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4828

1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
2 - - - - - - - - - - - - - - X
3 UNITED STATES OF AMERICA, : CR 96 1016(S-1)
4 v. : U.S. Courthouse
5 Uniondale, New York BRUCE W. GORDON, WHO'S WHO
6 WORLD WIDE REGISTRY, INC., : STERLING WHO'S WHO, INC.,
7 TARA GARBOSKI, ORAL FRANK : OSMAN, LAURA WEITZ, ANNETTE
8 HALEY, SCOTT MICHAELSON, : STEVE RUBIN, and MARTIN
9 REFFSIN, :    TRANSCRIPT OF TRIAL
10 Defendants. :February 19, 1998
11 - - - - - - - - - - - - - - X 9:35 o'clock a.m.

12 BEFORE:

13 HONORABLE ARTHUR D. SPATT, U.S.D.J. and a jury
14 APPEARANCES:
15 For the Government: ZACHARY W. CARTER
16 United States Attorney One Pierrepont Plaza
17 Brooklyn, New York 11201
By: RONALD G. WHITE, ESQ.
18 CECIL SCOTT, ESQ. Assistant U.S. Attorneys
19 For the Defendants: NORM AN TRABULUS, ESQ.
20 For Bruce W. Gordon
170 Old Country Road, Suite 600
21 Mineola, New York 11501

22 EDWARD P. JENKS, ESQ.
For Who's Who Worldwide
23 Registry, Inc. and
Sterling Who's, Who, Inc.
24 332 Willis Avenue
Mineola, New York 11501
25
(cont'd)


HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4829

1 APPEARANCES (cont'd):

2 GARY SCHOER, ESQ. For Tara Garboski
3 6800 Jericho Turnpike
Syosset, New York 11791
4
ALAN M. NELSON, ESQ.
5 For Oral Frank Osman
3000 Marcus Avenue
6 Lake Success, New York 11042

7 WINSTON LEE, ESQ.
For Laura Weitz
8 319 Broadway
New York, New York 10007
9
MARTIN GEDULDIG, ESQ.
10 For Annette Haley
400 South Oyster Bay Road
11 Hicksville, New York 11801

12 JAMES C. NEVILLE, ESQ.
For Scott Michaelson
13 225 Broadway
New York, New York 10007
14
THOMAS F.X. DUNN, ESQ.
15 For Steve Rubin
150 Nassau Street
16 New York, New York 10038

17 JOHN S. WALLENSTEIN, ESQ.
For Martin Reffsin 18 215 Hilton Avenue
Hempstead, New York 11551
19

20 Court Reporter: HARRY RAPAPORT, CSR
United States District Court
21 Two Uniondale Avenue
Uniondale, New York 11553
22 (516) 485-6558

23
Proceedings recorded by mechanical stenography, transcript
24 produced by Computer-Assisted Transcription
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4830

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

2

3 (Whereupon, the following takes place in the

4 absence of the jury.)

5 THE COURT: Apropos, I was requested late

6 yesterday about Friday. I will endeavor not to hold court

7 on Friday after tomorrow. I have already told the jury

8 about tomorrow. I will try to avoid Fridays in the

9 future.

10 MR. LEE: Thank you.

11 MR. SCHOER: Thank you very much.

12 MR. TRABULUS: Thank you, your Honor.

13 THE COURT: Bring in the jury, please.

14 (Whereupon, the jury at this time entered the

15 courtroom.)

16 THE COURT: Good morning, members of the jury.

17 Please be seated. I want to compliment you

18 again, I know you were here at 20 after 9:00 and maybe

19 before that. I saw jurors coming in very early in the

20 morning. Thank you very much.

21 I am sorry for delaying the matter, I had several

22 other matters, including a complex civil case I am trying

23 to unravel. I have not succeeded yet, but I am still
24 delaying.
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4831

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

2 called as a witness, having been previously

3 duly sworn, was examined and testified as

4 follows:

5

6 THE COURT: Mr. Steven Watstein, you are

7 previously sworn and still under oath. You understand

8 that?

9 THE WITNESS: Yes.

10

11 CROSS-EXAMINATION (cont'd)

12 BY MR. NELSON:

13 Q I believe we left off yesterday at the conclusion of

14 the recording that was made on January 20th, 1993. Do you

15 recall that?

16 A Yes.

17 Q And am I correct that clearly this was viewed as

18 Mr. Martin being a job interview; is that correct?

19 A Yes.

20 Q And would I be correct in stating that you led

21 Mr. Martin on to believe that he might be coming to work

22 for you at some point in time by the time the interview

23 concluded?
24 A Could you rephrase the question, sir?
25 Q At the conclusion of the interview, although it is

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4832
Watstein-cross/Nelson


1 not on the tape, I assume you told him you would be

2 getting back to him as to whether or not you presented him

3 with a job offer?

4 A Yes.

5 Q Is that correct?

6 A Yes.

7 Q Following this interview with Mr. Martin, did you

8 have any further contact?

9 A No, sir.

10 Q You did, however, continue to cooperate with the

11 postal inspectors?

12 A Yes.

13 Q Am I correct in January of 1993, in addition to

14 interviewing Mr. Martin, and I believe one other former

15 employee of Who's Who Worldwide, you interviewed and

16 recorded a number of former employees of Oxford Who's Who;

17 is that correct?

18 A That is correct.

19 Q And am I correct in April of 1993 you made numerous

20 telephone calls into Oxford Who's Who, posing as a

21 customer, and recording the employees, the salespeople of

22 Oxford Who's Who?

23 A No, sir, that's not accurate as you phrased it.
24 Q Did you make -- did you make recordings of employees
25 of Oxford Who's Who in April of 1993?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4833
Watstein-cross/Nelson


1 A I made a singular call, sir.

2 Q I am not speaking of Who's Who Worldwide.

3 A I understand.

4 Q Just Oxford?

5 A Yes.

6 Q And you made one call?

7 A Yes.

8 Q And did you make any other recordings of employees of

9 Oxford Who's Who other than telephone calls in April of

10 1993?

11 A You are referring to me personally?

12 Q You personally.

13 A No, sir.

14 Q Did you go to work for Oxford Who's Who?

15 A No, sir.

16 Q Did you have any meetings with employees that weren't

17 recorded of Oxford Who's Who?

18 A No, sir.

19 Q Did you continue to participate in t he investigation

20 of Oxford Who's Who in April of 1993?

21 A To a limited extent, yes.

22 Q Am I correct that in July of 1993, a few months after

23 the recording that was made to Oxford Who's Who, Oxford
24 Who's Who was shut down and arrests were made of various
25 employees of Oxford Who's Who?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4834
Watstein-cross/Nelson


1 A That's my understanding, yes, sir.

2 Q Am I correct that with respect to Who's Who

3 Worldwide, there were no arrests made during the summer,

4 July of 1993?

5 A That's correct, that is my understanding, yes, sir.

6 Q In fact, am I correct as it relates to the defendants

7 sitting here on trial, none of those individuals were

8 arrested until March of 1995, or more than two years after

9 this interview with Frank Martin which had been conducted

10 on Ja nuary 20th, 1993?

11 A That is correct, to the best of my knowledge, yes,

12 sir.

13 Q Now, am I correct that other than making a single

14 recording of a telephone conversation where you called

15 into Who's Who Worldwide in April of 1993 --

16 THE COURT: You are talking about Oxford?

17 MR. NELSON: No. This is Who's Who Worldwide,

18 your Honor.

19 THE COURT: Okay.

20 MR. NELSON: I will withdraw the question and

21 rephrase it.

22 THE COURT: No. My error. I thought you were

23 still talking about Oxford.
24 Q Am I correct that in April of 1993, at the same time
25 that you made a telephone call into Oxford Who's Who, you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4835
Watstein-cross/Nelson


1 also made a singular telephone call into Who's Who

2 Worldwide posing as a customer?

3 A That is correct.

4 Q And other than making that one telephone call into

5 Who's Who Worldwide in April of 1993, am I correct that

6 between January of 1993, where you recorded Mr. Martin,

7 and approximately the late spring, early summer of 1994,

8 you did not continue to participate in an ongoing

9 investigation into Who's Who Worldwide; is that correct?

10 A I believe it was August of '94. That's correct, sir.

11 Q So, for approximately an 18 month period of time you

12 did not participate in any ongoing investigation that was

13 taking place as it related to Who's Who Worldwide; is that

14 correct?

15 A I believe that --

16 Q I am asking if you participated.

17 A Yes.

18 Q Not if an investigation was going on, just if you

19 participated.

20 A I believe there might have been a phone conversation

21 or two that might have dealt with that subject

22 peripherally . If that means did not participate, then I

23 did not participate.
24 Q And those phone conferences would have been you
25 speaking with Inspector Biegelman?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4836
Watstein-cross/Nelson


1 A Or Inspector Leonard.

2 Q However during that 18 month period of time or 24

3 month period of time from January of 1993, to

4 approximately August of 1994, am I correct that you did

5 participate in numerous other investigations?

6 A Yes, sir.

7 Q All right.

8 In fact, am I correct that you were recruited or

9 volunteered, I am not sure how it worked out but in the

10 investigation of a Robert Rosenfeld?

11 A Yes, sir. I was recruited.

12 Q Was that by the postal authorities or other agency?

13 A Postal.

14 Q Who was the inspector handling that investigation?

15 A Inspector Biegelman.

16 Q In fact, you recorded various seminars conducted by

17 principals of that company?

18 A Amongst other things, yes.

19 Q You recorded salespeople of Mr. Rosenfeld?

20 A I don't know if salespeople were recorded, as much as

21 general conversations.

22 Q And that is under the instruction and supervision of

23 Inspector Biegelman?
24 A Yes, sir.
25 Q And after you worked on that investigation, am I

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4837
Watstein-cross/Nelson


1 correct, that you went back down to Florida in 1993, and

2 posed as a consultant to a company that was under

3 investigation by the Department of Labor; is that correct?

4 A I can't answer that question yes or no the way you

5 phrased it, sir.

6 Q Well, did you go -- did you pose as a consultant for

7 a company under investigation by the Department of Labor

8 in Florida?

9 A Yes.

10 Q Okay.

11 And that was in 1993?

12 A Yes.

13 Q Is that correct?

14 A Yes, sir.

15 Q Okay.

16 And you provided information to the Department of

17 Labor in an investigation that they were conducting in

18 Florida with respect to that company; is that correct?

19 A That is correct.

20 Q All right.

21 Am I correct that there was nobody criminally

22 charged as a result of that investigation?

23 A That is correct, to the best of my knowledge.
24 Q And while you were in Florida, you also assisted the
25 criminal fraud division of the Internal Revenue Service in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4838
Watstein-cross/Nelson


1 a tax investigation of other individuals; is that correct?

2 A That is correct.

3 Q And with respect to that investigation, nobody was

4 criminally charged either; is that correct?

5 A I believe that's true as of the date of Mr. Marvin's

6 letter. It may not be true today.

7 Q Am I correct that while you were in Florida, you also

8 assisted the postal authorities, posing as a consultant

9 for a number of different Florida based companies?

10 A That's accurate.

11 Q And based upon those different investigations, am I

12 correct that there were no arrests in those investigations

13 either; is that right?

14 A Not that I am aware of.

15 Q Now, am I correct that there came a period of time

16 while you were in Florida, that you traveled from Florida

17 to New Jersey, to help the FBI in an investigation they

18 were conduct in -- conducting in New Jersey?

19 A Yes, sir.

20 Q And you actually traveled from Florida at your own

21 expense to record that mee ting?

22 A No, not quite accurate.

23 Q You traveled from Florida at your own expense to
24 record the meeting; is that right?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4839
Watstein-cross/Nelson


1 Q You made recordings before the meeting, but not

2 actually while you were in attendance at the meetings; is

3 that correct?

4 A I actually made recordings at the meeting, but not at

5 the party.

6 Q Okay.

7 Would I be correct in stating that at least from

8 your position there was no expense that was too great in

9 order to assist the government, taking money out of your

10 own pocket in order to provide cooperation?

11 A I can't answer the question with a yes or no, sir.

12 Q You did pay your own expense to travel from Florida

13 to New Jersey; is that right?

14 A Yes, sir.

15 Q An d that was in order to assist in the investigation

16 that was taking place in New Jersey; is that right?

17 A And I requested no reimbursement; that's correct,

18 sir.

19 Q And it was your hope that based upon that

20 investigation there would be a successful conclusion so

21 that information could be included in the letter submitted

22 to Judge Mishler, by Assistant United States Attorney Seth

23 Marvin; is that correct?
24 A That's not accurate, no.
25 Q You were hoping Mr. Marvin would tell Judge Mishler

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4840
Watstein-cross/Nelson


1 about what you did to help the government; is that right?

2 A In terms of assistance, yes, sir.

3 Q And would I be correct in stating that you told us

4 yesterday and also the day before when Mr. Jenks was

5 speaking to you, that this letter that was goin g to be

6 submitted by Mr. Marvin, that letter was worth a million

7 dollars to you; is that right?

8 A That's the phraseology Mr. Jenks used and I had

9 concurred with it, yes.

10 Q Now, in addition to those investigations, am I

11 correct that you also secretly recorded calls and meetings

12 with the target of an advertising fraud investigation in

13 New York in 1994?

14 A That is correct.

15 Q And nobody was arrested as part of that investigation

16 either; is that right?

17 A They were exonerated, yes, sir.

18 Q And you also made numerous recordings posing as a

19 customer to two other completely unrelated Who's Who

20 investigations, one in the south and another one in New

21 York, not Oxford, not Who's Who Worldwide but some third

22 entity; is that correct?

23 A Could you repeat the question, please, sir?
24 Q Okay.
25 Let me break it down for you.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4841
Watstein-cross/Nelson


1 You assisted the government by making recordings

2 posing as a customer into a number of different Who's Who

3 organizations; is that correct?

4 A No, it is not accurate, sir.

5 Q Did you make telephone calls to a Who's Who

6 organization operating in the southern part of the United

7 States at any point in time?

8 A I don't believe so. It was not a completed call at

9 least.

10 Q Did you attempt to assist in an investigation into

11 the were -- a Who's Who organization in the southern part

12 of the United States?

13 A I am not sure. I believe the attempt was, but we

14 didn't actually make the telephone call.

15 Q It is in Florida?

16 A No.

17 Q What state was it?

18 A It would have been a call from the pos t office in

19 Hicksville in 1993. To the best of my recollection either

20 we did not make contact with the individual, or the call

21 was not made. But there was no recording of it.

22 Q I would like to show you 3500-22-I, which is the

23 letter written by Mr. Marvin to Judge Mishler in your
24 behalf, and I would like to address your attention to
25 paragraph 9 of that letter.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4842
Watstein-cross/Nelson


1 Does a review of that paragraph refresh your

2 recollection that you made several recorded calls to an

3 international Who's Who company in the south, which was

4 the subject of a pending investigation?

5 (Handed to the witness.)

6 A I don't believe that's accurate. But my memory could

7 be faulty in that matter.

8 Q I would like to direct your attention to paragraph 8

9 of the letter, and I would like you to read that paragraph

10 and see if that refreshes your recollection.

11 (Whereupon, at this time there was a pause in the

12 proceedings.)

13 Q Does that paragraph refresh your recollection that

14 you made numerous recorded calls to a bogus Who's Who

15 company on Long Island, which is the subject of a pending

16 investigation, which would have been pending as of July

17 21st, 1995?

18 A I believe that I made the phone calls, but they were

19 not consummated. I am not sure if they were recorded or

20 not.

21 Q So, I would be correct in stating that in addition to

22 Oxford Who's Who and Who's Who Worldwide, you attempted to

23 assist in the investigation of two other completely
24 unrelated Who's Who type organizations, during the course
25 of your cooperation; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4843
Watstein-cross/Nelson


1 A That's an accurate statement, yes, sir.

2 Q At least as of the date of that letter, no one was

3 charged in either of those two investigations; is that

4 correct?

5 A That's my understanding, correct, sir.

6 Q In summary, am I correct in stating between 1993 and

7 1995 you literally made cooperation with federal

8 authorities, against virtually everyone and anyone, a

9 full-time job?

10 A No, sir.

11 Q And you were certainly spending a good time of

12 your -- part of your time doing this?

13 A A substantial amount of time would be accurate.

14 Q In fact, you expended your own funds to participate

15 in these investigations; is that correct?

16 A Yes, sir.

17 Q When the authorities called you to participate, you

18 didn't only jump, you asked how high; is that correct?

19 A I can't phrase it colloquially as you phrased it.

20 But it was an important part of my life, certainly.

21 Q Am I correct in stating that in each of these

22 investigations, it was with the hope that that cooperation

23 information would be included in one of the 13 separated
24 enumerated paragraphs that was set forth in the letter
25 prepared by Seth Marvin to Judge Mishler outlining and

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4844
Watstein-cross/Nelson


1 detailing your cooperation; is that right?

2 A As you phrased it, absolutely correct, yes, you were.

3 Q And you were hoping the letter would convince Judge

4 Mishler not to give you the 70 months mandatory jail time

5 you were looking at?

6 A That is correct, sir.

7 Q You knew the more information you gave the government

8 about other people, the more the government could write

9 the judge about; is that right?

10 A The proper phrase is assistance, not information.

11 Q The more lives you could ruin, the better chance you

12 had of saving your own neck; is that right?

13 MR. WHITE: Objection.

14 THE COURT: Sustained.

15 MR. NELSON: I will withdraw the question.

16 Q Now, am I correct that throughout this two-year

17 period of time, from 1993 to 1995, you maintained contact

18 with Inspector Biegelman on a fairly regular basis?

19 A Give me the dates again, sir?

20 Q From '93 to '95?

21 A Not accurate.

22 Q From '93 to August of '94?

23 A No, sir.
24 Q And did you continue to remain in contact with
25 Inspector Biegelman from the time you entered your

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4845
Watstein-cross/Nelson


1 cooperation agreement until sometime around August of

2 1994, possibly on an infrequent basis, but you maintained

3 contact with him?

4 A Contact for a period of time was largely with

5 Inspector Leonard, as he took over for Inspector

6 Biegelman.

7 Q When Inspector Leonard was no longer in the picture,

8 you reached out to Biegelman?

9 A Actually Mr. Biegelman reached out for me, yes, sir.

10 Q But you maintained contact?

11 A During that period, yes, sir.

12 Q And am I correct that in approximately June or July

13 of 1994, you contacted Inspector Biegelman and advised him

14 a judgment had been entered against Who's Who Worldwide in

15 a lawsuit brought against it by Reed Elsevir?

16 A That's correct.

17 Q And you contacted him in the hope that you could now

18 revive the dormant investigation against Who's Who

19 Worldwide; isn't that right, sir?

20 A No, sir.

21 Q Well, this contact with Biegelman was some 18 months

22 after your meeting with Frank Martin at the hotel; is that

23 correct?
24 A That is correct.
25 Q And that was some 14 months after the one call you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4846
Watstein-cross/Nelson


1 had made into Who's Who Worldwide in April of 1993; is

2 that correct?

3 A That is correct.

4 Q And during that 14 month period of time to your

5 knowledge, there was no active investigation taking place

6 of Who's Who Worldwide by the postal authorities; isn't

7 that correct, sir?

8 A No, sir, it is not.

9 Q Well, you had absolutely no role in the

10 investigation; isn't that right, sir?

11 A That is correct.

12 Q All right.

13 Now, once you made this call to Inspector

14 Biegelman during the summer of 1994, am I correct that

15 very shortly af ter that call was made you started working

16 with him again; isn't that right?

17 A No, sir.

18 Q Well, do you recall when you contacted Inspector

19 Biegelman to tell him about the decision in the Reed case?

20 A I believe it was the late spring or early summer of

21 1994.

22 Q It was June of 1994?

23 A Yes, sir.
24 Q Right?
25 A Correct.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4847
Watstein-cross/Nelson


1 Q Am I correct that starting in August of 1994, you

2 started making recordings into Who's Who Worldwide at the

3 request of Inspector Biegelman; is that right?

4 A Yes, sir. And that's two months apart, yes, sir.

5 Q As of August of 1994, you had not yet been sentenced

6 for the six felonies you pled guilty to back in March of

7 1993; is that right?

8 A That is correct.

9 Q In fact, you r sentence had been adjourned on a number

10 of occasions; is that right?

11 A Yes, at the request of the government, yes, sir.

12 Q And that was to facilitate your continuing

13 cooperation; is that right?

14 A Yes, uh-huh.

15 Q You wanted to make sure the judge heard about all the

16 investigations you participated in before you were

17 sentenced; is that right?

18 A That was my motivation, yes, sir.

19 Q In fact, you weren't sentenced until July of 1995; is

20 that right?

21 A That is correct.

22 Q Coincidentally, that was four months after the arrest

23 of all the defendants in this case; isn't that right, sir?
24 A That is correct.
25 Q Now, am I correct that shortly after you were

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4848
Watstein-cross/Nelson


1 advised -- you advised Inspector Biegelman of the Reed

2 decision in Who's Who, he asked you to start making

3 recordings of Who's Who Worldwide employees; is that

4 right?

5 A Two full months later, yes, sir.

6 Q And at that time you started posing as a customer; is

7 that right? You would call in posing as a customer?

8 A A potential customer, yes, sir.

9 Q You made the 61 recordings, correct?

10 A 60.

11 Q At any time during these recordings, did you ever

12 speak with Frank Martin?

13 A Not to my recollection, no.

14 Q And following your cooperation at the completion of

15 this investigation and the remaining investigations, am I

16 correct that there eventually came a day of reckoning when

17 you indeed were sentenced by Judge Mishler for the various

18 crimes which you committed?

19 A Yes, sir.

20 Q And that was the fraudulent operation of your

21 business where you defrauded tens of thousands of

22 customers; is that correct?

23 A Yes, sir.
24 Q And you are defrauding the Internal Revenue Service
25 out of $600,000 in back taxes?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4849
Watstein-cross/Nelson


1 A Yes.

2 Q And you are defrauding the insurance company?

3 A Yes.

4 Q And following your investigation, the government in

5 fact filed a letter reflecting your substantial

6 assistance; is that correct?

7 A That is correct.

8 Q I would like to show you once again the cooperation

9 agreement -- withdrawn. The letter submitted by Seth

10 Marvin on your behalf to Judge Mishler, dated June 21st,

11 1995.

12 (Handed to the witness.)

13 Q I would like to direct your attention specifically to

14 paragraph 13.

15 Am I correct that one of the investigations you

16 assisted in involved three of your employees, Greg

17 Philips, Linda Zeitzer, Z E I T E R.

18 A Z E I T Z E R.

19 Q Thank you, and Cathy Shkinder, S H K I N D L E R,

20 they were former employees of yours; is that correct?

21 A S C H -- S H K I N D E R.

22 Q Thank you.

23 Am I correct that those three individuals were
24 former employees of yours?
25 A Of Who's Who in U.S. Executives, yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4850
Watstein-cross/Nelson


1 Q That's the company you were the president and

2 principal of; is that correct?

3 A Principal of, yes.

4 Q And those individuals had at some point in time

5 elected not to go to trial -- not to plead guilty, and the

6 case was being prepared to go to trial; is that right?

7 A To the best of my knowledge, yes, sir.

8 Q And am I correct that Mr. Marvin in spea king to Judge

9 Mishler about your cooperation, tells the judge as it

10 relates to that investigation, given Watstein's history

11 and background, it is quite unlikely that he would have

12 been a government witness at any trial involving Phillips,

13 Zeitzer and Shkinder; is that correct?

14 A You are reading it accurately, sir.

15 Q And am I correct that in close to the last paragraph

16 of the letter, and I am going to direct your attention to

17 the fourth page of the letter, and the third paragraph

18 down, am I correct that in conclusion, Mr. Marvin in

19 discussing your cooperation to Judge Mishler states, that

20 while we are guardedly optimistic that Watstein will

21 change his pattern of conduct in the future, it is

22 difficult to ignore his long term criminal and fraudulent

23 conduct.
24 Is that what Mr. Marvin wrote to Judge Mishler in
25 your behalf?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4851
Watstein-cross/Nelson


1 A No. It was not his conclusion, sir.

2 Q Is that a statement he makes in this letter in the

3 next to the last paragraph?

4 A Yes, it was the next to the last paragraph, that's

5 correct.

6 Q Now, you told us you literally invented the concept

7 of Who's Who business leaders; is that correct?

8 A I am not sure the phraseology is correct, but in the

9 format we did, yes.

10 Q You ripped off literally tens of thousands of

11 customers; is that right?

12 A Yes, sir.

13 Q You cheated the government out of half a million

14 dollars?

15 A Yes, sir.

16 Q You ripped off the insurance company by filing the

17 false claim about the limo?

18 A Yes, I answered the question about 15 minutes ago,

19 yes.

20 Q You were f inally sentenced by Judge Mishler on July

21 28th, 1995; is that right?

22 A Yes, sir.

23 Q And now, am I correct that the plea agreement that
24 you had entered back on September 8th, 1993 provided for
25 you to receive a mandatory minimum sentence of no less

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4852
Watstein-cross/Nelson


1 than 70 months, or approximately six years in prison; is

2 that correct?

3 A Yes, sir.

4 Q And am I correct that the sentence that you received

5 was six months in your home; is that correct?

6 A Amongst other things, yes, sir.

7 Q Basically Judge Mishler told you you had to stay in

8 your room; is that right?

9 A No, sir. It is not accurate.

10 Q You had to stay in your house?

11 A That's part of the aspects of the sentence; yes.

12 Q By the way, your house in Florida, does it have a

13 swimming pool?

14 A Yes, sir.

15 Q It is air conditioned I assume?

16 A Yes, sir.

17 Q And how much did you pay for the house?

18 A I don't own the house. It is a rented house.

19 Q How many bedrooms in the house?

20 A Four.

21 Q How many square feet in the house?

22 A 2800.

23 Q And how many people were living in that house during
24 your six month period of home confinement?
25 A Four.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4853
Watstein-cross/Nelson


1 Q Who were those four people?

2 A My daughter, my son, my wife and myself.

3 Q Certainly, sir, you give the meaning to the

4 expression, crime pays, don't you?

5 MR. WHITE: Objection.

6 MR. NELSON: Withdrawn.

7 I have no further questions.

8 THE COURT: All right.

9

10 CROSS-EXAMINATION

11 BY M R. TRABULUS:

12 Q Good morning, Mr. West.

13 My name is Norman Trabulus. I am Mr. Gordon's

14 lawyer.

15 A Good morning.

16 Q Is that what you like to be called, Mr. West as

17 opposed to Watstein?

18 A West is fine.

19 Q We will use that. It comes off my tongue easier, and

20 that's one of the reasons you changed your name when you

21 were 18 from Watstein to West; is that right?

22 A A bit --

23 THE COURT: You will slow down, Mr. Trabulus?
24 MR. TRABULUS: Thank you.
25 THE COURT: You are starting off with flank

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4854
Watstein-cross/Trabulus


1 speed. As you know that's when you throw everything into

2 the boiler, including the ship.

3 MR. TRABULUS: I will go in reverse.

4 THE COURT: As they did in Around the World in 80

5 days. Do you recall that.

6 MR. TRABULUS: I saw the movie.

7 THE COURT: On the way back from England, they

8 had nothing left but the boiler, having thrown everything

9 into the fire. So slow down.

10 Q You also changed it because it was less ethnic; is

11 that correct?

12 A No, sir.

13 Q There is nothing wrong -- withdrawn.

14 You changed it with a view to business purposes?

15 A As you said before, it was easier to say.

16 Q There is nothing wrong per se with changing one's

17 name for business purposes, either because it is easier to

18 say, or because you wanted to have a more Anglo-Saxon

19 sounding name, although it wasn't your reason?

20 A I can't comment on your question as far as the second

21 part. As far as the first part I agree with you.

22 Q In terms of the first part, at the time you changed

23 your name, were you thinking of a career that might
24 involv e sales?
25 A A business career.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4855
Watstein-cross/Trabulus


1 Q A business career?

2 A Yes.

3 Q Certainly you didn't perceive anything improper in

4 changing your name at that time, did you?

5 A Not at all.

6 Q At that point in time you were not planning a career

7 in which you would cheat anyone or defraud anyone; is that

8 right?

9 A That is correct, sir.

10 Q Now, you became familiar during your career with

11 telemarketing; is that correct?

12 A That is correct.

13 Q And in the telemarketing industry, it is common

14 practice, is it not, for people to adopt easy to say

15 names; is that correct?

16 A That is a practice that is in use. I would not call

17 it a common practice, but it is a practice in use.

18 Q And it is a practice in use by perfec tly legitimate

19 companies; is that correct?

20 A The majority of the large companies do not use that

21 practice, sir. But maybe small companies do.

22 MR. TRABULUS: Move to strike.

23 THE COURT: Motion granted. Strike it out the
24 answer as not responsive. The jury is instructed to
25 disregard it.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4856
Watstein-cross/Trabulus


1 Q Mr. Watstein, is it not correct that perfectly

2 legitimate companies not engaged in fraud may have

3 employees utilizing easy to pronounce names?

4 A I can't answer that question with a yes or no, sir.

5 Q Now, you are currently a consultant; is that correct?

6 A Yes.

7 Q And among one of your clients is Core Bank?

8 A Core States Bank.

9 Q Thank you.

10 Do you intend to get more clients aside from the

11 three you listed origina l?

12 A Yes, sir.

13 Q Do you utilize a resume or curriculum vitae for that

14 purpose?

15 A No, sir.

16 Q Do you have any kind of document you give clients

17 representing yourself?

18 A No, sir.

19 Q And do I take it -- withdrawn.

20 Is that because you don't want to have to show on

21 a resume what you were doing between 1988 and 1991?

22 A No, sir.

23 Q Now, in the sales business, is it correct that it is
24 the usual practice for salespeople to be paid on
25 commission?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4857
Watstein-cross/Trabulus


1 A No, sir.

2 Q Straight salary is what you believe to be the usual

3 practice?

4 A No, sir. Neither.

5 Q Is it a common practice that sales people be paid on

6 commission?

7 A It is one of the common practices, yes.

8 Q And is it also a common practice that salespeople

9 have a quota, a minimum number of sales that they must

10 make?

11 A It is a practice.

12 Q Is it a common practice, sir?

13 A It depends on the company, sir.

14 Q Well, are you familiar with a bunch of different

15 companies?

16 A Somewhat.

17 Q And among the companies -- withdrawn.

18 Is it fair to say that a quota system is a

19 practice that can be used by a company which is perfectly

20 legitimate?

21 A Yes, sir.

22 Q Indeed -- withdrawn.

23 Before coming to New York to testify, did you
24 review any documents?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4858
Watstein-cross/Trabulus


1 Q What documents did you review, without describing

2 their contents?

3 A The transcripts of the 61 recordings for accuracy.

4 Q And besides the transcripts, did you review any other

5 documents?

6 A Not prior to coming to New York, no, sir.

7 Q Earlier on in your work as a cooperator were you

8 shown any documents either by one of the Assistant U.S.

9 Attorneys, or by Inspector Biegelman or by another postal

10 inspector?

11 A I don't have a recollection of them sharing documents

12 with me. I may need to rethink that. It goes back a

13 while, but I don't have a recollection of that.

14 Q Were you shown any scripts of sales presentations?

15 A Of whom, sir?

16 Q Well, any that were purported -- reported to you to

17 be of Who's Who Worldwide?

18 A I don't believe so.

19 Q Were you shown any documents or transcripts from the

20 litigation of Reed Elsevir and Who's Who Worldwide?

21 A Not by the postal inspector, but by my attorney.

22 Q Your attorney showed it to you; is that corr ect?

23 A Yes.
24 Q All right.
25 Were you shown transcripts of testimony by your

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4859
Watstein-cross/Trabulus


1 attorney?

2 A No, sir.

3 Q Now, the 61 or 60 tapes you made, those were tapes

4 you made starting in August of 1994 and afterwards; is

5 that correct?

6 A No, sir.

7 Q Included in that are the tapes made in January of

8 1993, and the April 1993 tape?

9 A Yes, sir.

10 Q Let's talk about the tapes made in August of 1994 and

11 afterwards, and also the April 1993 tape.

12 A Yes, sir.

13 Q These were tapes in which you posed as a potential

14 customer; is that correct?

15 A That's correct.

16 Q I think you indicated in response to questions by

17 Mr. White that in support of those conversations, you

18 spoke to salespeople here , Annette Haley, Scott

19 Michaelson, Laura Weitz or Winters, and Steve Rubin, also

20 Steve Walden?

21 A Yes, sir.

22 Q And you also spoke to quite a few other people beyond

23 that; is that right?
24 A That's correct.
25 Q And in any of those conversations which you had and

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4860
Watstein-cross/Trabulus


1 which were tape recorded, did any one of the salespeople

2 promise you a free expense paid trip to New York?

3 A No, sir.

4 Q Is that correct in each of those conversations it was

5 explained to you after the initial payment there was a

6 subsequent payment which would be due at about the time

7 the directory would be shipped?

8 A No, it is not accurate as you phrased it.

9 Q Is it accurate in virtually every one of those

10 conversations -- withdrawn.

11 Is it accurate that the term split billing was

12 used in each of those conversations?

13 A No, sir.

14 Q Is it accurate you were told there were to be two

15 separate payments in each of those conversations?

16 A No, sir.

17 Q Is it accurate that in the vast majority of those

18 conversations you were told that there would be two

19 separate payments?

20 A I think, sir, it was somewhere between less than half

21 and half would be more accurate.

22 Q Less than half and half?

23 A Yes.
24 Q And do you have the transcripts with you?
25 A Not with me, sir. I do not have them.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4861
Watstein-cross/Trabulus


1 Q Now, is it correct in some instances -- withdrawn.

2 In virtually all of the conversations you raised

3 the subject of Hilton Head; is that correct?

4 A No, sir.

5 Q In some of the instances you raised the subject of

6 Hilton Head?

7 A Yes, sir.

8 Q In some instances you raised questions about

9 conferences?

10 A Yes, sir.

11 Q In some instances the salesperson you spoke to told

12 you Hilton Head was cancelled; is that correct?

13 A In some instances.

14 Q In some instances you were told Vietnam was

15 cancelled?

16 A I think only one instance, sir, maybe two.

17 Q Now, you testified yesterday -- withdrawn.

18 You were not told that each tape recording -- in

19 each tape recording Vietnam occurred?

20 A Rephrase that.

21 Q You said in a couple of tapes you were told Vietnam

22 was cancelled. Is it your testimony that in every other

23 tape you were told that the Vietnam conference had
24 actually occurred?
25 A No, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4862
Watstein-cross/Trabulus


1 Q Now, you testified you first learned of the criminal

2 investigation of your company before the search warrant

3 was first executed; is that correct?

4 A Yes, sir.

5 Q Now, when the first -- the first warrant in your

6 company was executed in June of 1990; is that correct?

7 A Yes, sir.

8 Q When did you first learn of the criminal

9 investigation of your company?

10 A In May of 1990.

11 Q Now, you testified in the Spring of 1990, you placed

12 a telephone call to Mr. Gordon's company; is that correct?

13 A Yes, sir.

14 Q And that telephone call was not recorded, was it?

15 A No, sir.

16 Q At that point in time you were not cooperating with

17 the government, were you?

18 A That is correct.

19 Q And that telephone call was placed, was it not,

20 before the search warrant was executed on your company?

21 A That's correct.

22 Q That telephone call was placed, was it not before you

23 were aware of any criminal investigation on your company;
24 is that correct?
25 A That is correct, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4863
Watstein-cross/Trabulus


1 Q Now, your company had a policy with its employees,

2 salespeople, that it would have a written contract with

3 them, did it not?

