1UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
2 - - - - - - - - - - - - - - X
3 UNITED STATES OF AMERICA, : CR 96 1016(S-1)
4 v. : U.S. Courthouse
5Uniondale, New York BRUCE W. GORDON, WHO'S WHO
6 WORLD WIDE REGISTRY, INC., : STERLING WHO'S WHO, INC.,
7 TARA GARBOSKI, ORAL FRANK : OSMAN, LAURA WEITZ, ANNETTE
8 HALEY, SCOTT MICHAELSON, : STEVE RUBIN, and MARTIN
9 REFFSIN, : TRANSCRIPT OF HEARING
10Defendants. : December 5, 1997
11 - - - - - - - - - - - - - - X 2:00 o'clock p.m.
12 BEFORE:
13 HONORABLE VIKTOR V. POHORELSKY UNITED STATES MAGISTRATE JUDGE
14
15 APPEARANCES:
16 For the Government: ZACHARY W. CARTER United States Attorney
17One Pierrepont Plaza Brooklyn, New York 11201
18By: RONALD G. WHITE, ESQ.
CECI SCOTT, ESQ. 19 Assistant U.S. Attorneys
20 For the Defendants: NORMAN TRABULUS, ESQ.
21For Bruce W. Gordon 170 Old Country Road, Suite 600
22Mineola, New York 11501
23EDWARD P. JENKS, ESQ. For Who's Who, Sterling
24332 Willis Avenue Mineola, New York 11501
25 (cont'd)
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1 APPEARANCES (cont'd):
2GARY SCHOER, ESQ.
For Tara Garboski
36800 Jericho Turnpike
Syosset, New York 11791
4
ALAN M. NELSON, ESQ.
5For Oral Frank Osman
3000 Marcus Avenue
6Lake Success, New York 11042
7WINSTON LEE, ESQ.
For Laura Weitz
8319 Broadway
New York, New York 10007
9
MARTIN GEDULDIG, ESQ.
10For Annette Haley
400 South Oyster Bay Road
11Hicksville, New York 11801
12JAMES C. NEVILLE, ESQ.
For Scott Michaelson
13225 Broadway
New York, New York 10007
14
THOMAS F.X. DUNN, ESQ.
15For Steve Rubin
150 Nassau Street
16New York, New York 10038
17JOHN S. WALLENSTEIN, ESQ.
For Martin Reffsin
18215 Hilton Avenue
Hempstead, New York 11551
19
20 Court Reporter: HARRY RAPAPORT, CSR
United States District Court
21Two Uniondale Avenue
Uniondale, New York 11553
22(516) 485-6558
23
Proceedings recorded by mechanical stenography, transcript
24 produced by Computer-Assisted Transcription
25
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609
1 A F T E R N O O N S E S S I O N
2
3 (Case called.)
4 THE COURT: Good afternoon to all of you.
5 I know there is at least one open issue
6 concerning the applications for subpoenas, actually the
7 application to produce the two confidential informants,
8 Mr. Gross and Mr. Maxes.
9 Are there any other pending applications? We
10 have the issue of the mail coverage to be addressed.
11 Does the government have any further information
12 on the mail covers?
13 MR. WHITE: Yes, literally in the hour before the
14 hearing started I received copies of the actual results of
15 the mail coverage, the sheets that the postal employees
16 make. I have not had a chance to review them.
17 THE COURT: What is the volume of them?
18 MR. WHITE: They are maybe an inch thick.
19 THE COURT: A hundred pages or so, maybe more?
20 MR. WHITE: Probably more than a hundred pages.
21 THE COURT: I will certainly allow you to look at
22 them. Then I will hear any objections, but I am inclined
23 to have it produced.
24 Anything else?
25 MR. TRABULUS: Yes, there were a couple of other
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610
1 matters, I know your Honor ruled on this, the complaint in
2 the West case that Inspector Biegelman was to have
3 signed --
4 THE COURT: The instruction was to review them to
5 determine whether -- I will start to keep a note of open
6 issues so I don't lose track of them. But the concept was
7 for the government to look over them in light of what they
8 elicited from agents, like Inspector Biegelman as to
9 whether there were any statements elicited there as to his
10 direct testimony.
11 MR. TRABULUS: Also --
12 THE COURT: Maybe Mr. White is in a position to
13 address that.
14 MR. WHITE: I am partially.
15 As I think I advised the Court yesterday,
16 Mr. West's case was closed, and I tried to retrieve them
17 this morning from our closed file section.
18 I believe Inspector Biegelman did four affidavits
19 in connection with the West case. Three search warrants
20 and a complaint. I retrieved two search warrants and a
21 complaint. The complaint is about 100 pages. The other
22 is smaller.
23 I am trying to review them to see if there is
24 anything relevant to his testimony. My criteria that I
25 was using was from my recollection the only testimony
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
611
1 aside from tangential references to Mr. West and Mr. Gross
2 and how they were caught up in the investigation, and the
3 only subsequent reference to the West investigation is
4 that some of the statements in the affidavit with respect
5 to mailing lists and victims were based on Inspector
6 Biegelman's experience interviewing West victims. So I am
7 looking through the documents for that purpose.
8 My inclination based on what I have seen thus
9 far, while there may be references here and there, they
10 are not voluminous, but my inclination when I finish
11 reviewing it, the defense can have them all.
12 THE COURT: That solves that problem. Good.
13 MR. TRABULUS: Also the redacted Maxes notes,
14 relating the interview of Maxes, and I don't want to visit
15 this too much, but one thing I want to point out.
16 Under Federal Rule criminal Procedure 12, I
17 forget which letter, but subdivision I, it is clear that a
18 law enforcement person is to be deemed a government
19 witness whether or not called by the defense or by the
20 government for the purposes of producing 3500 material.
21 And the commentary makes it clear, even if Biegelman were
22 called by us and we went first in this case, we would be
23 entitled to 3500 material.
24 That means, your Honor, we in the course of
25 cross-examining Inspector Biegelman, goes somewhat beyond
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612
1 what Mr. White had gone in his direct, we would certainly
2 be entitled to 3500 material just as if we called
3 Inspector Biegelman ourselves and asked those questions.
4 Specifically we are just talking about 3500 material
5 relating to conversation that Inspector Biegelman had with
6 Maxes, which is one of the two informants he appears to
7 have relied upon the most in his search warrant affidavit.
8 So I think it shouldn't be redacted at all, quite
9 frankly.
10 THE COURT: Rule 3500 -- first of all, the
11 analysis of 3500 material analysis is not quite the right
12 analysis. Because the statements that are Mr. Maxes'
13 statements -- let me back up.
14 The notes are not Inspector Biegelman's
15 statements. They are Maxes' statements. One can make the
16 argument it is his statements about what Maxes said. But
17 I am not sure that that is the analysis that has ever been
18 used in analyzing 3500 material. In other words, when an
19 agent is called to testify, not all the notes he has ever
20 made are turned over, including the notes of all the
21 various informants. But let's put that aside for a
22 moment.
23 I will hear from Mr. White on this issue.
24 MR. TRABULUS: Okay.
25 MR. WHITE: Your Honor, I thought you had already
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 ruled that the unredacted portions that Mr. Trabulus wants
2 is not relevant. That you were going to solve the request
3 by reviewing it yourself and putting on the record the
4 number of specific instances in the deposition transcript
5 that Mr. Maxes said were false. I thought the analysis is
6 that it doesn't matter what the specifics are, except to
7 the extent it shows how untruthful he is.
8 MR. TRABULUS: Your Honor, I said 12.2 yesterday,
9 I believe I was mistaken.
10 THE COURT: 20 something?
11 MR. TRABULUS: It is in 12, and it crosses over,
12 cross-references --
13 THE COURT: Let me look at the two sections.
14 MR. TRABULUS: I know it is subdivision I of
15 whatever number it is.
16 THE COURT: It says after a witness other than
17 the defendant has testified on direct examination. So
18 that strikes me that you take -- you measure it by what
19 has been testified to on direct examination.
20 MR. TRABULUS: Your Honor, the point -- there is
21 a portion in there that says that a law enforcement person
22 is considered a government witness. And the commentary
23 says that the 3500 material is to be turned over by the
24 government regardless of whether the law enforcement
25 person is called by the defense or the government.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 THE COURT: Right now we are on Inspector
2 Biegelman on cross when the government had called him. So
3 we measure it by what the direct evidence was in the
4 direct case. And that's why I am using that standard.
5 You are on the cross of him. So that's precisely why, I
6 think, that that limitation is made. You have a direct
7 examination and then on cross-examination you can't expand
8 the boundaries by going into areas and then now requiring,
9 well, I asked about this question, now he is to produce
10 all his statements on that. That's the whole point, I
11 think.
12 MR. TRABULUS: I think if we called him as our
13 own witness and we were allowed to question him on certain
14 matters, we would be allowed to get 3500 material under
15 the rule.
16 THE COURT: Yes. But you have not called him.
17 Right now he is their witness. If he comes on as your
18 witness, if you want to recall him, so be it.
19 MR. TRABULUS: Okay.
20 THE COURT: Then we will do what has to be done.
21 It seems to me that -- I think you are right. I
22 don't think you challenge the fact that a government
23 agent, a law enforcement agent --
24 MR. WHITE: I believe the language in the rule is
25 a law enforcement officer, which would be Inspector
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1 Biegelman.
2 THE COURT: There is no question about that.
3 MR. TRABULUS: The commentary explains the reason
4 that the 3500 material gets turned over no matter who it
5 is, no matter who calls the witness to the stand.
6 MR. WHITE: My understanding up to now is your
7 Honor ruled those redacted portions as not relevant to the
8 issue at the hearing.
9 THE COURT: Let's assume we take this as a 3500
10 material argument, which is how we are approaching it, and
11 even accepting what you are saying, the 3500 material, the
12 Court is permitted to redact 3500 material. As a matter
13 of fact, I think -- not I think, but I know that Rule 3500
14 specifically says that.
15 MR. TRABULUS: It allows it under certain
16 circumstances, yes.
17 THE COURT: I have made that determination.
18 The question then is, and I did do a comparison,
19 although I didn't examine all the subject matter. And
20 while we are on this subject I will return these now to
21 Mr. White. I did a comparison of the copies of the
22 unredacted versions, with the originals, and there were no
23 discrepancies. And as part of that I also reviewed the
24 Maxes notes and found in addition to the two lies that
25 have already been disclosed, disclosed in the redacted
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616
1 versions, there are two other versions of Mr. Max's
2 testimony, deposition testimony, that he identified in his
3 review -- in his interview with Inspector Biegelman as
4 being false, without revealing the subject matter of those
5 areas, there were two other areas, two other items of
6 testimony that he said were false.
7 I am not changing my ruling with respect to the
8 unredacted versus the redacted versions of the 3500
9 material at this point.
10 MR. TRABULUS: By chance, does the government
11 have Maxes' deposition transcript yet?
12 MR. WHITE: Yes, I have it.
13 MR. NELSON: Before I leave the Maxes area, there
14 is an alternative with respect to our request for the
15 Maxes information, and that deals whether or not the
16 redacted portions are Brady material. And I would submit
17 to the Court that in light of the fact that the issue that
18 the Court has to determine as it relates to Mr. Maxes is
19 how untruthful was he, and how untruthful is it that
20 Inspector Biegelman knew him to be. The entire context of
21 his interviews would bear on that.
22 We in essence are shooting in the dark having a
23 redacted version of what took place there to know whether
24 or not there are portions of that which are in fact
25 untruthful, and we have extrinsic evidence, based on the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
617
1 recordings which will in fact establish that Inspector
2 Biegelman knew or should have known that that information
3 was untruthful.
4 THE COURT: The answer to that is ultimately the
5 Franks itself that says the affiant's credibility is not
6 what I am to determine.
7 MR. NELSON: I agree, your Honor.
8 THE COURT: The informant's reliability or
9 credibility is not the subject of our inquiry here.
10 MR. NELSON: It is not the point I am raising. I
11 agree.
12 THE COURT: The point you are raising is I need
13 to know how incredible he was and how incredible Inspector
14 Biegelman knew he was.
15 MR. NELSON: Precisely.
16 THE COURT: What you are saying is I have to
17 know -- I have to be able to shoot holes now in all the
18 things he was saying. In other words, I have to
19 demonstrate the lack of credibility now in light of the
20 evidence that I can bring to the Court now, to show that
21 that information provided by Mr. Maxes to Inspector
22 Biegelman was wrong, and to therefore show how Inspector
23 Biegelman was --
24 MR. NELSON: To demonstrate the extent to which
25 Inspector Biegelman knew or should have known the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 statements which Mr. Maxes provided with respect to the
2 affidavit.
3 THE COURT: As I understand your argument, you
4 need to be able to show, you are saying, by other
5 information that Inspector Biegelman had at his disposal
6 at that time, that the other things he heard from Maxes at
7 that time should have told him that Maxes was lying to
8 him, or may have been lying to him?
9 MR. NELSON: Rather than framing the issue in
10 such a vague term, Judge, at least to some of the portions
11 of the redacted statement we have of Mr. Maxes to
12 Inspector Biegelman, there are portions of the recorded
13 tape recordings recorded prior to the time that the
14 affidavit was prepared which directly contradict what
15 Mr. Maxes told Inspector Biegelman.
16 We don't know whether or not in the redacted
17 portions there were similar such statements that were
18 made. And without being able to see those interview notes
19 and compare them with the outlines of the transcripts we
20 have prepared, or the tapes we have prepared, we can't
21 possibly determine that. It prevents us from addressing
22 to the Court the incredibility of Maxes as was known or
23 should have been known to Inspector Biegelman.
24 MR. WHITE: Your Honor, the analysis is
25 completely backwards.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
619
1 As the Court said yesterday, the point is that
2 Inspector Biegelman knew admittedly and disclosed in the
3 affidavit, that Maxes had lied. The question is did he
4 lie in the earlier deposition or lie in his interview? So
5 it doesn't really matter.
6 What they are trying to do is not show that Maxes
7 was lying, but Maxes was truthful, and Inspector Biegelman
8 should have figured it out and that's extremely
9 ridiculous.
10 MR. NELSON: That's not what I am saying, I am
11 saying simply A is said on the tape, and B is said by
12 Maxes. Inspector Biegelman had both and had an
13 opportunity to review both, and he should have known one
14 of the two was false.
15 THE COURT: I think a greater showing is
16 required. I have been doing some research on that
17 preliminary showing area, and before we get into the
18 testimony I would like to get from counsel any cases they
19 wish to bring to my attention regarding the propriety of
20 requiring Gross and Maxes to be produced for testimony, so
21 my law clerk can pull the cases, and I will have a chance
22 to review them. I don't need cases. I need -- I don't
23 need argument, I need cases.
24 The arguments as to the redacted notes is denied,
25 as to Maxes' notes. I don't believe the arguments made
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1 justifies the relief sought.
2 The next issue.
3 MR. TRABULUS: I have a case responsive to your
4 Honor's request.
5 THE COURT: You want to move to that issue? This
6 is the issue of Gross and Maxes.
7 MR. TRABULUS: Yes.
8 The name of the case, I have a copy of it and I
9 gave a copy to Mr. White, is United States versus Bowe,
10 698 F.2d 560, Second Circuit, 1983.
11 I am handing a copy up to the Court.
12 THE COURT: Thank you.
13 MR. TRABULUS: I know your Honor didn't want
14 argument.
15 THE COURT: I don't. Any other case you have?
16 MR. TRABULUS: But your Honor made a statement
17 about confidential informants.
18 Firstly, the testimony was that Maxes was not a
19 confidential informant. That was the testimony from
20 Inspector Biegelman, that he was not a confidential
21 informant. He said that Gross was.
22 THE COURT: I am not sure I know what you mean or
23 what distinction you are trying to show.
24 MR. TRABULUS: I want to make this point. The
25 issue of disclosing the identity of the confidential
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621
1 informant, the issue of informant's privilege is not
2 involved.
3 THE COURT: I agree.
4 MR. TRABULUS: These are just like any other
5 witnesses.
6 THE COURT: I agree. We are not talking about
7 the informant's privilege here. We are talking about
8 disclosure of informant's statement. That's what we are
9 talking about, and a chance to basically depose the
10 informant on this. That's what we are talking about.
11 MR. TRABULUS: We claim the Sixth Amendment
12 right, to be able to call people exposed to Biegelman, to
13 question the people who appear in the search warrants
14 affidavit, to questions them to see if they told him what
15 he says they told him.
16 THE COURT: Anything else?
17 MR. JENKS: I am asking you to look at United
18 States versus Zagari, 111 F.3d 307 Second Circuit 1997.
19 THE COURT: Okay.
20 Anybody else? Mr. White, do you have any cases?
21 MR. WHITE: Yes, your Honor. In addition to
22 Franks, U.S. versus Diaz, 100 F.3d 941. And the West Law
23 cite is 1996 West Law 10103, Second Circuit 1996.
24 THE COURT: 10103?
25 MR. WHITE: Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 U.S. Versus Tribunella, 749 F.2d 104, Second
2 Circuit, 1984.
3 I gave you one yesterday, United States versus
4 Smith.
5 THE COURT: 9 F.3d?
6 MR. WHITE: Yes, and there are a series of cases
7 cited in Smith.
8 US versus Ramos, R A M O S, 380 F.2d 717.
9 THE COURT: That pre-dates Franks probably.
10 MR. WHITE: Yes. But it is the Second Circuit
11 1967, and it applies the same analysis.
