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5413
1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
2 - - - - - - - - - - - - - - X
3 UNITED STATES OF AMERICA, : CR 96 1016(S-1)
4 v. : U.S. Courthouse
5 Uniondale, New York BRUCE W. GORDON, WHO'S WHO
6 WORLD WIDE REGISTRY, INC., : STERLING WHO'S WHO, INC.,
7 TARA GARBOSKI, ORAL FRANK : OSMAN, LAURA WEITZ, ANNETTE
8 HALEY, SCOTT MICHAELSON, : STEVE RUBIN, and MARTIN
9 REFFSIN, :    TRANSCRIPT OF TRIAL
10 Defendants. :February 24, 1998
11 - - - - - - - - - - - - - - X 9:45 o'clock a.m.
12 BEFORE:
13 HONORABLE ARTHUR D. SPATT, U.S.D.J. and a jury
14 APPEARANCES:
15 For the Government: ZACHARY W. CARTER
16 United States Attorney One Pierrepont Plaza
17 Brooklyn, New York 11201
By: RONALD G. WHITE, ESQ.
18 CECIL SCOTT, ESQ. Assistant U.S. Attorneys
19 For the Defendants: NORMAN TRABULUS, ESQ.
20 For Bruce W. Gordon
170 Old Country Road, Suite 600
21 Mineola, New York 11501
22 EDWARD P. JENKS, ESQ.
For Who's Who Worldwide
23 Registry, Inc. and
Sterling Who's, Who, Inc.
24 332 Willis Avenue
Mineola, New York 11501
25
(cont'd)


HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5414
1 APPEARANCES (cont'd):
2 GARY SCHOER, ESQ. For Tara Garboski
3 6800 Jericho Turnpike
Syosset, New York 11791
4
ALAN M. NELSON, ESQ.
5 For Oral Frank Osman
3000 Marcus Avenue
6 Lake Success, New York 11042

7 WINSTON LEE, ESQ.
For Laura Weitz
8 319 Broadway
New York, New York 10007
9
MARTIN GEDULDIG, ESQ.
10 For Annette Haley
400 South Oyster Bay Road
11 Hicksville, New York 11801
12 JAMES C. NEVILLE, ESQ.
For Scott Michaelson
13 225 Broadway
New York, New York 10007
14
THOMAS F.X. DUNN, ESQ.
15 For Steve Rubin
150 Nassau Street
16 New York, New York 10038
17 JOHN S. WALLENSTEIN, ESQ.
For Martin Reffsin 18 215 Hilton Avenue
Hempstead, New York 11551
19
20 Court Reporter: HARRY RAPAPORT, CSR
United States District Court
21 Two Uniondale Avenue
Uniondale, New York 11553
22 (516) 485-6558
23
Proceedings recorded by mechanical stenography, transcript
24 produced by Computer-Assisted Transcription
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5415
1 M O R N I N G S E S S I O N
2

3 (Whereupon, the following takes place in the

4 absence of the jury.)

5 THE COURT: Where is your witness?

6 MS. SCOTT: Right next door.

7 THE COURT: Bring him in.

8 MR. LEE: I have a preliminary application.

9 THE COURT: Why did you wait for now?
10 MR. LEE: Only thing I wanted to do is to let
11 Mr. Rapapo rt know I needed one minute with the Court, and
12 I thought that was done. I assume you were notified. I
13 apologize.
14 THE COURT: A miscommunication. It is all
15 right.
16 MR. LEE: I am asking permission to bring into
17 the courtroom my personal cassette player. The reason
18 being is when I review the tapes, I had queued portions of
19 it to my own counter, which is different from the counter
20 in court.
21 THE COURT: What is a cassette player? The thing
22 that plays these tapes?
23 MR. LEE: Yes. Mine has a counter, which I don't
24 believe queues out to exactly what the government has.
25 THE COURT: Bring it in.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5416
1 MR. LEE: Thank you.
2 The second application, with respect to the

3 testimony of Mr. Safer, I am requesting a direction to

4 your Hon or for the government to instruct Mr. Safer not to

5 mention the prior employment of my client, Ms. Weitz, as

6 Steven Watstein's Who's Who's organization. He was also a

7 prior employee.

8 We discussed it in the context of an in limine

9 motion. And I believe the government did say that they
10 will not bring it up in their direct. But, of course, I
11 wanted to make sure to remind everyone so it doesn't get
12 blurted out.
13 THE COURT: Is Mr. Safer the next witness?
14 MR. WHITE: No. We have Mr. West --
15 THE COURT: Please advise him not to say anything
16 about that other employment.
17 MR. SCHOER: I join in that application with
18 respect to my client. I originally made the motion.
19 THE COURT: She also worked for Mr. West?
20 MR. SCHOER: Yes.
21 MR. WHITE: We didn't intend to elicit that.
22 THE COURT: Just mention it to him.
23 MR. WHITE: I will.
24 THE COURT: By the way, don't bring up that he
25 talked to the lawyer about the case. In other words, in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5417
1 cross-examination, don't say, well, did you discuss this
2 case -- you can say it. But if you do, he might come out

3 with something, he told me not to say something. So just

4 watch it.

5 Did I make myself clear? I don't think so.

6 MR. SCHOER: Yes, you did.

7 THE COURT: All right, let's go.

8 (Whereupon, the jury at this time entered the

9 courtroom.)
10 THE COURT: Good morning, members of the jury.
11 Please be seated.
12 I have to say that you made a valiant effort to
13 be here. It didn't really come off too well, but you made
14 a valiant effort. So I am thankful for that.
15 However, we delayed you a little while even after

16 you delayed a little bit. So it is even.
17 We will call it a draw.
18 You may proceed.
19 Where are we, Mr. White?
20 MR. WHITE: I began my redirect on Friday to
21 Mr. Watstein -- of Mr. Watstein.
22 THE COURT: Mr. Watstein you are still -- you
23 better readminister the oath again. I don't know how long
24 it was. When did you start testifying?
25 THE WITNESS: Tuesday, Monday?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5418
1 THE COURT: Administer the oath again then.
2

3 S T E V E N W A T S T E I N ,

4 called as a witness, having been previously

5 duly sworn, was examined and testified as

6 follows:

7

8 THE CLERK: Please be seated.

9 State your full name for the record.
10 THE WITNESS: Steven Watstein, W A T S T E I N.
11 THE COURT: You mayor proceed, Mr. White.
12

13 REDIRECT EXAMINATION (cont'd)
14 BY MR. WHITE:
15 Q Mr. Watstein, let me give you Exhibit 1379, the
16 transcript of your January 1993 meeting with Mr. Martin at
17 the Garden City Hotel.
18 Now, do you recall you were asked questions by
19 Mr. Nelson about various portions of this tape recording?
20 A In a general sense, yes.
21 Q Now, is it correct that ads were placed in
22 newspapers, and that's what Mr. Martin was responding to
23 for this job interview?
24 A Yes, sir.
25 Q Now, you recall Mr. Nelson asked you at that time as

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5419
Watstein-redirect/White


1 to whether your arrest was public knowledge?
2 A Yes, sir.

3 Q And was it at that time?

4 A Yes, sir.

5 Q And since it was last week, I wanted to be accurate

6 and go over one or two questions M r. Nelson asked you.

7 Mr. Nelson asked you: Would I be correct that a

8 lot of people in the industry knew that you were arrested

9 and were in trouble for running your business
10 fraudulently?
11 Answer: That is correct.
12 MR. WHITE: I am reading from 4717 of the trial
13 transcript:
14 Question by Mr. Nelson. Certainly it appears
15 that Frank Martin was aware of this; is that right?
16 And the answer was: Yes, sir.
17 Q So, notwithstanding that Mr. Martin was aware that
18 you had been arrested, he wanted to work for you; is that
19 right?
20 A Yes, sir.
21 Q Now, if you can turn to page 6 of the transcript.
22 Now, if you look at the second portion that is
23 attributed to Mr. Martin on that tape --
24 A Yes, sir.
25 Q And if you look where he says, and I will read it,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPO RTER

5420
Watstein-redirect/White


1 even though, umm, I, I make it a point that, you know, you
2 can't say anything, that you can't deviate from the

3 presentation. Because, number one, the presentation

4 basically does work. Umm, and, number two, the postal

5 authorities, and all those other bad guys out there, might

6 be listening. So it behooves you to just stay within the

7 framework of the presentation.

8 Do you see that, Mr. West?

9 A Yes, sir.
10 Q And what was your understanding as to Mr. Martin was
11 referring to as the postal authorities and all those other
12 bad guys out there?
13 MR. NELSON: Objection.
14 THE COURT: Sustained.
15 Q Now, do you recall in connection with that passage
16 Mr. Nelson asked you, isn't it true that Mr. Martin
17 wouldn't say stick to the script, if the script was
18 inaccurate, do you recal l he asked you that question?
19 A Yes, sir.
20 Q Do you later in the conversation ask Mr. Martin if
21 the script was inaccurate?
22 A Yes, sir.
23 Q And tell us where you do that.
24 A You will have to refresh my memory as to which page,
25 sir?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5421
Watstein-redirect/White


1 Q Well, if you take a look at page -- look at page 9.
2 A Yes, sir.

3 Q What do you ask him about the accuracy of the script?

4 A At a certain point I ask, what -- the, the

5 presentations that I have seen had a lot of puffing in it,

6 a lot of exaggerations in it. What was the typical,

7 where, where, where, where did his presentation --

8 withdraw it inconsistent with reality?

9 Q If you look at the rest of 9 and page 10 and 11, does
10 Mr. Martin tell you where he feels it is inconsistent with
11 reality?
12 A Yes, sir.
13 Q Now, do you recall Mr. Nelson asked you with respect
14 to this tape whether it was true that if the managers at
15 Who's Who Worldwide didn't get a commission, they,
16 therefore, had no incentive to let everyone in; do you
17 remember he asked you that?
18 A Yes, sir.
19 Q Do you ask Mr. Martin in this conversation about the
20 percentage of people who get in?
21 A Yes. I believe that I do.
22 Q Okay.
23 If you can take a look at page 17, what do you
24 ask him?
25 MR. NELSON: Objection to the form of the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5422
Watstein-redirect/White


1 question, to the form. It is by way of a statement and
2 not a question.

3 THE COURT: Overruled.

4 A I say if -- was everybody accepted there if, if, a

5 person breathing would buy a membership. I mean, would --

6 and then Martin responds, umm, only if it was, you know,

7 like if it was something like, umm, umm, a porno shop or

8 something, really.

9 Q And further on down, do you ask him about a specific
10 percentage being accepted?
11 A Yes, sir.
12 Q What do you ask him?
13 A I say, but 99 percent were accepted is what you're
14 saying?
15 And he says, yeah, I would say so. If they got
16 the money. As long as they weren't totally outright, umm,
17 just, you know, sure, yeah, laughs, yeah, laughs, really.
18 Q Okay, now, if you can go back to page 9, and the part
19 you read before, where you ask him, where was the
20 presentation inconsistent with reality, right?
21 A Yes, sir.
22 Q Do you see that?
23 A Yes, sir.
24 Q All right.
25 And a few lines down Mr. Martin says, I suspect

HA RRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5423
Watstein-redirect/White


1 the major flaw was telling people that they were
2 recommended by other, other, other members.

3 Do you see that?

4 A Yes, sir.

5 Q Now, did you make Mr. Martin give you that answer?

6 A No, sir.

7 MR. NELSON: Objection.

8 THE COURT: Overruled.

9 Q In that meeting, was there anything preventing
10 Mr. Martin from saying that, no, there was nothing
11 inconsistent with reality?
12 MR. JENKS: Objection.
13 THE COURT: First of all you are interrupting the
14 question again. I thought we were past that stage.
15 MR. NELSON: I apologize. It was one of those
16 types of questions.
17 THE COURT: I know you are a vigorous advocate.
18 You all are. But just wait until the question is over,
19 will you?
20 MR. NELSON: Yes, Judge.
21 T HE COURT: Can I hear that?
22 (Whereupon, the court reporter reads the
23 requested material.)
24 THE COURT: What is your objection, it is a
25 simplistic type of question.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5424
Watstein-redirect/White


1 MR. NELSON: Objection to the form of the
2 question. It is a leading question being asked on

3 redirect examination.

4 THE COURT: It is not exactly leading. And so

5 you understand what leading is, and I will say it again.

6 I said it before.

7 There was nothing that prevented you from saying

8 anything other than that, was there?

9 That's a leading question.
10 He says, was there anything that prevented -- let
11 me hear what he said, maybe you are right.
12 MR. WHITE: I think you are right, your Honor.
13 THE COURT: It is reassuring to have your help.
14 Let me hear the question.
15 (Whereupon, the court reporter reads the
16 requested material.)
17 THE COURT: That is not a leading question in my
18 view. Was there anything. That's the difference,
19 overruled.
20 THE WITNESS: No, sir, there was nothing that
21 prevented him.
22 THE COURT: As I said, it is a very simple type
23 of obvious question. But if the government wants to ask
24 obvious questions like that, let them ask it. I would
25 hope the government wouldn't do that. It is not

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5425
Watstein-redirect/White


1 necessary.
2 MR. WHITE: I am trying to avoid it, your Honor.

