Who's Who Worldwide Registry
20-plus million dollars per year to zero in five seconds flat
The next installment of this fascinating saga (WWW Trial Transcript Jan29) continues beneath the following paragraphs.
Never once in American history has a company generating millions of dollars per year -- -- been closed in a single day. Never. Until 74,000 members of WWW Executive Club had the door slammed by the U.S. Government.
Publisher's Clearinghouse and Family Publishers and so many other similar companies pay tens of millions in fines for directly deceiving millions of us. Can anyone deny the enormity of impact on sales when Ed McMahon and Dick Clark enthusiastically, nationally promoted magazine sweepstakes scams for years and years? Victims who sold their belongings to fly to Prize Headquarters, people who were falsely told that they were millionaires only to find others just like themselves. Several millions of Americans duped into phony sweepstake scams and schemes that netted enormous profits?
Although Publisher's Clearinghouse subscriptions were paid in full,
neither Dick Clark nor Ed McMahon have been arrested, have they?
Has even one actual human being from these companies ever been arrested?
When the US Government disapproves of a company's practice,
they usually resolve it informally, with at least a warning or three.
With the apparently too-powerful WWW Executive Club, the US Government waited several years...
and then shuttered the WWW Exec Club with a 5-minute execution. Never once a hint of disapprobation... until the kill.
There are now hundreds of fraudulent companies negotiating with the U.S. Government ---never losing a day of business.
Yet WWW Executive Club, after six years of obviously top-notch service to 72,000 American role models of excellence, was closed in a single day, with a federal raid; with conscientious, professional innocents led out in handcuffs and humiliation. Is it possible to consistently deceive 72,000 of the sharpest men and women in America? The CEO's, Chairmen of the Boards, Exec V.P.'s in 800 of America's largest 1000 corporations? 72,000 of America's best and brightest? From Sumner Redstone and Georgette Mosbacher, both of whom were profiled nationally in the WWW Executive Club Magazine (the one with full-page ads from Izod, Cadillac, Seagram's, all of whom had important Republican men and women in the WWW Exec Club, to thousands and thousands and thousands of additional corporate and institutional decision makers? Not in this life.
trial page 1951
Dirtiest Trials of the Twentieth Century
1951
19
Court Reporter: Owen M. Wicker, RPR
20 United States District Court
Two Uniondale Avenue
21 Uniondale, New York 11553
(516) 292-6963
22
23 Proceedings recorded by mechanical stenography, transcript
produced by Computer-Assisted Transcript.
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1953
Rosenblatt-direct/White
1 (Case called.)
2 THE COURT: Good morning.
3 Where is the witness?
4 (Jury enters.)
5 THE COURT: Good morning, members of the jury.
6 Please be seated.
7 Again, I want to thank you very much for your
8 diligence and punctuality. I'm sorry I kept you waiting.
9 I had two other matters on this morning, which I'm still
10 discussing with the lawyers and that is the reason for the
11 delay.
12 You may proceed.
13 A N D R E W R O S E N B L A T T , having been
14 previously sworn by the Clerk of the Court, was examined
15 and testified as follows:
16 Mr. Rosenblatt, you are still under oath. Do you
17 understand that?
18 THE WITNESS: Yes, I do.
19 DIRECT EXAMINATION
20 BY MR. WHITE: (Continued.)
21 Q When we broke yesterday we were discussing the loan
22 account for Who's Who Worldwide for Mr. Gordon for the
23 year 1991. Do you recall that?
24 A Yes, I do.
25 Q And we were looking at Exhibit 655 which was the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1954
Rosenblatt-direct/White
1 Who's Who general ledger for that period. Do you remember
2 that?
3 A I don't remember the exhibit number, but yes.
4 Q And that only went to July of 1991; is that correct?
5 A That's correct.
6 Q Now, let me show you Exhibit
1004-A.
7 Have you prepared an analysis of the taxable
8 income --
9 MR. TRABULUS: Objection, Your Honor.
10 THE COURT: I didn't hear the question.
11 MR. TRABULUS: I'm sorry.
12 BY MR. WHITE:
13 Q Have you prepared an analysis of the taxable income
14 to Mr. Gordon for the years 1991 through 1994?
15 MR. TRABULUS: Objection, Your Honor.
16 THE COURT: On what grounds?
17 MR. TRABULUS: On the grounds it calls for
18 testimony relating to a legal conclusion, relating what
19 the income is and not taxable.
20 THE COURT: That's not necessarily a legal
21 conclusion. While it's true, this witness as an expert
22 cannot give legal conclusions most of the time. That's a
23 very interesting issue. Where you have ultimate
24 conclusions and legal conclusions are two different
25 things. But with respect to what is taxable from an IRS
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1955
Rosenblatt-direct/White
1 point of view, he certainly can testify as to that.
2 MR. TRABULUS: Your Honor, I would like to
3 approach with a further discussion because I believe in
4 this particular instance you should not.
5 THE COURT: All right. Come up.
6 MR. WHITE: Your Honor, maybe I can move things
7 along. I don't want to move the exhibit, I want the
8 witness to refer to it for the purposes of its
9 calculations, not whether or not it is taxable income but
10 the numbers as it relates to companies and years.
11 MR. TRABULUS: Well, the jury already heard the
12 answer or having heard the question, it will be clear to
13 them that any testimony that he gives with regard to those
14 numbers is going to be interpreted that way and I think
15 the issue I'm bringing up at this point will recur
16 throughout the testimony of this witness. I think we
17 ought to address it at this point.
18 THE COURT: Come up.
19 (Side bar.)
20 THE COURT: Yes.
21 MR. TRABULUS: Your Honor, with regard to the
22 Federal Rules of Evidence not changing the prior law that
23 a witness cannot give a legal conclusion, I would cite
24 U.S. v. Scop, 846 F.2d at 135. It was a subsequent
25 opinion but it didn't change the reasoning of that.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1956
Rosenblatt-direct/White
1 THE COURT: What does that say?
2 MR. TRABULUS: Basically the old rule that an
3 expert cannot give a legal conclusion still applies.
4 THE COURT: Is that a tax case?
5 MR. TRABULUS: That one was a securities and mail
6 fraud case.
7 THE COURT: Well, that was apparently prior to
8 1994. Certainly --
9 MR.
TRABULUS: It was '88.
10 THE COURT: There were a couple of changes since
11 then that have refined that.
12 MR. TRABULUS: I know that. Let me get to the
13 particular reason that Scop would govern.
14 Based upon the government's disclosure as to the
15 basis of the expert's opinion, he testified that the basis
16 for the inclusion of the loans as income was based on the
17 lack of good faith intent to repay, among other things.
18 Now, the lack of good faith intent to repay, as I
19 understand the case law, is indeed the sine qua non
20 whether or not a loan is a loan or is to be treated as
21 income. But intent and good faith are issues of mental
22 state and Rule 704(b) would preclude testimony concerning
23 that. So what he has done is couched in terms of
24 testimony as to whether income is taxable or not an
25 opinion as to whether or not there was good faith intent
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1957
Rosenblatt-direct/White
1 to repay a loan at the time it was made.
2 I would submit it was not admissible under Scop
3 and under 704(b).
4 MR. WALLENSTEIN: I would join in Mr. Trabulus'
5 application.
6 THE COURT: Yes, Mr. White.
7 MR. WHITE: Your Honor, Rule 704(b) prohibits an
8 expert offering testimony on the defendant's mental state
9 to commit the offense that he's charged with. That's
10 quite different than what Mr. Rosenblatt will testify
11 about. If that were the test that you can't say anything
12 at all about intent, then -- I'm sorry, if the test where
13 you could never talk about the law, legal conclusions no
14 expert could testify. Every determination of taxable
15 income involves applying the tax code and the regulations
16 to the facts and number at
issue. Scop, that case is
17 entirely different. That was a securities fraud case
18 whether the government put on an expert who said that
19 these acts that the defendants on trial did, in his
20 opinion, constituted a scheme to commit securities fraud.
21 That is entirely different than this.
22 THE COURT: What is this expert going to say? He
23 will say that assuming these matters are not loans, they
24 would be taxable income?
25 MR. WHITE: Correct. And the test --
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1958
Rosenblatt-direct/White
1 THE COURT: What's wrong with that? He's not
2 saying -- he's not getting into the intent of the
3 defendant. He's saying that assuming that they were not
4 loans they would be taxable income and isn't that what you
5 are saying?
6 MR. WHITE: Well, yes and no, Your Honor. The
7 tests as I understand it under the tax code and
8 regulations in terms of deciding whether something is
9 income or loans, involves whether there was the intent to
10 repay the loans at the time they were taken out.
11 Therefore -- and there's a series of factors in the cases
12 about specific concrete factors that Agent Rosenblatt will
13 apply to determine whether or not these were in fact loans
14 or whether they should be considered income. That is
15 entirely different then the mental state required for
16 conviction. He will not testify that Mr. Gordon willfully
17 conspire with Mr. Reffsin, he will not testify that he
18 submitted false tax returns, his determination is not at
19 all inconsistent with an acquittal. He could say look
20 under IRS regulations and cases this is income, but they
21 could still say, which they apparently will say,
22 Mr. Gordon didn't know that, it was an honest mistake, a
23 lack of evil intent.
24 THE COURT: Wait a minute. What will he say?
25 Tell me.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1959
Rosenblatt-direct/White
1 MR. WHITE: He's going to say -- well, there's
2 two parts to it. With respect to the loans, he will say
3 his opinion is that they were not bonafide loans and they
4 therefore should be considered income.
5 THE COURT: And give the factors for that.
6 MR. WHITE: And among those reasons are the
7 failure -- the lack of any notes or written documentation,
8 the failure to repay any significant portion of the debt
9 and a series of other factors. Those are the factors that
10 are identified in the cases.
11 MR. TRABULUS: May I be heard further?
12 THE COURT: Yes.
13 MR. TRABULUS: The testimony supposedly will be
14 -- this is a disclosure I was given. With the Court's
15 permission I would like to read from the letter that
16 Mr. White wrote to me in connection with discovery here
17 "as set forth in the government's October 28, 1997 letter
18 to Mr. Carman," who of course was my predecessor,
19 "Mr. Rosenblatt's opinion is based on the lack of any
20 pattern of legitimate repayments of these loans.
21 "Most or all of such payments were not bonafide
22 in that the funds used to make such repayments were simply
23 obtained from the same corporations as to whom repayment
24 was made."
25 Now, bonafide is simply Latin for good faith and
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1960
Rosenblatt-direct/White
1 there is a good faith defense in this case and under the
2 case law good faith is a complete defense. And that
3 relates to the mental state of the defendant and he's
4 attempting to negate it through the testimony of an expert
5 and I believe that is in violation of 404(b).
6 However, he dresses up the testimony concerning
7 it was taxable or not, it negates the good faith as
8 opposed to income. We are not talking about the situation
9 where the witness will testify as to monies that were not
10 reported but simply the characterization of them. As to
11 good faith, I think 704(b) includes it.
12 MR. WHITE: There's not been a tax case invented,
13 yet when an agent testifies yes, this constitutes
14 income --
15 THE COURT: Well, one of the most interesting
16 cases on expert testimony is United States v. Duncan, 42
17 F.3d 97, (2d Cir. 1994). It was an excellent discussion
18 of expert testimony. It happened to be not a tax case, it
19 was a conspiracy bank fraud and making corrupt payments to
20 public officials. But in this it goes -- the basic rules
21 of expert testimony in a criminal case "expert testimony
22 may be admissible if it is helpful to the trier of fact.
23 That's the starting point. Expert witnesses are often
24 uniquely qualified in guiding the trier of fact through a
25 complicated morass of obscure terms and concepts, because
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1961
Rosenblatt-direct/White
1 of their specialized knowledge there testimony can be
2 extremely valuable and probative."
3 Couldn't be more applicable to this case.
4 "However, expert testimony is not permitted to
5 usurp either the role of the trial judge in instructing
6 the jury as to the applicable law or the role of the jury
7 in applying that law to the facts before it. When an
8 expert undertakes to tell the jury what result to reach,
9 that does not aid the jury in making the decision but
10 rather attempts to substitute the expert's judgment for
11 the jury.
12 When this occurs, the expert acts outside of his
13 limited role of providing the groundwork in the form of an
14 opinion to enable the jury to make its own informed
15 determination. In evaluating the admissibility of expert
16 testimony the Court requires the exclusion of testimony
17 which states a legal conclusion."
18 Then they go into certain things involving tax
19 cases.
20 "Appellant takes exception to a number of
21 questions which the government was permitted to ask the
22 agent concerning the proper function of the tax system and
23 the importance of filing tax returns accurately. These
24 questions, however, did not ask the witness to express
25 legal conclusions but --" this is key to this case "but
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1962
Rosenblatt-direct/White
1 only to explain sophisticated aspects of a regulatory
2 system for which the witness had expertise."
3 Now, I'm departing from the text, that's exactly
4 what this will do. We've generally permitted the
5 elicitation of testimony from expert witnesses that shed
6 light not within the activity of the common knowledge of
7 the average juror.
8 In this particular case there was a defense that
9 since taxes were paid on the property, the government did
10 not lose anything by inaccurate tax filings and the Court
11 of Appeals held it was proper for the tax expert to
12 explain why this is not good, even though the taxes were
13 paid.
14 MR. WALLENSTEIN: That's not this case.
15 THE COURT: I know it's not this case, but it
16 provides guidance for the Court, a lot of guidance.
17 Agent Mulligan testified based on his own
18 investigation of the facts and review of the records. The
19 testimony he presented did not rely on the credibility of
20 other witnesses.
21 MR. WALLENSTEIN: Your Honor, doesn't an
22 explanation of the legal explanations of the tax code
23 differ from an expert witness attempting to assert the
24 defendant's intent?
25 MR. TRABULUS: And here the legal conclusion is
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1963
Rosenblatt-direct/White
1 premised upon a finding of lack of good faith which is the
2 heart of the jury's province.