4 A Yes, sir.

5 Q And that contract contained a provision called a

6 covenant not to compete; is that correct?

7 A Yes, a restrictive covenant.

8 Q And you know sometimes those restrictive covenants

9 are enforceable in court and sometimes it is not?

10 A That is an accurate statement.

11 Q Accurate?

12 A That's an accurate statement.

13 Q An accurate statement?

14 A Yes, you are accurate.

15 Q Now, you say that you called Mr. Gordon's company and

16 the phone was answered, Who's Who Worldwide; is that

17 correct?

18 A It was some Who's Who type name, yes, sir.

19 Q It was answered Who's Who as opposed to corporate

20 offices?

21 A That is correct, sir.

22 Q And do you recall the address that you called him at?

23 A It was a Long Island address. I don't recall it, no,
24 sir.
25 Q I think you say he indicated to you as being

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4864
Watstein-cross/Trabulus


1 something involved in computers?

2 A Yes, sir.

3 Q Do you recall the name of the computer company he

4 said?

5 A No, sir.

6 Q And I will show you Exhibit Z, a letter from Who's

7 Who in America to Mr. Gordon, it says UVX Computers.

8 Does that refresh your recollection as to the

9 name of the computer company he mentioned he was in?

10 A No, sir.

11 Q Now, it is correct that Mr. Canino -- withdrawn.

12 When you called Mr. Gordon, the subject was

13 Mr. Canino; was it not?

14 A Partially.

15 Q Mr. Canino was someone who worked for you?

16 A Currently working for me.

17 Q Currently working for you?

18 A Yes.

19 Q And you called Mr. Gordon and discussed something

20 about Mr. Canino; is that correct?

21 A Yes, sir.

22 Q It has been spelled with a K, but I believe it is

23 C A N I N O.
24 Now, is it correct that Mr. Canino had in fact
25 been involved in some sort of business involving vitamins?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4865
Watstein-cross/Trabulus


1 A Yes, sir.

2 Q And it is your testimony you called the phone number

3 that says Who's Who Wo rldwide?

4 A Who's Who something.

5 Q Excuse me, Who's Who something, whether Worldwide or

6 not, and you hung up because you didn't know what to say

7 at that point; is that right?

8 A My first call, yes.

9 Q When you first called were you expecting to hear

10 something about Who's Who?

11 A Not really.

12 Q When you first called, were you expecting to complain

13 to Mr. Gordon that Mr. Canino was doing something with

14 vitamins?

15 A No, sir.

16 Q When you first called Mr. Gordon, was it your plan to

17 complain that Mr. Canino was doing something outside of

18 your business relating to Who's Who?

19 A You are referring to the first call or second call,

20 sir?

21 Q The very first call when you hung up not knowing what

22 to say?

23 A I am not sure of my intention. To validate if it was
24 a truthful rumor might be more accurate.
25 Q A truthful rumor that Mr. Canino was doing something

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4866
Watstein-cross/Trabulus


1 with Mr. Gordon relating to Who's Who?

2 A Yes, sir.

3 Q And so, it is your testimony that when you called up,

4 you were surprised to hear Who's Who answered, and hung up

5 right away?

6 A I really thought it was not going to be true, yes,

7 sir.

8 Q And you didn't think -- you are an intelligent

9 fellow, correct?

10 A I think so.

11 Q So do I.

12 You are telling me you didn't plan in advance

13 what you were going to say when you made this call?

14 A I didn't think it was a true rumor, sir. I was

15 surprised it was truthful. It threw me off.

16 Q So, you had no game plan in your head when you called

17 up and you were told the very thing that you were said to

18 expect; is that correct? You had to game plan?

19 A I think I had a game plan. I was surprised of the

20 phone being answered as it was so blatantly.

21 Q When you say blatantly, you mean it was just

22 identified Who's Who; is that correct?

23 A Yes.
24 Q And again, it was your testimony that you called
25 again, and again it was answered Who's Who; is that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4867
Watstein-cross/Trabulus


1 correct?

2 A That's right.

3 Q You asked to speak to the corporate president; is

4 that correct?

5 A Correct.

6 Q And you were put through to Mr. Gordon; is that

7 correct?

8 A Yes.

9 Q The president of Who's Who?

10 A Yes, sir.

11 Q And you immediately asked him, are you the president

12 of Who's Who; is that correct?

13 A I said owner, I believe , not president.

14 Q Are you the owner of Who's Who; is that correct?

15 A Yes, sir.

16 Q He denied it right then and there?

17 A Yes, he denied it for the moment. That's correct,

18 sir.

19 Q At that point in time when you called him you had not

20 yet said to him, I am calling about a problem with

21 Mr. Canino, had you?

22 A I am not sure which part of the conversation preceded

23 the other.
24 Q It is your testimony you asked for Mr. Gordon --
25 A I asked for the owner of the company.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4868
Watstein-cross/Trabulus


1 Q For the owner of the company?

2 A Yes.

3 Q The phone was ask answered twice, Who's Who?

4 A Yes.

5 Q Is that correct?

6 A Yes, sir.

7 Q Mr. Gordon got on the phone?

8 A Yes.

9 Q You asked if he was the owner of Who' s Who?

10 A Yes.

11 Q And he denied having anything to do with any Who's

12 Who business; is that correct?

13 A In substance, yes.

14 Q Now, it is also your testimony -- at the time of the

15 telephone call, you didn't know you were under any

16 investigation; is that correct?

17 A Yes, sir.

18 Q You certainly didn't mention to Mr. Gordon that you

19 were under any investigation; is that correct?

20 A Of course. I didn't know that.

21 Q And it is your testimony -- and the subject of an

22 investigation was not brought up by you, was it?

23 A That is correct.
24 Q And it is your testimony that Mr. Gordon told you
25 that nobody would investigate him?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4869
Watstein-cross/Trabulus


1 A No. He did not use that phrase, sir.

2 Q He did not?

3 A No, that no sa lesman would give him a hard time.

4 Q You are certain he didn't use the word "investigate"

5 at all; is that correct?

6 A I can't be certain, I am almost positive.

7 Q Almost positive?

8 A Yes.

9 Q Is that correct?

10 A Yes, sir.

11 Q And did Mr. Gordon tell you that -- withdrawn.

12 You threatened to sue Mr. Gordon, didn't you?

13 A In the third call, yes.

14 Q And that was the call, the third call when also the

15 phone was answered Who's Who Worldwide; is that right?

16 A Yes, sir.

17 Q After the first call, when you say he identified --

18 he denied he was the president of Who's Who Worldwide,

19 evidently he didn't give instructions to his staff not to

20 answer the phone Who's Who; is that correct?

21 A I have no idea what instructions he gave his staff,

22 sir.

23 Q You called the third time and they answered Who's

24 Who; is that correct?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4870
Watstein-cross/Trabulus


1 Q And he -- you asked to be put through to Mr. Gordon?

2 A Yes.

3 Q You were put through to him again?

4 A Yes.

5 Q Evidently he did not give instructions to be put

6 through to him, or people asking for the president of

7 Who's Who, not to be put through?

8 A I assume so.

9 Q And you spoke to him?

10 A Yes.

11 Q He spoke to you?

12 A Yes.

13 Q In that conversation you threaten to bring a lawsuit;

14 is that correct?

15 A Among other things, yes.

16 Q And that's on the grounds that Mr. Canino would be

17 violating his covenant not to compete? Is that one of the

18 grounds?

19 A One of the grounds, yes.

20 Q And this is where -- and this is the conversation --

21 withdrawn.

22 So, in this conversation it was clear to

23 Mr. Gordon, was it not, that you and he were in an
24 adversarial posture; is that correct?
25 A Potential adversarial posture, yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4871
Watstein-cross/Trabulus


1 Q You were threatening a lawsuit?

2 A Towards the close of the conversation, yes, that's

3 correct, sir.

4 Q In the course of threatening a lawsuit, you made it

5 clear to him that in the -- if there were to be a lawsuit,

6 anything -- you would use whatever you could against him

7 legitimately? Fair to say?

8 A It was not a phraseology I used, sir.

9 Q Okay.

10 It is fair to say that somebody -- you are a

11 businessman; is that correct?

12 A Yes, sir.

13 Q Were you ever threatened by a lawsuit in the course

14 of business?

15 A Yes, sir.

16 Q And when you are threatened with a lawsuit, is it

17 fair to say that anything you have done or said could be

18 fair game; is that correct?

19 A Certainly.

20 Q So this is the conversation in which you say that

21 Mr. Gordon told you that if his salespeople gave him a

22 hard time, he would falsely accuse them of the crime of

23 stealing property from them, and have him -- have them
24 arrested; is that correct?
25 A Accuse them was the phrase.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4872
Watstein-cross/Trabulus


1 Q He would accuse them of theft; is that correct?

2 A Yes.

3 Q And you were speaking to someone -- of someone in an

4 adversarial posture to him and telling him that he was

5 committing a crime?

6 A That's what he said.

7 Q You say that's what he said?

8 A Yes.

9 Q But he didn't say investigate?

10 A Not to the best of my recollection.

11 Q Now, do you recall the day before yesterday being

12 asked the following questions and giving the following

13 answers, and I will read them all, and we are at the

14 transcript of the trial at page 4401, beginning with line

15 19, and continuing to page 4403, line 3.

16 THE COURT: You are going to read slowly, aren't

17 you, Mr. Trabulus?

18 MR. TRABULUS: I will do my best.

19 Question: Did you then have a subsequent

20 conversation with Mr. Gordon?

21 Answer: Yes, sir.

22 Question: Tell us about that?

23 Answer: Approximately 30 minutes later it dawned
24 on me that I was naive that the phone was answered twice,
25 Who's Who Worldwide. And, in fact, it is possible that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4873
Watstein-cross/Trabulus


1 Mr. Gordon was not being candid on the phone with me. I

2 called back again asking for Mr. Gordon, and the same

3 individual who identified himself as Bruce Gordon came to

4 the phone. In this conversation he now admitted that he

5 had created a competitive Who's Who to my company. He

6 stated in fact that it was a big world out there, that I

7 had no ability to forestall him from using the term "Who's

8 Who."

9 I then indicated it came to my attention he had

10 taken my script and materials I had copyrighted. He

11 indicated it was his option to do and I would have no

12 action against him. In fact, if I were to bring an action

13 against him only the lawyers would get rich.

14 Mr. Gordon then stated in fact, he operated in a

15 different style than I did, and he would be more

16 successful than I was. His style was to closely monitor

17 the salespeople, t o literally walk up and down the

18 telemarketing room. And he was told that my style was to

19 do consulting, stay in the background and hire other

20 salespeople, a sales force.

21 He finally indicated his strategy of dealing with

22 salespeople who were difficult, who gave him a hard time,

23 was to state that they had stolen property from him, and
24 have them arrested, and, therefore, no one would, quote,
25 close quote, investigate Bruce Gordon.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4874
Watstein-cross/Trabulus


1 I indicated I would seek out an attorney to sue

2 him.

3 He indicated it would not be fruitful. That was

4 the last conversation we had.

5 (Whereupon, at this time there was a pause in the

6 proceedings.)

7 Q Do you recall being asked those questions and giving

8 those answers?

9 A Yes, sir.

10 Q And when you gave those answers there was no

11 hesitation in your mind, was there, that Mr. Gordon

12 identified his company as not some Who's Who company, but

13 Who's Who Worldwide; is that correct?

14 A I think that's accurate, yes, sir.

15 Q Indeed, your recollection of Mr. Gordon saying --

16 withdrawn.

17 The impression of your recollection that you gave

18 to the jury of Mr. Gordon saying, investigate, was such a

19 vivid one, that you actually said quote, unquote, before

20 saying the word "investigate"; is that correct?

21 A I don't have a full recollection, but you read back

22 the transcript, yes, sir.

23 Q Now, is it correct in your business the letters that
24 were sent out to potential Who's Who members said that
25 they had been comminuted by another member?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4875
Watstein-cross/Trabulus


1 A In some cases it was said, and in some cases it was

2 not.

3 Q You testified that Inspector Biegelman gave you a

4 letter signed by Cathy Ross, a Who's Who Worldwide letter

5 to look at; is that correct?

6 A Yes, sir.

7 Q And that was in connection with the telephone calls

8 you started making in August of 1994; is that correct?

9 A That's correct.

10 Q And was that letter written about that time, the

11 summer of 1994?

12 A I believe it was written a month or two before the

13 date of the first phone call.

14 Q Do you recall if that letter used the word nominate?

15 Yes or no, sir?

16 A I don't have a clear recollection, no.

17 Q And were you shown some letters that did not use the

18 word "nominate"?

19 A I was only shown one letter at that time.

20 Q Is it correct that that letter certainly did n ot say

21 that the recipient had been nominated by another member?

22 A I don't have a recollection of the text of that

23 letter, sir.
24 Q I will show you a copy, my copy of
25 Government's Exhibit 232 in evidence. There are some

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4876
Watstein-cross/Trabulus


1 others around there.

2 (Handed to the witness.)

3 Q Is that a letter signed by Cathy Ross?

4 A Yes, it is, sir.

5 Q Dated July 7th, 1994?

6 A Yes, sir.

7 Q There were certain other letters signed by Cathy

8 Ross, the same date, Exhibit 232, Exhibit 231, yes?

9 A This is a different one, sir?

10 Q A different addressee.

11 Take a look at those, 231, 232 and 233.

12 (Handed to the witness.)

13 A Yes, sir.

14 Q Any of those say the person receiving the letter was

15 nominated? Did they us e the word "nominate?"

16 A No, that is not the phrase used.

17 Q The phrase is selected; is that correct?

18 A There is an additional phrase in the second

19 paragraph, yes, that did -- that you did not mention.

20 Q I will read the paragraphs so the jury knows what we

21 are talking about.

22 Dear blank. You were recently selected for

23 possible inclusion in the Who's Who registry of business
24 leaders, 1994-95 edition.
25 We are pleased to inform you on July 1st the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4877
Watstein-cross/Trabulus


1 office of public affairs confirmed your inclusion in the

2 registry pending additional information about your current

3 career position and business expertise. Please refer to

4 the enclosed form.

5 Is that a fair reading of the first two

6 paragraphs marked as Exhibits 231, 232 an d 233?

7 A Absolutely.

8 Q As best you can recall was that the text of the Cathy

9 Ross letter about month before the phone calls?

10 A I don't have the exact recollection of the letter.

11 It is same all right in contents, but it might not be

12 exactly the same.

13 MR. JENKS: Norman.

14 MR. TRABULUS: Yes.

15 (Mr. Jenks confers with Mr. Trabulus.)

16 Q I am going to now show you another

17 Government's Exhibit, and that's number 229. And that's

18 another Cathy Ross letter.

19 (Handed to the witness.)

20 A Yes, sir.

21 Q Does that use the word "nominated?"

22 A No, it does not.

23 Q It is dated June 23rd, 1994; is that correct?
24 A There is different phraseology on this letter.
25 Q The phraseology is different, it is a somewhat

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4878
Watstein-cross/Trabul us


1 different form of letter and it doesn't use the word

2 "nominated?"

3 A That's correct.

4 Q It is a little earlier?

5 A Yes, sir.

6 Q June 23rd?

7 A Yes.

8 Q Here is an April 12th, 1994 letter, also signed by

9 Cathy Ross, and still different phraseology; is that

10 correct?

11 A Yes, sir.

12 Q And it does not use the word "nominated" and it?

13 A That's correct.

14 Q Now, yesterday, did you testify as follows, and

15 directing one's attention.

16 MR. JENKS: It was the day before.

17 MR. TRABULUS: I am sorry, it was the day before

18 yesterday, the 17th, at page 4406, beginning line 13, and

19 continuing to 4407, line 4, sir.

20 Q Were you asked these questions and did you give these

21 answers:

22 Question: Now, let me direct your attention to

23 the summer of 1994. Were you asked to do anything by
24 postal inspectors at that time?
25 Answer: Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4879
Watstein-cross/Trabulus


1 Question: What were you asked to do then?

2 Answer: Inspector Biegelman, I believe it is, do

3 you have the spelling of that, sir? Asked me to make some

4 phone calls to Who's Who Worldwide, again indicating I was

5 an applicant to Who's Who Worldwide, and to determine the

6 nature of the sales presentation.

7 Inspector Biegelman supplied me with a letter of

8 solicitation from a person alleging to be Cathy Ross,

9 R O S S, indicating that the party receiving that letter

10 had in fact been nominated, and I was to indicate that I

11 had received that letter, and had sent in my ballot or

12 application, and not received a call back as of yet.

13 Do you recall being asked those questions and

14 giving those answers?

15 A Yes, sir.

16 Q Now, I think you were asked by both Mr. Jenks and

17 Mr. Nelson whether or not in making the telephone calls

18 you were seeking to find incriminating evidence; is that

19 correct, or inculpatory evidence?

20 A The word exculpatory --

21 Q Inculpatory, I meant to say. If I spoke, my

22 apologies.

23 A Yes, sir, that's correct.
24 Q You said no, it was not your objective?
25 A That's correct.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4880
Watstein-cross/Trabulus


1 Q You were not asked what your objective was, were you?

2 A No.

3 Q But is it your position, since you were not looking

4 for incriminatory evidence, that you were simply looking

5 for evidence either way, whether it helped or hurt the

6 subject of the investigation? Is that your position? Yes

7 or no?

8 A I can't answer that with a yes or no.

9 Q Is it your testimony that in making these telephone

10 calls, you in questioning the person on the other side, or

11 in speaking to them, sought equally to elicit things that

12 might be helpful to Who's Who Worldwide, the subject of

13 the investigation, just as much as you were looking for

14 things that might be hurtful?

15 A I can't answer that question yes or no, sir.

16 Q Did there come any point in time where things were

17 said on these tape recordings by the other side, which

18 might have tended to show lack of criminal intent in your

19 judgment?

20 A Yes, sir.

21 Q And did you pursue those things and seek to elicit

22 more details about them?

23 A In some cases, yes, sir.
24 (Mr. Trabulus confers with Mr. White.)
25 Q Now, I think at one point yesterday you asked if you



HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4881
Watstein-cross/Trabulus


1 could see a transcript of a phone call you had made on

2 January 20th, 1993; do you recall that? And you were not

3 allowed to see it at that point in time?

4 A Actually it was in reference to a different call,

5 but, yes.

6 Q So we will not ask about that one.

7 Certainly you heard yesterday a tape recording of

8 a conversation you had with Frank Martin on January 20th,

9 1993?

10 A We had a marshal recording.

11 Q The tape ran out at the end; is that right?

12 A I mean we only heard parts of the tape.

13 Q You heard portions of it?

14 A Yes.

15 Q And you were questioned about portions of it?

16 A Yes.

17 Q And on that same date, January 20th, 1993, did you

18 have another conversation with another employee or

19 ex-employ of Who's Who Wo rldwide?

20 A Yes, I believe so, yes.

21 Q A woman by the name of Regina?

22 A I believe so.

23 Q And was that a transcript you reviewed before coming
24 here?
25 A No, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4882
Watstein-cross/Trabulus


1 Q You were not shown that transcript?

2 A I did not review it, nor was I shown a copy of that

3 transcript.

4 Q Were you ever shown a copy of that transcript?

5 A Not to the best of my recollection.

6 Q Was that transcript one of the 61 you spoke about?

7 A No, sir.

8 Q So, there were more tape recordings you made beside

9 the 61 that you testified to?

10 A I can't answer that question with a yes or no.

11 Q Well, you testified that there were 61 tape

12 recordings you made; is that right?

13 A Of current Who's Who Worldwide salespeople.

14 Q Were there more tape recordings that you made in

15 relation to Who's Who Worldwide besides the 61?

16 A They are tape recordings made at the Garden City

17 Hotel on two separate occasions. And there were multiple

18 interviews in those two tape recordings, so it depends on

19 how you defined your term, sir.

20 Q Aside from those and the 61, were there any others

21 made by you?

22 A Of Who's Who Worldwide?

23 Q Yes.
24 A Not to the best of my recollection.
25 Q Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4883
Watstein-cross/Trabulus


1 Now, this woman, Regina, do you recall if you

2 spoke to her after or before your interview with

3 Mr. Martin?

4 A I don't have a clear recollection of that

5 conversation, sir.

6 Q Was she someone who had been referred to you by

7 Mr. Martin?

8 A I don't h ave a clear recollection of that, sir. This

9 goes back several years ago.

10 Q When you spoke to Mr. Martin in the tape recorded

11 conversation, was that the first time you ever spoke to

12 Mr. Martin?

13 A Yes, sir.

14 Q You had not spoken to him on the telephone before

15 that?

16 A That is correct, sir.

17 Q And you had spoken to his wife before that, is that

18 how you set up -- excuse me, he had spoken to your wife

19 before that and that's how the interview was set up?

20 A That's correct, sir.

21 MR. TRABULUS: Your Honor, I would offer

22 Defendant's Exhibit GA, a tape recording of the

23 conversation with Regina.
24 THE COURT: George Abel, GA?
25 MR. TRABULUS: GA, yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4884
Watstein-cross/Trabulus


1 I have Exhibit GAA, which is a transcript, a

2 portion of the transcript of that tape recording, which I

3 will offer to the jury as an aid. This transcript was

4 actually supplied to me by the government.

5 THE COURT: Any objection?

6 MR. WHITE: Judge, may I have a moment to

7 actually review this transcript?

8 THE COURT: Surely.

9 What is the date of that recording?

10 MR. TRABULUS: January 20th, 1993.

11 MR. WHITE: Your Honor, it is going to take me a

12 couple of minutes to review it? Do you want to take the

13 break early, or I will read it as quickly as possible.

14 THE COURT: All right.

15 We will take a ten-minute recess. Do not discuss

16 the case, and please recess yourselves.

17 (Whereupon, at this time the jury leaves the

18 courtroom.)

19

20 (Whereupon, a recess is taken.)

21

22

23
24
25

HARRY RAPAPORT, CSR, CP, CM O FFICIAL COURT REPORTER
4885
Watstein-cross/Trabulus


1 (The following takes place in the absence of the

2 jury.)

3 THE COURT: Did someone want to see me?

4 MR. WHITE: Yes, with respect to the tape, I have

5 no objection to the tape being received in evidence. But

6 only that instead of two pages being taken out of context,

7 I ask that the full transcript go to the jury. The full

8 tape is coming in, the full transcript should go in as

9 well.

10 MR. TRABULUS: I was only going to play what is

11 reflected on this transcript. If Mr. White wishes to play

12 and afford the entire transcript, he can do that.

13 THE COURT: All right.

14 MR. NELSON: Objection to that. There are

15 portions of the tape referring to my client. He is not an

16 employee of the company at this time. He is not working

17 for the company at that point in time. So it wou ld not be

18 admissions by him. It is not a co-conspirator statement

19 made at that time. So it is not the basis of somebody

20 else's statement.

21 I have no objection to this portion coming in.

22 But to the government seeking certain portions, I do have

23 objections to.
24 THE COURT: You say your client is on this tape?
25 MR. NELSON: There are discussions about my

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4886
Watstein-cross/Trabulus


1 client. This is another former employee of Who's Who

2 Worldwide who is interviewed on the same date that my

3 client was interviewed, January 20th, 1993. Neither of

4 them were employees of Who's Who Worldwide at the time.

5 My client doesn't speak on that tape, but there are

6 discussions on it about my client by this other person.

7 THE COURT: Is that what is in this transcript?

8 MR. TRABULUS: Mr. Nelson is not objecting to the

9 portion I am wishing to introduce. There are references

10 to his client, but just simply to indicate that he

11 introduced Regina, the person being interviewed to

12 Mr. West, and also Mr. West paraphrased something on the

13 tape which was played yesterday spoken by Mr. Martin. It

14 is a reasonably accurate paraphrase.

15 So, I gather Mr. Nelson is not objecting to

16 that. I have not focussed on the rest of the transcript.

17 THE COURT: Is this a transcript of one telephone

18 conversation?

19 MR. TRABULUS: No. It is an in-person meeting.

20 I am offering an excerpt of that conversation.

21 THE COURT: This is an in-person meeting?

22 MR. TRABULUS: Yes.

23 THE COURT: The in-person meeting was with all
24 these people?
25 MR. TRABULUS: No, your Honor, these were the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4887
Watstein-cross/Trabulus


1 different names Mr. West used in his various

2 conversations.

3 The cover sheet is a government prepared form.

4 And it lists the name of the confidential informant --

5 actually not his real name, just his various aliases and

6 it says Regina, L N U, for last name unknown. So there

7 are two participants in the conversation.

8 THE COURT: It is Regina and Mr. Watstein?

9 MR. TRABULUS: That's correct.

10 THE COURT: This is an in-person conversation?

11 MR. TRABULUS: That's correct.

12 THE COURT: The transcript, which is

13 Defendant's Exhibit GAA, you say, and that would not be

14 very wise. I would say GA-1?

15 MR. TRABULUS: All right.

16 THE COURT: GA is the tape and GA-1 would be the

17 transcript.

18 MR. TRABULUS: All right.

19 THE COURT: The government wan ts to offer the

20 rest of the tape recording, not transcripted.

21 MR. TRABULUS: It is, but I have not made a copy

22 of the transcript.

23 THE COURT: What part of the transcript are you
24 objecting to, Mr. Nelson? Can I see it?
25 MR. NELSON: I have not reviewed the remainder of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4888
Watstein-cross/Trabulus


1 the transcript, but there are discussions concerning my

2 client.

3 THE COURT: If the discussions say your client

4 received the congressional meddle of honor with two oak

5 leaf clusters, you would not object to that, would you?

6 MR. NELSON: Of course not.

7 THE COURT: What part of the transcript is

8 objectionable.

9 MR. NELSON: I reserve my objection until after

10 the lunch recess, your Honor, for the remainder coming

11 in. And I will review it during the lunch recess.

12 MR. WHITE: To be clear the part that

13 Mr. Trabulus is offering contains a reference to

14 Mr. Martin.

15 THE COURT: Mr. Trabulus said that already, and

16 he said it is an accurate reference, and Mr. Nelson has no

17 objection to that.

18 MR. NELSON: Yes.

19 THE COURT: We will reserve on the rest of the

20 transcript later on.

21 Bring in the jury.

22 MR. WHITE: I assume Mr. Trabulus wants to

23 question Mr. Watstein about the tape. There may be parts
24 earlier in the tape providing context to what Mr. Trabulus
25 wishes to offer.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4889
Watstein-cross/Trabulus


1 THE COURT: Then we will lose that context. So

2 what?

3 MR. WHITE: I am sorry, your Honor?

4 THE COURT: So what?

5 MR. WHITE: What if he asks about something and

6 M r. Watstein needs to explain.

7 THE COURT: We will see. Why jump ahead of the

8 game.

9 MR. WHITE: Okay.

10 THE COURT: I was told when I appeared before the

11 United States Senate Judiciary Committee not to decide

12 things that are not before me. Did you understand that

13 principle?

14 MR. WHITE: I do, your Honor.

15 THE COURT: Bring in the jury.

16 THE CLERK: Jury entering.

17 (Whereupon, the jury at this time entered the

18 courtroom.)

19 THE COURT: Please be seated, members of the

20 jury.

21 We took more than ten minutes because we had to

22 discuss certain things. You know that we use some of this

23 time to discuss evidentiary matters which are not for your
24 consideration.
25 You may proceed, Mr. Trabulus.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4890
Watstein-cross/Trabulus


1 Government's Exhibit GA, George Abel, and GA-1,

2 George Abel 1, to the extent we have discussed it, is in

3 evidence; is that correct?

4 (Defendant's Exhibit GA received in evidence.)

5 (Defendant's Exhibit GA-1 received in evidence.)

6 MR. TRABULUS: Your Honor, yes. I have actually

7 listed the transcript as a defense exhibit, I put the

8 sticker on it. I guess it can be a government's.

9 THE COURT: Did I say government's?

10 Defendant's Exhibit GA and

11 Defendant's Exhibit GA-1, are in evidence.

12 MR. TRABULUS: I am handing GA-1 to the jury, I

13 chose the terminology, unfortunately as GAA, but it is

14 GA-1.

15 THE COURT: All right.

16 (Whereupon, the exhibit/exhibits were published

17 to the jury.)

18 THE COURT: It is not an unwise choice,

19 Mr. Trabulus. I prefer my way.

20 Did you ever hear that song by Frank Sinatra, My

21 Way?

22 MR. TRABULUS: I believe so.

23 THE COURT: Very appropriate for judges, I
24 thought.
25 MR. TRABULUS: I would agree, your Honor.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4891
Watstein-cross/Trabulus


1

2 CROSS EXAMINATION

3 BY MR. TRABULUS:

4 Q Mr. West, are you reading this?

5 A Yes.

6 Q And Regina came in for a job?

7 A Yes.

8 Q And the same ad placed by people to work?

9 A Yes.

10 Q And you were posing to hire someone working for a

11 Who's Who business; is that correct?

12 A That's correct.

13 MR. TRABULUS: Okay, we will play the tape.

14 THE COURT: This is January 20th, 1993?

15 MR. TRABULUS: That's correct.

16 (Tape is played.)

17 Q Mr. West, that's an extract from your conversation

18 with Regina; is that correct?

19 A Yes, sir.

20 Q And you recall that; is that right?

21 A Yes, sir.

22 Q Now, in that conversation you didn't ask Regina in so

23 many words what percentage of people were nominated by
24 other members as opposed to coming from a mailing lead,
25 did you?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4892
Watstein-cross/Trabulus


1 A I --

2 Q Yes or no, sir.

3 A I am sorry, I need to have my memory refreshed of the

4 whole conversation, if that is possible, at least the

5 transcript of it.

6 Q Now, do you think you did earlier on --

7 A I don't want to hazard a guess about a conversation.

8 Q Excuse me. Do you recall Regina refusing to answer

9 any questions of yours?

10 A I don't have any recollection of that one way or

11 another, sir.

12 Q Is this something you had to goad her and pressure

13 her to answer the que stion?

14 A Sir, I don't mean to be disrespectful, you have given

15 me part of a conversation that goes back many years ago --

16 Q You will have an opportunity to review the entire

17 conversation, but right now answer my question.

18 Do you recall if Regina was refusing to give

19 information?

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

21 Q Do you recall that the portion that I just played to

22 you said one last question?

23 A That's what it says, yes.
24 Q And do you recall, you didn't say I am going to ask
25 you about something we talked about before? Do you recall

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4893
Watstein-cross/Trabulus


1 you didn't say that?

2 A In what you just played, yes, that's correct.

3 Q And do you recall without going into it in great

4 detail -- were you present in the courtroom when there wa s

5 a conversation out of the presence of the jury before the

6 Judge?

7 A Yes, sir.

8 Q And there was some conversation whether the entire

9 conversation would be played, and whether the entire

10 transcript would be made available to the jury; is that

11 correct?

12 A Yes.

13 Q And you listened to that; is that correct?

14 A Not totally, sir.

15 Q You heard Mr. White say that it was his position that

16 he wanted the entire -- that there might be a need for you

17 to answer something in context, and in that event you

18 should have the entire thing --

19 A I heard Mr. White say that.

20 Q You took up on that, right?

21 A I listened to what Mr. White said, yes.

22 Q Immediately after I asked you that question, you said

23 you wanted to hear the entire thing played; is that right?
24 A That's my response, sir, yes.
25 MR. T RABULUS: At this point, I would suggest

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4894
Watstein-cross/Trabulus


1 that what we do is have Mr. West alone listen to the

2 entire tape.

3 THE COURT: Right now?

4 MR. TRABULUS: Yes, he said he needs to refresh

5 his recollection.

6 THE COURT: No. We will complete everything else

7 except this, and during the lunch hour he will do that.

8 How much more of this transcript is there? How

9 many pages? If it is only a few pages, okay.

10 MR. TRABULUS: I think about nine or ten.

11 MR. WHITE: The total is 11 pages.

12 THE COURT: The total is 11, and we have looked

13 at two, right?

14 MR. WHITE: Right.

15 MR. TRABULUS: Right.

16 THE COURT: So there are nine pages left?

17 MR. TRABULUS: Yes.

18 THE COURT: We will let him take a look at it.

19 It is not a lo t.

20 MR. TRABULUS: Thank you, your Honor.

21 THE COURT: Do you want to show it to him?

22 MR. TRABULUS: Do you have a copy?

23 THE COURT: Do you want to staple that together?
24 MR. TRABULUS: Yes.
25 THE COURT: Do you want to peruse that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4895
Watstein-cross/Trabulus


1 transcript, Mr. Watstein, and see if there is anything in

2 there relating to the questions that you were just asked.

3 A Sure.

4 (Transcript handed to the witness.)

5 THE COURT: You better mark the transcript,

6 Mr. Trabulus.

7 MR. TRABULUS: Sure.

8 THE COURT: Perhaps you ought to mark it GA-2.

9 MR. TRABULUS: Okay.

10 THE COURT: And that's the full transcript. And

11 that is for identification.

12 (Defendant's Exhibit GA-2 marked for ID.)

13 THE COURT: Have you read the transcript?

14 THE WITNESS: Just one more second, sir. I am on

15 the last page.

16 THE COURT: All right.

17 (Whereupon, at this time there was a pause in the

18 proceedings.)

19 A Yes, sir.

20 Q Now, Mr. West, is it correct that the first point at

21 which the subject of nomination comes up is in the point

22 which was played to you on the tape?

23 A I think that's correct, sir.
24 Q And you were the one who brought the subject up; is
25 that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4896
Watstein-cross/Trabulus


1 A Yes, sir.

2 Q And you did not ask Regina what percentage of people

3 were nominated by other members, and what percentage came

4 from mailing leads, did you?

5 A I did not ask that question, yes, sir.

6 Q Now, what you did was -- withdrawn.

7 You had discussed with her, and you let her know

8 that Frank had sent her in?

9 A Yes.

10 Q Is that correct?

11 A That is correct.

12 Q And then Frank in a sense was responsible for her

13 getting this job interview; is that correct?

14 A That is correct.

15 Q And then you told her something that Frank says; is

16 that correct?

17 A Yes.

18 Q And you certainly would not, in doing that, expect

19 her then to say something contradictory to what Frank

20 said; is that correct?

21 A Not necessarily, I don't necessarily agree with that

22 statement.

23 Q Is it fair that you expected her to agree as to what
24 Frank said concerning the percentage when you asked that
25 question?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4897
Watstein-cross/Trabulus


1 A I had the expectancy, sir, but I wasn't certain.

2 Q All right.

3 Now, s he then explained to you that in all

4 fairness to Bruce and his company, he did make it clear at

5 one point that he didn't want people actually thinking

6 that they were nominated?

7 A What page are you not, sir?

8 Q Page 7, at the top.

9 A Yes, sir.

10 Q And you took that to mean, I assume that he made it

11 clear that he didn't want people to actually think that

12 they had been nominated by another member; is that

13 correct?

14 A No, I didn't take it to be that, sir.

15 Q And did you follow up on that by asking her in what

16 respects he didn't want people thinking that they were

17 nominated?

18 A I don't see a follow up question there.

19 Q Did you ask whether or not the sales presentation

20 that was prepared by Mr. Gordon and submitted to the

21 salespeople to use, contained within it a statement that

22 the person being spoken to had been nominated by another

23 member? Did you ask that?
24 A I don't see that explicit question here, no.
25 Q Did you ask whether -- withdrawn.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4898
Watstein-cross/Trabulus


1 You are familiar with the term "objection sheet"?

2 A Yes.

3 Q Are you not?

4 A Yes.

5 Q An objection sheet is not part of the main sales

6 presentation?

