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Dirtiest Trials Of The Decade
- this disgusting example of jurisprudence gone bad,
The Tragic Crushing of Who's Who Worldwide Registry
7629
2 For Tara Garboski
6800 Jericho Turnpike
3 Syosset, New York 11791
4 ALAN M. NELSON, ESQ.
For Oral Frank Osman
5 3000 Marcus Avenue
Lake Success, New York 11042
6
WINSTON LEE, ESQ.
7 For Laura Weitz
319 Broadway
8 New York, New York 10007
9 MARTIN GEDULDIG, ESQ.
For Annette Haley
10 400 South Oyster Bay Road
Hicksville, New York 11801
11
JAMES C. NEVILLE, ESQ.
12 For Scott Michaelson
225 Broadway
13 New York, New York 10007
14 THOMAS F.X. DUNN,
For
The Wizard
,
15 150 Nassau Street
New York, New York 10038
16
JOHN S. WALLENSTEIN, ESQ.
17 For Martin Reffsin 215 Hilton Avenue
18 Hempstead, New York 11551
19
Court Reporter: Owen M. Wicker, RPR
20 United States District Court
Two Uniondale Avenue
21 Uniondale, New York 11553
(516) 292-6963
22
23 Proceedings recorded by mechanical stenography, transcript
produced by computer-assisted transcription.
24
25
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7631
1 (Case called.)
2 THE COURT: All right. Getting back to the mail
3 fraud counts, according to my recollection I have
4 dismissed Count 2, Counts 39, 40 and 47.
5 At issue is the motion by defendant Osman to
6 dismiss certain counts because he was not employed at that
7 time.
8 Now, --
9 MS. SCOTT: Your Honor, would you like me to
10 start?
11 THE COURT: Yes.
12 MS. SCOTT: Your Honor, this issue is really
13 relevant to two defendants, Mr. Osman and Mr. Rubin, but
14 I'm just going to start general with the law I'll be
15 relying on. The question is whether they withdraw from
16 the scheme by leaving the company and this circuit has not
17 spoken clearly on what needs to be shown to establish a
18 withdrawal from a mail fraud conspiracy. There is one
19 case that mentions it and I'll describe it later on but --
20 THE COURT: We're not talking about a conspiracy.
21 MS. SCOTT: I'm sorry. I'm sorry, I misspoke.
22 There is one case that speaks about withdrawal from a mail
23 fraud scheme but that is a very inexplicit case and it
24 came down a long, long time ago and doesn't say anything
25 about what needs to be shown. So I'll be relying on the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7632
1 most part on two decisions, one from the Seventh and one
2 from the Eighth Circuit.
3 Now, the Seventh Circuit case is United States v.
4 Read, and the number is cited at 658 F.2d 1225. Now, in
5 that case the Seventh Circuit went so far as to say that
6 withdrawal could not be a defense to a mail fraud charge
7 and the Court reasons that in that particular case the
8 defendant had directed an inventory inflation scheme which
9 gave rise to false statements and mailings containing
10 those false statements and the Court likened the
11 defendant's activity to like setting a bomb with a timed
12 fuse and leaving it somewhere and when the bomb went off
13 the defendant was responsible for the explosion, even
14 though the defendant wasn't there placing the bomb down at
15 the time that it goes off.
16 Basically the reasoning was that the defendant
17 had set this whole procedure in motion and although he
18 left the company thereafter he was responsibl e for the
19 mailings that resulted in what he had set in place and the
20 mailings that contained these false representation.
21 Now, the parallels with this case, the parallels
22 with Mr. Osman, he was the supervisor for several years at
23 this company. He was responsible for training salespeople
24 and in doing that job he was showing salespeople how to
25 present the information contained in the pitches in a
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7633
1 manner that was most likely to generate sales. Now, he
2 left at a particular point and sales not only followed
3 from the training that he had given but also continued
4 obviously after he left. And these sales were all -- and
5 their attendant mailings were foreseeable. They were
6 mailings that resulted from sales that resulted from the
7 representation that contained in the pitches and the sales
8 techniques that salespeople learned like from Mr. Osman.
9 Now, Mr. Osman of course left the company and his
10 own words uttered after he left created an inference not
11 only that these completed deals and the mails attendant to
12 them were foreseeable but that he had seen them.
13 I'm referring to the tape-recording Government's
14 Exhibit 1379 and 1379-A is the transcript, and I'm turning
15 in particular to page 12 of that transcript where
16 Mr. Osman really takes credit for the success of this
17 company. He says, for instance, about halfway down the
18 page "I was very much a part of that place. You know, I
19 created that place for all intents and purposes." And then
20 he says a little further down, "you know my personality,
21 my being there, my interviewing the people, my training
22 the people, I'm an excellent trainer too, by the way. I
23 mean, I trained the people."
