the government followed up seeking other
8 documents of yours because they believed you secreted them
9 in your North Shore Tower residence in July of 1991; is
10 that correct?
11 A I can't answer that question yes or no, sir.
12 Q Did they execute a search warrant?
13 A Yes.
14 Q In July of 1991?
15 A That's correct.
16 Q And did you ever look at the affidavit in support of
17 the search warrant?
18 A Not recently.
19 Q Are you aware that the search warrant indicated that
20 the government believed that you had taken the document

21 from the Cutters Mill Road location --
22 THE COURT: Starts over again. You were revved
23 up.
24 Q Did you review your search warrants with the
25 attorneys at any point in time with respect to the search

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4611
Watstein-cross/Nelson

1 executed on your residence at any point in time?
2 A Not in detail, sir, no.
3 Q Do you recall that the search warrants affidavit
4 stated that the government believed that you had moved
5 documents from the Cutters Mill Road location to your home
6 for the purposes of keeping them from the government?
6 A I don't have a recollection of that.
8 Q Was there another search warrant executed a month
9 later in August of 1981, at the mansion you were building
10 in Mill Neck?
11 A Yes, sir.
12 Q And again, with the government now looking for the

13 documents that they couldn't find that they believed you
14 had now moved from the Cutters Mill Road location to North
15 Shore Towers, and now to the mansion you were building on
16 Mill Neck Road?
17 A I don't understand the question, can you rephrase
18 it?
19 Q Was there a third search warrant executed?
20 A Yes.
21 Q And in fact, was there a third search warrant
22 executed on a storage facility you maintained where you
23 had other business records?
24 A That's correct.
25 Q That's at the end of August of 1991; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4612
Watstein-cross/Nelson

1 A Yes, sir.
2 Q Am I correct that after all these search warrants
3 were executed there eventually came a point in time in
4 late May, 1992, where the postal authorities finally did
5 arrest you for mail fraud and tax evasion.
6 A I answered the questions three or four times
6 already.
8 Q You can --
9 MR. NEVILLE: Can you ask the witness to answer
10 yes or no and not explain?
11 THE COURT: Yes.
12 I was going to say that many of these questions
13 were asked previously. When it becomes too repetitious, I
14 will stop it.
15 Until then you don't have to precede the answer
16 with I already answered that. The jury recalls what you
17 have answered and that these questions, because of the
18 large number of defendants and lawyers who will
19 cross-examine you, there will necessarily be some
20 questions which are repetitive.
21 THE WITNESS: Yes, sir.
22 THE COURT: In addition, there are some questions
23 which are a predicate for other questions, predicate
24 repetitive questions. So you don't have to say I
25 previously answere d that. The jury remembers what you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4613
Watstein-cross/Nelson

1 previously answered.
2 THE WITNESS: Yes, sir.
3 THE COURT: All right?
4 THE WITNESS: Yes, sir.
5 MR. NELSON: Thank you.
6 Q In addition to you being arrested your wife was
6 arrested; is that correct?
8 A Yes.
9 Q And she was likewise arrested for charges in
10 participating in your business in a fraudulent manner and
11 assists in tax evasion; is that correct?
12 A No, sir.
13 Q Just participation in the business?
14 A That was not the nature of the charge, sir.
15 THE COURT: Mr. Nelson, I am going to interrupt
16 you and tell you the same thing.
17 There are of necessity some of the questions are
18 repetitive. Please do not go over it over and over
19 again. It goes for all the lawyers . And I will stop
20 you.
21 MR. NELSON: I will understand. Some of them are
22 repetitive questions.
23 THE COURT: We heard these things, and they were
24 repeated several times. The jury knows he was arrested
25 four times already.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4614
Watstein-cross/Nelson

1 MR. NELSON: I understand and I will move on.
2 Q You did enter a plea in May of 1993?
3 A March.
4 Q March of 1993?
5 A Yes, sir.
6 Q That was eight months after your arrest, but two
6 years after the first search warrant was executed on your
8 premises; is that right?
9 A Yes, 23 months, yes, sir.
10 Q And would I be correct in stating that between the
11 date of the execution of the search warrants upon your
12 business and the entry of your guilty plea in March of
13 1993, you became aware t hat the lead agent conducting the
14 investigation against you was postal inspector Martin
15 Biegelman?
16 A Your timing is not correct, sir, no.
17 Q When did you become aware?
18 A In May of 1990.
19 Q So, you became aware very shortly before the first
20 search warrant was executed that Inspector Biegelman was
21 the lead investigator investigating your company; is that
22 right?
23 A I can't answer that question with a yes or no, sir.
24 Q You knew in 1990, at the time that the first search
25 warrant was executed and the time of your arrest that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4615
Watstein-cross/Nelson

1 Inspector Biegelman was in charge of the investigation; is
2 that right?
3 A He was not initially in charge.
4 Q There was another inspector but he eventually became
5 in charge?
6 A Y es.
6 Q And he was in charge at the period of name that you
8 actually were arrested; is that correct?
9 A Yes, sir.
10 Q And am I correct that during the course of the eight
11 months between your arrest and the guilty plea, you and
12 your attorney met with Agent Biegelman and other federal
13 agents on a number of different occasions?
14 A Would you repeat the question, please?
15 Q Between the day you were arrested and the day you
16 entered your guilty plea, from March 1993 -- '92, excuse
17 me -- excuse me, from May of 1992, to March of 1993, you
18 met with your attorney and agents of the government
19 including Inspector Biegelman on a number of occasions?
20 A Yes, sir.
21 Q And you discussed your case in some detail during
22 that period of months; is that correct?
23 A There were various discussions, yes.
24 Q Am I correct that the Assista nt United States
25 Attorney handling the investigation at that time, Seth

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4616
Watstein-cross/Nelson

1 Marvin discussed with you what the evidence against you
2 was, right? You sat there in a room, he told you this is
3 what we feel the evidence is against you, and he laid it
4 out to you and your attorney; is that right?
5 A No, sir, not correct.
6 Q Did the inspector do that?
6 A Not to the best of my recollection, no.
8 Q Did one of your attorneys come back to you after
9 meeting with the Assistant United States Attorney and say,
10 look, Mr. West, this is what the prosecutor tells me the
11 evidence is against you?
12 A I don't believe there was any such conversation of
13 substance like that.
14 Q You were never aware between the dates you were
15 arrested, the date you we re arrested, and the date you
16 entered your guilty plea what the nature of the
17 government's evidence was against you?
18 A I can't answer that question with a yes or no, sir.
19 Q You never discussed with your attorney, what your
20 attorney felt was the nature of the evidence against you?
21 A The answer to that question is: Yes, sir.
22 Q And you went over with your attorney what it was that
23 your attorney felt based upon discussions with the
24 prosecution and a review of documents which were provided
25 by the prosecution, the government would or would not be

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4617
Watstein-cross/Nelson

1 able to prove against you; is that right?
2 A I can't answer that question with a yes or no, sir.
3 Q Well, there came a point in time where you entered a
4 guilty plea; is that right?
5 A Tha t is correct.
6 Q And that was a knowing and intelligent plea of
6 guilty; is that right?
8 A Yes, sir.
9 Q And it was premised upon your true belief that you
10 were guilty; is that correct?
11 A Yes, sir.
12 Q And it is also premised upon the belief that the --
13 the belief that the government could prove the case
14 against you beyond a reasonable doubt; is that correct?
15 A Yes.
16 Q In order to make such an informed decision, you spoke
17 with your attorney about what your attorney's belief was
18 concerning the weight, the credibility of the evidence
19 that the government had against you; isn't that right?
20 A The answer to that question is: Yes, sir.
21 Q And he acquired -- he or she acquired that evidence
22 or information from discussions with the prosecution?
23 A No, sir.
24 Q Is that correct?
25 A No, sir, it is not.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4618
Watstein-cross/Nelson

1 Q It is based on discussions with you?
2 A No, sir. I can't answer that question with a yes or
3 no, sir.
4 Q Would I be fair in saying then that it was based on
5 discussions with the prosecution, discussions with you,
6 and an investigation conducted by he or her, and documents
6 provided by the government to your attorney?
8 A I am not aware of any substantive discussions that my
9 attorney had with the government as far as what they felt
10 was the balance of evidence. But there are many ways in
11 which my attorney advised me that he felt the guilty plea
12 would be appropriate.
13 Q And based on those discussions did you form the
14 belief in your mind that the government would be able to
15 prove their case against you beyond a reasonable doubt,

16 sir?
17 A Yes, sir.
18 Q And following those discussions, am I correct, sir,
19 that your attorney also advised you of the potential
20 penalties that you would face if you went to trial and you
21 were found guilty?
22 A Yes, sir.
23 Q And he also went over with you the potential
24 penalties you would face based upon a plea of guilty; is
25 that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4619
Watstein-cross/Nelson

1 A In substance that's correct, yes.
2 Q And after you reviewed these things with your
3 attorney -- let me back up for a moment.
4 He also went over with you the federal sentencing
5 guidelines; is that correct?
6 A That's correct.
6 Q And he went over with you the possible sentence you
8 could receive under the guidelines?
9 A That is correct.
10 Q Did he also rev iew with you the possible sentence
11 that your wife could receive under the guidelines?
12 A I don't have a complete recollection about that.
13 Although I discussed it with my wife's attorney.
14 Q Did your wife's attorney advise you of the possible
15 sentence she could face under the federal guidelines?
16 A He misadvised me.
17 Q Were you given advice concerning that?
18 A Yes, sir.
19 Q Based on that advice did you agree at the time that
20 you agreed to enter a plea of guilty that you would
21 receive a mandatory jail sentence under the federal
22 sentencing guidelines?
23 A In the absence of a cooperation agreement?
24 Q In the absence of a cooperation agreement.
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4620
Watstein-cross/Nelson

1 Q Did you also believe absent cooperation your wife
2 would also be facing a mandatory period of incarceration?
3 A No, sir.
4 Q He had advised you that your wife would not be
5 eligible for a jail sentence, that it was discretionary on
6 the part of the Judge; is that right?
6 A Substantially, yes.
8 Q He indicated it was possible, but it might not occur
9 that your wife would go to jail; is that right?
10 A No, sir, that's not correct, sir.
11 Q Well, you believed you could absent a cooperation
12 agreement; is that right?
13 A Yes, sir.
14 Q You believed there was a chance your wife might?
15 A No, sir.
16 Q You thought there was no chance she could?
17 A I was told her only potential penalty would be house
18 arrest.
19 Q Now, am I correct that following these discussions
20 and review of your options, you actually elected to give
21 up your right to go to trial and enter a guilty plea; is

22 that right?
23 A That is correct.
24 Q You pled guilty in March of 1993 in this courthouse
25 before Judge Mishler; is that right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4621
Watstein-cross/Nelson