7 A It is called a catalogue of objections, yes.

8 Q And it is something that is customarily used in phone

9 sales to deal with questions that may or may not arise

10 during the course of a sales presentation; is that

11 correct?

12 A Actually barriers as opposed to questions.

13 Q Things that may be stated by a potential customer

14 which might seem to be some kind of impediment to the sale

15 being consummated; is that correct?

16 A Yes, sir.

17 Q And did you ask this woman, Regina, whether or not

18 any of the objection sheets that were prepared and used in

19 the Who's Who Worldwide, for use in response to a

20 question, who nominated me or something like that, did you

21 ask her whether any of those said that the person -- that

22 the salesperson was to say that another member had

23 nominated the person being spoken to?
24 A I did not ask that question, sir.
25 Q Did you is -- did you ask this woman whether or not

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4899
Watstein-cross/Trabulus


1 any members of the sales staff had been falsely accused of

2 stealing?

3 A No, sir.

4 Q Did you ask her whether any of them had been

5 threatened with being falsely accused of stealing?

6 A No, sir.

7 Q At the time of this conversation you were aware, w ere

8 you not, that there had been some turn over; is that

9 correct?

10 A Yes, sir.

11 Q And now that you have reviewed this, you know that

12 you had spoken to Mr. Martin before you spoke to Regina;

13 is that correct?

14 A That is correct.

15 Q And Mr. Martin himself told you there had been some

16 turn over and people left; is that right?

17 A Yes, sir.

18 Q And you didn't -- withdrawn.

19 At the point in which you spoke to Regina, did

20 you have pressure in your mind your conversation with

21 Mr. Gordon in which you claimed that he told you that he

22 was going to falsely accuse salespeople of stealing from

23 him if they gave him a hard time? Did you have that fresh
24 in your mind by that time?
25 A By fresh in my mind, how do you define that?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4900
Watstein- cross/Trabulus


1 Q I will withdraw the question.

2 A Okay.

3 Q You didn't ask this woman whether or not that was

4 what was happening in the business, that people were being

5 falsely accused of stealing when they left?

6 A No, sir.

7 Q Now, when this Regina said that Bruce made it clear

8 at one point, that he didn't want people actually thinking

9 that they were nominated, what you did is say that that

10 was later on, correct?

11 A Yes, that is correct.

12 Q And you wanted to create the impression that there

13 was some period of time when Bruce did, or the company did

14 want to make it look that people were being nominated by

15 other members?

16 A I can't answer that question with a yes or no, sir.

17 It is not an accurate question.

18 Q You didn't ask any follow ups concerning that?

19 A Would you rephrase that?

20 Q You didn't ask any follow up questions concerning

21 that, did you?

22 A I did ask a follow up question as you see here.

23 That's the question you just asked me about.
24 Q That was not a question. That was a statement by
25 you; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4901
Watstein-cross/Trabulus


1 A It was a rhetorical statement, yes.

2 Q And then you dropped the entire subject and moved on

3 to your hiring time table; is that correct?

4 A When she answered my question, yes, sir.

5 Q Now, it is your testimony that in the course of

6 conducting these interviews, you were not looking

7 specifically for things that were incriminatory; is that

8 correct?

9 A That is correct.

10 Q And that you were attempting to be fair to the

11 company, to Mr. Gordon; is that correct?

12 A I think that's an accu rate statement, yes.

13 Q That's what you believe you were attempting to be; is

14 that correct?

15 A Yes, sir.

16 Q Now, going back to this conversation you had with

17 Mr. Gordon in which you threatened to sue him, in

18 connection with that, you didn't call the postal

19 inspectors to make a complaint about Mr. Gordon and his

20 business, did you?

21 A No, sir.

22 Q Now that would have been -- at that point in time did

23 you perceive that you were in your own business doing
24 something which was unlawful?
25 A No.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4902
Watstein-cross/Trabulus


1 Q You did not?

2 A No.

3 Q Okay.

4 You thought at that point in time what you were

5 doing lawful and you didn't commit a crime?

6 A I didn't give the term "lawful" any thought at that

7 period of time.

8 Q Is it fair to say that you felt at that point in time

9 the conduct of your business was not violating any law?

10 A Yes, sir.

11 Q And you were not afraid that if you contacted the

12 postal inspectors, that the postal inspectors -- you would

13 be drawing attention to your business and it might be

14 subject to a criminal prosecution?

15 A That is correct.

16 Q And the fact that you didn't call the postal

17 inspectors on Mr. Gordon, that doesn't mean that you

18 yourself was afraid of being looked at by the postal

19 inspectors?

20 A Would you rephrase? I don't understand your

21 question.

22 Q I will withdraw it.

23 A Thank you.
24 Q Let's talk about how you first got into Who's Who.
25 Before you opened up your business, Who's Who in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4903
Watstein-cro ss/Trabulus


1 American Business Leaders was it?

2 A U.S. Executives.

3 Q I am sorry, I misspoke.

4 Before you opened up Who's Who in American

5 executives, were you ever falsely involved in American

6 Who's Who activity?

7 A Yes.

8 Q What Who's Who activity was that?

9 A In the winter or late -- the end of the year 1997.

10 Q '87?

11 A Yes, '87. I did a test mailing to see if a concept

12 would be palatable. And that mailing pre-dates the actual

13 incorporation of the company.

14 Q All right, let's go back to that test mailing.

15 Before that test mailing had you yourself ever

16 worked in any Who's Who business?

17 A No, sir.

18 Q Had you yourself ever had any involvement in a Who's

19 Who business, even if you weren't an employee?

20 A No, sir.

21 Q Had you yourself ever been nominated, or recommended

22 or included or offered in inclusion in any Who's Who?

23 A It's possible, but I don't have any clear
24 recollection as to that.
25 Q How did the idea -- withdrawn.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4904
Watstein-cross/Trabulus


1 Did somebody suggest to you you get into the

2 Who's Who business?

3 A Not to the best of my recollection.

4 Q Was that something you thought of yourself?

5 A I believe so, yes.

6 Q And you already testified you are a well educated

7 guy, you went to the Wharton School of Finance; is that

8 correct?

9 A Yes.

10 Q And that's a well and prestigious school; is that

11 correct?

12 A Yes, sir.

13 Q Did you do research before you did your test mailing

14 of the Who's Who industry?

15 A I don't know if research is a correct term, but I did

16 some kind of preparation.

17 Q What kind of preparation did you do?

18 A My best recollection going back eleven years ago, I

19 determined the name was in the public domain and no one

20 company owned the name Who's Who.

21 Q You researched that it was lawful -- withdrawn --

22 that anybody could use the term "Who's Who"; is that

23 correct?
24 A That's my understanding at that time.
25 Q Did you do anything else by way of researching it?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4905
Watstein-cross/Trabulus


1 A Not that I have a clear recollection.

2 Q Did you try to find out anything about the way other

3 companies that published Who's Whos operated?

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

5 Q Were you familiar at that point in time with Who's

6 Who in America?

7 A Vaguely, yes.

8 Q Had you ever seen a Who's Who in Ame rica?

9 A Yes, sir.

10 Q Did you ever know anybody included in Who's Who in

11 America?

12 A Probably. I don't have any clear recollection of

13 that.

14 Q Did you know anything about the process by which

15 Who's Who in America got the names of people who were

16 listed in Who's Who?

17 A You are referring to 1987?

18 Q Back then. We are going to get to later, later. But

19 I want to get back to when you first started out.

20 A Sure. Not to my best recollection, no.

21 Q Now, were you aware at the time there were many

22 different Who's Whos?

23 A No.
24 Q Were you aware that the company who published Who's
25 Who in America had other Who's Who publications?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4906
Watstein-cross/Trabulus


1 A Yes.

2 Q Were you aware if there were not many Who's Who,

3 there was at least more than one Who's Who; is that

4 correct?

5 A Yes.

6 Q Were you aware that there were other Who's Whos

7 published, besides those published by the company who

8 printed Who's Who in America?

9 A Not to the best of my knowledge in 1987, but soon

10 thereafter.

11 Q Now, when you did the test marketing, that was a

12 mailing; was it not?

13 A Correct.

14 Q Where did you get the names and addresses of the

15 people you mailed to?

16 A I don't have a clear recollection, sir.

17 Q Was it a mailing list?

18 A Yes.

19 Q And had you previously been involved in businesses in

20 which there were mailing lists used by you?

21 A Yes, sir.

22 Q Is it fair to say in your work history you had had a

23 considerable experience of direct mail marketing?
24 A Yes, sir.
25 Q Now, the test marketing you did in 1987, did that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4907
Watstein-cross/Trabulus


1 consist of sending a bunch of solicitation letters to

2 people inviting them to be included in a Who's Who?

3 A In substance, yes.

4 Q And do you recall what Who's Who that was?

5 A I think we called it American Executives.

6 Q And was that test marketing successful in your

7 judgment?

8 A Sufficiently successful to continue the concept, yes,

9 sir.

10 Q Now, when you continued the concept, you continued it

11 with several different Who's Whos?

12 A Eventually.

13 Q And it was your plan at that point in time to utilize

14 mailing lists as a source of people; is that correct?

15 A At what point in time are you at, sir?

16 Q I will try to progress chronologically. So if there

17 is an ambiguity in my question point it out to me, but

18 that's basically where I am going.

19 Right after your test marketing was successful,

20 your test mailing was successful, did you make a plan to

21 market Who's Whos?

22 A Yes, sir.

23 Q At that point was it just one Who's Who you were
24 going to market or a bunch?
25 A One, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4908
Watstein-cross/Trabulus


1 Q That's the one in U.S. Executives?

2 A American Executives.

3 Q Did you do that, sir?

4 A Yes.

5 Q American Executives?

6 A Yes.

7 Q And did you rent space for that purpose?

8 A No, sir.

9 Q Did you hire people for that purpose?

10 A Eventually.

11 Q At that point in time were you planning to have

12 in-person telephone -- withdrawn.

13 Was it your plan at that point in time to have

14 telephone interv iews following the solicitation letter?

15 A What point in time are you at, sir?

16 Q The very beginning when you first started out, after

17 the test mailing?

18 A No.

19 Q And at that point everything was to be done by mail?

20 A That was my original thinking, yes.

21 Q And at a certain point in time you decided to have an

22 interview process as well; is that correct?

23 A That is correct.
24 Q And is that the point in time you hired people?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4909
Watstein-cross/Trabulus


1 Q And at that point in time did you rent space for

2 them?

3 A No, sir.

4 Q Did the people work out of their homes at that point

5 in time?

6 A No, sir.

7 Q Where did they work?

8 A At 98 Cutter Mill Road.

9 Q You already had the space?

10 A Yes, si r.

11 Q That's a commercial building?

12 A Yes, sir.

13 Q And you had the space in connection with another

14 business you were operating?

15 A That's correct.

16 Q How many people did you hire initially?

17 A I think there were four or five initially.

18 Q And throughout, it was your plan to utilize mailing

19 lists to get names; is that correct?

20 A That is correct.

21 Q And you did so?

22 A Yes, sir.

23 Q Now, the mailing lists you got, were they somewhat
24 selective?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4910
Watstein-cross/Trabulus


1 Q Can you explain the respects in which they were

2 selective?

3 A A person who was attempting to do a direct mail

4 campaign would normally utilize mailing lists that at

5 least seem to be consistent with the audience you are

6 trying to reach. That, however, is not always the case.

7 As an example, we used Forbes magazines. And it

8 is possible that a student could subscribe to Forbes

9 magazine. Therefore we tested many different lists at

10 various levels of success and various levels of accuracy.

11 We even found at one time there was a name of a

12 dog who subscribed to one of the magazines and was in our

13 mailings at Who's Who.

14 Q Had you ever heard that a dog managed to get into

15 Who's Who in America? Did you learn that along the way?

16 A Got into one of the Who's Whos.

17 Q One of the Marquis Who's Who?

18 A I don't know which one he got into.

19 Q You can continue your answers in terms of the

20 selectivity.

21 A Many lists were utilized, including Dun & Bradstreet,

22 many legal directories, accounting directories, there is a

23 data base called Chilton, C H I L T O N, a magazine
24 publisher, a company called Cahners, C A H N E R S, we
25 utilized the American Association of female executives,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4911
Watstein-cross/Trabulus


1 and we learned from that list that many of the people in

2 that list in fact were not as represented, junior in

3 position. Many lists were utilized. We attempted to do

4 key coding, which is to determine the rate of response

5 from each mailing list.

6 Q Did you attempt to make your lists as selective as

7 possible within the parameters that you attempted to

8 target?

9 A Yes, for selfish and commercial reasons, yes, sir.

10 Q You didn't want to be sending -- you didn't want to

11 be wasting mail by sending it to people who would not be

12 interested or suitable for what you were doing; is that

13 correct?

14 A That is correct, sir.

15 Q At some point you branched beyond Who's Who in

16 American Executives, and you had other Who's Whos focussed

17 toward specific groups; is that correct?

18 A That is correct, sir.

19 Q One was Who's Who in law Enforcement; is that

20 correct?

21 A Yes.

22 Q And another was Who's Who in Government?

23 A Yes.
24 Q And Who's Who in practicing attorneys?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4912
Watstein-cross/Trabulus


1 Q I think you called it Steven's Who's Who in

2 Practicing Attorneys?

3 A We did it at a time to differentiate from other Who's

4 Whos.

5 Q In connection with your plan to sell the Who's Who

6 for these people, did you ever have a plan for other kind

7 of commercial ventures related to Who's Who?

8 A Would you define that.

9 Q A sales catalogue.

10 A What time span?

11 Q I am trying to go chronologically. So I am trying to

12 go to the time you are branching out. You are now having

13 a Who's Who in Law Enforcement, a Who's Who in Practicing

14 Attorneys, Who's Who in Government?

15 A Yes, sir.

16 Q Did all those three come at the same time?

17 A I don't have a recollection. A similar time period.

18 Q Around that time period were you planning to have

19 related ventures to the Who's Who?

20 A Yes, sir.

21 Q And those would be the sale of merchandise?

22 A That was one of them, yes.

23 Q What were some of the others?
24 A Some of the others were providing a broad array of
25 services to the members, including the securing of venture

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4913
Watstein-cross/Trabulus


1 capital, the securing of job opportunities, teaching them

2 how to be able to publish their own book, showing them how

3 to be able to earn money by doing speaking engagements,

4 and being able to earn both compensation and perform a

5 worth while service at the same time.

6 Q Is it fair to say at that point in time you sincerely

7 intended to fulfill those objectives?

8 A Yes, sir.

9 Q And at that point in time you did not intend to

10 defraud anyone; is that correct?

11 A Yes, sir.

12 Q Indeed, one of the Who's Who you targeted was Who's

13 Who in Law Enforcement?

14 A Yes.

15 Q And if you were setting out to what you perceived in

16 your mind to be a scheme to defraud, you would not

17 certainly select among all people a group of law

18 enforcement people; is that correct?

19 A Yes, sir.

20 Q And also at that point in time you also had Who's Who

21 in Practi cing Attorneys?

22 A Somewhere around that time period, sir.

23 Q Certainly you are aware that attorneys may be, not
24 necessarily, but may be not the most gullible people in
25 the world?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4914
Watstein-cross/Trabulus


1 A It wouldn't be a proper adjective.

2 Q Attorneys are certainly a group of people who can

3 assert their rights and complain and would do that; is

4 that correct?

5 A Yes.

6 Q You would not have targeted them if at that point in

7 time you were conceiving in your mind that you were going

8 to operate a scheme to defraud; is that correct?

9 A Yes, sir.

10 Q And is it fair to say that you started out with good

11 objectives?

12 A Yes, sir.

13 Q Now, this was at a time when you were sending out

14 letters that said you have been nominated; is tha t

15 correct?

16 A Yes.

17 Q And indeed the letter said you were nominated by

18 another member, sir?

19 A Not at that time.

20 Q It said you were nominated?

21 A Yes.

22 Q And in the telephone conversations that your

23 salespeople had with these people, they would be telling
24 them that they would be nominated by another member; is
25 that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4915
Watstein-cross/Trabulus


1 A That is correct.

2 Q And you were aware of that; is that correct?

3 A Yes, sir.

4 Q And you did not -- in fact, all of the leads that you

5 got, all of them, were coming from mailing lists; is that

6 correct?

7 A No, sir.

8 Q You did try a nomination by other members briefly; is

9 that correct?

10 A That is correct.

11 Q And that was not very suc cessful; is that correct?

12 A That is correct.

13 Q And you didn't pursue that or attempt to develop it

14 or enlarge it, did you?

15 A Not aggressively, no.

16 Q And at this time when all this is happening, you did

17 not in your mind believe that you were acting with intent

18 to defraud; is that correct?

19 A At what time are you, sir?

20 Q Well, I will go back.

21 I was asking you some questions where you talked

22 about having good intentions, and you were planning to

23 develop related products. You were planning to sell the
24 Who's Who. You were targeting law enforcement people,
25 practicing attorneys.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4916
Watstein-cross/Trabulus


1 At that point in time, sir, you were utilizing

2 mailing lists; is that correct?

3 A Yes, sir. The time period you mentioned is e arly

4 1990. That's where we are right now.

5 Q And you were not advising the people being targeted

6 by you that they were -- that their names had come from a

7 mailing list; is that correct?

8 A Yes.

9 Q That is correct?

10 A Yes, sir.

11 Q So --

12 A In general.

13 Q And at that point in time you believe that you were

14 not engaged in a scheme to defraud; is that correct?

15 A In early 1990, that is correct, sir.

16 Q So, utilizing mailing lists, telling people they were

17 nominated, and not disclosing to them that their names

18 came from a mailing list, was something which you believed

19 does not necessarily mean a scheme to defraud; is that

20 correct?

21 A What tense are you using, sir?

22 Q Believed?

23 A In early 1990, that's an accurate statement in my
24 ignorance, yes.
25 Q That was your mental state at the time; is that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4917
Watstein-cross/Trabulus


1 correct?

2 A As of early 1990, correct.

3 Q You did not intend at that time to defraud anybody;

4 is that correct?

5 A That is correct.

6 Q Now, that is shown by the fact that you targeted law

7 enforcement people; is that correct?

8 A I believe so.

9 Q And practicing attorneys?

10 A Yes, sir.

11 Q And the other people you targeted, executives, they

12 are a fairly sophisticated group on the whole as well; is

13 that correct?

14 A In general, yes.

15 Q Now, I think that you mentioned at a certain point in

16 time financial difficulties set in; is that right?

17 A That is correct.

18 Q And that is when problems with delivering merchandise

19 and directories came about; is that correct?

20 A T hat's correct.

21 Q Now, your company was sued by Reed Elsevir; was it

22 not?

23 A That's my recollection, yes.
24 Q It is not something that is too hard to remember, is
25 it?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4918
Watstein-cross/Trabulus


1 A Yes, sir.

2 Q You were sued by Marquis; is that correct?

3 A It was not Reed Elsevir at that time, yes, sir.

4 Q Okay.

5 A Uh-huh.

6 Q And is that when the financial difficulties started

7 in?

8 A I don't think they were correlated, sir.

9 Q And you had financial difficulties beginning --

10 withdrawn.

11 Certainly being sued by Reed Elsevir did not

12 help, did it?

13 A Actually it wasn't a significant issue at that time.

14 Q You had legal fees, did you not?

15 A They were not significant at that time.

16 Q In any event, the financial difficulties you had was

17 not something of your own intent or plan; is that correct?

18 A That is correct.

19 Q And that is what put you in the position of taking

20 money from people and not delivering; is that correct?

21 A No.

22 MR. GEDULDIG: Judge, can we have a time frame as

23 to what time we are talking about now?
24 MR. TRABULUS: Sure.
25 Q When did the financial difficulties set in, sir?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4919
Watstein-cross/Trabulus


1 A In mid-to late 1989.

2 Q In 1990 as you indicated you had sincere plans, and

3 you were delivering, and you were not acting with intent

4 to defraud at the time?

5 A Which part of 1990?

6 Q The time in which you said, quite early in 1990, the

7 time that you had the Who's Who of law enforcement, the

8 time you were planning to sell merchandise, teach people

9 how to write books, obtain venture capital for people whom

10 you described as members. At that point in time, sir, you

11 did not have intent to defraud, sir?

12 A In my ignorance, that's true.

13 Q At the time you were not trying to defraud anybody?

14 You didn't believe you were?

15 A In my mind set, correct, at that time and point in

16 space.

17 Q And that's the time -- that's the time at which your

18 intent would be measured if you were to be judged for what

19 you were doing at that time; is that correct?

20 A Intent for that period of time, yes, sir.

21 Q Now, later on you had these financial difficulties,

22 sir; is that correct?

23 A Yes, sir.
24 Q And the financial difficulties resulted in
25 merchandise not being delivered; is that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

4920
Watstein-cross/Trabulus


1 A To some extent.

2 Q It resulted -- your business had a catalogue, did it

3 not?

4 A Yes, sir.

5 Q And is this Defendant's Exhibit AO?

6 (Handed to the witness.)

7 Q Excuse me, I am showing you AO. Is this one of the

8 catalogues that your company distributed?

9 A Yes, sir.

10 Q And this --

11 MR. TRABULUS: I would offer AO in evidence, your

12 Honor.

13 THE COURT: Any objection?

14 MR. WHITE: I just need to see it, your Honor.

15 (Document handed to Mr. White.)

16 MR. WHITE: No objection.

17 THE COURT: Defendant's Exhibit AO, Abel Oboe, in

18 evidence.

19 (Defendant's Exhibit AO received in evidence.)

20 Q Mr. West, there were various items of merchandise in

21 that, that were offered for sale to people?

22 A That is correct.

23 Q And they weren't just offered f or sale to people who
24 were in your Who's Whos; is that correct?
25 A That is correct.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4921
Watstein-cross/Trabulus


1 Q They were offered for sale to people in a broader

2 group; is that correct?

3 A Yes.

4 Q If they bought they would then be solicited by your

5 company?

6 A Not necessarily.

7 Q Some of them would be?

8 A Not necessarily.

9 Q Now, after your financial difficulties ensued, then

10 there came problems in delivering the merchandise?

11 A There was not extensive problem with the merchandise.

12 Q Is there not a potential problem where you failed to

13 order from your suppliers and failed to take money?

14 A Not extensively.

15 Q Did it happen?

16 A It happened, yes.

17 Q Were there numerous complaints by people ordering

18 merch andise that were not being delivered?

19 A Numerous is not accurate, sir.

20 Q There were complaints concerning directories that

21 weren't being published?

22 A That is correct.

23 Q And is it correct that after the first of several
24 search warrants was executed, you rushed to get certain
25 directories in print, that hadn't been in print before

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4922
Watstein-cross/Trabulus


1 that?

2 A It is correct, we used every effort we could to get

3 them in print, yes. Rushed would not be a proper phrase.

4 Q Now, there came a point in time when you were

5 arrested and charged; is that correct?

6 A Yes, sir.

7 Q You pled guilty to various crimes I will not go over

8 in detail, such as mail fraud, mail fraud involving an

9 insurance company, tax fraud, also filing a false

10 sta tement with the postal authorities; am I correct?

11 A Yes, sir.

12 Q And besides those crimes do you believe you committed

13 any others in connection with this?

14 A No, sir.

15 Q You didn't commit perjury?

16 A No, sir.

17 Q So, when you were called upon to testify -- were you

18 called upon to testify in the case that Reed had brought?

19 A I don't believe I was a witness. I don't have a

20 recollection as to that.

21 Q Do you recall whether you were called upon to testify

22 as to whether or not you used mailing lists?

23 A I don't have a recollection of that.
24 Q In the course of that did you learn that Reed Elsevir
25 or Marquis used mailing lists?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4923
Watstein-cross/Trabulus


1 A It was my understanding they used mailing lists. Not

2 in the course of that, but in the general concept, yes.

3 Q You came to learn that?

4 A Yes.

5 Q And they would also tell people they were nominated,

6 although the name came from a mailing list?

7 A To the best of my recollection, yes.

8 MR. NEVILLE: I am sorry, is that yes?

9 THE COURT: Yes.

10 THE WITNESS: To the best of my recollection,

11 yes.

12 MR. NEVILLE: Thank you.

13 Q Did the government, did Mr. Biegelman ever ask you to

14 participate in an undercover investigation of Marquis

15 Who's Who?

16 A No, sir.

17 Q Did you ever relate to him that the investigation of

18 Marquis Who's Who also uses mailing lists, and also tells

19 people they were nominated?

20 A My attorney may have related that to him. I don't

21 have a recollection of doing that.

22 Q Did you instruct your attorney to relate it to him?

23 A If he did so, it would be with my i nstructions.
24 Q In any event, do you recall instructing your attorney
25 to do that?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4924
Watstein-cross/Trabulus


1 A I don't have a clear recollection, sir.

2 Q And in your efforts to cooperate and render as much

3 assistance as you could, did you suggest to Inspector

4 Biegelman that perhaps you can do an undercover

5 investigation of Marquis Who's Who?

6 A I don't have a recollection of that.

7 Q Is it your recollection that you did not?

8 A I think so, but it is not clear.

9 Q Did you discuss with your attorney before as to

10 whether you should?

11 A No, sir.

12 Q Did anyone suggest to you that you should not?

13 A No, sir.

14 Q Did Mr. Biegelman himself ever tell you that he

15 himself met with representatives of Reed Elsevir?

16 A No, sir.

17 Q Did anybody ever tell you that Mr. Biegelman met with

18 representatives of Reed Elsevir?

19 A No, sir.

20 Q Did anybody ever tell you that it would be pointless

21 to suggest to Inspector Biegelman or any of the postal

22 inspectors to do an undercover investigation of Marquis

23 Who's Who because the postal inspectors simply wouldn't do
24 it?
25 A I believe I had a conversation with my attorney about

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4925
Watstein-cross/Trabulus


1 the possibility of that and it was a very minor

2 conversation. And his general impression was it would not

3 be a feasible investigation. But it was not an in-depth

4 conversation to the best of my recollection.

5 Q It was your understanding that your attorney had been

6 speaking directly to the postal inspectors; is that

7 correct?

8 A My unders tanding, generally from time to time, yes.

9 Q Did your attorney give you an explanation as to that?

10 A We didn't have a long discussion about that.

11 Q Did you tell your attorney except for the

12 non-delivery, due to your financial difficulties,

13 everything they were complaining about about you could

14 have been said about Marquis Who's Who?

15 A I might have said that. In what period are you

16 speaking about time wise?

17 Q I guess it would be after you began cooperating, sir,

18 and I am not suggesting what period you would have had

19 that conversation. But you --

20 A It would have been much earlier, it would have been

21 in May or June of 1990.

22 Q So that would have been after the search warrant was

23 executed, but before they actually began -- before you
24 were actually criminally charged; is that correct?
25 A No, sir. May was prior to the search warrant.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4926
Watstein-cross/Trabulus


1 Q Okay.

2 So, at that point in time, sir -- withdrawn.

3 Let me see if I understand you correctly.

4 Are you saying, sir, that your conversation with

5 your attorney to the effect that everything they were

6 saying about you could be said with equal force about

7 Marquis Who's Who, except for the non-delivery of

8 financial difficulties, and that was before the search

9 warrant?

10 A We had substantial conversations in May or June prior

11 to the search warrant, and that may have been veritably

12 the topic of the conversation.

13 Q That's after you learned there was a criminal

14 investigation, but before the search warrant was -- before

15 the search warrant was executed; is that correct?

16 A Yes.

17 Q And did you expre ss to your attorney your belief of

18 what you were doing was not fraudulent?

19 A Yes.

20 Q And did your attorney concur in that at that point in

21 time?

22 A No, sir.

23 Q And so, you continued, although your attorney had
24 disagreed, you continued operating for several years; is
25 that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4927
Watstein-cross/Trabulus


1 A No, sir.

2 Q Well, your business lasted until 1991, did it not?

3 A Yes, sir.

4 Q And you continued operating from the time of that

5 conversation with your attorney in 1991; is that correct?

6 A Yes, with --

7 Q Your people continued using mailing lists; is that

8 correct?

9 A Yes, sir.

10 Q And you were still not disclosing that's to customers

11 at that time?

12 A No, sir, not correct.

13 Q You disclose d to people that the name came from a

14 mailing list?

15 A If someone had indicated it in June -- pardon me,

16 July of 1990, it was no longer dealt within terms that you

17 were nominated to the best of my recollection.

18 Q To the best of your recollection?

19 A Yes, sir.

20 Q And the letters were still going out saying you were

21 nominated?

22 A No, sir, the letter was changed.

23 Q The salespeople were still saying you were nominated?
24 A They were instructed not to at a certain point. We
25 began to make changes in June, July and May, the changes

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4928
Watstein-cross/Trabulus


1 developed over a period of time, and that phrase was

2 eliminated.

3 Q After you were arrested, you saw the criminal

4 complaint against you; is that correct?

5 A Yes, sir.

6 Q Ov er 100 pages long; is that correct?

7 A Yes.

8 Q And it contained allegations of your salespeople

9 saying nominated after -- during the summer of 1990; is

10 that correct?

11 A Those were the allegations, yes, sir.

12 Q Do you believe those to be incorrect?

13 A I think having 70 salespeople --

14 Q Yes or no, sir.

15 A I cannot answer that question with a yes or no, sir.

16 Q Now, at that point in time did you discuss with your

17 attorney as to whether or not you should immediately after

18 the search warrant was executed to rush to the government

19 to try to make some kind of deal?

20 A What period of time is that?

21 Q Immediately -- withdrawn.

22 During the point you first learned there was a

23 criminal investigation, sir, before the search warrant was
24 executed, after you say your attorney told you that he
25 disagreed with you --

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4929
Watstein-cross/Trabulus


1 A Yes, sir.

2 Q Did you -- did you then suggest you rush to the

3 government and make some kind of deal like you ultimately

4 made?

5 A By ultimately made, what are you referring to, sir?

6 Q Did you suggest that you enter into a plea

7 negotiation with the government at that time?

8 A It was a topic we discussed in June or July.

9 Q But you didn't, did you?

10 A Did we not discuss it?

11 Q You didn't do that; is that correct?

12 A There were other negotiations with the government at

13 that time, sir.

14 Q And there were two more search warrants executed; is

15 that correct?

16 A Yes, sir.

17 Q And you didn't as part of these discussions

18 voluntarily turn over to the government things that you

19 understood were the s ubject of a criminal investigation at

20 that point in time; is that correct?

21 A Not accurate, sir.

22 Q Is it correct that you moved documents around to

23 prevent them from being found?
24 A No, sir.
25 Q Did the government make such allegations in the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4930
Watstein-cross/Trabulus


1 search warrant applications?

2 A That was their allegation, yes.

3 Q It was false?

4 A Inaccurate, not false.

5 Q What the government said was inaccurate?

6 A As related to that one finite point, yes.

7 Q Now, is it your testimony today that at some point in

8 time, sir, you switched from acting with intent to

9 defraud -- without intent to defraud, to acting with

10 intent to defraud? Yes or no, sir?

11 A I can't answer that question with a yes or no, sir.

12 Q In discussing wi th your attorney whether or not you

13 should plead guilty or fight the charges, did your

14 attorney go over with you the effect of the non-delivery?

15 A Yes, sir.

16 Q Taking money without delivering?

17 A Yes, sir.

18 Q And did he tell you it was a classic mail fraud or

19 telephone fraud type scheme?

20 A No, sir. He said it was not.

21 Q Did he say that the taking of people's money and not

22 delivering as a repeated course of conduct is not a crime?

23 A I can't answer that question with a yes or no, sir.
24 Q Did he tell you that that might enter the case
25 against you?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4931
Watstein-cross/Trabulus


1 A It might have some bearing.

2 Q Did it tell you it was likely to result in your

3 conviction, sir?

4 A No, sir, not that issue, sir.

5 Q Up until you sp oke to your attorney, is it correct,

6 that you did not believe that you had committed any crime?

7 A That was my perception, yes.

8 Q You believed you were acting in good faith?

9 A Up through the period of May, 1990, the answer is

10 yes, in general, yes.

11 Q That was during the period of time that Reed was

12 suing you?

13 A I don't have a recollection of the date of the Reed

14 lawsuit.

15 Q Did the Reed lawsuit follow the criminal

16 investigation?

17 A I don't have a clear recollection of the timing.

18 They were in a similar time period. But I don't have a

19 recollection.

20 Q Is it fair to say as time went on, your business

21 became -- fell -- withdrawn.

22 Is it fair to say as time went on your business

23 fell shorter and shorter of the mark?
24 A You have to define that for me, sir.
25 Q The extent of non-deliveries in creased?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4932
Watstein-cross/Trabulus


1 A No, sir. What time are you into?

2 Q As the financial difficulties developed and

3 continued.

4 A There are actually ups and downs to answer the

5 question fully. I can't give you dates of the ups and

6 downs.

7 Q It wouldn't be accurate to say that your business got

8 better and better through its history up until the time it

9 closed?

10 A It would not be accurate to say that?

11 Q It would not be accurate?

12 A It got better and worse, and better and worse was

13 more accurate.

14 Q It is not fair to say that your company improved its

15 performance vis a vis its customers as time went on on a

16 continuing basis?

17 A I think it would --

18 Q Up to the time -- were you closed out?

19 A No. We closed volunta rily.

20 Q You closed voluntarily?

21 A Yes.

22 Q And up to that point it was getting better and

23 better?
24 A No, it was getting better and worse, and better and
25 worse.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4933
Watstein-cross/Trabulus


1 Q Now, when you spoke to your attorney concerning --

2 withdrawn.

3 Over how long a period of time did you have

4 conversations with your attorney concerning whether or not

5 to plead guilty or to fight the charges?

6 A The discussions commenced in May of 1990, and were

7 determined in late June of 1992.

8 Q Of the, it is fair to say that these discussions took

9 place over a period of more than two years?

10 A Yes, sir. The options were discussed.

11 Q And was the decision to plead guilty itself, it was

12 not made until after the two year period was over; i s that

13 correct?

14 A The final decision, yes, sir.

15 Q The final decision?

16 A Yes, sir.

17 Q And is one of the things that your attorney told you,

18 even if you were to win on the mail fraud, would you

19 likely lose on the tax fraud? Did that enter into your

20 decisions?

21 A We had many discussions about the likelihood to lose

22 one or the other.

23 Q Was that a discussion, that although you may win on
24 the mail fraud, you would lose on the tax fraud?
25 A I don't have a recollection of that particular

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4934
Watstein-cross/Trabulus


1 advice, no, sir, or discussion.

2 Q Over the two years of going back and forth with your

3 lawyer, did you explain to him that you never intended to

4 defraud, as you saw it?

5 A Yes, sir.

6 Q And did you tell him all along you had not intended

7 to commit a crime?

8 A I can't answer with a yes or no, sir.

9 Q Did he tell you that although it was true, if it was

10 true, that it is possible that a jury might disagree?

11 A I need to expand that answer.

12 Q Yes or no, sir. I don't want an expanded answer.

13 A Repeat the question.

14 Q Did he tell you even if it was so, the jury might

15 disagree?

16 A No, sir.

17 Q Did he tell you although it might have been true, you

18 would be convicted of tax fraud and still do the same

19 amount of time?

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

21 Q Is it fair to say that your decision to plead guilty

22 did not come to final form until after you had already

23 begun cooperating?
24 A No, sir, it is not accurate.
25 Q Well, you entered into a cooperation agreement before

HARRY RAPAPO RT, CSR, CP, CM OFFICIAL COURT REPORTER
4935
Watstein-cross/Trabulus


1 the date of your guilty plea; is that correct?