3 THE COURT: No, in this case one of the issues
4 for the jury will be whether these were bonafide loans or
5 whether these were paid for personal expenses which should
6 have been reported as income. That's one of the issues,
7 correct?
8 MR. TRABULUS: No.
9
THE COURT: It's not?
10 MR. TRABULUS: No, there's no dispute most of
11 them were paid for personal expenses.
12 You can have a loan made for personal expense,
13 the issue is whether they were bonafide loans and the
14 issue as to whether the loans were truly loans which is
15 also separate from the issue of defendant's good faith.
16 The issue whether they were truly loans and properly
17 characterized as loans depends upon whether at the time
18 the loans were disbursed there was good faith intent to
19 repay the loans. That's the case law. That seems to be
20 what the case law uniformly says. There were many civil
21 cases, tax court cases that addressed the factors. I know
22 of no criminal case that ever addressed this.
23 THE COURT: First of all, I agree with you, good
24 faith is a good defense in all of these tax cases and I
25 will charge the jury the government has a burden of proof
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1964
Rosenblatt-direct/White
1 beyond a reasonable doubt for lack of good faith, in the
2 Cheek case. And as far as explaining to the jury these
3 concepts, I'll explain to the jury -- now you will explain
4 -- well, I'm going to play it by ear as it goes along,
5 but you understand that this witness can't give a legal
6 conclusion.
7 What will he say -- what's the end result going
8 to be?
9 MR. WHITE: Let me tell you what I was leading up
10 to. Right at this moment that chart he prepared is just
11 the simplest way he has of the figures he calculated. In
12 other words, when he left off we were going through the
13 loan account each year for each company.
14 THE COURT: And he's summarizing it.
15 MR. WHITE: It's an hour or two hours by the time
16
we get to the expert part of his testimony. I just want
17 to get a year-end figure with the chart.
18 THE COURT: The compilation figures, of course
19 you can do that, but what about the expert testimony?
20 MR. WHITE: What he's going to say, Your Honor,
21 since we seem to be focusing -- there's a snub of issues
22 he will say based on the cases to warrant the conclusion
23 there should be income and not loans. One is that
24 Mr. Gordon was asked on other IRS forms contemporaneously
25 whether he had any loans, these loans were not listed.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1965
Rosenblatt-direct/White
1 Number two, there's no documentation, no written
2 notes, no repayment schedule, no set interest rates for
3 repayments.
4 THE COURT: He will bring out there are certain
5 factors that the IRS within the regulations used to
6 determine whether there were loans, correct?
7 MR. WHITE: Yes, except I believe they are not in
8 the regulations, they are in the case law.
9 THE COURT: Well, all right, then that's a
10 problem.
11 MR. TRABULUS: Case law. Civil cases.
12 THE COURT: Well, he can bring out, in my
13 opinion, that as an IRS act what the custom and usage is
14 in determining whether something is a loan, without him
15 saying whether he thinks it's a loan or not. He can bring
16 out the factors that are determined that the IRS uses to
17 determine this, period. I will let him do that.
18 MR. WALLENSTEIN: There's one other thing --
19 THE COURT: I will not let him give the
20 conclusion that it's a loan or not a loan.
21 MR. WHITE: He can't render his opinion then?
22 THE COURT: That's correct.
23 MR. WHITE: But he's an expert. I thought the
24 reason we had him here was to render his opinion.
25 THE COURT: He's usurping the function of the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1966
Rosenblatt-direct/White
1 jury by rendering an opinion. That's the end of the case
2 in that event.
3 MR. WHITE: I don't think it is. There's sort of
4 a two step process. One is is it a loan or income to
5 begin with? Even if it is in his opinion income, that
6 doesn't mean that Mr. Gordon willfully left it off.
7 Mr. -- His defense apparently is he didn't think he had
8 to put it on. That is not usurping the jury's function.
9 THE COURT: What is the end result? What will he
10 say?
11 MR. WHITE: He will say the following things
12 should be considered taxable income. All the items that
13 are in the so-called loan account because the loan
14 accounts should be income, right, and his conclusion for
15 that is as I said based on the factors. There's no
16 repayment schedule, it wasn't disclosed on other forms.
17 The alleged repayments --
18 THE COURT: He will say it is taxable.
19 MR. WHITE: Yes.
20 THE COURT: In his opinion.
21 MR. WHITE: Yes.
22 MR. TRABULUS: That conclusion is predicated upon
23 case law. The case law all originated in tax court. All
24 of it originated in cases in which the taxpayer bore the
25 burden of proof of determining that the commissioner's
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1967
Rosenblatt-direct/White
1 assessment was incorrect.
2 THE COURT: Well, at this point I will not let
3 him give his opinion. I will let him give the facts that
4 the IRS takes into consideration in determining whether or
5 not it is taxable income and go through those factors but
6 not his ultimate opinion.
7 MR. WHITE: That's down the line. Right now can
8 he simply refer to the numbers on the chart to tell us the
9 ending balance for each account.
10 THE COURT: Sure.
11 MR. WALLENSTEIN: Judge Spatt, there is one
12 number on that chart, and I don't have it in front of me.
13 MR. TRABULUS: I have it.
14 MR. WALLENSTEIN: But there are numbers on here
15 particularly for the year 1993 which show where he's
16 saying that payments to purchase lease, improve, furnish
17 and maintain the condo and penthouse were in fact income.
18 But he has a number here of $942,000 and some other for
19 the purchase of the Manhasset condo which I presume
20 Mr. Rosenblatt will say was income to Mr. Gordon because
21 they were corporate funds.
22 But the fact is that that condo was purchased and
23 improved and maintained with corporate funds and is still
24 titled
in the corporation, still owned by the corporation
25 and is still an asset of the corporation as we speak.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1968
Rosenblatt-direct/White
1 THE COURT: All he's doing is listing what he
2 says is -- could be a loan.
3 MR. WALLENSTEIN: Those numbers were not in the
4 loan account.
5 MR. WHITE: Your Honor, one in the loan account
6 is really income. The second is other monies expended for
7 the corporation were the two residences, the penthouse and
8 condominium also should constitute income to Mr. Gordon.
9 Anything an employer provides you, a benefit like that
10 should be income. So those figures are all the figures
11 for the monies expended for those years on those items.
12 MR. WALLENSTEIN: If that is the case and if
13 Mr. White is correct that anything the employer provides
14 you is income to you, the only part of this 900 some-odd
15 thousand that should be income to Mr. Gordon is the
16 present value of the unit because is it an asset of the
17 corporation purchased with the corporate funds. If he
18 used it then the fair rental value might be income.
19 MR. WHITE: That's cross-examination of the
20 expert. He has a reason for his calculations. And you
21 have a reason for yours.
22 MR. TRABULUS: Your Honor, I join in what
23 Mr. Wallenstein says but if Your Honor will permit
24 testimony from there I would like some kind of limiting
25 instruction they should disregard anything they've heard
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1969
Rosenblatt-direct/White
1 before.
2 THE COURT: I haven't seen this document.
3 MR. TRABULUS: I'm sorry, there was testimony
4 that this was taxable.
5 THE COURT: What is that?
6 MR. TRABULUS: 1404-A.
7 MR. WHITE: It is just the simplest way he can
8 refer to the numbers.
9 MR. TRABULUS: Your Honor, the lead into these
10 numbers, have you prepared a chart showing additional
11 taxation?
12 THE COURT: No, I will not let that in. If you
13 want to prepare a chart with the figures about what you
14 say is ultimately what you will say to the jury is no
15 taxable income, I will not let that in in that fashion
16 because that is a fait accompli.
17 MR. TRABULUS: May I make a suggestion and that
18 is you take that exhibit back, make him cross out the
19 words "additional tax income," re-number it, give it to
20 the witness and let him help them so the jury sees it is
21 an additional income.
22 MR. WHITE: Why don't you hand him another copy
23 of this and ask him to look on it and we don't have to
24
make any reference to it, they will think it is a
25 completely new document.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1970
Rosenblatt-direct/White
1 MR. TRABULUS: As long as it is a new number.
2 THE COURT: Will you be offering it in evidence?
3 MR. WHITE: No.
4 MR. TRABULUS: They already heard what it is.
5 THE COURT: I don't know if they heard what it
6 is.
7 MR. TRABULUS: I think they did.
8 MR. WALLENSTEIN: White it out and call it
9 1404-B.
10 MR. WHITE: I can submit it to him under another
11 form if that's what you want.
12 THE COURT: Hand it to him under another form.
13 MR. TRABULUS: Thank you, Your Honor.
14 (End side bar.)
15 THE COURT: Are you withdrawing that document?
16 MR. WHITE: Yes, Your Honor.
17 BY MR. WHITE:
18 Q Okay, Mr. Rosenblatt, let me give you Exhibit 1404-C
19 which you can keep there for your reference.
20 Now, when we left off you told us that the
21 general ledger for Who's Who Worldwide for 1991 ended in
22 the month of July; is that right?
23 A Yes.
24 Q From the other books and records of the company for
25 that year, were you able to calculate a total amount of
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1971
Rosenblatt-direct/White
1 expenses that were charged to that loan account for 1991?
2 A Yes.
3 Q Can you tell us what that was?
4 A $145,499.
5 Q Now, if you could take a look at 658-B, what is that?
6 A The general ledger as of December 31, 1992 for Who's
7 Who Worldwide Registry, Inc.
8 THE COURT: Just one minute now.
9 This is the general ledger of Who's Who Worldwide
10 for what?
11 MR. WHITE: For 1992.
12 THE COURT: All right. You may proceed.
13 MR. WHITE: Your Honor, I have copies of the
14 relevant pages to hand to the jury.
15 THE COURT: It's in evidence, correct?
16 MR. WHITE: Yes.
17 THE COURT: Yes.
18 BY MR. WHITE:
19 Q Now, Mr. Rosenblatt, can you first tell us what
20 page --
21 THE COURT: Well, let's just wait for a couple of
22 minutes and let them get these things in their books, if
23 they want to do it.
24 Okay, you can proceed.
25 MR. WHITE: Thank you.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1972
Rosenblatt-direct/White
1 BY MR. WHITE:
2 Q Mr. Rosenblatt, can you tell us what page the loan
3 account is on that document?
4 A It starts on page 3 near the bottom. It is shown as
5 account number 1200. It should be all the way on the left
6 toward the bottom of the page.
7 Q And it's entitled "loans and
exchanges, BG."
8 A That's correct.
9 Q Have you done an analysis of the total expenses
10 charged to Mr. Gordon's loan account for that year?
11 A Yes, I have.
12 Q Can you tell us what that total is?
13 A The net increase in the account is $237,078.
14 Q Can you tell us what appeared in the credit column
15 for that year?
16 A On page 4 there is a couple of reclassification
17 entries.
18 Q And again tell us what a reclassification is?
19 A Where they took it out of the loan account and
20 charged it to something else, a different category of
21 expense, possibly.
22 Q Aside from reclassification, are there any other
23 credits to the loan account for this year?
24 A Yes. On August 31st, $1,992, there appears to be a
25 100 credit, cash received. It appears to be a health
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1973
Rosenblatt-direct/White
1 insurance reimbursement, I imagine. That is on page 5,
2 about a third of the way down.
3 Q The date is August 31, 1992?
4 A Yes.
5 Q Aside from reclassifications, are there any other
6 credits for that year?
7 A On page 6, November 30, 1992, there's another
8 insurance refund of 1,037.25, about a third of the way
9 down, page 6, under the credit column. On December 31,
10 1992, on the same page 6, there's a reduction of
11 313,086.20. And right below that also on December 31st
12 there appears to be another medical reimbursement of $148.
13 Q Now, let's focus for a moment on that $313,000
14 credit. Have you done an analysis of what constituted
15 that $313,000 credit?
16 A Yes.
17 Q Could you tell us what made up that credit?
18 A These were the two checks issued to Dr. Richard
19 Grossman for,
I believe, $156,500 and something, totaled
20 $313,086.20.
21 Q Can you explain how that transaction worked?
22 A Well, basically the loan account of Bruce Gordon is
23 being reduced by this amount that was paid to Dr. Grossman
24 and as I recall Dr. Grossman's testimony he indicate that
25 he loaned the money back to Who's Who to publish, I
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1974
Rosenblatt-direct/White
1 believe it was a new book or the magazine. I don't
2 exactly recall.
3 Q And when does that reflect that that entry was made?
4 A December 31, 1992.
5 Q And the total amount is $313,000?
6 A Right, yes.
7 Q Approximately.
8 Let me show you Exhibit 597 and 598-A which are
9 in evidence. Those are the checks from Dr. Grossman back
10 to Who's Who Worldwide, right?
11 A Yes, that's correct.
12 Q
And approximately how much do those add up to?
13 A 235,911.20.
14 Q When were those checks sent back to Who's Who
15 Worldwide?
16 A One check dated January 5th of 1993 for $200,000,
17 that's check number 3195. And there's a second check
18 dated January 25th of 1993, number 723, for $35,911.20.
19 Q So based on the documents and the testimony in the
20 checks, can you explain the transfers of money out to the
21 Grossmans and back to Who's Who and how that was treated
22 on the books?
23 A On the books of Who's Who?
24 Q Yes.
25 A $400,000 salary was paid to Dr. Grossman. Two checks
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1975
Rosenblatt-direct/White
1 are issued which was net of taxes of, I believe, federal
2 income taxes were withheld on it. They totaled $313,086.
3 Dr. Grossman, I believe, testified that he had
to
4 -- he was asked by Mr. Gordon to return the money to
5 assist in the publication of the Who's Who book and Mr. --
6 and Dr. Grossman prior to sending the money back had his
7 accountant figure out how much additional taxes were owed
8 on the money. And it turned out that he just returned the
9 239 -- $235,000 back to Who's Who.
10 Q And the 313 that was credited to the loan account,
11 was that done before or after Dr. Grossman sent back the
12 $235?
