459
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
461
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: First of all, I have advised you that
6 this men's bathroom is next to the jury room and is not to
7 be used. I am advised that some of you are still using
8 it. Do not. Use the one upstairs.
9 I was requested to get permission, or attempt to
10 get permission to bring cellular phones into the
11 courthouse. I cannot get that permission.
12 You may not use it in any part of the Court,
13 either in the area by the magometer and the end of the
14 door.
15 You may use the cellular phones in cars. I know
16 they can be used there. I don't happen to use one, but I
17 see people driving along with one of these things in their
18 ear as they are driving. I don't know how they manage to
19 drive with that, but if you wish, you can use your
20 cellular phones in the car.
21 There are eight public phones in the court
22 building. Three, two, and two. Three in the lower level,
23 two on the upper level, I believe. Whatever. If you
24 cannot use those, use your cellular phones in the car, not
25 in the courthouse. We cannot allow that.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 We will wait for the j ury to get here.
2 Anything else anyone wants to bring up?
3 (No response.)
4
5 (Whereupon, a recess is taken.)
6
7 THE CLERK: Jury entering.
8 (Whereupon, the jury at this time entered the
9 courtroom.)
10 THE COURT: Good morning, members of our well
11 rested jury.
12 Please be seated.
13 I want to thank you all for being here
14 punctually. I understand one juror was late. I am sure
15 there is a reason for that juror being late, and we
16 appreciate your punctuality and sense of responsibility.
17 Several announcements.
18 Today we have a judge's meeting, which means that
19 that will be from 1:00 to 2:00. We will take lunch from
20 1:00 to 2:15, instead of 12:30 to 1:30 only.
21 Also, there will be no court this Friday, so you
22 can go to work or do whatever else you want to do on
23 Friday.
24 The f ollowing Friday, the 30th of January, we
25 will work from 1:30 to 5:30, January 30th, 1:30 to 5:30.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
463
1 You may proceed.
2 MS. SCOTT: Thank you, your Honor.
3 I would like to tell the Court we have provided
4 binders to all the jurors with respect to the exhibits
5 that we have, and continue in that fashion.
6 THE COURT: Good.
7 MS. SCOTT: And the government's first witness
8 will be Madeline Middlemark.
9 THE CLERK: Please raise your right hand.
10
11 M A D E L I N E M I D D L E M A R K,
12 called as a witness, having been first
13 duly sworn, was examined and testified
14 as follows:
15
16 THE CLERK: Please state your name and spell your
17 last name slowly for the record.
18 THE WITNESS: Madeline Middlemark,
19 M I D D L E M A R K.
20 THE COURT: Have a seat, Ms. Middlemark.
21 You may proceed.
22
23
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-direct/Scott
1 DIRECT EXAMINATION
2 BY MS. SCOTT:
3 Q Good morning, Ms. Middlemark.
4 A Good morning.
5 Q Tell us where you live?
6 A 96 Storehill Road in Westbury.
7 THE COURT: S T O R E?
8 THE WITNESS: Correct.
9 Q Are you married?
10 A I am a widow.
11 Q Do you have any children?
12 A Yes, I have one son.
13 Q Do you know Bruce Gordon?
14 A Yes, I do.
15 Q How do you know him?
16 A I know Bruce Gordon because I grew up next door to
17 him.
18 Q And how long have you known him?
19 A Approximately 47 years.
20 Q And over those 47 years have you maintained a
21 friendship with him?
22 A Yes, I have.
23 Q How often do you see him?
24 A Once a month, every other month.
25 Q And have you had occasion over the past 47 years to
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-direct/Scott
1 get to know other members of Mr. Gordon's family?
2 A Yes.
3 Q For example, who do you know in his family?
4 A I know his ex-wife Elissa Gordon.
5 I knew his son Todd, and I knew his son Curt, who
6 both passed away. I know his son Craig, and his sister,
7 Joyce Grossman, and his brother-in-law Richard Grossman.
8 Q Now, over the period of your friendship with
9 Mr. Gordon, have you had occasion to lend him money?
10 A Yes. I have.
11 Q How many times have you lent him money?
12 A Ten or 20.
13 Q Can you describe what types of loans you made to him?
14 A I don't understand the question.
15 Q Hav e you loaned him money for his personal use or his
16 businesses?
17 A I believe both.
18 Q And how, if at all, were these loans secured?
19 A Well, Mr. Gordon for a large amount, say, 5,000,
20 10,000, usually gave me a handwritten note saying he owed
21 me the money. But if it was for like 500 or something
22 like that, I didn't get a note.
23 Q Now, if it was -- if the amount of the note was
24 written, were you given a copy of it?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-direct/Scott
1 Q Does Bruce Gordon always pay you back the money he
2 borrowed from you?
3 A Yes, he did.
4 Q How would he repay you?
5 A Sometimes in cash, if it was a small amount, or by
6 check.
7 Q Okay.
8 And when he repaid you, what did you do with the
9 promissory notes that memorialized th e loans?
10 A I would rip them up.
11 Q So, after the money was repaid, did you keep any
12 record of the loans that you made to him?
13 A No.
14 Q Did you ever lend Mr. Gordon any money to pay his
15 ex-wife's medical expenses?
16 A Not to my knowledge, I did.
17 Q Did you ever hear of his ex-wife needing medical
18 treatment at any time?
19 A No, I didn't.
20 Q Have you ever loaned Mr. Gordon money to pay his
21 ex-wife's alimony?
22 A Not to my knowledge.
23 Q Now, when he asked you to borrow money, what did he
24 typically say he was going to use the money for?
25 A He usually needed it, like a bridge time loan, if he
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-direct/Scott
1 was short on cash, or if he needed it for his business.
2 At one time he needed it to pay an attorney.
3 He really didn't go into all the details.
4 Q Okay.
5 I am directing your attention now to October
6 1993.
7 Do you remember loaning Mr. Gordon money at or
8 around that time?
9 A I don't remember.
10 Q Okay.
11 Now, for example, do you think you loaned him
12 $10,000 at that time?
13 A I don't remember whether I did or not.
14 Q I am going to show you Government's Exhibit 425-B.
15 (Handed to the witness.)
16 MS. SCOTT: I remind the Court it is in evidence
17 and it has been passed out to the jury for their binders.
18 Would you please read from that document?
19 A The whole thing?
20 Q Yes. Please, thank you.
21 A It says promissory note, $10,000, date, October
22 first, 1993. I, Bruce Gordon, hereby promise to pay to
23 the order of Madeline Middlemark the amount of $10,000,
24 and then in parenthesis, $10,000, on or before five years
25 from the date of this note. Interest at the rate of 7.5
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-direct/Scott
1 percent per annum to be paid at maturity. Maturity date,
2 December 30th, 1998, Bruce Gordon.
3 Q Now, aside from the time that you testified before
4 the grand jury, have you ever seen that document before?
5 A No, I have not.
6 Q And in October of 1993, did you loan Mr. Gordon the
7 $10,000 referenced in that note?
8 A I don't believe I did.
9 Q Thank you, Ms. Middlemark.
10 One moment.
11 THE COURT: Yes.
12 (Whereupon, at this time there was a pause in the
13 proceedings.)
14 MR. WHITE: Thank you. No further questions.
15 MR. TRABULUS: Your Honor, if I may just have a
16 moment?
17 THE COURT: Surely.
18 (Whereupon, at this time there was a paus e in the
19 proceedings.)
20
21 CROSS-EXAMINATION
22 BY MR. TRABULUS:
23 Q Good morning, Ms. Middlemark.
24 A Good morning.
25 Q Now, I think you just told Ms. Scott that you didn't
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-cross/Trabulus
1 loan the $10,000 that was evident -- that was referred to
2 in the note you were just shown?
3 A Right.
4 Q I think you also indicated you don't remember one way
5 or another whether or not you loaned Mr. Gordon $10,000 in
6 October of 1993; is that correct?
7 A Yes, that's correct.
8 Q So, it is possible that you loaned him $10,000 in
9 1993 in October?
10 A It's possible.
11 Q And sometimes when you loaned him money did he pay
12 you back quite quickly?
13 A Yes, he did.
14 Q Sometimes within a matter of weeks or even days ?
15 A That's correct.
16 Q Now, do you recall whether or not when he paid you
17 back, he paid you back in cash or in check?
18 A No, I don't.
19 Q In some instances would he pay back in cash and
20 others in check?
21 A Yes.
22 Q When he paid back in check, would it sometimes be a
23 personal check?
24 A I don't remember.
25 Q Is it that you don't remember --
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-cross/Trabulus
1 A I really don't remember whether it was his personal
2 check or company check. I really don't.
3 Q Okay.
4 Do you recall sometimes in 1993 or 1994 you did
5 lend Mr. Gordon 10,000, just not the particular date?
6 A I don't remember.
7 Q Okay.
8 Ms. Middlemark, did there come a time at
9 Mr. Gordon's request you went to an auction that was
10 loc ated in a penthouse in Manhattan?
11 A Yes.
12 Q And was this an auction whereby a bankruptcy trustee
13 was having various items auctioned off?
14 A Yes.
15 Q Did you see the auction occurring?
16 A Yes.
17 Q Did you see the furnishings of the auction --
18 penthouse being auctioned off?
19 A Yes.
20 Q Did you see some of the decorations and artwork being
21 auctioned off?
22 A Yes.
23 Q And that was being auctioned off so -- withdrawn.
24 The property being auctioned off was supposed to
25 be the property of Who's Who Worldwide; is that correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-cross/Trabulus
1 A I believe so.
2 Q And this was an auction of Who's Who Worldwide's
3 property, not Mr. Gordon's property; is that correct?
4 A I believe so.
5 Q Among the things you saw auctioned off, was there
6 sculpture, do you recall?
7 A Everything in the apartment was auctioned.
8 Q Do you remember what some of the things in the
9 apartment were? Was there some sculpture there?
10 A Probably so.
11 Q Crystal?
12 A Crystal as far as glassware?
13 Q Yes.
14 A Yes, there was. But that was not auctioned.
15 Q Okay.
16 Any paintings? Did you see those auctioned?
17 A Yes.
18 MR. TRABULUS: No further questions.
19 MS. SCOTT: No further questions.
20 THE COURT: One moment, please.
21
22 CROSS-EXAMINATION
23 BY MR. WALLENSTEIN:
24 Q Good morning, Ms. Middlemark.
25 A Good morning.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-cross/Wallenstein
1 Q Would you say it was a fairly regular appearance for
2 Mr. Gordon to borrow money from yo u?
3 A I don't understand.
4 Q It wasn't unusual, was it?
5 A No.
6 Q You say it happened on ten or twelve occasions at
7 least?
8 A Yes.
9 Q Did he always repay the money?
10 A Yes, he did.
11 Q So, at this point in time he owes you nothing; is
12 that correct?
13 A That's not correct.
14 Q But he always repaid the loans?
15 A Yes.
16 Q Did you ever meet Mr. Gordon's accountant?
17 A No. I never had.
18 Q Never had any contact with him?
19 A No.
20 MR. WALLENSTEIN: Thank you.
21 No further questions.
22 MR. GEDULDIG: Judge, I have a question.
23 THE COURT: Go ahead.
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-cross/Geduldig
1 CROSS-EXAMINATION
2 MR. GEDULDIG:
3 Q Ms. Middlemark, I think you testified on direct
4 examination that you have known Mr. Gordon for some 47
5 years?
6 A Yes.
7 Q And you would consider yourself to be a personal
8 friend of his?
9 A Yes.
10 Q You know him very well?
11 A Yes.
12 Q Did you know any of the people that he was involved
13 in business with?
14 A No.
15 Q As you sit here now, do you know him to have misled
16 you with regard to the reasons that you were lending him
17 money?
18 A No.
19 Q As you hit here now, is there anything that you know
20 that he told you which you learned to be untrue?
21 A No.
22 MR. GEDULDIG: I have no other questions.
23 THE COURT: Anything else?
24 MS. SCOTT: Nothing further, your Honor.
25 THE COURT: You may step down.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Middlemark-cross/Geduldig
1 (Whereupon, at this time the witness left the
2 witness stand.)
3 THE COURT: Please call your next witness.
4 MS. SCOTT: The government calls Maurice
5 Mansouri.
6 THE COURT: Step up and raise your right hand.
7
8 M A U R I C E M A N S O U R I,
9 called as a witness, having been first
10 duly sworn, was examined and testified
11 as follows:
12
13 THE COURT: Be seated.
14 State your full name and spell your last name.
15 THE WITNESS: Maurice Mansouri, M A N S O U R I.
16
17 DIRECT EXAMINATION
18 MS. SCOTT:
19 Q Good morning, Mr. Mansouri.
20 A Good morning.
21 Q Can you tell us what you do for a living?
22 A Own a clothing store.
23 Q What is the name of that clothing store?
24 A Mansouri.
25 Q Where is it located?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Mans ouri-direct/Scott
1 A In Greenvale, 270 Wheatley Plaza.
2 THE COURT: 270 what?
3 THE WITNESS: Wheatley Plaza.
4 Q How long has your store been in business?
5 A About 17 years.
6 Q I am showing you Government's Exhibits 485 through
7 494.
8 (Handed to the witness.)
9 Q There are two copies of each of them. Do you
10 recognize those?
11 A Yes, I do.
12 Q How do you recognize those? What do you recognize
13 those to be?
14 A The sales receipts for the merchandise we sold from
15 the store.
16 Q How do you recognize them?
17 A The receipts are usually issued in the store for
18 merchandise that customers buy.
19 Q Do they say Mansouri at the top?
20 A Yes, they do.
21 Q How are these documents created?
22 A Created by hands at the time of the purchase.
23 Q Who creates them?
24 A The salesperson.
25 Q Is that the salesperson who would be serving the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Mansouri-direct/Scott
1 customer at the time of the purchase?
2 A Yes.
3 Q And were these documents kept in the course of
4 regularly conducted business activity of Mansouri?
5 A Yes.
6 Q And was it the regular business practice of Mansouri
7 to keep these business records?
8 A Yes. .
9 MS. SCOTT: I offer Government's Exhibits 485
10 through 494 in evidence.
11 THE COURT: Any objection?
12 MR. TRABULUS: No objection.
13 THE COURT: Government's Exhibits 485 through 495
14 in evidence.
15 (Government's Exhibit 485 through 495 received in
16 evidence.)
17 Q Looking through those documents, do they show who the
18 name of the customer is?
19 A Yes, it does.
20 Q Who is that?
21 A Bruce Gordon.
22 Q Is that the customer on all the documents you have in
23 front of you?
24 A There is three of them, right?
25 Q Yes, that's right.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Mansouri-direct/Scott
1 A Yes.
2 Q Can you tell us what those documents show, what
3 occurred in those transactions that is recorded on those
4 documents?
5 A It shows the customer came to the store and purchased
6 items like jackets, pants, shirts, belts.
7 Q Going through them one by one, what is the date on
8 the first one, on Government's Exhibit 485?
9 A September 21, '91.
10 Q And what does the receipt there show was purchased?
11 A A pair of pants and a belt.
12 Q What was the total amount spent that day on those
13 items?
14 A I am sorry, it is more than that. That's the second
15 pag e. Let me find where the first page of it is.
16 Two receipts, numbers 485 and 486. Those are the
17 same -- we write on the first one and then we finished up
18 on the second one as you can see.
19 So, on the second receipt it is a pair of pants,
20 a belt. And the first one is two sports jackets, two more
21 pants, two more shirts, and one more belt.
22 The total amount is $2,924.08.
23 Q And just for clarity, Government's Exhibit 485 and
24 486 record transactions that occurred on the same day?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Mansouri-direct/Scott
1 Q Is that September 21st, 1981?
2 A Yes.
3 Q And if you can move on to the next transaction date.
4 A That's 487?
5 Q I am sorry, what is the date?
6 A That's Exhibit 487?
7 Q Yes; that's right.
8 A The date is October 2nd, 1991.
9 Q Please tell the jury what transactions occurred on
10 that day.
11 A It shows that there were two pairs of pants for
12 $618.45.
13 Q And moving on to the next transaction date, I believe
14 that is 487?
15 THE COURT: That was just 487, I believe.
16 Q I am sorry. I believe that that is 488.
17 A 488 is a copy have a charge. Am I correct?
18 Q Which transaction does that one relate to?
19 A This one relates to -- I have to figure this out.
20 Give me one minute, okay?
21 It looks like it pays a balance on Exhibit 486,
22 485, and Exhibit 487. If you look at the balances on
23 Exhibit 485, you have a balance of $924.08. And on
24 Exhibit 487 you have a balance of $217. If you add those
25 two, I think you will get $1,148.08. That's the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Mansouri-direct/Scott
1 combination of the two balances which was paid on that
2 date.
3 Q Now, putting aside Government's Exhibit 485, 486, 487
4 and 488 --
5 A Right.
6 Q I have to ask you to move on to the next transaction
7 date?
8 A 488 and 490?
9 Q Okay.
10 What is the date of that transaction?
11 A June 4th, 1992.
12 Q And what was purchased on that day?
13 A Three sports jackets -- four sports jackets, I am
14 sorry and seven pairs of pants.
15 Q And how much was the amount of that purchase?
16 A $5,088.65, total amount.
17 Q Going on to the next exhibit, 491, I believe; what
18 does that document show?
19 A The date on it is September 24th, 1992.
20 Q And what does that document show?
21 A That shows, again, purchases of one jacket -- it is
22 two receipts actually, 491 and 491-A, they refer to the
23 same thing. We start o n one receipt and finished on
24 another receipt. He got one jacket, four pairs of pants,
25 and eight shirts.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
480
Mansouri-direct/Scott
1 Q And what is the total amount of that purchase?
2 A $3,130 -- I am sorry, it is not clear here. It is a
3 little faded. $3,130.23.
4 Q Okay.
5 Now, looking at the next items of 492, I believe
6 through -- 492 and 493.
7 A Yes.
8 Q What is the date of the purchase on
9 Government's Exhibit 492?
10 A I think 492 and 493 --
11 Q Do they show a balance?
12 A Yes, they show a balance.
13 I think 493, the balance on 493 is the total --
14 again, it is not clear here. Is it okay if I look here.
15 Q I will ask you to move on to 494 and 495.
16 A Okay.
17 494 is the same as 493. It is just more clear
18 copy.
19 Q Okay.
20 Can you tell the jury what that says?
21 A Yes. There was a purchase of three jackets, five
22 pairs of socks, one belt and one shirt for $2,831.85.
23 Q Now, looking at all of these documents together, can
24 you tell the jury how they were paid for?
25 THE COURT: What was the date of the last
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
481
Mansouri-direct/Scott
1 exhibit, 494 and 495?
2 THE WITNESS: 494, the date on it is April 4th of
3 1993.
4 I don't have a 95 there.
5 You want me to go receipt by receipt?
6 Q Can you tell from looking at those documents how the
7 purchases were paid for?
8 A Yes. This was -- Exhibit 494 was paid by American
9 Express.
10 Exhibit 491-A was partially cash.
11 Exhibit 489 was partially American Express.
12 Exhibit 487 is partially American Express.
13 Exhibit 485 is partially American Express. And
14 Exhibits 485 as I -- 488 as I mentioned earlier was a
15 combination of 487 and 485, also by American Express.
16 Q Thank you.
17 I am showing you Government's Exhibit 404-A and B
18 in evidence, Mr. Mansouri. And specifically I would like
19 you to read the date in the box for 63.
20 MR. TRABULUS: Objection.
21 MR. JENKS: I want to object also.
22 THE COURT: Is this document in evidence?
23 MR. JENKS: Yes.
24 THE COURT: What is the objection? You can state
25 it?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
482
Mansouri-direct/Scott
1 MR. JENKS: I don't believe he is a qualified
2 expert to testify as to a government exhibit related to a
3 tax form, or a form the IRS uses and sent off to the IRS.
4 Further, I object to the testimony as being
5 cumulativ e. The American Express records are already in
6 evidence.
7 MR. TRABULUS: Your Honor, I have the same
8 objection. The particular exhibit being shown in evidence
9 is I believe dated 1991.
10 THE COURT: What is the exhibit?
11 MS. SCOTT: The 433-A form filled out in
12 September of 1991.
13 THE COURT: What part of the exhibit are you
14 showing to this witness?
15 MR. WHITE: I am showing the part that shows a
16 date and some expenses claimed for that time period.
17 I would add, your Honor, I am only asking the
18 witness to read off the information on the form. The form
19 is already in evidence.
20 THE COURT: You can read it, can't you?
21 MR. WHITE: All right.
22 THE COURT: Why do we need him to read it for?
23 Go ahead and read it.
24 MS. SCOTT: All right.
25 I will ask the Court to take notice that the date
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
483
Mansouri-direct/Scott
1 on this 433-A form is September 16th, 1991.
2 THE COURT: September 16th?
3 MS. SCOTT: Right.
4 The amount claimed for expenses at that time is
5 $175, as set forth in box 58, other expenses.
6 I will ask the Court and jury to compare the
7 amount which Mr. Mansouri reread from
8 Government's Exhibit 485 and 486.
9 Would you read to the jury that amount?
10 THE WITNESS: September 21st, '91?
11 Q Yes.
12 A The amount that was given to me or the amount that
13 was spent?
14 Q The amount spent total on the purchases on that day.
15 A $2,924.08.
16 MS. SCOTT: Thank you.
17 No further questions.
18 MR. TRABULUS: I have no questions.
19 THE COURT: You may step down.
20 (Whereupon, at this time the witness left the
21 witness stand. )
22 THE COURT: Please call your next witness.
23 MS. SCOTT: The next witness is Brian Lucas.
24 MR. JENKS: Judge, may we approach with the
25 assistants United States Attorney for a moment?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
484
1 THE COURT: Yes.
2
3 (Whereupon, at this time the following took place
4 at the sidebar.)
5 THE COURT: Yes, Mr. Jenks.
6 MR. JENKS: Judge, I recognize that I don't
7 recognize Mr. Gordon. However, I am going to make an
8 objection to the calling of more store people at this
9 point. It is cumulative testimony. The American Express
10 records are in evidence. The jury has seen that he has
11 charged X amount on clothes, shoes and belts.
12 THE COURT: You are going so fast that you lost
13 me back at the American Express headquarters. Did you get
14 beyond that, Mr. Jen ks?
15 MR. JENKS: I did, your Honor. I am sorry for
16 talking too quickly.
17 I object to the introduction of further testimony
18 regarding Mr. Gordon's personal purchases or sports
19 jackets and slacks and coats and so forth. It is
20 cumulative and for several reasons.
21 THE COURT: You mean it is the same sports
22 jacket?
23 MR. JENKS: It is not the same sports jacket.
24 THE COURT: How can it be cumulative then?
25 MR. JENKS: The American Express records in
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
485
1 evidence which were introduced last week all reflect these
2 purchases on those records. We had someone from American
3 Express here, Mr. Garabedian testify that there were
4 numerous purchases made from the stores. This is highly
5 prejudicial. The jury has heard more than enough of this
6 testimony.
7 Further, I also object, your Honor, and I want to
8 make another objection for the record, and that is, having
9 the government stand up here with forms and documents,
10 which are IRS forms, which are already in evidence, and
11 having people who own stores or boutiques, or whatever
12 they are, testify as to what is on those documents. They
13 had nothing to do with those documents.
14 Further, I also objected, if you are going to
15 have the government read the documents in evidence,
16 Ms. Scott read whatever it was, 433 or 443, and then made
17 a speech concerning the documents. I will object to that
18 whole line of questioning.
19 THE COURT: I will deal with all your objections,
20 one at a time, if I remember them.
21 What is all this evidence for?
22 MR. WHITE: Your Honor, for a couple of
23 purposes. One is to show the nature of the expenses
24 incurred by Mr. Gordon for several reasons. One is for
25 comparison purposes. He tells the information a certain
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
486
1 thing on a certain date, his monthly expenses are $175,
2 and then spends $2,900 on a sports jacket five days
3 later. That is relevant.
4 THE COURT: Relevant to what?
5 MR. WHITE: To show what Mr. Gordon's spent.
6 THE COURT: What count are we talking about?
7 MR. WHITE: I don't know the number off the top
8 of my head. Each form is a separate count.
9 THE COURT: I wanted to know just what you were
10 trying to prove and to what count.
11 Mr. Jenks, as far as it being cumulative, they
12 are not cumulative. The testimony is with regard to
13 different stores with different kinds of purchases and
14 different types of items purchased?
15 MR. JENKS: Exce pt with regard to the same
16 information collection information statement, and so
17 forth.
18 THE COURT: The government has the burden of
19 proving that these are false statements beyond a
20 reasonable doubt. These are all different purchases at
21 different stores. There is nothing cumulative about it.
22 Maybe hearing it repetitively may be difficult to
23 take. If I am representing somebody that may be. It is
24 perfectly proper to prove it.
25 What was the last objection? That the government
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1 attorney, Ms. Scott read the thing.
2 MR. JENKS: Yes, when they read --
3 THE COURT: I read -- asked her to read the
4 thing.
5 The statement she made could have been brought
6 out in testimony, true. But it is only logical and
7 reasonable for the government to tell the jury what they
8 want to do.
9 MR. JENKS: Through a summary expert, and maybe
10 summation. Not with Ms. Scott saying to the jury, you
11 see, I am trying to show you that this document means A,
12 B, C and D. Because they are the fact-finders and not
13 Ms. Scott.
14 THE COURT: The jury has been told that what
15 Ms. Scott said is not evidence. She is merely pointing
16 out the evidence in there. It is an interim type of
17 summation, that's right.
18 You want an opportunity now to give your interim
19 summation?
20 MR. JENKS: I don't want to give an interim
21 summation.
22 THE COURT: I will give you an opportunity.
23 MR. JENKS: I don't need that opportunity.
24 THE COURT: Did you ever hear the case tried by
25 Judge Lavalle, the Westmorland case, where he had a
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1 summation one-third at a time? Did you ever hear that?
2 MR. JENKS: No, Judge.
3 THE COURT: That is flexibility and
4 innovativeness. I am not that way myself. I wish I were.
5 I see nothing wrong with what the government did.
6 MR. JENKS: I note my objection for the record.
7 I realize I am not the attorney for Mr. Gordon.
8 THE COURT: I will let you object vociferously,
9 promiscuously, any other way you wish.
10 MR. JENKS: Thank you.
11 MS. SCOTT: Thank you, Judge.
12
13 (Whereupon, at this time the following takes
14 place in open court.)
15
16 DIRECT EXAMINATION
17 BY MS. SCOTT:
18 Q Good morning --
19 THE COURT: I don't think this witness is sworn.
20 Do you want to rise and raise your right hand.
21
22 B R I A N L U C A S,
23 called as a witness, having been first
24 duly s worn, was examined and testified
25 as follows:
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1
2 THE COURT: Please be seated. State your full
3 name and spell your last name.
4 THE WITNESS: Brian Lucas, L U C A S.
5 THE COURT: You may proceed.
6
7 DIRECT EXAMINATION
8 BY MS. SCOTT:
9 Q Good morning, Mr. Lucas.
10 A Good morning.
11 Q Tell us what you do for a living,?
12 A Yes, the manager of the Glen Cove location of London
13 Jewelers. In addition I am responsible for the entire
14 computer operation, maintaining records and such.
15 Q How long have you been in that position?
16 A For eleven years.
17 Q Now, I am showing you Government's Exhibit 525, which
18 consists of several pages.
19 THE COURT: Is that for identification?
20 MS. SCOTT: That's correc t.
21 (Handed to the witness.)
22 Do you recognize that exhibit?
23 A Yes, printouts from our computer system for purchases
24 made by Bruce Gordon from our store.
25 Q How are those records made?
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1 A This is information processed into our computer
2 system at the time of our purchase.
3 Q Who processes it into the system?
4 A The individual salespeople who help the customer.
5 Q Now, were these records kept in the course of
6 regularly conducted business activity of London jewelers?
7 A Yes, they are.
8 Q Was it the regular business practice of London
9 Jewelers to make and keep these records?
10 A Yes, it is.
11 MR. WHITE: I offer Government's Exhibit 525 in
12 evidence, a four-page document.
13 THE COURT: Any objection?
14 MR. TRABULUS: No.
15 THE COURT: Government's Exhibit 525 in
16 evidence.
17 (Government's Exhibit 525 received in evidence.)
18 Q Now, Mr. Lucas, taking a look at that exhibit, can
19 you tell the jury what it shows Mr. Gordon purchasing from
20 your store?
