8983 Summations-Wallenstein 1 A F T E R N O O N S E S S I O N.
2 THE COURT: Please be seated, members of the 3 justify. Please give your attention to the attorney for 4 John Reffsin, Mr. Wallenstein. 5 MR. WALLENSTEIN: Good afternoon. I will try to 6 keep you all awake after lunch. 7 You know, there's a couple of things that the government didn't tell you about this case and Mr. White 9 is wrong about one thing, we do agree on a couple points 10 but he said we didn't agree on any. One of the things he 11 didn't tell you until the very end of his three hours and 12 some-odd minutes of summation he has to prove guilt beyond 13 a reasonable doubt. Those are four very important words. 14 You heard them in the beginning of this trial, 15 you'll hear them from me, I dare say you will hear them 16 from all of my colleagues when they get up and follow me, 17 and you will hear them from Judge Spatt more than once. 18 Every element of every crime charged in this indictment 19 and there are 69 counts in this indictment, every element 20 of every crime charged in this indictment has to be proven 21 to your unanimous satisfaction beyond a reasonable doubt 22 by the government. Not by me, not by Mr. Trabulus, 23 Mr. Jenks, Mr. Schoer, Mr. Nelson, Mr. Lee, Mr. Dunn, 24 Mr. Neville, Mr. Geduldig, not one of us has to prove a 25 single solitary thing. None of us has to do anything in
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8984 Summations-Wallenstein 1 this trial except show up. I do not have to give you this 2 summation, none of them have to speak after me. We can 3 simply sit here and say by pleading not guilty, we've said 4 we didn't do it, it's the government's burden throughout 5 this trial to prove guilt beyond a reasonable doubt. Bear 6 that in mind throughout the summations, the charge and all 7 the way through your deliberations. You cannot, you cannot on your oaths as jurors convict any defendant of 9 any crime unless all of you are convinced beyond a 10 reasonable doubt of guilt and convinced by the 11 government's proof. 12 Now, I say that specifically because my client 13 testified and I called two other witnesses, I
called Jack 14 Hall and I called Vincent Rizino. I didn't have to do 15 that, I didn't have to put any case at all and Marty 16 Reffsin certainly didn't have to say anything to any of 17 you, but the fact that we chose to do so does not in any 18 way shift the burden from the government. I don't have to 19 prove that Marty Reffsin is innocent, he is presumed to be 20 innocent. He does not have to convince you by any 21 standard of proof that he did not commit the crimes he's 22 charged with, despite the fact that he testified, he 23 doesn't have to convince you of a thing. The government 24 has to convince you that he's guilty beyond a reasonable 25 doubt of every element of every crime that he is charged
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8985 Summations-Wallenstein 1 with. 2 He's charged with obstruction of justice, one 3 count, because there are two counts in the indictment. 4 He's charged with acting along with Bruce Gordon with 5 aiding and abetting Bruce Gordon and the two of them are 6 charged, I give up with the numbers in the indictment, but 7 charged with one count for obstructing justify for putting those phony logs in front of the bankruptcy court. I'll 9 deal with all of those things later. 10 There's a second count of obstruction that 11 Mr. Reffsin is not involved in. But he's charged with tax 12 evasion. He's charged with assisting in the filing of 13 false tax returns, three or four counts, if that, and he's 14 charged with conspiracy, conspiracy to impede the Internal 15 Revenue Service in the collection of Bruce Gordon's taxes. 16 What is this case really about? This case, the 17 tax case and the mail fraud case for that matter are about 18 greed. The case is about vanity, it's a
bout narcism, it's 19 about Bruce Gordon living the high life at the expense of
20 everyone around him. As a result of Bruce Gordon's vanity 21 and greed, these people are on trial here, Reffsin, all of 22 the salespeople are on trial here because Bruce Gordon 23 lied to everybody from day one. 24 I agree with Mr. White about that. I obviously 25 don't agree with Mr. White about Mr. Reffsin's role in all
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8986 Summations-Wallenstein 1 of this and I'll tell you why. But the fact is that Marty 2 Reffsin relied on his client to provide him with accurate 3 and complete information and to tell him the truth. Why 4 would a man lie to his accountant? The accountant is the 5 guy that can help him. The accountant is the guy that 6 will minimize legally his tax liability, the accountant 7 will be the guy that doeshis books. Why would you lie to your accountant? Having heard all the evidence in this 9 case you heard why now, but he didn't know then. 10 In 1998 every one ever us in this room has 20-20 11 hindsight. In 1992 and 1993 and 1994, nobody knew --
12 well, not nobody, but Marty Reffsin didn't know.
13 Let's talk about some of the specific charges and 14 why the government has not proven guilt beyond a 15 reasonable doubt of all the elements of all the crimes 16 charged, and on that note Judge Spatt will instruct you 17 further on Thursday, if a crime has three or four or five 18 elements and the government convinces you of four out of 19 those five elements, that's not enough. You have to be 20 convinced of every element of the crime or you must acquit 21 the defendant, that's the law, that's what the Judge will 22 tell you and that's what you must follow. 23 The government says that Reffsin and Gordon 24 conspired to defraud the IRS. The government says that 25 because Marty Reffsin was Bruce Gordon's accountant for
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8987 Summations-Wallenstein 1 years and years, that therefore he knew and therefore he's 2 just as involved as Bruce Gordon. And that I think 3 ignores the fact that Gordon didn't care what Reffsin 4 thought and didn't ask Reffsin's advice in advance.
5 Gordon did what Gordon wanted to do when Gordon wanted to
6 do it and how Gordon wanted to do it. And anybody who
7 worked for Gordon or who was an outside professional employed by Gordon, wound up in the same boat, they did 9 what Gordon wanted them to do or they didn't work for 10 Gordon and they did it the way Gordon wanted it because 11 Gordon tailored the facts. Gordon told them what they 12 want to hear. 13 How do we know that? We heard it from the 14 witnesses here, we heard it from Marty Reffsin's own mouth 15 that Gordon told him of the things after the fact. Never 16 came to him in advance and said, Marty, what shall I do 17 now? He came to him and said, yeah, Marty, I did it, 18 clean up my mess. We know that's true because Debbie 19 Benjamin told us that that's what happened with Phil Peers 20 and Mr. White touched on that in morning. 21 Debbie Benjamin you will remember sent some 22 documents to Phil Peers, the attorney and lawyers don't 23 remember my business, I run my business, that's how he was 24 with Reffsin, that's how he was with every one of these 25 people. He ran it, he did what he wanted to do, he told
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8988 Summations-Wallenstein 1 you what you thought you ought to know.
2 There is no evidence in this case that Marty 3 Reffsin had anything whatsoever to do with Bruce Gordon's 4 life-style. There is no evidence that Marty Reffsin knew 5 where Bruce Gordon was living let alone how he was 6 living. There is no evidence in this case that Marty 7 Reffsin ever was in Bruce Gordon's home, and the evidence is to the contrary and the only evidence is from 9 Mr. Reffsin, of course. 10 Mr. White says that this whole case is about the 11 scheme to keep the IRS from getting the money that Bruce 12 Gordon owed them and to a certain extent he's right. But 13 the fact is that Bruce Gordon's tax liability to the IRS, 14 that 3 and-a-half million we talked about was just that, 15 Bruce Gordon's tax liability. It wasn't Marty Reffsin's 16 tax liability, it wasnt anyone else's liability except 17 Bruce Gordon's. He's the only one who had the problem
18 with the Internal Revenue Service and Mr. White is right. 19 Mr. Gordon had 3 and-a-half million reasons not to pay the 20 IRS. But there's not one reason in this case, there's not 21 one single shred of evidence that points to a motive for 22 Marty Reffsin to put his license, 20 years of practice and 23 his family and freedom on the line for Bruce Gordon. That 24 just doesn't make any sense. 25 For a couple of thousand in accounting fees, he's
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8989 Summations-Wallenstein 1 owed money, you heard that. Will he risk his entire 2 career and freedom so that Bruce Gordon can get out from 3 under a three and-a-half million liability? I don't think 4 so and I don't think you think so either. 5 When Mr. White spoke this morning for about the 6 first hour and-a-half of his summation he spoke about the 7 tax
case, but when you analyze what he said Mr. Reffsin is an add-on. Mr. Reffsin is the afterthought because 9 everything that Mr. White said points to Bruce Gordon, 10 whether or not Gordon intended to defraud the IRS makes no 11 difference, whether there was a crime or wasn't a crime 12 Reffsin wasn't involved in it except to the extent he 13 prepared some returns, some documents. His people 14 balanced some books, did bank reconciliations. 15 Let's talk about the conspiracy now. The count 16 in the indictment charges that Gordon and Reffsin 17 conspired to impede the Internal Revenue Service, and the 18 Judge will read the entire count to you tomorrow and 19 explain all the terms to you, but basically it came down 20 to they got together, they made an agreement and in that 21 agreement they decided that they were going to beat the 22 IRS out of the money that Gordon owed to
the IRS, and 23 there's no dispute but that Gordon owed the money to the 24 IRS, that's clear. 25 In order for there to be a conspiracy, though,
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8990 Summations-Wallenstein 1 there has to be an agreement. There has to be a conscious 2 sharing of an intent to defeat the IRS. Reffsin must, 3 even if Gordon does intend to beat the IRS and I'll leave 4 Mr. Gordon's defense to Mr. Trabulus, but even if Gordon 5 intends to beat the IRS, if he doesn't have an agreement 6 with Reffsin, if Reffsin doesn't share that intent, then 7 there's no conspiracy and you can't find either of them guilty. 9 The government has to prove beyond a reasonable 10 doubt that Mr. Reffsin knowingly and willingly became a 11 member of a conspiracy to defraud the Internal Revenue 12 Service. 13 Now, everybody hates
the IRS with the possible 14 exception of Mr. Jordan who works for them and that's not 15 a reflection on him. Nobody likes the IRS, those are the 16 last words you want to hear when that knock comes to the 17 door, hi, I'm from the IRS -- oh, no, I'm not home. 18 Because the IRS only wants one thing from you, they want 19 from you, just like they wanted from Mr. Gordon, just like 20 they want from Mr. Reffsin, just like they want from 21 everybody else, they want your money, the money that you 22 worked so hard to earn, they want it. And what do you get 23 in return? In return they get to send foreign aid to 24 Bosnia, things like that. None of us want to pay taxes, 25 all of us realize we have to and most of us are willing to
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8991 Summations-Wallenstein 1 pay our fair share but the IRS wants your last dollar.