12 THE COURT: All right.
13 Any other open issues?
14 MR. WHITE: One other.
15 Right at the end of the day yesterday --
16 THE COURT: The disclosure of witnesses issue?
17 MR. WHITE: Yes.
18 The specific thing I wanted to leave not
19 unrebutted on the record is the insinuation by
20 Mr. Trabulus that the government wanted to deprive the
21 defendant of a witness.
22 Let me explain the situation.
23 I was not aware that the defense had contacted
24 Ms. Sauter to testify.
25 It was my speculation knowing the potential facts
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
623
1 that she might be someone to be called as a witness.
2 THE COURT: Is this S A U N T E R?
3 MR. JENKS: S A U T E R.
4 MR. TRABULUS: It is the person Mr. Carman's
5 papers referred to as Saunter. But it is the same
6 person.
7 MR. WHITE: Judge Spatt's opinion in 1995
8 misspelled her name. She was an employee at Who's Who
9 Worldwide.
10 During the course of the government's
11 investigation of Mr. Gordon and others resulting in this
12 indictment, Ms. Sauter was subpoenaed twice.
13 I believe in late 1996 and early 1997. She was
14 subpoenaed first for personal financial documents, her
15 credit card records, American Express records, bank
16 records, tax records and various other things.
17 At that time I specifically informed Ms. Laser,
18 L A S E R, who was her attorney, that Ms. Sauter was the
19 subject of the government's investigation.
20 There is no pretext here that the government
21 after finding out she is a witness, threatens
22 prosecution. She was specifically told that at the time
23 the first subpoena was issued. I did that because my
24 sense, my personal sense of the case is that Ms. Laser did
25 not appreciate that fact. I thought that she had viewed
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624
1 Ms. Sauter simply as a witness, that the government viewed
2 her as a witness in the case against Mr. Gordon. I told
3 her that.
4 She was subsequently subpoenaed to give
5 fingerprints and photographs and handwriting exemplars in
6 early 1997.
7 She remains under investigation for a series of
8 things. Number one, as I said, we subpoenaed her personal
9 financial records. The government is investigating
10 whether certain items of income were reported on her tax
11 returns, number one.
12 Number two, it is alleged that the government is
13 investigating whether she committed perjury at a hearing
14 in the Who's Who Worldwide bankruptcy proceeding on May
15 18th, 1994.
16 Three, there were allegations that the government
17 had received that during the search of the company's
18 premises in March of 1995, that Ms. Sauter obstructed
19 justice by secreting a computer disk out of facility. In
20 fact, the April 1985 testimony that Mr. Trabulus showed
21 Inspector Biegelman yesterday of Ms. Sauter, if you read
22 further you will see even at that time she is
23 cross-examined by the government about that allegation.
24 Number four, Ms. Sauter was involved perhaps in
25 some of the alleged tax frauds that Mr. Gordon is charged
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
625
1 with in this indictment. If you read this superseding
2 indictment, it says among other things, Mr. Gordon
3 concealed from the Internal Revenue Service the fact that
4 he had an American Express gold card. In fact, it was
5 Ms. Sauter who procured that card for him as a supplement
6 card on his account.
7 Now, with all that as background, it is not just
8 some pretext that the government calls up Ms. Laser and
9 tries to scare Ms. Sauter from testifying, out of
10 testifying.
11 Your Honor, I was not aware if Mr. Trabulus and
12 the defense attorneys were aware that Ms. Sauter was
13 represented. I thought there was at least a possibility
14 that they contacted her and Ms. Sauter came in here and
15 testified without counsel.
16 Now, what the government's motive was, was to
17 make sure that its options to prosecute her were preserved
18 in the future. We have been accused of unfairness enough
19 times in this case that I didn't want any claim of a due
20 process violation or something, if she showed up here to
21 testify without a lawyer, and I know she is under
22 investigation, and I know I have not told her lawyer that,
23 and I go ahead and cross-examine her.
24 In my telephone call with Ms. Laser, where she
25 raised this issue that the government was perhaps trying
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
626
1 to intimidate her client. I specifically told her of that
2 concern. I have analogized it to the so-called perjury
3 trap cases that the government tries to lure someone in,
4 and then prosecute them later.
5 So I just wanted to make that record.
6 THE COURT: All right.
7 We will take up the question of whether to
8 disclose witnesses as required later.
9 Any other open issues?
10 MR. JENKS: I don't see any.
11 THE COURT: Let's get going with Inspector
12 Biegelman continuing on cross-examination.
13
14 M A R T I N B I E G E L M A N ,
15called as a witness, having been previously
16duly sworn, was examined and testified as
17follows:
18
19 THE COURT: Inspector Biegelman, you are reminded
20 you are still under oath.
21 THE WITNESS: Yes.
22 THE COURT: Mr. Jenks, you can pick up wherever
23 you wish.
24 MR. JENKS: All right.
25
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Biegelman-cross/Jenks
1 CROSS-EXAMINATION (cont'd)
2 BY MR. JENKS:
3 Q Inspector Biegelman, yesterday you were looking at
4 3500-19-G. Do you have that document before you now?
5 A Yes.
6 Q I will ask you to look at an entry for March 22,
7 1995.
8 Now, that indicates you are in Brooklyn and that
9 you obtained the search warrants and an arrest warrant
10 from Magistrate Azrack in the Eastern District of New
11 York?
12 A Yes.
13 Q And you obtained the search warrants and arrest
14 warrant on this case from Magistrate Azrack on that date?
15 A That's correct.
16 Q And the next day you went to speak to Mr. Gordon; is
17 that correct?
18 A That's correct.
19 Q Did you notify Mr. Gordon that you had an arrest
20 warrant and an arrest warrant that the judge signed the
21 day before in the Eastern District of New York for him?
22 A No, I did not.
23 Q And for his employees?
24 A No, I did not.
25 Q Did you advise him that he had a right to counsel?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
628
Biegelman-cross/Jenks
1 A No, I did not.
2 Q Did you advise him he had a Fifth Amendment right
3 against self-incrimination?
4 A No.
5 MR. WHITE: Objection. I am not sure of the
6 relevancy.
7 THE COURT: Overruled.
8 Q Did you advise him he had a right against
9 self-incrimination?
10 A I did not.
11 Q You knew all along, that you went out to speak to
12 Gordon despite the fact you had already obtained an arrest
13 warrant and search warrant, not for one, but for two of
14 the corporations; is that right?
15 A Correct.
16 Q The very same day you obtained a search warrant for
17 the Sterling Who's Who premises from Magistrate Katz in
18 the Southern District on the same day you spoke to Gordon?
19 A Yes.
20 Q Did you obtain that search warrants from Magistrate
21 Katz prior to going to the Sterling Who's Who office
22 before or after speaking to Gordon?
23 A After.
24 Q You already had the Azrack arrest and search
25 warrants?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
629
Biegelman-cross/Jenks
1 A Yes.
2 Q Gordon was not advised by you as to his
3 constitutional rights?
4 A No, he was not.
5 Q Was anyone else you spoke to, an employee of Who's
6 Who Worldwide or Sterling Who's Who advised of any
7 constitutional rights concerning their Fifth and Sixth
8 Amendment rights?
9 A No, they were not.
10 Q I am going to also ask you now to take a look again
11 at the exhibit in front of you, and I am going to ask you
12 to look at an entry for December 21st, 1994.
13 Do you see that entry?
14 A Yes, I do.
15 Q That was in Hicksville; is that correct?
16 A Yes.
17 Q It says you met with Special Agent Joe Jordan
18 I R S C I D, Criminal Investigation Division; is that
19 correct?
20 A Yes.
21 Q And you met with Thomas Bailey and Mark Seeley with
22 Jordan; is that correct?
23 A Yes.
24 Q Thomas Bailey is the attorney, not only for the
25 better business bureau, but was the civil attorney for
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
630
Biegelman-cross/Jenks
1 Reed Elsevier; is that correct?
2 A I am not sure he represents the better business
3 bureau, but he represents Reed Elsevier.
4 Q In the civil trial before Magistrate Jordan, Bailey
5 was the attorney who represented Reed Elsevier; is that
6 correct?
7 A Yes.
8 Q And he actually did the questioning of Gordon and one
9 of the witnesses,; is that correct?
10 A Yes.
11 Q It was his firm, Whitman and Ransom who were the
12 lawyers for Reed Elsevier; is that correct?
13 A Yes.
14 Q And Mark Seeley is who, sir?
15 A Another attorney in the same firm.
16 Q Seeley is another attorney in the Bailey firm; is
17 that correct?
18 A Yes.
19 Q And was he present at the Reed Elsevier trial as
20 well?
21 A I have to look at the face of the transcripts. I am
22 not sure. He may have been. I don't recollect.
23 Q As an outgrowth -- withdrawn.
24 After the Reed Elsevier trial Magistrate Jordan
25 had awarded a civil judgment on behalf of Reed Elsevier
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1 against Who's Who Worldwide for in excess of 1.6 million
2 dollars; is that correct?
3 A I believe that's correct.
4 Q And that judgment -- you saw testimony from Jordan
5 that that judgment was going to put Gordon into
6 bankruptcy; is that correct? Did you see any testimony?
7 A I believe there was potential of what he could do,
8 but I don't remember exactly without seeing the transcript
9 before me.
10 Q All right.
11 Bailey was the very lawyer who had pushed the
12 Reed Elsevier trademark infringement case; is that
13 correct?
14 A He was an attorney representing Reed Elsevier,
15 correct.
16 Q And you were meeting with Bailey in December of 1994
17 prior to obtaining the arrest and search warrants against
18 Gordon and his employees; is that right?
19 A Yes.
20 Q And why were you meeting with Bailey, Inspector? Was
21 he orchestrating your prosecution of Who's Who Worldwide
22 and Sterling Who's Who?
23 MR. WHITE: Objection.
24 THE COURT: Sustained.
25 MR. WHITE: I would like to object to the whole
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1 line of questioning.
2 THE COURT: Sustained.
3 Q Can you tell us what conversation transpired between
4 you and Mr. Bailey?
5 MR. WHITE: Objection. Which false statement
6 does it go to?
7 MR. JENKS: To the outrageous governmental
8 misconduct claim. It has been Mr. Gordon's position all
9 along that Reed Elsevier was the impetus that pushed
10 Inspector Biegelman into actually bringing the complaint
11 and the arrest warrant when they realized they couldn't
12 collect on the judgment that Magistrate Jordan had awarded
13 them.
14 THE COURT: So what?
15 MR. JENKS: I want to find out what Bailey had
16 given to him and what it was that he had suggested they
17 do. There is internal correspondence which Mr. Trabulus
18 has, which for one, there is a memoranda from Sandra
19 Barnes, who is a vice president at Marqui's Who's Who,
20 dated back in 1993 to Mr. Bailey, indicating that perhaps
21 the postal authorities should begin confiscating their
22 incoming mail. That's one internal memorandum.
23 There is another memorandum that Mr. Trabulus has
24 which I don't have in front of me, your Honor, which in
25 sum and substance indicates from Ms. Barnes, the vice
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1 president of marquis, that Gordon is a thorn in their
2 side, and perhaps the postal inspectors should be alerted.
3 Mr. Gordon -- I will quote some of it. It would
4 not hurt our legal counsel to send a letter to postal
5 authorities or Attorney General charging false
6 advertising. I continue to monitor his activity. We do
7 have a potential problem arising with another.
8 It has been Mr. Gordon's position, the United
9 States Postal Inspection Service has been the private
10 police force of Reed Elsevier after the civil trial. We
11 submit it goes to the outrageous governmental misconduct
12 claim. And I would like to know what it is that
13 Mr. Bailey and Inspector Biegelman spoke about on the
14 September 21 meeting on this investigator summary log.
15 Why is Mr. Bailey meeting with the postal inspector.
16 THE COURT: I said at the outset the government's
17 motivation for this prosecution is not the subject of this
18 hearing.
19 MR. JENKS: You did rule that, your Honor.
20 THE COURT: I don't want to open it up at this
21 point to wholesale or even partial discovery of the
22 government's various sources or various contacts that the
23 government may have had with anybody, or everybody to
24 determine what caused the government to take any
25 particular investigative steps.
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1 What is at issue is conduct of the government,
2 not motivation. So you have to show me conduct that is
3 outrageous.
4 MR. JENKS: If we --
5 MR. TRABULUS: May I address this?
6 THE COURT: The mere fact that there is a
7 prosecution against someone is not outrageous conduct.
8 MR. JENKS: Bailey may have suggested they seize
9 the mail.
10 THE COURT: Perhaps. But Inspector Biegelman
11 testified he didn't seize the mail. So you may still be
12 able to tie it in at a later point. At this point I will
13 not permit the question. So let's move on.
14 Q Did Mr. Bailey give you any information concerning
15 Who's Who Worldwide, or Sterling Who's Who, that ended up
16 in your affidavit or complaint in support of the search
17 warrants?
18 MR. WHITE: Objection. It doesn't matter what
19 the source of it is.
20 THE COURT: Sustained.
21 You can ask a more pointed question about
22 anything we have at issue here.
23 Q Inspector, when you met with Mr. Gordon on March
24 23rd, 1995, at Sterling Who's Who offices, did Mr. Gordon
25 explain to you the benefits members received from being a
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1 member of Who's Who Worldwide or Sterling Who's Who?
2 A There was a brief discussion about the organization.
3 He showed us the CD-ROM. He told us a few of the things.
4 But the main point of the meeting which he asked us and
5 told us to come down, asked us to come down, I did not
6 contact Mr. Gordon, he contacted us, he told us to come in
7 and investigate and close down the other Who's Whos, his
8 competitors in the New York area.
9 Q This is not the first time you had contact with
10 Mr. Gordon; is that correct?
11 A No.
12 Q You had contact earlier that month?
13 A He had called, yes.
14 Q Over the year, prior to March, 1995, you had contact
15 with Mr. Gordon?
16 A With me?
17 Q Yes.
18 A No.
19 Q Did you speak to Mr. Gordon in 1991 or 1992?
20 A Not to my recollection.
21 Q Concerning West?
22 A Not to my recollection.
23 Q After you executed the search warrants at both
24 premises, do you know what happened to Who's Who Worldwide
25 and Sterling Who's Who?
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1 MR. WHITE: I missed the questions. May I have
2 the question re-read?
3 THE COURT: Yes.
4 (Whereupon, the court reporter reads the
5 requested material.)
6 MR. WHITE: Objection.
7 THE COURT: Rephrase it.
8 Q Do you know as a result of the execution of the
9 search warrants, the corporation Who's Who Worldwide went
10 to Chapter 7?
11 MR. WHITE: Objection. It assumes a fact that
12 Judge Spatt already decided was not the case. That's
13 exactly what he decided.
14 THE COURT: I will sustain the objection.
15 MR. JENKS: I will move on, Judge.
16 THE COURT: You can explore the area, if you want
17 to, about bankruptcy, but not in the form of as a result
18 of.
19 MR. JENKS: All right.
20 Q After the execution of the search warrants, did you
21 continue investigating Who's Who Worldwide and Sterling
22 Who's Who?
23 A Yes.
24 Q And what did your investigation consist of?
25 A We started interviewing people and reviewing the
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1 questionnaires we had received, and we had started doing a
2 preliminary review of the search warrant evidence.
3 Q And all that evidence was taken to the warehouse in
4 Brooklyn?
5 A To an office in Brooklyn, yes.
6 Q And you and other postal inspectors started to review
7 it there?
8 A And the U.S. Attorney's Office, yes.
9 Q And do you know what happened to Who's Who Worldwide
10 as a result of the execution of that world warrant? Did
11 the company close?
12 MR. WHITE: Objection.
13 THE COURT: Sustained.
14 MR. JENKS: I frankly don't know how else to ask
15 it, your Honor.
16 THE COURT: You will have to find another way.
17 Q Do you know whether or not Who's Who Worldwide filed
18 for Chapter 7 bankruptcy?
19 MR. WHITE: Objection.
20 THE COURT: Overruled.
21 MR. WHITE: May I be heard for 30 seconds?
22 THE COURT: A relevancy question?
23 MR. WHITE: Yes.
24 THE COURT: Overruled. He is asking one question
25 right now.
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1 A I heard they filed bankruptcy, yes.
2 Q After the execution of the search warrant; is that
3 correct?
4 A I believe it was converted.
5 Q From an 11 to a 7 after the search warrants?
6 A At some point. I don't know the exact dates.
7 Q No further business took place at the Lake Success
8 offices of Who's Who Worldwide after the execution of the
9 search warrant, did it?
10 MR. WHITE: Objection.
11 THE COURT: Sustained. He is not competent for
12 that.
13 Q Do you know if any further business was conducted at
14 Who's Who Worldwide?
15 THE COURT: Of your own knowledge.
16 THE WITNESS: Of what people said?
17 THE COURT: No, do you know of your own
18 knowledge?
19 THE WITNESS: I was told.
20 THE COURT: Were you ever on premises to be able
21 to say whether work or business was or was not conducted
22 there?
23 THE WITNESS: No.
24 THE COURT: All right.
25 Q Let's talk about the mail cover issue.
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1 You had applied for four mail covers?
2 A There was some initial ones and renewals.
3 Q Let me show you these. They have been pre-marked as
4 Government's Exhibit 3500-19 I, L, M and N. I will ask
5 you to take a look at those.
6 (Handed to the witness.)
7 THE COURT: Is it in my package?
8 MR. TRABULUS: I think it is, Judge.
9 THE COURT: Could you identify which ones you
10 gave to him again?
11 MR. JENKS: Yes, I, L, M and N.
12 (Whereupon, at this time there was a pause in the
13 proceedings.)