21 A Yes. It shows that on one particular day, August
22 29th of 1992 Mr. Gordon purchased four pieces of
23 merchandise. One was a Tiffany 18 caret gold ring. One
24 was a diamond ring. One was a pair of earrings. And the
25 other one was a pendant with diamonds with an imitation
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1 Indian coin on a chain.
2 Q And these purchases were all made on one day?
3 A That's correct.
4 Q Can you tell the jury the total amount of the
5 purchases?
6 A The total amount of the merchandise was $1,660, and
7 then the tax on top of that.
8 Q And can you tell from looking at the documents how
9 the items were paid for?
10 A Unfortunately, no. At the time our system didn't
11 record the method of payment.
12 MS. SCOTT: Okay. No further questions.
13 MR. TRABULUS: No questions.
14 THE COURT: You may step down.
15 THE WITNESS: Thank you.
16 (Whereupon, at this time the witness left the
17 witness stand.)
18 THE COURT: Please call your next witness.
19 MR. WHITE: Your Honor, the government calls
20 Richard Grossman.
21 THE COURT: Raise your right hand.
22
23
24
25
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1 R I C H A R D C. G R O S S M A N,
2 called as a witness, having been first
3 duly sworn, was examined and testified
4 as follows:
5
6 THE COUR T: Please be seated. State your full
7 name and your last name.
8 THE WITNESS: Richard Charles Grossman,
9 G R O S S M A N.
10
11 DIRECT EXAMINATION
12 BY MR. WHITE:
13 Q Dr. Grossman, can you tell us how old you are?
14 A 66.
15 Q Where do you live?
16 A I will have in Los Angeles.
17 Q How long have you lived in Los Angeles?
18 A 30 some odd years or more.
19 Q Tell us what you do for a living?
20 A I am an orthodontist.
21 Q Are you married?
22 A Yes, I am.
23 Q Can you tell us what your wife's name is?
24 A My wife's name is Joyce Grossman.
25 Q How long have you been married?
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1 A A little over 33 years.
2 Q Do you have any children?
3 A We have three children.
4 Q Can you tell us the ir ages?
5 A They are 44, 42 and 31.
6 Q Now, do you know a man named Bruce Gordon?
7 A I do.
8 Q Tell us how you know him?
9 A He is my brother-in-law.
10 Q He is your wife's sister -- I am sorry, your wife is
11 his sister?
12 A My wife is his sister, correct.
13 Q How long have you known Mr. Gordon?
14 A Almost as long as I have been married.
15 Q Now, are you testifying here today pursuant to a
16 court order granting you immunity?
17 A Yes, I am.
18 Q Can you tell us what your understanding is of the
19 effect of that order?
20 A The effect of that order is that I must tell the
21 truth or be prosecuted for perjury.
22 Q And what is your understanding of whether or not
23 anything you say in your testimony could be used to
24 prosecute you?
25 A That's the effect of the immunity, as to prevent me
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1 from being prosecuted for my testimony.
2 Q Now, did there come a time that you asked Mr. Gordon
3 regarding investing in a new business?
4 A Yes.
5 Q Can you tell us, why it is you did that?
6 A For a number of years family members and friends of
7 his had told us that they had invested with businesses
8 that he had, and had done well. We had never been
9 involved. So my wife and I at one point mentioned to him
10 that if such an opportunity became available we might want
11 to invest.
12 Q Approximately when was it that you mentioned that to
13 him?
14 A Probably late 1989, early 1990.
15 Q After you had this conversation did you have further
16 conversation with regard to investing in a business of
17 his?
18 A Yes.
19 Q Can you tell us whe n that was?
20 A Sometime early in 1990.
21 Q And did Mr. Gordon tell you anything regarding the
22 business that you proposed to invest in?
23 A Yes. He described it as a Who's Who type of
24 business, wherein promotional items would be provided to
25 people, desk accessories, luggage, and so forth. And a
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1 directory would be printed each year. It was to be
2 circulated amongst business people.
3 Q Did you have any specific instructions -- discussions
4 with him with regard to being invested in this particular
5 company?
6 A Yes.
7 Q Can you tell us when that was?
8 A It was probably in April of 1990.
9 Q And what was discussed in this conversation?
10 A It was discussed we would invest $125,000 -- I say
11 "we" meaning between my wife and myself, our family trust
12 and retirement plan, we would invest $125,000 in this
13 business, and we would have it returned to us as an
14 investment with 15 percent interest. And as an inducement
15 for making, we would get a percentage of ownership of the
16 business.
17 Q Let me show you Government's Exhibit 577?
18 THE COURT: For Identification?
19 MR. WHITE: For Identification, your Honor.
20 (Handed to the witness.)
21 Q Now, Dr. Grossman, if you can take a look at that,
22 please, and tell me if you recognize that exhibit?
23 A I do.
24 Q What is it?
25 A It is a letter from Who's Who Worldwide, over the
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1 signature of Bruce Gordon explaining his understanding of
2 our phone conversation, and the nature of the investment
3 for the $1 25,000, to be structured as a loan to the
4 company, and there would be a 50 percent equity in the
5 business.
6 MR. WHITE: The government would offer 577?
7 MR. TRABULUS: No objection.
8 MR. SCHOER: Who is it offered against?
9 MR. JENKS: It is not offered against the
10 corporation?
11 MR. WHITE: Against the defendants Gordon and
12 Reffsin.
13 MR. JENKS: No objection.
14 THE COURT: Mr. Wallenstein?
15 MR. WALLENSTEIN: No objection, your Honor.
16 THE COURT: Government's Exhibit 577 in
17 evidence.
18 (Government's Exhibit 577 received in evidence.)
19 Q If you can look at the top page, tell us the date?
20 A May 17th, 1990.
21 Q To whom is that letter addressed?
22 A To my wife and myself.
23 Q Who is the sender of the letter?
24 A Bruce Gordon.
25 Q Can you tell us just in substance what your -- what
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1 the letter says regarding your proposed investment?
2 A As I said a moment ago, it says that he suggests that
3 he speak to our accountant so that we could decide whether
4 or not we want the $125,000 investment to be a loan to the
5 company. And he talks about a 50 percent equity as an
6 inducement; as opposed to a straight investment and any
7 income paid to us would therefore be fully taxable.
8 Q Now, is there an attachment to that top letter?
9 A Yes, there is.
10 Q What is the attachment?
11 A It is a further breakdown. This is a letter, dated
12 the same day, May 17th, 1990. And it gives 18 terms for
13 this investment.
14 It says, first of all, that we would be 50
15 percent shareholders. The initial cash investment was to
16 be $75,000, with an addi tional $50,000 to be called
17 whenever it is required. It repeats again we would be 50
18 percent owners of the company.
19 Q Dr. Grossman, if you can skip down to points six and
20 seven, and if you can take a look at those and just
21 summarize what those stated.
22 A As our investment was repaid to us in increments, our
23 ownership in the company would be reduced commensurately.
24 So ultimately we would own 25 percent of the business.
25 Q You would start off owning 50, and when the loan was
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1 fully paid off you would only own 25; is that correct?
2 A That's my understanding, yes.
3 Q If you can read outloud point 13 of that letter.
4 A The equity owned by Bruce Gordon in the company is 50
5 percent and will be increased to 75 percent when your
6 invest ment of 125,000 plus 15 percent annual interest is
7 repaid to you.
8 Q Now, were the terms set forth in these two May 17th
9 letters the final terms of your agreement?
10 A No.
11 Q Did you have any further discussion with Mr. Gordon
12 regarding your investment in Who's Who Worldwide?
13 A Yes. I suggested in a phone conversation to him
14 subsequently that it didn't seem to start off at 50
15 percent and reduce down to 25 percent, so why not make it
16 25 percent right off the board.
17 Q Let me show you Government's Exhibit 578 for
18 Identification.
19 (Handed to the witness.)
20 Q Do you recognize that?
21 A Yes, I do.
22 Q What is that?
23 A A letter written a week later from Who's Who
24 Worldwide over the signature of Bruce Gordon, restating
25 the arrangements as now understood, as stated in paragraph
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1 1, that we would own 25 percent of the common stock in
2 Who's Who.
3 Q Dr. Grossman, if you can take a look at 578-A, is it
4 simply an enlargement of 578 that you have before you now?
5 A It looks to be the same, only enlarged.
6 MR. WHITE: The government offers 578 and 578-A.
7 THE COURT: Any objection?
8 MR. TRABULUS: No.
9 MR. JENKS: Assuming it is not offered against
10 the corporation, that's correct.
11 MR. WALLENSTEIN: No objection.
12 THE COURT: Government's Exhibit 578 and 578-A in
13 evidence.
14 (Government's Exhibit 578 received in evidence.)
15 (Government's Exhibit 578-A received in
16 evidence.)
17 MR. WHITE: Your Honor, should I put it on the
18 easel here or leave it here?
19 THE COURT: I think you ought to move it in front
20 so the jury can see it.
21 As I explained, nobody does it for us. We do it
22 ourselves. And we manage to do it all right by ourselves.
23 MR. WHITE: Not so well right now.
24 THE COURT: As soon as I said that he is hitting
25 the jury box with it.
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1 Q Dr. Grossman, following along the copy before you,
2 could you read the paragraph numbered one.
3 A You will own 25 percent of the common stock in Who's
4 Who Worldwide Registry, Inc.
5 Q Now, the investment that you and your wife were to
6 make, were you going to invest personally in your own
7 names?
8 A No.
9 Q And how was it that you were going to invest?
10 A My wife and I are both trustees of a small family
11 trust and a retirement plan. It is my professional
12 retirement plan. And there was going to be a percentage,
13 the money from each.
14 Q Were those entities to be the ones actually
15 investing?
16 A Yes.
17 Q And were the agreements you had regarding your
18 investment ever memorialized in a written agreement?
19 A Yes, they were.
20 Q Let me show you Government's Exhibit 579 and 580,
21 Mr. Grossman.
22 You can take it out of the plastic and look at
23 them.
24 THE COURT: For Identification?
25 MR. WHITE: Yes.
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1 (Handed to the witness.)
2 THE COURT: Please say so, so we know what is in
3 evidence and what is not.
4 MR. WHITE: I will, your Honor. I am sorry.
5 Q Do you recognize 579 and 580?
6 A Yes, I do.
7 Q And what are they?
8 A One is a stock purchase agreement, and one is a loan
9 agreement.
10 Q And are those the agreements that you referred to as
11 memorializing your investment in Who's Who Worldwide?
12 A Yes, they are.
13 MR. WHITE: Your Honor, the government offers
14 Exhibits 579 and 580.
15 THE COURT: Any objection?
16 MR. TRABULUS: No.
17 MR. JENKS: Against the individual defendants,
18 Mr. White?
19 MR. WHITE: Yes.
20 MR. JENKS: Your Honor, if you could just have
21 Mr. White on this set of documents indicate who the
22 documents are offered against?
23 MR. WHITE: Perhaps I can save time. None of
24 them are offered against anyone other than Mr. Gordon and
25 Mr. Reffsin.
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1 MR. JENKS: All right.
2 THE COURT: Government's Exhibits 579 and 580 in
3 evidence.
4 ( Government's Exhibit 579 received in evidence.)
5 (Government's Exhibit 580 received in evidence.)
6 Q Dr. Grossman, if you can take a look at Exhibit
7 580 --
8 A Yes.
9 Q Now, what is the date of that agreement on the first
10 line of the agreement.
11 A The 1st day of August, 1990.
12 Q And if you can look at the last page, who is it
13 signed by on behalf of Who's Who Worldwide?
14 A Bruce Gordon.
15 Q And what entity is this an agreement with?
16 A The Grossman family trust.
17 Q Who signs on behalf of the Grossman family trust?
18 A I did.
19 Q If you can look at the first page of that agreement,
20 could you read aloud paragraph numbered one.
21 A Agreement made as of the 1st day of August 1990 by
22 and --
23 Q I am sorry, at the bottom of the page, the one that
24 is numbered one.
25 A I am sorry.
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1 THE COURT: Mr. Grossman, when you read, slow
2 down. People have a tendency to read at a faster rate
3 than they speak. That is except me, everybody else reads
4 at a faster rate. So slow down.
5 THE WITNESS: Receipt of funds is the heading.
6 Who's Who Worldwide Registry acknowledges receipt
7 from the trust of the sum of $100,300.
8 Q Now, if you look at the top of the next page, does it
9 say anything regarding the issuance of stock certificates?
10 A Yes. Paragraph two refers to issuance of
11 certificates.
12 Promptly after the execution of this agreement
13 Who's Who Worldwide Registry shall take such action as may
14 be necessary to cause to be issued to the trust
15 certificates of stock representing 20 percent of the
16 issued and outstanding shares of all classes of the stock
17 of Who's Who Worldwide Registry.
18 Q Okay.
19 Now, if you can look at 579, the other
20 agreement.
21 Again, tell us when that is dated?
22 A Also dated the 1st day of August, 1990.
23 Q If you look at the last page, who are the
24 signatories?
25 A The same signatories, Bruce Gordon and myself.
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1 Q In connection with this agreement, you are signing on
2 behalf of what entity?
3 A The Richard C. Grossman DMD, Inc., defined benefit
4 pension plan.
5 Q Again, if you look at page 1, the paragraph at the
6 bottom that is numbered 1, how much money is your pension
7 plan investing in Who's Who Worldwide?
8 A I don't see a dollar amount here, but it talks about
9 purchasing five percent of the total amount issued .
10 THE COURT: It would be on page 2, number 2.
11 A The amount paid was $24,700.
12 Q These two agreements combined granted your pension
13 plan and your family trust, what total percentage of
14 ownership in the company?
15 A 25 percent.
16 Q And what was the breakdown as between the two
17 entities?
18 A Twenty percent was owned by the family trust, and 5
19 percent was owned by the pension plan as of that day.
20 Q Now, from August 1990 right up until today, has the
21 total percentage ownership that you held, your family
22 entities held in Who's Who Worldwide ever changed?
23 A No.
24 Q Did the breakdown between the two entities change?
25 A Yes.
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1 Q When was that?
2 A About a month or so after the original -- after these
3 two agreements that you have in front of me, August 1st of
4 1990, later in September, I believe it was, of 1990, the
5 family trust assigned a portion of its interest in the
6 company to the pension plan. So the pension plan then
7 owned ten percent of the company and the family trust
8 owned 15 percent.
9 Q But the total was still 25?
10 A That's correct.
11 Q Let me show you Exhibit 581 for Identification.
12 (Handed to the witness.)
13 Q Do you recognize this?
14 A Yes, I do.
15 Q Can you tell us what that is?
16 A This is the assignment agreement dated September 4th,
17 1990.
18 Q And that's an agreement between who?
19 A Between the Grossman family trust and the defined
20 benefit pension plan.
21 Q Is that the agreement that affects the transfer you
22 just described?
23 A Yes, it is.
24 MR. WHITE: Your Honor , the government offers
25 Exhibit 581.
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1 MR. TRABULUS: No objection.
2 MR. JENKS: No objection.
3 THE COURT: Government's Exhibit 581 in
4 evidence.
5 (Government's Exhibit 581 received in evidence.)
6 Q Now, after the execution of this assignment
7 agreement, was there ever any other change in the entity's
8 ownership percentage?
9 A No.
10 Q Did you or Mrs. Grossman ever own any stock in Who's
11 Who Worldwide personally?
12 A No.
13 Q Who owned the remaining 75 percent of the
14 corporation?
15 A My assumption was that it was Bruce Gordon.
16 MR. WHITE: Your Honor, may I have a moment to
17 consult with Mr. Trabulus?
18 THE COURT: Yes.
19 (Whereupon, at this time there was a pause in the
20 proceedings .)
21 MR. WHITE: Your Honor, at this point the
22 government would offer Exhibits 815, 802 and 804, which
23 the parties have stipulated -- let me make sure I word the
24 stipulation correctly.
25 (Mr. White confers with Mr. Trabulus.)
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1 MR. TRABULUS: Your Honor, the parties stipulate
2 that these are excerpts from testimony.
3 THE COURT: Excerpts from testimony?
4 MR. TRABULUS: Correct, testimony given by
5 Mr. Gordon, and there may be some -- I am not sure of the
6 particular exhibit he is referring to, but there may be
7 statements made by other individuals as well.
8 THE COURT: No objection?
9 MR. TRABULUS: I am not going to object.
10 MR. JENKS: 804, 802 -- just a second.
11 (Whereupon, at this time there was a pause in the
12 proceedin gs.)
13 MR. WHITE: Your Honor, they --
14 THE COURT: No. One of the lawyers are still
15 looking at it.
16 MR. JENKS: Judge, I am really trying to find the
17 exhibits through these books.
18 THE COURT: Go ahead, Mr. Jenks.
19 MR. JENKS: Your Honor, I have no objection.
20 They are being offered against Mr. Gordon, Mr. White, I
21 take it?
22 MR. WHITE: Yes.
23 THE COURT: Government's Exhibits 802, 804 and
24 815 in evidence.
25 (Government's Exhibit 802 received in evidence.)
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1 (Government's Exhibit 804 received in evidence.)
2 (Government's Exhibit 815 received in evidence.)
3 MR. WHITE: Your Honor, may I read from the
4 testimony just admitted?
5 This is from Exhibit 802, testimony from
6 Mr. Gordon in connection with Re ed Publishing U.S.A., Inc.
7 and Reed Publishing against Who's Who Worldwide Registry,
8 September 25th, 1992. It is a deposition of Bruce W.
9 Gordon.
10 THE COURT: Do you have a copy of that?
11 MR. WHITE: I believe I have an extra copy.
12 (Copy of transcripts handed to the court
13 reporter.)
14 MR. WHITE: I will begin reading on page 4, line
15 2.
16 Bruce W. Gordon having first been duly sworn by a
17 Notary Public of the State of New York was examined and
18 testified as follows.
19 Examination by Mr. Bailey.
20 THE COURT: Who is that?
21 MR. WHITE: Mr. Bailey, B A I L E Y.
22 THE COURT: Spell the names that you know are
23 strange to us.
24 MR. WHITE: Okay.
25 Question: Could you state your name for the
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1 r ecord, please.
2 Answer: Bruce Gordon. G O R D O N.
3 Question: What's your middle name, Mr. Gordon?
4 Answer: William, W I L L I A M.
5 Now reading from page 48, line 7.
6 Question: Are you the sole owner of Who's Who
7 Worldwide registry, Inc.?
8 Answer: No, I am not.
9 Question: Who else is?
10 Answer: Dr. Richard Grossman.
11 Question: How much does he own?
12 There is no answer.
13 Reading from page 51 --
14 MR. TRABULUS: Your Honor, I think the record
15 should show that the reason there is no answer, is the
16 following linings after the words, how much does he own?
17 Was excerpted by the government and they chose not to
18 introduce them. So it should not indicate that Mr. Gordon
19 failed to answer the question.
20 THE COURT: Very well.
21 MR. WHITE: There was an objection in the
22 transcript and there was extran eous material.
23 THE COURT: I am instructing the jury that
24 Mr. Gordon did not fail to answer the question. It was
25 just a mechanical procedure during the trial.
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1 Go ahead.
2 MR. WHITE: Page 51.
3 Question: What is the extent of Dr. Richard
4 Grossman's ownership interest in Who's Who Worldwide
5 Registry, Inc.?
6 Answer: 25 percent.
7 Question: 25 percent?
8 Answer: Yes.
9 Question: Do you own the other 75 percent?
10 Answer: That is correct.
11 Question: Is this a subchapter S corporation?
12 Answer: No, it is not.
13 Question: Is it a regular corporation?
14 Answer: Regular corporation.
15 Question: Have there ever been any other owners
16 of the company besides you and Dr. Grossman?
17 Answer: No.
18 MR. WHITE: Now, your Honor, I am reading from
19 Government's Exhibit 804. And it is in connection with
20 Reed Elsevier, Inc., versus Who's Who Worldwide Registry,
21 Inc. it is a transcript of a non-jury trial before the
22 Honorable David F. Jordan, United States Magistrate Judge,
23 February 17th, 1994.
24 I am reading from page 2, line 19.
25 Question: Mr. Gordon, are you still president of
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1 Who's Who Worldwide Registry, Inc.?
2 Answer: Yes.
3 Question: Is that still the corporate name?
4 Answer: Yes.
5 Question: Are you still an owner?
6 Answer: Yes.
7 Question: What percentage do you own?
8 Answer: 75 percent.
9 Question: I have read a recent Dunn & Bradstreet
10 that indicated that, I think it's your brother-in-law,
11 Richard Grossman, owns a hundred percent; is that wrong?
12 Answer: Wrong.
13 Question: Do you know how they got that
14 information?
15 Answer: Umm, probably from me. They probably
16 misunderstand. I said I may sell my shares to them. This
17 was a few months ago when something happened in my
18 personal life that I had a severe loss. And when you lose
19 your oldest son, I think that you change your values in
20 your life. And I think I was a little depressed and
21 demoralized and came very close to doing that, but I never
22 did it. And I think I told D & B that I was considering
23 doing that.
24 Lastly, reading from Exhibit 815, it is in
25 connection with Blanche Brodie against Who's Who
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1 Worldwide, Inc. and Bruce Gordon. It is an examination
2 before trial of Mr. Gordon on October 22nd, 1992.
3 I will begin reading page 5, line 9.
4 Question: Mr. Gordon, can you tell me how long
5 you have been with Who's Who Worldwide, Inc.?
6 Answer: About three years.
7 Question: Is that the official title, Who's Who
8 Worldwide, Inc.?
9 Answer: No.
10 Question: What is the title?
11 Answer: Who's Who Worldwide Registry, Inc.
12 Question: Are you a shareholder in Who's Who
13 Worldwide?
14 Answer: Yes.
15 Question: I am going to use Who's Who as a
16 shorthand; is that all right with you?
17 Answer: Fine.
18 Question: How many shares of Who's Who do you
19 own?
20 Answer: I don't know.
21 Question: Are there any other shareholders?
22 Answer: Yes.
23 Question: Can you tell me who they are?
24 Answer: Dr. Richard Grossman.
25 Question: Are there any other shareholders?
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1 Answer: No.
2 MR. NELSON: Before we proceed further, your
3 Honor, I have one question for clarification purposes.
4 Have the entire transcripts of the last three
5 exhibits been admitted in evidence or only those portions
6 read into the record? I am not clear on that?
7 MR. WHITE: Neither. It is neither the whole
8 transcript, nor just the portion I read. They are the
9 exhibits that are marked -- the parts exhibited --
10 admitted were the exhibits that were marked and were
11 provided to defense counsel.
12 MR. NELSON: The entire marked exhibit is
13 admitted in evidence; is that correct?
14 MR. WHITE: Yes.
15 MR. NELSON: Thank you.
16 Q Dr. Grossman, in August of 1990 when you signed those
17 agreements regarding your i nvestment in Who's Who
18 Worldwide, what was your understanding of what role you
19 and your wife were to have in the day to day management or
20 financial affairs of the company?
21 A We were silent investors.
22 Q And subsequently what role did you actually have in
23 the management and financial affairs of the company?
24 A None.
25 Q Were you ever consulted in advance regarding business
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1 decisions affecting the company?
2 A No.
3 MR. WHITE: Your Honor, I have another portion of
4 testimony to offer, Exhibit 799.
5 THE COURT: Any objection?
6 MR. TRABULUS: No, your Honor, the same
7 stipulation applies, 799 is an excerpt of testimony given
8 by Mr. Gordon.
9 THE COURT: Very well, Government's Exhibit 799
10 in evidence.
11 MR. WHITE: Your Honor, I will read from 799. It
12 is in connection with in re: Who's Who Worldwide Registry,
13 Inc., debtor in the U.S. bankruptcy court. It is a
14 deposition of Bruce Gordon, April 15th, 1993:
15 I will begin reading from page 21, line 25.
16 Question: Does Mr. Grossman reside in Los
17 Angeles?
18 Answer: Yes.
19 Question: Is she on salary from the company,
20 from the debtor?
21 Answer: No.
22 Question: Other than as owner of the stock does
23 she have any function within the company?
24 Answer: Her and her husband did.
25 Question: Let's just stay with her? What is her
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1 function?
2 Answer: Sounding board. She has been in her own
3 business for many years and has a great deal of business
4 experience. She complements me in such a way that our own
5 people cannot do it.
6 Question: Does she get paid any stipend in
7 return for her fees to act as director of the company.
8 There is an objection, the question is restated.
9 Question: Stipend in return for her serving as a
10 director of the company?
11 Answer: No.
12 Question: Has she recently attended any
13 directors' meetings in person? Question?
14 Answer: When you say recently, how recently.
15 Question: In the last 12 months.
16 Answer: Informal directors meetings I have been
17 out to L A several times. I consult with her on the
18 phone, talk to her and her husband on a weekly, sometimes
19 daily basis.
20 Q Now, Dr. Grossman, did you ever speak to Mr. Grossman
21 at a meeting on a daily basis?
22 A No.
23 MR. TRABULUS: Objection to form, your Honor.
24 THE COURT: Overruled.
25 Q Did you ever speak to Mr. Gordon regarding the
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1 business on a weekly basis?
2 A No, not usually weekly, no.
3 Q Now, the August 1990 agreements you identified for us
4 before indicated that stock certificates would be issued
5 to you; is that correct?
6 A Yes.
7 Q After August of 1990 did you have any conversations
8 with Mr. Gordon regarding these stock certificates?
9 A A number of times.
10 Q Can you tell us the substance of these conversations?
11 A The certificates were not forthcoming. And so I was
12 a little antsy about it and I requested them.
13 Q What was Mr. Gordon's response?
14 A We will get them to you as soon as we can.
15 Q Let me show you Exhibits 585, 586, and 589 through
16 92, all for Identification.
17 (Han ded to the witness.)
18 Q If you can will be at each one of those and tell me
19 whether you recognize them.
20 (Whereupon, at this time there was a pause in the
21 proceedings.)
22 A Yes.
23 Q What are they?
24 A They are all stock certificates or copies of stock
25 certifications. Two are for Who's Who Worldwide Registry,
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1 Inc. another two are for Sterling Who's Who, Inc. and
2 another two, which are in black and white, so they may be
3 copies, for Publishing Ventures, Inc.
4 MR. WHITE: The government would offer 585, 586,
5 and 589 through 592.
6 THE COURT: Any objection?
7 MR. TRABULUS: No.
8 THE COURT: Government's Exhibits 585, 586, 589
9 through 592 in evidence.
10 (Government's Exhibit 585 received in evidence.)
11 (Government's Exhibit 586 received in evidence.)
12 (Government's Exhibit 589 through 592 received in
13 evidence.)
14 Q You mentioned Sterling Who's Who and Publishing
15 Ventures, Inc. can you tell us what those are?
16 A They were a couple of subsidiary corporations to
17 Who's Who.
18 Q All right.
19 Now, if you can look specifically at Exhibits 585
20 and 586, those are the certificates for Who's Who
21 Worldwide; is that right?
22 A Yes, they are.
23 Q If you look at the bottom left-hand corner, do you
24 recognize the signature there?
25 A Yes, I do.
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1 Q And whose signature is it?
2 A It looks like my signature.
3 Q And what does it say under your name?
4 A Secretary.
5 Q Dr. Grossman, if you can take a look at
6 Government's Exhibit 585, and tell me if that's -- if
7 those are simply enlargements of 585 and 586?
8 A They appear to be such, yes.
9 MR. WHITE: The government will offer 585-A.
10 THE COURT: Any objection?
11 MR. TRABULUS: No.
12 THE COURT: 585-A, Government's Exhibit in
13 evidence.
14 (Government's Exhibit 585-A received in
15 evidence.)
16 MR. WHITE: Just lean it against that.
17 THE COURT: Watch so it doesn't fall against
18 anybody.
19 MR. WHITE: Can everybody see it or do I need to
20 raise it up?
21 (Whereupon, the exhibit/exhibits were published
22 to the jury.)
23 Q Now, Dr. Grossman, you can follow on your copy.
24 The signature in the lower left-hand corner of
25 each certificate is the one you identified as your own?
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1 A Yes.
2 Q Now, looking at 585 and 586, do you recognize who
3 signed on behalf -- who signed as president of the
4 corporation?
5 A As best as I can make out the signature, it looks
6 like Bruce Gordon. It is difficult to read that
7 signature.
8 Q Now, in addition to 585 and 586, the other four stock
9 certificates that you got, that you identified, can you
10 tell us the circumstances under which you signed them?