3 Q Now following down on page 9, Mr. Martin, the next

4 thing Mr. Martin says is: Now, there is, there is a way

5 to combat that. And he never really went out of his way

6 by, umm, umm actually ask ing the members to, and you said

7 really recommend people?

8 THE COURT: No. It is just the reverse -- I beg

9 your pardon. I am sorry.
10 Q And on the top of page 10, and Mr. Martin says, not
11 only that, I think if you, umm, make some kind of effort
12 to do so, think of the leads that you get. I mean these
13 are highly qualified leads.
14 Let me stop there for a minute.
15 MR. NELSON: Judge, I am objecting to him
16 stopping in the middle of sentences, the rule of
17 completeness would require at least the completeness of a
18 sentence.
19 THE COURT: Not necessarily. Depending on what
20 the question is. You might be right. But what is the
21 question?
22 You will not go through all this again, we will
23 be here for three more weeks.
24 MR. WHITE: No, your Honor. There are certain
25 specific things I wish to ask.

HA RRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5426
Watstein-redirect/White


1 THE COURT: Make it specific.
2 The Court has accommodated you by letting this

3 witness go in and out. I will not go over the whole

4 testimony because time has elapsed since then. Do you

5 follow what I am saying, Mr. White?

6 MR. WHITE: Yes. I don't intend to, your Honor.

7 THE COURT: All right. Keep it short.

8 Q Let me complete the sentence.

9 After he says highly qualified leads, he says,
10 the few times that people actually gave names of their own
11 volition, 90 percent of the time we had turned them
12 around, you know, to umm, to umm, into a membership thing.
13 Can you tell us from your experience in
14 telemarketing what that term, highly qualified lead means?
15 A Somebody who would be easy to sell.
16 Q Now, if you can turn to page 17.
17 The pas sage we used before where Mr. Martin
18 mentioned the porno shop; do you recall that?
19 A Yes, sir.
20 MR. NELSON: Objection. Once again, it was
21 Mr. West who said short of a porno shop or murderer. I
22 will object to the characterization of the testimony this
23 way, taking it out of context in the manner he is doing.
24 It is highly improper, likely suggestive, and I object to
25 the procedure to be followed by the government.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5427
Watstein-redirect/White


1 THE COURT: First of all getting back to basics
2 again. From now on please just say "objection."

3 MR. NELSON: Yes, your Honor.

4 THE COURT: Overruled.

5 Q My question is: Who is the first person in this

6 conversation to use the words porno shop, you or

7 Mr. Martin?

8 A Mr. Martin, sir.

9 THE COURT: You were on page 17, you went back to
10 9, now you are back to 17. This is what takes time,
11 Mr. White. I don't want to go through this again. Get
12 through with 17.
13 MR. WHITE: I am sorry, your Honor.
14 THE COURT: I know you do it in your own way.
15 But, my goodness, why are we going back and forth? You
16 were at that point before. Why not complete it.
17 MR. WHITE: Your Honor, I was trying to complete
18 the thought on page 9. I am sorry. I just have a couple
19 of questions on this area.
20 THE COURT: I don't interfere with lawyers'
21 technique and strategy, except when it gets repetitive and
22 unnecessary.
23 My suggestion, to you, sir, is to get one page
24 and conclude it.
25 MR. WHITE: I will stay on one page from now on,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5428
Watstein-redirect/White


1 your Hon or.
2 Q Now, Mr. Nelson asked you about that passage and I

3 want to go over briefly what he asked you.

4 Mr. Nelson asked you on page 4706 of the

5 transcript.

6 So, I am correct that Frank Martin stated that

7 there are some forms of businesses, no matter how large

8 that Who's Who would not accept the principal of that

9 business for membership because of the nature of the
10 business that the person was engaging in; is that
11 correct?
12 And you said, yes, he made that statement.
13 A Yes, sir.
14 Q And then Mr. Nelson also asked you: Am I correct in
15 stating that despite your product Frank Martin told you,
16 you know, there are people, one, that no matter how much
17 money they earn because of the nature of their business,
18 were not taking, were not bringing in the porno king, no
19 matter how much money the man makes? Did he not tell you

20 that?
21 Answer by you, yes, he did.
22 Do you remember those questions by Mr. Nelson?
23 A Yes, sir.
24 Q If you can take a look at Defendant's Exhibit Q, the
25 Who's Who Global Edition, 1993-1994, and look at page 34

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5429
Watstein-redirect/White


1 in the second paragraph -- the second column, do you see
2 an entry there for a man named Larry Flint?

3 A Yes.

4 Q Tell us who Larry Flint is.

5 MR. GEDULDIG: Objection, Judge.

6 THE COURT: Overruled.

7 A A gentleman who publishes --

8 MR. GEDULDIG: There has to be a basis for him

9 knowing who Larry Flint is.
10 THE COURT: Isn't he -- well, I don't want to say
11 anything.
12 MR. GEDULDIG: I haven't seen the movie, but
13 there could be any number of Larry Flints.
14 THE COURT: There could be , there could be.
15 MR. WHITE: Let me set a foundation.
16 Q The Larry Flint listed in that book, does he say he
17 publishes magazines?
18 A Yes.
19 Q Okay.
20 Do you know a Larry Flint -- of a Larry Flint who
21 publishes magazines?
22 A Yes.
23 Q What kind of magazines does he publish?
24 A Largely pornographic.
25 Q Could Larry Flint accurately be categorized as a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5430
Watstein-redirect/White


1 porno king in Mr. Nelson's words?
2 MR. NELSON: Objection.

3 THE COURT: Sustained.

4 Q Let me take that back from you.

5 If you can turn to Exhibit 1330 in the transcript

6 book, which is another tape recording you were asked about

7 on cross-examination.

8 I am sorry, 1308. I have the wrong number.

9 Now, do you see that? That's a tape of you

10 talking to Scott Michaelson, and that's the one in which
11 you took the identity of Ed Grimaldi who owned a beauty
12 salon?
13 A Yes.
14 Q And do you remember Mr. Neville asked you questions
15 about that tape?
16 A In a general sense, yes, sir.
17 Q Now, look on the third page.
18 Do you see the third entry for Scott?
19 A Yes, sir.
20 Q He refers to the acceptance rate there?
21 A Yes, sir.
22 Q And prior to that had you asked him about the
23 acceptance rate?
24 A Yes, sir.
25 Q Where had you done that?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5431
Watstein-redirect/White


1 A I believe the second entry is accurate. I might have
2 not asked him. He might have volunteered it.

3 Q All right.

4 Looking at page 4, the second entry for you,

5 where it says e.g.

6 A Ri ght.

7 Q You say, quote, in other words, I am not on some kind

8 of a mailing list somewhere or something. Do you see

9 that?
10 A Yes.
11 Q Mr. Michaelson, said, no, not that I know of, no,
12 because we have to reject more people than we actually
13 accept. Do you see that?
14 A Yes, sir.
15 Q Now, if you look at page 7, in the middle of the
16 page, Scott says, okay, umm, do you see that entry?
17 A Yes, sir.
18 Q Now, after he learned that you were a beauty parlor
19 owner, what duration membership did he offer you?
20 A Two years.
21 Q Mr. Neville asked you about the fact that he offered
22 you a two-year duration, and you indicated in response to
23 his question that that was, quote, reducing the unit of
24 sale.
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5432
Watstein-redirect/ White


1 Q What did you mean by that?
2 A Many times when a prospect has limited financial

3 wherewithal, the salesperson would lower the unit of sale,

4 instead of selling five year or lifetime membership, he

5 would sell the prospect a two-year membership, in order to

6 motivate the prospect to say yes rather than saying it is

7 too much money, I won't buy it.

8 Q Mr. Neville asked you if you expected Mr. Michaelson

9 to reject you because you were a hair salon. Do you
10 remember he asked you that?
11 A Yes, sir.
12 Q Is it the passage we read on the previous page, did
13 Mr. Michaelson say anything about rejecting people?
14 A Yes, sir.
15 Q What did he say?
16 A He said that they reject 5,000 out of 6,000, or
17 accept 1,000 out of 6,000.
18 Q And on the second entry on the bottom page 7 for
19 Scott, he says, we, we wouldn't take y our money for it; do
20 you see that?
21 A Yes, sir.
22 Q Mr. Neville pointed out to you that he said that; do
23 you remember that?
24 A That is correct.
25 Q If you review the following, the rest of the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5433
Watstein-redirect/White


1 transcript, does Mr. Michaelson try to sell you a
2 membership?

3 A Yes, sir.

4 Q And is he willing to take your money for it?

5 A Yes, sir.

6 Q If you look on page 10 and 11, does he offer you a

7 phone number?

8 A Yes, sir.

9 Q Okay.
10 Now, if you look at Exhibit 1325.
11 A Yes, sir.
12 Q Now, that's a tape recording that Mr. Geduldig asked
13 you about that you have with Annette Haley; is that right?
14 A That's correct, sir.
15 Q Now, if you look at 5, about two-thirds of the way
16 down, Annette says at least 6,000 apply every single
17 month.
18 You say, six, oh, I see.
19 Annette, but we don't accept everybody.
20 Do you see that?
21 A Yes, sir.
22 Q Now, I want to look at the question you asked on the
23 top of page 6. You say, no, my question is, how, half the
24 people get rejected? A third?
25 Now, if half or a third were rejected, how many

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5434
Watstein-redirect/White


1 would be accepted?
2 A The inverse, obviously a half or two-thirds.

3 Q So 50 to 60 to 70 percent?

4 A Yes, sir.

5 Q And Annette's response is I would say we accept about

6 5,000 -- five percent; do you see that?

7 A Yes, sir, 5 percent, yes.

8 Q And is it correct that she picks the lower,

9 therefore, more desirable figure than what you said in the
10 question?

11 A That is correct, sir.
12 Q After that you said, and Mr. Geduldig asked you about
13 it, so I am not going to find a delicatessen owner in this
14 thing?
15 Annette responds, no.
16 Do you remember Mr. Geduldig asked you about the
17 Stage Deli in New York, and Ben's Deli here on Long
18 Island?
19 A Yes, sir.
20 Q Now, had you made any other calls to Who's Who
21 Worldwide posing as a delicatessen owner?
22 A Yes, sir.
23 Q At the risk of flipping around, if you can look back
24 at Exhibit 1306.
25 THE COURT: That is definitely a risk.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5435
Watstein-redirect/White


1 MR. WHITE: I concede that.
2 Q Do you see Exhibit 1306?

3 A Yes, sir.

4 Q And can you tell us what the date you recorded 1306

5 is?

6 A If I am reading it properly, O ctober 23rd, 1994.

7 Q When is it in comparison to when you spoke to Annette

8 Haley on tape 1325 -- it is before it, do you pose as a

9 deli owner?
10 A Yes, sir.
11 MR. GEDULDIG: For clarification purposes, can we
12 know the participants of that conversation?
13 MR. WHITE: Yes. Mr. West and Jill Barnes.
14 MR. GEDULDIG: I will object to that. There was
15 no direct examination that I made of this man regarding
16 Jill Barnes. I examined him purely on conversations he
17 had with my client. To impose what Jill Barnes said to
18 Mr. Watstein on my client --
19 THE COURT: Not necessarily, you went into the
20 question of this delicatessen ownership. And that is
21 apparently what subject Mr. White is on, which is why he
22 is flip flopping again.
23 MR. GEDULDIG: In that case I will ask Mr. White
24 to read the entire question and answer, no, that he
25 referred to. I believe it is misleading.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

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Watstein-redirect/White


1 THE COURT: Keep your voice up.
2 MR. GEDULDIG: I believe it is misleading. There

3 is a short paragraph there. He read one word, no.

4 THE COURT: What page on 1325-A, is it?

5 MR. GEDULDIG: Page 6, Exhibit 1325-A, about

6 halfway down to paper, Mr. White read, no, that's it.

7 That's all he read. There is more to it all dealing with

8 the list of the delicatessen owners.

9 THE COURT: I am not following you,
10 Mr. Geduldig. On page 6 you say Mr. White didn't state
11 the full question and answer?
12 MR. GEDULDIG: That's correct.
13 Q Which one are you referring to?
14 MR. GEDULDIG: Referring to about halfway down
15 the page, Judge, Mr. White read, Annette says no.
16 The introduction sentence i s a few attributions
17 on top of it. So, I am not going to find a delicatessen
18 owner in this thing.
19 If you go down, go down about three or four
20 attributions, there is a whole paragraph there regarding
21 exactly what Mr. Watstein said about finding a
22 delicatessen owner.
23 THE COURT: I am afraid you will have to bring
24 that up in recross, if you wish to do so. This is now
25 redirect, and counsel is properly following the rules in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5437
Watstein-redirect/White


1 my opinion.
2 Go ahead.

3 Q Now, looking at 1306 --

4 THE COURT: Except for the flip-flopping, of

5 course.