2 Now, how do we know that? 3 In this case we've talked about offers and 4 compromise and talked about collection statements and 5 we've heard testimony from collection people and from 6 examination people, revenue officers, revenue agents, all 7 of these people have one function in life, their life is to part you from your money, that is what they do, not by 9 selling you something but by coming and saying if you 10 don't give it to me, I'm going to take it anyway. That's 11 how the IRS works. 12 Part of this alleged conspiracy is that the 13 government claims that in order to hide Bruce Gordon's 14 true assets and true income that he and Mr. Reffsin15 concocted this scheme whereby they would submit this false 16 collection statement and submit a false offer and 17 compromise. That's the allegation, that's what the 18 government says. The government has to
prove that to you 19 beyond a reasonable doubt. 20 I'm going to keep saying that so get used to it, 21 I hope you will not tune it out. The reason I say that is 22 because when you think about it, when you think about what 23 I'm saying, when you think about what Mr. Trabulus will 24 say about it later and when you think about the evidence 25 that the government has adduced, that we have adduced, all
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8992 Summations-Wallenstein 1 of the evidence in the case and you apply the law that 2 Judge Spatt gives you to that evidence, if you come away 3 saying, you know, I'm not sure, maybe, then you have a 4 reasonable doubt. If you have a reasonable doubt you must 5 acquit the defendant. You must. You have no options. 6 Now, the government spent a lot of money to try 7 this case and we've all been here together, what is this, 12 weeks? I lost count. Hundreds and hundreds of 9 exhibits. I lost count of witnesses after Mr. Gagliardi 10 and he was the second one and that was back in January, 11 you remember, in the winter we never had, and they brought 12 all of these people in here, lots of witnesses, hundreds 13 of exhibits, all of these great blowup charts. The little 14 one I put in is just so puny compared to them, but they 15 have all the money, we have no resources, the government 16 has everything. And because they've done that there's 17 going to be a certain feeling on your part, I fear, I hope 18 it's not there, but I think there might logically be a 19 certain feeling on your part that you will say, well, they 20 might have done something. Well, they might have, but 21 that's not enough. They might have done it is not proof 22 beyond a reasonable doubt and you can't come
in here and 23 say the government spent that money, they must know things 24 we don't know so, therefore, we'll find these people 25 people guilty because they wouldn't have brought the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8993 Summations-Wallenstein 1 charge. That's not the way it works. 2 The way it works is the government presents their 3 evidence and make their arguments and they try to convince 4 you beyond a reasonable doubt that the defendants are 5 guilty. It's up to you as jurors to sift through that 6 proof, to weigh the evidence, to carefully examine the 7 evidence and to consider what's not here, to consider the lack of evidence, the witnesses who did not testify, the 9 exhibits that were not presented because something that 10 you would have needed to dispel that reasonable doubt 11 that's not here, leaves that reasonable doubt and 12 therefore they will not have met their burden. But it is 13 their burden and it is your burden and your responsibility 14 as jurors to render a just and fair verdict based on what 15 you've heard and what you haven't heard. 16 The government has to prove in order to prove 17 this conspiracy charge that there was an agreement that 18 Marty Reffsin intended to defraud the IRS because they 19 claim that Bruce Gordon intended to defraud the IRS, but 20 if he alone intended to defraud the IRS that is not a 21 conspiracy. Reffsin would have to share his intent, would 22 have to share, would have to agree with him that this is 23 what they want to do. Now, that doesn't mean that 24 Mr. White has to bring somebody in here and say I heard 25 them conferring and I heard them say they agree, but there
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8994 Summations-Wallenstein 1 must be sufficient evidence to convince you beyond a 2 reasonable doubt that Marty Reffsin agreed with Bruce 3 Gordon that they were going to engage in this massive 4 scheme, the government's theory, that over a five-year 5 period they were going to do this in order to defraud the 6 Internal Revenue Service, that that was their purpose. If 7 they can't convince you of that beyond a reasonable doubt then you must find Mr. Reffsin not guilty of the 9 conspiracy. 10 The fact that Mr. Reffsin was Mr. Gordon's 11 accountant and had a long time accountant-client 12 relationship with him is not enough for you to be 13 convinced beyond a reasonable doubt that there was a 14 conspiracy to defraud the IRS. The fact that Mr. Reffsin15 and Mr. Gordon frequently had contact, frequently did 16 business together, the fact that Mr. Reffsin handled the
17 books of Who's Who Worldwide or handled Mr. Gordon's 18 personal tax affairs is not enough -- is not enough -- and 19 the Judge will so instruct you. That is not sufficient 20 proof to establish guilt of a conspiracy beyond a 21 reasonable doubt. 22 Conspiracy is a real sinister word, isn't it? It 23 doesn't have the same ring as "agreement." It doesn't 24 have the same ring as "joining together." It's a nasty 25 little word. It's a nasty little statute because it makes
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8995 Summations-Wallenstein 1 people guilty of things that they are not guilty of simply 2 because they know and associate with other people. But 3 you'll not let that happen because you'll not convict 4 Marty Reffsin of conspiracy unless Mr. White convinces you 5 beyond a reasonable doubt that he shared Mr. Gordon's 6 intent that he conspired with Mr. Gordon to do this. 7 Now, where -- the government doesn't have to prove any motive, but wouldn't you like to hear about 9 Mr. Reffsin's motive for this when you assess whether or 10 not he intended to defraud the IRS? What does he get out 11 of it? We know what Gordon gets out of it. Gordon gets 12 out of it a 3 and-a-half million tax liability. But what 13 does Reffsin get out of it? A couple of hundred 14 thousands. He has a family, he has a license, a practice 15 and he doesn't have them anymore if he gets involved in a 16 conspiracy with Bruce Gordon, but he has no motive to beat 17 the IRS. 18 Now, does he have an obligation as Gordon's 19 accountant to help him legally minimize his liability to 20 the Internal Revenue Service? Sure. Does he have a right 21 to do that? Absolutely. Does he have a right to say to 22 the IRS this is how you view these documents, this is how 23 you view these dollars, this is not income, these are 24 loans, he doesn't have to put that forward? Sure, he 25 does. That's his obligation and we know that. We know
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8996 Summations-Wallenstein 1 that from a number of things in this case. 2 One thing we do know, and you'll know again on 3 Thursday when Judge Spatt gives you the law, is there is 4 no requirement for either Mr. Reffsin as the accountant or 5 for that matter Mr. Gordon as the taxpayer to make it easy 6 for the IRS. Lord knows they can take as much as they 7 want anyway, but you don't have to go with them with that silver platter and say, here's everything I have, now 9 leave me alone because I have nothing left. You don't 10 have to do that. You don't have to make it easy for 11 them. That doesn't mean that you can commit a crime but 12 it does mean that you don't have to tell them anything 13 you're not required to tell them and it does mean that if 14 there are two interpretations of how a dollar amount 15 should be treated, whether it should be income or a loan 16 and there is a reasonable way for you to say it is a loan, 17 you can do it. You don't have to go along with what they 18 say it is. They have their interpretation, you have your 19 interpretation, you don't have to buy what they're 20 selling. 21 The government cannot convict Marty Reffsin with 22 conspiracy with Bruce Gordon to defraud the IRS unless 23 they can prove beyond a reasonable doubt, shared the 24 intent and acted together by deceitful and dishonest means 25 to hide their income from the IRS. If Marty Reffsin did
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8997 Summations-Wallenstein 1 what was in good faith, if what he did was done on a 2 reasonable reliance on his understanding of the law, if 3 what he did was done without a dishonest intent, then he 4 is not guilty. 5 Now, let's talk about some of these documents 6 that the government puts forward to show that there's a 7 conspiracy, to show that they attempted to evade taxes, to show that these returns are false. The big thing about 9 the false returns is that the government says that what 10 Gordon called a loan was really income. The government 11 says it's income because they didn't intend to pay it 12 back, that it's income because he took it and used it to 13 live on. Well, it's income if it's not a loan, I concede 14 that, but have they proven to you beyond a reasonable 15 doubt that these, all of these fancy charts that show 16 hundreds of thousands of dollars worth
of experiences paid 17 by Who's Who Worldwide on behalf of Mr. Gordon, those are 18 the numbers that Revenue Agent Rosenblatt says was 19 income. That's the basis of the false return charge. 20 That's the basis of the charge against Mr. Gordon that he 21 filed the false returns and the basis of the charge 22 against Mr. Reffsin that he assisted in the filing of the 23 false returns. But there's two ways to look at it. 24 Now, Mr. Reffsin, of course, testified that those 25 amounts were loans. I grant you that Mr. Reffsin is a
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8998 Summations-Wallenstein 1 defendant and I grant you that Mr. Reffsin has an interest 2 in the outcome of this proceeding more than any one of us, 3 I dare say. But just because Mr. Reffsin has an interest 4 in the outcome of the proceeding doesn't mean that he's 5 going to violate the oath that he took as a witness. He 6 took the same oath as every government witness took and he 7 swore to tell you the truth. I submit to you that he did and I submit to you when you analyze his testimony and you 9 evaluate his demeanor using the tests that you use every 10 day in deciding whether somebody is telling you the truth, 11 you are using it now when you listening to me, I hope, you 12 used it this morning when you listened to Mr. White and 13 you used it every day of the last two and-a-half months, 14 listening to those witnesses and deciding which ones of 15 them were telling the truth, as I suggest that they 16 weren't all, but when you examine Mr. Reffsin's testimony 17 I think you will find that he's an honest man. 18 He came here and he told you the truth. Told you 19 his interpretation and his interpretation differs from 20 Mr. Rosenblatt and Mr. Rosenblatt is an honest man too, 21 but Mr. Reffsin's honestly-held belief, Mr. Reffsin's 22 honestly put forward position that these dollar amounts, 23 these expenses that were paid by the corporation for Bruce 24 Gordon that they were loans, you believe, and I suggest 25 you should, that his position, Reffsin's position with
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8999 Summations-Wallenstein 1 respect to that is an honestly-held belief, then he has 2 acted in good faith and good faith is an absolute defense 3 in this case. The Judge will tell you that, he will give 4 you the elements and he will tell you how to evaluate that 5 and he will tell you one more thing. 6 He will tell you that we do not have to prove 7 that Mr. Reffsin acted in good faith. He will tell you that Mr. White, that the government must disprove that, 9 the government must prove lack of bad faith, lack of good 10 faith, excuse me, beyond a reasonable doubt. The 11 government has to establish that Reffsin acted evilly. 12 The government has to establish that he acted not out of 13 good faith and they have to prove that to you beyond a 14 reasonable doubt. If they cannot do that then you must 15 acquit him. 16 Mr. Rosenblatt, I suggest, backs up our 17 position. Mr. Reffsin says they were loans. Why were 18 they loans? They were loans because the corporation paid 19 the expenses, Mr. Gordon intended to pay it back and in 20 fact there were repayments. There's that $235,000 21 repayment in January of 1993 from Grossman. That's a 22 repayment. That substantially reduced the then 23 outstanding loan balance, although it did increase later, 24 but that's a repayment and that's one of the factors. 25 You know, looking at it in 1998 and saying, well,
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9000 Summations-Wallenstein 1 he left us with a half a million worth of debt there, he 2 left us a half a million that he owes these companies, 3 that's not the situation as it existed back in 1991 or 4 1992 or 1993. 5 Let me show you my puny little chart. My puny 6 little chart which I know you can't see, but that's the 7 best I can do for now. You all have copies of this someplace because I know we handed them out. But this 9 puny little chart shows that the loan balance at the end 10 of 1989 was all of 1,000 bucks, that it increased in 1990, 11 but not by that much, and in 1991 there's a big jump and 12 in 1992 there's another big jump, but then in 1993 there's 13 a tremendous payment, $235,000 is a lot of money. Then in 14 1994 there's another reduction, net for the year, it 15 leaves a big balance, but you have to remember that 16 there's a factor here. What comes into play now in 1994 17 when there's this big balance after these two big credits 18 is that Who's Who goals brought because of the Reed 19 litigation and when Who's Who goes bankrupt, everything 20 gets put on hold because the bankruptcy interferes with 21 the business of Who's Who Worldwide and then Reed's 22 attempt to insert a trustee into the picture makes it 23 worse. 24 I'm not going to go into detail about that 25 because I know Mr. Trabulus will cover all of that stuff
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9001 Summations-Wallenstein 1 tomorrow, but what happens is once Who's Who goes bankrupt 2 they are scrambling, everything is under the control of 3 the bankruptcy court as far as Who's Who is concerned and 4 the loans that are on the books can
now not be converted. 5 You will recall that Mr. Reffsin testified that it was his 6 intention, that he told Mr. Gordon in 1992 and 1993, 7 Bruce, you have to clean this up, you have to make some payments back. We know they are loans, well, they are 9 loans. There is nothing wrong with taking the money out 10 of a corporation by borrowing it from the corporation as 11 long as you will pay it back at some point and you can pay 12 it back by physically putting money back into the 13 corporation or you can pay it back by calling it salary 14 and paying taxes on it at that point in time, making the 15 bookkeeping entry and in fact that was done at one point 16 in time. 17 At the end of the year there was $51,000. This 18 was at the end of 1993. At the end of 1993 there was a 19 $52,000 conversion of the outstanding loan balance to 20 income to Bruce Gordon, paid taxes
on that money, Maria 21 Gaspar testified about that. There were no dollars that 22 changed hand at that point in time. That was simply a 23 recognition of income. Mr. Reffsin testified about that 24 as well and so did Agent Rosenblatt. 25 Agent Rosenblatt said that taking loans from the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9002 Summations-Wallenstein 1 corporation is very common, happens all the time. 2 "Question: Is it a common practice for a closely 3 held corporation to lend money to its officers or 4 shareholders? 5 "Answer: Yes, it's a common practice. 6 "Question: In fact, it's a way for officers or 7 shareholders to take compensation over and above W-2 compensation; is that correct? 9 "Answer: It's a way for them to get money. 10 "Question: So they take that loan and ultimately 11 either pay it back or call it what it really is --" 12 THE COURT: You have to slow down considerably if 13 you want the jury to understand what you are saying. 14 MR. WALLENSTEIN: Sorry. 15 "Question: So they take a loan and either pay it 16 back or call it what it really is which is salary and pay 17 taxes, correct? 18 "Answer: Yes. 19 "Question: And that's not uncommon, is it? 20 "Answer: No. 21 "Question: It's not improper either, is it? 22 "Answer: No." 23 So Rosenblatt says it is okay to do it that way. 24 Now, Mr. Rosenblatt says, among other things, 25 that his computation of this additional taxable income is
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9003 Summations-Wallenstein 1 based on his belief that the items are income and he 2 agrees that other people might call it a loan and he said 3 so. 4 "Question: Would it be a fair statement that 5 there might be another revenue agent that would disagree 6 with you? 7 "Answer: Yes, that's possible. "Question: Would it be a fair statement that 9 attorneys, accountants, tax preparers might disagree with 10 you? 11 "Answer: Yes, that's possible." 12 That's what he said. And he said if in fact 13 those items were determined to be loans they would not be 14 income to Bruce Gordon. He said, yes, that's correct. 15 I submit to you that Mr. Rosenblatt is an honest 16 man. He has an honestly-held belief that the money that 17 Bruce Gordon borrowed from Who's Who Worldwide is income 18 to Bruce Gordon. He's entitled to that belief. 19 Martin Reffsin is also an honest man and he has 20 an honestly-held belief that those funds borrowed by Bruce 21 Gordon from Who's Who Worldwide are a loan, applying some 22 of the same factors that Mr. Rosenblatt used. For 23 instance, repayments. 24 Well, we see the repayments. Well, you could if 25 you could see the chart, but you know there are
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9004 Summations-Wallenstein 1 repayments, we've talked about them. One of the factors 2 that Rosenblatt talked about as being a key was the 3 passage of time so that in 1993 and 1994 you could not say 4 this is income because there's an insufficient passage of 5 time for you to say that he did not intend to pay it 6 back. Granted, it's a lot of money but he needs time to 7 pay back a lot of money, whether in small increments, large increments or by recognition of income at the end of 9 a taxable year. Time is what is required and time is what 10 the government is not giving credit for because at the 11 time that the offers and compromise were submitted, at the
12 time that the collections were submitted, at the time that 13 the tax returns were filed, Marty Reffsin didn't have the 14 benefit of hindsight. He didn't have the benefit of 15 analyzing these books in 1996 or 1997. He's preparing 16 those returns in 1992, 1993, 1994. He's not looking at 17 them from 1997 and saying five years have past, where is 18 the money? He's looking at it in 1993-1994 saying six 19 months have past, he will pay it back. 20 He had a conversation with Bruce Gordon, he said, 21 Bruce, you have to clean this up. If by '94 you haven't 22 made some substantial payments here we'll start 23 recognizing this income so we can get this money paid 24 back. Does that sound like a co-conspirator? Does that 25 sound like a guy who is out to stick the IRS? That sounds
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9005 Summations-Wallenstein
1 like an accountant who is saying to his recalcitrant 2 narcissistic client when he wants to do and does whenever 3 he wants to do it and takes what advice he wants to take, 4 that's a guy saying to Bruce Gordon, this is what you will 5 have to do, if you don't it is at your peril, but it 6 shouldn't be at Marty's peril (indicating.) 7 One of the things that the government says is a bad act here, an act in furtherance of this conspiracy is 9 the submission of the offer and compromise. Now, the 10 offer and compromise is a concept that is foreign to most 11 of us. It's apparently foreign to Mr. Rosenblatt to some 12 extent as well because he says he didn't handle it. He 13 has always been in what the new consumer friendly IRS 14 calls the "examination division" but which we all 15 recognize as being the "audit division" which are the guys 16 that come in and tear your books apart looking for every 17 last penny. 18 Mr. Gagliardi, on the other hand, he's the guy 19 that handled the offer and compromise. And interestingly 20 enough Ms. Peters, do you remember her, January 14th, the 21 first witness who testified in this case, she was the 22 revenue officer who said that she handled the initial 23 collection information statement, the initial attempt to 24 collect the money, she is the one who made the $100 a 25 month agreement with Bruce Gordon and let me point out on
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9006 Summations-Wallenstein 1 that score that Mr. Reffsin had nothing whatever to do 2 with that entire arrangement. He also had nothing 3 whatever to do with the collateral agreement with the 4 Justice Department. That was handled by some white shoe 5 law firm. They are the guys who made that deal with
the 6 justice department. Can't leave it on Mr. Reffsin. He's 7 coming in after the fact saying this is the situation as I find it, how can I present this in the best light for my 9 client? 10 By the way, Mr. Rosenblatt said that that is 11 perfectly appropriate and Mr. Rosenblatt, you will recall, 12 was qualified as an expert on federal tax matters, even he 13 said he never handled an offer and compromise, he knows 14 what they are, and he understands the role of an 15 accountant in dealing with the Internal Revenue Service. 16 And Mr. Rosenblatt said: 17 "Question: The accountant acts on behalf of the 18 taxpayer; is that right? 19 "Answer: That's correct, he represents the 20 taxpayer. 21 "Question: And what he's conveying to the IRS is 22 the taxpayer's position; is that correct? 23 "Answer: That's correct. 24 "Question: Basically it's the accountant who is 25 on his knees in your office saying please don't make him
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9007 Summations-Wallenstein 1 pay at all; is that right? 2 "Answer: It could be that. 3 "Question: And in that circumstance, the 4 accountant, whoever is putting forth the taxpayer's 5 position, is an advocate, correct? 6 "Answer: Yes, that's correct. 7 "Question: And he's going to portray the taxpayer's position in the best possible light for the 9 taxpayer so as to persuade the kindly IRS agent that he 10 really can't afford to pay the whole obligation, correct? 11 "Answer: Yes. 12 "Question: And in fact, that's his function, 13 isn't that so? 14 "Answer: Yes. He's supposed to be honest and 15 present the best possible case." 16 That's what Rosenblatt said. So it's clear that 17 wh
at Reffsin did was exactly what he was supposed to have 18 done. 19 Now, let us talk for a minute about this offer 20 and compromise. What does it mean? It's an offer to the 21 Internal Revenue Service, that's what it is, it's an 22 offer, it's a negotiation, it's the first shot. It's I 23 owe you 3 and-a-half million but I'm 60 years old and in 24 order to pay 3 and-a-half million to the IRS I have to 25 earn $7,000,000, because I have to earn tax in addition to
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9008 Summations-Wallenstein 1 paying 3 and-a-half million dollars, and I still have to 2 live, and that doesn't mean wearing Armani suits and that 3 means eating cat food, and that's what the IRS wants you 4 to do, eat cat food, that's their position, we want every 5 last dollar. That's why the 433 A's, the collection 6 information statements are not fraudulent. Because what 7 is on there or not on there is not material to the issues. Let me tell you why. 9 In evidence you have Defendant's Exhibit EC, 10 those are the instructions for the offer and compromise 11 which we blew up and I think we all have copies. When you 12 look at them and read them it has some very, very 13 interesting language. It says here, "our goal is to 14 collect what we can at the earliest possible time with the 15 least cost to the government." It says "how to figure an 16 acceptable offer." They tell you how to figure it out. 17 Do you know what it says? It says, number one "we want 18 the liquidating value of your assets, the value if you are 19 forced to sell." What does that mean? It means give us 20 your house, it's going on the auction block. Your 21 $200,000 house is going to the highest bidder which will 22 be 50 grand, we'll take it, we'll apply it to your tax 23 liability and you still owe us the rest, unless we have a 24 compromise. That's what a forced sale is. It means the 25 IRS comes in, they slap a document on your front door that
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9009 Summations-Wallenstein 1 says "seized" this is now the property of the Internal 2 Revenue Service. Take your kids, your dog and get out. 3 That's what it means. Now they sell the house. And that 4 value, this is how to figure an offer. They take that 5 value, what they could get if they threw you out of your 6 house tomorrow and they subtract from that debts against 7 specific assets that have priority over the IRS. Would you like to guess how many debts have priority over the 9 IRS? Well, your mortgage is one. Maybe, maybe your car 10 loan, unless there is enough equity to pay off the loan
11 and still leave a couple bucks for the IRS. A judgment 12 against the specific asset, a debt secured by a specific 13 asset, we don't want to do a lecture on commercial law 14 here but there aren't that many. All of those debts to 15 American Express, everything you owe on charge cards, 16 everything you owe your ex-wife, everything you owe your 17 brother-in-law, everything you owe your company, all of 18 that comes after the IRS. They want your first dollar and 19 your last one and every one in between. That's how we'll 20 figure. What do I have here? I have $100,000 worth of 21 property and if you force me to sell it it will be worth 22 50 grand, so I'll take that number and I'll subtract from 23 that my mortgage which is $48,000, and I have $2,000 24 left. That's what I'll offer the IRS. 25 It says here specifically, "the following
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9010 Summations-Wallenstein 1 examples are debts which you should not subtract because 2 the IRS has priority over them." What does that mean? In 3 English, which this form is supposed to be written in, 4 that means "we don't care. We're not interested in how 5 much you owe everybody else. We don't care what you owe 6 American Express, we don't care what you owe your 7 brother-in-law, we don't care what you owe to Who's Who Worldwide. We care what you have, not what you don't 9 have. Not what you owe. What can we get." That's the 10 IRS, the friendly IRS. 11 Now, what shouldn't you subtract. "Amounts you 12 owe on credit cards." It's right there in plain English. 13 "Amounts you owe on credit cards." Don't bother tell 14 telling us about those. We do not care. 15 "Loans you secured" means you got them, "without 16 pledging assets as security." For instance, any money you 17 might have borrowed from a corporation, any money you 18 might have borrowed from your brother-in-law. Don't 19 bother telling us about that stuff, we don't care. Any 20 amount you borrowed after we recorded a notice of federal 21 tax lien. Well, there's no tax liens in this case, 22 there's an ancient one but it is not important. A tax 23 lien is where the IRS comes in and grabs what you have, 24 your bank accounts and your house and all of these things 25 and they put a lien on it. The lien says before you can
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9011 Summations-Wallenstein 1 touch this, before your creditors can touch this, guess 2 who gets it? So if we put a federal tax lien against your 3 property or against your line of credit, anything you 4 borrow after that, we couldn't care less because we come 5 first, we're the IRS. They don't care. It's right here 6 in black and white. They don't care. They want to know 7 what you have. You know how we know that? Robbie Peters said 9 that, Robbie Peters, that's the first witness back in 10 January, that's how you got off on this tangent, I asked 11 they are this specifically, I said, how far back are you 12 looking? And her answer was "I look for current 13 information. I'm in collection, I look for assets." We 14 don't care about debts, we don't care about liabilities, 15 we don't think what anybody else thinks you have to give 16 to them, we're the IRS, we come first. That's what this 17 is all about. That's why when you look at those 433s that 18 Mr. White blew up so beautifully, in fact, Agent Jordan, 19 would you be so kind. May I have one? 20 AGENT JORDAN: Sure. 21 MR. WALLENSTEIN: I don't know
the exhibit 22 numbers, this is Exhibit 404. Of course he gave me the 23 one that Mr. Reffsin had nothing to do with, but that's 24 okay because the principal is the same. 25 When you start looking at liabilities, when you
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9012 Summations-Wallenstein 1 are the accountant and you are looking at liabilities, 2 bank cards, all of that stuff and you're filling out the 3 collection information statement to go along with the 4 offer and compromise, you know, you know because you're an 5 accountant, a CPA for 20 years and you know what the IRS 6 is looking for and the IRS knows what they are looking for 7 to. They are looking to see what you have. They don't care that you owe American Express, did I say that enough 9 times? 10 It doesn't matter what is here, it's not 11 material, and the reason it's
not material is because the 12 IRS doesn't care. It doesn't have priority. The IRS 13 comes first. So it's not material. You could owe a 14 billion. If you owe them one buck and the billion is 15 unsecured, they get the first dollar. It's more likely to 16 be the other way around though. 17 Now, Mr. White says that the necessary living 18 expenses part here (indicating) is part of his conspiracy 19 and, in fact, Mr. Gordon is charged separately with filing 20 false collection information statements. Mr. Reffsin is 21 not charged with that, but they are charged as part of the 22 conspiracy. Of course the fact that Mr. Gordon is charged 23 with it separately means you will have to listen to 24 Mr. Trabulus who will tell you all of this tomorrow too. 25 But the fact is that in evidence here we have
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9013 Summations-Wallenstein 1 Defendant's Exhibit ED. Now, what is that? That's 2 another IRS official form, "how to prepare a collection 3 information statement." Now, isn't it logical that when 4 you get a document from the Internal Revenue Service that 5 tells you how to fill out an Internal Revenue Service 6 form, that if you follow the instructions they give you, 7 that everything will be okay? Doesn't that make sense? If they say to you, "this is how you figure an offer" and 9 you do it that way, what's wrong with that? If they say 10 to you, "don't include this, we don't care," have you done 11 something wrong by not including it? 12 When they say to you how to prepare a collection 13 information statement, wouldn't you assume this is how 14 they want you to do it? Doesn't that make sense? To bad 15 the record doesn't get the sarcasm. 16 "Necessary living expenses."
The key word in 17 that phrase is "necessary." It says here "expenses must be 18 reasonable for the size of your family, your geographic 19 location and your unique circumstances" right there in 20 plain English. Now, what does that mean? Does that mean 21 tell us what you really spend or does that mean tell us 22 what's necessary? For a family of four you need more 23 money than a family of two, it makes sense. For a single 24 person you need less money than for a family of four. 25 To give you an example how they mean what she
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9014 Summations-Wallenstein 1 say, right down here it says under item 48, "medical. 2 Show recurring medical expenses only. Do not include an 3 occasional medical expense." Like if you happen to get 4 your teeth fixed or you happen to go to a doctor because 5 you had a particular
acute illness but the doctor gave you 6 this new medical drug that cured your illness in a week 7 and cost you $10,000, you can't put that down there as a necessary living expense because it's a one shot deal. 9 It says "recurring medical expenses only." What 10 does that mean? It means your medical premiums you pay 11 every month, it means if you go to the doctor on a regular 12 basis, it doesn't mean a one shot deal. So you get sick, 13 go to the doctor once in three years, you can't put down 14 that 10 grand because that is not a recurring medical 15 expense. Does that make any sense? Is going to that 16 doctor in that circumstance necessary? Sure. But they 17 tell you don't put it down. That tells you that they 18 don't care. They don't care. They want to know what does 19 this mean, "necessary living expenses." Does that mean I 20 would like to live in a $20,000 a month mansion? No. 21 Necessary means you can live in a car, you can live in a 22 card board box, take a $100 a week room. Necessary means 23 that you can eat cat food because the rest of the money 24 has to go to the IRS. That may be a bit of an 25 overdramatization, oversimplification, but they don't
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9015 Summations-Wallenstein 1 care. 2 If you spend $100,000 a month but you could live 3 on $5,000 a month, that document better show 5,000, not 4 100,000, because the rest of it is for the IRS. What do 5 you need to live, because we're taking the rest. That's 6 what that form means. "What do you need to live" because 7 anything you don't absolutely need is going to the IRS. Sell the Cadillac, by a Hundai, maybe a Kia. 9 Now, Mr. Gagliardi testified. Mr. Gagliardi 10 talked about the offers and compromise and he talked about 11 all of these things and he said, you know, I didn't know. 12 Gordon said in the forms that Reffsin submitted, they said 13 he's only got this, he's only making that. They didn't 14 tell me about anything else. But you know what -- do you 15 have that offer and compromise (addressing Mr. White.) 16 Here's the offer and compromise, Exhibit 420. You can 17 take all of these exhibits with you, by the way. I'm not 18 sure that you want to, but you can. 19 He says, Gagliardi says, that he didn't know 20 about Who's Who Worldwide and he couldn't get Who's Who 21 Worldwide's income so he couldn't figure out, couldn't get 22 into the books of Who's Who Worldwide to know that Bruce 23 Gordon had access to money. But you know what? That's 24 just not so because attached to the compensation -- I'm 25 sorry, attached to the offer and compromise and part of
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9016 Summations-Wallenstein 1 the offer and compromise which Mr. Gagliardi got was 2 number one, this collateral agreement with the Justice 3 Department that says, and Mr. White hammered on this this 4 morning, that the government gets half of every dollar 5 that Bruce Gordon gets over $50,000, and that agreement is 6 there, Gagliardi knew that, but in addition to that he had 7 the compensation agreement. Now, you know I listened to Mr. White for three 9 hours this morning and I didn't hear those two words 10 together in the same sentence once. He never mentioned 11 the compensation agreement and the compensation agreement 12 that Mr. Gagliardi had as part of the offer and compromise 13 that they say was so fraudulent and hid all of his assets, 14 says very clearly. This is an agreement between Bruce
15 Gordon and Who's Who regarding his compensation for 16 functioning as president and chief executive officer, the 17 responsibility for running the day-to-day operations. 18 Does that tell you that Bruce Gordon is in control of 19 Who's Who Worldwide? 20 Now, we know, hindsight, 1998, having heard all 21 of these witnesses over the last two and-a-half months, we 22 know that Bruce Gordon ran every aspect of Who's Who and 23 it lays out what his compensation will be, how much money 24 he will get and so on and so on, so they knew, Gagliardi 25 knew that Gordon was in control and command of the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9017 Summations-Wallenstein 1 day-to-day operations of Who's Who. Why is that 2 important? It's important because Gagliardi said he did 3 all of these things in the investigation of the offer and 4 compromise. He researched data bases, went to the Motor 5 Vehicle Bureau, County clerk's office, and he dug deep but 6 he didn't get very deep, didn't get to the bottom of the 7 stack of the papers because he didn't see the compensation agreement and if he did he ignored it. 9 He went to his house, there wasn't anybody home 10 but he went to the address that he had for Bruce Gordon. 11 And he said specifically, his testimony on page 308 of 12 this close to 10,000 page record that we have here, he 13 said that he understood that Bruce Gordon was in control 14 of Who's Who Worldwide, that he was the president, the 15 director, a shareholder and all of those things and he 16 said I couldn't get the Who's Who records. 17 Well, he didn't get the Who's Who records because 18 if he had gotten Who's Who tax returns he would have seen 19 the percentage attributed to Mr. Gordon on the corporate
20 returns, the percentage of stock and he would have seen 21 the income of Who's Who and he would have been able to 22 say, hey, I want some more. Your offer is not good 23 enough. Offer is the key word there. That's just what it 24 was. It was an offer. They didn't have to accept it. 25 Ultimately they didn't accept it, but they could have said
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9018 Summations-Wallenstein 1 we'll take your $150,000 or they could have said, you know 2 where you can put your $150,000, we want the whole 3 3 and-a-half million or they could have wound up anywhere 4 in between, it was a negotiation. 5 Mr. Reffsin testified that he did not expect the 6 IRS to accept $150,000. He figured that it was going to 7 come out somewhere between $500 and $1,000,000 that Gordon was ultimately going to compromise his liability for and 9 it was going to be paid out. But it's not his function 10 (indicating) to be an IRS agent, that's for Rosenblatt and 11 Gagliardi. It's not his function to take the IRS's 12 position, it's not his function to make it easy for the 13 IRS and he has no legal obligation to do so. He's got a 14 legal obligation to his client, to present his client's 15 position in the best possible light to the Internal 16 Revenue Service and Mr. Rosenblatt said too (indicating) 17 he's got a right to say, hey, all we'll give you is 150 18 grand, that's what we have. You have all the information 19 you need to evaluate this offer. 20 You've got 433 A's that follow your 21 instructions. You've got 433 A's that lay out what he 22 has, what he spends and what he owes in accord with what 23 Marty Reffsin believes, honestly and in good faith are the 24 things that the IRS is looking for. And we know that 25 because we've seen these instructions.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9019 Summations-Wallenstein 1 Gagliardi had what he needed. Did he get what he 2 needed? No. Why not? Got me. All he said was I could 3 not get the records of Who's Who Worldwide, but you know 4 what? It was another witness, Mr. Rosenblatt. And 5 Mr. Rosenblatt said: 6 "Question: If a revenue officials such as 7 Mr. Gagliardi feels he needs more documentation, does he have the power to ask for it? 9 "Answer: Yes, he does. 10 "Question: And if he's not getting it from the 11 taxpayer, does he have the authority to obtain it from 12 other sources? 13 "Answer: Yes. 14 "Question: If, for instance, he needs a return 15 of a corporation in which the taxpayer is a shareholder or 16 an officer and the taxpayer refuses to produce the 17 returns, could he go to the corporation to get it? 18 "Answer: Yes. 19 "Question: Can he get them from the IRS's own 20 files? 21 "Answer: Yes. 22 "Question: Does he need any particular authority 23 to do that or can he simply say I need these in connection 24 with this investigation and therefore please provide these 25 copies?
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9020 Summations-Wallenstein 1 "Answer: He has to have an open investigation to 2 be able to show that it's related." 3 He has an open investigation. He has a 4 compensation agreement submitted by the taxpayer that says 5 I'm in control. Does that make it related? Sure, it 6 does, by any stretch of the imagination, by any definition 7 of the term, it's related. What does Gagliardi do? He does nothing. He 9 says, I didn't have the return so screw it. He doesn't 10 bother. You will send Marty Reffsin to prison because 11 Gagliardi didn't have to get the return that he didn't 12 bother to get and he didn't get that and says this whole 13 thing is a fraud. There's no crime here, there's no 14 conspiracy here. Reffsin and Gordon didn't get together 15 and decide to stick it to the IRS. Reffsin advocated 16 Gordon's position. Gordon's position is I owe the IRS a 17 ton of money, how can I pay less? Reffsin says, we'll 18 make an offer. We'll follow their instructions. Now, we 19 know that they are not interested in anything that they 20 don't have priority over and we know they are interested 21 in only necessary expenses. We'll put down that. I know 22 what they'll look at, what they are interested in. I'm 23 Mr. Peters, I'm in collections, I look for assets. 24 There's no crime here. The crime here is that Marty 25 Reffsin is on trial, that's the crime.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9021 Summations-Wallenstein 1 There's no conspiracy here to defraud the IRS and 2 do you know what, I have just demonstrated to you for the 3 last half-hour why there is no crime here, but I don't 4 have to do that. I don't have to do anything. Mr. White 5 has to prove to you that there is a conspiracy between 6 Marty Reffsin and Bruce Gordon to defraud the IRS or you 7 have to find Mr. Reffsin not guilty of that charge. That's the law. 9 I've talked enough about the IRS. We all know 10 they're the bad guys. Let's talk about the obstruction of 11 justice counts. 12 Now, there's a count here of obstruction of 13 justice that pertains to Mr. Reffsin and it has to do with 14 the submission of the logs to the bankruptcy court. 15 Speaking of bankruptcy, Jack Hall testified, do 16 you remember him? He's the first witness I called. Jack 17 Hall is an attorney, a partner in the law firm of Shaw, 18 Licitra and a couple of other people and he's a bankruptcy 19 expert. He testified that he handled bankruptcies and 20 retained Marty Reffsin to assist him in bankruptcies and 21 he has referred Marty Reffsin to other attorneys and he 22 said that Marty Reffsin has a good reputation in the 23 professional community for honesty and for truthfulness. 24 Judge Spatt will give you an instruction on how 25 you view character evidence and he's going to tell you
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9022 Summations-Wallenstein 1 that a character witness can help you assess Mr. Reffsin's 2 credibility, help you decide whether or not Mr. Reffsin 3 has been proven guilty beyond a reasonable doubt because
4 even if there's evidence that when you get together and 5 talk about it leads you to say, well, you know, I'm not 6 sure. Mr. White made some valid points. I think maybe 7 Reffsin, maybe he was involved with Gordon, maybe he did conspire? Then you think about Jack Hall. You say wait a 9 minute, is Reffsin the kind of guy who would do that, is 10 that the type of person he is? If the testimony of that 11 witness, Jack Hall, makes you think twice and makes you 12 say you know, this guy has a good reputation, he's 13 respected in his field, I'm not sure he's the kind of guy 14 who would do that? What does that say? That says 15 reasonable doubt and reasonable doubt says you must 16 acquit. 17 I got off on that tangent because we were talking 18 about the bankruptcy court and the obstruction counts. 19 The only witness, the only witness who says that 20 Marty Reffsin obstructed justice by being involved with 21 the preparation of those admittedly phoney logs is Maria 22 Gaspar. In order for you to convict Marty Reffsin of 23 obstruction of justice, you would have to be convinced 24 beyond a reasonable doubt that Maria Gaspar is telling you 25 the truth, the whole truth and nothing but the truth and
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9023 Summations-Wallenstein 1 that Jack Hall is not telling you the truth about Marty's 2 character and that Marty lied to you when he said he had 3 nothing to do with it. Because she is the only one who 4 says that he did. If you have a doubt, the slightest 5 reasonable doubt about Maria's veracity, about Maria 6 Gaspar to shade the truth, tell the truth or lie to you, 7 then you have to acquit Marty Reffsin. And having said that I could sit down right now because I think
her 9 testimony speaks for herself, of course I'm not going to 10 do that. 11 There's no dispute about certain of the facts 12 here. We know that the logs were ordered to be produced, 13 we know that the logs which are in evidence here -- do you 14 have those, Mr. White -- were, in fact, produced and we 15 know that they were created by Maria Gaspar in her own 16 handwriting. 17 She says in a nutshell and you can have all the 18 testimony if you want, she says that in the car on the way 19 from the bankruptcy court to Lake Success in Mr. Reffsin's 20 car with Mr. Reffsin's driving and Mr. Gordon in the front 21 seat and she in the back seat, both of them together 22 ordered her to produce these logs, to produce these phoney 23 logs and they gave her names and they gave her people and 24 they gave her dates and told her about the meetings. 25 That's what they
say.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9024 Summations-Wallenstein 1 Now, the name that appears most often in here is 2 Bruce Gordon and certainly that is a name that Mr. Reffsin 3 knows. But I submit to you that Mr. Reffsin has no reason 4 to know any of the other names that appear in this log and 5 when pressed, when I asked Maria Gaspar what names did 6 Mr. Reffsin give you, she couldn't give me an answer. The 7 only name that she could attribute to Marty Reffsin was Debra Benjamin. Yeah, he knows Debbie Benjamin but that's 9 the only one he knew and that's the only one that Maria 10 can give you. But she said Reffsin gave me names and the 11 names that appear here, Susan Konopka, she testified. She 12 said she doesn't know him (indicating.) Tracey Colletti, 13 she testified. She said she doesn't know him. Elizabeth 14 Sautter, she
didn't testify. She is not sitting here. 15 Ask yourselves why not? 16 You've heard all about Elizabeth Sautter. In 17 fact, there was some testimony that she was the one who 18 kept the logs. How come she is not here? Either there or 19 there (indicating.) 20 Maria Gaspar, well, that's certainly a name that 21 Mr. Reffsin knows, and Maria Gaspar put her own name down 22 here. She said she was at a meeting that she wasn't at. 23 You don't see the name Marty Reffsin any place. Marty 24 Lamb, Tara Green, sales strategies. 25 Reffsin is an accountant, he has his own office,
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9025 Summations-Wallenstein 1 his own practice, he's not an employee of Who's Who, he's 2 not there daily, he's there on a monthly basis to do the 3 bank recs. Most of the time it is his people. He doesn't 4 know these people except he's a codefendant. The only 5 reason he knows these people he has been thrown into this 6 indictment with them. 7 Gaspar again, Elizabeth Sautter again. Maybe these are the ones that Elizabeth Sautter created. Maybe 9 Elizabeth Sautter is the one that gave Maria Gaspar these 10 names. If you have to ask yourselves these questions, you 11 have a reasonable doubt. 12 Are these names that Marty Reffsin would have 13 known that he would have given? No. I know you could 14 answer that yourselves but I thought it was important. 15 Margaret -- I don't even remember Margaret's last 16 name, there was some testimony about Margaret. 17 Susan, Tracey, Debra Benjamin, Michael Powers. 18 I'll give this to Mr. Neville, maybe he can find Carl 19 Roper in here. 20 Marty Reffsin doesn't know these names. He 21 didn't give Maria Gaspar those names, she lied. I did
22 what Mr. White said I would do, he said I would call her a 23 liar and I did. But she is, she lied. Why? Because she 24 made up that document. This is her handwriting. She 25 created this out of whole cloth. She didn't fax this to
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9026 Summations-Wallenstein 1 Marty Reffsin for approval. He had no way of knowing 2 whether these meetings took place. 3 He saw one sheet of paper, you heard himself, I 4 saw a sheet of paper, it had a couple of names and dates 5 and I called her up and said, Maria, that's not what the 6 Court ordered, they want details. That's not enough. Now 7 she has waited a month. She has got to cover her butt because she didn't do what she had to do. Why didn't she 9 do it? She didn't do it because she knew Bruce Gordon 10 didn't want it done. But is there any evidence that he
11 told her not to do it? Is there any evidence that Reffsin 12 told her anything with respect to the logs other than what 13 she said? 14 Marty testified that the car ride was five 15 minutes. It went from the bankruptcy court over here in 16 Westbury to Neil Flaum's office in Mineola. He remembers 17 that because Bruce didn't know where the bankruptcy court 18 was, didn't want to drive there. So Bruce has Maria drive 19 him to Neil's office and Marty, whose office is in 20 Jericho, meets them there and takes him over to the 21 bankruptcy court. 22 It's five minutes from Merrick and Old Country 23 Road to Old Country Road and Glen Cove where Neil Flaum's 24 office is, that's with the traffic from Fortunoff's. So 25 the 20 minute car ride that Maria is talking about is the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9027 Summations-Wallenstein
1 ride from Lake Success to Mineola. But Marty is not in 2 the car. It's Maria and Bruce. In the five minutes it 3 takes to get from the courthouse back to Flaum's office, 4 Bruce is ranting and raving. "I'm not giving them the 5 logs. I don't want to give them the logs." I'm sure that 6 the language was a bit more colorful than that. "I'm not 7 letting Reed Elsevier know what I'm doing in my business." Reffsin's response is, Bruce, you have to. Does that make 9 him guilty of obstruction of justice? "You have to, 10 Bruce, the Court said do it, now just do it. Bite the 11 bullet." Marty gets out of the car, not privy to the rest 12 of the conversation, but you can all hear it, 20 minutes 13 from Neil Flaum's office to Lake Success, I'm not redoing 14 those -- you get the picture. You know where it is going. 15 You know, you know what that conversation is 16 like, I'm
screaming and yelling, I'm not producing the 17 logs. So Maria knows she can either do the logs that she 18 heard the Court say do or she can keep her job. So she 19 doesn't do the logs. That's not on him. That's not on 20 Marty, he's got nothing whatever to do with that. Maybe 21 that's on Bruce, maybe that is on Maria, but that's not on 22 Marty Reffsin. 23 Now, now it's show time. The Court is saying 24 where are the logs? Now, Neil Ackerman who can't get 25 ahold of Bruce Gordon says to Marty Reffsin, Marty, where
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9028 Summations-Wallenstein 1 are the logs? Bruce will not return my calls. Marty has 2 a conversation with Maria and he says, Maria, the logs are 3 due, they are due today. Where are they? And she faxes 4 over a couple of names and dates. And he calls her up and 5 says, what are you kidding? This isn't what they 6 ordered. They want to know who is at the meetings, what 7 the purpose of the meetings are and where the meetings are? Now Maria has to scramble because she didn't do what 9 she was supposed to do was which keep a log all along. So 10 she creates them and she sends them to Neil Ackerman and 11 Neil Ackerman presents them to the bankruptcy court. How 12 is that on Marty Reffsin? That's the obstruction count 13 that he created those logs. 14 Now, you heard his testimony and you heard her 15 testimony. Why would Maria Gaspar come in here and lie? 16 Why would she come here and say all of these bad things 17 about my client if they weren't true? Let me tell you 18 why. Maria Gaspar thinks she is an accountant. Maria 19 Gaspar says she is an accountant. Maria Gaspar says in 20 Portugal I was the equivalent of a Certified Public 21 Accountant and
I was hired as the chief financial officer 22 for Who's Who Worldwide. In fact, she testified under 23 oath at one time that she was responsible for all the 24 financial affairs of the corporation. That was a lie. 25 That was perjury because in here she said "I was never
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9029 Summations-Wallenstein 1 responsible for the financial affairs. I was a 2 bookkeeper. He made me a clerk." She's angry, she is 3 bitter, she is not being used up to her potential. They 4 bamboozled her. They told her that she would be the CFO 5 and put that down on her resume' and she turns out to be a 6 bookkeeper. She said comptrollers, CFO, they make 7 decisions, I didn't make decisions. Didn't have signatory authority on the checkbooks, Bruce Gordon was the one that 9 could sign the checks. She's mad. She's mad because she 10
wanted to be the CPA and she wasn't. Not only wasn't she 11 but here is the outside CPA who is a CPA, who is a well 12 respected man in his field who taught for the American 13 Institute of Certified Public Accountants and he comes in 14 and says, hey, you screwed up, lady. You made a basic 15 error, bookkeeping 101, debts to the left, credits to the 16 right, you reversed them. They taught you that. You're 17 not an accountant. He didn't use those words but that's 18 the tone, that's the gist, that's the relationship. Maybe 19 he didn't say it directly but Vince Resini did. 20 Vince Resini who is now Marty's partner, a CPA 21 for 20 years himself, Vince came in and Vince said she 22 wasn't much of a bookkeeper. Well, maybe that's why they 23 wouldn't let her be the CFO, but the bottom line is all 24 she knew is when the accountant came in, I'm nothing. 25 She's mad. She has a
motive. She is pissed at Reffsin OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
9030 Summations-Wallenstein 1 because he's doing what she thinks she should be doing and 2 he is criticizing her work and she doesn't take kindly to 3 criticism. She doesn't take kindly to questions that have 4 to be answered yes or no or otherwise. She has got a very 5 selective memory, did you notice that? Does that give you 6 some doubts about her credibility? When she sits up there 7 and says, if I recall correctly, something tells me that this is what I heard. What, you have a bird on your 9 shoulder? Either you remember or you don't remember. She 10 is making it up as she goes along. 11 Now, why else does she have a motive to lie 12 here? Because she has to tell you what the government 13 wants you to hear. She has to tell you that Marty Reffsin14 and Bruce Gord
on told her to create those logs that she 15 created because if she doesn't tell you that, she is going 16 to jail. She is going to jail. 17 Let me ask you, does her testimony make sense to 18 you? Does it have the ring of truth to you? Does what 19 she said sound like what really happened? 20 Here's a woman, a mother, a wife, bookkeeper, 21 accountant, whatever it is she is doing, in the catering 22 hall, sitting in her office in the catering hall and who 23 comes in, the men in suits and badges. Federal agents. 24 Now, Mr. Jordan is a nice guy but he and somebody 25 else from the Internal Revenue Service Criminal
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9031 Summations-Wallenstein 1 Investigation Division along with a postal inspector who 2 should probably remain nameless, come into her office and 3 she doesn't think anything of this? Give me
a break. 4 The second meeting, she still has no clue. I 5 grant you she is not a rocket scientist but can she be 6 that dumb? Does she really think they are not 7 investigating her? Does she really have no clue what this is all about? They are asking her questions about Who's 9 Who and they don't bring up the logs. Why not? Because 10 the only one who knows that the logs are phoney at that 11 point in time is Maria Gaspar. The government doesn't 12 know it, the government doesn't care, it's not an issue at 13 that point. Maria Gaspar knows that the logs are phony. 14 How does she know? She is the one who phonied them. So 15 now I'll lean it on her. Talk to me, tell me about all 16 the bad things that Bruce Gordon did. Tell me about all 17 the bad things that Marty Reffsin did. 18 She is sitting behind a desk in her own office 19 with three men, federal agents in suits with badges and 20 she is not intimidated? I don't think so. I'd be 21 intimidated. You'd be intimidated. They are not friendly 22 faces when they are out in the field doing investigations, 23 not like our smiling Special Agent here, and I'm not 24 putting him down in any way, shape or form because he's 25 doing his job and doing it well, but when he's sitting in
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9032 Summations-Wallenstein 1 Maria Gaspar's office she is the target of that 2 investigation and now she will get out of it. Let me tell 3 you about these phoney logs that Gordon and Reffsin told 4 me to do, because she knows they want to hear about Gordon 5 and Reffsin. So she pins it on Gordon and Reffsin and 6 once she does that she has to stick with it because it's a 7 crime to lie to a federal agent. So once she has told them that they have created these logs, if she doesn't 9 stick with that right through to here, she goes off to 10 jail and she knows it. She didn't call her lawyer until 11 the fourth meeting, maybe it was the third meeting, and 12 when they called her lawyer, who she just happened to 13 know, Vinnie Nicolosi, a criminal defense lawyer, she 14 picks up the phone, calls Nicolosi and what does she say? 15 Here, talk to Mr. White, I don't have a clue. Is that 16 real? Is that real? How about Mr. Nicolosi, help me, the 17 Feds are here, make me a deal. I think that's a little 18 more real. She knew what was going on here. She has 19 pinned it on them and she has to stick to it but her story 20 is not consistent. She lied. We know she lied because 21 she testified under oath that she told Susan Konopka, 22 Tracey Colletti and Debra Benjamin that they were in the 23 logs. She said I went into
them, they were having lunch 24 and I said, hey, guys, just so you know you were at 25 certain meetings at certain times. Now, wouldn't that
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9033 Summations-Wallenstein 1 evoke a response from Benjamin or Colletti or Konopka? A 2 response akin to Maria, what the hell are you talking 3 about? Or even, okay, Maria, how about giving us some 4 details, so if you need us to back you up we can back you 5 up? Either one of those responses would be appropriate, 6 and given the fact that Who's Who is in bankruptcy, given 7 the fact that people are attending meetings at the bankruptcy court and other proceedings at the bankruptcy 9 court and given the fact that Maria Gaspar has now come 10 into the room and said in essence "I'm asking you to lie," 11 don't you think that one of them would have remembered 12 that
meeting? But not one of them did. Every one of them 13 said, no, I never had such a conversation with Maria 14 Gaspar. No, she never told me my name was in the logs. 15 Susan Konopka said that. She has got no reason whatever 16 to lie about anything to anybody or about anybody. 17 Tracey Colletti said the same thing. No, I never 18 had that conversation. 19 Debra Benjamin said, no, I never had that 20 conversation. And she would have been in a position to 21 know. She would have been in a position to understand why 22 that was necessary. She was an administrator. And we 23 don't know what conversation Maria may have had with 24 Elizabeth Sautter because Elizabeth Sautter is not here. 25 Maria Gaspar says, and Mr. White made a point of
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9034 Summations-Wallenstein 1 this this morning, Debra Benjamin testified that Maria 2 came out of a meeting with Bruce and Marty and she was 3 upset, on the verge of tears. Well, she doesn't pin down 4 when the meeting was and there was no evidence of what 5 Maria said, only the fact that Maria was upset. We don't 6 know when it was, we don't know what was said inside the 7 office, we don't even know if Mr. Reffsin opened his mouth or he was sitting in the corner doing a tax return or 9 working on a checkbook or something, we have no idea what 10 went on inside the room that Maria Gaspar was in because 11 she didn't say anything. Debra Benjamin says something. 12 So who knows. Maybe Bruce told her if she didn't shape up 13 he was going to fire her. Maybe Bruce was having a 14 tirade. We've heard some testimony here that he was 15 capable of that. Maybe he was angry about some other 16 reason. 17 Maybe, maybe Mr. Reffsin criticized her work 18 because she was incompetent. We don't know. All we know 19 is she was upset and Mr. White would have you believe that 20 because Debbie Benjamin said that Maria Gaspar was upset, 21 Marty Reffsin created the logs. There seems to be a gap 22 in that logic some place. I don't buy it. 23 At the very, very, very least there is reasonable 24 doubt and, therefore, Mr. Reffsin is not guilty of 25 obstruction of justice.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9035 Summations-Wallenstein 1 What it comes down to is this. There's a lot of 2 exhibits, there's a lot of evidence, there's a lot of 3 testimony for you to sift through, the tax case, the mail 4 fraud case. There are a lot of things for you to 5 consider. We've been here a long time. Take your time, 6 sift through it all, reed back anything you want read 7 back. The reporter
will never talk to me again. Ask for it if you are not sure. If you don't think that I'm 9 accurate in my recollection of what the testimony was, ask 10 for it, it's in the record. Evaluate it. Judge it. 11 Apply your common sense, apply the life's skills we all 12 have. Every one of us makes important decisions every 13 day. Apply those skills, judge the credibility of the 14 witnesses. Apply the law that Judge Spatt gives you as he 15 gives it to you. He is supreme. What he says goes. 16 Apply that law to the facts that you find. You are the 17 fact-finders. 18 When you've done that for each defendant, each 19 one of these defendants here have to be considered 20 separately and individually as to each count, that's not 21 something you can do in a hurry. Evaluate the testimony 22 and the evidence as it applies to Mr. Reffsin. Evaluate 23 the Government's testimony. Evaluate Mr. Reffsin's 24 testimony, Mr. Resini's testimony, Mr. Hall's testimony, 25 but most of all remember that no matter who produced the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9036 Summations-Wallenstein 1 witness, no matter what the witness said, no matter what 2 the evidence is, the government has, had, and will have 3 the burden of proof. They must prove every element of 4 every crime as to every defendant beyond a reasonable 5 doubt. If you sit down and you say I don't know, then you 6 are saying "I have a reasonable doubt." If you are saying 7 that you must acquit. Thank you. 9 THE COURT: All right. Members of the jury, 10 we'll take a ten-minute recess. 11 Please don't discuss the case. Keep an open 12 mind. Please recess yourself. 13 (Jury exits.) 14 THE COURT: Let the record indicate -- I'll put 1
5 it on the record some other time. 16 Have you got the revised indictment? 17 MS. SCOTT: Yes, Your Honor, I handed that to 18 you. 19 THE COURT: That's the finished product. 20 MS. SCOTT: Except for the one mistaken I told 21 you, the second to the last page. 22 THE COURT: I don't know about the mistake. Do 23 you want to fix it up for me? 24 MS. SCOTT: Yes. 25 THE COURT: Is this the one?
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9037 Summations-Schoer 1 MS. SCOTT: It's on the second to the last page. 2 THE COURT: All right (handing.) You can take 3 your recess. 4 You will fix it up and return it to me, right? 5 MS. SCOTT: I am, Your Honor. I have to get to a 6 computer which I'll do tonight to fix that last page. It 7 is just one page. THE COURT: Then you will give it to me tomorrow 9 morning.
10 MS. SCOTT: Yes. 11 (Recess taken.) 12 (Jury enters.) 13 THE COURT: Please be seated, members of the 14 justify. 15 Please give your attention to the attorney for 16 the defendant Tara Garbowski, Mr. Gary Schoer, Esq. 17 (Continued.) 18 19 20 21 22 23 24 25
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9038 Summations-Schoer 1 MR. SCHOER: May it please the Court, my 2 colleagues, ladies and gentlemen, members of the 3 prosecution team, and ladies and gentlemen of the jury. 4 Good afternoon. We've now reached that stage of 5 the trial after so many weeks that I told you about at the 6 beginning of the trial, that time when I told you that I'm 7 going to have the opportunity to come here and to demonstrate to you that the prosecution, the government 9 h
as not proven beyond a reasonable doubt each and every 10 element of the crimes charged against Tara. 11 Before I begin, I would like to take this 12 opportunity to thank Judge Spatt, thank my colleagues for 13 the courtesies that they've given to me throughout this 14 trial, and on behalf of Tara I would like to thank each 15 and every one of you. I want to thank you for the careful 16 attention you've paid to this trial because I watched you 17 closely and I watched the careful attention you've given 18 to all the evidence and I've watched the seriousness to 19 which you've approached your duties. 20 This has been a long, long trial and I think we 21 all can agree what you've done is very admirable. 22 As I told you at the beginning of the trial, you 23 have a duty and a responsibility. You have a duty to 24 uphold the law, as Judge Spatt will give it to you. Now, 2
5 he will charge you after the summations are over. It
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9039 Summations-Schoer 1 probably will be Thursday. Listen carefully to the law, 2 focus on it. Focus on what the prosecution has to prove 3 beyond a reasonable doubt to show that Tara knowingly was 4 part of and joined a conspiracy. Listen carefully to the 5 law that they have to prove beyond a reasonable doubt that 6 she knew that Who's Who Worldwide was doing something 7 illegal, that she knew Who's Who Worldwide was doing something unlawful. They have to prove that beyond a 9 reasonable doubt. 10 Focus on whether the prosecution has proved 11 beyond a reasonable doubt that she was part of any sort of 12 scheme to defraud anyone, part of a plan to knowingly, 13 knowingly deceive people and take property from them. 14 Listen carefully to Judge Spatt's charge on the law with 15 respect to materiality, to what the prosecution has to 16 prove beyond a reasonable doubt with respect to what was 17 material to the bargain between Who's Who Worldwide and 18 its members. Most importantly, focus on the definition of 19 intent to deceive. Focus on the definition of good 20 faith. Listen carefully to those charges and what the 21 prosecution has to prove beyond a reasonable doubt with 22 respect to each of them and I submit if you really focus 23 carefully on the definitions of those elements of the 24 crimes charged and you analyze what has been presented, 25 you will find, and I'll demonstrate to you in this
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9040 Summations-Schoer 1 summation, that despite all you've heard, despite the 2 weeks we've spent here, there is a lack of evidence in 3 this case,
a lack of proof beyond a reasonable doubt with 4 respect to each and every element of the crimes charged as 5 against Tara Garboski. 6 Now, in doing that, in holding the prosecution to 7 its proof in following the law to its letter, you may be a little bit uncomfortable. You may not be happy about 9 telling the government that dispute all the time and 10 effort and cost that they've expended, that they just 11 haven't proved a crime. You might be uncomfortable about 12 telling them that they just haven't proved that Tara 13 Garboski had anything to do with any criminal activity. 14 You might not like to be sent mail that you might consider 15 to be junk, you might not like telemarketers, about the 16 fact that Bruce Gordon earned a lot of money, but as a 17 matter of law you have to put all of those things aside 18 and you have to decide all of those things as I said at
19 beginning of the trial on the credible, believable 20 evidence that you've heard, that you've seen and upon the 21 law. It's easy to accuse, it's easy to indict, it's easy 22 to bring a whole bunch of charges into this courtroom but 23 it's another thing to prove those charges beyond a 24 reasonable doubt and that's their burden. 25 You have a duty and you have a responsibility.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9041 Summations-Schoer 1 Tara is entitled to every consideration that the law 2 allows. She is entitled to the same consideration that 3 you and I are entitled to under the laws and the 4 constitution of this country. Her life, her freedom is on 5 the line for performing a job, for earning a living, for 6 doing things for an employer whom she trusted and at the 7 time had no reason not to believe not to trust, for selling a product that she and others strongly believed in 9 and in which she honestly believed was a service to those 10 people who became members. You hold her fate in your 11 hands and to say the least this case is vitally important 12 to Tara. It's not magic, this case isn't special. The 13 purpose of this trial and the purpose of every trial is to 14 determine whether the prosecution has proved beyond a 15 reasonable doubt each and every element of the crimes 16 charged. They must prove beyond a reasonable doubt that 17 crimes were committed at Who's Who Worldwide and that Tara 18 committed the crimes charged. And I submit to you they 19 haven't. 20 Now, during this statement I'm going to make 21 arguments to you, I'm going to present arguments to you 22 which I submit will be grounded in reason and logic which 23 will appeal to your common sense, but most important which
24 will be based upon the evidence you heard and based upon 25 the law as Judge Spatt will give it to you. After I'm
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9042 Summations-Schoer 1 finished and after all my colleagues are finished, I think 2 the Judge told you the government has an opportunity to 3 get back up here, to make what is called a rebuttal 4 summation. The government will be able to have heard 5 everything that we've said. The government will be able 6 to have an opportunity to answer the arguments that we've 7 made. They have the luxury of having heard those arguments. We just don't get the last word. 9 Now, we're experienced lawyers and we can 10 anticipate the arguments that they are going to make in 11 rebuttal. We're all human and I don't expect that I can 12 anticipate every argument that the government will be able 13
to make on rebuttal, so I just ask you to do this. When 14 the government makes an argument, and I haven't 15 anticipated it, just think, just think for a little while 16 about what I might have been able to say if I had a chance 17 to get back up here based upon the evidence and the law, 18 based upon the credible, believable evidence and you don't 19 have to accept what I would have said. I just want you to 20 think about it. I just want you to think whether or not a 21 reasonable doubt might arise if I had had an opportunity 22 to answer those arguments. That's all I can ask you to 23 do, that's all Tara can ask you to do. 24 Before I begin to analyze the evidence I want to 25 warn you again of a few things of vital importance to this
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9043 Summations-Schoer 1 trial, things which the prosecution has ignored and in 2 which they want you to ignore. Not once during 3 Mr. White's statement did he use the words "my proof is 4 beyond a reasonable doubt." You have to listen to the 5 Judge's charge and if you do you will realize that you 6 can't ignore things that are fundamental to fairness, 7 things that are fundamental to impartiality, things that preserve all of our rights, things that make sure that 9 each of us have a right to a fair trial in which the 10 accuser, the government has to prove and has to be tested 11 to ensure that there's no reasonable doubt that a person 12 might be convicted of a crime that the government just 13 couldn't prove was a crime or might be convicted of a 14 crime that the government couldn't proof he or she 15 committed, couldn't prove beyond a reasonable doubt. 16 Beyond a reasonable doubt, that's the burden of 17 proof and that always stays
on the prosecution. Tara 18 doesn't have an obligation to present any evidence. She 19 has a right to rely on her presumption of innocence. She 20 pled not guilty and that's all she has to say. She didn't 21 testify, that was her constitutional right. The Judge 22 will tell you that. That was a decision she and I made 23 after assessing what the believable -- what we believed 24 was the believable credible evidence presented against her 25 and the lack of evidence. The Judge will tell you that
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9044 Summations-Schoer 1 you can draw no inference, no inference at all from the 2 fact that Tara chose not to testify. That was her 3 constitutional right and it would be unfair and it would 4 be improper, it would be unAmerican for you to hold that 5 against her in any way. 6 I want to warn you as I did at beginning of the 7 trial and as the Judge has and will again tell you that each of the men and women out there are to be considered 9 separately. They must be treated separately. The 10 credible evidence must be evaluated against each 11 separately. The first three weeks of this trial, if you 12 remember, most of the stuff had nothing to do with my 13 client, it had to do with things related to Bruce Gordon, 14 and the fact that she is here with others, even if it is 15 proven, even if it was proven it is conceded that she 16 worked with them is meaningless. Guilt by association is 17 intolerable. You can't hold against Tara things that 18 Mr. Gordon may have done. That's guilt by association. 19 The relative weight of what they proved or what they 20 didn't prove against Bruce Gordon or against any of the 21 other people on trial has no bearing on Tara. You are 22 required to make a decision on her solely on the proof 23 against her which I submit to you is lacking. 24 Remember that much of the evidence that was 25 introduced in this trial was not even introduced against
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9045 Summations-Schoer 1 Tara. You heard the Judge tell you over and over again 2 that what you were hearing or the documents you were 3 seeing were being admitted solely against Mr. Gordon or 4 solely against the corporation or solely against Sterling 5 or against a particular person, not against Tara. 6 The government talked about statements in their 7 summation of people who were not on trial, statements of people who didn't testify. People who weren't subject to 9 cross-examination here. None of those things that they 10 said were admissible against Tara and the Judge told you 11 that. You heard no evidence at all that Tara had anything 12 to do with Sterling. 13 Listen carefully to the Judge's charge on another 14 area of the law, it's called multiple conspiracies. The 15 government has chosen to lump together Who's Who Worldwide 16 and Sterling. That was their choice, that was their 17 election. But there is no proof that the people employed 18 at Who's Who Worldwide knew anything about what was going 19 on at Sterling, absolutely no proof. The government chose 20 to lump them together, and if you carefully listen to the 21 multiple conspiracy charge, I submit that you have to find 22 that the allegations in the indictment concerning a single 23 conspiracy, one conspiracy, just haven't been proven. 24 In any event, you have to separate the evidence, 25 the credible evidence presented and admitted against Tara
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
9046 Summations-Schoer 1 and only apply that evidence in reaching your verdict with 2 respect to her. Now, that may not be an easy task because 3 you heard a lot of things, but remember that as you 4 deliberate. You have to separate out the evidence with 5 respect to each defendant and you can only use the 6 evidence that was introduced against them in reaching your 7 verdict with respect to that particular defendant. Now, nothing that I'm saying in this summation is 9 evidence, just as nothing that Mr. White said is 10 evidence. I told you before, and the Judge will tell you, 11 that the evidence comes from the witness stand, from the 12 exhibits that are introduced, but it is not just 13 everything that comes out of a witness' mouth. Your 14 decision has to be based on credible evidence, believable 15 evidence and Mr. Wallenstein spent some time on that on
16 showing you that certain witnesses were not credible. 17 Listen carefully to Judge Spatt's charge on how 18 to assess the credibility of a witness. There's no 19 magical test, it's your common sense. 20 You have to determine whether you would believe a 21 particular person's testimony if you had to rely upon it 22 in order to make an important decision in your life and 23 that's what you do in here. You are making an important 24 decision in Tara's life. When you listen carefully to the 25 charge, pay special attention to what the Judge says about
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9047 Summations-Schoer 1 witnesses who the government claims are so-called 2 accomplices or those who received immunity or those who 3 have entered into cooperation agreements. You have to 4 scrutinize carefully with great care and particular cause
5 of action those peoples' testimony. You have to judge 6 their testimony more carefully than other witnesses. 7 But most importantly the evidence in this case is not just the direct testimony, that's what the government 9 wants you to believe that only the direct testimony 10 counts, but you can't do that. You can't ignore 11 cross-examination. 12 You are required to evaluate all the testimony, 13 to assess the credible evidence and to apply the law. 14 You have to use that credible evidence, you have 15 to apply the law and you have to reach your determination 16 as to whether the prosecution has proven beyond a 17 reasonable doubt the elements of the crimes charged. 18 Remember that because that's your job. 19 So let's look at what they proved and what they 20 didn't prove. Let's look at how the law applies to the 21 credible, believable evidence that you have heard in this 22 courtroom. Despite the length of this trial, the issue in 23 this case is relatively simple as it applies to Tara. The 24 issue is did the prosecution prove beyond a reasonable 25 doubt that Tara Garboski knowingly and with the intent to
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9048 Summations-Schoer 1 deceive was part of an agreement to commit a crime, and 2 did the prosecution prove beyond a reasonable doubt that 3 knowingly and with the intent to deceive that Tara 4 Garboski was part of a plan or scheme to take property of 5 others by knowingly making false statements that were 6 material to the bargain between Who's Who Worldwide and 7 its members? I submit to you that they haven't proven that Tara agreed to do anything she believed was 9 criminal. I submit to you that they haven't proven that 10 false statements that were
material to the bargain were 11 made and most importantly I submit to you that they 12 haven't proven that Tara ever intended to deceive anyone. 13 Let's look at what the government produced with 14 respect to Tara. Mr. White on his summation told you some 15 things, didn't seem to have very much to do with Tara 16 Garboski. They showed you that she was an employee of 17 Who's Who Worldwide for about four and-a-half years. The 18 evidence showed that she was first a salesperson and then 19 a group leader and that at times she handed out lead cards 20 to sale people. You heard that she interviewed people for 21 jobs, you heard that with a tape in the interview, where 22 she interviewed Eric Ihlenfeldt for a job. You heard she 23 hired people. You heard that she trained new employees 24 and you also heard that she monitored telephone calls, 25 that she listened in for the salespeople to make sure they
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9049 Summations-Schoer 1 weren't lying. The government produced some tapes in 2 which she gave pep talks to the sales force but she always 3 told them if you listen to those tapes not to pressure the 4 potential member. She always told them it's not a hard 5 sell. You don't have to make a hard sell. 6 The government misleadingly played a tape in 7 which they contended that Tara told the sales staff not to ask about educational background. Yeah, they played that 9 one little clip, but then on the defense case you heard 10 the entire training session. I played it, and she 11 explained in that training session, she was going through 12 the questions asked, she explained there that there are 13 two sides to the order form and you only ask certain 14 questions and she explained that
education or background 15 wasn't included in the books so there was no need to ask 16 it. 17 There's many people who don't have a formal 18 education, like one of the richest businessman on earth, 19 Bill Gates, never graduated from high school. It doesn't 20 matter whether you have an education, it really doesn't 21 matter as to whether or not you are qualified to be in 22 this book, to be a member of Who's Who and that's what she 23 was telling the staff if you listen to the whole training 24 session. 25 They played another tape in which Tara told the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9050 Summations-Schoer 1 staff to push a potential customer to make a decision. 2 Yeah, get him to say yea or nay, push him to the wall, get 3 them to make a decision, but they didn't play the 4 conclusion to that and I had to play it for you. S
he said 5 you have to ask for the order or you will never get it so 6 if you don't ask them, if you don't reach the point where 7 you say give me a decision, yea or nay, you're never going to get an order. But she also said if they don't want it 9 that's nice, that's okay, say thank you, get off the phone 10 and make your next call. 11 Finally, they played a tape in which Tara told 12 the staff to use ego as a selling point to distinguish 13 between a regular and a gold membership. No one claims 14 that ego gratification wasn't part of what Who's Who 15 Worldwide was selling and the customers and Sandra Barnes 16 of Marquis told you there's nothing wrong with that. 17 That's what people wanted, they wanted their ego to be 18 gratified. Surely it is not criminal to sell a product 19 that appeals to someone's ego. You heard about that 20 throughout this trial. That's
what Cadillac does, that's 21 what Armani does, that is what Patek Phillipe does when 22 they tell you wear our product, drive our car and you'll 23 be a better person. You'll be more recognizable. You'll 24 be -- your ego will be gratified by buying our product, 25 it's done every day. That's what the government has
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9051 Summations-Schoer 1 proved. That's it. Those things that we've just 2 discussed. So what? 3 You can't infer from that beyond a reasonable 4 doubt from that limited evidence that Tara knowingly 5 entered this enterprise, this company, knowing it was 6 illegal, knowing that it was doing illegal things. You 7 can't infer that she knew material misrepresentations were being made, that she intended to deceive people, that she 9 took their money deceitfully. From that evidence that the
10 government presented you can't infer that she didn't ask 11 in good faith. 12 It defies logic, it ignores the rest of the 13 evidence you heard, it ignores reality. And to believe 14 that that evidence, that limited evidence proves beyond a 15 reasonable doubt the government's case is enough to meet 16 their burden of proof, that ignores the law. Look 17 carefully what they claim they proved. Look carefully 18 what the rest of the evidence was. 19 Tara was first just a salesperson. She didn't 20 write any letters. She didn't draft any letters of 21 solicitation. She didn't write the pitches. They were 22 done before she ever was employed. They were done by 23 Bruce Gordon. The letters were his, the pictures were 24 his, the words were all his favorite children, he told you 25 that on tape. Tara had no reason to believe that what was
OWEN M. WICKER, R
PR OFFICIAL COURT REPORTER 9052 Summations-Schoer
1 in the script might at sometime later in hindsight be 2 claimed by the government or anyone else to be materially 3 misleading or intentionally deceiving. She had no reason 4 to believe it was anything more, the pitch was anything 5 more than recognized, accepted salesmanship, puffing. 6 Bruce Gordon specifically told them it was true. 7 You heard the tape that I played. He's talking about that one in six people and he specifically says to the people, 9 to his workers, to the employees, "and that's true, you 10 know." He told them "nominated" had many meanings. He 11 told that to Debra Benjamin and he told that to other 12 people too. He told them that it meant selected. Words 13 have many meanings. You heard that in the courtroom. 14 There is a big fight going over the word 15 necessary. Some people think it means one thing and other 16 people think it means something else, nominated can mean 17 lots of things. She was told by this man, this older 18 successful man who was autocratic, who was controlling and 19 who told them what they wanted them to know and there was 20 no reason for her to question it. No reason for her to 21 believe that it wasn't true, just as there was no reason 22 for Marty Reffsin to believe the things he was telling 23 them weren't true, just as there was no reason for his 24 brother and sister-in-law, he told you. There was no 25 reason to believe that Mr. Gordon wasn't telling them the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9053 Summations-Schoer 1 truth. Just as there was no reason for Maria Gaspar who 2 also told you she had no reason not to believe what 3 Mr. Gordon told her or Debra Benjamin who also testified
4 that she had no reason not to believe what Mr. Gordon told 5 them. Just as a smart attorney like Neil Ackerman, who is 6 a smart man, an attorney, who gets up on the witness stand 7 and said I had no reason not to believe Bruce Gordon when he told me something. Tara had no reason not to believe 9 that the things in the pitch that he said were true were 10 not true. She didn't know about his tax problems. She 11 didn't know about his finances. He was her employer. She 12 was a worker. She didn't know about those things in this 13 trial, until you heard about. What he may have said to 14 the IRS, what he may have said about different things 15 about ownership of the company. She didn't know anything 16 about that. She had no reason to question his veracity. 17 You have to look back to what she knew at that 18 time when she was working there, not with hindsight. She 19 had no reason not to believe what Bruce Gordon told her. 20 But there's more than just his words that lead her to have 21 no reason not to believe the truth, there was that 22 separation of functions, that black door that she and the 23 salespeople were never allowed to enter. She is charged 24 with mail fraud and she never saw the letters, the 25 solicitation letters. She is charged with mail fraud and
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9054 Summations-Schoer 1 she never knew what was in the mailings. She wasn't even 2 allowed to open the mail. You heard that, the mail was 3 opened, all the mail that came into this place was opened 4 by certain people in administration and no other people 5 were even allowed to even see it. 6 If you are not allowed to see the mail when it is 7 being opened or you are not allowed to open the mail, how are you supposed to know what's coming in? How many lead 9 cards are coming in? You can't know it. 10 The solicitation letters were locked in a binder 11 in the administration office and you heard Mr. Saffer tell 12 you that if the salespeople entered the administration 13 office they would be fired, fired for going across that 14 black door. 15 Debra Benjamin, a person even higher up in the 16 company told you the only way the salespeople or even she 17 would have known about those percentages, the six in one, 18 the 16 percent, the 15 percent, if they were told by Liz 19 Sautter or Bruce Gordon and she also told you she was the 20 president of this company, that there was no reason, no 21 reason to question the numbers, the percentages that they 22 gave to the employees. Why? How was Tara to question? 23 How was Tara to know? 24 The government wants you to believe that Tara was 25 some sort of an insider. That's what they tried to say in
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9055 Summations-Schoer 1 their opening statement but they couldn't prove it because 2 it just wasn't true. She received a salary. She didn't 3 even receive a commission. She had no financial interests 4 in this business other than her paycheck and you saw that 5 was, that was $1,200 at the end of this whole time 6 period. She wasn't earning the most. Debra Benjamin was 7 earning $300 more a week, just like Maria Gaspar who the government holds out as having no financial interest in 9 this business other than her paycheck, Tara Garboski had 10 no financial interest in this business other than her 11 paycheck. She had no reason, the same way the government 12 argues that Maria Gaspar had no reason to falsify 13 documents, Tara Garboski had no reason to try and deceive 14 people. It was a job. She had jobs before, she'll have 15 jobs after, she has jobs after. She had no reason to 16 deceive anyone. She didn't have a company car like some 17 other people, she didn't receive perks like travel 18 payments like some other people. She wasn't second, third 19 in command. She didn't even have a key to the office. 20 She couldn't get in there unless Liz Sautter let her in or 21 Bruce Gordon let her in. 22 But the higher-ups, Liz Sautter, Debra Benjamin, 23 they weren't even arrested. The people who really knew 24 about the entire operation, they weren't even arrested. 25 Tara only knew what she was told and she was told that
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9056 Summations-Schoer 1 there was a screening process before she got the cards. 2 That is what she was told. She was told that there was a 3 screening process at time of the mailings. She didn't 4 know anything about the mailing lists, but she knew there 5 was a screening process at that time. That's what she was 6 told and she was told there was another screening process 7 after the cards came back and she often observed that and people in the conference room sorting cards behind the 9 locked door. This is what she saw. 10 She knew that there was another level of 11 screening that her people, the salespeople were being told 12 to screen the cards. I'll give you the cards, hand them 13 back to me if the people don't qualify. You heard that on 14 the tapes over and over again. If they don't qualify even 15 before you call them, hand them back to me, I'll give them 16 new cards. You will not lose your chance for 17 commissions. After you talk to them on the phone if they 18 don't qualify, hand the cards back. She knew that the 19 sales force was doing that. Most importantly she was told 20 that there was a last level of review even after the 21 orders were written, it was Wendi Springer. Wendi 22 Springer told you it was her primary job, primary job to 23 review those orders and make sure people qualified and 24 that's what Tara was told. That's her job. She's in 25 there. She's working eight hours a day. She was
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9057 Summations-Schoer 1 reviewing orders to make sure people qualify. Contrary to 2 the government's argument, Wendi Springer did reject 3 people, she told you that, and Debra Benjamin also told 4 you that Wendi Springer on a weekly basis would come to 5 her and ask her about cards, about particular cards. Does 6 this person qualify? But it was even more than what she 7 was
being told, even more than the screening process that lead Tara to believe that the script wasn't materially 9 misleading. Lead Tara to not even deceive him. She knew 10 about the Rolls Royce, she knew about the Cadillac of the 11 industry, she knew about Marquis, and she knew that 12 Marquis set the standards for the industry. That's why we 13 called Sandra Barnes because Marquis set the standard for 14 this industry. 15 Tara knew that the use of the term "Who's Who" 16 wasn't exclusive to Marquis. There were hundreds of Who's 17 Whos. She knew just as Debra Benjamin told you, just as 18 Alan Saffer told you he knew that Marquis used mailing 19 lists. Everybody in Who's Who Worldwide knew Marquis used 20 mailing lists. And they knew that most of the people that 21 Marquis solicited came from maiming lists. 22 Look at Marquis' own document, I sort of blew up 23 one
of the pages from FK. This is Who's Who in Finance 24 and Industry. It's one day's mailing. 205 mailings and 25 out of -- I'm sorry, 205,000 mailings, 205,000 mailings.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9058 Summations-Schoer 1 Look at how many nominations there were, 276, the bulk of 2 what Marquis did was mailings, mass mailings, mailings to 3 people on mailing lists. Business Monthly Magazine. 4 Look at some of these others, Industry Week, the 5 Journal of Commerce, Cranes Business, these are 6 newspapers. These people aren't any more qualified to be 7 in a Who's Who, but that's what Tara knew. We don't claim as the government tried to say and that's basically all 9 they did say in their summation that Tara didn't know 10 there were mailing lists. We haven't claimed that. 11 The point is she didn't think she was deceiving 12 anyone
by using mailings. Marquis did it and Tara knew 13 also that not only did Marquis use mailing lists but that 14 Marquis used letters to people whose names came from a 15 mailing list where they say "Dear Marquis Who's Who 16 nominee." They used the word "nomination." 17 There's another letter, the one to Mr. Gordon 18 that says you've been nominated and that's the letter that 19 Mr. Gordon flashed around to all the employees. She knew 20 that Marquis did that, used the word nominated from people 21 who came from mailing lists and she also knew that Marquis 22 really didn't tell people their names came from a mailing 23 list. They danced around it. You heard what they have in 24 their brochures and you heard what Mr. Dunn read from the 25 trademark trial what Sandra Barnes said about whether or
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9059 Summations-Schoer
1 not they told people they were on mailing lists, only if 2 it was vitally important. That's the only time they told 3 somebody they were on a mailing list, and Mr. White brings 4 in this one brochure out of six boxes full, one brochure 5 that says something about using subscriptions. He was 6 supposed to bring in every brochure and he doesn't show 7 you one that even mentions anything remotely close to a mailing list, but the reality of the situation is that 9 that brochure was prepared if you look at it and it's 10 copyrighted in 1990. In 1994 they are using brochures 11 like this in Who's Who in American Law. They are sending 12 a brochure like that to a letter addressed to "Dear 13 professional," who they got from a mailing list and read 14 what it says. Why was I chosen to be considered for 15 inclusion? We contacted you because we believe your 16 accomplishments to be of significant reference value. How 17 do they know that from a mailing list? Could they? You 18 are part of a core group of highly qualified individuals 19 who are prominent because of their leadership positions. 20 How do they know that from a mailing list? 21 Sandra Barnes told you that this is what they 22 sent to people whose names they got off of mailing lists 23 and not only that, read the next question. "Is my 24 inclusion guaranteed?" They get your name from a mailing 25 list and now here's the question, "is my inclusion
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9060 Summations-Schoer 1 guaranteed?" "Unfortunately there are a few instances, a 2 few instances where you are not accepted if your name came 3 from a mailing list." That's what Marquis, that's what 4 the Cadillac of the industry did, that's what Tara 5 Garboski knew. It's puffery, it's sales puffery, just as 6 Suzanne Konopka told you, institutionalized lying, not any 7 different saying that a watch is a piece of work of art or a mark of distinction or that a car is a oasis of 9 serenity. It's salesmanship, puffing, it's what the 10 government does in their own ads for the Army. Be all 11 that you can recognize, you will not recognize yourself in 12 four years. It's all puffery, salesmanship, it's not a 13 crime. 14 Tara also knew what she saw. She saw the book, 15 she saw that the people in the book were from upper and 16 upper middle management. 17 I've got another exhibit, Defendant's Exhibit 18 AI. Look at this. These are the percentages of people in 19 high level positions that were in Who's Who Worldwide. 20 She knew that people were getting what they bargained for 21 to be in a membership organization that was selective, 22 that included major players, Russian presidents, CEO's, 23 officers of major corporations. It didn't matter how the 24 company got their names. Didn't matter if the president 25 of whatever company, whatever company we talked about in
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9061 Summations-Schoer 1 the Tribute magazine, what mattered is that they were in a 2 group of selected people. 3 Tara knew that people were getting what they were 4 bargained for, knew they were getting a nice plaque, knew 5 the great benefits if they took the trouble to use them, 6 networking, discounts, planned conferences, cocktail 7 parties, knew about the meeting facilities, knew about this great little magazine Tribute. Look at these 9 things. 10 Susan Konopka, Tracey Colletti, Debbie Benjamin, 11 they were proud of these and they had every reason
to be 12 proud of them and all the employees were proud of these
13 magazines. Debra Benjamin told you that that's what Tara 14 wanted most. She wanted to make the product better on a 15 daily basis and the product was being made better and the 16 services were expanding and everything was becoming more 17 valuable to the members until the government raided Who's 18 Who Worldwide, closed the place down and Tara was 19 arrested. 20 Tara also saw some other things that are 21 extremely important, things that show she didn't intend to 22 deceive. She knew that members were happy. She heard 23 that. She heard that from members. On the tapes she told 24 you that. The Tribute magazine there were letters from 25 members saying how happy they were. There were numerous
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9062 Summations-Schoer 1 people upgrading their membership. 2 THE COURT: Mr. Schoer, please start to conclude 3 your summation. 4 MR. SCHOER: Yes, Judge. 5 There were a minimum of complaints, you heard 6 that. You heard testimony that out of 70,000 members 7 before the government got their hooks in the membership, before they told them their theory, there were only 20 to 9 30 complaints out of 70,000 members. The government 10 argues that you saw customers come in who said they didn't 11 get what they paid for, but most of those customers if you 12 listen to them, they were upset about the B balance. They 13 didn't understand the B balance. And you heard all of 14 those tapes. There's not one tape where the B balance was 15 not mentioned. 16 The members who came in here, their 17 dissatisfaction arose after the government told them that 18 they, the government, believed that Who's Who Worldwide 19 wasn't injured. Listen carefully to the Judge's charge. 20 It's whether or not Tara had valued accounts. Whether or 21 not Tara believed the statements in the scripts, about 22 nominations, percentages, concerned about the quality, 23 adequacy and price of the product. It's what they 24 believed, caveat emptor, let the buyer beware, that's 25 business. That's what we learn early in life, it's not a
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9063 Summations-Schoer 1 crime. 2 In any event, the most telling evidence that 3 people were satisfied, that people were happy is right 4 here in a company where there were returns, refunds, given 5 gladly, a policy. 1.1 percent of the total sales, that's 6 minuscule, people who asked for refunds or got chargebacks 7 on their credit cards. Minuscule. Most importantly, Tara saw a thriving business 9 that was spending a tremendous amount of money,
10 4 and-a-half million. This was no fly by night 11 organization, this was no Eric Ihlenfeldt little hole in 12 the wall where people making telephone calls on bridge 13 tables. You saw the videotapes. This is no place where 14 people were standing over them telling them lie, lie, lie, 15 like Eric Ihlenfeldt's operation. There was no intent to 16 deceive here. People were fired for lying. Every 17 ex-employee who testified, all of them were government 18 witnesses, stated they did not believe they were 19 committing a crime when they worked at Who's Who 20 Worldwide. Every one of them said they didn't intend to 21 deceive anyone and that they didn't think their actions as 22 employees deceived any members. Even the government 23 informant, Elliot Zerring who worked there for six weeks, 24 curiously they didn't ask him whether he believed he was 25 deceiving people, he never told you that. And maybe they
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9064 Summations-Schoer 1 didn't ask him because they didn't want to hear the answer 2 that he would have been given. 3 Even Alan Saffer said and if you really evaluate 4 his credible testimony, he said that he didn't think he 5 was deceiving people. He had worked at West, he knew West 6 double billed, refused to give refunds. He was told by 7 the postal inspectors in 1990 that West is bad, don't get involved in a similar operation and he goes and starts 9 working at Who's Who Worldwide and he works there for five 10 years and he doesn't think anything about it. He thinks 11 everything is going good and it's not until he's arrested, 12 until he's terrified by being arrested. It's not until he 13 faces going to
jail for two to four years that he decides 14 well, maybe I better do something to help myself to take 15 away that possibility that I might go to jail. 16 He didn't want to take the chance of enduring 17 what these people have endured for the last several years 18 and the trial for the last 10 or 11 weeks. He didn't want 19 to take the chance about standing up for his rights, so he 20 caved in and now he tells you what the government wants to 21 you hear. Now he tells you what he thinks he wants the 22 government to hear. They weren't trying to deceive 23 anybody. If they were, why refer people to Biegelman? 24 Why sign up people from Hard Copy? There was no intent to 25 deceive. Debra Benjamin told you that. She told you that
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9065 Summations-Schoer 1 she didn't believe that the company deceived members by
2 saying the organization was highly selective. 3 Tara never intended to deceive, she never 4 intended to defraud anyone. She acted in good faith based 5 upon what she was told, what she knew and what she saw. 6 In fact, there is no proof that she made any 7 representation to any customer over the telephone. All those tapes and there's not one word from her mouth that 9 could be considered a misrepresentation to any member of 10 the public. All of those tapes and not one where she or 11 anyone else is telling the people to lie, to say that 12 names didn't come from mailing lists. There's not one 13 tape that says that and Zerring was taped for 10 weeks 14 wearing a tape every day. 15 You didn't hear all the tapes but there is no 16 tape that exists that showed that. There is no evidence 17 that she caused misrepresentations to be made. You heard 18 to the contrary. You heard the tapes that I played, 19 follow the script verbatim. Credibility is important, 20 accuracy is important, you must qualify potential members 21 through the interview process. You can't accept certain 22 people. You heard her say that. You heard her say "we 23 feel that we have to sell our membership. The product 24 itself is good enough that we don't have to drop anybody's 25 name. The pitch has to be followed verbatim. We're
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9066 Summations-Schoer 1 legitimate. We want to stay that way." That's what Tara 2 said. And the only way we can do it is by monitoring you 3 and what you're saying, so the pitch has to be followed. 4 You have to tell the truth. Don't make stuff up. It's 5 not even worth it. 6 And there's another tape that I played which is 7 very curious. It's someone telling her, one of these new people telling her, well, can we say something that isn't 9 in the script? And she says, that's why we don't want 10 people lying because people know. And the person says, 11 that's not lying, that's not lying. And Tara says, it's a 12 lie, it's a blatant lie. The script, that's the only 13 answer. 14 And in another part of that same tape someone 15 says, "can we say that the package enclosed with the 16 plaque gives them the 800 number for the discounts?" And 17 she says on something so inconsequential as that, she 18 says, "no, you can't tell them that, I don't know whether 19 they do that. I don't know if they are sending out 20 applications or not. Don't give people misinformation." 21 And the most telling tape is the one where Eric 22 Ihlenfeldt came in for an interview. She didn't know that 23 he had a tape-recorder. What does she say to him? She 24 says, "that's basically what it is. We have a set 25 presentation and we do require that it is followed to
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9067 Summations-Schoer 1 protect your own credibility. By following the script, 2 first of all, you will not confuse them, you will not lie 3 to them, you will not stretch the truth and you'll close 4 because it's all mapped out for you." Don't lie. Those 5 are the words of Tara. 6 The government wants you to rely on the words of 7 the tape when it suits them but they want you to ignore Tara's words. Those were her words that she didn't know. 9 Those were her words when she didn't know she was being 10 taped, words, words which demonstrate that she believes 11 strongly in the product of Who's Who Worldwide, words that 12 demonstrate that she did not believe she was engaged in 13 any
criminal activity. Words that demonstrate that she 14 didn't intend to deceive or defraud anyone. Words that 15 demonstrate that she acted in good faith in her 16 employment. Words that clearly demonstrate the government 17 has not proven beyond a reasonable doubt the elements of 18 the crimes charged, have not proven beyond a reasonable 19 doubt that there was a crime and have not proven beyond a 20 reasonable doubt that Tara was involved in any criminal 21 activity. 22 I told you at the beginning of the case that I 23 would return and that I would demonstrate that the 24 government didn't prove their case, didn't prove what they 25 were required to prove by law. They have not. I showed
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 9068 Summations-Schoer 1 you that and I urge you to reach the only conclusion that 2 you can based upon the credible
evidence, the lack of 3 evidence and the law in this case and that is that Tara 4 Garboski is not guilty. 5 Thank you. 6 Thank you, Judge. 7 THE COURT: Members of the