20 Court Reporters: HARRY RAPAPORT OWEN M. WICKER 21 United States District Court Two Uniondale Avenue 22 Uniondale, New York 11553 (516) 485-6558 23 24 Proceedings recorded by mechanical stenography, transcript produced by Computer-Assisted Transcription 25
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8648
1 (Case called.)
2 THE COURT: Please be seated.
3 MR. DUNN: Your Honor, I have a single request,
4 if I may hand it up to you.
5 MR. TRABULUS: Your Honor, I also have some
6 further questions, relating to the tax count and the
7 lesser included.
8 Thank you. I've given copies to all counsel.
9 THE COURT: Is everybody here?
10 MR. GEDULDIG: Sorry, Judge?
11 THE COURT: Is everybody here?
12
MR. GEDULDIG: Ms. Haley appears to be among the
13 missing. I think I might have indicated before. She is
14 perfectly agreeable to proceeding without her. I don't
15 know the reason for the delay. We don't have a jury today
16 and I don't think that would be any kind of prejudice to
17 her for not appearing here during the course of the
18 conversations we'll have and she told me she would waive
19 her appearance. So I would ask the Court to proceed
20 without her. I'm sure she'll arrive shortly.
21 THE COURT: What difference -- why is this new
22 request to charge made, Mr. Trabulus, in addition to your
23 other requests? 24 MR. TRABULUS: Your Honor, one, part of it is in 25 response to or suggested by Mr. Reffsin's request to
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8649
1 charge on good faith reliance. He turned around the good
2
faith reliance on the accountant's advice to the good
3 faith reliance on the client's advice and I have here that
4 relates to good faith reliance on the accountant's advice.
5 In addition, I requested a lesser included charge
6 originally.
7 THE COURT: So it clarifies the lesser included?
8 MR. TRABULUS: Yes, it does, Your Honor.
9 THE COURT: We'll get to that.
10 MR. TRABULUS: Sure.
11 THE COURT: And I just wanted to know what the
12 additional request was for.
13 All right. Let's proceed.
14 First with regard to the boilerplate portions in
15 which I said the defendants are being charged only with
16 the crimes set forth in the indictment and no others. In
17 the event that I charge lesser included crimes, and I'm
18 considering seriously doing that, I would add crimes set
19 forth in the indictment or lesser included crimes. We'll
20 see when w
e get to that.
21 Also open was the expert testimony. Was the
22 defendant Martin Reffsin an expert? Did we resolve that?
23 I think you were to tell me. 24 MR. WALLENSTEIN: I don't know if we resolved 25 that but I would withdraw that request.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8650
1 THE COURT: Okay.
2 With regard to accomplices who pled guilty, I'm
3 not quite sure what we meant by that. Let me just see
4 here. I gave a charge on witnesses who pled guilty. I
5 added to that "government witnesses and so-called
6 accomplices" to that who pled guilty. So that covers
7 that.
8 Now, as far as the character evidence, this is
9 what I'm going to say.
10 You have heard testimony that the defendant
11 Martin Reffsin has a good reputation for honesty and
12 truthfulness in the community where he lives and works.
13 Along with all the other evidence you have heard, you may
14 take into consideration what you believe about the
15 defendant Martin Reffsin's reputation for truthfulness and
16 honesty when you determine whether or not the government
17 has proven beyond a reasonable doubt that the defendant
18 Martin Reffsin committed the crimes charged against him.
19 You will note that I omitted some portion of your
20 request to charge because looking at the cases I don't
21 find that that -- I find that that is not only not
22 required but very confusing to the jury and I don't
23 believe it is the law either. So that's what I'm going to 24 charge. 25 With respect to the request, we started on
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8651
1 conspiracy and we talked about the first count, the first
2 element of the first conspiracy to commit mail fr
aud and
3 the government asked me to add some portion with regard to
4 conspiracy involving secrecy, direct. "Direct proof may
5 not be available, etcetera," and I'm going to add that
6 after looking at the law as follows.
7 "In this regard you may infer its existence from
8 the circumstances in the case and the conduct of the
9 parties involved. However, since a conspiracy may be by
10 its very nature, made by its very nature be characterized
11 by secrecy, direct proof may not be available. In the
12 context of conspiracy cases actions may speak louder than
13 words." That's my amendment of what the government has
14 requested me to do.
15 All right. Now, let's get to the second element
16 in the conspiracy. That's where we left off.
17 "Membership of the conspiracy." And this of
18 course is the first Count 1, the first conspiracy to
19 commit mail fraud.
20 "In connection with the second element in the
21 conspiracy count the government must prove beyond a
22 reasonable doubt that the defendant you are considering
23 knowingly and willfully became a member of the 24 conspiracy. If you find that the government established 25 beyond a reasonable doubt that the conspiracy charged in
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER 8652
1 the indictment existed, you must next determine whether
2 the government proved that the defendant you are
3 considering was a member of the conspiracy. In deciding
4 whether the defendant you are considering was a member of
5 the conspiracy, you should consider whether the defendant
6 knowingly and willfully joined the conspiracy. To act
7 knowingly means to do something voluntarily and
8 deliberately and not because of mistake, negligence,
9 inadvertence or so
me other innocent reason." And you will
10 see that I define knowingly a number of times in this
11 charge.
12 An act is done willfully if done voluntarily and
13 intentionally and with the intent to do something that the
14 law forbids, that is to say with a bad purpose either to
15 disobey or disregard the law.
16 Intent may be inferred from conduct, the
17 surrounding circumstances and from all the evidence in the
18 case.
19 As I said, in deciding whether the defendant you
20 are considering was in fact a member of the conspiracy,
21 you should consider whether the defendant knowingly and
22 willfully joined the conspiracy.
23 Did he or she participate in it with knowledge of 24 its lawful -- unlawful -- with its knowledge of unlawful 25 purpose and with the specific intention of furthering its
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
8653
1 business or objectives. While proof of a financial
2 interest in the outcome of the scheme is not essential, if
3 you find that the defendant had such an interest, that is
4 a factor which you may properly consider in determining
5 whether or not the defendant was a member of the
6 conspiracy charged in the indictment.
7 As I mentioned a moment ago before the defendant
8 you are considering can be found to have been a
9 conspirator, you must first find that he or she knowingly
10 and willfully joined in the unlawful agreement or plan.
11 The key question therefore is whether the
12 defendant joined the conspiracy with an awareness of at
13 least some of the basic aims and purposes of the unlawful
14 agreement.
15 It is for you to note that the defendant's
16 participation in the conspiracy must be established by
17 independent evidence of
his or her own acts or statements
18 as well as those of the other alleged co-conspirators and
19 the reasonable inferences which may be drawn from them.
20 A defendant's knowledge may be a matter of
21 inference from the facts proved. In that connection I
22 instruct you that to become a member of the conspiracy the
23 defendant need not have known the identity of all the 24 members, nor need he or she have been fully informed as to 25 all of the details, or the scope of the conspiracy in
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8654
1 order to justify an inference of knowledge on his or her
2 part.
3 Furthermore, the defendant need not have joined
4 in all of the conspiracy's unlawful objectives and
5 activities. The extent of a defendant's participation has
6 no bearing on the issue of a defendant's guilt. A
7 conspirator'
s guilt is not measured by the extent or
8 duration of his or her participation. Indeed, each member
9 may perform separate and distinct acts and may perform
10 them at different times. Some conspirators play major
11 roles, while others play minor parts in the scheme. The
12 law does not require an equal role. Even a single act may
13 be sufficient to draw the defendant within the ambit of
14 the conspiracy.
15 A person need not have been a member of the
16 conspiracy from its very start to be a co-conspirator.
17 The defendant may have joined at any point during its
18 progress.
19 I want to caution you, however, that a
20 defendant's mere presence at the scene of the alleged
21 criminal activity does not by itself make him or her a
22 member of the conspiracy. Similarly, mere association
23 with one or more members of the conspiracy does not 24 automatical
ly make a defendant a member. A person may 25 know, be related to, or befriending with, or work with a
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8655
1 criminal without being a criminal himself or herself. The
2 fact that they may have been together and discussed common
3 aims and interests does not necessarily establish proof of
4 the existence of a conspiracy or knowing membership in the
5 conspiracy.
6 I also want to caution you that mere knowledge or
7 acquiescence -- what is happening now?
8 MS. SCOTT: Your Honor, I just handed out an
9 additional instruction we will request. We will get to
10 it.
11 THE COURT: Why don't you put it down for the
12 time being. I want your undivided attention on this.
13 This is very important and I don't want it interrupted by
14 anything.
15 I want to caution you that mere knowled
ge or
16 acquiescence without participation in the unlawful plans
17 is not sufficient. Moreover, the acts of a defendant
18 without knowledge merely happen to further the purposes or
19 objectives of the conspiracy does not make the defendant a
20 member. More is required under the law.
21 What is necessary is that the defendant must have
22 participated with knowledge of at least some of the
23 purposes or objectives of the conspiracy, and with the 24 intention of aiding in the accomplishment of those lawful 25 objectives.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8656
1 In sum, a defendant with an understanding -- let
2 the record indicate that Ms. Haley has advised at 9:17
3 a.m.
4 Do you want to ask Ms. Haley if it is all right
5 to have proceeded in her absence?
6 MR. GEDULDIG: You want me to ask her?
7
THE COURT: Yes.
8 MR. GEDULDIG: I told the Court that you
9 previously had told me you had no objection to proceeding
10 in court with respect to the charge conference.
11 THE DEFENDANT HALEY: Yes, it is all right.
12 MR. NELSON: Your Honor could you possibly read
13 back to the last three lines, you indicate the lawful
14 purpose, and I believe you may have misspoke.
15 THE COURT: What is necessary is that the
16 defendant may have anticipated with knowledge of at least
17 some of the purposes or objectives of the conspiracy and
18 with the intention of aiding with respect to the
19 accomplishment of those unlawful objectives.
20 MR. NELSON: Thank you.
21 THE COURT: In sum, a defendant with the
22 understanding of the unlawful character of the conspiracy
23 must have occasionally engaged, advised, or assisted in it 24 for the purpose of furthering the illega
l undertaking. He 25 or she thereby becomes a knowing participant in the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8657
1 unlawful agreement. That is to say, a conspirator.
2 The third element that the government must prove
3 beyond a reasonable doubt to establish the crime of
4 conspiracy is that at least one of the overt acts charged
5 in the indictment was knowingly committed by at least one
6 of the conspirators -- at least one of the conspirators
7 at or about the time and place alleged.
8 Count 1 of the indictment charges that the
9 following overt acts were committed in the Eastern
10 District of New York and elsewhere. And then I will read
11 that paragraph with the overt acts.
12 Have you got the amended indictment?
13 MS. SCOTT: I am doing it, your Honor.
14 THE COURT: I would like to have it today
15 sometim
e.
16 MS. SCOTT: You will, your Honor.
17 THE COURT: In order for the government to
18 satisfy this element, it is not required that all of the
19 overt acts alleged in the indictment be proven. Rather,
20 the government is only required to prove the commission of
21 at least one overt act as alleged in count one of the
22 indictment in furtherance of the conspiracy.
23 Similarly, you need not find that the defendant 24 you are considering committed the overt act. It is 25 sufficient for the government to prove that one of the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8658
1 conspirators knowingly committed a single overt act in
2 furtherance of the conspiracy, since such an act becomes
3 in the eyes of the law the act of all the members of the
4 conspiracy.
5 You are further instructed that the overt act
6 need not ha
ve been committed at precisely the date alleged
7 in the indictment. It is sufficient if you are convinced
8 beyond a reasonable doubt that it occurred at or about the
9 date and place stated. You must also find that the overt
10 act occurred during the course of the conspiracy.