6 Q 1306, at the bottom, how many delicatessens do you

7 say you own?

8 A One.

9 Q And what do you say your educationally background is?
10 A It --
11 Q At the bott om of page 3?
12 A Junior in high school.
13 Q At the top of page 4, how many years has your deli
14 been open?
15 A I say, umm, almost two.
16 Q Were you offered a membership?
17 A Yes, sir.
18 MR. LEE: Objection, your Honor, limiting
19 instruction.
20 THE COURT: Limiting instruction as to what?
21 MR. LEE: As to the admissibility of this person,
22 Ms. Barnes.
23 THE COURT: This is being offered for two
24 reasons. One, in redirect examination to explain the
25 situation -- allegedly explain the situation as to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5438
Watstein-redirect/White


1 delicatessen owners, and secondly as far as Jill Barnes is
2 concerned, that is only against the defendant Who's Who

3 Worldwide. That's correct.

4 Very well.

5 Is that correct, Mr. White?

6 MR. WHITE: Yes, your Honor.

7 Q Now, the last tape I want to look at is

8 Exhibit 1330. Do you have that in front of you?

9 A Yes, sir.
10 Q And if you look at the bottom of page 1 and page 2,
11 do you indicate -- I am sorry, let me back up.
12 This is a conversation with Steve Walden; is that
13 correct?
14 A Yes, sir.
15 Q Now, do you indicate there in that conversation that
16 you have had a prior conversation with Steve Walden?
17 A Yes, sir.
18 Q Do you remember Mr. Jenks asked you if it is true
19 that you had had such a conversation? And the answer is
20 no; is that right?
21 A That is correct.
22 Q Now, if you look on page 2 at the top, as Mr. Jenks
23 pointed out, you had not spoken to him before. And
24 Mr. Walden answers -- you ask him, do you recall the
25 conversation?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5439
Watstein-redirect/White


1 He answers, I definitely do, yes.
2 Do you see that?

3 A Yes, sir.

4 Q You say, oh, good, good, good.

5 Walden, it's not common that I get people who are

6 not multibillionaires, CEOs, so when I get a real life

7 person who can benefit of course it stands out in my mind.

8 Do you see that?

9 A Yes, sir.
10 Q And look at page 9, and I want to ask you about a
11 statement that Mr. Jenks asked you about, where you say in
12 the middle of the page, well, I really don't have any
13 expert -- to be honest with you, honestly, I don't want to
14 mislead the people because I just, I just getting the
15 promotion as of January 1.
16 Do you see that?
17 A Yes, sir.
18 Q And again, Mr. Jenks asked you whether you had really
19 gotten a promotion; is that right?
20 A Yes, sir.
21 Q And you had?
22 A That's right.
23 Q And Mr. Walden's response is, hey, fake it 'til you
24 make it, right?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5440
Watstein-redirect/White


1 THE COURT: The transcript I have says fake it
2 'til you make.

3 MR. WHITE: I am sorry, I added the last word. I

4 am sorry.

5 Q Now, you can put away the book of transcripts.

6 Now, Mr. West, you were asked a lot of questions

7 on cross-examination last week regarding whether or not

8 your company intentionally did not deliver the products it

9 promised to its customers. Do you recall all that?
10 A Yes.
11 Q And can you tell us the sequence of events that led
12 to the non-delivery of the products of your company?
13 A Yes, sir.
14 In 1988 we had contracted out the data entry and
15 computerization pro cess to an outside vendor located in
16 Connecticut. And in general that went rather smoothly,
17 and that position was administered -- delivered on a
18 timely basis as was all the related products.
19 In 1989 we chose to bring that function in-house
20 and hired our own in-house computer expert. I gave that
21 gentleman a check for $42,000 to set up an internal
22 computer facility. And, unfortunately, he turned out to
23 have severe emotional and alcoholic problems. And the
24 computer system failed. A great deal of data was lost,
25 probably tens of thousands, maybe 10,000 names in total,

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5441
Watstein-redirect/White


1 and we found ourselves not able to deliver a great number
2 of books and facts not knowing who it was to.

3 We retained a number of consultants, one was

4 Stafford & Consultant s, a college professor in Long Island

5 who had a computer outfit and we always were plagued as to

6 our computer system. Eventually we utilized our own

7 computer system, utilizing Stafford & Computers,

8 or & Associates system, and we had a great number of

9 complaints.
10 Q Did you intentionally not deliver the products that
11 customers purchased from your company?
12 A No, sir.
13 Q If you can take a look at Defendant's Exhibit AK,
14 which is in evidence, that's the information that -- the
15 charges to which you pled guilty; is that correct?
16 A Yes, sir.
17 Q Did you plead guilty to intentional non-delivery of
18 product as mentioned in that information?
19 A No, sir.
20 MR. TRABULUS: Objection, your Honor.
21 THE COURT: What ground?
22 MR. TRABULUS: Your Honor, it is asking for a
23 characterization. Intentional non-delivery of pro duct is
24 not a crime as such. You have an information alleging
25 criminal conduct, and it encompasses a variety of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5442
Watstein-redirect/White


1 different acts, not all set forth there necessarily. It
2 is a misleading question.

3 THE COURT: There is no crime entitled

4 "intentionally non-delivery of Who's Who directories," is

5 there?

6 MR. WHITE: No, your Honor, but it is not set

7 forwards in the information.

8 THE COURT: What did you plead guilty to?

9 THE WITNESS: A number of items, your Honor,
10 indicating that people were nominated, when in fact they
11 were not; indicating that we in fact had a selection
12 committee --
13 THE COURT: You pled guilty to mail fraud?
14 THE WITNESS: Yes, sir.
15 THE COURT: What else?
16 THE WITNESS: Income tax evasion , and the filing
17 of an improper not for profit permit with the post office,
18 and the filing of improper receipts on insurance claims.
19 THE COURT: All right.
20 I think the asking of that question is -- I am
21 going to sustain the objection.
22 Q Now, you were asked questions on cross-examination
23 regarding the home you were building on Long Island; do
24 you remember that?
25 A Yes, sir.

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1 Q Were you involved in setting that fire?
2 A Absolutely not.

3 Q You were asked whether or not you received insurance

4 proceeds from that. Did you?

5 A No, sir.

6 Q Who did?

7 A The U.S. Government.

8 Q How did that happen?

9 A We forwarded the proceeds as part of the agreement
10 with the U.S. Government.
11 Q Did yo u benefit in any way by the fire at your home?
12 A No, sir.
13 Q You were asked questions about the charge to which
14 you pled guilty involving the false statement to the
15 Postal Service?
16 A Yes, sir.
17 Q And that involved some sort of non-profit
18 corporation?
19 A That is correct, sir.
20 Q Can you explain what you did in connection with that
21 charge.
22 A Yes, sir. I created an entity called American Sales
23 and Marketing Institute. We filed a not for profit
24 application in New York State, and did not complete all of
25 the backup paperwork. We were subsequently granted a not

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5444
Watstein-redirect/White


1 for profit status by the post office. One of our
2 competitors complained about that status. There was a

3 legal matter. It was ruled that we in fact were not

4 entitled to that not for profit status, and I pled guilty

5 to filing an improper not for profit application.

6 Q You were asked a lot of questions on

7 cross-examination as to whether or not your company gave

8 refunds; do you recall that?

9 A Yes, sir.
10 Q And in light of the sequence of events you described
11 before with the computer problem, can you explain when
12 your company refused to give refunds?
13 A We actually never refused in total to give refunds,
14 Mr. White. But the sequence of events is that in 1988 and
15 into early 1989, there were very few refund requests. But
16 all those refund requests were honored substantially
17 immediately.
18 As we experienced the computer failure in 1989,
19 we experienced huge losses which constrained our cash
20 flow, and I took a lot of steps, none of which appropriate
21 to delay and re fuse refund.
22 Q You were asked on cross-examination regarding an
23 allegation that you had not provided health insurance to
24 your employee; do you recall that?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5445
Watstein-redirect/White


1 Q Did you provide health insurance for your employees?
2 A Yes, sir.

3 Q And was there a time when that insurance was no

4 longer in effect?

5 A Yes.

6 Q Can you tell us what happened?

7 A Yes, sir.

8 To the best of my knowledge what happened was a

9 payment was not made on a timely basis to Blue Cross,
10 although the policy clearly was in effect. I did not
11 learn of that until I received a letter from Blue Cross
12 indicating that they would terminate the policy.
13 We immediately sent a messenger into the city
14 with a check for the alleged open premium deficit. They
15 refused to accept that check, and accordingly terminated
16 the insurance policy.
17 We offered to purchase insurance policies for any
18 employees who wanted those policies who were so
19 disadvantaged.
20 Q Mr. Neville asked you on cross-examination regarding
21 a lawsuit brought by Marquis Who's Who; do you remember
22 that?
23 A Yes, sir.
24 Q Did Marquis Who's Who bring a lawsuit against you and
25 your company?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5446
Watstein-redirect/White


1 A Yes, sir.
2 Q And you indicated to -- let me back up.

3 Were you aware that they also brought a lawsuit

4 against Who's Who Worldwide?

5 A Eventually, yes, sir.

6 Q Mr. Neville asked you about whether you were present

7 in court or not, for proceedings in connection with

8 that -- with lit igation involving Marquis, and you said,

9 yes.
10 To which litigation were you referring?
11 A The litigation of Marquis against Who's Who in U.S.
12 executives.
13 Q Your company?
14 A That's correct, sir.
15 Q You were asked by Mr. Jenks regarding whether or not
16 the government could violate your probation; do you
17 remember that?
18 A Yes, sir.
19 Q Tell us what is your understanding as to who the
20 ultimate decision as to whether or not you violated your
21 probation?
22 A I am not an attorney, Mr. White. But my
23 understanding is that the probation department would
24 initiate that, and it would be approved by Judge Mishler.
25 Q And where is your probation officer located?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5447
Watstein-redirect/White


1 A In Long Island.
2 Q You said on cro ss-examination in response to

3 questions what you knew about the company when you were

4 making these phone calls, that you received letters from

5 Who's Who Worldwide; is that right?

6 A That is correct, sir.

7 Q Let me show you Government's Exhibit 1601 through

8 1606 for Identification.

9 Take a look at those, Mr. West and tell us what
10 those are.
11 (Handed to the witness.)
12 A There are six separate letters from Who's Who and its
13 related companies -- Who's Who Worldwide and Sterling, I
14 should say. Nominating me or offering me potential
15 inclusion in their directories and membership.
16 MR. WHITE: Let me provide copies to defense
17 counsel now, but the government offers 1601 through 1606.
18 (Documents handed to defense counsel.)
19 MR. WHITE: I have a copy for the Court as well,
20 your Honor.
21 (Handed to the Court.)

22 THE COURT: Any objection?
23 MR. TRABULUS: May I see the originals, please,
24 your Honor?
25 THE COURT: Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5448
Watstein-redirect/White


1 (Documents handed to Mr. Trabulus.)
2 MR. TRABULUS: May I have a voir dire?

3 THE COURT: Yes.

4

5 VOIR DIRE EXAMINATION

6 BY MR. TRABULUS:

7 Q Mr. Watstein, on the dates of all of these letters,

8 except the first one --

9 A Pardon me, I need a copy. You have the originals.
10 Q I have the originals here. I will walk up to you to
11 show you.
12 A Thank you, sir.
13 Q Mr. West, on all but the first one of these dates you
14 were cooperating with the government; is that correct?
15 Even on the first one you were; is that correct?
16 A Yes, sir, that is correct.
17 Q So, at the time of the dates of each of these letters
18 you were cooperating; is that correct?
19 A Yes, sir.
20 Q And when these letters came did you immediately turn
21 them over to the government, or to Mr. Biegelman or
22 Mr. Leonard?
23 A Reasonably promptly; yes.
24 Q Did you turn over the envelopes in which they came?
25 A I don't have a recollection of that, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5449
Watstein-redirect/White


1 Q The envelopes would have the postmark, sir; is that
2 correct?

3 A I understand that.

4 Q You understood, did you not, that this was supposedly

5 an investigation of mail fraud; is that correct?

6 A Yes, sir, that's correct.

7 Q If there was any type of fraud that was allegedly to

8 be proven involving these letters being sent to you, it

9 would require proof that it was mailed; is that correct?

10 A I don't have a direct understanding of that, no.
11 Q Did any cards come with this?
12 A I don't have a recollection, sir, no. I assume they
13 did.
14 Q Did you turn those over to the government?
15 A I am not sure, sir.
16 Q Did Mr. Biegelman tell you that when the records of
17 Who's Who Worldwide and Sterling were seized, copies of
18 blank stationery were seized?
19 A No, he didn't, sir.
20 Q Were any of those shown to you at any point in time?
21 A No, sir.
22 Q Were any of those given to you at any point in time?
23 A No, sir.
24 Q Now, some of these are not originals, they appear to
25 be photocopies; is that correct, sir?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5450
Watstein-redirect/White


1 A Some are originals and some are photocopies? I can't
2 quite tell, sir.

3 Q Do you have th e originals of those which appear to be

4 photocopies?