14 A Yes, sir.
15 Q Are those the mail covers you made applications for
16 in connection with Who's Who Worldwide and Sterling Who's
17 Who?
18 A Yes.
19 Q And are those all the mail covers you made
20 application to?
21 A To the best of my recollection, yes.
22 MR. WHITE: Objection. There are multiple ones
23 that Mr. Jenks has, your Honor.
24 THE COURT: Yes.
25 MR. JENKS: I only had four of them. For
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1 completeness sake we will put them all in.
2 (Counsel confer.)
3 Q Let's look at 3500-19 J, K and O.
4 (Handed to the witness.)
5 A Thank you.
6 THE COURT: So the record is clear, what
7 Inspector Biegelman has in front of him now is 3500-19-I
8 through O?
9 THE WITNESS: Yes, I do.
10 THE COURT: All right.
11 Q Those are the mail covers that you applied for in
12 connection with this case, correct?
13 A Yes.
14 Q And your signatures are on those documents?
15 A It is my secretary whom I authorized to sign the mail
16 cover for me.
17 Q But you applied for them and not your secretary?
18 A I applied for them.
19 Q Those are records kept in the ordinary course of
20 government business, United States Postal Service
21 business?
22 A Yes.
23 MR. JENKS: I will offer all of them.
24 THE COURT: Any voir dire, any objection?
25 MR. WHITE: No objection.
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1 THE COURT: No objection, no voir dire.
2 Government's Exhibit 3500-19-I through O are
3 received.
4 (Government's Exhibits 3500-19-I through O
5 received in evidence.)
6 Q Inspector, these mail covers go from August 29th to
7 the end of August 1994, through December 1994; am I
8 correct?
9 A Yes.
10 Q And so we are clear, after you apply for a mail
11 cover, it is sent to the postal inspector at the
12 particular post office to deliver that company's mail?
13 A I send it in to the inspection service operations
14 support group. There are a number around the country
15 where a higher level manager reviews them, process the
16 mail cover and have it sent to the particular post office
17 of the addressee.
18 Q These exhibits were all approved?
19 A Yes.
20 Q And the mail in fact was stopped so that the
21 addressees on the mail could be listed; is that correct?
22 A No, mail is not stopped.
23 Q When I say it was stopped, it was temporarily
24 detained for someone to look at it and take the addressee
25 off of it and record it on another piece of paper?
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1 A No. It is not temporarily detained.
2 Q Is it done simultaneously with the taking of the
3 mail?
4 A If I may explain? Mail is delivered at a certain
5 point of the day when the carriers leave the street, until
6 then the mail is sitting in the collection boxes or with
7 the carriers.
8 Q In the post office?
9 A Yes.
10 Prior to the carrier's scheduled leaving the
11 supervisor or designee would remove the mail depending on
12 how much mail is there. Because clearly the mail cover
13 instruction sent to the particular post office from the
14 inspection service operations support group clearly states
15 mail must not be delayed. You can't hold up the mail. So
16 a supervisor takes out a portion, complete as much as he
17 can before the carrier leaves the station, and gives the
18 mail to the carrier when he is scheduled to leave so the
19 carrier does not delay any mail.
20 Q Do you have any idea how much pieces of mail each
21 corporation got, Sterling Who's Who in Manhattan, and
22 Who's Who Worldwide in Lake Success?
23 A I don't know.
24 Q Would you say thousands of pieces in each office?
25 A I can't speculate. He received a lot of mail though.
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1 Q This mail cover, do they take all the addressees from
2 all the pieces of mail coming in on a particular day to be
3 delivered?
4 A If there were five or ten pieces potentially they
5 could do it. If there was has large volume mailing no
6 group of supervisors can do it. If you review this, you
7 will see only a certain number was done on a particular
8 day.
9 Q Was the mail delivered right after taking the
10 information from the mail cover?
11 A With the normal carrier's delivery schedule as far as
12 I know, yes.
13 Q Is there a possibility that the mail could be
14 significantly delayed if there is a mail cover on a
15 particular corporation's mail and they get voluminous mail
16 on a given day?
17 A No. It shouldn't be, because a supervisor is
18 supposed to only take enough mail or do enough mail
19 recording to be able to comply with the mail cover but not
20 delay the mail. You can see many times --
21 THE COURT: That's enough.
22 Q So that all has to be done presumably in a few hours
23 before the carrier goes down the street; out to the
24 street; is that correct?
25 A Yes.
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1 Q Did you make a specific investigation in this case to
2 determine whether or not Who's Who Worldwide mail was in
3 fact delayed or withheld from the company?
4 A I never conducted such an investigation.
5 Q You read the Carman papers; is that correct?
6 A Yes, in the last few months.
7 Q Did you do or do you know anyone who did such an
8 investigation to see whether or not Sterling Who's Who in
9 Manhattan was in fact delayed?
10 A Being in California --
11 MR. WHITE: Objection.
12 THE COURT: Let me hear the question again.
13 (Whereupon, the court reporter reads the
14 requested material.)
15 MR. WHITE: Objection, relevance.
16 THE COURT: Do you know if someone conducted an
17 inquiry as to whether it was delayed?
18 A I did not, but I know my counterparts in New York did
19 look into it, yes.
20 MR. WHITE: My objection is to the Sterling part
21 of it. The allegation set forth in Mr. Gordon's affidavit
22 in support of the motion is Who's Who Worldwide mail was
23 held up at the New Hyde Park post office was held up, and
24 not Sterling Who's Who.
25 THE COURT: Let's limit the inquiry to the Lake
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1 Success office.
2 Q Do you know whether or not employees of Gordon's
3 companies had complained about the non-receipt of mail?
4 A Other than what I read in the papers, no.
5 Q Did you speak to anyone in the service concerning an
6 investigation or complaint to the postal inspector at the
7 New Hyde Park branch about the delay of Who's Who
8 Worldwide mail?
9 MR. WHITE: At what point in time?
10 Q From August of '94 to the end of March, '95?
11 A I was unaware of any complaints at all.
12 Q Subsequent to that, subsequent to March of '95, were
13 you aware of any complaints concerning the delay of mail?
14 A No, until I read Mr. Carman's papers, no.
15 Q Now, you are the case agent in the case. Have you
16 done --
17 MR. WHITE: Objection. It is not correct.
18 THE COURT: It is not helpful.
19 MR. JENKS: Inspector Pagano is the case agent?
20 THE COURT: You were before you left?
21 THE WITNESS: Until I left.
22 Q At the time in March of 1995, you were the case agent
23 in the case; is that correct?
24 A Yes.
25 Q And did you now, coming back to New York, conduct any
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1 independent investigation on your own to determine whether
2 or not any of the mail was delayed to Who's Who Worldwide?
3 A I did not.
4 Q Do you know if anybody else in the postal inspection
5 services did?
6 A Yes, other inspectors with the U.S. Attorney's Office
7 did.
8 Q Do you know the result of that investigation?
9 MR. WHITE: Objection. They will find out in
10 rebuttal.
11 THE COURT: What do you mean?
12 MR. WHITE: When they put up their witnesses as
13 to how the mail was seized. We will put on our witnesses
14 afterwards.
15 THE COURT: Overruled.
16 Q Do you know the results of the investigation,
17 inspector?
18 A I was told no mail was delayed at all.
19 Q Who told you that?
20 A Inspector Pagano.
21 Q I will move to the issue of networking addressed by
22 Mr. Trabulus and by Mr. White.
23 As you sit here today, did you at any time know
24 how many members networked with each other if any?
25 A Other than what I was told by the CI's, no.
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1 Q Other than what you were told individually by Gross
2 and Maxes?
3 A And by the tapes, yes.
4 Q All right.
5 You don't know if any deals were made between
6 members?
7 A No.
8 Q Anyway that Gross and Maxes being mere salespeople in
9 the company would be able to tell you how much networking
10 took place?
11 A The matter -- answer to me is there were more than
12 salespeople. There were salespeople there for many years
13 and knew much about the operations. In their opinion they
14 told me what they saw and heard.
15 Q It was basically their opinion they gave you with
16 respect to the networking value of the directory and the
17 CD-ROM, correct?
18 A And also based on what I saw from the pit sheets, the
19 undercover tapes, Judge Jordan's decision which weighed
20 heavily and the other facts I previously testified to.
21 Q Lifetime members got the CD-ROM for free; is that
22 right?
23 A Yes, I believe so.
24 Q Everything on that CD-ROM is what is in the registry;
25 is that right?
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1 A I don't know if that's correct or not.
2 Q Was that your understanding from the confidential
3 informants that the CD-ROM basically listed the names of
4 the -- names and addresses the people in the registry?
5 A I believe that's what it said on the outside of the
6 CD-ROM.
7 Q Do you know that it listed also 11 million other
8 businesses on the CD-ROM, did you know that?
9 A I don't recollect that.
10 Q Did you know that there was a separate CD-ROM that
11 listed eleven million other businesses that lifetime
12 members got for free?
13 A I don't know if that was one of the other services
14 that they offered.
15 Q Was that a service they did offer for free?
16 A I don't know if it was for free or they had to pay
17 for it. I am not sure.
18 Q Did you know that Who's Who was the first
19 organization to even produce a CD-ROM in the Who's Who
20 business?
21 A I don't know if that's the first one, no.
22 Q You testified with respect to cocktail parties in New
23 York City. Do you recall that testimony?
24 A Yes.
25 Q Sterling Who's Who leased an apartment in New York
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1 City, didn't they?
2 A Yes.
3 Q And would you know if it was Who's Who Worldwide who
4 signed the lease or if it was Sterling Who's Who?
5 A At this point I don't recollect who it was.
6 Q One of the companies had an apartment in New York
7 City; is that right?
8 A My understanding is that Gordon lived there at times
9 besides living on Long Island.
10 Q Do you know where the two network or the two cocktail
11 parties were held in the City?
12 A Where I think they were?
13 Q Yes.
14 A In the conference room on the premises.
15 Q You are not aware that the company had two cocktail
16 parties at the apartment on East 53rd Street?
17 A That's perhaps what I am referring to.
18 Q Do you know there were in fact two cocktail parties?
19 A Yes.
20 Q Do you know how many people attended?
21 A Very few, I am told.
22 Q How many is a few?
23 A Less than 20, 25.
24 Q Do you know if the corporations promoted the having
25 of cocktail parties, promoted to the members?
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1 A I don't know how it was promoted.
2 Q Did the informants go to these parties to see who was
3 there and what had occurred?
4 A No. They heard this from other people in the
5 company.
6 Q Did you ever asked the inform -- ask the informers to
7 attend the cocktail parties in New York City?
8 A No.
9 Q With respect to the office of public affairs, you
10 testified there was basically no office of public affairs;
11 is that correct?
12 A Yes.
13 Q And are you aware that Ms. Sauter has maintained that
14 there was in fact an office of public affairs at Who's
15 Who?
16 A I believe that she stated that in the testimony
17 before Judge Seybert.
18 Q Were you aware of that prior to your preparation of
19 the affidavit in support of the search warrants?
20 A No. That was in April 19th or 20th of 1995, after
21 the execution of the search warrant.
22 Q So your testimony is you were not aware that
23 Ms. Sauter had told people there was an office of public
24 affairs within the company?
25 A That testimony was afterwards, no.
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1 Q Okay.
2 MR. JENKS: Your Honor, I have no further
3 questions at this point.
4 THE COURT: Just a moment, please.
5 (Whereupon, at this time there was a pause in the
6 proceedings.)
7 MR. JENKS: One more question that Mr. Gordon
8 likes.
9 THE COURT: All right.
10 Q The complaints you testified to, the hundred
11 complaints, would it be a fair statement to state that
12 those complaints were received over a five-year period of
13 time?
14 A I believe that's correct. There were a number of
15 years they were received.
16 Q Over five years, correct?
17 A I don't know if it was five years, but it was maybe
18 four to five. That may be correct, yes. It was a number
19 of years.
20 Q Did the confidential informants tell you that
21 Elizabeth Sauter was telling people that there was in fact
22 an office of public affairs?
23 A No.
24 THE COURT: Read back the question and answer,
25 Mr. Rapaport.
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1 (Whereupon, the court reporter reads the
2 requested material.)
3 THE COURT: Thank you.
4 Q Since you seized all the company's records --
5 MR. WHITE: Objection. Inaccurate.
6 THE COURT: Finish -- will you rephrase it?
7 MR. JENKS: Yes.
8 Q Are you aware that the companies gave many, many
9 refunds to customers who requested refunds?
10 MR. WHITE: Objection. At what point in time?
11 Q Throughout the course of their doing business,
12 throughout the course of your investigation.
13 MR. WHITE: Objection.
14 THE COURT: What is the relevancy of the post
15 affidavit --
16 MR. JENKS: It is prior.
17 THE COURT: Limiting it to that period?
18 MR. JENKS: Yes.
19 Q Were you aware at the time of the after date that the
20 company had given many, many refunds to customers?
21 A I don't believe I knew at that point there were many,
22 many refunds, no.
23 Q Were you aware that the company gave refunds to
24 customers who were dissatisfied with pay of its services?
25 A Reviewing the complaints that I received there were
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1 people who complained they had not received refunds. Then
2 there were some statements, I believe it was Liz Sauter or
3 someone else from the company in response to a better
4 business bureau complaint saying we played the customers
5 whole. I don't know if it was true or not.
6 Q Did you independently investigate to find out as to
7 whether or not the company did give refunds to people who
8 were not happy with its services.
9 A To do that --
10 THE COURT: Just answer the question, please.
11 A No.
12 Q You did not?
13 A No.
14 Q Do you know that the company gave many members
15 upgrades upon renewing their membership within the
16 company?
17 MR. WHITE: Objection. Assuming a fact not in
18 evidence.
19 THE COURT: It is all right.
20 Q Prior to March 30th, 1995, of course.
21 A Free or charged?
22 Q For free, free upgrades?
23 A No, I was aware that they charged people for extents
24 memberships and additional years.
25 Q Did anybody ever tell you that the company gave free
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1 upgrades to members who renewed memberships during the
2 period prior to March 30th, 1995?
3 A Free upgrades? I am unaware of that.
4 Q In other words, a five-year membership or a lifetime
5 membership?
6 A Free, no.
7 Q What other benefits to your knowledge did the company
8 give to its members, besides the CD-ROM, the wall plaque
9 you testified to, the registry of the directory, what
10 other benefits were there?
11 A At what point in time?
12 Q Prior to March 30th, 1995.
13 A Initially when the company started doing business in
14 1989, there was nothing provided but a book and a plaque.
15 The book wasn't provided until after the first year. For
16 several years I am told that's all they provided to
17 anybody. Later on, '94, thereabouts, late '93, they
18 started to add additional services. I think the CD-ROM
19 came around in '94, and some of the other supposed
20 services came about. They didn't occur until a later
21 period of time.
22 Q Let's take a look at some of the other supposed
23 services.
24 MR. WHITE: Objection. What do these services
25 have to do with any particular false statement?
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1 THE COURT: What is the relevance?
2 MR. JENKS: He indicated there was no networking
3 capability, and that the members really didn't get any
4 value for what it was they bought --
5 THE COURT: That's enough of a relevancy. All
6 right.
7 MR. WHITE: He is not asking about networking --
8 THE COURT: Let's find out what he is asking.
9 Q Were you aware, Inspector Biegelman, that Who's Who
10 Worldwide provided a long distance discount to its
11 customers?
12 MR. WHITE: Objection. What does it have to do
13 with networking?
14 THE COURT: Overruled, overruled.
15 Q Were you aware of that?
16 A I learned that, yes.
17 Q Were you aware that Who's Who Worldwide in fact
18 provided a gold Master Card to its members?
19 A I can't answer yes or no. I would like to explain
20 because I heard different things.
21 THE COURT: Remember the focus on the fact --
22 Q Every question I am asking is prior to March 30th,
23 1995.
24 A Yes, that was my answer, but, yes.
25 Q The answer is yes?
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1 A Yes.
2 Q And were you aware that Who's Who Worldwide provided
3 its members the opportunity to obtain certificates of
4 deposit in money market accounts at preferred rates prior
5 to March 30th, 1995?
6 A I don't recollect that.
7 Q Were you aware that they had a 40 percent discount if
8 you used Airborne Express, an overnight mail service for
9 its members?
10 A Yes.
11 Q And were you aware that you were able to save 40
12 percent on your business telephone bills by being a member
13 of Who's Who Worldwide?
14 A Yes.
15 Q And were you aware that they had a discounted auto
16 insurance program prior to March 30th, 1995?
17 A I read that, yes.
18 Q And were you aware that they had a med jet assistance
19 program prior to March 30th, 1995?
20 A Yes.
21 Q And were you aware, sir, that members were also able
22 to receive international phone discounts prior to March
23 30th, 1995?
24 A I think it went along with the phone discounts.
25 Q Were you aware, too, that they provided a service to
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1 members who were willing to do business in foreign
2 countries as to making contacts with those people?
3 A There was an advertisement to that effect, I don't
4 know if it actually happened.
5 Q Did you ever hear that from anyone?
6 THE COURT: Hear what?
7 MR. JENKS: That they provided a service, if he
8 wished -- if they wished to do business in foreign
9 countries, particularly Russia?
10 A No, I read that in Tribute.
11 Q Did you report any of those facts, the additional
12 member benefits or services to the magistrate when you
13 applied for the arrest warrants and search warrants?
14 A Those direct names, no.
15 Q Those facts that they provided --
16 A No.
17 Q Did you tell the magistrate that 75,000 people were
18 members who would not get any services as a result of that
19 magistrate signing that arrest warrant?
20 MR. WHITE: Objection.
21 THE COURT: Sustained.
22 Q Were you also aware that the members could use a logo
23 on their business cards or letterheads saying they were
24 members of these corporations?
25 A Yes.
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1 Q Have you seen business cards to that effect?
2 A From --
3 Q From individual members, did you see any business
4 cards from members?
5 A I seen the logos advertised in Tribute.
6 Q You have seen the wall black; is that right?
7 A Yes.
8 Q And could you possibly be able to tell us what the
9 value of the wall plaque was to a given individual
10 member?
11 THE COURT: Talking about the cost value?
12 MR. LEE: The networking value.
13 MR. JENKS: That's the next question.
14 Q The cost value of the wall plaque when you got a
15 membership, how much did the wall plaque cost, do you
16 know?
17 A You asked me a few questions, do you want me to
18 answer all at once.
19 Q When you bought a regular membership you got listed
20 in the directory and you got a wall plaque; is that
21 correct?
22 A Yes.
23 Q Do you know the value of the wall plaque?
24 A Those plaques cost between six and ten dollars,
25 possibly.
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1 Q Did you individually investigate that?
2 A No. But I know from working the West case the cost
3 of plaques, and I know people in the plaque business, so I
4 know what the cost of a plaque like that would be.
5 Q You didn't go to the manufacturer of these plaques
6 and find out how much it cost to make them?
7 MR. WHITE: Objection. We are going far down the
8 road from networking.
9 THE COURT: I know, but in answer to that last
10 question, can you --
11 A Can I answer with an example?
12 THE COURT: The question was: Did you go to a
13 manufacturer to find out what the costs were for the
14 plaques?
15 THE WITNESS: No, I didn't.
16 Q Did you know what the networking value of the plaque
17 is? Would you be able to determine a networking value of
18 having the plaque?
19 A In my opinion? Yes.
20 Q And what would the networking value of the plaque be
21 in your opinion, Inspector?
22 A In my opinion if the person who paid for that plaque,
23 thinking he was getting a plaque from an organization who
24 claimed they did a specific check from this man --
25 Q I just asked --
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1 THE COURT: You asked his opinion. He is
2 entitled to tell you what his opinion is.
3 THE WITNESS: You asked my opinion. And I want
4 to make it clear based on what I knew from speaking to
5 people in the West case who had these plaques on the wall,
6 and told me they were embarrassed because they thought
7 when they put these plaques up, it meant something, they
8 were set aside from everybody else based on education or
9 experience or something they had done. Had they known
10 everybody was getting in the book based on willing to pay
11 would not have made them proud to put the plaque up.
12 In my opinion it is an ego thing. It was
13 something said on the tapes by Mr. Gordon and other
14 people.
15 From my experience, some schemes go to fraud and
16 greed, some goes to vanity. This was to vanity. There
17 was no value in these plaques because these people didn't
18 know how the plaques were actually created.
19 Q All the Who's Who goes to vanity, whether Marqui's or
20 Gordon's?
21 A Yes.
22 Q Does Marqui have a plaque?
23 A Yes.
24 Q What is the difference between the plaque that Marqui
25 has and the one Gordon has?
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1 A I wasn't investigating Marqui's Who's Who.
2 Q But they sold the plaque, Marqui?
3 A I believe they do, they did.
4 Q They obtained members from mailing lists?
5 A Yes.
6 Q And you are going to sit here and tell me the
7 networking value of Marqui's plaque is greater than the
8 value of Gordon's plaque?
9 A The difference I understand is the background
10 research they do, and the background information provided
11 and checked. And you don't have to pay to get into the
12 book. That's the difference. Can you pay if you want to
13 buy the book. But you don't have to pay to get into the
14 book.
15 Q You didn't have to pay to become a listee in Gordon's
16 book either?
17 A A listee is not the same thing I saw in the other
18 books.
19 MR. JENKS: Thank you, inspector.
20 THE COURT: Who is next?
21 MR. NELSON: I will take a shot.
22 THE COURT: I will tell you what, it is 20 to
23 4:00. We will go until 4:00 and take a break and then rap
24 it up.
25 MR. WHITE: Your Honor, how late are we going
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1 today?
2 THE COURT: 5:30.
3 MR. WALLENSTEIN: Can you do it in 18 minutes
4 Alan?
5
6 CROSS-EXAMINATION
7 BY MR. NELSON:
8 Q To show you two tapes, EZ-23 and EZ-45, and ask you
9 if you recognize those items.
10 (Handed to the witness.)
11 A No, I have not seen those before.
12 THE COURT: Those are 23 and 25?
13 MR. NELSON: 45, your Honor.
14 I had the opportunity to speak with Mr. White
15 before we commenced the proceedings today. Mr. White said
16 he would stipulate that these are in fact the tapes
17 provided by the informants in this matter.
18 MR. WHITE: Your Honor, they appear to be the
19 ones that the government had Carroll Audio provide to the
20 defendants.
21 THE COURT: Give me a little further detail.
22 MR. NELSON: I will ask further questions about
23 it.
24 THE COURT: So, there is no question about the
25 authenticity about these?
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Biegelman-cross/Nelson
1 MR. WHITE: I think Mr. Nelson will play them so
2 we will find out. But I have no reason to doubt that.
3 THE COURT: All right.
4 Q Am I correct that you testified in the course of
5 direct examination that numerous informants worked at
6 Who's Who Worldwide at the behest of the government?
7 A I don't think I said numerous. I said a few.
8 Q How many?
9 A At different points in time, seven.
10 Q When you say different points in time, that's the
11 period of July 1994 up to and including the execution of
12 the search warrant in March of 1995?
13 A Repeat the dates again, I am sorry.
14 Q You will first, 1994, when you first met with
15 Mr. Gross to commence this investigation, and March of
16 1995, when you executed the search warrants to I guess
17 terminate the active surveillance of the investigation?
18 A Actually, August of '94 to March of 95.
19 Q How many of those informants worked at the 1983
20 Marcus Avenue location?
21 A Three or four.
22 Q Who were those informants?
23 MR. WHITE: Objection.
24 THE COURT: Sustained.
25 Q Was there an informant who worked there who bore the
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1 initials EZ?
2 MR. WHITE: Objection.
3 MR. NELSON: It is pretty hard to authenticate
4 the tapes and who made them without finding out.
5 THE COURT: Do you know who they are?
6 MR. NELSON: I have an inkling. It is fairly
7 hard to know until I find out from the witness who they
8 are. There are pseudo names used for all the people.
9 THE COURT: Why is the name important?
10 MR. NELSON: So I will have an understanding as
11 to who the individual is so we can authenticate this.
12 THE COURT: They are stipulating to the
13 authenticity, the name is irrelevant, unless we know they
14 were working at the location at the time. It hasn't been
15 established yet why we can't just continue to refer to
16 them as EZ.
17 Q Was there an informant working at Who's Who Worldwide
18 at 1983 Marcus Avenue who bore the initials EZ who used
19 the pseudo name Elliot Zerring?
20 A Yes.
21 Q And his true name is Elliot Zerring?
22 MR. WHITE: Objection.
23 THE COURT: Do you know his true name?
24 A That's his true name.
25 THE COURT: Is that Z E R R?
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1 THE WITNESS: Yes, I N G.
2 Q Is it correct that Mr. Zerring worked at Who's Who
3 Marcus Avenue at your instruction?
4 A Yes.
5 Q Had he ever worked at Who's Who Worldwide prior to
6 the period of time that you instructed him to go to work
7 at that location?
8 A No, he did not.
9 Q Did he work in any other telemarketing capacity
10 before he went to work at Who's Who Worldwide?
11 A No, he did not.
12 Q Am I correct that prior to the date -- withdrawn.
13 Approximately when did Elliot Zerring first start
14 working at Who's Who Worldwide at your instruction?
15 A Approximately December '94.
16 MR. LEE: I couldn't hear.
17 THE WITNESS: December '94.
18 MR. WHITE: Your Honor, could I object here?
19 I think we need some kind of offer of proof where
20 this is going. I thought Mr. Nelson was getting up to
21 talk about a particular tape of Mr. Martin on page 55 of
22 the complaint. Neither of these two tapes is that tape.
23 I am not sure what any of this has to do with any of the
24 alleged false statements?
25 MR. NELSON: If I might, EZ-23 is in fact that
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1 recording.
2 THE COURT: Which recording?
3 MR. NELSON: From December 29th, 1994.
4 MR. WHITE: What is E?
5 A Yes, sir 45?
6 MR. NELSON: That's a recording of -- counsel
7 confer.
8 THE COURT: You wanted to find out we are going?
9 MR. WHITE: I didn't realize E?
10 A Yes, sir. 23 was the one he was talking about.
11 THE COURT: All right.
12 Q Am I correct, Inspector, prior to December 29th,
13 1994, Mr. Zerring entered a guilty plea in federal
14 district court to charges of mail fraud, tax fraud and
15 income tax evasion?
16 A Yes.
17 Q And am I correct that his guilty pleas had been in
18 connection with an insurance fraud scam?
19 A Yes.
20 Q And that insurance fraud span involved allegations
21 that he and other people had done apparently fire or water
22 damage to various facilities that he had operated?
23 A Or inflated claims and made payoffs, yes.
24 Q The amount of that claim is in excess of 20 million
25 dollars?
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1 A The one he pled to, yes.
2 Q And were you the case agent who handled the
3 investigation involving Elliot Zerring?
4 A Yes.
5 Q Am I correct that the plea that Elliot Zerring
6 entered was in connection with a plea agreement with the
7 government?
8 MR. WHITE: Objection.
9 THE COURT: Sustained.
10 Q Can you relate to us how it is that it came to pass
11 that Elliot Zerring, who had been the target of an
12 investigation that you conducted into insurance fraud came
13 to work at Who's Who Worldwide, and an investigation into
14 telemarketing fraud?
15 MR. WHITE: Objection.
16 THE COURT: Sustained.
17 MR. NELSON: With the Court's permission I would
18 like to move in evidence EZ-23 at this time.
19 THE COURT: What is it so we know?
20 MR. NELSON: A tape recording from December 29th,
21 1994, recorded by Elliot Zerring.
22 I have a few predicates questions first.
23 THE COURT: All right.
24 Q Am I correct, Inspector Biegelman, that Elliot
25 Zerring was asked to wear a body recording device for
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1 purposes of recording conversations of various employees
2 or managers or workers while working at Who's Who
3 Worldwide?
4 A That's correct.
5 Q And did he then provide the tape recordings to you?
6 A Yes, he did.
7 Q And would EZ-23, were they tapes which were marked as
8 EZ-23 and other numbers correlating to the dates he
9 worked?
10 A They would be correlation between the dates he worked
11 there and the tapes he provided, yes.
12 Q Did you mark on each of those tapes the date that
13 such a recording was made?
14 A Yes.
15 MR. NELSON: At this time, your Honor, I would
16 move in evidence EZ-23.
17 THE COURT: Mr. White?
18 MR. WHITE: No objection.
19 THE COURT: All right.
20 Anybody else?
21 No objection being heard, EZ-23 is received in
22 evidence as Defendant's Exhibit EZ-23.
23 MR. NELSON: Thank you, your Honor.
24 (Defendant's Exhibit EZ-23 received in evidence.)
25 MR. NELSON: Your Honor, I previously provided to
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1 the government and to the Court a transcript of an excerpt
2 of tape EZ-23, tape one, side A, in fact, there are two
3 such excerpts.
4 THE COURT: I recall getting one excerpt.
5 MR. NELSON: If I can approach the bench, I will
6 provide a photocopy of the second excerpt.
7 (Handed to the Court.)
8 THE COURT: Thank you.
9 Do you have the excerpt of the first, do you have
10 an extra copy?
11 MR. NELSON: I don't have an extra copy. I will
12 provide mine.
13 THE COURT: No. I will listen.
14 Q Do you have before you Government's Exhibit 13, the
15 affidavit in support of the search warrant at this time?
16 A I do not, but I will in a second.
17 (Handed to the witness.)
18 Q If you can please turn to page 55, paragraph 11 of
19 the affidavit in support of the search warrant. Do you
20 have that before you?
21 A Yes, I do.
22 Q Did you have an opportunity to -- did you have an
23 opportunity to read that to yourself at this time?
24 (Whereupon, at this time there was a pause in the
25 proceedings.)
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1 A Yes. I have.
2 Q And did you review the tape that you relied upon
3 which was recorded on December 29th, 1994 prior to
4 preparing the affidavit?
5 A Yes, I did.
6 Q And that would be tape EZ-23, dated December 29th,
7 1993; is that correct?
8 A Yes.
9 Q Okay.
10 MR. LEE: '94.
11 MR. NELSON: That's right.
12 Q Is it correct you swore in the complaint that at a
13 sales meeting on December 29th, 1994, quote, Osman advised
14 the company's sales staff to misrepresent the company's
15 identity to potential customers, by telling them we are
16 the original Who's Who?
17 A That's what I said, yes.
18 Q I would like you to review a transcript of that
19 recording. And I would ask the Court's permission to also
20 play a portion of EZ-23 which would begin on side A,
21 counter number 186, going to approximately 200.
22 THE COURT: Do we have a tape player?
23 MR. NELSON: Yes. It is all set up.
24 THE WITNESS: You are playing the whole thing?
25 MR. NELSON: Yes. It runs a few moments only.
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1 THE COURT: This tape recorder operates at a
2 different speed. Has it been tested?
3 THE CLERK: I will get another one.
4 MR. NELSON: Is this a good time to test it
5 perhaps?
6 THE COURT: Yes. I suppose this is a good time
7 to take a break.
8
9 (Whereupon, a recess is taken.)
10
11 THE COURT: Are we now in a position to play?
12 MR. NELSON: We are in a position to play this
13 portion. Unfortunately I wanted to play another portion.
14 Since the recorder we have doesn't have a counter, it
15 would be impossible to play that portion now, so we will
16 skip it and find it at another time.
17 THE COURT: I am not sure what you are saying?
18 MR. NELSON: I am playing a portion which is 186
19 to 200, the next portion is 310. We don't have a counter
20 on this recorder.
21 THE COURT: You will play only this portion?
22 MR. NELSON: Just this portion.
23 (Tape is played.)
24 Q I would like to ask you a couple of questions up to
25 this point.
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Biegelman-cross/Nelson
1 Inspector, am I correct, or do you recognize that
2 voice as being that of Frank Osman?
3 A From the notes I have I believe it is, yes.
4 Q And you understood Frank Osman to be a manager at the
5 time the recording was made, on December 29th, 1994; is
6 that correct?
7 A Yes.
8 Q And am I correct that based upon your investigation
9 you were able to determine that Mr. Osman came to work at
10 Who's Who Worldwide sometime in 1991 and left in 1992?
11 A Approximately, yes.
12 Q And did you come to learn that he returned to Who's
13 Who Worldwide sometime around the last week of November
14 1994?
15 A Approximately in that time period.
16 Q So, at the time that this recording was made,
17 Mr. Osman had been working for Who's Who Worldwide for
18 approximately one month consecutively; is that correct?
19 A If I could check my affidavit I can tell you for
20 sure. But I believe --
21 Q Certainly.
22 (Whereupon, at this time there was a pause in the
23 proceedings.)
24 A Yes, he returned to the company in November of 1994.
25 Q And he had been there for approximately one month at
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1 the time this recording was made, give or take a week?
2 A Give or take, yes.
3 Q Am I correct that this meeting that was being
4 recorded was a meeting with him and various sales
5 representatives?
6 A Salespeople, yes.
7 Q And obviously Mr. Zerring was one of those sales
8 representatives recording this as it was taking place with
9 a body wire; is that correct?
10 A Yes.
11 (Tape is played.)
12 Q I would like to direct your attention to lines 20
13 through 22 of the transcript that you have before you.
14 Am I correct that during this period of time what
15 Mr. Osman tells the salespeople are: Sure, there are a
16 few, a few people out there that are selling the same
17 concept, no big deal, there's no such thing as
18 competition?
19 A That's what he says.
20 Q All right.
21 (Tape is played.)
22 Q Now, Inspector, you had an opportunity to listen to
23 recording?
24 A Yes.
25 Q And you followed that by reviewing the transcript as
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Biegelman-cross/Nelson
1 well?
2 A Yes.
3 Q On the second page of the transcript lines five
4 through eight that I provided to you, he sells the sales
5 staff, quote, don't worry about the other people out
6 there. They are struggling, you know we are the original
7 Who's Who, act it, feel it, be proud of what you do, you
8 know.
9 That's what Mr. Osman says?
10 A Yes.
11 Q And those are the words he says during the course of
12 this recording, correct?
13 A Yes, those are the words.
14 Q Does Mr. Osman tell the sales staff in the exact
15 words while he is speaking to them, to speak to customers
16 on the telephone and tell them they are the original Who's
17 Who?
18 A That's my characterization of --
19 Q Answer the question, please, sir.
20 THE COURT: Wait, wait.
21 Restate the question. Re-read the question,
22 please, Mr. Rapaport.
23 (Whereupon, the court reporter reads the
24 requested material.)
25 THE COURT: That can be answered yes or no.
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1 THE WITNESS: No.
2 Q And there is no point in the recording, is there,
3 sir, that he sells, Elliot Zerring, or any of the other
4 sales staff, to misrepresent on the telephone to
5 customers, the words "this is the original Who's Who"; is
6 that correct?
7 THE COURT: In those exact words?
8 THE WITNESS: In those exact words, no.
9 Q In fact, he makes it clear that there are a lot of
10 people out there doing the exact same thing; isn't that
11 correct?
12 A That's what he says.
13 Q And am I correct that it is your testimony, and I
14 believe you said this three days ago, that you were --
15 that you assumed that Mr. Osman was suggesting to the
16 sales staff by this statement that they should
17 misrepresent that this is the original Who's Who by the
18 statement; is that correct?
19 A I don't know if I said assumed. But I said that
20 based on not only this tape but all the previous tapes
21 that were made in this, and Mr. Martin's -- Mr. Osman's
22 January 1993 candid conversation with Steven West.
23 Q Now, he actually doesn't say during the course of
24 this recording, to make it clear for the record, what you
25 are claiming that is that he instructed employees to
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1 misrepresent Who's Who Worldwide as the original Who's
2 Who; is that correct?
3 A He does not say those precise words.
4 Q He doesn't say those precise words?
5 A No.
6 Q And you testified to a large extent in making the
7 determination that you assumed that is what he was doing,
8 premised on a recording you acquired when you took over
9 this investigation of Mr. Osman that took place on January
10 20th, 1993; is that correct?
11 A Yes.
12 Q Now, that recording was made during the course of a
13 fictitious job interview with Steve West; is that correct?
14 A Yes.
15 Q And that recording was made literally two years
16 before this recording was made; is that right?
17 A Almost, yes.
18 Q Excuse me, 23 months before, to be a little more
19 precise.
20 Am I correct, and I believe you told us a little
21 bit earlier, that Osman was not an employee of Who's Who
22 Worldwide at the time he spoke with Steve West back on
23 January 20th, 1993?
24 A He was not.
25 Q In fact, he was supposedly applying for a job at that
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1 time; is that right?
2 A Yes.
3 Q And in fact -- withdrawn.
4 Am I correct, as you told us just before, that
5 Mr. Osman didn't even return to Who's Who Worldwide until
6 approximately a month before this particular recording was
7 made; isn't that right?
8 A That's correct.
9 Q And based upon your memory as you sit here now, how
10 many other recordings do you have where Mr. Osman speaks
11 to employees of Who's Who Worldwide from the time he
12 returns in late November 1994, to the date of this
13 recording?
14 A There are several, but I couldn't tell you without
15 seeing the logs and tell you how many.
16 Q During the course of your investigation did you come
17 to learn that over the two-year period of time from
18 November 1992 when Mr. Osman left Who's Who Worldwide,
19 until his return in November of 1994, there had been
20 numerous changes implemented at Who's Who Worldwide? Did
21 you come to learn that?
22 A You have to specify what kind of changes.
23 Q You listened to the tape and reviewed the transcript
24 of the January 20th, 1993 recording; is that correct?
25 A Yes.
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1 Q And during the course of that recording, do you
2 recall that Mr. Osman indicated that one of his concerns
3 was that he didn't have a CD-ROM, although they were
4 talking about getting one?
5 A I think what he said exactly is that the problem he
6 saw is that they were saying they had a CD-ROM and had a
7 credit card, but they did not have it. And I believe his
8 words were they are on the pitch, but it is not in
9 existence yet.
10 Q In 1994 when he returned, was there a CD-ROM?
11 A Yes.
12 Q Was there a credit card?
13 A Yes.
14 Q And am I correct that other changes that also existed
15 is that there was a Tribute Magazine that existed that
16 didn't previously exist?
17 A That's correct.
18 Q And I believe one of the things that you really
19 pinned what you said on, is that there were no
20 nominations, one of the things you said, in January of
21 1993; is that correct?
22 A Yes.
23 Q And in the Tribute Magazine, that has been introduced
24 in evidence, in fact there are nominations, nomination
25 ballots?
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1 A Yes.
2 Q And there were nomination ballots sent out regularly
3 as part of all the solicitations; is that correct?
4 A Yes.
5 Q And there were also nomination ballots that existed
6 when you executed your search warrant; isn't that correct?
7 A Yes.
8 Q And you became aware of the fact that the company was
9 regularly sending out in its mailings nomination ballots
10 to individuals who were going to be prospective members?
11 A In what format?
12 Q They were in the Tribute Magazine, and when someone
13 became a member they could nominate two other individuals;
14 is that correct?
15 A Yes. And sometimes they said three.
16 Q In fact, that was a change from the time he left the
17 company until the time he returned to the company; isn't
18 that correct?
19 A Yes.
20 Q So that to a large extent many of the things that
21 were on that recording in January of 1993 had dramatically
22 changed by his return in November of 1994; isn't that
23 correct?
24 A That's correct.
25 Q Were you aware as to whether or not Mr. Osman had
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1 been a manager at Who's Who Worldwide during the time of
2 his employment from November of 1991 to November of 1992?
3 A Yes. He said on the tape, the January of '93 tape,
4 he started out as a salesman. And Gordon liked what he
5 was doing, so he made him a manager.
6 Q Were you aware prior to the time that you prepared
7 the search warrant, or the affidavit in support of the
8 search warrant, what percentage of the time in 1991 he
9 spent as a salesperson, and what percentage he spent as a
10 manager?
11 A No, I didn't know that.
12 Q And are you aware of that today?
13 A No.
14 Q When he returned to the company in 1994, are you
15 aware as to whether he returned as a manager or
16 salesperson initially upon his employment?
17 A I believe he came back as a manager.
18 Q Am I correct, sir, during the course of time during
19 the period of the recording and the transcript that you
20 have, does Mr. Osman specifically state to any of the
21 employees of Who's Who Worldwide that they should
22 misrepresent the company's identity to particular
23 customers, by telling the customers, we are the original
24 Who's Who? He does not say that; is that correct?
25 A In substance or precisely?
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1 Q Precisely.
2 A No, he doesn't.
3 Q That's an assumption you acquired based upon your
4 review of his statement made two years earlier; is that
5 correct?
6 A And other tapes made at the time he came back in
7 1994, which are mentioned in my affidavit.
8 Q Can you tell us what other tapes those might be which
9 exits between the period of time from his return in late
10 November, 1994, to the date of this recording on November
11 29th, 1994, which would form the basis of your opinion
12 that he was instructing the various employees on that date
13 to make that misrepresentation?
14 MR. WHITE: Your Honor, he said November. It is
15 December 20th.
16 MR. NELSON: Between November of 1994, late
17 November of 1994, and December 29th, 1994.
18 A On page 54 in my affidavit I talk about a tape
19 recording on December 16th, where C I 3 is posing as a
20 customer, and he speaks with Osman on the tape. And Osman
21 is stating, quote -- basically it is a question of how are
22 they nominated?
23 Osman states, generally speaking most members
24 are, are, as I say nominated by other members. It is also
25 my experience that most of the members nominated or
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1 nominated by people which like to remain anonymous because
2 they don't like the people to feel obligated by mentioning
3 of their names.
4 He goes on to say in paragraph 10, that the
5 company did not solicit members from mailing lists; that
6 the selection process for members was very exclusive. And
7 when the C I 3 at top of page 55 asked him, was he
8 selected from a mailing list, Osman stated, quote, no,
9 absolutely not. That's not the way we go. You know, our,
10 our registry, and our membership, if you will, is
11 exclusive; that it is the last thing in the world we do.
12 Then he goes on to say only seven percent of the
13 people we talk to are, you know, you know, are, are,
14 allowed a membership actually. And that occurred over a
15 week and a half prior to that conversation which is listed
16 in the 11th.
17 Now, from that conversation it was clear to me
18 that he was making false statements at that company.
19 Q Is there anything in any of the recordings during
20 that period of time, that one month period of time, which
21 would reflect that he instructed any other individuals to
22 make such false statements?
23 A Without going through all the tapes that I have not
24 looked at recently, I couldn't tell you.
25 Q Well, do you know how many recordings you have of
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1 Mr. Osman between his return to the company on December
2 29th, 1994?
3 A I don't recollect at this point. They have been with
4 the Assistant U.S. Attorney and the other postal
5 inspector.
6 Q At the time you prepared this affidavit you were in
7 possession of all those tapes; is that right?
8 A Yes, I was.
9 Q And is it fair to say that a recording of Mr. Osman
10 instructing an employee to make a false representation
11 would have been a material recording -- you would have
12 deemed that to be a complete and important recording; is
13 that correct?
14 A Yes.
15 Q And that's the type of affidavit you would seek in
16 support of your affidavit, include in support of your
17 affidavit for the search warrant?
18 A Yes.
19 Q Did you include any other such recordings where he
20 specifically instructs another employee to make a false
21 statement?
22 A The only one in the affidavit is the one you see.
23 Q That's the December 29th conversation wherein he does
24 not instruct any employee to make a false statement; is
25 that correct?
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1 A We have an argument on that. If you say that
2 precisely, no. But my characterization of what he was
3 trying to do, yes.
4 Q Your assumption of what he was trying to do?
5 A My characterization of the evidence. He was making
6 an untrue statement. They were not the original Who's
7 Who.
8 MR. NELSON: I would ask that be stricken as not
9 responsive.
10 THE COURT: The motion is denied.
11 Q We were speaking yesterday about Michael Maxes.
12 I believe you testified yesterday about your
13 knowledge of Michael Maxes making false statements before
14 you swore to the affidavit; is that correct?
15 A That's correct.
16 Q And you testified yesterday that you relied upon an
17 interview of March 3rd, 1995 conducted of Maxes; is that
18 correct?
19 A Yes.
20 Q And you recorded the notes of that interview as
21 Exhibit 4?
22 A I believe that's Exhibit 4.
23 Q Do you have Exhibit 4 before up right now?
24 A No, I do not.
25 THE COURT: For the record, it is S-4.
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1 MR. NELSON: I apologize.
2 THE COURT: I wanted to make sure the record is
3 clear.
4 (Handed to the witness.)
5 Q Inspector, I would like to have you turn to the
6 bottom of page 6 of Exhibit S-4 -- I am sorry, page 7 of
7 S-4.
8 Could you read to us what it is you wrote at the
9 bottom of that page.
10 THE COURT: Talking about page 7 now?
11 MR. NELSON: 7 of S-4.
12 THE COURT: At the bottom?
13 THE WITNESS: Membership consists of all levels,
14 not just top managers, dash, anyone who has a credit card,
15 dash, McDonald's managers, school teachers, law
16 enforcement, post office in the book.
17 Q Am I correct you took that to mean school teachers,
18 law enforcement personnel, postal employees, would be
19 accepted into the company?
20 A Yes, and would be in the book.
21 Q And that's what Mr. Maxes told you on March 3rd,
22 1995; is that correct?
23 A Yes.
24 Q I would like to provide you a transcript of EZ-45. I
25 provided the Court with a copy previously.
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1 THE COURT: You provided me with EZ-45? I have
2 23.
3 THE WITNESS: Here is an extra copy.
4 THE COURT: Thank you.
5 Q I would like to show you a copy of a tape, EZ-45,
6 which was recorded on February 3rd, 1995.
7 (Handed to the witness.)
8 I have previously shown this tape to the
9 government.
10 MR. NELSON: I would like to offer in evidence at
11 this point in time EZ-45.
12 THE COURT: This is a tape of what day, do you
13 say?
14 MR. NELSON: February 3rd, 1995.
15 THE COURT: Any objection?
16 MR. WHITE: Your Honor, I have not listened to
17 it. I didn't have any notice that that's the case.
18 THE COURT: You see the transcript here.
19 MR. WHITE: Yes.
20 THE COURT: And --
21 MR. WHITE: I cannot from the numbers and the
22 seven lines here immediately identify it, that, yes, this
23 is the tape or the transcript.
24 THE COURT: We will hear the tape. If it turns
25 out not to be what it purports to be, we will see. Let's
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1 do it that way. We can play it and use that as an
2 authentication device.
3 MR. WHITE: All right.
4 THE COURT: I will allow you to play the tape.
5 MR. NELSON: Subject to connection.
6 THE COURT: Right.
7 MR. NELSON: For the record this would be EZ-45
8 side 1 at counter number 221.
9 (Tape is played.)
10 Q Inspector, have you had an opportunity to listen to
11 the recording and compare to it the excerpt of the
12 transcript which I provided to you?
13 A Yes.
14 Q And does it appear to be a fair and accurate
15 transcript of the recording?
16 A I think basically, yes.
17 Q Do you recognize that recording to be a portion of a
18 recording which Elliot Zerring made on or about February
19 3rd, 1995?
20 A I believe so.
21 MR. NELSON: Your Honor, at this time I offer
22 EZ-45 into evidence.
23 THE COURT: Mr. White?
24 MR. WHITE: No objection.
25 THE COURT: Anybody else?
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1 Hearing no objection, it is received as
2 Defendant's Exhibit EZ-45.
3 (Defendant's Exhibit EZ-45 received in evidence.)
4 Q Inspector Biegelman, do you recognize the voice of
5 the individual --
6 MR. WHITE: Excuse me, objection. I was late
7 with this.
8 I am not sure again what issue in the Franks
9 hearing this goes to.
10 The other issue was the alleged
11 mischaracterization of Mr. Osman's comment.
12 THE COURT: This goes to the nomination and
13 selectivity issue, it seems to me. There was specific
14 testimony by Inspector Biegelman about who could come in.
15 MR. WHITE: If that's why it is offered, fine.
16 MR. NELSON: It goes for two purposes. The
17 second one is the issue of the credibility of Mr. Maxes.
18 THE COURT: You can offer it for that purpose. I
19 am not receiving it necessarily for that purpose. Because
20 the credibility of Mr. Maxes I made clear in a prior
21 ruling is not for me to determine. It is acceptable on
22 the other issue, and what the relevancy is beyond that we
23 can leave for another day or another time in any event.
24 Q Inspector Biegelman, do you recognize the voice in
25 that recording?
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1 A I think it is Bruce Gordon, but I am not 100 percent
2 sure.
3 Q And am I correct that in that recording the person
4 you believe is Bruce Gordon specifically states he does
5 not want teachers, postal workers or law enforcement
6 members to be members of Who's Who Worldwide?
7 A I don't see where it says teachers there. It says in
8 here, marshal, post master.
9 Q When you say marshal, is not a marshal a law
10 enforcement personnel?
11 A I think there is a city marshal who may not be. I am
12 not sure exactly what it means by that. But it may very
13 well be, yes.
14 Q And he also indicates that postal employees should
15 not be people who are accepted into Who's Who Worldwide?
16 A It says postmaster, yes.
17 Q And during the course of the recording, there is some
18 indication of some statement of giving back the card.
19 Did you understand that to mean the solicitation
20 card?
21 A The lead card they use to make the phone call.
22 Q So did you understand what Mr. Gordon was saying
23 there is if you have a postal worker, if you have a person
24 in law enforcement, it is not an acceptable individual, so
25 you should give back the card and get another card to the
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1 people who are the sales managers?
2 A In substance, yes.
3 MR. WHITE: Objection.
4 Before they go any further, before it is
5 established, the relevance -- that Inspector Biegelman
6 even listened to this tape prior to the search warrant --
7 there is no testimony to that.
8 THE COURT: You can ask this question, and I will
9 permit it since it was a tape in the possession of the
10 government.
11 Q Since it was raised by the government, did you have
12 the opportunity to meet with Elliot Zerring on each and
13 every occasion he made a recording?
14 A Or shortly thereafter at some point, yes.
15 Q Did you sit down with Mr. Zerring to review the
16 recordings that were made?
17 A Sometimes with him, and sometimes I did it myself.
18 Q Did you make it a point to review each and every one
19 of those recordings?
20 A I don't know if I reviewed every tape, but I reviewed
21 most of the them, yes.
22 Q During the course of your review of those recordings,
23 did you write notes concerning the subject or the
24 substance of the recording?
25 A In some cases, yes.
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1 Q Do you have the notes you prepared while you were
2 reviewing the tapes, and the notes supplied to you by
3 Mr. Zerring?
4 A They were all turned over to the government.
5 MR. NELSON: I ask for the notes prepared by
6 Inspector Biegelman during the time he reviewed the tapes
7 as 3500 material. These are notes prepared by the agent
8 during the period of time he is listening to the
9 recordings.
10 MR. WHITE: Your Honor, there are --
11 THE COURT: I will hear you on it.
12 MR. WHITE: Your Honor, they are not his
13 statements. They are his transcriptions of tapes, all of
14 which the defendants have had for a year. It is not a
15 statement of Inspector Biegelman.
16 MR. NELSON: Your Honor, it is my understanding
17 that the transcripts were not made contemporaneously with
18 Inspector Biegelman listening to them.
19 MR. WHITE: You are saying not contemporaneous?
20 MR. NELSON: That's right.
21 MR. WHITE: Who told you that?
22 MR. NELSON: I don't know. We will find out.
23 THE COURT: I will reserve on that.
24 Q When you listened to the recordings, Inspector, did
25 you date the recording and the date you made that review
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1 of the transcript -- of the recording -- withdrawn.
2 A My recollection is that on many of them, yes, I did.
3 I would say the date I transcribed -- and I would
4 transcribe portions of tapes, yes.
5 Q When you say you transcribed portions of tapes, did
6 you personally make the transcriptions?
7 A The rough copies I would write out the transcript and
8 listen to the tapes.
9 Q In substance you would listen to the tapes and type
10 or write out a transcript verbatim?
11 A Of parts of the tapes, yes.
12 Q During the time that you were preparing the
13 transcript did you write any notes down which indicated
14 what your beliefs were as to your interpretation as to
15 what various portions of the recordings meant?
16 A No. I think most of them were pretty clear from what
17 I wrote into the transcripts.
18 Q Let's turn to one that we have already indicated
19 which is subject to interpretation which is December 29th,
20 1994, on that date. On that date, when you listened to
21 the tape that occurred on that date, did you write any
22 notes down with respect to your state of mind while you
23 were listening to the statement made by Frank Osman with
24 which you assumed he was attempting to tell the various
25 different employees of Who's Who Worldwide to make
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1 misrepresentations to customers?
2 A Did I write down my state of mind, no.
3 Q Did you write down what your belief was, what you
4 believed him to be stating which you later put into a
5 search warrant affidavit some month and a half later?
6 A No, I didn't write my thoughts.
7 Q Did you write any notes that day?
8 A I can't tell you without seeing the transcripts.
9 Q Do you have any notes from December 29th, 1994?
10 A I don't recollect at this point. I prepared a lot of
11 notes and transcripts throughout this time period.
12 Q Are the notes you prepared and the rough copies of
13 the transcripts you prepared still in existence?
14 A Any notes and transcripts I prepared were turned over
15 when I transferred the case.
16 MR. NELSON: Your Honor, I would specifically ask
17 for production of any notes or records with respect to the
18 transcription of the tape EZ-23 recorded on December 29th,
19 1994.
20 THE COURT: That's a point of request, Mr. White,
21 that I will hear you on.
22 MR. WHITE: If I understood from your Honor's
23 comment two minutes ago, it sounds as if you are saying if
24 these tapes are in possession of the government, you are
25 basically holding the government on notice that they
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1 exits; in other words, it is not an excuse for the
2 government to say that that is a tape that Inspector
3 Biegelman had and didn't review. If that's the case it
4 doesn't matter what he reviewed and what he didn't. . You
5 are holding the government for being responsible for
6 knowing the contents of all those tapes.
7 THE COURT: No, that's an unwarranted leap.
8 MR. WHITE: Let me go back to the specific issue.
9 THE COURT: The specific issue that Mr. Nelson
10 has raised is EZ-23, and that's the tape regarding the
11 Osman meeting, and any notes Inspector Biegelman has as to
12 his review of that tape contemporaneously with that tape.
13 MR. WHITE: I am distinguishing here though, and
14 I believe the testimony was that he said he transcribed
15 the tapes. He was just specifically asked by Mr. Nelson
16 if he took any notes that indicated his, Inspector
17 Biegelman's state of mind, and the answer was no.
18 THE COURT: I think the answer is more
19 ambiguous. He says they are not sure, and mostly he
20 believes there were transcripts.
21 Let's assume they are something other than
22 transcripts.
23 MR. WHITE: I believe the testimony is that they
24 were not.
25 THE COURT: Let's assume that they are. Because
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1 my interpretation of the testimony is a little different.
2 MR. WHITE: Can I voir dire Inspector Biegelman
3 to clarify?
4 THE COURT: No, no. I want you to address that
5 issue.
6 I don't care any more, we can look at the notes
7 and find out if they are something other than
8 transcripts.
9 MR. WHITE: I think we are addressing an issue
10 that doesn't exist.
11 THE COURT: I want you to tell me why it is not
12 3500 material. I am prepared to hear you on it.
13 MR. WHITE: It turns on the factual issue. It is
14 not a statement of his or an indication of his state of
15 mind. It is merely transcription of tapes.
16 THE COURT: Assume it is not a transcription. If
17 it is just a transcription I will not require you to turn
18 it over. If it is something else, why not tell me that it
19 is not 3500 material.
20 MR. WHITE: I will not waste my time arguing it
21 to you because you will see that it is just
22 transcriptions. I have it here and I will show it to you.
23 THE COURT: I will look at that in camera.
24 MR. WHITE: I didn't mean to be argumentative.
25 THE COURT: That's a solution.
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1 Q When you made the rough transcripts, did you indicate
2 on those transcripts whom you believe the speaker to be?
3 A Yes.
4 Q And did you have the assistance of Mr. Zerring or any
5 other informant to identify who the speakers were when you
6 listened to the preparation and the recordings of the
7 first draft transcripts?
8 A Yes.
9 Q Who would that be?
10 A What I would do to make sure I have the right people
11 identified, we would have the CI involved identify them.
12 And I would bring out other CI's without identifying who
13 the CI on the tape was, and I would have them listen and
14 say who is that person? And I made sure I mentioned it in
15 my affidavit to make sure we were listening to the right
16 person.
17 Q You did that with respect to each and every tape; is
18 that right?
19 A As many as possible to identify, yes.
20 MR. NELSON: Your Honor, as to relate to EZ-25,
21 where the inspector was not sure -- the inspector was not
22 sure if the speaker was Inspector Biegelman, I would ask
23 for the transcript, for this 3500 material to be able to
24 tell who the speaker is. The government supplied various
25 different transcripts, but they did not transcribe all 250
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1 tapes. They transcribed 20 or 30 tapes. These two tapes
2 are not tapes for which transcripts exist as provided by
3 the government.
4 THE COURT: What is it you want?
5 MR. NELSON: The draft transcript of EZ-45.
6 THE COURT: On what basis?
7 MR. NELSON: So we could identify who the speaker
8 was on that particular recording.
9 We don't know and Inspector Biegelman indicated
10 to us while it sounds like Mr. Gordon, he is not sure it
11 was the speaker.
12 MR. TRABULUS: Your Honor, if I may first add
13 another ground, such a record would constitute other
14 evidence that Inspector Biegelman had indeed listened to
15 that tape prior to signing the search warrants affidavit,
16 which would bear upon his state of mind and his
17 reasonableness in relying upon information supposedly
18 given to him by Mr. Maxes with respect to the various
19 categories of people that the speaker there said not to
20 come in, were in fact people who would get in. I feel it
21 is an additional ground for requiring that to be produced.
22 THE COURT: As to EZ-45, Inspector Biegelman, do
23 you know as you sit here now as to whether you heard that
24 tape, or that tape, that particular portion of the same at
25 the time?
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1 THE WITNESS: We are talking about this in front
2 of me?
3 THE COURT: Yes.
4 A Yes, I believe I did. Because I did something as a
5 result of hearing that.
6 THE COURT: Which is what?
7 THE WITNESS: As part of my undercover calls, we
8 had the CI's when they called the company, identify
9 themselves as postal supervisors and law enforcement
10 people to see if they can get in.
11 THE COURT: You have an unequivocal statement
12 that it was listened to. That's sufficient for your
13 purposes.
14 Return to 23. And I think we resolved that.
15 MR. NELSON: The Court is going to review the
16 materials to make a determination.
17 THE COURT: In camera, yes.
18 MR. NELSON: I will continue on.
19 THE COURT: All right.
20 Q With respect to tape EZ-45, that recording was made
21 on February 3rd, 1995; is that correct?
22 A It doesn't say it here, but I will accept that if
23 that's the date.
24 Q You interviewed Mr. Maxes on March 3rd, 1995; is that
25 correct?
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1 A Yes.
2 Q And as you reflected or stated to us earlier, you
3 indeed reviewed the tape EZ-45 and taken action based upon
4 that prior to your interview of Mr. Maxes; is that
5 correct?
6 A Yes.
7 Q And would it be fair to say then, that you were aware
8 when you spoke to Mr. Maxes that he was being untruthful
9 when he stated that the company's policy is to accept
10 people who are in law enforcement as postal officers?
11 A I thought he was being extremely truthful because
12 that corroborated my undercover tape calls. I had heard
13 Gordon say we don't want those people. Yet the undercover
14 test calls show those people were accepted. Then when
15 Mr. Maxes comes to me, he says even though we tell people
16 we only take top managers, we do take people like
17 McDonalds' managers, we take school teachers, law
18 enforcement people and post office people in the book.
19 THE COURT: I have to take a brief adjournment.
20 Do not wander too far. Take ten minutes, but, please no
21 more than that.
22 Thank you.
23
24 (Whereupon, a recess is taken.)
25
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1 THE COURT: Mr. Nelson, proceed.
2 Read back the last question and answer,
3 Mr. Rapaport.
4 (Whereupon, the court reporter reads the
5 requested material.)
6 THE COURT: Mr. Nelson.
7 MR. NELSON: Yes.
8 Q Let me see if I understand you correctly.
9 Between February 3rd and March 3rd, based upon
10 you having reviewed EZ-45, you told your informants who
11 were calling into the company to pose as either postal
12 workers, teachers, or other law enforcement personnel; is
13 that correct?
14 A Or throughout the entire time period of our test
15 calls, yes.
16 Q Let's talk about our period of time, from February to
17 March. That's what I am asking you about.
18 A Whatever that tape was, we would listen to our tape,
19 or tapes like that. And when things were said like that,
20 we would use those positions that they said were not to be
21 in the book for test calls.
22 Q February 3rd, you listened to this tape. You hear
23 during the course of the tape that Bruce Gordon says,
24 don't take teachers, postal workers, law enforcement
25 personnel; is that correct?
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1 A I didn't see where it says teachers in there.
2 Q Law enforcement personnel and postal workers, okay?
3 A Yes.
4 Q Based upon that you made a determination, let's see
5 on what Bruce Gordon is instructing his employees to do,
6 they do not do; is that what you decided to do?
7 A Yes.
8 Q You then had informants place telephone calls into
9 the company posing as postal workers or law enforcement
10 personnel; is that right?
11 A Yes.
12 Q And between the period of time from February 23rd --
13 February 3rd to March 3rd, 1995, how many calls were
14 placed in the company?
15 A We did approximately 85 over the test period. I have
16 to see the logs --
17 Q Do you have a log or any break down which reflects
18 when the calls were made, who they were made by, and the
19 dates of those calls?
20 A I had one, yes.
21 Q Where is it?
22 A It was turned over when I transferred the case.
23 MR. NELSON: I call for the production of that
24 log, and I would ask for fairness it be redacted as to who
25 the informers are making the calls, so it would refresh
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
702
Biegelman-cross/Nelson
1 the recollection of the agent with respect to the specific
2 calls and when they were made.
3 THE COURT: Mr. White.
4 MR. WHITE: I have to have a moment to think
5 about this one, your Honor.
6 I am not sure -- I don't believe I have them with
7 me, in any event. So I don't think we are going to have
8 Inspector Biegelman's recollection refreshed, at least
9 right now.
10 Can we defer to it the end of the day and I can
11 figure out where they are? I am not -- I am sure they are
12 not with me.
13 THE COURT: All right.
14 Q On the log that you prepared, did you indicate on the
15 log what type of employment the informant claimed he or
16 she was engaged in?
17 A No. The log was just telephone calls made and dates
18 made, and who made the phone calls.
19 Q Well, of the 85 telephone calls in total, how many of
20 those calls did you ask the informant to pose as either a
21 postal worker or a law enforcement person?
22 A I am not sure if it was one each or two each.
23 Q One each or two each, and how many people were making
24 the calls?
25 A Two different people.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Biegelman-cross/Nelson
1 Q One of them was Steve West; is that correct?
2 A Yes.
3 Q Who was the other person?
4 MR. WHITE: Objection.
5 THE COURT: Sustained.
6 Q So, there would have been a total of four calls made
7 where the informants posed as either a postal worker or
8 law enforcement person; is that correct?
9 A Possibly. I am giving you the best recollection I
10 have after all those years. But it was in those areas.
11 Q How many of those four or five calls were made during
12 the one month --
13 MR. WHITE: Objection. It is not what he said.
14 THE COURT: How many of those calls?
15 Go ahead.
16 Q However many number of those calls were, how many of
17 those calls were made in the period of time from February
18 to March of 1995?
19 A I think some of those calls were made. Without
20 seeing the logs, I can't tell for sure.
21 MR. NELSON: Your Honor, I would ask to reserve
22 this particular line of questioning.
23 THE COURT: No question about that.
24 MR. NELSON: For Tuesday or whichever date we
25 continue.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Biegelman-cross/Nelson
1 THE COURT: Yes.
2 Q Inspector, you were assigned as the case agent in the
3 investigation of the West companies; is that right?
4 A Subsequent to the first case agent, yes.
5 Q Who was the first case agent on the West case?
6 A Michael O'Connor.
7 Q When were you assigned to the West case originally?
8 MR. WHITE: Objection.
9 THE COURT: Relevance?
10 MR. WHITE: Yes.
11 THE COURT: Mr. Nelson.
12 MR. NELSON: The relevance goes to the
13 recruitment of the particular informers and the manner in
14 which they were recruited. It goes to the totality of the
15 circumstances in which the informers were used. Secondly,
16 the knowledge that Inspector Biegelman had with respect to
17 those particular informants.
18 THE COURT: The objection is sustained.
19 Q During the course of the West investigation, there
20 came a point in time where arrests were made of all the
21 different participants; is that correct?
22 MR. WHITE: Objection.
23 MR. NELSON: Your Honor, I am going towards -- I
24 understand the basis is relevancy. But what I am going
25 towards right now is the January 1993 conversation,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
705
Biegelman-cross/Nelson
1 involving Mr. Osman and Steven West.
2 Q Is there a way you can get to that without asking
3 that as a predicate question?
4 MR. NELSON: I will try to speed it up a little
5 bit.
6 THE COURT: It is --
7 MR. NELSON: It is kind of hard because of the
8 fact the chronology of events overlap. And without
9 affecting the chronology of the people in the West case,
10 the recruitment of Mr. West and the recruitment of
11 Mr. Gross --
12 THE COURT: I thought I was pretty clear that the
13 recruitment of those cooperating witnesses is not a matter
14 that I am concerned with at this point. So, it is not a
15 subject that we need to develop testimony in.
16 Q There comes a period of time, Inspector, where you
17 become assigned to the Who's Who investigation; is that
18 correct?
19 A Yes.
20 Q And that was when?
21 A Late winter, early Spring of 1991.
22 Q Now --
23 MR. WHITE: Objection. I thought you meant this
24 investigation.
25 MR. NELSON: The Who's Who investigation.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
706
Biegelman-cross/Nelson
1 MR. WHITE: There are a lot of Who's Who
2 investigations.
3 MR. NELSON: Who's Who Worldwide. It is getting
4 late.
5 THE COURT: Inspector Biegelman, you want to
6 qualify your testimony on that?
7 THE WITNESS: I started the case in July of 1994,
8 and it was jacketed in August of 1994.
9 Q When you first commenced that investigation, I
10 believe it was your testimony that the basis upon which
11 you first commenced the investigation was an interview you
12 conducted of Mr. Gross; is that correct?
13 A No.
14 Q What was the basis upon which you re-opened the
15 investigation?
16 A If -- I don't know if I re-opened anything.
17 What happened is I was advised by Steven West and
18 his attorney that there had been a decision by Judge
19 Jordan in the civil case of Reed versus Who's Who
20 Worldwide, and that the judge ruled that Who's Who
21 Worldwide had made misrepresentations.
22 Based on that and my previous knowledge from a
23 year or two before of Marty Gross working at Who's Who
24 Worldwide, I consulted with the AUSA I worked with at the
25 time, and we decided to bring in Mr. Gross who previously
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
707
Biegelman-cross/Nelson
1 told us that everything at Who's Who Worldwide is on the
2 up and up, to reinterview him to see if that's the case.
3 That's what started me -- caused me to start the
4 investigation.
5 Q Mr. West pled guilty back in March of 1993 with
6 respect to the West matter; is that right?
7 MR. WHITE: Objection.
8 THE COURT: I will allow it, I will allow it.
9 Mr. Biegelman, you can answer.
10 THE WITNESS: I think it was approximately the
11 time, yes, your Honor.
12 THE COURT: All right.
13 Q Now, prior to his entering his guilty plea, had you
14 as the case agent handling the West investigation met with
15 him for purposes of his working as an informant on behalf
16 of the government against other Who's Who entities besides
17 West?
18 MR. WHITE: Objection.
19 THE COURT: Sustained.
20 Q Am I correct on January 20th, 1993, there is a tape
21 recording made of Mr. Osman?
22 A Yes.
23 Q And the tape recording of Mr. Osman was made as part
24 of an investigation that Mr. West was cooperating in; is
25 that correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
708
Biegelman-cross/Nelson
1 A Yes.
2 Q And I believe you indicated that the case agent
3 handling that investigation was Mr. Leonard; is that
4 correct?
5 A Yes.
6 Q And Mr. West had been an informant for you in the
7 West investigation; is that correct?
8 A No, it is not correct. To be more accurate, an
9 informant with the postal inspection service.
10 Q He came to be signed over as an informant with the
11 postal inspection services sometimes between January 20th,
12 1993, and March 1993 when he entered his guilty plea; is
13 that correct?
14 A Yes.
15 Q Do you remember when he first became an agent on
16 behalf of the postal inspectors?
17 MR. WHITE: Objection.
18 THE COURT: Sustained.
19 Q Did there come a point in time that you introduced
20 Mr. West to Mr. Leonard?
21 MR. WHITE: Objection.
22 THE COURT: Sustained.
23 Q Did Mr. Leonard -- withdrawn.
24 You indicated yesterday during the course of the
25 questioning by Mr. Jenks that you opened up a file jacket
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
709
Biegelman-cross/Nelson
1 concerning the Who's Who Worldwide investigation; is that
2 correct?
3 A Yes.
4 Q And is a file jacket opened with respect to each and
5 every investigation that postal inspectors become engaged
6 in?
7 A No.
8 Q Is there a specific criteria for the opening of a
9 file jacket?
10 A Some cases may not go anywhere. Some cases are just
11 complaints and are not developed into a case. At
12 different stages a case may be jacketed depending on the
13 inspector and his supervisor.
14 Q There came a point in time once you opened the Who's
15 Who Worldwide investigation sometime around July or August
16 of 1994 that you consulted with Inspector Leonard; is that
17 correct?
18 A Yes.
19 Q When you consulted with Inspector Leonard, did you
20 inquire from him the information he had developed as part
21 of his investigation where he used Mr. West?
22 A Yes.
23 Q And was that investigation in a file jacket?
24 A It was not jacketed as a case, no.
25 Q Was there an investigative summary log, such as the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
710
Biegelman-cross/Nelson
1 one you prepared under 3500-19G under that case?
2 MR. WHITE: Objection.
3 A No.
4 THE COURT: Sustained.
5 Q Could you tell us what, if any, documents you
6 acquired from Inspector Leonard which related to Who's Who
7 Worldwide?
8 A The complaint letters he accumulated in that time
9 period.
10 Q Other than that, were there any other documents
11 contained in the information provided to you by Inspector
12 Leonard?
13 A That's what I believe he turned over.
14 Q Did he also provide to you certain tape recordings?
15 A Yes, he did.
16 Q How many tape recordings did he provide you with?
17 A I think it was three or four.
18 Q With respect to those tape recordings, did you have
19 occasion to listen to all those tape recordings?
20 A Yes.
21 Q Were all those tape recordings, recordings from the
22 Garden City Hotel where these job interviews were
23 conducted?
24 A I believe so.
25 Q And in order to conduct those job interviews --
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
711
Biegelman-cross/Nelson
1 withdrawn.
2 When you commenced your investigation, and I
3 believe that the very first entry in your investigative
4 summary log is that you received electronic surveillance
5 authorization; is that correct?
6 A Yes.
7 Q In order for Inspector Leonard to have conducted the
8 recordings at the Garden City Hotel in January of 1993,
9 did he have to acquire electronic surveillance
10 authorization?
11 MR. WHITE: Objection.
12 THE COURT: Sustained.
13 Q Are you aware whether or not he acquired electronic
14 surveillance authorization prior to --
15 MR. WHITE: Objection.
16 THE COURT: Sustained.
17 Q Could you advise us what the criterion -- withdrawn.
18 Can you advise us whether electronic surveillance
19 authorization would have been required for purposes of
20 making the recordings at the Garden City Hotel?
21 MR. WHITE: Objection.
22 THE COURT: Sustained.
23 Q Did you participate in any manner with Inspector
24 Leonard in conducting the interviews that took place at
25 the Garden City Hotel?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
712
Biegelman-cross/Nelson
1 A No, I did not.
2 Q Did you discuss with Inspector Leonard at any time
3 the conducting of those interviews?
4 A Are you saying was I aware he was doing it at some
5 point?
6 Q Yes.
7 A I think I was aware he was doing something. I am not
8 sure exactly to what degree though, he was running this
9 with Mr. West.
10 Q Those interviews took place in January of 1993, and
11 you commenced your investigation in July; is that right?
12 A Yes.
13 Q Of 1994?
14 A Yes.
15 Q And during that period of time, which is some 17
16 months, did you continue to maintain contact with Steve
17 West?
18 MR. WHITE: Objection.
19 THE COURT: Sustained.
20 Q Did you have discussions with Mr. West during that
21 17-month period of time about Who's Who Worldwide?
22 MR. WHITE: Objection.
23 THE COURT: Sustained.
24 Q When you obtained the file or the documents from
25 Inspector Leonard, did you review with him what, if any,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
713
Biegelman-cross/Nelson
1 activity he had done concerning his investigation into
2 Who's Who Worldwide during that 17-month period of time?
3 A Yes.
4 Q And did you write any notes down of what he advised
5 you he had done during that period of time?
6 A No, I did not.
7 Q Could you tell us what, if anything, Inspector
8 Leonard told you he did to facilitate his investigation of
9 Who's Who Worldwide between January 20th, 1993, when he
10 acquired the tape recording from Mr. Osman, and the date
11 you took over the investigation?
12 MR. WHITE: Objection.
13 THE COURT: Sustained.
14 MR. WHITE: Your Honor, instead of dealing with
15 this on a question by question basis --
16 THE COURT: I will deal with it, Mr. White. I
17 will let Mr. Nelson ask a few more questions.
18 Q I would like you to look at 3500-19G, and I would
19 like you to specifically address your attention to the
20 fourth page of the log, the entry for February 19th,
21 1995.
22 Would I be correct in stating that that entry
23 concerns your preparation -- the preparation of an arrest
24 warrant and search warrant relative to Who's Who
25 Worldwide?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
714
Biegelman-cross/Nelson
1 A Yes, with an Assistant U.S. Attorney.
2 Q And the next -- is the next entry after that on March
3 17th, 1995?
4 A Yes.
5 Q So, you made no entries of your activities between
6 the period of time from February 19th, 1995, to March
7 17th, 1995; is that right?
8 A That's right.
9 Q And during that one-month period of time that there
10 are no entries, how many different confidential informants
11 did you have working inside of Who's Who Worldwide both in
12 Manhattan and in Lake Success?
13 MR. WHITE: Objection.
14 THE COURT: Sustained.
15 Q Did you have people who were working inside of Who's
16 Who Worldwide during that one-month period of time? This
17 is from February to March of 1995?
18 THE COURT: More specifically, between the dates
19 of those two entries, February 19th, and March 17th.
20 MR. NELSON: That's correct.
21 A I believe for the most part there was no one in
22 there. I think around the 17th, give or take, there might
23 have been someone in there. But for the most part I
24 believe there was no one working there at that point.
25 Q Did you have informants making telephone calls into
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
715
Biegelman-cross/Nelson
1 Who's Who Worldwide during that period of time?
2 A Yes, I believe so.
3 Q Okay.
4 Do you recall how many such recordings were made
5 during that one-month period of time?
6 A There would be some. I couldn't tell you how many
7 without looking at the log sheets.
8 Q Now, you indicate that you didn't have any
9 informants, or at least to the best of your recollection
10 you didn't have any informants working inside of Who's Who
11 during and in-between the period of time from February
12 19th, 1995, to March 17th, 1995; is that correct?
13 A For the most part, I believe so.
14 MR. NELSON: If I could have just one moment,
15 your Honor?
16 THE COURT: Yes.
17 (Whereupon, at this time there was a pause in the
18 proceedings.)
19 MR. NELSON: With the Court's permission I would
20 like to have marked for identification as
21 Defendant's Exhibit R, a 12-page document.
22 MR. WHITE: Can I take a look at that?
23 MR. NELSON: Yes.
24 For the record, just for identification, your
25 Honor. This is a list of the tape recordings which was
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
716
Biegelman-cross/Nelson
1 provided by the government to defense counsel, which
2 includes the tape number, date, and the identified
3 participants.
4 THE COURT: Okay.
5 You are going to use this probably to refresh his
6 recollection?
7 MR. NELSON: Correct, sir.
8 THE COURT: All right.
9 It is something you prepared, Mr. White, I take
10 it?
11 MR. WHITE: I did. But I didn't know he was
12 going to use a copy of it.
13 THE COURT: It is only going to be used to
14 refresh his recollection at this point.
15 MR. NELSON: Your Honor, given the hour, this
16 might be an appropriate time to --
17 THE COURT: It might be, but let's finish up with
18 this. You can hand it to Inspector Biegelman. And see
19 where you go with this.
20 MR. NELSON: I will have it deemed marked.
21 THE COURT: Defendant's Exhibit R, you will take
22 care of putting a tag on it?
23 MR. NELSON: Yes, Judge.
24 THE COURT: For identification.
25 (Defendant's Exhibit R marked for ID.)
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
717
Biegelman-cross/Nelson
1 THE COURT: You want to direct his attention to
2 this? It is not something the witness prepared.
3 Q I would like to first direct your attention to the
4 third page. Am I correct on the third page there is an
5 indication of how many recordings were made in-between the
6 period of time of February 19th to March 17th, 1995?
7 A One, two, three. And those were all telephone calls.
8 Q And these were telephone calls made by someone
9 bearing the initials SW; is that correct?
10 A Yes.
11 Q I would like to direct your attention to page 6.
12 Again, I would ask you, does this refresh your
13 recollection now that a certain number of telephone calls
14 were made in-between the period of time from February
15 19th, 1995 to March 17th, 1995?
16 A Yes, there is one, two, three, four, five telephone
17 calls.
18 THE COURT: Is that consistent with your own
19 recollection as to how much activity was going on?
20 THE WITNESS: Yes, five telephone calls, yes,
21 your Honor.
22 Q This is someone bearing the initials of E I you said?
23 A Yes.
24 Q And these are also calls made into the company?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
718
Biegelman-cross/Nelson
1 Q And I direct your attention now to page 10, and I
2 would ask you the same question, between the dates of
3 February 17th, 1995, and March 19th, 1995, how many
4 recordings are there -- February 19th, and March 17th,
5 excuse me.
6 A None.
7 Q Thank you.
8 Inspector, having had the opportunity to review
9 Defendant's Exhibit R, does it refresh your recollection
10 that in fact there were a fair number of calls that were
11 made into Who's Who Worldwide in that period of time.
12 THE COURT: During what period of time?
13 MR. NELSON: February 19th, to March 17th, 1995.
14 A I think there was like five to seven phone calls,
15 something like that, yes.
16 Q Did you document that in any manner in your
17 investigative summary log?
18 A Not in my summary log, no.
19 MR. NELSON: Your Honor, I think this might be a
20 good point to break for the day. I have another area I
21 would like to explore, but it might take some time.
22 THE COURT: All right.
23 Inspector Biegelman, you may step down. We have
24 to discuss the open matters a little bit.
25 THE WITNESS: Thank you, your Honor.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
719
Biegelman-cross/Nelson
1 THE COURT: Thank you.
2 (Whereupon, at this time the witness left the
3 witness stand.)
4 THE COURT: Pardon me for a moment. I will
5 gather some material from my chambers, and we can talk
6 about these matters.
7 (Whereupon, at this time there was a pause in the
8 proceedings.)
9 THE COURT: Mail covers we have already dealt
10 with today. And I told Mr. White, make your review of
11 those. But be prepared to turn it over Tuesday morning
12 after an argument, if you have any arguments to make.
13 MR. WHITE: Okay.
14 THE COURT: You will also review the West
15 affidavits and just turn it over, I guess, the ones you
16 had been able to recover. Unless you find something --
17 which I am frankly not sure -- all right.
18 We dealt with the Maxes notes. I am not changing
19 anything there.
20 Gross and Maxes as witnesses, and the disclosure
21 of witnesses are two open items, along with Inspector
22 Biegelman's log of tapes. And you will show me the
23 transcripts in camera.
24 MR. WHITE: EZ-23.
25 THE COURT: The handwritten things that Inspector
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
720
1 Biegelman prepared?
2 MR. WHITE: Yes.
3 THE COURT: Can someone look for them now?
4 MR. WHITE: EZ-23?
5 THE COURT: Yes.
6 MR. WHITE: I have them right here.
7 THE COURT: Can you pull it out?
8 MR. WHITE: Yes.
9 (Handed to the witness.)
10 (Handed to the Court.)
11 THE COURT: It is not exactly in camera,
12 however.
13 Mr. White, you are representing this is all you
14 have in your possession that Inspector Biegelman wrote
15 with respect to EZ-23?
16 MR. WHITE: Yes.
17 THE COURT: I am given a two-page document. And
18 I will not order its production.
19 MR. WHITE: Except if there is a chart or log
20 that references 23 and the date.
21 THE COURT: I understand.
22 The significance of the log book of tapes. I am
23 not sure of the significance. Someone asked for the log
24 that Inspector Biegelman made of tapes. But in light of
25 what the government provided of the tapes that were turned
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
721
1 over, is there some separate reason that you needed
2 Inspector Biegelman's log?
3 MR. NELSON: I made that application. The
4 request of the log was for the purposes of identifying the
5 number of individuals between February 3rd and March 3rd,
6 who had made telephone calls, wherein they indicated they
7 were either postal employees or law enforcement
8 personnel. That's the limited and specific request.
9 THE COURT: It was to determine the number of
10 tapes where such conversations may have occurred?
11 MR. NELSON: That's correct, your Honor.
12 THE COURT: The log the government provided, did
13 the government provide that log to everybody?
14 MR. WHITE: You mean to all defense counsel?
15 THE COURT: That's what I mean, yes.
16 MR. WHITE: To all defense counsel, yes.
17 THE COURT: Maybe I am misunderstanding.
18 MR. WHITE: I believe what the judge is referring
19 to is the typed summary that I gave each of you
20 summarizing --
21 THE COURT: What I meant was, you presented -- I
22 didn't see it, but Defendant's Exhibit R, and --
23 MR. NELSON: The log reflects the date of the
24 call, and the initials of the informant making the call,
25 it does not reflect what job that person was posing in.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
722
1 And that's what I was requesting.
2 THE COURT: I see.
3 MR. WHITE: They have the underlying tape. They
4 would like this because it would shorten their work.
5 THE COURT: That's not a bad reason, is it?
6 Wouldn't we all like that?
7 MR. WHITE: I am informed by Inspector Biegelman
8 anyway that his logs do not reflect the purported
9 occupation of the caller, in any event.
10 THE COURT: Is that correct, Inspector
11 Biegelman?
12 INSPECTOR BIEGELMAN: Yes, it lists the date,
13 where it went to, the details of the call, but not the
14 content of the call.
15 MR. WHITE: I will review it again to see if it
16 is correct.
17 THE COURT: If it was for that purpose, that
18 purpose was served?
19 MR. NELSON: It seems that way, yes.
20 THE COURT: All right.
21 Go now to the principal thing, and that's the
22 testimony of Gross and Maxes.
23 .
24 Bow seems to lend not -- well, I have not studied
25 it. I did skim it, however -- hold on for one second.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
723
1 (Whereupon, at this time there was a pause in the
2 proceedings.)
3 THE COURT: Did you have a chance to review the
4 Bow Case?
5 MR. WHITE: Yes, would you like me to respond?
6 THE COURT: One second.
7 Yes, Mr. White.
8 MR. WHITE: That case I would say is
9 distinguishable from the situation here.
10 The issue in this case, as I understand from all
11 the cross-examination, is not whether Inspector Biegelman
12 accurately -- let me rephrase it.
13 The defendants' attack so far in this hearing is
14 not that Inspector Biegelman did not accurately recount
15 what Gross and Maxes told him.
16 The notes of each interview made
17 contemporaneously are in evidence.
18 There is not an allegation that Mr. Maxes told
19 you X and you put Y in your notes, or Mr. Gross told you
20 something and you put something else down.
21 They attacked on other ground, for example, he
22 should have not relied on them, he should have known that
23 their reliability was questionable. Or their other attack
24 is that other evidence should have told you that you
25 should not have accepted Gross' and Maxes' information.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
724
1 There is not a single allegation that he did not
2 accurately recount in the affidavit what they told him,
3 and that his notes are different in any way from what
4 Gross and Maxes told him.
5 This is the paradigm of the Franks situation,
6 where the question is the credibility of the agents.
7 The difference in Bowe, and this is the first
8 time I read it when Mr. Trabulus gave it to me before the
9 hearing, but if you look at page 3 of the case --
10 THE COURT: Which case?
11 MR. WHITE: The Bowe case.
12 THE COURT: All right, page 3. I am looking at
13 another copy of it. Tell me what section it is.
14 MR. WHITE: Footnote two.
15 THE COURT: Okay.
16 MR. WHITE: It seems to indicate that in that
17 case, in the suppression hearing up to that point there
18 had been developed inconsistencies about what had actually
19 transpired in that case and that is not this case.
20 It would be different if they were saying that
21 Mr. Gross didn't really tell you it was only one percent
22 nominations, he told you it was 50 percent. That's not
23 what their allegation is.
24 If they get Mr. Maxes and Mr. Gross in here what
25 are they going to ask him? Are they going to say, you
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
725
1 didn't tell Inspector Biegelman this? They never argued
2 that up to now. The only thing they can possibly do is
3 attack their credibility.
4 If all they want to do is to get them in here to
5 challenge them, that's exactly a fishing expedition.
6 Exactly what Franks says you are not supposed to do.
7 If you get to bring in informants in this case,
8 then you get to bring them in in every case.
9 We heard all sorts of cross-examination, but they
10 have not once suggested what Biegelman told by Maxes and
11 Gross was wrong. It is as simple as that.
12 What does it mean when Franks says that the
13 impeachment permitted is only of the affiant and not the
14 informant. That's exactly what they want to do, impeach
15 the informant.
16 THE COURT: I have that argument. Anything
17 else?
18 MR. WHITE: No.
19 THE COURT: Mr. Trabulus.
20 MR. TRABULUS: Yes. I want to call both Maxes
21 and Gross to question them what they told Inspector
22 Biegelman. I am not prepared at face value to accept
23 Inspector Biegelman's testimony as to what he was told,
24 either as to the accurateness and completeness of it. The
25 only way to challenge that is by bringing these people
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
726
1 in.
2 I think basically, as that is precisely this
3 case. In the Bow case they wanted to bring in this woman
4 Jones, who had said something to the person who signed the
5 search warrant affidavit, and they wanted to question her
6 as to what was said by the affiant, that she had said, was
7 in fact what she had told the affiant. That's exactly
8 what I am going to do. That's exactly what this case says
9 I am entitled to do under the Sixth Amendment.
10 It is not a question of impeaching the
11 credibility of the informant. It is a question of
12 determining what the affiant was told, and bearing on
13 whether the affiant correctly suggested in the search
14 warrant affidavit what he was told or not told.
15 THE COURT: Hadn't Jones in the Bowe case
16 indicated things contrary to what the affiant -- that they
17 had information that Jones would be saying something
18 different than what the affiant said Jones was going to
19 say? Didn't they have that information? That seems to be
20 the critical distinction.
21 MR. TRABULUS: I don't think it is the critical
22 distinction.
23 In the Jones case --
24 THE COURT: It is the Bowe case having to do with
25 Ms. Jones.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 MR. TRABULUS: I don't think it is a distinction
2 because there is something comparable here.
3 THE COURT: What is comparable here.
4 MR. TRABULUS: There is something comparable, and
5 something which is analogous.
6 I think there were inconsistencies and Inspector
7 Biegelman's own testimony compared to what he had said,
8 and I can enumerate some of them.
9 The man testified that the solicitation letters
10 said that, specifically told members they had nominated
11 other members, and he wasn't able to point to anything.
12 It is not different from the affiant --
13 THE COURT: That's a critical point.
14 MR. TRABULUS: Your Honor, we have one informant
15 who by his nature we know is a perjurer.
16 THE COURT: I am listening.
17 MR. TRABULUS: And let's just look at what
18 apparently happened here, because it is something that
19 your Honor should bear in mind.
20 We have both Mr. Gross and Mr. Maxes, who both
21 worked at the West place originally and probably both knew
22 each other there. And then they worked at the Who's Who
23 Worldwide and know each other there.
24 Both of them get fired. Gross gets fired first.
25 Gross, is aware of what is going on, that there is an
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
728
1 investigation, and is fired at the time that the search
2 warrant is already begun being drafted, and is aware there
3 is an arrest coming down the road.
4 Now, after Maxes was fired, Maxes suddenly shows
5 up according to Inspector Biegelman, at Inspector
6 Biegelman's office, and it seems to me he is saying: Here
7 I am, I helped you on the West case. I am here to help
8 you again, a public spirited perjurer. I am coming in
9 admitting to a couple of federal offenses. Not only do I
10 admit to the federal offenses and I perjured myself about
11 them.
12 The reason being -- the inference is that he was
13 tipped off by Gross that this is what he better be saying,
14 and you better get in here because we were both screwed --
15 excuse the language -- by Mr. Gordon's company, we were
16 both fired. Now you are going to get hit again. You are
17 going to get arrested why don't you come in and join up,
18 this is what you better say, maybe not, but this is what
19 you better say, so it can be figured out.
20 I think, your Honor, there is a real relationship
21 between these informants who are now just witnesses
22 because they have been disclosed.
23 That's a little different from what we had in the
24 Bowe case, but it is warranted if there is any kind of
25 threshold required.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
729
1 If you look at the Bowe case, I don't think the
2 Bowe case says you need to make a threshold showing before
3 you exercise your Sixth Amendment right to subpoena
4 witnesses. In fact, it says something very different.
5 There is no doubt that appellant had the right under the
6 Sixth Amendment to subpoena Gloria Jones to testify in his
7 behalf at the suppression hearing.
8 We are not talking here about the witness who had
9 second or third-hand information. The critical hearing at
10 the Franks hearing here is what Inspector Biegelman was
11 told, and whether or not Inspector Biegelman accurately
12 put that into his affidavit. And there are only two
13 people with regard to each informant who know that. One
14 is Inspector Biegelman, and the other is the informant
15 himself.
16 We heard half a story as to each one. We as the
17 defense are entitled to present the rest of the story.
18 And there is no requirement that we make some kind of
19 threshold showing before we do so. That's what due
20 process requires, in addition to the right we have to
21 compel witnesses under the Sixth Amendment.
22 MR. LEE: Judge, I don't know if I can add to
23 Mr. Trabulus' very well put argument. But I will try
24 because I am interested in this also.
25 Are not the two elements of a known motive to
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
730
1 lie, and the known background, or history of lying, do not
2 those two elements distinguish this case enough? Those
3 are two elements that are significant, and they are here
4 and known by the inspector at the time. And I think those
5 are very important elements that are different and
6 distinguished.
7 THE COURT: Almost every informant is someone who
8 is tainted. Certainly the cases I read where this issue
9 is developed, almost always involve informants with
10 extremely checkered pasts, who have had plenty of reasons
11 to be suspect as to their credibility, and any affiant
12 would have reason to suspect their credibility as well as
13 anyone else. I am not sure that that distinguishes this
14 case. I am not convinced of that.
15 I agree that the Bowe case is quite compelling.
16 However, I found later cases and one of them in particular
17 was United States v. Barone, a 1986 case, 787 F.2d 811.
18 And this opinion, although it turns on yet another issue,
19 which Mr. Trabulus anticipated a little bit earlier --
20 MR. TRABULUS: I read the Barone case.
21 THE COURT: Which is the informant's privilege,
22 the confidentiality of the informant's identity. But it
23 nevertheless does stand in general for the proposition
24 that witnesses need not be permitted to testify, and the
25 Court doesn't have to compel testimony from witnesses and
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
731
1 informant witnesses in all circumstances.
2 MR. TRABULUS: Your Honor, Barone turns entirely
3 on the informer's privilege. There was an issue, and they
4 acknowledge these informers have to be disclosed at
5 trial. But the issue there is whether pretrial there
6 needs to be disclosure. Roviaro case also -- well, that
7 case also turned about the fact that it was a balancing in
8 terms of one of -- of the facts of that case as to whether
9 or not the informer's privilege should be overcome by the
10 need for it. It is out of this picture.
11 THE COURT: I understand it is a distinguishing
12 feature.
13 MR. TRABULUS: I don't recall if there was an in
14 camera hearing in that case.
15 THE COURT: There actually was. The Circuit
16 Court endorsed, but made a strong point of saying -- they
17 are not saying it is necessary, but they endorsed the
18 concept of having an in camera hearing -- I should not say
19 endorsed. But they said it was okay for the District
20 Court to have held an in camera hearing, but also took
21 pains to say that it was not binding as compelled.
22 MR. TRABULUS: It was in the context of the
23 informer's privilege.
24 THE COURT: Yes. And I don't disagree with that
25 distinction.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
732
1 MR. TRABULUS: The point here is the whole issue
2 of what Inspector Biegelman was told, and as to whether he
3 accurately reported it, or whether he falsely reported
4 things or made material omissions or half truths, if
5 that's the issue, there is nothing, I don't think in any
6 case law, which says that we are limited, the inquiry is
7 limited to what Inspector Biegelman says. We should be
8 allowed to call the other people who have first-hand
9 knowledge on that very issue. And those are Maxes and
10 Gross.
11 We can argue for calling West and the other
12 confidential informants, but in the case of West we know
13 his name. Everything there seems to be on tape, and the
14 others we would not meet the showing on Barone, we could
15 be asking you to conduct an in camera hearing. We have
16 not done that. The other reason is that those other
17 confidential informants were recording stuff, in the case
18 of Maxes and Gross, there was no recordings, so we were
19 reasonable in what we requested here. I don't believe
20 there is any more to be said about it.
21 THE COURT: I don't believe so. I think we hit
22 on the precise issue.
23 Mr. White is rising again. I didn't give him a
24 chance to talk about Barone. You have not even seen
25 Barone.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
733
1 MR. WHITE: I read it previously. I couldn't
2 find my copy of it. But if I could just respond, a brief
3 rebuttal to a couple of points they made?
4 THE COURT: All right.
5 MR. WHITE: This is not about their Sixth
6 Amendment right to subpoena witnesses. It is about the
7 scope of the hearing. But they don't have anything other
8 than their speculation that Gross or Maxes would say
9 anything differently. Just a suggestion that if we want
10 to ask them, is not enough. If that was all it would
11 take, than that statement in Franks would be a complete
12 nullity.
13 THE COURT: That's what you said earlier.
14 There is nothing in addition? You said a couple
15 of points, and that one has been addressed.
16 MR. WHITE: The other point, if you look at
17 Tribunella, your Honor, there they actually have an
18 affidavit from other people that the informant had
19 misrepresented his criminal history to the affiant. There
20 were affidavits from other people that that was the case.
21 And that's just like here, the person was unreliable.
22 The answer is that it is not good enough. You
23 have not shown anything that the affiant knew that.
24 THE COURT: And that goes to the issue that it is
25 the affiant's credibility we are examining here, and not
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
734
1 the informant's credibility.
2 The fact that the informant lied or may have lied
3 was held irrelevant in the Tribunella case.
4 MR. WHITE: Yes.
5 Is your Honor saying to distinguish it from
6 this? I think it makes it identical.
7 THE COURT: I am not sure it bears directly on
8 the point here.
9 MR. WHITE: If you are going to rule for the
10 government, I will sit down.
11 THE COURT: You are going to sit down anyway.
12 I want to back up a little bit to explain my
13 reasoning on this, because I have given a fair amount of
14 attention and thought to this. And I want to make sure
15 that the record is clear so when and if this is ever
16 appealed, at least the reviewing court will have an
17 opportunity to -- will know what I was thinking, and
18 however right or wrong I am, they will at least know how
19 or what I was thinking.
20 This case came to me in a confused procedural
21 posture because of the way the proceedings developed.
22 When it first came before me, it was in the
23 posture of a hearing on the claim of outrageous government
24 conduct. An attempt to set the scope of the hearing was
25 made at that time and I asked for counsel to submit issues
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
735
1 or areas that they wanted to delve into, to provide a
2 scope. That was done by way of the letters submitted by
3 Mr. Lee and Mr. Trabulus.
4 After that initial conference and attempt to set
5 the scope of the hearing, because of an intervening
6 motion, Judge Spatt referred to me an additional matter,
7 that is -- it was a partial re-opening of the original
8 suppression motion that accompanied the outrageous
9 government conduct motion. The partial re-opening was as
10 to the Sterling Who's Who records, and the other non-Who's
11 Who Worldwide records.
12 Because the defendants had raised some argument
13 as to the viability of the basis on which Judge Spatt had
14 ruled, specifically, the inevitable discovery, and the
15 independent sourse theories on which the motion to
16 suppress was initially denied, the Court returned it to me
17 for a finding for -- because of the factual issues on
18 those particular records.
19 The government then urged, and I think properly
20 so, that the inquiry for me was not limited to the
21 independent source and inevitable discovery source
22 theories, but also to the original and primary defense to
23 the suppression motion, and that is that there was
24 probable cause, and there was nothing improper about the
25 affidavit at all.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
736
1 So, the scope of the hearing then took on a
2 different character because of the analysis that the
3 Court, that I adopted, in terms of setting parameters on
4 that inquiry.
5 Initially I drew on the Franks versus Delaware
6 line of cases, and the articulation in those cases that
7 some preliminary showing of falsity or intentional falsity
8 or intentional misleading of the Court in obtaining the
9 search warrant had to be shown, that there had to be some
10 substantial showing.
11 I used that phrase, and asked the defendants to
12 identify in their papers where they had made such a
13 showing. And they pointed to various places in the
14 papers. The government in essence conceded that the scope
15 of the hearing should be encompass a number of the areas
16 identified by the defendants. And the defendants
17 convinced me to even expand it beyond what the government
18 had conceded.
19 My determination to permit that area of inquiry,
20 however was not a determination that a substantial
21 preliminary showing had in fact been made of falseness as
22 to any of those matters. It was more a determination that
23 these were the parameters within which we would conduct
24 the hearing, that this would be the scope of the hearing,
25 and we would not permit it go beyond that and become a
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
737
1 broad ranging attack on the entire affidavit.
2 Therefore, I come now to the ruling I am called
3 on to make with respect to these informant witnesses. And
4 I am now going to apply a true substantial preliminary
5 showing analysis as I have gleaned them from the cases.
6 Now, that showing requires the defendants to proffer
7 something that directly calls into question what Inspector
8 Biegelman said in his affidavit.
9 As to those portions of the affidavit that
10 Inspector Biegelman relied in part on Messrs. Gross and
11 Maxes, for information I find that there has not yet been
12 such a preliminary showing of falseness, or that Inspector
13 Biegelman intentionally misled the Court. And, therefore,
14 I will not require at this point in the proceedings that
15 the government produce those witnesses.
16 That is not to say that as evidence is
17 introduced, or as the evidence develops here after, that I
18 might not change my mind on that. But as of this point,
19 the substantial preliminary showing that would be required
20 to open up inquiry into those areas has not been made.
21 I am relying on the Franks line of cases that had
22 been cited by the parties, and that were cited here today
23 earlier, all of which are really uniform on the issue of
24 this substantial preliminary showing that has to be made.
25 That's the ruling of the Court on that issue.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
738
1 MR. TRABULUS: Your Honor, may I state two
2 things?
3 One, the application was not merely for the
4 government to produce them, but for your Honor to issue
5 subpoenas, under CJA, your Honor, so we could get these
6 people.
7 THE COURT: I understand --
8 MR. TRABULUS: I wanted to get that clear.
9 Can we have the Maxes deposition produced to us
10 now so we can review it over the weekend to see whether or
11 not we can make a showing as to Mr. Maxes and possibly
12 Mr. Gross?
13 THE COURT: Mr. White.
14 MR. WHITE: I have it here. I will give it to
15 them.
16 THE COURT: That's taken care of.
17 Any other open issue?
18 THE COURT: I will see you again Tuesday at --
19 MR. WHITE: Your Honor, is it possible to start a
20 little later than 9:30?
21 MR. TRABULUS: Several of us have scheduling
22 problems.
23 THE COURT: Mr. Schoer, yours is resolved from
24 what Judge Trager's chambers told my secretary.
25 MR. SCHOER: Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
739
1 THE COURT: Who else has a conflict?
2 MR. NELSON: I resolved mine.
3 MR. GEDULDIG: I had one, I believe it is
4 resolved.
5 MR. TRABULUS: I believe I will be able to
6 resolve mine. I thought a bunch of people had them.
7 THE COURT: Let me check my schedule. How much
8 of a delay are you speaking and for what purpose?
9 MR. WHITE: Your Honor, Ms. Scott has an
10 appearance in Brooklyn at 9:30. We were hoping for 11:00
11 o'clock.
12 THE COURT: While I know that Ms. White --
13 MR. WHITE: Ms. Scott.
14 THE COURT: I am sorry, Ms. Scott.
15 That Ms. Scott's assistance is valuable, I am
16 loathed to lose that hour, and you have other people to
17 assist you, Mr. White.
18 I will start at 10:00 o'clock and not 9:30. So
19 we will do that, and start at 10:00 o'clock.
20 MR. WHITE: Can we get an idea if we go beyond
21 Tuesday, what other day next week we will be meeting?
22 MR. WALLENSTEIN: It is really an if?
23 THE COURT: That's up to you guys.
24 (Whereupon, at this time there was a pause in the
25 proceedings.)
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
740
1 THE COURT: We will have Wednesday afternoon and
2 Thursday afternoon, and Friday afternoon. Those are the
3 afternoons. The mornings are not viable for me.
4 MR. LEE: Should we bring up the schedule
5 conferences? Should each defense counsel tell you
6 scheduling conferences for each of those slots of time you
7 have enumerated?
8 THE COURT: No. Why don't you see how you can
9 resolve them.
10 MR. LEE: I just should say absolutely on Friday
11 I will be out of state.
12 MR. WHITE: I don't think we decided the
13 government's application to know the identity of the
14 defense witnesses.
15 THE COURT: We didn't. You are quite right.
16 MR. TRABULUS: I don't know, your Honor, if there
17 is any authority requiring that to be done.
18 THE COURT: I don't think there is authority for
19 it to be done. On the other hand, I don't think there is
20 authority against it being done. I understand your
21 concern.
22 Mr. White, are you prepared to stipulate that no
23 one from your team will make efforts to contact people?
24 MR. WHITE: No.
25 THE COURT: You are not prepared to do that?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
741
1 MR. WHITE: I am not prepared to do that.
2 THE COURT: I will not require it then.
3 MR. WHITE: Can I make notice the day before at
4 least? Because if I have prior statements of the witness
5 I know to bring them.
6 THE COURT: That's the basis on which I was going
7 to require them to tell you, so you can accumulate those
8 materials. On the evening before perhaps I will do that.
9 But I have to be assured that you are not going to go out
10 and try to -- it is not a question of intentionally
11 intimidating them, but there is no question as everyone
12 recognizes, if the government calls, there are some people
13 who might decide not to show up.
14 MR. WHITE: There is an obligation, your Honor,
15 on all the lawyers on either side to interview the
16 witnesses.
17 THE COURT: They are precluded from interviewing
18 some of your witnesses, Mr. Gross and Mr. Maxes.
19 MR. WHITE: That's for other reasons. They know
20 their identities.
21 MR. WALLENSTEIN: Do the words quid pro quo mean
22 anything?
23 THE COURT: Sauce for the goose is sauce for the
24 gander.
25 MR. WHITE: Have a good night.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
742
1 THE COURT: Same to all of you.
2 Tuesday at 10:00 o'clock.
3 (Hearing adjourned until 10:00 o'clock, Tuesday,
4 December 9, 1997.)
5
6 INDEX
7
8
9 M A R T I N B I E G E L M A N................... 626
10 CROSS-EXAMINATION (cont'd)............................ 627
11 CROSS-EXAMINATION..................................... 662
12
13
14 EXHIBITS
15
16
17 Government's Exhibits 3500-19-I through O received
18 in evidence........................................... 641
19
20 Defendant's Exhibit EZ-23 received in evidence........ 668
21 Defendant's Exhibit EZ-45 received in evidence........ 688
22 Defendant's Exhibit R marked for ID................... 716
23
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