1 A Yes.
2 Q And I will not belabor the points that Mr. Jenks went
3 over with you yesterday, the fact that you pled guilty to
4 six separate federal felony charges; is that right?
5 A Yes, sir.
6 Q And that was pursuant to a plea agreement you
6 negotiated or your attorney negotiated on your behalf; is
8 that correct?
9 A That is correct.
10 Q I would like to show you what is marked as
11 Defendant's Exhibit AL. You were shown this yesterday by
12 Mr. Jenks; is that correct?
13 (Handed to the witness.)
14 A Yes, sir.
15 Q This is your plea agreement; is that correct?
16 A That is correc t.
17 Q I will not go over the plea agreement in great
18 detail. Mr. Jenks did that. I will not belabor the
19 points.
20 Would I be correct -- I would like to turn your
21 attention to page 4, paragraph 2-D of the agreement.
22 Am I correct that paragraph 2-D provides that
23 based upon a multiple count analysis, the office -- that
24 means the United States attorney's office -- estimates
25 that likely combined adjusted offense level to be 29, and

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4622
Watstein-cross/Nelson

1 that with a two level reduction for acceptance of
2 responsibility under guideline section 3E1.1, the total
3 offense level it would be 27, which carries a range of
4 imprisonment of 70 to 87 months.
5 Is that correct, sir?
6 A That is correct.
6 Q Would I be correct in stating that that means absent

8 your cooperation, it would be mandatory for you to receive
9 a minimum sentence of 70 months, or close to six years in
10 jail?
11 A That is correct.
12 Q And I am correct that you were advised by your
13 attorney during the course of your negotiations that there
14 were circumstances, and even if a jail sentence was
15 mandatory and the judge is required to send you to jail,
16 he doesn't have to do so if you provide substantial
17 assistance to the government; is that right?
18 A That is exactly the phraseology that he told me, yes,
19 sir.
20 Q And am I correct that you were advised if you
21 provided the substantial assistance to the government,
22 that the prosecutor, in your instance, it is Seth Marvin,
23 can, if he or she so chooses, writing a letter to the
24 judge, telling him, in this case Judge Mishler, about your
25 substantial assistance to law enforcement personnel?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4623
Watstein-cross/Nelson

1 A That is correct.
2 Q And am I correct that you were advised that under
3 section 5K1.1 of the federal sentencing guidelines, that
4 if the government writes such a letter to the judge, the
5 judge no longer is required to send you to jail, the judge
6 now has discretion to give you a sentence lower than that
6 mandatory 70 to 82 month sentence; is that right?
8 A Yes, sir.
9 Q In effect it would be an award for your cooperation
10 for substantial assistance to the government for the
11 prosecution of other people; is that correct?
12 A Substantial assistance, yes.
13 Q But the important thing is not substantial assistance
14 relating to what you did, but substantial assistance as it
15 relates to what other people did; is that right?
16 A That is not my understanding at all, sir.
17 Q Were you told -- let me back up for a moment.
18 Were you told that the government wanted to find
19 out information about what other people did?
20 A Yes, sir.
21 Q And you were already agreeing to plead guilty; is
22 that right?
23 A Yes, sir.
24 Q And they didn't need more evidence against you?
25 A I may not have understood your question, if you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4624
Watstein-cross/Nelson

1 repeat the question.
2 Q Let me rephrase it then.
3 The agreement provides that you have to provide
4 substantial assistance in the investigation of other
5 people; is that right?
6 A That is correct. Now I understand your question.
6 Yes, sir.
8 Q Maybe I wasn't speaking clearly. I apologize.
9 In order to get this let ter, you have to assist
10 the government in your investigation of what the
11 government believed other people were engaging in, was to
12 be unlawful and criminal activity; is that right?
13 A Might be engaging in, yes, sir.
14 Q You didn't want to go to jail for the mandatory
15 six-year period of time that the agreement provided for;
16 is that right?
17 A Of course.
18 Q And, certainly, you wanted to make sure that your
19 wife received the best possible benefit she could receive,
20 and at worst it would be home detention and maybe not even
21 that; is that correct?
22 A I can't answer that question with a yes or no, sir.
23 Q Well, am I correct -- I would like to turn to the
24 last page of the agreement -- that you entered the plea
25 agreement on September 8th, 1993?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4625
Wa tstein-cross/Nelson

1 A '92, sir.
2 Q '92, I apologize.
3 A Yes.
4 Q And you met with the government before you entered
5 the agreement, and many times after you entered the
6 agreement; is that right?
6 A That is correct.
8 Q And you met with Assistant United States Attorney
9 Seth Marvin and Inspector Biegelman during your
10 negotiations of this agreement and shortly thereafter; is
11 that right?
12 A And other parties as well, yes, sir.
13 Q Would I be correct in stating that a pretty busy
14 period of time at least during your initial phase of
15 cooperation would have been during July and August of
16 1992, where you were debriefed by the government about
17 your role in your business?
18 A I wouldn't characterize it as a particularly busy
19 period of time, no.
20 Q You met a number of times; is that right?
21 A We met once or twice, I believe.
22 Q And you went over what you did in the operation of
23 your businesses; is that right?
24 A Yes.
25 Q You went over different documents they showed to you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4626
Watstein-cross/Nelson

1 in order to provide them with a road map of how things
2 operated in your business; is that right?
3 A I think that's substantially correct, yes.
4 Q And you also went through with them the role and
5 responsibility of different people who were employees of
6 yours during that period of time; is that correct, sir?
6 A I don't think we had that discussion during the
8 period of time you just mentioned, no.
9 Q And after you signed your plea agreement on September
10 8th, 1992, you continued to meet with Inspector Biegelman,
11 Assistant United States Attorney Marvin, and other
12 investigators; is that right?
13 A Yes.
14 Q And those would be the fall of 1992; is that right?
15 A I am not sure if there were substantive meetings in
16 the fall of 1992.
17 Q Well, during that period of time, do you recall
18 whether or not you had any meetings to discuss the conduct
19 and role of other employees of yours?
20 A I am not sure if the first meeting was not until the
21 winter of 1992.
22 Q When you say the winter of 1992, would that have
23 been --
24 A December.
25 Q December of 1992?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4627
Watstein-cross/Nelson

1 A Yes.
2 Q Okay.
3 Was that at the United States Attorney's office
4 in Brooklyn?
5 A My recollection is that it was in the post office in
6 Hicksville. But I am not quite sure of the exact
6 lo cation.
8 Q Who did you meet within December of 1992?
9 A I believe it was Officer Leonard.
10 Q Would I be correct as of the time you entered your
11 plea agreement, Postal Inspector Leonard became the point
12 person in your cooperation as a witness?
13 A Sometime later, yes.
14 Q Am I correct that prior to Inspector Leonard becoming
15 involved the point person was Inspector Biegelman?
16 A Yes.
17 Q And up to that time, other than the information you
18 provided about yourself, the only other people you
19 provided information about were people who had been
20 employees of yours; is that right?
21 A No, that's not true, sir.
22 Q Well, did you provide information with respect to
23 employees of yours?
24 A I don't believe in that time period you are referring
25 to. The answer is yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4628
Watstein-cross/Nelson

1 Q I am talking about before December of 1992?
2 A I don't believe that was the substantive discussion,
3 no.
4 Q They didn't ask you about any of your employees?
5 A I don't have a recollection in that particular time
6 period that you are mentioning, no.
6 Q Did they ask you, and did you agree to testify
8 against other employees such as Cathy Shkinder,
9 S H K I N D E R, and Linda Zeitzer, Z E I T Z E R?
10 A Yes, subsequent to the period you just described,
11 sir.
12 Q Well, initially the government asked you to testify
13 against people that implemented -- implemented in the
14 scheme you devised?
15 A Yes, sir.
16 Q That's part of the scheme, isn't it?
17 A That's correct.
18 Q The government wanted you to help put the people in
19 jail who helped you make money; is that right, yes or no?
20 A The way you phrased the question, the answer is yes.
21 Q You, of course, were willing to do that to keep
22 yourself out of jail; is that right?
23 A That is correct.
24 Q Now, I believe you testified that in January of 1993,
25 you made recordings on two different dates of former

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4629
Watstein-cross/Nelson

1 employees of Oxford Who's Who, and Who's Who Worldwide; is
2 that correct?
3 A Yes, sir.
4 Q Am I correct that Inspector Biegelman or it might
5 have been Inspector Leonard during this early period of
6 time, in addition to asking you about employees, also
6 asked you about other people out there, other Who's Who
8 type of organizations?
9 A Your minor premise in the question is inaccurate, so
10 I can't respond to it.
11 Q Who asked you about it?

12 A Officer Leonard.
13 Q Okay.
14 A But not about the employees of the company.
15 Q They asked you about the companies; is that right?
16 A They asked me about the companies Oxford and Who's
17 Who Worldwide, but not about my company.
18 Q They didn't care about your company?
19 A In that particular time period you specified, sir.
20 Q So, the inspectors were interested in your former
21 competitors?
22 A In Who's Who Worldwide and Oxford Who's Who, yes,
23 sir.
24 Q And both of those companies had been, prior to your
25 company being shut down a competitor of yours; is that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4630
Watstein-cross/Nelson

1 right?
2 A An accurate statement, sir.
3 Q And it was during these meetings that Inspector
4 Leonard asked you about the other Who's Who organizations

5 that you were aware of which were doing business on Long
6 Island; is that right?
6 A That is correct.
8 Q And am I correct that you told Inspector Leonard that
9 these other companies were -- at least in your opinion --
10 doing the same thing that you were being prosecuted for;
11 is that right?
12 A In substance that's correct. It was not my
13 phraseology, though.
14 Q Thank you.
15 Now, it was about this time during the late fall
16 of 1992, that you started telling the inspector about
17 Who's Who Worldwide and Bruce Gordon; is that right?
18 A I don't think it is an accurate statement about me
19 telling the inspector. I was responsive to the questions,
20 that would be accurate.
21 Q You never worked for Who's Who Worldwide, had you?
22 A No, sir.
23 Q You never worked for Oxford Who's Who, had you?
24 A No, sir.
25 Q Y ou had never been inside Who's Who Worldwide, had

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4631
Watstein-cross/Nelson

1 you, other than the lobby of 1983 Marcus Avenue?
2 A That's correct, sir.
3 Q You had never been inside their physical premises; is
4 that right?
5 A No, sir.
6 Q And you had never seen the solicitation letter sent
6 out by Who's Who Worldwide in the early winter of 1992,
8 had you?
9 A Yes, I had.
10 Q And who had provided that to you?
11 A It was sent to me. I was solicited from a mailing
12 list.
13 Q Had you been provided with -- had you had a copy of
14 the sales presentation of Who's Who Worldwide?
15 A What time period are you talking about, sir?
16 Q Early 1992 -- late 1992, I am sorry.
17 A No, sir.
18 Q And you also told Inspector Leonard everything you
19 knew abo ut the telemarketing company Oxford Who's Who; is
20 that right?
21 A Yes, sir.
22 Q And you had never been inside that facility either,
23 had you?
24 A That is correct.
25 Q Now, in the fall of 1992 -- when I am speaking the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4632
Watstein-cross/Nelson