5 A No, sir.

6 MR. TRABULUS: Thank you.

7 Objection, I believe not a proper foundation was

8 made with regard to some of the questions were responded

9 to.
10 THE COURT: Sustained.
11 MR. WHITE: What ground, your Honor?
12 THE COURT: Insufficient foundation.
13 On what theory are you offering this?
14 MR. WHITE: Your Honor, at a minimum they are
15 corporate admissions, letters from Who's Who and Sterling
16 Who's Who. Mr. West has identified them just like every
17 other witness identified they received such letters from
18 the company. And all those other letters were admitted.
19 THE COURT: Did you personally -- do you remember
20 receiving these letters, Mr. Watstein?
21 THE WITNESS: Yes, sir.
22 THE COURT: Do you want to come, up counsel.
23 MR. TRABULUS: Sure.
24

25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5451
Watstein-redirect/White


1 (Whereupon, at this time the following took place
2 at the sidebar.)

3 THE COURT: Why aren't they admissions by the

4 corporation?

5 MR. TRABULUS: Your Honor, if I can add another

6 ground for the objection. I guess they can be admissions

7 if they are shown as coming from the corporation.

8 THE COURT: There is a prima facie showing. This

9 witness says he received them.
10 MR. TRABULUS: I would like to add another point.
11 These were never provided to us in discovery.
12 They were never provided. This was not something which
13 was first raised on the direct where we opened the door to
14 it. I believe there was testimony by Mr. Watstein --
15 excuse me, it is not a situation where we first raised
16 this on the cross of Mr. Watstein. It was certainly
17 something which I believe was encompassed by his direct
18 examination, receipt of them, the letter from Who's Who,
19 and I think that it was elicited by the government, he was
20 shown a letter from Cathy Ross by Biegelman, and there was
21 something else to him having received letters. Nor was
22 that ever attacked by the defense to establish that he
23 hadn't received the letter. This is something that should
24 have been disclosed to us a long while ago. It was saved
25 for redirect. On that basis alone I believe it should be

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5452
Watstein-redirect/White


1 excluded.
2 MR. SCHOER: I didn't hear everything that

3 Mr. Trabulus said, but I don't believe that this was ever

4 provided to us in any discovery.

5 THE COURT: That's what Mr. Trabulus just said.

6 MR. SCHOE R: I am sorry.

7 THE COURT: What about that, Mr. White?

8 MR. WHITE: It was, your Honor. There was a

9 large volume of letters. I know that I specifically
10 included in one of my discovery letters, and I can dig it
11 out if I have to, that the government had solicitation
12 letters and mailing files that were available for
13 discovery. If you want I will go out and get the letter
14 and show you exactly what date I made it available to
15 them.
16 Not only that, but some of the letters are
17 actually referred to in the complaint of March of 1995.
18 Inspector Biegelman set forth a whole series mailings,
19 your Honor it is in the complaint.
20 THE COURT: The complaint in this case?
21 MR. WHITE: Yes.
22 THE COURT: Why are you prejudiced by not
23 specifically having been given these letters? Let's
24 assume it was mentioned in the broad, major di sclosure by
25 the government. But what prejudice is there? Where have

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5453
Watstein-redirect/White


1 you been prevented from defending yourself because they
2 were brought out on redirect examination?

3 MR. TRABULUS: Well --

4 THE COURT: They should have been brought out on

5 direct, I admit that. You are right.

6 MR. NELSON: Your Honor, the prejudice that I

7 engender on behalf of Mr. Martin specifically is that in

8 the cross-examination, my cross-examination, I attempted

9 to establish from Mr. West that he did not have copies of
10 the sales presentations, he had never seen them prior to
11 the interviews being conducted in the room; that he had
12 never seen the solicitation letters prior to those
13 interviews being conducted. In a sense he was leading my
14 client on by saying th ere was puffing and exaggerations in
15 something he had not seen before. Now the government is
16 presenting evidence that he had seen the statements
17 sometime previously.
18 Certainly, I was not aware of it previously and I
19 might not have tailored my cross-examination in that
20 manner.
21 It might be we were provided this in the
22 literally of tens of thousands documents provided. We
23 were not told it was an exhibit to be used. It was never
24 raised as an exhibit, and my cross-examination was
25 detailed and specific, and I would have prepared it in a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5454
Watstein-redirect/White


1 manner knowing that they existed.
2 THE COURT: That is it like a two-edged sword,

3 Mr. Nelson. On the one hand, the same as Tevya in Fiddler

4 on the Roof. You are right, and they are right.

5 Everybody is right. You brought it out on cross that he

6 didn't receive solicitation letters, and the government

7 comes back and shows he did.

8 MR. NELSON: Without the knowledge that the

9 government was in possession of such letters.
10 THE COURT: General constructive knowledge, not
11 actual.
12 MR. NELSON: I would not agree with that, Judge.
13 THE COURT: If he is going to show me that a
14 letter was sent to you including all of this, then you
15 have constructive knowledge.
16 MR. SCHOER: Judge, can I speak to that issue,
17 both manners which Mr. White raised.
18 I believe he did write us a general letter saying
19 here is all the material, the discovery is available to
20 you, and he pointed us to the post office into a room.
21 I don't believe that these letters were in that
22 room. My gut is that they were in the U.S. Attorney's
23 Office in a file somewhere.
24 Secondly, with respect to the complaint, the one
25 letter that is referred to in the complaint from what I

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5455
Watstein-redirect/White


1 can see based on my notes, there is a letter -- the
2 complaint refers to a letter dated January 9th, 1995, to a

3 Steve Johnson. And it says that that is a fictitious

4 name.

5 MR. WHITE: Right.

6 MR. SCHOER: How do we know, how are we supposed

7 to know it has to do with Mr. West.

8 MR. TRABULUS: I went through the post office

9 facilities and I didn't see any solicitation letters
10 there.
11 THE COURT: I will overrule the objection. I
12 don't think it is prejudice in the legal sense in any
13 way. And I don't believe your cross-examination at the
14 time showed any kind of weakness or exposed your client i n
15 any way. You can now come back and say I never got these
16 letters before, etcetera, etcetera. You are showing it to
17 us for the first time. When did you give the letters to
18 Mr. White? When did he talk to you about this? We were
19 never shown this before. You can bring all of that out on
20 recross-examination. I think this is substantive evidence
21 that I will not preclude because you were given general
22 notice of all these records.
23 It is true that it is a major job, but there are
24 ten of you. Some of you were extremely diligent -- you
25 are all diligent. But some were extra diligent.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5456
Watstein-redirect/White


1 Mr. Schoer probably spent days going through these records
2 if I know Mr. Schoer. Mr. Trabulus spent weeks going

3 through these records.

4 MR. NELSON: As did I, your Honor.

5 THE COURT: I don't want to leave you out,

6 Mr. Nelson. I am not aware of your propensities as I am

7 of Mr. Schoer.

8 You notice that I skipped Mr. Jenks. That's not

9 his forte, burrowing through records.
10 MR. JENKS: That's correct.
11 MR. WALLENSTEIN: You forgot me, I never looked.
12 MR. GEDULDIG: Can I request there be a limiting
13 charge on these documents, that they only apply to the
14 corporations?
15 THE COURT: Yes.
16 MR. TRABULUS: Thank you.
17
18 (Whereupon, at this time the following takes
19 place in open court.)
20 THE COURT: I have reversed my ruling and
21 overruling the objections. I am allowing the documents in
22 evidence, with the limiting instruction that they are only
23 admissible and offered against the corporation -- the
24 corporations.
25 Let's see, one, two, three, fo ur, five -- four of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5457
Watstein-redirect/White


1 them are from Who's Who Worldwide, and two are from
2 Sterling Who's Who.

3 So that's Government's Exhibits 1601 through 1606

4 in evidence.

5 (Government's Exhibit 1601 received in evidence.)

6 (Government's Exhibit 1602 received in evidence.)

7 (Government's Exhibit 1603 received in evidence.)

8 (Government's Exhibit 1604 received in evidence.)

9 (Government's Exhibit 1605 received in evidence.)
10 (Government's Exhibit 1606 received in evidence.)
11
12 REDIRECT EXAMINATION (cont'd)
13 BY MR. WHITE:
14 Q 1601 through 1606, look through the -- page through
15 and look through the letters. Were those sent to you
16 before or after you were arrested?
17 A They are all after, sir.
18 Q And when is the first one?

19 A The first one is dated December 28, 1992.
20 Q 1602, what is the date of that?
21 A March 31st, 1994.
22 Q And 1603?
23 A August 8th, 1994.
24 Q And 1604?
25 A November 2nd, 1994.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5458
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1 Q And 1605?
2 A December 5, 1994.

3 Q And with the exception of the first one, 1601, were

4 the remaining ones after you had also pled guilty?

5 A Yes, sir.

6 Q So, you got these letters when you were a convicted

7 felon?

8 A Yes, sir.

9 Q Now, look at Exhibit 1606.
10 First of all, tell us the dates of that one?
11 A January 9, 1995.
12 Q What company is sending you the letter?
13 A Sterling Who's Who.
14 Q Now, who is it addressed to?
15 A Steve Johnson.
16 Q What is the address?
17 A 355 Fern, F E R N, Drive, Fort Lauderdale, Florida.
18 Q Who lives that 355 Fern Drive?
19 A I did at that time, sir.
20 Q Can you tell us who Steve Johnson is?
21 A It is a code name I use when subscribing to
22 magazines, so when I receive renewal notices, I knew what
23 the cause was.
24 Q Does Steve Johnson exist at all?
25 A No, sir.

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1 Q Now, you were asked last week how you got to court
2 last week. Do you remember that?

3 A Yes, sir.

4 Q What kind of car were you driving in?

5 A Yes, sir.

6 Q What kind of car was it?

7 A A limousine, sir.

8 Q And you were asked whether or not you paid for the

9 limousine. Do you remember that?
10 A Yes, sir.
11 Q Did you?
12 A No, sir.
13 Q Tell us how it was that you were d riving in a
14 limousine?
15 A I exchanged the creation of the business plan in
16 return for limousine services.
17 Q And why was it that you took limousine services than
18 payment in money?
19 A The individual had no money to make payment.
20 Q So, he paid you in kind?
21 A That is correct, sir.
22 Q You were asked a lot of questions about the selection
23 committee that was mentioned in the letters that you sent
24 out?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5460
Watstein-redirect/White


1 Q Can you explain to us whether there was really a
2 committee and how it worked?

3 A The names listed on the stationery were in the --

4 were in the large business acquaintances and friends of

5 mine. And although I believed that I asked my secretary

6 to contact these individuals and tell them they were on a

7 selection committee, the majority were not contacted by my

8 secretary, and in fact, they had no real role as a

9 practical matter in the selection, in any event.
10 MR. WHITE: Your Honor, I have no further
11 questions.
12 THE COURT: Recross-examination.
13 MR. TRABULUS: Sure.
14 THE COURT: We will recess a little later today
15 because we started later.
16 MR. TRABULUS: Sure. No problem.
17
18 RECROSS-EXAMINATION
19 BY MR. TRABULUS:
20 Q Mr. West, I think you just mentioned -- withdrawn.
21 You mentioned you had a secretary; is that
22 correct?
23 A As it relates to Who's Who in U.S. Executives?
24 Q Yes.
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5461
Watstein-recross/Trabulus


1 Q And had that secretary previously worked for you at
2 the othe r company, the one also at Cutter Mill Road?

3 A I believe so.

4 Q She worked for you for a long time?

5 A I believe so.

6 Q She was a good secretary?

7 A No, sir.

8 Q You kept her for a few years; is that right?

9 A Yes, sir.
10 Q She would have had no reason not to contact people
11 you asked her to contact; is that right?
12 A Not by intention, no, sir.
13 Q And you mentioned that the government got the
14 proceeds of the insurance on the Mill Neck property that
15 had burned down; is that right?
16 A Yes, sir.
17 Q And you had been under investigation for a period of
18 time concerning that time for that fire?
19 A No, sir.
20 Q You were not under investigation for a period of
21 time?
22 A Not to the best of my knowledge.
23 Q You told us earlier you were under investigation?
24 A Not to my knowledge, sir.

25 Q Were you questioned by the police about it?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5462
Watstein-recross/Trabulus


1 A Yes, I was questioned, yes.
2 Q I believe you indicated on your direct examination

3 you had taken a lie detector test?

4 A Yes, sir.

5 Q Not required by the investigation?

6 A I voluntarily did that.

7 Q Were you there a point in time there was a federal

8 investigation about that?

9 A Not to my knowledge.
10 Q When you talked to Inspector Biegelman you might have
11 discussed the fire?
12 A We might have discussed it, there was no
13 investigation to my knowledge.
14 Q Inspector Leonard?
15 A Not to my knowledge.
16 Q Did there seem to be less law enforcement activity
17 with regard to the fire after you started cooperating?
18 A No, sir.
19 Q And you were told -- you said you didn't benefit at
20 all by that million dollars that was paid by the insurance
21 company; is that correct?
22 A That is correct, sir.
23 Q You did benefit in the sense that it was paid to the
24 U.S. government; is that correct?
25 A You might say that philosophically, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5463
Watstein-recross/Trabulus


1 Q It is not philosophically, it was part of your
2 sentence, wasn't it?

3 A It didn't matter how much money was being turned

4 over, sir.