2 A That is correct.

3 Q And although the cooperation agreement says that you

4 would plead guilty, your lawyer explained to you that they

5 couldn't make you plead guilty if you changed your mind;

6 is that correct?

7 A That is correct.

8 Q So, you waited to plead guilty until after the

9 cooperation agreement was in force a period of time; is

10 that correct?

11 A I can't answer that with a yes or no, sir.

12 Q How much time went by since the date the cooperation

13 agreement was signed and the date you pled guilty, how

14 many months?

15 A Several months.

16 Q And during that time you cooperated?

17 A Yes.

18 Q And you were in a position to tell at that point in

19 time that the cooperation was going we ll from what you

20 could tell; is that correct?

21 A It seemed to be going in a satisfactory fashion.

22 Q Did you get feedback from Inspector Biegelman?

23 A No, sir.
24 Q Did you get feedback from your attorney?
25 A Just in a general sense.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4936
Watstein-cross/Trabulus


1 Q Who were you cooperating with at that time?

2 A What time?

3 Q The time period between the date of the signing of

4 the cooperation agreement and the date of the guilty plea?

5 A Inspector Leonard was the principal contact.

6 Q Did you get feedback from Inspector Leonard?

7 A Not in a proactive sense, no.

8 Q Certainly, you got a sense that things were going

9 well; is that correct?

10 A Things were going in a satisfactory format, yes.

11 Q Did your cooperation begin before you actually signed

12 the cooperation agreement?

13 A Yes, sir.

14 Q And even at that point in time you sensed that things

15 were going well; is that correct?

16 A I can't find it as well, satisfactory would be

17 appropriate.

18 Q The tape recordings you made in January of 1993, was

19 that done before you signed the cooperation agreement?

20 A No, sir.

21 Q That was after?

22 A Yes, sir.

23 Q Is that correct?
24 A Yes, sir.
25 Q And what cooperation -- withdrawn.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4937
Watstein-cross/Trabulus


1 Now, I think you testified that when you were

2 sentenced to no jail at all, the six month of his home

3 detention, and the rest of your sentence, you weren't

4 surprised; is that correct?

5 A I don't think it is fair.

6 Q And did you say you were not surprised?

7 A I think it was Mr. Jenks's phrase.

8 Q Did you answer affirmatively to that question.

9 MR. GEDULDIG: Can we have the witness speak up?

10 THE COURT: I hear talking going on. I would

11 appreciate that counsel keep their voices down in the back

12 because I hear what they are saying, and that is also

13 leading to not being able to hear the witness. So please

14 do that.

15 Did you hear the last question and answer,

16 Mr. Geduldig?

17 MR. GEDULDIG: I didn't.

18 THE COURT: Did you get it, Mr. Reporter.

19 (Whereupon, the court reporter reads the

20 requested material.)

21 THE WITNESS: May I respond? If I answered

22 affirmatively it was not my intention to answer yes or no.

23 Q You are saying you were surprised?
24 A Partially yes, and partially no.
25 Q You were told, were you not, about the effect of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4938
Watstein-cross/Trabulus


1 cooperation?

2 A In a general sense, yes, sir.

3 Q I will not go through all of it again, but I will

4 qualify things about your understanding.

5 You were told by your lawyer, had you not, that

6 there was something called the sentencing guidelines?

7 A Yes, sir.

8 Q Correct?

9 And that the sentencing guidelines, so long has

10 they applied, would require that you receive a certain

11 type of sentence?

12 A That is correct.

13 Q And that sentence was a period of imprisonment; is

14 that correct?

15 A That is correct.

16 Q And it was estimated to be at least 70 months; is

17 that correct?

18 A That is correct.

19 Q And it was explained to you that absent highly

20 unusual circumstances, the sentencing Judge's hands would

21 be tied, and there would be no way for the sentencing

22 Judge to give you less than 70 months?

23 A You mean absence of a 5K letter?
24 Q Yes. Was that explained to you?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4939
Watstein-cross/Trabulus


1 Q And the 5K letter is what you got as a result of

2 cooperation; is that correct?

3 A That is correct.

4 Q And you started cooperating before you actually pled

5 guilty; is that correct?

6 A That is correct.

7 Q And once you pled guilty you knew that you would be

8 sentenced; is that correct?

9 A Of course.

10 Q Before that you didn't know whether you would be

11 sentenced or not; is that correct?

12 A No, that's not correct.

13 Q Well, if you went to trial, you didn't know if you

14 would win or not?

15 A That is correct.

16 Q If you won you wouldn't b e sentenced; is that

17 correct?

18 A Yes, sir.

19 Q And now, is it fair to say that you waited to plead

20 guilty until you were pretty sure that your cooperation

21 would be successful?

22 A No, sir, it is not fair to say that.

23 Q You were not pretty sure at the time you pled guilty
24 that your cooperation was going well?
25 A Sir, I had no control of the date of pleading guilty.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4940
Watstein-cross/Trabulus


1 Q You had no control -- withdrawn.

2 Is it fair to say, sir, when you pled guilty at

3 that point in time, it was your belief that you were

4 getting positive feedback on your cooperation, and you

5 felt it was going well?

6 A It was going in a satisfactory fashion, yes.

7 Q Did you have a conversation with your attorney

8 concerning the likely effect of your cooperation on the

9 likely sentence you would receive?

10 A Yes, sir.

11 Q Your attorney there -- told you there could be no

12 assurance as to the likely sentence?

13 A Yes, sir.

14 Q And he told you nobody could make a promise; is that

15 correct?

16 A That is correct.

17 Q And he told you that he had experience in other cases

18 involving cooperation; is that correct?

19 A That is correct.

20 Q And he told you, did he not, that there was a very

21 substantial chance that you might not receive any prison

22 time at all; is that correct?

23 A I can't answer that yes or no.
24 Q He might not have wanted to get your hopes up too
25 high, lest you get disappointed, but he held it up as a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4941
Watstein-cross/Trabulus


1 possibility; is that correct?

2 A Yes, sir.

3 Q You yourself took it upon yourself to cooperate as

4 much as possible up until the date of sentence, and even

5 indicated to the prosecutors you would continue to

6 cooperate after that; is that correct?

7 A Yes.

8 Q All with the hope of that coming true, no jail; is

9 that correct?

10 A Yes, sir.

11 Q Had you ever been paid for any of the cooperation

12 that you performed?

13 A No, sir.

14 MR. TRABULUS: Bear with me a moment, your

15 Honor?

16 THE COURT: Yes.

17 (Whereupon, at this time there was a pause in the

18 proceedings.)

19 Q Is it fair to say in pleading guilty after you

20 started your cooperation, you perceived yourself as

21 hedging your bet?

22 A You have to define that for me, sir.

23 Q You perceived yourself as minimizing your risk? Is
24 that your perception?
25 A Risk of what , sir?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4942
Watstein-cross/Trabulus


1 Q Of an unfavorable outcome?

2 A Yes. I took it into consideration, yes.

3 Q And only after you began cooperating that you

4 perceived it that way?

5 A No, I always perceived it that way.

6 MR. TRABULUS: No further questions.

7 THE COURT: Anybody else?

8

9 CROSS-EXAMINATION

10 BY MR. GEDULDIG:

11 Q Mr. Watstein, you wrote a number of books; is that

12 right?

13 A Yes, sir.

14 Q I think one of the books you wrote is How to Live to

15 Be a Hundred?

16 A Yes, sir.

17 Q You recommend in that book that you exercise?

18 A Yes, sir.

19 Q Do you follow your own advice?

20 A In general, sir, yes, sir.

21 Q You also wrote a book on the Power and Pleasure of

22 Sex; is that right?

23 A Yes.
24 Q Is that autobiographical?
25 A No, sir. But it would be a good idea, I think.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4943
Watstein-cross/Geduldig


1 Q You think so.

2 Does your picture appear on the jacket of that

3 book?

4 A I don't have a recollection of it being on the jacket

5 of that book, sir. It might be.

6 Q It might be?

7 A It might be. I don't have a recollection. It was

8 about 20 years ago.

9 Q You wrote a book on How to Live Like a Millionaire?

10 A Yes, sir.

11 Q When did you write that one?

12 A I think it was late 1970's.

13 Q And the point of that book was to appear to live like

14 a millionaire when in fact you were not a millionaire;

15 isn't that right?

16 A That's not quite accurately stated, sir.

17 Q You weren't writing a handy book for millionaires to

1 8 live like millionaires when they were millionaires? They

19 didn't need your book, right?

20 A I can't respond the way it is phrased.

21 Q Part of your book how to be a millionaire had to do

22 with creating the impression that a person was a

23 millionaire when in fact they were not; is that right?
24 A I can't answer that question with a yes or no, sir.
25 Q You can't tell me whether or not any portion of that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4944
Watstein-cross/Geduldig


1 book dealt with advice to the reader on how to appear to

2 be a millionaire, when in fact they were not millionaires?

3 A I can't answer that with a yes or no.

4 Q Okay.

5 Now, the name of your book was Who's Who of

6 business leaders; is that right?

7 A No, sir.

8 Q What was it?

9 A Who's Who in U.S. Executives.

10 Q Who's Who i n U.S. Executives.

11 Now, I think you said that at the time you were

12 running this business early on, you found out about Who's

13 Who Worldwide; is that right?

14 A No, sir.

15 Q Didn't there come a point you found out about Who's

16 Who Worldwide?

17 A At the time I was running the business, yes.

18 Q That was my question.

19 A I am sorry. I misunderstood your question.

20 Q And after you found out about Who's Who Worldwide you

21 called up that business; is that right?

22 A Yes, sir.

23 Q You spoke on one day, two separate occasions, with
24 Mr. Gordon; is that right?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4945
Watstein-cross/Geduldig


1 Q Is during the course of one of those conversations

2 you were told by Mr. Gordon, words to the effect, that he

3 provided closer supervision o f his sales staff than you

4 did; is that right?

5 A That's not the way he phrased it.

6 Q I said, words to the effect that he provided closer

7 supervision than you did. I am not going to quote him. I

8 didn't hear the conversation. But that's the effect of

9 what he said to you; is that right?

10 A I think it is close, not exactly.

11 Q Like I said, I wasn't there, I couldn't repeat it, I

12 can't be precise.

13 A Understood.

14 Q In your business, I think you testified that your

15 wife was not involved at all?

16 A That is correct.

17 Q But she had a title?

18 A That is correct.

19 Q What was her title?

20 A President.

21 Q Did you tell her she was president of the company?

22 A I might have, I might not have.

23 Q Why were you naming her as president of the company
24 when she had no involvement with the company?

25 A I had a tax liability, and if I were the president

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4946
Watstein-cross/Geduldig


1 and received a higher level of income might have impacted

2 against the collection level of the Internal Revenue

3 Service, and that's one of the items I pled guilty to.

4 Q Did she know you were doing that?

5 A No, sir.

6 Q You lied to your wife and told her, I am going to

7 make you president of this company, for whatever reason

8 you told her, and didn't tell her the truth?

9 A I misled my wife, yes.

10 Q I used the term "lie", did you lie to your wife?

11 A I think "lie" is an active phrase.

12 Q Accurate?

13 A Active, as opposed to misled, definition of the word.

14 Q I will try not to get involved in semantics with you,

15 if you permit me.

16 A Yes.

17 Q Ultimately your wif e pled guilty to recording

18 documents for properties around the country; is that

19 right?

20 A No, sir.

21 Q What did she plead guilty to?

22 A To an inaccurate mortgage application.

23 Q All right.
24 And that mortgage was placed? Ultimately that
25 mortgage was obtained?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4947
Watstein-cross/Geduldig


1 A Yes, sir.

2 Q And a mortgage document was filed?

3 A Yes, sir.

4 Q And false information was provided by your wife to

5 get that document filed?

6 A No, sir.

7 Q Okay.

8 In any event, what happened there was, I think

9 you said that you had beneficial use of properties that

10 were actually listed under your wife's name; is that

11 right?

12 A I said beneficial ownership.

13 Q Beneficial ownerships.

14 How many properties were there like that --

15 A Four.

16 Q -- that you had beneficial ownership of properties

17 listed under your wife's name?

18 A Four.

19 Q What was the name that your wife used?

20 A Her name, you mean?

21 Q What was the name that appeared on the documents that

22 you had beneficial ownership of that were put under her

23 name?
24 A Sherri West, W E S T. S H E R R I.
25 Q And, Mr. Watstein, when that was done, you were --

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4948
Watstein-cross/Geduldig


1 withdrawn.

2 When was it that these properties were being

3 recorded under your wife's name?

4 A My recollection was from 1986 through 1990,

5 approximately.

6 Q Could it have been later than 1990?

7 A I don't think so, no.

8 Q Was there a recording of some sort done in 1990, to

9 your recoll ection?

10 A Not that I have a recollection of, no, sir.

11 Q So, why did you say 1990?

12 A I gave you a range, sir.

13 Q Okay.

14 These houses, where were they located?

15 I am sorry, were there homes that were being

16 recorded, these were four pieces of property?

17 A Two were homes.

18 Q What was the other two?

19 A One was a townhouse, and the other was a condominium.

20 Q Two homes, a townhouse and a condominium?

21 A Yes, sir.

22 Q The first was recorded in approximately 1986?

23 A To the best of my recollection, yes, sir.
24 Q And you did it at that time because you had a tax
25 liability?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4949
Watstein-cross/Geduldig


1 A Yes, sir.

2 Q Unrelated to the tax liability generated as a result

3 of the thievery you committed under the Who's Who of

4 Business Executives?

5 A There was no tax liability created on Who's Who,

6 sir.

7 Q Okay.

8 So, it was a tax liability prior to Who's Who

9 Business Executives?

10 A Yes, sir.

11 Q And I think you said it was a $650,000 tax liability?

12 A Approximately.

13 Q Okay.

14 So, you recorded the first house in 1986 or

15 thereabouts?

16 A Yes, sir.

17 Q Where was that property located?

18 A In Fort Lauderdale, Florida.

19 Q Is that the home you are living in today?

20 A No, sir.

21 Q And where was the second property located?

22 A I believe it was San Diego, Carlsbad, California,

23 C A R L S B A D.
24 Q And where was that property registered under your
25 wife's name of West?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4950
Watstein-cross/Geduldig


1 A I didn't hea r what you said.

2 Q Where was that property registered or recorded under

3 your wife's name of West at the time?

4 A '87, '88, I am not sure.

5 Q Where was the third property located?

6 A The North Shore Towers in Queens.

7 Q When was that property recorded under your wife's

8 name as West?

9 A I believe it was 1989, but I am not quite sure. It

10 might have been earlier.

11 Q And the fourth property, where was that located?

12 A In Mill Neck, New York.

13 Q When was that property registered or recorded under

14 your wife's name as West?

15 A I believe it was 1986, on the land; and '87 on the

16 home. I am not quite sure.

17 Q Can you give us an estimate of the total value of

18 these four pieces of property?

19 A I would be just guessing right now, sir.

20 Q You know what you bought them for?

21 A I don't have a clear recollection . But if you would

22 like a guess only --

23 Q Well, you bought it, didn't you? Didn't you?
24 A Yes, sir, I did.
25 Q You didn't buy it for five dollars, did you?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4951
Watstein-cross/Geduldig


1 A No, sir.

2 Q These are all fairly expensive pieces of property; is

3 that right?

4 A No, sir, it is not accurate.

5 Q How much was the house in Florida in Fort Lauderdale?

6 A $89,000.

7 Q All right. You have a good recollection.

8 How about the one in Carlsbad, how much was it

9 purchased for?

10 A I don't have a clear recollection.

11 Q Give us your best estimate?

12 A A few hundred thousand dollars.

13 Q You don't have an idea, you bought a piece of

14 property not even ten years ago for several hundred

15 thousands of dollars, and you are telling us you don't

16 have a clear recollection of the purchase price?

17 A Sir, excuse me. I responded to your question.

18 Q As best you can?

19 A As best I can.

20 Q Honestly?

21 A I gave you an estimate.

22 Q Honestly?

23 A Yes, sir.
24 Q The third piece of property, in North Shore Towers,
25 how much did you buy that for?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4952
Watstein-cross/Geduldig


1 A I believe it was $200,000.

2 Q Now we are talking about properties worth roughly in

3 the neighborhood of a half a million dollars; is that

4 right?

5 A Yes, sir.

6 Q And the Mill Neck property, how much was the land

7 purchased for?

8 A I previously testified, approximately $600,000.

9 Q The house, how much did that cost?

10 A The house was constructed. My guess is the

11 construction value is five or six hundred thousand

12 dollars.

13 Q We are going over one and a half million dollars?

14 A I told you two million dollars approximately.

15 Q You didn't tell me that?

16 A I gave you an estimate.

17 Q You just told me for the first time?

18 A Yes, sir.

19 Q The property as a group is worth over two million

20 dollars?

21 A Yes, sir.

22 THE COURT: Is this a good time to take a lunch

23 break?
24 MR. GEDULDIG: Yes, Judge, I will eat a good
25 lunch, and so will Mr. Watstein.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4953
Watstein-cross/Geduldig


1 THE COURT: When you come back you will be more

2 vigorous.

3 MR. GEDULDIG: I will try.

4 THE COURT: Members of the jury, we will take a

5 recess for lunch. Keep an open mind, and do not discuss

6 the case. We will recess until 1:35 to give you a full

7 hour.

8 Have a nice lunch.

9 (Whereupon, at this time the jury leaves the

10 courtroom.)

11 (Luncheon Recess.)

12

13

14

15

16

17

18

19

20

21

22

23
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4954
Watstein-cross/Geduldig


1 A F T E R N O O N S E S S I O N

2

3 (The following takes place in the absence of the

4 jury.)

5 THE COURT: Mr. Nelson, you wanted to speak to

6 me?

7 MR. NELSON: Yes.

8 MR. NEVILLE: Your Honor, should the witness been

9 here?

10 THE COURT: Yes, you may leave, if you don't

11 mind, Mr. Watstein.

12 (Whereupon Mr. Watstein exits the courtroom.)

13 THE COURT: Yes, Mr. Nelson.

14 MR. NELSON: Thank you, your Honor.

15 I ha d an opportunity during the luncheon recess

16 to review the transcript, SW-2, which Mr. Trabulus

17 indicated he wished to introduce. An interview of a

18 former employee of Who's Who Worldwide, Regina, conducted

19 on January 20th, 1993, by the witness on the stand.

20 THE COURT: I have it as GA-2.

21 MR. NELSON: I am sorry, I wasn't aware of what

22 it had been marked, GA-2.

23 On page 3 of the transcript, your Honor, there is
24 one portion that I object to.
25 THE COURT: What is the portion?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4955
Watstein-cross/Geduldig


1 MR. NELSON: It is the first five lines,

2 beginning with, it is a statement made by CI, which I

3 assume is Mr. West, of the line, Frank, many people have

4 told me that they felt that Bruce's presentation was a

5 puffery, exaggerating. An example, there was no pub lic

6 affairs department. It was a fantasy, it didn't exist.

7 THE COURT: And the answer is right.

8 MR. NELSON: The answer is right.

9 I object to that portion.

10 THE COURT: We will redact that, right?

11 MR. WHITE: No, your Honor.

12 What I wanted to do is to have the whole thing

13 introduced for completeness. The whole thing is hearsay,

14 obviously. It is some employee, or former employee, not

15 on trial, coming in and offering to Mr. West her take on

16 things.

17 As I understood it --

18 THE COURT: You didn't object to it though.

19 MR. WHITE: Your Honor, I didn't object to it,

20 because I understood, and maybe I was incorrect, but I

21 understood Mr. Trabulus was introducing it for purposes of

22 impeachment, that he set up Mr. West to say you didn't

23 follow it up when employees told you that there were
24 things favorable to th e company.
25 If that's the case, it should be made clear on

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4956
Watstein-cross/Geduldig


1 redirect with this witness that one of the reasons that

2 informed what he did in this conversation, was the fact

3 that this same woman told him on numerous occasions

4 previously in this conversation, a couple of minutes

5 before, about all the things she thought were untrue and

6 she was uncomfortable with.

7 So, if Mr. Nelson's complaint is that this is

8 hearsay, it is as much hearsay as Mr. Trabulus introduced.

9 THE COURT: Yes. But it is too late for that.

10 It is in already. I will not allow that conversation.

11 MR. WHITE: Your Honor, it is only in because

12 Mr. Nelson hadn't reviewed it, and we did it in a sort of

13 two tiered fashion. It wasn't that I wasn't objecting at

14 the time. At the time I wanted to put the whole thing in

15 for context. The only reason we are doing it now is

16 because Mr. Nelson needed the lunch hour to review it. It

17 is not like the government is late on this one.

18 MR. NELSON: Your Honor, I was late, but not late

19 enough, I don't believe. I didn't object to the

20 admissibility of the portion relating to Mr. Trabulus when

21 I saw the transcript. As that occurred my memory was

22 refreshed that there were additional portions of the

23 transcript which may affect my client --
24 THE COURT: I am sustaining the objection to
25 those portions, the other part was put in for impeachment

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4957
Watstein-cross/Geduldig


1 purposes, and that's it. I will not allow that part. It

2 is pure hearsay. There is no basis for it to go in.

3 MR. WHITE: So, your Honor is saying the rest of

4 the transcript, except that part can go in?

5 THE COURT: Yes.

6 MR. WHITE: I understand.

7 THE COURT: Let's bring in the jury.

8 That will go in as Defendant's Exhibit GA-2, in

9 evidence, as redacted.

10 (Defendant's Exhibit GA-2 received in evidence.)

11 (Whereupon, the jury at this time entered the

12 courtroom.)

13 THE COURT: Please be seated, members of the

14 jury,.

15 MR. WHITE: Your Honor, I am sorry, I meant to

16 raise an issue before we begin, I apologize.

17 THE COURT: All right. Come up.

18

19 (Whereupon, at this time the following took place

20 at the sidebar.)

21 MR. WHITE: I am sorry, your Honor, I forgot.

22 I wanted to seek the Court's guidance on what to

23 do here. As I told you yesterday, we have two customers
24 from out of town. Do you want me to wait?
25 THE COU RT: No, I don't think we should wait.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4958
Watstein-cross/Geduldig


1 Let's get Mr. Geduldig finished. As long as --

2 MR. WHITE: He is here for the duration now.

3 THE COURT: All right.

4 You will not be too much more, Mr. Geduldig?

5 MR. GEDULDIG: A day or two, Judge.

6 THE COURT: Have you got renewed energy now? Not

7 that you needed renewed. Mr. Neville, he needs renewed

8 energy.

9 MR. GEDULDIG: He has been champing at the bit.

10 I think I might be an hour or so, maybe less.

11 THE COURT: If you are going to be that long, I

12 will interrupt him. What is the difference? He is going

13 to be here.

14 MR. GEDULDIG: You want to go with the

15 customers?

16 MR. WHITE: Yes.

17 THE COURT: Let's interrupt.

18 MR. WHITE: Sorry I didn't raise it before.

19

20 (Whereupon, at this time the following takes

21 place in open court.)

22 THE COURT: Members of the jury, again we have

23 reached the point where there are several witnesses who
24 are waiting to testify, whose testimony will be much
25 briefer, and who have come from other places, so we will

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4959
Watstein-cross/Geduldig


1 interrupt Mr. Watstein to take the testimony of two other

2 witnesses.

3 Sorry, Mr. Watstein. You may step down.

4 Stay around, Mr. Watstein.

5 THE WITNESS: Okay.

6 (Whereupon, at this time the witness left the

7 witness stand.)

8 MS. SCOTT: The government calls Andrea

9 Henderson-Nikoi. And she will spell it.

10 THE COURT: Would you raise your right hand.

11

12 A N D R E A H E N D E R S O N - N I K O I ,

13 called as a witness, having been first

14 duly affirmed, was examined and testified

15 as follows:

16

17 THE WITNESS: I affirm.

18 THE COURT: You may affirm that.

19 THE COURT: Please be seated and state your full

20 name and spell your name.

21 THE WITNESS: Andrea Henderson-Nikoi,

22 A N D R E A. Henderson, H E N D E R S O N, Nikoi,

23 N I K O I.
24 THE COURT: Is that hyphenated?
25 THE WITNESS: Yes, it is.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4960

1 THE COURT: Henderson-Nikoi?

2 THE WITNESS: Yes.

3

4 DIRECT EXAMINATION

5 BY MS. SCOTT:

6 Q Good afternoon, Ms. Nikoi.

7 A Good afternoon.

8 Q Can you tell us where you live?

9 A Virginia, Woodbridge, Virginia.

10 THE COURT: What is that?

11 THE WITNESS: Woodbridge, one word.

12 Q How long have you been living in Wood bridge,

13 Virginia?

14 A For two and a half years.

15 Q What do you do for a living?

16 A An accountant for the state of Virginia.

17 Q Where do you perform your duties?

18 A In George Mason University.

19 Q What are your duties an as accountant?

20 A I am over the investment funds for capital outlay,

21 which is plant funds.

22 Q And how long have you been doing that?

23 A Since March of '96.
24 Q Now, have you ever had any dealings with a company
25 called Sterling Who's Who?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4961
Henderson-Nikoi-direct/Scott


1 A Yes, I have.

2 Q Did you make a purchase from that company?

3 A Yes, I did.

4 Q What did you purchase from them?

5 A I purchased a membership.

6 Q Do you remember approximately when you were first

7 contacted by the company?

8 A February or March of '94.

9 Q How were you first contacted?

10 A I received a letter in the mail.

11 Q Do you remember what that letter said?

12 A To my recollection it stated that I have been

13 selected for nomination by Sterling Who's Who.

14 Q I am showing you Government's Exhibit 42-F, as in

15 Frank for Identification.

16 Do you recognize that?

17 (Handed to the witness.)

18 A Yes, I do.

19 Q What is that?

20 A That is the letter I received from Sterling Who's

21 Who.

22 Q Is that a copy of the letter?

23 A Yes, it is.
24 Q And is it a true and accurate copy of the letter that
25 you received?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4962
Henderson-Nikoi-direct/Scott


1 A Yes, it is.

2 MS. SCOTT: I offer Government's Exhibit 42-F.

3 THE COURT: What is the date of the lett er?

4 THE WITNESS: March 7th, 1994.

5 THE COURT: Any objection?

6 MR. TRABULUS: Your Honor, if you can wait a

7 moment as we find it? We had been given an erroneous or

8 incomplete name of the witness we would be calling today,

9 so we don't have the documents in front of us.

10 THE COURT: Very well.

11 MS. SCOTT: This is under Henderson.

12 MR. TRABULUS: You gave us the name Henderson

13 yesterday, the documents all say Nikoi. We couldn't find

14 it.

15 (Whereupon, at this time there was a pause in the

16 proceedings.)

17 MR. TRABULUS: No objection.

18 THE COURT: Government's Exhibit 42-F, for Fox,

19 in evidence.

20 (Government's Exhibit 42-F received in evidence.)

21 Q Ms. Nikoi, could you take a look at the letter in

22 front of you, and read for us the first two paragraphs.

23 A You were recently nominated for inclusion in the

24 1994-95 executive edition of Sterling Who's Who.
25 We are pleased to inform you on March 4th, your

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4963
Henderson-Nikoi-direct/Scott


1 nomination for the executive edition was accepted, pending

2 additional information --

3 THE COURT: You have to slow down a little bit.

4 Do you want to start --

5 THE WITNESS: Start over again?

6 THE COURT: Just the last sentence you started.

7 THE WITNESS: Okay.

8 We are pleased to inform you that on March 4th,

9 your nomination for the executive edition was accepted.

10 Pending additional information about your current career

11 position, please refer to the enclosed form.

12 Q Was there a form enclosed?

13 A Yes, there was.

14 Q What did you do with that form?

15 A I put my name on there, as well as my career, my

16 occu pation, rather, the university that I worked for, and

17 what type of institution it was. And I mailed it back to

18 them.

19 Q I am showing you Government's Exhibit 42-D, as in

20 Daniel, for identification.

21 (Handed to the witness.)

22 A Yes, I did.

23 Q What is that?
24 A The postcard enclosed with the letter.
25 Q Is that the postcard you filled out and sent back?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4964
Henderson-Nikoi-direct/Scott


1 A Yes, it is.

2 MS. SCOTT: I offer 42-D, as in Daniel.

3 THE COURT: Any objection?

4 MR. TRABULUS: No.

5 THE COURT: Government's Exhibit 42-D, for Dog,

6 in evidence.

7 (Government's Exhibit 42-D received in evidence.)

8 Q If you can turn the exhibit over and take a look at

9 the postmark on the back, can you tell us the date you

10 mailed it?

11 A It is postmarked March 22nd, 1994.

12 Q Now, after you received that card, what happened?

13 A I proceed --

14 Q I am sorry, after you mailed the card, what happened?

15 A I received a phone call from Sterling Who's Who.

16 Q And do you remember the name of the person who called

17 you?

18 A Yes, I do.

19 Q And what was that person's name?

20 A Cathy Brady.

21 Q And can you tell us what happened in this

22 conversation that you had with her?

23 A Ms. Brady told me I was nominated by Sterling Who's
24 Who. And she wanted me to purchase a membership with
25 Sterling Who's Who, and she explained the different type

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4965
Henderson-Nikoi-direct/Scott


1 of categories she had for membership. And basically she

2 stated with the standard membership, which is the

3 cheapest , that I should purchase that membership in order

4 to become a member, and for my name to be included in the

5 executive edition.

6 Q Do you remember anything else that she told you in

7 that conversation?

8 A She told me that, you know, this is a good

9 opportunity for women, because this was a man's world, and

10 that women are not included with top leaders with business

11 executives in this world.

12 At the time I was a single mother. She said this

13 is something that a single mother should look at investing

14 into.

15 Q Did she tell you anything else about you obtaining

16 membership in Sterling Who's Who?

17 A She told me that you are nominated, and you go

18 through a selection process, a committee reviews the

19 nominees, and it is a limited -- only a limited number is

20 nominated and accepted into this organization.

21 Q Now, what, if an ything, else did she say to you about

22 how memberships became available?

23 A She said it was through attrition.
24 Q What, if anything, did she tell you about what you
25 would receive for your money if you purchased a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4966
Henderson-Nikoi-direct/Scott


1 membership?

2 A She said I would receive a plaque. There would be a

3 press release sent to other members, organization, and as

4 well as I would receive information on attending seminars

5 and conferences within my local area in order to do

6 networking.

7 Q What if any questions did you ask in the course of

8 your conversation with her?

9 A I wanted to make sure it wasn't a gimmick, and that

10 the company was a legitimate company. And she told me it

11 was; that they had been in business for over 20 years.

12 And they were one of the Fortune 500 -- excuse me, a

13 subsidiary of a Fortune 500 company.

14 I asked if they are really the Who's Who, because

15 when you attend college you hear of Who's Who Among

16 Colleges and Universities, and I asked if she was the

17 original Who's Who and she said, yes, and she started

18 naming and said they were among the Who's Who in Colleges

19 and Businesses.

20 Q Did you ask any other questions?

21 A I asked her so much, at this moment, I can't recall.

22 Q I am going to show you something to refresh your

23 recollection, Government's Exhibit 3500-AN-1 for
24 Identification.
25 MR. TRABULUS: Your Honor, can we have a moment

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4967
Henderson-Nikoi-direct/Scott


1 to locate that?

2 THE COURT: Yes.

3 (Whereupon, at this time there was a pause in the

4 pro ceedings.)

5 MR. JENKS: What is the exhibit number again?

6 MS. SCOTT: 3500-AN, as in Nancy, 1.

7 (Whereupon, at this time there was a pause in the

8 proceedings.)

9 THE COURT: Have you located it?

10 MR. TRABULUS: I have not.

11 MR. JENKS: I have.

12 THE COURT: You have not?

13 MR. TRABULUS: I have not.

14 THE COURT: Do you want to show it to him?

15 MR. TRABULUS: I am sure it is in here, your

16 Honor.

17 (Whereupon, at this time there was a pause in the

18 proceedings.)

19 MR. TRABULUS: I have it.

20 THE COURT: Very well.

21 (Handed to the witness.)

22 Q Does that questionnaire, refresh your recollection as

23 to other questions you might have asked?
24 A Yes.
25 Q Can you tell us what other questions you asked the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4968
Henderson-Nikoi- direct/Scott


1 salesperson?

2 A I asked who nominated me? She said it was one of my

3 supervisors.

4 I asked which one?

5 She said that information is confidential.

6 I said how can I obtain that information?

7 She said I would have to write to them, to the

8 review board, and they would contact the person to see if

9 he or she wanted the name given to me.

10 Q Anything else you recall that you wanted to ask?

11 A Yes, I wanted to know if it was a gimmick, if it was

12 actually Who's Who?

13 I asked if she obtained my name by a magazine

14 mailing list or something like that?

15 She said, no, I was nominated, and it is going

16 through a process of the board to review your nomination,

17 and you have a thorough investigation done on your

18 background.

19 Q And that would be by the board?

20 A Yes.

21 Q And if you take a look at Government's Exhibit 42-F,

22 as in Frank, the solicitation letter.

23 A Okay.
24 Q Is there language at the bottom saying in substance
25 that the inclusion in the directory is free of charge?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4969
Henderson-Nikoi-direct/Scott


1 A Yes, there is.

2 Q Did you ask any questions about that?

3 A Yes, I did. And she told me that there was limited

4 space available to be included in the executive edition.

5 Therefore you must purchase a membership in order to be

6 included.

7 Q Now, of all the things you were told about the

8 company, what was the most important one that led to your

9 purchasing a membership?

10 A I was nominated by my supervisor, one of my

11 supervisors, past or present.

12 Q How did you hope to use this membership?

13 A For networking purposes.

14 Q How, if at all, was your perception that you were

15 nominated, how did that relate to your perception that

16 this would be useful for networking?

17 A If you are nominated by a supervisor, they stated

18 there is a press release, and the information is sent

19 forth to other people, then they will look at your

20 outstanding achievements you had done with previous

21 employers. That would help you network and explore other

22 employment opportunities.

23 Q If your information is obtained -- if the information
24 and your name was from a mailing list and not a
25 nomination, would it have affected your decision to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4970
Henderson-Nikoi-direct/Scott


1 purchase?

2 A Yes.

3 Q Why is that?

4 A Because I would not have purchased a membership. If

5 you are nominated, esp ecially by a supervisor, it means

6 that supervisor knows some of the members in the

7 organization. And they can contact that person. If space

8 is limited, you know that you have been truly nominated by

9 someone that knows your capabilities, knows your job

10 functions, and someone who has taken pride in your work.

11 When you look at a mailing list, you don't know

12 who is on there.

13 Q Do you remember how much you paid for your

14 membership?

15 A It was $258.

16 Q And I am now showing you Government's Exhibit 42-B,

17 as in Baker for Identification.

18 (Handed to the witness.)

19 Q Can you tell us what that is?

20 A This is the invoice I received from them showing how

21 much was due. That was the amount I paid, 258.75.

22 Q Do you remember how you paid for the membership?

23 A With my credit card.
24 Q How did you give the company y our credit card?
25 A Over the phone.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4971
Henderson-Nikoi-direct/Scott


1 Q Was that in your conversation with Cathy Brady?

2 A Yes, in one of my conversations.

3 Q Now, how many conversations did you have with her

4 before you made the purchase?

5 A Approximately four.

6 Q And this invoice, did it arrive after you made the

7 purchase over the telephone?