11 Finally, you must find that at least one of the
12 overt acts was committed in the Eastern District of New
13 York, which includes, Staten Island, Brooklyn, Queens,
14 Nassau and Suffolk Counties.
15 The fourth and final element which the government
16 must prove beyond a reasonable doubt with regard to the
17 conspiracy charged in Count 1 is that the overt act was
18 committed for the purpose of carrying out the unlawful
19 agreement alleged in Count 1 of the indictment.
20 In order for the government to satisfy this
21 element, it must prove beyond a reasonable doubt that at
22 least one
overt act was knowingly and willfully done by at
23 least one conspirator in furtherance of at least one of 24 the objects or purposes of the conspiracy as charged in 25 the indictment.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8659
1 In this regard you should bear in mind that the
2 overt act standing alone may be an innocent lawful act.
3 Frequently, however, an apparently innocent act sheds its
4 harmless character if it is a step in carrying out,
5 promoting, aiding, or assisting the conspiratorial
6 scheme.
7 You are, therefore, instructed that the overt act
8 does not have to be an act which in and of itself is
9 criminal, or constitutes an objective of the conspiracy.
10 However, it must be an act which follows and tends toward
11 accomplishment of the plan or scheme and must be knowingly
12 done in furtherance of some o
bject or purpose of the
13 conspiracy charged.
14 Now, there is a request for me to charge on
15 multiple conspiracies, and I am going to charge that as
16 follows:
17 I will now address the issue of whether the
18 government has proved a single conspiracy in Count 1, or
19 two or more separate and independent conspiracies.
20 Whether there existed a single conspiracy or two or more
21 separate and independent conspiracies is a question of
22 fact for you, the jury, to determine in accordance with
23 the instructions I am about to give you. 24 The defendants contend that the evidence 25 establishes two separate conspiracies.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8660
1 Instead of "establishes" let's say that the
2 evidence -- that's what I was requested to charge,
3 establishes.
4 The defendants contend th
at the evidence
5 demonstrates --
6 MR. TRABULUS: May I suggest that the defendants
7 contend that if the evidence demonstrates a conspiracy at
8 all, it demonstrates the existence of two or more
9 conspiracies, something along those lines. Not that we
10 concede there is a conspiracy.
11 THE COURT: I am following the charge given to me
12 by the defendant Reffsin, I believe.
13 MR. WALLENSTEIN: That must be Norman's.
14 MR. NELSON: I asked for that in the second page
15 of the charge where I actually state that the defendants
16 contend if the evidence is accredited, credited, such
17 evidence establishes two separate conspiracies.
18 THE COURT: Then I took it from somewhere else.
19 Let me see where you say it?
20 MR. NELSON: The next to the last paragraph in
21 request 4 on the second page of that request, Judge.
22 See if this is all right.
23 The defendants contend if the -- I don't like 24 that other. 25 What do you say, Mr. Trabulus?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8661
1 MR. TRABULUS: I was saying off the top of my
2 head --
3 THE COURT: But it sounded good.
4 MR. TRABULUS: I am not so sure as I think about
5 it.
6 THE COURT: How about this: The defendants
7 contend that if the government establishes beyond a
8 reasonable doubt that a conspiracy existed.
9 MR. TRABULUS: It was two or more conspiracies
10 rather than a single conspiracy.
11 THE COURT: Right.
12 How about -- are you saying it is two or more?
13 MR. TRABULUS: The multitude conspiracy is
14 applicable without the defendants contention. And I would
15 like to rather have it without our contentions.
16 THE COURT: I think you are right.
17 Let's take
that out.
18 I am just going to say that if the government
19 establishes beyond a reasonable doubt that a conspiracy
20 existed --
21 MR. TRABULUS: Your Honor, may I suggest that
22 perhaps --
23 THE COURT: Just one minute now. 24 MR. TRABULUS: I am sorry. 25 (Whereupon, at this time there was a pause in the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8662
1 proceedings.)
2 THE COURT: How about this: If the government
3 establishes beyond a reasonable doubt -- think about this
4 and then I have to take a call.
5 If the government establishes beyond a reasonable
6 doubt that a conspiracy existed, that the government must
7 prove that it was the single conspiracy alleged in the
8 indictment, rather than two separate conspiracies. How
9 about that?
10 MR. TRABULUS: Sounds good to me.
11 THE COURT
: I like it.
12 MR. NELSON: Sounds good to me.
13 THE COURT: I will be right back.
14
15 (Whereupon, a recess is taken.)
16
17 THE COURT: That was the American Bar Association
18 judiciary chairman, to talk about a judicial candidate. I
19 didn't know they were putting through judicial
20 candidates. I thought they stopped doing that about two
21 years ago.
22 If the government establishes beyond a reasonable
23 doubt that a conspiracy existed, the government must prove 24 that it is the single conspiracy alleged in the indictment 25 rather than two separate conspiracies.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8663
1 Now, what I intend to say, namely, Who's Who
2 Worldwide and Sterling Who's Who, because I think those
3 are the two separate conspiracies that are possible.
4 Proof of two or more sep
arate and independent
5 conspiracies is not proof of the single overall conspiracy
6 charged in the indictment. Unless, of course, one of the
7 conspiracies proved happens to be the single conspiracy
8 described in the indictment, where persons joined together
9 to further one common unlawful design or purpose, a single
10 conspiracy existed. By way of contrast, multiple
11 conspiracies exist when there are separate unlawful
12 agreements to achieve distinct purposes.
13 As to count one, the government must prove to you
14 beyond a reasonable doubt that in the period of time
15 between approximately 1990 through March 1995, there was
16 an agreement between the defendant you are considering and
17 one or more other defendants or other persons to commit
18 one of the charged objectives of the conspiracy as I have
19 just described.
20 In deciding whether such single co
nspiracy has
21 been proved, you should be aware that a single conspiracy
22 can experience a change in personnel. Certain individuals
23 can withdraw from a conspiracy after having participated 24 in it for some time. Others may join a conspiracy after 25 it has been in existence for a period of time. The fact
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8664
1 that the parties to a criminal conspiracy are not always
2 the same does not necessarily imply that separate
3 conspiracies existed. You must, however, be persuaded
4 beyond a reasonable doubt that there were in fact two or
5 more persons in agreement to engage in the criminal
6 conduct that was at the heart of the conspiracy charged in
7 count one.
8 On the other hand, if you find that the
9 conspiracy charged in the indictment did not exist at any
10 time within the date
specified, then you must find all of
11 the defendants not guilty of the conspiracy charged. This
12 is so, even if you find that some other conspiracy
13 existed, or that some agreement to violate if law had been
14 reached other than the one charged in the indictment.
15 Thus, even if you find that the defendant you are
16 considering was the member of a conspiracy, but not the
17 one charged in the indictment, you must find the defendant
18 not guilty of the conspiracy charged in count one.
19 The government charges the defendants under count
20 one of the indictment with participating in the one
21 conspiracy charged in that count. Therefore, the
22 government is required to prove the one conspiracy charged
23 in the indictment, and the defendant you are considering 24 was a member of that conspiracy. 25 If you find that the government has proven two
HA
RRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8665
1 separate conspiracies, and the defendant you are
2 considering was not a member of the conspiracy charged in
3 the indictment, the government has not sustained its
4 burden of proof and you must acquit the defendant on the
5 conspiracy count.
6 In sum, if the government failed to prove the
7 conspiracy charged in the indictment, you must acquit all
8 the defendants.
9 If you find that the defendant you are
10 considering was a member of another conspiracy, not the
11 one charged in the indictment, then you must acquit that
12 defendant.
13 In other words, to find a defendant guilty you
14 must find that he or she was a member of the conspiracy
15 charged in the indictment and not some other conspiracy.
16 In your consideration of the evidence in the case
17 you should first determin
e whether the government proved
18 beyond a reasonable doubt that the conspiracy existed as
19 alleged in the indictment.
20 If you conclude that the conspiracy did exist,
21 you should next separately determine whether the
22 government proved that the defendant you are considering
23 knowingly and willfully became a member of that 24 conspiracy. 25 If you determine that the government has proved
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8666
1 beyond a reasonable doubt from the evidence in the case
2 that the conspiracy alleged in the indictment was
3 willfully formed, and that the defendant you are
4 considering knowingly and willfully became a member of
5 that conspiracy, and that thereafter one or more of the
6 conspirators knowingly committed one or more of the overt
7 acts charged in furtherance of some object or purpose
of
8 that conspiracy, then there may be a conviction even
9 though the conspirators may not have succeeded in
10 accomplishing their common object or purpose, and in fact,
11 may have failed to accomplish such objects or purpose.
12 However, if you determine that the government
13 failed to prove any of these elements beyond a reasonable
14 doubt, you must acquit the defendant you are considering
15 as to count one.
16 MR. WHITE: Your Honor, can we go back to the
17 multiple conspiracy for just one moment?
18 THE COURT: Yes.
19 MR. WHITE: The third paragraph, at least of
20 Mr. Nelson's requests. And I guess it corresponds to the
21 charge --
22 THE COURT: Not entirely.
23 MR. WHITE: I mean in terms of the paragraph. 24 THE COURT: Yes. 25 MR. WHITE: At one point it restates basically
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPO
RTER 8667
1 that the personnel can change in a conspiracy.
2 It seems to me that it is not so much that the
3 personnel are changing, but there are two separate
4 companies, so I think it would clarify it more if we
5 repeated the sentence or two that you previously said you
6 would give with respect to membership, namely, that a
7 defendant need not have known the identities of every
8 other member or have been told about all their
9 activities. That's the main point of the germane theory
10 as to conspiracy.
11 THE COURT: No. I think it would complicate or
12 confuse it. You have an exception.
13 Anything else?
14 MR. TRABULUS: Before we move to the second or
15 following counts, I think there were certain overt acts
16 set forth in the indictment for count one which the
17 government did not prove and, therefore, it should not be
18 submitted to the jury. Does your Honor want to consider
19 that at this point?
20 THE COURT: Yes. What are those?
21 MR. TRABULUS: I am on the indictment, page 10,
22 overt act C.
23 THE COURT: Mr. White, do you want to respond to 24 each one of these things? I would not rely on my memory 25 at that time all.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8668
1 MR. TRABULUS: It is in fact C, D, E and F on
2 that page.
3 Shall I proceed to the next page?
4 THE COURT: No. Let them take a look at that.
5 (Whereupon, at this time there was a pause in the
6 proceedings.)
7 MR. WHITE: Your Honor, Mr. Trabulus is correct.
8 THE COURT: We are deleting, C, D, E and F on
9 page 10. Ms. Scott, you will amend the indictment
10 accordingly, correct?
11 MR. WHITE: Yes.
12 THE COURT: Correct, Ms. Scott?
13 MS. SCOTT: Yes, your Honor.
14 MR. TRABULUS: Page 11, K, M, as in Michael, N as
15 in Nathan, O as in Oscar.
16 MR. JENKS: O was dismissed.
17 MR. TRABULUS: Yes, so they are not in here.
18 THE COURT: So O is out; is that right?
19 MR. JENKS: Yes, that was dismissed.
20 MR. TRABULUS: K, L and M also.
21 THE COURT: I am waiting to hear from the
22 government on that.
23 MR. WHITE: I need to look at the exhibits, your 24 Honor. 25 (Whereupon, at this time there was a pause in the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8669
1 proceedings.)
2 MR. WHITE: Your Honor, here Mr. Trabulus is
3 incorrect.
4 THE COURT: Which one?
5 MR. WHITE: All of them, your Honor.
6 THE COURT: You say O is in?
7 MR. WHITE: I believe so. Let me explain.
8 With respect to K, Government's Exhibit
21-C is
9 an order form that bears that date. And Annette Haley's
10 name and the name of the customer, William Sadler. The
11 testimony at the trial is that that order form was
12 prepared by the salesperson who spoke on the phone with
13 the customer.
14 THE COURT: Did somebody testify that Annette
15 Haley had a telephone conversation with William Sadler?
16 MR. WHITE: No. It is reflected on an order
17 form, a document, which is Exhibit 21-C.
18 THE COURT: What does the order form say?
19 MR. WHITE: The order form has Annette Haley
20 listed as the salesperson. It bears that date. It bears
21 Mr. Sadler and his address in St. Louis.
22 THE COURT: You say that that is circumstantial
23 evidence that she made the telephone call? 24 MR. WHITE: Yes, your Honor. The description of 25 how those forms were prepared was that the salesperson
HAR
RY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8670
1 would speak on the telephone with the customer, and either
2 at that time or shortly thereafter prepare the order form.
3 THE COURT: All right.
4 And what about M for Mike?
5 MR. GEDULDIG: I would like to be heard on that,
6 your Honor.
7 There is contrary testimony also from government
8 witnesses that it was not necessarily so that the order
9 form reflected the person who spoke on the telephone with
10 the prospective listee, that there could be
11 circumstances -- I think in Mr. Saffer's case, he talked
12 about borrowing, where one salesperson would make the call
13 and give the call to another salesperson to fill out the
14 form although they never made the call, and they would
15 borrow sales, one to the other.
16 There was no testimony that Annette Haley had a
17 conversation
with Mr. Sadler. The only evidence before
18 the jury with regard to that paragraph is that Ms. Haley
19 is getting a percentage or commission on that sale. There
20 was no evidence, circumstantial or otherwise, in my view,
21 that would show that Ms. Haley actually had the
22 conversation with Mr. Sadler.
23 THE COURT: Then the jury will not find beyond a 24 reasonable doubt that the overt act existed, this overt 25 act existed. But there is circumstantial evidence that
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8671
1 the person's name on the order form was the person who
2 made the call. There is also evidence that that didn't
3 occur. Let the jury determine that. I will overrule you
4 on K.
5 What is the next one?
6 MR. WHITE: Next is overt act M like in Mary,
7 that invoice referred to in that overt act is Exhibit
8 28-C, like in Charley. It bears the same date. It bears
9 the name of Mr. Sainte, S A I N T E. And, again, the
10 testimony was that, and we have been over this before,
11 that these invoices would be sent out through the U.S.
12 mails as a regular course of business.
13 THE COURT: There is such an invoice in
14 evidence?
15 MR. WHITE: Yes, 28-C.
16 THE COURT: That's overruled.
17 What about N for Negative? Is that the same as
18 K?
19 MR. WHITE: I didn't copy down N as one they
20 mentioned.
21 MR. TRABULUS: I did. I assume the arguments
22 there is the same with respect to K. If there is an
23 invoice or order form comparable to the one in K I will 24 withdraw the objection. 25 MR. WHITE: I skipped that one, and I will have
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8672
1 to look it up.
2 (Whereupon, at this time there was a pause in the
3 proceedings.)
4 MR. WHITE: That's the same situation.
5 THE COURT: The exception is denied as to N for
6 Negative.
7 What about O?
8 MR. WHITE: With respect to O, it indicates that
9 a solicitation letter was sent on or about that date. If
10 that solicitation letter is not in evidence -- well, if
11 you look at 40-D, like in Dog, there is a lead card that
12 was returned by Mr. Puller.
13 The evidence was that the lead card was included
14 with the solicitation letter, your Honor. And
15 Mr. Puller's card, in turn, from Hicksville to Who's Who
16 Worldwide, so there is certainly enough evidence to
17 conclude that they sent the solicitation letter and the
18 card.
19 THE COURT: I agree. And we will leave overt act
20 O for Oboe in.
21 Anything else with respect to that?
22 MR. T
RABULUS: Yes, page 12.
23 I assume with regard to S there is an order form 24 to support that. Because Mr. Searle, S E A R L E, didn't 25 testify.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8673
1 THE COURT: Let's find out.
2 MR. WHITE: I will have to look that one up.
3 THE COURT: Go ahead.
4 MR. WHITE: It looks like there are no documents
5 from Mr. Searle. So that one is out.
6 THE COURT: We will delete S.
7 MR. TRABULUS: Your Honor, with regard to T,
8 there is a tape recording in evidence. It doesn't support
9 what is in T. In the tape recording, the person speaking
10 doesn't say to the person who is listening that he
11 shouldn't use his real name in telephone conversations
12 with potential customers. What he says is don't sign your
13 real name on some kind of form which is not really
14 specified. We
don't know what the form is. So he does
15 say, so you can't be identified in a court of law. So, it
16 is different than that. And on that basis it is not
17 supported.
18 MR. WHITE: Your Honor, the recording I
19 believe -- I believe the testimony was that the reference
20 was to the order form, or some other document, and the
21 question that was put to the supervisor was, do I put the
22 name, the phone name you gave me, or do I put my real
23 name. There was no dispute that he was given that phony 24 name to use on the phone with customers. So this is 25 substantially correct, even if the meaning is slightly
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8674
1 different.
2 THE COURT: Is there proof that the conversation
3 that was recorded in that conversation, a sales manager
4 advised a salesperson not to use his real name i
n
5 telephone conversations with potential customers? Does it
6 say that? Did he say that? If he didn't say it I will
7 strike it out.
8 MR. WHITE: Not the tape, your Honor. But there
9 is testimony that the witness was told that. Then the
10 tape says, don't put your name -- put that phony name, not
11 your real name on this document.
12 THE COURT: Well, if the tape said it, the
13 testimony would not be accurate. It is the tape that
14 would govern.
15 MR. WHITE: I am talking about two separate
16 conversations.
17 THE COURT: You are saying there is other
18 evidence in that a sales manager advised a Sterling Who's
19 Who salesperson not to use his real name in telephone
20 conversations in order to avoid later being identified in
21 a court of law? Did he say that in this other
22 conversation?
23 MR. TRABULUS: No. 24 MR. WHITE:
No. Let me be clear. 25 Mr. Ihlenfeldt testified when he worked at
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8675
1 Sterling, a supervisor instructed him to use a different
2 name, not his real name on the phone.
3 THE COURT: But never to avoid later being
4 identified in a court of law?
5 MR. WHITE: The second part is that
6 Mr. Ihlenfeldt later asked the supervisor about some form,
7 do I put my real name on it or the phony name you gave
8 me? With respect to that he is told don't put the real
9 name.
10 THE COURT: I am striking it. There is no
11 testimony that says exactly that. You are putting
12 together several conversations. I am striking it.
13 What else?
14 MR. TRABULUS: On page 13, both W and X pertain
15 to members who did not testify. And I guess the question
16 is: Is there documentary evidence t
o establish those
17 things circumstantially. I frankly don't know the
18 exhibits, if there are any.
19 MR. WHITE: The same as before with respect to
20 these. With respect to W, there is a lead card returned
21 by Mr. Olsen in evidence, which is 54-D, like in Dog.
22 With respect to overt act X, there is an order
23 form indicating that Mr. Rubin was the salesman with that 24 date and that customer, and that's Rule 55-C, like in 25 Charley.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8676
1 THE COURT: I am denying the request. You have
2 an exception.
3 Counts two through --
4 MS. SCOTT: Your Honor, before we move on, I have
5 an additional submission, which is the request that your
6 Honor provide a Pinkerton charge. And I am handing up a
7 copy to your Honor right now.
8 Basically, your Honor, what the Pinke
rton charge
9 allows is to tell the jury if a defendant was found to be
10 a member of the mail fraud conspiracy, the jury can, but
11 they are not required to, find the defendant guilty of the
12 substantive crimes charged against that defendant, in
13 whatever counts they are. We have a lot of counts here.
14 And provided that the person who actually committed the
15 fraud, who was a member of the conspiracy, the crime is
16 committed in furtherance of the conspiracy, and that this
17 mail fraud count could be foreseen as a consequence of the
18 conspiracy.
19 I have support here from the Second Circuit for
20 such a charge.
21 THE COURT: What is the support?
22 MS. SCOTT: United States against Blackmon,
23 B L A C K M O N, the cite is 839 F.2d 900. The page cite 24 is 909. 25 In that case the Court does discuss the charge as
HARRY RAPAPO
RT, CSR, CP, CM OFFICIAL COURT REPORTER 8677
1 I just described it to you and emphasized that it was
2 important that the judge inform the jury that they could
3 but did not have to find the defendant guilty of the
4 subsequent counts that resulted in the conspiracy.
5 THE COURT: I will have to take a look at that.
6 MS. SCOTT: Okay.
7 I have another cite to support that, United
8 States against Gallerani, G A L L E R A N I. The cite is
9 68 F.3d 611. And the page cite is 620.
10 THE COURT: This is with regard to the mail
11 fraud?
12 MS. SCOTT: Yes.
13 THE COURT: Substantive mail fraud?
14 MS. SCOTT: Yes.
15 THE COURT: I will take a look at it and let you
16 know.
17 Now, counts 2 through 52, mail fraud. If I get
18 the numbers wrong, let me know.
19 These counts charge the defendant Bruce Gordon,
20 Who's Who
Worldwide, Sterling Who's Who, Tara Garboski,
21 Oral Frank Osman, Laura Weitz, Annette Haley, Scott
22 Michaelson and Mr Shortcuts, with knowingly and willfully
23 engaging in a scheme to defraud and to obtain money 24 property from potential customers of Who's Who and 25 Sterling Who's Who by means of false and fraudulent
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8678
1 pretenses, representations and promises.
2 By the way, is Sterling involved in this?
3 MR. JENKS: Mail fraud counts?
4 THE COURT: Yes.
5 MR. JENKS: Yes, your Honor.
6 THE COURT: Do these -- here the defendants are
7 charged with placing and causing to be placed in
8 authorized depositories for mail, matter to be delivered
9 by the United States Postal Service as more particularly
10 identified in the indictment.
11 I will now read counts two through 52.
12 If relevant statute on this subject is Title 18,
13 United States Code, Section 1341. That statute provides
14 in pertinent part that, quote, whoever having devised or
15 intending to devise any scheme or artifice to defraud, or
16 for obtaining money or property by means of false or
17 fraudulent pretenses, representations or promises . . .
18 and for the purpose of executing such scheme or artifice,
19 or attempting so to do, places in any post office or
20 authorize depository for mail matter, any matter or thing
21 whatever, and for purposes of executing such scheme or
22 artifice or attempting so to do, places in any post office
23 or authorize depository for mail, any matter or thing, 24 whatever, to be sent or delivered by the Postal Service 25 . . . or knowingly causes to be delivered by mail
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
8679
1 according to the directions thereof . . . any such matter
2 or thing, shall be guilty of a crime.
3 MR. WHITE: Your Honor, I don't think we included
4 it in our charge, but I think in quoting the statute and
5 describing it, we should include the part about taking or
6 receiving from the mail certain items, since a number of
7 the mailings were mailings sent by customers to Who's Who.
8 THE COURT: Do you have a copy of the statute
9 with you?
10 MR. WHITE: I do.
11 THE COURT: Can I see it?
12 (Handed to the Court.)
13 THE COURT: Mean or takes or receives therefrom?
14 MR. WHITE: Yes. And that language is in the
15 charging language in the count, too.
16 THE COURT: You have it there?
17 MR. WHITE: Yes.
18 THE COURT: I didn't see it there.
19 Now I want to caution you that this is not a
20 civil proceeding. The defend
ants cannot be convicted of a
21 crime as to mail fraud merely because their conduct was
22 sales puffery. The government must prove that the
23 defendants knowingly, intentionally and willfully 24 committed the crimes involving mail fraud, the elements of 25 which crimes I am now going to instruct you.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8680
1 In order to sustain this mail fraud charge, the
2 government must prove each of the following elements
3 beyond a reasonable doubt:
4 First, that there was a scheme or artifice to
5 defraud and to obtain money or property by false and
6 fraudulent pretenses, representations or promises as
7 alleges in the indictment.