11 A Yes.
12 I received them with a little post-it stick'em
13 note attached requesting that I put my signature on where
14 it said secretary. The certificates were blank, and
15 whoever it was that sent them to me asked that I return
16 them and they would be completed and executed further at
17 the office.
18 Q And you say whoever sent it to you. Do you know who
19 you received them from?
20 A It was one of the secretarial people in the office at
21 the time. I am not sure which one.
22 Q In what office?
23 A In the Who's Who Worldwide office.
24 Q And can you tell us when in relation to August of
25 1990 you received these stock certificates to sign?
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1 A Several years later.
2 Q Now, aside from the preprinted information on these
3 forms, was there ever any of the handwriting that appears
4 on them now on there when you got them to sign?
5 A You mean where it says that this certifies that so
6 and so owns something or another?
7 Q Yes.
8 A That was blank.
9 Q Okay.
10 Now, if you can take a look at 585.
11 That indicates that Joyce Grossman is the owner
12 of 75 shares, does it not?
13 A Yes.
14 Q Did your wife ever o wn 75 shares of the company?
15 A No.
16 Q And does that certificate indicate when -- does that
17 contain a date, that certificate?
18 A Yes, it does.
19 Q What is the date?
20 A January 23rd, 1990.
21 Q Now, is that when you signed it?
22 A No.
23 Q And when was it that your family entities actually
24 invested in Who's Who Worldwide?
25 A The initial investments were sometime in May of 1990,
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1 and it continued -- it was finished, the 125 dollar -- the
2 125,000 dollars was completely invested I think by
3 September of that year.
4 Q Now, if you look at the other stock certificate,
5 Exhibit 586, that indicates that your pension plan owns 25
6 shares of company; is that correct?
7 A That's what it indicates.
8 Q Now, did your pension plan ever own 25 shares in the
9 company?
10 A No.
11 Q And what was the date that 586 -- I am sorry.
12 586 bears what date?
13 A January 23rd, 1990.
14 Q And did you sign that certificate on that date?
15 A No. It was several years later.
16 Q Doctor, if you look at 585 and 586, and look at the
17 handwritten portions.
18 Were any of the handwritten portions there when
19 you signed them?
20 A No. As I said earlier, they were blank.
21 Q Okay.
22 Let me show you Exhibit 584.
23 (Handed to the witness.)
24 THE COURT: Is that for identification?
25 MR. WHITE: Yes. I am sorry, your Honor, 584 for
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1 Identification.
2 Q Now, if you look at the bottom, is that your
3 signature?
4 A It is my signat ure.
5 Q And --
6 MR. WHITE: Your Honor, the government offers
7 584.
8 THE COURT: Any objection?
9 MR. TRABULUS: No.
10 THE COURT: Government's Exhibit 584 in
11 evidence.
12 (Government's Exhibit 584 received in evidence.)
13 THE COURT: What is 584, Dr. Grossman?
14 THE WITNESS: It is a waiver of notice of a
15 special meeting of the board of directors of Who's Who
16 Worldwide Registry, Inc.
17 THE COURT: What is the date on it?
18 THE WITNESS: It is dated January 3rd, 1990.
19 Q Now, Dr. Grossman, who signed on the line above yours
20 on that document?
21 A It looks like Bruce Gordon.
22 Q Now, if you can simply read aloud the body of the
23 document.
24 A The undersigned, being all of the directors of Who's
25 Who Worldwide Registry, Inc., the corporation, a New York
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1 corporation, hereby waives notice of a special meeting of
2 the board of directors of the corporation, and consent
3 that said meeting be held in person or by telephone
4 conference on January 9th, 1990 at 2:00 p.m. at the
5 corporation's offices at 99 Seaview Boulevard, Port
6 Washington, New York, for the following purposes.
7 THE COURT: You are not going to get into that,
8 are you?
9 MR. WHITE: No, your Honor.
10 Q Would you just read --
11 MR. WHITE: Your Honor, the purposes?
12 THE COURT: Yes.
13 MR. WHITE: Yes.
14 Q If you can read just the second purpose referenced
15 there.
16 A To authorize the issuance of shares of stock in the
17 corporation to Joyce Grossman, and to the Richard C.
18 Grossman DMD, Inc. defined benefit pension plan.
19 Q Now, when is that docum ent dated?
20 A January 3rd, 1990.
21 Q Now, were shares of Who's Who Worldwide ever issued
22 to Joyce Grossman personally?
23 A No.
24 Q Now, can you tell us the circumstances under which
25 you signed this document?
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1 A This came after I had, we had all of our investment
2 paid back. And we really weren't all that concerned with
3 the details of what was happening with Who's Who
4 Worldwide. We received a lot of correspondence, on a
5 number of occasions things to be sent back, signed by me,
6 bank accounts to be opened, and so forth and so on. They
7 had me on it as a signatory on occasion. And I didn't
8 really pay too much interest. Often times I would receive
9 it. I knew Mr. Gordon wasn't going to do anything to harm
10 us. So if he sent us s omething, or his office sent us
11 something to be signed, I signed it or often times signed
12 it, didn't pay too much attention to it, and sent it back
13 again.
14 Q The 125,000 that you owned -- excuse me, the two
15 family entities loaned to Who's Who Worldwide, when was
16 that repaid approximately?
17 A It was repaid about a year and a half after the
18 investment was made. It was actually being repaid during
19 that time. But it was completely repaid about a year and
20 a half after.
21 Q And you placed your signature of this document where
22 in relation to when the loan was fully repaid?
23 A Well after.
24 Q So, did you sign this document on January 3rd, 1990?
25 A No, I did not. I didn't even notice the date, to
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1 tell you the truth.
2 THE COURT: Is this a good time to take a break?
3 MR. WHITE: Yes, it is, your Honor.
4 THE COURT: Members of the jury, we will take a
5 ten-minute recess.
6 Please do not discuss the case. Keep an open
7 mind. Please recess yourselves.
8 (Whereupon, at this time the jury leaves the
9 courtroom.)
10
11 (Whereupon, a recess is taken.)
12
13 THE CLERK: Jury entering.
14 (Whereupon, the jury at this time entered the
15 courtroom.)
16 THE COURT: Please be seated, members of the
17 jury.
18 You may proceed.
19 MR. WHITE: Thank you.
20 MR. WHITE: At this point the government will
21 offer Exhibit 583, by a stipulation of the defense that
22 this is a business record of Who's Who Worldwide.
23 THE COURT: What is it?
24 MR. WHITE: Minutes of a special meeting of the
25 board of directors of Who's Who Worldwi de Registry.
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1 THE COURT: Dated?
2 MR. WHITE: It is undated, your Honor.
3 THE COURT: All right.
4 Any objection?
5 MR. TRABULUS: No objection.
6 THE COURT: Government's Exhibit 583 in
7 evidence.
8 (Government's Exhibit 583 received in evidence.)
9 Q Dr. Grossman, if you can take a look at Exhibit 583.
10 (Handed to the witness.)
11 If you can review it, it says it is minutes of a
12 meeting of the board of directors; is that correct?
13 A That's correct.
14 Q And without reading it aloud, can you tell us when
15 the board of director's meeting took place according to
16 this document?
17 A January 9th, 1990.
18 Q Does it indicate you were present at that meeting?
19 A It indicates I was present by telephone call.
20 Q If you look down at the bottom, does it indicate that
21 any shares of stock were issued at that meeting?
22 A Yes.
23 Q And in substance, what does it indicate?
24 A That 15 shares of the corporation's capital stock be
25 issued to Joyce Grossman, and that five shares of the
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1 capital stock be issued to Richard C. Grossman DMD, Inc.,
2 defined benefit pension plan.
3 Q Now, did you participate by telephone -- let me start
4 again.
5 Did you participate by telephone in a board of
6 director's meeting in Who's Who Worldwide in January of
7 1990?
8 A No, I did not.
9 Q Now, if you can put that down and turn your attention
10 to Exhibits 585 and 586, the Worldwide stock
11 certificates.
12 Can you tell us when was the first time that you
13 saw those certificates with the blanks filled in,
14 indicating that your wife and your pension plan were the
15 owners of shares?
16 A I saw them in the office of Mr. Picard, who was our
17 bankruptcy attorney about a year ago.
18 THE COURT: How do you spell that, Picard?
19 THE WITNESS: P I C A R D.
20 Q You said approximately a year ago, so that was early
21 1997?
22 A Yes.
23 Q And why --
24 A Or late 1996. I don't remember exactly, but about
25 that time.
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1 Q Why was it that you had retained Mr. Picard?
2 A Well, when Who's Who Worldwide Registry went
3 bankrupt, and when Mr. Gordon didn't have assets any
4 longer, the trustee turned his attention against the
5 Grossmans, my wife and myself, because we were the ones
6 who were supposed to have the deep pockets after that.
7 Q What action, if any, did the trustees take against
8 you?
9 A They wanted to collect three and a half million
10 dollars from us. So, we needed to have an attorney in New
11 York State to represent us.
12 Q Was a lawsuit instituted against you?
13 A Yes.
14 Q Was it in connection with that lawsuit that you saw
15 these documents?
16 A That's how I found out about it, yes.
17 Q Now, after you saw these documents, what was your
18 reaction?
19 A Well, I was rather surprised because the way the
20 shares were distributed wasn't accurate at all.
21 Q And in what way was it not accurate?
22 A Well, first of all, we never -- my wife and I as
23 trustees for our respective family entities never owned
24 more than 25 percent of the company.
25 Secondly, that even wasn't represented accura tely
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1 on these papers. It talks about a certain number of
2 shares. It didn't deal with percentages. It talked about
3 200 shares of the company as the full amount of stock
4 certificates. And then there is only 75 and 25, so there
5 is still 100 shares remaining. And at that time I wasn't
6 aware of the fact that maybe there were no other shares
7 issued and so forth.
8 Q Now, after you saw these documents in connection with
9 the bankruptcy proceeding, tell us what you did.
10 A Well, I -- we tried to defend ourselves. And I spoke
11 to Mr. Gordon on a couple of occasions, and advised him
12 that we didn't own 100 percent of the company, as
13 seemingly the certificates were trying to represent. And
14 on a subsequent occasion had to say the same thing again.
15 Q Let's take the first occasion. Do you recall when
16 that was?
17 A Immediately after we had found out about the
18 misrepresentation, or the representation that wasn't as we
19 understood it.
20 Q Did you have a conversation with Mr. Gordon?
21 A I did have a conversation.
22 Q Was this in person or on the telephone?
23 A That may have been in person.
24 Q Tell us what was said?
25 A He said that he had forgotten.
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1 Q He had forgotten what?
2 A That we hadn't owned 100 percent of the company.
3 Q Now, did you ever discuss this subject with
4 Mr. Gordon after that?
5 A Yes, I did, in a phone conversation.
6 Q And approximately when was that?
7 A Just about a year ago now.
8 Q And what, if anything, prompted that telephone c all?
9 A I was informed by Mr. Picard that Mr. Gordon had
10 redated that -- the fact that the Grossmans had owned 100
11 percent of the company. And I then called Mr. Gordon as
12 we were leaving New York City going back to California
13 after the meeting with Mr. Picard, and told him that he
14 has to stop saying that because it is not the case.
15 Q And what response, if any, did Mr. Gordon have?
16 A Again, he gave me the same response.
17 Q Which was?
18 A I had forgotten.
19 Q Now, after that conversation did you do anything?
20 A Yes. We had occasion to write him a letter about the
21 same subject.
22 Q Let me show you Government's Exhibit 599 for
23 Identification.
24 (Handed to the witness.)
25 Do you recognize that, Dr. Grossman?
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1 A Yes, I do.
2 Q What is that?
3 A A letter dated January 16th, 1997, to Mr. Gordon from
4 me, restating what I had just said.
5 MR. WHITE: Your Honor, the government offers
6 599.
7 THE COURT: Any objection?
8 MR. TRABULUS: Objection.
9 THE COURT: Can I see it, please?
10 (Handed to the Court.)
11 THE COURT: Sustained.
12 Q Now, Dr. Grossman, did you receive any compensation
13 from Who's Who Worldwide in 1992?
14 A Yes, I did.
15 Q Can you explain for us how that came about?
16 A I received a telephone call from Mr. Gordon, in which
17 he said I would be receiving some money from the company.
18 And then probably a week or two later a couple of rather
19 large checks came with a W-2 form.
20 Q Okay.
21 Can you tell us what the gross amount of the two
22 checks was?
23 A Before taxes had been taken out h ere in New York it
24 was for $400,000.
25 Q Let me show you Government's Exhibits 594 and 595 for
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1 Identification.
2 (Handed to the witness.)
3 Q Have you had a chance to look at those exhibits?
4 A Yes.
5 Q What are they?
6 A Two checks. One was made out to me. One was made
7 out to my wife. Dated December 18th, 1992.
8 Q Are those the checks you just referred to previously?
9 A Yes.
10 MR. WHITE: Your Honor, the government offers
11 Exhibits 594 and 595.
12 THE COURT: Any objection?
13 MR. TRABULUS: No.
14 THE COURT: Government's Exhibits 594 and 595 in
15 evidence.
16 (Government's Exhibit 594 received in evidence.)
17 (Government's Exhibit 595 received in evidence.)
18 Q Can you tell us the amounts of the che cks?
19 A $156,543.10, each check.
20 Q Now, you said you received a W-2 with these checks?
21 A Yes.
22 Q And in whose name was the W-2?
23 A My name.
24 Q Now, after you received the check and the W-2, what
25 did you do?
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1 A I deposited both checks, and I sent the remark of the
2 check addressed to my wife back to Who's Who with a note
3 indicating that since the W-2 had been made out to me,
4 then that amount in the check to her should be sent to
5 me. And I received then a check back again for that
6 amount to me.
7 Q So, the actual checks would match the W-2?
8 A That's correct.
9 Q Now, take a look at 596 for Identification.
10 (Handed to the witness.)
11 Q Do you recognize that?
12 A Yes, I do.
13 Q And wha t is that?
14 A This is a check made out to me dated December 24th,
15 1992, and the amount of $156,543.10.
16 MR. WHITE: The government offers 596.
17 THE COURT: Any objection?
18 MR. TRABULUS: No.
19 THE COURT: Government's Exhibit 596 in
20 evidence.
21 (Government's Exhibit 596 received in evidence.)
22 Q Dr. Grossman, is 596 simply the replacement check for
23 the one you sent back?
24 A That's correct.
25 Q And after you received all these checks, what did you
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1 do?
2 A I spoke to my accountant and told him what had
3 happened with this large amount of money that had been
4 received.
5 He said before the end of the year we have to
6 make some tax payments. And so, he proceeded to calculate
7 out how much was appropria te to pay to California for
8 state income tax, and the additional amount of federal
9 income tax that would have to be paid. And we did so.
10 Q Now, after paying all the taxes, what was the net
11 amount that you had?
12 A Approximately about $240,000, I believe, something in
13 that vicinity.
14 Q Now, what was your understanding of why this money
15 was sent to you?
16 A My understanding is that it was sent to me for all of
17 the times that I had to be burdened with signing checks --
18 signing bank cards and things of this nature.
19 Q Okay.
20 Now, did you later have a conversation with
21 Mr. Gordon regarding this money?
22 A Yes, very early in the next year, in 1993.
23 He called and indicated since the holiday time
24 had been a rather decreasing amount of my own coming in,
25 and they needed some money in order to produce their
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1 annual registry, and would I send the money back to him.
2 Q And did you agree to do that?
3 A I did, minus whatever had been paid in taxes.
4 Q Now, if you can take a look at Exhibits 597 and 598
5 for Identification.
6 (Handed to the witness.)
7 Q Do you recognize those?
8 A Yes, I do.
9 Q What are they?
10 A Well, 597 is a photocopy of the front and back of my
11 check to Who's Who Worldwide Registry dated January 5th,
12 1993, in the amount of $200,000.
13 And 598 is a letter with a breakdown, and this is
14 dated January 25th, indicating how the money was
15 distributed from the total that I had been paid, less the
16 California taxes of $39,500, and less the 200,000 that had
17 been returned previously, showing that there was a balance
18 due to Who's Who Worldwide and minus the taxes that I paid
19 to the federal government, so I was now enclosing a check
20 of $35,911.20.
21 MR. WHITE: Your Honor, the government offers 597
22 and 598.
23 THE COURT: Any objection?
24 MR. TRABULUS: No objection to 597. Objection to
25 598.
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1 THE COURT: Can I see 598?
2 (Handed to the Court.)
3 MR. WHITE: They are two-pages, your Honor.
4 THE COURT: You are objecting to both parts of
5 598, Mr. Trabulus?
6 MR. TRABULUS: Your Honor, I am not sure what you
7 are referring to when you say both parts.
8 THE COURT: One is a check, and the other is a
9 letter.
10 MR. TRABULUS: I am sorry. I didn't realize a
11 check was attached to it. I am not objecting to the check
12 at all.
13 THE COURT: All right.
14 Sustained as to the letter. The check will go in
15 as 598-A, I suppose.
16 MR. WHITE: I don't believe we have a 598-A, so
17 that's fine.
18 THE COURT: And 597 is also in evidence.
19 (Government's Exhibit 597 received in evidence.)
20 (Government's Exhibit 598-A received in
21 evidence.)
22 Q Dr. Grossman, if you can look at 597, and that's the
23 $200,000 check you wrote.
24 A Yes.
25 Q In the memo part of the check did you make any
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1 notations?
2 A Yes. I printed the word "loan" on it.
3 Q Now, was it your understanding that this loan was to
4 Who's Who Worldwide or to Mr. Gordon personally?
5 MR. TRABULUS: Objection to form, your Honor.
6 MR. WHITE: Your Honor, I can rephrase it.
7 THE COURT: Go ahead.
8 Q What was your understanding as to whom this loan --
9 what was your understanding as to whom you were extending
10 this loan to?
11 MR. TRABULUS: Objection as to form.
12 THE COURT: Well, did you have a discussion about
13 what this $200,000 was to be?
14 THE WITNESS: No, we did not have discussions.
15 THE COURT: You just did this unilaterally?
16 THE WITNESS: This was in response to a request
17 from Mr. Gordon which I referred to earlier, sir.
18 THE COURT: He requested a return of the money?
19 THE WITNESS: That's correct.
20 THE COURT: You sent a check for $200,000?
21 THE WITNESS: That is correct.
22 THE COURT: You said it was a loan?
23 THE WITNESS: I said it was a loan. And there
24 was a subsequent correspondence in which I indicated to
25 him it didn't have to be a loan. I just did that because
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1 I wasn't sure how it was to be characterized.
2 THE COURT: Right now we are getting as to how
3 you decided it was a loan. You decided that yourself?
4 THE WITNESS: Absolutely.
5 THE COURT: All right.
6 Overruled.
7 Q Dr. Grossman, I think you mentioned this before, but
8 let me clarify.
9 In your conversation with Mr. Gordon did he say
10 why he needed this money back?
11 A Yes. He indicated they needed money for publication
12 expenses to put out the registry, and didn't have enough
13 because returns to the business had been rather weak
14 because of the holiday time, and so, would I send the
15 money back?
16 I said, of course.
17 Q Now this money you regarded as a loan, was that money
18 ever repaid?
19 A No, it was not.
20 Q D id you ever subsequently ask Mr. Gordon about the
21 repayment of the loan?
22 A No, I didn't.
23 Q And was there a reason why not?
24 A Well, frankly, I didn't know for sure whether or not
25 it really was a loan, or whether I was just giving it
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1 back.
2 One of the reasons I wasn't sure how to
3 characterize it is because I had received this money as
4 income in a W-2 form, and I didn't know quite how -- what
5 was appropriate. I am not that sophisticated in these
6 business things to understand. So I characterized it as a
7 loan, but it didn't necessarily have to be a loan.
8 More importantly than that, I very seldom
9 receive, if ever, ever received a check or two checks in
10 that amount of money at one time. And a kind of a nice
11 high, a nice little three for a few days. But that's kind
12 of easy come, easy go. It is not something that I worked
13 awfully hard to earn.
14 Q Let me show you Government's Exhibit 593 for
15 Identification.
16 (Handed to the witness.)
17 Do you recognize that?
18 A Yes, I do.
19 Q What is that?
20 A A compensation agreement between Bruce Gordon and the
21 shareholders of Who's Who Worldwide Registry, Inc.
22 Q And does it bear your signature?
23 A It does.
24 MR. WHITE: Your Honor, the government offers
25 Exhibit 593.
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1 THE COURT: What is the date on that?
2 THE WITNESS: January 26th, 1993.
3 THE COURT: Any objection?
4 MR. TRABULUS: No.
5 THE COURT: Government's Exhibit 593 in
6 evidence.
7 (Government's Exhibi t 593 received in evidence.)
8 Q Now, the date that you just read, January 26th, 1993,
9 is that the date that you signed it?
10 A That's the date I signed it.
11 Q Now, can you tell us, did you make any change to the
12 date when you signed it?
13 A Well, the date of the month and day of the month were
14 blank, and the year had been typed in as 1990. So I
15 corrected the year to 1993, and filled in the date of the
16 month and the month.
17 Q Now, can you explain the circumstances under which
18 you signed this agreement?
19 A Yes.
20 I received this and looked at it late one night,
21 just before 11:30, just before I was going to bed. And I
22 saw it was something that was requested of me from Who's
23 Who Worldwide. And as usual I looked where I had to sign
24 it and not too much else. I saw that the day was blank
25 and that the year was incorr ect. I corrected the year,
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1 filled in the date, and wrote my name on it. And I stuck
2 it in a FEDEX envelope for the next morning to be sent out
3 again.
4 Q Now, did any Who's Who Worldwide employee ever
5 contact you to verify the existence of this compensation
6 agreement?
7 A No.
8 Q Have you ever had any conversation at all about the
9 compensation agreement with any Worldwide employee?
10 A No.
11 Q Now, prior to 1996 did Mr. Gordon ever advise you
12 that Who's Who Worldwide was paying personal expenses of
13 his?
14 A No.
15 Q Now, did you ever have any discussion with Mr. Gordon
16 regarding this subject?
17 A Yes.
18 Q Tell us when that was?
19 A Sometime in early '96, I guess.
20 Q And what were the ci rcumstances of this conversation?
21 A I had -- in connection with the bankruptcy defense I
22 had received transcripts of documents from the bankruptcy
23 case, in which I realized that there had been certain
24 personal expenditures made by Mr. Gordon, apparently paid
25 for by Who's Who.
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1 Q And did you then discuss that with Mr. Gordon?
2 A Yes, I did.
3 Q And can you tell us the substance of that
4 discussion.
5 A He said to me that this was a rather common practice,
6 and CEOs of corporations usually have some kind of a
7 fund -- I am blocking on the name of the fund, but it
8 was -- it seemed like a very appropriate function. And
9 the way he described it. And at the end of the year
10 whatever had been spent for those purchases would be
11 de ducted from his annual income.
12 Q Did Mr. Gordon ever indicate to you that he owed back
13 taxes to the IRS?
14 A About the same time that the discussion occurred,
15 also.
16 Q Did he actually ask you to loan him money for
17 purposes of repaying the IRS?
18 A No. He had indicated that he had a program worked
19 out with the IRS that he was paying them periodically.
20 Q Now, did there come a time that you learned that
21 Who's Who Worldwide had filed for bankruptcy?
22 A Yes.
23 Q And approximately when did you learn that fact?
24 A In the fall of 1995.
25 Q Now, did you have a discussion with Mr. Gordon
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1 regarding the filing of a bankruptcy petition?
2 A Yes, I did.
3 Q Was that in the fall of '96? Is that how you learned
4 it ?
5 A No. I learned it because I started receiving reams
6 of legal documents from the law firm of the bankruptcy
7 trustee and I started raising questions at that point.
8 Q Did you have a discussion with Mr. Gordon regarding
9 Who's Who Worldwide filing bankruptcy?
10 A Yes.
11 Q Tell us the subject of that discussion?
12 A Well, he indicated that that was based on -- at least
13 to the my understanding, it was based primarily on the
14 fact that when the government had raided the facilities
15 they had taken his bank account records and checkbooks and
16 so forth, and he was unable to pay his bills in a timely
17 fashion, and that that is what promulgated the proceeding.
18 MR. WHITE: The government would offer 610 and
19 610-A, which are certified copies of the Who's Who
20 Worldwide bankruptcy petition and its amendment.
21 THE COURT: Any objection?
22 MR. TRABULUS: No, your Honor.
23 THE COURT: Government's Exhibits 610 and 610-A
24 for Abel in evidence.
25 (Government's Exhibit 610 received in evidence.)
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1 (Government's Exhibit 610-A received in
2 evidence.)
3 MR. JENKS: Your Honor, once again, these are not
4 being offered against the corporation; is that correct,
5 Mr. White?
6 MR. WHITE: That's correct.
7 THE COURT: You may proceed.
8 Q Dr. Grossman, let me show you Exhibit 610.
9 If you can look through that, first of all.
10 (Handed to the witness.)
11 A I am looking for a date.
12 Q Now, aside from when you met with your own attorney
13 or with the government in connection with this case, have
14 you ever seen that document before?
15 A No.
16 MR. WHITE: M r. Grossman, if you can look at page
17 1 of the bankruptcy petition.
18 (Handed to the witness.)
19 A Yes.
20 Q And the pages that have a post-it on them and compare
21 them to Exhibit 610-B, and tell us if it is strictly an
22 enlargement of those pages.
23 A The secondary certificate is. I don't know what this
24 is.
25 (Mr. White confers with the witness.)
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1 A All of those are, seem to be those that are indicated
2 here.
3 Q So 610-B appears to be an enlargement of the
4 bankruptcy petition?
5 A Right.
6 MR. WHITE: Your Honor, the government offers
7 610-B.
8 THE COURT: Any objection?
9 MR. TRABULUS: I would like to see which ones
10 they are.
11 (Whereupon, at this time there was a pause in the
12 pro ceedings.)
13 MR. TRABULUS: No objection.
14 THE COURT: Government's Exhibit 610-B for Baker,
15 in evidence.
16 (Government's Exhibit 610-B received in
17 evidence.)
18 (Whereupon, the exhibit/exhibits were published
19 to the jury.)
20 Q Now, if you can turn in your copy, Dr. Grossman, to
21 the page that has the heading, secretary's certificate.
22 A Yes.
23 Q Could you just follow along while I read the first
24 paragraph.
25 It says: The undersigned, the duly elected
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1 acting secretary of Who's Who Worldwide Registry, Inc., a
2 New York corporation, does hereby certify that the
3 following resolutions were duly adopted at a meeting of
4 the board of directors of said corporation, duly called
5 and held at the offices of the cor poration, on the 21st of
6 March, 1994 at 10:00 a.m., that day at which a quorum of
7 the directors were present and acting throughout, and that
8 the same have not been amended or rescinded in any
9 respect.
10 Is it correct, Dr. Grossman, that the rest of
11 that indicates that the board of directors approved the
12 filing of the bankruptcy petition?
13 A Yes.
14 Q If you can follow along while I read the last
15 paragraph.
16 It says witness whereof I have hereunto set my
17 hand and the seal of the corporation this 21st day of
18 March, 1994, signed, Bruce Gordon, acting secretary.
19 MR. WHITE: Your Honor, I would like to read from
20 Exhibit 799, which is the transcript already admitted in
21 evidence.
22 THE COURT: Very well.
23 MR. WHITE: Your Honor, it is the deposition of
24 Mr. Gordon from April 14th, 1994, in connection with the
25 bankruptcy proceeding of the Who's Who Worldwide
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1 bankruptcy proceeding, page 24, line 3.
2 Question: Did you have a meeting of the board of
3 directors shortly before you filed the petition of
4 bankruptcy?
5 Answer: I spoke to my sister, my brother-in-law
6 by phone.
7 Question: And you made minutes of that meeting;
8 is that right?
9 Answer: Yes.
10 Now reading from page 40 of the same exhibit,
11 beginning with line 5.
12 Question: Let's go back to the secretary's
13 certificate which is immediately following the first page
14 of Exhibit A.
15 Have you seen that document before, Mr. Gordon?
16 Answer: Yes.
17 Question: Is that your signature at the bottom?
18 Answer: Yes.
19 Question: It refers to a board o f directors
20 meeting at 10:00 a.m. on March 21st. Do you recall
21 attending that meeting?
22 Answer: Yes.
23 Question: Which of the directors were present in
24 person?
25 Answer: I was present.
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1 Question: Were either of the Grossmans present?