13 MR. TRABULUS: Objection to form, Your Honor.
14 THE COURT: Overruled.
15 A According to the general ledger it was credited to
16 Mr. Gordon's loan account, December 31, 1992 which would
17 be prior to the checks coming back.
18 Q Now, look at Exhibit 660.
19 What is 660?
20 A It's the general ledger for Who's Who Worldwide
21 Registry, Inc., as of December 31, 1993.
22 Q And can you tell
us what page Mr. Gordon's loan
23 account is on?
24 A It starts at the very bottom of page 3. It's
25 indicated as account number 1200, all the way on the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1976
Rosenblatt-direct/White
1 left-most column.
2 MR. WHITE: Okay. Your Honor, I'll hand out the
3 relevant pages to the jury.
4 THE COURT: Yes.
5 You say it starts at page 3?
6 THE WITNESS: Very bottom, about the fifth line
7 up from the bottom.
8 BY MR. WHITE:
9 Q So on page 3 where it says "loans and exchanges, BG,"
10 is that where it begins?
11 A Yes.
12 Q Now, have you calculated what the total amount of
13 expenses charged to Mr. Gordon's personal loan account for
14 1993 was?
15 A Yes, I have.
16 Q Can you tell us what that is?
17 A $132,865.
18 Q Now, if you could look at
the last entry for the loan
19 account dated December 31, 1993. Do you see that?
20 A Yes, I do.
21 Q Could you tell us -- and that's a credit; is that
22 correct?
23 A That's correct.
24 Q Tell us what that is?
25 A There's a credit amount of $22,920.69 which the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1977
Rosenblatt-direct/White
1 description of the entry is "partial payment of loan for
2 M. Reffsin, from PR BG."
3 Q Now, can you tell us what that refers to?
4 A That would indicate an amount being taken out of the
5 loan account being charged to his payroll to his salary.
6 Q So in other words, money that went to Mr. Gordon and
7 rather than calling it a loan, they are calling it a
8 salary?
9 A That's correct.
10 THE COURT: Hold it a minute, please.
11 Excuse me a minute. Come up, Counsel.
12 (An unrelated matter was taken by the Court.)
13 THE COURT: You may proceed, Mr. White.
14 BY MR. WHITE:
15 Q Now, Mr. Rosenblatt, if you could turn to page 27 of
16 that which is not in the jurors' handout --
17 A Yes.
18 Q -- And if you look under account 7210, it's entitled
19 "payroll officer." Do you see that?
20 A Yes, I do.
21 Q If you look at the last entry for December 31, 1993,
22 can you tell us what that is?
23 A A deduction is taken for -- the account of the
24 payroll to officer account is increased by 41,430.30.
25 Q And in layman's terms, what does that mean?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1978
Rosenblatt-direct/White
1 A Salary to the officer.
2 Q And that increase is on what date?
3 A December 31, 1993.
4 Q Let me show you Exhibit 796-A through H.
5 Now, what are those?
6 A (Perusing.) 796-A is the cash disbursements journal
7 for Who's Who Worldwide Registry for the month of January
8 of 1994.
9 796-B is the cash disbursement journal for Who's
10 Who Worldwide Registry for the month of February of 1994.
11 Q Without going through all of them, if you could page
12 through them all and tell us what period it covers.
13 A (Perusing.) It starts on January 1, 1994 on Exhibit
14 796-A and goes through August 31, 1994 on 796-H.
15 Q Do the books on Who's Who Worldwide reflect the loan
16 accounts for Mr. Gordon in 1994?
17 A Yes.
18 Q Have you made -- are the credits and debits to the
19 loan account all located in one document for that year for
20 that company?
21 A No, they are not.
22 Q Have you prepared or reviewed a summary of all the
23 various accounting entries related to that loan account
24 for that
year?
25 A Yes, I have.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1979
Rosenblatt-direct/White
1 Q Let me show you Government's Exhibit 1500 for
2 Identification.
3 What is that?
4 A This is a summary of the loan account at Who's Who
5 Worldwide for Bruce Gordon for the 1994 year.
6 MR. WHITE: Your Honor, the government offers
7 Exhibit 1500.
8 THE COURT: Any objection?
9 MR. TRABULUS: Bear with me for a moment. This
10 was just given to me this morning, Your Honor, and I would
11 just like to check through this one.
12 THE COURT: Very well.
13 MR. TRABULUS: No, I have no objection.
14 THE COURT: Government's Exhibit 1500 in
15 evidence.
16 (Government's Exhibit 1500 received in evidence.)
17 MR. WHITE: Your Honor, I don't mean to delay
18 things but there is an issue we need to discuss briefly at
19 the side bar, just a follow-up to what we discussed
20 previously.
21 THE COURT: Very well. Come up.
22 (Side bar.)
23 MR. WHITE: Your Honor, the issue is 1500 is
24 first in a packet of charts and summaries that we have and
25 in light of our discussion before some of them contain the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1980
Rosenblatt-direct/White
1 language "taxable income," so I just wanted some guidance
2 how you want me to handle it.
3 THE COURT: Well, take them off. Remove it,
4 delete it.
5 MR. WHITE: I'll have to cross them out.
6 THE COURT: Cross them out, make sure they are
7 not legible.
8 MR. WALLENSTEIN: Are these published to the
9 jury?
10 THE COURT: Not yet.
11 MR. WHITE: Okay. I will have to sit down and
12 cross them out.
13 THE COURT: Have somebody else do it. You have
14 all of these people there.
15 MR. WHITE: Okay.
16 (End side bar.)
17 MR. WHITE: Okay.
18 Your Honor, may I hand out Exhibit 1500 to the
19 jury?
20 THE COURT: Yes.
21 BY MR. WHITE:
22 Q Now, can you tell us what sort of items were charged
23 to Mr. Gordon's loan account for 1992 Who's Who Worldwide
24 for 1984?
25 A Some insurance policies, American Express bills, car
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1981
Rosenblatt-direct/White
1 payments for 1994.
2 Q Now, have you calculated the total amount of expenses
3 charged to this account for 1994?
4 A Yes.
5 Q Can you tell us what that is?
6 A $141,025.
7 Q Can you tell us what is the last date on which
8 something is charged to the loan account for Worldwide in
9 this year?
10 A 6/30/94. Actually that is a journal entry. Do you
11 mean the last item specifically that was paid?
12 Q Yes.
13 A March 31, 1994.
14 Q Now, for this year 1994, were there any repayments of
15 the loan showed on the books?
16 A Yes.
17 Q When was that?
18 A On April 30th of 1994 there is a repayment of
19 $20,000.
20 Q Now, at the time that the $20,000 was repaid, can you
21 tell us approximately how much was owed?
22 A The balance of the account appears to have been in
23 the area of $300,000.
24 Q Now, let me show you Exhibit 772 --
25 THE COURT: Let me ask you this, Mr. Rosenblatt,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1982
Rosenblatt-direct/White
1 these amounts that were in the Bruce Gordon loan account
2 for the various years, are they cumulative?
3 THE WITNESS: Yes.
4 THE COURT: So if in 1992
it is 237,000 and in
5 1993 it is 132,000, the loan would be 132,000?
6 THE WITNESS: No, in 1992, I added back the
7 313,000 loan account because that was not a repayment by
8 Mr. Gordon.
9 THE COURT: However, leaving the credits or
10 repayments out of this discussion, in these books is it
11 cumulative?
12 THE WITNESS: Yes.
13 THE COURT: I mean, it is not $100,000, for
14 example, in 1992 and another $100,000 in 1993, that would
15 be 200,000.
16 THE WITNESS: You don't start from zero each
17 year, it's a running balance.
18 THE COURT: All right. Okay.
19 BY MR. WHITE:
20 Q Well, just to clarify that point. Can you tell us
21 year-by-year what the expenses were charged in that year,
22 starting in 1991 through 1994.
23 A In 1991 it was $145,499. In 1992, $237,078.
24 Q Let me stop you there.
25 So to get the cumulative figure would you add the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1983
Rosenblatt-direct/White
1 '92 figure to the '91 figure?
2 A That's correct.
3 THE COURT: Well, I don't understand that.
4 In 1991, the loans were 145,000, I'm rounding
5 them off.
6 THE WITNESS: Right.
7 MR. WALLENSTEIN: I'm sorry, Your Honor, I can't
8 hear you.
9 THE COURT: In 1991 the loans were $145,000,
10 approximately; is that correct?
11 THE WITNESS: That's correct.
12 THE COURT: In 1992 the loans were 237,000
13 approximately, correct?
14 THE WITNESS: Yes.
15 THE COURT: Is that 145,000 plus another $237,00?
16 THE WITNESS: The balance at the end would be the
17 total of the two.
18 THE COURT: I don't understand.
19 THE WITNESS: They would be added together, yes.
20 At the end of '92 the loans were a total of 145,000 and
21 $237,000.
22 THE COURT: So that each year's loans are
23 separate and independent, additional monies?
24 THE WITNESS: Additional monies that came out in
25 that year through Bruce Gordon.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1984
Rosenblatt-direct/White
1 THE COURT: So it would be $145,000 loaned in
2 1991, and another $237,000 loan in 1992?
3 THE WITNESS: Correct.
4 THE COURT: And another 232,000 loan in 1993, and
5 another 141,000 loaned in 1994?
6 THE WITNESS: That's correct.
7 MR. WHITE: Thank you, Your Honor.
8 BY MR. WHITE:
9 Q Now, we were discussing the April 30, 1994
10 repayment. Let me show you Exhibit 772.
11 What is that?
12 A That's a check from Bruce Gordon date April 27, 1994
13 to Who's Who Worldwide Registry, Inc. for $20,000, and it
14 is drawn on his account at Sterling National Bank.
15 Q Now, let me show you the following Government's
16 Exhibit, 716, 720, 768 and 715, which are bank records.
17 Now, have you analyzed from where the money for
18 that loan repayment came from?
19 A Yes, I have.
20 Q And can you tell us where it came from?
21 A The check was drawn on the Registry Publishing
22 account at Sterling National Bank on April 25th -- I'm
23 sorry, April 22nd is the date of the check of 1994 in the
24 amount of $25,000 to Bruce Gordon.
25 Q So $25,000 from Registry Publishing to Mr. Gordon?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1985
Rosenblatt-direct/White
1 A That's correct.
2 Q What happens after that?
3 A That $25,000 check was deposited into Bruce Gordon's
4 account at Sterling National Bank, account number
5 0357971607.
6 Q And what happened to it after that?
7 A After that Mr. Gordon drew the check for $20,000 to
8 repay Who's Who Worldwide.
9 MR. WHITE: Your Honor, we are just trying to fix
10 the problem that we mentioned before.
11 THE COURT: Very well.
12 BY MR. WHITE:
13 Q Now, besides Who's Who Worldwide, did any other
14 corporations pay expenses of Mr. Gordon's?
15 A Yes, they did.
16 Q When did this begin?
17 A It began in 1994.
18 Q Now, did Mr. Gordon -- have you reviewed the books
19 and records of Sterling Who's Who?
20 A Yes.
21 Q Did Mr. Gordon have a loan account at Sterling Who's
22 Who for 1994?
23 A Yes, he did.
24 Q Now, again, are all the accounting entries for that
25 loan account contained in just one document?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1986
Rosenblatt-direct/White
1 A No, they were not.
2 Q Have you prepared an analysis of all the accounting
3 entries related to the loan account for Sterling for 1994?
4 A Yes.
5 Q Let me show you Government's Exhibit 1501, and what
6 is that?
7 A This is an analysis of the loan account to Bruce
8 Gordon and Sterling Who's Who for the period January 1,
9 1994 through November 30, 1994.
10 MR. WHITE: Your Honor, if I can just speak to
11 counsel for a minute.
12 THE COURT: Yes.
13 (Counsel confer.)
14 MR. WHITE: Your Honor, the government would
15 offer Exhibit 1501.
16 THE COURT: Any objection?
17 MR. WALLENSTEIN: No, Your Honor.
18 MR. TRABULUS: No, Your Honor.
19 THE COURT: Government's Exhibit 1501 in
20 evidence.
21 (Government's Exhibit 1501 received in evidence.)
22 MR. WHITE: Your Honor, I would like to hand out
23 not just 1501 but the series of charts that are to come
24 for the jury to look at. At this point we'll just look at
25 1501.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1987
Rosenblatt-direct/White
1 THE COURT: These are not in evidence?
2 MR. WHITE: Not yet.
3 THE COURT: Well, how can you give them to the
4 jury unless there is a consent by counsel.
5 MR. WHITE: Do you want me to do it one by one?
6 THE COURT: Yes. Unless counsel consent to save
7 time.
8 Mr. White, do you want to speak to Mr. Trabulus
9 and Mr. Wallenstein?
10 (Counsel confer.)
11 MR. TRABULUS: Your Honor, if we can just have a
12 couple minutes, we might be able to expedite this.
13 THE COURT: Why don't we take a recess. How long
14 will it take?
15 MR. TRABULUS: Two minutes, maybe less.
16 THE COURT: We'll go with two minutes. I want to
17 tell you that I think the jury is very patient and you've
18 been following the testimony with close attention, even
19 though it is not easy and it is not very -- and sometimes
20 it is complex and involves terms you are not used to
21 dealing with, nor am I. But I've noticed that all of you
22 are listening extremely carefully and I'm very
23 appreciative of that because that's your role. That's
24 what you have to do even if all of it isn't as exciting
25 you see in the movies or on television, especially what's
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1988
Rosenblatt-direct/White
1 going on today -- that's another matter altogether I mean.
2 MR. TRABULUS: No objection.
3 MR. WALLENSTEIN: I have no objection, Your
4 Honor.
5 THE COURT: Thank you very much. You may give
6 out all the exhibits to the jury.
7 All right, it looks like you can proceed.
8 BY MR. WHITE:
9 Q Now, is 1501 the summary of your Sterling loan
10 account for 1994; is that right?