5 Q The government was looking for something out of you;

6 is that correct?

7 A I can't respond with a yes or no, sir.

8 Q They asked you to turn over some money in your son's

9 account from what you tell us was an inheritance; is that
10 correct?
11 A Yes, sir.
12 Q And did you tell the government that th at money had
13 nothing to do with the crime that you committed?
14 A We made such an argument, sir.
15 Q They said we want it anyway?
16 A Yes, sir.
17 Q They had taken money from your son who had not done
18 anything wrong?
19 A I can't respond with a yes or no.
20 Q That money came from one of his grandparents?
21 A Yes, sir.
22 Q Who passed away?
23 A Yes, sir.
24 Q And they took that away from him?
25 A I can't respond fully with a yes or no.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5464
Watstein-recross/Trabulus


1 Q You helped -- allowed them to take it away?
2 A Yes, sir.

3 Q Did you consult with your lawyers if they had the

4 power to --

5 THE COURT: You have to slow down?

6 A You are picking up ahead of steam again,

7 Mr. Trabulus.

8 Q Was there a trustee to that mo ney?

9 A Yes, sir.
10 Q Who was that trustee?
11 A My wife.
12 Q Did she consult an attorney as to whether it was the
13 proper use of the money?
14 A Yes, sir.
15 Q The attorney told her she could take the money which
16 was her sons, left to the son by a grandparent and utilize
17 it to help buy your way out of jail; is that right?
18 A I can't respond with a yes or no, sir.
19 Q That book over there in front of you, it has a bunch
20 of transcripts in it?
21 A Yes, sir.
22 Q And there were some transcripts that you were not
23 involved in?
24 A I haven't really studied the book.
25 Q Take a look in it, through it.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5465
Watstein-recross/Trabulus


1 A Yes, sir.
2 THE COURT: Were there some he was not involved

3 in?

4 MR. TRABULUS: Yes , sir.

5 THE COURT: We will take your word for it.

6 MR. TRABULUS: I want him to look through it for

7 other things, your Honor.

8 THE COURT: We will not have him sit here and

9 look through things that are so.
10 Q Trying to cut it short, you reviewed some transcripts
11 before testifying; is that correct?
12 A Yes, sir.
13 Q Between the date of your last testimony and today
14 have you reviewed any transcripts?
15 A No.
16 Q You did review transcripts before coming up here; is
17 that correct?
18 A Yes, sir.
19 Q Now, the transcripts that you reviewed were of tapes
20 you yourself were involved in?
21 A That is correct, sir.
22 Q And some of those were only partial transcripts?
23 A No, sir.
24 Q You reviewed complete transcripts of each of the 61?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COU RT REPORTER

5466
Watstein-recross/Trabulus


1 Q When White asked you, did he not some questions
2 earlier -- actually, last week, to the effect of despite

3 all the facts that all defense counsel asked you

4 concerning the bad things you did, it doesn't change what

5 is on the tapes; do you recall that?

6 A I recall the question, yes, sir.

7 Q It was Mr. White who first asked you in this

8 proceeding concerning various crimes that you pled guilty

9 to and the actors that you did; is that correct?
10 A Yes, sir.
11 Q And you met with Mr. White before you first
12 testified; is that correct?
13 A That is correct, sir.
14 Q And did you tell him in that conversation that no
15 matter what I might have done, it doesn't change what is
16 on the tapes?
17 A No, sir.
18 Q Did he tell you that at that point?
19 A No, sir.

20 Q Did he ask you why he was even going to be asking you
21 relating to these crimes about another company, not even
22 Who's Who, when you had the tapes?
23 A No, sir.
24 Q You never discussed with him why he chose to bring
25 that out; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5467
Watstein-recross/Trabulus


1 A That's correct.
2 Q Now, when Mr. White began his redirect examination,

3 the last day you testified on a day earlier today, he

4 asked you about questions I had asked you, questions where

5 I had asked you whether or not at the time you did certain

6 things, you did them with intent to defraud; do you recall

7 that?

8 A Yes, sir.

9 Q And do you recall being asked these questions and
10 giving these answers in response to questions to
11 Mr. White, beginning at page 5260 -- withdrawn, forget it.
12 You said basically you didn't have the technical
13 understanding at the time these things were happening, you
14 didn't have a technical understanding that the things were
15 illegal; is that correct?
16 A In substance, yes.
17 Q When I asked you with respect to intent to defraud, I
18 didn't ask about a legal technicality?
19 A No, not accurate what you are saying.
20 Q Didn't I ask you if you were intending to defraud the
21 legal --
22 A I thought it was a technical legal question.
23 Q That's what you understood?
24 A That's what I understood your phrase means.
25 Q When I asked you whether or not you would have picked

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5468
Watstein-recross/Trabulus


1 out law enforcement people, and picked out government
2 workers and practicing attorneys if you had been acting

3 with intent to defraud them, you thought I was just

4 questioning you concerning a legal technicality, whether

5 or not you technically knew at the time what intent to

6 defraud was; is that correct?

7 A That was my understanding of the question, sir.

8 Q And you told Mr. White on redirect, didn't you, that

9 at the time you did these things, and when I say these
10 things I mean when you first began your businesses, not
11 when you first started operating it the way you did, but
12 when you first planned it, first planned to send letters
13 to people advising them they were nominated, and you said
14 you were intending to publish a directory and do things
15 right and do things in good faith, you said when you first
16 did that you told Mr. White that you believed it was
17 misleading?
18 A Yes.
19 Q And dishonest?
20 A Yes.
21 Q And wrong?

22 A Yes.
23 Q Now it is your testimony that you selected a group of
24 law enforcement people to do something misleading to?
25 A I can't respond yes or no to that question.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5469
Watstein-recross/Trabulus


1 Q It is your testimony that you picked a group of law
2 enforcement people to do something which you knew was

3 dishonest; is that correct?

4 A I can't respond with a yes or no to that question,

5 sir.

6 Q And it is your testimony that you picked a group of

7 law enforcement people to do something that you knew at

8 that time was wrong; is that your testimony?

9 A I can't respond with a yes more no, sir.
10 Q Didn't you feel when you said nomination to tease
11 people was no more than puffing or hype and not illegal?
12 A No, sir.
13 Q Isn't it a fact if you felt it w as wrong, dishonest,
14 misleading, illegal, intent to defraud, the last people
15 you would have selected to do this to would have been
16 attorneys, law enforcement people, and government people,
17 yes or no, sir?
18 A I cannot respond to a yes or no to that question,
19 sir.
20 Q You told me, did you not, when I was cross-examining
21 you before, when you start out you had good objectives; do
22 you recall that?
23 A Yes, sir.
24 Q And you said you were doing this at that time, you
25 felt you were doing it in good faith; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5470
Watstein-recross/Trabulus


1 A Time frame is 1987, 1988, yes, sir.
2 Q And that's before you say you started failing to

3 deliver, and failing to supply the things which you had

4 promised the people; is that correct?

5 A In a time sequence, your question is correct, sir.

6 Q Now, before we start to get to the non-delivery, to

7 that business, let me ask you, in terms of what the tapes

8 say, in one of the tapes you pose as your father-in-law,

9 Mr. Weinman?
10 A Yes, sir.
11 Q And Mr. Weinman was an accountant; is that right?
12 A On the tape, sir.
13 Q And he is the only one on the tape --
14 A Yes, sir.
15 Q He is the only one that you paid for?
16 A Yes, sir.
17 Q He is the only one of these 61 nonexistent people
18 that you posed as, that you know as you sit here today
19 would have been actually accepted into Who's Who
20 Worldwide; is that correct?
21 A I cannot respond to that question with a yes or no.
22 Q In each of the other 61's that you did, you never
23 took it beyond the point that -- at which you hung up on
24 the salesperson, or the salesperson h ung up on you -- I
25 don't mean an unfriendly sense of hanging up -- but you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5471
Watstein-recross/Trabulus


1 left it I have to either get approval from my wife, or I
2 have to get my boss to authorize the use of a company

3 credit card, you never took it beyond that except for

4 Mr. Weinman; is that correct?

5 A No, not accurate.

6 Q There was one other one where you used a nonexistent

7 credit card?

8 A Yes, sir.

9 Q Besides those two you never took it beyond that?
10 A Yes, sir.
11 Q And with the non-existent credit card and once they
12 checked out the credit card to find out it was
13 nonexistent, it wouldn't have gone to any level of
14 non-review with respect to that?
15 A I cannot comment on that.
16 THE COURT: You better slow down, Mr. Trabulus.
17 Q When you used the nonexistent credit card you didn't
18 become a member?
19 A I have no knowledge of that.
20 Q No one got back to you and said you were not a member
21 of who you said you were?
22 A They previously made me a member.
23 Q With Mr. Weinman?
24 A No, sir.
25 Q They previously made you a member with the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5472
Watstein-recross/Trabulus


1 nonexistent credit card?
2 A Yes, sir.

3 Q What did you pose as to that one?

4 A I don't have a recollection, sir.

5 Q So that one, if one with Mr. Weinman and that's one,

6 were the two, and with Mr. Weinman you posed as an

7 accountant; is that correct?

8 A Yes, sir.

9 Q And did you discuss with Mr. Biegelman in doing this
10 that this would be some kind of test to see who would and
11 who would not get i nto Who's Who?
12 A No, sir.
13 Q Did he explain to you that he was looking to do some
14 kind of test?
15 A No, sir.
16 Q Did you have any conception as you were doing this as
17 to what the purpose of it was?
18 A I had a general conception, yes, sir.
19 Q And did you sense that one of the purposes was to see
20 how selective Who's Who Worldwide would be? To see who
21 could get in and who couldn't?
22 A I believe it is an accurate statement.
23 Q It is one of the purposes?
24 A It was a topic, I can't say a purpose.
25 Q Was it another purpose to see if Who's Who Worldwide

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5473
Watstein-recross/Trabulus


1 would in fact give refunds to people?
2 A No, sir.

3 Q Did it ever occur to you on behalf of Mr. Weinman, or

4 posing as Mr. Weinman, posing as a refund as to what would

5 happen?

6 A Not to my imagination.

7 Q You have a pretty good imagination?

8 A No.

9 Q And you came up with 61 names and were able to talk
10 as if you were those people easily?
11 A Yes, sir.
12 Q --
13 THE COURT: You will have to slow down,
14 Mr. Trabulus.
15 Q Did anyone suggest to you if you tried that and got a
16 refund it might hurt the government's case?
17 A No, sir.
18 Q Now, did it occur to you that every time you called
19 up posing as one of these people, you were telling the
20 salespeople that you spoke to that you had already
21 received a card; is that correct?
22 A Not in each and every instance, sir, but the bulk of
23 the instances, sir.
24 Q Were there ever any instances in which you didn't
25 tell them that you either had received a card, or you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5474
Watstein-recross/Trabulus


1 previously spoke to someone else there?
2 A It might have been one or two, I don't have a clear

3 recollection.

4 Q You called up cold?

5 A I don't recall. There might be a different

6 circumstance other than the receiving of the card. I have

7 to check all 61 transcripts to review that.

8 Q I am not asking you to do that.

9 With regard to those cases in which you said you
10 previously had spoken to someone else, or that you had
11 received a card, and sent it back and hadn't heard
12 anything, which would be virtually all of the 61, or maybe
13 all of the 61, did it occur to you that you were in effect
14 telling the salesperson you spoke to that you had already
15 undergone a certain level of selection, at least at
16 whatever level there was to reach the card?
17 A Absolu tely not.
18 Q It didn't occur to you?
19 A No, sir, a mailing list, not a selection.
20 Q Did it ever occur to you whether or not you felt that
21 way, you didn't necessarily know what the salespeople you
22 were talking to knew about; is that correct?
23 A I can't speak for what was in their mind, sir.
24 Q Did it occur to you that you might be misleading the
25 salespeople into thinking you had already passed a certain

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5475
Watstein-recross/Trabulus


1 level of selection when you spoke to them?
2 A Absolutely not.

3 Q It didn't occur to you?

4 A No, sir.

5 Q Now, did it ever occur to you to call up and say to

6 them not that I had received a card or I had spoken to

7 somebody before, or something like this: Mr. Salesperson,

8 my neighbor across the street the street, whose job is no

9 better than mine and doesn't make any more than money that
10 I do, he got a solicitation from Who's Who Worldwide and
11 is bragging all about it and by, gosh, I should be in
12 that, too, did you ever think of that?
13 A No.
14 Q Never did?
15 A No, sir.
16 Q Would it be a fair test with the sales persons to see
17 how far it would have taken you?
18 A No, sir.
19 Q It didn't occur to you, did it?
20 A No, sir.
21 Q Now, where is the book, the red one?
22 One thing we have not done is shown to the jury
23 this book. We will read to them portions of it, except on
24 a very limited basis. And with the Court's permission,
25 since you were shown page 34 by Mr. White, and you pointed

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5476
Watstein-recross/Trabulus


1 to Larry Flint, I would like you to go down from left to
2 right, to read at least the names of each of the people on

3 this book, and also their titles. You don't have to read

4 the rest of it.