2 Answer: No.
3 Question: Were either of the Grossmans on the
4 telephone with you at that time?
5 Answer: Yes.
6 Question: Which one?
7 Answer: Joyce Grossman, and later on Richard
8 Grossman.
9 Question: Are you the only three directors of
10 the corporation?
11 Answer: Yes.
12 Q Dr. Grossman, did you ever participate in a board of
13 directors meeting in March of 1994 to discuss the filing
14 of a bankruptcy petition?
15 A No.
16 Q Now, if you could t urn to the page of the bankruptcy
17 petition which is entitled list of equity security
18 holders.
19 Do you have it before you?
20 A Yes.
21 Q You can follow along as I read the list of the equity
22 security holders.
23 Joyce C. Grossman, listed as a 75 percent
24 shareholder; is that right?
25 A Yes.
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1 Q It lists yourself, Richard C. Grossman as a 25
2 percent shareholder; is that right?
3 A Yes.
4 Q Could you read aloud for us under where it says
5 declaration at the bottom.
6 THE WITNESS: I Bruce Gordon president for Who's
7 Who Worldwide Registry, Inc. named as debtor in this case
8 declare under penalty of perjury that I have read the
9 foregoing list of equity security holders consisting of
10 one sheet including t his declaration, and it is true and
11 correct as to the best of my information and belief.
12 Q And, it is again signed and dated?
13 A By Bruce Gordon. It looks like March 21st, 1994.
14 Q Now, is the information regarding your ownership
15 interest in Who's Who Worldwide accurate on that document?
16 A No.
17 Q In March of '94, did you or your wife or any of your
18 family entities own 100 percent of Who's Who Worldwide?
19 A No.
20 Q If you can now turn to the next marked page in the
21 bankruptcy petition, which is the upper right hand page on
22 Exhibit 610-B?
23 MR. TRABULUS: 610-B?
24 MR. WHITE: 610-B is the enlargement.
25 Q Do you have it, Dr. Grossman?
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1 A I do.
2 Q Does it also set forth that your wife owns 75 percent
3 of the company and you own 25 percent?
4 A Yes, it does.
5 Q And is that accurate?
6 A No, it is not accurate.
7 MR. WHITE: Your Honor, I would like to read
8 again from Exhibit 799, transcript of Mr. Gordon's
9 deposition from April 14th, 1994, in connection with the
10 bankruptcy proceeding.
11 THE COURT: Very well.
12 MR. WHITE: Beginning page 30, line 9.
13 Question: Does Who's Who Worldwide Registry have
14 any preferred stock?
15 Answer: No.
16 Question: Does it have only a single class of
17 common stock?
18 Answer: I believe that is the case.
19 Question: Under item five there is only a single
20 name indicated, a person who owns 20 percent or more of
21 the voting securities of a debtor. Is that wrong?
22 Answer: I believe Joyce Grossman and there is a
23 trust, I am not sure, I don't know.
24 Question: I thought y ou indicated earlier that
25 you have the authority to vote all of the stock?
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1 Answer: Yes, that's true.
2 Question: So item five then should list your
3 name, I suppose. I know you can't read it because it is
4 small writing. It says, quote, list the name of any
5 person who directly or indirectly owns, controls or holds
6 with power to vote, unquote.
7 Answer: I have the power to vote 100 percent of
8 the stock.
9 Question: And the names of the people who
10 actually own the stock would be Richard Grossman, Joyce
11 Grossman and perhaps a trust?
12 Answer: I believe that to be accurate.
13 Question: At the time of the trial I believe you
14 owned 75 percent of the stock of Who's Who Worldwide
15 Registry; is that correct?
16 Answer: No, I am not sure if I could vote 75
17 percent of the stock or 100 percent of the stock. It's
18 something that's not important in the operation of my
19 business.
20 Comment by Mr. Flaum.
21 THE COURT: F L A U M?
22 MR. WHITE: Yes.
23 Mr. Flaum says: The question was not voting.
24 The question was ownership.
25 Could you read the question back, please.
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1 And the record is read back.
2 Answer: There's been a change in ownership.
3 Question: Perhaps you can explain then how you
4 owned 75 percent of it then, but apparently you own none
5 of it now?
6 Answer: I think there was a little confusion.
7 It's that I have an employment agreement where up to a
8 certain point I get 75 percent of the profits and Joyce
9 and the trust get the rema ining 25 percent. However, I do
10 have the ability, the voting rights on a stock, and that's
11 what I meant.
12 Question: Perhaps you will recall at trial I
13 indicated to you that Dunn & Bradstreet recently listed
14 Dr. Grossman as owning 100 percent of the stock, and I had
15 asked you if that was correct, and you said that's not
16 right, that you owned 75 percent. You had contemplated
17 selling it to him or this trust, but you had not done so.
18 Do you recall that testimony?
19 Answer: Yes, I recall D & B had them. That's
20 what I recall. And I had indicated to you that -- was
21 this something about an employment agreement also in it?
22 Question: This is the first time I've heard of
23 it, so I'm not aware of the employment agreement.
24 Answer: I vote 100 percent of the stock. I also
25 have permission to tell people that I vote a hundred
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1 percent of the stock in writing, and that's what I meant.
2 Your Honor, I read from page 65 of the same
3 exhibit, beginning at line 4.
4 Question: The next page is the filing -- let me
5 repeat.
6 The next page in the filing is the list of equity
7 security holders?
8 Answer: Yes.
9 The list of equity holders. No securities.
10 Answer: Yes.
11 Question: Do I take it that this is not quite
12 accurate either, that some of the shares of stock is
13 actually owned by a trust?
14 Answer: Where it says 25 percent shareholder,
15 that is the trust.
16 Question: So, Ms. Grossman does own 75 percent?
17 Answer: Correct.
18 Question: And Dr. Grossman doesn't own it
19 directly, a trust owns his?
20 Answer: That's the truth, right.
21 Question: By trust you mean it's an investment
22 of a percentage or a profit sharing plan?
23 Answer: I don't know what the trust -- what that
24 trust consists of.
25 Question: Did you provide this information to
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1 Mr. Flaum, F L A U M, before it was put on the schedule?
2 Answer: Which information? This information?
3 Question: Yes, this information.
4 Answer: Again, it was done with my accountant.
5 Question: But did you?
6 Answer: I had him put, to some of this, yes.
7 Your Honor, finally, page 72 of that transcript,
8 line 12.
9 Question: Did you ever at any time hold the
10 record ownership of stock in the company?
11 Answer: No.
12 The government would now offer Exhibit 800, which
13 is a transcript of an April 29th, 1994 ban kruptcy hearing,
14 portions of a transcript.
15 THE COURT: Any objection?
16 MR. TRABULUS: No.
17 THE COURT: Government's Exhibit 800 in
18 evidence.
19 (Government's Exhibit 800 received in evidence.)
20 THE COURT: What is the date on that?
21 MR. WHITE: April 29th, 1994.
22 It is a hearing in the bankruptcy proceeding, and
23 I will read from page 33, line 22.
24 Question: Who are the shareholders for
25 Worldwide?
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1 Answer: For all intense and purposes, I am, but
2 the actual names are Joyce and Richard Grossman, and the
3 trust owns 45 percent and Richard Grossman.
4 Question: When did they become shareholders?
5 Answer: From the beginning.
6 Question: Five years ago?
7 Answer: Five years ago.
8 Question: Does the company maintain shares
9 certificates with their names on it?
10 Answer: I believe so.
11 Finally, your Honor, the government would offer
12 Exhibit 801, which are portions of a September 9, 1994
13 bankruptcy hearing.
14 THE COURT: Any objection?
15 MR. TRABULUS: No.
16 THE COURT: Is that 804, Mr. White?
17 MR. WHITE: 801, your Honor.
18 THE COURT: Government's Exhibit 801 in
19 evidence.
20 (Government's Exhibit 801 received in evidence.)
21 MR. WHITE: Reading from page 51, line 1.
22 Question: One last question -- this is 801, page
23 51, line 1.
24 Question: One last question, and that is whether
25 or not any employees of the debtor are also employees of
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1 Publishing Ventures.
2 Answer by Mr. Reffsin, no.
3 Question: Mr. Gordon, are you an employee of any
4 of those -- of these entities other than the debtor?
5 Mr. Gordon: Do I draw salary?
6 Question: No. Are you an employee, is the
7 question.
8 Mr. Gordon: Define "employee."
9 Question: Do you work for any other entities?
10 Mr. Gordon: For compensation?
11 Question: What is your role?
12 Mr. Gordon: For compensation. With Sterling,
13 Who's Who, sometimes once a week, sometimes once every two
14 weeks. Very seldom.
15 Question: Do you get paid from Sterling?
16 Mr. Gordon: No.
17 Question: Do you get paid from Publishing
18 Ventures?
19 No -- Mr. Gordon, no.
20 Question: Do you get paid from Who's Who
21 Executive Club?
22 Answer: No.
23 Question: All right. No compensation?
24 Mr. Gordon: No.
25 Question: But are you an officer of any of those
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1 entities.
2 Mr. Gordon: Yes.
3 Question: What is your position?
4 Mr. Gordon: I believe I am president of all the
5 entities.
6 Question: Do you have an ownership interest in
7 any those entities (sic)?
8 Mr. Gordon: No.
9 Question: Your only role is as president?
10 Mr. Gordon: I am a hired hand.
11 Q Dr. Grossman, did you ever at any time -- let me back
12 up.
13 Did you, your wife or any family entities ever
14 own more than 25 percent of Who's Who Worldwide?
15 A No.
16 MR. WHITE: Your Honor, I have no further
17 questions.
18 THE COURT: Cross-examination.
19 MR. TRABULUS: Thank you, your Honor.
20 THE COURT: Mr. Trabulus, do you wish this
21 document, which is blocking my view, to which I have no
22 objec tion --
23 MR. TRABULUS: I don't want to block your view,
24 and I don't need the document, your Honor.
25 THE COURT: Let's ask the government to remove
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1 it. They put it there and in all fairness they should
2 take it away.
3 MR. WHITE: We will clean up our own mess, your
4 Honor.
5
6 CROSS-EXAMINATION
7 BY MR. TRABULUS:
8 Q Good afternoon, Dr. Grossman.
9 I am Norman Trabulus, and I am Mr. Gordon's
10 attorney.
11 Dr. Grossman, are you aware that there was a
12 lawsuit brought by Reed Elsevier against Who's Who
13 Worldwide? Did Mr. Gordon make you aware of that?
14 A At what time?
15 Q While the lawsuit was ongoing.
16 A I knew there was some action going on, but I didn't
17 know quite what the extent of it was.
18 Q Dr. Grossman, did there come a point in time that
19 Mr. Gordon advised you that Reed Elsevier had obtained a
20 judgment against Who's Who Worldwide?
21 A Yes.
22 Q And was that point in time right after the judgment
23 was obtained?
24 A I don't recall.
25 Q Did he discuss with you that as a result of that
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1 fact, it was necessary for Who's Who Worldwide to take
2 some action?
3 A I suppose. I don't recall. I don't know what you
4 are referring to.
5 Q Well, did he tell you as a result of that it was
6 necessary to file chapter 11?
7 A I am not sure.
8 Q Dr. Grossman, I believe you were asked some questions
9 by Mr. White concerning bankruptcy?
10 A Yes.
11 Q I have to ask you, how familiar are you with
1 2 bankruptcy?
13 A I am not very familiar with bankruptcy.
14 Q Are you aware of the difference between a bankruptcy
15 that is a liquidation, where the company or the assets
16 gets sold off, and a type of bankruptcy which is called
17 the reorganization?
18 A In general. Not very specifically.
19 Q Would it be consistent -- withdrawn.
20 Is it not correct that at a certain point in time
21 Mr. Gordon told you that as a result of a judgment that
22 had been awarded Reed Elsevier against Who's Who
23 Worldwide, Who's Who Worldwide would have to go into a
24 reorganization type of bankruptcy to enable it to survive?
25 A Yes, I think he did at one point.
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1 Q Okay.
2 Was that in a telephone conversation that you had
3 with Mr. Gordon?
4 A I am sure it was a telephone conversation. I don't
5 remember any in-person conversations to that effect.
6 Q Was that a conversation that wife was also on as
7 well?
8 A It is possible.
9 Q Were you aware that you were a director of the
10 company, Who's Who Worldwide?
11 A Not at that time.
12 Q Is it correct to say though that in this conversation
13 Mr. Gordon conferred with you, and also with your wife, if
14 she was on the phone, concerning an upcoming filing of a
15 Chapter 11 petition, a reorganization petition?
16 A I don't think there was ever any mention of an
17 up-coming filing. I don't think he was very specific
18 about the terms.
19 Q Did he tell you it was already done, or that it would
20 have to be done?
21 A Most things that he discussed with us were after the
22 fact. So I would have to assume that was the case in this
23 time as well.
24 Q In this particular case you are just assuming that it
25 was after the fact; is that correct? You don't have a
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1 clear recollection?
2 A I don't have a clear recollection.
3 Q So, it is possible that he advised you and your wife
4 before the Chapter 11 filing, that there was indeed going
5 to be a reorganization filing; is that right?
6 A Yes. It is a possibility. But since I am not
7 awfully knowledgeable about the differences at that time,
8 you may be correct.
9 Q Okay.
10 Now, you told Mr. White that in I think February
11 of 1996, or in the fall of 1996, I may have the time that
12 you stated incorrectly, but that you had a conversation
13 with Mr. Gordon in which he told you that the government's
14 raid precipitated a bank ruptcy or brought about a
15 bankruptcy; is that right?
16 A Yes.
17 Q Do you recall what he was talking about, or was a
18 change from a reorganization, to a liquidation where the
19 company would have to be sold off?
20 A I don't know. I wasn't familiar at that time, until
21 you are describing the difference, I wasn't aware of the
22 significance of the difference.
23 Q Do you recall in this conversation -- withdrawn.
24 In this conversation that you had with Mr. Gordon
25 in which he talked about the government raid and its
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1 effect, that was after the conversation you had about
2 going in for reorganization because of the judgment; is
3 that correct?
4 A It may have been after. But under those
5 circumstances I was not aware that the reorganiz ation was
6 a bankruptcy.
7 Q Okay.
8 Were you aware that the reorganization was
9 something -- withdrawn.
10 Were you given to understand by Mr. Gordon that
11 the reorganization would be something that you hoped would
12 give the company a chance to survive and continue in
13 operation?
14 A Yes.
15 Q And now, when Mr. Gordon told you what you described
16 as a bankruptcy, which was precipitated by the government
17 raid, was that something where you understood the company
18 would not be able to survive at that point?
19 A No.
20 Q You thought that it still might survive?
21 A I had no way of making any judgment at all.
22 Q Okay.
23 Did he tell you whether the company -- withdrawn.
24 Did he tell you whether he expected the company
25 to continue in existence at that point?
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1 A He said it looked doubtful as I recall his
2 terminology. I am not sure.
3 Q Okay.
4 Earlier on when he told you about the
5 reorganization after the Reed judgment, did he tell you at
6 that point that it looked doubtful as to whether the
7 company would continue?
8 A Earlier on?
9 Q Yes.
10 A No.
11 Q Now, the conversation which you had with Mr. Gordon
12 concerning the bankruptcy being precipitated by the raid
13 that reflected a change in what he gave you was his
14 prognosis of the company; is that right?
15 A Yes.
16 Q Now, let me ask you, when you first spoke to
17 Mr. Gordon -- withdrawn.
18 When you first spoke to Mr. Gordon about
19 investing in Who's Who Worldwide, Inc., Who's Who
20 Worldwide Registry -- Who's Who Worldwide Registry, I am
21 s orry, did he describe to you what the business was going
22 to be?
23 A Yes.
24 Q That was in late 1989 or early 1990?
25 A Probably early 1990.
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1 Q Right around -- you identified some documents that
2 were dated in January of 1990, and I think you indicated
3 some of the actual investing of money occurred after
4 that.
5 MR. WHITE: Objection. There is no document he
6 identified relating to an investment of January of 1990.
7 THE COURT: Mr. White, I just want to hear the
8 word "objection." I never go back to determine what
9 occurred before. We would spend a lot of time doing
10 that. If the witness has a recollection as to whether
11 that occurred or didn't occur, we will let him answer.
12 That's how we handle it.
13 MR. TRABULUS: Your Honor, if you bear with me, I
14 will go through my notes to try to identify the particular
15 document.
16 THE COURT: Good. Take your time. Not too much
17 time, but take your time.
18 Since it is past my lunch hour -- I told you we
19 will have a late lunch today. That is difficult for me,
20 but easy for you, I am sure. Some of you may not even eat
21 lunch. Who knows.
22 Q Do you have Exhibit 584 before you?
23 THE COURT: What is that?
24 MR. TRABULUS: A waiver of notice of special
25 meeting of board of directors of Who's Who Worldwide
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 Registry, Inc.
2 A I have it in my hand.
3 Q And that is one of the documents that you testified
4 about; is that correct?
5 A Yes.
6 Q And it is dated -- it indicates a date of January
7 3rd, 1990; is that correct?
8 A That's correct.
9 Q And is that around the time period that you were
10 having conversations with Mr. Gordon concerning
11 prospective investment that turned out to be in Who's Who
12 Worldwide Registry?
13 A I think it is beforehand.
14 Q So it would have been a little bit afterwards in
15 early January of 1990?
16 Excuse me, when specifically do you believe that
17 you had the conversation?
18 A In about April of that year.
19 Q Okay.
20 Had you had any conversations in 1989 concerning
21 an investment?
22 A We might have had, but not specifically as to the
23 nature of the business, or what it was.
24 Q Now, when Mr. Gordon told you about the business, can
25 you tell me what it was that he described the business as
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1 going to be?
2 A When we discussed it in April?
3 Q Yes.
4 A He discussed the fact that it was a business wherein
5 people who had responded to his mailings by returning a
6 card would be contacted by people in his own office for
7 membership in this organization, and they would be
8 included in his directory and registry.
9 Q Now, in describing that to you, did he describe it to
10 you as anything other than a legitimate business?
11 A No. He never described it as anything other than a
12 legitimate business.
13 Q Did he talk about the prospects of members networking
14 with each other?
15 A I am not sure if he did it at that time or
16 subsequently.
17 Q He did at some point in time?
18 A Yes, he did.
19 Q Did he talk to you about the types of people who were
20 going to be invited to be listed in the registry?
21 A Corporate heads and significant people in business.
22 Q Now, I believe you testified that initially you and
23 your wife acquired shares in the sense that one was for
24 your pension plan and the other was for a trust that was a
25 family trust; is that correct?
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1 A Some percentage of the business was to go into my
2 pension plan, or was being an investment of the pension
3 plan. And the balance was for the family trust.
4 Q Initially 20 percent, you understood that a 20
5 percent ownership of Who's Who Worldwide Registry was to
6 go into the family trust?
7 A Yes.
8 Q And five percent was to go into the pension plan?
9 A Yes.
10 Q And now, can you explain to the jury, and not in a
11 great deal of detail, and I am not trying to pr y into the
12 family thing, but just the nature of a family trust, what
13 it is, your family trust.
14 A Well, it is just a -- it is like a holding body for
15 investments. And my wife and I are trustees for it.
16 Q Your wife and you are trustees?
17 A Yes.
18 Q And do you understand it to mean that legal title to
19 the assets of the trust is in your name and your wife's
20 name?
21 A I suppose so.
22 Q Now, are there also people who are beneficiaries of
23 the trust?
24 A Yes.
25 Q And would those be your children?
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1 A Yes.
2 Q Now, those are the people who have the benefits of
3 the assets of the trust; is that correct?
4 A At some time in the future.
5 Q At some point in the future they could get the income
6 and the assets --
7 A Yes.
8 Q And they have that right or that interest right
9 now -- withdrawn.
10 Again, not to -- do they get any income from it
11 at this point?
12 A No.
13 Q At this point the income goes to you and your wife,
14 but down the road it may go to your children; is that
15 right?
16 A Yes. There is not that much income, I must tell you.
17 Q All right.
18 And although they have a legal right in the trust
19 assets, to have them at some time in the future, they
20 don't have title to those assets; is that right?
21 MR. WHITE: Objection.
22 THE COURT: What is the relevancy of that,
23 Mr. Trabulus?
24 MR. TRABULUS: Your Honor, we -- I will withdraw
25 the question.
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1 Q Now, you indicated that you received a considerable
2 amount of money in late 1992 from Who's Who Worldwide
3 Registry?
4 A Right.
5 Q And that amount of money I think you indicated was
6 about $400,000 before taxes?
7 A That's correct.
8 Q And do you know how much taxes were paid by that by
9 way of W-2 withholding, and also, separately the state
10 taxes which were withheld, which were paid. And you can
11 refer to documents to refresh your recollection. Do you
12 have any documents there?
13 A I think we received based on the two checks we
14 received, it comes to the order of $213,000, so the
15 difference would have been subtracted, that's about
16 $80,000 to pay taxes.
17 Q That's federal taxes?
18 A I don't know what it was. I don't have the W-2 in
19 front of me. I haven't seen it for a while.
20 Q The state taxes paid were paid by you?
21 A Unles s New York taxes were paid out of that initial
22 $87,000, I don't know.
23 Q All right.
24 A It didn't concern me at the time, so there was no
25 reason for me to recall.
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1 Q Now, you have indicated that you thought that was in
2 return for the time and trouble you had spent doing a
3 variety of different paperwork-type things; is that
4 correct?
5 A Yes. And there were also several occasions where my
6 wife and I made some trips to New York, and we helped him
7 do some decorating around the office. My wife was a
8 decorator and I gave him a hand.
9 Q We will do that afterwards.
10 Can you tell us the paperwork type things you
11 recall doing?
12 A There were a number of occasions where American
13 Express or other types of credit card co mpanies would need
14 to have the statements signed by somebody else aside from
15 Mr. Gordon. And so, the office would send the things to
16 sign, papers to send back in reference to those things.
17 Also, there were a number of bank accounts that needed to
18 be opened at various times. And cards and papers in
19 association with that would be sent.
20 Q When these papers would come, would you basically
21 just -- would you review them carefully?
22 A Initially I did. And then there were some times in
23 which we had some pressing health matters going on, and by
24 the time I got to look at these things I was kind of
25 exhausted. And it was at the end of the day just before I
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1 went to sleep, and I didn't pay too much attention.
2 Q So, there were times you would sign papers without
3 even looking at them and return them to Who's Who
4 Worldwide Registry?
5 A That's correct.
6 Q Now, you mentioned that some of the things you signed
7 were things involving credit card accounts that there
8 needed to be a signature other than Mr. Gordon's?
9 A That's correct.
10 Q Were these the -- are you familiar with the term
11 "merchant account," in return for a credit card account?
12 A I think that's what these were.
13 Q These were the accounts that Who's Who Worldwide
14 Registry, Inc. had with credit card companies, which would
15 enable members to pay for memberships or goods using a
16 credit card; is that correct?
17 A Yes.
18 Q And is it your understanding that the credit card
19 companies insisted that you and your wife be on those
20 accounts rather than Mr. Gordon?
21 A I don't recall that my wife was ever included in
22 that. And I don't know that they ever insisted, although
23 there was a couple of times where my credit was used by
24 them to evaluate it, I know that.
25 Q So, your understanding -- fair enough.
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1 Now, Mr. White asked you about the immunity
2 agreement that you are testifying under?
3 A Yes.
4 Q And that protects you, as you understand it, from
5 being prosecuted from anything you testify about, or
6 having it used against you in any prosecution that you
7 testify about; is that correct?
8 A As long as I tell the truth.
9 Q Sure, surely.
10 As you sit here today, do you believe in your
11 relations with Mr. Gordon, or in Who's Who Worldwide
12 Registry, Inc., that you committed any crimes?
13 A No, I did not.
14 Q Do you believe your wife did?
15 A I do not believe she committed any crimes.
16 Q She also has an immunity agreement as well; is that
17 correct?
18 A That's correct.
19 Q Now, were you told either by Mr. White or some agent
20 of the government at some point in time that either you or
21 your wife might be prosecuted?
22 A No.
23 Q Were you told that you were the target of any
24 investigation?
25 A Yes.
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1 Q When you were told that you were the target, did you
2 understand that that might -- that you might be prosecuted
3 at that point in time?
4 A I just made an assumption.
5 Q And you retained an attorney, as did your wife? The
6 same attorney?
7 A That's correct.
8 Q And the immunity agreement was given to you along
9 with an assurance -- withdrawn.
10 When you first spoke to Mr. White, or a
11 government agent, was that the point of time you might
12 have been a target?
13 A No.
14 Q It was later?
15 A It was earlier.
16 Q Earlier, before speaking to them?
17 A Yes.
18 Q And when you first spoke to them it was under an
19 agreement where what you said at that point in time
20 couldn't be used against you; is that correct?
21 A I believe that's the case.
22 Q Did they tell you what you might be a target for?
23 A There was a postal inspector, a nasty man, nasty to
24 me.
25 Q Was his name Biegelman?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 A His name was Biegelman.
2 He intimidated my wife. He used rather
3 threatening techniques to her at the time she was n't well,
4 and arrived with another inspector in the dark of an
5 evening. I had not yet come home from work. And as I
6 drove into the garage he approached. And he and another
7 inspector, evidencing that they had weapons, were rather
8 menacing. And I guess they served a subpoena upon us, or
9 something, on that evening. And that's when I knew I was
10 a target.
11 Q Now, after that did you have a conversation either
12 with them or some other inspector, possibly with Mr. White
13 or somebody else from his office, in which you were told
14 what possible crimes you might be a target for?
15 A No.
16 Q Were you ever told anything about tax fraud or
17 anything of the sort?
18 A No.
19 Q Okay.
20 Did you ever have a conversation with Mr. White
21 concerning the way of the business Who's Who Worldwide was
22 run?
23 A I didn't person ally. But I think my wife did.
24 Q Okay.
25 Did he ever tell you what his complaint was with
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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R. Grossman-cross/Trabulus
1 Who's Who Worldwide or with Mr. Gordon?
2 A Not really.
3 Q Okay?
4 A I am still pretty much in the dark about the whole
5 case.
6 Q Okay.
7 THE COURT: Is this a good time to take a break,
8 Mr. Trabulus?
9 MR. TRABULUS: Certainly. I have quite a bit
10 more.
11 THE COURT: I assumed you did.
12 Ladies and gentlemen, we will take a recess for
13 lunch until 2:15.
14 Please do not discuss the case or along with
15 anyone else, do not discuss the case.
16 Keep an open mind and come to no conclusion.
17 See you at 2:15. Have a nice lunch.
18 (Whereupon, at this time the jury left the
19 courtroom.)
20 (Lu ncheon Recess.)
21
22
23
24
25
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1 A F T E R N O O N S E S S I O N
2
3 (Whereupon, the following takes place in the
4 absence of the jury.)
5 THE COURT: My courtroom deputy clerk tells me
6 that juror number five is having palpitations of the
7 heart. He has had this problem before. He is under
8 medication. He says he wants to be excused. He says he
9 is enjoying the trial very much, and feels these
10 palpitations, and says that he wants to stay until
11 Thursday.
12 I intend to excuse him on Thursday. Any
13 objections from anybody?
14 MR. TRABULUS: Your Honor, if he is to be
15 excused, shouldn't he be excused today?
16 THE COURT: That would be the preferred
17 treatment. But he wants to stay on. I think you are
18 right.
19 MR. NEVILLE: James Neville, your Honor.
20 I vote if he is to be excused, that he goes
21 today.
22 MR. TRABULUS: Does he want to stay until
23 Thursday to see if he is better and wants to continue?
24 THE COURT: No. Because he is enjoying himself.
25 MR. GEDULDIG: He says he wants to be excused on
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 Thursday?
2 THE COURT: Yes. I thought I made that clear,
3 Mr. Geduldig.
4 MR. GEDULDIG: A very strange request.
5 THE COURT: You didn't understand that.
6 We will excuse him right away.
7 Bring him out.
8 I will talk to him out here.
9 (The following takes place in the corridor.)
10 THE COURT: Hello.
11 JUROR NO. 5: Hello.
12 THE COURT: How are you feeling?
13 JUROR NO. 5: N ot too bad, not too good. Since I
14 am on the case, I don't know if it is the excitement, but
15 I feel my heart beating very fast.
16 THE COURT: You want to be excused?
17 JUROR NO. 5: Yes.
18 THE COURT: We can't keep you until Thursday. If
19 you are to be excused, we will excuse you now.