24 Now, this was after he left that Mr. Osman said
25 this about his role in the company. He admits that his
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7634
1 role was integral to the company's success.
2 We would hope for a finding of course like that
3 in Reed that withdrawal cannot be a defense under the
4 circumstances to charge as a mail fraud, however, if Your
5 Honor finds that it can be a defense, then we would submit
6 that it should at least go to the jury rather than being
7 dismissed by Your Honor before the jury gets a chance to
8 consider it.
9 I'm going to give you another case which is
10 United States v. Cohen, that's from the Eighth Circuit.
11 The cite is 516 F.2d 1358, and that case, in that case
12 they did submit the question to the jury. In that case
13 the defendant was the head of a company and he dreamed up
14 the scheme to defraud. He then, after putting it all in
15 place, left to serve a prison term and after he had served
16 a prison term he returned to the company and resumed his
17 prior responsibilities.
18 And just looking at that case, on page 1364 of
19 that case the Court says "while incarceration may
20 constitute evidence of withdrawal from a conspiracy, it is
21 hardly conclusive and merely creates a question for the
22 jury."
23 THE COURT: Was that a conspiracy case?
24 MS. SCOTT: In this section of the case, Your
25 Honor, they are considering this as a defense to the mail
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7635
1 fraud scheme.
2 Just double-checking to make sure there isn't a
3 charge of conspiracy in it (perusing.)
4 The only description I can see of the charges is
5 that the man was convicted of mail fraud.
6 THE COURT: What was Mr. Cohen's position with
7 the company?
8 MS. SCOTT: He was the head of it.
9 THE COURT: What was Mr. Read's position?
10 MR. NELSON: Your Honor, he was one of the
11 principal shareholders and creators of the company.
12 MS. SCOTT: That's probably right, Your Honor. I
13 just have to find out what took place in the case
14 (perusing.)
15 It says on page 1228 "Ralph Read was president of
16 Cenco, and a member of the board of directors".
17 Now, just going back to Cohen, Your Honor, where
18 the Court found that the defendant's incarceration raised
19 the issue of withdrawal but left it as a jury question. I
20 would liken it to this situation where Mr. Osman was
21 fired, didn't leave the company voluntarily. He admits
22 again in Government's Exhibit 1379, the tape, that he was
23 fir ed and paid a severance and again his actions after
24 that do not indicate a repudiation of this participation.
25 In fact, he tries to take credit for the success of the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7636
1 company and after that he tries to go back to Who's Who
2 Worldwide after trying to join another Who's Who in the
3 interim.
4 Now, for these reasons, Your Honor, we submit
5 that we should have at the very least the opportunity to
6 argue for the jury that this is not the kind of
7 repudiation of the scheme that is needed to establish that
8 he withdrew from it. At the very least the jury should be
9 permitted to consider that he is responsible for the
10 mailings that resulted from his supervisory activity while
11 he was at the company.
12 One other case I would like to refer you to, Your
13 Honor, is that Second Ci rcuit case, it doesn't say a whole
14 lot, it's from 1937. It's United States v. Dubrin. The
15 cite is 93 F.2d 499. In that case the Court said that
16 evidence of the defendant's severing of relations with the
17 company created a jury issue concerning withdrawal where
18 the defense was that in that case the defendant's
19 withdrawal took him outside of the statutory limitation
20 period.
21 THE COURT: Was that a mail fraud case?
22 MS. SCOTT: Yes, it was. I have a copy here. I
23 have copies of all three of those cases. Would you like
24 me to hand them up, Your Honor?
25 THE COURT: Yes.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7637
1 All right. Does that conclude your
2 presentation?
3 MR. WHITE: Yes, it does.
4 THE COURT: Anybody else?
5 MR. NELSON: Yes, Your Honor, if I might be
6 heard.
7 Ms . Scott, as I indicated yesterday on the
8 record, provided me with the citations or copies of the
9 decision and I had an opportunity to review them. First I
10 would like to clarify from a factual standpoint,
11 Mr. Osman's status in the company at the time he left, he
12 had been employed there for less than a year and was a
13 group leader which in essence is a trainer for a period of
14 ten months before he left the company, not there for a
15 number of years training a plethora of people.
16 The second thing, I would bring out the fact as
17 the Court is well aware that the statement made by
18 Mr. Osman in the transcript 1379 is a statement made by
19 him when he's obviously puffing during the course of what
20 he believes to be a job interview and he's attempting to
21 take credit for his role in the company while he's present
22 there. That's from a factual standpoint .