5 A I don't know if I can read the titles they are so

6 small. I will take a look at it.

7 No, I can't read the type. It is too small to

8 read it.

9 Q Let's read it together.
10 A Certainly.
11 Q Seymour Fleisher, chairman of the board --
12 THE COURT: You have to spell all the names. If
13 you are going to go through all the names, Mr. Trabulus --
14 or photostat the page and send it around.
15 MR. TRABULUS: That's what we will do at the
16 break. I think that might be better.
17 Q Now, one of the tests --
18 THE COURT: How much more do you have?
19 MR. TRABULUS: A fair amount more.
20 THE COURT: Members of the jury, we will take a
21 ten-minute recess.
22 Please do n ot discuss the case, and keep an open
23 mind.
24 Please recess yourselves.
25 (Whereupon, at this time the jury leaves the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5477
Watstein-recross/Trabulus


1 courtroom.)
2

3 (Whereupon, a recess is taken.)

4

5 THE CLERK: Jury entering.

6 (Whereupon, the jury at this time entered the

7 courtroom.)

8 THE COURT: Please be seated, members of the

9 jury.
10 You may proceed, Mr. Trabulus.
11 MR. TRABULUS: Thank you, your Honor.
12 Your Honor, I will offer Q-1, which is a
13 photocopy of page 34 of Defendant's Exhibit Q. I have
14 shown it to Mr. White.
15 THE COURT: Any objection?
16 MR. WHITE: No, your Honor.
17 THE COURT: Defendant's Exhibit Queen-1, Queen-1,
18 in evidence.
19 (Defendant's Exhibit Q-1 received in evidence.)

20 MR. TRABULUS: May I publish it to the jury?
21 THE COURT: Yes.
22 (Whereupon, the exhibit/exhibits were published
23 to the jury.)
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5478
Watstein-recross/Trabulus


1 RECROSS-EXAMINATION (cont'd)
2 BY MR. TRABULUS:

3 Q You had trouble reading the entry on page 34?

4 A Yes.

5 Q You were questioned by Mr. White with respect to

6 Larry Flint?

7 A Yes, I could see the name.

8 Q It is not a different typeface than the rest of it,

9 sir, is it?
10 A I can read the name, sir.
11 Q The last time you were here Mr. Dunn, the gentleman
12 in the corner there, asked you a bunch of questions
13 relating to the complaint that had been filed against you;
14 do you recall that?
15 A In general, sir.
16 Q You had reviewed the complaint to a certain extent,
17 had you not, in your discussions with the attorney about
18 pleading guilty?
19 A Yes.
20 Q And you understood when there was someone listed in
21 the complaint as a CI, confidential informant, that it
22 represented a potential witness if you went to trial; do
23 you understand that, did you understand those discussions?
24 A Yes.
25 Q You understood when Mr. Dunn said CI such and such

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5479
Watstein-recross/Trabulus


1 according to the complaint said so and so, that meant if
2 you went to trial you could expect that the person who, if

3 you went to trial, would be up there saying the things

4 that you said; is that correct?

5 A Yes, sir.

6 Q And that, of course, entered into your decision to

7 plead guilty; is that correct?

8 A Partially.

9 Q So, I will not ask you everything Mr. Dunn asked
10 about, but do you recall in your complaint of a CI given
11 the number 7, who had tape recorded a conversation with
12 you?
13 A I vaguely recall that, sir.
14 Q Do you recall in this complaint, CI-7, who tape
15 recorded a conversation, in which you were telling people
16 in an office meeting that the production of plaques for
17 customers started within twenty-four hours, and thus when
18 someone who called up and asked for a refund or
19 cancellation, that's it is too late, the plaque had
20 already been made; do you remember that?
21 A Is that a question?
22 Q Yes.
23 A Do I remember the statement of the CI?
24 Q Do you remember hearing that?
25 A I remember it being read to me last week here, yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5480
Watstein-recross/Trabulu s


1 Q When you were talking to your lawyer about whether or
2 not you should plead guilty or go to trial, did you

3 understand that if you went to trial there could very well

4 be a witness in here with a tape recording saying that I

5 heard, and here it is, Mr. Watstein, telling me or other

6 people, that they should tell customers that your plaque

7 had already been made, although it hadn't been, therefore

8 you can't get a cancellation, did you understand that?

9 A In a general sense.
10 Q That's what your trial would have been like?
11 A If I had one, yes, sir.
12 Q Now, you were asked I believe about a -- Mr. Dunn
13 asked you about a Mr. Moskowitz, Lee Moskowitz; is that
14 correct?
15 A That's right, sir.
16 Q This is the man who ran the credit card through on
17 the same customer multiple times?
18 A I can't answer that, sir.
19 Q Is that the man who did that as far as you understand
20 it?
21 A On one instance he did do that, yes, sir.
22 Q Now, Mr. Dunn asked you about some CI's, according to
23 the complaint, saying that Mr. Moskowitz openly
24 acknowledged charging customer credit cards multiple
25 times, and then it went on to say in the complaint, when

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5481
Watstein-recross/Trabulus


1 you learned that Mr. Moskowitz was not terminated, instead
2 he was later terminated because his sales were high, do

3 you remember being told about that?

4 A Yes, sir.

5 Q You said the facts were right but the sequence was

6 wrong; is that right?

7 A Yes, sir.

8 Q You are saying it was after he was promoted, is that

9 what you meant when you said that?
10 A He previously had a promotion prior to that, yes,

11 sir.
12 Q He kept on working until July 1991?
13 A Yes, sir.
14 Q That's when you say you voluntarily shut the business
15 down?
16 A Yes. That was August, sir, yes.
17 Q And he was kept on there until the end; is that
18 right?
19 A Mister -- that's correct.
20 Q And you didn't fire him when you found out he had
21 done this; is that correct?
22 A Yes, sir.
23 Q You should have?
24 A I don't think so.
25 Q You said your operation was clean after May of 1990?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5482
Watstein-recross/Trabulus


1 A He never did it again and apologized for us. We
2 reversed the transaction and penalized him. I don't think

3 I should have fired him for making one mistake.

4 Q He said according to the complaint multiple times he

5 did that?

6 A Is multiple two, si r.

7 Q I don't know what it means to me?

8 A It does to me.

9 (Reporter confers with the Court.)
10 THE COURT: Is that the correct question?
11 MR. TRABULUS: It is hard to tell.
12 THE COURT: Is that the correct answer?
13 THE WITNESS: Yes, your Honor.
14 THE COURT: We are up-to-date now, let's slow
15 down.
16 MR. TRABULUS: I will slow down.
17 MR. SCHOER: If I may, I believe Mr. Trabulus
18 asked a question as to whether multiple meant one or
19 whether he had previously said one, and now he was saying
20 two. I believe that's what he means.
21 MR. TRABULUS: I thought it was before.
22 MR. SCHOER: Was it, I am sorry.
23 THE COURT: All right.
24 Q Did you also read in the complaint that there was
25 another CI, number 24, and according to the complaint, in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

548 3
Watstein-recross/Trabulus


1 talking about CI-24, after the same part that they talked
2 about that, the complaint says the Nassau County Fire

3 Department advises that the origin of this fire, referring

4 to the fire at Mill Neck was highly suspicious, and that

5 it appears clear that it was started by incendiary means.

6 Do you recall that was in the complaint, too?

7 A It is absolutely accurate, yes, sir.

8 Q When you were talking to your attorney about deciding

9 whether or not you should plead guilty or go to trial, did
10 the subject come up with your attorney whether or not the
11 government was looking to try to possibly prove that you
12 were somehow involved in a suspicious arson for insurance?
13 A No, sir.
14 Q Did you ask your attorney why the government had put
15 that into the complaint if it really had nothing to do
16 with you?
17 A No, sir.
18 Q And did it occur to you that you might be under
19 suspicion for arson at that point in time from the
20 government's perspective?
21 A No, sir.
22 Q Did it occur to you if you fought it and went to
23 trial there might have been, besides the various things
24 that you pled guilty to, an additional investigation of a
25 possible arson, and that you might have been subject to an

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5484
Watstein-recross/Trabulus


1 additional charge relating to that?
2 A No, sir.

3 Q Do you know whether your attorney in speaking to

4 Inspector Biegelman or Leonard, Who's Who ever he was

5 speaking to and whatever the plea negotiations were, asked

6 if anything there would be dropped if you agreed to plead

7 guilty to the things you pled guilty to?

8 A I have no knowledge of that, sir.

9 Q Do you know whether there was any discussion at that
10 point, when you were first talking to them about pleading
11 guilty about turning over to the government the proceeds
12 of any insurance claim at that point?
13 A Would you rephrase your question?
14 Q Yes, sure.
15 When did the things of turning over the proceeds
16 of the insurance claim, the million dollars you put in
17 for, when did it first come to your attention that it was
18 something you would have to do as part of the plea?
19 A I believe it was July of 1992, I don't have an exact
20 recollection, sir.
21 Q That would be right around the time you pled guilty,
22 sir?
23 A The guilty plea was March, I believe, of 1993.
24 Q I am sorry, it was right around the time your
25 cooperation agreement was entered into?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5485
Watstein-recross/Trabulus


1 A Yes, sir.
2 Q And it was right around the time the deal was struck?

3 A Yes, sir.

4 Q And it was after the complaint was mentioned that the

5 suspicious fire was struck?

6 A Yes, sir.

7 Q And after that you didn't hear anything more about

8 the suspicion?

9 A After I passed the polygraph I heard nothing further
10 about it, sir.
11 Q You were aware that the polygraph is not 100
12 percent -- is not something recognized in court as
13 evidence?
14 A I am not a polygraph expert, sir.
15 Q You are aware that people passed polygraphs when
16 guilty and failed when they were guilty?
17 A I have no direct knowledge, I am sure it is correct.
18 Q Are you aware that people take certain medications
19 and can pass a polygraph no matter what?
20 A No, sir. I believe that's accurate.
21 Q Now, in going through the complaint did you discuss
22 with your attorney the thing about one of the other CI's,
23 9121, I am kind of going in reverse order, going down?
24 A Looking around?
25 Q No, going backwards, 21, we were on 27, before.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5486
Watstein-recross/Trabulus


1 And did you remember discussing with your
2 attorney that this CI 21 had known you for over 21 years,

3 and that he told, or she told, I don't know if it was a

4 man or woman, the postal inspectors, had not received

5 ordered merchandise from this catalogue, the Who's Who

6 gift personal services catalogue, because your company

7 didn't order for the company what was ordered wasn't in

8 stock, and you or your company didn't pay the vendors, the

9 people who would supply the merchandise as ordered; did
10 you recall that?

11 A Yes, sir.
12 Q And that was true, of course, was it not?
13 A Partially correct, yes, sir.
14 Q It doesn't say that that was partially the case in
15 the complaint, right?
16 A It is the allegations of the CI, sir.
17 Q So, you are saying the CI was partially making that
18 up?
19 A Partially not accurate, sir.
20 Q And it is your testimony that -- withdrawn.
21 You understood if you had gone to trial in your
22 case, we would have seen, or you would have seen from that
23 seat, somebody who is now in your seat, getting up there
24 and saying people wouldn't get what they ordered out of
25 this catalogue; they wouldn't get it because he, being

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5487
Watstein-recross/Trabulus


1 Watstein, you, wouldn't pay for it; it wasn't in stock,
2 and you didn't order it for them? Did you understand

3 that?

4 A I don't understand your question, sir.

5 Q Did you understand that when you had gone to trial

6 and you were deciding whether to plead guilty or not, did

7 you understand that when you had gone to trial, you would

8 have likely have seen a witness up there testifying

9 against you, not about some other business that they were
10 running, just as you are doing with Mr. Gordon, but
11 testifying about your business, and saying that in your
12 business when people ordered merchandise they didn't get
13 it because you didn't keep it in stock, you wouldn't pay
14 the vendors who were supposed to supply it; did you
15 understand that? And you didn't even order it for the
16 customers who were supposed to be ordering it? Did you
17 understand that was happening to the customers at your
18 trial?
19 A I --
20 MR. WHITE: Object ion, your Honor.
21 THE COURT: Sustained.
22 Q I think in response to some questions by Mr. Dunn you
23 claimed you were only aware of a couple of instances in
24 which there were multiple invoices for the same customer
25 who had already paid, in other words, double-billing; were

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5488
Watstein-recross/Trabulus


1 you aware of that?
2 A Yes.