20 You want to be excused?
21 JUROR NO. 5: Thank you.
22 THE COURT: Nice seeing you. I hope you feel
23 better.
24 You have your things inside?
25 JUROR NO. 5: Yes.
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1 THE COURT: Wait inside, let them all come into
2 the courtroom and then you leave. Don't talk to them at
3 all.
4 JUROR NO. 5: All right.
5
6 (Whereupon, at this time the following takes
7 place in open court.)
8 THE COURT: I spoke to the juror myself. He said
9 that perhaps it is the excitement of the trial, but he has
10 feelings in his heart, palpitations, fluttering, whatever,
11 and he doesn't feel comfortable to remain on the case.
12 And I certainly would never keep him on the case and be
13 responsible for any dire consequences. The man should go
14 to a doctor and have it taken care of.
15 I said also that we cannot keep you until
16 Thursday. If you want to be excused it has to be today or
17 not at all. He says today. So I have excused him.
18 We will replace him with the first alternate
19 juror.
20 THE CLERK: Jury entering.
21 (Whereupon, the jury at this time entered the
22 courtroom.)
23 THE COURT: Please be seated, members of the
24 jury.
25 You may proceed.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 Where is th e witness?
2
3 R I C H A R D C H A R L E S G R O S S M A N,
4 called as a witness, having been previously
5 duly sworn, was examined and testified as
6 follows:
7
8 CROSS-EXAMINATION (cont'd)
9 BY MR. TRABULUS:
10 Q Good afternoon, again, Dr. Grossman.
11 A Good afternoon, sir.
12 Q Earlier you mentioned, I believe, in response to a
13 question by Mr. White, that Sterling was a subsidiary to
14 Who's Who Worldwide Registry.
15 Was it your understanding that Who's Who
16 Worldwide Registry actually owns Sterling, or just that it
17 was an affiliated company?
18 A Perhaps it was a poor choice of words on my part.
19 Q Was it your understanding that you and your wife had
20 an interest in Sterling which was the same kind of
21 interest that you said in Who's Who Worldwide Registry,
22 Inc.?
23 A Yes.
24 Q Ok ay.
25 So, basically Sterling and Who's Who Worldwide
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Grossman-cross/Trabulus
1 Registry, Inc., as far as you knew, had common ownership?
2 A Yes.
3 Q Now, I think you mentioned that Mr. Gordon had in a
4 conversation with you told you that it was a common
5 practice for the chief executive officer of a corporation
6 to have -- and then you couldn't remember the term he
7 used, but you described it as a fund?
8 A Yes.
9 Q Does the phrase, loan and exchange account strike a
10 bell, do you think that's what he was talking about?
11 A I think that's possibly it, yes.
12 Q Did he explain to you that a loan and exchange
13 account is an account with a corporation, whereby a
14 corporation can make a loan to an officer or to a
15 director?
16 A Yes.
17 Q And did he explain that when it does that, the
18 corporation does not take a tax deduction as it would if
19 it paid a salary to an officer or director?
20 A I did not require, nor did he offer me that
21 explanation.
22 Q Okay.
23 So, you didn't get into the tax consequences as
24 such?
25 A That is correct.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Grossman-cross/Trabulus
1 Q Now, I would like to take a look at 583 which is in
2 front of you. Correction, 584. And I will show the jury
3 584-A, which is the blowup.
4 Mr. Grossman -- Dr. Grossman, I am sorry, is that
5 your signature at the bottom?
6 A It looks like my signature, yes.
7 Q When you say it looks like your signature, as far as
8 you know, is it your signature?
9 A Yes.
10 Q Do you recall when you signed this document?
11 A Not speci fically.
12 Q Is this one of the documents that may have been sent
13 to you and you signed without reading it?
14 A Yes.
15 Q Now, you didn't tell Mr. Gordon or anybody in his
16 company at that time when documents came to you for
17 signature that you weren't going to read them, did you?
18 A No.
19 Q Nobody asked you not to read them; is that correct?
20 A Nobody asked me not to read them, that's correct.
21 Q Dr. Grossman, you mentioned earlier that you signed a
22 compensation agreement, and that is 578, and I have
23 uncovered for the jury 578-A, which is the blowup -- I am
24 sorry, wrong document.
25 While I understand there is no blowup of the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Grossman-cross/Trabulus
1 compensation agreement, so I will ask you to look at 593.
2 A I have it in hand.
3 Q Okay .
4 Now, you testified that you signed that on
5 January 26th of 1993, and that you had actually penned in
6 the date yourself, correcting 1990 to 1993?
7 A Correct.
8 Q Do you recall whether or not that was signed at or
9 around the same time as 584, or before or after? Do you
10 have any way of connecting them?
11 A In general it was signed around the same period of
12 time. The other I know was not signed on the date that it
13 says on the document.
14 Q Okay.
15 Now, 584, which is the document of waiver of
16 special meeting which you signed, and that was certainly
17 signed before Who's Who Worldwide Registry, Inc. filed for
18 reorganization; is that correct? It was before the Reed
19 Elsevier judgment?
20 A What was the date of the Reed Elsevier judgment.
21 Q Was it sometime before March of 1994 that you signed
22 584?
23 A You know, I can't be sure.
24 Q Okay.
25 You think it was around the time you signed the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Grossman-cross/Trabulus
1 compensation agreement, which was January of 1993?
2 A My guess would be that it would be sometime within
3 that year to year and quarter, sometime in that vicinity.
4 Q Okay.
5 Now, in 584 you are listed as a director of the
6 corporation, are you not?
7 A Yes. It says the undersigned being all the
8 directors, yes.
9 Q So, when that was sent to you, certainly it was not
10 being concealed from you that you were a director of the
11 corporation?
12 A Are you asking me a question?
13 Q Yes, I am. It is certainly correct that it was not
14 concealed from you that you were a director?
15 A That's correct.
16 THE COURT: Hold on a moment, please.
17 (Whereupon, at this time there was a pause in the
18 proceedings.)
19 THE COURT: You may proceed.
20 MR. TRABULUS: Thank you, your Honor.
21 I would like to ask the government for a copy of
22 Exhibit 582, the original. I don't think that it is in
23 evidence yet.
24 THE COURT: For identification?
25 MR. TRABULUS: It would be for identification.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
584
Grossman-cross/Trabulus
1 It has not yet been brought before any witness.
2 (Document handed to Mr. Trabulus.)
3 Q Dr. Grossman, have you seen that before?
4 (Handed to the witness.)
5 A Yes, I have.
6 Q Do you recognize the signature on it?
7 A Yes.
8 Q Whose is it?
9 A It looks like my wife's signature.
10 Q As far as you know, is it your wife's signature?
11 A I would guess, to say yes.
12 Q Was that a document sent to you along with other
13 documents you may have just signed and returned?
14 A I don't think so.
15 Q Okay. Thank you.
16 Now, you indicated that Exhibit 584 was signed by
17 you considerably after the date which appears on there,
18 which is January 3rd, 1990; is that correct?
19 A Correct.
20 Q In signing that, you did not correct the date as you
21 had done with the compensation agreement; is that correct?
22 A That's true.
23 Q Was it that you didn't know this or it just didn't
24 seem particularly important to you?
25 A Well, first of all, it didn't catch my attention
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
585
Grossman-cross/Trabulus
1 because the date was already filled in.
2 Q Okay.
3 A Whereas opposed to the other one, there were three
4 parts to the date, two of wh ich was left blank and one of
5 which was incorrect. So I completed the blank parts and
6 corrected the one that was incorrect.
7 As far as this agreement is concerned, I can't
8 answer you as to whether I didn't notice or as to whether
9 I didn't think it was important.
10 Q Okay.
11 Earlier than that had you signed other documents
12 pertaining to your investment, and your wife's investment
13 in Who's Who Worldwide Registry, Inc.?
14 THE COURT: Can we call it Who's Who? I know
15 there are other Who's Whos, but let's shorten it up.
16 MR. TRABULUS: Sure. Thank you, your Honor.
17 Q Had you signed any other document with respect to
18 Who's Who that was dated differently from the date that
19 you signed them? Do you recall?
20 A After I had seen the number that I had signed that
21 were incorrectly date, I can assume I must have missed the
22 date on some of the others as well.
23 Q Dr. Grossman, I would like to direct your attention
24 to Exhibits 579, 580 and 581.
25 Take a look at 579 first.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
586
Grossman-cross/Trabulus
1 A You can help me by identifying what they are.
2 Q Sure. 579 is the stock purchase agreement. There
3 should be three together, stock purchase agreement, loan
4 agreement, and the third one is an assignment agreement.
5 A I have 78 and 77. I am looking for 79. I have 580.
6 Q Hold on to 580.
7 (Mr. Trabulus confers with the witness.)
8 Q Dr. Grossman, can you read the -- withdrawn.
9 I am going to read the first portion of the first
10 paragraph of 579. You can read along with me.
11 Agreement made as of the 1st day of August, 1990,
12 by and between the Richard C. Grossman DMD, Inc. defined
13 benefi t pension plan. And I will not read the rest of it.
14 I am going to call your attention to the phrase,
15 as of the 1st day of August, 1990.
16 Was that day, the 1st day of August, 1990, the
17 actual day on which this was signed? Do you know?
18 A I don't think so.
19 Q There is no date on that, is there, elsewhere on this
20 particular exhibit?
21 A That's correct.
22 Q Do you know whether it was before or after that it
23 was actually signed?
24 A It was signed after.
25 Q Now, in signing it after, you didn't understand that
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
587
Grossman-cross/Trabulus
1 there was anything wrong with doing that; is that correct?
2 A I still don't understand that there is anything
3 wrong.
4 Q I am not saying it was. I just want to make it clear
5 that when you did that, you didn't a ccomplish anything
6 wrong in your mind?
7 A Of course.
8 Q Now, let's go to the next one, where it is called the
9 loan agreement, and that's 580.
10 Again, I am going to read a portion of the first
11 paragraph, and you can read along with me.
12 Agreement made as of the 1st day of August, 1990
13 by and between the Grossman family trust; and then in
14 handwriting with an arrow and a line pointing to it, it
15 says: Dated 9/26/89, and there are some initials there.
16 Do you see what I am talking about?
17 A I do.
18 Q Doctor, are those your initials there?
19 A They are. But that is not necessarily the day the
20 agreement was signed.
21 Q That's the date the trust was dated --
22 A The date and establishment of the trust.
23 Q Okay.
24 So, this agreement also is not dated as such --
25 withdrawn.
HARRY RAPAPO RT, CSR, CP, CM OFFICIAL COURT REPORTER
588
Grossman-cross/Trabulus
1 Go to the last page. It says the Grossman family
2 trust, dated 9/26/89, same reference?
3 A Same reference, my initials.
4 Q So this agreement is also dated as of August 1st,
5 1990; is that right?
6 A Yes.
7 Q But it was signed at some different point later?
8 A Yes.
9 Q It doesn't say the date that it was signed on that?
10 A That's correct.
11 Q And the last one, the assignment agreement, that's
12 the agreement whereby the trust transferred some shares to
13 your pension plan, correct?
14 A Correct.
15 Q And that's dated as of September, 1990, September
16 4th?
17 A Right.
18 Q And does that mean it was signed later than that
19 date?
20 A I presume as much, because all three of these were
21 probably all typed before, and typed o n the date that it
22 says on the agreement. And I didn't sign it until after
23 it had been sent to me.
24 Q So, basically these were documents which were signed
25 after the fact?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
589
Grossman-cross/Trabulus
1 A That's correct.
2 Q And there was certainly nothing improper intended by
3 doing so; is that correct?
4 A Absolutely right.
5 Q Doctor, when you first -- you and your wife first
6 invested in Who's Who, did you discuss with anybody the
7 total number of shares that were going to be issued?
8 A There really was no discussion about shares. The
9 only person we would discuss it with was Mr. Gordon.
10 Q And the discussion concerned percentages rather than
11 shares?
12 A Correct.
13 Q In other words -- well, withdrawn.
14 MR. TRABULUS: Your Honor, so as to not block any
15 views, I will put it here. I don't know if the jury can
16 see it.
17 THE COURT: You don't have to worry about
18 blocking my view. I want the jury to be able to see it.
19 MR. TRABULUS: Okay.
20 Q Dr. Grossman, I am going to refer you to
21 Exhibits 585 -- Exhibit 585 and Exhibit 586. Of course I
22 have before us for the jury to look at, 585-A, which is a
23 blowup of the two of them.
24 Now, when did you receive this in relation to the
25 compensation agreement?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
590
Grossman-cross/Trabulus
1 A I can't tell you exactly.
2 Q Do you know if it was around the same time, before or
3 after?
4 A Is the compensation agreement the one --
5 Q I think it is 593.
6 A I see it. I have it before me now.
7 Q That's the one you testified you put the date on
8 yourself in January of 1993?
9 A I believe it was afterward.
10 Q You think you got these after?
11 A I believe so. I am trusting my recollection.
12 Q So, you are not sure, but that's your best memory?
13 A Yes.
14 Q I believe you said you were antsy, that's the word
15 you used?
16 A Yes.
17 Q Not having received the share certificates for some
18 period of time?
19 A Yes.
20 Q Because you wanted some evidence that you and your
21 wife and your pension plan actually owned a portion of
22 Who's Who; is that correct?
23 A Yes.
24 Q And at that point in time you had already been fully
25 paid back your investment in Who's Who; is that correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
591
Grossman-cross/Trabulus
1 A Yes. But I stopped asking for these once I had
2 gotten paid bac k.
3 Q No criticism of being antsy intended. You received
4 the $125,000 back; is that right?
5 A Yes.
6 Q With 15 percent interest, right?
7 A Yes.
8 Q Early?
9 A Yes, it was early.
10 Q It was ahead of schedule?
11 A It was ahead of schedule.
12 Q And after that you stopped paying as much attention
13 to the documents, because basically your interest was
14 being repaid with the interest?
15 A Yes. And I had no reason to consider about it in the
16 future.
17 Q And that's why after that point in time when you got
18 documents, you would sometimes sign them without paying
19 too much attention; is that fair to say?
20 A That's one of the reasons, yes.
21 Q And other reason is you were busy with things and
22 health problems?
23 A Very severe health problems.
24 Q All right.
25 Now, when you received these, either by FEDEX or
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
592
Grossman-cross/Trabulus
1 whatever, you signed them, is that correct, above the word
2 secretary?
3 A That's correct.
4 Q And did you -- I think you said they were in blank at
5 that point in time?
6 A They were in blank.
7 Q Did that leave you antsy at that point?
8 A Not really.
9 Q Did you call up -- you didn't call up to say, how
10 come it doesn't have our 25 percent on it?
11 A No.
12 Q You didn't do that?
13 A No.
14 Q Okay.
15 When you say that they were in blank, were the
16 names like Joyce Grossman, or Richard Grossman, DMD, Inc.
17 defined pension plan, was that blank, too?
18 A Everything was basically blank.
19 Q Everything that was handwritten?
20 A Everything that is printed on there by hand was not
21 there.
22 Q But the 200 shares without par value, that was not
23 blank, was it?
24 A That's not printed by hand.
25 Q Okay, so that was there.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
593
Grossman-cross/Trabulus
1 Now, eventually you say you saw this at the
2 office of your attorney, Mr. Picard?
3 A Yes.
4 Q And when you say Mr. Picard had told you that
5 Mr. Gordon had been claiming that you and your wife were
6 the trusts -- or the trust, or whatever, owned 100
7 percent?
8 A Yes.
9 Q Now, these two certificates together add up to 100
10 shares, do they not?
11 A That's what they purport to, yes.
12 Q And they list the total number of shares as being
13 200; is that correct?
14 A Yes.
15 Q So that would only be 50 percent of the shares; is
16 that right?
17 A Tha t is correct.
18 Q And that would be consistent with the May 17th
19 letter, the first letter which was sent by Mr. Gordon to
20 you, where the initial proposal was to start out at the
21 very beginning at 50 percent and work down as it was paid
22 off; is that correct?
23 A Yes.
24 Q Now, you mentioned that -- did you mention that you
25 spoke to some secretary or person at Who's Who concerning
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
594
Grossman-cross/Trabulus
1 what to do with these document?
2 A No. I said, as was customary with everything that
3 was sent to me, a note was stuck on to it, with one of
4 these sticky post-it notes indicating they desired my
5 signature and to return it.
6 Q You know Mr. Gordon's handwriting, do you not?
7 A It is an interesting handwriting, and I think I know
8 it, yes.
9 Q And this handwritten portion here is not in
10 Mr. Gordon's handwriting, is it?
11 A It is not handwriting. That's printing. And I don't
12 recognize his printing.
13 Q And you don't recognize what his printing looks
14 like --
15 A That's correct.
16 Q -- one way or another, all right.
17 So, the number of shares here, leaving aside --
18 withdrawn.
19 I think you indicated that Joyce Grossman never
20 owned shares as such, but the trust, the family trust did;
21 is that correct?
22 A Yes.
23 Q And Joyce Grossman was a trustee of the family trust;
24 is that correct?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
595
Grossman-cross/Trabulus
1 Q And so a share certificate could be issued to her
2 because she was a trustee; is that fair to say? Even if
3 it didn't say as trustee?
4 A Yes. Of course, normally one would expect it to be
5 in both our names as trustees.
6 Q Okay.
7 But either trustee, it could be issued to either
8 one, or both.
9 Now, the -- did you ask Mr. Picard -- withdrawn.
10 Did you discuss with Mr. Picard why
11 Mr. Grossman -- Mr. Gordon, I'm sorry, was claiming
12 ownership for the full amount, and the shares would show
13 that you and your wife and the trust together owned 50
14 percent? Did that subject come up at all between you and
15 Mr. Picard?
16 A I don't recall if it came up in that fashion, because
17 we were -- there was concern that it wasn't in the form in
18 which we had expected it to be, that is, 25 percent of the
19 company.
20 Q Did Mr. Picard tell you that Mr. Gordon at the same
21 time that he may have been saying that you and your wife
22 together owned all the shares, was also say ing for all
23 intents and purposes was the owner, he was telling that to
24 Mr. Picard? Did Mr. Gordon tell you that?
25 A No, he did not say that.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
596
Grossman-cross/Trabulus
1 Q This ownership reflected on this 50 percent, that
2 could be consistent with a secretary looking at the wrong
3 agreement, the May 17th letter instead of the May 23rd
4 letter, it would be consistent with that, would it not?
5 A It's possible.
6 MR. TRABULUS: I just want to get this out of the
7 way.
8 (Whereupon, at this time there was a pause in the
9 proceedings.)
10 Q Dr. Grossman, back in I guess February of 1997, you
11 testified before the grand jury, did you not?
12 A I did.
13 Q And Mr. White asked you very much the same questions
14 that he asked you today; is that correct? Similar?
15 A Similar kinds.
16 Q And at that point in time you and your wife were
17 being sued by the bankruptcy trustee; is that correct?
18 A Yes.
19 Q And at that point in time that lawsuit had not been
20 resolved; is that correct?
21 A That's quite correct.
22 Q And I think you testified in response to a question
23 by Mr. White that the bankruptcy trustee was seeking to
24 recover three and a half million dollars from you and your
25 wife; is that correct?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
597
Grossman-cross/Trabulus
1 A Yes.
2 Q That's more than you had; is that right?
3 A Quite a bit more than we had.
4 Q Now, the bankruptcy trustee -- withdrawn.
5 Were you familiar with some of the allegations
6 that the bankruptcy trustee made concerning you and your
7 wife?
8 A I suppose, yes.
9 Q Are you aware that one of them was that you and your
10 wife owned all the shares of Who's Who?
11 A Yes.
12 Q And was it your understanding that it would assist
13 the trustee's position in his claim against you and your
14 wife if that were true as opposed to you owning less than
15 that?
16 A I understand that, yes.
17 Q And you understood that at the time?
18 A I didn't think about it, to tell you the truth.
19 Q Now, when you testified before the grand jury and
20 were asked questions concerning share ownership, at that
21 point in time the claim of the trustee against you was
22 still alive; is that right?
23 A Very much so.
24 Q And it would have hurt you in that claim in defending
25 that claim to say that you or your wife, or together at
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
598
Grossman-cross/Trabulus
1 any point, owned 100 percent of the company, would it not?
2 A It would also have been untrue.
3 Q It would have hurt you though, whether true or not,
4 leaving aside the question of whether it was true or not.
5 Just from a legal perspective, isn't it that you were
6 better off as a 25 percent rather than a 100 percent
7 owner?
8 A To tell you the truth, I never thought about it from
9 that point of view.
10 Q I think you mentioned on several occasions you and
11 your wife traveled to New York?
12 A Yes.
13 Q And had you visited any of the facilities of Who's
14 Who?
15 A Yes.
16 Q Or the facilities of Sterling?
17 A Yes.
18 Q What facilities did you visit?
19 A The main offices of both organizations, which I think
20 were their only offices.
21 Q And that would be a Manhattan office for Sterling and
22 a Lake Success office for Who's Who?
23 A Yes.
24 Q Did you go out to dinner with Mr. Gordon in
25 connection with those visits?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
599
Grossman-cross/Trabulus
1 A Yes, we did.
2 Q And were those, as you understood them, business
3 dinners?
4 A It might have been interpreted as such, yes.
5 Q And did you discuss some of the business of Who's Who
6 at the dinners?
7 A Probably.
8 Q Did you ever go to the penthouse apartment that was
9 maintained in New York City?
10 A Yes, we did.
11 Q What were the occasions for going there?
12 A On one of the visits to New York, or maybe two of the
13 visits to New York, we visited the penthouse.
14 Q And --
15 A On one occasion we stayed overnight there, as I
16 recall.
17 Q Okay.
18 Did you ever visit a condominium in Manhasset?
19 A Yes, I did.
20 Q What were the occasions for you visiting there?
21 A On one occasion it was that we were waiting for
22 Mr. Gordon to arrive from another occasion. It was the
23 occasion of the funeral of his son.
24 Q Okay --
25 A It was still under construction at that time. It was
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
600
Grossman-cross/Trabulus
1 not being occupied.
2 Q That was in July of 1993?
3 A I am blocking on the date.
4 Q If I were to tell you that his son died on July 28th,
5 1993, there is evidence in the case as to that, does that
6 mean that you visited in very early August or so?
7 A Exactly.
8 Q And at that point in time, it was still under
9 construction and Mr. Gordon was not living there; is that
10 correct?
11 A That's correct.
12 Q No w, did your wife perform services as an interior
13 decorator in addition to either the penthouse or the
14 Manhasset condominium or both?
15 A She did, yes.
16 Q Let me go back to the monies sent to you in late
17 1992, the two checks, one to you and one to your wife, and
18 you sent back the one to your wife, and had another one
19 made out to you.
20 A Yes.
21 Q All right.
22 Now, when that money was sent to you, were there
23 any strings attached?
24 A No.
25 Q When it came to you Mr. Gordon didn't say, hey, I am
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
601
Grossman-cross/Trabulus
1 giving you this money but I will want it back? That
2 didn't happen on that occasion; is that correct?
3 A That is correct.
4 Q And later on, not that much later on, Mr. Gordon
5 asked if he could have it back; is that correct?
6 A Yes.
7 Q You didn't have to give it to him at that point; is
8 that correct?
9 A No.
10 Q You could have said no?
11 A I had no desire to say no.
12 Q But you could have, and you wouldn't have reached any
13 agreement or understanding you would have had with him; is
14 that correct?
15 A That's correct.
16 Q Was there also a time that Mr. Gordon came to
17 California and visited you, or more than one time?
18 A Several occasions.
19 Q Was there a time when he to your knowledge was
20 interviewing people to work for him?
21 A He was interviewing people, and he was also
22 interested in seeking out locations for office space.
23 Q Did your wife put him in touch with a real estate
24 broker?
25 A She could have.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
602
Grossman-cross/Trabul us
1 Q Were you present when he met with another real estate
2 broker by the name of Darren White?
3 A No.
4 MR. TRABULUS: I am not sure of the spelling of
5 the first name.
6 Q Now, in terms of interviewing people to work there,
7 was he -- did he actually -- are you aware of whether he
8 took out an ad in the newspaper to have people come to
9 have an occasion to be interviewed?
10 A I am not sure of what his practice was at that time.
11 Q Were you present in the area when he actually
12 interviewed anyone?
13 A No.
14 Q Did he come with any employees?
15 A There was one trip that he made where he had two
16 ladies accompanying him. I believe it was two.
17 Q Do you recognize any of them in the courtroom today?
18 Take a look.
19 A It is possible that one of the young ladies is here.
20 I am not sure. Hair dos and colors cha nge from time to
21 time.
22 Q The lady that just started laughing are do you recall
23 if it was her?
24 A As I recall she had red hair or a little different
25 color than she has now.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
603
Grossman-cross/Trabulus
1 Q Aside from that, do you recall that it was her?
2 A Sure.
3 Q We are talking about Ms. Garboski.
4 She was there with another woman, do you remember
5 the name, Ms. Benjamin?
6 A That sounds familiar.
7 Q And they were there working, is that correct, in
8 terms of setting up a possible new branch there?
9 A My understanding, yes.
10 Q And had you discussed with Mr. Gordon the business
11 operations that were being contemplated in California at
12 that point?
13 A Officially, yes.
14 Q And do you remember how long that was before the Reed
15 Elsevier judgment?
16 A I can't tell you, no. Maybe a year, at least some
17 months. I don't know.
18 Q Did the Reed Elsevier judgment, as you understood it,
19 and the going into Chapter 11, or reorganization, did that
20 put all of that on hold, I mean opening up in California?
21 A I don't recall what the reasoning was. But I believe
22 that that certainly would do so.
23 Q Did there come a point after the after the raid, we
24 talked about the raid, when you and your wife had to make
25 a loan to Mr. Gordon or his company for legal fees? Do
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
604
Grossman-cross/Trabulus
1 you recall that?
2 A No.
3 Q Do you recall loaning $15,000 to an attorney, or
4 making a payment that went to an attorney?
5 A No.
6 Q Okay.
7 Do you recall making a $15,000 loan repaid i n the
8 sum of $18,000?
9 A No, I do not.
10 MR. TRABULUS: Bear with me a moment, your
11 Honor?
12 THE COURT: Yes.
13 (Whereupon, at this time there was a pause in the
14 proceedings.)
15 Q Just a couple of more questions.
16 Is it fair to say that your wife, Mr. Gordon's
17 sister, are now estranged?
18 A Fair to say.
19 Q Is it fair to say that you yourself have not spoken
20 to Mr. Gordon, except in the courtroom today in quite some
21 time?
22 A That's correct.
23 MR. TRABULUS: No further questions.
24 THE COURT: Anyone else?
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
605
R. Grossman-cross/Geduldig
1 CROSS-EXAMINATION
2 MR. GEDULDIG:
3 Q Dr. Grossman, I think you testified on direct
4 examination, answering questions to Mr. White, that prior
5 to 1989 , some members of your family, or your wife's
6 family had invested in some projects, business projects
7 that had been carried on by Mr. Gordon; is that right?
8 A Who am I speaking to, sir?
9 Q Who am I?
10 A Yes.
11 Q I am Martin Geduldig, and I represent Ms. Haley, the
12 lady with the black hair.
13 Let me withdraw the last question. You have
14 never seen her, have you?
15 A Not that I recall.
16 Q Well that's who I represent.
17 A Okay.
18 Q Going back to my original question, is it correct
19 that you testified on direct examination that some members
20 of your wife's family or your family, had invested in some
21 business projects put together by Mr. Gordon?
22 A Yes.
23 Q And that happened before this Who's Who project; is
24 that right?
25 A That is correct.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT RE PORTER
606
R. Grossman-cross/Geduldig
1 Q And those family members had made out handsomely on
2 those earlier projects; is that right?
3 A That is our understanding.
4 Q That was in part the motivation for you and your wife
5 investing in this Who's Who project; is that right?
6 A Yes.
7 Q And you had at that point in time known Mr. Gordon
8 for close to 30 years; is that right?
9 A Yes.
10 Q You knew him to be a very bright and able man?
11 A You are asking me a question?
12 Q Yes.
13 A Very much so.
14 Q He was astute, right?
15 A Yes.
16 Q If you told him things he did not forget them, did
17 you?
18 A I never tested him, so I don't know the answer.
19 Q In any event, you and your wife did in time invest in
20 this Who's Who project; is that right?