8 Second, that the defendant you are considering
9 knowingly or willfully devised or participated in the
10 scheme or artifice to defraud with knowledge of its
11 fraudulent nature and with specific intent to defraud.
12 Third, in execution of that scheme the defendant
13 used or caused the use of the mails as specified in the
14 indictment.
15 First element, existence of scheme or artifice.
16 The first element that the government must prove
17 beyond a reasonable doubt is that there was a scheme or
18 artifice to defraud potential customers of Who's Who and
19 Sterling Who's Who, by means of false or fraudulent
20 pretenses, representations and promises.
21 A scheme or artifice is merely a plan for the
22 accomplishment of an objective.
23 A scheme to defraud is any plan, device, or 24 course of action to obtain money or property by means of 25 false or fraudulent pretenses, representations or promises
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8681
1 reasonably calculated to dece
ive persons of average
2 prudence.
3 Fraud is a general term which embraces all the
4 various means in which human ingenuity can devise and
5 which is reported to by an individual to again advantage
6 over another by false representations, suggestions or
7 suppression of the truth, or by a deliberate disregard of
8 the truth.
9 Thus, a scheme to defraud is a plan to obtain
10 something of value, or to assist someone else to obtain
11 something of value by trick, deceit, deception or swindle.
12 A statement or representation is false if it is
13 untrue when made, and was then known to be untrue by the
14 person making it, or causing it to be made.
15 A representation or statement is fraudulent if it
16 was falsely made with the intent to deceive. Deceitful
17 statements, half truths, or the concealment of material
18 facts may also constitute fraud under this
statute.
19 The deception need not be premised upon
20 verbalized words alone. The arrangement of the words, or
21 the circumstances in which they are used may convey the
22 false and deceptive appearance.
23 If there is deception, the manner in which it is 24 accomplished is immaterial. The fraudulent representation 25 or statement must relate to a material fact or matter. A
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8682
1 material fact is one which is reasonably expected to be of
2 concern to a reasonable or prudent potential Who's Who or
3 Sterling, in relying on the misrepresentation or statement
4 in making the decisions.
5 This means that if you find a particular
6 statement of fact to have been false, you must determine
7 whether that statement was one that a reasonable potential
8 customer would have considered importan
t in making
9 decisions.
10 The same principle applies to fraudulent half
11 truths, or omissions of material facts.
12 Further, it is not necessary that the defendant
13 you are considering actually realized any gain from the
14 scheme, or the intended victim actually suffered any
15 loss.
16 In this case it so happens that the government
17 does contend that the proof establish, that the potential
18 customers were defrauded and did lose money. Although
19 whether or not the scheme actually succeeded is really not
20 the question. You may consider whether it did succeed in
21 determining whether a scheme existed.
22 A scheme to defraud need not be shown by direct
23 evidence, but may be established by all the circumstances 24 and facts in the case. 25 The representations which the government charges
HARRY RAPAPORT, CSR, CP, CM OFFICIAL CO
URT REPORTER 8683
1 were made as part of the scheme to defraud are set forth
2 in the indictment.
3 In this regard I instruct you that the
4 prosecution must prove beyond a reasonable doubt that one
5 or more false, material misrepresentations, fraudulent
6 half truths, or fraudulent omissions of material fact were
7 made by each defendant you are considering and that they
8 were made in furtherance of the alleged scheme to defraud.
9 Also, in this regard I instruct you that if the
10 government fails to prove beyond a reasonable doubt that
11 each defendant you are considering made one or more
12 material misrepresentations to a potential customer, you
13 must acquit that defendant.
14 In order to find a defendant guilty of mail
15 fraud, you must find beyond a reasonable doubt that the
16 defendant intended to defraud the potential customer.
17 In addition, to be guilty of participating in a
18 fraudulent scheme, the defendant you are considering must
19 have contemplated that the potential customer would lose
20 money. It is not enough that the defendant intended to
21 receive a financial gain or advantage from the alleged
22 scheme, or even that he or she succeeded in obtaining such
23 a benefit unless he or she intended that the potential 24 customer sustain a corresponding loss. There must be a 25 direct relationship between the defendant's
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8684
1 misrepresentations and the intended deprivation of money.
2 In order to be guilty of fraud, the
3 representations made by the defendant to potential
4 customers must be of such a nature that if they were
5 successful, it is reasonably probable that the victim,
6 namely, the poten
tial customer, would have suffered a
7 financial loss.
8 If you find that the government failed to sustain
9 its burden of proof that a scheme to defraud existed as
10 alleged in counts 2 through 52, then you must acquit all
11 the defendants as to those counts, if you find that the
12 government has sustained its purpose, and a scheme to
13 defraud existed as charged, you should next consider the
14 second element, participation in the scheme with intent to
15 defraud.
16 The second element that the government must prove
17 beyond a reasonable doubt is that the defendant you are
18 considering participated in the scheme to defraud
19 knowingly, willfully and with the specific intent to
20 defraud.
21 Knowingly means to act voluntarily and
22 deliberately; rather than mistakenly or inadvertently.
23 Willfully means to act knowingly and purposely, with an
24 intent to do something the law forbids. That is to say 25 with a bad purpose or to disobey or to disregard the law.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8685
1 Intent to defraud means to act knowingly and with
2 the specific intent to deceive for the purpose of causing
3 some financial loss to another.
4 The question of whether a person acted knowingly,
5 willfully and with intent to defraud is a question of fact
6 for you to determine like any other fact question. The
7 question involves one's state of mind. Essential to a
8 conviction for a scheme to defraud under Section 1341, is
9 proof beyond a reasonable doubt of the defendant's
10 fraudulent intent. Namely, the defendant's intent to
11 deceive causing an actual financial loss. The significant
12 fact is the defendant's intent and purpose. Although the
13 government n
eed not prove that the scheme to defraud was
14 successful or complete, the government must prove beyond a
15 reasonable doubt that the defendant contemplated some
16 actual financial loss to the purported victim, namely, the
17 potential customers. Misrepresentations amounting only to
18 a deceit is insufficient to convict under Section 1331.
19 The deceit must be contemplated with a financial loss to
20 the victim.
21 Direct proof of knowledge and fraudulent intent
22 is almost never available. It would be a rare case where
23 it could be shown that a person wrote or stated that as of 24 a given time in the past he or she committed an act with 25 fraudulent intent. Such direct proof is not required.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8686
1 The ultimate facts of knowledge and criminal
2 intent, though subjective may be establis
hed by
3 circumstantial evidence based upon a person's outward
4 manifestations, his or her words, conduct, acts, and all
5 the surrounding circumstances disclosed by the evidence
6 and the rational and logical inferences that may be drawn
7 from them.
8 As I advised you, circumstantial evidence, if
9 believed, is of no less value than direct evidence. In
10 either case the essential elements of the crime charged
11 must be established beyond a reasonable doubt.
12 Since an essential element of the crime charged
13 is intent to defraud, it follows that good faith on the
14 part of a defendant is a complete defense to a charge of
15 mail fraud.
16 I instruct you, however, that a defendant has no
17 burden to establish a defense of good faith. The burden
18 is on the government to prove fraudulent intent and
19 consequent lack of good faith beyond a reasonable
doubt.
20 Under the mail fraud statute even false
21 representations, or statements, or omissions of material
22 facts, do not amount to a fraud unless done with
23 fraudulent intent. However misleading or deceptive a plan 24 may be, it is not fraudulent if it was devised or carried 25 out in good faith. An honest belief in the truth of the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8687
1 representations made by a defendant is a good defense,
2 however inaccurate the statements may turn out to be.
3 Moreover, not every untrue statement designed to
4 gain the sympathetic ear of a potential customer is
5 forbidden by the mail fraud statute.
6 This I am adding what you asked, Mr. Trabulus.
7 In fact, I find that your requests to charge were very
8 helpful. So were the government's, of course, but yours
9 was very helpful in that t
hey were fair. Which I paid
10 more attention than usual. I do pay attention of course,
11 but I thought they were very fair.
12 I don't accept everything you gave me, so don't
13 get excited or carried away now.
14 Moreover, not every untrue statement designed to
15 gain the sympathetic ear of a potential customer is
16 forbidden by the mail fraud statute.
17 To constitute either a scheme to defraud, or the
18 making of false or fraudulent pretenses, representations
19 or promises under the mail fraud statute, the false
20 representations must be directed to the quality, adequacy
21 or price of what is to be sold.
22 Furthermore, if a defendant makes what he or she
23 knows to be false representations with the intent that 24 those false representations induce a purchaser to make a 25 purchase, but the defendant believes in good faith that
HARRY RAP
APORT, CSR, CP, CM OFFICIAL COURT REPORTER 8688
1 those false representations are not directed to the
2 quality, adequacy of what is to be sold, that defendant
3 then lacks specific intent to defraud and cannot be guilty
4 of mail fraud through such false representations. This is
5 so even if to a buyer's mind those false representations
6 actually do concern the quality, adequacy or price of what
7 is to be sold, or the nature of the agreement between
8 buyer and seller.
9 What is determinative is the defendant's own
10 personal belief as to whether they do.
11 Accordingly, I instruct you that even if you find
12 that a defendant made or was responsible for the making of
13 false representations to customers, and even if you find
14 that those false representations did in fact concern the
15 quality, adequacy or price of what was to be sold, or to
16 the nature of the agreement between buyer and seller, you
17 must find the defendant not guilty, unless you find beyond
18 a reasonable doubt that the defendant believed that they
19 did concern the quality, adequacy or price of what was to
20 be sold.
21 As a practical matter then, in order to sustain
22 this mail fraud charge against the defendant you are
23 considering, the government must establish beyond a 24 reasonable doubt that he or she knew that his or her 25 conduct as a participant in the scheme was calculated to
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8689
1 deceive the potential customers, and nevertheless he or
2 she join the defendant's fraudulent scheme for the purpose
3 of causing some financial loss to another.
4 To conclude on this element, if you find that the
5 government failed to establish beyond a reasona
ble doubt
6 that the defendant you are considering was a participant
7 in the scheme to defraud, and had the specific intent to
8 deceive, you must acquit the defendant. On the other
9 hand, if you find that the government has established
10 beyond a reasonable doubt not only the first element,
11 namely, the existence of a scheme to defraud, but also
12 this second element, that the defendant you are
13 considering was a knowing participant and acted with
14 specific intent to defraud, and if the government also
15 establishes the third element which I am about to instruct
16 you of, then you have a sufficient basis upon which to
17 convict the defendant.
18 Third element, use of the United States mail.
19 The third and final element that the government
20 must establish is that the United States mail service was
21 used in furtherance of the scheme to defraud.
22 It is not necessary for the defendant you are
23 considering to be directly or personally involved in 24 sending the mailings, as long as the sending of the 25 mailings was reasonably -- in the execution of the fraud
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8690
1 in which the defendant is accused to have been
2 participating.
3 In this regard it is sufficient to establish this
4 element of the crime, if the evidence justifies a finding
5 that the defendant caused the Postal Service to be used by
6 someone else. And this does not mean that the defendant
7 himself or herself must have the specifically authorized
8 others to send the mailings. When one does an act with
9 knowledge that the use of the mails will follow in the
10 ordinary course of business, or where such use of the
11 mails can reasonably be foreseen, although not
actually
12 intended, then he or she causes the Postal Service to be
13 used as intended by the statute.
14 Further, the mail matter need not disclose on its
15 face a fraudulent representation or purpose or request for
16 money, but need only be intended to further or assist in
17 carrying out the scheme to defraud.
18 With respect to the use of the mails, the
19 government must establish beyond a reasonable doubt that
20 the particular mailings charged in the indictment, namely,
21 the lead cards, invoices and solicitation letters were in
22 furtherance of the scheme to defraud.
23 Aiding and abetting. 24 With regard to Count 2, the government has 25 charged the defendants with aiding and abetting the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8691
1 commission of the crime of mail fraud.
2 The aiding and abetting sta
tute, Title 18 of the
3 United States Code, Section 2 provides that, quote,
4 whoever commits an offense against the United States, or
5 aids, abets, or counsels, commands, induces or procures
6 its commission is punishable as a principal.
7 Whoever willfully causes an act to be done, which
8 if directly performed by him or another would be an
9 offense against the United States, is punishable as a
10 principal.
11 Under the federal aiding and abetting statute it
12 is not necessary for the government to show that the
13 defendant himself or herself physically committed the
14 crime with which he or she is charged in order for you to
15 find the defendant guilty of the crime charged in counts 2
16 through 52.
17 A person who aids and abets another to commit an
18 offense is just as guilty of that offense as if he or she
19 committed it himself or herself.
20 Accordingly, you may find the defendant guilty of
21 the offense charged in counts 2 through 52, if you find
22 that the government proved beyond a reasonable doubt that
23 another person actually committed the offense with which 24 the defendant is charged, and that the defendant aided or 25 abetted that person in the commission of the offense. As
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8692
1 you can see, the first requirement is that you find that
2 another person has committed the crime charge in counts 2
3 through 52.
4 Obviously no one can be convicted of aiding or
5 abetting the criminal acts of another if no crime was
6 committed by the other person in the first place. But if
7 you do find that a crime was committed, then you must
8 consider whether the defendant you are considering aided
9 or abetted the commission o
f the crime.
10 In order to aid or abet another to commit a
11 crime, it is necessary that the defendant willfully and
12 knowingly associate himself or herself in some way with
13 the crime, and that he or she willfully or knowingly seeks
14 by some act to help make the crime succeed.
15 Participation in a crime is willful if action is
16 taken voluntarily and intentionally, or in a case of a
17 failure to act, with the specific intent to fail to do
18 something the law requires to be done, that is to say with
19 a bad purpose either to disobey or to disregard the law.
20 The mere presence of a defendant where a crime is
21 being committed, even coupled with knowledge by the
22 defendant that a crime is being committed, or the mere
23 acquiescence by a defendant in the criminal conduct of 24 others, even with guilty knowledge is not sufficient to 25 establish aiding
and abetting.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8693
1 An aider or abettor must have some interest in
2 the criminal venture.
3 To determine whether the defendant aided or abets
4 the commission of the crime with which he or she is
5 charged in counts 2 through 52, ask yourselves these
6 questions: Did the defendant participate in the crime
7 charged as something he or she wished to bring about? Did
8 the defendant associate himself or herself with the
9 criminal venture, knowingly and willfully? Did the
10 defendant seek by his or her actions to make the criminal
11 venture succeed?
12 If the government proves beyond a reasonable
13 doubt that the defendant did all these things, then the
14 defendant is an aider and abettor, and, therefore, guilty
15 of the offense.
16 If on the other hand, your answers to thi
s series
17 of questions are no, then the defendant is not an aider
18 and abettor and you must find him or her not guilty as to
19 counts 2 through 52.
20 In sum, if you find that the defendant you are
21 considering committed the crimes charged in counts 2
22 through 52, or aided and abetted in the commission of
23 those crimes, then you should find that defendant guilty 24 of the crime charged -- the crimes charged in those 25 counts.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8694
1 On the other hand, if the government has not
2 satisfied you beyond a reasonable doubt that the defendant
3 either knowingly and willfully committed the crimes
4 charged in Counts 2 through 52, or aided and abetted in
5 the commission of those crimes, then you must find him or
6 her not guilty of the crimes charged in those counts.
7 Cou
nt 53 --
8 MR. TRABULUS: Your Honor, can we take a break at
9 this point?
10 THE COURT: We will take a ten-minute recess.
11 Did you want to say something before?
12 MR. WHITE: I will do it during -- after the
13 break.
14 THE COURT: Do it now so I can look it up and
15 appear to know what I am doing.
16 MR. WHITE: Your Honor, I wanted to make two
17 comments about the first element of the mail fraud scheme.
18 First, I think your Honor said that they must
19 find that each defendant made a statement to a customer
20 containing one of the misrepresentations. I think that
21 should be amended to say made or caused to be made,
22 because Mr. Gordon and some others were not actually on
23 the phone with customers. 24 THE COURT: Count 1, you say? 25 MR. WHITE: Element 1, your Honor.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
8695
1 THE COURT: I am sorry, element one, yes.
2 MR. WHITE: I may have misheard it.
3 THE COURT: You are right, were made and caused
4 to be made is correct.
5 MR. WHITE: The other comments, your Honor, the
6 government requested you also instruct the jury in line
7 with United States against Schwartz, that it is not
8 necessary that the harm contemplated be monetary in
9 nature. It is sufficient if it goes to some essential
10 element of the bargain, and that you can find the
11 defendants -- that that requirement is satisfied if the
12 defendants intended by fraud to obtain from customers
13 money that they would not have given to the defendants
14 were it not for the fraudulent misrepresentation. That
15 instruction was specifically approved by the Second
16 Circuit. I believe it is relevant here.
17 THE COURT: I don't get it. What did
I not do?
18 MR. WHITE: In other words, the jury should be
19 instructed that the contemplated harm need not necessarily
20 be monetary.
21 THE COURT: In this case it is though.
22 MR. WHITE: Correct. Then it should be explained
23 in this fashion: That it could constitute a fraud if they 24 would not have engaged in the transaction, but for the 25 fraudulent misrepresentations, namely, that the fraud is
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8696
1 obtaining their purchase by false representations,
2 regardless of what they got, as opposed to what they got
3 was worth less than what they were promised.
4 THE COURT: No. I decline to charge it. I think
5 it is confusing. I know what you are talking about. They
6 were deprived of their money, which the statute says is
7 because of this. The reason they were deprived of their
8 money is because they didn't get to be the elitist or ego
9 person they were supposed to be.
10 I mentioned the quality and the price, that is in
11 there. But I decline to confuse the jury.
12 Anything else, Mr. White?
13 MR. WHITE: Your Honor, I am not sure how this
14 would confuse them. One sentence that says, you can find
15 the defendants inflicted such harm if you believe in
16 substance that the customers would not have engaged in
17 this transaction but for the fraudulent statement.
18 THE COURT: I decline to charge that.
19 Anything else?
20 MR. WHITE: No.
21 THE COURT: We will take a ten-minute recess.
22
23 (Whereupon, a recess is taken.) 24 25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8697
1 THE COURT: Count 53, perjury.
2 The indictment charges the defendant Bruce Gor
don
3 with making false declarations before a federal court at
4 the trial of the lawsuit that Reed Elsevir brought against
5 Who's Who Worldwide.
6 The indictment reads as follows.
7 The indictment charges the defendant Bruce Gordon
8 with violating Section 1623 of Title 18 of the United
9 States code which provides in part, quote, whoever under
10 oath . . . in any proceeding before . . . any court
11 . . . of the United States knowingly makes any false
12 material declaration is guilty of a crime.
13 Stated simply perjury is the willful giving of
14 false testimony before a competent tribunal while under
15 oath knowing the testimony is false as to a material
16 matter.
17 The indictment charges that the defendant made
18 such false declarations as set forth in the indictment in
19 his testimony in a civil trial in the federal court of the
20 East
ern District of New York.
21 In order to prove the perjury charge against the
22 defendant Bruce Gordon as charged in Count 53, the
23 government must establish each of the following four 24 elements beyond a reasonable doubt: 25 First, that the testimony was given before a
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8698
1 federal court while the defendant Bruce Gordon was under
2 oath;
3 Second, that such testimony was false as set
4 forth in the indictment;
5 Third, that such false testimony was willfully
6 and knowingly given in that the defendant Bruce Gordon
7 knew that the testimony was false; and
8 Fourth, as to the matters as to which it is
9 charged that the defendant Bruce Gordon gave false
10 testimony were material to the issues under inquiry in the
11 civil case then being tried.
12 There is no iss
ue as to the first element. With
13 respect to the first element, that the defendant Bruce
14 Gordon took an oath to testify truly, the evidence shows,
15 and there appears to be no dispute that the defendant
16 appeared before the federal court on or about February
17 12th, 1994 and February 22nd, 1994 and took an oath to
18 testify truthfully.
19 The second element, falsity --
20 MR. WHITE: Your Honor, the dates are the 17th
21 and the 22nd.
22 THE COURT: February 17th and 22nd?
23 MR. WHITE: Yes. 24 THE COURT: Okay. 25 Your concern are with the second, third and
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8699
1 fourth elements of perjury. The second element is
2 falsity. You must determine whether any part of the
3 testimony given by the defendant Bruce Gordon as set forth
4 in the indictment was false.
5 An answer to a question is false when it is
6 contrary to the fact, that is when it is not true.
7 The truth or falsity of an answer must be
8 determined by the facts existing at the time the answer
9 was made.
10 In reviewing testimony which is alleged to have
11 been false, you should consider such testimony in the
12 context of the sequence of questions asked and answers
13 given.
14 The words used should be given their common and
15 ordinary meaning, unless the context clearly shows that a
16 different meaning was understood by both the questioner
17 and the witness.
18 The burden is upon the government to establish
19 beyond a reasonable doubt that the answers made by the
20 defendant Bruce Gordon in the federal civil trial were in
21 fact false.
22 Count 53 contains answers given by the defendant
23 Bruce Gordon reciting more than one fa
ct. It is not 24 necessary that the government prove that each of these 25 factual statements is false. The government satisfies its
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8700
1 burden of proving falsity if it proves beyond a reasonable
2 doubt that any of the factual statements recited in Count
3 53 is false. However, and this is important, you may not
4 find the defendant guilty unless you all agree unanimously
5 that one particular answer is false. It is not enough
6 that you all believe that some answer given by the
7 defendant is false. That is, you cannot find the
8 defendant guilty if some of you think that only answer A
9 is false, and the rest of you think that answer B is
10 false. There must be one specific answer that all of you
11 believe is false in order to convict the defendant on this
12 count. If you should find th
at a particular question was
13 ambiguous, that is, subject to more than one
14 interpretation, and that the defendant Bruce Gordon
15 truthfully answered one reasonable interpretation of the
16 question under the circumstances presented, then such
17 answer would not be false.
18 Similarly, if you should find that the question
19 is clear, but the answer was ambiguous, and one reasonable
20 interpretation of such answer would be truthful, then such
21 answer would not be false.
22 In deciding whether the defendant's answers are
23 false, the answers must be given the natural meaning in 24 the context in which the words were used. If you find an 25 answer given by the defendant was literally true but
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8701
1 unresponsive to the question asked, you may not find that
2 answer false or conv
ict the defendant because of it. As
3 long as a statement or a reasonable interpretation of a
4 statement is narrowly or literally true, there can be no
5 conviction for perjury. This is so even if you find that
6 the answer was intentionally misleading.
7 Third element, willfully and knowingly given.
8 If you decide that any of the answers the
9 defendant Bruce Gordon gave were false, then you must
10 decide whether the defendant gave those answers knowingly
11 and willfully. That is, at the time the answers were
12 given did the defendant know and believe that the answers
13 were false. And if so, did the defendant give the answers
14 consciously and in the exercise of his free will. Unless
15 the government proves beyond a reasonable doubt that the
16 defendant both knew his answers were false and that he
17 purposely or intentionally gave the false answers, you may
18 not find the defendant guilty.
19 The requirement that you find the defendant Bruce
20 Gordon acted knowingly and willfully means that you may
21 not find the defendant guilty of perjury simply because
22 the defendant gave testimony which is factually
23 incorrect. The defendant may have given incorrect 24 testimony because of an honest mistake of facts, 25 confusion, haste, oversight or carelessness.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8702
1 If the defendant Bruce Gordon made an erroneous
2 incorrect statement due to a slip of the tongue or bad
3 memory, or through misunderstanding, the defendant would
4 not be guilty of making the false statement knowingly and
5 willfully. Your decision whether the defendant acted
6 knowingly and willfully in making any statements you find
7 to be false involves a decision about the defen
dant's
8 state of mind at the time the statements were made.
9 It is obviously impossible to ascertain or prove
10 directly what the operation of the defendant's mind was.
11 You cannot look into a person's mind to see what the state
12 of mind is or was. But a wise or intelligent
13 consideration of all the facts and circumstances shown by
14 the evidence and the exhibits in the case may enable you
15 to infer with a reasonable degree of accuracy what the
16 defendant's state of mind was.
17 In our every day affairs we are continuously
18 called upon to decide from the actions of others what
19 their state of mind is. Experience has taught us that
20 frequently actions speak louder, more clearly than spoken
21 or written words. Therefore, you may well rely in part on
22 circumstantial evidence in determining the defendant's
23 state of mind. 24 Proof of the
circumstances surrounding the 25 defendant's actions can supply an adequate basis for a
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8703
1 finding that the defendant acted knowingly and willfully.
2 The actions of an individual must be set in their time and
3 place. The meaning of a particular act may depend on the
4 circumstances surrounding it. Thus, you may consider
5 evidence which you recall and believe about the
6 defendant's actual knowledge of certain facts and
7 occurrences, as compared to the testimony he gave about
8 these facts and circumstances the extent to which
9 statements were made to conceal facts or events, if any,
10 and in general the manner in which certain actions were
11 undertaken by the defendant and by others with his
12 knowledge. You may consider whether the defendant had a
13 motive to lie and conceal the fa
cts.
14 The government is not required to prove the
15 existence of such a motive, let alone exactly what the
16 motive was. The government's failure to prove a motive
17 does not establish lack of guilt. But if you do find
18 evidence of a motive, that may help you decide what the
19 defendant's state of mind was.
20 Therefore, you should ask yourself whether the
21 defendant stood to gain any personal benefit from
22 concealing the truth, or whether he stood to avoid any
23 personal liability. 24 The fourth element that the government must prove 25 beyond a reasonable doubt is that the matter or matters as
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8704
1 to which it is charged that the defendant Gordon gave
2 false testimony were material to the issues under inquiry
3 in the civil case being tried in the federal court.
4 I instruct you that a statement is, quote,
5 material, end quote, if it has a natural tendency to
6 influence or be capable of influencing the decision of the
7 decision making body to which it was addressed -- in this
8 case, to the federal judge trying the civil case. That
9 is, it must relate to an important fact that would have a
10 natural tendency to influence his decisions as
11 distinguished from some unimportant or trivial detail. It
12 must establish this element by evidence that is clear,
13 unequivocal and convincing.
14 Count 54, obstruction of justice.
15 The defendants Gordon and Reffsin have been
16 charged in count 54 of the indictment with endeavoring to
17 obstruct the due administration of justice with regard to
18 proceedings in the bankruptcy court.
19 The indictment reads: The relevant statute is 18
20 United States Code Section 1503. It pr
ovides in part:
21 Whoever corruptly . . . endeavors to influence . . . or
22 impede . . . any court of the United States . . . or
23 corruptly . . . influences, obstructs, indeed, or 24 endeavors to influence, obstruct or impede the due 25 administration of justice shall be guilty of a crime.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8705
1 This law is designed to prevent a miscarriage of justice
2 resulting from corrupt methods. It is aimed at a variety
3 of means by which the orderly and due process of the
4 administration of justice may be impeded, thwarted, or
5 corrupted.
6 The due administration of justice refers to the
7 fair, impartial, uncorrupted and unimpeded investigation,
8 disposition or trial of any matter, civil or criminal, in
9 the courts of the United States. It includes every step
10 in a matter or proceedi
ng in the federal courts to ensure
11 the just consideration and determination of the rights of
12 the parties, whether government or individual. Thus, due
13 administration of justice includes, but is not limited to
14 a federal civil or bankruptcy proceeding.
15 The sweep of the statute extends to any corrupt
16 endeavor or effort to interfere with a federal judge's
17 function in the discharge of his or her duties.
18 The key word in the statute is "endeavor." As
19 used in this statute "endeavor" means to knowingly and
20 deliberately make any effort or any act, however contrived
21 to obstruct, impede or interfere with the Court
22 proceeding. It is the endeavor which is the gist of the
23 crime. Success of the endeavor is not an element of the 24 crime. Any effort, whether successful or not, that is 25 made for the purpose of corrupting, obstructing or
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8706
1 impeding the proceeding is condemned. To act "corruptly"
2 as that word is used in these instructions, means to act
3 voluntarily and deliberately, and for the purpose of
4 improperly influencing or obstructing or interfering with
5 the administration of justice.
6 In order to sustain its burden of proof for the
7 crime of corruptly endeavoring to obstruct or impede the
8 due administration of justice as charged in count 54, the
9 government must prove the following three essential
10 elements beyond a reasonable doubt.
11 First, the judicial proceeding in the federal
12 bankruptcy court identified in the indictment was pending
13 at the time alleged in the indictment;
14 Second, the defendant you are considering knew
15 that this bankruptcy proceeding was pending;
16 And, third, the defe
ndant you are considering
17 then corruptly endeavored to influence, obstruct or impede
18 the due administration of justice in the proceeding as
19 detailed in the indictment, namely by advising, directing,
20 participating in and assisting in the creation,
21 preparation and submission of false usage logs relating to
22 the Manhasset condominium and the Manhattan penthouse and
23 giving false, evasive and misleading testimony under oath 24 with regard to the intended and actual use of the 25 Manhasset condominium and the Manhattan penthouse for
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8707
1 corporate or business purposes.
2 First element, pending judicial proceeding.
3 The first element the government must prove
4 beyond a reasonable doubt is that a judicial proceeding in
5 the federal bankruptcy court was pending at the time
6 alleged in the indictment, namely between March 1994 and
7 September 23rd, 1994.
8 In this case it is agreed by all parties that the
9 federal bankruptcy proceeding was pending at the time set
10 forth in the indictment.
11 It is no less a violation of this proceeding
12 because the proceeding involved a civil bankruptcy
13 proceeding between two private litigants to which the
14 United States was not a party. In order to satisfy this
15 element it is sufficient if you find that the civil
16 bankruptcy proceeding was pending in a federal court.
17 Second element, knowledge.
18 The second element the government must prove
19 beyond a reasonable doubt is that the defendant you are
20 considering knew that this bankruptcy proceeding was in
21 progress. In order to satisfy this element you need only
22 to determine that the defendant knew on or about the dates
23 charged that the bankruptcy proceeding was in progress. 24 In this regard there is evidence that the defendants Bruce 25 Gordon and Martin Reffsin appeared at hearings before the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8708
1 bankruptcy court -- and this I am not sure about -- were
2 duly sworn and also testified at depositions in this
3 proceeding. Is there proof of that?
4 MR. WHITE: Yes, your Honor. Those transcripts
5 are both with respect to Mr. Gordon and Mr. Reffsin, and
6 in evidence.
7 MR. TRABULUS: Your Honor, with regard to this
8 particular element, I think Mr. Gordon would not object to
9 an instruction that it is not disputed that he knew the
10 proceeding was pending.
11 THE COURT: Okay.
12 MR. WALLENSTEIN: Mr. Reffsin would not object to
13 that either. He did testify here that he knew about it.
14 THE COURT: All right.
15 MR. WALLENSTEIN: I have another problem with
16 this charge though.
17 THE COURT: Just one minute now.
18 Both defendants concede that they knew the
19 bankruptcy proceeding was in progress?
20 MR. TRABULUS: Yes.
21 MR. WALLENSTEIN: Yes.
22 THE COURT: Yes.
23 MR. WALLENSTEIN: I don't know if you wish to 24 wait to finish -- 25 THE COURT: Having to do with the second element,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8709
1 knowledge?
2 MR. WALLENSTEIN: No. Actually in the second
3 count of the instructions here.
4 THE COURT: I am not -- you mean the second
5 obstruction counts?
6 MR. WALLENSTEIN: Right.
7 THE COURT: I am on the first obstruction count.
8 MR. WALLENSTEIN: I know that. But there was
9 some indication in the charge you just gave that one of
10 the elements for the first obstruction count was giving
11 false and evasive testimony with respect to the usage of
12 the premises. And I don't believe that's what Mr. Reffsin 13 is charged with, unless I am reading something wrong.
14 THE COURT: Okay.
15 This is the first obstruction charge, having to
16 do with the false usage logs?
17 MR. WALLENSTEIN: Yes. Mr. Reffsin is charged
18 with using a log, submitting a log, but not with respect
19 to giving testimony with respect to it, Mr. Gordon is
20 charged with that.
21 THE COURT: Is that so?
22 MR. WHITE: No, your Honor, if you look at page
23 23 and 22 of the indictment, the charge is that they both 24 obstructed justice by, A, submitting the logs, and, B, 25 giving false testimony regarding the two apartments. The
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8710
1 second obstruction charge charges Mr. Gordon with giving
2 false testimony about the ownership of the company.
3 THE COURT: Mr. Wallenstein, I say further on
4 that there has to be unanimity with regard to a particular
5 charge. I think that may cover it.
6 MR. WALLENSTEIN: It may.
7 THE COURT: Wait until you hear it. But they
8 allege that he did do this.
9 MR. WALLENSTEIN: I don't think there was any
10 evidence as to that, but, okay.
11 THE COURT: That's another matter.
12 Getting into the third element, corruptly
13 endeavoring to impede.
14 The final element the government must prove
15 beyond a reasonable doubt is that the defendant you are
16 considering did corruptly obstruct or impede or did
17 endeavor to obstruct or impede the bankruptcy proceeding.
18 As I explained previously the word "corruptly"
19 means to have the improper
motive or purpose of
20 obstructing justice. As I also told you success of the
21 endeavor is not an element of the crime. The term
22 "endeavor" is designed to reach all conduct which is
23 aimed at influencing, intimidating and impeding a 24 bankruptcy court. Thus, it is sufficient to satisfy this 25 element if you find that the defendant acted in a way
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8711
1 which produced or was capable of producing an effect that
2 prevented justice from duly -- from being duly
3 administered or obstructed or impeded the proceeding.
4 The defendants are accused of two acts which
5 allegedly obstructed or impeded the administration of
6 justice in the bankruptcy proceeding. A, advising
7 directly -- advising, directing and participating in the
8 creation of and submitting of false usage logs; and, B,
9 giving false, evasive and misleading testimony under oath
10 with regard to the intended and actual use of the
11 Manhasset condominium and Manhattan penthouse for
12 corporate or business purposes.
13 However, and this is important, you may not find
14 a defendant guilty unless you all agree unanimously that
15 one particular act obstructs justice. It is not enough
16 that you all believe that one of the two acts was
17 obstructive. That is, you cannot find a defendant guilty
18 if some of you think that only act A is obstructive, and
19 the rest of you think that only act B is obstructive.
20 There must be one of the acts that all of you believed is
21 an obstruction of justice in order to convict a defendant
22 on this count.
23 I then go into aiding and abetting which is 24 charged also. You don't want to hear this over again, do 25 you?
HA
RRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8712
1 MR. WALLENSTEIN: You are not going to make any
2 changes, are you?
3 THE COURT: It will have the same look,
4 Mr. Wallenstein.
5 MR. WALLENSTEIN: Okay.
6 THE COURT: Counts 55, obstruction of justice, I
7 believe the defendant Bruce Gordon was the only one
8 charged.
9 The defendant Bruce Gordon is charged in Count 55
10 of the indictment with endeavoring to obstruct the due
11 administration of justice with regard to proceedings in
12 the bankruptcy court.
13 Counts 55 reads as follows: The same statute is
14 involved, I don't have to repeat it. Section 1503.
15 The same prelude, explanation of "endeavor" and
16 "corrupt."
17 In order to sustain its burden of proof for the
18 crime of corruptly endeavoring to influence, obstruct or
19 impede the due administration
of justice as charged in
20 count 55 of the indictment, the government must prove the
21 following three essential elements beyond a reasonable
22 doubt.
23 First, the judicial proceeding in the federal 24 bankruptcy court identified in the indictment was pending 25 at the time alleged in the indictment;
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8713
1 Second, the defendant Bruce Gordon knew that this
2 bankruptcy proceeding was pending; and;
3 Third, the defendant Bruce Gordon then corruptly
4 endeavored to influence, obstruct or impede the due
5 administration of justice in the proceeding as detailed in
6 the indictment, namely, by submitting a bankruptcy
7 petition containing false information and giving false,
8 evasive and misleading testimony under oath with regard to
9 the ownership of Who's Who Worldwide and other
10 corporations controlled by the defendant Bruce Gordon.
11 First element, there you concede?
12 MR. TRABULUS: Same with the second.
13 THE COURT: First and second.
14 Third element, corruptly endeavored to obstruct
15 or impede.
16 The final element the government must prove
17 beyond a reasonable doubt is that the defendant Bruce
18 Gordon did corruptly obstruct, impede, or endeavor to
19 obstruct and to impede the bankruptcy proceeding.
20 As I explained earlier, the word "corruptly"
21 means to have the improper motive or purpose of
22 obstructing justice.
23 As I also told you, success of the endeavor is 24 not an element of the crime. The term "endeavor" is 25 designed to reach all conduct which is aimed at
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8714
1 influencing, intimidating or impeding a bankruptcy co
urt.
2 Thus, it is sufficient to satisfy this element if
3 you find that the defendant acted in a way which produced
4 or was capable of producing an effect that prevented
5 justice from being duly administered or obstructed or
6 impeded the proceeding.
7 Under this element it is essential that the
8 government prove beyond a reasonable doubt that the
9 defendant Bruce Gordon -- pardon me, willfully and
10 knowingly submitted a bankruptcy petition containing false
11 information under oath with regard to the ownership of
12 Who's Who Worldwide and other corporations controlled by
13 the defendant Bruce Gordon, and/or gave false, evasive and
14 misleading answers in his testimony under oath in the
15 bankruptcy court proceeding with regard to the ownership
16 of Who's Who Worldwide and other corporations controlled
17 by the defendant Bruce Gordon, and that he did so i
n a
18 corrupt endeavor to obstruct the bankruptcy court
19 proceeding by giving such false information and/or
20 testimony.
21 The defendant Bruce Gordon is accused of two acts
22 which allegedly obstructed or impeded the administration
23 of justice in the bankruptcy proceeding. 24 A, submitting a bankruptcy petition containing 25 false information with regard to the ownership of Who's
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8715
1 Who Worldwide; and, B, giving false, evasive and
2 misleading testimony under oath with regard to the
3 ownership of Who's Who Worldwide and other corporations
4 controlled by the defendant Bruce Gordon.
5 However, and this is important, you may not find
6 the defendant guilty unless you all agree unanimously that
7 one particular act has obstructed justice. It is not
8 enough that you a
ll believe that one of the two acts was
9 obstructive. That is, you cannot find the defendant Bruce
10 Gordon guilty if some of you think that only one act is
11 obstructive and the rest of you think that only the other
12 act is obstructive. The government must prove that one
13 specific -- withdrawn. The government must prove one
14 specific act that all of you believe is obstructive of
15 justice in order to convict the defendant on this count.
16 Now to get into the tax counts.
17 With respect to all -- withdrawn.
18 With respect to the tax counts I instruct you as
19 follows -- this is where I picked up some of the things
20 again that you had given me, Mr. Trabulus, I believe it is
21 page 15, 16 and 17 of your request to charge.
22 The government contends that the payments made by
23 various corporations on American Express charges and other 24 expenses incurre
d by Bruce Gordon were not loans to him, 25 but was income to him.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8716
1 I instruct you that a payment to a person or to
2 benefit a person by paying his obligation to a third party
3 is a loan, and that income, if at the time that the
4 payment is made, the person to whom it is made, or for
5 whose benefit it is made, intends to repay it. It is the
6 government's burden to prove beyond a reasonable doubt
7 that Bruce Gordon did not intend to repay them at the time
8 a corporation made any of the payments to or for him.
9 Unless the government has so proven, you may not consider
10 any of his tax returns or collection information
11 statements to have been false or not true and correct on
12 the basis that they failed to declare those payments as
13 income.
14 By the same token, unless
the government has
15 proven beyond a reasonable doubt that Bruce Gordon did not
16 intend to repay, you may not find that he evaded the
17 payment of any tax simply on the basis that he caused a
18 corporation to make a loan to him, rather than to pay him
19 wages.
20 Instead of "wages" I will put "a salary."
21 Any attempt to avoid, minimize or alleviate taxes
22 due by legitimate means is permissible. So is any
23 legitimate attempt to avoid, reduce, minimize or alleviate 24 the amount of payment to be made under a collateral 25 agreement which sets the amount of past years taxes to be
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8717
1 paid by reference to the size of present income.
2 Such legitimate means may include choosing to
3 borrow money rather than to receive salary, so long as
4 there is a true borrowing. That is to
say, so long as the
5 borrower truly intends at the time the borrowing occurs to
6 repay it later. For this reason you may not find that a
7 choice that Bruce Gordon borrow money rather than receive
8 salary was part of an attempt to evade the payment of past
9 taxes due, unless the government has established beyond a
10 reasonable doubt that Bruce Gordon did not intend to repay
11 the monies.
12 With regard to Martin Reffsin, however, that
13 would not be sufficient. The government bears the
14 additional burden of establishing beyond a reasonable
15 doubt that Martin Reffsin knew that Bruce Gordon did not
16 intend to repay the money later.
17 Count 56, conspiracy to impair, impede and
18 obstruct the Internal Revenue Service.
19 Count 56 charges the defendants Gordon and
20 Reffsin with conspiracy to defraud the United States by
21 impeding, impairing, ob
structing and defeating the lawful
22 functions of the United States Department of the Treasury,
23 Internal Revenue Service, in the ascertainment, 24 computation, assessment and collection of revenue; namely, 25 the federal income taxes of the defendant Bruce Gordon.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8718
1 Count 56 reads, the relevant statute, namely
2 conspiracy, 18 United States Code, Section 371 provides,
3 quote, if two or more persons conspire to defraud the
4 United States or any agency thereof in any manner or for
5 any purpose, and one or more of such persons do any act to
6 affect the object of the conspiracy, each is guilty of an
7 offense against the United States.
8 Then I go into a similar statement on
9 conspiracy. Do you want to hear it again? It is a
10 separate crime, the elements are the same, elements we
11 went into before, which is that there is a -- I better
12 give you this:
13 The government must prove each of the following
14 four elements beyond a reasonable doubt:
15 First, that the defendants Bruce Gordon and
16 Martin Reffsin entered into an agreement to defraud the
17 United States by impeding, impairing, obstructing and
18 defeating the lawful governmental functions of the
19 Internal Revenue Service in the ascertainment,
20 computation, assessment and collection of revenues, to
21 wit, the federal income taxes due by Bruce Gordon at or
22 about the time alleged in the indictment, by deceit or
23 trickery, or by means that are dishonest; 24 Second, that the defendant you are considering, 25 knowingly and willfully became a member of the conspiracy;
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8719
1 Third, that o
ne of the members of the conspiracy,
2 not necessarily the defendant whose case you are
3 considering, knowingly and willfully committed at least
4 one of the overt acts charged in the indictment; and,
5 fourth, that the overt act or acts which you find to have
6 been committed were knowingly committed to further some
7 object or purpose of the conspiracy.
8 Now I will give you some definitions and discuss
9 each of these elements. I will now give you the
10 definitions of the term -- the terms, impede, impair,
11 obstruct and defeat.
12 The word "impede" means stopping progress or
13 hindering.
14 To "impair" means to lessen, diminish or
15 otherwise affect in an injurious manner.
16 To "obstruct" means to hinder or progress from,
17 check, stop or place obstacles in the way, to retard the
18 progress of or make accomplishment of the due
19 administ
ration of the Internal Revenue Service laws
20 difficult and slow.
21 To "defeat" means to prevent.
22 The first element that the government must prove
23 beyond a reasonable doubt to establish the offense of 24 conspiracy is that the defendants Gordon and Reffsin25 entered into the unlawful agreement charged in the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8720
1 indictment.
2 As I stated before, the unlawful agreement
3 charged by the government in this count is a conspiracy to
4 defraud the United States. Specifically, the government
5 charges that the two defendants, Gordon and Reffsin,
6 conspired to defraud the United States by impeding,
7 impairing, obstructing and defeating the lawful
8 governmental functions of the IRS in the ascertainment,
9 computation, assessment and collection of Bruce Gordon's
10 federal
income taxes by deceit or trickery or by means
11 that were dishonest.
12 It is not necessary that the government lose
13 money from the fraud, but only that its legitimate,
14 official action and purpose, be defeated by the trickery
15 or deceit.
16 Since by its nature a conspiracy must have a
17 minimum of two participants, if you find that the
18 government failed to prove beyond a reasonable doubt that
19 there was this unlawful agreement between Gordon and
20 Reffsin, there is no conspiracy, and you must acquit both
21 defendants on this count. An agreement between Bruce
22 Gordon and someone other than Martin Reffsin will not
23 suffice. 24 Then I go into, you need not have direct proof. 25 You need circumstantial evidence -- I better give you
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8721
1 this.
2 It
is not necessary that such an understanding be
3 established by direct proof of oral or written
4 agreements. It may be proven by inferences drawn from
5 circumstantial evidence, including the acts and conducts
6 of the alleged conspirators.
7 However, a mere showing of close relations, such
8 as the fact that the defendants are accountant and client,
9 or frequent contact between the alleged conspirators, will
10 not satisfy the government's burden absent evidence which
11 would permit the inference that an illegal agreement was
12 made.
13 I go into the same part there, like you need not
14 have a formal or express agreement, etcetera.
15 Do you want to hear the rest of that part of it?
16 MR. TRABULUS: No.
17 MR. WALLENSTEIN: No.
18 THE COURT: Okay.
19 Let me give you this, however, which is unique to
20 this conspiracy.
21 In this regard
I instruct you that not every
22 action undertaken by private parties to make the
23 government's job harder is criminal, and not every 24 agreement to obstruct the governmental function 25 constitutes an unlawful conspiracy to defraud.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8722
1 Individuals are not required to conduct their affairs in a
2 manner that will make it easy for the IRS to collect
3 taxes. Thus the defendants cannot be found guilty for
4 having participated in a conspiracy to impede, impair, or
5 obstruct the IRS in the ascertainment of taxes due and
6 owing by Bruce Gordon, unless the government has proven
7 beyond a reasonable doubt that they agreed to use
8 deceitful or dishonest means to accomplish this goal.
9 If the government proves beyond a reasonable
10 doubt that the defendants Gordon and Reffsin were involved
11 in a criminal conspiracy, then you must further find that
12 the conspiracy is the one charged in the indictment and
13 not some other.
14 The second element is knowing membership in the
15 conspiracy. That is essentially the same as the first
16 knowing membership, second element.
17 Do you want me to repeat that?
18 MR. TRABULUS: No.
19 MR. WALLENSTEIN: No.
20 THE COURT: I go into mere association is not
21 enough, etcetera.
22 Also, I say in this one, not only is mere
23 association not enough, but, further, the 24 accountant/client relationship between the defendants 25 alone does not give rise to a conspiracy. That fact that
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8723
1 they may have been together and discussed common aims and
2 interests does not necessarily establish proof of the
3 exist
ence of a conspiracy, or knowing membership in the
4 conspiracy.
5 The third element is with respect to the
6 commission of overt acts. Are we set on these overt
7 acts?
8 MR. TRABULUS: No, your Honor. I believe there
9 is an issue as to whether some of the overt acts were
10 really made out. And in one instance as to whether it was
11 made out with respect to the conspiracy alleged.
12 THE COURT: Which ones are you talking about?
13 MR. TRABULUS: I know Mr. Wallenstein also has
14 some thoughts on this.
15 MR. WALLENSTEIN: My concern here, Judge, is with
16 respect to the overt acts which relate to the submission
17 of the log there is the bankruptcy proceeding, that they
18 don't belong in this conspiracy. That if in fact those
19 acts are proven they establish perhaps the obstruction of
20 justice count, which is 54, now, I believe, but they have
21 no relation to the conspiracy to impede the Internal
22 Revenue Service. Specifically, I am talking about the
23 overt acts designated Q, R, V and W; and that's on page 31 24 and 32 of the indictment. 25 THE COURT: Just a minute now.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8724
1 MR. TRABULUS: I join in that.
2 THE COURT: You are talking about page 29?
3 MR. WALLENSTEIN: The overt acts begin on page
4 29.
5 THE COURT: Which overt acts are you talking
6 about?
7 MR. WALLENSTEIN: Page 31 beginning, Q and R, and
8 V and W on page 32. Those four overt acts relate to the
9 submission of the logs in the bankruptcy proceeding,
10 which, while the subject of the obstruction count, have
11 nothing at all to do with the conspiracy counts to impede
12 the IRS. I don't see how the bankruptcy is at all related
13 to t
he alleged conspiracy of preventing the IRS from
14 collecting money.
15 THE COURT: However, it is alleged in the
16 indictment in that count, isn't it?
17 MR. TRABULUS: It is in paragraph 54, your
18 Honor. But the proof at the trial failed to support the
19 allegation in the indictment.
20 In other words, there has been proof at the trial
21 concerning the false usage logs, and I guess Gaspar
22 testified, but there was nothing to link it to the tax
23 aspects of the case. There was nothing to suggest it was 24 intended to or was submitted to the IRS or for purposes of 25 affecting the IRS' actions or collection or ascertainment
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8725
1 of taxes. The evidence is there perhaps but not expressly
2 linked to the tax aspects.
3 MR. WALLENSTEIN: None of the tax experts,
4 Peters, o
r Gagliardi, testified with respect to the usage
5 of the condominiums, or specifically, the log with respect
6 to the usage of the condo or the penthouse having any
7 bearing whatsoever on the issue of Mr. Gordon's tax
8 liability. If there is evidence at all in the case with
9 respect to that, it would tend to obstruct -- support the
10 obstruction count and nothing at all to do with the tax
11 conspiracy. I believe it would be confusing to the jury
12 to have those allegations or overt acts as part of the
13 conspiracy.
14 THE COURT: Mr. White.
15 Do you agree?
16 MR. WHITE: No. I disagree.
17 We touched on this when we had the Rule 29
18 argument. There are a number of ways that the logs and
19 the bankruptcy petition are related to the tax conspiracy.
20 The evidence is that Mr. Gordon and Mr. Reffsin 21 structured Mr. Gordon's financial affairs in such
a way
22 that his companies paid for everything. They furnished
23 him with a car, these apartments, paid his personal 24 expenses. The reason that the bankruptcy proceedings are 25 relevant is because at the time the bankruptcy comes along
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8726
1 it threatens to throw this in chaos, upsets the apple
2 cart. Reed wants a trustee appointed replacing
3 Mr. Gordon. If that happens the gravy train is over,
4 Mr. Gordon can't continue to have the company furnish his
5 personal expenses and furnish the condo and penthouse.
6 It is with regard to Reed's appointment as a
7 trustee that the phony logs are submitted. It is
8 constructed, the phony set up for that purpose.
9 Number two, they have to be consistent with what
10 they are telling the IRS. They didn't disclose to the IRS
11 that Mr. Go
rdon had the use of this condominium and that
12 other companies were providing to him, or the penthouse or
13 these other things.
14 Now that they have to file a phony document and
15 make disclosures to the bankruptcy court, they have to be
16 consistent. If they are hiding it from the IRS they can't
17 go over all over town saying that's where he lived.
18 In addition, the use of the condominium and the
19 penthouse should have been on Mr. Gordon's tax returns.
20 Among Agent Rosenblatt's calculation is that that was
21 income he failed to declare.
22 Conceding -- concealing that fact when asked even
23 about it from third parties is relevant to the tax 24 conspiracy. 25 As your Honor pointed out, all of this is part of
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8727
1 the conspiracy alleged in this indictment. So, they can
2 argue whatever they want to the jury. But it is not as a
3 matter of law unconnected to the tax conspiracy.
4 THE COURT: I agree with the government and I
5 deny the request. You have an exception, both of you.
6 With regard to the commission of overt acts, I
7 will read what the overt acts are, do you want to hear
8 that again, the overt act portion?
9 MR. WALLENSTEIN: No, not necessary.
10 MR. TRABULUS: No.
11 THE COURT: Do you want to hear the commission of
12 the overt act in furtherance of the conspiracy which is
13 almost exactly the same as it was before?
14 MR. TRABULUS: No.
15 MR. WALLENSTEIN: Not necessary.
16 THE COURT: Okay.
17 Then I say finally with regard to the conspiracy
18 charge, which is an alleged agreement between two people,
19 namely, Bruce Gordon and Martin Reffsin, I instruct you
20 that if the government fails to
establish the guilt of
21 either defendant beyond a reasonable doubt, you must
22 acquit both defendants on the conspiracy charge.
23 Count 57, tax evasion. 24 Count 57 of the indictment charges the defendant 25 Gordon and Reffsin with attempting to evade the payment of
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8728
1 federal income taxes owed by the defendant Gordon for the
2 calendar years, 1981 through 1990. I will read count 57.
3 The indictment alleges in count 57 that the
4 defendants violated Section 7201 which provides, quote,
5 any person who willfully attempts in any manner to evade
6 or defeat any tax imposed by this title, or the payment
7 thereof, shall be guilty of the offense of tax evasion.
8 In order for the crime of attempting to evade the
9 payment of income tax -- in order to prove the crime of
10 attempting
to evade income tax, the government must
11 establish the following three elements beyond a reasonable
12 doubt:
13 First, that the defendant Gordon owed federal
14 income taxes for the calendar years 1981 through 1990;
15 Second, that the defendant you are considering
16 knew that the defendant Gordon owed such federal income
17 taxes for the year 1981 through 1990;
18 Third, that the defendant you are considering
19 willfully concealed and attempted to conceal from the
20 Internal Revenue Service the nature and extent of the
21 income and assets of the defendant Bruce Gordon, with the
22 intent to evade the payment of the taxes owed.
23 First element, tax due. 24 The first element that the government must prove 25 beyond a reasonable doubt is that the defendant Gordon
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8729
1
owed federal income taxes for the calendar years 1981
2 through 19.
3 Is it 1990?
4 MR. WHITE: Yes.
5 THE COURT: However the government doesn't have
6 to prove the exact amount that the defendant Bruce Gordon
7 owed. Nor does the government have to prove that the
8 payment of all the tax charged in count 57 was evaded.
9 The prosecution must prove beyond a reasonable
10 doubt that there is a substantial amount of taxes due and
11 owing from the defendant Gordon for the calendar years,
12 1981 through 1990.
13 A relatively small or insignificant deficiency in
14 taxes is not enough to make a defendant guilty of the
15 crime of tax evasion.
16 There is no mathematical formula for determining
17 what is a substantial amount of tax deficiency. It is not
18 measured in relation to the defendant's income, nor by any
19 particular percentage of tax proven
to be due. The amount
20 varies from case to case, and is for you, the jury to
21 determine.
22 MR. WALLENSTEIN: Judge, I think we can concede
23 the first two elements. 24 THE COURT: All right. 25 MR. TRABULUS: Right, the language your Honor
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8730
1 read is more appropriate to not an evasion of payment, or
2 an evasion of the computation of the amount of tax.
3 THE COURT: You will concede the first two
4 elements?
5 MR. TRABULUS: That it was substantial, yes.
6 THE COURT: Wait a minute now.
7 MR. WALLENSTEIN: Yes.
8 My client testified to that. It can't easily be
9 contested.
10 THE COURT: Both defendants concede the first two
11 elements, namely that the defendant Gordon owed the taxes,
12 and they knew that he owed the taxes?
13 MR. TRABULUS: Yes.
14 MR. WALLENSTEIN: Yes.
15 THE COURT: All right.
16 Third element, willful evasion of payment.
17 The third element which the government must prove
18 beyond a reasonable doubt is that the defendant you are
19 considering willfully evaded or attempted to evade the
20 payment of the income taxes payable by the defendant
21 Gordon with the intention of defrauding the government of
22 such taxes owed.
23 The Internal Revenue Code makes it a crime to 24 willfully attempt in any manner to evade or defeat the 25 payment of any income tax imposed by law. There are many
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8731
1 different ways in which a tax may be evaded or an attempt
2 may be made to evade payment of such tax.
3 In this case the indictment alleges that the
4 defendant concealed and attempted to conceal from the IRS
5 the nature and extent of the income and assets of the
6 defendant Bruce Gordon in order to avoid the payment of
7 Gordon's federal income tax liability for the years 1981
8 through 1990.
9 MR. TRABULUS: Your Honor, in that sentence at
10 one point your Honor said there are many ways in which a
11 tax may be evaded. Can it be changed to say that there
12 are many ways in which a payment of a tax may be evaded?
13 THE COURT: Yes.
14 However, the attempt to evade or defeat the
15 payment of a tax must be a willful attempt. In other
16 words, in order for the government to prove the crime
17 charged, it must establish beyond a reasonable doubt that
18 the defendant you are considering acted voluntarily and
19 intentionally, and with the specific intent to keep from
20 the government information concerning Gordon's income and
21 assets which it was the legal duty o
f the defendant to set
22 forth and declare, and which the defendant you are
23 considering knew that it was Gordon's legal duty to 24 disclose. 25 I will say this again.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8732
1 In other words, in order for the government to
2 prove the crime charged, it must establish beyond a
3 reasonable doubt that the defendant you are considering
4 acted voluntarily and intentionally, and with the specific
5 intent to keep from the government information concerning
6 Gordon's income and assets which it was the legal duty of
7 the defendant Gordon to set forth and declare, and which
8 the defendants you are considering knew that it was
9 Gordon's legal duty to disclose.
10 The defendants raise the defense of good faith.
11 I will now instruct you on the defense of good faith.
12 Good faith is an absolute defense to the charge
13 in Count 57. The grounds on which the defendants Gordon
14 and Reffsin base their claims of good faith in a belief
15 that their conduct was lawful, may be considered in
16 deciding whether they in fact acted in good faith, and
17 whether they intended and willfully attempted to evade the
18 payment of Gordon's income tax.
19 The issue of intent as to whether the defendant
20 you are considering willfully attempted to evade the
21 payment of Gordon's income tax is one that you must
22 determine from a consideration of all the evidence in the
23 case, bearing on the defendant's state of mind. In 24 deciding whether the government has proved that the 25 defendant you are considering attempted to evade the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER 8733
1 payment of Gordon's income tax, that is to say
whether he
2 acted willfully, voluntarily and intentionally, you may
3 consider all of his knowledge and any advice which was
4 given to him.
5 The views of the defendant you are considering
6 need not be legally correct or objectively reasonable.
7 Just as long as he honestly and in good faith believed
8 them to be true.
9 In considering the defendant's claim that he
10 acted in good faith, the question is whether or not he
11 truly held such a belief. The question you should focus
12 on is, quote, what did the defendant actually believe, end
13 quote, regardless of whether the belief was correct or
14 objectively reasonable. Cheek against the United States.
15 I will not tell that to the jury though. They may know
16 what Cheek is. Do you think, Mr. White, they know that?