23 Your Honor, I first would like to turn to the
24 Cohen decision which the government has relied upon and
25 point out there is a create difference between the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7638
1 position of Mr. Cohen and my clients. Mr. Cohen had
2 created the company there, he had created the scheme as
3 well. Mr. Cohen was then sentenced to a period of
4 incarceration for an unrelated offense, a tax offense for
5 that matter and placed the son in charge of the business
6 to run the business while he was incarcerated. He then
7 came back to the business after he finished his period of
8 incarceration and took back over from his son in the
9 business. That would be the functional equivalent, I
10 would submit, Your Honor, if Mr. Gordon had his son
11 working in the business, he went away for a period of time
12 for the tax charges claimed in this case and took back
13 over the business in the exact same position.
14 I would submit this is a completely different
15 type of situation. We're not speaking about one large
16 ongoing mail fraud which was created by my client, and
17 specifically Cohen states at page 1364, and I'll start
18 reading there, Your Honor. "A jury might well have
19 concluded that the appellant," that being Mr. Cohen, "in
20 establishing an ongoing mail fraud scheme throughout the
21 United States, in actually preparing the forms of letters,
22 applications and sales pitch used in the scheme and in
23 addition having selected most of the employees himself,
24 including his son, would have reasonably foreseen, if not
25 planned, that his son and the employees would continue the
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7639
1 operation in his absence as they did."
2 Continuing two paragraphs down on the same page,
3 1364. "Once the appellant contrived the scheme to defraud
4 and set it in motion he was engaged in a continuous
5 offense as causing the mails to be used in furtherance
6 thereof, an offense which is not mitigated by his mere
7 absence."
8 Your Honor, I would submit that the situation as
9 it relates to Mr. Osman is completely nonanalogous. This
10 is not somebody who created the scheme, he didn't write
11 the scripts, he didn't prepare the presentations, he never
12 even sought solicitation letters and he came to work in
13 the company some three years after it first came into
14 existence and was in fact terminated by the person who
15 allegedly created the scheme.
16 THE COURT: Excuse me for a minute.
17 (Short recess taken.)
18 THE COURT: You may proceed, Mr. Nelson.
19 MR. NELSON: I would submit the position of
20 Mr. Cohen is not at all analogous to that of Mr. Osman and
21 one of the questions inquired of the Court by the
22 government a moment ago is what was the position of
23 Mr. Cohen vis-a-vis the business and obviously I submit
24 that is a very significant factor.
25 Likewise in Read the actual individual upon which
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7640
1 the Court was addressing was not Mr. Read but it was an
2 individual by the name of Ronald Spiegel. Mr. Spiegel,
3 it's spelled out on page 1228 of the decision, was
4 "vice-president of Cenco, C-E-N-C-O, and president of CMH
5 Corporation," and on page 1229 of the decision it goes on
6 to indicate that Mr. Spiegel was instrumental in advising
7 literally all of the employees of the corporation to alter
8 cards which were subsequently placed into the mail.
9 He then claimed at a later point in time that
10 some of those cards mailed subsequent to his leaving the
11 company, he should not be held accountable for those
12 cards.
13 I would submit, Your Honor, once again gie
14 fact he was instrumental in designing and implementing the
15 scheme, it is quite a bit different than the situation we
16 have here and indeed if we read the Court's decision in
17 Read at page 1240 it states and this is significant
18 because it discusses the issue of them being treated as an
19 aider and abettor for the substantive offense. "As an
20 aider and abettor, Spiegel need not agree to the scheme."
21 THE COURT: What page is that?
22 MR. NELSON: This is on page 1240 of the
23 decision, Your Honor. It is in the first paragraph under
24 note 22. It's the last sentence in that first paragraph
25 where I'm starting to read from.
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7641
1 "As an aider and abettor, Spiegel not need agree
2 to the scheme. He need only associate himself with the
3 criminal venture and participate in it."
4 It then cites a case United States v. Bec. The
5 evidence here overwhelmingly showed Spiegel's association
6 and participation in the mail and securities fraud. He
7 directed the inventory inflation scheme which largely
8 contributed to the false statements contained in the
9 mailings and disclosure statements. The mailings and
10 sales were an inevitable consequence of his actions.
11 Spiegel could properly be found to be jointly responsible
12 for setting the scheme in motion and thus causing the
13 mailings by third-parties.
14 I would submit, Your Honor, that the situation
15 which took place here is very, very different than that of
16 Mr. Spiegel and one of the reasons why I only sought to
17 dismiss those counts which were well beyond the period of
18 time that Mr. Osman had already left the corporation was
19 in order to demonstrate that any people that could have
20 trained with respect to specific mailings that might have
21 been from lead cards that he trained them for, were
22 already over.
23 If you look at the first set of charges, what I
24 purposefully did not move to dismiss, Counts, I believe, 4
25 and 5 which are November 27th or 28, 1992, because it's
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7642
1 conceivable that he trained or instructed people where
2 there were mailings that took place in October or November
3 where subsequently during say a one or two-month period of
4 time there might have been discussions that took place and
5 it would have been part of a "scheme" as it related to
6 that group of mailings that took place. I believe he
7 could only be held accountable substantively for those
8 that are only reasonably foreseeable to him when he's
9 actually there working in the corporation in that
10 capacity, not ones for which he's completely terminated
11 his relationship with the corporation during that period
12 of time.
13 In fact, there are two cases which are much more
14 analogous, Your Honor, and they were cited in Read and I
15 have the opportunity, since the government gave me a
16 chance to look them up last evening which I think are a
17 lot more on point as they relate to the status of
18 Mr. Osman.
19 The first one is Blue v. United States found at
20 138 F.2d 351, it is a Sixth Circuit decision. Reading
21 from page 362 of the decision, the Court states "the mail
22 fraud statute is harsh. Participation in a scheme
23 completely outside the cognizance of federal law becomes
24 ipso facto a federal crime if the mails are subsequently
25 used in its furtherance, although such use be
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7643
1 incidental and without the consent, knowledge or intent of
2 the participants charged. The use of the mails carries
3 back to the scheme and binds both together in criminal
4 liability. The participation in the scheme cannot be said
5 to link with the use of the mails, if such participation
6 had ceased before the mails were used."
7 "To hold that a former participant who had ended
8 his association with the scheme long before the mails were
9 used is an aider or abettor, is causing use of the mails
10 in furtherance of the scheme would be to novel a
11 construction of an already sufficiently extended
12 application of criminal law."
13 I would likewise -- I would note, Your Honor, in
14 this particular instance Mr. Blue is in a situation
15 somewhat analogous to Mr. Osman. He was an employee in
16 the business, there were a number of mailings that took
17 place and was not to be held accountable in this decision
18 for subsequent mailings after he left unless they were
19 reasonably foreseeable to him.
20 A second decision which points in the same
21 direction, is Glazerman v. United States, found at 421
22 F.2d 547, and this is a Tenth Circuit decision, and I'm
23 reading now from page 551 of the decision. It states,
24 Your Honor. Since, however, an individual cannot be held
25 criminally liable for substantive offenses committed by
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7644
1 members of the conspiracy before the individual had joined
2 or after he had withdrawn from the conspiracy. We have
3 examined the record to determine whether each appellate
4 was a member of the conspiracy at the time of the
5 substantive offenses charged in the indictment. The
6 record discloses that the substantive offenses occurred on
7 dates beginning with September 6, 1965 and ending with
8 January 21, 1967. Glazerman clearly was involved in the
9 conspiracy at all times during that period.
10 However, with regard to Parella, uncontroverted
11 evidence is that he started with Oklahoma Brentwood in
12 mid-June 1966 and quit in the third week of September
13 1966. Consequently he is criminally liable only on
14 substantive Counts 8 and 9 which are dated September 6th
15 and 20, 1966 respectively and on the conspiracy count.
16 I would submit, Your Honor, this decision
17 likewise points to where an employee, and there are
18 numerous mailings that take place occur, in a mail fraud
19 case, certainly as it relates to the -- as it relates to
20 the conspiracy counts. There's one overachieving scheme
21 and certainly as it relates to that he could either be
22 held accountable for that unless withdrawal is proven or
23 can be held accountable if he comes back in and agrees and
24 adopts what takes place.
25 However, as it relates to the substantive counts,
OWEN M. WICKER, RPR OFFICIAL COURT REPORTER
7645
1 I submit, for somebody who is not the creator of the
2 scheme itself, he cannot be held accountable for acts that
3 occur when he's not in the employ of the business as an
4 aider and abettor.
What an affront to all things constitutional that this was not dismissed...again, as it had been a couple of years earlier.
To continue this fascinating testimony and undercurrents of the power game,
here
is a full version of Mar 12 transcript here
Dirtiest Trials Of The Decade
- this disgusting example of jurisprudence gone bad,
The Tragic Crushing of Who's Who Worldwide Registry
The Who's Who Worldwide Tragedy has to count as being among the Questionable federal trials.
For Reid Elsevier to have climbed so high up into bed with such 'vaunted' federal judges,
dispensing cash and favors with such profundity, tells sadly on all of us,
for tolerance of such high crimes is tantamount to participation.
Dirtiest Trials Of The Decade
- this disgusting example of jurisprudence gone bad,
The Tragic Crushing of Who's Who Worldwide Registry
Dirtiest Trials Of The Decade
- this disgusting example of jurisprudence gone bad,
The Tragic Crushing of Who's Who Worldwide Registry
FOOTNOTE OF FOOTNOTES!...
Hundreds of thousands of people visit the websites currently producing
growing thousands of cups of food PER DAY to feed starving people,
websites, created by the same hands that brought you this really offensive trial,
one of the dirtiest trials of the past century.
Perhaps there's something to these shortcuts of masters and millionaires.