21 A Yes.
22 Q And I think you testified aga in on direct examination
23 that there were I think two documents that were signed in
24 April of -- I am sorry, in May of '90, which set forth the
25 stock holding arrangement that you and your wife would
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
607
R. Grossman-cross/Geduldig
1 have in Who's Who through your pension plan and your
2 trust; is that right?
3 A Yes.
4 Q Initially the pension plan and trust would own 50
5 percent of the stock in the company; is that right?
6 A That's what Mr. Gordon had indicated that he wanted
7 it to be.
8 Q He prepared that document; is that right?
9 A That's correct.
10 Q And he proposed the 50 percent ownership for the
11 trust and the pension combined; is that right?
12 A Yes.
13 Q And you suggested shortly after that that it didn't
14 have to be 50 percent, it could be 25 p ercent; is that
15 right?
16 A That's correct.
17 Q And he prepared a second document reflecting the
18 second understanding that you had reached; is that right?
19 A Yes.
20 Q And he always understood the terms of these
21 arrangements; is that right?
22 MR. TRABULUS: Objection, your Honor.
23 THE COURT: Sustained.
24 Q There came a point in time after those May of '90
25 documents had been prepared, where you learned that
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
608
R. Grossman-cross/Geduldig
1 Mr. Gordon had testified under oath that through the trust
2 and pension plan, or through your wife's name, or through
3 your name, he represented that you or your family, or your
4 trust or your pension owned 100 percent of the stock in
5 the Who's Who project; is that right?
6 A Yes.
7 Q You knew that was i ncorrect; isn't that correct?
8 A Yes.
9 Q And on two separate occasions you confronted
10 Mr. Gordon, either on the phone or in person about that
11 misrepresentation; is that right?
12 A Yes.
13 Q And he told you he forgot; is that right?
14 A Yes.
15 Q It is the same gentleman whom you assumed to be
16 astute and bright and able; is that right?
17 A Yes.
18 Q When he told you that he forgot that you didn't own
19 100 percent of the stock in the company, did you then
20 believe him to be telling you the truth?
21 MR. TRABULUS: Objection, your Honor.
22 THE COURT: Sustained.
23 Q Did Mr. Gordon misrepresent to you --
24 MR. TRABULUS: Objection.
25 THE COURT: I want to hear the question.
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1 MR. TRABULUS: Sorry.
2 THE COURT: It might be better than you think,
3 Mr. Trabulus.
4 MR. TRABULUS: I doubt it.
5 Q Did Mr. Gordon misrepresent to you your ownership
6 position in the company?
7 MR. TRABULUS: Objection, your Honor.
8 THE COURT: Overruled.
9 A When?
10 Q At any point in time between 1989 and 1997.
11 A Not to me.
12 Q To who?
13 A According to --
14 MR. TRABULUS: Objection, your Honor.
15 THE COURT: Do you have personal knowledge of any
16 misrepresentation by Mr. Gordon of your interest,
17 vis a vis his interest, in this corporation?
18 THE WITNESS: Only in terms of transcripts I have
19 read.
20 THE COURT: Transcripts you have read of other
21 proceedings?
22 THE WITNESS: Bankruptcy proceedings.
23 THE COURT: All right.
24 Q You can answer the question.
25 A Do you want the repeat the question? I thought I
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 just did. I answered the judge's question, I am sorry, do
2 you want to repeat your question, sir?
3 MR. GEDULDIG: May I ask the reporter to read it
4 back?
5 THE COURT: This time, yes. From now on,
6 remember.
7 (Whereupon, the court reporter reads the
8 requested material.)
9 Q To who? If not to you, to who?
10 A In the bankruptcy proceedings.
11 Q Okay.
12 Did he tell you that he was going to make those
13 misrepresentations?
14 A No.
15 MR. TRABULUS: Objection, your Honor.
16 THE COURT: Overruled.
17 Q You would never to your knowledge -- withdrawn.
18 Am I correct in saying that to your knowledge
19 during the time that the Who's Who project was in
20 existence, you did not know yourself to be a member of th e
21 board of directors of the company; is that right?
22 A That's fair to say, yes.
23 Q But there were documents prepared which reflect --
24 withdrawn again.
25 You had since learned that there were documents
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1 prepared which listed you as a member of the board of
2 directors; isn't that correct?
3 A That is correct.
4 Q You were never told by Mr. Gordon, were you, that you
5 were named a member of the board of directors; is that
6 right?
7 A That's correct.
8 Q Your wife was also named as a board of director -- a
9 member of the board of directors in some documents; is
10 that right?
11 A You know, I am not sure.
12 Q Okay.
13 There was a document prepared in 1994, I believe,
14 with regard to a board of directors mee ting, which was
15 held with regard to the filing of a bankruptcy petition;
16 did you see that?
17 A I saw it this morning here, too.
18 Q And that document reports that you were present for
19 that March of 1994 board of directors meeting regarding
20 the bankruptcy petition; is that right?
21 A Yes.
22 Q In fact, you were not present either by phone or in
23 person for that March 1994 board of directors meeting; is
24 that right?
25 A I believe that's the case, yes.
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1 Q Would it be -- withdrawn.
2 When for the first time -- approximately when for
3 the first time did you learn that the Who's Who project
4 was filing for bankruptcy?
5 A I believe it was in late 1995.
6 Q Would it be fair to say that you were kept in the
7 dark r egarding the filing of that petition for at least a
8 number of months, if not a year or more?
9 MR. TRABULUS: Objection.
10 THE COURT: What ground?
11 MR. TRABULUS: Kept in the dark.
12 THE COURT: I understand what that means. I
13 assume the jury does, too. I imagine they even use
14 language like that from time to time.
15 Overruled.
16 Q If you could answer the question.
17 A I don't know that it was intentionally kept in the
18 dark. I just never got the message. I was never informed
19 of it.
20 Q By whom?
21 A I don't know, however I should have been informed. I
22 wasn't informed until I started receiving legal documents.
23 Q Who is the only person who could have informed you
24 about that that you were dealing within Who's Who?
25 A It could have been Mr. Gordon. It could have been
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1 one of the office ladies who I spoke to rarely.
2 Q An office lady would have told you about the filing
3 of bankruptcy petitions for the Who's Who project?
4 A I don't know who it would have been.
5 Q Can you name an office lady that you might have
6 spoken to about that subject?
7 A On occasion I spoke to a Liz.
8 Q Liz who?
9 A I don't know her last name offhand. If I heard it I
10 might remember it.
11 Q But you certainly didn't speak with Mr. Gordon for a
12 year or more regarding this bankruptcy petition until you
13 learned about it?
14 A That's right.
15 Q Who did you learn about it from first?
16 A One of two law firms, and I don't remember which
17 one. It was either Backenworth and Grossman, no
18 relationship to myself.
19 THE COURT: B A C K E N R O T H, Backenworth ?
20 THE WITNESS: Correct, sir.
21 The other firm was Solomon, Green and Ostrow.
22 They were the attorneys for the bankruptcy trustee.
23 Q So, I would be correct in saying that you did not
24 first learn about the filing of the bankruptcy petition
25 from Mr. Gordon?
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1 A You know, he could have mentioned it to me, but under
2 the circumstances that I didn't realize the significance
3 of it.
4 Q He certainly didn't mention it to you in a way that
5 would have aroused any interest by you?
6 A That's correct.
7 Q In fact, you testified on cross-examination that many
8 of the things you spoke about with Mr. Gordon regarding
9 Who's Who occurred after the fact; isn't that right?
10 A Yes.
11 Q Am I correct in saying that Mr. Gordon did not ke ep
12 you apprised of the operations of Who's Who in any kind of
13 a regular basis?
14 A That's true.
15 I would like to amend an answer to a prior
16 question, if I might.
17 There was one time when he did mention that there
18 were some legal proceedings afoot. And I asked him
19 whether or not there was any possibility of my wife and I
20 being in jeopardy in any way; and he assured us that we
21 need not be concerned.
22 Q And that statement was wholly inaccurate; is that
23 right?
24 MR. TRABULUS: Objection, your Honor.
25 THE COURT: Overruled.
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1 Q That statement made by Mr. Gordon that you shouldn't
2 have any concerns was inaccurate?
3 A I don't believe that was his intention, but it turned
4 out to be the case.
5 MR. GEDULDIG: I have no further questions.
6
7 CROSS-EXAMINATION
8 MR. WALLENSTEIN:
9 Q Good afternoon, Dr. Grossman.
10 A Good afternoon.
11 Q My name is John Wallenstein, and I represent
12 Mr. Reffsin. Have you ever met Mr. Reffsin?
13 A No, I have not.
14 Q Have you heard his name other than your testimony in
15 the grand jury?
16 A Yes. I also spoke to him on one occasion.
17 Q Do you know when the occasion was?
18 A On an occasion when we had a difference of opinion in
19 terms of how the 15 percent interest was going to be --
20 whether it was 15 percent on the entire balance until it
21 was paid off, or 15 percent on the declining balance.
22 Q The difference of opinion was between you and
23 Mr. Reffsin?
24 A Yes.
25 Q And you had a telephone conversation with him?
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1 A Yes.
2 Q Would it be fair to say that that was sometime in
3 March of 1992?
4 A No. I think it was -- it could be anywheres from
5 April or maybe even March, until a little bit later on,
6 after the first investments began to be made.
7 Q And was that difference of opinion resolved?
8 A Yes.
9 I believe Mr. Gordon told him to do it the way I
10 wanted it to be done.
11 Q You don't know that for a fact, do you?
12 A I think he indicated to me that that is the way he
13 was resolving it.
14 Q Now, you indicated to me here that on a number of
15 occasions you signed documents in blank, the stock
16 certificates that have been referred to and some of these
17 other documents, correct?
18 A Yes.
19 Q And some in blank and some without reading them,
20 correct?
21 A Or not too carefully, yes.
22 Q You were at the time a trustee of a pension plan; is
23 that correct?
24 A Yes.
25 Q And the trustee of a family trust as well?
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1 A Yes.
2 Q Can you give us the approximate idea of the value in
3 the trust at that time, talking about 1992.
4 A The family trust had about $300,000. It has gotten
5 $500,000 in it now.
6 MR. WALLENSTEIN: I would have move to strike the
7 latter part of the answer as not responsive.
8 THE COURT: Motion granted. After the sum
9 mentioned for what the family trust had, the other part is
10 stricken, and the jury is instructed to disregard it.
11 Listen to the questions, Dr. Grossman, and please
12 answer responsively.
13 Most of these questions will call for a yes or no
14 answer. Please try to answer responsively. If you can't
15 answer yes or no, say so.
16 THE WITNESS: Your Honor, I misunderstood the
17 question, because I thought he said at this time.
18 THE COURT: It is perfectly all right. Don't
19 worry about it.
20 From now on, listen to the questions, and answer
21 responsively as much as you can.
22 Q Dr. Grossman, you indicated earlier that there came a
23 time when you transferred a portion of the shares from the
24 family trust to the pension plan; is that correct?
25 A Yes.
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1 Q And so the net result was that the family trust ended
2 up owning 15 percent of the shares, and the pension plan
3 wound up with ten percent?
4 THE COURT: Wait one minute, you might be right.
5 Mr. Reporter, let's r ead back that question.
6 (Whereupon, the court reporter reads the
7 requested material.)
8 THE COURT: We will give you a shot at it,
9 Dr. Grossman, the one where I struck parts of the answer.
10 I was right the first time. Thank you.
11 MR. WALLENSTEIN: All right.
12 I forgot where I was.
13 THE COURT: Don't ask to have the last question
14 re-read, will you?
15 MR. WALLENSTEIN: I am going to try to find it.
16 Q When you transferred the shares from the family trust
17 into the pension plan, the purpose of that was to make
18 your pension plan contribution for that year; is that
19 correct?
20 A Correct.
21 Q Is it fair to say that there was no dollar transfer,
22 but it was simply a bookkeeping entry in order to bring
23 your pension plan in compliance with the tax laws that
24 require a contribution each year?
25 A Strictly a pa per transaction to accomplish that.
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R. Grossman-cross/Wallenstein
1 Q And the purpose of that was to comply with the tax
2 laws; is that correct?
3 A I don't know if there was a requirement to comply
4 with the tax laws. It was just a requirement that made
5 common sense to make a contribution to the pension plan so
6 that it could be earning and putting away deferred
7 monies -- monies with deferred taxes until I took it out.
8 So the more I could put in each year, and I couldn't
9 afford to make a contribution that year, so we took it
10 from family trust funds and put it into the pension plan.
11 Q But you were required to make a contribution, were
12 you not?
13 A I don't know that I am required to make a
14 contribution every year.
15 Q Did you discuss that with your accountant?
16 A No.
17 Q Did you have an accountant, by the way?
18 A Yes, I did.
19 Q Now, you indicated the information you got with
20 respect to companies was from Mr. Gordon, and always was
21 sketchy information and after the fact; is that true?
22 A That's the case.
23 Q Did you question him on it?
24 A I had no reason to question him.
25 Q In fact, you had no reason to doubt that he was
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R. Grossman-cross/Wallenstein
1 running a straight business, and you were going to get
2 whatever it was that you were entitled to; is that
3 correct?
4 A Absolutely. He had always been very straight with
5 us.
6 Q Would it be fair to say that you relied on Mr. Gordon
7 to provide you with information with respect to what the
8 companies were doing at a particular time?
9 A If I even needed to know.
10 Q Would you tell us on how many occasions you had been
11 asked to sign documents for Who's Who Worldwide?
12 A Probably a hundred times.
13 Q During what period of time?
14 A During the first few years of its existence.
15 Q Would it be say from 1990 to 1993?
16 A Late 1990 through '93, perhaps -- I don't even know
17 if it went into '94.
18 Q Okay.
19 Did you ever read any of those documents you were
20 asked to sign?
21 A Yes.
22 Q Of the hundred or so you were asked to sign, roughly
23 what percentage would you say you read in detail prior to
24 signing it?
25 A I can't give you percentages. I can tell you the
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R. Grossman-cross/Wallenstein
1 ones that came through during the time that we still were
2 being paid back, and when I didn't have family emergencies
3 to be concerned with or that exhausted me, I was paying
4 attention to the documents.
5 Q While he owed you money you were reading things
6 carefully and once he didn't owe you money you didn't care
7 what he wrote down on the papers; is that it?
8 A Not that I didn't care. He demonstrated I could
9 trust what he was doing. He never gave us reason to doubt
10 his actions, so I didn't feel I had to be on guard. He
11 was like my brother. You know, you trust your brother.
12 You don't expect he is going to put something in front of
13 you that you will have to be concerned about.
14 Q Maybe your brother.
15 A I am not a lawyer, so --
16 Q You recall that -- withdrawn.
17 Did you determine at sometime that Who's Who was
18 making loans to Mr. Gordon for his personal use?
19 A Yes.
20 Q Do you know when you fou nd out?
21 A I think after the bankruptcy proceedings started and
22 I became aware of them.
23 Q How did you find out?
24 A I read it in a transcript.
25 Q A transcript from what?
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1 A From one of the bankruptcy proceedings.
2 Q Had you prior to that time ever made any inquiry into
3 the financial position of the company?
4 A I had no need to.
5 Q You were getting your money?
6 A He also was telling me he was doing well or not doing
7 well from time to time.
8 Q You never asked to look at the books though?
9 A I never looked at the books.
10 Q You were in fact a signatory on several bank
11 accounts?
12 A I was.
13 Q Do you know how many?
14 A No.
15 Q Did you ever sign a check?
16 A Never.
1 7 Q After you saw the transcript in the bankruptcy case
18 and learned that the company had been making loans to
19 Mr. Gordon, did you question him?
20 A Briefly on one occasion. He explained the nature of
21 that account that had been mentioned earlier today.
22 Q That would be the loans and exchange account?
23 A Yes.
24 Q And that was sufficient for you, and it sounds like a
25 rational explanation?
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R. Grossman-cross/Wallenstein
1 A Yes.
2 MR. WALLENSTEIN: I have no further questions.
3 Thank you, Doctor.
4 THE COURT: Mr. White.
5 MR. WHITE: Yes, sir.
6
7 REDIRECT EXAMINATION
8 BY MR. WHITE:
9 Q Dr. Grossman, when you had the conversation with
10 Mr. Gordon regarding the loan and exchange account --
11 A Yes.
12 Q -- can you tell us, w hat did he say, if anything
13 would happen at the end of the year with respect to the
14 expenses that the company had paid for?
15 A The understanding I got was that the amounts expended
16 would be exchanged -- would serve in lieu of that amount
17 of dollars in terms of income. That was at least the
18 understanding I received from the conversation.
19 Q Let me give you an example.
20 If someone's salary was $100,000 during the
21 course of the year, and the company had expended $10,000
22 on their personal expense, how much would they receive in
23 salary?
24 MR. JENKS: Objection.
25 MR. WALLENSTEIN: Objection.
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R. Grossman-redirect/White
1 THE COURT: Sustained.
2 We are not interested in his opinion in financial
3 matters. We are interested in the facts from this case.
4 MR. WHITE: Your Honor, I am trying to figure out
5 what was explained to Dr. Grossman by Mr. Gordon.
6 THE COURT: Well, ask him.
7 Q Did Mr. Gordon explain to you how it would work with
8 respect to his expenses and his salary at the end of the
9 year?
10 A Not in detail.
11 Q Tell us what he said?
12 A All I can tell you is the understanding I received
13 and processed in my own mind, and that was that dollars
14 that --
15 MR. WALLENSTEIN: Objection.
16 THE COURT: Is this what he told you?
17 THE WITNESS: I don't remember exactly what he
18 told you. All I can recall at this point is how I
19 perceived it.
20 THE COURT: You remember substantially what he
21 told you, in substance, if not in exact words?
22 THE WITNESS: That it was in fact an exchange
23 account, and the monies he would receive would be
24 decreased by t he amount that was expended in the form of
25 those loans.
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R. Grossman-redirect/White
1 Q Now, in answer to questions by Mr. Trabulus, you said
2 that you and your wife are estranged from Mr. Gordon
3 currently.
4 A I embraced him today at his suggestion. We don't
5 speak.
6 Q And why is it? Why is that the case?
7 MR. TRABULUS: Objection, your Honor.
8 THE COURT: Overruled.
9 MR. TRABULUS: Your Honor, may we approach? I
10 think there is something here that should be addressed.
11 THE COURT: All right. Come up.
12
13 (Whereupon, at this time the following took place
14 at the sidebar.)
15 MR. TRABULUS: Your Honor, I believe the witness
16 ultimately settled with the bankruptcy trustee in that
17 litigation. I don't know the terms of the settlement.
18 The witness paid or is obligated to pay $300,000. In
19 addition he incurred substantial legal fees.
20 Now, the fact of that settlement may very well be
21 part of the reason for the estrangement.
22 THE COURT: That could do it, Mr. Trabulus. It
23 could be a heck of a lot less than that, too.
24 MR. TRABULUS: I agree.
25 THE COURT: In families it could be a couple of
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R. Grossman-redirect/White
1 thousand dollars.
2 MR. TRABULUS: Your Honor, I would like to pay a
3 couple of thousand to a trustee.
4 The end result could be something to suggest to
5 the jury that something was wrong that happened vis a vis
6 the bankruptcy trustee that could be prejudicial. That's
7 my concern. I don't know what his answer might be. I
8 have not spoken to this man.
9 THE COURT: It appea rs to me if he has a feeling
10 against your client it would be a bias you would want to
11 bring up. But if you don't --
12 MR. TRABULUS: I brought it up to the extent I
13 wanted to. But we would then get into something else.
14 THE COURT: I don't think it is fruitful, we
15 should perhaps stay away from it.
16 MR. WHITE: Your Honor, Mr. Trabulus suggested a
17 bias on the part of the witness and suggested he is
18 estranged. He can't go only so far. The witness ought to
19 have an opportunity to explain why. He opened the door.
20 It makes no sense.
21 Mr. Trabulus is leaving it there that the witness
22 is estranged and has a motive to lie, and he can't explain
23 how it is?
24 THE COURT: That's exactly how I will leave it.
25 This jury understands this whole thing is troubling. My
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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R. Grossman-redirect/White
1 goodness, here he was dragged into a bankruptcy, he is
2 threatened perhaps with criminal prosecution. He has
3 immunity given to him. It all sounds awful to this jury.
4 Why shouldn't he be mad, Mr. White?
5 MR. WHITE: Why can't the witness explain that,
6 your Honor?
7 THE COURT: I will not let him explain any more.
8 We will not get into the $300,000.
9 MR. WHITE: All right.
10 THE COURT: You should not want me to get into
11 that either.
12 MR. WHITE: I wasn't going to. And if you
13 remember, I didn't raise it on direct for just that
14 purpose.
15 THE COURT: All right. Leave it alone.
16 MR. WHITE: Okay.
17
18 (Whereupon, at this time the following takes
19 place in open court.)
20 Q Dr. Grossman, if you take a look at Exhibits 585 and
21 586, those are the Who's Who Worldwide stock certificates;
22 is that correct?
23 A Yes.
24 Q Mr. Trabulus indicated it says here 200 shares
25 without par value; is that correct?
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1 A Yes.
2 Q 585 and 586, when you add them up equals how many
3 shares?
4 A 100.
5 Q Now, do these stock certificates say anywhere that
6 200 shares of this company were actually issued?
7 A No.
8 Q If 100 shares were all that were issued, what
9 percentage of ownership would these two certificates say
10 that you and your family owned?
11 MR. TRABULUS: Objection, your Honor.
12 THE COURT: Overruled.
13 THE WITNESS: 100.
14 THE COURT: 100 percent?
15 THE WITNESS: 100 shares, your Honor.
16 Q Let me repeat the question.
17 If in fact only 100 shares had been issued, what
18 percentage of ownership would these reflect that you
19 owned?
20 A 100 percent.
21 Q Now, if you can take a look at Exhibit 577, that is
22 dated May 17th, 1990; is that right?
23 A Yes, it is.
24 Q And that's -- is it correct that that is the initial
25 letter, not your final agreement with Mr. Gordon?
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1 A It is correct.
2 Q And that is the one that preliminarily said that you
3 would own 50 percent?
4 A Right.
5 Q And the letter that followed that is dated what?
6 A The 23rd of May, 1990.
7 Q And in-between those two letters, had you had any
8 contacts with Mr. Gordon?
9 A Just a phone conversation.
10 Q Where you said what?
11 A That since it was going -- the ownership was going to
12 be reduced grad ually from 50 percent down to 25 percent,
13 it didn't seem to make sense to be horsing around with
14 reducing percentages, and we ought to just call it 25
15 percent right off the bat.
16 Q Were the terms of those May 17th, 1990 letters ever
17 effective?
18 A The May 17th?
19 Q Yes.
20 A The 50 percent equity was never effective.
21 Q And was that superseded a week later in the next
22 letter?
23 A That is correct.
24 Q Now, Dr. Grossman, if you can look at this bankruptcy
25 petition, first look at the lower left-hand corner, the
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1 list of equity security holders.
2 A Yes.
3 Q Does that indicate that you own -- that you and your
4 family own 100 shares or 100 percent of the company?
5 A 100 percent.
6 Q And look at th e page that is in the top right-hand
7 corner of Exhibit 610-B, does that indicate that you and
8 your family own 100 shares or 100 percent of the company?
9 A 100 percent.
10 Q Dr. Grossman, you recounted when a postal inspector
11 served a subpoena at your home in Los Angeles; do you
12 recall that?
13 A Very well. I would never forget it.
14 Q When the postal inspector was there to serve the
15 subpoena, did your wife indicate to him that she would
16 like to speak to him about the case?
17 A No. She didn't indicate that. This was after I had
18 invited him and his associates into the house, so we
19 didn't all have to stand out in the rain. My wife started
20 speaking to him. And he told her in a rather nasty way
21 that she shouldn't be speaking to him, without an attorney
22 present.
23 Q So, it is your recollection that he cut her off?
24 A He certainly did.
25 Q And he indicated to her that it wasn't a good idea
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1 for her to be speaking to him; is that correct?
2 A He didn't do it in a rather civil way. And she
3 wasn't speaking to him about anything substantive about
4 the case either.
5 Q But, in any event, he told her that she should speak
6 to an attorney; is that correct?
7 A He told her that she should speak through an
8 attorney.
9 Q Now, do you know -- are you aware of the process by
10 which the government came to apply to the Court for an
11 immunity order for you and your wife?
12 A It is all kind of hazy at this point.
13 Q Well, after you received a subpoena to testify before
14 the grand jury, did your attorney contact the government
15 and offer to have you come in for a n interview?
16 MR. JENKS: Objection, objection.
17 THE COURT: Sustained.
18 Q Prior to the time you testified before the grand
19 jury, did you meet with the government?
20 A Yes.
21 Q In their office?
22 MR. JENKS: Objection, objection.
23 THE COURT: Overruled.
24 A Yes.
25 Q And was that at the suggestion of your attorney?
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1 MR. JENKS: Objection.
2 THE COURT: Sustained.
3 Q Did you go to the U.S. Attorney's Office for that
4 interview voluntarily?
5 A Yes, we did. Because our attorney indicated to us
6 that since we had nothing to hide we ought to explain our
7 situation so that we would be not regarded as defendants
8 in the case.
9 Q And from that point forward, has anyone at all from
10 the government intim idated or threatened you?
11 MR. JENKS: Objection.
12 THE COURT: Overruled.
13 A Not from that time.
14 Q During that time you have dealt with myself; is that
15 correct?
16 A Yes.
17 Q You have dealt with Special Agent Jordan; is that
18 correct?
19 A Yes.
20 Q And have you or your wife ever been treated with any
21 disrespect or discourtesy by either myself or
22 Special Agent Jordan?
23 A No. Quite the contrary.
24 When I spoke earlier about treatment by the
25 government by anybody from the government, I was not
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1 painting the government with a broad brush. I was
2 speaking only about a particular representative and his
3 associate who came to our home that evening and their
4 tactics.
5 Q If you can look at Exhibits 579, 580, 591, which are
6 the August, 1990 agreements.
7 A Yes, sir.
8 Q Now, Mr. Trabulus read to you the first line of each
9 one. It says: An agreement as of August 1st, 1990; do
10 you see that?
11 A Yes, I do.
12 Q And you indicated to him that they were signed after
13 August 1st, 1990; is that right?
14 A Yes.
15 Q And --
16 A That was the best of my recollection. I thought they
17 had been prepared on that date, or approximately on that
18 date. And obviously then they were mailed to me to be
19 signed, and I would have signed them afterwards.
20 Q Can you give us an estimate as best as you can recall
21 how much after August 1st, 1990, they were signed?
22 A Oh, probably within days.
23 Q So, was it just as long as it took to send them to
24 you by mail?
25 A I am not sure. It could have been a month maybe.
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1 But I don't think it was interminably long. But as long
2 as it took to get the stock certificates.
3 Q It wasn't a year or two or something like that?
4 A That's correct.
5 It required a certain amount of time to be
6 drafted by their attorney, Mr. Rabino, I think was his
7 name.
8 Q Now, do you recall when it was that you visited the
9 penthouse in Manhattan?
10 A Not precisely.
11 Q Can you recollect what year it was?
12 A It was after the decorating process had been
13 completed by one of my wife's associates. What year that
14 would be, I don't know.
15 Q Now, you indicated in response to Mr. Geduldig's
16 questions that you learned of the bankruptcy from one of
17 two law firms; is that right?
18 A I got the heart of the issue f rom them, right.
19 Q And one of them was Backenworth and Grossman?
20 A Yes.
21 Q And tell us who Backenworth and Grossman were?
22 A They were apparently --
23 MR. GEDULDIG: I am going to object, Judge.
24 THE COURT: Overruled.
25 MR. GEDULDIG: He says apparently.
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1 THE COURT: Do you have any personal knowledge of
2 who they were?
3 THE WITNESS: I am sorry. It was a loose
4 response on my part.
5 They were representing Mr. Gordon in the
6 bankruptcy proceedings at that time.
7 Q Were they also representing you?
8 A They were representing me as well.
9 Q Do you know how they came to be representing you as
10 well as Mr. Gordon?
11 A I believe Mr. Gordon asked that they include us in
12 the -- in their activities of defen se.
13 Q Eventually you hired Mr. Picard to represent you; is
14 that correct?
15 A There came a time when it became necessary to have
16 our own bankruptcy attorney.
17 At one point Mr. Gordon suggested that we need
18 our own attorney. And that was I think on the occasion
19 when the criminal attorney indicated that there was a
20 conflict of interest. And then we hired our own attorney,
21 and that was Mr. Gravante.
22 THE COURT: Who?
23 THE WITNESS: G R A V A N T -- I don't remember
24 if it is I. Nicholas Gravante.
25 MR. WHITE: E is the last letter.
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1 THE COURT: All right.
2 A And since he is not a bankruptcy attorney we then
3 subsequently had to make arrangements in New York State
4 for an attorney to handle that aspects of the cas e for us.
5 Q Dr. Grossman, let me show you
6 Government's Exhibit 807 for Identification.
7 (Handed to the witness.)
8 Q Do you recognize what that is?
9 A Yes.
10 Q What is it?
11 A It is the statement of immunity against
12 self-incrimination.
13 Q That applies to you?
14 A Yes, it does.
15 MR. WHITE: Your Honor, the government offers
16 Exhibit 807.
17 THE COURT: Any objection?
18 MR. TRABULUS: No objection.
19 THE COURT: Government's Exhibit 807 in
20 evidence.
21 (Government's Exhibit 807 received in evidence.)
22 MR. WHITE: Your Honor, may I have one moment?
23 THE COURT: Sure.
24 (Whereupon, at this time there was a pause in the
25 proceedings.)
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1 MR. WHITE: Your Honor, I have no further
2 questions.
3 THE COURT: Anything else?
4 MR. TRABULUS: Yes, I do, your Honor.
5
6 RECROSS-EXAMINATION
7 BY MR. TRABULUS:
8 Q Dr. Grossman, when you made a reference to
9 Mr. Gordon's criminal attorney who spoke to you and made a
10 recommendation to get another attorney, that was not me,
11 was it?
12 A No. As a matter of fact, I never spoke to that
13 attorney. Mr. Gordon himself made the recommendation to
14 me.
15 Q Okay.
16 In fact, you and I had never spoken except today
17 on the record; is that correct?
18 A That's correct.
19 Q And we never met before; is that correct?
20 A That's correct.
21 Q Now, you mentioned that you were told by Mr. Gordon
22 at one point that there was a legal proceeding afoot, and
23 you got assurance from him that you had nothing to be
24 concerned about at that time?
25 A That's correct.
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1 Q And do you know whether that legal proceeding was the
2 Reed lawsuit against the companies, against Who's Who?
3 A It probably was.
4 Q In fact, you were not being sued in that; is that
5 right?
6 A That's so.
7 Q Now, you were only sued in the bankruptcy proceeding
8 by the trustee; is that correct?
9 A Yes.
10 Q That started quite a bit after the bankruptcy
11 proceeding had started; is that right?
12 A Yes.
13 Q It was a separate proceeding within the bankruptcy
14 proceeding that took place more than a year after the
15 bankruptcy proceeding had started; is that right?
16 A That's true.
17 Q You indicated there were about 100 different times
18 that you signed documents for Who's Who, and tha t after a
19 certain point in time you generally didn't pay that much
20 attention to them?
21 A It was beginning to get rather tiring, and I had
22 other things that were rather pressing. I had no reason
23 to be concerned about it and I didn't pay that much
24 attention.
25 Q At least one of the things you signed indicate you
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1 were a director, or at least you had not noticed that?
2 A That's correct.
3 Q Now, many of the things that you signed were for
4 banks, or in connection with credit card accounts?
5 A That's correct.
6 Q And I think you indicated earlier that at least your
7 own credit was on the line at one point?
8 A Not that it was on the line. I don't know what that
9 means, really. But they were checking to see if there was
10 enough there, that there was something substantial, I
11 guess.
12 Q When you were signing the documents for the banks or
13 in connection with the credit cards, did you understand
14 why it was that you were being called upon to sign?
15 A I had an understanding of what the reasons were, yes.
16 Q And did you understand that that grew out of your
17 relationship to Who's Who?
18 A It was my understanding that Mr. Gordon wanted a
19 family person, or several of us, to be involved in case
20 something were to happen to him, so that the business
21 could be carried forth and salaries of the employees could
22 be paid, and the business could be dissolved or closed
23 down or whatever, if something were to happen to him.
24 Q Did you understand also as a result of that you were
25 an officer of Who's Who?
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1 A I didn't understand that at all.
2 Q Did you understand that you had some official
3 relationship to Who's Who that enabled you to sign on a
4 Who's Who account?
5 A I never put two and two together, to tell you the
6 truth.
7 Q Do you know if any of the documents you signed
8 disclosed -- withdrawn.
9 When you signed, your name was signed on the
10 signature line; is that correct?
11 A That's correct.
12 Q Did you ever notice if there was anything under your
13 name indicating a title or anything like that?
14 A There were all different kinds of titles. At one
15 point I was the president. Another point was the
16 treasurer, another point was the chairman. It didn't make
17 any particular rhyme or reason so --
18 Q Did you ever question Mr. Gordon about it?
19 A To tell you the truth I thought it was such an
20 inconsequential matter that it wasn't worth while to
21 bother him.
22 Q He didn't conceal --
23 THE COURT: Are you going to be much longer with
24 this?
25 MR. TRABULUS: A few more minutes, your Honor.
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1 THE COURT: We are going to take a recess.
2 Members of the jury, we will take a ten-minute
3 recess.
4 Please do not discuss the case and keep an open
5 mind, please recess yourselves.
6 (Whereupon, at this time the jury leaves the
7 courtroom.)
8 THE COURT: Dr. Grossman, before you leave, you
9 are lengthening this trial by not responding
10 responsively. Questions are asked calling for a yes or
11 no. You give a five-minute answer. Please answer
12 responsively.
13 In other words,if a ques tion calls for a yes or
14 no, don't give a big explanation. Just yes or no, or I
15 can't answer yes or no, or I don't remember. But no
16 explanation, please.
17 THE WITNESS: Fine.
18 THE COURT: All right?
19 THE WITNESS: Yes.
20 THE COURT: Okay.
21
22 (Whereupon, a recess is taken.)
23
24
25
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1 THE CLERK: Jury entering.
2 (Whereupon, the jury at this time entered the
3 courtroom.)
4 THE COURT: Please be seated, members of the
5 jury.
6 You may proceed, Mr. Trabulus.
7 MR. TRABULUS: Thank you, your Honor.
8 Q Dr. Grossman, I am not sure that I got every one of
9 the different things that appeared below your signature
10 line, I think you said president, secretary, a couple of
11 othe r different positions.
12 Did you ever discuss with Mr. Gordon whether you
13 were these things, or what the significance of it was?
14 Yes or no?
15 A No.
16 Q Okay.
17 He never tried to -- withdrawn.
18 It is not a situation where if you asked him
19 about it, he would refuse to answer, anything like that;
20 is that correct?
21 A Yes.
22 Q And in fact, is it fair to say that whenever you
23 asked him any questions about the business, he would
24 respond?
25 A He always responded.
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1 THE COURT: Are we through with this?
2 MR. TRABULUS: Yes, we are, your Honor.
3 THE COURT: Okay.
4 MR. TRABULUS: At least I am through with it.
5 MR. WHITE: Is this okay -- we will move it.
6 Q Dr. Grossman, after you got your inv estment, $125,000
7 repaid with the 15 percent interest, did either you or
8 your wife have any expectation that any more money would
9 be coming to you on any regular basis?
10 A Not on a regular basis, no.
11 Q Did you have any expectation that any money was going
12 to be paid to you on some kind of a formula?
13 A No.
14 Q So, basically, it was a situation where you would get
15 money when, if, and under whatever circumstances
16 Mr. Gordon determined that it would go to you; is that
17 correct to say?
18 A There were two circumstances. One would be on that
19 basis that you just suggested, and the other basis would
20 be that we would get a percentage of the business profits,
21 once the business was sold.
22 Q If the business was sold?
23 A When and if.
24 Q And that would reflect a percentage of your
25 ownership?
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1 A That's correct.
2 Q Now, you mentioned that you had been -- withdrawn.
3 Up until the time you got the shareholder
4 compensation -- excuse me, the compensation agreement, I
5 think it is 593; the one you signed on January 26th,
6 1993.
7 A Yes.
8 Q Up until that time, point in time, you were aware
9 that Mr. Gordon was receiving money from the company, from
10 Who's Who; is that correct?
11 A I made that assumption.
12 Q Did you have any idea how much, whether it be by way
13 of a loan or salary or anything like that?
14 A I had no knowledge.
15 Q Did you ever ask him?
16 A No.
17 Q Was it of any concern to you?
18 A I always felt it was his business and he could do
19 with it what he wanted.
20 Q So, when you found out about the loans and exchanges,
21 there was nothing there that was inconsistent with
22 anything you were told previously; is that correct?
23 A It didn't trouble me at all.
24 Q All right.
25 Now, I think you testified that Mr. Gordon said
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1 something to you that made you understand at a certain
2 point in time the amount taken in in terms of loans would
3 be credited against salary; is that fair to say?
4 A That was my understanding.
5 Q Now, in that conversation where Mr. Gordon spoke to
6 you, do you have a clear recollection as to whether he
7 said when that would happen?
8 A Not really.
9 Q So, it wasn't a situation where he told you that it
10 would happen on a regular basis or annual basis, just at
11 some point?
12 A I only made the assumption it would be annual. But
13 it could be at some reconciliation date otherwise.
14 Q It was your understanding it would happen once --
15 withdrawn.
16 Did Mr. Gordon make it clear to you that it was
17 his intention that the full amount of the loans would be
18 repaid?
19 A I also got that gist as well.
20 Q Did he ever discuss with you how much of the loans
21 had been repaid?
22 A I never knew the full amount or anything about it.
23 Q Okay.
24 One other point.
25 I asked you before about the trustee's claim
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1 against you. And I just want to make it clear, the
2 trustee was also pursuing a claim against Mr. Gordon, was
3 he not?
4 A I presume initially he was making a claim against
5 Mr. Gordon.
6 Q And the same claim for three and a half million
7 dollars he was pursuing against you and your wife, he was
8 also pursuing against Mr. Gordon? Is that correct? Is
9 that your understanding?
10 A My understanding was when that well was dry, he came
11 after us.
12 Q Okay.
13 But it wasn't a situation where Mr. Gordon --
14 where he had given up -- withdrawn.
15 MR. TRABULUS: No further questions.
16 THE COURT: Anything else?
17 MR. GEDULDIG: One or two, Judge.
18
19 RECROSS-EXAMINATION
20 MR. GEDULDIG:
21 Q Doctor, you testified on both direct and redirect
22 about this incident that took place at your house when
23 this postal inspector, Biegelman, approached you; do you
24 recall that?
25 A Yes, I do.
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Grossman-recross/Geduldig
1 Q It was a dista steful experience; is that right?
2 A Yes.
3 Q Did you ever come in contact with that Postal
4 Inspector Biegelman after that date at your house?
5 A No. I saw him one day, but I never had occasion to
6 talk to him.
7 Q You also testified on redirect with Mr. White, I
8 believe, regarding the fact that you and Mr. Gordon at one
9 point in time had had the same bankruptcy attorneys; is
10 that right?
11 A Yes.
12 Q And then there came a point later on that you hired
13 your own bankruptcy lawyer?
14 A That's correct.
15 Q Can you tell us for how long approximately, how long
16 a period of time you and Mr. Gordon had the same
17 bankruptcy attorney?
18 A I can't tell you that because I can't tell you how
19 long he had that attorney. All I know is about the time
20 that it ended. And I don't know that exact date either at
21 this poin t.
22 Q Can you tell us how long a period of time you had
23 that attorney representing you with regard to the
24 bankruptcy?
25 A Just a few months.
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Grossman-recross/Geduldig
1 Q Okay.
2 And you dropped that attorney at the suggestion
3 of Mr. Gordon's criminal lawyer, right?
4 A No.
5 We hired a California attorney who represented us
6 at that time, and then he is the one who advised us to
7 hire a New York attorney.
8 Q Now, you testified a little while ago about how the
9 trustee in the bankruptcy petition came after you because
10 you had funds and it was your understanding that
11 Mr. Gordon had no funds; is that right?
12 A No, it is not quite right. I said because the
13 bankruptcy attorney made the mistaken assumption that we
14 had funds.
15 Q Okay.
16 Do you know whether or not Mr. Gordon had any
17 funds to pay any claims being lodged by the bankruptcy
18 trustee?
19 A I don't know that he had or didn't have. All I can
20 do was go on what was told to me by Mr. Gordon.
21 Q What was told to you?
22 A That he didn't have the funds.
23 Q When you entered into the Who's Who project in 1990,
24 late 1990, at that point in time did you know whether or
25 not Mr. Gordon had a tax liability then existing?
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1 A I did not know at that time.
2 Q Was it your understanding at that time, in May of
3 1990, that Mr. Gordon was a man of some financial means?
4 MR. TRABULUS: Objection, your Honor.
5 THE COURT: Sustained.
6 Q Was it your understanding that he had assets and was
7 worth mone y?
8 MR. TRABULUS: Objection, your Honor.
9 THE COURT: Sustained.
10 MR. GEDULDIG: I have no other questions.
11 THE COURT: Anything else?
12 MR. WALLENSTEIN: Nothing further, your Honor.
13 MR. TRABULUS: Nothing.
14 MR. WHITE: No, your Honor.
15 THE COURT: All right.
16 You may step down.
17 (Whereupon, at this time the witness left the
18 witness stand.)
19 THE COURT: Please call your next witness.
20 MR. WHITE: Your Honor, the government calls
21 Frances Callahan.
22 THE COURT: Step up.
23 Please raise your right hand
24
25
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1 F R A N C E S C A L L A H A N,
2 called as a witness, having been first
3 duly sworn, was examined and testified
4 as follows:
5
6 THE COURT: Please state your full name. And
7 spell your last name.
8 THE WITNESS: Frances Callahan, C A L L A H A N.
9
10 DIRECT EXAMINATION
11 BY MR. WHITE:
12 Q Ms. Callahan, can you tell us how you are employed?
13 A I am employed by the Estates I Condominiums. I am
14 the manager.
15 THE COURT: Is that O N E?
16 THE WITNESS: Roman numeral one.
17 THE COURT: Estates Roman 1?
18 THE WITNESS: Estates at North Hills, Roman
19 numeral one.
20 THE COURT: You said you are what, the manager?
21 THE WITNESS: The manager.
22 Q And Estates at North Hills I is a condominium
23 development?
24 A A condominium complex.
25 Q Where is the development?
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1 A Located in Manhasset, Nassau County.
2 Q Is the property located at 200 Hummingbird Road
3 within you r development?
4 A It is the home within the development.
5 Q Are you familiar with a man named Bruce Gordon?
6 A Yes.
7 Q Do you see him in the courtroom today?
8 A Yes, I do.
9 Q Can you point him out and identify him by what he is
10 wearing?
11 A Mr. Gordon has a gray suit on and looks like a
12 burgundy tie, sitting at the front table on my left.
13 THE COURT: There are lots of people sitting at
14 the front table on your left.
15 THE WITNESS: He has gray hair, no glasses on.
16 He has a white shirt.
17 THE COURT: Very good.
18 Let the record indicate that the witness has
19 identified the defendant, Bruce Gordon.
20 Q Now, Ms. Callahan, can you tell us how it is you know
21 Mr. Gordon?
22 A Mr. Gordon is a homeowner at the Estates. And I know
23 mostly all of the homeowners, not intimately, but I know
24 him by sight.
25 Q Okay.
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1 Now, do you know -- do you know which property at
2 the development Mr. Gordon owns?
3 A Yes, I do.
4 Q Which one?
5 A 200 Hummingbird Road.
6 Q Do you know who the previous owners of 200
7 Hummingbird Road were?
8 A Yes, I do.
9 Q Who are they?
10 A The last name is Keller, K E L L E R, Gerald and
11 Barbara.
12 THE COURT: Gerald is G E R A L D?
13 THE WITNESS: G E R A L D.
14 Q Now, do you know when the Kellers sold 200
15 Hummingbird Road?
16 A I believe, without my records, that it was January of
17 '93.
18 Q Do you know who they sold it to?
19 A They sold the unit to Mr. Gordon.
20 Q Do you know whether the actual named owner is
21 Mr. Gordon or some other entity?
22 A It is some other entity.
23 Q And what other entity is it?
24 A Publishing Ventures.
25 Q Describe for us the Estates at North Hills, what is
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Callahan-direct/White
1 it like?
2 A Condominium complex. It has 134 homes within the
3 complex. The homes are either in a two-cluster or a
4 four-cluster.
5 Q In addition to the homes, is there anything else
6 included within the development?
7 A Yes. We have a clubhouse where my office is located,
8 and within the clubhouse there is a great room, and
9 downstairs there is an exercise room. There is an outdoor
10 swimming pool, three tennis courts.
11 Q Can you tell us currently what the homes in the
12 development go for?
13 A Well, there are five models, so they range in price
14 from 450,000 to probably 800,000.
15 Q Now, are you familiar with the particular model of
16 home at 200 Hummingbird Road?
17 A Yes, I did.
18 Q Can you ask describe that for us.
19 A Yes. It is what we call an Emerald Bay, an E model.
20 And it is two stories. It has three bedrooms, with the
21 master bedroom being on the main level. And it has three
22 and a half baths, a dining room, a living room, a den, a
23 basement, two-car garage. It has a back patio and a side
24 atrium.
25 Q Do the owners of homes in the development have to pay
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1 common charges?
2 A Yes, they do, monthly.
3 Q Tell us what the common charges are?
4 A Currently the common charges range for the smallest
5 unit, they are 386 a month, and for the largest, they are
6 727.
7 Q And what sort of costs do the commo n charges cover?
8 A Common charges cover all of the fees to really run
9 the condominium, which include twenty-four hour guard
10 service, the running of the swimming pool, the paying of
11 the maintenance men. We have two maintenance men on the
12 staff, the paying of the salaries, all of the water bills
13 to run the sprinkler system, the maintenance of the
14 sprinkler system, roof repairs, lawn maintenance,
15 landscaping, my salary, electricity for the clubhouse.
16 Q Okay.
17 Now, let me show you Government's Exhibit 673.
18 THE COURT: Is that for identification?
19 MR. WHITE: Identification, your Honor. I
20 apologize.
21 (Handed to the witness.)
22 Q If you can look through those, please.
23 A You want me to look through these checks?
24 Q Yes.
25 THE COURT: Briefly. Do you know what they are?
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1 THE WITNESS: I recognize some of them.
2 THE COURT: You don't have to look through each
3 one, what are they?
4 THE WITNESS: It looks like checks in a checking
5 account, some of them I recognize.
6 MR. WHITE: Mr. Trabulus is looking for them, and
7 I believe he will stipulate to them, and the witness will
8 be able to identify some of the checks in that exhibit.
9 Q Meanwhile if you can look at the packet of 673 at the
10 following checks, check numbers 1006, 1013, 1023, 1029,
11 1037, 1041, 1056 and 57. Do you have that one?
12 A Uh-huh -- 57 is not mine.
13 Q Excuse me, 1056. 1067.
14 A Okay.
15 Q 1079, do you have that one?
16 A 1079, no.
17 Q Okay, if you can look for 1087.
18 A Here is 1079, out of order:
19 1087, yes.
20 Q Finally, 1098.
21 A That one dropped. Okay.
22 (Whereupon, at this time there was a pause in the
23 proceedings.)
24 (Mr. White confers with Mr. Trabulus.)
25 THE WITNESS: I just took these out.
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1 MR. WHITE: Your Honor, the government would
2 offer 673, which are checks of Publishing Ventures, Inc.
3 MR. TRABULUS: No objection.
4 THE COURT: Government's Exhibit 673 in
5 evidence.
6 (Government's Exhibit 673 received in evidence.)
7 Q Now, Ms. Callahan, the checks I read out the numbers
8 before to you, that you reviewed, do you recognize those?
9 A Yes.
10 Q What are they?
11 A The checks to pay the monthly common charges, 1993.
12 Q And those checks, who endorsed them on the back?
13 A The endorsement is of the Estate, with the exception
14 of one. I don't s ee an endorsement on it, I don't know
15 why.
16 Q Are they all written to Estates at North Hills,
17 though?
18 A Yes, they are.
19 Q From the dates and amounts of the checks, do you know
20 what they are for?
21 A The monthly common charges to the Emerald Bay.
22 Q What is the account on which the checks are drawn?
23 A They are drawn on Publishing Ventures.
24 Q What do you say the years the checks were written
25 were?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
657
Callahan-direct/White
1 A 1993.
2 Q And how much were the monthly common charges for the
3 condo in 1993?
4 A 657 per month.
5 MR. WHITE: The government offers 675, which is
6 the checks in question for 1994.
7 THE COURT: Any objection?
8 MR. TRABULUS: No objection.
9 THE COURT: Government's Exhibit 675 in
10 ev idence.
11 (Government's Exhibit 675 received in evidence.)
12 Q Ms. Callahan, if you look at
13 Government's Exhibit 675, which are the checks sticking
14 out from that packet --
15 THE COURT: What year is that for?
16 MR. WHITE: 1994.
17 (Handed to the witness.)
18 A I looked that them.
19 Q Let me read the check numbers.
20 1108, 1114, 1121, 1124, 1128, 1130, 1134.
21 Do you see those?
22 A Yes, I do.
23 Q Who are those checks made to?
24 A Made to the estate at North Hills I.
25 Q And, again, from the dates and amounts of the checks,
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
658
Callahan-direct/White
1 can you identify what they are for?
2 A These are for the common charges for 1994.
3 Q What account are the checks drawn on?
4 A Publishing Ventures, Inc.
5 Q How much were the mont hly common charges in 1994?
6 A $657 per month.
7 MR. WHITE: The government would offer 678,
8 Publishing Ventures checks for 1995.
9 THE COURT: Any objection?
10 MR. TRABULUS: No objection.
11 THE COURT: Government's Exhibit 678 in
12 evidence.
13 (Government's Exhibit 678 received in evidence.)
14 (Handed to the witness.)
15 Q Ms. Callahan, let me read the check numbers if you
16 can look at that packet. 1138, 1139, 1141.
17 Do you see those there?
18 A Yes, I do.
19 Q And who are they made out to?
20 A The Estates at North Hills.
21 Q Can you tell what they are for?
22 A Common charges, 1995.
23 Q And it is drawn on what account?
24 A Publishing Ventures, Inc.
25 Q How much were the common charges in 1995?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
659
Callahan-direct/White
1 A 677 per month.
2 MR. WHITE: Your Honor, no further questions.
3 THE COURT: Cross-examination.
4
5 CROSS-EXAMINATION
6 BY MR. TRABULUS:
7 Q Good afternoon. I am Mr. Gordon's lawyer.
8 Have you ever been inside 200 Hummingbird?
9 A Yes, I have.
10 Q And were you there at a point where Mr. Gordon
11 occupied a portion of it?
12 A I was there after Mr. Gordon moved out. I was never
13 in the house when Mr. Gordon lived in it.
14 Q Do you know when he lived in it whether or not there
15 was an office maintained within it?
16 A I do not know that.
17 Q Do you have any idea whether or not Mr. Gordon paid
18 Publishing Ventures rent for the condominium?
19 A I have no knowledge of that.
20 Q It is your knowledge that the owner of the
21 condominium was Publishing Ventures, Inc. and not
22 Mr. Gordon; is that correct?
23 A Yes, that's my understanding.
24 Q And he was the person with whom you dealt, however,
25 concerning the condominium during the time that Publishing
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
660
Callahan-cross/Trabulus
1 Ventures, Inc. owned it?
2 A Yes.
3 Q He was the representative of Publishing Ventures,
4 Inc. at the time; is that correct?
5 A Yes, in the beginning he lived there.
6 MR. TRABULUS: No further questions -- excuse
7 me.
8 Q When you say in the beginning, were you aware of any
9 renovations or remodeling done to it before he lived in
10 it?
11 A I am sorry, before he owned the house or --
12 Q Before Publishing Ventures.
13 A Before Publishing Ventures owned the house.
14 Q Was there a period of time prior to Publishing
15 Ventures acquired the property that nobody was living in
16 it and renovations were going on?
17 A Yes.
18 Q Do you know when Mr. Gordon first started staying in
19 it?
20 A I don't know that exactly.
21 MR. TRABULUS: No further questions.
22 THE COURT: Anything else?
23 MR. WHITE: No, your Honor.
24 THE COURT: You may step down, Ms. Callahan.
25 THE WITNESS: Thank you.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
661
Callahan-cross/Trabulus
1 (Whereupon, at this time the witness left the
2 witness stand.)
3 THE COURT: Call your next witness.
4 MR. WHITE: Your Honor, the government calls
5 Peter Jukoff, J U K O F F.
6 THE COURT: Step up, Mr. Jukoff.
7 Put your coat down, please.
8 THE WITNESS: Yes, sir.
9 THE COURT: Raise your right hand.
10
11 P E T E R J U K O F F,
12 called as a witness, having been first
13 duly sworn, was examined and testified
14 as follows:
15
16 THE COURT: Please be seated.
17 State your full name and spell your last name.
18 THE WITNESS: Peter Jukoff, J U K O F F.
19
20 DIRECT EXAMINATION
21 BY MR. WHITE:
22 Q Mr. Jukoff, can you tell us what you do for a living?
23 A A general contractor.
24 Q And what is the name of your contracting firm?
25 A Matchless Construction, M A T C H L E S S.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
662
Jukoff-direct/White
1 Q What sort of construction work does Matchless
2 Construction do?
3 A Generally residential renovation work.
4 Q And where is your company's office?
5 A We are located in Little Neck.
6 Q Now, do you know a man named Bruce Gordon?
7 A Yes, I do.
8 Q And do you see him in the courtroom here today?
9 A Yes.
10 Q C ould you point him out, please and identify him by
11 what he is wearing?
12 A Mr. Gordon is sitting there wearing the gray suit.
13 THE COURT: Let the record indicate that the
14 witness has identified the defendant Bruce Gordon.
15 Q Now, how do you know Mr. Gordon?
16 A I had done a job for him.
17 Q Where was this job you had done for him?
18 A In the Estate Hummingbird Lane in Manhasset.
19 Q Do you know Mr. Gordon any other way besides that
20 job?
21 A Mr. Gordon is the brother of my wife's in-laws.
22 Q Let me ask you this, do you know Joyce and Richard
23 Grossman?
24 A Yes, I do.
25 Q What is your relationship to them?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
663
Jukoff-direct/White
1 A Again, they are my sister's in-laws and friends of
2 our families.
3 Q So your sister is married to the Gr ossman's son; is
4 that right?
5 A Correct.
6 Q Now, the work you did at Hummingbird Road, do you
7 recall approximately when that was?
8 A I believe '93.
9 Q And can you tell us approximately how much you were
10 paid to perform the construction work on the Hummingbird
11 Road property?
12 A I believe the job ran upwards from $200,000.
13 Q Let me show you Government's Exhibit 646 for
14 Identification.
15 (Handed to the witness.)
16 Q If you could look through those and tell me if you
17 recognize them?
18 A These are all checks paid to our company for the work
19 we performed.
20 MR. WHITE: Your Honor, the government offers
21 646.
22 THE COURT: Any objection?
23 MR. TRABULUS: No objection.
24 THE COURT: Government's Exhibit 646 in
25 evidence.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORT ER
664
Jukoff-direct/White
1 (Government's Exhibit 646 received in evidence.)
2 Q Now, Mr. Jukoff, can you tell us what the name of the
3 account on which those checks are drawn are in?
4 A Publishing Ventures, Inc.
5 Q When your company performs work for a customer, did
6 it prepare invoices or statements to a customer?
7 A Yes, of course.
8 Q Tell us how that is prepared?
9 A Generally, as the work proceeds, either we are
10 working from a list of tasks that we are to perform that
11 have a price pre-determined, or from a work order that has
12 been added to the jobs, like a change order, something
13 that the client wishes to add. And we bill against those
14 papers as the work proceeds.
15 Q Now, in these invoices and statements, who prepares
16 them?
17 A Well, I have a secretary to prepare them. I do the
18 actual preparatio n work and she turns it into a paper.
19 Q You mentioned a work order before. What is a work
20 order?
21 A A work order is something that is added to the job, a
22 task that we are to perform. For instance, we are going
23 to do ten new outlets in a kitchen, let's say. The client
24 decides he wants 12. There is ten in the original
25 contract. So there would be two added on a work order so
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
665
Jukoff-direct/White
1 there is a record of the additional work.
2 Q Mr. Jukoff, let me show you Government's Exhibit 647
3 A, Abel through H, Harry, for Identification.
4 (Handed to the witness.)
5 A You want me to look through them all?
6 Q If you could just look through each of them.
7 A Okay.
8 (Whereupon, at this time there was a pause in the
9 proceedings.)
10 Q Now, can yo u tell us what those exhibits are?
11 A Yes. They appear to be pretty much all the records
12 from the job we performed there.
13 Q Does it include the invoices, and the statements and
14 the work orders?
15 A Without going through each and every page, it appears
16 to be.
17 Q Have you previously reviewed those at the U.S.
18 Attorney's office?
19 A Yes, I have.
20 Q Was it your regular practice of your business to make
21 and keep those kind of records?
22 A Yes, it was.
23 Q Did you do that as part of the regular course of your
24 business?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
666
Jukoff-direct/White
1 MR. WHITE: Your Honor, the government offers 647
2 A through H.
3 THE COURT: Any objection?
4 MR. TRABULUS: No objection.
5 THE COURT: Government's Exhibits 647-A for Abel
6 through 647-H for How, in evidence.
7 (Government's Exhibits 647-A through 647-H
8 received in evidence.)
9 Q Mr. Jukoff, can you describe for us generally the
10 work that your company performed at Hummingbird Road?
11 A We had done fairly extensive renovation work there,
12 including the kitchen, a new master bathroom, considerable
13 wall work, electrical work. We have done granite tile
14 work there, a fairly nice job there.
15 Q Now, with respect to the kitchen, can you tell us
16 what work you performed there?
17 A The kitchen we did a complete renovation. We had
18 removed all the existing equipment, and supplied and
19 installed new kitchen cabinets, granite counter tops. We
20 raised the ceiling in the kitchen. We were able to do
21 that because of the construction. Granite floor, complete
22 job, new appliances and so forth.
23 Q Now , with respect to the appliances, like an oven or
24 a dishwasher, who selected what would be included in the
25 kitchen?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
667
Jukoff-direct/White
1 A Mr. Gordon had selected those.
2 Q Did you have any discussions with him regarding the
3 dishwasher in the kitchen?
4 A Yes. On two separate occasions, as I recall.
5 Q Let's start with the first one. What was your
6 discussion with him?
7 A When Mr. Gordon first moved into the apartment, he
8 wanted to change the old dishwasher that was there. He
9 had asked me what I thought he should get. And I said,
10 get a Kitchen Aide, they are very good. He said go ahead
11 and do it.
12 We put a new Kitchen Aide dishwasher in. That
13 was it for a while.
14 Q Did you have a later discussion with him about the
15 dishwasher?
16 A As the new kitchen design progressed, Mr. Gordon
17 had -- and he started to shop for the appliances, he found
18 a fancier dishwasher that he liked more, it was a Bosch
19 dishwasher.
20 Q How do you spell that?
21 A B O S C H. And he decided that he preferred to have
22 that one. And the new kitchen, he installed that one, and
23 had us remove the Kitchen Aide.
24 Q Did you have discussion with him what to do with the
25 Kitchen Aide?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
668
Jukoff-direct/White
1 A Yes, I did.
2 Q Tell us what that was?
3 A Mr. Gordon was kind enough to let me take that
4 Kitchen Aide home and it is now in my kitchen.
5 Q Is it still operating?
6 A Oh, yes, it sure is.
7 Q Now, did you have a discussion with Mr. Gordon
8 regarding the light switches at the condominium?
9 A On a couple of occasions as well, yes.
10 Q Tell us what happened on the first discussion?
11 A When we did the original wiring of the house, which
12 was fairly extensive, we had rewired a lot of the circuits
13 and had done some extensive lighting work there. And I
14 don't recall -- I am pretty certain the original set of
15 switches that we had used were the Lutron Decora switches,
16 which is a slide dimmer with a little toggle switch at the
17 bottom.
18 THE COURT: Lutron, spell that.
19 THE WITNESS: L U T R O N.
20 THE COURT: And the second word?
21 THE WITNESS: Decora, D E C O R A.
22 Q Now, after you installed those, did you have a
23 discussion with Mr. Gordon?
24 A Yes. After we had all that stuff in, Mr. Gordon had
25 located or seen a switch that he liked better, and had us
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
669
Jukoff-direct/White
1 change the whole system over to what he call the Nova-T.
2 More of a commercial model. He liked it better. So we
3 changed all the switches to the Nova-T's.
4 Q Did your company perform any work with respect to the
5 bathrooms in the condominium?
6 A Yes, we did.
7 The master bathroom was originally set up as two
8 bathrooms, like a his and hers situation. And we
9 converted it to more of a single bathroom with a glass
10 partition. Originally it had a doorway between the two.
11 What we ended up with was we knocked the wall out
12 between the two bathrooms, because one of the bathrooms
13 was on the outside of the house and had the only window.
14 To get light into the inner bathroom we put up a glass
15 block wall. That bathroom also was marble with inserts.
16 It was a pretty fancy bathroom.
17 Q Tell us what you did w ith respect to the shower in
18 that bathroom?
19 A It was a custom-built shower. It had multiple shower
20 heads, pressure balanced shower body, individual volume
21 controls to control the overheads, body sprays and hand
22 sprays. A pretty sophisticated system.
23 Q What do you mean by body sprays and hand sprays?
24 THE COURT: We know what that means. Let's move
25 along. We had enough interior decorating for now.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
670
Jukoff-direct/White
1 MR. WHITE: One last point, your Honor.
2 Q Can you describe the vacuum system at the home?
3 A It was a central vacuum system.
4 Q Meaning what?
5 A It has a unit in the basement that has hoses connect,
6 plastic tubing connected throughout the house, so you can
7 just plug a hose in as opposed to dragging a regular
8 vacuum cleaner around .
9 Q Are you familiar with a company called Amaru,
10 A M A R U, Tile?
11 A Yes.
12 Q Who are Amaru Tile?
13 A Amaru provided the wall tiles for the bathrooms.
14 Q And what sort of substance were the tiles?
15 A It was an Italian marble.
16 Q Are you familiar with a company called Kolson,
17 K O L S O N?
18 A Yes.
19 Q Who are Kolson?
20 A Kolson is another supplier company, and they supplied
21 most of the faucets and fittings and fixtures for the
22 bathrooms as well.
23 Q And are you familiar with a company called Marble
24 Modes, M O D E S?
25 A Yes.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
671
Jukoff-direct/White
1 Q And did they supply anything at the property?
2 A Marble modes supplied the black granite tile that was
3 used for the flooring in the kitchen, and the entrance,
4 and the hallway to the bedroom.
5 Q And are you familiar with a company called
6 St. Charles Kitchens?
7 A Yes, I am.
8 Q What did they supply?
9 A St. Charles supplied the kitchen cabinets.
10 Q Did you install the kitchen cabinets?
11 A Yes, we did.
12 Q Do you know how much the kitchen cabinets cost?
13 A I remember the invoice was around $30,000 for those
14 cabinets.
15 MR. WHITE: Your Honor, I have no further
16 questions.
17 THE COURT: All right, cross-examination.
18
19 CROSS-EXAMINATION
20 BY MR. TRABULUS:
21 Q Mr. Jukoff, I am Bruce Gordon's lawyer.
22 Did you have any conversation with him concerning
23 any use the condominium was going to be put to what the
24 condominium was going to be used to, any discussions at
25 all?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
672
Jukoff-cross/Trabulus
1 A Yes.
2 Q What were those discussions?
3 A Bruce had to entertain for his business, and it was
4 my understanding that much of the finishes that we were
5 providing was for that purpose.
6 Q And were you also aware of any plans to put in an
7 office facility in one of the bedrooms?
8 A Yes. Bruce had an office in one of the bedrooms.
9 Q Did you actually see that office once it was
10 installed?
11 A I don't know ultimately, but I certainly saw the
12 computer, the phone, the file drawers, and so forth he had
13 working there.
14 Q A copy machine?
15 A I believe so.
16 Q Did you ever see him actually working there at the
17 office?
18 A Of course.
19 Q Okay.
20 And no further questions.
21 THE COURT: Anything else?
22 MR. WHITE: No, your Honor.
23 THE COURT: You may step down.
24 Please call your next witness.
25 MR. WHITE: Your Honor, the government calls
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
673
Jukoff-cross/Trabulus
1 Arlene Ruggieri, R U G G I E R I.
2 THE COURT: Raise your right hand.
3
4 A R L E N E R U G G I E R I,
5 called as a witness, having been first
6 duly sworn, was examined and testified
7 as follows:
8
9 THE COURT: Please be seated.
10 State your full name and spell your last name.
11 THE WITNESS: Arlene Ruggieri, R U G G I E R I.
12 THE COURT: You may proceed.
13 MR. WHITE: Thank you.
14
15 DIRECT EXAMINATION
16 BY MR. WHITE:
17 Q Ms. Ruggieri, did you previously operate a business
18 called PFC Lifestyles?
19 A Yes.
20 Q And what sort of business was that?
21 A Custom furniture.
22 Q And what sort of custom-made furniture would you
23 make?
24 A We made from children's rooms to master bedrooms,
25 entertainment units, anything that was for the home we
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
674
Ruggieri-direct/White
1 made.
2 Q And who are the owners of that company?
3 A PFC, Patrick DePinto, Frank Bianco and Clyde
4 Ruggieri.
5 Q I think you will have to spell the names.
6 A D E P I N T O, Patrick DePinto. Frank Bianco,
7 B I A N C O, Clyde Ruggieri, R U G G I E R I.
8 Q Who is Clyde Ruggieri?
9 A My husband.
10 Q Do you know a man named Bruce Gordon?
11 A I do.
12 Q Do you see him in the courtroom here today?
13 A I do.
14 Q Point him out, please?
15 A Sitting in the front table, second seat in.
16 THE COURT: Second seat from your right or your
17 left?
18 THE WITNESS: From my right.
19 THE COURT: Your left?
20 THE WITNESS: My right, the second seat in.
21 THE COURT: Are you sure now?
22 THE WITNESS: Yes, the distinguished gentleman
23 with the white hair and gray suit.
24 THE COURT: Let the record indicate that the
25 witness has identified the defendant Bruce Gordon.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
675
Ruggieri-direct/White
1 Q Now, how do you know, Mr. Gordon?
2 A He purchased from us, custom furniture.
3 Q Can you tell us what sort of items Mr. Gordon
4 purchased?
5 A From my memory, we did an entertainment unit, library
6 unit. We did a book case, custom vanity. That's off the
7 top of my head.
8 Q Okay.
9 When you perform a job for a customer do you
10 provide the customer with invoices and statements of the
11 work performed?
12 A We do.
13 Q And who prepares those invoices and statements?
14 A I do.
15 Q And where do you get the information that you put on
16 the invoices and statements?
17 A From the design.
18 Q When the furniture is ready for delivery, do you
19 prepare any bills of lading?
20 A We do.
21 Q And who prepares those?
22 A I do.
23 Q Let me show you Government's Exhibit 644 for
24 Identification. You can take a look at it and tell me if
25 you recognize it.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
676
Ruggieri-direct/White
1 (Handed to the witness.)
2 A I do.
3 Q What are they?
4 A A custom invoice for items we were to manufacture for
5 the Bruce Gordon residence.
6 Q Does that packet also include statements and bills of
7 lading?
8 A Yes, it does.
9 Q Was it your regul ar practice to make and keep those
10 kind of records?
11 A Yes, it was.
12 Q Did you do it as part of your regular business?
13 A Yes, we did.
14 MR. WHITE: The government offers Exhibit 644,
15 your Honor.
16 THE COURT: Any objection?
17 MR. TRABULUS: No objection.
18 THE COURT: Government's Exhibit 644 in
19 evidence.
20 (Government's Exhibit 644 received in evidence.)
21 Q Can you tell us approximately when your company
22 performed work for Mr. Gordon?
23 A In 1993.
24 Q Let me show you Government's Exhibit 645, for
25 Identification.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
677
Ruggieri-direct/White
1 Can you look through them and tell me if you
2 recognize them.
3 A Yes.
4 Q What are they?
5 A Payments for the custom furniture.
6 Q Checks?
7 A Yes.
8 MR. WHITE: Your Honor, the government offers
9 645.
10 THE COURT: Any objection?
11 MR. TRABULUS: No.
12 THE COURT: Government's Exhibit 645 in
13 evidence.
14 (Government's Exhibit 645 received in evidence.)
15 Q Were those checks in payment for the job you did for
16 Mr. Gordon?
17 A Yes.
18 Q Now, can you tell us approximately how much you were
19 paid in connection with the work you did on the
20 Hummingbird Road property?
21 A Approximately $35,000.
22 Q Let me show you Government's Exhibit 645 A through D
23 for Identification.
24 (Handed to the witness.)
25 MR. WHITE: Your Honor, it is not in the bound
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
678
Ruggieri-direct/White
1 set, I have a set for the Court if your Honor wants them.
2 THE COURT: You can proceed. I will get it
3 later.
4 Q Ms. Ruggieri, can you tell us what these are?
5 A These are the design sketches for the furniture we
6 would manufacture for Mr. Bruce Gordon.
7 MR. WHITE: Your Honor, the government offers 645
8 A through D.
9 THE COURT: Any objection?
10 MR. TRABULUS: Your Honor, I don't have an
11 objection. I don't know that other counsel have seen
12 them.
13 MR. JENKS: I will object, your Honor, I don't
14 know the reason for introducing design sketches in a
15 criminal trial, for the sketches of condominium furniture
16 in a criminal case.
17 THE COURT: What is the purpose, other than for
18 idle curiosity?
19 MR. WHITE: Your Honor, to document the work
20 performed by Ms. Ruggieri's company.
21 THE COURT: You answered.
22 Now, these design sketches are in the $35,000?
23 THE WITNESS: Yes.
24 THE COURT: I will overru le the objection.
25 Government's Exhibit 645-A for Abel, through
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
679
Ruggieri-direct/White
1 645-D for Dog in evidence.
2 (Government's Exhibits 645-A through 645-D
3 received in evidence.)
4 Q Ms. Ruggieri, would you briefly look through each one
5 and tell us what is depicted in each one?
6 A You need a reference number?
7 Q Yes. Start with 645-A.
8 A 645-A, this is a custom entertainment library unit.
9 It houses a 35 inch TV, it has remote doors, and basically
10 for book shelf space.
11 THE COURT: You told us it was an entertainment
12 unit, library unit, book case and custom vanity?
13 THE WITNESS: No, I didn't say custom vanity
14 here.
15 THE COURT: No custom?
16 THE WITNESS: No.
17 THE COURT: An entertainment unit, library unit
18 and a book case?
19 THE WITNESS: The library unit would be where the
20 books are stored.
21 THE COURT: That's it, or is there more?
22 THE WITNESS: No. That's what this unit shows.
23 THE COURT: What else did you do? Altogether,
24 tell the jury what you did right now.
25 THE WITNESS: Okay.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
680
Ruggieri-direct/White
1 So that item explained the library unit.
2 The next is a book case, 645-B, a bookcase that
3 was custom-made. On 645-C is a custom computer desk that
4 we manufactured. And 641-D is another, this is a media
5 unit.
6 THE COURT: A what?
7 THE WITNESS: A media unit.
8 THE COURT: Media?
9 THE WITNESS: Media entertainment, television,
10 stereo, bar area.
11 THE COURT: I never heard of a media unit. I
12 have a television set.
13 MR. WHITE: Yo ur Honor, that's why we have the
14 diagrams.
15 THE WITNESS: That's a term in custom furniture,
16 media unit.
17 THE COURT: A term in custom furniture?
18 THE WITNESS: Right. An entertainment unit,
19 would that do it? The same thing.
20 MR. WHITE: Your Honor, no further questions.
21 THE COURT: Any cross-examination?
22 MR. TRABULUS: Briefly.
23
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
681
Ruggieri-cross/Trabulus
1 CROSS-EXAMINATION
2 BY MR. TRABULUS:
3 Q I am Mr. Gordon's lawyer.
4 645-C is a desk that was built?
5 A A computer desk.
6 Q A computer desk.
7 Was it your understanding that there was going to
8 be an office there?
9 A From memory I don't remember if there was going to be
10 an office there.
11 Q Did you actually talk with Mr. Gordon, or did someone
12 else from your company deal with him?
13 A My husband was the designer.
14 Q You yourself didn't deal with Mr. Gordon concerning
15 the purposes of these things?
16 A No, only the finances.
17 Q Only the what?
18 A The finances.
19 MR. TRABULUS: No further questions.
20 THE COURT: Anything else?
21 MR. WHITE: No, your Honor, not of this witness.
22 THE COURT: All right.
23 You may step down.
24 THE WITNESS: Thank you.
25 (Whereupon, at this time the witness left the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 witness stand.)
2 MR. WHITE: If I may, we have a witness here who
3 has been here all day who will take five minutes.
4 THE COURT: Bring him in, him, her, whichever.
5 MR. WHITE: Vincent Manngard, a him.
6 THE COURT: The jury will go along with that.
7 MR. WHITE: I am not so sure.
8 THE COURT: Okay.
9 Step up, please.
10
11 V I N C E N T M A N N G A R D,
12 called as a witness, having been first
13 duly sworn, was examined and testified
14 as follows:
15
16 THE COURT: Please be seated.
17 State your full name and spell your last name.
18 THE WITNESS: Vincent Manngard, M A N N G A R D.
19
20 DIRECT EXAMINATION
21 BY MS. SCOTT:
22 Q Good afternoon, Mr. Manngard.
23 A Good afternoon.
24 Q Please tell the jury what you do for a living?
25 A Rental business and building business.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Manngard-direct/Scott
1 Q And you rent -- you rent apartments; is that correct?
2 A Yes, I do.
3 Q And where do you rent apartments?
4 A Huntington, Northport area.
5 Q Do you know Br uce Gordon?
6 A Yes, I do.
7 Q And can you identify him for the Court by pointing
8 out where he is sitting and what he is wearing?
9 A He is wearing a blue shirt, red tie, reddish tie and
10 white hair.
11 THE COURT: We hear a different identification
12 each time, but that's interesting.
13 Where is he seated from the right, which number?
14 THE WITNESS: Second from the left.
15 THE COURT: From the left?
16 THE WITNESS: One gentleman and Bruce Gordon.
17 THE COURT: Second from the right?
18 THE WITNESS: Right.
19 THE COURT: Let the record indicate that the
20 witness identified the defendant Bruce Gordon.
21 Q How do you know, Mr. Gordon?
22 A I rented a townhouse to him.
23 Q Where is that townhouse?
24 A Northport.
25 Q When did you rent it to him?
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Manngard-direct/Scott
1 A 1990.
2 Q Did you rent to him for more than a year?
3 A No. For one year.
4 Q I am showing you Government's Exhibit 623, which
5 consists of six items, and 624 which consists of five
6 items.
7 (Handed to the witness.)
8 Q Do you recognize those?
9 A Yes, I do.
10 Q What are those?
11 A These are rent checks, monthly rent checks.
12 Q And are they for the property that you were renting
13 to Mr. Gordon?
14 A Yes, they are.
15 Q Can you --
16 MS. SCOTT: I offer Government's Exhibit 623 and
17 624, your Honor.
18 THE COURT: Any objection?
19 MR. TRABULUS: No objection.
20 THE COURT: Government's Exhibits 623 and 624 in
21 evidence.
22 (Government's Exhibit 623 received in evidence.)
23 (Government's Exhibit 624 received in evidence.)
24 Q Now, taking a look at those checks,
25 Government's Exhibit 623, were all of those checks filled
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
685
Manngard-direct/Scott
1 out in 1990?
2 A Yes, they were.
3 Q And they were all issued by Who's Who Worldwide; is
4 that correct?
5 A Yes.
6 Q They are made out to you?
7 A Yes.
8 Q Each of them is for $3,500. Except for one; is that
9 correct?
10 A Yes.
11 Q And the other one is for $7,000; is that correct?
12 A Yes.
13 Q And taking a look at 624, that consists of five
14 checks, correct?
15 A Correct.
16 Q And they are all made out to you?
17 A Right.
18 Q From Who's Who Worldwide; is that correct?
19 A Correct.
20 Q And each one of those is for $3,500 except for one;
21 is that correct?
22 A Correct.
23 Q And that additional on e is not for $3,500, it is for
24 $175; is that right?
25 A That's correct.
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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Manngard-direct/Scott
1 Q And those were made out in the year 1991?
2 A That is correct.
3 Q Mr. Manngard, can you tell us the address of the
4 apartment Mr. Gordon rented from you?
5 A 1 Lord, L O R D, Joe's Landing.
6 THE COURT: Joe's, J O E S?
7 THE WITNESS: Correct.
8 MS. SCOTT: Thank you. No further questions.
9 THE COURT: Anything else?
10 MR. TRABULUS: Briefly.
11
12 CROSS-EXAMINATION
13 BY MR. TRABULUS:
14 Q Mr. Manngard, do you know whether or not Mr. Gordon
15 maintained an office there in addition to living there?
16 A I have no idea.
17 Q You have no idea one way or another?
18 A No.
19 MR. TRABULUS: No further questions.
20 THE COURT: Anything else?
21 MR. WHITE: Nothing further.
22 THE COURT: You may step down, Mr. Manngard.
23 (Whereupon, at this time the witness left the
24 witness stand.)
25 THE COURT: Members of the jury, we will recess
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
687
1 until 9:30 tomorrow morning.
2 In the meantime please continue not to discuss
3 this case. I imagine that the people at home have given
4 up trying to make you talk. You refused to talk because
5 under your oath you are supposed to listen to me, and you
6 don't want to get impressions from people who have not
7 heard the evidence.
8 Keep an open mind. Come to no conclusions. Do
9 not visit any of the places involved in this case. And do
10 not read anything.
11 I have not, but if you do, don't read it.
12 Have a nice evening, and we will meet tomorrow
13 morning at 9:30.
14 Please recess yourselves.
15 (Whereupon, at this time the jury leaves the
16 courtroom.)
17 THE COURT: Mr. White, is it too early to
18 estimate how long your case will take? If it is, we will
19 wait.
20 MR. WHITE: I think it is, but I think by the end
21 of this week I will be able to give you a much firmer
22 estimate.
23 THE COURT: Very well; thank you.
24 9:30 tomorrow.
25 MR. TRABULUS: Your Honor, can we have the
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
688
1 government's witnesses for tomorrow identified?
2 THE COURT: Yes.
3 MR. WHITE: Initially it would be Joyce Grossman,
4 Jeanne Dietrich, D I E T R I C H, Steven Adler, and there
5 will be additional ones that I have to juggle who were
6 here today who have to come back. I will have to give
7 Mr. Trabulu s the order tomorrow, or later today.
8 MR. WALLENSTEIN: Give us the names anyway.
9 THE COURT: Tell us which ones you are juggling,
10 tell them.
11 MR. WHITE: All these witnesses at the end here I
12 put today because -- so they wouldn't have to come back
13 tomorrow.
14 I believe a Mr. Strom, S T R O M, will be here
15 tomorrow as well. I believe Mr. Irwin will be tomorrow,
16 I R W I N; I believe that's it.
17 MR. GEDULDIG: Is it correct that you will still
18 be on the tax aspect?
19 MR. WHITE: Yes.
20 MR. JENKS: Judge, can we have a prediction as to
21 how long Mr. White thinks the tax case will last?
22 MR. WHITE: Your Honor, it depends on the
23 cross-examination, which I have been pretty poor on
24 estimating so far. I think it will go the beginning of
25 this week and -- the end of this week and is the beginning
HARRY RAP APORT, CSR, CP, CM OFFICIAL COURT REPORTER
689
1 of next week.
2 THE COURT: 9:30 tomorrow.
3 (Case on trial adjourned until 9:30 o'clock a.m.,
4 Wednesday, January 21, 1998.)
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6
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HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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1 I-N-D-E-X
2
W-I-T-N-E-S-S-E-S
3
PAGE LINE
4 M A D E L I N E M I D D L E M A R K.......... 463 11
DIRECT EXAMINATION................................ 464 1
5 CROSS-EXAMINATION................................. 468 21
CROSS-EXAMINATION................................. 471 22
6 CROSS-EXAMINATION................................. 473 1
CROSS-EXAMINATION................................. 474 8
7
B R I A N L U C A S.......................... 488 22
8 DIRECT EXAMINATION................................ 489 7
9 R I C H A R D C. G R O S S M A N......... 492 1
DIRECT EXAMINATION................................ 492 11
10 CROSS-EXAMINATION................................. 558 6
CROSS-EXAMINATION................................. 605 1
11 CROSS-EXAMINATION................................. 615 7
REDIRECT EXAMINATION.............................. 623 7
12 RECROSS-EXAMINATION............................... 637 6
RECROSS-EXAMINATION............................... 646 19
13
F R A N C E S C A L L A H A N................ 650 1
14 DIRECT EXAMINATION................................ 650 10
CROSS-EXAMINATION................................. 659 5
15
P E T E R J U K O F F...................... 661 11
16 DIRECT EXAMINATION................................ 661 20
CROSS-EXAMINATION................................. 671 19
17
A R L E N E R U G G I E R I................. 673 4
18 DIRECT EXAMINATION................................ 673 15
CROSS-EXAMINATION................................. 681 1
19
V I N C E N T M A N N G A R D................ 682 11
20 DIRECT EXAMINATION................................ 682 20
CROSS-EXAMINATION................................. 686 12
21
22
23
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
691
1 E-X-H-I-B-I-T-S
2 Government's Exhibit 485 through 495 received in
evidence.......................................... 476 15
3 Government's Exhibit 525 received in evidence..... 490 17
Government's Exhibit 577 received in evidence..... 496 18
4 Government's Exhibit 578 received in evidence..... 499 14
Government's Exhibit 578-A received in evidence... 499 15
5 Government's Exhibit 579 received in evidence..... 502 4
Government's Exhibit 580 received in evidence..... 502 5
6 Government's Exhibit 581 received in evidence..... 506 5
Government's Exhibit 802 received in evidence..... 507 25
7 Government's Exhibit 804 received in evidence..... 508 1
Government's Exhibit 815 received in evidence..... 508 2
8 Government's Exhibit 585 received in evidence..... 517 10
Government's Exhibit 586 received in evidence..... 517 11
9 Government's Exhibit 589 through 592 received in
evidence.......................................... 517 12
10 Government's Exhibit 585-A received in evidence... 518 14
Government's Exhibit 584 received in evidence..... 522 12
11 Government's Exhibit 583 received in evidence..... 526 8
Government's Exhibit 594 received in evidence..... 532 16
12 Government's Exhibit 595 received in evidence..... 532 17
Government's Exhibit 596 received in evidence..... 533 21
13 Government's Exhibit 597 received in evidence..... 536 19
Government's Exhibit 598-A received in evidence... 536 20
14 Government's Ex hibit 593 received in evidence..... 540 7
Government's Exhibit 610 received in evidence..... 543 25
15 Government's Exhibit 610-A received in evidence... 544 1
Government's Exhibit 610-B received in evidence... 545 16
16 Government's Exhibit 800 received in evidence..... 554 19
Government's Exhibit 801 received in evidence..... 555 20
17 Government's Exhibit 807 received in evidence..... 636 21
Government's Exhibit 673 received in evidence..... 656 6
18 Government's Exhibit 675 received in evidence..... 657 11
Government's Exhibit 678 received in evidence..... 658 13
19 Government's Exhibit 646 received in evidence..... 664 1
Government's Exhibits 647-A through 647-H
20 received in evidence.............................. 666 7
Government's Exhibit 644 received in evidence..... 676 20
21 Government's Exhibit 645 received in evidence..... 677 14
Government's Exhibits 645-A through 645-D
22 received in evidence.............................. 679 2
Government's Exhibit 623 received in evidence..... 684 22
23 Government's Exhibit 624 received in evidence..... 684 23
24
25
HARRY RAPAPORT, CSR, CP, CM OFFICIAL COURT REPORTER
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This site is concerned with The Illicit Smashing of Who's Who Worldwide Excecutive Club, and the double scandal of government and judical corruption in one of the Unholy Federal Trials and the concomitant news media blackout regarding this incredible story.
Sixteen weeks of oft-explosive testimony, yet not a word in any of 1200 news archives. This alone supports the claim that this was a genuinely dirty trial; in fact, one of the dirtiest federal trials of the 20th century.
Show your support for justice, for exoneration of the innocent, and perhaps most importantly, government accountability, by urgently contacting your Senator, the White House, and the U.S. Department of Justice.