1 fall, I am talking about December, and I guess that's
2 early winter, of 1992, you were aware that the
3 telemarketing business by its very nature, led to a large
4 turnover in personnel; is that right?
5 A Not necessarily true.
6 Q As far as the salespeople were concerned, they came
6 and went with some regularity?
8 A Are you talking about telemarketing in general or
9 telemarketing Who's Who Worldwide.
10 Q In Who's Who type companies?
11 A I believe that's accurate testimony.
12 Q Am I correct that you tes tified in January of 1993 at
13 your own initiative and your own expense you placed ads in
14 the New York Times and Newsday advertising that you were
15 starting a new Who's Who company; that you were a former
16 operator of a Who's Who company; and that you were looking
17 for former employees of other Who's Who companies to come
18 to work for you?
19 A I can't answer that question with a yes or no, sir.
20 Q Let's break it down then and see which ones you might
21 be able to answer.
22 A That makes sense.
23 Q Was there an ad in the New York Times?
24 A Yes, sir.
25 Q Was there an ad in Newsday?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4633
Watstein-cross/Nelson

1 A Yes, sir.
2 Q Did you pay for the ad yourself?
3 A Yes, sir.
4 Q Did you conduct interviews at the Garden City Hotel?
5 A Yes, at the request of the postal inspector, yes,
6 sir.
6 Q And were those on two different dates?
8 A Yes, sir.
9 Q Were they in a hotel room?
10 A Yes, sir.
11 Q Did you pay for the hotel room yourself?
12 A I did.
13 Q So, you paid on your own for the ads and the room, in
14 order to bring people to the hotel who were former
15 employees of the company in order to interview them; is
16 that right?
17 A That is correct, sir.
18 Q Now, the purpose -- withdrawn.
19 You weren't really starting any new company; is
20 that right?
21 A That is correct.
22 Q And the purpose of the interview was to facilitate
23 acquiring evidence against these other Who's Who entities,
24 your former competitors that Inspector Biegelman and
25 Inspector Leonard had asked you about during the period of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT R EPORTER
4634
Watstein-cross/Nelson

1 your active cooperation during the fall and early winter
2 of 1992; is that right?
3 A It is correct.
4 Q All right.
5 Now, you are a well educated -- certainly a very
6 intelligent man, sir. You discussed your credentials and
6 Mr. Jenks has gone through that in some detail.
8 You knew, am I correct, that at the time you went
9 out and spent your own money on the ads and the room, in
10 order to try to ensnare and entrap the people coming
11 there, that in your role as the organizer, supervisor and
12 leader of the business you created, you had to get more
13 evidence than just the lowly salespeople of your company
14 in order to convince Judge Mishler and the government at
15 the time of your -- that your eventual sentence was going
16 to come up that you shouldn't go to jail; is that right?
17 A No, sir.
18 Q You felt that by providing a guilty plea and ratting
19 out your former employees that would be more than enough
20 evidence for you not to get 70 months in jail, and that
21 you could have gotten your six months playing in your
22 house as you wound up getting?
23 MR. WHITE: Objection.
24 THE COURT: Sustained.
25 A I cannot answer that question --

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4635
Watstein-cross/Nelson

1 THE COURT: I sustained the objection.
2 THE WITNESS: Thank you, sir. Excuse me.
3 Q You knew as of January of 1993, when at your own
4 expense you placed the ads and at your own expense you
5 rented the hotel rooms that it was important for you to
6 get some real players, to get some people who were at
6 least as bad as you; isn't that right?
8 A No, sir.
9 Q You didn't feel that way?

10 A No, sir.
11 Q And the inspectors and the agents told you that that
12 was not important. Your cooperation was sufficient just
13 based upon the fact that you were prepared to testify
14 against your employees; is that right?
15 A I can't answer that question with a yes or no, sir.
16 Q Okay.
17 Well, am I correct that you decided that a good
18 place to get evidence against these target companies, that
19 is your former competitors, might be from the former
20 employees of these companies, who were out there looking
21 for jobs?
22 A That is an accurate statement, sir.
23 Q And am I correct that it was your plan to run the ad
24 in the paper to get telemarketing people to come for a job
25 interview for a new company you were setting up and that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4636
Watstein-cross/Nelson

1 you were going to conduct these interviews?
2 A My plan was approved by the post office, yes, sir.
3 Q But you came up with the scheme; is that right?
4 A The plan, yes, sir.
5 Q And the scheme you set up called for you to interview
6 the former employees of the target company that answered
6 the ad in an attempt to get incriminatory information
8 about the former companies that you worked for; is that
9 right?
10 A I can't answer that question with a yes or no, sir.
11 Q You recorded the interviews, didn't you?
12 A Yes, sir.
13 Q And it was your attention to record the interviews,
14 wasn't it?
15 A Yes, sir.
16 Q And your attention was to get incriminatory
17 information while you were there; is that right?
18 A No, sir.
19 Q It was your attention to hire them for a false and
20 fictitious company you weren't setting up, is that r ight?
21 A No, sir.
22 Q You were recording them to protect yourself?
23 A I can't answer your question like that. If you want
24 to ask an open-ended questions, I can respond fully.
25 Q I am sure you would like to, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4637
Watstein-cross/Nelson

1 A That's correct.
2 Q At your interviews that you conducted, you asked the
3 interviewees about specific things that you thought might
4 be improper with the former company's way of doing
5 business to see what their response would be; is that
6 right?
6 A That was an aspect of the interview, yes, sir.
8 Q Was it another aspect of the interview to review
9 their qualifications so you could actually employ these
10 people who had spent their time and effort to come to a
11 job interview?
12 A No, sir.
13 Q You weren 't going to setup the business, were you?
14 A No, sir.
15 Q You weren't going to hire any of these people, were
16 you?
17 A No, sir.
18 Q The sole purpose of this interview was to get them
19 recorded so you could get evidence that could help you
20 stay out of jail, right?
21 A No, sir.
22 Q No.
23 The questions you asked them during the course of
24 these interviews. You knew what to ask; is that right?
25 A As to what potential question would be appropriate,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4638
Watstein-cross/Nelson

1 yes, sir.
2 Q Did the inspectors give you a kind of script and list
3 of questions they wanted you to ask?
4 A No, sir.
5 Q You knew what to ask; is that right?
6 A I think I understood what questions would be
6 appropriate, yes, sir.
8 Q And you knew what to ask because a lot of these
9 things that you asked about is what you did at your
10 companies; is that right?
11 A That is correct.
12 Q Now, you claim you literally had written the book on
13 this type of fraudulent operation; is that correct?
14 A That is not an appropriate phrase, sir.
15 Q Am I correct that in order to further the plan, you
16 actually held the interviews of a job applicant at the
17 Garden City Hotel, I believe January 20th was one day. I
18 don't know what the other day was. Doing what the other
19 day was?
20 A No, sir.
21 Q Am I correct that this would be a good two months
22 before you actually entered your guilty plea?
23 A That is correct.
24 Q And you entered your guilty plea in March of 1993; is
25 that right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4639
Watstein-cross/Nelson

1 A Yes, sir.
2 Q And so, you were in the Garden City Hotel, and you
3 had rented the room, and you had paid for the ad, and you
4 were soliciting these people and reported them all as part
5 of your plan before you actually went into court to enter
6 a guilty plea; is that right?
6 A That is correct.
8 Q And the agreement that you signed, until you actually
9 pled guilty, didn't mean beans, did it?
10 A I don't understand what you mean by beans, sir.
11 Q Well, in other words, until you plead guilty before
12 the judge, the agreement doesn't really mean anything, it
13 doesn't mean anything until you've delivered the goods,
14 and you needed to deliver the goods before you entered
15 your guilty plea; isn't that right, sir?
16 A If you are yelling at me I can't respond to your
17 questions. Would you repeat the question slowly, please.
18 MR. SCHOE R: Objection.
19 Q I will withdraw the question.
20 A Thank you.
21 Q I will withdraw the question.
22 You had these meetings in January of 1993; is
23 that right?
24 A You are referring to the meetings at the Garden City
25 Hotel?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4640
Watstein-cross/Nelson

1 Q Yes.
2 A Yes.
3 Q You pled guilty in March of 1993; is that right?
4 A Yes.
5 Q You entered your plea agreement back in September of
6 1992?
6 A Yes, sir.
8 Q And that plea agreement provided unless the
9 government determined you provided substantial
10 cooperation, you would be doing a minimum of 70 months or
11 six years in jail; is that right?
12 A I had answered that. Yes, sir.
13 Q And so, it was important for you in conducting these
14 interviews to show the agents your ability to acquire
15 significant evidence for the government in new
16 investigations; isn't that right, sir?
17 A Significant evidence is not significant assistance,
18 sir.
19 Q It was important for you to show to the government
20 your ability to deliver the goods. Wasn't it, sir?
21 A No, sir.
22 In my understanding at that time, no, sir.
23 Q You didn't think it was important?
24 A It was important to provide significant assistance.
25 Q Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4641
Watstein-cross/Nelson

1 It was so important to you that you paid for the
2 ad and you paid for the room; is that right?
3 A Yes, sir.
4 Q You had to get other fish to fry; isn't that right,
5 sir?
6 A No, sir, that was not the understanding that I had at
6 that time.
8 Q Up to that point, all you had given them was the
9 names of your competitors and your former employees; isn't
10 that right?
11 A No, sir.
12 Q Well. I would like to show you --
13 (Mr. Nelson confers with Mr. White.)
14 Q Mr. West, I would like to show you 3500-22-I.
15 (Handed to the witness.)
16 Q This is the 5K letter eventually written on your
17 behalf?
18 A Yes, sir.
19 Q I would like you to peruse the documents for a
20 moment. Look through it. Can you tell me, is there
21 anywhere in that document that it reflects work that you
22 did on behalf of the government prior to September of
23 1992.
24 A This document does not reflect that. That's correct,
25 sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4642
Watstein-cross/Nelson

1 Q And this is a letter written to Judge Mishler by the
2 prosecutor for you detailing al l of the cooperation that
3 you provided in all of the investigations from the day
4 that you entered your plea agreement in September of 1992,
5 and the date that you were sentenced in July of 1995; is
6 that correct?
6 A It did not detail all the cooperation, sir, that's
8 correct.
9 Q And so, it just happened to leave out the work that
10 you did before you came to this meeting, right?
11 A No, sir.
12 Q It is not in there, is it?
13 A If you let me respond --
14 Q Is it in there, yes or no?
15 A No, sir, it is not in that document.
16 Q Would I be correct in stating that when you conducted
17 these interviews at the Garden City Hotel you utilized
18 your best techniques in order to make sure that you
19 acquired the information that the government was seeking
20 and that you needed to hear?
21 A The answer to the first part of your quest ion is
22 yes. The answer to the second part is no.
23 Q You used your best sales techniques in order to
24 acquire information; is that right?
25 A That is correct, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4643
Watstein-cross/Nelson