8 A Yes.

9 Q And can you read -- I am sorry.

10 MS. SCOTT: I offer Government's Exhibit 42-B.

11 THE COURT: Any objection?

12 MR. TRABULUS: No.

13 THE COURT: Government's Exhibit 42-B, for Baker,

14 in evidence.

15 (Government's Exhibit 42-B received in evidence.)

16 Q Can you tell us the date that appears on that

17 invoice?

18 A April 26th, '94, the invoice date.

19 Q Now, looking at the top typewritten line on that

20 document, can you read off what that says?

21 A One standard -- is that what you are referring to?

22 Q Yes.

23 A One standard membership, slash split billing, $249.
24 Q Did you see those words when you first received this
25 invoice?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4972
Henderson-Nikoi-direct/Scott


1 A Yes, I did.

2 Q And what did you do when you saw those words?

3 A I called Cathy Brady.

4 Q Why did you call her?

5 A Because the invoice said split billing. And I wanted

6 to know what that meant.

7 Q What did Cathy Brady tell you?

8 A She told me my membership was paid in full and not to

9 worry about that wording on there.

10 Q Now, was this approximately at the time you received

11 this invoice that you made this call?

12 A This was after receiving the invoice I made that

13 call.

14 Q Now, did you eventually receive a plaque from the

15 company?

16 A Yes, I did.

17 Q Did you eventually receive a directory?

18 A Two years later.

19 Q Shortly after receiving the plaque, did you receive

20 any other billings from the company?

21 A Yes, I did. If I am not mistaken in May.

22 Q Can you tell us what that was?

23 A I don't recall.
24 Q Did you receive any billings relating to the
25 directory?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4973
Henderson-Nikoi-direct/Scott


1 A Yes, I did.

2 Excuse me, I received a bill later that year for

3 an additional $149.

4 Q Was that for the directory?

5 A Yes. They said it was the other half of my

6 membership dues.

7 Q What happened when you received this other bill?

8 A I called the company.

9 Q What happened when you called?

10 A I asked to speak to Cathy Brady. They would not let

11 me speak to her. I spoke with a gentleman who was very

12 rude, and told me that was my problem. I had to pay the

13 bill or I would not receive a copy of the edition.

14 Q Did you try to contact anybody else at the company?

15 A I constantly tried to contact Cathy Brady. I asked

16 for the owner. Very few times -- I am sorry. When I

17 called they would not let me speak with the owner.

18 I finally called the receptionist and she told me

19 the owner was Michael Powers. I called to speak to him,

20 and they would not let me speak to him.

21 Q What else did you do to try to speak to Michael

22 Powers?

23 A I wrote a letter to him.
24 Q Now, in trying to reach Michael Powers, what were you
25 trying to achieve?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT R EPORTER
4974
Henderson-Nikoi-direct/Scott


1 A A refund. I tried to obtain a refund from Cathy

2 Brady previously. She told me everything was fine with my

3 membership, and not to worry.

4 Q That's initially when you first got the invoice; is

5 that correct?

6 A Yes, yes.

7 Q Now, were you able to get a refund from the company?

8 A No, I was not.

9 Q Were you eventually charged for this additional

10 amount?

11 A I think I was. I am not sure, but I think I was.

12 Q Did you have any other contacts with the company

13 after that?

14 A No.

15 Q I am referring now to 1996. Do you remember any

16 contacts then?

17 A Yes. Michael Powers called me.

18 Q And what happened in that conversation?

19 A He explained to me he received my complaint letter, a

20 year later, and that he was sorry that I had all these

21 problems with the company. And he also told me had a copy

22 of the questionnaire I filled out for the U.S. Postal

23 Services. And he wanted to inform me there was a mix-up
24 with another company that had a similar name to theirs.
25 And, therefore, Sterling Who's Who was bona fide. And he

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4975
Henderson-Nikoi-direct/Scott


1 asked me if there was something he can do to rectify the

2 situation to make me satisfied.

3 I told him I called repeatedly, and I wrote him a

4 letter a year ago. And I wanted a refund. He advised me

5 I could not get a refund. If I had complained after the

6 purchase then he would have given me a refund. And I

7 stated that I did.

8 He said I am going to send you a leather business

9 card holder, a note holder, an ink pen, and I will also

10 send you a Hard Copy cover of the edition.

11 I told him not to send it to me. I don't want

12 anything to do with Sterling Who's Who, a year ago, two

13 years ago, and leave me alone.

14 He apologized again and asked me if I would

15 reconsider, and I said, no, and I hung up on him.

16 Q What happened after that?

17 A After that in the mail those items came to my home.

18 Q Now, other than the items you described today, did

19 you receive anything else from the company?

20 A A magazine. I think the name of it was called

21 Tribute.

22 Q Did you ever learn about or get invited to any

23 conferences or seminars?
24 A No, I did not.
25 Q Did you ever get contacted by anybody who said they

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4976
Henderson-Nikoi-direct/Scott


1 were a Who's Who member who wanted to network with you?

2 A No, I did not.

3 Q Did you ever -- withdrawn.

4 MS. SCOTT: May I have a moment, your Honor?

5 THE COURT: Yes.

6 (Whereupon, at this time there was a pause in the

7 proceedings.)

8 MS. SCOTT: Thank you, no other questions.

9 THE COURT: Cross-examination.

10 MR. TRABULUS: Your Honor, in light of the facts

11 we only recently became aware of which witness is being

12 called, we need to go through the documents.

13 MR. JENKS: I will ask a few questions.

14 MR. TRABULUS: All right, would you do that.

15 THE COURT: Yes.

16

17 CROSS-EXAMINATION

18 BY MR. JENKS:

19 Q Good afternoon, ma'am.

20 A Good afternoon.

21 Q Would you prefer to be called Ms. Henderson or

22 Ms. Henderson-Nikoi?

23 A Nikoi is fine.
24 Q You are a senior accountant, Ms. Nikoi, at George
25 Mason University?

HARRY RAPAPORT, CSR, CP, CM OFFICI AL COURT REPORTER
4977
Henderson-Nikoi-cross/Jenks


1 A Yes.

2 Q And that's in Virginia?

3 A Yes.

4 Q You held that title for some time?

5 A Yes, I have.

6 Q Did you ever see a copy of the Sterling Who's Who

7 directory for 1992, 1995?

8 A Yes, I did, in 1996.

9 Q You got the book in 1996?

10 A Uh-huh.

11 Q It just came in the mail in 1996?

12 A It was one of the items that Michael Powers sent to

13 me.

14 Q In 1996?

15 A Yes.

16 Q Prior to coming here to testify today, did you have

17 conversations with the government?

18 A Yes, I did.

19 Q And did the government tell you on March 30th, 1995

20 Sterling Who's Who was raided and various people were

21 arrested on that date?

22 A No, they did not.

23 Q Do you know that as you testify here today?
24 A No.
25 Q This is the first time you are hearing it?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4978
Henderson-Nikoi-cross/Jenks


1 A Yes, I am.

2 Q Do you know after March 30th, 1995, that Sterling

3 Who's Who was not operating and functioning, and certainly

4 not functioning in 1996; did you know that?

5 A No, I did not.

6 Q Did you see your name in the Sterling Who's Who

7 registry?

8 A No, I did not want the book.

9 Q Did you look in the book to see your name?

10 A No.

11 MR. JENKS: Let me mark this.

12 MR. TRABULUS: It is there.

13 MR. JENKS: Where?

14 MR. TRABULUS: Under one of those plaques.

15 Q Ms. Nikoi, I am going to show you

16 Defendant's Exhibit T in evidence -- let me move some of

17 these out of the way.

18 Defendant's Exhibit T evidence, is that you,

19 Andrea Henderson-Nikoi?

20 A Yes, it is.

21 Q Would you look through this and tell me if it is a

22 correct depiction of your biographical data?

23 A Yes, it is.
24 Q Including your favorite activities and magazines and
25 so forth?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4979
Henderson-Nikoi-cross/Jenks


1 A Yes, it is.

2 Q Is this the information that you supplied to Sterling

3 Who's Who?

4 A Yes, it is.

5 Q All right.

6 You have never seen this listing in this book

7 prior to that?

8 A No.

9 Q Did you ever attempt to network at any time with any

10 of the members in this book?

11 A No.

12 Q Did you get a CD-ROM?

13 A No.

14 Q You know how to work a CD-ROM?

15 A No. I don't have CD-ROM.

16 Q Well, neither do I.

17 Let me show you this card.

18 This is Government's Exhibit 42-D in evidence.

19 This is the card that you sent back to Sterling

20 Who's Who; am I correct?

21 A Yes, it is.

22 Q And this card, if you look at the card, does it have

23 any little code or bar number anywhere on the card, at the
24 bottom in the right-hand corner?
25 A No, it doesn't.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4980
Henderson-Nikoi-cross/Jenks


1 Q It doesn't say anything about having any kind of a

2 code on this card, correct?

3 A Correct.

4 Q It doesn't have any letters or initials on the bottom

5 in any right-hand corner; is that correct?

6 A Correct.

7 Q Has the government shown you anything that would

8 suggest to you that perhaps you weren't nominated for

9 inclusion in the Sterling Who's Who registry?

10 A No, I haven't seen anything.

11 Q So, would it be fair to say, ma'am, as you sit here

12 today you are not really certain as to whether or not you

13 were actually nominated by someone from Virginia somewhere

14 for inclusion in that directory; is that correct?

15 A Correct.

16 Q And there are a lot of people at George Mason

17 University; is that correct?

18 A Yes.

19 Q And you worked there quite a while; is that correct?

20 A Yes.

21 Q And I take it you know a lot of people there; is that

22 correct?

23 A Yes.
24 Q And your level of education is college degree?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4981
Henderson-Nikoi-cross/Jenks


1 Q And how long have you worked at George Mason?

2 A For five years.

3 Q You know a lot of people there; is that correct?

4 A Yes, I do.

5 Q And I think you live in -- you said Fairfax,

6 Virginia?

7 A Woodbridge.

8 Q Woodbridge?

9 A Yes.

10 Q And you know people there, too; am I correct?

11 A Yes.

12 Q Are you a member of any organizations or groups in

13 Virginia?

14 A Triple A.

15 Q Other than that, are you a member of any --

16 A You mean professional organizations? No, I am not.

17 Q How about any organizations within your community?

18 A Church organizations.

19 Q Churches?

20 A Yes.

21 Q A church, religious organization?

22 A Yes.

23 Q Is it possible that someone could have nominated you
24 from either the university or a church organization or
25 even from your community?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4982
Henderson-Nikoi-cross/Jenks


1 A It's possible.

2 Q Okay.

3 Now, I am going to ask you to take a look at

4 42-E. This is for identification.

5 (Handed to the witness.)

6 Q That's the letter of complaint you sent to Michael

7 Powers; is that right?

8 A Yes.

9 Q That letter is dated March 21st, 1995; am I right?

10 A Yes, sir.

11 Q And this is the first written letter, I take it, that

12 you sent to the company complaining about your membership;

13 am I right?

14 A Yes, sir.

15 Q Prior to that you dealt with Ms. Brady?

16 A I dealt with Ms. Brady, Michael -- I am sorry, Tom

17 Randall. There was a gentleman his first name was Don. I

18 don't know his last name. And there was one other person

19 I dealt with.

20 Q Let me see if I understand it.

21 First you dealt with Cathy Brady?

22 A Yes.

23 Q And I think your testimony was that you had four
24 conversations before you decided to purchase a membership?
25 A That's correct.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COU RT REPORTER
4983
Henderson-Nikoi-cross/Jenks


1 Q Was the university going to reimburse you at all for

2 your membership?

3 A No, they were not.

4 Q But you did discuss it with your supervisor; is that

5 correct?

6 A Yes, I did.

7 Q Did he or she think it was a good idea to purchase

8 the membership?

9 A She stated only if it was the real Who's Who Among

10 Colleges and Universities.

11 Q Did you make any independent inquiry -- withdrawn.

12 Do you know who is the real Who's Who, if there

13 is a real Who's Who?

14 A Yes. The university has a listing of Who's Who Among

15 Colleges and Universities.

16 Q Did you know as you sit here today anyone can use the

17 name Who's Who?

18 A Yes, I know that now.

19 Q Do you know that there is hundreds of Who's Who books

20 out there published by different people?

21 A No, I did not know that.

22 Q Okay.

23 When you sent this letter on March 21st, 1995,
24 you said it was your first written letter of complaint; is
25 that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4984
Henderson-Nikoi-cross/Jenks


1 A Correct.

2 Q Basically you were complaining because you wanted to

3 get your money back because you were no longer interested

4 at the present moment; is that correct?

5 A 1994 I was no longer interested.

6 Q This is here in 1995 -- withdrawn.

7 How soon after you became a member -- you signed

8 up to become a member in March of 1994; is that correct?

9 A Yes, sir.

10 Q And you got a wall plaque?

11 A Yes, sir.

12 Q Was the plaque timely delivered to you?

13 A Yes, sir.

14 Q Would it be a fair statement to say, ma'am, that you

15 were satisfied with t he plaque itself? Am I right?

16 A It was a nice plaque, if that's what you mean.

17 Q It was acceptable, correct?

18 A Yes.

19 Q Is that what you expected when they told you on the

20 phone you would get a plaque like that?

21 A Something similar to that.

22 Q Did you hang the plaque at all in your office or at

23 your home?
24 A I hung it up in my home.
25 Q In your den or someplace?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4985
Henderson-Nikoi-cross/Jenks


1 A Yes.

2 Q Did anyone else ever see the plaque at any time?

3 A My family and a couple of friends.

4 Q Did they comment on the plaque?

5 A Yes, they did.

6 Q Was there comments in a positive fashion?

7 A Yes, they were.

8 Q They were impressed that you were in a Who's Who?

9 A Yes.

10 Q Now, where is the plaque now?

11 A It is collecting dust right now.

12 Q On the wall?

13 A No, not on the wall.

14 Q You took it down?

15 A Yes, I did.

16 Q Let me ask you this: You got a questionnaire from

17 the government, correct?

18 A Yes.

19 Q And you don't think the questionnaire sometime in

20 1995?

21 A Yes, sir.

22 Q And would, say, June of 1995 be a fair estimate of

23 when you got that questionnaire?
24 A Yes.
25 Q Did you get a cover letter with that questionnaire

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4986
Henderson-Nikoi-cross/Jenks


1 from the government explaining that they were conducting

2 an investigation?

3 A I can't recall.

4 Q Okay.

5 When you got that questionnaire from the

6 government, would it be a fair statement to say that you

7 felt before you filled out the questionnaire, th at the

8 government was investing -- investigating this company for

9 possibly doing something wrong?

10 A No, I can't say that. I am not sure what I thought

11 at that time.

12 Q When you saw all the questions contained in the

13 questionnaire that Ms. Scott had shown you, did it dawn on

14 you that the government feels that perhaps this government

15 feels that this company had done something wrong?

16 A That can be an assumption, but I am not certain what

17 my thoughts were at that time.

18 Q Okay.

19 When you wrote this letter on March 21st, 1995,

20 you said a year later you finally heard from Mr. Powers?

21 A Yes.

22 Q And that would have been sometime in March of 1996?

23 A It was probably before March of 1996. Probably
24 February something. I know it was before I -- I changed
25 offices in my department. And I know it was before then.



HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4987
Henderson-Nikoi-cross/Jenks


1 Q Are you certain it was in February of '96?

2 A I am not certain, but I know it was a long time after

3 I filled out that questionnaire when I spoke with him.

4 Q A long time after you filled out the government

5 questionnaire?

6 A Yes.

7 Q And a Mr. Powers contacted you in 1996?

8 A Yes. The gentleman on the phone said he was

9 Mr. Powers.

10 Q Did the government tell you that -- did the

11 government tell you at any time that on March 30th, 1995,

12 they seized all the documents and records from Sterling

13 Who's Who?

14 A No. I hadn't spoken with the government then.

15 Q Okay.

16 Prior to coming here to testify today, did you

17 speak with the government?

18 A Yes, I did.

19 Q How many times would you say?

20 A I am not sure.

21 Q Two, three?

22 A I am not sure, I can't give you a number, because I

23 am not sure how many times I spoke with them.
24 Q Did you speak to Ms. Scott before you testified
25 today?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4988
Henderson-Nikoi-cross/Jenks


1 A Yes, I did.

2 Q Is this the first time you met the government in

3 person?

4 A Yes, it is.

5 Q When you met them, did they seem to suggest that

6 there was something wrong about you getting a person's

7 name from a mailing list?

8 A No, they did not.

9 Q Did they tell you they would emphasize with you when

10 you testified here, the issue of a mailing list?

11 A No, they did not.

12 Q You met Ms. Scott; is that correct?

13 A Yes, I did.

14 Q When did you meet her this morning or last night?

15 A No. I met h er this morning.

16 Q Tell us what occurred between the two of you?

17 A She just basically said I would be called in to

18 testify.

19 Q Did she tell you what kind of questions she would ask

20 you?

21 A Not this morning.

22 Q Did she tell you prior to that?

23 A Yes.
24 Q That she would be talking to you about nominations
25 and mailing lists?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4989
Henderson-Nikoi-cross/Jenks


1 A Yes.

2 Q And did she say that nominations and mailing lists

3 were the important things?

4 A No, she did not.

5 MR. JENKS: Nothing further. Thank you.

6 THE WITNESS: You're welcome.

7

8 CROSS-EXAMINATION

9 BY MR. TRABULUS:

10 Q Good afternoon, Ms. Nikoi.

11 A Good afternoon.

12 Q When you received this telephone call from

13 Mr. Powers, at that point in time you were kind of

14 irritated with Sterling; is that correct?

15 A That's correct.

16 Q Is it fair to say that you mentioned to him you had

17 responded to a questionnaire from the Postal Service?

18 A No. He told me he had a copy of the questionnaire.

19 Q He raised that first?

20 A Yes, he did.

21 Q Are you certain of that?

22 A I am not certain, but I remember him talking about

23 it.
24 Q So, it's possible that you in complaining may have
25 mentioned something about the questionnaire, and he may

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4990
Henderson-Nikoi-cross/Trabulus


1 have said I know about it? Is that possible?

2 A That's possible. But he told me what was on my

3 questionnaire.

4 Q When you were speaking to the people from the

5 government, did any of them tell you that the

6 questionnaires that were filled out by the people who they

7 actually would be calling as witnesses such as yourself,

8 were not physically given over to the attorneys for the

9 defendants until three weeks before the trial began? Did

10 anyone tell you that?

11 A No, they did not.

12 Q You have Exhibit 42-E there, is that a letter you

13 wrote?

14 A Yes.

15 Q And I think it is fair to say based on your

16 testimony, that at some point in time you did want a

17 refund from Sterling; is that correct?

18 A Yes.

19 Q And I believe in testifying you may have described

20 that particular letter as a letter asking for a refund; do

21 you recall that?

22 A Excuse me? Can you restate that?

23 Q When you were testifying with respect to a question
24 from Ms. Scott, I believe, you said that that particular
25 letter asked for a refund; is that c orrect?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4991
Henderson-Nikoi-cross/Trabulus


1 A I don't recall saying that.

2 Q Okay.

3 Maybe I misheard you, it's possible.

4 Is that correct that that letter doesn't ask for

5 a refund, but it does claim about getting a second bill

6 for the directory?

7 A Yes.

8 Q Now, you remember -- so, withdrawn.

9 And that letter itself, at the time it was

10 written, you weren't telling Sterling that you wanted a

11 refund, you were just saying I don't want to pay extra for

12 the directory; is that fair to say?

13 A I can't answer yes or no to that question.

14 Q It is correct you didn't ask for a refund in that

15 letter?

16 A Yes, I don't see it.

17 Q It is also correct that you apparently, quite

18 legitimately complain that based on your conversation with

19 Ms. Brady you shouldn't have to pay extra for the

20 directory; is that correct?

21 A Can I read this letter?

22 Q To yourself, sure.

23 A Okay.
24 (Whereupon, at this time there was a pause in the
25 proceedings.)

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4992
Henderson-Nikoi-cross/Trabulus


1 A Okay, I have read it.

2 Q Is it fair to say aside from going through the

3 conversations that you testified about here, in that

4 letter what you are basically saying is I shouldn't have

5 to pay extra in light of my conversations with Ms. Brady?

6 A Yes.

7 Q And you recall quite distinctly that you did pay the

8 $258 and change initially; is that correct?

9 A Yes, I did.

10 Q And you are not sure whether or not you actually did

11 have to pay anything extra before you did get the

12 directory; is that corre ct?

13 A State that again?

14 Q I think Ms. Scott asked whether you ever paid this

15 additional amount for which you were billed, and you said

16 you didn't know?

17 A Correct.

18 Q Now, there came a point in time that you were

19 contacted by an individual from Sterling that was more

20 recent than the things we were talking about; is that

21 correct?

22 A Yes.

23 Q And you told the persons that had spoken to you that
24 you were asked what you were expecting to get from
25 purchasing a membership? Do you recall that? One of the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4993
Henderson-Nikoi-cross/Trabulus


1 first things he asked you?

2 A Yes.

3 Q And he said -- you said that you expected to get your

4 name entered into a book, and entered into a CD-ROM; do

5 you recall saying that?

6 A No, I don't.

7 Q Do you recall -- were you expecting to get your name

8 into a CD-ROM?

9 A Cathy Brady mentioned that when your name was

10 included in the book you automatically had your name

11 included in the CD-ROM.

12 Q I wasn't asking if you expected to receive a CD-ROM,

13 but were you told that your name would be entered into

14 one?

15 A Yes, she did tell me that.

16 Q I am going to show you this laptop computer that has

17 something that is previously marked as

18 Defendant's Exhibit S in it.

19 (Handed to the witness.)

20 Q Do you see something on the screen about yourself?

21 A Yes, I do.

22 Q That's the information you gave when you were -- when

23 you bought your Sterling membership?
24 A Yes, it is.
25 Q Now, I am pushing another name on the screen,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4 994
Henderson-Nikoi-cross/Trabulus


1 bringing up another name. M.K. John, do you know M.K.

2 John at all?

3 A No.

4 Q It is another person at George Mason University,

5 according to the screen; is that correct?

6 A According to the screen.

7 Q And you were not expecting, were you, to call or

8 write other members yourself; is that right?

9 A That's what I was going to use the book for.

10 Q Well, when you spoke to the person from the Postal

11 Service, did that person ask you as to whether you would

12 call or write other members? Do you recall that?

13 A No.

14 Q Do you recall that person -- was it a man or woman

15 who called you?

16 A More than likely it was a man.

17 Q Did he ask you as to whether you were hoping other

18 members would call or write to you; did he ask you that?

19 Do you recall that?

20 A No, I don't.

21 Q I don't know if this would refresh your recollection

22 or not, but I will show you 3500-AN-2 for Identification.

23 (Handed to the witness.)
24 I don't know if you ever saw that. Did you see
25 that when you were talking to any of the people in the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4995
Henderson-Nikoi-cross/Trabulus


1 government?

2 A No.

3 Q Did they show that to you?

4 A No.

5 Q Does this refresh your recollection as to what you

6 told the man who was interviewing you on the phone from

7 the Postal Service?

8 A Okay.

9 Q Does it refresh your recollection in response to the

10 question as to whether you were planning to call or write

11 other members, and you said no?

12 A No. I thought I said yes to that question.

13 Q Did you say yes, that you were hoping other members

14 would call or write you?

15 A Yes, I thought I said yes to that, but it is no in

16 the book.

17 Q In terms of other members calling or writing you, I

18 guess it was your hope that that would come from the

19 CD-ROM or the directory?

20 A The directory.

21 Q Indeed, your name, as you see now, was in the

22 directory?

23 A Yes, I saw that.
24 Q It was also in the CD-ROM from what you can see; is
25 that correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4996
Henderson-Nikoi-cross/Trabulus


1 A Yes.

2 Q In that respect, you got -- what you were told would

3 happen, would happen; is that correct? You were published

4 in a book and your name was on a CD-ROM directory?

5 A No. I didn't get everything that I was told was

6 going to happen.

7 Q You said you got the directory somewhat later than

8 you were told; is that correct?

9 A That is correct.

10 Q You were told about the magazine; is that correct?

11 A Yes, I was.

12 Q You got that?

13 A Yes, I did get the magazine.

14 Q I take it you read the magazine?

15 A One issue, I read a couple of pages.

16 Q Did you get additional pages?

17 A Yes, I did.

18 Q Did you read those?

19 A I trashed them. I was dissatisfied with the magazine

20 at that point.

21 Q Dissatisfied with the magazine?

22 A With the company.

23 Q So your decision to trash the magazine was based on
24 the fact that you were dissatisfied with the company?
25 A That's correct.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4997
Henderson-Nikoi-cross/Trabulus


1 Q And that is because you hadn't received the directory

2 at that point; is that correct? And you had been asked to

3 pay extra for it?

4 A It is because I felt they were giving me misleading

5 information, and I was not invited to any conferences or

6 seminars, as Ms. Brady stated for networking.

7 Q When you looked through the magazine did you see any

8 advertisements for any seminars or magazines?

9 A I can't recall. It has been a long time.

10 Q If you had looked at the magazine and seen something

11 in there about a seminar, do you feel it might have

12 changed your opinion concerning the company?

13 A No. I was very dissatisfied by then.

14 Q Even if there was something in one of the magazines

15 which might have invited you to a seminar that you would

16 have to pay for, would it at least borne out some of your

17 expectations about a seminar?

18 A No. Because Ms. Brady said I would get a

19 personalized invitation to a seminar or conference, free

20 of charge. That was part of the membership.

21 Q You would get a free of charge invitation?

22 A Yes.

23 Q And everything would be all paid for?
24 A She said those seminars and conferences would be held
25 in my local area, Washington, D.C.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4998
Henderson-Nikoi-cross/Trabulus


1 Q And that's what Ms. Brady told you?

2 A Yes.

3 Q Is that correct?

4 A Yes.

5 Q Are you aware that Ms. Brady is not here in this

6 courtroom today? Did anybody tell you that?

7 A I have never met her, so I wouldn't know.

8 Q Did you ask the prosecutors in this case as to

9 whether or not Ms. Brady was charged with any crime?

10 A No, I did not.

11 MR. TRABULUS: No further questions.

12

13 CROSS-EXAMINATION

14 BY MR. SCHOER:

15 Q Ms. Nikoi, good afternoon.

16 A Good afternoo n.

17 Q You belong to an association called the National

18 Association of Female Executives; is that correct?

19 A I did at one time.

20 Q Do you know whether or not -- do you know how you

21 were solicited to join the National Association of Female

22 Executives?

23 A I can't recall. It was a long time ago when I joined
24 that. So I don't recall.
25 Q Were you solicited through the mail?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
4999
Henderson-Nikoi-cross/Schoer


1 A I may have been. I was in college at the time. And

2 it was something that one of the organizations had listed,

3 an organization that we should look into.

4 Q And you were in college at the time; is that right?

5 A Yes.

6 Q And you weren't a female executive at the time, were

7 you?

8 A I was working full time and attending college full

9 time.

10 Q Were you working at the same job at George Mason?

11 A No, sir.

12 Q But as far as you remember, you might have been

13 solicited to join that organization by mail; isn't that

14 correct?

15 A That's possible.

16 Q Okay.

17 And do you remember whether the letter that you

18 received from the National Association of Female

19 Executives, indicated that you had been nominated or

20 selected in some way to join that organization?

21 A I don't recall.

22 Q That organization, did you have to pay a membership

23 fee in order to belong to that organization?
24 A I think that I did.
25 Q Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5000
Henderson-Nikoi-cross/Schoer


1 Was that an annual fee or a one time fee?

2 A It has been a long time. I can't recall. It was

3 before this.

4 Q All right.

5 Do you know whether that organization offered any

6 benefits for joining the organization?

7 A Yes, they did.

8 Q And did they have a magazine?

9 A Yes, they did.

10 Q Was the magazine -- well, the magazine had certain

11 information that related to female executives; is that

12 right?

13 A Yes.

14 Q And the sort of things that would relate to all

15 executives in how to handle certain situations, things

16 like that; is that right?

17 A If I recall correctly, yes.

18 Q Did it have information about doing business in other

19 countries in the magazine, in that magazine?

20 A I don't recall.

21 Q Other than the magazine, did that organization

22 provide the opportunity for attending seminars?

23 A Yes.
24 Q Did that organization provide an opportunity for
25 getting discounts with respect to various different items?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5001
Henderson-Nikoi-cross/Schoer


1 A Yes. They had a page listed in the magazine that

2 gave you listings of other companies you could call and

3 get discounts.

4 Q And some of those benefits of the National

5 Association of Female Executives, you took advantage of,

6 and other benefits you were not that interested in taking

7 advantage of; is that right?

8 A I am not sure if I took advantage of any of their

9 offers, I am not sure.

10 Q Okay.

11 You joined that organization. And even if you

12 didn't take advantage of any of the benefits, and even if

13 your name came from a mailing list, you got some value for

14 being part of that organization; isn't that so?

15 A Well, I can't answer that with a yes or no. I can

16 say one thing.

17 With that organization, they did send me

18 invitations for networking purposes, and I did attend a

19 seminar. So I will mention that.

20 Q Did you pay for that seminar?

21 A No. It was a women's seminar, and I don't recall

22 paying for it.

23 Q All right.
24 In any event, in answer to my question, with
25 respect to that organization, whether you utilized any of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5002
Henderson-Nikoi-cross/Schoer


1 the benefits available or your name came from a mailing

2 list, the organization had some value to you; isn't that

3 so?

4 A Yes. But I don't think my name came from a mailing

5 list.

6 Q But you are not sure though, right?

7 A I am not certain. It has been such a long time ago.

8 But I belong to another women's business fraternity, and

9 they gave us that name as well. So I don't think my name

10 came from a mailing list, because some other members knew

11 some of the executives.

12 Q Didn't you tell us before that you might have been

13 solicited through the mail for joining that organization;

14 isn't that correct?

15 A That's correct. But they --

16 Q Let me ask you this: Do you know whether that

17 organization, the National Association of Female

18 Executives, took a list of all the members and sold that

19 to other people so they could mail things to them?

20 A Can you restate that?

21 Q Do you know if that organization, the National

22 Association of Female Executives sold lists to other

23 people so those members can be solicited for any number of
24 other items?
25 A No, I didn't know that.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5003
Henderson-Nikoi-cross/Schoer


1 MR. SCHOER: I have no furt her questions. Thank

2 you.

3 THE WITNESS: You're welcome.

4

5 CROSS-EXAMINATION

6 BY MR. DUNN:

7 Q Good afternoon, Ms. Nikoi.

8 A Good afternoon.

9 Q My name is Thomas Dunn and I am one of the attorneys

10 here.

11 Ms. Nikoi, the person who was rude to you on the

12 phone, that was Tom Ransill or Tom Randall; is that

13 correct?

14 A Yes.

15 Q Would it surprise you to know that that person is not

16 in this courtroom?

17 A No, I didn't know if he was going to be here or not.

18 Q And Mike Powers, Mike Powers isn't in this

19 courtroom? , the person you dealt with also on the phone;

20 is that correct?

21 A Correct.

22 Q Now, how long have you been with George Mason

23 University?
24 A About five years.
25 Q Before you were contacted by this Sterling Who's Who,

HARRY RAPAPORT, C SR, CP, CM OFFICIAL COURT REPORTER
5004
Henderson-Nikoi-cross/Dunn


1 you were employed by or with George Mason; is that

2 correct?

3 A Yes.

4 Q And George Mason University has a law school; is that

5 correct?

6 A Yes.

7 Q As an accountant with George Mason, do you do the

8 whole university's accounting?

9 A No, I am only one person in a large department.

10 Q And now, you were concerned about whether this was a

11 genuine Who's Who; is that correct?

12 A Yes.

13 Q And at a university like George Mason, there are an

14 awful lot of research tools to take advantage of; is that

15 correct?

16 A Yes.

17 Q And in fact, your supervisor made mention to you

18 about a Who's Who dealing with colleges and universities;

19 is that correct?

20 A Yes.

21 Q Did you make any effort to go to one of the

22 libra ries, either the law school library or university

23 library at George Mason, to see if there was a Who's Who
24 of Colleges and Universities at that library? Yes or no?
25 A No. The law school is not on the same campus.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5005
Henderson-Nikoi-cross/Dunn


1 Q But you didn't go to the university library; is that

2 correct?

3 A Correct.

4 Q Now, is it fair to say that if you went to that and

5 looked at that and found it, it might say who the

6 publisher was; is that correct?

7 A Correct.

8 Q Now, you said you wanted to do some networking; is

9 that correct?

10 A Correct.

11 Q And you also said you hung up this nice plaque on the

12 wall of your house; is that right?

13 A That's right.

14 Q And family members saw that?

15 A Yes, they did.

16 Q Is that like aunts, uncles, cousins, people like

17 that?

18 A No. My parents and my siblings.

19 Q And when your parents first saw it they commented on

20 it; is that correct?

21 A Yes, they did.

22 Q They were proud of it; is that right?

23 A Yes.
24 Q And that made you feel good, didn't it?
25 A Yes, it did.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5006
Henderson-Nikoi-cross/Dunn


1 Q In fact, when you got that plaque you felt good,

2 didn't you?

3 A I thought it was nice. I had received others.

4 Q You were pleased you were going to be in a Who's Who;

5 is that right?

6 A I had been --

7 Q Yes or no.

8 A Yes.

9 Q And when you got the plaque you were impressed; is

10 that right? Yes or no?

11 A I don't know if impressed would be the word that I

12 would use.

13 Q When you lear ned you were being considered for a

14 Who's Who, you were pleased about that; is that correct?

15 A Yes, sir.

16 Q And it made you feel good; is that right?

17 A Yes, it did.

18 Q You got the plaque and hung it up; is that right?

19 A Yes, I did.

20 Q And people saw it and they were impressed; is that

21 right?

22 A Yes, they were.

23 Q And that made you feel good?
24 A Yes. It did.
25 Q Isn't it a fact Ms. Nikoi, that you -- it didn't

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5007
Henderson-Nikoi-cross/Dunn


1 matter where your name came from, you were pleased and

2 happy to be included in a Who's Who; is that true?

3 A No, it is not.

4 Q Ma'am, you did not make any effort to find out, you

5 were at a university, your supervisor told you about the

6 Colleges and Universities Who's Who, and you didn't check

7 it out, did you?

8 A She told me to ask the person on the phone, the

9 representative, if they belong to Who's Who among Colleges

10 and Universities, and I did so.

11 MR. DUNN: Move to strike as not responsive.

12 THE COURT: Motion granted. Strike the answer.

13 Q Ma'am --

14 THE COURT: Wait a minute.

15 MR. DUNN: I apologize.

16 THE COURT: Strike the answer as not responsive,

17 and the jury is instructed to disregard it.

18 You will be asked questions asking for a yes or

19 no. If you can't answer the question yes or no, say you

20 can't answer yes or no. Rather than make an explanation.

21 THE WITNESS: Yes, sir.

22 Q Ms. Nikoi, your supervisor told you about the

23 Colleges and Universities Who's Who; is that correct?
24 A Yes.
25 Q Is that right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5 008
Henderson-Nikoi-cross/Dunn


1 A Yes.

2 Q And you yourself had graduated from college at that

3 point, correct?

4 A Yes.

5 Q All you had to do was walk over to your library and

6 do a little research, correct? That's all you had to do;

7 is that right?

8 A Right.

9 Q You didn't do it, right? You didn't walk over to

10 that library, right?