11 A Yes, it is.
12 Q Tell us first the total amount of expenses charged to
13 the loan accounts for that company for 1994?
14 A In round numbers, $106,846.
15 Q And can you tell us what month of 1994 those expenses
16 were first charged? What's the earliest one?
17 A The earliest item is March 12, 1994.
18 Q And can you tell us just in brief summary what sort
19 of expenses were paid out of that loan account?
20 A A lot of American Express, NY Star Leasing and
21 payments to Bruce Gordon.
22 Q Now, if you could look at the entry for November 29,
23 1994, a check to American Express.
24 Do you see that?
25 A Yes, I do.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1989
Rosenblatt-direct/White
1 Q If you look at the description there, can you tell us
2 how that check was treated in the books of the
3 corporation?
4 A The actual check amount was $11,670.83. Of that
5 amount $10,207.78 were charged to Bruce Gordon's loan
6 account. 364.33 was charged to entertainment expense, and
7 $1,098.45 were charged to travel expense.
8 Q And in layman's terms, what does that mean?
9 A In effect the American Express bill was part business
10 and part personal.
11 Q And the personal part was put in what account?
12 A The personal part was put in Bruce Gordon's loan
13 account. The expenses were put in their appropriate
14 categories.
15 Q Have you reviewed the books of a company called Who's
16 Who Executive Club?
17 A Yes.
18 Q Did Mr. Gordon have a loan account with that company
19 for 1994?
20 A I believe all I remember seeing from Who's Who
21 Executive Club were bank records and there were notations
22 on the check register and/or the checks of moneys that
23 were considered loans.
24 Q Let me show you Exhibit 1502.
25 Is that a summary of the expenses paid to the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1990
Rosenblatt-direct/White
1 Executive Club for that year?
2 A Yes.
3 MR. WHITE: The government offers 1502.
4 THE COURT: Any objection?
5 MR. TRABULUS: No objection.
6 THE COURT: Government's Exhibit 1502 in
7 evidence.
8 (Government's Exhibit 1502 received in evidence.)
9 BY MR. WHITE:
10 Q Now, can you tell us what items were paid for by
11 Who's Who Executive Club for Mr. Gordon in 1994?
12 A There's a large payment to American Express and there
13 are two checks drawn to Bruce Gordon.
14 Q And if you look at the entry
for 8/23/94, what is
15 that amount?
16 A $47,487.83.
17 Q And that is made payable to who?
18 A American Express.
19 Q And do you recollect from the testimony what sort of
20 charges were on the American Express bill at that time?
21 A That was the trip to Europe to I believe it was
22 France and Italy.
23 Q Now, if you look at the top entry for 8/16/94 in the
24 description column, can you tell us what that check said
25 on it?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1991
Rosenblatt-direct/White
1 A That check was payable to Bruce Gordon. It was
2 cashed and it was exchanged for a money order payable to
3 the IRS.
4 Q Now, does the IRS accept checks in payment of taxes?
5 A Yes.
6 Q Does it accept corporate checks in payment of taxes?
7 A Yes.
8 Q Tell us the total amount of expenses paid
for
9 Mr. Gordon by Who's Who Executive Club in 1994?
10 A $5,498,783.
11 Q Have you analyzed the bank records and books of a
12 company called Registry Publishing?
13 A Yes.
14 Q Did Registry Publishing pay expenses of Mr. Gordon in
15 1994?
16 A Yes, they did.
17 Q Take a look at Exhibit 1503 and tell me what that is
18 (handing)?
19 A This is a schedule of monies paid to or on behalf of
20 Bruce Gordon out of Registry Publishing.
21 MR. WHITE: Your Honor, we offer the Government's
22 Exhibit 1503.
23 THE COURT: Any objection.
24 MR. WALLENSTEIN: No objection.
25 THE COURT: Mr. Trabulus?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1992
Rosenblatt-direct/White
1 MR. TRABULUS: I said no objection. I'm sorry,
2 Your Honor.
3 THE COURT: Government's Exhibit 1503 in
4 evidence.
5 (Government's Exhibit 1503 received in evidence.)
6 BY MR. WHITE:
7 Q Mr. Rosenblatt, can you tell us what is the earliest
8 entry charged to the loan account for this year?
9 A March 25, 1994.
10 Q Now, if you look at the entry for 7/25/95 --
11 A Yes.
12 Q -- And the description, could you tell us what that
13 entry means?
14 A That should be 7/25/94.
15 Q Okay. And tell us what it refers to?
16 A It is a $4,000 check issued to Bruce Gordon.
17 Q And do the bank records indicate what it was for?
18 A Yes. I believe it was the check stub indicated that
19 it was to pay rent, April 1994.
20 Q And if you look down two entries to the one on June
21 1, 1994, what is that check for?
22 A You mean June 10, 1994?
23 Q I'm sorry, yes.
24 A Yes, that's the payment of $12,500 to Bruce Gordon
25 and that was to pay rent to Publishing Ventures.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1993
Rosenblatt-direct/White
1 Q And the October 17, 1994 entry?
2 A That's a $27,000 check to American Express.
3 Q And what does the check stub say it is for?
4 A It's for Bruce Gordon, personal.
5 Q Tell us the total amount of expenses Mr. Gordon's
6 paid by Registry Publishing in 1994?
7 A $74,815.83.
8 Q Now, have you calculated what the total amount of
9 personal expenses paid by all of these corporations for
10 Mr. Gordon in 1994 was?
11 A Yes.
12 Q What was it?
13 A $373,675.
14 Q Now, have you calculated the total amount of personal
15 expenses paid by all of these corporations for Mr. Gordon
16 between 1991 and 1994?
17 A I could add them up.
18 Q If you can give us a rough figure.
19 A Close to $900,000.
20 THE COURT: That's 1991 through 1993?
21 THE WITNESS: 1994.
22 THE COURT: Including 1994?
23 THE WITNESS: Right, four years.
24 THE COURT: The four years is what approximate
25 total?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1994
Rosenblatt-direct/White
1 THE WITNESS: Approximately $900,000.
2 BY MR. WHITE:
3 Q And putting aside the $313,000 credit related to the
4 Dr. Grossman money, putting that aside, could you tell us
5 how much Mr. Gordon repaid to any of these corporations
6 between 1991 and 1994?
7 A Well, there was a one entry of $20,000, however, we
8 saw that came from another corporation. But we are giving
9 him credit for it because we are charging it as a loan
10 from the other corporation as income.
11 Q Mr. Rosenblatt, let me show you Exhibit 430 through
12 482 in evidence which are American Express receipts for
13 Mr. Gordon between 1990 and 1995.
14 Have you reviewed those exhibits?
15 A Yes, I have.
16 Q And have you prepared a summary of the expenses and
17 the payments of that American Express account?
18 A Yes.
19 Q Let me show you Exhibit 1504-A through F and 1507-A
20 through G?
21 MR. WHITE: Your Honor, I misspoke before, it's
22 1507-A through H.
23 Q Now, have you reviewed that, Mr. Rosenblatt?
24 A Yes.
25 Q Let's start with 1504 and the letters following it.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1995
Rosenblatt-direct/White
1 What is 1504?
2 A 1504 is a summary of all the charges on the American
3 Express card from November of 1990 through March 21st of
4 1995.
5 Q And the first page of 1504 is a cumulative summary;
6 is that correct?
7 A A summary, yes.
8 Q And the letters that follow are for each year?
9 A That's correct.
10 Q And 1507 is what?
11 A 1507 are the payments that were made to American
12 Express.
13 Q And is there one for each year and company?
14 A Yes, there is.
15 MR. WHITE: Your Honor, the government offers
16 1504 inclusive and 1507 inclusive.
17 THE COURT: Any objection?
18 MR. TRABULUS: No.
19 MR. WALLENSTEIN: No.
20 THE COURT: 1504-A through F. 1507-A through H,
21 in evidence.
22 (Government's Exhibits 1504-A through F received
23 in evidence.)
24 (Government's Exhibits 1507-A through H received
25 in evidence.).
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1996
Rosenblatt-direct/White
1 BY MR. WHITE:
2 Q Now, if you can look at 1504 -- well, first of all,
3 the time periods by which you calculated the expenses are
4 not the calendar years; is that correct?
5 A That's correct.
6 Q Why did you do it that way?
7 A They go by the statement date so they would be easier
8 to follow.
9 Q Looking at 1504, have you categorized the various
10 types of expenses charged on the American Express card?
11 A Yes.
12 Q What different categories do you have there?
13 A We broke it up into restaurants is one. The second
14 one was clothing, jewelry and gifts. Third was artwork,
15 home furnishings, general merchandise, and the fourth
16 category was hotel and travel.
17 Q Tell us what the grand total of purchases on this
18 card from November of '90 through March of 1995 was.
19 A $411,853.29.
20 Q And can you tell us how much was charged in each of
21 those categories that you just described?
22 A Restaurants was $17,868.71.
23 Clothing, jewelry and gifts, $188,219.59.
24 The artwork category was $110,408.14.
25 Hotel and travel, $95,356.85.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1997
Rosenblatt-direct/White
1 Q Now, if you could go to 1507-A. And you said that
2 was the summary of how those bills were paid; is that
3 correct?
4 A That's correct.
5 Q Tell us for 1990 how was Mr. Gordon's American
6 Express paid?
7 A It was paid out of Who's Who Worldwide Registry and
8 it was charged to his loan account.
9 Q And if you look at 1507-B, and tell us from 1991 how
10 was Mr. Gordon's American Express paid?
11 A Also out of Who's Who Worldwide Registry and again
12 charged to his loan account.
13 Q Looking at 1507-C, can you tell us who paid
14 Mr. Gordon's American Express bill in 1992?
15 A It was again Who's Who Worldwide Registry, and of the
16 total, of the total of $52,552.91 in payments, $52,027.63
17 were charged to loan accounts, and $525.28 were charged to
18 another account we couldn't identify.
19 Q And 1507-D, that's the payment summary for 1993.
20 Can you tell us how much or how that was paid?
21 A It was also paid out of Who's Who Worldwide
22 Registry. The total of 119,314.36 was paid. Of that
23 amount $65,976.91 were charged to his loan account,
24 $41,184.60 were charged to travel expense, $11,993.85 was
25 charged to American Express expense, and $159 was charged
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1998
Rosenblatt-direct/White
1 to computer supplies expense.
2 Q Now, the last three categories you mentioned, what
3 type of expenses are those -- what type of accounts are
4 those?
5 A Those are expenses claimed by the corporation to
6 reduce its income.
7
Q Now, if you look at 1507-E through H, does that cover
8 the payments for 1994?
9 A Yes, they do.
10 Q Now, why is it broken up into four pages?
11 A Well, because different companies were paying the
12 American Express bills in 1994.
13 Q Let's start with 1507-E.
14 How much -- what is the total charges paid by
15 Who's Who Worldwide to American Express in 1994?
16 A $18,003.83.
17 Q How much of that was charged to Mr. Gordon's loan
18 account?
19 A $4,462.98.
20 Q What is the date of the payment by Who's Who
21 Worldwide to American Express?
22 A February 28th of 1994.
23 Q Now, did Sterling Who's Who pay any of his Amex bills
24 in 1994?
25 A Sterling Who's Who, yes, that would be Exhibit
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
1999
Rosenblatt-direct/White
1 1507-F.
2 Q How much
did they pay?
3 A $61,481.74.
4 Q How much was charged to his loan account?
5 A $60,018.69.
6 Q Now, look at 1507-G.
7 Did Who's Who Executive Club pay his American
8 Express bills in '94?
9 A Yes, they paid one bill.
10 Q How much was it?
11 A $47,487.83.
12 Q And what part of that was charged as a loan to
13 Mr. Gordon?
14 A The entire amount.
15 Q And look at 1507-H.
16 Did Registry Publishing pay any of his American
17 Express bills in '94?
18 A Yes.
19 Q How much?
20 A $27,315.83.
21 Q How much of it was charged as a loan to Mr. Gordon?
22 A The entire amount.
23 MR. WHITE: Your Honor, this would be a
24 convenient time to break if you want.
25 THE COURT: Members of the jury, we'll take a
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2000
Rosenblatt-direct/White
1 ten-minute recess. Please don't discuss the case. Please
2 keep an open mind.
3 Please recess yourselves.
4 (Jury exits.)
5 (Recess taken.)
6 (Jury enters.)
7 BY MR. WHITE:
8 Q Mr. Rosenblatt, could you go back to 1504-B, as in
9 Boy, and those are the charges to the American Express
10 account for December 1990 through December of 1991, right?
11 A Yes.
12 Q And if you look on the second and third pages of that
13 exhibit, there are certain entries that are shaded. Can
14 you tell us why they are shaded?
15 A They were shaded to highlight them because that is
16 around on or about the time that one of the Form 433s was
17 submitted to the collection division.
18 Q Of the IRS?
19 A Of the IRS.
20 Q Let me show you Government's Exhibit 404 which is in
21 evidence.
22 THE COURT: Just one minute now, please.
23 MR. TRABULUS: Your Honor, may I just have a
24 moment?
25 THE COURT: Yes. I've asked for the same moment,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2001
Rosenblatt-direct/White
1 so it's all right.
2 MR. TRABULUS: That's Exhibit 404?
3 MR. WHITE: Yes, 404.
4 THE COURT: You may proceed.
5 MR. WHITE: If I may put up the enlargement of
6 Exhibit 404 for the jury to read.
7 THE COURT: Now, what is 404 again?
8 MR. WHITE: It is the September 16, 1991
9 collection information statement filed by Mr. Gordon.
10 BY MR. WHITE:
11 Q Now, the Form 433 is September 16, 1991, so the
12 shaded period covers what time period in relation to the
13 form?
14 A From approximately a month before to a month after.
15 Q Now, if you could look at box 22 which is on page 2
16 of the form, does it disclose there that Mr. Gordon had an
17 American Express card?
18 A No.
19 Q From your review of the records in evidence in the
20 case, did he have an American Express card at that time?