1 Q You wanted as best as you could to use every
2 conceivable means at your disposal to elicit, cajole,
3 ensnare, convince, the person in the interview to say what
4 it was that you needed to hear; is that right?
5 A No, sir. That's totally inaccurate.
6 Q You wanted as hard as you could to try to get the
6 information that you felt could help you; isn't that
8 right?
9 A No, sir, it was not the objective of the meeting.
10 Q The objective of the meeting was to develop evidence;
11 is that right?
12 A That's correct, sir.
13 Q And in developing that evidence you tried to us e your
14 best techniques as an undercover agent to get that; is
15 that right?
16 A That is more accurately phrased, yes, sir.
17 Q And you drew upon your considerable skills in
18 writing, speaking and public manipulation in order to be
19 able to acquire that information; is that right?
20 A The answer to your minor, major premise is correct.
21 Your conclusion is incorrect.
22 Q And on January 20th, 1993, you actually interviewed
23 an individual by the name of Frank Martin; is that right?
24 A Yes, sir.
25 Q And he was never an employee of your company, was he?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4644
Watstein-cross/Nelson

1 A That is correct.
2 Q And you had never met him before this interview; is
3 that right?
4 A That's correct.
5 Q And, however, you did speak with him before this
6 inter view; is that right?
6 A I don't have a recollection of speaking with him
8 before the interview. It is possible, but I don't believe
9 so.
10 Q Well --
11 A I am almost positive I did not. He did speak to my
12 wife, though.
13 Q You made it a point of recording the interviews
14 conducted at the hotel; is that right?
15 A That is correct, sir.
16 Q And you didn't record any of the telephone
17 conversations conducted between these people you were
18 ensnaring to come to the hotel, did you?
19 A I had no such conversations with the people, sir.
20 Q You had your wife do that, right?
21 A My wife was instructed by Inspector Biegelman what to
22 do. I had no participation in that.
23 Q And was Inspector Biegelman to your knowledge present
24 during the course of the telephone conversations between
25 the people who called in response to the a d and your wife?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4645
Watstein-cross/Nelson

1 A No, sir.
2 Q Did Inspector Biegelman assist you and your wife in
3 screening through the people who were applying for the job
4 to see which people to bring to the hotel room?
5 A Pardon me, sir. I need to correct one of the answers
6 I gave you which upon reflection was not purely accurate.
6 MR. NEVILLE: Objection.
8 Q The government will get to that later.
9 THE COURT: No. Overruled. Objection
10 overruled. You say one of your answers were not
11 accurate?
12 THE WITNESS: Yes.
13 THE COURT: What answer?
14 THE WITNESS: The answer that's the recording of
15 the conversations, there was some recording of
16 conversations at the request of the postal inspector.
17 Q I see.
18 You mean to say some of the telephone

19 conversations preliminary to the interviews themselves in
20 the hotel were recorded?
21 A No, a by-product of that was recorded when my wife
22 was threatened by the former owners of Oxford's Who's Who,
23 and at the instruction of Inspector Biegelman we secured a
24 tape recorder and recorded a subsequent threatening
25 conversation, which was a by-product of the phone

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4646
Watstein-cross/Nelson

1 interviews that we had.
2 MR. NEVILLE: Objection. Move to strike as not
3 responsive, your Honor.
4 THE COURT: No. Motion denied.
5 Q Now, the former principal of Oxford Who's Who, he
6 wasn't interviewed at one of these job interviews, was he?
6 A No.
8 Q It was someone who had been a former employee who was
9 interviewed, right?
10 A Would you rephrase the question? You are referring
11 to the interview itself?
12 Q The interview. During the course of these two days
13 of interviews at the Garden City Hotel, you interviewed
14 Frank Martin; is that correct?
15 A Yes, sir.
16 Q And you interviewed one other person to my knowledge
17 from Who's Who Worldwide, who had been a former employee
18 of Who's Who Worldwide; is that correct?
19 A Yes, sir.
20 Q And you interviewed a number of people who had been
21 former employees of Oxford Who's Who; is that correct?
22 A Yes. And one of those gentlemen was an employee of
23 two companies, that's correct.
24 Q And Mr. Martin, he never called you back and
25 threatened you back in any way, did he?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4647
Watstein-cross/Nelson

1 A Not at all.
2 Q He was a perfect gentleman during the course of the
3 interviews?
4 A Yes, a total gentleman.
5 Q And other than the phone conversation that was taped,
6 you had no other discussion with the man, did you?
6 A No.
8 THE COURT: I want to instruct the jury that this
9 alleged threat by Oxford has nothing whatsoever to do with
10 anything in this case. You are not to regard it in any
11 way with respect to the government's burden of proof in
12 respect to any of the counts in this case.
13 MR. NELSON: Thank you, your Honor.
14 Q Now, did you become aware during the course of the
15 preliminary interviews that were conducted by telephone
16 that Mr. Martin had formerly been employed at Who's Who
17 Worldwide?
18 A Would you repeat that question, please?
19 Q Did you become aware through discussions with your
20 wife, I guess since she was doing the screening, that
21 Mr. Martin had been a former employee of Who's Who
22 Worldwide?
23 A Yes, sir.
24 Q Did you become aware of the fact that he formerly had
25 been one of the salesmen at Who's Who Worldwide?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4648
Watstein-cross/Nelson

1 A Yes.
2 Q And did either you or your wife advise him before he
3 came to the interview that the position that he was
4 interviewing for was a job for which you had budgeted a
5 salary of 50 to 75 thousand dollars per year?
6 A It was either advised him prior to the interview or
6 at the interview or both. I am not sure which.
8 Q Is it fair to say that when someone calls in in
9 response to an ad for an interview, they usually ask, how
10 much do I get paid for this job, what does it entail?
11 A Sometimes yes and sometimes no.
12 Q Had you agreed with your wife in advance if that

13 question is asked, you would tell them we are interested
14 for a sales personnel, someone who was to be a manager, we
15 budgeted the sales manager job at between 50 and 75 grand
16 a year?
17 A Yes, sir.
18 Q Okay.
19 Am I correct that you instructed your wife to
20 tell the people who were calling in that you were starting
21 a new business?
22 A That is correct.
23 Q And you told them that you were looking for new
24 employees?
25 A That's correct.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4649
Watstein-cross/Nelson

1 Q And did you have your wife mention during the course
2 of the recordings that you had been arrested on federal
3 mail fraud charges?
4 A You indicated in the course of the recordings?
5 Q Withdrawn.
6 During the course of the telephone conversations
6 when people were be ing interviewed for the job, when they
8 would ask what this company was going to be about, did you
9 advise any of the people coming to the interview, that
10 you, who were going to be the owner of the company, had an
11 outstanding federal felony arrest for mail fraud?
12 A I think you just asked if I advised, do you mean if
13 my wife advised?
14 Q Did your wife advise?
15 A No, sir.
16 Q Did you instruct her to tell people that?
17 A I was instructed that if I was --
18 MR. NEVILLE: I have no idea what that answer
19 was. Objection.
20 THE WITNESS: Let me repeat it.
21 THE COURT: Let's first hear the question.
22 MR. NELSON: I will hear the -- repeat the
23 question again.
24 Q Did you advise your wife, yes or no, to tell the
25 people who called about the job that you were going to be

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4650
Watstein-cross/Nelson

1 the principal of this business, and that you had an
2 outstanding arrest for federal mail fraud charges? Yes or
3 no?
4 A As phrased I cannot answer that question with a yes
5 or no.
6 Q Your arrest was public knowledge at that point; is
6 that correct?
8 A Yes, sir.
9 Q I believe you told us just before that prior to these
10 interviews being conducted you had told the government
11 about Oxford Who's Who; is that right?
12 A The government was well aware of Oxford Who's Who.
13 Q And you discussed with the government Who's Who
14 Worldwide; is that correct?
15 A Yes.
16 Q And at the time you conducted the interviews as a
17 result of your discussion, they had become targets of the
18 federal investigation; is that right?
19 A No, sir.
20 Q Well, following the phone discuss ions that your wife
21 had, am I correct that Mr. Martin was eventually
22 interviewed by you on January 20th, 1993?
23 A Yes, sir.
24 Q And you tape recorded that in a -- on a
25 microcassette?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4651
Watstein-cross/Nelson

1 A That is correct, sir.
2 Q You put the microcassette inside a little eyeglass
3 holder that you put on the desk in the hotel where you
4 were conducting the interview?
5 A Actually Inspector Leonard put it in the eyeglass
6 holder, that's correct.
6 Q And the government provided you with the recording
8 material?
9 A Yes, that's correct.
10 Q And they had taught you how to go about doing that;
11 is that right, is that correct?
12 A Yes, sir, that's correct.
13 Q And you listened to the recording sometime after it
14 was made; is t hat correct?
15 A Yes, sir.
16 Q How many times do you say you listened to the
17 recording?
18 A Four or five.
19 Q Did you do it alone or with any representative of the
20 government?
21 A All of my listening to the recording was alone.
22 Q Have you ever listened -- withdrawn.
23 Have you ever assisted in the preparation of a
24 transcript of those recordings?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4652
Watstein-cross/Nelson

1 Q And did you prepare those transcripts yourself, or
2 were you given a copy of the transcript for purposes of
3 correcting it?
4 A Given a copy for purposes of assuring it was
5 accurate.
6 Q I would like to provide you at this time with
6 Government's Exhibit 1379-A?
8 A Yes, sir.
9 Q Do you recognize that document, sir?
10 A Yes.

11 Q Am I correct that that is a transcript of the
12 recording made on January 20th, 1993?
13 A That is correct, sir.
14 Q By the way, sir, when did you arrive in New York for
15 purposes of this trial?
16 A On Monday at approximately 11:00 o'clock in the
17 morning. I had other business besides this trial,
18 however.
19 Q Had you reviewed the transcript and/or the tape with
20 the government in preparation for your testimony?
21 A Reviewed it as far as accuracy, yes, sir.
22 Q And did you review it since you arrived in New York?
23 A Yes, sir.
24 Q And did you go over it with any representatives of
25 the government?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4653
Watstein-cross/Nelson

1 A Would you define go over it, please?
2 Q Did you sit with Mr. White and Ms. Scott in
3 preparation for your testimon y here in court?
4 A Yes, sir.
5 Q Who did you meet with?
6 A Both the gentleman and the lady.
6 Q For how long do you say you met with the two of them
8 since your arrival in New York for purposes of your trial
9 testimony here?
10 A I would say in the aggregate, five hours or so.
11 Q And during the course of those five hours, did you
12 review the kind of questions that the government was going
13 to be asking you?
14 A In a generalized sense, yes, sir.
15 Q And did you go over the type of questions that it was
16 anticipated that defense attorneys might be asking you?
17 A In a generalized sense, yes.
18 Q Did you review the transcript with the government in
19 preparation of your testimony?
20 A Not in the time period you are referring to.
21 Q You did review it with the government prior to your
22 arrival in New York; is that correct, on other occasions?
23 A Actually I reviewed it for the government, but not
24 with the government.
25 Q Now, I would like to turn to certain portions of the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4654
Watstein-cross/Nelson

1 transcripts, if I may.
2 A Certainly.
3 Q Before we do that, if you can put on the headphones,
4 I would like to play to you, and it is starting on page 1,
5 a certain portion of the transcript.
6 (Tape is played.)
6 Q Now, am I correct, Mr. West, that at the very
8 beginning of the transcript, Mr. Martin tells you he had
9 read your book; is that right?
10 A Yes, sir. I don't know which book he referred to,
11 but, yes, sir.
12 Q How many books had you written?
13 A Eight.
14 Q Can you tell us the names of those books?
15 A Mental Calisthenics; How to Live to Be a Hundred; the
16 Encyclopedia of Telemarketing; In Search of Sales
17 Excellence --
18 MR. NEVILLE: Could you ask the witness to slow
19 down? I can't write all this down.
20 THE COURT: Well, we will repeat it afterward so
21 you can get it, Mr. Neville.
22 MR. NEVILLE: Thank you.
23 THE COURT: Go ahead.
24 THE WITNESS: How to Live Like a Millionaire; the
25 Power and Pleasure of Sex; and the Encyclopedia of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4655
Watstein-cross/Nelson

1 Database Marketing. There may be one other title as best
2 as I can recall.
3 Q The book How to Live Like a Millionaire.
4 THE COURT: Excuse me a moment.
5 Mr. Reporter, would you please repeat those
6 titles.
6 (Whereupon, the court reporter reads the
8 requested material.)
9 Q The book How to Live like a Millionaire, is that the

10 book with you and your wife on the cover with a Rolls
11 Royce?
12 A I am sure there is one or two like that, the -- it
13 goes back about 20 years ago.
14 Q Am I correct if Mr. Martin had done his homework to
15 what he believed to be a job interview, to know enough
16 about you, to know that you had written and authored
17 books; is that right?
18 A I think the term book would be more appropriate.
19 Q Would you agree it is not a bad idea that when you
20 are going to a job interview, where you are going to be
21 offered a salary between 50 and 75 thousands dollars that
22 you do a little homework before you come to the interview
23 because this might be something a -- which is pretty
24 important in your life?
25 A An accurate statement.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4656
Watstein-cross/Nelson

1 Q Would I be correct in stating that the effect of
2 salesmenship and having written a number of books about
3 salesmenship you are only too familiar with this, be that
4 salesmenship is on the phone or in person, is to get the
5 person you are speaking to, to believe that you are
6 actually interested in him or her?
6 A That certainly is a valid sales tactic.
8 Q And certainly claiming that you read that person's
9 book is a pretty good way to start off to try to impress a
10 person; isn't that right?
11 A I think it is a good way, yes.
12 Q And Frank Martin was trying to impress you because he
13 was looking for a job; isn't that right?
14 A I have no knowledge of what his intentions were. I
15 would assume that would be the case.
16 Q That's the reason you ran the ad, at least as far as
17 everybody else thought, they were there for a job; isn't
18 that right?
19 A Yes, sir.
20 Q And I would like to continue with the tape at this
21 point.
22 (Tape is played.)
23 Q Now, I would like to turn to the top of page 2 of the
24 transcript.
25 You told Frank Martin you were in the process of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4657
Watstein-cross/Nelson

1 opening a new Who's Who and buying another one; is that
2 right?
3 A That is correct.
4 Q And also, you told him that you were on a talent
5 search looking for new employees; is that right?
6 A That is correct.
6 Q And both of those statements, of course, were lies;
8 is that correct?
9 A Not as I construe a lie. Part of an investigation of
10 the U.S. post office.
11 Q Were both of those statements untrue?
12 A They were inaccurate.
13 Q Were both of those statements untrue, yes or n o?
14 A You have to define your use of "untrue," sir.
15 Q Were you buying a new Who's Who?
16 A No, sir.
17 Q Were you on a talent search for people to work Who's
18 Who?
19 A No, sir.
20 Q And did you own a Who's Who at that time, at the
21 present time?
22 A No, sir.
23 Q The jury can draw an inference as to what is a lie
24 and what is not.
25 You also were told -- told him that there were

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4658
Watstein-cross/Nelson

1 four Who's Who in existence in January of 1993; is that
2 right?
3 A Yes, sir.
4 Q Which Who's Whos were you talking about at that time?
5 A Is your question which Who's Who was in existence on
6 Long Island at that time?
6 Q You state that there was -- approximately 7 lines
8 down, as you know, there are four of them now.

9 Which four Who's Who organizations are you
10 thinking about at the time you made that statement in
11 1993?
12 A Oxford Who's Who, International Who's Who, Who's Who
13 Worldwide and a fourth company started by a lady named
14 Marina, M A R I N A, and I am not too familiar with the
15 name of that Who's Who.
16 Q And am I correct that after you commenced your
17 cooperation, you told the postal inspectors that you
18 believed all of those four Who's Who in your opinion were
19 operating in the same manner that you had?
20 A The phrase I used was a similar fashion, yes, sir.
21 Q And as a result of your discussions, those Who's Who
22 organizations, virtually all the Who's Who organizations
23 on existence on Long Island, except, of course, Marquis
24 Who's Who owned by Reed Elsevir became the subject of an
25 investigation that you were participating in that was

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4659
Watstein-cross/Nelson

1 being conducted by the postal inspectors; is that right?
2 A No, sir. Not to the best of my knowledge. It is not
3 an accurate statement, no.
4 Q Would I be correct in stating that as a result of
5 your need to be a cooperating witness, all of the Who's
6 Who entities on Long Island became targets for federal
6 investigation?
8 A No, sir, it would not be correct.
9 THE COURT: Is this a good time to take a break?
10 MR. NELSON: Yes, Judge, it would be a good time.
11 THE COURT: Members of the jury, we are going to
12 take a ten-minute recess.
13 Please do not discuss the case and keep an open
14 mind.
15 (Whereupon, at this time the jury left the
16 courtroom.)
17
18 (Whereupon, a recess is taken.)
19
20

21
22
23
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4660
Watstein-cross/Nelson

1 (Whereupon, the jury at this time entered the
2 courtroom.)
3 THE COURT: Please be seated, members of the
4 jury.
5 You may proceed, Mr. Nelson.
6 MR. NELSON: Thank you, your Honor.
6
8 CROSS-EXAMINATION (cont'd)
9 BY MR. NELSON:
10 Q Mr. West, I would like to direct your attention to
11 the third page of the transcript, around the middle of the
12 page -- wait a moment until the jury gets their copy of
13 the transcript. 1379 is the exhibit, and I am going to
14 page 3 at this time.
15 Am I correct that around the middle of the page
16 Mr. Martin advises you that he had returned to New York
17 from Florida in November of 1991?
18 A Yes, sir.
19 Q And am I correct that h e told you that prior to his
20 return to New York he had been a marketing consultant in
21 Florida?
22 A That is correct.
23 Q Okay.
24 And he advised you that he set up or assisted in
25 setting up a drug abuse testing laboratory in south

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4661
Watstein-cross/Nelson

1 Florida for the screening of employees to determine if
2 those employees were using any form of controlled
3 substance; is that right?
4 A Yes, sir.
5 Q And later during the course of your cooperation from
6 1993 to 1995, you returned to Florida and participated in
6 a number of different investigations where you assisted
8 the postal authorities, Internal Revenue Service and the
9 Department of Labor in various different investigations;
10 is that correct?
11 A That is correct.
12 Q Am I correct that you were never advised by any
13 agents of any of those entities that there was anything
14 unlawful or fraudulent about this drug testing laboratory
15 Frank Martin had assisted in establishing in Florida?
16 A I had no discussions about that, sir.
17 Q And you are aware of no evidence that this company
18 ever was or is under investigation; is that right?
19 A I have no knowledge about that.
20 Q Am I correct in stating that you lack any knowledge
21 of the fact that the company T O X I C T E C H, Toxictech,
22 is one of the largest drug testing laboratories servicing
23 private industry in south Florida?
24 A I have no knowledge of the company, sir.
25 Q I would like to turn your attention to the bottom of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4662
Watstein-cross/Nelson

1 page 3.
2 Am I correct that Frank Martin tol d you the
3 reason he returned to New York is because his mother had
4 had a heart attack?
5 A Yes, sir.
6 Q Did he advise you during that interview at any time
6 that he is an only child and at that time his mother was
8 84 years of age?
9 A Something to that effect was said.
10 Q I would like you to turn to page 4 of the transcript.
11 Am I correct that Frank Martin told you that he
12 started -- this is about the middle of the page -- that he
13 actually started working at Who's Who Worldwide in late
14 November 1991?
15 A Yes, sir.
16 Q And he told you as you move down on page 4 that there
17 came a point in time, approximately two months after he
18 started working at the company, that Bruce Gordon had
19 asked him whether or not he wished to manage in the
20 company, and he became a sales manager at that time; is
21 that right?

22 A That's what he stated, yes, sir.
23 Q I would like to direct your attention, if you go
24 forward for a moment, to page 7 of the transcript, about
25 two-thirds of the way down, where you ask Mr. Martin, when

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4663
Watstein-cross/Nelson

1 did you leave here officially, Frank?
2 He responds, November. So I was there almost a
3 year.
4 Is that right?
5 A Yes.
6 Q And would I be correct in stating that Frank Martin
6 was employed at Who's Who for a little less than a year;
8 is that correct?
9 A That's what he stated.
10 Q And that he had been a manager for maybe nine or ten
11 months of that period of time; is that correct?
12 A That's what he stated.
13 Q I would like to back up in the transcript to page 5
14 at this point; about halfway down the page.
15 Am I correct that Mr. Martin advised you that he
16 and Bruce Gordon had a falling out and that's the reason
17 why he left Who's Who Worldwide?
18 A I think it was more intense than that, but yes,
19 that's correct.
20 Q And am I correct on page 5 Frank Martin advises you
21 that the reason for this falling out was because Bruce
22 Gordon and he had a difference in management techniques?
23 A There were other reasons stated subsequently in the
24 transcript.
25 Q But this portion of the transcript. We are going to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4664
Watstein-cross/Nelson

1 work our way through the transcript.
2 A Where are you now?
3 Q This is on page 5 of the transcript, approximately
4 halfway down the page, where Mr. Martin states, to make a
5 long story again very, very short, we reached the point, a
6 p oint of no return, where Bruce, I think unofficially, I
6 think he had an ego problem with me being in control of
8 the room and people really enjoying my, my form of
9 management, umm, because I believe in positive
10 reinforcement as the ultimate management tool. You can't
11 brow beat people into producing for you, and that's what's
12 happening now, as a result of which morale is very low.
13 Production has faltered, something incredibly so.
14 He told you the reason for leaving the company?
15 A I believe he continues the sentence also.
16 Q That's what he states at a later point, but that is
17 what he stated at this point; is that correct?
18 A Yes.
19 Q And what I am stating in substance is what Mr. Martin
20 is stating there is that there is a different management
21 technique in the way Mr. Gordon was doing it, is it the
22 way Mr. Martin wanted to do things , one, positive
23 reinforcement, and the other brow beating his people; is
24 that what that states?
25 A As relating to that paragraph, yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4665
Watstein-cross/Nelson

1 Q And he indicated he believed this created an ego
2 conflict between him and Mr. Gordon which led to
3 Mr. Martin having to leave; is that right?
4 A Yes, sir.
5 Q On the same page a little further down, about
6 three-quarters of the way down, am I correct that
6 Mr. Martin tells you, gotten away from the concept of
8 the -- of boiler room concept, if you will.
9 A Pardon me? Where are you?
10 Q Three-quarters of the way down, I will count the
11 number of lines up from the bottom. It would be seven
12 lines from the bottom, starting with, I've gotten away
13 from the concept of the old, the old boiler r oom concept,
14 if you will, because, umm, this is a very unique concept,
15 the Who's Who. So, I look for intelligent people to begin
16 with.
17 He makes that statement; is that correct?
18 A That is correct.
19 Q And am I correct that Frank Martin is telling you in
20 his view that Who's Who is a very unique concept; is that
21 right?
22 A Yes, sir.
23 Q And he tells you he is looking for very intelligent
24 people to begin with to be working with you; is that
25 right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4666
Watstein-cross/Nelson

1 A Yes, sir.
2 Q And he goes on to indicate, would I be correct in
3 stating that it appears that Mr. Martin is very proud of
4 his management technique and in how he treats people; is
5 that correct?
6 A Yes.
6 Q I would like to turn to page 6 of the tran script, and
8 this is starting seven lines from the top.
9 Mr. Martin states, am I correct, that for the
10 first week or two, at least, I like to see which direction
11 these deals are going, so, in case anyone is writing
12 wooden deals, I'll know about it in a hurry, cause
13 sometimes it is hard really to stay over someone's
14 shoulder the whole day.
15 You say, sure.
16 And he goes on to state, even though, umm, I -- I
17 make it a point that, you know, that you can't say
18 anything, that you can't deviate from the presentation.
19 Because, number one, the presentation basically does
20 work. Umm, and number two, the postal authorities, and
21 all those other bad guys out there might be listening, so
22 it behooves you to just stay within the framework of the
23 presentation. That way nobody gets hurt.
24 He makes that statement to you; is that correct ?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4667
Watstein-cross/Nelson

1 Q And he says, am I correct that for the first one or
2 two weeks someone who is working with the company -- when
3 someone is working at the company, he would verify the new
4 deals that that person is doing; is that right? That's
5 what he is indicating to you; is that correct?
6 A Yes, sir, uh-huh.
6 Q He goes on to explain that he wants to make sure that
8 he would know immediately if anyone is writing wooden
9 deals?
10 A Uh-huh.
11 Q Is that right?
12 A That's right.
13 Q And would I be correct that you have an understanding
14 of the Who's Who telemarketing business, and that when he
15 said wooden deals, you took that to mean that Frank Martin
16 would verify a sale claim to have been made by a new
17 salesp erson to make sure that what was being represented
18 by the person over the telephone was accurate; is that
19 right?
20 A No, sir.
21 Q Well, am I correct that the very next thing that
22 Frank Martin says immediately after that statement is: I
23 make it a point to tell the sales staff that, you know,
24 you can't say anything that you can't deviate from the
25 presentation; does he make that statement?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4668
Watstein-cross/Nelson

1 A Yes, he does.
2 Q All right.
3 You understood when he said "the presentation,"
4 to mean the sales solicitation presentation which is being
5 given by the sales staff when they are speaking to people
6 on the telephone; is that right?
6 A Their script, yes, sir.
8 Q Now, would I be correct in stating then that what
9 Frank Martin is tell ing you here is that made his people
10 stick to the sales presentation?
11 A I can't answer that with a yes or no.
12 Q Well, is that what he says?
13 A He says that, yes.
14 Q Continuing on page 6 of the transcripts in the
15 portion I just read to you, am I correct that what Frank
16 Martin told you is one of the reasons to not deviate from
17 the script is because he believed that the script worked?
18 A Yes, sir.
19 Q And he also told you that a second reason was because
20 the postal authorities and all those other bad guys out
21 there might be listening, so it behooves you to make a
22 presentation so you would not be hurt; is that correct?
23 A That's what he said, yes.
24 Q And you said when you were operating the company, you
25 prepared the majority of your sales presentations; is that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

4669
Watstein-cross/Nelson

1 correct?
2 A Yes.
3 Q And you were very cognizant about the fact that
4 postal authorities and other regulatory agencies would
5 monitor telemarketers?
6 A Not initially.
6 Q You became aware of that after a period of time; is
8 that correct?
9 A Yes.
10 Q Obviously Mr. Martin demonstrated an awareness during
11 this recording that he knew that postal authorities
12 monitored the calls closely, because he tells you that
13 during the interview; is that right?
14 A Absolutely.
15 Q Am I correct in stating that based upon -- withdrawn.
16 Am I correct that you told Frank Martin that you
17 had been arrested for the operation of your company?
18 A I don't have a recollection of a direct statement to
19 that effect. It may have been implied somewhere.
20 Q Could you turn to page 22 of the transcript,
21 approximately three-quarters of the way down the page, so
22 it is six lines down from the bottom.
23 Am I correct that you state to Mr. Martin there,
24 the trauma that I went through taught me quite a lesson?
25 A As I indicated it was an implied statement, not an

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4670
Watstein-cross/Nelson

1 explicit statement.
2 Q Would that refresh your recollection that either
3 during the course of the prior telephone interviews, or at
4 sometime during the course of this meeting you had an
5 awareness that Mr. Martin knew that you had been
6 previously arrested?
6 A I think Mr. Martin had an awareness, but there was no
8 explicit statement to that effect.
9 Q So, you believed that to be the case during the
10 course of this interview; is that right?
11 A Yes, sir.

12 Q And as I just read to you, you had advised Mr. Martin
13 you had learned your lesson, in other words, you were
14 stating to him that in this new company you were going to
15 be following the law; is that right?
16 A I made no such statement here, sir.
17 Q Well, were you implying to him that even though you
18 were under arrest and you were interviewing people for a
19 new job, it was your attention to continue to violate the
20 law?
21 A No, sir.
22 Q Am I correct that during the course of the interview
23 and the specific section you talked about here, that Frank
24 Martin was advising you, advising you here, that he
25 closely monitored the sales staff to make sure that they

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4671
Watstein-cross/Nelson

1 were conforming to the sales presentation?
2 A Yes, sir.
3 Q And he advised you he knew the postal authorities
4 were closely monitoring these presentations; is that
5 correct?
6 A Yes, sir.
6 Q And certainly he wouldn't be making sure that they
8 stuck to the script if he thought the script was unlawful,
9 and if he knew the postal authorities would be listening;
10 is that right?
11 A I can't comment -- it seems like a logical statement,
12 but I can't comment on his state of mind.
13 Q So, exactly. It is fair to say when Frank Martin
14 says to you it is important that the workers not deviate,
15 is because he believes the script was within the bounds of
16 the law; is that correct?
17 A I can't comment. I can't tell you what was in
18 Mr. Martin's mind when he said that.
19 Q It is certainly a logical conclusion; is that
20 correct?
21 A It seems logical.
22 Q And his demand that the telemarketers rem ain true to
23 the script, is because he feels the company should be
24 within the bounds of the law; is that correct? A logical
25 deduction?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4672
Watstein-cross/Nelson

1 A It might be. I am not sure if it is logical or not,
2 but it might be.
3 Q Now, at the bottom of page 6 of the transcript,
4 Mr. Martin states to you that he earned $1,200 per week,
5 no commissions; is that correct?
6 A Yes, sir.
6 Q And if I recall your testimony from yesterday, you
8 testified that you paid your sales managers a commission
9 on the sales made by the people they supervised; is that
10 right?
11 A That's correct.
12 Q Okay.
13 So the sales managers in your company had every
14 incentive to make sure that virtually every person who was
15 called and accepted would in fact b e accepted; is that
16 right?
17 A Yes, sir.
18 Q The more the sales staff made, the greater commission
19 the sales managers would receive; is that correct?
20 A Uh-huh.
21 Q Okay.
22 Based on the statement of Frank Martin here in
23 this recording, this did not occur at Who's Who Worldwide;
24 is that right?
25 A I have no knowledge whether that's truthful or not,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4673
Watstein-cross/Nelson

1 sir.
2 Q Well, he says to you during the recording that there
3 were no commissions as a sales override to the sales
4 staff; is that right?
5 A That's a statement that he made, yes, sir.
6 Q Okay.
6 So, the sales managers at Who's Who Worldwide
8 would have had no incentive to make sure that everyone was
9 accepted in the -- if the statement he is making the tr ue;
10 is that correct?
11 A If that statement was true, yes, I suspect.
12 Q Now, Frank Martin told you he was with the company
13 for a little less than a year; is that right?
14 A Yes.
15 Q And he had been a manager for about nine months; is
16 that correct?
17 A I think ten months.
18 Q Ten months?
19 A Yes.
20 Q And based on a salary of $1,200 a week, he would have
21 been earning, given the period of time he was there, 40 or
22 50 thousand dollars a year; is that correct?
23 A Slightly higher, yes.
24 Q And that would be for 1992; is that correct?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4674
Watstein-cross/Nelson

1 Q And am I correct that as of the date of this
2 recording, in January of 1993, you owed the Internal
3 Revenue Service in excess of $600,000 in taxes, intere st
4 and penalty?
5 A Yes, sir.
6 Q And you already entered a plea agreement where you
6 would agree to plead guilty to tax fraud; is that right?
8 A Yes, sir.
9 Q And as part of that agreement you agreed to pay these
10 back taxes back to the government; is that right?
11 A Yes, sir.
12 Q Okay.
13 So, you owed the government in taxes more than
14 ten times what Frank Martin ever earned while he was
15 working at Who's Who Worldwide; is that correct?
16 A A factually correct statement, yes, sir.
17 Q And after Frank Martin told you about himself you
18 began to ask him specific questions about the company; is
19 that right?
20 A Yes, sir.
21 Q And, again, am I correct that you had Mr. Martin
22 believing this was a job interview, right?
23 A That is correct.
24 Q In fact, you told him during the course of the
25 in terview that the job would pay anywhere between 50 and

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4675
Watstein-cross/Nelson

1 75 thousand dollars a year; is that right?
2 A Yes, sir.
3 Q Okay.
4 And Frank Martin was trying to sell himself or
5 his services to you; is that right?
6 A Yes, sir.
6 Q It is not uncommon to puff a little about yourself
8 during the course of a job interview; is that right?
9 A Puffing a drop is common, yes.
10 Q And Frank Martin was trying to tell you what he
11 thought you wanted to hear; is that right?
12 A I can't comment on that, sir. I was not aware of
13 what was in Mr. Martin's mind.
14 Q Am I correct that what you wanted to hear, what you
15 wanted to record was information about Who's Who Worldwide
16 that might assist you in providing evidence for the
17 government in its i nvestigation?
18 A That's an accurate statement, yes.
19 Q And if that is so, you wouldn't have to go to jail,
20 the eventual result?
21 A I can't answer the question with a yes or no, sir.
22 Q In substance, would I be correct in stating that
23 Frank Martin was trying to sell himself to you for a job,
24 just like you were trying to sell yourself to the
25 government for a reduced sentence?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4676
Watstein-cross/Nelson

1 A No. I can't make that analogy the way you made it.
2 Q Wouldn't it be fair to say that we had two people in
3 this interview both trying to make a sale? You trying to
4 sell yourself to them; he trying to sell himself to you?
5 A No. If you let me, I will tell you where your
6 analogy fails.
6 Q You are saying that that analogy doesn't apply?
8 A Yes, sir.

9 Q Am I correct that Mr. Martin was there in response to
10 an ad for a job?
11 A That is correct.
12 Q And am I correct that you were there at your
13 suggestion and with the approval of the government to
14 record people to further an investigation in support of
15 your cooperation agreement that you were hoping to
16 reduce -- lead to a reduced sentence for you?
17 A Yes, sir.
18 Q Thank you.
19 The only difference was that you knew all the
20 facts and he didn't; isn't that right?
21 A No, sir.
22 Q Now, you paid for the room and paid for the ad; is
23 that right?
24 A Yes.
25 Q And I believe you said yesterday when Mr. Jenks asked

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4677
Watstein-cross/Nelson

1 you about it, you thought that this cooperation agreement
2 might well be worth a million dollars to you, didn't you?
3 A I think philosophically, yes, that was my answer,
4 yes.
5 Q Isn't it correct that the amount it cost to run that
6 ad in the paper and be in the hotel room was just a drop
6 in the bucket as to what the price and value of this plea
8 agreement was?
9 A You are using an analogy hard to follow. Yes, it was
10 a valuable agreement and the amount of money was less in
11 comparison.
12 Q So, to invest your own money in order to facilitate
13 your potential cooperation by ensnaring people in this
14 hotel room to say whatever you could get them to say, was
15 virtually nothing in respect to the value of this million
16 dollar agreement; is that correct, sir?
17 A Sir, I can't answer the question the way you phrase
18 it.
19 Q I would like to turn to page 8 of the transcript at
20 this point, about half way down.
21 You start off by saying here, we are coming in a
22 different direction now. Umm, he had a lot of strange
23 things in his per -- most recent presentation.
24 You make that statement to him; is that right?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Watstein-cross/Nelson

1 Q And when you say "he" you mean Bruce Gordon; is that
2 correct?
3 A Yes.
4 Q And Frank Martin is telling you he is willing to talk
5 to you about the presentation, he feels he is not
6 divulging anything, there is nothing to hide; is that
6 right? That's what he says to you?
8 A Which line are you at, sir.
9 Q The bottom line. Whatever questions you want. And I
10 don't feel like I'm divulging anything.
11 Is that what he says to you?
12 A Yes.
13 Q And turn to page 9.
14 Page 9, you tell him at the top, no, it's

15 nothing. He got it from me originally, so I mean, you are
16 not telling him anything that you don't already know as
17 what you are referring; is that right?
18 A No, sir.
19 Q Now, when you say he got it from me originally, what
20 you are inferring by that to Mr. Martin is that you are
21 telling him that you felt you were the true author of the
22 presentations that were being used by Who's Who Worldwide;
23 is that right?
24 A By the initial presentations taken from me. Not the
25 subsequent ones, yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4679
Watstein-cross/Nelson

1 Q All right.
2 As of January 1993, as I mentioned before, you
3 had never worked at Who's Who Worldwide; is that right?
4 A That's right.
5 Q And you had no direct knowledge whether the company
6 received nominations from other existi ng members or not;
6 is that right?
8 A That's correct.
9 Q And you had no direct knowledge about the criteria
10 utilized by Who's Who Worldwide in selecting the segmented
11 aspects of the mailing list which they did use; is that
12 right?
13 A Not totally, no.
14 Q And you didn't specifically know anything about the
15 inner operation of Who's Who Worldwide other than your
16 belief that it was patented after your company; isn't that
17 right?
18 A No, sir, it is not accurate.
19 Q Well, you had worked there; isn't that correct?
20 A No, sir.
21 Q And you had not been inside the actual premises; is
22 that right?
23 A That is correct.
24 Q And you hadn't yourself ordered any of the mailings
25 done by them?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4680
Watstein-cross/Nelson

1 A Or dered the mailings? ?
2 Q The mailing lists used by the company.
3 A Of course not.
4 Q You were not privy to the different levels of
5 screening used by the company after the lead cards came
6 back; is that right?
6 A That's right.
8 Q You didn't have their registry, did you?
9 A Not at that time, no.
10 Q You didn't have their plaque, did you?
11 A Not at that time.
12 Q Now, am I correct that on page 9 of the transcript
13 you state to Frank Martin, the presentation that I have
14 seen has a lot of puffing or exaggeration; isn't that
15 right?
16 A Which line, sir?
17 Q This is on page 9, approximately nine lines down?
18 A Yes. I see where it is, uh-huh.
19 Q Did you have a copy of their presentation at that
20 time?
21 A No, sir.
22 Q So you knew nothing about the operation of that
23 company; is that right?

24 A No, sir, not true.
25 Q And you had absolutely no basis of specific knowledge

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4681
Watstein-cross/Nelson

1 as to whether or not the presentation was exaggerated
2 about his product at all; is that right?
3 A Yes. I had a basis, sir.
4 Q And that was just based on the solicitation letter
5 you received?
6 A No, sir, inaccurate.
6 Q You were lying to him what you knew about the
8 presentation; is that right?
9 A No, sir, that's not accurate.
10 Q I would like to play for you at this point a portion
11 of the tape, relating to page 9 of the transcript?
12 MR. NELSON: If you bear with me for a second,
13 Judge, I have to move the counter myself?
14 THE COURT: Surely.
15 (Whereupon, at this time there was a pause in the
16 proceedings.)
17 THE COURT: Ar e you going to let us know when to
18 put the headphones on?
19 MR. NELSON: I apologize, Judge, I started the
20 portion.
21 THE COURT: All right, you better start it
22 again.
23 MR. NELSON: I apologize, your Honor.
24 THE COURT: Okay.
25 (Tape is played.)

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4682
Watstein-cross/Nelson

1 MR. NELSON: I am stopping at this point to ask
2 some questions.
3 Q Now, on page 9 of the transcript, where you ask
4 Mr. Martin where is the presentation inconsistent with
5 reality, he pauses for quite some period of time before he
6 responds to you; is that right?
6 A At least five or six seconds, yes, sir.
8 Q Am I correct that then Frank Martin tells you he
9 suspects the major flaw was telling people that they were
10 recommended by other members; is that right?

1 1 A Yes, sir.
12 Q And he doesn't actually say he knows this, he says he
13 suspects it; is that right?
14 A Yes, sir.
15 Q And because he pauses it is fair that he had to think
16 about the response; is that right?
17 A I can't say that a pause for six seconds indicates
18 that particular thing.
19 MR. NELSON: I would like to play the next
20 portion of the transcript.
21 THE WITNESS: Your Honor, so I can refresh my
22 memory to these questions, I believe there is a document,
23 which is a transcript of a tape that was made in January,
24 I believe, at the U.S. post office of Who's Who
25 Worldwide. It might help me to be more responsive to the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4683
Watstein-cross/Nelson

1 question if I can see a copy of the document.
2 THE COURT: No. That is not possible nor proper
3 at this time.
4 THE WITNESS: Yes, sir.
5 MR. NELSON: Thank you.
6 (Tape is played.)
6 Q Now, am I correct that Frank Martin goes on to tell
8 you here, starting on page 9 of the transcript, that there
9 was a way to combat the problem as it related to
10 nominations?
11 A Yes.
12 Q And that means that the lack of nominations for
13 members; is that correct?
14 A Yes.
15 Q And Frank Martin tells you the way to combat it is to
16 actually ask members for recommendations for existing
17 members; is that right?
18 A Yes, sir.
19 Q And this interview was conducted on January 20th,
20 1993; is that right?
21 A Yes, sir.
22 Q And are you aware that Frank Martin returned to Who's
23 Who Worldwide around the end of November 1994?
24 A In a general sense, yes.
25 Q And are you aware that commencing just a few months

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4684
Watstein-cross/Nelson

1 after Frank Martin left the company, Who's Who Worldwide
2 implemented this idea of his, and indeed established the
3 procedure to have existing members nominate new members?
4 A No, I am not aware of that, sir.
5 Q Are you aware that by 1994, when Frank Martin
6 returned, the new membership packages shipped to new
6 customers contained nomination ballots specifically asking
8 for new members for nominations of others?
9 A I have no awareness to that.
10 Q Are you aware that Tribute Magazine, which was being
11 published and sent to members upon Frank Martin's return
12 in 1994 specifically provided a nomination pull out for
13 members to send to the company to nominate for membership?
14 A I saw that yesterday, yes.
15 Q And I believe I showed you that in the Tribut e
16 Magazine in Exhibit D; is that right?
17 A Yes, sir.
18 Q And are you aware that nominations were indeed being
19 received from members and used to recruit new members,
20 starting in the summer of 1994, or before Frank Martin
21 returned to the company?
22 A I have no awareness of that.
23 Q Would you agree that Frank Martin -- withdrawn.
24 Are you aware that by the time Frank Martin
25 agreed to return to the company in late 1994, an

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4685
Watstein-cross/Nelson

1 ever-increasing number of new members were being acquired
2 as a result of their nomination by established members?
3 A I have no knowledge of that, sir.
4 Q Would you agree, sir, that when Frank Martin returned
5 to the company in November of 1994, these procedures were
6 in place, and Frank Martin was aware tha t the procedures
6 was in place, that he would say that his knowledge to the
8 major flaw, as he perceived it during his interview with
9 you in January of 1993 had been resolved prior to his
10 agreement to return to the company?
11 A I can't answer that question with a yes or no, sir.
12 Q I would like you to turn to, about a quarter of the
13 way down page 10 of the transcript.
14 Am I correct that Frank Martin tells you here
15 about what he perceived to be a problem in billing for the
16 publication at the back end?
17 A Would you read me the section you are referring to,
18 please?
19 Q It starts off with you stating by '97's -- he says
20 other publication, and Mr. Martin says, which to me is a
21 very unique concept, because to me, I find that if you ask
22 for the money up front you get the whole ball of wax; you
23 see that section?
24 A Ye s, sir.
25 Q He told you that he didn't understand why the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4686
Watstein-cross/Nelson

1 customer was billed for the publication at the end of the
2 year; is that correct?
3 A That's the sum and substance of it.
4 Q In fact, he states to you after you continue down
5 after your statement, for some ungodly reason, he, he,
6 bills them for the publication at the end of the year; is
6 that right?
8 A Yes.
9 Q Okay.
10 Now, am I correct that Who's Who Worldwide, as
11 did your publication, sell memberships all year long?
12 A No.
13 Q You didn't sell memberships throughout the 12 months
14 of the year?
15 A Our strategy was not to sell memberships at all.
16 Q You sold the publication; is that correct?
17 A Yes.
18 Q And you only released the registry once a year?
19 A There were multiple registries, as they were ready,
20 they were released.
21 Q And it usually would be once a year or maybe twice a
22 year that a particular registry would be released; is that
23 right?
24 A Yes, sir.
25 Q And are you familiar with New York State general

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4687
Watstein-cross/Nelson

1 business law Section 396M?
2 A No.
3 Q And are you aware, sir, that general business law
4 Section 396M, subdivision 3B, provided -- let me first
5 read the caption for the statute. It is mail order or
6 telephone order merchandise.
6 I am correct, am I not, that your business was a
8 mail or telephone order business?
9 A Yes, sir,.
10 Q And it operated within the State of New York; is that
11 correct?
12 A Yes.
13 Q And were you awa re, sir, that this section of the
14 General Business Law provides no person, partnership,
15 firm, association or agent or employee thereof who
16 conducts a mail order business, or a telephone order
17 business shall, subdivision B, accept orders for
18 merchandise which is not reasonably anticipated to be
19 available for shipment within thirty days from the day of
20 receipt of the order together with payment, or with charge
21 account authorization in the case of an order remitted
22 through the mail, or within thirty days from the date the
23 seller debits the buyer's account in the case of an order
24 placed by telephone? Were you familiar with that section
25 of the law, sir?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4688
Watstein-cross/Nelson

1 A No, sir.
2 Q Would I be correct in stating, sir, that since the
3 registry only came out once per year, and the business was
4 going on on a daily basis soliciting people to purchase
5 the registry, this section prohibits the sale by telephone
6 to anyone other than the person whose would purchase the
6 registry within thirty days of the date within which the
8 registry was available of the day available to ship to
9 them.
10 A I can't answer that question, sir.
11 MR. NELSON: I would ask the Court to take
12 judicial notice of this particular statute at this time.
13 THE COURT: If it is relevant for me to do it, I
14 would take judicial notice. I am not sure that it is at
15 this point.
16 MR. NELSON: Thank you, your Honor. I will renew
17 my application later.
18 THE COURT: For the time being I will take
19 judicial notice of that statute.
20 MR. NELSON: Thank you, your Honor.
21 Q Would I be correct, sir, that unless th e company
22 split billed for the registry -- in other words, taking a
23 sum initially, and then a final sum within thirty days of
24 the date that the registry was available for shipment, it
25 would be in violation of the statute?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4689
Watstein-cross/Nelson

1 A I am not sure what the balance of the statute says,
2 sir. You read me only part of it.
3 Q Would I be correct, sir, that if the interpretation I
4 have been providing to you is so, that it would provide a
5 full explanation as to the reasons why Who's Who Worldwide
6 actually did split bill and hold back on the final sum of
6 money so that he could be in compliance with the section?
8 A It might, sir.
9 Q Okay.
10 I would like to turn to page 11 of the
11 transcript, toward the stop -- I am sorry, actually page
12 10 at the bottom.
13 You asked what else in this presentation --
14 A Pardon me, sir, where are you?
15 Q Page 10, three lines from the bottom.
16 You asked Mr. Martin what else in his
17 presentation -- now turning to the top of page 11, he
18 mentions first the credit card, and he indicates to you
19 that the credit card doesn't exist as of yet, but it is
20 under negotiation; is that correct?
21 A Yes, sir.
22 Q And he goes on to indicate, the same as the software,
23 the software package is in abeyance; are you aware of
24 that?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4690
Watstein-cross/Nelson

1 Q And are you presently aware, sir, upon Frank Martin's
2 return to the company in November of 1994, Who's Who
3 Worldwide did indeed provide the members with a Master
4 Card membership through MBNA, which had the company logo
5 on it?
6 A You showed me that information in Tribute Magazine,
6 sir.
8 Q And are you presently aware that upon Frank Martin's
9 return in November of 1994, the company did in fact have a
10 viable and interactive CD-ROM for networking available for
11 members willing to purchase it?
12 A I am aware that they had a CD-ROM, yes, sir.
13 Q Again, would you agree, sir, that if upon Frank
14 Martin's return to Who's Who Worldwide, he knew this, then
15 he would have returned to the company where these problems
16 which were raised during your interview with him had been
17 resolved prior to his agreeing to return to the company?
18 A As it relates to these particular problems, yes, sir.
19 Q Okay.
20 I would like to turn to page 13 of the
21 transcript, and I direct your attention to five lines
22 down, starting with what is he paying the salespeople, and
23 I would like to play for you this portion of the tape at
24 this time.
25 THE COURT: Maybe we better do that after we

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4691
Watstein-cross/Nelson

1 return.
2 MR. NELSON: Yes, your Honor.
3 THE COURT: Members of the jury, we will take a
4 recess for lunch.
5 Please do not discuss the case. Keep an open
6 mind. We will recess until 1:30.
6 Have a nice lunch.
8 (Whereupon, at this time the jury leaves the
9 courtroom.)
10 MR. WHITE: Your Honor, can we discuss one thing
11 before lunch?
12 THE COURT: Yes.
13 MR. WHITE: Your Honor, a couple of things.
14 First, in terms of scheduling --
15 THE COURT: You can be excused, Mr. Watstein. Be
16 back prior to 1:30, please.
17 THE WITNESS: Yes, sir.
18 MR. WHITE: That's what I was going to address.
19 In trying to accommodate both Mr. West's
20 schedule, and the schedule of the two other witnesses from
21 out of town today, if acceptable, I was going to stop
22 Mr. West and put the two other people on who I think will
23 consume the afternoon.
24 THE COURT: Will we be able to finish both of
25 those persons if we do that?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4692

1 MR. WHITE: I believe so, your Honor. They are
2 both customers. And I think if we have the entire
3 afternoon they will be -- that will consume the
4 afternoon. And they would both safely get in there.
5 MR. NELSON: Your Honor, I would like to be
6 accommodating as possible to everyone's schedule. But I
6 would like to not break the continuity of my
8 cross-examination, since I am in the middle of the
9 transcri pt myself.
10 THE COURT: How long is your cross-examination
11 going to take?
12 MR. NELSON: I believe it is about an hour,
13 Judge.
14 THE COURT: I will let you conclude the last
15 session, the last part, where you say -- how much more are
16 you going to go with this transcript?
17 MR. NELSON: I would say that it would take about
18 a half an hour, Judge. If I can just finish the
19 transcript, and then I would break.
20 THE COURT: I will let you finish the transcript,
21 and then we will break.
22 MR. NELSON: Thank you.
23 MR. SCHOER: Judge --
24 MR. WHITE: I have a few other issues.
25 THE COURT: Go ahead.

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1 MR. WHITE: One, the Court asked for the
2 government's request to charge which I have.
3 THE COURT: Bring it up. Have you served the

4 copies on counsel?
5 MR. WHITE: Yes.
6 The other issue is the Court gave the government
6 a chance to do research on the issue of a prior consistent
8 statement, and the statement of Ms. Benjamin about what
9 Ms. Gaspar said to her?
10 THE COURT: Yes.
11 MR. WHITE: I did that. And my recollection is
12 your Honor asked us to address the issue of just how
13 consistent a so-called prior consistent statement had to
14 be.
15 The research I did, which I can provide to your
16 Honor, is I found that there were only two circuits that
17 had addressed that issue. The Second Circuit was not
18 among them, your Honor.
19 The two circuits addressed it precisely was the
20 Third Circuit in 1991, and the Fifth Circuit, 1988. And
21 both of them said that the testimony need not be
22 identical. One says generally consistent is acceptable.
23 T he other one says consistent for the most part is
24 sufficient.
25 Even Weinstein Evidence says a prior statement

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 need not be identical in every detail to the trial
2 testimony to be considered consistent. The test of
3 admissibility is whether a reasonable mind would accept
4 the central thrust of the prior statement as being
5 consistent with the witness' in court testimony.
6 The one case that your Honor mentioned
6 previously, United States v. Quinto, sets forth the test,
8 but then it doesn't address that element of it, how
9 consistent the case has to be. There they ruled against
10 the statement having been admissible, because they said
11 the statement was not made before the motive to falsify
12 arose, which was another one of the elements.
13 As far as I can tell these are the only two cases
14 of any circuit addressing the issue. And they are both
15 more liberal in admissibility than what has been suggested
16 previously.
17 THE COURT: I don't recall exactly because I have
18 not thought about it recently, and you obviously have.
19 I recall that the prior consistent statement was
20 that she came out of a meeting very upset and angry, or
21 something about something that was said to her. That is
22 in substance of what I recall.
23 Isn't that so?
24 MR. WHITE: Yes. The statement is a little more
25 detailed.

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1 THE COURT: Why is that a prior consistent
2 statement as to her being told to do something
3 unlawfully?
4 MR. WHITE: For several reasons, your Honor.
5 First of all, the timing is such, when you
6 compare the two women's testimony, the two witness'
6 testimony, that it was about the same time. That
8 Ms. Gaspar was told to prepare the logs and prepared them
9 between September 9th and September 23rd, 1994.
10 Ms. Benjamin places this conversation with Ms. Gaspar as a
11 few weeks or several weeks before Ms. Gaspar left the
12 company.
13 THE COURT: Mr. White, it is now 25 minutes to
14 1:00. You are now intruding on the lunch hours of
15 everybody. This is not an urgent matter. It has waited
16 for weeks now. And I know you are anxious to apprise the
17 Court of the successful conclusions of your research.
18 I still feel it is not a consistent statement
19 because it is not consistent or inconsistent or anything
20 else with respect to what was said. It is just that she
21 feels upset. That's all. It doesn't say I feel upset
22 because they made me make the log entries.

23 MR. WHITE: She does say she is upset because of
24 something Mr. Gordon and Mr. Reffsin told her what to do.
25 THE COURT: It could be that they cut down her

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1 lunch hour. That upsets people all the time, doesn't it,
2 Mr. White?
3 MR. WHITE: I am learning that that is true, yes.
4 THE COURT: It could have been that. It cou