11 A No, I did not.

12 Q And you said you were concerned with whether it was a

13 genuine Who's Who; is that correct?

14 A Yes.

15 Q And did you tell -- withdrawn.

16 Did you call -- withdrawn.

17 Did you first get something in the mail

18 concerning this Sterling Who's Who?

19 A Yes.

20 Q When you got that, did you call any state agency in

21 Virginia to see if it was a bona fide company?

22 A The agency --

23 Q Please listen to the question.
24 On th e day you received and opened the letter,
25 did you make any calls to any agency in the State of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5009
Henderson-Nikoi-cross/Dunn


1 Virginia concerning the bona fides of Sterling Who's Who;

2 yes or no?

3 A No, I did not.

4 Q Did you call anyone or any agency a few miles away in

5 Washington, D.C., to find out -- any federal agency to

6 find out the bona fides of Sterling Who's Who?

7 A Yes, I called an agency.

8 Q On the day of the letter?

9 A No, not the day of the letter.

10 Q Did you call before you spoke to Cathy Brady?

11 A No, I did not.

12 MR. DUNN: No further questions, your Honor.

13

14 CROSS-EXAMINATION

15 BY MR. LEE:

16 Q Good afternoon, Ms. Nikoi.

17 A Good afternoon.

18 Q You stated you did feel pretty good when you received

19 a plaque?

20 A Yes.

21 Q Something like that?

22 A Yes.

23 Q And did the government bother to tell you -- let me
24 make sure I am correct, you received an MBA; is that
25 correct?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5010
Henderson-Nikoi-cross/Lee


1 A Yes.

2 Q In accounting?

3 A Yes.

4 Q A pretty difficult subject and not too many people

5 can do that, right? It takes a lot of hard work?

6 A Yes.

7 Q It was a joint degree, right? It was something with

8 biology?

9 A I have a BGS in biological studies.

10 Q So, it is a joint degree?

11 A No, it is not.

12 Q You have a masters --

13 A I have two degrees. I thought you meant the BGS in

14 biology.

15 Q You have two degrees?

16 A Yes.

17 Q Advanced degrees.

18 Did the government bother to tell you -- you said

19 you felt good. Did they tell you that this organization,

20 Who's Who Worldwide might never have even contacted you,

21 unless you met certain criteria within your organization,

22 did they tell you that?

23 A Who's Who Worldwide?
24 Q Did the government tell you that this organization,
25 they might not have contacted you, unless you were a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5011
Henderson-Nikoi-cross/Lee


1 person who obtained a certain level of education? Did

2 they tell you that?

3 A I didn't know Who's Who Worldwide -- I was

4 contacted -- not contacted --

5 Q Excuse me, Sterling Who's Who. We are now on the

6 same page.

7 A Okay.

8 Q Did the government ever inform you that you never

9 would have been contacted unless you had attained a

10 certain level of education, did they tell you that?

11 A No, they did not.

12 Q You weren't aware if you weren't of a certain status

13 or income level, you might not have received an invitation

14 from this Sterling Who's Who? Did they tell you that?

15 A No, they did not.

16 MR. LEE: I have no further questions.

17 THE COURT: Anything else, anyone else?

18 MS. SCOTT: I have redirect.

19

20 REDIRECT EXAMINATION

21 BY MS. SCOTT:

22 Q Ms. Henderson-Nikoi, do you remember being asked

23 questions on cross-examination as to whether you knew you
24 were nominated?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5012
Henderson-Nikoi-redirect/Scott


1 Q And you testified that you really don't know one way

2 or the other?

3 A Yes.

4 Q Up mentioned on cross-examination you are a member of

5 the National Association of Female Executive s?

6 A Yes.

7 Q And are you currently a member of that?

8 A No, I am not.

9 Q When were you a member?

10 A In 1990 -- I think I joined, I am not certain. It

11 was probably when I was in grad school. So probably 1990

12 through 1994, if I am not mistaken.

13 Q So, you were a member of the National Association of

14 Female Executives around the time you were approached by

15 Sterling Who's Who?

16 A Yes.

17 Q And is there an acronym for that association?

18 A NAFE, N A F E.

19 Q I will show you Government's Exhibit 271, which is in

20 evidence.

21 (Handed to the witness.)

22 I will ask you to compare this line by line with

23 Government Exhibit 42-F, as in Frank, which is also in
24 evidence.
25 (Whereupon, at this time there was a pause in the

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5013
Henderson-Nikoi-redirect/Scott


1 proceedings.)

2 MR. JENKS: What is the exhibit?

3 MS. SCOTT: 271.

4 Q Is Government's Exhibit 271 a solicitation letter

5 from Sterling Who's Who?

6 A Yes, it is.

7 Q And is it identical to the one you received,

8 Government's Exhibit 42-F?

9 A Yes, it is.

10 Q It is identical, except for the name of the person to

11 whom it is addressed; is that correct?

12 A Correct.

13 Q Okay.

14 Now, if you look at Government's Exhibit 271,

15 does it have some writing at the top, some handwriting?

16 A Yes.

17 Q Can you tell us what that handwriting says.

18 A It says list dash files, F I L E S, house, colon,

19 omni, list colon NAFE.

20 Q When you say NAFE, do you recognize that?

21 A Yes.

22 Q What do you recognize it to be?

23 A The National Association of Female Executives.

24 Q And the word before that acronym is you said Liz or
25 list?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5014
Henderson-Nikoi-redirect/Scott


1 A List, L I S T.

2 Q What does it say below that?

3 A Proj, P R O J, colon, 156,000. And below that it

4 says no code.

5 Q Now, do you remember Mr. Jenks showing you your card

6 that you filled out? And I am talking about

7 Government's Exhibit 42-D, as in Daniel.

8 A Yes.

9 Q And do you recall him asking you if a code appeared

10 on that card?

11 A Yes.

12 MS. SCOTT: Your Honor, may I publish

13 Government's Exhibit 271, 42-F, as in Frank, and 42-D, as

14 in Daniel?

15 THE COURT: All in evidence?

16 MS. SCOTT: Yes.

17 THE COURT: You may.

18 (Whereupon, the exhibit/exhibits were published

19 to the jury.)

20 Q Now, Ms. Nikoi , do you remember being asked questions

21 what you did with the plaque?

22 A Yes.

23 Q Do you remember testifying it was up originally on
24 the wall and now it is down?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5015
Henderson-Nikoi-redirect/Scott


1 Q Can you tell us the sequence of events that took

2 place with respect to the plaque?

3 A Initially I put it up when I received it. And then

4 when I was dissatisfied with the company, I took it down.

5 I since then moved. I bought a home. And we had

6 a wall behind a door that my son and friend thought we

7 should put that plaque up there. So it stayed there. And

8 I took it down.

9 Q When did you take it down?

10 A I took it down -- well, it has been off and on,

11 because my son puts it back on behind the door. It was

12 taken down again on yesterday.

13 Q When was the first time you took it down before your

14 son put it back up?

15 A Okay. It was over a year ago.

16 Excuse me, you said the first time I took it

17 down?

18 Q Well, the first time you took it down off that back

19 wall that your son kept putting it back up again?

20 A It was a few days after he first put it up there, it

21 was taken down.

22 Q Now, do you remember being asked questions about your

23 conversation in 1996 with Michael Powers on
24 cross-examination, I mean?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5016
Henderson-Nikoi-redirect/Scott


1 Q And do you remember being asked if it was possible

2 that you said to Mr. Powers -- I am sorry, withdrawn.

3 Do you remember you were asked if it was possible

4 that you told Mr. Powers in that conversation about the

5 quest ionnaire?

6 A Yes, I recall.

7 Q And you also remember testifying that he said

8 something to you about the questionnaire?

9 A Yes.

10 Q What did he say specifically, to the best of your

11 recollection?

12 A I remember him telling me that he had a copy of the

13 questionnaire that I completed for the Postal Services,

14 and he knew I complained, because he had a copy of my

15 complaint letter, and that is why he was calling me.

16 MS. SCOTT: Thank you, your Honor. No further

17 questions.

18 THE COURT: Anything else?

19 MR. NEVILLE: May I take a look at 42-F for a

20 moment, before the witness leaves?

21 THE COURT: Surely.

22 MR. NEVILLE: Thank you.

23 THE COURT: Anything else?
24 MR. NEVILLE: Nothing else.
25 MR. SCHOER: I have a question if I can ask it

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5017
Henderson-Nikoi-recross/Schoer


1 from here.

2

3 RECROSS-EXAMINATION

4 BY MR. SCHOER:

5 Q Ms. Nikoi, the organization you are talking about,

6 NAFE, N A F E, you believe it to be a good and reputable

7 organization; is that correct?

8 A That's what we were told.

9 Q That's what you believed after you joined the

10 organization, and even after you were in the organization

11 for a while; is that so?

12 A Yes.

13 Q And that organization is how Sterling got your name;

14 isn't that right?

15 A I am not sure. You are telling me that now.

16 Q But that's what you seem to have learned from sitting

17 there today; isn't that so?

18 A Yes.

19 Q But that was a good, reputable organization as far as

20 you knew?

21 A As far as I knew of.

22 Q It was an honor to be in that organization as far as

23 you knew?
24 A Yes, that's what we were told.
25 MR. SCHOER: That's all.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5018
Henderson-Nikoi-recross/Trabulus


1 MR. TRABULUS: Your Honor, very briefly.

2

3 RECROSS-EXAMINATION

4 BY MR. TRABULUS:

5 Q In total, how many conversations did you have with

6 Mike Powers?

7 A Just one, he called me once.

8 Q The time that he called? You had not spoken to him

9 previously?

10 A No, I had not.

11 MR. TRABULUS: No further questions.

12 THE COURT: Call your next witness.

13 MS. SCOTT: I am sorry, I have redirect.

14 THE COURT: Go ahead.

15

16 FURTHER REDIRECT EXAMINATION

17 BY MS. SCOTT:

18 Q Was being a member of NAFE the same as being

19 nominated by a supervisor for a membership in Sterling

20 Who's Who?

21 A No.

22 Q If you were in fact taken from a mailing list at the

23 time of your purchase from Sterling Who's Who is that
24 something you would have wanted to know?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5019
Henderson-Nikoi-redirect/Scott


1 MR. DUNN: Objection. Improper re-redirect.

2 THE COURT: Overruled.

3 A Yes. That's the difference. Sterling said in their

4 letter was nominated; I was nominated, that's what Cathy

5 Brady told me. I was nominated by a supervisor. She did

6 not state I got -- she got the name from a mailing list,

7 the two things are different in my opinion.

8 MS. SCOTT: That's all.

9

10 FURTHER RECROSS EXAMINATION

11 BY MR. JENKS:

12 Q To this date, is it fair to say that you don't know

13 whether you were nominated by a supervisor or anyone else;

14 is that correct?

15 A Cor rect.

16 MR. SCHOER: If I may.

17

18 FURTHER RECROSS EXAMINATION

19 BY MR. SCHOER:

20 Q You testified before you are not sure how NAFE got

21 your name; is that so?

22 A That's so, but the organization that I belong to gave

23 us NAFE as a good networking tool. So I knew in the
24 future I should be contacted by NAFE.
25 Q You knew that NAFE was an organization that had

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5020
Henderson-Nikoi-recross/Schoer


1 prestige and honor; is that so?

2 A Yes, that's what we were told.

3 Q But you don't know how NAFE got your name for you to

4 be included in NAFE; is that so?

5 A No, I would say that's so, the organization --

6 Q You don't know if NAFE got your name from a mailing

7 lists, do you, of your own personal knowledge?

8 A I can't give you a yes or no, but I can e xplain it to

9 you.

10 Q Let me ask you, of your own personal knowledge, do

11 you know how NAFE got your name?

12 A I was told how they would get my name by the

13 fraternity I was with at the time I was in college.

14 Q And your fraternity may have provided them with a

15 hundred names, correct?

16 A Yes.

17 Q And you don't know whether or not they contacted all

18 hundred people or just contacted the people they got from

19 a mailing list, do you?

20 A No, I don't.

21 MR. SCHOER: Thank you.

22 THE COURT: Anything else?

23 MS. SCOTT: Nothing further.
24 THE COURT: You may step down.
25 Call your next witness.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5021
Henderson-Nikoi-recross/Schoer


1 (Whereupon, at this time the witness left the

2 witness stand.)

3 MS. SCOTT: The government call s Terry Swinney,

4 S W I N N E Y.

5 THE COURT: Raise your right hand.

6

7 T E R R Y L E E M A R V I N S W I N N E Y ,

8 called as a witness, having been first

9 duly sworn, was examined and testified

10 as follows:

11

12 THE COURT: Please be seated. State your full

13 name and spell your name.

14 THE WITNESS: Terry Lee Marvin Swinney,

15 S W I N N E Y.

16

17 DIRECT EXAMINATION

18 BY MS. SCOTT:

19 Q Good afternoon, Mr. Swinney.

20 A Good afternoon.

21 Q Can you tell us where you live?

22 A Glassboro, New Jersey.

23 Q And how are you employed?
24 A Employed by the Boeing Information Space and Defense
25 Systems, Rotorcraft Division, like helicopters, in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5022
Swinney-direct/Scott


1 Philadelphia.

2 Q In Philadel phia?

3 A Yes.

4 Q Can you tell us what you do for them?

5 A I am the manager of office and food services. That's

6 the current title. If you want to know what I do, there

7 are 16 different jobs.

8 Q Can you tell us what those jobs are.

9 A Food service, recreation, discounts, budgets, office

10 supplies, policies and procedures, records management,

11 Xerox equipment and maintenance. I think I named them

12 all.

13 Q How long have you held this position?

14 A The current position is about three years.

15 Q And what did you do just before that?

16 A I was the employee services manager for the division.

17 THE COURT: What is the name of the company you

18 work for, Boeing?

19 THE WITNESS: Boeing.

20 THE COURT: The same Boeing that makes these

21 airplanes?

22 THE WITNESS: Yes.

23 THE COURT: You are in the helicopter divisio n?
24 THE WITNESS: Yes, sir.
25 THE COURT: Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5023
Swinney-direct/Scott


1 Q What did you say you did right before that?

2 A I was called the employee services manager. I still

3 am, but it is branched out a little bit from that.

4 Employee services took care of recreation,

5 recognition, service awards, food service, budgets,

6 suggestions. Those are the things I did.

7 Q How long did you hold that position?

8 A Approximately five years.

9 Q And have you ever heard of a company called Who's Who

10 Worldwide?

11 A I have in the past, yes.

12 Q Did you make any purchases from that company?

13 A Yes, I did.

14 Q What did you purchase?

15 A I purchased a registry, a membership, a first time

16 membership of five years, and a following membership which

1 7 was a life membership, a registry and a CD-ROM.

18 Q Now, do you remember how you were first contacted by

19 the company Who's Who Worldwide?

20 A I believe it was by mail.

21 It gets a little fuzzy at this point, 1993,

22 probably February. There was a mailing that came to me.

23 I believe there was a card in it. And I returned the card
24 back to Who's Who.
25 Q I am now showing you Government's Exhibit 11-G, for

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5024
Swinney-direct/Scott


1 George, for Identification.

2 (Handed to the witness.)

3 Q Do you recognize that?

4 A Yes, I do.

5 Q What is that?

6 A It looks like the original letter that was mailed to

7 me at Boeing Helicopters.

8 MS. SCOTT: I offer Government's Exhibit 11-G.

9 THE COURT: Any objection?

10 MR. TRABULUS: No.

11 THE COURT: Go vernment's Exhibit 11-G, for Gorge,

12 in evidence.

13 (Government's Exhibit 11-G received in evidence.)

14 Q Can you read us the first two paragraphs of that

15 letter slowly.

16 A You were recently nominated for possible inclusion in

17 the Who's Who Registry of global business leaders.

18 We are pleased to inform you that on February

19 16th the office of public affairs accepted your candidacy

20 and is looking forward to your inclusion in the registry

21 of global business leaders.

22 Q Now, you mentioned a card at some point you sent in?

23 A Yes.
24 Q I am showing you Government Exhibit 11-D as in
25 Daniel.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5025
Swinney-direct/Scott


1 Do you recognize that?

2 A That is my handwriting.

3 Q What is that document?

4 A This is your invitation, is what it say s at the top.

5 And please include me as a candidate for inclusion in the

6 Who's Who Registry of global business leaders, 1993-94

7 edition.

8 Q Is that the card you returned to the company?

9 A Yes, it is.

10 MS. SCOTT: I offer Government's Exhibit 11-D, as

11 in Daniel.

12 THE COURT: Any objection?

13 Government's Exhibit 11-D, for Dog in evidence.

14 (Government's Exhibit 11-D received in evidence.)

15 THE COURT: Now we will take a ten-minute

16 recess.

17 Please do not discuss the case. Keep an open

18 mind.

19 Does the jury still have some of these exhibits?

20 THE JURORS: Yes.

21 THE COURT: Why don't you leave it on your seat

22 and take it up when you come back.

23 (Whereupon, at this time the jury left the
24 courtroom.)
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5026
S winney-direct/Scott


1 (Whereupon, a recess is taken.)

2

3 MR. DUNN: Before the jury comes out, can you

4 give a limiting instruction on the last witness, because

5 she only dealt with Sterling Who's Who, at a time you find

6 appropriate?

7 THE COURT: Any objection to that?

8 MS. SCOTT: No objection.

9 THE COURT: You mean Ms. Andrea Henderson-Nikoi?

10 MR. DUNN: Yes.

11 (Whereupon, the jury at this time entered the

12 courtroom.)

13 THE COURT: Please be seated, members of the

14 jury.

15 Members of the jury, the witness that -- the

16 previous witness, Andrea Henderson-Nikoi, her testimony

17 was offered only against the defendant Sterling Who's

18 Who.

19 You may proceed.

20 MR. WHITE: Thank you, your Honor.

21

22 DIRECT EXAMINATION (cont'd)

23 BY MS. SCOTT:
24 Q Mr. Swinney, if you can take a look at
25 Government's Exhibit 11-D, the card you filled out.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5027
Swinney-direct/Scott


1 A Yes.

2 Q Do you see a code in the bottom right-hand corner

3 printed on the form?

4 A GA group.

5 Q GA group. Is there another letter after that?

6 A T as in Tom.

7 Q If you turn it over to the address part of it, can

8 you read off the postmark.

9 A No, I can't. It is only partially legible. It says

10 only 1993, and there is a March, it looks like 1 before

11 the March. But it doesn't -- I can't -- there is a zero

12 eight zero on the upper right of the circle. That's about

13 all I can read of it.

14 Q Okay, thank you.

15 What happened after you mailed that letter, that

16 card, back to the company?

17 A I believe I received a telephone call from someone

1 8 representing Who's Who Worldwide.

19 Q Did you have a conversation with that person?

20 A Yes, I did.

21 Q And what happened in your conversation?

22 A During that conversation -- actually, prior to the

23 conversation I did ask some questions in my own company
24 about who may have nominated me. I am a government
25 contractor, and we can't accept things from a supplier; or

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5028
Swinney-direct/Scott


1 people who may receive some influence if they gave me a

2 nomination. So, I asked those kind of questions before I

3 actually received a phone call. All of that turned out

4 negative. I couldn't find anybody who knew I was

5 nominated, or that I was nominated, or that nominated me.

6 During that phone conversation, a female told me

7 that I had been nominated, and based on my credentials I

8 would go before a board. It -- she made me feel I was one

9 out of a million people who were nominated, and only a

10 very few select people would ever be given the opportunity

11 to join Who's Who Worldwide. It makes you feel kind of

12 important at the moment, thinking about it.

13 She ask me, asked me some questions what I did

14 about leisure time, maybe what my favorite book that I had

15 read was, what type of publications I read, things like

16 that, and for a bio to be filled out. And that bio goes

17 before the board. And the board would see if I was

18 selectable before Who's Who, based on the information I

19 provided.

20 Q What, if anything, did she say about how members in

21 general were selected for membership?

22 A It was purely a nomination by an existing member;

23 that my name was provided as the nomination.
24 I asked who nominated me. And she said it was
25 strictly confidential. They did not provide that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5029
Swinney-direct/Scott


1 information to anybody.

2 I believe her words were that it was an anonymous

3 nominator.

4 Q Now, what, if anything -- did you ask any other

5 questions during the conversation?

6 A Probably a lot. Five years ago, and it kind of fades

7 after time.

8 Q I will show you something that may refresh your

9 recollection, and this is Government's Exhibit 3500-TLM

10 S-1.

11 (Handed to the witness.)

12 Q Does that refresh your recollection about any other

13 questions you might have asked?

14 A Yes, it does.

15 I did ask a question about a mailing list, as to

16 whether it was just a random mailing list that they got

17 the name from. I was told, no, it truly was a nomination,

18 and it was an anonymous recommendation to the board, that

19 I would be nominated to this position.

20 Q Now, what, if anything, were you told you would get

21 if you would purchase a membership?

22 A I would get the registry, and I could go and network

23 with other people, I could network, where they would have
24 network opportunities for me to take advantage of; I would
25 receive a monthly publication, I believe it is called

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5030
Swinney-direct/Scott


1 Tribute; that there would be a press release going out in

2 my name to the other people on the board to say that I had

3 been accepted if I truly was accepted, and that's my name

4 would be put on the registry, put on a CD-ROM, and other

5 things where I could use the Who's Who logo on my business

6 card or for my letterhead, or things like that.

7 Q Now, of all the things told to you during the

8 conversation, which was the most important toward leaning

9 you to purchase this membership?

10 A That I was nominated by somebody. Even if it was

11 anonymous, I felt maybe somebody recognized what I had

12 done, how I had done it, what I had done in the past, and

13 recognized me for the that and nominated me to Who's Who

14 Worldwide.

15 Q How did you intend to use the membership?

16 A A networking process. I look at what I do for the

17 Boeing company in Philadelphia, and try to enhance my

18 position with the employees. My role is to enhance what I

19 can supply to the employees of that division. And through

20 a networking process, in other words, as the food service

21 liaison for the company, I would be able to ask other food

22 service people what did they do, how they do it, how did

23 their contract work? And I would be also asking how their
24 recognition program, or suggestion program works? What
25 type of discount programs do you run? Things like that to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5031
Swinney-direct/Scott


1 actually benefit the whole of the company and not just

2 myself.

3 Through that networking, it sound really great.

4 But the book doesn't tell you all those things, and

5 neither does the CD-ROM. In fact, I thought the CD-ROM

6 was a piece of junk.

7 Q I was going to get to that in a second.

8 Going back to the reasons why you purchased, how

9 did your belief that the members were nominated, relate to

10 your belief of how you can use this for networking?

11 A Being nominated I felt it put me a little ago above a

12 mailing list, not a bit, but quite a bit above a mailing

13 list. Anybody ca n get a phone book and pull it out and

14 write names and addresses down and sends an anonymous

15 letter to them.

16 I could have taken the Boeing directory and

17 talked to people like myself in the Boeing company, since

18 it has about 150,000 employees.

19 But to talk to other industry leaders, to other

20 major corporations throughout the world, to ask those type

21 of questions, to ask what they do and how they do things;

22 to maybe better the employee base at the Helicopters

23 Division in Philadelphia. That's the type of things I
24 looked to do.
25 Q So, if your name was taken from a mailing list,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5032
Swinney-direct/Scott


1 instead of being obtained by nomination, would you still

2 have purchased that membership?

3 A I don't believe I would have at all. I don't even

4 believe I would have talked to them.

5 Q Now, do you remember how much you paid for the

6 membership you purchased?

7 A I want to say it was like $397 for the initial five

8 year membership.

9 Q Do you remember how you paid?

10 A Master Card or Visa. I can't honestly tell you which

11 one. But it was one of those two.

12 Q I will show you Government's Exhibit 11-B as in

13 Baker, for Identification.

14 Do you recognize that?

15 (Handed to the witness.)

16 A Yes, I do. This is the document, or at least a

17 similar document that they sent back to me, confirming

18 that my invoice was paid either by Visa or Master Card.

19 MS. SCOTT: I offer Government's Exhibit 11-B, as

20 in Baker.

21 THE COURT: Any objection?

22 MR. TRABULUS: No.

23 THE COURT: Government's Exhibit 11-B, for Baker,
24 in evidence.
25 (Government's Exhibit 11-B received in evidence.)

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5033
Swinney-direct/Scott


1 Q Mr. Swinney, if you look at that document for a

2 moment, there are a couple of boxes about a third of the

3 way down the page.

4 Do you see a box that says approved by?

5 A Yes.

6 Q Can you tell us what appears in that box?

7 A L W, Lima Whiskey.

8 Q I am going to also though you

9 Government's Exhibit 11-C, for Charles, which is in

10 evidence.

11 (Handed to the witness.)

12 Q Taking a look at the document, do you see any

13 information there about yourself?

14 A Yes, I do. It has my name, title, organization,

15 street address, city, business telephone.

16 Q Do you see a date on that document?

17 A 3/10 of '93.

18 Q Can you compare it with the date on the invoice,

19 Government's Exhibit 11-B ?

20 A The invoice is dated 3/11 of 93.

21 Q Going back to 11-C, does a person's name appear in

22 the upper right-hand corner?

23 A Yes.
24 Q What is that name?
25 A Laura.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5034
Swinney-direct/Scott


1 MS. SCOTT: Your Honor, I request permission to

2 publish 11-B, 11-C, 11-D -- have you offered 11-C for

3 Charley?

4 MS. SCOTT: It is in evidence.

5 THE COURT: Very well.

6 (Whereupon, the exhibit/exhibits were published

7 to the jury.)

8 Q I am showing you also 11-F, for Frank. Do you

9 recognize that?

10 (Handed to the witness.)

11 A Yes.

12 Q All right.

13 A This is the card I received back from them,

14 congratulations, you are confirmed --

15 THE COURT: We lost you, Mr. Swinney.

16 MS. SCOTT: I needed to offer it first in a ny

17 event.

18 I offer Government's Exhibit 11-F.

19 THE COURT: Any objection?

20 MR. TRABULUS: No.

21 THE COURT: Government's Exhibit 11-F for Fox, in

22 evidence.

23 (Government's Exhibit 11-F received in evidence.)
24 THE COURT: What is it, a letter?
25 THE WITNESS: A card.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5035
Swinney-direct/Scott


1 THE COURT: Does it have a date on it?

2 THE WITNESS: No, sir, it does not.

3 MS. SCOTT: May I publish that as well, your

4 Honor?

5 THE COURT: Yes.

6 (Whereupon, the exhibit/exhibits were published

7 to the jury.)

8 Q Now, did you receive a plaque, Mr. Swinney?

9 A Yes, I did.

10 Q Did you receive a directory?

11 A Yes, I did.

12 Q Did you receive any other billings from the company?

13 A Yes. I got a final bill for $97, and then asked if I

14 wanted to purchase a CD-ROM at the same time for $97,

15 which I agreed to at the time, yes.

16 Q I am showing you now Government's Exhibit 11-E, for

17 Edward.

18 (Handed to the witness.)

19 Q What is that document?

20 A That is the invoice, final membership payment

21 including the Who's Who Registry.

22 MS. SCOTT: I offer Government's Exhibit 11-E.

23 THE COURT: Any objection?
24 MR. TRABULUS: No.
25 THE COURT: Government's Exhibit 11-E, for Easy,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5036
Swinney-direct/Scott


1 in evidence.

2 Does it have a date on it, Mr. Swinney?

3 THE WITNESS: 11/12 of '93.

4 Q Does it reflect your purchases for the directory and

5 CD-ROM?

6 A Yes, ma'am, it does.

7 (Government's Exhibit 11-E received in evidence.)

8 Q Did you receive an y other items from the company in

9 connection with this membership?

10 A Three copies, that I can remember, of the Tribute

11 Magazine. And then there was some other documents that

12 gave you clip art that you can actually put the logo on

13 your business card or letterhead, things like that.

14 And a sample press release as well, some

15 documents that welcome me into the Who's Who Worldwide

16 directory, some other miscellaneous writings I can't

17 remember directly what they are. I have copies of all

18 this stuff.

19 Q Did you receive any other offers from the company?

20 A Not specifically, no. Other than they asked me in

21 1994, 1995, to get another one of their registries and

22 CD-ROMs, which I declined.

23 Q Did you make any additional purchases from the
24 company?
25 A No, I did not, not to my knowledge that I remember --

HARR Y RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5037
Swinney-direct/Scott


1 yes, I'm sorry. Yes, I did. There was one. I actually

2 dash they called and asked if I wanted to do a lifetime

3 membership, it was a special offer, and it was only a few

4 dollars. And I agreed to that.

5 And that was I believe $290.

6 THE COURT: How much?

7 THE WITNESS: $290.

8 Q Do you remember how you were contacted about making

9 that purchase?

10 A Telephone call to start with.

11 Q Do you remember the name of the person who contacted

12 you?

13 A I honestly can't remember. The only person I can

14 remember that I wrote the name down was I believe Janet

15 Haley, H A L E Y. I believe it was Janet. But I will not

16 sit here and tell you that that is an absolute fact. I

17 know the last name. The first name -- I have it written

18 down.

19 Q Mr. Swinney, if you take a look at the

20 questionnaire --

21 A Yes, ma'am.

22 Q -- on the second page, page 2.

23 Does that refresh your recollection about the
24 name of the person who called you?
25 A Yes, it is Annette Haley, A N N E T T E, H A L E Y.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5038
Swinney-direct/Scott


1 Q Now, I am showing you Government's Exhibit 11-H, for

2 Howard, for identification:

3 (Handed to the witness.)

4 Q Can you tell us what that is?

5 A Yes, ma'am. An invoice membership confirmation dated

6 10/28/94.

7 MS. SCOTT: I offer Government's Exhibit 11-H for

8 Harry.

9 THE COURT: Any objection?

10 MR. TRABULUS: No.

11 THE COURT: Government's Exhibit 11-H, for How,

12 in evidence.

13 (Government's Exhibit 11-H received in evidence.)

14 Q Now, does that invoi ce reflect your purchase of the

15 upgrade membership to a lifetime?

16 A Yes, it does, ma'am.

17 Q What is the date on that document?

18 A 10/28/94.

19 Q And what does it indicate you paid for the upgrade?

20 A $297, including shipping charges.

21 Q Now, did you use the directory you received from

22 Who's Who Worldwide?

23 A I attempted to.
24 Q Did you use the CD-ROM?
25 A I attempted to many times.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5039
Swinney-direct/Scott


1 Q Over what period of time did you use these items?

2 A After a received the CD-ROM, I tried to plug it into

3 the system and tried to get it to operate properly. It

4 was extremely difficult and cumbersome to use. I am not

5 necessarily a computer dummy. I know how to use

6 computers. I built computers. I spend a lot of time with

7 th em at work. And yet, it was very difficult to get that

8 system up and running properly, be able to search with it,

9 and then when you used the search parameters that they

10 told you about, you can search in any parameters and do

11 all kinds of things, it doesn't work the way they say. It

12 became extremely frustrating, and told me nothing more

13 than the directory did. So I couldn't go out and find the

14 person who does the same type of things I did. Therefore,

15 it was almost useful to me. It sat on my shelf for a

16 while. I did try to load it again. I actually talked to

17 some young gentlemen who did computer software in college

18 to help me with it. They got it to run and load. But it

19 was still very cumbersome and difficult to use.

20 Q Were you ever contacted by other members of Who's Who

21 Worldwide?

22 A No, not whatsoever.

23 Q Did you, after buy ing this upgrade membership, did
24 you have any other contacts with the company?
25 A No, I didn't. I figured to cut my losses and forget

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5040
Swinney-direct/Scott


1 it. A bad business decision.

2 MS. SCOTT: Thank you.

3 No further questions.

4 THE COURT: You may proceed.

5 MR. TRABULUS: Thank you, your Honor.

6

7 CROSS-EXAMINATION

8 BY MR. TRABULUS:

9 Q Good afternoon, Mr. Swinney.

10 A Good afternoon.

11 Q Did you bring the materials with you from where you

12 came from, the packet of materials?

13 A I have a copy of everything that I provided to

14 Mr. Biegelman on the initial questionnaire.

15 THE COURT: Excuse me a minute.

16 Would you want to pull the mike closer so we can

17 hear you better, Mr. Swinney.

18 A Yes, sir.

19 I br ought a copy of all the things I brought to

20 Mr. Biegelman when I responded to the questionnaire in

21 1995.

22 Q Do you have it with you now?

23 A I don't have it in front of me, no.
24 Q I mean, do you have it in the briefcase with you or
25 up there in the witness box?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5041
Swinney-cross/Trabulus


1 A I gave it to my wife earlier today.

2 MR. TRABULUS: May I have it, please?

3 MR. WHITE: Your Honor, all these materials are

4 previously provided to the defense. I don't know if that

5 makes any difference to Mr. Trabulus. There is nothing

6 new.

7 THE COURT: Mr. Trabulus, everything has been

8 provided to you that Mr. Swinney had. Therefore there is

9 no need.

10 MR. TRABULUS: I will accept the representation.

11 Q Now, Mr. Swinney, you testified you got the CD-ROM at

12 the same time you made the final payment on the directory;

13 is that correct?

14 A Yes, sir.

15 Q Is the directory that you received, was it a red one

16 or a darker colored one?

17 A A red one.

18 Q And I assume you looked into it to see a listing for

19 yourself; is that correct?

20 A Yes, sir, I did.

21 Q And you found it?

22 A Yes, sir, I did.

23 Q And the listing was accurate?
24 A Yes, sir, as much as I recall of it.
25 Q And the listing contained on it basically the same

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5042
Swinney-cross/Trabulus


1 information that appears on the invoice which was shown to

2 you, and which I think is being passed among the jury; is

3 that correct?

4 A Yes, sir.

5 Q The profile among yourself?

6 A Yes, sir.

7 Q I think you were lead to be lieve in your initial

8 telephone conversation this was a one in a million type of

9 thing; is that right?

10 A Yes, sir.

11 Q And when you got the directory, I think it is correct

12 in looking through it, you can see you are not one in a

13 million; is that correct?

14 A I am not sure. It all depends. There are 50,000

15 entries in there. How many people are there in the

16 world?

17 Q In that case maybe it was one in a million. But in

18 the sense you meant one in a million, when you saw the

19 directory, did that conform to your expectation that you

20 were one in a million?

21 A Possibly not.

22 Q But that did not prevent you from upgrading

23 subsequently; is that correct?
24 A Correct.
25 Q The CD-ROM was something you received before you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5043
Swinney-cross/T rabulus


1 upgraded; is that correct?

2 A Yes. That's correct.

3 Q And I believe you testified you were dissatisfied

4 with it; is that correct?

5 A Yes.

6 Q And the fact that you were dissatisfied with it did

7 not prevent you from upgrading and spending an additional

8 $290; is that correct?

9 A That is correct.

10 Q When you spent an additional $290, did you get a new

11 CD-ROM with that?

12 A No, I did not.

13 Q What was it that you attempted to do with the CD-ROM?

14 A Actually just get it loaded so I could read it.

15 Q And once that was -- eventually you did get it

16 loaded; is that correct?

17 A Much after the actual upgrade of the membership, yes.

18 Q Do you know if that CD-ROM was the very first release

19 of the CD-ROM you received?

20 A No, sir, I did not know.

21 Q Was it a DOS or windows version, do you know?

22 A I believe it was a DOS-based program.

23 Q And DOS-based is an older system than windows; is
24 that correct?
25 A Yes. But DOS will run under windows.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5044
Swinney-cross/Trabulus


1 Q When you upgraded was there any discussion about a

2 newer version of the CD-ROM?