21 A Yes, he did.
22 Q And if you look at page 3, are there liabilities
23 listed there for Mr. Gordon?
24 A Yes, there are. You are referring to line 35?
25 Q Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2002
Rosenblatt-direct/White
1 A Yes.
2 Q Are any of the loans from Who's Who Worldwide that
3 you've discussed this morning listed on that form?
4 A Yes.
5 Q Now, at this point in time in September of 1991, can
6 you compare the size of his debt of his loan to the
7 company Who's Who relative to the debts that are listed on
8 this form?
9 A (Perusing.) I don't know what exhibit it is for the
10 loan account for 1991.
11 Q (Handing.) It should be on the summary chart you are
12 using for your reference to 1404-C; is that correct?
13 A Well, the total amount of payments made in 1991 is on
14 that form.
15 Q Tell us what that is.
16 A Approximately $145,000.
17 Q And would that be more or less than all but one of
18 the liabilities listed on this form?
19 A It would be all but one. The only larger would be a
20 Bank of New York for $275,000.
21 Q Look at page 4 where it says necessary living
22 expenses, lines 49 through 59.
23 A Yes.
24 Q Tell us what Mr. Gordon said his total monthly
25 expenses were.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2003
Rosenblatt-direct/White
1 MR. TRABULUS: Objection, Your Honor. It says
2 "necessary living expenses." He's characterizing it as
3 to total monthly expenses.
4 THE COURT: Yes, sustained.
5 BY MR. WHITE:
6 Q Tell us what Mr. Gordon lists there under necessary
7 monthly expenses?
8 A To break it up or just the total?
9 Q Just the total.
10 A $3,385.
11 Q And that's in lines 49 through 57, it is broken down
12 into categories, is that right, of types of expenses?
13 A Yes.
14 Q And line 58 which reads "other expenses," can you
15 tell us what that total is?
16 A $175.
17 Q Now, go back to Exhibit 1504-B, just a summary of
18 American Express charges. Tell us what or how much
19 Mr. Gordon charges on his American Express between August
20 and October of 1991.
21 A Approximately $9,000 is in the shaded area.
22 Q Let me show you Exhibit 402 in evidence, that is an
23 installment agreement between Mr. Gordon and the IRS.
24 What is the date of that agreement?
25 A September 24, 1991.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2004
Rosenblatt-direct/White
1 Q And how many days after this collection information
2 statement is that?
3 A Eight days.
4 Q Now, take a look at 1504-B and tell us in those days
5 between September 16th and September 24th how much
6 Mr. Gordon spent on clothing?
7 A Approximately $3,500.
8 Q That's in eight days, correct?
9 A Well, the American Express charges are all on
10 September 20th and 21st.
11 Q And how does that compare -- that's just for
12 clothing, correct?
13 A That's correct.
14 Q How does that compare to the total necessary living
15 expenses for the entire month listed on this form?
16 A It's higher.
17 Q Let me show you Exhibit 405.
18 Now, 405 is the collection information statement?
19 A Yes.
20 Q And what is it dated?
21 A
July 8, 1993.
22 Q And if you could look at the top of page 2, box 14,
23 is there an American Express gold card account listed
24 there?
25 A No.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2005
Rosenblatt-direct/White
1 Q From your review of the exhibits in evidence, did
2 Mr. Gordon have an American Express gold account in July
3 of 1993?
4 A Yes, he did.
5 Q If you take a look at box 28 where it says
6 liabilities, are any loans from Who's Who Worldwide listed
7 there?
8 A No.
9 Q From your review of the exhibits in evidence, were --
10 did Mr. Gordon have a loan account with Who's Who
11 Worldwide at this time?
12 A Yes, he did.
13 Q Can you give us an approximate figure of how much in
14 expenses had been charged to the loan account by that
15 time?
16 A Just in that year?
17 Q No, cumulative.
18 A I would have to see the loan account for 1993.
19 Q Well, let me show you Exhibit 660 which I think is
20 what you're looking for for 1993.
21 A Yes. (Perusing.) The balance in the loan account as
22 of July 19, 1993, according to Exhibit 660, is
23 $200,395.65.
24 Q And that is not listed on this form, is it?
25 A No.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2006
Rosenblatt-direct/White
1 Q Now, if you look at the last page where it says
2 "necessary living expenses," could you tell us what the
3 total monthly necessary living expenses listed there is?
4 A $2,520.
5 Q And if you could turn to Exhibit 1504-D, and look on
6 page 2, the shaded portion. The shaded portion covers
7 what time period relative to July of 1993?
8 A It starts May 22nd which would be approximately six
9 weeks before and goes through September 19th which is
10 approximately two months after.
11 Q Okay.
12 And tell us approximately how much was charged on
13 Mr. Gordon's American Express account for that period?
14 A Approximately $36,000.
15 Q Let me show you Exhibit 420. That's an offer and
16 compromise submitted by Mr. Gordon and Mr. Reffsin in July
17 of 1993, correct?
18 A It looks like it is dated August 9th of 1993.
19 Q Would you look on the top of page 420. The date on
20 the cover letter says what?
21 A July 27, 1993.
22 Q Now, if you can follow along while I read from the
23 last two lines of page 1. It says "the offer presented is
24 based on the sum of money which he feels he can borrow.
25 He has no other assets."
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2007
Rosenblatt-direct/White
1 Now, if you turn two pages onto 420-A, can you
2 tell us what the sum of money offered is?
3 A $150,000.
4 Q Now, in July of 1993, can you tell us how much
5 Mr. Gordon had actually borrowed from Who's Who Worldwide?
6 A It was approximately 200,000, I think it is.
7 Q Now, if you can turn to 420-E. That's a projection
8 of income and expenses, correct?
9 A Yes.
10 Q And are any loans from Who's Who Worldwide listed
11 there?
12 A No.
13 Q And for the income portion, does it indicate anywhere
14 that Mr. Gordon would be receiving sufficient amounts to
15 offset the amounts in his loan account?
16 A No.
17 Q Based upon this schedule 420-E, is the amount of
18 money that Mr. Gordon projects he will earn sufficient to
19 cover his then disclosed liability?
20 A Are you talking about the three-and-a-half million?
21 Q No. Let me rephrase the question.
22 On this schedule based on the projected income,
23 is that going to be sufficient to pay the liabilities that
24 are listed here?
25 MR. TRABULUS: Objection, Your Honor.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2008
Rosenblatt-direct/White
1 THE COURT: Overruled.
2 A The liabilities listed on this form?
3 Q Yes.
4 A On this -- (perusing.) I don't know if I understand
5 your question.
6 Q Then I'll rephrase it.
7 Let's move onto something else.
8 Take a look at Exhibit 406. That's a December
9 1993 collection information statement.
10 Again, if you look at page 2, box 14, is there an
11 American Express gold card listed there?
12 A No.
13 Q From your review of the exhibits in evidence, did
14 Mr. Gordon have an American Express gold card at this
15 time?
16 A Yes.
17 Q And box 28 on page 3, are any loans from Who's Who
18 Worldwide listed on that form?
19 A No.
20 Q And the necessary living expenses for 1994, can you
21 tell us what those approximately add up to?
22 A About $5,200.
23 Q And if you could look at the last one, I'll read it,
24 it says box 51 "other expenses, specify." "Clothes,
25 cleaning, etcetera, $200 per month." Is that right?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2009
Rosenblatt-direct/White
1 A Yes.
2 Q Let me show you Exhibit 824 which is already in
3 evidence. For 1994 -- and if you can't see that you may
4 step down -- starting with the month of June 1994, one
5 month prior to the filling out of this collection
6 information statement, could you just read the monthly
7 charges for us.
8 A Starting with June?
9 Q Yes.
10 A June is $3,012.91.
11 July is $47,392.51.
12 August, $9,614.10.
13 September, $27,215.83.
14 October, $12,270.83.
15 November, $18,042.43.
16 And December, $10,427.30.
17 Q Tell us the total amount charged in 1994 on the
18 chart?
19 A Approximately $183,000.
20 Q If you can look at the binder at Exhibits 474 and 475
21 in front of you.
22 A I have it.
23 Q And if you could just review the expenses charged to
24 Mr. Gordon's portion of this account for this time period,
25 and tell us what they reflect?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2010
Rosenblatt-direct/White
1 A (Perusing.) They reflect the expenses in Paris,
2 Italy, there's Bloomingdale's, New York, in Manhattan, I
3 guess, Park Avenue Cafe in New York, and then it appears
4 to be all other charges in Paris and in Italy.
5 Q And if you
could look on page 2 of that, the entry
6 for -- entry number 36. Does that indicate a charge at
7 the Ritz in Paris?
8 A Yes, it does.
9 Q And if you look on 475, where are the charges
10 originating from in that month?
11 A Starts off in Italy and then there's a couple of
12 restaurants in Manhattan, and other items in the local
13 area.
14 Q Now, Mr. Rosenblatt, let me show you Exhibit 421.
15 Now, 421 is a letter from Frank Gagliardi, IRS
16 revenue officer to Mr. Gordon in care of Mr. Reffsin on
17 November 24, 1993.
18 Do you see that, Mr. Rosenblatt?
19 A Yes, I do.
20 Q And from reviewing the letter, does it request
21 certain categories of information?
22 A Yes, it does.
23 Q And let me also show you Exhibit 423 which were the
24 documents provided in response to 421.
25 Now, Mr. Rosenblatt --
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2011
Rosenblatt-direct/White
1 MR. WHITE: Actually, Your Honor, I apologize,
2 there was an exhibit I didn't mark which I should have
3 which would not be comprehendible to the jury unless we do
4 that.
5 THE COURT: Go ahead.
6 MR. WHITE: But I have to make a copy. I have
7 one unfortunately. I apologize. I got mixed up with the
8 changing of all the other exhibits.
9 Can we take five minutes to do that?
10 THE COURT: Yes.
11 MR. WHITE: Thank you, Judge.
12 THE COURT: All right. Members of the jury,
13 we'll take a five-minute recess.
14 Please don't discuss the case. Keep an open
15 mind.
16 (Recess taken.)
17 THE COURT: You may proceed.
18 MR. WHITE: Your Honor, I believe there's an
19 issue with respect to the document that we want to offer.
20 MR. TRABULUS: Yes, there
is, Your Honor, we
21 object to 1508.
22 THE COURT: May I see it?
23 MR. TRABULUS: May we approach, Your Honor?
24 THE COURT: All right. Come up.
25 (Side bar.)
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2012
Rosenblatt-direct/White
1 MR. TRABULUS: The objection I have is "response
2 of Bruce Gordon and Martin Reffsin." It simply should say
3 "response." This was submitted by Mr. Reffsin. It's
4 true it is admissible against Mr. Gordon in several
5 different aspects because Mr. Reffsin signed the power of
6 attorneys, the exception could be it is admissible. But
7 to say it is responsive to Bruce Gordon to call it a
8 "response" suggests that Mr. Gordon saw it or was
9 involved in its preparation. There is no evidence that he
10 was, and the solution is to simply call it the response to
11 IRS revenue officer.
12 MR. WALLENSTEIN: My objection is the converse of
13 that. Mr. Reffsin acted as Mr. Gordon's attorney in fact
14 under the circumstances, it's not attributable to him, but
15 to Mr. Gordon. I agree with Mr. Trabulus we should take
16 out the names and simply label it "response."
17 THE COURT: Is this of the collection statement
18 sent in response to the letter?
19 MR. WALLENSTEIN: This is something that
20 Mr. Rosenblatt sent.
21 MR. WHITE: This response en toto included the
22 last collection information statement we just looked at.
23 THE COURT: What else did it include?
24 MR. WHITE: I think it is in Exhibit 425, bank
25 statements and various other things.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2013
Rosenblatt-direct/White
1 MR. TRABULUS: This is a summary.
2 MR. WALLENSTEIN: Mr. Gagliardi sent a letter.
3 This is what we got and didn't get.
4 THE COURT: Excuse me. Take out "Bruce Gordon
5 and Martin Reffsin, response to IRS revenue officer".
6 MR. WHITE: We already redacted it that way.
7 THE COURT: Good thinking.
8 MR. TRABULUS: At our suggestion.
9 (End side bar.)
10 THE COURT: You may proceed in the short time we
11 have before lunch.
12 MR. WHITE: I'm sorry, Your Honor.
13 BY MR. WHITE:
14 Q Mr. Rosenblatt, let me show you Exhibit 1508.
15 Did you prepare an analysis of some of the items
16 that were provided to Mr. Gagliardi in response to this
17 letter?
18 A I compared the items that were requested, the items
19 that were provided.
20 Q And does Exhibit 1508 summarize the response with
21 respect to certain item numbers on Mr. Gagliardi's letter?
22 A Yes.
23 MR. WHITE: Your Honor, the Government offers
24 Exhibit 1508.
25 THE COURT: Any objection?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2014
Rosenblatt-direct/White
1 MR. TRABULUS: No, based on our conference, no.
2 MR. WALLENSTEIN: No, Your Honor.
3 THE COURT: Exhibit 1508 in evidence.
4 (Government's Exhibit 1508 received in evidence.)
5 MR. WHITE: If I may hand it up to the jury, Your
6 Honor.
7 THE COURT: Yes.
8 BY MR. WHITE:
9 Q Now, Mr. Rosenblatt, I'll read from Exhibit 421 which
10 is the request by Mr. Gagliardi and it begins with number
11 3.
12 "Original cancelled checks and bank statements
13 for all accounts which you are a signatory for the months
14 of April, May, June, July, August, September and October
15 of 1993."
16 Now, can you tell us what items were provided in
17 response to that request?
18 A That would basically be Exhibit 423-F which were
19 checking account statements -- actually F through L.
20 Q And what are those exhibits?
21 A Which are checking account statements and cancelled
22 checks for Bruce Gordon's account for National Westminster
23 Bank.
24 Q Have you reviewed bank records of other corporations
25 in connection with this case?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2015
Rosenblatt-direct/White
1 A Yes, I have.
2 Q Now, were there other accounts upon which -- for
3 which Mr. Gordon was a signatory at this time period,
4 after November of 1993?
5 A Yes.
6 Q Could you tell us what they were?
7 A They were the Who's Who Worldwide Registry account at
8 European American Bank, NatWest bank account for Registry
9 Publishing, and a NatWest bank account for Publishing
10 Ventures, Inc.
11 Q Now, were the statements and
checks for the accounts
12 of Who's Who Worldwide that Mr. Gordon was a signatory on
13 provided to Mr. Gagliardi in response to this letter?
14 A No.
15 Q Were the checks and statements for Registry
16 Publishing account for which he was a signatory provided
17 to Mr. Gagliardi in response to this letter?
18 A No.
19 Q Were the checks and the statements for the Publishing
20 Ventures account on which he was a signatory provided to
21 Mr. Gagliardi in response to this letter?
22 A No.
23 Q Let me read item six that Mr. Gagliardi requests.
24 "Verification of all monthly payments if not
25 paid by your personal check."
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2016
Rosenblatt-direct/White
1 Now, did you review the response to see if there
2 was anything responsive to that request?
3 A There was nothing provided
with reference to that
4 question.
5 Q And from your review of the exhibits at the trial,
6 were there other monthly payments of Mr. Gordon's that
7 were not paid by his personal check?
8 Yes?
9 A Yes.
10 Q Tell us what some of those were?
11 A Payments out of Who's Who Worldwide Registry and by
12 Publishing Ventures, Inc.
13 Q And for what kind of things?
14 A All personal items.
15 Q Let me read request number nine from Mr. Gagliardi's
16 letter.
17 "Copies of all motor vehicle registrations,
18 title certificates or leasing agreements for vehicles you
19 own or operate."
20 Now, reviewing the response, did Mr. Gordon or
21 Mr. Reffsin provide any information with respect to that
22 request?
23 A No, nothing was provided.
24 Q And from your review of the documents in connection
25 with this case, were there any
documents that would fit
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2017
Rosenblatt-direct/White
1 that request?
2 A Yes.
3 Q And tell us what they were?
4 A They were car leases. At least one car lease.
5 Q For what kind of car?
6 A A BMW.
7 Q And were any documents with respect to the leasing of
8 that BMW provided provided to Mr. Gagliardi in response to
9 this letter?
10 A No.
11 Q Let me read from request number ten of
12 Mr. Gagliardi's letter.
13 "All medical and dental bills you have paid
14 during the past six months."
15 Now, were any medical or dental bills provided in
16 response to Mr. Gagliardi's letter?
17 A No.
18 Q And from your review of the documents in this case,
19 were there medical and dental bills paid for Mr. Gordon
20 that were responsive to this request?
21 A Yes.
22 Q And tell us what they were?
23 A They were payments out of Who's Who Worldwide
24 Registry to Dr. Fishman and Dr. Kaufman for dental
25 expenses.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2018
Rosenblatt-direct/White
1 Q Now, Mr. Rosenblatt, let me show you 424 and 425.
2 And let me read from a portion of 424.
3 This is a letter from Frank Gagliardi, Internal
4 Revenue Service, revenue officer, on February 17, 1994,
5 addressed to Bruce Gordon, care of Martin Reffsin.
6 The second paragraph indicates "my review of your
7 checking records discovered several unexplained items,
8 including abnormal deposits totaling $15,000 in July of
9 1993 and $10,613.52 in October of 1993. Please explain
10 the source of these funds. In addition, there are
11 likewise abnormal debits during these periods. Please
12
explain these expenditures."
13 Now, Mr. Rosenblatt, if you would look at 425.
14 I'll read a portion of that.
15 That's a letter from Mr. Reffsin to Mr. Gagliardi
16 which is undated.
17 It says "pursuant to your request I have attached
18 the following information for your file.
19 One, copy of note that Mr. Gordon signed to Joyce
20 Grossman for $15,000. Copy of note signed to Madeline
21 Middlemark for $10,000."
22 And then I'll skip down to the next paragraph.
23 "You indicated that you wanted an explanation of
24 extra checks that were disbursed by Mr. Gordon in July and
25 October 1993. Unfortunately, Mr. Gordon's son died
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2019
Rosenblatt-direct/White
1 unexpectedly in July of 1993 and the checks you saw were
2 payments for the funeral. The son died while he was
3 residing in Florida and Mr. Gordon had to pay for the body
4 to be flown up from New York as well as the funeral
5 costs. He borrowed the money from Joyce Grossman.
6 The checks in October were to pay for medical
7 costs incurred by Mr. Gordon's wife. He owes his wife
8 substantial back alimony and he borrowed the money in
9 October from Madeline Middlemark to pay his wife."
10 Then you see Exhibit 425-A, Mr. Rosenblatt. What
11 is that?
12 A It's a promissory note for $15,000 between Bruce
13 Gordon and Joyce Grossman.
14 Q And can you tell us what Ms. Grossman's testimony was
15 with respect to that promissory note?
16 A She said she never made such a loan.
17 Q Now, looking at the bank records that reflect the
18 income that Mr. Gagliardi questioned, have you analyzed
19 where that $15,000 came from?
20 A Yes.
21 Q Where did it come from?
22 A It came from Who's Who Worldwide Registry.
23 Q Let me show you Government's Exhibit 764 and 765.
24 Can you tell me what those are?
25 A They are debit advices from National Westminster
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2020
Rosenblatt-direct/White
1 Bank.
2 764 is for $10,000, dated July 30, 1993. And 765
3 is $5,000, dated August 3, 1993.
4 Q And explain for us what a debit advice is?
5 A A debit advice shows that instead of issuing a check,
6 the bank is taking money out of one account and they are
7 telling you where it's going.
8 Q And in this case who are they telling where it is
9 going? Whose account is the money coming out of?
10 A It's coming out of Who's Who Worldwide Registry, Inc.
11 Q And have you reviewed Mr. Gordon's personal bank
12 statements for the relevant period?
13 A Yes.
14 Q And
what do they reflect?
15 A They reflect deposits for the same amounts.
16 THE COURT: All right. Is this a good time to
17 take a break, Mr. White?
18 MR. WHITE: Yes, Your Honor.
19 THE COURT: Members of the jury, we'll recess for
20 lunch. Please don't discuss the case. Keep an open
21 mind. Come to no conclusions.
22 We'll recess until 1:30.
23 Have a nice lunch.
24 (Luncheon recess taken.)
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2021
Rosenblatt-direct/White
1 A F T E R N O O N S E S S I O N
2
3 (Whereupon, the following takes place in the
4 absence of the jury.)
5 THE COURT: Is this witness leaving at 3:00
6 o'clock?
7 THE WITNESS: Yes.
8 THE COURT: What are you doing after 3:00?
9 MR. WHITE: We are calling another witness, one
10 of the people I mentioned yesterday.
11 THE CLERK: Jury entering.
12 (Whereupon, the jury at this time entered the
13 courtroom.)
14 THE COURT: Please be seated, members of the
15 jury.
16 You may proceed, Mr. White.
17 MR. WHITE: Thank you.
18
19 DIRECT EXAMINATION (cont'd)
20 BY MR. WHITE:
21 Q Mr. Rosenblatt, before we broke for lunch, we were
22 looking at Exhibit 425-A, a promissory note from
23 Mr. Gordon to Joyce Grossman for $15,000, on July 25th,
24 1993; do you see that?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2022
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1 Q Now, take a look at Government's Exhibit 499-1-A.
2 Tell us what 499-1-A is?
3 A It is a certificate of death regarding Todd Gordon.
4 Q And if you can look at box 3, could you tell us what
5 the date of death is for Todd Gordon?
6 A July 28th, 1993.
7 Q Could you compare that to the date on the promissory
8 note, Exhibit 425-A.
9 A The promissory note is July 25th, 1993.
10 Q What does Exhibit 425 say the purpose of the
11 promissory note was?
12 A To pay for the burial expenses, I believe.
13 Q According to the death certificate was Mr. Gordon's
14 son dead on July 25th?
15 A No.
16 Q Now, Exhibit 764 and 765 are the wire transfers that
17 you described for us before; is that correct?
18 A That's correct.
19 Q And you said that they were from Who's Who Worldwide
20 for Mr. Gordon?
21 A Yes.
22 Q Do you know from your review of the books and records
23 of Who's Who Worldwide how that expense was treated by
24 Who's Who Worldwide?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2023
Rosenblatt-direct/White
1 Q And how was it treated?
2 A They were charged to the loan account.
3 Q Okay.
4 Now, if you look at Exhibit 425-B, what is that?
5 A A promissory note for $10,000 dated October 1st, 1993
6 between Bruce Gordon and Madeline Middlemark.
7 Q And the cover letter, Exhibit 425, says that that
8 loan was for what purpose?
9 A To pay for medical costs incurred by Mr. Gordon's
10 wife. He owes his wife substantial back alimony. And he
11 borrowed the money in October from Madeline Middlemark to
12 pay his wife.
13 Q Now, were you present for Ms. Middlemark's testimony
14 earlier in this trial?
15 A Yes, I was.
16 Q Can you tell us what Ms. Middlemark said regarding
17 this loan, this alleged loan?
18 A Ms. Middlemark had no recollection of ever loaning
19 Mr. Gordon money to pay for Mr. Gordon's wife's alimony or
20 medical expenses.
21 Q Tell us what she said with regard to this note,
22 425-B?
23 A She had never seen this.
24 Q Now, from your review of the Who's Who Worldwide
25 Bruce Gordon bank records, have you reached any conclusion
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2024
Rosenblatt-direct/White
1 as to where that money actually came from?
2 A The 10,000 -- with regard to Madeline Middlemark?
3 Q The $10,000 in October of 1993 out of Mr. Gordon's
4 account?
5 A It came out of Who's Who Worldwide Registry.
6 Q Let me show you Exhibit 766.
7 (Handed to the witness.)
8 Q What is that?
9 A It is a debit advice on National Westminster Bank.
10 Q Do you recognize the account number?
11 A Yes. It is Bruce Gordon's account.
12 Q And what sort of transfer does that debit advice
13 reflect?
14 A It reflects a transfer from Who's Who Worldwide
15 Registry to Bruce Gordon.
16 Q For how much?
17 A $5,000.
18 Q And what is the date?
19 A It looks like October 20th, 1993.
20 Q Now, Mr. Rosenblatt, let me show you Exhibit 427; and
21 I will put the enlargement up to the jury.
22 (Handed to the witness.)
23 Let me read a portion of it.
24 It is dated September 29th, 1994. It is from
25 Mr. Reffsin to Frank Gagliardi of the IRS.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2025
Rosenblatt-direct/White
1 Dear sir: You requested information as to the
2 status of payments by Mr. Bruce Gordon to -- of his
3 obligation to the Department of Justice for the year
4 1993. The total amount due for 1993 is $14,025. He has
5 paid to date $5,500.
6 Q Mr. Rosenblatt, can you tell us given what he has
7 paid and what he owes, what is the amount that he still
8 owes here?
9 A Approximately $8,500.
10 Q I will skip down to the third paragraph.
11 He is going to have to borrow the money he
12 offered in the offer and compromise submitted. Where
13 shall he borrow this money? Perhaps he should cease
14 eating.
15 Q Mr. Rosenblatt, if you could turn to 1504-E, the
16 schedule of the American Express charges.
17 A Yes.
18 Q Now, the date -- if you can turn to page 4 of that
19 Exhibit?
20 THE COURT: What is the number of that exhibit
21 again?
22 MR. WHITE: 1504-E, like in Edward.
23 Q The date of this letter is September 29th, 1994.
24 Could you look for the month, approximately the
25 month period, beginning with August 20th, the month period
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2026
Rosenblatt-direct/White
1 prior to the writing of this letter, and tell us how much
2 Mr. Gordon spent on restaurants on his American Express
3 card?
4 A $935.71.
5 The following period $364.60.
6 Q And this letter says, perhaps he should cease eating;
7 is that right?
8 A Yes, that's what it says.
9 Q Prior to that it says where shall he borrow this
10 money. Do you see that?
11 A Yes.
12 Q Can you give us a rough approximation of how much
13 money Who's Who Worldwide and Mr. Gordon's other
14 corporations had loaned him up to this point in September
15 of '94?
16 A It was approximately $900,000.
17 Q And that's from '91 --
18 A From '91 through '94.
19 Q If you take a look at 1507-H.
20 A Yes.
21 Q And the 900 some odd dollars of restaurant bills you
22 mentioned before, looking at 1507-H, can you tell us if
23 that money was charged to Mr. Gordon's loan account or
24 business account?
25 A Yes, charged to his loan account from Registry
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2027
Rosenblatt-direct/White
1 Publishing.
2 Q You mentioned Registry Publishing and Executive Club
3 prior in his testimony. Did they pay other expenses of
4 Mr. Gordon besides Who's Who Worldwide?
5 A I don't understand your question.
6 Q In addition to Who's Who Worldwide did Registry
7 Publishing and Who's Who Executive Club pay expenses of
8 Mr. Gordon?
9 A Yes.
10 Q Have you done an analysis of where those corporations
11 got that money from?
12 A Yes.
13 (Whereupon, at this time there was a pause in the
14 proceedings.)
15 Q Let me show you Government's Exhibit 837, which is in
16 two pages.
17 (Handed to the witness.)
18 Now, Mr. Rosenblatt, what is Exhibit 837?
19 A It is an analysis of transfers of money from Who's
20 Who Worldwide Registry to other related corporations, from
21 February through December of 1994.
22 Q On what records was this summary prepared?
23 A Based on bank records.
24 MR. WHITE: Your Honor, the government offers
25 837.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 THE COURT: Any objection?
2 MR. TRABULUS: Still looking at it, your Honor.
3 THE COURT: All right.
4 (Whereupon, at this time there was a pause in the
5 proceedings.)
6 MR. TRABULUS: No.
7 MR. WALLENSTEIN: No objection either.
8 THE COURT: Government's Exhibit 837 in
9 evidence.
10 (Government's Exhibit 837 received in evidence.)
11 MR. WHITE: Your Honor, here is a copy for the
12 Court.
13 (Handed to the Court.)
14 Q On the left-hand side there are three boxes that
15 state Who's Who Worldwide Registry that are shaded.
16 A Yes.
17 Q What do they represent?
18 A They represent three different bank accounts in the
19 name of Who's Who Worldwide Registry. One at NatWest
20 Bank, another at European American Bank, and the third is
21 Republic Bank for Savings.
22 Q Now, in February and March of 1995 were there -- I am
23 sorry, 1994, were there transfers of funds out of those
24 Who's Who Worldwide accounts?
25 A Out of two of them, yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 Q Okay.
2 Can you explain for us where that money went?
3 A Approximately 700,000 went from the Who's Who
4 Worldwide Registry NatWest Bank, and was deposited to
5 Sterling Who's Who at Marine Midland Bank.
6 Q Let me just stop you there. That's this
transfer
7 that has 150,000 on February 4th, and 550,000 on March
8 11th; is that right?
9 A Yes.
10 Q And what other transfers are there?
11 A A transfer of $500,000 from the account at European
12 American Bank in the name of Who's Who Worldwide Registry,
13 and that went into Sterling Who's Who at Marine Midland
14 Bank.
15 Q So, tell us roughly what the total going from Who's
16 Who Worldwide to Sterling was?
17 A 1.2 million dollars.
18 Q Did any money go from Worldwide to any other
19 corporations?
20 A Yes.
21 Q Tell us where that appears on the chart?
22 A Right above where I was just reading from, you have
23 an amount of $45,000 going from Who's Who Worldwide
24 Registry at NatWest Bank and that goes into Registry
25 Publishing, Inc., the NatWest Bank account.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 Q Does any money go from Worldwide to Who's Who
2 Executive Club?
3 A Yes, $20,000.
4 Q And where does that appear?
5 A That's the arrow that goes down the left side of the
6 page and across at the bottom.
7 Q Now, there are dotted lines on this chart. Can you
8 tell us what the dotted lines represent?
9 A They represent monies going back to Who's Who
10 Worldwide Registry.
11 Q And tell us what monies are going back to Who's Who
12 Worldwide?
13 A Right at the top of the chart, there is 65,000 that
14 goes from Registry Publishing, NatWest Bank and is put
15 back to Who's Who Worldwide Registry, NatWest Bank. There
16 is also a transfer from Sterling Who's Who at Marine
17 Midland Bank, $560,000, and it goes back to Who's Who
18 Worldwide Registry at Republic Bank for Savings.
19 Q Can you
tell us an approximate number? What is the
20 net effect? What is the total that went out and the total
21 that came back?
22 A Approximately a million 245 thousand went out from
23 Who's Who, and approximately 625,000 went back.
24 Q Of the money that went from Worldwide to Sterling,
25 did it go anywhere else after it arrived at Sterling?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2031
Rosenblatt-direct/White
1 A Yes.
2 Q Where did it go?
3 A $500,000 was transferred from Sterling Who's Who
4 Marine Midland Bank, into Registry Publishing, Inc.,
5 NatWest Bank.
6 Q Tell us how many days after Sterling received this
7 money it got sent to Registry Publishing?
8 A Within the next week.
9 Q Now, how many different Registry Publishing accounts,
10 bank accounts are represented on this chart?
11 A Four.
12
Q How many different banks?
13 A For different banks.
14 Q Now, once Registry Publishing got this money, did it
15 go to any corporations?
16 A It stayed within Registry Publishing. It was
17 transferred to different accounts of Registry Publishing.
18 Q Did Registry Publishing transfer to any other
19 corporations?
20 A Yes.
21 Q Where does that appear on the chart?
22 A Just to the right of the middle of the chart, there
23 is Registry Publishing, Inc., Marine Midland Bank. And
24 from that 100,000 is transferred into Who's Who Executive
25 Club, Inc. at Sterling National Bank, and $55,000 is
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2032
Rosenblatt-direct/White
1 transferred to Publishing Ventures, Inc. at National
2 Westminster Bank.
3 Q And how many different Who's Who Executive Club
4 accountings are depicted on this chart?
5 A Two.
6 Q And at how many different banks?
7 A Two different banks, all the way on the left toward
8 the bottom, you have Who's Who Executive Club, Inc. at
9 National Westminster Bank, and the right of the middle of
10 the chart you have Who's Who Executive Club at Sterling
11 National Bank.
12 Q Let me show you Exhibits 783, 786, 787, 784, 691,
13 692, 695, 696, 707 and 708, 710, 711 and 701.
14 Would you just take a moment and review them.
15 THE COURT: Are they all in evidence?
16 MR. WHITE: Yes, they are, your Honor.
17 (Handed to the witness.)
18 (Whereupon, at this time there was a pause in the
19 proceedings.)
20 Q Just tell me when you are finished reviewing them.
21 (A further pause in the proceedings.)
22 A Yes.
23 Q Are they some of the bank records reflecting the
24 transactions set forth on this chart, 837?
25 A Yes, they are.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 MR. WHITE: Your Honor, may I show it to the
2 jury?
3 THE COURT: Yes.
4 (Whereupon, the exhibit/exhibits were published
5 to the jury.)
6 Q Going back to the chart, 837, can you tell us if
7 Mr. Gordon received any funds from these other
8 corporations?
9 A Yes, he did.
10 Q Tell us starting the left side of the chart, tell us
11 of any funds Mr. Gordon received.
12 A They are reflected on the bottom of the chart. You
13 can see from Who's Who Executive Club at National
14 Westminster Bank, Mr. Gordon received $3,500.
15 Q And from Sterling Who's Who?
16 A From Sterling Who's Who at Marine Midland Bank,
17 Mr. Gordon received either directly or indirectly
18 $106,845.96.
19 Q When you say directly or indirectly, what do you
20 mean?
21 A Either checks to him or to pay his expenses, such as
22 American Express and auto expenses.
23 Out of Registry Publishing at National
24 Westminster Bank, Mr. Gordon received a thousand dollars.
25 Right in the middle out of Registry Publishing,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 Marine Midland Bank, Mr. Gordon received 12,000, plus his
2 American Express bill of $27,315.83, for a total of
3 $39,815.83.
4 Out of Who's Who Executive Club, Sterling
5 National Bank, Mr. Gordon received 4,000, plus an American
6 Express bill paid of $47,487.83, for a total of
7 $51,487.83.
8 Q By the way, do you know what American Express bill
9 that was that cost $47,000?
10 A Yes. That was the trip to Europe.
11 Q Continue.
12 A Out of Registry Publishing, Inc., Sterling National
13 Bank, Mr. Gordon received $32,000.
14 Out of Registry Publishing, Inc. at Republic Bank
15 for Savings, Mr. Gordon received $2,000.
16 Q Now, can you tell us total, what is the total amount
17 of funds received by Mr. Gordon from these corporations
18 reflected on this chart?
19 A It looks like about $235,000.
20 Q Approximately?
21 A Approximately.
22 Q Mr. Rosenblatt, can you tell us how those monies
23 transferred to Mr. Gordon were treated on the respective
24 books of the respective corporations?
25 A These amounts were all treated as loans.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 Q Were any of them reported by these corporations to
2 the IRS as compensation to Mr. Gordon?
3 A No.
4 Q What is the earliest transfer reflected on this
5 chart?
6 A February 4th, 1994. It should be a transfer of
7 $150,000 from Who's Who Worldwide Registry at National
8 Westminster Bank to Sterling Who's Who at Marine Midland
9 Bank. It is to the left near the top.
10 Q And is there another transfer in February of 1994?
11 A Yes, there is, all way at the bottom, all the way at
12 the bottom you have $20,000 on February 24th, 1994 from
13 Who's Who Worldwide Registry at National Westminster Bank
14 to Who's Who Executive Club at National Westminster Bank.
15 Q Do you know, aside from those two February 1s, what
16 is the next earliest transfer?
17 A There are two transfers on March 11th of '94.
18 Q Now, do you know what month Who's Who Worldwide filed
19 the bankruptcy petition?
20 A I believe it was March of 1994.
21 Q Let me show you Exhibit 649.
22 Now, what is Exhibit 649?
23 (Handed to the witness.)
24 A They are copies of checks payable out of the account
25 of Sterling Who's Who to the Mondrian.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 Q Can you tell us what the Mondrian is?
2 A The penthouse apartment on I believe it is East 54th.
3 Q And for 1994, if you can look at Exhibit 1404-C,
4 which is the document you have been using for your
5 reference, can you tell us what was the total amount paid
6 for the Mondrian in 1994?
7 A $72,963.
8 Q And by what company was that paid?
9 A By Sterling Who's Who.
10 MR. WHITE: Your Honor, I would like to pass out
11 at this time the photographs entered in evidence of the
12 penthouse, 842 inclusive and 843 inclusive.
13 THE COURT: Yes.
14 (Whereupon, the exhibit/exhibits were published
15 to the jury.)
16 Q Let me show you 611, 12, 13 and 15, which are in
17 evidence.
18 (Handed to the witness.)
19 Now, start with 611.
20 What is that?
21 A 611 is a contract of sale for a condominium unit
22 between Gerald Keller and Barbara Keller and Publishing
23 Ventures, Inc. the property at 2 Hummingbird Road.
24 Q Look at Exhibit 612, and tell us what that is?
25 A It is a record of the Nassau County clerk recording a
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2037
Rosenblatt-direct/White
1 mortgage for $200,000 on that property.
2 Q Okay.
3 Look at 613.
4 What is that?
5 A A record of the Nassau County clerk recording a deed
6 on that property in the amount of $600,000.
7 Q Finally, 615, labeled closing statement; is that
8 right?
9 A Yes.
10 Q What kind of document is it?
11 A It is a c
losing statement reflecting the closing of
12 the document, the transaction is between Gerald and
13 Barbara Keller and Publishing Ventures, Inc.
14 Q On the first page where it says purchaser, what is
15 listed?
16 A Publishing Ventures, Inc., by Bruce Gordon,
17 president.
18 Q And if you can flip to page 3 of that document, what
19 is the purchase price for the condominium?
20 A I am looking at the top of page 2, it is $600,000.
21 Q Okay.
22 You said before there was a mortgage on the
23 property?
24 A That's correct.
25 Q For how many?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 A $200,000.
2 Q Now, have you prepared an analysis of deposits to the
3 Publishing Ventures account?
4 A Yes, I have.
5 Q Let me show you Exhibits 1505-A through D, and 1506-A
6 through D.
7 Can you look at those and tell us what those
8 are.
9 (Handed to the witness.)
10 A 1505-A through D are the analysis of disbursements of
11 Publishing Ventures, Inc.
12 Q What do you mean by disbursements?
13 A Monies spent by Publishing Ventures for the years
14 1992, 1505-A, 1993 is 1505-B, 1994 is 1505-C, and 1995 is
15 1505-D.
16 Q That's the money spent by PVI?
17 A That's correct.
18 Q What is Exhibit 1506?
19 A That represents an analysis of deposits. To
20 Publishing Ventures account at National Westminster Bank.
21 1506-A is for the year 1992. 1506-B is for 1993. 1506-C
22 is for 1994, and 1506-D is for 1995. But I believe it was
23 only up until March 31st of 1995.
24 MR. WHITE: Your Honor, the government offers
25 Exhibits 1505-A through D, and 1506-A through D.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 THE COURT: Any objection?
2 MR. WALLENSTEIN: No, your Honor.
3 MR. TRABULUS: No.
4 THE COURT: Government's Exhibits 1505-A through
5 1505-D for Dog, and 1506-A for Abel through 1506-D for
6 dog, in evidence.
7 (Government's Exhibits 1505-D received in
8 evidence.)
9 (Government's Exhibits 1506-A through 1506-D
10 received in evidence.)
11 Q Mr. Rosenblatt, have you prepared charts showing the
12 flow of money into and out of Publishing Ventures?
13 A Yes.
14 (Counsel confer.)
15 Q Mr. Rosenblatt, let me show you
16 Government's Exhibit 1510.
17 What is that?
18 (Handed to the witness.)
19 A That's the chart for the 1992 year. It shows on the
20 left source of funds going to Publishing Ventures, and on
21 the right, disposition of funds.
22 MR. WHITE: Your Honor, the government offers
23 1510.
24 THE COURT: That's just for 1992?
25 MR. WHITE: Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 THE COURT: Any objection?
2 MR. TRABULUS: No, your Honor. If there is a
3 small version that can be made available at some point I
4 would appreciate that.
5 MR. WALLENSTEIN: No objection, your Honor.
6 THE COURT: Government's Exhibit 1510 in
7 evidence.
8 (Government's Exhibit 1510 received in evidence.)
9 Q Mr. Rosenblatt, can you step down and explain what
10 this chart shows.
11 A This shows that $70,000 is going from Who's Who
12 Worldwide Registry was deposited into Publishing Ventures'
13 account in the center where it says total deposits of
14 $70,000. And out of that account of Publishing Ventures,
15 $60,000 went to, it
should be Sale Groothius and Hirsch.
16 Q And from the documents you reviewed before with
17 respect to the closing on the home, who were Sale
18 Groothius and Hirsch?
19 A They were the attorneys, and I believe this was the
20 deposit on the purchase.
21 THE COURT: Attorneys for the seller of the
22 condominium, correct?
23 THE WITNESS: Correct.
24 THE COURT: Correct?
25 THE WITNESS: Correct.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 THE COURT: We want to make sure we get the
2 lawyers right. It is important.
3 Q So, how much went into PVI and how much went out in
4 '92?
5 A 70,000 went in and 60,000 came out.
6 Q Let me show you Government's Exhibit 1511.
7 (Handed to the witness.)
8 Q What is that?
9 A That's an analysis again of the monies going into
10 Publishing Ventures, Inc. and being taken out of
11 Publishing Ventures, Inc. for the year 1993.
12 MR. WHITE: Your Honor, the government offers
13 1511.
14 THE COURT: Any objection?
15 MR. WALLENSTEIN: No, your Honor.
16 MR. TRABULUS: No objection.
17 THE COURT: Government's Exhibit 1511 in
18 evidence.
19 (Government's Exhibit 1511 received in evidence.)
20 Q And let's start on the left side of the chart,
21 Mr. Rosenblatt. With the box that says Who's Who
22 Worldwide Registry, Inc. are there transfers out of there
23 to Publishing Ventures?
24 A Yes.
25 Q How much?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Rosenblatt-direct/White
1 A $945,000.
2 Q And are there any other transfers out of Who's Who
3 Worldwide Registry?
4 A Yes, $53,000 transferred to Bruce Gordon.
5 Q Any money transferred from Mr. Gordon to Publishing
6 Ventures?
7 A Yes, $22,000.
8 Q So, what are the total deposits to Publishing
9 Ventures in 1993?
10 A $967,000.
11 Q Now, can you go box by box and tell us what, or how
12 those funds were used?
13 A In the top box there are payments regarding the
14 purchase of the property going to Astoria Federal Savings
15 and Loan, Gerald and Barbara Keller, Advance Abstract
16 Corporation, Sale Groothius and Hirsch. And that totals
17 $346,855.
18 Q And the next box?
19 A The next box is payment to Barbara Keller regarding
20 the mortgage in the amount of $57,250.
21 Q And the next box?
22 A The next box is a payment to Ann Galante for real
23 estate tax in the amount of $10,161 and change, and a
24 payment to the Nassau County Treasurer, also for real
25 estate tax, which is in the amount of $4,225.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 Q And what is represented in the next box?
2 A The next box is various improvements to the property.
3 The next box refers to improvements made to the
4 property. It is payments to Matchless Construction,
5 approximately $216,000; to Joyce Grossman Interiors
6 approximately $176,000; to Lifestyles, which was 43,000
7 approximately; to St. Charles Kitchens $16,275; to Marble
8 Modes $4,000, Kolson, K O L S O N, Korlenge, K O R E N G E,
9 Inc., $4,300; Home Sped Window approximately $2,700;
10 Amaru, A M A R U, Tile Studio, approximately $14,000; ADT
11 Security Systems $500, and All Pro Painting for $8,665.
12 All of those announced a total of approximately $487,000.
13 Q Now, without reading all the items in the next box,
14 tell us the amounts and what sort of expenditures they
15 were?
16 A For furnishings, carpets, I guess artwork, and some
17 electronic equipment. And it totals approximately
18 $31,000.
19 Q And the next box?
20 A Payments to either maintenance or common charges of
21 the's -- to the Estates of North Hills, $7,834.
22 Q And the final box.
23 A The final box includes various other items, such as
24 insurance, a moving company, All-Fitness, I believe is a
25 gym, LILCO, and two other items that I don't actually
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
2044
Rosenblatt-direct/White
1 recall what they were for, totalling close to $20,000.
2 Q And what is the total disbursements of PVI for that
3 year?
4 A Approximately $965,000.
5 Q Mr. Rosenblatt, let me show you 1512. What is that?
6 A A schedule of the 1994 year of the monies going into
7 and being disbursed by Publishing Ventures, Inc.
8 MR. WHITE: The government offers 1512.
9 MR. TRABULUS: No objection.
10 MR. WALLENSTEIN: No objection.
11 THE COURT: Government's Exhibit 1512 in
12 evidence.
13 (Government's Exhibit 1512 received in evidence.)
14 Q Start on the left side of the chart again with source
15 of funds, starting with the box that says Who's Who
16 Worldwide.
17 Did Who's Who Worldwide transfer any funds
18 directly to Publishing Ventures?
19 A Yes, $82,000.
20 Q Would you point that out on the chart?
21 A It is right at the top.
22 Q Now, did it transfer any funds to Bruce Gordon?
23 A Yes, $5,000.
24 Q And did Mr. Gordon make any transfers to Publishing
25 Ventures?
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1 A Yes, Mr. Gordon transferred $17,500 to Publishing
2 Ventures.
3 Q And did Mr. Gordon receive funds from any other
4 corporations?
5 A Yes, he did.
6 Q And where did he receive it from?
7 A Mr. Gordon received $12,500 from Registry Publishing.
8 Q Now, the amounts transferred by Who's Who Worldwide
9 and Registry Publishing to Mr. Gordon was what?
10 A $17,500.
11 Q How much has Mr. Gordon paid or transferred to
12 Publishing Ventures?
13 MR. WALLENSTEIN: Objection. Asked and answered.
14 THE COURT: Overruled.
15 A $17,500.
16 Q Does Who's Who transfer money to Sterling?
17 A Yes.
18 Q How much?
19 A Who's Who transfers approximately $831,000 to
20 Sterling.
21 Q And does Sterling then transfer any money to PVI?
22 A Yes, $27,000 to PVI.
23 Q Does Sterling transfer money to any other
24 corporation?
25 A Yes. Sterling transfers $513,000 to Registry
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 Publishing.
2 Q Now, does Registry Publishing send anything to PVI
3 directly?
4 A Yes, $55,000 to Publishing Ventures.
5 Q Now, tell us what the total deposits to Publishing
6 Ventures are for that year?
7 A $181,562.25.
8 Q Okay.
9 Now, if you look on the right side under
10 disposition of funds, what does it say in the first box?
11 A $7,500 went to Bruce Gordon.
12 Q And how much is that relative to what was paid to
13 Publishing Ventures by Mr. Gordon?
14 A A little less than half.
15 Q And the next box reflects what?
16 A $109,062.50 went to Barbara Keller for the mortgage
17 payments.
18 Q And if you could just tell us what each box
19 represents, and the amount, without reading all the
20 indifferent items.
21 A $12,673 approximately to Ann Galante for real estate
22 tax. Then there were payments for improvements to
23 Matchless Construction, for electric, ADT Security, Joyce
24 Grossman Interiors and Pro Display for approximately
25 $16,000.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 The next box would show payments for furnishings
2 to Cliff Young Ltd., Harvey Electronics and Telefayan,
3 T E L F A Y A N, Carpets for approximately $8,800.
4 Common charges or maintenance at the Estates at
5 North Hills, $5,913.
6 Other expenses for All-For Fitness, LILCO,
7 insurance company, and for I guess a water bill for
8 approximately $3,200.
9 The last box shows miscellaneous payments of
10 $20,000 to Registry Publishing, to the IRS of corporate
11 tax of approximately a thousand dollars, and to the New
12 York State Department of Finance corporate tax of also
13 approximately a thousand dollars.
14 The total of the miscellaneous is approximately
15 $22,000.
16 Q What is the total disbursements of the year,
17 $185,668.79.
18 Take a look at Exhibits 1513, Mr. Rosenblatt, and
19 tell me what that is?
20 A It is the same as the charts we have just been
21 showing for the Manhasset condominium, showing the source
22 of funds going into Publishing Ventures and the
23 disposition of funds coming out of Publishing Ventures.
24 Q For what year?
25 A For the period January 1st to March 31st, 1995.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 MR. WHITE: Your Honor, the government offers
2 Exhibit 1513.
3 THE COURT: Any objection?
4 MR. TRABULUS: No.
5 MR. WALLENSTEIN: No, your Honor.
6 THE COURT: Government's Exhibit 1513 in
7 evidence.
8 (Government's Exhibit 1513 received in evidence.)
9 Q Start with the source of funds. Where are the funds
10 coming from going into Publishing Ventures?
11 A In the top box, Registry Publishing transfers $52,000
12 into Publishing Ventures.
13 The bottom box, we were unable to obtain the
14 underlying documents for $6,000 of unknown funds that went
15 into Publishing Ventures.
16 Q So, the total deposits into Publishing Ventures are
17 what?
18 A 58,000.
19 Q Tell us how that was spent by PVI.
20 A In the top box approximately $51,000 went to Barbara
21 Keller for the mortgage.
22 In the second box around $2,200 went to Ann
23 Galante for real estate tax.
24 Then there was a payment of about $71 for ADT
25 Security Systems.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 $2,011 paid for the common charges or maintenance
2 at the Estates at North Hills. And approximately $1,700
3 went to pay Royal Insurance.
4 Q What was the total amounts spent by PVI for this
5 period through March 31st, '95?
6 A $57,944.72.
7 Q Now, the charts you just reviewed for the years '92,
8 through '95, reflected deposits by Mr. Gordon to
9 Publishing Ventures; is that right?
10 A That's correct. I believe in only two of the years.
11 Q Now, if you can take a look at Exhibit 1506-B, like
12 in Boy.
13 First of all, tell us what that exhibit is?
14 A An analysis of deposits for Publishing Ventures to
15 NatWest Bank for the year 1993.
16 Q Does it have a column for deposits for Mr. Gordon?
17 A Yes, it does.
18 Q How much did
Mr. Gordon give to Publishing Ventures
19 in that year?
20 A $22,000.
21 Q Now, have you performed an analysis of where
22 Mr. Gordon got that $22,000?
23 A Yes, I did.
24 Q Tell us where?
25 A It came out of his account at National Westminster
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1 Bank.
2 Q Now, have you performed any analysis of where the
3 money came from that went into Mr. Gordon's account to pay
4 that rent?
5 A Yes.
6 Q And where did it come from?
7 A It came out of Who's Who Worldwide Registry.
8 Q And how was it accounted for on the books of Who's
9 Who Worldwide?
10 A It was charged to the loan account.
11 Q So, the money was borrowed from Who's Who Worldwide
12 to pay Publishing Ventures?
13 A That's correct.
14 Q Now, take a look
at 1506-C. That's the deposits for
15 the next year, 1994; is that correct?
16 A That's correct.
17 Q And how much does Mr. Gordon put in on that year?
18 A He puts in $17,500.
19 Q Let me show you Exhibit 770, which is a series of
20 checks from Mr. Gordon's personal account and refer you to
21 check number 122, and also Exhibit 709, which is a check
22 from Registry Publishing.
23 (Handed to the witness.)
24 Q Now, look at those two checks and tell us what they
25 reflect?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 A Check number 709 is a check from Registry Publishing,
2 Inc. It is a check number 1002, dated June 9th of 1994,
3 payable to Bruce Gordon in the amount of $12,500.
4 Exhibit 770 is a check on Bruce Gordon's account
5 at Sterling National Bank. Check number 122, dated June
6 9th, 1994, payable to Publishing Ventures in the amount of
7 $12,500.
8 Q And can you tell us, how the dates on the two checks
9 compare?
10 A It is the same date.
11 MR. WHITE: Your Honor, may I pass them out to
12 the jury?
13 THE COURT: Yes.
14 (Whereupon, the exhibit/exhibits were published
15 to the jury.)
16 Q Now, the 12,500 that went from Registry Publishing to
17 Mr. Gordon, the check you just identified, do you know how
18 it was treated on Registry Publishing's books?
19 A Yes, recorded as a loan.
20 Q A loan from Registry Publishing to Mr. Gordon to pay
21 PVI?
22 A That's correct.
23 Q Now, of the 17,500 that Mr. Gordon gave PVI in '94,
24 how much of it did he get back?
25 A He got back 7,500.
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1 Q Now, can you tell us the factors that the IRS uses in
2 determining whether money received by an individual
3 taxpayer constitutes a loan or income?
4 MR. TRABULUS: Objection, your Honor.
5 THE COURT: What ground?
6 MR. TRABULUS: I thought it was discussed
7 previously.
8 THE COURT: It was, and this is what I
9 permitted.
10 MR. TRABULUS: I misunderstood, your Honor. The
11 objection is still there.
12 THE COURT: The objection is overruled.
13 When you say used by the IRS, where did you get
14 these factors from, Mr. Rosenblatt?
15 THE WITNESS: Based on case law and experience.
16 MR. TRABULUS: Your Honor, may we approach
17 again?
18 THE COURT: All right. Come up.
19
20 (Whereupon, at this time the following took place
21 at the sidebar.)
22 MR. TRABULUS: I had thought, your Honor,
23 sincerely when we last
left it, this is what was excluded,
24 and specifically based on case law, there was a mention of
25 several factors where -- cases where these factors come
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 from.
2 THE COURT: I will let the witness testify that
3 the IRS in the usual course of their business -- do they
4 make determinations as to whether some things are a loan
5 or not a loan?
6 MR. WHITE: Yes, that's what this revenue agent
7 does.
8 THE COURT: That he uses certain factors -- that
9 the IRS -- it is as if the IRS has a custom and usage in
10 determining. I will instruct the jury that this is the
11 IRS's determination and it is not necessarily my
12 determination or the law of the United States. But I will
13 certainly let them make a determination, if it is the
14 usual, customary method to make a determination by the
15 IRS, and he knows it, I will let him testify, even if it
16 is based on case law. Yes, I will let him do that.
17 MR. TRABULUS: I am still objecting.
18 THE COURT: Overruled.
19 MR. WALLENSTEIN: As to the factors used.
20 THE COURT: Yes.
21 MR. WALLENSTEIN: Not the ultimate conclusion.
22 THE COURT: What I told you I will not let he
23 will say is that I am now declaring that it is not a
24 loan. I will not let him say that.
25 He can say what the factors are involved in the
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1 IRS's determination. I will let him say that. But not
2 the ultimate question.
3 MR. WHITE: Not his conclusion.
4 THE COURT: That's right. The factors.
5 MR. TRABULUS: Just for the record, I note I am
6 still objecting.
7 MR. WHITE: This point I think is clear. But as
8 we go along Mr. Gordon is charged with filing false tax
9 returns and Mr. Reffsin is charged with the assisting of
10 filing the false returns.
11 THE COURT: Yes.
12 MR. WHITE: Mr. Rosenblatt has to be able to
13 testify that if these other terms were include |