3 Q Were you aware in your complaint, there was a CI-20,

4 who when he spoke to you about it, was told by you that

5 you didn't want to hear about it; did you --

6 A Inaccurate statement.

7 Q That CI was mistaken?

8 A That is correct, sir.

9 Q And you didn't tell the CI you didn't want to hear
10 about it?
11 A Correct, I did not say that.
12 Q Did you tell him you wanted to hear about it so you
13 could ferret it out and ma ke sure that everybody was
14 billed just once?
15 A There was no discussion one way or another, sir.
16 Q The CI was making it up?
17 A Probably, sir, or inaccurate.
18 Q And you understand if you had gone to trial you
19 probably would have seen that person testify that Steve
20 Watstein, Steve West, told me I didn't want to hear about
21 it if somebody is double-billing; is that right?
22 MR. WHITE: Objection.
23 THE COURT: Sustained.
24 Q Your wife, Sherri, was nominally the president of the
25 company?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5489
Watstein-recross/Trabulus


1 A Yes, sir.
2 Q She didn't really work there, did she?

3 A No, sir, she did not.

4 Q You were asked how much money you got out of the

5 company over a period of several years?

6 A Yes, sir.

7 Q She was paid a much hi gher salary than you; is that

8 correct?

9 A Yes, sir.
10 Q And for not doing anything; is that right?
11 A That's what I pled guilty to, sir, yes, sir.
12 Q And that was really your money, right?
13 A In a beneficial sense, yes, sir.
14 Q Did you go over with your attorneys in your
15 discussion as to whether or not you should plead guilty,
16 the portions of the complaint which dealt with giving
17 refunds or credits on Amex or Visa or Master Card charges,
18 even after the merchant accounts were closed?
19 A No, we had no such discussions, sir.
20 Q Were you aware in the complaint there were
21 confidential informants who were saying that you
22 authorized credits against merchants -- credit card
23 accounts which were closed?
24 A Yes, sir. There was a balance due as to that.
25 That's correct, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5490
Watstein-recross/Trabulus


1 Q Were you aware that one of the confidential
2 informants said that you had requested that credits be

3 issued in the name of Marquis Who's Who from your

4 company? Do you recall that?

5 A No, sir, I don't believe it said that. It talked

6 about a check being cashed for Marquis, if I recall

7 correctly.

8 Q Bear with me.

9 (Whereupon, at this time there was a pause in the
10 proceedings.)
11 Q While I am looking for it, you understood, did you
12 not, that there were several confidential informants,
13 talking about the time you made a decision to plead
14 guilty, who were prepared to testify that there would be a
15 hundred new customer complaints a day that they were aware
16 of?
17 A I am not sure several, but I am sure it was a
18 statement made by one of the CI's.

19 Q Indeed, it was two who would say a hundred, or 80 to
20 a hundred?
21 A I am not sure if there was one or two.
22 Q If you had gone to trial there would have been
23 evidence of that that could have been presented? Were you
24 aware of that?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5491
Watstein-recross/Trabulus


1 Q Now, you testified on redirect that you used the name
2 Steven Johnson as a -- for magazine subscriptions; is that

3 correct?

4 A Yes, sir.

5 Q That's correct?

6 A Yes, sir.

7 Q And that is when you gave a -- got a renewal notice

8 you would know where it came from?

9 A As well as receiving mailing pieces --
10 Q You would --
11 A May I answer the question, sir?
12 Q Please.
13 A When I received mailing pieces addressed to Steve
14 Johnson I would know it is a direct mail piece, and not
15 correspondence.
16 Q And it would help you keep track of things?
17 A Yes.
18 Q Nothing fraudulent in using that name for that
19 purposes?
20 A In magazine subscriptions, yes, sir.
21 Q In terms of businesses using names not the real names
22 of people, there could be legitimate business purposes for
23 that?
24 A I have seen companies doing that in the telemarketing
25 business, yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5492
Watstein-recross/Trabulus


1 Q You could have a company, for example, sending out
2 bills for mail, and past due bills, and the 30 day bills

3 were signed Cathy Jones, and the 60 day bills Mary Smith,

4 and the 90 day bills, Kathleen Johnson, and when the

5 response came back it said dear Ms. Johnson, or Smith or

6 Jones, the person would kn ow the account was thirty days,

7 60 days or 90 days overdue; you understood that?

8 A Not a normal practice, but it is a practice, sir.

9 Q Nothing fraudulent with that, right, sir?
10 A I can't comment on that.
11 Q Your company in using fictitious names picked names
12 that suggested that the people were very famous, came from
13 famous and prestigious families; is that correct?
14 A Not in every case.
15 Q Harlan Carnegie was one of those?
16 A Yes.
17 Q And Thornton Rockefeller?
18 A Yes, sir, certainly.
19 Q And they were shown, were they not, as being members
20 of the committee that supposedly selected people?
21 A Not on the committee letterhead.
22 Q But they appeared on correspondence. Is that
23 correct?
24 A Yes, sir.
25 Q And I think one of the people on this committee

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COU RT REPORTER

5493
Watstein-recross/Trabulus


1 letterhead was a former Assistant Attorney General; is
2 that correct?

3 A Yes, sir, my friend, yes, sir.

4 Q And did he receive any remuneration for that?

5 A No.

6 Q Did he know that he was -- that his name was

7 appearing on the letterhead?

8 A Absolutely, yes, sir.

9 Q This is somebody who used to work for the Justice
10 Department?
11 A Yes, sir.
12 Q And was he involved in criminal prosecutions?
13 A I don't have first-hand knowledge, but I would assume
14 so.
15 Q And he understood that he was appearing on the
16 letterhead as being involved in a selection process; is
17 that correct?
18 A In an honorific sense, yes.
19 Q He knew he was not involved in any selection process?
20 A I can't comment what he knew.
21 Q Was he involved in a selection process?
22 A No, sir.
23 Q Unless he had delusions he wouldn't associate with
24 any particular selection process with his name being on
25 the letterhead; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5494
Watstein-recross/Trabulus


1 A He saw himself on an honorary committee.
2 Q He never expressed any concern to you, that there was

3 anything fraudulent in his name being used that way?

4 A Not until he was contacted by the post office, no,

5 sir.

6 Q And until somebody from the post office told him

7 there was a problem, until then he on his own never

8 expressed any concern about that; is that right?

9 A No, sir.
10 Q And after that his concern was that his name was now
11 affiliated with your company?
12 A Yes, sir.
13 Q Not that it had been on the letterhead as such?
14 A I think both.

15 Q You indicated you had attended court proceedings in
16 the litigation that Reed had begun against your company;
17 is that right?
18 A To the best of my recollection, yes, sir.
19 Q In connection with those court proceedings there were
20 also depositions taken?
21 A Subsequent, yes, sir.
22 Q Subsequent to the beginning of the court proceeding?
23 A I can't respond with a yes or no. There were two
24 separate proceedings, sir.
25 Q Did you attend the deposition besides your own if

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5495
Watstein-recross/Trabulus


1 there was --
2 A Besides my own, yes, sir.

3 Q Withdrawn.

4 I believe you testified earlier you didn't

5 testify at a deposition?

6 A At a deposition.

7 Q Did you testify at your own deposition in that?

8 A Yes.

9 Q You did?

10 A Yes, sir.
11 Q And was Debra Horowitz an employee of yours?
12 A Yes, sir.
13 Q Did she testify at the deposition?
14 A I don't have a recollection of that, sir.
15 Q In deciding whether or not to plead guilty, did you
16 review that portion of the complaint, in which it
17 summarized portions of her testimony?
18 A No, sir.
19 Q Were you aware or did your lawyer mention to you that
20 that you were the only one who authorized customer credits
21 and your company issued credit slips the name of Who's Who
22 in America, the Marquis publication?
23 A Who's Who of Executives in America, is the corporate
24 name.
25 Q And she testified specific that your company issued

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5496
Watstein-recross/Trabulus


1 credit slips the name of Marquis publication? Were you
2 aware of t hat?

3 A I don't have a recollection of that, sir.

4 Q I will show you the complaint, page 73.

5 (Handed to the witness.)

6 Q Now, does that refresh your recollection that in fact

7 when you were determining as to whether to plead guilty,

8 you were made aware that Ms. Horowitz was -- testified

9 that credit slips were issued by your company and in the
10 name of the Marquis Who's Who company?
11 A It is a typographical error.
12 Q It is --
13 A Or inaccurate.
14 Q Marquis is not typographical error. It is a name?
15 A She made no such testimony.
16 Q So the government's complaint against you was wrong?
17 A In that one minor portion, yes.
18 Q If indeed such a thing was happening, you would have
19 been charging in effect Marquis for the refunds that your
20 company should have been making, if indeed it happened?
21 A I don't quite understa nd your question, sir.
22 Q Withdrawn.
23 You were asked about posing as a deli owner?
24 A Yes, sir.
25 Q Do you know whether there are any deli owners in any

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5497
Watstein-recross/Trabulus


1 of the books?
2 A I have not examined the books, sir.

3 Q When you were posing and doing all this to see who

4 might get in and might not, with Mr. Biegelman, did you

5 mention to him some of the sales pitches you heard or

6 sales presentations you heard had CD-ROMs spoken about?

7 A We had no such discussions about CD-ROMs.

8 Q You certainly heard things about CD-ROMs; is that

9 correct?
10 A Absolutely.
11 Q If you wanted to know if there were deli owners in
12 the book, do you think you would have had Mr. Weinman, the
13 one who became a deli owner, order a CD-ROM?
14 A I had no interest as to whether there were deli
15 owners or not.
16 Q Just as to whether or not you could insinuate a deli
17 owner in the book; is that correct?
18 A No, sir.
19 Q You didn't do that because a deli owner never
20 presented a deli owner -- credit card into the company?
21 A If it was accepted he did not do that.
22 Q In speaking to Biegelman or Leonard or any of the
23 others, did you ever discuss if it might be possible to
24 get a credit card company to assist in the investigation
25 by authorizing a credit card or cards in fictitious names?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5498
Watstein-recross/Trabulus


1 A No, sir.
2 Q Did you know that it was something that is often

3 done?

4 A I had no knowledge of that, sir.

5 Q Did you discuss with them that it might be desirable

6 to create more fictitious members to see what would happen

7 in terms of refunds to see if they actually got in?

8 A I don't understand your question.

9 Q Did you discuss with them or they with you if it
10 might be desirable if it might be better to actually
11 consummate the greater number of members you did other
12 than Mr. Weinman and that other one?
13 A Absolutely no discussions about that.
14 Q Did you ask the government if they had a copy of the
15 CD-ROM?
16 A I provided it.
17 Q You provided a copy of the CD-ROM?
18 A Yes, sir.
19 Q Where did you get it?
20 A Mr. Weinman ordered it to the best of my knowledge.
21 Q He ordered a CD-ROM?
22 A Yes, sir.
23 Q Did you take the CD-ROM and see if any deli owners
24 are in it?
25 A Not my instructions, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5499
W atstein-recross/Trabulus


1 Q Do you know whether the government did that?
2 A I have no idea. I am not privy to the government.

3 Q Rather than simply trying to find out who might, I

4 mean of perhaps deceiving salespeople into thinking they

5 already had undergone a certain amount of acceptance might

6 pass by the sales people to find out instead who might

7 have made it into the directory, did you respond to -- did

8 you try that?

9 A I disagree with your premise, might have, so I can't
10 respond to your question, sir.
11 Q Let's take a look at the CD-ROM and then we might not
12 have too many more questions.
13 MR. TRABULUS: Your Honor, for the record, I am
14 booting the computer with Defendant's Exhibit S, which is
15 the CD-ROM in it.
16 THE COURT: Very well.
17 Q There is a logo there, CD Answer Dataware.
18 A Yes, sir.
19 Q Did you ever see that before?
20 A No, sir.
21 Q Or anything like that?
22 A No, not like it.
23 Q We have a copyright notice, Who's Who Executive
24 Club. Ever see that copyright notice before?
25 A No.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5500
Watstein-recross/Trabulus


1 Q Now you have a screen with space where you can type
2 stuff in. Have you ever seen that before?

3 A Yes, sir.

4 Q You have?

5 A Yes, sir.

6 Q On the CD-ROM?

7 A In a database, sir.

8 Q Something completely different?

9 A Yes, sir.
10 Q Now, next to type of business -- I will do something
11 different here.
12 We have a complex search, and I will do a full
13 text search. And I will type in the word delicatessen
14 here.
15 If you want to do it afterward with the word
16 deli, you can try it.

17 I am pressing the little signal here that has a
18 sigma.
19 What number shows up, one, number one?
20 A Yes. One deli.
21 Q One deli.
22 Siegfried Meyer --
23 THE COURT: You have to slow down and spell the
24 names.
25 MR. TRABULUS: S I E G F R I E D, K period Meyer,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5501
Watstein-recross/Trabulus


1 M E Y E R, chief executive officer of Siegfried's
2 Delicatessen, Inc., Salt Lake City.

3 A Uh-huh.

4 Q That's the one?

5 A Yes, sir.

6 Q And it says he is in the food business?

7 A It seems accurate.

8 Q Major product of service, European import sausages,

9 yes?
10 A Yes, sir.
11 Q And type of organization, manufacturing,
12 distributing, wholesale and retail, right?
13 A That's what it says, sir.
14 Q Marketing area, what does it say?
15 A Western USA.
16 Q Not Salt Lake City, western USA?
17 A That's what it says, sir.
18 Q It doesn't sound like a little one deli?
19 A I can't say, sir.
20 Q This does not sound like a deli whose owner, chief
21 executive officer, should not necessarily be in a Who's
22 Who? You can't tell?
23 A I can't respond with a yes or no.
24 Q If I tell you that's the one deli in the whole book,
25 do you have any reason to believe that any deli owners who

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5502
Watstein-recross/Trabulus


1 shouldn't have been in Who's Who were actually accepted?
2 A I have no knowledge other than the one I was accepted

3 in.

4 Q Were you accepted, sir?

5 A Yes, sir.

6 Q Did you pay?

7 A I was accepted. That's your question, sir.

8 Q Do you know whether in fac t after it gets out of the

9 hands of a salesperson whether or not there was any
10 subsequent review?
11 A I don't have any knowledge of the --
12 Q You know Mr. Weinman, the accountant passed by any
13 subsequent review?
14 A No, sir, I don't know that.
15 Q He became has member; is that right?
16 A They charged his credit card, sir.
17 Q They charged his credit card?
18 A Yes, sir.
19 Q Do you know if your credit card would have been
20 charged if you would have submitted it when you posed as a
21 deli owner?
22 A Highest probability, yes.
23 Q Do you know one way or another as a fact?
24 A No, sir.
25 Q You have no knowledge?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5503
Watstein-recross/Trabulus


1 A Just my own guess, yes, sir.
2 Q In fact, the very method you used of investigating

3 this organization was calculated to give you no knowledge

4 as to whether or not you would actually get in when you

5 posed as these people; is that right?

6 A Absolutely inaccurate, sir.

7 MR. TRABULUS: No further questions.

8 THE WITNESS: Thank you.

9 THE COURT: Anyone else?
10
11 RECROSS-EXAMINATION
12 BY MR. NELSON:
13 Q Good afternoon, Mr. West.
14 A Good afternoon.
15 Q Mr. West, do you recall you were shown the 1993-1994
16 registry of Who's Who Global Edition, which included the
17 name of Larry Flint; is that correct?
18 A Yes, sir.
19 Q Now, when you interviewed Frank Martin, that was on
20 January 20th, 1993; is that correct?
21 A Yes, sir.
22 Q He indicated he had left the company on November --
23 in late November, 1992; is that correct?
24 A I think it was earlier than that, sir.
25 Q It was som etime in 1992; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5504
Watstein-recross/Nelson


1 A Yes, sir.
2 Q And this registry is for people who enter the

3 registry in late 1993 and 1994; is that correct?

4 A I don't believe so, sir.

5 Q Well, it is for people who -- this registry was

6 published after Mr. Martin had left the company; is that

7 correct?

8 A It was published, yes, that's correct.

9 Q And Larry Flint is somebody whom you would
10 acknowledge as being a rather wealthy gentleman; is that
11 it?
12 A I have no first-hand knowledge. I would assume so,
13 sir.
14 Q I didn't see the movie, but my wife told me about the
15 movie, but she told me he was pretty wealthy; is that
16 correct?
17 A I am sure that's what your wife told you.
18 Q Thank you.
19 Would you agree, and I would like to show you the
20 entry with respect to Mr. Flint.
21 Now, can you read that entry for Larry Flint?
22 (Handed to the witness.)
23 A I can't read the small type.
24 Q You were able to hear -- read it when the government
25 shows it to you? Do you have different vision when the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5505
Watstein-recross/Nelson


1 government shows it to you and the defense shows it to
2 you?

3 A My vision is the same.

4 Q Let me read it --

5 THE COURT: Mr. Nelson is picking up speed.

6 MR. NELSON: Withdrawn. And I will read it

7 slowly, the entry.

8 Q Am I correct it says Larry Flint, F L I N T,

9 publisher, L F P, Inc., 9171 Wilshire Boulevard, Beverly
10 Hills, California, business, publishing, P/S magazines,
11 organization, manufacturer, distributor, distribution
12 international, experience, management marketing, F B,
13 Harold Robins, and I guess that's his favorite book. F M,
14 favorite magazine, Forbes. Favorite vacation spot, Cayman
15 Islands;.
16 Is that the entry for Mr. Flint?
17 A I believe you are reading it accurate.
18 Q Am I correct that you had difficulty reading
19 everything on the page but the jury had an opportunity to
20 do so, but by 1993, 1994, Mr. Flint was indeed a
21 businessman engaged in an international businesses
22 publication magazine?
23 A I believe it is accurate, sir.
24 Q And would I be correct in stating that he was the
25 type of individual who would be renowned or maybe have

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5506
Watstein-recross/Nelson


1 notoriety throughout the world as being somebody who was
2 an international businessman and publisher?

3 A I believe notoriety is an appropriate phrase.

4 Q He was known throughout the world; is that correct?

5 A Substantially, sir.

6 Q I believe in 1993 he had been injured by having been

7 shot; is that correct?

8 A Yes, sir, he was shot, yes.

9 Q He subsequently won a lawsuit that went to the United
10 States Supreme Court defending and championing the First
11 Amendment rights and privileges of people in this country;
12 is that correct?
13 A I have no first-hand knowledge of that, sir.
14 Q My wife told me that, I didn't see the movie.
15 Would I be correct in stating, sir, that
16 Mr. Flint was indeed the publisher and owner of the kind
17 of magazine that had international distribution?
18 A Distribution, yes, sir.
19 Q Now, I believe you were asked by Mr. White the
20 question of whether or not Frank Martin apparently knew
21 you were arr ested during the course of your interview on
22 January 20th, 1993, and yet, he still wanted to come to
23 work for your company; do you recall being asked that
24 question on redirect examination?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5507
Watstein-recross/Nelson


1 Q Am I correct that you told Mr. Martin during the
2 course of the interview that you learned your lesson as a

3 result of the fact that you were arrested, and you

4 intended to operate a fully legitimate business at this

5 time?

6 A No, sir, you are not correct.

7 Q Okay.

8 Am I correct that you told Mr. Martin, or at

9 least implied to Mr. Martin, that you wanted to know what
10 was wrong with other businesses, so that you could be
11 completely legitimate?
12 A No, sir, I didn't say that.
13 Q Did you ever say that to anybody e lse during any
14 other interview that you conducted?
15 A I don't have a clear recollection of that, sir.
16 Q Let me refresh your recollection.
17 A Thank you.
18 MR. NELSON: I would like to play a tape
19 recording provided by the U.S. government, on December
20 8th, 1992.
21 Q Do you remember you interviewed people from Who's Who
22 Worldwide for job interviews on December 8th, 1992?
23 A Yes, sir.
24 THE COURT: Is that tape in evidence?
25 MR. NELSON: At this time I would like to offer

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1 in evidence and I will mark for identification, and I
2 guess it will be Defendant's Exhibit A -- I will make it

3 BA at this point.

4 MR. SCHOER: No. Those are already pre-marked.

5 (Mr. Nelson confers with Mr. Trabulus.)

6 MR. JENKS: Try anot her letter. You can't use

7 BA.

8 MR. NELSON: I will try CA at this time.

9 THE COURT: A transcript or just a tape?
10 MR. NELSON: It is just a tape. I do not have a
11 transcript.
12 THE COURT: All right.
13 Do you have the date on that tape?
14 MR. NELSON: Yes, your Honor, December 8th,
15 1992. It is marked by tape number 3, side A, one of two
16 tapes.
17 MR. WHITE: Your Honor, until I know what
18 Mr. Nelson wants to play, and why it is being offered, the
19 government has an objection.
20 THE COURT: I don't have a transcript of the
21 tape.
22 MR. WHITE: Nor do I.
23 THE COURT: I will have to hear it.
24 MR. NELSON: I will move along with other
25 portions, and during the lunch recess we will have a

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1 sidebar and discuss this.
2 MR. WHITE: We might be able to work it out. I

3 don't know what Mr. Nelson is referring to.

4 THE COURT: Very well. Try to conclude the other

5 portions of your recross-examination.

6 Q Do you recall on December 8th, 1992 you interviewed

7 at least three other former employees of Who's Who

8 Worldwide?

9 A I recall interviews in general, but not specifically
10 three, sir.
11 Q All right.
12 Do you recall you interviewed a number of people
13 that day?
14 A Yes, sir.
15 Q Okay.
16 And you recorded the interviews of all of those
17 individuals; is that correct?
18 A That is correct, sir.
19 Q And that was under the supervision of Inspector
20 Leonard at that time?
21 A Yes.
22 Q And after you made those recordings on December the
23 8th, did you provide the tape recordings that were made

24 that day to Inspector Leonard?
25 A Yes, sir.

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1 Q And that was prior to the interviews that were later
2 conducted on January 20th, 1993 of Mr. Martin; is that

3 correct?

4 A Mr. Martin and others, yes, sir.

5 Q Okay.

6 So, you had the opportunity, as did Inspector

7 Leonard, to listen to the recordings of the people made on

8 December 8th; is that correct?

9 A No, sir.
10 Q Did you listen to any of those recordings?
11 A No, sir.
12 Q Do you know if Inspector Leonard listened to any of
13 those recordings?
14 A No first-hand knowledge, sir.
15 Q Did you discuss the contents of those recordings with
16 him during the six week period of time from December 8th
17 to January 20th, 1992, when you were a cooperating witness

18 for the government?
19 A No, sir.
20 Q You never reviewed the exculpatory portions of the
21 transcripts -- withdrawn, the tapes, as it related to
22 former employees of Who's Who Worldwide; is that what you
23 are telling us, sir?
24 A That's correct, sir.
25 Q Now, do you recall being asked by the government

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1 about certain portions of the transcript, which the
2 January 20th, 1993 transcript on redirect examination

3 earlier today?

4 A You are referring to the one with Frank Martin, sir?

5 Q Yes.

6 A Yes, sir.

7 Q And specifically, you recall that Mr. White went

8 through with you the litany of problems, as Mr. Martin

9 related them to be, as they existed with respect to Who's
10 Who Worldwide?
11 A Yes, sir.
12 Q An d I believe one of those problems was the lack of
13 nominations; is that correct?
14 A Among other ones, yes, sir.
15 Q As relating to nominations, you later became aware
16 that Who's Who Worldwide, indeed, by November of 1994, by
17 the time that Frank Martin returned to the company
18 solicited and acquired nominations from existing members
19 of Who's Who?
20 A I became aware of that statement at this trial here,
21 sir.
22 Q Well, isn't it a fact that you became aware of that
23 at a prior period of time?
24 A Not to the best of my recollection, sir.
25 Q I believe previously the government introduced on

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1 redirect examination a number of different letters that
2 you received in the mail; is that correct?

3 A Yes, sir.

4 Q I would like to show you Exhibit 1605, dated December

5 5th, 1994.

6 (Handed to the witness.)

7 Q Did you receive that letter, sir?

8 A Yes, sir.

9 Q Could you read the first paragraph of that letter,
10 sir.
11 A Yes, sir.
12 We recently received submissions from qualified
13 executives to be included in the gold book edition of the
14 Who's Who Registry, many of whom have already been
15 approved for inclusion.
16 Q Now, could you read the PS at the very bottom.
17 A Candidates are nominated by one or more of the
18 established members or by the office of public affairs.
19 Q Now, you received this letter in the mail from Who's
20 Who Worldwide some time, I guess, shortly after December
21 5th, 1994; is that correct?
22 A Yes, sir.
23 Q And so, you became aware prior to your testimony here
24 at trial that by the time that Frank Martin had re turned
25 to the company in November of 1994, Who's Who Worldwide

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1 was -- had in place a procedure, and was actually
2 soliciting people from nominations that came from other

3 established members; is that right, sir?

4 A No, sir. It is not accurate at all.

5 Q You just didn't believe the letter; is that right?

6 A Absolutely. Did not believe the letter at all. You

7 are correct, sir.

8 Q Now, another problem that you claimed existed, was

9 the non-existence of the credit card -- the CD-ROM in
10 1993; is that correct?
11 A No, sir.
12 Q Mr. Martin advised you that there was no interactive
13 software in 1993, but that it was being worked on; is that
14 correct?
15 A That's what he stated, yes, sir.
16 Q And I believe you just testified on examination from
17 Mr. Trabulus, that you actually ordered and acquired the
18 CD-ROM in 1994, I believe it was; is that correct?
19 A Yes, sir.
20 Q Okay.
21 And that problem was resolved, I guess?
22 A I have no first-hand knowledge, sir, as to whether it
23 worked or not.
24 Q Did your relative receive the Tribute Magazine from
25 Who's Who Worldwide?

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1 A Just one copy, sir.
2 Q And in the Tribute Magazine it reflected the fact

3 that Who's Who Worldwide was now providing an MBNA Master

4 Card to members if they elected to acquire one; is that

5 correct?

6 A I saw that a few days ago, yes.

7 Q And so, the other problem Mr. Martin reflected, he

8 believed existed at the time he left the company, had

9 likewise been resolved by th e time he returned to Who's
10 Who Worldwide; is that correct?
11 A The other is the proper te