3 A I don't remember any conversation with the people who

4 talked to me on the phone about it at all.

5 Q At that point in time did you ask as to whether there

6 was an improved version of the CD-ROM?

7 A I do not remember asking that question, no.

8 Q Did anyone offer to you another CD-ROM, do you

9 recall?

10 A No, I don't believe they did at all.

11 (Whereupon, at this time there was a pause in the

12 proceedings.)

13 Q Mr. Swinney, what I am doing is turning on a

14 computer; is that correct?

15 A Yes.

16 Q And the Windows 95 logo comes across it, that I

17 assume you are familiar with?

18 A Yes.

19 Q And what I just did is bypass a password for myself?

20 A Yes, I understand.

21 Q We have in icons, you are familiar with that?

22 A Yes.

23 Q And in windows, the way the screen shows when you
24 turn the screen on is a bunch of different windows with
25 labels on it?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5045
Swinney-cross/Trabulus


1 A Yes.

2 Q And one says Who's Who Executive Club?

3 A Yes.

4 Q I am taking the little ball and moving the arrow on

5 the screen?

6 A Yes.

7 Q And I am putting it on Who's Who Executive Club?

8 A Yes, sir.

9 Q And I will press the one bottom a couple of times?

10 A You have to press it twice.

11 Q I always mistake t hat.

12 There is something on the screen that says CD

13 answer; is that correct?

14 A Yes, it did.

15 Q At this point I am going to -- having moved that --

16 all right.

17 Now there is a copyright notice?

18 A Yes.

19 Q Who's Who Worldwide?

20 A Yes.

21 Q Executive Club?

22 A Yes.

23 Q That came up when I moved this, right?
24 A Yes.
25 Q And by itself there came on something else now; is

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5046
Swinney-cross/Trabulus


1 that right?

2 A Correct.

3 Q Now, what were some of the kinds of things you would

4 have liked to have done with CD-ROM?

5 A Find employee service managers in the country, or

6 that are listed.

7 Q Employee service manager?

8 A Yes, employee services.

9 Q Why not start with employee services. You thin k that

10 would be a title?

11 A Yes.

12 Q I will move the cursor next to title?

13 A Yes.

14 Q Would you like to type in, is it convenient from

15 where you are there?

16 A I can do it.

17 Q You can do it?

18 A Yes.

19 Q I don't want to strain you there.

20 (The witness complies.)

21 Q I think there is a typo there. Okay.

22 Would you press enter.

23 That comes up with one with that name on it, and
24 that's you?
25 A I was surprised.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5047
Swinney-cross/Trabulus


1 Q Are there any other groups you might want to look

2 at? Would you like to try other people in Boeing?

3 A No.

4 I have a phone book with everybody in Boeing in

5 it. I know an awful lot of those people, why would I want

6 that?

7 Q There are other titles that people in your particular

8 profession would have with that kind of work, besides --

9 A Food service, recreation, discounts, recognition.

10 Q All right, let's try food service.

11 A You want me to type it in?

12 Q It doesn't matter. Try to do it quickly.

13 A The key sticks.

14 Q That's my computer's fault, not the CD-ROM.

15 You have ten in there, right?

16 A Yes, under Windows 95, not under Windows 3.1 in '93

17 and '94. Windows '95 came out when, late 1995.

18 Q I have Windows 95. I think there is testimony that

19 this particular version of the CD-ROM came out in 1994. I

20 do not have Windows 3.1 on this computer, sir.

21 THE COURT: Keep your voice up, Mr. Trabulus.

22 MR. TRABULUS: Excuse me, I am getting horse,

23 your Honor.
24 Q You see ten names there?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5048
Swinney-cross/Trabulus


1 Q And let me ask you this: When you bought the CD-ROM

2 were you given to understand that the CD-ROM contained the

3 information that was in the directory?

4 A Yes.

5 Q And also, were you told that it also contained zip

6 codes, which the directory does not?

7 A I don't believe I was told that.

8 Q Were you given to understand that there was any other

9 information on the CD-ROM aside from what was in the

10 directory?

11 A Not specifically that I remember.

12 Q And basically it was sold to you as a way you can

13 access the information in the directory, but in a more

14 convenient way by various parameters; is that correct,

15 sir?

16 A By what I call faster, easier, cheaper.

17 Q Okay.

18 We quickly came out with ten people in food

19 services?

20 A Yes.

21 Q These are peo ple who would have it in their title.

22 And let's pick one of them at random.

23 This person is shown as the director of food
24 services; is that correct?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5049
Swinney-cross/Trabulus


1 Q Now, would you also have been interested in

2 businesses in food services as opposed to people having it

3 in their title?

4 A No. I can get that out of the other organizations I

5 belong to.

6 Q But people who had food services in their title, it

7 is not something you would be able to get otherwise; is

8 that correct?

9 A Not necessarily, no.

10 Q And what was some of the other different types of

11 titles that you might have been interested in? I believe

12 you mentioned some other than food services.

13 A Suggestion programs, suggestions.

14 Q Suggestions?

15 A Yes.

16 Q Do you know many people with the word "suggestions"

17 in their title?

18 A There used to be many in the Boeing company, I assume

19 there are others in other companies.

20 Q I put in the word, and suggestions is not found. Are

21 there other titles you are interested in?

22 A Discount programs, recognition.

23 Q I typed in "discount" not a thing.
24 Any other titles?
25 A Recognition.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5050
Swinney-cross/Trabulus


1 Q Is that a title you have commonly encountered in your

2 work, that people who have a job title, would have the

3 word "recognition" in it?

4 A Yes.

5 Q Is that a title used particularly at Boeing?

6 A No, sir.

7 Q I will try it.

8 The term "recognition" is not coming in.

9 But food services is certainly a commonly used

10 area?

11 A Yes, it would. It is only one of 16.

12 Q What are some of your other titles?

13 A Office services, which is office supplies; policies

14 and procedures; recreation; discounts, food service;

15 budgets; policy and procedures?

16 THE COURT: Does anybody else do anything at this

17 Boeing company?

18 THE WITNESS: Yes, another 6493 of us. They are

19 the engineers.

20 Q I typed in recreation --

21 MR. NEVILLE: Can I have a quick word with

22 Mr. Trabulus?

23 THE COURT: Sure.
24 (Mr. Neville confers with Mr. Trabulus.)
25 Q We found 15 with recreation in their title.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5051
Swinney-cross/Trabulus


1 Now, of course you are not listed there, because

2 you in giving your listing did not include recreation as

3 part of your title?

4 A That's correct.

5 Q But 15 people are listed, and let's just pick one at

6 random.

7 Now, that's the director of recreation?

8 A Correct.

9 Q Now, it is fair to say, Mr. Swinney, you decided to

10 spend $290 additional so you could become a member for

11 life of the organization which sent you the directory; is

12 that correct?

13 A Yes, sir.

14 Q And a member for life of the organization which sent

15 you the CD-ROM; is that correct?

16 A Yes, sir.

17 Q And you could have, if you had wished to inquire

18 concerning an additional CD-ROM; is that correct?

19 A Yes, I suppose I could have.

20 Q When you received the Tribute Magazine, did you see

21 in the Tribute Magazine any reference to the CD-ROM?

22 A I believe that there was one. I honestly can't

23 remember, because I received only three copies. As a
24 lifetime member I thought I wou ld receive more than that.
25 Q Was your last copy received sometime before March

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5052
Swinney-cross/Trabulus


1 30th, 1995?

2 A Yes, I believe so.

3 Q Was it received within maybe three or four months

4 before that?

5 A Potentially.

6 Q If I were to tell you that you would have received

7 additional copies, and would probably still be receiving

8 them today, but for the fact that it was shut down by a

9 government raid, would that change your disappointment in

10 not having received additional copies of Tribute?

11 A Would it have changed my disappointment?

12 Q I thought from your answer, sir, you were

13 disappointed in not having received additional copies of

14 Tribute beyond the three?

15 A I don't think I said I was disappointed when I

16 received them. They weren 't much good when I received

17 them.

18 Q Did you read through them?

19 A Yes, I did.

20 Q Did you read the articles about various people there?

21 A Yes, I did.

22 Q Was the type of information about the various people

23 there information that you would have expected from a
24 magazine published by this organization?
25 A It was more like a bio of what they had done and how

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5053
Swinney-cross/Trabulus


1 they had done it. I would have expected it a little bit

2 more, and maybe some more in depth articles on things that

3 were a little more pertinent to the business world.

4 Q I will show you some copies of Tribute and I want you

5 to tell me which ones you recall having received.

6 (Handed to the witness.)

7 Q Before that, tell me what kind of article do you feel

8 wo uld be more pertinent to the business world?

9 A Something to do with the global economy and the

10 global structure we are in today and have been for several

11 years.

12 Q Did you receive this Tribute, which is Gordon-G?

13 A I don't recollect this one. But that is not to say I

14 didn't get it. I don't have this committed to memory.

15 Q I understand that.

16 Toward the end, do you see?

17 A A new world of Asia Pacific.

18 Q The new world of Asia Pacific, is that something

19 relating to the global business world that we are in

20 today?

21 A Yes.

22 Q Is that the type of thing you would have expected to

23 see there?
24 A I didn't expect -- I didn't read -- probably I didn't
25 read this one, because I don't remember seeing this

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5054
Swinney-cross/Trabulus


1 particular one. But I may have gotten it.

2 Again, this is dated Spring of 1994. And that

3 was four years ago.

4 Do you recall everything you read?

5 Q No. I wasn't asking if you if you recall everything

6 you read. I am asking you if on seeing it you recall it.

7 Sir, I am giving you Gordon-F, volume three, the

8 next one.

9 Do you see articles on Mexico and Costa Rica?

10 A Yes, I do.

11 Q Again, does that pertain to global business matters?

12 A It should. Without reading it, I can't tell you

13 whether it does or not.

14 Q And volume four, Gordon C, protocol in India, an

15 article about Thailand. Take a look at that.

16 (Handed to the witness.)

17 Is that something also having to do with the

18 global business climate?

19 A Yes.

20 Q And the last issue of Tribute, volume 5, an article

21 about the president of the Russian re public of Kalmekya.

22 Take a look at that.

23 A Again, I don't recall reading or seeing this one
24 either. I can't help you a whole lot on that. I am sure
25 they are good articles for someone.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5055
Swinney-cross/Trabulus


1 Q Is that your complaint, sir, that the particular

2 business needs that you had with your particular position

3 with Boeing relating to helicopters and the various 16

4 different responsibilities you had, your particular

5 business needs were not specifically addressed by any

6 particular article you saw?

7 A In general, they probably were. But for my specific

8 requirements or wants or needs, I didn't see where I got

9 that much out of the magazines after I received them.

10 Q So, perhaps some further editions, had they been

11 published, might have been closer to your need if they

12 turned to an area closer to what you were working with; is

13 that correct?

14 A Potentially.

15 Q After a certain point in time you stopped getting

16 Tribute; is that correct?

17 A Correct.

18 Q Do you hold that against the company?

19 A I don't know that I hold it against anybody. They

20 just quit coming and I didn't ask the question why.

21 Q Does that contribute at least in the part with the

22 satisfaction you are feeling for Sterling -- excuse me,

23 with Who's Who Worldwide?
24 A I don't think I ever said I was totally dissatisfied
25 with the process.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5056
Swinney-cross/Trabulus


1 What I said was I made a bad business decision

2 more than once. The plaques are reminders of that. And

3 now that I don't receive anything from them, it is a

4 business loss as far as I am concerned. It is gone, done

5 and over with, and I am looking at other things.

6 Q Understood, sir.

7 If you continued to receive something from them

8 and continued to be a member, do you think it might have

9 changed your view as to whether this was a business loss?

10 A It is all speculation, because I received nothing

11 from them.

12 Q Is part of the reason you think it is a business loss

13 because you stopped receiving anything from them?

14 A No. It just didn't meet up to my expectations on

15 either the CD-ROM or the register I received. And even

16 the second register, there was nothing there above and

17 beyond.

18 Q Even after receiving the first registry, you did go

19 ahead and purchase the CD-ROM, knowing it basically

20 contained the same information, but just readily

21 accessible and purchased the secon d registry?

22 A It was either obtaining the data from it than reading

23 1,500 pages, yes.
24 MR. TRABULUS: No further questions.
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5057
Swinney-cross/Schoer


1 CROSS-EXAMINATION

2 BY MR. SCHOER:

3 Q Sir, do you still have the Tribute Magazines up

4 there?

5 I want to ask you about some of these articles

6 that do not relate to international business.

7 There is an article on negotiating a commercial

8 lease. Is that something you get involved in with your

9 job?

10 A Yes, it is.

11 Q Commercial space, an odyssey, something you get

12 involved in?

13 A Used to.

14 Q Curbing costs in real estate something you might get

15 involved in?

16 A No, not at all.

17 Q Okay.

18 Venture capital, capital ventures?

19 A No, not at all.

20 Q Recycling?

21 A No.

22 Q Corporate entertainment?

23 A No.
24 Q How about how does your company score on quality
25 relating to customer satisfaction, employee satisfaction,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5058
Swinney-cross/Schoer


1 things like that? Isn't that what you are really involved

2 in?

3 A No, sir. That's an entirely different department

4 that handles all the surveys and quality control within

5 the company, the quality of life within the company, as

6 run out of human resources; education and training

7 department.

8 Q And you don't have anything to do with employee

9 satisfaction, even though you are the employee services

10 manager?

11 A Only when it goes wrong.

12 Q Okay.

13 So, these kind of articles you didn't think was

14 worth anything?

15 A I don't know. I never read them. If I haven't seen

16 them, I can't respond.

17 Q Okay.

18 MR. SCHOER: No further questions.

19 THE COURT: Anybody else?

20 MR. GEDULDIG: Just one or two, Judge.

21

22

23
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5059
Swinney-cross/Geduldig


1 CROSS-EXAMINATION

2 BY MR. GEDULDIG:

3 Q Mr. Swinney, just so I am clear, you received a call

4 in approximately March or maybe February of 1993, and

5 that's the first call you got from Who's Who Worldwide; is

6 that right?

7 A Yes, sir.

8 Q And during the course of that call a person asked you

9 some personal questions about your favorite hobbies and

10 magazines and things of that sort; is that right?

11 A Yes, sir.

12 Q And some of your job responsibilities?

13 A Yes, s ir.

14 Q And following that call you purchased a five-year

15 membership in Who's Who Worldwide; is that correct?

16 A Yes, sir.

17 Q And about six or seven months later you got a second

18 bill from Who's Who Worldwide -- withdrawn.

19 You may have gotten another call saying you owed

20 $97 for the directory itself, and you were advised if you

21 wanted to, you would order a -- you could order a CD-ROM?

22 A Yes, sir.

23 Q You did order the CD-ROM?
24 A Yes.
25 Q You paid a sum of money in March, and then you paid a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5060
Swinney-cross/Geduldig


1 second sum of money in roughly November?

2 A Yes, sir.

3 Q And shortly after that second payment, in fact, you

4 did receive the directory; is that correct?

5 A Yes, sir.

6 Q And you also did receive the CD-ROM?

7 A Yes, sir.

8 Q And this takes us to maybe January of '94 when you

9 got all this stuff?

10 A Roughly, yes, sir.

11 Q Or thereabouts.

12 Now, in October of 1994, ten months later, you

13 get another call from Who's Who Worldwide; is that right?

14 A Yes, sir.

15 Q And this second person, who may have been Annette

16 Haley, asks you, if you want to upgrade and buy a life

17 membership in the organization; is that correct?

18 A Yes, sir.

19 Q You have been in possession of the CD-ROM, you had

20 been in possession of at least one directory for almost

21 ten months at that point; is that right?

22 A Yes, sir.

23 Q And you told Annette you wanted an upgrade, and you
24 wanted to buy a life membership?
25 A I agreed to that, yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5061
Swinney-cross/Geduldig


1 Q And you paid for it?

2 A Yes, sir.

3 Q And nobody tricked you into that second purchase,

4 right?

5 A Probably not.

6 MR. GEDULDIG: No other questions.

7

8 CROSS-EXAMINATION

9 BY MR. DUNN:

10 Q Good afternoon, sir.

11 A Yes, sir.

12 Q My name is Thomas Dunn.

13 A Good afternoon.

14 Q Sir, before you heard from the government, when they

15 wrote you a letter sometime maybe in June of '95, you had

16 never -- you had never complained to anyone in writing

17 about this company, correct?

18 A Correct.

19 Q You had never complained to the company itself; is

20 that correct?

21 A Correct.

22 Q In fact, as was asked you, you got a CD-ROM; is that

23 right?
24 A Yes.
25 Q And you told the jury today that you were

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5 062
Swinney-cross/Dunn


1 dissatisfied with the CD-ROM; is that correct?

2 A To a large extent, yes.

3 Q And even after that you upgraded your membership; is

4 that correct? Yes or no?

5 A I can't answer it yes or no. I did upgrade, yes.

6 But it wasn't because I was either satisfied or

7 dissatisfied with the CD-ROM.

8 Q Well, you had received the CD-ROM well before you

9 upgraded for a lifetime membership?

10 A Yes, if you understand --

11 Q Just answer the question. It calls for a yes or no,

12 sir.

13 Did you upgrade after you received the CD-ROM,

14 yes or no?

15 A Yes, I did.

16 Q Isn't it a fact, sir, that you first became

17 dissatisfied with this company when the government

18 notified you that they were doing some kind of

19 investigation; isn't that true?

20 A No, sir.

21 Q Isn't it a fact, sir, that when the government

22 informed you that they were investigating, you sat back

23 and said, gee, I spent all this money, I spent all the
24 money on the original membership, I spent money on the
25 CD-ROM; spent money on the upgrade, and you said to

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5063
Swinney-cross/Dunn


1 yourself, if the government says it's fishy, it is fishy;

2 is that correct?

3 A No, sir.

4 Q You said, sir, the first directory you looked at, and

5 it was basically the equivalent of a telephone directory;

6 is that right?

7 A Lots of names and lots of stuff in it, yes.

8 Q Just like the telephone directory in your view; is

9 that correct?

10 A I don't know if I referred to it as the telephone

11 directory. It had a lot of information with people's

12 names.

13 Q Did you attempt to network with those names?

14 A I searched some out. But based on the way you have

15 to research that particular document, it is extremely

16 difficult to find people like myself to find out who I

17 really wanted to talk to. I was hoping the CD-ROM would

18 do that for me.

19 Q Did you know that you could have got additional

20 CD-ROMs after the first one you got?

21 A Nothing was said about any CD-ROMs additional. And

22 nor was any documentation sent to me about additional

23 CD-ROMs.
24 Q Sir, you don't recall looking at the Tribute, yes or
25 no?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5064
Swinney-cross/Dunn


1 A If you remember, I got three copies. Yes, I did see

2 them. I remember something about a CD in there, but it

3 didn't talk about an upgrade.

4 Q I will ask you some questions calling for a yes or no

5 answer?

6 THE COURT: Just one minute.

7 Please try to be responsive. If you don't

8 remember or don't know, say so. Just otherwise answer yes

9 or no. If you can't answer the question yes or no, just

10 say I can't answer the question yes or no. Please don't

11 make explanations.

12 THE WITNESS: Yes, sir.

13 THE COURT: It shifts the burden back to the

14 questioner to decide what he is going to do.

15 THE WITNESS: Yes, sir.

16 Q Sir, did you know that the former CEO and chairman of

17 Hughes Aircraft was a member of Who's Who Worldwide?

18 A No.

19 Q Did you know that the present chairman and CEO of

20 Hughes Aircraft was a member of Who's Who Worldwide?

21 A No.

22 Q Sir, when you were first notified by mail that you

23 had an opportunity to join Who's Who Worldwide, you were
24 impressed with that fact, correct?
25 A I can't answer that with a yes or no.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5065
Swinney-cross/Dunn


1 Q Do you recall when you were offered to upgrade to a

2 lifetime membership that you were given an opportunity for

3 a new wall plaque or a free version for the newer CD-ROM;

4 do you recall that?

5 A The wall plaque, yes. The CD-ROM, no.

6 Q You had the CD-ROM then for about ten months; is that

7 correct?

8 A Approximately. I would assume so, yes.

9 Q And you were dissatisfied with the CD-ROM at that

10 point; is that correct?

11 A I was dissatisfied with the way it loaded.

12 Q Did you speak to the person that you were talking

13 with concerning the upgrade and say I am dissatisfied with

14 the CD-ROM, can I have either an upgrade or one or a

15 reimbursement?

16 A No, I did not ask that question.

17 Q Sir, isn't it a fact that w hen you were notified that

18 you could be in the Who's Who Worldwide, that you wanted

19 to join that organization; isn't that true?

20 A I can't answer that yes or no.

21 Q But you joined, correct?

22 A I did join, yes.

23 Q And you upgraded, correct?
24 A Yes.
25 MR. DUNN: No further questions.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5066
Swinney-cross/Dunn


1 THE COURT: Anything else? Any redirect

2 examination?

3 MS. SCOTT: Briefly, your Honor.

4

5 REDIRECT EXAMINATION

6 BY MS. SCOTT:

7 Q Mr. Swinney, you were asked a number of questions

8 about your decision to upgrade your membership. Do you

9 recall those questions?

10 A Vaguely, yes, ma'am.

11 Q Can you tell us why you decided to upgrade your

12 membership?

13 A Well, the initial fee I believe was $300, $397,

14 whatever it was.

15 Whatever the initial one was, it was 300 or I

16 believe $397.

17 The upgrade was only 290, and it was for

18 lifetime. The first one was five years. I said, at least

19 I might be able to get some additional upgrades or

20 additional information out of this program.

21 Again, when I made this decision I made it on a

22 business decision, what the dollar amount was, what I was

23 capable of paying for, and what I might receive out of
24 it. And figuring five years ago, I was 47 years old, and
25 I could keep it for another 45 years. So you figure that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5067
Swinney-redirect/Scott


1 it is a pretty good investment. Since then I don't think

2 it was a good investment. It was a business decision at

3 that time in my life. Today I would have made a different

4 decisio n.

5 Q Now, do you remember testifying that one of the most

6 important reasons why you --

7 MR. GEDULDIG: Objection to the form of the

8 question.

9 THE COURT: Please don't interrupt the question.

10 Go ahead.

11 Q Do you remember testifying that one of the most

12 important reasons why you purchased the membership is

13 because you were nominated?

14 MR. SCHOER: Objection.

15 MR. GEDULDIG: Objection.

16 THE COURT: Sustained as to form.

17 Q Mr. Swinney, when you purchased this upgrade, did you

18 still believe you were nominated?

19 A Yes, ma'am.

20 MS. SCOTT: No further questions.

21 THE COURT: Anything else?

22 You may step down, Mr. Swinney.

23 THE WITNESS: Thank you.
24 THE COURT: Please get Mr. Watstein back in.
25 MR. WHITE: He is right next door, I believe.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL CO URT REPORTER
5068
Swinney-redirect/Scott


1 (Whereupon, at this time the witness left the

2 witness stand.)

3 THE COURT: You are still under oath,

4 Mr. Watstein.

5 THE WITNESS: Yes, sir.

6

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

8 called as a witness, having been previously

9 duly sworn, was examined and testified as

10 follows:

11

12 THE COURT: You may proceed.

13

14 CROSS-EXAMINATION (cont'd)

15 BY MR. GEDULDIG:

16 Q Mr. Watstein, when we were breaking for lunch, we

17 were at a point where we were discussing the 1.6 million

18 dollars approximately in assets and property that you had

19 recorded under your wife's name as West. Do you remember

20 that?

21 A Yes.

22 Q And now, you also -- if I recall correctly -- well,

23 let me ask the question.
24 Did you tell your wife that you wer e recording
25 properties and assets under her name in order to avoid tax

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5069
Watstein-cross/Geduldig


1 liabilities?

2 A No, sir.

3 Q But she pled guilty to that?

4 A It is not what she pled guilty to, sir.

5 Q Okay.

6 You have at least one son; is that right?

7 A I have two sons, sir.

8 Q Okay.

9 Well, one son had a bank account, or his name

10 appeared on a bank account, which was forfeited; is that

11 right?

12 A Yes.

13 Q And that was done as a result of your criminal

14 actions; is that right?

15 A That is correct.

16 Q And at the time, going back to 1990, how old was that

17 son?

18 A Ten.

19 Q How much money was in that account that was

20 forfeited?

21 A I think it was $106,000.

22 Q He didn't earn that mone y, did he?

23 A He got it from an inheritance, sir.
24 Q You are saying all of that $106,000 was inherited?
25 A Yes.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5070
Watstein-cross/Geduldig


1 Q And how did the account read?

2 A I am not sure, sir.

3 Q Did your name appear anywhere on that account?

4 A No, sir.

5 Q Did you have the ability to take any money out of

6 that account?

7 A No, sir.

8 Q And did you put the money in that account?

9 A I caused it to be put in the account.

10 Q Umm.

11 When you forfeited items, these four pieces of

12 property under your wife's name as West, were those

13 properties forfeited to the government?

14 A One was, sir.

15 Q So, you are still holding properties?

16 A No, three was told as previously testified.

17 Q Which property was forfeited by the go vernment?

18 A Mill Neck.

19 Q It was forfeited by the government, or you forfeited

20 it to the government because you had purchased that

21 property with money you stole from money -- with money

22 from your customers, is that right?

23 A I can't answer that yes or no, sir.
24 Q Certainly you put money into that property, Mill Neck
25 property; is that right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5071
Watstein-cross/Geduldig


1 A I caused it to be, yes.

2 Q At the time you were putting money into that

3 property, buying the land, putting up the house, how were

4 you earning a living at that time?

5 A In the consulting business, sir.

6 Q When did you -- how did you buy the property?

7 A I didn't buy the property, sir.

8 Q You caused the property to be bought?

9 A Yes.

10 Q Are you playing word game s with me, Mr. Watstein?

11 A No, sir. I am trying to be accurate.

12 Q You caused it to be purchased with your money, didn't

13 you?

14 A Money which I had control of, yes, sir.

15 Q Right.

16 So, although you may have designated someone else

17 to have their name on that property, you controlled it,

18 didn't you?

19 A Absolutely.

20 Q You put their name on it, didn't you?

21 A I can't answer it with a yes or no, sir.

22 Q Didn't you cause a name to be put on it?

23 A Yes.
24 Q And it was your property?
25 A I previously said that, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5072
Watstein-cross/Geduldig


1 Q To avoid confusion, why don't we call the Mill Neck

2 property yours, so we don't get into a game of semantics,

3 all right?

4 A If you like.

5 Q Now, when did that house go u p on Mill Neck?

6 A By go up, what do you mean?

7 Q When did you start putting up boards and pouring a

8 foundation and levelling and that stuff?

9 A I think 1986.

10 Q You started to build the house in 1986?

11 A I believe so.

12 Q And there was a fire there?

13 A Not in that year, sir.

14 Q When was the fire?

15 A I believe it was 1992, in January, but I am not quite

16 sure.

17 Q Was the house finished?

18 A Substantially.

19 Q You mean in four years time that house wasn't built?

20 A Yes, sir.

21 MR. TRABULUS: Six years.

22 MR. GEDULDIG: Six years?

23 MR. JENKS: 86 to '92.
24 Q From 1986 to 1992 you were building that house in
25 Mill Neck?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5073
Watstein-cross/Geduldig


1 A Yes, sir. It might have been '87, sir.

2 Q That's a long time to build a house, isn't it?

3 A It certainly is.

4 Q Did you ever sue the contractor?

5 A No, sir.

6 Q Same contractor for the whole six years?

7 A No, sir.

8 Q Different contractors?

9 A Yes, sir.

10 Q You fired one or more?

11 A Yes, sir.

12 Q All right.

13 Beginning in 1989, that house was still being

14 built; is that right?

15 A Yes.

16 Q And 1990, still being built?

17 A Yes, sir.

18 Q 1991, still being built?

19 A Yes, sir.

20 Q How were you earning a living in those years, '89,

21 '90, '91?

22 A I was being paid by Consolidated Consumer Industries,

23 sir.
24 Q That's Who's Who?
25 A No, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5074
Watstein-cross/Geduldig


1 Q You were working for Who's Who in those days?

2 A I wa s involved, yes.

3 Q You were it, weren't you?

4 A I wasn't the only person, but I was fully

5 responsible.

6 Q You were the guy who called all the shots, weren't

7 you?

8 A Yes, sir.

9 Q You were in effect the chief operating officer, the

10 CEO; is that right?

11 A Absolutely.

12 Q Let's call it your company?

13 A If you like.

14 Q You were the guy making all the decisions, weren't

15 you?

16 A Yes, sir.

17 Q And you made an income from that company in '89, in

18 '90, in '91?

19 A Yes, sir.

20 Q How much would you say you earned in the three years

21 from the company?

22 A Referring to Who's Who?

23 Q That's what I am talking about.
24 A Would you like a breakdown by year?
25 Q Year-by-year. How much did you make in '89?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
50 75
Watstein-cross/Geduldig


1 A I can't give it to you by year --

2 Q You just said to me do you want a breakdown by year?

3 A Excuse me, sir --

4 Q Let me re-ask the question --

5 THE COURT: Mr. Geduldig, slow down, will you?

6 Q Did you just tell me not a minute ago, ask me if I

7 wanted a breakdown year-by-year?

8 A I don't know if you wanted an aggregate number or

9 individual number. That's what I meant, sir.

10 Q I thought you said breakdown year-by-year, you can't

11 do it?

12 A I can approximate it.

13 Q Do that. How much approximately did you make out of

14 your Who's Who in 1989?

15 A $35,000.

16 Q In reportable income?

17 A Yes, sir.

18 Q How much did your company gross? How much did your

19 Who's Who company gross in the years that you ran it?

20 A 14 million dollars, sir.

21 Q 14 million dollars and you only made 35,000 in 1989?

22 A I previously said I had two incomes, sir.

23 Q I am talking Who's Who.
24 A That's correct, sir.
25 Q Who's Who, your Who's Who, business executives, made

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5076
Watstein-cross/Geduldig


1 14 million dollars, right?

2 A No, generated 14 million dollars in sales over the

3 three years.

4 Q 14 million dollars in sales, over how many years?

5 A Three and a half to four years.

6 Q Three and a half to four years, and you are telling

7 me in 1989, one of the years you were CEO of Who's Who of

8 American Executives, when that company was making at least

9 seven million dollars in sales, your income was only

10 $35,000?

11 A That's responsive to your question, sir.

12 Q Are you playing a game with me now?

13 A No, sir.

14 Q Was there income hidden that you are not telling us

15 about?

16 A No, sir.

17 Q How much do you think your company owned in 1989,

18 Who's Who, only talking about Who's Who here. I don't

19 care about your other incomes, Who's Who?

20 A You heard of pre-tax profits, sir? It sounds like a

21 reasonable definition of what earnings is?

22 Q Gross. I want gross. I don't want anything taken

23 out of it. I want to know the top dollar, way up here.
24 How much was your company -- what was my question?
25 MR. GEDULDIG: I am not an accountant, Judge, I

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5077
Watstein-cross/Geduldig


1 apologize. Depreciation and stuff.

2 Q How much did your company Who's Who in business

3 executives, whatever it is called, gross in 1989,

4 approximately?

5 A I would say about two million dollars.

6 Q Two millio n, and that's the year you made 35,000,

7 right?

8 A From that company, sir, yes, sir.

9 Q Okay.

10 When did you start that company?

11 A Which company are you referring to, sir?

12 Q Who's Who, Who's Who? Have I mentioned any other

13 company to you?

14 A I have.

15 Q I said to you earlier on, we are only talking Who's

16 Who here.

17 A That would be fine.

18 Q Everything we have been doing in this courtroom for

19 the last six years is Who's Who.

20 If I hear Who's Who one more time.

21 We are talking Who's Who, your Who's Who.

22 A Yes, sir.

23 Q Who's Who in Business Executives in America, your
24 company. Don't confuse it with anything else, all right?
25 A Okay.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5078
Watstein-cross/Geduldig


1 Q Don't confuse it with income you gave to yo ur wife

2 that you had the beneficial use of. Don't consider it as

3 part of any kind of a question having to do with all this

4 money your ten year old son inherited. Who's Who of

5 Businesses Executives in America, your company, that's

6 it. That's what I am asking you about, all right? We are

7 clear now?

8 A If you rephrase your question, sir, you will be very

9 clear.

10 Q I am not rephrasing it. You will have to struggle

11 on.

12 In 1989 -- withdrawn.

13 When did you start to operate your Who's Who

14 company?

15 A 1988.

16 Q And how many people were working there in 1988?

17 A At what time, sir?

18 Q The whole year on average, how many people worked

19 there?

20 A 15.

21 Q I think you said when you started up there were four,

22 right?

23 A Five.
24 Q Five.
25 Approximately how many people on average worked

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5079
Watstein-cross/Geduldig


1 there in 1989?

2 A Probably 30.

3 Q Now, in 1990, how much money did the company --

4 withdrawn.

5 How much money did that company gross in 1988

6 when you started it up?

7 A I previously answered your question, two million

8 dollars.

9 Q In 1988?

10 A Yes, sir.

11 Q What was your gross in 1989, your gross sales?

12 A I have to approximate --

13 Q Give us an approximation.

14 A Four million dollars.

15 Q I think you said in '89 you made 35,000?

16 A My personal income from that company, yes, sir.

17 Q Was 35,000, and the company grossed four million

18 dollars; is that right?

19 A Which year are you referring to now?

20 Q '89.

21 A Yes, sir.

22 Q And in 1990 what did it gross -- so far we have two

23 million in '88, the start up year; four million in '89.
24 How much did you make in income from the company Who's Who
25 in 1988?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5080
Watstein-cross/Geduldig


1 A I believe 35,000 approximately.

2 Q Let's go to 1990.

3 A Good.

4 Q I am glad you're happy.

5 In 1990 how much did your company gross?

6 A I guess about six million.

7 Q Six million. Let me guess, you made 35,000?

8 A Inaccurate, yes, sir.

9 Q I am glad to hear it. How much did you make?

10 A Approximately $200,000.

11 Q All right.

12 We are up to $200,000 on gross income of six

13 million dollars; is that right?

14 A Yes.

15 Q We have two million the first year, four million the

16 second, and six million in the third; is that right?

17 A Yes, sir.

18 Q That's 12 million, right?

19 A Yes, sir.

20 Q The next year what was it?

21 A I am guessing approximately two million dollars.

22 Q What was your personal income from the company that

23 year?
24 A Approximately $150,000, estimating here.
25 Q All of this time you're pouring money into that house

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5081
Watstein-cross/Geduldig


1 in Mill Neck, right?

2 A You want to phrase that for me again, sir?

3 Q You are building this ongoing palace in Mill Neck for

4 six years, I think you said, right?

5 A Yes, sir.

6 Q In 1988, 1989, 1990, 1991, the house was still

7 inexorably being built, right? Boards going up,

8 foundations being laid, petunias being planted and things

9 going on, right?

10 A There were no petunias.

11 Q But certainly you were putting money into tha t house;

12 is that right?

13 A Yes, sir.

14 Q This is not a left town bungalow house?

15 A No, sir.

16 Q 2800 feet?

17 A No, sir.

18 Q 28,000 feet? That's an office building, right?

19 A Yes.

20 Q That's big, 28,000 feet; is that right?

21 A Yes, sir.

22 Q And this house was costing a pretty penny; is that

23 right?
24 A That's correct.
25 Q And your company was paying you for two of those

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5082
Watstein-cross/Geduldig


1 years that you were building the house, only 35,000 a

2 year; is that right?

3 A Yes, sir.

4 Q And the house, I think you said it cost about 600,000

5 just to buy the plot, and another 600,000 to put the

6 borders up; is that right?

7 A Yes, sir.

8 Q That house is going to cost roughly 1.2 million

9 dollars; is that right?

10 A It seems like an accurate number, sir.

11 Q You weren't earning anything near that, sir?

12 A From Who's Who, sir?

13 Q Right.

14 A From that entity, no, sir.

15 Q And money is going into this house, right?

16 A What do you mean by going into this house?

17 Q You are paying workers, engineers, all kinds of

18 people?

19 A That is correct.

20 Q All right.

21 And your business at Who's Who is doing poorly,

22 right?

23 A What year are you referring to, sir?
24 Q You said there came a point that the business went
25 downhill, started to have problems, economic problems,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5083
Watstein-cross/Geduldig


1 right?

2 A Yes, sir.

3 Q When was that?

4 A I believe it is accurate to say it was late '89,

5 early '90.

6 Q You didn't cut back on your lifestyle in any

7 respects, did you?

8 A Yes, sir.

9 Q You did? You didn't travel out to the house in

10 Carlsbad as often?

11 A That's correct, sir.

12 Q You didn't go down to Florida as often?

13 A Yes, sir, that's correct.

14 Q And then you had a fire at that house?

15 A That's correct.

16 Q How long have you been living in New York in the

17 metropolitan area?

18 A Would you rephrase the question, please, sir.

19 Q How long have you been living in the New York

20 metropolitan area?

21 A I am not currently living in the New York area, sir.

22 Q You were certainly living in the New York

23 metropolitan area in 1991, 1992, right?
24 A In '91, yes, sir.
25 Q And at that point in time, how long had you been

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5084
Watstein -cross/Geduldig


1 living in the New York metropolitan area?

2 A Off and on since I was born.

3 Q Would you say it was steadily in the New York City

4 area?

5 A No, sir.

6 Q Where else did you live?

7 A I lived briefly in California, Detroit, Philadelphia.

8 Q How long did you live in Detroit?

9 A A year, a year and a half.

10 Q How long did you live in California?

11 A A year, year and a half.

12 Q Where else did you say you lived?

13 A Philadelphia.

14 Q How long did you live there?

15 A Four years.

16 Q What did you do when you were living in Detroit?

17 A I was the chairman of the board of Federal's

18 F E D E R A L apostrophe S, Department Stores.

19 Q This house you were building in Mill Neck, there was

20 a fire?

21 A That's correct.

22 Q Did you file an insurance claim for it?

23 A I am not sur e if it was officially filed or not.
24 Q How could you not be sure?
25 A I don't recall.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5085
Watstein-cross/Geduldig


1 Q It was a house that you had the beneficial use of?

2 A Since we forfeited the proceeds --

3 Q My question was --

4 A My response is I don't recall, sir.

5 Q You are not answering my question.

6 My question was: Did you have the beneficial use

7 of that house?

8 A The house was never lived in, sir.

9 Q That was a house that was in effect yours; is that

10 right?

11 A Yes, sir.

12 Q It was in your wife's name?

13 A Yes, sir.

14 Q How much damage was done by the fire?

15 A It was totalled.

16 Q You can't recall if a claim was filed on a house

17 worth 1.2 million dollars and totally destroyed?

18 A If you let me respond not i n a yes or no, I can

19 respond to the question.

20 Q You can't answer the question?

21 A If you let me respond --

22 Q I will put it another way.

23 A Yes, sir.
24 Q Did you or your wife have an insurance claim filed
25 for the fire at the Mill Neck house?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5086
Watstein-cross/Geduldig


1 A I cannot answer that with a yes or no.

2 Q Did you ever get any insurance money?

3 A No, sir.

4 Q You mean, you invested about 1.2 million dollars in a

5 house that was burned to the ground and never got a dime

6 in insurance company?

7 A Exactly accurate, sir.

8 Q Did you have an insurance policy?

9 A Yes, sir.

10 Q You had a policy and you never collected on it?

11 A That's correct.

12 Q I see.

13 When you were in Detroit how old were you?

14 A 19 78, so it would be 37.

15 Q And you had a piece of property there that burned

16 down; is that correct?

17 A One of 18 stores.

18 Q What kind of store was that?

19 A Department stores.

20 Q That's the department store you were the chief

21 executive officer of?

22 A Yes, sir.

23 Q And how long did you own that department store?
24 A It was a public company. I didn't own it.
25 Q How long did you run it?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5087
Watstein-cross/Geduldig


1 A Approximately a year.

2 Q You were there a year and a half in Detroit?

3 A Yes, sir.

4 Q And when you went to Detroit, did you go there

5 because of that job?

6 A Partially, yes.

7 Q And that building burned down where the department

8 store was; is that right?

9 A It is not an accurate statement. I can't answer yes

10 or no, sir.

11 Q There was a fire in that department store, was there?

12 A I can't answer yes or no.

13 Q You can't tell me if there was a fire in the

14 department store?

15 A A fire in one of 18 stores.

16 Q Including the one you managed; is that right?

17 A That's not relevant, sir.

18 Q Let me decide. I will ask the question.

19 A Certainly.

20 Q And you didn't hang around Detroit after the fire,

21 did you?

22 A Yes, sir.

23 Q You did? Months?
24 A Five or six months, yes, sir.
25 Q Long enough to see if an insurance claim was made,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5088
Watstein-cross/Geduldig


1 perhaps?

2 A An insurance claim was made.

3 Q Did you collect any money?

4 A No, sir.

5 Q The company did?

6 A No, sir.

7 Q Well, the company you were running in Detroit never

8 filed a claim on a fire insurance?

9 A That was not your question, sir.

10 Q Did the company receive any insurance money for the

11 fire?

12 A No, sir.

13 Q It did not.

14 Now, when you say as you did on somebody's

15 examination, perhaps yesterday, that you did not begin

16 committing crimes until approximately 1984 or so, you are

17 being much too modest, not you, Mr. Watstein? You began

18 committing crimes years ago?

19 A No, sir.

20 Q You are a hustler, right?

21 A No, sir.

22 Q You are not a hustler?

23 A If you are defining in a pejorative sense.
24 Q It is pejorative.
25 A Thank you for correcting me.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5089
Watstein-cross/Geduldig


1 Q You don't consider yourself to be a hustler?

2 A No, sir.

3 Q You don't believe you have taken people's money and

4 given them nothing?

5 A I have in the past.

6 Q A lot of talk?

7 A You phrased your question in the present tense?

8 Q We can have it read back, but I will put it in the

9 past. In the past you took money from people and gave

10 them nothing but sweet sounding talk?

11 A That's accurate, sir.

12 Q Is it fair to say at that point in time, 1988, 1989,

13 1990, 1991 you were a totally immoral person?

14 A An accurate statement, sir.

15 Q And you did all that stuff in the mail industry,

16 right?

17 A That's correct.

18 Q Now you are on probation?

19 A That's correct.

20 Q What do you do for a living?

21 A Advise people on marketing.

22 Q Mailing?

23 A One aspect of it as I previously testified.
24 Q Would I be correct, and is it fair to say that
25 allowing you while on probation to work in the mail

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5090
Watstein-cross/Geduldig


1 industry is similar to allowing an alcoholic to work as a

2 bartender?

3 MR. WHITE: Objection.

4 THE COURT: Sustained.

5 Q Let me rephrase the question.

6 Wouldn't it be safer for you if you went into a

7 different line of work?

8 A No, sir.

9 Q Now, there came a point in time as testified to many

10 times by you already, and I will not go through it again,

11 where you became a cooperating witness; is that right?

12 A Yes, sir.

13 Q And I think you said during an examination, that on

14 average 30 or more people work for your Who's Who; is that

15 right?

16 A You asked about various time periods, sir.

17 Q I thought I said on average.

18 Over the course of the life of that company, any

19 question I asked about a company, I am referring to Who's

20 Who, so you will be clear; all right?

21 A Yes.

22 Q During the life of the company, your Who's Who, the

23 average number of employees was about 30 or more; is that
24 right?
25 A A fair yes, yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5091
Watstein-cross/Geduldig


1 Q And when you became an informant, you caused for your

2 information and your cooperation the arrest of about 25 of

3 your employees; is that right?

4 A Not accurate, sir.

5 Q How many?

6 A I can't answer the question with a yes or no.

7 Q You can't tell me how many people were arrested as a

8 result of your information?

9 A Your whole assumption is invalid, that's why I can't

10 answer.

11 Q We don't want to have that.

12 Just tell me how many of your employees were

13 arrested?

14 A Approximately 25.

15 Q Okay.

16 Did any of them go to jail?

17 A No, sir.

18 Q Not one?

19 A No, sir.

20 Q So, the effect, the net effect of this whole scheme

21 when you were immoral is that nobody suffered any real

22 pain?

23 A That's not an accurate statement, sir.
24 Q Okay.
25 Do you know Donald Fletcher?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5092
Watstein-cross/Geduldig


1 A Yes, sir.

2 Q An employee of yours?

3 A Yes, former.

4 Q Worked at your Who's Who?

5 A Yes.

6 Q He is the sales manager?

7 A Yes.

8 Q He is the fellow who wrote to Judge Mishler that you

9 were the biggest liar on the face of the earth?

10 A Yes, sir.

11 Q Why did he say that?

12 MR. WHITE: Objection.

13 THE COURT: Sustained.

14 Q Don't you know why he said that?

15 A Not the foggiest idea.

16 Q Not the foggiest, no clue?

17 A You want me to guess.

18 Q How many years did he work for you?

19 A About a year before he was fired.

20 Q Was he honest? What was his problem? Why was he

21 fired?

22 A Being dishonest.

23 Q Dishonest, you couldn't have that in your company,
24 could you.
25 Did Judge Mishler read Fletcher's letter to you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5093
Watstein-cross/Geduldig


1 prior to being sentenced?

2 A Yes.

3 Q What reason did he give in his letter for being the

4 biggest liar on the face of the earth?

5 A I don't have a recollection of his letter.

6 Q How many times were you sentenced in your life?

7 A Just once, sir.

8 Q It is a memorable moment, isn't it?

9 A Not reall y.

10 Q It is not?

11 A I am not one who wants to remember that moment, I

12 don't think so.

13 Q Was Fletcher one of the people who complained that

14 you told him he had health insurance, and when he went to

15 the hospital he found he had none?

16 A No.

17 Q That was not Fletcher, that was someone else?

18 A To the best of my recollection, yes, sir.

19 Q But there were employees of yours who said that you

20 told them they had health insurance, and when they went to

21 the hospital found they had none; is that right?

22 A A singular employee made that allegation, sir.

23 Q Let me ask you questions about this tax liability.
24 You have a tax liability for $650,000; is that
25 right?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5094
Watstein-cross/Geduldig


1 A Yes, sir.

2 Q I think you said in the mail i ndustry you are in

3 right now, you are earning approximately $100,000 a year?

4 A That's correct.

5 Q And I think you said you are paying about a thousand

6 dollars a months towards your tax liability?

7 A $12,000 a moment.

8 Q 12 percent of your income is going to the tax

9 liability?

10 A Consistent with the IRS --

11 Q You know Mr. Jordan here, don't you? I was going to

12 ask you about that.

13 A Intimately.

14 Q Do you know a fellow named Andrew Rosenblatt?

15 A That name doesn't ring a bell.

16 Q He is a short man, slight, he is about 45, wears

17 glasses, he is an IRS agent, he investigates cases just

18 like yours. He doesn't dress anywhere near the panache

19 that you have. I am sure your suit probably cost as much

20 as his entire wardrobe?

21 A An invalid assumption.

22 MR. WHITE: Objection.

23 THE COURT: Sustai ned.
24 Q I am trying to describe the man, so perhaps my
25 description of him will bring --

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5095
Watstein-cross/Geduldig


1 THE COURT: Mr. Geduldig, when there is an

2 objection, please do not continue as if you didn't hear

3 it.

4 MR. GEDULDIG: I am sorry, Judge.

5 THE COURT: I again say there have not been many,

6 only few of them, but when there is one, please don't

7 continue and breeze on by.

8 MR. GEDULDIG: I apologize.

9 Q Having described Mr. Rosenblatt to you, do you recall

10 seeing a man like that from the IRS?

11 A It doesn't refresh my memory, sir.

12 Q Now, did you ever have an occasion to talk to IRS

13 agents about this liability?

14 A Yes, sir.

15 Q Did any IRS agent, Mr. Jordan, somebody like

16 Mr. Rosenblatt, ever tell you that the IRS has a sliding

17 scale and the scale is a percentage of your income, and as

18 you make more, they take a bigger percentage of your

19 income and apply it to your tax liability?

20 A That's not accurate, sir.

21 Q I am asking if you ever had that kind of conversation

22 with an IRS agent?

23 A Not about that assumption you made.
24 Q I didn't make the assumption. I heard
25 Mr. Rosenblatt. It is not an assumption. Don't believe

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5096
Watstein-cross/Geduldig


1 it is an assumption because I asked the question.

2 Did anybody from the IRS suggest that as your

3 income went from 25,000 to 35,000, to 50,000, to 100,000,

4 you should pay not 12 percent of your gross income, not 25

5 percent of your gross income, but a figure closer to 40 or

6 50 percent of your income toward your tax liability? Was

7 that ever suggested to you by any IRS agent?

8 A No, sir, it is not current IRS policy. You are

9 incorrect.

10 Q What we will do is we will later hear or read back

11 Mr. Rosenblatt's testimony and see what he says IRS policy

12 is. Maybe you know better?

13 MR. WHITE: Objection.

14 THE COURT: Yes. Sustained.

15 Mr. Geduldig, do you want to continue this

16 cross-examination?

17 MR. GEDULDIG: I am moving into --

18 THE COURT: If you do, stick to the relevant

19 issues in the case.

20 Q Let me ask you a few questions about Marty

21 Biegelman.

22 When you were making these telephone calls to the

23 employees at Mr. Gordon's company, Who's Who Worldwide, I
24 think you testified that you prepared an analysis or
25 critique of each of the phone calls that you made; is that

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER

5097
Watstein-cross/Geduldig


1 right?

2 A No, sir, it was not my testimony.

3 Q What did you do? After you would make a phone call,

4 what is it you would do with regard to reporting the call

5 to Mr. Biegelman?

6 A I would complete the cover sheet which described the

7 location I made the call from, the name I utilized, the

8 occupation, the time, the date; check the tape for

9 accuracy, put in -- it in a Federal Express envelope and

10 send it to Mr. Biegelman.

11 On a minority of occasions I analyzed the tape

12 and I was instructed to cease doing that.

13 Q I think you talked with Mr. Biegelman prior to

14 starting the calls, or perhaps while the calls were being

15 made about certain subjects that might be raised during

16 the course of these calls; is that right?

17 A No, sir.

18 Q Okay.

19 In any event, when you ma de these calls, there

20 were certain subjects you brought up on an almost regular

21 basis; is that right?

22 A Yes, sir.

23 Q And these were subjects that you wanted to have the
24 employees talk about; is that right?
25 A Amongst others, yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5098
Watstein-cross/Geduldig


1 Q And you wanted them to talk about the percent of

2 people accepted for membership into the Who's Who

3 Worldwide directory; is that correct?

4 A That is correct.

5 Q And you wanted them to tell you how they nominated

6 you or you were pretending to be a potential customer, and

7 you wanted them to talk about the nominating process?

8 A Yes, sir.

9 Q And you wanted them to tell you how long the company

10 had been in business?

11 A That is correct.

12 Q And you wanted them to tell yo u if Who's Who

13 Worldwide was financially stable?

14 A Yes, sir.

15 Q And you wanted them to tell you whether or not every

16 prospective member was interviewed for membership?

17 A That's correct.

18 Q And you wanted them to tell you about the plaque?

19 A Yes.

20 Q You wanted them to tell you about the benefits to be

21 received by the members?

22 A Yes, sir.

23 Q You wanted them to tell you whether or not this was a
24 prestigious organization?
25 A Yes, sir.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5099
Watstein-cross/Geduldig


1 Q And you wanted them to tell you about split billing?

2 A No, sir.

3 Q You wanted them to tell you about networking?

4 A Sometimes.

5 Q You wanted them to tell you whether or not you were

6 to be on some sucker list that would be sold?

7 A I occasional ly asked that question, yes, sir.

8 Q You wanted them to tell you about seminars?

9 A Yes, sir.

10 Q And those are at least some of the items that on a

11 pretty regular basis you brought up in your conversations;

12 is that right?

13 A Some of the items, yes, sir.

14 Q On November 11th, 1994, you called Who's Who

15 Worldwide, referring now to what has been marked as

16 Government's Exhibit 1325-A?

17 JUROR NO. 4: Watch out for that wire, you are

18 going to trip over it.

19 MR. GEDULDIG: I will trip and be -- wind up in

20 somebody's arms. It is taped up, I can't help it.

21 A I would like a copy of the document.

22 Q It is in evidence, so I can read it to you,

23 Mr. Watstein.
24 The bottom of page one, there is a conversation,
25 referring to CS --

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5100
Watstein -cross/Geduldig


1 A May I have a copy of the document?

2 Q I will read it to you, that's the way I prefer to

3 proceed.

4 A I will try to answer the question on that basis.

5 Q You called up using an alias, Chuck Sampson,

6 S A M P S O N; do you recall that?

7 A I don't without seeing the document.

8 THE COURT: What evidence is this?

9 MR. GEDULDIG: 1325-A in evidence, Judge.

10 Q So we are clear, Mr. Watstein, the cover page, the

11 front of page 1 says participants, and I am reading from

12 that document, 1325 A, it says participants, Steven West,

13 a/k/a Chuck Sampson.

14 Does that refresh your recollection you called up

15 Who's Who Worldwide using the name Chuck Sampson?

16 A Not totally, sir, without a copy of the document.

17 MR. WHITE: I have a copy if Mr. Geduldig wants

18 me to give it to him.

19 THE COURT: You can give it to him, if you want.

20 THE WITNESS: Thank you.

21 THE COURT: If he requests it, he can have a copy

22 of it.

23 A Thank you.
24 Q The participants are identified as Steven West, also
25 known as Chuck Sampson. One of the other participants is

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5101
Watstein-cross/Geduldig


1 Annette Haley. To the right it says Annette; do you see

2 that?

3 A I don't have a copy of the cover sheet, but it is

4 acceptable, sir.

5 Q Thank you.

6 At the bottom of page one, rather than CS, which

7 might be a little confusing, since CS is you, stands for

8 Chuck Sampson, and I will refer to CS as Watstein, so

9 everybody knows what I am talking about. At the bottom of

10 page one?

11 A Where are you reading?

12 Q The bottom quarter of the page, where it says

13 Annette, and the n Annette Haley. Do you see that?

14 A Yes.

15 Q We will go to you, CS, Watstein. Annette, hi,

16 Annette. This is Chuck Sampson. We spoke about, I guess

17 three or four months ago in reference to your membership.

18 Do you recall our conversation?

19 And Annette replies, umm, no, not really. Go

20 ahead and laughs in parenthesis.

21 You never called Annette before that?

22 A No, sir.

23 Q And you are lying to her?
24 A No, parts of the investigation, standard procedure.
25 Q You were trying to deceive Annette and make her

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5102
Watstein-cross/Geduldig


1 believe that you had previously spoken to her?

2 A I can't answer with a yes or no, sir.

3 Q You say, we spoke about, I guess three or four months

4 ago? Wasn't that a deceptive statement? You had not

5 spoken to her th ree or four months ago?

6 A I can't answer with a yes, or no, sir.

7 Q Hadn't you spoken three or four months ago?

8 A No.

9 Q And you tried to get her to say, I remember you, and

10 it would indicate how anxious she was to sell you?

11 A Not accurate.

12 Q But you had never spoken to her, and you said to her

13 on the tape to start off the conversation, I spoke to you

14 three or four months ago, and Annette says honestly, I

15 don't recall it; is that correct?

16 A That's correct, sir.

17 Q You go on to say at the top of page 2, Watstein,

18 sure, sure, I am with the Jewish Emergency Assistance

19 Group. It's Chuck Sampson, and we spoke very briefly, and

20 I realized that your membership was not for me. I had no

21 need to, to network. I've just been given a new job here,

22 which is director of contributions. Do you see that?

23 A Yes, sir.

24 Q And none of that is true, it is a complete
25 fabrication?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5103
Watstein-cross/Geduldig


1 A I can't answer yes or no.

2 Q Can you tell me if it is a fabrication?

3 A Part of the investigation, sir.

4 Q Did you make a fabrication up as part of the

5 investigation?

6 A It is a statement that is not accurate. It is not a

7 fabrication.

8 Q Is there any truth to it at all?

9 A No, sir.

10 Q Okay.

11 We are certainly trying at this point in time to

12 mislead Annette; is that right?

13 A No, sir.

14 Q You don't think so?

15 A No, sir.

16 Q Okay.

17 Going to page 4, in the middle of the page,

18 roughly in the middle of the page, right after Watstein

19 says, sure, Annette says, just as a point of interest, we

20 do receive about 5 ,000 requests each month for inclusion

21 into our registry.

22 Watstein responds, right.

23 Annette, umm, the membership consists of over
24 60,000 highly qualified and accomplished individuals who
25 are top and upper middle management executives in their

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5104
Watstein-cross/Geduldig


1 companies. Do you see that?

2 A Yes, sir.

3 Q And there is nothing untrue there, is there, to your

4 knowledge?

5 A Yes, sir, there are untruths there.

6 Q All right.

7 You think there are more or less than 60,000

8 members?

9 A I think the members are not all top and middle

10 management members in the company. It is an inaccurate

11 statement, false.

12 Q You read the directories?

13 A I looked at one of the directories, sir.

14 Q Then we go on, just below that, Wats tein says, right.

15 Annette says, we don't sell the wall plaques,

16 books, or other items to the general public.

17 Watstein, are there, are there no plaques at

18 all?

19 Annette, umm, excuse me.

20 Watstein, there are no plaques?

21 Annette, oh, no, you are going to get a plaque.

22 Watstein, oh.

23 Annette, no, I am saying, like, say a non-member
24 calls up, which we had that all the time, that they want
25 to buy a plaque. They couldn't buy a plaque for $10,000.

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5105
Watstein-cross/Geduldig


1 They are not a member.

2 Could you see that?

3 A Yes, sir.

4 Q And that is precisely the kind of thing you did with

5 your company, right?

6 A No, sir, inaccurate.

7 Q You had a catalogue? Didn't have a catalogue in your

8 company?

9 A Yes, sir.

10 Q And you sent that catalogue out and you would sell

11 anything that was in that catalogue, wouldn't you?

12 A I don't have a recollection as to whether the plaque

13 was for sale or not, sir.

14 Q You had things relating to your Who's Who company in

15 that catalogue?

16 A Merchandise, I don't know if the plaque was for sale.

17 Q If I was a non-member and I got a hold of your

18 catalogue, I could buy your Who's Who memorabilia,

19 although I didn't pay fees to your company?

20 A Yes, you could buy a Teddy bear, yes, sir.

21 Q And we then go on to page 5.

22 At the top we have Annette talking, and Annette

23 says, so, in other words, you definitely would not receive
24 that, okay, now let me see, hum, you will also receive
25 camera ready artwork with our seal and our name. And you

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5 106
Watstein-cross/Geduldig


1 could put the seal on businesses cards, letterheads,

2 etcetera.

3 Watstein, could we put that in advertisements you

4 think.

5 Annette, she coughs, and say, yeah, you could put

6 it on anything.

7 Watstein, oh, I see.

8 Annette, we also give you a press release, or I

9 can get you in contact with somebody in public relations.

10 Excuse me one second. That could write one up for you,

11 but there's a small fee for that. But otherwise we would

12 give you the paperwork, in other words, the letterhead,

13 for, umm --

14 Watstein says, what would you charge us to write

15 us a press release?

16 Annette, I don't know. I'd put you over and she

17 would be able to help out.

18 You see that?

19 A Yes, sir.

20 Q She is telling you if you want a press release, they

21 would do it for you for a small charge; is that right?

22 A Yes, sir.

23 Q And that is accurate? That's accurate information?
24 A I believe it is totally accurate.
25 Q If you could skip ahead for a second to the bottom of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5107
Watstein-cross/Geduldig


1 page 6, the very bottom, going on with the benefits,

2 Annette is talking again and she says: So it's very easy

3 to look them up. Now, there are about a dozen more

4 benefits. We have huge discounts on long distance and

5 international phone calls. We have Airborne Express. We

6 even have car insurance. Now let me tell you the price.

7 Now, with the membership, you are going to get all the

8 memberships and privileges, the wall plaque and the

9 registry.

10 Do you see that?

11 A Yes, sir.

12 Q She is being accurate, isn't she?

13 A To date, par tially.

14 Q Then we come to the nominations, in the middle of

15 page 5, and we flip back, right in the middle of dead

16 smack the middle of the page, where Annette says: Okay,

17 now you'll also be able to nominate two people for

18 membership.

19 Watstein, right.

20 Annette, just be careful when you nominate them

21 because we don't accept everybody. We also have our own

22 Who's Who gold Master Card.

23 Do you see that?
24 A Yes, sir.
25 Q And to your knowledge Who's Who Worldwide did have a

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5108
Watstein-cross/Geduldig


1 nomination process where they could -- where the members

2 could send in nominations; is that right?

3 A To the best of my knowledge, yes, sir.

4 Q And then at the top of page 6, getting to one of the

5 questions you are anxious to get at.

6 Watstein: No, my question is, how, half the

7 people get rejected, a third?

8 Annette, I would say we accept about five

9 percent.

10 Watstein, five percent?

11 Annette, five percent.

12 Watstein, really? Wow.

13 Annette, yeah.

14 Do you see that?

15 A Yes, sir.

16 Q And that is -- that's the number you like to hear,

17 because you say Annette there is not being accurate; is

18 that right?

19 A I can't respond to that question, what I would like

20 to hear or not, sir. Do you want to rephrase the

21 question?

22 Q Well, it is your belief that more than five -- many

23 more than five percent of the people who send in
24 applications are accepted; is that right?
25 A Is it my belief?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5109
Watstein-cross/Geduldig


1 Q Yes.

2 A It is m y belief, sir.

3 Q Then you go on to the middle of the page, about a

4 quarter of the way down, right after we just finished with

5 Annette saying yeah, and we go to your next attributions.

6 Watstein, so I will not find a delicatessen owner

7 in this thing?

8 Annette, no.

9 Watstein, I see.

10 Annette, no, no, no, no, no.

11 Watstein, okay.

12 Annette, no, you won't find -- we do have a

13 section where -- I don't know if it is in this registry or

14 another book, that they publish where we do have some

15 sort. But it is nothing like this.

16 Watstein, I see.

17 Annette, nothing like this. They are not

18 entitled to half the benefits and privileges that you know

19 a corporate leader would be.

20 Do you see that?

21 A I do.

22 Q Now, you mentioned a delicatessen owner; is that

23 right?
24 A Yes, sir.

2 5 Q You lived a good number of years in New York City,

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5110
Watstein-cross/Geduldig


1 the New York area?

2 A Yes, sir.

3 Q Ever heard of the Stage Delicatessen?

4 A Yes, sir.

5 Q Ever heard of the Second Avenue Deli?

6 A Can't say that I have.

7 Q You never heard of it?

8 A No, sir.

9 Q Ever hear of Ben's Deli, a chain on Long Island?

10 A Yes, sir.

11 Q Do you think the owner of the Stage Delicatessen, or

12 the owner of Ben's chain on Long Island would be qualified

13 to be in the registry because they are delicatessen

14 owners?

15 A I can't answer that question with a yes or no, sir.

16 Q But you were using the term delicatessen owner in a

17 pejorative sense?

18 A Yes.

19 Q And actually a delicatessen owner could be a wealthy

20 and succe ssful businessman?

21 A Philosophically, yes.

22 Q Not philosophically, there are wealthy and successful

23 businessmen who are delicatessen owners; is that right?
24 A I have no first-hand knowledge of that.
25 Q In any event, do you know any reason why someone who

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5111
Watstein-cross/Geduldig


1 owns a chain of two or three delicatessen stores would not

2 qualify for membership in the registry that you were

3 applying for in this conversation?

4 A Yes.

5 Q And what would the reason be?

6 A I think that's the gentleman who owns one or two, or

7 two or three delicatessens, would not be on the same par

8 with a Ben's Delicatessen, which is a sophisticated chain

9 operator. That person would likely have no substantial

10 management skills --

11 Q Two or three, no skills --

12 A I am not finished.

13 Q Sorry.

14 A A notably small business. Average delicatessen

15 about, about $500,000 in sales a year and would not likely

16 to be considered a global leader as a delicatessen

17 operator.

18 Q A delicatessen owner owning two or three stores is a

19 small operation to you?

20 A In my interpretation, yes.

21 Q If it was a big delicatessen that did millions of

22 dollars of business in each of its stores, is it beyond

23 your comprehension?
24 A Beyond my comprehension, sir.
25 Q If a guy owned two or three stores, and grossing in

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5112
Watstein-cross/Geduldig


1 the neighborhood of five or ten million dollars in those

2 stores, he would qualify?

3 A Possibly.

4 Q You used the term delicatessen owner, is there a

5 reason you used that t erm?

6 A Yes, sir.

7 Q Did you and Biegelman ever discuss the use of that

8 term, delicatessen owner?

9 A No, sir.

10 THE COURT: Have you completed that thought or

11 series thoughts?

12 MR. GEDULDIG: Yes.

13 THE COURT: All right. We will recess.

14 Members of the jury, we will recess until 1:30

15 tomorrow afternoon.

16 Let me tell you that those of you who are

17 planning ahead, you can step down, sir.

18 THE WITNESS: Yes.

19 (Whereupon, at this time the witness left the

20 witness stand.)

21 THE COURT: We will not be working -- at least

22 you won't, next Friday. We will not be working next

23 Friday. I have matters on the whole day Friday. So, this
24 Friday we are working tomorrow at 1:30.
25 Please do not discuss this case among yourselves

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5113



1 or anyone else. Do not do any research on deli owners or

2 any such interesting topics.

3 Keep an open mind and come to no conclusions,

4 none at all until you are in the jury room.

5 After the case is over, after you heard the

6 closing arguments of counsel, after you heard my

7 instructions to you on the law. And then only after you

8 interchange views with each other for the first time.

9 So, we will recess until 1:30.

10 Have a nice evening and morning.

11 (Whereupon, at this time the jury leaves the

12 courtroom.)

13 THE COURT: I would like to say in connection

14 with I discussed earlier, I hear talking right here on the

15 bench.

16 Now, you certainly have every right to discuss

17 things among yourselves. But you should try to keep it

18 down, low. Because not only do I hear it, but the jury is

19 hearing it.

20 N ow, I don't know if that is good or not good.

21 But I don't want to hear it. So keep it low.

22 When you have a lot of people in the courtroom,

23 and all of you are talking, or many of you are talking, it
24 is loud. I hear it.
25 Now, what about tomorrow?

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5114

1 MR. WHITE: Your Honor, before I give an estimate

2 I need to know or get a sense from the defense who else

3 needs to cross-examine Mr. Watstein and how long it would

4 be.

5 THE COURT: Mr. Dunn?

6 MR. DUNN: I think anywhere between 20 and 30

7 minutes.

8 THE COURT: Anybody else?

9 Mr. Neville.

10 MR. NEVILLE: Ten and 15 minutes.

11 THE COURT: Your usual, Mr. Neville.

12 MR. NEVILLE: The usual.

13 MR. LEE: Just to be safe and conservative, to

14 reserve myself a spot, about a half an hour.

15 THE COURT: Mr. Geduldig, how long are you going

16 to be?

17 MR. GEDULDIG: I don't think I will be much

18 longer, Judge. I think I will be done in 15 or 20

19 minutes.

20 THE COURT: So, we should finish the witness

21 tomorrow, and be prepared with another witness.

22 MR. WHITE: Sorry?

23 THE COURT: Be prepared with another witness.
24 MR. WHITE: I have some substantial redirect,
25 quite substantial, which may touch off another round of

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5115

1 cross examination.

2 So, I think Mr. Watstein, plus tapes will consume

3 tomorrow.

4 THE COURT: All right.

5 How long do you think your case is going to be?

6 Do you have a reasonable estimate at this time?

7 MR. WHITE: I have to confess things are going

8 slower than I thought. We will certainly consume ne xt

9 week, and probably the week after.

10 I am making an effort to try to cut down on

11 witnesses who would just be cumulative, consistent with

12 the government's burden of proof, and especially given the

13 large number of defendants that we have to present

14 evidence against.

15 Your Honor, I would say at least the next two

16 weeks.

17 THE COURT: Very well.

18 We will see you at 1:30 tomorrow.

19 (Case on trial adjourned until 1:30 o'clock p.m.,

20 Friday, February 20, 1998.)

21 I-N-D-E-X

22
W-I-T-N-E-S-S-E-S
23
PAGE LINE
24
25

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
5116

1 S T E V E N W A T S T E I N................. 4831 1
CROSS-EXAMINATION (cont'd)....................... 4831 11
2 CROSS-EXAMINATION................................ 4853 10
CROSS EXAMINATION......................... ....... 4891 2
3 CROSS-EXAMINATION................................ 4942 9

4 A N D R E A H E N D E R S O N - N I K O I.... 4959 12
DIRECT EXAMINATION............................... 4960 4
5 CROSS-EXAMINATION................................ 4976 17
CROSS-EXAMINATION................................ 4989 8
6 CROSS-EXAMINATION................................ 4998 13
CROSS-EXAMINATION................................ 5003 5
7 CROSS-EXAMINATION................................ 5009 14
REDIRECT EXAMINATION............................. 5011 20
8 RECROSS-EXAMINATION.............................. 5017 3
RECROSS-EXAMINATION.............................. 5018 3
9 FURTHER REDIRECT EXAMINATION..................... 5018 16
FURTHER RECROSS EXAMINATION...................... 5019 10
10 FURTHER RECROSS EXAMINATION...................... 5019 18

11 T E R R Y L E E M A R V I N S W I N N E Y.... 5021 7
DIRECT EXAMINATION............................... 5021 17
12 CROSS-EXAMINATION................................ 5040 7
CROSS-EXAMINATION................................ 5057 1
13 CROSS-EXAMINATION................................ 5059 1
CROSS-EXAMINATION................................ 5061 8
14 REDIRECT EXAMINATION............................. 5066 5

15 S T E V E N W A T S T E I N................ 5068 7
CROSS-EXAMINATION (cont'd)....................... 5068 14
16

17 E-X-H-I-B-I-T-S

18 Government's Exhibit 42-F received in evidence... 4962 20
Government's Exhibit 42-D received in evidence... 4964 7
19 Government's Exhibit 42-B received in evidence... 4971 15
Government's Exhibit 11-G received in evidence... 5024 13
20 Government's Exhibit 11-D received in evidence... 5025 14
Government's Exhibit 11-B received in evidence... 5032 25
21 Government's Exhibit 11-F received in evidence... 5034 23
Government's Exhibit 11-E received in evidence... 5036 7
22 Government's Exhibit 11-H received in evidence... 5038 13

23 Defendant's Exhibit GA received in evidence...... 4890 4
Defendant's Exhibit GA-1 received in evidence.... 4890 5
24 Defendant's Exhibit GA-2 marked for ID........... 4895 12
Defendant's Exhibit AO received in evidence...... 4920 19
25 Defendant's Exhibit GA-2 received in evidence.... 4957 10

HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER